*1 does not constitute ineffective assistance of State,
counsel. Kan v. (Tex.App. h.); pet. Antonio — San State,
see White v. refd) pet. (ap — Amarillo
pellant must show testimony was sub
ject to exclusion via legitimate objection object
before counsel’s failure to consti behavior). prejudicial
tutes
Consequently, we overrule Lee’s seventh
point of error in aggregated theft case point of error five in the deception and
money laundering cases.
We affirm trial court’s judgments. BANK,
FROST NATIONAL H&
Building Interests, Inc., Jack W. How
eth, Howard, Appel and Kenneth R.
lants, E.
Charles and Linda BURGE Burge, Appellees.
S.
No. 14-99-00074-CV. Texas, Appeals
Court (14th Dist.).
Houston
Aug. 2000.
Rehearing Overruled Nov. *4 Antweil, Brian F. John Hatchett McFar- payable within ninety days. The land, Houston, Steven E. Halpin, $200,000 ap- payable note was to be in one pellants. year, agreed but this note would remain subordinate to the bank loan Beverly, Mazzone, J.W. Michael J. which H H& needed to finance the new Houston, appellees.
home’s-construction. Septem- On or about YATES, Panel consists of Justices 30, 1993, ber Burge conveyed Property FOWLER, and EDELMAN. H H by general deed, to & warranty
H & H executed and delivered the two MAJORITY OPINION promissory notes as agreed. YATES,
LESLIE BROCK Justice. In December of H H& obtained a construction loan in the amount of appeal This stems from a defaulted real $865,000 from Frost pre- National Bank’s lender, estate loan. The Frost National decessor-in-interest, National appeals Commerce from a summary judgment “Bank”). granted (collectively, favor of the As securi- surety, loan’s loan, E. Burge, ty Charles for the H H promis- his claims for & executed a con- *5 version, contract, breach sory principal and material note the amount of borrowers, (the “Note”). alteration. The $865,000 H H& Build- As further securi- Interests, Inc., ing Howeth, Jack W. and ty, Howeth personal and Howard executed Howard, Kenneth R. appeal sepa- from a guaranties, in which agreed each to be rate summary judgment that was awarded jointly and severally repayment liable for Burges’ in the favor on H & H’s1 counter- $865,000 loan. The loan was also claims for breach of contract and contribu- by secured Security “Deed of Trust and tion. below, For the reasons set out we Agreement” gave the Bank a lien on reverse the trial judgment. court’s Property. the In addition to this security, however, requested the Bank collateral Background
I. $200,000 the amount of to further secure In August of Burge Charles E. the loan. wife, and his Linda Burge, agreed S. to loan, In negotiating for the H H& evi- sell a residence that they owned to H H& dently agreed profits to use the loan’s to Interests, Inc., Building for the sum of $175,000 pay in full both the and the $375,000. Jack W. Howeth is H & H’s $200,000 promissory previously *6 two with them. The breached its contract Under the terms corrected instru- August on lawsuits were consolidated
ment, the matured December Note on 1996. January The called on Burge 1994. summary filed a motion for The him the Note “had inform claims, the and the judgment Burges’ on Burge matured.” received letter summary Burges for filed cross-motion Bank, 2, 1995, February from the dated 12, 1997, judgment. May At a on hearing that, notifying surety, him as he would the Bank’s motion the trial court denied days any have ten to cure default the “Interlocutory Judgment and an entered by H & H. H & H the loan failed make Granting Summary Judgment” Order and, turn, payments loan that were due “Interlocutory Burges’ [the the favor Note. the Bank Although defaulted the Judgment”] stating grounds the without give the loan to H H additional renewed Interlocutory In the for that decision. pay, time to H & H unable make the Judgment, the trial court ordered required fell into payments and default $200,000 in pay damages Bank to April In a letter again on 1995. dated inter- Burges, plus pre- post-judgment and 5, 1995, Burge served with June fees, est, attorneys’ and costs reasonable Burge formal notice of & H’s default. court. respond to the notice and did not did 20, 1995, ruling, court’s Following cure default. On June trial H to $200,000 against H & upon CD and Bank filed cross-claims Bank foreclosed on the Note deficiency due credited that amount toward Note’s recover 6, 1996, repayment seek to its efforts to unpaid February balance. On addition wife, Linda, proceedings be- in the Burge later added his a co- tiffs/counter-defendants low, Although Burge only Appel- plaintiff. they joint Charles have filed a brief as and agreement, party signed surety who both appeal. this lees in plain- wife Mr. and his were listed under guaranties by executed Howard date, claims which remain pending, to be- and Howeth. The Bank also sought H, con- tween Howeth, H & tribution indemnity from those defen- appeal Howard. This followed. dants for any amount that it would have to III. Issues Presented
pay to Burges. The Bank filed motion summary judgment on its appeal, the Bank contends that H, against cross-claims H & claiming that the trial court in granting erred Burges’ Howard and Howeth impaired the loan’s motion summary judgment, and in de- collateral failing to Burge’s obtain con- nying the motion filed the Bank. The sent before correcting the Note’s Bank has raised the following issues in 12, 1998, date. On March support (1) the trial court of this contention: there is a granted the Bank’s motion for summary genuine issue of material fact on Burge’s judgment, in part, finding (2) H & H defense; hable for material alteration Burge con- the balance due on the Note. The trial sented to the alteration of the ma- court further (3) found that date; Howeth and How- turity there a genuine issue of jointly ard were and severally liable for material fact on Burge’s claim that the deficiency owed as “makers and guar- Bank converted the pledged CD to secure (4) antors” of the Note. Note; there was no contract be- (5) Bank; tween Burge and the there is a H H& then filed against counterclaims genuine issue of material Burge’s fact on the Burges contract, for breach of stem- claim that the Bank breached contract ming Burge’s from purported “repudiation Bank; that existed between and the of his to subordinate the CD to (6) judgment evidence dem- Note,” and for “pro- contribution of his Burge’s onstrates that claims for material portionate liability, share” of if any, to the alteration, conversion, and breach of con- Bank. filed a motion for sum- fail, (7) law, tract aas matter of mary judgment on the counterclaims as- was not entitled to attorneys’ recover fees H, serted them Hby & arguing for the claims on that H & H’s allegations new were barred granted. frauds, the statute of doctrines collateral estoppel judicata, and res In response, Burge claims the terms *7 principles equity. of The trial court grant- of the Note control over those the secu- Burges’ ed the (2) motion and rity instruments; dismissed H & Burges’ the agree- H’s counterclaims. ment pledge the CD did not allow the Bank to turn the two-year Note that the 80, 1998, On December the trial court (3) note”; CD secured into a “demand the entered a “Final Judgment” on the claims specific terms of Pledge prohibited the the covered by Burges’ the motion for sum- shortening from the Note’s mary Bank, judgment against the as set (4) consent; date Burges’ without the 12, May out 1997 Interlocutory Burge was rely entitled to on the loan Judgment, Burges’ and the motion for (5) presented documents closing; summary judgment against H & H. That there is no conclusive evidence that order dismissed all brought against claims Burges waived their material alteration H, Howeth, H & and Howard by Burg- (6) claim; and the Pledge, the transfer of es, originally, Burges because the were lien, and other documents created a con- deemed to have “obtained all the relief tract between Burges and the Bank. that they sought in by this case the sum- mary judgment against” the contends, issue, Bank. On that H H& three-part one date, same the trial signed court the par- that summary judgment improper was be- ties’ “Agreed Order for Severance” genuine cause issues of fact remain on the (1) claims on which the court had already following questions: whether the coun- interlocutory entered judgments, from the terclaim against Burge for breach of con- H. one H & against against by the statute of tract was “barred (2) for frauds”; court denied a motion The trial whether counterclaim the Bank on judgment filed summary for against Burge breach contract was Burges. against raised it judicata and es- claims by res collateral “barred appeal cannot denial Typically, party the counterclaim toppel”; and whether be summary judgment of motion for for contribution thus, and, interlocutory addition, order H & H cause it is an by equity.” In “barred Ins. Cincinnati genuine appealable. material See argues that issue of Life (Tex. Cates, 623, 625 the Bank “material- Co. v. fact exists on whether 1996). However, parties move $865,000 when both ly altered the Note.” summary and the trial court judgment other, grants of Review: one motion denies IV. Standard appeal both Summary Judgment party may the unsuccessful well prevailing party’s motion as as Here, both Morales, v. its See Holmes denial of own. judgment summary motions for filed their (Tex.1996); 920, Cigna S.W.2d 166a(c) Rule of the Texas Rules of under Rubalcada, Ins. Tex. v. Co. of Civil Procedure. The standard review- 408, [1st Dist.] 411-12 filed “is ing motions under rule wheth- situation, we pet.). In that should no movant at the trial level er successful evidence judgment review the showing carried its burden of that there sides, all presented by determine both issue material fact and that genuine no presented, and render such questions judgment granted a matter should be should have the trial court law.” Marwick Harrison KPMG Peat v. See Commissioners Court rendered. County Housing Corp., S.W.2d Fin. 77, 81 County Agan, 940 Titus S.W.2d (Tex.1999). standard, Under that (Tex.1997). Accordingly, the issues raised this Court must take as all evidence true separately parties are discussed favorable to the nonmovant and must below. make all reasonable in the non- inferences favor as well. See movant’s id. Material Alteration V. When a defendant moves for undisputed by parties It to this an summary judgment on affirmative de appeal that the Note’s date fense, conclusively must all prove De- from changed December of its as mat essential elements defense H & 1994. Both the cember law, ter of of material leaving issues are genuine that there issues argue Kennedy, Montgomery fact. fact remain for trial on material (Tex.1984); 310-11 Fernandez *8 that a mere correc- change whether Inc., Sys. v. Memorial Healthcare 896 a material tion or was alteration. 227, (Tex.App. 230 [1st S.W.2d any change — Houston to the matu- insists that denied). Where, 1995, here, writ Dist.] a rity a material alteration as date was grounds specify the trial court does not change a of law and that such matter its of a motion for granting movant’s surety. discharged liability his a summary judgment, may we affirm the case, it is that In this clear any judgment grounds if of the advanced surety pledged he acting as a when motion are meritorious. within the See for H & H’s loan. as collateral CD S.S., Fire & Cas. Co. v. 858 State Farm See, v. Financiera e.g., Compania Simmons (Tex.1993). 374, 380 S.W.2d bano, S.A, 789, 792 Li 830 S.W.2d 1992, instance, writ (Tex.App. [1st Dist.] In this the trial court — Houston denied) that, as of certain separate (holding for sum owners motions granted two debt anoth- Burges, pledged to secure the mary by filed one CDs judgment 588
er, the owners “became to the Spin-Line sureties effect has been v. varied.” extent that the CDs In pledged”). were Pipe Corp., United Concrete 420 S.W.2d Texas, a discharge 744, 1967), material alteration will (Tex.Civ.App. 751-52 — Dallas a surety’s obligations. v. part, See Vastine in rev’d 430 part, in S.W.2d 360 affd Dallas, 463, (Tex.1968). 808 S.W.2d 464-65 In an regard, that alteration (Tex.1991). Because a material alteration is material so as to an instrument render defense, anis affirmative change the burden if a void that document causes it surety to demonstrate that a material meaning to “fail reflect the and intent of alteration occurred. See Sonne v. Federal parties agreement.” to the Associated 789, Sawmills, Deposit Corp., Peterson, Ins. 881 S.W.2d 793 Inc. v. 366 S.W.2d 1994, 844, (Tex.App. 1963, writ (Tex.Civ.App. [14th Dist.] 848 no — Dallas denied) writ). Federal (citing Deposit Corp. Ins. Whether an alteration was material 939, Attayi (Tex.App.— 745 S.W.2d 944 question is a of law for the court to deter writ). 1988, mine, Houston [1st Dist.] jury and not one for a to decide. Spirtr-Line, 420 at 752. S.W.2d alteration, To a establish material (1) the following elements must be shown: instance, In both the and H & a existence of material alteration to the any H that agree change Note was (2) contract; underlying lack of consent to the sole purpose correcting made for alteration; harm resulting from error. there They clerical insist was no Hardwoods, the alteration. See Austin parties’ underly- material alteration to the Berghe, Inc. v. Vanden ing agreement contract because the be- denied) Paso writ “always — El tween the Bank and H H was Quit Colony Ins. City Old Co. v. one-year support, deal.” In the Bank man, 163 Tex. 455 points to the deed of trust were exe- (1961)); Sonne, 793; Attayi, 881 S.W.2d at along with at the cuted the Note Decem- argues S.W.2d at The Bank closing the terms ber Burge’s material alteration defense “fails pledged CD that was as collateral. underlying because the contract between H changed.” Bank and & never Texas, In promissory note is (Emphasis original). The Bank main “a contract simple governed funda tains that even if further the alteration applicable mental rules to contract law.” material, maturity the Note’s date was Corp., Guthrie National Homes Burge consented to that when he change (Tex.Civ.App. — Fort pledged argues The Bank the CD. Worth), reformed, 394 S.W.2d change the Note’s (Tex.1965). contract, construing “did injure or enhance the risk of princi follows the Texas “well established injury Burge.” Finally, the Bank con that, ple in order to ascertain entire tends material alteration contracting between the par timely was waived his failure ties, separate documents executed at the complain about the shortened time, purpose, same for the and in same date received the Note once he notice that of the same transaction are to course was due. Each of these contentions is together.” be construed Jim Walter *9 discussed below. Homes, Schuenemann, Inc. v. 668 S.W.2d (Tex.1984) 324, Jones v. (citing Kelley, 327 Underlying
A. to the Alteration (Tex.1981); 614 95 Nevels v. Har S.W.2d Contract ris, (1937)). 190, Tex. 102 1046 129 S.W.2d contemporaneously The test of whether an alteration executed Documents “whether ascertain writing is material is the altered are construed as one “to Jones, 614 parties.” describes the contract entered into intent of the S.W.2d parties, legal or whether instrument’s 98.
589 contacting Burge only because he A doc without review of the relevant loan the Note’s Burge that the Note executed at felt that knew of uments shows sure 29, closing points the December 1993 was due Bank also out one-year term. The 28,1995, owing or December and on before application, that the loan dated December two-year have it a time given 15, which would 1993, requested H & H shows that period to mature. (12) Howeth corrected month term. The loan with a twelve it mature in Note reflect that would one also loan used worksheet year maturity and that its true date was 15, 1993, that shows dated December 28, 1994. The correction bears December maturity year.” intended as “1 is likewise Howeth’s initials and Note contention, response to the Bank’s Hutson, super E. initialed Robert who his under maintains that Burge Bank’s behalf. The vised loan closing, that standing, at the time of the specifically “security references as Note years, to mature in two Note was Burge payment” pledged by CD that unal not one. contends of trust executed deed that was 28, maturity December 1995 tered Note’s 29,1993. along with the Note on December closing date which he saw at the served to expressly The deed of trust refers to the understanding. Burge insists confirm that “being payable Note on or before that, if conflict between the there is TWELVE MONTHS” from the clos documents, loan Note and the other ing. plainly The also that it will CD states Note control. terms of the relies year closing. mature one from the Con support of that following on the cases struing together, these there instruments contention; Inc., Mad-Wayler, v. Pentico that Note evidence was intended to 708, (Tex.App. Corpus 964 715 S.W.2d — See, year, e.g., mature one two. denied) 1998, v. pet. Odell Christi Vista Dev. Joint Venture II v. Pacific Co., 538, Credit 124 Tex. Commerce Farm Co., 305, Ins. Mut. 822 307 S.W.2d Life (1935)); 543, 295, v. 80 S.W.2d Wells 1992, [1st Dist.] writ — Houston (Tex.Civ. 430, Smith, 144 432-33 S.W.2d denied) (construing the terms of a note 1940, App. writ Worth dism’d — Fort and deed of trust that were executed con cor.); Mort States judgm’t Southern temporaneously); B & B Drug, Pharm. & 780, 782 Lykes, S.W.2d gage Co. Waco, Air Nat’l Inc. Lake refd). 1935, (Tex.Civ.App. writ (Tex. 340, App. Civ. — Amarillo — Waco which points to one Texas case dism’d) 1969, (construing writ a loan that a bank’s alteration a note’s holds note, agreement, and deed of trust execut done, date, innocently is a even if ed contemporaneously). may type alteration of the which material The Bank also offers addition Nat’l discharge surety. Caldwell al, parol suggests evidence that the (Tex. Reep, Bank v. 188 S.W. 508-09 year, Note was intended to mature in one refd). writ Civ.App. — Amarillo and not two.3 The record reflects Hutson, Howard, by Burge, Unlike the cases cited and Howeth each testi instance, H agree, Bank and H in this depositions in their fied Note was year. any change to the Note’s always intended to mature in one clerical solely he the date made to correct a Howeth added that corrected date was Co., (Tex. Burges complain appeal Indus. Ins. denied). considered, parol may App. [1st Dist.] writ Bank’s evidence not be here, parol alleged, although they object as it is did not so at the trial Where mistake Nevertheless, parole only to show that the writ court. evidence is evidence is admissible alter, ing incorrectly vary, reflects true inadmissible add Republic unambiguous parties. See Estes v. Nat’l of an otherwise contract terms 1970). accident, Dallas, (Tex. fraud, in the absence or mistake. Johnson, present *10 Accordingly, 912 the extraneous evidence See Messer v. 422 S.W.2d (Tex. 1968); properly may the be considered. Ins. Co. v. Commerce & ed Bank Hartford 590 Weis,
error
that the
255,
841,
so
Note would reflect accu
Tex.Civ.App.
63
132 S.W.
rately
parties’
writ)).
agreement.
(1910,
the
original
disputed
no
If the
alter-
reason,
For that
the
that Burge
authorities
change
ation did not
the
effect
legal
of the
upon
relies
are distinguishable from the
underlying
contract between
Bank and
present
facts
here. Texas courts have
H,
H &
then was not a material altera-
held
a change
a
made to document for
tion
agreement
of the
par-
between those
purpose
correcting
sole
of
an error of
ties as a matter of law.
nature,
so as to
allow
instrument
conflicting
The
presented by
evidence
accurately
to
parties’
reflect
original
Burge, the
and H
H& creates a
intentions,
is
a
not material alteration.
genuine fact issue
par
about whether the
Brackins,
482,
See Jackson v.
409 S.W.2d
one-year
ties
a
two-year
intended
or a
note
1966,
484 (Tex.Civ.App.
writ
— Houston
arrangement. Although the issue of
n.r.e.) (interlineation
refd
on a deed to
whether material alteration occurred
ais
change
party’s
a
name from her married
law,
question
precise
nature of the
name,
name to her maiden
consistent with
underlying
jury
contract is one which a
original agreement,
terms
held
See,
Jones,
must
e.g.,
decide.
v.
Smith
alteration);
a
not to
material
be
Oehler v.
17,
21 (Tex.App.
[1st
Scammel,
403,
(Tex.Civ.
1982), ajfd in
rev’d in
part,
part,
Dist.]
n.r.e.) (add
App.
refd
writ
— Dallas
(Tex.1983)
(holding
S.W.2d 29
that evi
ing
clause to a
its
note after
execution
parties
dence which
may
showed
purpose
the sole
of including language
particular
have
to
intended
describe
found in
original agreement
anot ma
conveyance
tract of
in a
land
real estate
alteration);
terial
Continental Cas. Co. v.
dispute
jury
a fact
issue for
to
Bradbury,
(Tex.Civ.App.—
S.W. 306
decide). Therefore,
genuine
is
because
writ)
Dallas
no
(correcting an insur
remains, Burge
sue of material fact
did not
ance policyholder’s name from
A.”
“James
meet
he
his burden
show that
was enti
to “John A.” to reflect that “John A. Brad
tled to a
judgment
his defense mate
bury”
contracting
true
party was
alteration,
law,
rial
as a matter of
alteration);
not a material
see also First
appropriate.
was not
Keilman,
State Bank
Accordingly,
points
raised
(Tex.App.
denied)
writ
—Austin
and H
& H
material alteration are
(holding that
of the
substitution
number
sustained.
“2%” for “12.5%”
legal
did not alter the
note,
effect of the
and was not a material
B. Consent
alteration, because that was consistent
contends,
alternative,
The Bank
in the
parties’
with the
“prime
that if the
alteration
rate).
plus
percent”
two
interest
Although
material,
date was
then
consented
none
specifically
of these cases deal
with a
signed
Pledge
when he
change
date,
promissory note’s
or the
$200,000
and agreed
tender the
CD as
relationship between
principal
and a
points
the loan.
collateral for
The
surety,
persuasive.
their
reasoning
Pledge Burge signed express-
out that the
Here,
agree
H
and & H
that the
ly incorporates all of
the terms
original
one-year
contract was for a
note to
Security
Bank and
Agreement between the
mature on December
consistent
provides
Security Agreement
& H. The
true,
with
If
the deed
trust and CD.
as follows:
merely
alteration
the Note
corrected
agreement.
security
granted hereby
reflect that
interest
It well-settled
way
by any
shall in
be
“[a]n alteration that works no
affected
indul-
change,
but
gence
indulgences,
which leaves the
or
or
terms
contract
extension
ex-
before,
tensions,
form,
change
same as
changes
does
vitiate it.”
Oehler,
evidence,
maturity,
A Pledge review of the and the attached the extent of Security Agreement shows that neither The Texas Supreme Court has held that an express provi these documents contain only if an alteration “can be beneficial to allowing sion to shorten the surety, surety [then] is not dis maturity Burge’s without assent. charged.” Pipe United Corp. Concrete v. applicable Under the rule con of strict Co., 360, Spin-Line 430 S.W.2d 365-66 struction, may we extend the terms of (Tex.1968). course, change Of whether a Burge’s surety agreement by inferring beneficial, detriment, a or is is a fact Vastine, (citing otherwise. See id. 808 jury for a to issue determine. See Federal 464). S.W.2d at Constrained as arewe Deposit Corp. Ins. v. Attayi, 745 S.W.2d Pledge Security Agreement, 939, 944 [1st Dist.] drafted, we must further 1988, writ). question no Because the strictly construe these documents maturity whether the shortened date actu the Bank’s rather interpretation. tortured helped ally Burge presents or harmed Mr. Bank, Temple-Eastex, See Inc. v. Addison a genuine issue material fact in this 793, (Tex.1984) 672 (noting S.W.2d 798 instance, the issues raised the Bank and that, Texas, writing in a is construed by H & H are sustained. drafter). strictly against the Accordingly, Waiver D. the Bank’s issue on whether con Burge sented by conveying to alteration a The Bank further contends security interest in CD is overruled as Burge rights respect waived his with well. any material alteration that was made be protest cause he did not the shortened Injury Injury Risk of
C. or In particular, date. the Bank Burge contends that had notice in argues, the alterna had tive, Note matured that H H was in changing the Note’s default, Burge but that did not take years year from two to one was not a however, Burge responds, action. that his change material alteration because that or silence inaction are not sufficient to injure Burge’s did not or increase risk of therefore, show waiver. argues, but, instead, injury actually him. benefitted that there is in no evidence of waiver this explains The Bank that extending the case. years greater Note to two a than risk deal, having one-year because additional Texas, In waiver occurs when required consideration would have been party intentionally relinquishes known obtain such an Bank’s extension.' or right engages intentional conduct
view, it was for Burge beneficial to be claiming right. inconsistent with See sooner, repaid rather than later. Co., Enterprise Tenneco Inc. Prods. 925 (Tex.1996). 640, Separately, H & H party’s contends that A ex S.W.2d injured was not instance he press right may because renunciation a known exactly he bargained (citing Alford, “received what had establish waiver. See id. Rowe, agreed Property. Meroney for” he to sell the when & Co. that, explains H & H agreeing (Tex.Civ.App. instead of writ — Amarillo n.r.e.)). $200,000 inaction,
to subordinate the promissory refd Silence or for so note necessary long period to the construction financ- to show an intention to as ing, pursuant parties’ agree- original yield right, enough the known ment, $200,000 Tenneco, Burge agreed pledge show waiver. 925 S.W.2d at Thus, H However, CD as collateral for the loan. & 643. it is well established that that, reasons when of intent. pledged question waiver turns on CD, “just Ins. agreed, originally Compensation he contem- See Texas Workers’ Inc., Servs., wrongful exercise of domin- Facility v. Personnel 895 fined “the property (Tex.App.—Austin and control over another’s ion writ) Culbertson, rights.” inconsistent with his Ford v. denial (1958)). Overton, Tex., Bandy v. First Tex. State *13 (Tex.1992) 609, has is therefore 622 Whether waiver occurred S.W.2d 835 a jury a of fact for to ordinarily question Venture MBank Tripp Village Joint Tenneco, N.A., 746, Centre, at 643. decide. See 774 750 S.W.2d Lincoln denied)). 1989, If (Tex.App.—Dallas writ Here, presented that the Bank evidence in no material alteration this there was officer, Hutson, a loan left supervising case, not could then the Bank’s foreclosure Burge January on telephone message for its ex- conversion because have constituted 24, 1995, depo- In his regarding the Note. not of dominion and control would ercise sition, Burge he acknowledged that later set wrongful. have For the reasons been spoke told with Hutson who him that the above, fact genuine issues of material out 6, February Note “had matured.” On a material alteration remain on whether 1995, Burge Howeth sent a letter to “to to Note. Because regard with occurred writing confirm in that our construction fact affects whether the this issue you loan which of De- to have Certificates claim, prevail on conversion could their posit is in pledged additional collateral to Burges were not entitled that specifically default.” The letter states con- their cause of action for judgment on 28, 1994, the Note “matured on December version, on point and the Bank’s error 5, has been renewed.” On June that is sustained. issue 1995, Burge’s the Bank sent a to letter notify Burge counsel to of the default and Breach of Contract Between VIII. him give opportunity to an to cure H & Burge and the Bank pay. H’s failure to That letter references judg for summary In his motion correspondence other the Bank between ment, Pledge that the he Burge argued 9, Burge, March in upon separate agree signed was based Bank Burge variety furnished with a that the would mature two ment Note documents The regarding default. years. Burge complained that the argues that this evidence that shows him agreement that with breached protested never the December from changing the Note’s date complained 1994 date or that the The Bank that years argues two to one. understanding. was different his date from sepa Burge cannot establish that he had evidence, Based on the find foregoing we with the as matter of rate contract genuine that there is a issue of material law. fact his right on whether waived claim material alteration. Because this is- elements in a breach The essential decide, jury ques- sue is one for a (1) claim are as follows: of contract (2) tion is one which should be remanded to contract; that the existence of valid the trial court further determination. performed perfor or tendered plaintiff Ford, Tenneco, 643; at 308 (3) mance; the defendant breached The Bank’s point S.W.2d error contract; plaintiff that the this on the issue of waiver sustained to damaged a result of the breach. See Inc., extent. Enters., Hussong v. Schwan’s Sales (Tex.App.—Houston S.W.2d VII. Conversion writ). Here, the Bank no [1st Dist.] there is no valid contract it was contends contends The deny its there is no evidence written also error for trial court because signed by which sets out summary judgment Burge’s document motion maturity require- “two-year supposed claim for Conversion is de- conversion. Inc., ment.” The Bank argues therefore that (Tex.App . —Dal denied) Burge’s (citations omitted). breach of contract claim is barred las writ by the Statute of Frauds. instance, Burge argues that the lien, Pledge, the transfer of and other doc- § Statute of is found in Frauds uments related to the transaction created a of the Texas Business Commerce contract between 'Burge and the Bank.4 applicable states, provision Code. The However, Burge points written part, pertinent following: agreement with the Bank which is “com- (a) promise A or described in plete within itself’ and which details a (b) Subsection of this section not en- requirement that the Note mature two forceable promise agree- unless the *14 Dobson, years. See 786 S.W.2d 65. It ment, it, aor memorandum is plain further oral agree- such (1) in writing; and ment requiring two-year of maturi- term (2) signed person by the to be ty for the Note could not have been com- charged promise with the or agreement pleted Therefore, year. within one or by lawfully someone authorized to applies Statute of Frauds to bar the al- him. sign for leged two-year maturity agreement de- Burge. by scribed See Tex. Bus. & Com. (a) Subsection of this section (b)(6). 26.01(a), § Accordingly, Code Ann. applies to: the Burges’ issue on whether series of closing documents signed by parties agreement an which is not to be overruled, created such contract is performed year within one from the point Bank’s error on this issue is making agreement. date of Furthermore, sustained. because we have concluded that no valid contract existed (b)(6) 26.01(a), § Tex. Bus. Com.Code Ann. & Burge’s between and the as a (Vernon 1987). To satisfy Statute of law, matter judgment we render Frauds, “there must be a written memo the Burge’s take their nothing on breach complete randum which is within itself in of contract claim. every material detail and which contains all of the essential elements of the agree Attorneys’ IX. Fees ment so that the contract can be ascer tained from the writing without resorting granting Burge’s motion for summary testimony.” to oral Dobson Metro judgment, Label the trial court awarded “reason- Corp., (TexApp. able attorneys’ stating any fees” without — Dallas writ) (citations omitted). doing Absent basis for so. The Bank contends that, writing, agreement such a an oral although Burge falls raised breach of claim, within the Statute if appears of Frauds contract this action added from agreement per merely attempt the terms of the attorneys’ as an to collect cannot completed § formance be within fees one under 38.001 of the Texas Civil year. Code, Piping Sys., See International Ltd. Practice and Remedies which allows Inc., Assoc., v. M.M. &White a prevailing party to recover those fees in (TexApp. [14th such a suit. Disk] Tex. Civ. Prac. Rem.Code denied) 38.001(8). Hall, that, § writ Hall v. The Bank claims Ann. (Tex.1957)). Tex. Burges’ because the breach of contract law, an agreement Whether falls within claim fails as matter there is no Statute of Frauds is a question authority support of law. the award of attor- See Gerstacker v. Blum Consulting Eng’rs, neys’ agree. fees. We Because we have however, shows, argument, Burges suggested allegation 4. At oral also case that this that the was a CD written contract breached not raised the trial therefore court and we may A Bank. review of the record in it. address against contract claim con- breach of Burges’ breach of barred its concluded sustained. is therefore Bank, any, if against tract suit Frauds, Burg- the Statute of barred Estoppel XI. Collateral they prevail that claim and es cannot and Res Judicata an award of are therefore not entitled to for Burge’s motion Practice fees under Texas Civil attorneys’ H’s counterclaim argued that H & § Because and Remedies Code 38.001. under “doc- was barred contribution support other an award there is no judica- estoppel res of collateral trinéis] case, in this the Bank’s attorneys’ fees Interlocutory Judg- court’s ta” the trial point issue on this is sustained. favor, Burge’s ment de- Burge’s material alteration X. Between Breach of Contract that, because the Burge reasoned fense. H H and & “the Bank’s material trial court found that H & H filed a counterclaim relieved [N]ote alteration against Burge for breach of his collaterally H & H is any obligation,” from loan. pledge security estopped asserting the CD as for the a contribution from *15 him. summary against In judgment, his motion for claim Burge that the of contract argued breach correctly that H & H observes against him H H is lodged by claim & judicata estoppel res both collateral and the the by suretyship provision barred of v. judgment. final Mower require a See Bus. & Statute of Frauds. See Tex. Com. (Tex.1991). 560, 562 In Boyer, 811 S.W.2d 26.01(a), (b)(2). § Under this Ann. Code judicata of re particular, the doctrine res is provision, party Burge when a such as (1) following proof of elements: quires promise to acting surety, pay as a “the by merits prior final on the in party required debt of a third is to be (2) competent jurisdiction; of identi court writing” by surety. signed them; parties privity or with ty of those id.; Co., see Ins. 962 also Carter v. Allstate (3) a on the same second action based (Tex.App. [1st — Houston have were or been claims that raised could denied). 1998,pet. Dist.] first action. See Amstadt raised 644, 652 Corp., 919 S.W.2d U.S. Brass case, In H H no & has (Tex.1996). Likewise, adjudica prior “[a] agreement surety written to act as a that estoppel of be given tion an issue will out, points signed by Burge. H& adequately if it deliberated only effect however, by signing Pledge that Mower, 811 S.W.2d and firm.” performed to fully his oral showing requires That determination law pledge It is well Texas the CD. settled (2) (1) heard; fully were parties that apply not that the Statute of Frauds does its with supported court decision fully to a executed contract. See Pou decision was opinion; and reasoned (Tex. Co., Dominion Oil 265 S.W. inwas fact reviewed subject appeal to or also Joint Ven Com.App.1924); see id. A of the Inter appeal. See review (Tex. Spinks, ture v. shows, face, on its that locutory Judgment writ); App. Estate forego a final it was not one. Under — Austin Gifford, Kaiser v. Interlocutory Judgment analysis, the ing 1985, writ 12,1997, [1st Dist.] May the trial court on entered n.r.e.). performed Because estoppel refd or not to collateral entitled Pledge promise by executing his oral H & H’s issue on judicata effect. res tendering against the CD collateral for claim for contribution whether its loan, unavailable Burges of Frauds is was barred the doctrines Statute estoppel judicata point H H’s res him in this instance. collateral to of Frauds therefore sustained. whether the Statute error on Equity XII. majority opinion the summary reverses judgment granted Burges for the and ren- In their motion for judg summary judgment ders bank on ment, Burges simply argued signed basis that the documents “grossly would inequitable, be as a matter parties did not create a contract that the law, for Howeth and Howard to receive Burges against could enforce the bank. Burges contribution from the when the However, logic would suggest company acts of the they controlled were whatever extent those documents created primary cause of the default of the a contract the bank could enforce they Construction Note and when consent against Burges foreclose their ed to the material alteration” of that docu CD, those thereby same documents response, points ment. H H& out that created a contract that the could experienced profes is an estate real enforce the bank if its foreclosure agreed pledge sional who the CD as on the with comply CD did the con- collateral to secure the loan. H H& tract, by being premature. such as As the argues equity therefore that does not re the majority opinion remainder of correct- Burge of lieve his obligation act as concludes, ly a fact issue exists regarding surety in this case. parties whether the a one-year intended Equity invokes the “court of con two-year note. The resolution science,” and it applies only when “the will, turn, question determine whether legal remedy complete as, is not as less the contract between the bank and the than, or satisfactory effective less than the Burges allowed the CD to be foreclosed equitable remedy.” Heights First and, upon year thus, after one or two *16 Gutierrez, FSB v. whether it was the bank (Tex.App. Corpus Christi writ de who were in breach of that contract. — nied). In that in regard, equity relief is Therefore, I would reverse merely complete available where there is a summary judgment Burges, favor of and adequate remedy at law. See Rogers fees, including attorney’s award due Co., & Royalty Daniel Oil 130 Tex. to the fact term regarding issue (1937). has not note and not render judgment favor of demonstrated that equita he is entitled to the bank. and, therefore,
ble relief in this instance point
& H’s of error is sustained.
XIII. Conclusion the foregoing,
Based on we find that the granting
trial court erred in judgment the Burges’ against favor both ROBERTS, Appellant, Casimir Bernard and H & H. reverse We Burge’s render take- nothing their claim contract their Texas, Appellee. The STATE of claim attorneys’ fees. The remaining No. 01-99-00360-CR. causes of are action reversed and remand- ed to the court proceed- trial for additional Texas, of Appeals Court ings opinion. (1st Dist.). consistent with this Houston Sept. EDELMAN, Justice, H.
RICHARD concurring dissenting. regard Burges’
With claim for bank,
breach of contract notes exe- president, and Kenneth R. Howard is one cuted to the In Burges. return for such of its stockholders. Burges’ The residence payment, Burge orally agreed to use the was located at Blaylock, City in the $200,000 note payment as the additional (the Piney Village Point H “Property”). & requested by collateral the Bank to secure H wanted to acquire Property the for the the loan. Pursuant agreement, this purpose tearing existing down the im- $200,000 Burge delivered to the Bank from provements and constructing a new resi- proceeds that he H received from & H at dence for speculative resale on a basis. the closing loan’s December and Burge, attorney a former and a real estate purchase used it deposit developer, certificate of agreed to finance the entire (the “CD”). and, purchase return, Burge signed then an price “Own- H & H (the agreed er’s Consent the promissory Pledge” to execute two CD notes to $175,000, Burges, “Pledge”), 29, 1993, the one for and another also dated December $200,000. for parties’ Pursuant as additional collateral required for the $175,000 agreement, $865,000 the note was to be loan. Pledge part The of a Howeth, purpose 1. For opinion, the collectively are referred to as “H & H” where Howard, Interests, Building possible. and H & H Inc. public auction was sold at a “Security Property the Agreement-Pledge” $600,000. bidder, the for highest the H to required sign. H & Bank had all of loan documents been After the History II. Procedural by Burge, H and but before signed H & 29, 1995, filed suit On November documents, the the Bank signed the Bank assumpsit, subrogation, H for against H & Note. That error in the noticed clerical damages resulting the and contribution for listed Note’s incorrectly error from Bank’s foreclosure 28, 1995, instead De- date December action, $200,000 separate In CD.2 28,1994, years two giving the Note cember Howard, Howeth sued undisputed one. to mature instead of It is deficiency be- guarantors, Note’s H & by the Bank and H that Note price and Property’s tween sale only to mature after one was intended On remaining on the Note. amount due The Bank year, on December 1, 1996, April Burges amended their that it notified Howeth would fund add H to petition in suit until error was corrected. How- loan dam- as a defendant to seek striking out the corrected the date eth its ages entity from that foreclosure year and the intended inserting incorrect com- particular, Burges CD. maturity date. Howeth then initialed al- materially plained that the Note was correction, the Bank to advance began matu- correction to the tered Howeth’s under the loan. Neither Howeth funds date, after rity request, the Bank’s nor the Bank contacted about the Pledge. signed the already had made to correction argued therefore that date. wrongfully converted the CD