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Chahadeh v. Regions Bank

Court of Appeals of Texas, First District

July 31, 2017

HASSAN CHAHADEH, Appellant
v.
REGIONS BANK, Appellee

         On Appeal from the 270th District Court Harris County, Texas Trial Court Case No. 2012-67412A

          Panel consists of Chief Justice Radack and Justices Jennings and Bland.

          MEMORANDUM OPINION

          TERRY JENNINGS JUSTICE.

         Appellant, Hassan Chahadeh, challenges the trial court's summary judgment in favor of appellee, Regions Bank ("Regions"), on its claim for breach of contract and Chahadeh's counterclaim against it for fraud, aiding and abetting a breach of fiduciary duty, and a declaratory judgment. In three issues, Chahadeh contends that the trial court erred in granting Regions summary judgment, denying his motion to reconsider, and severing his third-party claim against Kamran Nezami.

         We affirm.

         Background

         In its Original Petition, Regions brought a breach-of-contract claim against Chahadeh as guarantor of a loan that Regions extended to CN Investors, LLC ("CN Investors"), a company composed of Chahadeh and Nezami, alleging in pertinent part, as follows:

By failing and refusing to make payments due and owing to Regions, CN Investors defaulted under the terms of the Loan Documents and Chahadeh defaulted under the terms of his Commercial Guaranty. As a proximate result of CN Investors' and Chahadeh's breaches of their contractual obligations, Regions suffered damages, including but not limited to the amounts of unpaid principal, accrued interest and attorneys' fees due it under the Loan Documents and Commercial Guaranty.

         In his "First Amended Counterclaims, " Chahadeh alleged that the loan was really a home equity loan for Nezami's homestead, Regions had "fraudulently disguised and structured the [home equity] loan as a business loan, " and Regions had obtained "the guaranty of Chahadeh on such basis." And when the loan was renewed, "Regions continued to disguise the Loan as a business loan." Chahadeh sought damages, alleging that Regions had aided and abetted a breach of fiduciary duty owed to him by Nezami, after Nezami had "abandoned" his homestead, allowing "it to deteriorate, " and renounced his homestead claim. And he requested a judgment declaring that his obligation resulted from a void guaranty on a constitutionally-protected home equity loan.

         In its Second Amended Traditional and No-evidence Motion for Summary Judgment against Chahadeh, Regions argued that it was entitled to summary judgment on its breach-of-contract claim against Chahadeh because it, as a matter of law, established (1) the execution of the note and guaranty, (2) Chahadeh signed the guaranty, (3) Regions legally owned the guaranty, and (4) a certain balance remained due and owing.[1] Regions further argued that it was entitled to summary judgment on Chahadeh's counterclaim against it for fraud and aiding and abetting a breach of fiduciary duty because the loan was a business loan, not a home equity loan; Chahadeh released all of his counterclaims; he is estopped from asserting that the loan was a "disguised home equity loan"; he ratified the business loan agreement and his commercial guaranty when he executed the guaranty agreements; and his claims are barred by limitations. Regions further asserted that there is no evidence that the loan was a home equity loan, it made a fraudulent agreement, or it aided and abetted any breach of fiduciary duty.

         Regions attached to its motion the affidavit of Thomas Bacarella, a Regions vice-president. Bacarella testified that on September 12, 2006, Chahadeh executed a "Commercial Guaranty, " guaranteeing CN Investor's repayment of a loan in the amount of $1, 537, 500.00 for the purchase of real property located at 702 Crestbend Drive (the "property").[2] Further, on September 12, 2007, when the loan was renewed for an additional $348, 687.00, for a total principal amount of $1, 886, 187.00, Chahadeh again executed a "Commercial Guaranty." According to Bacarella, the maturity date of CN Investors' total indebtedness to Regions was extended to July 19, 2008. He further testified, that "[e]ffective July 19, 2008, " CN Investors entered into a "First Amendment to Business Loan Agreement" and "Note Modification Agreement" with Regions, "extend[ing] the maturity date of [CN Investors'] indebtedness to Regions to July 19, 2009."

         Also attached to Regions' Second Amended Summary Judgment Motion are copies of each "Commercial Guaranty, " each of which provides, "Guarantor will make any payments to lender or its order, on demand, . . ." And the subsequent guarantor's waivers section in each does not require Regions to pursue other remedies before invoking the guaranty:

Except as prohibited by applicable law, Guarantor waives any right to require Lender . . . (B) to make any presentment, demand or notice of any kind, including notice of any nonpayment of the indebtedness or of any nonpayment related to any collateral, or notice of any action or nonaction on the part of the Borrower, Lender, any surety, endorser, or other guarantor in connection with the indebtedness or in connection with the creation of new or additional loan or obligations. (C) to resort for payment or proceed to directly or at once against any person, including the Borrower or any other guarantor; (D) to proceed directly against or exhaust any collateral held by the Lender from Borrower, any other guarantor, or any other person; . . . (F) to pursue any other remedy within Lender's Power . . . ."

         In his affidavit, Bacarella explained that the parties, in September 2006 and 2007, also executed a "Disbursement Request and Authorization" form, each noting that the primary purpose of the loan was for "Business, Agricultural and Alt. Other." However, the specific purpose of the 2006 disbursement was "Comm'l-Short Term, " and the specific purpose of the 2007 disbursement was "Residential 1-4 Family."

         Bacarella further explained that CN Investors made the majority of its loan payments, but missed a payment on October 29, 2008, for which Regions accepted late payment in December 2008. CN Investors' note matured on July 19, 2009. And CN Investors continued to make payments through October 29, 2009, but it did not pay all of the remaining principal and accrued interest due upon the note's maturity.

         On September 3, 2010, Regions demanded that CN Investors pay the note and Chahadeh pay the guaranty by September 13, 2010. After neither CN Investors nor Chahadeh paid the remaining balance, "Regions posted the Property for foreclosure." CN Investors and Nezami, alleging that the property was Nezami's "homestead, " filed a verified petition against Regions to stop the foreclosure. The parties then entered into the final settlement agreement, which is attached to Bacarella's affidavit, in which Nezami recanted his homestead claim, in pertinent part, as follows:

CN and NEZAMI, jointly and severally, RENOUNCE, GIVE UP, RELEASE, AND ABANDON (a) any and all claims and assertions that the Property is or ever has been the homestead of Nezami . . . and (b) any and all claims and assertions that the Loan . . . is or ever has been a home equity loan, disguised or otherwise, and represent and warrant that it has never been so at any time.

         Pursuant to an agreement with Regions, CN Investors then sold the property. And the proceeds of the sale were credited against the principal balance, reducing the principal amount due on the note to $673, 307.24.

         In his response to Regions' Second Amended Summary Judgment Motion, Chahadeh argued that Regions was not entitled to judgment as a matter of law because the Texas Administrative Code bars a guaranty on a home equity loan; Nezami did not need to hold title to the property for it to be his homestead; Chahadeh did not waive, did not release, and is not estopped from asserting his affirmative defenses; and Regions' claim is bared by limitations. He further asserted that Regions may not recover a "deficiency judgment" from him and he did not lack standing to assert that the property was Nezami's homestead. Chahadeh also argued that Regions' summary-judgment motion on his counterclaims should be denied because there is evidence to support each counterclaim.

         In support of his counterclaims, Chahadeh attached to his response: CN Investors and Nezami's verified original petition in which they asserted that the property was Nezami's homestead; Chahadeh's affidavit in which he indicated his "information and belief" that Regions had coerced Nezami to renounce his homestead and to allow a deficiency against CN Investors; Nezami's admissions in the instant suit, indicating that the property was Nezami's homestead; the Harris County Appraisal District's records, describing the property as "Residential, Single-Family, " but also noting "Exemption Type: None, " instead of "Homestead"; and a Cadmus Environmental "Mold Inspection Report, " describing mold growth and "damage to sheetrock" at the property.

         Relying on this evidence, Chahadeh asserted that the property was Nezami's "homestead" and he had "breached his [fiduciary] duty" to Chahadeh and CN Investors when he "abandoned" it "for two years . . . without air conditioning, " resulting in "mold" and "leak conditions caus[ing] damage to sheetrock." Regions, in writing, timely objected to Chahadeh's evidence.

         Without specifying the reasons for its decision, the trial court granted summary judgment for Regions, but it did not specifically rule on Regions' objections to Chahadeh's summary-judgment evidence. Chahadeh filed a motion, asking the trial court to reconsider its summary-judgment ruling, and he attached a draft settlement between Nezami, CN Investors, and Regions, wherein the ...


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