Opinion issued May 14, 2024

In The

Court of Appeals 

For The

First District of Texas 

————————————

NO. 01-21-00602-CV

———————————

SENIOR CARE LIVING VI, LLC AND MARK C. BOULDIN, Appellants

V.

PRESTON HOLLOW CAPITAL, LLC, UMB BANK N.A., AND TMI 

TRUST COMPANY, Appellees

On Appeal from the 458th District Court

Fort Bend County, Texas

Trial Court Case No. 19-DCV-265897

OPINION ON REHEARING

Appellant Mark C. Bouldin has filed a motion for rehearing of our November 

30, 2023, opinion and judgment. Additionally, appellee Preston Hollow Capital, 

LLC (“Preston Hollow”) has filed a motion for rehearing and a motion for en banc 
2

reconsideration. We deny the motions for rehearing, withdraw our November 30, 

2023 opinion and judgment, and issue this opinion and judgment in their stead.

1

This case arises out of financing arrangements for the construction of an 

assisted living facility in Sugar Land, Texas. Appellant Senior Care Living VI, LLC 

(“Senior Care”) borrowed proceeds from the sale of bonds to construct the facility, 

and it signed a series of promissory notes reflecting this debt. Bouldin guaranteed 

payment of the notes.

After appellees UMB Bank N.A. and TMI Trust Company, the purported 

successor trustees under the relevant documents, threatened foreclosure following 

Senior Care’s alleged default on the promissory notes, Senior Care sought a 

temporary restraining order and asserted claims for affirmative relief. Preston 

Hollow, the “Noteholder Representative” and “Series 2017A Majority 

Representative” under the relevant documents, intervened and sought recovery of 

the outstanding debt from Senior Care and from Bouldin on his guaranty.

1 Because we issue a new opinion, Preston Hollow’s motion for en banc 

reconsideration is moot. See In re Wagner, 560 S.W.3d 309, 312 (Tex. App.—

Houston [1st Dist.] 2017, orig. proceeding [mand. denied]) (“Because we issue a 

new opinion in connection with the denial of rehearing, the motion for en banc 

reconsideration is rendered moot.”); see also Poland v. Ott, 278 S.W.3d 39, 41 (Tex. 

App.—Houston [1st Dist.] 2008, pet. denied) (noting that motion for en banc 

reconsideration is rendered moot by withdrawal and reissuance of opinion and 

judgment); Brookshire Bros., Inc. v. Smith, 176 S.W.3d 30, 41 n.4 (Tex. App.—

Houston [1st Dist.] 2004, pet. denied) (supp. op. on reh’g) (noting that motion for 

en banc reconsideration is moot when motion for rehearing is granted and new 

opinion and judgment issue).
3

The trial court rendered summary judgment that UMB Bank and TMI Trust 

Company were properly appointed as successor co-trustees. The trial court also 

dismissed two of Senior Care’s affirmative claims pursuant to a Rule 166(g) pretrial 

management order. After a bench trial, the trial court ruled for Preston Hollow on its 

claim for breach of the “Bond Documents,” finding that Senior Care had defaulted, 

the debt had been properly accelerated, and Bouldin was liable under his guaranty 

agreement for the accelerated debt on the promissory notes. The trial court entered 

judgment against Senior Care and Bouldin, jointly and severally, for $52,597,040.06 

in outstanding principal on the accelerated debt and pre-judgment interest, $250,000 

in trial-level attorney’s fees, and $520,000 in conditional appellate attorney’s fees. 

The court also appointed a post-judgment receiver for Senior Care with authority to 

sell the property.

Both Senior Care and Bouldin filed notices of appeal. Senior Care raises six 

issues on appeal and contends that (1) the trial court erred in granting summary 

judgment that UMB Bank and TMI had been properly appointed as co-Master 

Trustees; (2) Preston Hollow lacked capacity to sue Senior Care because Preston 

Hollow had not provided the required notice to the Master Trustee to do so; 

(3) Preston Hollow failed to prove that Senior Care was liable for breach of the 

“Bond Documents” because, among other reasons, Preston Hollow failed to prove 

valid acceleration of the underlying debt; (4) Preston Hollow failed to prove the 
4

amounts due under the promissory notes; (5) Preston Hollow was not entitled to a 

receivership because it did not plead for this relief;2and (6) the trial court erred by 

dismissing Senior Care’s claims for conversion and money had and received 

pursuant to a Rule 166(g) pretrial management order.

Bouldin raises five issues on appeal and contends that (1) Preston Hollow 

lacked the capacity to sue Bouldin on his guaranty agreement; (2) Preston Hollow 

cannot recover under the Master Indenture because that document had been 

amended, but Preston Hollow did not offer the amended document into evidence; 

(3) the evidence does not support the award of damages; (4) the “conditional” 

assertion of claims by UMB Bank and TMI do not support the judgment; and (5) the 

trial court erred by requiring Bouldin to pay attorney’s fees.

We affirm in part, reverse in part, and remand for further proceedings.

2 During the pendency of this appeal, the receiver moved for a final accounting and 

sought to be discharged. On March 21, 2023, the trial court granted this request and, 

among other things, discharged the receiver from all duties, responsibilities, and 

obligations under the trial court’s post-judgment receivership order. We therefore 

conclude that Senior Care’s fifth issue is moot. See Glassdoor, Inc. v. Andra Grp., 

LP, 575 S.W.3d 523, 527 (Tex. 2019) (stating that case becomes moot during 

pendency of litigation if issues presented are no longer “live” or parties lack legally 

cognizable interest in outcome) (quoting Heckman v. Williamson Cnty., 369 S.W.3d 

137, 162 (Tex. 2012)).
5

Background

A. The Transaction to Finance Construction of an Assisted Living Facility

Mark Bouldin is the president and owner of Senior Care Ownership 3, Inc., 

the entity that manages Senior Care. Bouldin is a real estate developer who has 

developed numerous projects over the last twenty years, including several assisted 

living facilities for seniors throughout the southern United States.

Around 2016, an engineer who works with Bouldin identified a property in 

Sugar Land that he believed would be ideal for a new assisted living facility called 

Inspired Living at Missouri City. Throughout the initial stages of development, 

Bouldin was also having discussions with Piper Jaffray, a bond underwriter, about 

the possibility of issuing bonds to raise funds to acquire the land and develop the 

facility. Eventually, an agreement was reached concerning the financing of the 

project through the issuance and sale of bonds, and the relevant parties executed a 

series of documents that set out the various rights and obligations.

On January 1, 2017, Woodloch Health Facilities Development Corporation 

(“Woodloch”) issued four tiers of over $44 million in bonds: (1) $30,320,000 in taxexempt Series 2017A-1 bonds; (2) $2,580,000 in taxable Series 2017A-2 bonds; 

(3) $2,025,000 in taxable Series 2017A-3 bonds; and (4) $9,750,000 in subordinate 

Series 2017B bonds. Woodloch entered into a Trust Indenture and Security 

Agreement (“the Bond Indenture”) with Branch Banking and Trust Company 
6

(“BB&T”), which agreed to serve as the Bond Trustee. Woodloch and BB&T are 

the only signatories to the Bond Indenture. Preston Hollow, which purchased over 

$21 million in Series 2017A-1 bonds, was named the “Series 2017A Majority 

Representative,” a position that had certain rights under the Bond Indenture, but it 

did not sign this document.

The Bond Indenture contemplated that Woodloch would simultaneously enter 

into a Loan Agreement with Senior Care, under which Woodloch would loan the 

proceeds from the sale of the bonds to Senior Care. The Bond Indenture authorized 

the sale of the bonds, authorized the issuance of promissory notes (“the Notes”) to 

secure repayment of the loan to Senior Care, and assigned most of Woodloch’s rights 

as issuer of the bonds to BB&T as the Bond Trustee. The rights assigned to BB&T 

included Woodloch’s right to receive loan payments from Senior Care.

The Bond Indenture set out the interest rate and maturity date for each series 

of bonds. This document also directed BB&T to establish several different funds 

with specific purposes for the bond proceeds and stated that all proceeds “shall be 

held by the Bond Trustee in trust and shall be applied only in accordance with the 

provisions of this Bond Indenture.” The Bond Indenture contained provisions 

describing what constitutes an “Event of Default,” and it allowed BB&T to 

accelerate payment of the unpaid principal and interest on the bonds and to exercise 

remedies upon default. The Bond Indenture also contained provisions authorizing 
7

the appointment of co-Bond Trustees, allowing BB&T to resign as the Bond Trustee, 

and authorizing the appointment of a successor Bond Trustee.

On the same date that Woodloch and BB&T signed the Bond Indenture, 

Woodloch and Senior Care entered into a Loan Agreement. In this agreement, 

Woodloch agreed to use the proceeds from the sale of the bonds to fund a loan to 

Senior Care by depositing the proceeds with BB&T, as provided in the Bond 

Indenture. Senior Care agreed to use the loan proceeds to “pay a portion of the costs 

of acquiring, constructing, developing, furnishing[,] and equipping” the assisted 

living facility. It also agreed to “make payments sufficient to pay the principal of, 

premium, if any, and interest on the Series 2017 Bonds when due.” Senior Care 

agreed to execute a series of promissory notes to secure payment of the loan, deliver 

the Notes to BB&T, and make all payments required by the Notes.

In the Loan Agreement, Senior Care also agreed to promptly pay all lawful 

taxes assessed against the property; promptly pay or satisfy all indebtedness, claims, 

and demands against it; and ensure that no liens attached to the property. The Loan 

Agreement defined several “Events of Default,” including Senior Care’s failure to 

make any principal or interest payment on the Notes, Senior Care’s failure to 

perform or comply with any covenant contained in the Loan Agreement, and the 

occurrence of any “Event of Default” under another bond document. The agreement 
8

allowed BB&T, upon the occurrence of an Event of Default, to declare all payments 

due on the Notes to be immediately due and payable.

Senior Care signed four promissory notes, one for each of the bond series 

issued by Woodloch. Each of the Notes required Senior Care to make interest 

payments on June 1 and December 1 of each year, beginning in 2017 and ending in 

the year the respective series of bonds matured. The Notes corresponding to the 

Series 2017A-2 bonds and the Series 2017B bonds required Senior Care to make 

yearly principal payments beginning December 1, 2021. For the Series 2017A-1 

Note, the yearly principal payment would not begin until December 1, 2028. For the 

Series 2017A-3 Note, the only principal payment would be on December 1, 2028, 

the date that series of bonds matured. Woodloch assigned each of the Notes to 

BB&T.

As part of this transaction, Senior Care and BB&T, as the “Master Trustee,” 

signed a “Master Trust Indenture, Deed of Trust and Security Agreement” (“the 

Master Indenture”). In the Master Indenture, Senior Care granted a security interest 

to BB&T in “[a]ll revenue, Accounts (including any Blocked Account),3accounts 

3 Senior Care and BB&T as the Master Trustee also executed a “Blocked Account 

Control Agreement.” Under this agreement, BB&T maintained a deposit account 

for Senior Care’s benefit, and Senior Care granted BB&T, in its capacity as Master 

Trustee, a security interest in the funds contained in the account. The Master 

Indenture required Senior Care to “cause all Gross Revenues to be deposited into 

the Blocked Account” within seven business days of receipt.
9

receivable, and Gross Revenues” of Senior Care, in any amounts on deposit in the 

accounts required to be created under the Master Indenture and the Bond Indenture, 

and the property with improvements. Under the Master Indenture, BB&T held this 

property in trust “first, for the equal and proportionate benefit and security of the 

Holders from time to time of all of the Outstanding Senior Obligations . . . .” Preston 

Hollow, although not a signatory to the Master Indenture, was named the 

“Noteholder Representative” in this document, and it was granted certain rights.

The Master Indenture contained extensive provisions governing all aspects of 

the relationship between Senior Care as the obligor, BB&T as the Master Trustee, 

and Preston Hollow as the Noteholder Representative. For example, the Master 

Indenture required BB&T to establish several separate funds to be used for specific 

purposes and directed the priority in which BB&T was to transfer funds to each 

account. In several instances, Preston Hollow as the Noteholder Representative was 

granted authority to direct BB&T to take certain actions. For example, if Preston 

Hollow determined that the balance of the Insurance and Tax Escrow Fund was not 

sufficient to pay Senior Care’s tax obligations, Senior Care could be ordered to 

deposit additional amounts into that fund.

Senior Care’s obligations under the Master Indenture mirrored the obligations 

imposed upon it in the other key documents. Senior Care agreed to “duly and 

punctually pay the principal of (and premium, if any) and interest on the 
10

Obligations.” It further agreed to pay or discharge all taxes before delinquency, as 

well as “all lawful claims for labor, materials, and supplies which, if unpaid, might 

by law become a lien upon its Property.” Senior Care also agreed that it “will not 

create or permit to be created or remain and, at its cost and expense, [will] promptly 

discharge or terminate all Liens on its Property.” Senior Care agreed that, during the 

construction process, it would not accept any change orders without Preston 

Hollow’s written consent, nor would it amend the terms of any construction 

documents without Preston Hollow’s prior written consent.

“Events of Default” under the Master Indenture included: (1) “default in the 

payment of any Senior Obligation when it becomes due and payable”; (2) failure to 

make any required deposits under the Master Indenture; (3) failure to pay any debt 

owed by Senior Care; (4) failure to cause gross revenues to be deposited into the 

Blocked Account; and (5) failure to perform any covenant in the Master Indenture. 

Upon an Event of Default, BB&T had the authority to accelerate the debt and declare 

the principal of the Obligations due immediately. The Master Indenture also granted 

Preston Hollow the ability to exercise remedies upon default “in lieu of the Master 

Trustee.” The Master Indenture, like the Bond Indenture, contained provisions 

allowing for the resignation of BB&T as Master Trustee and the appointment of a 

successor Master Trustee.
11

Senior Care also entered into a “Construction Disbursement and Monitoring 

Agreement” (“the CDMA”) with BB&T, Preston Hollow as the Series 2017A 

Majority Representative, and Fulcrum, LLC, an entity that served as a “Construction 

Monitor” during the building of the assisted living facility. Among other things, the 

CDMA set out the process for Senior Care to make disbursement requests for the 

payment of loan proceeds during construction. Preston Hollow played an active role 

in this process, approving requests for disbursement and ordering BB&T to make 

payments from specific accounts required under the Master Indenture and Bond 

Indenture. The CDMA, like the Master Indenture, required Senior Care to submit 

change orders over a certain amount to Preston Hollow for approval. Although the 

CDMA could be amended, an amendment would only be effective if made by “a 

written instrument signed by the parties.”

Finally, Bouldin executed a Guaranty Agreement (“the Guaranty”).4 Bouldin 

“guarantee[d] to the Master Trustee (for the benefit of the Holders) (collectively, the 

“Guaranteed Parties”), the full, complete and prompt payment of the principal and 

redemption price, if any, of and interest on the Series 2017 Notes when due, whether 

4 Bouldin also signed a “Completion Guaranty” in which he “guarantee[d] to the 

Master Trustee (for the benefit of the Holders and the holders of the Series 2017 

Bonds) the full, prompt and complete performance by [Senior Care] of all [Senior 

Care’s] obligations with respect to the design, permitting, installation, construction 

and completion of the Improvements, subject to the terms and conditions of the 

Loan Documents.” The Completion Guaranty is not at issue in this appeal.
12

at stated maturity . . . acceleration or otherwise” upon the occurrence of certain 

specified events. These events included: (1) the filing of a mechanic’s or 

materialmen’s lien against the property; (2) Senior Care’s failure to pay any portion 

of its Gross Revenues to the Master Trustee as required by the Master Indenture; and 

(3) an action by Senior Care or Bouldin to contest, delay, interfere with, or fail to 

cooperate with “the Master Trustee’s exercise of remedies provided under the Bond 

Documents or any guaranty after the occurrence of an Event of Default.”

Bouldin also agreed to be liable to “the Guaranteed Parties in all instances for 

any loss, damage, cost, expense, liability or claim incurred by Guaranteed Parties” 

arising out of certain other events. These events included Senior Care’s failure to 

pay “other charges required to be paid by [Senior Care] under the Bond Documents” 

and “charges for labor or materials or other charges that can create liens on the 

Property.” The Guaranty provided that “any Guaranteed Party,” following an Event 

of Default, could proceed directly against Bouldin prior to making a demand upon 

Senior Care. The Guaranty is the only document in connection with this transaction 

that Bouldin signed in his individual capacity, and not in his capacity as the president 

of the entity that manages Senior Care.

B. Senior Care’s Alleged Default on the Promissory Notes

Senior Care contracted with an Iowa-based company, Baxter Construction 

Company (“Baxter”), to build the assisted living facility. Bouldin had worked with 
13

Baxter prior to the project that is the subject of this appeal. The “Guaranteed 

Maximum Price” to which Baxter was entitled for construction costs was 

$22,240,000. Baxter also served as the general contractor for another construction 

project that occurred at roughly the same time as this project: the construction of an 

Inspired Living assisted living facility in Lewisville, Texas, near Dallas. The owner 

of that property and facility was Senior Care Living VII, LLC. 

Construction on the Sugar Land facility proceeded throughout 2017 without 

any major issues. With construction substantially complete, Senior Care obtained a 

Certificate of Occupancy around December 2017. However, in 2018, a dispute arose 

with Baxter over whether Baxter was entitled to more than $1 million in additional 

funds based on change orders. Senior Care did not believe that these requests were 

valid. Nevertheless, to settle the dispute, Senior Care, Bouldin, and Baxter entered 

into a “Side Letter Agreement Regarding Payments to Baxter Construction 

Company” (“the Side Letter Agreement”) in August 2018.5

In the Side Letter Agreement, Baxter agreed that it was still bound by 

provisions in the CDMA that required it to obtain unconditional lien waivers from 

each of its subcontractors prior to final payment. Senior Care agreed that, upon 

receipt of these documents, it would “promptly seek payment to Baxter for all 

5 This agreement also addressed a payment dispute that had arisen between Baxter 

and Senior Care Living VII, the entity that owned the assisted living facility being 

built in Lewisville, Texas.
14

amounts due Baxter pursuant to the Baxter Payment Documents” by delivering the 

documents to Preston Hollow, which had the right to approve disbursement requests 

under the CDMA. Baxter acknowledged that “the timing of payments” was 

“partially dependent upon parties to the CDMA which are not under the control of 

any party hereto.”

Senior Care and Baxter also agreed that, upon sale of the assisted living 

facility, Senior Care would pay Baxter up to a maximum amount of $472,500. Senior 

Care further agreed that, until that payment had been made, “any dividends or 

distributions payable to Bouldin are secured by and must be forwarded . . . to 

Baxter.” Bouldin agreed that “an amount equal to any dividends or distributions that 

Bouldin directly or indirectly receives” is “deemed to be held in trust by Bouldin for 

the benefit of Baxter and must be forwarded by Bouldin to Baxter.” Baxter agreed 

that these specified payments “shall be deemed secured obligations and when timely 

paid in the manner provided herein shall be in full satisfaction for all outstanding 

amounts owed to Baxter for its work.” Baxter further acknowledged that its rights to 

payment were subordinate to the rights of the Master Trustee and the bondholders.

Preston Hollow was aware that Senior Care and Baxter had an ongoing dispute 

concerning payment, but it did not see the Side Letter Agreement until several 

months after that agreement had been signed. In December 2018, Baxter submitted 

its final payment request of $1,762,308.80 to Senior Care. It is undisputed that 
15

Baxter had not obtained all lien waivers from its subcontractors. Despite this, Senior 

Care submitted Baxter’s payment request to Preston Hollow. Preston Hollow 

requested that Senior Care provide it with additional information, including the Side 

Letter Agreement, and it also communicated directly with Baxter concerning the 

payment dispute. Ultimately, Preston Hollow did not approve the disbursement 

request to Baxter, and Baxter filed a lien against the property in March 2019.6

At the same time that Senior Care sought disbursement of $1.7 million to pay 

Baxter, it also sought disbursement of approximately $574,000 to pay its property 

taxes that were due on January 31, 2019. A Preston Hollow employee replied that 

“there is not a line item in the project budget for [real estate taxes] and funding for 

this line item via project fund appears to run contrary to the Master Trust Indenture.” 

This employee stated, “[I]t appears that real estate taxes are to be funded by [Senior 

6 Senior Care has consistently taken the position that Baxter’s lien is untimely 

because Baxter finished construction in January 2018 but did not file a lien affidavit 

until March 2019. Senior Care also filed a separate lawsuit against Baxter seeking 

a declaratory judgment that the lien was void and asserting that the lien was an 

unlawful cloud on Senior Care’s title. Baxter moved to dismiss Senior Care’s suit 

under the Texas Citizen’s Participation Act. After the trial court denied the motion 

to dismiss, Baxter filed an interlocutory appeal. Shortly before trial in the underlying 

proceeding, this Court issued an opinion affirming the trial court’s denial of the 

motion to dismiss. See Baxter Constr. Co. v. Senior Care Living VI, LLC, No. 01-

19-00728-CV, 2021 WL 1916476, at *3–4 (Tex. App.—Houston [1st Dist.] May 

13, 2021, no pet.) (mem. op.).
16

Care].” Preston Hollow did not agree to disburse funds to pay the property taxes, 

and those taxes became delinquent.7

On March 25, 2019, at the direction of Preston Hollow, BB&T sent a “Notice 

of Covenant Breaches and Events of Default and Demand Letter” to Bouldin and 

Senior Care. This letter stated that Baxter alleged that it was owed over $2.2 million 

for work performed on the project; Baxter had recorded a lien affidavit and claim in 

the amount of $1,762,308.80 with the Fort Bend County Clerk; and Senior Care 

owed approximately $614,000 in assessed and unpaid taxes to three Fort Bend 

County taxing authorities. The letter informed Senior Care that its failure to pay 

Baxter’s claim within 30 days of the notice would constitute an “Event of Default” 

under the bond documents. BB&T demanded that Senior Care pay $852,777.11—

representing the difference between the amount of Baxter’s claim and the amount of 

funds currently on deposit in the Project Fund—within 30 days. BB&T also made a 

demand upon Bouldin that he fully pay Baxter’s claim pursuant to the Completion 

Guaranty that he signed. BB&T also stated that Senior Care’s failure to extinguish 

Baxter’s lien within 30 days and pay the unpaid taxes within 30 days would also 

constitute “Events of Default.”

7 Ultimately, Preston Hollow approved payment of the property taxes in June 2019

after BB&T had declared Senior Care in default on the Notes and accelerated the 

balance of the loan.
17

On April 8, 2019, BB&T sent Senior Care and Bouldin a “Supplemental 

Notice of Breaches and Events of Default and Notice of Intent to Accelerate.” In this 

letter, BB&T referenced its March 25 letter and stated that if Senior Care failed to 

timely cure the conditions set out in the previous letter, BB&T or Preston Hollow 

“shall declare an Event of Default under each of the related Bond Documents and 

accelerate (subject to further election and notice to you) and declare immediately 

due and payable all amounts due and owing pursuant to” the various bond 

documents.

On May 31, 2019, BB&T sent a “Notice of Events of Default under the Bond 

Documents and Acceleration of Maturity of Notes and Bonds.”8 BB&T stated that 

Senior Care had failed to cure the conditions set out in the two previous letters. 

Therefore, BB&T, at Preston Hollow’s direction, declared that an “Event of Default” 

had occurred under the Bond Indenture, the Master Indenture, and the Loan 

Agreement. BB&T declared that the Notes and the bonds were accelerated and that 

the entire principal of the Notes and the unpaid principal and interest on the bonds 

were immediately due and payable in full. On June 3, 2019, Bouldin acknowledged 

in an email to Gregory Yanok, a vice president at BB&T and Bouldin’s main point 

8 The day after this notice, on June 1, 2019, an interest payment was due on the Notes. 

BB&T applied proceeds from a reserve account to this payment, and therefore 

Senior Care was able to meet this obligation. Senior Care has not, however, made 

any further interest payments.
18

of contact, that Senior Care had received a copy of the acceleration notice. Bouldin 

requested a payoff statement for the total outstanding amount owed. It is undisputed 

that neither BB&T nor Preston Hollow provided a payoff statement to Senior Care.

In early July 2019, Yanok notified Bouldin via email that BB&T intended to 

resign as the Master Trustee and Bond Trustee and that TMI “will succeed us as 

Trustee.” Bouldin acknowledged BB&T’s resignation and stated that he would “take 

a look at TMI . . . since [Senior Care] picks the Trustee and Successor Trustee” and 

would “let [Yanok] know shortly who we’d like to go with.” In a later email, Bouldin 

indicated that Senior Care’s management company was “looking into” who it 

wanted as a successor trustee. Bouldin stated that he did not “think the appointment 

of the successor is necessary before you resign.” Yanok responded, “We need to 

appoint a successor for the sake of resignation. I [believe] you can appoint anyone 

thereafter[.]”

On July 12, 2019, BB&T appointed TMI and UMB Bank as co-trustees under 

the Master Indenture and the Bond Indenture. This notice stated that UMB Bank and 

TMI “have agreed to assume the role of co-Trustee for each of these trusts,” and 

stated that if BB&T resigns, “the co-Trustees shall succeed to all roles and 

responsibilities of the predecessor Trustee.”

On July 17, 2019, BB&T sent Senior Care a written “Notice of Trustee 

Resignation.” This notice informed Senior Care that BB&T was resigning as Master 
19

Trustee and Bond Trustee. BB&T also “recognize[d] the authority of the dulyappointed co-Trustee(s), TMI Trust Company (‘TMI’) and UMB Financial 

Corporation (‘UMB’)” to serve as successor Master Trustees and Bond Trustees. 

Preston Hollow, as the Noteholder Representative and Series 2017A Majority 

Representative, sent a notice to all parties on October 10, 2019, “further 

memorializ[ing]” BB&T’s resignation as Master Trustee and Bond Trustee and the 

appointment of UMB Bank and TMI as co-successor Master Trustee and Bond 

Trustee.

Preston Hollow and UMB Bank sent notices of additional “Events of Default” 

by Senior Care in October 2019, after the debt had already been accelerated and 

Senior Care had filed suit. These alleged defaults included Senior Care’s failure to 

deposit Gross Revenues into the Blocked Account; the transfer of over $300,000 

from Senior Care to Senior Care Living VII, the owner of the Lewisville assisted 

living facility; and Senior Care’s failure to replenish the debt service reserve fund 

after money in that fund was used to make Senior Care’s June 1, 2019 interest 

payment on the Notes. Preston Hollow and UMB Bank did not learn about these 

alleged defaults until after the original default notices were sent in March, April, and 

May 2019.
20

C. Procedural Background

In August 2019, UMB Bank posted the property for a foreclosure sale in early 

September. Senior Care then filed the underlying proceeding against UMB Bank and 

TMI.9Initially, neither Bouldin nor Preston Hollow were parties to this proceeding.10

Senior Care sought injunctive relief to halt the pending foreclosure sale and to 

prohibit UMB Bank and TMI from taking any action under the bond documents. 

Senior Care also sought a declaratory judgment that (1) the appointment of UMB 

Bank and TMI as Bond Trustees “is void and of no effect”; (2) Senior Care was 

entitled to select a successor Bond Trustee under the provisions of the Master 

Indenture; and (3) Senior Care was not in default under the Loan Agreement or 

Master Indenture.

UMB Bank, in its capacities as co-successor Master Trustee and co-successor 

Bond Trustee, asserted a counterclaim for breach of contract, alleging that Senior 

9 Senior Care also sued Wade Williams, the substitute trustee under the deed of trust 

securing the property. Senior Care subsequently nonsuited its claims against 

Williams. No judgment was rendered against Williams, and he is not a party to this 

appeal.

10 Prior to Senior Care’s lawsuit, Preston Hollow filed suit against Bouldin in federal 

district court. Bouldin argued that Senior Care was a necessary party and suit could 

not proceed against him alone. After Preston Hollow added Senior Care as a 

defendant, the federal district court dismissed the case due to lack of diversity of 

citizenship.
21

Care had failed to comply with its obligations under the “Bond Documents.”11 As 

damages, UMB Bank sought recovery of the outstanding amount of principal on the 

bonds—$44,675,000—as well as interest, fees, and costs. UMB Bank also sought a 

declaration that it and TMI had been appropriately appointed co-successor Bond 

Trustees under the Bond Indenture and co-successor Master Trustees under the 

Master Indenture. Additionally, UMB Bank sought appointment of a receiver for 

Senior Care.

Preston Hollow filed a petition in intervention and adopted UMB Bank’s 

counterclaims. Preston Hollow also filed a separate suit against Bouldin on the 

Guaranty, and it requested that the trial court consolidate the two cases. The trial 

court consolidated the cases, and Bouldin became a party to the underlying 

proceeding. After Preston Hollow became a party and asserted claims, UMB Bank 

and TMI “conditionally asserted” the same claims against Senior Care and Bouldin 

that Preston Hollow asserted. These claims included a claim against Senior Care for 

breach of contract and a claim against Bouldin under the Guaranty.

After the trial court granted Preston Hollow’s motion to consolidate, Senior 

Care filed an amended petition. In this amended petition, Senior Care alleged that 

11 The trial court’s Findings of Fact and Conclusions of Law defined “Bond 

Documents” as the Bond Indenture, the Master Indenture, the Loan Agreement, the 

Deed of Trust, the Guaranty Agreement, the Completion Guaranty, and “all other 

documents executed in connection with the bonds.”
22

Preston Hollow had tortiously interfered with the Side Letter Agreement and the 

bond documents by, among other things, wrongfully declaring default and 

wrongfully refusing to authorize requested disbursements. Senior Care alleged that 

UMB Bank and TMI had tortiously interfered with the bond documents by acting as 

Master Trustees without authority to do so. It alleged that if Preston Hollow was a 

party to the bond documents, Preston Hollow breached the documents by improperly 

declaring a default and accelerating the debt. Senior Care also alleged that Preston

Hollow, UMB Bank, and TMI had converted its property by wrongfully exercising 

control over money held by BB&T. In connection with the conversion claim, Senior 

Care also asserted a claim for money had and received. Senior Care continued to 

seek declaratory relief.

During the pendency of the proceedings, UMB Bank and TMI moved for the 

appointment of a receiver. In July 2020, the trial court entered a consent order, noting 

that UMB Bank, TMI, Preston Hollow, and Senior Care had all consented to the 

appointment of Michael Morgan of Healthcare Management Partners, LLC, as the 

receiver of Senior Care’s property. Morgan, as the receiver, was given complete 

control over the property, as well as the right to operate the assisted living facility.

The parties also filed cross-motions for partial summary judgment. Senior 

Care, in its motions, sought summary judgment that UMB Bank and TMI had not 

properly been appointed as co-successor Master Trustees under the terms of the 
23

Master Indenture, which contemplated that Senior Care, as the Obligor, should have 

the first choice for appointing a successor Master Trustee upon BB&T’s resignation. 

As a result, UMB Bank and TMI had no capacity or standing to bring any affirmative 

claims against Senior Care and their claims should therefore be dismissed. With 

respect to Preston Hollow, Senior Care argued in a separate summary judgment 

motion that Preston Hollow lacked capacity to assert any claims against Senior Care 

because the Master Indenture provided limited authority for Preston Hollow, as the 

Noteholder Representative, to seek remedies in lieu of the Master Trustee, and it 

could only do so if it had provided notice to the Master Trustee.

Bouldin moved for summary judgment against Preston Hollow, UMB Bank, 

and TMI on their claims that he was liable to them under the Guaranty. Specifically, 

Bouldin argued that the only parties to the Guaranty were Bouldin himself and 

BB&T as Master Trustee; Preston Hollow was not a party to the Guaranty, and 

therefore it could not sue him to enforce the Guaranty. He further argued that, to the 

extent Preston Hollow relied on provisions in the Master Indenture that allowed it, 

as the Noteholder Representative, to pursue certain remedies, Preston Hollow could 

not pursue such remedies against Bouldin, who was not a party to the Master 

Indenture. Bouldin also argued that even if Preston Hollow could enforce the 

Guaranty, none of the events that would trigger Bouldin’s liability under the 

Guaranty had occurred.
24

In response to Senior Care’s summary judgment motion, UMB Bank, and 

TMI argued that the language of the Master Indenture allowed both the Master 

Trustee and the Noteholder Representative to “undertake remedial action in 

conjunction with one another.” UMB Bank and TMI also sought partial summary 

judgment, arguing that they had been properly appointed as co-successor trustees 

under the relevant bond documents, and therefore they had capacity to pursue claims 

against Senior Care.

The trial court signed an order granting UMB Bank and TMI’s summary 

judgment motion. The court granted declaratory judgment and ruled that UMB Bank 

and TMI had been properly appointed as co-successor Master Trustees and cosuccessor Bond Trustees. The court denied Senior Care’s and Bouldin’s summary 

judgment motions.

Preston Hollow, UMB Bank, and TMI also filed motions for a pretrial 

determination of a legal matter under Rule of Civil Procedure 166(g) on several of 

Senior Care’s claims. Relevant to this appeal, the defendants argued that the trial 

court could rule as a matter of law that Senior Care’s claims for conversion and 

money had and received should be dismissed because (1) UMB Bank and TMI were 

properly appointed as co-successor Bond Trustees under the Bond Indenture and 

therefore could exercise control over funds held by the trustee; (2) the Bond 

Indenture provided that the funds were held in trust for the benefit of the 
25

bondholders, and therefore the funds did not belong to Senior Care; (3) Preston 

Hollow was expressly entitled to approve or disapprove of disbursement requests for 

funds held by the trustee; and (4) the claims were barred by the economic loss rule. 

The trial court granted this motion and dismissed Senior Care’s claims for 

conversion and money had and received before trial.

Over the course of a week, the trial court heard testimony on the parties’ 

claims in a bench trial. The parties also agreed to submit documentary evidence 

concerning their attorney’s fees, and the trial court reviewed this evidence as well. 

The court signed a final judgment on August 4, 2021. This judgment incorporated 

the court’s pretrial summary judgment ruling granting a declaratory judgment that 

UMB Bank and TMI were duly appointed as co-successor Bond Trustees under the 

Bond Indenture and co-successor Master Trustees under the Master Indenture. The 

court also incorporated its Rule 166(g) ruling dismissing Senior Care’s claims for 

conversion and money had and received.

The court ordered that Senior Care take nothing on its affirmative claims. It 

further ordered that Preston Hollow, in its capacities as the Noteholder 

Representative under the Master Indenture and the Series 2017A Majority 

Representative under the Bond Indenture, be granted judgment against Senior Care 

on Preston Hollow’s breach of contract claim and against Bouldin under the 

Guaranty. The court awarded Preston Hollow $52,597,040.06 in damages against 
26

Senior Care and Bouldin, jointly and severally, with this amount consisting of 

$44,675,000 in outstanding principal, $7,407,359.79 in pre-judgment interest 

through the start date of the trial, and $514,680.27 in pre-judgment interest from the 

second day of trial through the date of judgment.

The court further awarded Preston Hollow, UMB Bank, and TMI $250,000 in 

unpaid attorney’s fees and litigation expenses, plus a total of $520,000 in conditional 

appellate attorney’s fees. The court also re-appointed Michael Morgan as the postjudgment receiver and issued a separate order setting out his rights and duties. The 

court denied “all other claims and causes of action.” The trial court also issued 

extensive findings of fact and conclusions of law in support of its judgment.12

Senior Care and Bouldin moved for a new trial. These motions were overruled 

by operation of law, and both Senior Care and Bouldin filed notices of appeal.

Appointment of Successor Trustees

In its first issue, Senior Care argues that the trial court erred by granting UMB 

Bank and TMI’s summary judgment motion and ruling that UMB Bank and TMI 

were properly appointed as co-successor Master Trustees under the Master 

Indenture. Senior Care also argues that the trial court erroneously denied Senior 

Care’s summary judgment motion on this issue.

12 Although Senior Care and Bouldin requested that the trial court enter additional and 

amended findings of fact and conclusions of law, the trial court did not do so.
27

A. Standard of Review

We review a trial court’s summary judgment ruling de novo. Hlavinka v. HSC 

Pipeline P’ship, LLC, 650 S.W.3d 483, 491 (Tex. 2022). When parties file cross 

motions for summary judgment, each party bears the burden of establishing that it is 

entitled to judgment as a matter of law. City of Richardson v. Oncor Elec. Delivery 

Co., 539 S.W.3d 252, 259 (Tex. 2018); TEX. R. CIV. P. 166a(c). When the trial court 

grants one motion and denies the other, we must determine all questions presented 

and render the judgment the trial court should have rendered. City of Richardson, 

539 S.W.3d at 259.

Construction of a contract is also a question of law that we review de novo. 

Sundown Energy LP v. HJSA No. 3, Ltd. P’ship, 622 S.W.3d 884, 888 (Tex. 2021) 

(per curiam). When construing a contract, our primary concern is to give effect to 

the “written expression of the parties’ intent.” Id. (quotations omitted). We must 

construe words in the context in which they are used, but we cannot interpret a 

contract to ignore clearly defined terms. Id. (quotations omitted); URI, Inc. v. 

Kleberg Cnty., 543 S.W.3d 755, 764 (Tex. 2018) (stating that we interpret contract 

language according to its plain, ordinary, and generally accepted meaning unless 

instrument directs otherwise). We must also avoid construing contracts in a way that 

renders the contractual language meaningless. Sundown Energy, 622 S.W.3d at 888.
28

B. Whether UMB Bank and TMI Were Properly Appointed as Co-Successor 

Master Trustees

Both the Master Indenture and the Bond Indenture contain provisions 

governing the resignation of the initial Master Trustee and Bond Trustee and the 

appointment of successor trustees.

Section 8.09 of the Master Indenture provides:

(a) No resignation or removal of the Master Trustee and no 

appointment of a successor Master Trustee pursuant to this Article shall 

become effective until the acceptance of appointment by the successor 

Master Trustee under Section 8.10.

(b) The Master Trustee may resign at any time by giving written 

notice thereof to the Obligor. If an instrument of acceptance by a 

successor Master Trustee shall not have been delivered to the Master 

Trustee within 30 days after the giving of such notice of resignation, 

the resigning Master Trustee may petition any court of competent 

jurisdiction for the appointment of a successor Master Trustee.

(c) The Master Trustee may be removed at any time by Act of the 

Majority Holders or the Noteholder Representative delivered to the 

Master Trustee and to the Obligor.

Section 8.09(e) specifically governs appointment of a successor Master 

Trustee and provides:

If the Master Trustee shall resign, be removed or become incapable of 

acting, or if a vacancy shall occur in the office of Master Trustee for 

any cause, the Obligor, by an Obligor Request, shall promptly appoint 

a successor Master Trustee with the consent of the Noteholder 

Representative (which consent shall not be unreasonably withheld). If, 

within one year after such resignation, removal or incapability, or the 

occurrence of such vacancy, a successor Master Trustee shall be 

appointed by Act of the Noteholder Representative delivered to the 

Obligor and the retiring Master Trustee, the successor Master Trustee 

so appointed shall, forthwith upon its acceptance of such appointment, 
29

become the successor Master Trustee and supersede the successor 

Master Trustee appointed by the Obligor. If no successor Master 

Trustee shall have been so appointed by the Obligor or the Noteholder 

Representative and accepted appointment in the manner hereinafter 

provided, the Master Trustee or any Holder of Obligations who has 

been a bona fide Holder of an Obligation for at least 6 months may, on 

behalf of itself and all others similarly situated, petition any court of 

competent jurisdiction for the appointment of a successor Master 

Trustee.

Section 8.10 requires every successor Master Trustee to execute an instrument 

accepting the appointment and deliver the acceptance to the Obligor and the retiring 

Master Trustee. The resignation of the retiring Master Trustee then becomes 

effective, and the successor Master Trustee becomes “vested with all the rights, 

powers, trusts, and duties of the retiring Master Trustee.”

Section 8.13 addresses the appointment of co-trustees. Under this section, 

“[a]t any time or times . . . the Obligor and the Master Trustee shall have power to 

appoint, one or more Persons to act as co-trustee jointly with the Master Trustee of 

all or any part of the Trust Estate, with the power to file such proofs of claim and 

take such other actions pursuant to Article VII herein to make such claims and 

enforce such rights of action on behalf of the Holders . . . .” Section 8.13(b) directs 

that Senior Care, as Obligor, “shall join with the Master Trustee in the execution, 

delivery and performance of all instruments and agreements necessary or proper to 

appoint a co-trustee,” but if it does not “join in such appointment” within 15 days of 
30

being asked to do so, “the Master Trustee shall have power to make such 

appointment on its own.”

The Bond Indenture also contains provisions governing the resignation of the 

Bond Trustee and appointment of a successor. Section 906 allows the Bond Trustee 

to resign at any time by providing 30 days’ notice to the Issuer, Obligor, and “each 

Holder of Bonds then Outstanding.” The Bond Indenture provides as follows with 

respect to the appointment of a successor Bond Trustee:

(a) In case the Bond Trustee hereunder shall resign . . . a successor 

may be appointed by the Series 2017A Majority Representative or, if 

there is no Series 2017A Majority Representative, the Obligor, by an 

instrument or concurrent instruments in writing signed by such 

Holders; provided, however, that in case of such vacancy the Issuer by 

an instrument signed by the President may appoint a temporary Bond 

Trustee to fill such vacancy until a successor Bond Trustee shall be 

appointed by the Series 2017A Majority Representative, or, if there is 

no Series 2017A Majority Representative, the Obligor, in the manner 

provided above; and any such temporary Bond Trustee so appointed 

shall immediately and without further act be superseded by the Bond 

Trustee so appointed by the Series 2017A Majority Representative or, 

if there is no Series 2017A Majority Representative, the Obligor.

Section 916 of the Bond Indenture—like section 8.13 of the Master 

Indenture—gives the Issuer (Woodloch) and the Bond Trustee the power to appoint 

a co-trustee. The Issuer “shall join with the Bond Trustee” in executing all 

instruments necessary to appoint a co-trustee, but if the Issuer does not join in such 

appointment within 15 days, “the Bond Trustee shall have power to make such 

appointment on its own.” In the summary judgment proceedings, Senior Care argued 
31

only that UMB Bank’s and TMI’s appointments as Master Trustee under the Master 

Indenture were improper. It did not challenge UMB Bank’s and TMI’s appointments 

under the Bond Indenture.

The summary judgment evidence includes an email exchange between Yanok, 

on behalf of BB&T, and Bouldin that occurred in early July 2019. At that point, 

BB&T had already sent the notices declaring Senior Care in default and accelerating 

the debt. On July 5, 2019, Yanok informed Bouldin that BB&T intended to resign 

as trustee and “TMI Trust Company will succeed us as Trustee.” Yanok stated that 

“[f]or the immediate future, we will maintain the present Agency duties (Registrar 

and Paying Agent) until such time as we transition those functions to TMI.” On July 

8, 2019, Bouldin responded and stated: “I’ll take a look at TMI (I’m unfamiliar with 

them currently), since the Obligor picks the Trustee and Successor Trustee, I’ll let 

you know shortly who we’d like to go with.”

On July 9, 2019, after Yanok asked Bouldin if he could send certain 

information on Senior Care to TMI, Bouldin responded that Senior Care’s 

management company was “looking into whom they want as a successor trustee.” 

Bouldin then stated, “So it probably doesn’t make sense to get anyone else working 

on it until they decide. I don’t think the appointment of the successor is necessary 

before you resign though if you’re in a time crunch for some reason.” Yanok replied: 
32

“We need to appoint a successor for the sake of resignation. I [believe] you can 

appoint anyone thereafter[.]”

On July 12, 2019, three days after Yanok and Bouldin’s email exchange 

concluded, Yanok, on behalf of BB&T, sent Senior Care a “Notice of Co-Trustee 

Appointment.” This notice stated:

In accordance with the indentures (Indentures) for the referenced bond 

trusts, Branch Banking and Trust Company (“BB&T[”]), as Trustee 

(“Trustee”) has exercised its right to appoint co-Trustees for said trusts. 

[TMI Trust Company (“TMI”) and UMB Financial Corporation 

(“UMB”), collectively and severally] have agreed to assume the role of 

co-Trustee for each of these trusts, thereby also assuming all rights and 

responsibilities of the Trustee under the respective indentures and 

respective governing documents. Furthermore and in the event that the 

Trustee resigns or is removed, the co-Trustees shall succeed to all roles 

and responsibilities of the predecessor Trustee.

Five days later, on July 17, 2019, Yanok sent Senior Care a “Notice of Trustee 

Resignation.” In this document, BB&T gave notice of its intent to resign as “Trustee 

for said trusts, effective immediately and in no event longer than the 30 days after 

this notice as provided under the Indentures and governing documents.” BB&T also 

“recognizes the authority of the duly-appointed co-Trustee(s), TMI Trust Company 

(“TMI”) and UMB Financial Corporation (“UMB”), collectively and severally, to 

also serve also as successor Trustee(s) and upon resignation or removal of the 

Trustee to thereby assume to all rights and responsibilities of the Trustee under the 

Indentures and governing documents.”
33

On October 10, 2019, Preston Hollow sent a notice memorializing BB&T’s 

two prior notices. Preston Hollow stated that BB&T had resigned as Master Trustee 

and Bond Trustee. Pursuant to a July 8, 2019 “Co-Trustee Appointment Agreement,” 

TMI and UMB Bank had accepted the appointment as co-successor Master Trustees 

and Bond Trustees, and Preston Hollow as the Noteholder Representative and Series 

2017A Majority Representative consented. In a declaration included as an exhibit in 

the summary judgment proceedings, Bouldin declared that Senior Care’s “consent 

to the appointment of either UMB Bank or TMI Trust Company” was not obtained, 

and Senior Care “was not given any right to select or approve the appointment of 

any substitute trustee.”

The trial court granted summary judgment in favor of UMB Bank and TMI. 

In its order, the court declared that UMB Bank and TMI are “duly appointed and 

acting co-successor Bond Trustee[s] under the Bond Indenture” and are “duly 

appointed and acting co-successor Master Trustee[s] under the Master Indenture, 

made the subject of this lawsuit, respectively.” The court incorporated its ruling into 

the final judgment and again declared that UMB Bank and TMI were duly appointed 

and acting co-successor Bond Trustees and co-successor Master Trustees. In Finding 

of Fact Number 8, the court found that “[i]n July 2019, UMB Bank, N.A. (‘UMB’) 

and TMI Trust Company (‘TMI’) were properly appointed co-successor Master 
34

Trustees under the Master Indenture and co-successor Bond Trustees under the Bond 

Indenture, in place of BBT.”13

Senior Care argues that the Master Indenture contains plain language 

concerning the appointment of a successor Master Trustee, but the language was not 

followed here. Specifically, Section 8.09(e) of the Master Indenture contemplates 

that Senior Care has the first choice of appointing a successor Master Trustee upon 

BB&T’s resignation. Senior Care contends that because the Master Indenture was 

not followed, UMB Bank’s and TMI’s appointments as successor Master Trustees 

are void, and they may not maintain any cause of action against Senior Care.

UMB Bank and TMI, on the other hand, argue that BB&T permissibly 

appointed UMB Bank and TMI as co-trustees under Section 8.13 of the Master 

Indenture—an act which did not require Senior Care’s consent—and then resigned 

as Master Trustee, leaving UMB Bank and TMI as its successors.

We agree with UMB Bank and TMI that their appointment as co-trustees by 

BB&T under Section 8.13 was effective. The summary judgment evidence 

demonstrates that on July 12, 2019, BB&T sent a notice appointing UMB Bank and 

TMI as co-trustees under the Master Indenture and Bond Indenture. Section 8.13 of 

13 In Conclusion of Law Number 72, the trial court concluded that UMB Bank and 

TMI were appointed as co-successor Master Trustees and co-successor Bond 

Trustees under the relevant indentures “and, therefore, have capacity and standing 

to sue, as does the Representative [Preston Hollow] pursuant to section 7.20 of the 

Master Indenture.”
35

the Master Indenture explicitly vests the Master Trustee with “power to appoint” one 

or more persons to “act as co-trustee jointly with the Master Trustee.”

Senior Care argues that BB&T’s action of appointing UMB Bank and TMI as 

co-trustees was a “nullity” because BB&T did not have the authority to act 

unilaterally in making this appointment; instead, BB&T was required to obtain 

Senior Care’s consent. The plain language of the contract refutes this argument. 

Section 8.13 contemplates that the Obligor and the Master Trustee “shall join” in the 

execution of instruments necessary for such an appointment, but this section also 

gives the Master Trustee the power to make the appointment “on its own” if the 

Obligor does not join. The Master Indenture itself thus allowed BB&T, as Master 

Trustee, to appoint co-trustees, even if Senior Care did not consent to the 

appointment. We therefore conclude that the trial court properly granted UMB Bank 

and TMI’s motion for summary judgment on whether they had been properly 

appointed as co-trustees under the Master Indenture.

We overrule Senior Care’s first issue.

Preston Hollow’s Capacity to Bring Suit

In its second issue, Senior Care argues that Preston Hollow lacked capacity to 

sue Senior Care for breach of contract because Preston Hollow failed to satisfy the 

condition precedent of providing the required notice to the Master Trustee of its 
36

intent to exercise rights and remedies in lieu of the Master Trustee, as required by 

the Master Indenture.14

A. Preston Hollow’s Provision of Notice to Master Trustee

“A condition precedent is an event that must happen or be performed before 

a right can accrue to enforce an obligation.” Solar Applications Eng’g, Inc. v. T.A. 

Operating Co., 327 S.W.3d 104, 108 (Tex. 2010). If an express condition is not 

satisfied, then the party whose performance is conditioned is excused from any 

14 Both Bouldin and Senior Care argue—in their second and third issues, 

respectively—that Preston Hollow cannot recover on its breach of contract claim 

because the copy of the Master Indenture admitted at trial indicated that it had been 

amended, but Preston Hollow did not introduce an amended version of the Master 

Indenture into evidence, and therefore Preston Hollow “failed to prove up the 

operative text of the Master Indenture—which is the only document that could 

possibly allow [Preston Hollow] to sue.” We first note that Senior Care’s claims for 

affirmative relief included a claim that Preston Hollow “breached the bond 

documents.” At trial, Senior Care offered the original, unamended Master Indenture 

into evidence during direct examination of Bouldin, and the trial court admitted the 

exhibit. No party argued that this was an inoperable version of the Master Indenture 

or sought to introduce an amended Master Indenture into evidence.

Regardless, Bouldin and Senior Care did not carry their burden on this issue. 

“Parties have the power to modify their contracts.” Hathaway v. Gen. Mills, Inc., 

711 S.W.2d 227, 228 (Tex. 1986). Whether a contract has been modified depends 

on the parties’ intentions and is a question of fact. Id. at 228–29. A modification 

must satisfy the elements of a contract: there must be a meeting of the minds 

supported by consideration. Id. at 228. The party asserting the modification bears 

the burden of proving modification. Id. at 229; Ifiesimama v. Haile, 522 S.W.3d 

675, 685 (Tex. App.—Houston [1st Dist.] 2017, pet. denied). Senior Care did not 

attempt to establish in the trial court that the Master Indenture had been amended, 

and it obtained no fact findings on amendments modifying the Master Indenture. 

We conclude that Senior Care and Bouldin may not argue, for the first time on 

appeal, that the version of the Master Indenture that Senior Care introduced into 

evidence is not the operative version of the Master Indenture. We overrule this 

portion of Bouldin’s second issue and Senior Care’s third issue.
37

obligation to perform. Id.; see State Farm Lloyds v. Hanson, 500 S.W.3d 84, 96 

(Tex. App.—Houston [14th Dist.] 2016, pet. denied) (“A condition precedent may 

be either a condition to the formation of a contract or a condition to an obligation to 

perform an existing agreement.”).

To determine whether a condition precedent exists, we must ascertain the 

intention of the parties, which can only be done by looking at the entire contract. 

Solar Applications Eng’g, 327 S.W.3d at 109. To make performance specifically 

conditional, “a term such as ‘if,’ ‘provided that,’ ‘on condition that,’ or some similar 

phrase of conditional language must normally be included.” Id. (quoting Criswell v. 

European Crossroads Shopping Ctr., Ltd., 792 S.W.2d 945, 948 (Tex. 1990)). When 

no conditional language is used and another reasonable interpretation of the contract 

is possible, we construe the terms as a covenant to prevent a forfeiture. Id.

Under Rule of Civil Procedure 54, if the plaintiff pleads that all conditions 

precedent have been performed, the plaintiff is required to prove only the conditions 

precedent that the defendant has specifically denied. TEX.R.CIV. P. 54; Hanson, 500 

S.W.3d at 96. Here, in its live pleading, Preston Hollow alleged that “[a]ll conditions 

precedent to the causes of action and requests for relief asserted in this pleading have 

occurred, been performed or waived.” Senior Care, in its amended answer, asserted 

that Preston Hollow’s claims were barred by failure of condition precedent because 

Preston Hollow failed to show that it provided written notice to the Master Trustee 
38

that it would exercise the rights in Section 7.20 of the Master Indenture in lieu of the 

Master Trustee.

Section 7.20 of the Master Indenture is entitled “Actions Taken by Noteholder 

Representative in Lieu of the Master Trustee” and it provides:

Notwithstanding anything in this Indenture to the contrary, if an Event 

of Default shall have occurred and be continuing, the Noteholder 

Representative, in its sole discretion as evidenced by written notice 

delivered to the Master Trustee, may (but shall not be required to), (i) in 

lieu of the Master Trustee, exercise such one or more of the rights and 

powers conferred on the Master Trustee by this Article VII or under any 

Supplement; and (ii) in lieu of the Master Trustee, exercise such rights 

and powers granted to Issuer under the Indenture, and such rights of the 

Holders under this Article VII, either by a suit or suits in equity or in 

law for the enforcement of any appropriate equitable or legal remedy 

the Noteholder Representative shall deem most expedient in the 

interests of the Holders.

(Emphasis added.)

Senior Care acknowledges that on August 29, 2019, Preston Hollow’s counsel 

emailed several people, including Lorna Gleason at UMB Bank, and notified them 

that counsel intended to file an amended complaint in the federal court action against 

Bouldin that added Senior Care as a defendant. The amended complaint was attached 

to the email. The email also noted that the amended filing “includes input from” 

UMB Bank and TMI’s counsel. At trial, Gleason agreed that UMB Bank had been 

informed in writing that Preston Hollow had elected to sue Senior Care before it 

filed suit against Senior Care.
39

Preston Hollow also provided a “Supplemental Notice Pursuant to Section 

7.20 of the MTI and Section 813 of the Trust Indenture” to UMB Bank and TMI on 

April 23, 2021, approximately two months before trial. In this letter, Preston Hollow 

“restat[ed its] election” to pursue claims against Senior Care and Bouldin. Preston 

Hollow attached to this letter a “Trustee Notice Pursuant to Section 7.20 of the MTI 

and Section 813 of the Trust Indenture” that it had provided to BB&T on May 31, 

2019. In that prior notice, Preston Hollow informed BB&T that it intended to pursue 

remedies in federal court against Bouldin under the Guaranty. In Finding of Fact 

Number 33, the trial court found that “Preston Hollow elected to pursue remedies 

against Senior Care and Bouldin and provided written notice of its election pursuant 

to Section 7.20 of the Master Indenture.”15

Preston Hollow argues that section 7.20 does not make its “written notice a 

prerequisite to proceeding in lieu of the Trustee”; instead, “[t]he provision merely 

notes that [Preston Hollow’s] election to proceed will be ‘evidenced’ by written 

notice.” We agree with Preston Hollow. Section 7.20 does not contain the hallmarks 

of a condition precedent, even when read in context with the rest of the contract. 

15 In Conclusion of Law Number 70, the trial court concluded that “[t]he notice 

contemplated under Section 7.20 is to the Trustee—not Senior Care—and it is for 

the Trustee’s benefit.” The court further concluded that Preston Hollow’s witnesses 

“testified that written notice was provided by Preston Hollow to the Trustee, 

including in the form of default notices, court pleadings and other documents. In 

any event, the Representative [Preston Hollow] provided written notice of Preston 

Hollow’s election under Section 7.20 of the Master Indenture.”
40

Section 7.20 contemplates that written notice will constitute contemporaneous or 

after-the-fact proof that an election has taken place. To make Preston Hollow’s 

capacity to sue specifically conditional on written notice, “a term such as ‘if,’ 

‘provided that,’ ‘on condition that,’ or some similar phrase of conditional language 

must normally be included.” See Solar Applications Eng’g, 327 S.W.3d at 109. 

Section 7.20 contains no such language.

Regardless, the Texas Supreme Court has held that “substantial compliance is 

the appropriate standard when evaluating whether a party complied with a 

contractual notice condition.” James Constr. Grp., LLC v. Westlake Chem. Corp., 

650 S.W.3d 392, 405 (Tex. 2022). However, “substantial compliance with a 

condition precedent requiring written notice may not be achieved without a writing 

in some form.” Id. In the Rule 11 context, courts have held that emails are sufficient 

to meet that rule’s “in writing” requirement. See, e.g., Shamrock Psychiatric Clinic, 

P.A. v. Tex. Dep’t of Health & Hum. Servs., 540 S.W.3d 553, 561 (Tex. 2018) (per 

curiam); Green v. Midland Mortg. Co., 342 S.W.3d 686, 691–92 (Tex. App.—

Houston [14th Dist.] 2011, no pet.). As such, even if section 7.20 were a condition 

precedent, that condition may be satisfied by substantial compliance. See James 

Constr. Grp., 650 S.W.3d at 405; see also Solar Applications Eng’g, 327 S.W.3d at 

108 (“A condition precedent is an event that must happen or be performed before a 

right can accrue to enforce an obligation.”). We conclude that the August 29, 2019 
41

email from Preston Hollow’s counsel complied with Section 7.20’s notice 

requirement.

B. Preston Hollow’s Ability to Sue on Behalf of Junior Bondholders

Senior Care also argues in its second issue that Preston Hollow, as the 

Noteholder Representative, can only exercise powers that the Master Trustee can 

exercise under Article VII of the Master Indenture, but even the Master Trustee lacks 

the authority to sue to recover sums due under the subordinated Series 2017B 

bonds.16

In the final judgment, the trial court rendered judgment for Preston Hollow 

for “the amounts due and owing pursuant to the Bonds and Notes made the subject 

of this case” in the amount of $52,597,040.06, which included “outstanding principal 

in the amount of $44,675,000.” In Finding of Fact Number 1, the trial court found 

that Senior Care was the obligor on four classes of bonds, including $9,750,000 in 

subordinate Series 2017B bonds, which the court collectively defined as “the 

Bonds.” In Finding Number 2, the court found that “[t]he aggregate unpaid principal 

amount due in respect of the Bonds is $44,675,000.” In Finding Number 9, the court 

found that “[p]ursuant to the Master Indenture and the Bond Indenture, the 

Representative [Preston Hollow] is granted the authority to exercise certain rights 

16 In his third issue, Bouldin similarly argues that Preston Hollow does not have 

authority to sue him under the Guaranty on behalf of the junior noteholders.
42

and remedies on behalf of the Trustee and the bondholders, including, without 

limitation, the prosecution of claims and causes of action against the Obligor.” The 

trial court did not make an express finding that Preston Hollow could exercise 

remedies and recover damages on behalf of the subordinate bondholders, but that 

finding is implicit.

Section 7.03(a) of the Master Indenture provides:

Notwithstanding any other provision to the contrary in this Master 

Indenture or otherwise, the right of the Subordinate Obligations 

[defined in the Master Indenture as including “the Subordinate Series 

2017B-1 Note”] to be secured by the lien and security interests created 

by this Master Indenture is subject in all respects to the prior payment 

of the Senior Obligations [defined in the Master Indenture as the Series 

2017A Notes], in each case as the same become due. . . . The Master 

Trustee shall not exercise any remedial action under this Master 

Indenture or otherwise on behalf of the Holders of any Subordinate

Obligations until such time as all amounts with respect to Senior 

Obligations have been paid in full.

The Bond Indenture contains a similar provision in section 812(a) of that document:

The Bond Trustee and the Holders of the Series 2017B Bonds hereby 

acknowledge and agree that the Series 2017B Bonds shall in all respects 

and at all times be subject to and subordinate to the Series 2017A 

Bonds, notwithstanding the occurrence of an Event of Default with 

respect to the Series 2017B Bonds, and the rights and remedies of the 

Holders of the Series 2017B Bonds shall be subject to the terms of this 

Article VIII. . . . [T]he Bond Trustee will not exercise any remedial 

action under this Bond Indenture or otherwise on behalf of such Holders 

of the Series 2017B Bonds until such time as all amounts with respect 

to Series 2017A Bonds have been paid in full.

Although the Master Indenture differentiates between “Senior” and 

“Subordinate” Obligations, it also defines “Obligation” as “any promissory note, 
43

guaranty, lease, contractual agreement to pay money or other obligation of the 

Obligor which is authenticated and delivered pursuant to this Indenture and which 

is entitled to the benefits of this Indenture.” (Emphasis added.) Section 7.02 of the 

Master Indenture allows the Master Trustee, upon the occurrence of an Event of 

Default, to “declare the principal of all the Obligations to be due and payable 

immediately.” (Emphasis added.) Likewise, under section 802 of the Bond 

Indenture, the Bond Trustee can “declare the entire unpaid principal of and interest 

on the Bonds or any series thereof due and payable.”

Additionally, section 7.07 of the Master Indenture provides:

Subject to Section 7.03, the Obligor covenants (subject to any notice 

and grace periods contained herein) that if (i) a default is made in the 

payment of any installment of interest on any Obligation when such 

interest becomes due and payable, or (ii) a default is made in the 

payment of the principal of (or premium, if any, on) any Obligation at 

the maturity or due date thereof, the Obligor will, upon demand of the 

Master Trustee, pay to it, for the benefit of the Holders of such 

Obligations, the whole amount then due and payable on such 

Obligations for principal, redemption premium, if any, and interest . . . .

Subject to Section 7.03, if the Obligor fail[s] to pay any of the foregoing 

amounts forthwith upon demand, the Master Trustee, in its own name 

and as trustee of an express trust, may (subject in all respects to the 

rights of the Noteholder Representative under Section 7.20) institute a 

judicial proceeding for the collection of the sums so due and unpaid, 

and may prosecute such proceeding to judgment or final decree, and 

may enforce the same against the Obligor or any other obligor upon the 

Obligations and collect the moneys adjudged or decreed to be payable 

in the manner provided by law out of the property of the Obligor or any 

other obligor upon the Obligations, wherever situated.
44

Reading these contractual provisions together, we conclude that section 7.03 

and section 812 ensure the priority of the senior Series 2017A Notes and Bonds. 

Thus, if this series of Notes and Bonds is still outstanding, the Master Trustee or 

Noteholder Representative cannot first take remedial actions on the subordinate 

Series 2017B Note and Bonds before the senior obligations are fully satisfied. If, 

however, an Event of Default occurs, the Master Trustee or Noteholder 

Representative can accelerate the principal of “all the Obligations,” including the 

subordinate obligations. Nothing in sections 7.03 and 812 provides that, when the 

entire debt has been accelerated, the Master Trustee or Noteholder Representative 

can pursue remedies only on behalf of the senior bondholders and cannot also pursue 

remedies on behalf of the subordinate bondholders in the same proceeding.

Construing these provisions in this way maintains the priority of the Series 

2017A Notes and Bonds while promoting judicial efficiency by not requiring the 

Master Trustee or Noteholder Representative to pursue two separate proceedings on 

behalf of the different classes of bondholders. We therefore conclude that the trial 

court properly determined that Preston Hollow could maintain suit on the Series 

2017B Note.

We overrule Senior Care’s second issue.
45

Enforcement of Guaranty Agreement

In his first issue, Bouldin argues that Preston Hollow lacks capacity to sue 

him because he made the Guaranty to BB&T as Master Trustee, not to Preston 

Hollow, and Preston Hollow therefore cannot establish that it owns the guaranty 

contract.

A guaranty agreement creates a secondary obligation in which the guarantor 

promises to be responsible for the debt of another and may be called upon to perform 

if the primary obligor does not fulfill its debt. Wasserberg v. Flooring Servs. of Tex., 

LLC, 376 S.W.3d 202, 205 (Tex. App.—Houston [14th Dist.] 2012, no pet.). To 

recover under a guaranty agreement, the party must show proof of: (1) the existence 

and ownership of the guaranty contract; (2) the terms of the underlying contract by 

the holder; (3) the occurrence of the conditions upon which liability is based; and 

(4) the guarantor’s failure or refusal to perform the promise. Chahadeh v. Jacinto 

Med. Grp., P.A., 519 S.W.3d 242, 246 (Tex. App.—Houston [1st Dist.] 2017, no 

pet.); Lee v. Martin Marietta Materials Sw., Ltd., 141 S.W.3d 719, 720 (Tex. App.—

San Antonio 2004, no pet.).

A guarantor may require that the terms of his guaranty be strictly followed 

and that the agreement not be extended beyond its precise terms by construction or 

implication. Wasserberg, 376 S.W.3d at 206; Lee, 141 S.W.3d at 721; see McKnight 

v. Va. Mirror Co., 463 S.W.2d 428, 430 (Tex. 1971); see also Chahadeh, 519 S.W.3d 
46

at 247 (“We strictly construe a guaranty in favor of the guarantor.”). We must 

examine the terms of the guaranty based on the language of the contract. 

Wasserberg, 376 S.W.3d at 206; Lee, 141 S.W.3d at 721; see also Moayedi v. 

Interstate 35/Chisam Rd., L.P., 438 S.W.3d 1, 7 (Tex. 2014) (“If the meaning of a 

guaranty agreement is uncertain, its terms should be given a construction which is 

most favorable to the guarantor.”) (quotations omitted). Our primary goal is to 

ascertain and give effect to the parties’ intent. Chahadeh, 519 S.W.3d at 247. The 

interpretation of a guaranty agreement is a question of law that we review de novo. 

Wasserberg, 376 S.W.3d at 206; Lee, 141 S.W.3d at 720.

In the final judgment, the trial court ordered that Preston Hollow, as the 

Noteholder Representative and the Series 2017A Majority Representative, “shall be 

granted judgment against Bouldin for ‘Guaranty Obligations’ (Count III), jointly and 

severally with Senior Care, for the amounts due and owing pursuant to the Bonds 

and Notes made the subject of this case.” In Finding of Fact Number 7, the court 

found that Bouldin executed the Guaranty “in favor of the Master Trustee.” In 

Finding Number 30, the court found that “Preston Hollow presented formal demands 

to Bouldin to pay Senior Care’s obligations as required by his Guaranties, but 

Bouldin has not done so.” In Finding Number 31, the court found that “[t]he multiple 

Bond Document defaults and Events of Default by Senior Care are recourse triggers 
47

under the Bouldin Guaranty, making Bouldin jointly and severally liable for all 

amounts owed to the Trustee on behalf of the bondholders.”17

The opening paragraph of the Guaranty provides that Bouldin, as Guarantor, 

made the Guaranty “to the Guaranteed Parties (as herein defined).” Section 3.01 of 

the Guaranty then states:

The Guarantor, as surety, absolutely, unconditionally, and irrevocably 

guarantees to the Master Trustee (for the benefit of the Holders) 

(collectively, the ‘Guaranteed Parties’), the full, complete and prompt 

payment of the principal and redemption price, if any, of and interest 

on the Series 2017 Notes when due, whether at stated maturity, by 

optional tender, upon redemption . . . , acceleration or otherwise, 

including any claim or other type of right arising from such principal 

amount such as any deficiency judgment upon foreclosure or claim in 

bankruptcy, and any other sums incurred by Guaranteed Parties in 

enforcing this Guaranty and repayment of the Series 2017 Notes 

(collectively, the ‘Guaranteed Obligations’), upon the occurrence of 

any one of more of the following events of circumstances[.]

(Emphasis added.)

Under Section 3.01, the term “Guaranteed Parties” is broader than simply the 

Master Trustee; instead, the term also includes “the Holders.” The Guaranty states 

that “the holders of the Series 2017 Notes are referred to herein collectively as the 

17 In Conclusions of Law Numbers 36 and 39, the court concluded that Bouldin 

“guaranteed Senior Care’s obligations pursuant to the Guaranty Agreement” and 

therefore Bouldin was “jointly and severally liable with Senior Care to the Trustee 

and Preston Hollow, individually and [as] Representative for the benefit of all 

bondholders, for all amounts Senior Care owes in respect of the Bonds, including 

principal, accrued interest, attorneys’ fees and costs and the fees and expenses of 

Preston Hollow and the Trustees.”
48

‘Holders.’” The Guaranty also provides that unless terms are defined in the Guaranty 

itself, the terms “shall have the meanings set forth in the Master Indenture.” Under 

the Master Indenture, a “Holder” is “the registered owner of any Obligation.” 

“Obligation” is defined in the Master Indenture as “any promissory note, guaranty, 

lease, contractual agreement to pay money or other obligation of the Obligor which 

is authenticated and delivered pursuant to this Indenture and which is entitled to the 

benefits of this Indenture. Obligations include Senior Obligations and Subordinate 

Obligations.”18

The Master Indenture gives the “Majority Holders” the right to appoint a 

representative—the Noteholder Representative—to take certain actions under the 

Master Indenture to protect the Majority Holders’ rights.19 “A Noteholder 

Representative may be a Holder.” The Master Indenture named Preston Hollow as 

the initial Noteholder Representative, and the parties do not dispute that Preston 

Hollow remained in this position during all periods relevant to this case.

18 The Master Indenture defines “Senior Obligations” as “the Series 2017A Notes and 

any other Obligation issued hereunder on a pari passu basis with the Series 2017A 

Notes.” “Subordinate Obligations” are defined as “any Obligation issued hereunder 

on a basis subordinate to the Senior Obligations, including but not limited to the 

Subordinate Series 2017B-1 Note.”

19 The Master Indenture defines “Majority Holders” as “the Holders of not less than a 

majority in aggregate principal amount of the Outstanding Senior Obligations.”
49

The Notes do not specifically name any of the purchasers of the bonds, but 

they do state that they were issued for the purpose of securing the payment of the 

principal and interest on the bonds. They also include the following provisions:

Copies of the Master Indenture are on file at the corporate trust office 

of the Master Trustee and reference is hereby made to the Master 

Indenture for the provisions, among others, with respect to the nature 

and extent of the rights of the holder of this Note, the terms and 

conditions on which, and the purposes for which, this Note is issued 

and the rights, duties and obligations of the Obligor and the Master 

Trustee under the Master Indenture, to all of which the holder hereof, 

by acceptance of this Note, assents.

. . . .

The holder of this Note shall have no right to enforce the provisions of 

the Master Indenture, or to institute any action to enforce the covenants 

therein, or to take any action with respect to any default under the 

Master Indenture, or to institute, appear in or defend any suit or other 

proceeding with respect thereto, except as provided in the Master 

Indenture.

This Note shall be registered on the register to be maintained by the 

Master Trustee and this Note shall be transferable only upon said 

register at said office by the registered owner or by his duly authorized 

attorney. . . .

The Obligor, the Master Trustee and any paying agent shall deem and 

treat the person in whose name this Note is registered as the absolute 

owner hereof for all purposes; and neither the Obligor, any paying 

agent, the Master Trustee nor any Obligation registrar shall be affected 

by any notice to the contrary.

In the Notes, Senior Care promised to pay certain sums to Woodloch. The 

Series 2017A-1 Note includes the following “Assignment to Bond Trustee” signed 

by Woodloch:
50

Pay to the order of BRANCH BANKING AND TRUST COMPANY, 

as Bond Trustee for the owners of the Series 2017A-1 Bonds 

hereinabove mentioned, without warranty and without recourse against 

the undersigned except warranty of good title, warranty that the Issuer 

has not assigned this Series 2017A-1 Note to a person or entity other 

than the Bond Trustee, and that the original principal amount thereof 

remains unpaid hereunder.

Each of the other Notes contains an identical assignment that references the specific 

series of bonds and the Note to which the assignment applies. The Loan Agreement 

also acknowledged that Senior Care “has executed and delivered to the Bond Trustee 

[BB&T], the Series 2017 Notes (as hereinafter defined) to further secure the 

payment of the Series 2017 Bonds.”

It is undisputed that Preston Hollow purchased bonds and is also both the 

Noteholder Representative and the Series 2017A Majority Representative. However, 

the record includes no documentary evidence or testimony that Preston Hollow was 

a registered owner of the Notes, such that it qualifies as a “Holder” under the Master 

Indenture. Although the Noteholder Representative “may” be a Holder, it is not 

required to be. Thus, Preston Hollow’s status as the Noteholder Representative, 

standing alone, does not constitute evidence that Preston Hollow was a registered 

owner of the Notes. In the absence of evidence that Preston Hollow was a Holder of 

the Notes, Preston Hollow does not qualify as one of the “Guaranteed Parties” 

entitled to enforce the Guaranty. See Chahadeh, 519 S.W.3d at 246 (stating that to 
51

recover under guaranty agreement, party must establish existence and ownership of 

guaranty contract).

Preston Hollow argues that even if it cannot sue Bouldin under the terms of 

the Guaranty itself, it has authority to do so as the Noteholder Representative under 

the Master Indenture and as the Series 2017A Majority Representative under the 

Bond Indenture. For support, Preston Hollow relies on sections 7.07 and 7.20 of the 

Master Indenture to argue that, as the Noteholder Representative, it has the authority 

to act in lieu of the Master Trustee to enforce certain obligations, including Bouldin’s 

obligations under the Guaranty. Section 7.07 provides, in relevant part:

Subject to Section 7.03, if the Obligor [Senior Care] fail[s] to pay any 

of the foregoing amounts forthwith upon demand, the Master Trustee, 

in its own name and as trustee of an express trust, may (subject in all 

respects to the rights of the Noteholder Representative under Section 

7.20) institute a judicial proceeding for the collection of the sums so 

due and unpaid, and may prosecute such proceeding to judgment or 

final decree, and may enforce the same against the Obligor or any other 

obligor upon the Obligations and collect the moneys adjudged or 

decreed to be payable in the manner provided by law out of the property 

of the Obligor or any other obligor upon the Obligations, wherever 

situated.

Section 7.20 allows the Noteholder Representative, if an Event of Default has 

occurred, to act in lieu of the Master Trustee by “exercis[ing] such one or more of 

the rights and powers conferred on the Master Trustee by this Article VII [of the 

Master Indenture] or under any Supplement” or by “exercis[ing] such rights and 
52

powers granted to Issuer under the Indenture, and such rights of the Holders under 

this Article VII . . . .”

Additionally, Preston Hollow points to similar provisions in the Bond 

Indenture. Section 803(a) of the Bond Indenture allows “the Bond Trustee (or in lieu 

thereof, pursuant to Section 813, the Series 2017A Majority Representative),” upon 

an Event of Default, to “protect and enforce its rights as the holder of the Series 

2017A Note and the rights of the Holders.” Section 813, like section 7.20 of the 

Master Indenture, allows the Series 2017A Majority Representative, in lieu of the 

Bond Trustee, to exercise “such one or more of the rights and powers conferred on 

the Bond Trustee by this Article VIII or Section 405 hereof” or “such rights and 

powers granted to Issuer under the Bond Indenture, and such rights of the Holders 

under this Article VIII . . . .” Section 405 allows the Bond Trustee to “enforce all of 

the rights of the Issuer . . . and all obligations of the Obligor under and pursuant to 

the Loan Agreement and the Notes for and on behalf of the Holders.”

We disagree that Preston Hollow’s status as Noteholder Representative and 

Series 2017A Majority Representative grant it authority to enforce the Guaranty 

against Bouldin. The text of the Guaranty itself says nothing about allowing either 

the Noteholder Representative or the Series 2017A Majority Representative to act 

for the Master Trustee in pursuing remedies under the Guaranty. Instead, the 

remedies provision of the Guaranty, section 4.05, states as follows:
53

Upon the occurrence of any Event of Default, the Master Trustee may, 

or at the direction of the Noteholder Representative pursuant to Section 

7.02 of the Master Indenture shall: (a) demand immediate payment in 

full of all Guaranteed Obligations; or (b) exercise such rights and 

remedies it may have under this Guaranty or any of the other Bond 

Documents; or (c) exercise with respect to any collateral any one or 

more of the rights and remedies provided a secured party under the 

UCC; or (d) exercise from time to time any other rights and remedies 

available to it at law, in equity or otherwise.20

This section references the Noteholder Representative,21 but it provides only that the 

Noteholder Representative may direct the Master Trustee to take action after an 

Event of Default. Contrary to the sections of the Master Indenture and the Bond 

Indenture allowing the Noteholder Representative and the Series 2017A Majority 

Representative to act “in lieu of” the Master Trustee or Bond Trustee, section 4.05 

of the Guaranty does not allow the Noteholder Representative to step into the shoes 

of the Master Trustee and act in lieu of it.

20 Section 7.02 of the Master Indenture allows the Master Trustee on its own 

initiative—or at the direction of the Noteholder Representative—to accelerate the 

payment of the principal of the Obligations upon an Event of Default.

21 In addition to section 4.05, the Noteholder Representative is mentioned four other 

times in the Guaranty. Section 3.01 sets out 12 situations in which Bouldin agreed 

to be liable for Senior Care’s obligations, including if any liens are filed against the 

property “unless such claims or liens have been filed due to a default by the 

Noteholder Representative in approving disbursements requests” or if Senior Care 

or Bouldin closes the project or allows a change in the operator of the facility 

without the Noteholder Representative’s prior consent. Section 3.06 grants the 

Noteholder Representative the ability to direct Bouldin “to secure the Guaranteed 

Obligations with certain collateral” if Bouldin becomes liable for payment under the 

Guaranty. Finally, section 4.07 provides that either the Master Trustee or the 

Noteholder Representative can waive “breach of any agreement contained in this 

Guaranty,” but that waiver is limited to “the particular breach so expressly waived.”
54

In drafting the Guaranty, Bouldin and BB&T expressly referred to the Master 

Indenture several times, including by providing that terms not defined in the 

Guaranty itself “shall have the meanings set forth in the Master Indenture” and by 

specifically referring to section 7.02 in the remedies provision of the Guaranty. No 

such references to sections 7.07 or 7.20—or to sections 803 or 813 of the Bond 

Indenture—exist in the Guaranty. Bouldin and BB&T could have drafted the 

Guaranty in such a way to mirror the Master Indenture and Bond Indenture and 

allow, upon an Event of Default, the Noteholder Representative or Series 2017A 

Majority Representative to pursue remedies on behalf of the Guaranteed Parties and 

enforce the Guaranty against Bouldin. However, they did not.

Longstanding Texas caselaw provides that “a guarantor may require that the 

terms of his guaranty be strictly followed” and that the guaranty “may not be 

extended beyond its precise terms by construction or implication.” Reece v. First 

State Bank of Denton, 566 S.W.2d 296, 297 (Tex. 1978); Fed. Deposit Ins. Corp. v. 

Attayi, 745 S.W.2d 939, 943 (Tex. App.—Houston [1st Dist.] 1988, no writ); 

Wasserberg, 376 S.W.3d at 206; see also Chahadeh, 519 S.W.3d at 247 (“We 

strictly construe a guaranty in favor of the guarantor.”). We therefore decline to look 

to the language of two contracts to which Bouldin is not a party in his individual 

capacity—the Master Indenture and the Bond Indenture—to provide that Preston 

Hollow as the Noteholder Representative and the Series 2017A Majority 
55

Representative can enforce the Guaranty against Bouldin when the language of the 

Guaranty itself does not grant the Noteholder Representative or the Series 2017A 

Majority Representative this power. See Reece, 566 S.W.2d at 297 (“We agree that

a guarantor may require that the terms of his guaranty be strictly followed and that 

he is not bound by a new or different contract.”).

We sustain Bouldin’s first issue.

Acceleration of the Debt

In Senior Care’s fourth issue and in Bouldin’s third issue, both appellants 

argue that the evidence presented at trial does not support the damages awarded by 

the trial court. Although Senior Care and Bouldin raise some distinct arguments in 

these issues, both argue that Preston Hollow did not prove that the debt was properly 

accelerated.

A. Standard of Review

In a bench trial, the trial court’s findings of fact have the same weight as a 

jury’s verdict, and on appeal, we review the sufficiency of the evidence supporting 

those findings by using the same standards for reviewing jury verdicts. Hall v. Lewis, 

639 S.W.3d 197, 204–05 (Tex. App.—Houston [1st Dist.] 2021, no pet.); see Tex. 

Outfitters Ltd., LLC v. Nicholson, 572 S.W.3d 647, 653 (Tex. 2019). When 

challenged, the court’s findings of fact are not conclusive if, as here, there is a 

complete reporter’s record on appeal. Hall, 639 S.W.3d at 205; Choice! Power, L.P. 
56

v. Feeley, 501 S.W.3d 199, 208 (Tex. App.—Houston [1st Dist.] 2016, no pet.) 

(citing BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002)). 

We defer to unchallenged findings of fact that are supported by some evidence. 

Tenaska Energy, Inc. v. Ponderosa Pine Energy, LLC, 437 S.W.3d 518, 523 (Tex. 

2014).

When reviewing the legal sufficiency of the evidence, we consider whether 

the evidence presented at trial would enable reasonable and fair-minded people to 

reach the verdict under review. Wood v. Wiggins, 650 S.W.3d 533, 544 (Tex. App.—

Houston [1st Dist.] 2021, pet. denied); see City of Keller v. Wilson, 168 S.W.3d 802, 

827 (Tex. 2005). We credit favorable evidence if a reasonable factfinder could and 

disregard contrary evidence unless a reasonable factfinder could not. Wood, 650 

S.W.3d at 544. We consider the evidence in the light most favorable to the 

challenged finding, indulging every reasonable inference that supports the finding. 

Hall, 639 S.W.3d at 205. We may not disregard evidence that allows only one 

inference. Puntarelli v. Peterson, 405 S.W.3d 131, 135 (Tex. App.—Houston [1st 

Dist.] 2013, no pet.). If the evidence falls within the zone of reasonable 

disagreement, we may not substitute our judgment for that of the factfinder. Wood, 

650 S.W.3d at 544. The factfinder is the sole judge of the credibility of the witnesses 

and the weight to give to their testimony. Hall, 639 S.W.3d at 205; Puntarelli, 405 

S.W.3d at 135.
57

When we review the factual sufficiency of the evidence, we consider all the 

evidence supporting and contradicting the challenged finding. Wood, 650 S.W.3d at 

544; Puntarelli, 405 S.W.3d at 135. We will set aside the finding only if it is so 

contrary to the overwhelming weight of the evidence as to be clearly wrong and 

unjust. Hall, 639 S.W.3d at 205; Puntarelli, 405 S.W.3d at 135.

We review a trial court’s conclusions of law de novo. BMC Software, 83 

S.W.3d at 794; Wood, 650 S.W.3d at 544. We will uphold conclusions of law if the 

judgment can be sustained on any legal theory supported by the evidence. Wood, 

650 S.W.3d at 544; Ferrara v. Nutt, 555 S.W.3d 227, 235–36 (Tex. App.—Houston 

[1st Dist.] 2018, no pet.). Incorrect conclusions of law do not require reversal if the 

controlling fact findings support the judgment under a correct legal theory. Ferrara, 

555 S.W.3d at 236; see Wood, 650 S.W.3d at 544 (stating that erroneous conclusion 

of law does not require reversal if trial court rendered proper judgment).

B. Preservation of Error

Preston Hollow argues that Senior Care and Bouldin cannot challenge Preston 

Hollow’s alleged failure to prove that the debt was properly accelerated because 

Preston Hollow, UMB Bank, and TMI pleaded that all conditions precedent to suit 

had been performed, but Senior Care and Bouldin did not specifically challenge the 

failure to provide notice of intent to accelerate. See TEX. R. CIV. P. 54; Hanson, 500 

S.W.3d at 96 (stating that if plaintiff pleads that all conditions precedent have been 
58

performed, plaintiff is required to prove only conditions precedent that defendant 

specifically denied).

Senior Care and Bouldin, however, both argue that they may permissibly raise 

this issue because the trial court made express fact findings on whether the debt had 

been properly accelerated, and parties may challenge the sufficiency of the evidence 

supporting fact findings made after a bench trial for the first time on appeal.

The trial court admitted evidence of the notices of default, of intent to 

accelerate the debt, and of acceleration. In Finding of Fact Number 18, the trial court 

found: “Preston Hollow did not breach the Bond Documents. Senior Care defaulted 

on its obligations under the Bond Documents. The Trustee gave a notice of the 

defaults. The defaults were not timely cured. Senior Care’s indebtedness under the 

Bond Documents was properly accelerated on May 31, 2019.” Additionally, in 

Finding Number 29, the court found that “[o]n May 31, 2019, BBT the predecessor 

Trustee, properly accelerated all amounts due and owing with respect to the Bonds 

and provided Senior Care and Bouldin with notice of such acceleration.”

Following a bench trial, a party may make “a complaint regarding the legal or 

factual insufficiency of the evidence—including a complaint that the damages found 

by the court are excessive or inadequate” for the first time on appeal. TEX. R. APP.

P. 33.1(d); see Savoy v. Nat’l Collegiate Student Loan Tr. 2005-3, 557 S.W.3d 825, 

839 (Tex. App.—Houston [1st Dist.] 2018, no pet.) (concluding, when record 
59

contained no evidence that creditor provided debtors with either notice of intent to 

accelerate debt or notice of acceleration, that evidence was legally and factually 

insufficient to support full amount of damages awarded). Because evidence of 

acceleration was admitted at the bench trial and the trial court made express fact 

findings that the debt was properly accelerated, we conclude that Senior Care and 

Bouldin can raise this sufficiency challenge on appeal.

C. Whether the Debt Was Properly Accelerated

To prevail on a claim for breach of contract, the plaintiff must establish (1) the 

existence of a valid contract; (2) the plaintiff performed or tendered performance as 

contractually required; (3) the defendant breached the contract by failing to perform 

or tender performance as contractually required; and (4) the plaintiff sustained 

damages as a result of the breach. Pathfinder Oil & Gas, Inc. v. Great W. Drilling, 

Ltd., 574 S.W.3d 882, 890 (Tex. 2019); Fortitude Energy, LLC v. Sooner Pipe LLC, 

564 S.W.3d 167, 180 (Tex. App.—Houston [1st Dist.] 2018, no pet.).

A promissory note is a contract evincing an obligation to pay money. Jim 

Maddox Props., LLC v. WEM Equity Cap. Invs., Ltd., 446 S.W.3d 126, 132 (Tex. 

App.—Houston [1st Dist.] 2014, no pet.). To recover on a promissory note, the 

plaintiff must prove (1) the note in question; (2) the defendant signed the note; (3) the 

plaintiff is the owner or holder of the note; and (4) a certain balance is due and owing 

on the note. Dorsett v. Hisp. Hous. & Educ. Corp., 389 S.W.3d 609, 613 (Tex. 
60

App.—Houston [14th Dist.] 2012, no pet.) (quoting Geiselman v. Cramer Fin. Grp., 

Inc., 965 S.W.2d 532, 536 (Tex. App.—Houston [14th Dist.] 1997, no writ)).

“Where the holder of a promissory note has the option to accelerate maturity 

of the note upon the maker’s default, equity demands notice be given of the intent to 

exercise the option.” Ogden v. Gibraltar Sav. Ass’n, 640 S.W.2d 232, 233 (Tex. 

1982); Savoy, 557 S.W.3d at 839. Because a promissory note is “initially 

contemplated to extend over a period of months or years,” the accelerated maturity 

of a note “is an extremely harsh remedy.” Savoy, 557 S.W.3d at 839 (quoting Allen 

Sales & Servicenter, Inc. v. Ryan, 525 S.W.2d 863, 866 (Tex. 1975)).

A creditor must give the debtor an opportunity to pay the past due installments 

before accelerating the entire indebtedness; thus, the creditor must make a demand 

for payment of past due amounts before exercising the option to accelerate. Id.

(quoting Williamson v. Dunlap, 693 S.W.2d 373, 374 (Tex. 1985) (per curiam)); see 

Ogden, 640 S.W.2d at 234 (“Notice of intent to accelerate is necessary in order to 

provide the debtor an opportunity to cure his default prior to harsh consequences of 

acceleration and foreclosure.”). For acceleration to be effective, the holder of the 

note must notify the maker of both its intent to accelerate and of the acceleration. 

Savoy, 557 S.W.3d at 839; see Holy Cross Church of God in Christ v. Wolf, 44 

S.W.3d 562, 566 (Tex. 2001); Ogden, 640 S.W.2d at 233–34. If, after notice of intent 

to accelerate, the debtor fails to remedy the breach, then the creditor is authorized to 
61

accelerate maturity. Ogden, 640 S.W.2d at 233; Karam v. Brown, 407 S.W.3d 464, 

469–70 (Tex. App.—El Paso 2013, no pet.) (“If the default has not been cured by 

the deadline established in the notice, the lender must then give notice of 

acceleration.”).

Notice that the debt has been accelerated is ineffective unless preceded by 

proper notice of intent to accelerate. Ogden, 640 S.W.2d at 234. In Ogden, the holder 

of the promissory note and deed of trust lien provided the following notice after 

Ogden’s default on the debt:

(1) You have breached the covenant to pay sums due under your 

promissory note.

(2) To cure such breach you must pay to Gibraltar $1,315.08 no later 

than September 16, 1978. A late charge of $3.68 will be due after 

August 16, 1978. In addition, beginning September 1, 1978, the 

September regular monthly payment will also be due.

(3) Your failure to cure such breach on or before said date may result 

in acceleration of the sums secured by the Deed of Trust and sale of the 

property standing as security thereunder.

Further, you are notified of your right to reinstate after acceleration and 

the right to bring a court action to assert the nonexistence of a default 

or any other defense you may have to acceleration and sale.

Id. at 233. The Texas Supreme Court held that this letter was insufficient to provide 

notice that the creditor intended to exercise its option to accelerate the debt. Id. at 

234. The deed of trust gave the creditor the option to accelerate the note upon default, 

but it was not required to do so, and the letter “gave no clear and unequivocal notice 

that [the creditor] would exercise the option.” Id. Instead, the letter “merely restated 
62

the option conferred in the deed of trust.” Id. Because the creditor did not give proper 

notice of its intent to accelerate the debt, the attempted acceleration was ineffective. 

Id.

Since Ogden, Texas appellate courts have reaffirmed that a notice of intent to 

accelerate must “clearly inform the [debtor] of each event that is considered by the 

[creditor] to be a default.” Schuhardt Consulting Profit Sharing Plan v. Double 

Knobs Mountain Ranch, Inc., 468 S.W.3d 557, 571 (Tex. App.—San Antonio 2014, 

pet. denied). If the creditor intends to accelerate maturity of the debt, the notice must 

“unequivocally” inform the debtor of the creditor’s intention. Id.; see Shumway v. 

Horizon Credit Corp., 801 S.W.2d 890, 893 (Tex. 1991) (requiring notice of intent 

to accelerate to be “clear and unequivocal” to be effective). Courts generally 

construe unclear or equivocal language in a manner to avoid acceleration. Schuhardt 

Consulting Profit Sharing Plan, 468 S.W.3d at 571; see Burns v. Stanton, 286 

S.W.3d 657, 661 (Tex. App.—Texarkana 2009, pet. denied) (stating that because 

acceleration of debt “is viewed as a harsh remedy,” courts will strictly construe 

acceleration clauses in instruments).

Senior Care and Bouldin argue that the language in BB&T and Preston 

Hollow’s notices, like the notice of intent to accelerate in Ogden, was not a clear and 

unequivocal notice of intent to accelerate. On March 25, 2019, BB&T gave Senior 

Care and Bouldin a “Notice of Covenant Breaches and Events of Default and 
63

Demand Letter with Respect to the [four series of bonds that had been issued].” After 

identifying the relevant governing documents, BB&T—at Preston Hollow’s 

direction—notified Senior Care and Bouldin of five “conditions” that currently 

existed with “respect to the Project and the indebtedness under the above-referenced 

Bonds and loan documents”: two conditions that related to Baxter’s lien and claim 

for payment, and three conditions that related to the unpaid ad valorem taxes 

assessed by various Fort Bend County taxing authorities.

The notice stated that failure to resolve each condition within 30 days “will 

constitute an Event of Default” under the Master Indenture, Bond Indenture, Loan 

Agreement, and the Deed of Trust. BB&T demanded that Senior Care and Bouldin 

take several actions, including that: (1) Senior Care remit $852,777.11 to BB&T, 

representing the “difference between the amount of the [Baxter claim] and the 

amount of funds currently on deposit in the Project Fund”; (2) Bouldin fully pay and 

discharge all claims for labor, materials, and services for the Project pursuant to the 

Completion Guaranty; (3) Senior Care take all actions and pay any funds necessary 

to release or otherwise extinguish Baxter’s lien on the property; (4) Bouldin release 

and discharge all construction and equitable liens pursuant to the Completion 

Guaranty; and (5) remit the amount of unpaid taxes to the Fort Bend County taxing 

authorities.
64

On April 8, 2019, BB&T gave Senior Care and Bouldin a “Supplemental 

Notice of Breaches and Events of Default and Notice of Intent to Accelerate.” This 

notice stated:

Enclosed, as Exhibit A, is our letter dated March 25, 2019. We 

supplement our March 25 letter to provide the following information 

and to provide notice of intent to accelerate.

In the event you should fail to timely pay or otherwise cure the 

“Conditions” outlined in Section 1 of the March 25 letter, the Trustee 

and/or Series 2017A Majority Representative shall declare an Event of 

Default under each of the related Bond Documents and accelerate 

(subject to further election and notice to you) and declare immediately 

due and payable all amounts due and owing pursuant to the [Master 

Indenture], the Loan Agreement, the Bonds, the Obligations and the 

related Bond Documents. Your payment or cure should be made or 

accomplished no later than thirty (30) calendar days from the date of 

this Supplemental Notice.

The introductory paragraph of the March 25 letter is hereby restated in 

its entirety to read as set forth in the introductory paragraph of this 

Supplemental Notice.

Each of the Trustee and the Holders of the Series 2017A Bonds 

expressly reserves the right, at any time, to exercise any rights, powers, 

or remedies available to it or them under the Bond Documents. Please 

be further advised that this notice and demand letter does not 

(i) constitute an agreement by the Trustee or the Holders of the Series 

2017A Bonds to enter into any amendment, waiver, or other 

modification of the Bond Documents, (ii) waive any default or Event 

of Default, (iii) establish a course of dealing, or (iv) waive, limit, 

condition, or prejudice any of the Trustee’s or the Holders’ of the Series 

2017A Bonds rights or remedies under the Bond Documents or 

applicable law, all of which rights and remedies are expressly reserved.

(Emphasis added.)
65

In a May 31, 2019 notice entitled “Notice of Events of Default under the Bond 

Documents and Acceleration of Maturity of Notes and Bonds,” BB&T stated that 

Senior Care had failed to cure the conditions outlined in the March 25 letter and 

April 8 notice, and it declared that an Event of Default had occurred under the Bond 

Indenture, Master Indenture, and Loan Agreement. BB&T stated, in bold:

As directed by the Noteholder Representative and Series 2017A 

Majority Representative and in accordance with Section 7.02 of the 

[Master Indenture], Section 802 of the [Bond Indenture] and Section 

602(e) of the Loan Agreement, the Trustee hereby declares the 

Acceleration of the Notes and the Acceleration of the Bonds. 

Accordingly, (i) the entire unpaid principal of and interest on the Bonds 

has forthwith and immediately become due and payable, subject to 

Section 812 of the [Bond Indenture] and (ii) the principal of all the 

Notes has become immediately due and payable in full.

BB&T directed this notice to the holders of the bonds, posted the notice on the 

Electronic Municipal Market Access (“EMMA”) website,22 and provided the notice 

to Bouldin and Senior Care.

We agree with Senior Care and Bouldin that the language of BB&T’s April 8 

notice was not unequivocal. As Bouldin points out, the Master Indenture gives the 

Master Trustee the option to accelerate payment of the amounts owed by Senior Care 

22 The EMMA website is maintained by the Municipal Securities Rulemaking Board, 

and it provides extensive information about bond projects to the public. In the 

summary judgment proceedings, UMB Bank and TMI included a printout of the 

information relevant to this project that had been posted on EMMA. This 

information included Senior Care’s financial statements and balance sheets, 

monthly reports, notices of default, BB&T’s notice of resignation, the notice of the 

co-trustee appointments, and notice of the foreclosure sale.
66

upon the occurrence of an Event of Default. By including the parenthetical “(subject 

to further election and notice to you)” in the April 8 notice, BB&T failed to 

unequivocally indicate that Senior Care’s failure to cure the alleged defaults would 

automatically result in acceleration. Instead, the notice suggests that an additional 

election and notice would need to be made in the future.

Due to the harsh consequences of acceleration, we “generally construe unclear 

or equivocal language in a manner to avoid acceleration.” Schuhardt Consulting 

Profit Sharing Plan, 468 S.W.3d at 571; Mastin v. Mastin, 70 S.W.3d 148, 154 (Tex. 

App.—San Antonio 2001, no pet.) (“Acceleration is a harsh remedy with draconian 

consequences for the debtor and Texas courts look with disfavor upon the exercise 

of this power because great inequity may result.”). The April 8 notice, like the notice 

at issue in Ogden, did not give “clear and unequivocal notice” to Senior Care that if 

it failed to cure the alleged defaults, BB&T “would exercise the option” to accelerate 

the debt automatically. See 640 S.W.2d at 234. Thus, BB&T’s May 31 notice of 

acceleration was ineffective because it was not “preceded by proper notice of intent 

to accelerate.” See id. We hold that the trial court’s Finding Number 18 and Finding 

Number 29 were not supported by legally or factually sufficient evidence.

When acceleration is invalid, the plaintiff is entitled to judgment against the 

defendant only for past due installments plus accumulated interest as provided in the 

note. Savoy, 557 S.W.3d at 840 (quoting Williamson, 693 S.W.2d at 374). Here, 
67

although Senior Care contests the trial court’s findings of breach with respect to 

certain Events of Default, Senior Care has not contested several portions of Finding 

of Fact Number 19, addressing individual breaches of the Master Indenture, 

including:

• “Failure by Senior Care to duly and punctually pay interest on the 

Obligations in accordance with the terms of the Obligations and the 

Master Indenture, as required by Section 4.04 of the Master Indenture”;

• “Failure by Senior Care to cause all Gross Revenues to be transferred 

from the Blocked Accounts to the Revenue Fund promptly as required 

by Section 3.01(d) of the Master Indenture”;

• “Senior Care[’s] impermissible transfers [of cash] to an Affiliate, in 

violation of Section 2.3.5 of Schedule 4.26 (labelled therein as 

“Schedule 6”) to the Master Indenture”; and

• “Failure by Senior Care to deposit amounts into the Insurance and Tax 

Escrow Fund sufficient to pay in a timely manner all required tax 

payments, as required by Section 3.05 of the Master Indenture.”

Although we may suggest a remittitur when there is insufficient evidence to 

support the full accelerated amount of damages awarded but sufficient evidence to 

support a lesser award, see id. (citing Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. 

Nat’l Dev. & Rsch. Corp., 299 S.W.3d 106, 124 (Tex. 2009), and TEX. R. APP. P.

46.3), here no party has suggested an amount for a remittitur, Senior Care has not 

challenged all breaches found by the trial court, and the trial court made no findings 

that would identify an appropriate lesser amount of damages. Under these 
68

circumstances, we reverse the award of damages in favor of Preston Hollow and 

remand for a new trial on Preston Hollow’s breach of contract claim.23

We sustain Senior Care’s fourth issue in part and Bouldin’s third issue in part.

Dismissal of Claims Under Rule 166

In its sixth issue, Senior Care argues that the trial court erred by dismissing its 

claims for conversion and money had and received via a Rule 166 pretrialmanagement order.

Rule of Civil Procedure 166 provides that the trial court “may in its discretion” 

direct the parties to appear before it for a pretrial conference to consider, among 

other things, “[t]he identification of legal matters to be ruled on or decided by the 

court.” TEX. R. CIV. P. 166(g). The court “shall make an order that recites the action 

taken at the pretrial conference . . . and which limits the issues for trial to those not 

disposed of by admissions, agreements of counsel, or rulings of the court.” TEX. R.

CIV. P. 166. The purpose of this conference is to “assist in the disposition of the case 

without undue expense or burden to the parties.” Id.

23 Because we are remanding for a new trial on Preston Hollow’s breach of contract 

claim, we need not address Senior Care’s third issue, the remainder of Senior Care’s 

fourth issue, and the remainder of Bouldin’s third issue, all of which concern either 

their liability under the Notes or the amount of the damages award. See TEX.R. APP.

P. 44.1(b) (providing that if reversible error affects part, but not all, of matter in 

controversy, appellate court must reverse judgment and order new trial “only as to 

the part affected by the error,” but appellate court “may not order a separate trial 

solely on unliquidated damages if liability is contested”).
69

Rule 166(g) thus “authorizes trial courts to decide matters that, though 

ordinarily fact questions, have become questions of law because ‘reasonable minds 

cannot differ on the outcome.’” JPMorgan Chase Bank, N.A. v. Orca Assets G.P., 

L.L.C., 546 S.W.3d 648, 653 (Tex. 2018) (quoting Walden v. Affiliated Comput. 

Servs., Inc., 97 S.W.3d 303, 322 (Tex. App.—Houston [14th Dist.] 2003, pet. 

denied)). When a Rule 166(g) order disposes of claims in this fashion, the order is 

akin to a summary judgment order, and we review the order de novo. Id. If the nonmovant has raised a fact issue on the claim, dismissal under Rule 166(g) is not 

proper. See McCreight v. City of Cleburne, 940 S.W.2d 285, 288 (Tex. App.—Waco 

1997, writ denied); see also King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 

(Tex. 2003) (stating that more than scintilla of evidence exists to raise fact issue 

when evidence “rises to a level that would enable reasonable and fair-minded people 

to differ in their conclusions”).

Preston Hollow, UMB Bank, and TMI moved for dismissal of Senior Care’s 

claims for conversion and money had and received under Rule 166(g), contending 

that no fact issue existed on the claims and the trial court could dispose of the claims 

as a matter of law. Specifically, Preston Hollow, UMB Bank, and TMI argued that 

the claims could be dismissed as a matter of law because (1) UMB Bank and TMI 

were properly appointed as co-successor Bond Trustees under the Bond Indenture 

and therefore could exercise control over funds held by the trustee; (2) the Bond 
70

Indenture provided that the funds were held in trust for the benefit of the 

bondholders, and therefore the funds did not belong to Senior Care; (3) Preston 

Hollow was expressly entitled to approve or disapprove of disbursement requests for 

funds held by the trustee; and (4) the claims were barred by the economic loss rule.

Conversion is the unauthorized and unlawful assumption and exercise of 

dominion and control over the personal property of another to the exclusion of, or 

inconsistent with, the owner’s rights. Cypress Creek EMS v. Dolcefino, 548 S.W.3d 

673, 684 (Tex. App.—Houston [1st Dist.] 2018, pet. denied). The elements of a 

conversion claim are: (1) the plaintiff owned or had possession of the property or 

entitlement to possession; (2) the defendant unlawfully and without authorization 

assumed and exercised control over the property to the exclusion of, or inconsistent 

with, the plaintiff’s rights as an owner; (3) the plaintiff demanded return of the 

property; and (4) the defendant refused to return the property. Id. The plaintiff must 

also prove damages that are the proximate result of the defendant’s conversion. Id.

at 685.

Money had and received is an equitable cause of action that “belongs 

conceptually to the doctrine of unjust enrichment.” Ferrara, 555 S.W.3d at 244 

(quoting Edwards v. Mid-Continent Off. Distribs., L.P., 252 S.W.3d 833, 837 (Tex. 

App.—Dallas 2008, pet. denied)). “This cause of action is not premised on 

wrongdoing, but instead seeks to restore money where equity and good conscience 
71

require restitution.” Id. (quotations omitted); Nivens v. City of League City, 245 

S.W.3d 470, 474 n.2 (Tex. App.—Houston [1st Dist.] 2007, pet. denied). To be 

entitled to relief, the plaintiff must demonstrate that the defendant “holds money 

which in equity and good conscience belongs to him.” Ferrara, 555 S.W.3d at 244 

(quotations omitted).

Senior Care’s claims for conversion and money had and received have an 

element in common: they both require Senior Care to prove that the money that has 

been converted or held belongs to it. Senior Care, however, cannot do so. The 

“Granting Clauses” of the Master Indenture provide that, to secure the payment of 

the outstanding obligations, Senior Care as the Obligor “does hereby grant, bargain, 

sell, alienate, remise, release, convey, assign, transfer, mortgage, hypothecate, 

pledge, set over, and confirm to the Master Trustee” several described properties 

including: (1) all revenue, accounts, accounts receivable, and gross revenues; (2) the 

real property with improvements; and (3) “[a]ny amounts on deposit from time to 

time in any fund or account created hereunder, subject to the provisions of this 

Indenture permitting the application thereof for the purposes and on the terms and 

conditions set forth herein.” Senior Care granted this property—known under the 

Master Indenture as “the Trust Estate”—to BB&T as Master Trustee “TO HAVE 
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AND TO HOLD, IN TRUST, WITH THE POWER OF SALE . . . .”24 The Master 

Indenture later states that “Trust Estate” “has the meaning given to such term in the 

Granting Clauses hereof.” Senior Care also agreed that “as security for repayment 

of the Obligations, all deposit accounts of the Obligor shall at all times be controlled 

by the Master Trustee.”

Because Senior Care has not established in the trial court or on appeal that 

(1) it owned or had possession of the funds or entitlement to possession, or (2) the 

defendants held money that belonged to Senior Care, it did not raise a fact issue on 

its claims for conversion and money had and received. See Cypress Creek EMS, 548 

S.W.3d at 684 (stating elements of conversion); Ferrara, 555 S.W.3d at 244 (stating 

elements of money had and received). Thus, because Senior Care did not raise a fact 

issue on an essential element of these claims, the trial court properly dismissed the 

claims for conversion and money had and received via a Rule 166(g) pretrial 

management order. See TEX. R. CIV. P. 166(g); JPMorgan Chase Bank, 546 S.W.3d 

24 The Bond Indenture likewise provides that the Bond Trustee holds the bond 

proceeds in trust for the bondholders. Section 501 states: “All money deposited with 

or paid to the Bond Trustee for the funds and accounts held under this Bond 

Indenture shall be held by the Bond Trustee in trust and shall be applied only in 

accordance with the provisions of this Bond Indenture, and, until used or applied as 

herein provided, shall constitute part of the Trust Estate and be subject to the lien, 

terms and provisions hereof . . . .” Section 516 states: “All moneys required to be 

deposited with or paid to the Bond Trustee for the account of any of the funds or 

accounts created by this Bond Indenture shall be held by the Bond Trustee in 

trust . . . .” Both the Bond Indenture and the Master Indenture set out detailed 

requirements for specific deposit accounts and uses for the bond proceeds.
73

at 653 (stating that Rule 166(g) “authorizes trial courts to decide matters that, though 

ordinarily fact questions, have become questions of law because reasonable minds 

cannot differ on the outcome”) (quotations omitted).

We overrule Senior Care’s sixth issue.

Attorney’s Fees

Finally, in his fifth issue, Bouldin argues that the trial court erred by ordering 

him (jointly and severally with Senior Care) to pay the attorney’s fees of Preston 

Hollow, UMB Bank, and TMI. In his fourth issue, Bouldin argues that neither UMB 

Bank nor TMI can recover on the claims that they “conditionally asserted” against 

him because the trial court rendered judgment solely in favor of Preston Hollow and 

denied all other claims. We address these issues together.

In the final judgment, the trial court awarded Preston Hollow, UMB Bank, 

and TMI “judgment against each of Senior Care and Bouldin, jointly and severally, 

in the amount of $250,000 for unpaid attorneys’ fees and litigation expenses through 

proceedings in this Court.” The court also ordered Bouldin and Senior Care, jointly 

and severally, to pay $520,000 in conditional appellate attorney’s fees.

In its findings of fact and conclusions of law, the trial court identified several 

provisions of the Master Indenture, the Bond Indenture, and the Loan Agreement 

that allowed the Master Trustee, the Bond Trustee, the Noteholder Representative, 

and the Series 2017A Majority Representative to recover reasonable expenses and 
74

attorney’s fees from Senior Care. The court concluded that Bouldin is liable for 

attorney’s fees and expenses under two provisions of the Guaranty, including the 

provision making him liable for all amounts for which Senior Care is liable. The 

court further concluded that Preston Hollow, UMB Bank, and TMI are entitled to 

their reasonable attorney’s fees and expenses under both the Declaratory Judgments 

Act (“DJA”) and Civil Practice and Remedies Code Chapter 38 because “Senior 

Care and Bouldin have breached their contractual obligations to pay the amounts 

owed.” The trial court did not award a specific amount of attorney’s fees for recovery 

under the DJA or for recovery on the breach of contract claim.

In addition to guaranteeing to the “Guaranteed Parties” the “full, complete and 

prompt payment of the principal and redemption price, if any, of and interest on the 

Series 2017 Notes when due,” Bouldin also guaranteed payment of “any other sums 

incurred by Guaranteed Parties in enforcing this Guaranty and repayment of the 

Series 2017 Notes” upon the occurrence of certain specified events. Bouldin also 

agreed: “To the extent that the Guaranteed Parties incur any costs or expenses in 

protecting or enforcing its rights under this Guaranty, including reasonable 

attorneys’ fees and the costs and expenses of litigation, such costs and expenses will 

be due on demand, [and] will be included in the Guaranteed Obligations.” The 

Guaranty—and the Completion Guaranty, which did not form part of the basis for 
75

the trial court’s attorney’s fees award—is the only document that Bouldin signed in 

his individual capacity.

We have already concluded that Preston Hollow is not a “Guaranteed Party” 

under the Guaranty, and it may not enforce the Guaranty. Therefore, the Guaranty 

cannot be used to justify requiring Bouldin to pay Preston Hollow’s attorney’s fees 

and expenses.

Additionally, as Bouldin argues in his fourth issue, UMB Bank and TMI 

“conditionally asserted” the same causes of action asserted by Preston Hollow—

including a claim that Bouldin is liable under the Guaranty—in the event the court 

determined that Preston Hollow’s authority to bring suit was limited. In the final 

judgment, however, the trial court awarded damages against Bouldin under the 

Guaranty only to Preston Hollow. The condition to trigger assertion of UMB Bank 

and TMI’s claims—the trial court’s determination that Preston Hollow lacked 

authority to sue Senior Care—therefore never occurred. Aside from incorporating 

its earlier summary judgment ruling that UMB Bank and TMI were properly 

appointed as co-successor Master Trustee and Bond Trustee and awarding attorney’s 

fees and expenses, the court did not award relief to UMB Bank or TMI in the final 

judgment. In the final paragraph of the judgment, the trial court ordered that “all 

other claims and causes of action are denied.”
76

“A party who seeks to alter the trial court’s judgment or other appealable order 

must file a notice of appeal.” TEX.R. APP. P. 25.1(c). We “may not grant a party who 

does not file a notice of appeal more favorable relief than did the trial court except 

for just cause.” Id. Neither UMB Bank nor TMI filed a notice of appeal from the 

trial court’s judgment. We therefore cannot grant them greater relief than the trial 

court granted them. The trial court did not grant UMB Bank or TMI judgment on 

their conditional claims against Bouldin and instead expressly denied “all other 

claims and causes of action.” In the absence of a notice of appeal from UMB Bank 

or TMI seeking to alter this portion of the trial court’s judgment, we may not grant 

them relief on their conditional claims against Bouldin.25

Without a judgment in their favor that Bouldin is liable to them under the 

Guaranty, at this point, UMB Bank and TMI cannot recover attorney’s fees against 

25 We agree with Bouldin that this is not a situation in which a party prevailed in the 

trial court and had a judgment in its favor reversed on appeal, entitling the party to 

elect a lesser remedy under an alternative theory of recovery. See Boyce Iron Works, 

Inc. v. Sw. Bell Tel. Co., 747 S.W.2d 785, 787 (Tex. 1988) (“When the jury returns 

favorable findings on two or more alternative theories, the prevailing party need not 

formally waive the alternative findings. That party may seek recovery under an 

alternative theory if the judgment is reversed on appeal.”). Aside from the trial 

court’s declaratory judgment on the issue of appointment as successor Master 

Trustee and Bond Trustee and the court’s ruling on attorney’s fees, the trial court 

did not grant relief in favor of UMB Bank and TMI. UMB Bank and TMI did not 

prevail on their conditional claims; instead, the condition to trigger these claims 

never occurred.
77

Bouldin under the Guaranty. We therefore hold that the trial court erred by ordering 

Bouldin to pay attorney’s fees to Preston Hollow, UMB Bank, and TMI.26

We sustain Bouldin’s fourth issue in part and his fifth issue.

26 Similarly, because we reverse the judgment of the trial court on Preston Hollow’s 

breach of contract claim and remand that claim for a new trial and because the trial 

court did not award a specific amount of attorney’s fees for Preston Hollow’s breach 

of contract claim and a specific amount of attorney’s fees for UMB Bank and TMI’s 

declaratory judgment claim, we vacate the portion of the judgment that awards 

Preston Hollow, UMB Bank, and TMI attorney’s fees against Senior Care.
78

Conclusion

We reverse the portion of the trial court’s judgment that granted Preston 

Hollow judgment against Bouldin under the Guaranty and render judgment that 

Preston Hollow may not enforce the Guaranty against Bouldin. We also reverse the 

portions of the judgment that granted Preston Hollow judgment against Senior Care 

for breach of contract and awarded Preston Hollow $52,597,040.06 in damages and 

pre-judgment interest against Senior Care. We remand Preston Hollow’s breach of 

contract claim against Senior Care for a new trial. We also remand UMB Bank and 

TMI’s claims against Bouldin under the Guaranty for further proceedings.27 We 

further vacate the award of attorney’s fees in favor of Preston Hollow, UMB Bank, 

and TMI. We affirm the remaining portions of the trial court’s judgment.

April L. Farris

Justice

Panel consists of Justices Hightower, Rivas-Molloy, and Farris.

27 Because the condition to trigger UMB Bank and TMI’s claims against Bouldin 

under the Guaranty did not occur while the underlying proceeding was pending in 

the trial court, these claims were not tried in the underlying trial. On appeal, 

however, we have determined that Preston Hollow may not enforce the Guaranty 

against Bouldin. We therefore remand not for a new trial on UMB Bank and TMI’s 

claims against Bouldin, but for a trial in the first instance.