Towncreek Industrial, LLC, H & H Steel Fabricators, Inc., Alltex Steel, Inc., and James Tobey v. Wells Fargo Bank, National Association
02-15-00393-CV
| Tex. App. | Oct 27, 2016Background
- Wells Fargo made three loans/credit obligations involving Towncreek, H&H, Alltex, and Tobey: (Note 1 to Towncreek secured by deed of trust on Springtown real property), (credit-card account personally guaranteed by Tobey), and (Note 2 to H&H secured by a security agreement and additionally guaranteed by Towncreek and Tobey). Guaranties were continuing and broad.
- Appellants defaulted on Note 1, Note 2, and the credit-card account in early 2015; Wells Fargo accelerated Note 1 and demanded payment after cure periods lapsed.
- Wells Fargo foreclosed on the Springtown property, purchased it at sale, applied proceeds, and sued for the remaining deficiencies and unpaid balances on Note 1, Note 2, the credit card, and under the guaranties.
- Wells Fargo moved for traditional and no‑evidence summary judgment, supporting amounts owed with an officer affidavit (McKinney) and loan documents; appellants disputed only damages and asserted mitigation, offset, and payment defenses, but did not dispute contractual validity.
- Appellants sought continuances and moved to compel an older appraisal the day of the summary‑judgment hearing; the trial court heard the motion as scheduled, granted summary judgment for Wells Fargo, and awarded actual damages less than Wells Fargo’s requested total.
Issues
| Issue | Plaintiff's Argument (Wells Fargo) | Defendant's Argument (Appellants) | Held |
|---|---|---|---|
| 1. Whether summary judgment was proper on liability and damages | Wells Fargo: Submitted competent summary‑judgment proof (note documents + officer affidavit) establishing liability and total balance due | Appellants: Damages evidence conflicted; transaction history shows a lower deficiency; challenge to affidavit’s reliability | Court: Affirmed — Wells Fargo proved entitlement; appellants’ judicial admission and evidence did not create a fact issue on awarded damages |
| 2. Whether appellants raised a fact issue on mitigation | Wells Fargo: Mitigation is appellants’ affirmative defense; failure to present evidence means no fact issue | Appellants: Wells Fargo failed to mitigate by not proving fair market value of foreclosed property; sought appraisal | Court: Affirmed — appellants bore burden to raise evidence on mitigation and failed to do so |
| 3. Admissibility of bank officer affidavit (McKinney) | Wells Fargo: Affidavit based on personal knowledge + attached documents; sufficient to prove balances | Appellants: Affidavit is conclusory and hearsay, lacking underlying payment history | Court: Affirmed — affidavit was not conclusory or inadmissible hearsay; trial court did not abuse discretion in considering it |
| 4. Denial of continuance / refusal to compel appraisal | Wells Fargo: Hearing notice and case history adequate; appraisal from 2012–13 not probative of value at foreclosure | Appellants: Denial prevented necessary discovery to support mitigation defense | Court: Affirmed — trial court did not abuse discretion; appellants delayed and failed to show relevance of older appraisal |
Key Cases Cited
- Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150 (Tex. 2004) (standards for reviewing continuance of summary‑judgment hearing)
- MMP, Ltd. v. Jones, 710 S.W.2d 59 (Tex. 1986) (plaintiff entitled to summary judgment only if it conclusively proves all essential elements)
- Am. Petrofina, Inc. v. Allen, 887 S.W.2d 829 (Tex. 1994) (nonmovant must present evidence raising fact issue on affirmative defenses to defeat summary judgment)
- Diversified Fin. Sys., Inc. v. Hill, 99 S.W.3d 349 (Tex. App.—Fort Worth 2003) (bank officer affidavit may establish amount due based on personal knowledge)
- Lunsford Consulting Grp., Inc. v. Crescent Real Estate Funding VIII, L.P., 77 S.W.3d 473 (Tex. App.—Houston [1st Dist.] 2002) (burden on defendant to present mitigation evidence when asserting it as affirmative defense)