On remand from the Texas Supreme Court, the Dallas Court of Appeals has reaffirmed its earlier decision affirming a judgment for the bank in a sizable loan default case.
Ja-Lynn Kuo, JLKuo, PLLC, Subho Mullick, SM ER, PLC, Salima Amin Thobani, and SRG Consulting, LLC v. Regions Bank (No. 05-22-01325-CV; January 21, 2026) arose a loan default. Regions Bank made a construction loan of $2,500,000 to Ascent Realty, LLC for the construction of an emergency medical facility in Dallas. A subsequent revolving loan was issued in the amount of $600,000 to Ascent Group, LLC for the operation of the business. Plaintiffs executed unconditional guarantees in connection with each loan to guarantee a certain percentage of the principal balance of the respective notes. In 2016 Ascent filed for bankruptcy, and Uptown ER, LLC purchased the assets and assumed the obligations under the loans under a debt modification agreement (DAMA). Uptown defaulted, resulting in the bank bringing suit against Uptown and other guarantors for breach of contract. The bank subsequently added Defendants to the suit. In response, Defendants added affirmative defenses of offset and exhaustion of collection efforts from the primary guarantors.
The bank moved for summary judgment on the above claims and defenses. The trial court granted the bank the amounts guaranteed by each Defendant, per diem interest, attorney’s fees, post-judgment interest, and outstanding interest on the loans. Meanwhile, the parties reached an agreed judgment for the principal of both loans, outstanding interest, pre-judgment interest, and attorney’s fees. Defendants appealed and sought mandamus relief from the trial court’s order compelling post-judgment discovery. The court of appeals affirmed, holding that Defendants failed to meet their burden to bring forward summary judgment evidence to allow the court to review their claims for harmful error. Defendants filed a petition for review, which SCOTX granted. SCOTX reversed and remanded to the court of appeals for further consideration based on the agreement of the parties that the summary judgment evidence considered by the trial court was properly included in the appellate record.
In an opinion by Justice Kennedy on remand, the court affirmed its earlier conclusions that the trial court’s judgment was a final, appealable judgment and the DAMA did not entitle Defendants to an offset “such that the trial court’s ruling was erroneous.” Defendants challenged the sufficiency of the evidence conclusively proving the bank’s claim that it satisfied conditions precedent to its breach of contract claim against Kuo, “specifically making demand on (the settling defendants’) before taking action to enforce [Defendants’] guarantees.” In its prior decision, the court had ruled that Defendants were not parties to the DAMA, nor were they third-party beneficiaries. Based on that ruling, the court concluded that the bank was not required to conclusively prove that it satisfied conditions precedent to its claim againt Kuo.
Next, Defendants argued that the bank didn’t conclusively prove its damages. The trial court awarded damages against each of the six defendants and declared them jointly and severally liable for additional outstanding interest, as well as per diem interest for the construction loan and the revolving loan. Total damages awarded amounted came to more than $1.4 million for principal of the construction loan and another $305,000 or so for the revolving loan principal. The trial court based its award testimony of the bank’s vice president and documentation of the loan history. The court deemed this evidence sufficient to support the judgment. As to the attorney’s fees award, Defendants argued that the bank did not prove attorney hours worked or segregate work done for prosecuting claims against Defendants and Defendants’ counterclaims. Here Defendants contractually agreed that the bank could recover attorney’s fees from them, so the question became the adequacy of the bank’s evidence. Based on the testimony of the bank’s counsel and the extensive billing records he produced, the court concluded that the evidence was sufficient. And the parties’ agreement didn’t require the bank to segregate fees but instead allowed it to recover its fees for enforcing the revolving and construction loan and for “caus[ing] satisfaction of” Defendants liability under their guaranties. So, despite going up to SCOTX and coming back down, the decision was the same.
TCJL Legal Intern Satchel Williams researched and prepared the first draft of this article.
