Opinion issued April 18, 2013

In The

Court of Appeals 

For The 

First District of Texas 

————————————

NO. 01-12-00742-CV

———————————

THE ESTATE OF TYLER D. TODD, Appellant

V.

INTERNATIONAL BANK OF COMMERCE, Appellee

On Appeal from the 125th District Court

Harris County, Texas

Trial Court Case No. 2009-21107A

MEMORANDUM OPINION

Appellant, the estate of Tyler Todd (“Todd”), challenges the trial court’s 

rendition of summary judgment in favor of appellee, International Bank of 

Commerce (“IBC”), in IBC’s suit against him for breach of a guaranty agreement
2

and attorney’s fees. In three issues, Todd contends that the trial court erred in 

granting IBC summary judgment.

We reverse and remand.

Background

In its petition, IBC alleged that Todd and Dan Silvestri had executed 

personal guaranty agreements, each promising to pay one-half of the outstanding 

debt owed to IBC by Rainsong Partners, Ltd. (“Rainsong”), which had defaulted 

on three promissory notes secured by real estate liens. IBC further alleged that 

concurrent with the execution of the promissory notes, Todd and Silvestri had 

signed their guaranty agreements, under which they were each liable for fifty 

percent of “the outstanding principal amount at the time of demand for payment, 

accrued and unpaid interest, late charges, [attorney’s] fees, collection costs, and all 

other sums owing” by Rainsong to IBC. IBC asserted that both Todd and Silvestri 

defaulted in their obligations and brought suit for breach of the guaranty 

agreements.1

 

In his answer, Todd generally denied IBC’s allegations and asserted that 

“the foreclosure sale price of the property securing the indebtedness sought to be 

recovered was less than the fair market value of such property on the date of the 

 1 This Court recently issued an opinion concerning Silvestri’s appeal from the 

judgment in Silvestri v. International Bank of Commerce, No. 01-11-00921-CV, 

2013 WL 485804 (Tex. App.—Houston [1st Dist.] 2013, no pet. h.).
3

foreclosure sale” and IBC “only is entitled to seek a deficiency judgment equal to 

the difference between the amount owing on the note” and “the fair market value 

of the Mortgaged Property.” In his counterclaim against IBC, Todd also sought 

attorney’s fees from IBC if “successful in reducing and/or eliminating the 

indebtedness sought to be recovered” by IBC. The trial court later severed IBC’s 

suit against Todd from its suit against Silvestri. 

In its summary-judgment motion, IBC asserted that the express terms of the 

guaranty agreements alone entitled it to judgment as a matter of law. And it noted 

that on April 2, 2009, it made to Todd its final demand of repayment before 

foreclosing on the properties on April 7, 2009. IBC attached to its motion the real 

estate lien notes and guaranty agreement, which contained an addendum that 

provides,

Anything in the Guaranty to the contrary notwithstanding, the term 

“Guaranteed Indebtedness,” with respect to principal only, shall mean 

fifty percent (50%) of the outstanding principal amount at the time of 

demand by Lender on Guarantor for payment on the Guaranty of all of 

Borrower’s obligations to Lender (the “Obligations”), without giving 

effect to any prior or contemporaneous payment by any other 

guarantor(s). Accordingly, for the purposes of calculating 

Guarantor’s liability pursuant to the Guaranty, the amount of the 

Obligations shall not be reduced by any payment or payments made 

by any other guarantor(s) on any of the obligations. The term 

Guaranteed Indebtedness shall also include fifty percent (50%) of all 

accrued and unpaid interest, late charges, attorneys’ fees, all costs 

incurred by Lender in connection with the Borrower to Lender arising 

in connection with the Obligations . . . .
4

IBC asserted that, at the time of demand, there was $858,251.80 owing on the first 

note, $2,285,185.44 owing on the second note, $924,838.62 owing on the third 

note, and $1,459,666.94 in accrued interest, expenses, and attorney’s fees, for a 

total balance due of $5,527,942.80. It maintained that it was entitled to recover 

from Todd one-half of this amount, or $2,763,971.40. IBC also attached to its 

motion its winning bids at the foreclosure sale, which indicated that the three 

properties were sold to IBC for a combined total of $1,694,000. However, IBC 

argued that Todd was not entitled to a credit for the price paid at the foreclosure 

sale because, at the time of demand, the foreclosure sale had not taken place. 

In his response to IBC’s summary-judgment motion, Todd asserted that the 

promissory notes were all secured by deeds of trust. He attached to his motion 

each of the deeds of trusts, which contained identical addendums that define the 

“Mortgaged Property” for each note to include:

[A]ll permits, licenses, franchises, certificates, utility commitments 

and/or reservations, wastewater capacity reservations and other rights 

and privileges obtained in connection with the property described 

hereafter.

The addendums to the deeds of trust further provide:

4. Fair Market Value for Calculating Deficiencies. 

Notwithstanding the provisions of §§ 51.003, 51.004 and 

51.005 of the Texas Property Code (as the same may be 

amended from time to time), and to the extent permitted by law, 

Grantors agree that Beneficiary shall be entitled to seek a 

deficiency judgment from Grantors and any other party 

obligated on the Note or guaranty of the Note equal to the 
5

difference between the amount owing on the Note and fair 

market value of the Mortgaged Property as hereinafter 

determined.

Todd asserted that the addendum unambiguously provides that IBC is entitled to 

recover a deficiency judgment from Todd only if IBC proved the fair market value 

of the mortgaged property and IBC presented no competent evidence of the fair 

market value. Todd further asserted that the fair market value of the properties 

“exceeded the entire indebtedness” and “eliminate[d] all deficiency against Todd.” 

Finally, Todd asserted that IBC’s claims for attorney’s fees were “grossly 

excessive.” 

Todd attached to his response the affidavit of Jack L. Hughey, a real estate 

appraiser. Hughey testified that he reviewed an appraisal dated February 23, 2009, 

prepared for IBC by Barletta & Associates, valuing the properties at $2,420,000. 

Hughey stated that the Barletta appraisal was “incomplete” because it failed to 

include the value of Municipal Utility District (“MUD”) receivables, which had 

been previously appraised by Barletta & Associates “on an ‘as completed’ basis” at 

$3,455,000 on February 1, 2006. Based on audit reports from the MUD’s 

accountant, Hughey testified that IBC had received $988,688 in receivables from a 

2011 bond sale. Hughey also testified that e-mails between Rick Alejo and Alan 

Hirshman, two of the engineers for the MUD, indicated that more than $2,000,000 

in receivables remained to be reimbursed in future bond sales. Hughey concluded 
6

that, as of April 7, 2009, the value of the real estate was at least $2,420,000 and the 

value of the MUD receivables was at least $1,800,000. Todd also filed a “Motion 

to Determine the Fair Market Value of the Property” with the trial court. 

In its reply to Todd’s response, IBC asserted that the guaranty agreement 

“expressly sets forth the manner by which ‘Guaranteed Indebtedness’ will be 

calculated for purposes of determining liability against Todd,” without reference to 

the deeds of trusts or their addendums. IBC argued that, even if Todd was entitled 

to a credit for the fair market value of the property, the burden of establishing the 

credit rested with Todd and he had “contractually waived any offset defense.” 

Finally, IBC asserted that Todd’s evidence of fair market value was irrelevant and 

inadmissible. 

IBC also filed objections to Todd’s summary-judgment evidence. IBC 

specifically objected to Hughey’s affidavit on the grounds that it refers to 

“inadmissible hearsay” and is irrelevant, unreliable, and conclusory. It asserted 

that the October 31, 2005 appraisal, from which Hughey based his valuation of the 

MUD receivables, constitutes hearsay and is too far removed from the date of the 

foreclosure sale to rely upon. Finally, IBC argued that any speculation regarding 

the value of the MUD receivables is “unreliable and conclusory” because the 

properties at issue were never developed. 
7

The trial court granted IBC’s summary-judgment motion, and it entered a 

final judgment that IBC recover $2,763,971.40 in actual damages from Todd, 

including $122,788.63 in attorney’s fees and $10,000 for post-judgment collection 

actions. 

Standard of Review

To prevail on a summary-judgment motion, a movant has the burden of 

proving that it is entitled to judgment as a matter of law and there is no genuine 

issue of material fact. Tex. R. Civ. P. 166a(c); Cathey v. Booth, 900 S.W.2d 339,

341 (Tex.1995). When a plaintiff moves for summary judgment on its claim, it 

must establish its right to summary judgment by conclusively proving all the 

elements of its cause of action as a matter of law. Rhone Poulenc, Inc. v. Steel,

997 S.W.2d 217, 223 (Tex. 1999); Anglo–Dutch Petroleum Int’l, Inc. v. Haskell,

193 S.W.3d 87, 95 (Tex. App.—Houston [1st Dist.] 2006, pet. denied). When 

deciding whether there is a disputed, material fact issue precluding summary

judgment, evidence favorable to the non-movant will be taken as true. Nixon v. 

Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex. 1985). Every reasonable 

inference must be indulged in favor of the non-movant and any doubts must be 

resolved in his favor. Id. at 549.
8

Breach of Guaranty Agreement

In his first issue, Todd argues that the trial court erred in granting IBC 

summary judgment because it refused to consider evidence of the fair market value 

of the properties. In his second issue, Todd argues that the trial court erred in 

granting IBC summary judgment because it did not take into account the value of 

the MUD receivables.

Construction of the Guaranty

Our primary concern in construing a written contract is to ascertain the true 

intent of the parties as expressed in the instrument. Seagull Energy E & P, Inc. v. 

Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006); Valence Operating Co. v. 

Dorsett, 164 S.W.3d 656, 662 (Tex. 2005). Usually, the intent of the parties can be 

discerned from the instrument itself. ExxonMobil Corp. v. Valence Operating Co.,

174 S.W.3d 303, 312 (Tex. App.—Houston [1st Dist.] 2005, pet. denied). When 

an issue regarding the construction of a contract is presented, we must examine and 

consider the entire writing in an effort to harmonize and to give effect to all the 

provisions of the contract so that none will be rendered meaningless. Seagull 

Energy E & P, Inc., 207 S.W.3d at 345. Contract terms will be given their plain, 

ordinary, and generally accepted meanings unless the contract itself shows them to 

be used in a technical or different sense. Dorsett, 164 S.W.3d at 662. When the 

parties have entered into an unambiguous contract, the courts will enforce the 
9

intention of the parties as written in the instrument. Sun Oil Co. (Del.) v. Madeley,

626 S.W.2d 726, 731 (Tex. 1981).

A guarantor’s liability is measured by the principal’s liability unless a more 

extensive or more limited liability is expressly provided for in the guaranty. W. 

Bank–Downtown v. Carline, 757 S.W.2d 111, 113 (Tex. App.—Houston [1st Dist.] 

1988, writ denied). To determine the extent of the guarantor’s liability, we look to 

the language of the guaranty agreement. Id. If the guaranty agreement is so 

worded that it can be given a certain or definite legal meaning or interpretation, it 

is not ambiguous, and we construe the contract as a matter of law. Id. at 114. If 

uncertainty exists as to the meaning of the guaranty contract, and if two reasonable 

interpretations may be made, we apply the construction most favorable to the 

guarantor. Coker v. Coker, 650 S.W.2d 391, 394 & n.1 (Tex. 1983) (explaining 

that “guarantor is entitled to have his agreement strictly construed so that it is 

limited to his undertakings, and it will not be extended by construction or 

implication”); Clarke v. Walker–Kurth Lumber Co., 689 S.W.2d 275, 278 (Tex.

App.—Houston [1st Dist.] 1985, writ ref’d n.r.e.).

IBC largely relies on the following provision, found in the addendum to the 

guaranty, for the proposition that Todd was not entitled to a credit for the fair 

market value of the properties,

Anything in the Guaranty to the contrary notwithstanding, 

“Guaranteed Indebtedness,” with respect to principal only, shall mean 
10

fifty percent (50%) of the outstanding principal amount at the time of 

the demand by Lender on Guarantor for payment on the Guaranty of 

all Borrower’s obligations to Lender (the “Obligations”), without 

giving effect to any prior or contemporaneous payment by any other 

guarantor(s). Accordingly, for the purposes of calculating 

Guarantor’s liability pursuant to the Guaranty, the amount of the 

Obligations shall not be reduced by any payment or payments made 

by any other guarantor(s) on any of the Obligations. The term 

Guaranteed Indebtedness shall also include fifty percent (50%) of all 

accrued and unpaid interest, late charges, attorneys’ fees, all costs 

incurred by Lender in connection with the collection of the 

Obligations and the enforcement of the Guaranty, and all other sums 

owing by Borrower to Lender in connection with the Obligations, and 

all documents securing payment thereof and executed in connection 

therewith . . . .

IBC argues that because the addendum provides that “Guaranteed Indebtedness . . . 

shall mean fifty percent (50%) of the outstanding principal amount at the time of 

demand,” it provides a “method for ascertaining the guaranty liability” and 

constitutes a “formulaic guaranty.” The same addendum later provides that 

“[c]apitalized terms used in this Addendum shall have the same meaning as 

ascribed to such terms in the Guaranty unless defined otherwise herein.” 

IBC argues that the Deeds of Trust and their Addendums are not relevant to 

Todd’s liability because Todd is not a party to them. However, the guaranty 

defines “Guaranteed Indebtedness” as “all liabilities and obligations of 

Borrower . . . to Lender,” including, but not limited to, “any indebtedness, however 

evidenced, whether by promissory note, bookkeeping entry, electronic transfer, 

checks, drafts or other items, or by any other manner or form.” It specifically 
11

guarantees “the performance and discharge of the obligations of Borrower 

specified under any and all promissory notes, letters of credit, and all other 

documents and instruments (the “Security Instruments”) executed by Borrower 

and/or other parties in connection with the Guaranteed Indebtedness.” Thus, the 

guaranty itself references the documents comprising the underlying transaction in 

describing Todd’s obligations. 

Furthermore, the language and the context of the guaranty addendum reflect 

that its purpose was not to provide the sole “method for ascertaining the guaranty 

liability” as proposed by IBC. Immediately after the sentence providing that fifty 

percent of the principal balance is due “at the time of demand,” the guaranty 

addendum states that, “[a]ccordingly, for the purposes of calculating Guarantor’s 

liability pursuant to the Guaranty,” Todd’s obligations “shall not be reduced by any 

payment or payments made by any other guarantor(s).” Thus, the purpose of the

guaranty addendum was to provide that one guarantor’s repayment of his

obligations did not discharge the other’s obligations. Its purpose was not to 

provide a “formula” or the sole method for calculating the underlying obligations. 

Accordingly, we look to the underlying documents to determine the extent 

of Todd’s obligations. See Carline, 757 S.W.2d at 113 (providing that guarantor’s 

liability is measured by principal’s liability unless “expressly set forth in the 

guaranty agreement” that guarantor’s liability is to be measured otherwise); First 
12

Union Nat. Bank v. Richmont Capital Partners I, L.P., 168 S.W.2d 917, 924 (Tex. 

App.—Dallas 2005, no pet.) (“Because a guaranty is ancillary to the underlying 

contract, a dispute as to the rights and obligations of the guarantor can only be 

resolved by a factual determination of the rights and obligations of the parties to 

the underlying contract.”).

In its brief, IBC notes that the Todd guaranty was executed “[c]oncurrent 

with the execution of the Real Estate Lien Notes.” Separate instruments or 

contracts executed at the same time, for the same purpose, and in the course of the 

same transaction are to be considered as one instrument, and are to be read and 

construed together. Jones v. Kelley, 614 S.W.2d 95, 98 (Tex. 1981). Instruments 

may be construed together even though they are not between the same parties. Id. 

Here, each real estate lien note incorporates the deeds of trust, stating that,

Payment hereof is secured by a vendor’s lien retained in Deed of even 

date herewith, to the Borrower, and is additionally secured by a Deed 

of Trust, Security Agreement, and financing Statement of even date 

herewith, executed by the borrower and/or Granters thereof . . . .

The addendums to the deeds of trust further provide,

4. Fair Market Value for Calculating Deficiencies. 

Notwithstanding the provisions of §§ 51.003, 51.004 and 

51.005 of the Texas Property Code (as the same may be 

amended from time to time), and to the extent permitted by law, 

Grantors agree that Beneficiary shall be entitled to seek a 

deficiency judgment from Grantors and any other party 

obligated on the Note or guaranty of the Note equal to the 

difference between the amount owing on the Note and fair 
13

market value of the Mortgaged Property as hereinafter 

determined.

(Emphasis added.) Thus, the addendums to the deeds of trust, not the guaranty, 

provide the specific formula for calculating the underlying liability, i.e., the 

difference between the amount owing on the notes and the fair market value of the 

mortgaged properties. And they provide that IBC is entitled to seek this amount 

from the Grantors and “any other party obligated on the Note or guaranty of the 

Note.”

A review of all of the documents reveals that the intent of the parties was not 

for IBC to be entitled to foreclose on the properties and then also receive the full 

value owing on the notes from the guarantors, but instead to be made whole by 

being entitled to foreclose upon the properties and then receive the remaining 

portion of the debt not satisfied through foreclosure from the liable parties. Under 

IBC’s construction, it could receive a windfall by receiving the full amount of the 

indebtedness from the individual guarantors, plus the fair market value of the 

property it holds upon foreclosure, which, looking at all of the documents, would 

circumvent the intent of the parties and go beyond merely making IBC whole.

IBC relies on two cases for the proposition that the addendum to the 

guaranty entitles it to apply any offset first to the portion of the indebtedness not 

guaranteed by Todd: Preston Ridge Financial Services Corporation v. Tyler, 796 

S.W.2d 772 (Tex. App.—Dallas 1990, writ denied) and Humphreys v. Amwest 
14

Savings Association, No. 05-94-00969-CV, 1995 WL 479603 (Tex. App.—Dallas 

Aug. 8, 1995, no writ) (mem. op.) (not designated for publication). In Tyler, the 

defendant, Tyler, signed a guaranty agreement, personally guaranteeing a portion 

of the amount due under a promissory note secured by real property. 796 S.W.2d

at 774. The guaranty provided that Tyler was to pay “when due” all interest on 

the note and “that amount of principal indebtedness equal to the amount by with 

the sum of the outstanding principal balance of the indebtedness . . . exceeds 

$735,000.” Id. Tyler argued that because the guaranty agreement provided that 

he was to pay the guaranteed portion of the indebtedness “upon demand,” and the 

plaintiff had already foreclosed upon the properties before it had made a demand, 

he was entitled to a credit from the foreclosure proceeds, thereby reducing the 

guaranteed indebtedness below $735,000. Id. at 778. The court held that Tyler’s 

liability was measured by the principal’s liability, which became fixed when the 

principal defaulted on the note before the foreclosure sale. Id. at 779. The court 

specifically noted that the guaranty was only for a portion of the underlying debt 

and that Preston Ridge would not receive a windfall by applying the foreclosure 

proceeds to the unguaranteed portion of the debt. Id. at 780. 

Likewise, in Humphreys, the defendant, Humphreys, executed a real estate 

lien note, secured by a deed of trust, that provided that he was personally liable for 

“all amounts of principal due at any time in excess of $432,149.00.” 1995 WL 
15

479603 at *1. The deed of trust similarly limited Humphreys’s personal liability 

to any amount due in excess of $432,149. Id. Humphreys argued that proceeds 

from a foreclosure sale should be applied first to the portion of the debt on which 

he agreed to be personally liable. Id. at *3. The court concluded that the principal 

became due at the time of the acceleration, when no foreclosure sale had occurred,

so Humphreys was liable for all of the debt in excess of $432,149, without first 

applying a credit for the foreclosure sale. Id. Again, the court noted that only a 

portion of the debt was guaranteed, so the plaintiff was entitled to apply any 

foreclosure proceeds to the unguaranteed portion of the debt. Id. at *3–4.

Here, unlike in Preston Ridge and Humphreys, the entire portion of the debt 

was guaranteed by Todd and Silvestri, and IBC would receive a windfall were it

able both to foreclose on the properties and recover the entire indebtedness from 

both guarantors, which the transaction documents expressly disallowed. And, 

most importantly, the documents comprising the underlying debt specifically 

provided a credit for the fair market value of the properties.2

 See Carline, 757 

S.W.2d at 113.

 2 Because we hold that the deeds of trust are controlling and separately provide a 

credit for the fair market value of the properties, we need not address the parties’ 

arguments concerning the default statutory provisions that provide a credit for 

proceeds from a foreclosure sale. See TEX. PROP. CODE ANN. § 51.003 (Vernon

2007). 
16

IBC further argues that Todd contractually waived his right to an offset in 

the guaranty agreement. Specifically, IBC asserts that the following provision of 

the guaranty amounts to a waiver:

The liability of Guarantors shall remain and continue in full force and 

effect notwithstanding . . . (iv) any defenses or rights of set-off or 

counterclaims with Borrower may have or assert.

The addendums to the deeds of trust provide that IBC is entitled to seek a 

deficiency judgment from the borrowers or “any other party obligated on the Note 

or guaranty of the Note.” Thus, the addendums to the deed of trust do not provide 

a right to an offset, but, rather, the means by which IBC could recover its 

deficiency judgment, and the amount owed under the guaranty before any offset. 

Finally, in regard to the MUD receivables, the addendums to the deed of 

trust define “Mortgaged Property” to include:

[A]ll permits, licenses, certificates, utility commitments and/or 

reservations, wastewater capacity reservations and other rights and 

privileges obtained in connection with the property herein, . . . 

[A]ll rights, rents, revenues, benefits, leases, contracts, accounts, 

general intangibles, money, instruments, documents, tenements, 

hereditaments and appurtenances now or hereafter owned by Grantors 

and appertaining to, generated from, arising out of or belonging to the 

above-described properties or any part thereof.

IBC asserts that, nevertheless, Todd “failed to present any evidence or legal 

support that the MUD receivables were part of the property sold at foreclosure.” 

The addendums to the deed of trust require that the indebtedness be offset by the 
17

fair market value of the property. And the above provisions clearly provide for the 

inclusion of MUD receivables as a “benefit,” “contract,” or “general intangible . . . 

appertaining to, generated from, arising out of or belonging to” the properties and 

thus are appropriately a part of any fair market value assessment of the properties.

Furthermore, Todd presented evidence that Rainsong had completed its 

obligations entitling it to collect the MUD receivables. Todd attached to his 

response to IBC’s summary-judgment motion three receipts, signed by IBC in 

2011, indicating it had received three payments from the MUD. The receipts state 

that “Rainsong made all payments due to the contractors under the Construction 

Contracts in accordance with the terms of the Financing Agreement” and 

“Rainsong executed an Assignment of Agreements, assigning some or all of its 

right to receive funds from the District to IBC.” 

Evidence of Fair Market Value

IBC also argues that, even if Todd is entitled to a proportional credit for the 

fair market value of the properties, he failed to satisfy that burden because he 

“failed to present any competent evidence of the fair market value of the property 

on the date of foreclosure.” Todd asserts that he presented proper summaryjudgment evidence creating a “fact issue sufficient to defeat the Bank’s summary 

judgment.”
18

Todd attached Hughey’s affidavit to his response to IBC’s summaryjudgment motion. Relying upon an appraisal from Barletta made only two months 

before the foreclosure sale, Hughey valued the properties at $2,420,000, which he

testified was a reasonable value as of April 7, 2009, the date of the foreclosure 

sale. Hughey also noted that the maximum bid prices at the foreclosure sale, 

which were attached to IBC’s summary-judgment motion, totaled $2,240,000, and 

IBC had been able to sell 31 vacant lots on the properties at $20,000 per lot. The 

summary-judgment evidence also included IBC’s winning bids at the foreclosure 

sale, which totaled $1,694,000. IBC argues that because it took place two months 

prior to the foreclosure sale, the appraisal is irrelevant and Hughey’s reliance on it 

is conclusory. However, a respondent to a summary-judgment motion is “‘not 

required to marshal its proof; its response need only point out evidence that raises a 

fact issue on the challenged elements.’” Hamilton v. Wilson, 249 S.W.3d 425, 426 

(Tex. 2008) (quoting TEX. R. CIV. P. 166a(i) cmt. (1997)). 

Indulging every reasonable inference in favor of Todd and taking his 

evidence as true, we conclude that he at least presented a material issue of fact 

regarding the fair market value of the properties, precluding the granting of 

summary judgment in favor of IBC. Accordingly, we hold that the trial court erred 

in granting IBC summary judgment. See Nixon, 690 S.W.2d at 548–49. 

We sustain Todd’s first and second issues.
19

Attorney’s Fees

In his third issue, Todd argues that the trial court erred in awarding IBC 

attorney’s fees because they are “unreasonable,” he presented evidence that 

“creates a fact issue concerning the Bank’s attorney’s fees,” and IBC’s evidence 

supporting the award of attorney’s fees is “conclusory and insufficient.”

The guaranty provided for the award of attorney’s fees as follows,

In the event any legal action or arbitration proceeding is commenced 

in connection with the enforcement of any declaration of rights under 

this Guaranty and/or any instrument or written agreement required or 

delivered under or pursuant to the terms of this Guaranty or the 

Guaranteed Indebtedness, and/or any controversy or claim, whether 

sounding in contract, tort or statute, legal or equitable, involving in 

any way the Guaranteed Indebtedness, or any other proposed or actual 

loan or extension of credit involving Borrower, the prevailing party

shall be entitled to recover reasonable and necessary attorneys’ fees, 

paralegal costs, expert witness fees and costs, expenses and costs and 

other necessary disbursements made in connection with any such 

action or proceeding, in the amount determined by the fact-finder or 

arbitrator.

(Emphasis added.) A prevailing party is the party “who successfully prosecutes 

the action or successfully defends against it, prevailing on the main issue.” See 

Johns v. Ram Forwarding, Inc., 29 S.W.3d 635, 637–38 (Tex. App.—Houston [1st 

Dist.] 2000, no pet.). Thus, the guaranty expressly granted an award of attorney’s 

fees only for the prevailing party. Having held that the trial court erred in granting 

IBC summary judgment, we further hold that the trial court erred in awarding IBC 

its attorney’s fees at this juncture. See Probus Props. v. Kirby, 200 S.W.3d 258, 
20

265 (Tex. App.—Dallas 2006, pet. denied) (reversing trial court’s award of 

attorney’s fees to plaintiff, after holding that trial court erred in not granting 

defendant judgment notwithstanding the verdict, because plaintiff was no longer 

“prevailing party” under their contract). 

We sustain Todd’s third issue.

Conclusion

We reverse the judgment of the trial court and remand for proceedings 

consistent with this opinion.

Terry Jennings

Justice 

Panel consists of Justices Jennings, Bland, and Massengale.