ORAL ARGUMENT REQUESTED

NO. 05-15-00626-CV

__________________________________________________________________

IN THE FIFTH COURT OF APPEALS

DALLAS, TEXAS

__________________________________________________________________

ARGENT DEVELOPMENT, L.P.,

Appellant,

v.

LAS COLINAS GROUP, L.P., and BILLY BOB BARNETT,

Appellees.

__________________________________________________________________

On Appeal from the 134th District Court, Dallas, Texas

Cause No. DC-13-13507

__________________________________________________________________

APPELLEES’ BRIEF

__________________________________________________________________

J. Robert Arnett II

CARTER SCHOLER ARNETT HAMADA 

& MOCKLER, PLLC

8150 N. Central Expy., Ste. 500

Dallas, Texas 75206

Tel: (214)-550-8188 

Fax: (214)-550-8185

ATTORNEY FOR LAS COLINAS 

GROUP, L.P. AND BILLY BOB 

BARNETT

ACCEPTED

05-15-00626-CV

FIFTH COURT OF APPEALS

DALLAS, TEXAS

10/27/2015 9:14:48 PM

LISA MATZ

CLERK

 FILED IN 5th COURT OF APPEALS DALLAS, TEXAS 10/27/2015 9:14:48 PM LISA MATZ Clerk
ii

TABLE OF CONTENTS

TABLE OF CONTENTS .......................................................................... ii

INDEX OF AUTHORITIES.................................................................... iv

STATEMENT OF THE CASE ............................................................... vii

STATEMENT REGARDING ORAL ARGUMENT.............................. viii

ISSUES PRESENTED ............................................................................ ix

STATEMENT OF FACTS........................................................................ 1

I. LCG enters into a development agreement with the 

City of Irving to develop and subsequently lease from 

the City an entertainment center................................................... 1

II. LCG executes a promissory note to Argent, and seven 

months later Barnett agrees to the conditional 

Guaranty.......................................................................................... 2

III. The LCG Development Agreement expires pursuant to 

its own terms on August 6, 2012, and litigation ensues ............... 4

IV. The City makes a deal with a new developer and 

settles the LCG-City Lawsuit......................................................... 6

V. Argent files suit against LCG and Barnett and the trial 

court properly grants summary judgment in favor of 

Barnett on the Guaranty ................................................................ 9

SUMMARY OF THE ARGUMENT....................................................... 10

STANDARD OF REVIEW ..................................................................... 12

ARGUMENT........................................................................................... 12

I. LCG’s “release” of its claims arising under the LCG 

Development Agreement was not a “transfer” of an

interest in that contract................................................................ 13
iii

II. That the City and LCG entered into a settlement 

agreement involving the City’s new developer paying 

money to LCG does not establish that LCG transferred 

its interest in the LCG Development Agreement........................ 21

III. LCG did not sell, assign, or transfer its interest in the 

Development Agreement because it expired and 

terminated by its own terms......................................................... 23

A. The overwhelming evidence establishes the LCG 

Development Agreement expired before any 

alleged transfer .................................................................... 23

B. Judicial estoppel cannot apply because the 

required elements of estoppel are met................................ 27

CONCLUSION ....................................................................................... 32

CERTIFICATE OF SERVICE ............................................................... 35

CERTIFICATE OF COMPLIANCE WITH RULE 9.4(i)...................... 36
iv

INDEX OF AUTHORITIES

CASES PAGE(S)

Bob Short & Assocs., Inc. v. Heritage Res., Inc., No. 

05-95-00472-CV, 1996 WL 223680 (Tex. App.—

Dallas Apr. 30, 1996, writ denied)........................................................... 31

Buck v. Palmer, 382 S.W.3d 525 (Tex. 2012) .......................................... 12

Carpet Servs., Inc. v. George A. Fuller Co. of Texas, 

Inc., 802 S.W.2d 343 (Tex. App.—Dallas 1990) (en 

banc), aff’d, 823 S.W.2d 603 (Tex. 1992) ................................................. 16

City of Brownsville v. AEP Texas Central Co., 348 

S.W.3d 348 (Tex. App.—Dallas 2011, pet. denied) ........................... 19, 20

City of San Antonio v. Valemas, Inc., No. 04-11-

00768-CV, 2012 WL 2126932 (Tex. App.—San 

Antonio June 13, 2012, no pet.) ......................................................... 19, 20

Dearborn Stove Co. v. Caples, 236 S.W.2d 486 (Tex. 

1951).......................................................................................................... 20

e2 Creditors’ Trust v. Farris (In re e2 

Communications, Inc.), 320 B.R. 849 (Bankr. N.D. 

Tex. 2004)............................................................................................. 18-19

Edwards v. Kaye, 9 S.W.3d 310 (Tex. App.—Houston 

[14th Dist.] 1999, pet. denied)............................................................ 15, 16

Flying Diamond-W. Madisonville L.P. v. GW 

Petroleum, Inc., No. 10-07-00281-CV, 2009 WL 

2707405 (Tex. App.—Waco Aug. 26, 2009, no pet.) ................................ 31

Gabarick v. Laurin Maritime (America) Inc., 753 

F.3d 550 (5th Cir. 2014)............................................................................. 29

Galley v. Apollo Associated Servs., Ltd., 177 S.W.3d 

523 (Tex. App.—Houston [1st Dist.] 2005, no pet.)............................ 28, 30
v

Griffin Indus. Inc. v. Foodmaker, Inc., 22 S.W.3d 33

(Tex. App.—Houston [14th Dist.] 2000, pet. denied).............................. 23

Grohman v. Kahlig, 318 S.W.3d 882 (Tex. 2010)............................... 14-17

Kastigar v. U.S., 406 U.S. 441 (1972)...................................................... 16

King Ranch, Inc. v. Chapman, 118 S.W.3d 742

(Tex. 2003)................................................................................................. 12

Lester v. First American Bank, 866 S.W.2d 361 (Tex. 

App.—Waco 1993, writ denied).......................................................... 15, 16

Mangione v. Gov’t Personnel Mutual Life Ins. Co., 

No. 04-01-00655-CV, 2002 WL 1677457 (Tex. App.—

San Antonio July 24, 2002, pet. denied)............................................. 23-24

Metroflight, Inc. v. Shaffer, 581 S.W.2d 704 (Tex. 

Civ. App.—Dallas 1979, writ ref’d n.r.e.) ................................................ 28

Nine Syllables, LLC v. Evans, No. 05-13-01677-CV, 

2015 WL 3932751 (Tex. App.—Dallas June 26, 2015, 

no pet. hist.) ............................................................................. 27, 28, 31-32

Pagosa Oil and Gas, LLC v. Marrs and Smith P’ship, 

323 S.W.3d 203 (Tex. App.—El Paso 2010, pet. 

denied)................................................................................................. 19, 20

Pleasant Glade Assembly of God v. Schubert, 264 

S.W.3d 1 (Tex. 2008)........................................................................... 29, 30

Reynolds-Penland Co. v. Hexter & Lobello, 567 

S.W.2d 237 (Tex. Civ. App.—Dallas 1978, writ 

dism’d)....................................................................................................... 16

Sims v. State, 82 S.W.3d 730 (Tex. App.—Waco 

2002), aff’d, 117 S.W.3d 267 (Tex. Crim. App. 2003).............................. 17

Southtex 66 Pipeline Co. v. Spoor, 238 S.W.3d 538

(Tex. App.—Houston [14th Dist.] 2007, pet. denied).............................. 18
vi

Texas Capital Sec. Mgmt., Inc. v. Sandefer, 80 

S.W.3d 260 (Tex. App.—Texarkana 2002, pet. struck) .......................... 30

Texas Real Estate Commission v. Nagle, 767 S.W.2d 

691 (Tex. 1989).......................................................................................... 30

Travelers Indem. Co. of Ill. v. Fuller, 892 S.W.2d 848 

(Tex. 1995)................................................................................................. 18

Turner v. PV Int’l Corp., 765 S.W. 455 (Tex. App.—

Dallas 1988), writ denied, 778 S.W.2d 865 (Tex. 

1989).......................................................................................................... 28

OTHER AUTHORITIES

BLACK’S LAW DICTIONARY (9th ed. 2009)....................................... 13-15, 17

TEX. R. CIV. P. 166a. ................................................................................. 12
vii

STATEMENT OF THE CASE

Nature of the case: This is suit over a promissory note and a 

conditional guaranty. CR 8-50.1

Course of proceedings: After Argent Development, L.P., sued to 

collect on a promissory note against Las 

Colinas Group, L.P. (“LCG”) and a 

conditional guaranty against Billy Bob 

Barnett, CR 11-12, Barnett moved for 

summary judgment on Argent’s claims. CR. 

718-1619.

Trial Court’s Disposition: After briefing and oral argument, the trial 

court granted Barnett’s summary judgment 

motion on Argent’s claims against him. CR 

1800. Pursuant to an agreement between 

LCG and Argent, the trial court then 

entered an agreed judgment on Argent’s

claims against LCG. CR 1802-04.

 1 All citations to the Clerk’s Record appear as “CR __.”
viii

STATEMENT REGARDING ORAL ARGUMENT

Barnett requests oral argument. While Barnett believes this is a 

straightforward case of contract interpretation, oral argument may 

assist the Court in addressing Argent’s creative arguments regarding 

the legal principles at issue and their application to the facts.
ix

ISSUES PRESENTED

Did the trial court properly grant Barnett’s summary judgment 

motion where a condition precedent to his liability under a guaranty 

agreement was not satisfied?
1

STATEMENT OF FACTS

I. LCG enters into a development agreement with the City of 

Irving to develop and subsequently lease from the City an

entertainment center.

On December 11, 2008, LCG and the City of Irving entered into a 

Entertainment Center Development Agreement (the “LCG Development 

Agreement”), for LCG to design and develop an entertainment center

that would be owned by the City and leased and operated by LCG under 

a long-term lease. CR 747-48, 751-801. The LCG Development 

Agreement contemplated contributions towards the cost of the 

entertainment center by both LCG (from private funds) and the City

(from bond proceeds). CR 748, 771-81. 

The LCG Development Agreement contained a deadline for LCG 

to close on its private funding, after the City notified LCG of the 

amount of the estimated net bond proceeds. After several amendments, 

this deadline was August 6, 2012. CR 748, 860. The last amendment to 

the agreement specifically provided, “If the Closing Date does not occur 

on or before August 6, 2012, then this Agreement automatically 

terminates without any necessity for any further action by either 

party.” CR 860. 
2

II. LCG executes a promissory note to Argent, and seven 

months later Barnett agrees to the conditional Guaranty.

One of LCG’s sources of funding for its pre-development costs was 

a loan from Argent. On December 1, 2010, LCG and Argent entered 

into a Promissory Note. CR 863-65. The maturity date—and LCG’s 

obligation to pay—under the Promissory Note was triggered by three 

alternative events. Id.

“Doc” Cornutt, the owner of Argent, asked Barnett to personally 

guaranty the Promissory Note from LCG, but Barnett declined to do so. 

CR 745. Cornutt told Barnett he wanted to make sure he was repaid if 

LCG received proceeds from bonds the City was going to issue for the 

public financing piece of the entertainment center, or if LCG sold its 

Development Agreement to someone else. Id. Barnett told Cornutt 

that if one of those things happened, and LCG did not repay the 

Promissory Note, Barnett would, but otherwise he was not going to 

guaranty the LCG Promissory Note. Id. Based on that understanding, 

Barnett and Argent entered into a Guaranty Agreement of the 

Promissory Note on July 27, 2011. CR 868.

The Guaranty placed conditions on Barnett’s liability:
3

In the event the Maker [LCG] should not perform the 

obligations specified in Section 1 on or before the times they 

are to be performed, subject to the conditions stated in this 

paragraph 2, the Guarantor [Barnett] guarantees and agrees 

that Guarantor shall immediately pay, do, and perform all 

such obligations for the benefit of the Lender [Plaintiff], 

conditioned only upon the passage of thirty (30) days after 

the earlier of: a) issuance (the “Bond Issuance”) by the City 

of Irving, Texas, of city bonds, any portion of the proceeds of 

which are applied, or publicly announced to be for 

application, to the project costs for the project commonly 

referred to as the “Irving Entertainment Center” (the 

“Entertainment Center”) to be constructed at West Las 

Colinas Boulevard and Fuller Drive in Irving, Texas, or b) 

the sale, assignment, or other transfer by Las Colinas Group 

of all or any interest in that one certain Development 

Agreement by and between the City of Irving and Las 

Colinas Group, dated December 11, 2008 (as amended, the 

“Development Agreement”), or a change in ownership of 

more than fifty percent (50%) of Las Colinas Group (“LCG 

Transfer”). The Bond Issuance shall provide public 

financing for the Entertainment Center construction, as 

represented by Maker to Lender, and permit Maker to fund 

the commencement of construction of the Entertainment 

Center, as well as provide liquidity for payment of the 

Agreed Credit. Unless and until the passage of thirty 

(30) days after the earlier of the Bond Issuance or LCG 

Transfer shall occur, Guarantor shall not be liable 

hereunder for all or any portion of the Agreed Credit.

CR 745, 868 (emphasis added).

The rationale behind the condition on LCG selling, assigning, or 

transferring the LCG Development Agreement was to assure Argent 

that if LCG sold, assigned, or transferred its interest in the LCG 
4

Development Agreement to someone else who took over the benefits of 

the LCG Development Agreement, then Argent would be repaid either 

by LCG or Barnett. CR 745. It was never intended or contemplated 

that this condition would be triggered by LCG releasing claims against 

the City arising out of or related to the LCG Development Agreement.

CR 745, 867. Indeed, according to the attorney who negotiated the 

Guaranty, it was not discussed in any negotiations in which he

participated that the condition would be triggered by LCG releasing 

claims against the City arising out of settlement of litigation related to 

the LCG Development Agreement. CR 867.

III. The LCG Development Agreement expires pursuant to its 

own terms on August 6, 2012, and litigation ensues.

Due to problems with obtaining an appropriate rating of its bonds, 

the City could not proceed with its proposed bond package. CR 749. 

LCG attempted to work with the City to restructure the financing and 

sought an extension of the August 6, 2012 deadline. CR 749. The City 

rejected LCG’s proposal to extend the deadline, and the LCG 

Development Agreement expired and terminated by its own terms on 

August 6, 2012. CR 749, 860.
5

On August 7, 2012, LCG filed a lawsuit against the City in the 

193rd District Court of Dallas County, Texas (the “LCG-City Lawsuit”), 

over the termination of the LCG Development Agreement. CR 749.

LCG sought damages, in excess of $139 million, for the City’s wrongful 

conduct that resulted in the termination of the LCG Development 

Agreement. CR 1044-45. Pleading in the alternative, LCG sought 

specific performance on the theory that the City should be estopped 

from relying on the termination of the LCG Development Agreement. 

CR 1045.

LCG’s live pleading, Plaintiff’s Third Amended Petition, 

recognized that the LCG Development Agreement had expired by its 

own terms. CR 1021-22. In its Original Answer, the City alleged, “The 

development contract between the City and LCG, however, has fully 

expired by its own terms.” CR 1053. The City filed a Cross-Motion for 

Summary Judgment, in which it stated as an undisputed fact that “the 

Closing Date did not occur by August 6, 2012, and the Development 

Agreement therefore automatically terminated on that date.” CR 1082. 

The City further stated in its motion, “As an initial matter, LCG does 
6

not (and cannot) dispute that the Development Agreement expired by 

its terms on August 6, 2012.” CR 1108.

In the LCG-City Lawsuit, LCG sought summary judgment on the 

City’s immunity defenses to its claims of money damages for breach of 

contract and the alternative remedy of specific performance. CR 1120-

54. On March 18, 2013, the 193rd Court entered an Amended Order that 

neither the City’s sovereign immunity defenses nor the Texas Local 

Government Code precluded LCG’s claims, without ruling on the merits 

of the claims. CR 1575-76. The court further granted permission for an 

interlocutory appeal. CR 1576.

IV. The City makes a deal with a new developer and settles the 

LCG-City Lawsuit.

On May 9, 2013, the City entered into a Memorandum of 

Understanding (the “MOU”) with a new developer, Irving Music 

Factory, LLC (“IMF”), to design, construct, and operate an 

entertainment center on the site that had been covered by LCG’s

Development Agreement. CR 876-91. The MOU stated that the LCG 

Development Agreement expired by its terms on August 6, 2012, and 

that the City desired to negotiate and enter into a separate and 

independent development agreement with IMF. CR 877. The MOU 
7

included drawings and renderings depicting IMF’s own independent 

plans and concepts for the entertainment center. CR 883-90. IMF later 

assigned the MOU, with the City’s consent, to ARK Group of Irving, Inc. 

(“ARK”). CR 892-96.

On July 25, 2013, the City adopted a resolution approving an 

Entertainment Center Development Agreement (the “ARK 

Development Agreement”) between the City and ARK. CR 909. The 

resolution expressly stated that the LCG Development Agreement 

“terminated by its terms on August 6, 2012.” Id. The ARK 

Development Agreement—which differed in many respects from the 

LCG Development Agreement—also expressly stated that the LCG 

Development Agreement “terminated by its terms on August 6, 2012.” 

CR 918. The City further adopted a resolution directing the City 

Attorney to take all appropriate action related to settlement of the 

LCG-City Lawsuit, which resolution stated that the LCG Development 

Agreement “terminated by its terms on August 6, 2012.” CR 976.

At the same time, the City and LCG entered into a Settlement 

Agreement with respect to the LCG-City Lawsuit, which contained the 

following recital:
8

WHEREAS, the LCG Development Agreement 

terminated on August 6, 2012, thereby also terminating 

the Lease; and

CR 749, 1580-81, 1592 (emphasis added). In the Settlement 

Agreement, LCG:

unconditionally and irrevocably releases and 

discharges the City . . . from any and all claims, debts, 

demands, actions, causes of action, suits, accounts, 

covenants, contracts, agreements, damages, losses, 

judgments, executions, orders, fees, costs, expenses, and 

liabilities whatsoever of any kind, whether in law or in 

equity, whether now known or unknown, accrued or 

unaccrued, suspected or unsuspected, of any nature 

whatsoever, which the LCG Releasors have or ever had 

against the City . . . from the beginning of time to the 

Effective Date of this Agreement, in any way arising from or 

related to (i) the LCG Development Agreement . . .

CR 1584 (emphasis added). The release was “intended to be a broad, 

general release of all claims the LCG Releasors have or could ever have 

against the City Released Group.” CR 1585. 

The settlement between LCG and the City was funded by ARK in 

order to end the litigation between the City and LCG and clear the way 

for ARK to obtain its own development agreement with the City, and 

LCG and ARK entered into a separate settlement agreement. CR 749, 

1584, 1602. As a result of the Settlement Agreement, the 193rd Court 

entered an Agreed Order of Dismissal with Prejudice in the LCG-City 
9

Lawsuit on August 5, 2013, in which it dismissed all claims in their 

entirety with prejudice. CR 1578.

V. Argent files suit against LCG and Barnett and the trial 

court properly grants summary judgment in favor of 

Barnett on the Guaranty.

On November 13, 2013, Argent filed its lawsuit against LCG and 

Barnett, alleging that the release of claims in the Settlement 

Agreement triggered LCG’s obligations to pay under the Promissory 

Note and satisfied the condition precedent to Barnett’s liability under 

the Guaranty. Argent conceded that the other alternative trigger 

events under the Promissory Note and Guaranty had not occurred. 

Argent moved for summary judgment, which the 193rd Court denied. 

CR 86, 717. 

Barnett then moved for summary judgment on the grounds that a

condition precedent to Barnett’s liability under the Guaranty had not 

occurred because a release of claims arising under a contract is not a 

transfer of the contract and LCG could not have sold, assigned, or 

transferred its interest in the LCG Development Agreement because it 

had expired by its own terms. CR 718. The trial court granted 
10

Barnett’s motion and dismissed Argent’s claims against Barnett with 

prejudice. CR 1816. 

Because the Promissory Note contained an alternative trigger 

event for the maturity date, the passage of December 31, 2014 (CR 863), 

LCG stipulated to the entry of an agreed judgment on the Promissory 

Note. 2 CR 1808-10. The Guaranty, however, did not include this 

alternative trigger event. CR 868.

Argent appealed. CR 1811-16.

SUMMARY OF THE ARGUMENT

The court should affirm the trial court’s judgment because 

summary judgment was proper in this case. The undisputed evidence 

establishes that none of the conditions precedent to Barnett’s 

obligations to pay under the Promissory Note or Guaranty occurred. 

Argent therefore cannot maintain a claim for breach of the Guaranty 

against Barnett. 

LCG simply released its claims against the City relating to the 

LCG Development Agreement. Under these circumstances, the plain, 

 2 LCG’s interest in this appeal is restricted to the date the promissory note matured, 

which determines when default rate interest began accruing. CR 863, 1808-09. 

LCG joins in Barnett’s arguments, except the issue of privity for the application of 

judicial estoppel. 
11

ordinary meanings of “release” and “transfer” are different. Argent 

attempts to evade this distinction by inappropriately conflating claims 

arising under a contract with an interest in the contract. By signing the 

Settlement Agreement, however, LCG merely released any claims it 

had arising under the LCG Development Agreement, which as a matter 

of Texas law is not the contract or any right or interest in the contract. 

ARK supported this arrangement to end the litigation between LCG 

and the City in order to clear the way for its own, new development—

not to acquire an interest in the LCG Development Agreement.

Furthermore, LCG could not have transferred any interest in the 

LCG Development Agreement because it had expired and terminated on 

its own terms eleven months before LCG and the City entered into the 

Settlement Agreement. LCG repeatedly acknowledged that the LCG 

Development Agreement terminated. Argent attempts to suppress this 

fact by resorting to judicial estoppel but fails to show that each required 

element of judicial estoppel is met: there is no sworn statement, actual 

inconsistency, or advantage gained by LCG’s alternative pleading. Nor 

was Barnett in privity with LCG. Argent has failed to show that LCG 

sold, assigned, or transferred its interest in the LCG Development 
12

Agreement and therefore cannot establish that a condition precedent to 

Barnett’s liability under the Guaranty has been satisfied. This Court 

should therefore affirm the judgment.

STANDARD OF REVIEW

Summary judgments trigger de novo appellate review. See, e.g., 

Buck v. Palmer, 382 S.W.3d 525, 527 (Tex. 2012). Traditional motions 

stand if the movant conclusively disproved an opponent’s vital fact or 

conclusively proved their own. TEX. R. CIV. P. 166a. If “the evidence is 

so weak as to do no more than create a mere surmise or suspicion of a 

fact,” an award of summary judgment should be affirmed. King Ranch, 

Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003) (internal quotation 

marks omitted). The trial court correctly granted Barnett’s summary 

judgment motion under these standards.

ARGUMENT

The trial court properly granted summary judgment because 

LCG’s release of claims arising under the LCG Development Agreement 

was not a “sale, assignment, or other transfer” of an interest in the LCG 

Development Agreement. Nor could LCG have transferred an interest 

in the LCG Development Agreement because it expired and terminated 
13

by its own terms nearly a year earlier. Therefore, the condition 

precedent to Barnett’s liability under the Guaranty was not satisfied 

and Barnett has no liability to Argent.

I. LCG’s “release” of its claims arising under the LCG 

Development Agreement was not a “transfer” of an interest 

in that contract.

The parties did not agree that a release of claims against the City

arising under the LCG Development Agreement would trigger LCG’s 

obligation to pay or Barnett’s liability under the Guaranty. In the 

Settlement Agreement, LCG only released its claims against the City

relating to the LCG Development Agreement. CR 1584. LCG did not 

“release” the LCG Development Agreement itself, and did not purport to

sell, assign, or transfer any interest in the LCG Development 

Agreement to anyone. Further, the LCG Development Agreement itself 

is distinct from claims that arise under it. 

The plain, ordinary meanings of “transfer” and “release” are 

different. The principal definition of “release” is, “Liberation from an 

obligation, duty, or demand; the act of giving up a right or claim to the 

person against whom it could have been enforced.” BLACK’S LAW 

DICTIONARY 1403 (9th ed. 2009). That concept is distinct and different 
14

from the concept of “transferring” something. “Transfer” when used as 

a verb means, “1. To convey or remove from one place to another; to 

pass or hand over from one to another, esp. to change over the 

possession or control of. 2. To sell or give.” Id. at 1636. LCG’s release of 

claims arising under the LCG Development Agreement did not convey, 

hand over, or change the possession and control of the LCG 

Development Agreement to anyone, and was not a “transfer” of an 

interest in that contract. Instead, it was the giving up of claims against 

the City. The plain meaning of the language in the Guaranty is 

consistent with the parties’ intention at the time the Guaranty was 

executed. CR 745, 867.

Argent’s reliance on Grohman v. Kahlig, 318 S.W.3d 882 (Tex. 

2010), is misplaced. Grohman did not decide whether releasing claims 

arising under a contract constitutes transferring an interest in the 

contract. Grohman, 318 S.W.3d at 888. In fact, there was no “release” 

involved in the case at all. Instead, the issue was whether the 

conversion of corporations to limited partnerships constituted a 

“transfer” of their stock, and the Court concluded it did not. Id.
15

The sole reference to “release” in Grohman was in a quote from 

Black’s Law Dictionary of one of three alternative definitions of 

“transfer” when used as a noun, and in which “release” appears among 

several examples of disposing of or parting with an asset. Id. (quoting 

BLACK’S LAW DICTIONARY 1636 (9th ed. 2009)). From this quote, Argent 

draws the fallacious conclusion that “release” always means “transfer.” 

That is an unjustified extrapolation from a quoted definition. Further, 

words have different meanings, depending on how they are used. 

Another definition of the noun “transfer,” and one applicable here, is, “A 

conveyance of property or title from one person to another.” BLACK’S 

LAW DICTIONARY 1636 (9th ed. 2009). LCG’s release of claims arising 

under the LCG Development Agreement did not convey property or title 

to anyone, and was not a “transfer.” 

The single reference to “release” in Grohman is, at most, dictum—

an observation or remark made concerning some rule, principle, or 

application of law suggested in a particular case, which observation or 

remark is not necessary to the determination of the case. See Edwards 

v. Kaye, 9 S.W.3d 310, 314 (Tex. App.—Houston [14th Dist.] 1999, pet. 

denied); Lester v. First American Bank, 866 S.W.2d 361, 363 (Tex. 
16

App.—Waco 1993, writ denied). Dictum does not create binding 

precedent. Edwards, 9 S.W.3d at 314; Lester, 866 S.W.2d at 363; 

Reynolds-Penland Co. v. Hexter & Lobello, 567 S.W.2d 237, 241 (Tex. 

Civ. App.—Dallas 1978, writ dism’d). Broad language in an opinion 

that is unnecessary to the court’s decision cannot be considered binding 

authority. Kastigar v. U.S., 406 U.S. 441, 454-55 (1972).

Instead, the binding effect of a prior decision is determined by 

reference to the important facts in that case and to the decision actually 

made by that court. See Edwards, 9 S.W.3d at 314; Lester, 866 S.W.2d 

at 363; Reynolds-Penland, 567 S.W.2d at 241. A prior decision is 

binding precedent only if it addressed the precise question presented in 

the current case, and if the facts on which the prior case was based are 

substantially similar to those in the current case. Lester, 866 S.W.2d at 

363; Carpet Servs., Inc. v. George A. Fuller Co. of Texas, Inc., 802 

S.W.2d 343, 344 (Tex. App.—Dallas 1990) (en banc), aff’d, 823 S.W.2d 

603 (Tex. 1992). 

Applying these principles to Grohman makes clear that Argent’s 

extrapolation of Grohman is incorrect and certainly not controlling in 

this case. The precise question here—does releasing of claims arising 
17

under a contract constitute transferring an interest in the contract—

was not addressed in Grohman. Nor are the facts of this case remotely 

similar to the facts in Grohman. And, the inclusion of “release” among 

examples in the definition was not necessary to the Court’s 

determination. The result would have been the same if the definition 

had omitted the examples, i.e., “Any mode of disposing of or parting 

with an asset or an interest in an asset.”

Argent’s argument that the quotation of one definition in an 

opinion is a binding conclusion that such definition—in its entirety—

applies in all cases and circumstances and excludes all other 

definitions3 is illogical. And, Argent’s authorities do not support that 

proposition. Sims v. State was a criminal case involving a defendant 

challenging whether the evidence was legally sufficient to establish he 

committed a “constructive transfer” of a controlled substance. 82 

S.W.3d 730, 733-34 (Tex. App.—Waco 2002), aff’d, 117 S.W.3d 267 (Tex. 

Crim. App. 2003). The court found that the definition of “constructive 

transfer” provided by an earlier criminal case was not dictum but rather 

necessary to its holding, and applied it against the defendant. Id. at 

 3 See BLACK’S LAW DICTIONARY 1403 (setting forth eight different definitions of 

“release”) and compare BLACK’S LAW DICTIONARY 1636 (setting forth five different 

definitions of “transfer” as a noun and verb).
18

733-34. Argent’s other authority actually undermines its argument 

because the Court found language in its earlier cases to be dicta because 

of the differences between those cases and the one before it. Travelers 

Indem. Co. of Ill. v. Fuller, 892 S.W.2d 848, 851 n. 3 (Tex. 1995).

Argent attempts to salvage its “transfer” argument with two 

inapposite cases. First, Argent repeats its flawed Grohman argument 

with Southtex 66 Pipeline Co. v. Spoor, 238 S.W.3d 538, 548 (Tex. 

App.—Houston [14th Dist.] 2007, pet. denied), which quoted the same 

definition of “transfer” from Black’s Law Dictionary. Southtex did not 

determine whether a release is a transfer, and certainly did not hold 

that a release is always a transfer. The issue in Southtex was whether 

rights in an easement acquired through a condemnation proceeding 

could be assigned through a lease. See Southtex, 238 S.W.3d at 548. As 

with Grohman, no release was involved, and therefore the issue was not 

integral to or even presented in the determination of that case. See id.

Next, Argent relies on e2 Creditors’ Trust v. Farris (In re e2 

Communications, Inc.), 320 B.R. 849 (Bankr. N.D. Tex. 2004), but fails 

to recognize that the court there addressed “whether a release is a 

‘transfer’ under the Bankruptcy Code.” e2 Creditors’ Trust, 320 B.R. at 
19

856 (emphasis added). The court based its decision on the definition of 

“transfer” under the Bankruptcy Code and its legislative history, which 

revealed that the definition was drafted to be as broad as possible. Id. 

The issue was whether a release of claims constituted a “transfer” for 

purposes of fraudulent transfer and preference claims. The court first 

concluded that a claim or cause of action is property of the estate, and 

then concluded that releasing those claims was a method of disposing of 

or parting with those claims. Of course, in this case, what was required 

was a “transfer” of an interest in the contract itself, not claims arising 

under the contract.

Claims arising under a contract do not constitute an interest in 

the contract. Texas law distinguishes between a contracting party’s 

ability to assign rights under a contract and that party’s ability to 

assign causes of action arising from the breach of that contract. See 

City of San Antonio v. Valemas, Inc., No. 04-11-00768-CV, 2012 WL 

2126932 at *8 (Tex. App.—San Antonio June 13, 2012, no pet.); City of 

Brownsville v. AEP Texas Central Co., 348 S.W.3d 348, 358 (Tex. App.—

Dallas 2011, pet. denied); Pagosa Oil and Gas, LLC v. Marrs and Smith 

P’ship, 323 S.W.3d 203 (Tex. App.—El Paso 2010, pet. denied). Texas 
20

courts uniformly hold that anti-assignment clauses in contracts do not 

prohibit a party from assigning causes of action arising from an alleged 

breach of the contract. See Dearborn Stove Co. v. Caples, 236 S.W.2d 

486, 490 (Tex. 1951); Valemas, 2012 WL 2126932 at *8; AEP Texas, 348 

S.W.3d at 358; Pagosa Oil, 323 S.W.3d at 212. 

In the anti-assignment clause in Valemas, Valemas agreed not to 

“assign, transfer, convey, sub-let or otherwise dispose of this contract, or 

any portion thereof, or any right, title, or interest in, to or under the 

same.” Valemas, 2012 WL 2126932 at *8. The court held that the 

clause did not preclude Valemas from assigning causes of action arising 

from an alleged breach of the contract because, “A breach of contract 

claim is not a right or interest identified in the contract.” Id. at *8-9.

If assigning a cause of action for breach of a contract does not 

constitute an assignment or transfer of the contract itself or a right or 

interest in the contract, then releasing such claims cannot constitute a 

transfer of the contract or any right or interest in the contract. LCG did 

not sell, assign, or otherwise transfer the LCG Development Agreement 

or any interest in the LCG Development Agreement. It simply released 

its claims arising under the contract, which as a matter of Texas law is 
21

not the contract or any right or interest in the contract. Therefore, the 

condition precedent to Barnett’s liability under the Guaranty was not 

satisfied.

Argent repeatedly emphasizes that, according to the Settlement 

Agreement, LCG released its “covenants, contracts [and] agreements” in 

“any way arising from or related to” the “development agreement.” 

Brief at 15, 16, 19. This is an attempt at misdirection. The full 

language of the Settlement Agreement demonstrates that this provision 

“releases” and “discharges” the City from “claims” of whatever kind or 

description “arising from” or “related to” the LCG Development 

Agreement. CR 1584-86. It does not “transfer” anything to anyone. 

And, “contracts” “arising from or related to” the LCG Development 

Agreement are distinct from the LCG Development Agreement itself. 

Accordingly, the condition precedent to Barnett’s liability under the 

Guaranty was not satisfied.

II. That the City and LCG entered into a settlement 

agreement involving the City’s new developer paying 

money to LCG does not establish that LCG transferred its 

interest in the LCG Development Agreement.

Argent erroneously argues that the City entering into a 

settlement agreement with LCG that (1) involved ARK paying money to 
22

LCG and Barnett and (2) cleared the way for ARK to proceed with its 

own development agreement for the entertainment center somehow 

established LCG transferred its interest in the LCG Development 

Agreement to ARK. Brief at 13-14. However, ARK did not acquire or 

succeed to any of LCG’s rights under the LCG Development Agreement 

by virtue of the Settlement Agreement but instead independently 

obtained a new and different development agreement based upon the 

MOU it had entered into with the City on May 9, 2013. CR 726-27. 

It is undisputed that the City and LCG entered into the 

Settlement Agreement to resolve claims between them in the LCG-City 

Lawsuit. CR 726-27, 876, 1580-81, 1584, 1592. The mere fact that ARK 

funded the Settlement Agreement to end the litigation between the City 

and LCG—including LCG’s $139 million claim for damages for the 

termination of the LCG Development Agreement—and clear the way for 

ARK to proceed with its own development agreement with the City does 

not establish that LCG transferred its interest in the LCG Development 

Agreement to ARK. There is a material difference between entering 

into a new and independent agreement and assuming an existing 
23

agreement. Because this case involves the former, Argent’s inventive 

arguments are without merit.

III. LCG did not sell, assign or transfer its interest in the LCG 

Development Agreement because it had expired and 

terminated by its own terms.

LCG could not have sold, assigned, or transferred any interest in 

the LCG Development Agreement when it entered into the Settlement 

Agreement with the City because the LCG Development Agreement had 

terminated on its own terms on August 6, 2012, almost a year before 

LCG and the City entered into the Settlement Agreement. Judicial 

estoppel does not apply and cannot change this result.

A. The overwhelming evidence establishes the LCG 

Development Agreement expired before any alleged 

transfer.

Argent’s claim that LCG transferred its interest in the LCG 

Development Agreement when it settled with the City on July 24-25, 

2013 fails in light of the undisputed fact that the LCG Development 

Agreement expired on its own terms more than eleven months earlier.

See Griffin Indus. Inc. v. Foodmaker, Inc., 22 S.W.3d 33, 36 (Tex. App.—

Houston [14th Dist.] 2000, pet. denied) (“Unlike the mythical Phoenix, 

contracts that terminate by their express terms do not rise again.”); see 

also Mangione v. Gov’t Personnel Mutual Life Ins. Co., No. 04-01-00655-
24

CV, 2002 WL 1677457, at *3 (Tex. App.—San Antonio July 24, 2002, 

pet. denied). The facts demonstrate that the LCG Development 

Agreement terminated on its own terms on August 6, 2012:

• The LCG Development Agreement, as amended, provided that, “If 

the Closing Date does not occur on or before August 6, 2012, then 

this Agreement automatically terminates without any necessity 

for any further action by either party.” CR 860.

• The Closing Date did not occur on or before August 6, 2012, and 

the LCG Development Agreement expired and terminated 

pursuant to its own terms on that date. CR 749.

• The May 9, 2013 MOU between the City and IMF recognized that 

the LCG Development Agreement “terminated by its terms on 

August 6, 2012.” CR 877.

• The City’s resolution approving the ARK Development Agreement 

expressly stated that the LCG Development Agreement 

“terminated by its terms on August 6, 2012.” CR 909.

• The ARK Development Agreement contains a recital that the LCG 

Development Agreement “terminated by its terms on August 6, 

2012.” CR 918.

• In the Settlement Agreement between LCG and the City, the 

parties specifically agreed that, “the LCG Development 

Agreement terminated on August 6, 2012.” CR 1581.

• The City’s resolution approving the settlement with LCG 

expressly stated that the LCG Development Agreement 

“terminated by its terms on August 6, 2012.” CR 976.

In the LCG-City Lawsuit, LCG alleged that, “the Development 

Agreement would automatically terminate if LCG’s financing was not 

closed by August 6, 2012.” CR 1027. It further alleged that the City 
25

Council held a special meeting on “August 6, 2012, the final day of the 

term of the [LCG] Development Agreement,” to consider a proposed 

resolution to extend the term of the agreement, but the resolution was 

voted down. CR 1038. It alleged a claim for breach of contract seeking 

money damages resulting from the loss of LCG’s rights under the LCG 

Development Agreement. CR 1044-45. Pleading in the alternative, it 

sought specific performance ordering the City to issue bonds, arguing 

that the City by virtue of its conduct should be estopped from arguing 

that the LCG Development Agreement had expired. CR 1045.

Argent does not refute that the LCG Development Agreement, as 

amended, provided that, “If the Closing Date does not occur on or before 

August 6, 2012, then this Agreement automatically terminates without 

any necessity for any further action by either party.” CR 738, 860. It is 

further undisputed that the Closing Date did not occur. As admitted by 

Argent, the City, ARK, and LCG have consistently represented that the 

LCG Development Agreement expired on August 6, 2012 in various 

communications, agreements, and resolutions. CR 738-39. Because the 

undisputed facts show that the LCG Development Agreement 
26

terminated well before the settlement, there was nothing left that could 

have been transferred.

While Argent makes an argument about the “four corners” of the 

Settlement Agreement, it overlooks the express language that 

eviscerates its argument. The Settlement Agreement expressly states, 

“the LCG Development Agreement terminated on August 6, 2012.” CR 

1581. Under Argent’s own authorities, this express language 

conclusively establishes the LCG Development Agreement had 

terminated.

Argent points to the fact that ARK funded the Settlement 

Agreement between the City and LCG to claim that the LCG 

Development Agreement did not expire prior to the alleged “transfer” 

that purportedly occurred through the Settlement Agreement. Argent’s 

argument that ARK had no other reason to pay Defendants under the 

Settlement Agreement is incorrect because it is undisputed that this 

payment was actually made to end the litigation between the City and 

LCG, including the $139 million claim for termination of the LCG 

Development Agreement. The Settlement Agreement itself expressly 

provides that “the Parties to this Agreement now desire to resolve their 
27

disputes and to compromise and settle all claims which each may have 

against the other, without any admission of liability on the part of 

anyone.” CR 1581.

Argent fails to explain how ARK’s intentions to clear the way for 

its new development constitutes “an absurd result.” Brief at 16. 

However, the plain language of the Guaranty defeats Argent’s claim. 

The Guaranty does not obligate Barnett if LCG settled a lawsuit over 

the LCG Development Agreement, regardless of who funded the 

settlement. Under the unambiguous language of the Guaranty, the 

Court should affirm the trial court’s award of summary judgment. 

B. Judicial estoppel cannot apply because the required 

elements of estoppel are not met.

Barnett is not judicially estopped by LCG’s pleading in the 

alternative in the LCG-City Lawsuit because the elements for judicial 

estoppel are not met. Under Texas law, judicial estoppel requires: “(1) a 

sworn, prior inconsistent statement made in a judicial proceeding; (2) 

which was successfully maintained in the prior proceeding; (3) not made 

inadvertently or by mistake, or pursuant to fraud or duress; and (4) 

which is deliberate, clear, and unequivocal.” Nine Syllables, LLC v. 

Evans, No. 05-13-01677-CV, 2015 WL 3932751, at *4 (Tex. App.—
28

Dallas June 26, 2015, no pet. hist.); Galley v. Apollo Associated Servs., 

Ltd., 177 S.W.3d 523, 528-29 (Tex. App.—Houston [1st Dist.] 2005, no 

pet.). Judicial estoppel does not apply here for three reasons: (1) there 

was no sworn, prior inconsistent statement; (2) the position was not 

successfully maintained; and (3) Barnett was not a party or in privity 

with a party to the lawsuit.

If there is no sworn inconsistent statement, judicial estoppel 

cannot apply. See Turner v. PV Int’l Corp., 765 S.W.2d 455, 461 (Tex. 

App.—Dallas 1988), writ denied, 778 S.W.2d 865 (Tex. 1989); 

Metroflight, Inc. v. Shaffer, 581 S.W.2d 704, 709 (Tex. Civ. App.—Dallas 

1979, writ ref’d n.r.e.). Argent can point to no sworn statement, 

therefore, judicial estoppel cannot apply. 

Contrary to Argent’s argument, Nine Syllables did not abrogate 

this requirement, but recognized that judicial estoppel requires “a 

sworn, prior inconsistent statement.” Nine Syllables, 2015 WL 

3932751, at *4 (emphasis added). The appellant in Nine Syllables

argued that judicial estoppel could not apply because the pleading in 

the prior lawsuit was not sworn. Id. at *5. This Court rejected that 

argument because the pleading was supported by sworn testimony—
29

live testimony at an injunction hearing and in affidavits. Id. (“The 

estoppel in this case is not based solely on Jacque’s pleadings in the 

prior lawsuit. The estoppel arises from Jacque’s sworn testimony . . .”). 

The Court did not endorse the notion proffered by Argent that judicial 

estoppel does not require a sworn statement.

Additionally, if there is no actual inconsistency,4 judicial estoppel 

cannot apply. Pleasant Glade Assembly of God v. Schubert, 264 S.W.3d 

1, 6-7 (Tex. 2008). Here, there is no actual inconsistency—LCG did not 

plead that the LCG Development Agreement had not terminated by its 

own terms on August 6, 2012, and indeed, recognized in its pleadings 

that it had so terminated. CR 1012-13, 1027. LCG, pleading in the 

alternative, alleged that the City should be estopped from arguing that 

it had terminated. CR 1045. Reading the pleading as a whole, LCG did 

not make a deliberate, clear, and unequivocal statement that the LCG 

Development Agreement had not expired on August 6, 2012.

 4 Argent cites Gabarick v. Laurin Maritime (America) Inc., 753 F.3d 550 (5th Cir. 

2014) for the proposition that pleading in the alternative does not preclude judicial 

estoppel. Gabarick, however, merely points out that judicial estoppel only applies 

when all of the elements of estoppel are present. See Gabarick, 753 F.3d at 554 

(noting that a court’s reliance on an alternative argument “makes all the 

difference.”). In that case, the party had convinced the prior court to accept its prior 

position and prevailed on the merits based on that position. Id.
30

Further, if the party does not gain some advantage by the 

statement, e.g., some relief from the prior court, judicial estoppel cannot 

apply. See Pleasant Glade, 264 S.W.3d at 8. Also, judicial estoppel does 

not apply where the party’s prior claims were dismissed. See Galley, 

177 S.W.3d at 529, n. 3. LCG did not obtain any relief on its alternative 

claim because the 193rd Court did not rule on the merits of that claim—

it simply ruled that the City’s immunity defenses did not preclude the 

claim, and later dismissed those claims.

Judicial estoppel also does not apply because Barnett was not in 

privity with LCG and therefore cannot be bound by LCG’s statements in 

the LCG-City Lawsuit. Privity does not exist merely when persons are 

interested in the same question, but requires an identity of interest in 

the legal right actually litigated. Texas Real Estate Commission v. 

Nagle, 767 S.W.2d 691, 694 (Tex. 1989). Privity connotes those who are 

in law so connected with a party to the earlier suit as to have such an 

identity of interest that the party represented the same legal right. See 

Texas Capital Sec. Mgmt., Inc. v. Sandefer, 80 S.W.3d 260, 266 

(Tex.App.—Texarkana 2002, pet. struck). For example, privity does not 

exist where a party is involved in both suits but in different capacities. 
31

See Flying Diamond-W. Madisonville L.P. v. GW Petroleum, Inc., No. 

10-07-00281-CV, 2009 WL 2707405 *6 (Tex. App.—Waco Aug. 26, 2009, 

no pet.).

Barnett did not have an identity of interest with LCG in the legal 

rights being litigated in the City-LCG Lawsuit because he was not a 

party to and had no legal interest in the LCG Development Agreement. 

The fact that his companies had separate agreements with LCG does 

not give him a legal interest in LCG’s agreement with the City. 

Accordingly, LCG could not have represented his interests. There also 

was no evidence that Barnett controlled the prior litigation or was a 

successor in interest to LCG. Under these circumstances, there is no 

privity. See Bob Short & Assocs., Inc. v. Heritage Res., Inc., No. 05-95-

00472-CV, 1996 WL 223680 *2 (Tex. App.—Dallas Apr. 30, 1996, writ 

denied).

Argent’s reliance on Nine Syllables to assert privity exists here is 

misplaced. In that case, a wife joined a bank in her divorce proceeding, 

claiming that a note and deed of trust were invalid and subject to 

forfeiture because the property was her homestead. Nine Syllables, 

2015 WL 3932751 at *2. She obtained a temporary injunction 
32

preventing the bank from foreclosing. Id. She and her new husband 

then formed a company to buy the note and deed of trust from the bank. 

Id. at *3. When the new company demanded payment from the 

husband, he filed a lawsuit seeking declaratory judgment that the note 

and deed of trust were unenforceable. Id. This Court affirmed the trial 

court’s finding that the company was in privity with the wife because 

she formed the company for the purpose of acquiring the note and deed

of trust, she signed the purchase agreement on behalf of the company, 

she was a part owner and managing member of the company, and she 

controlled the company’s actions in the lawsuit. Id. at *6.

There are no remotely similar facts in this case. Barnett was not 

an owner or manager of LCG, did not sign any agreements on behalf of 

LCG, and did not control LCG’s actions in the LCG-City Lawsuit. 

There was no privity and, for this additional reason, judicial estoppel 

does not apply.

CONCLUSION

The trial court correctly awarded Barnett summary judgment. 

The facts here conclusively establish that the LCG Development 

Agreement terminated by its own terms on August 6, 2012. 
33

Consequently, LCG could not have sold, assigned, or transferred the 

LCG Development Agreement. Moreover, regardless of whether the 

LCG Development Agreement had terminated or not, the facts 

conclusively establish that LCG did not sell, assign, or transfer the LCG 

Development Agreement or any interest in it. Texas law distinguishes 

between claims arising under a contract and rights or an interest in the 

contract. This case involves the former, not the latter. A “release” of 

claims arising under a contract is not a “transfer” of a contract or any 

interest in it. Accordingly, the Settlement Agreement did not trigger 

Barnett’s obligation to pay under the Guaranty, the condition precedent 

to Barnett’s performance under the Guaranty did not occur, and the 

trial court’s judgment should be affirmed.
34

Date: October 27, 2015 Respectfully submitted,

/s/ J. Robert Arnett II

J. Robert Arnett II

Texas Bar No. 01332900

barnett@carterscholer.com

CARTER SCHOLER ARNETT 

HAMADA & MOCKLER, PLLC

8150 N. Central Expy., Ste. 500

Dallas, Texas 75206

Tel: (214)-550-8188

Fax: (214)-550-8185

ATTORNEY FOR LAS 

COLINAS GROUP, L.P. AND 

BILLY BOB BARNETT
35

CERTIFICATE OF SERVICE

I certify that on October 27, 2015, I served all counsel of record 

with a copy of Appellees’ Brief via the Court’s electronic filing system.

/s/ J. Robert Arnett II

J. Robert Arnett II
36

CERTIFICATE OF COMPLIANCE WITH RULE 9.4(i)

Certificate of Compliance with Type-Volume Limitation,

Typeface Requirements, and Type Style Requirements

1. This brief complies with the type-volume limitation of TEX.

R. APP. P. 9.4(i)(2)(B) because this brief contains 6,709 words, excluding 

the parts of the brief exempted by TEX. R. APP. P. 9.4(i)(1).

2. This brief complies with the typeface requirements of TEX. R.

APP. P. 9.4(e) and the type style requirements of TEX. R. APP. P. 9.4(d) 

because this brief has been prepared in a proportionally spaced typeface 

using Microsoft Word for Mac 2011 in 14 font size and Century 

Schoolbook style.

Date: October 27, 2015 /s/ J. Robert Arnett II

J. Robert Arnett II

Attorney for Las Colinas Group, 

L.P. and Billy Bob Barnett