Default on Installment Payment Plan: SoL and accrual of claim for breach of a contract that requires payments at regular intervals

    
ACCRUAL OF DEBT CLAIM WHEN CONTRACT REQUIRES PERIODIC PAYMENTS: EACH MISSED PAYMENT DATE TRIGGERS RUNNING OF LIMITATIONS SEPARATELY
 
A four-year statute of limitations applies to contract actions. Tex. Civ. Prac. & Rem. Code Ann. § 16.004 (Vernon 2002). A breach of contract claim accrues at the time of breach. Stine v. Stewart, 80 S.W.3d 586, 592 (Tex. 2002). When recovery is sought on an obligation payable in installments, the statute of limitations runs against each installment from the time it becomes due. Intermedics, Inc. v. Grady, 683 S.W.2d 842, 845 (Tex.App.-Houston [1st Dist.] 1984, writ ref'd n.r.e.). Thus, a suit for the breach of a contract requiring payment in periodic installments may include all payments due within the four-year statute of limitations period, even if the initial breach was beyond the limitations period. Recovery of any payment more than four years overdue is barred. Hollander v. Capon, 853 S.W.2d 723, 726-27 (Tex.App.-Houston [1st Dist.] 1993, writ denied).

RELATED TERMS: Retail Installment Contract, financing, closed-ended consumer loan requiring monthly payments in equal amounts, monthly payment-due dates, missing monthly loan repayment, payment schedule 

SOURCE: 05-08-00458-CV (9/18/09) (Dallas Court of Appeals)