Andrew Bradford West v. Oscar Leo Quintanilla
573 S.W.3d 237
Tex.2019Background
- West (petitioner) and Quintanilla (respondent) were former business partners who executed a 2014 Commodity Trading Agreement (CTA), a promissory note (West liable for up to $5M) and a security agreement after trading losses in 2014 left West owing about $7M.
- On March 1, 2015 the parties executed a written Purchase Agreement for West to sell assets to Quintanilla for about $4.5M; that agreement contains an "Entire Agreement" clause and a reference spreadsheet listing estimated asset values.
- West alleges an oral "March 2015 Sale" contemporaneous with the Purchase Agreement: Quintanilla would claim West’s $14M trading losses (tax benefit) and buy West’s assets at below-market prices, and those benefits together would satisfy West’s $7M CTA debt.
- West says Quintanilla (through counsel) surrendered the original CTA note and security agreement with handwritten notations "Pd 3-1-15" and a folder note "did not exist," indicating discharge of the debt.
- After their relationship soured, Quintanilla filed lien documents against West’s mineral interests; West sued for slander of title and fraudulent lien under the TCPA, alleging the liens were false because his debt had been satisfied.
- The court of appeals dismissed West’s TCPA-driven claims, holding the parol evidence rule barred proof/enforcement of the alleged March 2015 Sale; the Texas Supreme Court granted review.
Issues
| Issue | West's Argument | Quintanilla's Argument | Held |
|---|---|---|---|
| Whether the parol evidence rule bars enforcement of West's alleged March 2015 Sale | The March 2015 Sale is a separate collateral oral agreement (or a post-2014 modification) that satisfied the CTA debt and is not superseded by the 2015 Purchase Agreement | The written 2015 Purchase Agreement (with Entire Agreement clause) is integrated and contemporaneous with the oral deal, so parol evidence is barred and West cannot enforce the oral agreement | Parol evidence rule does not bar enforcement: the March 2015 Sale is collateral to and consistent with the written Purchase Agreement and addresses a different subject matter (debt satisfaction) |
| Whether West met his TCPA prima facie burden to show falsity of Quintanilla’s lien filing | West provided clear and specific pleadings and evidence (his testimony, original documents with handwritten "paid" notations, and evidence of the parties’ conduct) to show the debt was satisfied | Quintanilla contended West’s evidence is precluded by parol evidence rule and otherwise insufficient; also alleged forgery and lack of consideration | Because parol evidence does not preclude the alleged oral agreement, West met the TCPA threshold for falsity at this interlocutory stage; the court remanded other issues (causation, damages, defenses) to the court of appeals |
| Whether the alleged oral agreement is inconsistent because it supplies additional consideration or contradicts stated asset values | The oral agreement provided separate consideration (tax-loss claim and crediting of asset-profit) and did not alter the Purchase Agreement’s express obligations | The oral deal contradicts the Purchase Agreement’s recited purchase prices and asset values, so it is inconsistent and barred | The Court held the alleged oral agreement was collateral and consistent even if it supplied additional consideration; asset "estimated values" were treated as recitals not contractual terms, so parol evidence may be used to show the collateral arrangement |
| Whether the alleged debt discharge (surrender of note) was sufficient to show discharge under commercial code | West relied on surrender of the negotiable instruments and contemporaneous statements by counsel to show discharge | Quintanilla argued waiver of the issue and insufficiency of evidence | The Court declined to resolve these subsidiary arguments and remanded them to the court of appeals for consideration because it reversed on the parol-evidence ground |
Key Cases Cited
- First Bank v. Brumitt, 519 S.W.3d 95 (Tex. 2017) (parol evidence rule and integrated-contract principles)
- ERI Consulting Eng’rs, Inc. v. Swinnea, 318 S.W.3d 867 (Tex. 2010) (collateral oral agreement doctrine)
- Hubacek v. Ennis State Bank, 317 S.W.2d 30 (Tex. 1958) (collateral agreements and separate consideration)
- David J. Sacks, P.C. v. Haden, 266 S.W.3d 447 (Tex. 2008) (parol evidence and contract-construction distinctions)
- Transamerican Leasing Co. v. Three Bears, Inc., 586 S.W.2d 472 (Tex. 1979) (oral agreement inconsistent with written lease)
- Jackson v. Hernandez, 285 S.W.2d 184 (Tex. 1955) (parol evidence regarding consideration in writings)