Dissenting opinion issued February 14, 2013.
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-11-00460-CV
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GENERAL METAL FABRICATING CORPORATION, GMF LEASING,
INC., AND ARNOLD CURRY, Appellants
V.
JOHN STERGIOU AND MAIN MARINE REPAIR AND INDUSTRIAL
CLEANING COMPANY, Appellees
On Appeal from the 133rd District Court
Harris County, Texas
Trial Court Case No. 2000-00900
DISSENTING OPINION ON REHEARING
Although I agree with the Court that the parties’ rule 11 agreement is
enforceable, I disagree with the Court’s interpretation of the agreement’s payment
provisions. I would hold that the rule 11 agreement includes a right of prepayment
and therefore authorized Curry to pay the entire amount owed on or before the
down-payment deadline. Consequently, I do not join that part of the Court’s
opinion holding otherwise and I dissent from the Court’s judgment.
The GMF Companies correctly assert that the words “on or before” have a
particular, commonly-accepted meaning: they permit the obligor to pay any
amount of principle not due “‘immediately at or at any time in advance of,’ ‘a
period named.’” Lovenberg v. Henry, 140 S.W. 1079, 1080 (Tex. 1911). Nothing
in the rule 11 agreement prohibits prepayment. Yet, relying on the “structure” of
an agreement drafted in haste while the jury deliberated, the Court concludes that
any right of prepayment is severely limited in this case—i.e., Curry may prepay the
down payment of $20,000 principal but may not prepay the future monthly
installments. The Court adopts this construction of the agreement because the
down-payment and monthly installment provisions are “separately stated . . . using
complete punctuation.”
I would not place such great weight on the “structure” of the rule 11
agreement. The right of prepayment is not important because it allows for the
payment of principal before it is due. The right of prepayment is important
because it allows for the avoidance of unearned interest. By holding that the rule
11 agreement only authorizes Curry to prepay $20,000 in principal as a
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down-payment, the Court renders the “on or before” language meaningless because
no interest was earned on that amount. Instead, the rule 11 agreement provides for
the accrual of interest after the down-payment deadline. I agree with the GMF
Companies that “the only way to give meaning to ‘on or before’ in the
‘down-payment’ paragraph—and to harmonize that term-of-art with the more
restrictive ‘on’ in the next paragraph—is to interpret the [rule 11 agreement] as
authorizing [the GMF Companies] to prepay so much of the settlement amount as
[they] desired (including the full amount), so long as that occurred on or before”
the down-payment deadline.
Given there is no dispute that Curry tendered the full $300,000 owed under
the rule 11 agreement to Stergiou, I would reverse the trial court’s summary
judgment that the rule 11 agreement did not convey any right of prepayment and
render judgment for the GMF Companies on this issue.
Jim Sharp
Justice
Panel consists of Justices Jennings, Sharp, and Brown.
Justice Sharp, dissenting.
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