Opinion
No. 06-17-00058-CV
10-11-2017
JAMES R. DUNNAGAN, JR., Appellant v. FRANK STEGIENT AND RAMONA TAFF, Appellees
On Appeal from the County Court at Law No. 2 Tarrant County, Texas
Trial Court No. 2016-000095-2 Before Morriss, C.J., Moseley and Burgess, JJ.
MEMORANDUM OPINION
On October 28, 2011, James R. Dunnagan, Jr., borrowed $158,427.66 from Frank Stegient and Ramona Taff to pay his property taxes in Parker County and agreed orally to pay it back. In 2013, Dunnagan documented that loan by signing a form promissory note dated October 28, 2011, agreeing to repay the $158,427.66 to Stegient and Taff with five percent interest per annum (Note). In 2016, Stegient and Taff sued Dunnagan to collect on the Note. Dunnagan asserted that the statute of limitations barred Stegient and Taff's claims. After a trial to the bench, the trial court rendered judgment against Dunnagan for $211,731.00 in principal and interest accrued on the indebtedness, $13,010.48 for attorney fees, and $1,559.60 in court costs.
Originally appealed to the Second Court of Appeals in Fort Worth, this case was transferred to this Court by the Texas Supreme Court pursuant to its docket equalization efforts. See TEX. GOV'T CODE ANN. § 73.001 (West 2013). We follow the precedent of the Second Court of Appeals in deciding this case. See TEX. R. APP. P. 41.3.
This document did not contain any terms of repayment. As explained below, it constituted a demand note.
On appeal, Dunnagan argues that the debt was barred by the four-year statute of limitations, that the award of attorney fees was not supported by a demand under Section 38.001 of the Texas Civil Practice and Remedies Code or by necessary evidence to support the amount of attorney fees awarded, and that it was error not to make findings of fact and conclusions of law.
We affirm the trial court's judgment because (1) limitations does not bar recovery on the debt, (2) attorney fees were properly awarded, and (3) Dunnagan was not harmed by the decision to overrule his requests for findings of fact and conclusions of law.
(1) Limitations Does Not Bar Recovery on the Debt
At trial, Dunnagan acknowledged that he borrowed, and orally promised to repay, $158,427.66 from Stegient and Taff on October 28, 2011. Taff also testified that Dunnagan promised to repay the entire debt in six months, at five percent interest per annum, but Dunnagan contested these facts. All parties agreed that the oral promise Dunnagan made was not commemorated in writing at the time. According to Taff, after the six-month period expired, Dunnagan periodically said that he planned to repay the debt after selling some of his property. Taff testified that Dunnagan never claimed that he did not owe the debt.
In 2013, after Dunnagan still had not paid any money on the debt, Stegient and Taff asked that Dunnagan sign a written document acknowledging his debt. Dunnagan purchased a pre-printed form and took it to Taff, who filled it out. The pre-printed form was titled "Promissory Note," was dated October 28, 2011, and contained a promise from Dunnagan to pay Stegient and Taff $158,427.66, with five percent interest. Although the Note contained a space for the parties to specify the manner in which the debt was to be repaid, the space was never filled out, and there were no other terms otherwise specifying when the debt was due. Dunnagan testified, "I borrowed the money, and they needed something legal, so I signed it." He admitted that, as of the date of trial, he had not paid any portion of the $158,427.66 debt.
Stegient and Taff's petition attached the Note, alleged that they had made demand for payment under it, asserted a cause of action for breach of the Note for Dunnagan's failure to pay, and made a claim for attorney fees. The trial court awarded Stegient and Taff the relief they requested.
"An action for breach of contract is governed by a four-year statute of limitations." HSM WynnGate 04, Ltd v. Tex. Sotherby Homes, Inc., No. 02-15-00281-CV, 2016 WL 4540492, at *3 (Tex. App.—Fort Worth Aug. 31, 2016, pet. denied) (mem. op.) (citing TEX. CIV. PRAC. & REM. CODE ANN. § 16.051 (West 2015)). Likewise, "a person must bring suit to collect a debt not later than four years after the cause of action accrues." Manandhar v. Jamshed, No. 02-11-00027-CV, 2011 WL 3835980, at *2 (Tex. App.—Fort Worth Aug. 31, 2011, no pet.) (mem. op.) (citing TEX. CIV. PRAC. & REM. CODE ANN. § 16.004(a)(3) (West 2002)). "Limitations begin to run when a cause of action accrues, and the date of accrual is a question of law." HSM WynnGate, 2016 WL 4540492, at *3.
If Stegient and Taff were suing Dunnagan on his 2011 oral promise, the suit would be barred by limitations. However, because their suit was based on the 2013 Note, the trial court did not err in finding that they brought suit within the four-year statute of limitations.
"Although a debt is barred by limitations, limitations can be avoided if the party to be charged acknowledges the debt in writing." In re Estate of Curtis, 465 S.W.3d 357, 367 (Tex. App. 2015, pet. dism'd); see Healy v. Masters, 504 S.W.2d 594, 596 (Tex. Civ. App.—Fort Worth 1974, no writ). This is because an agreement acknowledging the debt "create[s] a new obligation." Stine v. Stewart, 80 S.W.3d 586, 591 (Tex. 2002) (per curiam).
An acknowledgment of the justness of a claim that appears to be barred by limitations is not admissible in evidence to defeat the law of limitations if made after the time that the claim is due unless the acknowledgment is in writing and is signed by the party to be charged.TEX. CIV. PRAC. & REM. CODE ANN. § 16.065 (West 2015). Under Section 16.065, "an agreement [must]: 1) be in writing and signed by the party to be charged; 2) contain an unequivocal acknowledgment of the justness or the existence of the particular obligation; and 3) refer to the obligation and express a willingness to honor that obligation." Stine, 80 S.W.3d at 591. "Additionally, the amount of the obligation the acknowledgment describes must be 'susceptible of ready ascertainment.'" Id. (quoting Stefek v. Helvey, 601 S.W.2d 168, 171 (Tex. Civ. App.—Corpus Christi 1980, writ ref'd n.r.e.)). "If an agreement meets these acknowledgment requirements, a party may sue for breach of that agreement." Id. at 592; see Curtis, 465 S.W.3d at 367).
Here, it was undisputed that the Note was in writing and signed by Dunnagan. It expressly stated that Dunnagan promised to pay Stegient and Taff the sum of $158,427.66. In executing the 2013 Note with this express language, Dunnagan acknowledged that the debt existed, recognized that the obligation was just, and expressed a willingness to honor it. See Stine, 80 S.W.3d at 592. Thus, the Note met the statutory requirements for an acknowledgement, which created a new obligation that Stegient and Taff were entitled to enforce. Id.
"We conduct a de novo review of the trial court's conclusions of law," and "whether [a] written instrument sufficiently acknowledges a debt is [a] question of law." Curtis, 465 S.W.3d at 367 (citing Bright & Co. v. Holbein Family Mineral Trust, 995 S.W.2d 742, 745 (Tex. App.—San Antonio 1999, pet. denied)).
Dunnagan acknowledges this body of caselaw involving acknowledgements of debt, but argues that, although he signed the Note in 2013, the statute of limitations expired in 2015 because the Note was improperly dated October 28, 2011, which was the original date of his oral promise to pay. At trial, it was undisputed that the Note was executed and signed in 2013, notwithstanding the date contained on the top line of the Note. Dunnagan cites no caselaw, and we have found none, suggesting that a document meeting the requirements of an acknowledgment of debt under Section 16.065 ceases to be effective if it contains the date of the original debt. Accordingly, we reject Dunnagan's contention.
Where, as here, "no time for payment of a debt is stated in a note, it is a demand note." Manandhar, 2011 WL 3835980, at *3 (citing Salinas v. Wright, 11 Tex. 572, 575 (1854) ("The plaintiff declared as upon a promissory note, which did not specify any day of payment. The legal import of such a note is that it is payable on demand[.]")).
Because it was undisputed that the Note was executed in 2013, the trial court properly concluded that Stegient and Taff's lawsuit, filed in 2016, was not barred by the statute of limitations. We overrule this point of error.
The acknowledgement of debt stated, "In the event this note shall be in default, and placed with an attorney for collection, then the undersigned agree to pay all reasonable attorney fees and costs of collection." Dunnagan argues that the award of attorney fees was improper because (1) there was no evidence that Stegient and Taff made presentment of their claim as required by Section 38.002(2) of the Texas Civil Practice and Remedies Code and (2) the amount awarded was not supported by the evidence.
(a) Dunnagan acknowledged presentment
"To recover attorney's fees . . . the claimant must present the claim to the opposing party or to a duly authorized agent of the opposing party." TEX. CIV. PRAC. & REM. CODE ANN. § 38.002(2) (West 2015). "The claimant bears the burden to plead and prove presentment." Friend v. Friend, No. 02-15-00166-CV, 2016 WL 7240596, at *6 (Tex. App.—Fort Worth Dec. 15, 2016, no pet.) (mem. op.). "However, a claimant is excused from proving presentment if she pleads that all conditions precedent to recovery have been met and the opposing party fails to specifically deny presentment." Id. (citing TEX. R. CIV. P. 54).
Stegient and Taff's petition alleged that all conditions precedent were performed, and further specified that they had made demand for payment under the Note several times, without success. In his answer, Dunnagan failed to deny presentment. Instead, he merely denied that demand was made "on the loan or promissory note at anytime before November 12, 2015." In doing so, he effectively stated that demand was made November 12, 2015. Indeed, at trial, the evidence demonstrated that Stegient and Taff's counsel sent a demand letter to Dunnagan before December 2015. We find that Dunnagan failed to properly deny the act of presentment and instead acknowledged presentment.
"Presentment necessary for the recovery of attorney's fees may be made either before or after filing suit, provided it is made at least thirty days before judgment." VingCard A.S. v. Merrimac Hosp. Sys., Inc., 59 S.W.3d 847, 868 (Tex. App.—Fort Worth 2001, pet. denied).
Dunnagan further argued that his denial of presentment was verified. His answer contained the following signed statement:
The undersigned states under oath: "I am the Defendant in this case. I have read the above Defendant's Original Answer. In addition, I deny that I signed promissory note for Plaintiffs at any time in calendar years 2011 or 2012, nor did I agree to pay interest to Plaintiffs on any amount loaned to me, nor did Plaintiffs loan me any sum of money during the calendar years 2012 or 2013. The statements contained in this paragraph and in Section 3, paragraph b in the Defendant's Original Answer are within my personal knowledge and are true and correct."The special exceptions and denials regarding presentment were not contained in Section 3, paragraph b. Therefore, they were not verified.
Next, we address Dunnagan's legal sufficiency complaint regarding the amount of attorney fees awarded. A legal sufficiency challenge is sustained when:
(1) the record discloses a complete absence of evidence of a vital fact; (2) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more
than a mere scintilla; or (4) the evidence establishes conclusively the opposite of a vital fact.Sundance Minerals, L.P. v. Moore, 354 S.W.3d 507, 513 (Tex. App.—Fort Worth 2011, pet. denied) (citing Uniroyal Goodrich Tire Co. v. Martinez, 977 S.W.2d 328, 334 (Tex. 1998)). "In determining whether there is legally sufficient evidence to support the finding under review, we must consider evidence favorable to the finding if a reasonable fact[-]finder could and disregard evidence contrary to the finding unless a reasonable fact[-]finder could not." Id. (citing Cent. Ready Mix Concrete Co. v. Islas, 228 S.W.3d 649, 651 (Tex. 2007); City of Keller v. Wilson, 168 S.W.3d 802, 807, 827 (Tex. 2005)).
We are to consider the following factors in determining reasonableness of attorney fees:
(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly;Id. at 513-14 (citing Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997)). "A trial court is not required to receive evidence on each of these factors." Id. at 514.
(2) the likelihood . . . that the acceptance of the particular employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and
(8) whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered.
Stegient and Taff's counsel, Lane Odom, testified in support of the attorney fee award. Odom stated that she had been practicing law in Tarrant County since 1991, and she was familiar with what constituted a reasonable hourly rate for "commercial cases and note cases." Odom stated that she charged $275.00 per hour and that this was a reasonable hourly rate.
By stipulation, a summary of fees and expenses created by Odom was admitted into evidence. The summary indicated that Odom began work on the case in November 2015 and had sent twelve invoices, totaling $10,260.48, to Taff before the December 20, 2016, trial. The summary also indicated that the account had accrued an additional $1,523.60 in expenses for "a video deposition, a court reporter and a process server," for a total of $11,820.08. When shown the summary of fees and expenses, Taff testified that it was "pretty close" to the amount she had paid Odom for her services. Odom further testified that, just before and during trial, she had worked another ten hours at the same hourly rate and that adding the additional $2,750.00 to the $11,820.08 summary brought the total amount of reasonable and necessary fees to $14,570.00.
Due to a mathematical error, Odom actually testified that the total amount was $14,750.00.
During cross-examination, Dunnagan's counsel questioned how Odom arrived at the figures listed in the summary of fees and expenses, considering that it did not contain an indication of how much time she had spent working on the case. In response, Odom testified that she filled out manual time sheets, which "are incorporated into a software system that can either generate an itemized bill or in this case, can generate a summary." Odom further stated that dividing the amount of the bill by the hourly rate would yield the number of hours she had worked on the case. Here, Odom's testimony, along with the summary of fees, established that she worked a total of 47.3 hours on the case since November 2015.
In Sundance Minerals, the Fort Worth Court of Appeals found sufficient an affidavit which stated (a) how long counsel had been licensed to practice law, (b) that counsel was personally familiar with other lawsuits similar to the case that had been tried in the county, (c) that he was personally familiar with normal and reasonable fees charged in such cases, and (d) that a fee of $12,000.00 was a reasonable and necessary fee. Sundance Minerals, 354 S.W.3d at 513-14. Reiterating that billing records were not required in order to recover attorney fees, the Fort Worth Court of Appeals rejected the argument that counsel's affidavit was conclusory. Id. at 514. Instead, finding that the affidavit presented evidence of the third and seventh Anderson factors, the Fort Worth Court of Appeals upheld the award of attorney fees.
Here, the evidence supporting attorney fees exceeded the evidence presented in Sundance Minerals. In addition to the third and seventh Anderson factors, the trial court also heard evidence of the amount involved and the length of the relationship between Odom and Stegient, and was provided with a statement of fees and expenses. Taff's testimony that she had paid the invoices submitted to her also indicated that the case was not taken on contingency. Consequently, we find that the evidence was legally sufficient to support the trial court's award of $13,010.48 for attorney fees, which was less than the fee Odom had sought at trial.
We overrule Dunnagan's point of error related to the award of attorney fees.
(3) Dunnagan Was Not Harmed by the Decision To Overrule His Requests for Findings of Fact and Conclusions of Law
A trial court is required to "file its findings of fact and conclusions of law within twenty days after a timely request is made." TEX. R. CIV. P. 297. Dunnagan's request for findings of fact and conclusions of law was untimely filed. Recognizing the untimeliness of the request, Dunnagan moved for an enlargement of time under Rule 5 of the Texas Rules of Civil Procedure, which the trial court denied. Dunnagan argues that the trial court erred in denying the six-day enlargement under Rule 5 because he showed that good cause existed for the enlargement. Dunnagan argued that he had retained new counsel after the deadline to file the request for findings of fact and conclusions of law had expired and that new counsel was still waiting on the transcript of the trial. We need not address whether the trial court erred in this matter, because Dunnagan cannot show that he was harmed by the trial court's decision not to enter findings of fact and conclusions of law.
A request for findings of fact and conclusions of law "shall be filed within twenty days after judgment is signed with the clerk of the court." TEX. R. CIV. P. 296.
The Rule states:
When by these rules . . . an act is required or allowed to be done at or within a specified time, the court for cause shown may, at any time in its discretion . . . upon motion permit the act to be done after the expiration of the specified period where good cause is shown for the failure to act.TEX. R. CIV. P. 5(b).
Dunnagan argues that he has been harmed by the trial court's failure to enter findings of fact and conclusions of law because he is "uncertain of the trial court's finding of when [Stegient and Taff's] cause of action accrued" and cannot properly present this case for our review. As we explained above, the question of when a cause of action accrues is a question of law, which does not necessitate findings of fact and conclusions of law. Accordingly, we overrule Dunnagan's last point of error.
We affirm the trial court's judgment.
Josh R. Morriss, III
Chief Justice Date Submitted: October 6, 2017
Date Decided: October 11, 2017