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Click here for the full text of this decision FACTS:In the early 1990s, Kyle Allen’s father deeded him the family home on Nashville Drive in San Antonio. The deed listed Allen’s mailing address as 315 Cypress Gardens Drive in San Antonio; however, Allen actually lived in Oregon. Allen’s father lived at the Cypress Gardens Drive address, and one of Allen’s brothers lived at the home on Nashville Drive. Allen never instructed either his father or brother to forward mail that was addressed to him at either property. Allen failed to pay taxes on the Nashville Drive property. In September 1996, Bexar County, the city of San Antonio and the Northside Independent School District filed suit against him for delinquent taxes totaling $6,321.68. The Bexar County Sheriff’s Department attempted several times to serve Allen with citation at the Cypress Gardens Drive address but no one ever answered the door. On Feb. 14, 1998, authorities served the petition on Allen by attaching a copy of the citation to the front door of the house on Cypress Gardens Drive. When Allen learned about the tax suit from one of his brothers in March 1998, he flew to San Antonio and obtained an extension of time to pay the taxes but did not answer the suit. Because he did not have money to pay the taxes, Allen went to an American General Finance Inc. (AGF) branch office where he spoke to Mark Esquivel, an AGF management trainee. Allen gave Esquivel the tax suit documents and told Esquivel that he “needed to pay the tax suits.” According to Allen, Esquivel suggested the taxes could be paid from a home equity loan; however the minimum loan amount was $15,000.00. Allen testified Esquivel said that AGF paid people’s delinquent taxes “all the time” and that AGF “would pay the tax suit.” Allen testified he felt confident the delinquent taxes would be paid by AGF. Esquivel, who was a district manager for AGF at the time of trial, testified AGF often makes loans for the purpose of paying delinquent taxes. In those situations, as part of the loan transaction, AGF obtains a tax certificate showing the amounts due before the loan closes, and AGF pays the taxes out of the loan proceeds immediately after closing by hand-delivering the payment to the tax office or, if there is a suit, by hand-delivering the payment to the law office handling the suit. Esquivel testified that performing these services was part of AGF’s agreement with Allen. He testified that part of the agreement was “[t]o pay the taxes and handle the suit.” The loan file, which was entered into evidence, includes a tax certificate obtained by AGF before closing and information about the tax suit. Allen’s home equity loan in the amount of $15,000 closed on May 18, 1998. The closing documents reflect that $4,988.29 of the loan proceeds were to be allotted to Bexar County for payment of back taxes and that the rest, $10,011.72, was paid directly to Allen. As reflected in the tax suit documents, however, Allen’s total tax liability was more than $6,000. AGF issued a check in the amount of $4,988.28 payable to the Bexar County Tax Assessor on May 22, 1998, but the check was not processed by the tax assessor’s office until July 2, 1998. No explanation of the underpayment or the delay in processing appears in the record. AGF never contacted the firm representing the taxing authorities to confirm all the taxes had been paid or to obtain a dismissal of the tax suit. Allen testified that before he returned to Oregon, he and his brothers agreed to share the loan obligation equally. According to Allen, each brother was to send his share of the payment to the youngest brother each month, who would in turn make the payment to AGF. Although the money was sent as planned, the youngest brother never made a payment to AGF. Rather, he used the money for his own purposes while telling his brothers he was making the payments. Because AGF did not pay the entire tax delinquency, the taxing authorities proceeded with the suit and obtained a default judgment on July 29, 1998, that ordered foreclosure of the Nashville Drive property. Counsel for the taxing authorities did not conduct another search of the real property records and therefore was unaware of AGF’s lien on the property. Allen did not receive the notice of the judgment sent to him at the Cypress Gardens Drive address. Similarly, he did not receive the request for order of sale filed by the taxing entities, the order of sale, the notice of sale or the sheriff’s return showing the property was sold Nov. 3, 1998. Nevertheless, before the foreclosure sale, one of Allen’s brothers told him that “people were coming around looking at the house and asking questions” and that a gentleman, Daniel Goff, came to the house and left a business card. After acquiring this information, Allen waited a week or more before he contacted Goff on Nov. 4, 1998. Goff told him that he had purchased the Nashville Drive property on Nov. 3, 1998. Seven days after the foreclosure sale, Allen filed a motion in the tax suit to redeem the excess proceeds. On Nov. 18, 1998, the trial court awarded Allen $29,993.66, representing the difference between the proceeds obtained from the foreclosure sale and the amount due for delinquent taxes. During the summer and fall of 1998, AGF tried repeatedly to contact Allen, because the home equity loan payments had not been made and the homeowner’s insurance policy on the property had lapsed. On Nov. 19, 1998, unaware of the tax foreclosure sale, AGF sent Allen a notice of default stating its intent to foreclose on the property if all past due monies were not paid by Dec. 21, 1998. The notice was sent to the Nashville Drive address but, as with all other correspondence in this case, it was never forwarded to Allen. In January 1999, AGF filed this suit seeking foreclosure. Allen answered and ultimately filed several counterclaims. It was only after filing suit and obtaining Allen’s answer that AGF learned the property had already been sold. AGF abandoned its foreclosure claim and sought imposition of a constructive trust on the redemption proceeds. AGF moved for and obtained a partial summary judgment dismissing Allen’s Texas Deceptive Trade Practices Act and gross negligence claims. Allen’s breach of contract and negligence claims were tried to a jury, which found: “1. AGF and Allen agreed AGF”would pay all amounts due and owing in the tax lawsuit out of the loan’; “2. AGF failed to comply with the agreement to pay all amounts due and owing and this failure was not excused by Allen’s failure to comply with a material term of the loan; “3. AGF’s negligence, and not Allen’s, proximately caused the foreclosure sale; “4. the fair market value of the Nashville Drive property was $54,500; “5. AGF charged interest in excess of 18%; and “6. Allen’s reasonable attorney’s fees for preparation and trial was $150,000; for appeal to the court of appeals is $20,000; and for”appeal to the Supreme Court of Texas’ is $20,000. After the trial court suggested a remittitur, Allen remitted $100,000 in attorneys’ fees. Allen elected to recover on his breach of contract claim, and the final judgment awarded Allen was $24,506.23, representing the market value of the property as found by the jury less the redemption proceeds previously recovered by Allen, prejudgment interest, postjudgment interest, a $2,000 statutory usury penalty, $50,000 attorneys’ fees for trial and appellate attorneys’ fees as found by the jury. Allen and AGF filed notices of appeal. HOLDING:Reversed and remanded. AGF raised six issues, alleging: 1. the trial court erred in refusing to submit a breach-of-contract damages question and mitigation instruction; 2. the breach-of-contract claim failed as a matter of law, because the alleged agreement was not sufficiently definite and not supported by consideration; 3. the evidence established AGF’s defense of excused performance as a matter of law; 4. the trial court erred in submitting a negligence question; 5. Allen’s usury claim failed as a matter of law, because a usurious rate of interest was never communicated to Allen; and 6. the trial court erred in excluding evidence. As for the first issue, the court found that, because the evidence conclusively established that Allen’s loss was a natural, probable and foreseeable result of AGF’s breach of its promise to pay the amounts due in the tax suit, no issue on causation was required. In addition, after reviewing the pleadings, evidence and the charge as a whole, the court concluded that the negligence issue required the jury to answer the same question that a mitigation instruction would have. Accordingly, the court found that any error in failing to submit a mitigation instruction in connection with a damages question did not cause the rendition of an improper judgment or prevent AGF from properly presenting its case on appeal and is not reversible. (Thus, the court also implicitly found no error in the submission of the negligence issue.) In its second issue, AGF contended that Allen’s breach of contract claim failed as a matter of law, because the oral agreement was not sufficiently definite or supported by consideration, and it was therefore unenforceable. But the court found that Allen’s promise provided sufficient consideration to support both the lending of money and the promise to pay the amounts due in the tax suit. Third, AGF challenged the jury’s failure to find that its breach of the agreement was excused. The court noted that the law recognizes as an affirmative defense the principle that a party is excused from performing a contract if the other party commits a prior material breach of the contract. Reviewing the evidence against a proper charge, the court found that the evidence supported a finding that AGF’s breach occurred before any breach by Allen and therefore AGF’s breach was not excused. AGF’s employees testified that the amounts due in the tax suit should have been paid within a few days after closing. Allen’s first loan payment was not due until more than a month after closing. In its fifth issue, AGF argued that it was not liable for usury as a matter of law, because no evidence supported a finding that it charged a usurious rate of interest. Under Texas Finance Code �305.001(a), a creditor who charges interest greater than that allowed by law is liable to the person charged. AGF, the court noted, did not dispute that an attorney acting on its behalf sent Allen a letter in August 1998 demanding payment that included interest greater than that allowed by law. Thus, the court held that a demand for usurious interest in a letter addressed and sent to the debtor is a “charge” within the meaning of the statute without requiring proof that the intended recipient actually received and read the letter. In its sixth issue, AGF argued that the trial court erred in excluding from evidence an allegedly false affidavit filed in the redemption proceeding in which Allen swore he had “never conveyed, nor transferred any right[,] title[,] or interest in the . . . [Nashville Drive] property” and was “entitled to all excess proceeds from the sale of the . . . [Nashville Drive] property.” But the court found no abuse of discretion in the admission of the affidavit. Allen raised three issues challenging the remittitur of attorneys’ fees and the trial court’s failure to reduce the credit against the judgment for the redemption proceeds by the amount of attorneys’ fees Allen incurred in obtaining the redemption. Allen also raised a conditional issue to be addressed if the court did not reinstate the remitted amount of attorneys’ fees in which he complains of the trial court’s summary dismissal of his Texas Deceptive Trade Practices Act claim. Because Allen failed to segregate attorneys’ fees, the court found that the evidence did not support the jury’s award of $150,000. The court therefore declined to reinstate the remitted amount and overrule Allen’s first two issues. Moving on to the conditional issue, the court found that after reviewing the motion and the responsive pleadings and evidence, Allen had raised a genuine issue of material fact regarding his DTPA claim. The court thus found that the trial court erred in dismissing the remainder of Allen’s DTPA cause of action. OPINION:Hilbig, J.; Angelini, Marion and Hilbig, JJ.

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