Angel Mortgage Income Resources and Preston Julian v. Rose Guidry Kinsey

Opinion

DATE 10/19/2015 FILED IN

R

NOTICE OF APPEALS 1st COURT OF APPEALS ASSIGNMENT OF COURT OF APPEALS HOUSTON, TEXAS 10/19/2015 1:34:20 PM

TO: 1ST COURT OF APPEALS CHRISTOPHER A. PRINE

Clerk

From: Deputy Clerk: IRMA MEDINA Chris Daniel, District Clerk Harris County, T E X A S

CAUSE: 2014-31312 VOLUME PAGE OR IMAGE # 67496111 DUE 12/15/2016 ATTORNEY 24010071 NOTICE OF APPEAL HAS BEEN ASSIGNED TO THE 1ST DATE ORDER SIGNED: 7/20/2015 MOTION FOR NEW TRIAL FILED: 8/17/2015 REQUEST TRANSCRIPT DATE FILED N/A NOTICE OF APPEAL DATE FILED 10/16/2015

NUMBER OF DAYS: ( CLERKS RECORD ) 120 FILE ORDERED: YES NO IMAGED FILED: YES NO

CODES FOR NOTICE OF APPEAL: BC, C

CHRIS DANIEL

Harris County, District Clerk

By: /s/IRMA MEDINA

IRMA MEDINA, Deputy

BC NOTICE OF APPEAL FILED BG NOTICE OF APPEAL FILED – GOVERNMENT C JUDGMENT BEING APPEALED D- ACCELERATED APPEAL OA NO CLERK’S RECORD REQUEST FILED O CLERK’S RECORD REQUEST FILED (W/NOTICE OF APPEAL) NA AMENDED NOTICE OF APPEAL

AP9 R04-30-92 S:\FormsLib\Civil Bureau\Civil Courts & Post Judgment\Post Trial\Appeal Status Card Revised 01-18-2013

10/16/2015 8:02:41 PM

Chris Daniel - District Clerk Harris County Envelope No. 7422009

By: Irma Medina

Filed: 10/16/2015 8:02:41 PM

CAUSE NO. 2014-31312

ROSE GUIDRY KINSEY § IN THE DISTRICT COURT §

§

v. § § 164TH JUDICIAL DISTRICT §

ANGEL MORTGAGE INCOME § RESOURCES AND § PRESTON JULIAN § HARRIS COUNTY, TEXAS

DEFENDANTS’ NOTICE OF APPEAL

TO THE HONORABLE JUDGE OF SAID COURT:

COME NOW Defendants, Angel Mortgage Income Resources and Preston Julian (collectively hereinafter referred to as “Defendants”), who file this Notice of Appeal. Notice is hereby given that Defendants, seeks to alter the trial court’s Final Summary Judgment and Order Signed Awarding Attorney’s Fees.

1. The trial court, cause number, and style of this case are shown in the caption above.

2. The Final Summary Judgment and Order Signed Awarding Attorney’s Fees was signed on July 20, 2015.

3. Defendants filed a Motion for New Trial and Reconsideration on August 17, 2015 extending the time to perfect an appeal until October 18, 2015.

4. The Motion for New Trial and Reconsideration was denied by rule of law.

5. Defendants desires to appeal all portions of the Judgment and award of

attorney’s fees.

2014-31312 Defendants’ Notice of Appeal 1 6. This appeal is being taken to either the First Court of Appeals or the Fourteenth Court of Appeals, in Houston, Texas.

Respectfully submitted,

_/S/ James A. Gray III_________ James A. Gray III

TBA No. 2410071

6302 Drayton Hall

Missouri City, Texas 77459 Tel: (713) 598-0688

Fax: (800) 524-4102

Counsel for Defendants

ANGEL MORTGAGE INCOME RESOURCES AND PRESTON JULIAN

CERTIFICATE OF SERVICE

I hereby certify that on October 16, 2015, a true and correct copy of the foregoing instrument was served on all counsel and parties pursuant to the Texas Rules of Civil Procedure by facsimile and/or electronic service, as follows:

Marie Jamison WRIGHT & CLOSE, L.L.P. One Riverway, Suite 2200 Houston, Texas 77056 Telephone: (713) 572-4321 Facsimile: (713) 572-4320 jamison@wrightclose.com Counsel for Plaintiff

_/S/ James A. Gray III_________ James A. Gray III

2014-31312 Defendants’ Notice of Appeal 2

8/17/2015 6:41:54 PM

Chris Daniel - District Clerk Harris County Envelope No. 6532540

By: Bonisha Evans

Filed: 8/17/2015 6:41:54 PM

CAUSE NO. 2014-31312

ROSE GUIDRY KINSEY § IN THE DISTRICT COURT §

§

v. § 164TH JUDICIAL DISTRICT §

§

ANGEL MORTGAGE INCOME § RESOURCES AND § PRESTON JULIAN § HARRIS COUNTY, TEXAS

DEFENDANTS ANGEL MORTGAGE INCOME RESOURCES AND PRESTON JULIAN’S MOTION FOR RECONSIDERATION AND NEW TRIAL

TO THE HONORABLE JUDGE OF SAID COURT:

COME NOW Defendants Angel Mortgage Income Resources and Preston Julian (collectively hereinafter referred to as “Defendants”), who file this Motion for Reconsideration and New Trial and in support thereof, respectfully show this Court as follows:

I. BACKGROUND

Plaintiff Rose Guidry Kinsey (hereinafter referred to as “Plaintiff”) brought suit against Defendants asserting breach of contract and seeking a declaratory judgment. In December of 2014, Plaintiff filed a Motion for Summary Judgment claiming there were no issues of material fact and that she was entitled to judgment as a matter of law on her breach of contract and declaratory judgment claims. This Court granted Plaintiff’s motion and entered an Order for Interlocutory Summary Judgment on January 16, 2015. On March 5, 2015, Plaintiff filed a Motion for Summary Judgment seeking reasonable and necessary attorneys’ fees as well as costs and expenses. Defendants’ Motion for Reconsideration and New Trial 1

Defendants now file this Motion for Reconsideration and New Trial because this Court entered an Order as to Plaintiff’s breach of contract claim without requiring that Plaintiff prove all elements of her claim. Additionally, this Court entered an Order as to Plaintiff’s attorneys’ fees; however, Plaintiff is not entitled to attorneys’ fees. Accordingly, Defendants move for reconsideration of this Court’s prior Orders and respectfully request the Court consider the following:

II. MOTION FOR RECONSIDERATION AND NEW TRIAL 1. Plaintiff failed to establish all elements as to her breach of contract claim.

On December 19, 2014, Plaintiff filed a Motion for Summary Judgment asserting a breach of contract and seeking a declaratory judgment as to a dispute regarding the percentage of interest to be charged under a note held by Defendants. Defendants responded to Plaintiff’s motion by showing that Plaintiff failed to establish the element of damages under her breach of contract claim and therefore, could not succeed on her Motion for Summary Judgment. The basis of Defendants’ argument was that the only monetary losses, if any, suffered by Plaintiff were the attorneys’ fees she incurred in bringing suit; a choice she made and, expenses she chose to incur without suffering any other damages. But what Plaintiff fails to acknowledge is that attorneys’ fees alone are not sufficient to support the element of damages under a breach of contract claim because the damages must be caused by the defendant’s breach of the contract, not the investigation, filing and prosecution of a lawsuit.1 Plaintiff failed to establish any damages.

1 B&W Sup. Beckman, 305 S.W.3d 10, 16 (Tex. App.—Houston [1st Dist.] 2009, pet. denied). Defendants’ Motion for Reconsideration and New Trial 2

Because evidence of damages is necessary to support a finding for breach of contract and Plaintiff failed to establish such damages, this Court was without the necessary evidence to enter a judgment against Defendants.

Even if Plaintiff did establish some evidence of damages—which Defendants vehemently deny—Plaintiff failed to prove that Defendants’ alleged breach caused such damages. As such, Defendants request that this Court vacate its Order granting Plaintiff’s Motion for Summary Judgment and grant a new trial regarding the same.

2. Attorneys’ fees cannot be awarded against a partnership under Chapter 38 of the Texas Civil Practice and Remedies Code.

On March 5, 2015, Plaintiff filed a Motion for Summary Judgment as to her attorneys’

fees. The Court entered an Order granting Plaintiff’s fees; however, Plaintiff was not entitled to recover such fees. Not only did Plaintiff fail to establish all elements of her breach of contract claim, but even if Plaintiff were able to—which she cannot— under the relied upon statute, attorneys’ fees cannot be awarded against a partnership, nor, therefore, against an entity sued in its capacity only as a partner. Specifically, partnerships are not subject to the fee-shifting scheme under Chapter 38 of the Texas Civil Practice and Remedies Code. The legislature included “individuals” and “corporations,” but not partnerships; therefore, such an award by the Court against a partnership, is improper. As such, Defendants respectfully requests that this Court reconsider its prior Order awarding Plaintiff’s attorneys’ fees and vacate the same.

Defendants’ Motion for Reconsideration and New Trial 3 3. Plaintiff is not entitled to attorneys’ fees under the Declaratory Judgment Act.

Plaintiff was not entitled to an award of attorneys’ fees under her breach of contract claim, as explained above; therefore, Plaintiff cannot use the Declaratory Judgment Act to recover otherwise unrecoverable fees.

Plaintiff’s Motion for Summary Judgment as to attorneys’ fees was heard on July 17, 2015—despite her failure to prove damages under her breach of contract claim. In addition to a lack of damages, Plaintiff was not entitled to recover attorneys’ fees under Chapter 38 of the Texas Civil Practice and Remedies Code because such statute does not allow recovery against partnerships. Nonetheless, Plaintiff was awarded attorneys’ fees under the Declaratory Judgment Act. Such award is improper and Texas law supports the assertion that the outcome reached on July 17, 2015, was the wrong result. Specifically, the prevailing jurisprudence of MBM Financial held that “when a claim for declaratory relief is merely tacked onto a standard suit based on a matured breach of contract, allowing fees under Chapter 37 would frustrate the limits Chapter 38 imposes on such fee recoveries.2 [Further], granting fees under Chapter 37 when they are not permitted under the specific common-law or statutory claims involved would violate the rule that specific provisions should prevail over general ones.3 While the Legislature intended the Act to be remedial, it did not intend to supplant all other statutes and remedies.”4 Because Plaintiff could not recover fees against Defendants under Chapter 38 of the Texas Civil Practice and Remedies Code, it follows that she cannot recover fees under the

2 MBM Financial v. Woodlands Operating Co., 292 S.W.3d 660 (Tex. 2009) (emphasis added). 3 Id. 4 Id.

Defendants’ Motion for Reconsideration and New Trial 4

Declaratory Judgment Act because her declaratory judgment claim was merely tacked on to her breach of contract claim—making an award of attorneys’ fees improper.

4. The Order entered by the Court does not reflect the ruling made on July 17, 2015.

During the July 17, 2015, hearing on Plaintiff’s Motion for Summary Judgment as to attorneys’ fees, the Court ruled in favor of Plaintiff. However, the basis of the Court’s ruling is not reflected in the Order entered. Specifically, following the hearing, Plaintiff’s counsel drafted the Order. Defendants’ counsel immediately objected to the Order via email correspondence. Plaintiffs’ counsel refused to acknowledge Defendants’ objections. The Court signed the Order, which was not agreed to by Defendants. In addition to being opposed to the form of the Order, Defendants objected to the contents of the Order, as the contents did not accurately reflect the reasons and ruling of the Court from the bench. As a result, Defendants move for reconsideration of this Court’s Order and additionally request that such Order is vacated.

III. CONCLUSION

Defendants respectfully request that this Court consider its Motion for Reconsideration and New Trial because Plaintiff failed to establish her claim for breach of contract by failing to prove the element of damages; therefore, Plaintiff’s Motion for Summary Judgment should not have been granted. And, even if Plaintiff’s Motion for Summary Judgment was properly granted—which Defendants deny—Plaintiff was not entitled to recover attorneys’ fees under Chapter 38 of the Texas Civil Practice and Defendants’ Motion for Reconsideration and New Trial 5

Remedies Code. Because attorneys’ fees under Plaintiff’s breach of contract claim are unpermitted under the statute, Plaintiff should not have recovered her attorneys’ fees under the Declaratory Judgment Act. Lastly, the Order entered by the Court does not reflect the reasons and rulings of the Court in the July 17, 2015, hearing, and as such, Defendants respectfully request this Court vacate it prior Order granting Plaintiff’s Motion for Summary Judgment and further vacate its Order awarding attorneys’ fees. Defendants further request a new trial on the merits.

IV. PRAYER

WHEREFORE, PREMISES CONSIDERED, Defendants pray that this Court grant its Motion for Reconsideration and New Trial, vacate its Order granting Plaintiff’s Motion for Summary Judgment, vacate its Order awarding Plaintiff’s attorneys’ fees, and grant Defendants such other and further relief, both general and special, to which Defendants may show itself to be justly entitled.

Respectfully submitted,

/s/ James A. Gray III

James A. Gray III

TBA No. 2410071

6302 Drayton Hall

Missouri City, Texas 77459 Tel: (713) 598-0688

Fax: (800) 524-4102

Counsel for DEFENDANTS

ANGEL MORTGAGE INCOME

RESOURCES AND PRESTON

JULIAN

Defendants’ Motion for Reconsideration and New Trial 6

CERTIFICATE OF CONFERENCE

This is to certify that on the 17th day of August, 2015, the undersigned conferred with the offices of Plaintiff’s counsel and we were unable to reach an agreement on this motion.

/s/ James A. Gray III

James A. Gray III

CERTIFICATE OF SERVICE

I hereby certify that on August 17, 2015, a true and correct copy of the foregoing instrument was served on all counsel and parties pursuant to the Texas Rules of Civil Procedure by facsimile and/or electronic service, as follows:

Marie Jamison WRIGHT & CLOSE, L.L.P. One Riverway, Suite 2200 Houston, Texas 77056 Telephone: (713) 572-4321 Facsimile: (713) 572-4320 jamison@wrightclose.com Counsel for Plaintiff

/s/ James A. Gray III

James A. Gray III

Defendants’ Motion for Reconsideration and New Trial 7

Pgs-5

LFPLX ATFEX DC

JU2FN (NSD#) JUSTICE INFORMATION MANAGEMENT SYSTEM OCT 19, 2015(C1) INT6510 CIVIL CASE INTAKE OPT: _____ - INT GENERAL PARTY INQUIRY PAGE: 1 - 2

CASE NUM: 201431312__ PJN> __ TRANS NUM: _________ CURRENT COURT: 164 PUB? _ CASE TYPE: BREACH OF CONTRACT CASE STATUS: DISPOSED (FINAL) STYLE: KINSEY, ROSE GUIDRY VS ANGEL MORTGAGE INCOME RESOURCES ============================================================================= **** INACTIVE PARTIES **** PJN PER/CONN COC BAR PERSON NAME PTY ASSOC. ATTY NUM NUMBER STAT _ 00005-0001 DEF 24010071 JULIAN, PRESTON GRAY, JAMES A _ 00005-0001 DPS JULIAN, PRESTON _ 00004-0001 AGT ANGEL MORTGAGE INCOME RESOURCE _ 00003-0001 DEF 24010071 JULIAN, PRESTON GRAY, JAMES A _ 00003-0001 DPS JULIAN, PRESTON _ 00002-0001 DEF 24010071 ANGEL MORTGAGE INCOME RESOURCE GRAY, JAMES A _ 00002-0001 DPS ANGEL MORTGAGE INCOM _ 00002-0001 PAD 00796559 FLOWERS, JOEL BENJAMIN III

==> (9) CONNECTION(S) FOUND 1=ACTIVE 2=ATY. INQ. 3=ACT.ENTRY 4=ISS. SERV. 5=DOC. INQ. 6=CASE INQ. 7=BACKWARD 8=FORWARD 9=PTY. ADDR. 10=REFRESH 11=HELP

JU2FN (NSD#) JUSTICE INFORMATION MANAGEMENT SYSTEM OCT 19, 2015(C1) INT6510 CIVIL CASE INTAKE OPT: _____ - INT GENERAL PARTY INQUIRY PAGE: 2 - 2

CASE NUM: 201431312__ PJN> __ TRANS NUM: _________ CURRENT COURT: 164 PUB? _ CASE TYPE: BREACH OF CONTRACT CASE STATUS: DISPOSED (FINAL) STYLE: KINSEY, ROSE GUIDRY VS ANGEL MORTGAGE INCOME RESOURCES ============================================================================= **** INACTIVE PARTIES **** PJN PER/CONN COC BAR PERSON NAME PTY ASSOC. ATTY NUM NUMBER STAT _ 00001-0001 PLT 24044647 KINSEY, ROSE GUIDRY JAMISON, EDIT

==> (9) CONNECTION(S) FOUND 1=ACTIVE 2=ATY. INQ. 3=ACT.ENTRY 4=ISS. SERV. 5=DOC. INQ. 6=CASE INQ. 7=BACKWARD 8=FORWARD 9=PTY. ADDR. 10=REFRESH 11=HELP