## In the Court of Appeals Second Appellate District of Texas

at Fort Worth

___________________________ No. 02

- 19

- 00304

- CV

___________________________

On Appeal from the 96th District Cou rt Tarrant County, T exas Tri al Court No. 096

- 291366

- 17
Before Gab r

iel, Wom ack, and Wallach, JJ. 

### M EMORANDUM 

### O PINION BY 

### J USTICE 

### G ABRIEL 

### J USTICE 

### W OMACK C ONCU R S WITHOUT O PINION 

### . S COTT 

### ’ S 

### B IG 

### T RUCK 

### S ALES 

### , LLC; D ON 

### ’ S 

### B IG 

### T RUCK 

### S ALES 

### , LLC; D ONALD 

### R. S COTT 

### ; AND 

### J O HNNY 

### A. S COTT 

### , Appel lants
V 

### . A UTOMOTIVE 

### F INANCE 

### C ORPORATION 

### , A PP E LLEE2 MEMORANDUM OPINION This appeal is from a final jud gment awarding damages and attorney ’ s fees to app ellee and lender Auto moti ve Fi nance Corpo ration ( AFC ) in its suit to collect a debt from appe l lant s an d borrowers Sc ott ’ s Big Truck Sales, LLC, a nd Don ’ s Big Truck Sales, LLC and from appellants and guarantors D onald R. Scott and Johnny A. Scott

. The tria l court ’ s final ju dgm ent incorporated and was ba sed on its partia l

summa ry judgm ent for AFC on its br each

- of

- contract , br each

- of

- guaranty, and Indiana statutory claim s for fraud and de c eption
. We affirm in part and reverse and remand in part . I. BACKG ROU ND Scott ’s Bi g Truck Sales and Don ’ s B i g Truck Sales signed notes 1 wit h AFC under a floorplan

- len ding arrangement , in which the l ender provides financing to an auto deal ers hip on a vehicle

- by

- vehicle basis so that the deal ership can buy inve nt ory . The d e aler is obligated t o repay the lender whe n the dealer sells th e particular vehicle that had been financed

. In con junction with the n o t es, Donald Scott si gned a guar anty of payment for amounts due on the Scott ’ s Big Truck S al es note , and Johnny Scott signe d a guar anty of payment for amounts due o n the Don ’ s Big Truc k Sales
note . Donald was a member of Scott ’ s Big Truck Sales and Johnny a membe r of Don ’ s Big Truck Sales.

1 Scott ’ s Big Truck Sales sign ed two n otes, and Do n ’ s Big Truck Sales s ig ned one.3

AFC eventu ally sued Scott ’ s Big Truck Sales, Do n ’ s Big Truck Sales, Donald, and John ny ( all four , collectively, the Scotts ) t o recover amoun ts it claimed were due on the notes and guaranty agreements . As part of the suit, A FC attempted to recover via sequestration four vehicles th at ha d been sold but for which the Scotts had not remitted payment to AFC

. AFC recovered tw o of th e vehicles an d credited the accounts accordingly

. B ut it was not able to recover two others. As to those v ehicles , AFC sought statut ory civil d amages for fraud and deception under Indiana law

. After AFC moved f

or summary judgment on its claims, the Sc ot t s filed a plea
to t he jurisdiction challenging AFC ’ s standing to sue t hem. AFC filed a response and attached e vidence. T h e Scotts objected to a portion of AFC ’ s summary
- judgment evidence , but the trial court ov errule d all o f the ir objections

. T h e tri al court did not sign a written order on the plea to the jurisdiction at the time , but it did gra nt AFC parti al summary judgment on all of its claims except its re quest for attorney ’ s fees. 2 A FC then filed a secon d summary

- judgme nt mo tion as to attorney ’ s fees , and the Sc otts filed a mo tion asking the trial court to reconsider its part ial summa ry judgment ruling and the jurisdictional issue
. The trial co urt granted AFC s ummary judgment on its attorney ’ s fees reque st, denied the Scott s ’ motion to reconsid er, and

2 AFC had initiall y sought summary judgment on its attorney ’ s - fees request, but it withdrew that part of it s motion in light of t he Texas Supreme Court ’ s opinion in Ro hrmoos Venture v. UTSW DVA Healthcare, LLP , 578 S.W.3d 4 69, 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 j udgment inco rpor ating the par tial summary judgment an d awarding AFC attorney ’ s fees. The Scotts appeal

.

I I. ST AN D ING TO ENFOR CE NOTE S In their first issu e, the S cott s argue that AFC d i d n ot prove its standing to maintain a suit aga inst the m based on the debt. They base their argument primarily on the loan

- related documents attached to AFC ’ s pleadings and incorpor ate d into those p leadings by reference ; all of those docume nts state , at the bottom of each page,

“ This receivable h as been sold to AFC Fund ing Corporation and a n interest therein has been gra nted to [eit her BMO Capital Markets C orp. or Bank of Mo ntreal ] a s

a gent. ” T h e Scott s contend that this statement i s a judicial admission tha t when AFC filed s uit, it n o lo nger had a n y i ntere st in the notes it sought to enforce and, therefore, that AFC ple d facts n egat ing i ts standing

. See Rock well Commons Assocs., Ltd. v. MRC Mtg. Grantor Trust I

, 331 S.W.3d 500, 505 (Tex. App.

–– El Pas o 2010, no pet. ) (noting
t h at elem ent of suit to recover on promissory note is that plaintiff is legal owne r and hol de r o f note)
. Th e Scotts raised this i ssue i n their plea to t h e jurisdiction and also i n their response to AFC ’ s summary
- judgmen t motion. 3 AFC ar gued in its motion for summary j udgment that it was the appropriate party to enforce the contracts.

3 I n accordanc e with t he Scot ts ’ brie fing , we review t his issu e i n the contex t of the trial court ’ s r u ling on the plea to the jurisdiction . A lthough t he trial court did not initially ren der an or der on the plea to the jurisdiction, it expressly denied it by den ying the Scot ts ’ motion to reco nsider , in which they had as ked the trial court to dismiss AFC ’ s “ case for want of jurisdiction

. ” Cf. Bass v. Wall er Cty. Sub

- Reg ’

l Planning Comm ’ n , 514 S.W.3 d 908, 912 (Tex. App.

–– Austin 201 7, n o pet.) ( declining to5 A. S TAND ARD OF R EVIEW We review de novo a trial court ’ s ruling on ju risdictio n . See Tex. Dep ’ t of Parks & Wildlife v. Miranda , 133 S.W.3d 2 17, 228 (Tex. 2004) (op. on reh ’ g) ; Tex. Ass ’ n of Bus

. v. Tex. Air Control Bd. , 8 52 S.W.2d 440, 44 3 ( Te x. 1993) (ho lding that lack of standing defeats a trial court ’ s subject

- matter jur isdiction )
. A plaintiff must plead facts that affirmatively show trial

- c ourt jur isd iction. Tex. Ass ’ n of Bus. , 8 52 S.W.2d a t 446
. We construe the pleadings liberally in t he plainti ff ’ s favor, accept all factual allegations as true, and look to the plainti ff ’ s inte nt. Heckman v. Williams on Cty. , 369 S.W.3d 137, 150 (Tex. 2012 ). We c on sider relevant evidence of jurisdictional facts when neces sary to resolve the jurisd ictio na l issues raised taking as true all evidence favorable to the nonmovant, indulging e very reas ona ble in fe rence , and re solving any doubts in the
nonmovant ’ s fa vor. Mi

r anda , 133 S.W.3d at 227

– 28. If the evide nce creates a fact question regarding the ju risd ic tional i ssue, then the trial court cannot grant the plea to the jurisdiction, and t he fact i ssu e will be r esolved by the factfinder. Id. But if the releva nt evide n ce is undisputed or fails to raise a fact question on the jurisdictional issue, the t rial c ourt rul es on the plea to the jurisdiction as a matter of law. Id. at 228.

conside r trial co ur t ’ s lack o f rulin g on jurisdictional plea in co nte xt of interl ocutory appeal from p artial summary j u dgment ). But even if we were to review the standing issue s olely in the context o f the trial court ’ s partial

- summary
- judgment ruling , our holdi ng would be the same.6 B. A NA LYSIS T he no te s and g uarant y agreement s provide that the documents are to be

cons trued according to Indiana law. 4 Both In diana and T ex as law provi d e th at a note may be enforced by a n owner and holder

. See Ind. C ode § § 26

- 1

- 1

- 201(20)(A), 26

- 1

- 3.1

- 301 ; Tex . Bus. & Com. Code A nn. § 3.301 ; Collins v. HSBC Bank USA, Nat ’ l Ass ’ n , 974 N.E.2 d 537, 54 0

– 41 (Ind. Ct. App. 2012); c f. Manley v. Wachov i

a Small Bus. Capital

, 349 S.W.3d 233, 240 (Tex. App.

— Dallas 2011, pet. deni ed) ( “ The ow ner of a note may enforce the note even if he is not a holder. ” )
. A holder is a person w ho possesses a nego tiab le instrument payable to an identifi ed person w he n th e on e in possession is the person identified in the note

. Pichon v. Am. Herita ge Ba nco, In c. , 983 N. E.2 d 589, 599 (Ind. Ct. App. 2013) (c iting Ind. Code § 26

- 1

- 1

- 201(20)) , trans. denied ; Haley v. Benefi

cial Fin. I Inc. , No. 13

- 18

- 00058

- CV , 2019 WL 27090 15, at *4 ( Te x. App.

— Corpus Christi

– Edi nburg June 28, 2019, no pet.) (mem. op.)
. Accordi ng to the Scott s , the form la nguage on the notes stating that “ [ t ] h is receivable has been sol d ” proves conclusively t hat AFC has no right to enforce them

.

4 W hen pa rt

ies have contractually cho sen the law of another state to gove rn disputes, matters of rem edy and p rocedure are still governed by Texas law in Texas cou rts . Bayer Corp. v. DX Terminals, Ltd. , 214 S.W.3d 586, 594 n.3 (Tex. A pp.
— Houston [14t h Dist.] 2006, pe t. denied) . Additionally, even if the pa rtie s had disputed wh ich state ’ s law applies, we wo uld no t need to e ngage in a choice

- of

- l aw analysis here , ex cept as to th e Indiana statutory la w, be cause Te xas law regarding the no tes and guarant y agreements is co nsistent with In diana law. See In re Wells Fargo Bank Minn

. N .A. , 115 S.W.3d 600, 6 06 ( Tex. App.

— Houston [14th Dist.] 2003, orig. proceeding [ mand. denied ] )
.7

The Scotts als o point to legend s p rinted o n a report attac hed as e vidence to AFC ’ s motion for partial summary judgmen t for the ir argument ’ s support : THE RECEIVABLES DESCRIBED HEREIN HA VE BEEN SOLD TO AFC FUNDING CORPO RA TION PURSUANT TO AN AMENDED AND RE STATED PURCHASE AND SALE AGREEMEN T, D ATED AS OF MAY 31, 2002 BETWEEN AUTOMOTIVE FINANCE CORPORATION AND AFC FUNDING CORP ORATION, AS AMENDED; AND AN INTEREST IN THE REC EIVABLES DESCRIBED H EREIN HAS BEEN GRANTED TO THE AGE NT FOR THE BENEFIT OF THE SECURED PA RTIES, PURSUANT TO A SEV ENTH AMEN DE D AND REST ATED RECEIVABLES PURCHASE AGREEMENT, DATED AS OF DECEMBER 20, 2016 AMONG AF C FUNDING CO RPORATION, AS SELLER, AUTOMOTIVE FI NANCE CORPORATION, A S SERVICER, FAIRWAY FINANCE COMPA NY , LLC AND SUCH OTHER ENTITIES FROM TIME TO TIME AS MAY BEC OME PURCH AS ER S THEREU NDER, BANK OF MONTREAL, AS AGENT, BMO CAPITAL MARKETS CORP. AS PURCHASER AG ENT FOR F AIR WAY FINANCE COMPANY, LLC, AND THE P URCHASER AGENTS FO R SUCH OTHER PURCHASERS THEREUNDER, A S AMENDED. [ 5 ] But AFC c ontend s th at it sold only t he righ t t o pa yment un der the notes and that it re tains a n ownership interest in the lo an docume nts . 6 AFC attached to its response to the Scott s ’ plea to the jurisdiction two affidavits fro m Dwayne Pric e : 7 one

5 The rep ort als o contai ns a similar legend as to “ CANAD IAN RECEIVABLE S. ”

6 AFC als o argued in its response to the S cott s ’ plea to the jurisdiction that it s st atus as se rvicer of the “ receivables ” gave it standing

. But we need not address that alternat ive ground for standing. See Tex. R. Ap p. P. 47.1.

7 On appeal, t

he Scott s complain that the affid avits we re uns worn and that one of them did not suff

icientl y aut henticate the attached pool

- rece ivables s ales agreement . But the Scotts did not complain abou t these form defects in the trial8

as its assistant treas ure r a nd the other as the assi stant treasurer of AF C Fundi ng Corporation (Funding)

. Price averred that AFC created F unding as a who lly owned subsidiary “ solely for the purpose of purchasing fi nance receivables from AFC and

se lling undivi d ed part

icipation int ere sts in the pool of finan ce receivab les, referred to

as a secur itization po ol , to a b a nk [

- ] conduit facility on a revolving basis. ” According
t o Pr ice, “ AFC does not sell, and F und i ng does not p urchase, the underl ying loa n
contra cts between AFC and the used vehicle dealers who are its c ustomers. ” Pr ice

averr ed that AFC made lo ans to the tw o dealership s –– Scott ’ s Big Truck Sales and D on ’ s Big Truck Sales

–– “ and [then] s ol d t he rights to payment thereunder (the

‘ Receiv ab les ’ ) into F unding ’ s securitization pool. ” AFC is the servicer f or the pool and is responsi ble for coll ecting all t he pool recei vables. AFC also attached as evidence the “ Receivables Purchase A greement ” signed by Funding as “ Seller, ” A FC as “ Servicer, ” and B ank of Montr eal as the agent for

sev en nam e d purchasers

. Un der that agreement , each purchaser would p eriodically

“ purchase and make reinvestm ents of ” defined per centages of “ Pool Receivables

. ” A

“ Pool Receivable ” is defined a s “ a Receivable conveyed to t he S eller pur sua nt to the

court ; ther efore, th ey did not preserve that part of their c o mpl aint for app eal

. See Seim v. Allstate Tex. L loyds

, 551 S.W.3d 1 61, 166 (Tex. 2018) (per curiam); Cty. of El Paso v. Baker , 579 S. W.3d 686, 694 (Tex. App.

–– El Paso 20 19 , no pe t. ) ; see al so Mansions in the For est, L.P. v. Montgomery Cty. , 365 S.W. 3d 314, 31 7 (Tex. 2012 ) (per curi am) ; Haase v. Abraham, Watkin s, Nichols, Sorrels, Agosto & Friend, L.L.P. , 499 S.W.3d 169, 17 5, 17 8 (Tex. App.

— Houston [14th Dist.] 201 6, pet. denied)

.9

Purchase a nd Sale Agr eement and no t reconveyed to the Originator [ 8 ] in accordance with the terms of the Purchase and S a le A gr eement. ” “ Receivable ” is defined as any right to payment from any Person , whether constituting an accou n t, chattel pap er, in strume nt, p aymen t i ntangible or a genera l intangible, ar ising fro m the providing of financing and other services by the Originator . . . to (i) new , used and whol esale autom obile, light truck or other Special ty Vehicle dealers

. . . an d include s the right to payment of an y interest or finance ch arges and other obligations of such Person with respect thereto. [Emphasis added.] A FC ’ s evidence shows tha t its arrangement with F u nding involved selling only its right to payme nt under th e no tes it entered into with Scott ’ s Big Truc k Sales and Don ’ s B ig Truck Sales ; AFC did not divest itself of its e ntire interest i n the notes an d gua r a nt y agreements . Moreo ver, under the Funding Receiv ables Purcha s e A greemen t , Fundin g did not transfer al l o f its payment rights to a particular p urchaser ; inst ead, it

so ld the purchaser s percentage interest s according to a form ula. The language the Scotts contend is proo f that AFC has no interest in the n otes was required by th e Receivables Purchase Agreement. The use of the word “ r eceivable ” is consiste nt w ith the defini tion in th e Funding Re ceivable s Purc hase A greement and , in the context of
t hat agree ment , is n ot conclusiv e proof t hat AFC dive sted itself o f all o wnership inter est in the note s and guarant y agr eements .

8 O riginator i s defined in a separ ate ag reement not inclu ded as j urisdict ional e vidence.10

Moreover, as servicer of th e recei v ab les, AFC was required to “ hold for the benefit of the Secured Parties in accordance with the ir respec tive interests, all r ecords and do cuments (including without limitation computer tapes or disks) with respect to each Pool Receivable

. ” In the affidavit a ttached to AFC ’ s su m mary
- ju dgment motion, its Senior Corporate Investig ato r Jerome Bo sl a ver red that the attached not es

we re “ records held by AFC. ” [Empha sis added.] Thus, the jurisdictional evidence showed t hat AFC posse sse d the Scott ’ s Big Tru ck S ales and Don ’ s Big Truck Sale s notes made payabl e to it and that i t still r etained an ow n ership i nter est in those note s, having sold only the right to payment there under

. 9 The Scotts analogize thi s case to Shipley v . U nifund C CR Pa rtners , 331 S.W.3d 27 , 29 (T ex . App.

–

– W a co 2010 , no pe t. ) (op. on reh ’ g) , and argue that it co mm ands a differen t res u l t . In Shipley , the original lender on a credit

- c ard account had sol d the
account ; the new owner had as signed only the rig ht to coll ect the debt to Un ifund CCR Pa rtners but ha d ret ained title to the account. Id. at 28
. Unifund CCR Partners then file d su

it to c o llect the debt. Id. The Waco Cour t of Appe als held that Unifund CCR Partners failed to show it s standing to sue t o collect the d ebt because the owner of the de bt had not assigned any owner ship inte rest to U nifund. Id. at 2 9

– 30. He re, however, t he evid e nce shows that AFC sold the receivables

–– the right to payment s

9 Even if, as the Scotts con tend, the stam ped language on the notes

–– attached to and incorp orated into A F C ’s pleadings

–– co n stitute s a judicia l admissi on , that factual admission is not contrary to , and does not disp rove, AFC ’s ev ide nce that it rem ains the o wner of the notes except as to the right o f payment.11

o n the notes

–– to Fund ing but retai ned ownership and possession of the notes. Therefore, th e facts in thi s case are distin guishable fr om the facts in Shipley

. We h old that the trial cour t did n o t err by determining that AFC did not plead facts negating its jurisdiction and therefore had standing to s ue th e Scotts to c ollect the debt

. We ove rrule the S cott s ’ first i ssue. II I . OBJECTI ONS TO SUMMARY
- JUDGMENT EVID ENCE We next turn to t he remainder of the Scotts ’ sum mary
- judgment issues. In part

o f their second issue, the Scott s argue that the trial court err ed by ov erruling their

o bjections to Bo s l ’ s a ffidavi t . W e review the tri al court ’ s order overruling the Scotts ’ objections for an abuse of discretion. S e e S t arwood Mgmt., LLC v. Swaim , 530 S.W.3d 673 , 678 (Tex. 2017) (per curiam).

A. B O S L ’ S P ERSONAL K NO WLEDGE Bosl st at ed in his affidavit t hat h e h ad personal knowledge o f the facts there in base d on “ the per formance of [his] d u ti es ” as AFC ’ s S enior Corporate Investigator ; he also stated t hat he was t he custodian of “ Defi ciency Accounting R eco rds ” for A F C and that the r eco rds referenced in an d attac h e d to the affidavit were kept and made in the regular cour se of AFC ’ s busi ness. The Sco tts objected that Bosl never state d how he ca me to acq uire personal knowledge of the rec ords; the refore, h i s averment th at he h ad personal knowl edge of the records ’ con tents is “ conclusory, ba sed on hearsay and speculation, [and

] with ou t foundation

. ”12

Bos l ’ s explanation of his employment with AFC and his s tatus a s a records custodian f

or this part i c ular account was su ffi cien t to show h is personal knowledge of the trans action. 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, pe t. denied) ( mem. op.) ; Energico Prod., I

nc. v. Fro st Nat ’

l Bank , No. 02

- 1 1

- 00148

- CV, 20 12 WL 254093, at * 6 (Tex. App.

–– Fort W orth Jan. 26, 2012, pets . denied) (mem. op.). Therefo re, t he trial court did not ab use its discretion by overruling this objec tion
.

B. C LAIMS - S PECIFIC S TATEMENTS The Sc otts challeng e sever al of Bos l ’ s other s tatements . T he y first challenge Bosl ’ s averm ent th a t “ AFC has accele rated maturity of [ the] Not e [ s ] ” as lacking foundat ion and as being conclusory. The note s attached as sum mary
- judgme nt evidence s tate that in the event of a default, A FC could decl a re th e entire unpaid

a mount of the note due and ow ing without notice or d e mand. T h erefore, Bosl ’ s
statement

–– as custodian of the ac coun ts ’ records

–– is a factual st ateme nt that i s based on hi s knowledge of the loan records a n d is not conclusory or without found ation
. See Tha nphirom v. Wells Far go Bank, N

.A. , No. 07

- 20

- 00034

- CV, 2020 WL 3957832, at *3

– 4 (Tex. App.

––

Amari llo July 10, 20 20, n o pet.) ( mem. op.) (per curiam) ; Gandara v. JP Morgan Chase Bank , No. 01

- 03

- 00 926

- CV, 2 005 WL 615628, at *3 (Tex. App.

— Houst on [1st Dist.] Mar. 17, 2005, no pet.) (mem. op. )
. T h e trial court d id not abuse it s discretion by overruling this objectio n.13

Th e Scotts also argue that Bosl ’ s statement t hat “ [a] ll co nditions precedent to AFC ’ s right to rec o ver judgm ent . . . [h] ave bee n p erformed or have occurred [] and all notice s require d h ave been giv en or have be en waived ” lacks foundation and is specu la tive a nd conclusory. Eve n if the tr ial court sho uld have granted the Scotts ’ objections a s to this statement , it was no t necessary for AFC to prove its claims because although the Scotts complained ge nerally in their answer that all con dition s precedent had not occurred, they did n ot deny t h at any speci fic condition pr ec edent had occurred. Thus, AFC w as no t r equired to prove th at it performed all requi red conditions precedent t o recover on its claims. See Tex. R. Civ. P. 54; Madhavan A. Pisharodi, M.D., P. A. v. United Biolo gics, L.L.C. , No. 04

- 18

- 00324

- CV, 2020 WL 1443561, at *3 (Tex. App.

— San Antonio Mar. 25, 2020, pet s . denied) (me m. op.) ; see also Affordable Motor Co., Inc. v. LNA, LLC , 351 S.W.3d 5 15, 520 (Tex. App.

— Dallas 2011, pet. denied) ( “ To prevail on its mot ion for summary judg ment to enforce the promissory note, LNA was requi red to pro ve that (1) the note exists, (2) LNA i s 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 not e. ” ). According ly, we need n ot decid e whether the trial court abused its discretion by overruling t his objection. S ee Tex. R. App. P. 47.1.14

The Scotts also complain about st atements in Bosl ’ s aff idavit that relate to the frau d

- and

- d eception cause s of actio n 10 under Indi ana l aw. Specifically, they comp lain about the follo wing parag r a ph : Defen dants misapplied the pro ceeds of the sale of a motor vehicle, which w ere Purchase Money Invent ory and held in Trust, by failing to make payment to AFC from said proceeds as provided in th e Note. By misa pplying entrusted prope rty and p roperty of a credit i nstitution in a manner t hat Defendants kn ew was unlawful and knew inv olved substa ntial risk of loss or detr iment to AFC

, Defendants committed criminal dece p tion, as that term is defined b y Indiana Code § 35

- 43

- 5

- 3

- 1
. Furtherm ore, by t ransferring the proce eds of the sales in dero gation of the No te with the intent to defraud Plaintiff, Defendants co mmitted crim inal fraud, as that term is defined by Indiana C o d e § 35

- 43

- 5

- 4 (8). [Emphasis a dded.] This s tatement is co nclusory ; it asse rts a legal c onclusion without stating any speci fic facts upon which it relies

. Indiana C ode Section 35

- 43

- 5

- 3 pr ovid es, in part : A person who

. . . misapplies entruste d property

. . . or property of a credit institution in a manner that the pers on know s is unlawful or that t he person knows involves su bstantial risk of loss or detriment to either the owner of the pr opert y or to a pe rson for whose benefit the property was entrusted

. . . commits [th e Class A mis demeanor of] deception.

10 Althou gh Indiana law descri bes fraud and decep tion as cri min al of fense s , s ee Ind. Code §§ 35

- 43

- 3

- 1, 35

- 43

- 5

- 4(8), it e xpressly allows a person to recov er civil damages f or a violation of ei ther of thos e provisions, s ee id. § 34

- 24

- 3

- 1
. See also Ecker v . Rochester Ford New Holland, Inc. , 694 N.E.2d 2 89, 291 (Ind. Ct. App. 1 998) (pro viding that to recover for civil damages , plaintiff mus t prove commissi on of statutorily defined decept ion or f

raud by a prep onde rance of evidence )
. AFC asked the trial court to take ju dicial notice of these provisions of Indiana law in its motio n s for su mmary judgment. The t rial cou rt did not expressly rule on this request , but it referenced Secti on 34

- 24

- 3

- 1 in its partial summary judgment and in its final judgm ent .15

Ind. Code § 35

- 43

- 5

- 3. In diana C ode Section 35

- 43

- 5

- 4(8) provides th at a person

com mits fraud if, “ with intent to defraud the person ’ s cre ditor or purchaser, [th e person] conceals, encum ber s, or transfe rs property . ” Id. § 35

- 43

- 5

- 4(8). Bosl di d n ot inc lude any facts in his affidavit releva nt to the Scotts ’ intent in f a il ing to pay or showing that they knew their a c tions were unlaw ful ; inst ead, he

m erely presented facts showing that they di d not timely remit pr oceeds from sold vehicles , and th en he resta ted the elements of the two causes of action un der Indiana law

. L ik ew ise, Bosl d id not state what the Scotts did w ith the s ales proc e eds ot her than failing to t imely remit them to the lender

. He simply concludes that they committed statutory deception an d fraud unde r Indiana law without expl aining wh y. See Anderson v. S ni

der , 808 S .W .2d 54, 55 (Tex. 1991) (per curia m ) ( op. on reh ’ g ) ( holdin g that attorney ’ s expert opinion that he did not co mmit malpract ice , violate the DTPA, or breach a contr act was conc lusory because it did not explain its legal bas is or reasoning for t he opinion) ; s ee also Auto

. Fin. Corp. v. Kan

. Motor Co. , No. 1:05

- cv 0 16 14

- R LY

- WTL , 2006 WL 1455553, at *3 ( S.D. Ind. May 22 , 2 006 ) (hold ing that AFC w as not entitled to summary judg ment against note guarantors , pursuant to a sim ilar floorplan

- financ ing arr angem ent , under civil

- damages provision of In dian a Code f or criminal fra ud and dece ption whe re AFC provided onl y g eneral assertions and no facts in support and n oting, “ Nor wou ld it be e asy for it to do so in light of the i ntent and knowle dge r equirements to establish deception an d fraud ” ).16

The Scot ts object ed to two other st atements in Bosl ’ s affidavit related to th e deception

- and

- fraud c laims : Bosl ’ s averments setting forth th e amou nts of AFC ’ s

“ actual damages f

rom the d eception and fraud of ” Scott ’ s Big Truck Sales and Don ’ s Big Truck Sale s and op ining that AFC “ is entitled to recover from ” the Scotts “ three (3) ti mes [

AFC ’ s] actual dam ages from such vi olati ons, together with att orney ’ s fe es, interest, and other costs of collection set out t herein. ” The se statement s are likewise

con cl usory . See A nderson , 808 S.W.2d a t 55. Thus, we sustain this par t of the Scotts ’

secon d issue and do not consider Bos l ’ s conclusory statem ents in our review of the pr opriety o f the trial court ’ s s ummary judgment

.

I V . PROP R IETY OF SUMMARY JUDGME NT A lso in part of th eir second issue , the Scott s challenge the trial cour t ’ s sum mary judgment f

or AFC on its breach

- of

- contract and fraud

- and

- decepti on causes of action. 11

11 Alth ou gh most of the Scott s ’ argument as to the propriety of summary judgment on th e m erits re sta te s their standing complaint , the y also claim

–– with a bare minimum o f argument

–– that AFC presented no credible evid ence of d efault or actual damages an d that AFC “ never presented any e vidence that would rise to the level of fra ud, deception, or any other c riminal conduct

. ” Because the Scotts make at least some argument challengi ng each g round on whi ch the su mmary judgment was based , we address their com plaints

. Se e Tex. R. App. P. 38.1(f); Ganter v. Indep. B ank , No. 05

- 15

- 00413

- CV, 2016 WL 4376284, at *7 (Tex. App.

— Dal l as Aug. 16, 2016, pet. denied) (mem. op.) ( “ Although the nonmovant ma y assert in a g eneral appellate issue that the summary judgment was erroneous, it must also support that issue with argument challenging all possible gro unds on which the summary judgmen t could have been granted or a reviewing court will affirm the summary judgment. ” )
.17 A . S TANDARD OF R E VIEW We review a summary judgme nt de no vo. Travelers Ins. v. Joachim , 315 S.W.3d 86 0, 862 (Tex. 2010). We con sider the evidence presented in the light most favorable to the nonmovant, crediting evidence favo rable to the nonmova nt i f reas onable jurors could and disregarding evidence co ntrary t o the nonmovant unless reasonable jurors

c oul d not. Mann Frankfort Stei n & Lipp Advisors, Inc. v. Field ing , 289 S .W.3d 844, 848 (Tex. 2009). We indulge every reasonable inferenc e and resol ve a ny dou bts in the nonmovant’s favor. 20801, Inc. v. Pa rker , 24 9 S.W .3d 392, 399 (Tex. 2008). A plaintif f i s entitled to summary judgm ent on a cause of action if it c onclusivel y 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. C RIMIN AL D E CEPTION AND F RAUD U NDER I NDIANA L AW The trial court found that AFC was enti tled to judgment from t he Scotts under Indiana Cod e Section 34

- 24

- 3

- 1 : $8,828.72 fro m Scott ’ s Big Truck Sal es a nd Donald Scott and $ 22,800.00 from Don ’ s B ig Truck Sales and Jo hnny Scott

. The trial court ’ s judgment did n ot specif

y whether it had f

ound that AFC proved its entitlement to damages for fraud, d eception, or both. Un der the Indiana Crim e Victims Compensation Ac t (CVCA), a pl aintiff can

recover civil damages for a vi olation of either th e fraud or deception stat ute , in addition to certain other offenses, on proof by a prepond erance of the evidence. Ind. Code §§ 34

- 24

- 3

- 1 , 35

- 43

- 3

- 1, 3 5

- 43

- 5

- 4(8) ; Klinker v. Fi rst Mer chants Ban k

, N.A. ,18

964 N.E.2d 190, 19 3 ( Ind. 2012) ; see Heckler & Koc h, Inc. v. German Sport Gun s Gmb H , 976 F. Su pp. 2d 1020 , 1035 (S. D. Ind. 20 1 3 ) (order)

. Becaus e the C VC A is punitive in nature and must b e strictly const rued , it cannot be enlarged by constructi on, implication, or intendment beyond the fa ir meaning of the languag e used. Flaher ty & Collins, Inc. v. BBR

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

. T o establish a viabl e claim for civil damages under Section 34

- 24

- 3

- 1 , a plaintiff must show , in addition to statuto ry fraud or deception , that the v iolation

cau sed the pl a intiff

’ s loss

. In d. Code § 34

- 24

- 3

- 1; Flah erty & Collins , 990 N.E.2d at 96 8
. The m ens rea requirement of the unde rlying cr iminal actions (i.e., fraud or deception) differentiates those acts from the more innocent breach of contra c t , wh ich the criminal s tatutes were not intended to rea ch. Flah erty & Collins , 990 N.E.2d at 96 8
. The notes , which AFC attached as s ummary
- judgme nt proof , provided in Section 2.6 , Dealer shall pay to L ENDER at the offices of LENDER the Obligations, on demand and with out notice, and in any ev ent, w ith respect to an item of Purchase Money Inven tory on the earliest of: (a) LENDER ’ s demand [;] (b ) forty

- e ight (48) hours after the dis position by sale or otherwi se of an ite m of Pu rchase Money Inventory ; or (c) the Curtailment Date. All proceeds of any such di sposition s hall be received by Dealer in tr ust for LENDER and forwarded promptly to LEND ER as noted belo w. The not es further provided that when any P u rchase Money Inve ntory i tem was sold, th e debto r would “ hold the amount rec eived from t he disposit ion of inventory in19

trust for the benefit of LENDE R and

. . . pay promptly to LENDER, in accord anc e with Section 2.6 , an amount equal to the unpaid balance of the Purchase Mon ey Inve n t ory Obligations and any other Obligations rel atin g to such Pu rchase Mone y Inventory. ” Bosl averred that Scott ’ s Big T ru ck Sales had sol d “ $4,41 4.36 w o rt h of vehicles

. . . out of trust ” and that Don ’ s Big T r uck Sales had sold “ $1 1,400.00 worth of vehi cles

. . . out of trust. ” He also ave rr ed that the dealerships had “ failed to pay AFC the proceeds from the following vehicle[s] ” ; specif ically, h e sta ted t hat D on ’ s Big T r uck S a les had sold and failed to remit payment for a 2013 Nissan Altima for a total of $11,400.00 and that S cott ’ s B i g T r uck Sales had sold and failed to remit payment for a 2007 L e xus ES 350 for a total of $4,414 .36. Other tha n this unobjected

- to affidavit evidence and the conclusory statement in Bosl ’ s affidavit, which we do not cons ider, AFC prov ided no evid ence that a ny of the Sc otts specifically intended to cause AFC injury or l oss by fai ling to remit pa ymen t for the two so ld vehicles

. Th us, the trial court erred by granting summary judgm ent to AFC under Indiana Code Section 34

- 24

- 3

- 1 if based on a finding that the S cott s

comm itted criminal fraud under In diana law

. See Klinker , 964 N.E.2d at 193 , 195 ( holding th at “ s ummary j udg ment [for civil damages for criminal fraud] is proper only if the undisputed facts show that, when [the d ef endant] made the challenged tr ansfers, h is c o nscious objective was to cause i njury or loss to [lender] by deceit ” and that20

“ summary j udgm ent is al mos t never appropriate where the claim requires a show ing that the defendant acted with criminal intent or f raudulent intent ” )
. As t o the criminal

- de c epti o n stat ute, t he most AFC showed v ia it s summary
jud gment pro of is that Scott ’ s Big Truck Sale s and Don ’ s Big Truck Sales

–– as makers of the notes

–– knew that the notes oblig ate d them to hold the proceeds of any a uto sales in tru st for AFC and to timely r emit payment of t h ose proceeds to AFC

. A lthough this is sufficient evidence to support a fin ding that S co tt ’ s Big Truck Sales and Don ’ s Big Truck Sales violated t he In diana deception statute , see Greg Allen Cons t r . Co. v. Estelle , 762 N .E.2d 760, 781 (Ind . Ct. App. 2002) ( “ [T ] he only mental elemen t required to be shown here was McGaug hey’s knowle dge that the ma nner in which she misapplied the line of credit involved a substantial risk of loss or detriment to Allen Construction.” ) , a

ff ’ d in part and rev ’

d i n par t in other grounds , 798 N.E.2d 171 (Ind . 2003) , i t is not sufficient evidenc e to support a f inding th at Donald and Johnny

–– who signed

on ly the guara nty agreements in their indivi dual capacities

–– did so , 12 s ee A uto. Fin. Corp. v. Auto Maxx, L.L.C. , No. 1:06

- cv - 0 0 623

- LJM

- WTL , 200 6 WL 2024376, at *3 (S.D. Ind. July 17, 2006) (order) ( holding that sho wing of fail ure of no te makers to timely remit payment was not sufficient to prove that closely relat ed note guaranto rs had suffi c i e n t k n o w l e d g e ) ; Kan
. Motor , 2006 WL 1455553, at *3 ( “ All that is attested to

12 Al tho u gh Donald and Johnn y agreed to repay amounts d ue on the no tes, the guarant y agreements did not o bligate them to hold any funds in tr ust, nor is there any evidence th a t they personally held or applied any of tho se funds.21

at this point i s that an inventory of ve hi cles s hows t ha t some vehicles which were floor plan ned by AFC are no lon ger on the lot and the proceeds of any sale of thos e vehicle s was not app lied to the AFC debt

. ” )
. Thus, although the trial court ’ s judgment under Indiana Code Section 34

- 2 4

- 3

- 1 was proper a s to Sco tt ’ s B ig Truck Sales and Don ’ s Big Truck Sales based on a finding that they violated the Indiana de ception s tat ute, the trial cour t erred by also finding D o nald and Johnny liable under Section 34

- 24

- 3

- 1 b ecause no evidence supports a finding that t hey viol ated either th e fraud o r deception statutes

. We sustain this part of the Scott s ’ se cond issue in part and o verrule it in part.

C. B REACH OF C ONTRACT AND G U ARANTY A GREEM E NTS Other than AFC ’ s standing, which we have already addressed, t he Scotts r aise onl y t wo argument s as to t he propriety of summary judgment on the breach

- of

contract an d breach

- of

- guaranty cla ims: A FC provided no credible proof of default o r

o f any actual damage to AFC

. Th eir a rguments appear to hinge on their contention that the trial court shou ld have granted their objection that Bosl di d not adequately demonstra te h is personal knowledge of the facts , an argument that we have already reje cted

. To rec over on the note s from Sc ott ’ s Big Truck Sales and Don ’ s Big Truck Sales , AFC h ad to prove the ex istence of the notes, that the defendant s signed them , that AFC was the l egal owner and holder of the notes, and that a certain balance wa s due an d owing on th e note s . See Rockwall Co mmons , 331 S.W.3d at 505
. To support a22

claim for brea ch of th e guaran ty agreem ents , AF C had to prove the existence ,
o wnership , and terms of the guaranty contract s ; t h a t the guarantors ’ liability wa s
esta blished under the c ontracts ’ terms ; and the guar antors ’ f ailure or refusal to perform

. Chahadeh v. J

acint o Med. Gr p. , P.A. , 519 S.W.3d 242, 246 (Tex. App.

— Houston [1st Dist.] 2017, no pet.)
. Ind iana law is consistent ; th e fa ilure to pay

amou nt s due under a guaranty ag r eement is a breach of contract. See Keesling v. T.E.K. Partners, LLC

, 861 N.E.2d 1246, 125 1 (Ind. Ct. App. 2007 ) ; Esta te of Hofgesang v. Hansford , 714 N.E.2d 121 3, 1217 (Ind. Ct. A pp. 1999)
. T o prove a bre ach of contra ct ,
a plaintiff must prove (1 ) the existence of a contract, ( 2) the defendant ’ s br each , and ( 3) damages. McKeighen v. D avies C t y . Fair Bd

., 918 N.E.2d 717, 721 (Ind. Ct. App. 2009). Here, AFC attached as summary
- ju dgment evidence the signed n ote s and loan term sheets for Scott ’ s B i g Truck Sales an d Don ’ s Big T ruck Sale s, as wel l as the guarant y agreeme nts signed by Donal d and Jo hnny. Th e guar ant y agreements obligate the guarantor to pay all amounts due under the no tes. AFC also presented Bo sl ’ s affidavit, in which he averred that Scott ’ s Big Truck Sale s and Don ’ s Big Truck Sales ha d failed to make all required payments u nder th e notes and that all amoun ts due under both notes had been accelerated ; t hat Scott ’ s Big Truck Sales owe d AFC $ 104,6 5 6.61 , whic h included the $4,414.36 for the 200 7 Lexus , under its notes ; a nd that Don ’ s Big Truck Sales owed AFC $ 45, 987.43 , which included the $1 1,400 for the 2 013 Altima , under its note

. Addition ally, AFC attached to Bosl ’ s a ffidavit several23

“ Dealer Pay off

” r e por t s that listed th os e same amount s due

. The Scotts did not p rovide any cont rover ting evidence in t heir response to the moti on for summary judgment. Because AFC pres ented uncontroverted evidence tha t it was entitled to enforce the notes, that t h e Scotts had failed to pay the accelerated amou nt s du e under the
notes as guaranteed, and th e exact amounts due , we hold that the tr ia l cou rt properly granted summary judg ment for AFC on its breach

- of

- contra ct claim regarding the notes and guarant y agreem e nts . We therefore overrule th is part of the Sc otts ’ second issue. V . ATTOR NEY ’ S FEES The Scotts bring two complaints rel ated to the atto rney ’ s fees assessed: that there is no evidence to su pport the imp osition of appellate attorney ’ s fees an d that if

w e reverse any part of the summary judgment, w e m ust r emand to the tria l court for a recalculation of attorney ’ s fees. We n eed not address t he Scotts ’ appellate at torney ’ s fees complaint because AFC argue d that it was entitled to attorney ’ s fees ba sed on

c ontract ual provi sions in the notes and guaranty agreements, as well as the In diana Code. Ind. Code § 34

- 24

- 3

- 1 , § 1(3 ). Its attor ney ’ s af f idavit d id not di stinguish fees

amon g the claims and parties and nei ther did the trial court ’ s judg ment . Becau se we
are reve rsing the summary judgment on the statu tory ca uses of action as to Donald and Johnny , we also revers e the attorney ’ s fees award. S ee Reed v. Lake Country Prop.24

Ow ners Ass ’

n, Inc. , No. 02

- 14

- 0028 2

- CV, 2016 WL 3655589, at *9 (Tex. App.

— Fort Worth J uly 7, 20 16, no pe t.) (mem. op.)
. V I . CONCLUSIO N Having overruled the Scotts ’ first issue and th eir second issue in part , we affirm the t r ial cou rt ’ s judgment aw arding da m age s for breach of contract and breach of guara nty to AFC

. We also affirm the tria l court ’ s judgment awarding additional damages t o AFC from Scott ’ s Big Truck Sales and Don ’ s Big Truck Sales under Indiana Code Section 34

- 2 4

- 3

- 1. But having sustained par t of the Scott s ’ second issue

as to the aw ard of $8, 828. 72 in ad ditional damages fro m Donald Scott an d the award of $22,800 from Joh nny Scott under Indiana Code Section 34

- 2 4

- 3

- 1, we reverse that part of the trial court ’ s s u mmary ju dgment

. 13 Because we rever se part of the trial
court ’ s summary judgment, we add itionally reverse the trial c ourt ’ s attorney ’ s fees award

. We remand this ca se to the trial court for further procee dings on AFC ’ s claim for additional damages from Donald and Johnny S cott and its attorney ’ s fees request. /s/ Lee Gabriel L ee Gabriel Justice Delivered: December 17, 2020

13 Donald and J ohnny di d not f ile their own summary

- jud gmen t motion as to th ese cl aims ; theref

ore, we cannot render judgment for them

. See Dyegar d Land P ’ ship v. Hoover , 39 S.W.3 d 300, 315 (Tex. App.

–– F ort Worth 2001, no pet.).