In the Court of Appeals Second Appellate District of Texas at Fort Worth ___________________________ No. 02-23-00085-CV ___________________________
DANNY K. PRINCE, Appellant
V.
ROBERT M. WELEBA, Appellee
On Appeal from the 342nd District Court Tarrant County, Texas Trial Court No. 342-332806-22
Before Bassel, Womack, and Wallach, JJ. Memorandum Opinion by Justice Womack MEMORANDUM OPINION
I. INTRODUCTION
In this case involving a suit on a debt, Appellant Danny K. Prince sued
Appellee Robert M. Weleba seeking money paid pursuant to a 2015 agreement.
Weleba answered and asserted the statute of limitations as one of his affirmative
defenses based on a 2017 agreement which failed to mention the money but included
an integration or merger clause.1 After both parties moved for summary judgment,
the trial court denied Prince’s motion and granted Weleba’s motion and supplemental
motion. Because we conclude that genuine issues of material fact exist regarding the
amount of money, if any, due Prince and when the statute of limitations accrued, we
will affirm the denial of Prince’s motion for summary judgment and reverse the
granting of Weleba’s motion and supplemental motion for summary judgment and
remand for further proceedings.
1 See Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 334 n.6 (Tex. 2011) (citing 7 Joseph M. Perillo, Corbin on Contracts § 28.21 (rev. ed. 2002) (describing merger clauses as “stating that the writing contains the entire contract and that no representations other than those contained in the writing have been made”); 11 Samuel Williston & Richard A. Lord, A Treatise on the Law of Contracts § 33.21 (4th ed. 1999) (“Recitations to the effect that a written contract is integrated, that all conditions, promises, or representations are contained in the writing . . . are commonly known as merger or integration clauses.”)).
2 II. BACKGROUND
A. The parties sign the Purchase Agreement; later they sign the Rescission Agreement (containing an integration or merger clause), but no mention is made of the purchase money.
In March 2015, Prince and Weleba signed an “LLC Membership Interest
Purchase Agreement” (the Purchase Agreement), wherein Weleba, as “sole member
and officer of Hospice Care Partners, LLC (Hospice Care)” agreed to sell to Prince
62% of his membership interests in Hospice Care for $431,675. Pursuant to the
Purchase Agreement, Prince paid Weleba $431,675.
In January 2017, Prince and Weleba signed a “Rescission of Prior Sale of
Limited Liability Company Membership Interest” (the Rescission Agreement),
wherein they agreed to rescind the sale of the “limited liability company membership
interest.” The Rescission Agreement made no mention of the purchase money’s
return, and it stated that “the Parties still desire[d] to enter into a binding sales
agreement.” In addition, the Rescission Agreement contained a paragraph—the
integration or merger clause—stating, “This agreement constitutes the entire
agreement of the Parties and shall supersede all prior agreements, written or oral,
between the parties regarding this subject matter.”
Prince later set out the reasons for the rescission of the Purchase Agreement in
an affidavit. According to Prince, Weleba advised him that by his becoming a
“significant member” of Hospice Care, Hospice Care was required to file certain
documents disclosing the acquisition, which could “adversely affect[] Hospice Care’s
3 license to bill Medicare and Medicaid.” Because Hospice Care was in the process of
filing for a new license—its license was set to expire in December 2016—and Prince’s
purchase could delay the licensing process, he and Weleba rescinded the Purchase
Agreement until Hospice Care’s new license was issued. Prince stated that “as a show
of good faith, I agreed that for the short term, [Weleba] could retain the $431,675.00 I
gave to him for the Membership Interests until the licensing was completed.”
B. Prince demands the return of the money.
Eventually, Prince became frustrated and demanded the return of his money on
June 24, 2020. Weleba responded to the demand in a July 10, 2020 email, stating that
he “agree[d] with [Prince to] . . . dissolve the partnership” and that he “share[d]
[Prince’s] desire to get this matter expeditiously and equitably resolved,” and he asked
Prince “to come up with a fair number that [they could] both live with and get
[Prince] paid back that which [he] may be due.” Later, in an August 26, 2020 email,
Weleba stated that he would not return the money and that Prince owed him either
$286,831.06 or $122,458.06, depending on whether a company in which Prince owned
an interest would release a claim against Hospice Care.
C. Prince files suit against Weleba; Weleba answers and files a counterclaim; both parties move for summary judgment; Prince amends his pleadings.
On March 31, 2022, Prince filed suit against Weleba, asserting claims for
breach of contract, quantum meruit, fraud, fraudulent inducement, negligent
misrepresentation, breach of fiduciary duty, money had and received, request for
4 accounting, foreclosure of constructive trust/equitable relief, declaratory judgment,
and attorneys’ fees and interest. Weleba answered, asserted affirmative defenses, and
filed a counterclaim. In the counterclaim, Weleba pleaded two causes of action:
indemnification and breach of contract, both arising from the Rescission Agreement.
Prince filed an answer to the counterclaim, raising numerous affirmative defenses and
asserting a “counterclaim to [Weleba’s] counterclaim.”
Both parties moved for summary judgment. Prince moved for traditional and
no-evidence summary judgment in what he stated was “strictly based on [his] claims
for breach of contract and money had and received”; however, later in the motion, he
moved for no-evidence summary judgment regarding Weleba’s claims for
indemnification. Weleba’s traditional motion for summary judgment relied only on
his affirmative defense of the statute of limitations. Both parties responded to the
respective summary judgments, and both filed replies to the responses.
On the same day that Prince filed his summary judgment response, he
amended his pleadings to add a claim for unjust enrichment and to allege the
discovery rule:
So, even though the Re[s]cission Agreement was executed on January 17, 2017, the purpose of the Re[s]cission Agreement was to allow [Weleba] to deal with the licensing issues Hospice Care was experiencing and [it] would have experienced more problems had [Prince] become majority owner of Hospice Care. Thus, the first instance in which [Prince] knew or had reason to know that he had a claim against [Weleba] was between June 24, 2020, and August 26, 2020, i.e., the June 24, 2020 Demand Letter to [Weleba] . . ., the August 14, 2020 Demand Letter . . ., the
5 August 26, 2020 Weleba Letter . . . and the July 10, 2020 Weleba and [Prince] Emails . . . .
D. The trial court grants Weleba’s motion and denies Prince’s motion; Weleba files a supplemental motion for summary judgment, which the trial court grants; Weleba nonsuits his claims; final judgment is entered; Prince appeals.
Following a hearing, the trial court signed orders denying Prince’s motion for
summary judgment and granting Weleba’s motion for summary judgment and
entering a take-nothing judgment on Prince’s claims. After the orders were signed,
Weleba filed a supplemental motion for summary judgment which addressed the
claim for unjust enrichment in Prince’s amended pleadings. Prince filed a response to
the supplemental motion, as well as an amended answer to Weleba’s counterclaim and
an “amended counterclaim to [Weleba’s] counterclaim.” Thereafter, Weleba
nonsuited “all affirmative claims” against Prince.
After a hearing, the trial court granted Weleba’s supplemental motion for
summary judgment and entered a final judgment. Prince appeals from this judgment
and the earlier orders granting Weleba’s motion for summary judgment and denying
Prince’s motion for partial summary judgment.
III. DISCUSSION
On appeal, Prince raises two issues, complaining that the trial court erred (1) in
granting Weleba’s motion and supplemental motion for summary judgment and (2) in
denying Prince’s motion for partial summary judgment.
6 A. Standard of Review
We review a trial court’s ruling on a motion for summary judgment de novo.
Tarr v. Timberwood Park Owners Ass’n, Inc., 556 S.W.3d 274, 278 (Tex. 2018). We
consider the evidence presented in the light most favorable to the nonmovant,
crediting evidence favorable to the nonmovant if reasonable jurors could, and
disregarding evidence contrary to the nonmovant unless reasonable jurors could not.
Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009).
We indulge every reasonable inference and resolve any doubts in the nonmovant’s
favor. 20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008).
With regard to a traditional motion for summary judgment, we will affirm
summary judgment only if the record establishes that the movant has conclusively
proved all essential elements of the movant’s cause of action (or defense, as the case
may be) as a matter of law. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671,
678 (Tex. 1979). A defendant is entitled to summary judgment on an affirmative
defense if the defendant conclusively proves all elements of that defense. Frost Nat’l
Bank v. Fernandez, 315 S.W.3d 494, 508–09 (Tex. 2010); see Tex. R. Civ. P. 166a(b), (c).
With regard to a no-evidence motion for summary judgment, if the nonmovant brings
forward more than a scintilla of probative evidence that raises a genuine issue of
material fact, then a no-evidence summary judgment is not proper. Smith v. O’Donnell,
288 S.W.3d 417, 424 (Tex. 2009); King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751
(Tex. 2003); see Tex. R. Civ. P. 166a(i).
7 When both parties move for summary judgment and the trial court grants one
motion and denies the other, the reviewing court should review both parties’
summary judgment evidence and determine all questions presented. Mann Frankfort,
289 S.W.3d at 848. We should then render the judgment that the trial court should
have rendered. See Myrad Props., Inc. v. LaSalle Bank Nat’l Ass’n, 300 S.W.3d 746, 753
(Tex. 2009); Mann Frankfort, 289 S.W.3d at 848.
B. Weleba’s Motion and Supplemental Motion for Summary Judgment
In both his original and supplemental motions, Weleba moved for summary
judgment only on his affirmative defense of limitations, contending that all of Prince’s
causes of action accrued in January 2017 when the Rescission Agreement was entered.
On appeal, Prince argues that Weleba’s summary judgment motion “rests upon the
incorrect assumption that the parties’ Rescission Agreement required Weleba to
refund Prince’s investment on the date of the agreement or be in breach.”
1. Applicable Law
A defendant seeking traditional summary judgment on a limitations defense
must establish “(1) when the cause of action accrued, and (2) that the plaintiff brought
its suit later than the applicable number of years thereafter—i.e., that ‘the statute of
limitations has run.’” Levinson Alcoser Assoc., L.P. v. El Pistolón II, Ltd., 670 S.W.3d 622,
626 (Tex. 2023) (citing Draughon v. Johnson, 631 S.W.3d 81, 89 (Tex. 2021) (quoting
Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 221 (Tex. 2003))).
Therefore, as the party moving for summary judgment, Weleba bore the burden to
8 conclusively establish that the statute is applicable, including the date on which the
statute began to run, which is the date the causes of action accrued. See Diversicare
Gen. Partner, Inc. v. Rubio, 185 S.W.3d 842, 846 (Tex. 2005); Provident Life & Accident Ins.
Co, 128 S.W.3d at 220.
Determining when a cause of action accrued is a question of law. Provident Life
& Accident Ins. Co., 128 S.W.3d at 221. Generally, a cause of action accrues, and the
statute begins to run, “when a wrongful act causes a legal injury, regardless of when
the plaintiff learns of that injury or if all resulting damages have yet to occur.” Id.
(citing S.V. v. R.V., 933 S.W.2d 1, 4 (Tex. 1996)). The statute begins to run on the
accrual date even if the injury is not discovered until later or all damage resulting from
the injury has not yet occurred. Id.
In certain narrow cases, the discovery rule defers accrual until a plaintiff “knew
or, exercising reasonable diligence, should have known of the facts giving rise to a
cause of action.” HECI Expl. Co. v. Neel, 982 S.W.2d 881, 886 (Tex. 1998). The party
moving for summary judgment on the basis of limitations must negate the discovery
rule if it applies and has been pleaded by the nonmoving party. Env’t Procs., Inc. v.
Guidry, 282 S.W.3d 602, 622 (Tex. App.—Houston [14th Dist.] 2009, pet. denied) (op.
on reh’g).
9 2. Analysis
In his motion for summary judgment, Weleba set out the following
“undisputed facts”2:
4. On March 9, 2015, [Prince] and [Weleba] entered into the Purchase Agreement, whereby [Prince] purchased a 62% interest in the Company for approximately $432,675.00.
5. On January 17, 2017, [Prince] and [Weleba] entered into the Re[s]cission Agreement, whereby the Purchase Agreement was rescinded.
6. [Prince] filed this lawsuit on March 31, 2022, alleging, inter alia, breach of contract, fraud, fraudulent inducement, and breach of fiduciary duty.
Weleba attached the Purchase Agreement and the Rescission Agreement to the
summary judgment motion as evidence. Based on these facts, Weleba asserted that he
was entitled to summary judgment because “[a]t the latest, all of [Prince’s] claims
accrued in January 2017, more than five years before [Prince] instituted this suit.”
Weleba’s supplemental motion for summary judgment attacking the unjust
enrichment claim in Prince’s amended pleadings also relied exclusively on the
limitations defense. As summary judgment evidence for his supplemental motion,
2 “The parties’ mere agreement that an issue can be decided as a matter of law on undisputed facts does not mean that, applying the appropriate applicable law and standards of review, the evidence before the court is actually undisputed or the undisputed facts presented are sufficient for a court to decide the issue as a matter of law.” Infinity Cnty. Mut. Ins. Co. v. Tatsch, 617 S.W.3d 614, 621 (Tex. App.—San Antonio 2020, pet. denied) (op. on reh’g).
10 Weleba attached the order granting the original summary judgment and his
declaration.
Prince’s summary judgment response set out his version of the “undisputed
specific facts”:
12. Effective April 30, 2015, [Prince] acquired from [Weleba] . . . 62% of the outstanding membership interests (the “Prince Membership Interests”) of Hospice Care Partners, LLC (“Hospice Care”) pursuant to that certain LLC Membership Interest Purchase Agreement (“MIPA”) . . . . Pursuant to the MIPA, [Prince] paid [Weleba] $431,675.00 for the Prince Membership Interests.
13. Unfortunately, based on representations made by [Weleba] to [Prince], [Prince] could not become a member of Hospice Care without adversely affecting Hospice Care’s license to bill Medicare and Medicaid.
....
15. On advice of legal counsel, [Prince] and [Weleba] rescinded the MIPA until the new license was issued. Thereafter, plans to notify the State and Federal agencies of a change of ownership would be made and allow Hospice Care to continue to bill its services. In the meantime, as a show of good faith, [Prince] agreed that for the short term, [Weleba] could retain the $431,675.00 he gave to [Weleba] for the Membership Interests until the licensing was completed.
According to Prince, “the intent of the Rescission Agreement was that [Prince] was
never deemed to be a member of Hospice Care” and to allow Weleba “to obtain the
appropriate licensing.”
However, Prince eventually “became frustrated” and demanded a return of his
money in letters dated June 24, 2020 and August 14, 2020. According to Prince’s
response to the summary judgment motion,
11 [Weleba] responded in an email to [Prince] dated August 26, 2020 . . . stating that [Prince] owed him either $286,831.06 or $122,458.06, treating [Prince] as if he either was still a member of Hospice Care even though the Re[s]cission Agreement . . . voided, nullified, cancelled and completely erased the [Purchase Agreement] or [Prince] would have to pay [Weleba] [$]286,831.06 or $122,458.06 to be reinstated as a member of Hospice Care but under no uncertain circumstances was [Weleba] going to return the $431,675.00 [Prince] had paid him. The difference between paying [Weleba] $286,831.06 or $122,458,.00 [sic] depended on whether Paramount Healthcare, a company in which [Prince] own[ed] an interest, would release a claim of $164,373.00 against Hospice Care. Under either alternative, [Weleba] was requiring [Prince] to pay him an additional $286,831.06 or $122,458.06 for [Prince] to retain or reacquire a 62% interest in Hospice Care.
In addition, the response noted that in Weleba’s July 10, 2020 email, he had agreed to
“dissolve the partnership” and wanted to get “this matter expeditiously and equitably
resolved.” According to the response, Weleba stated “that the way to go about this
[wa]s to come up with a fair number that [he and Prince could] both live with and
[Prince could] get paid back that which [he] may be due.” In an email to Weleba,
Prince’s attorney referred to the disputed funds as money “loaned to the company.”
Prince’s response also pointed out that Weleba’s motion for summary judgment
“wholly ignore[d] the ‘Discovery Rule.’”
As summary judgment evidence, Prince attached his affidavit, the Purchase
Agreement, the Rescission Agreement, the June 24, 2020 demand letter, the
August 14, 2020 demand letter, the July 10, 2020 email from Weleba to Prince and his
attorney, and the August 26, 2020 email from Weleba to Prince. As noted above, on
12 the same day the response was filed, Prince amended his pleadings to add an unjust
enrichment claim and to plead the discovery rule.
Notably, the one-page Rescission Agreement upon which Weleba moved for
summary judgment failed to address or even mention the $431,675 paid by Prince to
Weleba. Rather, the Rescission Agreement stated that it “rescind[ed] the
March 9, 2015 sale of limited liability company interest” and that “the Parties still
desire to enter into a binding sales agreement.”
In his reply to the response, Weleba asserted that all of Prince’s claims accrued
on January 18, 2017, the date after the Rescission Agreement was signed.3 In
addition, Weleba argued that Prince “attempt[ed] to add terms to an unambiguous
contract that contains an integration clause in an effort to salvage his expired
limitations.” Citing Prince’s summary judgment response, Weleba complained that
Prince “attempts to add, modify, or change the unambiguous written terms by
asserting that he agreed to allow [Weleba] to ‘retain the $431,675.00 . . . until the
licensing was completed.’” As for the discovery rule, Weleba contended that it was
not “trigger[ed]” in this case.
3 On appeal, Weleba states that the accrual date is January 17, 2017: “Either the January 17, 2017 rescission triggered an obligation to make a payment, or nothing did.” Therefore, “[i]f any claim for payment ever accrued, it accrued no later than January 17, 2017.”
13 a. Parol evidence is admissible despite the integration or merger clause.
On appeal, Weleba asserts that “[s]ince the Rescission Agreement is a written
contract with an integration clause, that means that, as of the execution of the
Rescission Agreement, there were no contractual obligations between the parties.”
While Weleba stated before the trial court that the Rescission Agreement was
unambiguous, Prince contended that it was ambiguous.4 In any event, it is undisputed
that the agreement did not mention the money paid by Prince to Weleba.5 Therefore,
we must first decide whether the integration or merger clause prevents parol evidence
concerning an alleged collateral agreement regarding the money.
Generally, the parol evidence rule circumscribes the use of extrinsic evidence
when interpreting an integrated document. Sun Oil Co. (Del.) v. Madeley, 626 S.W.2d
726, 731 (Tex. 1981). The parol evidence rule does not, however, prohibit courts
from considering extrinsic evidence of the facts and circumstances surrounding the
contract’s execution as “an aid in the construction of the contract’s language.” URI,
4 Whether a contract is ambiguous is a question of law for the court to decide. First Bank v. Brumitt, 519 S.W.3d 95, 105 (Tex. 2017). 5 In his reply to the response to his motion for summary judgment, Weleba states, “If [Prince] were entitled to any payment as part of that rescission, it was due when the rescission occurred.” [Emphasis added.] On appeal, Weleba acknowledges that the “obligation [to return the money] is not found anywhere in the [R]escission [A]greement; nowhere does it provide for any payment.”
14 Inc. v. Kleberg Cnty., 543 S.W.3d 755, 765 (Tex. 2018) (quoting Sun Oil Co., 626 S.W.2d
at 731).
When a contract contains a merger or integration clause, the contract’s
execution presumes that all prior negotiations and agreements relating to the
transaction have been merged into the contract, and it will be enforced as written and
cannot be added to, varied, or contradicted by parol evidence. Barker v. Roelke,
105 S.W.3d 75, 83 (Tex. App.—Eastland 2003, pet. denied). However, this rule has
exceptions.
A merger clause can be disregarded upon pleading and proof of ambiguity,
fraud, or accident. Fish v. Tandy Corp., 948 S.W.2d 886, 898 (Tex. App.—Fort Worth
1997, writ denied). It also does not prohibit evidence of a collateral agreement. Ledig
v. Duke Energy Corp., 193 S.W.3d 167, 179 n.10 (Tex. App.—Houston [1st Dist.] 2006,
no pet.).6 “A collateral agreement is one that is supported by separate consideration
and that the parties ‘might naturally’ make separately under the circumstances.”
Barkley v. Connelly, No. 07-22-00144-CV, 2023 WL 5499000, at *3 (Tex. App.—
Amarillo Aug. 24, 2023, no pet. h.) (mem. op. on reh’g) (quoting Hubacek v. Ennis State
Bank, 317 S.W.2d 30, 33 (Tex. 1958)). A collateral agreement between parties
concerning the relationship of several distinct obligations between them falls within
the exception to the parol evidence rule. Walz v. Hayes, No. 01-16-00277-CV, 2017
6 Parol evidence is also admissible to show the parties’ true intentions if the writing is ambiguous. Gonzalez v. United Bhd. of Carpenters & Joiners of Am., Local 551, 93 S.W.3d 208, 211 (Tex. App.—Houston [14th Dist.] 2002, no pet.).
15 WL 711744, at *2 (Tex. App.—Houston [1st Dist.] Feb. 23, 2017, pet. denied) (mem.
op.).
The application of the collateral agreement exception is a function of the
integration present in the executed contract. ISG State Operations, Inc. v. Nat’l Heritage
Ins. Co., Inc., 234 S.W.3d 711, 720 (Tex. App.—Eastland 2007, pet. denied). If a
contract is only partially integrated, admission of an oral agreement not inconsistent
with the terms of the written contract comports with the parol evidence rule. Id.
Under the parol evidence rule, the Rescission Agreement precludes
enforcement of any prior or contemporaneous agreement that addresses the same
subject matter and is inconsistent with its terms. See West v. Quintanilla, 573 S.W.3d
237, 244–45 (Tex. 2019). But it does not preclude enforcement of an agreement that
is “collateral” to and not inconsistent with the Rescission Agreement. See id. at 245.
“‘[R]elated’ and ‘correlated’ agreements can be collateral.” Id.
A case from one of our sister courts informs our analysis here. In StarCom
Commc’ns, LLC v. Phonetec, LP, No. 11-07-00305-CV, 2009 WL 1653059, at *1 (Tex.
App.—Eastland June 11, 2009, no pet.) (mem. op.), the Eastland Court of Appeals
examined an agreement whereby StarCom agreed to purchase wireless phone service
from Phonetec for resale. StarCom subsequently terminated the contract and filed
suit, contending that Phonetec breached the agreement by not returning a $250,000
deposit. The trial court conducted a bench trial and entered judgment for Phonetec.
In reversing the trial court’s judgment and remanding the case, the Eastland court
16 noted that the contract did not expressly state what would happen to the deposit if
the contract was terminated early. Id. at *2. Therefore, “[b]ecause the contract d[id]
not speak to the treatment of the deposit following an early termination, it [was]
necessary to consider extraneous evidence to determine the contract’s true meaning.”
Id. at *3.
Here, the Rescission Agreement also does not mention the money paid by
Prince to Weleba. Therefore, the Rescission Agreement is integrated only as to the
parties’ agreements relating to the subject matter it addresses—rescinding Prince’s
membership interest in Hospice Care—not as to all prior or contemporaneous
agreements between Prince and Weleba. See West, 573 S.W.3d at 244 (“By its own
terms, the 2015 Purchase Agreement is integrated only as to the parties’ agreements
relating to the ‘subject matter’ it addresses, not as to all prior or contemporaneous
agreements between the parties.”); see also ISG State Operations, Inc., 234 S.W.3d at 719
n.10 (“A partially integrated contract is a full and complete expression of the terms
contained in that agreement but is not a final and complete expression of all terms
agreed upon between the parties.”). Therefore, Prince could offer parol evidence
concerning whether the $431,675 became a loan—subject to the completion of the
updated licensing of Hospice Care—after the Rescission Agreement was entered.
17 b. Weleba failed to establish an accrual date for Prince’s causes of action.
To prevail on his motion for summary judgment, Weleba needed to establish
the accrual date for Prince’s causes of action.7 See Diversicare Gen. Partner, Inc.,
185 S.W.3d at 846. In response, Prince only needed to raise a genuine issue of
material fact regarding the affirmative defense of limitations to defeat summary
judgment. See Rivas v. Sw. Key Programs, Inc., 507 S.W.3d 777, 783 (Tex. App.—El Paso
2015, no pet.) (reversing summary judgment because there was a genuine issue of
material fact on the date of accrual for the claims).
Weleba generally contended that the accrual date for all of Prince’s causes of
action was the date of the January 2017 Rescission Agreement.8 Prince, on the other
hand, asserted that the “statute of limitations d[id] not apply,” but if it did, the
7 We note that Weleba’s motion also failed to address whether, because of Prince’s pleading of fraud and fraudulent inducement, either one or both of the contracts—the Purchase Agreement and Rescission Agreement—could be avoided. A contract is subject to avoidance on the ground of fraudulent inducement. Italian Cowboy Partners, Ltd., 341 S.W.3d at 331 (citing Williams v. Glash, 789 S.W.2d 261, 264 (Tex. 1990)). “For more than fifty years, it has been ‘the rule that a written contract [even] containing a merger clause can [nevertheless] be avoided for antecedent fraud and fraud in its inducement and that the parol evidence rule does not stand in the way of proof of such fraud.’” Id. (citing Dallas Farm Mach. Co. v. Reaves, 307 S.W.2d 233, 239 (Tex. 1957)). However, because of our holding, we need not address this alternative argument. See Tex. R. App. P. 47.1. 8 For some causes of action, such as Prince’s accounting claim, Weleba acknowledges in his motion for summary judgment that the “exact date of accrual” is “hard to pin down.”
18 discovery rule applied and “the earliest when perhaps [Prince] should have discovered
that he had a claim was when his attorney sent [the] June 24, 2020 Demand Letter.”
Through his affidavit and attachments, Prince set out facts regarding whether
the money originally tendered to Weleba for an interest in Hospice Care was
converted to a loan after entry of the Rescission Agreement. In his July 2020 email,
Weleba confirmed that Prince was due “a fair number that [they could] both live with
[that would] get [Prince] paid back that which [he] may be due.” In his August 2020
email, Weleba again acknowledged having the $431,675 as Prince’s “initial
investment,” but he wanted to offset the amount owed Prince due to what he
contended were “capital contributions” owed by Prince and a debt owed to another
entity.9
A defendant who moves for summary judgment based on limitations must
conclusively establish the elements of that defense, including when the cause of action
accrued. Erikson v. Renda, 590 S.W.3d 557, 563 (Tex. 2019). Because each cause of
action may allege different legal injuries, they could—at least in theory—each accrue
at different times, even though they arise from the same wrongful conduct. Regency
Field Servs., LLC v. Swift Energy Operating, LLC, 622 S.W.3d 807, 815 (Tex. 2021).
9 Prince also argues in his response to Weleba’s summary judgment motion that both the Purchase Agreement and the Rescission Agreement were between him and Weleba, not Hospice Care, “which would have been the appropriate entity having standing to require an additional capital contribution.” Again, because of our holding, we need not address this alternative argument. See Tex. R. App. P. 47.1.
19 Here, Weleba asserted generally that all causes of action arose on the date the
Rescission Agreement was entered, which was insufficient to establish when each of
the alleged causes of action accrued.
As noted above, when a cause of action accrues is generally a question of law.
Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 567 (Tex. 2001). But we
cannot resolve the question of accrual when Prince’s and Weleba’s rights and
obligations regarding the $431,675 are unclear. See Boulle v. Boulle, 160 S.W.3d 167,
174–75 (Tex. App.—Dallas 2005, pet. denied) (holding that party cannot prevail on
limitations grounds in his summary judgment because the court “cannot resolve the
question of accrual when Franco’s rights and Jean’s obligations under the five-percent
provision are ambiguous”). Therefore, after considering all of the summary judgment
evidence, we conclude that Prince presented evidence raising a genuine issue of
material fact regarding when each of his causes of action accrued.
c. Weleba did not conclusively negate application of the discovery rule.
Moreover, to be entitled to summary judgment on limitations grounds, Weleba
was required to negate the discovery rule by conclusively establishing that either
(1) the discovery rule does not apply, or (2) if the rule applies, the summary judgment
evidence negates it. See Marcus & Millichap Real Est. Inv. Servs. of Nev., Inc. v. Triex Tex.
Holdings, LLC, 659 S.W.3d 456, 460 (Tex. 2023); see also Hernandez v. Garcia, No. 13-
12-00096-CV, 2013 WL 1384882, at *3–4 (Tex. App.—Corpus Christi–Edinburg
20 April 4, 2013, no pet.) (mem. op.) (“As the party moving for traditional summary
judgment, it was [appellee’s] burden to establish both the date on which the statute
began to run and to either negate the discovery rule or explain why it is
inapplicable.”).
Here, although Prince amended his pleadings to allege the discovery rule seven
days prior to the hearing,10 Weleba did not amend his motion for summary judgment
to address it. See Proctor v. White, 172 S.W.3d 649, 652 (Tex. App.—Eastland 2005, no
pet.) (Appellees “did not address the discovery rule after appellant raised it in
response to their motion for summary judgment” and “did not attempt to establish
when appellant knew or should have known of the facts giving rise to his claims”;
therefore, they “did not prove as a matter of law that no genuine issue of material fact
exists concerning when appellant knew or should have known of the facts giving rise
to his claims.”). He also did not object to Prince’s reliance on the rule. Id. (holding
that because appellees failed to object to appellant’s reliance on the discovery rule,
appellees “tried the discovery rule issue by consent”). All Weleba did was argue
10 Texas Rule of Civil Procedure 166a(c) requires the trial court to consider the pleadings “on file at the time of the hearing, or filed thereafter and before judgment with permission of the court.” Tex. R. Civ. P. 166a(c). Because the amended pleadings here were filed seven days prior to the hearing on the motion for summary judgment, no leave of court was required. See Tex. R. Civ. P. 63; see also Smith v. Heard, 980 S.W.2d 693, 698 (Tex. App.—San Antonio 1998, pet. denied) (“An amendment is timely, and leave of court is not required, when the amended pleading is filed exactly one week before the summary judgment hearing.” (citing Sosa v. Cent. Power & Light, 909 S.W.2d 893, 895 (Tex. 1995))).
21 generally, in his supplemental motion for summary judgment11 and response to
Prince’s motion for summary judgment, that the discovery rule did not apply and, if it
did, any failure to receive money was not inherently undiscoverable. This was
insufficient to “conclusively negate” application of the discovery rule. Erikson,
590 S.W.3d at 563.
d. Weleba failed to meet his summary judgment burden.
As the party moving for traditional summary judgment, it was Weleba’s burden
both to establish the date on which the statute began to run and either to negate the
discovery rule or to explain why it is inapplicable. See Hernandez, 2013 WL 1384882, at
*4. Because neither his original nor his supplemental motion met these requirements,
we conclude that Weleba did not conclusively establish the statute of limitations as an
affirmative defense. See id.; see also Podolny v. Elliott Turbomachinery, Co., Inc., No. 13-04-
499-CV, 2007 WL 271118, at *2 (Tex. App.—Corpus Christi–Edinburg Feb. 1, 2007,
no pet.) (mem. op.) (“To affirm a trial court’s summary judgment, we must find that
there is no genuine issue of material fact regarding the accrual of the statute of
11 The supplemental motion for summary judgment was filed one week after the order granting summary judgment was signed and only addressed the amended claim for unjust enrichment. See Davis v. Loving, No. 14-15-00059-CV, 2016 WL 3574653, at *3 (Tex. App.—Houston [14th Dist.] June 30, 2016, no pet.) (mem. op.) (stating that “a movant may not use its reply to amend its motion for summary judgment”); Smith v. Atl. Richfield Co., 927 S.W.2d 85, 88 (Tex. App.—Houston [1st Dist.] 1996, writ denied) (op. on reh’g) (“A reply brief does not suffice to rebut a claim added in an amended pleading.”); see also Casso v. Brand, 776 S.W.2d 551, 553 (Tex. 1989) (“[A]ll theories in support of a summary judgment, as well as all opposing issues, must be presented in writing to the court at the hearing.”).
22 limitations and that the movants showed they were entitled to judgment as a matter of
law.”). Therefore, it was error for the trial court to grant Weleba’s motion and
supplemental motion for summary judgment.
We sustain Prince’s first issue.
C. Prince’s Motion for Summary Judgment
In his second issue, Prince argues that the trial court erred in denying him
(1) traditional summary judgment on his claims for breach of contract and money had
and received and (2) no-evidence summary judgment on Weleba’s indemnification
claim.12
1. The trial court properly denied Prince’s traditional summary judgment motion.
To prevail on his breach of contract claim, Prince was required to establish:
(1) the existence of a valid contract; (2) performance by him; (3) breach of the
contract by Weleba; and (4) damages resulting from the breach. See Velvet Snout, LLC
v. Sharp, 441 S.W.3d 448, 451 (Tex. App.—El Paso 2014, no pet.). For money had
and received, Prince was required to prove that Weleba held money and that the
money belonged to Prince in equity and good conscience. See Norhill Energy LLC v.
McDaniel, 517 S.W.3d 910, 917 (Tex. App.—Fort Worth 2017, pet. denied) (citing
12 While Prince filed a hybrid motion for summary judgment, he sought traditional summary judgment only on his claims for breach of contract and money had and received. Prince’s no-evidence motion was limited to claims by Weleba “for indemnification based on [Weleba’s] failure to return the $431,675.00 to [Prince] as a result of the Re[s]cission Agreement.”
23 Plains Expl. & Prod. Co. v. Torch Energy Advisors Inc., 473 S.W.3d 296, 302 n.4 (Tex.
2015)) (“The supreme court has instructed us that a claim for money had and received
is equitable in nature and thus to prevail on this action, a plaintiff need only prove
that (1) the defendant holds money, and (2) the money in equity and good conscience
belongs to the plaintiff.”). With regard to the indemnification claim, if Weleba
brought forward more than a scintilla of probative evidence that raised a genuine issue
of material fact, then a no-evidence summary judgment could not properly be granted.
See Smith, 288 S.W.3d at 424.
To defeat the traditional motion for summary judgment, Weleba was required
to file a response that created a fact issue about at least one element of each of
Prince’s causes of action, by either identifying a fact issue in the summary judgment
proof already in the record, or by attaching additional summary judgment evidence
that created a fact issue. See Bernsen v. Live Oak Ins. Agency, Inc., 52 S.W.3d 306, 308
(Tex. App.—Corpus Christi–Edinburg 2001, no pet.). He could also defeat the
summary judgment by creating at least a fact issue about his own affirmative defense.
See Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex. 1984); see also Tesoro Petroleum Corp. v.
Nabors Drilling USA, Inc., 106 S.W.3d 118, 124 (Tex. App.—Houston [1st Dist.] 2002,
pet. denied) (“A party raising an affirmative defense in opposition to a motion for
summary judgment must either (1) present a disputed fact issue on the opposing
party’s failure to satisfy his own burden of proof or (2) establish at least the existence
24 of a fact issue on each element of his affirmative defense by summary judgment
proof.”).
Weleba’s response stated that Prince’s motion for summary judgment should
be denied for “multiple reasons”:
• Prince’s traditional motion for summary judgment on his contract claim did not establish as a matter of law that Weleba breached any provision of the only contract in force between the parties.
• Prince’s traditional motion for summary judgment on his claim for money had and received did not establish a right to judgment as a matter of law because a party cannot recover for money had and received for an issue governed by a written contract.
• Even if Prince had presented sufficient summary judgment evidence on either of those claims, both claims were barred by the applicable statutes of limitations.
• Even if the discovery rule applied, Prince did not establish that it tolled the limitations period long enough to save his claims.
• Prince should not be awarded no-evidence summary judgment because he did not properly move for no-evidence summary judgment by identifying an essential element of any claims for which there is allegedly no evidence, as required by Texas Rule of Civil Procedure 166a(i).
• Even if Prince had properly moved for no-evidence summary judgment on Weleba’s counterclaim, fact issues prevent summary judgment.
On appeal, Weleba adds that, as a result of his nonsuit of his counterclaim’s
affirmative claims, “any issue relating to the propriety of summary judgment on those
claims is now moot.”
25 Weleba also objected to Prince’s summary judgment evidence and attached his
own declaration as summary judgment evidence. The declaration states that Weleba
read Prince’s affidavit attached to the summary judgment motion, in particular the
statement by Prince that he “agreed that for the short term, [Weleba] could retain the
$431,675 [Prince] gave him for the Membership Interests until the licensing was
completed.” Weleba responded that he “never entered into any such express
agreement” with Prince. Further, Weleba stated that the “only contracts” between
Prince and himself were the Purchase Agreement and the Rescission Agreement. He
also pointed out that the Rescission Agreement contained an indemnification clause.
It provided:
In consideration of this agreement, and other agreements to be made, Buyer agrees, on his and his heirs and assigns behalf, to indemnify, save, and hold harmless from and against any and all damages Seller incurs, including without limitation, penalties, liens, costs, expenses, attorney fees, and other costs, related to or arising from this transaction.
In his declaration, Weleba stated that he had “incurred attorneys’ fees, expenses, and
costs related to or arising from the transaction at issue in the Rescission Agreement,
including attorneys’ fees, expenses and costs relating to this lawsuit.” And he attested
that Prince “ha[d] failed to indemnify [him] for those damages.”
Both Prince’s and Weleba’s summary judgment evidence raised a question of
material fact regarding what, if any, agreement was reached concerning the $431,675. 13
13 While on appeal Prince contends that it is “not disputed” that elements 1, 2, and 4 of his breach of contract cause of action were met, we do not agree. As Weleba
26 Therefore, Prince failed to conclusively prove the elements of his breach of contract
and money had and received causes of action. See Rhône-Poulenc, Inc. v. Steel,
997 S.W.2d 217, 223 (Tex. 1999) (when a plaintiff moves for summary judgment on
his own claim, he must conclusively prove all essential elements of his cause of
action).
Moreover, as noted above in the discussion about Weleba’s motion for
summary judgment, the summary judgment evidence raised a question of material fact
regarding the affirmative defense of limitations. This was also sufficient to defeat
summary judgment for Prince on those two causes of action. See Customer Ctr. of
DFW Inc. v. RPAI N. Richland Hills Davis Ltd. P’ship, No. 02-20-00189-CV, 2021 WL
2149623, at *4 (Tex. App.—Fort Worth May 27, 2021, no pet.) (mem. op.) (holding
that, because appellants offered evidence sufficient to raise a fact issue on each
element of their affirmative defense, summary judgment was improper).
2. Any issue regarding the denial of Prince’s no-evidence summary judgment is moot.
With regard to the no-evidence part of Prince’s motion for summary judgment,
Weleba argues on appeal that the issue is moot in light of his nonsuit of his
notes in his brief, Prince’s “motion does not even specify what contractual provision [Weleba] is alleged to have breached” or “what contract was allegedly breached.”
27 counterclaim.14 We agree. As noted above, Weleba filed a nonsuit in the trial court,
wherein he nonsuited all of the “affirmative claims” made in his counterclaim, which
included the claim for indemnification. The nonsuit was noted in the trial court’s final
judgment. Therefore, his nonsuit “moots his case” by “extinguish[ing] a case or
controversy.” Morath v. Lewis, 601 S.W.3d 785, 788 (Tex. 2020) (first quoting Hous.
Mun. Emps. Pension Sys. v. Ferrell, 248 S.W.3d 151, 157 (Tex. 2007); and then quoting
Univ. of Tex. Med. Branch at Galveston v. Estate of Blackmon, 195 S.W.3d 98, 100 (Tex.
2006)); see Leon Springs Gas Co. v. Rest. Equip. Leasing Co., 961 S.W.2d 574, 578 (Tex.
App.—San Antonio 1997, no pet.) (holding that the “nonsuit rendered moot the
matters raised in Rudy’s pending motion for partial summary judgment”).
We overrule Prince’s second issue.
IV. CONCLUSION
Because neither party established a right to judgment as a matter of law, we
affirm the order denying Prince’s summary judgment motion and reverse the order
granting Weleba’s motion and supplemental motion for summary judgment. We
remand this case for further proceedings consistent with this opinion.
14 In his reply brief, Prince does not respond to the mootness argument. In addition, it is arguable that Prince abandoned any argument about the propriety of denying the no-evidence summary judgment motion as he failed to address it in its entirety in his brief. See Tex. R. App. P. 38.1(i).
28 /s Dana Womack
Dana Womack Justice
Delivered: October 5, 2023