In the

Court of Appeals

Second Appellate District of Texas

at Fort Worth

___________________________

No. 02-19-00304-CV

___________________________

On Appeal from the 96th District Court

Tarrant County, Texas

Trial Court No. 096-291366-17

Before Gabriel, Womack, and Wallach, JJ.

MEMORANDUM OPINION BY JUSTICE GABRIEL

JUSTICE WOMACK CONCURS WITHOUT OPINION.

SCOTT’S BIG TRUCK SALES, LLC; DON’S BIG TRUCK SALES, LLC;

DONALD R. SCOTT; AND JOHNNY A. SCOTT, Appellants

V.

AUTOMOTIVE FINANCE CORPORATION, APPELLEE
2

MEMORANDUM OPINION

This appeal is from a final judgment awarding damages and attorney’s fees to 

appellee and lender Automotive Finance Corporation (AFC) in its suit to collect a 

debt from appellants and borrowers Scott’s Big Truck Sales, LLC, and Don’s Big 

Truck Sales, LLC and from appellants and guarantors Donald R. Scott and Johnny A. 

Scott. The trial court’s final judgment incorporated and was based on its partial 

summary judgment for AFC on its breach-of-contract, breach-of-guaranty, and 

Indiana statutory claims for fraud and deception. We affirm in part and reverse and 

remand in part.

I. BACKGROUND

Scott’s Big Truck Sales and Don’s Big Truck Sales signed notes1 with AFC 

under a floorplan-lending arrangement, in which the lender provides financing to an 

auto dealership on a vehicle-by-vehicle basis so that the dealership can buy inventory. 

The dealer is obligated to repay the lender when the dealer sells the particular vehicle

that had been financed. In conjunction with the notes, Donald Scott signed a

guaranty of payment for amounts due on the Scott’s Big Truck Sales note, and Johnny 

Scott signed a guaranty of payment for amounts due on the Don’s Big Truck Sales

note. Donald was a member of Scott’s Big Truck Sales and Johnny a member of 

Don’s Big Truck Sales. 

1

Scott’s Big Truck Sales signed two notes, and Don’s Big Truck Sales signed 

one. 
3

AFC eventually sued Scott’s Big Truck Sales, Don’s Big Truck Sales, Donald, 

and Johnny (all four, collectively, the Scotts) to recover amounts it claimed were due 

on the notes and guaranty agreements. As part of the suit, AFC attempted to recover 

via sequestration four vehicles that had been sold but for which the Scotts had not 

remitted payment to AFC. AFC recovered two of the vehicles and credited the 

accounts accordingly. But it was not able to recover two others. As to those vehicles, 

AFC sought statutory civil damages for fraud and deception under Indiana law. 

After AFC moved for summary judgment on its claims, the Scotts filed a plea 

to the jurisdiction challenging AFC’s standing to sue them. AFC filed a response and 

attached evidence. The Scotts objected to a portion of AFC’s summary-judgment 

evidence, but the trial court overruled all of their objections. The trial court did not 

sign a written order on the plea to the jurisdiction at the time, but it did grant AFC 

partial summary judgment on all of its claims except its request for attorney’s fees.2 

AFC then filed a second summary-judgment motion as to attorney’s fees, and 

the Scotts filed a motion asking the trial court to reconsider its partial summary 

judgment ruling and the jurisdictional issue. The trial court granted AFC summary

judgment on its attorney’s fees request, denied the Scotts’ motion to reconsider, and 

2AFC had initially sought summary judgment on its attorney’s-fees request, but 

it withdrew that part of its motion in light of the Texas Supreme Court’s opinion in 

Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469, 496–503 (Tex. 

2019). The trial court’s partial summary judgment order stated that the court would 

consider the attorney’s fees request at a later date “upon presentation.” 
4

rendered a final judgment incorporating the partial summary judgment and awarding 

AFC attorney’s fees. The Scotts appeal.

II. STANDING TO ENFORCE NOTES

In their first issue, the Scotts argue that AFC did not prove its standing to 

maintain a suit against them based on the debt. They base their argument primarily 

on the loan-related documents attached to AFC’s pleadings and incorporated into 

those pleadings by reference; all of those documents state, at the bottom of each page, 

“This receivable has been sold to AFC Funding Corporation and an interest therein 

has been granted to [either BMO Capital Markets Corp. or Bank of Montreal] as 

agent.” The Scotts contend that this statement is a judicial admission that when AFC 

filed suit, it no longer had any interest in the notes it sought to enforce and, therefore, 

that AFC pled facts negating its standing. See Rockwell Commons Assocs., Ltd. v. MRC 

Mtg. Grantor Trust I, 331 S.W.3d 500, 505 (Tex. App.––El Paso 2010, no pet.) (noting 

that element of suit to recover on promissory note is that plaintiff is legal owner and 

holder of note). The Scotts raised this issue in their plea to the jurisdiction and also in 

their response to AFC’s summary-judgment motion.3 AFC argued in its motion for 

summary judgment that it was the appropriate party to enforce the contracts. 

3

In accordance with the Scotts’ briefing, we review this issue in the context of 

the trial court’s ruling on the plea to the jurisdiction. Although the trial court did not 

initially render an order on the plea to the jurisdiction, it expressly denied it by 

denying the Scotts’ motion to reconsider, in which they had asked the trial court to 

dismiss AFC’s “case for want of jurisdiction.” Cf. Bass v. Waller Cty. Sub-Reg’l Planning 

Comm’n, 514 S.W.3d 908, 912 (Tex. App.––Austin 2017, no pet.) (declining to 
5

A. STANDARD OF REVIEW

We review de novo a trial court’s ruling on jurisdiction. See Tex. Dep’t of Parks 

& Wildlife v. Miranda, 133 S.W.3d 217, 228 (Tex. 2004) (op. on reh’g); Tex. Ass’n of Bus. 

v. Tex. Air Control Bd., 852 S.W.2d 440, 443 (Tex. 1993) (holding that lack of standing

defeats a trial court’s subject-matter jurisdiction). A plaintiff must plead facts that 

affirmatively show trial-court jurisdiction. Tex. Ass’n of Bus., 852 S.W.2d at 446. We 

construe the pleadings liberally in the plaintiff’s favor, accept all factual allegations as 

true, and look to the plaintiff’s intent. Heckman v. Williamson Cty., 369 S.W.3d 137, 150 

(Tex. 2012). We consider relevant evidence of jurisdictional facts when necessary to 

resolve the jurisdictional issues raised taking as true all evidence favorable to the 

nonmovant, indulging every reasonable inference, and resolving any doubts in the 

nonmovant’s favor. Miranda, 133 S.W.3d at 227–28. If the evidence creates a fact 

question regarding the jurisdictional issue, then the trial court cannot grant the plea to 

the jurisdiction, and the fact issue will be resolved by the factfinder. Id. But if the 

relevant evidence is undisputed or fails to raise a fact question on the jurisdictional 

issue, the trial court rules on the plea to the jurisdiction as a matter of law. Id. at 228.

consider trial court’s lack of ruling on jurisdictional plea in context of interlocutory 

appeal from partial summary judgment). But even if we were to review the standing 

issue solely in the context of the trial court’s partial-summary-judgment ruling, our 

holding would be the same. 
6

B. ANALYSIS

The notes and guaranty agreements provide that the documents are to be 

construed according to Indiana law.4 Both Indiana and Texas law provide that a note 

may be enforced by an owner and holder. See Ind. Code §§ 26-1-1-201(20)(A), 26-1-

3.1-301; Tex. Bus. & Com. Code Ann. § 3.301; Collins v. HSBC Bank USA, Nat’l Ass’n, 

974 N.E.2d 537, 540–41 (Ind. Ct. App. 2012); cf. Manley v. Wachovia Small Bus. Capital, 

349 S.W.3d 233, 240 (Tex. App.—Dallas 2011, pet. denied) (“The owner of a note 

may enforce the note even if he is not a holder.”). A holder is a person who

possesses a negotiable instrument payable to an identified person when the one in 

possession is the person identified in the note. Pichon v. Am. Heritage Banco, Inc., 

983 N.E.2d 589, 599 (Ind. Ct. App. 2013) (citing Ind. Code § 26-1-1-201(20)), trans. 

denied; Haley v. Beneficial Fin. I Inc., No. 13-18-00058-CV, 2019 WL 2709015, at *4 (Tex. 

App.—Corpus Christi–Edinburg June 28, 2019, no pet.) (mem. op.).

According to the Scotts, the form language on the notes stating that “[t]his

receivable has been sold” proves conclusively that AFC has no right to enforce them. 

4When parties have contractually chosen the law of another state to govern 

disputes, matters of remedy and procedure are still governed by Texas law in Texas 

courts. Bayer Corp. v. DX Terminals, Ltd., 214 S.W.3d 586, 594 n.3 (Tex. App.—

Houston [14th Dist.] 2006, pet. denied). Additionally, even if the parties had disputed 

which state’s law applies, we would not need to engage in a choice-of-law analysis

here, except as to the Indiana statutory law, because Texas law regarding the notes 

and guaranty agreements is consistent with Indiana law. See In re Wells Fargo Bank 

Minn. N.A., 115 S.W.3d 600, 606 (Tex. App.—Houston [14th Dist.] 2003, orig. 

proceeding [mand. denied]).
7

The Scotts also point to legends printed on a report attached as evidence to AFC’s 

motion for partial summary judgment for their argument’s support:

THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD 

TO AFC FUNDING CORPORATION PURSUANT TO AN 

AMENDED AND RESTATED PURCHASE AND SALE

AGREEMENT, DATED AS OF MAY 31, 2002 BETWEEN

AUTOMOTIVE FINANCE CORPORATION AND AFC 

FUNDING CORPORATION, AS AMENDED; AND AN 

INTEREST IN THE RECEIVABLES DESCRIBED HEREIN HAS 

BEEN GRANTED TO THE AGENT FOR THE BENEFIT OF

THE SECURED PARTIES, PURSUANT TO A SEVENTH 

AMENDED AND RESTATED RECEIVABLES PURCHASE 

AGREEMENT, DATED AS OF DECEMBER 20, 2016 AMONG 

AFC FUNDING CORPORATION, AS SELLER, AUTOMOTIVE 

FINANCE CORPORATION, AS SERVICER, FAIRWAY FINANCE 

COMPANY, LLC AND SUCH OTHER ENTITIES FROM TIME 

TO TIME AS MAY BECOME PURCHASERS THEREUNDER, 

BANK OF MONTREAL, AS AGENT, BMO CAPITAL MARKETS 

CORP. AS PURCHASER AGENT FOR FAIRWAY FINANCE 

COMPANY, LLC, AND THE PURCHASER AGENTS FOR SUCH 

OTHER PURCHASERS THEREUNDER, AS AMENDED.[5]

But AFC contends that it sold only the right to payment under the notes and 

that it retains an ownership interest in the loan documents.

6

 AFC attached to its 

response to the Scotts’ plea to the jurisdiction two affidavits from Dwayne Price:

7 one 

5The report also contains a similar legend as to “CANADIAN 

RECEIVABLES.” 

6AFC also argued in its response to the Scotts’ plea to the jurisdiction that its 

status as servicer of the “receivables” gave it standing. But we need not address that 

alternative ground for standing. See Tex. R. App. P. 47.1.

7On appeal, the Scotts complain that the affidavits were unsworn and that one 

of them did not sufficiently authenticate the attached pool-receivables sales 

agreement. But the Scotts did not complain about these form defects in the trial 
8

as its assistant treasurer and the other as the assistant treasurer of AFC Funding

Corporation (Funding). Price averred that AFC created Funding as a wholly owned 

subsidiary “solely for the purpose of purchasing finance receivables from AFC and 

selling undivided participation interests in the pool of finance receivables, referred to 

as a securitization pool, to a bank[-]conduit facility on a revolving basis.” According 

to Price, “AFC does not sell, and Funding does not purchase, the underlying loan 

contracts between AFC and the used vehicle dealers who are its customers.” Price 

averred that AFC made loans to the two dealerships––Scott’s Big Truck Sales and 

Don’s Big Truck Sales––“and [then] sold the rights to payment thereunder (the

‘Receivables’) into Funding’s securitization pool.” AFC is the servicer for the pool

and is responsible for collecting all the pool receivables. 

AFC also attached as evidence the “Receivables Purchase Agreement” signed 

by Funding as “Seller,” AFC as “Servicer,” and Bank of Montreal as the agent for 

seven named purchasers. Under that agreement, each purchaser would periodically 

“purchase and make reinvestments of” defined percentages of “Pool Receivables.” A 

“Pool Receivable” is defined as “a Receivable conveyed to the Seller pursuant to the 

court; therefore, they did not preserve that part of their complaint for appeal. See Seim 

v. Allstate Tex. Lloyds, 551 S.W.3d 161, 166 (Tex. 2018) (per curiam); Cty. of El Paso v. 

Baker, 579 S.W.3d 686, 694 (Tex. App.––El Paso 2019, no pet.); see also Mansions in the 

Forest, L.P. v. Montgomery Cty., 365 S.W.3d 314, 317 (Tex. 2012) (per curiam); Haase v. 

Abraham, Watkins, Nichols, Sorrels, Agosto & Friend, L.L.P., 499 S.W.3d 169, 175, 178 

(Tex. App.—Houston [14th Dist.] 2016, pet. denied). 
9

Purchase and Sale Agreement and not reconveyed to the Originator[8]in accordance 

with the terms of the Purchase and Sale Agreement.” “Receivable” is defined as

any right to payment from any Person, whether constituting an account,

chattel paper, instrument, payment intangible or a general intangible, 

arising from the providing of financing and other services by the 

Originator . . . to (i) new, used and wholesale automobile, light truck or 

other Specialty Vehicle dealers . . . and includes the right to payment of 

any interest or finance charges and other obligations of such Person with 

respect thereto.

[Emphasis added.] 

AFC’s evidence shows that its arrangement with Funding involved selling only 

its right to payment under the notes it entered into with Scott’s Big Truck Sales and 

Don’s Big Truck Sales; AFC did not divest itself of its entire interest in the notes and

guaranty agreements. Moreover, under the Funding Receivables Purchase Agreement, 

Funding did not transfer all of its payment rights to a particular purchaser; instead, it 

sold the purchasers percentage interests according to a formula. The language the 

Scotts contend is proof that AFC has no interest in the notes was required by the 

Receivables Purchase Agreement. The use of the word “receivable” is consistent with 

the definition in the Funding Receivables Purchase Agreement and, in the context of 

that agreement, is not conclusive proof that AFC divested itself of all ownership 

interest in the notes and guaranty agreements.

8Originator is defined in a separate agreement not included as jurisdictional

evidence. 
10

Moreover, as servicer of the receivables, AFC was required to “hold for the

benefit of the Secured Parties in accordance with their respective interests, all records 

and documents (including without limitation computer tapes or disks) with respect to 

each Pool Receivable.” In the affidavit attached to AFC’s summary-judgment 

motion, its Senior Corporate Investigator Jerome Bosl averred that the attached notes 

were “records held by AFC.” [Emphasis added.] Thus, the jurisdictional evidence 

showed that AFC possessed the Scott’s Big Truck Sales and Don’s Big Truck Sales 

notes made payable to it and that it still retained an ownership interest in those notes, 

having sold only the right to payment thereunder.

9

The Scotts analogize this case to Shipley v. Unifund CCR Partners, 331 S.W.3d 27, 

29 (Tex. App.––Waco 2010, no pet.) (op. on reh’g), and argue that it commands a 

different result. In Shipley, the original lender on a credit-card account had sold the 

account; the new owner had assigned only the right to collect the debt to Unifund 

CCR Partners but had retained title to the account. Id. at 28. Unifund CCR Partners

then filed suit to collect the debt. Id. The Waco Court of Appeals held that Unifund 

CCR Partners failed to show its standing to sue to collect the debt because the owner 

of the debt had not assigned any ownership interest to Unifund. Id. at 29–30. Here, 

however, the evidence shows that AFC sold the receivables––the right to payments

9Even if, as the Scotts contend, the stamped language on the notes––attached 

to and incorporated into AFC’s pleadings––constitutes a judicial admission, that 

factual admission is not contrary to, and does not disprove, AFC’s evidence that it 

remains the owner of the notes except as to the right of payment. 
11

on the notes––to Funding but retained ownership and possession of the notes. 

Therefore, the facts in this case are distinguishable from the facts in Shipley.

We hold that the trial court did not err by determining that AFC did not plead 

facts negating its jurisdiction and therefore had standing to sue the Scotts to collect 

the debt. We overrule the Scotts’ first issue.

III. OBJECTIONS TO SUMMARY-JUDGMENT EVIDENCE

We next turn to the remainder of the Scotts’ summary-judgment issues. In part

of their second issue, the Scotts argue that the trial court erred by overruling their

objections to Bosl’s affidavit. We review the trial court’s order overruling the Scotts’

objections for an abuse of discretion. See Starwood Mgmt., LLC v. Swaim, 530 S.W.3d 

673, 678 (Tex. 2017) (per curiam).

A. BOSL’S PERSONAL KNOWLEDGE

Bosl stated in his affidavit that he had personal knowledge of the facts therein

based on “the performance of [his] duties” as AFC’s Senior Corporate Investigator; 

he also stated that he was the custodian of “Deficiency Accounting Records” for AFC 

and that the records referenced in and attached to the affidavit were kept and made in 

the regular course of AFC’s business. The Scotts objected that Bosl never stated how 

he came to acquire personal knowledge of the records; therefore, his averment that he 

had personal knowledge of the records’ contents is “conclusory, based on hearsay and 

speculation, [and] without foundation.” 
12

Bosl’s explanation of his employment with AFC and his status as a records 

custodian for this particular account was sufficient to show his personal knowledge of 

the transaction. See Espinoza v. Wells Fargo Bank, N.A., No. 02-13-00111-CV, 2013

WL 6046611, at *3 (Tex. App.—Fort Worth Nov. 14, 2013, pet. denied) (mem. op.); 

Energico Prod., Inc. v. Frost Nat’l Bank, No. 02-11-00148-CV, 2012 WL 254093, at *6 

(Tex. App.––Fort Worth Jan. 26, 2012, pets. denied) (mem. op.). Therefore, the trial 

court did not abuse its discretion by overruling this objection.

B. CLAIMS-SPECIFIC STATEMENTS

The Scotts challenge several of Bosl’s other statements. They first challenge

Bosl’s averment that “AFC has accelerated maturity of [the] Note[s]” as lacking 

foundation and as being conclusory. The notes attached as summary-judgment 

evidence state that in the event of a default, AFC could declare the entire unpaid 

amount of the note due and owing without notice or demand. Therefore, Bosl’s 

statement––as custodian of the accounts’ records––is a factual statement that is based 

on his knowledge of the loan records and is not conclusory or without foundation. 

See Thanphirom v. Wells Fargo Bank, N.A., No. 07-20-00034-CV, 2020 WL 3957832, at 

*3–4 (Tex. App.––Amarillo July 10, 2020, no pet.) (mem. op.) (per curiam); Gandara v. 

JP Morgan Chase Bank, No. 01-03-00926-CV, 2005 WL 615628, at *3 (Tex. App.—

Houston [1st Dist.] Mar. 17, 2005, no pet.) (mem. op.). The trial court did not abuse 

its discretion by overruling this objection.
13

The Scotts also argue that Bosl’s statement that “[a]ll conditions precedent to 

AFC’s right to recover judgment . . . [h]ave been performed or have occurred[] and all 

notices required have been given or have been waived” lacks foundation and is 

speculative and conclusory. Even if the trial court should have granted the Scotts’

objections as to this statement, it was not necessary for AFC to prove its claims

because although the Scotts complained generally in their answer that all conditions 

precedent had not occurred, they did not deny that any specific condition precedent 

had occurred. Thus, AFC was not required to prove that it performed all required 

conditions precedent to recover on its claims. See Tex. R. Civ. P. 54; Madhavan A. 

Pisharodi, M.D., P.A. v. United Biologics, L.L.C., No. 04-18-00324-CV, 2020 WL 

1443561, at *3 (Tex. App.—San Antonio Mar. 25, 2020, pets. denied) (mem. op.); see 

also Affordable Motor Co., Inc. v. LNA, LLC, 351 S.W.3d 515, 520 (Tex. App.—Dallas 

2011, pet. denied) (“To prevail on its motion for summary judgment to enforce the 

promissory note, LNA was required to prove that (1) the note exists, (2) LNA is the 

legal owner and holder of the note, (3) Affordable Motor is the maker of the note, 

and (4) a certain balance is due and owing on the note.”). Accordingly, we need not 

decide whether the trial court abused its discretion by overruling this objection. See

Tex. R. App. P. 47.1.
14

The Scotts also complain about statements in Bosl’s affidavit that relate to the

fraud-and-deception causes of action

10 under Indiana law. Specifically, they complain 

about the following paragraph:

Defendants misapplied the proceeds of the sale of a motor vehicle, 

which were Purchase Money Inventory and held in Trust, by failing to 

make payment to AFC from said proceeds as provided in the Note. By

misapplying entrusted property and property of a credit institution in a 

manner that Defendants knew was unlawful and knew involved substantial risk of

loss or detriment to AFC, Defendants committed criminal deception, as 

that term is defined by Indiana Code § 35-43-5-3-1. Furthermore, by 

transferring the proceeds of the sales in derogation of the Note with the 

intent to defraud Plaintiff, Defendants committed criminal fraud, as that 

term is defined by Indiana Code § 35-43-5-4(8).

[Emphasis added.] 

This statement is conclusory; it asserts a legal conclusion without stating any 

specific facts upon which it relies. Indiana Code Section 35-43-5-3 provides, in part:

A person who . . . misapplies entrusted property . . . or property of a 

credit institution in a manner that the person knows is unlawful or that 

the person knows involves substantial risk of loss or detriment to either

the owner of the property or to a person for whose benefit the property 

was entrusted . . . commits [the Class A misdemeanor of] deception.

10Although Indiana law describes fraud and deception as criminal offenses, see

Ind. Code §§ 35-43-3-1, 35-43-5-4(8), it expressly allows a person to recover civil 

damages for a violation of either of those provisions, see id. § 34-24-3-1. See also Ecker 

v. Rochester Ford New Holland, Inc., 694 N.E.2d 289, 291 (Ind. Ct. App. 1998) (providing 

that to recover for civil damages, plaintiff must prove commission of statutorily 

defined deception or fraud by a preponderance of evidence). AFC asked the trial 

court to take judicial notice of these provisions of Indiana law in its motions for 

summary judgment. The trial court did not expressly rule on this request, but it 

referenced Section 34-24-3-1 in its partial summary judgment and in its final 

judgment. 
15

Ind. Code § 35-43-5-3. Indiana Code Section 35-43-5-4(8) provides that a person 

commits fraud if, “with intent to defraud the person’s creditor or purchaser, [the 

person] conceals, encumbers, or transfers property.” Id. § 35-43-5-4(8).

Bosl did not include any facts in his affidavit relevant to the Scotts’ intent in 

failing to pay or showing that they knew their actions were unlawful; instead, he 

merely presented facts showing that they did not timely remit proceeds from sold 

vehicles, and then he restated the elements of the two causes of action under Indiana 

law. Likewise, Bosl did not state what the Scotts did with the sales proceeds other 

than failing to timely remit them to the lender. He simply concludes that they 

committed statutory deception and fraud under Indiana law without explaining why. 

See Anderson v. Snider, 808 S.W.2d 54, 55 (Tex. 1991) (per curiam) (op. on reh’g)

(holding that attorney’s expert opinion that he did not commit malpractice, violate the

DTPA, or breach a contract was conclusory because it did not explain its legal basis or 

reasoning for the opinion); see also Auto. Fin. Corp. v. Kan. Motor Co., No. 1:05-cv01614-RLY-WTL, 2006 WL 1455553, at *3 (S.D. Ind. May 22, 2006) (holding that 

AFC was not entitled to summary judgment against note guarantors, pursuant to a 

similar floorplan-financing arrangement, under civil-damages provision of Indiana 

Code for criminal fraud and deception where AFC provided only general assertions 

and no facts in support and noting, “Nor would it be easy for it to do so in light of 

the intent and knowledge requirements to establish deception and fraud”). 
16

The Scotts objected to two other statements in Bosl’s affidavit related to the 

deception-and-fraud claims: Bosl’s averments setting forth the amounts of AFC’s 

“actual damages from the deception and fraud of” Scott’s Big Truck Sales and Don’s 

Big Truck Sales and opining that AFC “is entitled to recover from” the Scotts “three 

(3) times [AFC’s] actual damages from such violations, together with attorney’s fees, 

interest, and other costs of collection set out therein.” These statements are likewise 

conclusory. See Anderson, 808 S.W.2d at 55. Thus, we sustain this part of the Scotts’

second issue and do not consider Bosl’s conclusory statements in our review of the 

propriety of the trial court’s summary judgment.

IV. PROPRIETY OF SUMMARY JUDGMENT

Also in part of their second issue, the Scotts challenge the trial court’s summary 

judgment for AFC on its breach-of-contract and fraud-and-deception causes of

action.11 

11Although most of the Scotts’ argument as to the propriety of summary

judgment on the merits restates their standing complaint, they also claim––with a bare 

minimum of argument––that AFC presented no credible evidence of default or actual 

damages and that AFC “never presented any evidence that would rise to the level of 

fraud, deception, or any other criminal conduct.” Because the Scotts make at least 

some argument challenging each ground on which the summary judgment was based,

we address their complaints. See Tex. R. App. P. 38.1(f); Ganter v. Indep. Bank, No. 05-

15-00413-CV, 2016 WL 4376284, at *7 (Tex. App.—Dallas Aug. 16, 2016, pet. 

denied) (mem. op.) (“Although the nonmovant may assert in a general appellate issue 

that the summary judgment was erroneous, it must also support that issue with 

argument challenging all possible grounds on which the summary judgment could 

have been granted or a reviewing court will affirm the summary judgment.”).
17

A. STANDARD OF REVIEW

We review a summary judgment de novo. Travelers Ins. v. Joachim, 315 S.W.3d

860, 862 (Tex. 2010). We consider the evidence presented in the light most favorable 

to the nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors 

could and disregarding evidence contrary to the nonmovant unless reasonable jurors 

could not. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 

(Tex. 2009). We indulge every reasonable inference and resolve any doubts in the 

nonmovant’s favor. 20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008). A plaintiff 

is entitled to summary judgment on a cause of action if it conclusively proves all 

essential elements of the claim. See Tex. R. Civ. P. 166a(a), (c); MMP, Ltd. v. Jones, 

710 S.W.2d 59, 60 (Tex. 1986).

B. CRIMINAL DECEPTION AND FRAUD UNDER INDIANA LAW

The trial court found that AFC was entitled to judgment from the Scotts under 

Indiana Code Section 34-24-3-1: $8,828.72 from Scott’s Big Truck Sales and Donald 

Scott and $22,800.00 from Don’s Big Truck Sales and Johnny Scott. The trial court’s 

judgment did not specify whether it had found that AFC proved its entitlement to 

damages for fraud, deception, or both. 

Under the Indiana Crime Victims Compensation Act (CVCA), a plaintiff can 

recover civil damages for a violation of either the fraud or deception statute, in 

addition to certain other offenses, on proof by a preponderance of the evidence. Ind. 

Code §§ 34-24-3-1, 35-43-3-1, 35-43-5-4(8); Klinker v. First Merchants Bank, N.A., 
18

964 N.E.2d 190, 193 (Ind. 2012); see Heckler & Koch, Inc. v. German Sport Guns GmbH,

976 F. Supp. 2d 1020, 1035 (S.D. Ind. 2013) (order). Because the CVCA is punitive in 

nature and must be strictly construed, it cannot be enlarged by construction, 

implication, or intendment beyond the fair meaning of the language used. Flaherty & 

Collins, Inc. v. BBR-Vision I, L.P., 990 N.E.2d 958, 968 (Ind. Ct. App. 2013), trans. 

denied. To establish a viable claim for civil damages under Section 34-24-3-1, a 

plaintiff must show, in addition to statutory fraud or deception, that the violation 

caused the plaintiff’s loss. Ind. Code § 34-24-3-1; Flaherty & Collins, 990 N.E.2d at 

968. The mens rea requirement of the underlying criminal actions (i.e., fraud or 

deception) differentiates those acts from the more innocent breach of contract, which

the criminal statutes were not intended to reach. Flaherty & Collins, 990 N.E.2d at 

968.

The notes, which AFC attached as summary-judgment proof, provided in 

Section 2.6,

Dealer shall pay to LENDER at the offices of LENDER the 

Obligations, on demand and without notice, and in any event, with 

respect to an item of Purchase Money Inventory on the earliest of: 

(a) LENDER’s demand[;] (b) forty-eight (48) hours after the disposition 

by sale or otherwise of an item of Purchase Money Inventory; or (c) the 

Curtailment Date. All proceeds of any such disposition shall be received 

by Dealer in trust for LENDER and forwarded promptly to LENDER 

as noted below.

The notes further provided that when any Purchase Money Inventory item was sold, 

the debtor would “hold the amount received from the disposition of inventory in 
19

trust for the benefit of LENDER and . . . pay promptly to LENDER, in accordance

with Section 2.6, an amount equal to the unpaid balance of the Purchase Money 

Inventory Obligations and any other Obligations relating to such Purchase Money 

Inventory.” 

Bosl averred that Scott’s Big Truck Sales had sold “$4,414.36 worth of 

vehicles . . . out of trust” and that Don’s Big Truck Sales had sold “$11,400.00 worth 

of vehicles . . . out of trust.” He also averred that the dealerships had “failed to pay 

AFC the proceeds from the following vehicle[s]”; specifically, he stated that Don’s Big

Truck Sales had sold and failed to remit payment for a 2013 Nissan Altima for a total

of $11,400.00 and that Scott’s Big Truck Sales had sold and failed to remit payment 

for a 2007 Lexus ES 350 for a total of $4,414.36. 

Other than this unobjected-to affidavit evidence and the conclusory statement 

in Bosl’s affidavit, which we do not consider, AFC provided no evidence that any of 

the Scotts specifically intended to cause AFC injury or loss by failing to remit payment 

for the two sold vehicles. Thus, the trial court erred by granting summary judgment 

to AFC under Indiana Code Section 34-24-3-1 if based on a finding that the Scotts 

committed criminal fraud under Indiana law. See Klinker, 964 N.E.2d at 193, 195

(holding that “summary judgment [for civil damages for criminal fraud] is proper only 

if the undisputed facts show that, when [the defendant] made the challenged transfers, 

his conscious objective was to cause injury or loss to [lender] by deceit” and that 
20

“summary judgment is almost never appropriate where the claim requires a showing 

that the defendant acted with criminal intent or fraudulent intent”).

As to the criminal-deception statute, the most AFC showed via its summaryjudgment proof is that Scott’s Big Truck Sales and Don’s Big Truck Sales––as makers 

of the notes––knew that the notes obligated them to hold the proceeds of any auto 

sales in trust for AFC and to timely remit payment of those proceeds to AFC. 

Although this is sufficient evidence to support a finding that Scott’s Big Truck Sales 

and Don’s Big Truck Sales violated the Indiana deception statute, see Greg Allen Constr. 

Co. v. Estelle, 762 N.E.2d 760, 781 (Ind. Ct. App. 2002) (“[T]he only mental element

required to be shown here was McGaughey’s knowledge that the manner in which she 

misapplied the line of credit involved a substantial risk of loss or detriment to Allen 

Construction.”), aff’d in part and rev’d in part in other grounds, 798 N.E.2d 171 (Ind. 2003), 

it is not sufficient evidence to support a finding that Donald and Johnny––who signed 

only the guaranty agreements in their individual capacities––did so,

12 see Auto. Fin. 

Corp. v. Auto Maxx, L.L.C., No. 1:06-cv-00623-LJM-WTL, 2006 WL 2024376, at *3 

(S.D. Ind. July 17, 2006) (order) (holding that showing of failure of note makers to 

timely remit payment was not sufficient to prove that closely related note guarantors

had sufficient knowledge); Kan. Motor, 2006 WL 1455553, at *3 (“All that is attested to

12Although Donald and Johnny agreed to repay amounts due on the notes, the

guaranty agreements did not obligate them to hold any funds in trust, nor is there any 

evidence that they personally held or applied any of those funds. 
21

at this point is that an inventory of vehicles shows that some vehicles which were 

floor planned by AFC are no longer on the lot and the proceeds of any sale of those 

vehicles was not applied to the AFC debt.”). 

Thus, although the trial court’s judgment under Indiana Code Section 34-24-3-

1 was proper as to Scott’s Big Truck Sales and Don’s Big Truck Sales based on a 

finding that they violated the Indiana deception statute, the trial court erred by also 

finding Donald and Johnny liable under Section 34-24-3-1 because no evidence 

supports a finding that they violated either the fraud or deception statutes. We sustain 

this part of the Scotts’ second issue in part and overrule it in part.

C. BREACH OF CONTRACT AND GUARANTY AGREEMENTS

Other than AFC’s standing, which we have already addressed, the Scotts raise 

only two arguments as to the propriety of summary judgment on the breach-ofcontract and breach-of-guaranty claims: AFC provided no credible proof of default or

of any actual damage to AFC. Their arguments appear to hinge on their contention

that the trial court should have granted their objection that Bosl did not adequately 

demonstrate his personal knowledge of the facts, an argument that we have already 

rejected.

To recover on the notes from Scott’s Big Truck Sales and Don’s Big Truck 

Sales, AFC had to prove the existence of the notes, that the defendants signed them, 

that AFC was the legal owner and holder of the notes, and that a certain balance was 

due and owing on the notes. See Rockwall Commons, 331 S.W.3d at 505. To support a 
22

claim for breach of the guaranty agreements, AFC had to prove the existence,

ownership, and terms of the guaranty contracts; that the guarantors’ liability was 

established under the contracts’ terms; and the guarantors’ failure or refusal to 

perform. Chahadeh v. Jacinto Med. Grp., P.A., 519 S.W.3d 242, 246 (Tex. App.—

Houston [1st Dist.] 2017, no pet.). Indiana law is consistent; the failure to pay

amounts due under a guaranty agreement is a breach of contract. See Keesling v. T.E.K. 

Partners, LLC, 861 N.E.2d 1246, 1251 (Ind. Ct. App. 2007); Estate of Hofgesang v. 

Hansford, 714 N.E.2d 1213, 1217 (Ind. Ct. App. 1999). To prove a breach of contract, 

a plaintiff must prove (1) the existence of a contract, (2) the defendant’s breach, and 

(3) damages. McKeighen v. Davies Cty. Fair Bd., 918 N.E.2d 717, 721 (Ind. Ct. App.

2009).

Here, AFC attached as summary-judgment evidence the signed notes and loan 

term sheets for Scott’s Big Truck Sales and Don’s Big Truck Sales, as well as the 

guaranty agreements signed by Donald and Johnny. The guaranty agreements 

obligate the guarantor to pay all amounts due under the notes. AFC also presented

Bosl’s affidavit, in which he averred that Scott’s Big Truck Sales and Don’s Big Truck 

Sales had failed to make all required payments under the notes and that all amounts 

due under both notes had been accelerated; that Scott’s Big Truck Sales owed AFC 

$104,656.61, which included the $4,414.36 for the 2007 Lexus, under its notes; and 

that Don’s Big Truck Sales owed AFC $45,987.43, which included the $11,400 for the 

2013 Altima, under its note. Additionally, AFC attached to Bosl’s affidavit several 
23

“Dealer Payoff” reports that listed those same amounts due. The Scotts did not 

provide any controverting evidence in their response to the motion for summary 

judgment. 

Because AFC presented uncontroverted evidence that it was entitled to enforce 

the notes, that the Scotts had failed to pay the accelerated amounts due under the 

notes as guaranteed, and the exact amounts due, we hold that the trial court properly

granted summary judgment for AFC on its breach-of-contract claim regarding the 

notes and guaranty agreements. We therefore overrule this part of the Scotts’ second 

issue.

V. ATTORNEY’S FEES

The Scotts bring two complaints related to the attorney’s fees assessed: that 

there is no evidence to support the imposition of appellate attorney’s fees and that if 

we reverse any part of the summary judgment, we must remand to the trial court for a 

recalculation of attorney’s fees. We need not address the Scotts’ appellate attorney’sfees complaint because AFC argued that it was entitled to attorney’s fees based on 

contractual provisions in the notes and guaranty agreements, as well as the Indiana 

Code. Ind. Code § 34-24-3-1, § 1(3). Its attorney’s affidavit did not distinguish fees 

among the claims and parties and neither did the trial court’s judgment. Because we

are reversing the summary judgment on the statutory causes of action as to Donald 

and Johnny, we also reverse the attorney’s fees award. See Reed v. Lake Country Prop. 
24

Owners Ass’n, Inc., No. 02-14-00282-CV, 2016 WL 3655589, at *9 (Tex. App.—Fort 

Worth July 7, 2016, no pet.) (mem. op.).

VI. CONCLUSION

Having overruled the Scotts’ first issue and their second issue in part, we affirm 

the trial court’s judgment awarding damages for breach of contract and breach of 

guaranty to AFC. We also affirm the trial court’s judgment awarding additional 

damages to AFC from Scott’s Big Truck Sales and Don’s Big Truck Sales under 

Indiana Code Section 34-24-3-1. But having sustained part of the Scotts’ second issue

as to the award of $8,828.72 in additional damages from Donald Scott and the award 

of $22,800 from Johnny Scott under Indiana Code Section 34-24-3-1, we reverse that 

part of the trial court’s summary judgment.

13

 Because we reverse part of the trial 

court’s summary judgment, we additionally reverse the trial court’s attorney’s fees 

award. We remand this case to the trial court for further proceedings on AFC’s claim 

for additional damages from Donald and Johnny Scott and its attorney’s fees request.

/s/ Lee Gabriel

Lee Gabriel

Justice

Delivered: December 17, 2020

13Donald and Johnny did not file their own summary-judgment motion as to 

these claims; therefore, we cannot render judgment for them. See Dyegard Land P’ship

v. Hoover, 39 S.W.3d 300, 315 (Tex. App.––Fort Worth 2001, no pet.).