Reversed and Remanded and Majority and Concurring Opinions filed April 

1, 2014.

In The

Fourteenth Court of Appeals

NO. 14-12-00580-CV

ALPHAVILLE VENTURES, INC. AND NOAM BIZMAN, Appellants

V.

FIRST BANK, Appellee

On Appeal from the 189th District Court

Harris County, Texas

Trial Court Cause No. 2011-16429

MAJORITY OPINION

Appellants, Alphaville Ventures, Inc. (“Alphaville”) and Noam Bizman

(“Bizman”), appeal a summary judgment in favor of appellee, First Bank, in its suit 

to recover the balance due on a promissory note and guarantee. In their sole issue, 

appellants contend the trial court erred by granting summary judgment because 

First Bank failed to prove it is owner and holder of these instruments. We reverse 

and remand.
I. BACKGROUND

For purposes of this appeal, the following pertinent facts are undisputed.

Under the promissory note at issue, Small Business Loan Source LLC (“SBLS”) 

was the original lender, and 5M Corp dba Arby’s was the original borrower. Via 

an “Allonge to Promissory Note,” 5M Corp dba Arby’s assigned all its liabilities 

and obligations under the note to Alphaville. In conjunction with that assignment, 

Bizman, the president of Alphaville, signed a guarantee of Alphaville’s obligations

under the note, and Alphaville granted SBLS a security interest in certain 

equipment. Alphaville subsequently defaulted on the Note. First Bank filed suit,

alleging the note and guarantee had been assigned from SBLS to First Bank and 

seeking the amount due. 

First Bank filed an original motion for summary judgment followed by an 

amended motion—the operative motion. On March 30, 2012, the trial court signed 

a Final Summary Judgment ordering that First Bank recover the following from 

appellants, jointly and severally: $613,038.46 due on the note; pre- and postjudgment interest; attorney’s fees of $20,757, plus $5,000 for each stage of an 

appeal; and costs of court.

II. ANALYSIS

A party moving for traditional summary judgment must establish there is no 

genuine issue of material fact and it is entitled to judgment as a matter of law. See 

Tex. R. Civ. P. 166a(c); Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 

211, 215–16 (Tex. 2003). A plaintiff moving for summary judgment must 

conclusively prove all essential elements of its claim. Cullins v. Foster, 171 

S.W.3d 521, 530 (Tex. App.—Houston [14th Dist.] 2005, pet. denied) (citing 

MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex. 1986)). If the movant establishes its

right to summary judgment, the burden shifts to the nonmovant to raise a genuine 

2
issue of material fact. See Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 

(Tex. 1995). We review a summary judgment de novo. Valence Operating Co. v. 

Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). We take all evidence favorable to the 

nonmovant as true, consider the evidence in the light most favorable to the nonmovant, and indulge every reasonable inference and resolve any doubts in the 

nonmovant’s favor. See id.; Doe v. Boys Clubs of Greater Dallas, Inc., 907 

S.W.2d 472, 476–77 (Tex. 1995).

To collect on a promissory note, a plaintiff must establish (1) there is a note,

(2) the plaintiff is legal owner and holder, (3) the defendant is the maker, and (4) a 

certain balance is “due and owing.” McLernon v. Dynegy, Inc., 347 S.W.3d 315, 

324 (Tex. App.—Houston [14th Dist.] 2011, no pet.). On appeal, appellants do not 

challenge whether First Bank proved (1) validity of the note, (2) appellants are 

respectively the maker and guarantor, and (3) the amount awarded is the balance 

due and owing. Appellants’ only contention is that First Bank failed to prove it is 

owner and holder of the note and the guarantee and more specifically that it was 

assignee of these instruments from SBLS.

A. Preliminary Issues

We must address preliminary issues regarding (1) whether appellants’ 

pleading was sufficient to permit it to challenge the summary judgment, and (2) 

what evidence we may consider in reviewing the summary judgment.

1. Appellants’ Pleading

First Bank contends that appellants may not challenge whether First Bank 

proved it is assignee of the note and guarantee because appellants did not file a 

verified denial under Texas Rule of Civil Procedure 93. Rule 93 provides, “A 

pleading setting up any of the following matters, unless the truth of such matters 

3
appear of record, shall be verified by affidavit.” Tex. R. Civ. P. 93. One such 

listed matter is “A denial of the genuineness of the indorsement or assignment of a 

written instrument upon which suit is brought by an indorsee or assignee and in the 

absence of such a sworn plea, the indorsement or assignment thereof shall be held 

as fully proved.” Id. 93(8).

By its plain language, rule 93(8) requires a defendant to make a verified 

denial of the “genuineness” of the endorsement or assignment of the written 

instrument on which a suit is brought. See id. (emphasis added). Failure to file a 

verified denial under rule 93(8) waives a challenge only to the genuineness of an 

endorsement or assignment which has otherwise been produced; absence of a 

verified denial does not relieve the plaintiff of the burden to prove existence of the 

transfer. See Vahlsing v. Collier Cobb & Assocs. of Dallas, Inc., 560 S.W.2d 117,

117 (Tex. Civ. App.—Dallas 1977, no writ); see also Havens v. Ayers, 886 S.W.2d 

506, 510 (Tex. App.—Houston [1st Dist.] 1994, no writ) (following Vahlsing). 

Thus, in the absence of a sworn plea, issues such as execution, authority of the 

assignor, and genuineness of signatures are waived; however, these issues are 

dependent upon proof that an endorsement or assignment actually exists. See

Vahlsing, 560 S.W.2d at 118. If the existence of the endorsement or assignment is 

omitted from the movant’s summary-judgment proof, lack of proof of this material 

fact precludes summary judgment. See Vahlsing, 560 S.W.2d at 118; see also

Havens, 886 S.W.2d at 510. In the present case, appellants do not challenge the 

genuineness of an endorsement or assignment produced by First Bank. Rather, 

appellants contend that First Bank failed to prove existence of an endorsement or 

assignment. 

First Bank cites Calbert v. Associates Asset Management, LLC, No. 01-09-

01062-CV, 2010 WL 2305862, at *3 (Tex. App.—Houston [1st Dist.] June 10, 

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2010, no pet.) (mem. op.), in which the court suggested the borrower was 

precluded from challenging the lender’s summary-judgment evidence in a suit on a 

note because the borrower failed to file a verified denial under rule 93(8). 

However, Calbert is distinguishable from the present case because the face of the 

Calbert note contained an endorsement from the original lender to the plaintiff and 

the defendant failed to deny genuineness of that endorsement. See id.

First Bank also complains that appellants did not file a verified denial under 

rule 93(4). Rule 93(4) includes the following as a matter on which the defendant 

must file a verified denial: “That there is a defect of parties, plaintiff or defendant.” 

Tex. R. Civ. P. 93(4). Generally, a “defect of parties” refers to joinder problems 

involving necessary or indispensable parties. CHCA E. Houston, L.P. v. 

Henderson, 99 S.W.3d 630, 633 (Tex. App.—Houston [14th Dist.] 2003, no pet.). 

Appellants’ argument is not that the original lender is a necessary or indispensable 

party but rather that First Bank failed to prove an element of its claim because it 

did not establish it was owner and holder of the note. Accordingly, we conclude

appellants were not required to file a verified denial in order to challenge whether 

First Bank established it is owner and holder.

2. What Evidence We May Consider 

To prove it is owner and holder of the note and guarantee, First Bank 

presented the affidavit of its representative, Wayne Ballenger, and certain 

documents. Appellants filed a response contending First Bank failed to prove it is 

owner and holder of the instruments. Nine days before the summary-judgment 

hearing, First Bank filed a reply supported by Ballenger’s supplemental affidavit 

and further documents purporting to prove the assignment. Appellants moved to 

strike the supplemental evidence as untimely filed but did not obtain an express 

ruling on the motion. 

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Appellants contend we may not consider the supplemental evidence because 

it was untimely filed. First Bank urges that appellants waived this complaint by 

failing to obtain a ruling on their motion to strike. We conclude appellants were 

not required to obtain a ruling and the untimely supplemental evidence may not be 

considered as part of the summary-judgment record. 

Texas Rule of Civil Procedure 166a(c) provides, “Except on leave of court, 

with notice to opposing counsel, the motion and any supporting affidavits shall be 

filed and served at least twenty-one days before the time specified for hearing.” 

Tex. R. Civ. P. 166a(c). Summary-judgment evidence, whether supporting or 

opposing the motion, may be filed late, but leave of court is required. See id.; 

Benchmark Bank v. Crowder, 919 S.W.2d 657, 663 (Tex. 1996). We will treat 

late-filed evidence as part of the summary-judgment record as long as the trial 

court affirmatively indicated in the record that it accepted or considered the 

evidence. Auten v. DJ Clark, Inc., 209 S.W.3d 695, 702 (Tex. App.—Houston 

[14th Dist.] 2006, no pet.) (citing Stephens v. Dolcefino, 126 S.W.3d 120, 133–34 

(Tex. App.—Houston [1st Dist.] 2003, pet. denied)). Where nothing in the record 

indicates the trial court granted leave for the late filing, we presume the trial court 

did not consider the evidence. INA of Texas v. Bryant, 686 S.W.2d 614, 615 (Tex. 

1985); see Benchmark Bank, 919 S.W.2d at 663; Pipkin v. Kroger Tex., L.P., 383

S.W.3d 655, 663 (Tex. App.—Houston [14th Dist.] 2012, pet. denied); Tex.

Airfinance Corp. v. Lesikar, 777 S.W.2d 559, 561–62 (Tex. App.—Houston [14th 

Dist.] 1989, no writ). Leave to late file summary-judgment evidence “may be

reflected in a separate order, a recital in the summary judgment, or an oral ruling

contained in the reporter’s record of the summary judgment hearing.” Pipkin, 383 

S.W.3d at 663 (quoting Neimes v. Ta, 985 S.W.2d 132, 138 (Tex. App.—San 

Antonio 1998, pet. dism’d by agr.)).

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We conclude appellants were not required to obtain a ruling on their 

objection that the evidence was late filed because they were not required to object. 

Requiring a party to object that summary-judgment evidence was late filed would 

be inconsistent with (1) Rule 166a(c), which places the onus on the party filing the 

evidence to obtain leave of court, and (2) the dictate of the Texas Supreme Court, 

cited above, that we presume the trial court did not consider late-filed evidence 

unless the record affirmatively indicates it granted leave. See Neimes, 985 S.W.2d 

at 138; see also Dixon v. E.D. Bullard Co., 138 S.W.3d 373, 376 n.2 (Tex. App.—

Houston [14th Dist.] 2004, pet. granted, judgm’t vacated w.r.m.) (stating trial 

court’s denial of non-movant’s request to strike movant’s late-filed summaryjudgment evidence did not constitute implied ruling granting leave for late filing 

because such a conclusion would contradict burden on movant to timely file 

evidence or obtain leave of court); Luna v. Estate of Rodriguez, 906 S.W.2d 576, 

582 (Tex. App.—Austin 1995, no writ) (“If the movant files late summary 

judgment evidence and no order appears in the record granting leave to file, we 

presume the trial court did not consider the evidence regardless of whether the

nonmovant failed to object to the evidence.”) (latter emphasis added); But see

City of Coppell v. Gen. Homes Corp., 763 S.W.2d 448, 451–52 (Tex. App.—

Dallas 1988, writ denied) (holding appellate court could consider summaryjudgment response even if late filed because opposing party did not move to strike

and trial court did not strike sua sponte); but see also Neimes, 985 S.W.2d at 138 

(commenting City of Coppell was “plainly wrong”).

First Bank did not specifically request leave to late file the supplemental 

evidence. The record does not contain any express order granting leave or a record 

of the oral hearing. In its judgment, the trial court granted summary judgment

“[a]fter considering the pleadings, the motion, affidavits, and other evidence on 

7
file.” This language does not reflect the trial court considered the supplemental 

evidence. The trial court’s statement that it considered “affidavits,” in the plural, is 

not an affirmative indication it considered the supplemental affidavit; there were 

two affidavits (from Ballenger and First Bank’s attorney) attached to the motion 

for summary judgment, which the trial court may have meant by referencing

“affidavits,” in the plural. Additionally, the phrase “other evidence on file” is too 

general to necessarily encompass the supplemental evidence. The trial court did 

not state that it considered First Bank’s reply or the supplemental evidence 

attached to the reply.

First Bank cites several cases to support its contention that appellants were 

required to obtain a ruling on their objection to the late-filed evidence. Those 

cases are inapplicable because they hold that a party must object to a defect of 

form in summary-judgment evidence and obtain a ruling to preserve such a 

complaint—which is different than a contention that summary-judgment evidence 

was not timely filed. See Commint Tech. Servs., Inc. v. Quickel, 314 S.W.3d 646,

650 (Tex. App.—Houston [14th Dist.] 2010, no pet.); Seidner v. Citibank (S.D.) 

N.A., 201 S.W.3d 332, 334–35 (Tex. App.—Houston [14th Dist.] 2006, pet.

denied); Hou–Tex, Inc. v. Landmark Graphics, 26 S.W.3d 103, 112 (Tex. App.—

Houston [14th Dist.] 2000, no pet.).

Accordingly, we will not consider the supplemental evidence. We will 

address whether the evidence attached to the motion for summary judgment 

established First Bank is owner and holder of the note.

B. Summary-Judgment Evidence

We first outline the affidavit and documents presented by First Bank to 

prove it is owner and holder of the note and guarantee.

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1. Ballenger Affidavit

Ballenger signed the affidavit as “Vice-President” of First Bank and averred 

in pertinent part:

BEFORE ME, the undersigned authority, on this day, 

personally appeared Wayne Ballenger, who, upon first being duly 

sworn, states that he is an authorized representative of Plaintiff, and is

a custodian of the records for Plaintiff First Bank as assignee of 

[SBLS].

“My name is Wayne Ballenger. I am over eighteen (18) 

years of age and I have never been convicted of a felony 

crime or other crime involving moral turpitude, and I am 

fully competent to make this Affidavit. I have 

knowledge of the facts stated herein and they are all true 

and correct.

I am a duly authorized representative and a custodian of 

records for First Bank, as assignee of [SBLS]. Attached 

to Plaintiff’s Original Petition are records from First 

Bank, as assignee of [SBLS]. True and correct copies of 

the following documents are attached to Plaintiff’s

Original Petition: U.S. Small Business Administration 

Note, (Exhibit “A”); Allonge to Promissory Note 

(Exhibit “B”). U.S. Small Business Administration 

Unconditional Guarantee ( Exhibit “C”); Security 

Agreement Exhibit “D”); UCC Financing Statement 

(Exhibit “E”); Loan Assignment, Assumption and

Modification Agreement (Exhibit “F”), and Asset 

Purchase Agreement (Exhibit “G”). 

First Bank, as assignee of [SBLS], is the current owner 

and holder of the Note and guaranty agreement. A true 

and correct copy of the Loan Purchase and Sale 

Agreement dated September 21, 2009 and redacted to 

delete unrelated loan information is attached to this 

affidavit. 

9
These records are kept by First Bank, as assignee of 

[SBLS] in the regular course of business, and it was the 

regular course of business of [SBLS] for an employee or 

representative of [SBLS], with knowledge of the act, 

event, condition, opinion, or diagnosis recorded to make 

the record or to transmit information thereof to be 

included in such record; and the record was made at or

near the time or reasonably soon thereafter. The records 

attached hereto are the exact duplicates of the originals.

Defendant Alphaville Ventures, Inc. assumed all 

liabilities and obligations of 5MCorp. concerning the 

Note. Payment of the Note was guaranteed by 

Defendant/Guarantor, Noam Bizman as evidenced in the 

guaranty agreement. First Bank, as assignee of [SBLS], 

is the current owner and holder of the Note and Guaranty 

Agreements.

. . .1

The foregoing statements are true and correct. Further, 

Affiant sayeth not.”

In summary, Ballenger averred that First Bank is owner and holder of the 

note and guarantee, as assignee of SBLS, and referenced a Loan Purchase and Sale 

Agreement dated September 21, 2009 (“the PSA”).

2. Documentary Evidence

The PSA is the only document referenced by Ballenger that directly 

concerns the purported assignment from SBLS to First Bank.2

 The PSA, signed by 

officers of both parties thereto, states in pertinent part:

1 We omit Ballenger’s statements regarding demand for payment, appellants’ default, the 

amount due and owing, and First Bank’s claim for attorney’s fees—issues undisputed on appeal.

2 The Loan Assignment, Assumption and Modification Agreement and Asset Purchase 

Agreement referenced in the affidavit as Exhibits F and G to First Bank’s original petition 

concern the assignment of the loan from the original borrower to Alphaville.

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[SBLS] wishes to sell, and [First Bank] wishes to purchase, the 

loans and certain other assets owned by [SBLS] and referred to herein 

(collectively, the “Assets”), subject to the terms and conditions of this

Agreement.

Now, therefore, it is hereby agreed as follows:

1. In consideration of [consideration to be provided by First 

Bank to SBLS], the receipt and sufficiency of which is hereby 

acknowledged,3 [SBLS] will convey the Assets to [First Bank] by 

executing and delivering to [First Bank] (i) endorsements without 

recourse conveying to [First Bank] [SBLS’s] right, title and interest in 

the loans listed on Schedule A hereto (the “Loans”), and (ii) a Bill of 

Sale in the form attached hereto as Exhibit A, transferring [SBLS’s]

interest in the personal property listed on Schedule B hereto. . . .

. . .

5. [SBLS] agrees that, following the consummation of the 

Transactions, it will execute such other documents, including 

endorsements of notes and assignments of other documents relating to 

the Loans, and take such other actions as may be reasonably required 

by [First Bank] in order to provide evidence of the transfer of the 

Assets to [First Bank].

Before further explaining the documentary evidence, we will address 

appellants’ assertion that First Bank failed to establish appellants’ loan was subject 

to the PSA. We disagree. 

The parties agreed SBLS would convey to First Bank the loans listed on 

Schedule A, which is entitled “Loans Conveyed to First Bank” and included in the 

summary-judgment evidence. Schedule A has four columns for the entries 

thereon: “Loan Number”; “Name”; “State”; and “District.” As asserted in 

Ballenger’s affidavit, Schedule A was redacted to delete all entries except the 

following under the applicable columns:

3 We omit language regarding the consideration provided by First Bank to SBLS, 

interests excluded from the agreement, and the entities’ authority to enter into the PSA because 

those matters are not at issue in the present case.

11

 
6005 Arby’s TX Houston, Tx

It also appears that the beginning portion of the loan number on this entry is 

redacted.

The note and guarantee both show the name of the loan as “Arby’s.” The 

note shows the original borrower as “5M Corp dba Arby’s.” It is undisputed 5M 

Corp assigned its obligations under the note to Alphaville. The loan number on the 

note is redacted entirely, but the guarantee and the assignment under which 

Alphaville purchased the note from 5M Corp show the last four figures of the loan 

number as “60-05.” The summary-judgment evidence includes a “Lender’s 

Transcript of Account” (showing activity at various points throughout the life of 

the loan). The transcript lists the loan number as “6005,” with preceding numbers 

also redacted, and the borrower’s name as “Arby’s Alphaville Ventures Inc.” 

Ballenger swore this transcript was a true and correct copy of the transcript for 

appellants’ loan. We conclude the above-cited documents collectively show that 

appellants’ loan was included on Schedule A as a loan subject to the PSA. 

As appellants argue, the PSA itself did not effectuate a transfer to First Bank 

of “the loans and certain other assets” specified in the agreement. Instead, the PSA 

provided SBLS would consummate the contemplated transaction in the future via 

two steps: (i) executing and delivering endorsements without recourse conveying 

to [First Bank] [SBLS’s] right, title, and interest in the loans listed on Schedule A; 

and (ii) executing and delivering a Bill of Sale in the form attached as Exhibit A, 

transferring [SBLS’s] interest in the personal property listed on Schedule B. 

Notably absent from First Bank’s summary-judgment evidence are any 

separate documents constituting endorsements without recourse of the loans to be 

conveyed to First Bank, including appellants’ note and guarantee. Further, there is 

no endorsement on the note and guarantee that is attached to First Bank’s petition. 

12
The form Bill of Sale referenced in the PSA is not attached to the PSA contained in 

First Bank’s summary-judgment evidence. Rather, a fully executed Bill of Sale, 

dated September 30, 2009, is attached, although Ballenger did not refer in his 

affidavit to any executed agreements other than the PSA.4

 Accordingly, First Bank 

presented documentary proof of only one of the two steps required of SBLS to 

consummate the entire transaction.

5

Appellants assert, and First Bank acknowledges, that the Bill of Sale does 

not alone prove the transfer of appellants’ note and guarantee from SBLS to First 

Bank. The Bill of Sale provides in pertinent part: 

[SBLS], for good and valuable consideration paid and delivered 

by [First Bank], the receipt of which is hereby acknowledged, does 

sell to [First Bank] the Assets set forth on Schedule B attached hereto 

(the “Assets”).

[SBLS] hereby warrants that [SBLS] is the owner of the Assets 

free and clear of all mortgages, pledges, liens, charges, or 

encumbrances, except liens for current taxes not yet due and payable.

Receipt of delivery of the Assets is hereby acknowledged by 

[First Bank].

4 Although Ballenger did not reference the executed document, appellants raise no issue 

on appeal that the document was not authenticated.

5 Additionally, in the PSA, First Bank agreed to execute and deliver to First Bank an 

“Assignment and Assumption of Liabilities Agreement” in the form attached as Exhibit B. 

There is also no such form document attached to the PSA in the record. Instead, an executed 

document entitled “Representations and Warranties of First Bank In Connection with Its 

Purchase of a Loan Portfolio Pursuant To A Certain Loan [PSA] Dated September 21, 2009,” is 

attached. This title is different than the title of the document referenced in the PSA although the 

substance of the executed document essentially concerns First Bank’s assumption of SBLS’s 

liabilities relative to the subject loans. Regardless, we need not decide whether the executed

document is the document contemplated in the PSA because it was not one of the steps necessary 

to transfer the loans from SBLS to First Bank—the issue on appeal—and instead concerned the 

consideration to be provided by First Bank to SBLS.

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The PSA contemplated that the Bill of Sale would transfer SBLS’s “interest

in the personal property” listed on Schedule B, which is entitled “Assets Conveyed 

to First Bank” and included in the summary-judgment evidence. Schedule B is 

also redacted to delete unrelated loans but includes the following entry under 

columns for “SBA Loan Number” and “Borrower Name”: 

6005 Arby’s

It is not clear what “interest in . . . personal property” the PSA referenced. 

Nevertheless, the PSA did not contemplate that a Bill of Sale would be utilized to 

transfer all instruments governing the loans subject to the PSA, including 

appellants’ note and guarantee. The Bill of Sale used a broader term by referring 

to the sale and delivery of “Assets” listed on Schedule B, but “Assets” is not 

defined in the Bill of Sale. Further, on Schedule B, the list of “Assets” is contained 

on a separate paper entitled “Attachment I (Referenced in SBA Letter to First Bank 

dated 9/30/2009).” There is no such letter included in the summary-judgment 

evidence, and its contents are not otherwise reflected in the evidence. Thus, 

Schedule B does not otherwise shed light on what is meant by “Assets” transferred 

via the Bill of Sale. Construing “Assets” broadly to include all loan instruments 

would conflict with the PSA which contemplated the Bill of Sale would only 

transfer SBLS’s “interest in . . . personal property.” Because, under our standard 

of review, we must resolve this conflict in favor of appellants, we construe the Bill 

of Sale as transferring, at most, SBLS’s interest in personal property.6

6 As mentioned above, both the PSA and the executed Bill of Sale incorporate a Schedule 

B. There was only one Schedule B included in the summary-judgment evidence. It is unclear 

whether the same Schedule B was attached to both the original PSA and the executed Bill of 

Sale. However, that issue does not affect our analysis; even if that Schedule B is the same one 

incorporated in both the PSA and the executed Bill of Sale, the evidence shows at most that the 

Bill of Sale transferred some interest in appellants’ personal property.

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In addition to the above-described documents, First Bank presented (1) an 

affidavit of its attorney to support recovery of attorney’s fees, (2) Alphaville’s 

Response to Requests for Admission, and (3) excerpts from Bizman’s deposition. 

None of this evidence concerns the transfer of the note and guarantee from SBLS 

to First Bank.

C. Owner and Holder Status

Appellants suggest, and First Bank seems to acknowledge, the documentary

evidence does not alone establish First Bank is owner and holder of the note and 

guarantee. We agree. As discussed above, there is no documentary proof of the 

endorsements required to transfer the note and guarantee. Instead, First Bank 

suggests, and appellants dispute, that the affidavit itself, or in conjunction with the 

documents, established First Bank’s owner-and-holder status. Appellants proffer 

several reasons that the evidence failed to establish First Bank is owner and holder: 

(1) Ballenger did not explain how he gained personal knowledge of the contents of 

his affidavit; (2) the affidavit is conclusory; and (3) the affidavit is controverted by 

the documentary evidence. 

1. Objection Regarding Personal Knowledge

First, appellants contend Ballenger failed to establish how he gained 

personal knowledge of the contents of his affidavit. Appellants assert Ballenger 

averred merely that he is a “duly authorized representative and a custodian of 

records” for First Bank but such a statement did not demonstrate how he gained 

personal knowledge. However, our court has recently held that a contention that 

an affidavit fails to show the basis for the affiant’s personal knowledge is a 

complaint regarding a defect in form for which the complaining party must object 

in the trial court and obtain a ruling. Washington DC Party Shuttle, LLC v. IGuide 

Tours, 406 S.W.3d 723, 736 (Tex. App.—Houston [14th Dist.] 2013, pet. filed) (en 

15
banc). In their summary-judgment response, appellants included a footnote 

asserting Ballenger failed to establish he had personal knowledge of the facts in the 

affidavit. To the extent the footnote adequately constituted an objection, appellants

waived their complaint by failing to obtain a ruling.

2. Contention that Affidavit is Conclusory and Controverted

Appellants also contend Ballenger’s averment that First Bank, as assignee of 

SBLS, is owner and holder of the note is conclusory. This complaint is a challenge 

to an alleged substantive defect, which appellants may raise for the first time on

appeal. See Pico v. Capriccio Italian Rest., Inc., 209 S.W.3d 902, 909 (Tex. 

App.—Houston [14th Dist.] 2006, no pet.). A conclusory statement is “one that 

does not provide the underlying facts to support the conclusion.” Hou-Tex, Inc., 26 

S.W.3d at 112 (quoting Rizkallah v. Conner, 952 S.W.2d 580, 587 (Tex. App.—

Houston [1st Dist.] 1997, no writ)). Appellants complain that Ballenger failed to 

state any facts to support his averment. Appellants also argue the affidavit is 

controverted by the documentary evidence. We address these contentions together 

because our analysis is overlapping.

First Bank relies on Zarges v. Bevan, 652 S.W.2d 368, 369 (Tex. 1983), in 

which the Supreme Court of Texas held that an affiant’s testimony that an attached 

exhibit is a true and correct copy of a note and he is owner and holder is sufficient 

summary-judgment evidence to establish this status absent controverting evidence. 

However, Zarges was a suit by the original lender shown on the note who had 

misplaced the note and did not involve an alleged assignee attempting to recover 

on a note. See id.

First Bank also relies on McLernon, in which our court followed Zarges

when a plaintiff claimed it was owner and holder of a note via an assignment. 347 

S.W.3d at 326. In that case, the plaintiff’s representative averred as follows, inter 

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alia, in her affidavit supporting the plaintiff’s motion for summary judgment: (1) 

an attached exhibit was a true and correct copy of the note, and the plaintiff was 

legal owner and holder; (2) the note was made payable to another entity because 

that entity was a subsidiary of the plaintiff used to collect certain monies owed to 

the plaintiff; (3) on a certain date, the other entity “granted, transferred and 

assigned” all of its interest in the note to the plaintiff, including any rights or 

obligations to collect the balance owed; and (4) another attached exhibit was a true 

and correct copy of the “Assignment of Notes.” Id. at 325. We held that the 

affidavit was sufficient to prove the plaintiff was owner and holder of the note 

absent controverting evidence, although we concluded the documentary evidence 

also proved that status. Id. at 325–27; see also Nguyen v. Citibank N.A., 403 

S.W.3d 927, 930–31 (Tex. App.—Houston [14th Dist.] 2013, no. pet. h.) (holding 

affiant’s assertion of ownership of credit card account on behalf of bank was 

sufficient to establish such ownership absent controverting evidence and was not 

conclusory); Ortega v. Cach, LLC, 396 S.W.3d 622, 627–28 (Tex. App.—Houston 

[14th Dist.] 2013, no pet.) (holding bank officer’s statement in affidavit that 

defendant’s credit-card account was “sold, transferred, and set over unto” plaintiff 

creditor was not conclusory and supporting documentation was not required).

We conclude the above-cited authority is not controlling in the present case. 

Unlike in those cases, Ballenger’s statements, when considered together with the 

documentary evidence, cast doubt that there was underlying support for his 

averment that First Bank is owner and holder, as assignee of SBLS. Specifically, 

Ballenger did reference the facts on which he relied to support his averment, yet 

those facts do not provide such support. Construing the affidavit in the light most 

favorable to appellants, Ballenger indicated he was relying on only the PSA to 

support his averment. As discussed above, the PSA did not effect the transfer of 

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the note and guarantee and contemplated a future transfer via endorsements 

without recourse. The endorsements were not produced by First Bank. Further, 

Ballenger did not aver the endorsements were made or otherwise reference any 

endorsements. He did not even reference the executed Bill of Sale attached to his 

affidavit, much less explain why documentary proof was presented of only one of 

the two steps required under the PSA to consummate the entire transaction. For 

instance, he did not explain that his averment was based on the endorsements but 

articulate why they were not produced. Additionally, Ballenger did not reference 

or produce any other document assigning the loan instruments to First Bank if, 

despite the steps contemplated in the PSA, the transfer was effected through some 

means other than endorsements. Therefore, Ballenger’s indication he relied solely 

on the PSA negated there was underlying support for his averment that First Bank 

was assignee.

As mentioned above, in its reply to appellants’ summary-judgment response, 

First Bank attached supplemental documents purporting to prove the assignment,

which we may not consider.7

 However, in the reply, First Bank alternatively 

contended the supplemental documents were unnecessary because the evidence 

attached to the motion was sufficient. First Bank referenced only the PSA as 

proving the assignment, thereby indicating it was continuing to rely on a document 

that, to the contrary, did not effect the transfer.

7 In particular, First Bank presented (1) a “General Assignment,” dated several days 

before First Bank filed the reply, confirming SBLS had previously assigned all of its interest in 

appellants’ loan instruments to First Bank, and (2) a “Second Allonge,” with the same date, 

confirming SBLS had previously assigned all of its interest in the note to First Bank. In the 

reply, First Bank asserted these documents were produced to appellants through discovery 

responses five months before, although the documents were not even executed until a few days 

before the reply was filed. Regardless, First Bank may not rely on these documents to prove the 

transfer because they were late filed without leave of court.

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In summary, the trial court erred by granting First Bank’s motion for 

summary judgment because it failed to conclusively establish it is owner and 

holder of the note and guarantee. 

Accordingly, we sustain appellants’ sole issue, reverse the trial court’s 

judgment, and remand for further proceedings consistent with this opinion.

/s/ John Donovan

Justice

Panel consists of Chief Justice Frost and Justices Donovan and Brown. (Frost, 

C.J., concurring).

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