Stan Dedmon v. Gordon G. Gray

Opinion filed March 9, 2006 Opinion filed March 9, 2006 In The Eleventh Court of Appeals __________ No. 11-04-00271-CV __________ STAN DEDMON, Appellant V. GORDON G. GRAY, Appellee On Appeal from the 132nd District Court Scurry County, Texas Trial Court Cause No. 21,748 M E M O R A N D U M   O P I N I O N This appeal arises from a bench trial in a suit to collect on a guaranty agreement. Central Utilities Production Corporation (Central Utilities Production) entered into an agreement to purchase oil and gas properties from Gordon G. Gray for a total price of $135,000. Central Utilities Production made a down payment of $10,000 and executed a promissory note in favor of Gray in the amount of $125,000. Central Utilities Production=s president Stan Dedmon executed a guaranty agreement in connection with the $125,000 promissory note. The guaranty agreement contained the following provisions with respect to Dedmon=s personal guaranty for the promissory note: 1.00 Unconditional Guarantee. I, absolutely and unconditionally, guarantee to you the payment and performance of Central Utilities Production Corporation=s obligations under the Assignment and Bill of Sale, including all renewals, extensions, refinancing and modifications of the Promissory Note and Deed of Trust, Mortgage, Security Agreement, Assignment of Production and Financing Statement dated July 1, 2001. 2.00 Guarantee of Payment and Performance. This is a primary, irrevocable, and unconditional guarantee of payment and performance and not of collection and shall be independent of Central Utilities Production Corporation=s obligations under the Promissory Note and Deed of Trust, Mortgage, Security Agreement, Assignment of Production and Financing Statement. 4.00 Guaranty Includes Modifications and Extensions. This guaranty shall remain in effect regardless of any modification or extension of the Promissory Note and Deed of Trust, Mortgage, Security Agreement, Assignment of Production and Financing Statement. (emphasis in original) Gray filed the underlying action against Dedmon to collect on the guaranty agreement. Gray alleged that Central Utilities Production had defaulted on the payment of the promissory note and that the entire principal balance of $125,000 remained due on the note. Dedmon filed a general denial in the collection suit.[1] Sitting as the fact-finder, the trial court entered judgment against Dedmon in the amount of $125,000, plus interest, court costs, and attorney=s fees. Dedmon attacks the trial court=s judgment in a single issue. We affirm. Standard of Review The record reflects that no findings of fact or conclusions of law were requested or filed. Therefore, it is implied that the trial court made all the findings necessary to support the judgment. Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990). In determining whether some evidence supports the judgment and the implied findings of fact, it is proper to consider only the evidence most favorable to the issue and to disregard entirely that evidence which is opposed to it or contradictory in its nature. Id. The judgment must be affirmed if it can be upheld on any legal theory that finds support in the evidence. Id. Guaranty Agreements A guaranty creates a secondary obligation whereby the guarantor promises to answer for the debt of another, and a creditor may call upon the guarantor to perform once the primary obligor has failed to perform. Republic Nat=l Bank v. Northwest Nat=l Bank of Fort Worth, 578 S.W.2d 109, 114 (Tex. 1978). To recover on a note through a guaranty, the plaintiff must show (1) the existence of the note and guaranty; (2) the debtor signed the guaranty; (3) the plaintiff legally owned or held the guaranty; and (4) that a certain balance remains due and owing. First Gibraltar Bank, FSB v. Farley, 895 S.W.2d 425, 427 (Tex. App.CSan Antonio 1995, writ denied). Analysis Dedmon characterizes his sole issue on appeal as follows: AThe court committed erred [sic] in finding the appellant was in default of the guaranty agreement.@ It appears that Dedmon is arguing that the trial court erred by not finding that his liability under the guaranty agreement was extinguished as a result of a document executed by Gray in Central Utilities Production=s Chapter 11 bankruptcy proceedings. Dedmon is essentially arguing that the promissory note which underlies the guaranty agreement was modified. Modification and novation are contractual defenses which must be affirmatively pleaded.[2] See Tex. R. Civ. P. 94; Honeycutt v. Billingsley, 992 S.W.2d 570, 576‑77 (Tex. App.CHouston [1st Dist.] 1999, pet. denied)(novation); Metrocon Const. Co. v. Gregory Const. Co., 663 S.W.2d 460, 463 (Tex. App.CDallas 1983, writ ref=d n.r.e.)(modification). Dedmon did not plead any defensive theories as affirmative defenses. A party asserting an affirmative defense bears the burden of pleading and proving its elements. See Welch v. Hrabar, 110 S.W.3d 601, 606 (Tex. App.C Houston [14th Dist.] 2003, pet. denied). If an affirmative defense is not pleaded or tried by consent, it is waived.[3] RE/MAX of Texas, Inc. v. Katar Corp., 961 S.W.2d 324, 327-28 (Tex. App.CHouston [1st Dist.] 1997, pet. denied). Accordingly, Dedmon waived the affirmative defenses of modification, novation, and material alteration. Furthermore, the guaranty agreement specifically provided that it remained enforceable even if the promissory note was subsequently modified. This consent provision precluded Dedmon from asserting the defense of material alteration. See FDIC v. Attayi, 745 S.W.2d 939, 944 (Tex. App.CHouston [1st Dist.] 1988, no writ). Gray testified that the principal indebtedness of $125,000 remained due and owing on the promissory note at the time of trial. Gray further testified that he received $10,000 from the agreement executed in connection with Central Utilities Production=s bankruptcy. The agreement provided that payments received pursuant to it were to be applied by Gray first to his costs of collection and attorney=s fees, then to accrued and unpaid interest, and finally to principal. Gray testified that the attorney=s fees he incurred in the bankruptcy proceeding amounted to approximately $10,000. Accordingly, the evidence supported the trial court=s implied finding that the promissory note remained unpaid. Dedmon=s sole appellate issue is overruled. This Court=s Ruling The judgment of the trial court is affirmed. TERRY McCALL JUSTICE March 9, 2006 Panel consists of: Wright, C.J., and McCall, J., and Strange, J. [1]Dedmon additionally filed a counterclaim against Gray seeking to set aside the original transaction. Gray filed a plea in abatement wherein he argued that Dedmon lacked capacity to assert the counterclaim in his individual capacity. The trial court initially granted Gray=s plea in abatement at trial. The trial court ultimately denied the counterclaim at the conclusion of the trial. Dedmon does not challenge the trial court=s rulings on the counterclaim. [2]Material alteration is recognized as an affirmative defense in suits to enforce guaranty agreements. See Austin Hardwoods, Inc. v. Vanden Berghe, 917 S.W.2d 320, 325-26 (Tex. App.CEl Paso 1995, writ denied). [3]The record does not reflect that the matters of novation or modification were tried by consent. The trial court sustained Gray=s objection to the admission of the bankruptcy agreement to the extent Dedmon sought to establish a novation of the original promissory note.