Tow v. Amegy Bank N.A. et al

Filing 497

MEMORANDUM AND OPINION entered: DENYING 493 MOTION to Compel Compliance with Order Approving Settlement and Enforcing Terms of Settlement Order MOTION to Enforce as to 480 Order on Motion for Protective Order,, Order on Motion for Reconsideration,, Order on Sealed Motion,, Order on Motion to Withdraw Reference,, Order on Motion for Miscellaneous Relief,, Order on Motion to Vacate, 478 . (Signed by Chief Judge Lee H Rosenthal) Parties notified.(leddins, 4)

United States District Court
Southern District of Texas

ENTERED
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
RODNEY TOW, TRUSTEE,
Plaintiff,
vs.
JOHN H. SPEER,
Defendant.

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September 27, 2021
Nathan Ochsner, Clerk

CIVIL ACTION NO. H-11-3700

MEMORANDUM OPINION AND ORDER DENYING MOTION TO COMPEL
This 2011 case was resolved in 2015 by a jury verdict followed by a mediated settlement
agreement. The settlement parties were Rodney Tow, the chapter 7 trustee of the bankruptcy estate
of Royce Homes, L.P.; John Speer, named as a defendant in an adversary proceeding by the
Trustee, as the former principal of Royce Homes; and Amegy Bank, another defendant in the
adversary proceeding. The court authorized the trustee to enter into the settlement, which the
parties negotiated and drafted. The drafting required a number of documents.
One set of documents concerned Speer’s agreement to secure a $1 million nonrecourse
note with a first lien deed of trust on a large tract of land. If Speer did not timely satisfy the debt
owed under the nonrecourse note, the debt would be nonrecourse as to Speer, but the trustee had
the right to foreclose on a first lien deed of trust on that tract of land to satisfy the $1 million loan.
Other documents addressed the final settlement agreement and release, the deed of trust on
the large tract of land and its description, and notes. After months of work and many revisions to
the closing documents, the settlement concluded on January 28, 2016. The day before, the parties
exchanged copies of the documents that were to be signed at the closing that would occur the

following day. On the date of the closing, the parties, and the documents, were all in the room
where the closing occurred. The Title Company closer, not Speer, presented the documents for
the parties and their lawyers to review and execute.
Now, over five years later, Tow argues that Speer and his counsel deliberately arranged to
have an incorrect version of a Note signed at the closing. According to Tow, Speer slipped in a
version of the Note that added two paragraphs giving Speer a potential offset or credit to the $1
million nonrecourse debt obligation. Tow argues that he did not know of this provision or approve
it. Tow moves to compel compliance with the obligations in the version of the Note without the
offset or credit provision. (Docket Entry No. 493).
Speer has responded in detail. (Docket Entry No. 495). He points out that the closing
documents had been provided to, and approved by, the parties in advance of the closing itself. He
points out that at the closing, each party, represented by separate counsel, had another opportunity
to review the documents before signing. Speer denies any effort to “sneak” an unauthorized
version of the Note into the Closing Document Package that the Title Company closer—not
Speer— presented to the parties for review and signature. Tow and his lawyer were present,
received and had the chance to read each document as it was presented by the Title Company, and
signed.
Speer points out that this court’s order approving the settlement agreement required the
parties to advise the court of issues preventing consummation within 14 days after the settlement
was entered. That date occurred in January 2016. The fact that no issue was raised until September
2021 raises issues that include waiver, lack of diligence, limitations, and lack of support.
There is no basis for this court to find that Speer failed to comply with the agreements that
the parties signed. There is no basis to find that the parties signed agreements that they did not

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have the opportunity to read and review. There is no basis to find that Speer lured or deceived
Tow into signing a version of the Deed that Tow did not intend to sign or know he was signing.
There is no basis to ignore limitations or ignore the fact that in the years since the documents were
signed, properties have been sold and payments have been received.
The record shows that the number of lawyers exchanging a large number of documents did
result in confusion over the documents—a “mixup in documents”—in the days before the closing
occurred. (Docket Entry No. 495, Exs. 1, 2). The record shows that after a number of email
exchanges, the parties resolved the confusion. When the parties and counsel gathered to review
and sign the closing documents, no issue was raised at about whether an improper version of any
document was presented for signature. There is, in short, no record basis to compel further or
different action on the part of Speer.
Tow’s Motion to Compel Compliance with Order Approving Settlement and Enforcing
Terms of Settlement, (Docket Entry No. 493), is denied.
SIGNED on September 27, 2021, at Houston, Texas.

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Lee H. Rosenthal
Chief United States District Judge

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