Preview
Filed: 8/9/2021 3:25 PM
JOHN D. KINARD - District Clerk
Galveston County, Texas
Envelope No. 56132268
By: Lisa Kelly
8/9/2021 3:29 PM
CAUSE NO. 20-CV-1458
STACEY DIAMOND AND §
JEFFREY DIAMOND, § IN THE DISTRICT COURT OF
§
Plaintiffs, §
§
§
v. §
§
BRADFORD WOOD COLLIER, § GALVESTON COUNTY, TEXAS
EVERETT FINANCIAL, INC. d/b/a §
SUPREME LENDING, TEXAS §
ALLY REAL ESTATE GROUP, §
LLC, and HENRY ADONIAS PU §
PINEDA §
§ 122ND JUDICIAL DISTRICT
Defendants. §
DEFENDANT EVERETT FINANCIAL, INC. d/b/a SUPREME LENDING’S
REPLY IN SUPPORT OF ITS RULE 91a MOTION TO DISMISS
Defendant Everett Financial, Inc. d/b/a/ Supreme Lending (“Supreme Lending”) submits
is Reply in Support of its Rule 91a Motion to Dismiss as follows.
A. No Representation by Supreme Lending Means there is No Claim
There never was any representation from Supreme Lending to Plaintiffs. Period. Neither
Plaintiffs’ First Amended Complaint nor their Response can or do make any mention of any actual
representation by Supreme Lending to Plaintiffs. If there was no representation to the Plaintiffs,
by definition, there cannot be any negligent misrepresentation claim. That simple fact (or lack of
fact from the Plaintiffs) is why Supreme must be dismissed from this litigation. Despite their
“scorched earth” approach with this lawsuit, Plaintiffs (as sellers of real estate) simply cannot
sustain a claim against the prospective buyer’s lender. There is no relationship. There is no
representation. There is no claim.
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It is axiomatic that in order to bring a cause of action for fraud and negligent
misrepresentation, there must be an actual representation made by the defendant to the plaintiff.
See Baskin v. Mortgage and Trust, Inc., 837 S.W.2d 743, 748 (Tex.App.-Hous.[14 Dist.] 1992)
(no negligent misrepresentation claim could exist when there was no representation made to the
plaintiffs in connection with a home sale); In re Brooks May Music Co., Civ. No. 3:06-cv-2180-
B, 2011 WL 3836530, at *6 (Bankr. N.D. Tex. Mar. 10, 2011), adopted at 2011 WL 3837044
(Aug. 29, 2011) (summary judgment to defendant where defendant “made no representations to
the Plaintiffs” and noting that “Plaintiffs are improperly attempting to rely upon representations
and communications between [creditor] and [debtor] rather than communications among [creditor]
and the Plaintiffs”); Villareal v. City of Laredo, No. 5:03-cv-11, 2007 WL 2900572, at *2 (S.D.
Tex. Sept. 28, 2007) (rejecting claims for fraud and negligent misrepresentation where the “Court
found that no statements were made to the plaintiffs prior to the litigation, and that [defendant]
was not a party to any transaction involving the plaintiffs”); In re Ritz, 567 B.R. 715, 721 (Bankr.
S.D. Tex. 2017) (in analyzing “actual fraud” under Texas Business Organization Code highlighting
the requirement “that the defendant make a representation to the plaintiff” and where no
representation had been made to the plaintiff “no actual fraud could be proven”).
It is undisputed that no such representation of any kind was ever made by Supreme Lending
to Plaintiffs. In their Response, Plaintiff’s emphasize this critical flaw by integrating screenshots
of communications between Supreme Lending, Collier, and Collier’s representatives. (See
Response at pp. 2-4). But they do not and cannot show any actual representation from Supreme
Lending to Plaintiffs. Plaintiffs contend that “Collier relied upon the letter that he and Texas Ally
obtained from Supreme Lending.” (Response at p.5). This sentence alone demonstrates that
Plaintiffs’ claims must be dismissed. The undisputed fact of no representation from Supreme
2
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Lending to Plaintiffs is fatal to Plaintiffs’ claims. Willis v. Marshall, 401 S.W.3d 689, 699
(Tex.App.—El Paso 2013, no pet.) (affirming summary judgment where “one element of negligent
misrepresentation has been conclusively negated”).
To the extent Plaintiffs’ base their fraud and misrepresentation claims on the “loan lock”
agreement, they further the point that the claims must necessarily be dismissed.1 By Plaintiffs’
own admission, the “loan lock” agreement constituted a separate, valid contract between Supreme
Lending and Collier. (Response at p. 2; Plaintiffs’ First Amended Petition at ¶¶ 9, 13). Existence
of this contract negates Plaintiffs’ fraud claim, as Plaintiffs had notice of the agreement and
therefore cannot show justifiable reliance. Bluebonnet Savings Bank, F.S.B. v. Grayridge
Apartment Homes, Inc., 907 S.W.2d 904, 908 (Tex.App.—Houston [1st Dist.] 1995, writ denied);
Samson v. Lone Star Lt.d P’ship v. Hooks, 497 S.W.3d 1, 16 n.4 (Tex.App.—Houston [1st Dis.]
2016, pet. denied). Additionally, the “loan lock” agreement constitutes, at most, a promise of future
conduct and is a matter only between Supreme Lending and Collier –Plaintiffs were never a party
to that agreement. As a matter of law, promises of future conduct cannot form the basis of a
negligent misrepresentation claim. First Bank v. Brumitt, 564 S.W.3d 491, 495 (Tex.App.—
Houston [14th Dist.] 2018, no pet). Simply stated, Plaintiffs cannot raise a viable claim for fraud
or negligent misrepresentation against Supreme Lending.
This case is, in fact, the precise example of the type of “meritless cause of action”
contemplated by the drafters when Rule 91a was enacted. The face of the Complaint and the
Response to the 91a Motion demonstrate one unassailable truth: there was never any representation
1
Plaintiffs use the term “loan lock” in their filings, which presumably refers to the lock on the interest rate listed in
Collier’s prequalification letter and in the Loan Estimate Agreement. Under no circumstance does “loan lock” or
interest rate lock agreement constitute a binding, enforceable loan agreement between a lender and a borrower. And
again, at most, this is only an agreement between a lender and a borrower, but a third party seller to a real estate
transaction has no connection to the lender.
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made by Supreme Lending to Plaintiffs. None. Ever. By Plaintiffs’ own admission that no
representation was ever made to them by Supreme Lending, and by acknowledging Supreme
Lending’s separate and valid agreement with Bradford Collier, the claims necessarily must fail.
Allowing this matter to proceed would upend the very principles of real estate financing and
directly contradict well-established Texas law governing lender liability.
B. The Proper Rule 91a Standard
In their Response, Plaintiffs argue that a court may only consider the “live petition” when
deciding on a Rule 91a motion. (See Response at pp. 6, 7). That is incorrect. Although the petition
governs the factual matters for purposes of Rule 91a, the same cannot be said for legal points. In
fact, under Rule 91a, the Court may consider “any pleading exhibits permitted by Rule 59” when
making a legal conclusion as to the applicability of an affirmative defense. Tex.R.Civ.P. 91a.6;
Bethel v. Quilling, Selander, Lownds, Winslett & Moser, P.C., 595 S.W.3d 651, 655-656 (Tex.
2020). Exhibits permitted under Rule 59 include “all other written instruments, constituting, in
whole or in part, the claim sued on, or the matter set up in defense” which “may be made part of
the pleadings by copies thereof.” Id. As a result, the Court may consider the Exhibits integrated
into Supreme Lending’s affirmative defenses when reviewing the legal viability of Plaintiffs’
claims.2
C. Supreme Lending’s agreement with Collier is an absolute bar to the tortious
interference claim
The agreement in place between Supreme Lending and Collier – and Collier’s inability to
perform under that agreement – necessitates the dismissal of Plaintiffs’ remaining tortious
2
Supreme Lending would also point out that Plaintiffs rely on Collier and Supreme Lending’s preliminary agreements
in their Amended Petition and their Response. Presumably, Plaintiffs are referencing the Loan Estimate documents
when claiming the terms of the loan were “loan locked” by Supreme Lending. (Response, at p. 2; Plaintiffs’ First
Amended Petition, at ¶ 13).
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interference claim as well. West Texas Gas, Inc. v. 297 Gas Co., Inc., 864 S.W.2d 681, 686
(Tex.App.—Amarillo 1993, no writ) (“Interference with a contractual relationship is privileged
where it results from the bona fide exercise of a party’s own rights.”) (citing Southwestern Bell v.
John Carlo Texas, 843S.W.2d 470, 472 (Tex.1992)); see also ACS Investors, Inc. v. McLaughlin,
943 S.W.2d 426, 431 (Tex. 1997). Plaintiffs rely on Supreme Lending and Collier’s pre-
qualification agreement in support of their claims. (Response at p. 2; Plaintiffs’ First Amended
Petition at ¶¶ 9, 13). Plaintiffs acknowledge that agreement was valid, and that Supreme Lending
was unquestionably entitled to enforce the terms of that agreement. Ironically, Supreme Lending’s
enforcement of that agreement operates as an absolute bar to Plaintiffs’ tortious interference
claims. Gulf Liquids New River Project, LLC v. Gulsby Eng’g, Inc., 356 S.W.3d 54, 77
(Tex.App.—Houston [1st Dist.] 2011, no pet.) (“Enforcing or complying with one’s own valid
contract does not constitute unjustifiable interference with another’s contact.”) (citing Maynard v.
Caballero, 752 S.W.2d 179, 721 (Tex.App.—El Paso 1998, writ denied)).
D. Any further amendment to Plaintiffs’ claims would be futile
Regardless of how Plaintiffs may attempt to plead the facts in this case, they are destined
to fail as a matter of law. Thus, Plaintiffs’ request to “be afforded an opportunity to replead” would
be a futile waste of this court’s time as dismissal is the only proper outcome. Bansal v. University
of Texas, M.D. Anderson Cancer Center, 502 S.W.3d 347, 357 (Tex.App.—Houston [14th Dist.]
2016, pet. denied) (holding that determination whether plaintiffs had full and fair opportunity to
amend their pleading was unnecessary, as further amendment would be futile because it would not
bring claims within the scope of the relevant law). Plaintiffs have not, and cannot, identify any
actual representation from Supreme Lending to Plaintiffs, or any legal authority supporting their
position that the seller of real estate can hold a third-party lender liable for a putative borrower’s
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failure to qualify for a home loan. Allowing Plaintiffs to amend their First Amended Petition would
only delay the inevitable, wasting resources in the process.
E. Conclusion
At its core, this case is simple: Plaintiffs are aggrieved sellers attempting to hold their
prospective buyer’s third-party lender liable for a failed real estate transaction despite the fact that
there is no legally-viable claim allowing them to do so. Even assuming the facts pled in Plaintiffs’
complaint to be true for the purposes of this Motion, Plaintiffs cannot identify any representation
or wrongful conduct by Supreme Lending. Thus, for the reasons stated in its Motion and this Reply,
Supreme Lending respectfully requests that the Court dismiss all of Plaintiffs’ claims with
prejudice.
Respectfully submitted,
BRADLEY ARANT BOULT CUMMINGS, LLP
By: /s/ Gabriella E. Alonso
GABRIELLA E. ALONSO
Texas Bar No. 24113527
galonso@bradley.com
ROBERT H. FORD
Texas Bar No. 24074219
rford@bradley.com
600 Travis Street, Suite 4800
Houston, Texas 77002
(713) 576-0300 Telephone
(713) 576-0301 Telecopier
KEITH S. ANDERSON
Texas Bar No. 24075789
kanderson@bradley.com
One Federal Place
1819 Fifth Avenue North
Birmingham, Alabama 35203
(205) 521-8000 Telephone
(205) 488-6714 Telecopier
ATTORNEYS FOR DEFENDANT
EVERETT FINANCIAL, INC. D/B/A
SUPREME LENDING
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CERTIFICATE OF SERVICE
I hereby certify that on the 9th day of August 2021, pursuant to the Texas Rules of Civil
Procedure, a copy of the above and foregoing was served as follows to the following counsel of
record:
Via email: service@jdiamondandassociates.com;
carla@jdiamondandassociates.com; taylor@jdiamondandassociates.com
Carla Courtney
Taylor Diamond
J. Diamond and Associates, PLLC
730 North Loop
Houston, Texas 77009
Attorneys for Plaintiffs
/s/ Gabriella E. Alonso
Gabriella E. Alonso
7
4827-2376-1397.5
Preview
Filed: 8/9/2021 3:25 PM JOHN D. KINARD - District Clerk Galveston County, Texas Envelope No. 56132268 By: Lisa Kelly 8/9/2021 3:29 PM CAUSE NO. 20-CV-1458 STACEY DIAMOND AND § JEFFREY DIAMOND, § IN THE DISTRICT COURT OF § Plaintiffs, § § § v. § § BRADFORD WOOD COLLIER, § GALVESTON COUNTY, TEXAS EVERETT FINANCIAL, INC. d/b/a § SUPREME LENDING, TEXAS § ALLY REAL ESTATE GROUP, § LLC, and HENRY ADONIAS PU § PINEDA § § 122ND JUDICIAL DISTRICT Defendants. § DEFENDANT EVERETT FINANCIAL, INC. d/b/a SUPREME LENDING’S REPLY IN SUPPORT OF ITS RULE 91a MOTION TO DISMISS Defendant Everett Financial, Inc. d/b/a/ Supreme Lending (“Supreme Lending”) submits is Reply in Support of its Rule 91a Motion to Dismiss as follows. A. No Representation by Supreme Lending Means there is No Claim There never was any representation from Supreme Lending to Plaintiffs. Period. Neither Plaintiffs’ First Amended Complaint nor their Response can or do make any mention of any actual representation by Supreme Lending to Plaintiffs. If there was no representation to the Plaintiffs, by definition, there cannot be any negligent misrepresentation claim. That simple fact (or lack of fact from the Plaintiffs) is why Supreme must be dismissed from this litigation. Despite their “scorched earth” approach with this lawsuit, Plaintiffs (as sellers of real estate) simply cannot sustain a claim against the prospective buyer’s lender. There is no relationship. There is no representation. There is no claim. 1 4827-2376-1397.5 It is axiomatic that in order to bring a cause of action for fraud and negligent misrepresentation, there must be an actual representation made by the defendant to the plaintiff. See Baskin v. Mortgage and Trust, Inc., 837 S.W.2d 743, 748 (Tex.App.-Hous.[14 Dist.] 1992) (no negligent misrepresentation claim could exist when there was no representation made to the plaintiffs in connection with a home sale); In re Brooks May Music Co., Civ. No. 3:06-cv-2180- B, 2011 WL 3836530, at *6 (Bankr. N.D. Tex. Mar. 10, 2011), adopted at 2011 WL 3837044 (Aug. 29, 2011) (summary judgment to defendant where defendant “made no representations to the Plaintiffs” and noting that “Plaintiffs are improperly attempting to rely upon representations and communications between [creditor] and [debtor] rather than communications among [creditor] and the Plaintiffs”); Villareal v. City of Laredo, No. 5:03-cv-11, 2007 WL 2900572, at *2 (S.D. Tex. Sept. 28, 2007) (rejecting claims for fraud and negligent misrepresentation where the “Court found that no statements were made to the plaintiffs prior to the litigation, and that [defendant] was not a party to any transaction involving the plaintiffs”); In re Ritz, 567 B.R. 715, 721 (Bankr. S.D. Tex. 2017) (in analyzing “actual fraud” under Texas Business Organization Code highlighting the requirement “that the defendant make a representation to the plaintiff” and where no representation had been made to the plaintiff “no actual fraud could be proven”). It is undisputed that no such representation of any kind was ever made by Supreme Lending to Plaintiffs. In their Response, Plaintiff’s emphasize this critical flaw by integrating screenshots of communications between Supreme Lending, Collier, and Collier’s representatives. (See Response at pp. 2-4). But they do not and cannot show any actual representation from Supreme Lending to Plaintiffs. Plaintiffs contend that “Collier relied upon the letter that he and Texas Ally obtained from Supreme Lending.” (Response at p.5). This sentence alone demonstrates that Plaintiffs’ claims must be dismissed. The undisputed fact of no representation from Supreme 2 4827-2376-1397.5 Lending to Plaintiffs is fatal to Plaintiffs’ claims. Willis v. Marshall, 401 S.W.3d 689, 699 (Tex.App.—El Paso 2013, no pet.) (affirming summary judgment where “one element of negligent misrepresentation has been conclusively negated”). To the extent Plaintiffs’ base their fraud and misrepresentation claims on the “loan lock” agreement, they further the point that the claims must necessarily be dismissed.1 By Plaintiffs’ own admission, the “loan lock” agreement constituted a separate, valid contract between Supreme Lending and Collier. (Response at p. 2; Plaintiffs’ First Amended Petition at ¶¶ 9, 13). Existence of this contract negates Plaintiffs’ fraud claim, as Plaintiffs had notice of the agreement and therefore cannot show justifiable reliance. Bluebonnet Savings Bank, F.S.B. v. Grayridge Apartment Homes, Inc., 907 S.W.2d 904, 908 (Tex.App.—Houston [1st Dist.] 1995, writ denied); Samson v. Lone Star Lt.d P’ship v. Hooks, 497 S.W.3d 1, 16 n.4 (Tex.App.—Houston [1st Dis.] 2016, pet. denied). Additionally, the “loan lock” agreement constitutes, at most, a promise of future conduct and is a matter only between Supreme Lending and Collier –Plaintiffs were never a party to that agreement. As a matter of law, promises of future conduct cannot form the basis of a negligent misrepresentation claim. First Bank v. Brumitt, 564 S.W.3d 491, 495 (Tex.App.— Houston [14th Dist.] 2018, no pet). Simply stated, Plaintiffs cannot raise a viable claim for fraud or negligent misrepresentation against Supreme Lending. This case is, in fact, the precise example of the type of “meritless cause of action” contemplated by the drafters when Rule 91a was enacted. The face of the Complaint and the Response to the 91a Motion demonstrate one unassailable truth: there was never any representation 1 Plaintiffs use the term “loan lock” in their filings, which presumably refers to the lock on the interest rate listed in Collier’s prequalification letter and in the Loan Estimate Agreement. Under no circumstance does “loan lock” or interest rate lock agreement constitute a binding, enforceable loan agreement between a lender and a borrower. And again, at most, this is only an agreement between a lender and a borrower, but a third party seller to a real estate transaction has no connection to the lender. 3 4827-2376-1397.5 made by Supreme Lending to Plaintiffs. None. Ever. By Plaintiffs’ own admission that no representation was ever made to them by Supreme Lending, and by acknowledging Supreme Lending’s separate and valid agreement with Bradford Collier, the claims necessarily must fail. Allowing this matter to proceed would upend the very principles of real estate financing and directly contradict well-established Texas law governing lender liability. B. The Proper Rule 91a Standard In their Response, Plaintiffs argue that a court may only consider the “live petition” when deciding on a Rule 91a motion. (See Response at pp. 6, 7). That is incorrect. Although the petition governs the factual matters for purposes of Rule 91a, the same cannot be said for legal points. In fact, under Rule 91a, the Court may consider “any pleading exhibits permitted by Rule 59” when making a legal conclusion as to the applicability of an affirmative defense. Tex.R.Civ.P. 91a.6; Bethel v. Quilling, Selander, Lownds, Winslett & Moser, P.C., 595 S.W.3d 651, 655-656 (Tex. 2020). Exhibits permitted under Rule 59 include “all other written instruments, constituting, in whole or in part, the claim sued on, or the matter set up in defense” which “may be made part of the pleadings by copies thereof.” Id. As a result, the Court may consider the Exhibits integrated into Supreme Lending’s affirmative defenses when reviewing the legal viability of Plaintiffs’ claims.2 C. Supreme Lending’s agreement with Collier is an absolute bar to the tortious interference claim The agreement in place between Supreme Lending and Collier – and Collier’s inability to perform under that agreement – necessitates the dismissal of Plaintiffs’ remaining tortious 2 Supreme Lending would also point out that Plaintiffs rely on Collier and Supreme Lending’s preliminary agreements in their Amended Petition and their Response. Presumably, Plaintiffs are referencing the Loan Estimate documents when claiming the terms of the loan were “loan locked” by Supreme Lending. (Response, at p. 2; Plaintiffs’ First Amended Petition, at ¶ 13). 4 4827-2376-1397.5 interference claim as well. West Texas Gas, Inc. v. 297 Gas Co., Inc., 864 S.W.2d 681, 686 (Tex.App.—Amarillo 1993, no writ) (“Interference with a contractual relationship is privileged where it results from the bona fide exercise of a party’s own rights.”) (citing Southwestern Bell v. John Carlo Texas, 843S.W.2d 470, 472 (Tex.1992)); see also ACS Investors, Inc. v. McLaughlin, 943 S.W.2d 426, 431 (Tex. 1997). Plaintiffs rely on Supreme Lending and Collier’s pre- qualification agreement in support of their claims. (Response at p. 2; Plaintiffs’ First Amended Petition at ¶¶ 9, 13). Plaintiffs acknowledge that agreement was valid, and that Supreme Lending was unquestionably entitled to enforce the terms of that agreement. Ironically, Supreme Lending’s enforcement of that agreement operates as an absolute bar to Plaintiffs’ tortious interference claims. Gulf Liquids New River Project, LLC v. Gulsby Eng’g, Inc., 356 S.W.3d 54, 77 (Tex.App.—Houston [1st Dist.] 2011, no pet.) (“Enforcing or complying with one’s own valid contract does not constitute unjustifiable interference with another’s contact.”) (citing Maynard v. Caballero, 752 S.W.2d 179, 721 (Tex.App.—El Paso 1998, writ denied)). D. Any further amendment to Plaintiffs’ claims would be futile Regardless of how Plaintiffs may attempt to plead the facts in this case, they are destined to fail as a matter of law. Thus, Plaintiffs’ request to “be afforded an opportunity to replead” would be a futile waste of this court’s time as dismissal is the only proper outcome. Bansal v. University of Texas, M.D. Anderson Cancer Center, 502 S.W.3d 347, 357 (Tex.App.—Houston [14th Dist.] 2016, pet. denied) (holding that determination whether plaintiffs had full and fair opportunity to amend their pleading was unnecessary, as further amendment would be futile because it would not bring claims within the scope of the relevant law). Plaintiffs have not, and cannot, identify any actual representation from Supreme Lending to Plaintiffs, or any legal authority supporting their position that the seller of real estate can hold a third-party lender liable for a putative borrower’s 5 4827-2376-1397.5 failure to qualify for a home loan. Allowing Plaintiffs to amend their First Amended Petition would only delay the inevitable, wasting resources in the process. E. Conclusion At its core, this case is simple: Plaintiffs are aggrieved sellers attempting to hold their prospective buyer’s third-party lender liable for a failed real estate transaction despite the fact that there is no legally-viable claim allowing them to do so. Even assuming the facts pled in Plaintiffs’ complaint to be true for the purposes of this Motion, Plaintiffs cannot identify any representation or wrongful conduct by Supreme Lending. Thus, for the reasons stated in its Motion and this Reply, Supreme Lending respectfully requests that the Court dismiss all of Plaintiffs’ claims with prejudice. Respectfully submitted, BRADLEY ARANT BOULT CUMMINGS, LLP By: /s/ Gabriella E. Alonso GABRIELLA E. ALONSO Texas Bar No. 24113527 galonso@bradley.com ROBERT H. FORD Texas Bar No. 24074219 rford@bradley.com 600 Travis Street, Suite 4800 Houston, Texas 77002 (713) 576-0300 Telephone (713) 576-0301 Telecopier KEITH S. ANDERSON Texas Bar No. 24075789 kanderson@bradley.com One Federal Place 1819 Fifth Avenue North Birmingham, Alabama 35203 (205) 521-8000 Telephone (205) 488-6714 Telecopier ATTORNEYS FOR DEFENDANT EVERETT FINANCIAL, INC. D/B/A SUPREME LENDING 6 4827-2376-1397.5 CERTIFICATE OF SERVICE I hereby certify that on the 9th day of August 2021, pursuant to the Texas Rules of Civil Procedure, a copy of the above and foregoing was served as follows to the following counsel of record: Via email: service@jdiamondandassociates.com; carla@jdiamondandassociates.com; taylor@jdiamondandassociates.com Carla Courtney Taylor Diamond J. Diamond and Associates, PLLC 730 North Loop Houston, Texas 77009 Attorneys for Plaintiffs /s/ Gabriella E. Alonso Gabriella E. Alonso 7 4827-2376-1397.5