Court Opinion

ID: 3087029
Source: CourtListenerOpinion
Date Created: 2015-10-16 03:04:49.35023+00
Date Added: 2024-06-11T12:46:51.254105
License: Public Domain

NUMBER 13-12-00704-CV

                            COURT OF APPEALS

                  THIRTEENTH DISTRICT OF TEXAS

                     CORPUS CHRISTI - EDINBURG

DONALD L. WILLIAMS,
ARONELL G. WILLIAMS, AND
A-TOUCH HOME HEALTH CARE, LTD.,                                           Appellants,

                                           v.

COMPASS BANK,                                                                Appellee.

                   On appeal from the 430th District Court
                         of Hidalgo County, Texas.

                         MEMORANDUM OPINION
  Before Chief Justices Valdez and Justices Benavides and Longoria
             Memorandum Opinion by Justice Benavides
      By one issue, appellants Donald L. Williams, Aronell G. Williams, and A-Touch

Home Health Care, Ltd. (collectively “the Williams parties”) appeal from the trial court’s

granting of appellee, Compass Bank’s (“the Bank”), traditional motion for summary
judgment. We affirm.

                                      I.      BACKGROUND1

       The underlying dispute in this case involves the foreclosure of five parcels of land

in Hidalgo County by the Bank against the Williams parties.                In October 2010, the

Williams parties filed an original petition and request for injunctive relief against the Bank

alleging wrongful foreclosure of five parcels of land. The Bank filed its answer and

asserted a counterclaim against the Williams parties alleging that the Bank made several

loans to the Williams parties as evidenced by promissory notes. The Bank alleged

further that the subject promissory notes were in default, and it sought to recover the

unpaid balance due on the notes, together with interest and attorneys’ fees.                In April

2011, the trial court signed an order granting the Williams parties’ motion to dismiss their

claims against the Bank with prejudice following a foreclosure forbearance and

settlement agreement reached between the parties (the Agreement).

       Pursuant to the Agreement, the Williams parties acknowledged that default had

occurred on the various promissory notes between the Williams parties and the Bank,

and that an indebtedness totaling $2,682,657.88 was due at that time and remained

unpaid. The Williams parties agreed to pay the total indebtedness to the Bank by the

final remedy date of June 7, 2011, in exchange for the Bank non-suiting its

counterclaim(s) against the Williams parties and releasing all liens and security interest

in the subject collateral.

       1
          On March 28, 2013, this Court issued a memorandum opinion and judgment in this cause number
dismissing the case for want of prosecution. Subsequently, the Williams parties filed a motion for
rehearing and to reinstate the appeal, which we granted. On April 25, 2013, we vacated our memorandum
opinion and judgment issued on March 28, 2013. We issue this memorandum opinion and accompanying
judgment today in their place.

                                                 2
       On July 9, 2012, the Bank filed a traditional motion for summary judgment in

support of its counterclaim for suit on a note and alleged that the Williams parties had

failed to comply with the terms of the Agreement and pay the Bank the amount agreed

upon by the parties. In its motion, the Bank asserted that the Williams parties owed

$2,754,992.29 with an aggregate interest per diem of $513.01. The Bank also sought

attorney’s fees and costs as detailed in the respective promissory notes.

       The Williams parties subsequently filed their answer to the Bank’s counterclaim,

asserted a general denial, and pleaded the affirmative defense of failure to mitigate

damages. The Williams parties also filed a response to the Bank’s motion for summary

judgment and argued that the Bank failed to mitigate its damages because the Williams

parties found a buyer to purchase one or more of the subject parcels of land for sale “for

approximately $1,400,000.00.” To support this argument, the Williams parties attached

an affidavit from Donald L. Williams that stated the following:

       A buyer was found. The buyer was willing to pay us approximately
       $1,400,000.00 for the property. [The Bank] refused to give its permission
       to the sale, even though the sale would have paid off the balance due on
       the debt to [the Bank] for [the Williams parties].

       I have never understood why [the Bank] would not give permission for me
       to sell the property for $1,400,000.00. If that sale had been allowed to go
       through, [the Bank] would have been paid in full. There was no good
       reason to deny the sale.

       The Bank filed a reply, in which it argued that the Williams parties acknowledge in

the Agreement that the total amount owed on the loans at the time of the agreement was

$2,682,657.88, which is an amount more than what would have been realized if the sale

had gone through for $1,400,000.00, according to Donald L. Williams.           The Bank

attached further evidence, which showed that it had foreclosed on the subject properties

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in June 2012 and sold three parcels for the respective amounts of $1,449,000.00,

$515,200.00, and $561,200.00. Based upon these sales, the Bank recalculated the

Williams parties’ indebtedness at $263,106.12, with an interest per diem rate of $105.87,

excluding post-judgment interest, attorney’s fees, and costs.2

        After a hearing on the motion, the trial court granted summary judgment in the

Bank’s favor and ordered the Williams parties to pay $269,564.19 with a per diem

interest rate of $105.87 starting from October 8, 2012.               The trial court further ordered

the Williams parties to pay reasonable and necessary attorney’s fees of $39,664.67, with

post-judgment interest and costs of court. This appeal followed.

                                           II.     ANALYSIS

        By one issue, the Williams parties assert that the trial court erred in granting the

Bank’s traditional motion for summary judgment.

        A.      Standard of Review

        A traditional summary judgment is proper when the summary judgment proof

establishes as a matter of law that there is no genuine issue of material fact as to one or

more of the essential elements of the plaintiff's cause of action or when the defendant has

conclusively established all elements of its affirmative defense.                      Scripps Texas

Newspapers, L.P. v. Belalcazar, 99 S.W.3d 829, 834 (Tex. App.—Corpus Christi 2003,

pet. denied) (quoting Am. Tobacco Co., Inc. v. Grinnell, 951 S.W.2d 420, 425 (Tex.

1997)).

        2
         According to the Bank, this figure was revised as of October 8, 2012 to $269,564.19 with interest
per diem of $105.87.

                                                    4
       We review a trial court’s ruling of a traditional motion for summary judgment de

novo. Belalcazar, 99 S.W.3d at 834. In our review, we follow these well-established

rules: (1) The movant has the burden of showing that there is no genuine issue of

material fact and that it is entitled to judgment as a matter of law; (2) in deciding whether

there is a disputed material fact issue precluding summary judgment, evidence favorable

to the nonmovant will be taken as true; and (3) every reasonable inference must be

indulged in favor of the nonmovant and any doubts must be resolved in favor of the

nonmovant. Grinnell, 951 S.W.2d at 425.

       B.     Discussion

       The Bank’s underlying action involves the enforcement of the various notes in this

case and recovery of the unpaid balance owed by the Williams parties.          According to

the record, the following facts are undisputed:   the Williams parties were indebted to the

Bank pursuant to seven promissory notes and were in default under the terms of the

promissory notes. In October 2010, the Williams parties filed an original petition and

request for injunctive relief against the Bank alleging wrongful foreclosure of the five

parcels of land.   Shortly thereafter, the Bank filed a counterclaim against the Williams

parties seeking enforcement and collection on the defaulted notes.        On February 22,

2011, the Williams parties and the Bank entered an agreement to “suspend . . . [the

Bank’s] collection efforts against the collateral pursuant to the [notes].”      Under the

agreement, the Williams parties agreed to dismiss with prejudice its causes of action

against the Bank and pay the Bank the total indebtedness by June 7, 2011 in exchange

for the Bank’s forbearance on its collection efforts related to the notes.    In April 2011,

the trial court signed an order granting the Williams parties’ motion to dismiss their

                                             5
claims against the Bank with prejudice following a foreclosure forbearance and

settlement agreement reached between the parties.         The Williams parties failed to

make payment by June 7, 2011.

       First, the Williams parties argue that the Bank was not entitled to summary

judgment based upon the Williams parties’ affirmative defense that the Bank failed to

mitigate its damages by refusing to sell the property to a buyer that the Williams parties

had found. We disagree.      The doctrine of mitigation of damages prevents a party from

recovering for damages resulting from a breach of contract that could be avoided by

reasonable efforts on the part of the plaintiff.   Great Am. Ins. Co. v. N. Austin Mun.

Utility Dist. No. 1, 908 S.W.2d 415, 426 (Tex. 1995). In other words, where a party is

entitled to the benefits of a contract and can save himself from the damages resulting

from its breach at a trifling expense or with reasonable exertions, it is his duty to incur

such expense and make such exertions.       Id. (quoting Walker v. Salt Flat Water Co., 96
S.W.2d 231, 232 (Tex. 1936)).        Although an injured party is required to exercise

reasonable efforts to minimize damages, it is not required to mitigate its losses “by

accepting an arrangement with the repudiator if that is made conditional on [its] surrender

of [its] rights under the repudiated contract.” Cook Composites, Inc. v. Westlake Styrene

Corp., 15 S.W.3d 124, 135 (Tex. App.—Houston [14th Dist.] 2000, pet. dism'd) (quoting

Publicker Chemical Corp. v. Belcher Oil Co., 792 F.2d 482, 488 (5th Cir. 1986)).

       Here, the Williams parties, as the breaching parties, had the burden of proving

that damages could have been mitigated.      See Copenhaver v. Berryman, 602 S.W.2d
540, 544 (Tex. App.—Corpus Christi 1980, writ ref’d n.r.e.). The Williams parties base

their failure to mitigate affirmative defense on testimony from Donald Williams, who

                                            6
found a buyer who was willing to pay “approximately $1,400,000” for one of the parcels

at issue, but the Bank refused to give Williams its permission for the sale.                   If the Bank

accepted this side arrangement with the Williams parties, it would have required the

Bank to surrender its rights and remedies under the promissory notes, as well as the

Agreement with regard to this particular parcel. Because the notes were in default, and

the Williams parties failed to pay their indebtedness by June 7, 2011, the Bank was not

required to mitigate its damages by forgoing its rights and remedies under the notes and

the Agreement.        See Cook Composites, 15 S.W.3d at 135. Without other evidence

that damages could have been mitigated, the Williams parties failed to raise a question

of fact on the Bank’s failure to mitigate.3

        The Williams parties next argue that a question of fact remained as to the

outstanding balance owed to the Bank. We, again, disagree. To recover a debt due

and owing under a promissory note, a party must establish that it is the legal holder of an

existing note, the debtor's execution of the note, and that an outstanding balance is due

and owing.         Austin v. Countrywide Homes Loans, 261 S.W.3d 68, 72 (Tex.

App.—Houston [1st Dist.] 2008, pet. denied).

        At the time the Agreement was entered into, the parties agreed that the total

indebtedness owed to the Bank by the Williams parties on the seven promissory notes

was $2,682,657.99, with an aggregate interest per diem of $513.01.                      After calculating

the agreed interest per diems, the debt totaled $2,743,706.07 on June 6, 2011. The

Bank submitted an affidavit from one of its senior vice presidents, Frank Hastings, who

        3
             We also note that the Bank had a right under the promissory notes to foreclose on the properties
prior to the Agreement reached in 2011 because the Williams parties were in default. The Agreement, by
itself, is further conclusive proof of the Bank’s attempt to exercise reasonable efforts to minimize damages
by forbearing its collection efforts and allowing the Williams parties to pay back its indebtedness.

                                                     7
testified that after a foreclosure sale on June 7, 2012, the Bank credited the Williams

parties with $2,525,400.00 against the total debt, which left a deficiency amount of

$217,793.06, with an interest per diem of $105.87. The deficiency amount increased to

$269,564.19, with an interest per diem of $105.87 at the time of the summary judgment

hearing.   The Williams parties argue, however, that the bid sheets submitted by the

Bank show an outstanding balance of $91,287.97, by using the figures listed under the

“anticipated deficiency remaining” line of the bid sheets. Such an argument, however,

is a mischaracterization of what the evidence actually shows.   The bid sheets show bid

prices related to foreclosed land, which when added together, totaled $2,525,400.00.

This figure supports the Hastings affidavit, and the credit given to the Williams parties.

After applying the credit of the foreclosures to the total indebtedness, the deficiency

amount equaled $217,793.06, which increased to $269,564.19 with a per diem interest

rate of $105.87 shortly before the summary judgment hearing.          Without more, the

Williams parties did not raise a genuine issue of material fact regarding the outstanding

balance owed.

      Therefore, after our de novo review, we conclude that the Bank established as a

matter of law that there is no genuine issue of material fact as to one or more of the

essential elements of the plaintiff's cause of action. The Williams parties’ sole issue on

appeal is overruled.

                                            8
                                  III.   CONCLUSION

      We affirm the trial court’s judgment.

                                                      __________________________
                                                      GINA M. BENAVIDES,
                                                      Justice

Delivered and filed the
16th day of January, 2014.

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