Bruce E. Gardner v. Claude Cummings Jr. & Ruth Cummings--Appeal from 234th District Court of Harris County

Affirmed and Memorandum Opinion filed August 22, 2006

Affirmed and Memorandum Opinion filed August 22, 2006.

In The

Fourteenth Court of Appeals

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NO. 14-04-01074-CV

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BRUCE E. GARDNER, Appellant

V.

CLAUDE CUMMINGS JR. & RUTH CUMMINGS, Appellees

On Appeal from the 234th District Court

Harris County, Texas

Trial Court Cause No. 01 62783

M E M O R A N D U M O P I N I O N

Appellant, Bruce E. Gardner, appeals from a take-nothing judgment entered in favor of appellees, Claude Cummings Jr. and Ruth Cummings,[1] in Gardner=s breach of contract suit. In three issues, Gardner contends the trial court erred by granting a new trial and by finding his suit was barred by the statute of limitations. Because all dispositive issues are clearly settled in law, we issue this memorandum opinion and affirm. See Tex. R. App. P. 47.4.

I. Background

In 1992, Gardner leased a residence to appellees. On February 14, 1996, Mr. Cummings entered into a written contract with Gardner modifying the terms of the lease. The contract included a payment schedule for past-due rent and set the terms and conditions for appellees= continued occupation. Appellees paid three of the scheduled installments but failed to make payments after April 5, 1996. Gardner sent an eviction notice approximately one month later, and appellees vacated the premises in August 1996.

In addition to the rent, appellees owed Gardner attorney=s fees for his legal services in an unrelated matter. In January 2000, Gardner and Mr. Cummings discussed both outstanding debts by telephone. According to Gardner, Mr. Cummings stated he did not intend to pay the legal fees, but he agreed to pay $6,725 as full satisfaction for the unpaid rent by December 31, 2000. Gardner sent a letter to Mr. Cummings confirming the oral agreement. Gardner filed suit against appellees in May 2000 to recover the unpaid attorney=s fees. However, Gardner did not file the suit at issue here for unpaid rent and other damages until December 10, 2001.

In January 2004, the trial court granted summary judgment in favor of Gardner on his suit for unpaid rent. Appellees never filed a response to Gardner=s motion for summary judgment and did not appear at the hearing. After judgment was entered, appellees filed a motion for new trial on the grounds that a legislative continuance should have been granted. The trial court held a hearing and granted the motion for new trial. Following a bench trial, the trial court entered a take-nothing judgment against Gardner.

II. Motion for New Trial

In his first issue, Gardner contends the trial court erred by granting appellees= motion for new trial. However, Aexcept in very limited circumstances, an order granting a motion for new trial rendered within the period of the trial court=s plenary power is not reviewable on appeal.@ Wilkins v. Methodist Health Care Sys., 160 S.W.3d 559, 563 (Tex. 2005) (citing Cummins v. Paisan Constr. Co., 682 S.W.2d 235, 236 (Tex. 1984)). There are only two recognized instances in which a trial court has been directed to set aside an order granting a new trial: (1) when the order was wholly void because it was not entered in the term in which the trial was conducted; and (2) when the trial court specified in its written order that its sole ground for granting the motion was that the jury=s answers to special issues were conflicting. See id; Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 918 (Tex. 1985). Neither of these situations exists here.

Here, the trial court granted the motion for a new trial Ain the interest of justice@ after judgment was entered against appellees when they failed to respond or appear at the hearing to contest Gardner=s motion for summary judgment. The trial court did not further specify the grounds for its ruling, and a record of the hearing is not included in the appellate record. Therefore, we cannot conclude the trial court abused its discretion by granting the motion for new trial. See Johnson, 700 S.W.2d at 918 (finding no abuse of discretion when the trial granted a motion for new trial Ain the interests of justice and fairness@).

III. Statute of Limitations

In his second and third issues, Gardner contends the trial court erred by finding the statute of limitations barred his suit. Although he does not set forth a standard of review, Gardner argues that appellees produced Ano evidence@ to establish the statute of limitations barred the claim. Therefore, we construe his argument as challenging the legal sufficiency of the evidence. In reviewing the evidence for legal sufficiency, we consider the evidence in the light most favorable to the verdict and indulge in every reasonable inference that supports it. City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005). We sustain a legal sufficiency or Ano-evidence@ challenge when the record discloses one of the following situations: (1) complete absence of evidence establishing a vital fact; (2) the court is barred from rules of law or of evidence from giving weight to the only evidence of a vital fact; (3) the evidence offered to prove a vital fact is no more than a mere scintilla; or (4) the evidence conclusively establishes the opposite of a vital fact. Id. at 810. Here, Gardner did not properly request, and the trial court did not file, findings of fact or conclusions of law. Therefore, we must assume the trial court made all findings in support of its judgment. Pharo v. Chambers County, 922 S.W.2d 945, 948 (Tex. 1996).

The statute of limitations is an affirmative defense, and the burden is on the defendant to Aplead, prove, and secure findings to sustain its plea of limitations.@ Tex. R. Civ. P. 94; Woods v. William M. Mercer, Inc., 769 S.W.2d 515, 517 (Tex. 1988). When a party without the burden of proof challenges legal sufficiency of the evidence to support an adverse finding, he must demonstrate that there is no evidence or insufficient evidence to support the adverse finding. See Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex. 1983).

The limitations period on a suit for debt or breach of contract is four years. Tex. Civ. Prac. & Rem. Code Ann. ' 16.004 (Vernon 2002); Tex. Civ. Prac. & Rem. Code Ann. ' 16.051 (Vernon 1997); Stine v. Stewart, 80 S.W.3d 586, 592 (Tex. 2002). A breach of contract claim accrues on the date the contract is breached. Stine, 80 S.W.3d at 592. Where an installment contract calls for fixed, periodic payments, a separate cause of action accrues for each missed payment. See F.D. Stella Prod. Co. v. Scott, 875 S.W.2d 462, 465B66 (Tex. App.CAustin 1994, no writ) (ATexas law is settled that in any circumstances where a contract requires fixed, periodic payments, the statute of limitations for a breach-of-contract claim will bar only those payments due more than four years before the filing of the suit.@).

It is undisputed that appellees entered into a written installment contract with Gardener on February 14, 1996. The terms of the agreement called for periodic, fixed payments of past-due rent through July 18, 1996 and future rent through December 20, 1996. It is undisputed that the last payment Gardner received for past-due rent was on April 5, 1996. Gardner testified that Asubsequent to [April 5, 1996], no payments were received and [appellees] were in breach of their agreement.@ It is also undisputed that appellees continued to rent on a month-to-month basis, and the payments for future rent were conditioned on appellees= continued occupation. Gardner testified that appellees remained on the property until August 1996. Therefore, the last installment payment under the terms of the contract was due in August 1996. Gardner did not file suit until December 2001, over a year after the four-year limitations period. Thus, absent proof that the statute of limitations was avoided, appellees have established the limitations defense as a matter of law. See Woods, 769 S.W.2d at 517.

Although his argument is unclear, Gardner appears to suggest the following three means by which he avoided the statute of limitations bar: (1) appellees specifically agreed to toll the statute of limitations; (2) appellees entered into an oral contract acknowledging the debt and extending the due date; and (3) appellees are estopped from asserting the statute of limitations. A party asserting a matter in avoidance of the statute of limitations at trial bears the burden of proving and securing favorable findings thereon. See id. at 518 & n.2. When a party attacks the legal sufficiency of an adverse finding on which he has the burden of proof, he must demonstrate that the evidence establishes, as a matter of law, all vital facts in support of the issue. Dow. Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001).

 A. Oral Agreement to Toll the Statute of Limitations

First, Gardner appears to argue that appellees entered into an oral agreement to toll the statute of limitations. The statute of limitations is a personal privilege that may be waived either before or after expiration of the statutory time period. Duncan v. Lisenby, 912 S.W.2d 857, 858B59 (Tex. App.CHouston [14th Dist.] 1995, no writ); Am. Alloy Steel, Inc. v. Armco, Inc., 777 S.W.2d 173, 177 (Tex. App.CHouston [14th Dist.] 1989, no writ). However, an agreement to toll the statute of limitations must be specific and for a reasonable time. Duncan, 912 S.W.2d at 858B59; Am. Alloy, 777 S.W.2d at 177.

Gardner bases his argument on the January 2000 telephone conversation in which Mr. Cummings agreed to pay $6,725 as full satisfaction of the debt. However, Gardner admitted at trial that they did not discuss the statute of limitations during this conversation. Further, Gardner=s letter confirming the terms of the agreement does not address the statute of limitations. Accordingly, we conclude there is legally sufficient evidence to support the trial court=s implied conclusion that there was no agreement to toll the statute of limitations. See Am. Alloy, 777 S.W.2d at 177 (rejecting the claim that the statute of limitations was waived when the alleged agreement did not address the statute of limitations).

B. Oral Agreement to Extend the Due Date

Appellant also contends appellees orally acknowledged the debt and orally agreed to extend the due date in the January 2000 phone conversation. When a debt is past due, but not yet barred by the statute of limitations, a party may enter into an oral agreement extending time for payment. Fuqua v. Fuqua, 750 S.W.2d 238, 242 (Tex. App.CDallas 1988, writ denied); see also McNeill v. Simpson, 39 S.W.2d 835, 835B36 (Tex. Comm=n App. 1931, holding approved); Cadle Co. v. Butler, 951 S.W.2d 901, 910 (Tex. App.CCorpus Christi 1997, no writ); Voelker v. Hera, 616 S.W.2d 647, 648 (Tex. Civ. App.CTexarkana 1981, no writ); Maceo v. Doig, 558 S.W.2d 117, 119B20 (Tex. Civ. App.CAustin 1977, writ ref=d n.r.e.); cf. Tex. Civ. Prac. & Rem. Code Ann. ' 16.065 (Vernon 1997) (AAn 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.@).

A new promise to pay a previous debt not barred by the statute of limitations is treated as a new contract. Maceo, 558 S.W.2d at 119. The new contract must be supported by valid consideration. See id. Courts have found valid consideration on interest-bearing promissory notes when the extension is for a definite period during which the debtor binds himself not to make payments and the creditor forbears his right to bring suit. See Tsesmelis v. Sinton State Bank, 53 S.W.2d 461, 462B63 (Tex. Comm=n App. 1932, opinion adopted); McNeill, 39 S.W.2d at 835B36; Voelker, 616 S.W.2d at 647; Maceo, 558 S.W.2d at 119B20; Mizell Constr. Co. & Truck Line, Inc. v. Mack Trucks, Inc., 345 S.W.2d 835, 837B38 (Tex. Civ. App.CHouston 1961, no writ); Crispi v. Emmott, 337 S.W.2d 314, 318 (Tex. Civ. App.CHouston 1960, no writ). Under these circumstances, the creditor earns interest for a set period of time in return for giving up his right to demand immediate payment. McNeill, 39 S.W.2d at 835B36; Maceo, 558 S.W.2d at 119B20. Courts have found no consideration when no interest is due or when the debtor retains his right to make payments at any time before the extension period is expired. See Tsesmelis, 53 S.W.2d at 463; Mizell, 345 S.W.2d at 837B38; Crispi, 337 S.W.2d at 318. Such an extension amounts to a Amere forbearance or indulgence on the creditor=s part@ and does not result in the formation of a new contract. Tsesmelis, 53 S.W.2d at 463.

Gardner testified that Mr. Cummings agreed during their telephone conversation to pay $6,725 as a lump-sum payment in full satisfaction for the past-due rent as soon as he sold some property. Gardner further testified that Ahe [Mr. Cummings] was very vague as to when he was going to pay. He said, you know, maybe the spring or the summer, but definitely by the end of the year.@ Gardner agreed to waive all late fees. The telephone conversation took place in January 2000, before the statute of limitations expired. Appellees did not testify or offer any evidence disputing the oral agreement.

Gardner introduced into evidence a copy of a letter he sent to Mr. Cummings the next day confirming the oral agreement. The letter does not state that Mr. Cummings agreed to pay interest on the amount.[2] Gardner did not testify that Mr. Cummings agreed to pay interest.

Unlike most cases in which courts have found a valid oral extension of the due date, the underlying suit here is not based on an interest-bearing promissory note. See Tsesmelis, 53 S.W.2d at 462; McNeill, 39 S.W.2d at 835B36; Hoarel Sign Co. v. Dominion Equity Corp., 910 S.W.2d 140, 144 (Tex. App.CAmarillo 1995, writ denied); Voelker, 616 S.W.2d at 648; Maceo, 558 S.W.2d at 118; Crispi, 337 S.W.2d at 315B16. Moreover, there is no evidence that appellees agreed to pay interest on the past-due rent, and Gardner did not testify as to any benefit he would receive in return for extending the due date and waiving late fees. Further, appellees retained the right to make payments at any time before January 1, 2001. See Tsesmelis, 53 S.W.2d at 462B63 (holding evidence that a party retains the right to pay at any time within a certain time period Ais fatal to the claim of extension@); Mizell, 345 S.W.2d at 837B38 (finding no valid extension when the parties agreed no interest or attorney=s fees would be charged, and debtors could pay anytime before a specified date). Gardner has failed to prove that the telephone conversation amounted to more than Amere indulgence@ on his part. See Tsesmelis, 53 S.W.2d at 463. Accordingly, the evidence is legally sufficient to support the trial court=s implied conclusion that the parties did not have a valid oral contract to extend the due date.

C. Estoppel

Finally, Gardner argues appellees were estopped from asserting the statute of limitations. A party may be estopped from asserting a statute of limitations defense when he or his agent or representative makes representations inducing a plaintiff to delay filing the suit within the limitations period. Duncan, 912 S.W.2d at 859; see Villages of Greenbriar v. Torres, 874 S.W.2d 259, 264 (Tex. App.CHouston [1st Dist.] 1994, writ denied) (listing the five elements a party must prove to invoke estoppel in avoidance of the statute of limitations defense). However, Gardner did not plead estoppel, did not argue estoppel at trial, and did not request that the trial court make any findings concerning estoppel. Therefore, he has waived the issue of estoppel on appeal. See Tex. R. Civ. P. 279 (AUpon appeal all independent grounds of recovery or of defense not conclusively established by the evidence and no element of which is submitted or requested are waived@); Woods, 769 S.W.2d at 518 (noting that a matter in avoidance of the statute of limitations not affirmatively raised by the pleadings is waived).

Because appellees proved as a matter of law that the statute of limitations barred Gardner=s claim, and Gardner did not conclusively prove a matter in avoidance, we find the evidence legally sufficient to support the trial court=s take-nothing judgment. We overrule appellant=s second and third issues.

The judgment of the trial court is affirmed.

/s/ Charles W. Seymore

Justice

Judgment rendered and Memorandum Opinion filed August 22, 2006.

Panel consists of Justices Hudson, Fowler, and Seymore.

[1] We will refer to Mr. and Mrs. Cummings collectively as Aappellees@except where necessary to refer to them separately.

[2] The relevant portion of the letter provides as follows:

This letter confirms our conversation in which I informed you of the outstanding balances due for past rent and related costs and for the legal fees related to representing you and your spouse in the IRS tax collection case. Based on our conversation, you agreed to pay, and I stated I would accept, $6,725.00 to resolve all matters related to your rental obligations set forth in the Contract For Payment you signed on February 14, 1996 . . . It is my understanding that you will make this payment in full after you sell property that you own which will occur no later than the end of this year . . .