Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg
On appeal from the 404th District Court of Cameron County, Texas.
Before Justices Rodriguez, Garza and Perkes
DORI CONTRERAS GARZA, Justice
This case involves loans between acquaintances to finance a failed real estate venture. A jury found that appellant Samuel Crego breached two separate loan agreements: one, a promissory note with appellee Guillermo Lash, and two, an unwritten agreement with appellee John Hoysick. After the jury awarded damages and attorneys' fees, the trial court rendered judgment against Crego in favor of Lash for $52, 584.25 and in favor of Hoysick for $50, 000.00. The trial court also awarded appellees $33, 745.00 in attorneys' fees plus costs, post-judgment interest, and conditional appellate attorneys' fees. By four issues, Crego argues that: (1) the trial court erred by conditioning his right to appeal on the posting of a bond in the amount of the judgment; (2) Lash and Hoysick's claims were barred by limitations; (3) alternatively, the trial court erred in refusing to submit the limitations issue to the jury; and (4) if either damage award is reversed, the attorneys' fees award should be reversed and remanded. We affirm.
Crego, Lash, Hoysick, Ralph Burks, and Carlos Sarmiento met through their employment with Trico in Brownsville, Texas. In March 2004, Crego and Burks formed a management company, Crego and Burks Management Group, LLC ("the management company"), for the purpose of developing and managing real estate ventures.
On July 1, 2004, Lash loaned Crego and Burks $80, 000. The loan was evidenced by a promissory note, which provided for repayment in monthly installments over six months, with the final payment due January 1, 2005. The note was secured by real property located in Harlingen, Texas. Under the note, for the first six months, interest was 3.3% per month on the first $50, 000 and 1.6% on the remaining $30, 000. The total principal and interest due on January 1, 2005 was $93, 000.
It is undisputed that the loan was not repaid in January 2005. An invoice dated July 18, 2006 was admitted at trial. The invoice, from Lash to the management company, states that it is for the "[investment [l]oan on 7/1/05." It further states, "Principal amount: $80, 000.00 @ 14% per annum simple interest" and "Balloon Date 6/31/06." The "Amount" column shows $80, 000.00 plus $11, 200.00 in interest, for a total of $91, 200.00. Crego testified that the $91, 200.00 amount "was an agreed upon amount" between himself, Burks, and Lash. Crego testified that Lash was paid the $91, 200.00 on October 31, 2006. Crego admitted that the amount repaid to Lash was less than the amount due under the terms of the note, but stated that Lash agreed to the amount in a "spirit of cooperation."
In August 2004, Hoysick and Sarmiento each provided the management company with $50, 000 to facilitate the purchase and resale or development of an eight-acre property in Weslaco, Texas known as "Westgate Loop." The terms of these transactions were not reduced to writing. It is undisputed that the $100, 000 was used as "collateral" for a $575, 000 bank loan to the management company for the purchase and development of Westgate Loop. According to Crego, the unwritten agreement was that Burks, Hoysick, and Sarmiento would each receive 22.5% of the profits from the resale or development project, with Crego receiving 32.5% of the profits. Crego testified that eight months later, around April 2005, the bank loaned the management company $425, 000 to purchase the Westgate Loop property. Six or eight months after that, Sarmiento decided to withdraw from the venture. Crego testified that he returned Sarmiento's $50, 000. The three remaining parties agreed to split the profits with each receiving thirty percent, and Crego receiving an additional ten percent.
Sarmiento testified that he loaned the management company $50, 000. According to Sarmiento, the parties agreed that these funds, along with the $50, 000 loaned by Hoysick, would remain untouched at the bank, the land would be resold at a substantial profit, and each would receive twenty-five percent of the profit from the resale. The agreed-upon interest on the loan was a percentage of profits upon resale. Later, after Crego began working for the management company full time, the percentage of profit changed to twenty percent each for Sarmiento, Lash, and Burks, and forty percent for Crego. Crego told Sarmiento that he expected to "flip" the property quickly because another buyer had already made an offer. After the management company turned down several offers and decided to develop the property, Sarmiento decided to withdraw from the venture and asked for the return of his $50, 000. Over the course of two years, Sarmiento was repaid the $50, 000, but was not repaid any interest. Sarmiento testified that when the plans changed from resale to development of the property, he felt that he was being invited to invest and decided not to do so.
Hoysick testified that he loaned the management company $50, 000 in August 2004. The agreement was that when the property was resold, he would receive his $50, 000 plus a percentage of the profits from the resale. Initially, the percentage of profit was twenty-five percent; later, the percentage changed to twenty-two-and-a-half percent, and still later, to twenty percent. Hoysick stated that he suggested to Crego that he also wanted to withdraw, but Crego said he did not have the funds to repay him. Crego told Hoysick that if he withdrew, he would not retain any interest in the project. Hoysick said that Crego offered to pay him fourteen percent interest on repayment of the $50, 000 if Hoysick withdrew. Hoysick was not ever repaid any amount. In January 2007, Crego told Hoysick that the bank had released the funds held in security. Hoysick gave Crego a transfer account number, but Crego refused to provide any repayment. Crego told Hoysick that the funds were used for other management company projects. Hoysick stated that he did not invest in Westgate Loop and did not know that his money was at risk.
On cross-examination, Hoysick was asked about a July 9, 2006 email that he sent to Crego in which he asked "to discuss the status of the apartment project" and "to review something in writing to document my relationship/investment with Crego and Burks." Hoysick stated that if he wanted out of the project, "there was one set of terms, " but if the land sold or apartments were built, he would receive his original $50, 000 plus a percentage of the profits. He stated that "[tjhere was no specific date" when his money was to be returned; he would be repaid when either the land was sold or the apartment complex was built and sold. Hoysick expected to receive the return of his $50, 000 plus a percentage of the profits within six months. If he withdrew from the project, he would not receive any profit, but would still receive fourteen percent interest on the loan. Hoysick stated that in January 2007, when the bank released the collateral funds, he should have been repaid.
In July 2007, Hoysick sent Crego an email in which he inquired about: (1) the "status of the subject project"; (2) the "status of bringing in additional investor(s)"; and (3) the "status of returning [his] initial $50k as originally agreed upon and now 6 months past due."
After the recession in 2008, Crego was unable to obtain refinancing from the bank for the development. Eventually, he sold the property for the amount owed to the bank, approximately $520, 000. Crego did not tell Hoysick when he sold the property. Eventually, in August 2009, Hoysick learned that the property had been sold when Burks filed for bankruptcy.
Lash testified that he loaned the management company $80, 000 in July 2004. The repayment date on the loan was January 1, 2005. Lash testified that Crego drafted the promissory note. The note sets forth interest in the amount of $2, 166.67 per month. When the note became due in January 2005, Crego said he was unable to repay the note. Crego repaid Lash $91, 200 twenty-seven months later. Lash stated that the invoice showing ...