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  • Sugar Land Cubed, LLC v. The Learning Experience, Corp.Contract - Other Contract document preview
  • Sugar Land Cubed, LLC v. The Learning Experience, Corp.Contract - Other Contract document preview
  • Sugar Land Cubed, LLC v. The Learning Experience, Corp.Contract - Other Contract document preview
  • Sugar Land Cubed, LLC v. The Learning Experience, Corp.Contract - Other Contract document preview
  • Sugar Land Cubed, LLC v. The Learning Experience, Corp.Contract - Other Contract document preview
  • Sugar Land Cubed, LLC v. The Learning Experience, Corp.Contract - Other Contract document preview
  • Sugar Land Cubed, LLC v. The Learning Experience, Corp.Contract - Other Contract document preview
  • Sugar Land Cubed, LLC v. The Learning Experience, Corp.Contract - Other Contract document preview
						
                                

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CAUSENO. -283314 SUGAR LAND CUBED, LLC, THE DISTRICT COURT Plaintiff JUDICIAL DISTRICT THE LEARNING EXPERIENCE CORP., Defendant FORT BEND COUNTY, TEXAS PLAINTIFF’S REPLY IN FURTHER SUPPORT OF ITS MOTION TO MODIFY JUDGMENT Sugar Land Cubed, LLC (“Plaintiff”) files this Reply in Further Support of ts Motion Modify Judgment (“Reply”) asking the Court to enter an order vacating summary judgment and reinstate Plaintiff’s claim that The Learning Experience Corp. (“Defendant” or “Guarantor”) breached the Guaranty of Rent (the “Guaranty”) by not paying Plaintiff Deferred Rent amounts as obligated under the Guaranty by the Third Amendment to the Guaranty (the “Third Amendment”) In support hereof, Plaintiff shows the following: Plaintiff’s Motion is Timely Because the 30 Day Rule Set Out in Tex. R. Civ. P. (a)Does Not Begin Until a Final Judgment is Entered. Defendant cites to L.M. Healthcare, Inc. v. Childs, 929 S.W.2d 442, 444 (Tex. 1996) in its Response to Plaintiff’s Motion to Modify (“Response”) where the trial court had plenary power to modify its judgment, and here, the same is true. As a rule, “a trial court retains plenary power over its interlocutory orders until a final judgment is entered,” therefore, a trial court “has the inherent authority to change or modify any interlocutory order until its plenary power expires. In re Naylor, 120 S.W.3d 498, 500 (Tex.App. arkana 2003, no pet.) (citing Tex. R. Civ. P. 329 In First Nat. Bank in McAllen v. Martinez De Villagomez, 54 S.W.3d 345, 34748 (Tex. App. Corpus Christi-Edinburg 2001, pet. denied , the trial court granted a motion for new trial four months after the court’s judgment was entered, and long after the court’s plenary power over a final judgment would have elapsed. Id.The Court held that the challenged judgment was not final but interlocutory since it did not resolve all of the claims in the lawsuit, and t trial court did not have to act within the 30 day window set out in Tex. R. Civ. P. 329b(a). Id. The order executed on September 14, 2022 (“Order”) that Plaintiff seeks to modify was an interlocutory order because Defendant still has its counterclaims pending against Plaintiff in this lawsuit. See McFadin v. Broadway Coffeehouse, LLC, 539 S.W.3d 278, 283 (Tex. 2018) (holding that a judgment is final only if it disposes of all pending parties and claims). Because the Order is interlocutory, this Court has the plenary and inherent power to modify the Order until a final order is entered, meaning this Court is not bound by the 30 day rule set out in Tex. R. Civ. P. 329b(a). Harris Cty. Appraisal st. v. Wittig, 881 S.W.2d 193, 194 (Tex. App. ouston [1st Dist.] 1994, orig. proceeding) (signing of final order begins countdown of loss of trial court's plenary power). Plaintiff’s Motion is timely, and this Court has the inherent and plenary power to modify or change the Order Defendant is Required to Expressly Forth the Specific Grounds Summary Judgmentin its MSJ and Defendant Did Not Defendant did not set expressly fort specific ground in its Traditional Motion for Summary Judgment (“MSJ”) (Defendant’s No Evidence Motion for Summary Judgment was denied at the hearing on August 23, 2022 proving, as a matter of law, that Defendant does not owe Plaintiff Deferred Rent amounts as obligated under the Third Amendment’s amended guarantee obligations. Defendant argues that the Third Amendment and whether Deferred Rent was owed under it was “squarely before the Court,” Response, at 3, then cites to assertions made in its M that re all in regard the original guaranty amount of $500,000 under the Guaranty, not the Deferred Rent amounts efendant also guaranteed under the Third Amendment because the Defendant MSJ only moved for summary judgment as to Plaintiff s claim of breach for Defendant failing to Plaintiff , the remaining amount of the original guaranteed amount of Plaintiff even its Response to the MSJ, as Defendant points out, stated to the Court that the MSJ was only partial because it does not address the Third Amendment and the obligations thereunder regarding guaranteeing Deferred Rent amounts until such amounts are paid in full, and Plaintiff even stated this on the record at the beginning of the hearing for the MSJ August 23, 2022 Defendant does not even expressly or specifically cite to the Third Amendment in its MS mention “Deferred Rent in the MSJ nd does not prove in its MSJ why as a matter of law Defendant does not owe Plaintiff Deferred Rent amounts even if the iginal $500,000 amount expires. Thus, Defendanthas not met the rigorous requirements of Tex. R. Civ. P. 166a(c). Moreover, Defendant mischaracterize Plaintiff’s use of the Third Amendment in its Response to the MSJ. Plaintiff use the Third Amendment nly to explain to the Court how there exists a genuine issue of material fact as to the date the Guaranty’s original $500,000 was to begin eing reduced annually by $100,000Response to the MSJ, 8.The Third Amendment, argued by Plaintiff, created a fact issue as to the date the guaranteed $500,000 began being reduced by because the Third Amendment was executed after the Guaranty’s $500,000 had allegedly been reduced to zero yet the Third Amendment tilized terms that would make a reasonable person believe there were remaining sums of money left of $500,000 as of the date the Third Amendment was executed, meaning the Guaranty’s 5 ar count down could not have begun when Defendant alleged it to have begn. Response to MSJ , at 8 Defendant incorrectly states that since the Third Amendment and Deferred Rent were put into the summary judgment record and evidence when they ere mentioned in Plaintiff’s Response, attached as an Exhibit to a Pleading, and mentioned in Defendant’s Reply n Further Support of its MSJ, this is sufficient to satisfy the express and specific requirement under the rigorous rule of Tex. R. Civ. P. (c). It is not. McConnell v. Southside Indep. Sch. Dist., S.W.2d 337, 34041 (Tex. 1993) (holding that specific grounds for summary judgment must be expressly presented in motion for summary judgment itself and not in summary judgment evidence (citing Tex. R. Civ. P. 166a(c)) The motion for summary judgment must stand or fall on the grounds it specifically and expressly sets forth Summary judgment cannot be sustained on a ground not specifically set forth in a movant’s motion. If it was intended that Rule (c) permit a summary judgment movant to place, or possibly hide, grounds for summary judgment in a brief filed in support of the motion or in accompanying summary judgment evidence, the Rule could have easily provided: The motion for summary judgment or the brief in support thereof or the summary judgment evidence shall state the specific grounds therefor. Rule 166a(c), however, does not so provide. . (citing Alvarado v. Farah Mfg. Co., Inc., 830 S.W.2d 911, 915 (Tex. 1992)). Therefore, Rule 166a(c) is a rigorous ruleand it must be applied as written, and the Court is not free to disregard the rule’s plain language. Id.Thus, c onsistent with the precise language of Rule 166a(c), Defendant’s MSJ must itself expressly present the specific grounds upon which it is madeRepublican Party of Texas v. Houston First Corp., No. 14 CV, 2022 WL 619708, at *3 (Tex. App.Houston [14th Dist.] Mar. 3, 2022, no pet. h. In determining whether grounds are expressly presented, reliance may not be placed summary judgment evidence. Id. Vertex Servs., LLC v. Oceanwide Houston, Inc., 583 S.W.3d 841, 852 (Tex. App.Houston [1s Dist.] , pet. denied (holding that since not all necessary grounds were expressly presented to the trial court in the summary judgment motion, the trial court reversibly erred by granting the motion). In Vertex Servs., LLC the movant argued that even if its summary judgment motion itself did not succeed in putting movant claim for tortious interference with the contract beforethe court, movant response and movant reply did.Vertex Servs., LLC 583 S.W.3d The court rejected this argument holding that the purpose of 166a(c) is to avoid unfairness to the nonmovant by assuring it sufficient information and time to respond to the summary judgment motion. ; See Sanders v. Capitol Area Council, 930 S.W.2d 905, 911 (Tex. App. Austin 1996, no writ) “The purpose of the time requirements in [R]ule 166a(c), to give the nonmovant notice of all claims that may be summarily disposed of and the specific grounds on which the movant relies, would be severely undercut if a movant's ‘reply’ in which new independent grounds were presented could be treated as an amended motion for summary judgment.”); See also Sams v. N.L. Indus., Inc., 735 S.W.2d 486, 488 (Tex. App.Houston [1st Dist.] 1987, no writ) (granting summary judgment on grounds added in reply would deprive nonmovant of hearing and mandatory 21day notice of hearing required by Rule 166a(c)); cf. Sartin v. Beacon Mar., Inc., No. 09 CV, 2009 WL 1076815, at *3 (Tex. App. Beaumont Apr. 23, 2009, no pet.) (mem. op.) (“A trial court cannot grant summary judgment on a cause of action addressed only in movant's reply brief, which in this case was filed the Friday afternoon before the Monday hearing.”). Here, Defendant does not specifically and expressly state in its M why, as a matter of law, it does not owe Plaintiff Deferred Rent amounts, new guaranteed obligation under the Third Amendment, even upon the expiration of the Guaranty’s $500,000 amount, as required in the Third Amendment. The fact that Plaintiff cites to the Third Amendment mentions Deferred Rent in its Response to the MSJ, or that Defendant cites to and or mention the Third Amendment in its Reply or attaches the Third Amendment as an Exhibit to a Pleading, is not sufficient to meet the rigorous standard of Tex. R. Civ. P. 166a(c) requiring the MSJ to stand or fall on the express grounds it specifically sets forth. Plaintiff Does Not Make the Same Arguments s Before. Plaintiff does not make the same arguments in its Motion to Modify as it did in its Response to the MSJ, as Defendant tries to argue. Plaintiff did not even address Defendant’s Deferred Rent obligations under the Guaranty’s Third Amendment and or discuss how the Deferred Rent amounts are guaranteed by Defendant regardless of the Guaranty’s expiration because those were not grounds moved for by Defendant in its MSJ and so Plaintiff in turn did not address these matters of concernAdditionally, Plaintiff’s Motion to Modify is asking the Court to vacate its Order granting summary judgment as to Plaintiff’s breach of contract claim for Defendant failing to pay Plaintiff Deferred Rent amounts because such was not a ground properly moved for by Defendant in its MSJ. This is an entirely new argument by Plaintiff. Any mention or reference of the Third Amendment i Plaintiff’s Response to the MSJ was to support the contention by Plaintiff that there was a genuine issue of material fact as to when the Guaranty’s guaranteed $500,000 amount was to begin reducing annually. Defendant Does Owe Deferred Rent to Plaintiff An Amended Guaranty Obligation by the Third AmendmentUntil Such is Paid in Full to Plaintiff Defendant does not get to argue in its Response what it should have argued in its MSJ. Again, motions for summary judgment must stand and fall on their express and specific grounds set forth. Tex. R. Civ. P. 166a(c) McConnell 858 S.W.2d Plaintiff’s Motion to Modify is based on the fact that Defendant did not properly move for summary judgment under Tex. R. P. (c) as to one of Plaintiff’s breach of contract claims therefore judgment should not have been entered dismissing that breach of contract claim. The Motion to Modify should be granted on that basis aloneEven if the Court decides to entertain Defendant’s argument in its Response why as a matter of law it is not obligated by the Third Amendment to pay Plaintiff Deferred Rent amounts and Defendant’s mischaracterizations of the Third Amendment, such arguments and mischaracterizations can be summarily dismissedhere The Third Amendment is not extrinsic evidence as Defendant alleges, but is part and parcel of the Guaranty, therefore it must be read in conjunction with the Guaranty. Boudreaux Civic Ass'n v. Cox, 882 S.W.2d 543, 54748 (Tex. App. Houston [1st. Dist.] 1994, no pet.) (“… modification to a contract creates a new contract that includes the new, modified provisions and the unchanged old provisions.” The fact that the original Guaranty of $500,000 may have been reduced to zero or expired before the breach by Tenant does not impact Tenant’s payment of Deferred Rent or Defendant’s guarant obligations of Deferred Rent under the Third Amendment The Third Amendment obligate Tenant to pay Deferred Rent amounts until such amounts are paid in full to Plaintiff, and Defendant guarant such amounts even upon the expiration of the Guaranty until such amounts are paid to Plaintiff in full or until August 31, 2023, whichever comes sooner Even if the repayment period of Deferred Rent did not begin until September 2021, such amounts were owed to Plaintiff and were already accumulated before Tenant breached the Lease in November of 2020.The Third Amendment was executed on June 23, 2020. The Third Amendment retroactively modified ase ent for the months of April and May 2020, and for those months Plaintiff abated $10,000 per month (“Abated Rent”) and deferred $6,000 per month (“Deferred Amount”)The Parties also agreed that an Amended Rent Period would be from June 2020 to December 2020. Deferred Rent for the Amended Rent Period is defined as the difference between the Base Rent owed pursuant to the Lease and the Amended Rent paid, in addition to the Deferred Amount This means Deferred Rent was already accumulated when the Third Amendment wasexecuted in June of 2020 and also prior to the breach by Tenant in November of Under the Lease, once Tenant breached, Plaintiff could accelerate all amounts due and owing to it. Lease, at Section 7.2When Tenant did not pay, Plaintiff sought the guara nty payment of the Deferred Rent amounts from Defendant, as obligated by the Third Amendment Defendant breached the Guaranty as amended by the Third Amendment when it failed to guaranty the Deferred Rent amounts.Any characterization of the Third Amendment by Defendant that portrays the Third Amendment to demand anything other than Defendant guaranteeing Deferred Rent amounts until such amounts are repaid to Plaintiff in full or until August 31, 2 is a mischaracterization and an attempt by Defendant to skirt its obligations. And, f Defendant’s argument is that the Third Amendment did not obligate Defendant to guaranty Deferred Rent because the Guaranty original amount had already expiredwhen the Third Amendment was executed, and at that point no eferred ent was accumulated then Section 5 of the Thi Amendment is rendered absolutely meaningless and to the contrary, if the Guaranty s $500,000 amount had expired in November of 2019 like Defendant claims then outstanding Deferred Rent was still to be accumulated in 2020 and would be outstanding payment to Plaintiff until such amounts were paid in full or until August 31, 2023The Third Amendment states that Defendant would guaranty repayment of Deferred Rent until “such has been repaid in full” and that this ird Amendment guarant obligation would only become null, void, and of no further force or effect when Tenant “repaid the Deferred Rent in full,” whichhas not happened. Conclusion For all the foregoing reasons, Plaintiff requests the Court to exercise its inherent and plenary power to modify its judgment signed on September 14, 2022 not grant Defendant summary judgment as to Plaintiff’s claim of breach of the Guaranty for Defendant failing to pay Plaintiff owed Deferred Rent amounts. DANIELS &TREDENNICK, PLLC By: /s/ Douglas Daniels Douglas A. Daniels Texas StateBar No. 0079379 doug.daniels@dtlawyers.com Hannah R. Strawser Texas StateBar No. 24126332 hannah@dtlawyers.com 6363 Woodway Dr., Suite Houston, Texas 77057 (713) 0024 (Telephone) (713) 0026 (Facsimile) ATTORNEYS FORPLAINTIFF CERTIFICATE OF SERVICE hereby certify that true and correct copy the foregoing instrument was transmitted January 16, 2023 in accordance with the Texas Rules of Civil Procedure via filing to all counsel ofrecord. By: /s/ Hannah R. Strawser Hannah R. Strawser