HOUSTON -- The 14th Court of Appeals confirmed April 30 a $3 million judgment in favor of a bank in a guarantor tort claim concerning a promissory note.
Mike Wyrick and Greg Ruhnke appealed the original decision from Travis County District Court in the Business Bank of Texas’ lawsuit.
While the ruling it affirmed the $3 million judgment, the appeals court did reverse an anti-suit injunction motion that the lower court had green-lighted for the bank. Justice Kevin Jewell authored the opinion with justices Tracy Christopher and Kem Frost rounding out the three-judge panel.
The court agreed that the appellants’ fraudulent inducement claims failed.
“Though as a traditional summary judgment movant on its breach-of-guaranty claim the bank had no burden to negate appellants’ affirmative defenses, the bank’s motion challenged the element of justifiable reliance," the ruling said. "The bank argued pre-emptively that the guaranties’ written terms contradict appellants’ purported reliance on the bank’s alleged oral misrepresentation that it had perfected, or would perfect, its security interest in the Barquero SWD. Thus, the bank contends, the appellants’ fraudulent inducement defense fails as a matter of law on the justifiable reliance element.”
The appellants also said the guaranties couldn’t be enforced thanks to a mutual mistake premise. The appeals court also shut down this argument and said the appellants once again failed to provide evidence that both parties made an err.
As for their counterclaims against the bank, which the lower court granted summary judgment against them, the appellants also challenged the notion that they didn’t have standing. Unfortunately, the appeals court said that the appellants don’t actually own the well. Barquero Energy Services is the rightful owner, meaning the appellants don’t have standing to fight the battle for Barquero.
It wasn’t all bad for the appellants. The appeals court did reverse the lower court’s ruling concerning the anti-suit injunction the bank was granted. It determined a lawsuit in Dimmitt County wasn’t an interference with the current lawsuit in Travis County. It also doesn’t infringe on public interest.
The appeals court said, “The record does not show that the Dimmit County suit interferes directly with enforcement, or affects the efficacy, of the Travis County judgment. The judgment is enforceable in Dimmit County and that court is required to respect it.”
The issue started after the bank loaned $3 million to Barquero Energy Services LLC to pay for investment in a salt water disposal well. Barquero and its managing member Hyrick signed a promissory note. The bank never signed the note but the appellants say it promised them it wouldn’t go after guaranties but would instead execute on the collateral. In a different agreement, all parties said arbitration would be the method they’d use to settle any disputes.
When Baquero defaulted on the note, the bank didn’t foreclose but went after the guaranties. The appellants argued the bank couldn’t foreclose even if it wanted to because it didn’t secure lease assignments landowner consent. The bank went even further and started acting as the owner of the well, a move the appellants said caused them to lose customers and money.
Still, it was the bank that sued in Travis County for breach of personal guaranties. It ultimately agreed to arbitrate but, at the same time, the appellants’ company, Barquero Fund I, LLC, sued the bank in Dimmitt County for very similar allegations. The bank then filed a motion for sanctions and for an anti-suit injunction in Travis County.
In the Travis County suit, the court granted the bank summary judgment and $3 million in damages. It also granted the motion for sanctions and anti-suit injunction, which would block the appellants from suing it in any county but Travis, including Dimmitt.
Wyrick and Ruhnke appealed. The appeals court affirmed the former ruling but reversed the latter.