                                 NO. 07-11-00154-CV

                            IN THE COURT OF APPEALS

                     FOR THE SEVENTH DISTRICT OF TEXAS

                                    AT AMARILLO

                                       PANEL A

                                    JULY 31, 2012


                       BANK OF AMERICA, N.A., APPELLANT

                                          v.

                              LINDA LILLY, APPELLEE


              FROM THE 146TH DISTRICT COURT OF BELL COUNTY;

                 NO. 247955; HONORABLE RICK MORRIS, JUDGE


Before CAMPBELL and HANCOCK and PIRTLE, JJ.


                              MEMORANDUM OPINION

      Appellant Bank of America, N.A., appeals from the trial court’s judgment granting

Linda Lilly’s no-evidence motion for summary judgment. We will affirm.


                                     Background


      By a December 1997 note, Lilly Homes, Inc. borrowed $100,000 from the bank.

The corporation later defaulted on the loan. The bank sued both the corporation and

Linda Lilly, who the bank alleged had personally guaranteed the note.1


      1
        Lilly Homes, Inc. also filed a motion for summary judgment. That motion was
denied and the corporation’s liability is not at issue in this appeal.
       Lilly filed a no-evidence motion for summary judgment on the bank’s claim

against her on the guaranty. The motion asserted, among other grounds, that the bank

had no evidence of the terms of Lilly’s purported guaranty and no evidence of the

occurrence of the conditions that would give rise to her liability under the guaranty. In

its response, the bank submitted and relied on an affidavit of one of its vice presidents,

to which was appended what the affidavit said was a true copy of the note containing

the personal guaranty. The summary judgment record contains the bank’s responses to

discovery propounded by Lilly, in which the bank acknowledged it did not have in its

possession the original note or guaranty. The guaranty language in the note copy

appended to the affidavit is mostly illegible.


       The trial court granted Lilly’s motion and a final judgment in her favor was later

entered. The bank appeals.


                                          Analysis


       A no-evidence motion for summary judgment is essentially a pretrial motion for

directed verdict, and we apply the same legal sufficiency standard of review. King

Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750-51 (Tex. 2003); Gray v. Woodville

Health Care Center, 225 S.W.3d 613, 616 (Tex.App.--El Paso 2006, pet. denied). After

the movant specifies which essential elements of the non-movant’s case are devoid of

evidentiary support, the burden shifts to the non-movant to produce summary judgment

evidence raising a genuine issue of material fact regarding each challenged element.

Aguilar v. Morales, 162 S.W3d 825, 834 (Tex.App.--El Paso 2005, pet. denied). The

non-movant meets this burden, thereby defeating the no-evidence motion, by producing

                                                 2
more than a scintilla of evidence in support of each challenged element. Gray, 225

S.W.3d at 616. A no-evidence motion is properly granted when the non-movant fails to

produce proper summary judgment evidence, or the evidence produced is so weak as

to create no more than a mere surmise or suspicion. Ford Motor Company v. Ridgway,

135 S.W.3d 598, 601 (Tex. 2004).


       On appeal, we conduct a de novo review of the trial court's ruling to determine

whether the non-movant's evidence demonstrated the existence of a material fact issue

on each of the challenged elements. King Ranch, Inc., 118 S.W.3d at 751. When

conducting such a review, we must view the evidence in the light most favorable to the

non-movant. Gray, 225 S.W.3d at 616. When, as here, the trial court fails to specify

which no-evidence ground served as the basis for its ruling, we must review each

ground raised in the motion, and the judgment will be affirmed if any of the theories

prove meritorious. Id. at 617.


       A guaranty agreement is a person's promise to perform the same act that

another person is contractually bound to perform. Simmons v. Compania Financiera

Libano, S.A., 830 S.W.2d 789, 792 (Tex. App.--Houston [1st Dist.] 1992, writ denied).

A guaranty creates a secondary obligation under which the guarantor promises to

answer for the debt of the primary obligor if the primary obligor fails to perform. Garner

v. Corpus Christi Nat'l Bank, 944 S.W.2d 469, 475 (Tex. App.--Corpus Christi 1997, writ

denied). To recover under a guaranty agreement, a plaintiff must show (1) the existence

and ownership of the guaranty agreement, (2) the terms of the underlying contract by

the holder, (3) the occurrence of the conditions on which liability is based, and (4) the

                                            3
failure or the refusal to perform the promise by the guarantor. Byrd v. Estate of Nelms,

154 S.W.3d 149, 157 (Tex. App.--Waco 2004, pet. denied); Escalante v. Luckie, 77

S.W.3d 410, 416 (Tex.App.—Eastland 2002, pet. denied).


      A guarantor is entitled to have her guaranty strictly construed.2 Reece v. First

State Bank of Denton, 566 S.W.2d 296, 297 (Tex. 1978); Escalante, 77 S.W.3d at 417.

This rule prohibits the extension, by construction or implication, of the guarantor's

obligations beyond the precise terms of her agreement. Escalante, 77 S.W.3d at 417;

Preston Ridge Financial Services Corp. v Tyler, 796 S.W.2d 772, 780 (Tex. App.-Dallas

1990, writ denied).


      On appeal, the bank maintains its vice president’s affidavit and the attached copy

of the note were sufficient to preclude summary judgment against it. Lilly argues the

document the bank was able to produce, containing no legible language setting out the

terms of a guaranty, is no evidence of the conditions on which her liability as guarantor

is based.


      The printed note agreement consists of several pages. The signatures appear

on the second page, where Lilly’s signature appears twice.       The second signature

underlies a paragraph bearing the title, “Personal Guaranty.” The paragraph contains




      2
         Reece and other Texas cases refer to this treatment of a guaranty as an
application of the rule of strictissimi juris. See Reece, 566 S.W.2d at 297; McKnight v.
Virginia Mirror Co., 463 S.W.2d 428, 430 (Tex. 1971).

                                           4
about nine lines of text. To us, the text is entirely illegible, even when examined with a

strong magnifying glass.3


      Although the bank’s summary judgment evidence showed that the note Lilly

signed contained some terms on the subject of a guaranty, we agree with Lilly there is

no evidence of the terms of the guaranty agreement. It follows that there is no evidence

of the occurrence of the conditions under which Lilly would be liable under the guaranty.

See UBS Fin. Servs. v. Branton, 241 S.W.3d 179, 186 (Tex.App.—Fort Worth 2007, no

pet.) (finding signatory to master account agreement not bound by terms when most of

the wording directly above signature was illegible).


      The bank’s brief also mentions the statement in the affidavit, by which its vice

president stated, “The Note included language wherein [Lilly] personally guaranteed the

Note.” To any degree the bank relies on that statement as evidence, we agree with Lilly

that it constitutes merely a legal conclusion and is therefore not competent summary

judgment evidence.     See Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex.1984)

(affidavits stating legal conclusions, not facts, incompetent summary judgment proof).

Moreover, the statement suffers from the same inadequacy as the illegible paragraph

from the note agreement; it tells nothing about the terms of the asserted personal

guaranty. See, e.g., Reece, 566 S.W.2d at 296 (guaranty limited to a maximum dollar

amount).




      3
          The record contains a reporter’s record of the summary judgment hearing. The
trial judge on that occasion indicated he was able to read a few words.

                                            5
       The bank has failed to produce summary judgment evidence raising a fact issue

as to the occurrence of the conditions on which Lilly’s liability under her asserted

personal guaranty would be based. Summary judgment in her favor was proper. Ford

Motor Company, 135 S.W.3d at 601. We overrule the bank’s issue and affirm the

judgment of the trial court.




                                                          James T. Campbell
                                                               Justice




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