author: Justice CASTILLO.

text:
    Robert BILODEAU, Walter J. Mecleary, et al., Appellants, v. David WEBB, John Bailey, Allen Wheeler, David Hagey, KPMG Peat Marwick, L.L.P., Richard H. Thompson, on Behalf of Himself and All Others Similarly Situated, et al., Appellees.
    No. 13-03-529-CV.
    Court of Appeals of Texas, Corpus Christi-Edinburg.
    Aug. 22, 2005.

      Shirley Selz, Gary, Thomasson, Hall & Marks, Corpus Christi, for appellants.
    Roger L. Mandel, Marc R. Stanley, Stanley Mandel & Lola, Jonathan Eric Smaby, Michelle E. Roberts, Roberts & Smaby, Ralph I. Miller, Earl B. Austin, Timothy W. Mountz, Baker & Botts, Robert R. Summerhays, Ray Guy, Weil Gotshal & Manges, Dallas, Marc B. Kramer, Short Hills, NJ, Michael S. Etkin, Rose-land, NJ, Michael James Krueger, Kings-ville, Darrell L. Barger, Hartline Dacus Barger Dreyer, Russell H. McMains, Law Office of Russell H. McMains, Jorge C. Ramgel, The Rangel Law Firm, A.E. Pletcher, Mike Hummell, Huseman & Pletcher, Corpus Christi, G. Paul Howes, Joy Ann Bull, San Diego, CA, Joseph S. Allerhand, New York, NY, Rebecca Robertson, Houston, K. Alan Parry, Raleigh, NC, for appellees.
    Before Justices HINOJOSA, YÁÑEZ and CASTILLO.
   OPINION

Opinion by

Justice CASTILLO.

In this case, the underlying dispute arose subsequent to entry of a settlement in a class action lawsuit in which both appellants and appellees were identified as prospective class members. Appellants do not contest the settlement but challenge the manner of its implementation and distribution under the Plan of Allocation. The trial court rejected appellants’ claims and entered an “Order Approving Plaintiffs’ Distribution of Settlement Proceeds.” The trial court denied appellants’ motions to reconsider and to disqualify class counsel. This appeal ensued. We affirm.

I. Background

Appellants and appellees were originally shareholders in separate companies acquired by Heartland Wireless Communications, Inc. (“Heartland”) in 1996. Appellants were owners of Three Sixty Corporation and its subsidiary, Technivision, Inc. (hereinafter “TSC”). Appellees (“UltraVision”) were owners of UltraVision of Texas, Inc. and its sister companies. The acquisitions involved the payment of some cash and the transfer of Heartland shares of stock.

TSC was sold to Heartland in February 1996 for approximately $36,750,000, with the entire consideration paid to TSC in registered shares of Heartland common shares. Five million dollars worth of those shares were placed in an indemnity escrow for eighteen months, with provision for a partial release after twelve months, to ensure TSC’s performance of its post-closing obligations.

UltraVision was sold to Heartland in June 1996 for $3,500,010, with 10% paid in cash and the remainder paid in unregistered shares of Heartland stock. One hundred thousand dollars worth of those shares were placed in an indemnity escrow for six months to ensure UltraVision’s performance of its post-closing obligations.

Subsequent to the acquisitions but prior to the termination of the escrow account (TSC shares) and prior to the time that UltraVision shares could be publicly sold, Heartland stock plummeted in value. A lawsuit was brought against Heartland and its accounting firm as a class action on behalf of “all persons who purchased or acquired the common stock of [Heartland] between November 15, 1995, and March 20, 1997” (the “Settlement Class Period”). The causes of action included allegations of false and misleading statements in connection with the sale of the stock, false financial statements, negligent and intentional misrepresentation, fraud, and conspiracy. The underlying plaintiffs moved to certify a class, but before the trial court could do so, a stipulation of settlement was filed. Following a hearing, the trial court entered separate orders approving the proposed Plan of Allocation for distribution of the settlement fund and awarding attorney fees to class counsel. On that same date, January 25, 2002, the trial court also entered a final judgment identifying the settlement class and sub-classes and approving distribution of settlement monies. The class notice was approved and forwarded to putative class members.

Disputes arose in 2003 over the manner of implementation and distribution of the settlement as set out in the Plan of Allocation. The Plan of Allocation provided for a value to be assigned to a share of Heartland common stock based upon its date and manner of acquisition, as well as its date of sale. All open market purchases of Heartland stock were limited to 5% of the net settlement fund. Claimants who received unrestricted shares of stock as consideration for companies sold to Heartland during the Settlement Class Period were limited to 10% of the net settlement. The remaining 85% of the net settlement fund was to be designated for those claimants who received restricted shares of stock as consideration for companies sold to Heartland during the Settlement Class Period.

Appellants challenged not the methodology but the manner of distribution of settlement proceeds based upon the Plan of Allocation, including how shares of stock were categorized. After a hearing, a formal order was entered June 19, 2003, approving class counsel’s plan for distribution and finding: (1) the claims of some of appellants (“TSC-A” — prior officers, directors or employees of TSC) were barred by a prior release dated September 1,1998; and (2) claims of other TSC appellants were properly denied because the stock in issue “was not acquired” during the Settlement Class Period.

TSC brings this appeal challenging distribution of the settlement proceeds and, particularly, the trial court’s failure to include TSC in 85% of the settlement fund.

II. Issues on Appeal

Challenging three trial court orders, TSC’s issues on appeal are:

1. The trial court erred as a matter of law in finding that the release of September 1, 1998, bars the claims of TSC-A.
2. The trial court erred as a matter of law in finding that shares transferred to the escrow account on behalf of TSC were not “acquired” during the Settlement Class Period.
3. The trial court erred as a matter of law in failing to find that registered TSC shares placed into the escrow account were “restricted stock,” and therefore eligible to participate in the 85% portion of the settlement fund.
4. The trial court abused its discretion in (a) failing to disqualify class counsel and require full or partial fee forfeiture, and (b) denying TSC’s motion for an affirmative award of fees and expenses.

III. Analysis

A. The Release

In their first issue, appellants argue that the trial court erred as a matter of law when it found that the Release of September 1, 1998, barred the claims of former or current TSC officers, directors and employees.

1. Standard of Review

A trial court’s conclusions of law are not binding on this Court, and we are free to make our own legal conclusions. Harlingen Irrigation Dist. Cameron County No. 1 v. Caprock Communications, 49 S.W.3d 520, 530 (Tex.App.-Corpus Christi 2001, pet. denied); Muller v. Nelson Sherrod & Carter, 563 S.W.2d 697, 701 (Tex.Civ.App.-Fort Worth 1978, no writ).. “Conclusions of law are reviewed de novo as a question of law and will be upheld if the judgment can be sustained on any legal theory supported by the evidence.” Harlingen Irrigation Dist., 49 S.W.3d at 520 (citing Circle C Child Dev. Ctr., Inc. v. Travis Cent. Appraisal Dist., 981 S.W.2d 483, 485 (Tex.App.-Austin 1998, no pet.)). A trial court’s conclusions of law may not be reviewed for factual sufficiency and may be reversed only if they are erroneous as a matter of law. Stable Energy, L.P. v. Newberry, 999 S.W.2d 538, 547 (Tex.App.-Austin 1999, pet. denied); Hofland v. Fireman’s Fund Ins. Co., 907 S.W.2d 597, 599 (Tex.App.-Corpus Christi 1995, no writ). Incorrect conclusions of law do not require reversal, provided that the controlling findings of fact support a correct legal theory. Stable Energy, 999 S.W.2d at 547.

2. Factual History of the Release

Subsequent to the acquisition of TSC by Heartland, a dispute arose concerning Heartland’s misrepresentations with respect to the February 1996 acquisition of the TSC subsidiary Technivision, Inc. No formal suit was filed, but a proposed federal complaint was prepared and tendered to Heartland setting forth causes of action, which included negligent misrepresentation and securities fraud in association with the same purchase/acquisition at issue in this matter. The parties ultimately entered into a mutual release which discharged all claims of TSC, its former and current parent corporations, subsidiaries, predecessors, successors, officers, directors, and employees. The claims released include all existing and potential claims related to the “dispute.” The release, effective September 1, 1998, recites that the dispute concerns the Technivision Acquisition, the Amended and Restated Asset Purchase Agreement (dated October 19, 1995), the Sales Tax Agreement (dated March 15, 1996), and all claims and issues asserted in the attached draft complaint. The attached draft complaint addresses the entire sale of TSC to Heartland for $36.75 million. That complaint articulates causes of action and facts very similar, if not identical, to those raised in the underlying class action. The release therefore extends to the same subject matter in issue in the class action below. This is not disputed by the parties.

In dispute is the authority of the then-treasurer of TSC to sign and effect the release on behalf of its individual officers, directors and employees (TSC-A). Included in the release are “warranties and representations” that the individual executing the agreement on behalf of TSC was fully authorized to do so. The release was executed in accord with the laws of the State of New Jersey.

3. New Jersey Law — Corporate Releases

Since our review is de novo, and since the 1998 release was executed subject to the law of New Jersey, we review that law to determine what authority was required for a corporate officer to enter a binding release.

3.a. Authority of the Treasurer

The 1998 release was executed by the treasurer of the corporation on behalf of the corporation. It is settled New Jersey law that an officer or agent can only bind a corporation to the extent that the power to do the act in question has been (1) expressly conferred upon the officer or agent by the charter, by-laws or corporate action of the stockholders or board of directors, or (2) can be implied from the powers expressly conferred, or which are incidental thereto, or (3) where the act is within the apparent powers which the corporation has caused those with whom its officers or agents have dealt to believe it has conferred. Horner v. Georgia Cas. Co., 100 N.J.L. 347, 126 A. 289, 290-91 (1924); see also Tannenbaum & Milask v. Mazzola, 309 N.J.Super. 88, 706 A.2d 780, 783 (1998, no writ). One dealing with a corporation must inform himself as to the authority of the one purporting to act for the corporation if he seeks to hold the corporation to an agreement made through the agent. Homer, 126 A. at 290. However, it is equally well settled that a “principal is bound by the acts of the agent within the apparent authority which he knowingly permits the agent to assume or which he holds the agent out to the public as possessing.” Alicea v. New Brunswick Theological Seminary, 244 N.J.Super. 119, 581 A.2d 900, 905 (1990) (citing Abeles v. Adams Eng’g Co., Inc., 64 N.J.Super. 167, 165 A.2d 555, 567 (1960), cert. granted, 34 N.J. 327, 168 A.2d 692 (1961), judgm’t modified on other grounds, 35 N.J. 411, 173 A.2d 246 (1961)).

There is no evidence in the record before us that any challenge was ever raised to the authority of the treasurer of TSC to bind that corporation in the 1998 release, and no evidence has been presented to suggest that challenges were raised to the legitimacy of that release at the time it was executed. There is evidence, which was not controverted, that Heartland relied upon the TSC treasurer’s authority. This constitutes, at a minimum, evidence of apparent authority. Id.

3.b. Ownership of the Causes of Action

Presuming the treasurer had full authority to execute the release on behalf of the corporation, we must next determine whether that authority, which effectively binds the corporation, in any manner impacts the claims of appellants TSC-A in this suit.

The original dispute between TSC and Heartland resolved by the 1998 release was brought in the name of the TSC corporation. Part of the settlement included Heartland’s concession to release TSC, as a corporation, from its obligations under the Sales Tax Agreement. This resolution effectively addressed a complaint of the TSC corporation by transferring a benefit to that same TSC corporation.

The causes of action released in the 1998 release do not fall within a prescribed exception (such as where a wrongdoer violates a duty owing directly by him to the stockholder, or a fiduciary relationship requires the wrongdoer to protect the interest of the stockholders, and this duty was violated). Id. The claims in issue were for conduct directed to the TSC corporation, which induced it to sell its assets to Heartland. Paragraphs 8-9 of the draft complaint provide:

As a result of these representations, TSC entered into an agreement ... to sell Heartland substantially all of its assets in exchange for shares of Heartland common stock ... TSC agreed that shares ... would be held in escrow for a period of approximately eighteen months to satisfy certain potential indemnification obligations of TSC to Heartland .... There was a direct relationship between the price of Heartland common stock and the number of shares TSC would receive in exchange....

The causes of action, as articulated, also reflect that “TSC did in fact rely upon the material misrepresentations,” that “TSC exchanged substantially all of its assets,” and then TSC “also suffered a loss of at least $5 million, the value of the stock it agreed to accept and hold and escrow” (paragraphs 40, 41). The alleged misrepresentations and fraud which resulted in the sale of the company to Heartland were compensated for in the exchange of benefits set out in the release.

Texas black-letter corporations law provides that a cause of action for injury to the property of a corporation, or the impairment or destruction of its business, is vested in the corporation, as distinguished from its stockholders, even though it may result indirectly in the loss of earnings to the stockholders. MBank Abilene, N.A v. LeMaire, 1989 WL 30995, 1989 Tex.App. LEXIS 801 (Tex.App.-Houston [14th Dist.] 1989) (designated for published) (quoting Commonwealth of Mass. v. Davis, 140 Tex. 398, 168 S.W.2d 216, 221-22 (1942)). Generally, the individual stockholders have no separate and independent right of action for injuries suffered by the corporation which merely result in the depreciation of the value of their stock. Id.

On its face, the 1998 release reflects that (1) the causes of action belonged to the corporation, and (2) the officer executing the release had the authority to do so on behalf of the corporation and the individual officers and directors as enumerated. The extension of the release to those officers and directors is consistent with the law and with the claims as articulated.

We conclude that the trial court did not err as a matter of law when it determined that those individuals who had previously released their complaints against Heartland, TSC-A, by and through the TSC corporation, were barred by that release from participation in the settlement. We overrule the first issue presented.

B. The Date of Acquisition of Escrowed Shares

The trial court’s finding, articulated in the order of June 19, 2003, reflects its conclusion that the claims of the remaining TSC appellants “and all other claimants whose claims are based on receipt of Heartland common stock held in escrow until late-March 1997 and October 1997 are denied and will not be paid because the stock at issue was not acquired during the Settlement Class Period.” In their second issue, appellants TSC argue that the trial court erred as a matter of law in reaching this conclusion. Appellees counter that the trial court was correct and that, because TSC’s shares were not “acquired” during the defined Settlement Period, appellants are not members of the settlement class at all.

1.Standard of Review

For the same reasons set forth above in our discussion of the release, we conclude this is a question of law to be reviewed de novo and reversed only if it is erroneous as a matter of law. Harlingen Irrigation Dist., 49 S.W.3d at 520.

2.Factual Background of the Escrow Account

The sale of TSC to Heartland, effective February 23, 1996, involved the immediate transfer of numerous shares in Heartland to TSC. However, $5,000,000 worth of shares were placed into an indemnity escrow account, as noted above, to ensure TSC’s performance of its post-closing obligations. Records reflect these shares remained in escrow until late-March 1997 and October 1997. To be eligible to participate in the settlement, the shares in Heartland had to be acquired between November 15,1995, and March 20,1997.

3.Analysis

Appellants urge that, under Texas law, the grantee of a conveyance of real property held in escrow is the owner of the equitable title to the property conveyed, even though legal title does not transfer from the grantor until the conditions of the escrow agreement are satisfied. Cowden v. Broderick & Calvert, Inc., 131 Tex. 434, 114 S.W.2d 1166, 1169 (1938). Moreover, upon performance of the condition and delivery of the deed, the title acquired thereby “relates back to the time when the deed was placed in the custody of the escrow agent.” Id. “[A]s between the parties to the escrow agreement and deed, effect will be given to their intention, evidenced by the instruments, that the deed shall upon performance of the condition take effect from the date of delivery in escrow.” Id.

However, this matter does not involve the transfer of real property but, rather, the issuance of shares of securities. In their response to Contestants’ Brief in Support of their Motion for Reconsideration or Alternatively for New Trial, appel-lees assert that the acquisition of securities is determined by article 8 of the Texas Uniform Commercial Code. The cited sections of the act provide that “a person acquires a security or an interest therein ... if ... the person is a purchaser” and “[djelivery of a certified security to a purchaser occurs when (l)[t]he purchaser acquires possession of the security certificate.” Delivery can also occur when:

(2) another person, other than a securities intermediary, either acquires possession of the security certificate on behalf of the purchaser or ... acknowledges that it holds for the purchaser; or
(3) a securities intermediary acting on behalf of the purchaser acquires possession of the security certificate, only if the certificate is in registered form and is (i) registered in the name of the purchaser, (n) payable to the order of the purchaser, or (iii) specially indorsed to the purchaser by an effective indorsement and has not been indorsed to the securities intermediary or in blank.

Tex. Bus. & Com.Code Ann. § 8.301 (Vernon 2002). The Amended and Restated Asset Purchase Agreement between TSC and Heartland identifies the company holding the $5,000,000 worth of shares in consent escrow, Harris Trust Company of New York, as the “exchange agent.” The Escrow Agreement between TSC and Heartland further provides that the escrow agent is charged to hold, safeguard and dispose of the fund in accord with the terms of that agreement, and to “treat such fund as a trust fund in accordance with the terms hereof and not as the property of TSC.” Importantly, this agreement states that escrow and consent shares shall issue and be held “in the name of’ the escrow agent. “Delivery” of the shares to TSC shall occur only upon satisfaction of the conditions on the escrow fund. By contrast, the definition of “delivery” provided in the business and commercial code provides that delivery to an intermediary or agent is effective to constitute delivery to the purchaser only where the certificate is registered in the name of the purchaser at that time: Such is not the case here.

We conclude that, while ownership of the shares could potentially have transferred to TSC at the time of transfer to the escrow agent, the agreement between the parties was specifically structured to provide otherwise. Based on that specific language, we conclude that TSC did not “acquire” the shares during the Settlement Class Period. We affirm the finding of the trial court and overrule the second issue on appeal.

C. The “Restricted” Shares Issue

In its third issue, TSC argues that the trial court erred as a matter of law in failing to find that -the registered TSC shares placed in escrow were “restricted” shares and therefore eligible to participate in the 85% portion of the settlement fund. Because we have found that the shares were not “acquired” during the Settlement Class Period, we conclude, as did the trial court, that we need not reach this issue.

D. Challenges to Class Counsel

In its fourth and fifth issues, TSC argues that the trial court abused its discretion in failing to disqualify class counsel and require full or partial fee forfeiture, and in denying TSC’s motion for an affirmative award of attorney fees and expenses.

1. Standard of Review

In reviewing a trial court decision under an abuse of discretion standard, we must determine whether the trial court acted without reference to any guiding rules or principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.1985). The exercise of discretion is within the sole province of the trial court, and an appellate court may not substitute its discretion for that of the trial judge. Johnson v. Fourth Ct.App., 700 S.W.2d 916, 918 (Tex.1985). Rather, an abuse of discretion occurs only when the trial court reaches a decision that is “so arbitrary and unreasonable as to amount to a clear and prejudicial error of law.” Id. at 917.

2. Analysis

Generally, conflicts of interest in class actions arise amidst concerns that class counsel has been tempted to further its own interest in securing exorbitant fees as against the interests of the class members. See Gen. Motors Corp. v. Bloyed, 916 S.W.2d 949, 953 (Tex.1996). Clearly, class counsel owes a fiduciary duty to protect the interests of absent class members. Id. Here, appellants allege that class counsel has favored one portion of the class as against appellants. However, we have concluded that the claims in dispute center around a portion of the settlement to which appellants were not entitled in the first place. Because TSC did not “acquire” the escrowed shares during the Class Settlement Period, TSC did not fall within the class with respect to those es-crowed shares. No conflict of interest arises simply because different subclasses are designated as part of a settlement fund. Farmers Ins. Exchange v. Leonard, 125 S.W.3d 55, 65-66 (Tex.App.-Austin 2003, no pet.).

Adequacy of representation is a question of fact addressed to the sound discretion of the trial court. Weatherly v. Deloitte and Touche, 905 S.W.2d 642, 651 (Tex.App.-Houston [14th Dist.] 1995, writ dism’d w.o.j.). There is no abuse of discretion in finding adequacy if there is evidence to support the finding. Glassell v. Ellis, 956 S.W.2d 676, 681-82 (Tex.App.-Texarkana 1997, pet. dism’d w.o.j.). Only a conflict that goes to the very subject matter of the litigation will defeat a finding of adequacy. Nissan Motor Co., Ltd. v. Fry, 27 S.W.3d 573, 583 (Tex.App.-Corpus Christi 2000, pet. denied). Moreover, just as speculative allegations concerning potential conflicts are insufficient to show that the trial court abused its discretion in finding the representatives to be adequate, Employers Cas., 886 S.W.2d at 476, we conclude that allegations derived from an incorrect analysis of the law are similarly insufficient to demonstrate a conflict or abuse of discretion.

Class counsel must possess the qualifications and experience to handle the class action litigation, and must fairly and adequately protect the interests of the class. Leonard, 125 S.W.3d at 68. Their individual interests must not be antagonistic to the members of the subclasses which they represent. Id. However, class counsel owes no duty to promote a position inconsistent with the definition of the class or contrary to the law. Logically, there is no breach of the fiduciary duty by class counsel where no duty is owed to act in the manner as contended and, indeed, where to so act would result in a breach of fiduciary duty.

Similarly, fee forfeiture or disgorgement is appropriate only where there is a breach of duty. “The remedy of fee forfeiture presupposes that a lawyer’s clear and serious violation of a duty to a client destroys or severely impairs the client-lawyer relationship and thereby the justification of the lawyer’s claim to compensation.” Burrow v. Arce, 997 S.W.2d 229, 238 (Tex.1999). While a client need not prove actual damages in order to obtain forfeiture of an attorney fee for the attorney’s breach of a fiduciary duty to the client, the remedy is restricted to “clear and serious” violations of duty. Id. at 240.

The trial court below conducted an extensive hearing addressing the appropriateness of class counsel’s representations, its ability to adequately represent all components of the class, the appropriateness of the settlement, and of the fees awarded to class counsel. It then conducted an extensive hearing addressing the concerns of appellants, including those related to class counsel. The trial court found no breach of duty, and no reason to change its designation of class counsel or its fee award. We find no abuse of discretion by the trial court. Appellants’ fourth and fifth issues are overruled.

IV. Conclusion

We affirm the findings and the judgment of the trial court.

      .Appellants are Robert Bilodeau, Walter J. Mecleary, Hector R. Gonzales, Ernest Manu-wald, Robert H. Greenwood, Anna-Lisa Bilo-deau, Ella Mae Manuwald, Paul Chiaverini, Theresa Mecleary, Maria T. Mecleary, Rand Capital Corporation, ERCM Investments, Charles Ughette, Capital Cable Partners, Robert Zitter, Edward D. Horowitz, Engineered Sales Company, Douglas Dittrick, Workaids Corp. Emp. Ret. Trust, Workaids Corp. Emp. Pen. Plan, Irving Bialer Assoc. Inc. Emp. Ret. Plan, Irving Bialer Assoc. Inc. Emp. Pen. Plan & Trust, Harold F. Lenfest, James Arrow and all other claimants whose claims are based on receipt of Heartland common stock held in escrow during the Settlement Period.

      . Appellees are Richard Thompson on behalf of himself and others similarly situated.

      . Securities regulations at the time precluded those shares from being sold to the public until a date after the end of the Class Settlement Period.

      . We note that the underlying lawsuit was initiated by the plaintiff class against Heartland on July 15, 1998. However, appellants were not necessarily aware of this litigation at that time and, indeed, did not appear in this matter until after they received copies of the class notice.

      . Value of the total settlement was $5,050,000.

      . The "Net Settlement Fund” was defined to be those monies remaining after payment of litigation and administrative expenses, and attorney fees.

      . These include Robert Bilodeau, Walter J. Mecleary, Hector R. Gonzales, Ernest Manu-wald, and Robert H. Greenwood.

      . These individuals include the remaining appellants in this matter.

      . We note appellees’ contention that the appropriate standard of review is abuse of discretion. Although the procedural posture of the case is not typical, the finding at issue is one which addresses entitlement to recover under a portion of the settlement:
      The Court hereby finds and concludes that the claims of [TSC-A] are denied and will not be paid because the claims at issue in the captioned case were released by each of them in the Settlement Agreement and Mutual Release dated effective as of September 1, 1998.
      Whether or not the claims to participate in the larger portion of the settlement fund are so precluded is a matter of law.

      . At the motion for reconsideration hearing, Bilodeau testified that the TSC treasurer who signed the release is deceased. Bilodeau denied knowledge of the release until his claim was denied. He denied he authorized the treasurer to execute the release either officially or individually.

      . This reliance is set out in the affidavit of Curtis Henderson, general counsel to Heartland, who was involved in negotiation of the acquisition and subsequent dispute and settlement agreement with TSC.

      . We also note John Bailey’s affidavit, attached to the Plaintiffs' Memorandum of Law in Support of Motion for Approval of Settlement and Plan of Allocation of Settlement Proceeds, which states that the acquisition of TSC was a bit different, because "[i]ts shareholders consisted primarily of entities as opposed to individual investors.”

      . We further note that the Escrow Agreement between TSC and Heartland, which accompanied the Amended and Restated Asset Purchase Agreement, relates that "TSC shall act as the representative of the persons entitled to receive ... the Escrow Shares and the Consent Shares, in accordance with the Escrow Agreement.” It continues:
      TSC is vested with the authority, duty and responsibility to represent the interests of the Three Sixty Stockholders in the escrow funds ... [and] the resolution, action, decision, consent or instruction of TSC shall be final, conclusive and absolutely binding upon each of the Three Sixty Stockholders, and Heartland and the Escrow Agent may rely upon any such resolution, action, decision, consent or instruction of TSC as being the resolution, action, decision, consent or instruction of each and all of the Three Sixty Stockholders.

      . Tex. Bus. & Com.Code Ann. § 8.104(a) (Vernon 2002).

      . Tex. Bus. & Com.Code Ann. § 8.301 (Vernon 2002).

      . The separately attached Escrow Agreement identifies that same entity as the "escrow agent.”

      . We nevertheless note that the business and commercial code requires that a certified security note any restrictions on the certificate itself. Tex. Bus. & Com.Code Ann. § 8.204 (Vernon 2002). The Asset Purchase Agreement between TSC and Heartland does not provide for any restrictive language associated with the shares, which were registered. By contrast, the Asset Purchase Agreement between UltraVision and Heartland includes a specific Exhibit 1.2, entitled "Restrictive Legend” which articulates specific restrictions. The term "restricted” is specifically used in the transaction and is a term with known and accepted meaning in the context of securities law.

      . We note the arguments raised in Farmers Ins. Exchange v. Leonard, 125 S.W.3d 55, 65-66 (Tex.App.-Austin 2003, no pet.), with respect to the potential for conflicts between settlement sub-classes competing for “the maximum return from the settlement fund," a scenario which is asserted here. We similarly distinguish Amchem Prods. v. Windsor, 521 U.S. 591, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997) and Ortiz, v. Fibreboard Corp., 527 U.S. 815, 119 S.Ct. 2295, 144 L.Ed.2d 715 (1999), each of which dealt with personal injury damages. In this case, determination of entitlement to various portions of the settlement fund is a matter of law, and that entitlement can be calculated to a mathematical certainty. Farmers, 125 S.W.3d at 66-67.


source: Caselaw Access Project

author: Justice MOSELEY.

license: Public Domain

text:
    Linda Sue Rusche COOK, Appellant, v. Travis B. STALLCUP and Charlene Hill, Appellees.
    No. 05-04-00672-CV.
    Court of Appeals of Texas, Dallas.
    Aug. 26, 2005.

      Charles H. Steen, Dallas, for appellant.
    Charlene Hill, Richardson, pro se.
    Thomas C. Barron, Law Office of Thomas C. Barron, P.C., Dallas, for appellee.
    Before Justices MOSELEY, FRANCIS, and MAZZANT.
   OPINION

Opinion by

Justice MOSELEY.

Linda Sue Rushe Cook appeals the trial court’s order denying her post-judgment motion to release funds held in the court’s registry. In a single issue, she contends she is entitled to those funds. Neither appellee filed a brief. For the reasons below, we resolve Cook’s single issue in her favor, reverse the trial court’s order, and remand this matter to the trial court with instructions to release the funds to Cook.

I. FACTUAL AND PROCEDURAL BACKGROUND

Cook filed a forcible entry and detainer action against Stallcup in a justice of the peace court in Denton County to evict Stallcup from her home in Carrollton. Stallcup subsequently sued Cook for divorce in the 211th Judicial District Court in Denton County. He alleged he and Cook married in 1973 and ceased to live together as husband and wife in January 2003, and requested a division of community property, including the Carrollton home. Cook filed an answer and counterclaim, asserting she had never been married to Stallcup. That court ordered the Carroll-ton property sold and the proceeds of the sale, $21,020.79, deposited into the court’s registry. The parties eventually nonsuited their claims in that case.

Cook then filed this suit (the “Dallas County suit”) against Stallcup and Hill in the 302nd Judicial District Court in Dallas County. She sought a declaratory judgment that she and Stalleup had never been married, and that Stalleup had been married to Hill until 1999. Cook also asserted tort claims. Stalleup filed a counter-petition for divorce and a division of community property.

Stalleup also filed another lawsuit in the 393rd Judicial District Court of Denton County, seeking a divorce from Cook and a property division. That suit was transferred to Dallas County.

Subsequently, the 211th Judicial District Court transferred the $21,020.79 from its registry to the registry of the court for the Dallas County suit “for that Court to adjudicate the parties’ respective claims to it.” In its order, the 211th District Court stated there was no longer a live dispute in Denton County and the parties’ disputes were properly before the court in the Dallas County suit. Thus the money came to be deposited into the registry of the court below.

In the Dallas County suit, Cook obtained a summary judgment on her declaratory judgment claim that she and Stalleup were never married. Cook also obtained a default judgment against Hill. On November 17, 2003, Cook nonsuited her remaining tort claims, thus making the court’s judgment final for purposes of appeal. See In re Bennett, 960 S.W.2d 35, 38 (Tex.1997) (“[T]he signing of an order dismissing a case, ..., is the starting point for determining when a trial court’s plenary power expires.”).

Stalleup timely filed motions for new trial. However, the motions were overruled by operation of law on January 31, 2004, because the trial court did not rule on those motions until February 26, 2004. See Tex.R. Civ. P. 329b(c) (“In the event an original ... motion for new trial ... is not determined by written order signed within seventy-five days after the judgment was signed, it shall be considered overruled by operation of law on expiration of that period.”). Accordingly, the trial court’s plenary power expired on March 1, 2004. See Tex.R. Civ. P. 329b(e) (“If a motion for new trial is timely filed by any party, the trial court, regardless of whether an appeal has been perfected, has plenary power to grant a new trial or to vacate, modify, correct, or reform the judgment until thirty days after all such timely-filed motions are overruled, either by a written and signed order or by operation of law, whichever occurs first.”); Thomas v. Oldham, 895 S.W.2d 352, 356 (Tex.1995).

Cook filed a “post-judgment motion to release monies in registry,” requesting the court to disburse the funds to her attorney, in trust for her. Stalleup filed a response, in which he objected to the withdrawal of the funds because, he argued, they “represent a portion of the proceeds from the sale of the parties[’] marital domicile” and asking that “spousal support payments” be made from the funds “until final trial.” After a hearing, the trial court denied Cook’s motion. This appeal followed.

II. APPLICABLE LAW AND STANDARD OF REVIEW

A trial court has quasi in rem jurisdiction to determine who owns funds tendered into the court’s registry. Madeksho v. Abraham, Watkins, Nichols & Friend, 112 S.W.3d 679, 686 (Tex.App.Houston [14th Dist.] 2003, pet. denied) (citing Bryant v. United Shortline Inc. Assurance Servs., N.A., 972 S.W.2d 26, 29 (Tex.1998)). “Funds on deposit in the registry of a trial court are always subject to the control and order of the trial court, and the court enjoys great latitude in dealing with them.” Burns v. Bishop, 48 S.W.3d 459, 467 (Tex.App.-Houston [14th Dist.] 2001, no pet.).

The trial court is vested with explicit statutory authority to enforce its judgments. Katz v. Bianchi, 848 S.W.2d 372, 374 (Tex.App.-Houston [14th Dist.] 1993, orig. proceeding); Tex.R. Civ. P. 308. In addition, a trial court is vested with inherent judicial authority to enforce its orders and decrees. Katz, 848 S.W.2d at 374. The only limit on this authority is that enforcement orders may not be inconsistent with the original judgment and must not constitute a material change in substantial adjudicated portions of the judgment. Id. Post-judgment orders embodying awards to claimants or enforcing the court’s judgment itself are appealable orders; they function like judgments. Kenseth v. Dallas County, 126 S.W.3d 584, 600 (Tex.App.-Dallas 2004, pet. denied).

III. DISCUSSION

A. Trial Court Jurisdiction

Cook addresses Stallcup’s argument, made at the hearing on the motion, that the trial court had no jurisdiction because the funds in the registry were traceable to real property in Denton County, not Dallas County. Cook asserts that Stallcup’s argument relates to venue, not jurisdiction.

Section 15.011 of the civil practice and remedies code provides:

Actions for recovery of real property or an estate or interest in real property, for partition of real property, to remove encumbrances from the title to real property, for recovery of damages to real property, or to quiet title to real property shall be brought in the county in which all or a part of the property is located.

Tex. Civ. PRAC. & Rem.Code Ann. § 15.011 (Vernon 2002). This is a venue provision, and it is axiomatic that “venue” provisions do not confer “jurisdiction.” Compass Exploration, Inc. v. B-E Drilling Co., 60 S.W.3d 273, 277 (Tex.App.-Waco 2001, no pet.). Accordingly, the trial court’s jurisdiction was not determined by section 15.011.

B. Dispersal of Funds in Registry

The 211th Judicial District Court’s order transferring funds stated that the funds “were deposited into the Court’s registry, pending resolution of the parties’ dispute” and that the funds were transferred to the registry of the 302nd Judicial District Court “for that Court to adjudicate the parties’ respective claims to it” and “for further disposition by the 302nd Judicial District Court” in this cause number. Cook argues the only dispute regarding the ownership of the funds in the registry was whether Stallcup had a joint interest in the Carrollton property based on an alleged marriage. She contends that because the trial court ruled against Stallcup on that issue, she is entitled to the funds as the sole owner.

We agree. The trial court’s judgment that there was no marriage disposed of Stallcup’s claim to the property and to the funds. See Tex. Fam.Code Ann. § 3.002 (Vernon 1998) (“Community property consists of the property, other than separate property, acquired by either spouse during marriage.”). The trial court did not set aside or modify its judgment, and Stallcup has not challenged that judgment on appeal.

As a result, the trial court’s plenary power over this judgment expired on March 1, 2004. Thus, the parties’ dispute as to the ownership of the funds was resolved in Cook’s favor. Thereafter, the trial court had power only to enforce its judgment, subject to the limitation that any enforcement may not be inconsistent with the original judgment and must not constitute a material change in substantial adjudicated portions of the judgment. See Tex.R. Civ. P. 308; Katz, 848 S.W.2d at 374. Refusing to release the funds in the registry to Cook violates this principle. Accordingly, we conclude the trial court erred by denying Cook’s post-judgment motion to release the funds in the registry. See, e.g., Allen v. Allen, 751 S.W.2d 567, 578 (Tex.App.-Houston [14th Dist.] 1988, writ denied) (where proceeds from sale of oil and gas interest escrowed by placing them in court’s registry pending final disposition of ownership, trial court properly ordered payment to party after determining rightful ownership), overruled, on other grounds by Formosa Plastics Corp. USA v. Presidio Engr’s & Contractors, Inc., 960 S.W.2d 41, 47 (Tex.1998).

We resolve Cook’s single issue in her favor. We reverse the order of the trial court and remand this case with instructions to order the clerk of that court to release the funds to Cook, specifically $21,020.79, including any accrued interest and less any required fees and costs of court. See Tex. Loo. Gov’t Code Ann. § 117.121(a) (Vernon Supp.2004-05) (“Money may be paid from the registry fund only on checks or drafts signed by a clerk on the written order of the court with proper jurisdiction....”): Eikenburg v. Webb, 880 S.W.2d 781, 782 (Tex.App.Houston [1st Dist.] 1993, orig. proceeding).

      . Nothing in the record shows the status of the forcible entry and detainer action.


author: Justice BRIDGES.

text:
    Kathleen K. BAIRD, Appellant v. CITY OF MELISSA, Texas, Appellee.
    No. 05-04-01018-CV.
    Court of Appeals of Texas, Dallas.
    Aug. 31, 2005.

      William D. Cramer and John R. Roach, Jr., Roach, LLP, Plano, TX, for Appellant.
    Richard M. Abernathy, Rebecca H. Brewer and Charles J. Crawford, Abernathy, Roeder, Boyd & Joplin, P.C., Larry R. Boyd, Boyd & Veigel P.C., McKinney, TX, for Appellee.
    Before Justices WRIGHT, BRIDGES, and RICHTER.
   OPINION

Opinion by

Justice BRIDGES.

Kathleen Baird appeals the summary judgment in favor of the city of Melissa terminating Baird’s nonconforming use of her property as a recreational vehicle (RV) park and ordering the RVs removed. Baird asserts that summary judgment was in error because (1) the pertinent ordinance does not prohibit use as an RV park, and (2) the affirmative defenses raised are legally cognizable and she raises fact questions on each of those defenses. We affirm the trial court’s judgment.

Facts

The property (the “Property”) in question is located within the City of Melissa (the “City”). It has been used as an RV park since 1984, when John Turbeville, Jr. was granted a permit from the Melissa City Council. Turbeville requested permission to have travel trailers parked on the Property on a temporary basis for seasonal workers. The City granted Turbeville a permit for three trailers for six months, followed by an evaluation. It appears this evaluation never took place.

In 1981, the City adopted a Comprehensive Zoning Ordinance, which zoned the Property as Commercial-1 (“C-l”). The use of property in a C-l district as an RV park was not expressly forbidden or allowed. In 1992, the City revised the zoning ordinance. The new ordinance describes a C-l district as a “Restricted Commercial District” and lists a “Schedule of Uses and Parking Requirements,” which lists various uses and the corresponding zoning districts in which they might operate or be constructed. An “RV park” is not listed in any zoning district. The section governing nonconforming uses and structures states that “no nonconforming use or structure may be expanded or increased beyond the lot or tract upon which such nonconforming use is located as of the effective date of this ordinance.”

In 1986, the City passed an ordinance governing water use. The water ordinance prohibited more than one “residence, dwelling, or building” from receiving water from only one meter. That ordinance was clarified later, to make clear that it includes recreational vehicles located in an RV park. In 1989, the City adopted an ordinance governing sewer uses.

In March 1990, the City sent Turbeville a letter giving him ten days to come into compliance with the water and sewer ordinances. In August 1990, Turbeville addressed the City Council, which permitted his using only one sewer connection and one water meter for the Property, which had five RVs on it at the time.

In February 1996, Baird and her then-husband purchased the Property from Turbeville. There is evidence suggesting there were six RVs on the Property at that time. Baird stated in her affidavit that she made various improvements to the Property, including renovating the retail building into a laundry facility and office for the RV park, laying out new pads for RV sites, installing cable connections, and upgrading water and sewer connections. Today there are spaces for twenty hookups, and at the time of her deposition in this suit, Baird acknowledged there were eighteen RVs on the Property. Baird also stated there are “eight to nine” water meters on the Property.

In November 2001, the City sent Baird a letter demanding that the Property be brought into compliance with all current ordinances and terminating any protected status as a nonconforming use. The City demanded the RVs be removed within thirty days. Baird did not comply. In May 2002, the City filed its petition and application for temporary injunction in this suit, asking for declaratory judgment and the removal of all RVs from the Property.

In the summer of 2003, the Planning and Zoning Committee (“P & Z”) entertained a proposal to amend the zoning ordinance, to provide penalties for violations of that ordinance and provide an “amortizing” mechanism to extinguish nonconforming uses (the “Amortizing Ordinance”). On July 17, 2003, the City held a public hearing on the proposed ordinance, after which the P & Z decided not to recommend to the City Council that it be adopted. In July 22, 2003, the City Council considered the proposed ordinance at a public hearing during their regularly scheduled meeting; given the P & Z’s decision not to recommend adoption, the City Council declined to pass it. The council reviewed appointments to the City’s boards and commissions. All but one member of the P & Z were removed and new members were voted in. On August 28, 2003, the new members of the Commission voted to recommend to the City Council to accept the proposed ordinance governing nonconforming uses. In September 2003, the City Council passed the Amortizing Ordinance.

In October 2003, the City gave notice of a special meeting and hearing to set a compliance date, pursuant to the newly passed ordinance, to terminate Baird’s nonconforming use. At the hearing, Baird and her attorney made a presentation to the City Council. Council member New-some states in her affidavit that the decision to terminate Baird’s nonconforming use was made pursuant to a “pre-pre-pared” motion and that no discussion occurred on “public necessity” or any of the factors listed in the ordinance for setting an amortization period. The City Council gave Baird about two and one-half weeks, until November 15, 2003, to remove all RVs from the Property. This date was later extended by agreement to December 5, 2003.

The trial court granted summary judgment in favor of the City. In its final judgment, the court declared that the nonconforming use of the property as an RV park was terminated and ordered that all RVs be removed instanter. The trial court suspended enforcement pending this appeal.

I. Unpermitted Use

In her first issue, Baird argues that the City failed to establish that her úse of the Property for an RV park was an unpermitted use under the city’s zoning ordinance. She argues that the pertinent ordinance, the Comprehensive Zoning ordinance adopted in 1992, listed some 250 + permitted uses, showing in a grid whether such use was “permitted,” “prohibited,” or “permitted with specific approval” by the City. She points out that the category “RV park” is not listed at all in the ordinance. Thus, she argues, an RV park is not prohibited; it is merely not listed. In addition, the City has a provision for approving non-listed uses, and there is no evidence the City ever considered whether “RV park” should be a listed- category. Therefore, she argues, use as an RV park was not prohibited; and, the trial court erred in terminating the Property’s use as an RV park.

We apply the same rules to construe municipal ordinances as those applied to construe statutes. Bd. of Adjustment of the City of San Antonio v. Wende, 92 S.W.3d 424, 480 (Tex.2002). Our goal is to discern the legislative body’s intent; we look first to the plain meaning of the text. Id. To give effect to the legislative enactment as a whole, we do not assign a meaning to a provision that would be inconsistent with other provisions of the enactment. Id. (citing Meritor Auto., Inc. v. Ruan Leasing Co., 44 S.W.3d 86, 90 (Tex.2001)). Because statutory construction is a question of law, we review the issue de novo. McIntyre v. Ramirez, 109 S.W.3d 741, 745 (Tex.2003).

The plain language of the text of the ordinance prohibits uses that are not specified as “permitted” under the schedule:

Land and buildings in each of the following classified districts may be used for any of the following listed uses but no land shall hereinafter be used ... for other than those uses specified for the district in which it is located as set forth by the following schedule of uses.

It is undisputed that the schedule does not list “RV park” as a permitted use in a district zoned as C-l, or in any district. But the ordinance plainly states that no land shall be used for uses other than those specified for the district in which the land is located. That a procedure exists to classify uses not listed does not change the prohibition of yet-unlisted uses. We conclude that Baird’s use of the Property as an RV park is not a permitted use under the 1991 Comprehensive Zoning Ordinance. Accordingly, we resolve Baird’s first issue in favor of the City.

II. Equitable Affirmative Defenses

Baird asserts the equitable affirmative defenses of waiver, laches, bad faith, and estoppel to challenge the City’s enforcement actions to terminate her use of the Property as an RV park. The City presented as summary-judgment grounds for termination its enforcement actions under both the Comprehensive Zoning Ordinance and under the Amortization Ordinance. We examine the City’s enforcement of the Amortization Ordinance.

The record shows that after passing the Amortization Ordinance in August 2003, the City gave notice of a special meeting to hear a request to set a compliance date for Baird under the Amortization Ordinance. On October 21, Baird and her attorney spoke collectively for about 30 minutes and after that, the council passed a motion setting the compliance date as November 15, 2003.

Standard of Review

The trial court did not specify whether it granted summary judgment for the City on its no-evidence or traditional summary-judgment motion. We review the judgment under the traditional standard. The standard governing traditional summary judgment is well established. Tex.R. Civ. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex.1985). The movant has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Id. To decide whether a disputed material fact issue exists, we take as true the evidence favorable to the non-movant. Id. We indulge every reasonable inference, and resolve any doubts, in favor of the non-movant. Id.

The Amortization Ordinance

The Amortization Ordinance permits the City to order a non-conforming use terminated upon finding a “public necessity for expedited compliance” with the zoning regulations, based on an examination of the character of the surrounding neighborhood, the degree of incompatibility of the use, and the effect of its use or cessation of use. The ordinance also provides a number of factors that must be considered in determining a reasonable amortization period, including the owner’s capital investment and return on that investment and costs resulting from discontinuing the use.

The City argues that its enforcement of its zoning ordinance is a governmental function and thus, as a matter of law, not subject to Appellant’s equitable defenses. Appellant asserts that this is the type of case in which such defenses are cognizable and that she raises fact questions on each of her affirmative defenses. She asserts the City waived its right to enforce its ordinances, as it had acquiesced in the use of the Property as an RV park since 1984, first giving her notice of a violation in November 2001. She asserts the defense of laches, urging that she relied on the City’s permission to Turbeville in 1990 for one water and sewer connection, coupled with the City’s years-long delay in enforcement, such that she made improvements to the Property.

Baird also asserts the defense of bad faith and unclean hands, stating that the City “attempted to circumvent the judicial process through application of a dubious non-conforming-use ordinance.” She challenges the process by which the City enacted the Amortization Ordinance: after the P & Z recommended it not be adopted, the membership of the P & Z was largely replaced, and thereafter the ordinance was adopted. Baird asserts that the mayor, a new member of the Planning & Zoning board, and the municipal judge had an economic motive to terminate her RV park, as they owned or financed property in the vicinity. She asserts the value of that property would be enhanced if Baird were forced to cease the RV park operation.

Baird further asserts bad faith in the City’s application of the Amortization Ordinance to her case, in that the City failed to make any findings on the “factors” listed for consideration of a compliance date. The affidavit of a council member states that the decision to terminate Baird’s nonconforming use was made pursuant to a “pre-prepared” motion and that no discussion occurred on “public necessity” or any of the factors to set the amortization period.

Legal Principles

Municipal zoning ordinances requiring the termination of nonconforming uses under reasonable conditions are within the scope of municipal police power. City of University Park v. Benners, 485 S.W.2d 773, 778 (Tex.1972) (referring to reasonable use of what is termed the “amortization” technique). The courts’ review of a duly enacted ordinance is circumscribed and the party attacking the ordinance has an “extraordinary burden” of showing that “no conclusive or even controversial or issuable fact or condition existed” which would authorize the municipality’s passage of the ordinance. City of Brookside Village v. Comeau, 633 S.W.2d 790, 792-93 (Tex.1982) (zoning is recognized tool of community planning, allowing municipality, in exercise of its legislative discretion, to restrict use of private property). If the evidence raises an issuable fact whether the zoning regulation has a substantial relationship to the protection of the public’s health, safety or welfare, then the restriction must stand as valid. Id.

Affirmative defenses based in equity have been consistently held not to apply when the activity complained of is a governmental function. Truong v. City of Houston, 99 S.W.3d 204, 211 (Tex.App.Houston [1st Dist.] 2002, no pet.). The equitable doctrines of estoppel and laches are not available against a city when it is enforcing zoning ordinances, even if the facts might otherwise support their application, because the city is discharging a governmental function. Marriott v. City of Dallas, 635 S.W.2d 561, 564 (Tex.App.Dallas 1982), aff'd, 644 S.W.2d 469 (Tex.1983).

“The general rule has been in this state that when a unit of government is exercising its governmental powers, it is not subject to estoppel.” Hutchins v. Prasifka, 450 S.W.2d 829, 835 (Tex.1970). The Hutchins court noted an exception, stating “a municipality may be estopped in those cases where justice requires its application, and there is no interference with the exercise of its governmental functions.” Id. at 836. But estoppel should be applied “with caution and only in exceptional cases where the circumstances clearly demand its application to prevent manifest injustice.” Id. We will look at the totality of the circumstances. Truong, 99 S.W.3d at 212. A party with “unclean hands” will not be permitted to pursue equitable relief. Id.

The supreme court applied the exception in Roberts v. Haltom City, 543 S.W.2d 75 (Tex.1976). City officials had told an injured party that the city was not responsible for the conditions that caused her injuries, directing her to a third party. When the plaintiff discovered that the city was indeed liable, a thirty-day notice requirement had lapsed. Id. at 76-77. The court held that the city could be estopped by the conduct of its officials in that circumstance. Id. at 80.

This Court has found circumstances “exceptional” and held a city estopped from enjoining a property owner’s use of his property in violation of a zoning ordinance. City of Dallas v. Rosenthal, 239 S.W.2d 636 (Tex.Civ.App.-Dallas 1951, writ ref'd n.r.e.). The landowner had obtained a building permit and discussed the renovation work with the city inspector. The renovating continued for eighteen months. The court affirmed the trial chancellor’s refusal to enjoin the landowner’s use of the property: the deviations were well within the purview of the initial discussions with the inspector — who was authorized to issue the permit — and the city had remained silent until practical completion of all the work was done. Id. at 645.

Others courts have applied equity principles to municipalities as follows: Houston Lighting & Power Co. v. City of Wharton, 101 S.W.3d 633, 639 (Tex.App.-Houston [1st Dist.] 2003, pet. denied) (laches defense available; for 30 years cities stood by and took franchise fees); City of Dallas v. GTE Southwest, Inc., 980 S.W.2d 928, 937 (Tex.App.-Fort Worth 1998, pet. denied) (waiver defense available; over 6 years city took franchise fees without objection); City of Corpus Christi v. Nueces County Water Control and Imp. Dist. No. 3, 540 S.W.2d 357, 378 (Tex.Civ.App.-Corpus Christi 1976, writ ref'd n.r.e.) (laches available; city stood by 40 years before asserting abandonment, while district diverted water and became dependent on water source).

Analysis and Conclusion

Concerning the City’s enactment of the Amortization Ordinance, we conclude that Baird fails to meet the “extraordinary burden” of showing that “no conclusive or even controversial or issuable fact” was raised on the question whether the zoning regulation has a substantial relationship to the protection of the public’s health, safety or welfare. See Comeau, 633 S.W.2d at 792-93 (if issuable fact concerning substantial relationship to general health or welfare, then restriction must stand as valid).

Concerning the City’s enforcement of the Amortizing Ordinance, the circumstances Baird complains of do not rise to the level of an exceptional case warranting court intervention. Unlike the facts in Roberts, Bail’d does not assert that city officials affirmatively misled her so as to jeopardize a right she already possessed. Similarly, this is not like the Rosenthal case, where the city gave the landowner permission to renovate, through an inspector who was authorized to issue that permit and the deviations were within the purview of the discussions with the inspector. Rosenthal, 239 S.W.2d at 645. Neither are Baird’s factual allegations similar to the cases involving franchise fees or water usage. Houston Lighting & Power, 101 S.W.3d at 639; City of Dallas v. GTE Southwest, Inc., 980 S.W.2d at 937; Corpus Christi, 540 S.W.2d at 378.

Rather, Baird asserts she relied on the City’s early approval for Turbeville to use only one water and sewer connection, coupled with the City’s non-enforcement over time. But the affirmative permission given Turbeville was for five RVs, which Baird increased to eighteen RVs over five years, with no affirmative permission by the City for this enlarged, unpermitted use. The facts in this case are more comparable to those in Truong, 99 S.W.3d 204, where the court affirmed the trial court’s summary judgment against appellants on their equitable defenses. When the City of Houston attempted to enforce deed restrictions prohibiting commercial activity, the plaintiffs asserted equitable defenses, citing the long-term use of the property for commercial activity, including the issuance of permits to build a commercial structure. Id. at 212-13. In affirming summary judgment for the city, the court found it significant that the city’s enforcement was within five years of the appellant’s purchase of the property. Similarly, the enforcement against Baird was within five years of her purchasing the property, during which time she increased the un-permitted use.

Accordingly, we conclude that the instant case does not fall within the purview of those “exceptional eases” that warrant the court’s imposing rules of equity to prevent “manifest injustice.” Hutchins, 450 S.W.2d at 836. We resolve Baird’s third issue in favor of the City.

We AFFIRM the trial court’s summary judgment in favor of the City.

      . In her affidavit, City Council member Teri Newsome states that a business partner of Melissa’s mayor was "placed” on the commission. These partners, she asserts, have land interests in the City within a mile of the RV park. "Aside from a voluntary shift in positions, no other members of City Boards or Commissions were replaced that night.”

      . Resolving that summary judgment in favor of the City is proper based on the Amortization Ordinance, we need not reach Baird’s issue concerning the Comprehensive Zoning Ordinance.

      . The ordinance provides as follows:
      30.8 Amortization of Nonconforming Uses. A. Determination of Need for Expedited Compliance. Any person who resides or owns real property in Melissa may request that the City Council establish a compliance date for a nonconforming use. Upon receiving such a request, the City Council shall determine whether there is a public necessity for expedited compliance with the zoning regulations. The following factors must be considered by the city council in determining the public necessity for expedited compliance:
      1. The character of the surrounding neighborhood.
      2. The degree of incompatibility of the use to the zoning district in which it is located.
      3. The effect of the nonconforming use on the surrounding area and the effect of its cessation on that area.

      . That section also provides, "If the owner did not have an investment in the use before it became a nonconforming use, the owner is not entitled to an amortization to recover any of the costs referenced in the factors.”


text:
    William McPHERSON, Appellant, v. COMMONWEALTH of Kentucky, Appellee.
    No. 2004-SC-000068-MR.
    Supreme Court of Kentucky.
    Aug. 25, 2005.

      Karen Shuff Maurer, Assistant Public Advocate, Department of Public Advocacy, Frankfort, Counsel for Appellant.
    Gregory D. Stumbo, Attorney General of Kentucky, Matthew Robert Krygiel, Assistant Attorney General, Criminal Appellate Division, Office of the Attorney General, Frankfort, Counsel for Appellee.
   A jury convicted Appellant, William McPherson, of four counts of sexual abuse in the first degree. He received a five-year sentence on each count, to run consecutively for a total of twenty years. McPherson appeals to this court as a matter of right, contending that he suffered substantial prejudice by the Commonwealth’s amendment of the indictment after trial and denial of his equal protection by the prosecution’s use of peremptory challenges. Both issues were preserved for our review.

McPherson claims that the trial court erred by allowing the prosecution to amend the indictment after trial. However, the amendment consisted solely of pinpointing the exact dates of the abusive incidents, which fell within the range of dates initially stated in the indictment. The prosecution obtained the exact dates from the victim’s testimony at trial.

An indictment may be amended anytime prior to a verdict as long as the amendment does not charge an additional or different offense and does not prejudice the substantial rights of a defendant. Amending the dates on which the crimes occurred is permissible provided that the amended date is still prior to the return of the indictment, as in the instant case.

McPherson contends that the amendment substantially prejudiced him because amending the dates to conform to the victim’s testimony bolstered her credibility. However, the amendment was made during a bench conference, outside the presence of the jury, and there is no indication from the record that the jury was aware of the amendment. Accordingly, McPherson has failed to show that the amendment caused him any prejudice. There was no error.

McPherson also maintains that he was denied equal protection by the prosecution’s use of its peremptory challenges to strike a substantial number of men from the jury pool. The prosecution used eight of nine peremptory strikes on male prospective jurors.

A prosecutor’s purposeful discrimination in jury selection violates the Fourteenth Amendment’s equal protection clause. Though initially invoked to challenge discrimination based on race, the Amendment’s protections extend to discrimination based on gender.

A three-prong inquiry aids in determining whether a prosecutor’s use of peremptory strikes violated the equal protection clause. Initially, discrimination may be inferred from the totality of relevant facts associated with a prosecutor’s conduct during a defendant’s trial. The second prong requires a prosecutor to offer a neutral explanation for challenging those jurors in the protected class. Finally, the trial court must assess the plausibility of the prosecutor’s explanations in light of all relevant evidence and determine whether the proffered reasons are legitimate or simply pretextual for discrimination against the targeted class.

In the instant case, the trial court requested an explanation from the prosecutor after eight of nine peremptory strikes were used against male members of the jury pool. The prosecutor provided explanations, specific to each of the jurors he struck, which the trial court found to be credible and legitimate. Accordingly, the trial court found no discriminatory purpose in the prosecutor’s use of peremptory challenges.

The trial court’s decision is entitled to great deference. We recognize that the U.S. Supreme Court recently overturned a decision despite such deference, and sustained an equal protection challenge based on racial discrimination in jury selection. However, in Miller-El v. Dretke, Director, Texas Department of Criminal Justice, Correctional Institutions Division, the defendant presented overwhelming evidence that the prosecutor’s neutral explanations were pretextual. Specifically, the defendant had presented evidence that the district attorney’s office had a history of systematically attempting to exclude minorities from juries, including testimony that a procedure known as “jury shuffle” had been used by the office in the past specifically to manipulate the racial composition of the jury pool.

Additionally, the Court concluded that some of the prosecutor’s proffered explanations for striking African-Americans from the jury pool were equally applicable to white jurors whom the prosecutor declined to peremptorily strike. Moreover, in explaining his reasons for striking these potential jurors, the prosecutor miseharac-terized some of the testimony they gave during voir dire. When this mischaracter-ization was pointed out, the prosecutor offered another reason for the strike rather than respond or defend his initial explanation. The Court found that “[i]t would be difficult to credit the State’s new explanation, which reeks of afterthought,” supporting the defendant’s contention that the prosecutor’s neutral explanations were pretextual.

In the instant case, there are no similar circumstances which would indicate that the prosecutor’s proffered reasons for his strikes were a pretext for gender discrimination. Specifically, one juror’s son was being prosecuted by the Commonwealth; one juror indicated that he would not be able to assess the credibility of the Cabinet for Families and Children without bias; the prosecutor struck one juror because he had seen letters to the editor written by that juror which indicated a lack of respect for law enforcement; the prosecutor struck two jurors because he knew of previous legal issues or contact with the Sheriffs Department by them which made him uncomfortable; and the Commonwealth struck two jurors, one of whom defense counsel also struck, because of unresponsiveness during vior dire. Additionally, with only one exception, the prosecutor’s questions during vior dire were directed to the panel as a whole. Thus, there was no disparity in questioning the jurors, such as those pointed out in Miller-El.

Ultimately, three of the eight men struck by the Commonwealth were struck by defense counsel as well. In addition to these three, the prosecution struck five men and one woman and the defense struck two men and three women. The final jury consisted of five men and nine women.

A review of the record reveals no evidence which would justify overturning the trial court’s finding that Mr. McPherson was not denied equal protection.

Accordingly, we affirm McPherson’s conviction.

All concur.

      . RCR6.16.

      . Stephens v. Commonwealth, 397 S.W.2d 157 (Ky.1965).

        .Batson v. Kentucky, 476 U.S. 79, 106 S.Ct. 1712, 90 L.Ed.2d 69 (1986).

      . J.E.B. v. Alabama ex rel. T.B., 511 U.S. 127, 114 S.Ct. 1419, 128 L.Ed.2d 89 (1994).

      . Batson, 476 U.S. 79, 106 S.Ct. 1712.

      . Id.

      . Id.

      . Id.

      . Id. n. 21, 106 S.Ct. 1712.

      . Miller-El v. Dretke, Director, Texas Department of Criminal Justice, Correctional Institutions Division, - U.S. -, 125 S.Ct. 2317, 162 L.Ed.2d 196 (2005).

      . Id.

      . Id.

        .Id. at 2328.


author: GRAVES, Justice. SCOTT, Dissenting Justice.

text:
    FARMERS BANK AND TRUST COMPANY OF GEORGETOWN, KENTUCKY, Appellant, v. WILLMOTT HARDWOODS, INC., et al., Appellee.
    No. 2003-SC-0455-DG.
    Supreme Court of Kentucky.
    Aug. 25, 2005.

      Robert W. Kellerman, William L. Montague, J. Mel Camenisch, Jr., Stoll, Keen-on & Park, LLP, Lexington, Counsel for Appellant.
    Stephen M. O’Brien III, Savage Garmer Elliott & O’Brien, PLLC, Lexington, Counsel for Appellee.
   GRAVES, Justice.

This case involves various claims against Farmers Bank and Trust Company (hereinafter “Farmers”), Appellant, for a breach of promise to make a loan. The Scott Circuit Court granted a summary judgment to Farmers. The Court of Appeals reversed the circuit court. We reinstate the judgment of the circuit court.

Appellee (hereinafter ‘Willmott”) operates a logging business, Willmott Hardwoods, Inc., the sole owner being John Willmott. The facts of the case are as follows. Willmott had an outstanding loan with Fifth Third Bank. As security for the loan, Willmott gave Fifth Third a mortgage on the business’ real property. Will-mott also gave Fifth Third Bank personal guarantees and mortgages on his personal property.

Willmott became dissatisfied with the Fifth Third loan, and explored obtaining loans from other banks to finance the business and pay the debt to Fifth Third. However, he could not find a bank to assume the entire debt. Willmott decided to separate his loans, and applied for a $780,000 real estate loan from Farmers. Willmott also negotiated with National City Bank for a line of credit and also for service as Willmott’s operating bank. Together, these loans would satisfy the indebtedness to Fifth Third, whereupon Fifth Third would release the real estate lien. The real estate would then be pledged to Farmers as security for its loan.

On July 11, 1996, Farmers sent Willmott a Commitment Letter to lend money under specified terms and conditions. The letter stated that the loan was to close by August 10,1996, reading:

Closing of the loan shall occur on or before August 10, 1996 unless extended in writing by the Bank. If the loan is not closed by the specified closing date, this letter and the Bank’s obligation to make the loan shall terminate without any further liability or obligation to the Bank.

Willmott accepted the commitment letter and paid a loan fee of $2,500.

On August 2, 1996, David Smith, the Vice President of Farmers, sent Willmott a draft Loan Agreement that was to be executed at the closing. This agreement states that the closing of the loan “shall occur... on August 10, 1996 at 9:00 a.m. local time or at such other time and such other date as the parties shall mutually agree upon.”

During the first week of August, Will-mott informed Farmers that National City had decided not to serve as his operating bank, and that he would continue to use Fifth Third. Consequently, Willmott would not be able to close the loan by August 10,1996, due to the inability to pay off Fifth Third and obtain a lien release on the real estate, which was to be security for Farmers’ loan. Willmott claims Smith agreed upon August 23, 1996, as the closing date and reassured him that Farmers would not have a problem with the change of the operating bank from National City to Fifth Third. Willmott also claims that he informed Smith that he had to secure the loan by September 1, 1996, or else his business would be forced to close. According to Willmott, he met with Smith again on August 16, 1996, where Smith provided a handwritten note that states “Closing 23rd — money available before our closing.” On August 14, 1996, Fifth Third approved Willmott’s request to act as its operating bank.

On August 19, 1996, Smith contacted Willmott to inform him that the loan would not close on August 23, 1996, and that the matter would be resubmitted to Farmers’ Board during its next meeting in September. On September 1, 1996, Willmott closed the business and liquidated his assets to satisfy the obligation to Fifth Third.

Willmott filed a complaint in the Scott Circuit Court asserting various claims against Farmers for failure to make a loan, fraud, equitable estoppel, and breach of the duty of good faith and fair dealing. In granting summary judgment, the trial court ruled that:

1.the expiration date in the Commitment Letter was clear and unambiguous and ought to be enforced according to its terms;
2. the statute of frauds at KRS 371.010(9) barred Willmott’s attempt to argue that the Commitment Letter had been extended by an oral agreement;
3. there was no writing between the parties to satisfy the statute of frauds;
4. equitable estoppel did not create an exception to the application of the statute of frauds.

The trial court also disposed of the claims based on breach of duty of good faith and fair dealing, fraud, and Willmott’s personal claims and interference with business contracts.

The Court of Appeals reversed. The panel turned to Farmers’ August 2, 1996, draft Loan Agreement and stated that it was an offer in writing of an agreement to set an alternate date. That writing was sufficient to create an issue of fact, when coupled with the actual setting of an alternate date, settled upon by the parties. Furthermore, the Court of Appeals held that detrimental reliance by one party upon the representation of another precludes application of the statute of frauds to bar the action. The Court of Appeals also reversed the summary judgment on Willmott’s claims of fraud, good faith and fair dealing, and his personal claims.

I. Statute of Frauds

Farmers claims that the Commitment Letter, signed by both parties, contained a clear and unambiguous expiration date of August 10,1996, unless extended in writing by the bank, and when the loan was not closed by August 10, 1996, Farmers’ obligation ceased. This Commitment Letter satisfied the statute of frauds as a written promise to lend money. Farmers argues that the statute of frauds requires for any amendment to this promise to be in writing and compliant with the statute of frauds, and that no such writing exists.

Willmott alleges that, at the very least, there are factual issues that exist regarding an agreement between Willmott and Farmers to extend the closing date. Will-mott claims that the draft Loan Agreement sent by Farmers’ Vice President Smith, which states that the loan was to close on August 10, 1996, or at “such other date as the parties shall mutually agree upon,” offered an alternative, later agreed upon date for the closing. Willmott also relies upon oral representations made by Smith, in addition to a written note stating “closing 23rd,” to show that the parties had agreed upon a later closing date. Willmott argues that the statute of frauds is not applicable to a modification of the closing date because this change did not materially modify the obligation of the parties, and Farmers did not specify that time was of the essence in the closing. Will-mott cites to Murray v. Boyd, 165 Ky. 625, 177 S.W. 468, 471-72 (1915), to support the proposition that the statute of frauds does not apply to subsidiary or incidental agreements that do not materially modify the writing.

Subsection nine (9) of Kentucky’s statute of frauds, KRS 371.010, concerns promises to lend money. It reads:

No action shall be brought to charge any person
(9) Upon any promise, contract, agreement, undertaking, or commitment to loan money, to grant, extend or renew credit, or make any financial accommodation to establish or assist a business enterprise including, but not limited to the purchase of realty or real property, but this subsection shall not apply to agreements pursuant to which credit is extended by means of a credit card or similar device, or to consumer credit transactions;
unless the promise, contract, agreement, representation, assurance, or ratification, or some memorandum or note thereof, be in writing and signed by the party to be charged therewith, or by his authorized agent.

Farmers’ original contract to lend to Willmott falls within the coverage of subsection nine (9) of the statute of frauds. Farmers’ alleged promises, oral or otherwise, to postpone the closing date must also comply with the statute of frauds if extending the closing date materially affects the terms of the written agreement. Murray, supra (“If the contract is required to be in writing, evidence will not be admitted to prove a subsequent parol agreement which materially modifies the writing; that is, if the subsequent agreement is itself within the statute of frauds, and of a nature required by law to be in writing.”); See also Specht v. Stoker, 314 Ky. 786, 237 S.W.2d 78, 79 (1951). This question turns on whether time was of the essence in the contract. See Klatch v. Simpson, 237 Ky. 84, 34 S.W.2d 951, 954-55 (1931)(The statute of frauds does not apply to an oral modification of a written contract with respect to the mode or time of performance where time is not of the essence of the contract). If the August 10, 1996, closing date is essential to the contract, then altering this date would be a material change in the contract necessitating compliance with the statute of frauds. Whether time is of the essence of the contract “is viewed from the standpoint of the parties as gathered from the contract involved, under the rule that unless the intention to make time of the essence is evidenced by expression, or implication, it may not be so regarded.” Distillery Rectifying & Wine Workers International Union of America v. Brown-Forman Distillers Corp., 308 Ky. 380, 213 S.W.2d 610, 612-13 (1948).

Farmers and Willmott did not expressly agree that the time of closing was of the essence, as neither the contract itself, nor subsequent agreements between the parties, specifically states that time was of the essence. Therefore, we must consider if an intention to make time of the essence may be implied from the words of the contract. In Distillery, this Court considered a contract between Union workers and employers. The agreement contained a clause specifying that it “shall be effective ... to May 1, 1946, and during each year thereafter unless 90 days notice in writing is given by either party.” Id. at 611. The employer alleged that the contract was automatically renewed because no written notice was given within 90 days of expiration, while the Union claimed that they gave oral notification. Although the Court’s decision did not rely upon determining whether time was of the essence of the contract, the Court stated, “it is to be gathered without difficulty that by strong implication the requirement of 90 days written notice was essential, because termination or continuation depended upon the required notice.” Id. at 613; See also FS Investments, Inc., v. Asset Guaranty Insurance Co., 196 F.Supp.2d 491 (E.D.Ky.2002) (letter of intent with expiration deadline reflects parties’ intention to make time an essential element of the contract). Like the contract in Distillery, the Commitment Letter in the instant case contains language that indicates that the contract was to expire if the loan was not closed by August 10, 1996. The contract reads, “If the loan is not closed by the specified closing date, this letter and the Bank’s obligation to make a loan shall terminate without any further liability or obligation to the Bank.” Because the contract stated that it would expire if the closing date was not met, by implication, the closing time was of the essence in the contract.

There are no agreements extending the contract’s expiration date that satisfy the statute of frauds. The August 2, 1996, Draft Loan Agreement was clearly marked “Draft” and was not signed by both parties. Willmott’s oral negotiations with Smith clearly do not constitute a modification under the statute of frauds, and the written note stating “Closing 23rd — money available before our closing” is ambiguous and is unsigned. As a result, we find that the contract’s expiration date of August 10, 1996, was not extended.

II. Equitable Estoppel

Willmott claims that Fanners continued negotiations after learning that National City Bank was out and that the August 10, 1996, deadline would not be met. Furthermore, Farmers did not state that the expiration date in the Commitment Letter was a “drop dead date.” As such, Willmott argues that Farmers is es-topped from denying the continued enforceability of the contract. Willmott claims that the statute of frauds should not bar his fraud and equitable estoppel claims because he relied upon both the Draft Loan Agreement, and Farmers’ oral representations of a time extension, to his detriment. The Court of Appeals agreed with Willmott, and found that the statute of frauds could not bar the action when there is detrimental reliance by one party upon the representations of another.

Farmers argues that the Court of Appeals erred in finding that detrimental reli-anee can be an exception to the statute of frauds, and that under such a holding a plaintiff could always allege detrimental reliance, thereby nullifying the statute of frauds.

In finding a detrimental reliance exception to the statute of frauds, the Court of Appeals relies upon United Parcel Service Co. v. Rickert, 996 S.W.2d 464 (Ky.1999). Rickert was an appeal from a jury verdict awarding damages to an employee on claims of fraud and promissory estoppel. The claims stemmed from an alleged promise made by the employer to the employee regarding his continued employment. In discussing the statute of frauds, this Court found that it was inapplicable to the case, but went on to state that “the statute of frauds is not a bar to a fraud or promissory estoppel claim based on an oral promise of indefinite employment.” Id. at 471. The Court of Appeals incorrectly inferred from Rickert that detrimental reliance is a bar to the statute of frauds. All that may be deduced from Rickert concerning the statute of frauds is that in a fraud or promissory estoppel action involving a promise of employment, it does not act as a bar. Therefore, we must still determine whether an equitable estoppel claim pertaining to a credit agreement must adhere to KRS 371.010(9) of the statute of frauds.

The purpose of the statute of frauds is to prevent, not facilitate, fraudulent conduct. Rickert, supra, at 471. Es-toppel is a doctrine of equity, and equitable relief may be granted to relieve the harsh effects of the statute of frauds. Smith v. Ash, 448 S.W.2d 51, 53 (Ky.1969). However, where the statute of frauds is clear and unambiguous, as is the case here, equitable relief should only be granted under the most limited of circumstances, lest the Court run afoul of judicially amending the statute in violation of separation of powers. See C.G. Campbell & Son, Inc. v. Comdeq Corp., 586 S.W.2d 40 (Ky.App.1979) (Court of Appeals refused to create an equitable exception to the U.C.C.’s statute of frauds, KRS 355.2-201).

In the instant case, we agree with the trial court in its refusal to find an equitable estoppel exception to the statute of frauds. According to the trial court, the undisputed facts show that it was Will-mott, not Farmers, who was not ready, willing, and able to close the loan on August 10, 1996, because he had not satisfied the necessary preconditions. On August 10, 1996, by the expressed terms of the contract, the agreement for the loan agreement expired. After it became apparent that Willmott would not be able to close the loan on August 10, 1996, Farmers continued to discuss the possibility of making the loan to Willmott, although they were under no obligation to do so. It was within Farmers’ discretion to continue discussions, but Farmers did not waive its right to enforce the express terms of the Commitment Letter by doing so.

III. Fraud

Willmott raises fraud and misrepresentation claims against Farmers, alleging that Farmers made material misrepresentations that the August 10, 1996, closing date, would be extended, and that National City Bank’s participation was not a prerequisite to the loan agreement. Willmott claims that these misrepresentations were either known to be false when made or were made recklessly; that Will-mott was induced to continue negotiations with Farmers and not seek alternative financing; and that Willmott relied upon these representations to its detriment. The trial court ruled that Willmott did not establish the elements of fraud by clear and convincing evidence because it failed to show an intent to deceive on the part of Farmers. We agree with the trial court.

A party claiming fraud must establish six elements by clear and convincing evidence: a) material representation, b) which is false, c) known to be false or recklessly made, d) made with inducement to be acted upon, e) acted in reliance thereon, and f) causing injury. Rickert, supra, at 468. Intent to deceive is a necessary element of actionable fraud. Smith v. Barton, 266 S.W.2d 317 (Ky.1954). The trial court concluded that, despite an exhaustive discovery, nothing in the record suggests that throughout its negotiations, Farmers never intended to provide Will-mott with a loan. We affirm the trial court’s decision.

IV. Duties of Good Faith and Fair Dealing

Willmott alleges that Farmers breached its implied duty of good faith and fair dealing by failing to inform Willmott that National City Bank’s participation as operating bank was a precondition of the loan, and failing to make all reasonable preparations to ensure that a closing date of August 10, 1996, was possible. The Court of Appeals reversed summary judgment, finding that there was a question of fact regarding whether Farmers fulfilled these duties. We reverse the Court of Appeals.

Within every contract, there is an implied covenant of good faith and fair dealing, and contracts impose on the parties thereto a duty to do everything necessary to carry them out. Ranier v. Mount Sterling National Bank, 812 S.W.2d 154, 156 (Ky.1991). Farmers did not breach the implied covenant of good faith and fair dealing. As we have discussed above, the loan did not close on August 10, 1996, because Willmott was not in a position to close, and on that date, the contract expired. An implied covenant of good faith and fair dealing does not prevent a party from exercising its contractual rights. Hunt Enterprises, Inc. v. John Deere Indus. Equipment, Co., 162 F.3d 1161, 1998 WL 552795 (6th Cir.1998). When the expiration date passed, Farmers had a contractual right to terminate the loan agreement.

Because we find no liability on the part of Farmers, we need not discuss the personal claims raised by John Willmott. Accordingly, we reverse the Court of Appeals and reinstate the trial court’s summary judgment.

LAMBERT, C.J., GRAVES, JOHNSTONE, J.J. concur.

WINTERSHEIMER, J., concurs in result only.

ROACH, J., not sitting.

SCOTT, J., dissents by a separate opinion in which COOPER, J., joins.

SCOTT, Dissenting Justice.

The commitment letter dated July 11, 1996 contains the following language regarding the closing date of the loan: “Closing of the loan shall occur on or before August 10, 1996 unless extended in writing by the Bank.”

Subsequently, on August 2, 1996, David Smith, the Bank’s vice-president, sent a signed cover letter with an accompanying written Loan Agreement to the Appellees which contained the following language: “the closing of the loan shall occur.. .on August 10, 1996 at 9:00 a.m. local time or at such other time and such other date as the parties shall mutually agree upon.” (Section 8.9, draft Loan Agreement). The author of this written agreement, Kenneth Sagan, was the Bank’s attorney. He testified this phrase was meant to suggest the closing could occur before, on or after August 10, 1996. Willmott also understood this phrase to be a written extension of the closing date.

Even more telling, the parties actually met after the originally scheduled closing date of August 10, 1996, to discuss the closing re-scheduled for August 23rd, 1996. Present at this August 16th meeting were Willmott; vice-president of the Bank, David Smith; and Hardwoods’ accountant, Rhonda Mash. Smith’s notes from the meeting indicate “closing 23rd — money available before closing.”

On August 19th, in a conference call with Willmott and Bruce Lankford, Will-mott’s attorney, Smith confirmed the loan was to close on Friday, August 23, 1996, and authorized Lankford to perform the title search. Later that same day, Smith called Willmott to tell him the loan would not be closed on the 23rd, and that the matter would be resubmitted to the Bank’s Board of Directors. The Bank then refused to complete the loan — citing the failure to close by August 10,1996.

“The goal of any court in interpreting a contract is to ascertain and to carry out the original intentions of the parties.” Wilcox v. Wilcox, 406 S.W.2d 152, 153 (Ky.1966). Upon these facts, I believe the Loan Agreement modified the commitment letter and acted as a written extension of the closing date to “.. .such other time and such other date as the parties shall mutually agree upon.”

The record shows that John Willmott of Willmott Hardwoods and David Smith, vice-president of the Bank, orally agreed before the original closing date of August 10, 1996, to extend the closing date to August 23, 1996. Thus, even in this context, I agree with the Court of Appeals that a “written or oral extension of the closing date by agreement of the parties holds the expiration date in abeyance until the alternate date set.”

Smith noted in his August 16th meeting with Willmott and Rhonda Mash, “closing 23rd — money available before closing.” I believe this note acts as a written extension of the closing date made within the extended time frame justified above. Even if the parties’ oral agreement to extend the closing date could arguably be said not to hold the expiration date in abeyance until the later agreed upon date, I believe this note could be construed as a retroactive extension of the time for closing. I know of no legal principle that would preclude the party to be charged from granting a retroactive extension of time for the performance of a contract. The commitment letter did not require that the written extension be signed (as does, e.g., the Statute of Frauds, itself). KRS 371.010.

Furthermore, “it is competent to vary the date of, or time for performance of, a contract, by contemporaneous parol extrinsic testimony.” Apple v. McCullough, 239 Ky. 74, 38 S.W.2d 955, 957 (1931). And if there was any ambiguity about the handwritten note, “ambiguous and uncertain expressions in the written evidence of a contract may be explained by parol evidence ... to the end that the true meaning of the contract may be ascertained,” Akins v. City of Covington, 265 Ky. 740, 97 S.W.2d 588, 590 (1936) (quoting Macpherson v. Bacon’s Ex’r, 180 Ky. 773, 203 S.W. 744, 746-47 (1918)); and parol evidence can be used to clarify ambiguities arising out of extrinsic facts. Id. (citing Breeding’s Heirs v. Taylor’s Heirs, 52 Ky. 385, 393-94 (13 B. Mon. 477, 487 (1852)).

Thus, evidence of what was said at the August 16th meeting and of the subsequent telephone call canceling the August 23rd closing date would be admissible to clarify that the handwritten note had, indeed, referenced an agreement to retroactively extend the time for the closing until August 23rd.

Here the majority found that the Bank’s alleged promises to postpone the closing date violated the statute of frauds since extending the closing date materially affected the terms of the written agreement. With this assertion, I cannot agree. I believe extending the closing date was not a material modification of the original agreement between the parties.

As indicated in Klatch v. Simpson, 237 Ky. 84, 34 S.W.2d 951, 954-55 (1931), the statute of frauds does not apply to an oral modification of a written contract with respect to the mode or time of performance where time is not of the essence of the contract.

Thus, if time is not “of the essence,” the parties’ subsequent written and oral extensions of the closing date for the loan need not meet the strict requirements of the statute of frauds. Notably, this contract did not designate time being “of the essence” as would normally be the case.

A well-founded rule in Kentucky law provides, “unless the intention to make time of the essence is evidenced by expression, or implication, it may not be so regarded.” Distillery Rectifying & Wine Workers International Union of America v. Brown-Fonnan Distillers Corp., 308 Ky. 380, 213 S.W.2d 610, 612-13 (1948) (internal citation omitted). Yet, the majority supplies an intention to make “time of the essence” as implied from the words of the contract. More specifically, the majority reasons that because the contract stated it would expire if the closing date was not met — by implication, the closing time was of the essence to the contract. This reasoning ignores not only Distillery Rectifying & Wine Workers v. Brown-Forman Distillers Corp., cited above, but the plain language of the commitment letter, which specifically authorized a written extension of the closing date by an agreement which the evidence supports was actually made!

Moreover, this case is distinguishable from McConathy v. Lanham, 116 Ky. 735, 76 S.W. 535 (1903), which required an extension of the expiration date to be in writing, because the writing there did not contain words specifically allowing for an extension of the expiration date. The writing in McConathy stressed “if the consideration herein named is not paid on or before the 31st of December, 1899, this contract shall be null and void.” Id. at 536. Therefore, in McConathy, the parties’ subsequent oral agreement to extend the expiration date was rightly ruled unenforceable. This was not the case here.

Additionally, the majority disagrees with the Court of Appeals in its holding that the statute of frauds cannot bar an action where there is detrimental reliance by one party upon the representations of another, citing United Parcel Service v. Rickert, 996 S.W.2d 464, 469 (Ky.1999). The majority felt the Court of Appeals incorrectly inferred from Rickert that detrimental reliance is a bar to the statute of frauds. They limit Rickert to apply only in a fraud or promissory estoppel action involving a promise of employment.

Yet, like the Court of Appeals, I too, read Rickert to apply when, as here, Will-mott detrimentally relied on the Bank’s written and oral assertions that the closing date would be and was extended to August 23, 1996. I believe if the Bank intended for August 10, 1996 to be a “drop dead date,” or if a failure on Willmott’s part to obtain financing specifically from National City Bank would void the entire deal between the Bank and Willmott, the Bank had a duty to make these facts known. One party cannot allow the other to detrimentally rely on its actions and assertions, then later assert the statute of frauds as a defense to performance.

For the above stated reasons, I respectfully dissent.

COOPER, J., joins this dissent.

      . The trial court did not rely upon the statute of frauds to dismiss Willmott’s fraud claim. Rather, the trial court concluded that Will-mott did not plead sufficient facts for actionable fraud. Therefore, we will not consider whether there is a fraud exception to the statute of frauds.