Inadequate Briefing Dooms Appeal

When the trial court granted summary judgment against Tiffiney Cottledge on a breach of contract claim brought against her, Ms. Cottledge decided to appeal the ruling pro se.  Her main argument on appeal consisted of a complaint that the evidence does not support the trial court’s ruling, and that the trial court was biased in its findings.  On her first argument, the Court found that the appellee had presented seven exhibits supporting his motion for summary judgment and Cottledge did not present any discussion or analysis about why the exhibits could not support the trial court’s ruling.  On her second argument, the Court found that the issue was inadequately briefed because Cottledge failed to include appropriate citations to the record or to applicable authorities.  According to the Court, “[o]ur appellate rules have specific briefing provisions that require appellant to state concisely her complaint and provide an understandable, succinct, and clear argument for why her complaint has merit in fact and law, and cite and apply applicable law together with appropriate record references.”

Cottledge v. Roberson

No Future Profits Without Proof You Were Entitled to Receive Them

The court of appeals has issued a lengthy opinion in an employment non-disclosure case, partially affirming a jury verdict in favor of the former employer.  In this instance, both the plaintiff and the corporate defendant were in the business of providing in-home pediatric nursing services.  After the defendant company hired away three of the plaintiff’s employees, eleven of the plaintiff’s most profitable accounts moved over to the new company.  The court of appeals started by noting that the defendants did not challenge the jury’s finding that they had entered into a conspiracy to damage the plaintiff.  That led the court to conclude that each of the defendants was jointly and severally liable for the other defendants’ breaches of their non-disclosure agreements, which were themselves established by sufficient evidence at trial.  The court of appeals upheld the jury’s award of $250,000 in lost profits attributable to the eleven patients lost by the plaintiff, but reversed and rendered amounts that had been awarded for profits that would have been earned after the plaintiff went bankrupt and sold off its business.  According to the court, there was no evidence that he plaintiff would have had the right to continue receiving profits from customers after the business was sold, so there was no evidentiary basis for the recovery of those post-sale profits.  Finally, the court of appeals affirmed the trial court’s grant of JNOV against the plaintiff on its claim for attorney fees, holding that fees were not recoverable because the plaintiff had not offered any proof of presentment to the defendants.

Helping Hands Home Care, Inc. v. Home Health of Tarrant County, Inc., No. 05-08-01657-CV

Waive Goodbye, Part IV

The court affirmed a summary judgment in favor of the bank in a foreclosure case dealing with the waiver statutory offset rights contained in Chapter 51 of the Texas Property Code. A builder entered construction loan agreement secured by four properties and signed a personal guaranty of the loan, eventually defaulting. The bank foreclosed on and sold the properties and sued the builder for the deficiency. The builder invoked Chapter 51, asking the court to determine the fair market value of the properties for the deficiency calculation rather than the foreclosure sale price. Town North moved for summary judgment arguing that the guaranty included a waiver of his right to claim any deductions or offsets from the amount guaranteed including any right to seek a reduction in the deficiency under section 51.003, which the trial court granted and then entered a judgment on the deficiency.

On appeal, the court cited its opinion in Interstate 35/Chisam Road, L.P. v. Moayedi, No. 05-11-00209-CV, 2012 WL 3125148 (Tex. App.—Dallas Aug. 2, 2012, no pet.) holding that the rights provided by section 51.003 are subject to waiver. It also cited King v. Park Cities Bank, No. 05-11- 00593-CV, 2012 WL 3144881, at *3 (Tex. App.—Dallas Aug. 3, 2012, no pet. h.) to reject the builder’s argument that language in the guaranty waiving “any defenses given to guarantors at law or in equity other than actual payment and performance of the indebtedness” did not encompass a waiver of section 51.003’s right of offset despite the guaranty’s later reference to a “claim of setoff.” Thus, the court held that the builder waived his rights under section 51.003.

Smith v. Town North Bank, 05-11-00520-CV

Waive Goodbye, Part III

In a memorandum opinion, the court of appeals has affirmed summary judgment in favor of PNC Bank on four personal guarantys of a promissory note.  Each of the guaranty agreements contained provisions waiving the defense of offset against a deficiency claim, preventing the guarantors from asserting that the bank had sold the foreclosed property for less than fair market value.  The court of appeals rejected the guarantors’ argument that parties could not waive the statutory offset rights contained in Chapter 51 of the Texas Property Code, citing the court’s own recent opinions in Interstate 35/Chisam Road, L.P. v. Moayedi and King v. Park Cities Bank.  The court also rejected the guarantors’ contention that the language of their own guaranty agreements was not specific enough to waive their right to offset the deficiency.

Toor v. PNC Bank, N.A., No. 05-11-00012-CV

Waive Goodbye, Part II

This action involved a deficiency claim by a Bank against several loan Guarantors.  The loans at issue were undertaken to finance improvements on properties owned by a partnership in Collin County.   After the partnership defaulted, the Bank exercised its right to sell the properties at non-judicial foreclosure sales, and then brought this action action against the Guarantors.  Because the Guarantors had agreed in the original Guaranty Agreement to waive any defense of offset to the bank’s deficiciency claim, the trial court granted the Bank’s motion for summary judgment and awared the Bank the outstanding amounts due on each of the promissory notes.  On appeal, the Guarantors argued that the right of offset provided for in section 51.003(c) of the property code cannot be contractually waived and, alternatively, that if such waiver were available they did not, in fact, waive the right of offset because the waiver provision did not contain the phrase “right of offset.”  Relying on the reasoning in Moayedi, the Court of Appeals rejected both of the Guarantors’ arguments, finding that nothing  in the property code prevents a guarantor from waiving his right to an offset in a guaranty agreement.  Additionally, the Court found that the waiver language need not include the precise terms “right of offset” to constitute an effective waiver.  Thus, the court upheld the trial court’s summary judgment decision.


King, et al. v. Park Cities Bank, No. 05-11-00593-CV

Waive Goodbye

The court reversed a summary judgment in favor of a guarantor on his Property Code Chapter 51 offset defense against a creditor. Moayedi guaranteed a loan made by I-35 to Villages. I-35 sued Moayedi based upon his guaranty to recover the balance remaining on Villages’s promissory note after a Property Code section 51.003 foreclosure sale. Moayedi contended that he was entitled to offset the deficiency by the difference between the fair market value and the sale price pursuant to section 51.003(c). I-35 replied that Moayedi waived “any defense” in the guaranty, including the right of offset. After considering competing summary judgment motions, the trial court granted Moayedi’s and held that the right of offset pursuant to section 51.003(c) could not be waived by the general terms in the guaranty agreement.

The court of appeals reversed. First, it engaged in a thorough analysis of waiver and section 51.003(c)’s offset provision. It held that a section 51.003(c) offset is indeed a “defense” as the term was used in the guaranty. Next, the court analyzed the contract language and held that “any defense” included the section 51.003(c) offset defense. The court then looked at the guaranty as a whole, finding four other provisions supporting such a broad waiver. Finally, the court rejected the argument that a waiver of section 51.003(c) rights violates public policy, citing Texas’s strong policy in favor of freedom of contract and other courts that have held that Chapter 51 rights of offset may be contractually waived. Thus, the court reversed and rendered judgment in favor of I-35.

Interstate 35/Chisam Road, L.P. and Malachi Development Corporation v. Moayedi, No. 05-11-00209-CV

Be Specific, Please

The court has issued some interesting comments in connection with the denial of a motion for rehearing in a condemnation case.  In the jury charge conference, Dallas County objected to the property owner’s proposed definition of “Cost to Cure,” but the specific basis of the objection was unclear.  The trial judge eventually summarized the objection as being that the instruction amounted to a comment on the weight of the evidence, and the County agreed.  The trial judge fixed that problem by modifying the instruction to award cost to cure damages, “if any.”  On appeal, the County attempted to argue that the definition was actually “an incorrect statement of Texas law,” but the court of appeals rejected that claim:

A party objecting to the jury charge must “point out distinctly the objectionable matter and the grounds of the objection.” Tex. R. Civ. P. 274. When the complaining party’s objection is, “in the opinion of the appellate court, obscured or concealed by voluminous unfounded objections, minute differentiations or numerous unnecessary requests, such objection or request shall be untenable.” Id.
Reviewing the reporter’s record of the charge conference, we cannot determine the County’s exact complaint to the trial court concerning “cost to cure” except that it constituted a comment on the weight of the evidence. The trial court addressed that complaint by modifying the statement of the definition.

The court also rejected the County’s argument that the property owner’s expert had offered conclusory opinion testimony, since the County had failed to raise an issue as to the legal sufficiency of the testimony.  In its appellate briefing, the County had challenged the trial court’s admission of the expert testimony as being an abuse of discretion, but did not attack the legal sufficiency of the testimony.  For that reason, the court declined to evaluate whether the testimony was conclusory, and therefore denied the County’s motion for rehearing.

Dallas County, Texas v. Crestview Corners Car Wash, No. 05-09-00623-CV