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Gano v. Diaz

Court of Appeals of Texas, Third District, Austin

June 28, 2018

Bryan L. Gano, Appellant
Dimas Diaz and Tracy Diaz, Appellees


          Before Chief Justice Rose, Justices Pemberton and Goodwin


          Melissa Goodwin, Justice

         Bryan L. Gano appeals from the trial court's final judgment denying his motion for summary judgment and granting that of Dimas Diaz and Tracy Diaz. The Diazes sued Gano for breach of a contract whereby Gano purchased a business from the Diazes. For the reasons that follow, we affirm the trial court's judgment.


         The Diazes owned Day Ventures, LLC, which operated a wine business in Round Rock, Texas. Day Ventures had executed a lease (Lease) with landlord Capital City-Socrates, Ltd. On December 30, 2009, the Diazes sold Day Ventures to Gano, effecting the sale through a "Membership Interest Purchase Agreement" (Purchase Agreement), which transferred the Lease to Gano. That same day, in accordance with the terms of the Lease, the Diazes sent a letter to the landlord notifying it about the proposed assignment of the Lease. In the letter, Dimas Diaz agreed to continue the personal guaranty of performance under the Lease that he had executed when Day Ventures first entered the Lease in 2005. The letter was signed by Dimas Diaz on behalf of tenant Day Ventures, as transferor, and as guarantor; by Tracy Diaz, as transferor; and by Gano, as transferee. The Purchase Agreement contained the following provision relating to the guaranty in paragraph 6.5:

No Renewal of Shopping Center Lease Absent Termination of Sellers Guaranty. Purchaser and Day Ventures covenant with Sellers that following Closing, Day Ventures will not exercise its option to extend Day Ventures's existing shopping center lease for the premises at the Round Rock Crossing Center Suite 120, and Purchaser will not cause Day Ventures to extend such lease, without having previously obtained a release from the landlord of Sellers' existing guaranty of lease obligations in form acceptable to Sellers. The foregoing is a material condition to Sellers' decision to enter into the transactions contemplated herein and any breach of this covenant shall give Sellers the right to seek equitable relief against such extension without posting bond therefor.

         The Purchase Agreement also contained the following indemnity provision in paragraph 11.3:

Indemnity of Sellers. Subject to the terms and conditions of this Article 11, Purchaser and Day Ventures, jointly and severally, shall indemnify, defend and hold harmless Sellers and their respective officers, members, managers, employees, agents, affiliates, successors and assigns (the "Seller Indemnified Parties") from and against any and all Losses incurred by the Seller Indemnified Parties as a result of or arising out of: (a) any breach of any of the representations, warranties or covenants made by Purchaser or Day Ventures in this Agreement; (b) any Assumed Liability; or (c) the use of the Transferred Assets or operation of the Business subsequent to the Closing Date.

         Paragraph 2.3(d) of the Purchase Agreement defined "Assumed Liabilities" to include "the store lease."

         In February 2011, Gano, as owner of Day Ventures, and Round Rock Crossings, L.P., as successor in interest to landlord Capital City-Socrates, executed a "2nd Amendment" to the Lease, extending the term for one year.[1] Gano did not obtain a release or termination of Dimas Diaz's personal guaranty of Lease obligations from the landlord. In 2012, Gano executed a "3rd Amendment" to the Lease, extending the lease until January 2015. Gano again did not obtain a release or termination of Dimas Diaz's personal guaranty of lease obligations from the landlord. In 2012, according to the Diazes, or 2014, according to Gano, Gano sold Day Ventures and assigned the Lease to the new owners, who eventually closed the business and defaulted under the Lease. The landlord sued the new owners and Dimas Diaz, as guarantor. Dimas Diaz settled with the landlord and was nonsuited on June 4, 2015. The Diazes made demand on Gano for reimbursement of $5, 000 expended in defending and settling the new owner's suit against Dimas Diaz. When Gano did not offer reimbursement, the Diazes brought this suit against Gano, alleging that Gano breached the Purchase Agreement by failing to obtain a termination of the guaranty and by failing to indemnify Diaz.

         The parties both filed traditional motions for summary judgment and submitted evidence. In his motion, Gano did not dispute that the Diazes had established the elements of a breach of contract claim but contended that his affirmative defenses, including the defense that the claim was barred by the statute of limitations, defeated the claim for failure to terminate the guaranty. In their response and motion, the Diazes argued that Gano had failed to address their claim for breach of contract based on the indemnity provision and that they had shown that there was no genuine issue as to any material fact necessary to establish the elements of that claim. In his response, Gano contended that because the Diazes' claim for breach of contract based on his failure to terminate the guaranty was barred by the statute of limitations, their claim for breach of the indemnity provision was also barred. In separate orders, the trial court denied Gano's motion and granted the Diazes' motion without stating a basis in either order. The trial court then rendered final judgment, granting the Diazes' motion, denying Gano's motion, and awarding the Diazes $5, 000 in actual damages plus attorney's fees and contingent attorney's fees on appeal. Gano filed a motion for new trial that was overruled by operation of law and a second motion for new trial that appears to have been overruled by operation of law, as well. This appeal followed.


         We review a trial court's summary judgment de novo. Exxon Mobil Corp. v. Rincones, 520 S.W.3d 572, 579 (Tex. 2017) (citing Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005)). When the trial court does not specify the grounds for granting the motion, we must uphold the judgment if any of the grounds asserted in the motion and preserved for appellate review are meritorious. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 216 (Tex. 2003). To prevail on a summary judgment motion, the movant must demonstrate that there are no genuine issues of material fact and that it is entitled to judgment as a matter of law. Tex.R.Civ.P. 166a(c); Knott, 128 S.W.3d at 215-16. When both parties move for summary judgment on the same issues and the trial court grants one motion and denies the other, we ...

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