HSM Wynngate 04, Ltd. v. Tex. Sotherby Homes, Inc.
Decision Date | 31 August 2016 |
Docket Number | NO. 02-15-00281-CV,02-15-00281-CV |
Parties | HSM WYNNGATE 04, LTD APPELLANT v. TEXAS SOTHERBY HOMES, INC., F/K/A SHADDOCK BUILDERS AND DEVELOPERS, INC. D/B/A SOTHERBY HOMES APPELLEE |
Court | Texas Court of Appeals |
FROM THE 367TH DISTRICT COURT OF DENTON COUNTY
Appellant HSM Wynngate 04, Ltd. (HSM) appeals from the trial court's final judgment granting summary judgment in favor of Appellee Texas Sotherby Homes, Inc., f/k/a Shaddock Builders and Developers, Inc. d/b/a Sotherby Homes (Sotherby) on HSM's declaratory judgment claim and awarding Sotherby interpleaded funds held in the trial court's registry. We affirm.
Background
In 2005, HSM and Sotherby2 entered into a contract for the development and purchase of sixty-one single family lots in the WynnGate Subdivision in Frisco, Texas. Pursuant to the contract, Sotherby deposited $140,000 in earnest money with American Title Company. The contract provided that after Sotherby purchased thirty lots, the earnest money deposit would be reduced to $70,000, which was to "remain on deposit under the control of the title company and applied to the purchase of the last lot or lots to be purchased [under the contract]." The contract further provided that "[i]f this Contract is terminated prior to the Closing on all of the Lots, the Earnest Money Deposit then on deposit shall be delivered to Seller or returned to Purchaser by the Title Company as elsewhere provided herein."
The contract also set out each party's remedies in the event of the other party's default. In the event of Sotherby's default, the contract provided the following remedies to HSM:
Paragraph 9 of the contract provided that each party was entitled to written notice of any default and would have fifteen days from the receipt of the notice to cure the default prior to the exercise of any remedy provided in the contract.
Sotherby failed to purchase all sixty-one lots. On April 13, 2009, HSM sent a letter to Sotherby stating as follows:
HSM claims Sotherby did not cure its default, but HSM took no action to recover the earnest money deposit.
HSM sent Sotherby another letter on May 24, 2013, reiterating its demand for the earnest money and threatening litigation if Sotherby did not comply.
On December 13, 2013, HSM filed a declaratory judgment action against Sotherby and Capital Title, seeking a declaration as to the parties' rights, duties, and obligations under the contract and a judgment ordering Sotherby and Capital Title to release the earnest money and all accrued interest thereon to HSM. See Tex. Civ. Prac. & Rem. Code Ann. §§ 37.001-.11 (West 2015). Capital Title filed an interpleader petition and deposited the earnest money into the trial court's registry. The trial court signed an agreed order on the interpleader petition dismissing all claims against Capital Title.
In its answer, Sotherby pled that HSM's claims were barred by limitations and claimed that it was entitled to the interpleaded funds and attorney's fees. Sotherby then moved for summary judgment on its affirmative defense. After a hearing at which the trial court indicated that it was going to grant Sotherby's motion, Sotherby filed a motion for release of the interpleaded funds from the court registry and for attorney's fees. The trial court then signed an order granting Sotherby's motion for summary judgment. HSM moved for rehearing, and after a hearing, the trial court denied the motion for rehearing. The trial court entered a final judgment against HSM awarding the interpleaded funds and $17,290 in attorney's fees to Sotherby. HSM has appealed.
Limitations
In the first part of its sole issue, HSM contends the trial court erred by granting summary judgment based on the statute of limitations.
We review a summary judgment de novo. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). We consider the evidence presented in the light most favorable to the nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors could, and disregarding evidence contrary to the nonmovant unless reasonable jurors could not. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). We indulge every reasonable inference and resolve any doubts in the nonmovant's favor. 20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008). A defendant is entitled to summary judgment on an affirmative defense if the defendant conclusively proves all the elements of the affirmative defense. Frost Nat'l Bank v. Fernandez, 315 S.W.3d 494, 508-09 (Tex. 2010), cert. denied, 562 U.S. 1180 (2011); see Tex. R. Civ. P. 166a(b), (c). To accomplish this, the defendant-movant must present summary judgment evidence that conclusively establishes each element of the affirmative defense. See Chau v. Riddle, 254 S.W.3d 453, 455 (Tex. 2008).
In its motion, Sotherby asserted HSM's declaratory judgment claim was barred by the four-year statute of limitations. Both parties agree that a four-year limitations period applies to HSM's claims. Because a declaratory judgment action is a procedural device used to determine substantive rights, we must look to the legal remedy underlying the cause of action to determine the applicable limitations period. Nw. Austin Mun. Util. Dist. No. 1 v. City of Austin, 274 S.W.3d 820, 836 (Tex. App.—Austin 2008, pet. denied). Here, HSM is seeking the earnest money as liquidated damages for Sotherby's default pursuant to the terms of contract. An action for breach of contract is governed by a four-year statute of limitations. See Tex. Civ. Prac. & Rem. Code Ann. § 16.051 (West 2015); Smith v. Ferguson, 160 S.W.3d 115, 123 (Tex. App.—Dallas 2005, pet. denied). Thus, we agree with the parties that the four-year limitations period applies.
Limitations begin to run when a cause of action accrues, and the date of accrual is a question of law. Waxier v. Household Credit Servs., Inc., 106 S.W.3d 277, 279 (Tex. App.—Dallas 2003, no pet.). A cause of action under the declaratory judgments act does not accrue until there is an actual dispute or controversy between the parties. In re Estate of Denman, 362 S.W.3d 134, 144 (Tex. App.—San Antonio 2011, no pet.). Accordingly, Sotherby had to prove as a matter of law when the actual dispute or controversy on the issues raised in HSM's declaratory judgment claim arose and prove...
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