General Metal Fabricating Corporation, GMF Leasing Inc., and Arnold Curry v. John Stergiou and Main Marine Repair and Industrial Cleaning Co.

Opinion

Dissenting opinion issued February 14, 2013.

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-11-00460-CV ——————————— GENERAL METAL FABRICATING CORPORATION, GMF LEASING, INC., AND ARNOLD CURRY, Appellants V. JOHN STERGIOU AND MAIN MARINE REPAIR AND INDUSTRIAL CLEANING COMPANY, Appellees

On Appeal from the 133rd District Court Harris County, Texas Trial Court Case No. 2000-00900

DISSENTING OPINION ON REHEARING

Although I agree with the Court that the parties’ rule 11 agreement is

enforceable, I disagree with the Court’s interpretation of the agreement’s payment provisions. I would hold that the rule 11 agreement includes a right of prepayment

and therefore authorized Curry to pay the entire amount owed on or before the

down-payment deadline. Consequently, I do not join that part of the Court’s

opinion holding otherwise and I dissent from the Court’s judgment.

The GMF Companies correctly assert that the words “on or before” have a

particular, commonly-accepted meaning: they permit the obligor to pay any

amount of principle not due “‘immediately at or at any time in advance of,’ ‘a

period named.’” Lovenberg v. Henry, 140 S.W. 1079, 1080 (Tex. 1911). Nothing

in the rule 11 agreement prohibits prepayment. Yet, relying on the “structure” of

an agreement drafted in haste while the jury deliberated, the Court concludes that

any right of prepayment is severely limited in this case—i.e., Curry may prepay the

down payment of $20,000 principal but may not prepay the future monthly

installments. The Court adopts this construction of the agreement because the

down-payment and monthly installment provisions are “separately stated . . . using

complete punctuation.”

I would not place such great weight on the “structure” of the rule 11

agreement. The right of prepayment is not important because it allows for the

payment of principal before it is due. The right of prepayment is important

because it allows for the avoidance of unearned interest. By holding that the rule

11 agreement only authorizes Curry to prepay $20,000 in principal as a

2 down-payment, the Court renders the “on or before” language meaningless because

no interest was earned on that amount. Instead, the rule 11 agreement provides for

the accrual of interest after the down-payment deadline. I agree with the GMF

Companies that “the only way to give meaning to ‘on or before’ in the

‘down-payment’ paragraph—and to harmonize that term-of-art with the more

restrictive ‘on’ in the next paragraph—is to interpret the [rule 11 agreement] as

authorizing [the GMF Companies] to prepay so much of the settlement amount as

[they] desired (including the full amount), so long as that occurred on or before”

the down-payment deadline.

Given there is no dispute that Curry tendered the full $300,000 owed under

the rule 11 agreement to Stergiou, I would reverse the trial court’s summary

judgment that the rule 11 agreement did not convey any right of prepayment and

render judgment for the GMF Companies on this issue.

Jim Sharp Justice

Panel consists of Justices Jennings, Sharp, and Brown.

Justice Sharp, dissenting.