In re Estate of Curtis

• Decision Date: 03 June 2015
• Docket Number: No. 06–14–00037–CV,06–14–00037–CV
• Citation: 465 S.W.3d 357
• Parties: In re the Estate of Jane R. Curtis, Deceased
• Court: Texas Court of Appeals

465 S.W.3d 357

In re the Estate of Jane R. Curtis, Deceased

No. 06–14–00037–CV

Court of Appeals of Texas, Texarkana.

Submitted: March 4, 2015

Decided: June 3, 2015

Sydney Young, The Law Offices of Sydney Young, Edward D. Ellis, Ellis & Tidwell, LLP, Paris, TX, for appellant.

J. Stephen Walker, The Moore Law Firm, LLP, Paris, TX, for appellee.

Before Morriss, C.J., Moseley and Burgess, JJ.

OPINION

Opinion by Justice Burgess

This breach of contract case stems from two promissory notes executed by Robert Jaeckle, individually and as President of Reunion Ranch, Inc. (Reunion Ranch)¹ payable to Jane R. Curtis. One note in the amount of $20,000.00 was executed on February 1, 1999. The parties were not sure when the second promissory note in the amount of $35,000.00 was executed. When Curtis died in June 2012, the notes remained unpaid, and her Estate sued to recover the debts. After a bench trial, the trial court found in favor of the Estate as to the $20,000.00 note, but found in favor of Jaeckle and Reunion Ranch as to the $35,000.00 note. The trial court entered judgment against Jaeckle and Reunion Ranch, jointly and severally, in the sum of $43,828.10, representing principal and interest owing on the $20,000.00 note. Jaeckle and Reunion Ranch² appeal, claiming the trial court's judgment should be reversed. The Estate cross-appeals, claiming the trial court erred in not entering judgment in its favor for recovery on the $35,000.00 note.

We affirm the trial court's judgment as to the $20,000.00 note, but reverse the judgment as to the $35,000 note and render judgment that the Estate recover on the $35,000.00 note. We remand to the trial court for a determination of the amount Jaeckle owes on the $35,000.00 note.

I. Factual and Procedural Background

At the time of her death in 2012, Curtis had known Jaeckle for approximately thirty-three years. Before Curtis and her husband divorced, Jaeckle and Mr. Curtis partnered in various business ventures. After the divorce, Jaeckle assisted Curtis with her business affairs from time to time. At one point, Jaeckle and Curtis shared a joint bank account, and Curtis periodically lent money to Jaeckle, including the two loans at issue in this case.

A. The $20,000.00 Loan

On February 1, 1999, Jaeckle executed a note payable to Curtis in the amount of $19,377.00.³ The $20,000.00 note provided for semi-annual payments of $867.28, which included interest, on the first day of each February and August, with the balance due in full on February 1, 2001. The Estate contends that Jaeckle never repaid this $20,000.00 note. Jaeckle asserts that this $20,000.00 debt was paid, although his testimony about how this note was paid was somewhat complicated, at best.

Apparently, in 1992, Curtis and Jaeckle bought property, jointly, on Saturn Street in Dallas (Saturn Property), and Jaeckle agreed to contribute $35,000.00 to the purchase funds. Although the record is not entirely clear, it appears that Curtis paid the entire purchase price at closing, and Jaeckle agreed to reimburse Curtis $35,000.00, which represented Jaeckle's share of the purchase price. Jaeckle claims that he made payments on this $35,000.00 debt to Curtis, eventually reducing it to $19,377.00 by February 1999, when he and Curtis subsequently sold the Saturn Property to Kenneth Kozlovsky.

It also appears that the Saturn Property was titled to both Curtis and Jaeckle, but no record existed of Jaeckle's debt to Curtis for his portion of the original purchase price. According to Jaeckle, the title company required him to make a promissory note to Curtis to memorialize that debt in writing before the sale to Kozlovsky was closed. It further appears that Jaeckle and Curtis entered into a seller financing arrangement with Kozlovsky to finance his purchase of the Saturn Property. Accordingly, for the next twenty months, Kozlovsky made payments to Jaeckle and Curtis. According to Jaeckle, Kozlovsky made a final payment on his purchase of the Saturn Property in the amount of $19,903.00 on October 2, 2000. However, Jaeckle testified that the check was made payable to Curtis only and that, as a result, it not only satisfied Kozlovsky's debt to Curtis and Jaeckle, it also satisfied Jaeckle's debt to Curtis that was memorialized by the February 1, 1999, $20,000.00 note.⁴ Thus, according to Jaeckle, the February 1, 1999, $20,000.00 note was paid off in 2000.⁵

B. The $35,000.00 Note⁶

Jaeckle denied owing the $35,000.00 note as well. He admitted that he had signed a $35,000.00 note in favor of Curtis in the past, but claimed that it had been repaid. In fact, Jaeckle executed two $35,000.00 notes in favor of Curtis in June 1993 and June 1994, respectively. Jaeckle testified that “this note”⁷ was repaid in the form of 4,000 shares of Gateway Bank stock, estimated to be worth $8.00 per share. Aldridge conceded that he was unable to locate a written memorialization of an unpaid $35,000.00 note among Curtis' records and indicated that he does not know the date of its origination. Check stubs from Reunion Ranch dated January 1999 through May 2001, though, indicate that Reunion Ranch made monthly interest payments to Curtis on this debt in varying amounts of $241.10, $233.33, and $217.84.

C. Evidence Pertaining to Both Notes

In April 2002, Curtis received a letter from Jaeckle's secretary, Nancy Steel Lewerenz. In this letter, Lewerenz stated the amounts owed on each note and attached two amortization schedules for the repayment of both notes. The amortization schedule for the $20,000.00 note stated that the Ranch owed two payments of $867.27 and identified the principal and interest payments due on the note through August 1, 2005. Although Jaeckle alleged that he owed nothing on a $20,000.00 note to Curtis, four Reunion Ranch check stubs were introduced into evidence reflecting semi-annual payment of principal and interest in the amount of $867.28 each for February 1999, February 2000, August 2000, and February 2001. These payments mirrored the payment obligations of the $19,277.00 note and were consistent with the Lewerenz amortization schedule, which indicated that semi-annual payments “of $867.28[,] which includes both principal and interest[,]” were due on February 1 and August 1. Jaeckle could not explain why he continued to make payments on this note after it was purportedly paid off in 2000.

The amortization schedule for the $35,000.00 note indicated that a principal balance of $35,000.00 remained outstanding. It further indicated that Jaeckle paid interest on this note through July 31, 2001. Finally, the schedule listed monthly interest payments due from August 31, 2001 through July 31, 2002, although it did not indicate what payments were due on the principal balance. Payments made by Reunion Ranch from January 1999 through May 2001 mirrored the amounts listed in this amortization schedule.

On May 23, 2011, Aldridge sent Jaeckle a letter with an amortization schedule attached for both the $20,000.00 note and the $35,000.00 note. On June 17, 2011, Curtis sent Jaeckle a letter stating that he owed her money and specifically referring to the spread sheets Aldridge sent. In response, Jaeckle sent Curtis a letter in July 2011 stating, among other things, that he would repay Curtis on the sale of Reunion Ranch. Jaeckle also had conversations with Aldridge about how he intended to pay the two notes. In these conversations, Jaeckle neither denied that he owed the the two notes nor claimed that he received any portion of the funds as a gift. Instead, he told Aldridge that he was still attempting to sell the ranch, that the debt to Curtis was the largest debt he owed, and that he hoped the ranch would sell so that he could “get that resolved.”

II. Points of Error on Appeal

Jaeckle and Reunion Ranch filed a joint brief on appeal claiming (1) that the Estate's claims were barred by the statute of limitations and, as a matter of law, were not revived by acknowledgment; (2) that the Estate failed to plead modification, breach of fiduciary duty, and estoppel, and that the trial court erred in considering these defensive theories; (3) that the evidence is legally insufficient to uphold the trial court's ruling that Jaeckle and Reunion Ranch owe the Estate any balance on the $20.000.00 note; and (4) that the trial court committed reversible error in admitting testimony and documents in violation of the “Dead Man's Rule.”

The Estate filed a cross-appeal claiming (1) that the $35,000.00 note was revived less than four years before filing suit and that the trial court erred in failing to reach that conclusion, (2) that Jaeckle and Reunion Ranch were estopped from relying on the statute of limitations to defeat the breach of contract claim on the $35,000.00 note and that the trial court erred in failing to reach that conclusion, and (3) that the $35,000.00 note was modified to be due and payable when Reunion Ranch was sold and that the trial court erred in failing to reach that conclusion. In addition to disputing these points of error, the Estate claims that because Reunion Ranch did not timely file a notice of appeal, it is not a proper party to this appeal.

Jaeckle and Reunion Ranch filed a joint reply brief to the Estate's brief on cross-appeal in which they contend (1) that the evidence is legally and factually insufficient to support a finding that the $35,000.00 note was revived by acknowledgement less than four years before suit was filed, (2) that the evidence was legally and factually insufficient to prove an enforceable modification of the $35,000.00 note, and (3) that they were not estopped from relying on the statute of limitations as a defense to the breach of contract claim on the $35,000.00 note.

III. Parties to this Appeal

We must initially decide whether Reunion Ranch is a proper party to this appeal. Jaeckle timely filed a notice of appeal on April 28, 2014. The original notice does not list Reunion Ranch as an appellant, but the signature line on the notice...