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Christerson v. Speer

Court of Appeals of Texas, First District

April 27, 2017

JERRY CHRISTERSON AND MYRTLE CHRISTERSON, Appellants
v.
GORDON W. SPEER, LENORA SPEER, KEVIN SPEER, AND ED PICKETT, Appellees

         On Appeal from the 344th District Court Chambers County, Texas Trial Court Cause No. CV29050

          Panel consists of Justices Keyes, Bland, and Huddle.

          MEMORANDUM OPINION

          Jane Bland Justice.

         In this appeal from a summary judgment, we determine whether venue was proper and whether the statute of limitations bars the buyers' claims for fraud and deceptive trade practices brought against the sellers, who financed the buyers' purchase of their home. The buyers, Jerry and Myrtle Christerson, bought the home from the sellers, Gordon and Lenora Speer, in 2000. The Speers loaned the Christersons $250, 000 to finance the Christersons' purchase. In 2014, the Speers notified the Christersons that they owed outstanding interest on the note and began foreclosure proceedings. Before the foreclosure took place, the Christersons sold the home, and they used the proceeds to pay off the outstanding debt.

         Later that year, the Christersons sued the Speers in Harris County District Court for fraud, breach of contract, and violations of the Texas Deceptive Trade Practices Act, the federal Truth in Lending Act, and the federal Racketeer Influenced and Corrupt Organizations Act. The Christersons also named Kevin Speer, who is the Speers' son and who acted as the real estate broker in the sale, and Ed Pickett, the Christerson's attorney, as defendants.

         Because the property is located in Chambers County, and the sale took place in Chambers County, the seller parties moved to change venue from Harris County to Chambers County. The Harris County District Court granted the motion and transferred the case to Chambers County. After proceeding in Chambers County, the seller parties moved for summary judgment, which the trial court granted as to all of the Christersons' claims.

         On appeal, the Christersons challenge the transfer of venue and contend that fact issues preclude summary judgment. Because we conclude that the trial court properly transferred venue and that the Christersons' claims against the seller parties are barred by the applicable statutes of limitations, we affirm.

         BACKGROUND

         Kevin Speer, a licensed real estate broker and agent, agreed to help his parents sell their home. In early 2000, the Christersons saw a "For Sale" sign in front of the Speers' home and called Kevin, who was the listed real estate broker.

         Jerry Christerson met with Kevin and Gordon Speer regarding the property. Jerry told the Speers that he could afford to buy the property if he could pay $1, 450 per month for 30 years. The Speers responded that they would try to arrange financing according to the Christersons' wishes.

         The parties ultimately agreed on a sales price of $275, 000. The Speers loaned $250, 000-all but $25, 000 of the sales price-to the Christersons as seller financing. Kevin drafted an earnest money contract, using the form required by the Texas Real Estate Commission (TREC). In a seller financing addendum, the earnest money contract included the terms and conditions for the loan.

         Section 4D of the earnest money contract describes the financing agreement as "[a] promissory note from Buyer to Seller of $250, 000.00, bearing 8.000% interest per annum, secured by vendor's and deed of trust liens, in accordance with the terms and conditions set forth in the attached TREC seller financing addendum." The seller financing addendum declares that the "Note shall be payable, [i]n monthly installments of $1, 450.00 including interest beginning 30 days after the date of the Note and continuing at monthly intervals thereafter for 30 years when the entire balance of the Note shall be due and payable."

         A $250, 000 note at 8% interest per annum is not discharged with monthly payments of $1, 450 over 30 years. Under the "special provisions" section, the earnest money contract states: "NOTICE: The Seller Financed Note will negatively amortize based on a monthly payment of $1, 450."

         After the parties signed the earnest money contract, the Speers asked their lawyer, Ed Pickett, to draft the closing documents, including a deed of trust and a credit sale disclosure. The deed of trust, executed on May 13, 2000, provided for monthly payments of $1, 450 and interim catch-up payments every 10 years:

A. 359 equal consecutive payments of $1, 450 for 359 months;
B. A payment due on July 1, 2010 for all accrued, unpaid interest to date "together with sufficient payment of principal to reduce the unpaid principal balance on such date to that which would have existed had this note been amortized with timely full amortization monthly installments of $1834.41 per month;"
C. A payment due on July 1, 2020 for all accrued, unpaid interest to date, "together with sufficient payment of principal to reduce the unpaid principal balance on such date to that which would have existed had this note been amortized with timely full amortization monthly installments of $1834.41 per month."
D. All unpaid, accrued interest and unpaid principal shall be due and payable on the final maturity date of April 1, 2030.

         The accompanying credit sale disclosure notified the Christersons of the 8% annual percentage rate and the total finance charge of $410, 387.60. It stated that the payment schedule was $1, 450 for 359 months, due on the first day of each month.

         The Christersons and the Speers closed the real estate transaction on May 16, 2000.

         Following the closing, the Christersons began making timely monthly payments of $1, 450. In August of 2013, the Speers notified the Christersons that a catch-up payment of approximately $46, 000 in unpaid principal and interest was due on the loan. The Christersons did not pay that amount, but continued to make the regular $1, 450 monthly payments.

         In January of 2014, the Speers began refusing the Christersons' monthly payments and initiated foreclosure proceedings. The Christersons sold the home before foreclosure could occur and with the proceeds from the sale, they paid the amount outstanding on the Speers' loan.

         The Christersons seek recovery for the Speers' alleged fraud and violations of consumer protection acts. The gravamen of the Christersens' complaint is that the Speers represented that $1, 450 would cover the accrued interest and principal payments ...


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