Chase Tutor v. Douglass McLain

ACCEPTED
15-25-00175-CV
FIFTEENTH COURT OF APPEALS
AUSTIN, TEXAS
12/22/2025 3:58 PM
No. 15-25-00175-CV CHRISTOPHER A. PRINE
CLERK

IN THE FILED IN -
15th COURT OF --
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FIFTEENTH COURT OF APPEALS AUSTIN, -
--- TEXAS
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---- CA ------
12/23/2025 - - 8:49:06
- -- AM
AUSTIN, TEXAS - -
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I D
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CHRISTOPHER A. PRINE
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---- Clerk
CHASE TUTOR
Appellant,
v.
FILED IN
DOUGLASS MCLAIN 15th COURT OF APPEALS
AUSTIN, TEXAS
Appellee,
12/22/2025 3:58:06 AM
CHRISTOPHER A. PRINE
Clerk
ON APPEAL FROM COUNTY COURT NO. 5
OF WILLIAMSON C OUNTY, TEXAS
CAUSE NO. 23-0823-CC5

APPELLANT’S BRIEF

Russell Frost
State Bar No. 24063687
rfrost@russellfrostlaw.com
Andie Johnson
State Bar No. 24140114
ajohnson@russellfrostlaw.com
Law Office of Russell Frost, PLLC
711 West 7th Street
Austin, Texas 78701
Tel: (512) 225–5590
Fax: (512) 692–2895
ATTORNEY FOR APPELLANT
CHASE TUTOR

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APPELLANT’S BRIEF - 1
IDENTITY OF PARTIES AND COUNSEL

APPELLANT

CHASE TUTOR

COUNSEL FOR APPELLANT:

Russell Frost (Lead Attorney)
State Bar No. 24063687
rfrost@russellfrostlaw.com
Andie Johnson
State Bar No. 24140114
ajohnson@russellfrostlaw.com
LAW OFFICE OF RUSSELL FROST, PLLC
711 W 7th Street
Austin, TX 78701
Tel: (512) 225–5590

APPELLEE

DOUGLAS MCLAIN

COUNSEL FOR APPELLEE:

Duncan G. Farrish
State Bar No. 24142885
duncan@thomaslawtx.com
Griffith “Hunter” Thomas II
State Bar No. 24099403
hunter@thomaslawtx.com
12912 Hill Country Blvd., STE F-233
Austin, TX 78738
Tel: (512) 599-4096
Fax: (512) 713-0680

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TABLE OF CONTENTS

STATEMENT OF THE CASE...................................................................................8

STATEMENT REGARDING ORAL ARGUMENT ...............................................10

ISSUES PRESENTED.............................................................................................11

STATEMENT OF FACTS AND PROCEDURAL HISTORY ................................13

SUMMARY OF ARGUMENT ................................................................................17

ARGUMENT AND AUTHORITY .........................................................................19

I. The Trial Court Erred in Granting Rendering a Final Judgment because
Tutor’s Affirmative Defenses Were Not Disposed Of ..........................................19

II. The Trial Court Erred in Granting Summary Judgment on McLain’s Fraud
Claim Because the Claim Is Barred by the Four-Year Statute of Limitations .....21

III. The Trial Court Erred in Granting Summary Judgment on McLain’s Breach
of Contract Claim Because the Claim Is Barred by Limitations ..........................23

IV. The Trial Court Erred in Denying Tutor’s Affirmative Defense and
Counterclaim for Usury ........................................................................................24

A. McLain contracted for and charged usurious interest ................................25

B. Tutor’s affirmative defense and counterclaim for usury are not barred by
limitations ..........................................................................................................27

C. McLain did not cure the usurious violation pursuant to TEX. FIN. CODE §
305.103 ..............................................................................................................28

V. The Trial Court Erred in Awarding Appellee’s Attorney Fees ......................31

PRAYER ..................................................................................................................35

CERTIFICATE OF SERVICE .................................................................................36
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CERTIFICATE OF COMPLIANCE .......................................................................37

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TABLE OF AUTHORITIES

CASES

Aquaplex, Inc. v. Rancho La Valencia, Inc., 297 S.W.3d 768(Tex. 2009) ...............21

Barker v. Eckman, 213 S.W.3d 306 (Tex. 2006) ......................................................24

BP Am. Prod. Co. v. Marshall, 342 S.W.3d 59 (Tex. 2011) ....................................21

Chase Manhattan Bank, N.A. v. Lindsay, 787 S.W.2d 51 (Tex. 1990) ....................21

Cook Composites, Inc. v. Westlake Styrene Corp., 15 S.W.3d 124 (Tex. App.—

Houston [14th Dist.] 2000, no pet.) ......................................................................20

Coppedge v. Colonial Sav. & Loan Ass’n, 721 S.W.2d 933 (Tex. App.—Dallas

1986, writ ref’d n.r.e.).................................................................................... 26, 27

Danziger v. San Jacinto Sav. Ass’n, 732 S.W.2d 300 (Tex. 1987).................... 26, 27

Green Int’l, Inc. v. Solis, 951 S.W.2d 384 (Tex. 1997) ..................................... 31, 32

Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562 (Tex. 2001) ..............24

Hooks v. Samson Lone Star, Ltd. P’ship, 457 S.W.3d 52 (Tex. 2015) .............. 22, 23

Int’l Bus. Machs. Corp. v. Lufkin Indus., Inc., 573 S.W.3d 224 (Tex. 2019) ..........21

Jackson v. Coldspring Terrace Prop. Owners Ass’n, 838 S.W.2d 320 (Tex. App.—

El Paso 1992, no writ) ..........................................................................................20

KPMG Peat Marwick v. Harrison Cnty. Hous. Fin. Corp., 988 S.W.2d 746 (Tex.

1999) .....................................................................................................................23

Lehmann v. Har–Con Corp., 39 S.W.3d 191 (Tex. 2001) .......................................19
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Mafrige v. Ross, 866 S.W.2d 590 (Tex. 1993) .........................................................19

MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660 (Tex. 2009) .. 31, 32

McCullough v. Scarbrough, Medlin & Assocs., 435 S.W.3d 871 (Tex. App.—Dallas

2014, pet. denied) .................................................................................................33

Park Place Hosp. v. Estate of Milo, 909 S.W.2d 508 (Tex. 1995)...........................19

Pentico v. Mad-Wayler, Inc., 964 S.W.2d 708 (Tex. App.—Corpus Christi 1998,

pet. denied) .............................................................................................. 25, 26, 30

Science Spectrum, Inc. v. Martinez, 941 S.W.2d 910 (Tex. 1997)...........................19

Stiles v. Resolution Trust Corp., 867 S.W.2d 24 (Tex. 1993) ..................................19

Stine v. Stewart, 80 S.W.3d 586 (Tex. 2002) ...........................................................24

Strasburger Enters., Inc. v. TDGT Ltd. P’ship, 110 S.W.3d 566 (Tex. App.—Austin

2003, pet. denied) .................................................................................................30

TEX. FIN. CODE § 305.001 ........................................................................................31

Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006) ....... 21, 23, 32, 33

Tubelite v. Risica & Sons, Inc., 819 S.W.2d 801 (Tex. 1991) ........................... 25, 31

Windhorst v. Adcock Pipe & Supply, 547 S.W.2d 260 (Tex. 1977) ............ 25, 26, 27

Woods v. William M. Mercer, Inc., 769 S.W.2d 515 (Tex. 1988) .............................21

Zorrilla v. Aypco Constr. II, LLC, 421 S.W.3d 54 (Tex. App.—Corpus Christi 2013,

pet. denied) ...........................................................................................................33

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STATUTES

TEX. CIV. PRAC. & REM. CODE § 16.004(a)(3).........................................................24

TEX. CIV. PRAC. & REM. CODE § 16.004(a)(4) ........................................................21

TEX. CIV. PRAC. & REM. CODE § 38.001..................................................................32

TEX. FIN. CODE § 305.001(a) ............................................................................ 25, 30

TEX. FIN. CODE § 305.005 ........................................................................................31

TEX. FIN. CODE § 305.006(a) ............................................................................ 27, 28

TEX. FIN. CODE § 305.103 ........................................................................... 18, 28, 35

TEX. FIN. CODE § 305.103(a) ............................................................................ 29, 30

TEX. FIN. CODE § 305.103(a)(2)...............................................................................29

TEX. FIN. CODE §§ 302.002 ......................................................................... 17, 25, 31

TEX. FIN. CODE ANN. § 301.002(a) ..........................................................................27

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STATEMENT OF THE CASE

This appeal arises from an ordinary private loan that became extraordinary

only after it was transformed, over five years later, into a lawsuit seeking to recover

unlawful interest through time-barred claims. At its core, this case asks whether

Texas law permits a lender to resurrect a stale debt, inflate it with usurious charges,

and then obtain summary judgment despite undisputed statute-of-limitations and

statutory-usury violations. It does not.

In April 2017, Appellant Chase Tutor borrowed $25,000 from Appellee

Douglass McLain under a short, written agreement drafted by McLain. CR 15. The

loan matured on November 1, 2017. Id. The agreement provided no interest rate and

instead imposed a flat $500 monthly “late fee.” Id. Tutor made payments totaling

approximately $17,000, which McLain accepted. CR 18. McLain took no legal

action within the four-year limitations period, which expired in November 2021.

More than five years after maturity, McLain demanded approximately

$33,500, including $25,000 in accumulated late fees that constitute usurious interest.

CR 53–54. He filed suit in June 2023, asserting breach of contract and fraud based

on the same 2017 loan. CR 8–18.

In November 2023, Tutor provided written notice identifying the demanded

late fees as usurious. CR 149. Only afterward did McLain issue a purported

“Correction of Violation,” claiming no corrective action was required. CR 151–52.

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The notice did not reduce or refund the usurious charges and was issued after Tutor’s

notice, failing to satisfy the statutory requirements to cure.

Despite these undisputed facts, the trial court granted summary judgment for

McLain on breach of contract and fraud, having never addressed Tutor’s affirmative

defenses, denied Tutor’s usury defense and counterclaim, and awarded damages,

interest, and attorney’s fees. 2 RR 15-17; CR 472–73. This appeal seeks reversal of

that judgment and rendering in favor of Tutor on his affirmative claims, affirmative

defenses, and McLain’s affirmative claims, and further remand this case to the Trial

Court for findings of fact regarding Tutor’s statutory damages and attorneys’ fees.

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STATEMENT REGARDING ORAL ARGUMENT

Appellant does not believe that oral argument is necessary for the disposition

of this appeal. The issues presented involve the application of well-settled Texas law

to an undisputed record, including statute-of-limitations principles, summary

judgment standards, and the statutory requirements governing usury and correction

under the Texas Finance Code. The parties’ briefs fully address the relevant facts and

controlling authorities, and oral argument would not materially aid the Court in

resolving the issues presented.

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ISSUES PRESENTED

This appeal arises from the trial court’s summary judgment rulings on claims

and defenses governed by the statute of limitations and the Texas Finance Code’s

usury provisions.

1. Did the Trial Court err in rendering a final judgment in favor of McLain where

Tutor had affirmative defenses upon which the Trial Court did not rule?

2. Did the Trial Court err in granting summary judgment in favor of McLain on

his claims for breach of contract and fraud where the undisputed evidence

established that those claims were barred by the four-year statute of

limitations?

3. Did the Trial Court err in concluding Tutor’s affirmative defense and

counterclaim for usury were barred by limitations when the uncontroverted

evidence established that McLain charged interest exceeding the maximum

lawful rate in March of 2023?

4. Did the Trial Court err in concluding that McLain avoided usury liability

under Texas Finance Code § 305.103 where McLain’s attempted “Correction

of Violation” was issued only after Tutor provided written notice of usury and

McLain failed to correct the usurious charges?

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5. Did the trial court err in awarding attorney’s fees to McLain where he did not

prevail on a valid, timely breach-of-contract claim and attorney’s fees are not

recoverable for fraud or unsegregated, time-barred claims?

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STATEMENT OF FACTS AND PROCEDURAL HISTORY

On or about April 13, 2017, Appellee Douglass McLain loaned Appellant

Chase Tutor $25,000 pursuant to a short, single-page written agreement drafted by

McLain (the “Loan Agreement”). CR 15. The Loan Agreement provided that the full

loan balance was due six months later, on November 1, 2017. Id.

The Loan Agreement did not specify any interest rate, did not require

installment payments, and did not provide any collateral or security. Id. Instead, the

agreement imposed a flat $500 monthly “late fee” beginning December 1, 2017,

purportedly “not to exceed the original loan amount.” Id. The Loan Agreement did

not address how the late fee provision related to any lawful interest rate, nor did it

include a usury savings clause. See id.

Between 2017 and 2022, Tutor made a series of irregular payments totaling

approximately $17,000. CR 18. McLain accepted those payments without objection.

Although the Loan Agreement matured on November 1, 2017, McLain did not

declare a default, accelerate the debt, or pursue legal action within the four years

following maturity.

On March 16, 2023, more than five years after the loan matured, McLain,

through counsel, sent Tutor a written demand letter asserting that Tutor owed

$33,500. CR 53–54. The demanded amount consisted of approximately $8,000 in

alleged unpaid principal, $25,000 in accumulated “late fees,” and attorney’s fees. Id.

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The letter demanded payment within thirty days and threatened litigation if payment

was not made. Id.

On June 6, 2023, McLain filed suit in the County Court at Law No. 5 of

Williamson County, Texas. CR 8–18. McLain asserted claims for breach of contract,

fraud, and violations of the Texas Deceptive Trade Practices Act (“DTPA”). Id.

McLain sought recovery of unpaid principal, late fees, prejudgment interest,

attorney’s fees, and costs. Id. Tutor was served on June 8, 2023, and timely filed an

Original Answer and General Denial on July 3, 2023. CR 23–25.

In November 2023, Tutor, through counsel, provided McLain with written

notice identifying the demanded late fees as usurious interest under the Texas

Finance Code. CR 149.

On December 1, 2023, McLain issued a written document titled “Correction

of Violation.” CR 151–52. In that notice, McLain asserted that no corrective action

was required because Tutor’s total payments remained below the original loan

amount “regardless of any interest rate.” Id. The notice did not reduce or refund any

interest, did not amend the demand to a lawful rate, and did not otherwise alter the

amounts previously demanded. Id.

On January 17, 2024, McLain filed an amended petition seeking recovery of

approximately $8,000 in unpaid principal and interest “not to exceed 18%.” CR 29-

36.

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On February 7, 2025, Tutor filed a First Amended Answer and Original

Counterclaims, asserting affirmative defenses including statute of limitations and

usury, and asserting a counterclaim under Texas Finance Code Chapter 305 based on

McLain’s contracting for and charging unlawful interest. CR 205–11.

On September 13, 2024, McLain moved for summary judgment, asserting

entitlement to judgment as a matter of law on all claims and seeking damages,

interest, and attorney’s fees. CR 43–74.

Tutor opposed the motion and, on February 7, 2025, filed a cross-motion for

summary judgment, asserting that McLain’s claims were barred by limitations and

that McLain’s recovery was precluded by usury and the failure to effect a timely

statutory cure. 2 RR 15-17; CR 113–32.

The trial court conducted a hearing on February 28, 2025. Following the

hearing, the court granted McLain’s motion for summary judgment in part, awarding

$8,000 in actual damages and $2,880 in prejudgment interest, and denied Tutor’s

motion except as to an unspecified issue. CR 472–73. The court later awarded

McLain attorney’s fees and costs. Critically, McLain’s motion wholly failed to

address Tutor’s affirmative defenses. CR 43-74.

The trial court signed a Final Order Granting Summary Judgment on July 2,

2025, rendering judgment for McLain on breach of contract and fraud, denying

Tutor’s usury counterclaim and usury defense—without McLain having filed any

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motion on the same—and awarding damages, interest, attorney’s fees, and costs. CR

472–73.

Tutor timely filed a Motion for New Trial on August 1, 2025, which was

overruled by operation of law. CR 479–82. Tutor then filed a Notice of Appeal on

September 29, 2025. CR 485.

This appeal follows.

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SUMMARY OF ARGUMENT

This appeal arises from the trial court’s erroneous summary judgment rulings

that allowed a lender to recover on time-barred claims and to avoid the consequences

of charging usurious interest through an untimely and ineffective attempt at

“correction.” Texas law does not permit either result.

First, McLain’s claims for breach of contract and fraud are barred by the four-

year statute of limitations. The loan matured on November 1, 2017. Any alleged

breach or misrepresentation necessarily accrued no later than that date. McLain

waited until June 2023, more than five years later, to file suit. Because the claims

accrued outside the limitations period and no tolling applies, summary judgment in

McLain’s favor was improper as a matter of law.

Second, the undisputed evidence establishes usury. The loan agreement

imposed a fixed $500 monthly “late fee” on a $25,000 principal balance without

stating a lawful interest rate. CR 15. Under the Texas Finance Code, the maximum

allowable rate in such circumstances is six percent per year. TEX. FIN. CODE §

302.002 (West 2024). The $500 monthly charge equates to a 24% annual rate and

therefore constitutes usurious interest. McLain later compounded the violation by

issuing a written demand in March 2023 seeking $25,000 in accumulated late fees.

Contracting for or charging unlawful interest is sufficient to establish usury liability.

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Third, McLain did not properly cure the usury under the Texas Finance Code.

TEX. FIN. CODE § 305.103 (West 2023). The statute provides a narrow safe harbor,

but only if the creditor strictly complies with its requirements. McLain did not. He

issued a purported “Correction of Violation” only after Tutor provided written notice

of usury, which alone defeats the statutory cure. Moreover, the “correction” did not

actually correct anything. It did not reduce the usurious charges, amend the demand

to a lawful rate, or withdraw the unlawful interest claim. Later pleadings continued

to seek interest above the rate permitted by law. CR 29-49; 43-74. An untimely

response that denies the violation rather than curing it does not satisfy § 305.103.

Because McLain both contracted for and charged usurious interest and failed

to effect a timely and legally sufficient cure, Tutor’s affirmative defense and

counterclaim for usury were conclusively established. The trial court therefore erred

in denying Appellant relief under Chapter 305 of the Texas Finance Code.

The judgment should be reversed. Appellant respectfully requests that this

Court render judgment in his favor on the usury claims and defenses, reverse the

summary judgment on Appellee’s time-barred claims, and remand for determination

of statutory remedies and attorney’s fees, or render judgment where appropriate.

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ARGUMENT AND AUTHORITY

I. The Trial Court Erred in Granting Rendering a Final Judgment because
Tutor’s Affirmative Defenses Were Not Disposed Of

A summary judgment is final only if it disposes of all pending claims and

defenses. Park Place Hosp. v. Estate of Milo, 909 S.W.2d 508, 510 (Tex. 1995).

When a plaintiff moves for summary judgment on its own claims but fails to address

a defendant’s pleaded affirmative defenses, the resulting order is interlocutory and

cannot support a final judgment. Mafrige v. Ross, 866 S.W.2d 590, 591 (Tex. 1993),

overruled on other grounds, Lehmann v. Har–Con Corp., 39 S.W.3d 191, 204 (Tex.

2001).

Tutor pleaded affirmative defenses of statute of limitations and usury, which

remained live pleadings at the time McLain moved for summary judgment. The

Clerk’s Record reflects that McLain’s motion sought judgment solely on his

affirmative claims and did not address or negate Tutor’s affirmative defenses. CR

43-74. Because a motion for summary judgment must stand or fall on the grounds

expressly presented, defenses not addressed in the motion remain pending. Science

Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 912 (Tex. 1997); Stiles v. Resolution

Trust Corp., 867 S.W.2d 24, 26 (Tex. 1993) (summary judgment cannot be affirmed

on grounds not expressly set out in motion).

Of not, in Cook Composites, Inc. v. Westlake Styrene Corp., the court held that

a plaintiff moving for summary judgment is not required to negate a defendant’s
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affirmative defenses where the defendant fails to come forward with evidence raising

a genuine issue of material fact on those defenses. 15 S.W.3d 124, 3940–41 (Tex.

App.—Houston [14th Dist.] 2000, no pet.). Cook Composites addresses the

evidentiary burden to avoid summary judgment; it does not authorize a trial court to

render a final judgment while affirmative defenses remain unadjudicated. Even if

Cook Composites is read to require Tutor to present evidence in support of its

affirmative defenses, Tutor met this burden. See CR 113-32. While Tutor would

argue he is entitled to summary judgment on his affirmative defense, at minimum,

he raised issues of fact by presenting evidence as to each element of his affirmative

defense.

Here, the Trial Court did not grant summary judgment against Tutor on his

affirmative defenses, nor did it expressly deny or otherwise dispose of them. To be

sure, McLain never moved for summary judgment on Tutor’s affirmative defenses;

moreover, the denial of Tutor’s own motion for summary judgment did not

adjudicate those defenses on the merits.

Because the summary judgment order did not refer to or dispose of Tutor’s

affirmative defenses of limitations and usury, and because Tutor presented evidence

in support of his affirmative defenses in his response, those defenses remained

pending. A judgment that leaves live defenses unresolved is interlocutory and cannot

support a final disposition. Chase Manhattan Bank, N.A. v. Lindsay, 787 S.W.2d 51,

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52–53 (Tex. 1990). The Trial Court therefore erred in both granting summary

judgment and rendering a final judgment.

II. The Trial Court Erred in Granting Summary Judgment on McLain’s
Fraud Claim Because the Claim Is Barred by the Four-Year Statute of
Limitations

A cause of action for fraud is subject to a four-year statute of limitations. TEX.

CIV. PRAC. & REM. CODE § 16.004(a)(4) (West 2024). As a general rule, a fraud

claim accrues when the alleged misrepresentation is made. Woods v. William M.

Mercer, Inc., 769 S.W.2d 515, 517 (Tex. 1988). Although the discovery rule may

defer accrual in limited circumstances, it applies only when the nature of the alleged

fraud is inherently undiscoverable and objectively verifiable. BP Am. Prod. Co. v.

Marshall, 342 S.W.3d 59, 66 (Tex. 2011).

Where, as here, the alleged fraud is based on a promise of future performance,

the plaintiff must establish not only that the promise was false, but that the defendant

had no intention of performing at the time the promise was made. Int’l Bus. Machs.

Corp. v. Lufkin Indus., Inc., 573 S.W.3d 224, 228 (Tex. 2019). Importantly, mere

non-performance or delayed performance does not establish fraudulent intent, and

partial performance negates an inference that the promisor never intended to

perform. Aquaplex, Inc. v. Rancho La Valencia, Inc., 297 S.W.3d 768, 775 (Tex.

2009); Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 305 (Tex. 2006).

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McLain’s fraud claim is predicated on the same alleged oral and written

representations that form the basis of his breach of contract claim—namely, that

Tutor promised to repay a $25,000 personal loan by November 1, 2017. The alleged

misrepresentation necessarily occurred, if at all, at the time the loan was made in

April 2017.

At the latest, any alleged falsity would have been discoverable when the loan

allegedly matured and repayment was not made on November 1, 2017. By that date,

McLain indisputably knew (or should have known) that Tutor had not performed as

allegedly promised. Texas courts consistently hold that limitations begins to run

when the plaintiff has notice of facts giving rise to the claim, not when the plaintiff

subjectively concludes fraud occurred. Hooks v. Samson Lone Star, Ltd. P’ship, 457

S.W.3d 52, 57 (Tex. 2015). Thus, even applying the most generous accrual date,

McLain’s fraud claim accrued no later than November 2017. Thus, the four-year

limitations period expired in November 2021—nearly eighteen months before

McLain filed suit on June 2, 2023.

McLain presented no competent summary judgment evidence establishing

that the discovery rule applies or that limitations was otherwise tolled. The alleged

misrepresentation concerned repayment terms in a simple, informal loan transaction;

facts that were neither inherently undiscoverable nor objectively unverifiable. See

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Hooks, 457 S.W.3d at 58 (discovery rule does not apply where plaintiff could have

discovered the alleged injury through reasonable diligence).

To the contrary, McLain admitted that Tutor made partial payments totaling

approximately $17,000 over several years. CR 8 (Pl’s Orig. Pet. “Defendant began

making inconsistent payments on November 7, 2027, with the most recent payment

made on March 27, 2022”). Partial repayment conclusively undermines any

inference that Tutor never intended to repay the loan and further defeats any

argument that the alleged fraud was concealed. See Tony Gullo Motors, 212 S.W.3d

at 305. Because Appellee failed to raise a fact issue as to delayed accrual or tolling,

the fraud claim is barred as a matter of law assuming McLain failed to file within

the limitations period—which he did.

Limitations is an affirmative defense that may be conclusively established on

summary judgment where, as here, the accrual date is undisputed and the plaintiff

fails to produce evidence raising a genuine issue of material fact. KPMG Peat

Marwick v. Harrison Cnty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). The

Trial Court therefore erred in granting summary judgment in McLain’s favor on the

fraud claim. McLain’s summary judgment should have been denied and, as a matter

of law, judgment should have been rendered for Tutor based on limitations.

III. The Trial Court Erred in Granting Summary Judgment on McLain’s
Breach of Contract Claim Because the Claim Is Barred by Limitations

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A breach of contract claim is subject to a four-year statute of limitations. TEX.

CIV. PRAC. & REM. CODE § 16.004(a)(3) (West 2024). A cause of action for breach

of contract accrues when the contract is breached—i.e., when a party fails or refuses

to perform an obligation that is due. Stine v. Stewart, 80 S.W.3d 586, 592 (Tex.

2002); Barker v. Eckman, 213 S.W.3d 306, 311 (Tex. 2006). Where a contract

requires payment on a date certain, limitations begins to run on the date payment is

due. Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 566 (Tex. 2001).

The undisputed summary judgment evidence establishes that the alleged loan

was due in full six months after execution on November 1, 2017. The agreement did

not create an installment obligation, did not require periodic payments, and did not

provide for acceleration upon default. Accordingly, any breach occurred, if at all, on

November 1, 2017, when payment was allegedly not made. Because the claim

accrued on that date, McLain was required to file suit no later than November 1,

2021. He did not do so. Instead, he waited until June 2, 2023, to file suit, more than

five and a half years after accrual.

The Trial Court therefore erred in granting summary judgment in McLain’s

favor and in denying Tutor’s cross-motion for summary judgment on limitations. At

a minimum, limitations precludes recovery of any amounts allegedly due under the

contract, and judgment should have been rendered for Tutor.

IV. The Trial Court Erred in Denying Tutor’s Affirmative Defense and
Counterclaim for Usury
No. 15-25-00175-CV: Chase Tutor v. Douglass McLain
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The Trial Court erred in rejecting Tutor’s usury defense and counterclaim

because the undisputed summary judgment evidence establishes usury as a matter of

law, and McLain failed to effect a timely or legally sufficient correction under the

Texas Finance Code.

Texas law imposes liability when a creditor contracts for, charges, or receives

interest in excess of the maximum lawful rate. TEX. FIN. CODE § 305.001(a) (West

2024). Proof of any one of these acts is sufficient to establish usury. Pentico v. Mad-

Wayler, Inc., 964 S.W.2d 708, 715 (Tex. App.—Corpus Christi 1998, pet. denied);

Windhorst v. Adcock Pipe & Supply, 547 S.W.2d 260, 261 (Tex. 1977).

A. McLain contracted for and charged usurious interest

First, the April 13, 2017, Loan Agreement required Tutor to pay a $500 “late

fee” per month beginning December 1, 2017, “not to exceed the original loan

amount,” on a principal balance of $25,000. CR 51. Because the Loan Agreement

did not specify any lawful interest rate, the maximum allowable rate is six percent

per year. TEX. FIN. CODE §§ 302.002 (West 2024); Tubelite v. Risica & Sons, Inc.,

819 S.W.2d 801, 805 (Tex. 1991). The $500 monthly fee, or $6,000 per year,

constitutes a 24% annual rate, four times the permissible statutory rate. Texas courts

uniformly hold that a fixed monthly charge imposed solely because of late

repayment constitutes interest as a matter of law. Pentico, 964 S.W.2d at 715. Thus,

the written agreement facially contracts for usurious interest.

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Second, even apart from the contract, McLain later charged additional

usurious interest by issuing a written demand for payment of $25,000 in accumulated

late fees on March 16, 2023. CR 53-54. A creditor “charges” usurious interest when

it takes any unilateral act constituting a demand for payment. Pentico, 964 S.W.2d

at 716. Courts specifically hold that demand letters, including those from counsel,

qualify as usurious charges. Pentico, 964 S.W.2d at 715; see also Danziger v. San

Jacinto Sav. Ass’n, 732 S.W.2d 300, 304 (Tex. 1987); Coppedge v. Colonial Sav. &

Loan Ass’n, 721 S.W.2d 933, 936 (Tex. App.—Dallas 1986, writ ref’d n.r.e.).

The March 16, 2023, letter demanded payment of $8,000 alleged principal,

$25,000 in “late-payment fees,” and $500 attorney’s fees. (CR 53-54). By

demanding payment of $25,000 in accumulated monthly charges, which constitute

interest for the detention of money, McLain charged interest far exceeding the

statutory maximum. This independent usurious act is sufficient by itself to establish

usury liability. See Windhorst, 547 S.W.2d at 261 (any one of contracting for,

charging, or receiving unlawful interest triggers liability).

McLain’s own verified filings and summary judgment evidence confirm that

he contracted for unlawful interest in 2017, he charged unlawful interest in 2023,

and he claimed a balance inflated by unlawful interest charges. CR 8-14, 51-54.

Because any one of these acts constitutes a usury violation, and each is affirmatively

established in the summary judgment record, McLain’s liability for usurious interest

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is conclusively proven as a matter of law. The Trial Court therefore erred in

declining to grant Tutor’s motion for summary judgment on his usury defense and

counterclaim.

B. Tutor’s affirmative defense and counterclaim for usury are not
barred by limitations

Under Section 305.006(a) of the Texas Finance Code, a usury action must be

brought “within four years of the date the usurious interest was contracted for,

charged, or received.” TEX. FIN. CODE § 305.006(a) (West 2024). A cause of action

accrues, and limitations begins to run, each time the creditor contracts for, charges,

or receives interest in excess of the statutory maximum. Id. A creditor “charges”

usurious interest when it undertakes a unilateral act that expressly or impliedly

demands payment of the unlawful amount. TEX. FIN. CODE ANN. § 301.002(a) (West

2024); see Windhorst, 547 S.W.2d at 261. Demand letters, including those sent by

counsel, qualify as “charges” under the statute. Coppedge, 721 S.W.2d at 936;

Danziger, 732 S.W.2d at 304.

On March 16, 2023, McLain, through his attorney, sent Tutor a formal demand

letter seeking a total balance of $33,500, comprised of $8,000 in alleged remaining

principal, $25,000 in late-payment charges, and $500 in attorney’s fees. CR 53-54.

The demand letter unequivocally required Tutor to remit payment of the full amount

within thirty days and threatened litigation in the event of non-payment. Id. Because

the claimed $25,000 in “late-payment fees” constitutes interest as a matter of law,
No. 15-25-00175-CV: Chase Tutor v. Douglass McLain
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the demand letter was a unilateral act demanding payment of usurious interest,

thereby constituting a “charge” under § 305.006(a).

This March 16, 2023, charge triggered a new four-year limitations period,

making Tutor’s affirmative defense and counterclaim for usury, filed well within that

period, timely. Moreover, because usury limitations accrue on each discrete usurious

act, the 2023 charge independently preserves Tutor’s claims regardless of any earlier

conduct.

Because McLain charged usurious interest on March 16, 2023, well within

four years of Tutor’s assertion of his usury defense and counterclaim, Tutor’s claims

are timely under section 305.006(a) of the Texas Finance Code. TEX. FIN. CODE §

305.006(a) (West 2024). The trial court therefore erred in concluding that limitations

barred Tutor’s usury claims. The record demonstrates that Tutor’s usury cause of

action accrued no earlier than the date of the 2023 demand letter, and the action was

filed well within the applicable four-year period. Accordingly, Tutor’s affirmative

defense and counterclaim for usury must be reversed and rendered in his favor.

C. McLain did not cure the usurious violation pursuant to TEX. FIN.
CODE § 305.103

The Texas Finance Code provides creditors with a limited and strictly

enforced opportunity to avoid liability for usury, but only when the creditor complies

precisely with the statutory correction requirements. TEX. FIN. CODE § 305.103

(West 2024). Because usury statutes are penal in nature, Texas courts require strict
No. 15-25-00175-CV: Chase Tutor v. Douglass McLain
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compliance with the cure provisions, and any failure to satisfy the statute’s express

prerequisites renders the attempted correction ineffective as a matter of law.

Section 305.103 establishes two independent and mandatory conditions for

avoiding usury liability. The creditor must first correct the violation by taking all

necessary action and making all necessary adjustments, including refunding or

reducing unlawful interest. Second, the creditor must provide written notice of the

violation before the obligor gives written notice or files an action alleging usury.

TEX. FIN. CODE § 305.103(a) (West 2024). A creditor’s failure to satisfy either

requirement defeats the statutory safe harbor.

Here, McLain failed to satisfy both. The timing defect alone forecloses

McLain’s reliance on § 305.103. The statute unambiguously requires that the

creditor’s notice precede the obligor’s notice or lawsuit. TEX. FIN. CODE §

305.103(a)(2) (West 2024). The sequence of events in this case is undisputed. In

November 2023, Tutor provided McLain with written notice identifying the

demanded late fees as usurious interest under the Texas Finance Code. CR 149.

McLain did not issue any corrective notice before that communication. Instead, on

December 1, 2023, after Tutor’s notice had already been delivered, McLain issued a

document styled as a “Texas Finance Code §305.103 Correction of Violation” CR

22-23. Because McLain’s notice followed Tutor’s notice, the statutory prerequisite

was not met, and the cure provision was unavailable as a matter of law. Texas courts

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consistently reject attempts to invoke § 305.103 when the creditor acts only after the

obligor identifies the usury. See Strasburger Enters., Inc. v. TDGT Ltd. P’ship, 110

S.W.3d 566, 574 (Tex. App.—Austin 2003, pet. denied).

Even if McLain could overcome this fatal timing defect, his purported

correction independently fails because it did not actually correct the usury. Section

305.103(a)(1) requires the creditor to take “any necessary action and mak[e] any

necessary adjustment,” including reducing unlawful interest. A valid correction must

eliminate the usurious charge itself. It is not enough to deny the violation, reinterpret

the contract, or assert that the amount collected is somehow permissible.

McLain’s December 1, 2023, notice did none of these things. Rather than

reducing or refunding the usurious late fees, Appellee asserted that no corrective

action was required because Tutor’s total payments remained below the original loan

amount “regardless of any interest rate.” CR 151–52. That position misunderstands

the usury statutes. Usury liability turns on whether a creditor contracted for or

charged interest at an unlawful rate, not on whether the creditor ultimately collected

more than principal. TEX. FIN. CODE § 305.001(a) (West 2024); Pentico, 964 S.W.2d

at 715. A creditor cannot “correct” usury by insisting that no correction is necessary.

McLain’s subsequent conduct confirms that no meaningful correction ever

occurred. In January 2024, Appellee amended his petition to seek interest “not to

exceed 18%.” CR 29–36. But where, as here, a contract specifies no interest rate, the

No. 15-25-00175-CV: Chase Tutor v. Douglass McLain
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lawful rate is six percent per year, not eighteen percent. TEX. FIN. CODE § 302.002

(West 2024); Tubelite, 819 S.W.2d at 805. McLain later moved for summary

judgment while still claiming entitlement to interest exceeding the lawful rate. CR

43–74. These actions demonstrate that the usurious charges were never withdrawn,

reduced, refunded, or amended to comply with Texas law.

Because McLain’s attempted “correction” was both untimely and

substantively deficient, § 305.103 affords no protection. McLain therefore remained

subject to liability under Chapter 305, including statutory penalties and attorney’s

fees. TEX. FIN. CODE §§ 305.001, 305.005 (West 2024). The Trial Court erred in

denying Tutor’s usury defense and counterclaim and in granting summary judgment

in McLain’s favor on this issue.

V. The Trial Court Erred in Awarding Appellee’s Attorney Fees

Attorney’s fees are not an independent cause of action; they are recoverable

only when authorized by statute or contract and only when supported by a valid

substantive recovery. MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d

660, 666 (Tex. 2009). When the underlying claim fails, any award of attorney’s fees

necessarily fails as well. Id.; see also Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 390

(Tex. 1997).

As demonstrated above, McLain’s fraud and breach of contract claims are

barred by limitations as a matter of law. Because McLain was not entitled to

No. 15-25-00175-CV: Chase Tutor v. Douglass McLain
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judgment on either claim, the Trial Court lacked a legal basis to award attorney’s

fees. Reversal of the liability findings therefore requires reversal of the attorney’s-

fees award in its entirety.

Texas law is clear that attorney’s fees are not recoverable for common-law

fraud absent an independent statutory or contractual basis. MBM Fin. Corp., 292

S.W.3d at 667; Tony Gullo, 212 S.W.3d at 304. McLain’s fraud claim does not

provide a statutory basis for fees, and the Trial Court did not identify any

independent contractual provision authorizing fee recovery for fraud. To the extent

the Trial Court awarded fees attributable to McLain’s fraud claim, such an award

constitutes reversible error as a matter of law.

Pursuant to section 38.001 of the Texas Civil Practice and Remedies Code,

attorneys’ fees are recoverable only by a party who prevails on a valid breach of

contract claim. TEX. CIV. PRAC. & REM. CODE § 38.001 (West 2024); see also Green

Int’l, 951 S.W.2d at 390. A plaintiff who fails to establish a valid, enforceable, and

timely contract claim cannot recover fees under the statute.

Here, McLain’s breach of contract claim accrued no later than November 1,

2017, and is barred by the four-year statute of limitations. Because Appellee was not

entitled to recover on the contract as a matter of law, he cannot be deemed a

“prevailing party” under section 38.001, and any fee award predicated on that statute

must be reversed. TEX. CIV. PRAC. & REM. CODE § 38.001 (West 2024).

No. 15-25-00175-CV: Chase Tutor v. Douglass McLain
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Even assuming that some portion of McLain’s contract claim survived,

McLain was still required to segregate recoverable attorney’s fees from

unrecoverable fees. Tony Gullo Motors, 212 S.W.3d at 311–13. Fees incurred for

claims on which attorney’s fees are not recoverable, such as fraud or time-barred

claims, must be segregated unless the claims are so intertwined that segregation is

impossible. Id. Failure to segregate is reversible error when segregation is required.

Id. At a minimum, this failure requires reversal and remand of the attorney’s fees

award for proper segregation.

Texas’s one-satisfaction rule prohibits a plaintiff from recovering multiple

remedies for the same injury under different theories of liability. See Zorrilla v.

Aypco Constr. II, LLC, 421 S.W.3d 54, 66–67 (Tex. App.—Corpus Christi 2013, pet.

denied); McCullough v. Scarbrough, Medlin & Assocs., 435 S.W.3d 871, 916 (Tex.

App.—Dallas 2014, pet. denied).

Here, McLain sought recovery for the same alleged injury, the unpaid balance

of the alleged loan, under both breach of contract and fraud theories. Because

attorney’s fees are not recoverable for fraud, McLain could not bootstrap a fee

recovery by simultaneously pleading contract and fraud based on the same operative

facts. Allowing such recovery would constitute an impermissible double recovery in

violation of the one-satisfaction rule.

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Because McLain was not entitled to recover attorney’s fees as a matter of law,

this Court should reverse and render judgment denying McLain any recovery of

attorney’s fees. Alternatively, at a minimum, the Court should reverse and remand

the fee award for segregation and redetermination consistent with Texas law.

No. 15-25-00175-CV: Chase Tutor v. Douglass McLain
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PRAYER

The trial court’s judgment rests on legal error. McLain’s claims for breach of

contract and fraud accrued in 2017 and were barred by limitations when suit was

filed in 2023. McLain also contracted for and charged usurious interest and failed to

effect a timely or legally sufficient cure under section 305.103 of the Texas Finance

Code. Because the underlying claims fail as a matter of law, the award of damages,

interest, and attorney’s fees cannot stand.

For these reasons, Appellant Chase Tutor respectfully requests that this Court

reverse the trial court’s judgment, render judgment in Tutor’s favor on his affirmative

defense and counterclaim for usury, reverse the summary judgment on McLain’s

time-barred claims, and deny McLain any recovery of attorney’s fees. Alternatively,

Appellant requests reversal and remand for further proceedings consistent with this

Court’s opinion.

No. 15-25-00175-CV: Chase Tutor v. Douglass McLain
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CERTIFICATE OF SERVICE

I certify that on December 22, 2025, this Appellant’s Brief was served on

counsel under Texas Rule of Appellate Procedure 9.5(b):

Duncan G. Farrish
State Bar No. 24142885
duncan@thomaslawtx.com
Griffith “Hunter” Thomas II
State Bar No. 24099403
hunter@thomaslawtx.com
12912 Hill Country Blvd., STE F-233
Austin, TX 78738
Tel: (512) 599-4096
Fax: (512) 713-0680

Russell Frost

No. 15-25-00175-CV: Chase Tutor v. Douglass McLain
APPELLANT’S BRIEF - 36
CERTIFICATE OF COMPLIANCE

This brief complies with Texas Rules of Appellate Procedure 9.4 because the

sections covered by the rule contain no more than 5559 words. The font used in the

body of the brief is no smaller than 14 points, and the font used in the footnotes is

no smaller than 12 points.

Russell Frost

No. 15-25-00175-CV: Chase Tutor v. Douglass McLain
APPELLANT’S BRIEF - 37
Automated Certificate of eService
This automated certificate of service was created by the efiling system.
The filer served this document via email generated by the efiling system
on the date and to the persons listed below. The rules governing
certificates of service have not changed. Filers must still provide a
certificate of service that complies with all applicable rules.

Niki Dashtban on behalf of Russell Frost
Bar No. 24063687
receptionist@russellfrostlaw.com
Envelope ID: 109397399
Filing Code Description: Brief Not Requesting Oral Argument
Filing Description: Appellant's Brief_
Status as of 12/23/2025 11:11 AM CST

Case Contacts

Name BarNumber Email TimestampSubmitted Status

Duncan Farrish duncan@thomaslawtx.com 12/23/2025 8:49:06 AM SENT

Griffith "Hunter" Thomas II hunter@thomaslawtx.com 12/23/2025 8:49:06 AM SENT