Rockwall Commons Associates v. Mrc Mortgage Grantor Trust I

331 S.W.3d 500

ROCKWALL COMMONS ASSOCIATES, LTD., A Texas Limited Liability Partnership, Stone Rockwall Properties, LLC, A Texas Limited Liability Company, and Tom F. Stone, an Individual, Appellants,

v.MRC MORTGAGE GRANTOR TRUST I, A Delaware Trust, Appellee.

No. 08–09–00030–CV.

Court of Appeals of Texas, El Paso.

Dec. 29, 2010.

Robert L. Yeager III, Dallas, TX, for Appellants.Patrick D. Keating, Haynes & Boone, LLP, Dallas, TX, for Appellee.Before CHEW, C.J., McCLURE, and RIVERA, JJ.

OPINION

GUADALUPE RIVERA, Justice.

Appellants, Rockwall Commons Associates, Ltd., Stone Rockwall Properties, L.L.C., and Tom F. Stone, appeal the trial court's judgment in favor of MRC Mortgage Grantor Trust I, Appellee. We affirm.

BACKGROUND

This case arises from Appellants' failure to pay non-refinanced interest pursuant to the terms of a letter-agreement for which the trial court rendered summary judgment. On March 30, 2004, MuniMae Midland Construction Finance, L.L.C. (MuniMae), loaned Appellant Rockwall Commons Associates, Ltd. (Rockwall Commons), $22,400,000 for construction purposes. The construction loan agreement was executed by Tom F. Stone (Stone) as manager of both Rockwall Commons and Stone Rockwall Properties, L.L.C. (Rockwall Properties), Rockwall Common's general partner. Stone, in this same capacity, also executed a Guaranty Agreement and Construction Mortgage Note (the mortgage note) in which he guaranteed and promised to repay the construction loan amount and secured the construction mortgage note. The mortgage note was due to mature on July 1, 2006, or upon permanent loan funding, whichever occurred first. According to Appellee's original petition, MuniMae later became known as MMA Construction Finance, L.L.C. (MMA). MMA allegedly assigned its rights, title, and interest in the construction loan to Appellee.

On February 15, 2007, Appellants executed a “letter agreement” with Appellee. ¹ The letter agreement references the “Construction Loan ... from MMA Construction Finance, LLC (formerly known as MuniMae Midland Construction Finance, LLC) as assigned to MRC Mortgage Grantor Trust I ... to Rockwall Commons Associates, Ltd.” The document was executed by Stone as manager of Rockwall Commons and Stone Rockwall Properties. The letter agreement reveals that Rockwall Commons refinanced the construction loan with Capmark Bank (Capmark loan), but the refinancing was insufficient to timely repay $662,173 of accrued interest to Appellee. Under the terms of the letter agreement, Appellee agreed to defer payment of the $662,173 interest due and released its first-priority deed of trust to permit Appellants to secure the refinancing. Rockwall Commons and Stone Rockwall Properties agreed to repay the deferred interest amount plus additional interest thereon “equal to 1% over the prime rate in the Wall Street Journal or comparable prime rate published from time to time and selected by MRC as such prime rate adjusts from time to time.” Appellants agreed to pay $232,422 of the balance on or before May 15, 2007, and the balance of $429,751 on or before the maturity or acceleration of the Capmark loan. As part of this agreement, Stone also ratified and confirmed his obligations as guarantor under the original guaranty agreement. Once again, Stone signed the letter agreement in his individual capacity and as manager of Rockwall Commons and Stone Rockwall Properties.

On August 27, 2007, Appellee brought suit for breach of contract against Appellants and for breach of guaranty against Stone, and alleged that Appellants had failed to make any payments as set forth in the letter agreement. Appellants filed a sworn answer on October 9, 2007, generally denying the allegations in the petition and asserting affirmative defenses.

On June 6, 2008, Appellee then filed a traditional motion for summary judgment arguing that no disputed fact issue existed and, in support of its motion, attached the affidavit of Edie M. Loughlin, the Director of Asset Management and Servicing for MMA Realty Capital. In her affidavit, Loughlin stated that MMA Realty Capital is “an affiliate of [Appellee]” and that she is the “custodian of records for MMA Realty Capital, Inc., and [Appellee].” Affixed to Loughlin's affidavit were copies of: (1) the construction loan agreement; (2) the construction mortgage note; (3) the guaranty agreement; (4) the letter agreement; (5) a June 1, 2007, letter issued by the law firm representing Appellee informing Appellants that they were in default of the letter agreement due to their failure to pay $232,422 in deferred interest on or before May 15, 2007, which is also accompanied by a March 8, 2007, letter from MMA Financial, Inc., to Rockwall Commons in which a billing statement was explained, and it was noted that in accordance with the letter agreement, a payment of $232, 422 would be billed, payable on or before May 15, 2007; (6) a letter dated January 30, 2008, from the law firm representing Capmark Finance, notifying Rockwall Commons of the acceleration of the maturity of its $26,000,000 note dated February 15, 2007; and (7) a letter dated June 5, 2008, from MMA Financial, Inc., notifying Rockwall Commons that its payoff amount as of that date was $762,975, which included a principal balance of $662,173 and $100,802 accrued interest.²

Appellants responded, raising twelve objections to the Loughlin affidavit and identifying four alleged material fact issues.³ In support of their response, Appellants attached Stone's affidavit in which he states he is the holder in physical possession of the mortgage note that was returned to him marked, “paid in full.” Affixed to Stone's affidavit is a copy of the mortgage note on which is typewritten “Paid in Full. Date: 02/15/2007.” The “paid-in-full” notation is accompanied by the signature of “Janice H. Wetzel, VP.”

On September 11, 2008, Appellee replied to Appellants' response. Four days later, the trial court issued a written order overruling each of Appellants' twelve objections as set forth in their response. On October 1, 2008, the trial court issued its order granting partial summary judgment in favor of Appellee, awarded $762,975 in actual damages based on the grounds raised in the motion, “along with applicable interest, court costs, and attorney's fees in amounts to be determined by subsequent order or judgment.” ⁴ Appellee non-suited the remaining request for attorneys' fees. The following day, the trial court entered its final judgment dismissing the request for attorneys' fees all remaining causes of action and relief not otherwise granted in its partial summary judgment order, ordered that Appellee receive $762,975 in actual damages along with 5 percent interest on the judgment amount, and granted Appellee all such writs and processes necessary to collect the judgment, assessing all costs to Appellants.

AFFIDAVIT

In Issue One, Appellants contend that the trial court erred in granting Appellee's motion for summary judgment and in Issue Two, they allege that the trial court erred and abused its discretion by overruling their objections to the sufficiency of Appellee's summary judgment evidence. However, because Appellants' entire discussion of Issue One is related to their objections to the summary-judgment evidence involving Loughlin's affidavit, we discuss Issues One and Two together. Tex.R. Civ. P. 166a(c).

Standard of Review

A plaintiff who sues for recovery on a promissory note does not have to prove all essential elements for a breach of contract but rather need only establish the note in question, that the defendant signed it, that the plaintiff was the legal owner and holder thereof, and that a certain balance is due and owing on the note. Truestar Petroleum Corp. v. Eagle Oil & Gas Co., 323 S.W.3d 316, 319 (Tex.App.-Dallas 2010, no pet. h.), citing Clark v. Dedina, 658 S.W.2d 293, 295 (Tex.App.-Houston [1st Dist.] 1983, writ dism'd).

We review a summary judgment de novo. Valence Operating Company v. Dorsett, 164 S.W.3d 656, 661 (Tex.2005); Texas Integrated Conveyor Systems, Inc. v. Innovative Conveyor Concepts, Inc., 300 S.W.3d 348, 365 (Tex.App.-Dallas 2009, pet. denied); Garner v. Fidelity Bank, N.A., 244 S.W.3d 855, 860 (Tex.App.-Dallas 2008, no pet.).⁵ To prevail on a summary judgment motion, the movant must demonstrate that there are no genuine issues of material fact and that it is entitled to judgment as a matter of law. Tex.R. Civ. P. 166a(c); Provident Life and Acc. Ins. Co. v. Knott, 128 S.W.3d 211, 215–16 (Tex.2003); Nixon v. Mr. Property Management Company, Inc., 690 S.W.2d 546, 548 (Tex.1985); Texas Integrated Conveyor Systems, Inc., 300 S.W.3d at 365; Garner, 244 S.W.3d at 860.

A movant for summary judgment must conclusively prove all elements of its cause of action as a matter of law. Tex.R. Civ. P. 166a(c); Kyle v. Countrywide Home Loans, Inc., 232 S.W.3d 355, 358 (Tex.App.-Dallas 2007, pet. denied); Nationwide Prop. & Cas. Ins. Co. v. McFarland, 887 S.W.2d 487, 490 (Tex.App.-Dallas 1994, writ denied). If ordinary minds could not differ as to the conclusion to be drawn from the evidence, a matter is conclusively proven. Kyle, 232 S.W.3d at 358, citing Triton Oil & Gas Corp. v. Marine Contractors & Supply, Inc., 644 S.W.2d 443, 446 (Tex.1982). If the movant conclusively proves its right to summary judgment as a matter of law, the burden then shifts to the non-movant to present evidence that raises a genuine issue of material fact, precluding the summary judgment. Kyle, 232 S.W.3d at 358.

When determining whether a disputed issue of material fact exists that would preclude summary judgment, we regard all evidence favorable to the non-movant as true, and we indulge every reasonable inference and resolve any doubts in favor of the non-movant. Walters v. Cleveland Regional Medical Center, 307 S.W.3d 292, 296 (Tex.2010); Provident, 128 S.W.3d at 215–16; McMahon Contracting, L.P. v. City of Carrollton, 277 S.W.3d 458, 467 (Tex.App...