Khan v. GBAK Props., Inc.

• Decision Date: 29 March 2012
• Docket Number: No. 01–10–00238–CV.,01–10–00238–CV.
• Citation: 371 S.W.3d 347
• Parties: Khalid KHAN, Trustee, Appellant, v. GBAK PROPERTIES, INC., Parkway Crossing, LLC, Ray Lotfi, and Ellie Lotfi, Appellees.
• Court: Texas Court of Appeals

371 S.W.3d 347

Khalid KHAN, Trustee, Appellant,

v.GBAK PROPERTIES, INC., Parkway Crossing, LLC, Ray Lotfi, and Ellie Lotfi, Appellees.

No. 01–10–00238–CV.

Court of Appeals of Texas, Houston (1st Dist.).

March 29, 2012.

James A. Dunn, Dunn, Neal & Gerger, L.L.P., Houston, TX, for Appellant.

Ben A. Baring Jr., Paul J. McConnell, De Lange, Hudspeth, McConnell & Tibbets, L.L.P., Casey Jon Lambright, Lambright & Associates, Houston, TX, for Appellees.

Panel consists of Justices KEYES, HIGLEY, and YATES.^*

OPINION

LAURA CARTER HIGLEY, Justice.

Appellant, Khalid Khan, appeals the trial court's grants of summary judgment in favor of appellees, GBAK Properties, Inc., Parkway Crossing, LLC, Ray Lofti, and Ellie Lofti. In seven points of error, Khan argues the trial court erred in granting summary judgment because (1) there is a fact issue concerning whether Khan's foreclosure action is barred by the statute of limitations; (2) there is a fact issue concerning whether Khan's claims against the Loftis are barred by the statute of limitations; and (3) there is some evidence that the Loftis tortiously interfered with Khan's contract in their individual capacity.

We affirm, in part, and reverse and remand, in part.

Background

On April 23, 1996, GBAK purchased certain commercial property located on Crabb River Road in Richmond, Texas (the “Crabb River Property”). At the time, Ghulam Bombaywala was the president and director of GBAK. In order to purchase the property, GBAK executed a Note with Bank of Texas, known at the time as Citizen's National Bank of Texas. Under the terms of the Note, GBAK was to make monthly installment payments to Bank of Texas for a period of 10 years—that is, until April 23, 2006. The interest rate on the Note was 10.25% for the first three years with adjustments on each three-year anniversary. Upon default, Bank of Texas had the option to accelerate the Note, making the entire amount due immediately. The Note further provided that Bank of Texas could charge the maximum interest allowable by law upon acceleration. The Note was secured by a Deed of Trust, dated April 23, 1996, on the Crabb River Property and an Assignment of Rents for the property.

In August 2002, GBAK sought bankruptcy protection. While GBAK was in bankruptcy, Bank of Texas filed a motion for relief from the stay, seeking permission to foreclose on the property. Bank of Texas argued—and GBAK agreed—that the Note had been accelerated prior to the bankruptcy. The bankruptcy court subsequently entered an Agreed Order requiring GBAK to make monthly payments to Bank of Texas as adequate protection of its interest in the property during the pendency of the bankruptcy stay.

GBAK made the first of these payments under the Agreed Order to Bank of Texas in October 2002. The bankruptcy proceeding was dismissed with prejudice in January 2003. Subsequently, GBAK made four more payments to Bank of Texas through April 2003, and Bank of Texas accepted the payments. There is no evidence in the record that any other payments were made on the Note after these four payments.

Concerned that Bank of Texas might seek to accelerate the Note again, Bombaywala approached Khan about purchasing the Note, Deed of Trust, and Assignment of Rents from Bank of Texas. Khan expressed an interest.

On July 1, 2003, Khan paid Bank of Texas an unstated amount, and Bank of Texas assigned the Note, Deed of Trust, and Assignment of Rents to Khan. When it assigned the Note, Deed of Trust, and Assignment of Rents to Khan, Bank of Texas represented that the interest per diem on the Note was $61.73. This was consistent with the regular rate of interest that applied to the Note under its original terms.

Khan spoke multiple times with Bombaywala concerning the Note both before and after the assignment. Before Khan's purchase of the note and assignment of the note to Khan, Bombaywala told Khan he was looking for someone to purchase the note who would not seek to accelerate it, and Khan agreed that that was acceptable to him. After he acquired the Note, Khan orally “agreed to treat the Note according to the original terms of the Note.”

In November 2003, Ellie Lofti purchased the Crabb River Property and received a tax deed after a default judgment was entered against GBAK for failing to pay taxes to Alief Independent School District. In March 2004, GBAK and Khan filed suit seeking to set aside the default judgment and subsequent tax sale and were ultimately successful. In March 2005, Ellie Lofti paid GBAK and Khan the rents she had collected from the Crabb River Property tenants.

On January 20, 2006, Bank of Texas issued releases of the Deed of Trust and Assignment of Rents that it had already assigned to Khan. These documents were filed in the county property records.

On January 30, 2006, Peter Pratt, a court appointed receiver and special master in a court-ordered receivership of GBAK, conveyed the interest held by GBAK in the Crabb River Property to Parkway Crossing, a business entity created by the Loftis. On May 12, 2006, Parkway Crossing executed a deed of trust, note, and assignment of rents to Republic National Bank for the Crabb River Property. The documents were signed by Ray Lofti as president of Parkway Crossing. In this deed of trust, Ray Lofti represented that the lien was a valid first lien.

On January 17, 2009, Khan sent GBAK a demand for all amounts owing to him. On May 12, 2009, Khan sent GBAK a notice of foreclosure on the property.

In June 2009, Bank of Texas executed an affidavit stating that it had no authority in January 2006 to issue the releases and that they were invalid and ineffective because the relevant contracts had been previously conveyed to Khan. Therefore, no one could rely on them as releasing the Crabb River Property from the lien of the Deed of Trust and Assignment of Rents held by Khan.

This suit ensued. Ultimately, Khan sought a judicial foreclosure on the Crabb River Property, and GBAK and Parkway Crossing asserted that the foreclosure action was barred by the statute of limitations. GBAK and Parkway Crossing brought a traditional motion for summary judgment on this ground, arguing that Bank of Texas accelerated the Note prior to August 5, 2002, which started the running of limitations. Therefore, they argued, limitations ran on the note holder's ability to foreclose on the Note no later than August 5, 2006.

Khan responded that any prior acceleration of the Note was abandoned by the parties and that each note holder—Bank of Texas prior to July 1, 2003 and Khan after July 1, 2003—had agreed to reinstatement of the Note according to its original terms. The trial court granted GBAK and Parkway Crossing's motion for summary judgment, dismissing all claims against them.

Khan also brought a claim of tortious interference with existing contract against the Loftis in their individual capacity. The Loftis brought a traditional motion for summary judgment arguing that Khan's claims accrued no later than 2006 and were barred by the statute of limitations. Their motion also included a no-evidence motion for summary judgment, arguing that there was no evidence that the Loftis, in their individual capacity, tortiously interfered with Khan's existing contracts. The trial court granted the Loftis' motion for summary judgment, dismissing all claims against them.

Standard of Review

The summary-judgment movant must conclusively establish its right to judgment as a matter of law. MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex.1986). Because summary judgment is a question of law, we review a trial court's summary judgment decision de novo. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex.2009).

To prevail on a “traditional” summary-judgment motion, asserted under Rule 166a(c), a movant must prove that there is no genuine issue regarding any material fact and that it is entitled to judgment as a matter of law. SeeTex.R. Civ. P. 166a(c); Little v. Tex. Dep't of Criminal Justice, 148 S.W.3d 374, 381 (Tex.2004). A matter is conclusively established if reasonable people could not differ as to the conclusion to be drawn from the evidence. See City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex.2005). A defendant moving for traditional summary judgment must either (1) disprove at least one element of the plaintiff's cause of action or (2) plead and conclusively establish each essential element of an affirmative defense to rebut the plaintiff's cause. Am. Tobacco Co., Inc. v. Grinnell, 951 S.W.2d 420, 425 (Tex.1997).

It is an affirmative defense to assert that a claim is barred by the statute of limitations. Tex.R. Civ. P. 94. Accordingly, the party moving for summary judgment based on the statute of limitations carries the burden of establishing as a matter of law that the limitations period had expired on the relevant claims. Burns v. Thomas, 786 S.W.2d 266, 267 (Tex.1990). This includes establishing when the causes of action accrued. Id.

After an adequate time for discovery, a party may move for no-evidence summary judgment on the ground that no evidence exists of one or more essential elements of a claim on which the adverse party bears the burden of proof at trial. Tex.R. Civ. P. 166a(i); Flameout Design & Fabrication, Inc. v. Pennzoil Caspian Corp., 994 S.W.2d 830, 834 (Tex.App.-Houston [1st Dist.] 1999, no pet.). The burden then shifts to the nonmovant to produce evidence raising a genuine issue of material fact on the elements specified in the motion. Tex.R. Civ. P. 166a(i); Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex.2006). The trial court must grant the motion unless the nonmovant presents more than a scintilla of evidence raising a fact issue on the challenged elements. Flameout Design, 994 S.W.2d at 834;see also Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex.1997) (holding “[m]ore than a scintilla of evidence exists when the evidence supporting the finding, as a whole, rises to a level that...