                                                                         ACCEPTED
                                                                     03-15-00261-CV
                                                                             7120403
                                                          THIRD COURT OF APPEALS
                                                                     AUSTIN, TEXAS
                                                               9/28/2015 11:06:03 AM
                                                                   JEFFREY D. KYLE
                                                                              CLERK
             No. 03-15-00261-CV

IN THE THIRD DISTRICT COURT OF APPEALS FILED IN
           AT AUSTIN, TEXAS        3rd COURT OF APPEALS
                                               AUSTIN, TEXAS
                                          9/28/2015 11:06:03 AM
                                             JEFFREY D. KYLE
THOMAS D. YOUNG A/K/A T. DAVID         YOUNG, Clerk
                              Appellant,
                 v.

      JPMORGAN CHASE BANK, N.A.
                             Appellee.


    Appealed from the 126th District Court,
            Travis County, Texas
    The Honorable Darlene Byrne, Presiding

          BRIEF FOR APPELLEE


            Marcie L. Schout (Lead Counsel)
            Texas State Bar No. 24027960
            Wm. Lance Lewis
            Texas State Bar No. 12314560
            QUILLING, SELANDER, LOWNDS,
               WINSLETT & MOSER, P.C.
            2001 Bryan Street, Suite 1800
            Dallas, Texas 75201
            (214) 871-2100 (Telephone)
            (214) 871-2111 (Facsimile)
            mschout@qslwm.com
            llewis@qslwm.com

            ATTORNEYS FOR APPELLEE
            JPMORGAN CHASE BANK, N.A.
                IDENTITY OF PARTIES AND COUNSEL

Appellant:                         Appellants’ Counsel:
Thomas D. Young                    Stephen Casey
a/k/a T. David Young               Casey Law Office, P.C.
                                   595 Round Rock West Drive
                                   Suite 102
                                   Round Rock, Texas 78681

Appellee:                          Appellee’s Counsel:
JPMorgan Chase Bank, N.A.          Marcie L. Schout
                                   Wm. Lance Lewis
                                   Quilling, Selander, Lownds,
                                      Winslett & Moser, P.C.
                                   2001 Bryan Street, Suite 1800
                                   Dallas, Texas 75201




                               i
                                          TABLE OF CONTENTS

                                                                                                                      Page
Identity of Parties and Counsel ...................................................................................i
Table of Contents ...................................................................................................... ii

Index of Authorities ..................................................................................................iv
Statement of the Case................................................................................................vi
Statement Regarding Oral Argument ..................................................................... vii

Issues Presented for Review .................................................................................. viii
Statement of Facts ......................................................................................................1

Summary of the Argument.........................................................................................4
Standard of Review ....................................................................................................6

Argument and Authorities..........................................................................................7

I.       The judgment for judicial foreclosure can be affirmed on grounds that
         do not raise the “time is of the essence” arguments addressed by
         Young...............................................................................................................7

         A.       By failing to address the alternate ground for the
                  summary judgment, Young waived any error, and the
                  summary judgment should be affirmed................................................. 8

         B.       JPMC established its entitlement to judicial foreclosure
                  under the terms of the Security Instrument. .......................................... 9

II.      The entirety of the Settlement Agreement and the actions of the
         parties establish that time was of the essence, such that Young
         breached the Settlement Agreement. .............................................................10

         A.       To give each provision in the Settlement Agreement
                  meaning, the August 1, 2014 deadline must be
                  interpreted as a material term. .............................................................12


                                                             ii
         B.        The parties’ actions further demonstrate that the parties
                   intended the August 1, 2014 deadline to be material. .........................18

         C.        It is appropriate for a trial court to determine whether
                   time is of the essence as a matter of law under
                   circumstances like those presented here. ............................................19

III.     The trial court did not abuse its discretion by rejecting Young’s
         unclean hands arguments where JPMC fully performed and was
         simply seeking to enforce the express provisions of the Settlement
         Agreement......................................................................................................20

Prayer .......................................................................................................................23




                                                              iii
                                       INDEX OF AUTHORITIES

                                                                                                                     Page

CASES
Argos Res., Inc. v. May Petroleum Inc.,
      693 S.W.2d 663 (Tex. App.—Dallas 1985, writ ref’d n.r.e.)........................17

Builders Sand, Inc. v. Turtur,
      678 S.W.2d 115 (Tex. App.—Houston [14th Dist.] 1984, no
      writ)................................................................................................................19
Cincinnati Life Ins. Co. v. Cates,
      927 S.W.2d 623 (Tex. 1996) .......................................................................6, 7
Cire v. Cummings,
      134 S.W.3d 835 (Tex. 2004) ...........................................................................7

Deep Nines, Inc. v. McAfee, Inc.,
     246 S.W.3d 842 (Tex. App.—Dallas 2008, no pet.) .................. 11, 14, 15, 20
Dunnagan v. Watson,
     204 S.W.3d 30 (Tex. App.—Fort Worth 2006, pet. denied) .....................7, 21
FPL Energy, LLC v. TXU Portfolio Mgmt. Co., L.P.,
     426 S.W.3d 59 (Tex. 2014) ...........................................................................14

Hall v. Lone Star Gas Co.,
      954 S.W.2d 174 (Tex. App.—Austin 1997, pet. denied) ..............................20

Handwerker Hren Legal Search, Inc. v. Recruiting Partners GP, Inc.,
     03-13-00239-CV, 2015 WL 4999054 (Tex. App.—Austin Aug.
     19, 2015, no. pet. h.) ........................................................................................7
In re Escarent Entities, L.P.,
       423 F. Appx. 462 (5th Cir. 2011) ........................................................... 14, 15

Lazy M Ranch, Ltd. v. TXI Operations, LP,
      978 S.W.2d 678 (Tex. App.—Austin 1998, pet. denied) ..............................20




                                                             iv
Lockhart-Hutchens v. Bergstrom,
     434 S.W.2d 453 (Tex. Civ. App.—Austin 1968, writ ref’d
     n.r.e.) ..............................................................................................................20
Mustang Amusements, Inc. v. Sinclair,
     10-07-00362-CV, 2009 WL 3487796 (Tex. App.—Waco Oct.
     28, 2009, no pet.) .............................................................................................7

Neely v. Wilson,
      418 S.W.3d 52 (Tex. 2013) .............................................................................6

Paciwest, Inc. v. Warner Alan Properties, LLC,
     266 S.W.3d 559 (Tex. App.—Fort Worth 2008, pet. denied) .........................7

Rinard v. Bank of Am.,
      349 S.W.3d 148 (Tex. App.—El Paso 2011, no pet.) ...............................9, 10
Secure Comm, Inc. v. Anderson,
      31 S.W.3d 428 (Tex. App.—Austin 2000, no pet.) .....................................8, 9
Seismic & Digital Concepts, Inc. v. Digital Res. Corp.,
      590 S.W.2d 718 (Tex. Civ. App.—Houston [1st Dist.] 1979, no
      writ)................................................................................................................17

Shaw v. Kennedy, Ltd.,
     879 S.W.2d 240 (Tex. App.—Amarillo 1994, no writ) ................................18
Siderius, Inc. v. Wallace Co.,
      583 S.W.2d 852 (Tex. Civ. App.—Tyler 1979, no writ.) .............................19

State v. Ninety Thousand Two Hundred Thirty-Five Dollars & No
       Cents in U.S. Currency ($90,235),
       390 S.W.3d 289 (Tex. 2013) ...........................................................................6

Sw. Bell Tel., L.P. v. Emmett,
      459 S.W.3d 578 (Tex. 2015) ...........................................................................6




                                                             v
                         STATEMENT OF THE CASE
      JPMorgan Chase Bank, N.A. (“JPMC”) filed this suit against Thomas D.

Young a/k/a T. David Young (“Young”) in February 2012 seeking to foreclose on

the lien securing a home equity loan. CR 4. In April 2014, the parties entered into

a settlement agreement, which provided for the entry of an agreed judgment of

foreclosure if a short payoff was not received by August 1, 2014. CR 32-37. After

Young did not make the short payoff payment and refused to sign the agreed

judgment of foreclosure, JPMC filed an amended petition asserting a claim for

breach of contract and seeking to enforce the terms of the settlement agreement.

CR 52-57. JPMC filed a motion for summary judgment based on Young’s breach

of the settlement agreement and breach of the applicable note and security

instrument. CR 168. The trial court granted the motion for summary judgment

and entered judgment permitting JPMC to proceed with foreclosure. CR 350.




                                        vi
              STATEMENT REGARDING ORAL ARGUMENT
      Oral argument is not warranted in this case. Appellee does not believe that

oral argument will significantly impact the decisional process of the Court. If

however, the Court believes oral argument would be helpful and oral argument is

held, Appellee desires to participate therein.




                                          vii
             ISSUES PRESENTED FOR REVIEW
1.   Should the summary judgment granting judicial foreclosure be
     affirmed on the independent ground of breach of the Security
     Instrument where (1) this ground was raised in the summary judgment
     motion and the summary judgment order, (2) Young failed to address
     this independent ground and accordingly waived any issues relating to
     it, and (3) the summary judgment evidence conclusively established
     breach of the Security Instrument such that JPMC was entitled to
     summary judgment of judicial foreclosure?
2.   Was Young’s failure to comply with the deadline for tendering the
     short payoff a material breach entitling JPMC to specific performance
     where the entirety of the Settlement Agreement and the actions of the
     parties established that time was of the essence with regard to the
     tendering of the short payoff?
3.   Did the trial court abuse its discretion in granting JPMC specific
     performance where JPMC fully performed under the terms of the
     Settlement Agreement and Young’s failure to satisfy the short payoff
     deadline was not due to any unlawful or inequitable conduct by
     JPMC?




                               viii
                           STATEMENT OF FACTS
      On or about December 19, 2000, Young obtained a loan (the “Loan”)

evidenced by a Texas Home Equity Note (the “Note”) in the original principal

amount of $337,500, secured by a Texas Home Equity Security Instrument

(“Security Instrument”), encumbering property commonly known as 10336 West

Darleen Drive, Leander, Texas 78641 (the “Property”). CR 187-199. JPMC is the

mortgage servicer for the the Loan on behalf of Deutsche Bank National Trust

Company f/k/a Bankers Trust Company of California, N.A., as Trustee for Long

Beach Mortgage Loan Trust 2001-1. CR 246.

      Young defaulted on the loan by failing to make the payment due May 1,

2004 and the payments due thereafter. CR 185. JPMC attempted to foreclose in

2005, but its efforts were blocked when Young filed a meritless lawsuit. CR 324,

328-331, 304-307.

      On February 29, 2012, JPMC filed this suit against Young seeking judicial

foreclosure of the Security Instrument. CR 4. In April 2014, JPMC and Young

signed a Confidential Settlement Agreement and Release of Claims (“Settlement

Agreement”) to avoid the risk, uncertainty, and cost of litigation. CR 220. The case

was abated to allow for the parties to perform under the Settlement Agreement.

CR 27.




                                         1
      Under paragraph 1.1 of the Settlement Agreement, Young had the

opportunity to pay off the Loan at a reduced sum:

            Young agrees to sell or obtain a 3rd party take-out
            refinance of the indebtedness secured by the Deutsche
            Bank Lien on or before August 1, 2014, and Deutsche
            Bank agrees to accept a short payoff of the Loan in the
            amount of $220,000 on or before August 1, 2014
            (“Settlement Funds”). Specifically, Young has designated
            the title company Netco, Inc., 7719 Wood Hollow Drive
            Ste. 157, Austin, TX 78731 (“Title Company”) and
            escrow officer Dewayne Naumann (“Escrow Agent”) to
            close the sale or refinance of the Property. Upon closing
            of the Property sale or refinance, Young agrees that the
            Escrow Agent shall promptly distribute $220,000 of the
            sale or 3rd party take-out refinance proceeds (“Settlement
            Funds”) to Deutsche Bank c/o Wm. Lance Lewis,
            QSLWM, P.C., 2001 Bryan Street, Suite 1800, Dallas,
            Texas 75201.

CR 221. If Young did not tender the Settlement Funds by August 1, 2014, he

agreed to return an agreed judgment for foreclosure:

            If Young fails to tender the Settlement Funds in
            accordance with Paragraph 1.1, Young agrees that
            Deutsche Bank shall have judgment for foreclosure.
            Young, through and under his attorney, will sign and
            return a copy of a judgment for foreclosure under the
            Texas Home Equity Security Instrument in the form
            attached as Exhibit C no later than August 8, 2014.

CR 221.

      In accordance with the terms of the Settlement Agreement, on May 23,

2014, JPMC delivered to the Title Company and Escrow Officer a Payoff Letter

good through August 1, 2014 and Closing Instructions. CR 243, 245.

                                        2
      Young then failed to perform under the Settlement Agreement. On July 29,

2014, Young determined he could not timely tender the Settlement Funds to JPMC

and requested a 31-day extension of the deadline for him to obtain the Settlement

Funds, and asked for a new payoff letter good through August 31, 2014. CR 251.

On August 5, 2014, JPMC advised it would not modify the terms of the Settlement

Agreement by extending the deadline by which it would accept the Settlement

Funds. CR 252. The Settlement Agreement required Young to return the executed

Agreed Judgment for foreclosure by August 8, 2014. CR 221. On August 7, 2014,

Young made “clear” that he “will not sign” the Agreed Judgment, and advised that

JPMC would have to seek relief from the court. CR 260. Because Young failed to

sign the Agreed Judgment, JPMC filed a Second Amended Petition adding a claim

for breach of the Settlement Agreement and seeking specific performance of same

through the entry of an order for judicial foreclosure. CR 52-56.

      On September 30, 2014, JPMC sent a notice of default to Young advising

that the total amount of $533,619.16 was past due. CR 270-272. Young failed to

cure the default, and on October 31, 2014, JPMC sent a notice of acceleration.

CR 274-275. The Loan remained in default at the time JPMC’s motion for

summary judgment was filed and considered. CR 240-241.




                                         3
                      SUMMARY OF THE ARGUMENT
      After years of attempting to complete a foreclosure, JPMC entered into a

Settlement Agreement with Young. Under the terms of that agreement, Young

was given an opportunity to pay off the Loan for a significantly reduced amount, if

such payment was made by August 1, 2014. If Young did not take advantage of

this opportunity, he agreed that this foreclosure odyssey would come to an end, and

JPMC would be entitled to an agreed judgment for foreclosure. It is undisputed

that Young did not comply with the August 1, 2014 deadline for the short payoff

and he refused to execute the agreed judgment for foreclosure under the Settlement

Agreement. Given that, JPMC was entitled to a judgment for specific performance

of the Settlement Agreement.

      Young attempts to avoid this conclusion, and further prolong this matter, by

arguing that he was not required to comply with the August 1 deadline because

time was not of the essence. This argument is belied by the terms of the Settlement

Agreement which made it clear that penalties, in the form of an agreed foreclosure

and the voiding of a release provided by JPMC, would be imposed if the short

payoff was not received by August 1. In order for these provisions to be given

meaning, the August 1 deadline must be enforced as a material term.

      Young also relies on an unclean hands argument to avoid specific

performance. However, nothing about JPMC’s conduct warrants such a finding.



                                        4
The doctrine of unclean hands precludes equitable relief to a party who utilizes

unlawful or inequitable means in connection with the transaction at issue. Here,

the facts established that JPMC provided the required payoff quote in May 2014,

months before the payoff was due, and there is no indication that JPMC interfered

with Young’s ability to obtain financing to fund the short payoff by August 1,

2014. Young points to no controverting evidence and instead argues that JPMC

should have been required to modify the deadline for the short payoff. Nothing

about JPMC’s insistence on the benefit it had bargained for amounts to unlawful or

inequitable conduct. As a result, the trial court did not abuse its discretion in

granting specific performance.

      It is not necessary for the Court to even reach the issues pertaining to

specific performance because the trial court’s order of judicial foreclosure was also

premised on JPMC’s claim for breach of the Security Instrument. Young failed to

address this independent ground in his opening brief and as a result waived this

issue. In addition, the undisputed facts demonstrate that JPMC established the

facts necessary to support an order of judicial foreclosure based on Young’s

default and breach of the Security Instrument. The summary judgment can be

affirmed on this independent ground.




                                         5
                           STANDARD OF REVIEW
      The granting of a motion for summary judgment is reviewed de novo. Sw.

Bell Tel., L.P. v. Emmett, 459 S.W.3d 578, 583 (Tex. 2015). The Court reviews

the summary judgment record “in the light most favorable to the nonmovant,

indulging every reasonable inference and resolving any doubts against the motion.”

Neely v. Wilson, 418 S.W.3d 52, 59-60 (Tex. 2013).           “A party moving for

traditional summary judgment has the burden to prove that there is no genuine

issue of material fact and it is entitled to judgment as a matter of law.” State v.

Ninety Thousand Two Hundred Thirty-Five Dollars & No Cents in U.S. Currency

($90,235), 390 S.W.3d 289, 292 (Tex. 2013). On appeal, courts “should consider

all summary judgment grounds which the trial court expressly rules on and the

movant preserves for appellate review that are necessary for final disposition of the

appeal.” Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 626 (Tex. 1996). In

addition, “the appellate court may, in the interest of judicial economy, consider

other grounds that the movant preserved for review and that the trial court did not

rule on.” Id. at 624.

      The issue of whether to grant specific performance is left to the discretion of

the trial court, and the trial court’s ruling on whether unclean hands would bar

specific performance will only be overturned if there is an abuse of discretion.

Paciwest, Inc. v. Warner Alan Properties, LLC, 266 S.W.3d 559, 572 (Tex. App.—



                                         6
Fort Worth 2008, pet. denied); Dunnagan v. Watson, 204 S.W.3d 30, 41 (Tex.

App.—Fort Worth 2006, pet. denied); Mustang Amusements, Inc. v. Sinclair, 10-

07-00362-CV, 2009 WL 3487796, at *2 (Tex. App.—Waco Oct. 28, 2009, no

pet.). “The test for an abuse of discretion is not whether, in the opinion of the

reviewing court, the facts present an appropriate case for the trial court’s action,

but whether the court acted without reference to any guiding rules and principles.

The trial court’s ruling should be reversed only if it was arbitrary or unreasonable.”

Cire v. Cummings, 134 S.W.3d 835, 838-39 (Tex. 2004).


                      ARGUMENT AND AUTHORITIES

I.    The judgment for judicial foreclosure can be affirmed on grounds that
      do not raise the “time is of the essence” arguments addressed by Young.
      The Texas Supreme Court is clear that where a trial court grants summary

judgment based on one of multiple grounds raised by the movant, on appeal, the

court can affirm the judgment based on any ground raised by the movant in the

motion for summary judgment. Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623,

624 (Tex. 1996); Handwerker Hren Legal Search, Inc. v. Recruiting Partners GP,

Inc., 03-13-00239-CV, 2015 WL 4999054, at *2 (Tex. App.—Austin Aug. 19,

2015, no. pet. h.).

      Here, JPMC sought summary judgment of judicial foreclosure based on two

grounds. One ground related to the breach of the Settlement Agreement and

specific performance of the provisions related to the Agreed Judgment for Judicial

                                          7
Foreclosure. CR 174-176. The second ground related to breach of the Note and

Security Instrument and judicial foreclosure as the remedy for such breach.

CR 178-179. The judgment entered by the trial court does not specify the grounds

on which it was granted.       CR 350-352.     The trial court granted specific

performance by requiring Young to sign the Agreed Judgment for Judicial

Foreclosure attached to the Settlement Agreement. CR 350. In addition, the trial

court granted JPMC judgment in rem for judicial foreclosure as specified in the

Security Instrument. CR 350-351. As a result, the summary judgment in favor of

JPMC can be affirmed based upon the establishment of a claim for breach of the

Note and Security Instrument, without reaching the “time is of the essence” and

unclean hands issues asserted by Young with regard to the claim for specific

performance of the Settlement Agreement.

      A.    By failing to address the alternate ground for the summary
            judgment, Young waived any error, and the summary judgment
            should be affirmed.
      “Where a judgment may rest upon more than one ground, the party

aggrieved by the judgment must assign error to each ground or the judgment will

be affirmed on the ground to which no complaint is made. In such situations it is

said that the appellant has waived his right to complain of the ruling to which no

error was assigned.” Secure Comm, Inc. v. Anderson, 31 S.W.3d 428, 430-31

(Tex. App.—Austin 2000, no pet.). For example, in Secure Comm, the plaintiff



                                        8
asserted four causes of action against her former employer. Id. at 430. After a

bench trial, the court issued a judgment in favor of the plaintiff, but did not specify

on which of the plaintiff’s theories she prevailed. Id. On appeal, the former

employer only presented arguments about two of the four theories asserted by the

plaintiff. Id. at 430-31. By failing to present arguments as to these alternate

grounds, the former employer waived any possible error based on those grounds,

and the trial court’s judgment was affirmed. Id. at 431.

      Similarly here, the summary judgment was based on the alternate cause of

action of breach of the Note and Security Instrument. CR 178-179, 350-52. By

failing to brief any issues relating to this alternate ground, Young waived any

issues regarding this alternate ground, and the summary judgment should be

affirmed.    Moreover, as discussed below, the summary judgment evidence

established JPMC’s right to a foreclosure order.

      B.     JPMC established its entitlement to judicial foreclosure under the
             terms of the Security Instrument.
      The Security Instrument provides that upon Young’s default, JPMC may

obtain a court order and foreclose under the Security Instrument. CR 197. A

lender is entitled to judgment for judicial foreclosure if it proves the existence of a

debt; some part of the debt is due and unpaid; and “the property subject to the lien

is the same property on which it seeks to enforce the lien.” Rinard v. Bank of Am.,

349 S.W.3d 148, 152 (Tex. App.—El Paso 2011, no pet.) (citing Kyle v.


                                          9
Countrywide Home Loans, Inc., 232 S.W.3d 355, 362 (Tex. App.—Dallas 2007,

pet. denied). Additionally, a lender establishes its right to foreclosure where it

produces a copy of the note, a copy of the security instrument, provides notice of

intent to accelerate and an opportunity to cure, and establishes that the borrower

failed to cure the default. Id.

      Here, the undisputed evidence demonstrated JPMC was entitled to judicial

foreclosure of the Security Instrument. JPMC produced a copy of the Note and

Security Instrument, provided written notice of default and intent to accelerate and

an opportunity to cure, and established Young remains in default. CR 187-199,

240-241, 270-278. Because the Security Instrument provides for foreclosure upon

Young’s default, and JPMC provided all required notices, JPMC was entitled to

summary judgment for judicial foreclosure, and the trial court properly entered

judgment providing for an order of sale pursuant to Texas Rule of Civil Procedure

309. The summary judgment in JPMC’s favor can be affirmed on this independent

ground.

II.   The entirety of the Settlement Agreement and the actions of the parties
      establish that time was of the essence, such that Young breached the
      Settlement Agreement.
      Under the Settlement Agreement, “Deutsche Bank agree[d] to accept a short

payoff of the Loan in the amount of $220,000 on or before August 1, 2014.”

CR 221. The undisputed summary judgment evidence proves Young failed to



                                        10
tender the short payoff on or before August 1, 2014. CR 243. In addition, Young

agreed that if the Settlement Funds were not tendered in accordance with the

Settlement Agreement “Deutsche Bank shall have judgment for foreclosure” and

Young would “sign and return a copy of a judgment for foreclosure under the

Texas Home Equity Security Instrument in the form attached . . . no later than

August 8, 2014.” CR 221. Young failed to sign and return a copy of the agreed

judgment for foreclosure. CR 243-44. Young does not dispute these facts. Instead,

Young seeks to excuse his lack of compliance by arguing that time was not of the

essence in connection with the performance of the Settlement Agreement. Though

the Settlement Agreement does not contain the magic words “time is of the

essence,” the entirety of the Settlement Agreement and the actions of the parties

demonstrate that time was of the essence.

      “For timely performance to be a material term of the contract, the contract

must expressly make time of the essence or there must be something in the nature

or purpose of the contract and the circumstances surrounding it making it apparent

that the parties intended that time be of the essence.” Deep Nines, Inc. v. McAfee,

Inc., 246 S.W.3d 842, 846 (Tex. App.—Dallas 2008, no pet.). Even where the

contract does not use the phrase “time is of the essence”, a deadline can still be a

material term as a matter of law because the courts “do not construe contracts or

decide cases based on the inclusion or omission of ‘magic words.’” Id.


                                        11
      A.     To give each provision in the Settlement Agreement meaning, the
             August 1, 2014 deadline must be interpreted as a material term.
      Here, while the Settlement Agreement does not utilize the magic words

“time is of the essence,” the terms of the Settlement Agreement demonstrate that

the parties intended the August 1, 2014 deadline to be material. Under the terms of

the Settlement Agreement, though the principal balance owed was greater than

$332,000 (not to mention the accrued interest and other fees owed on the Loan),1

Deutsche Bank agreed to accept a short payoff amount of $220,000. CR 200, 221.

However, the Settlement Agreement expressly provided that Deutsche Bank was

agreeing to accept the short payoff, only if it was received on or before August 1,

2014. CR 221. The Settlement Agreement provided:

      1.1    Young agrees to sell or obtain a 3rd party take-out refinance of
             the indebtedness secured by the Deutsche Bank Lien on or
             before August 1, 2014, and Deutsche Bank agrees to accept a
             short payoff of the Loan in the amount of $220,000 on or before
             August 1, 2014 (“Settlement Funds”). Specifically, Young has
             designated the title company Netco, Inc., 7719 Wood Hollow
             Drive Ste. 157, Austin, TX 78731 (“Title Company”) and
             escrow officer Dewayne Naumann (“Escrow Agent”) to close
             the sale or refinance of the Property. Upon closing of the
             Property sale or refinance, Young agrees that the Escrow Agent
             shall promptly distribute $220,000 of the sale or 3rd party take-
             out refinance proceeds (“Settlement Funds”) to Deutsche Bank
             c/o/ Wm. Lance Lewis, QSLWM, P.C., 2001 Bryan Street,
             Suite 1800, Dallas, Texas 75201.


1
      As of November 29, 2014, the full accelerated payoff balance was $873,914.54. CR 240-
      241. The payoff in April 2014 would have been slightly less than this amount due to the
      continued accrual of interest and other charges from April 2014 through November 2014.


                                            12
CR 221. The payoff letter attached to the Settlement Agreement as Exhibit A

provided:

      Deutsche Bank will release its lien on the Property conditioned upon:
      (a) review and approval by JPMC and Deutsche Bank of the
      settlement statement and (b) upon timely receipt of $220,000 in
      certified funds.

CR 228 (emphasis added). The payoff letter sent to the closing agent on May 23,

2014 echoed this language and provided that JPMC and Deutsche Bank would

accept the short payoff “provided the funds are tendered by August 1, 2014” and

would release the Security Instrument “upon timely receipt of the funds.” CR 246

(emphasis added). The letter further stated that “the Short Payoff Quote expires on

August 1, 2014.” CR 246.

      The Settlement Agreement also contained consequences if the short payoff

was not received by August 1, 2014.

      1.2.2 If Young fails to tender the Settlement Funds in accordance
            with Paragraph 1.1, Young agrees that Deutsche Bank shall
            have judgment for foreclosure. Young, through and under his
            attorney, will sign and return a copy of a judgment for
            foreclosure under the Texas Home Equity Security Instrument
            in the form attached as Exhibit C no later than August 8, 2014
            to JPMC c/o Wm. Lance Lewis, QSLWM, P.C., 2001 Bryan
            Street, Suite 1800, Dallas, Texas 75201.

      1.5   Provided Deutsche Bank receives the Settlement Funds on or
            before August 1, 2014, for and in consideration of the
            aforementioned promises, Young’s release of Deutsche Bank
            and JPMC, and other good and valuable consideration, JPMC
            and Deutsche Bank forever and completely release, acquit, and
            discharge Young from any claims asserted in the Lawsuit. If,


                                        13
             however, Deutsche Bank does not receive the Settlement Funds
             on or before August 1, 2014, JPMC and Deutsche Bank will not
             release their claims asserted in the Lawsuit, and they shall have
             judgment for judicial foreclosure.

CR 221-222.

      It is an axiomatic rule of contract interpretation in Texas that contracts

should be interpreted in such a way that gives application to all terms of the

agreement and does not render any term of the agreement meaningless. FPL

Energy, LLC v. TXU Portfolio Mgmt. Co., L.P., 426 S.W.3d 59, 63 (Tex. 2014).

This general rule applies equally in the consideration of whether time is of the

essence. Notably, if construing a contract so that timely performance is not a

material term would render provisions of the contract meaningless, time is of the

essence under Texas law. Deep Nines, Inc., 246 S.W.3d at 846; In re Escarent

Entities, L.P., 423 F. Appx. 462, 466 (5th Cir. 2011).

      For example, in Deep Nines, Inc., the agreement required that monthly

payments owed under a settlement agreement would be received by McAfee on or

before 5:00 p.m. on the sixth day of the month. 246 S.W.3d at 844. If the payment

was not received by that time, McAfee would provide a notice of default. Id. The

agreement provided that “[i]f Deep Nines then fails to deliver the past due payment

within three (3) business days after the notice of past due payment, then Deep

Nines shall be considered to be in default.” Id. Deep Nines argued that “because

the settlement agreement [did] not contain an express provision stating that ‘time is


                                         14
of the essence,’ the issue of whether timely performance is a material term of the

agreement is a fact question for the jury.” Id. at 846. The Court disagreed,

reasoning that while a stated date for performance does not by itself make time of

the essence, the agreement did more than set forth a date of performance; it also set

forth a cure provision and provided Deep Nines would be in default if payment

was not received within the cure period. Id. “To construe the agreement in a

manner that does not make timely payment a material term would render the cure

period and default provisions meaningless.” Id.

      A similar result was reached in In re Escarent, where the contract in

question specified a closing date for the sale of certain land within thirty days after

the termination of a feasibility period. 423 Fed. Appx. at 466. The seller failed to

close within the specified time period and there was a question of whether this was

a material breach. Id. at 465. The Court noted that under the terms of the

agreement, if the purchaser did not timely close, the seller could elect to either seek

specific performance or to terminate the contract and receive liquidated damages.

If the seller did not timely close, the purchaser had the option to extend the time for

performance or terminate the contract. The Court concluded that in light of these

provisions, time was of the essence because “to construe the contract so that timely

performance is not a material term would render these provisions meaningless.”

Id. at 466.


                                          15
      Similarly here, if time is not of the essence, provisions of the Settlement

Agreement would be rendered meaningless. The Settlement Agreement expressly

provides that the release provided by Deutsche Bank is ineffective and that

Deutsche Bank “shall have judgment for judicial foreclosure” if the short payoff is

not received “on or before August 1, 2014.” Paragraph 1.5 would be rendered

meaningless if time is not of the essence, and JPMC and Deutsche Bank would be

denied the remedy for which they contracted.

      In addition, the nature and purpose of the Settlement Agreement demonstrate

that time is of the essence. JPMC and Deutsche Bank were providing Young with

a three month opportunity to avoid foreclosure by tendering a short payoff. By

doing so, JPMC and Deutsche Bank were agreeing to forego their right to collect

the full balance owed on the Loan, as well as the interest and other charges that

were continuing to accrue. There is no reason that JPMC or Deutsche Bank should

be required to extend that opportunity indefinitely, especially considering that

JPMC had already been attempting to foreclose in the current suit for over two

years by that point.

      The language pointed to by Young in his brief does not undermine this

conclusion. Young asserts that because there was not a firm date for the filing of

dismissal documents after receipt of the short payoff, time was not of the essence.

Appellant’s Br., p. 8. That argument ignores the remainder of the terms of the


                                        16
Settlement Agreement. The provision on which Young relies provides that “within

fourteen (14) days of fully executing this Agreement, the Lawsuit will be abated

until August 1, 2014, or until dismissal pleadings are filed with the Court.”

CR 221. Under the terms of the Settlement Agreement, the filing of the dismissal

pleadings would be triggered by JPMC’s receipt of the Settlement Funds. CR 221,

¶1.2.1. If that occurred in May, June or July, the provision in question simply

allowed the dismissal pleadings to be filed and acted upon, without requiring the

parties to wait for the abatement to lift on August 1. That is in no way inconsistent

with the conclusion that time was of the essence with regard to the receipt of the

short payoff by August 1.

      Young also relies on the general rule that designation of a particular date for

performance does not itself indicate time is of the essence. Appellant’s Br., p. 6.

While that general statement is true, the authorities upon which Young relies

involve scenarios where the contract merely provided a date for performance

without more. Appellant’s Br., p. 5-6; Seismic & Digital Concepts, Inc. v. Digital

Res. Corp., 590 S.W.2d 718, 720 (Tex. Civ. App.—Houston [1st Dist.] 1979, no

writ) (contract provided date for delivery of software, but did not provide any

consequences for the failure to comply with the delivery date); Argos Res., Inc. v.

May Petroleum Inc., 693 S.W.2d 663, 665 (Tex. App.—Dallas 1985, writ ref’d

n.r.e.) (oilfield operating agreement provided date for commencing drilling of a


                                         17
well, but did not provide any consequences for the failure to comply with the

commencement date); Shaw v. Kennedy, Ltd., 879 S.W.2d 240, 246 (Tex. App.—

Amarillo 1994, no writ) (settlement agreement contained requirement to obtain

release from related party and further provided that the settlement was to be

completed by a date certain, but did not provide any consequences for the failure to

comply with the completion date). The Settlement Agreement is distinguishable

from these authorities because, as discussed above, other provisions in the

Settlement Agreement provided consequences if the payment was not received by

the August 1 deadline. CR 221-222.

      When all of the terms of the Settlement Agreement are considered, it is clear

that time was of the essence, and the short payoff was required to be paid by

August 1, 2014.     To hold otherwise would render the penalty and remedy

provisions of the Settlement Agreement meaningless—an interpretation not

permitted by Texas law.

      B.     The parties’ actions further demonstrate that the parties intended
             the August 1, 2014 deadline to be material.
      It is undisputed that Young sought an extension of the August 1, 2014

deadline and that JPMC refused the requested extension. CR 251-252. These facts

also demonstrate that the August 1, 2014 deadline was material.

      In at least two of the cases cited by Young, the Courts found that the parties’

actions in discussing the extension of a deadline, and the failure for such extension


                                         18
to be approved, evidenced that the deadline was material. Siderius, Inc. v. Wallace

Co., 583 S.W.2d 852, 864 (Tex. Civ. App.—Tyler 1979, no writ.); Builders Sand,

Inc. v. Turtur, 678 S.W.2d 115, 119 (Tex. App.—Houston [14th Dist.] 1984, no

writ). For example, in Siderius, Inc., the Court held that time was of the essence in

a letter of credit transaction, which required the pipe to be loaded on board the

vessels no later than November 30, 1974. 583 S.W.2d at 864. After the parties

agreed to extend the original shipping deadline to January 15, 1975, the seller

offered a $75,000.00 reduction of the price of the pipe for a second extension of

the shipping date to January 31, 1975. Id. The buyer refused to agree to any

further extension, and the seller argued time was not of the essence. Id. Noting

that the seller requested an extension, which was refused, the Court held the

January 15 deadline was a material term, which the seller breached by failing to

perform timely. Id. Similarly, Young’s request for an extension, and JPMC

declination to agree to same, proves the materiality of the August 1, 2014 deadline.

      C.     It is appropriate for a trial court to determine whether time is of
             the essence as a matter of law under circumstances like those
             presented here.
      Young argues that whether time is of the essence is a fact issue for a jury to

decide. Appellant’s Br., p. 6-7. In making this assertion, Young ignores cases,

including a case from this Court, recognizing that under certain facts and

circumstances, this is an issue that can be determined as a matter of law. See e.g.,



                                         19
Deep Nines, Inc., 246 S.W.3d at 846; Lockhart-Hutchens v. Bergstrom, 434

S.W.2d 453, 456 (Tex. Civ. App.—Austin 1968, writ ref’d n.r.e.). This Court has

recognized that it is appropriate for the trial court to decide this issue as a matter of

law where the court finds that “because of the subject matter of the contract [it] can

judicially know that the parties clearly intended that time should be of the

essence.” Lockhart-Hutchens, 434 S.W.2d at 456. Like any question of fact,

where the facts are undisputed, and “ordinary minds cannot differ regarding the

conclusion to be drawn from the evidence,” it is appropriate for the trial court to

determine a question of fact in the context of a motion for summary judgment.

Hall v. Lone Star Gas Co., 954 S.W.2d 174, 176 (Tex. App.—Austin 1997, pet.

denied).

III.   The trial court did not abuse its discretion by rejecting Young’s unclean
       hands arguments where JPMC fully performed and was simply seeking
       to enforce the express provisions of the Settlement Agreement.
       “Under the doctrine of unclean hands, a court may refuse to grant equitable

relief to a plaintiff who has been guilty of unlawful or inequitable conduct

regarding the issue in dispute.” Lazy M Ranch, Ltd. v. TXI Operations, LP, 978

S.W.2d 678, 683 (Tex. App.—Austin 1998, pet. denied). However, this “rule is

not absolute”, and “the clean hands doctrine should not be applied unless the party

asserting the doctrine has been seriously harmed and the wrong complained of

cannot be corrected without the application of the doctrine.” Dunnagan v. Watson,



                                           20
204 S.W.3d 30, 41 (Tex. App.—Fort Worth 2006, pet. denied). “The determination

of whether a party has come to court with unclean hands is left to the discretion of

the trial court.” Id.

       Though Young characterizes his unclean hands argument as stemming from

JPMC’s failure to send a payoff quote, his actual position is that by enforcing the

terms of the Settlement Agreement as written, JPMC has unclean hands.

Appellant’s Br., p. 10. The undisputed evidence is that JPMC did provide a payoff

quote. Specifically, JPMC provided a payoff letter on May 23, 2014, which

provided a payoff quote good through August 1, 2014, in accordance with the

terms of the Settlement Agreement. CR 245-247. Young then had over two

months to apply for a refinancing loan and bring that loan to closing. Young

waited until July 29, 2014, just days before the August 1, 2014 deadline to request

an extension. CR 251. JPMC was under no obligation to grant such an extension

and, as a party who fully performed under the Settlement Agreement, was free to

require Young to live up to the bargain he had struck. To hold otherwise would

deprive JPMC of the agreement it bargained for and would deprive it of its right to

contract. JPMC’s actions in refusing to modify the terms of the Settlement

Agreement do not amount to unclean hands. Young’s failure to meet the specified

deadline was simply a failure of Young’s own making.




                                        21
      Young’s reliance on the “Further Acts” provision of the Settlement

Agreement is misplaced. Appellant’s Br., p.10-11. This is not an instance where

the parties are being required to take some action that was not contemplated by the

terms of the Settlement Agreement to allow the parties to comply with the terms of

the Settlement Agreement. Instead, Young is seeking to have the express terms of

the Settlement Agreement modified to force JPMC to accept the short payoff at a

date later than August 1, 2014. That was not the agreement bargained for by the

parties. The “Entire Agreement” paragraph in the Settlement Agreement provides

a mechanism for amendments, which provides that the Settlement Agreement

“may not be clarified, modified, changed, or amended except in writing signed by

each and every one of the signatories hereto, or their authorized representatives.”

CR 223. That process was not followed because the parties did not reach an

agreement to modify the deadline set by the express terms of the Settlement

Agreement. To adopt Young’s argument would supplant the Entire Agreement

provision and allow modifications to the Settlement Agreement, which were not

bargained for by the parties.

      Requiring that the terms of the Settlement Agreement be enforced so that

JPMC obtained the benefit of the bargain it had struck does not amount to

“unlawful or inequitable” conduct on the part of JPMC that would support a

finding of unclean hands. Parties to a contract, especially parties who have fully


                                        22
performed their obligations under the agreement, should be permitted to enforce

the bargained for terms of the agreement. Accordingly, the trial court did not

abuse its discretion in granting JPMC specific performance.


                                    PRAYER
      WHEREFORE, PREMISES CONSIDERED, JPMorgan Chase Bank, N.A.,

prays that the summary judgment in its favor be affirmed in all things.



                                      Respectfully submitted,


                                                  /s/ Marcie L. Schout
                                      Marcie L. Schout
                                      Texas State Bar No. 24027960
                                      Wm. Lance Lewis
                                      Texas State Bar No. 12314560
                                      QUILLING, SELANDER, LOWNDS,
                                         WINSLETT & MOSER, P.C.
                                      2001 Bryan Street, Suite 1800
                                      Dallas, Texas 75201
                                      (214) 871-2100 (Telephone)
                                      (214) 871-2111 (Facsimile)
                                      mschout@qslwm.com
                                      llewis@qslwm.com

                                      ATTORNEYS FOR APPELLEE,
                                      JPMORGAN CHASE BANK, N.A.,




                                        23
                       CERTIFICATE OF SERVICE
       On September 28, 2015, I served a copy of this Brief for Appellee via
electronic service, upon the following:

                             Stephen Casey, Esq.
                             Casey Law Office, P.C.
                             595 Round Rock West Drive
                             Suite 102
                             Round Rock, Texas 78681.

                                             /s/ Marcie L. Schout
                                   Wm. Lance Lewis / Marcie L. Schout



                    CERTIFICATE OF COMPLIANCE
      I certify that this document was produced on a computer using Microsoft
Word and contains 5,607 words, as determined by the computer software’s word-
count function, excluding the sections of the document listed in Texas Rule of
Appellate Procedure 9.4(i)(1).

                                              /s/ Marcie L. Schout
                                   Marcie L. Schout




                                     24
