Jadon F. Newman v. Firstmark Credit Union
Opinion
ACCEPTED 03-14-00315-CV 6941457 THIRD COURT OF APPEALS AUSTIN, TEXAS 9/15/2015 5:41:02 PM JEFFREY D. KYLE CLERK
CAUSE NO. 03-14-00315-CV
IN THE THIRD COURT OF APPEALS AUSTIN, TEXAS
JADON NEWMAN September 15, 2015 Appellant v.
FIRSTMARK CREDIT UNION Appellee
MOTION FOR REHEARING
Respectfully submitted,
Craig S. Smith SBN 18553570 14493 S.P.I.D., suite A, P.M.B. 240 Corpus Christi, Tx. 78418 361 728 8037 csslawrr@gmail.com
ORAL ARGUMENT REQUESTED TO THE HONORABLE THIRD COURT OF APPEALS:
COMES NOW JADON NEWMAN, respectfully showing the Court as follows:
Newman respectfully disagrees and objects to this Honorable Court’s decision. The
Court erred by finding Firstmark conclusively proved all elements of its claim on the Guarantee.
This Court erred by affirming summary judgment on a theory that was not presented
below. This Court writes disclaimer language buried in a sentence fragment in Paragraph 12 in
this form Guaranty conclusively barred Newman’s fraud claims or his defense of equitable
estoppel. Firstmark did not raise this issue in its motion for summary judgment in the trial court.
App. 1 (Firstmark’s First Amended Motion for Summary Judgment). Paragraphs 13-16 and 20-
22 of its motion stated a very different argument. Furthermore, this Court failed to quote all of
Paragraph 12 in its opinion. App. 2 (Guaranty). Paragraph 12 does not clearly shown the parties
intended to disclaim fraud claims or it is ambiguous.
This Honorable Court should have remanded, and Newman so moves the Court.
I. Firstmark did not conclusively prove its right to judgment. The parties’ entire agreement was not attached to the summary judgment motion. Newman’s affidavit specifically states the specific portion of the agreement Firstmark did not attach “radically changed the deal.”
This Court correctly states all the parties’ writings must be considered. The Court then
reviews the Promissory Note, Commercial Loan Agreement, and Assignment of Note.
This Court writes: “In the fall of 2009, Firstmark revised the checklist and began
requiring NCFM to assign to it the borrowers' first lien deeds of trust.” Evidence shows this is
when Firstmark demanded that NCFM sign a new document entitled “Assignment of Liens.”
Newman testified this radically changed the deal.
1 This Court must remand because Firstmark did not include the Assignment of Liens in its
traditional summary judgment proof. This document is essential proof for Firstmark. As this
Court states, all writing must be reviewed to determine the parties’ agreements. This Assignment
of Liens is part of the parties’ agreement. Firstmark cannot conclusively prove all material terms
of the parties’ agreement without it. As discussed below, these form agreements are not totally
one sided. For example, Paragraph 9C of the Guaranty reserved Newman’s claims against
Firstmark where, as alleged here, it did not act “reasonably and in good faith.”
This Court writes other language in the parties agreement allowed Firstmark to act or not
act in specific ways concerning assigning liens, and concludes Newman loses. This reasoning is
too much of a stretch on this record because the Court does not know all terms of the parties’
agreement. This is a traditional summary judgment. Firstmark had the burden to conclusively
prove its right to judgment. It did not. Therefore this Court must remand.
II. This Court errs by affirming summary judgment on a ground not raised below.
This Court affirms on the theory that disclaimer language buried in Paragraph 12 of the
Guaranty negates Newman’s fraud claims. Firstmark did not raise this issue in the trial court.
App. 1; CR 75-87.
Firstmark raised different issues in Paragraphs 13-16 and 20-22 of its first amended
motion for summary judgment. It relied on contractual waivers in Paragraph 9 of the Guaranty
and statute of frauds defense. Tex. Bus. & Rems Code Ann. §26.02(c). These arguments are
very different from the disclaimer theory identified in this Court’s holding.
This is a traditional summary judgment. Firstmark is required to expressly raise all
grounds it is relying upon in its motion. Firstmark did not raise this ground in its motion.
2 Therefore, it cannot prevail on this ground here. This Court should remand Newman’s fraud
counter-claim. Although not expressly mentioned in this Honorable Court’s short opinion,
Newman is assuming the same reasoning might negate his defense of equitable estoppel. If so,
that would be a significant holding and this Honorable Court should at least say that.
III. This Court erred by holding a sentence fragment with disclaimer language conclusively negates all fraud claims or equitable estoppel defenses Newman could assert.
Newman alleged Firstmark misrepresented its experience with warehouse lending, and he
relied on this misrepresentation. This Court holds Newman disclaimed all fraud claims. This
Court writes: “To be enforceable, a contractual disclaimer of reliance must contain language that
is clear and unequivocal.” This Court wrote the following language from the Guaranty bars all
fraud claims by Newman:
[Newman] further represent[s] and warrant[s] that [Newman has] not relied on any representations or omissions from [Firstmark] or any information provided by [Firstmark] respecting the Borrower, the Borrower's financial condition and existing indebtedness, the Borrower's authority to borrow, or the Borrower's use and intended use of all Debt proceeds.
The entire paragraph provides:
12. WARRANTIES AND REPRESENTATIONS. I have the right and authority to enter into this Guaranty. The execution and delivery of this Guaranty will not violate any agreement governing me or to which I am a party. In addition, I represent and warrant that this Guaranty was entered into at the request of the Borrower, and that I am satisfied regarding the Borrowers financial condition and existing indebtedness, authority to borrow and the use and intended use of all Debt proceeds. I further represent and warrant that I have not relied on any representations or omissions from you or any information provided by you respecting the Borrower, the Borrower's financial condition and existing indebtedness, the Borrower's authority to borrow, or the Borrower's use and intended use of all Debt proceeds.
App. 2.
3 This language is in a form agreement provided by Firstmark. Language quoted by the
Court is in the middle of a paragraph in the middle of this form. The operative language relied
upon by this Court is a sentence fragment (“I further represent and warrant that I have not relied
on any representations or omissions from you . . . ”). The rest of the sentence specifies what
information Newman agrees he is not relying upon. All this information concerns the borrower.
The entire sentence concerns Firstmark’s representations respecting one issue: the
Borrower. It can be broken down into three clauses, A, B, and C, as follows:
A. I further represent and warrant that I have not relied on
B. any representations or omissions from you or any information provided by you
C. respecting the Borrower, the Borrower's financial condition and existing indebtedness, the
Borrower's authority to borrow, or the Borrower's use and intended use of all Debt
proceeds.
A reasonable jury could find clause C applies to all three components of B, representations,
omissions, or information.
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ACCEPTED 03-14-00315-CV 6941457 THIRD COURT OF APPEALS AUSTIN, TEXAS 9/15/2015 5:41:02 PM JEFFREY D. KYLE CLERK
CAUSE NO. 03-14-00315-CV
IN THE THIRD COURT OF APPEALS AUSTIN, TEXAS
JADON NEWMAN September 15, 2015 Appellant v.
FIRSTMARK CREDIT UNION Appellee
MOTION FOR REHEARING
Respectfully submitted,
Craig S. Smith SBN 18553570 14493 S.P.I.D., suite A, P.M.B. 240 Corpus Christi, Tx. 78418 361 728 8037 csslawrr@gmail.com
ORAL ARGUMENT REQUESTED TO THE HONORABLE THIRD COURT OF APPEALS:
COMES NOW JADON NEWMAN, respectfully showing the Court as follows:
Newman respectfully disagrees and objects to this Honorable Court’s decision. The
Court erred by finding Firstmark conclusively proved all elements of its claim on the Guarantee.
This Court erred by affirming summary judgment on a theory that was not presented
below. This Court writes disclaimer language buried in a sentence fragment in Paragraph 12 in
this form Guaranty conclusively barred Newman’s fraud claims or his defense of equitable
estoppel. Firstmark did not raise this issue in its motion for summary judgment in the trial court.
App. 1 (Firstmark’s First Amended Motion for Summary Judgment). Paragraphs 13-16 and 20-
22 of its motion stated a very different argument. Furthermore, this Court failed to quote all of
Paragraph 12 in its opinion. App. 2 (Guaranty). Paragraph 12 does not clearly shown the parties
intended to disclaim fraud claims or it is ambiguous.
This Honorable Court should have remanded, and Newman so moves the Court.
I. Firstmark did not conclusively prove its right to judgment. The parties’ entire agreement was not attached to the summary judgment motion. Newman’s affidavit specifically states the specific portion of the agreement Firstmark did not attach “radically changed the deal.”
This Court correctly states all the parties’ writings must be considered. The Court then
reviews the Promissory Note, Commercial Loan Agreement, and Assignment of Note.
This Court writes: “In the fall of 2009, Firstmark revised the checklist and began
requiring NCFM to assign to it the borrowers' first lien deeds of trust.” Evidence shows this is
when Firstmark demanded that NCFM sign a new document entitled “Assignment of Liens.”
Newman testified this radically changed the deal.
1 This Court must remand because Firstmark did not include the Assignment of Liens in its
traditional summary judgment proof. This document is essential proof for Firstmark. As this
Court states, all writing must be reviewed to determine the parties’ agreements. This Assignment
of Liens is part of the parties’ agreement. Firstmark cannot conclusively prove all material terms
of the parties’ agreement without it. As discussed below, these form agreements are not totally
one sided. For example, Paragraph 9C of the Guaranty reserved Newman’s claims against
Firstmark where, as alleged here, it did not act “reasonably and in good faith.”
This Court writes other language in the parties agreement allowed Firstmark to act or not
act in specific ways concerning assigning liens, and concludes Newman loses. This reasoning is
too much of a stretch on this record because the Court does not know all terms of the parties’
agreement. This is a traditional summary judgment. Firstmark had the burden to conclusively
prove its right to judgment. It did not. Therefore this Court must remand.
II. This Court errs by affirming summary judgment on a ground not raised below.
This Court affirms on the theory that disclaimer language buried in Paragraph 12 of the
Guaranty negates Newman’s fraud claims. Firstmark did not raise this issue in the trial court.
App. 1; CR 75-87.
Firstmark raised different issues in Paragraphs 13-16 and 20-22 of its first amended
motion for summary judgment. It relied on contractual waivers in Paragraph 9 of the Guaranty
and statute of frauds defense. Tex. Bus. & Rems Code Ann. §26.02(c). These arguments are
very different from the disclaimer theory identified in this Court’s holding.
This is a traditional summary judgment. Firstmark is required to expressly raise all
grounds it is relying upon in its motion. Firstmark did not raise this ground in its motion.
2 Therefore, it cannot prevail on this ground here. This Court should remand Newman’s fraud
counter-claim. Although not expressly mentioned in this Honorable Court’s short opinion,
Newman is assuming the same reasoning might negate his defense of equitable estoppel. If so,
that would be a significant holding and this Honorable Court should at least say that.
III. This Court erred by holding a sentence fragment with disclaimer language conclusively negates all fraud claims or equitable estoppel defenses Newman could assert.
Newman alleged Firstmark misrepresented its experience with warehouse lending, and he
relied on this misrepresentation. This Court holds Newman disclaimed all fraud claims. This
Court writes: “To be enforceable, a contractual disclaimer of reliance must contain language that
is clear and unequivocal.” This Court wrote the following language from the Guaranty bars all
fraud claims by Newman:
[Newman] further represent[s] and warrant[s] that [Newman has] not relied on any representations or omissions from [Firstmark] or any information provided by [Firstmark] respecting the Borrower, the Borrower's financial condition and existing indebtedness, the Borrower's authority to borrow, or the Borrower's use and intended use of all Debt proceeds.
The entire paragraph provides:
12. WARRANTIES AND REPRESENTATIONS. I have the right and authority to enter into this Guaranty. The execution and delivery of this Guaranty will not violate any agreement governing me or to which I am a party. In addition, I represent and warrant that this Guaranty was entered into at the request of the Borrower, and that I am satisfied regarding the Borrowers financial condition and existing indebtedness, authority to borrow and the use and intended use of all Debt proceeds. I further represent and warrant that I have not relied on any representations or omissions from you or any information provided by you respecting the Borrower, the Borrower's financial condition and existing indebtedness, the Borrower's authority to borrow, or the Borrower's use and intended use of all Debt proceeds.
App. 2.
3 This language is in a form agreement provided by Firstmark. Language quoted by the
Court is in the middle of a paragraph in the middle of this form. The operative language relied
upon by this Court is a sentence fragment (“I further represent and warrant that I have not relied
on any representations or omissions from you . . . ”). The rest of the sentence specifies what
information Newman agrees he is not relying upon. All this information concerns the borrower.
The entire sentence concerns Firstmark’s representations respecting one issue: the
Borrower. It can be broken down into three clauses, A, B, and C, as follows:
A. I further represent and warrant that I have not relied on
B. any representations or omissions from you or any information provided by you
C. respecting the Borrower, the Borrower's financial condition and existing indebtedness, the
Borrower's authority to borrow, or the Borrower's use and intended use of all Debt
proceeds.
A reasonable jury could find clause C applies to all three components of B, representations,
omissions, or information. At most the parties agreed Newman has not relied upon specified
representations, omissions, or information respecting the borrower. It says nothing about
whether Newman relied on intentional misrepresentations concerning Firstmark’s experience as a
warehouse lender. This interpretation is greatly strengthened by the fact that this paragraph
concerns the Borrower, who is mentioned seven times. A reasonable jury could accept this
meaning. Therefore Newman is entitled to a jury trial because summary judgment evidence
shows the misrepresentations of which he complains concern Firstmark’s experience as a
warehouse lender, not the Borrower.
A reasonable jury could also decide if the parties really intended to bar Newman’s fraud
claim or his equitable estoppel defense they would have used language clearly and
4 unambiguously saying just that. Such language would logically appear with all the other waivers
in Paragraph 9 of the Guaranty entitled “WAIVER AND CONSENT.” A review of Paragraph 9
shows the opposite. Subsection C of Paragraph 9 provides:
C. Waiver of Claims. I waive all claims for loss or damage caused by your acts of omissions where you acted reasonably and in good faith.
This language reserved Newman’s claims for fraud because fraud is an intentional or
reckless claim for loss or damage. This specific language controls, not the ambiguous boilerplate
quoted by this Court. At the very least this language is ambiguous. Therefore, this Court must
remand.
This Court’s short opinion does great damage to the jurisprudence of this State. Before
this decision, our Courts focused on the truth about what happened before and after documents
were signed. If a party deceived to induce someone to sign a piece of paper, the agreement
would be vitiated. Italian Cowboy Partners Ltd. v. Prudential Insurance, 341 S.W.3d 323 (Tex.
2011). This advanced the truth-seeking function of our court system, protected reasonable
expectations, deterred overly sharp dealings, and most importantly, ensured the efficient
allocation of economic resources. According to this Court, once Newman signed this piece of
paper he had no rights and the truth didn’t matter. This holding conflicts with Texas law and
must be reconsidered this Fall.
This case is important, and this Court should order oral argument.
PRAYER
Newman moves the Court to reconsider its opinion and judgment. This Court should
remand this case for trial on all issues or other issues as the court specifies.
5 Respectfully submitted,
/s/ Craig S. Smith Craig S. Smith SBN 18553570 14493 S.P.I.D., suite A, P.M.B. 240 Corpus Christi, Tx. 78418 361 728 8037 csslawrr@gmail.com
CERTIFICATE OF SERVICE AND COMPLIANCE
I certify that on September 15, 2015, I served a copy of Appellant's Motion for Rehearing upon Firstmark’s Counsel by email. I also certify the number of relevant words is 1467, according to my computer.
/s/ Craig S. Smith Craig S. Smith
6 Filed 13 October24 P2:22 Amalia Rodriguez-Mendoza District Clerk Travis District D-1-GN-13-000808
CAUSE NO. D-1-GN-13-000808
FIRSTMARK CREDIT UNION, § IN THE DISTRICT COURT OF Plaintiff, § § v. § TRAVIS COUNTY, TEXAS § JADON F. NEWMAN, § Defendant. § 353RD JUDICIAL DISTRICT
PLAINTIFF'S FIRST AMENDED MOTION FOR SUMMARY JUDGMENT
TO THE HONORABLE JUDGE OF THIS COURT:
Firstmark Credit Union ("Plaintiff') files this First Amended Motion for Summary
Judgment in accordance with the provisions of Rule 166a of the Texas Rules of Civil Procedure,
seeking full and final judgment in favor of Plaintiff on Plaintiffs entire cause of action against
Defendant Jadon F. Newman ("Defendant"). In supp01t of this motion, Plaintiff would
respectfully show the Court as follows:
OVERVIEW
1. Plaintiff has sued Defendant under his guaranty agreement to recover over $3.3
million owed to Plaintiff by NCFM, LLC, a bankrupt entity controlled by Defendant at the time
of the loan. Plaintiff has provided summary judgment evidence sufficient to establish its
entitlement to recover the money owed as a matter of law.
2. Defendant, in a desperate attempt to postpone or avoid liability, has raised a
multitude of groundless defenses and counterclaims, most based upon alleged (and disputed) oral
agreements and representations, some unaccompanied by any factual allegations at all. The loan
documents at issue contain disclaimers of oral agreements, which comply with §26.02, TEX.
Bus. & COM. CODE; claims and defenses based on oral agreements and representations are
75 therefore barred. In addition, Defendant waived many defenses and claims under his guaranty.
Fmthermore, the anti-deficiency statute is inapplicable to Defendant, his claims based upon fraud
and negligent misrepresentation are barred by limitations, and he is not entitled to declaratory
relief or to an accounting for the reasons stated below. Therefore all of Defendant's claims and
defenses are barred as a matter of law.
PLAINTIFF IS ENTITLED TO JUDGMENT ON ALL OF ITS CLAIMS
3. Plaintiff is entitled to judgment as a matter of law in that there is no genuine issue
as to any material fact necessary to establish the liability of Defendant for Plaintiff's claims
against him as follows:
(a) the amount due under a Promissory Note dated September 9, 2008 in the original
principal amount of FIVE MILLION AND 00/100 DOLLARS ($5,000,000.00) ("Note"),
guaranteed by Defendant under his Guaranty Agreement dated September 9, 2008 ("Guaranty").
(b) reasonable and necessary attorneys' fees and expenses;
(c) prejudgment and post-judgment interest at the rate of 18% per annum until paid;
and
(d) costs of Court.
PLAINTIFF IS ALSO ENTITLED TO JUDGMENT ON ALL COUNTERCLAIMS
4. Defendant has filed groundless counterclaims for fraudulent inducement, fraud,
negligent misrepresentation and declaratory judgment alleging release. All of these claims are
barred as a matter of law by the Texas Statute of Frauds, §26.02, TEX. Bus. & COM. CODE,
because Defendant executed a Disclaimer of Oral Agreements. In addition, all of the relevant
loan documents contain disclaimers of oral agreements. Furthermore, Defendant waived claims
under his Guaranty, the anti-deficiency statute is inapplicable to Defendant, his claims based
2 76 upon fraud and negligent misrepresentation are barred by limitations, and he is not entitled to
declaratory relief or to an accounting for the reasons stated below.
THE SUMMARY JUDGMENT EVIDENCE SUPPORTS PLAINTIFF'S CLAIMS
5. In support of this motion, Plaintiff relies upon the pleadings on file in this case
and the summary judgment evidence, including the attached Amended Affidavit of Gregg
Thorne ("Thorne Affidavit") and its attached and incorporated exhibits, the attached Affidavit of
Sylvia Miller and its attached and incorporated exhibit ("Miller Affidavit"), the attached
Affidavit of Timothy N. Tuggey (the "Tuggey Affidavit"), and the attached and incorporated
Affidavit of Lessie G. Fitzpatrick ("Fitzpatrick Affidavit"), all of which are incorporated herein
by reference and which show that there is no genuine issue as to any material fact necessary to
establish Defendant's liability for the amounts owed to Plaintiff under the Note and Guaranty.
6. The attached and incorporated exhibits are as follows:
Exhibit 1: Promissory Note signed by Defendant Jadon F. Newman on behalf of NCFM, LLC to Firstmark Credit Union dated September 9, 2008 in the original principal amount of $5,000,000.00
Exhibit 2: Guaranty dated September 9, 2008 by Defendant Jadon F. Newman personally of all indebtedness ofNCFM, LLC to Firstmark Credit Union
Exhibit 3: Firstmark Credit Union Detail of Expenditures for Noble Capital Property
Exhibit 4: Borrower Statement of Account
Exhibit 5: Commercial Loan Agreement signed by Defendant Jadon F. Newman on behalf of NCFM, LLC and Firstmark Credit Union dated September 9, 2008 regarding the promissory note attached as Exhibit 1
Exhibit 6: Assignment of Note dated September 9, 2008 signed by Defendant Jadon F. Newman on behalf ofNCFM, LLC securing the promissory note attached as Exhibit 1
Exhibit 7: Disclaimer of Oral Agreements executed by NCFM, LLC as Borrower, Defendant Jadon F. Newman as Guarantor and Firstmark Credit Union as Lender regarding the
3 77 loan dated September 9, 2008 in the amount of $5,000,000.00 evidenced by the promissory note attached as Exhibit 1
Exhibit 8: Rule 11 Agreement signed by counsel for Plaintiff and Defendant
7. As evidenced by the Thorne Affidavit and its attached and incorporated exhibits,
the Defendant has defaulted on his obligations to pay the indebtedness owing under the Note and
Guaranty.
8. As evidenced by the Thorne Affidavit and its attached and incorporated exhibits,
Plaintiff is the owner and holder of the Note.
9. As evidenced by the Thorne Affidavit and the Miller Affidavit and their exhibits,
after all lawful payments, credits and offsets have been allowed, Defendant Jadon F. Newman is
indebted to Plaintiff under his Guaranty of the Note as of May 1, 2013, in the principal amount
of $748,964.55, together with accrued interest in the amount of $2,013,797.86, late fees in the
amount of $100,932.60, attorneys' fees and expenses in the amount of $477,608.42, appraisal
fees in the amount of $14,300.00, accounting fees in the amount of $24,307.00, and a fee paid to
the Chapter 11 Trustee of NCFM, LLC for bankruptcy administration in the amount of
$9,867.77, for a total of $3,389,778.20.
10. As evidenced by the Thorne Affidavit, Plaintiff was required to retain the
undersigned attorneys because of Defendant's default and because Defendant has failed and
refused to pay the amounts owed.
11. Plaintiff is entitled to judgment against Defendant as a matter of law for its
reasonable attorneys' fees and expenses under the terms of the Note, Guaranty, and Sections
38.001 et seq., Texas Civil Practice & Remedies Code, and there is no genuine issue of material
fact as to Plaintiffs entitlement to such fees and expenses or as to the amount thereof, as
4 78 evidenced by the Tuggey Affidavit. As evidenced by the Tuggey Affidavit, THIRTY-FIVE
THOUSAND AND N0/100 DOLLARS ($35,000.00) would be a reasonable fee in the State of
Texas to be granted in this case for attorneys' fees and expenses, including post-judgment
collection, if summary judgment is granted, no motion for reconsideration or for a new trial is
filed and no appeal is taken from the judgment. If a motion for reconsideration or for a new trial
is filed, a reasonable fee for the legal services required would be TWO THOUSAND AND
N0/100 DOLLARS ($2,000.00). If an appeal is made to the Texas Court of Appeals, a
reasonable fee for legal services required in responding to that appeal would be FORTY
THOUSAND AND N0/100 DOLLARS ($40,000.00). If a petition for review is made to the
Texas Supreme Court, a reasonable fee for legal services required would be THIRTY
THOUSAND AND N0/100 DOLLARS ($30,000.00). If a petition for review is granted by the
Texas Supreme Court, a reasonable fee for the legal services required would be THIRTY
THOUSAND AND N0/100 DOLLARS ($30,000.00).
12. As evidenced by the Thorne Affidavit and Exhibit 1, Plaintiff is entitled to interest
on all amounts owed at the rate of 18 per cent per annum.
DEFENDANT HAS PLED NOVALID DEFENSES TO PLAINTIFF'S CLAIMS
The defenses are barred by the Statute of Frauds
13. Defendant has alleged in Defendant Jadon F. Newman's First Amended Answer
and Counterclaim (the "Amended Answer"), without any valid basis in law or in fact, that
Plaintiffs claims "are barred by the affirmative defenses of waiver and release, modification of
obligation, payment, equitable estoppel, quasi-estoppel, failure of consideration, fraud, failure to
mitigate, discharge, accord and satisfaction, impairment of subrogation, impairment of collateral,
and voidable contract." Every one of these defenses relies upon varying the terms of the loan
5 79 documents at issue in this case, which Defendant is precluded from doing under the Texas
Statute of Frauds, §26.02, TEX. Bus. & COM. CODE.
14. Exhibit 7 (the Disclaimer of Oral Agreements signed by Defendant both
individually and as manager of the borrower, NCFM, LLC) states that it is incorporated into all
of the loan documents and that "the entire agreement made between the Parties is contained
within the executed documents ... and ... no agreements or promises exist between the Parties that
are not reflected in the language of the various documents executed in conjunction with this
transaction." The Disclaimer also says in bold type outlined by a box:
THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND, TO THE EXTENT PERMITTED BY LAW, 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.
15. The Texas Statute of Frauds, §26.02, TEX. Bus. & COM. CODE, provides that with
respect to a loan in excess of $50,000, such as the one at issue in this case, "the rights and
obligations of the parties ... shall be determined solely from the written loan agreement, and any
prior oral agreements between the parties are superseded by and merged into the loan
agreement." §26.02(c). Furthermore, the statute provides that a loan agreement involving over
$50,000 "may not be varied by any oral agreements or discussions that occur before or
contemporaneously with the execution of the agreement." The statute requires that loan
agreements provide notice of the statutory provisions in language identical to that used in the
Disclaimer and that such language be boldface, capitalized, underlined or otherwise made
conspicuous, as was true in this case. §26.02(e). The language required by §26.02(e) also
appears conspicuously in the Note (Exhibit 1) and the Guaranty (Exhibit 2).
6 80 16. Plaintiff complied fully with §26.02, TEX. Bus. & COM. CODE, and therefore
Defendant's defenses are barred by it.
The loan agreement was not altered or modified by Plaintiff
17. Defendant complains about alleged changes in the underlying loan terms, but he
cannot show that the loan agreement or terms were modified in any respect. All of the
requirements imposed by Firstmark of which he complains were consistent with the terms of the
loan documents. Defendant complains that NCFM was required to assign deed of trust liens to
Plaintiff, but that was entirely consistent with the loan documents and with assigning the notes
that were secured by those liens.
18. The Assignment of Note (Exhibit 6) contemplates that the collateral includes "all
obligations that supp01t the payment or disposition of the" notes and "any rights or claims arising
from the" notes, and the liens are inseparable from the notes that they secure. The assignment of
a note also transfers a deed of trust lien securing the note. Moore v. Raymond, 15 Tex. 554, 556
(Tex. 1855); De Bruh! v. Maas, 54 Tex. 464, 470 (Tex. 1881). "[U]nder Texas law, the ability to
foreclose on a deed of trust is transferred when the note is transferred .... " Bittinger v. Wells
Fargo Bank NA, 744 F.Supp.2d 619, 625 (S.D. Tex. 2010). "The assignment of a debt ordinarily
carries with it all liens and every remedy or security that is incidental to the subject matter of the
assignment and that could have been used, or made available, by the assignor as a means of
indemnity or payment .... " J WD., Inc. v. Fed. Ins. Co., 806 S.W.2d 327, 329 (Tex. App.--Austin
1991, no pet.) [internal citations omitted]. "The mortgage of the property is an incident of the
debt; and as long as the debt exists, the security will follow the debt." Lawson v. Gibbs, 591
S.W.2d 292, 294 (Tex. Civ. App.-Houston [14th] 1979) [internal citations omitted] (in the
context of a collaterally transfeITed note).
7 81 19. Defendant quotes selectively from Exhibit A to the Commercial Loan Agreement
(the checklist of items required for a draw request) and fails to mention that it included
assignments of lien on existing notes receivable, so this requirement could hardly have been a
surprise. Exhibit A to Exhibit 5. In addition, there is nothing in Exhibit A or in the Commercial
Loan Agreement that suggests that NCFM, LLC would not be required to provide additional
documentation. On the contrary, the Commercial Loan Agreement signed by Defendant on
behalf of NCFM, LLC provides that NCFM, LLC will sign, deliver and file any additional
documents that Firstmark considers necessary to perfect, continue, and preserve NCFM, LLC's
obligations and to confirm Firstmark's lien status. Exhibit 5, Section 14. Assignments of lien
clearly fall into this category.
20. In essence, Defendant is complaining that Firstmark began enforcing some terms
of the loan documents that it did not initially enforce, and the loan documents make clear that
even if this were true, this would not have been a waiver of Firstmark's rights to enforce those
terms later. See, for example, Exhibit 2, sections 9.B and 10.G and Exhibit 5, Section 8.G.
Defendant waived defenses in his Guaranty
21. The Guaranty is absolute and unconditional (Exhibit 2, section 2). It contains
both broad and specific waivers of virtually every defense that might otherwise be available to a
guarantor (Exhibit 2, sections 2, 3, 4, 5, 7, 9.A, 9.C), as well as a provision that Firstmark does
not waive any of its rights, remedies, privileges or rights to insist upon strict performance of the
loan documents unless the waiver is in writing and signed by Firstmark (Exhibit 2, section 9.B;
see also section 10.G). The defense of waiver is therefore expressly barred by the Guaranty.
22. The Guaranty provides that Defendant's obligation to pay "shall not be affected
by the illegality, invalidity or unenforceability of any ... circumstances which make the
8 82 indebtedness unenforceable against the Borrower" (Exhibit 2, section 4). It also provides that any
collateral securing the debt may be "assigned, exchanged, released ... or substituted ... without
defeating, discharging or diminishing [Defendant's] liability" and that "any act or omission by
[Firstmark] which impairs the [collateral] will not relieve" Defendant of his liability (Exhibit 2,
section 7). It also states that Firstmark may "release, substitute or impair any" collateral (Exhibit
2_, section 9.A(3)). Under the Guaranty, Defendant waived "any right of subrogation." (Exhibit 2,
section 9.A(9). He also waived "all claims for loss or damage caused by your acts or omissions
where you acted reasonably and in good faith." (Exhibit 2, section 9.B).
23. For all of the foregoing reasons, the defenses raised by Defendant are barred as a
matter of law.
TEX. PROP. CODE §51.003 does not apply to this case and has been waived
24. Defendant has alleged that Firstmark did not foreclose on the notes securing the
indebtedness at issue (the "Collateral Notes") or the real properties securing the Collateral Notes
for fair market value and requests a determination of fair market value, citing Texas' anti-
deficiency statute, TEX. PROP. CODE §51.003, although Defendant requests no relief related to
this determination. In any event, §51.003 does not apply to this case. As acknowledged in
Defendant's Amended Answer in paragraph 5, and as shown in the loan documents, pmticularly
the Note (Exhibit 1, paragraph 10) and the Assignment of Note (Exhibit 6), the collateral for the
loan at issue was promissory notes, not real estate.
25. By its terms, §51.003 expressly applies only to "indebtedness secured by ... real
property" and to deficiencies sought after foreclosure on the real property. §51.003(a). The right
to request a determination of fair market value is only made available to persons against whom
"such a recovery" (i.e., a post-real estate foreclosure deficiency) is sought. §51.003(b).
9 83 Defendant has cited no authority, and Plaintiff knows of none, authorizing a party sued for a
deficiency following foreclosure of promissory notes to challenge whether they were foreclosed
for fair market value or to seek a determination of their value under §51.003.
26. In addition, Defendant specifically waived reliance on any anti-deficiency statutes
under his Guaranty, Exhibit 2, section 9.A(9). Therefore, Defendant is not entitled to relief under
§51.003.
DEFENDANT'S COUNTERCLAIMS ARE BARRED AS A MATTER OF LAW
The counterclaims are barred by the Statute of Frauds and Guaranty waivers
27. Defendant has alleged counterclaims for fraudulent inducement, fraud by
nondisclosure and negligent misrepresentation and for a declaration under the Declaratory
Judgments Act, Chapter 37, TEX. Crv. PRAC. & REM. CODE ("Act") based upon the alleged
release of his Guaranty and for attorneys' fees under the Act. All of these claims are barred by
the Statute of Frauds for the same reasons stated in paragraphs 13, 14 and 15 above, and by the
waivers contained in the Guaranty for the same reasons stated in paragraphs 20, 21 and 22 above,
all of which are incorporated by reference herein. Because Plaintiff has complied fully with the
Statute of Frauds and because of the waivers in the Guaranty, all of Defendant's counterclaims
are barred as a matter of law.
Defendant has no right to relief under the Declaratory Judgments Act
28. Defendant counterclaims under the Act are inappropriate because the release
claim is merely a restatement of Defendant's affirmative defense of release. See Staff Indus.,
Inc. v. Hallmark Contracting, Inc., 846 S.W.2d 542, 547-48 (Tex. App.-Corpus Christi 1993,
no writ). The Act is "not available to settle disputes already pending before a court." BHP
Petroleum Co. Inc. v. Millard, 800 S.W.2d 838, 841 (Tex. 1990). A "declaration of non-
10 84 liability .. .is not normally a function of the declaratory judgment statute .... " Id. Because
Defendant's declaratory claim adds nothing to the disputes already pending and seeks a
declaration of non-liability for Plaintiffs claims, it is improper and barred as a matter of law.
The counterclaims are barred by limitations
29. Defendant complains of alleged conduct by Plaintiff that occurred prior to and
between September 2008 and September 2009. Amended Answer,~~ 2, 4, 5, 6 and 8. Plaintiff
requests that the Court take judicial notice that the Amended Answer containing the
counterclaims was filed on October 18, 2103. The statute of limitations applicable to fraud is 4
years. §16.004(a)(4), TEX. Crv. PRAC. & REM. CODE. The statute of limitations applicable to
negligent misrepresentation is 2 years. HECI Exploration Co. v. Neel, 982 S.W.2d 881, 885
(Tex. 1998). §16.003, TEX. Crv. PRAC. & REM. CODE. Defendant's counterclaims for fraudulent
inducement, fraud by nondisclosure and negligent misrepresentation are therefore barred by
limitations.
Defendant has no right to an accounting
30. While Defendant claims entitlement to an Accounting, the basis for this claim is
that he alleges that the "exact nature and extent of what was sold, for how much it sold, and how
the proceeds were applied is unknown to Newman and cannot be determined without an
accounting of the transactions" and that there is no adequate remedy at law for him to determine
the actual amount owing. In reality, this information is available through discovery and in fact,
has already been provided to Defendant voluntarily and in great detail by Plaintiff pursuant to a
Rule 11 Agreement. Fitzpatrick Affidavit; Exhibit 8. When a party can obtain adequate relief at
law through the use of standard discovery procedures, an accounting is not required. T F. W.
Mgmt., Inc. v. Westwood Shores Prop. Owners Ass'n, 79 S.W.3d 712, 717-18 (Tex. App.-
85 Houston [14 1h Dist.] 2002, pet. den.). There is no need for an accounting and Defendant cannot
establish his entitlement to one.
RELIEF REQUESTED
31. Pursuant to Rule 166a(e), Texas Rules of Civil Procedure, Plaintiff requests that if
the Court does not fully adjudicate this case on Plaintiff's First Amended Motion for Summary
Judgment, and a trial or further hearing is necessary, that the Court at the hearing on the Motion
ascertain what material facts are actually and in good faith controverted, grant a partial summary
judgment as to the facts that appear to be without substantial controversy, and direct that a
hearing on any controverted matters be set following the hearing on Plaintiff's First Amended
Motion for Summary Judgment. Alternatively, Plaintiff requests that any controverted issues be
severed and that a final judgment be entered immediately as to matters that are held to be
established as a matter of law.
WHEREFORE, PREMISES CONSIDERED, Plaintiff respectfully requests that this
matter be set for hearing according to the provisions of Rule 166a of the Texas Rules of Civil
Procedure, and that this Court grant summary judgment against Defendant as follows, reserving
Plaintiff's rights to seek other relief for Defendant's fraud:
(1) for the total amount owing under the Note as of May 1, 2013 in the amount of
$3,389,778.20;
(2) for reasonable and necessary attorneys' fees and expenses in the amount of
THIRTY-FIVE THOUSAND AND N0/100 DOLLARS ($35,000.00), additional attorneys' fees
in the event of a motion for reconsideration or for a new trial in the amount of TWO
THOUSAND AND N0/100 DOLLARS ($2,000.00), additional attorneys' fees in the event of an
appeal to the Court of Appeals in the amount of FORTY THOUSAND AND N0/100
12 86 DOLLARS ($40,000.00), additional attorneys' fees in the event a petition for review is made to
the Texas Supreme Court in the amount of THIRTY THOUSAND AND N0/100 DOLLARS
($30,000.00), additional attorneys' in the event the petition for review is granted by the Texas
Supreme Court in the amount of THIRTY THOUSAND AND N0/100 DOLLARS
($30,000.00);
(3) for prejudgment interest on the principal amount at the rate of 18% per annum
from May 1, 2013 until date of judgment;
(4) for post-judgment interest on all of the foregoing amounts at the rate of 18% per
annum until paid;
(5) for costs of Court;
(6) that Defendant take nothing on his counterclaims;
(7) in the alternative, for a partial summary judgment; and
(8) for such other relief to which Plaintiff may be justly entitled.
Respectfully submitted,
FRITZ, BYRNE, HEAD & HARRISON, PLLC 98 San Jacinto Boulevard, Suite 2000 Austin, Texas 78701-4288 Telephone: (512) 476-2020 Telecopier: (512) 477-5267
By: ls/Lessie G. Fitzpatrick Lessie G. Fitzpatrick State Bar No. 24012630 Lisa C. Fancher State Bar No. 06800275
ATTORNEYS FOR PLAINTIFF
13 87 CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of Plaintiff's First Amended Motion for Summary Judgment is being served by hand delivery upon:
Stephen W. Lemmon Ms. Rhonda Mates Brown McCarroll, L.L.P. 111 Congress Avenue, Suite 1400 Austin, Texas 78701 Attorneys for Defendant
on this 24th day of October, 2013.
Isl Lisa C. Fancher Lisa C. Fancher
14 88 GUARANTY 1Con11nulno Debi· Unllmilodl
DATE AND PARTIES, Tho do1o of !his Guoronty Is Soptambor 9, 2000, Tho por1ios ond lholr oddrosso& 010:
LENDEll: FlRSTM/\Rlt CREDIT UNION 2023 Gold Canyon Sen Antonio, TX 78232
IJDHROWER: NCFM, LLC P Toxos Llmilod Lloblllty Cornpony 9414 Anderson Miii Rood, Suite 100 Austin, TX 70729
GUARANTOR: JADOl\l f, NEWMAN 17727 Rued Pork flood Jonestown, TX 76646
1. DEFINITIONS, As usod In this Guaranty, !ho torms hove tho lollowlno moonlngs: A. Pronouns. Tho pronouns •1·•, "mo" Pnd "my" refer to ell persons or entitles signing this Guorenly, lndlvlduolly and togethor, "You" end "your" roh11 to the Londor. 8, No10. "Noto" rotors 10 tho documonl thol ovldoncos 1he Dorrowor's lndobtodness, end any nxlonslon~. ronuwels, modllloetlons and substllllllons of tho Nole, C, Proporly, "Proporly" moons nny property, real, personal or lnlonalblo, that securos performonce ol lho obllgotlons ot tho Note, Dobl, or this Gueronly, 2, SPECIFIC AND FUTURE DEBT GUARANTY. for good ond valueblo consldorollon, tho rocoipl 11nd sulllchmcy ol wfllch Is horeby ucknowlodgod, end to Induce you, ot your opllon, to rnoko loons or ongogu In any other tronsocllons with the !lorrowor from time to time, I absolutely and uncondlllonelly ogroo to ell !arms ol ond guorontV lo you lhe poymonl ond perlo1rnunco of oooh ond evory Debi, of evory type, purposa and duscrlpllon !hat !ho Borrower ollh111 lndlvlduolly, among oil or o por11on of 1hemselvos, or wl1h others, moy now or at any time in tho futuro owo you, locludlng, but not llmiled to lhe followlno doscribod Dobt(iil"lholiidlno wllhout llmltnllon, oil prlnclpol, uccruedirrtBrtmtlll1torneysLIB1ls-omh;olleo1ion costs, when allowod·by:low; thot moy booomo duo from Iha Bonower to you In colleullng end onforclno tho Debt nnd oil other ogreemenls with rospocl to tho Borrower, A promissory note or olhor ogroomont, dolad Soplombor 9, 2000, from NCFM, LLC !Borrower) to you, In tho omounl o1 $6,000,000,00, In addition, Dobl rolcra lo dobls, llobllltlas, and obllgollons of tho Borrowor llncludlng, but nol llmlled to, amounts ogrood 10 be pold under the lorms ol any notos or ogreoments soourlng the peymonl of ony dob1, loon, llebllhy or obligation, overdrofts, lelters o1 crodll, guarenllos, odvonc11s lor loxes, lnsuronoo, repairs oncJ storaoa, und oil oxtonslons, ronewels, rallnonclngs ond modllloetlons of those doblu) whether now oxlstlno or created or incurred In Iha luturo, duo or 10 become due, or obs~lu1e or contingent, Including obllgotlons ond duties orlslng from !ho tarms of oil documonls propared or submllled for tho tranaocllon such os oppllo11llons, socurlly ngroomonls, diso(osuros, end the Noto. You may, without nolloo, apply this Guorunty to ~uch Debi of Iha Borrower us you moy sulect from time lo time, 3, EXTENSIONS, I consent lo oll IQnewals, uxtanslons, modillcullons ond suhs1l1u1lons of the Dobl which mey be mode by you upon such terms end condlllons es you may soo flt from time to limo wllhout further nolice lo mo and without llmilollon us to the numbor of renewals, oxtonslons, rnodl11cellons or subSlllutlon~. 4. UNCONDITIONAL LIABILITY, I 11m uncondltlonolly liable under this Guoronly, rooardloss ol whelher or not you pursuo any ol your romodlos agolnsl the Bo)rowcr, agelnst ony other mukor, surely, ouurontor or ondorsor ol the Debt or ogalnsl any Property, You moy sua me alone, or onyono else who Is obllaotod on !his Guoronly, or 11ny number ol us 11.>golher, 10 colloc1 the Debi, My lloblllly Is not condllloned on 1ho signing ol 1hls Guaron:~ by ony othor per:;on and 1urther Is not subjoct lo ony condition not exprossly sol forth In. this Gueronty or ony lnstrumont oxucutod In oonnectlon wllh tho Dub!, My obllgullon to poy eooordlng 10 tho terms of !his Guuronty shall not be offectod by Iha illeoollly, lnvolldlly or unontorr.aabllily of ony notes or ogreomonls 11vldonclng the Debt, Iha vlolallon ol onY appllcoblo usury lows, lorgery, or any o1her clrcumsloncas which make 1ho lndubtodnoss unenforoeablo ogolnst tho Dorrowor. I wlll remain obllgolod 10 pay on !his Guuronly ovon II ony olhor person Jodon f, Nowmon
100 who Is obllgolod lo pay lhe Debi, lncludina 1ho Borrower, hes such oblignllon dische1oad In bonkrup1cy, foruclosure, 01 01he1wlse dlsohurgud by law, Ii, BANKRUPTCY, II e benkrupluy pellllon should 01 any limo be•flled by or ugolns11he Borrower, Iha mo1Urlly ol lhe Dob1, so for os my llebi111y Is concerned, sholl ho aocalora1ed end the Debi shall bu lmmediotoly payable by mo. I ocknowledgQ and eareo 1hot this Guo1onw, and •he Debt saourad heroby, will romeln In lull lorco and al1ect 01 ell times, notwiths1endlng any ectlon 01 underlaklngs by, or oaalnst, you or eaolnsl any Properly, In connoctlon with ony obllgellon In nny proceodlng In lhe Unlled Stales Bankruptcy Courls. Such action or underiaklng Includes, wl1hoU1 llmllotlon, veluo1lon ol Proporty, election of remedlas or lmposlllon of secured or unsecured clolm 11101Us upon claims by you, pursuont 10 the United Stotos llonkruptoy Coda, es emended, In tho ovom thel any poymenl of principal or lnteres1 recelvod and paid by any 01hor guarantor, borrowar, surety, endorsor or oo·mokor Is deemad, by 11nol order of o oourt of compe1en1 Jurisdiction, to hove boon e voldoblo profurenco under tho bonkruplcy or Insolvency Jews of lhe Unltod Slotes or o1herwlse, lhun my obligation wlll romoln ae 11n obligation to you und will nol be consldorod es having been extlnQulshud, · 6, REVOCATION, I ouroe that this Is on obsolute ond uncondl11onal Guoronty. I ogroo tho1 this Gueren1y will rornnln blndlna on mo, who1hur or not there ero any Dobis ou1s1endlng, until you hove ac1Uelly recelvod wrl11en no)loe of my revocation 01 will Ien riollce ol my lleo1Jn1rtmr01T1J1otencu;'-Notlmr-of-rovo~tlon~H1otleo-a1-my..d1U1th-o1...JncompntD1100-WJll..».o.t..o.tlJl.Q.UUY obllaotlons undur this Guoranw wllh respucl to ony Dobis Incurred by or !or which you hevu mode o commitment to Borrower beloro you oc1Uully receive such no1loe, end ell renewals, ex1enslons, rellnonclngs, and modllloolions of suoh Debts. I oureu lhol 11 nny other person slonlno 1hls Guaranty provides P no11ce of revocation lo you, I will still ho obllga1od under 1hl& Guaronly until I provld11 such o notice of ravooo11on lo.you, If any o1hor person slonlno this Guaranty die~ or Is declored Incompetent, such foci will nol elleot my oblloatlons untler this Guoron1y, 7, PROPERTY, I agree thol any Properly may bo esslgnod, oxchonged, roleasud In whola or In pmt or subs111uted wllhout notice 10 mo and wlthoul deleatlno, dlscho111lng or diminishing my lloblllly. My obli1101lon Is absolute end your Jolluro 10 porfool ony socurl1y ln1oroel or any oct or omission by you which Impairs 1ho Properly will not roliovu mo or my Jieblllly undor lhls Gueronty. You ore under no duty 10 proserve or protoct ony Properly until you era In actual or cons1rucllvo possosslon. For purposes of this poregraph, you will only bu In "ectual" possosslon when you hove physical, lmmodlale ond exclusive control qvor 1ho Property and have occupied such control Jn wrlllng. Furthor, you will only bu doomed to be In "cons1ructlva" pussosslon when you hove both lh11 poWHJ nnd lntenl lo oirnrols11 oontrol ovor 1l1u Proporty, 8, DEFAULT, I will be In dafuull If ony of tho followlnp ooour: /\, Paymonu. I foll lo make o pqymonl In full when duo, n. lnsolvoncy or Bonkruptoy, Tho dooth, dlssolu1lon or lnsolvenoy of, appolnlmenl of a rooclvor by or on beholl of, oppllcollon uf any dob1or relief low, tho esslonmonl lot 1he bonoflt ol orodl1ors by or on bohalt of, tho volunlury or lnvoluntmy lormlnotlon of o>els1once by, or tho oommonoemont of ony procoodlng under any proson1 or lu1Uro lodorol or sleto lnsolvanoy, bankruptcy, reorgonlzn11on, oornposltlon or doblor rellel law by or ogolnst ma, Borrower, or any co-signor, ondorsar, surow or guornntor of 1hls Guaranty or any Debt, C, Doolh 01 lnoompe1oncy, I die or em doclorod looelly lncompotont. D. Fellure to Porform. I loll to porlorm ony aondlllon or 10 keep eny promlso or oovonon1 of this Guiironty. E, 01hor Pooumonts. A d11foult ooaurs undor tho terms of eny other doournont rolotlng lo iha Dob1. f, Othor Agraemonts, I am In delnull on any olhor debl or egreement I have wllh you, G. Mlsreprosentotlon, I mPk11 uny verbal or wrl11cn stotemont or provldo ony llnenclal Information 1ho1 Is untrue, lnPccUlllle, or concools o motorlel toc1 e11ho time It Is mode or provldod, H. Judamonl, I foll to so1lsfy or uppoal ony judgmont oguinst mo. I, Forfeiture, The Property Is used In u manner or lor o purpose tho1 threotons oonllsoollon by a legol authority. J. Name Chango, I change my nome or ossumo on oddl1lonel name wllhoul nolllying you bolore moklng such e chengo, K. Proporly Tronsfor, I tronslor all or e subslontlol pnrl of my money or proporty, L. Proporty V;iluo, You determlno In good faith !hot tho vuluu of tho ProporW hos declined or Is lmpolred. M, Jnsocurlly, You de1ormlno In good lolth lhut a malorlol adverso chongo has occurred In my llnonoial condition from the condlllons sot lorlh In my most rooenl llnonolol slolomont before 1ho dote of this Guoranty or 1ho1 lho prospoct for poymont or perlormonco of the Debt Is lmpolrod for any reoson, 9, WAIVERS AND CONSENT, To tho oxtont nol prohlbltud by low, I walvv protest, presontmant for poymont, demand, nollce of occoloratlon, nollco of Intent It> oooeloreto ond nollco of dishonor. A. Addlllonal Walver9, In odillllon, lo tho oxtont pormh1ed by low, I consent to curtain octlons you mny loku, end 11onerolly walvo defenses 1ho1 moy bu avollablo bosod on those uctlons or bosad on lho slotus of a porly lo lho Pobl or lhls Clu~ron1y,
111 You muy renew or oX1ond pnymonts un 1ho Dob1, rooordloss of lhe nurnbor ol such renuwalu or eXlenslons. (2) You may releoso ony Dorrowor, undorsor, ouarnnlor, suroty, oocommoilallon maker 01 ony other co·slgnor, Jadon F. Nowmon
101 f3) You may rolaaso, substltuta or Impair any Properly, 141 You, or any Institution participating In lhe Dobt, may lnvoko your tl!lhl of sol·oll, 161 You may enter lnlo any sales, repurchases or porllclpatlons of lhe Debt lo any parson In any amounts ond I wolva notice ol &Uch solos, ropurchases or portlclpatlons, 161 I ooroe thnt Do11owo1 Is nulhorlzud to modlly Iha terms ol lhu Debi or ony lns11umun1 securing, guoronwlng or rolollno to lho Dob1, 171 You may underloko o vohlollon of any Proporty hr connocdon wllh ony procoodlngs under the Unltod Slntos Donhuptcy Coda i:oncernlno Donowor or me, rugordlos3 of rny such Vnluallon, or DclUo) umounlo rooolved by you orlslno born tho sole of such Property, (Bl I aoreo lo consont lo any wolvor grunted Iha Borrower, and ooroo thnl ony doley or Jock of dllloonca In lho enforcement of tho Debt, or ony folluro lo Ill• o claim or othorwlsu protocl orry ol lhu Dobt, In no way ollecls or lmpolrs my llablllly. (9) I ooree to walvo rollanco on any anll·dollcloncy stotutus, throuuh subrogation or othorwlse, and such s1alulos In no .. -. ~-wuy.11flocl..01:-lmpalun¥Jlolilllljk_JDJUWl1lqn, unlllJ)lp' qbl!a.~,!lQ!I_!; Pl Borrower to Londor hevo boon paid In lull, I walvo ony rlyht of subrogollon, conulbullon, rolmbursomont, lndomnlfloBllon, oxonorati11n, ond ony other rlgh1 I moy hovo lo enforoo ony remedy which you now have or In lhe future moy hovo uaolnst Borrower 01 arrolhPr 11uoronlo1 or os to any P1operty. Any Guarantor who Is on "Insider," ue conlomplolod by tho Unllod Slatos Donkruptay Codo, 11 U,S,C, 101, as amondod, mokos thosct wnlvors permanonlly. IAn lnsldor lnoludes, omono olhors, a director, olllcor, portnur, or other parson In control ol Botrowor, o poruon or on on Illy that Is o co·portnor wllh Borrow or, on on1l1y In whlah Borrowor Is o 11onerol porlnor, director, ollloor or olhor person In control or o closo rolollVo of any al lhoso ulher porsans.) Any Guarantor who Is not en Insider tnokos these WPlvors until oil Dobt Is fully repaid, B, No .Walvur Dy Lendor, Your aouruo of doollna, or your forbooronco from, or dolay In, Iha exorcise of ony of you1 rlohts, ramodles, privileges 01 rlghl to Insist upon rny ."Strict performonco of any provisions conlulnod In lho Dobt lns1111men1e, ehell not bu construod os n wolvor by you, unloss ony such wolver ls In wrlllng om! Is olonod by you, C, Wolvor of Clolms, I wolvo oil clolm3 for loss or demooo caused by your ocl& or omissions where you ucte!l roosonobly and In oood faith. 10, REMEDIES, Altar lhe Borrowor or I dofeul1, you moy 01 your option do ony one or mcira of tho lollowln9, A. A_ccoloratlon. You muy moko oil or any part ol the umoun1 owlno by the terms of this Guorenw lmmudlolely duo, n. S1>urco11, You may use any end oil romodles you havu undsr stole or fedora) low or In eny dooumonls rolollno to tho Debi, c. lnuuronoo llonofhs. You may moko a clolm far uny anti oll lnsurenca bono1hs 01 refunds tho\ moy be avollable on !lo1oult. D. Poymonts Mode on 1ho Dorrowor's Doholl, Amounts orlvoncod on 1ho Borrower's bchell wlll he lmmedio1oly duo end mey ho added to lhe l>elanco owing under tho Debi. E. TermJnqll11n. You moy totmlnoto my right to obtain odvunoes and mey rofuso to make uny 1ur1ho1 uxlenslons of credit. F. Se1·011, You moy usu tho 1laht o1 sot·oll, This menns you mey set·oll any emounl due end poyoblo under the 1erms of lhls Guurenly ogelnsl eny right I hove to reoolvo money from you, My rloht to roco)ve monoy lrom you Includes ony doposll or shore occount belanco I havo with you; any monay owed lo me on en item prosenled to you or In your possession for oolleollon or 11xchon110; and ony repurchoso agreemenl or olhar non-deposit obllgntlon, "Any nmount duo ond poyohlo undor tho terms ol thl~ Guo1enly" moons lhe total omoun1 lo which you ere en1111ed to demand puymont under the torms of lhls Guuronty el the tlmo you sot-off,. SubJect lo ony other written oonlroct, II my right lo tecolvo money from you ls olso ownnd by :mmoone who hos not ograod 10 poy the Dobt, your rloht ol set-oil wlll apply 10 my lntorost In the obllgellon 11nd lo ony other amounts I could whhdrnw on my sole request or endarsem11nt, In addition, you may also have rights undor o "slotulory lien", A "stetulory lion" moans your rloht under stolo or Jodarol low lo establish e right In, or claim lo, my shoros ond dividends 10 1he extent ol ony outstendlng llnuncl11I obllgotlons lh11t I' hevo with you, II you hevo e s101u1ory lien, you moy without further notlco, imp1oss and onforc11 lhe s1111utory lien on my shores und dlvldonds to tho oxtonl of ony sums duo nnd poynble under the terms of lhl~ Guoronly thot I full to sellsly, Your sol-011 and s1a1u101v lion riohls do nol apply to an account or olher obllootlon whero my rights arise only In o roprasontotlvo capeclry. They olso do not opply to ony lndlvlduol Aetlromenl Account or olher tux•delerrod rotlromonl account. You wlll not be llablo lor tho dishonor of any check or shuro droll whon the dishonor occurs baoeuse you sel·oll against any of my accounts, 111 uxcrclsod your s101u1ory lien rights, I pgroo to hold you hormloss lrom ony such olelms arising es 11 rosull of your oxurcfso ol your rlohl ol sor·ol1 or statutory llon rights,
102 . '• ~
G. Wnlve1. Except es otherwise roqulrod by low, by choosing any one or more of those remedies you do not glvo up your righl to use any other remody. You do not waive e dofoull it you choose no1 to use o remedy. By oluotln11 not to use ony remedy, you do not waive your right 10 later consider tho evunl a defeull and to use ony romedlos It the deloult contlnuos or occurs aaaln. 11. COLLECTION EXPENSES AlllD ATTORNEYS' FEES, On or ofter Dufault, to tho ex1ent porrnl11ed by Jew, I ogroe to pay all expenses of collection, enlorc;emont or protection ol your rights end romedlas unde1 this Guaranty or any other document roletlng lo 1he Dobt, To tho oxtont permitted by low, eXponsos Include, but 0111 not limited to, roaeonoble ol1ornoys' fBos, court oosls end othor legal oxponsos, All foos and expensos will bu ueoured by tho Propeny I hove grentod to you, II ony. In oddltlon, IQ tho oxtenl perrnllled by the Unltod Stetos Bonkruptcy Coda, I ogreo lo puy tho roosonoble ollornoys' fees Incurred by you lo protect your rights ond in1oros1:1 In connection whh any bonkruplc:y procoodlngs lnltlotod by or ogolnsl mo, 12, WARRANTIES AND REPRESENTATIONS. I hove lhe rl11h1 end authorl1y to ontor Into this GuoJanty, Tho ox11cu1lon and deliv111y of thlft GUerPnW will not vlolete any 11graemonl governing me oJ lo which I om o pony. In addition, I roprosent ond worrenl that this Guar~nty was ontorod Into ot the roq11Bal of tho Borrower, end tho! I um sotlsllod rooerdlno..tho.B.orr.QWpr's tlnonclol condition emf oxlstlng lndoblodness, authority 1o borrow ond tho use and ln1unrled use of oil Dobt pJooeeds, I further reprosenl end warren1 that I have not Jelled Qn ony rop71fsuhtli1lons or omissfurrs-irom-yolT'onny-- ·· -- infotma11on p1ovlded by you rospactlng lhe BorroWoJ, tho Bor1ower's 11nanclel condition and existing lndobtodniiss, tho Borrower'i; authority lo boirow oJ 1he Borrowur's use end Intended use of ·ull Debi proceeds, 13, RELIANCE. I ocknowledgo 1hP1 you ore rolylna on this Guuranly In ex1ondlng credll to tho Borrower, and I hove signed this Guaranty ro lmluco you to oxtond such credit. I Juprosont ond warrant to yo1.1 that I hevo o dlrecl and substontlol economic Interest In the Bo11owor ond expect to dorlve substontlol bonefhs from any loom1 ond llnonclol uccommodntlona rosulling In tho cruotlon of lndobledness guoroniled hereby. I ooroo to roly exclusively on tho right to revoke this Guernnty prospoctlvoly as 10 future trensoctlons In the mnnnor us previously descrlbod In this Guaranty ii ot Pny time, In my opinion, the benefits then hulno received by me In oonnootlon with this Guaronly oro not sufllolent to warrant tho oontlnuonce ol this Guaranty, You may roly ooncluslvoly on'o oon11nulno worrenty that I contlnuo to'bo benotiled by this Gueronly ond you wlll hove no duty to Inquire Into or confirm tho rocolpt of ony ouch lrnnollts, end this GuoJonty Wiii be u1foctlve 1md onloraooble by you without regard to tho receipt, noturo or value of ony such benefits, 14. APPLIGAIJLE LAW, This Guaranty Is governed by iha lows of Toxos, tho Unlred Steins of Amerlo11, end lo lho oxtont required, by tho lows of tho Jurisdiction whore tho Property Is localed, oxoept lo tho extent such stole lows ore preempted by loduJPI low. , 16. AMENDMENT, INTEGRATION AND SEVERABILITY. This Gueienty may not be omended or modltlod by orol 007oomenl. No omondmonl or modl11cetlon ol this Guoronly Is e1tecllv1;1 unless mode In writing ond executed by you and mo, This Guarenly is tho comploto ond 11nel oxprossion of the egreoment. II 11ny pr(jvlsl1m of this Guaranty l:i unanloraooble, 1hen tho unenlorcaeblo provision wlll be severocl and Iha remaining provisions wlll stlll ho onforcooble, 16, ASSIGNMENT. II you ossion ony of lho Dobis, you moy osslgn oll or any part ol 1hls G11oron1Y without notice 10 me or mY consent, ond this Guaranty wlll Inure lo th11-bonolll of y01JLossl11noo to-1ho-O>Clonl of .such_osslgnm11nt. You wlll continue to hove tho unlmpolred rl11h1 to onlorce this Guaranty os lo eny of the Debts lhet oro not esslgnorl, This Guoronly shall Inure to the benellt ol and be enforaooble by you ond your successor~ end assigns and ony other parson to whom you muy grant en Interest In tho Oobts end shall be binding upon nnd enlorcooblo ogolnsl me ond my porsQnul roprosonlP11Yos, suciiossors, heirs and assigns, 17, INHRPRETATION, Whenever used, the slngulor lncludos the plural ond the plurol Includes the singular. Tho soctlon hoodlngs ore for convenience only ond era not to bu used to interpret ot dellno Iha torms of ·this Guoronty. 18, NOTICE, FINANCIAL nEPORTS AND ADDITIONAL DOCUMENTS, Unloss otherwlso 111qulrud by law, 11ny notice Wiii be given by dellvo1ln9 It or moiling It by first olPBs moil to lhu opproprlolo party's eddrass listod In tho DATE AND PARTIES suction, or 10 ony othet oddross dosl11noted In writing. Notice Jo one Guorontor wlll bo deomocl to be notice lo ell Gueruntors. I wlll Inform you In wrltlno of ony changu In my nome, udilross or otho1 epplloetlon lnformotlon, I wlll provide you any llnonclol slotcmenl oJ lnlormotlon yol.I roquost, All llnonclol slelemonu ond Information I give you wlll be correct end oomplete. I ogroo to sign, dollvor, ond fllo any additional documents or certllloetlons that you moy consider neaessory to perfect, c1.mtlnuo, ond preserve my obllootlons undor this Guornnly ond to conllrm your llen stotus on uny Ptoporty, Time Is o1 tho essonco, 19. CREDIT INFORMATION, I ogroe that from tlmo lo time you may obtuln crodil lnlormotlon about me lrom others, lnoludlng other lenders ond crodll reporting agencies, and report to othoru lsuch us 11 crodlt roportln11 egonoyJ your credit exporlonce with me. I egreo that you wlll not be lloble for eny clelm arising from tho use ol lnlormetion piovlded lo you by others or for providing such lnfounetlon 10 others, 20, AGREEMENT TO ARBITRATE. You or I may submit to binding erbllJetion any dispute, ololm or other melter In quostlon botwoon or omon11 you end me the1 erlses out of or relolus to this Tronsoctlon JDlsputel, except os othorwlso Indicated In this section or ns you ond I egreo to In writing, For purposes of this section, this Tronsaollon Includes this Guaranty and eny other document relollno to tho Debi, end proposed loons or extensions of credit lhot relolo lo Ihle Guorenly, You or I will not orbllrolo any DlspUlo wlrhln ony "core proceedings'' under 1ho Unltud 510100 bankruptcy low:i. Jodon f, Nowm•n
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You and I musl consent lo erbllrete ony Dispute concurnlno tho Delli securod by roPI ustote ot the time of the proposed orbltrutlon. You may lorecloso or eMerclse ony powers of sole ogelns1 rool propor1y securing lhu Dub1 underlyino eny DlspUIO bofore, during or oltur ony orbllratlon. You may elso onlorce tho Dehl socured by 1his ro11I property end undorlylnu lhe Dispute beforo, during or altar eny erbltretlon, You or I may, whether or 1101 any 11rbllra1lon hes begun, pursuo eny sell-help or similar remodios, Including 1eklng property or exercising o1her rlohts under lho low; oeok u11ochmenl, gornlshrnenl, rocolvorshlp 01 other provlshmel remedies from e court hovlno Jurlsdlc11on to preserve lho righls of or lo prevont lrruperbble Injury 10 you or me; or loreolose ogelnst eny propony by ony method or toko legal action to rocover any property. Forecloslng or exercising 11 power of sole, beginning end continuing o Judfolel action or pursuing sell-help remedies will not constllUle e wolvur of the right to compol orbl11111lon. Tho orbllretor Wiii dolormlne whether o Disputo Is urbltroble. A single orbltretor wlll resolve any Dispute, whother Jndlvlduel or lofnl In nature, or whother bosod on comract, tori, or any other mettor et low or In oqulty. Tho arbitretur may consolidDte any Dlspulo wllh any related dlspules, clnlm~ or other mattors Jn qunstlon not arising out o1 this T1ansoctlon, Any oourt havln9 Jurlsdlolfon may enter e Judgment 01 decreo on the erbllrotor's award. Tho ludgrnont or docree wlll be enforoed o~ ony other Judgment or decroo, You lih-U-l'lilll THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES ANO, TO THE EXTENT PERMITTED BY LAW, MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. I ( THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN 'fHE PARTIES. 21, SIGNATURES, By signing, I ogree lo tho lorms contained In this Guorenly, I also oc:knowlodgo receipt ot a copy of this Guaranty. GUARANTOR; J•don f, Nowm•n
Jadon F. Newman v. Firstmark Credit Union (Jadon F. Newman v. Firstmark Credit Union) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.