Brown v. Zimmerman

160 S.W.3d 695, 2005 Tex. App. LEXIS 2972, 2005 WL 906133
Court of Appeals of Texas·Decided April 20, 2005·No. 05-04-00285-CV·Published·Cited by 43 cases

Opinion

OPINION

Opinion by

Justice LANG-MIERS.

Medina Evelina Littlejohn Brown 1 is the ex-wife of Samuel Mort Zimmerman who is the founder and President of Inter-federal Capital, Inc. She appeals the judgment rendered by the trial court on the jury verdict awarding Interfederal recovery against her on its claims for unjust enrichment and equitable subrogation. Littlejohn also appeals the trial court’s *699 failure to award attorney’s fees for her successful declaratory judgment action against Zimmerman. We affirm.

Background

This case is before us for the second time. It essentially began as a divorce case. 2 Prior to their marriage, Zimmerman helped Littlejohn borrow the money to buy a house at 4223 High Summit in Dallas, Texas (the High Summit property). Littlejohn borrowed $88,000.00 from the predecessors of Flagstar Bank, FSB, signing a note (the First Note) for that amount secured by a deed of trust on the High Summit property. Zimmerman arranged a $55,194.66 loan for her from Interfederal for the down payment on the High Summit property. She signed a second note for that amount secured by a deed of trust on the High Summit property in Interfederal’s favor (the Second Note).

Less than a year later, Littlejohn expressed a desire to end the marriage and moved to Minnesota. In an effort to reconcile, Zimmerman agreed to have Inter-federal purchase the First Note, to refinance Littlejohn’s obligations under both the First Note and the Second Note, and to defer her repayment obligations so that Littlejohn would not have to make the monthly payments. On February 20,1997, Interfederal purchased the First Note from Flagstar Bank. Zimmerman and Litt-lejohn signed an agreement referred to as the High Summit Agreement 3 agreeing that they would repay Interfederal from proceeds of policies insuring the lives of Zimmerman and Littlejohn. But the reconciliation did not last and Zimmerman sued Littlejohn for divorce in July 1997. A final decree of divorce was entered September 29,1997.

As part of the property division, the divorce decree awarded the High Summit property to Littlejohn as her sole and separate property and declared null and void all agreements in the parties’ premarital agreement and any amendments or modifications, which included the High Summit Agreement. Zimmerman, on behalf of In-terfederal, forgave the $55,000 owed by Littlejohn to Interfederal under the Second Note, but the decree did not specifically address the $87,658.99 liability under the First Note.

After the divorce was final, Littlejohn attempted to sell the High Summit property and learned that Interfederal had placed a lien on the property. Littlejohn filed a declaratory judgment action against Zimmerman and Interfederal seeking to quiet title to the property. The trial court granted summary judgment declaring title to the High Summit property quieted in Littlejohn against Interfederal and dismissing Interfederal and Zimmerman’s counterclaims for subrogation, breach of contract, fraud, and unjust enrichment. Zimmerman and Interfederal appealed.

We affirmed the summary judgment in favor of Littlejohn against Zimmerman to *700 quiet title to the High Summit property but remanded the issue of attorney’s fees. We also affirmed the summary judgment in favor of Littlejohn dismissing Interfed-eral’s counterclaims for breach of contract and fraud. We reversed the summary judgment in favor of Littlejohn dismissing Interfederal’s counterclaims for unjust enrichment and equitable subrogation and remanded those issues to the trial court.

On remand, Littlejohn raised affirmative defenses of limitations and res judicata as a bar to Interfederal’s counterclaims. The parties tried these claims to a jury, which found in favor of Interfederal against Litt-lejohn. At the conclusion of the trial, Litt-lejohn moved for instructed verdict on the issue of limitations which the trial court denied. Littlejohn then filed a motion for judgment non obstante veredicto (nov) reurging her limitations and res judicata defenses and requesting attorney’s fees against Zimmerman in the declaratory judgment action. Without ruling on the motion for judgment nov, the trial court rendered judgment on the jury verdict for Interfederal and awarded Interfederal $229,042.22, plus attorney’s fees and costs. Littlejohn filed a motion for new trial, reurging her defenses of limitations and res judicata and her request for attorney’s fees against Zimmerman on her declaratory judgment claim. The trial court denied the motion.

Littlejohn raises three issues on appeal: (1) Interfederal’s' counterclaims of unjust enrichment and equitable subrogation are barred by the two-year statute of limitations, (2) Interfederal’s counterclaims are barred by the doctrine of res judicata, and (3) the trial court failed to award her attorney’s fees for her successful appeal of the declaratory judgment action against Zimmerman.

Limitations

In her first issue, Littlejohn, contends Interfederal’s equitable subrogation and unjust enrichment counterclaims are barred by limitations. Littlejohn moved for instructed verdict and a new trial raising this issue. The trial court denied both motions but did not state the specific limitations provision on which it relied.

The doctrine of equitable subro-gation allows a person, not acting voluntarily, who pays the debt owed by another to seek repayment of that debt by the person who in equity and good conscience should have paid it. Matagorda County v. Texas Ass’n of Counties County Gov’t Risk Mgmt. Pool, 975 S.W.2d 782, 785 (Tex.App.-Corpus Christi 1998), aff'd, 52 S.W.3d 128 (Tex.2000). There is no specific statute of limitations for subrogation actions. Instead, these actions generally are subject to the same statute which would apply had the action been brought by the subrogee. See Guillot v. Hix, 838 S.W.2d 230, 233 (Tex.1992) (two-year statute of limitations applied to personal injury and death claims in a workers’ compensation subrogation action); Lusk v. Parmer, 114 S.W.2d 677, 681 (Tex.Civ.App.-Amarillo 1938, writ dism’d) (right of subrogation not barred by the four-year statute of limitations because the suit involved real estate).

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Brown v. Zimmerman, 160 S.W.3d 695, 2005 Tex. App. LEXIS 2972, 2005 WL 906133 (Tex. Ct. App. 2005).

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