## Facts

- Villages of Sanger, Ltd. borrowed $696,000 from Interstate 35/Chisam Road, L.P. and Malachi Development Corporation, secured by a deed of trust on Denton County real property.
- Mehrdad Moayedi executed a limited guaranty capping liability at $196,000 plus accrued interest and collection costs.
- The guaranty included a broad waiver stating the guaranty would not be affected by “any defense (other than the full payment of the indebtedness hereby guaranteed),” and that “each and every such defense” was waived.
- Villages defaulted, and the lenders conducted a nonjudicial foreclosure; the lenders were the sole bidder.
- The parties agreed the property’s fair market value at foreclosure was $840,000, while the foreclosure sale price (credit bid) was $487,200.
- The lenders sued Moayedi for a deficiency of $266,748.84.
- Moayedi asserted Texas Property Code § 51.003 and sought an offset based on the difference between fair market value and the foreclosure price.

## Issues

1. Whether Texas Property Code § 51.003’s fair-market-value offset in a deficiency action is an affirmative defense that a guarantor may waive by contract.
2. Whether a general guaranty waiver of “any defense” (except full payment) is sufficiently broad to waive the § 51.003 offset.

## Decision

- The Texas Supreme Court affirmed summary judgment for the lenders.
- The Court held that § 51.003’s fair-market-value offset operates as a waivable affirmative defense.
- The Court held that the guaranty’s waiver of “any defense” (excluding only full payment) encompassed the § 51.003 offset.
- The Court rejected the argument that the waiver was too general to be knowing and intentional in the commercial guaranty context.

## Legal Principles

- Texas Property Code § 51.003 provides a mechanism to reduce a deficiency by substituting fair market value for foreclosure-sale price; it functions as an affirmative defense in a deficiency suit.
- In commercial transactions, statutory protections operating as defenses may be waived by contract unless the Legislature clearly prohibits waiver.
- Broad language waiving “any defense” can include statutory defenses, including § 51.003, when the agreement reflects a voluntary allocation of risk.
- The absence of anti-waiver language in § 51.003 supports enforceability of contractual waivers of the offset.

## Conclusion

The court enforced a commercial guaranty’s broad waiver of “any defense” to bar the guarantor from claiming the Texas Property Code § 51.003 fair-market-value offset, allowing recovery of the deficiency without reduction based on fair market value.


Moayedi v. Interstate 35/Chisam Rd., L.P., 438 S.W.3d 1 (Tex. 2014)