PlainsCapital Bank will not get to have the Fifteenth Court of Appeals decide its dispute with a group of Louisiana businessmen over a guaranty to repay a $29.5 million loan.
In a one-sentence order issued Wednesday, the Texas Supreme Court denied the bank’s request to have the case transferred from the Fifth Court of Appeals in Dallas to the newly created Fifteenth Court of Appeals in Austin. The court did not offer an explanation for the decision.
Jeff Tillotson of Tillotson Johnson & Patton, who represents the guarantors, told The Lawbook on Thursday he believes the Texas Supreme Court reached the “right result.”
“We look forward to appearing before the new Fifteenth Court of Appeals in many future cases; it’s just that this single case didn’t belong there,” he said.
Counsel for PlainsCapital was not immediately available to comment Thursday.
PlainsCapital filed notice in May that it was appealing to the Dallas Court of Appeals, trying to undo a trial court’s take-nothing judgment entered in a dispute between the bank and Louisiana businessmen Jerry Webb, Craig Webb and Stephen Herbel and a Dallas lawyer who died during the pendency of litigation, Patrick Mulligan.
In the underlying case, both PlainsCapital and the businessmen claim to be the victims of a Ponzi scheme perpetrated by David DeBerardinis, a Shreveport businessman in prison for wire fraud to whom PlainsCapital gave a loan. The Webbs, Herbel and Mulligan were sued by the bank after DeBerardinis defaulted on a $29.5 million loan that the four men guaranteed.
On Sept. 10, PlainsCapital filed a motion seeking a permissive transfer of the case to the Fifteenth Court of Appeals. The case was among the first, if not the first, where a permissive transfer to the new Fifteenth Court of Appeals was sought by one party and opposed by the other.
A main point of contention in the briefing was whether the dispute centered on a bank loan — which would deprive the Fifteenth Court of Appeals of exclusive jurisdiction over the case under Texas Government Code section 25A.001(14) — or if it centered on a guaranty agreement.
Scott Luedke, executive vice president and general counsel of PlainsCapital Bank, issued a statement at that time arguing that the case was a prime candidate to be decided by the new appellate court.
“The predictable enforceability of unambiguous guaranty contracts is critical to a variety of business transactions in Texas, and the Fifteenth Court was created to resolve high-stakes business disputes like this one,” he said.
The guarantors argued the facts of the case clearly deprived the Fifteenth Court of Appeals of exclusive jurisdiction.
“Had DeBerardinis paid the loan back to PlainsCapital Bank or had PlainsCapital Bank not made or extended the loan, this case wouldn’t exist,” they argued. “Indeed, the damages PlainsCapital Bank sought at trial were the very amounts it claimed it was due on the loan balance. Thus, there can be no question that this case arises from a transaction ‘involving’ a loan by PlainsCapital Bank.”
PlainsCapital is represented by Kyle D. Hawkins, Andrew B. Davis and Leah F. Bower of Lehotsky Keller Cohn and Tom Melsheimer, Geoff Harper and John Sullivan of Winston & Strawn.
The guarantors are also represented by Jonathan R. Patton, J. Austen Irrobali and Stephani A. Michel of Tillotson Johnson & Patton.
The case number in the Supreme Court is 24-9066. The case number in the Fifth Court of Appeals is 05-24-00572-CV.