Karen A. Clark v. Compass Bank, Successor-In-Interest to TexasBank ( 2008 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 2-07-050-CV
KAREN A. CLARK APPELLANT
V.
COMPASS BANK, SUCCESSOR-
IN-INTEREST TO TEXASBANK APPELLEE
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FROM THE 355TH DISTRICT COURT OF HOOD COUNTY
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MEMORANDUM OPINION 1
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Karen A. Clark, appellant, appeals from the trial court’s grant of summary
judgment in favor of appellee, Compass Bank, successor-in-interest to
TexasBank. Appellee sued appellant to collect on a promissory note executed
in appellant’s individual capacity as well as to collect on a business note that
appellant had guaranteed. In two issues, appellant complains that the trial
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… See T EX. R. A PP. P. 47.4.
court erred by granting the summary judgment against her without first granting
her the continuance she requested and because the judgment violates the “one
satisfaction rule” by allowing appellee a double recovery. In its brief, appellee
asserts an additional basis upon which to affirm the trial court’s judgment: an
unchallenged ground upon which the trial court might have awarded it summary
judgment. We affirm.
Factual Background
The record shows that appellant executed a promissory note on August
30, 2002, in the original principal amount of $382,500 (Mortgage Loan)
payable to TexasBank, appellee’s predecessor, secured by appellant’s residence
in Granbury. Appellant also signed a guaranty in favor of TexasBank to
guaranty another loan advanced to her professional association, Karen A. Clark,
M.D., P.A., in the amount of $175,000 (PA Loan) on or about November 13,
2002. The PA Loan was further secured by a security interest in certain
collateral such as furniture, fixtures, equipment, inventory, and accounts
receivable of her PA, as well as her personal guaranty.
Ultimately, appellant defaulted on both notes. The PA sold the PA
collateral and applied the proceeds from those sales to the balance on the PA
Loan. But after default and demands to cure, the PA also failed to pay the
accelerated balance due and owing on the PA Loan. Appellant also failed to
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honor her personal guaranty of the PA Loan, which had a balance due and
owing of $124,393.62 at the time appellee filed suit on the PA Loan and the
guaranty.
Appellant also defaulted on the Mortgage Loan. Appellee’s third amended
petition claims the balance on the mortgage was $375,507.71. Neither the
petition nor the summary judgment motion indicates whether the residence was
foreclosed upon. Appellant complained in her response to the motion for
summary judgment that appellee had failed to give her sufficient credit for
payments made and for collateral sold that should have been applied to the
outstanding balances due. Importantly, appellant specifically claims that her
Granbury residence was sold and that approximately $300,000 in proceeds
should have been applied to the Mortgage Loan balance.
Appellee filed a motion for summary judgment, and appellant filed a
response primarily complaining about the balances appellee was claiming on
both notes and seeking a continuance on the hearing. Appellee responded
below and here that appellant had the duty and obligation to come forward with
proper summary judgment proof that would substantiate her claims of offsets,
payments, or credits sufficient to defeat summary judgment. Furthermore,
appellee specifically denied holding a foreclosure and sale of the residence. The
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trial court denied appellant’s continuance and granted appellee’s motion for
summary judgment.
Issues on Appeal
Appellant complains that the trial court erred by denying her motion for
continuance of the summary judgment hearing. She also complains of trial
court error in failing to give her credit on the Mortgage Loan after the sale of
the residence, thereby violating the “one satisfaction rule.”
Continuance
Generally, a trial court’s action in granting or denying a motion for
continuance will not be disturbed on appeal unless the record discloses an
abuse of discretion. See Gen. Motors Corp. v. Gayle, 951 S.W.2d 469, 476
(Tex. 1997) (orig. proceeding); Sw. Country Enters. v. Lucky Lady Oil Co., 991
S.W.2d 490, 493 (Tex. App.—Fort Worth 1999, pet. denied). In the summary
judgment context, a court may order a continuance if the party opposing the
motion cannot “for reasons stated present by affidavit facts essential to justify
his opposition.” Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 161
(Tex. 2004) (citing T EX. R. C IV. P. 166a(g)). And when reviewing a trial court’s
order denying a motion for continuance, we must look for a clear abuse of
discretion on a case-by-case basis. Id. “When a party contends that it has not
had an adequate opportunity for discovery before a summary judgment hearing,
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it must file either an affidavit explaining the need for further discovery or a
verified motion for continuance.” Tenneco, Inc. v. Enter. Prods. Co., 925
S.W.2d 640, 647 (Tex. 1996) (citing T EX. R. C IV. P. 166a(g), 251, 252). Rule
251 requires the party moving for a continuance to include an affidavit showing
sufficient cause for the continuance with its affidavit. T EX. R. C IV. P. 251; see
also Tri-Steel Structures, Inc. v. Baptist Found. of Tex., 166 S.W.3d 443, 448
(Tex. App.—Fort Worth 2005, pet. denied). When a movant fails to include an
affidavit in support of its motion, the appellate court presumes the trial court
did not abuse its discretion in denying the continuance. See Villegas v. Carter,
711 S.W.2d 624, 626 (Tex. 1986); see also Rent Am., Inc. v. Amarillo Nat'l
Bank, 785 S.W.2d 190, 193 (Tex. App.—Amarillo 1990, writ denied) (holding
failure to comply with rule 251 results in presumption that trial court did not
abuse its discretion). A denial will be reversed only if the trial court acted
without regard to guiding principles or was arbitrary or unreasonable. BMC
Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 800 (Tex. 2002); Tri-Steel
Structures, 166 S.W.3d at 447.
Additionally, if the basis for the requested continuance is “want of
testimony,” the affidavit must show (1) that the testimony is material, (2) that
due diligence has been used to obtain the testimony, (3) that there is an
explanation given for the failure to obtain the testimony, and (4) that the
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testimony cannot be procured from another source. T EX. R. C IV. P. 252;
Tri-Steel Structures,166 S.W.3d at 448. Furthermore, the failure of a litigant
to diligently use the rules of civil procedure for discovery purposes will not
authorize the granting of a continuance. See State v. Wood Oil Distrib., Inc.,
751 S.W.2d 863, 865 (Tex. 1988). A court will not be required to grant a
continuance when the allegations in the motion, examined in light of the record,
show a complete lack of diligence. See id. (citing Fritsch v. J.M. English Truck
Line, Inc., 151 Tex. 168, 246 S.W.2d 856, 858–59 (1952)).
Here, the record shows that appellee filed its original petition and request
for disclosure on August 18, 2005, claiming appellant owed appellee
$134,225.12 on the PA Loan and $86,233.71 on the Mortgage Loan. Appellee
filed its motion for final summary judgment on September 27, 2006, and its
third amended petition that same day. These pleadings, for the first time,
claimed appellant owed appellee $124,393.62 on the PA loan and
$375,507.71 on the Mortgage Loan. Appellee did not supplement its answers
to appellant’s requests for disclosure to reflect these amounts until October 25,
2006. Appellant’s motion for continuance of the summary judgment hearing
was filed that same day, along with her Response to Motion for Summary
Judgment, on October 25, 2006, five days before the summary judgment
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hearing was scheduled.2 The motion sought additional time to allow for
discovery, specifically complaining about the lack of information supporting the
new amounts owed or the amounts subject to any offsets. Appellant also
claimed that she had been unable to obtain some of her records from her prior
attorney and that the discovery period for the case had not yet expired.
However, her motion for continuance was not sworn or supported by affidavit,
did not comport with rule 166a(g) or comply with the rule 252 factors justifying
a continuance on the basis of want of testimony. T EX. R. C IV. P. 166a(g), 252.
The trial court denied her motion, held the hearing, and entered final judgment
in appellee’s behalf on October 30, 2006.
At the time of the summary judgment hearing, the only other discovery
appellant had sought was a request for production that appellee had answered
(and objected to portions of) on March 14, 2006, seven months prior to her
motion for continuance. Appellant had never requested a hearing on appellee’s
objections and had not served any further discovery on appellee in the interim.
The case had been on file for over thirteen months, and while the amounts
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… Texas rules require the respondent to file “opposing affidavits or other
written response(s)” not later than seven days before the hearing, unless leave
of court has been granted. We note that neither appellant’s response nor her
motion for continuance complies with this part of rule 166a, either. See T EX.
R. C IV. P. 166a(c).
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claimed by appellee drastically changed at the time appellee filed its motion for
summary judgment, appellant sought no further discovery during those thirty-
five days. Furthermore, the only discovery appellant pursued during the
previous thirteen months was a request for disclosure, despite the fact she had
already complained that the balances due were inaccurate.
Because appellant’s motion for continuance contains no supporting
affidavit, we presume the trial court did not abuse its discretion by denying the
continuance. See Villegas, 711 S.W.2d at 626. Moreover, appellant failed to
show that she exercised due diligence in seeking discovery, an additional
requirement for a continuance sought on these grounds. See Tri-Steel
Structures, 166 S.W.3d at 448. Therefore, we cannot say the trial court
abused its discretion by denying appellant’s motion for continuance. We
overrule appellant’s first issue.
One Satisfaction Rule
In appellant’s second issue, she contends that appellee sold the residence
that secured the Mortgage Loan for approximately $300,000 and that the
judgment on that loan should have been reduced by that amount. Appellant
contends that the balance on the Mortgage Loan could not have been the
$375,507.71 awarded by the trial court and by doing so the court violated the
“one satisfaction rule.”
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A plaintiff is entitled to summary judgment on a cause of action if it
conclusively proves all essential elements of the claim. See T EX. R. C IV. P.
166a(a), (c); MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex. 1986). When
reviewing a summary judgment, we take as true all evidence favorable to the
nonmovant, and we indulge every reasonable inference and resolve any doubts
in the nonmovant’s favor. IHS Cedars Treatment Ctr. of DeSoto, Tex., Inc. v.
Mason, 143 S.W.3d 794, 798 (Tex. 2004). If the uncontroverted evidence is
from an interested witness, it does nothing more than raise a fact issue unless
it is clear, positive and direct, otherwise credible and free from contradictions
and inconsistencies, and could have been readily controverted. T EX. R. C IV. P.
166a(c); Trico Techs. Corp. v. Montiel, 949 S.W.2d 308, 310 (Tex. 1997).
Appellant cites our opinion in Foley v. Parlier to support her position that
the appellee’s judgment constitutes a double recovery. 68 S.W.3d 870, 882-
83 (Tex. App.—Fort Worth 2002, no pet.). There, we held that a party is
entitled to but one satisfaction for the injuries or damages sustained. Id. at
882-83. The rule requires a successful litigant to choose between remedies so
that he does not receive more than one recovery for the same injury. W.
Reserve Life Assur. Co. of Ohio v. Graben, 233 S.W.3d. 360, 377 (Tex.
App.—Fort Worth 2007, no pet.). We agree with appellee that the one
satisfaction rule does not even apply under these circumstances. The rule really
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only prevents a party from recovering under two or more causes of action or
theories of liability for the same injury. See Tony Gullo Motors I, L.P. v. Chapa,
212 S.W.3d 299, 313 (Tex. 2006).
The original mortgage for appellant’s residence was $382,500. Appellant
contends that she made payments for two years, that she voluntarily
surrendered the home to appellee, and that appellee then sold the residence for
$300,000. She contends that the amount awarded appellee, based upon its
summary judgment evidence, does not give her credit for these payments or for
the proceeds from the sale of the residence. She says the appellee received a
double recovery.
Here, appellee is the injured party trying to recover the unpaid balances
on two promissory notes, one of which was secured by a deed of trust on
appellant’s residence. Appellant contends that appellee got the money
judgment on the two notes and title to her residence. In reality, appellant
actually is complaining of insufficient credits to the Mortgage Loan that would
have potentially resulted in a smaller remaining balance, which she asserted in
her pleadings as a failure to credit payments. Furthermore, as to her complaint
that appellee failed to giver her credit on the Mortgage Loan for the residence
she allegedly gave back to appellee, appellant brought forth no summary
judgment evidence to show the payments she made, information that would
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have been available to appellant through her own records. This is not a double
recovery under two theories of liability; all liability asserted against appellant
was based upon the notes and the breach of the payment terms thereof.
Likewise, appellant brought forth no evidence of a foreclosure or sale by
appellee, only a conclusory statement that she thought the residence had been
sold by appellee for about $300,000. If appellant had entered into a settlement
with appellee or deeded the residence to appellee, documentation of the
transaction would have been either in her possession or obtainable through
deed records, but again, there is no proof in this record. There simply is no
evidence in this summary judgment record that appellee had foreclosed on its
lien securing the Mortgage Loan at the time of the summary judgment hearing.
In appellee’s reply to appellant’s response to the motion for summary
judgment, appellee states it “did not conduct a non-judicial foreclosure sale of
its security interest in the real property that secured the payment of the
promissory note.” 3 Regardless, appellant failed to sufficiently raise a fact issue
regarding any foreclosure, sale, or the accuracy of the balance claimed by
appellee on the Mortgage Loan. See T EX. R. C IV. P. 166a(c); Montiel, 949
3
… Later, in appellee’s brief it concedes it foreclosed on the residence, but
under a different note and lien, which would not have affected the balance on
the Mortgage Loan.
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S.W.2d at 310. We cannot say the one satisfaction rule applies on this record.
We overrule appellant’s second issue.
Malooly Point
In appellee’s brief, it also asserts a Malooly response claiming that
appellant failed to challenge all bases for the summary judgment, thus requiring
affirmance of the trial court’s grant of summary judgment in favor of appellee.
In Malooly Brothers, the Texas Supreme Court held that appellate courts must
affirm a summary judgment if there is an unchallenged point on appeal not
otherwise covered by a Malooly point. Malooly Bros., Inc. v. Napier, 461
S.W.2d 119, 121 (Tex. 1970). However, when a party asserts a broad point
challenging the summary judgment in its entirety, that is sufficient to allow
argument as to all possible grounds of error. Id. Appellee correctly points out
that appellant has not asserted a general Malooly pont. At trial, appellant quite
forthrightly never contested the execution or existence of either of the two
notes involved in this suit or their breach. At trial, appellant only contested
who the legal owner and holder of these notes were and the correctness of the
balances due; on appeal, the challenge was virtually limited to the propriety of
the balances due through both of appellant’s issues. However, because
appellant failed to also include a general Malooly point which would have
included at least an attack on the factual basis of the grant of summary
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judgment in general, we must affirm the judgment below. See id.; see also
Fluid Concepts, Inc. v. DA Apartments Ltd. P’ship, 159 S.W.3d 226, 231 (Tex.
App.—Dallas 2005, no pet.). Because appellant has not raised a fact issue in
regard to some element of appellee’s cause of action, we affirm the judgment
of the trial court.
Conclusion
Because we have overruled all of appellant’s issues, we affirm the trial
court’s judgment.
TERRIE LIVINGSTON
JUSTICE
PANEL A: CAYCE, C.J.; LIVINGSTON AND MCCOY, JJ.
DELIVERED: May 22, 2008
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