Mullins v. Mullins

889 S.W.2d 550, 1994 WL 588566
CourtCourt of Appeals of Texas
DecidedDecember 22, 1994
DocketB14-93-00095-CV
StatusPublished
Cited by10 cases

This text of 889 S.W.2d 550 (Mullins v. Mullins) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mullins v. Mullins, 889 S.W.2d 550, 1994 WL 588566 (Tex. Ct. App. 1994).

Opinion

OPINION

LEE, Justice.

Betsy Mullins and Mullins Investment Limited Partnership appeal from a judgment ordering appellants to pay a debt originally guaranteed by appellee. Appellants bring two points of error challenging the sufficiency of the evidence supporting the finding of mutual mistake and contending the evidence conclusively showed no mutual mistake. Ap-pellee brings three cross-points of error complaining of the trial court’s failure to award him attorney fees. We affirm.

Before the parties began divorce proceedings, Don Mullins personally guaranteed 25% of a promissory note for land purchased by 1283 Joint Venture. The total amount of the debt under this note was $5,271,940.00. Don Mullins immediately transferred his interest in the joint venture to Mullins Investment Limited Partnership (“MILP”), a family limited partnership in which Don and Betsy Mullins originally owned 25% each (the rest was owned by the Mullins’ three children). Once divorce proceedings began, Don Mullins provided documents to Betsy Mullins showing the extent of his guaranty, which was originally $1,317,985.00, but had decreased due to payments made on the note. Betsy Mullins’ inventory that was filed with the court listed this debt guaranteed for MILP and listed the amount of the debt as $768,500.00.

When the parties were negotiating their property division during the divorce action, a worksheet was prepared describing all assets and liabilities .of the parties. This worksheet became a settlement agreement when signed on September 11, 1989 by both Don and Betsy Mullins. Although this worksheet indicated that Betsy Mullins would assume the *552 debt to “1283 Waller J.V.,” the worksheet did not state the amount of the debt.

Testimony indicated that there were two joint ventures with similar names: 1283 Waller Limited and 1283 Joint Venture (sometimes called 1283 Waller Joint Venture). Don Mullins owned a small percentage in 1283 Waller Limited before and after the divorce. He also guaranteed a debt of approximately $111,000.00 for that entity, but this interest and debt were not transferred to MILP.

On October 17, 1989, Betsy and Don Mullins executed a Property Settlement Agreement, under which Betsy Mullins received Don Mullins’ twenty-five percent (25%) interest in MILP. Betsy Mullins, as general partner of MILP, also executed an agreement indemnifying Don Mullins from all debts arising from the obligations listed in an attached Exhibit “A.” This exhibit listed a debt owed to 1283 Waller J.V. in the amount of $111,693.64.

On October 11, 1991, appellee, Don Mullins, filed suit against appellants, Betsy Mullins and MILP, claiming that Betsy Mullins actually owed approximately $826,764.06 plus interest of $203.86 per day. Appellee alleged breach of contract, fraud, breach of fiduciary duty, coercion and duress, receipt of stolen property and misappropriation of confidential information, conversion, and estoppel. Appellants generally denied these allegations and raised the affirmative defenses of the statute of frauds, parol evidence, merger, release, and estoppel, among others. Appellants also brought counterclaims, including a request for a declaration that appellants did not assume any debt in excess of $111,693.64.

Trial was by jury. In response to question one, the jury found that the attachment to the indemnity agreement contained a mistake. In response to question two, the jury found that the negligence of Don Mullins or his agents proximately caused the mistake in the indemnity agreement. The jury awarded no damages or attorney fees to either party. The trial court entered judgment reforming exhibit “A” attached to the indemnity agreement dated October 17, 1989 to reflect that appellants must assume the full amount of the debt appellee guaranteed for MILP on the 1283 Joint Venture. In particular, the judgment reformed the indemnity agreement such that appellants must indemnify appellee for the full amount of any monies appellee has actually paid or is obligated to pay pursuant to appellee’s guaranty. The judgment noted that the full amount of this debt was evidenced by two promissory notes, attached as exhibits “C” and “D,” which are promissory notes executed by appellee in favor of the FDIC. These notes reflect a total debt owed by appellee of $826,764.06 plus interest. The judgment, in pertinent part, requires appel-lee to provide proof that he has made any payments under the notes, that appellants shall reimburse appellee for payments already made on these notes, and that appellants shall assume the balances of the notes. The judgment awarded no attorney fees or costs.

In point of error one, appellants challenge the legal and factual sufficiency of the evidence supporting the jury’s answer to question one regarding mistake. In point of error two, appellants contend the evidence conclusively proved the absence of a mutual mistake. We will address these points together.

In reviewing a legal sufficiency challenge, the court may consider only the evidence and inferences tending to support the finding, disregarding all contrary evidence and inferences. Davis v. City of San Antonio, 752 S.W.2d 518, 522 (Tex.1988). If there is any evidence of probative force, we must uphold the finding. Sherman v. First Nat’l Bank, 760 S.W.2d 240, 242 (Tex.1988).

In reviewing a challenge to the factual sufficiency of the evidence, the court must examine all of the evidence. Lofton v. Texas Brine Corp., 720 S.W.2d 804, 805 (Tex.1986). The court will set aside the verdict only if the evidence is so weak or the finding is so against the great weight and preponderance of the evidence that it is clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986).

The elements of proof for mutual mistake are:

(1) an original agreement, and
*553 (2) a mutual mistake, made after the original agreement, in reducing the original agreement to writing.

Cherokee Water Co. v. Forderhause, 741 S.W.2d 377, 379 (Tex.1988) (emphasis in original). Once a prior agreement is established, equity may reform the written instrument to conform to this prior agreement, but cannot create an agreement not made by the parties. Continental Oil Co. v. Doornbos, 402 S.W.2d 879, 883 (Tex.1966). Knowledge by one party of the other party’s mistake regarding the expression of the contract is equivalent to mutual mistake. Cambridge Co., Inc. v. Williams, 602 S.W.2d 306, 308 (Tex.Civ.App.—Texarkana 1980), aff'd, 615 S.W.2d 172 (Tex.1981).

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