Opinion issued December 31, 2025
In The
Court of Appeals For The
First District of Texas ———————————— NO. 01-24-00391-CV ——————————— TAMMY TRAN, MINH-TAM, ATTORNEY AT LAW, LLP AND HONG- AN, LP, Appellants V. 2905 FANNIN, LLC, Appellee
On Appeal from the 61st District Court Harris County, Texas Trial Court Case No. 2023-17402
MEMORANDUM OPINION
Hong-An, LP bought commercial real property in Houston, Texas by taking
a $2.8 million mortgage secured by a first lien on the property. Later, Hong-An
twice borrowed money ($400,000 and $283,000), securing those additional loans
with second and third liens on the same property. The second and third loans were transferred to 2905 Fannin, LLC (“2905 Fannin”), which sued Hong-An, and
guarantors (and appellants) Tammy Tran and her law firm (Minh-Tran “Tammy”
Tran, Attorney at Law, LLP also known as the “Tran Law Firm”) for breach of
contract. After the parties signed a settlement agreement in that case, but before the
trial court entered judgment dismissing it with prejudice, the first lien holder
foreclosed on the property. 2905 Fannin sued the appellants for breach of the
settlement agreement for allowing the superior lien holder to foreclose on the
property, and it later added a claim for breach of contract—an alternative theory of
liability—based on the appellants’ failure to make a payment in accordance with
the schedule in the settlement agreement.
The trial court granted summary judgment in favor of 2905 Fannin based on
both alleged breaches. The appellants challenge that ruling on appeal, asserting that
both of 2905 Fannin’s alternative liability theories fail. First, they argue that 2905
Fannin’s breach of contract claim based on the foreclosure is barred by res judicata
because, through the exercise of diligence, 2905 Fannin could have raised that
claim in the prior lawsuit. Second, they argue that 2905 Fannin breached the
settlement agreement first by filing suit, and that breach excused their nonpayment
of amounts owed pursuant to the settlement agreement.
2 We conclude that 2905 Fannin did not breach the settlement agreement by
filing suit, and the trial court did not err by granting summary judgment based on
the appellants’ default.1 We affirm the judgment of the trial court.
Background
I. Hong-An, LP buys property in Harris County, Texas and obtains two additional loans secured by an interest in the property.
In 2012, Hong-An, LP purchased commercial real property located at 2905-
2915 Fannin Street in Harris County Texas for $2.8 million from R.A. Lane, Jr.
with a mortgage from The Bank of River Oaks. PlainsCapital Bank later succeeded
the Bank of River Oaks as the holder of the mortgage.
In January 2013, Hong-An took the first of two loans from Icon Bank.2 The
first loan, for the principal amount of $400,000, was memorialized in a promissory
note (“Note One”), secured by second lien deed of trust on the property at 2905-
2915 Fannin, and guaranteed by both Tran individually and the Tran Law Firm.
Nearly three years later, in December 2015, Hong-An took a second loan from
1 Because the summary judgment can be upheld based on breach of the payment schedule in settlement agreement, we do not need to consider the arguments that the other allegation of breach of contract is barred by res judicata. See TEX. R. APP. P. 47.1 (“The court of appeals must hand down a written opinion that is as brief as practicable but that addresses every issue raised and necessary to final disposition of the appeal.”) 2 Icon Bank was succeeded by merger with Bancorp South, which assigned both notes along with their security instruments and guaranty agreements to Nicholas Williams Associates, LLC, which later assigned them to 2905 Fannin.
3 Icon Bank. The second loan, for the principal amount of $283,000, was
memorialized in a promissory note (“Note Two”), secured by third lien deed of
trust on the property at 2905-2915 Fannin, and guaranteed by both Tran
individually and the Tran Law Firm.
Both Notes One and Two included a provision that allowed the “Payee” the
option to accelerate the note after a missed payment.3 Both the Second and Third
Lien Deeds of Trust provided: “Grantors will not suffer or permit any lien superior
or equal to the lien created hereby to attach to or be enforced against the
Premises.”
II. 2905 Fannin sues for breach of contract, and the suit is resolved by settlement amid foreclosure proceedings by PlainsCapital Bank.
A. 2905 Fannin settles its breach of contract claims relating to Notes One and Two.
In 2021, 2905 Fannin sued Hong-An, its general partner Chua, LLC, Tran,
and the Tran Law Firm for default under the terms of Notes One and Two. Hong-
An, Chua, Tran, and the Tran Law firm filed a counterclaim. The parties resolved
their claims and signed a settlement agreement on February 3, 2023, which
3 “IF ANY installment or payment of principal or interest of this note is not paid within (10) days of its due date; or if default occurs under any document, instrument or agreement executed in connection with or as security for this note . . . and such default remains uncured for at least thirty (30) days . . . . thereupon, at the option of Payee, this note and any and all other indebtedness of Maker to Payee will become due and payable forthwith without demand, notice of default, notice of intent to accelerate the maturity of this note, notice of acceleration of the maturity of this note, notice of nonpayment, presentment, protest or notice of dishonor, all of which are expressly waived by Maker and each other liable party.” 4 included mutual releases, but it expressly provided that they “[did] not release any
obligations recognized or created by this Agreement or [Note One], [Note Two],
[the Personal Guarantees], and/or any and all modifications, renewals, and/or re-
arrangements thereof.”
The parties also signed Second and Third Lien Modification, Renewal, and
Extension Agreements, which were incorporated by reference into the settlement
agreement and extended the maturity dates of Notes One and Two to December 31,
2025. Each agreement required a payment on August 12, 2023: $16,733.36 and
$826.644 for Notes One and Two, respectively. Each modification agreement
incorporated by reference the obligations and liabilities under Notes One and Two
and the Second and Third Lien Deeds of Trust.5
4 The Modification, Renewal, and Extension Agreements included specific repayment schedules with dates and amounts owed. 5 Paragraph 4(a) of the Second Lien Modification, Renewal, and Extension Agreement provided:
4. Borrower understands and agrees that:
(a) All covenants, agreements, stipulations, and conditions in the Second Lien Promissory Note and Second Lien Deed of Trust shall be and remain in full force and effect, except as herein modified, and none of the Borrower’s obligations or liabilities shall be diminished or released by any provisions hereof. Nor shall this Modification Agreement in any way impair, diminish, or affect any of Note Holder’s rights under or remedies available under the Second Lien Promissory Note and Second Lien Deed of Trust, whether such rights or remedies arise thereunder or by operation of law. Also, this 5 The parties filed a motion to dismiss on February 13, 2023, and the trial
court dismissed the case with prejudice the next day, February 14, 2023.
B. Contemporaneously, PlainsCapital Bank, the first lien holder, foreclosed based on default.
Two cases proceeded simultaneously: the case filed by 2905 Fannin and a
suit brought by PlainsCapital Bank against Hong-An for default on the first
mortgage. In May 2022, Hong-An entered into a settlement agreement with
PlainsCapital Bank, which provided for monthly payments with a final balloon
payment on December 1, 2022, and permitted the bank to foreclose without further
notice upon default.
Modification Agreement does not impair, in any way, any Personal Guaranty.
Similarly, Paragraph 4(a) of the Third Lien Modification, Renewal, and Extension Agreement provided:
4. Borrower understands and agrees that: (a) All covenants, agreements, stipulations, and conditions in the Third Lien Promissory Note and Third Lien Deed of Trust shall be and remain in full force and effect, except as herein modified, and none of the Borrower’s obligations or liabilities shall be diminished or released by any provisions hereof. Nor shall this Modification Agreement in any way impair, diminish, or affect any of Note Holder’s rights under or remedies available under the Third Lien Promissory Note and Third Lien Deed of Trust, whether such rights or remedies arise thereunder or by operation of law. Also, this Modification Agreement does not impair, in any way, any Personal Guaranty. 6 On January 13, 2023, PlainsCapital Bank publicly posted and mailed to
Hong-An and Tran a “Notice of Substitute Trustee Sale” asserting that Hong-An
defaulted and that the property would be sold at a public auction. On February 7,
2023, PlainsCapital Bank bought the property at auction for $975,623.00.
III. 2905 Fannin sues for breach of the Settlement Agreement and prevails on summary judgment.
Although PlainsCapital Bank foreclosed on the property a week before the
trial court dismissed the prior case, 2905 Fannin did not amend its petition. Instead,
just over a month later, on March 17, 2023, 2905 Fannin filed a second lawsuit
against Hong-An, Tran, and the Tran Law Firm. Initially, 2905 Fannin alleged that
the appellants breached the parties’ contract by allowing the superior lien holder to
foreclose on the property. On August 22, 2023, ten days after payments were due
pursuant to the settlement agreement’s payment schedule, 2905 Fannin added a
second, alternative, breach of contract claim based on the appellants’ default on
installment payments due August 12, 2023, as required by the settlement
agreement.
About two months later, 2905 Fannin moved for traditional summary
judgment on its breach of contract claims arguing that the foreclosure on the
property violated provisions of Notes One and Two and provisions of the second
and third lien deeds of trust. It also argued that the appellants defaulted on the
settlement agreement by failing to make scheduled payments beginning on August
7 12, 2023.6 The appellants maintained that the breach of contract claim based on
foreclosure was barred by res judicata because it could have been raised in the
prior lawsuit. As to the breach of contract claim based on default, the appellants
argued that 2905 Fannin breached the contracts first by filing suit for breach of
contract.
Although 2905 Fannin argued that its claims in this case were different from
its claims in the prior suit and arose after the settlement agreement was signed,
appellants argued, among other things: “Plaintiff cannot breach the settlement
agreement by suing Defendants on March 17, 2023, then demanding Defendants to
pay Plaintiff on August 12, 2023. The law certainly does not allow Plaintiff to have
[it] both ways. As such, due to Plaintiff’s breach, the required payments were
justifiably excused.”
On March 4, 2024, the trial court signed a final summary judgment holding
that the appellants breached by allowing PlainsCapital Bank to foreclose on the
property and by failing to make payments required to be made by August 12, 2023.
The court awarded actual damages of $798,482.33 plus $9,352.12 in trial
attorney’s fees and $266 in costs of court. After the trial court denied the
appellants’ motion for a new trial, this appeal followed.
6 Because the measure of damages was the same for both claims and 2905 Fannin was entitled to just one recovery, 2905 Fannin only needed to prevail on one of the two alternative theories to be entitled to summary judgment. 8 Analysis
The appellants challenge the summary judgment on two grounds. First, they
argue that 2905 Fannin’s claims are barred by res judicata because they arose from
the same legal relationship based on Notes One and Two and before the final
judgment in the prior lawsuit. Second, they argue that genuine issues of material
fact preclude summary judgment because they “vigorously protested the
foreclosure” and 2905 Fannin breached the agreement first.
The breach of contract claim based on failure to make scheduled payments
as per the settlement agreement undisputedly arose only after the final judgment in
the prior lawsuit. Therefore, regardless of whether 2905 Fannin’s other claims
were barred by res judicata, this claim would still stand. We affirm the district
court’s grant of summary judgment based on appellant’s default on the settlement
I. We review summary-judgment rulings de novo.
We review summary judgment rulings de novo. Mann Frankfort Stein &
Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). A party moving
for traditional summary judgment must show that no genuine issue of material fact
exists and that it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c);
see Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 216 (Tex. 2003).
9 “An affirmative defense prevents the granting of a summary judgment only if each
element of the affirmative defense is supported by summary judgment evidence.”
Fortitude Energy, LLC v. Sooner Pipe LLC, 564 S.W.3d 167, 180 (Tex. App.—
Houston [1st Dist.] 2018, no pet.). “A party raising an affirmative defense in
opposition to a summary judgment motion must either (1) present a disputed fact
issue on the opposing party’s failure to satisfy its own summary judgment burden
of proof or (2) establish the existence of a fact issue on each element of his
affirmative defense.” Id.
II. 2905 Fannin conclusively established its breach of contract claim, and appellants did not raise a genuine question of material fact.
In its motion for summary judgment, 2905 Fannin argued that appellants
defaulted on payments due August 12, 2023 “under the Settlement Agreement and
resulting Note One and Note Two Modification Agreements.” To demonstrate its
entitlement to summary judgment, 2905 Fannin was required to produce evidence
that conclusively demonstrated each essential element of a breach of contract
claim, namely: (1) the existence of a valid contract between the plaintiff and the
defendant; (2) the plaintiff’s performance or tendered performance; (3) the
defendant’s breach of the contract; and (4) the plaintiff’s damages as a result of the
breach. See Prime Prods., Inc. v. S.S.I. Plastics, Inc., 97 S.W.3d 631, 636 (Tex.
App.—Houston [1st Dist.] 2002, pet. denied).
10 2905 Fannin’s summary-judgment evidence included the Settlement
Agreement and the second and third lien modification renewal, modification, and
extension agreements, which 2905 Fannin referred to as the “Note One and Note
Two Modification Agreements.” Appellants did not dispute the existence and
validity of these agreements. Thus, the first essential element of a breach of
contract claim—the existence of a valid contract—is conclusively established. See
Prime Prods., 97 S.W.3d at 636.
In both the second and third lien modification, renewal, and extension
agreements, 2905 Fannin agreed to capitalize the existing debt, stop interest from
accruing at 18.00% (the “Default Interest Rate”) as of January 12, 2023, fix the
annual, pre-default interest rate at 8.00%, and extend the maturity date to
December 31, 2025. As 2905 Fannin’s suit is based on the failure to make
scheduled payments based on this formula, we conclude that 2905 Fannin tendered
performance under the contracts, establishing the second essential element of its
breach of contract claim. See id.
2905 Fannin’s summary-judgment evidence included an affidavit from Eric
Schneider, an authorized representative of 2905 Fannin. He stated that appellants
breached the contract, which he specified included the settlement agreement and
the two modification, extension, and renewal agreements, “by failing to pay the
payments as they came due starting on August 12, 2023.” This conclusively
11 establishes the third essential element of a breach of contract claim, the appellants’
breach. See id. In addition, Schneider explained that by entering into the settlement
agreement and the two modification, extension, and renewal agreements, 2905
Fannin gave up its right to foreclose at that time, extended the maturity date,
lowered the interest rate in exchange for appellants’ promise to pay in the future.
He stated that, as of September 25, 2023, the total amount on Note One was
$600,464.40 and Note Two was $297,022.33. This conclusively establishes the
final element of breach of contract, 2905 Fannin’s damages. See id.
In response to the summary-judgment motion, the appellants provided no
evidence that contradicted 2905 Fannin’s proof. Thus, the appellants failed to raise
a genuine question of material fact on the essential elements of breach of contract.
Rather than showing a genuine issue of material fact, appellants argued that res
judicata barred the claim based on foreclosure and prior material breach excused
their failure to perform by paying scheduled amounts set forth in the modification,
renewal, and extension agreements.
“It is a fundamental principle of contract law that when one party to a
contract commits a material breach of that contract, the other party is discharged or
excused from further performance.” Mustang Pipeline Co., Inc. v. Driver Pipeline
Co., Inc., 134 S.W.3d 195, 196 (Tex. 2004). “The contention that a party to a
contract is excused from performance because of a prior material breach by the
12 other contracting party is an affirmative defense that must be affirmatively
pleaded.” Blackstone Med., Inc. v. Phoenix Surgicals, L.L.C., 470 S.W.3d 636, 646
(Tex. App.—Dallas 2015, no pet.); see, e.g., ACS Invs., Inc. v. McLaughlin, 943
S.W.2d 426, 431 (Tex. 1997) (“A party must plead and prove the affirmative
defense of legal justification or excuse.”).
The appellants did not plead prior material breach, but in their response to
the motion for summary judgment, they sought leave to plead affirmative defenses
of res judicata and excuse, and 2905 Fannin has responded to this argument.
Whether 2905 Fannin breached first by filing suit depends on whether the parties’
contract prohibited it, a question we review de novo. Sundown Energy LP v. HJSA
No. 3, Ltd. P’ship, 622 S.W.3d 884, 888 (Tex. 2021) (courts review contract
construction de novo with primary concern for giving effect to parties’ intent,
while considering context, and construing contracts to avoid rendering contract
language meaningless). Having reviewed the relevant documents, we conclude that
they do not prohibit 2905 Fannin from filing suit.
The settlement agreement included mutual releases, but the release by 2905
Fannin expressly excluded “any obligations recognized or created by this
Agreement or the Second Mortgage, Third Mortgage, Second Mortgage Personal
Guaranty, Third Mortgage Personal Guaranty, and/or any and all modifications,
renewals, and/or re-arrangements thereof.” The modification, renewal, and
13 extension agreements expressly provided that they did not release claims or impair
rights provided by Notes One or Two, the deeds of trust, or any prior extension,
renewal, or modification agreements.7 Notes One and Two expressly reserved to
the Payee [now, 2905 Fannin] all legal and equitable remedies in case of default.
Both notes provide for attorney’s fees if the “Payee” retains an attorney in
7 For example, the Second Lien Modification, Renewal, and Extension Agreement provided:
(a) All covenants, agreements, stipulations, and conditions in the Second Lien Promissory Note and Second Lien Deed of Trust shall be and remain in full force and effect, except as herein modified, and none of the Borrower’s obligations or liabilities under the Second Lien Promissory Note and Second Lien Deed of Trust shall be diminished or released by any provisions hereof. Nor shall this Modification Agreement in any way impair, diminish, or affect any of Note Holder’s rights under or remedies available under the Second Lien Promissory Note and Second Lien Deed of Trust, whether such rights or remedies arise thereunder or by operation of law. Also, this Modification Agreement does not impair in any way, any Personal Guaranty.
(c) [sic] Borrower has no right of set-off or counterclaim, or any defense to the obligations of the Second Lien Promissory Note and Second Lien Deed of Trust.
(d) Nothing in this Modification Agreement shall be understood or construed to be a satisfaction or release in whole or in part of the Second Lien Promissory Note and/or Second Lien Deed of Trust, Loan Agreement, or any prior extension, renewal, or other agreement.
The Third Lien Modification, Renewal, and Extension agreement included similar terms. 14 connection with any default or to collect, enforce, or defend the note at maturity in
a lawsuit or other legal proceeding.
Having considered the contract language, we conclude that nothing in the
parties’ agreements prohibits 2905 Fannin from filing a breach of contract lawsuit.
See Sundown Energy, 622 S.W.3d at 888. Rather, the parties contemplated that
2905 Fannin might file a lawsuit as a remedy for default. Accordingly, we further
conclude that the appellants failed to establish a fact issue on their affirmative
defense because they provided no evidence that showed the existence of a valid
contract that prohibited 2905 Fannin from filing suit. See Fortitude Energy, 564
S.W.3d at 180.
We hold that the trial court did not err by granting summary judgment.
Conclusion
We affirm the judgment of the trial court.
Susanna Dokupil Justice
Panel consists of Chief Justice Adams, and Justices Morgan and Dokupil.