Court reverses judgment that awarded NEC Networks $6,000 in damages in contract dispute case

By Charmaine Little | Jan 30, 2019

SAN ANTONIO – A San Antonio appellate court has reversed some judgment awards in a contract dispute case.

The 4th Court of Appeals in San Antonio ruled on Jan. 23 to affirm in part and reverse in part a judgment from the 73rd Judicial District Court in Bexar County. The Appeals Court ruled that the lower court did not err in ordering appellant AME & FE Investment take nothing on its claims against appellee NEC Networks. The Appeals Court did rule however that NEC is not entitled to monetary recovery for certain claims.

The Appeals Court first reversed the part of the judgment that gave NEC Networks $6,000 in damages and pre- and post-judgment interest and determined it was best for NEC not to receive anything on its damages claim. It then reversed the part of the judgment that gave NEC its request for a permanent injunction and ruled a judgment that NEC take nothing.

The Appeals Court also reversed the part of the judgment that granted NEC’s motion for specific performance and vacating AME & FE Investment’s liens and security interests. The court remanded the petition for specific performance back to the trial court for that court to decide the amount NCE should pay to AME based on the promissory notes dated for February 2009 and September 2009. 


Justice Irene Rios   Texas courts

As for the rest of the judgment, the Appeals Court affirmed.

The opinion states that AME loaned NEC half a million dollars back in February 2009 and $1 million in September 2009 via notes that were secured from NEC’s property liens. The loans matured and were supposed to be paid on March 29, 2012. Before then, NEC told AME it was approved for a new loan that would allow it to pay the notes. The opinion states AME did not provide the payoff letter prior to that date and NEC did not tender payment.

"NEC continued to make, and AME continued to accept, monthly interest payments of $12,500 until Nov. 19, 2012. On that date, NEC tendered $1,507,916.67 in payment of the outstanding loan principal plus accrued but unpaid interest on both notes. AME refused to accept the tender and refused to release its liens on NEC’s property," according to the opinion.

The trial court granted summary judgment in favor of NEC in February 2016 on its breach of contract claims and dismissed AME's breach of contract counterclaims. NEC filed a second motion seeking traditional and no-evidence summary judgment on AME's breach of contract counterclaims, which the court granted in part and denied in part in May 2016. AME appealed a final judgment from March 2017.

Justice Irene Rios authored the opinion. Justice Rebeca C. Martinez and Chief Justice Sandee Bryan Marion concurred.

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