### T E X A S C O U R T O F A P P E A L S , T H I R D D I S T R I C T , A T A U S T I N

NO. 03-15-00713- CV

Brian DeRoec k, Melinda You ng, and Kat hryn Boyk in, as co-truste es of the Walter A. DeR oeck QTIP Trust, Assignee of T exas Capital Bank National Association, Appellan ts

v. DHM Ve ntures, LLC; Jam es W. Mor itz; and Nathan W. Halsey, App ellees

F ROM TH E DISTRI CT COURT O F TRAVIS CO UNTY, 126 TH JUDICI AL DISTRICT NO. D-1 -GN-1 4-0 0239 2, H ONO RAB LE AMY CLARK MEACH UM, J UDGE P RESIDING

M E M O R A N D U M O P I N I O N
The appellants (collec tively , the Trust) sued t o collect on a debt alleg edly owed by appellee DHM Venture s and gu ar an t eed by appellee s J ames W. Moritz and Nathan W. Halsey (collec tively , the Def

endants). The trial court signe d a final summary judgme nt d i s m i s s i n g the
Trust’s claims. I n five issues on appea l, the Trust contends that the t ri al court err ed in g ranting
summary judgme nt in the Def endants’ favor beca

use the Trust’s claims wer e n o t b arr ed by limit ations. We will affirm the trial c ourt’s summary judgme nt.

BACK GR OUND The Trust alleg ed the following fac ts i n i ts trial-cour t pleading s. DHM signe d a “Revolving Promissory Note” (the Note) in the maxi mum amount of $8,500,000. Moritz and Halsey signe d ag ree ments persona lly g uara nteeing pay

ment on the Note. The orig inal holder of the Noteassig ned the Note to the Tr ust. The maturity

date of the Note wa s October

17, 2009. DHM made
reg ular interest pay

ments on the Note from August 2011 until Dec ember 2013 and then made no further pay ments on the principal or

interest.
T h e Trust filed suit ag ainst the Def endants on J uly 18, 2014. The Trust’s ori gi n al petition alleg ed cause s of action for “suit on debt and brea ch of contra ct rela ting to the Note.” The petition a lso soug ht judicia l f orec losure of proper

ties used to se cure the Note. I n their answe r, the Def endants asser

ted the aff

irmative defe nse that t h e T ru s t’s claims wer e barr ed by the statute of limit ations. The Trust filed a motion for summary judgme nt arg uing that its claims wer e not timebarr ed because a si x -y ear statute of l imitations applied, not a four-y ear statute, and the Trust filed suit withi n six y ear s of the Note’ s maturation date. T he trial c ourt denied the Trust’s motion.

The Def endants then filed a combined traditional and no -e v i d ence motion for
summary judgme nt arg uing that a four- y ear statute o f l imitations applied and barr ed the Trust’s claims. I n response, the Trust amende d its petition to include allegations that the Defenda nts had continued making interest pay ments afte r the Note matured and had sent emails acknow ledg ing the debt and that these acknow ledg ments wer e sufficient to avoid the four- y ear statute of limit ations.
See Tex. Civ. Prac

. & Rem. Code § 16.065 (“A n acknow ledg ment of the justness of a claim that
appea rs to be barred by limit ations is not admissi ble in evidenc e to def eat the la w of limitations if made afte r the time that the claim is due u n l es s t h e acknowledg ment is in writing and is signe d by the party to be char g ed.”) ; Alsheikh v. Arabian Nat’l Shipping Corp. , No. 14-05 -00787-CV,
2006 WL 1675384, at *2 (Tex. App.—Houston [14t h Dist.] J une 20, 2006, no pet.) (mem. op.) (“[T]he statute of limit ations can be avoided if the party to be char g ed acknow ledg es the d ebt.”)

.

2The Def

endants, in their reply to the Trust’s response to their motion for summary judgme nt, arg ued that the Trust had pleaded ac k nowledg ment mere ly as a defe nse to the Def endants’ limit ations defe nse, not a s a new cause of ac tion as require d. The trial court g rante d final summary judgme nt for the D efe ndants and dismissed the Trust’s c laims with prejudice. This appe al followed. 1

DISCUSSIO N
Acknow ledgm ent of Debt

I n its first three issues, the Trust contends that the trial court err ed in g ranting
summary judgme nt in the Defenda nts’ favor on the groun d o f l i m i t ations beca use t he Defenda

nts acknow ledg ed their indebtedness less than four y ear s befor e the Trust filed suit. Although the Trust 2 vigor ously contende d in the trial court that a six -y ear statute of limit ations applied to its claims, on
appea l it does not dispute that a four- y ear statute of limit ations applied. Be cause i t i s undisputed that the Trust did n ot file suit until more than four y ear s from the date the Note matured, the trial

court did not err in g ranting summary judgme nt in DHM’s favor unless th e Def endants’ alleg ed acknow ledg ment of the de bt preve nts the Trust’s claims fr om being time-barr ed.

We revie w a trial court’s ruling on a motion for summary judgme nt de novo. Joe v. Two 1 Thirt y Nine Joint Venture , 145 S.W .3d 150, 156 (Tex. 2004). Traditional summary judgme nt is proper only if the movant establishes that ther e is no g enuine issue a s to a ny materia l f

act a nd that it is e n ti tl e d to ju d g me n t a s a ma tt e r o f la w . T e x. R. Ci v . P. 1 6 6 a ( c )

. N o - e v id e n c e s u mm a r y ju d g me n t is proper “unless the responde nt produce s summary judgme nt evidenc e raising a gen u ine i ssue of materia l fac t.” Id. R. 166a(i). Sp e c if ic a ll y , in it s f

ir s t is s u e , th e T r

u s t c o n te n d s th a

t it s c la im s w e r e n o t ti me - b a r r e d b e c a u s e 2 the “acknowledgme nt doctrine” allowed the Trust to avoid t he four-y ear statute of l imitations

. I n its second issue, the Trust contends that the Def endants’ acknow ledg ment of the debt simil arly revive d the Trust’s fore closure claims. I n its third issue, the Trust contends that the trial court err ed in g ranting summary judgme nt for Moritz and Halsey bec au s e t h ey g uara nteed the debt and the Trust’s cla ims on the debt were saved by the ac knowledg ment doctrine. 3When the four- y ear statute of limitations has run on an ac tion for debt, the or igina l

cause of action is tim e-ba rre d. See Siegel v. McG avock Drilling Co. , 530 S.W .2d 894, 896 (Tex. Civ. App.—Amar illo 1975, writ ref ’d n.r.e.) (“I f, as here , mor e t h an four y ear s have intervene d b e tw e e n th e ti me th e d e b t w a s d u e a n d th e d a te th e s u it w a s f

il e d , th e b a

r o f li mi ta ti o n is c o mp le te a

n d the cause of action on the orig inal debt is g one . . . .”). I f the debtor signs a written acknow ledg ment of the debt, a new promise to pay is cre ated and g ives rise to a new cause of action. See id. ; see also C a i n v. B onner , 194 S.W

. 1098, 1098 (Tex. 1917) (“Since the statute, when pleade d, makes a

rec overy u p o n t h e b arr ed debt impossibl e, relianc e upon the new promise to overc ome limit ation

nece ssarily makes o f it the cause of action. Otherw ise there is no cause of action that may be enfor ced.” ); Coles v. K

elsey , 2 Tex. 541, 548 (1847) (“B ut it is a new cause of ac tion, and not the reviva l of the old one; for , if not r eg arde d as a new cause of ac tion, the words of the statute w ould
preve nt it from enabling the party to rec over.” ); Canon v. Stanley , 100 S.W .2d 377, 378 (Tex. Civ. App.—El Paso 1936, no writ) (“The making of a new promise to pay a claim, either befor e or afte r the bar of the statute of

limit ations, cre ates a

cause of ac tion upon the new promise.” ).
Howeve r, the plaintiff must spec ifically and cle arly plead this new c ause of action. See H anley v . Oil Capit al Broad. Ass’n , 171 S.W .2d 864, 866 (Tex. 1943) (“A s to the sufficienc y of Hanley ’s petition, we rec og nize that his demand must be upon the new promise, that he must decla re upon it as his cause of action, in order to avoid responde nt’s plea of limit ation.”); Cain , 194 S.W

. at 1098 (“When in an action for debt a new promise i s re l i ed u p o n t o avoid a plea of limit ation, such promise, whether made befor e or afte r the bar is complete, constitutes the cause of action and must be decla

red upon for a rec overy .”); Siegel , 530 S.W .2d at 896 (“[T]o rec over on the

new promise to pay embra ced in the acknow ledg ment of the previous debt, the new promise to pay

4must be specific ally pleade d as the cause of action in order to avoid the pleade d bar of limit ation to

the orig inal debt.”) ; Canon , 100 S.W .2d at 378 (“While the orig inal cause of action should be set out as constituting the c onsideration for the new promise, t he sui t being upon the subsequent pr omise it should be alleged i n p l ain and emphatic terms .”) (empha sis added)

. I t is not sufficie nt for the plaintiff to alleg e written acknow ledg ment only as a way to avoid the sta t u t e o f l i m itations while pursuing a cause of action on the orig inal debt. See Siegel , 530 S.W .2d at 896 (“I n seeking to avoid the bar of limit ation, Siege l points to plaintiffs’ first supplemental petition pleading that McGa vock acknow ledg ed the a ccount in wr iting . . . . B ut here , Siege l has not pleade d a cause of action on a

new promise to pay arising from the alleg ed acknow ledg ment by the chec k; rec overy is only soug ht

on the orig inal acc ount which, as the rec ord establishes, is barr ed by limit ation as a matter of law.”)

.

Here, the Trust amende d its petition to include alleg ations that the Def en d an t s acknow ledg ed the debt in writin g af t er t h e Not e matured and within four y ear s of the date the
Trust filed suit. Howeve r, the Trust’s amende d petition raises these alleg ations only as a means of avoiding the Defenda

nts’ aff irmative defense of limit ations on the original debt, not as a new and independe nt cause of action rela ted to a newly cre ated debt. The Trust’s amende d petition does not mention acknow ledg ment under its cause s of action. Moreove r, the petition expli citly states that the Trust is pleading acknow ledg ment solely as a de fense to limi tations:

Acc ordin gl y , t o the exte nt nece ssary to avoid any limitati ons defense asserted by De fendants , Plaintiffs plead that DHM and Halsey and Moritz eac h acknow ledg ed the orig inal debt up until Dece mber 2013 on multiple occa sions.

*** For purposes of this a voidance pleading , the eff ect of these numerous acknow ledg ments is to cre ate a new promise t o p ay t h e old debt evidenc ed by the Note and the loan documents.

5(empha ses added)

. I n the petition’s pray er, the T ru s t as k s fo r the “unpaid principal balanc e and

acc rued interest and ot h er s u m s due to Plaintiffs under the terms of the Note and the L oan Documents,” never mentioning the alleg ed new promise. Moreo v er , we note that, althoug h the Def endants pointed out in their reply to the Trust’s response to their motion for summary judgme nt that the Trust had not relied on any alleg ed new debt as its cause of action, the Trust did not further amend its petition to clarify this point

. Be cause it is undisputed that the Trust’s or igina l cause of ac tion ag ainst DHM was time barr ed, and beca

use the Trust did not proper ly plead a new cause of action arising from a new promise to pa

y the old de bt in “ plain and empha tic terms,” we conclude that the trial cour t did not

err in g ranting s u m mary judgme nt in favor of DHM. See Siegel , 530 S.W .2d at 896 (conc luding 3
that plaintiff did not plead cause of action on new promise to pay and noting that prede cessor to Tex. Civ. Prac. & Rem. Code § 16.065 “is not a suspension statute and it does not opera te to preve nt the running of limit ation on the cause of action pleade d on the orig inal acc ount”); see also Eldridge v. Collard , 834 S.W .2d 87, 90 (Tex. App.—For t Worth 1992, no writ) (“We hold that by the lang uag e above a ppellees did not suffic iently plead any written acknow ledg ment as their cause of ac tion.”);
W hite v. Stewart , 19 S.W .2d 795, 798 (Tex. Civ. App.—Dallas 1929, writ ref ’d) (“U nder the above authorities, appellee Stewar t was re quired, if he relied upon the new promise, t o have alleg ed that promise in plain and emphatic terms , as the basis of his c ause of action; this he failed to do

. . . .”) (empha sis added). A ccor dingly , we ove rrule the Trust’s first thre e issues.

We also conclude that the Trust’s first three issues do not establish that the trial court err ed 3 in g ranting summary judgme nt in favor of Moritz and Halsey

. We will addre ss the Trust’s fourth issue reg arding the g uara

ntors below. 6The Guarantors
I n its fourth issue, the Trust contends tha t the trial court err ed in gr anting summary judgme nt for Moritz and Halsey beca use its cause of action ag ainst these g uara ntors did not acc rue until the Trust made demand for pay ment on May 12, 2014, within four y ear s of the time the Trust filed suit. The Def

endants respond that the Trust has waived this arg ument beca use it never raised it in the trial court. The Def endants also arg ue that the g uara nty ag ree ments that Moritz and Halsey si gn ed p ro v i d e that Moritz and Halsey wer e oblige d to make pay ment immediately when the
pay ment was due, reg ardle ss of when demand was made, and that the Trust’s later demand for
pay ment is theref

ore irr eleva

nt to the question of when the T rust’s ca use of a ction acc rued. 4 Assuming without deciding that the Trust did not waive its demand arg ument and 5
that the g uara

nty ag ree ments provide that pay ment was only due from the g uara ntors upon demand,

“Ge nera lly a cause of action acc rues when fact s co m e i n t o exis tence [t hat] authorize a 4 claimant to seek a judicial reme dy , when a wrong ful act cause s some leg al injury , or whene ver one person may su e an o t h er . ” American Star Energy & Minerals Corp. v. Stowers , 457 S.W .3d 427, 430 (Tex. 2015) (interna l quotation mar k s o m itted). “When a claim acc rues is a question of law revie wed de novo.” Berry v . Encore B ank , No. 01-14-00246- CV, 2015 WL 3485970, at *4 (Tex. App.—Houston [1st Dist.] J une 2, 2015, pet. de nied) (me m. op.) (citing Moreno v. Sterling D rug, Inc. , 787 S.W .2d 348, 351 (Tex. 1990)).

We note that the Def

endants, in the no-evide nce portion of their motion for summary 5 judgme nt, list the elements for rec overy on a g uara nty ag ree ment and contend that “Plaintiffs have failed to provide sufficie nt evidenc e to show the occur renc e of the co n dition on which liability is based as require d by element 3 above. Fur ther, Plaintiff has failed to provide sufficie nt evidenc e to show Guar antors’ failure or ref usal to perf

orm the promi se as require d by element 4 above.” The trial court’s order g ranting the Def endants’ motion for summary judgme nt does not s p ec i fy the g round on which the court g rante d summary judgme nt. On appea l, the Trust has not challeng ed the g uara ntors’ no-evide nce g rounds quoted above, an d we could there fore aff irm based on those g rounds alone. See Blizzard v. Selec t Portfolio Servic ing , No. 03-13-00716- CV, 2015 WL 5096710, at *4 (Tex. A

pp.—Austin A ug . 27, 2015, no pet.) (me m. op.) (“I f the appellant does not c halleng e eac h possible g round for summary judgme n t , we m u st uphold the summary judgme nt on the unchalleng ed g round.”) (c iting Adams v. First Nat’l Bank of Bells/Savoy , 154 S.W .3d 859, 875 (Tex. App.—Dallas 2005, no pe t.)). 7the Trust was still require d to make demand within a rea sonable t ime. See Steve ns v. State Farm

Fire & Cas. Co. , 929 S.W .2d 665, 671 (Tex. App.—Texarkana 1996, writ denied) (“Where demand is a condition prec edent to a suit, the injured party may not, by failing to make demand, postpone the running of the statute until he decide s to make a demand. Where demand is a prer equisite to a rig ht of action, the injured party must make the demand within a rea sonable time afte r it may lawfully be made.” ) (citations omitted); see also Ha r d i n v. L ella , No. 03-14-00607- CV, 2015 WL 6830598, at *2 (Tex. App.—Austin Nov. 4, 2015, n o p et

. ) (m em . o p .) (“[I ]f a demand is an int eg ral part of the ca use of a ction, or a c ondition prece dent to sue, the statute doe s not beg in to run until demand is made unless the demand is waived or is unreasonably delaye d .”) (empha sis added) ; W iman

v. Tomaszewicz , 877 S.W .2d 1, 5 (Tex. App.—Dallas 1994, no writ) (same)

. I n t h e absenc e of mitigating circ umstances, a time coincident wi th the running of the statute of limit ations will be deeme d rea son ab l e, an d if the demand is not made within that period the cause of action will be barr ed. Hardin , 2015 WL 6830598, at *2; Steve ns , 929 S.W .2d at 671.

Her e, it is undisputed that the Trust did not demand pay ment from Moritz and Halsey until May 12, 2014, more than f

our y ear s after

the Note matur ed. B eca

use the Tr ust did not m ake demand within the limit ations period, we conclude that it did not make demand within a rea sonable time. There fore , the trial court did not er r i n g ranting summary judgme nt in favor of Moritz and Halsey on the g round of limitations. According ly , we ove rrule the Trust’s four th issue. 6

The Trust’s appellate brief lists a fifth issue: “The Trial Court Erre d in Gra nting Summary 6 J udg ment for DHM, Mori t z, and Halsey and in Fa iling to Gra nt Summary J udg ment or Partial Summary J udg ment for the Trustees ( Applicable to All of the Prece ding I ssues).” T he Trust doe s not brief this issue or explain how it is i ndepende nt from its other issues. We ove rrule the Trust’s fifth issue. 8CONCLUSION We affir m the trial court’ s final summary judgme nt.

__________________________________________ Scott K. Field, Just ice
Be fore J ustices Pury ear , Goodwin, and F ield
Affir med Filed: Aug ust 9, 2016

9