Interstate 35/Chisam Road, L.P. v. Moayedi
377 S.W.3d 791
Tex. App.2012Background
- Villages of Sanger, Ltd. defaulted on a $696,000 note guaranteed by Moayedi; 1-35 foreclosed, property sold for $487,200 while FMV was $840,000.
- Moayedi sought offset under Tex. Prop. Code § 51.003(c) for the difference between FMV and sale price; 1-35 claimed Moayedi waived offset rights in the guaranty.
- Guaranty agreement limited liability to $196,000 plus accrued interest and costs and contained waiver clauses in paragraphs 7 and 13.
- Trial court granted Moayedi summary judgment; 1-35 moved for summary judgment arguing waiver of offset rights; the motion record centered on whether broad waivers encompassed § 51.003.
- Court reversed, granting 1-35 summary judgment and awarding $196,000 plus interest and costs to be paid by Moayedi, remanding for interest/costs determination.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether paragraph seven waives Moayedi's § 51.003 offset right | 1-35 argues broad language waives all defenses, including § 51.003 offset. | Moayedi contends the waiver is too broad to specifically include an offset right. | Waiver covers § 51.003 offset. |
| Whether public policy prevents waiving § 51.003 rights | Waiver is consistent with freedom of contract and no public policy prohibits waiving offset. | Public policy may prohibit waivers of offset rights under § 51.003. | Public policy does not preclude waiver; waiver enforceable. |
| Whether the trial court erred in denying I-35's and granting Moayedi's summary judgment on the offset issue | Waiver language, read in context, forecloses offset; 1-35 entitled to judgment on its defense. | Waiver is insufficient to extinguish § 51.003 offset rights. | Trial court erred; offset rights waived; 1-35 awarded $196,000 plus interest/costs. |
Key Cases Cited
- LaSalle Bank Nat’l Ass’n v. Sleutel, 289 F.3d 837 (5th Cir. 2002) (waiver of offset rights upheld under similar language)
- Segal v. Emmes Capital, L.L.C., 155 S.W.3d 267 (Tex.App.-Hou. [1st Dist.] 2004) (waiver of rights related to § 51.003 upheld)
- Chase Manhattan Bank, N.A. v. Greenbriar North Section II, 835 S.W.2d 720 (Tex.App.-Houston [1st Dist.] 1992) (non-waivable policy not implicated; contract choice of law analysis)
- Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118 (Tex. 1996) (contract interpretation requires harmonization of entire instrument)
- Brown v. Am. Transfer & Storage Co., 601 S.W.2d 931 (Tex. 1980) (offset defense analyzed as defense to deficiency claim)
- MCI Telecomm. Corp. v. Tex. Util. Elec. Co., 995 S.W.2d 647 (Tex. 1999) (unambiguous contract interpretation framework)
- Wells Fargo Bank, Minn., N.A. v. N. Cent. Plaza I, L.L.P., 194 S.W.3d 728 (Tex. App.-Dallas 2006) (public policy and contract approach to waivers)