
                           NO. 07-10-0012-CV

                        IN THE COURT OF APPEALS

                   FOR THE SEVENTH DISTRICT OF TEXAS

                              AT AMARILLO

                                PANEL A

                             JUNE 24, 2011

                     ______________________________


            HOME FURNISHINGS, INC., GEORGE C. BURNETT, JR.,
                    AND MARIE E. BURNETT, APPELLANTS

                                   V.

                   JPMORGAN CHASE BANK, NA, APPELLEE


                   _________________________________

            FROM THE 96TH DISTRICT COURT OF TARRANT COUNTY;

             NO. 96-229807-08; HONORABLE JEFF WALKER, JUDGE

                    _______________________________

Before CAMPBELL and HANCOCK and PIRTLE, JJ.

                           DISSENTING OPINION

       The  memorandum  opinions  authored  by  Justices  Campbell  and
Hancock reach  the  same  final  result  (affirm),  but  for  different
reasons.  While I agree with large portions of both  opinions,  because
I disagree with the final result, I respectfully dissent.



As stated in both memorandum opinions, this is a suit on  a  promissory
note by a lender against guarantors  for  a  deficiency  judgment.   In
that regard, it is undisputed that Home Furnishings Group, Inc., a non-
party, executed and delivered to JPMorgan Chase Bank  NA  ("Chase"),  a
promissory note, in the original principal sum of $522,000; which  note
was both guaranteed by Home Furnishings, Inc., George C.  Burnett,  Jr.
and Marie E. Burnett (Appellants  herein;  collectively  "guarantors"),
and collateralized by assets and inventory located at Home  Furnishings
Group, Inc.'s store in Southlake, Texas.  It is  also  undisputed  that
Home Furnishings Group, Inc. defaulted on the note and that Chase  then
seized the collateral, foreclosed its security  interest,  and  made  a
demand for payment upon the  guarantors  for  the  alleged  deficiency.
Against those undisputed facts, what is at issue here is whether  Chase
met its summary judgment burden  of  proof  in  its  suit  against  the
guarantors for the deficiency.  The guarantors contend the trial  court
erred in granting Chase summary judgment because a  material  issue  of
fact exists as to the amount due and owing.   Specifically,  guarantors
contend, via an affidavit from George C. Burnett, that  Chase  has  not
accounted  for  or  otherwise  allowed  credit  for  certain  items  of
collateral  seized  by  Chase  pursuant  to  its  security   agreement;
whereas, Chase contends that all credits have been given.

      Justice Hancock's  opinion  takes  the  position  that  Burnett’s
affidavit does not raise a material issue of fact as  to  the  disputed
credits  because  there  is  a  perceived  temporal  gap  between   the
inventory date relied upon by Burnett in his  affidavit  and  the  date
the collateral was seized.   In  this  regard,  I  agree  with  Justice
Campbell's opinion in its finding that Burnett's  affidavit  should  be
read as saying the inventory list appended thereto  was  the  inventory
on hand as of the end of the last day the store was open for  business.
 Although Burnett’s affidavit does  not  definitively  state  that  the
inventory listed was the collateral seized  by  Chase,  it  does  state
that "no inventory was sold . .  .  removed,  relocated,  or  otherwise
disposed of after that  date."   It  further  states  that  "the  items
listed on Exhibit  C  of  Defendants'  Response  to  Plaintiff’s  Third
Amended Motion for Summary Judgment represent a list of inventory  that
was in the store at the end of the last day  of  business,  “but  which
was not sold at the foreclosure sales and  cannot  be  accounted  for."
(Emphasis added.)  A reasonable deduction from that statement  is  that
the guarantors contend Chase seized assets  for  which  the  guarantors
received no credit.   While  Chase's  summary  judgment  evidence  does
state that  credits  were  allowed  for  the  net  proceeds  from  four
separate liquidation sales and a settlement with an alleged  consignor,
it does not  aver  that  Chase  has  allowed  credit  for  all  of  the
collateral seized.  Therein lies the rub.

      The opinions of both  Justices  Campbell  and  Hancock  take  the
position that the guarantors  contractually  waived  their  defense  of
"impairment  or  loss  of  collateral."   Apparently  they  take   this
position because, at  the  time  the  trial  court  considered  Chase's
motion for summary judgment, the guarantors'  live  pleading  consisted
of nothing more than a general denial and an  allegation  that  Chase's
"disposition of the collateral, including  the  method,  manner,  time,
and place of said disposition  was  not  commercially  reasonable."   A
general denial places in issue the amount allegedly due and owing on  a
promissory note and a plaintiff seeking recovery upon a  note  has  the
burden of proving the amount of the balance due.  Fikes and  Associates
v. Evans, 610 S.W.2d 245  (Tex.Civ.App.--Fort  Worth  1980,  no  writ).
Whether or not the guarantors have plead either an affirmative  defense
or assert a counterclaim regarding the collateral  allegedly  retained,
to establish its entitlement to judgment as a matter of law, Chase  had
the burden of proving every essential element of its claim,  MMP,  Ltd.
v. Jones, 710 S.W.2d 59 (Tex.  1986),  including  the  amount  due  and
owing.

      Justice Campbell's opinion concludes that  because  the  guaranty
agreements waive certain defenses there is no material  issue  of  fact
which precludes summary judgment.[1]  He  argues  that  the  applicable
waiver listed is the waiver of claims based  upon  an  allegation  that
Chase "did not dispose of any collateral."  While I  will  agree  Chase
was under no obligation to pursue its right to foreclose  the  security
interest it held in  the  collateral  at  issue  before  it  sought  to
enforce the guaranty agreements, Christian v. Univ.  Fed.  Sav.  Ass'n,
792 S.W.2d 533, 555 (Tex.App.--Houston  [1st  Dist.]  1990,  no  writ),
having chosen to do so, it must  account  for  the  collateral  seized.
Tanenbaum v. Economics Laboratory, Inc. 628 S.W. 2d 769,  771-72  (Tex.
1982) (holding that a note holder  is  not  entitled  to  a  deficiency
judgment  unless  collateral  seized  has  been  disposed   of   in   a
commercially reasonable manner).[2]

      Because a material issue of fact exists  as  to  the  guarantors'
right  to  additional  credits,  Chase  has  not  met  its  burden   of
conclusively proving the amount of its damages.  Therefore,  I  believe
the trial court erred in granting summary judgment in favor  of  Chase.
Tex. R. Civ. P. 166a(c).    Accordingly, I  would  reverse  and  remand
for further proceedings.

                                             Patrick A. Pirtle
                                                    Justice



                        -----------------------
[1]See Justice Campbell's opinion  regarding  waiver  of  the  "defense
that the collateral was neglected or  lost,  and  defenses  that  Chase
impaired the collateral, did not dispose of any of  the  collateral  or
failed to obtain a fair market value for  the  collateral."   See  also
Justice Hancock's opinion regarding Rights, Notices, and Defenses  that
Guarantor Waives and Duties as to Collateral.

[2]Although neither the guarantors nor Chase have briefed  the  matter,
issues pertaining to the seizure of collateral,  its  foreclosure,  and
entitlement to credit for net proceeds from a  commercially  reasonable
sale thereof are governed by Chapter 9 of the Texas Uniform  Commercial
Code.  See Tex. Bus. & Com. Code Ann. §§ 9.101 - 9.709 (West 2011)

