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Rutherford v. 6353 Joint Venture

Court of Appeals of Texas, Fourteenth District

July 25, 2017

JAMES RUTHERFORD, Appellant
v.
6353 JOINT VENTURE, Appellee

         On Appeal from the 125th District Court Harris County, Texas Trial Court Cause No. 2010-79144.

          Panel consists of Justices Boyce, Busby, and Wise.

          MEMORANDUM OPINION

          J. Brett Busby Justice.

         Appellant James Rutherford guaranteed payment of a promissory note payable to appellee 6353 Joint Venture. When the note went unpaid, 6353 sued Rutherford on the guaranty. 6353 moved for summary judgment on its claim, which the trial court granted. Although Rutherford raises three issues in this appeal, we need only address his first and second issues.

         Rutherford initially complains that the trial court erred when it refused to dismiss 6353's lawsuit on the ground that 6353 did not have standing at the time the suit was filed because it had assigned the Promissory Note to a third party. We overrule this issue because the record establishes that 6353, even if it had assigned the Promissory Note, possessed standing at the time it filed suit as a result of its indorsement of the Promissory Note with recourse.

         Rutherford argues in his second issue that the trial court erred when it granted 6353's motion for summary judgment because 6353 failed to prove as a matter of law (1) that it was the owner or holder of the Promissory Note, and (2) the amount owed under the Promissory Note. We sustain this issue because 6353 failed to prove the amount owed under the guaranty as a matter of law. We therefore reverse the trial court's summary judgment and remand the case to the trial court for further proceedings.

         Background

         Rutherford is the owner of 6300 Interests, Ltd. He is also the majority shareholder in Quality Infusion Care, Inc. On June 11, 2009, 6353 loaned 6300 Interests and Quality Infusion Care $675, 000 to finance the purchase of condominiums. Rutherford signed the Promissory Note as president of both entities. Simultaneously, Rutherford personally guaranteed payment of the Promissory Note executed by 6300 Interests and Quality Infusion Care. 6300 Interests and Quality Infusion Care allegedly defaulted on the Promissory Note and 6353 sued Rutherford on the guaranty.

         6353 eventually moved for summary judgment on its claim against Rutherford. 6353 sought to recover the unpaid balance of the note and its attorney's fees. In addition to filing a summary judgment response, Rutherford filed a motion to dismiss the lawsuit arguing that 6353 lacked standing at the time it filed suit because the Promissory Note had been assigned to Texas Capital Bank. The trial court never directly ruled on Rutherford's motion to dismiss. It did grant 6353's motion for summary judgment, however, awarding 6353 the principal sum of $390, 000, $39, 000 attorney's fees through trial, as well as additional attorney's fees if Rutherford unsuccessfully appealed the judgment. This appeal followed.

         Analysis

         I. 6353 had standing at the time suit was filed.

         Rutherford asserts in his first issue that the trial court erred when it failed to dismiss 6353's lawsuit. Rutherford argues that 6353 did not have standing at the time the suit was originally filed because it had previously assigned the promissory note to Texas Capital Bank.

         A. Standard of review and applicable law

         Standing, a component of subject-matter jurisdiction, is a constitutional prerequisite to maintaining suit. Tex. Ass'n. of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 444-45 (Tex. 1993); Concerned Cmty. Involved Dev., Inc. v. City of Houston, 209 S.W.3d 666, 670 (Tex. App.-Houston [14th Dist.] 2006, pet. denied). Standing requires that there exist a real controversy between the parties that will actually be determined by the judicial declaration sought. Sammons & Berry, P.C. v. Nat'l Indem. Co., No. 14-13-00070-CV, 2014 WL 3400713, at *3 (Tex. App.- Houston [14th Dist.] July 10, 2014, no pet.) (mem. op.) (citing Nootsie, Ltd. v. Williamson Cnty. Appraisal Dist., 925 S.W.2d 659, 662 ...


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