Justin Lane v. Thomas Lane and Glyndia Lane
12-16-00063-CV
| Tex. App. | Dec 9, 2016Background
- Justin Lane managed Lane’s Auto Sales; Thomas and Glyndia Lane are his parents and each owned an undivided one-half interest in the real property where the business is located.
- In May 2007 Justin and Glyndia signed a deed of trust securing a $207,000 promissory note that encumbered the real property.
- After family litigation in March 2012, parties executed a compromise settlement agreement (CSA): Justin would assign business interests and, once Thomas and Glyndia assumed the note or obtained financing to satisfy it, Justin would convey his one-half interest in the real property to them; if they failed within the time frame they would convey their interest to Justin.
- The Bank would not accept an assumption by both Thomas and Glyndia; it agreed only to an assumption by Glyndia individually and prepared an Assumption Warranty Deed releasing Justin and looking solely to Glyndia for payment.
- Justin refused to sign, asserting the CSA required both Thomas and Glyndia to assume the note; Thomas and Glyndia sued for breach, specific performance, declaratory relief, and reformation and moved for traditional and no-evidence summary judgment.
- The trial court granted summary judgment, ordered Justin to specifically perform, and reformed the CSA to permit Glyndia alone to assume the note and to receive Justin’s conveyance; Justin appealed.
Issues
| Issue | Plaintiff's Argument (Justin) | Defendant's Argument (Thomas & Glyndia) | Held |
|---|---|---|---|
| Whether summary judgment ordering Justin to specifically perform was improper | CSA required both Thomas and Glyndia to assume the note before Justin must convey; deed to Glyndia alone does not satisfy CSA | Bank’s refusal to accept joint assumption made Glyndia’s individual assumption consistent with CSA purpose; Justin was released from the note and thus obligation to convey triggered | Court affirmed: no-evidence summary judgment proper; Glyndia’s individual assumption satisfied CSA and Justin breached by refusing to sign |
| Whether the trial court erred by reforming the CSA to allow Glyndia to assume alone | Reformation would rewrite the parties’ agreement; court cannot create terms not agreed | Reformation proper to correct mutual mistake that parties believed bank would allow joint assumption | Court affirmed reformation because Justin failed to challenge the mutual-mistake ground presented in defendants’ summary judgment motion |
| Whether striking Justin’s counterclaim was an abuse of discretion | Counterclaim sought conveyance from Thomas and Glyndia to Justin if they failed to assume or finance the note | Given summary judgment against Justin, his counterclaim cannot prevail as a matter of law | Issue rendered moot; court declined to address because summary judgment disposition defeats the counterclaim |
Key Cases Cited
- Randall’s Food Mkts., Inc. v. Johnson, 891 S.W.2d 640 (Tex. 1995) (movant must negate essential element or prove affirmative defense for traditional summary judgment)
- City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671 (Tex. 1979) (burden shifts to nonmovant after movant establishes right to summary judgment)
- Ford Motor Co. v. Ridgway, 135 S.W.3d 598 (Tex. 2004) (no-evidence summary judgment standards and burden shift)
- King Ranch, Inc. v. Chapman, 118 S.W.3d 742 (Tex. 2003) (no-evidence review akin to directed verdict/legal sufficiency)
- Jarvis v. Peltier, 400 S.W.3d 644 (Tex. App.—Tyler 2013) (elements of breach of contract)
- Coker v. Coker, 650 S.W.2d 391 (Tex. 1983) (contract construction: ascertain parties’ intent; unambiguous contracts construed as a matter of law)
- State Farm Fire & Cas. Co. v. S.S., 858 S.W.2d 374 (Tex. 1993) (when trial court order does not state grounds, appellate court will affirm if any theory in the motion is meritorious)
- In re G.D.H., 366 S.W.3d 766 (Tex. App.—Amarillo 2012) (substantial/commercially reasonable performance may excuse exactitude)
- Enron Oil & Gas Co. v. Joffrion, 116 S.W.3d 215 (Tex. App.—Tyler 2003) (breach determined by comparing contract terms to parties’ actions)
- Dorsett v. Cross, 106 S.W.3d 213 (Tex. App.—Houston [1st Dist.] 2003) (failure to perform per contract constitutes breach)
- Sudan v. Sudan, 199 S.W.3d 291 (Tex. 2006) (de novo review of summary judgment; resolve doubts against mover)
- DeGrate v. Exec. Imprints, Inc., 261 S.W.3d 402 (Tex. App.—Tyler 2008) (appellate review limited to evidence in summary judgment response)
- Fed. Home Loan Mortg. Corp. v. Pham, 449 S.W.3d 230 (Tex. App.—Houston [14th Dist.] 2014) (trial court generally cannot consider summary judgment evidence not referenced in the motion)