Aguilar v. Anderson

855 S.W.2d 799, 1993 WL 153741

• Court: Court of Appeals of Texas
• Decided: June 16, 1993
• Docket: 08-91-00369-CV
• Status: Published

Opinions

OPINION

LARSEN, Justice.

The trial court entered summary judgment in this usury case against plaintiffs Anthony C. Aguilar and Susan B. Aguilar, based upon running of the statute of limitations. Plaintiffs appeal rulings: (1) granting defendants’ summary judgment; (2) denying their motion for summary judgment; and (3) refusing to recuse the trial judge, who accepted a campaign contribution from one of plaintiffs’ attorneys. We affirm.

FACTS

Defendants Norris and Lois Anderson sold the Aguilars 39 acres of real estate in rural El Paso County in August 1979. The Aguilars have lived on and farmed the land since that time. The original contract of sale, prepared by plaintiff/appellant Tony Aguilar, an attorney, provided for payment of 9 percent simple interest per annum. The first payment was due January 2, 1983, and the final payment January 2, 2001. The Aguilars sued the Andersons on this contract on January 7, 1981. The parties eventually settled that case, and as part of the settlement prepared a second set of documents transferring the land. The new documents included a warranty deed with vendor’s lien, a deed of trust and a promissory note. The parties closed on the second transaction in late August 1982, but all documents were drafted for closing on July 29, 1982. The Aguilars signed the transfer documents and knew they were charged with knowledge of their contents. They made their first payment under the new note on January 2, 1983.

Nonetheless, the present controversy began because the Aguilars claim they did not receive a copy of the second promissory note until 1988, when they allegedly first discovered usury. In Tony Aguilar’s affidavit in support of his motion for summary judgment, he states:

By letter dated November 30, 1982, ..., I was told by Mr. Ronald N. Calhoun that my wife and I were obligated to pay interest in the amount of $5,212.28 for the January 2, 1983 payment; that interest was calculated from August 1, 1982 to January 2, 1983. I was also given a computer printout for a new amortization schedule which showed that my wife and I were to pay the sum of $15,013.03 on January 2, 1984, and each succeeding January 2nd for the years 1985 through 1999 and that the final payment would be in the sum of $14,636.36 on January 2, 2000.

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By letter dated January 29,1988,1 was furnished with a copy of the promissory note signed by my wife and I, dated July 29, 1982. I then wrote Mr. Ronald N. Calhoun concerning the discrepancy between the note and the deed of trust and the amortization schedule previously furnished to me. I had, before writing him, calculated the interest rate on the note and deed of trust, the interest being charged, the proper interest, and any usurious rates of interest being charged.

The Aguilars filed this suit on June 10, 1988, five and one-half years after their first interest payment to the Andersons.

Both sides filed multiple motions for summary judgment.¹ The trial court denied all of them on March 30, 1989. Both sides again filed motions for summary judgment, and on January 24, 1990, the trial court sent counsel for all parties a letter which read:

The Defendant’s motion for summary judgment is granted on the basis of limitations.

Later, the trial court entered a formal order granting defendants’ supplemental motion for summary judgment, second supplemental motion and third supplemental motion. This formal order does not specify the grounds upon which summary judgment was granted.

Before the trial court granted defendants’ summary judgment, the Aguilars filed their motion to recuse him. After hearing before the presiding judge, this motion was denied.

This appeal follows.

RECUSAL

In their Point of Error Five, the Aguilars claim that the presiding judge abused his discretion in refusing to order the- trial judge’s recusal. This claim is based upon the trial judge’s solicitation and acceptance of a campaign contribution from attorney Ron Calhoun and his law firm.²

In December 1989, the trial judge telephoned Mr. Calhoun and solicited campaign contributions from his law firm. Calhoun’s firm gave the campaign $300, $100 from each partner (the judge’s self-imposed limit on contributions). Shortly afterward, the judge heard defendants’ first amended motion for summary judgment and, after hearing, he warned the parties that they should settle their differences or he would do it for them. The parties did not settle the case, and the Aguilars filed their motion to recuse, urging that the campaign contributions created a situation where the judge’s impartiality could reasonably be questioned. The presiding judge held a hearing and refused to order a recusal. The trial judge later granted summary judgment for defendants.

The standard of review for denial of a motion to recuse is abuse of discretion. J-IV Investments v. David Lynn Machine, Inc., 784 S.W.2d 106, 107 (Tex.App.-Dallas 1990, no writ); Petitt v. Laware, 715 S.W.2d 688, 692 (Tex.App.-Houston [1st Dist.] 1986, writ ref’d n.r.e.). The test for abuse of discretion is whether the trial court acted without reference to any guid ing rules or principles. That the trial court decided an issue differently than would this reviewing Court does not necessarily demonstrate an abuse of discretion, nor does a mere error in judgment amount to such an abuse. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.1985); Loftin v. Martin, 776 S.W.2d 145, 146 (Tex.1989).

Texas law at the time of this decision required that:

Judges shall recuse themselves in proceedings in which their impartiality might reasonably be questioned.... Tex.R.Civ.P. 18b(2).

Texas courts have repeatedly rejected the notion that a judge’s acceptance of campaign contributions from lawyers creates bias necessitating recusal, or even an appearance of impropriety. J-IV Investments, 784 S.W.2d at 107; Rocha v. Ahmad, 662 S.W.2d 77, 78 (Tex.App.—San Antonio 1983, no writ); Texaco, Inc. v. Pennzoil, Co., 729 S.W.2d 768, 844-45 (Tex.App.-Houston [1st Dist.] 1987, writ ref’d n.r.e.), cert. dismissed, 485 U.S. 994, 108 S.Ct. 1305, 99 L.Ed.2d 686 (1988). In an oft-quoted passage, one court of appeals has observed:

It is not surprising that attorneys are the principal source of contributions in a judicial election. We judicially know that voter apathy is a continuing problem, especially in judicial races and particularly in contests for a seat on an appellate bench. A candidate for the bench who relies solely on contributions from non-lawyers must reconcile himself to staging a campaign on something less than a shoestring. If a judge cannot sit on a case in which a contributing, lawyer is involved as counsel, judges who have been elected would have to recuse themselves in perhaps a majority of the cases filed in their courts. Perhaps the next step would be to require a judge to re-cuse himself in any case in which one of the lawyers had refused to contribute or, worse still, had contributed to that judge’s opponent. Rocha, 662 S.W.2d at 78, quoted in J-IV Investments, 784 S.W.2d at 108 and Texaco, Inc., 729 S.W.2d at 843-44.

Thus, there is a sound basis in law for the presiding judge’s decision denying recusal, where the sole ground was that the judge solicited and accepted campaign contributions from a lawyer representing parties in his court. J-IV Investments, 784 S.W.2d at 108. Here, the contribution was small, the trial judge maintained a voluntary policy of accepting only very limited contributions from any single source and the contributing lawyer was not even lead attorney for defendants. We cannot say, under these circumstances, that the presiding judge acted without reference to guiding principles.

In reaching this decision, the Court does not lightly dismiss the ethical dilemma posed by our system where an elected judiciary seeks campaign contributions from lawyers,³ nor do we lightly dismiss the heated criticism this system has generated. Both dissent and concurrence make cogent and thought-provoking arguments on the problems inherent in this elective scheme. We simply hold that, under these facts, the presiding judge did not act outside the bounds of discretion in deciding the recusal motion. We overrule the Aguilars’ Point of Error Five.

STATUTE OF LIMITATIONS

The Aguilars’ Points of Error One, Three and Four address the trial court granting summary judgment for defendants based on running of the four-year statute of limitations. On November 30, 1982, Ron Calhoun, as attorney for the Andersons, sent Tony Aguilar a letter and amortization schedule as part of the settlement of the earlier lawsuit concerning the 39 acres. Calhoun’s letter explained that he had calculated interest from August 1, 1982 to January 2, 1983, at a rate of 9 percent per annum, or $33,846 per day. The letter affirmatively requests that the Aguilars review the payment schedule, saying:

Unless I hear from you to the contrary, I will assume that our calculations are accurate and that the amortization schedule is acceptable.

According to their settlement agreement, August 1, 1982 was the date the new contracts were to have been signed between the parties. The closing was not actually completed however, until later in August. The Aguilars made their first payment under the new promissory note on December 28, 1982. This lawsuit was filed June 10, 1988, five and one-half years after that first payment.

Texas law provides that an action for usury:

[Sjhall be brought in any court of this State having jurisdiction, thereof within four years from the date when the usurious charge was received or collected.... [Emphasis added]. Tex.Rev.Civ.Stat. Ann. art. 5069-1.06(3) (Vernon 1987).

The Andersons’ receipt of interest under the allegedly usurious contract triggered the limitations period, regardless of the amount of interest paid at that time. Cook v. Frazier, 765 S.W.2d 546 (Tex.App.-Fort Worth 1989, no writ). Thus, the four-year statute of limitations began to run on the Aguilars’ claim when they made the first payment under the promissory note, on December 28, 1982. It had clearly expired by the time they filed their lawsuit in 1988. The trial court correctly entered summary judgment for defendants on this ground. We overrule Points of Error One, Three and Four.

DISCOVERY RULE

In their Point of Error Two, the Aguilars argue that the discovery rule should have prevented the entry of summary judgment against them. Under the discovery rule, courts calculate the statute of limitations from the date plaintiff discovered or, in the exercise of reasonable diligence, should have discovered that plaintiff possessed a cause of action. Courts limit the rule to only those claims which are “inherently undiscoverable.” Johnson v. Abbey, 737 S.W.2d 68, 69 (Tex.App.-Houston [14th Dist.] 1987, no writ).

The Texas Supreme Court, in discussing the discovery rule, has stated:

Limitations statutes afford plaintiffs what the legislature deems a reasonable time to present their claims and protect defendants and the courts from having to deal with cases in which the search for truth may be seriously impaired by the loss of evidence, whether by death or disappearance of witnesses, fading memories, disappearance of documents, or otherwise. The purpose of a statute of limitations is to establish a point of repose and to terminate stale claims. Murray v. San Jacinto Agency, Inc., 800 S.W.2d 826, 828 (Tex.1990) [Citations omitted].

See also, Brown v. KPMG Peat Marwick, 856 S.W.2d 742 (Tex.App.-El Paso 1993, n.w.h.).

The Aguilars cite no authority, and we have found none, which would apply the discovery rule to usury claims. We decline to expand the discovery rule under the facts of this case. The Aguilars were given ample opportunity to review and recompute the amortization schedule prepared by attorney Calhoun before they completed settlement of the first lawsuit in 1982. They were just as capable of figuring a payment schedule for the principal amount, based upon 9 percent interest, as were defendants in this case. Indeed, they were specifically invited to do so by Calhoun in November 1982, more than a month before their first interest payment was due. This is not the sort of “inherently undiscovera-ble” situation where we feel that due process and public policy require the imposition of a discovery rule. We overrule Point of Error Two.⁴

PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT

As the statute of limitations had run on their claim of usury, the trial court did not err in overruling the Aguilars’ motion for summary judgment urging they had proven that defendants had charged usurious interest as a matter of law. We overrule Point of Error Six.

CONCLUSION

The trial court properly entered summary judgment in this case. The presiding judge did not abuse his discretion in overruling the Aguilars’ motion to recuse the trial judge. We affirm the trial court’s judgment that plaintiffs Aguilars take nothing in this cause.

1 . Not just motions for summary judgment, but exhibits and pleadings were repeatedly filed by both sides for no apparent reason. It appears every piece of paper filed below was included in the appellate record, as well. The record on appeal is seven volumes, approximately ten inches thick. The reading in open court of the original settlement agreement appears in the record 19 times, by this writer’s count. The deed of trust and promissory note at issue appear 22 times. Plaintiffs filed eleven amended petitions, all of them included in this record, although ten were superseded. A like number of answers and counterclaims by defendants appear in the record. To bring such a voluminous record before this Court was totally unnecessary.

2 . The Andersons’ attorney of record throughout this case has always been, and remains, Owen Ellington. Mr. Calhoun, who maintains offices in the same building with Mr. Ellington, appeared on his behalf once or twice during the course of litigation. There is no allegation that Mr. Ellington ever contributed to the trial judge's election campaign. Nevertheless, because Calhoun drafted the promissory note at issue, and because he did appear on behalf of the Andersons during this litigation, we will assume he was their attorney.

3 . That this conundrum has produced three separate opinions from a three-judge panel, who nevertheless all agree that the trial court reached the correct outcome on the merits of the case, indicates how serious the issue is and how difficult any solution.

4 . We note two additional theories supporting summary judgment here.

First, a simple mistake is one basis for this lawsuit. No one asserts that any payment was actually due for the year 2001. This was an error and all parties have acknowledged as much. The law is clear that there shall be no penalty for any usurious interest which results from an accidental and bona fide error. Tex. Rev.Civ.Stat.Ann. art. 5069-1.06(1).

Second, the promissory note on its face calls for interest calculated at the rate of 9 percent per annum, which is not usurious. The terms setting out the actual amount of each yearly payment are the source of the usury claim here. The note is therefore ambiguous as to the rate of interest charged. Where a transaction is ambiguous on the issue of usury, a saving clause contained within it mandates court interpretation so as to avoid violation of the usury laws.

Nevels v. Harris, 129 Tex. 190, 102 S.W.2d 1046, 1049-50 (1937). There is such a saving clause in the promissory note here (“[i]t is the intention of the parties hereto to conform strictly to the usury laws of the State of Texas ..."). Thus, the trial court was required to interpret the note such that the parties complied with the usury laws.

Summary judgment could equally well have been entered on these two theories, and they were both before the trial court when judgment was entered.