ALLEN WALKER v. TRB BANCORP, INC.; from Collin County; 5th district (05-07-00901-CV, ___ SW3d
___, 07‑15‑08, pet. denied Oct 2008)(breach of contract, limitations, fraudulent inducement)
ALLEN WALKER, Appellant
TRB BANCORP, INC., RUSSELL MINTON, REX MINTON,
ARTHUR DEAN CASTILLO, AND WILLIAM W. TABOR, Appellees
On Appeal from the 380th Judicial District Court
Collin County, Texas
Trial Court Cause No. 380-02830-05
Before Justices Richter, FitzGerald, and Lang-Miers
Opinion By Justice FitzGerald
Appellant Allen Walker sued appellees on theories that included breach of contract, fraud, and fraudulent
inducement. Appellee TRB Bancorp, Inc. (“TRB”) won a partial summary judgment as to those theories,
and the trial court signed a take-nothing judgment against Walker after trial. In a single issue, Walker
appeals the partial summary judgment in favor of TRB. We affirm.
The summary-judgment evidence shows the following. Walker was one of the founders and organizers of
appellee TRB. In February 2000, the founders of TRB each signed an Organizer's Agreement in which
they recited that their purpose was to organize a bank holding company and to operate a state-chartered
bank. Each founder committed to contribute at least $35,000 towards organizational expenses, and each
founder ultimately contributed $60,000 towards such expenses. Although they specified in the Organizer's
Agreement that the holding company's name would be “Texas Republic Bancorp, Inc.,” the entity they
actually established was “TRB Bancorp, Inc.”-the appellee in this case. And although they specified that
their purpose was to operate a state-chartered bank called “Texas Republic Bank” in the general vicinity of
Frisco, Texas, TRB instead acquired a bank called Security National Bank in Quanah, Texas, by acquiring
that bank's owner in a corporate merger. The merger took place on July 26, 2001, and TRB commenced its
banking operations through Security National Bank. The name of the bank was later changed to Texas
Republic Bank, National Association.
To finance the merger and the acquisition of the bank, Walker and the other founders of TRB borrowed
funds from The Independent Banker's Bank (“TIBB”), executed a promissory note payable to TIBB, and
contributed the funds to TRB. Walker and the other founders then received common stock and warrants in
TRB and became directors of TRB. Walker and four other founders renewed the promissory note at the
end of 2002. The renewed note matured at the end of 2003, but the debt was neither repaid nor renewed
at that time. In or before June 2004, one of the other founders paid Walker's share of the indebtedness to
TIBB, and in July 2004 Walker was removed from his position as a director of TRB. TRB never repaid
Walker's $60,000 contribution or paid him anything for his outstanding stock in TRB.
On August 29, 2005, Walker sued TRB, asserting claims for breach of contract, fraud, and fraud in the
inducement. Walker later filed a first amended petition that joined several new defendants: Russell Minton,
Rex Minton, Arthur Dean Castillo, and William W. Tabor. Tabor and the Mintons were also founders of
TRB, and Castillo was the person who had first approached Walker about investing in the venture. Walker
reiterated his original claims against all defendants, and he added a claim for breach of fiduciary duty
against all defendants. TRB filed a motion for partial summary judgment in which it challenged some of
Shortly before trial, the trial court granted in part TRB's motion for partial summary judgment. The court
ruled that Walker's breach-of-contract claim was barred by limitations and that his claims for fraud and
fraudulent inducement failed on unspecified no-evidence grounds. The case was tried to the court. See
Footnote 1 After trial, the court signed a document entitled “Directed Verdict” in which it ruled in the
defendants' favor “on all matters at issue.” In that document, which we will refer to as the “judgment,” the
court further ordered that Walker take nothing, taxed all costs against Walker, and recited, “This judgment
disposes of all claims against all parties and is appealable.” The court later signed findings of fact and
conclusions of law.
In his brief, Walker challenges only the propriety of the partial summary judgment in favor of TRB.
Because Walker presents no argument challenging the judgment as to the other appellees, we affirm the
judgment as to them. We proceed to review the arguments Walker has raised with respect to the partial
Standard of review
We review a summary judgment de novo. Roehrs v. FSI Holdings, Inc., 246 S.W.3d 796, 805 (Tex. App.-
Dallas 2008, pet. denied). The trial court properly grants a defendant's traditional motion for summary
judgment if the movant conclusively disproves an essential element of its opponent's claim or conclusively
proves all of the elements of an affirmative defense. Henson v. Sw. Airlines Co., 180 S.W.3d 841, 843 (Tex.
App.-Dallas 2005, pet. denied). Like the trial court, we must consider the evidence in the light most
favorable to the nonmovant and resolve all doubts in the nonmovant's favor. W. Invs., Inc. v. Urena, 162 S.
W.3d 547, 550 (Tex. 2005).
A no-evidence summary judgment is proper unless the respondent brings forth more than a scintilla of
probative evidence to raise a genuine issue of material fact on the challenged element or elements. We
review the evidence in the light most favorable to the nonmovant, crediting evidence favorable to that party
if reasonable jurors could and disregarding contrary evidence unless reasonable jurors could not. Roehrs,
246 S.W.3d at 805.
Breach of contract
The trial court granted summary judgment for TRB as to Walker's breach-of-contract claim specifically on
the ground of limitations. We note, however, that TRB also raised no-evidence challenges to several of the
elements of Walker's breach-of-contract claim, including the element of breach. We may also, in the
interest of judicial economy, consider TRB's no-evidence challenges as alternative grounds for affirmance.
Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 626 (Tex. 1996); Crocker v. Am. Nat'l Gen. Ins. Co., 211
S.W.3d 928, 930 (Tex. App.-Dallas 2007, no pet.).
The statute of limitations for breach of contract is four years. Tex. Civ. Prac. & Rem. Code Ann. § 16.004
(Vernon 2002); Jones v. Blume, 196 S.W.3d 440, 445 (Tex. App.-Dallas 2006, pet. denied). To win
summary judgment based on limitations, a defendant must prove as a matter of law the date the cause of
action accrued. Jones, 196 S.W.3d at 445. Thus, the question presented is whether TRB established as a
matter of law that Walker's cause of action accrued more than four years before he filed suit on August 29,
2005. Generally, a cause of action accrues for limitations purposes when the facts come into existence that
authorize the claimant to seek a judicial remedy. Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc.
962 S.W.2d 507, 514 (Tex. 1998). More specifically, a claim for breach of contract accrues when the
contract is breached. Stine v. Stewart, 80 S.W.3d 586, 592 (Tex. 2002); Jones, 196 S.W.3d at 446. When
the contractual obligation in question is the duty to pay money, limitations begins to run when the payment
is due. See Edlund v. Bounds, 842 S.W.2d 719, 726 (Tex. App.-Dallas 1992, writ denied) (“When a note is
payable at a definite time, limitations begins to run at the maturity of the note.”).
TRB argues that Walker's claim for breach of contract accrued on July 31, 2001, more than four years
before Walker filed suit on August 29, 2005. According to TRB, Walker's claim is predicated on an alleged
breach of paragraph 4(A) of the Organizer's Agreement, which provides that “[u]pon the commencement of
operations by the proposed Texas Republic Bancorp, Inc. and it's [sic] subsidiary, [Texas Republic] Bank,
each Organizer shall receive a refund of all contributions made under this Agreement by each such
Organizer.” A director of TRB executed an affidavit in which he testified that TRB began operating on July
31, 2001. In Walker's own summary-judgment affidavit, he testified that TRB “commenced its banking
operations through Security National Bank of Quannah, a national banking association, on an[d] after July
26, 2001.” Thus, TRB concludes, Walker's contractual right to the return of his contribution accrued no
later than July 31, 2001, when TRB began its operations through the Security National Bank. Alternatively,
TRB argues that Walker has no evidence that TRB has breached any contract.
Walker makes two arguments in support of his contention that his contract claim did not accrue until July
2004, when he was removed from the TRB board of directors. First, he argues that TRB's commencement
of banking operations did not trigger paragraph 4(A) of the Organizer's Agreement because only the
commencement of banking operations by “Texas Republic Bancorp, Inc.” could trigger that paragraph.
Because “Texas Republic Bancorp, Inc.” was never formed, Walker reasons, such an entity has never
commenced banking operations and never triggered the running of limitations under paragraph 4(A). But
as TRB correctly points out, Walker's argument is self-defeating. If paragraph 4(A) is triggered only when a
company called “Texas Republic Bancorp, Inc.” commences operations, then Walker has no contractual
right to a return of his organizer's expenses yet, and TRB's summary-judgment ground that Walker has no
evidence of breach justifies affirmance of the summary judgment. If TRB's commencement of banking
operations sufficed to trigger Walker's contractual right to a return of his contribution, his claim is barred by
Thus, we reject Walker's first argument, and we believe the proper course is to reject it on the ground of
limitations, just as the trial court did. Walker judicially admitted in his live pleading that repayment of all the
founders' expenses would be due “upon the commencement of operations by Defendant TRB.” He further
admitted that the contributions were to be repaid if TRB “commenced operations as a bank.” Consistent
with those admissions, Walker asserts in his appellate brief that (1) he is suing on the Organizer's
Agreement, (2) the Agreement is the relevant document for limitations purposes, and (3) TRB has
breached the Agreement by not returning Walker's contribution. In short, to show a breach of the
Agreement, Walker relies on TRB's failure to repay the founders' expenses when TRB commenced
banking operations-which happened more than four years before Walker filed suit. We reject Walker's first
In his second argument, Walker argues that his summary-judgment evidence raised a genuine fact issue
as to the date on which TRB became obliged to refund the founders' contributions. He relies on an affidavit
by TRB's president, A. Dean Castillo. Castillo testified that he had reviewed the Agreement and that, in his
opinion, “none of the events that would trigger the obligation by TRB Bancorp, Inc. to repay the organizers
expenses had occurred as of July 2004.” Because Castillo includes no factual explanation for his opinion,
his testimony is a bare conclusion and raises no fact issue. See King v. Wells Fargo Bank, N.A., 205 S.W.
3d 731, 735 (Tex. App.-Dallas 2006, no pet.) (“[C]onclusory statements are not proper summary judgment
evidence and are insufficient to create a fact issue that would defeat summary judgment.”). Castillo also
testified that “[t]he organizers' expenses were intended to be paid by TRB Bancorp, Inc. when it was able to
do so and are required to be paid in a pro-rata fashion to each organizer.” This testimony does not create
a fact issue. Even if the organizers subjectively intended that TRB would repay the organizers' expenses
whenever it had the financial means to do so, the Agreement unambiguously specified the time at which
the organizers were contractually entitled to their refunds-upon the commencement of operations by the
holding company and its bank. Testimony about their subjective intent as to when repayment would take
place is simply immaterial in the face of the unambiguous language of paragraph 4(A). See Sun Oil Co.
(Del.) v. Madeley, 626 S.W.2d 726, 732 (Tex. 1981) (“Where the meaning of the contract is plain and
unambiguous, a party's construction is immaterial.”); accord EOG Resources, Inc. v. Hanson Prod. Co., 94
S.W.3d 697, 701 (Tex. App.-San Antonio 2002, no pet.).
The evidence conclusively establishes that TRB's contractual obligation, if any, to repay Walker's
organizer's expenses accrued no later than July 31, 2001. Walker filed suit against TRB more than four
years later. The trial court correctly granted summary judgment for TRB as to Walker's breach-of-contract
Fraud and fraudulent inducement
TRB won a no-evidence summary judgment as to Walker's claims for fraud and fraudulent inducement.
The elements of fraud are a material misrepresentation that was false, that was either known to be false
when made or was made without knowledge of its truth, that was intended to be acted upon, that was relied
upon, and that caused injury. Sears, Roebuck & Co. v. Meadows, 877 S.W.2d 281, 282 (Tex. 1994) (per
curiam). Fraudulent inducement is merely a particular species of fraud that arises only in the context of a
contract and requires the existence of a contract as part of its proof. Haase v. Glazner, 62 S.W.3d 795,
798 (Tex. 2001). Thus, a fraudulent-inducement claim has the same elements as a fraud claim, plus the
added element that the fraud related to an agreement between the parties. Id. at 798-99. TRB asserted in
its motion that Walker could adduce no evidence that TRB made any representations with knowledge of
their falsity or recklessly as to their truth, no evidence that TRB possessed the intent to induce reliance,
and no evidence of damages. The trial court did not specify the basis for its dismissal of Walker's claims for
fraud and fraudulent inducement.
Walker relies on the representation that he would be repaid his organizer's expenses as the false
representation that gives rise to his claims for fraud and fraudulent inducement. This is a promise of future
performance. Such promises will support a fraud claim only if the promise was made with no intention of
performing the act. T.O. Stanley Boot Co., Inc. v. Bank of El Paso, 847 S.W.2d 218, 222 (Tex. 1992);
Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 434 (Tex. 1986). Evidence of the promisor's failure to
perform, standing alone, is no evidence of the promisor's intent not to perform when the promise was
made. Spoljaric, 708 S.W.2d at 435. Walker cites no evidence beyond the fact of TRB's nonperformance to
support the existence of fraudulent intent at the time the contract was executed. Accordingly, he did not
raise a genuine fact issue as to the essential element of fraudulent intent.
The trial court correctly granted summary judgment in favor of TRB as to Walker's claims for fraud and
We overrule Walker's single issue and affirm the trial court's judgment.
KERRY P. FITZGERALD
Footnote 1 We have no reporter's record, but we surmise that the trial was a bench trial because the trial
judge later signed findings of fact and conclusions of law.