A.I. Credit Corp. v. Thomas

United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
September 28, 2006
for the Fifth Circuit
Charles R. Fulbruge III
Clerk

No. 05-10705

A.I. CREDIT CORP.,

Plaintiff,

VERSUS

PHILIP R. THOMAS, Etc; ET AL.,

Defendants;

PHILIP R. THOMAS, individually doing business as
Thomas Global,

Defendant-Third Party Plaintiff-Appellant,

VERSUS

CAPITAL MANAGEMENT STRATEGIES, INC.; JULIAN V.
MOVSESIAN,

Third Party Defendants-Appellees.

Appeal from the United States District Court
for the Northern District of Texas

(3:03-CV-0298)

Before GARZA, DeMOSS, and STEWART, Circuit Judges.
PER CURIAM:*

Appellant Philip R. Thomas (“Thomas”) appeals the

district court’s grant of summary judgment in favor of

Appellees Julian V. Movsesian (“Movsesian”) and Capital

Management Services, Inc. (“CMS”) (collectively,

“Appellees”). He argues that the district court erred in

finding that his third party claims against Appellees,

which concededly fall outside the applicable statutory

limitations periods, are time barred. Specifically,

Thomas contends that the discovery rule applies to save

his otherwise time-barred claims. We affirm the judgment

of the district court.

Underlying this case is an insurance premium

financing deal between Thomas and A.I. Credit Corporation

(“A.I. Credit”) that Movsesian brokered on behalf of his

company, CMS. The deal enabled Thomas to obtain a

$2,000,000 cash advance, a $22,000,000 life insurance

policy, and the financing necessary to fund the cash

*
Pursuant to 5TH CIR. R. 47.5, the Court has determined
that this opinion should not be published and is not
precedent except under the limited circumstances set
forth in 5TH CIR. R. 47.5.4.
2
advance and the premiums on the life insurance policy.

A.I. Credit provided all of the necessary financing.

According to Thomas, Movsesian promised that Thomas would

pay nothing until he died.

On January 12, 1999, Thomas signed an application for

the $22,000,000 life insurance policy; and on January 14,

1999, Thomas signed the documents related to the

financing of the deal, including a promissory note in the

amount of $3,846,223, an assignment of the life insurance

policy to A.I. Credit as collateral, a personal guaranty,

and five security and control agreements regarding

investment accounts to be used as further security for

the loan. Thomas alleges that all of the documentation

for the financing of the deal went through Movsesian and

that he had no contact with A.I. Credit. He states that

he entered into the loan transaction for the sole purpose

of financing the payment of the premiums on the newly

acquired life insurance policy. Thomas believed that the

cash value of the life insurance policy would be

leveraged to pay the interest cost on the loan until he

died, at which point he thought the insurance policy

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would pay in full all advances of principal and the

accrued interest on the loan. According to Thomas, he did

not think that he would be required to pay annual

interest on the loan because Movsesian promised him that

he would pay nothing until he died and also because

Movsesian told him that the provisions in the loan

documents that provided for payment of interest were just

“typical legal words” that were “covered by the special

premium finance arrangement with A.I. Credit.” Thomas

also alleges that he did not receive any disclosures

regarding the “special premium finance arrangement,” nor

did he receive an insurance premium finance agreement as

required under Texas law. However, Appellees point out

that the promissory note contained a provision that

required Thomas to pay interest on the loan on an annual

basis, and it stated, “This Note is payable in successive

annual installment payments.” The note also stated, “The

undersigned acknowledges that before signing this Note,

borrower has read the Note in its entirety and received

a legible, completely filled-in copy of this Note.”

On January 18, 1999, Thomas sent a check to Movsesian

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in the amount of $110,589, which Thomas claims he

understood to be an origination fee. Appellees, however,

claim that Thomas paid this amount to Movsesian after

Movsesian sent a letter to Thomas indicating that the

amount of prepaid interest due on the loan was $110,589.

No other interest was due on the loan until January 2000.

On January 13, 2000, A.I. Credit faxed Movsesian a letter

indicating that the outstanding interest on the loan was

$119,693.91, and on January 24, 2000, an employee of A.I.

Credit authorized payment of this interest from funds

held in one of the investment accounts used by Thomas to

secure the deal. Thomas acknowledges that he was aware of

this payment of interest and that as of January 2000, he

“knew of the ‘injury’ he had suffered at the hands of

Movsesian,” that is, he knew that he would have to pay

interest on the loan contrary to his understanding of its

terms.

According to Thomas, when he became aware that he had

to make interest payments on the A.I. Credit loan, he

complained to Movsesian about the high cost of the deal;

and Movsesian in turn helped Thomas to surrender the

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original life insurance policy and purchase a new policy

from American General. Thomas claims that after he

purchased the American General policy, there was

confusion regarding the amount of interest due on the

A.I. Credit loan and the length of the grace period under

the American General policy. Whether the result of

confusion or not, the premiums on the American General

policy were not timely paid, the policy terminated, and

Thomas defaulted on the promissory note.

On February 11, 2003, A.I. Credit filed suit against

Thomas,2 seeking recovery under the note and the guaranty

and also seeking a declaration regarding its security

interests in Thomas’s investment accounts. On May 19,

2003, Thomas brought various counterclaims against A.I.

Credit and various third party claims against Movsesian

and his company, CMS. Specifically, Thomas alleged fraud

in the inducement, violations of Article 21.21 of the

Texas Insurance Code, breach of fiduciary duty, negligent

2
A.I. Credit also named Thomas’s company (Thomas
Global), his wife (Wayne Thomas), and various entities
related to Thomas Global as defendants. Only Thomas
appeals.
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misrepresentation, violations of Article 24.11 of the

Texas Insurance Code, promissory estoppel, and

conspiracy. Appellees filed a motion for summary

judgment, contending, in part, that Thomas’s claims were

barred by the applicable statutes of limitations.3 Thomas

responded that the discovery rule applied to save his

claims because he was not aware until January 2000 of his

injury, i.e., that he had to pay annual interest on the

A.I. Credit loan.4 The district court, agreeing with

Appellees that Thomas’s claims were barred by the

respective statutes of limitations and finding that the

discovery rule did not apply to save them, granted

summary judgment in Appellees’ favor. According to the

3
Thomas’s claims were governed either by two-year or
four-year limitations periods: (1) fraud, four years; (2)
violations of the Texas Insurance Code, two years; (3)
breach of fiduciary duty, four years; (4) negligent
misrepresentation, two years; (5) promissory estoppel,
four years; and (6) conspiracy, two years. See A.I.
Credit Corp. v. Thomas, No. 03-cv-00298, at 4 (N.D. Tex.
Apr. 21, 2005) (order granting summary judgment).
4
Thomas also claims that he was unaware that he had to
reapply for financing on a yearly basis; however, he did
not raise this argument before the district court. We
consider it waived. Barrie v. Intervoice-Brite, Inc., 397
F.3d 249, 263 (5th Cir. 2005).
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court, Thomas could not argue that he was unaware until

January 2000 of the annual interest payment requirement

because the terms of the note, signed in January 1999,

indicated that Thomas would have to pay interest

annually. The court cited Martinez Tapia v. Chase

Manhattan Bank, N.A., 149 F.3d 404 (5th Cir. 1998), for

this proposition. On appeal, Thomas concedes that absent

the discovery rule, all of his third party claims are

barred by the respective statutes of limitations.

However, he argues that there is a genuine issue of

material fact as to when he discovered or should have

discovered his injury and that the district court

therefore erred in deciding that the discovery rule does

not save his third party claims.

This Court reviews a grant of summary judgment de

novo, applying the same standard as the district court.

Wheeler v. BL Dev. Corp., 415 F.3d 399, 401 (5th Cir.),

cert. denied, 126 S. Ct. 798 (2005). Summary judgment is

appropriate if “there is no genuine issue as to any

material fact and . . . the moving party is entitled to

a judgment as a matter of law.” FED. R. CIV. P. 56(c); see

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also Wheeler, 415 F.3d at 401. We view the evidence in

the light most favorable to the non-movant. Id. at 401-

02.

Having carefully reviewed the parties’ briefs and the

relevant portions of the record, we affirm the district

court’s judgment essentially for the reasons stated

therein. Under Texas law, Thomas was put on notice of his

injury as of the date he signed the promissory note. His

arguments to the contrary are unavailing.

AFFIRMED.

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