## No. 05-18-00052-CV 

# In the Fifth Court of Appeals

H ELEN A USTIN AND J OHN B ENNETT W HITE , IV, Appellants, 

### v. M ICHAEL W. M ITCHELL , Appellee.
On Appeal from Cause No. DC-17-17574 14 th Judicial District Court, Dallas County, Texas Hon. Eric V. Moyé, Judge Presiding


## R EPLY 

## B RIEF OF 

## A PPELLANTS

J. Bennett White Texas Bar No. 21309800

jbw@jbwlawfirm.com J. B ENNETT W HITE , P.C. P. O. Box 6250 Tyler, Texas 75711 903-597-4300 Telephone 903-597-4330 Facsimile C OUNSEL FOR A PPELLANTS
Oral Argument Requested ACCEPTED 05-18-00052-CV FIFTH COURT OF APPEALS

DALLAS, TEXAS 3/26/2018 6:09 PM LISA MATZ CLERK2 TO THE HONORABLE FIFTH COURT OF APPEALS: The temporary injunction granted by the trial court suffers from many infirmities: First , there is no likelihood that Mitchell has a viable cause of action against Austin. Second , any injury sustained by Mitchell is compensable in damages. Third , the evidence conclusively establishes the lack of an excessive demand and the lack of an effective tender. Fourth , the trial court has impermissibly modified the parties’ contracts by incorporating the “arbitrator’s” findings and award. These issues of great importance to every trial lawyer and commercial enterprise arise in the following context.

### T ABLE OF 

### C ONTENTS Table of Contents ............................................................................................................. .... 3 Table of Authorities .......................................................................................................... ... 4 Statement of Facts ............................................................................................................ ... 5 Brief of the Argument.......................................................................................................... 6 I. Mitchell Never Tendered the Just Amount Owed .............................................. 6
II. Mitchell Insists on Misreading the Parties’ Contracts ........................................ 7 III. Arbitration Hearing No Basis for Relief ........................................................... 10
IV. Mitchell Has No Evidence To Support His Contentions .................................. 11 A. Tender ....................................................................................................... 11
B. Excessive Demand .................................................................................... 11 Conclusion and Prayer ....................................................................................................... 1 3 Certificate of Compliance .................................................................................................. 14 Certificate of Service ........................................................................................................ . 15

34 

### T ABLE OF 

### A UTHORITIES
Cases Baucum v. Great Am. Ins. Co. of New York , 370 S.W.2d 863 (Tex. 1963) .................................... 6 Branch Banking & Trust Co. v. TCI Luna Ventures , LLC , No. 05-12-00653-CV, slip op. (Tex. App. – Dallas 2013, no pet.) ......................................................................................... 7, 9 Findlay v. Cave , 611 S.W.2d 57 (Tex. 1981) ............................................................................... 13 Staff Indus., Inc. v. Hallmark Contracting, Inc. , 846 S.W.2d 542 (Tex. App. – Corpus Christi 1993, no writ) ........................................................................................................ ......... 6 Stewart Beach Condo. Homeowners Ass’n, Inc. v. Gili N Prop Invs, LLC , 481 S.W.3d 336 (Tex. App. – Houston [1 st Dist.] 2015, no pet.) ................................................................ 12 Rules T EX
. R. A PP
. P. 38.1(g).................................................................................................................... 5 T EX
. R. C IV
. P. 9.4(i)(2)(C) ........................................................................................................... 145 

### S TATEMENT OF 

### F ACTS Mitchell does not contradict a ny facts stated by Austin. T EX
. R. A PP
. P. 38.1(g). Related Proceeding and Stay Austin’s principal brief asserts as a f act the existence of the previous stay order of this Court in Case No. 05-17-01309 -CV. In the interim, this Court has clarified the order staying proceedings below by its March 7, 2018 order in Case No. 05-17-01309-CV. Given this Court’s clarification of the ongoing stay of proceedings below, Austin withdraws her argument that the December 21, 2017 arbitration hearing were barred by this Court’s November 16, 2017 stay order.6 

### B RIEF OF THE 

### A RGUMENT I. Mitchell Never Tendered the Just Amount Owed Mitchell makes no attempt to dispute th e legal requirement of tender as a prerequisite to seeking injunctive relief ag ainst a foreclosure sale. See Appellee’s Brief, pp. 9-14. Instead, Mitchell insist s the injunction was supported by evidence he tendered the just amount owed. S ee Appellee’s Brief, p. 2 (“undisputed evidence”), p. 9 (“has tendered full payment” ), p. 10 (“has tende red payment”), p. 17 (“valid tender of payment” ). However, at no place does Mitchell cite to any evidence that he made “an unconditional offer to pay the amount due.” Baucum v. Great Am. Ins. Co. of New York , 370 S.W.2d 863, 866 (Tex. 1963); Staff Indus., Inc. v. Hallmark Contracting, Inc. , 846 S.W.2d 542, 548-49 (Tex. App. – Corpus Christi 1993, no writ). The evidence conclu sively established that the only way for Austin to receive payment of even the undisputed portion of the debt was to accept conditions not contained in the note or deed of trust. RR vol. 1, p. 22:16-20; p. 26:3-7. Even Mitchell concedes Conner altered the partie s’ deed of trust. See Appellee’s Brief, p. 5 (“... in accord with the process established in the Arbitrator’s Findings and Award”). Th ere was not an unconditional offer as required by law and M itchell makes no attempt to argue otherwise As a form of confession and avoidance, Mitchell contends he has “tendered” the amount owed through a contrived and a ltered definition of tender. Mitchell7 relies solely on Conner’s alteration of th e promissory note and deed of trust, insisting that Conner had the authority to allow Mitchell to make what would amount to a “conditional tender,” a comple tely absurd result. See Appellee’s Brief, p. 5. Under the terms of the prom issory note, Mitchell is obligated to pay Austin the amount agreed without any further action on her part. There is no provision in a typical promissory note to allow the borrower to withhold payment pending a pre-receipt commitment of acceptance from the seller. The borrower is obligated to tender the correct amount owed , and the lender is obligated to accept a correct tender – in that order. Even in the face of disagreement from the lender, the borrower bears the responsibility of tendering the correct amount. Without tender, there is no basis to enjo in foreclosure. Since the evidence conclusively establishes the absence of sufficient tender, the trial court’s injunction should be reversed and vacated.
II. Mitchell Insists on Misreading the Parties’ Contracts In her principal brief, Austin cited to numerous examples where the parties’ contracts were being misconstrued or misa pplied. As noted below, there can be no probable right of recovery for a claim ba sed on the incorrect interpretation of a

contract. Branch Banking & Trust Co . v. TCI Luna Ventures , LLC , No. 05-12- 00653-CV, slip op. at 6 (Tex. A pp. – Dallas 2013, no pet.). First, Austin demonstrated how a corre ct interpretation of the arbitration8 provision in the divorce De cree, as a matter of law, doe s not extend to the claims before the trial court. See Appellant’s Brief, pp. 21-26. Mitchell deflects the argument, characterizing this as an ancillary matter. See Appellee’ s Brief, p. 17. Second, Austin demonstrated that Mi tchell’s claim is predicated on an interpretation of the deed of trust that would bar Austin from demanding attorney’s fees incurred while collecting amounts du e under the promissory note, along with fees incurred while enforcing the deed of tr ust. See Appellant’s Brief, pp. 18-20. Mitchell counters by claiming that the deed of trust lien has been rendered void by Mitchell’s tender. See Appe llee’s Brief, p. 10. Mitche ll cites no authority for this contention. Further, Mitchell seems to ov erlook that the very language he quotes from the deed of trust requires paymen t of the note “... and all other amounts secured by this deed of trust.” See Appe llee’s Brief, p. 10. Mitchell’s argument ignores that the deed of trust secure s “other amounts.” RR Ex. 3, p. 2. Beyond that, Mitchell’s asserted cause s of action reflect an incorrect understanding of the respective roles of th e parties in conjunction with foreclosure of the deed of trust lien. The trustee’s ro le is to conduct the foreclosure sale when instructed by the lender. The trustee is obligated to proceed with the sale, unless and until the borrower remits payment. Once the borrower tenders payment in the amount demanded by the trustee, the trustee is obligated to cancel the sale; however, the trustee holds no lien to rel ease and has no authority to release the9 lender’s lien. The lender’s obligation to re turn the paid note and to release its lien does not materialize until pa yment is made. Mitchell attempts to alter that arrangement to require that Austin agree w ith the correctness of his tender in order to receive payment. Mitchell alleges th at Austin has breached her obligation to him under the deed of trust even though no money has actually been paid to her. See Appellee’s Brief, p. 10. There is no probability for su ch a claim to prevail. Were Mitchell to actually make an unconditional tender of the amount he deemed to be the correct amount and Austin were to accept that amount, but not release her lien, then Mitchell could claim that Austin was in br each by not releasing her lien. However, for him to do so without actually remitting payment is to bring a nonexistent claim. Mitchell’s brief makes no argument as to how the language of the note and deed of trust limit Austin to only recove ring attorney’s fees for the foreclosure
process. Each incorrect contract interpretati on accepted by the trial court amounts to legal error. Mitchell does no t dispute that the trial court abuses its discretion where it grants injunctive relief on an err oneous contract interpretation. Branch Banking , No. 05-12-00653-CV, slip op. at 6. A correct interpretation of the arbitr ation provision in the divorce Decree does not cover the claims brought by Mitchell within its scope. Accordingly,10 Conner’s December 21, 2017 hearing was not authorized by the parties and the trial court abused its discretion by relying on that proceeding in its Order. A correct interpretation of the promissory note and deed of trust does not require that Austin agree to accept the am ount offered in order to receive payment. There is no probability that Mitchell coul d recover on his breach of contract and declaratory judgment claims. In the absence of a probable right of recover, the trial court abused its discre tion by enjoining Austin from foreclosure. Therefore, the injunction should be vacated and reversed.
III. Arbitration Hearing No Basis for Relief The lynchpin of Mitchell’s entire position is his insistence that the parties are bound by Conner’s December 21, 2017 find ings. In her brie f, Austin not only asserted that Mitchell was misconstruing the arbitrati on provision in the Decree, but also that the evidence conclusively established that Conner’s hearing was not conducted in conformity with the Decree. See Appellant’s Brief, pp. 27-28. Mitchell does not address this argument in his brief. Austin points out that the trial court’ s willingness to adopt Conner’s findings conflicts with the court’s own assertion that it was not going to replicate proceedings in the divorce court. See A ppellant’s Brief, pp. 21-22. Similary, Mitchell cites to the same comments by the tr ial court. See Appellee’s Brief, pp. 17-18. Yet, while Austin cites to the in consistency between the court’s statement11 and its Order, Mitchell suggests the trial court deemed certain aspects of Austin appeal as beyond review. Similarly, M itchell insists that Conner’s findings are binding on the trial court and are not capable of review. See Appellee’s Brief, p. 19. Mitchell cites no authority and makes no argument to explain how this view would begin to pass muster under a due pr ocess analysis. Mitchell also ignores that there is no confirmed arbitration award and that the award is unenforceable until confirmed. The trial court abused its discretion by incorporating Conner’s arbitration award into its Order. Therefore, the in junction should be va cated and reversed.
IV. Mitchell Has No Evidence To Support His Contentions A. Tender As discussed above, Mitchell presen ted no evidence of legally sufficient tender.
B. Excessive Demand Mitchell argues there was evidence of excessive demand; however, Mitchell fails to identify that evidence. See Appe llee’s Brief, pp. 10-13. Mitchell simply argues as if the amount sought is facially and inherently excessive. See Appellee’s Brief, p. 10. In doing so, Mitchell i gnores the difference between evidence and argument of counsel. Mitchell also ignores that it was his burden to present sufficient evidence of an excessive demand; it was not Austin’s burden to prove12 the fees sought were reasonable. Stewart Beach Condo. Home owners Ass’n, Inc. v. Gili N Prop Invs, LLC , 481 S.W.3d 336, 346 (Tex. App. – Houston [1 st Dist.] 2015, no pet.) (probable right of recove ry required some evidence by homeowners in support of excessive demand claim). Instead, Mitchell places great emphasis on the injunction against foreclosure granted the property owners in Stewart Beach . See Appellee’s Brief, pp. 13-14, citing Stewart Beach , 481 S.W.3d at 341. In this regard, Mitchell ignores fundamental distinctions between the evidence in Stewart Beach and the evidence here.
In Stewart Beach , the property owners supported their allegation of excessive demand with testimony that th e attorney’s fees demanded by the lender were “’clearly excessive,’ not ‘reasonable,’ and ‘unconscionable’.” See Stewart Beach , 481 S.W.3d at 348 (expert te stimony required if attorney’s fees disputed). Mitchell presented no such evidence. See Stewart Beach , 481 S.W.3d at 347 (expert testimony required if attorney’s fees disputed). Further, the undisputed expert testimony concerning Austin’s atto rney’s fees is that the fees were reasonable and not excessive. RR vol. 1, p. 28:6-16; pp. 29:5 – 30:5. Conversely,
in Stewart Beach , the lender failed to introduce ex pert opinion testimony that its fees were reasonable. Stewart Beach , 481 S.W.3d at 347. Mitchell notes that the homeowners in Stewart Beach presented evidence of13 excessive demand. See Appellee’s Brief, pp. 14. However, M itchell fails to note (a) the absence of any such evidence here , and (b) the undisputed presentation of expert testimony to the contrary. Therefore, the nature of th e evidence in the record here is in direct contrast to that in Stewart Beach . While the homeowners in Stewart Beach carried their burden with expert testim ony, Mitchell provided no such evidence. While the lienholder in Stewart Beach presented no evidence that its attorney’s fees were reasonable, Austin supported the attorney ’s fees demanded with competent expert testimony. RR vol. 1, p. 28: 6-16; pp. 29:5 – 30:5. Fi nally, Mitchell attempts to equate a “less than full recovery” with “excessive,” which is plainly not the law. See Appellee’s Brief, p. 11; See Findlay v. Cave , 611 S.W.2d 57, 58 (Tex. 1981). In the absence of eviden ce of an excessive demand, Mitchell has no excuse not to tender the entire payoff amount demanded by Austin. Since Mitchell had no such evidence, the trial court abused its discretion by enjoining Austin’s foreclosure sale. Thus, the injunc tion should be vacated and reversed. 

### C ONCLUSION AND 

### P RAYER Austin prays that upon consideration of this matter that the Court sustain her various issues in opposition to the tem porary injunction. Accordingly, Austin requests that the preliminary injunction be reversed, vacated , and set aside. Austin requests that she be rendere d all relief capable of rend ition. For all relief that14 cannot be rendered, Austin requests the matter be remanded with instructions for further proceedings in the court below. Austin also prays for all other and furt her relief to which she may be justly entitled. Austin also requests general relief.

RESPECTFULLY SUBMITTED, J. BENNETT WHITE, P.C. P.O. Box 6250 Tyler, Texas 75711-7339 Telephone: (903) 597-4300 Telecopier: (903) 597-4330

___________________________ J. BENNETT WHITE jbw@jbwlawfirm.com State Bar No. 21309800



### C ERTIFICATE OF 

### C OMPLIANCE I certify that this Brief of Appellant s includes 2,284 words and thus complies with the T EX
. R. C IV
. P. 9.4(i)(2)(C).

___________________________ J. BENNETT WHITE15 

### C ERTIFICATE OF 

### S ERVICE I certify that on March 26, 2018, I serv ed a copy of this Brief of Appellants on the parties listed below by electronic service. My e-mail address is jbw@jbwlawfirm.com

. Jeffrey Cook Sullivan & Cook 600 E. Las Colinas Blvd., Suite 1300 Irving, Texas 75039 jcook@sullivancook.com Attorney for Michael Mitchell, Appellee

J. BENNETT WHITE