Humberto Lopez, Jr. and Olga Lopez v. Mayra Rivas and Linda Lopez

• Court: Court of Appeals of Texas
• Decided: April 30, 2015
• Docket: 01-14-00592-CV
• Status: Published

Opinion

Opinion issued April 30, 2015

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-14-00592-CV ——————————— HUMBERTO LOPEZ, JR. AND OLGA LOPEZ, Appellants V. MAYRA RIVAS AND LINDA LOPEZ, Appellees

On Appeal from the 190th District Court Harris County, Texas Trial Court Case No. 2011-32028

MEMORANDUM OPINION

Appellees Mayra Rivas and Linda Lopez conveyed, by a general warranty

deed, their respective one-third interests in their deceased parents’ property to their

brother and sister-in-law, Appellants Humberto Lopez, Jr. and Olga Lopez. Two

years later, Mayra and Linda sued Humberto and Olga, asserting that Humberto and Olga orally promised to pay them each $20,000, plus interest, for their

interests in the property in addition to the consideration of $10 recited in the deed.

After a bench trial, the trial court entered a final judgment awarding Mayra and

Linda damages in the amount of $20,000 each, plus interest. In their sole issue on

appeal, Humberto and Olga contend that the judgment must be reversed because

the parol evidence rule bars the trial court from considering Mayra and Linda’s

testimony concerning Humberto and Olga’s oral promise that contradicts the

express terms of the deed. We affirm.

Background

Humberto Lopez, Sr. and Delia Lopez were married and owned a home at

7833 Dayton Street in Houston, Texas. After their death, the Dayton Street

property devolved to their three surviving children—Mayra, Linda, and Humberto.

Each of the three siblings executed an “Affidavit of Distributees” in which they

stated that they each received a one-third interest in the property, which they

valued at $60,000.

Mayra and Linda conveyed their interests in the Dayton Street property to

Humberto and Olga by general warranty deed in April 2009. The deed recites that

Mayra and Linda granted, sold, and conveyed the Dayton Street property to

Humberto and Olga “for and in consideration of the sum of TEN AND NO/100

DOLLARS ($10.00) and other good and valuable consideration to the Grantor in

2 hand paid by Humberto Lopez and Olga Lopez . . . the receipt and sufficiency of

which is hereby acknowledged.”

Two years later, in May 2011, Mayra and Linda sued Humberto and Olga,

asserting breach of agreement, fraud in a real estate transaction, restitution, and

seeking attorney’s fees. 1 According to Mayra and Linda, Humberto and Olga

orally agreed but failed to pay Mayra and Linda each $20,000 within one year, plus

3.5 percent interest for their respective interests in the property. Mayra and Linda

alternatively requested that in the event the trial court could not enforce their oral

agreement, the trial court restore the ownership interests they held before executing

the deed.2

The trial court conducted a bench trial at which Mayra and Linda were the

sole witnesses. They each testified that before signing the deed, Humberto and

Olga had agreed to pay Mayra and Linda each $20,000 within one year, plus 3.5

percent interest, and that they signed the deed in reliance on this promise to pay.

1 Mayra and Linda also asserted a vendors lien under their “foreclosure” claim and requested that the trial court (1) order Appellants to provide an inventory of all inherited personal property and (2) “account for such personal property” that they “took possession of after their mother’s death [and was] no longer in Defendants’ possession . . . .” 2 Mayra and Linda also requested that (1) the trial court order Humberto and Olga to provide Mayra and Linda with an “accounting of all rental income and expenses from the Property since June 22, 2008, and to award [Mayra and Linda] two-thirds of the net rental income from the property” and (2) the trial court enter a temporary injunction enjoining Humberto and Olga “from spending or using for their own, personal benefit any of net rental income derived from the rental or lease of the Property.”

3 Mayra and Linda also both testified that Humberto and Olga admitted that they

were attempting to secure financing to make good on their oral promise.

Specifically, Mayra and Linda testified that they received the following letter in

which Humberto and Olga’s attorney stated:

Dear Mayra and Linda: March 2, 2011

It is my understanding that it will take several more weeks to complete and fund the loan, as the broker is still shopping for the best deal for them. Humberto wants to thank you for your patience and understanding . . . . As soon as they obtain the loan, all of you will sit down together to discuss how to amicably resolve any unresolved issues with your mother’s estate.

The trial court admitted the letter.

On April 15, 2014, the trial court entered a final judgment in favor of Mayra

and Linda. The judgment states: “as a result of [Humberto and Olga’s] breach of

contract and fraud in a real estate transaction, [Mayra and Linda] have sustained

damages and that [Mayra and Linda] should recover damages and costs from

[Humberto and Olga] jointly and severally.” The trial court awarded Mayra and

Linda attorney’s fees and ordered Humberto and Olga, jointly and severally, to pay

Mayra and Linda $20,000 each with prejudgment interest at 3.5 percent interest

and post-judgment interest at 5 percent. Humberto and Olga filed a motion for

new trial, which was overruled by operation of law. See TEX. R. CIV. P. 329b(c).

4 Discussion

In their sole issue on appeal, Humberto and Olga contend that the trial court

erred in admitting parol evidence of an oral promise to contradict or vary the terms

of the general warranty deed. They argue that this error requires reversal because

it “was the only evidence offered in support of the trial court’s judgment.”

A. Standard of Review and Applicable Law

When parties reduce an agreement to writing, the law of parol evidence

presumes, in the absence of fraud, accident, or mistake, that any prior or

contemporaneous oral or written agreements merged into the final written

agreement. See DeClaire v. G & B Mcintosh Family Ltd. P’ship, 260 S.W.3d 34,

45 (Tex. App.—Houston [1st Dist.] 2008, no pet.). Any provisions not set out in

the writing are presumed to have been abandoned before execution of the

agreement or, alternatively, they are presumed to have never been made. Id.

Likewise, the parol evidence rule provides that the terms of a written contract

cannot be contradicted by evidence of an earlier, inconsistent agreement. Baroid

Equip., Inc. v. Odeco Drilling, Inc., 184 S.W.3d 1, 13 (Tex. App.—Houston [1st

Dist.] 2005, pet. denied).

The parol evidence rule is not a rule of evidence, but a rule of substantive

contract law. Jarvis v. K & E Re One, LLC, 390 S.W.3d 631, 638 (Tex. App.—

Dallas 2012, no pet.). Its applicability is a question of law that we review de novo.

5 Audubon Indem. Co. v. Custom Site–Prep, Inc., 358 S.W.3d 309, 316 (Tex. App.—

Houston [1st Dist.] 2011, pet. denied).

B. Analysis

Humberto and Olga contend that the deed expressly states that the agreed-

upon consideration was $10. Therefore, they argue, the parol evidence rule bars

consideration of evidence to contradict or vary that term. They contend that the

statement in the deed that the consideration’s “sufficiency . . . is hereby

acknowledged” supports their claim that the trial court could not consider evidence

of the oral promise. 3 In contrast, Mayra and Linda contend that the trial court

properly admitted parol evidence to show the amount of consideration referenced

in the deed by the words “other good and valuable consideration.” We agree with

Mayra and Linda.

The parol evidence rule does not bar evidence of a consistent collateral

agreement. Ledig v. Duke Energy Corp., 193 S.W.3d 167, 179 n.10 (Tex. App.—

Houston [1st Dist.] 2006, no pet.). Thus, parol evidence may be used to clarify or

explain the agreement. Tex. Builders v. Keller, 928 S.W.2d 479, 481 (Tex. 1996).

In addition, we may consider parol evidence “‘to show want or failure of

consideration, and to establish the real consideration given for an instrument.’”

Audubon, 358 S.W.3d at 316 (quoting DeLuca v. Munzel, 673 S.W.2d 373, 376

3 We note that Humberto and Olga did not raise the statute of frauds as a defense in the trial court or on appeal.

6 (Tex. App.—Houston [1st Dist.] 1984, writ ref’d n.r.e.)); see McLernon v.

Dynergy, Inc., 347 S.W.3d 315, 335 (Tex. App.—Houston [14th Dist.] 2011, no

pet.) (“[P]arol evidence is admissible to show want or failure of consideration and

establish the actual consideration given for the instrument.”). Thus, we may

consider parol evidence “to determine if consideration exists even though the

parties have reduced their agreement to a writing which appears to be a completely

integrated agreement.” Audubon, 358 S.W.3d at 316 (internal quotations and

citations omitted).

Here, we conclude that Mayra and Linda’s testimony concerning the oral

promise was admissible to show the actual consideration given for the deed

because it did not contradict or vary the deed’s terms. The deed states that, in

addition to $10, “other good and valuable consideration” was given for the deed.

Deeds ordinarily embody such recitals of nominal consideration and “other good

and valuable consideration.” See, e.g., Averyt v. Grande, Inc., 717 S.W.2d 891,

898 (Tex. 1986); Tatum v. Tatum, No. 14-11-00622-CV, 2012 WL 1795112, at

*2–3 (Tex. App.—Houston [14th Dist.] May 17, 2012, no pet.); Troxel v. Bishop,

201 S.W.3d 290, 294 (Tex. App.—Dallas 2006, no pet.). Therefore, evidence that

establishes what the “other” consideration was is admissible to establish the true

consideration given in the consistent collateral agreement and does not contradict

or vary the terms of the deed. See ERI Consulting Eng’rs, Inc. v. Swinnea, 318

7 S.W.3d 867, 875–76 (Tex. 2010) (testimony of consideration was proper under

exception to parol evidence rule because “if the parties agreed that the lease

obligation was to be additional consideration for the buyout, then such an

agreement was a consistent collateral agreement. Nothing in such an agreement

would contradict the written contracts.”); Deluca, 673 S.W.2d at 376 (parol

evidence admissible to explain provision of release concerning consideration);

Tarrant v. Schulz, 441 S.W.2d 868, 869–70 (Tex. Civ. App.—Houston [14th Dist.]

1969, writ ref’d n.r.e.) (where deed recited consideration of “$10 and other good

and valuable consideration . . . parol evidence was admissible to show the true

consideration or that there was no consideration given”).

Humberto and Olga rely on Johnson v. Driver, 198 S.W.3d 359 (Tex.

App.—Tyler 2006, no pet.), to support their contention that evidence of the oral

promise was inadmissible. In Johnson, the defendant argued that the deed, which

stated that the property was “granted, sold, and conveyed” “in consideration of ten

dollars and other valuable consideration,” evidenced a gift. Id. at 361. The court

of appeals held that the appellant could not introduce parol evidence to show that

the conveyance was a gift, rather than a sale, where appellant did not argue

ambiguity. Id. at 363–64. But, here, Mayra and Linda did not offer parol evidence

to prove that the conveyance was a gift; rather, they offered evidence to show that

8 the phrase “other consideration” in the deed referred to a consistent collateral

agreement. See id. Accordingly, Johnson does not support reversal here.

Humberto and Olga also contend that evidence of the oral promise was

inadmissible because the words “the receipt and sufficiency of which is hereby

acknowledged” “memorialize[d] the grantor’s admission that the consideration,

while not disclosed, was nevertheless satisfactory.” According to Humberto and

Olga, these words also mean that Mayra and Linda acknowledged receipt of all the

consideration they were provided and, therefore, no consideration can be

outstanding. But, as Mayra and Linda point out, the consideration that was

deemed sufficient and of which receipt was acknowledged was the promise to pay

Mayra and Linda each $20,000 plus interest for their respective interests in the

property. Therefore, we conclude that the phrase “the receipt and sufficiency of

which is hereby acknowledged” does not render evidence of the oral promise

inadmissible. We hold that the trial court did not err in admitting Mayra and

Linda’s evidence of Humberto and Olga’s oral promise.

We overrule Appellants’ sole issue.

9 Conclusion

We affirm the judgment of the trial court.

Rebeca Huddle Justice

Panel consists of Justices Jennings, Higley, and Huddle.