Bank of Texas, N.A. v. Gaubert

• Decision Date: 08 May 2009
• Docket Number: No. 05-08-01080-CV.,05-08-01080-CV.
• Citation: 286 S.W.3d 546
• Parties: BANK OF TEXAS, N.A., Appellant, v. Michael L. GAUBERT, Appellee.
• Court: Texas Court of Appeals

286 S.W.3d 546

BANK OF TEXAS, N.A., Appellant, v. Michael L. GAUBERT, Appellee.

No. 05-08-01080-CV.

Court of Appeals of Texas, Dallas.

May 8, 2009.

David M. Odens, Dallas, for Appellant.

Deborah G. Hankinson, Hankinson Levinder LLP, Dallas, for Appellee.

Before Justices MORRIS, WRIGHT, and MOSELEY.

OPINION

Opinion by Justice MOSELEY.

This is an interlocutory appeal from a temporary injunction. The trial court enjoined Bank of Texas, N.A. from foreclosing on real property owned (at least in part) by Michael L. Gaubert at a sale scheduled for August 5, 2008 and from reposting the property for foreclosure until after a trial on the merits. In a single issue, the Bank contends the trial court abused its discretion by granting the temporary injunction because the alleged oral agreement to extend the loan for four months is barred by the statute of frauds applicable to loans in excess of $50,000. See TEX. BUS. & COM. CODE ANN. § 26.02 (Vernon 2002).

We conclude the trial court abused its discretion by concluding Gaubert showed a probable right to recovery justifying injunctive relief beyond August 2008. Accordingly, we vacate the trial court's temporary injunction.

BACKGROUND

In July 2007, Gaubert (an attorney) and Khaled Chami (a home builder) signed as co-borrowers and delivered to the Bank a promissory note evidencing a $3.9 million loan. The loan, which required monthly interest payments, was a short-term bridge loan that matured by its terms on January 3, 2008. The obligations under the note were joint and several.¹ The note was secured by a deed of trust on non-homestead property owned by Gaubert and Chami.² The note, deed of trust, and other loan documents contain no provisions for automatic renewal of the loan at maturity or for capitalizing or "rolling-in" the accrued interest or any unpaid property taxes.

The loan documents include a notice of final agreement, signed by Gaubert, Chami, and the Bank, as required by TEX. Bus. & COM. CODE ANN. § 26.02(e), stating: "The written loan agreement represents the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties."

Gaubert and Chami used Chip Ferrier as a loan broker for the loan. Ferrier also worked with them to obtain permanent financing for the property. Many of the communications between Gaubert and the Bank before and after the loan matured were through Ferrier. Gaubert said Ferrier was working on behalf of both Gaubert and the Bank for the original loan, during negotiations, when the loan matured, and thereafter. It appears Ferrier acted as an intermediary or "go-between" for both parties.³

The parties anticipated Gaubert would obtain permanent financing from another lender and repay the Bank when the loan matured. However, Gaubert testified that when he entered into the loan, he was told by the Bank officer there would not be a problem extending the loan if it matured.

When the note matured on January 3, 2008, Gaubert had not obtained permanent financing. He testified the Bank told him several times by telephone, e-mail, and letters, that the loan was being extended.

The Bank contacted the borrowers (or Ferrier) in early January and discussed extending the loan, but needed updated financial statements from Gaubert and Chami. Gaubert said the Bank at some point asked for financial statements, but never told him it was a condition for extending the loan. Gaubert sent an e-mail to Ferrier on January 28 discussing the problems with obtaining permanent financing and mentioning the need to extend the Bank loan and roll-in the taxes and an outstanding second lien debt. Ferrier forwarded this e-mail to the Bank the same day.

On February 1, Ferrier sent an e-mail to a senior vice president of the Bank, Jennifer Normile, stating that Gaubert was bringing a $30,000 interest payment. Gaubert testified he was on his way to deliver the $30,000 interest payment on February 1, but someone at the Bank spoke to him by telephone and told him the payment did not need to be made because the loan was being extended. Gaubert did not make the interest payment.

On February 21, 2008, Normile sent Gaubert a letter confirming that the loan "is in the process of being extended and renewed for an additional four months." The letter said Normile had requested the loan be removed from reporting to credit bureaus until she gathered the required information needed to extend the loan.

On March 6, Gaubert e-mailed Ferrier and Normile saying he was getting updated financial statements from Chami as this was "the last item needed to extend the Bank of Texas loan." Gaubert's e-mail also said he had just learned his credit report showed a 30-day late payment on the loan. He asked the Bank for a letter advising that this report was a mistake and asked the Bank to have the report removed. Later that day, the Bank sent a letter addressed to Gaubert, Chami, and "To whom it may concern" confirming that the loan "which matured on January 3, 2008 is in the process of being extended for an additional four months." The letter also said the Bank was in the process of gathering required information to extend the loan and that the borrower "has been current on all mortgage payments and the recently reported late payment was due to a bank error. The loan payment is not late as the borrower is waiting on the bank to renew the loan." Gaubert testified the state of his credit was good to excellent before this, but it changed in January, February, and March 2008 because the Bank reported him as late in making payments on the loan.

On March 18, Normile sent Gaubert an e-mail saying she "almost [had] the extension approved" to renew the loan until May 3rd, but if the permanent financing failed again, the Bank would require a substantial principal reduction in order to do another renewal. Gaubert replied that he would get back to her, and that he "thought the loan was being extended 120 days from now (not the original maturity date)." The e-mail correspondence during this time indicates Gaubert and Ferrier were working on obtaining a commitment from a permanent lender to refinance the debt and Normile was asking for information on when Gaubert would have additional funds available in connection with the approval of the permanent financing. She responded to Gaubert that when she had the information, "we can date the extension accordingly."

Sometime in early April, the Bank delivered to Ferrier draft loan documents; if executed, those documents would have extended the note and deed of trust to July 3, 2008. In an April 1 e-mail to Ferrier, the Bank requested an interest payment of over $109,000 to bring the loan current. Ferrier responded that Gaubert wanted to roll the interest into the extended loan. Gaubert testified he never saw the proposed loan extension documents, but discussed them with Ferrier. Gaubert asked Ferrier if the extended loan "rolled-in" the property taxes and accrued interest and Ferrier said they did not because the Bank and Normile wanted to get the extension in place first, then it would be easier to go back and roll-in the taxes and interest. In addition, Gaubert testified he and Chami wanted the loan put in the name of an entity and they would also sign personally. He testified he wanted to avoid the problem of being personally liable on a $3.9 million loan when he was only a fifty percent owner of the property. Gaubert told Ferrier, "I want the extension, but I want it to be in a corporate name with me as an individual guarantor, and I need[] the property taxes and the interest rolled into the loan." Gaubert testified he did not consider this a counteroffer because he had "from the beginning told Bank of Texas and Chip [Ferrier] that I needed the property taxes and the interest rolled in." Gaubert never signed or returned the proposed loan documents.

Gaubert testified that the four-month extension was to run from the time new loan documents were signed. Referring to the February 21 letter stating the Bank was in the process of renewing the loan for an additional four months, Gaubert testified, "It meant when the loan papers were done we would have a four month extension. If they were done the next day, it would be four months. If it was done the next month, it would be four months from the next month. They were going to give us four months." He also testified, "Based on the representations of the bank and the letters I thought, we had four months from when the extension papers were going to be signed. Four months from March is July." Finally, Gaubert testified he was still communicating with the Bank in early April about extending the loan, and if he had renewed the loan for four months in April, the loan would have been due in August.

In late April, however, the Bank told Gaubert it no longer intended to extend the loan agreement. Shortly thereafter— but still in April—Gaubert met with the Bank and others at the property. In his brief, Gaubert says that at this meeting the Bank made statements that led him to believe the Bank was honoring its agreement to extend the loan to allow him additional time to market and sell the house. He testified that a proposal came out of the meeting to take care of the property taxes, make a $40,000 interest payment and do additional work on the house by August 1, and "in return for that we wanted them [the Bank] to not post the property for foreclosure in July." Gaubert also discussed his selection of a realtor to sell the property and said the Bank representatives were in agreement with the selection.

Gaubert testified the Bank continued to ask him to make a proposal and, by the middle of June, Gaubert had a lender willing to fund a significant amount to pay the accrued interest and to "take care of some other issues." The Bank, however, posted the property for foreclosure on...