Sanger Bank v. David Frankens and Kathryn Frankens

ACCEPTED
12-15-00256-CV
TWELFTH COURT OF APPEALS
TYLER, TEXAS
11/30/2015 1:55:50 PM
Pam Estes
CLERK
CAUSE NO. 12-15-00256-CV
FILED IN
12th COURT OF APPEALS
IN THE COURT OF APPEALS FOR THE TYLER, TEXAS
12TH DISTRICT OF TEXAS 11/30/2015 1:55:50 PM
TYLER, TEXAS PAM ESTES
Clerk
SANGER BANK,
Appellant,
v.
DAVID CHRISTOPHER FRANKENS
AND KATHRYN FRANKENS,
Appellees.
Appealed from County 217th District Court
Angelina County, Texas
The Honorable Robert K. Inselmann, Presiding
APPELLANT’S BRIEF
ORAL ARGUMENT REQUESTED
Ryan Thomas Webster and
Texas Bar No. 24066272 Robert Alderman
ryan@wtwlawfirm.com Texas Bar No. 00979900
R. William Wood balderman@aldermancainlaw.com
Texas Bar No. 21906000 Robert Cain
bill@wtwlawfirm.com Texas Bar No. 03907200
WOOD, THACKER & WEATHERLY, P.C. rcain@aldermancainlaw.com
400 West Oak Street, Suite 310 Alderman Cain & Neill, PLLC
Denton, Texas 76201 P.O. Box 153237
Tel. (940) 565-6565 Lufkin, TX 75915-3237
Fax: (940) 566-6673 Tel. (936) 633-4209
Attorneys for Appellants Fax: (936) 632-3316
Attorneys for Appellant
IDENTITY OF PARTIES AND COUNSEL
Appellant: Sanger Bank
Counsel for Appellant: Ryan Thomas Webster
Texas Bar No. 24066272
Email: ryan@wtwlawfirm.com
R. William Wood
Texas Bar No. 21906000
Email: bill@wtwlawfirm.com
WOOD, THACKER & WEATHERLY, P.C.
400 West Oak Street, Suite 310
Denton, Texas 76201
Tel. (940) 565-6565
Fax: (940) 566-6673
and
Robert Alderman
Texas Bar No. 00979900
balderman@aldermancainlaw.com
Robert Cain
Texas Bar No. 03907200
rcain@aldermancainlaw.com
Alderman Cain & Neill, PLLC
P.O. Box 153237
Lufkin, TX 75915-3237
Tel. (936) 633-4209
Fax: (936) 632-3316
Appellees: David Christopher Frankens
Kathryn Frankens
Counsel For Appellees: Krystal E. Rylie
Texas Bar No. 24065977
Email: kriley@skeltonslusher.com
SKELTON SLUSHER BARNHILL
WATKINS WELLS, PLLC
1616 South Chestnut
Lufkin, TX 75901
Tel. (936) 6532-2300
Fax: (936) 632-6545
APPELLANT’S BRIEF i
TABLE OF CONTENTS
Identity of Parties and Counsel .................................................................... i
Table of Contents ........................................................................................ ii
Index of Authorities ................................................................................... iv
Statement of the Case .................................................................................. 1
Issues Presented .......................................................................................... 1
Statement of Facts ....................................................................................... 2
Summary of the Argument .......................................................................... 6
Argument .................................................................................................... 8
A. The trial court abused its discretion by granting Plaintiffs’
temporary injunction because Plaintiffs failed to prove
that they have a probable right to the relief sought .................. 8
1. The Frankens did not prove that they have a
probable right to the relief sought under any
of their claims against Sanger Bank.................................... 9
2. The Frankens did not establish a probable right
to relief on their breach of contract claim against
Sanger Bank ....................................................................... 10
3. The Frankens’ negligent misrepresentation claim
fails under the economic loss rule and they did not
establish a probable right to relief ................................... 13
4. Because the Frankens’ loan is not a good or service,
they are not “consumers” with standing to pursue
a claim against the Defendants under the Texas
Deceptive Trade Practices Act. Additionally, they
failed to show that Sanger Bank’s omission was the
producing cause of their alleged injuries ......................... 17
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APPELLANT’S BRIEF ii
5. The Frankens did not establish a probable right
to relief for civil conspiracy .............................................. 18
B. The Order Granting Temporary Injunction should
be dissolved and the order declared void because
it does not contain a valid trial setting ................................. 18
Prayer ........................................................................................................ 20
Certificate of Service.................................................................................. 21
Certificate of Compliance .......................................................................... 22
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APPELLANT’S BRIEF iii
Cases:
1. Brown v. Bank of Galveston Nat. Ass’n
930 S.W.2d 140
(Tex. App. Houston [14th Dist.] 1996
Aff’d. 963 S.W.2d 511 (Tex. 1998) .......................................... 17
2. Butnaru v. Ford Motor Company
84 S.W.3d 198 (Tex. 2001) ....................................................... 8
3. City of Amarillo v. Premium Standard Farms, Inc.
No. 07-06-0467-CV, 2007 WL2163399, at *1
(Tex. App.—Amarillo, 2007)............................................... 9, 10
4. Cook v. Tom Brown Ministries
385 S.W.3d 592
(Tex. App.—El Paso 2012, pet. denied) .................................... 8
5. Doe v. Boys Clubs of Greater Dallas, Inc.
907 S.W.2d 472 (Tex. 1995).................................................... 17
6. Emex Holdings, LLC v. Naim
No. 13-09-591-CV, 2010 WL 2163139 at *2
Tex. App. – Corpus Christi 2010, no pet.) ........................ 19, 20
7. EOG Res. Inc. v. Gutierrez
75 S.W.3d 50
(Tex. App.—San Antonio 2002, no pet.)................................. 19
8. Excel Corp. v. Apodaca
81 S.W.3d 817 (Tex. 2002) ..................................................... 16
9. Grant Thornton, LLP v. Prospect High Income Fund
314 S.W.3d 913 (Tex. 2010) .................................................... 15
10. InterFirst Bank San Felipe, N.A. v. Paz Const. Co.
715 S.W.2d 640 (Tex. 1986) .................................................... 19
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APPELLANT’S BRIEF iv
11. Maddox v. Vantage Energy, LLC
361 S.W.3d 752
(Tex. App.—Fort Worth 2012, pet. denied) ............................ 15
12. Massey v. Armco Steel Co.
652 S.W.2d 932 (Tex. 1983) ................................................... 18
13. Mead v. Johnson Grp., Inc.
615 S.W.2d 685 (Tex. 1981) ..................................................... 11
14. Missouri Pac. R. Co. v. Am. Statesman
552 S.W.2d 99 (Tex. 1977) ...................................................... 16
15. Riverside Nat. Bank v. Lewis
603 S.W.2d 169 (Tex. 1980) ................................................... 17
16. Sterling Chemicals, Inc. vs. Texaco, Inc.
259 S.W.3d 793 (Tex. App. Houston [1st Dist.] 2007) ............ 13
17. Velvet Snout, LLC v. Sharp
441 S.W.3d 448 (Tex. App.—El Paso 2014, no pet.) ............... 10
18. Walker v. Packer
827 S.W.2d 833 (Tex. 1992) ..................................................... 8
19. Willis v. Marshall
401 S.W.3d 689 (Tex. App.—El Paso 2013, no. pet) ............... 14
Rules
Texas Rule of Civil Procedure 683 ...................................................... 19, 20
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APPELLANT’S BRIEF v
STATEMENT OF THE CASE
David Frankens and Kathryn Frankens sued Sanger Bank for breach of
contract, negligent misrepresentation, DTPA violations, civil conspiracy, and
wrongful foreclosure. (C.R. at 27-39 & 107). The Frankens seek monetary
relief and to enjoin Sanger Bank from foreclosing on the subject property.
(Id.) The Honorable Robert K. Inselmann, Jr. granted an ex parte temporary
restraining order. (C.R. at 36 & 40) On October 5, 2015, he granted the
Frankens’ application for temporary injunction. (C.R. at 107) The Order
Granting Temporary Injunction is the subject of this accelerated appeal. This
case is still pending in the trial court.
Issues Presented
I. To obtain a temporary injunction the applicant must plead and prove
that it has a probable right to the relief requested. Did the trial court
abuse its discretion by granting Plaintiffs’ application for temporary
injunction when Plaintiffs failed to show a probable right to relief
against the enjoined party?
II. Every order granting a temporary injunction must include a final
trial setting; otherwise, it is subject to being declared void and
dissolved. If the stated trial setting is delayed, the order must be
renewed. In this case, the Order Granting Temporary Injunction set
the final trial for October 15, 2015. The case was not tried, and the
order was not renewed. Should that order be declared void and
dissolved?
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APPELLANT’S BRIEF 1
STATEMENT OF FACTS
On August 15, 2015, the Appellees, David and Kathryn Frankens (the
Frankens), obtained an ex parte temporary restraining order to enjoin the
September 1, 2015 foreclosure sale of the subject property. (C.R. at 36 & 40)
On October 5, 2015, the trial court granted the Frankens’ application for
temporary injunction and further enjoined the foreclosure sale. (C.R. at 107).
That order is the subject of this appeal.
This lawsuit arose from a $252,000 residential home loan that Sanger
Bank made to the Frankens on December 19, 2014. (C.R. at 16; R.R. at 75, l. 17
- 19) The loan proceeds were for the purchase of land and construction of a
house. (R.R. at 33 & 38) The land and house are security for the loan. Sanger
Bank released $60,000 of the loan proceeds directly to the title company to
pay for the land. (R.R. at 79, l. 15 -11) Sanger Bank disbursed $58,876.53 of
the construction loan proceeds incrementally upon completion of certain
phases of the house pursuant to an agreed-upon draw formula. (R.R. at 83, l.
11 – 16; at P-2 & D-1) Sanger Bank has disbursed only $118,876.53 of the
$252,000 made available to the Frankens. (R.R. at 83, l. 11 – 16)
Mrs. Frankens signed the requisite loan documents and other related
documents as Mr. Frankens’ attorney-in-fact. (R.R. at 22 & 24; at P-1) One of
those documents was a Lender’s Disbursement Statement Authorization
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APPELLANT’S BRIEF 2
(Authorization). (R.R. at P-2) The Authorization allowed the borrower to
select how Sanger Bank would make distributions (e.g. deposit the funds in
the borrower’s account or disburse the funds to the contractor). Mrs.
Frankens checked a box that instructed Sanger Bank to deposit all
construction disbursements into a Construction Loan Account maintained by
Mr. Frankens at Sanger Bank. (R.R.at P-2) The relevant language in the
Authorization reads as follows:
I/We, the above referenced Borrowers, hereby direct Lender
[Sanger Bank] to disburse construction advances on the above
referenced loan as follows:
1) All disbursements are to be made by deposit from Lender into
an account maintained at Lender’s office created by Borrower for
the disbursement of construction advances with signing privileges
according to the account agreement. Use of the Construction Loan
Account is restricted to the above-referenced transaction and as
set out in the Construction Loan Agreement and shall not be used
for any other purpose.
…
If Lender disburses pursuant to option 1or 2 above, Lender shall
obtain from Contractor the signed periodic statement (draw
request) that covers the funds for which the Contractor is
requesting payment and provide to the Borrower a statement of
funds disbursed (disbursement statement) by the Lender since
the last statement was provided to the Borrower. The
disbursement statement and copy of the draw request will be
provided to the Borrower on the same day that Lender disburses
to Contractor. Lender will provide said disbursement statement
and draw request to Borrower. Lender, at Lender’s option, may
provide the disbursement statement to Borrower by either 1) hand
delivery to Borrower before disbursement, 2) depositing the
disbursement statement in the United States mail, postage
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APPELLANT’S BRIEF 3
prepaid on the same day of disbursement, or 3) faxed or emailed
to Borrower. Borrower agrees that any of these delivery methods
are acceptable to Borrower and will constitute constructive notice
at the time Lender places said documents in the mail….
Lender may, at Lender’s election, at any time choose to pay
subcontractors, contractors and/or materialmen directly in lieu of
the method selected above.…
(R.R. at P-2)
Instead of opening a Construction Loan Account, Mr. Frankens orally
instructed Sanger Bank to deposit the disbursements into Benrich Investment
Group, LLC’s (Benrich) bank account. (C.R. at 113; R.R. at 75, l.1-14)
On or about December 19, 2014, the Frankens hired contractor Benson
Construction to build their house. (R.R. at P-1) Mr. Frankens is the son of
Bradina Benson, an owner of Benson Construction, Benrich, and the other
entity defendants in this lawsuit (excluding Sanger Bank). (R.R. 21, l.1-10)
Between January 2014 and early April 2015, Sanger Bank made eight
construction loan disbursements into Benrich’s account. (C.R. at 113; R.R.at
75, l. 1-14 at 91, l. 5 – 10; at D-1)
In April 2015, the Frankens and Benson Construction had a falling out.
(R.R.at 44, l. 6-9) Before the house was completed, Mr. Frankens fired
Benson Construction and told the Bensons not to come back to the subject
property. (R.R. at 51, l. 24- 52, l. 5) Benson Construction had poured the
foundation and built at least seventy percent of the frame. (R.R. at 61, l. 3-8)
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APPELLANT’S BRIEF 4
The Frankens have not hired a new contractor to take over construction and
failed to protect the partially constructed house from the elements. (R.R. at
46-48) They now contend that the house will need to be rebuilt due to the
resulting damage. (R.R. at 54, l. 25 – 56, l. 4) Sanger Bank became concerned
about its collateral and elected to exercise its right to foreclose on the subject
property. (R.R. at 83, l. 24 - 84, l. 2) The Frankens then filed this lawsuit.
(C.R. at 14, 31 &35)
At the time of the injunction hearing, the Frankens’ claims in the
lawsuit against Sanger Bank included breach of contract, negligent
misrepresentation, DTPA violations, civil conspiracy, and wrongful
foreclosure of the subject property (this claim was not repleaded in the live
petition). (C.R. at 27-39 & 107)
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APPELLANT’S BRIEF 5
SUMMARY OF THE ARGUMENT
The Frankens failed to prove that they have a probable right to relief on
any of their claims against Sanger Bank (breach of contract, negligent
misrepresentation, DTPA violations, and conspiracy). The trial court,
therefore, abused its discretion by grating the Frankens’ temporary
injunction.
With regard to each of their claims, the Frankens failed to prove that
Sanger Bank’s act or omission caused their alleged damages. The evidence
also shows that the Frankens did not perform their obligations under the
applicable contract. Their negligent misrepresentation claim fails under the
economic loss rule and because a promise to perform some future act (send
disbursement notices) is not actionable as negligent misrepresentation. The
Frankens also failed to prove that Sanger Bank made a false statement or
failed to exercise reasonable care. The Frankens could not have justifiably
relied on Sanger Bank to send notices because the Frankens had not
performed the condition precedent that triggers Sanger Bank’s obligation.
The Frankens offered no evidence of their status as “consumers” with
standing to pursue DTPA claims. And, other than proving the existence of
more than one defendant, they provided no evidence of a conspiracy.
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APPELLANT’S BRIEF 6
Additionally, the order granting temporary injunction does not contain
a valid trial setting and, therefore, should be declared void. An order granting
temporary injunction must contain a trial setting. If the trial is delayed, the
order must be renewed. An order that does not comply with this rule is
subject to being declared void. The Order Granting Temporary Injunction
contains a trial setting on October 15, 2015. That date passed without a trial
and the order, the order was not renewed, and should, therefore, be declared
void.
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APPELLANT’S BRIEF 7
ARGUMENT
A. The trial court abused its discretion by granting Plaintiff’s
temporary injunction because Plaintiffs failed to prove that
they have a probable right to the relief sought.
A temporary injunction is an extraordinary remedy and does not issue
as a matter of right. Walker v. Packer, 827 S.W.2d 833, 840 (Tex.1992).
Whether to grant or deny a temporary injunction is within the trial court’s
sound discretion. Id. A trial court has no discretion in determining what the
law is or in applying the law to the facts. Id. A trial court abuses its discretion
by granting injunctive relief when the facts do not definitively indicate that
the enjoined party is in violation of the law. See Cook v. Tom Brown
Ministries, 385 S.W.3d 592, 600 (Tex. App. – El Paso 2012, pet. denied).
Consequently, a court abuses its discretion if there is a clear failure to analyze
or apply the law correctly. Id.
To obtain a temporary injunction, the applicant must plead and prove
three specific elements: (1) a cause of action against the defendant; (2) a
probable right to the relief sought; and (3) a probable, imminent, and
irreparable injury in the interim. Butnaru v. Ford Motor Company, 84
S.W.3d 198, 204 (Tex. 2001).
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APPELLANT’S BRIEF 8
1. The Frankens did not prove that they have a probable right to
the relief sought under any of their claims against Sanger
Bank.
With regard to Sanger Bank, the only wrongdoing the Frankens have
alleged is that it did not provide the Frankens notice of the distributions in
accordance with the Authorization. (R.R.at 32, l.15-34, l. 11) This alleged
wrongdoing is the basis for each of the claims against Sanger Bank. The
Frankens pleaded that $19,000 in fraudulent draws were requested and paid.
(C.R. at 31) They also put on evidence about how the rain and their failure to
hire a contractor to replace Benson Construction damaged the partially
constructed home. (R.R. at 46-48) They did not, however, provide evidence
that Sanger Bank caused these damages.
Establishing a probable right of recovery mandates the presentation of
some evidence satisfying the elements of the cause of action. For instance,
because our common law recognizes a cause of action for breach of contract,
that does not ipso facto mean that anyone who merely asserts that his
opponent breached the agreement is entitled to relief, preliminary or
otherwise. City of Amarillo v. Premium Standard Farms, Inc., No. 07-06-
0467-CV, 2007 WL 2163399, at *1 (Tex. App. – Amarillo, 2007). Some
evidence of each element of a claim must be presented to the trial court before
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APPELLANT’S BRIEF 9
it can legitimately say that there indeed exists any probability that the
complainant may recover upon the allegation. Id.
2. The Frankens did not establish a probable right to relief on
their breach of contract claim against Sanger Bank.
The elements of a breach of contract claim are: (1) the existence of a
valid contract; (2) performance by the plaintiff; (3) breach of the contract by
the defendant; and (4) damages to the plaintiff resulting from that breach.
Velvet Snout, LLC v. Sharp, 441 S.W.3d 448, 451 (Tex. App. – El Paso 2014,
no pet.).
The Frankens made the court aware of only two contracts at the
temporary injunction hearing – the Residential Construction Contract and
the Authorization. (R.R. at 30, l. 20 - 32, l. 13; at P-1; at P-2)
Sanger Bank is not a party to the Residential Construction Contract.
(R.R. at P-1). That contract is between Benson Construction and the
Frankens. (Id.) Plaintiffs pleaded that Benson Construction assigned Sanger
Bank its rights to any lien created by the Residential Construction Contract.
(C.R. at 111-12) That assignment, however, did not purport to impose any
obligations on Sanger Bank. (R.R. at P-1, 6) Additionally, the contract
language does not impose any obligations on Sanger Bank. (R.R. at P-1)
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APPELLANT’S BRIEF 10
Sanger Bank could not have breached the Residential Construction Contract
because it is not a party and has no obligations under that agreement.
Next, the Frankens complain that Sanger Bank breached the
Authorization by failing to send Mr. Frankens disbursement statements on
the same day it made disbursements to Benson Construction. (R.R. at 32, l.15
- 34, l. 11)
The undisputed evidence shows that the Frankens first failed to perform
their obligation under the Authorization by failing to open a Construction
Loan Account with Sanger Bank. (R.R. at 74, l. 22 – 25; at P-1). Opening that
account was a prerequisite to Sanger Bank becoming obligated to send notice
pursuant to the Authorization. (R.R. at P-1) As a result, the Authorization did
not impose any obligations on Sanger Bank. (R.R. at P-1) The Frankens,
therefore, failed to establish a probable right to relief for breach of the
Authorization.
The Frankens also failed to show that Sanger Bank caused any damages
by allegedly breaching the Authorization. To recover damages in a breach of
contract action, the Frankens must show that the damages sought were the
natural, probable, and foreseeable consequence of Sanger Bank's conduct.
Mead v. Johnson Grp., Inc., 615 S.W.2d 685, 687–88 (Tex.1981). The
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APPELLANT’S BRIEF 11
Frankens failed to show that their alleged damages resulted from Sanger
Bank’s failure to comply with obligations contained in the Authorization.
The Frankens contend that had Sanger Bank sent them detailed draw
request, they would have been able to stay on budget and know where the
loan money went. (R.R. at 43, l. 15 – 21) Regarding the Frankens’ knowledge
of the costs and distributions from Sanger Bank, the evidence shows that the
Frankens knew about the disbursements made, the costs of construction, and
that they did not complain to Sanger Bank about the disbursement amounts.
(R.R., 86, l. 11-22) Sanger Bank sent Mr. Frankens monthly statements for
payment of the interest owed on the loan disbursements. (R.R. at 84, l. 11 -
16) These statements showed the amount of draws made and the interest
accrued on those draws. (R.R. at 85, l. 19 – 86, l. 5; at D-2) The Frankens
received these statements, as evidenced by the fact that they made the
requested payment each month. (R.R. at 85, l. 18 - 22). Additionally, Mr.
Frankens actively participated in building the house. (R.R. at 29) The
Frankens also negotiated checks written on Benrich’s bank account to pay for
labor and materials used in building the house. (R.R. at 39, l.13 - 40 l. 21; at
86, l. 6 - 15) The Bensons gave the Frankens blank, signed checks. The
Frankens would then fill out those checks and give them to the appropriate
vendor or subcontractor. (R.R. at 102, l. 6 - 12) Throughout the relevant time
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APPELLANT’S BRIEF 12
period (December – April), the Frankens were provided with the distribution
amounts and had knowledge of the basis for those distributions because they
actually delivered payment for much of the work and materials that lead to
those distributions. (C.R. at 81, l. 18 – 22; R.R. at 39, l.13 - 40 l. 21; at 86, l. 6 -
15)
The Frankens did not offer any evidence that they performed their
contractual obligations, that Sanger Bank breached its contractual
obligations, or that Sanger Bank caused their alleged damages. Accordingly,
because the Frankens failed to show a probable right of recovery, the trial
court abused its discretion by grating the temporary injunction based on this
claim.
3. The Frankens’ negligent misrepresentation claim fails under
the economic loss rule and they did not establish a probable
right to relief.
Under the economic loss rule, the Frankens may not bring a claim for
negligent misrepresentation because they have not suffered an injury that is
distinct, separate, and independent from the economic losses they seek to
recover under their breach of contract claim. Sterling Chemicals, Inc. v.
Texaco Inc., 259 S.W.3d 793, 797 (Tex. App. Houston [1st] 2007).
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APPELLANT’S BRIEF 13
The elements of a negligent misrepresentation cause of action are:
(1) defendant's representation to a plaintiff in the course of defendant's
business or in a transaction in which the defendant had an interest;
(2) defendant's providing false information for the guidance of others;
(3) defendant's failure to exercise reasonable care or competence in obtaining
or communicating information; (4) plaintiff's justifiable reliance on
defendant's representation; and (5) defendant's negligent misrepresentation
proximately causing the plaintiff's injury. Willis v. Marshall, 401 S.W.3d 689,
698 (Tex. App.-El Paso 2013, no pet.).
The representation by Sanger Bank that the Frankens complain about is
contained in the Authorization. (R.R. at 32, l. 15 – 33, l. 5) It states that
Sanger Bank will send notice of disbursements on the same day they are
made. However, such notice is only required if the Frankens had opened a
Construction Loan Account. (R.R. at P-2)
The Frankens did not establish that the representation in the
Authorization was false or made without exercising reasonable care. Sanger
Bank’s obligation to send notice was conditioned upon Mr. Frankens first
opening an account, which he did not do. (R.R. at 74, l. 22-25; at P-2)
Whether the representation was false and made with reasonable care cannot
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APPELLANT’S BRIEF 14
be determined because Sanger Bank’s obligation to send notice per the
Authorization never arose.
Additionally, a promise to do or to refrain from doing an act in the
future is not actionable as a negligent misrepresentation because it does not
concern an existing fact. Maddox v. Vantage Energy, LLC, 361 S.W.3d 752,
760-61 (Tex. App. – Fort Worth 2012, pet. denied.). The alleged
misrepresentation is not actionable because it is a promise to do an act/send
notices in the future.
The Frankens could not have justifiably relied on the Authorization.
Justifiable reliance requires reasonable reliance by the Frankens. Grant
Thornton LLP v. Prospect High Income Fund, 314 S.W.3d 913, 923 (Tex.
2010). Reliance on the Authorization in this case is not reasonable. The
Frankens knowingly did not perform their obligation to open an account - a
prerequisite to Sanger Bank’s performance. (R.R. at 74, l 22-25; at P-2)
Instead, Mr. Frankens instructed Sanger Bank to deposit the disbursements
into Benrich’s account. (C.R. at 113; R.R. at 75, l. 1-14) The Frankens could not
reasonably rely on Sanger Bank to comply with the Authorization when the
Frankens knowingly failed to perform the conditions precedent.
Finally, the representations complained of were not the proximate
cause of the alleged injuries. Proximate cause consists of two elements:
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APPELLANT’S BRIEF 15
(1) cause in fact, and (2) foreseeability. Missouri Pac. R. Co. v. Am.
Statesman, 552 S.W.2d 99, 103 (Tex. 1977). Cause in fact requires that the
negligent act or omission was a substantial factor in bringing about the injury
and without which no harm would have occurred. Id. A finding of cause in
fact cannot be supported by mere conjecture, guess, or speculation, but may
be based on either direct or circumstantial evidence. Excel Corp. v. Apodaca,
81 S.W.3d 817, 820 (Tex. 2002) The Frankens did not put on evidence which
shows that but for the statements in the Authorization, they would not have
suffered their alleged damages. Additionally, Sanger Bank was obligated to
disburse the amounts it disbursed pursuant to the agreed upon formula and
confirmation of work by independent inspectors. (R.R.at 89, l. 9 - 95; at D-4)
In other words, if notice were sent on the date of each disbursement, the same
disbursement still would likely have been made. The element of foreseeability
requires a showing that a person of ordinary intelligence should have
anticipated the danger to others by his negligent act. Am. Statesman, 552
S.W.2d, at 103. The Frankens did not put on evidence of how it is foreseeable
that the statements in the Authorization would cause injury to the Frankens.
The Frankens failed to show a probable right of recovery for negligent
misrepresentation.
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APPELLANT’S BRIEF 16
4. Because the Frankens’ loan is not a good or service, they are
not “consumers” with standing to pursue a claim against the
Defendants under the Texas Deceptive Trade Practices Act.
Additionally, they failed to show that Sanger Bank’s omission
was the producing cause of their alleged injuries.
A loan applicant who borrows money from a bank is not a consumer
because the act of borrowing money is not a good or service, and one must be
a consumer to have standing to sue under the DTPA. See Riverside Nat. Bank
v. Lewis, 603 S.W.2d 169, 174 (Tex. 1980); Brown v. Bank of Galveston, Nat.
Ass'n, 930 S.W.2d 140, 144 (Tex. App. Houston [14th]1996), aff'd, 963 S.W.2d
511 (Tex. 1998). The Frankens did not show that they were consumers with
standing under the DTPA.
For DTPA claims, the Frankens must show that Sanger Banks’ actions
or omissions were the producing cause of their alleged damages. Doe v. Boys
Clubs of Greater Dallas, Inc., 907 S.W.2d 472, 481 (Tex. 1995). A producing
cause is a substantial factor which brings about the injury and without which
the injury would not have occurred. Id. This requires some evidence that
Sanger Bank's act or omission was the cause in fact of the Frankens’ injury.
The Frankens must also show an “unbroken causal connection” between the
misrepresentation and their injuries. Id.
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APPELLANT’S BRIEF 17
Plaintiffs offered no evidence of their consumer status under the DTPA.
As set forth in the foregoing section, the Frankens did not show that Sanger
Bank’s failure to send notices on the day distributions were made was the
cause in fact of their alleged injuries. There was also no evidence of an
unbroken causal connection between the representation and injuries.
The Frankens failed to plead and prove that they have a probable right
to relief against Sanger Bank for allegedly violating the DTPA.
5. The Frankens did not establish a probable right to relief for
civil conspiracy.
The essential elements are: (1) two or more persons; (2) an object to be
accomplished; (3) a meeting of minds on the object or course of action; (4)
one or more unlawful, overt acts; and (5) damages as the proximate result.
Massey v. Armco Steel Co., 652 S.W.2d 932, 934 (Tex. 1983). Beyond
showing that the Defendants are two or more people, the Frankens did not
prove a conspiracy involving Sanger Bank. The Frankens failed to prove that
they have a probable right to relief against Sanger Bank for conspiracy.
B. The Order Granting Temporary Injunction should be
dissolved and the order declared void because the it does not
contain a valid trial setting.
Rule 683 requires that every order granting a temporary injunction
shall include an order setting the cause for trial on the merits with respect to
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APPELLANT’S BRIEF 18
the ultimate relief sought. Tex. R. Civ. P. 683. Requiring a trial date on an
injunction order also places the onus upon the party requesting injunctive
relief to renew the injunction if the trial is delayed beyond the trial date set
forth in the order. Emex Holdings, LLC v. Naim, No. 13-09-591-CV, 2010
WL 2163139, at *2 (Tex. App. - Corpus Christi 2010, no pet.). Reference to an
existing docket control order is not a substitute for stating a trial date in the
order itself. Id. The reason for requiring that an injunction order include a
trial date is to protect the parties from being subject to a temporary
injunction made permanent by a court's failure to set the matter for a final
determination on the merits. EOG Res., Inc. v. Gutierrez, 75 S.W.3d 50, 53
(Tex. App. - San Antonio 2002, no pet.).
The requirements of Rule 683 are mandatory and must be strictly
followed. InterFirst Bank San Felipe, N.A. v. Paz Const. Co., 715 S.W.2d 640,
641 (Tex. 1986). When a temporary injunction order does not adhere to the
requirements of Rule 683 the injunction order is subject to being declared
void and dissolved. Id.
In this case, the Order Granting Temporary Injunction ordered that
trial on the merits be set for October 15, 2015 at 11:00 am. (R.R. at 108) The
case has not been tried, and the Frankens have not renewed the injunction.
(C.R.) The effect of an order with a trial date that has past is the same as an
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APPELLANT’S BRIEF 19
order that never contained a trial setting. In both cases, the injunction could
become permanent. The Order Granting Temporary Injunction does not
comply with Rule 683, and, therefore, should be declared void and dissolved.
See Naim, No. 13-09-591-CV, at 2.
PRAYER
Because the Frankens failed to show a probable right to the relief they
seek against Sanger Bank in this lawsuit and the Order Granting Temporary
Injunction does not set forth a valid trial date, Sanger Bank prays that this
Court reverse and render, or alternatively reverse and remand this matter to
the trial court.
Respectfully submitted,
WOOD, THACKER &
WEATHERLY, P.C.
400 West Oak Street, Suite 310
Denton, Texas 76201
(940) 565-6565
(940) 566-6673 FAX
/s/ Ryan Webster_________
RYAN WEBSTER
Email: ryan@wtwlawfirm.com
Texas Bar No. 24066272
R. WILLIAM WOOD
Email: bill@wtwlawfirm.com
Texas Bar No. 21906000
and
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APPELLANT’S BRIEF 20
Robert Alderman
Texas Bar No. 00979900
Email: balderman@aldermancainlaw.com
Robert Cain
Texas Bar No. 03907200
Email: rcain@aldermancainlaw.com
ALDERMAN, CAIN & NEIL, PLLC
122 E. Lufkin Ave.
Lufkin, Texas 75901-2805
(936) 632-2259
(936) 632-3316 FAX
ATTORNEYS FOR APPELLANTS
CERTIFICATE OF SERVICE
The undersigned hereby certifies that a true and correct copy of the
foregoing was served on the following attorneys of record, via electronic mail
to the e-mail address listed below, on this the 30th day of November, 2015, in
accordance with the Texas Rules of Appellate Procedure:
Krystal E. Rylie
SKELTON SLUSHER BARNHILL
WATKINS WELLS, PLLC
1616 South Chestnut
Lufkin, TX 75901
Email: kriley@skeltonslusher.com
Attorneys for Appellees
/s/Ryan Webster
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APPELLANT’S BRIEF 21
CERTIFICATE OF COMPLIANCE
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 Microsoft Word 14 point Georgia font (and 12 point for footnotes).
This brief complies with the type-volume limitation of TEX. R. APP.
P. 9.4(i)(2)(D) because it contains 3,913 words, excluding the parts of the
brief exempted by TEX. R. APP. P. 9.4(i)(1).
/s/ Ryan Webster___________
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APPELLANT’S BRIEF 22