Motion to Amend in Diverse Equity, LLC vs. Commonwealth Land Title Insurance Company, d/b/a Commonwealth Title of Houston, Inc., Et Al| Trellis.Law

On March 01, 2022 a Complaint,Petition was filed involving a dispute between Diverse Equity, Llc, and Abhashemi, Mahmoud Reza, Commonwealth Land Title Insurance Company, Russe, Dallas, Sr., for Contract - Debt - Commercial/Consumer in the District Court of Galveston County.

Preview
Filed: 5/30/2023 9:56 PM
JOHN D. KINARD - District Clerk
Galveston County, Texas
Envelope No. 76127013
By: Lisa Kelly
5/31/2023 8:20 AM

CAUSE NO. 22-CV-0332

DIVERSE EQUITY, LLC IN THE 56TH

V. JUDICIAL DISTRICT COURT

COMMONWEALTH LAND
TITLE INSURANCE COMPANY,
D/B/A COMMONWEALTH TITLE
OF HOUSTON, INC.;
AND MAHMOUD REZA ABHASHEMI GALVESTON COUNTY, TEXAS

PLAINTIFF, DIVERSE EQUITY, LLC’S, SECOND AMENDED PETITION

TO THE HONORABLE JUDGE OF SAID COURT:

Plaintiff, Diverse Equity, LLC, hereinafter sometimes referred to Plaintiff, files this, its

Second Amended Petition, against Commonwealth Land Title Insurance Company, d/b/a

Commonwealth Title of Houston, Inc., hereinafter sometimes referred to as “Defendant” and/or

“Commonwealth” (interference with the contract & professional defamation, deceptive trade

practices)); Defendant Dallas Russel, Sr., hereinafter and sometimes referred to as Russell

(interference with contract and professional defamation; deceptive trade practices), and

Mahmoud Reza Abhashemi, hereinafter sometimes referred to as “Abhashemi” for breach of

contract (Abhashemi). This Amended Petition is filed for purposes of narrowing the issues, and

alleging deceptive trade practices claims with more particularity. For good cause, Plaintiff

would show unto the Court as follows:

I. - Schedule 2

This case falls under Schedule 2 under the Texas Rules of Civil Procedure.

1
II. - Parties, Venue and Jurisdiction

Commonwealth Land Title Insurance Company, d/b/a Commonwealth Title of Houston,

Inc., has appeared and has answered in this case.

Mahmoud Reza Abashemi has appeared and has answered in this case.

Defendant Dallas Russel, Sr. has appeared and has answered.

At all times material to this action, Plaintiff has done business in both Harris and

Galveston County, with its offices located in Galveston County, Texas.

The contracts and agreements herein were executed in Harris Count, however, the real

property which is the subject of the contracts is located in Galveston County, Texas. Venue is

proper in either county. Plaintiff has elected to bring suit in Galveston County, Texas pursuant to

Texas Civil Practice and Remedies Code, section 15.002 (a)(1) and (a)(2).

III. – Foundational Facts - Contracts

On or about February 7, 2021, Plaintiff entered into a Purchase and Sales Agreement with

Defendant Abahashemi. The Purchase Agreement provided that Defendant Abashemi would sell

real property, bearing the municipal address of 5511 Avenue Q 1/2, Galveston Texas 77551, for

the price of $75,000.00.

“Special Provisions” was the title of a section of the contract between Plaintiff and

Defendant Abashemi, and which included the following agreed- upon notice(s) and/or term(s) by

the Buyer and Seller: [1] Buyer is in the market to purchase and sell property for a profit. [2]

Neither Buyer nor its representative is a licensed real estate broker or agent and is acting as

principal for its own interest. [3] Seller agrees to allow Buyer to market the property for resale

upon execution of this contract for its own interest, by any reasonable means, including the MLS,

and may disclose reasonable information concerning this purchase and sale. [4] seller expressly

2
permits Buyer to record in the real property records of the County for the Property a Memorandum

of Agreement to secure its interest in the Property. [5] Buyer and Seller have had the opportunity

to seek independent legal counsel. [6} Seller must allow on site access, provided a copy of the

main key or lock box access to allow investor viewing at all times, until closing.”

The following day, on or about February 8, 2021, Plaintiff delivered a copy of the

agreement, as well as a check, to the Commonwealth Defendants so that Commonwealth

Defendant would perform the requisite services to issue a policy of title insurance. Commonwealth

has offices in Webster, Harris County, Texas. The sum of $100.00 was deposited in escrow with

the Escrow Agent, Commonwealth of American title Company or Homeland Title. This sum was

agreed to by buyer and seller.

On or about February 9, 2021, Plaintiff entered a contract of assignment with respect to

the real property at 5511 Avenue Q ½, with David Smith and Tanner Plato; this contract was titled

“Agreement to Assign Contract for Sale and Purchase.” The Assignment agreement between

Diverse Equity and David Smith and Tanner Plato was signed in Defendant Commonwealth’s

offices. Language regarding assignment was found throughout the contract, including in

paragraph four, to-wit: “Buyer/Assignor hereby assigns all rights excluding all earnest money

deposits to said contract for sale and purchase to David Smith and Tanner Plato (Assignee[s]) in

exchange for compensation in the amount of $33,000.00 dollars.” This language is consistent with

Texas Occupations Code § 1101.0045, which provides the parameters of acquisition and

assignment of options or interests in real property. The contract also called for the payment of a

non-refundable deposit, with the Assignees accepting “all terms and conditions of the contract for

Sale and Purchase between Buyer and Seller in its entirety.” The document also set out numbered

3
sub-paragraph 3, “Assignee acknowledges receipt of legible copies of the original contract of Sale

and Purchase in its entirety including all Addendum(s) associated with this transaction.”

Closing on the assignment contract was scheduled at the same time as closing on the

Plaintiff signed February 26, 2021, at Commonwealth Title of Houston, Inc.’s, office address at

550 Westcott Street, in Houston, Texas. Closing on the subject property was scheduled for

February 26, 2021.

Defendant Mahmoud Reza Abashemi has breached the contract by his failure to close

pursuant to the contract and by his selling the property to a third party.

IV. Defendant Commonwealth’s flagging of Plaintiff’s contracted-for fee; interference
with Plaintiff’s contracts/imposition of additional conditions

On or about February 10, 2021, Valerie Mercure with the Defendant Commonwealth

transmitted an email to Diverse Equity noting issues with the assignment fee and disclosure to the

seller. Commonwealth posited that the “buying for profit clause” was not sufficient for this type

of disclosure and “as the clause is written, Commonwealth Title of Houston would need to disclose

the assignment fee to the seller. The assignor must agree to this by email confirmation to title.”

Mercure’s email stated that Plaintiff’s assignment fee was exorbitant, by comparison to

traditional assignment fees, holding out “any amount over a 10% markup would be considered

exorbitant by underwriting and may require a double closing.” Mercure informed Diverse Equity’s

agent Joseph Robinson that it would have to do a double closing due to what

Mercure/Commonwealth unilaterally deemed an excessive/exorbitant “markup.”

Subsequently, on February 11, 2021, Commonwealth Land Title Insurance Company

issued a “Commitment for Title Insurance” to Plaintiff, as Purchaser of the property. The

Commitment expressly provided that a policy of title insurance would issue upon compliance with

certain conditions, contained in “Schedule C” of the Commitment.

4
Plaintiff fulfilled all requisite conditions. The Commitment Number was

2635032100062. The Commitment stated that it was valid and binding for a period of “ninety

(90) days from the effective date, unless the Policy is issued sooner, or failure to issue the Policy

is our fault. Our liability and obligations to you are under the express terms of this Commitment

and end when this Commitment ends.”

The Commitment was signed by Valerie Mercure for Commonwealth Title of Houston;

Randy Quirk, President; and Marjorie Nemzura, Security, Commonwealth Land Title Insurance

Company; exemptions from Coverage are set out on pages 3 and 4 of the Commitment (Schedule

B). None of the exceptions listed contains any of the language imposed by Mercure in her directive

of February 10, 2021, regarding disclosure to the seller of the “markup.”

Nevertheless, Plaintiff obtained funding to do a double closing, as directed by Mercure.

Schedule B, Exception #6 contradicts Commonwealth’s stance regarding the need for a double

closing; that clause specifically states that the following is excluded from the policy commitment

terms and conditions: “The terms and conditions of the documents creating your [Diverse Equity,

LLC’s] interest in the land.” In other words, Defendants had no business interest in interfering

with the terms and conditions of the Plaintiff’s interest in the land; an underwriter has no interest

in or standing to dictate conditions of terms which it has specifically excluded from coverage.

After Commonwealth/Mercure’s communication to Plaintiff on February 10,

Defendant Abashemi began to move away from the contract with Plaintiff. Plaintiff’s

representative had a conversation with Defendant Abashemi’s spouse, who informed expressed

dissatisfaction with the double closing. Commonwealth’s intentional conduct interfered with

Plaintiff’s contract with Defendant Abashemi.

The elements of tortious interference with contract are (1) existence of a contract subject

5
to interference, (2) willful and intentional interference, (3) interference that proximately caused

damage, and (4) actual damage or loss. Plaintiff had a contract with Defendant Abashemi.

Defendant intentionally interfered with the contract between Plaintiff and Defendant

Abashemi, by refusing to assist Plaintiff unless and until Plaintiff conducted an additional closing;

that is, unless Plaintiff agreed to first purchase the property, and then to sell the property as a

discrete second transaction. Such separate transaction was not required by the title company’s

Commitment for Title Insurance, nor was it required by law.

Plaintiff did attempt to arrange a double closing, obtaining transactional funding at an

additional cost of $1,500.00.

Plaintiff’s agent for transactional funding, David Cruise, began attempting to arrange the

mandated double closing with Defendant Commonwealth. Cruise reached out to Commonwealth

directly, but Commonwealth refused to tender information surrounding the closing.

Plaintiff had a second contract with Assignees Smith and Plato.

Of course, the second transaction, with Plaintiff’s Assignees Smith and Plato, was to be

scheduled after closing with Defendant Abashemi. Defendant Commonwealth failed or refused to

communicate with either Plaintiff or Plaintiff’s agent for transactional funding regarding

scheduling, but also failed or refused to reschedule the closing with Defendant Abashemi.

In this way, Defendant Commonwealth sought to conceal its wrongdoing and deflect

blame for the failure of the deal. After Defendant Commonwealth flagged Plaintiff’s assignment

contract as exorbitant, Defendant Abahashemi reneged on his deal with Plaintiff. The property was

ultimately sold to another party. The terms of both of Plaintiff’s contracts were lawful. Even

though Plaintiff’s arrangement of a double closing would have resolved Commonwealth’s

concerns, some damage had already been done – Defendant Commonwealth’s having flagged

6
Plaintiff’s fee as exorbitant had already poisoned the relationship between Plaintiff and Defendant

Abashemi. Defendant Commonwealth then refused to repair the damage it had caused and

worsened it by refusing to reach out to Defendant Abashemi to reschedule and refusing to

communicate with Plaintiff regarding scheduling.

Both because of Defendant Commonwealth essentially labeling Plaintiff’s fee as

Extortion (David Russell the agent generating the poisonous email), and because of its subsequent

recalcitrance in rescheduling, Plaintiff’s contracts with Defendant Abashemi, as well as Assignees

Smith and Plato, fell apart. Plaintiff lost its contracted-for fee, as well as money spent in attempting

to facilitate closing/transactional funding.

V. – PROFESSIONAL/BUSINESS DEFAMATION

By flagging Plaintiff’s fee as over three times the rate of an acceptable fee,

Commonwealth essentially accused Plaintiff of extortion, working to tarnish Diverse Equity’s

good name. These adverse and hostile statement took place by the dissemination of emails by

David Russell and a Valerie McClure and David Russell conversation with Diverse Equity’s

representative, Joseph Robinson and to other third parties. The statements worked to interfere with

the contract, but once shared affected the Plaintiff’s reputation in the business community and

potential of making additional business.

VI. – DECEPTIVE TRADE PRACTICES ACT

Defendant Commonwealth and Dallas Russell’s actions violated the Deceptive Trade

Practices Act in the following respects:

a. Defendant Commonwealth, as a title company, held itself out as a neutral agent for all

parties to the transaction. By flagging a contract to which it had not been a party, and

7
imposing conditions not required by law or under its own policy/ commitment to

issue title insurance;

b. Defendant Commonwealth told Plaintiff his contract was illegal, exorbitant and what

wrong with the industry and against public policy.

c. In violation of the Texas Deceptive trade Practice – Consumer Protection Act section

17.456b: “disparaging the goods, services or business of Plaintiff internally in

Defendant’s institution and with third parties.

d. In so doing, Defendant disparaged the services or business of Plaintiff by falsely

and/or misleadingly representing the facts, in violation of Tex. Bus. & Comm. Code §

17.46(b)(8).

e. Due to Commonwealth and Russell’s actions, as set forth hereinabove, Plaintiff

incurred economic damages. To its detriment, Plaintiff relied upon Commonwealth’s

express or implied warranty that, as a title company, it would conduct itself as a

neutral agent for all parties to the transaction, and not as an advocate for or against

any party thereto.

VII. – DEMAND FOR TRIAL BY JURY, AND DAMAGES

Plaintiff demands a trial by jury after service and answer by Defendants. Plaintiff prays

for findings of liability by Defendants, and for damages, as follows:

a. A finding of breach of contract by Defendants Abahashemi and Commonwealth.

b. The loss of the sale and profits associated with Plaintiff’s contract.

c. Loss of monies expended in seeking to close the sale and fulfill the contract.

d. A finding of tortious/intentional interference with Plaintiff’s contract by the

Commonwealth Defendants.

8
e. A finding of professional / business defamation and damages associated with

Commonwealth’s agents' acts.

f. Special damages as permitted for professional/business defamation of Diverse Equity’s

reputation and the consequences wrought by Defendants’ conduct.

g. Damages available to Plaintiff pursuant to the Texas Deceptive Trade Practices Act,

including treble damages, attorney’s fees, and costs.

h. Reasonable and necessary attorney’s fees expended and incurred by Plaintiff.

i. Costs of court.

j. Pre-judgment and post-judgment interest associated with Plaintiff’s damages.

k. All matters in law and equity Plaintiff may be deemed entitled.

DATE: May 30, 2023.

Respectfully Submitted By:

/S/ ELLYN J. CLEVENGER
__________________________
Ellyn J. Clevenger (#32395)
1115 Moody Avenue
Galveston, Texas 77550
409.621.6440
ellynclevenger@gmail.com

9
CERTIFICATE OF SERVICE

On this 3rd Day of May 2023, undersigned counsel certifies that the foregoing document,

Plaintiff’s First Amended Petition, was served on Counsel of Record by electronic service, in

accordance with the Texas Rules of Civil Procedure, at the time of filing thereof, to-wit:

Roland G. Hamilton
Chris C. Pappas
5151 San Felipe, Suite 800
Houston, Texas 77056
rhamilton@krcl.com
cpappas@kcrl.com

Brandon Hakari
Fidelity National Law Group
6900 Dallas Parkway, Suite 610
Plano, Texas 75024
brandon.hakari@fnf.com

Thomas McQuage
P.O. Box 16894
Galveston, Texas 77552
mcquage@swbell.net

/s/ Ellyn J. Clevenger
Ellyn J. Clevenger

10
Automated Certificate of eService
This automated certificate of service was created by the efiling system.
The filer served this document via email generated by the efiling system
on the date and to the persons listed below. The rules governing
certificates of service have not changed. Filers must still provide a
certificate of service that complies with all applicable rules.

Ellyn Clevenger on behalf of Ellyn Clevenger
Bar No. 24058662
ellynclevenger@gmail.com
Envelope ID: 76127013
Filing Code Description: Amended Petition
Filing Description: Pltf's Second Amended Petition
Status as of 5/31/2023 8:21 AM CST

Associated Case Party: Diverse Equity, LLC