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Smith v. Barnhart

Court of Appeals of Texas, First District

April 2, 2019

ASHLEY SMITH, Appellant
v.
STEVEN BARNHART, Appellee

          On Appeal from County Civil Court at Law No. 3 Harris County, Texas Trial Court Case No. 1092638

          Panel consists of Justices Keyes, Higley, and Landau.

          OPINION

          LAURA CARTER HIGLEY JUSTICE

         This is a breach-of-contract case. Steven Barnhart sued his former mistress, Ashley Smith, to recover sums of money he gave her over the course of their affair. Barnhart alleged that the sums were loans, while Smith alleged that they were gifts. The case was tried to the bench, and the trial court rendered judgment for Barnhart, finding that Barnhart made a series of zero-interest loans to Smith; that each time Barnhart made a loan, Smith promised to pay him back; and that Smith initially complied with their agreement by making payments but later breached the agreement by refusing to continue making payments. On appeal, Smith contends that there is legally insufficient evidence that the contract (1) had clear and definite terms and (2) was supported by adequate consideration. We affirm.

         Background

         Barnhart and Smith both work in the banking industry. They met in August 2011, when Barnhart began working at the same bank as Smith. They quickly developed a personal relationship, and, by the end of the year, they were having an affair.

         The affair lasted for roughly three years, from December 2011 until December 2014. During this time, Barnhart gave Smith sums of money to pay for various expenses. Most notably, Barnhart gave Smith money to pay off her high-interest credit card debt; money to terminate her auto lease; money to pay her attorney in an unrelated legal matter; money to pay for moving expenses; money to pay for an antique necklace; and money to reimburse her for other money that was stolen from her.

         As he continued to give Smith money, Barnhart would periodically provide her with documentation of the amount that he had given her and the amount that she owed him. The documentation reflects that Barnhart and Smith understood that some of the sums of money were gifts, which Smith did not have to repay, while others were loans, which Smith did have to repay, but at zero percent interest.

         On August 30, 2013, Barnhart sent Smith an email with the subject line "Loans." In the email, Barnhart explained that he was providing, in response to Smith's request, a summary of the amount of money he had loaned her up to that date. He wrote that the total amount was $47, 050, specifying that the amount included $6, 500 for attorney's fees that he had not yet given her, but did not include $15, 000 for moving expenses, which Smith did not have to repay. He then itemized the total amount, listing 20 separate sums of money that he had loaned to Smith. The sums were divided into four categories: (1) "Short term/payment plan," (2) "Long term," (3) "To Give," and (4) "Home."

         The first category, "Short term/payment plan," consisted of three sums of money, totaling $20, 000, that Barnhart had loaned to Smith to pay off her credit card debt: (1) $7, 500 loaned on August 19, 2013; (2) $7, 800 loaned on August 26, 2013;[1] and (3) $4, 700 loaned on August 29, 2013. Barnhart testified that he categorized these as "short term" loans with a "payment plan" because Smith had initially agreed to begin paying them off immediately at a rate of $1, 000 a month, which was roughly the amount she had been paying on her credit cards.

         The second category, "Long term," consisted of 16 sums of money, totaling $20, 550, that Barnhart had loaned to Smith to pay for her attorney's fees and various other expenses.[2] Barnhart testified that he categorized these as "long term" loans because he knew that Smith would not be able to begin paying them back immediately and wanted to segregate them from the loans to pay off Smith's credit card debt, which he expected her to begin repaying immediately.

         The third category, "To Give," consisted of a single $6, 500 loan, which represented the money Barnhart had promised to loan to Smith to pay her remaining attorney's fees.

         And the fourth category, "Home," consisted of a single $15, 000 gift to pay for Smith's moving expenses.

         Four days later, on September 3, 2013, Barnhart sent Smith a follow-up email on the same chain. Barnhart notified Smith that he had given her the additional $6, 500 loan to pay for her remaining attorney's fees. He stated that they could "work out" a "payment plan" that did not "stretch" her "too much" on the "entire amount" of $47, 050. Smith's response was curt: "OMG." Barnhart reminded Smith that the amount he had loaned her did not include the $15, 000 gift for moving expenses. Smith then observed that the total amount of money Barnhart had given her (loans and gifts) was over $60, 000. Barnhart confirmed that the total amount was roughly $62, 000, and Smith responded: "OMG-I am abt to vom." Barnhart tried to reassure Smith that the amount of debt was manageable, reminding her that a large portion of the loans were to "pay off existing credit card debt" and that he was not charging her any interest.

         Over a month later, on October 10, 2013, Barnhart sent another email on the same chain, but with a new subject line: "Loans/Credit Cards." In the email, Barnhart informed Smith that he had loaned her an additional $5, 000 to pay for additional attorney's fees, bringing the total amount to $67, 000, including the $15, 000 gift.

         Two-and-a-half weeks later, on October 28, 2013, Barnhart's wife, Janna Barnhart, discovered that Barnhart had been having an affair with Smith. She also discovered that Barnhart had been giving Smith money.

         Mrs. Barnhart reviewed the records for their joint banking account and found six checks that Barnhart had written to Smith for loans:

(1) a check for $7, 500 written on August 19, 2013, representing the first loan for credit card debt referenced in Barnhart's August 30 email to Smith;
(2) a check for $7, 800 written on August 26, 2013, representing the second loan for credit card debt referenced in Barnhart's August 30 email to Smith;
(3) a check for $4, 700 written on August 29, 2013, representing the third loan for credit card debt referenced in Barnhart's August 30 email to Smith;
(4) a check for $6, 500 written on September 3, 2013, representing the loan for attorney's fees referenced in Barnhart's email to Smith from that same date;
(5) a check for $2, 500 written on October 23, 2013, representing the loan for attorney's fees referenced in Barnhart's October 10 email to Smith; and
(6) a check for $5, 000 written on October 30, 2013.

         Mrs. Barnhart also found checks that Barnhart had written to Smith for unspecified purposes. And she found a check for $15, 000 written to Barnhart's stepmother, representing the $15, 000 gift Barnhart made to Smith for moving expenses.

         Later that November, sometime before Thanksgiving, Mrs. Barnhart reached out to Smith, and they met each other for lunch. At lunch, Mrs. Barnhart and Smith discussed the money that Smith owed the Barnharts, and Smith indicated that she would begin paying them back once her finances permitted.

         After the lunch, on November 27, 2013, Barnhart sent Smith another email. The subject line was "Loans / Credit Card." In the email, Barnhart summarized the amount of money he had given Smith up to that date. He listed five additional sums of money that he had loaned to her.[3] He then added those sums to the total amount he had given her, arriving at a total of $75, 985. And then he subtracted the $15, 000 he had given her as a gift, arriving at a total of $59, 985. He ended by emphasizing that there was "no rush" to repay him and that he was "just documenting" the loans.

         About a week later, on December 2, 2013, Smith sent Mrs. Barnhart an email to update her on Smith's finances and ability to begin repaying the loans. Smith wrote:

I just wanted to let you know that I finally found out that we should be getting our bonus payout by the end of February at the latest. I have 3 deals I am trying to close before year end (fingers crossed) and this will ensure that I will have the ability to pay back a large portion, if not all of what I owe you. I will for sure keep you posted, as I will be able to shed more light towards the end of the year!

         The next day, on December 3, 2013, Mrs. Barnhart responded to Smith's email: "I appreciate the update and look forward to hearing from you in February." Several months passed, but Smith did not update Mrs. Barnhart on whether any of her deals had closed. Nor did she make any payments to the Barnharts.

         On April 1 2014, Mrs. Barnhart sent Smith an email to "check[] on the status of [Smith's] loan repayment." In the email, Mrs. Barnhart "suggested that [Smith] begin a monthly payment" in an amount "left up to [her]." Mrs. Barnhart also asked Smith to provide her with the amount Smith believed she still owed the Barnharts. Mrs. Barnhart explained that she wanted to compare that amount to the amount reflected in the Barnharts' records. Smith responded that her records showed that she still owed $28, 000. (It is unclear how Smith arrived at $28, 000; the amount is not supported by the record evidence.) Smith further responded that she would make payments as quickly as she could.

         Smith did not make any payments in 2014. She did, however, make certain payments in 2015. Specifically, between April 21 and August 24, she made eight payments, ...


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