Opinion
NO. 01-20-00409-CV
03-23-2021
KC PHARMACY, LLC AND OSAMAH M. YACOUB, Appellants v. JPMORGAN CHASE BANK, N.A., Appellee
On Appeal from the 61st District Court Harris County, Texas
Trial Court Case No. 2019-36849
MEMORANDUM OPINION
Appellants, KC Pharmacy, LLC ("KC") and Osamah M. Yacoub ("Yacoub"), challenge the trial court's summary judgment in favor of appellee, JPMorgan Chase Bank, N.A. ("Chase"), in Chase's suit against KC for breach of contract and against Yacoub for breach of a guaranty agreement. In two issues, with evidentiary sub-points, appellants contend that the trial court erred in granting summary judgment and in awarding attorney's fees.
We affirm.
Background
On August 31, 2018, Chase and KC executed a "Line of Credit Note" and "Credit Agreement" (collectively, the "Contract"), pursuant to which Chase loaned KC $360,000.00 to fund inventory and equipment for KC's pharmacy operations. Chase and Yacoub also executed a "Continuing Guaranty" ("Guaranty"), pursuant to which Yacoub guaranteed payment of all principal, interest, and fees under the Contract. Subsequently, KC failed to pay the loan in accordance with the terms of the Contract. Chase notified KC and Yacoub of the default and of its acceleration of the maturity of the note. After KC failed to pay, and Yacoub failed to cure the non-payment, Chase brought breach-of-contract claims against KC and Yacoub.
KC and Yacoub answered, generally denying the allegations and asserting that Chase failed to apply all offsets, to provide an accounting, and to demand payment.
Chase filed a motion for summary judgment, arguing that it was entitled to judgment as a matter of law on its claims against KC and Yacoub because there were no genuine issues of material fact. Chase asserted that its summary-judgment evidence established that it provided KC with a business line of credit and that KC agreed to make payments to Chase in accordance with the terms of the Contract. However, KC breached the Contract by failing to pay as agreed. And, after Chase demanded payment and KC failed or refused to pay, Chase accelerated the maturity of the note. Chase asserted damages based on KC's breach in the amount of $354,070.00, plus interest and fees. Chase also argued that it was entitled to judgment as a matter of law against Yacoub because he unconditionally guaranteed payment of the Contract and failed, after notice, to cure the non-payment.
To its "Amended Motion for Summary Judgment," Chase appended a copy of the Contract, in which Chase agreed to provide KC with a business line of credit of $360,000.00 and that KC agreed to make monthly payments beginning on October 1, 2018. The Contract provided that a failure to pay as agreed constituted a default and allowed Chase to accelerate the maturity of the note without notice or demand, as follows:
7.1 Events of Default/Acceleration. If any of the following events occurs, the Note shall become due immediately, without notice, at [Chase's] option, and [KC] hereby waives notice of intent to accelerate the maturity of the Note and notice of acceleration of the Note . . . :
A. Any Obligor fails to pay when due any of the Liabilities . . . .
. . . .
7.2 Remedies. At any time after the occurrence of a default, [Chase] may do one or more of the following: . . . (b) terminate any commitment of [Chase] evidenced by the Note; (c) declare the Note . . . to be immediately due and payable, without notice of acceleration, intention to accelerate, presentment and demand or protest or notice of any kind, all of which are hereby expressly waived[.] . . .
The Contract also provided that, in the event of a default, KC agreed to waive any right to require Chase to proceed against any collateral prior to enforcement of its rights against KC:
8.16 Waivers. To the maximum extent not prohibited by applicable Legal Requirements, each Obligor waives (a) any right to receive notice of the following matters before [Chase] enforces any of its rights: (i) any demand, diligence, presentment, dishonor and protest, or (ii) any action that [Chase] takes regarding any Person, any Collateral, or any of the Liabilities that might be entitled to by law or under any other agreement; (b) any right to require [Chase] to proceed against . . . any Collateral . . . .
Further, the Contract contained an integration clause, as follows:
THIS NOTE AND THE OTHER RELATED DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Chase also presented a copy of the Guaranty, which provided that Yacoub unconditionally guaranteed KC's payment of the loan:
. . . . Guarantor [Yacoub] absolutely and unconditionally guarantees to [Chase] the performance of and full and prompt payment of the Liabilities when due, whether at stated maturity, by acceleration or otherwise. . . . [Yacoub] will not only pay the Liabilities, but will also reimburse [Chase] for any fees, charges, costs and expenses, including reasonable and necessary attorneys' fees . . . and court costs, that [Chase] may pay in collecting from [KC] or [Yacoub] and for liquidating any Collateral. . . .
. . . .
Nature of Guaranty. This Guaranty is an absolute guaranty of payment and performance and not of collection. Therefore, [Chase] may insist
that the Guarantor [Yacoub] pay immediately, and [Chase] is not required to attempt to collect first from the Borrower, the Collateral, or any other person . . . .
In addition, Yacoub, as guarantor, "waived":
2. Any right [Yacoub] may have to receive notice of the following matters before [Chase] enforces any of its rights: . . . (e) notice of failure to pay any of the Liabilities as they mature, or other default . . . ; (f) [KC's] default; (vii) any demand, intent to accelerate, diligence, presentment, dishonor and protest. . . .
3. Any right [Yacoub] may have to require [Chase] to proceed against [KC] . . . or the Collateral for the Liabilities or [Yacoub's] obligations under this Guaranty . . . .
Further, the Guaranty also provided that
THIS GUARANTY REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE GUARANTOR'S GUARANTY OF THE LIABILITIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Chase's evidence also included KC's "Account Transaction History" and monthly statements; Chase's April 24, 2019 letter notifying KC and Yacoub that the loan was in default and due in full; the affidavit and supplemental affidavit of Chase Special Credit Recovery Analyst, Barbra J. Lopez; and an attorney's fees affidavit.
In her affidavit, as supplemented, Lopez authenticated Chase's attached business records and testified that she was responsible for managing KC's loan. She testified at length regarding KC's transaction history and testified that KC had failed to pay Chase as agreed in the Contract, that KC was in default, and that KC owed the principal balance of $354,070.00, past due interest of $18,449.42, and late fees and costs of 910.17, for a total of $373,429.59. Lopez further testified that Yacoub had failed to cure KC's default as agreed and was in default under the Guaranty.
In their summary-judgment response, appellants asserted that there was a fact issue as to whether Chase failed to mitigate its damages. They asserted that Chase took property as collateral for the line of credit, but "did not make an effort to secure the Collateral to mitigate its damages." Appellants attached the affidavit of Yacoub, who testified that Chase's "agent actually indicated that [Chase] would come by to pick-up the property, but [Chase] never actually retrieved the Property." And, the "agent promised to retrieve the collateral before the landlord locked [appellants] out of the premises." He testified that the market value of the "drugs and ingredients for making same was in excess of $500,000.00." Appellants also asserted that Chase was not entitled to attorney's fees because it had failed to properly present a demand for payment under Texas Civil Practice and Remedies Code section 31.002.
Chase's summary-judgment motion was set for submission on February 17, 2020. On March 4, 2020, with trial set for March 30, 2020, Chase filed a second business records affidavit by Lopez. In her affidavit, Lopez again authenticated the Contract, Guaranty, Account Transaction History and monthly statements, and Chase's April 24, 2019 demand letter.
On March 25, 2020, the trial court signed an order granting summary judgment for Chase, awarding the principal balance of $354,070.00, pre-judgment interest of $18,449.42, and fees and costs of 910.17. It also awarded Chase $9,750.00 in attorney's fees and conditional attorney's fees for appeal.
Summary Judgment
In their first issue, appellants argue that the trial court erred in granting summary judgment for Chase because there was a fact issue as to whether Chase failed to mitigate its damages by taking possession of the collateral. In a sub-point, appellants assert that the trial court erred in considering Lopez's second business records affidavit, which was filed after the submission date for the motion for summary judgment.
Standard of Review and Legal Principles
We review a trial court's summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). In conducting our review, we take as true all evidence favorable to the non-movant, and we indulge every reasonable inference and resolve any doubts in the non-movant's favor. Id. If a trial court grants summary judgment without specifying the grounds, we will uphold its judgment if any of the theories advanced in the motion is meritorious. Beverick v. Koch Power, Inc., 186 S.W.3d 145, 148 (Tex. App.—Houston [1st Dist.] 2005, pet. denied).
In a traditional motion for summary judgment, the movant has the burden to establish that no genuine issue of material fact exists and thus it is entitled to judgment as a matter of law. See TEX. R. CIV. P. 166a(c); KPMG Peat Marwick v. Harrison Cty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). When a plaintiff moves for summary judgment on its own claim, it must conclusively prove all essential elements of its cause of action. Rhône-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999). A plaintiff seeking a summary judgment awarding it damages on its claim must conclusively establish its damages. McRay v. Dow Golub Remels & Beverly, LLP, 554 S.W.3d 702, 705 (Tex. App.—Houston [1st Dist.] 2018, no pet.). A matter is conclusively established if reasonable people could not differ as to the conclusion to be drawn from the evidence. See City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex. 2005).
Only after the movant meets its burden does the burden shift to the non-movant. Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995); see also McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 342 (Tex. 1993) ("[S]ummary judgments must stand or fall on their own merits, and the non-movant's failure to except or respond cannot supply by default the . . . summary judgment proof necessary to establish the movant's right."). The non-movant must present evidence raising a genuine issue of material fact precluding summary judgment. Lujan v. Navistar Fin. Corp., 433 S.W.3d 699, 704 (Tex. App.—Houston [1st Dist.] 2014, no pet.). Evidence raises a genuine issue of fact if reasonable jurors could differ in their conclusions in light of all of the summary-judgment evidence. Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007).
To defeat a summary judgment by raising an affirmative defense, a non-movant must do more than plead the affirmative defense. Lunsford Consulting Grp., Inc. v. Crescent Real Estate Funding VIII, L.P., 77 S.W.3d 473, 475-76 (Tex. App.—Houston [1st Dist.] 2002, no pet.). Rather, he must present evidence sufficient to raise a genuine issue of material fact on each element of his affirmative defense. Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex. 1984); Lujan, 433 S.W.3d at 704. The movant is under no obligation to negate the affirmative defense. Fortitude Energy, LLC v. Sooner Pipe LLC, 564 S.W.3d 167, 180 (Tex. App.—Houston [1st Dist.] 2018, no pet.).
Summary-Judgment Evidence
We first consider the scope of the evidence before the trial court. Appellants assert that the trial court, in granting summary judgment for Chase, erred in considering Lopez's second business records affidavit, which was filed after the submission date for the motion for summary judgment.
Our review of a trial court's summary judgment extends to the evidence that was before the court at the time of its ruling. Brookshire Katy Drainage Dist. v. Lily Gardens, LLC, 333 S.W.3d 301, 308 (Tex. App.—Houston [1st Dist.] 2010, pet. denied). Texas Rule of Civil Procedure 166a(c) provides that "[e]xcept on leave of court, the adverse party, not later than seven days prior to the day of hearing may file and serve opposing affidavits or other written response." See TEX. R. CIV. P. 166a(c). When nothing appears in the record indicating that late-filed summary judgment evidence was filed with leave of court, we presume that the trial court did not consider it. See Benchmark Bank v. Crowder, 919 S.W.2d 657, 663 (Tex. 1996).
Here, the record shows that, on January 22, 2020, Chase submitted, with its "Amended Motion for Summary Judgment," Lopez's September 18, 2019 "Affidavit in Support of Summary Judgment" and her January 17, 2020 "Supplemental Affidavit in Support of Summary Judgment." In her affidavit, as supplemented, Lopez authenticated Chase's attached business records, i.e., the Contract, Guaranty, Account Transaction History and monthly statements, and Chase's April 24, 2019 demand letter. She testified that she was responsible for managing KC's loan, testified at length regarding KC's transaction history, testified that KC had failed to pay Chase as agreed and was in default, and presented the amounts owed. Lopez further testified that Yacoub had failed to cure KC's default as agreed and was in default under the Guaranty. Chase's motion for summary judgment was set for submission on February 17, 2020.
On March 4, 2020, with trial set for March 30, 2020, Chase filed a March 3, 2020 "Business Records Affidavit" by Lopez, in which she again authenticated the same records as she had previously. On March 25, 2020, the trial court signed an order granting Chase's Amended Motion for Summary Judgment.
Nothing in Lopez's March 3, 2020 affidavit, which added nothing new, reflects that it was filed in support of Chase's summary-judgment motion. Further, nothing in the record reflects that the trial court granted leave to include it as summary-judgment evidence, and nothing in the trial court's order suggests that it considered the March 3, 2020 affidavit. Thus, we presume that the trial court did not consider the affidavit. See Benchmark Bank, 919 S.W.2d at 663; Pipkin v. Kroger Tex., L.P., 383 S.W.3d 655, 663 (Tex. App.—Houston [14th Dist.] 2012, pet. denied).
Breach-of-Contract Claims
To be entitled to summary judgment on its breach-of-contract claims against KC and Yacoub, Chase was required to establish, as a matter of law: (1) valid contracts with KC and Yacoub, (2) Chase's performance or tender of performance, (3) KC's and Yacoub's breach of their respective contracts, and (4) damages as a result of each breach. See Prime Prods., Inc. v. S.S.I. Plastics, Inc., 97 S.W.3d 631, 636 (Tex. App.—Houston [1st Dist.] 2002, pet. denied); see also Dorsett v. Hispanic Hous. & Educ. Corp., 389 S.W.3d 609, 613 (Tex. App.—Houston [14th Dist.] 2012, no pet.) ("To recover on a promissory note, the plaintiff must prove: (1) the note in question; (2) the party sued signed the note; (3) the plaintiff is the owner or holder of the note; and (4) a certain balance is due and owing on the note."). To be entitled to summary judgment as to the amount of its damages, Chase was required to conclusively establish its damages. See McRay, 554 S.W.3d at 705.
With respect to Chase's claim against KC, it is undisputed that the Contract constituted a valid agreement between the parties; that Chase performed as agreed under the Contract, insofar as it loaned funds to KC; that KC breached the Contract by not paying as agreed; and that Chase suffered damages as a result of KC's breach. See Prime Prods., 97 S.W.3d at 636. In support of the amount of its damages, Chase presented copies of KC's Account Transaction History, monthly statements, and the affidavit of Lopez. In her affidavit, as supplemented, Lopez authenticated Chase's attached business records and testified that she was responsible for managing KC's loan at Chase. She testified at length regarding KC's transaction history and testified that KC had failed to pay Chase as agreed in the Contract, that KC was in default, and that KC owed the principal balance of $354,070.00, past due interest of $18,449.42, and late fees and costs of 910.17, for a total of $373,429.59.
With respect to Chase's claim against Jacoub, it is undisputed that the Guaranty constituted a valid agreement between the parties; that Jacoub breached the Guaranty by not curing KC's default as agreed; and that Chase suffered damages as a result of Jacoub's breach. See id. Chase also presented a copy of its April 24, 2019 letter notifying Jacoub of KC's default and accelerating the balance due under the Contract. And, Chase presented Lopez's affidavit testimony that Jacoub failed to cure KC's deficiency. Thus, Chase established all the elements of its breach-of-contract claims against appellants, including the amount of its damages. See id.; see also McRay, 554 S.W.3d at 705.
The burden then shifted to appellants to raise a genuine issue of material fact precluding summary judgment. See Siegler, 899 S.W.2d at 197. In their summary-judgment response, appellants asserted that Chase was not entitled to summary judgment because there existed a fact issue as to whether it failed to mitigate its damages by proceeding against the collateral.
The failure to mitigate damages is an affirmative defense. Lunsford Consulting Grp., 77 S.W.3d at 475-77. Again, for a non-movant to avoid summary judgment based on an affirmative defense, he "must produce sufficient summary judgment evidence to raise a question of fact as to each element of the affirmative defense." Wiggins v. Overstreet, 962 S.W.2d 198, 200 (Tex. App.—Houston [14th Dist.] 1998, pet. denied). The doctrine of mitigation of damages prevents a party from recovering breach-of-contract damages that the non-breaching party could have avoided through reasonable efforts. Great Am. Ins. Co. v. N. Austin Mun. Util. Dist. No. 1, 908 S.W.2d 415, 426 (Tex. 1995). A duty to mitigate damages arises only if it can be done "at a trifling expense or with reasonable exertions." Id. (quoting Walker v. Salt Flat Water Co., 96 S.W.2d 231, 232 (1936)). The party raising the defense must prove lack of diligence and the amount by which the failure to mitigate increased the amount of damages. Kartsotis v. Bloch, 503 S.W.3d 506, 522 (Tex. App.—Dallas 2016, pet. denied).
Here, appellants presented the affidavit of Yacoub. In his affidavit, Yacoub testified that the loan was used to purchase prescription-drug inventory and equipment, furniture, and electronics. He testified that KC stopped paying the loan because it "started having difficulties with the insurance contracts which began auditing the billing history" and the insurers withheld payment for prescriptions. He asserted that, although he notified Chase that KC could not pay as agreed, Chase "did not make an effort to secure the Collateral to mitigate its damages." He testified that a Chase representative "actually indicated that [Chase] would come by to pick-up the property, but [Chase] never actually retrieved the [p]roperty" and that Chase's "agent promised to retrieve the collateral before the landlord locked the borrowers out of the premises." He asserted that the market value of the "drugs and ingredients for making same was in excess of $500,000.00."
Chase asserts that, under the plain terms of the Contract and Guaranty, KC and Yacoub agreed to waive any right to require Chase to proceed against any collateral prior to seeking a judgment against KC or Yacoub.
In construing a written contract, we ascertain and give effect to the true intentions of the parties as expressed in the writing itself. Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex. 2011). We give contract terms their plain, ordinary, and generally accepted meanings unless the contract itself shows them to be used in a technical or different sense. Valence Operating Co., 164 S.W.3d at 662. We examine and consider the entire writing in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless. Id.
In Yan Jin v. PNC Bank, a bank sued a borrower for breach of contract and guarantor liability on a promissory note. No. 03-10-00392-CV, 2011 WL 1035726, at *1 (Tex. App.—Austin Mar. 9, 2011, pet. denied) (mem. op.). The defendant argued that the trial court erred in allowing the bank to "skip the step" of foreclosing on the collateral before pursuing a deficiency judgment against him. Id. at *2. The court of appeals noted, however, that the loan documents granted the bank a right to seek a deficiency judgment and that the commercial guaranty expressly stated that the defendant waived any right to require the bank to proceed against or exhaust any collateral. Id. In upholding the trial court's summary judgment for the bank, the court of appeals held that, based on the plain language of the loan documents, the defendant waived the right to require the bank to proceed against the collateral. Id.
Here, similarly, the Contract expressly provides that KC waived any right to require Chase to proceed against any collateral:
8.16 Waivers. . . . [E]ach Obligor waives . . . (b) any right to require [Chase] to proceed against . . . any Collateral . . . .
Similarly, Yacoub agreed in the Guaranty:
Nature of Guaranty. This Guaranty is an absolute guaranty of payment and performance and not of collection. Therefore, [Chase] may insist that the Guarantor [Yacoub] pay immediately, and [Chase] is not required to attempt to collect first from the Borrower, the Collateral, or any other person . . . .(Emphasis added.) Further, Yacoub, as guarantor, "waived":
3. Any right [Yacoub] may have to require [Chase] to proceed against [KC] . . . or the Collateral for the Liabilities or [Yacoub's] obligations under this Guaranty . . . .
Thus, under the terms of the Contract and Guaranty, KC and Yacoub expressly waived any right to require Chase to proceed against or exhaust any collateral before seeking judgment against KC and Yacoub. See Yan Jin, 2011 WL 1035726, at *2.
Appellants assert on appeal that promissory estoppel bars any such waiver of the duty to mitigate damages. They argue that Chase is estopped from asserting that they waived the duty to mitigate damages under the terms of the agreements because Chase orally promised to retrieve appellants' business property, which appellants assert served as collateral for the loan. They assert that they raised the doctrine of estoppel in their summary-judgment response.
As discussed above, the Contract and Guaranty each contain an integration clause expressly barring any attempt to contradict their written terms with evidence of subsequent oral agreements. However, "an agreement that contains a no-oral-modification clause can be orally modified if it is not subject to a statute of frauds." Am. Garment Props., Inc. v. CB Richard Ellis-El Paso, L.L.C., 155 S.W.3d 431, 435 (Tex. App.—El Paso 2004, no pet.). Here, the parties' agreements fall within the statute of frauds. See TEX. BUS. & COM. CODE § 26.02 (requiring that loan agreements exceeding $50,000 in value be in writing). However, "promissory estoppel may be used to bar the application of the statute of frauds and allow enforcement of an otherwise unenforceable oral promise." Blackstone Med., Inc. v. Phoenix Surgicals, L.L.C., 470 S.W.3d 636, 654 (Tex. App.—Dallas 2015, no pet.).
"Promissory estoppel is an equitable doctrine that ordinarily is used defensively to prevent 'a party from insisting upon [its] strict legal rights when it would be unjust to allow [it] to enforce them.'" Comiskey v. FH Partners, LLC, 373 S.W.3d 620, 635 (Tex. App.—Houston [14th Dist.] 2012, pet. denied) (quoting Wheeler v. White, 398 S.W.2d 93, 96 (Tex. 1965)). To raise a promissory-estoppel defense in their summary-judgment response, appellants must have presented or argued each of the elements. See Deutsche Bank Nat. Trust Co. v. Stockdick Land Co., 367 S.W.3d 308, 317-18 (Tex. App.—Houston [14th Dist.] 2012, pet. denied). The elements of promissory estoppel are: (1) a promise, (2) foreseeability of reliance thereon by the promisor, and (3) substantial reliance by the promisee to his detriment. Davis v. Tex. Farm Bureau Ins., 470 S.W.3d 97, 107 (Tex. App.—Houston [1st Dist.] 2015, no pet.). A party asserting promissory estoppel must show "an actual promise," id. at 108, that is "sufficiently specific and definite so that it would be reasonable and justified for the promisee to rely upon it as a commitment to future action." Comiskey, 373 S.W.3d at 635. The "promise" must also be "more than mere speculation concerning future events, a statement of hope, or an expression of opinion, expectation, or assumption." Id.
The record shows that appellants asserted in their summary-judgment response, and Yacoub stated in his affidavit, that a Chase representative "actually indicated that [Chase] would come by to pick-up the property, but [Chase] never actually retrieved the [p]roperty" and that Chase's "agent promised to retrieve the collateral before the landlord locked the borrowers out of the premises." This is not evidence of an actual promise that is sufficiently specific and definite that it would be reasonable and justified for appellants to have relied on it as a commitment to future action, particularly in light of the language in the Contract and Guaranty prohibiting appellants from requiring Chase to proceed against any collateral, as discussed above. See Davis, 470 S.W.3d at 108; Comiskey, 373 S.W.3d at 635. Further, appellants did not argue or present evidence in the trial court that such reliance was foreseeable to Chase. See Davis, 470 S.W.3d at 107.
Because appellants did not present evidence to support all the elements of their estoppel defense in the trial court, we cannot consider it on appeal as a ground for reversal of the summary judgment. See Wyrick v. Bus. Bank of Tex., N.A., 577 S.W.3d 336, 351 (Tex. App.—Houston [14th Dist.] 2019, no pet.) (declining to consider estoppel defense because non-movants did not present argument or evidence in their response to bank's summary-judgment motion); Rima Grp., Inc. v. Janowitz, 573 S.W.3d 505, 513 Tex. App.—Houston [14th Dist.] 2019, no pet.) (declining to consider estoppel arguments because non-movant did not present or argue any elements of estoppel doctrine in its summary-judgment response); see also TEX. R. CIV. P. 166a(c) ("Issues not expressly presented to the trial court by written motion, answer or other response shall not be considered on appeal as grounds for reversal.").
Although appellants argued the elements of their promissory estoppel defense in their motion for new trial, their argument was not timely presented. "New arguments to defeat summary judgment presented after the trial court has granted summary judgment do not warrant reversal." Brookshire Katy Drainage Dist. v. Lily Gardens, LLC, 333 S.W.3d 301, 307 n.3 (Tex. App.—Houston [1st Dist.] 2010, pet. denied); Macy v. Waste Mgmt., Inc., 294 S.W.3d 638, 651 (Tex. App.—Houston [1st Dist.] 2009, pet. denied). Accordingly, we limit our review to appellants' summary-judgment response. See Brookshire Katy, 333 S.W.3d at 307 n.3. --------
We conclude that appellants did not meet their burden to present evidence raising a fact issue precluding Chase's right to summary judgment. See Centeq Realty, 899 S.W.2d at 197; Brownlee, 665 S.W.2d at 112. Accordingly, we hold that the trial court did not err in granting summary judgment for Chase on its claims against appellants.
We overrule appellants' first issue.
Attorney's Fees
In their second issue, appellants argue that the trial court erred in awarding Chase attorney's fees because it "failed to properly submit its demand letter," as required under Civil Practice and Remedies Code section 38.002. See TEX. CIV. PRAC. & REM. CODE § 38.002.
Whether attorney's fees are available is a question of law that we review de novo. Holland v. Wal-Mart Stores, Inc., 1 S.W.3d 91, 94 (Tex. 1999); Peterson Grp., Inc. v. PLTQ Lotus Grp., L.P., 417 S.W.3d 46, 60 (Tex. App.—Houston [1st Dist.] 2013, pet. denied). A trial court may award attorney's fees in a breach-of-contract claim when authorized by statute or by the parties' contract. MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660, 669 (Tex. 2009).
Section 38.001 provides that "[a] person may recover reasonable attorney's fees from an individual or corporation, in addition to the amount of a valid claim and costs, if the claim is for: . . . (8) an oral or written contract." See TEX. CIV. PRAC. & REM. CODE § 38.001(8). Section 38.002 requires that the party seeking attorney's fees plead and prove that it presented its claim for damages to the opposing party and that the opposing party refused to pay. Id. § 38.002. "The purpose of the presentment requirement is to allow the party against whom the claim is asserted an opportunity to pay it or tender performance within 30 days after they have notice of the claim without incurring an obligation for attorney's fees." Gibson v. Cuellar, 440 S.W.3d 150, 157 (Tex. App.—Houston [14th Dist.] 2013, no pet.).
"Parties are free to contract for a fee-recovery standard either looser or stricter than Chapter 38's. . . ." Intercontinental Grp. P'ship v. KB Home Lone Star L.P., 295 S.W.3d 650, 653 (Tex. 2009). The language of the contract controls, rather than the language of the statute. Id. at 654-56. When a party seeks attorney's fees pursuant to a contractual provision allowing for the recovery of such fees, the party need not prove presentment, which is a statutory procedural requirement. Fortitude Energy, 564 S.W.3d at 187.
Here, the record shows that Chase, in its petition and motion for summary judgment, sought attorney's fees based on the terms of the Contract and Guaranty and based on section 38.001. The trial court's order awarding attorney's fees does not specify the basis of its award. However, we note that section 38.001 does not authorize the recovery of attorney's fees in a breach-of-contract action against a limited liability company ("LLC"). Alta Mesa Holdings, L.P. v. Ives, 488 S.W.3d 438, 455 (Tex. App.—Houston [14th Dist.] 2016, pet. denied). Here, KC is an LLC. Thus, the trial court's award of attorney's fees to Chase is not based on section 38.001, but on the terms of the Contract and Guaranty. See Beverick, 186 S.W.3d at 148; see also S. Ins. Co. v. Brewster, 249 S.W.3d 6, 13 (Tex. App.—Houston [1st Dist.] 2007, pet. denied) (noting that all that is not contradicted by record must be presumed in favor of judgment).
The Contract provides that KC is "liable to [Chase] and agrees to pay on demand all reasonable costs and expenses . . . including without limitation reasonable attorney's fees and court costs." In addition, the Guaranty states that Jacoub, as guarantor, "will also reimburse [Chase] for any fees, charges, costs, and expenses, including reasonable attorney's fees." Because the trial court awarded attorney's fees based on the parties' agreements, and not based on statute, there was no requirement for proper presentment of a demand. See Fortitude Energy, 564 S.W.3d at 187. We hold that the trial court did not err in awarding attorney's fees.
Accordingly, we overrule appellants' second issue.
Conclusion
We affirm the trial court's judgment.
Sherry Radack
Chief Justice Panel consists of Chief Justice Radack and Justices Goodman and Farris.