Preview
Filed: 7/15/2021 11:05 AM
JOHN D. KINARD - District Clerk
Galveston County, Texas
Gabriella E. Alonso Envelope No. 55377122
Attorney By: Shailja Dixit
galonso@bradley.com 7/15/2021 2:17 PM
713.576.0339 direct
713.576.0301 fax
July 15, 2021
VIA E-FILE
District Court Clerk
122nd Judicial District Court
603 Galveston County Courthouse
722 Moody
Galveston, TX 77550
Re: Stacey Diamond and Jeffrey Diamond v. Bradford Wood Collier, et al., Cause No. 20-
CV-1458; Motion to Dismiss
To Whom it May Concern,
Attached, please find Defendant Everett Financial, Inc. d/b/a Supreme Lending’s (“Supreme
Lending”) Rule 91a Motion to Dismiss Plaintiffs’ First Amended Petition. Per the local rules,
Supreme Lending has included the following documents with its Motion:
1. Rule 91a Motion to Dismiss requesting oral argument;
2. Proposed Order Granting Motion to Dismiss (filed as a separate lead document);
and
3. A blank Fiat.
Supreme Lending respectfully requests the Motion be placed on the Court’s Docket and set for an
oral hearing, which Supreme Lending estimates will take approximately 1 hour.
Sincerely,
Gabriella E. Alonso
CAUSE NO. 20-CV-1458
STACEY DIAMOND AND §
JEFFREY DIAMOND, § IN THE DISTRICT COURT OF
§
Plaintiffs, §
§
§
v. §
§
BRADFORD WOOD COLLIER, § GALVESTON COUNTY, TEXAS
EVERETT FINANCIAL, INC. d/b/a §
SUPREME LENDING, TEXAS §
ALLY REAL ESTATE GROUP, §
LLC, and HENRY ADONIAS PU §
PINEDA §
§ 122ND JUDICIAL DISTRICT
Defendants. §
DEFENDANT EVERETT FINANCIAL, INC. d/b/a SUPREME LENDING’S
RULE 91a MOTION TO DISMISS
Defendant Everett Financial, Inc. d/b/a/ Supreme Lending (“Supreme Lending”), submits
this its Motion to Dismiss the claims of Plaintiffs Stacey Diamond and Jeffrey Diamond
(“Plaintiffs”) pursuant to Rule 91a of the Texas Rules of Civil Procedure and would show as
follows:
I. INTRODUCTION
When broken down, this case is remarkably simple with claims against Supreme Lending
that are, on their face, baseless and due to be rejected. Plaintiffs are aggrieved sellers attempting
to impose liability on parties who have no relationship to them. Supreme Lending’s role was that
of a putative lender for the borrower, Bradford Collier, but had no communications or dealings
with Plaintiffs. Now, Plaintiffs in their role as sellers, ask this Court to impose liability on the
buyer’s lender, a concept which has no foundation in law. Under well-established Texas law, the
lender owes its duties and obligations to its borrower, not to some stranger to the loan transaction
1
such as the Plaintiffs here. To allow otherwise would upend Texas law and seriously harm the
ability of borrowers to obtain financing.
II. FACTUAL AND PROCEDURAL BACKGROUND
On September 5, 2020 Plaintiffs and Defendant Bradford Collier entered into an earnest
money contract (the “Contract”) to purchase real property located at 1615 Postoffice Street,
Galveston, Texas 77550 (the “Property”). (See First Amended Petition at ¶ 9). The Contract was
contingent upon several items, including the borrower’s ability to qualify for and secure financing
to purchase the Property. (See First Amended Petition at Ex. A, p. 13 [Third Party Financing
Addendum]). In connection with the purchase of the Property, Collier applied for a loan with
Supreme Lending and was provided a Loan Estimate on September 8, 2020. (See Plaintiff’s First
Amended Complaint at ¶ 13; Supreme Lending’s Original Answer at Ex. B). In order to receive
full approval for the loan, the Loan Estimate clearly stated Collier must have $24,014.00 in cash
to close. (Id).
On September 18, 2020, Supreme Lending was prepared to finalize the loan and was
provided a copy of Collier’s bank account statement. (See Supreme Lending’s Original Answer at
Exs. A and B). As plainly reflected in the account statement, Collier did not have sufficient funds
to close on the loan. Accordingly, his application was denied. (Id; First Amended Petition at ¶
17). Due to the lack of financing, the Contract was terminated.
Plaintiffs have brought suit against Collier, Supreme Lending, and several other
defendants. In their First Amended Petition, Plaintiffs assert claims for breach of contract as to
Collier, and negligent misrepresentation, fraud, and tortious interference with contract as to
Supreme Lending and the remaining defendants. (See First Amended Petition at ¶¶ 21-39).
Because Plaintiffs have asserted a baseless cause of action against Supreme Lending, dismissal of
Supreme Lending is warranted under Rule 91a of the Texas Rules of Civil Procedure.
2
III. STANDARD FOR MOTION TO DISMISS
Rule 91a of the Texas Rules of Civil Procedure governs the dismissal of a baseless cause
of action and provides, in relevant part:
[A] party may move to dismiss a cause of action on the grounds that it has no basis
in law or fact. A cause of action has no basis in law if the allegations, taken as true,
together with inferences reasonably drawn from them, do not entitle the claimant
to the relief sought. A cause of action has no basis in fact if no reasonable person
could believe the facts pleaded.
Tex. R. Civ. P. 91a.1.
In ruling on a Rule 91a motion to dismiss, the court must decide the motion based solely
on the pleading of the cause of action, together with any exhibits permitted by Rule 59. Tex. R.
Civ. P. 91a.6; Koenig v. Blaylock, 497 S.W.3d 595, 599–600 (Tex. App.—Austin 2016, pet.
denied) (in ruling on motion to dismiss, court considered exhibits attached to plaintiff’s response);
see also ConocoPhillips Co. v. Koopmann, 547 S.W.3d 858, 880 (Tex. 2018); HMT Tank Serv. v.
American Tank & Vessel, Inc., 565 S.W.3d 799, 808 (Tex. App.—Houston [14th Dist.] 2018, no
pet.). Rule 59 permits all written instruments “constituting, in whole or in part, the claim sued on,
or the matter set up in defense” to be made part of the pleadings to “be deemed a part thereof for
all purposes.” Tex. R. Civ. P. 59. Generally, a cause of action is found to have no basis in law
when: (1) the petition alleges too few facts to demonstrate a viable, legally cognizable claim to
relief or (2) the petition alleges additional facts that, if true, bar the plaintiff's recovery. Stallworth
v. Ayers, 510 S.W.3d 187, 190 (Tex. App.—Houston [1st Dist.] 2016, no pet.).
IV. ARGUMENT AND AUTHORITIES
A. Plaintiffs have no viable claim against Supreme Lending for negligent
misrepresentation
Because Plaintiffs do not have standing as to Supreme Lending, they attempt to do an end
run around Texas contract law by bringing a cause of action for negligent misrepresentation. From
3
the outset it should be said that there is no case law allowing a negligent misrepresentation claim
to proceed where the parties have not had a course of dealing. In this case, Supreme Lending
communicated with its putative borrower (the buyer - Collier) but at no time was Supreme Lending
acting for the benefit of the seller (Plaintiffs). (See First Amended Petition at ¶¶ 13, 17, 19). In
fact, to allow the seller to make this type of claim would open an unending vista of liability for
lenders whose duties, up until now, have solely been owed to their borrowers. To that end there is
not a single case, statute, regulation, or other legal authority in Texas permitting Plaintiffs to bring
this kind of lender liability action. In fact, allowing Plaintiffs to move forward with their negligent
misrepresentation claim would essentially require lenders in Texas to fund loans despite a
borrower’s lack of eligibility.
Regardless, in order to recover for negligent misrepresentation, a plaintiff must actually
identify a misrepresentation made by the defendant to the plaintiff. Willis v. Marshall, 401 S.W.3d
689, 699 (Tex.App.—El Paso 2013, no pet.). Plaintiffs seek to bootstrap their claim using Supreme
Lending’s denial letter that they allege (with no factual basis) is untrue. (See First Amended
Petition at ¶¶ 17, 19). In the first place, it is undisputed the funding was denied and therefore the
denial letter to Colloer cannot constitute a “misrepresentation,” as the borrower’s bank account
statement clearly shows Collier lacked sufficient funds to meet the express terms of the Loan
Estimate. (See Supreme Lending’s Original Answer, at Exs. A, B). Moreover, a Lender is required
by federal law to provide a denial letter to the borrower and state the reason when denying a loan.
See 12 C.F.R. §§ 1002.9(a)(1) and (2). The letter complies with federal law and on its face is
directed solely to the borrower—not Plaintiffs. (Id; First Amended Petition at ¶¶ 17, 19). The
Plaintiffs cannot possibly have a negligent misrepresentation claim because there was never any
representation to them.
4
To the extent Plaintiffs seek to base their negligent misrepresentation claims on the
September 8, 2020, Loan Estimate that Supreme Lending would close and fund a loan to Collier
on a future date, their cause of action has no basis in law. (See First Amended Petition at ¶ 13).
The tort of negligent misrepresentation does not encompass promises of future conduct. First Bank
v. Brumitt, 564 S.W.3d 491, 495 (Tex.App.—Houston [14th Dist.] 2018, no pet). Specifically, in
the lending context, plaintiffs cannot recover against a bank for representations that the bank would
close and fund the loan to the borrower on a given date in the future. Id. at 495. Plaintiffs’ negligent
misrepresentation claim is dead on arrival and must be dismissed.
B. Plaintiffs were on notice of the financing provision in the sales contract and have no
possible fraud claim against Supreme Lending
It is well settled law that a party asserting a cause of action for fraud must prove that it
actually and justifiably relied on a misrepresentation made by the defendant. Atl. Lloyds Ins. Co.
v. Butler, 137 S.W.3d 199, 225 (Tex.App.—Houston [1st Dist.] 2004, pet. denied); see also Ernst
& Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 577 (Tex. 2001). Courts throughout
Texas have examined fraud in the context of a lending relationship. In Bluebonnet Savings Bank,
F.S.B. v, Grayridge Apartment Homes, Inc., the court noted the existence of a written contract in
the lending context makes it harder for a party to show that it has relied on representations because
the contract “itself is notice of binding duties.” 907 S.W.2d 904, 908 (Tex.App.—Houston [1st
Dist.] 1995, writ denied). A party cannot claim it justifiably relied on a representation as a matter
of law when the “undisputed or conclusively proven facts demonstrate circumstances under which
reliance cannot be justified.” Samson Lone Star Ltd. P’ship v. Hooks, 497 S.W.3d 1, 16 n.4
(Tex.App.—Houston [1st Dist.] 2016, pet. denied).
Here, Plaintiffs cannot recover for their claims for fraud for two reasons: (1) Plaintiffs
cannot identify a single misrepresentation made by Supreme Lending to the Plaintiffs, and (2)
5
Plaintiffs cannot prove justifiable reliance as a matter of law. Simply put, Collier failed to meet
the cash to close term of the Loan Estimate on September 18, 2020. What Plaintiffs try to allege
here – that a lender to the putative purchaser can somehow be liable to the putative seller with
whom there is no relationship or communication – is, frankly, absurd. A lender who does not
communicate or represent anything to a putative seller of property cannot possibly be liable to that
completely unrelated seller. There was no misrepresentation or any wrongful conduct on Supreme
Lending’s part here whatsoever. Accordingly, Plaintiffs’ claims for fraud are baseless and due to
be dismissed. 1
C. Supreme Lending was entitled to enforce the express terms of its agreement with the
borrower and Plaintiffs have no possible tortious interference claim
Supreme Lending had the clear right to enforce the terms of its agreement with the
borrower. See Prudential Ins. Co. of Am. v. Fin Review Servs., Inc., 29 S.W.3d 74, 81 (Tex. 2008)
(holding a plaintiff cannot recover for tortious interference against a defendant who was merely
exercising its own contractual rights); see also ACS Investors, Inc. v. McLaughlin, 943 S.W.2d
426, 431 (Tex. 1997). In order to qualify for funding, Collier was required to have a specific
amount of cash to close. Collier did not meet that express term and was denied a loan. (See
Supreme Lending’s Original Answer, at Exs. A, B). As a matter of law, Supreme Lending’s
enforcement of its own contract cannot constitute tortious interference. Gulf Liquids New River
Project, LLC v. Gulsby Eng’g, Inc., 356 S.W.3d 54, 77 (Tex.App.—Houston [1st Dist.] 2011, no
pet.) (“Enforcing or complying with one’s own valid contract does not constitute unjustifiable
interference with another’s contact.”); see Friendswood Dev. Co. v. McCade Co., 926 S.W.2d 280,
1
Because Plaintiffs cannot recover against Supreme Lending for fraud, their request for exemplary damages must be
denied. See Tex. Civ. Prac. & Rem. § 41.003; In re: Sunpoint Securities, Inc., 377 B.R. 513, 571-572 (E.D. Tex. 2007).
6
293 (Tex. 1996); see also Maynard v. Caballero, 752 S.W.2d 719, 721 (Tex.App.—El Paso 1988,
writ denied).
There cannot be any possible tortious interference on Supreme Lending’s part when they
simply acted within the context of the agreement they had with Collier and had nothing to do with
the Plaintiffs as the putative seller. Once again, Plaintiffs cannot utilize causes of action based in
tort to circumvent Texas law to hold Supreme Lending liable for Plaintiffs’ failed real estate
transaction with Collier. To suggest otherwise runs contrary to Texas law and well-established
principles of real estate financing. Plaintiffs’ claims should not be allowed to survive.
V. REQUEST FOR AWARD OF ATTORNEY’S FEES
Rule 91a.7 provides that “the court may award the prevailing party on the motion [to
dismiss] all costs and reasonable and necessary attorney fees incurred with respect to the
challenged cause of action in the trial court. Any award of costs or fees must be based on evidence.”
Tex. R. Civ. P. 91a.7. The court cannot consider any extrinsic evidence in ruling on the motion
except when determining an award of attorney fees and costs. See Tex. R. Civ. P. 91a.6, 91a.7;
see, e.g., Drake v. Chase Bank, No. 02-13-00340-CV, 2014 WL 6493411 (Tex. App.—Fort Worth
2014, no pet.) (memo op.; 11-20-14) (Defendant’s attorney submitted affidavit and presented live
testimony to establish reasonable and necessary attorney fees). Supreme Lending will provide
evidence of further reasonable and necessary attorney’s fees and costs at any hearing on this
Motion.
Plaintiffs’ claims against Supreme Lending here are a waste of the Court’s time. Because
Plaintiffs’ causes of action against Supreme Lending fail, the Court should award Supreme
7
Lending all of its reasonable costs and reasonable and necessary attorney’s fees incurred in
connection with this Motion.
VI. CONCLUSION
Plaintiffs’ causes of action for negligent misrepresentation, fraud, and tortious interference
against Supreme Lending are meritless on their face and should be rejected out of the gate. There
never was any representation from the lender to the putative seller of the property. Because there
was no representation to Plaintiffs there can be no cause of action against Supreme Lending. Thus,
for the reasons stated in this Motion, Supreme Lending respectfully requests the Court set this
Motion for hearing in accordance with Texas Rule of Civil Procedure 91a, enter an order granting
the Motion and dismissing all of Plaintiffs’ claims against Supreme Lending with prejudice, and
awarding Supreme Lending its reasonable and necessary costs and fees, including attorney’s fees,
associated with challenging Plaintiffs’ claims.
VII. REQUEST FOR ORAL ARGUMENT
Pursuant to Local Rule 3.17(D), Supreme Lending respectfully requests this Motion be set
for oral argument.
8
Respectfully submitted,
By: /s/ Gabriella E. Alonso
GABRIELLA E. ALONSO
Texas Bar No. 24113527
galonso@bradley.com
ROBERT H. FORD
Texas Bar No. 24074219
rford@bradley.com
600 Travis Street, Suite 4800
Houston, Texas 77002
(713) 576-0300 Telephone
(713) 576-0301 Telecopier
KEITH S. ANDERSON
Texas Bar No. 24075789
kanderson@bradley.com
One Federal Place
1819 Fifth Avenue North
Birmingham, Alabama 35203
(205) 521-8000 Telephone
(205) 488-6714 Telecopier
ATTORNEYS FOR DEFENDANT
EVERETT FINANCIAL, INC. D/B/A
SUPREME LENDING
CERTIFICATE OF CONFERENCE
I do hereby certify that I have conferred with counsel for Plaintiffs via email and have not
received a response. Therefore, this motion is opposed.
/s/ Gabriella E. Alonso
Gabriella E. Alonso
9
CERTIFICATE OF SERVICE
I hereby certify that on the 15th day of July 2021, pursuant to the Texas Rules of Civil
Procedure, a copy of the above and foregoing was served as follows to the following counsel of
record:
Via email: service@jdiamondandassociates.com; carla@jdiamondandassociates.com;
taylor@jdiamondandassociates.com
Carla Courtney
Taylor Diamond
J. Diamond and Associates, PLLC
730 North Loop
Houston, Texas 77009
Attorneys for Plaintiffs
/s/ Gabriella E. Alonso
Gabriella E. Alonso
10
CAUSE NO. 20-CV-1458
STACEY DIAMOND AND §
JEFFREY DIAMOND, § IN THE DISTRICT COURT OF
§
Plaintiffs, §
§
§
v. §
§
BRADFORD WOOD COLLIER, § GALVESTON COUNTY, TEXAS
EVERETT FINANCIAL, INC. d/b/a §
SUPREME LENDING, TEXAS §
ALLY REAL ESTATE GROUP, §
LLC, and HENRY ADONIAS PU §
PINEDA §
§ 122ND JUDICIAL DISTRICT
Defendants. §
FIAT
PLEASE TAKE NOTICE than an oral hearing on Defendant Everett Financial, Inc. d/b/a
Supreme Lending’s Rule 91a Motion to Dismiss will be held in the 122nd Judicial District Court,
Galveston County, Texas at ___:___ a.m./p.m on the _________ day of ________________, 2021.
SIGNED this_____ day of ______________, 2021.
JUDGE PRESIDING
4847-0242-6866.1
Preview
Filed: 7/15/2021 11:05 AM JOHN D. KINARD - District Clerk Galveston County, Texas Gabriella E. Alonso Envelope No. 55377122 Attorney By: Shailja Dixit galonso@bradley.com 7/15/2021 2:17 PM 713.576.0339 direct 713.576.0301 fax July 15, 2021 VIA E-FILE District Court Clerk 122nd Judicial District Court 603 Galveston County Courthouse 722 Moody Galveston, TX 77550 Re: Stacey Diamond and Jeffrey Diamond v. Bradford Wood Collier, et al., Cause No. 20- CV-1458; Motion to Dismiss To Whom it May Concern, Attached, please find Defendant Everett Financial, Inc. d/b/a Supreme Lending’s (“Supreme Lending”) Rule 91a Motion to Dismiss Plaintiffs’ First Amended Petition. Per the local rules, Supreme Lending has included the following documents with its Motion: 1. Rule 91a Motion to Dismiss requesting oral argument; 2. Proposed Order Granting Motion to Dismiss (filed as a separate lead document); and 3. A blank Fiat. Supreme Lending respectfully requests the Motion be placed on the Court’s Docket and set for an oral hearing, which Supreme Lending estimates will take approximately 1 hour. Sincerely, Gabriella E. Alonso CAUSE NO. 20-CV-1458 STACEY DIAMOND AND § JEFFREY DIAMOND, § IN THE DISTRICT COURT OF § Plaintiffs, § § § v. § § BRADFORD WOOD COLLIER, § GALVESTON COUNTY, TEXAS EVERETT FINANCIAL, INC. d/b/a § SUPREME LENDING, TEXAS § ALLY REAL ESTATE GROUP, § LLC, and HENRY ADONIAS PU § PINEDA § § 122ND JUDICIAL DISTRICT Defendants. § DEFENDANT EVERETT FINANCIAL, INC. d/b/a SUPREME LENDING’S RULE 91a MOTION TO DISMISS Defendant Everett Financial, Inc. d/b/a/ Supreme Lending (“Supreme Lending”), submits this its Motion to Dismiss the claims of Plaintiffs Stacey Diamond and Jeffrey Diamond (“Plaintiffs”) pursuant to Rule 91a of the Texas Rules of Civil Procedure and would show as follows: I. INTRODUCTION When broken down, this case is remarkably simple with claims against Supreme Lending that are, on their face, baseless and due to be rejected. Plaintiffs are aggrieved sellers attempting to impose liability on parties who have no relationship to them. Supreme Lending’s role was that of a putative lender for the borrower, Bradford Collier, but had no communications or dealings with Plaintiffs. Now, Plaintiffs in their role as sellers, ask this Court to impose liability on the buyer’s lender, a concept which has no foundation in law. Under well-established Texas law, the lender owes its duties and obligations to its borrower, not to some stranger to the loan transaction 1 such as the Plaintiffs here. To allow otherwise would upend Texas law and seriously harm the ability of borrowers to obtain financing. II. FACTUAL AND PROCEDURAL BACKGROUND On September 5, 2020 Plaintiffs and Defendant Bradford Collier entered into an earnest money contract (the “Contract”) to purchase real property located at 1615 Postoffice Street, Galveston, Texas 77550 (the “Property”). (See First Amended Petition at ¶ 9). The Contract was contingent upon several items, including the borrower’s ability to qualify for and secure financing to purchase the Property. (See First Amended Petition at Ex. A, p. 13 [Third Party Financing Addendum]). In connection with the purchase of the Property, Collier applied for a loan with Supreme Lending and was provided a Loan Estimate on September 8, 2020. (See Plaintiff’s First Amended Complaint at ¶ 13; Supreme Lending’s Original Answer at Ex. B). In order to receive full approval for the loan, the Loan Estimate clearly stated Collier must have $24,014.00 in cash to close. (Id). On September 18, 2020, Supreme Lending was prepared to finalize the loan and was provided a copy of Collier’s bank account statement. (See Supreme Lending’s Original Answer at Exs. A and B). As plainly reflected in the account statement, Collier did not have sufficient funds to close on the loan. Accordingly, his application was denied. (Id; First Amended Petition at ¶ 17). Due to the lack of financing, the Contract was terminated. Plaintiffs have brought suit against Collier, Supreme Lending, and several other defendants. In their First Amended Petition, Plaintiffs assert claims for breach of contract as to Collier, and negligent misrepresentation, fraud, and tortious interference with contract as to Supreme Lending and the remaining defendants. (See First Amended Petition at ¶¶ 21-39). Because Plaintiffs have asserted a baseless cause of action against Supreme Lending, dismissal of Supreme Lending is warranted under Rule 91a of the Texas Rules of Civil Procedure. 2 III. STANDARD FOR MOTION TO DISMISS Rule 91a of the Texas Rules of Civil Procedure governs the dismissal of a baseless cause of action and provides, in relevant part: [A] party may move to dismiss a cause of action on the grounds that it has no basis in law or fact. A cause of action has no basis in law if the allegations, taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to the relief sought. A cause of action has no basis in fact if no reasonable person could believe the facts pleaded. Tex. R. Civ. P. 91a.1. In ruling on a Rule 91a motion to dismiss, the court must decide the motion based solely on the pleading of the cause of action, together with any exhibits permitted by Rule 59. Tex. R. Civ. P. 91a.6; Koenig v. Blaylock, 497 S.W.3d 595, 599–600 (Tex. App.—Austin 2016, pet. denied) (in ruling on motion to dismiss, court considered exhibits attached to plaintiff’s response); see also ConocoPhillips Co. v. Koopmann, 547 S.W.3d 858, 880 (Tex. 2018); HMT Tank Serv. v. American Tank & Vessel, Inc., 565 S.W.3d 799, 808 (Tex. App.—Houston [14th Dist.] 2018, no pet.). Rule 59 permits all written instruments “constituting, in whole or in part, the claim sued on, or the matter set up in defense” to be made part of the pleadings to “be deemed a part thereof for all purposes.” Tex. R. Civ. P. 59. Generally, a cause of action is found to have no basis in law when: (1) the petition alleges too few facts to demonstrate a viable, legally cognizable claim to relief or (2) the petition alleges additional facts that, if true, bar the plaintiff's recovery. Stallworth v. Ayers, 510 S.W.3d 187, 190 (Tex. App.—Houston [1st Dist.] 2016, no pet.). IV. ARGUMENT AND AUTHORITIES A. Plaintiffs have no viable claim against Supreme Lending for negligent misrepresentation Because Plaintiffs do not have standing as to Supreme Lending, they attempt to do an end run around Texas contract law by bringing a cause of action for negligent misrepresentation. From 3 the outset it should be said that there is no case law allowing a negligent misrepresentation claim to proceed where the parties have not had a course of dealing. In this case, Supreme Lending communicated with its putative borrower (the buyer - Collier) but at no time was Supreme Lending acting for the benefit of the seller (Plaintiffs). (See First Amended Petition at ¶¶ 13, 17, 19). In fact, to allow the seller to make this type of claim would open an unending vista of liability for lenders whose duties, up until now, have solely been owed to their borrowers. To that end there is not a single case, statute, regulation, or other legal authority in Texas permitting Plaintiffs to bring this kind of lender liability action. In fact, allowing Plaintiffs to move forward with their negligent misrepresentation claim would essentially require lenders in Texas to fund loans despite a borrower’s lack of eligibility. Regardless, in order to recover for negligent misrepresentation, a plaintiff must actually identify a misrepresentation made by the defendant to the plaintiff. Willis v. Marshall, 401 S.W.3d 689, 699 (Tex.App.—El Paso 2013, no pet.). Plaintiffs seek to bootstrap their claim using Supreme Lending’s denial letter that they allege (with no factual basis) is untrue. (See First Amended Petition at ¶¶ 17, 19). In the first place, it is undisputed the funding was denied and therefore the denial letter to Colloer cannot constitute a “misrepresentation,” as the borrower’s bank account statement clearly shows Collier lacked sufficient funds to meet the express terms of the Loan Estimate. (See Supreme Lending’s Original Answer, at Exs. A, B). Moreover, a Lender is required by federal law to provide a denial letter to the borrower and state the reason when denying a loan. See 12 C.F.R. §§ 1002.9(a)(1) and (2). The letter complies with federal law and on its face is directed solely to the borrower—not Plaintiffs. (Id; First Amended Petition at ¶¶ 17, 19). The Plaintiffs cannot possibly have a negligent misrepresentation claim because there was never any representation to them. 4 To the extent Plaintiffs seek to base their negligent misrepresentation claims on the September 8, 2020, Loan Estimate that Supreme Lending would close and fund a loan to Collier on a future date, their cause of action has no basis in law. (See First Amended Petition at ¶ 13). The tort of negligent misrepresentation does not encompass promises of future conduct. First Bank v. Brumitt, 564 S.W.3d 491, 495 (Tex.App.—Houston [14th Dist.] 2018, no pet). Specifically, in the lending context, plaintiffs cannot recover against a bank for representations that the bank would close and fund the loan to the borrower on a given date in the future. Id. at 495. Plaintiffs’ negligent misrepresentation claim is dead on arrival and must be dismissed. B. Plaintiffs were on notice of the financing provision in the sales contract and have no possible fraud claim against Supreme Lending It is well settled law that a party asserting a cause of action for fraud must prove that it actually and justifiably relied on a misrepresentation made by the defendant. Atl. Lloyds Ins. Co. v. Butler, 137 S.W.3d 199, 225 (Tex.App.—Houston [1st Dist.] 2004, pet. denied); see also Ernst & Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 577 (Tex. 2001). Courts throughout Texas have examined fraud in the context of a lending relationship. In Bluebonnet Savings Bank, F.S.B. v, Grayridge Apartment Homes, Inc., the court noted the existence of a written contract in the lending context makes it harder for a party to show that it has relied on representations because the contract “itself is notice of binding duties.” 907 S.W.2d 904, 908 (Tex.App.—Houston [1st Dist.] 1995, writ denied). A party cannot claim it justifiably relied on a representation as a matter of law when the “undisputed or conclusively proven facts demonstrate circumstances under which reliance cannot be justified.” Samson Lone Star Ltd. P’ship v. Hooks, 497 S.W.3d 1, 16 n.4 (Tex.App.—Houston [1st Dist.] 2016, pet. denied). Here, Plaintiffs cannot recover for their claims for fraud for two reasons: (1) Plaintiffs cannot identify a single misrepresentation made by Supreme Lending to the Plaintiffs, and (2) 5 Plaintiffs cannot prove justifiable reliance as a matter of law. Simply put, Collier failed to meet the cash to close term of the Loan Estimate on September 18, 2020. What Plaintiffs try to allege here – that a lender to the putative purchaser can somehow be liable to the putative seller with whom there is no relationship or communication – is, frankly, absurd. A lender who does not communicate or represent anything to a putative seller of property cannot possibly be liable to that completely unrelated seller. There was no misrepresentation or any wrongful conduct on Supreme Lending’s part here whatsoever. Accordingly, Plaintiffs’ claims for fraud are baseless and due to be dismissed. 1 C. Supreme Lending was entitled to enforce the express terms of its agreement with the borrower and Plaintiffs have no possible tortious interference claim Supreme Lending had the clear right to enforce the terms of its agreement with the borrower. See Prudential Ins. Co. of Am. v. Fin Review Servs., Inc., 29 S.W.3d 74, 81 (Tex. 2008) (holding a plaintiff cannot recover for tortious interference against a defendant who was merely exercising its own contractual rights); see also ACS Investors, Inc. v. McLaughlin, 943 S.W.2d 426, 431 (Tex. 1997). In order to qualify for funding, Collier was required to have a specific amount of cash to close. Collier did not meet that express term and was denied a loan. (See Supreme Lending’s Original Answer, at Exs. A, B). As a matter of law, Supreme Lending’s enforcement of its own contract cannot constitute tortious interference. Gulf Liquids New River Project, LLC v. Gulsby Eng’g, Inc., 356 S.W.3d 54, 77 (Tex.App.—Houston [1st Dist.] 2011, no pet.) (“Enforcing or complying with one’s own valid contract does not constitute unjustifiable interference with another’s contact.”); see Friendswood Dev. Co. v. McCade Co., 926 S.W.2d 280, 1 Because Plaintiffs cannot recover against Supreme Lending for fraud, their request for exemplary damages must be denied. See Tex. Civ. Prac. & Rem. § 41.003; In re: Sunpoint Securities, Inc., 377 B.R. 513, 571-572 (E.D. Tex. 2007). 6 293 (Tex. 1996); see also Maynard v. Caballero, 752 S.W.2d 719, 721 (Tex.App.—El Paso 1988, writ denied). There cannot be any possible tortious interference on Supreme Lending’s part when they simply acted within the context of the agreement they had with Collier and had nothing to do with the Plaintiffs as the putative seller. Once again, Plaintiffs cannot utilize causes of action based in tort to circumvent Texas law to hold Supreme Lending liable for Plaintiffs’ failed real estate transaction with Collier. To suggest otherwise runs contrary to Texas law and well-established principles of real estate financing. Plaintiffs’ claims should not be allowed to survive. V. REQUEST FOR AWARD OF ATTORNEY’S FEES Rule 91a.7 provides that “the court may award the prevailing party on the motion [to dismiss] all costs and reasonable and necessary attorney fees incurred with respect to the challenged cause of action in the trial court. Any award of costs or fees must be based on evidence.” Tex. R. Civ. P. 91a.7. The court cannot consider any extrinsic evidence in ruling on the motion except when determining an award of attorney fees and costs. See Tex. R. Civ. P. 91a.6, 91a.7; see, e.g., Drake v. Chase Bank, No. 02-13-00340-CV, 2014 WL 6493411 (Tex. App.—Fort Worth 2014, no pet.) (memo op.; 11-20-14) (Defendant’s attorney submitted affidavit and presented live testimony to establish reasonable and necessary attorney fees). Supreme Lending will provide evidence of further reasonable and necessary attorney’s fees and costs at any hearing on this Motion. Plaintiffs’ claims against Supreme Lending here are a waste of the Court’s time. Because Plaintiffs’ causes of action against Supreme Lending fail, the Court should award Supreme 7 Lending all of its reasonable costs and reasonable and necessary attorney’s fees incurred in connection with this Motion. VI. CONCLUSION Plaintiffs’ causes of action for negligent misrepresentation, fraud, and tortious interference against Supreme Lending are meritless on their face and should be rejected out of the gate. There never was any representation from the lender to the putative seller of the property. Because there was no representation to Plaintiffs there can be no cause of action against Supreme Lending. Thus, for the reasons stated in this Motion, Supreme Lending respectfully requests the Court set this Motion for hearing in accordance with Texas Rule of Civil Procedure 91a, enter an order granting the Motion and dismissing all of Plaintiffs’ claims against Supreme Lending with prejudice, and awarding Supreme Lending its reasonable and necessary costs and fees, including attorney’s fees, associated with challenging Plaintiffs’ claims. VII. REQUEST FOR ORAL ARGUMENT Pursuant to Local Rule 3.17(D), Supreme Lending respectfully requests this Motion be set for oral argument. 8 Respectfully submitted, By: /s/ Gabriella E. Alonso GABRIELLA E. ALONSO Texas Bar No. 24113527 galonso@bradley.com ROBERT H. FORD Texas Bar No. 24074219 rford@bradley.com 600 Travis Street, Suite 4800 Houston, Texas 77002 (713) 576-0300 Telephone (713) 576-0301 Telecopier KEITH S. ANDERSON Texas Bar No. 24075789 kanderson@bradley.com One Federal Place 1819 Fifth Avenue North Birmingham, Alabama 35203 (205) 521-8000 Telephone (205) 488-6714 Telecopier ATTORNEYS FOR DEFENDANT EVERETT FINANCIAL, INC. D/B/A SUPREME LENDING CERTIFICATE OF CONFERENCE I do hereby certify that I have conferred with counsel for Plaintiffs via email and have not received a response. Therefore, this motion is opposed. /s/ Gabriella E. Alonso Gabriella E. Alonso 9 CERTIFICATE OF SERVICE I hereby certify that on the 15th day of July 2021, pursuant to the Texas Rules of Civil Procedure, a copy of the above and foregoing was served as follows to the following counsel of record: Via email: service@jdiamondandassociates.com; carla@jdiamondandassociates.com; taylor@jdiamondandassociates.com Carla Courtney Taylor Diamond J. Diamond and Associates, PLLC 730 North Loop Houston, Texas 77009 Attorneys for Plaintiffs /s/ Gabriella E. Alonso Gabriella E. Alonso 10 CAUSE NO. 20-CV-1458 STACEY DIAMOND AND § JEFFREY DIAMOND, § IN THE DISTRICT COURT OF § Plaintiffs, § § § v. § § BRADFORD WOOD COLLIER, § GALVESTON COUNTY, TEXAS EVERETT FINANCIAL, INC. d/b/a § SUPREME LENDING, TEXAS § ALLY REAL ESTATE GROUP, § LLC, and HENRY ADONIAS PU § PINEDA § § 122ND JUDICIAL DISTRICT Defendants. § FIAT PLEASE TAKE NOTICE than an oral hearing on Defendant Everett Financial, Inc. d/b/a Supreme Lending’s Rule 91a Motion to Dismiss will be held in the 122nd Judicial District Court, Galveston County, Texas at ___:___ a.m./p.m on the _________ day of ________________, 2021. SIGNED this_____ day of ______________, 2021. JUDGE PRESIDING 4847-0242-6866.1