BBVA USA F/K/A Compass Bank v. Richard Francis, 642 S.W.3d 932

Spring Excellence Surgical Hospital, LLC borrowed $1,000,000 and $200,000 from BBVA; Richard Francis, a member, executed a continuing guaranty covering the indebtedness.
Hospital defaulted on the first note; BBVA accelerated the second note and sued Hospital and guarantors; one guarantor filed bankruptcy and the case proceeded in bankruptcy court.
BBVA settled with Hospital and some guarantors; the settlement expressly released Hospital but reserved BBVA’s rights and claims against Francis; the bankruptcy court approved the compromise and remanded BBVA’s claims against Francis to state court.
Francis filed third-party claims against Hospital and other guarantors; at summary judgment the trial court granted Francis’s motion (finding BBVA’s release of Hospital discharged Francis) and denied BBVA’s motion, then rendered final judgment and taxed costs against BBVA.
On appeal, the court reviewed competing summary-judgment motions de novo, concluded the guaranty’s plain language created an unconditional guaranty of payment with broad waivers of defenses, reversed the trial court, rendered judgment for BBVA on the breach-of-guaranty claim, and remanded for attorney’s fees, costs, and determination of Francis’s third-party claims.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether releasing the principal (Hospital) by settlement discharged the guarantor (Francis)	Francis: BBVA’s release of Hospital extinguished his guarantor liability	BBVA: Settlement released Hospital but expressly reserved claims against Francis; guaranty independently obligates Francis	Held: Release of Hospital did not release Francis; guaranty’s terms and reservation preserve BBVA’s claim
Whether BBVA was entitled to summary judgment on breach of guaranty	Francis/third-party defendants: various challenges (release, alleged inconsistencies in claims, lack of acceleration, signature authority)	BBVA: Presented affidavit and loan documents showing default, acceleration, settlement credits, and remaining deficiency	Held: BBVA met its summary-judgment burden; no genuine fact issue shown; judgment rendered for BBVA; remanded for fees and merits of third-party claims

Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex. 2009) (summary-judgment standard)
Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754 (Tex. 2007) (when summary-judgment evidence raises fact issues)
Universal Metals & Mach., Inc. v. Bohart, 539 S.W.2d 874 (Tex. 1976) (distinguishing guaranty of payment vs. collection)
James Constr. Grp., LLC v. Westlake Chem. Corp., 594 S.W.3d 722 (Tex. App.—Houston [14th Dist.] 2019) (guaranty-of-payment explained)
Norris v. Tex. Dev. Co., 547 S.W.3d 656 (Tex. App.—Houston [14th Dist.] 2018) (interpretation of guaranty language)
Plains Expl. & Prod. Co. v. Torch Energy Advisors Inc., 473 S.W.3d 296 (Tex. 2015) (contract-construction principles)
Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323 (Tex. 2011) (contract interpretation and party intent)
Moayedi v. Interstate 35/Chisam Rd., L.P., 438 S.W.3d 1 (Tex. 2014) (effect of broad waiver of defenses)
Sonne v. F.D.I.C., 881 S.W.2d 789 (Tex. App.—Houston [14th Dist.] 1994) (continuing guaranty covers future liabilities)