Jain v. Plainscapital Bank
| Decision Date | 26 April 2017 |
| Docket Number | No. 10-15-00396-CV,10-15-00396-CV |
| Parties | HIREN JAIN, Appellant v. PLAINSCAPITAL BANK, Appellee |
| Court | Texas Court of Appeals |
From the 249th District Court Somervell County, Texas
MEMORANDUM OPINIONIn three issues, appellant, Hiren Jain, complains about a summary judgment granted in favor of appellee, Plainscapital Bank. Specifically, Jain contends that: (1) Plainscapital did not prove the elements necessary to procure a summary judgment; (2) he presented one or more issues that preclude summary judgment; and (3) the trial court's summary-judgment order is void for lack of subject-matter jurisdiction. We affirm.
On or about October 28, 2011, 7M Hospitality, Inc. ("7M"), as the borrower, executed a promissory note with First National Bank ("FNB") in the original principal amount of $3,412,500. The note was purportedly secured by a La Quinta hotel in Glen Rose, Texas. Also on or about October 28, 2011, Jain signed an unconditional personal guaranty of the promissory note for the full amount of $3,412,500, as well as all interest, collection expenses, late fees, acceleration fees, and attorney's fees due on every claim involving the indebtedness of 7M under the note.
By July 17, 2013, 7M had defaulted on the promissory note by failing to repay FNB as promised. As indicated in its letter of default and demand for payment, FNB accelerated the debt and demanded payment of the principal, per-diem interest, court and collection costs, and all fees, including attorney's fees. FNB sent its letter of default and demand for payment to 7M and Jain. Shortly thereafter, FNB went into receivership with the Federal Deposit Insurance Corporation.
On or about September 13, 2013, certain assets of FNB were purchased by or assigned to Plainscapital. Among the assets acquired by Plainscapital was the 7M promissory note. In its filings in the trial court and on appeal, Plainscapital asserts that it has been a holder in due course of the 7M promissory note, as well as Jain's personal guaranty since September 13, 2013.
Jain failed to make payments according to the personal guaranty. Accordingly, on December 3, 2013, Plainscapital sued Jain under the personal guaranty. Jain responded to Plainscapital's lawsuit by filing a general denial and asserting numerous affirmative defenses, among other things. Later, Jain filed a motion to dismiss this lawsuit under the principals of "(1) no justiciable issue[,] (2) judicial estoppel, (3) collateral estoppel, (4) failure of conditions precedent, (5) lack of standing, (6) mootness, and (7) res judicata."
However, while the suit was pending in the trial court, 7M filed for Chapter 11 Bankruptcy protection on November 5, 2013. On May 14, 2014, the bankruptcy court entered an order confirming 7M's plan for reorganization.
On October 27, 2014, Plainscapital filed a traditional motion for summary judgment, arguing that: (1) the personal guaranty is a valid and enforceable contract; (2) Jain is the proper party to sue for breach of contract; (3) Plainscapital and its predecessor-in-interest properly performed their contractual obligations; (4) Jain breached the personal guaranty by failing to make payments on the 7M note; and (5) the breach caused Plainscapital $3,285,966.02 in damages with interest accruing at $280.61 per day. Additionally, Plainscapital requested reasonable and necessary attorney's fees incurred in the prosecution of the suit and any subsequent appeals. Jain filed a lengthy response to Plainscapital's summary-judgment motion.
After a hearing, the trial court granted Plainscapital's traditional motion for summary judgment. The trial court ordered Jain to pay $3,269,126.01 as the amount owedunder the personal guaranty, post-judgment interest at a rate of $279.29 per day and 5% per year on the total judgment, $13,651 in attorney's fees, costs in the amount of $1,016.28, and additional attorney's fees for appeals to this Court and the Texas Supreme Court.1 Jain filed a motion for new trial, which was overruled by operation of law. See TEX. R. CIV. P. 329b(c). This appeal followed.
We review the trial court's grant of a traditional motion for summary judgment de novo. See Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). When reviewing a traditional motion for summary judgment, we must determine whether the movant met its burden to establish that no genuine issue of material fact exists and that the movant is entitled to judgment as a matter of law. See TEX. R. CIV. P. 166a(c); Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002). The movant bears the burden of proof in a traditional motion for summary judgment, and all doubts about the existence of a genuine issue of material fact are resolved against the movant. See Grant, 73 S.W.3d at 215. We take as true all evidence favorable to the non-movant, and we indulge every reasonable inference and resolve any doubts in the non-movant's favor. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). We will affirm a traditional summaryjudgment only if the record establishes that the movant has conclusively proved its defense as a matter of law or if the movant has negated at least one essential element of the plaintiff's cause of action. IHS Cedars Treatment Ctr. of DeSoto, Tex., Inc. v. Mason, 143 S.W.3d 794, 798 (Tex. 2004); Am. Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997). Moreover, a party relying on an affirmative defense to defeat a motion for summary judgment must raise a genuine issue of material fact as to each element of the defense. Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex. 1984); Birenbaum v. Option Care, Inc., 971 S.W.2d 497, 504 (Tex. App.—Dallas 1997, pet. denied).
In his third issue, Jain argues that the trial court's order granting summary judgment is void for lack of subject-matter jurisdiction. Specifically, Jain complains about the motion to dismiss he filed in the trial court.
At the outset, we note that Jain did not secure a ruling from the trial court on his motion to dismiss. Texas Rule of Appellate Procedure 33.1(a) requires a timely request, objection, or motion to preserve a complaint for appellate review. See TEX. R. APP. P. 33.1(a). Rule 33.1(a)(2) also required Jain to secure a ruling on his motion to dismiss from the trial court or object to the trial court's refusal to rule. See id. at R. 33.1(a)(2). Jain has done neither. Accordingly, we cannot say that he has preserved his complaints in this issue. See id.
In any event, even if Jain had obtained a ruling from the trial court, a review of Jain's motion to dismiss reveals that his arguments are based on the same contention that his obligations under the guaranty agreement were extinguished or modified by 7M's Chapter 11 reorganization plan, and thus, the bankruptcy court had exclusive jurisdiction over this matter. As we explain later, Jain's obligations under the guaranty agreement were not modified or extinguished by 7M's Chapter 11 reorganization plan. As such, Jain's motion to dismiss lacks merit. We therefore overrule Jain's third issue.
In his first issue, Jain contends that Plainscapital did not prove all elements necessary to obtain a summary judgment. Specifically, Jain argues that: (1) Plainscapital did not prove the occurrence or conditions upon which liability is based; (2) the terms of the guaranty were not strictly followed; (3) Plainscapital failed to prove ownership of the guaranty; (4) Plainscapital failed to prove default on the underlying note; and (5) Plainscapital failed to prove the balance due on the underlying note.
In its live pleading, Plainscapital asserted a claim under the personal guaranty executed by Jain. In other words, Plainscapital alleged that Jain breached the guaranty agreement. To recover on a breach of a guaranty agreement, the plaintiff, Plainscapital, must prove: (1) the existence and ownership of the guaranty agreement; (2) the terms of the underlying contract by the holder; (3) the occurrence of the conditions upon which liability is based; and (4) the failure or refusal to perform the promise by the guarantor.See Byrd v. Estate of Nelms, 154 S.W.3d 149, 157 (Tex. App.—Waco 2004, pet. denied) (); see also Gold's Gym Franchising LLC v. Brewer, 400 S.W.3d 156, 160 (Tex. App.—Dallas 2013, no pet.).
Plainscapital attached the following evidence to its traditional motion for summary judgment: (1) an affidavit of Michael Cocanougher, a Senior Vice President and Asset Manager for Plainscapital; (2) the underlying promissory note executed by 7M; (3) Jain's personal guaranty agreement associated with the 7M promissory note; (4) "Plaintiff's Notice of Default, Demand for Payment, and Notice of Intent to Accelerate to Defendant; Notice of Prior Acceleration and Foreclosure Sale"; and (5) an affidavit executed by Plainscapital's counsel. As noted above, the promissory note indicated that 7M borrowed $3,412,500 from FNB on or about October 28, 2011. On the same date, Jain executed an unconditional personal guaranty to FNB for the full principal amount of the promissory note. Cocanougher's affidavit also describes this information. Furthermore, as indicated in Cocanougher's affidavit, on or about September 13, 2013, Plainscapital purchased 7M's promissory note and began to service the note immediately. However, 7M eventually defaulted on the promissory note.
In any event, on July 17, 2013, Plainscapital's predecessor-in-interest, FNB, sent 7M and Jain, by certified mail, the "Notice of Default, Demand for Payment[,] and Notice of Intent to Accelerate" letter. In this letter, 7M and Jain were informed that paymentsunder...
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