Opinion
04-21-00093-CV
05-18-2022
WELLS FARGO BANK, N.A., Appellant v. Raul R. MARTINEZ, Jr., Appellee
From the 37th Judicial District Court, Bexar County, Texas Trial Court No. 2019-CI-24366 Honorable Tina Torres, Judge Presiding
Sitting: Rebeca C. Martinez, Chief Justice, Irene Rios, Justice, Lori I. Valenzuela, Justice
MEMORANDUM OPINION
LORI I. VALENZUELA, JUSTICE
Wells Fargo Bank, N.A. appeals the trial court's order denying its summary judgment and granting summary judgment in favor of Raul R. Martinez, Jr. We affirm the judgment of the trial court in part, reverse in part, and remand.
Background
By a December 21, 2005 Business Lending Confirmation Letter (the "Letter"), Wells Fargo extended Martinez a $187, 500.00 line of credit. The parties' contract consists of the Letter, a financing Disclosure, and "Related Documents." In the Letter, Martinez promised to pay "the principal amount of $187, 500.00, or so much as may be advanced and outstanding from time to time . . ." (emphasis added). The Letter incorporates and is accompanied by a Deed of Trust in which Martinez pledged real property as collateral to secure the line of credit.
Notably, the Disclosure is not included in the summary judgment record.
On February 19, 2019, Wells Fargo sent Martinez a letter asserting its purported right of acceleration; stating that the "Note" had a balance of $180, 846.80; and demanding payment of the balance by March 1, 2019. On November 26, 2019, Wells Fargo filed a breach of contract suit against Martinez, alleging that Martinez failed to abide by the terms of the contract by not making payments as required under the terms of the contract and that Martinez was now in default.
Martinez subsequently filed a motion for summary judgment asserting the statute of limitations bars Wells Fargo's claims. Wells Fargo filed a response contending its claims are not barred by limitations and moved for summary judgment on liability and damages for its breach of contract claim. The trial court granted Martinez's motion for summary judgment and denied Wells Fargo's motion for summary judgment. Wells Fargo appealed.
Limitations
In its first two issues, Wells Fargo contends the trial court erred in granting Martinez's summary judgment based on his affirmative defense of limitations.
Standard of Review
Questions regarding which limitations provision applies and when a claim accrues are generally questions of law. See Williams v. Khalaf, 802 S.W.2d 651, 658 (Tex. 1990) (referring to question of which limitations statute applies as a question of law); Exxon Corp. v. Emerald Oil & Gas Co., L.C., 348 S.W.3d 194, 202 (Tex. 2011) ("When a cause of action accrues is normally a question of law."). We review questions of law de novo. See In re Humphreys, 880 S.W.2d 402, 404 (Tex. 1994). Our de novo review applies regular rules of contract construction. See Koepp v. Koepp, No. 04-08-00760-CV, 2009 WL 1800611, at *2 (Tex. App.-San Antonio June 24, 2009, no pet.) (mem. op.). If a written instrument is so worded that it can be given a certain or definite legal meaning or interpretation, then it is not ambiguous, and we will construe the contract as a matter of law. See Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983).
Analysis
The parties do not dispute that a four-year statute of limitations applies to Wells Fargo's claim. However, a defendant moving for summary judgment on the affirmative defense of limitations bears the burden of conclusively establishing when the cause of action accrued. Draughon v. Johnson, 631 S.W.3d 81, 89 (Tex. 2021). Thus, Martinez was entitled to summary judgment only if he established there were no genuine issues of material fact and that his affirmative defense of limitations applied as a matter of law. Id. at 87.
Since one section of the Deed of Trust declares that the "Note" matures on December 10, 2010, Martinez asserts the limitations period on his line of credit accrued on December 10, 2010. Wells Fargo contends that its breach of contract claim will not accrue until the contract's maturity date, which Wells Fargo contends is not until December 31, 2049 or March 31, 2050; alternatively, Wells Fargo argues its cause of action accrued upon acceleration of the contract in February 2019.
We hold Martinez failed to establish accrual on his limitations defense as a matter of law. While Martinez points to some language in the Deed of Trust suggesting a December 10, 2010 maturity date, Wells Fargo points to different language in the Deed of Trust suggesting otherwise. Importantly, the Letter itself does not expressly state a maturity date because the Letter extended to Martinez a revolving line of credit that is not payable on a date certain. See NAB Asset Venture III, L.P. v. John O'Brien & Associates, No. 05-96-01453-CV, 1999 WL 88776, at *4 (Tex. App.- Dallas Feb. 23, 1999, pet. denied) ("Construing the promise to pay to refer to the maximum amount that may be loaned is the only construction which gives meaning to all the terms of the note."); see also Kaldis v. Crest Fin., 463 S.W.3d 588, 596-97 (Tex. App.-Houston [1st Dist.] 2015, no pet.) (discussing statute of limitations in context of revolving line of credit). Although the contract- which consists of the Letter, the Disclosure, and the Deed of Trust-contains apparently inconsistent language, we must harmonize apparently contradictory or inconsistent terms, if possible, to give effect to all the words and the intent of the parties as expressed in the instrument. Hysaw v. Dawkins, 483 S.W.3d 1, 13 (Tex. 2016). However, on this record, it is not possible to harmonize various apparently contradictory and inconsistent terms because Martinez did not attach a portion of the contract-the Disclosure. Critically, the real property collateral secured by the Deed of Trust is expressly made "[s]ubject to the terms and conditions of the Disclosure."
In sum, Martinez failed to establish the date Wells Fargo's claim accrued as a matter of law because the summary judgment record does not contain the parties' entire contract, yet the whole contract is required to harmonize apparently inconsistent language within and among the documents constituting a portion of the parties' contract. Therefore, we sustain Wells Fargo's first and second issues and hold the trial court erred in granting summary judgment in favor of Martinez based on limitations.
Liability and Damages
Because contracts must be construed as a whole, Wells Fargo's failure to attach the Disclosure precludes summary judgment in its favor. See Brooks v. Excellence Mortgage, Ltd., 486 S.W.3d 29, 36 (Tex. App.-San Antonio 2015, pet. denied) (existence of valid contract required to establish breach of contract). Therefore, we overrule Wells Fargo's third issue and hold the trial court did not err in denying its motion for summary judgment.
Conclusion
We affirm the portion of the trial court's order denying Wells Fargo summary judgment on it breach of contract claim, reverse the portion of the trial court's order granting Martinez's summary judgment on this same claim, and remand the case to the trial court for further proceedings.
CONCURRING OPINION
Rebeca C. Martinez, Chief Justice
I agree with the majority that neither party is entitled to summary judgment. However, I would withhold determination that "the Letter extended to Martinez a revolving line of credit that is not payable on a date certain." Instead, I believe the loan's maturity date is an unresolved fact question that precludes summary judgment for either party.
Wells Fargo is not entitled to summary judgment because it has not established the existence of a legally binding contract. See Brooks v. Excellence Mortgage, Ltd., 486 S.W.3d 29, 36 (Tex. App.-San Antonio 2015, pet. denied). "In a contract to loan money, the material terms will generally be: the amount to be loaned, maturity date of the loan, the interest rate, and the repayment terms." T.O. Stanley Boot Co., Inc. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992). "If no due date is specified in a written promissory note, payment is due on demand and demand may be made within a reasonable time." Jackson v. Carlson, No. 03-08-00429-CV, 2009 WL 638848, at *2 (Tex. App.-Austin Mar. 12, 2009, no pet.) (citing Tex. Bus. & Com. Code Ann. § 3.108).
Here, we cannot conclude that Martinez's line of credit is due on demand or otherwise "not payable on a date certain" because (1) the Disclosure may state a date certain, or (2) the documents comprising the loan agreement (which include the Letter, the Disclosure, and the Deed of Trust), read together and harmonized, may require a construction that includes a date certain. In fact, the two documents that we have-the Letter and the Deed of Trust-suggest a date certain. The Letter references a maturity date in the term: "If this Credit is booked after the billing date for the first scheduled payment, Bank may defer each scheduled payment date and the maturity date by one month." This possibility of delay suggests a date certain, which can be delayed, not the absence of a date certain. The Deed of Trust references December 10, 2010, as a specific maturity date. It lists as a "Secured Obligation:"
The Letter states: "The Credit shall bear Interest and be repayable in accordance with the terms and conditions of the Agreement. The Agreement consists of (1) this Confirmation Letter (this "Letter"), (2) the Business Direct Wells Fargo Business Real Estate Financing Disclosure dated May 01, 2005 (the "Disclosure") and (3) any Related Documents." The Letter states that all capitalized terms are defined in the Disclosure. Even without the Disclosure, it is clear that the Deed of Trust is a Related Document because the Letter contains the following term: "The Credit also is conditioned upon execution and delivery of this Confirmation Letter and the following Related Documents: Deed of Trust - Texas . . . ."
("Note") dated as of December 21, 2005, in the amount of $187, 500.00 with interest as provided therein, executed by Raul R. Martinez Jr. and payable to Beneficiary or its order, and maturing on December 10, 2010 . . . .
While it is premature to speculate further as to a maturity date without the Disclosure, it is also premature to conclude without the Disclosure that Martinez's line of credit "is not payable on a date certain."
The cases the majority cite in support concern promissory notes without any terms referencing maturity, see NAB Asset Venture III, L.P. v. John O'Brien & Associates, No. 05-96-01453-CV, 1999 WL 88776, at *1 (Tex. App.- Dallas Feb. 23, 1999, pet. denied), and a due-on-demand open account. See Kaldis v. Crest Fin., 463 S.W.3d 588, 596 (Tex. App.-Houston [1st Dist.] 2015, no pet.). Neither case contains terms like those found in the Letter and the Deed of Trust.
Summary judgment is precluded in Martinez's favor because he has not established that December 10, 2010 is the maturity date from which the limitations period ran. He only has established that the Deed of Trust references the line of credit as "maturing on December 10, 2010." The Deed of Trust does not purport to set the maturity date or any conditions under which it may be extended. It also is "[s]ubject to the terms and conditions of the Disclosure." Again, without the Disclosure, we should not say more. On this record, I agree that Martinez has not unambiguously established December 10, 2010 as the loan maturity date.