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Date: 10-26-2020
Case Style:
HTS Services, Inc. v. US-UK International Supply Group,LLC Jean Vallet Mobioh and David J. Marlborough
Case Number: 01-19-00558-CV
Judge: Julie Countiss
Court: Court of Appeals
For The
First District of Texas
Plaintiff's Attorney:
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Defendant's Attorney:
Description:
Houston TX - Civil lawyer represented defendant HTS Services contending that the trial court erred in entering a take-nothing judgment on its claim against appellees.
In its petition, HTS Services alleged that on February 27, 2018, US-UK
International signed a promissory note to repay HTS Services $69,581 by May 29,
2018. Mobioh, the president of US-UK International, and Marlborough, the chief
financial officer of US-UK International, guaranteed US-UK International’s
obligations under the promissory note. US-UK International did not make any
payments to HTS Services as required by the promissory note. HTS Services sued
appellees to collect on the promissory note and sought monetary damages in the
amount of $69.581, pre- and post-judgment interest, attorney’s fees, and costs.
Appellees answered, generally denying the allegations in HTS Services’s
petition and asserting certain defenses, including a verified denial alleging failure of
consideration and the affirmative defense of duress.
At trial, the trial court admitted into evidence the promissory note signed by
HTS Services and US-UK International as well as by Mobioh and Marlborough as
guarantors. The note states:
As of the 27th day of February, 2018, hereinafter known as the “Start
Date”, U[S]-U[K] International Supply Group, LLC, hereinafter known
as the “Borrower”, has received and promises to pay back HTS
Services, Inc., hereinafter known as the “Lender,” the principal sum of
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Sixty-Nine Thousand Five Hundred Eighty-One and 00/100 US Dollars
($69,581.00) with interest accruing on the unpaid balance at a rate of
five percent (5%) per annum, pursuant to the terms of this Promissory
Note, hereinafter known as the “Note[.]”
1. PAYMENTS: The full balance of this Note, including all
accrued interest and late fees, is due and payable on the 29th day
of May, 2018, hereinafter known as the “Due Date.”
2. SECURITY:
UNSECURE – There shall be NO SECURITY provided
in this Note.
. . . .
14. COSIGNERS:
CONSIGNERS – This Note shall have two Cosigners
known as Jean Vallet Mobioh (President of Borrower) and David J.
Marlborough (CFO of Borrower), hereinafter known as the
“Cosigners,” and agree to the liabilities and obligations on behalf of the
Borrower under the terms of this Note. If the Borrower does not make
payment, the Cosigners shall be personally responsible and, jointly and
severally, are guaranteeing the payment of the principal, late fees, and
all accrued interest under the terms of this Note.
Tarek Morsi, the president of HTS Services, testified that the amount of the
promissory note was “$69,081 [sic]” and it was signed by US-UK International and
by Mobioh and Marlborough as guarantors.
According to Morsi, HTS Services had previously sold certain items to
US-UK International. That transaction pre-dated the February 27, 2018 promissory
note. Because HTS Services did not receive payment for the items it had sold, it
held the items locked in its containers. US-UK International owed HTS Services
4
more than $69,000 for the items US-UK International had purchased. Morsi stated
that HTS Services refused to release the purchased items to US-UK International
unless US-UK International signed the promissory note. The parties then signed the
promissory note.
Morsi further testified that HTS Services never loaned US-UK International
$69,581 as described in the terms of the promissory note. Instead, Morsi claimed
that the $69,581 referenced in the note was supposed to reflect the value of the items
that HTS Services had previously sold to US-UK International. But the promissory
note did not state that it was for “past services rendered,” and the promissory note
was never amended to reflect that it would cover “past services rendered” or that it
was not a loan of money.
Standard of Review
In an appeal of a judgment rendered after a bench trial, when the trial court
does not file findings of fact or conclusions of law, we imply that the trial court made
all necessary findings to support its judgment.1 BMC Software Belg., N.V. v.
Marchand, 83 S.W.3d 789, 795 (Tex. 2002); see also Rahman v. Parvin, No.
1 Although HTS Services filed a request for findings of fact and conclusions of law
and a notice of past due findings of fact and conclusions of law, the trial court never
filed any findings of fact or conclusions of law. See TEX. R. CIV. P. 296, 297; see
also Rahman v. Parvin, No. 01-19-00502-CV, 2020 WL 4210492, at *3 (Tex.
App.—Houston [1st Dist.] July 23, 2020, no pet.) (mem. op.). HTS Services does
not assert on appeal that the trial court erred in failing to file findings of fact and
conclusions of law.
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01-19-00502-CV, 2020 WL 4210492, at *3 (Tex. App.—Houston [1st Dist.] July
23, 2020, no pet.) (mem. op.). When a clerk’s record and reporter’s record are filed,
the implied findings are not conclusive, and a party may challenge both the legal and
factual sufficiency of the evidence supporting those findings. BMC Software Belg.,
83 S.W.3d at 795; see also Rahman, 2020 WL 4210492, at *3. The applicable
standards of review are the same as those applied to review jury findings. Briggs
Equip. Tr. v. Harris Cty. Appraisal Dist., 294 S.W.3d 667, 670 (Tex. App.—
Houston [1st Dist.] 2009, pet. denied). The trial court’s judgment must be affirmed
if it can be upheld on any legal theory finding support in the evidence. Worford v.
Stamper, 801 S.W.2d 108, 109 (Tex. 1990); Gainous v. Gainous, 219 S.W.3d 97,
103 (Tex. App.—Houston [1st Dist.] 2006, pet. denied).
When a party attacks the legal sufficiency of the evidence supporting an
adverse finding on an issue on which it did not have the burden of proof, it must
demonstrate on appeal that no evidence supports the adverse finding. Exxon Corp.
v. Emerald Oil & Gas, Co., 348 S.W.3d 194, 215 (Tex. 2011). We will sustain a
no-evidence challenge if the record shows: (1) a complete absence of evidence of a
vital fact, (2) the court is barred by the rules of law or evidence from giving weight
to the only evidence offered to prove a vital fact, (3) the evidence offered to prove a
vital fact is no more than a mere scintilla, or (4) the evidence conclusively establishes
the opposite of a vital fact. See City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex.
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2005). In contrast, when a party attacks the legal sufficiency of the evidence
supporting an adverse finding on an issue on which it did have the burden of proof,
it must show not only that no evidence supports the finding, but also that the
evidence conclusively proves the contrary. Dow Chem. Co. v. Francis, 46 S.W.3d
237, 241 (Tex. 2001). Under this standard, we reject the legal-sufficiency challenge
unless the evidence proves all vital facts in support of the party’s position as a matter
of law. Id.
When reviewing the evidence for legal sufficiency, we consider the evidence
in the light most favorable to the challenged finding, crediting favorable evidence if
a reasonable fact finder could and disregarding contrary evidence unless a
reasonable fact finder could not. City of Keller, 168 S.W.3d at 807. We are mindful
that the trial court, as the fact finder, was the sole judge of the credibility of the
witnesses and weight to be given their testimony. See id. at 819.
Promissory Note
In its sole issue, HTS Services argues that the trial court erred in entering a
take-nothing judgment on its claim against appellees to collect on a promissory note
because it established its prima facie case and appellees did not establish any
defenses.2
2 Based on HTS Services’s briefing, we presume that HTS Services’s sole issue
challenges the legal sufficiency of the evidence to support the trial court’s judgment.
See McKeehan v. Wilmington Sav. Fund Soc’y, FSB, 554 S.W.3d 692, 697–98 (Tex.
7
To prevail on its claim to collect on a promissory note, HTS Services was
required to prove: (1) the existence of the promissory note in question, (2) that
appellees signed the note, (3) that HTS Services is the owner or holder of the note,
and (4) that a certain balance is due and owing on the note. Manley v. Wachovia
Small Bus. Capital, 349 S.W.3d 233, 237 (Tex. App.—Dallas 2011, pet. denied);
Wells Fargo Bank, N.A. v. Ballestas, 355 S.W.3d 187, 191 (Tex. App.—Houston
[1st Dist.] 2011, no pet.). Once HTS Services established these facts, it was entitled
to recover only if appellees, who signed the note, failed to establish a defense.
UMLIC VP LLC v. T & M Sales & Envtl. Sys., Inc., 176 S.W.3d 595, 611 (Tex.
App.—Corpus Christi–Edinburg 2005, pet. denied); Groschke v. Gabriel, 824
S.W.2d 607, 610 (Tex. App.—Houston [1st Dist.] 1991, writ denied).
The parties do not appear to dispute the existence of the promissory note, that
appellees signed the note, or that HTS Services owns the note. Thus, our focus is on
the fourth element of HTS Services’s claim—whether there is a certain balance due
and owing on the note. Because the trial court did not file any findings of fact or
conclusions of law, we imply that the trial court made all necessary findings to
support its judgment—including that the trial court found that HTS Services did not
App.—Houston [1st Dist.] 2018, no pet.) (concluding appellant challenged legal
sufficiency of evidence based on review of brief and prayer for rendition of
judgment); see also Campbell v. DLJ Mortg. Capital, Inc., No. 01-18-01047-CV,
2020 WL 5048136, at *6 & n.6 (Tex. App.—Houston [1st Dist.] Aug. 27, 2020, no
pet.) (mem. op.).
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establish that a certain balance was due and owing on the promissory note. See
BMC Software Belg., 83 S.W.3d at 795; see also Rahman, 2020 WL 4210492, at *3.
When a party attacks the legal sufficiency of the evidence supporting an adverse
finding on an issue on which it had the burden of proof, it must show not only that
no evidence supports the finding, but also that the evidence conclusively proves the
contrary. Dow Chem. Co., 46 S.W.3d at 241. Under this standard, we reject HTS
Services’s legal-sufficiency challenge unless the evidence proves all vital facts in
support of HTS Services’s position as a matter of law. Id.
The trial court admitted into evidence the promissory note signed by HTS
Services and US-UK International as well as by Mobioh and Marlborough as
guarantors. The note states:
As of the 27th day of February, 2018, hereinafter known as the “Start
Date”, U[S]-U[K] International Supply Group, LLC, hereinafter known
as the “Borrower”, has received and promises to pay back HTS
Services, Inc., hereinafter known as the “Lender,” the principal sum of
Sixty-Nine Thousand Five Hundred Eighty-One and 00/100 US Dollars
($69,581.00) with interest accruing on the unpaid balance at a rate of
five percent (5%) per annum, pursuant to the terms of this Promissory
Note, hereinafter known as the “Note[.]”
1. PAYMENTS: The full balance of this Note, including all accrued
interest and late fees, is due and payable on the 29th day of May, 2018,
hereinafter known as the “Due Date.”
(First emphasis added.) Under the unambiguous terms of the promissory note, HTS
Services was to loan US-UK International $69,581, which US-UK International
9
would then be responsible for paying back, along with accrued interest and late fees.3
Morsi, the president of HTS Services, testified, however, that HTS Services never
loaned US-UK International $69,581 as described in the terms of the promissory
note. Under such circumstances, there would be no money for US-UK International
to pay back under the promissory note and nothing would be due and owing on the
note.
To collect on a promissory note, the owner or holder of the note must establish
that a certain balance is due and owing on the note. See Cadle Co. v. Regency
Homes, Inc., 21 S.W.3d 670, 678 (Tex. App.—Austin 2000, pet. denied);
Commercial Servs. of Perry, Inc. v. Wooldridge, 968 S.W.2d 560, 564 (Tex. App.—
Fort Worth 1998, no pet.); cf. Blankenship II v. Robins, 899 S.W.2d 236, 238 (Tex.
App.—Houston [14th Dist.] 1994, no writ). Here, we conclude that HTS Services
has failed to establish as a matter of law that a certain balance was due and owing
on the promissory note, and thus, that it was not entitled to recover on its claim to
collect on a promissory note.
4
See Dow Chem. Co., 46 S.W.3d at 241. We hold that
the trial court did not err in entering a take-nothing judgment in favor of appellees.
We overrule HTS Services’s sole issue.
3 HTS Services does not assert in its briefing that the promissory note is ambiguous.
4 We need not address HTS Services’s argument that the trial court erred in entering
a take-nothing judgment on its claim against appellees to collect on a promissory
note because appellees did not establish any defenses. See TEX. R. APP. P. 47.1.
Outcome: We affirm the judgment of the trial court.
Plaintiff's Experts:
Defendant's Experts:
Comments: