Rea v. Sunbelt Sav., FSB, Dallas, Tex.

• Decision Date: 16 December 1991
• Docket Number: No. 05-91-00098-CV,05-91-00098-CV
• Citation: 822 S.W.2d 370
• Parties: Edward P. REA, Appellant, v. SUNBELT SAVINGS, FSB, DALLAS, Texas, Appellee.
• Court: Texas Court of Appeals

Page 370

822 S.W.2d 370

Edward P. REA, Appellant, v. SUNBELT SAVINGS, FSB, DALLAS, Texas, Appellee.

No. 05-91-00098-CV.

Court of Appeals of Texas Dallas.

Dec. 16, 1991.

Richard Jackson, Tresi Moore Freemyer, Dallas, for appellant.

Jack N. Ross II, Dallas, for appellee.

Before BAKER, THOMAS and WHITTINGTON, JJ.

OPINION

THOMAS, Justice.

Edward P. Rea appeals from a summary judgment rendered in favor of Sunbelt Savings, FSB, Dallas, Texas, in its suit to recover the unpaid balance due on a promissory note. In six points of error, Rea contends generally that the trial court erred in rendering summary judgment against him because: (a) D'Oench ¹ does not bar proof of payment since Sunbelt's own records show payment; (b) he raised a material fact issue as to whether there was an amount due and owing on the note and whether the entire $2.1 million was funded; and (c) Sunbelt is not a holder in due course because the note is non-negotiable. The trial court's judgment is affirmed.

FACTUAL BACKGROUND

In June 1985, Rea executed a $2.1 million promissory note payable to Sunbelt Savings Association of Texas (Old Sunbelt) for the purchase of a Falcon 20 jet. The note matured on June 1, 1988, and all unpaid amounts became immediately due. Old Sunbelt demanded payment of the unpaid principal and interest on the note, but Rea failed to pay the outstanding balance.

On August 17, 1988, Old Sunbelt sued Rea to recover the unpaid principal and interest. Two days later, the Federal Home Loan Bank Board declared Old Sunbelt insolvent and appointed the Federal Savings and Loan Insurance Corporation (FSLIC) as its receiver. FSLIC and Sunbelt Savings, FSB, Dallas, Texas (New Sunbelt), entered an acquisition agreement pursuant to which New Sunbelt acquired the note signed by Rea. In May 1989, New Sunbelt substituted itself as plaintiff and filed an amended petition. Rea then filed his second amended answer and counterclaim, alleging various affirmative defenses and counterclaims. The trial court, after three motions for summary judgment by New Sunbelt, entered a final summary judgment on October 5, 1990, in favor of New Sunbelt on its claims under the note and on all of Rea's affirmative defenses and counterclaims. ²

PAYMENT DEFENSE

In the first four points, Rea contends generally that the trial court erred in granting New Sunbelt summary judgment on his payment defense. He asserts that D'Oench does not bar this defense because New Sunbelt's own records show that the note was paid in full and that he raised a genuine issue of material fact as to whether there was an amount due under the note. New Sunbelt maintains that it was entitled to summary judgment on Rea's payment defense because Rea failed to comply with rule 95 of the Texas Rules of Civil Procedure, which sets forth the requirements for asserting the affirmative defense of payment.

In reviewing a summary judgment record, this Court applies the following standards:

1. The movant for summary judgment has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law.

2. In deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the non-movant will be taken as true.

3. Every reasonable inference must be indulged in favor of the nonmovant and any doubts resolved in his favor.

Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985). The question on appeal is whether the summary judgment proof establishes as a matter of law that there is no genuine issue of fact as to one or more of the essential elements of the cause of action. Gibbs v. General Motors, Corp., 450 S.W.2d 827, 828 (Tex.1970).

To establish its entitlement to recover on the note as a matter of law, New Sunbelt was required to prove: (1) the note in question; (2) that Rea signed the note; (3) that it was the legal owner and holder of the note; and (4) that a certain balance was due on the note. Clark v. Dedina, 658 S.W.2d 293, 295 (Tex.App.--Houston [1st Dist.] 1983, writ dism'd). New Sunbelt attached to its motion for summary judgment the note signed by Rea. Rea did not deny execution of the note. New Sunbelt also presented evidence that it had acquired the note from the FSLIC, as receiver, pursuant to an acquisition agreement after Old Sunbelt was declared insolvent. Further, New Sunbelt attached the affidavit of David Shelley, New Sunbelt's assistant vice-president commercial loan officer, which states that, as of September 12, 1989, the outstanding principal balance of the note totalled $250,307.73; that accrued but unpaid interest as of September 12, 1989, totalled $93,747.53; and that interest continued to accrue at the rate of $78.86 per day. Thus, New Sunbelt was entitled to recover the unpaid balance of the note as a matter of law unless Rea offered proof on each element of at least one of his affirmative defenses. Although Rea asserted several affirmative defenses in the trial court, the first four points on appeal deal only with trial court's summary judgment on his payment defense.

Payment is an affirmative defense. Rule 95 of the Texas Rules of Civil Procedure provides:

When a defendant shall desire to prove payment, he shall file with his plea an account stating distinctly the nature of such payment, and the several items thereof; failing to do so, he shall not be allowed to prove the same, unless it be so plainly and particularly described in the plea as to...