Affirmed and Opinion Filed July 29, 2015
S In The Court of Appeals Fifth District of Texas at Dallas No. 05-14-00851-CV
LSREF2 APEX (TX) II, LLC, Appellant V. GREGORY BLOMQUIST AND DANIEL D. DAVIDS, II, Appellee
On Appeal from the 219th Judicial District Court Collin County, Texas Trial Court Cause No. 219-02840-2012
MEMORANDUM OPINION Before Justices Bridges, Lang, and Schenck Opinion by Justice Bridges LSREF2 Apex (TX) II, LLC (Apex) appeals the trial court’s no-evidence summary
judgment in favor of Gregory Blomquist and Daniel Davids. In two issues, Apex argues the trial
court erred in striking its summary judgment evidence and entering summary judgment in favor
of Blomquist and Davids. We affirm the trial court’s orders granting Blomquist’s and Davids’
motions for summary judgment.
On August 2, 2012, Wells Fargo Bank sued Blomquist and Davids alleging they had
entered into a guaranty with LaSalle Bank National Association in August 2006. The guaranty
guaranteed repayment of a $748,000 loan made by LaSalle to Real Holdings Group, LLC in
connection with property located in Giddings, Texas. Real Holdings executed a promissory note
pursuant to the loan. Wells Fargo alleged LaSalle assigned the loan documents to Wells Fargo as trustee for certain holders of commercial mortgage securities in December 2006. In June
2012, the loan documents were assigned to Wells Fargo. Meanwhile, in January 2012, Real
Holdings defaulted on the promissory note. Wells Fargo alleged Blomquist and Davids refused
to pay under the guaranty, and this refusal was a breach of contract entitling Wells Fargo to
$740,652.15 plus interest and attorney’s fees.
On August 24, 2012, Blomquist filed an answer asserting a general denial and the
affirmative defenses of “waiver and/or estoppel” and failure to mitigate damages. Blomquist’s
answer also contained a request for disclosure of, among other things, the names of the parties to
the lawsuit and the names of any potential parties. Davids filed a separate answer. On October
1, 2012, Wells Fargo filed separate motions for summary judgment on its claims against
Blomquist and Davids. On October 29, 2012, in separate orders, the trial court granted summary
judgment in favor of Wells Fargo against Blomquist and Davids. However, on November 28,
2012, the trial court entered an agreed order setting aside the orders granting summary judgment
and re-setting the motions for summary judgment for consideration at a future submission
hearing.
On May 6, 2013, Wells Fargo allegedly assigned its rights under the loan documents to
Apex. On January 10, 2014, a motion for withdrawal and substitution of counsel was filed,
purportedly by Wells Fargo. The motion did not mention the assignment of the loan documents
or Apex. On March 4, 2014, the trial court granted the motion.
On March 5, 2014, Blomquist and Davids filed motions for no-evidence summary
judgment. The motions alleged, in part, that the discovery period closed in June 2012, and Wells
Fargo conducted no discovery. The motions also alleged there was no evidence to support Wells
Fargo’s claims of breach of contract or to show who owned the guaranty contract. On March 6,
–2– 2014, Blomquist’s counsel advised the parties that Blomquist’s motion for summary judgment
was set for a hearing on March 28, 2014.
On March 21, 2014, Apex filed its first amended petition as “successor-in-interest to
Wells Fargo Bank.” The amended petition alleged that, on May 6, 2013, Wells Fargo assigned
to Apex all interest in the promissory note and guaranty. As owner and holder of the note,
guaranty, and assignments, Apex claimed it was entitled to recover all monies due and owing
under the terms of the note, guaranty, and assignments. Apex sought $501,772.56 plus interest
and attorney’s fees from Blomquist and Davids under the terms of the note and guaranty.
The same day, Apex filed its response to Blomquist’s and Davids’ motions for summary
judgment. The response reiterated that the note and guaranty had been assigned to Apex, the
borrower on the note defaulted on its obligations, and Blomquist and Davids refused to pay
under the terms of the guaranty. Thus, Apex argued, there was more than a scintilla of evidence
to support each element of Apex’s claim for breach of the guaranty and to show the guaranty was
transferred to Apex. Attached to the response was the affidavit of Monica Knake, assistant vice
president of Apex.
On March 27, 2014, Blomquist and Davids filed objections and motions to strike Apex’s
summary judgment evidence. The motions argued Apex could not show good cause for waiting
nearly eleven months to inform the court or the parties of the assignment of the note and
guaranty or to identify Knake as a witness, and the failure to timely disclose this information
meant it should be excluded under rule of civil procedure 193.6. The motions also objected to
the Knake affidavit as containing exhibits that were not filed with the clerk of the court fourteen
days prior to trial as required by rule of evidence 902(1) and therefore should not be admitted as
summary judgment evidence. The motions pointed out that the alleged transfer of the note and
guaranty to Apex took place almost seven years after the loan documents were executed and
–3– delivered to LaSalle. The motions argued Knake’s affidavit failed to establish how Knake had
personal knowledge of the record keeping of LaSalle, Wells Fargo as trustee, or Wells Fargo that
would allow her to testify the loan documents were the business records of Apex. The motions
objected to all of the paragraphs in the Knake affidavit concerning the note and guaranty, its
assignment to Apex, and the amounts due under the loan documents as hearsay outside Knake’s
personal knowledge.
Following a hearing, the trial court entered orders sustaining the objections to the exhibits
attached to the Knake affidavit and to the Knake affidavit itself. The trial court granted the
motions for no-evidence summary judgment, and this appeal followed.
In its first issue, Apex argues the trial court erred in sustaining the objections to the
Knake affidavit and the supporting loan documents.
Parties have a duty to amend or supplement incomplete or incorrect responses to written
discovery reasonably promptly after the party discovers the necessity. TEX. R. CIV. P.
193.5(a),(b). “A party who fails to make, amend, or supplement a discovery response in a timely
manner may not introduce in evidence the material or information that was not timely disclosed”
unless the court finds that good cause exists for the failure to disclose or any failure to timely
disclose will not unfairly surprise or unfairly prejudice the other parties. TEX. R. CIV. P.
193.6(a); Dyer v. Cotton, 333 S.W.3d 703, 717 (Tex. App.–Houston [1st Dist.] 2010, no pet.).
While exclusion is mandatory, the exception provides the trial court the opportunity to excuse
failure to comply in “difficult or impossible circumstances” or in otherwise excusable
circumstances. See Dyer, 333 S.W.3d at 717; Williams v. Cnty. of Dallas, 194 S.W.3d 29, 32–33
(Tex. App.–Dallas 2006, pet. denied) (no abuse of discretion in admitting undisclosed documents
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Affirmed and Opinion Filed July 29, 2015
S In The Court of Appeals Fifth District of Texas at Dallas No. 05-14-00851-CV
LSREF2 APEX (TX) II, LLC, Appellant V. GREGORY BLOMQUIST AND DANIEL D. DAVIDS, II, Appellee
On Appeal from the 219th Judicial District Court Collin County, Texas Trial Court Cause No. 219-02840-2012
MEMORANDUM OPINION Before Justices Bridges, Lang, and Schenck Opinion by Justice Bridges LSREF2 Apex (TX) II, LLC (Apex) appeals the trial court’s no-evidence summary
judgment in favor of Gregory Blomquist and Daniel Davids. In two issues, Apex argues the trial
court erred in striking its summary judgment evidence and entering summary judgment in favor
of Blomquist and Davids. We affirm the trial court’s orders granting Blomquist’s and Davids’
motions for summary judgment.
On August 2, 2012, Wells Fargo Bank sued Blomquist and Davids alleging they had
entered into a guaranty with LaSalle Bank National Association in August 2006. The guaranty
guaranteed repayment of a $748,000 loan made by LaSalle to Real Holdings Group, LLC in
connection with property located in Giddings, Texas. Real Holdings executed a promissory note
pursuant to the loan. Wells Fargo alleged LaSalle assigned the loan documents to Wells Fargo as trustee for certain holders of commercial mortgage securities in December 2006. In June
2012, the loan documents were assigned to Wells Fargo. Meanwhile, in January 2012, Real
Holdings defaulted on the promissory note. Wells Fargo alleged Blomquist and Davids refused
to pay under the guaranty, and this refusal was a breach of contract entitling Wells Fargo to
$740,652.15 plus interest and attorney’s fees.
On August 24, 2012, Blomquist filed an answer asserting a general denial and the
affirmative defenses of “waiver and/or estoppel” and failure to mitigate damages. Blomquist’s
answer also contained a request for disclosure of, among other things, the names of the parties to
the lawsuit and the names of any potential parties. Davids filed a separate answer. On October
1, 2012, Wells Fargo filed separate motions for summary judgment on its claims against
Blomquist and Davids. On October 29, 2012, in separate orders, the trial court granted summary
judgment in favor of Wells Fargo against Blomquist and Davids. However, on November 28,
2012, the trial court entered an agreed order setting aside the orders granting summary judgment
and re-setting the motions for summary judgment for consideration at a future submission
hearing.
On May 6, 2013, Wells Fargo allegedly assigned its rights under the loan documents to
Apex. On January 10, 2014, a motion for withdrawal and substitution of counsel was filed,
purportedly by Wells Fargo. The motion did not mention the assignment of the loan documents
or Apex. On March 4, 2014, the trial court granted the motion.
On March 5, 2014, Blomquist and Davids filed motions for no-evidence summary
judgment. The motions alleged, in part, that the discovery period closed in June 2012, and Wells
Fargo conducted no discovery. The motions also alleged there was no evidence to support Wells
Fargo’s claims of breach of contract or to show who owned the guaranty contract. On March 6,
–2– 2014, Blomquist’s counsel advised the parties that Blomquist’s motion for summary judgment
was set for a hearing on March 28, 2014.
On March 21, 2014, Apex filed its first amended petition as “successor-in-interest to
Wells Fargo Bank.” The amended petition alleged that, on May 6, 2013, Wells Fargo assigned
to Apex all interest in the promissory note and guaranty. As owner and holder of the note,
guaranty, and assignments, Apex claimed it was entitled to recover all monies due and owing
under the terms of the note, guaranty, and assignments. Apex sought $501,772.56 plus interest
and attorney’s fees from Blomquist and Davids under the terms of the note and guaranty.
The same day, Apex filed its response to Blomquist’s and Davids’ motions for summary
judgment. The response reiterated that the note and guaranty had been assigned to Apex, the
borrower on the note defaulted on its obligations, and Blomquist and Davids refused to pay
under the terms of the guaranty. Thus, Apex argued, there was more than a scintilla of evidence
to support each element of Apex’s claim for breach of the guaranty and to show the guaranty was
transferred to Apex. Attached to the response was the affidavit of Monica Knake, assistant vice
president of Apex.
On March 27, 2014, Blomquist and Davids filed objections and motions to strike Apex’s
summary judgment evidence. The motions argued Apex could not show good cause for waiting
nearly eleven months to inform the court or the parties of the assignment of the note and
guaranty or to identify Knake as a witness, and the failure to timely disclose this information
meant it should be excluded under rule of civil procedure 193.6. The motions also objected to
the Knake affidavit as containing exhibits that were not filed with the clerk of the court fourteen
days prior to trial as required by rule of evidence 902(1) and therefore should not be admitted as
summary judgment evidence. The motions pointed out that the alleged transfer of the note and
guaranty to Apex took place almost seven years after the loan documents were executed and
–3– delivered to LaSalle. The motions argued Knake’s affidavit failed to establish how Knake had
personal knowledge of the record keeping of LaSalle, Wells Fargo as trustee, or Wells Fargo that
would allow her to testify the loan documents were the business records of Apex. The motions
objected to all of the paragraphs in the Knake affidavit concerning the note and guaranty, its
assignment to Apex, and the amounts due under the loan documents as hearsay outside Knake’s
personal knowledge.
Following a hearing, the trial court entered orders sustaining the objections to the exhibits
attached to the Knake affidavit and to the Knake affidavit itself. The trial court granted the
motions for no-evidence summary judgment, and this appeal followed.
In its first issue, Apex argues the trial court erred in sustaining the objections to the
Knake affidavit and the supporting loan documents.
Parties have a duty to amend or supplement incomplete or incorrect responses to written
discovery reasonably promptly after the party discovers the necessity. TEX. R. CIV. P.
193.5(a),(b). “A party who fails to make, amend, or supplement a discovery response in a timely
manner may not introduce in evidence the material or information that was not timely disclosed”
unless the court finds that good cause exists for the failure to disclose or any failure to timely
disclose will not unfairly surprise or unfairly prejudice the other parties. TEX. R. CIV. P.
193.6(a); Dyer v. Cotton, 333 S.W.3d 703, 717 (Tex. App.–Houston [1st Dist.] 2010, no pet.).
While exclusion is mandatory, the exception provides the trial court the opportunity to excuse
failure to comply in “difficult or impossible circumstances” or in otherwise excusable
circumstances. See Dyer, 333 S.W.3d at 717; Williams v. Cnty. of Dallas, 194 S.W.3d 29, 32–33
(Tex. App.–Dallas 2006, pet. denied) (no abuse of discretion in admitting undisclosed documents
supporting damages where face of pleading indicated such damages would be sought at trial).
The party seeking to admit the objectionable evidence bears the burden of establishing good
–4– cause or the lack of unfair surprise or prejudice. TEX. R. CIV. P. 193.6(b); see Norfolk S. Ry. Co.
v. Bailey, 92 S.W.3d 577, 581 (Tex. App.–Austin 2002, no pet.). One purpose of Rule 193.6(a)
is to prevent trial by ambush. See Alvarad v. Farah Mfg. Co., 830 S.W.2d 911, 914 (Tex. 1992).
A disclosure made less than thirty days before trial is presumed to not be “reasonably
prompt.” TEX. R. CIV. P. 193.5(b). An appellate court reviews a trial court's decision to admit or
exclude evidence under an abuse-of-discretion standard. In re J.P.B., 180 S.W.3d 570, 575 (Tex.
2005). A court abuses its discretion if it acts without reference to any guiding rules or principles.
Carpenter v. Cimarron Hydrocarbons Corp., 98 S.W.3d 682, 687 (Tex. 2002). An appellate
court must uphold a trial court's evidentiary ruling if there is any legitimate basis in the record to
support it. TEX. R. CIV. P. 193.6(a), (b); Drilex Sys., Inc. v. Flores, 1 S.W.3d 112, 119–20 (Tex.
1999).
Here, Wells Fargo allegedly assigned its rights under the loan documents to Apex on
May 6, 2013. However, Apex did not inform the trial court or the parties of this fact until March
21, 2014, more than ten months later and seven days before Blomquist’s and Davids’ motions for
summary judgment were set for a hearing. In addition, the documents purporting to show the
assignment of Wells Fargo’s rights to Apex were not presented until they were attached to
Apex’s response to Blomquist’s and Davids’ motions for summary judgment on March 21, 2014.
Under these circumstances, we conclude the trial court did not abuse its discretion in sustaining
Blomquist’s and Davids’ objections to Apex’s summary judgment evidence and striking the
evidence. See TEX. R. CIV. P. 193.6(a); Dyer, 333 S.W.3d at 717. We overrule Apex’s first
issue.
In its second issue, Apex argues the trial court erred in granting Blomquist’s and Davids’
motions for summary judgment because Apex’s summary judgment evidence raised fact issues
on every challenged element of Apex’s claims.
–5– We review a summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d
656, 661 (Tex. 2005)). In a no-evidence summary judgment, the movant represents that there is
no evidence of one or more essential elements of the claims for which the non-movant bears the
burden of proof at trial. Tex. R. Civ. P. 166a(i). We sustain a no-evidence summary judgment
when (a) there is a complete absence of evidence of a vital fact; (b) the court is barred by rules of
law or of evidence from giving weight to the only evidence offered to prove a vital fact; (c) the
evidence offered to prove a vital fact is no more than a mere scintilla; or (d) the evidence
conclusively establishes the opposite of the vital fact. King Ranch, Inc. v. Chapman, 118 S.W.3d
742, 751 (Tex. 2003).
Less than a scintilla of evidence exists when the evidence is so weak as to do no more
than create a mere surmise or suspicion of a fact. Id. On the other hand, more than a scintilla of
evidence exists when reasonable and fair-minded people could differ in their conclusions based
on the evidence. Id. To raise a genuine issue of material fact, the evidence must exceed mere
suspicion. Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex. 2004). “Evidence that is so
slight as to make any inference a guess is in legal effect no evidence.” Id. A party may move for
a no-evidence summary judgment after an adequate time for discovery has passed. Id.
Here, once the trial court struck Apex’s summary judgment evidence, there was no
evidence Apex had any claim under the loan documents assigned to Wells Fargo. Thus, once the
summary judgment was stricken, there was no evidence to support Apex’s claims. Accordingly,
the trial court did not err in granting Blomquist’s and Davids’ motions for summary judgment.
See Tex. R. Civ. P. 166a(i); Chapman, 118 S.W.3d at 751. We overrule Apex’s second issue.
–6– We affirm the trial court’s orders granting Blomquist’s and Davids’ motions for summary
judgment.
140851F.P05 /David L. Bridges/ DAVID L. BRIDGES JUSTICE
–7– S Court of Appeals Fifth District of Texas at Dallas JUDGMENT
LSREF2 APEX (TX) II, LLC, Appellant On Appeal from the 219th Judicial District Court, Collin County, Texas No. 05-14-00851-CV V. Trial Court Cause No. 219-02840-2012. Opinion delivered by Justice Bridges. GREGORY BLOMQUIST AND DANIEL Justices Lang and Schenck participating. D. DAVIDS, II, Appellees
In accordance with this Court’s opinion of this date, the judgment of the trial court is AFFIRMED.
It is ORDERED that appellees GREGORY BLOMQUIST AND DANIEL D. DAVIDS, II recover their costs of this appeal from appellant LSREF2 APEX (TX) II, LLC.
Judgment entered July 29, 2015.
–8–