Lerner, MD v. First Commerce Bank (Tex.App.- Houston [14th Dist] Sep. 10, 2009)(Yates)
(claim based on bank's failure to honor check time-barred, 4-year statute of limitations for breach of
contract)
AFFIRMED: Opinion by Justice Brock Yates
Before Chief Justice Hedges, Justices Brock Yates and Frost
14-07-01084-CV Marvin W. Lerner, MD v. First Commerce Bank
Appeal from County Court at Law No 3 & Probate Court of Brazoria County
O P I N I O N
Appellant Marvin W. Lerner, M.D., brought suit against appellee First Commerce Bank (“the Bank") after
the Bank refused to honor a cashier's check. In his sole issue, Lerner contends that the trial court erred
in granting summary judgment in the Bank's favor based on the Bank's affirmative defense of limitations.
We affirm.
On January 10, 1973, Brazosport Bank of Commerce, the Bank's predecessor, issued a cashier's check
to Lerner in the amount of $19,944.46. According to an affidavit filed by Lerner, Lerner presented the
cashier's check for payment by depositing it in his account with First National Bank of Bellaire on October
15, 1980, but Brazosport refused to pay the check and noted that it was “not outstanding on
[Brazosport's] records." Lerner was aware of this refusal by October 20, 1980. According to Lerner's
deposition, he then contacted Brazosport's president at that time, George Aubin, who told him that there
must have been an error and to send the cashier's check Aback through." Instead, Lerner put the
cashier's check in his desk drawer and “didn't pay much attention to it." Lerner did not seek payment on
the cashier's check again until December 2005. The Bank again refused to honor the check. In October
2006, Lerner brought suit against the Bank for breach of contract and the Bank moved for summary
judgment, claiming that Lerner's claim was time-barred as of 1984 under either the statute of limitations
applying to actions for debt or the general statute of limitations in effect when Brazosport refused to honor
the check in 1980. The trial court granted summary judgment in the Bank's favor on November 19, 2007,
finding that Lerner's claim was barred by an unspecified four-year statute of limitations that expired on
October 19, 1984.
The standard for reviewing a summary judgment under Texas Rule of Civil Procedure 166a(c) is well
established. The movant must show there is no genuine issue of material fact and that judgment should
be granted as a matter of law. KPMG Peat Marwick v. Harrison County Hous. Fin. Corp., 988 S.W.2d 746,
748 (Tex. 1999). In conducting our review, we take as true all evidence favorable to the non-movant, and
we make all reasonable inferences in the non-movant's favor. Id.
To be entitled to summary judgment based on its limitations defense, the movant must conclusively
establish the date the cause of action accrued, negate the applicability of the discovery rule, and prove
as a matter of law that the non-movant's claim is time-barred. See id.; Burns v. Thomas, 786 S.W.2d 266,
267 (Tex. 1990). If the movant establishes that the action is barred by limitations, the non-movant must
then put on proof that raises a fact issue on limitations to avoid summary judgment. KPMG Peat Marwick,
988 S.W.2d at 748.
On appeal, Lerner does not deny that his claim accrued when Brazosport refused to honor the cashier's
check in 1980.[1] Rather, Lerner contends that the trial court erred in granting summary judgment in the
Bank's favor because (1) a cashier's check is not subject to countermand by the issuing bank, (2) no
statute of limitations applied to actions based on the refusal to honor a cashier's check prior to January 1,
1996 when a three year statute of limitations specifically applying to dishonored cashier's checks went
into effect under Texas Business and Commerce Code section 4.111, (3) section 4.111 does not affect
rights accruing before its effective date, and (4) because the only time Lerner presented the cashier's
check for payment after section 4.111's effective date was in December 2005, his lawsuit for breach of
contract was not time-barred.
Lerner correctly points out that a cashier's check is not subject to countermand by the issuing bank. See
Wertz v. Richardson Heights Bank & Trust, 495 S.W.2d 572, 574 (Tex. 1973). However, that rule is
irrelevant to whether a subsequent suit for breach of contract, based on the Bank's refusal to honor the
check, is barred by the statute of limitations. See generally Guardian Bank v. San Jacinto Sav. Ass'n, 593
S.W.2d 860, 863 (Tex. App.-Houston [1st Dist.] 1980, writ ref'd n.r.e.) (recognizing that a cashier's check
is a written contract upon which an action for breach may be brought).
Regarding appellant's argument that no statute of limitations applied to his cause of action until he
demanded payment in 2005, the Bank asserts, as it did below, that a four-year statute of limitations under
either article 5527 or article 5529 of the former Texas Civil Statutes applied to Lerner's claim and began
to run when it accrued in 1980. See Act effective Aug. 27, 1979, 66th Leg., R.S., ch. 716, § 2, 1979 Tex.
Gen. Laws 1768, 1769, repealed by Act effective Sept. 1, 1985, 69th Leg., R.S., ch. 959, § 9(1), 1985
Tex. Gen. Laws 3242, 3322 (article 5527); Tex. Rev. Civ. Stat. Ann. art. 5529 (Vernon 1958) (article
5529).[2] At that time, article 5527 applied a four-year statute of limitations to “actions for debt." See Act
effective Aug. 27, 1979, 66th Leg., R.S., ch. 716, § 2, 1979 Tex. Gen. Laws 1768, 1769 (repealed 1985).
The phrase “actions for debt" has been construed to include actions for breach of a written contract.
Brooks Fashion Stores Inc. v. Northpark Nat'l Bank, 689 S.W.2d 937, 941B42 (Tex. App.-Dallas 1985, no
writ). Given that cashier's checks are written contracts, Lerner's claim was time-barred as of October
1984 by the four-year statute of limitations under article 5527. See Guardian Bank, 593 S.W.2d at 863
(holding that a cashier's check is a written contract).[3] Because the Bank established its right to
summary judgment as a matter of law based on its affirmative statute of limitations defense, the trial court
properly granted summary judgment. Accordingly, Lerner's sole issue is overruled.
Having overruled Lerner's sole issue, we affirm the trial court's judgment.
/s/ Leslie B. Yates
Justice
Panel consists of Chief Justice Hedges and Justices Yates and Frost.
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[1] As the Bank pointed out below, when Brazosport refused to honor the check on October 15, 1980, we had already held
that a cashier's check is a written contract wherein the maker impliedly agrees to pay the check's face value to the holder.
Guardian Bank v. San Jacinto Sav. Ass'n, 593 S.W.2d 860, 863 (Tex. App.-Houston [1st Dist.] 1980, writ ref'd n.r.e.). A
cause of action for breach of contract accrues at the moment of the breach. Barker v. Eckman, 213 S.W.3d 306, 311 (Tex.
2006). In this case, breach occurred at the moment Brazosport refused to honor the check. The Bank negated the
discovery rule's applicability and established the accrual date of Lerner's claim below by presenting summary judgment
evidence that Lerner knew of Brazosport's refusal to honor the check (and therefore the accrual of his claim) on or before
October 20, 1980. Though Lerner asserted in response that his first demand for payment came in 2005, he failed to
support that statement with summary judgment proof, and he has apparently abandoned that position on appeal.
[2] Article 5529 was repealed by Act effective Sept. 1, 1985, 69th Leg., R.S., ch. 959, § 9(1), 1985 Tex. Gen. Laws 3242,
3322. It was replaced by § 16.051 of the Texas Civil Practice and Remedies Code, which was repealed by Acts 1995, 74th
Leg., ch. 260, § 58(1), eff. May 30, 1995.
[3] Moreover, even assuming that article 5527 did not apply to Lerner's claim, there was a residual or general four-year
statute of limitations under article 5529 that applied to “[e]very action other than for the recovery of real estate, for which no
limitation is otherwise prescribed." Tex. Rev. Civ. Stat. Ann. art. 5529 (repealed 1985). Thus, if no other statute of
limitations applied, Lerner's claim would still have been time-barred in October 1984. Therefore, we disagree with
Lerner's argument that no statute of limitations applied to his claim when it first accrued in 1980.