Court of Appeals of Texas, Second District, Fort Worth
STRIPE-A-ZONE, INC. APPELLANT
M.J. SCOTCH FAMILY LIMITED PARTNERSHIP APPELLEE
THE 352ND DISTRICT COURT OF TARRANT COUNTY TRIAL COURT NO.
LIVINGSTON, C.J.; WALKER and MEIER, JJ.
MEMORANDUM OPINION 
LIVINGSTON CHIEF JUSTICE
appeal arises from a bench trial that concerned a claim for
breach of an oral contract. Appellant Stripe-A-Zone, Inc.
(Stripe-A-Zone) appeals the trial court's judgment
awarding damages to appellee M.J. Scotch Family Limited
Partnership (Scotch). In four issues, Stripe-A-Zone contends
that the evidence is insufficient to prove the formation of a
contract, that the evidence shows that any such contract was
subject to the statute of frauds, and that evidence precludes
the application of any exceptions to the statute of frauds.
to Stripe-A-Zone's president David Sargent, in 2008,
Robert Taccia, with whom Sargent had prior business dealings,
arranged a transfer of money from Scotch to Sargent in his
personal capacity (not in his capacity as Stripe-A-Zone's
president). Scotch sent $212,000 through a wire transfer to
Stripe-A-Zone's bank account (rather than to
Sargent's personal account). Taccia gave
Stripe-A-Zone's account number to Scotch so that Scotch
could complete the transfer. Sargent testified that when he
"received the loan it was to [him] and [he] put it into
[his] company." He explained, "I didn't need
personal money so I wired [the loan] to Stripe-A-Zone instead
of my personal account." He testified, "It was not
Stripe-A-Zone's money, but that's where it
went." Later, he stated, "[T]he money was loaned to
me and then I gave it to the company."
also testified that he did not know of Scotch at the time and
did not meet the Scotch family until about six months after
the transaction occurred. He explained that he believed that
he had an agreement with Taccia and that Taccia had a
separate agreement with Scotch. He did not view the
transaction as a loan but instead viewed the money he had
received as funds that "Taccia had owed [him] over a
period of several years on . . . manufacturing that we had
done together[,] and it was his way of repaying me for the
money they paid him."
Sargent personally or Taccia-eventually began repaying the
$212,000 to Scotch at a rate of $4,000 per month. The record
contains copies of several checks from Stripe-A-Zone's
operating account to Scotch for that amount. Stripe-A-Zone
sent the last $4,000 payment to Scotch in September 2012.
According to Sargent, he stopped making payments at that time
because "Taccia told [him] that he had done some
business with [Scotch]" and that Scotch owed Taccia
money. In all, Stripe-A-Zone repaid Scotch at least $96,000
(twenty-four payments of $4,000 each) of the $212,000 that
Scotch originally transferred to Stripe-A-Zone.
testimony of Michael Scotch, Scotch's president,
establishes that he viewed the transaction differently than
Sargent did. Michael testified that in 2008, Scotch sent
Stripe-A-Zone money as a loan and expected to be repaid with
interest. He expressed that he viewed the loan as an
investment and that the money was given to "Sargent in
care of Stripe-A-Zone." In October 2012, when
Stripe-A-Zone stopped repaying Scotch, Michael sent a letter
to Sargent that stated in part,
In January 2008, [Scotch] loaned your company . . . monies in
the amount of $212,000.00. Your company started making
payments in the amount of $4,000.00 back to [Scotch] in
October 2010. . . . You were also instructed by Alex Tandy,
attorney, to directly mail the payments to [Scotch]
. . . .
. . . The October 2012 . . . payment is now in default. . . .
If the October 2012 payment is not received within . . . 10
days, then you will force [Scotch] to take other actions
against you and your company.
conceded that he had no documents establishing an explicit
loan agreement between Stripe-A-Zone and Scotch. He
acknowledged that repayment of the $212,000 at $4,000 per
month would take "more than a year" to complete.
Scotch, Scotch's vice president, testified that Scotch
made a loan "to Stripe-A-Zone through
[Sargent]." She expressed her understanding that the
loan carried a 9% interest rate and would be "paid back
at any time that [Scotch] requested it" through either
payments or a lump sum. She recognized that the parties never
executed a written contract for the loan, but she stated that
Taccia told her that Sargent "[was] good for" the
money. Tamara stated that the parties discussed that Scotch
could be repaid in less than a year and at any time Scotch
asked for the money. Tamara testified that Sargent and Taccia
knew each other well and had worked on many business deals
together. Contrary to Sargent's testimony, Tamara
testified that she met Sargent before agreeing to loan money
April 2014, Scotch sued Stripe-A-Zone. Scotch alleged that
Stripe-A-Zone had borrowed money from Scotch for business
purposes and that Stripe-A-Zone had repaid only some of the
money. Scotch asserted that it had demanded Stripe-A-Zone to
pay the rest of the amount but that Stripe-A-Zone had
refused. Thus, Scotch brought several causes of action,
including breach of contract. Scotch sought damages for the
unpaid balance and also asked for an award of attorney's
fees. Stripe-A-Zone answered the suit with a general denial
and by pleading that the statute of frauds precluded
bench trial, the trial court signed a judgment awarding
Scotch $116,000 ($212,000 less the repaid $96,000) in
compensatory damages and $15,000 in attorney's fees. The
court entered the following findings of fact and conclusions
1. The presence of sufficient circumstantial evidence
necessary to find an implied agreement is a question of fact.
The actions of the parties, to wit the payment of $212,000 by
[Scotch] coupled with $96,000 in payments by Stripe-A-Zone,
provides sufficient basis to find an implied-in-fact contract
existed between the parties. Further there is sufficient
evidence to find the funds were a loan from [Scotch] to
[Stripe-A-Zone]. There was no written agreement signed by the
2. The weight of the evidence shows that the full amount of
$212,000 was delivered from [Scotch's] bank account to
[Stripe-A-Zone's] account on January 29, 2008 via a wire
transfer to a bank account number supplied by
[Stripe-A-Zone's] agent Robert Taccia.
3. In the latter part of 2008 [Scotch] made demand on
[Stripe-A-Zone's] agent Robert Taccia for full payment of
the loan. This demand was not honored.
4. The weight of the evidence shows [Stripe-A-Zone] partially
performed [its] repayment obligations. [Stripe-A-Zone] began
repayment in October, 2010. Payments consisted of checks in
the amount of $4,000, drawn on [Stripe-A-Zone's]
corporate operating account, addressed to [Scotch] as the
payee, and delivered to the parties' mutual attorney Alex
R. Tandy. [Stripe-A-Zone] paid its last check in September
2012. In total ...