i i i i i i



### MEM ORA ND UM OP INION No
. 04 -0 8- 00 76 0- CV Geor g e KO E PP , Administrator of the Estate of Ursula Hoppe Koe pp, Dec ease d, Appellant

v . Hans Er ich KO E PP and Virg inia M. Koepp,

Appellee s Fr om the County

Court at L aw, Guada lupe County , Texas Trial Court No. 2007-PC-0178 Honora ble L inda Z . J ones, Judge Pre siding Opinion by : Steven C. Hilbig, Just ice Sitt ing: Catherine Stone, Chief Justice

Phy lis J . Speedlin, J ustice Steven C. Hilbig, Just ice Deliver ed and F iled: J une 24, 2009 AFF I RMED Th is i s a n a c c e l e r a t e d a

p p e a l f r o m a t r i a l c o u rt ’ s o r d e r g r a n t i n g a t e mp o r a r y i n j u n c t ion in favor of Ha ns Erich Ko ep p an d Virg inia M. Koepp (“ the Koepps” ), re straining a non-judicia l fore closure sa le of re al prope rty
. See T EX . C IV . P R AC . & R EM . C ODE ANN . § 51.014(a) (4) ( Ver non Supp. 2009). The trial c ourt g rante d injunctive re l i ef b ec au s e it found collec tion on the note and fo re c los ur e we re ba

rr e d b y the statut e of lim itatio ns . Ge or g e Ko e pp , a s a dmi nis tr a tor of the e state04

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- 2- of Ursula Hoppe Koe pp (“the administrator”) , perf ecte d this appeal, cl ai m i ng the trial cour t erre d in gr anting the injunction. We affirm. B ACKG ROUND On Marc h 20, 1976, the Koepps pur chase d rea l property from Ha ns Koepp’s pa

rents, Eric h and Ursula Koepp. They executed a $50,000 installment note sec ured by a dee d of trust in favor

of Hans Koe pp’s par ents. Neither the note nor the dee d of trust rec ite a spec ific maturity date. Rathe r, the note re cites an inter est rate of five pe rce nt, specifies howinterest ac crue s, and provides for pa y me nts a s f

oll ow s: [P ]rincipal a

nd interest shall be due and pay able in monthly installment s o f F our Hundre d and No/1 0 0 d o l l ars ( $400.00), or more , eac h, pay able on the 15 day of th e a c h a nd e ve ry c a le nd a r m on th, be g inn ingAp ri l 15 , 1 97 6, a nd c on tin uin g re g ula

rl y there afte r until the whole of said sum, with int ere st, has been duly paid, intere st being calc ulated on the unpa id principal to the date of ea ch installment paid and the pay ment cre dited first to the discharg e of the interest ac crue d and the ba lance to the reduc tion of the principal. The de ed of trust provide d for optional ac cele ration by the note holder

in the event of

a def ault. The Koepps made pa

y ments on the note in vary

ing a mounts from April 1976 until May 2005, wh e n U r s u la K o e p p , th e la s t- s u r v iv in g n o te h o ld e r , d ie d

. T h e p a rti e s k e p t a me ti c u lo u s ledg er of pay ments over the y ear s , showing how much of e ach pa y ment was a

pplied to principal and how much was a

pplied to acc rued inter est. As of the date of the la st pay ment made in May 2005, the ledg er indicated a pr incipal balanc e due of $41,826.36. Neither note holder had ever decla red the note in defa

ult, sought to ac cele rate the note, or instituted fore closure pr ocee dings unde r the dee d of trust. After Ursula Koepp passed awa y , her g randson Ge org e Koe pp was a ppointed administrator of her estate. The only asset of the estate, and the sole pur pose of the a dminist ration, wa s to collect04

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- 3- on the note. When the p ar t i es fa i led to rea ch an a g ree ment about how much wa s owed, the administrator, on beha lf of the e state, purpor ted to acc eler ate the maturity of the note a

nd beg an nonj u d i ci al fo re cl o s u re p ro ce ed i n gs . T h e K o ep p s fi l ed an ac t i o n fo r d ec l ar at o ry j u d gm en t s ee k i n g a decla ration that re cover

y on the note was barr ed by limit ations. They also asked for injunctive r elief to enjoin the non-judicial for eclosure sale sche duled by the administrator. The trial court g rante d the Koepps’ reque st for a te mporary restra ining or der a

nd, afte r a
s u b s eq u en t h ea ri n g, gra n t ed t h e re qu es t fo r a te mp o ra ry i n j u n ct i o n . T h e t ri al co urt p re p ar ed fi n d i n gs of fa c t and c on c lus ion s o f l a w. Th e c ourt fo un d ( 1) the fi na l pa

y me nt u nd e r t he te rm s o f t

he no te was due Dec ember

15, 1990, (2) the note holders n ever demande d the Koepps pe rfor m under the note, and ne ver instituted collection or f orec losure proc eeding s, and (3) the note wa s never rene wed
or e xten de d in

wr iti ng . B a se d on its fin din g s, the c ourt c on c lud e d (1) the ri g ht to co lle c t on the no te was ba rre d by limit ations as of Dec ember 15, 1994, which was four y ear s from the a ccr ual date of limit ations, (2) the K oepps’ voluntar y p aym en t s did not ex tend the ac crua l date or suspe nd the running of the statute of

limit ations beca

use an e x tension is only

effective if

included in a sig ned,

a c kn ow le dg e d w ri tte n a g re e me nt, a nd (3 ) t he Ko e pp s had no a de qu a te le g a l r e me dy , w ou ld l ike ly pr e va il o n th e me ri ts o n f ina l he a ri ng , a

nd wi tho ut t he inj un c tio n w ou ld l ike ly su ffer im min e nt, irrepa rable harm. The administrator per fec ted this appea l. A N A L Y SIS Issues The a dminist rator c ontends the trial court err ed in f inding the due date of

the final installment of the note w as De cembe r 15, 1 9 9 0 , an d in concluding the statute of limitations accr ued on De c e mbe r 1 5, 19 90 . T he a dmi nis tr a tor a rgue s th a t be c a us e the no te la c ks a

state d matur ity

date , it04

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- 4- is a mbi g uo us a s a

ma tte r o f l a w, a nd

the tr ia l c ourt

wa s r e qu ir e d to lo ok to e xtri ns ic e vid e nc e to deter mine the par

ties’ intent with reg ard to pa y ment of the note. He c laims the ext rinsic evidenc e shows there was n o i ntent for the note to mature in De cembe r 1990, and the Koepps be lieved pay ments would have to c ontinue until the note was paid in full. He a rg ues the statute of limi tations did no t a c c ru e un til the a dmi nis tr a tor a c tua lly de c lare d the no te in de fa ult a nd a c c e le ra

te d on be ha lf of the e state. Al te rn a tiv e ly , the a dmi nis tr a tor a rgue s that e ve n if the no te is no t a mbi g uo us , a ma tur ity da te cannot be rea d into it. He contends the c ourt sho u l d l o o k at t he cir cumstance s surrounding the
e xec uti on of the no te – it wa s bet

we e n fa mil y me mbe rs , c on ta ins no a bs olute a mou

nt f or mon thl y pa y me nts , sta te s no fixe d numb e r of pa y me nts – an d de te rm ine the no te did no t matu re by its e xpre ss terms and the sta tute of limitations did not beg in to run unt il the administrator a ctually acc eler ated in Jun e of 20 08 . H e a lso a rgue s th e no te is a de mand no te a nd lim itatio ns did no t be g in t o r un un til he made a dema

nd for pa y ment. Stan dard of Revie w The de cision to g rant or deny a temporary writ of injunction lies within the sound discretion of the trial c ourt, and the c ourt’s dec ision is s ubject to re versa l only for a cl ea r ab u s e of tha t discretion. Butnaru v. Ford Motor Co., 84 S.W. 3d 19 8, 20 4 (T e x. 20 02 ). Th e tr ia l c ourt a bu se s it s discretion whe n it mis applies the lawto the “estab l i s h ed fac ts or when the e vidence does not
rea sonably

support the conc lusion that the applicant has a probable right of rec overy .” Khaledi v. H.K. Global Tradi ng, Ltd., 126 S.W .3d 273, 280 (Tex. App.–San Antonio 2003, no pet.) (c iting State v. Sw. Bell Tel. Co., 526 S.W .2d 526, 528 (Tex.1975)).04

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- 5- Discussion We f ir st d e te rm ine wh e the r t

he no te is a

mbi g uo us be c a

us e it d oe s n ot s ta te a sp e c if ic ma tur ity date. The rule s of construc tion gove rning contra cts are applicable to notes. Edlund v. Bounds , 842 S.W .2d 719, 726 (Tex. App.–Dallas 1992, writ denied) . A contra ct is ambig uous only if it is subj ect to “two or more rea sonable interpre tations a fter a pply ing the pertinent rule s of construc tion.” In re D. W ilson Cons tr. Co. , 1 9 6 S
. W
. 3 d 7 7 4 , 7 8 1 (T ex . 2 0 0 6 ) ( qu o t i n g Columbia Gas Tr ansmission Corp. v. New Ulm Gas, Ltd. , 94 0 S.W. 2d 58 7, 58 9 (T e x. 19 96 ))

. Am biguit y do e s n ot e xist me re ly beca use the pa

rties as s er t sharply

conflicting interpre tations. W ils on Con str ., 196 S.W .3d at 781; Columbia Gas Tr ansmission , 9 40 S.W. 2d a t 58 9. Whe n a c on tr a c t is wo rd e d so that it ha s a c e rt a in and def inite leg al meaning , it is unambig uous. Transcontinental Gas Pipeline Corp. v. Texaco, I nc ., 35 S.W. 3d

65 8, 66 5 ( Te x. Ap p. –H oust on [ 1st D ist .] 20 00 , p e t. d e nie d) . O nly wh e n a c on tr a c t is

a mbi g uo us may

a c ourt c on sid er th e pa

rt ie s’ int e rp re ta tio ns a nd

“ a dmi t e xtra

ne ou s e vid e nc e to deter mine the true me aning of the in strument.” David J. Sac ks, P.C. v. Hade n , 266 S.W .3d 447, 4 5 0 -5 1 (T ex . 2 0 0 8 ) ( qu o t i n g Nat’l Union Fire I ns. Co. of Pittsburgh, Penn. v. CBI Indus., I nc ., 907 S.W .2d 517, 520 (Tex. 1995) (per curiam)). The note doe s not state a spec ific maturity date, but the a

bsence of a ma turity date does not rende r the note ambig uous. See Columbia Gas Transmission , 940 S.W .2d at 591-92 (holding failure to i nc lud e mor e e xpre ss l a ng ua g e do e s n ot creat e amb igu ity if the re is o nly

on e re a so na

ble interpre tation of document). Section 3.108 of the Texas Business and Commerc e Code provide s that

“ [a] pro mis e is ‘p a y a

ble a t a de fi nit e tim e ,’ if

it i s p a y a ble

. . . at a

tim e or tim e s r e a dil y

a sc e rt a ina

ble at t he time the promise . . . is issued.” T EX . B US . & C OM MERCE C ODE ANN . § 3
. 108(b) ( Vernon 2002)

. H e r e , th e n o te c o n ta in e d a ll o f th e in f o r mati o n n e c e s s a r

y to c a lc u late th e f

in a l i n s ta llment04

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1 ... Se ct i o n 1 6
. 0 3 5 m o d i f i es t he general rul e t hat a cl ai m accrues and t he st at ut e o f l i m i t at i o ns b egi ns t o run o n e a c h insta llm e n t wh e n it b e c o m e s d u e . H ol y Cros s Ch urc h , 44 S. W
. 3d a t 566.

- 6- date, i.e., the maturity

date: the total amount due on the note, the intere st rate, t h e method of
c a lc ulatin g int e re st, the min imu m mon thl y pa y me nt, a nd the date pa

y me nts we re to be g in. Withthi s information, the maturity

date could be determined t hroug h mathematica l calc ulation. Perfor ming the calculations, the t rial court found t he note matured on Dec ember 15, 1990. Thus, the note wa s

“ pa y a ble a t a de fi nit e tim e ,” be c a

us e pa y me nt w a s “ re a dil y

a sc e rt a ina

ble ” fr om t he ex pres s ter ms wi thi n it. B e c a

us e the no te is no t a mbi g uo us , the tr ia l c ourt c ou ld no t c on sider th e par tie s’ interpre tations or admit ext rane ous evidence i n an attempt to interpre t the note. See H aden , 266 S.W .3d at 450-51. Having deter

mined the contra ct was not ambiguous a nd contained a

maturit y d ate of De c e mbe r 1 5, 19 90 , we mus t no w d e te rm ine wh e the r t he tr ia l c ourt

e rr e d in c on c lud ingthe statut e
o f l i m i t a t i o n s a c c r

u e d o n t h a td a t e . T h e n o t e i s a n i n s t a l l m e n t n o t e s e c u r e d b y a l i e n o n r e a l p r o p e rt y. I n Te xas, a su it fo r fo re c los ur e of a re a l pro pe rt y lie n or sa le of re a l pro pe rt y un de r a pow e r o f s a le in a dee d of trust must be filed not later tha n four y ear s afte r t he cause of action ac crue s. T EX . C IV . P R AC . & R EM . C ODE ANN . § 16 .0 35 (a ), (b ) ( Ve rn on 20 02 ); Holy Cross Church of God in Chri st v. W olf , 44 S.W .3d 562, 567 (Tex. 2001). When the four- y ear limit ations period expires, the lien and power of sale to e nforc e the lien be come void. T EX . C IV . P R AC . & R EM . C ODE ANN . § 16.035(d). L imitations on a note pa

y able in ins tallments and secur ed by a lien on re al prope rty

beg ins to run on the ma tur ity

da te of the la st i ns ta llm e nt. 1 CA P ar tne rs v . S pe ar s , 2 74 S.W .3d 5 1 , 6 5 ( T e x. Ap p . – Ho u s t o n [ 1 4 t h Di s t
. ] 2 0 0 8 , p et
. d en i ed ) ( ci t i n g T EX . C IV . P R AC . & R EM . C ODE ANN . § 1 6. 03 5( e ); Holy Cross Church , 44 S.W .3d at 566). In this case, there fore , the statute of limitations04

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- 7- for c auses of

action base d on the note beg an to run on D ec em b er 1 5 , 1990, as the trial c ourt conclude d. Ci t i n g Holy Cross Church , t he ad mi ni st rat or co nt end s t he gener al rule do e s n ot a pp ly be c a us e the note had an o p t i o n al ac ce lera tion clause, whic h he exerc ised. We ag ree that if a note ha s an optional acc eler ation clause , a cau s e o f action on the note a ccr ues only when the holde r exercise s his option to acc eler ate. See id. Howeve r, this e x ception does not a pply once the maturity

date of the last installment ha s passed. CA Pa rtne rs , 2 7 4 S
. W
. 3 d at 6 5 (c i t i n g T EX . C IV . P R AC . & R EM . C ODE ANN . § 16.035(e) ). Assuming the ac cele ration cla use in the Koe pp note was a n optional

a c c e le ratio n c la

us e su bje c t to the e xce pti on , it

wo uld no t a pp ly in t his c a se be c a

us e the ma tur ity

da te of the last installment passed be fore t h e ad minist rator a cce lera ted the note. The supreme c ourt’s decision in Holy Cross Church does not requir e a differ ent outcome. I n that case , the note holder
acc eler ated the note befor e the f inal instal l ment pay

ment was due . 44 S.W .3d at 567, 570. The question befor e the c ourt was whether the note holder was re quired to take aff irmative steps towar ds fore closure to e stablish acce lera tion, and held it did not. Id . at 564. The administ rator also contends the Koepps’ a ctions in continuing to make pay ments on the note af ter the ma turity

date suspende d the running of limitations. W e disag ree . Section 16.036 of the Civil P rac tice and Remedies Code provides the four y ear limit ations period ca n be suspende d by

a “ wr itt e n e xten sio n a g re e me nt” tha t is sig ne d, a c kn ow le dg e d, a nd fi le d f or r ecor d in the c ounty cler k’s offi ce o f t h e co u nty

wher e the pr operty

is located. T EX . C IV . P R AC . & R EM . C ODE ANN . § 16.036(a) , (b). Additionally , section 16.065 provides that eviden ce of an ac knowledg ment of a claim that appe ars ba

rre d by limit ations is not admissi bl e t o d ef eat lim itations unless the acknow ledg ment is in writing and si g ned by the party soug ht to be char g ed. Id . § 16.065 (Ve rnon04

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- 8- 20 08 ). Th e re i s no wri tt en e xten sio n a g re e me nt b e tw e e n th e Ko e pp s and the no te ho lde rs , n or

is there any written ac knowledg ment by them. Acc ordi n gly , the statute of limitations was not suspended by

the Koepps’ decision to continue to pay on the note af

ter it matured. F ina lly , the a dmi nis tr a tor

c on te nd s th e no te is a

de mand no te – a no te wi th n o f

ixed ma tur ity date – that d i d not mature until he made a dema nd for pa y ment, at which time the statute of lim itatio ns be g a n to ru

n. We d isa g re e . Se c tio n 3. 10 8 is e nti tle d “ Pay a ble on De mand or a t D e fi nit e Time.” T EX . B US . & C OM MERCE C ODE ANN . § 3.108. Subsection (a ) d es cr i bes notes pay able on demand a s notes sta t i ng they are pay able on de mand, at sig ht, or that fail to state a ny time for pay ment. Id . § 3.108(a) . Subsection (b) de scribes notes pay able at a definite time as those that ar e pa y a ble on e la ps e of a de fi nit e pe ri od

a ft e r sig ht or a c c e pta

nc e , pa y a ble on a fi xed date , o r p a y a ble on a date rea dily

asce rtainable at the time the note is g iven. Id . § 3. 10 8( b) . T he no te in t his c a se does not state it is due on date c erta in, but it ex pressly states t he $50,000 principal and intere st were due and pa

y able in monthly installments of $400.00 or m ore e ach, pa y able on the 15th da

y of ea ch
mon th, be g inn ingAp ri l 15 , 19 76 , a nd c on tin uin g re g ula

rl y the re a ft e r un til the pr inc ipa l and int e re st
we re pa id i n f

ull . G ive n th e inf

or ma tio n con taine d in

the no te , th e no te in t

his c a se wa s n ot a demand note, but r ather

a note pa y able at a def

inite time. See id. The a dminist rator c ites sever al case s in suppor t of his c ontention that the note was a demand note, but e ach is r eadily distinguishable. He pr incipally relies on Ma rti n v . F

or d , 853 S.W .2d 680 (Tex. App.–Texarkana

1993, writ denied) , Gill v. Commonwealth Nat’l Bank , 5 0 4 S. W. 2 d 5 2 1 ( T e x. Ci v . A p p . – D a ll a s 1 9 7 3 , w r it r e f ’ d n . r . e . ) , and Da v is v . D e nn is , 448 S.W .2d 495 (Tex. Civ. App.–Ty ler 1969, no writ). I n Ma rti n , the not e appare ntly contained only the t otal amount due and the date the note was executed. 853 S.W.2d at 681. The court he ld the date of pay ment was04

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- 9- completely missing from the note and allowed extrinsi c evidenc e to supply the missing term. Id . at 68 2- 83 . T he c ourt

a lso he ld t

he c re dit or ’s te sti mony

that th e no te wa s p a y a

ble “ wh e n I wo uld

a sk for it” supporte d the trial cour t’s finding that it was a de mand note. Id . I n Gi ll and Da v is , the notes stated the number of pay

ments and the amount of each inst allment pay ment, but did not contain a maturity date or fix the date that the first or a ny other installment was due

. Gi ll , 504 S.W .2d at 522; Da v is , 448 S.W .2d at 496. I n eac h case , the court held t hat because no tim e for pay ment was stated, the note wa s pay able on de mand. Gi ll , 5 04 S.W. 2d a t 52 3; Da v is , 448 S.W .2d at 498. C ONCL US I ON We hold the trial court did not err in finding the note conta ined a de finite maturity date a nd that the date of

maturity was Dece mber 15, 1990. Nor did the c ourt err in concluding the statute of limit ations barr ed the a dminist rator’ s action, it havin g b ee n b roug ht more than four y ear s after De c e mbe r 1 5, 19 90 , a

nd th ere bei ng no thi ng to l e g a lly su sp e nd the ru nn ingof lim itatio ns . Acc ording ly , we ove rrule the administrator’s issues and a ffi rm t h e trial court’s orde r issuing the temporar y injunction. Steven C. Hilbig, Just ice