Comiskey v. FH Partners, LLC

• Decision Date: 11 July 2012
• Docket Number: No. 14–10–01001–CV.,14–10–01001–CV.
• Citation: 373 S.W.3d 620
• Parties: Gus H. COMISKEY, III, a/k/a Trey Comiskey, and TC3, Inc., Appellants, v. FH PARTNERS, LLC, Appellee.
• Court: Texas Court of Appeals

373 S.W.3d 620

Gus H. COMISKEY, III, a/k/a Trey Comiskey, and TC3, Inc., Appellants,

v.FH PARTNERS, LLC, Appellee.

No. 14–10–01001–CV.

Court of Appeals of Texas, Houston (14th Dist.).

April 12, 2012.

Rehearing Overruled July 11, 2012.

Martin J. Siegel, John Hatchett McFarland, Houston, for appellants.

R. Scott Williams, for Houston, for appellee.

Panel consists of Justices SEYMORE, BROWN, and JAMISON.

MAJORITY OPINION

MARTHA HILL JAMISON, Justice.

This appeal follows the trial court's directed verdict and entry of a declaratory judgment that FH Partners did not breach its contract with Gus H. Comiskey, III a/k/a Trey Comiskey. The crux of the dispute between the parties is FH Partners' enforcement of the cross-collateralization clause in a loan agreement. Although Comiskey was not originally a party to the agreement, he signed an Extension and Modification of the agreement along with the original debtor. After the original debtor defaulted on other loans, FH Partners used the cross-collateralization clause to foreclose on property that the debtor had deeded to Comiskey's company, TC3, Inc. In six issues, appellants,Comiskey and TC3, contend (1) they presented more than a scintilla of evidence supporting various theories of waiver, estoppel, and mutual mistake that bar FH Partners from enforcing the cross-collateralization clause, (2) the trial court erred in excluding testimony regarding the purpose of the agreement Comiskey signed, (3) they presented more than a scintilla of evidence that FH Partners committed fraud, (4) the court erred in determining that the loan documents unambiguously permit enforcement of the cross-collateralization clause, (5) the court erred in refusing to take into consideration the fair market value of foreclosed property in determining the merit of certain counterclaims, and (6) the court erred in its award of attorney's fees because FH Partners failed to segregate recoverable from unrecoverable fees.

We reverse the trial court's grant of a directed verdict on appellants' waiver claim and, consequently, the award of attorney's fees to FH Partners. We affirm the remainder of the judgment.

I. Background

The connection between Comiskey and FH Partners runs through Paul Gomberg, who was a debtor to FH Partners and a business associate of Comiskey. By May 2008, Gomberg had several loans with 1st Choice Bank, a predecessor in interest to FH Partners. One of the transactions involved a purchase money loan for $1,365 million to purchase real property on Drury Street in Houston, Texas, and the other was a purchase money loan of $900,000 for property in an area known as “Burkhart Forest.” In association with both of these notes, Gomberg executed deeds of trust to pledge the respective properties as collateral. These deeds of trust also contained cross-collateralization or “dragnet” clauses that made each property security for all of Gomberg's indebtedness to the beneficiary of the deeds of trust (at the time, 1st Choice).¹

Gomberg used the Burkhart loan to buy the Burkhart property from GHC3 Development, a corporation owned by Comiskey. The purchase price was $1.2 million; Gomberg paid $900,000 from proceeds of the 1st Choice loan and gave GHC3 a promissory note for the remainder. The promissory note also was secured by a second lien on the Burkhart property. Apparently, Gomberg intended to sell the Burkhart property to a local developer, but when that sale fell through and it appeared that Gomberg would be unable to make payment on the promissory note, Gomberg executed a deed in lieu of foreclosure, conveying the Burkhart property to TC3, a separate corporation wholly owned by Comiskey. That transaction, however, did not extinguish the debt owed to 1st Choice or 1st Choice's first lien on the Burkhart property.

On February 19, 2008, Gomberg and Comiskey went to 1st Choice's offices where both signed an “Extension and Modification” of the Burkhart note. This Extension and Modification, and the circumstances surrounding its execution, are the focus of the present litigation.

The Burkhart note was originally scheduled to mature on January 18, 2008. Under the terms of the Extension and Modification, Gomberg and Comiskey promised to pay the principal amount of the note ($900,000) plus 8% interest. The interest was due in six monthly payments beginning February 18, 2008, and the principal balance was due at maturity on July 18, 2008. FH Partners contends that it incorporated and maintained in full force the Burkhart deed of trust with its cross-collateralization, or “dragnet,” clause, and appellants contend that it extinguished the clause. A key dispute between the parties revolves around interpretation of the following paragraph in the Extension and Modification:

And the Undersigned [Gomberg and Comiskey] hereby extends said liens on said property until said indebtedness and note as so renewed, modified and extended has been fully paid, and agreed that such extension or rearrangement shall in no manner affect or impair said note or the liens securing the same and that said liens shall not in any manner be waived, the purpose of this instrument being simply to extend or rearrange the time or manner of payment of said notes and indebtedness and to carry forward all liens securing the same, which are acknowledged by the Undersigned to be valid and subsisting, and the Undersigned further agree that all terms and provisions of said original note and of the instrument or instruments creating or fixing the liens securing the same shall be and remain in full force and effect as therein written, except as otherwise expressly provided herein.

The parties' arguments regarding this paragraph will be discussed in detail below.

Bill Sellers, a senior vice president of 1st Choice, signed the Extension and Modification on behalf of 1st Choice. There is no dispute that Comiskey signed the Extension and Modification; however, at trial, there was conflicting testimony regarding the circumstances under which Comiskey signed the agreement. Comiskey testified that he asked 1st Choice's representative, Sellers, about the Burkhart note itself but it was not produced at the meeting. According to Comiskey, Sellers represented that “the key terms of what would be our relationship going forward were in that three-page document [the Extension and Modification].” Comiskey said that the terms he was interested in were the interest rate and term of the loan. Comiskey had previously requested a copy of the Burkhart note from Gomberg, but Gomberg had failed to comply with Burkhart's request. Later in his testimony, Comiskey stated it was his understanding that if he paid off the note, title to the Burkhart property would be released to him. He said that he came to this conclusion in part because of discussions he had with Sellers. When asked what Sellers said to make him think this, defense counsel objected on hearsay grounds and the trial court sustainedthe objection.²

In the offer of proof, Comiskey's attorney indicated that, had he been permitted to answer the question, Comiskey would have explained that Sellers told him the Extension and Modification was the only document he needed to review and full payment of the note would result in a full release of 1st Choice's lien on the property. Further according to the attorney, Comiskey would have testified that Sellers made these statements both before and after the Extension and Modification was signed. However, Comiskey also acknowledged in his trial testimony that he did not read all of the Extension and Modification or any of the Burkhart note or deed of trust, which were referenced in the Extension and Modification.

Sellers and Gomberg both testified that contact between Sellers and Comiskey was limited and no representations were made about any other documents. Gomberg, however, acknowledged that he was not in Comiskey's presence the entire time on the day in question when they were at 1st Choice.³

Comiskey subdivided the Burkhart property into several lots and began selling individual lots. When the first two lots sold, 1st Choice granted partial releases of its lien on those particular parcels and the majority of sale proceeds was allocated to reduce the balance on the Burkhart note.⁴ On May 23, 2008, all of Gomberg's 1st Choice debt, including the Burkhart and Drury notes, was purchased by FH Partners. As the date of the debt sale approached, Comiskey contacted AllegianceBank about the possibility of obtaining another loan to pay off the Burkhart note. Allegiance requested the current balance from 1st Choice, and 1st Choice responded with a payoff quote addressed to Gomberg, which included the following language: “PLEASE FURNISH RELEASE OF LIEN.” Sellers testified that such language typically indicated a bank was expecting to release a lien once the indicated amount was paid. Comiskey never obtained the loan from Allegiance.

After FH Partners purchased the notes, Jeff Coupe, a senior vice president for First City Servicing Corp., which managed Gomberg's notes for FH Partners, communicated with Comiskey about paying off the Burkhart note. When Comiskey sold another subdivided lot in the Burkhart property, FH Partners issued a partial release of its lien to facilitate the sale. At some point, an apparent discrepancy arose regarding the balance on the Burkhart note when Comiskey gave Gomberg a check to pay on the note, but the funds were misapplied. In the midst of this complication, Comiskey requested a statement and Coupe responded that the balance was $87,174.53.

In late April 2008, Gomberg went into default on his purchase money loan for the Drury property. Evidence reflects that he was cooperative through that summer in trying to pay the loan, but in August 2008, negotiations between Gomberg and First City (as FH Partners' representative) broke down, and FH Partners decided to foreclose on the Drury property. In that same month, Comiskey again...