Opinion issued July 25, 2019

In The

Court of Appeals 

For The 

First District of Texas 

————————————

NO. 01-18-00195-CV

———————————

SHAWN IBRAHIM, INC., MAHMOOD AKHTAR AND MUHAMMAD 

AMIN, Appellants

V.

HOUSTON- GALVESTON AREA LOCAL DEVELOPMENT 

CORPORATION AND SUNNYLAND DEVELOPMENT, INC., Appellees

On Appeal from the 113th District Court

Harris County, Texas

Trial Court Case No. 2016-40070

O P I N I O N

Appellees Houston-Galveston Area Local Development Corporation (CDC) 

and Sunnyland Development, Inc. (Sunnyland) were both involved in financing a 

construction project undertaken by appellants Shawn Ibrahim, Inc., Mahmood 
2

Akhtar, Ibrahim’s president, and Muhammad Amin, another individual associated 

with Ibrahim (collectively, Ibrahim). Ibrahim sued both CDC and Sunnyland for 

breach of contract, fraud, and other causes of action, and the trial court granted 

summary judgment dismissing all of Ibrahim’s claims. In two issues on appeal, 

Ibrahim argues that the trial court erred in granting summary judgment in favor of 

CDC and Sunnyland. We affirm.

Background

This case arises out of business relationships among Ibrahim, Sunnyland, 

and CDC entered into for the purpose of financing a construction project. 

A. The Project

Starting in 2004, Ibrahim initiated a project to build a truck stop and 

restaurant complex in La Porte, Texas (the Project). Sunnyland was the Project 

developer, and a related company, Suncoast Environmental and Construction, Inc. 

(Suncoast), was the contractor. The total estimated cost of the Project was 

$3,711,000.

As a small business, Ibrahim sought to take advantage of special financing 

available through the U.S. Small Business Association (SBA) pursuant to the 

Small Business Investment Act, which provides for a special loan program for the 

financing of fixed assets by small businesses made through local development 

companies (the 504 Loan Program). See 15 U.S.C. §§ 695–697g. As part of this 
3

program, the SBA identifies and approves certified development companies to 

participate in its lending program. Id. § 697e. Here, CDC was the certified 

development company that facilitated Ibrahim’s SBA loan.

The SBA agreed to provide $1,012,000 in secured funding for the Project

through CDC. Ibrahim obtained private funding through Sterling Bank, which 

provided a loan for fifty percent of the Project costs and also provided a smaller 

“interim” loan to allow Ibrahim to complete construction on the Project until the 

loan through the SBA could close and be used to repay the interim loan. 

Additionally, Ibrahim itself was required to contribute more than $800,000 to the 

funding of the Project. Ibrahim needed a “gap” loan of $200,000 to cover its 

portion of the Project funding, and it obtained this loan from Sunnyland.

The exact nature of the agreements and relationships between the parties is 

set out in the documents executed with regard to the Project and its funding.

B. The Debenture Guarantee

On July 28, 2005, the SBA executed its “Authorization for Debenture 

Guarantee (SBA 504 Loan),” guaranteeing, subject to certain conditions, “a 20 

year Debenture (‘Debenture’) in the amount of $1,012,000.00 to be issued by CDC 

and used to fund a loan (‘504 Loan’) to assist” Ibrahim in its completion of the 

Project (Debenture Guarantee). The Debenture Guarantee identified the Project

costs as totaling $3,711,000, and it stated that the SBA would provide a loan 
4

accounting for 26.45% of the Project costs plus certain administrative costs for a 

total “Debenture Amount” of $1,012,000. 

The Debenture Guarantee also identified several other sources of funding. It 

stated that Sterling Bank would provide $981,652 in interim financing, to be “paid 

off by the Debenture” following completion of construction and closing on the 504 

Loan through the CDC. It also contemplated that Sterling Bank would provide fifth 

percent of the Project costs, or $1,855,348, in “permanent project financing,” and it 

placed certain conditions on Sterling Bank’s note and loan documents, such as 

providing that Sterling Bank’s loan could not “be cross-collateralized with other 

financing” and requiring Sterling Bank to execute an agreement confirming that its 

note and loan documents “do or will comply” with the SBA conditions.

As a condition of authorizing the funds, the SBA required in the Debenture 

Guarantee that Ibrahim contribute 23.55% of the Project’s costs, or approximately 

$874,000, and it provided that the:

(1) Contribution may be in cash, land or other property acceptable to 

SBA;

(2) Contribution may come from [Ibrahim’s] own resources, CDC, or 

another source;

(3) If any of the contribution is borrowed and secured by any of the 

Project Property, the resulting obligation must be expressly 

subordinate to the liens securing the Promissory Note (“Note”) in 

favor of CDC and may not be repaid at a faster rate than the Note 

unless prior written approval is obtained from SBA. A copy of any 
5

debt instrument evidencing the obligation must be supplied to CDC at 

or prior to 504 Loan Closing.

The Debenture Guarantee further provided, “At or prior to the 504 Loan 

Closing, the Borrower [Ibrahim] must execute a Note in favor of CDC. The CDC 

must assign the Note to SBA.” The Debenture Guarantee also stated, “CDC must 

execute a satisfactory written assignment to SBA of its interest in the Note, lease 

and all collateral documents executed by the Borrower and guarantors.”

The Debenture Guarantee also anticipated the need for Ibrahim to obtain 

“gap” or “standby” financing from Sunnyland for a portion of its required 

contribution to the Project costs, providing:

At or prior to 504 Closing, CDC [is] to obtain Standby Creditor’s 

Agreement from Sunnyland Development, Inc., for $200,000.00, plus 

all accrued and future interest (Standby Debt). No payment of 

principal or interest is to be made on the Standby Debt during the term 

of the Loan. Standby Creditor [Sunnyland] must subordinate any lien 

rights in collateral securing the Loan to CDC’s right in the collateral, 

and take no action against Borrower or any collateral securing the 

Standby Debt without CDC’s consent. CDC must attach a copy of the 

Standby Note evidencing the Standby Debt to the Standby Creditor’s 

Agreement.

In August 2005, both CDC and Ibrahim executed an “Acceptance by 

Borrower and CDC” agreeing to fully comply with the terms and conditions of the 

Debenture Guarantee. 
6

C. Sunnyland Note

As anticipated by the Debenture Guarantee, Ibrahim borrowed $200,000 

from Sunnyland as “standby” financing. Ibrahim executed the promissory note in 

favor of Sunnyland for the $200,000 “Standby Debt” on December 19, 2005

(Sunnyland Note). The Sunnyland Note was personally guaranteed by Akhtar and 

Amin.

The Sunnyland Note provided that “[t]he Principal Amount and interest are 

due and payable in equal monthly installments of TWO THOUSAND NINE 

HUNDRED THIRTY AND 04/100 DOLLARS ($2,930.04), on the first day of 

each month, beginning July 1, 2006 and continuing until the unpaid principal and 

accrued, unpaid interest have been paid in full.” The Sunnyland Note was secured 

by a deed of trust on a portion of the real property involved in the Project. The 

Sunnyland Note further provided that “[t]he liens securing this note are subordinate 

to the 2 liens securing two notes in the original principal amounts of [$1,855,000] 

and [$982,000], respectively, both being of even date herewith, and executed by 

Shawn Ibrahim, Inc., payable to the order of Sterling Bank.” The Sunnyland Note 

further enumerated conditions in which default would occur, including if Ibrahim 

failed to make a payment, and it provided for acceleration of the amount due and 

certain late fees and interest in the event of default.
7

Thus, under the terms of the Sunnyland Note, Ibrahim’s first payment to 

Sunnyland was due July 1, 2006. However, Ibrahim failed to make any monthly 

payments, beginning in July 2006.1 

D. 504 Loan Agreement & Standby Creditor’s Agreement

Construction of the Project was completed by January 2008, and, on January 

24, 2008, the parties moved forward with closing the 504 Loan as contemplated by 

the Debenture Guarantee. 

The “504 Loan Agreement” was entered into between CDC as the lender 

and Ibrahim as the borrower “in participation with and for the benefit of the 

[SBA].” The recitals at the beginning of the 504 Loan Agreement stated, in 

relevant part:

Borrower [Ibrahim] applied to Lender [CDC] for a $1,128,000 loan 

(the “Loan”) under the SBA 504 Loan Program. Lender has 

conditionally agreed to extend the Loan to the Borrower. The Loan 

will be used to finance or refinance a project described in the 

[Debenture Guarantee]. The Loan will be evidenced by the Note2and 

by the books and records of Lender and the [Central Servicing Agent 

appointed by Lender and accepted by Borrower in the Servicing 

Agent Agreement accompanying the closing documents]. The Loan 

 

1

Instead, Ibrahim made only seven payments on the Sunnyland Note, totaling 

$57,000, between August 2008 and October 2010.

2 The 504 Loan Agreement expressly identified the “Note” as being “SBA Form 

1505,” executed with the other loan closing documents, and evidencing the Loan 

in the amount of $1,128,000 executed by Ibrahim, payable to CDC, and “assigned 

to the SBA.” 
8

will be secured by this Agreement and the other Loan Documents.3

Lender will issue a debenture to fund the Loan. The debenture will be 

guaranteed by the SBA. The Note and all liens securing the Note will 

be transferred from Lender to the SBA to secure the SBA’s guarantee 

of Lender’s Debenture.

Like the Debenture Guarantee, the 504 Loan Agreement provided that the Note 

and accompanying liens would be assigned by CDC to the SBA and that, “[a]fter 

said assignment, the SBA will be entitled to enforce the terms of the Note, this 

Agreement, and the rest of the Loan Documents.” It further provided that CDC

“will remain as a servicing agent for the Loan and will serve as such at the pleasure 

of the SBA.”

The 504 Loan Agreement further provided for the disbursement of loan 

proceeds, stating that the main portion of the loan would be disbursed to Sterling 

Bank to refinance the interim funding, and the remainder would be disbursed to 

cover the enumerated administrative costs. The 504 Loan Agreement provided for 

repayment of the loan over the next twenty years in monthly installments.

The 504 Loan Agreement also identified conditions that would constitute a 

default, including that “[a] default will have occurred if Borrower [Ibrahim] does 

not make a payment when due under the Note [securing the 504 Loan],” if Ibrahim 

 

3 The 504 Loan Agreement defined “Loan Documents” as “the documents, as 

modified, that are now or hereafter executed in connection with or as security for 

the Note, including without limitation, this Agreement and any servicing agent 

agreements, guarantees, deeds of trust, security agreements, certifications, and 

affidavits.”
9

“[d]oes not disclose . . . any material fact to Lender [CDC] or SBA,” or if Ibrahim 

“[b]ecomes the subject of a civil or criminal action that Lender believes may 

materially affect Borrower’s ability to pay the [504] Note.” The 504 Loan 

Agreement expressly referenced the Debenture Guarantee, stating, “It is the 

intention of the Borrower and Lender that this Agreement mirror the terms 

contained in the [Debenture Guarantee]. In the event of a conflict between the 

terms of this Agreement and the [Debenture Guarantee], the [Debenture 

Guarantee] will control.” 

At the same time that the 504 Loan Agreement was executed, CDC and 

Sunnyland likewise executed the Standby Creditor’s Agreement required by the 

Debenture Guarantee for the 504 Loan to close. The Standby Creditor’s Agreement 

was signed by Ajaz Siddiqui, as the president of Sunnyland, and James Walsh as 

the CDC loan officer. Neither Ibrahim nor Akhtar or Amin personally was a party

to this Agreement.

The Standby Creditor’s Agreement expressly referenced the 504 Loan made 

to Ibrahim, and it cited the “authorization” for the loan: “the Authorization for 

Debenture Guarant[ee], as amended, issued by the SBA in connection with the” 

504 Loan made through CDC. The Standby Creditor’s Agreement identified 

Shawn Ibrahim, Inc., as the “borrower” and “Standby Debtor”; it identified 

Sunnyland as the “Standby Creditor”; and it recognized CDC as the lender and 
10

certified development company authorized by the SBA. The Standby Creditor’s 

Agreement also identified the “Standby Debt” as being the “$200,000 promissory

note attached (Sunnyland Note).” It further provided:

To induce CDC to make the CDC Loan to Borrower, and in 

consideration of the making by CDC of the CDC Loan, Standby 

Creditor hereby represents, warrants and covenants to and with CDC, 

its successors and assigns, as follows:

1. There is owing by Standby Debtor to Standby Creditor the amount 

of the Standby Debt.

2. Standby Creditor agrees:

a. To accept no further payments on the Standby Debt except as 

permitted in the [Debenture Guarantee].

b. To turn over to CDC, within 15 days of receipt, payments 

received by Standby Creditor from Standby Debtor in violation 

of this Agreement.

c. To take no action to enforce claims against Standby Debtor 

on the Standby Debt, without written consent from CDC, until 

the CDC Loan is satisfied.

d. To take no action against Standby Debtor’s collateral, 

without written consent from CDC, until the CDC Loan is 

satisfied.

e. That all liens and security interests securing the Standby Debt 

are secondary and inferior to all liens and security interests 

securing the CDC Loan.

f. To sign any other documentation required by CDC to 

subordinate the liens and security interests securing the Standby 

Debt to the liens and security interests securing the CDC Loan.
11

3. CDC, in its sole discretion, may take any action without affecting 

this Agreement, including but not limited to the following:

a. Modify the terms of the CDC Loan.

b. Grant an extension or renewal of the CDC Loan.

c. Defer payments or enter into a workout agreement on the 

CDC Loan.

d. Release or substitute collateral securing the CDC Loan.

e. Forbear from collecting on existing collateral or requiring 

additional collateral.

f. Declare a default on the CDC Loan and notify Standby 

Creditor to stop accepting payments.

g. Agree to release, compromise, or settlement of the CDC 

Loan.

4. This Agreement applies to any successor to the Standby Creditor or 

assignee of the Agreement or of the Standby Debt, including any 

bankruptcy trustee or receiver or guarantors or sureties of the Standby 

Debt.

5. Additional Loans made by Standby Creditor to Standby Debtor will 

be subject to the terms of this Agreement, unless CDC agrees 

otherwise in writing.

According to the declaration of Jack Steele, the executive director of CDC, 

following the execution of the 504 Loan Agreement between CDC and Ibrahim, 

CDC “assigned all of its rights in the Loan Documents to the SBA but remain[ed] a 

‘servicing agent’ for the SBA.” However, CDC did not provide any documents 

effectuating the assignment of its interest in the 504 Loan to the SBA.
12

E. Sunnyland Note Suit

Several years after the 504 Loan closed in 2008, presumably while Ibrahim 

was still making payments on the 504 Loan, Ibrahim became dissatisfied with the 

work Sunnyland and Suncoast had completed on the Project. 

On January 14, 2011, Ibrahim filed suit in the 61st District Court of Harris 

County against Sunnyland, Suncoast, and the principals of those companies for 

breach of the construction contract and construction defects, among other claims. 

Sunnyland counterclaimed against Ibrahim for the amounts due on the Sunnyland 

Note, eventually joining Akhtar and Amin as parties in their capacities as 

guarantors on that Note (the Sunnyland Note Suit). Ibrahim settled its claims 

against Sunnyland and Suncoast, and Sunnyland’s counterclaim for the amounts 

due on the Sunnyland Note went to a bench trial. 

The trial court in the Sunnyland Note Suit found in favor of Sunnyland and

ordered Ibrahim, Akhtar, and Amin, jointly and severally, to pay $453,667.59 as 

the amount then due under the Sunnyland Note and $63,591.79 as reasonable and 

necessary attorney’s fees. 

A panel of this Court affirmed the judgment of the trial court. See Shawn 

Ibrahim, Inc. v. Suncoast Envtl. & Constr., Inc., No. 01-14-00583-CV, 2015 WL

4043242, at *1 (Tex. App.—Houston [1st Dist.] July 2, 2015, pet. denied) (mem. 

op.). In that opinion, this Court characterized the Sunnyland Note Suit as “a suit to 
13

collect on an unpaid promissory note.” Id. at *1. One of the issues raised by 

Ibrahim, Akhtar, and Amin in that appeal was whether the trial court 

“misinterpreted a standby creditor’s agreement that [Ibrahim alleged would] 

preclude[] judicial enforcement of the [Sunnyland Note], thus barring a judgment 

against [Ibrahim and the guarantors Akhtar and Amin].” Id. In analyzing the 

effect of the Standby Creditor’s Agreement on the enforcement of the Sunnyland 

Note, this Court recounted Ibrahim’s contention that “Sunnyland did not meet the 

conditions precedent required by the standby creditor’s agreement before it sued, 

which in turn bars it from enforcing the note” and that “Sunnyland had the burden 

to show conditions precedent[, i.e.,] that the [504 Loan] was satisfied and that the 

[CDC had given] its written consent for Sunnyland to enforce the note.” Id. at *3. 

Sunnyland argued, however, that Ibrahim failed to plead as an affirmative defense 

that the Standby Creditor’s Agreement precluded enforcement of the Sunnyland 

Note. Id. at *4.

This Court held that the parties had tried the issue of Ibrahim’s affirmative 

defense under the Standby Creditor’s Agreement by consent, observing that “[t]he 

standby creditor agreement was introduced at trial and discussed multiple times 

during witness testimony, without an objection from Sunnyland.” Id. In 

considering the merits of Ibrahim’s claim, this Court held, “Although Ibrahim 

proffered evidence of the standby agreement, it did not provide evidence about 
14

whether the [504 Loan Agreement] had been breached or whether [the CDC] had 

consented to Sunnyland’s suit.” Id. This Court further held that, because Ibrahim 

provided only a partial reporter’s record and did not raise the issue of whether 

Sunnyland breached the Standby Creditor’s Agreement with the CDC in its 

statement of issues on appeal, the Court was required to “presume that the trial 

court heard evidence to support its judgment that the standby agreement does not 

bar a recovery on the note due to any failure to comply with a condition 

precedent.” Id.; see also TEX. R. APP. P. 34.6 (governing filing of partial reporter’s 

record and providing that partial record will be considered sufficient to review 

issues identified in statement of points or issues to be presented on appeal that is 

included in request for partial record); Bennett v. Cochran, 96 S.W.3d 227, 229–30 

(Tex. 2002) (holding that without statement of points of issues, courts presume that 

omitted portions of record support trial court’s findings). This Court ultimately 

affirmed the trial court’s judgment in the Sunnyland Note Suit in favor of 

Sunnyland. Shawn Ibrahim, Inc., 2015 WL 4043242, at *6.

CDC did not participate in the Sunnyland Note Suit in any way, and the 

record indicates that it did not receive notice of those proceedings until, at the 

earliest, September 2014. Akhtar filed a declaration stating that he contacted CDC 

in September 2014, about six months after the final judgment in the Sunnyland 

Note Suit, while the case was pending in this Court on appeal. He stated that he 
15

informed a woman named Brenda Edwards that Sunnyland had violated the terms 

of the loan documents, including the Standby Creditor’s Agreement, by seeking 

payment on the Sunnyland Note. CDC disputes that it received this notice and 

contends that Ibrahim never sought its involvement in the Sunnyland Note Suit 

proceedings.

F. Present Suit against CDC and Sunnyland

Ibrahim filed the present lawsuit on June 12, 2016. In its petition, Ibrahim 

set out facts establishing the contractual relationships discussed above.

Ibrahim argued in its petition that the Debenture Guarantee “identified the 

Sunnyland Note” and expressly prohibited any payment of principal or interest on 

the Sunnyland Note during the term of the 504 Loan. The pleadings also asserted, 

It was the clear intention of the SBA and CDC to prevent Sunnyland 

from requiring, collecting, or receiving payments on the Sunnyland 

Note before the 504 Loan was satisfied. As was intended, Ibrahim 

relied on the Authorization [i.e., Debenture Guarantee] and the 

Standby Creditor’s Agreement, and did not make regular or timely 

payments on the Sunnyland Note.

Ibrahim argues that Sunnyland violated the Standby Creditor’s Agreement when it

sued to collect on the Sunnyland Note and obtained the resulting judgment, 

affirmed by this Court, for payments due under the Sunnyland Note and attorney’s

fees—$547,259.38 plus interest. Ibrahim further alleged that Sunnyland “continues 

to take action” to enforce its claim on the Sunnyland Note in violation of the 

Standby Creditor’s Agreement and that “[t]he CDC was notified and, with actual 
16

notice and knowledge of Sunnyland’s violations, is failing to take action to enforce 

the Standby Creditor’s Agreement against Sunnyland.”

Based on these facts and allegations, Ibrahim alleged causes of action 

against CDC and Sunnyland for breach of contract, promissory estoppel, fraud, and 

negligent misrepresentation. Ibrahim sought damages consisting of the amount due 

under the final judgment in the Sunnyland Note Suit plus the attorney’s fees and 

other expenses that it incurred in litigating the Sunnyland Note Suit. 

On September 9, 2017, CDC filed its motion for summary judgment.4 CDC 

asserted multiple traditional and no-evidence grounds for summary judgment 

dismissing all of Ibrahim’s claims against it. Primarily, CDC asserted that none of 

the Loan Documents created a duty to Ibrahim to enforce the Standby Creditor’s

Agreement against Sunnyland, nor could the Loan Documents be construed as a 

representation that CDC would so enforce the Standby Creditor Agreement. CDC 

also moved for summary judgment on various affirmative defenses such as waiver 

and prior material breach. CDC further asserted that Ibrahim had no evidence of 

 

4 This was actually CDC’s second motion for summary judgment. CDC had 

previously filed a combined plea to the jurisdiction and motion for summary 

judgment, asserting an immunity defense and other grounds for dismissal of 

Ibrahim’s claims. The trial court denied the plea to the jurisdiction on immunity 

grounds, but did not provide a ruling on the remainder of the grounds raised in 

CDC’s first motion. CDC re-urged the grounds from its first motion, but the trial 

court ultimately only ruled on the second motion for summary judgment, so that is 

the motion that we review on appeal. 
17

one or more essential elements on its breach of contract, promissory 

estoppel/detrimental reliance, fraud, and negligent misrepresentation claims.

CDC argued that the Loan Documents created a subordination agreement by 

which Sunnyland agreed to defer its collection of the Sunnyland Note, but they did 

not create any duty on the part of the SBA or CDC to enforce the Loan Documents 

against Sunnyland to protect Ibrahim from having to pay the Sunnyland Note.

CDC also asserted res judicata, despite the fact that it was not a party to the prior 

Sunnyland Note Suit, based on the fact that in the first suit Ibrahim unsuccessfully 

raised the issue of the effect of the Standby Creditor Agreement on its obligation to 

pay the Sunnyland Note. As summary judgment evidence, CDC provided the Loan 

Documents discussed above, certified copies of the court filings from the 

Sunnyland Note Suit, and declarations of CDC’s executive director and its 

attorney.

Sunnyland likewise moved for summary judgment dismissing Ibrahim’s 

claims against it based on res judicata, claiming that the judgment in the Sunnyland 

Note Suit precluded Ibrahim from raising its breach of contract and other claims in 

the present suit.

On February 12, 2018, the trial court granted CDC’s and Sunnyland’s 

motions for summary judgment and dismissed all of Ibrahim’s claims against both 

parties. This appeal followed.
18

Sunnyland’s Summary Judgment

In its second issue on appeal, Ibrahim argues that the trial court erred in 

granting summary judgment in favor of Sunnyland because Sunnyland failed to 

establish as a matter of law that all of Ibrahim’s claims against it are barred by res 

judicata.

A. Standard of Review

We review a trial court’s ruling on a summary judgment motion de novo.

City of Richardson v. Oncor Elec. Delivery Co., 539 S.W.3d 252, 258 (Tex. 2018). 

To prevail on a traditional summary judgment motion, the movant bears the burden 

of proving that no genuine issues of material fact exist and that it is entitled to 

judgment as a matter of law. TEX. R. CIV. P. 166a(c); City of Richardson, 539 

S.W.3d at 258–59. When a defendant moves for traditional summary judgment, it 

must either: (1) disprove at least one essential element of the plaintiff’s cause of 

action, or (2) plead and conclusively establish each essential element of an 

affirmative defense, thereby defeating the plaintiff’s cause of action. Lujan v. 

Navistar Fin. Corp., 433 S.W.3d 699, 704 (Tex. App.—Houston [1st Dist.] 2014, 

no pet.) (citing Cathey v. Booth, 900 S.W.2d 339, 341 (Tex.1995) (per curiam);

Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex.1995)).

If the movant meets its burden, the burden then shifts to the nonmovant to 

raise a genuine issue of material fact. See Katy Venture, Ltd. v. Cremona Bistro 
19

Corp., 469 S.W.3d 160, 163 (Tex. 2015) (per curiam); see also First United 

Pentecostal Church of Beaumont v. Parker, 514 S.W.3d 214, 220 (Tex. 2017)

(stating that fact question exists if evidence rises to level that would enable 

reasonable and fair-minded people to differ in their conclusions). We review the 

evidence presented in the motion and response in the light most favorable to the 

nonmovant, crediting favorable evidence if reasonable jurors could and 

disregarding contrary evidence unless reasonable jurors could not. Mann Frankfort 

Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009) (citing

City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005)). We indulge every 

reasonable inference and resolve any doubts in the nonmovant’s favor. Helix 

Energy Sols. Grp., Inc. v. Gold, 522 S.W.3d 427, 431 (Tex. 2017).

B. Law of Res Judicata

Res judicata is an affirmative defense that bars the re-litigation of certain 

claims or cases between parties which have already been decided. See Travelers 

Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010); Eagle Oil & Gas Co. v. 

Shale Expl., LLC, 549 S.W.3d 256, 266 (Tex. App.—Houston [1st Dist.] 2018, pet. 

dism’d). The burden is on the party asserting an affirmative defense to plead and 

prove the defense’s respective elements. See Hill v. Heritage Res., Inc., 964 

S.W.2d 89, 137 (Tex. App.—El Paso 1997, pet. denied). 
20

To successfully assert the affirmative defense of res judicata, a party must 

prove: (1) a final prior judgment on the merits by a court of competent jurisdiction; 

(2) the identity of the parties, or those in privity with them; and (3) a second action 

based on the same claims as were or could have been raised in the first action.

Joachim, 315 S.W.3d at 862; Eagle Oil & Gas Co., 549 S.W.3d at 266. “When 

applicable, res judicata bars the second, subsequent suit.” Eagle Oil & Gas Co., 

549 S.W.3d at 266 (citing Joachim, 315 S.W.3d at 862); see also Engelman 

Irrigation Dist. v. Shields Bros., Inc., 514 S.W.3d 746, 750 (Tex. 2017) (“Res

judicata bars the relitigation of claims that have been finally adjudicated or that 

could have been litigated in the prior action.”) (quoting Igal v. Brightstar Info. 

Tech. Grp., Inc., 250 S.W.3d 78, 86 (Tex. 2008)); Tex. Water Rights Comm’n v. 

Crow Iron Works, 582 S.W.2d 768, 771–72 (Tex. 1979) (holding that party may 

not pursue claim determined by final judgment of court of competent jurisdiction 

in prior suit as ground of recovery in later suit against same parties).

“When, as here, the material facts are not disputed, the applicability of res 

judicata presents a question of law, which we review de novo.” Eagle Oil & Gas 

Co., 549 S.W.3d at 267.

C. Analysis

In the prior Sunnyland Note Suit, the trial court ordered Ibrahim to pay 

damages to Sunnyland. In the present suit, Ibrahim sued Sunnyland seeking to 
21

recover those damages plus the costs and attorney’s fees Ibrahim incurred in 

defendant the Sunnyland Note Suit. Ibrahim pleaded causes of action for breach of 

contract, fraud, negligent misrepresentation, and promissory estoppel against 

Sunnyland, alleging that it breached the Standby Creditor’s Agreement and other 

provisions in the Loan Documents providing that Sunnyland was required to 

subordinate its interest in the Sunnyland Note to CDC’s interest in the 504 Loan. 

Specifically, Ibrahim relies on (1) the provision from the Debenture Guarantee 

stating that “No payment of principal or interest is to be made on the Standby Debt 

[i.e., the Sunnyland Note] during the term of the [504] Loan” and (2) the provision 

of the Standby Creditor’s Agreement between CDC and Sunnyland in which 

Sunnyland agreed “[t]o accept no further payments on the Standby Debt except as 

permitted in the [Debenture Guarantee].” 

Sunnyland moved for summary judgment on the ground that res judicata 

barred these claims. Sunnyland asserted that this issue—i.e. the effect of the 

Standby Creditor’s Agreement on Ibrahim’s obligation to pay under the Sunnyland 

Note—was litigated in the Sunnyland Note Suit between itself and Ibrahim. The 

trial court in the Sunnyland Note Suit was a court of competent jurisdiction that 

rendered a final judgment rejecting Ibrahim’s defense under the Standby Creditor’s 

Agreement, and that judgment was affirmed by this Court. See Shawn Ibrahim, 

Inc., 2015 WL 4043242, at *1, *4. As summary judgment evidence, Sunnyland 
22

provided certified copies of the pleadings, findings of fact and conclusions of law, 

and the final judgment of the trial court in the Sunnyland Note Suit. The trial court

granted Sunnyland’s motion for summary judgment.

Reviewing Sunnyland’s summary judgment evidence, we conclude that it 

established the elements of res judicata. The trial court in the prior Sunnyland 

Note Suit rendered a final judgment on the merits of Sunnyland’s claim for 

enforcement of the Sunnyland Note and the defenses raised by Ibrahim, including 

its defense that the terms of the Standby Creditor’s Agreement prevented 

Sunnyland from enforcing the Sunnyland Note against Ibrahim. That judgment 

was affirmed by this Court. Ibrahim, Akhtar, Amin, and Sunnyland were all parties 

to the Sunnyland Note Suit. And the claims raised in this second action are based 

on the same rights and obligations of the parties and were raised in the Sunnyland 

Note Suit. See id.; see also Joachim, 315 S.W.3d at 862 (reciting elements of res 

judicata); Eagle Oil & Gas Co., 549 S.W.3d at 266 (same). Thus, the burden 

shifted to Ibrahim to raise a fact issue on at least one element of Sunnyland’s 

affirmative defense. See Katy Venture, Ltd., 469 S.W.3d at 163.

As Ibrahim acknowledges in its brief on appeal, there is no dispute that the 

Sunnyland Note Suit was a final determination on the merits by a court of 

competent jurisdiction or that the Sunnyland Note Suit involved the same parties as 

the present case. Rather, Ibrahim argues that “Sunnyland fails to establish the third 
23

element [requiring that the second action be based on the same claims as were or 

could have been raised in the first action] because the claims in this lawsuit are not 

the same claims that the first action was based on, nor are they claims that were 

required to have been raised in that lawsuit.” Ibrahim acknowledges that, in the 

Sunnyland Note Suit, it “argued that the Standby Creditor’s Agreement barred 

Sunnyland from enforcing the [Sunnyland Note].” Ibrahim argues, however, that 

this present suit presents a different claim. It now asserts that Sunnyland breached 

the Standby Creditor’s Agreement by pursuing collection on the Sunnyland Note

without CDC’s consent and that Sunnyland committed fraud or made a negligent 

misrepresentation that its Note would be subordinate to the 504 Loan and that it

would not take action to collect on the Sunnyland Note before the 504 Loan was 

paid. 

Ibrahim further argues that its claims in the present suit “are substantively 

distinct from Sunnyland’s claim in the first lawsuit, and they arise from a different 

transaction.” It argues that the Sunnyland Note Suit “concerned performance of 

the $200,000 note between Ibrahim and Sunnyland that was signed in December 

2005” and that Ibrahim raised the Standby Creditor’s Agreement “only as a 

defense to its alleged obligations under the Sunnyland Note.” It contends that this 

present case, by contrast, “concerns the formation and performance of that Standby 

Creditor’s Agreement, signed in January 2008, and specifically whether, in 
24

entering that agreement, Sunnyland made promises on which Ibrahim justifiably 

relied but which Sunnyland did not keep.” These distinctions, however, are not 

borne out by the record.

The question of whether Sunnyland breached the Standby Creditor’s 

Agreement or committed fraud or some other tort in attempting to enforce the 

Sunnyland Note is not a separate legal question from the ultimate enforceability of 

the Sunnyland Note. Rather, the existence and terms of the Standby Creditor’s 

Agreement constituted an affirmative defense to Sunnyland’s collection and 

enforcement attempt in the Sunnyland Note Suit. See e.g., Tamsco, Inc. v. Janus, 

553 S.W.2d 244, 246 (Tex. App.—Waco 1977, writ ref’d n.r.e.) (holding that if 

subordination agreement was to be used as defense to suit to enforce subordinate 

note, then debtor bears burden to come forward with proof that senior creditor 

would treat collection of subordinate note as breach of subordination agreement); 

Montesino v. Arguello, 433 So.2d 383, 386 (La. Ct. App. 1983) (holding that “the 

provisions of the Standby Agreement provide that the obligation to [the standby 

creditor] shall be payable when the SBA loan has been paid” and that “those 

written documents have modified the terms of the [standby creditor’s] promissory 

note”; concluding that “the terms of the note were modified by the Standby 

Agreement” and thus, “nothing was owed on the note when suit was filed [and] the 

note [was] not due until after payment . . . of the SBA loan”); Culp v. Tri-Cty.
25

Tractor, Inc., 736 P.2d 1348, 1351–52 (Idaho Ct. App. 1987) (recognizing that 

subordination agreements “were intended to protect the bank,” but nevertheless 

holding, “[T]he fact remains that such protection [afforded by the subordination 

clause providing that debtor ‘make no payment to’ the subordinate creditors until 

its obligation to the bank had been satisfied or until the bank consented] was 

created by altering the rights and duties embodied in the promissory notes” and 

that debtor “was entitled to invoke these agreements as a defense to claims that it 

defaulted by failing to pay” under terms of subordinate promissory note).

Ibrahim’s claim that the Standby Creditor’s Agreement obligated Sunnyland 

to forebear on collecting on the Sunnyland Note should have been—and in fact 

was—raised in the prior Sunnyland Note Suit. See Shawn Ibrahim, Inc., 2015 WL 

4043242, at *3–4 (concluding that defense to enforcement created by Standby 

Creditor’s Agreement was tried by consent in trial court and that Ibrahim failed to 

prove its entitlement to that defense). Ibrahim cannot now recategorize these same 

arguments as breach of contract or tort claims in an attempt to get Sunnyland to 

pay to Ibrahim as damages in the present suit the very judgment that the trial court 

awarded to Sunnyland in the first suit. See Engelman Irrigation Dist., 514 S.W.3d 

at 750 (“Res judicata bars the relitigation of claims that have been finally 

adjudicated or that could have been litigated in the prior action.”); Tex. Water 

Rights Comm’n, 582 S.W.2d at 771–72 (holding that party may not pursue claim 
26

determined by final judgment of court of competent jurisdiction in prior suit as 

ground of recovery in later suit against same parties).

We overrule Ibrahim’s second issue.

CDC’s Summary Judgment

In its first issue on appeal, Ibrahim argues that the trial court erred in 

granting CDC’s motion for summary judgment and dismissing all of Ibrahim’s 

claims against CDC.

A. Standard of Review

CDC moved for traditional summary judgment on multiple grounds, which 

we review under the standard set out above in our discussion of Ibrahim’s claims 

against Sunnyland. CDC also moved for summary judgment on no-evidence 

grounds. After an adequate time for discovery, the party without the burden of 

proof may move for a no-evidence summary judgment on the basis that there is no 

evidence to support an essential element of the nonmovant’s claim. TEX. R. CIV. P. 

166a(i); Hamilton v. Wilson, 249 S.W.3d 425, 426 (Tex. 2008) (per curiam). The 

trial court must grant the no-evidence summary judgment unless the nonmovant 

produces competent summary judgment evidence raising a genuine issue of 

material fact on the challenged elements. TEX. R. CIV. P. 166a(i); Hamilton, 249 

S.W.3d at 426. We apply the legal-sufficiency standard of review to no-evidence

summary judgment motions. See Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 
27

581–82 (Tex. 2006); City of Keller, 168 S.W.3d at 823, 827. Applying that 

standard, a no-evidence point will be sustained when (1) there is a complete 

absence of evidence of a vital fact, (2) the court is barred by rules of law or 

evidence from giving weight to the only evidence offered to prove a vital fact, (3) 

the evidence offered to prove a vital fact is no more than a mere scintilla, or (4) the 

evidence conclusively establishes the opposite of a vital fact. City of Keller, 168 

S.W.3d at 810; King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003).

To defeat a no-evidence motion, the nonmovant must produce at least a 

scintilla of evidence raising a genuine issue of material fact as to the challenged 

elements. Lightning Oil Co. v. Anadarko E & P Onshore, LLC, 520 S.W.3d 39, 45 

(Tex. 2017). “More than a scintilla of evidence exists if the evidence ‘rises to a 

level that would enable reasonable and fair-minded people to differ in their 

conclusions.’” Essex Crane Rental Corp. v. Carter, 371 S.W.3d 366, 376 (Tex. 

App.—Houston [1st Dist.] 2012, pet. denied) (quoting Merrell Dow Pharms., Inc. 

v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)). A nonmoving party is not required 

to marshal all of its proof, but it must present countervailing evidence that raises a 

genuine fact issue on the challenged elements. Sw. Elec. Power Co. v. Grant, 73 

S.W.3d 211, 215 (Tex. 2002) (citing TEX. R. CIV. P. 166a). We consider the 

evidence in the light most favorable to the nonmovant and indulge every 
28

reasonable inference from the evidence in the nonmovant’s favor. Lightning Oil, 

520 S.W.3d at 45.

When, as here, the summary judgment order does not specify the grounds on 

which it was granted, the appealing party must demonstrate that none of the 

proposed grounds are sufficient to support the judgment. West v. SMG, 318 S.W.3d 

430, 437 (Tex. App.—Houston [1st Dist.] 2010, no pet.). We will affirm a 

summary judgment ruling if any of the grounds asserted in the motion are 

meritorious. Lightning Oil, 520 S.W.3d at 45.

B. Breach of Contract

In its first issue on appeal, Ibrahim argues, in relevant part, that the trial 

court erred in granting CDC’s motion for summary judgment because CDC failed 

to establish as a matter of law that it did not make any express or implied promises 

to Ibrahim. CDC acknowledges the existence of the contracts in this case, but 

argues that nothing in the Loan Documents constituted a contract or other promise 

or representation to Ibrahim obligating CDC to enforce its right to subordinate the 

Sunnyland Note to the 504 Loan. We agree with CDC.

1. Law Governing Breach of Contract Claim

To prevail on its breach of contract claim against CDC, Ibrahim was 

required to establish (1) the existence of a valid contract; (2) performance or 

tendered performance by the plaintiff; (3) breach of the contract by the defendant; 
29

and (4) damages sustained as a result of the breach. B & W Supply, Inc. v. 

Beckman, 305 S.W.3d 10, 16 (Tex. App.—Houston [1st Dist.] 2009, pet. denied).

To maintain a breach of contract action, a plaintiff must show privity of contract or 

that it is a third-party beneficiary under the contract. OAIC Commercial Assets, 

L.L.C. v. Stonegate Vill., L.P., 234 S.W.3d 726, 738 (Tex. App.—Dallas 2007, pet. 

denied). A person seeking to establish third-party beneficiary status must 

demonstrate that the contracting parties “intended to secure a benefit to that third 

party” and “entered into the contract directly for the third party’s benefit.” First 

Bank v. Brumitt, 519 S.W.3d 95, 102 (Tex. 2017) (quoting Stine v. Stewart, 80 

S.W.3d 586, 589 (Tex. 2002) (per curiam)); City of Houston v. Williams, 353 

S.W.3d 128, 145 (Tex. 2011) (stating that third parties have standing to recover 

under contracts that are clearly intended for their direct benefit and that contract 

need not have been executed solely to benefit third party).

Contract language that can be given a certain or definite meaning is not 

ambiguous, and in that situation we construe the contract as a matter of law.

Chrysler Ins. Co. v. Greenspoint Dodge of Houston, Inc., 297 S.W.3d 248, 252 

(Tex. 2009) (per curiam). In construing a written contract, our primary concern is 

to ascertain the true intention of the parties as expressed in the plain language of 

the contract. N. Shore Energy, L.L.C. v. Harkins, 501 S.W.3d 598, 602 (Tex. 2016)

(per curiam); Plains Expl. & Prod. Co. v. Torch Energy Advisors Inc., 473 S.W.3d 
30

296, 305 (Tex. 2015). “We ‘construe contracts from a utilitarian standpoint bearing 

in mind the particular business activity sought to be served,’ and avoiding 

unreasonable constructions when possible and proper.” Plains Expl. & Prod., 473 

S.W.3d at 305 (quoting Reilly v. Rangers Mgmt., Inc., 727 S.W.2d 527, 530 (Tex. 

1987)). We consider the entire writing, harmonizing and giving effect to all of the 

contract provisions so that none of them will be rendered meaningless. Id.; J.M. 

Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003); see also Moayedi v. 

Interstate 35/Chisam Road, L.P., 438 S.W.3d 1, 7 (Tex. 2014) (“When parties 

disagree over the meaning of an unambiguous contract, we determine the parties’

intent by examining the entire agreement.”). “No single provision taken alone is 

given controlling effect; rather, each must be considered in the context of the 

instrument as a whole.” Plains Expl. & Prod., 473 S.W.3d at 305.

The Texas Supreme Court has held that “well-established law” provides that 

instruments pertaining to the same transaction may be read together to ascertain the 

parties’ intent, “even if the parties executed the instruments at different times and 

the instruments do not expressly refer to each other.” Fort Worth Indep. Sch. Dist. 

v. City of Fort Worth, 22 S.W.3d 831, 840 (Tex. 2000).

2. Construction of the Loan Documents

In seeking recovery of the sums it was ordered to pay and the attorney’s fees 

it incurred in the Sunnyland Note Suit, Ibrahim argues that CDC breached the 
31

Debenture Guarantee and the Standby Creditor’s Agreement by failing to enforce 

the terms of those agreements and thereby prevent Sunnyland from collecting or 

attempting to collect on the Sunnyland Note.

As Ibrahim correctly argues, the Debenture Guarantee—executed by the 

SBA on July 28, 2005, and approved by Ibrahim and CDC in August 2005—

contemplated that Ibrahim would obtain standby funding of $200,000 from 

Sunnyland and that this standby loan would be subordinate to the 504 Loan once it 

closed. Specifically, the Debenture Guarantee contemplated that Ibrahim would

borrow a portion of its financial contribution to the Project costs from a third-party 

lender and stated:

If any of the contribution is borrowed and secured by any of the 

Project Property, the resulting obligation must be expressly 

subordinate to the liens securing the Promissory Note (“Note”) in 

favor of CDC and may not be repaid at a faster rate than the Note 

unless prior written approval is obtained from SBA.

The Debenture Guarantee further contemplated the specific details of Ibrahim’s 

standby funding from Sunnyland, providing: 

At or prior to 504 Closing, CDC [is] to obtain [a] Standby Creditor’s 

Agreement from Sunnyland Development, Inc., for $200,000.00, plus 

all accrued and future interest (Standby Debt). No payment of 

principal or interest is to be made on the Standby Debt during the term 

of the Loan. Standby Creditor must subordinate any lien rights in 

collateral securing the Loan to CDC’s right in the collateral, and take 

no action against Borrower or any collateral securing the Standby 

Debt without CDC’s consent. CDC must attach a copy of the Standby 

Note evidencing the Standby Debt to the Standby Creditor’s 

Agreement.
32

Subsequently, at the closing for the 504 Loan that occurred in January 2008, 

CDC fulfilled its obligation under the Debenture Guarantee to provide an executed 

Standby Creditor’s Agreement. The Standby Creditor’s Agreement, executed 

between CDC and Sunnyland on January 24, 2008, expressly referenced the 504 

Loan made to Ibrahim, and it cited the requirements of the Debenture Guarantee. 

The Standby Creditor’s Agreement identified Shawn Ibrahim, Inc., as the 

“borrower” and “Standby Debtor”; it identified Sunnyland as the “Standby 

Creditor”; and it recognized CDC as the lender and certified development company 

authorized by the SBA. It provided:

To induce CDC to make the CDC Loan to Borrower [Ibrahim], and in 

consideration of the making by CDC of the CDC Loan, Standby 

Creditor [Sunnyland] hereby represents, warrants and covenants to 

and with CDC, its successors and assigns, as follows:

1. There is owing by Standby Debtor to Standby Creditor the amount 

of the Standby Debt [$200,000].

2. Standby Creditor agrees:

a. To accept no further payments on the Standby Debt except as 

permitted in the [Debenture Guarantee].

b. To turn over to CDC, within 15 days of receipt, payments 

received by Standby Creditor from Standby Debtor in violation 

of this Agreement.

c. To take no action to enforce claims against Standby Debtor 

on the Standby Debt, without written consent from CDC, until 

the CDC Loan is satisfied.

. . . .
33

Ibrahim argues that these provisions create at least a fact question as to 

whether CDC owed Ibrahim a duty to enforce the Standby Creditor’s Agreement 

and, thus, to prevent Sunnyland from enforcing or collecting on the Sunnyland 

Note. However, we observe that resolution of this question involves the 

construction of these unambiguous contracts and, therefore, is not a question of 

fact but a legal question that we determine as a matter of law. See Chrysler Ins. 

Co., 297 S.W.3d at 252 (holding that contract language that can be given certain or 

definite meaning is not ambiguous and is construed as a matter of law).

Under their plain language, these provisions of the Debenture Guarantee and 

the Standby Creditor’s Agreement act to subordinate the Sunnyland Note to the 

504 Loan. See Montesino, 433 So.2d at 386; Culp, 736 P.2d at 1351–52. These 

provisions required that Sunnyland agree to forbear collecting on or enforcing the 

Sunnyland Note in favor of the 504 Loan, and it vested CDC5 with the right to 

enforce the terms of the Standby Creditor’s Agreement. The Standby Creditor’s 

Agreement further provided that CDC could consent to Sunnyland taking action to 

collect on the Sunnyland Note. And it provided that CDC was entitled to have 

 

5 CDC argues that the rights under the 504 Loan were assigned to the SBA, and that 

the right to enforce the terms of the Standby Creditor’s Agreement and other Loan 

Documents now rests with the SBA. CDC cites to the declaration of its executive 

director indicating that the 504 Loan was assigned to the SBA following closing. 

Ibrahim argues that this is no evidence that the 504 Loan was actually assigned, 

and we note that the SBA is not a party to this lawsuit, which asks us to determine 

CDC’s obligations to Ibrahim under the Loan Documents. Thus, we do not address 

what obligations, if any, fall to the SBA.
34

Sunnyland transfer to CDC, “within 15 days of receipt, payments received by 

[Sunnyland] from [Ibrahim] in violation of this Agreement.” 

These terms were thus developed to allow CDC to protect its investment 

through the 504 Loan—nothing in the terms of either the Debenture Guarantee or 

the Standby Creditor’s Agreement indicated that these terms were to benefit 

Ibrahim. See, e.g., Tamsco, Inc., 553 S.W.2d at 246 (holding that subordination 

agreement is “for the sole benefit” of senior creditor); Culp, 736 P.2d at 1351 

(recognizing that purpose of subordination agreements was “to protect the bank,” 

the senior creditor in that case). While Ibrahim was entitled to invoke this 

provision as a defense to Sunnyland’s attempt to enforce the Sunnyland Note—and 

Ibrahim did in fact make that argument in the Sunnyland Note Suit, albeit 

unsuccessfully—it does not follow that the Standby Creditor’s Agreement vested

CDC with an obligation to raise that defense on Ibrahim’s behalf or otherwise 

defend and indemnify Ibrahim in a suit between Ibrahim and Sunnyland.

We conclude that the Debenture Guarnatee and Standby Creditor’s

Agreement gave CDC the right to prevent Sunnyland from enforcing and 

collecting on the Sunnyland Note, but these documents did not create an obligation

for CDC to do so for Ibrahim’s benefit. In fact, the Standby Creditor’s Agreement 

expressly states that CDC can consent to Sunnyland’s collection efforts. 
35

We also observe that Ibrahim was not a party to the Standby Creditor’s 

Agreement—it was executed between Sunnyland and CDC. To the extent that 

Ibrahim argues it is a third-party beneficiary of this Agreement, we disagree. See 

OAIC Commercial Assets, L.L.C., 234 S.W.3d at 738 (holding that plaintiff must 

show privity of contract or status as third-party beneficiary under contract to 

maintain breach of contract action). There is no evidence, either in the Loan 

Documents themselves or in any other summary judgment evidence, that the 

contracting parties here “intended to secure a benefit to” Ibrahim in subordinating 

the Sunnyland Note to the 504 Loan, or that they entered into the Standby 

Creditor’s Agreement “directly for [Ibrahim’s] benefit.” See Brumitt, 519 S.W.3d 

at 102. To the contrary, the Standby Creditor’s Agreement was intended to benefit 

CDC, and through it the SBA, by protecting its investment in making the 504 

Loan. The 504 Loan itself was intended, in part, to benefit Ibrahim, but the 

subordination agreements between the creditors were for the benefit of CDC. See

Williams, 353 S.W.3d at 145 (stating that third parties have standing to recover 

under contracts that are clearly intended for their direct benefit and that contract 

need not have been executed solely to benefit third party); Tamsco, Inc., 553 

S.W.2d at 246 (holding that subordination agreement is “for the sole benefit” of 

senior creditor).
36

Ibrahim argues that, even if the express terms of the contract do not require 

CDC to enforce the Standby Creditor’s Agreement, “as a necessary extension of 

CDC’s express promise to obtain Sunnyland’s agreement to take no action against 

Ibrahim on the [Sunnyland Note], CDC made an implied promise to enforce that 

agreement.” We disagree. 

In construing a written contract, our primary concern is to ascertain the true 

intention of the parties as expressed in the contract. N. Shore Energy, 501 S.W.3d 

at 602; Plains Expl. & Prod. Co., 473 S.W.3d at 305. “Generally, a court looks 

only to the written agreement to determine the obligations of contracting parties.” 

Universal Health Servs., Inc. v. Renaissance Women’s Group, P.A., 121 S.W.3d 

742, 747 (Tex. 2003). To imply a term into an agreement, it must appear that it is 

necessary to do so in order to effectuate the purposes of the contract as a whole as 

gathered from the written instrument. See Fielding, 289 S.W.3d at 850; HECI Expl. 

Co., 982 S.W.2d at 888; WesternGeco, L.L.C. v. Input/Output, Inc., 246 S.W.3d 

776, 783 (Tex. App.—Houston [14th Dist.] 2008, no pet.). “[I]mplied covenants 

are not favored by law and will not be read into contracts except as legally 

necessary to effectuate the plain, clear, unmistakable intent of the parties.” In re 

Bass, 113 S.W.3d 735, 743 (Tex. 2003) (orig. proceeding).

Considering the Loan Documents as a whole, nothing in the documents 

indicates that some implied term is necessary to effectuate the purposes of the 
37

contract. Taken together, the Loan Documents serve the purpose of providing the 

necessary funding for the Project, and the documents at issue here address the 

terms under which Ibrahim could obtain the 504 Loan from CDC, acting on behalf 

of the SBA. Both the Sunnyland Note and the 504 Loan created an obligation for 

the lenders—Sunnyland and CDC, respectively—to loan Ibrahim money that it 

would then be liable to repay under the terms of those loans. The lenders agreed 

between themselves to subordinate one of the loans, but there is no indication that 

this was for Ibrahim’s benefit or that the loan documents required some additional 

terms to effectuate the intent of the parties beyond those expressly provided in the 

relevant agreements. Nothing in the Loan Documents constitutes “an express 

promise that cannot reasonably be performed absent some type of performance by 

[another] party,” and, thus, we need not “imply a return promise so that the 

dealings of the parties can be construed to mean something rather than nothing at 

all.” See Fielding, 289 S.W.3d at 850. Accordingly, we reject Ibrahim’s argument 

that the documents reflect an “implied” promise in this case. See id.

Ibrahim also asserts that construing these documents as CDC contends they 

must be construed would make CDC’s agreement with Sunnyland “a meaningless 

promise,” arguing that CDC “agreed to obtain a written agreement that prohibited 

Sunnyland from enforcing its note without consent, but now CDC claims it had no 

obligation to actually provide its consent or to enforce that provision.” It relies on 
38

cases holding that courts should avoid interpreting contracts in a manner that 

renders a provision meaningless. See, e.g., Coker v. Coker, 650 S.W.2d 391, 393 

(Tex. 1983). However, the construction that the Standby Creditor’s Agreement and 

other subordination provisions in the Loan Documents were entered into between 

CDC and Sunnyland for their own benefit does not render the provisions 

meaningless. The subordination terms created a right that CDC could choose to 

enforce. It is not necessary that the terms also create a corresponding obligation to 

do so in order to have meaning. And nothing in the Loan Documents indicates that 

CDC did not retain the right to waive performance of any aspect of those 

provisions. 

We conclude that CDC established, as a matter of law, that nothing in the 

Loan Documents obligated it to enforce the Standby Creditor’s Agreement with 

Sunnyland, and, accordingly, we conclude that the trial court properly granted 

CDC’s motion for summary judgment on this ground. 

C. Ibrahim’s Remaining Claims Against CDC

Ibrahim also asserted causes of action for promissory estoppel/detrimental 

reliance, fraud, and negligent misrepresentation against CDC. CDC asserted, in its 

motion for summary judgment and on appeal, that Ibrahim provided no evidence of 

any promise to Ibrahim that could support a claim for promissory estoppel; there 

was no evidence that it made any representation on this matter to Ibrahim; and that 
39

it made no statement to Ibrahim that could support a claim for negligent 

misrepresentation. See Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 

341 S.W.3d 323, 337 (Tex. 2011) (providing that elements of fraud include “that a 

material representation was made” and that “the representation was false”); Fed. 

Land Bank Ass’n of Tyler v. Sloane, 825 S.W.2d 439, 442 (Tex. 1991) (holding 

that elements of neglegent misrepresentation include that person made 

representation “in the course of his business, or in a transaction in which he has a 

pecuniary interest” and that person “supplies ‘false information’ for the guidance 

of others in their business”); Miller v. Raytheon Aircraft Co., 229 S.W.3d 358, 

378–79 (Tex. App.—Houston [1st Dist.] 2007, no pet.) (holding that elements of 

promissory estoppel are (1) promise, (2) foreseeability of reliance by promisor, and 

(3) substantial reliance by promisee to his detriment) (citing English v. Fischer, 

660 S.W.2d 521, 524 (Tex. 1983)).

Ibrahim based its claims on these causes of action on the same arguments set 

out above—that the obligations created by the Loan Documents constituted a 

representation by CDC to Ibrahim that CDC would enforce the Standby Creditor’s 

Agreement and other subordination provisions to prevent Sunnyland from 

collecting or attempting to collect the amounts due on the Sunnyland Note until 

after the 504 Loan was fully discharged. As discussed above, nothing in the Loan 

Documents can be construed as such a representation. Ibrahim did not provide any 
40

other summary judgment evidence identifying any promise or representation made 

outside of those memorialized in the Loan Documents. Accordingly, the trial court 

correctly granted summary judgment dismissing these causes of action.6

We overrule Ibrahim’s first issue.

Conclusion

We affirm the judgment of the trial court.

Evelyn V. Keyes

Justice

Panel consists of Justices Keyes, Higley, and Goodman.

 

6

In the trial court, Ibrahim also sought a declaratory judgment that the amount due 

and owing to Sunnyland under the final judgment in the Sunnyland Note Suit be 

paid into the registry of the Court and credited to the debt owed by Ibrahim to the 

CDC. However, it does not challenge the trial court’s judgment dismissing this 

declaratory judgment claim on appeal. See Asset Prot. & Sec. Servs., L.P. v. 

Armijo, 570 S.W.3d 377, 382 (Tex. App.—El Paso 2019, no pet.) (“Our power of 

review in civil cases is constrained by what arguments appear in the parties’ briefs 

and we cannot address unassigned error.”) (citing Pat Baker Co. v. Wilson, 971 

S.W.2d 447, 450 (Tex. 1998) (per curiam)).