499 S.W.3d 481
Tex. App.2016Background
- In 2008 Stillwater National Bank (SNB) made three short-term loans to Victor Lissiak Jr., Lawrence Don, and J. Randolph Light Jr.; those notes were consolidated by a $2,500,000 promissory note dated September 30, 2008, signed by all three borrowers. SNB later indorsed the note to SW Loan OO, L.P. (SW).
- Lissiak disputed the validity/authenticity of his signature, alleged failure of consideration, estoppel, material alteration, cancellation, and other defenses; he did not settle with SW while other parties did.
- SW sued Lissiak on the $2.5M note; it moved for traditional summary judgment supported by custodial affidavits authenticating the note, establishing holder status, and stating the balance due; SW’s attorney also submitted an affidavit as to fees.
- The trial court granted summary judgment in favor of SW for $3,047,983.92 plus interest and fees; Lissiak appealed contesting competency of SW’s summary-evidence and raising multiple fact issues and affirmative defenses.
- The court of appeals reviewed preservation of evidentiary objections, admissibility/authenticity of the note, and whether Lissiak raised fact issues on SW’s claim or on each element of his affirmative defenses.
Issues
| Issue | Plaintiff's Argument (Lissiak) | Defendant's Argument (SW) | Held |
|---|---|---|---|
| Competency/authenticity of SW’s summary-evidence | SW affidavits are conclusory; some statements are hearsay and insufficient to prove Lissiak signed the note | Custodian affidavits authenticated the note and its indorsement; Situs custodian’s statements fit business-records exception | SW’s evidence was competent; affidavits authenticated the note and signatures, hearsay objections overruled |
| Whether SW proved all elements of a suit on a note | Fact issues exist re: signature authenticity, failure of consideration, holder-in-due-course status, and amount due | SW produced authenticated note showing signature and indorsement, custodian testimony of balance due; burden shifted to Lissiak | SW proved existence, signature, ownership/holder status, and balance due; summary judgment proper |
| Whether Lissiak’s defenses raised fact issues (failure of consideration; estoppel; material alteration; cancellation; discharge) | Lissiak claimed no consideration for short-term notes, promissory estoppel based on SNB promises, renewals altered/extinguished liability, and settlement extinguished debt | SW argued renewal note waived prior lack-of-consideration defense; parol evidence bars extrinsic promises; extension clauses authorized renewals; settlement did not affect the 2008 note | Lissiak failed to raise fact issues on defenses: waiver/estoppel and parol-evidence barred his extrinsic claims; consent provisions defeat material-alteration claim; no cancellation shown |
| Preservation of objections to summary-evidence | Trial court implicitly overruled objections when it granted summary judgment and later overruled motion for new trial | SW argued objections were implicitly ruled; court analyzed record and rule for preservation | Objections preserved via motion for new trial overruled by operation of law; appellate review proceeded and court found no abuse of discretion in admitting SW’s evidence |
Key Cases Cited
- Roth v. JPMorgan Chase Bank, N.A., 439 S.W.3d 508 (Tex. App. —El Paso 2014) (elements required to prevail on claim on a note)
- Affordable Motor Co. v. LNA, LLC, 351 S.W.3d 515 (Tex. App. —Dallas 2011) (custodian affidavit may authenticate business records and a note)
- City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671 (Tex. 1979) (burden-shifting rule for summary judgment)
- Brownlee v. Brownlee, 665 S.W.2d 111 (Tex. 1984) (nonmovant must present fact issues on each element of affirmative defense)
- Town North Nat’l Bank v. Broaddus, 569 S.W.2d 489 (Tex. 1978) (parol evidence cannot vary unambiguous written note to relieve maker of liability)