Dubier v. Triangle Capital Properties LLC et al

Filing 69

MEMORANDUM and ORDER denying the 66 Motion for Summary Judgment. Signed by District Judge Marcia A. Crone on 6/5/24. (kcv)

UNITED STATES DISTRICT COURT

PAMELA DUBIER, AS TRUSTEE OF THE §
PAMELA JOY DUBIER 2011 REVOCABLE §
TRUST,
§
§
Plaintiff,
§
§
versus
§
§
TRIANGLE CAPITAL PROPERTIES, LLC, §
and ROYAL TEXAS, LLC,
§
§
Defendants.
§

EASTERN DISTRICT OF TEXAS

CIVIL ACTION NO. 1:21-CV-415

MEMORANDUM AND ORDER
Pending before the court is Defendant Royal Texas, LLC’s (“Royal”) Motion for Summary
Judgment (#66). Plaintiff Pamela Dubier, as Trustee of the Pamela Joy Dubier 2011 Revocable
Trust (“Dubier”) filed a response in opposition (#67), and Royal filed a reply (#68). Having
considered the motion, the submissions of the parties, the record, and the applicable law, the court
is of the opinion that Royal’s motion should be denied.
I.

Background
This case arises from a lease agreement concerning a commercial property located at 2200

Gulfway Drive in Port Arthur, Texas (the “Property”), which was previously operated as a
Church’s Chicken franchise. On April 26, 2016, Store Investment Corporation (“Store”), the
original lessor, executed a Lease Agreement (the “Lease”) for the Property with Defendant
Triangle Capital Properties, LLC (“Triangle”), as the lessee. That same day, Defendant Royal
Texas, LLC (“Royal”), executed an Unconditional Guaranty of Payment and Performance (the

“Guaranty Agreement”), guaranteeing Triangle’s obligations under the Lease. The Lease’s initial
expiration date was June 13, 2032.
In August 2017, over one year after Store and Triangle executed the Lease, Hurricane
Harvey severely damaged the Property, rendering it unusable and commercially inoperable.
Despite this damage, Triangle continued to fulfill several of its obligations under the Lease,
including submitting rent payments, maintaining insurance coverage, and paying property taxes.
Triangle did not, however, repair the damage to the Property.
On November 27, 2018, Store and Dubier executed a Purchase and Sale Agreement (the
“Purchase and Sale Agreement”) conveying the Property to Dubier as Trustee of the Pamela Joy
Dubier 2011 Revocable Trust, Amended May 22, 2006 (the “Trust”). The following month, Store
and Dubier also executed an Assignment and Assumption of Lease and Rents and Guaranty (the
“Assignment”), which transferred to Dubier as Trustee of the Trust “all of [Store’s] estate, right,
title and interest in and to the Lease and the Guaranty[.]” After Dubier became the lessor in
December 2018, Triangle continued paying rent for over a year but never repaired the Property.
Then, in a letter dated March 30, 2020, Steve Neuroth (“Neuroth”), the Chief Financial Officer
of Royal, notified Dubier that Triangle would not be submitting its rent payment for April 2020,
citing the economic repercussions of the COVID-19 pandemic. Dubier later sent Neuroth a Notice
of Default dated June 19, 2020, and a Demand for Payment dated July 1, 2020, but she received
no subsequent payments. To date, Triangle has not paid rent since April 2020 and has not
repaired the Property.1

1

Royal retroactively tendered a payment for Triangle’s April 2020 rent. Neither Triangle nor
Royal has tendered any subsequent payments.

2

In July 2020, Dubier filed a small claims lawsuit in Jefferson County, Texas, to recover
the rent payments that Triangle owed for May 2020 and June 2020. That lawsuit was subsequently
dismissed. Following Triangle’s continued refusal to pay rent or repair the Property, Dubier filed
the present lawsuit on August 9, 2021, alleging that Triangle had materially breached the Lease
by ceasing to pay rent since May 2020 and failing to repair the Property following Hurricane
Harvey. Dubier also asserted a claim against Royal, contending that Royal had materially
breached the Guaranty Agreement by failing to compensate Dubier for Triangle’s missed rent
payments, despite receiving notice of Triangle’s default. Triangle and Royal answered, denying
that they had materially breached the Lease or the Guaranty Agreement, respectively, and
asserting a number of defenses, including, inter alia, that the Guaranty Agreement was not
properly assigned to Dubier.2
In the present motion, Royal first asserts that the Guaranty Agreement restricts its
assignment to “a lender.” Royal argues that, because neither Dubier nor the Trust is a “lender,”
the Guaranty Agreement was not properly assigned to Dubier, and Dubier’s claim against Royal
for breach of the Guaranty Agreement must accordingly be dismissed. In response, Dubier
contends that the Guaranty Agreement does not limit its assignability to only a lender. In the
alternative, Dubier claims that the Trust is a lender.

2

In its previous Amended Memorandum and Order (#55), the court granted partial summary
judgment on Dubier’s rent and repair claims against Triangle and reserved certain issues for trial.
Specifically, the court reserved the issue of the amount of damages that Dubier is owed on her rent claim.
The court likewise reserved the issue of whether Dubier was damaged by Triangle’s failure to repair the
Property (and if Dubier was damaged, to what extent).

3

II.

Analysis
A.

Summary Judgment Standard

A party may move for summary judgment without regard to whether the movant is a
claimant or a defending party. See Union Pac. R.R. Co. v. Palestine, 41 F.4th 696, 703 (5th Cir.
2022), cert. denied, 143 S. Ct. 579 (2023); Parrish v. Premier Directional Drilling, L.P., 917
F.3d 369, 380 (5th Cir. 2019); Apache Corp. v. W&T Offshore, Inc., 626 F.3d 789, 793 (5th Cir.
2010). Rule 56(a) of the Federal Rules of Civil Procedure provides that summary judgment shall
be granted “if the movant shows that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a); Union Pac. R.R. Co.,
41 F.4th at 703; United Steel, Paper & Forestry, Rubber Mfg., Energy, Allied Indus. & Serv.
Workers Int’l Union v. Anderson, 9 F.4th 328, 331 (5th Cir. 2021); Smith v. Harris County, 956
F.3d 311, 316 (5th Cir. 2020); Parrish, 917 F.3d at 378; Hefren v. McDermott, Inc., 820 F.3d
767, 771 (5th Cir. 2016). The party seeking summary judgment bears the initial burden of
informing the court of the basis for its motion and identifying those portions of the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,
which it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986); MDK Sociedad De Responsabilidad Limitada v. Proplant Inc.,
25 F.4th 360, 368 (5th Cir. 2022); Goldring v. United States, 15 F.4th 639, 644-45 (5th Cir.
2021); Playa Vista Conroe v. Ins. Co. of the W., 989 F.3d 411, 416-17 (5th Cir. 2021); Jones v.
United States, 936 F.3d 318, 321 (5th Cir. 2019).
“A fact issue is ‘material’ if its resolution could affect the outcome of the action.”
Hemphill v. State Farm Mut. Auto. Ins. Co., 805 F.3d 535, 538 (5th Cir. 2015) (quoting Burrell

4

v. Dr. Pepper/Seven Up Bottling Grp., Inc., 482 F.3d 408, 411 (5th Cir. 2007)); see MDK
Sociedad De Responsabilidad Limitada, 25 F.4th at 368; Lexon Ins. Co., Inc. v. Fed. Deposit Ins.
Corp., 7 F.4th 315, 321 (5th Cir. 2021); Dyer v. Houston, 964 F.3d 374, 379 (5th Cir. 2020).
“Factual disputes that are irrelevant or unnecessary will not be counted.” Tiblier v. Dlabal, 743
F.3d 1004, 1007 (5th Cir. 2014) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986)); accord Valencia v. Davis, 836 F. App’x 292, 296 (5th Cir. 2020); see Dyer, 964 F.3d
at 379; Parrish, 917 F.3d at 378. “An issue is ‘genuine’ if it is real and substantial, as opposed
to merely formal, pretended, or a sham.” Gerhart v. Barnes, 724 F. App’x 316, 321 (5th Cir.
2018) (quoting Bazan ex rel. Bazan v. Hidalgo County, 246 F.3d 481, 489 (5th Cir. 2001));
accord Johnson v. City of San Antonio, No. 22-50196, 2023 WL 3019686, at *6 n.7 (5th Cir.
Apr. 20, 2023); Nall v. BNSF Ry. Co., 917 F.3d 335, 340 (5th Cir. 2019). Thus, a genuine
dispute of material fact exists “if the evidence is such that a reasonable jury could return a verdict
for the nonmoving party.” Hefren, 820 F.3d at 771; accord MDK Sociedad De Responsabilidad
Limitada, 25 F.4th at 368; Sanchez Oil & Gas Corp. v. Crescent Drilling & Prod., Inc., 7 F.4th
301, 309 (5th Cir. 2021); Dyer, 964 F.3d at 379; Tiblier, 743 F.3d at 1007. The moving party,
however, “need not negate the elements of the nonmovant’s case.” Terral River Serv., Inc. v.
SCF Marine Inc., 20 F.4th 1015, 1018 (5th Cir. 2021) (quoting Little v. Liquid Air Corp., 37 F.3d
1069, 1075 (5th Cir. 1994)); Pioneer Expl., L.L.C. v. Steadfast Ins. Co., 767 F.3d 503, 511 (5th
Cir. 2014); see Savoy v. Kroger Co., 848 F. App’x 158, 160 (5th Cir. 2021).
Once a proper motion has been made, the nonmoving party may not rest upon mere
allegations or denials in the pleadings but must present affirmative evidence, setting forth specific
facts, to demonstrate the existence of a genuine issue for trial. Celotex Corp., 477 U.S. at 322

5

n.3; see Beard v. Banks, 548 U.S. 521, 529 (2006) (quoting FED. R. CIV. P. 56(e)); Flowers v.
Wal-Mart Inc., 79 F.4th 449, 452 (5th Cir. 2023); MDK Sociedad De Responsabilidad Limitada,
25 F.4th at 368; Clark v. CertainTeed Salaried Pension Plan, 860 F. App’x 337, 340-41 (5th Cir.
2021); Acadian Diagnostic Lab’ys, L.L.C. v. Quality Toxicology, L.L.C., 965 F.3d 404, 410 (5th
Cir. 2020). The court “should review the record as a whole.” Black v. Pan Am. Lab’ys, LLC,
646 F.3d 254, 273 (5th Cir. 2011) (quoting Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S.
133, 150 (2000)); see Hacienda Recs., L.P. v. Ramos, 718 F. App’x 223, 234 (5th Cir. 2018);
City of Alexandria v. Brown, 740 F.3d 339, 350 (5th Cir. 2014). The evidence is construed “in
favor of the nonmoving party, but only where there is an actual controversy, that is, when both
parties have submitted evidence of contradictory facts.” Spring St. Partners-IV, L.P. v. Lam, 730
F.3d 427, 435 (5th Cir. 2013) (quoting Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th
Cir. 2005)); accord Lexon Ins. Co., Inc., 7 F.4th at 321; Geovera Specialty Ins. Co. v. Odoms,
836 F. App’x 197, 200 (5th Cir. 2020) (quoting Little, 37 F.3d at 1075).
Summary judgment is mandated if the nonmovant fails to make a showing sufficient to
establish the existence of an element essential to its case on which it bears the burden of proof at
trial. Nebraska v. Wyoming, 507 U.S. 584, 590 (1993); Celotex Corp., 477 U.S. at 322; Lyons,
964 F.3d at 302; Musser v. Paul Quinn Coll., 944 F.3d 557, 560 (5th Cir. 2019); Tiblier, 743
F.3d at 1007; Curtis v. Anthony, 710 F.3d 587, 594 (5th Cir. 2013). “[W]here the nonmoving
party fails to establish ‘the existence of an element essential to that party’s case, and on which that
party will bear the burden of proof at trial,’ no genuine issue of material fact can exist.” Goode
v. Greenstream Int’l, L.L.C., 751 F. App’x 518, 521 (5th Cir. 2018) (quoting Nichols v. Enterasys
Networks, Inc., 595 F.3d 185, 188 (5th Cir. 2007)); see Phillips v. Sanofi U.S. Servs. (In re

6

Taxotere (Docetaxel) Prods. Liab. Litig.), 994 F.3d 704, 710 (5th Cir. 2021); Apache Corp., 626
F.3d at 793. In such a situation, “‘[a] complete failure of proof concerning an essential element
of the nonmoving party’s case necessarily renders all other facts immaterial’ and ‘mandates the
entry of summary judgment’ for the moving party.” Alvarez v. City of Brownsville, 904 F.3d 382,
389 (5th Cir. 2018) (quoting United States ex rel. Farmer v. City of Houston, 523 F.3d 333, 337
(5th Cir. 2008)); accord Guillot ex rel. T.A.G. v. Russell, 59 F.4th 743, 750 (5th Cir. 2023);
Stingley v. Watson Quality Ford, 836 F. App’x 286, 288 (5th Cir. 2020).
B.

Summary Judgment—Local Rule CV-56(b)

As a threshold matter, Royal asserts in its reply that Dubier’s response fails to comply with
Local Rule CV-56(b) because it does not include a “response to [Royal’s] Statement of Undisputed
Material Facts.” Local Rule CV-56(b) provides in relevant part: “Any response to a motion for
summary judgment must include: (1) a response to the statement of issues; and (2) a response to
the ‘Statement of Undisputed Material Facts.’” Importantly, “[c]ourts have broad discretion in
interpreting and applying their own local rules adopted to promote efficiency in the court.” United
States v. Moreno, 857 F.3d 723, 726 n.1 (5th Cir. 2017) (quoting In re Adams, 734 F.2d 1094,
1102 (5th Cir. 1984)); accord Charles v. K-Pats., Inc., 849 F. App’x 448, 450 (5th Cir. 2021)
(determining that the district court “acted within its ‘considerable latitude in applying [its] own
rules’ when it excused [a summary judgment] motion’s non-compliance” (quoting McLeod,
Alexander, Powel & Apffel, P.C. v. Quarles, 894 F.2d 1482, 1488 (5th Cir. 1990))); Webb v.
Morella, 457 F. App’x 448, 452 (5th Cir. 2012) (recognizing that “a district court’s discretionary
authority to formulate and enforce local rules for the orderly and expeditious handling of cases is
quite broad”).

7

Royal cites Van Tiem v. First American Home Warranty Corp. for the proposition that,
pursuant to Local Rule CV-7(d), “[a] party’s failure to oppose a motion in the manner prescribed
herein creates a presumption that the party does not controvert the facts set out by [the] movant
and has no evidence to offer in opposition to the motion.” No. 1:18-CV-458, 2020 WL 6255381,
at *4 (E.D. Tex. Aug. 5, 2020) (quoting Local Rule CV-7(d)), aff’d, No. 20-40707, 2021 WL
4537689 (5th Cir. Oct. 4, 2021). Van Tiem, however, is distinguishable from the case at bar
because the plaintiff in Van Tiem filed no response to the defendant’s motion for summary
judgment, despite obtaining two extensions of time to do so. Id. at *2. As a result, the court
applied Local Rule CV-7(d) to “accept[], as true, the facts provided by [the defendant] and
supported by its evidence.” Id. at *9. Here, in contrast, Dubier filed a timely response in
opposition to Royal’s motion. While Dubier’s response lacks a discrete section responding to
Royal’s Statement of Undisputed Material Facts, the court can discern without difficulty which
aspects of Royal’s Statement of Undisputed Material Facts Dubier disputes. Thus, the court
exercises its “broad discretion” in interpreting and applying its local rules to overlook Dubier’s
omission and declines to apply a presumption that Royal’s articulation of the facts is
uncontroverted. See Berry v. Williams, No. 20-599-SDD-RLB, 2022 WL 2073079, at *5 (M.D.
La. May 23, 2022) (disregarding the plaintiff’s “failure to strictly comply with” the United States
District Court for the Middle District of Louisiana’s Local Rule 56, which required the plaintiff
“to submit an opposing statement of material facts,” because “the facts at issue [were] clearly
presented in the plaintiff’s opposition”), adopted by No. 20-599-SDD-RLB, 2022 WL 2070884
(M.D. La. June 8, 2022).

8

C.

Breach of the Guaranty Agreement

Under Texas law,3 a party seeking to recover on a claim for breach of a guaranty
agreement must show:
(1) the existence and ownership of the guaranty contract;
(2) the terms of the underlying contract by the holder;
(3) the occurrence of the conditions upon which liability is based; and
(4) the guarantor’s failure or refusal to perform the promise.
Senior Care Living VI, LLC v. Preston Hollow Cap., LLC, ___ S.W.3d ___, No.
01-21-00602-CV, 2024 WL 2138654, at *18 (Tex. App.—Houston [1st Dist.] May 14, 2024, no
pet. h.) (citing Chahadeh v. Jacinto Med. Grp., P.A., 519 S.W.3d 242, 246 (Tex. App.—Houston
[1st Dist.] 2017, no pet.); Lee v. Martin Marietta Materials Sw., Ltd., 141 S.W.3d 719, 720 (Tex.
App.—San Antonio 2004, no pet.)); see Harrison Co., L.L.C. v. A-Z Wholesalers, Inc., 44 F.4th
342, 347 (5th Cir. 2022) (quoting Haggard v. Bank of Ozarks Inc., 668 F.3d 196, 199 (5th Cir.
2012)). Here, Royal appears to assert that it is entitled to summary judgment because Dubier
cannot establish the first element—the existence and ownership of the guaranty contract—because
the Guaranty Agreement was not properly assigned to Dubier. Specifically, Royal contends that
the Guaranty Agreement provides that it may be assigned only to “a lender,” and thus it was not
properly assigned to Dubier, as neither she nor the Trust is a lender. Dubier argues in response

3

Paragraph 10 of the Guaranty Agreement states: “This Guaranty is delivered in the State of
Texas, and it is the intent of Guarantor and Lessor that this Guaranty shall be deemed to be a contract
made under and governed by the internal laws of the State of Texas, without regard to its principles of
conflicts of law.” The parties agree that Texas law governs the court’s interpretation of the Guaranty
Agreement.

9

that the Guaranty Agreement does not restrict its assignability to only a lender. In the alternative,
Dubier claims that she is a lender.
D.

Interpreting the Guaranty Agreement
1.

Principles of Contract Construction

“Courts construe unambiguous guaranty agreements as any other contract.” Moayedi v.
Interstate 35/Chisam Rd. L.P., 438 S.W.3d 1, 7 (Tex. 2014). An unambiguous contract must be
interpreted by the court as a matter of law. Nettye Engler Energy, LP v. BlueStone Nat. Res. II,
LLC, 639 S.W.3d 682, 690 (Tex. 2022); Cmty. Health Sys. Pro. Servs. Corp. v. Hansen, 525
S.W.3d 671, 681 (Tex. 2017) (citing Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983)); see
Kinsale Ins. Co. v. Flyin’ Diesel Performance & Offroad, L.L.C., 99 F.4th 821, 827 (5th Cir.
2024) (quoting Mosaic Baybrook One, L.P. v. Simien, 674 S.W.3d 234, 257 (Tex. 2023)).
“When the controversy can be resolved by proper construction of an unambiguous document,
rendition of summary judgment is appropriate.” Cmty. Health Sys. Pro. Servs. Corp., 525
S.W.3d at 681 (citing Lopez v. Munoz, Hockema & Reed, L.L.P., 22 S.W.3d 857, 862 (Tex.
2000)).
“Contract terms are given their plain, ordinary, and generally accepted meanings unless
the contract itself shows them to be used in a technical or different sense.” Valence Operating Co.
v. Dorsett, 164 S.W.3d 656, 662 (Tex. 2005) (citing Heritage Res., Inc. v. NationsBank, 939
S.W.2d 118, 121 (Tex. 1996)); accord Kinsale Ins. Co., 99 F.4th at 826 (quoting Burlington Res.
Oil & Gas Co. LP v. Tex. Crude Energy, LLC, 573 S.W.3d 198, 203 (Tex. 2019)); Nassar v.
Liberty Mut. Fire Ins. Co., 508 S.W.3d 254, 258 (Tex. 2017). The court’s primary concern when
construing a contract is to give effect to the written expression of the parties’ intent. Sanchez Oil

10

& Gas Corp., 7 F.4th at 310 n.12 (quoting Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 133
(Tex. 1994)); Nassar, 508 S.W.3d at 257-58; Hartman Income REIT Mgmt. v. Summer Energy,
LLC, ___ S.W.3d ___, No. 14-22-00469-CV, 2023 WL 8263647, at *2 (Tex. App.—Houston
[14th Dist.] Nov. 30, 2023, no pet.) (citing Pathfinder Oil & Gas, Inc. v. Great W. Drilling, Ltd.,
574 S.W.3d 882, 888 (Tex. 2019)).
Under the “four corners rule,” the intention of the parties is to be gathered from the
instrument as a whole. ACE Am. Ins. Co. v. Freeport Welding & Fabricating, Inc., 699 F.3d 832,
842 (5th Cir. 2012); see Apache Corp. v. Apollo Expl., LLC, 670 S.W.3d 319, 336 (Tex. 2023)
(“[I]t is not the actual intent of the parties that governs, but the actual intent of the parties as
expressed in the instrument as a whole[.]” (quoting Luckel v. White, 819 S.W.2d 459, 462 (Tex.
1991))); Northland Indus., Inc. v. Kouba, 620 S.W.3d 411, 415 (Tex. 2020). The “court is bound
to read all parts of a contract together to ascertain the agreement of the parties.” Sanchez Oil &
Gas Corp., 7 F.4th at 310 n.12 (quoting Forbau, 876 S.W.2d at 133); see Muzquiz v. Para Todos,
Inc., 624 S.W.3d 263, 272 (Tex. App.—El Paso 2021, pet. denied). The court should “examine
and consider the entire writing in an effort to harmonize and give effect to all the provisions of the
contract so that none will be rendered meaningless.” Nat’l Oilwell Varco, L.P. v. Auto-Dril, Inc.,
68 F.4th 206, 216 (5th Cir. 2023) (quoting Coker, 650 S.W.2d at 393); see King v. Baylor Univ.,
46 F.4th 344, 360 (5th Cir. 2022) (noting that courts must strive to “give meaning to every
sentence, clause, and word to avoid rendering any portion inoperative” (quoting Balandran v.
Safeco Ins. Co. of Am., 972 S.W.2d 738, 741 (Tex. 1998))).

In the same vein, “[a]n

interpretation that gives each word meaning is preferable to one that renders one surplusage.”
Stewart v. Metro. Lloyds Ins. Co. of Tex., 855 F. App’x 198, 200 (5th Cir. 2021) (quoting U.S.

11

Metals, Inc. v. Liberty Mut. Grp., Inc., 490 S.W.3d 20, 24 (Tex. 2015)). “No single provision
taken alone will be given controlling effect; rather, all the provisions must be considered with
reference to the whole instrument.” Nat’l Oilwell Varco, L.P., 68 F.4th at 216 (quoting Coker,
650 S.W.2d at 393); accord Kachina Pipeline Co., Inc. v. Lillis, 471 S.W.3d 445, 450 (Tex.
2015). This is merely an application of the long-established rule in Texas that “[n]o one phrase,
sentence, or section of a contract should be isolated from its setting and considered apart from the
other provisions.” Mosaic Baybrook One, L.P., 674 S.W.3d at 257 (quoting Pathfinder Oil &
Gas, Inc., 574 S.W.3d at 889).
“Whether a contract is ambiguous is a question of law for the court to decide.” Int’l
Energy Ventures Mgmt., L.L.C. v. United Energy Grp., Ltd., 818 F.3d 193, 211 (5th Cir. 2016)
(quoting Nat’l Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995));
Pathfinder Oil & Gas, Inc., 574 S.W.3d at 889 (quoting Coker, 650 S.W.2d at 394). The
determination of the ambiguity of a contract “is a legal question decided by examining the entire
contract in light of the circumstances present when the parties entered the contract.” State Farm
Fire & Cas. Co. v. Vaughan, 968 S.W.2d 931, 933 (Tex. 1998) (citing Trinity Universal Ins. Co.
v. Cowan, 945 S.W.2d 819, 821-23 (Tex. 1997)); see Compass Bank v. Nacim, 459 S.W.3d 95,
107 (Tex. App.—El Paso 2015, no pet.) (citing Universal Health Servs., Inc. v. Renaissance
Women’s Grp., P.A., 121 S.W.3d 742, 746 (Tex. 2003)).
Under Texas law, a contract is ambiguous if, after applying the established rules of
interpretation, the written instrument “remains ‘reasonably susceptible to more than one
meaning.’” Endeavor Energy Res., L.P. v. Energen Res. Corp., 615 S.W.3d 144, 155 (Tex.
2020) (quoting Lenape Res. Corp. v. Tenn. Gas Pipeline Co., 925 S.W.2d 565, 574 (Tex. 1996));

12

see Singleton v. Elephant Ins. Co., 953 F.3d 334, 337 (5th Cir. 2020) (“[A]mbiguity exists only
if the contract language is susceptible to two or more reasonable interpretations.” (quoting Am.
Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 157 (Tex. 2003))); Great Am. Ins. Co. v.
Primo, 512 S.W.3d 890, 893 (Tex. 2017); Cortez v. Chapa, No. 13-19-00193-CV, 2021 WL
161398, at *6 (Tex. App.—Corpus Christi-Edinburg Jan. 14, 2021, no pet.) (requiring a “genuine
uncertainty” as to which of two meanings is proper (quoting Treadway v. Shanks, 110 S.W.3d 1,
6 (Tex. App.—Dallas 2000), aff’d, 110 S.W.3d 444 (Tex. 2003))). In this regard, “[l]anguage
should be given its plain grammatical meaning unless it definitely appears that the intention of the
parties would thereby be defeated.”

Leighton v. Rebeles, 399 S.W.3d 721, 725 (Tex.

App.—Dallas 2013) (quoting Reilly v. Rangers Mgmt., Inc., 727 S.W.2d 527, 529 (Tex. 1987)).
An ambiguity does not arise, however, merely because the parties advance conflicting
interpretations of the contract. ACE Am. Ins. Co., 699 F.3d at 842; Rosetta Res. Operating, LP
v. Martin, 645 S.W.3d 212, 219 (Tex. 2022); Nassar, 508 S.W.3d at 258. In order for an
ambiguity to exist, both interpretations must be reasonable. See Nelson v. Comm’r of Internal
Revenue, 17 F.4th 556, 561-62 (5th Cir. 2021) (quoting Columbia Gas Transmission Corp. v. New
Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996)); Am. Int’l Specialty Lines Ins. Co. v. Rentech
Steel, L.L.C., 620 F.3d 558, 562 (5th Cir. 2010); Nat’l Union Fire Ins. Co., 907 S.W.2d at 520.
When construing a guaranty agreement, the court bears in mind that “[i]n Texas, a
guarantor is a ‘favorite’ of the law.” Westlake Petrochemicals, L.L.C. v. United Polychem, Inc.,
688 F.3d 232, 245 (5th Cir. 2012); Jamshed v. McLane Express Inc., 449 S.W.3d 871, 877 (Tex.
App.—El Paso 2014, no pet.) (citing Moffitt v. DSC Fin. Corp., 797 S.W.2d 661, 666 (Tex.
App.—Dallas 1990, writ denied)). Thus, “[i]f there is uncertainty about the meaning of a

13

guaranty contract and two reasonable constructions may be made, the reviewing court will apply
the construction most favorable to the guarantor.” 84 Lumber Co., L.P. v. Powers, 393 S.W.3d
299, 307 (Tex. App.—Houston [1st Dist.] 2012, pet. denied); see Moayedi, 438 S.W.3d at 7 (“If
the meaning of a guaranty agreement is uncertain, ‘its terms should be given a construction which
is most favorable to the guarantor.’” (quoting Coker, 650 S.W.2d at 394 n.1)); see also WBCMT
2007 C33 Off. 9720, L.L.C. v. NNN Realty Advisors, Inc., 844 F.3d 473, 478 (5th Cir. 2016)
(“[W]here the interpretation of a guaranty is in dispute, the guarantor ‘is entitled to have his
agreement strictly construed,’ and ‘[w]here uncertainty exists as to the meaning of a contract of
guaranty, its terms should be given a construction which is most favorable to the guarantor.’”
(quoting Coker, 650 S.W.2d at 394 n.1)); Senior Care Living VI, LLC, 2024 WL 2138654, at *18.
Additionally, under the rule of strictissimi juris, “a guarantor may require the terms of his
guaranty be strictly followed and the agreement not be extended beyond its precise terms by
construction or implication.” Rainier Income Fund I, Ltd. v. Gans, 501 S.W.3d 617, 622 (Tex.
App.—Dallas 2016, pet. denied) (citing Abel v. Alexander Oil Co., 474 S.W.3d 795, 800 (Tex.
App.—Houston [14th Dist.] 2014, no pet.)); Wasserberg v. Flooring Servs. of Tex., LLC, 376
S.W.3d 202, 206 (Tex. App.—Houston [14th Dist.] 2012, no pet.); see Westlake Petrochemicals,
L.L.C., 688 F.3d at 245 (“[A] guarantor’s obligation should not be extended by implication
beyond the written terms of the guaranty, and any ambiguity must be construed in favor of the
guarantor.”).
Royal argues that the rules articulated above require the court to construe the Guaranty
Agreement in its favor. In particular, Royal contends that a guaranty agreement must be construed
in favor of the guarantor not only when the contract is “ambiguous,” but also when there is any

14

“uncertainty” about its meaning.4 Although Royal claims that “[t]he word used by Texas law for
decades is ‘uncertain,’ not ‘ambiguous,’” Texas courts have, on the contrary, also utilized the term
“ambiguous” when discussing the construction of guaranty agreements. See Prentice v. Frost
Bank, No. 03-15-00506-CV, 2017 WL 2729896, at *4 n.19 (Tex. App.—Austin June 23, 2017,
pet. denied) (“If a guaranty is ambiguous and susceptible to two reasonable interpretations, courts
should use the interpretation that favors the guarantor.” (quoting Pham v. Mongiello, 58 S.W.3d
284, 288 (Tex. App.—Austin 2001, pet. denied))); Preston Ridge Fin. Servs. Corp. v. Tyler, 796
S.W.2d 772, 780 (Tex. App.—Dallas 1990, writ denied) (“We agree that if the guaranty is
ambiguous, rendering it susceptible to two reasonable interpretations, the one favorable to the
guarantor, the other unfavorable, the interpretation will be given which favors the guarantor.
However, this Court agrees with the parties that this guaranty is unambiguous; consequently, this
rule is inapplicable in this case.” (citation omitted)). Indeed, the Texas Supreme Court often uses
the terms “ambiguous” and “uncertain” as synonyms, frequently defining an “ambiguous”

4

In support of this argument, Royal asserts that the following excerpt from Moayedi demonstrates
that the rule requiring construction in favor of the guarantor is not dependent upon ambiguity: “Courts
construe unambiguous guaranty agreements as any other contract. If the meaning of a guaranty agreement
is uncertain, ‘its terms should be given a construction which is most favorable to the guarantor.’ The
interpretation of an unambiguous contract, however, is a question of law for the court.” 438 S.W.3d at
7 (quoting Coker, 650 S.W.2d at 394 n.1). In the court’s estimation, Royal’s example undermines its very
argument. Indeed, this court understands Moayedi as juxtaposing an “uncertain” guaranty agreement in
one sentence with an “unambiguous” contract in the next. See id. To put it another way, Moayedi equates
an “uncertain” guaranty agreement with an “ambiguous” one and refers to the two terms interchangeably.
Indeed, the Texas Supreme Court went on to state in no uncertain terms that “[w]hen parties
disagree over the meaning of an unambiguous contract, we determine the parties’ intent by examining the
entire agreement.” Id. (emphasis added). In other words, Moayedi provides that, even where a guaranty
agreement’s meaning might be uncertain—such as where the parties advance two conflicting interpretations
of the contract—but the language is nevertheless unambiguous, the court must apply ordinary principles
of contract interpretation to construe the agreement, rather than construing it in favor of the guarantor.
See id.; see also Apache Corp., 670 S.W.3d at 336 (explaining that, under the rules of contract
interpretation, “it is not the actual intent of the parties that governs, but the actual intent of the parties as
expressed in the instrument as a whole”).

15

contract as one whose meaning is “uncertain.” See Rosetta Res. Operating, LP, 645 S.W.3d at
219 (“An ambiguity exists when a contract’s ‘meaning is uncertain and doubtful or it is reasonably
susceptible to more than one interpretation.’” (quoting In re Davenport, 522 S.W.3d 452, 456
(Tex. 2017) (orig. proceeding))); ConocoPhillips Co. v. Koopmann, 547 S.W.3d 858, 874 (Tex.
2018); FPL Energy, LLC v. TXU Portfolio Mgmt. Co., L.P., 426 S.W.3d 59, 63 (Tex. 2014) (“An
ambiguous contract, however, has a doubtful or uncertain meaning or is reasonably susceptible
to multiple interpretations[.]”); R & P Enters. v. LaGuarta, Gavrel & Kirk, Inc., 596 S.W.2d 517,
519 (Tex. 1980) (“[A] contract is ambiguous only when the application of the applicable rules of
interpretation to the instrument leave it genuinely uncertain which one of the two meanings is the
proper meaning.”); see also Ambiguity, BLACK’S LAW DICTIONARY (11th ed. 2019)
(“Doubtfulness or uncertainty of meaning or intention . . . .”).
Moreover, the Texas Supreme Court has unequivocally instructed that “[c]ourts construe
unambiguous guaranty agreements as any other contract.” Moayedi, 438 S.W.3d at 7. Therefore,
even if the court were to accept Royal’s assertion that the meaning of the Guaranty Agreement is
uncertain but not ambiguous, the court must nevertheless apply general principles of contract
construction to interpret the Guaranty Agreement. Indeed, multiple courts have rejected other
guarantors’ arguments that unambiguous guaranty agreements should be construed in their favor.
See Riverstone CLA Partners, Ltd. v. Child.’s Learning Adventure USA, LLC, No. CV H-19-2822,
2020 WL 1896708, at *2 (S.D. Tex. Feb. 24, 2020) (opining that the rule that “guaranty
agreements are to be strictly construed in favor of the guarantor . . . ‘only applies when ordinary
rules of contract construction render the parties’ obligations uncertain or ambiguous’” (quoting
JMW Partners, L.P. v. Northstar Bank of Tex., No. 2-09-167-CV, 2010 WL 2331399, at *4 (Tex.

16

App.—Fort Worth June 10, 2010, no pet.))); Ranch 620 Retail Partners, Ltd. v. Sodja, No.
H-19-2825, 2019 WL 7372488, at *3 n.3 (S.D. Tex. Dec. 31, 2019) (explaining that, because
guaranty agreements are strictly construed in favor of the guarantor “only where the guaranty is
ambiguous,” the court would construe the unambiguous guaranty agreement “as a matter of law
and [would] enforce it according to its terms”); Kelley v. Kelley, No. 14-14-00519-CV, 2015 WL
3799693, at *3 (Tex. App.—Houston [14th Dist.] June 18, 2015, no pet.) (dismissing the
guarantor’s argument that the agreement “should be construed in favor of the guarantor” as
“inapplicable” because the guaranty agreement was “not ambiguous”). Thus, the court declines
to construe the Guaranty Agreement in Royal’s favor absent a determination that the agreement
is ambiguous.
Royal’s related assertion that the rule of strictissimi juris similarly obligates the court to
construe any “uncertainty” in a guaranty agreement in favor of the guarantor is likewise
unavailing. In fact, Texas courts have clarified that the rule of strictissimi juris applies only after
the terms of a guaranty agreement have been determined. See McKnight v. Va. Mirror Co., 463
S.W.2d 428, 430 (Tex. 1971) (“After the terms of a guaranty agreement have been ascertained,
the rule of strictissimi juris applies, meaning that the guarantor is entitled to have his agreement
strictly construed and that it may not be extended by construction or implication beyond the
precise terms of his contract.” (emphasis added)); Jallan v. PNA Invs., LLC, No.
14-21-00460-CV, 2023 WL 5316877, at *4 (Tex. App.—Houston [14th Dist.] Aug. 18, 2023, no
pet.) (“According to the rule of strictissimi juris, a guarantor may require that the terms of his
guaranty be strictly followed, and that the agreement not be extended beyond its precise terms by
construction or implication. Before we can apply the rule of strictissimi juris, however, we must

17

examine the terms of the guaranty based on the language of the contract.” (citations omitted));
Kelley, 2015 WL 3799693, at *3 (stating that the rule of strictissimi juris, which “applies after the
terms of the guaranty have been ascertained,” “does not abrogate the touchstone of contract
interpretation, which is to seek the true intent of the parties who executed the contract”);
Wasserberg, 376 S.W.3d at 206 (“Before we can apply the rule of strictissimi juris, however, we
must examine the terms of the guaranty based on the language of the contract.” (citing Fed.
Deposit Ins. Corp. v. Attayi, 745 S.W.2d 939, 943-44 (Tex. App.—Houston [1st Dist.] 1988, no
writ))); see also Citgo Petroleum Corp. v. Fid. & Deposit Co. of Md., No. H-16-0952, 2016 WL
6476997, at *4 (S.D. Tex. Nov. 1, 2016) (“The principle of strictissimi juris applies only to the
extension of a surety by construction or implication; it is not a canon of construction.”).
Accordingly, the doctrine of strictissimi juris will play no role in the court’s determination of
whether the Guaranty Agreement, by its own terms, limits its assignment to only a lender.
2.

The Guaranty Agreement Does Not Limit Assignment to “a Lender”

Paragraph 13 of the Guaranty Agreement provides:
Guarantor5 acknowledges and agrees that (a) Lessor6 may collaterally assign all of
its right, title and interest under the Lease and this Guaranty to a lender; and (b)
upon the exercise of any lender’s remedies set forth in related loan documents, all
of the rights, powers and privileges of Lessor shall be deemed the rights, powers
and privileges of such lender and such lender shall be entitled to exercise all of the
rights and remedies of “Lessor” under this Guaranty, the Lease and such loan
documents. Guarantor hereby consents to, and no further consent by Guarantor
shall be required for, any further assignment of rights of Lessor hereunder or in
connection with any transfer by Lessor. All notices, certificates, reports or other
information required to be delivered to Lessor under this Guaranty shall be
5

The Guaranty Agreement defines “Guarantor” as “Royal Texas LLC, a Delaware limited liability
company.”
6

The Guaranty Agreement defines “Lessor” as “Store Investment Corporation, a Delaware
corporation (together with its successors and assigns under the Lease . . . ).”

18

delivered simultaneously to such lender. Notwithstanding any provision herein to
the contrary, this Guaranty shall not be deemed to create any obligation of or
liability for such lender. Guarantor intends that such lender shall be an intended
third party beneficiary of this Guaranty but without any corresponding
responsibility, liability or obligation to Guarantor.
Here, the court concludes that the Guaranty Agreement is unambiguous, rendering the rule
that ambiguities must be construed in favor of the guarantor inapplicable. Rather, applying the
plain, ordinary, and generally accepted meanings of the terms in the Guaranty Agreement and
considering the instrument as a whole, the court is of the opinion that the Guaranty Agreement
does not restrict its assignment to only a lender. For one matter, the Guaranty Agreement utilizes
discretionary language in stating that “Guarantor acknowledges and agrees that (a) Lessor may
collaterally assign all of its right, title and interest under the Lease and this Guaranty to a lender”
(emphasis added). The mere fact that the Guarantor “acknowledges and agrees” that the Lessor
“may” assign the Lease and Guaranty Agreement to a lender does not necessarily lead to the
conclusion that the Lessor may assign the Lease and Guaranty Agreement only to a lender. The
court agrees with Dubier that this language merely indicates that a lender is “one acceptable
assignee.”
Moreover, beyond the lack of mandatory language limiting assignment to only a lender,
¶ 13 contains a sweeping phrase signaling the Guarantor’s broad agreement to the Lessor’s
unfettered ability to assign the Guaranty Agreement: “Guarantor hereby consents to, and no
further consent by Guarantor shall be required for, any further assignment of rights of Lessor
hereunder or in connection with any transfer by Lessor.” This sentence lacks any reference to a
lender and, in addition, employs expansive language indicating the Guarantor’s consent to “any
further assignment” of the Lessor’s rights “in connection with any transfer by Lessor” (emphasis

19

added). As such, this sentence necessarily encompasses the Lessor’s assignment of the Guaranty
Agreement to non-lender assignees and memorializes the Guarantor’s consent to such a “transfer”
of the Lessor’s rights under the Guaranty Agreement.7
Interpreting this sentence as referring to other types of assignments or transfers beyond the
previously described collateral assignment to a lender is in keeping with the court’s obligation to
construe a contract in a manner that “gives each word meaning,” as such a construction “is
preferable to [an interpretation] that renders one surplusage.” Stewart, 855 F. App’x at 200.
Indeed, if this sentence were construed as merely reaffirming the Guarantor’s assent to the
Lessor’s ability to assign the Guaranty Agreement to a lender, it would be a superfluous reiteration
of the preceding sentence’s statement that “Guarantor acknowledges and agrees” that the Lessor
“may collaterally assign . . . to a lender.” Such an interpretation of redundance would render this
sentence a disfavored surplusage. Instead, an interpretation that gives every phrase of the contract
meaning understands ¶ 13’s mentioning “any further assignment of rights of Lessor hereunder or
in connection with any transfer by Lessor” as referencing a different type of assignment or transfer

7

The court notes that its conclusion derives no support from Dubier’s argument that other sections
of the Guaranty Agreement—including the introductory paragraph and ¶ 14—reference the Lessor’s
“successors and assigns” without making any mention of a lender. Dubier’s assertion ignores the principle
that “a specific contract provision controls over a general one.” Mosaic Baybrook One, L.P., 674 S.W.3d
at 257 (quoting Pathfinder Oil & Gas, Inc., 574 S.W.3d at 889); see Cedar Contracting, Inc. v.
Hernandez, No. 03-11-00327-CV, 2014 WL 709560, at *6 (Tex. App.—Austin Feb. 21, 2014, pet.
denied) (“It is clear, however, that any reference to assigns, must be ‘construed in the light of the context
of the rest of the contract as written.’ It is generally understood that, notwithstanding a reference to
assigns, other terms in the contract may show . . . that assent to assignment is limited or that there is no
assent.” (quoting Penick v. Eddleman, 291 S.W. 194, 194 (Tex. Comm’n App. 1927))). Here, ¶ 13, as
demonstrated by both its title—“13. Assignment”—and its contents, specifically articulates the parties’
intent regarding assignment of the Guaranty Agreement. As a result, any general references to “successors
and assigns” in other provisions of the Guaranty Agreement must necessarily be informed by any
specifications or limitations on assignment set out in ¶ 13, the provision governing assignment.
Nonetheless, the court is unpersuaded by Royal’s assertion that ¶ 13 contains any restrictions limiting
assignment to only a lender.

20

than the collateral assignment to a lender to which the Guarantor had already agreed in the prior
sentence.
Royal maintains that construing ¶ 13 to permit assignment to anyone other than a lender
would render clause (b) of the paragraph ineffectual. Such is not the case. Rather, clause (b)
becomes effective in the instance that the Guaranty Agreement is “collaterally assign[ed] . . . to
a lender” in accordance with clause (a). A “collateral assignment” is an “assignment of rents”
that grants a security interest in the assignee. In re Lack’s Stores, Inc., No. 10-60149, 2012 WL
3043093, at *7-8 (Bankr. S.D. Tex. July 25, 2012); see Marhaba Partners Ltd. P’ship v. Kindron
Holdings, LLC, 457 S.W.3d 208, 219 (Tex. App.—Houston [14th Dist.] 2015, pet. denied)
(describing a collateral assignment as a “transaction by which the [property] is delivered by the
debtor and accepted by the creditor, but legal title does not pass to the secured party.” (quoting
Coffey v. Singer Asset Fin. Co., L.L.C., 223 S.W.3d 559, 566 (Tex. App.—Dallas 2007, no
pet.))); Coffey, 223 S.W.3d at 566 (“[T]o ‘collaterally assign’ means to assign property as
collateral security for a loan.” (citing Assignment, BLACK’S LAW DICTIONARY (8th ed. 2004))).
Importantly, an assignee of a collateral assignment cannot “collect[] rent until he ‘[takes]
affirmative action . . . to perfect an interest in the payment.’” In re Lack’s Stores, Inc., 2012 WL
3043093, at *8 (quoting In re Spears, 352 B.R. 83, 90 (Bankr. N.D. Tex. 2006)); see In re
Amaravathi Ltd. P’ship, 416 B.R. 618, 629 (Bankr. S.D. Tex. 2009) (“An important caveat with
‘collateral’ assignments is that the lender must take some affirmative action to ‘activate’ its rights
to the rents.” (citing Taylor v. Brennan, 621 S.W.2d 592, 594 (Tex. 1981))). Thus, clause (b)’s
reference to the lender’s exercise “of any lender’s remedies set forth in related loan documents”

21

merely references the necessary “affirmative action” that a lender must take to perfect its interest
in a collateral assignment.
In contrast to collateral assignments, “[a]n assignment generally means the transfer or
setting over of property, or some right or interest. In an absolute assignment, the assignor loses
all control over the property assigned and can do nothing to defeat the rights of the assignee.”
Vertical N. Am., Inc. v. Vopak Terminal Deer Park, Inc., No. 14-15-01088-CV, 2017 WL
4197027, at *3 n.2 (Tex. App.—Houston [14th Dist.] Sept. 21, 2017, pet. denied) (citing Coffey,
223 S.W.3d at 570; Univ. of Tex. Med. Branch at Galveston v. Allan, 777 S.W.2d 450, 453 (Tex.
App.—Houston [14th Dist.] 1989, no writ)); see Sanders Oil & Gas, Ltd. v. Big Lake Kay
Constr., Inc., 554 S.W.3d 79, 91 (Tex. App.—El Paso 2018, no pet.); Marhaba Partners Ltd.
P’ship, 457 S.W.3d at 219; 49 AM. JUR. 2D Landlord & Tenant § 752 (2024) (distinguishing “an
assignment of the lease” from “[t]he assignment of rent to accrue,” which does not “effect a
transfer of the lessor’s reversionary interest in the property”). Notably, immediately following
clauses (a) and (b)’s discussion of the Lessor’s ability to “collaterally assign all of its right, title
and interest under the Lease and this Guaranty to a lender,” ¶ 13 states in more general terms that
“Guarantor hereby consents to, and no further consent by Guarantor shall be required for, any
further assignment of rights of Lessor hereunder or in connection with any transfer by Lessor.”
Whereas clauses (a) and (b) specifically reference “a lender” and “collateral[] assign[ment],” the
subsequent sentence contains no such language and instead speaks broadly of the Guarantor’s
consent to “any further assignment” and “any transfer.”8 Thus, this general sentence in ¶ 13

8

Neither party offers an interpretation of “further assignment.” The court is of the opinion that
the only reasonable interpretation of this phrase is as a reference to any assignment of the Guaranty
Agreement besides the aforementioned possibility of collateral assignment to a lender. Such an

22

encompasses the sort of “absolute assignment” discussed above, where the Lessor assigns all of
its interests in the Guaranty Agreement to the assignee—in other words, the type of assignment
that Dubier argues that she received. Accordingly, the assignment of the Guaranty Agreement to
a non-lender does not, as Royal argues, render clause (b) “unworkable”; instead, clause (b)’s
application is merely contingent upon a collateral assignment to a lender under clause (a), which
is but one possible type of assignment that is permissible under ¶ 13. In other words, clause (b)
is applicable only in the event that the Guaranty Agreement is assigned to a lender, as a lender that
receives a collateral assignment, unlike assignees that receive absolute assignments, must take
additional steps—such as “the exercise of any lender’s remedies set forth in related loan
documents”—in order to perfect its interest in the assignment.
Royal further asserts that interpreting ¶ 13 of the Guaranty Agreement to permit
assignment to other assignees besides lenders requires “re-writ[ing]” the paragraph and improperly

interpretation considers “further assignment” as meaning either “an additional type of assignment” or an
assignment “to a greater degree or extent” than a collateral assignment. See Further, CAMBRIDGE
DICTIONARY, https://dictionary.cambridge.org/us/dictionary/english/further (last visited June 3, 2024)
(defining “further,” in relevant part, as “more, extra, or additional”); Further, MERRIAM-WEBSTER
DICTIONARY, https://www.merriam-webster.com/dictionary/further (last visited June 3, 2024) (defining
“further” as meaning, inter alia, “to a greater degree or extent,” “in addition,” or “going or extending
beyond”). The court reaches this conclusion because the alternative—construing “further assignment” to
reference a hypothetical successive assignment from a lender to a subsequent assignee—would be illogical.
There is no plausible explanation why the Guaranty Agreement would provide that “no further consent by
[Royal] shall be required for” an assignment that occurs only after the Guaranty Agreement has first been
assigned to a lender. This is particularly true in light of the fact that Royal has no right to consent to the
assignment to a lender, either, as ¶ 13 states that “Guarantor acknowledges and agrees” that the Lessor
may collaterally assign the Guaranty Agreement to a lender. The court is accordingly unconvinced that
interpreting “further assignment” as referencing a successive assignment from a lender to a subsequent
assignee would be “reasonable,” particularly when the paragraph is devoid of any language demonstrating
the parties’ intention to restrict the contract’s assignment solely to a lender. In short, the court determines
that the only reasonable reading of this sentence in ¶ 13 is as a statement of Royal’s consent to any “further
assignment” that the Lessor might make as an alternative to the previously described collateral assignment
to a lender.

23

inserting language that is not present.9 The court disagrees. On the contrary, construing ¶ 13 as
allowing assignment to non-lenders requires no alteration to the language of the contract as
written. The paragraph merely mentions collateral assignment to a lender as one possibility and
contains no restrictions or limitations on other assignments. Indeed, the paragraph goes on to state
that “no further consent” from Royal is required for “any further assignment” of the Lessor’s
rights “hereunder or in connection with any transfer by Lessor.” As Royal itself points out,
“[c]ourts will not rewrite agreements to insert provisions parties could have included or to imply
restraints for which they have not bargained.” ExxonMobil Corp. v. Elec. Reliability Servs., Inc.,
868 F.3d 408, 415 (5th Cir. 2017) (quoting Tenneco Inc. v. Enter. Prods. Co., 925 S.W.2d 640,
646 (Tex. 1996)); Devon Energy Prod. Co., L.P. v. Sheppard, 668 S.W.3d 332, 343 n.41 (Tex.
2023). Although Royal cites this canon of construction in an effort to undermine Dubier’s
position, it is Royal’s argument that is frustrated by this rule. The Guaranty Agreement, as
written, contains no restrictions on assignment, and the court refuses to read in such a limitation
that was neither bargained for by the parties nor included in the language of the contract.

9

Royal’s reply includes an example of how, in its view, Dubier’s proposed construction of ¶ 13
would require substantial revisions to the language of the paragraph in order to provide for assignment to
non-lenders. The salient portions of Royal’s example of such revisions include:
Guarantor acknowledges and agrees that (a) Lessor may collaterally assign all of its right,
title and interest under the Lease and this Guaranty to [anyone, including] a lender; and
(b) upon the exercise of any [assignee’s or] lender’s remedies set forth in [any] related
loan documents, all of the rights, powers and privileges of Lessor shall be deemed the
rights, powers and privileges of such [assignee or] lender and such [assignee or] lender
shall be entitled to exercise all of the rights and remedies of “Lessor” under this Guaranty,
the Lease and such loan documents. Guarantor hereby consents to, and no further consent
by Guarantor shall be required for, any further assignment of rights of Lessor hereunder
or in connection with any transfer by Lessor [to a non-lender assignee].

24

In reaching this determination, the court is guided by the principle that “the presumption
or general rule under Texas law . . . is that all contracts are freely assignable.” Intertek Asset
Integrity Mgmt., Inc. v. Dirksen, No. 12-20-00060-CV, 2021 WL 1047055, at *4 (Tex.
App.—Tyler Mar. 18, 2021, no pet.) (quoting In re FH Partners, L.L.C., 335 S.W.3d 752, 761
(Tex. App.—Austin 2011, orig. proceeding)); see Rampick v. ZDS Holdings, LLC, No.
03-16-00054-CV, 2016 WL 3677511, at *1 (Tex. App.—Austin July 8, 2016, no pet.) (“The
general rule in Texas is that all contracts are freely assignable unless the contract expressly
provides otherwise.”). In fact, “Texas law has long been said to be quite ‘liberal’ in favoring
assignment.” Intertek Asset Integrity Mgmt., Inc., 2021 WL 1047055, at *4 (quoting In re FH
Partners, L.L.C., 335 S.W.3d at 763); see Visual Edge IT, Inc. v. Vaughan, No. 4:20-CV-04220,
2022 WL 9392564, at *3 (S.D. Tex. Oct. 13, 2022) (“Texas law presumes contracts are freely
assignable.” (citing Dittman v. Model Baking Co., 271 S.W. 75, 77 (Tex. Civ. App. 1925))).
This presumption of freedom of assignability extends to guaranty agreements. See McLane
Foodservice, Inc. v. Table Rock Rests., LLC, No. W-11-CA-111, 2012 WL 12898574, at *2
(W.D. Tex. Aug. 23, 2012) (explaining that, as a general matter, “all contracts are assignable,”
and “[a] guaranty is a contract and is evaluated as any other contract” (citing Crowell v. Bexar
County, 351 S.W.3d 114, 117 (Tex. App.—San Antonio 2011, no pet.); Cloughly v. NBC
Bank-Seguin, N.A., 773 S.W.2d 652, 655 (Tex. App.—San Antonio 1989, writ denied))),
amended in part sub nom. McLane Foodservice, Inc. v. Table Rock Rests., Inc., No. CV
W-11-CA-111, 2012 WL 12898545 (W.D. Tex. Nov. 16, 2012); Rampick, 2016 WL 3677511,
at *1 (concluding that a guaranty agreement executed between the guarantor and a lender was
assignable where it provided that its references to “Lender” “include[d] [the Lender’s] successors

25

and assigns” and the agreement contained “no provisions . . . expressly prohibiting assignment”);
see also Miller v. Pawnee Leasing Corp., No. 01-18-00429-CV, 2020 WL 477214, at *7-9 (Tex.
App.—Houston [1st Dist.] Jan. 30, 2020, no pet.) (affirming the trial court’s grant of summary
judgment to the assignee on its claim against the guarantor for breach of the guaranty agreement).
Nevertheless, “parties have the right to contract as they see fit as long as their agreement
does not violate the law or public policy.” In re Hughes, 513 S.W.3d 28, 32 (Tex. App.—San
Antonio 2016, pet. denied) (quoting In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 129 &
n.11 (Tex. 2004)). Thus, parties may agree to include anti-assignment clauses or limitations on
assignment in their contracts, and such clauses are generally “enforceable unless rendered
ineffective by a statute.” Id. (citing Reef v. Mills Novelty Co., 89 S.W.2d 210, 211 (Tex.
Comm’n App. 1936)); see 54 Broad., Inc. v. Lin Television of Tex., L.P., No. A-08-CA-030-SS,
2008 WL 7836303, at *5 (W.D. Tex. Dec. 3, 2008) (concluding that an option agreement
“contain[ed] a clear restriction on assignability in the language of the contract” where “[t]he plain
language” provided that the contract may be assigned to “any third party that is not an affiliate of
[the defendant]”); Trimble v. OneWest Bank, No. 14-16-00641-CV, 2017 WL 3666519, at *3
(Tex. App.—Houston [14th Dist.] Aug. 24, 2017, pet. denied) (upholding the trial court’s
enforcement of an anti-assignment clause stating that the borrower “may not assign any rights or
obligations under the Security Instrument or under the Note, except to a trust that meets the
requirements of the Secretary”).
In the present case, as explained above, the Guaranty Agreement contains no language
controverting the presumption of freedom of assignment. The references to “a lender” in ¶ 13 are
permissive, rather than restrictive, and the paragraph further recognizes the Guarantor’s

26

comprehensive consent to “any further assignment of rights of Lessor hereunder or in connection
with any transfer by Lessor.” As a result, Royal’s argument that the Guaranty Agreement limits
its assignment to only a lender is unavailing. The court concludes that the Guaranty Agreement
could properly be assigned to Dubier as Trustee of the Trust.10
III.

Conclusion
In accordance with the foregoing, Royal’s Motion for Summary Judgment (#66) is

DENIED. There exist genuine disputes of material fact with respect to Dubier’s claim of breach
of the guaranty agreement. Dubier, therefore, may proceed to trial on her claim against Royal.
SIGNED at Beaumont, Texas, this 5th day of June, 2024.

________________________________________
MARCIA A. CRONE
UNITED STATES DISTRICT JUDGE

10

Because the court determines that the Guaranty Agreement does not preclude assignment to
non-lenders, the court does not reach Dubier’s alternative argument that the Trust is a lender.

27