Reversed and Rendered and Opinion filed July 9, 2013.

In The 

## Fourteenth Court of Appeals

NO. 14
- 12
- 00574
- CV

WELLS FARGO BANK, N. A. FKA WELLS FARGO B ANK MINNESOTA, N.A., AS TRUSTEE FOR THE REGISTERED HOLDE RS OF J.P. MORGAN CHASE COMMERC IAL MORTGAGE SECU RITIES CORP., COMMERCIAL PA SS THROUGH CERTIFICATES , SERIES 2003
- PMI, ACTING THROUGH SERVICER ORIX CAPITA L

MARKETS, LLC , Appellant

V. MICHAEL B. SMUCK AND EDWIN A. WHITE, Appellee s

On Appeal from the 165th District Court

Harris County, Texas Trial Court Cause No. 2010
- 71304

O P I N I O N Appellant, Wells Fargo Bank, N.A. FKA Wells Fargo Bank Minnesota, N.A., as Trustee for the Registered Holders of J

. P

. Morgan Chase Commercial2

Mortgage Securities Corp., Commercial Pass Through Certificates, Series 2003

- PMI, act ing through service Orix Capital Markets LLC (“Wells Fargo”), appeals a take

- nothing judgment in favor of appellees, Michael B. Smuck and Edwin A. White, in Wells Fargo’s suit to recover under a Non

- Recourse Indemnification Agreement

. We reverse the trial court’s judgment and render judgment in favor of Wells Fargo against appellees, jointly and severally, for $10,068,453.49

. I. B ACKGROUND
MBS

- The Falls , Ltd. (“MBS

- The Falls”) was formed as a “ special purpose entity ” to borrow funds to acquire an apartmen t complex named “The Falls

. ” Another company, 9001 S. Normandale, L.L.C. (“Normandale”) , was formed to act as general partner of MBS

- The Falls. Smuck is the managing member of Normandale , and White’s company, Ed White & Associates, LLC, is a member. MBS

- The Falls executed a promissory note (“the Note”) for $9 million in favor of the lender and a deed of trust and security agreement pledging the real , and other personal , property as collateral

. By assignment, Wells Fargo eventually became holder of the se loan documents

. The nature of the loan was non

- recourse financing. Specifically , t he Note included a provision limit ing MBS

- The Falls’s liability to the property pledged as collateral , unless one of the “ N on
- R ecourse E xceptions” listed therein was satisf ied

. Two of the Non

- Recourse Exceptions, items (a) and (b) , are relevant in the present case. T h e provision containing the Non

- Recourse Exceptions state s , in pertinent part, 12. Exculpation . Subject to the provisions of this Section, Borrower ’ s liabilit y under this Note, the Security Instrument or the Other Security Documents shall only extend to the Mortgaged Property and other collateral given to secure the Debt, and Lender shall not enforce such liability against any other asset, property or funds of Borrower or any person or entity constituting Borrower; provided, however, the3

foregoing shall not: (a) impair the right of Lender to bring suit and obtain personal, recourse judgment against any person or entity (including Borrower or any person or entity constituting Borrower) relating to any losses sustained by Lender in connection with any fraud, intentional misrepresentation, waste, or misappropriation of tenant security deposits or rents collected more than one (1) month in advance by Borrower; (b) im pair the right of Lender to name, and obtain a judgment against any person or entity (including Borrower or any person or entity constituting Borrower) to the extent required by law to either obtain a judgment of specific performance with respect to any of the provisions of this Note, the Security Instrument or any of the Other Security Documents (other than any requirement contained therein to pay the Debt), or to foreclose the Security Instrument and obtain title to the Mortgaged Property and other collat eral given to secure the Debt ; . . . [(c)

- ( f )

— defined circumstances inapplicable in the present case]. Items (a) through ( f ) above are collectively the “Non

- Recourse Exceptions”. Borrower’s liability under the Non

Recourse Exceptions

. . . shall be lim ited to the amount of any losses or damages sustained by Lender in connection with such Non

Recourse Exceptions. . . . Thus, in the event of a default, including a deficiency on the balance owed after foreclosure, MBS

- The Falls’s liability was limited to the lender’s rights under the Non

- Recourse Exceptions. As a condition for making the loan, the lender required appellees to individually sign a “N ON

- R ECOURSE I NDEMNIFICATION AGREEMENT ” (“the Indemnification Agreement ”) , contemporaneously with execution of the note

. Both appellees a re defined as “Indemnitor , ” and Wells Fargo’s assignor is defined as “Lender,” under the Indemnification Agreement

. The pertinent provision of the Indemnification Agreement states,

2. Indemnity. INDEMNITOR HEREBY ASSUMES LIABIL ITY FOR AND AGREES TO PAY, PROTECT, INDEMNIFY, DEFEND AND HOLD HARMLESS LENDER (AND ANY ASSIGNEE OR PURCHASER OF ALL OR ANY INTEREST4

IN THE NOTE AND THE SECURITY INSTRUMENT) FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, COSTS AND EXPENSES (INCLUDING AT T ORNEYS’ FEES), CAUSES OF ACTION, SUITS, CLAIMS, DEMANDS AND JUDGMENTS WHICH AT ANY TIME MAY BE IMPOSED UPON, INCURRED BY OR AWARDED AGAINST LENDER AND FOR WHICH BORROWER AT ANY TIME MAY BE PERSONALLY LIABLE PURSUANT TO THE NON

RECOUR SE EXCEPTIONS (AS DEFINED IN PARAGRAPH 12 OF THE NOTE). EACH PERSON OR PARTY EXECUTING THIS INDEMNITY AGREES THAT THE LIABILITY HEREUNDER SHALL BE JOINT AND SEVERAL. As we will discuss, central to th e present case is Wells Fargo ’s conten tion th at appellee s assumed liability under the Indemnification Agreement for any liability of MBS

- The Falls under the Non

- Recourse Exceptions

. 1
MBS

- The Falls defaulted on the Note, and Wells Fargo foreclosed on the property. 2 Wells Fargo filed suit in Tarrant County, Tex as against MBS

- The Falls , Normandale, and appellees. Well s Fargo sought damages from MBS

- The Falls and Normandale under Non

- Recourse Exceptions (a) and (b) , alleging they committed waste and permitted liens to be filed on the property, thereby impairing t he value of the collateral and Wells Fargo’s right s relative to foreclos ure
. Wells Fargo pleaded claims against appellees under the Indemnification Agreement. Wells Fargo obtained a n interlocutory summary judgment (“the Tarrant County J udgment”) o n its cl aims against MBS

- The Falls and Normandale for $8,985,142.86, pre

-

judgment interest of $1,051,972.41, post

- judgment interest, and

1 This transaction was one of many transactions, for various different properties, involving the same non

- recourse financing arrangement , whereby an “MBS” entity execute d the note and appellees executed the indemnification agreement.

2 F or ease of reference, w e will refer to Wells Fargo throughout the remainder of this opinion as though it were the original lender.5

attorney’ s fees of $31,338.22 . The Tarrant County J udgment became final when Wells Fargo non

- suited , without prejudice , its cl aims against appellees in that suit. Wells Fargo then filed the present case in Harris County seeking recovery from appellees under the Indemnification Agreement for the Tarrant County J udgment against MBS

- The Falls

. The trial court conducted a bench tri al. Among other evidence, Wells Fargo offered the Note, the Indemnification Agreement, its petition in the Tarrant County case, and the interlocutory and final judgments in the Tarrant County case. On May 10, 2012, the trial court signed a final judgment ordering that Wells Fargo take nothing on its claims against appellees. The trial court subsequently made written findings o f fact and conclusions of law. II. A NALYSIS In its sole issue, Wells Fargo contends it conclusively prove d appellees’ liability u nder the Indemnification Agreement by presenting the Tarrant County J udgment which establish ed MBS

- The Falls’s liability under the Non

- Recourse Exceptions

. Appellees have filed separate brief s and present distinct arguments. Smuck’s sole argument is that the Indemnification Agreement is applicable only when MBS

- The Falls is liable to Wells Fargo under the Non

- Recourse Exceptions for a third

- party ’s claims against Wells Fargo

— not when MBS

- The Falls is liable under the Non

- Recourse Exceptions for Wells Fargo ’s own losses. In contrast, White seems to acknowledge appellees are liable under the Indemnification Agreement for any liability of MBS

- The Falls under the Non

- Recourse Exceptions. However, White argues (1) the Tarrant County J udgment awarded the defici ency owed under the N ote after the foreclosure and was not based on the Non

- Recourse Exception s , and (2) Wells Fargo failed to establish in the present case any6

circumstances, such as waste, triggering MBS

- The Falls’s liability under the Non

Recourse Excep tions

. A . Smuck’s Interpretation of the Indemnification Agreement We will first address Smuck’s argument because determining the extent of appellees’ liability under the Indemnification Agreement is preliminary to evaluating whether Wells Fargo proved th at liability. In construing a contract, we must ascertain the true intentions of the parties as expressed in the writing itself. Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am

. , 341 S.W.3d 323, 333 (Tex. 2011)

. W e must examine and consider the entire writing in an effort to harmonize and give effect to all p rovisions so that none will be rendered meaningless. Id. We begin this analysis with the contract ’ s express language. Id. If the written instrument is so worded that it can be given a certain or definite legal meaning or interpretation, it is not ambiguous , and we will construe the contract as
a matter of law. Coker v. Coker , 650 S.W.2d 391, 393 (Tex. 1983) ; see Italian Cowboy , 341 S.W.3d at 333. A ccording to Smuck, Wells Fargo incorrectly characterizes the Indemnification Agreement as appellees’ guaranty of any liability of MBS

- The Falls under the Non

- Recourse Exceptions

. Smuck contends the term “indemnity” or “indemnification” generally refers to an agreement to hold the indemnitee harmless against claims brought against the indemnitee by a third party. T herefore, Smuck contends the Indemnification Agreement is applicable only when some third party has a claim against Wells Fargo in connection with the Non

- Recourse Exception s

— not when Wells Fargo sustains its own losses in7

connection with the Non

- Recourse Exception s , as awarded in the Tarrant County J udgment

. 3 We reject Smuck’s c ontention. 4
W e apply the above

- cited rules of contract construction and consider the nature of the obligation to which the parties agreed and not merely the name of the agreement

. See Wells Fargo Bank, N.A. v. MBS

- Hills, Ltd. , No. 02

- 10

- 00289

- CV, 2011 WL 6141619 , at *3 (Tex. App.

— Fort Worth Dec. 8, 2011, no pet .) (mem

. op.) (citing Wood v. Canfield Paper Co. , 5 S.W.2d 748, 750 (Tex. 1928) ). Smuck’s interpretation does no t comport with the express language of the Indemnification Agreement , which is broader than urged by Smuck. Under the provision, appellees did agree to indemnify Wells Fargo for claims by a third

- party against Wells Fargo in connection with the Non

- Recour se Exceptions . However, the provision also clearly encompasses any of Wells Fargo’s own “losses, damages, costs and expenses” in connection with the Non

- Recourse Exceptions : INDEMNITOR HEREBY ASSUME S LIABILITY FOR AND AGREE S TO PAY , PROTECT, INDEMNIFY, DE FEND AND HOLD HARMLESS [Wells Fargo]

. . . FROM AND AGAINST ANY AND ALL

. . . LOSSES, DAMAGES, COSTS AND EXPENSES

. .

. WHICH AT ANY TIME MAY BE

. . . INCURRED BY

. . . [Wells Fargo] AND FOR WHICH [MBS

- The Falls] AT ANY TIME MAY BE PERSONALLY LIABLE PURSU ANT TO THE NON

RECOURSE EXCEPTIONS

. . . .

3 Smuck is the only appellee who advances this contention. As discussed below, Smuck is also the only appellee who unequivocally admits the Tarrant County J udgment was based on the Non

- Recourse Exception s.

4 Smuck incorrectly suggests the trial court adopted his interpretation of the Indemnification Agreement

. The trial court’s findings and conclusions demonstrate it determined appellees are liable for any liability of MBS

- The Falls under the Non

- Recourse Exceptions but Wells Fargo failed to prove the latter. N onetheless , we address Smuck’s argument because “[w]e must uphold a correct lower court judgment on any legal theory before it, even if the c ourt gives an incorrect reason for its judgment.” Guar

. Cnty

. Mut

. Ins. Co. v. Reyna , 709 S.W.2d 647, 648 (Tex. 1986) (per curiam) ; In re Wells , 252 S.W.3d 439, 446 (Tex. App.

— Houston [14th Dist.] 2008, orig. proceeding)

.8

(emphasis added). Consequently , contrary to Smuck’s contention, the Indemnification Agreement is essentially a guaranty. A “guaranty” is “an undertaking by one person to be answerable for the payment of some deb t or the performance of some contract or duty by another person, w ho himself remains liable.” Wood , 5 S.W.2d at 749 ; see Black’s Law Dictionary 773 (9th ed. 2009)

. The Indemnification Agreement funct ions as appellees’ guarant y of a ll MBS

- The Falls’s liability under the Non

- Recourse Exceptions

— whether MBS

- The Falls is liable for Wells Fargo’s own losses or liable for third

- party claims against Wells Fargo

. Moreover , Smuck’s proposed construction does not comport with the purpose sou ght to be achieved via the non
- recourse financing

. We construe contracts “from a utilitarian standpoint bearing in mind the particular business activity sought to be served” and “will avoid when possible and proper a construction which is unreasonable, in equitable, and oppressive.” Frost Nat’l Bank v. L & F Distribs., Ltd. , 165 S.W.3d 310, 312 (Tex. 2005)

. It is difficult to readily conceive of a situation in which a third

- party would assert a claim against Wells Fargo ( as MBS

- Th e Falls’s lender ) in connection with t he Non

- Recourse Exceptions at issue in this case ; i.e., for MBS

- The Falls’s causing waste of the property or impairment of Wells Fargo’s right to foreclos e
. Instead, it is Wells Fargo who would experience a loss due t o such conditions . Wells Fargo forewent any right to sue for the balance due on the note and was limited to the collateral in the event of MBS

- The Falls’s default. Waste or impairment of Wells Fargo’s right to foreclose c ould preclude Wells Fargo from re aliz ing the full value of the property at a foreclosure sale or force Wells Fargo to alleviate these conditions before it could realize the full value. Therefore, Wells Fargo clearly intended to9

protect the value of its collateral and ability to foreclose by retaining the right to

recourse against MBS

- The Falls ( and “any . . . entity constituting [MBS

- The Falls]”) under certain circumstances

. However, both MBS

- The Falls and Normandale (the “entity constituting [MBS

- The Falls]”) are limited liability entiti es. Further , as mentioned above, MBS

- The Falls is a special purpose entity, meaning it was formed solely to borrow funds to purchase the property. Accordingly, as recited in the Indemnification Agreement, Wells Fargo required appellees to execute the a gr eement as a condition for the loan ; and appellees agreed because “ [t] he extension of the Loan to [MBS

- The Falls] is a substantial benefit to [appellees]

. . . . ” Therefore, Wells Fargo clearly intended to preserve some viable recourse (against appellees) in the event MBS

- The Falls’s actions with in the N on
- Recourse Exceptions impaired Wells Fargo’s ability to realize full value of the property upon default and foreclosure

. It would be unreasonable to conclude Wells Fargo ensured MBS

- The Falls’s liability f

or all Wells Fargo’s losses in connection with the Non

- Recourse Exceptions yet Wells Fargo obtained appellees’ guaranty only when those losses involve t hird

- party claims against Wells Fargo.
In MBS

- Hills , 2011 WL 6141619, one of the other case s involv ing the same parties and financing arrangement , for a different apartment complex , th e court rejected Smuck’s interpretation of the Indemnification Agreement

. See id. at *3

– 5

. T he court analyzed the extent of appellees’ liability under the Indemnification Ag reement for Wells Fargo’s claim that the borrower /“MBS” entity committed waste and impaired Wells Fargo’s right to foreclose

. See id. at * 1

– 5. Applying established principles of contract construction , t he court construed the Indemnification Agreement in accordance with the particular business activity10

sought to be served

—

non
- recourse commercial financing. See id. at *3

– 5. Consistent with our reasoning, t he court recognized that , because the borrower and Normandale are limited liability entities, Wells F argo intended to retain recourse against appellees if the borrower ’s liability under the Non

- Recourse Exceptions

w as triggered. See i d

. at * 4. Therefore, t he court held Wells Fargo has full recourse against the borrower and , in turn, appellees for “the a mount of any losses or damages sustained by [Wells Fargo] in connection with such Non

– Recourse Exceptions ” (such as damages for waste) , but not for the entire amount due and owing under the note

. See i d. at *4

– 5 (emphasis in original)

. C on trary to Smuck’ s position , the court did not state the Indemnification Agreement applie s only to a third

- party ’s claims against Wells Fargo and is not a guarant y of all the borrower’s obligations under the Non

- Recourse Exceptions

. See id. at * 3

– 5. Rather, the court hel d appellees did not guarant ee all of the borrower’s obligations under the Note

— such as the full amount due and owing on the debt

. See i d. at *4

– 5. However, the court effectively held the Indemnification Agreement is a guaranty of all the borrower’s liab ility under the Non

- Recourse Exceptions , which would include Wells Fargo’s own losses in connection with the Non

- Recourse Exceptions

. See i d. ; s ee also White v. JPMC 2004

- C3 Trails Apartments LLC , N o . 02

- 12

- 00164

- CV , 2012 WL 6632776, at *2

– 3 (Tex. App.

— Fo rt Worth Dec

. 21, 2012 , no pet. ) (mem. op.) ( relative to same financing arrangement, for different property , affirming judgment holding appellees liable for losses incurred by lender’s assignee due to “MBS” entity’s committing waste on property; and constr uing Indemnification Agreement as providing , “if MBS did not make good on any obligation for which it was liable under recourse provisions of the note and deed of trust, [White] would make good on them ” ); White v. MLMT 2004

- BPC1 Carlyle Crossing, LLC , N o
. 02

- 10

- 00233

- CV , 2011 WL 3672022 , at11

*6 (Tex. App.

— Fort Worth Aug

. 18, 2011 , pet. denied ) (mem. op.) (same and expressly referring to Indemnification Agreement as a “guarantee”). In summary, we conclude appellees are liable under the Indemnification Agreem ent for any liability of MBS

- The Falls under the Non

- Recourse Exceptions. B. Proof Required to Establish Appellees’ Liability under the Indemnification Agreement Next, we turn to Wells Fargo ’s arguments regarding the proof requir e d in the present case to establish MBS

- The Falls is liab le under the Non

- Recourse Exceptions and thus appellees are liable under the Indemnification Agreement

. In this regard , Wells Fargo challenges several of the trial court’s findings of fact and conclusions of law: FINDINGS OF FACT 5

. Neither the Interlocutory Summary Judgment nor final judgment against [MBS

- The Falls] and [ Normandale ] in the previous lawsuit makes mention of the non

- recourse exceptions provided in section 12 of [the Note ]

. 6. Under the loan documents that are the basis for this law suit, [appellees] may only be held liable to [Wells Fargo] under the specific and defined situations listed in section 12 of [the Note ].
7. [Wells Fargo] has not proven that these specific and defined s i tuat i ons exist. [Wells Farg o] has failed to provide any evidence that these exceptions have been met.
CONCLUSIONS OF LAW
1. [Wells Fargo] failed to prove waste, or any other non

- recourse exception sufficient to trigger [appellees’] liability under Section 12 of [the Note ].12

2. [We lls Fargo] also failed to provide sufficient evidence at trial that the losses it sustained fall within these non

- recourse exceptions.
3. Accordingly, under the Non

- Recourse Indemnification Agreement, [appellees] should not be held liable to [Wells Fargo]

. Wells Fargo suggests Findings Nos. 6 and 7 are actually legal conclusions regarding interpretation of the Note and the Indemnification Agreement and these conclusions, as well as Conclusions Nos. 1, 2, and 3, are erroneous. Wells Fargo suggests these f

indings and conclusions indicate the trial court incorrectly determin ed Wells Fargo was required to establish a Non

- Recourse Exception against MBS

- The Falls in the present case ; i.e., establish MBS

- The Falls committed waste or impaired Wells Fargo’s right to foreclose. It is undisputed Wells Fargo did not offer evidence in the present case to establish a Non

- Recourse Exception

. However, Wells Fargo argues it was required to prove only that MBS

The Falls ha s already been found liable under a Non

- Recourse E xception. According to Wells Fargo, it satisfied that burden by proving the Tarrant County J udgment against MBS

- The Falls was based on two Non

- Recourse Exceptions

. Thus, Wells Fargo asserts Finding No. 5 is immaterial because i t was unnecessary for the T arrant County J udgment to mention a Non

- Recourse Exception

. If read in isolation, Findings No. 6 and 7 and Conclusions No. 1, 2, and 3 indicate the trial court conclud ed Wells Fargo was required to establish a Non

Recourse Exception in the present case

. However, such a conclu sion would conflict with Finding No. 5 ; that finding indicates the trial court determin ed proof Wells Fargo obtained a judgment against MBS

- The Falls under a Non

- Recourse Exception would be sufficient to trigger appellees’ liability under the Indemnification Agreement but Wells Fargo failed to offer such proof . When a trial court’s findings appear to conflict, they will be reconciled whenever possible.13

Zieba v. Martin , 928 S.W.2d 782, 791 (Tex. App.

— Houston [14th Dist.] 1996, no wri t ). Reconciling the above

- cited findings and conclusions, the trial court apparently determine d Wells Fargo was required to (1) prove it had obtained a judgment against MBS

- The Falls based on a Non

- Recourse Exception , or (2) absent such judgment, establis h a Non

- Recourse Exception in the present case. The trial court apparently further determined Wells Fargo did not satisf y either option, hence the court’s general Conclusion No. 3 : “under the Indemnification Agreement , [appellees ] should not be held liabl e to [Wells Fargo].” Nevertheless, t o the extent the trial court’s findings and conclusions are conflicting and it determined Wells Fargo was required to establish a Non

Recourse Exception in the present case , we disagree

. As discuss ed below, Wells Fargo proved the Tarrant County summary judgment was based on two Non

Recourse Exceptions. Axiomatically, a summary judgment for a plaintiff constitutes a judgment on the merits of a claim. See Tex. R. Civ. P. 166 a( c ) ; Cullins v. Foster , 171 S.W.3d 521, 530 (T ex. App.

— Houston [14th Dist.] 2005, pet. denied) (citing MMP, Ltd. v. Jones , 710 S.W.2d 59, 60 (Tex. 1986) and stating

a plaintiff moving for summary judgment must conclusively prove all essential elements of its claim )

. T herefore, a summary judgment agai nst MBS

- The Falls based on two Non

- Recourse Exceptions demonstrates MBS

- The Falls has been held liable under the Non

- Recourse Exceptions. As We lls Fargo asserts, requiring it to establish a Non

- Recourse Exception in the present case would amount to allow ing an impermissible , collateral attack on the Tarrant County J udgment

. Only a void judgment may be collaterally attacked. Browning v. Prostok , 165 S.W.3d 336, 346 (Tex. 2005)

. Undisputedly, the Tarrant County J udgment is not voi d. A collateral attack i s “an attempt to avoid the binding force of a judgment in a proceeding not instituted for the purpose of14

correcting, modifying, or vacating the judgment, but in order to obtain some specific relief which the judgment currently stan ds as a bar against

. ” Id. A t rial on the merits of a Non

- Recourse Exception in the present case could result in a fact

finder (1) determining MBS

- The Falls did not commit waste or impair Wells Fargo’s right to foreclose , inconsiste nt with the Tarrant County judgment, or (2) award ing a different amount of damages than the Tarrant County judgment . In such situations, appellees would effectively avoid liability under the Indemnification Agreement for some or all of the Tarrant County judgment by attacking the merits of the judgment. Finally, our conclusion is consistent with MBS

- The Hills

. That court held Wells Fargo failed to prove appellees ’ liability under Indemnification Agreement because (1) the summary judgment against the bo rrower and Normandale awarded damages representing the deficiency owed on the note

— not damages in connection with the Non

- Recourse Exceptions ; and (2) Wells Fargo did not otherwise offer evidence of such damages. 2011 WL 6141619, at *5

– 6. Therefore, the court implicitly recognized , consistent with our conclusion, a judgment against the borrower under a Non

- Recourse Exception w ould be sufficient to trigger appellees’ liabl ility under the Indemnification Agreement. See id. C. Proof Wells Fargo Obtained Jud gment against MBS
- The Falls under Non
- Recourse Exceptions. Wells Fargo essentially presents a challenge to legal sufficiency of the evidence supporting the trial court’s judgment in the present case by contending Wells Fargo conclusively proved the Tarran t County J udgment was based on Non

Recourse Exceptions

. When examining a legal

- sufficiency challenge, we review the evidence in the light most favorable to the challenged finding and indulge every reasonable inference that would support it. City of Kelle r v. Wilson , 16815

S.W.3d 802, 822 (Tex. 2005). We credit favorable evidence if a reasonable fact finder could and disregard contrary evidence unless a reasonable fact finder could not. Id. at 827. The evidence is legally sufficient if it would enable a r easonable and fair

- minded person to reach the verdict under review. Id. When, as in the present case, a party attack s legal sufficiency relative to an adverse finding on which it had the burden of proof , it must demonstrate the evidence conclusively esta blishes all vital facts in support of the issue. Dow Chem. Co. v. Francis , 46 S.W.3d 237, 241 (Tex. 2001). The fact finder is the sole judge of witness credibility and the weight to give their testimony. City of Keller , 168 S.W.3d at 819.
T he trial cour t found n either the Tarrant County interlocutory summary judgment nor the order non

- suit ing appellees and rendering the summary judgment final “make s mention of” the Non

- Recourse Exceptions

. We agree with Wells Fargo that it was not necessary for either o rder to express ly state the summary judgment represented recovery based on a Non

- Recourse Exception. In the interlocutory summary judgment, t he Tarrant County court order ed that Wells Fargo “recover on its claims against [ MBS

- The Falls ] and [ Normandale ] .

. . .” (emphasis added). Wells Fargo ’s petition in the Tarrant County suit demonstrates the only “ claims ” pleaded against MBS

- The Falls were for damages in connection with the Non

- Recourse Exception s
. T he following is the entire section of the petition in which Wells Fargo set forth its claims against MBS

- The Falls:
Defendants ’ Liability
19. The obligations of MBS

- Falls, Normandale, Smuck, and White under the Note and Guaranty are generally non

- recourse, unless certain exceptions to the non

- recourse na ture of the obligations exist. In this case, the following exceptions apply and the Defendants are16

personally liable for the losses, damages and expenses incurred by Plaintiffs pursuant to Sections 12(a) and 12(b) of the Note and Section 2 of the Guaranty : (a) Waste, as described below. (b) Impairment of Plaintiffs ’ right to foreclose on the Property, as described below.
W aste
20. Upon information and belief, MBS

- Falls and Normandale took unreasonable actions and u nr easonably failed to act in their managem ent of t he Property.
21. Pursuant to the Note, MBS

- Falls and Normandale are jointly and severally liable for the loss, damage and expenses incurred by Plaintiffs as a result of such actions. Likewise, pursuant to the Guaranty, Smuck and White are jointly and severally liable for the loss, damage and expenses incurred by Plaintiffs as a result of such actions. Impairment of Right to Foreclose
22. MBS

- Falls expressly agreed that impairing the right of Plaintiffs to foreclose on the Deed of Trust and obtai n title to the Property would be excepted from the otherwise non

- recourse nature of the Note: [Item 12 (b) of Non

- Recourse Exceptions]
23. Several liens remain on the Property even after the foreclosure, encumbering the title obtained by Plaintiffs in an d through the foreclosure sale. The liens r emaining on the Property total $72,570.28, exclusive of any accrued interest.
24. MBS

- Falls and its general partner Normandale are jointly and severally liable under the Note for any losses and damages arising f rom MBS

- Falls ’ s failure to clear the liens that have impaired17

Plaintiffs ’ rights to foreclose on the Property. Smuck and White are jointly and severally liable under the Guaranty for any losses and damages arising from MBS

- Falls ’ s failure to clear the li ens that have impaired Plaintiffs ’ rights to foreclose on the Property. Accordingly, the Tarrant County court did express the summary judgment was based on the Non

- Recourse Exceptions by ordering Wells Fargo recover on its “claims

. ” At trial of the presen t case, appellees did not present any evidence refuting the Tarrant County suit was based solely on the Non

- Recourse Exception s. On appeal, White makes a blanket assertion the summary judgment was “ nothing more than a deficiency judgment ” against MBS

- The Falls and Normandale for “the principal remaining on the Promissory Note, prejudgment interest and post

judgment interest.” However, White either cites no record references or cites a
non
- existent portion of the record to support his assertions

. As factu al background in the Tarrant County petition, Wells Fargo stated there remained a deficiency after the foreclosure . However , Wells Fargo asserted no claim for the deficiency. We recognize the Tarrant County petition was entitled “PLAINTIFFS’ SUPPLEMENTA L PETITION.” However, the supplemental petition reads as an amended original petition , rather than a supplemental petition

. An original petition or amended original petition (if necessary to add to, or withdraw, matters in the original petition) is the p leading in which a party alleges its claims, whereas a supplemental petition is used to respond to an allegation in the opponent’s most recent pleading. See Tex. R. Civ. P. 62, 64; Sixth RMA Partners, L.P. v. Sibley , 111 S.W.3d 46, 53

– 54 (Tex. 2003)

. In the “supplemental” petition, Wells Fargo recited it had previously filed an “Original Petition and Agree d Application for A ppointment of Receiver and Temporary Restraining Order,” pursuant to which a18

receiver was appointed and the property foreclosed upon . It is clear Wells Fargo then filed the “supplemental ” petition to (1) add claims under the Non

- Recourse Exceptions against MBS

- The Falls and Normandale, who were already defendants , and (2) add appellees as defendants for claims under the Indemnificatio n Agreement ( which were eventually non

- suited and re

- asserted in the present case)

. In the “supplemental” petition, Wells Fargo pleaded an e ntire cause of action, including identity of the parties, jurisdiction and venue, claims, and a prayer, as a party would do in an original or amended petition.
The re is no indication in our record that any Tarrant County defendant specially excepted to the misnomer and/or the petition was stricken. Thus, despite the misnomer , the “supplemental” petition constitut ed an operative petition for purposes of plead ing claims against MBS

- The Falls under the Non

- Recourse Exceptions

. See Sibley , 111 S.W.3d at 54

– 55 ( “[T]hough a pleading may be denominated a supplement it may actually constitute an amendment or set up a counter

- claim or cross

- action, and, if not excepted to but allowed to stay in the case until judgment, may be considered for all that it means instead of what it is called

. ” )

. B ecause the “supplemental” petition actually constituted an amended petition, it arguabl y superseded the original petition. See Tex. R. Civ. P. 6 5 ; Wren v. Tex

. Emp ’t Com m ’n , 915 S.W.2d 506, 508 (Tex. App.

— Houston [14th Dist.] 1995, no writ )

. On the other hand, by using the term “supplemental,” Wells Fargo arguably di d not super s ede its original petition. In the present case, Wells Fargo did not introduce the original petition to expressly negate it included a claim for the deficiency after foreclosure

. Regardless, Wells Fargo recited in the

“ supplemental ” petition t hat the original petition was filed before the foreclosure ;19

this recital is the only evidence regarding the date of those events. Accordingly, even if the original petition technically remained viable after filing of the

“ supplemental ” petition, the origi nal petition could not have included a claim for a deficiency because there was not yet any deficiency

. Alternatively , to the extent Wells Fargo might have asserted a claim for the deficiency in the original petition, Wells Fargo superseded that claim in the “ supplemental ” petition by expressly conceding its only avenue for recovery was via the Non

- Recourse Exceptions. At trial of the present case, appellees did not offer the original or any other petition in the Tarrant County suit to show Wells Fargo pl eaded any claims other than those based on the Non

- Recourse Exceptions. Moreover, t he interlocutory summary judgment does not support White’s contention. The Tarrant County court did not recite that the recovery represented the principal remaining on the Note. Rather, the court ordered that Wells Fargo recover “the principal amount of $8,985,142.86, prejudgment interest . . . postjudgment interest.” This language reflects the court used the term “principal” to mean the principal amount of the judgment, i .e., the damages, as opposed to interest, and not to mean the pri ncipal remaining on the Note. White also asserts in his brief , In the interest of expediency and cost

- saving, Appellant took a judgment against two unrepresented corporate defendants

. The m otion for this judgment lacked the level of proof to support a finding of waste and therefore the Trial Court found in favor of Appellees. Appellant now asks this Court to enforce an unchallenged and insuf ficient judgment against White. White again cites no record references to support his assertion, and the motion for summary judgment was not introduced at trial of the present case.20

Regardless , e ven if the non

- movant fails to respond, the movant must establish entitlement to traditional summary judgment as a matter of law. City of Houston v. Clear Creek Basin Auth. , 589 S.W.2d 671, 678 (Tex. 1979)

. If Wells Fargo failed to meet that burden relative to its claims under the Non

- Recourse Exceptions , MBS

- The Falls could have appropria tely raise d such complaint i n an appeal of th e summary judgment. White’s r aising th at complaint in the present

case constitutes an impermissible collateral attack on t h e judgment. See Browning , 165 S.W.3d at 346. Therefore, the s ummary judgment constitute s a judgment on the merits of MBS

- The Falls’s liability under the Non

- Recourse Exceptions even if the motion was unopposed or not supported by sufficient evidence

. As discussed above, i n return for the “ substantial benefit ” to ap pellees from the loan to MBS

- The Falls, appell ees guarantee d MBS

- The Falls’s liability under the Non

- Recourse Exceptions , with no limitation on how that liability might be established . Therefore, appellees agreed to the possibility they would be held liab le under the Indemnification Agreement if MBS

- The Falls failed to oppose or challenge a judgment against it under the Non

- Recourse Exceptions.
White also cites MBS

- The Hills to suppo rt his position that the Tarrant County J udgment merely represented a defi ciency judgment. However, MBS

- The Hills is distinguishable on this issue because that court held the record clear ly demonstrated judgment was rendered against the borrower and Normandale for the deficiency on the note after the foreclosure sale

— not damage s in connection with a Non

- Recourse Exception

. See 2011 WL 6141619, at *5

– 6. Thus, Wells Fargo did not prevail o n its claims against appellees under the Indemnification Agreement , a lthough the court agreed appellees would have be en liable for Wells Farg o’s damages in connection with the Non

- Recourse Exceptions. See id.21

Conversely , in the present case, Wells Fargo offered uncontroverted evidence it obtained judgment against MBS

- The Falls under the Non

- Recourse Exceptions. Finally, we point out that S m uck (but not White) unequivocally admits in his appellate brief the Tarrant County J udgment “was for waste damages caused Wells Fargo by [MBS

- The Falls].” We have discretion to accept a statement made in a brief as a judicial admission

. See Jansen v. Fit zpatrick , 14 S.W.3d 426 , 431 (Tex. App.

— Houston [14th Dist.] 2000 , no pet.) (citing Bowles v. Wade , 913 S.W.2d 644, 649 (Tex. App.

— Dallas 1995, writ denied) )

. 5 Irrespective of this admission,

w e have conclu ded Wells Fargo proved the Tarrant County J udgment was based on the Non

- Recourse Exceptions. However, this admission alone would support imposin g liability against Smuck under the Indemnification Agreement.
III. C ONCLUSION Wells Fargo established MBS

- The Falls is liable for $10, 068,453.49 under the Non

- Recourse Exceptions via the Tarrant County j udgment. Accordingly, Wells Fargo is entitled to recover that amount from appellees under the Indemnification Agreement

. We sustain Wells Fargo’s sole issue. We reverse the

5 Additionally, at trial of the present case, Wells Fargo offered both appellees’ responses to requests for admission. Smuck (but not White) admitted the following: (1) “[Wells Fargo] sued [MBS

- The Falls] to establish its liability under the non
- recourse exceptions provided for by the Note attached as Exhibit 2;” and (2) “[MBS

- The Falls’s] liability under the non

- recourse exceptions provided for by the Note was established by the summary judgment attached as Exhibit 3.” T he referenced Exhibi ts were not attached to the responses presented at trial. However , it is undisputed MBS

- The Falls was a “special purpose” entity formed to secure financing for T he Falls, thus indicating there was only one note executed by MBS

- The Falls. It also appears undisputed the Tarrant County judgment is the only summary judgment against MBS

- The Falls. Regardless, we need not rely on Smuck’s responses because of our analysis regarding the basis for the Tarrant County judgment and Smuck’s admission in his brief. H owever, we note the responses as presumably explaining why Smuck admitted the same fact on appeal and instead argues this fact does not entitle Wells Fargo to judgment under a legal interpretation of the Indemnification Agreement.22

trial court ’s judgment and render judgment that Wells Fargo recover $10,068,453.49 from appellees, jointly and severally

.

/s/ John Donovan Justice

Panel consists of Chief Justice Hedges and Justices Boyce and Donovan

.