### TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03 - 21 - 00266 - CV
Wells Fargo Bank, N.A. , Appellant

v. Express Limousines, Inc. n/k/a Groovy Automotive I, Inc.;

and Charles Delmonico , Appellee s

FROM THE 353RD DISTRICT COURT OF TRAVIS COUNTY NO. D - 1 - GN - 19 - 000248 , THE HONORABLE MARIA CANTÚ HEXSEL , JUDGE PRESIDING

M E M O R A N D U M O P I N I O N Wells Fargo Bank, N.A. (Wells Fargo), appeals from the district court ’ s order

re ndering summary judgment in favor of Express Limo usines, Inc. n/k /a Groovy Automotive I, Inc

. , (Groovy Aut omotive) and Charles Delmonico

. Well s Fargo asserts that the trial court erred by granting Groovy Autom otive and Delmonico ’ s mo tion for summary judgment on the ground that Wells Far go ’ s b r each of contract claim was barred by limitations. We will af firm.
BACKGROUN D This is a breach of contract case arising out of a Business Line Customer Agreement (the Customer Agreement) between Groovy Automotive a nd Wel ls Fargo. In March 2003, Gr oovy Automotive executed and sub mitted a Wells Fargo Loan Ap plication for Business L oans, Lines of Credit or Credit Car d. Wells Fargo approved the applica tion an d opened the
account that same month. The account was gover ned by the Customer Agreement

. Th e2

Customer Agreement provides th at Groov y Auto motive would be in default if it ma de a late payment, if a payment was rejected for insufficient funds, or if Groovy Automotive breached the Customer Ag reement in any other way . The Custom er Agre ement prohibit ed Groovy Automotive from excee d ing the account ’ s credit limit, which was originally $35,000 but increased to $68,000 in 2006, and provided that exceeding the credit l imit constit uted a breach o r default.

In early 2008, G roovy Automotive failed to ma ke a payment due for January 2008. T hereafter, the acc ount was in near con tin u ous breach or default. In March 2009, for example, several of Groovy Automotiv e ’ s payments were returned for insufficient funds. That year several more payments were returned for in sufficient funds and Groovy A ut o motive also

ex ceeded the cre dit l imit

. During the p eriod from Jan uary 2008 through January 2015, the bal ance due ex ceeded $64,000 and on multiple occasions ex ce eded the $68,000 c redit l imit

. The
account was ultimately clos ed in October 2013. Groovy A ut o motive ’ s last charge to the account

was $143.95 in July 2012. Groovy Auto motive ’ s last payment on the account was in August 2014. The January 2015 statement indicated that Wells Fargo h ad charged off the account.

On Janu ary 14, 201 9, Wells F argo sue d G roovy Automotive and Delmonico , whom it alleged was Groovy Automotiv e ’ s guarantor , for breach of contract seeking to recover $69,543.6 4 in un paid credit card debt. Groovy Automotive file d general and verified denials and

as serted , as one of its affirma ti v e defenses, that Wells F argo ’ s breach of contract claim was barred by the statute of l imitations. See Tex. Civ. Prac. & R em . Code § 16.004 (a)(3) (per son must br ing suit on action for debt not later than four years af ter day cause of action acc rues); Do de ka , L. L.C. v. Campos , 377 S.W.3d 726, 730 (T ex. App.

— San Antonio 20 12, no pet.) (statute of l imitations on claim for debt based on brea ch of contract is four years after da y cause3

of action accrues) . Th e p arties file d cros s motions for summary judgment

. In their motion, Groovy Automotive and Delmon ico a sserted that Wells Far go ’ s breach o f contract claim was barred by the statute of l imitations. A f ter a hearing , the trial court signed a n orde r grant ing Groovy Automotive an d Delmon ic o ’ s motion and den yin g Wells Fa rgo ’ s. Wells Far go then perfected this app eal. O n appeal , W e lls Fargo as sert s that (1) the trial court erred in concluding that its breach of contract claim was bar red by l imitations and granting Groovy Aut omotive ’ s motion for summary jud gmen t , a nd (2) the trial court should have granted Wells Fargo ’ s motion for summary judgment as to both Delmonico and Groovy Automotive.
STAN DARD OF REVIEW We review the district court ’ s summary judgment de novo. Valence Operati ng Co. v. Dorsett , 164 S.W.3d 6 5 6, 661 (Tex. 2005) ; Provident Life & Accident Ins. v. Knott , 128 S.W.3d 211, 215 (Tex. 2003)

. S umma ry judgm ent is proper when the re are no disputed issues of material fact and the mo v ant is enti tled to judgment as a mat ter of law. Tex. R. C iv. P. 166 (a ) (c) ; Shell Oil Co. v. Khan , 138 S.W. 3d 288, 291 (Tex. 2004) . When, as here, both parties move for summary ju d gment on overlapping issues and the t rial court gran ts one motion and denies the other, we revie w the summary

- j udgment evidence prese nted by bo th sides , determine all questions presente d, an d render the judgment t hat the trial court should have rendered. Texas Work ers ’ Comp. Comm ’ n v. Patient Advocates of Tex. , 136 S.W.3d 643, 648 (Tex. 2004) ; FM Props. Operating Co. v. City of Austin , 22 S.W.3d 8 6 8, 872 (T ex. 2000) . When the trial court does not specify the ground for its ruling, summary judgment must b e affirme d if any of t he grounds on which judgment was sought are meritorious. State v. Nine Thousand Two Hund r ed Thir ty
- Five Dollar s & No C ent

s i n U.S. Cur rency , 390 S.W.3d 289, 2 92 (Tex. 2013)

.4

Questi on s regarding which limitations p rovision applies and when a claim acc rues are questions of law. See Williams v. Khalaf , 802 S.W.2d 651, 658 (Te x. 1990) (referring to ques tio n of which limitation s s tatute applies as question of law ) ; see also Exxon Corp. v. Emerald Oil & Gas Co., L.C. , 348 S.W.3d 194, 202 (Tex. 2011) ( “ Normally , when a cause o f action accrues is a question of law

. ” ).
DISCUSSION

Well s Far go ’ s claim was for brea ch of contrac t
. 1 The s t atute o f limitati ons on a claim for debt based on breach of contract is “ four years after the day the cause of action

accrues. ” Tex. Civ. Prac. & Rem. Code § 16.004(a )(3) ; Williams v. Unifund CCR Partners Assignee of Citibank , 264 S.W .3d 23 1, 23 4 (Tex. App.

— Houst on [1st Dist.] 2008, no pet.) . In Williams , the credit card debtor, Williams, stopped making p ayment s and Citibank c losed his
account on January 12, 2001. 264 S.W.3d at 232

- 33

. Willi ams continued to make payments

a fter the date the acco unt wa s cl osed, and his final p ayment was made on October 15, 2001. Id. The court concluded that th e ca use of action for breach of contract accrued on t he date of the last pay ment. Id. ; see also Dode ka , 377 S .W.3d at 730 ( date of las t pay ment on cred it c ard ac count constitutes accrual dat e for purposes of statut e of limitations in claim for breach of c ontract based on credit card debt ) ; Matkin v. American Express Centu ri on Bank , No. 05

- 17

- 01438

- CV, 2018 WL 5816744, at *2 (T ex. App.

— Dallas Nov. 7, 2018 , no pet.) (mem. op.) ( “ A claim for

1 Wells Fargo did not bring this action as a n open account i n any o f the pl eadings to the trial court

. C

f. LTD Acquis itions , LLC v. Cook , No. 04

- 10

- 00296

- CV, 2011 WL 61634, at *2 (T ex. App.

— San Antonio Jan . 5, 2011, no pet .) ( mem. op.) (determin ing that although LTD did not or ig inally plea d claim as open account, it did so in it s motion to reconsider filed w ith trial court, thus allowing a ppel late review on open account claim). Thus, legal principles governing the accru al of a n action on an open account and the associated limitations period are not implicated in t his app eal.5

breach of contract based on credit card debt accrues on the date the last payment on the account is made. ” ). Here, it is undisputed tha t Groo vy Automotive made its last payment o n the account in August 2014. Thus, Well s F a rgo ’ s suit, filed in Ja n uary 2019, w as not brought within the four

- year limitations period se t forth in Texas Civil P ractice and Remedies Code section 16.004(a)(3)

. See Tex. Civ. Prac. & Rem. Code § 16.00 4(a)(3)

.

Nevertheless, rel ying on Holy Cross Ch urch of God in Ch rist v. Wolf , 44 S.W.3d 562, 566 (Tex. 2001) , Wells Fargo argues that its cause of action for breach of contract did not accrue until Marc h 2015 when it sent a letter to Groovy Automotive and to Delmonico purpo rting t o exerci se its optio n to accel erate pay ment of the credit card account. Wells Fargo ’ s reli ance on Ho ly Cross C hurch is misplaced. In Holy Cross Church , the court considered whether limitations barred a breach of contract claim brought by the maker of a pr omissory note that inc luded an optiona l acceleration clause a nd was se cured by a deed of
trust
. See id. a t 564 . The precise question before the court was whe ther the note holder was required to take af

firmative steps t owards fore cl osure , in addition to se rving the debtor wi th noti ce o f accele ration, to effectively acc elerat e a note secured by real proper ty and thereby tri gger limita tions. Id. The court began its analysis by obs erving t hat Texas Civil Practice and Remedi e s Code section 16.035 pro vides tha t if a series of no tes or obli gations or a note or obligation payable in in stallments is secured by a lien on real property, limitations does not begin to run until the maturity date of the last note, obligation , or installment. Id. at 566 (citing T ex. Ci v. Prac. & Rem. Cod e § 16.035 ) . The c ourt noted that this statu t e modi fies the general rule that a claim accr ues , and limitations begins to run on each in stall ment when it becomes due

. The court next observed t hat when a note or deed of trus t secured by r eal property conta ins

an optio nal acce leration clause, the debtor ’ s de fau lt do es not “ ipso facto start limitations running6

on the note. Rather, the action accrues only when the holder actu ally exercises its option to accelerate. ” Id. Thus, unless the no teholder actu ally exer cise s th e option to accel erate the note, limita t ions does not begin to run until the maturity date of the last note, obligatio n , or installm ent. Id

. ; see also Arshad v. American Express Bank, FSB , 580 S.W.3d 798, 807 ( Tex. App.

— Houston [14th Dist.] 20 19, no pet. ) ( “ Accel erated maturity is associated wi th note s that are initially contemplate d to extend over a period of months or years, such as those used with installment notes. ” ). The court ultimately held that an optional acce leration cl ause can be ef fect ively e x ercised without the noteholder ’ s taking affirmative steps towards forecl osure , and that t he cl ear and unequiv ocal notice of intent to accelerate and notice of accel eration is enough to conclusively establish accelerati on. Holy Cross Church , 44 S.W .3d at 5 74

. And, in that
cont ext, the date of the acceleration of the note es tablished the date the cause of action accrued and , consequently, the date the limitations period began to run. See Moreno v. Sterling Drug, I n c. , 787 S .W.2d 348, 351 (Tex. 1990 ) ( limit ations period be gins t o run whe n cause of action accrues and da te of accrual is question of law).

In this case, as stated above, the cause of ac tion for breach of c ontract accrued on the date o f Groovy Automot ive ’s last payment, Au gust 2014 , and theref or e the limitations peri od bega n to run on that date , not on th e date tha t Wells F argo sent not ice o f acceleration

. See Mo re no , 787 S.W.2 d at 351

. The court ’s analysis in H o ly Cross Church is inapposite to this case b ecause in that case accel eratio n of the note triggered the ac cru al o f the no teholder ’ s cause of
act i on , which, in turn, commenced the l im ita tions period. Here, the breach of contract cla im accrued on the date of Groovy Automotive ’s last payment and did not requ ire that Wells Far g o prov ide n oti ce of acc eleration

. P ut diff ere ntly, in this breach of contr act ca se, exercise of an option to accelerate had no relationship to the date the cause of ac tion accrued and thus no7

bearing on when the limitati ons period commenced. See Arshad , 580 S. W. 3d at 807 ( “ Credit

card indebtednes s is not the type of debt to whi ch acceleration of maturity applies. ” ). Even in th e context of a note payable in install ments secured by a deed of trust , which was the type of instrument at issue in Hol y Cross , a cceler ation is not relevant on ce the note h as matured under its own terms
. If the note has matured, the limi tations period commences at that time, and the

cre ditor may not revi ve its rights to foreclose by purp orting to accelerate a note that has already
mature d. See Financi al F reedom Sen i or Fund ing Corp. v. Horrocks , 294 S.W.3 d 749, 754

- 56 (Tex. App.

— Houston [14th Dist.] 2009, no pet. ) (when reverse mortgage provid ed that entire debt was due on death o f borrower, note matured a n d limitations began to run when borrower died, and creditor ’s belated effort to provide notice and ac ce lerate debt had no effect on running of l imita tions period); CA Partners v. Spe ars , 274 S.W.3d 51, 64

- 67 (Tex. App.

— Houston [14th Dist.] 2008, pet. deni ed ) (when last installment was du e in Jan uary of 2000, limita tions beg an to run on that date , an d sub s equent actions of creditor in deman ding payment and purpo rting to accelerate debt had no e ffect on running of limita tions period an d could not revi ve cl aim). Similarly in this case , bec au se the c ause of action for br each of contract accrued

— and limi tatio ns began to ru n
— when Groovy Automotive made i ts last payment, even under the reasoning of Holy Cross Church , Wells Fargo ’s subsequent acceleration notice had no effect on the limit at ions pe riod and could not revi ve the brea ch of contract claim.
CONCL U S IO N The trial court properly c oncluded tha t Well s Fargo ’ s br each of contract claim was bar red by the four

- year statute of l imit ations in Texas Civil Prac tice and Remedies Code section 16.004 (a)(3)

. We theref ore affirm the t r ial court ’ s order granting Groo vy Autom otive8

and Delmon ico ’ s motion fo r summary judgm ent an d denying Wells Fargo ’ s motion for summary judgmen t.

__________________________________________ Chari L. Kelly , Justice Before Chief Justice Byrne, Justices Tri ana and Kelly A ffirmed Filed: August 3, 2022