Evidence Held to Be Insufficient on Interlocutory Appeal Is Still Insufficient on Summary Judgment

In early 2012, the Dallas Court of Appeals reversed a temporary injunction that would have prevented BB&T from foreclosing on a pair of properties secured by a $10 million promissory note. Two and a half years later, matters have not improved for the borrowers, as the Court has now affirmed summary judgment for the bank.

In responding to the no-evidence summary judgment motion, the borrowers had “relied entirely on evidence presented at the temporary judgment hearing” to show that they had a valid contract with BB&T that superseded the bank’s right to foreclose. Because the Court had previously held that this evidence amounted to nothing more than an unenforceable “agreement to agree,” the law of the case doctrine prevented the outcome from being any different in this subsequent appeal. The same evidence was also held to be insufficient to support the borrowers’ claims for fraud and declaratory judgment, while a money had and received claim failed because the borrowers had made a $1.8 million payment with full knowledge of the facts and without fraud or duress. Finally, the trial court had not abused its discretion by striking the borrowers’ fifth amended petition because it had been filed outside the deadline in the court’s scheduling order, was not filed with leave of court, and was prejudicial to the bank because it sought to add a claim that “would effectively inject new substantive matters into the litigation by reinjecting old ones.”

TCI Luna Ventures, LLC v. Branch Banking & Tr. Co., No. 05-13-01221-CV

It Takes Evidence to Dispute Ownership of a Promissory Note

The guarantors of a construction loan agreement and promissory note sought to avoid a deficiency judgment by disputing a successor bank’s summary judgment evidence that it was the holder of the note. The Dallas Court of Appeals was having none of that oft-repeated claim. In the absence of controverting evidence, affidavit testimony and a copy of the note are sufficient to prove it up for summary judgment purposes, and an affidavit is likewise sufficient to establish ownership or assignment of the note. Because none of the summary judgment evidence contradicted the bank’s affidavit testimony, summary judgment for the deficiency was properly granted. The Court went on to rule that the bank was not required to include a complete history of payment activity on the account as part of its summary judgment evidence, and that the guarantors’ own affidavits did not create a fact issue on the issue of the property’s fair market value.

Cha v. Branch Banking & Trust Co., No. 05-14-00926-CV

All Independent Grounds

The owner of an apartment complex sued the builder for construction defect claims. The defendant moved for summary judgment on limitations and lack of notice, which is an element of the plaintiff’s express warranty claim. The trial court granted the summary judgment motion without specifying the grounds. For reasons that are not clear from the opinion, the appellant limited its issues on appeal to the express warranty claim, but only addressed the limitations argument. That resulted in affirmation of the summary judgment ruling.  Because the appellant failed to challenge the other ground — i.e., lack of notice — on which summary judgment could have been granted, the Court of Appeals upheld the judgment based on the unchallenged ground.

ZZ&Z Props., Ltd. v. ZCC-ZPL,LLP, No. 05-14-00812-CV

Bank Error in Your Favor

After the real estate bubble burst in 2008, borrowers attempted all sorts of ways to get out of their obligations. Most notably, debtors repeatedly challenged the ways that their mortgages had been transferred and recorded (or not) by the banks that had held, swapped, sold, and securitized them. Long story short, it hardly ever worked, as courts across the country mostly (but not always) eschewed technical arguments in favor of the big picture of who owed what to whom. But a new opinion from the Dallas Court of Appeals shows that when the bank doesn’t follow the rules in litigation, the debtors may still escape liability on a loan.

In this instance, a pair of individual guarantors for a $748,000 loan were sued by Wells Fargo after the borrower defaulted. While the case was pending, Wells Fargo allegedly assigned the loan documents to another entity, Apex. Wells Fargo’s attorneys later filed a motion for withdrawal and substitution, which the trial court granted. The motion failed to mention the assignment of the loan documents to Apex. The guarantors then filed for no-evidence summary judgment, pointing out that Wells Fargo had conducted no discovery and that the discovery period was closed. The motion argued that there was no evidence to show who owned the guaranty. When Apex appeared and tried to cure that deficiency, the guarantors objected and moved to strike Apex’s summary judgment evidence. The trial court sustained the objections and granted summary judgment. The Court of Appeals affirmed, holding that it was not an abuse of discretion to exclude Apex’s evidence because it had waited 11 months after acquiring the loan to amend Wells Fargo’s discovery responses by disclosing its ownership. That was not “reasonably prompt,” and it acted as an unfair surprise to the guarantors to have that come out only in response to their summary judgment motion.

LSREF2 Apex (TX) II, LLC v. Blomquist, No. 05-14-00851-CV

No Causation, No Malpractice

After a jury awarded millions of dollars in damages and the Court of Appeals affirmed, the defendants in that case decided to become plaintiffs by suing their lawyers at Andrews Kurth. The county court at law granted summary judgment for the defendants, and the Dallas Court of Appeals affirmed. In a malpractice case based on an attorney’s conduct in connection with litigation, the plaintiff has to demonstrate that it would have prevailed in the prior case but for the lawyer’s negligence. Concluding that the plaintiffs’ proof on that point was conclusory and speculative, the Court held that there was no evidence in the summary judgment record to establish causation of any injury to the plaintiffs.

Rogers v. Zanetti, No. 05-14-00733-CV

Loaned and Operated

A car fell on David Fusaro at the house of his friend, Christopher Becherer. The car was owned by Becherer’s mother, and the pair were working on her brakes. Becherer’s homeowner’s insurer denied coverage, relying on an exclusion for injuries “arising out of the ownership, maintenance, operation, use, loading or unloading of: Motor or engine propelled vehicles or machines designed for movement on land . . . which are owned or operated by or rented or loaned to an insured.” After Fusaro obtained a $1.1 million judgment, Becherer assigned his coverage claim to Fusaro, who lost the coverage case on summary judgment. Fusaro argued that Becherer’s mother’s case was not “owned or operated by or rented or loaned to” Becherer, but the Court of Appeals affirmed. Construing the words in light of their ordinary meaning, Becherer’s mother had loaned the vehicle to her son, and he was operating the vehicle by performing ordinary acts of maintenance on it.

Fusaro v. Trinity Universal Ins. Co., No. 05-14-00481-CV

No End in Sight

One of the messiest cases in recent memory has resulted in a 79-page opinion and judgment that disposes of the case in almost every way imaginable: “Our decision in this case is to vacate, in part, affirm, in part, dismiss, in part, and reverse and remand to the trial court, in part.” The case arose out of a lease executed by Fitness Evolution, its subsequent acquisition by Headhunter Fitness, a series of personal guarantys, assignments, representations, and just about everything else one might find in a bar exam essay question. Since this one pretty much defies summary, we will instead report that while summary judgment was affirmed on some claims, the end result is that most everybody involved will be remanded to the Collin County trial court for additional proceedings.

Fitness Evolution, LP v. Headhunter Fitness, LLC, No. 05-13-00506-CV

Attached Hereto Is Kind of Important

A surveying company named TBE Group contracted with a competing surveying company, Lina T. Ramey & Associates, to locate utility lines for transportation and construction projects. After one lawsuit, the parties entered into a “Strategic Alliance Agreement” that would govern their ongoing relationship. But Ramey did not generate the amount of business required by the agreement, and the parties sued one another for breach of contract. The trial court granted TBE’s motion for summary judgment and the Court of Appeals affirmed, holding that Ramey had failed to come forward with more than a scintilla of evidence that it had fulfilled its part of the contract. Although Raney’s summary judgment affidavit referenced checks that were supposed to demonstrate Raney’s performance, the checks were not attached to the affidavit. That failure rendered the affidavit conclusory and of no evidentiary value.

Lina T. Ramey & Assocs., Inc. v. TBE Group, Inc., No. 05-13-01711-CV

Return to Sender

An insurance coverage dispute highlights a key requirement of the venerable mailbox rule — namely, that it doesn’t apply when the filing party (in this case, both pro se and temporarily incarcerated) does not affix sufficient postage to have his summary judgment response delivered by the postal service. In the absence of a properly filed response, the Court of Appeals held that the trial court had correctly granted the insurer’s traditional and no-evidence motions for summary judgment.

Wilson v. Colonial County Mut. Ins. Co., No. 05-14-00220-CV

UpdateWe did it again!

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No Collective Bargaining for Public Employees

The United Food & Commercial Workers Union sought to collectively bargain on behalf of the employees of the Texoma Area Paratransit Systems, a rural transit district. TAPS sued for a declaratory judgment that, as a government subdivision, it was prohibited from collectively bargaining by Chapter 617 of the Texas Government Code. A Grayson County trial court granted summary judgment for TAPS and (more than a year later) awarded its attorney fees. The Dallas Court of Appeals affirmed, rejecting the union’s claim that TAPS’s declaratory judgment action was preempted by federal labor law. Despite 12 years of collective bargaining between TAPS and the union, state law still prohibited collective bargaining with a government entity, and that meant that TAPS was indeed entitled to summary judgment on the issue.

United Food & Commercial Workers Union Local 1000 v. Texoma Area Paratransit Sys., Inc., No. 05-12-01556-CV