PLAINTIFF RESPONSE TO INTERVENOR'S AMENDED PLEA IN ABATEMENT - Plea in Abatement May 29, 2020 (2024)

 
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 FILED 5/26/2020 11:33AM FELICIA PITRE DISTRICT CLERK DALLAS CO., TEXAS Lafonda Sims DEPUTY DC-13-03044 ALAN GERTNER, as legal representative 0f § IN THE DISTRICT COURT and for the ALAN D. GERTNER, IRA; et § al., § Plaintiffs, § VS. § 160th JUDICIAL DISTRICT § HQZ PARTNERS, L.P.; et al., § § Defendants. § DALLAS COUNTY, TEXAS PLAINTIFFS’ RESPONSE TO INTERVENORS’ AMENDED PLEA IN ABATEMENT TO THE HONORABLE JUDGE REDMOND: NOW COME Plaintiffs The Alan D. Gertner, IRA and Sunwest Trust, Inc. (collectively “IRA” 0r “Plaintiffs”) and file this Response t0 Intervenors’ Amended Plea in Abatement, filed May 22, 2020 (“Plea”), and would respectfully show the Court as follows: SUMMARY One of the below is accord With and the other contradicts the Court of Appeals’ Opinion. The IRA’S capacity t0 enforce the Note individually is: (1) an issue 0n the merits; (2) a threshold issue. Intervenors represent t0 the Court that said capacity is the latter despite clear language by the appellate Opinion that itgoes “to the merits of the claims.” Intervenors then parley disregard 0f the Court 0f Appeals into a theory that in a plea in abatement capacity is (i) Plaintiffs’ burden to prove (though the law says it isnot) and (ii)—0n disputed issues 0f fact—established in favor of Intervenors as a matter of law (in the pretrial phase 0r in a disguised summary judgment motion). Telling 0f Intervenors’ substantive intent, their prayer reads (with emphasis added): Intervenors pray that, if Gertner cannot provide evidence and case law that supports the position that it has the legal authority or capacity to assert a suit 0n the Note and Guaranties as currently pled in his live petition, sustain this plea [sic] and require Gertner t0 replead within seven (7) days 0f sustaining the plea. Intervenors also seek a ruling that, if Gertner cannot cure its lack 0f capacity, t0 dismiss Plaintiffs’ claims 0n the Note and Guaranties. Intervenors also seek any other and fithher relief t0 Which Intervenors may be entitled that is consistent With this Plea in Abatement. The Court should deny Intervenors’ Amended Plea in Abatement. 1. A trial court’s decision 0n a plea in abatement is reviewed for an abuse of . . . . . . 1 dlscretlon, 1.6.,Whether made 1n an unreasonable and arbltrary manner, 0r Wlthout reference t0 . . . . 2 any gu1d1ng rules or prmmples. 2. “The burden remains 0n the [movant] t0 prove the allegations in his plea in [3] abatement, even though his plea is verified.”4 As the party challenging capacity, Intervenors bear the burden to prove lack 0f capacity.5 :96 3. Capacity exists when a party “has the legal authority to act, that is, “legal 997 authority t0 go into court to prosecute a suit. “Capacity concerns whether a party has a personal right to come into court, not whether ithas an enforceable right 0r interest.”8 4. As to Plaintiffs’ there is no partnership agreement 0r joint venture agreement in this matter; specifically, the Plaintiffs have never executed any contract With the “Lending Group Joint Venture” or any 0f its members.9 Said joint venture did not exist until April 16, 2020.10 5. There is a partnership agreement“ showing that Intervenor Mesuria Investments, LLC (“Mesuria”), is a partner in and 0f Defendant HQZ Partners, LP. (“HQZ”): a lender in the 1 Wyatt v. Shaw Plumbing C0., 760 S.W.2d 245, 248 (Tex. 1988); Shutter v. Wells Fargo Bank, 318 S.W.3d 467, 469-70 (TeX.App.—Dallas 2010, pet. dism’d w.0.j.). 2 Downer v. Aquamarine Operators, Ina, 701 S.W.Zd 238, 241-42 (Tex. 1985). 3 Flowers v. Steelcraft Corporation, 406 S.W.2d 199 (TeX. 1966). Tex. Emp’rs Ins. Ass ’n v. Baeza, 584 S.W.2d 317, 321 (TeX.CiV.App.—Amarillo 1979, no writ); Railroad Commission v. Shell Oil C0., 164 S.W.2d 773, 774 (Tex.CiV.App.—Austin 1942, writ refd). 5 Christi Bay Temple v. GuideOne Specially Mut. Ins. C0., 330 S.W.3d 251, 253 (Tex. 2010) (finding n0 evidence 0f lack 0f capacity; reversing lower courts’ abatement); Flowers, 406 S.W.2d at 199. 6 Green Tree Servicing, LLC v. Woods, 388 S.W.3d 785, 789-90 (TeX.App.—Hou. [lst Dist] 2012, n0 pet.)(affirming a debt servicer’s capacity t0 prosecute recovery 0n a note/debt). v. Headhunter Fitness, L.L.C., N0. 05—13-00506—CV, 2015 WL 6750047, at *14 7 Fitness Evolution, LP. (TeX.App.—Dallas NOV. 4, 2015, n0 pet.) (mem. 0p. 0n reh’g); Coastal Liquids Transp, L.P. v. Harris County Appraisal Dist, 46 S.W.3d 880, 884 (Tex. 2001)(“a party has capacity When it has the legal authority t0 act”)(emphasis in original). 8 Green Tree Servicing, 388 S.W.3d at 789 (citing Lovato, 171 S.W.3d at 849). 9 (Attached May 26, 2020, Affidavit 0f Alan Gertner (“Gertner Aff.”) infra at 55 1W 2-3). 10 (Intervenors’ Exhibit 30.). 11 (Exhibit H; id. at 75 and 76.). Pls.’ Resp. t0 Intrv’rs’ Am. Plea in Abatement 2 Note, Mesuria, is a member 0f the borrower, HQZ. The HQZ partnership agreement shows that Intervenor Walter Capital Servicing’s (“WSC”) sole-owner, Defendant Ray Walter (“Walter”) is a partner in and of HQZ. Walter executed the guaranty securing the Note. On information and belief, the remaining Intervenors (0r the recently formed Lending Group Joint Venture)” are executing agreement(s) t0 become member(s) 0f the borrower, HQZ—thereby standing 0n both sides of the Note as lenders and borrower. 6. In this matter, there is n0 conveyance, assignment or transfer, from Plaintiffs to any party, 0f the right t0 recover 0n the $560,000 debt Defendants owe t0 Plaintiffs; specifically, the Plaintiffs have never executed any instrument conveying t0 0r placing in the name 0f the “Lending Group Joint Venture” (0r any 0f its members) any of Plaintiffs’ property or rights.” 7. On April 15, 2019, Plaintiffs filed their jury demand and paid the jury fee. A11 Parties have pleaded Rule 93 capacity. As it is here, once the issue of “capacity t0 sue is controverted” it isresolved by a “jury finding 0n this particular issue[.]”14 Therefore the parties pleading capacity are entitled t0 a jury, not a summary disposition 0n contested issues 0f fact. I. Intervenors ask the Court t0 discount and ignore the Court 0f Appeals. 8. Intervenors urge noncompliance of the Court 0f Appeals’ holding that Plaintiffs” capacity goes t0 the merits, discussed in the (i)Mandate in appeal No. 05-15-00422-CV, Gertner 12 (Intervenors’ Exhibit 30.). 13 (Gertner Aff. infra at 55 114.). 14 See Bossier City Chrysler Dodge II, Inc. v. Rauschenberg, 201 S.W.3d 787, 798—99 (TeX.App.—Waco 2006, pet. granted)(“if a verified denial is filed, the issue of the plaintiffs capacity to sue is controverted, and the plaintiff bears the burden 0f proving at trial that he is entitled to recover in the capacity in Which he has filed suit As the party With the burden 0f proof then, it is incumbent upon the plaintiff to obtain a jury finding 0n this particular issue”), rev’d in part 0n other grounds, 238 S.W.3d 376 (TeX. 2007); Damian v. Bell Helicopter Textron, Ina, 352 S.W.3d 124, 141-42 (TeX.App.—F0rt Worth 201 1, pet. denied) (at trial “it is incumbent upon the plaintiff t0 obtain a jury finding 0n this particular issue the jury charge included questions that assumed the capacity [thus litigant] deprived the trial court 0f an opportunity to correct the alleged error relating to capacity”). Pls.’ Resp. t0 Intrv’rs’ Am. Plea in Abatement 3 v. HQZ Partners, L.P., et al., entered June 21, 2017, (“Mandate”) and (ii)August 22, 2016, Memorandum Opinion (“Opinion 99).15 “A mandate is an appellate court’s formal command requiring the lower court t0 comply With the appellate court’s judgment.”16 Failing t0 properly abide by a mandate is an abuse 0f discretion.” Quoted here is the Court 0f Appeals’ Opinion: [A] party has capacity When it has legal authority t0 act regardless 0f Whether ithas a justiciable interest in the controversy. Although a party may refer to another party’s entitlement to sue 0n a contract as an issue 0f “standing,” it isnot truly a standing issue because itdoes not affect the jurisdiction 0f the court; it is a decision 0n the merits. * * * Appellees fithher assert that the IRA cannot act alone to enforce the Note and guaranties because the obligations under those contracts are owed t0 the lenders as a collective unit and can be enforced only by the lenders collectively. These arguments raise issues 0f capacity and entitlement to sue. The challenges raised by appellees to Gertner’s capacity t0 bring the suit on behalf 0f the IRA and the IRA’s ability to enforce the Note individually g0 t0 the merits 0f the claims presented. >X< >X<>X< The issue 0f the effectiveness 0f the modification and renewal is the central dligspute to be resolved in the lawsuit and goes 2‘0the merits 0f Gertner’s claims. The law is clear that “a challenge t0 capacity” is merits-based.19 The Opinion is consistent With the Court of Appeals’ precedent noted below.” 15 Germer v. HQZ Partners, L.P., er aL, No. 05—15—00422—CV, 2016 WL 4436444 (Tex.App.—Da11as Aug. 22, 2016, pet. denied) (mem. 0p.). “The scope of the mandate is determined with reference to both opinion and the mandate itself.” Cessna Aircraft C0. v. Aircraft Network, LLC, 345 S.W.3d 139, 144 (Tex.App.—Dallas 201 1, n0 pet). 16 Scott Pelley RC. v.Wynne, 578 s.W.3d 694, 699 (Tex.App.—Da11as 2019, pet. denied). 17 McFadz'n v. Broadway Cofieehouse, LLC, 539 s.W.3d 278, 283 (Tex. 2018). 18 Germer, 2016 WL 4436444 at *3 — 5 (emphasis added). 19 Mazouf, 2019 Tex. App. LEXIS 9789, at *14 (quoting Highland Credit, 451 s.w.3d at 515; accord Fitness Evolution, L.P., 2015 WL 6750047, at *14. 2° Maloufv. Sterquezl PSF Settlement, L.C., No. 05—17-01343—CV, 2019 Tex. App. LEXIS 9789, at *14 (Tex.App.—Dallas Nov. 7, 2019)(“‘challenge t0 a party’s privity 0f contract is a challenge to capacity, not standing,’ and is merits—based.”)(quoting Highland Credit Opportunities CDO, LP v. UBS AG, 451 S.W.3d 508, 515 (TeX.App.—Dallas 2014, n0 pet); Nat’l Health Res. Corp. v.TBF Fin, LLC, 429 S.W.3d 125, 128-129 (Tex.App.—Dallas 2014, n0 pet.)(“entit1[ment] t0 sue 0n a contract is, instead, a decision 0n the merits.”); John C. Flood ofDC, Inc. v. SuperMedia, L.L.C., 408 S.W.3d 645, 651 (TeX.App.— Pls.’ Resp. t0 Intrv’rs’ Am. Plea in Abatement 4 9. There are no guiding rules 0r principles 0n which to defy the Mandate and Opinion. For its part, the Court 0f Appeals will “not again pass upon any matter presented to, directly passed upon, 0r in effect disposed of 0n an earlier appeal to that court.”21 The Court 0f Appeals expressly uses the language that the “IRA’s ability t0 enforce the Note individually g0 2‘0the merits 0fthe claims presented”22 Whether it is “law 0f the case”23 0r the appellate court’s judgment as t0 “all other matters the parties might have litigated,”24 based 0n both the Mandate and Opinion, the Court may presume “that, if the [reviewing] court had meant for the district court t0 address [capacity as a threshold issue] for relief, itwould have directed the district court t0 d0 s0.”25 On the same facts/documents Intervenors’ owner raised 0n appeal, Intervenors now seek t0 relitigate the same theory artfully re—labeled With a different title. The Court may presume that if the Mandate and Opinion had meant for the Court to abate the case and if the Opinion and Mandate had not meant that the capacity issue is one going t0 the merits, the Court 0f Appeals would have directed Court to abate and t0 postpone trial 0n the merits until impediment to the continuation 0f the suit is corrected—that did not happen. 10. Plaintiffs request the Court take judicial notice under evidence rules 201 and 204 0f the public records and filings in the Fifth District Court of Appeals’ appeal No. 05—15-00422— CV (Gertner) and in the Texas Supreme Court’s appeal N0. 16-0899, HQZ Partners, L.P., et al. Dallas 2013, pet. denied)(same); James M. Clifton, I, Inc. v. Premillenium Ltd, N0. 05-08-01528—CV, 2010 WL 2089655 (TeX.App.—Dallas May 26, 2010, no pet.) (mem. op.) (same). 21 Cessna Aircraft C0., 345 S.W.3d at 149. Germer, 2016 WL 4436444 at *4. 22 23 Cessna Aircraft C0., 345 S.W.3d at 149. Cessna Aircraft C0., 345 S.W.3d at 149 (emphasis added); see EX. 3 at 4-6 (“issue was presented t0 the trial court”) and at 6-7 (“Appellees raised this same argument t0 th[e appellate] court”); see also id. at 6 (“Appellees made this same argument in several other motions as well.”). 25 Martin v. Credit Prat. Ass’n, 824 S.W.2d 254, 257 (Tex.App.—Da11as 1992, writ dism’d w.o.j.)(“We presume that, if the supreme court had meant for the district court t0 address Martin’s additional claims for relief, it would have directed the district court to do $0.”). Pls.’ Resp. t0 Intrv’rs’ Am. Plea in Abatement 5 v. Gertner. Attached hereto are Exhibits 1, and 2: Petitioner Ray Walter’s, Motion for Rehearing to the Texas Supreme Court; and Appellees Ray Walter’s Appellees’ Brief t0 the Fifth District Court 0f Appeals. 11. The opinion concluded that Plaintiffs could bring this suit:26 the court 0f appeals accept[ed] the dissenting lender’s theory that it had withdrawn its consent to be governed by agreements made by the loan servicer. Thus, itconcluded that a sole dissenting lender to a multi-party commercial loan could bring suit alleging a breach (t0 the detriment of all other lenders) even When the loan servicer had agreed to renew, modify, and extend the note, if the dissenting lender withdrew its consent to the loan servicer after the [original] transaction had been consummated (consent that was independent of the very terms of the loan in any event). (Exhibit 1 at 5, attached)(emphasis added). 12. By all precedent including the Opinion, the capacity issue is a decision 0n the merits; as such, Intervenors’ plea “that the Court determine whether [IRA] has the capacity to assert its claims prior t0 any determination 0n the merits”27 diametrically opposes the Opinion. Labeling the issue threshold and then disposing of it (pretrial) without a trial on the merits can only be done by discounting the Opinion; there must be a sound legal principle t0 hold that the Opinion’s “g0 t0 the merits of the claims” conclusion isvoid. Intervenors are otherwise asking the Court to act contrary t0 the Court 0f Appeals, 116.,unreasonable and arbitrary. Intervenors’ requested pretrial adjudication violates the: (i)Mandate, (ii) Opinion (iii) IRA’s right to its day in court and (iv) interests 0f substantial justice. For this reason alone, the Court should deny Intervenors’ Amended Motion t0 Abate. 13. Presuming, as Intervenors do, that the case’s context, procedural posture and the Opinion and Mandate can be ignored, the Plea should be denied as contrary t0 Rule 166a. 26 WSC’s sole—owner filed the quoted passage in itsmotion for rehearing t0 the Supreme Court. 27 (Plea at 4—5 119.). Pls.’ Resp. t0 Intrv’rs’ Am. Plea in Abatement 6 II. Intervenors’ ‘Plea in Abatement’28 is substantively (and prohibitively) more. 14. “A plea in abatement may not be used t0 determine the merits 0f an action?” “The use 0f a plea in abatement t0 finally dispose 0f litigation is not to be encouraged?” “The practice 0f misnaming a plea in bar t0 procure a preliminary hearing t0 dispose of a case is also discouraged.”3 1 A legitimate “dilatory plea involving a matter in abatement ‘obj ects to the place, time, 0r method 0f asserting the plaintiff’s claim but does not dispute the claim ’smerits.”’32 A truly “dilatory plea is ‘[a] plea that does not challenge the merits 0f a case but that seeks to delay 0r defeat the action on procedural grounds.”’33 15. “Because a plea in bar challenges the plaintiffs right to recover and reaches the merits 0f a case, the matter is typically disposed 0f following a trial, not in a preliminary ”34 hearing. Matters disposed of through the functional equivalent of summary judgment are reviewed “to determine Whether the movant satisfied the notice requirements and his burden of proof under Texas Rule of Civil Procedure 166a.”35 This is because “pre-trial resolution 0f affirmative defenses outside 0f the procedural safeguards 0f summary judgment procedure can result in uncertainty for the parties, trial court, and appellate courts, making review 0n appeal 28 Courts “attach no controlling effect to petitioner’s erroneous styling of its plea and we treat the plea as a plea in bar.” Tex. Highway Dept. v.Jarrell, 418 S.W.2d 486, 488 (TeX.1967). 29 KSNG Architects, Inc. v. Beasley, 109 S.W.3d 894, 898 (TeX.App.—Dallas 2003, n0 pet); Brown v. Bowers, N0. 05-07-00136-CV, 2008 WL 2152889, at *2 (TeX.App.—Da11as May 22, 2008, n0 pet.)(mem. 0p.). 30 Christi Bay Temple v. GuideOne Specialty Mut. Ins. C0., 330 S.W.3d 318, 323 (TeX.App.—C0rpus Christi, 2009) rev ’d, 330 S.W.3d 251, 253 (Tex. 2010)(n0 evidence 0f lack 0f capacity). 31 Martin v. Dosohs 1, Ltd, 2 S.W.3d 350, 354 (Tex.App.—San Antonio 1999, pet. denied)(emphasis added)(citing Kelley v. BluffCreek Oil C0., 309 S.W.2d 208, 214 (1958)). DouglaS-Peters v. Cho, Choe & Holen, P.C., N0. 05-15-01538-CV, 2017 WL 836848, at *9 (Tex.App.—Dallas Mar. 3, 2017, no pet.)(mem. 0p.)(qu0ting Plea in Abatement, BLACK’S LAW DICTIONARY) (10th ed.2014) (emphasis added). 33 Douglas—Peters, 2017 WL 836848, at *9 (quoting Dilatory Plea, BLACK’s LAw DICTIONARy). 34 Martin, 2 S.W.3d at 354 (citing Kelley, 309 S.W.2d at 214). 35 Id. (emphasis added) (citing Jarrell, 418 S.W.2d at 488). Pls.’ Resp. t0 Intrv’rs’ Am. Plea in Abatement 7 problematic. ”36 Where requested relief goes t0 the “merits of its case — not to procedural issues — itappears to be more the functional equivalent 0f a motion for summary judgment.”37 16. Intervenors are disputing the merits 0f the claims through a “plea in abatement” that tracks and mirrors their Traditional Motion for Summary Judgment against Plaintiffs, filed March 5, 2020 (“Mot”). Intervenors d0 not allege facts outside the pleadings or extrinsic to the merits as an impediment to Plaintiffs’ claims; indeed they argue the merits (a specific element 0f the claims) as the impediment as italicized here: To cure such lack of capacity for purposes 0f a plea in abatement, Gertner would be required to show, legally and factually, that Gertner is an owner and holder 0f the Note. Gertner cannot because the Note is jointly payable[.] Simply, n0 legal authority exists that allows Gertner to and sue 0n it separately. Nor does any legal authority exist that allows Gertner t0 avoid the renewals and modifications of the Note and sue 0n the original terms of the Note[.] T0 cure the capacity deficiency and have the legal authority t0 enforce the Note as the owner and holder, Gertner would be required t0 d0 one of the following: [obtain from the admitted adversary-to-the-IRA Intervenors either (i) an] assignment t0 sue 38 0n the entirety 0f the Note [0r (ii)consent] t0 enforce the entirety 0f the Note. >X< >X<>X< Intervenors pray that, if Gertner cannot provide evidence and case law that 39 supports capacity ...,sustain this plea [sic] and require Gertner t0 replead[.] However, “Rule 45 does not require that the plaintiff set out in his pleadings the evidence upon Which he relies t0 establish his asserted cause 0f action.”40 Yet Intervenors ask for an order 36 Nabelek v. Cizy ofHouston, No. 01-06—01097—CV, 2008 WL 5003737, at *4 (Tex.App.—Hou. [1“ Dist] Nov. 26, 2008, n0 pet.) (mem. 0p.). 37 Harris any. Hosp. Dist. v. Textac Partners I, 257 s.W.3d 303, 312-13 (Tex.App.—Hou. [14th Dist] 2008, n0 pet); see Heartland Holdings, Inc. v. US Trust C0. 0f Tex. NA, 316 SW3d 1, 7 (TeX.App.—H0u. [14th Dist] 2010, no pet.)(reviewing appellee’s plea t0 the jurisdiction, which was based 0n appellant’s lack of standing to enforce a contract, under summary—judgment standards rather than standards governing pleas t0 the jurisdiction); Bishop v. Clawson, No 14-12-00830-CV, 2013 WL 5026817, at *5 (Tex.App.—Hou. [14th Dist] Sept. 12, 2013, n0 pet.) (mem. 0p.)(“m0ti0n was, for all practical purposes, the functional equivalent 0f a motion for summary judgment, and therefore we Will analyze it applying traditional summary-judgment standards.”) 38 (Plea at 5 and 28—29 1m 10, 10.b., 10.21., 10.c., 63, 63.21., 63b. and 63.c.) (emphasis added). 39 (Id. at 30 PRAYER) (emphasis added). 4° Tex. Dep ’r ofParks & Wildlife v. Miranda, 133 s.W.3d 217, 230 (Tex.2004). Pls.’ Resp. t0 Intrv’rs’ Am. Plea in Abatement 8 requiring Plaintiffs t0 amend their pleadings to show legally and factually the evidence upon which they rely to establish the asserted cause 0f action contrary to Rule 45 and Miranda. Neither a ‘plea in abatement’ nor special exceptions authorizes Intervenors’ prayed for relief. 17. Intervenors citation t0 the merits of the case makes clear the so-called impediment is not a procedural issue outside the facts: ARGUMENTS AND AUTHORITY — PLEA 1N ABATEMENT ELEMENTS To SUE 0N A NOTE 59. To recover on a note, a plaintiff must prove that the it is owner and holder of the maker of the note, that the defendant is the note, that the note isin default,and that the defendant owes a cenain sum 0n the note. See Trueheart v.Braselfon, 875 S.W.2d 412, 415 (Tex. App. — 41 18. The owner or holder status is precisely the issue in dispute as shown in Intervenors’ motion for summary judgment: The Lending Group JV seeks traditional summary judgment 0n the legal issue that Gertner lacks capacity t0 unilaterally enforce any portion 0f the Note 0r Guaranties[.] The Lending Group JV also seeks a summary judgment, pursuant t0 TEX. CIV. PRAC. REM. & CODE §§ 37.0041 on the following legal issues: * * * b. That Gertner isnot the owner 0r holder 0f the Note and Guaranties at issue ...; c. That Gertner lacks the capacity to enforce any rights under the Note ..., 42 Guaranties, 0r Deed 0f Trust (including amendments thereto). * * * Intervenors pray for judgment against Gertner including the following relief to Intervenor, Walter Servicing Corporation, individually and 0n behalf of the Lending Group: a. Dismiss Gertner’s claims for lack ofcapacity; b. A declaration that, pursuant t0 TEX. CIV. PRAC. REM. & CODE §§ 37.004, that: * * * ii. Gertner is not the owner 0r holder of the Note (including any amendments, as well as any additional Notes related t0 the Loan) and 41 (Plea at 25 'n59.). 42 (Intervenors’ Trad’l Mot. for Sum. J. against Pls. filed March 5, 2020 (“Mot”) at2 1]2). Pls.’ Resp. to Intrv’rs’ Am. Plea in Abatement 9 Guaranties at issue. . .; iii. Gertner lacks the capacity t0 enforce any rights under the Note ..., 43 Guaranties, 0r Deed 0f Trust (including amendments thereto). In identical manner both Intervenors’ summary judgment motion and their Plea challenge the Plaintiffs right t0 recover and reach the merits 0f a case. Granting the relief in Intervenors’ Plea is the functional equivalent 0f granting summary judgment but Without the consent of Plaintiffs (Plaintiffs herein object t0 both the abatement and summary judgment) and Without the 21-day notice requirement. “A plea in abatement may not be used to determine the merits 0f an action.”44 “Under these circ*mstances, however, a motion t0 abate is not a proper procedural t001.”45 “The use 0f a plea in abatement to finally dispose 0f litigation is not to be encouraged.”46 Intervenors misnamed their filing t0 procure a preliminary hearing to dispose of the case. The result is different, however if Intervenors expressly concede the merits 0f Plaintiff’s claim and instead cite facts outside the pleadings 0r extrinsic to the merits as a matter t0 be remedied before the case can proceed; they have not done so. 19. Just as the Opinion (and Mandate) serves as independent grounds t0 deny the Plea, it should be denied under Rule 166a, as it is the functional equivalent 0f a summary judgment. Additional grounds for denying the Plea: Intervenors have not met their burden. III. Intervenors have not met their burden. 20. As the party challenging capacity, Intervenors must conclusively prove the capacity bar. Despite the bald allegation that “[t]0 cure such lack of capacity for purposes 0f a plea in abatement, Gertner would be required to” make a (pretrial) legal and factual showing 0n 43 (Id. at23 PRAYER). 44 KSNG Architects, 109 s.W.3d at 898; Brown, 2008 WL 2152889, at *2. 45 Morgan v. City ofAlvin, 175 s.w.3d 408, 421 (Tex.App.—Hou. [1“ Dist] 2004, no pet.). 46 Christi Bay Temple, 330 s.W.3d at 323, rev’d, 330 s.w.3d 251, 253 (no evidence oflack of capacity). Pls.’ Resp. t0 Intrv’rs’ Am. Plea in Abatement 10 the merits, it is Intervenors who bear the burden “[a]s the party challenging capacity[.]”47 Intervenors’ theory is that the IRA lacks “entitlement t0 sue 0n a contract, 9948 the Note. “A promissory note is a contract between the maker and the payee.”49 Intervenors’ own evidence negates the absence of capacity because: The question [Intervenors] raises With regard t0 Whether [the IRA] is entitled t0 sue on the [c]ontract is a question 0f capacity. When the issue involves capacity arising from a contractual right, “Texas law is clear, and th[e Dallas Court of Appeals] court has previously held numerous times, that a challenge to a party’s 50 privity of contract is a challenge t0 capacity[.]” “Privity is established by proof that the defendant was a party t0 an enforceable contract with either the plaintiff 0r a party Who assigned its cause 0f action t0 the plaintiff.”51 Here, the Note shows that HQZ (the defendant) isa party t0 an enforceable contract With the IRA (the plaintiff): PROMISSORY NOTE (fate:- ,M/ég’ifzoos Borrower: HQZ Partners, L.P., a Texas limited pa rtnership Borrower's Mailing Address: HQZ Partners, LP. PD. Box 700023 Dallas,Texas 75370 Lender: This noteispayable lo the order of the following: 47 Id.; Flowers, 406 S.W.2d at 199; General Telephone C0. ofSW v. City 0f Garland, 509 S.W.2d 927, 930 (TeX.CiV.App.—Da11as 1974, writ ref’d nr e.)(“We recognize that a defendant has the general burden to establish the facts supporting a plea in abatement”); Wallace v. Lincoln Leasing Corporation, 547 S.W.2d 56, 57 (TeX.CiV.App.—Dallas 1977, n0 writ (“The burden is on a defendant to plead this in a plea in abatement and t0 prove facts showing [adversary] cannot maintain its suit...The allegations in a plea in abatement must be proven by evidence since those allegations, although sworn, do not constitute proof.”); A & S Distributing Company, Inc. v. Providence Pile Fabric Corporation, 563 S.W.2d 281, 287 (TeX. CiV.App.—Da11as 1977, writ ref’d nr 6.). 48 Highland Credit, 451 S.W.3d at 515—16. 49 Prudential Sea, Inc. v. Haugland, 973 S.W.2d 394, 399 (TeX.App.—E1 Paso 1998, pet. denied). 50 Highland Credit, 451 S.W.3d at 515—16. 51 OAIC Commercial Assets, LLC v. Stonegate Village, LP, 234 S.W.3d 726, 734 (TeX.App.—Dallas 2007, pet. denied). Pls.’ Resp. to Intrv’rs’ Am. Plea in Abatement 11 I‘ITn ”1p nvrnnf nf Ann nnn n" Q}? nn nlllo anfnrnl‘f nrinrin-fl vllrlh urnnnnl' in nf H'In nrrlpr *** IX.lIUU VCI u 8) To amount the extent of $560,000.00 plus interest on such principal to the order of Equity Trust Company Custodian FBO Alan D. bonnet. IRA, 1514% undivided interest. . H\ nutgnl n: tan“ 'T‘n 01-“: nnn nn ulna nmnnnf nnnI-u nv'n‘nznnl :nfnrnnf nr- In Hun nrAnr n; Furl *** 21. Intervenors have failed to prove that the Note does not identify the IRA as a payee Which the evidence shows the “note is payable t0 the order of’ the IRA. There is n0 evidence 0f divestment 0f the IRA’s payee status 0r that the IRA ever assigned itsdebt or claimsz The Note is the contract between the maker (HQZ) and the payee, the IRA, thus it’s entitlement to sue on such contract remains intact and Intervenors failed t0 show a “break” in the “chain” of the IRA’s title/ownership. The IRA’s privity is patent on the face 0f the Note; thus the IRA’s capacity is likewise established by the Note, Intervenors have not shown otherwise. A. Intervenors have not shown the three prongs for abatement. 22. In the plea in abatement, the movant “must:[53] identify any impediment t0 the (1) continuation 0f the suit; (2) identify an effective cure; and (3) ask the trial court to abate the suit until the defect is corrected.”54 Intervenors fail to show all 0f the above three requirements. 23. Instead of alleging facts outside the pleadings as an impediment t0 the continuation of the suit, Intervenors allege (verbatim) their entire petition in intervention, filed 20 hours apart—both relying 0n precisely the same Exhibits A and B and Exhibits 1-30. Intervenors have not explained how the Court is impeded from reaching 0r determining the merits of Plaintiffs’ case; Intervenors merely allege Plaintiffs’ case has n0 merit based 0n Intervenors’ unproven theory of a joint venture. Intervenors have thus failed the first 52 53 (Gertner Aff. infra at 55 W 2-4). “Must” is “generally recognized as mandatory, creating a duty 0r obligation.” (Intervenors’ Resp. t0 Pls.’ Am. Rule 91a MTD Am. Intv’n at 4 117.). Use 0f the word ‘must’ creates a mandatory duty. (Id.). 54 Douglas—Peters, 2017 WL 836848 at *6; Shutter, 318 s.w.3d at 470. Pls.’ Resp. to Intrv’rs’ Am. Plea in Abatement 12 prerequisite for abatement and the Plea must be denied. 24. Intervenors judicially admitted they “d0 not seek t0 enforce the Note in this case,”55 thus abandoning any claim 0r right t0 any part of the Note. Yet their idea 0f cure is that Plaintiffs either (or all of):56 (i) “sue on the entirety 0f the Noteg” (ii)“obtain an assignment” 0f each lenders’ portion of the Note; (iii) “obtain consent” from each lenders t0 service their portions of the Note; or/and (iv) “obtain consent” from “the Lending Group Joint Venture” or “the majority interest” to “enforce the entirety of the Note.” Rather than identify an effective cure, Intervenors identify a predicate for defeating Plaintiffs 0n summary judgment, for if Plaintiff did any or all of the above, HQZ has a complete defense to all the other Lenders’ claims 0n the Original Note as the other Lenders—but not the IRA—entered modifications. Failing t0 identify an 

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