Alphaville Ventures, Inc., and Noam Bizman v. First Bank
429 S.W.3d 150
Tex. App.2014Background
- SBLS (Small Business Loan Source LLC) was the original lender on a promissory note to 5M Corp dba Arby’s; 5M assigned borrower obligations to Alphaville and Noam Bizman guaranteed payment.
- Alphaville defaulted; First Bank sued to collect under the note and guaranty, alleging it had been assigned SBLS’s interests.
- First Bank moved for summary judgment and the trial court entered a final summary judgment for First Bank for the unpaid balance, interest, attorneys’ fees, and costs.
- On appeal Alphaville and Bizman challenged only whether First Bank conclusively proved it was the owner and holder (assignee) of the note and guaranty.
- First Bank’s timely summary-judgment proof included an affidavit by Wayne Ballenger and a Loan Purchase and Sale Agreement (PSA) with schedules and a Bill of Sale; there were no endorsements of the note or guaranty in the timely record.
- The court excluded late-filed reply exhibits (additional assignment documents) and held the timely evidence did not conclusively show First Bank was assignee; summary judgment reversed and remanded.
Issues
| Issue | Plaintiff's Argument (First Bank) | Defendant's Argument (Alphaville/Bizman) | Held |
|---|---|---|---|
| Did First Bank conclusively prove it is the owner and holder (assignee) of the note and guaranty? | Ballenger affidavit plus PSA and attached schedules and Bill of Sale establish assignment and ownership. | The PSA contemplated future endorsements and did not itself transfer the instruments; no endorsements or contemporaneous assignment documents were timely produced, so ownership/holder status was unproven. | Reversed — First Bank failed to conclusively prove owner/holder status; genuine fact issue exists. |
| May the court consider late-filed supplemental assignment documents in the movant’s reply? | The supplemental documents prove the assignment and could be considered. | The reply exhibits were filed without leave and appellants properly objected; trial court record contains no affirmative leave. | Excluded — late-filed evidence not considered because no leave in record. |
| Did appellants waive the challenge by failing to file a verified denial under Tex. R. Civ. P. 93? | First Bank contended Rule 93 requires a verified denial to challenge genuineness of endorsement/assignment. | Appellants argued they challenged existence of any assignment, not genuineness, so Rule 93 did not bar the claim. | Held — Rule 93(8) only bars denial of genuineness of an existing assignment; failure to verify does not relieve plaintiff of proving existence of an assignment. |
| Was Ballenger’s affidavit sufficient standing alone to prove assignment? | Ballenger’s affidavit asserting custodian status and referencing PSA established ownership. | Affidavit was conclusory or inadequately supported because PSA did not effectuate transfer and no endorsements were produced; affiant didn’t explain personal knowledge underlying assertion. | Held — affidavit plus timely documents did not conclusively establish assignment; affidavit was insufficient in light of documentary gaps. |
Key Cases Cited
- Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211 (Tex. 2003) (summary judgment standard)
- Valence Operating Co. v. Dorsett, 164 S.W.3d 656 (Tex. 2005) (de novo review and evidence construed for nonmovant)
- McLemon v. Dynegy, Inc., 347 S.W.3d 315 (Tex.App.-Houston [14th Dist.] 2011) (elements to collect on note; prior use of affidavit-plus-docs to prove assignment)
- Zarges v. Bevan, 652 S.W.2d 368 (Tex. 1983) (affidavit that exhibit is true copy and affiant is owner/holder can suffice absent contrary evidence)
- Benchmark Bank v. Crowder, 919 S.W.2d 657 (Tex. 1996) (timely filing of summary judgment evidence; leave required for late filing)
- INA of Texas v. Bryant, 686 S.W.2d 614 (Tex. 1985) (presume trial court did not consider late-filed evidence absent record showing leave)
- Vahlsing v. Collier Cobb & Assocs. of Dallas, Inc., 560 S.W.2d 117 (Tex.Civ.App.-Dallas 1977) (absence of verified denial does not relieve plaintiff of proving existence of assignment)