Court Opinion

ID: 4072698
Source: CourtListenerOpinion
Date Created: 2016-09-30 03:08:32.449607+00
Date Added: 2024-06-11T14:27:31.194918
License: Public Domain

ACCEPTED
                                                                                             01-15-00604-cv
                                                                                 FIRST COURT OF APPEALS
                                                                                         HOUSTON, TEXAS
                                                                                       11/4/2015 4:34:10 PM
                                                                                      CHRISTOPHER PRINE
                                                                                                     CLERK

                              No. 01-15-00604-CV

                                                                        FILED IN
                                                                 1st COURT OF APPEALS
                       In the Court of Appeals                       HOUSTON, TEXAS
                   For the First District of Texas               11/4/2015 4:34:10 PM
                                                                 CHRISTOPHER A. PRINE
                             At Houston                                  Clerk

D&R Constructors, Inc., Michael Rushing, Stephanie Rushing,
          Penn Rushing, and Florence Rushing,
                                    Appellants,

                                        v.

  Texas Gulf Energy, Inc. on behalf of CS Bankers V LLC and
               Texas Gulf Fabricators, et al.,
                                      Appellees.

            Appeal from the 270th District Court of Harris County, Texas;
           Trial Court Cause No. 2013-00543; Hon. Brent Gamble, Presiding

      Brief of Appellees Texas Gulf Fabricators, LLC,
           Brian G. Hendry, and Lester H. Smith

                                      Dobrowski, Larkin & Johnson L.L.P.
                                           Paul J. Dobrowski
                                           State Bar No. 05927100
                                           pjd@doblaw.com
                                           Cody W. Stafford
                                           State Bar No. 24068238
                                           cstafford@doblaw.com
                                      4601 Washington Ave, Suite 300
                                      Houston, Texas 77007
                                      Counsel for Appellees Texas Gulf Fabricators, LLC,
                                      Brian G. Hendry, and Lester H. Smith

Oral Argument Requested                                           November 4, 2015
                 Identity of Parties and Counsel

Appellants:                   D&R Constructors, Inc.; Michael Rushing;
                              Stephanie Rushing; Penn Rushing; Florence
                              Rushing; and George Gore

Counsel for Appellants:       George W. Gore
                              State Bar No. 24029582
                              ggore@goretexas.com
                              The Gore Law Firm, P.C.
                              6200 Savoy, Suite 1150
                              Houston, Texas 77036
                              (713) 224-2000 (Telephone)
                              (713) 224-2004 (Facsimile)

Appellees:                    Texas Gulf Energy, Inc.; CS Bankers V,
                              LLC; and Timothy Connolly

Counsel for Appellees:        Gary M. Jewell
                              State Bar No. 10664800
                              gjewell@csj-law.com
                              Adam L. Tepper
                              State Bar No. 24079445
                              atepper@csj-law.com
                              Christian, Smith & Jewell, L.L.P.
                              2302 Fannin, Suite 500
                              Houston, Texas
                              (713) 659-7617 (Telephone)
                              (713) 659-7641 (Facsimile)

                                ii
Appellees:               Texas Gulf Fabricators, LLC; Brian G.
                         Hendry; and Lester H. Smith

Counsel for Appellees:   Paul J. Dobrowski
                         State Bar No. 05927100
                         pjd@doblaw.com
                         Cody W. Stafford
                         State Bar No. 24068238
                         cstafford@doblaw.com
                         Dobrowski, Larkin & Johnson
                         L.L.P.
                         4601 Washington Ave., Suite 300
                         Houston, Texas 77007
                         (713) 659-2900 (Telephone)
                         (713) 659-2908 (Facsimile)

Trial Court:             Hon. Brent Gamble
                         270th District Court
                         Harris County Civil Courthouse
                         201 Caroline, 13th Floor
                         Houston, Texas 77002
                         (713) 368-6400 (Telephone)

                           iii
                                        Table of Contents

                                                                                                                 Page

Identity of Parties and Counsel ............................................................ ii 

Table of Contents ........................................................................................ iv 

Index of Authorities ................................................................................. viii 

Record References ....................................................................................... xv 

Statement of the Case .............................................................................. xvi 

Statement Regarding Oral Argument ............................................. xvii 

Issues Presented ........................................................................................ xviii 

Statement of Facts ....................................................................................... 1 

  A.       THE PARTIES. .............................................................................................. 1 

  B.       D&R OBTAINS A LOAN—BUT DOES NOT REPAY. ...................................... 2 

  C.       D&R AGREES TO SELL THE NOTE AND DEED OF TRUST TO CS BANKERS. . 4 

  D.       CS BANKERS FORECLOSES ON THE WADE ROAD PROPERTY. ...................... 5 

  E.       THE LAWSUIT BEGINS. ............................................................................... 6 

  F.       THE TRIAL COURT GRANTS THE SUMMARY JUDGMENTS........................... 8 

  G.       THE TRIAL COURT SANCTIONS THE RUSHINGS AND THEIR ATTORNEY. .... 9 

                                                          iv
   H.         THE FINAL JUDGMENT. .............................................................................13 

Standard of Review ..................................................................................... 14 

   A.         MOTIONS FOR SUMMARY JUDGMENT ....................................................... 14 

      1.        Traditional Summary Judgment............................................................ 14 

      2.        No-Evidence Summary Judgment......................................................... 14 

   B.         SANCTIONS ORDER ....................................................................................15 

Summary of Argument ................................................................................ 16 

Argument ...........................................................................................................17 

   A.         THE FORECLOSURE WAS PROPER. ..............................................................17 

      1.        D&R’s wrongful foreclosure claim fails because the foreclosure
                notices complied with the Texas Property Code. .................................. 18 

            a.  The notices identify the time of the foreclosure sale. ............................ 19 

            b.  The notices identify the place of the foreclosure sale. ........................... 21 

            c.  The foreclosure notice identifies Schlanger as the substitute trustee.... 22 

            d.  Schlanger’s role as substitute trustee was perfectly legitimate.............. 22 

      2.        D&R’s claim that it did not receive notice of the foreclosure does
                not support its wrongful foreclosure claim. ........................................... 24 

      3.        D&R’s wrongful foreclosure claim fails because the foreclosure
                notice complied with the Deed of Trust................................................ 26 

            a.  The guarantors were not entitled to notice of the foreclosure............... 27 

                                                          v
        b.  None of the “other defects” identified by D&R supports its
             wrongful foreclosure claim. ............................................................... 29 

  4.         D&R failed to prove that any alleged irregularity in the foreclosure
             caused it any damages. .......................................................................... 32 

  5.         Because the foreclosure was proper, D&R’s quiet title claim fails as a
             matter of law. ........................................................................................ 34 

B.        THE SUMMARY JUDGMENTS DISPOSED OF ALL CLAIMS. .......................... 35 

  1.         Fabricators and Hendry were entitled to summary judgment on the
             alleged promissory estoppel claim because they did not make any
             promises to the Rushings. ..................................................................... 36 

  2.         The Rushings waived any complaint to Fabricators’ and Hendry’s
             summary judgments when they failed to file exceptions. ...................... 39 

  3.         The Rushings abandoned any promissory estoppel claim. .................... 40 

  4.         The Rushings failed to adequately plead promissory estoppel. ............. 41 

C.        THE RUSHINGS HAD ADEQUATE TIME FOR DISCOVERY. ........................... 42 

D.        THE TRIAL COURT’S GRANT OF SUMMARY JUDGMENT ON THE
          REMAINING CLAIMS IS UNASSAILABLE. ..................................................... 43 

  1.         The Rushings admit there were no misrepresentations. ....................... 43 

  2.         The Rushings admit there were no contracts. ....................................... 44 

  3.         The Rushings’ quantum meruit claim fails because they did not
             provide services or materials. ................................................................ 44 

  4.         Neither Fabricators nor Hendry had a fiduciary relationship with the
             Rushings. ............................................................................................... 46 

                                                         vi
     5.       The Rushings had no personal property to convert............................... 47 

     6.       The Rushings cannot maintain a standalone cause of action for civil
              conspiracy. ............................................................................................ 49 

     7.       The Rushings had no contracts with which Fabricators or Hendry
              could interfere. ...................................................................................... 50 

  E.       GORE AND THE RUSHINGS REPEATEDLY FILED GROUNDLESS PLEADINGS,
           AND THE TRIAL COURT PROPERLY SANCTIONED THEM. .......................... 52 

     1.       Sanctions are appropriate under Rule 13 and Chapter 10. ..................... 52 

     2.       Gore and the Rushings repeatedly filed pleadings containing a fraud
              claim they knew was meritless. .............................................................. 54 

     3.       The monetary sanction is not excessive and is supported by
              considerable evidence. .......................................................................... 56 

     4.       The sanction must be affirmed. ............................................................. 58 

  F.       APPELLANTS WAIVED ANY ERROR BY FAILING TO FILE A PROPER BRIEF. . 58 

  G.       PRAYER ..................................................................................................... 60 

Certificate of Service ............................................................................... 62 

Certificate of Compliance ...................................................................... 63 

                                                          vii
                                       Index of Authorities

Cases 

Adebo v. Litton Loan Servicing, L.P.,
 2008 WL 2209703, at *4 (Tex. App.—Houston [1st Dist.] May 29, 2008,
 no pet.) ......................................................................................................... 24, 25

Alexander v. Alexander,
  956 S.W.2d 712 (Tex. App.—Houston [14th Dist.] 1997, pet. denied) .............. 58

Allied Vista, Inc. v. Holt,
  987 S.W.2d 138 (Tex. App.—Houston [14th Dist.] 1999, pet. denied) .............. 37

Am. Sav. & Loan Ass’n of Houston v. Musick,
 531 S.W.2d 581 (Tex. 1975) ........................................................................... 27, 33

Am. Tobacco Co., Inc. v. Grinnell,
 951 S.W.2d 420 (Tex. 1997) ............................................................................... 49

Appleton v. Appleton,
 76 S.W.3d 78 (Tex. App.—Houston 2002 [14th Dist.], no pet.) ............. 53, 55, 56

Apresa v. Montfort Ins. Co.,
 932 S.W.2d 246 (Tex. App.—El Paso 1996, no writ) ......................................... 56

Brantley v. Etter,
  677 S.W.2d 503 (Tex. 1984) ............................................................................... 57

Brooks v. Bank of New York Mellon,
  2014 WL 1322822 (S.D. Tex. Mar. 31, 2014) ..................................................... 25

Bullock v. Am. Heart Ass’n,
  360 S.W.3d 661 (Tex. App.—Dallas 2012, pet. denied) ..................................... 59

Carroll v. Timmers Chevrolet, Inc.,
 592 S.W.2d 922 (Tex. 1979) ............................................................................... 49

City of Houston v. Howard,
  786 S.W.2d 391 (Tex. App.—Houston [14th Dist.] 1990, writ denied) .............. 41

                                                          viii
Coble v. Adams,
 2014 WL 6602480 (Tex. App.—Houston [1st Dist.] Nov. 20, 2014, no pet.).... 60

Coffey v. Johnson,
 142 S.W.3d 414 (Tex. App.—Eastland 2004, no pet.) ....................................... 41

Dubose v. Worker’s Med., P.A.,
 117 S.W.3d 916 (Tex. App.—Houston [14th Dist.] 2003, no pet.) ..................... 37

Elkins v. Stotts–Brown,
  103 S.W.3d 664 (Tex. App.—Dallas 2003, no pet.) ........................................... 53

English v. Fischer,
  660 S.W.2d 521 (Tex. 1983) ............................................................................... 37

Essex Crane Rental Corp. v. Carter,
  371 S.W.3d 366 (Tex. App.—Houston [1st Dist.] 2012, pet. denied) ................. 34

Fed. Land Bank Ass'n of Tyler v. Sloane,
  825 S.W.2d 439 (Tex. 1991) ............................................................................... 43

Fillion v. David Silvers Co.,
  709 S.W.2d 240 (Tex. App.—Houston [14th Dist.] 1986, writ ref’d n.r.e.) ....... 33

First State Bank v. Keilman,
  851 S.W.2d 914 (Tex. App.—Austin 1993, writ denied) (op. on reh’g).............. 23

Fisher v. Yates,
  953 S.W.2d 370 (Tex. App.—Texarkana 1997, no writ) ..................................... 50

Flameout Design & Fabrication Inc. v. Pennzoil Caspian Corp.,
  994 S.W.2d 830 (Tex. App.—Houston [1st Dist.] 1999, no pet.) ........................15

FM Props. Operating Co. v. City of Austin,
 22 S.W.3d 868 (Tex. 2000) ................................................................................ 14

Fredonia State Bank v. Gen. Am. Life Ins. Co.,
  881 S.W.2d 279 (Tex. 1994) ............................................................................... 60

Glass v. Glass,
  826 S.W.2d 683 (Tex. App.—Texarkana 1992, writ denied) ............................. 57

                                                      ix
Goswami v. Metropolitan Sav. and Loan Ass’n,
 751 S.W.2d 487 (Tex. 1988).................................................................................17

Green v. Kaposta,
 152 S.W.3d 839 (Tex. App.—Dallas 2005, no pet.)............................................ 60

Harwath v. Hudson,
 654 S.W.2d 851 (Tex. App.—Dallas 1983, writ ref’d n.r.e.) ................................31

Hill v. Fremont Inv. & Loan,
 2004 WL 1178607 (Tex. App.—Dallas May 28, 2004, no pet.) ......................... 25

Holloway v. Skinner,
 898 S.W.2d 793 (Tex. 1995) ............................................................................... 50

Houston Omni USA Co., Inc. v. Southtrust Bank Corp., N.A.,
 2009 WL 1161860, at *6 (Tex. App.—Houston [1st Dist.] Apr. 30, 2009,
 no pet.) ............................................................................................................... 18

In re Barber,
  982 S.W.2d 364 (Tex. 1998) ................................................................................15

In re Kellogg Brown & Root, Inc.,
  166 S.W.3d 732 (Tex. 2005) ............................................................................... 45

James v. Wells Fargo Bank, N.A.,
  2014 WL 2123060 (S.D. Tex. May 21, 2014) ..................................................... 33

Kainer v. ABMC Corp.,
 2006 WL 407794 (Tex. App.—Houston [1st Dist.] Feb. 23, 2006, no pet.) ...... 20

King Ranch, Inc. v. Chapman,
  118 S.W.3d 742 (Tex. 2003) ............................................................................... 14

Lambert v. First Nat. Bank of Bowie,
  993 S.W.2d 833 (Tex. App.—Fort Worth 1999, pet. denied) ....................... 25, 32

Lampasas v. Spring Center, Inc.,
  988 S.W.2d 428 (Tex. App.—Houston [14th Dist.] 1999, no pet.) .................... 37
Leigh v. Danek Med., Inc.,
  28 F. Supp. 2d 401 (N.D. Tex. 1998) .................................................................. 50

                                                             x
Long v. NCNB-Texas Nat. Bank,
  882 S.W.2d 861 (Tex. App.—Corpus Christi 1994, no writ) ............................. 27

Longoria v. Lasater,
  292 S.W.3d 156 (Tex. App.—San Antonio 2009, pet. denied) ........................... 34

Low v. Henry, 221 S.W.3d 609 (Tex. 2007) ....................................................... 15, 53

Lundy v. Masson,
  260 S.W.3d 482 (Tex. App.—Houston [14th Dist.] 2008, pet. denied) .. 43, 46, 55

Martins v. BAC Home Loans Servicing, L.P.,
 722 F.3d 249 (5th Cir. 2013) ..........................................................................25, 33

McConnell v. Southside Independent School Dist.,
 858 S.W.2d 337 (Tex. 1993) ................................................................................ 39

Miller v. Armogida,
 877 S.W.2d 361 (Tex. App.—Houston [1st Dist.] 1994, writ denied)................. 57

Miller v. Graves,
 185 S.W.2d 745 (Tex. Civ. App.—Fort Worth 1945, writ ref’d) ........................ 45

Nat’l Commerce Bank v. Stiehl,
 866 S.W.2d 706 (Tex. App.—Houston [1st Dist.] 1993, no writ) ....................... 18

Onwuteaka v. Cohen,
 846 S.W.2d 889 (Tex. App.—Houston [1st Dist.] 1993, writ denied) ................ 25

Ortiz v. Collins.
 203 S.W.3d 414 (Tex. App.—Houston [14th Dist.] 2006, no pet.) .............. 38, 50

Park Place Hosp. v. Estate of Milo,
  909 S.W.2d 508 (Tex. 1995) ............................................................................... 14

Peterson v. Black,
  980 S.W.2d 818 (Tex. App.—San Antonio 1998, no pet.).................................. 23

Powell v. Stacy,
  117 S.W.3d 70 (Tex. App.—Fort Worth 2003, no pet.) ................................ 23, 31

                                                      xi
Provident Life & Accident Ins. Co. v. Knott,
  128 S.W.3d 211 (Tex. 2003) ............................................................................... 14

Robson v. Gilbreath,
  267 S.W.3d 401 (Tex. App.—Austin 2008, pet. denied) .................................... 54

Rodriguez v. U.S. Bank, N.A.,
  2013 WL 5173125 (W.D. Tex. Sept. 12, 2013) .................................................... 26

Saravia v. Benson,
  433 S.W.3d 658 (Tex. App.—Houston [1st Dist.] 2014, no pet.) .................. 17, 21

Sauceda v. GMAC Mortg. Corp.,
  268 S.W.3d 135 (Tex. App.—Corpus Christi 2008, no pet.) .............................. 33

Save Our Springs Alliance, Inc. v. Lazy Nine Mun. Util. Dist. ex rel. Bd. of Directors,
  198 S.W.3d 300 (Tex. App.—Texarkana 2006, pet. denied) ............................. 54

Schwartz v. Pinnacle Communications,
  944 S.W.2d 427 (Tex. App.—Houston [14th Dist.] 1997, no writ) .................... 48

Scott v. Walker,
  141 Tex. 181, 170 S.W.2d 718 (1943) ................................................................... 46

Smith v. Heard,
 980 S.W.2d 693 (Tex. App.—San Antonio 1998, pet. denied) ........................... 37

Southwestern Bell Telephone Co. v. John Carlo Texas, Inc.,
  843 S.W.2d 470 (Tex. 1992) ............................................................................... 52

Stanley v. CitiFinancial Mortg. Co., Inc.,
  121 S.W.3d 811 (Tex. App.—Beaumont 2003, pet. denied) ............................... 26

Staples v. Merck & Co., Inc.,
  270 F. Supp. 2d 833 (N.D. Tex. 2003) ................................................................ 50

Stoner v. Thompson,
  578 S.W.2d 679 (Tex. 1979)................................................................................ 41

Texas Bank and Trust Co. v. Moore,
  595 S.W.2d 502 (Tex. 1980) ............................................................................... 47

                                                     xii
Tilton v. Marshall,
  925 S.W.2d 672 (Tex. 1996) ............................................................................... 50

Triad Home Renovators v. Dickey,
  15 S.W.3d 142 (Tex. App.—Houston [14th Dist.] 2000, no pet.) ...................... 42

Unifund CCR Partners v. Villa,
 299 S.W.3d 92 (Tex. 2009) .................................................................................15

Univ. Savings, Ass'n v. Springwoods Shopping Ctr.,
 644 S.W.2d 705 (Tex. 1982) ................................................................................17

Valadez v. Avitia,
 238 S.W.3d 843 (Tex. App.—El Paso, 2007, no pet.) ........................................ 60

Vortt Exploration Co., Inc. v. Chevron U.S.A., Inc.,
  787 S.W.2d 942 (Tex. 1990) ............................................................................... 44

Willis v. Donnelly,
 199 S.W.3d 262 (Tex. 2006) ......................................................................... 46, 47

Willoughby v. Jones,
 151 Tex. 435, 251 S.W.2d 508 (1952) .................................................................. 33

Statutes 

TEX. CIV. PRAC. & REM. CODE § 10.001 .................................................... 60, 63

TEX. CIV. PRAC. & REM. CODE § 10.004(b)..................................................... 60

Tex. Prop. Code § 51.002 ........................................................................ passim

Tex. Prop. Code § 51.002(a) .................................................................................. 23

TEX. PROP. CODE § 51.002(b), (c) .......................................................................... 21

Tex. Prop. Code § 51.002(c) .................................................................................. 21

TEX. PROP. CODE § 51.002(e)....................................................................... 27, 28

TEX. PROP. CODE § 51.0075................................................................................ 24

                                                      xiii
Rules 

TEX. R. APP. P. 33.1(a) ........................................................................................ 64

TEX. R. APP. P. 38.1(e), (h) ................................................................................. 68

TEX. R. APP. P. 38.1(i) ........................................................................................ 68

TEX. R. CIV. P. 13 .................................................................................... 59, 61, 63

TEX. R. CIV. P. 166a(c) ........................................................................................... 14

TEX. R. CIV. P. 166a(i) .............................................................................................15

TEX. R. CIV. P. 45 ............................................................................................... 46

                                                         xiv
                           Record References

     This brief uses the following format for citations to the Record:

1 CR __           Clerk’s Record (Vol. 1)

2 CR __           Clerk’s Record (Vol. 2)

RR __             Reporter’s Record for Sanctions Hearing (January 30, 2015)

Ex. __            Exhibits to the Reporter’s Record

                                        xv
                        Statement of the Case

Nature of the case       This case arises from the foreclosure on a debt owed by
                         D&R and secured by real property on Wade Road in
                         Baytown, Texas. CS Bankers foreclosed on the debt,
                         acquired the real property, and later transferred the
                         property to Fabricators. Despite agreeing to the terms
                         of the transaction, D&R and the Rushings want that
                         property back.

Course of proceedings    Texas Gulf Energy filed suit against the Rushings for
                         conversion and sought injunctive relief. The Rushings
                         later counterclaimed and D&R intervened. The
                         Rushings and D&R then sued Fabricators, Hendry, and
                         Smith—and those parties later moved for summary
                         judgment on all claims asserted against them.

Disposition below        The trial court granted summary judgments in favor of
                         Fabricators and Hendry (1 CR 593; 2 CR 1967; 2 CR
                         1944–1945) (Tab B), and Smith (2 CR 1580) (Tab C),
                         and ordered that D&R and the Rushings take nothing
                         by their claims. The trial court also sanctioned D&R,
                         the Rushings, and their attorney, George Gore, for
                         filing groundless, bad-faith pleadings. (2 CR 2025–
                         2026) (Tab D).

                         The trial court signed a final judgment in favor of
                         Fabricators, Hendry, and Smith on April 13, 2015. 2 CR
                         977–979; see Tab A (final judgment).

                                     xvi
               Statement Regarding Oral Argument

      It is unlikely that oral argument would materially aid the Court. Neither the

law nor the facts are complicated. Indeed, Appellants raise the same arguments that

virtually every other foreclosure debtor raises—arguments this Court has seen and

disposed of many times. If the Court deems oral argument necessary, however,

Fabricators, Hendry, and Smith request equal time to argue.

                                       xvii
                             Issues Presented

1.   The trial court granted summary judgment on D&R’s wrongful foreclosure
     and quiet title claims. Did the trial court err by finding that the foreclosure
     complied with the Texas Property Code and the Deed of Trust?
     (Response to Appellants’ Points of Error One and Two)

2.   Did the Rushings properly plead and preserve a cause of action for
     promissory estoppel? If so, did the trial court err by granting summary
     judgment on that claim?
     (Response to Appellants’ Point of Error Three)

3.   The Rushings did not move to compel discovery from Fabricators, Hendry,
     or Smith. Did the trial court err by granting no-evidence motions for
     summary judgment without further discovery?
     (Response to Appellants’ Point of Error Four)

4.   Did the trial court err by granting summary judgment on the Rushings’
     remaining claims?
     (Response to Appellants’ Point of Error Five)

5.   Did the trial court abuse its discretion when it sanctioned the Rushings and
     Gore for repeatedly filing groundless pleadings?
     (Response to Appellants’ Point of Error Six)

                                       xviii
                            Statement of Facts

      This case is about a company that took on too much debt. Unfortunately, like

many small companies, D&R failed. Fortunately for D&R, however, its owners (the

Rushings) found a business willing to buy the debt and put an end to the financial

drain. That transaction relieved D&R and the Rushings of approximately $500,000

in debt and led to a foreclosure on a piece of real property in Baytown, Texas. Now,

after receiving the benefit of that bargain, D&R and the Rushings want this Court

to nullify the deal and return the commercial property (but not the debt) to them.

A.    THE PARTIES.

      Appellant D&R Constructors, Inc. is a Texas company owned and operated

by Appellants Michael Rushing, Stephanie Rushing, Penn Rushing, and Florence

Rushing. D&R operated a fabrication facility on Wade Road in Baytown, Texas. At

times, the distinction between D&R and the individual Rushings is important for

this appeal; other times it is not. Unless otherwise noted, a reference to “the

Rushings” in this brief includes D&R as well.

      Appellees Texas Gulf Energy, Inc. and CS Bankers V, LLC are related

entities that bought a note and deed of trust secured by property formerly owned by

D&R. CS Bankers foreclosed on the property, which led to this lawsuit. Appellee

Timothy Connolly worked for both Texas Gulf Energy and CS Bankers.

                                         1
          Appellee Texas Gulf Fabricators, LLC, is a Texas limited liability company

partially owned by Appellee Brian G. Hendry. Fabricators operates the fabrication1

facility on Wade Road previously owned by D&R. Appellee Lester H. Smith is

Hendry’s father-in-law, but has no ownership interest in Fabricators (or any other

connection to the transactions that form this dispute).

B.        D&R OBTAINS A LOAN—BUT DOES NOT REPAY.

          Though this lawsuit stems from a foreclosure in 2012, the debt and

agreements underlying that foreclosure date back to at least 2004. Understanding

that debt, along with the agreements signed by D&R and the Rushings, is crucial to

the resolution of this case.

          In October 2004, D&R needed money. So it sought and obtained a $625,000

loan from the bank. That loan—payable in installments—was to mature in 2009.2 1

CR 407, 422. In return, D&R pledged property it owned on Wade Road in Baytown

as collateral, and signed a real estate lien note and deed of trust in favor of the bank.

1 CR 407–410 (Tab E) (Note); 1 CR 421–438 (Tab F) (Deed of Trust).3

1
  Most of the fabrication involves work for the energy industry (e.g., pipe fabrication, vessel
fabrication, caster roll and steel mill roll rebuilding, and the like).
2
    D&R was the only debtor on the Note and Deed of Trust. See, e.g., 1 CR 399, 407, 421, 438.
3
 Probably due to scanning, many of the documents in the clerk’s record are difficult to read. For
the Court’s convenience, the appendix to this brief includes the more legible versions provided to
the trial court.

                                                  2
         Unsurprisingly for a commercial transaction, the Note and Deed of Trust

contain a number of waivers. The Note, for instance, waived virtually all notices:

         Each Maker, surety and endorser of this Note expressly waives all
         notices, demands for payment, presentations for payment, notices of
         intention to accelerate the maturity, protest and notice of protest, as to
         this Note and as to each, every and all installments hereof.

1 CR 408. Likewise, the renewal of the Note contains similar waiver provisions for

both D&R (the debtor) and the guarantors:

         [D&R] and any and all co-makers, endorsers, guarantors and sureties
         severally waive notice (including, but not limited to, notice of protest,
         notice of dishonor and notice of intent to accelerate and notice of
         acceleration), demand, presentment for payment, protest ….

1 CR 413. The Deed of Trust contains similarly expansive waivers.4

         If D&R defaulted under the loan documents, the bank could foreclose on the

collateral (i.e., the Wade Road property). The Deed of Trust contains a foreclosure

process identical to the requirements in the Property Code. 1 CR 428–429, ¶ 14.

Notably, any notice of the foreclosure sale only had to be served on the debtor

4
    For example:
      11. Default and Acceleration. In the event [D&R] shall default in the prompt payment,
      when due, of the Indebtedness …, then, in any such event, [the bank] … without demand,
      presentment for payment, notice of nonpayment, grace, protest, notice of protest, notice
      of intent to accelerate the Indebtedness, notice of acceleration of the Indebtedness, or any
      other notice, all of which are hereby expressly waived by [D&R], may declare the entire
      unpaid balance and accrued interest on the Note and any other unpaid Indebtedness
      immediately due and payable, whereupon it shall be so due and payable.
1 CR 428, ¶ 11.

                                                   3
(D&R), and service of the notice was “complete and effective when [it] is

deposited in the United States mail ….” 1 CR 428, ¶ 14; see also 1 CR 437, ¶ 33.

      Though the loan to D&R matured in 2009, it went unpaid. Instead, in March

2010, D&R renewed, modified, and extended the loan—with an outstanding

balance of $503,025.30—to October 2011. 1 CR 411–420. But October 2011 came

and went without repayment. Indeed, the bank apparently sent notices to D&R of

its intent to accelerate the note because of the default in payments. 1 CR 483, at ¶ 7.

C.    D&R AGREES TO SELL THE NOTE AND DEED OF TRUST TO CS BANKERS.

      Many, many months after the note matured, D&R was unable or unwilling to

repay it. Then, in the summer of 2012, Texas Gulf Energy approached D&R about

purchasing the fabrication facility, the mortgaged property, and, of course, the

defaulted Note and Deed of Trust. By this time, D&R still owed more than

$400,000 on the Note and many thousands more in delinquent taxes. 1 CR 399,

401. After years of having debt pile up, D&R (and the Rushings) now had a

solution.

      So, in July 2012, CS Bankers, an affiliate of Texas Gulf Energy at the time,

purchased the Note and Deed of Trust. 1 CR 391–406 (Tab G) (Loan Sale

Agreement). D&R joined in the Loan Sale Agreement and specifically consented to

the transaction, which D&R admitted would result in direct economic benefit to

                                          4
the company. 1 CR 399. D&R likewise acknowledged that, without its explicit

consent and joinder, CS Bankers would not purchase the debt. Id.5

         The logical goal of the transaction was for CS Bankers to pay the half-million

dollars that D&R could not, obtain the Note and Deed of Trust, foreclose on the

property, acquire the fabrication facility, and relieve D&R—and the Rushings—of

the debt with which they were burdened.

D.       CS BANKERS FORECLOSES ON THE WADE ROAD PROPERTY.

         That goal materialized a month later. On August 14, 2012, under § 51.002 of

the Texas Property Code and the terms of the Deed of Trust securing the Note, CS

Bankers’ attorney, Robert A. Schlanger, provided the required notice of the

foreclosure scheduled for September 4, 2012. 1 CR 439–452 (Tab H). Specifically,

Schlanger posted a Notice of Substitute Trustee’s Sale at the courthouse in Harris

County, Texas, the county in which the property is located, and designated Harris

5
    D&R made numerous other representations in the Loan Sale Agreement. For instance:
      [D&R] joins in the execution of this Agreement (a) to evidence [D&R’s] consent to the
      transaction hereby contemplated, (b) to confirm that (i) true and correct copies of the
      Loan Documents are attached hereto …, (iii) the Loan Documents evidence all of the
      existing agreements between [D&R] and [Comerica Bank] pertaining to the Loan, (iv) the
      Schedule of Loan attached hereto and all information set forth thereon is true, complete
      and correct, (v) other than the maturity of the Loan on October 28, 2011 and the failure to
      pay taxes on the real property collateral, no event of default or event which could, with
      the giving of notice or the passage of time or both, constitute an event of default, has
      occurred under the Loan Documents …, (viii) the Loan Documents are valid and
      enforceable against [D&R] and the collateral identified therein ….
1 CR 399.

                                                  5
County as the county in which the property would be sold. 1 CR 441–442.

Schlanger also filed a copy of the notice in the Harris County Clerk’s office. 1 CR

443–444.

          Schlanger then served written notice of the sale on D&R, the only debtor on

the Note and Deed of Trust. 1 CR 439–440. Schlanger deposited a Notice of

Posting (together with the Notices of Substitute Trustee’s Sale) in the United

States mail, postage prepaid and addressed to D&R at 6314 Wade Road, Baytown,

Texas 77521, its last known address according to the loan documents. 1 CR 445–

448; 1 CR 441–444.

          CS Bankers foreclosed on September 4, 2012, and was the highest bidder at

the foreclosure sale. 1 CR 440; 1 CR 449–452. In 2013, CS Bankers transferred the

property to Fabricators, the current owner. 1 CR 648.

E.        THE LAWSUIT BEGINS.

          On January 4, 2013, this litigation began. 1 CR 17–23. Texas Gulf Energy, CS

Bankers, and the Rushings litigated for nearly a year with little progress.6 Then, in

December 2013, D&R intervened and, along with the Rushings, sued Fabricators,

Hendry, and Smith. 1 CR 196–215.

6
    During this time, neither Fabricators, nor Hendry, nor Smith were parties to the lawsuit.

                                                  6
      After appearing, Smith moved to dismiss all claims against him, including a

claim of fraud based on misrepresentation. 1 CR 269–279. In response, the

Rushings amended their petition to “clarify” their claims against Smith. 1 CR 286–

306. They even included this language in their response to Smith’s motion to

dismiss: “Claims clarification: The following claims exist in the amended petition:

fraud and conspiracy to commit fraud.” 1 CR 283. Based in part on the Rushings’

promises that they had proof of Smith’s fraud and that it was “clear” he was

involved in the foreclosure, the trial court denied the motion to dismiss. 1 CR 284;

1 CR 353.

      Depositions taken four months later proved those promises were false.

Indeed, both Penn Rushing (on behalf of himself and D&R) and Michael Rushing

admitted that Smith had never made any representations to them at all. 1 CR 722–

723. The same was true for Stephanie and Florence Rushing as well, both of whom

had sued Smith. RR 9:7–14; 13:11–24. Despite those admissions, Smith was not

dropped from the lawsuit.

      Instead, only a couple of weeks after admitting that Smith had never met

them or spoken with them, the Rushings filed yet another petition—their fourth—

alleging the exact same fraud-by-misrepresentation claim. 1 CR 624–642; see also

                                         7
RR 79:16–80:5 (amended petition “verbatim with the other [petition].”). That

amended (yet nearly identical) petition also included a number of other claims:

                                                       Quiet title8
                                                       Fraud
                                                       Negligent misrepresentation
                                                       Breach of contract
Asserted against Fabricators and
                                                       Quantum meruit
Hendry7
                                                       Breach of fiduciary duty
                                                       Conversion
                                                       Conspiracy
                                                       Tortious interference
                                                     Fraud
Asserted against Smith
                                                     Conspiracy

1 CR 624–642. Fabricators, Hendry, and Smith then moved for summary judgment

on all claims asserted against them.

F.     THE TRIAL COURT GRANTS THE SUMMARY JUDGMENTS.

       In the summer of 2014, Texas Gulf Energy, CS Bankers, Fabricators, and

Hendry moved for summary judgment on the propriety of the foreclosure. 1 CR

381–390; 1 CR 457–460; 1 CR 546–553. D&R then conceded that “there are no

claims against [Fabricators] or Hendry regarding foreclosure – only that they

conspired with [CS Bankers] and later ended up with the Property.” 1 CR 603. In

7
  The Rushings also claim to have asserted a promissory estoppel claim. As discussed later, that
claim was not properly pled.
8
 It is unclear whether D&R asserted a quiet title claim against Fabricators and Hendry. See 1 CR
603.

                                               8
any event, the trial court granted summary judgment on August 28, 2014, and

dismissed the foreclosure and quiet title claims. 1 CR 593; 2 CR 1967.

        After several months of discovery, Fabricators, Hendry, and Smith then

moved for final summary judgment.9 1 CR 643–718; 1 CR 816–840. After hearing,

the trial court granted Smith’s motions on October 31, 2014. 2 CR 1580. Shortly

after, the trial court granted the motions filed by Fabricators and Hendry. 2 CR

1967.

        By November 2014, all of the claims against Fabricators, Hendry, and Smith

had been dismissed. Other than Smith’s motion for sanctions, the only remaining

claims were among Texas Gulf Energy, CS Bankers, and the Rushings. As a result,

Smith set his motion for sanctions for an evidentiary hearing. 2 CR 1970–1971.

G.      THE TRIAL COURT SANCTIONS THE RUSHINGS AND THEIR ATTORNEY.

        The trial court took up the motion for sanctions in January 2015. 2 CR 1970–

1971; see also RR 5:1–11. At the hearing, the trial court heard testimony and

admitted evidence regarding the merit and basis of the claims against Smith, as well

as the repeated filing of petitions alleging claims known to be false or legally

9
 Notably, the Rushings never moved to compel a deposition or any other discovery from
Fabricators, Hendry, or Smith. Indeed, the Rushings never even requested a deposition.

                                          9
unsupportable. Specifically, the trial court heard testimony from Penn Rushing,

Michael Rushing, Lester Smith, Tim Connolly, and Smith’s counsel.10 RR 2:4–23.

       Under oath, the Rushings admitted that Smith had never communicated

with or made any representations to them. RR 24:7–25:10; 39:14–41:12. Penn

Rushing flatly declared, “Lester Smith never talked to me in his life.” RR 38:17.

The Rushings also admitted that they had communicated those facts to Gore before

he filed (and repeatedly re-filed) the claims against Smith. RR 24:7–25:10; 39:14–

41:12. Indeed, when Gore sued Smith on behalf of the Rushings, they “had been

told that [Smith] wasn’t directly there” [i.e., “involved”]. RR 14:17–15:6.

       Without any evidence, Gore had to confess that he sued Smith solely to

investigate him:

             The Court: Well, don’t you have to have some sort of an
       affirmative act to support a conspiracy claim?

             Mr. Gore: That is why we brought him in to investigate
       and look at that based on e-mails11 that we had - -

             The Court: Well, wait a minute. Under Rule 13, do you get to
       sue people to investigate stuff?

10
   Smith subpoenaed Stephanie and Florence Rushing, but they did not appear and testify;
instead, they stipulated that Smith never made any representations to them. RR 9:4–14.
11
  Those emails do not contain any references to the Rushings, D&R, or the Wade Road property.
See Ex. 5 (Plaintiff’s).

                                             10
            Mr. Gore: Under Rule 13, it has to be harassing or frivolous or
      other, you know, it has such an extreme - - it is so far out there, we
      would have to have no basis to do it at all.

RR 18:1–13 (emphasis added). Gore then admitted that he, in fact, had no basis at

all to sue Smith:

             The Court: Well, help me out with how you can accuse
      somebody of making an affirmative misrepresentation or failing to
      disclose some material fact when they had no communication, I mean,
      that’s where I’m getting the disconnect here. And you’ve got to have
      one or the other of those to have a fraud claim, don’t you?

             Mr. Gore:   For the fraud claim; yes, sir.

            The Court: Okay. Well, then, if they didn’t then by definition
      wouldn’t a fraud claim be frivolous if you filed it under those
      circumstances?

             Mr. Gore:   If there is direct - -

           The Court: Well, I just would like a “yes” or “no” answer to
      my question.

RR 15:19–16:8. The trial court never received a direct answer to its question. The

answer came later, albeit implicitly, when Gore admitted Smith was sued with the

idea that “maybe we can come up with some cause of action.” RR 19:18–19

(emphasis added).

      For his part, Smith testified—consistent with the Rushings—that he had

“never made any representations to any of the Rushings.” RR 45:5–10. Smith

further testified that he believed his inclusion in the lawsuit amounted to a

                                          11
“shakedown.” RR 45:16–17. Later, on cross-examination, Gore asked Smith

whether he thought the Rushings were trying to shake him down for money; Smith

replied, “No, I don’t think they are, I think you are.” RR 53:19–22.

      The trial court essentially agreed. After hearing evidence that Smith had

incurred at least $33,250.00 in attorney’s fees defending himself from the lawsuit,

RR 71:23–72:2, the trial court sanctioned Gore and the Rushings that amount. The

trial court also made the following findings (among others):

            The Court further finds that Defendants and Intervenor
      brought groundless claims against Lester H. Smith, and that those
      claims were brought in bad faith or for the purpose of harassment.

             The Court further finds that Defendants’ and Intervenor’s
      attorney, George W. Gore, failed to conduct a reasonable inquiry
      into the facts before filing claims against Lester H. Smith.

             The Court further finds that Defendants, Intervenor, and
      George W. Gore acted in bad faith by filing Defendants’ and
      Intervenor’s Third Amended Claims after being put on notice by the
      depositions of Penn Rushing and Michael Rushing that the claims
      asserted against Lester H. Smith were groundless.

2 CR 2025–2026 (emphasis added) (Tab D). The sanctions were not paid during

the pendency of the lawsuit, but were placed into the registry of the trial court once

the appeal was filed. 2 CR 1045–1046. After the sanctions hearing, the trial court

also signed a summary judgment in favor of Texas Gulf Energy, CS Bankers, and

Timothy Connolly. 2 CR 2027.

                                         12
H.    THE FINAL JUDGMENT.

      The trial court then signed a final judgment in favor of Fabricators, Hendry,

and Smith (as well as the other Appellees) on April 13, 2015. 2 CR 977–979; see Tab

A (final judgment). D&R, the Rushings, and Gore filed this appeal on July 9, 2015.

2 CR 1010–1012; 2 CR 1047–1049.

                                        13
                            Standard of Review

A.    MOTIONS FOR SUMMARY JUDGMENT

      Summary judgments are reviewed de novo. Provident Life & Accident Ins. Co.

v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). When both parties move for summary

judgment on the same issues and the trial court grants one motion and denies the

other, this Court reviews both sides’ summary judgment evidence and determines

all questions presented. See FM Props. Operating Co. v. City of Austin, 22 S.W.3d
868, 872 (Tex. 2000). When a trial court’s order granting summary judgment does

not specify the grounds relied upon, this Court must affirm if any of the summary

judgment grounds are meritorious. Id.

      1.     Traditional Summary Judgment.

      The movant for traditional summary judgment has the burden of showing

that there is no genuine issue of material fact and that he is entitled to judgment as

a matter of law. TEX. R. CIV. P. 166a(c); Park Place Hosp. v. Estate of Milo, 909
S.W.2d 508, 510 (Tex. 1995).

      2.     No-Evidence Summary Judgment.

      A no-evidence motion for summary judgment is essentially a directed verdict

granted before trial, to which appellate courts apply a legal-sufficiency standard of

review. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750-51 (Tex. 2003). A party

                                         14
seeking a no-evidence summary judgment must assert that no evidence exists as to

one or more of the essential elements of the non-movant's claims. Flameout Design

& Fabrication Inc. v. Pennzoil Caspian Corp., 994 S.W.2d 830, 834 (Tex. App.—

Houston [1st Dist.] 1999, no pet.). The burden then shifts to the non-movant to

raise a fact issue on the challenged elements. TEX. R. CIV. P. 166a(i).

B.    SANCTIONS ORDER

      A trial court’s imposition of sanctions is reviewed for abuse of discretion.

Unifund CCR Partners v. Villa, 299 S.W.3d 92, 97 (Tex. 2009) (citing Low v. Henry,

221 S.W.3d 609, 614 (Tex. 2007)). An assessment of sanctions will be reversed

only if the trial court acted without reference to any guiding rules and principles,

such that its ruling was arbitrary or unreasonable. Id. The trial court does not abuse

its discretion if it bases its decision on conflicting evidence and some evidence

supports its decision. In re Barber, 982 S.W.2d 364, 366 (Tex. 1998).

                                          15
                           Summary of Argument

      The trial court carefully considered—and properly resolved—several

summary judgment motions. Neither D&R nor the Rushings supported their

claims with either facts or law. The trial court’s judgment should me affirmed.

      First, D&R’s wrongful foreclosure and quiet title claims fail because the

trustee strictly complied with the Property Code and the Deed of Trust. The

trustee properly posted (and properly sent the debtor) all required notices of

foreclosure. D&R’s argument that it never received the notice is irrelevant under

both the Property Code and the Deed of Trust.

      Second, the summary judgments properly disposed of all of the Rushings’

remaining claims. There are no fact issues regarding any claims against Fabricators,

Hendry, or Smith.

      Third, the Rushings had ample time to conduct discovery prior to the

summary judgments, and failed to preserve this complaint for appeal.

      Fourth, the sanctions against Gore and the Rushings for repeatedly filing

frivolous, groundless pleadings are supported by tremendous evidence and, in any

event, neither Gore nor the Rushings lodged proper objections to them.

      Finally, the Rushings waived any alleged error by failing to file an

appropriate brief with proper citations to the law or the record.

                                          16
                                        Argument

       Fabricators, Hendry, and Smith moved for summary judgment—both

traditional and no-evidence—on the claims asserted against them.12 As a result, the

Rushings had to provide at least some evidence of their claims, and show that their

claims did not fail as a matter of law. They could not do so then, and they cannot do

so now.

A.     THE FORECLOSURE WAS PROPER.

       In points of error one and two, D&R raises a myriad of supposed technical

defects to invalidate the foreclosure; none survives scrutiny.13 Nothing raised by

D&R overcomes the presumption that all prerequisites to the foreclosure sale were

properly performed. See Saravia v. Benson, 433 S.W.3d 658, 663 (Tex. App.—

Houston [1st Dist.] 2014, no pet.).

       To prevail on its wrongful foreclosure claim, D&R must show that (1) an

irregularity in the foreclosure sale (2) caused it damages. Univ. Savings, Ass'n v.

Springwoods Shopping Ctr., 644 S.W.2d 705, 706 (Tex. 1982). To lawfully foreclose,

12
  The lone exceptions are wrongful foreclosure and quiet title; Fabricators and Hendry moved
only for traditional summary judgment on those claims.
13
  D&R admits that its wrongful foreclosure claim does not apply to Fabricators or Hendry. Brief
of Appellants at 27. To be clear, neither Fabricators, nor Hendry, nor Smith were involved in the
foreclosure. Because Fabricators currently owns the property, however, it has a concrete interest
in having the trial court’s judgment on the foreclosure affirmed, and has standing. See, e.g.,
Goswami v. Metropolitan Sav. and Loan Ass’n, 751 S.W.2d 487, 489 (Tex. 1988).

                                               17
a trustee must comply with the notice requirements in the deed of trust and those

prescribed by law. Houston Omni USA Co., Inc. v. Southtrust Bank Corp., N.A.,

2009 WL 1161860, at *6 (Tex. App.—Houston [1st Dist.] Apr. 30, 2009, no pet.)

(citing Nat’l Commerce Bank v. Stiehl, 866 S.W.2d 706, 708 (Tex. App.—Houston

[1st Dist.] 1993, no writ)).

          Here, the record proves that the trustee—Schlanger—complied with all

notice requirements in the Texas Property Code and the Deed of Trust. Moreover,

D&R failed to prove any damages stemming from the foreclosure.

          1.     D&R’s wrongful foreclosure claim fails because the foreclosure
                 notices complied with the Texas Property Code.

          To foreclose on real property, trustees must comply with notice

requirements established by law. Nat’l Commerce Bank, 866 S.W.2d at 708. Section

51.002 of the Property Code governs the sale of real property under a contract

lien.14 See TEX. PROP. CODE § 51.002 (Tab I). The relevant provisions here

concern the required notice to the debtor:

                 (b) …, notice of the sale, which must include a statement of the
          earliest time at which the sale will begin, must be given at least 21 days
          before the date of the sale by:

                (1) posting at the courthouse door of each county in which the
          property is located a written notice designating the county in which
          the property will be sold;

14
     The parties agree that § 51.002 governed the foreclosure on the Wade Road property.

                                                18
            (2) filing in the office of the county clerk of each county in
      which the property is located a copy of the notice posted under
      Subdivision (1); and

             (3) serving written notice of the sale by certified mail on each
      debtor who, according to the records of the mortgage servicer of the
      debt, is obligated to pay the debt.

            …

             (c) The sale must begin at the time stated in the notice of sale or
      not later than three hours after that time.

TEX. PROP. CODE § 51.002(b), (c). The foreclosure notices in this case complied

with each provision.

            a.     The notices identify the time of the foreclosure sale.

      First, contrary to D&R’s primary argument, the foreclosure notice

specifically identifies the time of sale as required by § 51.002(c). The Notice of

Substitute Trustee’s Sale states that Schlanger will “on SEPTEMBER 4, 2012 …

at the hour of 1:00 o’clock p.m., or within three (3) hours thereafter, on said day,

sell the [property] ….” 1 CR 441 (emphasis in original). That notice was

indisputably sent via certified mail to D&R on August 14, 2012. 1 CR 445–448; see

also 1 CR 439–440. As soon as Schlanger sent the notices, D&R had constructive

notice of the sale, which is all the statute requires. Kainer v. ABMC Corp., 2006 WL
19
407794, at *5 (Tex. App.—Houston [1st Dist.] Feb. 23, 2006, no pet.). So D&R

was properly notified of the time of the sale.

      To circumvent this fact, D&R argues that the Notice of Substitute Trustee’s

Sale was not included in the Notice of Posting letter sent by Schlanger. Brief of

Appellants at 15–16. But this argument is a nonstarter.

      As an initial matter, the letter from Schlanger—which D&R does not dispute

was mailed—specifically says the sale is scheduled for September 4, 2012. 1 CR

445. The letter goes on to say that the “Notices of Substitute Trustee’s Sales …

are enclosed.” 1 CR 446. And the Notices of Substitute Trustee’s Sale undeniably

identify the time the sale was to begin. 1 CR 441. The evidence in the record, then,

firmly establishes that Schlanger mailed all required notices. The essence of D&R’s

contrary argument is that the Notices of Substitute Trustee’s Sales are appended

to Schlanger’s affidavit as Exhibits B-1 and B-2, while the Notice of Posting letter is

attached as Exhibit B-3. Presumably, D&R thinks the Notices of Substitute

Trustee’s Sales should have been appended yet again after the Notice of Posting

letter in the summary judgment record. But D&R fails to explain how that would

make any difference. Indeed, Schlanger’s affidavit verifies that the Notice of

Posting letter was sent, and the Notice of Posting letter identifies the notices it

enclosed. The evidence could hardly be clearer.

                                          20
       Moreover, D&R claims it never received the Notice of Posting letter. See,

e.g., Brief of Appellants at 18. As a matter of logic, then, D&R could not provide

any evidence—rather than conjecture—that the Notice of Posting did not contain

what it plainly says it contained (i.e., the Notices of Substitute Trustee’s Sale with

the specific time of sale). Consequently, the record undeniably establishes that the

notices sent to D&R identified the date and time of the sale.

              b.     The notices identify the place of the foreclosure sale.

       Second, D&R claims the foreclosure notices never identified the place of the

foreclosure sale. This, too, is incorrect. The Notices of Substitute Trustee’s Sale,

which was included in the Notice of Posting letter sent by Schlanger to D&R,

specifically identifies the place of sale as:

       The interior area of the first floor lobby of the Family Law Center
       together with certain covered areas located outside the Family Law
       Center (a Harris County Courthouse located at 1115 Congress Street,
       Houston, Texas), or as otherwise designated by the Commissioner’s
       Court of Harris County, Texas.

1 CR 441. Notably, this is the area designated by the Harris County

Commissioner’s Court for sales to take place, as required by § 51.002(a). See

Saravia, 433 S.W.3d at 664. Thus, D&R’s second complaint regarding the notice of

foreclosure fails to survive even basic scrutiny.

                                                21
             c.     The foreclosure notice identifies Schlanger as the substitute
                    trustee.

      Third, the foreclosure notices plainly identify Robert Schlanger as the

substitute trustee. Under § 51.0075, the name and a street address for a trustee or

substitute trustee shall be disclosed on the foreclosure notices. TEX. PROP. CODE

§ 51.0075 (Tab J). Here, the foreclosure notices state:

            WHEREAS, CS Bankers V LLC, a Texas limited liability
      company, the legal owner and holder of said Deed of Trust, in
      accordance with its terms, in writing removed the said James W.
      Goolsby, Jr., as Trustee and appointed ROBERT A. SCHLANGER
      as Substitute Trustee ….

1 CR 441 (emphasis added); see also 1 CR 443. Schlanger then signed each notice,

identified himself as the substitute trustee, and provided his address and telephone

number. See 1 CR442; see also 1 CR 444. Again, there is no defect.

             d.     Schlanger’s role as substitute trustee was perfectly legitimate.

      Fourth, D&R misapprehends both the role of a substitute trustee and the

Notice of Posting letter. D&R claims that by sending a letter that demanded

payment on a debt, Schlanger could not then serve as the substitute trustee.

Notably, D&R fails to provide any authority for this novel proposition. And,

indeed, that is not the law.

      Though trustees do owe both parties a duty of fairness and impartiality, that

does not prevent the trustee from also representing one of the parties. See, e.g.,

                                          22
Powell v. Stacy, 117 S.W.3d 70, 74 (Tex. App.—Fort Worth 2003, no pet.). And that

is what happened here. CS Bankers retained Schlanger to send the Notice of

Posting and alert D&R to the foreclosure sale. See generally 1 CR 445–447. In his

letter, Schlanger does not identify himself as the substitute trustee because that was

not the capacity in which he sent the letter. Enclosed in the letter, however, were

the foreclosure notices identifying him as the substitute trustee and the person who

would conduct the foreclosure sale. 1 CR 441; see also 1 CR 443. Nothing prevented

Schlanger from serving in both capacities.

      Still, D&R claims that “[t]he Rule is clear - - - you cannot have a dual role.”

Brief of Appellants at 17. Despite the supposed clearness of the rule, D&R provides

no authority for it. Indeed, there is no such rule. Rather, Schlanger was only

required to conduct the foreclosure sale fairly and not discourage bidding; he had

no duty to take affirmative actions beyond that required by statute or the deed of

trust to ensure a fair sale. Peterson v. Black, 980 S.W.2d 818, 822 (Tex. App.—San

Antonio 1998, no pet.). Schlanger fulfilled his duties by strictly complying with the

terms of the deed of trust. Id.; First State Bank v. Keilman, 851 S.W.2d 914, 925

(Tex. App.—Austin 1993, writ denied) (op. on reh’g). And there is no allegation

that Schlanger did not conduct the sale fairly or that he discouraged bidding. So,

when Schlanger complied with the Property Code and the Deed of Trust, he

                                         23
fulfilled his obligation to D&R; the fact that Schlanger also previously represented

CS Bankers is immaterial.

       2.     D&R’s claim that it did not receive notice of the foreclosure does
              not support its wrongful foreclosure claim.

       D&R’s final substantive complaint under § 51.002 is that it never received

notice of the foreclosure sale.15 Like its other complaints, this too has been

repeatedly rejected by Texas courts. Indeed, a decisive case authored by this Court

and cited by D&R—Adebo v. Litton Loan Servicing, L.P.—squarely holds that

“[t]he dispositive inquiry under section 51.002(e) … is not receipt of notice, but,

rather, service of notice.” 2008 WL 2209703, at *4 (Tex. App.—Houston [1st

Dist.] May 29, 2008, no pet.) (emphasis in original). That decision could hardly

have been a tough call for the Court; indeed, the plain language of § 51.002(e) says

that “Service of a notice under this section by certified mail is complete when the

notice is deposited in the United States mail, postage prepaid and addressed to the

debtor at the debtor’s last known address.” TEX. PROP. CODE § 51.002(e)

15
   The factual merits of this claim are suspect. There is evidence that D&R did, in fact, receive
notice of the foreclosure. See 1 CR 131 (“Penn Rushing responded to my email, acknowledged the
notice of foreclosure and informed me that he would put the notice in D&R Constructors, Inc.’s
file.”).

                                               24
(emphasis added). Many other courts have applied the plain language of the statute

and reached the same, obvious conclusion.16

       Moreover, “[t]he affidavit of a person knowledgeable of the facts to the

effect that service was completed is prima facie evidence of service.” TEX. PROP.

CODE § 51.002(e). Here, Schlanger’s affidavit and the attached exhibits provide

prima facie proof that D&R was served with the foreclosure notices by certified

mail return receipt requested. 1 CR 439. Schlanger even included the return

receipt. 1 CR 448. Under both the Property Code and the Deed of Trust, D&R had

constructive notice of the foreclosure sale as soon as the notices were deposited in

the mail on August 14, 2012. See Lambert, 993 S.W.2d at 835; Adebo, 2008 WL
2209703, at *4. There is no contradictory evidence.

       Curiously, D&R correctly states Adebo’s holding: when a debtor alleges that

the creditor failed to comply with § 51.002’s notice requirements, the debtor must

show that the creditor failed to serve the foreclosure notice. Brief of Appellants at

16
  See, e.g., Martins v. BAC Home Loans Servicing, L.P., 722 F.3d 249, 256 (5th Cir. 2013); Hill v.
Fremont Inv. & Loan, 2004 WL 1178607, *3 (Tex. App.—Dallas May 28, 2004, no pet.); Lambert
v. First Nat. Bank of Bowie, 993 S.W.2d 833, 835 (Tex. App.—Fort Worth 1999, pet. denied);
Onwuteaka v. Cohen, 846 S.W.2d 889, 892 (Tex. App.—Houston [1st Dist.] 1993, writ denied);
Brooks v. Bank of New York Mellon, 2014 WL 1322822, at *4 (S.D. Tex. Mar. 31, 2014).

                                               25
20. Yet D&R then cites affidavit testimony that it did not receive the notices—it

never cites any evidence that the notices were never served.17

       In sum, CS Bankers and Schlanger strictly complied with the Property Code.

       3.     D&R’s wrongful foreclosure claim fails because the foreclosure
              notice complied with the Deed of Trust.

       Because the foreclosure complied with the Property Code, D&R’s only hope

to save its wrongful foreclosure claim is to find a defect based on the Deed of Trust.

But none exists.

       Unfortunately, D&R’s brief lists numerous supposed defects but does not

identify whether the defect purportedly violates the Property Code, the Deed of

Trust, or both. See Brief of Appellants at 21–27. As a practical matter, the notice

requirements in the Deed of Trust mirror the requirements in the Property Code. 1

CR 429–429, ¶14. Thus, D&R’s claims under the Deed of Trust (whatever those

may be) fail for the same reasons they failed under the Property Code.

17
  Though it makes no difference here, courts place little probative weight on a party’s self-
serving statements that they did not receive the notice. Rodriguez v. U.S. Bank, N.A., 2013 WL
5173125, at 3 (W.D. Tex. Sept. 12, 2013) (citing Stanley v. CitiFinancial Mortg. Co., Inc., 121
S.W.3d 811, 817–18 (Tex. App.—Beaumont 2003, pet. denied)).

                                              26
             a.    The guarantors were not entitled to notice of the foreclosure.

      That said, D&R does specifically raise one new complaint here: it claims the

Deed of Trust was violated because the guarantors to the Note were not notified of

the foreclosure sale. Brief of Appellants at 22. This argument has no merit.

      Nothing in the Deed of Trust requires notice to be given to the guarantor of

the Note—only the “debtor.” 1 CR 429, ¶14(c). The only debtor mentioned in any

of the loan documents is D&R. See, e.g., 1 CR 399 (Loan Sale Agreement); 1 CR

410 (Note); 1 CR 418 (Note modification); 1 CR 438 (Deed of Trust). And there is

no legal requirement that personal notice of a foreclosure be sent to persons not

parties to the deed of trust. Am. Sav. & Loan Ass’n of Houston v. Musick, 531
S.W.2d 581, 588 (Tex. 1975). No guarantor here was a party to the Deed of Trust.

      Moreover, Section 14 of the Deed of Trust—upon which D&R relies for its

argument—tracks the language of § 51.002 of the Property Code regarding notice.

And Texas courts interpret the reference to “debtor” in § 51.002 to exclude

guarantors. See generally Long v. NCNB-Texas Nat. Bank, 882 S.W.2d 861 (Tex.

App.—Corpus Christi 1994, no writ) (discussing construction of § 51.002 and its

legislative history). There is no reason to think the parties to the Deed of Trust

envisioned any other definition of “debtor.”

                                         27
      But there are reasons to think the Deed of Trust likewise excludes

guarantors from its definition of “debtor.” Other references to “debtor” in the

Deed of Trust confirm that interpretation.

      For instance, § 30 states, “This Deed of Trust shall be a security agreement

between Grantors, as the debtor, and Beneficiary as the secured party ….” 1 CR

436. And the first page of the Deed of Trust defines “Grantors” only as the debtor,

“D&R Constructors, Inc.” 1 CR 421. Nowhere does the Deed of Trust define

“debtor” to include any guarantor.

      Indeed, the only time the word “guarantor” is used in the Deed of Trust is

in § 21; but that provision does not reference any particular guarantors, does not

define guarantors to mean “debtor,” and does not otherwise advance D&R’s

argument.

      In any event, the guarantors to the Note specifically waived the right to

receive notices of any kind. See 1 CR 408; 1 CR 413. So even if the word “debtor”

included guarantors, the guarantors here were not entitled to any notices.

                                        28
              b.     None of the “other defects” identified by D&R supports its
                     wrongful foreclosure claim.

       D&R goes on to list a number of “other defects” which, it claims, invalidate

the foreclosure. None does. And D&R provides such a paucity of support, these

supposed defects merit little discussion.18

       First, D&R claims no amount was due on the Note. Brief of Appellants at 21.

But that’s not true. D&R admits it still owed approximately $435,000 on the Note

in 2012. Id. at 3. And the Loan Sale Agreement—explicitly joined by D&R—

includes a schedule of the loan and indicates an outstanding balance of $415,064.47

as of July 13, 2012. 1 CR 401. At that time, the loan was nine months overdue and in

default. 1 CR 412. Thus, the evidence conclusively establishes that D&R still owed

significant (overdue) sums when CS Bankers purchased the Note.

       Second, D&R claims CS Bankers never provided it with contact information

so that it could update its address. This, too, is incorrect. The Loan Sale

Agreement—signed by D&R—contains an entire section on “notices” and

specifically lists the address for CS Bankers. 1 CR 394–395. Perhaps just as

importantly, there is no evidence that D&R ever needed, wanted, or tried to update

its address. Indeed, D&R’s address never changed. The only address D&R ever

18
  Because of the lack of citations to any authority or the record, it is unclear whether D&R
believes these alleged defects violate the Property Code, the Deed of Trust, or both. To the
extent there is any difference between the two, we address both.

                                            29
had was explicitly listed in the Deed of Trust: 6314 Wade Rd, Baytown, Texas

77521. 1 CR 421; see also 1 CR 437, at ¶ 33. The Rushings confirmed the validity of

that address many times.19 See, e.g., 1 CR 483, at ¶2. In short, D&R never provided

an updated address to CS Bankers—not because it could not find CS Bankers’

address, but because D&R had nothing to update. 1 CR 439–440; 1 CR 472.

       Third, D&R claims the Note had been accelerated, but that acceleration was

rescinded. Brief of Appellants at 23. Of course, D&R cites no evidence for this

proposition. And, in any event, CS Bankers had no need to accelerate a Note that

was many months overdue. See 1 CR 412. Plus, not only did the letter from

Schlanger say that CS Bankers was accelerating the Note (1 CR 446, ¶ 6), D&R

also waived any notice of intent to accelerate or acceleration. 1 CR 413. So

acceleration of the Note is a non-issue.

       Fourth, D&R claims the Notice of Posting letter was “defective” for a

number of reasons, and that any of those reasons are sufficient to set aside the

foreclosure. Their only authority for this argument is Harwath v. Hudson. In that

case, a foreclosure was set aside because the notice requirements in the deed of

trust had not been strictly followed. 654 S.W.2d 851, 854 (Tex. App.—Dallas 1983,

19
  See testimony of Penn Rushing, D&R’s President, 1 CR 455–456 (depo. lines 45:22–46:2)
(D&R never maintained a business address anywhere other than 6314 Wade Road in Baytown,
Texas); see also CR 453, affidavit of Michael Rushing, D&R’s Vice President (“The address is
correct on the [certified mail receipt for the Notice of Posting] ….”).

                                            30
writ ref’d n.r.e.). Harwath does not support D&R’s claim that the form of the

Notice of Posting letter is defective, or that such a defect would merit setting aside

the foreclosure. More importantly, even if it had some legal authority, none of the

issues raised by D&R contains merit:

          Introductory paragraph – D&R fails to cite evidence of its claim that
           CS Bankers is a Nevada company. And even if CS Bankers were not a
           Texas limited liability company, D&R fails to cite any authority
           holding that such a typographical error would nullify the foreclosure.
           Indeed, D&R fails to even allege how such a typographical error caused
           any damages or otherwise undermined the foreclosure.

          Paragraph 2 – D&R claims the “failure” to include the amount(s) due
           on the Note is a defect. But nothing in the Deed of Trust requires
           notice of the precise amount due. Nor does the Property Code. See,
           e.g. Powell, 117 S.W.3d at 74 (noting that § 51.002 does not require the
           note holder to include the amount due).

          Paragraphs 3, 4, and 5 – D&R claims no contact information was
           provided for CS Bankers. As discussed above, this is incorrect. The
           contact information for CS Bankers had already been provided to
           D&R. 1 CR 394–395. Further, in the letter, Schlanger identifies
           himself as representing CS Bankers and invites D&R to contact him
           with any questions. 1 CR 445–447. And, finally, neither the Deed of
           Trust nor the Property Code impose any requirement to provide the
           lender’s address in the notice.

          Paragraph 6 – D&R concedes that this paragraph notifies it that the
           debt is in default and is being accelerated (if necessary). D&R
           complains, however, that it does not identify what is in default. Yet the
           paragraph references the “Loan Documents” as defined on the first
           page of the letter. 1 CR 445–446. Even more, the subject of the letter
           specifically defines the loan at issue. 1 CR 445.

                                         31
            Paragraph 7 – D&R apparently takes issue with this paragraph because
             it does not specify how to reinstate after acceleration. But, of course,
             D&R could have easily referenced the loan documents to identify the
             correct procedure. Plus, there is nothing about this paragraph that fails
             to comply with the Deed of Trust or the Property Code.

            Paragraph 8 – D&R claims the letter was not sent to the guarantors of
             the Note, as the paragraph indicates. Of course, as discussed above,
             there is nothing in the Deed of Trust or the Property Code that
             requires sending notice to a guarantor. So even if the notice was not
             sent to the guarantors, that does not undermine the foreclosure.
             Moreover, the paragraph expressly disclaims any obligation to give any
             notice other than what is required by the Deed of Trust or the
             Property Code. 1 CR 446.

      In sum, D&R fails to identify any errors in the Notice of Posting letter that

raise a fact issue on its wrongful foreclosure claim. Indeed, D&R failed to identify

any defect in the foreclosure process.

      4.      D&R failed to prove that any alleged irregularity in the
              foreclosure caused it any damages.

      Moreover, even if the foreclosure suffered from any substantive defect, that

would not entitle D&R to the remedy it seeks—rescission of the foreclosure and

return of the property. That remedy is an equitable one. And one that seeks equity,

must do equity. See Lambert, 993 S.W.2d at 835–36 (citing cases).

      In this case, to “do equity” D&R would have had to tender payment of the

debt owed. In Texas, even if a substitute trustee’s deed is void, “[t]ender of

whatever sum is owed on the mortgage debt is a condition precedent to the

                                          32
mortgagor’s recovery of title from a mortgagee who is in possession and claims title

under a void foreclosure sale.” James v. Wells Fargo Bank, N.A., 2014 WL 2123060

(S.D. Tex. May 21, 2014) (internal citations omitted); see also Fillion v. David

Silvers Co., 709 S.W.2d 240, 246 (Tex. App.—Houston [14th Dist.] 1986, writ

ref’d n.r.e.); Willoughby v. Jones, 151 Tex. 435, 251 S.W.2d 508 (1952).

       Here, there is no evidence that D&R ever tendered the debt it owed on the

Note. Nor did D&R allege that all conditions precedent had occurred. As a result,

even if there was a technical defect in the foreclosure, D&R still would not receive

title to the property because it failed to tender payment of the half-million dollar

debt it owes.

       More still, D&R failed to prove that any alleged defect in the foreclosure

caused or contributed to cause the property to be sold for a grossly inadequate

price. Sauceda v. GMAC Mortg. Corp., 268 S.W.3d 135, 139 (Tex. App.—Corpus

Christi 2008, no pet.); Am. Sav. & Loan Ass’n of Houston, 531 S.W.2d at 587.20

Thus, even if D&R sought damages from the foreclosure, it would not be entitled

to that remedy either.

20
  To the extent a plaintiff seeks damages for wrongful foreclosure, they must show: (1) a defect
in the foreclosure sale proceedings; (2) a grossly inadequate selling price; and (3) a causal
connection between the defect and the grossly inadequate selling price. Sauceda, 268 S.W.3d at
139. A “grossly inadequate selling price” would have to be so little as “to shock a correct mind.”
Martins, 772 F.3d 249.

                                               33
      5.     Because the foreclosure was proper, D&R’s quiet title claim fails
             as a matter of law.

      Finally, D&R admits its quiet title claim is “secondary and follows any ruling

related to foreclosure.” Brief of Appellants at 27. In other words, if the foreclosure

was proper, then the quiet title claim fails. That dooms D&R’s quiet title claim.

      A suit to clear title or quiet title relies on the invalidity of the defendant's

claim to the property. Longoria v. Lasater, 292 S.W.3d 156, 165 n.7 (Tex. App.—

San Antonio 2009, pet. denied). The effect of a suit to quiet title is to declare

invalid or ineffective the defendant's claim to title. Essex Crane Rental Corp. v.

Carter, 371 S.W.3d 366, 388 (Tex. App.—Houston [1st Dist.] 2012, pet. denied).

The plaintiff has the burden of supplying the proof necessary to establish his

superior equity and right to relief. Id. The plaintiff must prove, as a matter of law,

that he has a right of ownership and that the adverse claim is a cloud on the title

that equity will remove. Id.

      Here, D&R’s wrongful foreclosure claim was properly dismissed by

summary judgment. The foreclosure, as discussed at length above, complied with

the Property Code and the Deed of Trust. As a result, D&R has no right of

ownership. That means CS Bankers lawfully acquired title to the property at the

foreclosure sale. 1 CR 449–452. When CS Bankers later transferred the property to

                                         34
Fabricators, it also transferred its good title. As a result, Fabricators has good and

equitable title to the Wade Road property.

          In addition, D&R seemingly admits that it does not have a quiet title claim

against Fabricators or Hendry. Brief of Appellants at 27. In its passing discussion of

quiet title, D&R plainly states “there are no claims against [Fabricators] or Hendry

regarding foreclosure—only that they conspired with [CS Bankers] and later ended

up with the [Wade Road property].” Id. D&R made that same admission to the

trial court back in September 2014. 1 CR 603. Given D&R’s admission that its quiet

title claim is inextricably linked with its foreclosure claim, those statements alone

are sufficient grounds to affirm Fabricators’ ownership and title to the Wade Road

property.

B.        THE SUMMARY JUDGMENTS DISPOSED OF ALL CLAIMS.

          In their third point of error, the Rushings claim the trial court’s grant of

summary judgment exceeded the relief requested. According to the Rushings,

Fabricators and Hendry did not move for summary judgment on a promissory

estoppel claim.21 Brief of Appellants at 28.22 The sum total of the Rushings’

supposed promissory estoppel claim is:

21
     The Rushings did not assert a promissory estoppel claim against Smith.
22
 The Rushings’ citation for this proposition is, “(see all summary judgment motions).” Brief of
Appellants at 28.

                                                 35
      Quantum Meruit

             The acts above show that D&R and the Rushings were deprived
      of their property, business and livelihood due to the actions and
      promises of TGE, TGFI, TGF, TC, and CSB. Under quantum meruit
      and promissory estoppel, D&R and the Rushings seek the return of
      their business and property or at least monetary damages equivalent to
      the loss of services, material and property.

1 CR 640–641 (Rushings’ Third Amended Claims). That’s it—a mere two words

buried in a paragraph discussing quantum meruit, under a heading of quantum

meruit, and pleading elements of quantum meruit. In fact, their third amended

petition was the first and only time the Rushings made any mention—albeit

murkily—of promissory estoppel.

      In any event, the Rushings’ argument that any promissory estoppel claim is

still outstanding against Fabricators or Hendry fails for many reasons.

      1.     Fabricators and Hendry were entitled to summary judgment on
             the alleged promissory estoppel claim because they did not make
             any promises to the Rushings.

      First, the trial court properly dismissed the Rushings’ supposed promissory

estoppel claim via summary judgment. Though a motion for summary judgment

generally must stand or fall on the grounds presented in the motion, there is a

significant caveat: summary judgment is proper where a defendant has conclusively

disproven an element central to all causes of action or an unaddressed cause of

action derivative of the addressed causes of action. Smith v. Heard, 980 S.W.2d
36
693, 697–98 (Tex. App.—San Antonio 1998, pet. denied); see also Lampasas v.

Spring Center, Inc., 988 S.W.2d 428, 435–36 (Tex. App.—Houston [14th Dist.]

1999, no pet.); Dubose v. Worker’s Med., P.A., 117 S.W.3d 916, 922-23 (Tex. App.—

Houston [14th Dist.] 2003, no pet.). That makes sense. Why waste judicial

resources on claims that have been legally or factually disproven?

      Here, the Rushings alleged two causes of action that share overlapping

elements: fraud and promissory estoppel. Fabricators and Hendry indisputably

moved for—and obtained—summary judgment on the Rushings’ cause of action

for fraud. In the process, they proved that neither Fabricators nor Hendry made a

material misrepresentation relied on by the Rushings; indeed, no representations

were ever made to the Rushings. See 1 CR 651–652, 669–694. In their response, the

Rushings chose not to controvert that evidence and abandoned their fraud claim. 2

CR 1383–1393.

      Similar to a fraud claim, promissory estoppel requires a promise that is relied

on by the promisee. See English v. Fischer, 660 S.W.2d 521, 524 (Tex. 1983); Allied

Vista, Inc. v. Holt, 987 S.W.2d 138, 141 (Tex. App.—Houston [14th Dist.] 1999,

pet. denied). So for the Rushings to recover under either fraud or promissory

estoppel, they had to prove that Fabricators or Hendry made a representation (or

promise) that they relied on to their detriment; they are common elements to both

                                         37
causes of action. By admitting that neither Fabricators nor Hendry made any

representations to them that they relied on to their detriment, the Rushings

established Fabricators’ and Hendry’s entitlement to summary judgment on their

promissory estoppel claim as a matter of law.

      This case is remarkably similar to Ortiz v. Collins. 203 S.W.3d 414 (Tex.

App.—Houston [14th Dist.] 2006, no pet.). In that case, like here, a plaintiff pled

claims for both fraud and promissory estoppel. Id. at 423. The defendant moved for

summary judgment on the fraud claim, but did not expressly move for summary

judgment on the promissory estoppel claim. Id. Still, the trial court granted

summary judgment on both claims. Id. The court of appeals affirmed. The

Fourteenth Court concluded that summary judgment was proper because the

defendant’s motion negated the fraud claim and, by doing so, necessarily negated

the promissory estoppel claim because the two share overlapping elements. Id.

Thus, the defendant’s motion was broad enough to cover (and disprove) the

promissory estoppel claim that was not expressly presented in the motion. Id.

      So it is here. The Rushings could not prevail on their fraud claim because

there were no promises; they could not prevail on their promissory estoppel claim

for the same reason. Thus, the motions for summary judgment were broad enough

                                        38
to cover the promissory estoppel pleading, and there are no remaining claims

pending against Fabricators or Hendry.

      2.     The Rushings waived any complaint to Fabricators’ and Hendry’s
             summary judgments when they failed to file exceptions.

      Second, the Rushings failed to except to the motions for summary judgment,

which were entitled “final” and were unambiguously meant to dispose of all

claims. Indeed, in their prayer for relief, Fabricators and Hendry asked the trial

court to “grant their motions for final summary judgment, [and] dismiss all [the

Rushings’] remaining claims against them ….” 1 CR 661 (emphasis added).

Nevertheless, the Rushings chose not to mention promissory estoppel in their

response. The Rushings’ deliberate silence then undermines their claim now that

the summary judgments did not dispose of all claims. If there was a claim pending

for which the Rushings felt Fabricators or Hendry did not move for summary

judgment, they should have brought that to the trial court’s attention. And if they

were confused as to what claims Fabricators or Hendry were moving on, the

Rushings had an obligation to except to the motions. See McConnell v. Southside

Independent School Dist., 858 S.W.2d 337, 342 (Tex. 1993). Because they failed to

file an exception to clarify which grounds were presented in the motions, the

Rushings waived their right to complain to this Court. Id. at 342–43.

                                         39
      3.     The Rushings abandoned any promissory estoppel claim.

      Third, the Rushings had yet another chance—indeed, an obligation—to alert

the trial court to the supposed promissory estoppel claim. But, again, they didn’t.

      After it granted final summary judgment in favor of Fabricators and Hendry,

the trial court requested briefing regarding what claims, if any, were still pending.

(Undoubtedly, the trial court wanted to avoid this precise situation.) In response,

the Rushings filed a “Brief on Current Claims” that omits any reference to any

claims still pending against Fabricators or Hendry. 2 CR 2012–2014. Though the

Rushings do claim that “Plaintiff’s multiple summary judgment motions fail to

address the promissory estoppel claims,” neither Fabricators nor Hendry were

plaintiffs. And the Rushings did not define “plaintiffs” to include either

Fabricators or Hendry. Indeed, the Rushings repeatedly refer to Fabricators and

Hendry as “third party defendants,” “TGF,” and “Hendry”—but never as

“plaintiffs.” 2 CR 2013.

      Had the Rushings alerted the trial court to a pending promissory estoppel

claim against Fabricators or Hendry, the trial court could have addressed that claim

prior to this appeal. But the Rushings chose not to. Thus, the Rushings abandoned

that cause of action and waived any challenge to the summary judgment on that

                                         40
issue because they represented that no claims were outstanding against either

Fabricators or Hendry after the trial court granted the final summary judgments.

      4.    The Rushings failed to adequately plead promissory estoppel.

      Fourth, the alleged promissory estoppel claim is not properly pleaded. A

proper pleading must “consist of a statement in plain and concise language of the

plaintiff’s cause of action . . . .” TEX. R. CIV. P. 45. Rule 45 requires that a

petition give fair notice of the plaintiff’s claims. City of Houston v. Howard, 786
S.W.2d 391, 393 (Tex. App.—Houston [14th Dist.] 1990, writ denied). A court

must be able, from an examination of the plaintiff's pleadings alone, to ascertain

with reasonable certainty the elements of a cause of action and the relief sought

with sufficient particularity upon which a judgment may be based. Stoner v.

Thompson, 578 S.W.2d 679, 683 (Tex. 1979).

      Here, the Rushings’ petition fails to adequately allege the elements of a

cause of action for promissory estoppel. The Rushings do not allege any promise

made by Fabricators or Hendry that they relied on to their detriment. Indeed, the

only thing the Rushings did was hide legalese within a claim that has nothing to do

with promissory estoppel. Thus, the mere inclusion of the words “promissory

estoppel” is insufficient to properly plead a cause of action. See, e.g., Coffey v.

Johnson, 142 S.W.3d 414, 417 (Tex. App.—Eastland 2004, no pet.).

                                        41
      Consequently, the Court should affirm the summary judgment on the

promissory estoppel claim as to Fabricators and Hendry.

C.    THE RUSHINGS HAD ADEQUATE TIME FOR DISCOVERY.

      In point of error four, the Rushings say they did not have adequate time for

discovery; as a result, they claim the no-evidence motions for summary judgment

were premature. This argument fails for several reasons.

      First, the Rushings failed to preserve this issue for appeal. When a party

contends it has not had adequate time for discovery before a summary judgment

hearing, it must file either an affidavit explaining the need for further discovery or a

verified motion for continuance. Triad Home Renovators v. Dickey, 15 S.W.3d 142,

145 (Tex. App.—Houston [14th Dist.] 2000, no pet.). The Rushings did neither.

      Second, the Rushings requested only minimal discovery from Fabricators,

Hendry or Smith. They never asked for a deposition. And they never moved to

compel any discovery from Fabricators, Hendry, or Smith. In short, the Rushings

never presented this complaint to the trial court for a ruling—mainly because the

Rushings had no discovery complaint to present to the trial court. The Rushings

cannot claim the trial court erred when they never asked it to do anything.

      Third and finally, the Rushings had plenty of time for discovery. The lawsuit

was nearly two years old before the trial court granted a no-evidence summary

                                          42
judgment. And the Rushings had at least six months to obtain discovery from

Fabricators, Hendry, and Smith. Just because the Rushings chose to conduct very

limited discovery does not mean they did not have enough time to do more.

D.     THE TRIAL COURT’S GRANT OF SUMMARY JUDGMENT                                      ON    THE
       REMAINING CLAIMS IS UNASSAILABLE.

       In point of error five, the Rushings complain (very) generally about a number

of causes of action. None had merit, and all were properly dismissed.

       1.      The Rushings admit there were no misrepresentations.

       The trial court’s grant of summary judgment on the Rushings’ fraud23 and

negligent misrepresentation24 claims was proper because the Rushings admitted

that neither Fabricators, nor Hendry, nor Smith ever made any representations to

them. 1 CR 650–652; 1 CR 822–824. Indeed, the Rushings failed to even address

23
   To recover on an action for fraud, a party must prove that (1) a material representation was
made, (2) the representation was false, (3) when the speaker made the representation, he knew it
was false or made it recklessly without knowledge of the truth and as a positive assertion, (4) the
speaker made it with the intention that it should be acted upon by the party, (5) the party acted in
reliance upon it, and (6) the party thereby suffered injury. Lundy v. Masson, 260 S.W.3d 482, 492
(Tex. App.—Houston [14th Dist.] 2008, pet. denied) (citing cases).
24
   A cause of action for negligent misrepresentation requires: (1) the representation is made by a
defendant in the course of his business, or in a transaction in which he has a pecuniary interest;
(2) the defendant supplies “false information” for the guidance of others in their business; (3)
the defendant did not exercise reasonable care or competence in obtaining or communicating the
information; and (4) the plaintiff suffers pecuniary loss by justifiably relying on the
representation. Fed. Land Bank Ass'n of Tyler v. Sloane, 825 S.W.2d 439, 442 (Tex. 1991).

                                                43
these causes of action in their response to the motions filed by Fabricators,25

Hendry, and Smith. See 2 CR 1383–1393; 2 CR 1461–1468.

       The Rushings did not believe there was a fact issue when they filed their

responses; they cannot change their minds now.

       2.     The Rushings admit there were no contracts.

       The Rushings did not argue that they ever had a contract with Smith. And

they later admitted they did not have a contract with either Fabricators or Hendry.

1 CR 653. The trial court’s summary judgment on this issue, then, is correct.

       3.     The Rushings’ quantum meruit claim fails because they did not
              provide services or materials.

       The Rushings next claim that the trial court erred when it accepted that

quantum meruit applies only to services and materials, not to real property. Brief of

Appellants at 35. But the trial court was right. To recover under quantum meruit, a

claimant must render valuable services or furnish materials. See, e.g., Vortt

Exploration Co., Inc. v. Chevron U.S.A., Inc., 787 S.W.2d 942, 944 (Tex. 1990)

(citing cases). The Rushings, however, premised their quantum meruit claim on

25
  As a matter of law, Fabricators could not have made any representations to the Rushings in
2012 because, as Penn Rushing admitted, that entity did not exist until 2013. See 1 CR 679
(“[t]here wasn’t a company then.”).

                                            44
their theory that they provided their real property to an alleged joint venture.26 As a

matter of law, then, their quantum meruit claim fails because they did not claim to

have provided services or materials.27 Undeterred, the Rushings cite two cases they

claim support their notion that quantum meruit can be applied to real property.

Neither does.

       In the first case, Miller v. Graves, an owner of an interest in land pledged her

interest to her attorney as payment to represent her. 185 S.W.2d 745, 745-46 (Tex.

Civ. App.—Fort Worth 1945, writ ref’d). The attorney provided the agreed-upon

services, but the landowner refused to convey the interest in the land as promised.

The attorney then sued to recover his fees for services rendered. Id. at 745-46. The

Miller court only briefly discussed quantum meruit, but held that the attorney could

obtain a personal judgment (but not a conveyance of the real property) for the value

of his services. Id. at 748-49. Notably, the attorney provided services, not real

property, and the pledge of real property was unrelated to the court’s quantum

meruit holding.

26
  Because the Rushings claim they provided their real property under the alleged joint venture
agreement, it is doubtful they could recover under quantum meruit in any event. In re Kellogg
Brown & Root, Inc., 166 S.W.3d 732, 740 (Tex. 2005).
27
  In reality, the Rushings’ quantum meruit claim is simply a rehash of their wrongful foreclosure
and quiet title claims.

                                               45
       The second case, Scott v. Walker, is likewise unavailing. In that case, a widow

brought suit based on services rendered by herself and her deceased husband, and

she sought to have real property conveyed to her. 141 Tex. 181, 170 S.W.2d 718

(1943). The court agreed that she could use the remedy of quantum meruit to

prevent unjust enrichment for any services she rendered, but specifically denied

any recovery of the real property in question. Id. at 185-86. Again, the only basis for

quantum meruit was the services rendered; the real property had not been provided

by the widow and did not form the basis of her quantum meruit claim.

       In short, there is no authority for the Rushings’ idea that quantum meruit

can be applied to real property; thus, the trial court properly granted summary

judgment.

       4.      Neither Fabricators nor Hendry had a fiduciary relationship with
               the Rushings.

       Next, the Rushings take issue with the trial court’s summary judgment on

their breach of fiduciary duty claim.28 Simply put, the Rushings admit they never

had a fiduciary relationship with Hendry or Fabricators.

28
   The elements of a breach of fiduciary duty claim are: (1) a fiduciary relationship between the
plaintiff and defendant, (2) a breach by the defendant of his fiduciary duty to the plaintiff, and (3)
an injury to the plaintiff or benefit to the defendant as a result of the defendant's breach. Lundy,
260 S.W.3d at 501. Due to its extraordinary nature, the law does not recognize a fiduciary
relationship lightly. See, e.g., Willis v. Donnelly, 199 S.W.3d 262, 278 (Tex. 2006).

                                                 46
      Fiduciary relationships can be either formal or informal. See, e.g., Texas Bank

and Trust Co. v. Moore, 595 S.W.2d 502, 507 (Tex. 1980). For an informal fiduciary

relationship to exist in a business transaction, the relationship must exist before and

apart from the transaction that creates the lawsuit. See, e.g., Willis, 199 S.W.3d at

277. But Hendry had no relationship with the Rushings—whether before or during

the transaction at issue. 1 CR 653–654, 680 (168:19–21, 169:2–4), 690 (129:13–22).

And Fabricators did not exist until after the transaction. 1 CR 679. Thus, no

informal fiduciary relationship existed.

      Moreover, no formal fiduciary relationship existed. The Rushings admit

neither Hendry nor Fabricators were part of the alleged joint venture. 1 CR 674

(126:15–25), 675 (144:17–20), 676 (155:21–156:5). And the Rushings provided no

evidence (or even allegations) of any other formal fiduciary relationship between

the parties. Thus, the Rushings’ cause of action for breach of fiduciary duty fails.

      5.     The Rushings had no personal property to convert.

      The Rushings next claim that they adduced more than a scintilla of evidence

that Fabricators or Hendry converted the personal property of Michael Rushing.

They did not.

      A claim for conversion requires the plaintiff to show (1) title, (2) right to

possession, and (3) a demand for return of the property unless the possessor’s acts

                                           47
manifest a clear repudiation of the plaintiff’s rights. Schwartz v. Pinnacle

Communications, 944 S.W.2d 427, 432 (Tex. App.—Houston [14th Dist.] 1997, no

writ).

         Importantly, the Rushings did not have title or a right to possess any of the

personal property they claim was converted. The Rushings admit that the alleged

personal property was located at the Wade Road facility. Brief of Appellants at 41.

As a result, all of that personal property was subject to the Deed of Trust. 1 CR

697–698 (50:10–52:18); see also 1 CR 421. By executing that Deed of Trust, D&R

(owned and controlled by the Rushings) conveyed a security interest in not only the

real property, but also:

         all goods, equipment, fixtures, inventory, machinery, furniture,
         furnishings 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 and used or usable for any
         present or future operation of any building or buildings now or
         hereafter located on said lands . . . .

1 CR 421. As an initial matter, then, the Rushings forfeited their title and right to

possess the personal property via the foreclosure.

         That leads to the second problem: the Rushings have no evidence that any of

the personal property actually belonged to them individually, rather than to D&R.

Indeed, the Rushings never specifically identify what personal property was

converted. The Rushings even admit that there was a dispute between D&R and

                                           48
the individual Rushings regarding what personal property belonged to whom. 2 CR

1388. Unless the Rushings could provide evidence of what personal property

belonged to Michael Rushing (or any other individual Rushing) rather than D&R,

the trial court had no choice but to decide that the personal property was subject to

the Deed of Trust.

      Lastly, even if the Rushings could identify specific personal property not

subject to the Deed of Trust, there is still no basis for a conversion claim. The

Rushings admit they were given an opportunity to take personal property that they

identified as theirs, and that Hendry never prevented them from taking anything. 1

CR 693–694 (132:7–133:24). So, no conversion.

      6.     The Rushings cannot maintain a standalone cause of action for
             civil conspiracy.

      The Rushings claim they can maintain an independent cause of action for

civil conspiracy. They cannot. Indeed, “[a]llegations of conspiracy are not

actionable absent an underlying overt unlawful act or purpose.” Am. Tobacco Co.,

Inc. v. Grinnell, 951 S.W.2d 420, 438 (Tex. 1997). That is because it is not the

conspiracy itself, but an injury to the plaintiff resulting from an underlying act done

pursuant to the common purpose that gives rise to a cause of action for civil

conspiracy. Carroll v. Timmers Chevrolet, Inc., 592 S.W.2d 922, 925 (Tex. 1979). In

                                          49
other words, “recovery is not based on the conspiracy; instead, it is based on an

underlying tort.” Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex. 1996).29

       As discussed throughout this brief, the Rushings’ tort claims all fail; thus,

there is no underlying claim upon which to build a conspiracy claim. When the trial

court granted summary judgment on those tort claims, it also had to dismiss the

conspiracy claims. See Ortiz, 203 S.W.3d at 422-23 (“Because summary judgment

was proper on [the] underlying fraud claim …, summary judgment was proper on

[the] conspiracy to defraud claims as well.”). The trial court’s judgment is correct.

       7.      The Rushings had no contracts with which Fabricators or Hendry
               could interfere.

       To prove tortious interference, the Rushings had to show: (1) the existence

of a contract subject to interference, (2) the occurrence of an act of interference

that was willful and intentional, (3) the act was a proximate cause of the plaintiff’s

damage, and (4) actual damage or loss occurred. Holloway v. Skinner, 898 S.W.2d
793, 795-96 (Tex. 1995).

       First of all, there was no contract with which Fabricators or Hendry could

interfere: the trial court determined that the letter of intent was not a valid

29
  This is hardly a novel concept. Hordes of cases say the same thing. See, e.g., Staples v. Merck &
Co., Inc., 270 F. Supp. 2d 833, 845 (N.D. Tex. 2003); Leigh v. Danek Med., Inc., 28 F. Supp. 2d
401, 404 (N.D. Tex. 1998) (citing Fisher v. Yates, 953 S.W.2d 370, 381 (Tex. App.—Texarkana
1997, no writ)).

                                                50
contract. 2 CR 1972. Second, to support this claim, the Rushings alleged that

Fabricators and Hendry “conspired to interfere and make it impossible to make

payments due under the Binding Letter of Intent as well as violating other

contractual obligations.” 1 CR 639. But the Rushings were not even sure what that

meant, and they certainly offered no evidence of it.

      For instance, when asked what Hendry did to “conspired to interfere,” Penn

Rushing initially said, “Nothing.” 1 CR 682 (174:21–24). He later said “I can’t tell

you what [Hendry’s] active role was involved in that, so . . . .” 1 CR 683 (177:25–

178:4). His third different answer was, “[Hendry] obviously agreed that he would

buy the [Wade Road property].” 1 CR 683 (177:3–8). But even if true, Hendry’s

agreement to purchase the property months after the foreclosure is not a basis for

tortious interference.

      In their summary judgment response, the Rushings claimed that “Brian

Hendry knew that [the Rushings] and [Texas Gulf Energy] were joint venture

partners and had a lease for the [Wade Road property].” 1 CR 1389. But the

Rushings provide no evidence of this, and, quite simply, cannot say what Hendry

knew or did not know. They also claim—again without support—that Hendry

knew of contracts between the Rushings and Texas Gulf Energy. They then leap

from this supposition to their claim that Hendry interfered with those contracts.

                                         51
What is missing, however, is any explanation or evidence of how Hendry interfered

with any alleged contracts.

      In any event, tortious interference requires proof that the defendant

intended to interfere with the contract. Southwestern Bell Telephone Co. v. John

Carlo Texas, Inc., 843 S.W.2d 470, 472 (Tex. 1992). Here, the Rushings have no

evidence to support any intentional interference with any alleged contracts.

      Like all of the other claims discussed above, the trial court properly granted

summary judgment on this one too. Consequently, the trial court’s summary

judgments should be affirmed.

E.    GORE AND THE RUSHINGS REPEATEDLY FILED GROUNDLESS PLEADINGS,
      AND THE TRIAL COURT PROPERLY SANCTIONED THEM.

      In their sixth point of error, Gore and the Rushings claim the trial court’s

imposition of monetary sanctions against them was improper. But the trial court

had ample evidence that Gore and the Rushings violated Rule 13 of the Rules of

Civil Procedure and Chapter 10 of the Civil Practice and Remedies Code.

      1.     Sanctions are appropriate under Rule 13 and Chapter 10.

      Rule 13 authorizes a trial court to impose sanctions against an attorney, a

represented party, or both, who file a pleading that is either (1) groundless and

brought in bad faith; or (2) groundless and brought for the purpose of harassment.

See TEX. R. CIV. P. 13. The rule defines “groundless” as having “no basis in law

                                         52
or fact and not warranted by good faith argument for the extension, modification,

or reversal of existing law.” TEX. R. CIV. P. 13. One purpose of the rule is to

check abuses in the pleading process—that is, to ensure that at the time the

challenged pleading was filed, the litigant’s position was factually grounded and

legally tenable. Appleton v. Appleton, 76 S.W.3d 78, 86 (Tex. App.—Houston 2002

[14th Dist.], no pet.). To determine whether Rule 13 sanctions are proper, the trial

court must examine the facts and circumstances in existence at the time the

pleading was filed. Elkins v. Stotts–Brown, 103 S.W.3d 664, 668 (Tex. App.—Dallas

2003, no pet.).

      Similarly, to award sanctions under Chapter 10, it must be shown that:

(1) the pleading or motion was brought for an improper purpose; (2) there were no

grounds for the legal arguments advanced; or (3) the factual allegations or denials

lacked evidentiary support. See TEX. CIV. PRAC. & REM. CODE § 10.001; Low v.

Henry, 221 S.W.3d at 614. Chapter 10 specifies that one of the aims for imposition

of sanctions for the filing of frivolous or groundless pleadings is to “deter repetition

of the conduct or comparable conduct by others similarly situated.” TEX. CIV.

PRAC. & REM. CODE § 10.004(b). The phrase “improper purpose” is the

equivalent of “bad faith” under Rule 13. See TEX. R. CIV. P. 13; cf. Save Our

                                          53
Springs Alliance, Inc. v. Lazy Nine Mun. Util. Dist. ex rel. Bd. of Directors, 198
S.W.3d 300, 321 (Tex. App.—Texarkana 2006, pet. denied).

      The trial court references both Rule 13 and Chapter 10 in its sanctions order.

2 CR 2025–2026. And both rules support sanctions for the conduct here.

      2.     Gore and the Rushings repeatedly filed pleadings containing a
             fraud claim they knew was meritless.

      Gore and the Rushings say the trial court’s sanction is inappropriate because

they made a good-faith argument to extend existing law. Brief of Appellants at 45.

Thus, they claim, their pleadings against Smith were not “groundless.” Id. But, as

the trial court pointed out, this “just doesn’t wash.” RR 80:21–22.

      To determine if a pleading was groundless—that is, filed for an improper

purpose—the trial court must objectively ask whether the party and counsel made a

reasonable inquiry into the legal and factual basis of the claim at the time the suit

was filed. Robson v. Gilbreath, 267 S.W.3d 401, 405 (Tex. App.—Austin 2008, pet.

denied). In sum, “groundlessness” turns on the legal merits of a claim. Id.

      Though Gore and the Rushings now claim they advocated for an extension of

civil conspiracy to encompass a stand-alone cause of action against a “puppet

master,” that is not what they argued to the trial court. See generally 2 CR 1566–

1569. Instead, Gore and the Rushings filed numerous pleadings—including four

petitions—that stated Smith was liable for fraud and conspiracy. See 1 CR 196 (first

                                         54
petition); 1 CR 286 (first amended); 1 CR 330 (second amended); 1 CR 624 (third

amended). A fraud claim requires a material misrepresentation. Lundy, 260 S.W.3d

at 492. But the Rushings knew when they sued Smith that he had not made any

misrepresentations to them; indeed, there was never any contact between them. RR

24:7–25:10; 39:14–41:12. And the Rushings informed Gore of this fact before the

lawsuit was filed in December 2013. Id. As a result, both Gore and the Rushings

knew that every petition they filed—all four of them—contained claims that were

absolutely untrue. That is sanctionable. See Appleton, 76 S.W.3d at 86.

      At the sanctions hearing, Gore even admitted he knew fraud requires a

misrepresentation—something the he and the Rushings knew Smith had never

made. RR 15:19–19:17. And conspiracy requires an underlying tort—something the

Rushings and Gore knew did not exist. Id. So even if the Rushings are right and

their third amended petition only pled a claim for conspiracy to commit fraud—

which is dubious—that is a claim that does not exist (i.e., meritless). And that still

would not account for the other three petitions that alleged claims known to be

false. Simply put, the legal merits of the fraud and conspiracy claims were zilch.

      Under both Rule 13 and Chapter 10, these pleadings were groundless; the

allegations against Smith lacked evidentiary support and were known to be false

when they were filed, and refiled, and refiled, and refiled. Gore and the Rushings

                                         55
repeatedly and deliberately ignored their obligation to ensure that their filings were

factually grounded and legally tenable. See Appleton, 76 S.W.3d at 86. The trial

court was right to sanction them for their conduct.

      3.     The monetary sanction is not excessive and is supported by
             considerable evidence.

      Next, Gore and the Rushings challenge the amount of the sanction as

“excessive” and without evidence. They initially claim there was no evidence of

the attorney’s fees awarded because Smith’s counsel rested before presenting that

evidence. This argument fails for many reasons.

      First, neither Gore nor the Rushings objected to the presentation of evidence

after Smith’s counsel rested. RR 68:1–25. The trial court specifically requested

testimony from Smith’s counsel regarding the amount and reasonableness of the

fees incurred. Id. If Gore or the Rushings wanted to object to the evidence of

attorney’s fees, that was the time to do it. The failure to object waived any

complaint. See TEX. R. APP. P. 33.1(a).

      Second, the right of a party to reopen its case and introduce additional

evidence is within the sound discretion of the trial court. Apresa v. Montfort Ins. Co.,

932 S.W.2d 246, 249 (Tex. App.—El Paso 1996, no writ) (citing cases). Given that

neither Gore nor the Rushings objected, there was no abuse of discretion for the

trial court to admit the evidence. That is especially true when Gore and the

                                          56
Rushings later adversely called Smith’s counsel and elicited the same information

regarding attorneys’ fees. RR 72:1–73:23.

      Third, the trial court did not need any evidence of attorney’s fees upon which

to base the sanction. When awarded as a sanction, the amount of attorney’s fees is

solely within the discretion of the trial court. Brantley v. Etter, 677 S.W.2d 503, 504

(Tex. 1984). Even if Smith had presented no evidence of his fees, the trial court’s

sanction would still stand. See Glass v. Glass, 826 S.W.2d 683, 688 (Tex. App.—

Texarkana 1992, writ denied) (holding there is no need to prove attorney’s fees

when they are assessed as a sanction).

      Fourth, even though it was not required, Smith’s counsel testified

extensively regarding the apportionment of reasonable and necessary attorney’s

fees between Smith, on the one hand, and Fabricators and Hendry, on the other.

See, e.g., RR 71:11–72:2; 73:19; 75:21–78:9; see also Miller v. Armogida, 877 S.W.2d
361, 365 (Tex. App.—Houston [1st Dist.] 1994, writ denied) (holding when

attorney’s fees are assessed as sanctions, no proof of necessity or reasonableness is

required). Gore and the Rushings provided no contrary evidence.

      Fifth and finally, despite their complaint that the trial court’s sanction was

“excessive,” neither Gore nor the Rushings offered any evidence of a different,

less “excessive” amount. Gore could have offered rebuttal testimony, but he chose

                                          57
not to. Or Gore and the Rushings could have called an attorney’s fees expert to

offer rebuttal testimony, but they chose not to do that either. Without offering any

contrary evidence, they can hardly complain now about the amount of the sanction.

      4.     The sanction must be affirmed.

      In short, the numerous pleadings filed by Gore and the Rushings were

groundless. Additionally, there is extensive evidence of reasonable and necessary

attorney’s fees in the record. Thus, the trial court’s award of $33,250 in fees as a

sanction is justified. Moreover, neither Gore nor the Rushings raised any other

challenge to the sanction or the sanction order. Thus, they waived any other

complaints. See Alexander v. Alexander, 956 S.W.2d 712, 714 (Tex. App.—Houston

[14th Dist.] 1997, pet. denied) (collecting authority).

F.    APPELLANTS WAIVED ANY ERROR BY FAILING TO FILE A PROPER BRIEF.

      Finally, while Fabricators, Hendry, and Smith have labored to address all of

the Rushings’ arguments, it is exceedingly difficult to do so given the woeful

inadequacy of their brief. The Rushings repeatedly fail to cite the record, and the

citations they do give are often incorrect. Moreover, the Rushings rely almost

exclusively on arguments devoid of citations to relevant legal authority.

      As but one example, the Rushings spend six pages listing “Other Defects”

that supposedly justify setting the foreclosure aside. But those six pages contain

                                          58
virtually no substantive citations. And some of their citations simply do not exist.

See, e.g., Exhibits E & H to Brief of Appellants.

      Even when the Rushings do cite authority, it is little better. One cite offered

by the Rushings is: “see all summary judgment motions.” Brief of Appellants at 28.

Another cite references more than 100 pages of the record. Id. at 30. As do others.

See, e.g., id. at 18 and 35. And the Rushings’ favorite citation seems to be

“Affidavits,” which appears throughout their brief. See, e.g., Brief of Appellants at

11, 23, 30, 31 (three times), 32 (twice), 33, 34 (three times), 35 (three times), 41, 42.

Given that there are more than 3,000 pages in the clerk’s record—and countless

affidavits in those pages—this citation offers no guidance.

      These deficiencies, together with the rambling, opaque arguments made

throughout the Rushings’ brief, waives any error in the trial court. Under Texas

Rule of Appellate Procedure 38, the appellant’s brief must contain a clear and

concise argument, including appropriate citations to authority and the record.

TEX. R. APP. P. 38.1(e), (h). Failure to cite legal authority or provide substantive

analysis of the legal issue presented results in waiver of the complaint. Bullock v.

Am. Heart Ass’n, 360 S.W.3d 661, 665 (Tex. App.—Dallas 2012, pet. denied)

(citing cases). Similarly, failure to provide citations to the record also results in

                                           59
waiver of the issue on appeal. See TEX. R. APP. P. 38.1(i); see also Fredonia State

Bank v. Gen. Am. Life Ins. Co., 881 S.W.2d 279, 284 (Tex. 1994).

      It is the Rushings’ burden to present and explain their assertions of error.

Here, the Rushings essentially invite the Court to perform an independent review

of the record and the applicable law, and then determine whether there was error.

Not only should the Court decline that invitation, it must. See, e.g., Green v.

Kaposta, 152 S.W.3d 839, 841 (Tex. App.—Dallas 2005, no pet.); Valadez v. Avitia,

238 S.W.3d 843, 845 (Tex. App.—El Paso, 2007, no pet.); Coble v. Adams, 2014
WL 6602480, at *2–3 (Tex. App.—Houston [1st Dist.] Nov. 20, 2014, no pet.)

(mem. op.).

G.    PRAYER

      Appellees Texas Gulf Fabricators, LLC, Brian G. Hendry, and Lester H.

Smith respectfully request the Court affirm the trial court’s judgment.

                                        60
Respectfully submitted,

DOBROWSKI, LARKIN & JOHNSON
L.L.P.

By:    /s/ Cody W. Stafford
       Paul J. Dobrowski
       State Bar No. 05927100
       pjd@doblaw.com
       Cody W. Stafford
       State Bar No. 24068238
       cstafford@doblaw.com
4601 Washington Ave, Suite 300
Houston, Texas 77007
(713) 659-2900 (Telephone)
(713) 659-2908 (Facsimile)

Counsel for Appellees Texas Gulf Fabricators,
LLC, Brian G. Hendry, and Lester H. Smith

  61
                          Certificate of Service

      I hereby certify that a true and correct copy of this Brief of Appellees has
been served on all counsel of record on the 4th day of November, 2015, by e-filing,
e-mail, and U.S. Mail as follows:

      George W. Gore
      ggore@goretexas.com
      The Gore Law Firm
      6200 Savoy, Suite 1150
      Houston, Texas 77036
      Counsel for Appellants

      Gary M. Jewell
      gjewell@csj-law.com
      Adam L. Tepper
      atepper@csj-law.com
      Christian, Smith & Jewell, L.L.P.
      2302 Fannin, Suite 500
      Houston, Texas 77002
      Counsel for Appellees Texas Gulf Energy, Inc.,
      CS Bankers V, LLC, and Timothy Connolly

                                       /s/ Cody W. Stafford
                                       Cody W. Stafford

                                         62
                      Certificate of Compliance

      1.     This brief complies with the type-volume limitation of Tex. R. App. P.
9.4 because it contains 14,134 words, excluding the parts of the brief exempted by
Tex. R. App. P. 9.4.

       2.    This brief complies with the typeface requirements of Tex. R. App. P.
9.4(e) because it has been prepared in a proportionally spaced typeface using 14-
point font with footnotes typed in 12-point font.

      Dated: November 4, 2015.

                                      /s/ Cody W. Stafford
                                      Cody W. Stafford
                                      Counsel for Appellees Texas Gulf Fabricators,
                                      LLC, Brian G. Hendry, and Lester H. Smith

                                        63