Court Opinion

ID: 2821778
Source: CourtListenerOpinion
Date Created: 2015-07-30 05:29:05.645855+00
Date Added: 2024-06-11T11:31:03.620254
License: Public Domain

Affirmed and Opinion Filed July 29, 2015

                                       S   In The
                              Court of Appeals
                       Fifth District of Texas at Dallas
                                    No. 05-14-00851-CV

                     LSREF2 APEX (TX) II, LLC, Appellant
                                   V.
            GREGORY BLOMQUIST AND DANIEL D. DAVIDS, II, Appellee

                     On Appeal from the 219th Judicial District Court
                                  Collin County, Texas
                         Trial Court Cause No. 219-02840-2012

                           MEMORANDUM OPINION
                         Before Justices Bridges, Lang, and Schenck
                                 Opinion by Justice Bridges
       LSREF2 Apex (TX) II, LLC (Apex) appeals the trial court’s no-evidence summary

judgment in favor of Gregory Blomquist and Daniel Davids. In two issues, Apex argues the trial

court erred in striking its summary judgment evidence and entering summary judgment in favor

of Blomquist and Davids. We affirm the trial court’s orders granting Blomquist’s and Davids’

motions for summary judgment.

       On August 2, 2012, Wells Fargo Bank sued Blomquist and Davids alleging they had

entered into a guaranty with LaSalle Bank National Association in August 2006. The guaranty

guaranteed repayment of a $748,000 loan made by LaSalle to Real Holdings Group, LLC in

connection with property located in Giddings, Texas. Real Holdings executed a promissory note

pursuant to the loan. Wells Fargo alleged LaSalle assigned the loan documents to Wells Fargo
as trustee for certain holders of commercial mortgage securities in December 2006. In June

2012, the loan documents were assigned to Wells Fargo. Meanwhile, in January 2012, Real

Holdings defaulted on the promissory note. Wells Fargo alleged Blomquist and Davids refused

to pay under the guaranty, and this refusal was a breach of contract entitling Wells Fargo to

$740,652.15 plus interest and attorney’s fees.

       On August 24, 2012, Blomquist filed an answer asserting a general denial and the

affirmative defenses of “waiver and/or estoppel” and failure to mitigate damages. Blomquist’s

answer also contained a request for disclosure of, among other things, the names of the parties to

the lawsuit and the names of any potential parties. Davids filed a separate answer. On October

1, 2012, Wells Fargo filed separate motions for summary judgment on its claims against

Blomquist and Davids. On October 29, 2012, in separate orders, the trial court granted summary

judgment in favor of Wells Fargo against Blomquist and Davids. However, on November 28,

2012, the trial court entered an agreed order setting aside the orders granting summary judgment

and re-setting the motions for summary judgment for consideration at a future submission

hearing.

       On May 6, 2013, Wells Fargo allegedly assigned its rights under the loan documents to

Apex. On January 10, 2014, a motion for withdrawal and substitution of counsel was filed,

purportedly by Wells Fargo. The motion did not mention the assignment of the loan documents

or Apex. On March 4, 2014, the trial court granted the motion.

       On March 5, 2014, Blomquist and Davids filed motions for no-evidence summary

judgment. The motions alleged, in part, that the discovery period closed in June 2012, and Wells

Fargo conducted no discovery. The motions also alleged there was no evidence to support Wells

Fargo’s claims of breach of contract or to show who owned the guaranty contract. On March 6,

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2014, Blomquist’s counsel advised the parties that Blomquist’s motion for summary judgment

was set for a hearing on March 28, 2014.

       On March 21, 2014, Apex filed its first amended petition as “successor-in-interest to

Wells Fargo Bank.” The amended petition alleged that, on May 6, 2013, Wells Fargo assigned

to Apex all interest in the promissory note and guaranty. As owner and holder of the note,

guaranty, and assignments, Apex claimed it was entitled to recover all monies due and owing

under the terms of the note, guaranty, and assignments. Apex sought $501,772.56 plus interest

and attorney’s fees from Blomquist and Davids under the terms of the note and guaranty.

       The same day, Apex filed its response to Blomquist’s and Davids’ motions for summary

judgment. The response reiterated that the note and guaranty had been assigned to Apex, the

borrower on the note defaulted on its obligations, and Blomquist and Davids refused to pay

under the terms of the guaranty. Thus, Apex argued, there was more than a scintilla of evidence

to support each element of Apex’s claim for breach of the guaranty and to show the guaranty was

transferred to Apex. Attached to the response was the affidavit of Monica Knake, assistant vice

president of Apex.

       On March 27, 2014, Blomquist and Davids filed objections and motions to strike Apex’s

summary judgment evidence. The motions argued Apex could not show good cause for waiting

nearly eleven months to inform the court or the parties of the assignment of the note and

guaranty or to identify Knake as a witness, and the failure to timely disclose this information

meant it should be excluded under rule of civil procedure 193.6. The motions also objected to

the Knake affidavit as containing exhibits that were not filed with the clerk of the court fourteen

days prior to trial as required by rule of evidence 902(1) and therefore should not be admitted as

summary judgment evidence. The motions pointed out that the alleged transfer of the note and

guaranty to Apex took place almost seven years after the loan documents were executed and

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delivered to LaSalle. The motions argued Knake’s affidavit failed to establish how Knake had

personal knowledge of the record keeping of LaSalle, Wells Fargo as trustee, or Wells Fargo that

would allow her to testify the loan documents were the business records of Apex. The motions

objected to all of the paragraphs in the Knake affidavit concerning the note and guaranty, its

assignment to Apex, and the amounts due under the loan documents as hearsay outside Knake’s

personal knowledge.

       Following a hearing, the trial court entered orders sustaining the objections to the exhibits

attached to the Knake affidavit and to the Knake affidavit itself. The trial court granted the

motions for no-evidence summary judgment, and this appeal followed.

       In its first issue, Apex argues the trial court erred in sustaining the objections to the

Knake affidavit and the supporting loan documents.

       Parties have a duty to amend or supplement incomplete or incorrect responses to written

discovery reasonably promptly after the party discovers the necessity.           TEX. R. CIV. P.

193.5(a),(b). “A party who fails to make, amend, or supplement a discovery response in a timely

manner may not introduce in evidence the material or information that was not timely disclosed”

unless the court finds that good cause exists for the failure to disclose or any failure to timely

disclose will not unfairly surprise or unfairly prejudice the other parties. TEX. R. CIV. P.

193.6(a); Dyer v. Cotton, 333 S.W.3d 703, 717 (Tex. App.–Houston [1st Dist.] 2010, no pet.).

While exclusion is mandatory, the exception provides the trial court the opportunity to excuse

failure to comply in “difficult or impossible circumstances” or in otherwise excusable

circumstances. See Dyer, 333 S.W.3d at 717; Williams v. Cnty. of Dallas, 194 S.W.3d 29, 32–33

(Tex. App.–Dallas 2006, pet. denied) (no abuse of discretion in admitting undisclosed documents

supporting damages where face of pleading indicated such damages would be sought at trial).

The party seeking to admit the objectionable evidence bears the burden of establishing good

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cause or the lack of unfair surprise or prejudice. TEX. R. CIV. P. 193.6(b); see Norfolk S. Ry. Co.

v. Bailey, 92 S.W.3d 577, 581 (Tex. App.–Austin 2002, no pet.). One purpose of Rule 193.6(a)

is to prevent trial by ambush. See Alvarad v. Farah Mfg. Co., 830 S.W.2d 911, 914 (Tex. 1992).

         A disclosure made less than thirty days before trial is presumed to not be “reasonably

prompt.” TEX. R. CIV. P. 193.5(b). An appellate court reviews a trial court's decision to admit or

exclude evidence under an abuse-of-discretion standard. In re J.P.B., 180 S.W.3d 570, 575 (Tex.

2005). A court abuses its discretion if it acts without reference to any guiding rules or principles.

Carpenter v. Cimarron Hydrocarbons Corp., 98 S.W.3d 682, 687 (Tex. 2002). An appellate

court must uphold a trial court's evidentiary ruling if there is any legitimate basis in the record to

support it. TEX. R. CIV. P. 193.6(a), (b); Drilex Sys., Inc. v. Flores, 1 S.W.3d 112, 119–20 (Tex.

1999).

         Here, Wells Fargo allegedly assigned its rights under the loan documents to Apex on

May 6, 2013. However, Apex did not inform the trial court or the parties of this fact until March

21, 2014, more than ten months later and seven days before Blomquist’s and Davids’ motions for

summary judgment were set for a hearing. In addition, the documents purporting to show the

assignment of Wells Fargo’s rights to Apex were not presented until they were attached to

Apex’s response to Blomquist’s and Davids’ motions for summary judgment on March 21, 2014.

Under these circumstances, we conclude the trial court did not abuse its discretion in sustaining

Blomquist’s and Davids’ objections to Apex’s summary judgment evidence and striking the

evidence. See TEX. R. CIV. P. 193.6(a); Dyer, 333 S.W.3d at 717. We overrule Apex’s first

issue.

         In its second issue, Apex argues the trial court erred in granting Blomquist’s and Davids’

motions for summary judgment because Apex’s summary judgment evidence raised fact issues

on every challenged element of Apex’s claims.

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       We review a summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d
656, 661 (Tex. 2005)). In a no-evidence summary judgment, the movant represents that there is

no evidence of one or more essential elements of the claims for which the non-movant bears the

burden of proof at trial. Tex. R. Civ. P. 166a(i). We sustain a no-evidence summary judgment

when (a) there is a complete absence of evidence of a vital fact; (b) the court is barred by rules of

law or of evidence from giving weight to the only evidence offered to prove a vital fact; (c) the

evidence offered to prove a vital fact is no more than a mere scintilla; or (d) the evidence

conclusively establishes the opposite of the vital fact. King Ranch, Inc. v. Chapman, 118 S.W.3d
742, 751 (Tex. 2003).

       Less than a scintilla of evidence exists when the evidence is so weak as to do no more

than create a mere surmise or suspicion of a fact. Id. On the other hand, more than a scintilla of

evidence exists when reasonable and fair-minded people could differ in their conclusions based

on the evidence. Id. To raise a genuine issue of material fact, the evidence must exceed mere

suspicion. Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex. 2004). “Evidence that is so

slight as to make any inference a guess is in legal effect no evidence.” Id. A party may move for

a no-evidence summary judgment after an adequate time for discovery has passed. Id.

       Here, once the trial court struck Apex’s summary judgment evidence, there was no

evidence Apex had any claim under the loan documents assigned to Wells Fargo. Thus, once the

summary judgment was stricken, there was no evidence to support Apex’s claims. Accordingly,

the trial court did not err in granting Blomquist’s and Davids’ motions for summary judgment.

See Tex. R. Civ. P. 166a(i); Chapman, 118 S.W.3d at 751. We overrule Apex’s second issue.

                                                –6–
      We affirm the trial court’s orders granting Blomquist’s and Davids’ motions for summary

judgment.

140851F.P05
                                                  /David L. Bridges/
                                                  DAVID L. BRIDGES
                                                  JUSTICE

                                            –7–
                                         S
                               Court of Appeals
                        Fifth District of Texas at Dallas
                                       JUDGMENT

LSREF2 APEX (TX) II, LLC, Appellant                  On Appeal from the 219th Judicial District
                                                     Court, Collin County, Texas
No. 05-14-00851-CV         V.                        Trial Court Cause No. 219-02840-2012.
                                                     Opinion delivered by Justice Bridges.
GREGORY BLOMQUIST AND DANIEL                         Justices Lang and Schenck participating.
D. DAVIDS, II, Appellees

     In accordance with this Court’s opinion of this date, the judgment of the trial court is
AFFIRMED.

        It is ORDERED that appellees GREGORY BLOMQUIST AND DANIEL D. DAVIDS,
II recover their costs of this appeal from appellant LSREF2 APEX (TX) II, LLC.

Judgment entered July 29, 2015.

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