Sanger Bank v. David Frankens and Kathryn Frankens, 12-15-00256-CV

Background

David and Kathryn Frankens obtained a $252,000 construction loan from Sanger Bank for land purchase and home construction; only about $118,876.53 was disbursed before work stopped.
The loan documents included an Authorization requiring the borrowers to open a Construction Loan Account at the bank to trigger the bank’s obligation to provide same‑day disbursement notices; the Frankenses never opened that account and instead instructed the bank to deposit disbursements into the contractor‑related Benrich account.
Disbursements were made incrementally under an agreed draw formula and after independent inspections; the bank made several disbursements into Benrich’s account.
After the borrower and contractor (Benson Construction) had a falling out and construction halted, Sanger Bank scheduled foreclosure due to concern for collateral; the Frankenses sought and obtained an ex parte TRO and then a temporary injunction enjoining the foreclosure.
The Frankenses sued for breach of contract, negligent misrepresentation, DTPA violations, civil conspiracy, and wrongful foreclosure; Sanger Bank appeals the temporary injunction, arguing plaintiffs failed to prove a probable right to relief and that the injunction order lacks a valid trial setting under Tex. R. Civ. P. 683.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether applicant proved a probable right to injunctive relief	Frankenses: bank failed to provide required same‑day disbursement notices causing unauthorized/fraudulent draws and damages	Sanger: plaintiffs failed to perform conditions (no Construction Loan Account), produced no evidence bank breached duties or caused damages; claims fail as matter of law	Trial court granted temporary injunction (order now appealed); appellant argues grant was an abuse of discretion because probable right was not shown
Breach of contract against bank	Frankenses: bank breached Authorization and construction contract duties by not sending disbursement statements	Sanger: bank was not party to construction contract; Authorization’s notice duty never arose because borrowers did not open required account; plaintiffs offered no causation evidence	Trial court enjoined foreclosure; appellant contends breach claim is unsupported and cannot sustain injunction
Negligent misrepresentation / DTPA claims	Frankenses: bank’s omission/misrepresentations about disbursements caused economic loss and DTPA injury	Sanger: economic‑loss rule bars negligent misrep; alleged promise was future conduct (not actionable); plaintiffs lacked DTPA consumer status for a loan and failed to prove proximate/producing cause	Trial court enjoined foreclosure; appellant argues these tort claims fail and cannot justify injunctive relief
Validity of injunction order under Tex. R. Civ. P. 683	Frankenses: injunction was proper and temporary relief required to prevent foreclosure	Sanger: Rule 683 requires the injunction order to state a trial date; order set Oct. 15, 2015 but the trial did not occur and injunction was not renewed, so order is void/dissolvable	Trial court set a trial date in the injunction order but the date elapsed without trial or renewal; appellant asks the injunction be declared void and dissolved

Key Cases Cited

Butnaru v. Ford Motor Co., 84 S.W.3d 198 (Tex. 2001) (elements required for temporary injunction and standards for preliminary relief)
Walker v. Packer, 827 S.W.2d 833 (Tex. 1992) (trial court’s discretion on injunctive relief and appellate review standards)
Mead v. Johnson Group, Inc., 615 S.W.2d 685 (Tex. 1981) (contract damages must be natural, probable, and foreseeable consequences)
Grant Thornton, LLP v. Prospect High Income Fund, 314 S.W.3d 913 (Tex. 2010) (standards for justifiable reliance in negligent misrepresentation)
Missouri Pac. R. Co. v. American Statesman, 552 S.W.2d 99 (Tex. 1977) (cause in fact and foreseeability elements of proximate cause)