Court Opinion

ID: 3119611
Source: CourtListenerOpinion
Date Created: 2015-10-16 08:22:32.644468+00
Date Added: 2024-06-11T11:53:02.557835
License: Public Domain

Opinion issued February 7, 2013

                                     In The

                             Court of Appeals
                                    For The

                         First District of Texas
                          ————————————
                             NO. 01-11-00921-CV
                           ———————————
                         DAN SILVESTRI, Appellant
                                       V.
           INTERNATIONAL BANK OF COMMERCE, Appellee

              On Appeal from the 125th Judicial District Court
                           Harris County, Texas
                    Trial Court Case No. 2009-21107

                         MEMORANDUM OPINION

      Appellant, Dan Silvestri, challenges the trial court’s rendition of summary

judgment in favor of appellee, International Bank of Commerce (“IBC”), in IBC’s

suit against Silvestri for breach of a guaranty agreement and attorney’s fees. In
two issues, Silvestri contends that the trial court erred in granting IBC summary

judgment and denying him summary judgment.

      We reverse and remand.

                                    Background

       In its petition, IBC alleged that Silvestri and Tyler Todd1 had executed

personal guaranty agreements, each promising to pay one-half of the outstanding

debt owed to IBC by Rainsong Partners, Ltd. (“Rainsong”), which had defaulted

on three promissory notes secured by real estate liens. IBC further alleged that

concurrent with the execution of the promissory notes, Silvestri and Todd had

signed their guaranty agreements, under which they were each liable for “fifty

percent of the outstanding principal amount at the time of demand for payment,

accrued and unpaid interest, late charges, [attorney’s] fees, collection costs, and all

other sums owing by Rainsong to IBC.”

      In his answer, Silvestri generally denied IBC’s allegations and asserted that

“the foreclosure sale price of the property securing the indebtedness sought to be

recovered was less than the fair market value of such property on the date of the

foreclosure sale” and IBC “only is entitled to seek a deficiency judgment equal to

the difference between the amount owing on the note” and “the fair market value

of the Mortgaged Property.” In his counterclaim against IBC, Silvestri also sought

1
      Todd died during the pendency of this suit, and the trial court severed the claims
      against him.
                                          2
attorney’s fees from IBC if “successful in reducing and/or eliminating the

indebtedness sought to be recovered” by IBC.

      In his summary-judgment motion, Silvestri asserted that each of the

promissory notes were secured by deeds of trust and IBC foreclosed upon the

properties on April 7, 2009, purchasing the properties at the foreclosure sales. He

attached to his motion each of the deeds of trusts, which contained identical

addendums that define the “Mortgaged Property” for each note to include:

      [T]he escrowed sums described herein, if any, all goods, equipment,
      fixtures, inventory, machinery, furniture, furnishing, and other
      personal property that is now owned or hereafter acquired by Grantors
      and now or hereafter affixed to, or located on, the above described
      real estate . . . .

The addendums to the deeds of trust further provide:

      4.    Fair    Market   Value     for    Calculating     Deficiencies.
            Notwithstanding the provisions of §§ 51.003, 51.004 and
            51.005 of the Texas Property Code (as the same may be
            amended from time to time), and to the extent permitted by law,
            Grantors agree that Beneficiary shall be entitled to seek a
            deficiency judgment from Grantors and any other party
            obligated on the Note or guaranty of the Note equal to the
            difference between the amount owing on the Note and fair
            market value of the Mortgaged Property as hereinafter
            determined.

Silvestri asserted that the addendum unambiguously provides that IBC is entitled to

recover a deficiency judgment from Silvestri only if IBC proved the fair market

value of the mortgaged property, IBC presented no competent evidence of the fair

market value, and Silvestri was entitled to recover attorney’s fees from IBC.
                                         3
      In its amended summary-judgment motion, IBC asserted that the express

terms of the guaranty agreements, without reference to the deeds of trust, entitled it

to judgment as a matter of law. And it noted that on April 2, 2009, it made to

Silvestri its final demand of repayment before foreclosing on the properties on

April 7, 2009. IBC attached to its motion the real estate lien notes and guaranty

agreement, which contained an addendum that provides,

      Anything in the Guaranty to the contrary notwithstanding, the term
      “Guaranteed Indebtedness,” with respect to principal only, shall mean
      fifty percent (50%) of the outstanding principal amount at the time of
      demand by Lender on Guarantor for payment on the Guaranty of all of
      Borrower’s obligations to Lender (the “Obligations”), without giving
      effect to any prior or contemporaneous payment by any other
      guarantor(s).     Accordingly, for the purposes of calculating
      Guarantor’s liability pursuant to the Guaranty, the amount of the
      Obligations shall not be reduced by any payment or payments made
      by any other guarantor(s) on any of the obligations. The term
      Guaranteed Indebtedness shall also include fifty percent (50%) of all
      accrued and unpaid interest, late charges, attorneys’ fees, all costs
      incurred by Lender in connection with the Borrower to Lender arising
      in connection with the Obligations . . . .

IBC asserted that, at the time of demand, there was $858,251.80 owing on the first

note, $2,285,185.44 owing on the second note, $924,838.62 owing on the third

note, and $910,818.82 in accrued interest, expenses, and attorney’s fees, for a total

balance due of $4,979,094.68. It maintained that it was entitled to recover from

Silvestri one-half of this amount, or $2,489,547.34.       IBC also attached to its

motion its winning bids at the foreclosure sale, which indicated that the three

properties were sold to IBC for a combined total of $1,694,000. However, IBC
                                          4
argued that Silvestri was not entitled to a credit for the price paid at the foreclosure

sale because, at the time of demand, the foreclosure sale had not taken place.

        In its response to Silvestri’s summary-judgment motion, IBC asserted that,

even if Silvestri was entitled to a credit for the fair market value of the property,

the burden of establishing the credit rested with Silvestri.        It attached to its

response, in “an abundance of caution,” an appraisal of the three properties secured

by the real estate lien notes as evidence of their fair market value. The appraisal

reflected that on February 10, 2009, IBC’s appraiser, Phillip Barletta, valued the

three properties at $2,420,000. IBC also attached to its response an affidavit from

Barletta, in which he testified that the market value would not have “materially

changed” from the date of his appraisal to April 7, 2009, the date of the foreclosure

sale.

        Silvestri attached to his response to IBC’s summary-judgment motion, the

affidavit of Jack Hughey.         Hughey testified that Barletta’s appraisal was

“incomplete” because it failed “to give any value to the Municipal Utility District

(“MUD”) receivables, which are part of the ‘Mortgaged Property’ foreclosed upon

by the Bank and which will be payable to the Bank.” Based upon a previous

appraisal by Barletta made on October 31, 2005, Hughey valued the MUD

receivables “in excess of $1,800,000 as of April 7, 2009.” Thus, Silvestri argued,

the fair market value of the properties “substantially exceeded the indebtedness

                                           5
secured by the Deeds of Trust,” and he asserted that the Deeds of Trust put the

burden on IBC to prove the fair market value of the properties.       Silvestri also

attached to his response the affidavit of his attorney, Michael O’Connor, who

testified that, in his opinion, the attorney’s fees requested by IBC were “grossly

unreasonable” because there were “no depositions taken in this case and only

limited written discovery,” IBC’s attorney did “not even state the time spent by the

various attorneys on the case,” and the requested fees in case of appeal were

“unreasonable for any appeal of a summary judgment.”

      IBC objected to Hughey’s affidavit as “irrelevant, inadmissible hearsay,

unreliable and conclusory.” Specifically, IBC objected to Hughey’s reliance on

Barletta’s 2005 appraisal because it was made four years prior to the foreclosure

sale. And it noted that the 2005 appraisal was “subject to a review of the actual

costs by the appraiser after completion of the subject proposed property,” which

was never completed. IBC argued that the 2005 appraisal constituted hearsay

because, although an expert may reasonably rely on hearsay in forming an opinion,

it was not reasonable for Hughey to rely on an appraisal made four years prior to

the foreclosure sale. IBC further argued that because of the “irrelevance and

unreliable nature of the information relied upon by Mr. Hughey in his affidavit,”

his valuation of the MUD receivables at over $1,800,000 was “unsupported and

therefore conclusory.” IBC also asserted that O’Connor’s affidavit challenging its

                                         6
request for attorney’s fees was conclusory and “fail[ed] to establish how or why

IBC’s fees are unreasonable,” while the affidavit in support of its attorney’s fees

“expressly addresses each of the necessary standards.”

      Silvestri filed a Motion to Supplement Summary Judgment Response, and

he attached to it a second affidavit from Hughey “in order to correct technical

objections raised by [IBC].” In his second affidavit, Hughey testified that he had

exchanged emails with Rick Alejo and Alan Hirshman, engineers for the MUD of

which the properties in question where a part. Alejo and Hirshman explained that

a pending Municipal Bond sale would result in a payment to the bank of $941,130

and $2,034,273 of receivables remained to be reimbursed from future bond sales.

IBC objected to Silvestri’s motion, arguing that it was untimely because “all

evidence being used to oppose a summary judgment must be on file at least seven

days before the summary judgment hearing” and the supplemental evidence was

submitted after that deadline.    The trial court denied IBC’s objections and

permitted Silvestri to supplement his summary-judgment evidence with the second

Hughey affidavit.

      The trial court denied Silvestri’s summary-judgment motion, granted IBC’s

summary-judgment motion, and entered a final judgment that IBC recover

$2,626,527.66 in actual damages from Silvestri and $10,000 in post-judgment

attorney’s fees. The trial court also awarded IBC attorney’s fees in the amount of

                                        7
$15,000 “for any motion for new trial that is filed,” $50,000 “for an appeal to the

Court of Appeals if any such appeal is filed,” $50,000 “if a Petition for Review is

filed with the Supreme court,” and $50,000 “if the Petition for Review is granted.”

                               Standard of Review

      We review a trial court’s decision to grant or to deny a motion for summary

judgment de novo. See Tex. Mun. Power Agency v. Pub. Util. Comm’n of Tex.,

253 S.W.3d 184, 192, 199 (Tex. 2007) (citing rule for review of grant of summary

judgment and reviewing denied cross-motion for summary judgment under same

standard). Although a denial of summary judgment is not normally reviewable, we

may review such a denial when both parties move for summary judgment and the

trial court grants one motion and denies the other. Id. at 192. When the trial

court’s ruling granting one summary-judgment motion necessarily denies another

pending summary-judgment motion on the same issue, such as here, we imply the

ruling of denial. See Frank’s Int’l, Inc. v. Smith Int’l, Inc., 249 S.W.3d 557, 559

n.2 (Tex. App.—Houston [1st Dist.] 2008, no pet.). In our review of such cross-

motions, we review the summary-judgment evidence presented by each party,

determine all questions presented, and render the judgment that the trial court

should have rendered.     Tex. Mun. Power Agency, 253 S.W.3d at 192 (citing

Comm’r Court v. Agan, 940 S.W.2d 77, 81 (Tex. 1997)). If we determine that a

fact issue precludes summary judgment for either party, we remand the cause for

                                         8
trial. See Univ. of Tex. Health Sci. Ctr. at Houston v. Big Train Carpet of El

Campo, Inc., 739 S.W.2d 792, 792 (Tex.1987) (per curiam).

      To prevail on a summary-judgment motion, a movant has the burden of

proving that it is entitled to judgment as a matter of law and there is no genuine

issue of material fact. TEX. R. CIV. P. 166a(c); Cathey v. Booth, 900 S.W.2d 339,

341 (Tex. 1995). When a plaintiff moves for summary judgment on its claim, it

must establish its right to summary judgment by conclusively proving all the

elements of its cause of action as a matter of law. Rhone–Poulenc, Inc. v. Steel,

997 S.W.2d 217, 223 (Tex. 1999); Anglo–Dutch Petroleum Int’l, Inc. v. Haskell,

193 S.W.3d 87, 95 (Tex. App.—Houston [1st Dist.] 2006, pet. denied). When

deciding whether there is a disputed, material fact issue precluding summary

judgment, evidence favorable to the non-movant will be taken as true. Nixon v.

Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex. 1985). Every reasonable

inference must be indulged in favor of the non-movant and any doubts must be

resolved in its favor. Id. at 549.

                          Breach of Guaranty Agreement

      In his first issue, Silvestri argues that the trial court erred in denying him

summary judgment and granting IBC summary judgment because it allowed “only

the foreclosure bid prices as a credit on the indebtedness” even though the

addendums to the deeds of trust “specifically provided that the Bank shall be

                                         9
entitled to seek a deficiency against a guarantor only in an amount equal to the

difference between the indebtedness and the fair market value of both the real

estate and intangible property collateral.” Silvestri asserts that “the fair market

value of the collateral would completely eliminate any deficiency claim against”

him. IBC asserts that the plain language of the guaranty agreement describes the

guaranteed indebtedness as the outstanding principal amount at the time of

demand, which does not take into account the fair market value of the property.

Construction of the Guaranty

      Our primary concern in construing a written contract is to ascertain the true

intent of the parties as expressed in the instrument. Seagull Energy E & P, Inc. v.

Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006); Valence Operating Co. v.

Dorsett, 164 S.W.3d 656, 662 (Tex. 2005). Usually, the intent of the parties can be

discerned from the instrument itself. ExxonMobil Corp. v. Valence Operating Co.,

174 S.W.3d 303, 312 (Tex. App.—Houston [1st Dist.] 2005, pet. denied). When

an issue regarding the construction of a contract is presented, we must examine and

consider the entire writing in an effort to harmonize and to give effect to all the

provisions of the contract so that none will be rendered meaningless. Seagull

Energy E & P, Inc., 207 S.W.3d at 345. Contract terms will be given their plain,

ordinary, and generally accepted meanings unless the contract itself shows them to

be used in a technical or different sense. Dorsett, 164 S.W.3d at 662. When the

                                        10
parties have entered into an unambiguous contract, the courts will enforce the

intention of the parties as written in the instrument. Sun Oil Co. (Del.) v. Madeley,

626 S.W.2d 726, 731 (Tex. 1981).

      A guarantor’s liability is measured by the principal’s liability unless a more

extensive or more limited liability is expressly provided for in the guaranty. W.

Bank–Downtown v. Carline, 757 S.W.2d 111, 113 (Tex. App.—Houston [1st Dist.]

1988, writ denied). To determine the extent of the guarantor’s liability, we look to

the language of the guaranty agreement. Id. If the guaranty agreement is so

worded that it can be given a certain or definite legal meaning or interpretation, it

is not ambiguous, and we construe the contract as a matter of law. Id. at 114. If

uncertainty exists as to the meaning of the guaranty contract, and if two reasonable

interpretations may be made, we apply the construction most favorable to the

guarantor. Coker v. Coker, 650 S.W.2d 391, 394 & n.1 (Tex. 1983) (explaining

that “guarantor is entitled to have his agreement strictly construed so that it is

limited to his undertakings, and it will not be extended by construction or

implication”); Clarke v. Walker–Kurth Lumber Co., 689 S.W.2d 275, 278 (Tex.

App.—Houston [1st Dist.] 1985, writ ref’d n.r.e.).

      IBC largely relies on the following provision, found in the addendum to the

Silvestri guaranty, for the proposition that Silvestri was not entitled to a credit for

the fair market value of the properties,

                                           11
      Anything in the Guaranty to the contrary notwithstanding,
      “Guaranteed Indebtedness,” with respect to principal only, shall mean
      fifty percent (50%) of the outstanding principal amount at the time of
      the demand by Lender on Guarantor for payment on the Guaranty of
      all Borrower’s obligations to Lender (the “Obligations”), without
      giving effect to any prior or contemporaneous payment by any other
      guarantor(s).     Accordingly, for the purposes of calculating
      Guarantor’s liability pursuant to the Guaranty, the amount of the
      Obligations shall not be reduced by any payment or payments made
      by any other guarantor(s) on any of the Obligations. The term
      Guaranteed Indebtedness shall also include fifty percent (50%) of all
      accrued and unpaid interest, late charges, attorneys’ fees, all costs
      incurred by Lender in connection with the collection of the
      Obligations and the enforcement of the Guaranty, and all other sums
      owing by Borrower to Lender in connection with the Obligations, and
      all documents securing payment thereof and executed in connection
      therewith . . . .

IBC argues that because the addendum provides that “Guaranteed Indebtedness . . .

shall mean fifty percent (50%) of the outstanding principal amount at the time of

demand,” it provides a “method for ascertaining the guaranty liability” and

constitutes a “formulaic guaranty.”      The same addendum later provides that

“[c]apitalized terms used in this Addendum shall have the same meaning as

ascribed to such terms in the Guaranty unless defined otherwise herein.”

      IBC argues that the Deeds of Trust and their Addendums are not relevant to

Silvestri’s liability because Silvestri is not a party to them. However, the Silvestri

guaranty defines “Guaranteed Indebtedness” as “all liabilities and obligations of

Borrower . . . to Lender,” including, but not limited to, “any indebtedness, however

evidenced, whether by promissory note, bookkeeping entry, electronic transfer,

                                         12
checks, drafts or other items, or by any other manner or form.” It specifically

guarantees “the performance and discharge of the obligations of Borrower

specified under any and all promissory notes, letters of credit, and all other

documents and instruments (the “Security Instruments”) executed by Borrower

and/or other parties in connection with the Guaranteed Indebtedness.” Thus, the

Silvestri guaranty itself references the documents comprising the underlying

transaction in describing Silvestri’s obligations.

      Furthermore, the language and the context of the guaranty addendum reflect

that its purpose was not to provide the sole “method for ascertaining the guaranty

liability” as proposed by IBC. Immediately after the sentence providing that fifty

percent of the principal balance is due “at the time of demand,” the guaranty

addendum states that, “Accordingly, for the purposes of calculating Guarantor’s

liability pursuant to the Guaranty,” Silvestri’s obligations “shall not be reduced by

any payment or payments made by any other guarantor(s).” Thus, the purpose of

the guaranty addendum was to provide that one guarantor’s repayment of his

obligations did not discharge the other’s obligations.      Its purpose was not to

provide a “formula” or the sole method for calculating the underlying obligations.

      Accordingly, we look to the underlying documents to determine the extent

of Silvestri’s obligations.    See Carline, 757 S.W.2d at 113 (providing that

guarantor’s liability is measured by principal’s liability unless “expressly set forth

                                          13
in the guaranty agreement” that guarantor’s liability is to be measured otherwise);

First Union Nat. Bank v. Richmont Capital Partners I, L.P., 168 S.W.2d 917, 924

(Tex. App.—Dallas 2005, no pet.) (“Because a guaranty is ancillary to the

underlying contract, a dispute as to the rights and obligations of the guarantor can

only be resolved by a factual determination of the rights and obligations of the

parties to the underlying contract.”).

      In its brief, IBC notes that the Silvestri guaranty was executed “[c]oncurrent

with the execution of the Real Estate Lien Notes.”           Separate instruments or

contracts executed at the same time, for the same purpose, and in the course of the

same transaction are to be considered as one instrument, and are to be read and

construed together. Jones v. Kelley, 614 S.W.2d 95, 98 (Tex. 1981). Instruments

may be construed together even though they are not between the same parties. Id.

      Here, each real estate lien note incorporates the deeds of trust, stating that,

      Payment hereof is secured by a vendor’s lien retained in Deed of even
      date herewith, to the Borrower, and is additionally secured by a Deed
      of Trust, Security Agreement, and financing Statement of even date
      herewith, executed by the borrower and/or Granters thereof . . . .

The addendums to the deeds of trust further provide,

      4.     Fair    Market   Value     for    Calculating     Deficiencies.
             Notwithstanding the provisions of §§ 51.003, 51.004 and
             51.005 of the Texas Property Code (as the same may be
             amended from time to time), and to the extent permitted by law,
             Grantors agree that Beneficiary shall be entitled to seek a
             deficiency judgment from Grantors and any other party
             obligated on the Note or guaranty of the Note equal to the
                                          14
            difference between the amount owing on the Note and fair
            market value of the Mortgaged Property as hereinafter
            determined.

(Emphasis added.) Thus, the addendums to the deeds of trust, not the Silvestri

guaranty, provide the specific formula for calculating the underlying liability, i.e.,

the difference between the amount owing on the notes and the fair market value of

the mortgaged properties. And they provide that IBC is entitled to seek this

amount from the Grantors and “any other party obligated on the Note or guaranty

of the Note.”

      A review of all of the documents reveals that the intent of the parties was not

for IBC to be entitled to foreclose on the properties and then also receive the full

value owing on the notes from the guarantors, but instead to be made whole by

being entitled to foreclose upon the properties and then receive the remaining

portion of the debt not satisfied through foreclosure from the liable parties. Under

IBC’s interpretation, it would be entitled to recover from Silvestri $2,489,547.34

plus the properties, which had a value of at least $1,694,000, as evidenced by the

bids at the foreclosure sale. This would result in a total of $4,183,547.34 out of

$4,979,094.68 actually owed on the notes, without even considering the liability of

Todd, the second guarantor, from whom the rest of the deficiency is recoverable.

This total exceeds the principal indebtedness of $4,068,275.86. Were IBC allowed

to recover in this manner from both guarantors, it would receive a windfall by

                                         15
foreclosing on the properties and receiving the full amount of the indebtedness

from the individual guarantors, which, looking at all of the documents, would

circumvent the intent of the parties and go beyond merely making IBC whole.

      IBC primarily relies on two cases for the proposition that the addendum to

the Silvestri guaranty alone entitles it to recover the full amount due under the real

estate lien notes from the guarantors: Preston Ridge Financial Services

Corporation v. Tyler, 796 S.W.2d 772 (Tex. App.—Dallas 1990, writ denied) and

Humphreys v. Amwest Savings Association, No. 05-94-00969-CV, 1995 WL
479603 (Tex. App.—Dallas Aug. 8, 1995, no writ) (mem. op.) (not designated for

publication).   In Tyler, the defendant, Tyler, signed a guaranty agreement,

personally guaranteeing a portion of the amount due under a promissory note

secured by real property. 796 S.W.2d at 774. The guaranty provided that Tyler

was to pay “when due” all interest on the note and “that amount of principal

indebtedness equal to the amount by with the sum of the outstanding principal

balance of the indebtedness . . . exceeds $735,000.” Id. Tyler argued that because

the guaranty agreement provided that he was to pay the guaranteed portion of the

indebtedness “upon demand,” and the plaintiff had already foreclosed upon the

properties before it had made a demand, he was entitled to a credit from the

foreclosure proceeds, thereby reducing the guaranteed indebtedness below

$735,000. Id. at 778. The court held that Tyler’s liability was measured by the

                                         16
principal’s liability, which became fixed when the principal defaulted on the note

before the foreclosure sale. Id. at 779. The court specifically noted that the

guaranty was only for a portion of the underlying debt and that Preston Ridge

would not receive a windfall by applying the foreclosure proceeds to the

unguaranteed portion of the debt. Id. at 780.

     Likewise, in Humphreys, the defendant, Humphreys, executed a real estate

lien note, secured by a deed of trust, that provided that he was personally liable for

“all amounts of principal due at any time in excess of $432,149.00.” 1995 WL
479603 at *1. The deed of trust similarly limited Humphreys’ personal liability to

any amount due in excess of $432,149. Id. Humphreys argued that proceeds from

a foreclosure sale should be applied first to the portion of the debt on which he

agreed to be personally liable. Id. at *3. The court concluded that the principal

became due at the time of the acceleration, when no foreclosure sale had occurred,

so Humphreys was liable for all of the debt in excess of $432,149, without first

applying a credit for the foreclosure sale. Id. Again, the court noted that only a

portion of the debt was guaranteed, so the plaintiff was entitled to apply any

foreclosure proceeds to the unguaranteed portion of the debt. Id. at *3–4.

     Here, unlike in Preston Ridge and Humphreys, the entire portion of the debt

was guaranteed by Silvestri and Todd, so IBC would be entitled to a windfall were

it able both to foreclose on the properties and recover the entire indebtedness from

                                         17
    both guarantors.     And, most importantly, the documents comprising the

    underlying debt specifically provided a credit for the fair market value of the

    properties.2

Evidence of Fair Market Value

         IBC also argues that, even if Silvestri is entitled to a proportional credit for

the fair market value of the properties, he failed to satisfy that burden because he

“failed to present any competent evidence of the fair market value of the property

on the date of foreclosure.” Silvestri argues that he presented proper summary-

judgment evidence creating a “fact issue sufficient to defeat the Bank’s summary

judgment.”

         Silvestri attached Hughey’s affidavit to his response to IBC’s summary-

judgment motion. Relying upon an appraisal from Barletta made two months

before the foreclosure sale, Hughey valued the properties at $2,420,000, which he

testified was a reasonable value as of April 7, 2009, the date of the foreclosure

sale. Hughey also noted that the maximum bid prices at the foreclosure sale,

which were attached to IBC’s summary-judgment motion, totaled $2,240,000, and

IBC had been able to sell 31 vacant lots on the properties at $20,000 per lot.

2
         Because we hold that the deeds of trust are controlling and separately provide a
         credit for the fair market value of the properties, we need not address the parties’
         arguments concerning the default statutory provisions that provide a credit for
         proceeds from a foreclosure sale. See TEX. PROP. CODE ANN. § 51.003 (Vernon
         2007).
                                              18
Although IBC initially presented the Barletta appraisal as part of its own summary-

judgment evidence, it notes that the addendum to the deed of trust provides that the

properties “shall be valued in an ‘as is’ condition as of the date of the foreclosure

sale.” Thus, IBC now argues that because it took place two months prior to the

foreclosure sale, the appraisal is irrelevant and Hughey’s reliance on it is

conclusory. And IBC now asserts that it presented some evidence of fair market

value in the form of its winning bids at the foreclosure sale, which totaled

$1,694,000.   However, a respondent to a summary-judgment motion is “‘not

required to marshal its proof; its response need only point out evidence that raises a

fact issue on the challenged elements.’” Hamilton v. Wilson, 249 S.W.3d 425, 426

(Tex. 2008) (quoting TEX. R. CIV. P. 166a(i) cmt. (1997)).

      Indulging every reasonable inference in favor of Silvestri and taking his

evidence as true, we conclude that he at least presented a material issue of fact

regarding the fair market value of the properties, precluding the granting of

summary judgment in favor of IBC. Accordingly, we hold that the trial court erred

in granting IBC summary judgment and it did not err in denying Silvestri summary

judgment.3    See Nixon, 690 S.W.2d at 548–49.            We sustain the portion of

3
      We note that, in his briefing, Silvestri argues only that he raised a fact issue
      regarding the fair market value of the property, not that he conclusively proved the
      fair market value, entitling him to summary judgment. More important, in his own
      summary-judgment motion, Silvestri argued,

                                           19
Silvestri’s first issue in which he argues that the trial court erred in granting IBC

summary judgment. We overrule the portion of Silvestri’s first issue in which he

argues that the trial court erred in denying him summary judgment.

                                   Attorney’s Fees

      In his second issue, Silvestri argues that the trial court erred in awarding IBC

attorney’s fees because they are “grossly excessive,” he presented evidence that “at

very least creates a fact issue concerning the Bank’s attorney’s fees,” IBC’s

evidence supporting the award of attorney’s fees is “conclusory and insufficient,”

and, under the Silvestri guaranty, only a prevailing party is entitled to recover

reasonable and necessary attorney’s fees.

      The Silvestri guaranty provided for the award of attorney’s fees as follows,

      In the event any legal action or arbitration proceeding is commenced
      in connection with the enforcement of any declaration of rights under
      this Guaranty and/or any instrument or written agreement required or
      delivered under or pursuant to the terms of this Guaranty or the
      Guaranteed Indebtedness, and/or any controversy or claim, whether

             The Addendum clearly places the burden of proving [the fair market
             value] on [IBC], and there is no competent evidence of the fair
             market value of either all or parts of the Mortaged Property or of
             any difference between the amount owing on the Notes and the fair
             market value of the Mortgaged Property.”

      (Emphasis added.) And Silvestri attached Hughey’s affidavit to his response to
      IBC’s summary-judgment motion, in which he prayed only that the trial court
      deny IBC’s motion. Silvestri simply did not ask the trial court to render judgment
      on the ground that he conclusively proved the fair market value of the properties.
      Under these circumstances, it is appropriate to conclude that a genuine issue of
      material fact exists as to the fair market value of the properties and remand to the
      trial court for resolution. See Univ. of Tex. Health Sci. Ctr., 739 S.W.2d at 792.
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      sounding in contract, tort or statute, legal or equitable, involving in
      any way the Guaranteed Indebtedness, or any other proposed or actual
      loan or extension of credit involving Borrower, the prevailing party
      shall be entitled to recover reasonable and necessary attorneys’ fees,
      paralegal costs, expert witness fees and costs, expenses and costs and
      other necessary disbursements made in connection with any such
      action or proceeding, in the amount determined by the fact-finder or
      arbitrator.

(Emphasis added.) A prevailing party is the party “who successfully prosecutes

the action or successfully defends against it, prevailing on the main issue.” See

Johns v. Ram Forwarding, Inc., 29 S.W.3d 635, 637–38 (Tex. App.—Houston [1st

Dist.] 2000, no pet.). Thus, the Silvestri Guaranty expressly granted an award of

attorney’s fees only for the prevailing party. Having held that the trial court erred

in granting IBC summary judgment, we further hold that the trial court erred in

granting IBC its attorney’s fees, both at trial and on appeal. See Probus Properties

v. Kirby, 200 S.W.3d 258, 265 (Tex. App.—Dallas 2006, pet. denied) (reversing

trial court’s award of attorney’s fees to plaintiff, after holding that trial court erred

in not granting defendant judgment notwithstanding the verdict, because plaintiff

was no longer “prevailing party” under their contract).

      We sustain Silvestri’s second issue.

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                                   Conclusion

      We reverse the judgment of the trial court and remand for proceedings

consistent with this opinion.

                                            Terry Jennings
                                            Justice

Panel consists of Chief Justice Radack and Justices Jennings and Keyes.

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