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Date: 07-28-2011

Case Style: Amr Kamal Gaffar v. Iqan Kamal

Case Number: 05-10-00560-CV

Judge: Mary Murphy

Court: Texas Court of Appeals, Fifth District on appeal from the 191st Judicial District Court, Dallas County

Plaintiff's Attorney: Rod Khavari

Defendant's Attorney: Barbara Thompson Hale and Jeffrey Dwayne Smith

Description: Amr Kamal Gaffar challenges the trial court's judgment rendered in favor of Iqan Kamal on her claim for unjust enrichment. Because we conclude the evidence established Gaffar's statute of limitations defense as a matter of law, we reverse the trial court's judgment and render judgment that Kamal take nothing on her claim.

BACKGROUND

Gaffar is the owner of the Habibi Café, a restaurant and hookah bar located in Richardson, Texas. Kamal's husband, Mohammed Samarah, was an investor in the café. In July and August 2005, at the request of her husband, Kamal wrote multiple checks totaling $15,375 to be used for the café's start-up. Six of the checks were made out directly to Gaffar for business purchases; two additional checks were made out to specific service providers for the business. Kamal wrote the checks from her personal checking account.

After Samarah's business relationship with Gaffar soured, Samarah filed suit against Gaffar seeking to recover the money he invested in the café. Although Kamal was not a party to that lawsuit, Samarah also sought to recoup the money Kamal paid for the business. Kamal believed her husband represented her interest in the suit and that Samarah would be able to get her money back. After a bench trial, the trial court rendered judgment on September 30, 2008 in favor of Samarah for $15,600, which represented the amount of Samarah's investment in the café; Samarah did not recover any of the money paid by Kamal.

Kamal then filed this suit against Gaffar in January 2009, seeking a return of the $15,375 in checks she wrote to and for Gaffar's business. Kamal asserted claims for unjust enrichment, quantum meruit, and promissory estoppel, alleging Gaffar's “business venture was used as a mere fraud” to convince her to pay money to him and that Gaffar has refused to “return the monies paid to him.” Gaffar generally denied Kamal's allegations and asserted the affirmative defenses of res judicata and collateral estoppel. Gaffar also sought rule 13 sanctions against Kamal. See Tex. R. Civ. P. 13. Gaffar later amended his answer to assert a statute of limitations affirmative defense.

Gaffar twice moved for summary judgment on his affirmative defenses and request for sanctions. The trial court granted summary judgment in favor of Gaffar on Kamal's promissory estoppel and quantum meruit claims, but it denied summary judgment as to Kamal's unjust enrichment claim and Gaffar's res judicata affirmative defense. The trial court also denied Gaffar's request for sanctions.

Kamal then tried her unjust enrichment claim to the court. After Kamal rested, Gaffar moved for judgment in part based on his limitations defense. The trial court denied the motion and thereafter rendered judgment against Gaffar for $15,375, plus attorney's fees and costs. Although twice requested by Gaffar, the trial court made no findings of fact or conclusions of law. Gaffar appealed.

DISCUSSION

Resolution of Gaffar's second issue is dispositive. As part of his issue, Gaffar raises a legal sufficiency challenge to the trial court's implicit finding that the statute of limitations did not operate to bar Kamal's unjust enrichment claim. He contends there was insufficient evidence to support the trial court's judgment because the evidence conclusively established that Kamal's unjust enrichment claim was barred by the applicable two-year statute of limitations.

Legal Standards

Findings of fact in a bench trial have the same force and dignity as a jury's verdict. Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994). In a bench trial where, as here, no findings of fact or conclusions of law are filed, all findings necessary to support the trial court's judgment are implied. See Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex. 1992). When a complete reporter's record is filed, implied findings, like a trial court's findings, may be reviewed for legal and factual sufficiency by the same standards applied to a jury's answer. Catalina, 881 S.W.2d at 297; In re C.A.T., 316 S.W.3d 202, 206 (Tex. App.-Dallas 2010, no pet.).

Because the statute of limitations is an affirmative defense, Gaffar had the burden to plead, prove, and secure findings to support his affirmative defense. See Tex. R. Civ. P. 94 (limitations is affirmative defense); Woods v. William M. Mercer, Inc., 769 S.W.2d 515, 517 (Tex. 1988) (affirmative defense of limitations must be proven by asserting party); Solares v. Solares, 232 S.W.3d 873, 878 (Tex. App.-Dallas 2007, no pet.) (same). Thus, Gaffar must (1) conclusively prove when the cause of action accrued, and (2) negate the discovery rule, if pleaded or otherwise raised. See KPMG Peat Marwick v. Harrison Cnty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). Kamal did not plead or otherwise raise the discovery rule in response to Gaffar's statute of limitations defense. Therefore, the discovery rule does not apply. See Woods, 769 S.W.2d at 517-18.

When a party attacks the legal sufficiency of an adverse finding on an issue for which he has the burden of proof, the party must demonstrate on appeal that the evidence conclusively established, as a matter of law, all vital facts to support the issue. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001) (citing Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex. 1989)); Solares, 232 S.W.3d at 878-79. A matter is “conclusively established” if reasonable people could not differ as to the conclusion to be drawn from the evidence. City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex. 2005).

Applicable Law

Unjust enrichment is an equitable principle that allows recovery “when one person has obtained a benefit from another by fraud, duress, or the taking of an undue advantage.” Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992); Tex. Integrated Conveyor Sys., Inc. v. Innovative Conveyor Concepts, Inc., 300 S.W.3d 348, 367 (Tex. App.-Dallas 2009, pet. denied). Unjust enrichment claims are governed by the two-year statute of limitations. See Elledge v. Friberg-Cooper Water Supply Corp., 240 S.W.3d 869, 871 (Tex. 2007) (per curiam); Pollard v. Hanschen, 315 S.W.3d 636, 641 (Tex. App.-Dallas 2010, no pet.); see also Tex. Civ. Prac. & Rem. Code Ann. § 16.003(a) (West Supp. 2010) (two-year limitations period for actions for “taking or detaining the personal property of another”). The statute of limitations does not begin to run until the cause of action accrues. See Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 514 (Tex. 1998). A cause of action accrues when “a wrongful act causes some legal injury, even if the fact of injury is not discovered until later, and even if all resulting damages have not yet occurred.” Murphy v. Campbell, 964 S.W.2d 265, 270 (Tex. 1997) (quoting S.V. v. R.V., 933 S.W.2d 1, 4 (Tex. 1996)). The question of when a cause of action accrues is generally one of law for the courts to determine. See Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 221 (Tex. 2003) (citing Moreno v. Sterling Drug, Inc., 787 S.W.2d 348, 351 (Tex. 1990)).

Analysis

Kamal pleaded Gaffar was unjustly enriched when he obtained money from her by fraud, duress, or the taking of an undue advantage. Thus, her claim for unjust enrichment accrued on the date when Gaffar wrongfully obtained her money. See Provident Life & Accident Ins., 128 S.W.3d at 221 (action accrued when wrongful act causes legal injury). The evidence at trial showed that Gaffar obtained Kamal's money in July and August 2005 when he accepted the checks Kamal wrote to him at the request of her husband. Specifically, Kamal wrote eight checks she claims unjustly enriched Gaffar. These checks were admitted into evidence and showed she dated the checks on various dates in July and August 2005. Kamal testified that when she wrote the checks, she gave them to her husband, who then gave the checks to Gaffar. Gaffar testified he accepted the checks in July and August of 2005. The checks reflected his endorsement, as well as the processing information from the bank. The two checks addressed to Gaffar's service providers were processed by the bank in August 2005. The date of the last check made out to Gaffar was August 5, 2005; the date of the last check written by Kamal was August 12, 2005. Because the evidence conclusively proves Kamal's claim accrued and limitations began running by August 2005, the last date on which Gaffar took her money, Kamal had until August 2007 to file her unjust enrichment claim. Kamal did not file suit until January 2009, more than a year after the limitations period expired.

We conclude the evidence conclusively established, as a matter of law, that Kamal's unjust enrichment claim was barred by the two-year statute of limitations. Accordingly, the evidence was legally insufficient to support the trial court's judgment. We sustain Gaffar's second issue.

Based on our resolution of issue two, we do not reach Gaffar's remaining issues, which include the failure of the trial court to make findings of fact and conclusions of law. See Tex. R. App. P. 47.1.

* * *

See: http://www.5thcoa.courts.state.tx.us/files/05/recent/100560F.HTM

Outcome: We reverse the trial court's judgment in favor of Kamal and render judgment that she take nothing on her claim.

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