Helen Austin and John Bennett White, IV v. Michael W. Mitchell ( 2018 )

ACCEPTED
05-18-00052-CV
FIFTH COURT OF APPEALS
DALLAS, TEXAS
3/26/2018 6:09 PM
LISA MATZ
CLERK
No. 05-18-00052-CV
FILED IN
5th COURT OF APPEALS
In the Fifth Court of Appeals DALLAS, TEXAS
3/26/2018 6:09:20 PM
LISA MATZ
Clerk
HELEN AUSTIN AND JOHN BENNETT WHITE, IV,
Appellants,
v.
MICHAEL W. MITCHELL,
Appellee.
On Appeal from Cause No. DC-17-17574
th
14 Judicial District Court, Dallas County, Texas
Hon. Eric V. Moyé, Judge Presiding
REPLY BRIEF OF APPELLANTS
J. Bennett White
Texas Bar No. 21309800
jbw@jbwlawfirm.com
J. BENNETT WHITE, P.C.
P. O. Box 6250
Tyler, Texas 75711
903-597-4300 Telephone
903-597-4330 Facsimile
COUNSEL FOR APPELLANTS
Oral Argument Requested
TO THE HONORABLE FIFTH COURT OF APPEALS:
The temporary injunction granted by the trial court suffers from many
infirmities:
First, there is no likelihood that Mitchell has a viable cause of action against
Austin.
Second, any injury sustained by Mitchell is compensable in damages.
Third, the evidence conclusively establishes the lack of an excessive demand
and the lack of an effective tender.
Fourth, the trial court has impermissibly modified the parties’ contracts by
incorporating the “arbitrator’s” findings and award.
These issues of great importance to every trial lawyer and commercial
enterprise arise in the following context.
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TABLE OF CONTENTS
Table of Contents................................................................................................................. 3
Table of Authorities ............................................................................................................. 4
Statement of Facts ............................................................................................................... 5
Brief of the Argument.......................................................................................................... 6
I.  Mitchell Never Tendered the Just Amount Owed .............................................. 6
II.  Mitchell Insists on Misreading the Parties’ Contracts ........................................ 7
III.  Arbitration Hearing No Basis for Relief ........................................................... 10
IV.  Mitchell Has No Evidence To Support His Contentions .................................. 11
A.  Tender ....................................................................................................... 11
B.  Excessive Demand .................................................................................... 11
Conclusion and Prayer ....................................................................................................... 13
Certificate of Compliance.................................................................................................. 14
Certificate of Service ......................................................................................................... 15
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TABLE OF AUTHORITIES
Cases
Baucum v. Great Am. Ins. Co. of New York, 370 S.W.2d 863 (Tex. 1963) .................................... 6
Branch Banking & Trust Co. v. TCI Luna Ventures, LLC, No. 05-12-00653-CV, slip op.
(Tex. App. – Dallas 2013, no pet.) ......................................................................................... 7, 9
Findlay v. Cave, 611 S.W.2d 57 (Tex. 1981) ............................................................................... 13
Staff Indus., Inc. v. Hallmark Contracting, Inc., 846 S.W.2d 542 (Tex. App. – Corpus
Christi 1993, no writ) ................................................................................................................. 6
Stewart Beach Condo. Homeowners Ass’n, Inc. v. Gili N Prop Invs, LLC, 481 S.W.3d
336 (Tex. App. – Houston [1st Dist.] 2015, no pet.) ................................................................ 12
Rules
TEX. R. APP. P. 38.1(g).................................................................................................................... 5
TEX. R. CIV. P. 9.4(i)(2)(C) ........................................................................................................... 14
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STATEMENT OF FACTS
Mitchell does not contradict any facts stated by Austin. TEX. R. APP. P.
38.1(g).
Related Proceeding and Stay
Austin’s principal brief asserts as a fact the existence of the previous stay
order of this Court in Case No. 05-17-01309-CV. In the interim, this Court has
clarified the order staying proceedings below by its March 7, 2018 order in Case
No. 05-17-01309-CV. Given this Court’s clarification of the ongoing stay of
proceedings below, Austin withdraws her argument that the December 21, 2017
arbitration hearing were barred by this Court’s November 16, 2017 stay order.
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BRIEF OF THE ARGUMENT
I. Mitchell Never Tendered the Just Amount Owed
Mitchell makes no attempt to dispute the legal requirement of tender as a
prerequisite to seeking injunctive relief against a foreclosure sale. See Appellee’s
Brief, pp. 9-14. Instead, Mitchell insists the injunction was supported by evidence
he tendered the just amount owed. See Appellee’s Brief, p. 2 (“undisputed
evidence”), p. 9 (“has tendered full payment”), p. 10 (“has tendered payment”), p.
17 (“valid tender of payment”). However, at no place does Mitchell cite to any
evidence that he made “an unconditional offer to pay the amount due.” Baucum v.
Great Am. Ins. Co. of New York, 370 S.W.2d 863, 866 (Tex. 1963); Staff Indus.,
Inc. v. Hallmark Contracting, Inc., 846 S.W.2d 542, 548-49 (Tex. App. – Corpus
Christi 1993, no writ). The evidence conclusively established that the only way for
Austin to receive payment of even the undisputed portion of the debt was to accept
conditions not contained in the note or deed of trust. RR vol. 1, p. 22:16-20; p.
26:3-7. Even Mitchell concedes Conner altered the parties’ deed of trust. See
Appellee’s Brief, p. 5 (“… in accord with the process established in the
Arbitrator’s Findings and Award”). There was not an unconditional offer as
required by law and Mitchell makes no attempt to argue otherwise
As a form of confession and avoidance, Mitchell contends he has “tendered”
the amount owed through a contrived and altered definition of tender. Mitchell
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relies solely on Conner’s alteration of the promissory note and deed of trust,
insisting that Conner had the authority to allow Mitchell to make what would
amount to a “conditional tender,” a completely absurd result. See Appellee’s
Brief, p. 5. Under the terms of the promissory note, Mitchell is obligated to pay
Austin the amount agreed without any further action on her part. There is no
provision in a typical promissory note to allow the borrower to withhold payment
pending a pre-receipt commitment of acceptance from the seller. The borrower is
obligated to tender the correct amount owed, and the lender is obligated to accept a
correct tender – in that order. Even in the face of disagreement from the lender,
the borrower bears the responsibility of tendering the correct amount.
Without tender, there is no basis to enjoin foreclosure. Since the evidence
conclusively establishes the absence of sufficient tender, the trial court’s injunction
should be reversed and vacated.
II. Mitchell Insists on Misreading the Parties’ Contracts
In her principal brief, Austin cited to numerous examples where the parties’
contracts were being misconstrued or misapplied. As noted below, there can be no
probable right of recovery for a claim based on the incorrect interpretation of a
contract. Branch Banking & Trust Co. v. TCI Luna Ventures, LLC, No. 05-12-
00653-CV, slip op. at 6 (Tex. App. – Dallas 2013, no pet.).
First, Austin demonstrated how a correct interpretation of the arbitration
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provision in the divorce Decree, as a matter of law, does not extend to the claims
before the trial court. See Appellant’s Brief, pp. 21-26. Mitchell deflects the
argument, characterizing this as an ancillary matter. See Appellee’s Brief, p. 17.
Second, Austin demonstrated that Mitchell’s claim is predicated on an
interpretation of the deed of trust that would bar Austin from demanding attorney’s
fees incurred while collecting amounts due under the promissory note, along with
fees incurred while enforcing the deed of trust. See Appellant’s Brief, pp. 18-20.
Mitchell counters by claiming that the deed of trust lien has been rendered void by
Mitchell’s tender. See Appellee’s Brief, p. 10. Mitchell cites no authority for this
contention. Further, Mitchell seems to overlook that the very language he quotes
from the deed of trust requires payment of the note “… and all other amounts
secured by this deed of trust.” See Appellee’s Brief, p. 10. Mitchell’s argument
ignores that the deed of trust secures “other amounts.” RR Ex. 3, p. 2.
Beyond that, Mitchell’s asserted causes of action reflect an incorrect
understanding of the respective roles of the parties in conjunction with foreclosure
of the deed of trust lien. The trustee’s role is to conduct the foreclosure sale when
instructed by the lender. The trustee is obligated to proceed with the sale, unless
and until the borrower remits payment. Once the borrower tenders payment in the
amount demanded by the trustee, the trustee is obligated to cancel the sale;
however, the trustee holds no lien to release and has no authority to release the
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lender’s lien. The lender’s obligation to return the paid note and to release its lien
does not materialize until payment is made. Mitchell attempts to alter that
arrangement to require that Austin agree with the correctness of his tender in order
to receive payment. Mitchell alleges that Austin has breached her obligation to
him under the deed of trust even though no money has actually been paid to her.
See Appellee’s Brief, p. 10.
There is no probability for such a claim to prevail. Were Mitchell to actually
make an unconditional tender of the amount he deemed to be the correct amount
and Austin were to accept that amount, but not release her lien, then Mitchell could
claim that Austin was in breach by not releasing her lien. However, for him to do
so without actually remitting payment is to bring a nonexistent claim.
Mitchell’s brief makes no argument as to how the language of the note and
deed of trust limit Austin to only recovering attorney’s fees for the foreclosure
process.
Each incorrect contract interpretation accepted by the trial court amounts to
legal error. Mitchell does not dispute that the trial court abuses its discretion where
it grants injunctive relief on an erroneous contract interpretation. Branch Banking,
No. 05-12-00653-CV, slip op. at 6.
A correct interpretation of the arbitration provision in the divorce Decree
does not cover the claims brought by Mitchell within its scope. Accordingly,
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Conner’s December 21, 2017 hearing was not authorized by the parties and the
trial court abused its discretion by relying on that proceeding in its Order.
A correct interpretation of the promissory note and deed of trust does not
require that Austin agree to accept the amount offered in order to receive payment.
There is no probability that Mitchell could recover on his breach of contract and
declaratory judgment claims. In the absence of a probable right of recover, the
trial court abused its discretion by enjoining Austin from foreclosure. Therefore,
the injunction should be vacated and reversed.
III. Arbitration Hearing No Basis for Relief
The lynchpin of Mitchell’s entire position is his insistence that the parties
are bound by Conner’s December 21, 2017 findings. In her brief, Austin not only
asserted that Mitchell was misconstruing the arbitration provision in the Decree,
but also that the evidence conclusively established that Conner’s hearing was not
conducted in conformity with the Decree. See Appellant’s Brief, pp. 27-28.
Mitchell does not address this argument in his brief.
Austin points out that the trial court’s willingness to adopt Conner’s findings
conflicts with the court’s own assertion that it was not going to replicate
proceedings in the divorce court. See Appellant’s Brief, pp. 21-22. Similary,
Mitchell cites to the same comments by the trial court. See Appellee’s Brief, pp.
17-18. Yet, while Austin cites to the inconsistency between the court’s statement
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and its Order, Mitchell suggests the trial court deemed certain aspects of Austin
appeal as beyond review. Similarly, Mitchell insists that Conner’s findings are
binding on the trial court and are not capable of review. See Appellee’s Brief, p.
19. Mitchell cites no authority and makes no argument to explain how this view
would begin to pass muster under a due process analysis. Mitchell also ignores
that there is no confirmed arbitration award and that the award is unenforceable
until confirmed.
The trial court abused its discretion by incorporating Conner’s arbitration
award into its Order. Therefore, the injunction should be vacated and reversed.
IV. Mitchell Has No Evidence To Support His Contentions
A. Tender
As discussed above, Mitchell presented no evidence of legally sufficient
tender.
B. Excessive Demand
Mitchell argues there was evidence of excessive demand; however, Mitchell
fails to identify that evidence. See Appellee’s Brief, pp. 10-13. Mitchell simply
argues as if the amount sought is facially and inherently excessive. See Appellee’s
Brief, p. 10. In doing so, Mitchell ignores the difference between evidence and
argument of counsel. Mitchell also ignores that it was his burden to present
sufficient evidence of an excessive demand; it was not Austin’s burden to prove
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the fees sought were reasonable. Stewart Beach Condo. Homeowners Ass’n, Inc. v.
Gili N Prop Invs, LLC, 481 S.W.3d 336, 346 (Tex. App. – Houston [1st Dist.]
2015, no pet.) (probable right of recovery required some evidence by homeowners
in support of excessive demand claim).
Instead, Mitchell places great emphasis on the injunction against foreclosure
granted the property owners in Stewart Beach. See Appellee’s Brief, pp. 13-14,
citing Stewart Beach, 481 S.W.3d at 341. In this regard, Mitchell ignores
fundamental distinctions between the evidence in Stewart Beach and the evidence
here.
In Stewart Beach, the property owners supported their allegation of
excessive demand with testimony that the attorney’s fees demanded by the lender
were “’clearly excessive,’ not ‘reasonable,’ and ‘unconscionable’.” See Stewart
Beach, 481 S.W.3d at 348 (expert testimony required if attorney’s fees disputed).
Mitchell presented no such evidence. See Stewart Beach, 481 S.W.3d at 347
(expert testimony required if attorney’s fees disputed). Further, the undisputed
expert testimony concerning Austin’s attorney’s fees is that the fees were
reasonable and not excessive. RR vol. 1, p. 28:6-16; pp. 29:5 – 30:5. Conversely,
in Stewart Beach, the lender failed to introduce expert opinion testimony that its
fees were reasonable. Stewart Beach, 481 S.W.3d at 347.
Mitchell notes that the homeowners in Stewart Beach presented evidence of
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excessive demand. See Appellee’s Brief, pp. 14. However, Mitchell fails to note
(a) the absence of any such evidence here, and (b) the undisputed presentation of
expert testimony to the contrary.
Therefore, the nature of the evidence in the record here is in direct contrast
to that in Stewart Beach. While the homeowners in Stewart Beach carried their
burden with expert testimony, Mitchell provided no such evidence. While the
lienholder in Stewart Beach presented no evidence that its attorney’s fees were
reasonable, Austin supported the attorney’s fees demanded with competent expert
testimony. RR vol. 1, p. 28:6-16; pp. 29:5 – 30:5. Finally, Mitchell attempts to
equate a “less than full recovery” with “excessive,” which is plainly not the law.
See Appellee’s Brief, p. 11; See Findlay v. Cave, 611 S.W.2d 57, 58 (Tex. 1981).
In the absence of evidence of an excessive demand, Mitchell has no excuse
not to tender the entire payoff amount demanded by Austin. Since Mitchell had no
such evidence, the trial court abused its discretion by enjoining Austin’s
foreclosure sale. Thus, the injunction should be vacated and reversed.
CONCLUSION AND PRAYER
Austin prays that upon consideration of this matter that the Court sustain her
various issues in opposition to the temporary injunction. Accordingly, Austin
requests that the preliminary injunction be reversed, vacated, and set aside. Austin
requests that she be rendered all relief capable of rendition. For all relief that
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cannot be rendered, Austin requests the matter be remanded with instructions for
further proceedings in the court below.
Austin also prays for all other and further relief to which she may be justly
entitled. Austin also requests general relief.
RESPECTFULLY SUBMITTED,
J. BENNETT WHITE, P.C.
P.O. Box 6250
Tyler, Texas 75711-7339
Telephone: (903) 597-4300
Telecopier: (903) 597-4330
___________________________
J. BENNETT WHITE
jbw@jbwlawfirm.com
State Bar No. 21309800
CERTIFICATE OF COMPLIANCE
I certify that this Brief of Appellants includes 2,284 words and thus complies
with the TEX. R. CIV. P. 9.4(i)(2)(C).
___________________________
J. BENNETT WHITE
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CERTIFICATE OF SERVICE
I certify that on March 26, 2018, I served a copy of this Brief of Appellants
on the parties listed below by electronic service. My e-mail address is
jbw@jbwlawfirm.com.
Jeffrey Cook
Sullivan & Cook
600 E. Las Colinas Blvd., Suite 1300
Irving, Texas 75039
jcook@sullivancook.com
Attorney for Michael Mitchell, Appellee
J. BENNETT WHITE
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