Preview
Filed: 9/5/2023 12:00 AM
JOHN D. KINARD - District Clerk
Galveston County, Texas
Envelope No. 79190053
By: Shailja Dixit
9/5/2023 8:24 AM
CAUSE NO. 22-CV-0332
DIVERSE EQUITY, LLC IN 56TH JUDICIAL DISTRICT
V. JUDICIAL COURT
COMMONWEALTH LAND TITLE
INSURANCE COMPANY, D/B/A
COMMONWEALTH TITLE OF
HOUSTON, MAHMOUD REZA
ABAHASHEIMI GALVESTON COUNTY, TEXAS
PLAINTIFF, DIVERSE EQUITY, LLC.’S RESPONSE TO
DEFENDANT, DALLAS RUSSELL, SR. AND COMMONWEALTH LAND
TITLE INSURANCE COMPANY’S MOTIONS FOR SUMMARY JUDGMENT
TO THE HONORABLE JUDGE OF SAID COURT:
Plaintiff, Diverse Equity, LLC, files this his response to Defendant, Dallas Russell, Sr. and
Commonwealth Land Title Insurance Company’s Motions for Summary Judgment. For good
cause, Plaintiff would show unto the Court as follows:
I. – CURRENT STATUS OF DISCOVERY.
Discovery is not substantially complete in that the parties have exchanged written
discovery, and the Plaintiff has filed a motion to compel, requesting the Court order Defendants to
provide full and complete answers to the written discovery. The motions to compel have not been
heard by the Court. The parties have not conducted depositions. Although the matter is ripe for
summary judgment consideration, the matter is not ripe for trial. The parties need roughly another
sixty (60) days to complete discovery prior to a trial setting in this matter.
1
II. - SUMMARY JUDGMENT STANDARD.1
The summary judgment standards are often repeated. Repeating the standards once more
in this case makes clear summary disposition would be improper and imprudent at this stage.
The burden is on the movant. The movant must show that no genuine issue of material fact
exists, and that the movant is entitled to judgment as a matter of law. Wright v. Greenberg, 2 S.W.
3d 666, 670 (Tex. App.—Houston [14th Dist.] 1999, pet. denied) (citing Nixon v. Mr. Prop. Mgmt.
Co., 690 S.W. 2d 546, 548–49 (Tex. 1985). If the movant makes this showing, then the burden
shifts to the non-movant to raise a genuine issue of material fact sufficient to defeat summary
judgment. Walker v. Harris, 924 S.W. 2d 375, 377 (Tex. 1996). In determining whether an issue
of material fact exists, which would preclude summary judgment, evidence favoring the non-
movant is taken as true, and all reasonable inferences are indulged in favor of the non-movant. Id.
In this case, Defendants have moved for summary judgment on two grounds – traditional and no-
evidence. Summary judgment should be denied.
A. Traditional Motion for Summary Judgment.
To obtain relief through a traditional motion for summary judgment, the movant must
establish that no issue of material fact exists and that it is entitled to judgment as a matter of law.2
A defendant who moves for summary judgment must either disprove at least one element of each
1
For an exhaustive discussion of summary judgment standard(s), see Judge David Hittner and Lynn
Liberato, Summary Judgments in Texas: State and Federal Practice, South Texas College of Law Review,
Vol. 60:1 (2019), last visited September 4, 2023, http://www.stcl.edu/wp-
content/uploads/2018/03/Summary-Judgments-Final.pdf.
2
TEX. R. CIV. P. 166a(c); Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W. 3d 844, 848
(Tex. 2009); SAS Inst., Inc. v. Breitenfeld, 167 S.W. 3d 840, 841 (Tex. 2005) (per curiam); Sw. Elec. Power
Co. v. Grant, 73 S.W. 3d 211, 215 (Tex. 2002).
2
of the plaintiff’s causes of action, or must plead and conclusively establish each essential element
of any affirmative defense, thereby rebutting the plaintiff’s causes of action. 3
An issue is conclusively established “if reasonable minds could not differ about the
conclusion to be drawn from the facts in the record.”4 If the movant’s motion and summary
judgment evidence facially establish the movant’s right to judgment as a matter of law, the burden
shifts to the non-movant to raise a genuine, material fact issue sufficient to defeat summary
judgment.5
A fact is material when it “affects the ultimate outcome of the suit under the governing
law.”6 “A material fact issue is ‘genuine’ only if the evidence is such that a reasonable jury could
find the fact in favor of the nonmoving party.”7
B. No Evidence Motion for Summary Judgment.
Texas Rule of Civil Procedure 166a(i) reflects that no-evidence motions for summary
judgment require much less from the movant than do motions for traditional summary judgment.
“Under Rule 166a(i), a party may move for summary judgment on the ground that there is no
evidence of one or more essential elements of a claim or defense on which an adverse party would
have the burden of proof at trial.”8 The movant need not produce any evidence supporting its no-
3
Nassar v. Liberty Mut. Fire Ins. Co., 508 S.W. 3d 254, 257 (Tex. 2017); Cathey v. Booth, 900 S.W. 2d
339, 341 (Tex. 1995) (per curiam).
4
Cmty. Health Sys. Prof’l Servs. Corp. v. Hansen, 525 S.W. 3d 671, 681 (Tex. 2017) (citing Childs v.
Haussecker, 974 S.W. 2d 31, 44 (Tex. 1998)).
5
M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W. 3d 22, 23–24 (Tex. 2000) (per curiam).
6
Rayon v. Energy Specialties, Inc., 121 S.W. 3d 7, 11 (Tex. App.—Fort Worth 2002, no pet.) (citing
Lampasas v. Spring Ctr., Inc., 988 S.W.2d 428, 433 (Tex. App.—Houston [14th Dist.] 1999, no pet.)).
7
Id. at 11–12.
8
W. Invs., Inc. v. Urena, 162 S.W. 3d 547, 550 (Tex. 2005).
3
evidence motion.9 Instead, the mere filing of a proper motion shifts the burden to the nonmovant
to come forward with enough evidence to raise a genuine issue of material fact. 10 If the non-movant
does not do so, the court must grant the motion. As the Court will see, there are no bases for
granting a motion for summary judgment under either standard.
III. - UNDERLYING FACTS.
This case involves an assignment contract, which Defendant Commonwealth, who should
have been acting as the neutral third-party title company, inserted itself into. Defendant
Commonwealth arbitrarily interpreted contract terms - in a way that reflects neither the law nor
industry practice – and worked against Plaintiff Diverse Equity. Plaintiff lost the contract, and a
substantial amount of money.
Plaintiff purchases and sells property for a profit. One source of income for the Plaintiff
involves seeking out bargain properties – for example, distressed properties - and then locating
buyers for the property, who may be willing to remodel or “flip” the property. In this context,
Plaintiff makes a profit from researching, marketing, and negotiating property transactions. 11
Once a property has been located; an agreement to sell has been negotiated with the
property owner; the research has been done; a buyer has been located, and an agreement to
purchase has been negotiated, then the sale must be transacted. One way of doing this is by an
9
TEX. R. CIV. P. 166a(i); Home State Cty. Mut. Ins. Co. v. Horn, No. 12-07-00094-CV, 2008 WL 2514332,
at *2 (Tex. App.—Tyler June 25, 2008, pet. denied) (mem. op.) (citing Judge David Hittner & Lynne
Liberato, Summary Judgments in Texas, 34 HOUS. L. REV. 1303, 1356 (1998)); Branson v. Spiros
Partners Ltd., No. 04-07-00007-CV, 2007 WL 4547502, at *2 (Tex. App.—San Antonio Dec. 28, 2007, no
pet.) (mem. op.) (citing Judge David Hittner & Lynne Liberato, Summary Judgments in Texas, 34 HOUS.
L. REV. 1303, 1356 (1998)).
10
Home State Cty. Mut. Ins. Co., 2008 WL 2514332, at *2.
11
See Exhibits 1 and 2.
4
assignment contract. In such a contract, the Plaintiff assigns its right to purchase the property to a
third party. Like anyone, Plaintiff does this for a profit.
The operative pleading on file is the Plaintiff’s Second Amended Petition:
The formation of the contract between Plaintiff and Abahashemi.
On or about February 7, 2021, Plaintiff entered into a Purchase and Sale 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 (attached as Plaintiff’s Summary Judgment Exhibit 1, see Joseph
Robinson’s unsworn declaration under Plaintiff’s Summary Judgment Exhibit 2).
“Special Provisions” was the title of a section of the contract between Plaintiff and
Defendant Abashemi 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 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.” (Plaintiff’s Summary
Judgment Exhibit 1).
5
The following day, on or about February 8, 2021, Plaintiff delivered a copy of the Purchase
and Sale agreement, as well as an earnest money check, to Defendant Commonwealth (Plaintiff’s
Summary Judgment Exhibits 1 and 3).
The day after delivering the earnest money check and Purchase and Sale Agreement – 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. The contract was titled
“Agreement to Assign Contract for Sale and Purchase” (Plaintiff’s Summary Judgment Exhibit
4). The Assignment Agreement between Diverse Equity and David Smith and Tanner Plato was
signed in Defendant Commonwealth’s offices (see Declaration, Exhibit 2; Assignment
Agreement, Exhibit 4).
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.” (Exhibit 4).
This language is consistent with Texas Occupations Code § 1101.0045, 12 which provides
the parameters of acquisition and assignment of options or interests in real property. The contract
12
Texas Occupations Code § 1101.0045:
Sec. 1101.0045. EQUITABLE INTERESTS IN REAL PROPERTY. (a) A person may acquire
an option or an interest in a contract to purchase real property and then sell or offer to sell the
option or assign or offer to assign the contract without holding a license issued under this chapter
if the person:
(1) does not use the option or contract to purchase to engage in real estate brokerage; and
(2) discloses in writing the nature of the equitable interest to any seller or potential buyer.
(b) A person selling or offering to sell an option or assigning or offering to assign an interest in
a contract to purchase real property without disclosing the nature of that interest as provided by
Subsection (a)(2) is engaging in real estate brokerage.
Added by Acts 2017, 85th Leg., R.S., Ch. 974 (S.B. 2212), Sec. 1, eff. September 1, 2017.
Amended by:
Acts 2023, 88th Leg., R.S., Ch. 94 (S.B. 1577), Sec. 4, eff. January 1, 2024.
6
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 contract also set out, in numbered 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.” Id. Plaintiff complied with the explicit provisions
of the contract and provided notice to all parties associated with the contract in question and Texas
Occupation Code § 1101.0045 (Plaintiff’s Summary Judgment Exhibit 2; Exhibit 4).
Under ordinary circumstances, the contract would have been executed and the sales
transaction completed. However, the facts in this case are not ordinary.
Commonwealth has offices in Webster, Harris County, Texas. The sum of $100.00 was
deposited in escrow with Commonwealth Title of Houston. This sum was agreed to by the buyer
(Plaintiff, Diverse Equity) and seller (Defendant Mahmoud Abahashemi). See Exhibit 1 (copy of
the Purchase and Sale Agreement, containing the agreed-upon earnest money deposit) and Exhibit
3 (copy of the earnest money check, deposited into escrow with Commonwealth Title of Houston).
Closing on the Assignment contract was scheduled to take place at the time of closing on
the Sale. The transactions were set to take place on February 26, 2021, at Commonwealth Title of
Houston’s office address at 550 Westcott Street, in Houston, Texas. See Exhibit 2. However, due
to Defendants’ actions, the transactions were never completed.
Intervening facts
On or about February 10, 2021, Valerie Mercure, an employee of Defendant
Commonwealth, transmitted an email to Plaintiff Diverse Equity, noting “the assigned contract
must meet certain standards mandated by Fidelity National in order for us to handle these types of
transactions.” (Plaintiff’s Summary Judgment Exhibit 5). The first issue raised by the email
7
related to the nonrefundable deposit toward the assignment fee. Id. The Assignment contract stated
the Plaintiff (Buyer/Assignor) would collect this nonrefundable deposit from the Assignees (Smith
and Plato) before the closing date (Exhibit 4).
Mercure clarified that this nonrefundable deposit was to be paid “under the terms of the
contract as written” and not deposited with Defendant Commonwealth Title. Interestingly,
Mercure stated the deposit must be paid per the contract because “[Commonwealth] Title cannot
interpret the terms of the contract and unilaterally agree with one party over the other.” Id.
However, with respect to the second issue raised in the email, Commonwealth did exactly
that. Mercure stated that Commonwealth was obligated to disclose the assignment fee to the seller,
opining the clause (in the Sale Agreement, at Exhibit 1) stating “buyer is in the market to purchase
and sell real estate for a profit” was an insufficient disclosure. (Exhibit 5). Mercure instructed that
Plaintiff “must agree” to Commonwealth making this disclosure to the seller. Id.
Notably, in the context of purchasing an option or interest in a contract to purchase real
property, the Occupations Code requires disclosure of “the nature of” the interest acquired – it
does not require disclosure of any amount. It does not, for example, require disclosure of “the
amount paid by any third party to whom the buyer has opted to resale the property;” it does not
require disclosure of “the amount of the fee charged to any third person, if such fee exceeds 10%
of the amount for which the buyer has agreed to purchase the property from seller.”
As stated by Mercure, the Purchase and Sales Agreement provided that the Plaintiff was in
the market to purchase and sell real estate. The Agreement also provided that the Seller was
agreeing to allow the Plaintiff to “market the property for resale upon execution of this contract
for its own interest,” and to allow the Plaintiff to “record in the real property records of the County
for the property a Memorandum of Agreement to secure its interest in the Property.” (Exhibit 1).
8
Obviously, Plaintiff does not have the gift of precognition. Plaintiff would have been
unable to provide the terms of a contract which had not yet been negotiated. Plaintiff most
assuredly provided the nature of its interest in the property, however, as required by law.
Nevertheless, Commonwealth decided to interpret the contract terms as legally insufficient,
requiring Plaintiff to agree to Commonwealth informing the Seller of the amount of the fee that
the Plaintiff would receive from the third-party Assignee, stating “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.”
Commonwealth’s email characterized Plaintiff’s fee as “[a] 50% markup[,]” instructing
“[f]urthermore, a traditional assignment fee is generally not exorbitant as this one is. Any
assignment fee that is 10% of the original sales price is automatically approved by title. Any
amount over the traditional 10% must be approved by underwriting. A 50% markup would be
considered exorbitant by underwriting and may require a double closing” 13 (Exhibit 5).
From the top, characterizing Plaintiff’s fee as a “markup,” which is the term used for the
amount added to the cost of goods to ensure a profit margin, shows that Defendant has taken the
position that Plaintiff’s contract is illegal (similar to price-gouging). The ostensibly rational tone
of this email belies the fact that there is no such thing as a “traditional assignment fee” in real
estate assignment contracts. Real estate wholesalers such as the Plaintiff earn a living by
legitimately seeking out bargains on property, and then finding buyers who may be willing to
13
A “double closing” contemplates two separate transactions: one in which the buyer/assignor (Plaintiff,
Diverse Equity in this case) purchases the property from the seller (Defendant Abahashemi), with the
buyer/assignor (Plaintiff Diverse Equity)’s funds. This would be the first closing. Diverse Equity would
then sell the property to a third party (originally the assignor). This would be the second closing. See
Exhibit 2.
9
remodel or “flip” the property. Like anyone, this is done for a profit. Plaintiff makes a profit from
researching, marketing, and negotiating property transactions.
When Plaintiff’s agent Joseph Robinson received the email from Commonwealth, he
picked up the phone and called Dallas Russell, Sr., the source of the email (“[h]e is our resident
expert on assignment contracts”) particularly as related to the use of the word “exorbitant,” which
was emphasized by its use – twice- in Mercure’s email.14 Again, Mercure had informed that “a
traditional fee is not exorbitant as this one is” and that Plaintiff’s fee “would be considered
exorbitant by underwriting.” Exhibit 5.
The statement was concerning to Robinson, in that Defendant Commonwealth was
informing Plaintiff his contract/conduct was outside the scope of the law – illegal. Robinson called
Russell, who Robinson knew to be the source of the email (also the owner/principal of
Commonwealth, see Plaintiff’s Summary Judgment Exhibit 6) on the date of receiving the
email. When Robinson inquired as to the meaning of the email, Russell expounded to a greater
extent; Robinson stated: “we talked on the phone. [Russell] called me back on my cell. He told me
14
Merriam Webster Dictionary defines exorbitant as follows:
Exorbitant adjective
ex·or·bi·tant ig-ˈzȯr-bə-tənt
Synonyms of exorbitant
: not coming within the scope of the law
: exceeding the customary or appropriate limits in intensity, quality, amount, or size
exorbitantly adverb
Last visited September 4, 2023, https://www.merriam-webster.com/dictionary/exorbitant
10
the contract was illegal, 15 my terms were exorbitant and predatory.16 He was screaming. I was too.
I was driving at the time and I asked him to send an email. What was written does not contain all
15
The use of words to describe the contract is important – the plain meaning of the words and the answers
provided are critical to the interference claim and the reputation attack by Dallas Russell and
Commonwealth.
Illegal is defined thusly:
illegal
1 of 2
adjective
il·le·gal (ˌ)i(l)-ˈlē-gəl
Synonyms of illegal
: not according to or authorized by law : UNLAWFUL, ILLICIT
also: not sanctioned by official rules (as of a game)
illegality
ˌi-li-ˈga-lə-tē
noun
illegally
(ˌ)i(l)-ˈlē-gə-lē
adverb
Last visited on September 4, 2023, https://www.merriam-webster.com/dictionary/illegal.
16
Predatory is defined as follows
predatory
adjective
pred·a·to·ry ˈpre-də-ˌtȯr-ē
Synonyms of predatory
1
a
: of, relating to, or practicing plunder, pillage, or rapine
b
: inclined or intended to injure or exploit others for personal gain or profit
predatory pricing practices
2
: living by predation : PREDACEOUS
also : adapted to predation
Last visited on September 4, 2023, https://www.merriam-webster.com/dictionary/predatory.
11
of the statements he made to me, including his intent to tell my seller [whether or not I agreed].
He obviously followed up on his promise in that seller began to ghost me, avoiding phone calls
and closing. The contract was legal. The contract in question is used on a regular basis, in the
business of buying and selling real estate. In a consumer-based industry - such as real estate - to
be told you are acting in an illegal, exorbitant, predatory fashion is insulting and defamatory – this
is the reason I was demanding an explanation.”
In the email sent by Valerie Mercure, Russell/Commonwealth attempted, post-hoc, to tone
down the verbal assertions. Russell also attempted to dial his verbal statements down when
answering the interrogatories forwarded to him (Plaintiff’s Summary Judgment Exhibit 6, see
answers to 1 & 2). Again, exorbitant means illegal, or outside of the scope of the law. In addition,
Defendant Russell admits to the conversation, but now purports to not remember when the
conversation took place. Regardless, Defendant Russell and Commonwealth’s conduct was
unwarranted and tortious.
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.
Plaintiff fulfilled all requisite conditions. The Commitment Number was 2635032100062;
a true and correct copy of the Commitment is attached hereto as Plaintiff’s Summary Judgment
Exhibit 7. 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.” Id.
12
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. Id.
Nevertheless, Plaintiff obtained funding to do a double closing, as directed by Mercure
(Exhibit 2). Schedule B, Exception #6 (Exhibit 7) 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 (Exhibit 2). Plaintiff’s
representative had a conversation with Defendant Abashemi’s spouse, who informed expressed
dissatisfaction with the double closing and referenced the contract as being “illegal” (Plaintiff’s
Summary Judgment Exhibit 2). It was clear to Plaintiff that Commonwealth and Russell’s
intentional conduct interfered with Plaintiff’s contract with Defendant Abashemi.
Tortious Interference 17
17
See, e.g. Hart v. Manriquez Holdings, LLC., 661 S.W. 3d 432, 439 (Tex. App. – Houston [14th Dist.] 2023,
no pet.); Reg’l Specialty Clinic, P.C., P.A. v. S.A. Randle & Assoc., P.C., 625 S.W. 3d 895, 902 (Tex. App.
– Houston [14th Dist.] 2021, no pet.); W. Mktg., Inc. v. AEG Petroleum, LLC., 616 S.W. 3d 903, 921 (Tex.
App. – Amarillo 2021), opinion modified on reh’g, 621 S.W. 3d 88 (Tex. App. – Amarillo 2021, pet.
denied); All Am. Tel., Inc. v. USLD Commc’ns, Inc., 291 S.W. 3d 518, 532 (Tex. App. – Fort Worth 2009,
pet. denied). These cases assume the facts that most commonly give rise to tortious interference claim: a
13
The elements of tortious interference with contract are (1) existence of a contract subject
to interference, (2) willful and intentional interference, (3) interference that proximately caused
damage, and (4) actual damage or loss. Summary judgment is and would be improper for both
Defendant Russell and Commonwealth.
Defendant Commonwealth intentionally interfered with the contract between Plaintiff and
Defendant Abahashemi, by informing Abahashemi of the amount (not the “nature,” as required by
law) of the “exorbitant” fee Plaintiff was charging the third-party assignee (Exhibit 5). Defendant
Commonwealth also intentionally interfered with the contract by refusing to assist Plaintiff unless
and until Plaintiff conducted an additional closing (id.); 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 (id.; Exhibit 7). This caused a delay in closing, interfering with the Plaintiff’s
contract with Abahashemi, encouraging the Plaintiff’s deal with Abahashemi to grow cold (Exhibit
2).
Plaintiff did obtain transactional funding (at an additional cost of $1,500.00) to do a double
direct communication between the alleged tortfeasor and the party being induced to breach the contract.
Additionally here, the tortfeasor was not a party to the contract between Diverse Equity and Defendant
Abahashemi. It had no right to insert itself into that contract; in fact, it had an obligation, as a neutral third
party, not to do so.
A tortious interference with contract claim requires the plaintiff to prove that the defendant willfully and
intentionally interfered with the contract. Butnaru v. Ford Motor Company, 157 S.W. 3d 142 (Tex. App.—
Austin 2005). To show a willful and intentional act of interference, the plaintiff must produce some
evidence that the defendant was more than a willing participant and knowingly induced one of the
contracting parties to breach its obligations under a contract; specifically, the plaintiff must show that the
interfering party (1) had actual knowledge of the existence of a contract between the plaintiff and a third
party, or (2) had knowledge of facts and circumstances that would lead a reasonable person to conclude that
a contract existed. Jannise v. Enter. Prods. Operating LLC , No. 14-18-00516-CV, 2019 WL 3432171, at
*5 (Tex. App.—Houston [14th Dist.] July 30, 2019, no pet.) (mem. op.).
14
closing, but Commonwealth refused to communicate with Plaintiff’s agent for transactional
funding (Exhibit 2). 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. Exhibit
2.
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. 18 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
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 (Exhibit 2).
Both because of Defendant Commonwealth essentially labeling Plaintiff’s fee as
18
To prevail on a breach-of-contract claim, a plaintiff must prove (1) a valid contract existed between the
plaintiff and the defendant, (2) the plaintiff tendered performance or was excused from doing so, (3) the
defendant breached the terms of the contract, and (4) the plaintiff sustained damages as a result of the
defendant's breach. West v. Triple B Servs., LLP, 264 S.W.3d 440, 446 (Tex. App.-Houston [14th Dist]
2008, no pet.). See also Valero Mktg. & Supply Co. v Kalama Int'l, LLC, 51 S.W.3d 345, 351 (Tex.App.-
Houston [1st Dist] 2001, no pet.); see also Bridgmon v. Array Sys. Corp., 325 F.3d 572, 577 (5th Cir.2003);
Henderson-Smith & Assocs., Inc. v. Nahamani Family Serv. Ctr., 323 Ill.App.3d 15, 256 Ill. Dec. 488, 752
N.E.2d 33, 43 (2001). In the facts in question, Plaintiff has proven all the elements associated with the
illegal contract and Defendant Abashemi vitiating the contract – at no fault of Plaintiff. Summary
judgment/disposition would be improper.
15
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 (Exhibit 2).
professional/business defamation 19
By flagging Plaintiff’s contract as being exorbitant, illegal, outside the law, and a
“markup,” Commonwealth/Russell engaged in the act of professional defamation. The comments
to the customer accused Plaintiff of extortion, and worked to tarnish Diverse Equity’s good name.
These adverse and hostile statement took place by the dissemination of emails by David Russell
and Valerie Mercure, pursuant to conversations 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 (id.).
Breach of Contract20
19
The declaration of Joseph Robinson supports the false nature of the statement made by Russell and/or
Commonwealth. The Texas Supreme Court recently stated the elements of defamation as follows:
[A] plaintiff must show (1) the publication of a false statement of fact to a third party[;] (2) that
was defamatory concerning the plaintiff[;] (3) with the requisite degree of fault, at least
amounting to negligence[;] and (4) damages, in some cases. A defamatory statement is one that
"tends [] to harm the reputation of another as to lower him in the estimation of the community or
to deter third persons from associating or dealing with him."
Innovative Block of S. Tex., Ltd. v. Valley Builders Supply, Inc., 603 S.W.3d 409, 417 (Tex. 2020)
(citations omitted).
20
The essential elements in a suit for breach of contract are: (1) the existence of a valid contract; (2) the
plaintiff performed or tendered performance; (3) the defendant breached the contract; and (4) the plaintiff
was damaged as a result of the breach. Bank of Tex. v. VR Elec., Inc., 276 S.W. 3d 671, 677 (Tex. App.—
Houston [1st Dist.] 2008, pet. denied). Furthermore, a party seeking to recover under a contract bears the
burden of proving that all conditions precedent have been satisfied. CDI Eng'g Group, Inc. v. Admin. Exch.,
Inc., 222 S.W. 3d 544, 548 (Tex. App.--Houston [14th Dist.] 2007, pet. denied) (citing Associated Indem.
16
The contract was a valid legal contract and was fulfilled and fully executed by
Abahashemi (Exhibit 1). There is no question Abahashemi breached his contract with the
Plaintiff.
Commonwealth contracted with Plaintiff to provide a policy of title insurance (Exhibit 7),
but took action to ensure that fulfillment of its own end of the bargain was impossible (Exhibit 7;
Exhibit 2). Commonwealth also breached its implied contract to act as a neutral third party
servicer to the Plaintiff.
Remaining allegation in the pleading – deceptive trade practice.
The remaining allegation is one of deceptive trade practice. Commonwealth as a title
company is not exempt from the Deceptive Trade Practices Act. The ability of Plaintiff under
other theories and the DTPA is not exclusive. 21 Plaintiff is a consumer and the title company and
Corp. v. CAT Contracting, Inc., 964 S.W. 2d 276, 283 (Tex. 1998)). In an option contract, strict compliance
with the provisions of the option contract is required. Besteman v. Pitcock, 272 S.W. 3d 777, 784 (Tex.
App.-- Texarkana 2008, no pet.); Tex. State Optical, Inc. v. Wiggins, 882 S.W. 2d 8, 10-11 (Tex. App.--
Houston [1st Dist.] 1994, no writ).
Mensa-Wilmot v. Smith International, Inc. (Tex.App.- Houston [1st Dist.] Nov. 19, 2009).
21
See relevant statutory provisisions:
Sec. 17.43. CUMULATIVE REMEDIES. The provisions of this subchapter are not exclusive.
The remedies provided in this subchapter are in addition to any other procedures or remedies
provided for in any other law; provided, however, that no recovery shall be permitted under both
this subchapter and another law of both damages and penalties for the same act or practice. A
violation of a provision of law other than this subchapter is not in and of itself a violation of this
subchapter. An act or practice that is a violation of a provision of law other than this subchapter
may be made the basis of an action under this subchapter if the act or practice is proscribed by a
provision of this subchapter or is declared by such other law to be actionable under this
subchapter. The provisions of this subchapter do not in any way preclude other political
subdivisions of this state from dealing with deceptive trade practices.
Added by Acts 1973, 63rd Leg., p. 322, ch. 143, Sec. 1, eff. May 21, 1973. Amended by Acts
1979, 66th Leg., p. 1327, ch. 603, Sec. 1, eff. Aug. 27, 1979; Acts 1995, 74th Leg., ch. 414, Sec.
1, eff. Sept. 1, 1995.
Sec. 17.44. CONSTRUCTION AND APPLICATION. (a) This subchapter shall be liberally
construed and applied to promote its underlying purposes, which are to protect consumers against
17
false, misleading, and deceptive business practices, unconscionable actions, and breaches of
warranty and to provide efficient and economical procedures to secure such protection.
Sec. 17.45. DEFINITIONS. As used in this subchapter:
(1) "Goods" means tangible chattels or real property purchased or leased for use.
(2) "Services" means work, labor, or service purchased or leased for use, including
services furnished in connection with the sale or repair of goods.
(3) "Person" means an individual, partnership, corporation, association, or other
group, however organized.
(4) "Consumer" means an individual, partnership, corporation, this state, or a
subdivision or agency of this state who seeks or acquires by purchase or lease, any goods
or services, except that the term does not include a business consumer that has assets of
$25 million or more, or that is owned or controlled by a corporation or entity with assets
of $25 million or more.
(5) "Unconscionable action or course of action" means an act or practice which, to a
consumer's detriment, takes advantage of the lack of knowledge, ability, experience, or
capacity of the consumer to a grossly unfair degree.
(6) "Trade" and "commerce" mean the advertising, offering for sale, sale, lease, or
distribution of any good or service, of any property, tangible or intangible, real,
personal, or mixed, and any other article, commodity, or thing of value, wherever situated,
and shall include any trade or commerce directly or indirectly affecting the people of this
state.
Sec. 17.46. DECEPTIVE TRADE PRACTICES UNLAWFUL. (a) False, misleading, or
deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful
and are subject to action by the consumer protection division under Sections 17.47, 17.58, 17.60,
and 17.61 of this code.
(b) Except as provided in Subsection (d) of this section, the term "false, misleading, or
deceptive acts or practices" includes, but is not limited to, the following acts:
(1) passing off goods or services as those of another;
(2) causing confusion or misunderstanding as to the source, sponsorship, approval,
or certification of goods or services;
(3) causing confusion or misunderstanding as to affiliation, connection, or
association with, or certification by, another;
(4) using deceptive representations or designations of geographic origin in connection
with goods or services;
(5) representing that goods or services have sponsorship, approval, characteristics,
ingredients, uses, benefits, or quantities which they do not have or that a person has
a sponsorship, approval, status, affiliation, or connection which the person does not;
(6) representing that goods are original or new if they are deteriorated, reconditioned,
reclaimed, used, or secondhand;
(7) representing that goods or services are of a particular standard, quality, or grade, or
that goods are of a particular style or model, if they are of another;
(8) disparaging the goods, services, or business of another by false or misleading
representation of facts;
(9) advertising goods or services with intent not to sell them as advertised;
(10) advertising goods or services with intent not to supply a reasonable expectable public
demand, unless the advertisements disclosed a limitation of quantity;
(11) making false or misleading statements of fact concerning the reasons for, existence
of, or amount of price reductions;
18
(12) representing that an agreement confers or involves rights, remedies, or
obligations which it does not have or involve, or which are prohibited by law;
(13) knowingly making false or misleading statements of fact concerning the need for
parts, replacement, or repair service;
(14) misrepresenting the authority of a salesman, representative or agent to negotiate the
final terms of a consumer transaction;
(15) basing a charge for the repair of any item in whole or in part on a guaranty or
warranty instead of on the value of the actual repairs made or work to be performed on
the item without stating separately the charges for the work and the charge for the
warranty or guaranty, if any;
(16) disconnecting, turning back, or resetting the odometer of any motor vehicle so as to
reduce the number of miles indicated on the odometer gauge;
(17) advertising of any sale by fraudulently representing that a person is going out of
business;
(18) advertising, selling, or distributing a card which purports to be a prescription drug
identification card issued under Section 4151.152, Insurance Code, in accordance with
rules adopted by the commissioner of insurance, which offers a discount on the purchase
of health care goods or services from a third party provider, and which is not evidence of
insurance coverage, unless:
(A) the discount is authorized under an agreement between the seller of the card
and the provider of those goods and services or the discount or card is offered to
members of the seller;
(B) the seller does not represent that the card provides insurance coverage of any
kind; and
(C) the discount is not false, misleading, or deceptive;
(19) using or employing a chain referral sales plan in connection with the sale or offer to
sell of goods, merchandise, or anything of value, which uses the sales technique, plan,
arrangement, or agreement in which the buyer or prospective buyer is offered the
opportunity to purchase merchandise or goods and in connection with the purchase
receives the seller's promise or representation that the buyer shall have the right to receive
compensation or consideration in any form for furnishing to the seller the names of other
prospective buyers if receipt of the compensation or consideration is contingent upon the
occurrence of an event subsequent to the time the buyer purchases the merchandise or
goods;
(20) representing that a guaranty or warranty confers or involves rights or remedies which
it does not have or involve, provided, however, that nothing in this subchapter shall be
construed to expand the implied warranty of merchantability as defined in Sections 2.314
through 2.318 and Sections 2A.212 through 2A.216 to involve obligations in excess of
those which are appropriate to the goods;
(21) promoting a pyramid promotional scheme, as defined by Section 17.461;
(22) representing that work or services have been performed on, or parts replaced in,
goods when the work or services were not performed or the parts replaced;
(23) filing suit founded upon a written contractual obligation of and signed by the
defendant to pay money arising out of or based on a consumer transaction for goods,
services, loans, or extensions of credit intended primarily for personal, family, household,
or agricultural use in any county other than in the county in which the defendant resides
at the time of the commencement of the action or in the county in which the defendant in
fact signed the contract; provided, however, that a violation of this subsection shall not
occur where it is shown by the person filing such suit that the person neither knew or had
reason to know that the county in which such suit was filed was neither the county in
19
which the defendant resides at the commencement of the suit nor the county in which the
defendant in fact signed the contract;
(24) failing to disclose information concerning goods or services which was known at
the time of the transaction if such failure to disclose such information was intended to
induce the consumer into a transaction into which the consumer would not have entered
had the information been disclosed;
(25) using the term "corporation," "incorporated," or an abbreviation of either of those
terms in the name of a business entity that is not incorporated under the laws of this state
or another jurisdiction;
(26) selling, offering to sell, or illegally promoting an annuity contract under Chapter 22,
Acts of the 57th Legislature, 3rd Called Session, 1962 (Article 6228a-5, Vernon's Texas
Civil Statutes), with the intent that the annuity contract will be the subject of a salary
reduction agreement, as defined by that Act, if the annuity contract is not an eligible
qualified investment under that Act;
(27) subject to Section 17.4625, taking advantage of a disaster declared by the governor
under Chapter 418, Government Code, or by the president of the United States by:
(A) selling or leasing fuel, food, medicine, lodging, building materials,
construction tools, or another necessity at an exorbitant or excessive price; or
(B) demanding an exorbitant or excessive price in connection with the sale or
lease of fuel, food, medicine, lodging, building materials, construction tools, or
another necessity;
(28) using the translation into a foreign language of a title or other word, including
"attorney," "immigration consultant," "immigration expert," "lawyer," "licensed,"
"notary," and "notary public," in any written or electronic material, including an
advertisement, a business card, a letterhead, stationery, a website, or an online video, in
reference to a person who is not an attorney in order to imply that the person is authorized
to practice law in the United States;
(29) delivering or distributing a solicitation in connection with a good or service that:
(A) represents that the solicitation is sent on behalf of a governmental entity
when it is not; or
(B) resembles a governmental notice or form that represents or implies that a
criminal penalty may be imposed if the recipient does not remit payment for the
good or service;
(30) delivering or distributing a solicitation in connection with a good or service that
resembles a check or other negotiable instrument or invoice, unless the portion of the
solicitation that resembles a check or other negotiable instrument or invoice includes the
following notice, clearly and conspicuously printed in at least 18-point type:
"SPECIMEN-NON-NEGOTIABLE";
(31) in the production, sale, distribution, or promotion of a synthetic substance that
produces and is intended to produce an effect when consumed or ingested similar to, or
in excess of, the effect of a controlled substance or controlled substance analogue, as those
terms are defined by Section 481.002, Health and Safety Code:
(A) making a deceptive representation or designation about the synthetic
substance; or
(B) causing confusion or misunderstanding as to the effects the synthetic
substance causes when consumed or ingested;
(32) a licensed public insurance adjuster directly or indirectly soliciting employment, as
defined by Section 38.01, Penal Code, for an attorney, or a licensed public insurance
adjuster entering into a contract with an insured for the primary purpose of referring the
insured to an attorney without the intent to actually perform the services customarily
20
Preview
Filed: 9/5/2023 12:00 AM JOHN D. KINARD - District Clerk Galveston County, Texas Envelope No. 79190053 By: Shailja Dixit 9/5/2023 8:24 AM CAUSE NO. 22-CV-0332 DIVERSE EQUITY, LLC IN 56TH JUDICIAL DISTRICT V. JUDICIAL COURT COMMONWEALTH LAND TITLE INSURANCE COMPANY, D/B/A COMMONWEALTH TITLE OF HOUSTON, MAHMOUD REZA ABAHASHEIMI GALVESTON COUNTY, TEXAS PLAINTIFF, DIVERSE EQUITY, LLC.’S RESPONSE TO DEFENDANT, DALLAS RUSSELL, SR. AND COMMONWEALTH LAND TITLE INSURANCE COMPANY’S MOTIONS FOR SUMMARY JUDGMENT TO THE HONORABLE JUDGE OF SAID COURT: Plaintiff, Diverse Equity, LLC, files this his response to Defendant, Dallas Russell, Sr. and Commonwealth Land Title Insurance Company’s Motions for Summary Judgment. For good cause, Plaintiff would show unto the Court as follows: I. – CURRENT STATUS OF DISCOVERY. Discovery is not substantially complete in that the parties have exchanged written discovery, and the Plaintiff has filed a motion to compel, requesting the Court order Defendants to provide full and complete answers to the written discovery. The motions to compel have not been heard by the Court. The parties have not conducted depositions. Although the matter is ripe for summary judgment consideration, the matter is not ripe for trial. The parties need roughly another sixty (60) days to complete discovery prior to a trial setting in this matter. 1 II. - SUMMARY JUDGMENT STANDARD.1 The summary judgment standards are often repeated. Repeating the standards once more in this case makes clear summary disposition would be improper and imprudent at this stage. The burden is on the movant. The movant must show that no genuine issue of material fact exists, and that the movant is entitled to judgment as a matter of law. Wright v. Greenberg, 2 S.W. 3d 666, 670 (Tex. App.—Houston [14th Dist.] 1999, pet. denied) (citing Nixon v. Mr. Prop. Mgmt. Co., 690 S.W. 2d 546, 548–49 (Tex. 1985). If the movant makes this showing, then the burden shifts to the non-movant to raise a genuine issue of material fact sufficient to defeat summary judgment. Walker v. Harris, 924 S.W. 2d 375, 377 (Tex. 1996). In determining whether an issue of material fact exists, which would preclude summary judgment, evidence favoring the non- movant is taken as true, and all reasonable inferences are indulged in favor of the non-movant. Id. In this case, Defendants have moved for summary judgment on two grounds – traditional and no- evidence. Summary judgment should be denied. A. Traditional Motion for Summary Judgment. To obtain relief through a traditional motion for summary judgment, the movant must establish that no issue of material fact exists and that it is entitled to judgment as a matter of law.2 A defendant who moves for summary judgment must either disprove at least one element of each 1 For an exhaustive discussion of summary judgment standard(s), see Judge David Hittner and Lynn Liberato, Summary Judgments in Texas: State and Federal Practice, South Texas College of Law Review, Vol. 60:1 (2019), last visited September 4, 2023, http://www.stcl.edu/wp- content/uploads/2018/03/Summary-Judgments-Final.pdf. 2 TEX. R. CIV. P. 166a(c); Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W. 3d 844, 848 (Tex. 2009); SAS Inst., Inc. v. Breitenfeld, 167 S.W. 3d 840, 841 (Tex. 2005) (per curiam); Sw. Elec. Power Co. v. Grant, 73 S.W. 3d 211, 215 (Tex. 2002). 2 of the plaintiff’s causes of action, or must plead and conclusively establish each essential element of any affirmative defense, thereby rebutting the plaintiff’s causes of action. 3 An issue is conclusively established “if reasonable minds could not differ about the conclusion to be drawn from the facts in the record.”4 If the movant’s motion and summary judgment evidence facially establish the movant’s right to judgment as a matter of law, the burden shifts to the non-movant to raise a genuine, material fact issue sufficient to defeat summary judgment.5 A fact is material when it “affects the ultimate outcome of the suit under the governing law.”6 “A material fact issue is ‘genuine’ only if the evidence is such that a reasonable jury could find the fact in favor of the nonmoving party.”7 B. No Evidence Motion for Summary Judgment. Texas Rule of Civil Procedure 166a(i) reflects that no-evidence motions for summary judgment require much less from the movant than do motions for traditional summary judgment. “Under Rule 166a(i), a party may move for summary judgment on the ground that there is no evidence of one or more essential elements of a claim or defense on which an adverse party would have the burden of proof at trial.”8 The movant need not produce any evidence supporting its no- 3 Nassar v. Liberty Mut. Fire Ins. Co., 508 S.W. 3d 254, 257 (Tex. 2017); Cathey v. Booth, 900 S.W. 2d 339, 341 (Tex. 1995) (per curiam). 4 Cmty. Health Sys. Prof’l Servs. Corp. v. Hansen, 525 S.W. 3d 671, 681 (Tex. 2017) (citing Childs v. Haussecker, 974 S.W. 2d 31, 44 (Tex. 1998)). 5 M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W. 3d 22, 23–24 (Tex. 2000) (per curiam). 6 Rayon v. Energy Specialties, Inc., 121 S.W. 3d 7, 11 (Tex. App.—Fort Worth 2002, no pet.) (citing Lampasas v. Spring Ctr., Inc., 988 S.W.2d 428, 433 (Tex. App.—Houston [14th Dist.] 1999, no pet.)). 7 Id. at 11–12. 8 W. Invs., Inc. v. Urena, 162 S.W. 3d 547, 550 (Tex. 2005). 3 evidence motion.9 Instead, the mere filing of a proper motion shifts the burden to the nonmovant to come forward with enough evidence to raise a genuine issue of material fact. 10 If the non-movant does not do so, the court must grant the motion. As the Court will see, there are no bases for granting a motion for summary judgment under either standard. III. - UNDERLYING FACTS. This case involves an assignment contract, which Defendant Commonwealth, who should have been acting as the neutral third-party title company, inserted itself into. Defendant Commonwealth arbitrarily interpreted contract terms - in a way that reflects neither the law nor industry practice – and worked against Plaintiff Diverse Equity. Plaintiff lost the contract, and a substantial amount of money. Plaintiff purchases and sells property for a profit. One source of income for the Plaintiff involves seeking out bargain properties – for example, distressed properties - and then locating buyers for the property, who may be willing to remodel or “flip” the property. In this context, Plaintiff makes a profit from researching, marketing, and negotiating property transactions. 11 Once a property has been located; an agreement to sell has been negotiated with the property owner; the research has been done; a buyer has been located, and an agreement to purchase has been negotiated, then the sale must be transacted. One way of doing this is by an 9 TEX. R. CIV. P. 166a(i); Home State Cty. Mut. Ins. Co. v. Horn, No. 12-07-00094-CV, 2008 WL 2514332, at *2 (Tex. App.—Tyler June 25, 2008, pet. denied) (mem. op.) (citing Judge David Hittner & Lynne Liberato, Summary Judgments in Texas, 34 HOUS. L. REV. 1303, 1356 (1998)); Branson v. Spiros Partners Ltd., No. 04-07-00007-CV, 2007 WL 4547502, at *2 (Tex. App.—San Antonio Dec. 28, 2007, no pet.) (mem. op.) (citing Judge David Hittner & Lynne Liberato, Summary Judgments in Texas, 34 HOUS. L. REV. 1303, 1356 (1998)). 10 Home State Cty. Mut. Ins. Co., 2008 WL 2514332, at *2. 11 See Exhibits 1 and 2. 4 assignment contract. In such a contract, the Plaintiff assigns its right to purchase the property to a third party. Like anyone, Plaintiff does this for a profit. The operative pleading on file is the Plaintiff’s Second Amended Petition: The formation of the contract between Plaintiff and Abahashemi. On or about February 7, 2021, Plaintiff entered into a Purchase and Sale 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 (attached as Plaintiff’s Summary Judgment Exhibit 1, see Joseph Robinson’s unsworn declaration under Plaintiff’s Summary Judgment Exhibit 2). “Special Provisions” was the title of a section of the contract between Plaintiff and Defendant Abashemi 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 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.” (Plaintiff’s Summary Judgment Exhibit 1). 5 The following day, on or about February 8, 2021, Plaintiff delivered a copy of the Purchase and Sale agreement, as well as an earnest money check, to Defendant Commonwealth (Plaintiff’s Summary Judgment Exhibits 1 and 3). The day after delivering the earnest money check and Purchase and Sale Agreement – 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. The contract was titled “Agreement to Assign Contract for Sale and Purchase” (Plaintiff’s Summary Judgment Exhibit 4). The Assignment Agreement between Diverse Equity and David Smith and Tanner Plato was signed in Defendant Commonwealth’s offices (see Declaration, Exhibit 2; Assignment Agreement, Exhibit 4). 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.” (Exhibit 4). This language is consistent with Texas Occupations Code § 1101.0045, 12 which provides the parameters of acquisition and assignment of options or interests in real property. The contract 12 Texas Occupations Code § 1101.0045: Sec. 1101.0045. EQUITABLE INTERESTS IN REAL PROPERTY. (a) A person may acquire an option or an interest in a contract to purchase real property and then sell or offer to sell the option or assign or offer to assign the contract without holding a license issued under this chapter if the person: (1) does not use the option or contract to purchase to engage in real estate brokerage; and (2) discloses in writing the nature of the equitable interest to any seller or potential buyer. (b) A person selling or offering to sell an option or assigning or offering to assign an interest in a contract to purchase real property without disclosing the nature of that interest as provided by Subsection (a)(2) is engaging in real estate brokerage. Added by Acts 2017, 85th Leg., R.S., Ch. 974 (S.B. 2212), Sec. 1, eff. September 1, 2017. Amended by: Acts 2023, 88th Leg., R.S., Ch. 94 (S.B. 1577), Sec. 4, eff. January 1, 2024. 6 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 contract also set out, in numbered 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.” Id. Plaintiff complied with the explicit provisions of the contract and provided notice to all parties associated with the contract in question and Texas Occupation Code § 1101.0045 (Plaintiff’s Summary Judgment Exhibit 2; Exhibit 4). Under ordinary circumstances, the contract would have been executed and the sales transaction completed. However, the facts in this case are not ordinary. Commonwealth has offices in Webster, Harris County, Texas. The sum of $100.00 was deposited in escrow with Commonwealth Title of Houston. This sum was agreed to by the buyer (Plaintiff, Diverse Equity) and seller (Defendant Mahmoud Abahashemi). See Exhibit 1 (copy of the Purchase and Sale Agreement, containing the agreed-upon earnest money deposit) and Exhibit 3 (copy of the earnest money check, deposited into escrow with Commonwealth Title of Houston). Closing on the Assignment contract was scheduled to take place at the time of closing on the Sale. The transactions were set to take place on February 26, 2021, at Commonwealth Title of Houston’s office address at 550 Westcott Street, in Houston, Texas. See Exhibit 2. However, due to Defendants’ actions, the transactions were never completed. Intervening facts On or about February 10, 2021, Valerie Mercure, an employee of Defendant Commonwealth, transmitted an email to Plaintiff Diverse Equity, noting “the assigned contract must meet certain standards mandated by Fidelity National in order for us to handle these types of transactions.” (Plaintiff’s Summary Judgment Exhibit 5). The first issue raised by the email 7 related to the nonrefundable deposit toward the assignment fee. Id. The Assignment contract stated the Plaintiff (Buyer/Assignor) would collect this nonrefundable deposit from the Assignees (Smith and Plato) before the closing date (Exhibit 4). Mercure clarified that this nonrefundable deposit was to be paid “under the terms of the contract as written” and not deposited with Defendant Commonwealth Title. Interestingly, Mercure stated the deposit must be paid per the contract because “[Commonwealth] Title cannot interpret the terms of the contract and unilaterally agree with one party over the other.” Id. However, with respect to the second issue raised in the email, Commonwealth did exactly that. Mercure stated that Commonwealth was obligated to disclose the assignment fee to the seller, opining the clause (in the Sale Agreement, at Exhibit 1) stating “buyer is in the market to purchase and sell real estate for a profit” was an insufficient disclosure. (Exhibit 5). Mercure instructed that Plaintiff “must agree” to Commonwealth making this disclosure to the seller. Id. Notably, in the context of purchasing an option or interest in a contract to purchase real property, the Occupations Code requires disclosure of “the nature of” the interest acquired – it does not require disclosure of any amount. It does not, for example, require disclosure of “the amount paid by any third party to whom the buyer has opted to resale the property;” it does not require disclosure of “the amount of the fee charged to any third person, if such fee exceeds 10% of the amount for which the buyer has agreed to purchase the property from seller.” As stated by Mercure, the Purchase and Sales Agreement provided that the Plaintiff was in the market to purchase and sell real estate. The Agreement also provided that the Seller was agreeing to allow the Plaintiff to “market the property for resale upon execution of this contract for its own interest,” and to allow the Plaintiff to “record in the real property records of the County for the property a Memorandum of Agreement to secure its interest in the Property.” (Exhibit 1). 8 Obviously, Plaintiff does not have the gift of precognition. Plaintiff would have been unable to provide the terms of a contract which had not yet been negotiated. Plaintiff most assuredly provided the nature of its interest in the property, however, as required by law. Nevertheless, Commonwealth decided to interpret the contract terms as legally insufficient, requiring Plaintiff to agree to Commonwealth informing the Seller of the amount of the fee that the Plaintiff would receive from the third-party Assignee, stating “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.” Commonwealth’s email characterized Plaintiff’s fee as “[a] 50% markup[,]” instructing “[f]urthermore, a traditional assignment fee is generally not exorbitant as this one is. Any assignment fee that is 10% of the original sales price is automatically approved by title. Any amount over the traditional 10% must be approved by underwriting. A 50% markup would be considered exorbitant by underwriting and may require a double closing” 13 (Exhibit 5). From the top, characterizing Plaintiff’s fee as a “markup,” which is the term used for the amount added to the cost of goods to ensure a profit margin, shows that Defendant has taken the position that Plaintiff’s contract is illegal (similar to price-gouging). The ostensibly rational tone of this email belies the fact that there is no such thing as a “traditional assignment fee” in real estate assignment contracts. Real estate wholesalers such as the Plaintiff earn a living by legitimately seeking out bargains on property, and then finding buyers who may be willing to 13 A “double closing” contemplates two separate transactions: one in which the buyer/assignor (Plaintiff, Diverse Equity in this case) purchases the property from the seller (Defendant Abahashemi), with the buyer/assignor (Plaintiff Diverse Equity)’s funds. This would be the first closing. Diverse Equity would then sell the property to a third party (originally the assignor). This would be the second closing. See Exhibit 2. 9 remodel or “flip” the property. Like anyone, this is done for a profit. Plaintiff makes a profit from researching, marketing, and negotiating property transactions. When Plaintiff’s agent Joseph Robinson received the email from Commonwealth, he picked up the phone and called Dallas Russell, Sr., the source of the email (“[h]e is our resident expert on assignment contracts”) particularly as related to the use of the word “exorbitant,” which was emphasized by its use – twice- in Mercure’s email.14 Again, Mercure had informed that “a traditional fee is not exorbitant as this one is” and that Plaintiff’s fee “would be considered exorbitant by underwriting.” Exhibit 5. The statement was concerning to Robinson, in that Defendant Commonwealth was informing Plaintiff his contract/conduct was outside the scope of the law – illegal. Robinson called Russell, who Robinson knew to be the source of the email (also the owner/principal of Commonwealth, see Plaintiff’s Summary Judgment Exhibit 6) on the date of receiving the email. When Robinson inquired as to the meaning of the email, Russell expounded to a greater extent; Robinson stated: “we talked on the phone. [Russell] called me back on my cell. He told me 14 Merriam Webster Dictionary defines exorbitant as follows: Exorbitant adjective ex·or·bi·tant ig-ˈzȯr-bə-tənt Synonyms of exorbitant : not coming within the scope of the law : exceeding the customary or appropriate limits in intensity, quality, amount, or size exorbitantly adverb Last visited September 4, 2023, https://www.merriam-webster.com/dictionary/exorbitant 10 the contract was illegal, 15 my terms were exorbitant and predatory.16 He was screaming. I was too. I was driving at the time and I asked him to send an email. What was written does not contain all 15 The use of words to describe the contract is important – the plain meaning of the words and the answers provided are critical to the interference claim and the reputation attack by Dallas Russell and Commonwealth. Illegal is defined thusly: illegal 1 of 2 adjective il·le·gal (ˌ)i(l)-ˈlē-gəl Synonyms of illegal : not according to or authorized by law : UNLAWFUL, ILLICIT also: not sanctioned by official rules (as of a game) illegality ˌi-li-ˈga-lə-tē noun illegally (ˌ)i(l)-ˈlē-gə-lē adverb Last visited on September 4, 2023, https://www.merriam-webster.com/dictionary/illegal. 16 Predatory is defined as follows predatory adjective pred·a·to·ry ˈpre-də-ˌtȯr-ē Synonyms of predatory 1 a : of, relating to, or practicing plunder, pillage, or rapine b : inclined or intended to injure or exploit others for personal gain or profit predatory pricing practices 2 : living by predation : PREDACEOUS also : adapted to predation Last visited on September 4, 2023, https://www.merriam-webster.com/dictionary/predatory. 11 of the statements he made to me, including his intent to tell my seller [whether or not I agreed]. He obviously followed up on his promise in that seller began to ghost me, avoiding phone calls and closing. The contract was legal. The contract in question is used on a regular basis, in the business of buying and selling real estate. In a consumer-based industry - such as real estate - to be told you are acting in an illegal, exorbitant, predatory fashion is insulting and defamatory – this is the reason I was demanding an explanation.” In the email sent by Valerie Mercure, Russell/Commonwealth attempted, post-hoc, to tone down the verbal assertions. Russell also attempted to dial his verbal statements down when answering the interrogatories forwarded to him (Plaintiff’s Summary Judgment Exhibit 6, see answers to 1 & 2). Again, exorbitant means illegal, or outside of the scope of the law. In addition, Defendant Russell admits to the conversation, but now purports to not remember when the conversation took place. Regardless, Defendant Russell and Commonwealth’s conduct was unwarranted and tortious. 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. Plaintiff fulfilled all requisite conditions. The Commitment Number was 2635032100062; a true and correct copy of the Commitment is attached hereto as Plaintiff’s Summary Judgment Exhibit 7. 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.” Id. 12 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. Id. Nevertheless, Plaintiff obtained funding to do a double closing, as directed by Mercure (Exhibit 2). Schedule B, Exception #6 (Exhibit 7) 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 (Exhibit 2). Plaintiff’s representative had a conversation with Defendant Abashemi’s spouse, who informed expressed dissatisfaction with the double closing and referenced the contract as being “illegal” (Plaintiff’s Summary Judgment Exhibit 2). It was clear to Plaintiff that Commonwealth and Russell’s intentional conduct interfered with Plaintiff’s contract with Defendant Abashemi. Tortious Interference 17 17 See, e.g. Hart v. Manriquez Holdings, LLC., 661 S.W. 3d 432, 439 (Tex. App. – Houston [14th Dist.] 2023, no pet.); Reg’l Specialty Clinic, P.C., P.A. v. S.A. Randle & Assoc., P.C., 625 S.W. 3d 895, 902 (Tex. App. – Houston [14th Dist.] 2021, no pet.); W. Mktg., Inc. v. AEG Petroleum, LLC., 616 S.W. 3d 903, 921 (Tex. App. – Amarillo 2021), opinion modified on reh’g, 621 S.W. 3d 88 (Tex. App. – Amarillo 2021, pet. denied); All Am. Tel., Inc. v. USLD Commc’ns, Inc., 291 S.W. 3d 518, 532 (Tex. App. – Fort Worth 2009, pet. denied). These cases assume the facts that most commonly give rise to tortious interference claim: a 13 The elements of tortious interference with contract are (1) existence of a contract subject to interference, (2) willful and intentional interference, (3) interference that proximately caused damage, and (4) actual damage or loss. Summary judgment is and would be improper for both Defendant Russell and Commonwealth. Defendant Commonwealth intentionally interfered with the contract between Plaintiff and Defendant Abahashemi, by informing Abahashemi of the amount (not the “nature,” as required by law) of the “exorbitant” fee Plaintiff was charging the third-party assignee (Exhibit 5). Defendant Commonwealth also intentionally interfered with the contract by refusing to assist Plaintiff unless and until Plaintiff conducted an additional closing (id.); 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 (id.; Exhibit 7). This caused a delay in closing, interfering with the Plaintiff’s contract with Abahashemi, encouraging the Plaintiff’s deal with Abahashemi to grow cold (Exhibit 2). Plaintiff did obtain transactional funding (at an additional cost of $1,500.00) to do a double direct communication between the alleged tortfeasor and the party being induced to breach the contract. Additionally here, the tortfeasor was not a party to the contract between Diverse Equity and Defendant Abahashemi. It had no right to insert itself into that contract; in fact, it had an obligation, as a neutral third party, not to do so. A tortious interference with contract claim requires the plaintiff to prove that the defendant willfully and intentionally interfered with the contract. Butnaru v. Ford Motor Company, 157 S.W. 3d 142 (Tex. App.— Austin 2005). To show a willful and intentional act of interference, the plaintiff must produce some evidence that the defendant was more than a willing participant and knowingly induced one of the contracting parties to breach its obligations under a contract; specifically, the plaintiff must show that the interfering party (1) had actual knowledge of the existence of a contract between the plaintiff and a third party, or (2) had knowledge of facts and circumstances that would lead a reasonable person to conclude that a contract existed. Jannise v. Enter. Prods. Operating LLC , No. 14-18-00516-CV, 2019 WL 3432171, at *5 (Tex. App.—Houston [14th Dist.] July 30, 2019, no pet.) (mem. op.). 14 closing, but Commonwealth refused to communicate with Plaintiff’s agent for transactional funding (Exhibit 2). 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. Exhibit 2. 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. 18 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 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 (Exhibit 2). Both because of Defendant Commonwealth essentially labeling Plaintiff’s fee as 18 To prevail on a breach-of-contract claim, a plaintiff must prove (1) a valid contract existed between the plaintiff and the defendant, (2) the plaintiff tendered performance or was excused from doing so, (3) the defendant breached the terms of the contract, and (4) the plaintiff sustained damages as a result of the defendant's breach. West v. Triple B Servs., LLP, 264 S.W.3d 440, 446 (Tex. App.-Houston [14th Dist] 2008, no pet.). See also Valero Mktg. & Supply Co. v Kalama Int'l, LLC, 51 S.W.3d 345, 351 (Tex.App.- Houston [1st Dist] 2001, no pet.); see also Bridgmon v. Array Sys. Corp., 325 F.3d 572, 577 (5th Cir.2003); Henderson-Smith & Assocs., Inc. v. Nahamani Family Serv. Ctr., 323 Ill.App.3d 15, 256 Ill. Dec. 488, 752 N.E.2d 33, 43 (2001). In the facts in question, Plaintiff has proven all the elements associated with the illegal contract and Defendant Abashemi vitiating the contract – at no fault of Plaintiff. Summary judgment/disposition would be improper. 15 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 (Exhibit 2). professional/business defamation 19 By flagging Plaintiff’s contract as being exorbitant, illegal, outside the law, and a “markup,” Commonwealth/Russell engaged in the act of professional defamation. The comments to the customer accused Plaintiff of extortion, and worked to tarnish Diverse Equity’s good name. These adverse and hostile statement took place by the dissemination of emails by David Russell and Valerie Mercure, pursuant to conversations 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 (id.). Breach of Contract20 19 The declaration of Joseph Robinson supports the false nature of the statement made by Russell and/or Commonwealth. The Texas Supreme Court recently stated the elements of defamation as follows: [A] plaintiff must show (1) the publication of a false statement of fact to a third party[;] (2) that was defamatory concerning the plaintiff[;] (3) with the requisite degree of fault, at least amounting to negligence[;] and (4) damages, in some cases. A defamatory statement is one that "tends [] to harm the reputation of another as to lower him in the estimation of the community or to deter third persons from associating or dealing with him." Innovative Block of S. Tex., Ltd. v. Valley Builders Supply, Inc., 603 S.W.3d 409, 417 (Tex. 2020) (citations omitted). 20 The essential elements in a suit for breach of contract are: (1) the existence of a valid contract; (2) the plaintiff performed or tendered performance; (3) the defendant breached the contract; and (4) the plaintiff was damaged as a result of the breach. Bank of Tex. v. VR Elec., Inc., 276 S.W. 3d 671, 677 (Tex. App.— Houston [1st Dist.] 2008, pet. denied). Furthermore, a party seeking to recover under a contract bears the burden of proving that all conditions precedent have been satisfied. CDI Eng'g Group, Inc. v. Admin. Exch., Inc., 222 S.W. 3d 544, 548 (Tex. App.--Houston [14th Dist.] 2007, pet. denied) (citing Associated Indem. 16 The contract was a valid legal contract and was fulfilled and fully executed by Abahashemi (Exhibit 1). There is no question Abahashemi breached his contract with the Plaintiff. Commonwealth contracted with Plaintiff to provide a policy of title insurance (Exhibit 7), but took action to ensure that fulfillment of its own end of the bargain was impossible (Exhibit 7; Exhibit 2). Commonwealth also breached its implied contract to act as a neutral third party servicer to the Plaintiff. Remaining allegation in the pleading – deceptive trade practice. The remaining allegation is one of deceptive trade practice. Commonwealth as a title company is not exempt from the Deceptive Trade Practices Act. The ability of Plaintiff under other theories and the DTPA is not exclusive. 21 Plaintiff is a consumer and the title company and Corp. v. CAT Contracting, Inc., 964 S.W. 2d 276, 283 (Tex. 1998)). In an option contract, strict compliance with the provisions of the option contract is required. Besteman v. Pitcock, 272 S.W. 3d 777, 784 (Tex. App.-- Texarkana 2008, no pet.); Tex. State Optical, Inc. v. Wiggins, 882 S.W. 2d 8, 10-11 (Tex. App.-- Houston [1st Dist.] 1994, no writ). Mensa-Wilmot v. Smith International, Inc. (Tex.App.- Houston [1st Dist.] Nov. 19, 2009). 21 See relevant statutory provisisions: Sec. 17.43. CUMULATIVE REMEDIES. The provisions of this subchapter are not exclusive. The remedies provided in this subchapter are in addition to any other procedures or remedies provided for in any other law; provided, however, that no recovery shall be permitted under both this subchapter and another law of both damages and penalties for the same act or practice. A violation of a provision of law other than this subchapter is not in and of itself a violation of this subchapter. An act or practice that is a violation of a provision of law other than this subchapter may be made the basis of an action under this subchapter if the act or practice is proscribed by a provision of this subchapter or is declared by such other law to be actionable under this subchapter. The provisions of this subchapter do not in any way preclude other political subdivisions of this state from dealing with deceptive trade practices. Added by Acts 1973, 63rd Leg., p. 322, ch. 143, Sec. 1, eff. May 21, 1973. Amended by Acts 1979, 66th Leg., p. 1327, ch. 603, Sec. 1, eff. Aug. 27, 1979; Acts 1995, 74th Leg., ch. 414, Sec. 1, eff. Sept. 1, 1995. Sec. 17.44. CONSTRUCTION AND APPLICATION. (a) This subchapter shall be liberally construed and applied to promote its underlying purposes, which are to protect consumers against 17 false, misleading, and deceptive business practices, unconscionable actions, and breaches of warranty and to provide efficient and economical procedures to secure such protection. Sec. 17.45. DEFINITIONS. As used in this subchapter: (1) "Goods" means tangible chattels or real property purchased or leased for use. (2) "Services" means work, labor, or service purchased or leased for use, including services furnished in connection with the sale or repair of goods. (3) "Person" means an individual, partnership, corporation, association, or other group, however organized. (4) "Consumer" means an individual, partnership, corporation, this state, or a subdivision or agency of this state who seeks or acquires by purchase or lease, any goods or services, except that the term does not include a business consumer that has assets of $25 million or more, or that is owned or controlled by a corporation or entity with assets of $25 million or more. (5) "Unconscionable action or course of action" means an act or practice which, to a consumer's detriment, takes advantage of the lack of knowledge, ability, experience, or capacity of the consumer to a grossly unfair degree. (6) "Trade" and "commerce" mean the advertising, offering for sale, sale, lease, or distribution of any good or service, of any property, tangible or intangible, real, personal, or mixed, and any other article, commodity, or thing of value, wherever situated, and shall include any trade or commerce directly or indirectly affecting the people of this state. Sec. 17.46. DECEPTIVE TRADE PRACTICES UNLAWFUL. (a) False, misleading, or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful and are subject to action by the consumer protection division under Sections 17.47, 17.58, 17.60, and 17.61 of this code. (b) Except as provided in Subsection (d) of this section, the term "false, misleading, or deceptive acts or practices" includes, but is not limited to, the following acts: (1) passing off goods or services as those of another; (2) causing confusion or misunderstanding as to the source, sponsorship, approval, or certification of goods or services; (3) causing confusion or misunderstanding as to affiliation, connection, or association with, or certification by, another; (4) using deceptive representations or designations of geographic origin in connection with goods or services; (5) representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person has a sponsorship, approval, status, affiliation, or connection which the person does not; (6) representing that goods are original or new if they are deteriorated, reconditioned, reclaimed, used, or secondhand; (7) representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another; (8) disparaging the goods, services, or business of another by false or misleading representation of facts; (9) advertising goods or services with intent not to sell them as advertised; (10) advertising goods or services with intent not to supply a reasonable expectable public demand, unless the advertisements disclosed a limitation of quantity; (11) making false or misleading statements of fact concerning the reasons for, existence of, or amount of price reductions; 18 (12) representing that an agreement confers or involves rights, remedies, or obligations which it does not have or involve, or which are prohibited by law; (13) knowingly making false or misleading statements of fact concerning the need for parts, replacement, or repair service; (14) misrepresenting the authority of a salesman, representative or agent to negotiate the final terms of a consumer transaction; (15) basing a charge for the repair of any item in whole or in part on a guaranty or warranty instead of on the value of the actual repairs made or work to be performed on the item without stating separately the charges for the work and the charge for the warranty or guaranty, if any; (16) disconnecting, turning back, or resetting the odometer of any motor vehicle so as to reduce the number of miles indicated on the odometer gauge; (17) advertising of any sale by fraudulently representing that a person is going out of business; (18) advertising, selling, or distributing a card which purports to be a prescription drug identification card issued under Section 4151.152, Insurance Code, in accordance with rules adopted by the commissioner of insurance, which offers a discount on the purchase of health care goods or services from a third party provider, and which is not evidence of insurance coverage, unless: (A) the discount is authorized under an agreement between the seller of the card and the provider of those goods and services or the discount or card is offered to members of the seller; (B) the seller does not represent that the card provides insurance coverage of any kind; and (C) the discount is not false, misleading, or deceptive; (19) using or employing a chain referral sales plan in connection with the sale or offer to sell of goods, merchandise, or anything of value, which uses the sales technique, plan, arrangement, or agreement in which the buyer or prospective buyer is offered the opportunity to purchase merchandise or goods and in connection with the purchase receives the seller's promise or representation that the buyer shall have the right to receive compensation or consideration in any form for furnishing to the seller the names of other prospective buyers if receipt of the compensation or consideration is contingent upon the occurrence of an event subsequent to the time the buyer purchases the merchandise or goods; (20) representing that a guaranty or warranty confers or involves rights or remedies which it does not have or involve, provided, however, that nothing in this subchapter shall be construed to expand the implied warranty of merchantability as defined in Sections 2.314 through 2.318 and Sections 2A.212 through 2A.216 to involve obligations in excess of those which are appropriate to the goods; (21) promoting a pyramid promotional scheme, as defined by Section 17.461; (22) representing that work or services have been performed on, or parts replaced in, goods when the work or services were not performed or the parts replaced; (23) filing suit founded upon a written contractual obligation of and signed by the defendant to pay money arising out of or based on a consumer transaction for goods, services, loans, or extensions of credit intended primarily for personal, family, household, or agricultural use in any county other than in the county in which the defendant resides at the time of the commencement of the action or in the county in which the defendant in fact signed the contract; provided, however, that a violation of this subsection shall not occur where it is shown by the person filing such suit that the person neither knew or had reason to know that the county in which such suit was filed was neither the county in 19 which the defendant resides at the commencement of the suit nor the county in which the defendant in fact signed the contract; (24) failing to disclose information concerning goods or services which was known at the time of the transaction if such failure to disclose such information was intended to induce the consumer into a transaction into which the consumer would not have entered had the information been disclosed; (25) using the term "corporation," "incorporated," or an abbreviation of either of those terms in the name of a business entity that is not incorporated under the laws of this state or another jurisdiction; (26) selling, offering to sell, or illegally promoting an annuity contract under Chapter 22, Acts of the 57th Legislature, 3rd Called Session, 1962 (Article 6228a-5, Vernon's Texas Civil Statutes), with the intent that the annuity contract will be the subject of a salary reduction agreement, as defined by that Act, if the annuity contract is not an eligible qualified investment under that Act; (27) subject to Section 17.4625, taking advantage of a disaster declared by the governor under Chapter 418, Government Code, or by the president of the United States by: (A) selling or leasing fuel, food, medicine, lodging, building materials, construction tools, or another necessity at an exorbitant or excessive price; or (B) demanding an exorbitant or excessive price in connection with the sale or lease of fuel, food, medicine, lodging, building materials, construction tools, or another necessity; (28) using the translation into a foreign language of a title or other word, including "attorney," "immigration consultant," "immigration expert," "lawyer," "licensed," "notary," and "notary public," in any written or electronic material, including an advertisement, a business card, a letterhead, stationery, a website, or an online video, in reference to a person who is not an attorney in order to imply that the person is authorized to practice law in the United States; (29) delivering or distributing a solicitation in connection with a good or service that: (A) represents that the solicitation is sent on behalf of a governmental entity when it is not; or (B) resembles a governmental notice or form that represents or implies that a criminal penalty may be imposed if the recipient does not remit payment for the good or service; (30) delivering or distributing a solicitation in connection with a good or service that resembles a check or other negotiable instrument or invoice, unless the portion of the solicitation that resembles a check or other negotiable instrument or invoice includes the following notice, clearly and conspicuously printed in at least 18-point type: "SPECIMEN-NON-NEGOTIABLE"; (31) in the production, sale, distribution, or promotion of a synthetic substance that produces and is intended to produce an effect when consumed or ingested similar to, or in excess of, the effect of a controlled substance or controlled substance analogue, as those terms are defined by Section 481.002, Health and Safety Code: (A) making a deceptive representation or designation about the synthetic substance; or (B) causing confusion or misunderstanding as to the effects the synthetic substance causes when consumed or ingested; (32) a licensed public insurance adjuster directly or indirectly soliciting employment, as defined by Section 38.01, Penal Code, for an attorney, or a licensed public insurance adjuster entering into a contract with an insured for the primary purpose of referring the insured to an attorney without the intent to actually perform the services customarily 20