Branch Banking and Trust Company v. TCI Luna Ventures, LLC, Transcontintal Realty--Appeal from 192nd Judicial District Court of Dallas County (opinion )
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Reverse and Remand: Opinion Filed February 21, 2013. In The niirt nf Apprztk FiftI! J1itrirt nf cxzu tt 1a11a No. 05-I 2-00653-CV BRANCH BANKING AND TRUST COMPANY, Appellant V. TCI LUNA VENTURES, LLC AND TRANSCONTINENTAL REALTY INVESTORS, INC., Appellees On Appeal from the 192nd Judicial District Court Dallas County, Texas Trial Court Cause No. dc-12-03653 OPINION Bel ore Justices Francis, Murphy, and Evans Opinion by Justice Evans Branch l3anking and Trust Company appeals a temporary injunction order prohibiting it from foreclosing on two properties owned by TCI Luna Ventures, LLC. In a single issue, BB&T argues that the trial court abused its discretion when it granted the temporary injunction because TCI Luna failed to present evidence to support at least one of the elements necessary for the issuance of a temporary injunction. We conclude the trial court abused its discretion when it found that TCI Luna had shown a probable right on final trial to the relief sought for any of its causes of action. We reverse the trial court s order and dissolve the temporary injunction. BACKGRO U ND In June 2005, Transcontinental Realty Investors, Inc. executed a $10,000,000 promissory note payable to Colonial Bank that was secured by deeds of trust on twelve properties, inchiding the two that are the subject of the temporary injunction order (the Mansfield and Sheffield properties). In 2010, Colonial Bank assigned die note and deeds of trust to BB&T. Also in 2010, Transcontinental Realty assigned its interest in the secured properties to TCI Luna. TCI Luna did not pay off the note when it matured on September 29,2010, leaving an unpaid balance of $8,386,512. Failure to pay otT the balance of the note when it matured was an event of default, one remedy for which was foreclosure. BB&T foreclosed on three of TCI Luna s properties and sent notices of foreclosure for six more before TO Luna tiled for bankruptcy in September 2011. While in bankruptcy. TCI Luna and BB&T discussed TCI Luna voluntarily requesting a dismissal of its bankruptcy with prejudice, deeds in lieu of foreclosure for some properties in return for lien releases on other properties, and BB&T obtaining and delivering to TCI Luna appraisals on each property as part of BB&T s foreclosure on any property. The parties dispute whether or not they resolved the following issues before dismissal of TCI Luna s bankruptcy: how to handle any disagreement about the appraised value of a property; whether the foreclosure bid prices or the full appraised values would be used as the credits against the debt; and for which properties BB&T would accept deeds in lieu of foreclosure in exchange for releasing its lien on the other properties. After TCI Luna obtained a voluntary dismissal of its bankruptcy in January 2012, BB&T foreclosed on two properties and sent notices of foreclosure for four more properties including the Mansfield and Sheffield properties. TCI Luna responded by filing this suit in April 2012. In its petition, TCI Luna did not dispute the existence of the loan, the note, the unpaid debt, or the security liens on its properties, although it calculated the amount of debt it owed differently than BB&T. TCI Luna contended instead that the parties formed an enforceable agreement that Other than in the factual recitations in their briefs, the parties do not distinguish between Transcontinental Realty and TCI Luna which are related entities. We will refer to both as TCI Luna. 2 limited BB&T s right to toreclose on the properties in exchange for TCI Luna requesting a dismissal of its bankruptcy proceeding. TCI Luna also alleged that B13&T s promises made a part of the agreement constituted misrepresentations that were actionable as fraud, statutory real estate traud, and deceptive trade practices. In addition, TCI Luna argued that BB&T s previous foreclosures were wrongful and that foreclosing on the Mansfield and Sheffield properties would constitute tortious interference with existing contracts of sale to third parties. TCI requested, and the trial court granted, a temporary injunction preventing BB&T from foreclosing on the Mansfield and Sheffield properties. This interlocutory appeal followed. ANAIYSIS I, Standard of Review We review a trial court s order granting a temporary injunction for abuse of discretion. Walling v. Metcai, 863 S.W.2d 56, 57 (Tex. 1993). When conducting our evaluation, we do not substitute our judgment for that of the trial court, but determine only whether the court s action was so arbitrary as to exceed the bounds of reasonable discretion. See Motor C o., 84 S.W.3d 198, 204 (Tex. 2002). Butnaru v. Ford We draw all legitimate inferences from the evidence in the light most favorable to the trial court s ruling. Id. When the trial court bases its decision on conflicting evidence, there is no abuse of discretion. Id. However, the trial court abuses its discretion when it misapplies the law to established facts or when the evidence does not reasonably support the trial court s determination of the existence of a probable injury or a probable right of recovery. Id. at 211. We review de novo any determinations on questions of law that the trial court made in support of the order. Tom James of Dallas, Inc. v. Cobb, 109 S.W.3d 877, 883 (Tex. App. Dallas 2003, no pet.). A temporary injunction is an extraordinary remedy and will not issue as a matter of right. Butnaru, 84 S.W.3d at 204. Rather, an applicant must plead and prove: (1) a cause of action against the opposing party; (2) a probable right on final trial to the relief sought; and (3) a probable, imminent, and irreparable injury in the interim. Id.; Walling. 863 S.W.2d at 57. We first consider whether TCI L.una presented sufficient evidence of a probable right to recover on at least one of its causes of action. Even though we review an applicant s probable right of recovery, we do not reach the merits of the underlying dispute on interlocutory appeal and will not assume the evidence presented at the temporary injunction hearing will be the same as the evidence developed at a full trial on the merits. See Cobb, 109 S.W.3d at 884 85. H. Breach of Contract Claim TCI Luna argued and pleaded that in exchange for dismissal of the bankruptcy, BB&T promised to: (I) obtain and deliver to TCI Luna appraisals on the properties; (2) meet with Plaintifñ in good faith in an effort to determine and agree upon the fair market values of the properties : and (3) accept deeds in lieu of foreclosure on some of the properties in full satisfaction of the debt thereby allowing TCI Luna to keep other properties free and clear. TCI Luna further argued in its brief and pleaded that TCI Luna understood that they would receive full credit toward the Note for the fair market value of any properties foreclosed by BBT. BB&T contends TCI Luna s proof at the hearing on the temporary injunction did not support its argument and pleadings that an agreement was formed. TCI Luna s representative testified that, in exchange for TCI Luna moving for voluntary dismissal of its bankruptcy, BB&T agreed only to provide appraisals on the properties. As to the other alleged terms of agreement, under both direct and cross-examination, TCI Luna s representative consistenfly stated that: (l)the parties agreed to meet after dtcmLcsal of the banknsptcy to try to resolve disputes that might arise when appraised values were received; (2) the parties never discussed, or agreed to, the relation between the appraised value of the properties and the amount of credit against the -4- outstandInL loan balance upon foreclosure:- (3) the parties agreed to meet alter dismissal o/ i/ic bankruptcy and attempt to agree on whether some properties. . would go back to the bank, and some properties we would keep free and clear : and (4) there was no agreement before dismissal of the bankruptcy other than an agreement to meet in the future iii an effbrt to agree to terms of a contract. In addition to that testimony, the record contains an email from TUI Luna s counsel that the parties agreed to sit down and discuss in good faith this deal after the bankruptcy was dismissed. deal . . . BB&T s attorney s reply to this email confirmed that 813&l will discuss the and B13&T when ready is willing to work through the properties. The elements of a valid and enforceable contract are: (I) an otter: (2) an acceptance in strict compliance with the terms of the otter: (3) a meeting of the minds: (4) each party s consent to the terms: and (5) execution and delivery of the contract with the intent that it be mutual and binding. Hubbard v Shankle, 138 S.W.3d 474, 481 (Tex. App. Fort Worth 2004, pet. denied). The necessary elements of both written and oral contracts are the same and must be present for a contract to be binding. Id.A contract s material terms must be sufficiently definite and reasonably certain to both parties. [art Jfrorth Indep. Sc/i. Dist. v. Cite o/[ort Worth, 22 S.W.3d 831, 846 (Tex. 2000). Accordingly, all essential terms of the agreement must be agreed upon before a contract may be enforced by the courts. T. 0. Stanley Boot Co., Inc. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992). If the terms of an alleged contract are so indefinite that it is impossible lbr the courts to determine the rights and obligations of the parties, it is not an enforceable agreement. Shin-Con Dcv. Corp. v. l.P. Jnvs., Ltd., 270 S.W.3d 759, 765 (Tex. App. Dallas 2008, pet. denied). Parties may agree on some terms sufficient to create a contract, leaving other provisions for later negotiation. See Scott v. Ingle Bros. Pac., Inc., 489 TCI Luau s representative testified IC I Luna decided to rely- on section 5 1.003 of the property code rather than discuss this term with BB&T. S.W.2d 554. 555 fl cx. 1972); Ski River /)cv, lee. v. MeCu/Ir,, 167 S.W.3d 121, 133 ( lex. App. Waco 2005, pet. denied). When an agreement leaves material terms open for tuture adjustment and aereement that never occur, it constitutes an agreement to agree. Uort/i Inclep. Se/i. DisL. 22 S.W.3d at $46; Ski See h.r1 is not binding upon the parties and merely River, 167 S.W.3d at 134. 1313&T argues the testimony of TCI Luna s own representative and both parties counsel s emat Is established that there was no material term ot obligation on the part of BB&T to do anything. According to iC! Luna s representative, BB&T promised nothing other than continued negotiations of two subjects after dismissal of the bankruptcy: (1) disagreements about the valuations in future appraisal reports; and (2) a potential agreement to (Iced some properties to BB&T in exchange for BB&T s release of liens on other properties. As such, material terms were omitted from the alleged agreement rendering it unenfbrceable. See f iduciari Fin. Servs. of Sw., Inc. v Corilant Fin., L.P., 376 S.W.3d 253, 256 (Tex. App. Dallas 2012, pet. denied). This evidence proves an agreement to agree. not an enforceable contract. Accordingly, there was no flictual dispute for the trial court to resolve regarding formation of the alleged agreement. In the absence of any evidentiary support of an enforceable agreement, TCI Luna s breach of contract claim does not support the temporary injunction order. III. Fraud Claims BB&T argues that TC1 Luna failed to prove its claims of fraud and statutory fraud involving real estate. BB&T contends that TCI Luna simply alleged but failed to prove that BB&T s promises made as part of the alleged oral agreement between it and BB&T constituted misrepresentations made by BB&T to induce TCI Luna to request a dismissal of its bankruptcy and consent to the subsequent foreclosures. Common to both theories pleaded by TCI Luna is the requirement that there be a material, false, misrepresentation. See Formosa Plastics Corp. 6 USA v. Presidio Eng :c & Contractors. Inc.. 960 S.W.2d 41, 47 (Ta 1998) (elements of common law fraud include making material misrepresentation that was false); Texas Integrated Conveyor Siw., Inc. v. Innovative Convewr Concepts. Inc.. 300 S.W.3d 348. 366 (Tex. App. Dallas 2009, pet. denied) (elements of statutory fraud involving sale of real estate pursuant to section 27.01 of the Texas Business and Commerce Code include making false representation of a past or existing material fact or false and material promise to do an act with the intention of not fulfilling it). The record here shows that the parties never finalized terms of an agreement but only agreed to continue negotiations after the bankruptcy was dismissed. TCL Luna does not accuse BB&T of failing and refusing to continue negotiations of contractual terms after the bankruptcy was dismissed, nor is there any evidence of such conduct in the record. Because there was no evidence presented at the temporary injunction hearing of an actionable misrepresentation, TCI Luna s fraud and statutory fraud claims cannot support the temporary injunction order. 1V. DTPA TCI Luna supported the request for temporary injunction in the trial court with a claim under the Deceptive Trade Practices Act See TEX. Bus. & COM. CODE ANN. § 17A1-.63 etseq., (West 2011 & Supp. 2012). BB&T argues that TCI Luna s DTPA claims arise from a loan of money which is not a service under the DTPA. See, e.g., La Sara Grain Co. v. First NaL Bank ofMercedes, 673 S.W.2d 558, 566 (Tex. 1984); Riverside Nat 1 Bank v. Lewis, 603 S.W.2d 169 (Tex.1980). If the loan is not a service, BB&T argues, then TCI Luna cannot be a consume? as defined under and required by the DTPA. See TEX. Bus. & COM. CODE ANN. § 17.45(4), (10). Both arguments are correct. The DTPA claims cannot support the temporary injunction. 7 V. Wrongful Foreclosure Claims B13&T contends that TCI Luna cannot prevail on its wrongful foreclosure claims. UI Luna argued to the trial court that BB&T (I ) induced TCI Luna to consent to foreclosures with fraudulent statements. (2) used the bid price as the credit for each foreclosure sale instead of the appraised, fair market value, (3) fbreclosed on properties after TCI Luna cured its defaults, and (4) failed to provide notices of default and acceleration before foreclosure. Our disposition above of TCI Luna s claims for breach of contract, fraud, and DTPA also resolves TCI Luna s wrongful fbreclosure claim based on fraudulent inducement because the alleged fraudulent statements TCI Luna asserts it relied upon are the same alleged misrepresentations we have already concluded are not actionable. We consider here BB&T s other arguments related to TCI Luna s wrongful foreclosure arguments to the trial court. A. Credit for Fair Market Value or Foreclosure Bid Prices TCI Luna argues as a factual matter, pleaded, and sought to prove at the hearing that the correct calculation of its debt should be done using the fair market values of the foreclosed properties as credits to the balance owed on the note, rather than the prices actually paid at the foreclosure sale. By recalculating the several foreclosure sales that had already occurred based on appraised fair market values, TCI Luna argued and alleged that the amount it owed on the note was substantially reduced by the time of the temporary injunction hearing. At the hearing, ICI Luna s representative testified that section 5 1.003 of the property code entitled it to receive credit for the appraised, fair market value of each property, rather than the cash or credit amount bid at the foreclosure sale. TCI Luna then argued that the greatly reduced amount of the debt 3 TCI Luna did not specify a claim under section 5 1 .003 in its pleadings; however its factual statement made these allegations without specific reference to section 51.003. ICI Luna s wrongful foreclosure count incorporated those allegations by reference. BB&T does not complain on appeal about TCI Luna s pleading and after being served with the amended petition did not object to the testimony at the hearing specifically connecting justified enjoining foreclosure of the Mansfield and Sheffield properties that were allegedly worth fhr more than the debt TCI Luna stated it owed. 1 BB&T argued below and here that Section 5 I .003 of the Texas Property (ode addresses deficiency judgments and is not applicable to this lawsuit. Subsection (a) of 51.003 defines a deficiency suit as an action brought to recover the deficiency between the bid price at a foreclosure sale and the amount of the debt owed on a note. Tnx. PROP. CoDE ANN. (West 20007). 5 1.003(a) Subsection (b) specifically provides that requesting a court to determine fair market value is a defense for reducing liability liar a deficiency judgment, stating: Any person against whom such a recovery is sought by motion may request that the court in which the action is pending determine the fair market value of the real property as of the date of the threclosure sale. Id. BB&T argues that the phrase. Thgainst whom such a recovery is sought, has no other reference than an action brought to recover the deficiency in subsection (a). We agree. The statute is clear on this matter. See Interstate 35/Chisain Rd., L.i. v. Moayedi, 377 S.W.3d 791, 797 (Tex. App. Dallas 2012. pet. filed) ( Section 51.003 was designed to protect borrowers and guarantors in deficiency suits brought following the non judicial foreclosure on realty. ); Coiniskey v. FH Partners, LLC, 373 S.W.3d 620, 643 (Tex. App.Houston [14th Dist.] 2012, pet. denied) (declining to apply section 5 1.003 to a declaratory judgment action). In this case, BB&T has not sued i,CI Luna for a deficiency judgment. We have not found, and TCI Luna does not cite, any Opinion holding that section 5 1.003 provides an affirmative cause of action against a creditor by a debtor who has not been sued for a deficiency the calculation \vith section 5 1 .003. Accordingly, we address the statute Luna s wrongful Ibreclosure theory of recovery. to the extent it is incorporated into TO TCI Luna extends this argument in its brief to assert that a foreclosure sate that occurred after the temporary injunction order was signed resulted in lull repayment of the debt if the debt is calculated using section 5 1.003. This evidence was not before the trial court and is contested by BB&T, We do not have jurisdiction to take new evidence and make findings of facts. See Wisdom v. Smith, 209 S,W.2d 164, 166 (Tex. 1948). Accordingly we do not consider TCI Luna s arguments that are outside the temporary injunction hearing record. 9 judgment, iven it we construe TCI Li i sargument as asserting that there is confusion about the amount owed. that is not a suftcient reason to enjoin t;reciosure. CintIicr-Da is Cir., Ltd. IJ()ILVIUI7 . Vat Ba,ik. 60() S.W.2d 856. 864 (Tex. Civ. App. Fiouston fist Dist. I 980, writ ref d n.r.c.) ( appellants claimed eonfusion concerning the amount of the payment required to avoid foreclosure is not in itself grounds for an mjunetion. ). As BB&T points out. merely that the sale may not bring the best price is not a basis to enjoin a foreclosure sale. See Floore v. Morgan, 175 S.W. 737, 739 (Tex. Civ. App. -Fort Worth 1915, no writ). TCI Luna did not respond to BB&T s arguments that TCI Luna has not shown any facts or law justifying the use of any credit to the balance owed on the note other than the cash or credit bid price at each foreclosure sale. Accordingly, TC l [.una s debt recalculation arguments under section 5 1.003 do not support the temporary injunction. B. Other Grounds for Wrongful Foreclosure BB&T contends TO Luna s other bases for claiming wrongful foreclosure are each precluded by the terms of the note and deeds of trust. TCI Luna s argument that it cured pre maturity default so there was no default justifying BB&T s foreclosures is inapplicable to the temporary injunction order, which prohibits the foreclosure sales based on post-maturity non payment of the note. Although TCI Luna claims the foreclosures were wrongful due to lack of notices of default and acceleration, it failed to put on any evidence that notice was required. Instead, BB&T argues and the evidence shows, TCI Luna waived all such notices. See Adams v. First Nat7 Bank of BelIs/Savov, 154 S.W.3d 859, 867 (Tex. App. Dallas 2005, no pet.) (waiver of notice of default permissible). Moreover, the default BB&T sought to remedy by foreclosure was that the note had i natured and not been paid which did not require notice. See Deposit Ins. Bridge Bank. NA. v. McQueen, 804 S.W.2d 264, 267 (Tex. App Houston [1st Dist.] 1991, no writ) (notice of acceleration not required when note matures on its own terms). Finally, there is no evidence in the record to support TCI Luna s contention that HB&T is obligated to obtain its consent to ftrcclosure As BB&i argues. the note and deeds of trust did not obligate BB&T to obtain ifi L una s consent to loreclosure or provide notice ol lhreclosure. Moreover, we have concluded above the parties did not enter into an enlorceable agreement restricting BB&T s rights to loreclose. Because B B&T demonstrated that 1CI I .una (lid not establish a probable right to recover on its wrongful foreclosure claims, the temporary injunction order is not supportable on this basis. VI. lortious Interference with Existing Contracts Lastly. TCI Luna justilied its temporary inlunction request to the trial court as necessary to avoid BB&T s tortious interference with TCI Luna s contracts to sell the Mansfield and Sheffield properties to two separate buyers. BB&T correctly argues that bona lide exercise of ones own contractual rights constitutes a privilege to interfere with another s contract. See Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690-91 (Tex. 1989). Having concluded there was no evidence to substantiate the conclusion that BB&T s foreclosures were wrongfhl, breached any agreement, or operated a fraud on TCI Luna, BB&T was within its rights to proceed with the foreclosure sales. Additionally, TC1 Luna failed to bring forward any evidence at the temporary injunction hearing that the foreclosure sales would be independently tortious, further negating the trial court s reliance on TCI Luna s tortious interference claim to justify the temporary injunction order. See Ginther-Davis, 600 S.W.2d at 861 (no automatic right to an injunction even if foreclosure might interfere with a sale of the property). As argued by BB&T, the evidence presented at the temporary injunction hearing could not support a finding that TC1 Luna had a probable right of recovery on its claim for tortious interference with an existing contract. Accordingly. this cause of action cannot support the issuance of the temporary injunction order. ii ______ CUNC LUS ION Having concluded that the record provides neither a factual or legal basis for the trial court s finding that TC1 Luna had shown a probable right of recovery on final trial on any of its claims, we do not reach the remainder ol BB&T s arguments. We resolve BB&T s sole issue in its favor and conclude the trial court abused its discretion by granting the temporary injunction. We reverse the trial court s temporary injunction order, dissolve the temporary injunction, and remand the case to the trial court for further proceedings. 120653F.P05 I 2 (!nurt uf iI.TEa1:i Fift1! Uitrirt uf rxai at Jat1zt JUDGMENT BRANCH BANKING AND TRUST COMPANY, Appellant No. 05-12M0653-CV On Appeal from the 192nd Judicial District Court, Dallas County, Texas Trial Court Cause No, dc-I2-03653. Opinion delivered b Justice Evans. Justices Francis and Murphy participating. TCI LUNA VENTURES, LLC and TRANSCONTINTAL REALTY. ppe11ees in accordance with this Court s opinion of this date, we REVERSE the temporary injunction order of the trial court, DISSOLVE the temporary injunction, and REMAND the case to the trial court for further proceedings. It is ORDERED that appellant Branch Banking and Trust Company recover its costs of this appeal from appellees TCI Luna Ventures, LLC and iranscontinental Realty Investors. Inc. J ucigment entered this February 2 1. 2013. DA JUSTICE ANS
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