Ford v. City State Bank of Palacios

• Decision Date: 01 March 2001
• Docket Number: No. 13-99-005-CV,13-99-005-CV
• Citation: 44 S.W.3d 121
• Parties: (Tex.App.-Corpus Christi 2001) GARY C. FORD, Appellant, v. THE CITY STATE BANK OF PALACIOS AND J. DON LANDRY, Appellees.
• Court: Texas Court of Appeals

Page 121

44 S.W.3d 121 (Tex.App.-Corpus Christi 2001)

GARY C. FORD, Appellant, v. THE CITY STATE BANK OF PALACIOS AND J. DON LANDRY, Appellees.

No. 13-99-005-CV

Court of Appeals of Texas, Corpus Christi.

March 1, 2001

On appeal from the 23rd District Court of Matagorda County, Texas. [Copyrighted Material Omitted]

[Copyrighted Material Omitted]

[Copyrighted Material Omitted]

[Copyrighted Material Omitted]

[Copyrighted Material Omitted]

Before Justices Hinojosa, Yanez, and Seerden¹

OPINION

Hinojosa, Justice

Appellant, Gary C. Ford, filed a lender liability suit against appellees, The City State Bank of Palacios (CSB) and J. Don Landry. Appellees moved for summary judgment, and the trial court granted the motion. By six issues, appellant challenges the trial court's order granting appellees' motion for summary judgment. We affirm.

A. Traditional Summary Judgment

When we review a traditional summary judgment brought under Texas Rule of Civil Procedure 166a(c), we must follow these well-established rules:

(1) the movant has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law;

(2) in deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the nonmovant will be taken as true; and

(3) every reasonable inference must be indulged in favor of the nonmovant and any doubts must be resolved in favor of the nonmovant.

American Tobacco Co., Inc. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997); Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex. 1985). A defendant's motion for summary judgment should be granted if he disproves at least one essential element of each of the plaintiff's causes of action, or if he establishes all the elements of an affirmative defense as a matter of law. Grinnell, 951 S.W.2d at 425; Science Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997); Randall's Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995). Evidence favoring the movant's position will not be considered unless it is uncontradicted. Great Am. Reserve Ins. Co. v. San Antonio Plumbing Supply Co., 391 S.W.2d 41, 47 (Tex. 1965). We accept as true evidence in support of the motion if not controverted. Swilley v. Hughes, 488 S.W.2d 64, 67 (Tex. 1972). Once the movant establishes its right to summary judgment as a matter of law, the burden shifts to the nonmovant to offer any issue or evidence that would preclude summary judgment. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979).

If a summary judgment is granted generally, without specifying the reason, it will be upheld if any ground in the motion for summary judgment can be sustained. Bradley v. State ex rel. White, 990 S.W.2d 245, 247 (Tex. 1999); Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989); Weakly v. East, 900 S.W.2d 755, 758 (Tex. App.--Corpus Christi 1995, writ denied); Benavides v. Moore, 848 S.W.2d 190, 192 (Tex. App.--Corpus Christi 1992, writ denied).

B. "No-Evidence" Summary Judgment

When a party moves for summary judgment under Texas Rule of Civil Procedure 166a(i), asserting there is no evidence of one or more essential elements of the nonmovant's claims upon which the nonmovant would have the burden of proof at trial, the movant does not bear the burden of establishing each element of its own claim or defense. General Mills Restaurants, Inc. v. Texas Wings, Inc., 12 S.W.3d 827, 832 (Tex. App.--Dallas 2000, no pet. h.); Lampasas v. Spring Ctr., Inc., 988 S.W.2d 428, 432-33 (Tex. App.--Houston [14th Dist.] 1999, no pet.); see also Tex. R. Civ. P. 166a(i). Instead, the burden then shifts to the nonmovant to present enough evidence to be entitled to a trial: evidence that raises a genuine fact issue on the challenged elements. See Tex. R. Civ. P. 166a cmt. If the nonmovant is unable to proffer enough evidence, the trial judge must grant the motion. Lampasas, 988 S.W.2d at 433.

A no-evidence summary judgment is improper if the respondent brings forth more than a scintilla of probative evidence to raise a genuine issue of material fact. Merrell Dow Pharm. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997); Zapata v. The Children's Clinic, 997 S.W.2d 745, 747 (Tex. App.--Corpus Christi 1999, pet. denied). Less than a scintilla of evidence exists when the evidence is so weak as to do no more than create a mere surmise or suspicion of a fact. Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983); Zapata, 997 S.W.2d at 747. More than a scintilla of evidence exists when the evidence rises to a level that would enable reasonable and fair-minded people to differ in their conclusions. Havner, 953 S.W.2d at 711; Zapata, 997 S.W.2d at 747.

C. Factual and Procedural History

Taking the evidence favorable to appellant as true and resolving all reasonable inferences and doubts in his favor, the facts of the case are as follows. On May 24, 1994, appellant executed a promissory note (Note One) in the amount of $91,000 payable to CSB. The note provided for seven annual payments of $18,080. Note One was secured by an Agricultural Security Agreement granting CSB a lien on all of appellant's accounts, equipment and farm products, including cattle and "the born and unborn offspring thereof." CSB knew the purpose of the loan was to refinance cattle and an equipment note, pay past due pasture rents, and purchase an additional sixty-five head of cattle. Landry, a CSB employee, submitted appellant's application for a loan guaranty to the Farmers Home Administration (FmHA). FmHA agreed to guarantee a loan to appellant in the amount of ninety percent of the indebtedness ($81,900). With part of the loan proceeds, appellant acquired sixty-five additional cattle. Appellant made the first payment on time in May, 1995. At that time, he was pasturing his cattle near his home in Bay City, Texas.

In the fall of 1995, appellant began experiencing marital problems, which distracted him from his business. Also, the price of cattle dropped greatly due to drought conditions. Appellant called Landry and told him he anticipated that he would not be able to make the May, 1996 payment on Note One. After obtaining the necessary FmHA approval, Landry arranged an extension of payments until November 25 of each year. Landry also offered appellant other financing. On November 30, 1995, appellant executed a second note (Note Two) to CSB in the amount of $23,142.50, secured by liens on vehicles and trailers. However, contrary to appellant's affidavit testimony that Note Two was a new indebtedness, Note Two recites "this Note is given in renewal of, but not in novation or discharge of, Loan Number 62297." Appellant had previously signed Loan Number 62297 to pay off five existing loans he had with CSB.

In June 1996, appellant told Landry he would not be able to make the November 25, 1996 payment because of the continuing poor market conditions in the cattle industry. Landry and CSB promised not to default the note, and promised that appellant could make the loan payment later when market conditions improved. However, it is uncontroverted that Landry told appellant he would have to once again obtain FmHA approval for an extension of the loan.

Appellant says that he relied on the promises made by Landry and CSB. If not for these promises, he would have sold his cattle at distressed prices in order to meet the second note payment. Appellant was finally able to sell some of his cattle at "a decent rate" in early December, 1996. On December 9, 1996, he made a partial payment of $11,249.09 on Note One, leaving over $6,000 still due on the payment that had been due on November 25, 1996. Appellant also informed CSB that he was moving the rest of the cattle to Baxter Island.

Shortly after the December 9 payment, Landry referred appellant to Scott Arbuckle, whom Landry identified as "an agent and loan packager for CSB," for assistance with "some additional paperwork" to extend Note One, which Landry described as "a mini-loan package." Appellees' uncontradicted summary judgment evidence shows that the "additional paperwork" was documentation necessary to obtain the required FmHA approval of the refinancing. It is undisputed that appellant never completed the FmHA package.

On December 17, 1996, appellant executed a third note (Note Three) to CSB in the amount of $3,500, secured by accounts receivable. This amount was applied to the interest then outstanding on Note One because, as Landry informed appellant, the FmHA would not approve the renewal and extension unless the interest was paid in full.

On December 21, 1996, appellant received a letter from "CSB agent Arbuckle that required a new loan package, requiring the $91,000 Note to be a new loan with new wetlands designations, which CSB and Landry knew [appellant] could not comply with because [he] had moved his cattle to a different location." The new loan package contained new fees and incidental costs. Appellant had no money to pay the additional costs. It is undisputed that appellant never completed this package.

On April 30, 1997, appellant filed for relief under Chapter 13 of the United States Bankruptcy Code because Landry had informed him that CSB was going to foreclose on the collateral. Appellant filed schedules with the bankruptcy court that listed the debt owed to CSB as uncontested, undisputed and liquidated, and did not list any claim appellant may have had against CSB or Landry. Appellant's Chapter 13 plan provided for payments to the trustee of $2,237 per month for sixty months to pay off CSB's claim.

CSB filed a motion with the bankruptcy court asking for relief from the automatic stay, based on appellant's removal of the collateral cattle to Baxter Island, a remote island "south of Matagorda." CSB contended the pasturage on the island was poor, and the cattle were in danger of drowning if there was a storm. After a preliminary evidentiary hearing before the bankruptcy...