Guniganti v. Kalvakuntla
346 S.W.3d 242
| Tex. App. | 2011Background
- Guniganti and appellees are limited partners in GCKM, which acquired Harris County land to develop a residential subdivision.
- July 12, 2000, the partnership executed a note for $2,948,523.45 to OmniBank, secured by a Deed of Trust; Guniganti and appellees signed personal guaranties.
- June 2002, partnership and guarantors defaulted; August 2002 Modification of the Note and Deed of Trust extended maturity and preserved terms.
- June 30, 2003, Transfer of Note and Lien conveyed 40% to Guniganti and 20% to each appellee; all became owners/guarantors.
- November 2, 2007, Guniganti sued the partnership for 40% of unpaid balance and for foreclosure; appellees intervened asserting their rights and limitations defenses.
- Trial court granted partial summary judgment on limitations and later entered final declaratory judgment enforcing limitations barring enforcement of the Note and Deed of Trust; appellees were awarded fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is intervention proper despite standing concerns? | Guniganti | Appellees had indispensable interests in the Note and Deed of Trust | No abuse of discretion; intervention proper |
| Whether four-year contract debt limitations apply to the Note rather than six-year negotiable-instrument limitations | Guniganti | Note/Modification render instrument non-negotiable, so shorter period applies | Note and Modification not negotiable; four-year limitations applied |
| Whether declaratory judgment was proper to resolve limitations and related relief | Guniganti | UDJA appropriate to settle ongoing rights and cloud on title | No abuse of discretion; declaratory judgment and attorney’s fees affirmed |
Key Cases Cited
- Guar. Fed. Sav. Bank v. Horseshoe Operating Co., 793 S.W.2d 652 (Tex. 1990) (intervention standard and discretion)
- Jabri v. Alsayyed, 145 S.W.3d 660 (Tex.App.-Hous. [14th Dist.] 2004) (standing to intervene; burden on intervenor to show justiciable interest)
- Diversified Fin. Sys., Inc. v. Hill, Heard, O'Neal, Gilstrap, & Goetz, P.C., 99 S.W.3d 349 (Tex.App.-Fort Worth 2003) (suit on debt generally four years)
- Conner, Cont'l Nat'l Bank of Fort Worth v. Conner, 214 S.W.2d 928 (Tex. 1948) (negotiability and reference to other documents may affect instrument status)
- FFP Mktg. Co., Inc. v. Long Lane Master Trust IV, 169 S.W.3d 402 (Tex.App.-Fort Worth 2005) (references to other documents do not alone defeat negotiability; multi-document notes scrutinized)
- Mitchell v. Riverside Nat'l Bank, 613 S.W.2d 802 (Tex.App.-Houston [14th Dist.] 1981) (negotiability where note incorporates other terms)
- Burns v. Resolution Trust Corp., 880 S.W.2d 149 (Tex.App.-Houston [14th Dist.] 1994) (analysis of negotiability where underlying instruments relate to note)
- Max Duncan Family Investments, Ltd. v. NTFN, Inc., 267 S.W.3d 447 (Tex.App.-Dallas 2008) (UDJA award of costs/fees in declaratory relief regarding lien/note)
- Southwest Guaranty Trust Co. v. Hardy Road 13.4 Joint Venture, 981 S.W.2d 951 (Tex.App.-Houston [1st Dist.] 1998) (attorney’s fees in declaratory judgment actions; limits)