Lentino v. Cullen Center Bank and Trust, 14-94-00175-CV

Citation919 S.W.2d 743
Decision Date29 February 1996
Docket NumberNo. 14-94-00175-CV,14-94-00175-CV
PartiesMarta A. LENTINO, Eduardo P. Lentino, and Jorge A. Lentino, Appellants, v. CULLEN CENTER BANK AND TRUST, Appellee. (14th Dist.)
CourtCourt of Appeals of Texas

Scott Rothenberg, Bellaire, for appellants.

Richard T. Howell, Jr., Houston, Warren W. Harris, Houston, Jill M. Tillman, Houston, for appellee.

Before MURPHY, C.J., and ANDERSON and FOWLER, JJ.

OPINION

MURPHY, Chief Justice.

Appellants, Marta A. Lentino, Eduardo P. Lentino, M.D., and Jorge A. Lentino, M.D., appeal from a partial summary judgment and jury verdict in favor of appellee, Cullen Center Bank and Trust. Appellants bring six points of error, contending: (1) the trial court improperly granted appellee's motion for partial summary judgment; and (2) the trial court erred by overruling appellants' motion to modify, correct, or reform the judgment when there was insufficient evidence or no evidence to support the jury's verdict. Appellants also request that in the event this case is reversed and remanded, this Court reverse the awards of prejudgment and postjudgment interest, attorney's fees, costs of court, and several postjudgment orders by the trial court relating to the seizure of appellants' property. We reverse and remand for a trial on the merits.

In November 1982, Eduardo and Jorge Lentino individually executed separate promissory notes for $150,000 to appellee in order to finance their bank stock purchases. Both notes were renewed in November 1983. On December 14, 1984, Eduardo and Jorge Lentino and four other parties, jointly and severally, executed a new promissory note to appellee in the original amount of $2,252,250. Also on that day, Eduardo and Jorge Lentino executed guarantee agreements in favor of Cullen that unconditionally guaranteed payment of the $2,252,250 note. Appellee advanced no additional funds to appellants as consideration for increasing their obligation.

In February 1986, appellee filed individual suits against Jorge and Eduardo Lentino for default on the December 1984 note, which matured on November 30, 1985. In March 1987, both Eduardo and Jorge Lentino entered into separate compromise settlement agreements with appellee. According to the terms of these agreements, Eduardo and Jorge agreed to execute new promissory notes to pay appellee $148,842 and $171,186.29, respectively. The compromise settlement agreements further provided that: (1) appellee would pay Eduardo and Jorge each $10 and release them of their joint and several liability under the 1984 note and guaranty agreements; (2) if Eduardo or Jorge defaulted on their notes, the defaulting party could be liable for the outstanding balance on the original 1984 note; and (3) Eduardo and Jorge waived all affirmative defenses and causes of action relating to the loan documents in the underlying lawsuit.

Both Eduardo and Jorge subsequently defaulted on their 1987 notes, and in 1990, appellee filed separate lawsuits to collect on these notes. The trial court entered final judgments in favor of appellee and awarded actual damages, prejudgment interest, attorneys fees, costs of court, and postjudgment interest. During postjudgment discovery, however, appellee allegedly discovered fraudulent transfers by Jorge, Eduardo and Marta Lentino made during the time the compromise settlement agreements were executed. Appellee subsequently filed this suit, claiming fraud, fraudulent transfers, breach of contract, conspiracy, negligence, and negligent misrepresentation. The appellants responded with a general denial and asserted several affirmative defenses, including usury. The appellants also filed counterclaims alleging usury, slander of title, unreasonable collection efforts, and intentional infliction of emotional distress.

In June 1993, Cullen filed a motion for partial summary judgment, requesting the trial court to hold that the compromise settlement agreements barred appellants' "affirmative causes of action" which relate to the underlying loan documents. Following the appellants' response, appellee filed its reply, clarifying that the compromise settlement agreement barred all of the Lentinos' claims and affirmative defenses. See Stiles v. Resolution Trust Corp., 867 S.W.2d 24, 26 (Tex.1993) (indicating that specific grounds for summary judgment may be stated in movant's reply in order to comply with rule of civil procedure 166a(c)). The trial court subsequently granted appellee's motion and held the compromise settlement agreements barred all of appellants' causes of action and affirmative defenses.

The parties proceeded to trial and at the close of evidence, the trial court directed a verdict in favor of appellee as to its claims for breach of the compromise settlement agreements. The trial court also rendered judgment on the jury's verdict, which addressed other issues, and awarded $1,817,525.42 in actual damages and $2,500,000 in exemplary damages against each Jorge and Eduardo Lentino, along with attorneys' fees, prejudgment interest, postjudgment interest and costs of court.

In their first point of error, appellants contend the trial court improperly granted appellee's motion for partial summary judgment, in part, because a fact issue exists as to whether the 1984 note was usurious. Appellants argue that if the 1984 note was usurious, the compromise settlement agreements were void because they failed to purge the usury contained in the 1984 note. See Commerce Trust Co. v. Ramp, 135 Tex. 84, 138 S.W.2d 531, 534 (1940), overruled on other grounds, 561 S.W.2d 777 (Tex.1977); see also TEX.REV.CIV.STAT.ANN. art. 5069-1.02 (Vernon 1987) (stating that all usurious contracts are contrary to public policy); Ferguson v. Tanner Development Co., 541 S.W.2d 483, 493 (Tex.Civ.App.--Houston [1st Dist.] 1976), rev'd on other grounds, 561 S.W.2d 777 (Tex.1977) (stating that contracts which are contrary to public policy are void). Accordingly, appellants maintain that no summary judgment could be based on a void instrument.

The movant for summary judgment has the burden to show that no genuine issues of material fact exist and that it is entitled to judgment as a matter of law. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985). In deciding whether there is a disputed material fact issue precluding summary judgment, proof favorable to the non-movant must be taken as true. Id.; O'Bryant v. Century 21 S. Cent. States, 899 S.W.2d 270, 271 (Tex.App.--Houston [14th Dist.] 1995, no writ). Further, we indulge every reasonable inference in favor of the non-movant and resolve any doubts in his favor. O'Bryant, 899 S.W.2d at 271; Edwards v. Garcia-Gregory, 866 S.W.2d 780, 783 (Tex.App.--Houston [14th Dist.] 1993, writ denied). If the movant's motion and summary judgment proof facially establishes his right to judgment as a matter of law, then the burden shifts to the non-movant to raise fact issues precluding summary judgment. See City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex.1979). Moreover, if the non-movant relies on an affirmative defense to defeat summary judgment, he must present summary judgment proof sufficient to raise a fact issue as to each element of that defense. Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex.1984); see also Wilson v. General Motors Acceptance Corp., 897 S.W.2d 818, 823 (Tex.App.--Houston [1st Dist.] 1994, no writ).

The essential elements of a usurious transaction are: (1) a loan of money; (2) an absolute obligation to repay the principal; and (3) the exaction of a greater compensation than allowed by law for the use of the money by the borrower. First Bank v. Tony's Tortilla Factory, 877 S.W.2d 285, 287 (Tex.1994); Holley v. Watts, 629 S.W.2d 694, 696 (Tex.1982); Blasdell v. Catalina, 858 S.W.2d 653, 655 (Tex.App.--Houston [14th Dist.] 1993), rev'd on other grounds, 881 S.W.2d 295 (Tex.1994). In the present case, neither side disputes that appellee loaned Eduardo and Jorge Lentino only $150,000 each, with obligations to repay the entire amounts. Appellee, however, contends that appellants failed to present sufficient summary judgment proof demonstrating usurious interest.

In support of its argument, appellee relies heavily on Sorrells v. Giberson, 780 S.W.2d 936, 938 (Tex.App.--Austin 1989, writ denied), which stands for the proposition that a possessor of a promissory note who moves for summary judgment against the maker of the note must present certain proof to establish he is entitled to judgment as a matter of law. Specifically, the possessor of a note must either: (1) include the note in the summary judgment proof; or (2) establish the terms of the note by affidavit or other proper summary judgment proof. Id. Appellee now contends that appellants' proof was insufficient to support their usury defense because: (1) the 1982 and 1983 notes were absent from the summary judgment record; and (2) appellants' affidavits failed to state the relevant terms of the 1982 and 1...

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4 cases
  • Arce v. Burrow
    • United States
    • Court of Appeals of Texas
    • October 30, 1997
    ...evidence that raised an issue of fact on the elements of causation and damage. See Lentino v. Cullen Ctr. Bank and Trust, 919 S.W.2d 743, 745 (Tex.App.--Houston [14th Dist.] 1996, writ denied) (stating that if movant's motion and summary judgment proof facially establish right to judgment a......
  • Lentino v. Frost National Bank, No. 14-05-01179-CV (Tex. App. 8/2/2007)
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    • Court of Appeals of Texas
    • August 2, 2007
    ...2002 WL 220421 (Tex. App.CHouston [14th Dist.] Feb. 14, 2002, pet. denied) (not designated for publication) and Lentino et al. v. Cullen Center Bank and Trust, 919 S.W.2d 743 (Tex. App.CHouston [14th Dist.] 1996, writ den.) for a more detailed rendition of the facts underlying this ...
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