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Sanati v. Arab

Court of Appeals of Texas, First District

July 2, 2019


          On Appeal from the County Civil Court at Law No. 1 Harris County, Texas Trial Court Case No. 1091270

          Panel consists of Justices Lloyd, Kelly, and Hightower.



         Appellee Kamran Arab N/K/A Kamran Armani Azar ("Kamran") sued appellant Masoud Sanati for $50, 000, the principal amount due on a promissory note. Sanati maintained that the case was more complicated than a typical suit on a promissory note because the men had known each other for decades and had been involved in other business ventures. Sanati pleaded the affirmative defense of offset, arguing that he had made excess monthly payments to Kamran related to the $50, 000 promissory note and that the overpayment should have been applied to the principal indebtedness. Sanati also asserted counterclaims for breach of contract, quantum meruit, and fraud, all relating to other alleged dealings between the men. The trial court granted summary judgment in favor of Kamran, and Sanati appealed.

         Sanati raises three issues on appeal, arguing that the trial court erred by granting traditional summary judgment on Kamran's claim (issues 1 and 2), and that the court erred by granting a no evidence summary judgment as to his counterclaims (issue 3).

         We reverse the trial court's summary judgment for Kamran because Sanati's summary judgment evidence raised a genuine question of material fact on his affirmative defense of offset. We affirm the trial court's no evidence summary judgment on Sanati's counterclaims because his summary judgment evidence did not support each element of each cause of action.


         Sanati and Kamran had been acquainted for 40 years in 2012, when Kamran transferred $50, 000 to Sanati. According to the terms of a promissory note dated May 20, 2012, the $50, 000 was a one-year loan from Sanati's "old friend" Kamran to be used in his "business venture." The promissory note required Sanati to pay $475 in monthly interest payments for twelve months and a balloon payment of the principal amount of the loan, $50, 000, on May 19, 2013. Sanati is identified as the borrower in the signature block, which also identified two witnesses and provided spaces for their signatures.

         Sanati began making $475 monthly payments in June 2012. These monthly payments continued through February 2017, but Sanati did not make a lump sum payment of $50, 000. In March 2017, Kamran sued Sanati for breach of contract, breach of implied contract, and unjust enrichment. Kamran also sought attorney's fees and pre- and post-judgment interest.

         Sanati answered, pro se, with a general denial and verified denials, specifically denying that he had signed the promissory note and that there was no consideration for the note. Sanati also pleaded the following affirmative defenses: (1) official mistake; (2) election of remedies; (3) res judicata and collateral estoppel; (4) statute of limitations and laches; (5) offset; (6) offset by counterclaim; (7) waiver; and (8) accord and satisfaction.

         In September 2017, Kamran filed a traditional motion for summary judgment on his claims. His summary judgment evidence included his affidavit and an unsigned copy of the promissory note. The trial court did not rule on this motion for summary judgment, and in November, Sanati filed counterclaims for breach of contract, fraud, and quantum meruit.

         Sanati alleged that in May 2012, Kamran asked him for assistance in making investments of at least $500, 000 in the United States so that he could qualify for permanent residency. Sanati maintained that he offered Kamran an opportunity to buy his 50% interest in a restaurant and negotiated with his partner to allow the sale to proceed. However, the sale did not proceed because, according to Sanati, Kamran "insisted on a 51% interest for no additional consideration."

         Sanati also alleged that he offered Kamran a real estate investment opportunity. Sanati stated that he owned a building company that had successfully developed unimproved property into profitable residential units. He averred that he found an unimproved parcel of land on Anita Street in Houston, and he offered to develop it into three townhouses and share the profit with Kamran. Sanati alleged that Kamran paid for the land by giving his brother Kambiz Aubon money to pay for it. Kambiz then acquired the property in the name of Aubon Property, an entity created by Kambiz's daughter, Delara Aubon, for the purpose of the project. According to Sanati, Kambiz and Delara "represented themselves as agents" for Kamran. Sanati alleged that after he had expended time and money on preliminary development work, Kamran decided not to proceed. He alleged a lost opportunity of approximately $78, 000.

         In January 2018, Kamran filed another traditional motion for summary judgment as to his claims and a no evidence motion for summary judgment as to Sanati's counterclaims. His summary judgment evidence consisted of: (1) his affidavit, in which he averred that Sanati had not made the $50, 000 balloon payment that was due in April 2013 and that after "allowing all offsets, credits, and payments, there is due and owing to me on the contract $50, 000.000 plus interest;" (2) a signed copy of the May 2012 promissory note; (3) an email chain from May 2012 regarding Sanati's receipt of the money; (4) bank records showing the monthly $475 payments that Sanati made from June 2012 ...

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