the Note Investment Group, Inc. v. Associates First Capital Corp., Successor by Merger to Associates Financial Services Company, Inc.
476 S.W.3d 463
Tex. App.2015Background
- TNIG sold partial interests in seller‑financed promissory notes and contracts for deed to Associates under individual DOTPA agreements; Associates sometimes held excess payoff/foreclosure proceeds in escrow pending verification of the rightful remainder‑interest owner.
- TNIG alleged a separate 1999 “Global Agreement” obligating Associates to buy remainder interests 36 months after initial partial purchases; TNIG later added claims that Associates breached individual DOTPAs by withholding excess proceeds and failing to reassign paid‑out accounts.
- Associates ceased purchasing seller‑financing in 2001; Grand Servicing (servicer) began holding disputed excess proceeds in an escrow account while verifying ownership, which led to funds TNIG claimed were owed to it.
- Associates made a Rule 167 settlement declaration and a written offer on June 10, 2011 for $350,000 (TNIG did not accept); on July 21, 2011 Associates sent TNIG a check for $174,562.50 as a tender for amounts held in escrow — TNIG rejected and returned the check.
- The trial court: (a) later granted summary judgment to Associates on the Global Agreement claims; (b) found TNIG entitled to $131,876.85 on the individual DOTPA claims; (c) awarded Associates litigation costs under Tex. R. Civ. P. 167 as a setoff, and (d) denied TNIG attorney’s fees under Tex. Civ. Prac. & Rem. Code § 38.002 because Associates had validly tendered payment.
Issues
| Issue | Plaintiff's Argument (TNIG) | Defendant's Argument (Associates) | Held |
|---|---|---|---|
| 1. Whether Rule 167 offer could cover claims not yet pleaded (award of litigation costs) | Rule 167 limits offers to claims formally pled when the offer is made; Associates’ offer did not include the subsequently pleaded individual DOTPA claims so cost award was improper | Rule 167 covers "claims by and against that defendant" whether pled or unpled; Associates’ June 10 offer expressly sought to settle “all monetary claims…asserted or assertable,” which included the DOTPA claims | Court: Rule 167 may include unpled claims tied to the defendant; Associates’ offer unambiguously covered the DOTPA claims — Rule 167 costs award affirmed |
| 2. Whether July 21, 2011 letter/check was a valid, unconditional, timely, and sufficient tender (precluding attorney’s fees and post‑tender interest) | Tender was untimely (TNIG’s discovery showed presentment in 2008), was conditional (reserved defenses), or was for wrong/insufficient amount, so TNIG remains entitled to fees and post‑tender interest | Tender was within 30 days of TNIG’s presentment via third amended petition (June 22, 2011), was unconditional despite reservation of defenses, and the amount exceeded the damages later awarded | Court: Interrogatory/answer in 2008 did not constitute presentment; July 21 tender was unconditional and exceeded amount ultimately awarded — tender valid; attorney’s fees and post‑tender interest precluded (and Rule 167 bars fees incurred after offer rejection) |
| 3. Whether the trial court erred by reconsidering and granting Associates’ 5/13/2011 summary‑judgment motion without notice | Reconsideration required 21 days’ notice under Tex. R. Civ. P. 166a(c); trial court abused discretion by granting previously denied summary judgment without notice | Trial court may modify or change interlocutory orders and may grant a previously denied summary judgment without prior notice so long as it retains jurisdiction and parties had earlier opportunity to be heard | Court: 21‑day notice rule applies to initial summary‑judgment hearing only; trial court properly reconsidered and granted the motion without further notice |
Key Cases Cited
- Amedisys, Inc. v. Kingwood Home Health Care, LLC, 437 S.W.3d 507 (Tex. 2014) (interpreting scope of Rule 167 settlement offers to include claims “asserted or which could have been asserted”)
- Ford Motor Co. v. Garcia, 363 S.W.3d 573 (Tex. 2012) (court applies statutory/construction principles to procedural rules)
- CompleteRX, Ltd. v. [unnamed], 366 S.W.3d 318 (Tex. App.—Tyler 2012) (discussing purpose of Chapter 42 and Rule 167 to encourage settlement)
- Busch v. Hudson & Keyse, LLC, 312 S.W.3d 294 (Tex. App.—Houston [14th Dist.] 2010) (requests for admission and responses may satisfy presentment where they show a demand and refusal)
- Staff Indus., Inc. v. Hallmark Contracting, Inc., 846 S.W.2d 542 (Tex. App.—Corpus Christi 1993) (an unconditional tender is necessary to defeat a claim for attorney’s fees; conditional tenders are ineffective)