Preston Hollow Capital v. Truist Bank

2026 Tex. Bus. 5
Texas Business Court·Decided February 2, 2026·No. 25-BC01B-0030·Published·Cited by 1 cases

Opinion

FILED IN

BUSINESS COURT OF TEXAS

BEVERLY CRUMLEY, CLERK

ENTERED

2/2/2026

2026 Tex. Bus. 5

PRESTON HOLLOW CAPITAL, § LLC; and PHCC LLC, Plaintiffs § §

v. § Cause No. 25–BC01B–0030 §

TRUIST BANK FORMERLY § KNOWN AS BRANCH BANK & § TRUST, Defendant § ═══════════════════════════════════════ OPINION REGARDING DESIGNATION OF THIRD PARTIES ═══════════════════════════════════════

Syllabus 1

This opinion addresses Civil Practice & Remedies Code Chapter 33’s definition of “responsible third party” and the meaning of “the harm for which recovery of damages is sought,” as used therein.

Opinion

[¶ 1] Based on defendant’s live pleadings, the parties’ submissions, their oral arguments, and the applicable law, the court issued its January 7, 2026, Order granting Truist’s Motion for Leave to Designate Responsible

1 This syllabus is for the reader’s convenience; it is not part of the court’s opinion; and it is not legal authority.

Third Parties conditioned on Truist filing an amended pleading that alleges how Bouldin and Senior Care have separately contributed to Preston Hollow’s injury or injuries in accordance with notice pleading standards.2 I. BACKGROUND

[¶ 2] The court takes these facts from the parties’ pleadings:

[¶ 3] Senior Care Living VI, LLC was created to develop and operate a senior living center called Inspired Living at Sugar Land. 3 Senior Care financed the project with bond financing. 4

[¶ 4] BB&T was the initial trustee under (i) the Master Indenture between BB&T and Senior Care and (ii) the Bond Indenture between BB&T and the conduit bond issuer, Woodloch Healthcare Facilities Development Corporation. 5 These documents are collectively the “Bond Documents.” Defendant Truist is BB&T’s successor. 6

2 Unless otherwise noted, defined terms have the meanings proscribed to them in the parties’ briefing. 3 Plaintiff’s Original Petition (POP) ¶ 9(a). Preston Hollow filed a First Amended Petition on January 15, 2026. This opinion addresses the pleading that was live when Truist filed its motion and the court issued its January 7, 2026, order. (i.e., the POP). 4 See POP ¶s 1, 10(a)–(c). 5 POP ¶ 11(b). 6 POP ¶ 11(a). Other than this paragraph, the court uses “Truist” to refer to both BB&T and Defendant Truist.

[¶ 5] Although Woodloch issued the bonds pursuant to the Bond Indenture,7 Senior Care was the ultimate bond Obligor.8

[¶ 6] Woodloch loaned the bond proceeds to Senior Care under a loan secured by most of Senior Care’s assets. 9 Woodloch also assigned its rights and interests under the Bond Documents and loan proceeds to Truist. 10

[¶ 7] To protect the gross revenue collateral pledge, Senior Care and Truist executed Account Control Agreements (ACA) whereby Truist held all ACA-created bank accounts into which Senior Care was to deposit its gross receipts and gross revenue. 11

[¶ 8] Pursuant to its rights, Preston Hollow controlled the bond funds during construction of the senior living center.12

[¶ 9] The project was substantially completed by late 2017, and Senior Care started leasing by early 2018.13

7 POP ¶ 11(b). 8 POP ¶ 12(a). 9 POP ¶ 12(c). 10 POP ¶ 12(d). 11 POP ¶s 12(e)–(f). 12 POP ¶s 16–17. 13 POP ¶ 18.

[¶ 10] Beginning in 2019, Preston Hollow learned of multiple alleged Senior Care defaults 14 and directed Truist to send default notices to Senior Care. 15

[¶ 11] On March 18, 2019, Preston Hollow issued a Letter of Direction to Truist. Through that Letter, Preston Hollow instructed Truist to not act under the loan or Bond Documents unless Preston Hollow expressly directed Truist to do so and in return Preston Hollow would indemnify Truist.16

[¶ 12] On March 25, 2019, Preston Hollow issued a Directions to Trustee and Indemnification Letter (D&I Letter) to Truist that similarly instructed Truist to not act unless directed and included an indemnification provision. 17

[¶ 13] Truist alleges it acted consistently with both letters’

directives. 18

14 POP ¶s 19–21. 15 POP ¶ 22. 16 Defendant’s Answer and Counterclaims (DAAC) ¶s 25–28. 17 DAAC ¶ 29–33. 18 DAAC ¶ 34.

[¶ 14] When Senior Care allegedly refused to cure its defaults, Preston Hollow directed Truist to accelerate the bonds and loan, which Truist did on May 31, 2019. 19

[¶ 15] In June 2019, Preston Hollow sued Senior Care and Bouldin. 20

[¶ 16] On July 12, 2019, Truist appointed two successor trustees, and resigned five days later.21

[¶ 17] Upon Truist’s resignation, Preston Hollow asked Truist if Senior Care had deposited its gross revenues into the Blocked Accounts as the Bond Documents and ACA required. 22 Truist disclosed that Senior Care never did so.23 Preston Hollow alleges that it later learned that Truist’s representative approved Senior Care’s deviation from the Bond Documents’ and ACA’s strict requirements.24

[¶ 18] In the present case, Preston Hollow alleges breaches of fiduciary duty, trust, and contract by Truist as the Bond Documents’ trustee.25

19 POP ¶ 23. 20 DAAC ¶ 36. 21 POP ¶ 25. 22 POP ¶ 27. 23 POP ¶ 28. 24 POP ¶ 29. 25 See generally POP § VII (Causes of Action and Remedies).

[¶ 19] Truist asserts that at least part of Preston Hollow’s harm derives from Senior Care and Bouldin’s breaches, justifying designating each a responsible third party.26 Specifically, Truist points to Preston Hollow’s allegations that Senior Care and Bouldin (i) failed to pay the Project’s general contractor; (ii) failed to pay property taxes; (iii) failed to deposit gross revenues into the required accounts; and (iv) improperly transferred funds to another Bouldin-related project, all of which Preston Hollow alleges Truist failed to detect or mitigate. 27 Ultimately, Preston Hollow alleges that Truist “failed to discharge its duties as trustee,” allowing Senior Care and Bouldin to violate their duties under the Bond Documents and causing “irretrievable deterioration of the trust estate.”28

26 See generally Truist’s Motion for Leave to Designate Responsible Third Parties (Motion). 27 Truist’s Reply in support of Motion for Leave to Designate Responsible Third Parties (Reply) at 11 (citing POP ¶s 20, 21, 29–32, and 33). 28 POP ¶ 1; see also id. ¶ 47 (Preston Hollow further alleges that “Bouldin and Senior Care have thus far made no payments on their bond obligations” and that Truist’s actions “have hampered and worsened the situation for Preston Hollow.”).

II. ANALYSIS

A. Standard of Review

[¶ 20] A court shall grant leave to designate a person as a responsible third party unless another party objects on or before the fifteenth day after the date the motion is served. TEX. CIV. PRAC. & REM. CODE § 33.004(f).

[¶ 21] The court shall grant leave over an objection unless the objecting party establishes that the defendant failed to “plead sufficient facts concerning the alleged responsibility of the person to satisfy the pleading requirement of Texas Rules of Civil Procedure,” even after being granted leave to replead. Id., § 33.004(g).

[¶ 22] Texas procedural rules require “notice pleading.” In re Lipsky, 460 S.W.3d 579, 590 (Tex. 2015) (citing TEX. R. CIV. P. 45 & 47). Notice pleadings are satisfied if they provide fair notice of the claim and the relief sought such that the opposing party can prepare a defense. Id. B. Rules of Statutory Construction

[¶ 23] A court’s primary purpose in statutory construction is to implement the Legislature’s intent by giving effect to every word, clause, and sentence. Sunstate Equip. Co. v. Hegar, 601 S.W.3d 685, 689–90 (Tex. 2020) (citation omitted). Indeed, statutory text is the “first and foremost” indication

of legislative intent. Greater Hous. P’Ship v. Paxton, 468 S.W.3d 51, 58 (Tex. 2015). Thus, courts apply the words’ common, ordinary meaning unless (i) the text supplies a different meaning or (ii) the common meaning produces absurd results. Fort Worth Transp. Auth. v. Rodriguez, 547 S.W.3d 830, 838 (Tex. 2018).

[¶ 24] Further, courts derive statutory meaning from the entire statute.

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Preston Hollow Capital v. Truist Bank, 2026 Tex. Bus. 5 (Tex. Super. Ct. 2026).

2026 Tex. Bus. 5 (Preston Hollow Capital v. Truist Bank) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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