Frank Kamas v. Bay Mountain Fund I, LLC

CourtCourt of Appeals of Texas
DecidedNovember 28, 2023
Docket14-22-00612-CV
StatusPublished

This text of Frank Kamas v. Bay Mountain Fund I, LLC (Frank Kamas v. Bay Mountain Fund I, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Frank Kamas v. Bay Mountain Fund I, LLC, (Tex. Ct. App. 2023).

Opinion

Affirmed and Memorandum Opinion filed November 28, 2023.

In The

Fourteenth Court of Appeals

NO. 14-22-00612-CV

FRANK KAMAS, Appellant V. BAY MOUNTAIN FUND I, LLC, Appellee

On Appeal from the 333rd District Court Harris County, Texas Trial Court Cause No. 2020-45699

MEMORANDUM OPINION

Appellant Frank Kamas appeals an order granting traditional and no- evidence summary judgment in favor of Appellee Bay Mountain Fund I, LLC. We affirm.

BACKGROUND

In June 2019, Kamas sought a hard money loan 1 from Bay Mountain to

1 Hard money loans are short-term, high-interest-rate loans to real-estate investors for which the purchase and remodel a residential investment property located at 11423 Sagewhite Drive, Houston, Texas (the “property”). According to the Final Terms Sheet, Kamas would receive a loan from Bay Mountain for $178,200 with 12.5 percent interest per year; his monthly payments would be for interest only; and there would be a holdback for the remodel of the property totaling $15,680 at the time of closing based on the budget and estimate submitted by him.

On June 26, 2019, Kamas obtained a loan from Bay Mountain in the principal amount of $178,200 and bought the property. He signed a promissory note in the principal amount of $178,200 as well as a deed of trust to secure payment of the promissory note listing Bay Mountain as the lender. The promissory note contains a conspicuous merger close, which provides:

NOTICE: THIS NOTE AND ALL OTHER DOCUMENTS RELATING TO THE INDEBTEDNESS evidenced hereby constitute a written loan agreement, which represents the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties relating to this Note and the indebtedness evidenced thereby. In accordance with Bay Mountain’s standard procedures, Kamas also signed a Non-Homestead Affidavit averring that (1) the property is not and is not intended to be his “true and lawful homestead”; (2) he will not reside in it or claim it as his homestead; (3) he “is obtaining the financing for business or investment purposes only and not for personal, family or household purposes”; (4) the affidavit was “made to induce” Bay Mountain to loan funds to him and the loan would “only be disbursed in reliance upon” these statements; and (5) his “true and lawful

real estate itself is offered as collateral (i.e., short-term private mortgages). Vodicka v. Lahr, No. 03-10-00126-CV, 2012 WL 2075713, at *1 (Tex. App.—Austin June 6, 2012, no pet.) (mem. op.).

2 homestead” was at another property. He additionally signed a Tax Escrow Agreement, in which he agreed to make monthly payments to be placed in escrow for the payment of real estate property taxes. Kamas also agreed to keep the property insured and reimburse Bay Mountain for the cost of insurance if he failed to keep it insured.

After June 2020, Kamas made no payments to Bay Mountain, including payments for property taxes and insurance. Bay Mountain proceeded to pay the insurance premiums and taxes on the property. In July 2020, Bay Mountain notified Kamas that the property would be sold at a substitute trustee’s sale on August 4, 2020.

Kamas sued Bay Mountain on July 31, 2020, and asserted claims for breach of contract, common law fraud, violation of Texas Property Code section 5.065, violations of the Texas Debt Collection Act, and agency and respondeat superior. On October 2, 2020, Bay Mountain filed its original answer and a counterclaim for breach of contract. Kamas filed his original answer to Bay Mountain’s counterclaim in December 2020, alleging affirmative defenses of unclean hands, lack of standing, lack of subject matter jurisdiction, statute of limitations, prior material breach and/or discharge, equitable estoppel, promissory estoppel and/or quasi-estoppel, laches, waiver, ratification, release, statute of frauds, contributory negligence, comparative fault, and proportional responsibility.

In August 2021, Kamas filed his first amended petition and asserted claims for breach of contract, promissory estoppel, fraud (including fraud in the inducement, fraud in the factum, fraud in the execution, and common law fraud), statutory fraud, usury, accounting, declaratory judgment, violations of the Texas Debt Collection Act, violations of the Truth in Lending Act, violations of the Real Estate Settlement Procedures Act, conspiracy, alter ego, joint enterprise, agency,

3 vicarious liability, and/or respondeat superior. Nine days later, Bay Mountain filed a second amended petition, alleging numerous affirmative defenses as well as counterclaims for breach of contract, fraud, and fraud in real estate transaction.

In January 2022, Bay Mountain filed a no-evidence and traditional motion for partial summary judgment. Bay Mountain argued it is entitled to summary judgment pursuant to Texas Rule of Civil Procedure 166a(i) because (1) “Kamas is unable to provide any evidence as to the essential elements of the following claims asserted by Kamas in his First Amended Petition:” promissory estoppel, fraud (including fraud in the inducement, fraud in the factum, fraud in the execution, and common law fraud), statutory fraud (including fraud in a real estate transaction), usury, accounting, declaratory judgment, violations of the Texas Debt Collection Act, violations of the Truth in Lending Act, violations of the Real Estate Settlement Procedures Act, conspiracy, theories of alter ego, joint enterprise, and/or single business enterprise, and agency, vicarious liability, and/or respondeat superior; and (2) there is no evidence to support Kamas’s affirmative defenses of unclean hands, waiver, equitable estoppel, promissory estoppel and/or quasi- estoppel, ratification, offset, release, prior material breach, failure to mitigate damages, fraud, and illegality.

Regarding its traditional motion for partial summary judgment, Bay Mountain argued that (1) Kamas’s fraud and estoppel claims are barred by the express language of the loan documents; (2) Kamas is prohibited as a matter of law from recovering under his promissory estoppel claim; (3) the Texas Debt Collection Act, Truth in Lending Act, and Real Estate Settlement Procedures Act are inapplicable; (4) Kamas’s usury claim is barred by the enforceable usury savings clause in the loan documents; and (5) Kamas’s declaratory judgment claim fails to present new controversies.

4 In February 2022, Bay Mountain filed a third amended answer, alleging numerous affirmative defenses and counterclaims for breach of contract, fraud, fraud in a real estate transaction, fraud by non-disclosure, unjust enrichment, and quantum meruit. About a month later, Kamas filed (1) a second amended petition, in which he asserted only claims for breach of contract, fraud (including fraud in the inducement, fraud in the factum, fraud in the execution, and common law fraud), and usury; and (2) an amended answer to Bay Mountain’s third amended counterclaims, in which he limited his affirmative defenses to illegality, offset, and fraud. The following day, Kamas filed his response to Bay Mountain’s motion for partial summary judgment. A few days thereafter, Bay Mountain filed (1) a reply to Kamas’s summary judgment response; and (2) objections to Kamas’s summary judgment evidence. The trial court made no ruling on the objections.

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Cite This Page — Counsel Stack

Bluebook (online)
Frank Kamas v. Bay Mountain Fund I, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/frank-kamas-v-bay-mountain-fund-i-llc-texapp-2023.