Carto Props., LLC v. Briar Capital, L.P.
| Decision Date | 13 February 2018 |
| Docket Number | NO. 01-15-01114-CV,01-15-01114-CV |
| Parties | CARTO PROPERTIES, LLC, JEN MARIE RAU, INDIVIDUALLY, KEY MAPS, INC., AND THE JEN MARIE RAU LIFE INSURANCE TRUST, Appellants/Cross-Appellees, v. BRIAR CAPITAL, L.P., Appellee/Cross-Appellant |
| Court | Texas Court of Appeals |
On Appeal from the 11th District Court Harris County, Texas
Appellants/cross-appellees, Carto Properties, LLC, Jen Marie Rau, individually ("Rau"), Key Maps, Inc., and the Jen Marie Rau Life Insurance Trust (the "Trust") (collectively, "Carto"), challenge the trial court's rendition of summary judgment in favor of appellee/cross-appellant, Briar Capital, L.P. ("Briar"), in Carto's suit against Briar for wrongful foreclosure, breach of contract, tortious interference with contract, and fraud. In three issues, Carto contends that the trial court erred in granting Briar summary judgment. In its sole cross-point, Briar contends that the trial court erred in denying its request for attorney's fees.
We affirm in part and reverse and render in part.
In its second amended petition, Carto alleged that in 2013, it purchased commercial real property located at 1411 and 1413 West Alabama Street in Houston. To finance its purchase, Carto obtained a loan from Briar in the amount of $1,050,000. In conjunction with the parties' loan agreement, Carto executed apromissory note, secured by a deed of trust naming Briar as the beneficiary (collectively, the "loan documents"). Rau, Key Maps, and the Trust (the "guarantors") each executed a guaranty agreement, guaranteeing Carto's repayment of the loan and any attorney's fees and collection costs.
In July 2014, after Carto had become delinquent on its loan payments, it received from Briar a notice of default and acceleration. Carto, in an effort to stop Briar's "threatened" foreclosure against the property and to protect its equity, entered into a forbearance agreement with Briar. Pursuant to the agreement, Carto promised to list the property for sale with a licensed broker no later than September 1, 2014. And Briar promised to refrain from exercising its enforcement remedies, i.e., foreclosure, as set forth in the loan documents, until November 1, 2014.
In September 2014, Briar again threatened to foreclose on the property after Carto had not complied with the terms of the forbearance agreement requiring that it list the property for sale with a broker. The parties then entered into a second forbearance agreement, in which Carto promised to deliver to Briar, on or before October 3, 2014, a contract executed by Carto to sell the property to a new buyer for an amount at least equal to the outstanding loan balance and with a closing date of no later than December 31, 2014. Carto also promised to deposit $40,000 into a loan-payment-reserve account to cover the interim payments. In exchange, Briar agreed to refrain from exercising its enforcement remedies until December 31, 2014.
Carto further alleged that after it had not complied with the terms of the second forbearance agreement, Briar, on December 14, 2014, sent it a notice of intent to foreclose on the property at a January 6, 2015 trustee's sale. However, in late December, Carto, through "telephone conversations and emails" with Briar, had "worked out deals in which the foreclosure would be postponed" to allow Carto more time to sell the property. The Menil Foundation (the "Foundation") had agreed to a cash purchase of the property for $1,590,000 and to a closing date, in either January or early February 2015, and Briar had "agreed verbally and in writing to hold off" on the January 6, 2015 foreclosure sale. On December 31, 2014, Briar, through its representative, John Kerkhoff, sent to Carto's representative, Jeff Williams, an email specifying a loan payoff amount, as of January 9, 2015, of $1,229,734.90 and "serv[ing] to further the belief on [Carto's] part" that Briar was not planning to foreclose on January 6, 2015. Although Briar had also "promised to send" to Carto "a third forbearance agreement prior to the scheduled January 6, 2015 foreclosure sale," Carto did not receive it. And, on January 6, 2015, Briar sold the property at a foreclosure sale.
In its claim for wrongful foreclosure, Carto specifically alleged that Briar "never re-noticed [Carto] for a February 3, 2015 mortgage foreclosure sale after it canceled the January 6, 2015 mortgage foreclosure sale."2 In its claim for breach ofcontract, Carto alleged that Briar had breached "its agreement" to forbear from exercising its enforcement remedies by moving forward and selling the property at the foreclosure sale. Carto further alleged that Briar had breached its duty of good faith and fair dealing.
In its claim for tortious interference with an existing or prospective contract, Carto alleged that Briar had intentionally interfered with its sales contract with the Foundation. Carto had negotiated the final terms of the sale prior to the scheduled foreclosure sale; the Foundation was "ready, willing, and able to purchase the property" for $1,590,000 in cash; the actual market value of the property was $1,850,000; and Carto, under the terms of its sale, was to receive at least $370,000, for a portion of its equity in the property. Moreover, Briar was aware of the pending sale and its terms, including that the sale was to close in January or February 2015. Nevertheless, Briar interfered with Carto's sale of the property to the Foundation by selling the property at a foreclosure sale on January 6, 2015.
In its fraud claim, Carto alleged that Briar had agreed, "verbally and in writing," to "hold off" on the January 6, 2015 foreclosure sale. It "promised to send" Carto a third forbearance agreement and, in a December 31, 2014 email to Carto, specified an amount to pay off the loan on January 9, 2015. According to Carto, the "only possible interpretation" of the email is that Briar intended to cancel the January 6, 2015 foreclosure sale. However, Briar had no intention of delaying theforeclosure sale, but, in fact, intended to purchase the property at the sale and then sell it directly to the Foundation for an additional profit. And, Briar, by not disclosing that it intended to move forward with the foreclosure sale as scheduled, "intended to divert" Carto's attention away from protecting its interests through seeking injunctive relief to prevent the sale. Thus, according to Carto, Briar either knew that its representations were false or made its representations recklessly, without any knowledge of their truth. Further, Briar intended that Carto act in reliance on its representations, which Carto did to its detriment.
Briar answered, generally denying Carto's allegations and asserting various affirmative defenses and a counterclaim for attorney's fees and costs. Briar also filed a summary-judgment motion, arguing that it was entitled to judgment as a matter of law on Carto's claims because they are based on "unsigned and alleged oral promises, agreements, or modification[s] to signed and written loan documents." Briar asserted that Carto had previously admitted that it had failed to repay the loan in accordance with its terms and comply with the first and second forbearance agreements by not listing or selling the property and by not depositing the agreed upon sums into the loan-payment-reserve account.
Briar further asserted that on December 31, 2014, Carto sent to Briar an email, requesting that it "work up a loan payoff for Friday, January 9th." Briar answered with the payoff amount and noted a required forbearance fee of $25,000. On January4, 2015, two days before the scheduled foreclosure sale, Carto sent to Briar an email, asking whether a third "forbearance agreement [would] be ready [on] Monday," January 5, 2015. Briar answered that it would; however, Carto, on January 5, did not execute a new forbearance agreement or pay the forbearance fee. Thus, Briar, having no reason to pass on the trustee's sale and in accordance with its rights under the loan documents, sold the property at the January 6, 2015 foreclosure sale as noticed.
In regard to Carto's claim of tortious interference with contract, Briar argued that it was entitled to judgment as a matter of law, based on its affirmative defense of justification, because Carto was admittedly in default on the loan, Briar had a legal and contractual right, pursuant to the loan documents, to foreclose on the property, notwithstanding the pendency of any sale of the property by Carto. In regard to Carto's fraud claim, Briar argued that it was entitled to judgment as a matter of law because Carto was barred from relying on any representations that Briar had agreed, either orally or in unsigned documents, to waive its enforcement rights or extend the loan as the express, unambiguous terms of the loan documents prohibit such modifications.
In regard to its claim against Carto and the guarantors for attorney's fees, Briar argued that it was entitled to judgment as a matter of law because the terms of the loan documents expressly provide for the recovery of its reasonable attorney's feesin any lawsuit requiring it to enforce or preserve its rights under the loan documents. Briar sought attorney's fees in the amount of $61,121.50 for trial, $30,000.00 for appeal, $20,000.00 for a petition for review to the Texas Supreme Court, and $17,500.00 if a petition for review were granted.
Briar attached to its summary-judgment motion a copy of Carto's petition; the loan documents, including the loan agreement, note, deed of trust, and an "Acknowledgement of Final Agreement, No Oral Agreements, [and] Waiver of Jury Trial"; the guaranty agreements; the first and second forbearance agreements; Briar's notices to Carto of default and foreclosure; the trustee's deed; and numerous emails. Briar also attached excerpts of the depositions of representatives of the Foundation, John Trahan and Taylor Cooksey; the...
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