                          NUMBER 13-12-00100-CV

                          COURT OF APPEALS

                THIRTEENTH DISTRICT OF TEXAS

                  CORPUS CHRISTI – EDINBURG

SAMUEL CREGO,                                                          Appellant,

                                        v.

GUILLERMO LASH &
JOHN HOYSICK,                                                          Appellees.


                 On appeal from the 404th District Court of
                        Cameron County, Texas.


                       MEMORANDUM OPINION
               Before Justices Rodriguez, Garza and Perkes
                 Memorandum Opinion by Justice Garza
      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.

                                       I. BACKGROUND

       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.1

       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


       1
          Crego testified that “Crego and Burks Management Group, LLC” was later renamed Westgate
Village Homes, LLC.
                                               2
July 18, 2006 was admitted at trial.               The invoice, from Lash to the management

company, states that it is for the “[i]nvestment [l]oan on 7/1/05.”2                    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.”3 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


       2
           Crego admitted that July 1, 2005 was a year later than the actual date of the loan, July 1, 2004.
       3
         Crego denies that these funds were loans; rather, he contends they were “investments” in the
development project. Crego testified that there was no date certain when Hoysick would receive a return
on his $50,000.
                                                      3
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
                                             4
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 “[t]here 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.
                                             5
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 “investment/loan” on July 1, 2005 was prepared by Crego, and the

actual date of the loan was July 2004.

       Lash testified that he loaned Crego an additional $50,000 in January 2006. 4

Lash made the second loan, even though he had not been repaid for the first, because

he believed that if the management company failed, he may “lose everything.” At the

time of the second loan, Lash and Crego agreed that interest on the remaining balance

of the $80,000 would be fourteen percent.                    Lash learned that Burks had left the

management company when he received notice of Burks’s bankruptcy filing.

       Lash stated that Crego gave him the invoice and the $91,200 payment in

November 2006. Lash stated that he asked for the rest of what he was owed, but

Crego said he would have to wait for the rest of the money. Lash said the fourteen

percent reflected on the invoice came from Crego and they did not discuss it.

                                           II. POSTING OF BOND

       By his first issue, Crego contends the trial court erred by including language in

the judgment conditioning the appeal on Crego posting a bond in the amount of the

judgment. Appellees respond that: (1) Crego failed to preserve any issue because he

       4
           The jury did not find that Lash made the $50,000 loan, and it is not at issue in this appeal.
                                                       6
did not object to the judgment or move to modify it; and (2) the bond provision should be

construed to set the amount of any supersedeas bond under section 52.006 of the civil

practice and remedies code. See TEX. CIV. PRAC. & REM. CODE ANN. § 52.006 (West

2008); TEX. R. APP. P. 24.

        In January 2013, this Court denied Crego’s motion to review the trial court’s order

conditioning the appeal on the posting of a bond. In our January 11, 2013 order, we

rejected Crego’s argument that the trial court intended the subject bond to be a

supersedeas bond.

        In any event, we conclude that the issue is now moot. Crego has not posted a

bond and has not been prevented from appealing the judgment. Appellees have not

requested dismissal of the appeal. We overrule Crego’s first issue.

                                            III. LIMITATIONS

        By his second issue, Crego contends that Lash’s and Hoysick’s claims accrued

more than four years prior to their filing of the lawsuit and are therefore barred by

limitations. See TEX. CIV. PRAC. & REM. CODE ANN. § 16.035(e) (West 2002) (providing

that, if a note payable in installments is secured by a real property lien, the four-year

limitations period begins to run on maturity date of last installment). Appellees respond

that their claims are not barred by limitations because the claims are governed by the

six-year statute of limitations pursuant to section 3.118 of the Texas Business and

Commerce Code. See TEX. BUS. & COM. CODE ANN. § 3.118 (West 2002).5


        5
            In his reply brief, Crego argues that Lash should not be permitted to argue on appeal that the
six-year statute of limitations applies because he failed to make this argument to the trial court. We
disagree. Our review of the record shows that the statute of limitations issue was raised only very briefly
at trial, without argument or citation to any statute, and without reference to a four-year or six-year
limitations period. After the close of evidence, during a discussion of the jury charge, the trial court
denied Crego’s request for a jury question on the statute of frauds. Crego’s counsel then stated, “[t]hen if
it is performable within one year, then—then I think we have a statute of limitations argument, because all
                                                     7
        The statute of limitations is an affirmative defense, and a defendant bears the

burden to plead, prove, and secure findings to support its affirmative defense. Holland

v. Lovelace, 352 S.W.3d 777, 788 (Tex. App.—Dallas 2011, pet. denied). This burden

includes establishing when the plaintiff’s cause of action accrued. Id. If the jury is not

asked to determine when the cause of action accrued for purposes of supporting a

limitations defense, the defense is waived unless the date of accrual was conclusively

established under the evidence. Id. Here, Crego did not obtain jury findings regarding

the accrual dates for Lash’s and Hoysick’s claims. See id. Consequently, Crego must

demonstrate that the accrual dates of Lash’s and Hoysick’s claims were conclusively

established. See id. If the accrual dates were not conclusively established under the

evidence, then Crego’s limitations defense is waived. See id. Generally, a cause of

action for breach of contract accrues upon breach. Barker v. Eckman, 213 S.W.3d 306,

311 (Tex. 2006).

        In our review, we consider the evidence in the light most favorable to the ruling

and indulge every inference that would support it. Id. (citing City of Keller v. Wilson, 168

S.W.3d 802, 822 (Tex. 2005)).              We review all the evidence and must credit the

favorable evidence if reasonable jurors could and disregard the contrary evidence

unless reasonable jurors could not. Id. (citing City of Keller, 168 S.W.3d at 827).

    A. Lash’s Claim




these agreements were entered into in 2004, 2005 and 2006.” The trial court rejected the argument,
stating that the statute of limitations begins to run only when a plaintiff conclusively knows that an
agreement has been breached. Apparently referring to when Lash learned of the sale of the property, the
trial court said, “When they found out that this land is sold and we didn’t even know about it, I mean,
there’s a lot of variables to that, so—.” The only other reference in the reporter’s record is when Crego’s
counsel briefly recites the jury questions that he requested and the trial court denied. He characterizes
some of those questions as involving the “statute of limitations” regarding various causes of action.
                                                    8
      Lash recovered under the $80,000 promissory note made on July 1, 2004. The

loan was secured by real property. It is undisputed that the note was not paid by its

maturity date, January 1, 2005. He filed suit on May 28, 2010.

      Crego argues that Lash’s claim for breach of a loan agreement is governed by

the four-year statute of limitations.    See TEX. CIV. PRAC. & REM. CODE ANN. §§

16.004(a)(3) (West 2002) (setting forth four-year limitations period for actions on debt),

16.035(e).   Lash argues that, because he sued only to enforce payment on the

promissory note, and not for foreclosure on the real property securing the note, his

claim is governed by the six-year statute of limitations set forth in section 3.118 of the

Texas Business and Commerce Code. See TEX. BUS. & COMM. CODE ANN. § 3.118

(stating generally that “an action to enforce the obligation of a party to pay a note

payable at a definite time” must be brought within six years of the due date).

      This Court addressed this issue in Aguero v. Ramirez, 70 S.W.3d 372, 375 (Tex.

App.—Corpus Christi 2002, pet. denied).         In that case, the plaintiff, Ramirez, sued

Aguero to enforce payment of unpaid principal and interest on a real estate note

secured by a deed of trust and a vendor’s lien on real property. See id. at 373. We

found that, “[w]here there is a debt secured by a note, which is, in turn, secured by a

lien, the note and lien constitute separate obligations.”     Id. at 374.   We held that,

because Ramirez was “only suing to enforce payment on the promissory note,” and was

not suing to enforce the lien, the deed of trust, or seeking to foreclose on the real

property, his claim was “an action to enforce the obligation of a party to pay a note

payable at a definite time” under the business and commerce code, and therefore, the

six-year statute of limitations was applicable. Id. at 375; see TEX. BUS. & COM. CODE

ANN. § 3.118; see also Arlington v. McClure, No. 02-06-296-CV, 2008 WL 755072, at *6
                                            9
(Tex. App.—Fort Worth June 5, 2008, no pet.) (mem. op.). Here, Lash’s $80,000

promissory note is a “note” within the meaning of the business and commerce code

because it is “an unconditional promise or order to pay a fixed amount of money, with or

without interest or other charges described in the promise or order” and is payable at a

definite time. TEX. BUS. & COM. CODE ANN. § 3.104(a)(2), (e) (West 2002). It is a

“promise” because it is “a written undertaking to pay money signed by the person

undertaking to pay.” Id. § 3.103(a)(12) (West Supp. 2011). The promissory note’s

maturity date is January 1, 2005. Lash’s suit was filed May 28, 2010, within the six-year

limitations period. We conclude that Crego did not establish that Lash’s claim is barred

by limitations and overrule Crego’s second issue as it applies to Lash.

   B. Hoysick’s Claim

      Hoysick’s $50,000 loan to the management company was evidenced by his

check dated August 9, 2004. There was no written agreement regarding repayment

provisions. Section 3.118 of the business and commerce code is not applicable to

unwritten loan agreements. See id. §§ 3.103(a)(12), 3.104(e) (defining “promise” as a

written undertaking to pay money and defining “note” as a promise). Accordingly, we

conclude that the applicable statute of limitations is the four-year statute of limitations

for a suit to collect a debt. See TEX. CIV. PRAC. & REM. CODE ANN. § 16.004(a)(3).

      As noted, Crego’s limitations defense is waived unless the evidence conclusively

established the date that Hoysick’s loan agreement was breached. See Holland, 352

S.W.3d at 788; Barker, 213 S.W.3d at 311. Crego argues that because there was no

specific time to repay the loan, it was a demand note and the statute of limitations ran

from the date the note was executed. According to Crego, limitations expired in August

2008, long before the filing of Hoysick’s suit in May 2010. In support, Crego relies on
                                            10
Manandhar v. Jamshed. No. 02-11-00027-CV, 2011 WL 3835980, at *3 (Tex. App.—

Fort Worth Aug. 31, 2011, no pet.) (mem. op.). In Manandhar, the Fort Worth Court of

Appeals concluded that a document signed by the appellee/debtor acknowledging a

$126,000 loan from the appellant was a demand note because the note did not specify

a time for repayment. Id. We find Manandhar to be inapposite, however, because, in

the present case, there is no written note at all, only an oral agreement.

       Hoysick testified that in exchange for his $50,000 loan, he was to receive the

return of his $50,000 plus twenty-five percent of the profit when the Westgate Loop

property was sold. Crego later reduced the percentage of profit due to Hoysick to

twenty-two-and-a-half percent and later, to twenty percent.       When asked at trial to

identify the date his money was to be returned, Hoysick responded, “It was based on

when the land sold, (A), or once the apartment complex was built and sold, (B). There

was no specific date of when it would happen.” If Hoysick withdrew from the project, he

would not receive any percentage of the profit, but would receive fourteen percent

interest on the loan. According to Hoysick, “the agreement was [he] could get out at

any time.” Hoysick was asked, “So there’s no due date on your loan agreement. There

was no exact date that the money was supposed to be paid back?” He responded,

“Well, on the other hand, yes. Again, when the bank freed up the $50,000.00, which did

happen in January of ’07, when the bank freed up that money, I was supposed to

receive it back.” Crego informed Hoysick in January 2007 that the bank had released

the $50,000. Hoysick requested the return of his money, but Crego refused.

       Crego argues that the loan agreement was breached when Hoysick told Crego

that he wanted to withdraw from the project.       Assuming, without deciding, that the

agreement was breached at that time, we find conflicting evidence regarding when that
                                            11
occurred. It is undisputed that Hoysick told Crego that he wanted to withdraw from the

project after Sarmiento withdrew from the project. Sarmiento testified that he withdrew

from the project and asked for the return of his money in 2007. Hoysick testified as

follows:

       Q [Crego’s counsel]: And I think you said later on down the road you
                            wanted out and you told Mr. Sarmiento, you called
                            him and asked him what his thoughts were.

       A [Hoysick]:           Correct.

       Q:                     When was that?

       A:                     Approximately, I would say, about a year later,
                              roughly.

       Q:                     Give or take in 2005, more or less?

       A:                     A year, year and a half later.

Crego testified that Sarmiento asked for the return of his money around November 2005

or “a little bit after that.” When asked if there was a date certain that Hoysick was

supposed to get his money back, Crego said, “No. The only thing that was mentioned

was if we were able to refinance and cash out, then some money would have been—

have gone back to him, but we weren’t allowed to.” Even if we were to assume that the

agreement was breached when Hoysick asked to withdraw from the project, the date of

the breach is not conclusively established and Crego’s limitations defense is waived

insofar as it is based on Hoysick’s withdrawal from the project.    See Holland, 352

S.W.3d at 788.

       We conclude that Crego breached the agreement either in January 2007 when

the bank released the money and Hoysick demanded repayment or in 2008 when the

Westgate Loop property was sold. Because Hoysick filed suit on May 28, 2010, we

                                          12
conclude that it was within the four-year limitations period. We overrule Crego’s second

issue as it applies to Hoysick.

                                    IV. JURY QUESTION

       Alternatively, by his third issue, Crego argues that, to the extent there were

disputed fact issues regarding when the loan agreement was breached, the trial court

erred in refusing to submit questions on limitations to the jury.       Specifically, Crego

contends that the trial court erred in refusing to submit the following jury question

regarding the loan agreement with Hoysick:

       As to the money you found was borrowed in the loan agreement you
       found in answer to Question No. ____, state the date on which it was
       loaned?

       Answer by giving one of these four types of answer: (a) stating a month,
       date, and a year, or (b) stating “no due date,” or (c) stating “on demand” or
       (d) stating “depending upon a future occurrence.”

              Answer:_____________

Crego argues that although the question and instruction were “not perfect,” they were

“substantially correct” and were sufficient to put the trial court on notice that Crego was

asserting a limitations bar. See TEX. R. CIV. P. 278 (stating that a failure to submit a jury

question shall not be grounds for reversal unless the complaining party tendered it in

writing in substantially correct wording to the trial court).        As noted above, the

discussion at the charge conference reflects that the trial court was aware that Crego

raised the issue of limitations, and the trial court rejected the argument. Crego argues

that the question was “substantially correct,” although we note that it asked the jury to

determine when the money was loaned, not when the loan agreement was breached.

“The omission of an instruction is reversible error only if the omission probably caused

the rendition of an improper judgment.” Shupe v. Lingafelter, 192 S.W.3d 577, 579
                                             13
(Tex. 2006). We have already determined that Hoysick’s claim was not barred by

limitations because the loan agreement was breached either in January 2007 when the

bank released the funds or in 2008 when the Westgate Loop property was sold. The

trial court’s failure to submit a jury question regarding when Hoysick made the loan

could not have caused the rendition of an improper judgment. See id.

      We overrule Crego’s third issue.

                                    V. ATTORNEY’S FEES

      By his fourth issue, Crego argues that if we reduce the damage award to either

Lash or Hoysick, we should remand the attorney’s fees issue for recalculation. Because

we have not reversed or reduced either damage award, we need not address this issue.

We overrule Crego’s fourth issue.

                                     VI. CONCLUSION

      We affirm the trial court’s judgment.



                                                   DORI CONTRERAS GARZA,
                                                   Justice

Delivered and filed the
19th day of December, 2013.




                                              14
