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Jain v. Plainscapital Bank

Court of Appeals of Texas, Tenth District

April 26, 2017

HIREN JAIN, Appellant

         From the 249th District Court Somervell County, Texas Trial Court No. C10319.

          Before Chief Justice Gray, Justice Davis, and Justice Scoggins


          AL SCOGGINS Justice

         In three issues, appellant, Hiren Jain, complains about a summary judgment granted in favor of appellee, Plainscapital Bank. Specifically, Jain contends that: (1) Plainscapital did not prove the elements necessary to procure a summary judgment; (2) he presented one or more issues that preclude summary judgment; and (3) the trial court's summary-judgment order is void for lack of subject-matter jurisdiction. We affirm.

         I. Background

         On or about October 28, 2011, 7M Hospitality, Inc. ("7M"), as the borrower, executed a promissory note with First National Bank ("FNB") in the original principal amount of $3, 412, 500. The note was purportedly secured by a La Quinta hotel in Glen Rose, Texas. Also on or about October 28, 2011, Jain signed an unconditional personal guaranty of the promissory note for the full amount of $3, 412, 500, as well as all interest, collection expenses, late fees, acceleration fees, and attorney's fees due on every claim involving the indebtedness of 7M under the note.

         By July 17, 2013, 7M had defaulted on the promissory note by failing to repay FNB as promised. As indicated in its letter of default and demand for payment, FNB accelerated the debt and demanded payment of the principal, per-diem interest, court and collection costs, and all fees, including attorney's fees. FNB sent its letter of default and demand for payment to 7M and Jain. Shortly thereafter, FNB went into receivership with the Federal Deposit Insurance Corporation.

         On or about September 13, 2013, certain assets of FNB were purchased by or assigned to Plainscapital. Among the assets acquired by Plainscapital was the 7M promissory note. In its filings in the trial court and on appeal, Plainscapital asserts that it has been a holder in due course of the 7M promissory note, as well as Jain's personal guaranty since September 13, 2013.

         Jain failed to make payments according to the personal guaranty. Accordingly, on December 3, 2013, Plainscapital sued Jain under the personal guaranty. Jain responded to Plainscapital's lawsuit by filing a general denial and asserting numerous affirmative defenses, among other things. Later, Jain filed a motion to dismiss this lawsuit under the principals of "(1) no justiciable issue[, ] (2) judicial estoppel, (3) collateral estoppel, (4) failure of conditions precedent, (5) lack of standing, (6) mootness, and (7) res judicata."

         However, while the suit was pending in the trial court, 7M filed for Chapter 11 Bankruptcy protection on November 5, 2013. On May 14, 2014, the bankruptcy court entered an order confirming 7M's plan for reorganization.

         On October 27, 2014, Plainscapital filed a traditional motion for summary judgment, arguing that: (1) the personal guaranty is a valid and enforceable contract; (2) Jain is the proper party to sue for breach of contract; (3) Plainscapital and its predecessor-in-interest properly performed their contractual obligations; (4) Jain breached the personal guaranty by failing to make payments on the 7M note; and (5) the breach caused Plainscapital $3, 285, 966.02 in damages with interest accruing at $280.61 per day. Additionally, Plainscapital requested reasonable and necessary attorney's fees incurred in the prosecution of the suit and any subsequent appeals. Jain filed a lengthy response to Plainscapital's summary-judgment motion.

         After a hearing, the trial court granted Plainscapital's traditional motion for summary judgment. The trial court ordered Jain to pay $3, 269, 126.01 as the amount owed under the personal guaranty, post-judgment interest at a rate of $279.29 per day and 5% per year on the total judgment, $13, 651 in attorney's fees, costs in the amount of $1, 016.28, and additional attorney's fees for appeals to this Court and the Texas Supreme Court.[1]Jain filed a motion for new trial, which was overruled by operation of law. See Tex. R. Civ. P. 329b(c). This appeal followed.

         II. Standard of Review

         We review the trial court's grant of a traditional motion for summary judgment de novo. See Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). When reviewing a traditional motion for summary judgment, we must determine whether the movant met its burden to establish that no genuine issue of material fact exists and that the movant is entitled to judgment as a matter of law. See Tex. R. Civ. P. 166a(c); Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002). The movant bears the burden of proof in a traditional motion for summary judgment, and all doubts about the existence of a genuine issue of material fact are resolved against the movant. See Grant, 73 S.W.3d at 215. We take as true all evidence favorable to the non-movant, and we indulge every reasonable inference and resolve any doubts in the non-movant's favor. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). We will affirm a traditional summary judgment only if the record establishes that the movant has conclusively proved its defense as a matter of law or if the movant has negated at least one essential element of the plaintiff's cause of action. IHS Cedars Treatment Ctr. of DeSoto, Tex., Inc. v. Mason, 143 S.W.3d 794, 798 (Tex. 2004); Am. Tobacco Co. v. Grinnell, 951 S.W.2d ...

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