theodore-vakrinos-as-an-individual-and-as-trustee-of-the-duvar-family ( 2015 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-14-00328-CV
THEODORE VAKRINOS, AS AN APPELLANT
INDIVIDUAL AND AS TRUSTEE OF
THE DUVAR FAMILY TRUST
V.
THE LAW OFFICES OF KENNETH APPELLEES
D. HARTLESS AND BRIAN
HARGROVE D/B/A HARTLESS &
HARGROVE, PLLC; KENNETH D.
HARTLESS, AS INDIVIDUAL AND
AS GUARANTOR
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FROM COUNTY COURT AT LAW NO. 1 OF TARRANT COUNTY
TRIAL COURT NO. 2012-005737-1
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MEMORANDUM OPINION 1
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Appellant Theodore Vakrinos appeals from the trial court’s take-nothing
judgment against him in his suit for unpaid rent against Appellees Kenneth D.
1
See Tex. R. App. P. 47.4.
Hartless, individually and as guarantor, and the Law Offices of Kenneth D.
Hartless and Brian Hargrove, doing business as Hartless & Hargrove, PLLC (the
law firm). Vakrinos argues in three issues that the trial court’s judgment is
erroneous because Hartless failed to prove the defense of limitations on which
the judgment was based. Because we hold that the statute of limitations bars
Vakrinos’s claims, we affirm.
Background
Vakrinos sued Hartless, Brian Hargrove, and the law firm for unpaid rent
under a lease. Vakrinos alleged that Hartless and Hargrove each signed the
lease as a personal guarantor for the law firm, that the lease terminated on
August 31, 2008, and that he was owed $10,197 as rent June, July, and August
2008. The lease required payment on the first day of each month. Vakrinos filed
his suit on August 30, 2012, more than four years after the due date for each of
the alleged missed payments.
The lease was made between Vakrinos and the law firm of Kenneth D.
Hartless and Brian Hargrove, doing business as Hartless & Hargrove, PLLC.
The lease, effective as of September 1, 2003, was signed by “Kenneth D.
Hartless, Esquire” and “Brian Hargrove, Esquire,” and the signature page does
not indicate that they signed in any capacity except their individual capacities.
They did not sign their names under a signature block for “Hartless & Hargrove,
PLLC” as they had under a prior lease with Vakrinos.
2
The lease had a guaranty attached as an addendum. The copy of the
guaranty that was produced at trial was not legible. However, Vakrinos also
introduced a copy of a guaranty signed by a nonparty in an unrelated transaction.
Vakrinos’s attorney asserted that the document contained the same terms as the
guaranty signed by Hartless and Hargrove and was being included so that the
court would have a legible copy of the guaranty’s terms. Hartless did not object.
The guaranty was signed by both Hartless and Hargrove. Under the
document’s terms, Hartless and Hargrove each guaranteed the full payment and
performance of all obligations under the lease and agreed that “Landlord shall
not be first required to enforce against Tenant or any other person any liability,
obligation, or duty guaranteed hereby before seeking enforcement” against them.
The guaranty further stated that the landlord could bring suit against any or all
guarantors of the lease, jointly and severally.
Before trial, Hargrove settled with Vakrinos and was nonsuited. The case
proceeded to a bench trial on Vakrinos’s remaining claims. At trial, Hartless
stipulated to the amount that was owed under the lease. After considering
Vakrinos’s evidence, the trial court rendered judgment against Vakrinos on the
basis of limitations.
In findings of fact and conclusions of law, the trial court found that more
than four years had elapsed between the dates that the rents were due and the
date that the suit was filed. The trial court further found that there was no signed
3
writing by Hartless or the law firm acknowledging the debt that would start the
limitations period on a new debt. Vakrinos now appeals.
Discussion
In his first issue, Vakrinos challenges the sufficiency of the evidence to
establish the statute of limitations defense to his claim against the law firm and
Hartless. Vakrinos argues that Hartless and the law firm stipulated to Vakrinos’s
“entire case” and that by doing so, Hartless and the law firm undermined their
own limitations defense. He further argues that Hartless and the law firm offered
no testimony or other evidence to establish limitations.
The attorney for Hartless and the law firm stipulated only to the amount
owed for the three months of unpaid rent less the amount that Hargrove had paid
in settlement. Vakrinos is correct, however, that Hartless and the law firm relied
on Vakrinos’s own pleadings and evidence to establish the defense of limitations
rather than introduce their own evidence. Vakrinos’s pleadings and evidence
showed that the suit was brought more than four years after the rent was due
and not paid. The attorney for Hartless and the law firm pointed out to the trial
court that the lease required payment on the first of the month, and he argued
that “when rent payment comes due for a particular period of time, that’s when
the limitations period begins to run.” 2 Hartless and the law firm were not required
2
See Stine v. Stewart, 80 S.W.3d 586, 592 (Tex. 2002) (stating that a
breach of contract claim is governed by the four-year statute of limitations and
that “a breach of contract claim accrues when the contract is breached”); F.D.
Stella Products Co. v. Scott, 875 S.W.2d 462, 465 (Tex. App.—Austin, 1994, no
4
to introduce their own evidence if Vakrinos’s evidence established that limitations
had run. 3 We overrule Vakrinos’s first issue.
In his second issue, Vakrinos challenges the trial court’s determination of
when the statute of limitations began to run on his claim against Hartless as
guarantor. Vakrinos first argues that the obligation of the guarantors did not
become fixed and certain until after the law firm moved out of the premises
because he had no way to determine before then what damage had occurred to
the premises. Thus, he argues, the limitations period did not start running on his
claim against the guarantors at the same time as the limitations period for his
claim under the lease because the obligation was not fixed and certain until the
law firm moved out. But Vakrinos did not allege or sue to recover for damage to
the property. He sued to recover unpaid rent, and he was entitled to sue on the
guaranty for that rent before the law firm moved out. His argument is therefore
irrelevant.
Vakrinos then cites the Dallas Court of Appeals’s decision in Wiman 4 for
the proposition that a guarantor cannot assert the statute of limitations defense of
the principal obligor. Wiman is distinguishable. Wiman acknowledged the limited
pet.) (“For breach of contracts requiring fixed, periodic payments, Texas law is
clear that a separate cause of action arises for each missed payment”).
3
See, e.g., Arnold v. Shuck, 24 S.W.3d 470, 471–72 (Tex. App.—
Texarkana 2000, pet. denied) (holding that the defendant established her right to
summary judgment on limitations based on the plaintiff’s petition).
4
Wiman v. Tomaszewicz, 877 S.W.2d 1, 5–6 (Tex. App.—Dallas 1994, no
writ).
5
general rule that allows a guarantor of a note to assert defenses to the
obligations that the principal could assert but held that it did not apply in that
case. 5 Wiman stated that a court determines when a claim accrues under a
guaranty by looking at the terms of the guaranty, and under the terms of the
guaranty in that case, demand was a condition precedent to suit against the
guarantor. 6 Thus, the limitations period did not begin to run on the claim against
that guarantor “until demand was made, unless demand was waived or
unreasonably delayed.” 7
Here, Hartless waived notice of default and presentment, and the guaranty
does not contain any express provision making a demand a condition precedent
to suit. Thus, Vakrinos could have sued under the guaranty immediately when
the rent was not paid. But even if we were to read the guaranty as containing a
demand requirement as a condition precedent to suit, 8 a plaintiff suing under a
guaranty
5
Id.
6
Id. at 6.
7
Id. (emphasis added).
8
See Yamin v. Conn, L.P., No. 14-10-00597-CV, 2011 WL 4031218, at *3,
*5 (Tex. App.—Houston [14th Dist.] Sept. 13, 2011, no pet.) (mem. op.)
(construing language in a guaranty by which the guarantor waived the landlord’s
obligation to provide a demand to trigger the guarantor’s obligation along with
language stating that “no delay or omission by Landlord in exercising any power
or right hereunder shall impair any such right or power or be construed as a
waiver thereof” and holding that the guarantor’s waiver of demand as a condition
to payment did not mean the landlord could not rely on a timely asserted demand
to begin the running of limitations).
6
may not, by failing or refusing to perform the condition, toll the
running of the statute and reserve for himself the right to sue within
the statutory period from such time as he decides to make a
demand. On the contrary, it is the general rule that in such a case a
demand must be made within a reasonable time after it may lawfully
be made. What this reasonable time is depends upon the
circumstances of each case. . . . [H]owever, in the absence of
mitigating circumstances, a time coincident with the running of the
statute will be deemed reasonable, and if a demand is not made
within that period the action will be barred. 9
As Wiman noted, in many situations, the statute of limitations on the
principal obligation and the guaranty will run concurrently, 10 and that was the
case here. Vakrinos states in his brief that he made no demand on Hargrove or
Hartless in their capacities as guarantors until he filed this suit. That date was
more than four years from the time that he could have lawfully made a demand
under the guaranty, and there was no evidence of mitigating circumstances; thus
the demand was not made within a reasonable time. 11 We overrule his second
issue.
Vakrinos asks in his third issue whether the trial court reversibly erred by
concluding that Hargrove had no authority to bind Hartless. Hartless argues in
his brief that the signatures on the lease do not indicate that he and Hargrove
9
Aetna Cas. & Sur. Co. v. State for Use & Benefit of City of Dallas, 86
S.W.2d 826, 831 (Tex. Civ. App.—Fort Worth 1935, writ dism’d) (op. on reh’g)
(emphasis added); see also Stevens v. State Farm Fire & Cas. Co., 929 S.W.2d
665, 671 (Tex. App.—Texarkana 1996, writ denied).
10
Wiman, 877 S.W.2d at 7.
11
See Aetna Cas., 86 S.W.2d at 831; see also Stevens, 929 S.W.2d at
671.
7
were signing on behalf of or as representatives of the law firm. This issue was
not raised at trial, and we will assume for purposes of this appeal that Hartless
and Hargrove signed the lease in their representative capacities. 12
Vakrinos relies on an email sent to him by Hargrove to establish that his
claim was brought within the limitations period. After the rent had gone unpaid,
Hargrove sent Vakrinos an email stating, “it is my intention, as well as Ken’s, to
pay this balance. Unfortunately, it will require a payment plan o[f] sorts.”
Vakrinos argues that this email was a written acknowledgement under civil
practice and remedies code section 16.065. 13
Under section 16.065, “[a]n acknowledgment of the justness of a claim that
appears to be barred by limitations is not admissible . . . to defeat . . . 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.” 14 Vakrinos contends that
because Hartless and Hargrove were jointly and severally liable under the lease
and guaranty, Hargrove’s email binds Hartless. We disagree.
12
See Dann v. Team Bank, 788 S.W.2d 182, 184 (Tex. App.—Dallas 1990,
no writ) (stating that “[f]or there to be a guarantor, there must be a primary
obligation on the part of another, the performance of which is guaranteed” and
that “[u]nder normal circumstances, a written collateral undertaking given to
secure a corporate debt will be rendered meaningless if the primary debtor is
found to be the sole party liable thereunder” (citations omitted)).
13
Tex. Civ. Prac. & Rem. Code Ann. § 16.065 (West 2015).
14
Id.
8
An acknowledgement operates as a new obligation, not a revival of a prior
debt. 15 Assuming that Hargrove’s email was sufficient to constitute an
acknowledgement under the statute, it did so only as to Hargrove, the person
who made the acknowledgment and created a new obligation. 16 The trial court
correctly concluded that the limitations period had run as to Hartless before
Vakrinos filed suit. We overrule Vakrinos’s third issue.
Although Vakrinos did not bring a separate issue regarding attorney’s fees,
his brief contains an argument that he was entitled to them under section 38.001
of the civil practice and remedies code. 17 Because of our disposition of his other
issues, we overrule this argument. 18
15
See Allied Chem. Corp. v. Koonce, 548 S.W.2d 80, 82 (Tex. Civ. App.—
Houston [1st Dist.] 1977, no writ) (construing former version of statute and stating
that “[s]uch a written acknowledgment will not support a cause of action on the
old debt based on waiver of the statute of limitation or estoppel from asserting
it”); see also Sheffield Capital Corp. v. Konen, No. A14-94-00157-CV, 1995 WL
128250, at *2 (Tex. App.—Houston [14th Dist.] Mar. 23, 1995, no writ) (not
designated for publication).
16
See Weber v. Prinz, 379 S.W.2d 419, 420 (Tex. Civ. App.—Fort Worth
1964, no writ) (holding that a new promise to pay made by one obligor under a
note could not operate as a new promise to pay on behalf of any other obligor on
the note).
17
Tex. Civ. Prac. & Rem. Code Ann. § 38.001 (West 2015).
18
See Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997) (stating
that to recover attorney’s fees under section 38.001, a party must prevail on a
cause of action for which attorney’s fees are recoverable).
9
Conclusion
Having overruled Vakrinos’s three issues, we affirm the trial court’s
judgment.
/s/ Lee Ann Dauphinot
LEE ANN DAUPHINOT
JUSTICE
PANEL: DAUPHINOT, MEIER, and GABRIEL, JJ.
DELIVERED: August 31, 2015
10