Valentine v. Whitetail Capital LLC

IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

FRANCES ELIZABETH CARTER §

VALENTINE and WILLIAM RILEY §

BAXTER CARTER, in their capacities §

as co-administrators of the ESTATE OF §

MICHAEL E. CARTER, §

§

Plaintiffs, §

§

V. § No. 3:23-cv-575-BN

§

WHITETAIL CAPITAL, LLC; PAUL G. §

COMRIE; and ELEMENTS §

INTERNATIONAL GROUP, LLC, §

§

Defendants. §

MEMORANDUM OPINION AND ORDER

This lawsuit filed in federal court under diversity subject-matter jurisdiction,

28 U.S.C. § 1332, see Dkt. No. 10 (May 5, 2023 amend. compl.), is before the

undersigned United States magistrate judge for all purposes under 28 U.S.C. § 636(c),

see Dkt. No. 26.

Plaintiffs Frances Elizabeth Carter Valentine and William Riley Baxter

Carter, in their capacities as co-administrators of the Estate of Michael E. Carter,

move for summary judgment on their breach of contract claims and the affirmative

defenses of Defendants Whitetail Capital, LLC (“Whitetail”), Paul G. Comrie, and

Elements International Group, LLC (“Elements”): (1) payment and/or partial

payment; (2) contractual remedy/satisfaction and/or extinguishment of debt; (3)

mootness; (4) lack of standing; (5) presentment of claims; and that (6) Plaintiffs have

sustained no damages. See Dkt. Nos. 46-48; see also Dkt. No. 23 (Jan. 22, 2024 answer

to amended compl.), at 8-11.

And Plaintiffs supplemented their motion to offer evidence as to the parties’

citizenships, as ordered. See Dkt. Nos. 50-52, 56, & 57.

Defendants responded to the summary judgment motion. See Dkt. Nos. 53 &

54. And Plaintiffs replied. See Dkt. No. 55.

For the following reasons, the Court grants the motion for summary judgment.

Applicable Background

The Court previously set out the background applicable to this action, drawn

from the operative complaint, when it addressed Defendants’ motion to dismiss. See

Valentine v. Whitetail Capital, LLC, No. 3:23-cv-575-L, 2023 WL 8832959, at *1-*3

(N.D. Tex. Dec. 6, 2023), rec. accepted, 2023 WL 8851640 (N.D. Tex. Dec. 21, 2023)

(“Valentine I”).

This information has not materially changed since then, so the Court sets it

out again to provide context for the issues now before it at summary judgment:

Michael E. Carter was a salesman and entrepreneur who worked

for Elements International, a furniture wholesaler. Until his retirement

in 2021, Carter served as both an officer and manager of Elements

International and held a five percent membership interest in Elements

International (the “Carter Membership Interest”).

When he retired, Carter sold the Carter Membership Interest to

Whitetail Capital. Whitetail was the majority owner of Elements

International’s membership interests. Paul Comrie was Elements

International’s CEO and Whitetail’s president, manager, and sole

member.

Carter and Whitetail executed a Membership Interest Purchase

and Sale Agreement dated effective June 30, 2023 (the “P&S

-2-

Agreement”). Carter also executed an Assignment and Assumption of

Membership Interest in Elements International Group, LLC

transferring the Carter Membership Interest to Whitetail (“Assignment

Agreement”). And Carter executed a letter of resignation from his

various roles at Elements International.

The P&S Agreement provided that the $3.4 million purchase

price would be paid in two installments:

Section 2. Purchase Price. As the full purchase price of the

Subject Membership Interest, Purchaser shall pay to Seller the

sum of Three Million Four Hundred Thousand and No/100 Dollars

($3,400,000.00) (the “Purchase Price), as follows:

(i) At the closing, by wire transfer of immediately available

funds to an account identified by Seller to Purchaser

(“Seller’s Account”), Purchaser shall pay to Seller the

sum of Two Million and No/100 Dollars ($2,000,000.00).

(ii) On or before December 31, 2022, by wire transfer of

immediately available funds to Seller’s Account,

Purchaser shall pay to Seller the sum of One Million

Four Hundred Thousand and No/100 Dollars

($1,400,000.00).

Paul Comrie and Elements International guaranteed the second

payment:

(iv) Each of Paul G. Comrie, the principal of Purchaser

(“Comrie”) and the Company [Elements International]

(together with Comrie, sometimes called “Guarantors”)

agree to guarantee payment of the second payment of

One Million Four Hundred Thousand and No/100

Dollars ($1,400,000.00) due to Seller on December 31,

2022, as confirmed by their respective signatures below.

The P&S Agreement further provided:

(v) Should neither Purchaser nor Guarantors pay the payment

referenced in Section 2(ii) and 2(iv) above on or before

January 10, 2023, the Seller shall have the right to notify

the Company of such non-payment, and the Company shall

then issue (and Comrie shall cause the Company to issue)

to Seller a portion of the Membership Interest

commensurate with the outstanding payment, to wit

membership interest in and to the Company in an amount

equal to 2.0588 of the outstanding membership interest in

and to the Company.

The P&S Agreement also provided that time was of the essence,

and that all notices and communications must be made in writing.

-3-

The P&S Agreement was signed by Carter, Paul Comrie as

Manager of Whitetail, and Mike Wurster as President of Elements

International. It was approved by Elements International’s members

and managers.

Whitetail paid the $2 million due for the first installment to

Carter.

Carter passed away on September 4, 2022.

At the time of his death, Carter was domiciled in Lafayette

County, Mississippi. On September 22, 2022, the Chancery Court of

Layfette County, Mississippi admitted Carter’s will to probate and

issued Letters of Administration to Carter’s children, Plaintiffs Frances

Elizabeth Carter Valentine and William Riley Baxter Carter, as Co-

Executors to administer Carter’s estate.

As the December 31, 2022, deadline approached, Comrie

repeatedly acknowledged Whitetail’s obligation to pay the $1.4 million

due to the Carter Estate but complained of financial hardship and stated

that he wouldn’t be able to pay the obligation when due.

On December 19, 2023, Comrie texted “I spoke to our attorney.

Sounds like you guys will own 2.0588% of Elements if I do not meet the

$1.4MM payment obligation at month end. Let me know if you prefer

other options. Hopefully there is a workable deal. Paul.” He followed up

with “[l]et me know if there is something you want to try and work out.

I just don’t want the year end deadline to come and pass us. I’m okay

with you guys retaining the shares too.” On December 27, 2023, Comrie

texted that he was “willing to give $100K a month until it is paid off.”

The Carter Estate demanded Whitetail perform by making the

$1.4 million second payment before the year end. On December 27, 2021,

the Carter Estate told Comrie that it was not interested in receiving the

membership interest.

Whitetail failed to make the second payment on December 31,

2022.

After the deadline passed, Comrie advised the Carter Estate that

he was seeking bank financing for Whitetail to make the $1.4 million

second payment.

On January 6, 2023, Comrie wrote

I don’t have great news. We are in a tough spot. I’m really

not in a position to buy the shares based on hemorrhaging

money the last six months. We have too much inflated

inventory that is going to make the next little while even

bumpier. Based on that the company doesn’t want those

shares. If you want money right now the best I can do for

those shares is getting a loan from my father and giving

-4-

you $400K for them. If you want the full $1.4MM then it is

best to sit on the shares and see if we come out of this.

Happy to chat about it. Just wanted to get this in writing

so you can digest it.

On January 10, 2023, counsel for the Carter Estate sent a demand

letter to Elements International (directed to Michael Wurster, its

president) notifying the company that Whitetail failed to pay the second

payment and demanding that Elements International perform its

obligation under the guaranty. The demand expressly stated that the

“letter [was] not an exercise by the estate of its rights under Section 2(v)

of the [P&S] Agreement.” Carter Estate counsel also sent a demand

letter to Paul Comrie demanding that he immediately perform his

personal guaranty of the second payment by paying the estate $1.4

Million. There was no response to the demand letters.

Plaintiffs filed this lawsuit on March 15, 2023.

Valentine I, 2023 WL 8832959, at *1-*3 (cleaned up).

Legal Standards

Under Federal Rule of Civil Procedure 56, summary judgment is proper “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). A factual “issue is

material if its resolution could affect the outcome of the action.” Weeks Marine, Inc.

v. Fireman’s Fund Ins. Co., 340 F.3d 233, 235 (5th Cir. 2003). And “[a] factual dispute

is ‘genuine,’ if the evidence is such that a reasonable [trier of fact] could return a

verdict for the nonmoving party.” Crowe v. Henry, 115 F.3d 294, 296 (5th Cir. 1997).

If the moving party seeks summary judgment as to his opponent’s claims or

defenses, “[t]he moving party bears the initial burden of identifying those portions of

the pleadings and discovery in the record that it believes demonstrate the absence of

a genuine issue of material fact, but is not required to negate elements of the

nonmoving party’s case.” Lynch Props., Inc. v. Potomac Ins. Co., 140 F.3d 622, 625

-5-

(5th Cir. 1998). “A party asserting that a fact cannot be or is genuinely disputed must

support the assertion by: (A) citing to particular parts of materials in the record,

including depositions, documents, electronically stored information, affidavits or

declarations, stipulations (including those made for purposes of the motion only),

admissions, interrogatory answers, or other materials; or (B) showing that the

materials cited do not establish the absence or presence of a genuine dispute, or that

an adverse party cannot produce admissible evidence to support the fact.” FED. R.

CIV. P. 56(c)(1). “Summary judgment must be granted against a party who fails to

make a showing sufficient to establish the existence of an element essential to that

party’s case, and on which it will bear the burden of proof at trial. If the moving party

fails to meet this initial burden, the motion must be denied, regardless of the

nonmovant’s response.” Pioneer Expl., L.L.C. v. Steadfast Ins. Co., 767 F.3d 503, 511

(5th Cir. 2014) (internal quotation marks and footnote omitted).

“Once the moving party meets this burden, the nonmoving party must set

forth” – and submit evidence of – “specific facts showing a genuine issue for trial and

not rest upon the allegations or denials contained in its pleadings.” Lynch Props., 140

F.3d at 625; Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc);

accord Pioneer Expl., 767 F.3d at 511 (“[T]he nonmovant cannot rely on the

allegations in the pleadings alone” but rather “must go beyond the pleadings and

designate specific facts showing that there is a genuine issue for trial.” (internal

quotation marks and footnotes omitted)).

-6-

The Court is required to consider all evidence and view all facts and draw all

reasonable inferences in the light most favorable to the nonmoving party and resolve

all disputed factual controversies in favor of the nonmoving party – but only if the

summary judgment evidence shows that an actual controversy exists. See Anderson

v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Pioneer Expl., 767 F.3d at 511;

Boudreaux v. Swift Transp. Co., Inc., 402 F.3d 536, 540 (5th Cir. 2005); Lynch Props.,

140 F.3d at 625.

“The evidence of the nonmovant is to be believed, and all justifiable inferences

are to be drawn in [her] favor. While the court must disregard evidence favorable to

the moving party that the jury is not required to believe, it gives credence to evidence

supporting the moving party that is uncontradicted and unimpeached if that evidence

comes from disinterested witnesses.” Porter v. Houma Terrebonne Hous. Auth. Bd. of

Comm’rs, 810 F.3d 940, 942-43 (5th Cir. 2015) (internal quotation marks and

footnotes omitted).

And “[u]nsubstantiated assertions, improbable inferences, and unsupported

speculation are not sufficient to defeat a motion for summary judgment,” Brown v.

City of Hous., 337 F.3d 539, 541 (5th Cir. 2003), and neither will “only a scintilla of

evidence” meet the nonmovant’s burden, Little, 37 F.3d at 1075; accord Pioneer Expl.,

767 F.3d at 511 (“Conclusional allegations and denials, speculation, improbable

inferences, unsubstantiated assertions, and legalistic argumentation do not

adequately substitute for specific facts showing a genuine issue for trial.” (internal

-7-

quotation marks and footnote omitted)); Hassen v. Ruston La. Hosp. Co., L.L.C., 932

F.3d 353, 355 (5th Cir. 2019) (A court must “view the evidence and draw all justifiable

inferences in favor of the nonmovant. Even so, barebones, conclusory, or otherwise-

unsupported assertions won’t cut it; the nonmovant ‘must go beyond the pleadings

and come forward with specific facts indicating a genuine issue for trial.’” (footnotes

omitted)).

So, “when the moving party has carried its burden under Rule 56(c), its

opponent must do more than simply show that there is some metaphysical doubt as

to the material facts.” Scott v. Harris, 550 U.S. 372, 380 (2007) (internal quotation

marks omitted). Rather, the non-moving party must “set forth specific facts showing

the existence of a ‘genuine’ issue concerning every essential component of its case.”

Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998).

“If a party fails to properly support an assertion of fact or fails to properly

address another party’s assertion of fact as required by Rule 56(c), the court may: (1)

give an opportunity to properly support or address the fact; (2) consider the fact

undisputed for purposes of the motion; (3) grant summary judgment if the motion and

supporting materials – including the facts considered undisputed – show that the

movant is entitled to it; or (4) issue any other appropriate order.” FED. R. CIV. P. 56(e).

And “[o]nly disputes over facts that might affect the outcome of the suit under

the governing law will properly preclude the entry of summary judgment.” Pioneer

Expl., 767 F.3d at 511 (internal quotation marks and footnote omitted). “[T]he mere

-8-

existence of some alleged factual dispute between the parties will not defeat an

otherwise properly supported motion for summary judgment; the requirement is that

there be no genuine issue of material fact.” Scott, 550 U.S. at 380 (internal quotation

marks and emphasis omitted). And, “[w]hen opposing parties tell two different

stories, one of which is blatantly contradicted by the record, so that no reasonable

jury could believe it, a court should not adopt that version of the facts for purposes of

ruling on a motion for summary judgment.” Id.

“After the nonmovant has been given an opportunity to raise a genuine factual

issue, if no reasonable juror could find for the nonmovant, summary judgment will be

granted.” DIRECTV, Inc. v. Minor, 420 F.3d 546, 549 (5th Cir. 2005) (footnote and

internal quotation marks omitted). “Where the record taken as a whole could not lead

a rational trier of fact to find for the nonmoving party, there is no genuine issue for

trial.” Scott, 550 U.S. at 380 (internal quotation marks omitted).

The Court will not assume “in the absence of any proof ... that the nonmoving

party could or would prove the necessary facts” and will grant summary judgment “in

any case where critical evidence is so weak or tenuous on an essential fact that it

could not support a judgment in favor of the nonmovant.” Little, 37 F.3d at 1075.

“Rule 56 does not impose upon the district court a duty to sift through the record in

search of evidence to support a party’s opposition to summary judgment,” and “[a]

failure on the part of the nonmoving party to offer proof concerning an essential

element of its case necessarily renders all other facts immaterial and mandates a

-9-

finding that no genuine issue of fact exists.” Adams v. Travelers Indem. Co. of Conn.,

465 F.3d 156, 164 (5th Cir. 2006) (internal quotation marks omitted).

But, if “the movant bears the burden of proof on an issue, either because he is

the plaintiff or as a defendant he is asserting an affirmative defense,” for example,

that movant “must establish beyond peradventure all of the essential elements of the

claim or defense to warrant judgment in [its] favor.” Fontenot v. Upjohn Co.,780 F.2d

1190, 1194 (5th Cir. 1986).

Accordingly, the moving party must demonstrate that there are no genuine

and material fact disputes and that the party is entitled to summary judgment as a

matter of law. See, e.g., Martin v. Alamo Cmty. Coll. Dist., 353 F.3d 409, 412 (5th Cir.

2003). That is, “[w]hen the party moving for summary judgment also bears the burden

of proving the claim, he must establish that there is no genuine dispute of material

fact as to every element of its claim, so that the evidence is so overwhelming that he

is entitled to judgment in his favor.” Turner v. Criswell, No. 4:19-CV-226-ALM-CAN,

2020 WL 1901086, at *3 (E.D. Tex. Jan. 6, 2020) (cleaned up), rec, adopted, 2020 WL

613963 (E.D. Tex. Feb. 10, 2020).

“If the moving party fails to meet this initial burden, the motion must be

denied, regardless of the nonmovant’s response.” Evanston Ins. Co. v. Lapolla Indus.,

Inc., 93 F. Supp. 3d 606, 611 (S.D. Tex.) (cleaned up; quoting Meecorp Cap. Markets

LLC v. Tex-Wave Indus. LP, 265 F. App’x 155, 158 (5th Cir. 2008) (per curiam)

(quoting Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994)), aff’d, 634 F.

-10-

App’x 439 (5th Cir. 2015) (per curiam).

And, on a plaintiff’s motion seeking summary judgment in its favor on its own

claims, the Court will “draw all reasonable inferences in favor of the non-moving

party” – that is, in favor of the defendant. Chaplin v. NationsCredit Corp., 307 F.3d

368, 372 (5th Cir. 2002).

And, so, this “beyond peradventure” standard imposes a “heavy” burden. Cont’l

Cas. Co. v. St. Paul Fire & Marine Ins. Co., No. 3:04-cv-1866-D, 2007 WL 2403656, at

*10 (N.D. Tex. Aug. 23, 2007); accord Wilson v. Dall. Indep. Sch. Dist., No. 3:18-cv-

34-G-BN, 2020 WL 825819, at *7 (N.D. Tex. Jan. 17, 2020) (“[B]eyond peradventure”

means “beyond doubt.” (cleaned up)), rec. adopted, 2020 WL 821034 (N.D. Tex. Feb.

18, 2020).

But, on a plaintiff’s motion on its own claim, “summary judgment is

appropriate where the evidence would require a directed verdict.” Hernandez v.

Trendy Collections, LLC, No. 3:17-cv-2049-BN, 2018 WL 4103723, at *13 (N.D. Tex.

Aug. 29, 2018) (cleaned up).

That is, a plaintiff may prevail on its claim on its own motion where, drawing

all inferences in the defendant’s favor and viewing the summary judgment in the light

most favorable to the defendant, the evidence is “so overwhelmingly in favor of [the

plaintiff] that no reasonable jury could [arrive] at a verdict other than that [the

plaintiff] proved” every essential element of its claim against the defendant. Mid-

Continent Cas. Co. v. Eland Energy, Inc., 795 F. Supp. 2d 493, 550 (N.D. Tex. 2011),

-11-

aff’d, 709 F.3d 515 (5th Cir. 2013).

Analysis

I. The Court possesses subject matter jurisdiction.

Before addressing the merits, the Court must address two jurisdictional

concerns.

The first, raised by the Court, is the obligation that, as the parties invoking

subject matter jurisdiction under 28 U.S.C. § 1332 “[a]t the summary judgment

stage,” Plaintiffs “provide evidence sufficient to support a jury finding of the

citizenship of each” party, Megalomedia Inc. v. Phila. Indem. Ins. Co., 115 F.4th 657,

659 (5th Cir. 2024) (published order), as the Court further explained in the October

30, 2024 supplement to the scheduling orders, discussing this requirement as framed

by recent decisions of the United States Court of Appeals for the Fifth Circuit, see

generally Dkt. No. 50.

Through Plaintiffs’ supplement to their summary judgment motion, see Dkt.

Nos. 56 & 57, they provide evidence sufficient to support jury findings as to the

parties’ citizenships and to establish that each plaintiff’s citizenship is diverse from

each defendant’s citizenship and where each individual party is domiciled (not just

where each resides), see SXSW v. Fed. Ins. Co., 83 F.4th 405, 407 (5th Cir. 2023);

Coury v. Prot, 85 F.3d 244, 251 (5th Cir. 1996).

Relatedly, Defendants continue to assert that this lawsuit must be dismissed

as moot. See, e.g., Dkt. No. 53 at 29.

“[M]ootness is a threshold jurisdictional inquiry.” La. Env’t Action Network v.

-12-

U.S. E.P.A., 382 F.3d 575, 580 (5th Cir. 2004) (citation omitted). And, “[i]n order to

maintain jurisdiction, the court must have before it an actual case or controversy at

all stages of the judicial proceedings.” Herndon v. Upton, 985 F.3d 443, 446 (5th Cir.

2021) (citation omitted).

The Court addressed mootness earlier in this case, holding that “Defendants’

mootness theory is based on interpretation of the “P&S Agreement, especially Section

2(v), so [the Court] construe[d] the agreement under established rules for contract

construction, taking care not to conflate subject matter jurisdiction with the merits

of the case.” Valentine I, 2023 WL 8832959, at *7; see id. at *6-*9.

“The law-of-the-case doctrine posits that when a court decides upon a rule of

law, that decision should continue to govern the same issue in subsequent stages in

the same case.” Woodfox v. Cain, 772 F.3d 358, 370 (5th Cir. 2014) (quoting Med. Ctr.

Pharmacy v. Holder, 634 F.3d 830, 834 (5th Cir. 2011)).

But that

doctrine does not operate to prevent a district court from reconsidering

prior rulings. “A court has the power to revisit prior decisions of its own

... in any circumstance....” Christianson v. Colt Indus. Operating Corp.,

486 U.S. 800, 817 (1988). The doctrine “directs a court’s discretion, it

does not limit the tribunal’s power.” Arizona v. California, 460 U.S. 605,

618 (1983) (citations omitted). The law-of-the-case doctrine is a rule of

convenience designed to prevent unnecessary reconsideration of

previously decided issues. See Loumar, Inc. v. Smith, 698 F.2d 759, 762

(5th Cir.1983). It is equally clear, though, that the rule “yields to

adequate reason.” Id.

Zarnow v. City of Wichita Falls, Tex., 614 F.3d 161, 171 (5th Cir. 2010); see also

United States v. Palmer, 122 F.3d 215, 220 (5th Cir. 1997) (“[I]n civil cases a district

-13-

court is not precluded by the law-of-the-case doctrine from reconsidering previous

rulings on interlocutory orders such as summary judgment motions, as those rulings

are not immutable and lack res judicata effect.” (citations omitted)).

Because, through their response to the summary judgment motion, see Dkt.

No. 53 at 19-31, Defendants fail to persuade the Court that its prior interpretation of

the P&S Agreement, in particular Section 2(v), is incorrect, the Court finds that

Plaintiffs’ claims are not moot and will set out below – and apply – its prior

interpretation of the contractual language to the claims and defenses now before the

Court on summary judgment, cf. Personnel Staffing Grp., LLC v. Protective Ins. Co.,

1:21-cv-1926-JPH-MG, 2022 WL 1471041, at *2 (S.D. Ind. May 9, 2022) (“Though the

court ‘has the power to revisit prior decisions of its own or of a coordinate court in any

circumstance,’ it ‘should be loathe to do so in the absence of extraordinary

circumstances such as where the initial decision was clearly erroneous and would

work a manifest injustice.”’ (cleaned up; quoting Christianson, 486 U.S. at 817)).

II. The Court grants Plaintiffs’ motion for summary judgment.

Plaintiffs move for summary judgment on their breach of contract claims – that

Whitetail breached its direct payment obligation and that Comrie and Elements

breached their guarantor payment obligations – and Defendants’ various affirmative

defenses.

And the Court agrees with Plaintiffs, see, e.g., Dkt. No. 47 at 6, that many of

the issues now before it were addressed at the pleadings stage and that the issues

that must now be resolved do not involve material questions of fact but turn on

-14-

questions of law. Those issues are: (1) whether the P&S Agreement allowed

Defendants to issue the membership interest in Elements in satisfaction (or in lieu)

of the second payment obligation without Plaintiffs’ authorization or consent and (2)

whether Plaintiffs may not recover on behalf of the Carter Estate either (a) because

they have not been appointed as personal representatives of the Estate by a Texas

court or (b) because their letters of administration issued by a Mississippi chancery

court were not provided to Defendants prior to Elements tendering the membership

interest.

And, so, this case is ripe for disposition on summary judgment.

Starting with Plaintiffs’ claims that Defendants breached the parties’

agreements, the essential elements of a breach of contract action in Texas are: (1) the

existence of a valid contract; (2) performance or tendered performance by the plaintiff;

(3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff

because of the breach. See Smith Int’l, Inc. v. Egle Grp., LLC, 490 F.3d 380, 387 (5th

Cir. 2007).

Both sides agree that the P&S Agreement is valid. See, e.g., Dkt. No. 53 at 15.

And, while both sides agree that Carter performed his obligations under the

P&S Agreement, see id., Defendants appear to counter that Plaintiffs have failed to

perform under the P&S Agreement because no Plaintiff qualifies as a duly authorized

representative of the Carter Estate, such a representative being the only party that

could proceed on the claims here, according to Defendants.

-15-

Defendants further contend that they did not breach an agreement considering

the membership interest in Elements that they issued as satisfaction (or in lieu) of

the second payment obligation. Consequently, Defendants argue, Plaintiffs have

suffered no damages.

Starting with the essential element that Plaintiffs perform and Defendants’

related affirmative defenses – lack of standing and presentment of claims – Federal

Rule of Civil Procedure 17(b)(3) “expressly requires the Court to apply the law of the

forum state – Texas – to determine who has the capacity to sue.” Rangel v. Wellpath,

LLC, No. 5:23-cv-128-H, 2024 WL 4773311, at *10 (N.D. Tex. Nov. 13, 2024).

Under “Rule 17, courts in the Fifth Circuit have looked to the Texas Estates

Code to determine the capacity of an individual to bring suit on behalf of an estate.”

Id.

Applicable here, “a foreign executor or administrator of a person who was a

nonresident at the time of death may maintain a suit in this state for the recovery of

debts due to the decedent.” TEX. ESTATES CODE § 505.101(a).

To bring suit, a foreign executor or administrator must give “notice by a

qualified delivery method to all creditors of a decedent in this state who have filed a

claim against the decedent’s estate for a debt due to the creditor,” id., and file in the

suit “[t]he plaintiff’s letters testamentary or of administration granted by a

competent tribunal, properly authenticated,” id. § 505.101(b).

And, because Plaintiffs have met these requirements, see Dkt. No. 48 at 40-42

-16-

(Albert Delgadillo Decl.), ¶ 10 (“There are not any creditors of Michael E. Carter or

the Estate of Michael E. Carter in the State of Texas.”); Dkt. No. 10-4 (Letters of

Administration), Defendants cannot prevail on their standing affirmative defense.

Defendants appear to combine their proper presentment affirmative defense

with their contention that Plaintiffs have not shown (or did not timely show) the

essential element of contractual performance. See Dkt. No. 53 at 16-19.

But Defendants have not shown that the P&S Agreement contained such a

requirement.

Nor do Defendants cite applicable Texas law to support such a requirement or

show that Texas law somehow alters the performance element where an estate

prosecutes a breach of contract claim. This is especially so considering that, according

to the Texas Supreme Court, “[t]he estate’s suit is identical to one the [decedent] could

have brought during his lifetime” – and, as such, “[a]n estate’s interests … mirror

those of the decedent.” Smith v. O’Donnell, 288 S.W.3d 417, 421 (Tex. 2009) (citing

Belt v. Oppenheimer, Blend, Harrison & Tate, Inc., 192 S.W.3d 780, 787 (Tex. 2006)

(observing that, “because the estate ‘stands in the shoes’ of a decedent,” “the estate’s

personal representative has the capacity to maintain [a] claim on the estate’s behalf”

(footnote omitted)); footnote omitted).

Section 505.101(b), imposing the procedural requirement that letters

testamentary or of administration be filed in this action, contains no explicit timing

element. But, if it somehow could be read to include one, Defendants still have not

-17-

explained why Plaintiffs’ curative amendment does not relate back to their original

pleading (filed prior to the April 2023 Assignment). Cf. Rangel, 2024 WL 4773311, at

*5 (“Federal Rules of Civil Procedure 15 and 17 allow the plaintiff a reasonable time

to substitute a plaintiff with the capacity to sue and relate the substitution back to

the original date of filing.”).

In sum, Carter performed under the P&S Agreement, as Defendants admit.

See Dkt. No. 53 at 15 (“Defendants have already admitted that Carter, individually,

performed his obligations under the Agreement as noted on page 12 of Plaintiffs’

Brief.”).

That is what matters.

And, in that regard, because the Carter Estate “stands in [his] shoes,” there

are now no special hoops that it must jump through to recover for breach of contract.

But the Court will address briefly Defendants’ reliance on Chapter 38 of the

Texas Civil Practice and Remedies Code, Texas’s attorneys’ fees statute, which

authorizes attorneys’ fees for a successful breach of contract claim, see TEX. CIV. PRAC.

& REM. CODE § 38.001(b)(8), and does contain a presentment requirement, see id. §

38.002(2), the purpose of which “is to allow the party against whom the claim is

asserted an opportunity to pay it or tender performance within 30 days after they

have notice of the claim without incurring an obligation for attorney’s fees,” Tex.

Black Iron, Inc. v. Arawak Energy Int’l Ltd., 566 S.W.3d 801, 824 (Tex. App. –

Houston [14th Dist.] 2018, pet. denied) (cleaned up); see also Tex. Nat’l Bank v.

-18-

Sandia Mortg. Corp., 872 F.2d 692, 699 (5th Cir. 1989) (“Section 38.002 ‘does not

require that the presentment of the claim to the debtor be in any particular form or

manner.’” (quoting Ashford Dev. Inc. v. U.S. Life Real Estate Servs. Corp., 661 S.W.2d

933, 936 (Tex. 1983))).

While Defendants appear to invoke Section 38.002 to defeat Plaintiffs’ breach

of contract claims, Defendants fail to show how this requirement specific to Texas’s

attorneys’ fees statute could apply more generally to a common law contract claim.

And, while presentment under Section 38.002 could be an issue now had

Plaintiffs moved for summary judgment on their attorneys’ fees, see Tex. Black Iron,

566 S.W.3d at 824-25, Plaintiffs have not, see Dkt. No. 47 at 5 n.1 (“As Federal Rule

of Civil Procedure 54(d)(2) controls when a prevailing party may seek recovery for

attorneys’ fees under applicable Texas law (Chapter 38 of the Texas Civil Practice

and Remedies Code), Plaintiffs have not moved for summary judgment as to their

attorneys’ fees claim.” (cleaned up)).

So, for these reasons, Plaintiffs (1) have shown that they should be granted

summary judgment on Defendants’ lack-of-standing and presentment-of-claims

affirmative defenses and (2) have established, beyond peradventure, the essential

element of performance as to their breach of contract claims.

Next, for the reasons explained in Valentine I, the Court rejects Defendants’

arguments that Plaintiffs have not carried their summary judgment burden as to the

elements of breach and damages and equally rejects Defendants’ remaining and

-19-

related affirmative defenses: payment and/or partial payment; contractual

remedy/satisfaction and/or extinguishment of debt; mootness; and that Plaintiffs

have sustained no damages. And, for the same reasons, the Court finds that Plaintiffs

have established, beyond peradventure, the remaining essential elements of their

breach of contract claims.

As the Court has explained,

[i]f the contract’s language can be given a certain or definite legal

meaning or interpretation, the contract is not ambiguous, and the Court

will construe it as a matter of law. See Coker v. Coker, 650 S.W.2d 391,

393 (Tex. 1983). Deciding whether a contract is ambiguous is a question

of law for the Court. See J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223,

229 (Tex. 2003).

But, if the contract is subject to two or more reasonable

interpretations after applying the pertinent rules of construction, the

contract is ambiguous. See Davidson, 128 S.W.3d at 229. A term is not

ambiguous because of a simple lack of clarity. See DeWitt Cnty. Elec. Co-

op, Inc. v. Parks, 1 S.W.3d 96, 100 (Tex. 1999). Nor does an ambiguity

arise merely because parties to an agreement proffer different

interpretations of a term. See URI, Inc. v. Kleberg Cnty., 543 S.W.3d 755,

763 (Tex. 2018); DeWitt, 1 S.W.3d at 10. When a contract is ambiguous,

the Court may consider the parties’ interpretations and admit

extraneous parol evidence to determine its true meaning. See Nat’l

Union Fire Ins. Co. of Pittsburgh, PA v. CBI Indus., Inc., 907 S.W.2d 17,

520 (Tex. 1995).

An ambiguity in contract language is not to be confused with

silence. See Maxey v. Maxey, 617 S.W.3d 207, 222 (Tex. App. – Houston

[1st Dist.] 2020, no pet.); see also E.P. Towne Ctr. Partners, L.P. v.

Chopsticks, Inc., 242 S.W.3d 117, 122 (Tex. App. – El Paso 2007, no pet.)

(“There is a significant legal difference between a contract’s silence –

i.e., its failure to address a particular issue – and the presence of an

ambiguity in the contract language.”). When a contract is silent, the

question is not one of interpreting the language but, rather, one of

determining its effect. See Maxey, 617 S.W.3d at 222-23.

Courts may not and will not rewrite contracts to insert provisions

that the parties could have included, but did not, and that are not

essential to the construction of the contract language. See id. at 223.

-20-

The Court’s analysis begins with the contract’s express language.

The P&S Agreement states that Michael Carter sold the Carter

Membership Interest to Whitetail for $3.4 million, with the purchase

price to be paid in two installments: $2 million at closing and $1.4

million on or before December 31, 2022. Comrie and Elements

International guaranteed the $1.4 million second payment.

The parties’ dispute stems from their interpretations of Section

2(v) of the P&S Agreement, which addresses failure to pay the second

installment. Stated again, Section 2(v) of the P&S Agreement provides:

(v) Should neither Purchaser nor Guarantors pay the

payment referenced in Section 2(ii) and 2(iv) above

on or before January 10, 2023, the Seller shall have

the right to notify the Company of such non-

payment, and the Company shall then issue (and

Comrie shall cause the Company to issue) to Seller

a portion of the Subject Membership Interest

commensurate with the outstanding payment, to wit

membership interest in and to the Company in an

amount equal to 2.0588 of the outstanding

membership interest in and to the Company.

See Dkt. No. 10-1 at 1-2.

The plain language of Section 2(v) gives Carter the sole right to

trigger issuance of a membership interest in the event of non-payment,

but it does not require him to do so.

According to Section 2(v), the membership interest can only be

issued if Carter exercises his right to notify guarantor Elements

International of Whitetail’s, Comrie’s, and its own failure to make the

second payment. If Carter gives notice of non-payment under Section

2(v), then Elements International must issue him a 2.0588 percent

membership interest of the outstanding membership interest in

Elements International, which the parties value as being equal to the

outstanding payment. Guarantor Comrie is tasked with originating and

overseeing Elements International’s issuance of the membership

interest.

Neither Section 2(v) nor any other language in the P&S

Agreement gives Elements International a reciprocal right to tender a

membership interest in the event of non-payment in lieu of paying the

$1.4 million second payment or extend the deadline to make the

payment.

To construe the P&S Agreement otherwise would render the

guaranty obligation meaningless and unenforceable because any

demand for payment by the guarantors would necessarily require the

-21-

Carter Estate to inform Defendants that Whitetail failed to make the

$1.4 million payment, which, according to Defendants, would serve as

notice under Section 2(v), automatically requiring Elements

International to issue an assignment of membership interest.

Courts construe contracts as a whole, recognizing that every

clause has some effect. A reasonable interpretation is preferable to one

that is unreasonable. And an interpretation that renders some terms

meaningless is unreasonable. See Ace Ins. Co. v. Zurich Am. Ins. Co., 59

S.W.3d 424, 428-29 (Tex. App. – Houston [1st Dist.] 2001, pet. denied).

If the parties mutually agreed that an assignment of a

membership interest made under Section 2(v) without prior notice of

non-payment from the Carter Estate would satisfy the outstanding $1.4

million second payment, they could have expressly stated that in the

P&S Agreement. But they did not. And the Court cannot read that term

into the P&S Agreement when the agreement is silent. See Providence

Land Servs., LLC v. Jones, 353 S.W.3d 538, 543 (Tex. App. – Eastland

2011, no pet.) (“Courts do not have the authority to supply the missing

terms of a contract which the parties themselves had either not seen fit

to place in their agreement, or which they did not mutually agree.”).

The undersigned concludes the P&S Agreement unambiguously

prohibits assignment of a membership interest under Section 2(v) unless

authorized by the Carter Estate.

But Defendants made the 2023 Assignment without the Carter

Estates’ authorization. And an unauthorized assignment is void. See

JPMorgan Chase Bank, N.A. v. Ablet, No. 4:17-cv-888-ALM-CAN, 2018

WL 4517628, at *7 (E.D. Tex. Aug. 17, 2018) (holding an unauthorized

assignment is invalid, unenforceable, and void); Rivera v. CitiMortgage,

Inc., No. 3:12-cv-3404-D, 2013 WL 1294009, at *2 (N.D. Tex. Apr. 1,

2013) (“[A]n unauthorized assignment is considered void instead of

merely voidable.”). Thus, the unauthorized April 2023 Assignment had

no effect on Plaintiffs’ claims, much less rendered them moot.

Valentine I, 2023 WL 8832959, at *7-*8.

In sum, Plaintiffs have carried their burden to defeat Defendants’ affirmative

defenses at summary judgment by showing that those defenses are not subject to

factual dispute but fail as a matter of applicable law.

And, for many of the same reasons, Plaintiffs have “established, beyond

peradventure, all of the essential elements of [their] breach of contract claim[s] to

-22-

warrant judgment in [their] favor.” Coum USA Inc. v. Sjobrand Inc., 663 F. Supp. 3d

684, 689 (N.D. Tex. 2023) (citing Fontenot, 780 F.2d at 1194).

Conclusion

The Court GRANTS the motion for summary judgment filed by Plaintiffs

Frances Elizabeth Carter Valentine and William Riley Baxter Carter, in their

capacities as co-administrators of the Estate of Michael E. Carter, as to their breach

of contract claims and the affirmative defenses of Defendants Whitetail Capital, LLC,

Paul G. Comrie, and Elements International Group, LLC [Dkt. No. 46].

Accordingly, the April 30, 2025 trial setting and its related deadlines, see Dkt.

No. 63, are VACATED.

SO ORDERED.

DATE: April 9, 2025

DAVID L. HORAN

UNITED STATES MAGISTRATE JUDGE

-23-