## Facts

- Jerry and Jean Moore borrowed $2,475,000 to buy commercial property, executing a promissory note secured by a deed of trust.
- The note and deed of trust limited the Moores’ personal liability “upon the maturity of the note, whether by acceleration or otherwise,” to 20% of the outstanding principal balance plus accrued interest and other sums due.
- The Moores conveyed the property to Houston State Associates (HSA) by deed stating HSA “assumes and promises to pay” the Moores’ note.
- HSA later conveyed the property to MGM Real Estate Management, Inc. (MGM), which took title “subject to” the lien but did not assume the note.
- MGM defaulted on the loan payments. The lender (Bank Midwest, N.A., as successor holder) accelerated the note, foreclosed, and bought the property at the foreclosure sale as the sole bidder for about $1.16 million.
- Bank Midwest sued the Moores for a deficiency. The Moores sought recovery over against HSA based on HSA’s assumption.
- At trial, the jury found the property’s fair market value at the time of foreclosure to be about $1.45 million.
- Using the accelerated debt balance (about $1.66 million) and the jury’s fair market value finding, the trial court rendered a deficiency judgment of $221,032.09 plus attorney’s fees (including conditional appellate fees). HSA did not contest its liability to the Moores for the amount the Moores owed due to HSA’s assumption.

## Issues

1. Whether legally sufficient evidence supported the jury’s fair market value finding used to compute the statutory deficiency after foreclosure.
2. Whether the note’s and deed of trust’s 20% personal-liability limitation capped the Moores’ liability at 20% of the accelerated indebtedness or at 20% of the deficiency after foreclosure.
3. Whether any challenged evidentiary rulings and the attorney’s-fees award (including conditional appellate fees and related interest) required reversal or modification.

## Decision

- The court affirmed the deficiency judgment and held the evidence was legally sufficient to support the jury’s fair market value determination and the resulting deficiency calculation.
- The court rejected the Moores’ argument that the 20% limitation reduced their liability to 20% of the deficiency; instead, the limitation was measured by reference to the outstanding indebtedness “upon maturity” (including maturity by acceleration).
- Because the $221,032.09 deficiency fell within 20% of the accelerated outstanding debt, the Moores remained personally liable for the entire deficiency amount found.
- The court otherwise affirmed the attorney’s-fees award, with a limited modification regarding the accrual of interest on conditional appellate attorney’s fees.

## Legal Principles

- In a deficiency action following foreclosure, Texas law measures the deficiency using the debt balance minus the property’s fair market value at foreclosure (as found by the factfinder), rather than treating the foreclosure sale price as controlling.
- On legal-sufficiency review (including review of a ruling on a motion for judgment notwithstanding the verdict), an appellate court credits evidence supporting the verdict if reasonable jurors could and will not substitute its view where the evidence permits more than one reasonable conclusion.
- Limited-recourse language stating that makers are “personally liable” for a stated percentage of the “outstanding principal balance” “upon maturity” (including by acceleration) is enforced according to its text and is measured at maturity/acceleration, not recalculated as a percentage of a later-determined deficiency, absent language tying the percentage to the deficiency amount.
- A grantee who “assumes and promises to pay” the note becomes liable on the assumed obligation as between the grantor and grantee, supporting a grantor’s recovery over against the assuming grantee for amounts the grantor must pay on the debt.

## Conclusion

Moore v. Bank Midwest affirmed a post-foreclosure deficiency judgment supported by legally sufficient evidence of fair market value and held that a 20% limited-recourse provision was measured by the outstanding indebtedness at maturity (including by acceleration), so the makers remained liable for the full deficiency because it did not exceed the contractual cap, subject only to a limited modification on interest relating to conditional appellate attorney’s fees.


Moore v. Bank Midwest, 39 S.W.3d 395 (2001)