547 S.W.3d 656
Tex. App.2018Background
- Joshua (Josh) Norris signed a written Guaranty dated September 17, 2015, personally guaranteeing $337,944 of deferred base rent owed by ARC Designs, payable in 12 monthly installments in 2016. Norris delivered the Guaranty to Texas Development Company (TDC).
- A September 2015 letter from Norris/ARC Designs (attached to the Guaranty) described the parties’ agreed deferred-base-rent terms and included a signature block; TDC later sent an October 2015 letter enclosing a “final” Deferred Base Rent Agreement and the Guaranty copy.
- ARC Designs defaulted on the deferred payments; TDC sued ARC Designs for breach of the lease modification and sued Norris on the Guaranty. TDC moved for traditional summary judgment against both defendants.
- The trial court granted summary judgment for TDC on both the breach-of-contract claim against ARC Designs and the breach-of-guaranty claim against Norris; attorney’s fees were awarded. ARC Designs did not appeal; Norris appealed only the guaranty judgment.
- Norris’s sole appellate contention: the Guaranty became void because TDC allegedly rejected the attached September 2015 Deferred Base Rent Agreement by sending the October 2015 letter (a counteroffer), so there was no underlying agreement to guarantee.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity/enforceability of the Guaranty | Guaranty is a valid, independent, irrevocable guaranty that names the amount and payment terms; TDC owns it and is entitled to judgment. | Guaranty is void because TDC rejected the attached Deferred Base Rent Agreement (October letter = counteroffer), so nothing exists for Norris to guarantee. | Court affirms: Guaranty is a complete, unconditional instrument and not contingent on acceptance of the attached Deferred Base Rent Agreement; enforceable against Norris. |
| Whether absence of a signed underlying agreement defeats guaranty liability | TDC: unneeded—Guaranty itself states the amount and terms and is enforceable; guaranty need not fail for lack of separate consideration. | Norris: without an accepted Deferred Base Rent Agreement, guaranty has no operative subject. | Court: Norris waived any argument about inability to determine underlying terms; in any event the Guaranty itself states the terms and amount, so liability is determinable and proven. |
| Appropriateness of summary judgment | TDC: summary-judgment evidence conclusively proved (1) existence/ownership of guaranty, (2) terms, (3) condition occurred (default), (4) Norris’ failure to pay. | Norris: raised a fact-question about contract formation (rejection/counteroffer) preventing summary judgment. | Court: under de novo review, TDC met its burden and Norris did not raise a genuine fact issue sufficient to defeat summary judgment; judgment affirmed. |
Key Cases Cited
- M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22 (Tex. 2000) (summary-judgment burden-shifting principles)
- Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572 (Tex. 2006) (de novo review and evidence-viewing rules on summary judgment)
- Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754 (Tex. 2007) (standard for genuine fact issue on summary judgment)
- FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868 (Tex. 2000) (affirm where any independent summary-judgment ground is meritorious)
- Universal Metals & Machinery, Inc. v. Bohart, 539 S.W.2d 874 (Tex. 1976) (guaranty may be independent and complete instrument separate from attached agreement)
- Univ. Sav. Ass'n v. Miller, 786 S.W.2d 461 (Tex. App.—Houston [14th Dist.] 1990) (guaranties construed by their terms; strict construction)
- City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671 (Tex. 1979) (appellate preservation rules for summary-judgment issues)