10149923

_____________________________________________________________________________
NO. 05-10-01499-CV
_____________________________________________________________________________
IN THE COURT OF APPEALS
FOR THE FIFTH DISTRICT, DALLAS, TEXAS
_____________________________________________________________________________
R. MICHAEL LAGOW and BRENDA S. LAGOW,
Appellants,
v.
NANCY B. HAMON, by and through her agent and
attorney-in-fact, John L. Roach,
Appellee.
_____________________________________________________________________________
BRIEF OF APPELLEE

DONOVAN CAMPBELL, JR.
State Bar No. 03725300
MCCORD WILSON
RADER & CAMPBELL
(A Professional Corporation)
Stemmons Place
2777 Stemmons Fwy., Suite 1125
Dallas, Texas 75207
Telephone No.: (214) 630-4700
Telecopy No.: (214) 630-9996
COUNSEL FOR APPELLEE
ORAL ARGUMENT REQUESTED BY APPELLEE
ONLY IF GRANTED TO APPELLANT
May 31, 2011
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LIST OF PARTIES AND COUNSEL
Appellants/Defendants
R. Michael Lagow
Brenda S. Lagow
Appellee/Plaintiff
Nancy B. Hamon, by and through her agent
and attorney-in-fact, John L. Roach
Trial and Appellate Counsel
Robert H. Renneker, Esq.
1412 Main Street, Suite 210
Dallas, TX 75202
Tel: (214) 742-7100
Fax: (214) 742-7110
Trial and Appellate Counsel
Donovan Campbell, Jr.
McCord Wilson
RADER & CAMPBELL
Stemmons Place
Dallas, Texas 75207
Telephone No.: (214) 630-4700
Telecopy No.: (214) 630-9996
J. Patrick Bredehoft
THOMPSON & KNIGHT LLP
One Arts Plaza
1722 Routh Street, Suite 1500
Dallas, Texas 75201-2533
Telephone No.: (214) 969-1395
Telecopy No.: (214) 999-1541
ii
TABLE OF CONTENTS
Page
List of Parties and Counsel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i
Table of Contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii
Index of Authorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

Statement Regarding Record Citations and Abbreviations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . viii
Statement of the Case.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix
Statement Regarding Oral Argument.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix

Issues Presented. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x
Restated Issue No. 1
Whether Appellants have waived significant factual points and legal issues by failing to
include record references and citations to legal authorities such that this appeal should be dismissed,
in whole or in part.
Restated Issue No. 2 (In Reply to Appellants Points of Error Nos. 2 and 3, Alleging Error
in Granting Plaintiffs Motions for Summary Judgment and Denying Defendants Motion for
Summary Judgment)
Whether Appellant Brenda Lagow (as the borrower) submitted any competent summary
judgment evidence whatsoever: (a) proving that Plaintiff (as the lender) required Brenda Lagow
to assume or pay the debt of Michael Lagow as a condition to Plaintiffs extension of the
overdue debt owed by Brenda Lagow; or (b) controverting Plaintiffs summary judgment evidence
that Plaintiff imposed no such requirement on Brenda Lagow and that, in fact, Plaintiff would have
extended those debts whether or not Brenda Lagow agreed to assume or pay them.
Restated Issue No. 3 (In Reply to Appellants Point of Error No. 1, Alleging Error in Abating
the Case)
Whether Plaintiff, effectively and without waiver, sought abatement of Brenda Lagows
counterclaim for usury and took corrective action to negate any claim of usury.
iii
Summary Judgment)
Whether, as a matter of law, no usury could have occurred because husband Michael Lagows
Notes constitute debts for which wife Brenda Lagow was already obligated under the doctrines of
community debts, ratification, and agency.
Restated Issue No. 5 (In Reply to Appellants Point of Error No. 4 Alleging Error in the Trial
Courts Offsetting Brenda Lagows Fee Award Against the Judgment of Plaintiff Adverse
to Brenda Lagow)
Whether the trial court, in light of the complete lack of authority on the issue, properly
exercised its discretion to offset Brenda Lagows fee award against the much larger judgment of
Plaintiff adverse to Brenda Lagow.

Statement of Facts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Summary of the Arguments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Arguments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
I. Appellants have waived significant factual points and legal issues by failing to include record
references and citations to legal authorities such that this appeal should be dismissed, in whole or
in part.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Summary Judgment)
II. Appellant Brenda Lagow (as the borrower) failed to submit any competent summary
iv
extended those debts whether or not Brenda Lagow agreed to assume or pay them.. . . . . . . . . . 17
the Case)
III. Plaintiff, effectively and without waiver, sought abatement of Brenda Lagows counterclaim
for usury and took corrective action to negate any claim of usury.. . . . . . . . . . . . . . . . . . . . . . 22
Summary Judgment)
IV. As a matter of law, no usury could have occurred because husband Michael Lagows Notes
constitute debts for which wife Brenda Lagow was already obligated under the doctrines of
community debts, ratification, and agency.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Restated Issue No. 5 (In Reply to Appellants Point of Error 4 Alleging Error in the Trial
to Brenda Lagow)
V. The trial court, in light of the complete lack of authority on this issue, properly exercised its
discretion to offset Brenda Lagows fee award against the much larger judgment of Plaintiff adverse
to Brenda Lagow.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Conclusion and Prayer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Certificate of Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Appendices
A Texas Finance Code 305.006 and 305.103. . . . . . . . . . . . . . . . . . . . . . . . Tab A
B Plaintiffs Response to Defendant Brenda S. Lagows Amended
Motion for Partial Summary Judgment (filed February 15, 2010),
including its Exhibits 1 and 2 (the Second and Third Affidavits of
John L. Roach)(SCR ).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tab B
C Defendants Response to Plaintiffs Motion for Partial Summary
Judgment (filed January 28, 2010), including its Exhibits consisting
of the Affidavits of R. Michael Lagow and Brenda S. Lagow (SCR ). . . . Tab C
v
INDEX OF AUTHORITIES
Page(s)
CASES
Alamo Lumber Co. v. Gold, 661 S.W.2d 926 (Tex. 1983). . . . . . . . . . . . . . . . . . 11, 18, 20, 29, 31
Bolling v. Farmers Branch ISD, 315 S.W.3d 892
(Tex. App. - - Dallas 2010, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 16
Boyd v. Diversified Financial System, 1 S.W.3d 888
(Tex. App. - - Dallas 1999, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Burnett Ranches, Ltd. v. Cane Pet., Inc., 289 S.W.3d 862
(Tex. App. - - Amarillo 2009, pet. denied). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Burns v. Burns, 439 S.W.2d 452 (Tex. Civ. App. - - Texarkana 1969,
writ refd n.r.e.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Carr v. Brasher, 776 S.W.2d 567 (Tex. 1989). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Cathey v. Booth, 900 S.W.2d 339 (Tex. 1995). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Chanowsky v. Friedman, 219 S.W.2d 501 (Tex. Civ. App. - -
Fort Worth 1949, writ refd n.r.e.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Cockerham v. Cockerham, 527 S.W.2d 162 (Tex. 1975). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Coffey v. Singer Asset Financing Company, 233 S.W.3d 559
(Tex. App. - - Dallas 2007, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Davis v. City of San Antonio, 752 S.W.2d 518 (Tex. 1998). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Dow Chemical Company v. Francis, 46 S.W.3d 237
(Tex. 2001).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 17
First Bank v. Tonys Tortilla Factory, Inc., 877 S.W.2d 285
(Tex. 1994).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Frazier v. Wynn, 472 S.W.2d 750 (Tex. 1971). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Fredonia State Bank v. General American Life Insurance Company,
vi
881 S.W.2d 279 (Tex. 1994). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 16, 17
Gabel v. Blackburn Operating Corp., 442 S.W.2d 818
(Tex. App. - - Amarillo 1969, no writ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Grebe v. First State Bank, 136 Tex. 226, 150 S.W.2d 64
(Tex. 1941).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Hines v. Hash, 843 S.W.2d 464 (Tex. 1992). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
In Re CPDC, Inc., 337 F.3d 436 (5 Cir. 2003). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
th
26
Johnson County Sheriffs Posse, Inc. v. Endsley,
926 S.W.2d 284 (Tex. 1996). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Kendall Builders, Inc. v. Chesson, 149 S.W.3d 796
(Tex. App. - - Austin 2004, pet. denied). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Lovejoy v. Cockrell, 63 S.W.2d 1009 (Tex. Comm. App. 1933,
judgment adopted). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
McConnell v. Southside ISD, 858 S.W.2d 337 (Tex. 1993). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Mercedes Benz Credit Corp. v. Rhyne, 925 S.W.2d 664
(Tex. 1996).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25, 33
Mock v. Mock, 216 S.W.3d 370 (Tex. App. - - Eastland 2006,
pet. denied).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Nagle v. Nagle, 633 S.W.2d 796 (Tex. 1982). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Nationwide of Brian, Inc. v. Dyer, 969 S.W.2d 518
(Tex. App. - - Austin 1998, no pet.).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30, 31
Nixon v. Mr. Property Management Company, 690 S.W.2d 546
(Tex. 1985).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Pagel v. Whatley, 82 S.W.3D 571 (Tex. App. - - Corpus Christi 2002,
pet. denied).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Patel v. Kuciemba, 82 S.W.3d 589 (Tex. App. - - Corpus Christi 2002,
pet. denied).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
vii
Proctor v. White, 172 S.W.3d 649 (Tex. App. - - Eastland 2005,
no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Republic Underwriters Insurance Company v. Mex-Tex, Inc.,
150 S.W.3d 423 (Tex. 2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Roark v. Stallworth Oil & Gas, Inc., 813 S.W.2d 492
(Tex. 1991).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 18
Schlafly v. Schlafly, 33 S.W.3d 863 (Tex. App. - - Houston [14 Dist.]
th
2000, pet. denied).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Sotelo v. Interstate Financial Corporation, 224 S.W.3d 517
(Tex. App - - El Paso 2007, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23-26
Southwestern Fire & Casualty Company v. Larue, 367 S.W.2d 162
(Tex. 1963).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
United States Fidelity & Guaranty Co. v. Bimco Iron & Metal Corp.,
464 S.W.2d 353 (Tex. 1971). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Wheeler v. Security State Bank, 159 S.W.3d 754
(Tex. App. - - Texarkana 2005, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
STATUTES
Texas Civil Practice & Remedies Code Chapter 31 and Chapter 63.. . . . . . . . . . . . . . . . . . . . . . 33
Texas Finance Code 305.006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 12, 22-27, 31-33
Texas Finance Code 305.103. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Texas Probate Code 156, 160, and 168.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Texas Rule of Appellate Procedure 38.1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Texas Rule of Civil Procedure 166a(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Texas Rule of Civil Procedure 166a(i). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Texas Rule of Civil Procedure 93(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 10
viii
STATEMENT REGARDING RECORD CITATIONS
Prior to the filing of Appellees Brief, the record submitted by Appellants consisted of a
Reporters Record containing the transcript of the February 26, 2010 Plea in Abatement hearing,
along with the Exhibits admitted at that hearing, as well as a Clerks Record consisting of selected
pleadings, orders and judgments, and other trial court documents in pages 1-347. Appellees citation
to this Reporters Record will be designated as RR [page number], and Appellees citations to this
Clerks Record will be designated as CR [page number].
Appellee believes that Appellants have submitted an incomplete and misleading Clerks
Record to this Court, the deficiencies of which have required Appellee to request a Supplemental
Clerks Record from the Dallas County District Clerk. Appellee expects that this Supplemental
Clerks Record will be transmitted to this Court and available to counsel on or before May 31, 2011,
the date on which the instant Brief is due to be filed. In addition, due to the inadvertent omission
from the Supplemental Clerks Record of certain of the pleadings requested by Appellee, a Second
Supplemental Clerks Record is being transmitted from the Dallas County District Clerk to this
Court and available to counsel before the end of the day on May 31, 2011. Appellee will cite the
Supplemental Clerks Record as SCR and the Second Supplemental Clerks Record as
2SCR . As Appellee has not had ample time to review these supplemental records prior to
the time this Brief has to be electronically filed, Appellee will supply the specific page references
as soon as feasibly possible.
Appellee will cite Appellants principal Brief dated March 16, 2011 herein as the Lagow
Brief, and Appellee will refer to Appellants collectively as Appellants or Defendants and to the
individual Appellants as Michael Lagow or Michael and Brenda Lagow or Brenda.
Appellee will refer to herself as the Plaintiff or the Appellee. Other less frequently cited
ix
abbreviations may be defined in the body of this Brief.
STATEMENT OF THE CASE
Because the Lagow Brief omits the required Statement of the Case, Texas Rule of Appellate
Procedure 38.1(d), Appellee will supply this statement.
This case involves basically a suit to enforce payment of a series of promissory notes
executed by Defendants and payable to Plaintiff. (CR 8) Plaintiffs Original Petition was filed on
September 16, 2008. (CR 8; 341) One of the two Defendants, Brenda Lagow, eventually filed a
counterclaim alleging usury against Plaintiff. (CR 24) On January 8, 2010, Plaintiff filed her Motion
for Partial Summary Judgment and a No-Evidence Motion for Summary Judgment regarding the
counterclaim (CR 41, 123), and on January 13, 2010, Defendant Brenda Lagow filed her motion for
partial summary judgment regarding her usury counterclaim. (CR 342)
After granting an abatement of the case for sixty (60) days (CR 343), the trial court held a
hearing on July 8, 2010 regarding all summary judgment motions (CR 344), and the court granted
Plaintiffs motions and denied Defendants motion (CR 344-45), eventually reducing these rulings
to a Final Judgment dated August 27, 2010. (CR 327-30) Defendants filed their Notice of Appeal
on November 24, 2010 (CR 335), and this appeal followed.
STATEMENT REGARDING ORAL ARGUMENT
Pursuant to Texas Rule of Appellate Procedure 39.1, Appellee maintains that oral argument
is unhelpful and unnecessary on several grounds. As referenced in Restated Issue No. 1 herein,
because of their utter failure to include record references and citations to relevant legal authorities
to support factual allegations and legal contentions critical to Appellants appeal, they have waived
those points and issues, and the entire appeal should be dismissed, obviating the need for any oral
argument. In addition, as explained in Restated Issue No. 2, Appellants submitted below and cited
x
herein no competent summary judgment evidence whatsoever to prove their only defense to payment
under the promissory notes, that is, their usury allegation. Accordingly, there is nothing substantive
to orally argue about, and any such argument would entail an irreplaceable loss of time and effort
on the part of this Court and all counsel and a complete waste of judicial resources. Nevertheless,
if the Court determines to grant oral argument to Appellants, then Appellee requests oral argument
as well.
ISSUES PRESENTED
Whether Appellants have waived significant factual points and legal issues by failing to
include record references and citations to legal authorities such that this appeal should be dismissed,
in whole or in part.
Summary Judgment)
Whether Appellant Brenda Lagow (as the borrower) submitted any competent summary
extended those debts whether or not Brenda Lagow agreed to assume or pay them.
xi
the Case)
Whether Plaintiff, effectively and without waiver, sought abatement of Brenda Lagows
counterclaim for usury and took corrective action to negate any claim of usury.
Summary Judgment)
Whether, as a matter of law, no usury could have occurred because husband Michael Lagows
Notes constitute debts for which wife Brenda Lagow was already obligated under the doctrines of
community debts, ratification, and agency.
Restated Issue No. 5 (In Reply to Appellants Point of Error No. 4 Alleging Error in the Trial
to Brenda Lagow)
Whether the trial court, in light of the complete lack of authority on the issue, properly
exercised its discretion to offset Brenda Lagows fee award against the much larger judgment of
Plaintiff adverse to Brenda Lagow.
1
STATEMENT OF FACTS
This action originated as a suit to enforce a series of promissory notes executed by
Defendants and payable to Plaintiff. (CR 8, 10-13; 41-47) At all times relevant to the issues
presented, Defendants Michael Lagow and Brenda Lagow were married to each other. (CR 63-64;
SCR ) Such promissory notes began with a June 12, 2002 note in the principal amount of
$500,000 and culminated in two promissory notes dated August 24, 2006 in the principal amounts
of $1,300,000 and $105,000, both jointly signed by Brenda Lagow and Michael Lagow and payable
to Plaintiff. (CR 45-47, 64-66) The faces of these two August 24, 2006 notes expressly recite that
they are executed in renewal and extension of the unpaid balances of the prior notes. (CR 88, 89)
Plaintiffs attorney-in-fact, John L. Roach, Esq. (Mr. Roach), testified on affidavit that he met with
both Michael and Brenda Lagow regarding extensions of the prior notes, and Brenda confirmed and
ratified the principal obligation of these prior notes. (CR 64-65) Additionally, the faces of these
August 24, 2006 notes recite that both Michael and Brenda Lagow received value for the notes,
that is, they benefitted therefrom. (CR 88, 89) These notes also contain no unwritten oral
agreements clauses set out in all capital letters dictating that the notes represent the final agreement
among the parties regarding these loans, the notes may not be contradicted by evidence of prior,
contemporaneous, or subsequent oral agreements, and there are no unwritten oral agreements
regarding these debts. (CR 88, 89) Moreover, Plaintiff consistently pled that Brenda Lagow
executed all three of the earlier notes by herself or by her authority, specifically utilizing the
language of Texas Rule of Civil Procedure 93(7) (SCR ; CR 123, 124-25), and Defendants never
filed any answer containing the requisite Rule 93(7) verified, sworn plea denying such execution.
(CR 20-21, 22-23, 247-48)
Defendants did not pay these notes at or after their maturity dates. (CR 65-66) In November
2
2004 Michael and Brenda Lagow admitted to Mr. Roach that they could not make the payment due
on December 1, 2004 of the outstanding $1,000,000 loan and, in fact, needed an additional loan of
$300,000 to maintain their lifestyle. (CR 63-64) In August of 2006, both Brenda and Michael
Lagow discussed with Mr. Roach their inability to pay the $1,300,000 loans outstanding, and they
admitted that they could not even pay the $105,000 interest due thereon. (CR 64) Since that time,
neither Michael nor Brenda Lagow has made any payment on these outstanding debts, even though
Mr. Roach has made several demands for same. (CR 65-66) After these demands went unmet,
Plaintiff filed her Plaintiffs Original Petition on September 16, 2008, seeking to enforce payment
on said series of promissory notes. (CR 8)
Defendants originally responded to this lawsuit with a general denial and, as to Brenda
Lagow, a verified denial that the consideration had failed. (CR 20) No mention of any allegation of
usury was made in Defendants pleadings (CR 20) until Defendants September 4, 2009 Defendants
First Supplemental Answer, which alleged usury as an Affirmative Defense. (CR 22) This
allegation echoed Defendants First Amended Response to Plaintiffs Request for Disclosure dated
July 29, 2009 (RR Exhibit 1, at 1-2) wherein Defendants explain that Brenda Lagow asserts usury
as an affirmative defense, although Defendants are not seeking economic damages at the present
time. (Id.) The September 4, 2009 Original Counterclaim of Defendant Brenda S. Lagow (CR 24)
fails to provide detailed total figures for the amount of the alleged usury violation and the attorneys
fees claimed. (CR 25-27)
Not until the December 31, 2009 First Amended Counterclaim of Brenda S. Lagow did
Brenda finally allege that all conditions precedent to Counter-Plaintiffs right to recovery have
occurred. (CR 38) Within six business days thereafter, Plaintiff filed her Plaintiffs Answer to
Defendants First Amended Counterclaim and Plea in Abatement and Plaintiffs First Supplemental
3
Petition and Plea in Abatement, both filed January 8, 2010 and both of which specifically denied that
Defendants had complied with all conditions precedent and denied that Defendants had complied
with Texas Finance Code 305.006. (CR 133-42)
Also on January 8, 2010, Plaintiff filed her Plaintiffs Motion for Partial Summary Judgment
and Plaintiffs No-Evidence Motion for Summary Judgment, the first said Motion affirmatively
seeking to recover under the promissory notes against both Defendants. (CR 41-132) Plaintiff
promptly set her plea in abatement for hearing first on February 4, 2010, but that hearing was reset
by the trial court after the judge was unavailable on that date. (CR 343; SCR ) On February 15,
2010, Plaintiff again requested that the court set and hear these abatement pleas first, before the
summary judgment matters. Plaintiffs Response to Defendant Brenda S. Lagows Amended Motion
for Partial Summary Judgment 3.3. (SCR ) On February 26, 2010, the pleas in abatement were
heard and granted by the trial court, abating the case for sixty (60) days pursuant to Texas Finance
Code 305.006. (CR 343) During that 60-day timeframe, Plaintiff filed and served upon Defendants
her Plaintiffs Notice of Filing Usury Correction Letter and Partial Release dated May 10, 2010
(SCR ), which Notice and Letter expressly stated that Plaintiff disagreed with Defendants
allegation of usury. (SCR )
In connection with said promissory notes and Defendants allegation of usury, Mr. Roach
testified by affidavit that, during his discussions with Michael and Brenda Lagow concerning their
affirmative request for an extension of the subject notes, neither Plaintiff nor Mr. Roach required
Brenda to assume or pay any debt that Michael owed to Plaintiff as a condition of extending the due
dates on either of those notes. (SCR ) Indeed, the subject notes would have been extended by
Plaintiff and Mr. Roach whether or not Brenda agreed to assume or pay them because the motivating
goal of Plaintiff and Mr. Roach at that time was to prevent the notes from lapsing and their
4
enforcement from being barred by limitations. (SCR ) In fact, Brenda confessed as much in her
affidavit testimony, wherein she admitted that she had no discussions with either Nancy Hamon or
John L. Roach concerning the $300,000 note and, with respect to the $1,300,000 note: In August
26, 2006 Michael asked me to sign a note dated August 24, 2006 . . . at no time in connection with
the execution of that note (or the other note dated August 24, 2006 in the amount of $105,000) did
I have any conversations with either Nancy nor [sic] John L. Roach concerning that or any prior
indebtedness owed by Michael. (SCR )
On July 8, 2010, the trial court held a hearing on Plaintiffs motions for summary judgment
and Brendas motion for summary judgment, and the court granted Plaintiffs motions and denied
Brendas motion, without stating any grounds or reasoning therefor. (CR 344-45, 327-30; SCR
) After these rulings became final (CR 327), Defendants filed their Notice of Appeal on November
24, 2010 (CR 335), and its appeal followed.
SUMMARY OF THE ARGUMENTS
Appellants have waived substantial factual points and legal issues by failing to include record
references and citations to legal authorities in the Lagow Brief. These blatant omissions are so
systemic and pervasive throughout the entire Lagow Brief that such brief should be stricken in its
entirety and this appeal dismissed.
Brenda Lagow (as the borrower) failed to submit any competent summary judgment evidence
whatsoever: (a) proving that Plaintiff (as the lender) required Brenda to assume or pay the debt
of Michael Lagow as a condition to Plaintiffs extension of the overdue debt owed by Brenda; or
(b) controverting Plaintiffs summary judgment evidence that Plaintiff and Mr. Roach imposed no
such requirement on Brenda and that, in fact, Plaintiff would have extended those debts whether or
not Brenda agreed to assume or pay them. Because of such failure of proof on the part of Brenda,
5
her usury claims fail, and the judgment below should be affirmed.
Plaintiff, effectively and without waiver, sought abatement of Brendas counterclaim for
usury and took timely corrective action to negate any such claim. Thus, as a matter of law, Plaintiff
cannot be liable to Brenda for any such alleged usury violation under Texas Finance Code
305.006(d).
As a matter of law, no usury could have occurred because husband Michaels notes constitute
debts for which wife Brenda was already obligated under the doctrines of community debt,
ratification, agency, and third-party beneficiary. Thus, the judgment should be affirmed.
In light of the complete lack of authority on this precise issue, the trial issue properly
exercised its discretion to offset Brendas minor fee award against the much larger judgment of
Plaintiff adverse to Brenda. The judgment on this score should be affirmed.
ARGUMENTS
When a trial courts order disposing of a summary judgment motion does not specify the
grounds upon which it was based, the courts ruling will be affirmed on appeal if any of the grounds
advanced by the prevailing party are meritorious. Dow Chemical Company v. Francis, 46 S.W.3d
237, 242 (Tex. 2001); Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989). The orders and judgment
herein do not identify any particular grounds. (SCR , ; CR 327-30) As demonstrated below,
all of the following grounds asserted by Appellee regarding the summary judgment motions at issue
are meritorious, so this Court should affirm the orders and judgment below in favor of Appellee.
I. Appellants Have Waived Significant Factual Points and Legal Issues by Failing to Include
Record References and Citations to Legal Authorities Such That this Appeal Should Be
Dismissed, in Whole or in Part.
Regarding appellate briefs, every statement of facts must be followed by a parenthetical page
reference to the record supporting that statement. Schlafly v. Schlafly, 33 S.W.3d 863, 873 n.8 (Tex.
Appellants have submitted an incomplete and misleading Clerks Record to this Court, requiring
1
Appellee to order a Supplemental Clerks Record to be filed with this Court. For example, Appellants Clerks Record
does not even contain their live pleading at the crucial times of the February 26, 2010 Plea in Abatement hearing (CR
343) or the summary judgment hearing on July 8, 2010 (CR 344), namely, the Second Amended Counterclaim of
Defendant Brenda S. Lagow filed on January 28, 2010 (CR 343; SCR ). Instead, Appellants tendered to this Court
their then-superceded and null First Amended Counterclaim of Defendant Brenda S. Lagow filed on December 31, 2009
(CR 36). Similarly, Appellants omit from their Clerks Record their own January 28, 2010 Defendants Response to
Plaintiffs Motion for Partial Summary Judgment (CR 343; SCR ) containing the only affidavit testimony of
Defendant-summary judgment movant Brenda Lagow, even though Appellants cite and rely on this very affidavit in their
argument to this Court. Lagow Brief at 16. Appellants further neglect to submit the February 15, 2010 Plaintiffs
Response to Defendant Brenda Lagows Amended Motion for Partial Summary Judgment (SCR ) directly replying
to said Defendants Amended Motion for Partial Summary Judgment (CR 145), which Appellant did deliver to this Court.
These and many other like omissions by Appellants clearly signal their anxiety about revealing to this Court a complete
record of their own deficient live pleadings and summary judgment evidence, but these omissions have required extra
effort by Appellee to correct, complete, and clarify the appellate record. Appellee requests that this Court consider this
factor in assessing Appellees argument presented in this I of her Brief.
6
App. - - Houston [14 Dist.] 2000, pet. denied); Texas Rule of Appellate Procedure 38.1(g). If the
th
appellant does not include proper record references, the appellate court will consider the point
waived. Fredonia State Bank v. General American Life Insurance Company, 881 S.W.2d 279, 284
(Tex. 1994). Similarly, an appellate brief, in the argument section, must be supported by appropriate
citations to applicable legal authority, and if such legal citations are omitted, the unsupported issues
are waived, and the entire appeal may be dismissed. Republic Underwriters Insurance Company v.
Mex-Tex, Inc., 150 S.W.3d 423, 427 (Tex. 2004); Bolling v. Farmers Branch ISD, 315 S.W.3d 892,
896-97 (Tex. App. - - Dallas 2010, no pet.)(appeal dismissed because appellants record references
provided no guidance, and alleged legal authority citations were inapplicable); Burnett Ranches, Ltd.
v. Cane Pet., Inc., 289 S.W.3d 862, 870 (Tex. App. - - Amarillo 2009, pet. denied)(error waived
because legal argument was conclusory).
The Lagow Brief suffers from all of these deficiencies, including wholesale omissions to cite
any record references supporting factual allegations and failures to provide legal authority citations
supporting Appellants primary arguments. Thus, Appellants entire appeal should be dismissed,
1
or at least those portions thereof not supported by record references or legal authorities, as set out
7
below. For example, the following list presents some of the factual allegations and legal issues
utterly unsupported by any reference to the record or legal citations:
(a) This case arises out of a suit to enforce two promissory notes. Lagow Brief at 1,
lines 3 and 8 and at 3, line 10.
(b) Lagow provided Hamon with notice of the usury violation after suit was filed, but
prior to asserting her usury counterclaim. Lagow Brief at 2, lines 7-8.
(c) After the continuance was granted, Hamon took no steps to cure the usury. Lagow
Brief at 2, lines 10-11.
(d) Nor did Hamon set the request for abatement for hearing until after Lagow had
responded to the motion for summary judgment. Lagow Brief at 2, lines 14-15.
(e) Hamon notified Lagow that she was not seeking to enforce the portions of the note
that were usurious as to her. Lagow Brief at 2, lines 18-20.
(f) Nancy Hamon is in her nineties . . . her affairs have been managed by an attorney
. . . the funds . . . were advanced at her direction, and the transactions were all
structured by Mr. Roach. Lagow Brief at 3, footnote 1.
(g) Roachs requirement that Brenda Lagow execute the $1,300,000 note and the
$105,000 [sic], thereby assuming her husbands indebtedness as a condition for
renewing the $300,000 obligation, constituted a charge of usurious interest. Lagow
Brief at 4, lines 2-5. This factual and legal allegation is particularly egregious
because no record citation is supplied, it is flagrantly false, and Appellants have no
underlying pleading to support this false allegation; indeed, their live pleading before
the trial court contradicts this allegation. That is, Appellants live pleading at the
time of the summary judgment hearing regarding the usury claim, the Second
8
Amended Counterclaim of Defendant Brenda S. Lagow (SCR ), actually alleges
that the renewal of the notes was apparently conditioned on her agreement to
assume responsibility for payment of the other notes. (SCR ) A court must
determine a summary judgment motion based upon the pleadings on file at the time
of the hearing, Texas Rule of Civil Procedure 166a(c), and if the partys filed
pleadings do not support the contentions in her summary judgment papers, with
appropriate objection, that contention may not be considered. Roark v. Stallworth
Oil & Gas, Inc., 813 S.W.2d 492, 495 (Tex. 1991); Proctor v. White, 172 S.W.3d
649, 652 (Tex. App. - - Eastland 2005, no pet.). Appellee objected to this specific
pleading deficiency in Plaintiffs Response to Defendant Brenda S. Lagows
Amended Motion for Partial Summary Judgment 6.1 (SCR ). Accordingly, not
only is Appellants allegation that Mr. Roach required Brenda Lagow to assume her
husbands indebtedness egregiously false, Appellants have no pleading to support
that allegation, so their appeal must fail on this ground alone.
(h) The first three notes . . . were for advances made solely to Michael Lagow and used
in connection with his business . . . only after Michael Lagow submitted a business
plan to Roach. Lagow Brief at 4, lines 6-8. This allegation similarly suffers from
several defects. First, Appellants had no underlying live pleading to support this
summary judgment allegation at the time of the summary judgment hearing. That is,
the record demonstrates that Appellants live pleading concerning usury at the time
of the summary judgment hearing on July 8, 2010 (CR 344), the Second Amended
Counterclaim of Defendant Brenda S. Lagow dated January 28, 2010 (SCR ),
contained no such statements. Indeed, that Second Amended Counterclaim
9
affirmatively omitted these allegations that were previously contained in the First
Amended Counterclaim of Defendant Brenda S. Lagow dated December 31, 2009
(CR 36-40). Consequently, these unsupported allegations were not set out in the live
pleading of Appellants at the time of the summary judgment hearing, and Appellee
timely objected to this omission in Plaintiffs Response to Defendant Brenda S.
Lagows Amended Motion for Partial Summary Judgment 1.3 (SCR ). Because
Defendants subsequent amended pleading omitted allegations crucial to Appellants
summary judgment motion, this Court should affirm the trial courts denial of
Appellants summary judgment motion on this ground alone.
(i) The first three notes were not executed by Brenda Lagow nor did she receive any
of the funds advanced pursuant to those notes. Lagow Brief at 4, lines 9-10. Not
only do Appellants utterly fail to support this factual contention with any citations to
the record, they are absolutely prohibited from even making this allegation at this
stage of the proceedings because of Appellants prior pleading defects. That is, in
Plaintiffs live pleading at the time of the summary judgment hearing, Plaintiffs First
Amended Original Petition ( 5.2-5.5)(SCR ), as well as in Plaintiffs Response
to Defendant Brenda S. Lagows Amended Motion for Partial Summary Judgment
( 5.3)(SCR ) and Plaintiffs No-Evidence Motion for Summary Judgment (
2.2)(CR 123, 124-25), Plaintiff pled that Brenda Lagow executed all three of the
earlier notes by herself or by her authority, specifically utilizing the language of
Texas Rule of Civil Procedure 93(7), and Defendants never filed any answer
containing the requisite Rule 93(7) verified, sworn plea denying such execution. See
Defendants First Amended Answer (CR 20-21); Defendants First Supplemental
10
Answer (CR 22-23); Defendants Second Supplemental Answer (CR 247-48).
According to Rule 93(7): In the absence of such a sworn plea, the instrument shall
be received in evidence as fully proved. Case law enforces this mandatory provision
of Rule 93(7). Southwestern Fire & Casualty Company v. Larue, 367 S.W.2d 162,
163 (Tex. 1963)(a party must raise by sworn pleadings the defenses of denial of
execution of a promissory note); Wheeler v. Security State Bank, 159 S.W.3d 754,
756-57 (Tex. App. - - Texarkana 2005, no pet.)(a party denying the execution of
notes must file a verified pleading of their contentions; absent such a verified answer,
the document is fully proved), citing Boyd v. Diversified Financial System, 1 S.W.3d
888, 891 (Tex. App. - - Dallas 1999, no pet.). Consequently, said first three
promissory notes must be received in evidence for purposes of the summary
judgment hearings as fully signed by Brenda Lagow, and she may not now deny her
execution of same by herself or by her authority, since she never filed the required
verified answer containing such denial. Because Brenda Lagow is treated as having
executed these prior notes, she was already liable for same, and her core usury claim
must fail as a matter of law because any requirement that a debtor merely assume her
own prior indebtedness as a condition of extending further debt cannot constitute
usury. Alamo Lumber Co. v. Gold, 661 S.W.2d 926, 928 (Tex. 1983). This appeal
should be dismissed, or the trial courts orders and judgment affirmed, on this ground
alone, and Appellee prays for such relief.
(j) Renewal of the $300,000 note on which Brenda Lagow was obligated was therefore
expressly conditioned on her assuming the obligation for the repayment of the
$1,000,000 [sic] executed solely by Michael Lagow. Lagow Brief at 5, lines 8-10.
11
Not only do Appellants utterly fail to cite any record evidence for this contention,
pursuant to those authorities set out in (g) above, Appellants are barred from
making any such contention because they had no live pleading asserting same at the
time of the summary judgment hearings. Appellee incorporates herein those
arguments and authorities referenced in (g) above.
(k) Renewal of the $300,000 note Brenda Lagow was obligated on was therefore further
expressly conditioned on her assuming the obligation for the repayment of the
interest due on the $1,000,000 [sic] executed solely by Michael Lagow. Lagow
Brief at 5, lines 17-19. As explained in (g) and (j) above, no record citation is
provided for this factual allegation, and it is not supported by the live pleadings of
Appellants at the time of the summary judgment hearings.
(l) On September 4, 2009, Brenda Lagow filed her counterclaim, asserting that the
$1,300,000 note and the $105,000 note were usurious because they included amounts
due by her husband for which she was not personally liable. Lagow Brief at 6, lines
1-4. Again, Appellants fail to cite any portion of the record to substantiate this
contention.
(m) After being served with the motions, Brenda Lagow prepared a counter-motion for
summary judgment on the usury claims. At the hearing on the motions for summary
judgment, Hamon argued that she was entitled to abatement of the case under Section
305.006 of the Texas Finance Code. Over Lagows objection, the court abated the
case for sixty (60) days. Lagow Brief at 6, lines 5-9. No support in the record is
cited for these allegations.
(n) After the abatement period ended, Hamon reasserted her motion for summary
12
judgment, which had been modified only to seek recovery of the $300,000 obligation
from Brenda Lagow and the full amount from Michael Lagow. Lagow Brief at 6,
lines 11-14. Once again, Appellants provide no citations to the record for these
statements, which are inaccurate.
(o) It should be noted that neither the motion for summary judgment nor the no-
evidence motion for summary judgment were conditioned upon or subject to the plea
in abatement - - in fact, both motions for summary judgment were wholly silent as
to the plea in abatement contained in the answer to the counterclaim. Both of
Hamons motions for summary judgment were set for hearing on February 26, 2010.
Lagow Brief at 10, lines 1-5. Appellants fail utterly to supply any record references
supporting these allegations.
(p) Lagow obtained a setting of her motion on the same date as Hamons motions.
Lagow Brief at 10, lines 9-10. Again, no record citations are supplied supporting this
contention.
(q) Although artfully worded, this motion for continuance was an acknowledgment of
the right to cure the violation, and the continuance that was subsequently granted by
the trial court was a de facto abatement of the lawsuit which allowed Hamon ample
opportunity to cure the usury. After the continuance was granted, Hamon made no
effort to cure the usury violation nor otherwise raise abatement as a defensive issue
until the date she filed her Plaintiffs Answer to Defendants First Amended Answer
[sic] and Plea in Abatement (which was filed contemporaneously with her two
motions for summary judgment). Notwithstanding detailed notice of Brenda
Lagows claim, Hamon (or her attorneys) chose not to seek abatement of the case but
13
instead went on the attack by filing and setting both traditional and no-evidence
motions for summary judgment, neither of which were made subject to the plea in
abatement. Lagow Brief at 11, lines 5-14. Once again, no record citations
whatsoever are supplied to substantiate these allegations.
(r) Had abatement been the relief her attorneys truly sought, then rather than filing and
setting the motions for summary judgment for hearing, her attorneys should have set
the plea in abatement for hearing. By the time the abatement was heard by the court,
Brenda Lagow had been forced to respond to both motions for summary judgment
and had incurred significant expense and attorneys fees. Not only was the request
for abatement untimely under the doctrine of Hines v. Hash, it had been waived
because Hamon and her attorneys elected to pursue a remedy inconsistent with
abatement. Lagow Brief at 12, lines 2-9. Again, Appellants supply no record
references nor any legal authorities to support these contentions, which are largely
false. In fact, Plaintiff did set her plea in abatement for hearing first on February 4,
2010, but that hearing was reset by the trial court after the judge was unavailable on
that date. (CR 343; SCR ) On February 15, 2010, Plaintiff again requested that
the court set and hear these abatement pleas first, before the summary judgment
matters. Plaintiffs Response to Defendant Brenda S. Lagows Amended Motion for
Partial Summary Judgment 3.3. (SCR )
(s) Notwithstanding the untimeliness and prior waiver of the right to abatement, the
district court abated the case to allow Hamons attorneys to extricate themselves from
a trap of their own making. Hamons attorneys offered not [sic] explanation why
they waited so long to request abatement or the motions for summary judgment were
14
filed without being subject to any plea in abatement. Lagow Brief at 12, lines 13-
17. Again, no record references and no legal authorities are cited for these erroneous
propositions, which are further addressed in III below.
(t) But for the abatement of this case and Hamons belated attempt at a cure, Brenda
Lagow would have prevailed on her motion for partial summary judgment. . . .
When Brenda Lagow was required to assume the debts incurred separately by her
husband (i.e., the obligation for repayment of the $1,000,000 [sic] and the accrued
interest thereon) in connection with the renewal and extension of the $300,000 [sic],
the interest rate went through the ceiling. Lagow Brief at 13, lines 1-9. Once more,
no record references nor any citations to legal authority are provided for these
misstatements.
(u) The $1,000,000 advanced to Michael Lagow was advanced after he had submitted
a business plan to Plaintiff and the proceeds were used in the operation of his
business, which was his sole management community property. The first $1,000,000
advanced by Plaintiff was not for necessaries and therefore Brenda Lagow is not
personally liable for the first $1,000,000 advanced by Plaintiff to Michael Lagow.
Lagow Brief at 15, lines 10-14. Monotonously, these factual and legal allegations are
not supported by any record references or citations to legal authorities.
(v) The evidence is also undisputed that Michael Lagow was not acting as agent for
Brenda Lagow when he executed the notes for the first $1,000,000 advanced. The
notes are all signed by him and there is no indication that he was acting in any sort
of representative capacity. There is no summary judgment evidence that Michael
Lagow was acting as agent for Brenda Lagow in connection with the $1,000,000
15
note, the $300,000 note, or the $1,300,000 note. Also, contrary to the conclusory
allegations in the Affidavit of John L. Roach, Brenda Lagow never ratified any
conduct on Michael Lagows part in connection with the $1,000,000 note. . . .
Reference to two separate obligations - - one by Michael Lagow individually and the
other by Michael Lagow and Brenda Lagow jointly - - is an express recognition of
two separate obligations, not a ratification by Brenda Lagow that Michael Lagow
ever acted as an agent on her behalf. Lagow Brief at 16, lines 1-16. Appellants
supply no record citations nor any legal authorities to support these allegations.
(w) In fact, the only summary judgment evidence presented on this topic is Brenda
Lagows affidavit testimony that she was not involved with any of the loans leading
up to the $1,000,000 note, the use of the proceeds, or any attempt by Michael Lagow
to act on her behalf. Therefore, there was no summary judgment evidence in the
record that Michael Lagow was acting as an agent of Brenda Lagow or that she ever
ratified any such conduct. Based on this undisputed summary judgment record and
but for the abatement incorrectly granted by the district court, Brenda Lagow is
entitled to summary judgment on her usury counterclaim . . . . Lagow Brief at 16,
line 16-at 17, line 3. Once more, Appellants supply no record citations nor any
references to legal authorities supporting these erroneous contentions. Indeed,
Appellants apparently intentionally omitted the Brenda Affidavit from their requested
Clerks Record, as explained more fully in the Statement Regarding Record Citations
and footnote 1 supra.
These blatant omissions to cite record references or legal authorities for Appellants
propositions are so systemic and pervasive that these points are waived, and the entire Lagow Brief
16
should be stricken and this appeal dismissed; Appellee prays for such relief. See Fredonia State
Bank, 881 S.W.2d at 284; Bolling, 315 S.W.3d at 896-97. Appellants are not pro se litigants who
may not be expected to know of or precisely follow Texas Rule of Appellate Procedure 38.1; these
parties have been represented by experienced counsel from the outset of this litigation, see
Defendants Original Answer (SCR ), who is presumed to know Rule 38.1. As this Court held
in Bolling, 315 S.W.3d at 895-96, the Court is not responsible for identifying possible trial court
error, for searching the record regarding facts favorable to an appellant, or for doing legal research
on behalf of an appellant, and neither is Appellee or Appellees counsel. If record references are
not made or are inaccurate, misstated, or misleading, the brief fails. And . . . existing legal authority
applicable to the facts and the questions . . . must be accurately cited. . . . If we are not provided with
existing legal authority . . . , the brief fails. Id. at 896. This Court clearly has discretion to deem
all of these points of Appellants waived, and Appellee prays that the Court exercise that discretion
in favor of such waiver. See Fredonia State Bank, 881 S.W.2d at 284; Davis v. City of San Antonio,
752 S.W.2d 518, 521 (Tex. 1998).
II. Appellant Brenda Lagow (As the Borrower) Failed to Submit Any Competent Summary
Judgment Evidence Whatsoever: (a) Proving That Plaintiff (As the Lender) Required
Brenda Lagow To Assume or Pay the Debt of Michael Lagow As a Condition To
Plaintiffs Extension of the Overdue Debt Owed by Brenda Lagow; or (b) Controverting
Plaintiffs Summary Judgment Evidence That Plaintiff Imposed No Such Requirement on
Brenda Lagow and That, in Fact, Plaintiff Would Have Extended Those Debts Whether or
Not Brenda Lagow Agreed to Assume or Pay Them.
In denying Brenda Lagows summary judgment motion on her usury counterclaim, the trial
court should be upheld unless Brenda demonstrated that there was no genuine issue as to any
material fact involved in the elements of her usury claim and that she was entitled to judgment as
a matter of law. See Cathey v. Booth, 900 S.W.2d 339, 341 (Tex. 1995). In applying this test, a
court must resolve all doubts concerning the existence of a genuine issue of material fact against the
17
movant, here Brenda. Johnson County Sheriffs Posse, Inc. v. Endsley, 926 S.W.2d 284, 285 (Tex.
1996); Nixon v. Mr. Property Management Company, 690 S.W.2d 546, 548-49 (Tex. 1985).
Conversely, in granting Plaintiffs motions for summary judgment, the trial courts orders should be
upheld unless Brenda can prove that more than a scintilla of evidence establishing the material facts
necessary for each element of her usury claim has been demonstrated by her summary judgment
evidence. See Dow Chemical Company v. Francis, 46 S.W.3d 237 (Tex. 2001); Texas Rule of Civil
Procedure 166a(i). Application of these standards to the summary judgment motions at issue can
result only in the affirmance of the orders and judgment below.
With respect to one of the crucial elements of Brendas counterclaim for usury, she submitted
no competent summary judgment whatsoever. The essential elements of a claim for usury are: (1)
a loan of money; (2) an absolute obligation that the principal be repaid; and (3) the exaction of a
greater compensation than allowed by law for the borrowers use of the money. First Bank v. Tonys
Tortilla Factory, Inc., 877 S.W.2d 285, 287 (Tex. 1994). On element number 3, Brenda submitted
not a scintilla of competent summary judgment evidence, so her motion must fail as a matter of law.
This third essential element requires proof of the exaction of a greater compensation than
allowed by law for the borrowers use of the money. Brendas only argument that Plaintiff exacted
a greater compensation than allowed by law is her pled contention that the renewal and extension
of the November 24, 2004 note was apparently conditioned on her agreement to assume
responsibility for payment of the April 15, 2004 note. Second Amended Counterclaim of
Defendant Brenda S. Lagow (the Counterclaim 1.5 (SCR ). The grounds for a summary
judgment motion must be fully set out in the motion and must be founded on grounds contained in
the movants live pleadings. McConnell v. Southside ISD, 858 S.W.2d 337, 341 (Tex. 1993); Roark,
813 S.W.2d at 495; Rule 166a(c). The only pleading ground set out in Brendas live Counterclaim
18
(as of the July 8, 2010 summary judgment hearing, CR 344) is that quoted immediately above, that
is, that the renewal and extension of a prior note was apparently conditioned on Brendas
agreement to assume payment of a different note. This hypothetical allegation does not meet the
Alamo Lumber test explained below and cannot constitute competent summary judgment evidence;
it merely represents speculation, conjecture, and assumption, which cannot substitute for a definite
pleading or constitute evidence conclusively proving this necessary element of usury.
Moreover, the only affidavit evidence cited by Brenda to support her motion is the First
Roach Affidavit, cited sporadically throughout the motion (at 2.3-2.6)(CR 145-54). Shockingly,
Brenda submitted absolutely no affidavit of herself even purporting to affirmatively state that
Plaintiff or Mr. Roach required Brenda to assume or pay the prior notes as a condition of extending
her overdue note. Under the applicable law, this omission on Brendas part defeats her motion by
itself. Indeed, in the only Affidavit presented by Brenda herein, she expressly negated the possibility
of Plaintiff or Mr. Roach expressly requiring her to assume any prior note as a condition of extending
her overdue note when she admitted, with respect to the $300,000.00 note, I had no discussions
with either Nancy Hamon or John L. Roach concerning that note and, with respect to the
$1,300,000.00 note: In August 2006 Michael asked me to sign a note dated August 24, 2006 . . .
at no time in connection with the execution of that note (or the other note dated August 24, 2006 in
the amount of $105,000.00) did I have any conversations with either Nancy Hamon nor [sic] John
L. Roach concerning that or any prior indebtedness owed by Michael. (SCR , )(emphasis
added) Because Brenda judicially admitted that she had no communications whatsoever with
Plaintiff or Mr. Roach concerning either of these questioned notes, Brenda submitted absolutely no
evidence that Plaintiff or Mr. Roach expressly required her to assume or pay the debt of another
person (including Michael Lagow) as an express condition to the extension of Brendas overdue
19
debt. Thus, Brendas motion should have been, and was, summarily denied.
The subject notes themselves do not, on their faces, state a rate of interest exceeding those
rates allowed by law (CR 75-89), nor does Brenda claim differently. Moreover, the notes themselves
do not, on their faces, expressly require Brenda to assume or pay the debt of Michael as an express
condition to Plaintiffs extension of Brendas overdue debt. (CR 75-89) Brendas only allegation
to support the third element of usury (a greater compensation than allowed by law) is her utterly
unsupported contention that Plaintiffs renewal and extension of Brendas prior note was apparently
conditioned on her agreement to assume payment of a separate note. Under Texas Supreme Court
authority, this tenuous allegation fails as a matter of law. In Alamo Lumber Co. v. Gold, 661 S.W.2d
926 (Tex. 1983), the Court held that the amount of the allegedly assumed debt could constitute
interest at a greater compensation than allowed by law only if the borrower proved that the lender
required the borrower to assume or pay the debt of an independent third party already owed to
the lender as a condition to the lenders extension of an overdue debt owed by the borrower. 661
S.W.2d at 927. Brenda submitted absolutely no summary judgment evidence, competent or
otherwise, proving that Plaintiff or Mr. Roach required Brenda to assume or pay a prior note of an
independent third person on which Brenda was not already liable as a condition to extending
Brendas existing note. (SCR ) Thus, Brenda utterly failed to submit competent summary
judgment evidence conclusively proving this required element of her usury claim.
Furthermore, in the Second Affidavit of John L. Roach (the Second Roach Affidavit), at
2 (SCR ), Mr. Roach specifically testified that, during his discussions with Michael Lagow and
Brenda Lagow concerning their affirmative request for an extension of the subject notes, neither
Plaintiff nor Mr. Roach required Brenda to assume or pay any debt that Michael Lagow owed to
Plaintiff as a condition of extending the due dates on either of those notes. Indeed, the subject notes
20
would have been extended by Plaintiff and Mr. Roach whether or not Brenda agreed to assume or
pay them because the motivating goal of Plaintiff and Mr. Roach at that time was to prevent the
notes from lapsing and their enforcement from being barred by limitations. Third Affidavit of John
L. Roach 2 (SCR ). Accordingly, these statements alone created a genuine issue of material fact
on an essential element of Brendas usury Counterclaim and precluded the grant of her motion.
Finally, as pled and briefed by Plaintiff in the trial court (CR 52-54; 126-27), Defendants
waived and are barred and estopped, contractually and under the statutes of fraud and the parol-
evidence rule, from submitting any competent summary judgment or other evidence putatively
substantiating the allegation that Brenda was required to assume obligations of Michael in
connection with the renewal notes of her own debts. That is, the August 24, 2006 promissory notes
expressly set forth the mutual understanding and admission that each note represented a stand-alone,
formal, written agreement which could not be contradicted by any oral representations: THIS NOTE
REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES WITH RESPECT TO THE
LOANS . . . AND IT MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES WITH RESPECT TO
THE INDEBTEDNESS EVIDENCED HEREBY. (CR 88, 89) Accordingly, this contractual
estoppel and waiver, combined with the statute of frauds and the parol-evidence rule, bar Defendants
from submitting any alleged evidence of prior, additional, and/or other agreements, such as the
putative agreement for Brenda to assume the preexisting debts of Michael. See Nagle v. Nagle, 633
S.W.2d 796, 799 (Tex. 1982); Coffey v. Singer Asset Financing Company, 233 S.W.3d 559, 569-70
(Tex. App. - - Dallas 2007, no pet.)(contractual estoppel prevents a party from contradicting the
written terms of a contract).
21
Consequently, the trial courts orders and judgment granting Plaintiffs summary judgment
motions and denying Brendas summary judgment motion should be affirmed.
III. Plaintiff, Effectively and Without Waiver, Sought Abatement of Brenda Lagows
Counterclaim for Usury and Took Corrective Action to Negate Any Claim of Usury.
Appellants contend that Plaintiff waived her right to abatement by not requesting same in a
timely fashion and by seeking relief inconsistent with same. Lagow Brief at 8. Appellants are
incorrect. The starting point in this analysis is Texas Finance Code 305.006(d) and 305.103. The
former provision states:
(d) With respect to a defendant filing a counterclaim action
alleging usurious interest in an original action by the creditor,
the defendant shall provide notice complying with Subsection
(b) at the time of filing the counterclaim and, on application
of the creditor to the court, the action is subject to abatement
for a period of 60 days from the date of the court order.
During the abatement period the creditor may correct a
violation. As part of the correction of the violation, the
creditor shall offer to pay the obligors reasonable attorneys
fees as determined by the court based on the hours reasonably
expended by the obligors counsel with regard to the alleged
violation before the abatement. A creditor who corrects a
violation as provided by this subsection is not liable to an
obligor for the violation.
Id. 305.006(d) (emphasis added). The defendants notice mandated to be given at the time of filing
the counterclaim must state in reasonable detail the nature and amount of the violation. Id.
305.006(b). A creditor corrects the alleged violation by taking any necessary action and making
any necessary adjustment. Id. 305.103(a)(1). Examination of the summary judgment record will
demonstrate that Defendants failed to comply with the requirement to provide detailed notice of the
nature and amount of the violation at the time of filing the counterclaim, and promptly after
Defendants eventually supplied the necessary detailed information to Plaintiff, and asserted that they
had done so, Plaintiff filed her plea in abatement.
22
In the July 29, 2009 Defendants First Amended Response to Plaintiffs Request for
Disclosure (RR Exhibit 1, at 1-2), Defendants explain: Defendant Brenda Lagow has also raised
an affirmative defense that any notes that were executed by her were without consideration because
she was not personally liable on the original note executed by Michael Lagow. By requiring Brenda
Lagow to assume the obligation owed by her husband as his separate debt, Plaintiff has charged
Brenda Lagow interest in excess of the amount allowed by law. . . . Defendants are not seeking
economic damages at the present time. (emphasis added) Obviously, providing notice to Plaintiff
of affirmative defenses and disclaiming any attempt to recover damages certainly cannot comply
with said 305.006. Indeed, in this Disclosure, no dollar amount of alleged unlawful interest or
attorneys fees is provided whatsoever. (Id.) On September 4, 2009, the Original Counterclaim of
Defendant Brenda S. Lagow was filed (CR 24), and it also failed to provide detailed total figures for
the amount of the alleged violation and attorneys fees claimed. (CR 25-27) Moreover, Texas case
law definitively holds that a pleading itself asserting usury cannot provide the separate notice
required by 305.006. Sotelo v. Interstate Financial Corporation, 224 S.W.3d 517, 522 (Tex. App -
- El Paso 2007, no pet.)(where litigant raised her usury claim for the first time in an amended
pleading and argued that the pleading itself provided the necessary notice, court rejected that
argument and held that separate notice was required; court further held that a January 10, 2005
abatement sought and ordered after the March 17, 2004 amended pleading asserting usury, a period
of almost 10 months, was timely and upheld the creditors corrective action taken within 60 days
thereafter). Defendants First Supplemental Answer, also filed below on September 4, 2009 (RR
Exhibit 2, at 1-2), merely describes Defendants usury claim as an affirmative defense entitling
Defendants only to an offset and credit, not to any actual damages or attorneys fees. Obviously,
these statements cannot possibly meet the statutory requirement for a detailed description of the
23
nature and amount of the counterclaim violation. This deficiency is admitted by Defendants sub
silentio by virtue of their omission from the Original Counterclaim of any allegation that Defendants
have complied with all conditions precedent to Defendants right to recover under the usury claim
(CR 24-26), since the statutory notice obviously constitutes such a condition precedent.
Defendants next relevant pleading tacitly admits their prior failure to comply with all
conditions precedent because their December 31, 2009 First Amended Counterclaim of Defendant
Brenda S. Lagow finally contends in 2.4: All conditions precedent to Counter-Plaintiffs right
to recovery have occurred. (CR 38) Within six business days after Defendants filed said First
Amended Counterclaim alleging, for the first time, that they had complied with all conditions
precedent, Plaintiff filed her Plaintiffs Answer to Defendants First Amended Counterclaim and
Plea in Abatement and Plaintiffs First Supplemental Petition and Plea in Abatement, both filed
January 8, 2010, both of which specifically denied that Defendants had complied with all conditions
precedent and denied that Defendants had complied with Texas Finance Code 305.006, while
expressly requesting an abatement under that statutory provision and even citing the Sotelo case.
(CR 133-42)
Considering this factual scenario, there is no doubt but that Plaintiff timely requested an
abatement under said 305.006 promptly after Defendants contended, for the first time, that they
had complied with all conditions precedent to their usury counterclaim, which would include
providing the statutorily required detailed notice of the nature and amount of the alleged violation.
Such 305.006(d) establishes no time limit within which to request an abatement after the defendant
filing the usury counterclaim provides the required notice. That is, the statutory language states that
such defendant shall provide notice at the time of filing the counterclaim, and on application
of the creditor to the court, the action is subject to abatement. Texas Finance Code 305.006(d)
24
(emphasis added). No timeframe is set out in the statute for the creditors application or plea for
abatement to be filed, but once such plea is filed, the action must be abated for sixty (60) days. Id.
Plaintiff has found no reported Texas case directly on point, and Defendants cite none, but
the Sotelo opinion represents the most closely analogous authority. In that case, the court of appeals
expressly held that the amended pleading first alleging the usury claim could not itself serve as the
required statutory notice and that the opposing partys abatement requested almost ten months after
that amended pleading was timely; the court allowed the responding party the opportunity to take
corrective action. 224 S.W.3d at 518-23. As in the case at bar, the Sotelo court affirmed the trial
courts traditional and no-evidence summary judgments in favor of the creditor/usury defendant. Id
at 523. Indeed, the trial judge below expressly cited Plaintiffs good faith belief that Defendants
had not complied with all conditions precedent to the usury counterclaim and had not provided
adequate notice (RR 36-37) in granting the abatement. In view of the complete paucity of reported
case law on this specific subissue of timely abatement under 305.006(d), such decision cannot
constitute an abuse of discretion. See Mercedes Benz Credit Corp. v. Rhyne, 925 S.W.2d 664, 666
(Tex. 1996)(a trial court abuses its discretion only if it acts arbitrarily, unreasonably, or without
reference to any guiding principles).
Moreover, the Sotelo court expressly contradicts Appellants only legal argument on this
abatement issue reflected in their reliance on the Hines case, 843 S.W.2d 464 (Tex. 1992), in which
the pre-suit notice requirement of the DTPA was declared to be based upon the legislative intent to
encourage pre-suit negotiation so as to avoid the expense of litigation and to further settlement
possibilities. 843 S.W.2d at 468. In contrast to this pre-suit DTPA intent, Texas Finance Code
305.006(d) cannot possibly be based upon that same legislative intent since this statute presumes that
litigation has already ensued and that the defendant has already filed her counterclaim. This statute
25
further presumes that the defendant/obligor has already incurred litigation expenses in the form of
attorneys fees and expenses before the abatement because the statute requires the creditor to offer
to pay the obligors reasonable attorneys fees as determined by the court based on the hours
reasonably expended by the obligors counsel with regard to the alleged violation before the
abatement. Texas Finance Code 305.006(d). The Sotelo court pinpoints this distinction in
legislative intent by identifying that the legislatures goal in enacting these provisions was to
encourage creditors to amend usurious contracts in the borrowers favor and to provide an
alternative safe harbor method for correction, 244 S.W.3d at 522, putting the legislative emphasis
on protecting well-intentioned creditors from the often draconian penalties imposed upon them
by the usury statutes. Id. at 522 and n.7. In fact, the Final Judgment in the case at bar preserves the
interests of both Plaintiff and Defendants in this alleged usurious context by recognizing Plaintiffs
effective usury-cure steps but by awarding Defendant $14,700.00 in attorneys fees regarding the
alleged usury violation of Plaintiff before the March 12, 2010 abatement, pursuant to Texas Finance
Code 305.006(d). (CR 330)
In addition, while Appellants do not appear to contest the efficacy of (as opposed to the
timing of) Plaintiffs usury-correction steps, Lagow Brief at 8-12, there can be no doubt but that
Plaintiffs Notice of Filing Usurious Correction Letter and Partial Release (SCR ) complies
with the statute and case law governing same. See Sotelo, 224 S.W.3d at 519 and n.5; In Re CPDC,
Inc., 337 F.3d 436, 441 (5 Cir. 2003); Pagel v. Whatley, 82 S.W.3D 571, 576-77 (Tex. App. - -
th
Corpus Christi 2002, pet. denied).
Finally, Appellants have cited this Court to absolutely no direct evidence whatsoever of any
intent by Plaintiff to waive her right to abatement under 305.006(d). Lagow Brief at 11-12. Texas
law definitively dictates that waiver is the intentional relinquishment of a known right or intentional
26
conduct inconsistent with such a known right. United States Fidelity & Guaranty Co. v. Bimco Iron
& Metal Corp., 464 S.W.2d 353, 357 (Tex. 1971); Kendall Builders, Inc. v. Chesson, 149 S.W.3d
796, 804 (Tex. App. - - Austin 2004, pet. denied). As presented in Restated Issues Nos. 1(i), 2, and
4 hereof, Plaintiff had (and has) several persuasive legal and factual arguments and authorities why
both Defendants were liable on the notes and why Plaintiffs actions (or lack thereof) could not
constitute usury, totally independent of any admission of usury and need to take corrective steps
under 305.006(d). Plaintiff was entitled to pursue these independent grounds for summary
judgment without any need for a usury abatement, and such pursuit is not inconsistent with
Plaintiffs separate right to claim such abatement with respect solely to the usury defense and
counterclaim of only Brenda Lagow. Michael Lagow had no such usury defense or counterclaim and
never asserted one, and Plaintiff was free to pursue him completely independently of 305.006.
Consequently, Appellants have failed to demonstrate any such waiver by Plaintiff, and the judgment
below should be affirmed on this issue.
IV. As a Matter of Law, No Usury Could Have Occurred Because Husband Michael Lagows
Notes Constitute Debts for Which Wife Brenda Lagow Was Already Obligated under the
Doctrines of Community Debts, Ratification, and Agency.
Appellants rail against the long-standing precept under Texas law concerning community
debts, proffering merely the opinions expressed by Professor Thomas Featherston in a 2010 Texas
Bar Journal article. Lagow Brief at 14-15. Appellee is well aware of the long-standing academic
battle waged by Professor Featherston against the concept of community debts and the sincerity of
his beliefs. Nevertheless, with due deference to Professor Featherstons educational acumen,
Appellee submits that his commentary opinions do not outweigh well-established and continuing
legislative and case authority (including Texas Supreme Court opinions) sustaining the viable and
logical doctrine of community debts or obligations.
27
The fact is that the long-time concept of community debts is alive, well, and vibrant in the
current statutory and decisional jurisprudence of this State. This concept holds that debts contracted
during marriage are presumed to be on the credit of the community and, thus, are joint community
obligations. Cockerham v. Cockerham, 527 S.W.2d 162, 171 (Tex. 1975); Mock v. Mock, 216
S.W.3d 370, 374 (Tex. App. - - Eastland 2006, pet. denied). For example, the current language of
the Texas Probate Code provides as follows: The surviving spouse or personal representative shall
keep a separate, distinct account of all community debts allowed or paid in the administration and
settlement of such estate; the surviving spouse, . . . as the surviving partner of the marital
partnership has power . . . to sell, mortgage, lease, and otherwise dispose of community property for
the purpose of paying community debts . . . and has such other powers as shall be necessary to . . .
discharge community obligations; and The survivor shall keep a fair and full account and
statement of all community debts and expenses paid by him, and . . . shall deliver to the heirs . . .
their interest in such estate . . . after deducting therefrom the proportion of the community debts
chargeable thereto. Texas Probate Code 156, 160, and 168.
Moreover, in addition to the 2006 Mock opinion and the 1975 Cockerham decision, a long
and unbroken line of Texas Supreme Court and Texas appellate court decisions continues to sustain
this concept of community debts or obligations. E.g., Frazier v. Wynn, 472 S.W.2d 750, 752-53
(Tex. 1971)(widow held leasehold estate from marriage to deceased husband, subject to payment of
community debts); Burns v. Burns, 439 S.W.2d 452, 453-55 (Tex. Civ. App. - - Texarkana 1969,
writ refd n.r.e.)(two notes executed and assumed by husband in his marriage to wife and prior to
husbands death constitute community debts and community indebtedness created by husband, and
surviving wife had duty to satisfy such community debts); Chanowsky v. Friedman, 219 S.W.2d 501,
503-05 (Tex. Civ. App. - - Fort Worth 1949, writ refd n.r.e.)(third-party plaintiff obtained judgment
28
against only husband during marriage of husband and wife, and wife subsequently died; plaintiff
sued wifes executor to recover against property of wife; executor had duty to pay such community
debts and contracts from wifes property); Grebe v. First State Bank, 136 Tex. 226, 150 S.W.2d
64, 66-68 (Tex. 1941)(debts incurred by one spouse during marriage constitute community debts and
debts owing by the community estate, and surviving spouse is personally liable for the community
debts); Lovejoy v. Cockrell, 63 S.W.2d 1009-11 (Tex. Comm. App. 1933, judgment
adopted)(community property of husband and wife is chargeable with deceased husbands debts, and
executor could utilize wifes interest in such property to pay husbands debts).
In light of this unbroken and uncontradicted line of statutory and case authority from at least
1933 to the present upholding the concept of community debts, and especially the sub-precept of the
wife being subject to payment of such community debts and contracts incurred by the husband,
Appellee respectfully suggests that this Court follow this established statutory and decisional
precedent rather than the proffered, unsupported critical commentary of Professor Featherston.
Application of such actual precedent results in affirmation of the trial court rulings herein because
Brenda Lagow was already liable on the community debts and contracts represented by Michael
Lagows Notes, so no usury could have occurred, as a matter of law. See Alamo Lumber, 661
S.W.2d at 928.
As to ratification, Brendas execution of the August 24, 2006 notes constitutes a confirmation
and ratification of the prior notes since the faces of said August 24, 2006 notes expressly recite that
they are executed in renewal and extension of the unpaid balances of the prior notes. (CR 88, 89)
Moreover, Mr. Roach testified that he met with both Michael and Brenda Lagow regarding
extensions of these notes, and Brenda confirmed and ratified the principal obligation of these prior
notes. (CR 64-65) Thus, the record evidence sustains a finding of ratification of Michaels debt by
29
Brenda, particularly when considered in connection with the contractual estoppel effect of the notes
no unwritten oral agreements clauses explained in II above. Additionally, the faces of the notes
recite that both Michael and Brenda Lagow received value for these notes, that is, they benefitted
therefrom. (CR 88, 89)
In light of such evidence, Texas case law declares that the wife Brenda has ratified the prior
notes of husband Michael. See Patel v. Kuciemba, 82 S.W.3d 589, 598 (Tex. App. - - Corpus Christi
2002, pet. denied)(evidence that wife had knowledge of, assented to, or benefitted from prior notes
executed by husband constitutes ratification and makes wife individually liable along with husband);
Nationwide of Brian, Inc. v. Dyer, 969 S.W.2d 518, 520 (Tex. App. - - Austin 1998, no pet.)(if a
wife received any benefit from a note or contract signed by the husband, the wife is bound by the
terms thereof).
Regarding agency liability, Texas Family Code 3.201 provides that one spouse is personally
liable for the acts of the other spouse if the other spouse serves as agent for the spouse or the other
spouse incurs a debt for necessaries. The undisputed evidence herein demonstrates that the subject
debts were incurred to maintain the lifestyle of Michael and Brenda Lagow (CR 64), and such a
lifestyle debt qualifies as indebtedness for necessaries. See Gabel v. Blackburn Operating Corp.,
442 S.W.2d 818, 820 (Tex. App. - - Amarillo 1969, no writ)(debts incurred by one spouse to
purchase merchandise at a store for the benefit of both spouses represent a contract for necessities
for which both spouses are liable). Additionally, if the non-signatory spouse benefits from the
written instrument signed by the other spouse, the non-signing spouse can be liable under theories
of agency and third-party beneficiary. Dyer, 969 S.W.2d at 520.
Accordingly, under these doctrines of community debts, ratification, agency, and third-party
beneficiary, Brenda was already obligated on the notes executed by Michael, and, as a matter of law,
30
assumption of debts on which a party is already liable cannot constitute usury. Alamo Lumber, 661
S.W.2d at 928. Thus, the trial courts judgment should be affirmed on this ground as well.
V. The Trial Court, in Light of the Complete Lack of Authority on this Issue, Properly Exercised
its Discretion to Offset Brenda Lagows Fee Award Against the Much Larger Judgment of
Plaintiff Adverse to Brenda Lagow.
Appellants contend that, without the offer to pay the obligors reasonable attorneys fees
under Texas Finance Code 305.006(d), the transaction has not been purged of usury. Lagow
Brief at 17. Initially, this Court should note that Appellee asserts that no usury whatsoever occurred,
as explained above. Moreover, Appellants cite no authority for this argument, so their point should
be ignored or denied. The actual language of 305.006(d) does not state that payment of such fees
is required to purge the usury, and no case authority has been found announcing any such holding.
In any event, as evidenced by the Final Judgment (CR 330), this argument is pointless
because the trial court awarded Brenda $14,700.00 in such attorneys fees regarding the alleged
usury violation of Plaintiff before the March 12, 2010 abatement. Appellants only real argument
is that the trial court should not have allowed offset of this $14,700.00 against the much larger
$467,701.37 awarded Plaintiff against Brenda and Michael Lagow, jointly and severally. (CR 330)
Because there is no case law directly on point addressing the propriety of such an offset under said
305.006(d), and Appellants cite none (Lagow Brief at 17-18), Appellants are reduced to arguing
attenuated, improbable future hypothetical examples in their attempt to overturn this ruling.
That is, Appellants contend (Lagow Brief at 17-18) that Plaintiff might collect her judgment
in full from Michael Lagow, thus causing Brenda never to recover said attorneys fees. All evidence
in the record dictates that Michael Lagow has no hope or reasonable ability to pay the total judgment
against him of $1,927,342.32 (plus post-judgment interest at 10% compounded annually, CR 329).
For example, on December 1, 2004, the outstanding $1,000,000 loan from Plaintiff was due and
31
payable, but in November 2004 Michael and Brenda Lagow admitted to Mr. Roach that they could
not make such payment and, in fact, needed an additional loan of $300,000 to maintain their
lifestyle. (CR 63-64) In August of 2006, Both Brenda and Michael Lagow discussed with Mr.
Roach their inability to pay the $1,300,000 loans outstanding, and they admitted that they could not
even pay the $105,000 interest due thereon (CR 64). Since that time, neither Michael nor Brenda
Lagow has made any payment on these outstanding debts, even though Mr. Roach has made several
demands for same. (CR 65-66) Brenda herself admitted in her Affidavit that Michael and I were
unable to repay the $300,000 note when it matured. (SCR ) In light of this uncontradicted record
evidence, it strains credulity to suggest that there is any realistic prospect of Michael voluntarily
paying almost $2,000,000 on this debt in the future, and such attenuated improbability certainly does
not warrant reversal of the trial court on this issue.
Appellants next argue that this issue should be analogized to the attorneys fees that a party
may be required to pay for setting aside a default judgment (Lagow Brief at 18), but Appellants cite
absolutely no legal authorities for any such analogy. Accordingly, this point should be ignored,
dismissed, or rejected. To the contrary, there are several logical arguments against requiring Plaintiff
to pay out of pocket these attorneys fees, rather than offsetting them, some of which the trial judge
himself expressed during the fee hearing. For example, in the unlikely event that Michael Lagow
pays the entire almost $2,000,000 judgment (including interest), then Brenda Lagow will not be
called upon to pay her $467,701 (plus interest) liability, and she will thus have been monetarily
benefitted far above the $14,007 in fees awarded. Moreover, as a practical matter, Brenda would
almost certainly never actually receive any cash payment from Plaintiff of $14,007 because Plaintiff
could immediately file a turnover claim against Brenda under Texas Civil Practice & Remedies Code
Chapter 31 and/or a garnishment action under Chapter 63 against the bank account of Brenda and/or
32
the payor bank issuing any such $14,007 check, which actions would effectively prohibit any real
receipt by Brenda of such payment.
Finally, because a trial court abuses its discretion only if it acts arbitrarily, unreasonably, or
without reference to any guiding principles, Rhyne, 925 S.W.2d at 666, and since there is no case law
directly applying this 305.006(d) attorneys fee provision in the context of an offset, the Final
Judgment cannot possibly constitute such an abuse of discretion. Accordingly, the trial courts order
on this issue should be affirmed.
CONCLUSION AND PRAYER
The record evidence demonstrates that Appellants borrowed over $1,300,000 from Plaintiff
Nancy Hamon (admitted to be an over-90 year-old lady)(Lagow Brief at 3) to support their lavish
lifestyle (CR 64) and then declined to repay same, even after several generous extensions granted
by Plaintiff (CR 64-66). Instead, Appellants have vigorously resisted such repayment and have
utilized suspect, attenuated legal and factual arguments in the attempt to avoid making good on their
promises to repay the generosity of Plaintiff. This Court should countenance such avoidance
techniques no longer and should dismiss this appeal in whole or summarily affirm the trial courts
orders and judgments against these Defendants, without oral argument, and Appellee respectfully
prays for such relief and all other relief requested above. Appellee further prays for such other and
additional relief, special or general, at law or in equity, including general relief, to which she may
be justly entitled.
33
Respectfully submitted,
s/Donovan Campbell, Jr.
McCord Wilson
RADER & CAMPBELL
Stemmons Place
Dallas, Texas 75207
Telephone No.: (214) 630-4700
Telecopy No.: (214) 630-9996
One Arts Plaza
Telephone No.: (214) 969-1395
Telecopy No.: (214) 999-1541
COUNSEL FOR PLAINTIFF/APPELLEE
34
CERTIFICATE OF SERVICE
I certify that on this 31 day of May, 2011, a true and correct copy of the foregoing document
st
(and any attachments) was forwarded by E-mail transmission, hand delivery, and/or certified mail,
return receipt requested, to the Clerk of the Fifth Court of Appeals and to all counsel of record, as
follows:
Robert H. Renneker, Esq. VIA E-MAIL
1412 Main Street, Suite 210 and CERTIFIED MAIL
Dallas, TX 75202.
s/Donovan Campbell, Jr.
35
CERTIFICATE OF COMPLIANCE
I certify that this submitted CD or e-mail attachment of the brief complies with the following
requirements of the Court:
1.
The brief is submitted on a CD or by e-mail attachment;
2. The CD or e-mail attachment is labeled with the following information:
A. Case Name: Michael Lagow and Brenda S. Lagow, Appellants, v. Nancy B.
Hamon, by and through her agent and attorney-in-fact, John L. Roach, Appellee;
B. The Appellate Case Number:05-10-01499-CV
C. The Type of Brief: Brief of Appellee
D: Party for whom the brief is being submitted: Appellee, Nancy B. Hamon
E. The Word Processing Software and Version Used to Prepare the Brief:
WordPerfect 12
3. The CD or e-mail attachment contains only an electronic copy of the brief and the
appendix. The documents in the appendix conform to the requirements of Texas Rules of
Appellate Procedure 9.8 and 38.1(k).
4. The CD or e-mail attachment is free of viruses or any other files that would be disruptive
to the Court's computer system. The following software, if any, was used to ensure the brief
is virus-free: Malwarebytes Anti-Malware
5. I understand that a copy of this brief may be posted on the Court's website and that the
electronically filed copy of the brief becomes part of the Court's record.
6. Copies have been sent to all parties associated with this case.
s/Donovan Campbell, Jr. May 31, 2011
Rader & Campbell, P.C.
_____________________________________________________________________________
36
NO. 05-10-01499-CV
_____________________________________________________________________________
_____________________________________________________________________________
R. MICHAEL LAGOW and BRENDA S. LAGOW,
Appellants,
v.
Appellee.
_____________________________________________________________________________
APPENDIX TO BRIEF OF APPELLEE

DONOVAN CAMPBELL, JR.
MCCORD WILSON
RADER & CAMPBELL
Stemmons Place
Dallas, Texas 75207
Telephone No.: (214) 630-4700
Telecopy No.: (214) 630-9996
PATRICK BREDEHOFT
One Arts Plaza
Telephone No.: (214) 969-1395
Telecopy No.: (214) 999-1541
COUNSEL FOR APPELLEE
37
Appendix
A Tab A Texas Finance Code 305.006 and 305.103
B Tab B Plaintiffs Response to Defendant Brenda S. Lagows
Amended Motion for Partial Summary Judgment
(filed February 15, 2010), including its Exhibits 1 and
2 (the Second and Third Affidavits of John L.
Roach)(SCR )
C Tab C Defendants Response to Plaintiffs Motion for Partial
Summary Judgment (filed January 28, 2010), including its
Exhibits consisting of the Affidavits of R. Michael Lagow
and Brenda S. Lagow (SCR )
NO. 05-10-01499-CV
R MICHAEL LAGOW and BRENDA S. LAGOW,
Appellants,
v.
Appellee.
APPENDIX TO BRIEF OF APPELLEE
DONOVAN JR.
McCORD WILSON
RADER & CAMPBELL
Stemmons Place
Dallas, Texas 75207
Telephone No.: (214) 630-4700
Telecopy No.: (214) 630-9996
PATRICK BREDEHOFf
One Arts Plaza
Dallas, Texas 75201
Telephone No.: (214) 969-1395
TelecopyNo.: (214) 999-1541
CoUNSEL FOR APPEU.EE
37
A- TabA
B- TabB
C - TabC
APPendix
Texas Finance Code 305.006 and 305.103
Plaintiff's Response to Defendant Brenda S. Lagow's
Amended Motion for Partial Sutlll113I)' Judgment
(filed Februaty 15, 2010), including its Exhibits 1 and
2 (the Second and Third Affidavits of John L.
Roach)(SCR _)
Defendant's Response to Plaintiffs Motion for Partial
Summary Judgment (filed January 28, 201 0), including its
Exhibits consisting of the Affidavits ofR. Michael Lagow
and Brenda S. Lagow (SCR _)
38
Appendix Tab A
Texas Finance Code 305.006 and 305.103
V.T.C.A., Finance Code 305.103
c
Effective: I See Text Amendments!
Vernon's Statutes and Code::; Annotated Currentness
Code :\nnos)
Title 4. Regulation of Interest, Loans, and Financed Transactions ..iG Annos)
Subtitle A. Interest (Refs &
"JI Chapttr 305. Penalties and Remedies
'e:J Snbdmpter B. Exception from Liability
-+ 305.103. Correction of Violation
(a) A creditor is not liable to an obligor for a violation of this subtitle if:
Page I
(I) not later than the 60th day after the date the creditor actually discovered the violation, the creditor corrects
the violation as to that obligor by taking any necessary action and making any necessary adjustment, including
the payment of interest on a refund, if any, at the applicable rate provided for in the contract of the parties; and
(2) the creditor gives written notice to the obligor of the ,.iolation before the obligor gives written notice of the
violation or tiles an action alleging the violation.
(b) For the purposes of Subsection (a), a violation is actually discovered at the time of the discove11 of the viola-
tion in fact and not at the time when an ordinarily prudent person, through reasonable diligence, could or should
have discovered or known of the violation. Actual discovery of a ..-iolation in one transaction may constitute ac-
tual discovery of the same violation in other transactions if the violation is of such a nature that it would neces-
sarily be and would be clearly apparent in the other transactions without the necessity of examining all
the other transactions.
(c) For purposes of Subsection (a), written notice is given when the notice is delivered to the person or to the
person's authorized agent or attome) of record personally, by telecopier, or by United States mail to the address
shown on the mrut recent documents in the transaction. Deposit of the notice as registered or certified mail in a
postage paid, properly addressed wrapper in a post office or official deposito!)' under the care and custody of the
United States Postal Service is prima facie evidence of the delivery of the notice to the person to whom the no-
tice is addressed.
CREDIT(S)
Amended by f,cts 19oq. 76tiJ L.:g .. ch. c;J.. 7.18(a), cff. !, 1999.
V 20 II Thomson Reuters. No Claim to Orig. US Gov. Works.
http://web2 .westlaw .com/print/printstream. aspx?destination=atp&prid=ia7 4487040000013 02d2c23. .. 5/26/20 11
V.T.C..\., Finance Code 305.006
c
Effective: September I, 2005
Vernon's Texas Statute.:; and Codes Annot.tteJ Cun
finance CoJe (Rds & _\nno!s)
Title 4. Regulation of Interest, Loans. and Financed Transactions (R;;fs & .\nnosl
Subtitle A. Jnterest (Refs & Annos)
Clnpter 305. Penalties and Remedies
Suoch::pter .\.Civil Liability; Criminal Penalty
.. 305.006. Limitation on Filing Suit
Page I
(a) An action under this chapter must be brought within four years after the date on which the usurious interest
was contracted for, charged, or received. The action must be brought in the county in which:
(I) the transaction was entered into;
(2) the usurious interest was charged or received;
(3) the creditor at the time of the cause of action, if the creditor is an individual;
(4) the creditor maintains its principal office, iftht creditor is not an individual; or
(5) the obligor resides at the time ofthe accrual ofthe cause of action.
(b) Not later than the 6lst da} before the date an obligor files a suit seeking penalties for a transaction in which
a creditor has contracted for, charged, or received usurious interest, the obligor shall give the creditor written
notice stating in reasonable derail the nature and amount of the violation.
(c) A creditor who receives a notice under this section may correct the violation as provided by ctioil 305.103
during the period beginning on the date the notice is received and ending on the 6.0th day after that date. A cred-
itor who corrects a violation as provided by this section is not liable to an obligor for the violation.
(d) With respect to a defendant filing a counterclaim action alleging usurious interest in an original action by the
creditor, the defendant shall provide notice complying with Subsection (b) at the time of filing the counterclaim
and, on applil.:ation of the creditor to the court, the action is subject to abatement for a period of 60 days from
the date of the court order. During the abatement period creditor may correct a violation. As part of the cor-
201 I Thomson Reuters. No Claim to Orig. US Gov. Works.
http://web2.westlaw.com/printlprintstream.aspx?destination=atp&prid=ia744973600000 1302d2d 1 a... 5/26/2011
V.T.C.A., Finance Code 305.006 Page2
rection of the violation, the creditor shall offer to pay the obligor's reasonable attorney's fees as determined by
the court based on the hours reasonably expended by the obligor's counsel with regard to the alleged violation
before the abatement. A creditor who corrects a violation as provided by this subsection is not liable to an oblig-
or for the violation.
CREDIT(S)
Added by Acts lit9(), 76lh ch. 62, 7. 18(a). l. 1999. Amended by Acts 2005, 791.h L.::g., ch.
I 0 18, ' :!.07, Sept. I, ' !005.
HISTORICAL AND STATUTORY NOTES
2006 Main Volume
Acts 2005, 79th Leg. , ch. 1018 in subsec. (b) substituted ", charged, or received usurious interest" for "or
charged usurious interest", and rewrote subsec. (d) which prior thereto read:
"(d) The notice requirement of Subsection (b) does not apply to a defendant filing a counterclaim action alleging
usurious interest in an original action b} the creditor."
Prior Laws:
Rev.Civ.St.l895, art. 3106.
Acts 1907, 30th Leg., p. 277.
Rev.Civ.St. l9 I 1, art 4982.
Acts l 963, 58th Leg., p. 550, ch. 205, 28.
V\!iOO.l's :\nn.Civ.St. J at. )U73.
Acts 1967, 60th Leg., p. 610, ch. 274, 2.
Acts 1979, 66th Leg., p. 604, ch. 281, 1.
Vcm_;,n's, \nn.Civ.St. art . . '>069-1 .06(3).
Acts 1997, 75th Leg., ch. 1008, I.
V.T.C.A., Co<.l l'
LAW REVIEW COMMENT ARIES
;.J 20 I 1 Thomson Reuters. No Claim to Orig. US Gov. Works.
http://web2. westlaw.com/print/printstream.aspx?destination=atp&prid=ia 744973600000 1302d2d J a... 5/26/201 1
Appendix Tab B
Plaintiff's Response to Defendant Brenda S. Lagow' s Amended Motion for
Partial Summary Judgment (filed February 15, 201 0), including its Exhibits 1
and 2 (the Second and Third Affidavits of John L. Roach)(SCR _)
':""" .., , 9! ,'
f: ., :u .;
,.
c ,, ..,
No.
NANCY B. HAMON, by and through
her Agent and Attorney-in-Fact, John L.
Roach,

2010 FE3 15 :.H 1: 38
1N THE DIS'foRlCT COURT
; : :.: i . . .
G/.lJ . . : : .; ..
.. . :' ;r' J y
Plaintiff
v. 116m JUDICIAL DISTRICT
R. MICHAEL LAGOW and BRENDA
S. LAGOW,
Defendants. DALLAS COUNTY, TEXAS
PLAINTIFF'S RESPONSE TO DEFENDANT BRENDA S. LAGOW' S
AMENDED MOTION FOR PARTIAL SUMMARY JUDGMENT
TO THE HONORABLE JUDGE OF SAID COURT:
Plaintiff Nancy B. Hamon, by and through her Agent and Attorney-in-Fact, John L. Roacl1
(the files this his Response to Defendant Brenda S. Lagow's Amended Motion for
Partial Summary Judgment (the "Response''), and for the same would respectfully show the Court
as follows:
I.
Objections to Movant's Purported "Evidence"
1.1. fu her Amended Motion for Partial Summary Judgment (the "MSJ"), Brenda S.
Lagow (the "Movant" or "Brenda") purports to rely on a number of materials listed on pages 2-3 of
the MSJ. To the extent that Movant contends that same represent competent summary judgment
evidence, Plaintiff hereby objects to same on the following bases. Plaintiff objects to all of the
PLAINTIFF'S RESPONSE TO DEFENDANT BRENDA S. LAGOW'S
AMENDED MOTION FOR PARTIAL SUMMARY JUDGMENT Pagel
pleadings listed in MSJ l.S(A) through (0), except to the extent that Defendants' pleadings
represent judicial admissions and admissions against Defendants' interest. Otherwise, such
pleadings cannot constitute competent summary judgment evidence to support the MSJ. Plaintiff
prays that the Court strike any and all such references in the MSJ to any such pleadings to the extent
that same are argued to constitute competent summary judgment evidence. Plaintiff further objects
to the Original Petition referenced in l.S(A) of the MSJ because said Original Petition has been
completely supplanted and replaced by Plaintiff's First Amended Original Petition filed herein on
or about November 12, 2008. Similarly, Plaintiff objects to the Motion for Partial Summary
Judgment referenced in 1.5{G) and (J) of the MSJ because said document has been completely
supplanted and replaced by the instant Amended MSJ.
1.2. Plaintiff further objects to the entire MSJ because it admits, in 1.2 thereof, that the
instant MSJ is based upon "the First Amended Counterclaim of Defendant Brenda S. Lagow," a
pleading that has been completely supplanted and replaced by a subsequent amended pleading of this
Defendant; consequently, there is no operative, effective pleading to support this MSJ, and it should
be summarily denied.
1.3. Plaintiff further objects to the factual allegations contained in MSJ 2.2 regarding
advances allegedly used in colUlection with Michael Lagow's business and that such funds were
advanced only after Michael Lagow submitted a business plan because Defendants have no live
pleading making or supporting these allegations. Since any summary judgment motion must be
based upon contentions set out in the movant's live pleading, Plaintiff moves to strike such
unsupported allegations in said 2.2, after which this MSJ should be summarily denied.
AMENDED MOTION FOR PARTIAL SUMMARY JUDGMENT Page2
II.
Summary Judment Evidence
2.1. Plaintiff's Response is supported by the following competent summary judgment
evidence, aU of which is incorporated herein by reference:
1. Defendants' First Amended Answer; Defendant's First Supplemental Answer; and
First and Second Amended Counterclaims of Defendant Brenda S. Lagow; all of
same only as to the specific judicial admissions and admissions-against-interest
referenced below.
2. Plaintiff's Motion for Partial Summary Judgment and Plaintiff's No-Evidence
Motion for Summary Judgment (both of which were filed herein on or about January
8, 20 I 0), including especially the Affidavit of John L. Roach in Support ofPlaintiffs
Motion for Partial Summary Judgment (the "First Roach Affidavit") attached as
Exhibit A to said Plaintiffs Motion for Partial Summary Judgment.
3. Plaintiff's First Amended Original Petition; Plaintifrs Amended Answer to
Defendant's First Amended Counterclaim and Plea in Abatement; Plaintiff's Answer
to Defendant's Second Amended Counterclaim and Plea in Abatement; and
Plaintiff's Amended First Supplemental Petition and Plea in Abatement.
4. Defendant Brenda S. Lagow's Original and Amended Motions for Partial Summary
Judgment and any Reply of said Defendant to this Response, to the extent of said
Defendant's judicial admissions and admissions-against-interest referenced below.
5. The Second Affidavit and Third Affidavit of John L. Roach, which are attached
hereto as Exhibit 1 and Exhibit 2.
2.2. In accordance with Rule 166a(d), Plaintiff hereby files his statement of intent to use
previously unftled discovery products as summary judgment proof. Such products are referenced
in the above subparagraphs.
lli.
Plaintiff's Pleas in Abatement
3 .1. Defendants have failed to comply with the statutory mandates ofTexas Finance Code
305.006(b) and (c) requiring that, before Defendants may file a claim or defense asserting usury,
Defendants must give Plaintiff at least sixty-one ( 61) days advance written notice of same, stating
in reasonable detail the nature and amount of the violation. Thereafter, Plaintiff will have at least
sixty (60) days to correct any such alleged violation before Defendants m a y ~ any such claim or
defense as contained in the First Amended Counterclaim of Defendant Brenda S. Lagow (the
''Counterclaim") filed herein on or about December 31, 2009, upon which the MSJ based, as
admitted by Brenda. MSJ at, 1.2. The same statutory mandates apply to the Original Counterclaim
of Defendant Brenda S. Lagow filed herein on or about September 4, 2009 and the Second Amended
Counterclaim of Defendant Brenda S. Lagow filed herein on or about January 28, 2010. Moreover,
with specific reference to counterclaims, Texas Finance Code 305.006(d) specifically mandates
that, "at the time of filing the counterclaim ... the defendant shall provide notice" complying with
subsection (b) above. After the plaintiff has received such complying notice from the defendant
filing the counterclaim, on application by the plaintiff to the court, ''the action is subject to abatement
for a period of60 days." Texas Finance Code 30S.006(d).
3.2. Texas courts have specifically applied these statutory requirements to usury claims
and defenses asserted for the first time in ongoing litigation by means of amended pleadings (such
as the instant Counterclaim), and in such situations, abatement of the case is mandatory. Sotelo v.
Interstate Financial Corp., 224 S.W.3d 517, 518-23 (Tex. App.-- El Paso 2007, no pet.). Sotelo
also directs that the amended pleading itself cannot constitute the required statutory notice; a separate
written notice stating in reasonable detail the nature and amount of the violation must be sent to the
creditor, separate and apart from the amended pleading itself. I d.
3.3. Plaintiffhas previously asserted this specific Plea in Abatement in Plaintiffs Answer
and Amended Answer to Defendant's First Amended Counterclaim and Plea in Abatement, in
Plaintiff's Original and Amended First Supplemental Petition and Plea in Abatement, and in
Plaintiff's Answer to Defendant's Second Amended Counterclaim and Plea in Abatement, all of
which are incorporated herein by reference. These Pleas in Abatement have previously been set for
hearing before this MSJ on February 4, 2010. Accordingly, the Court should hear these Pleas first,
before considering the MSJ, and the Court should sustain these Pleas in Abatement and order this
case, along with the MSJ bearing, abated for a reasonable time period in which to allow Defendants
the opportunity to comply the statutory mandates referenced above. In the event that Defendants fail
to comply with such statutory requirements within such timeframe, Plaintiff prays that the Court
dismiss the Counterclaim and the MSJ in their entireties, with prejudice.
IV.
Judicial Standards Applying to Motions for Summary Jud&ment
4.1. This Response is expressly filed subject to and without waiving those Pleas in
Abatement referenced in Ill above.
4.2. A claimant's motion for summary judgment may be granted only when the movant's
competent summary judgment evidence conclusively proves all the elements of the movant's cause
of action. Cathey v. Booth, 900 S. W.2d 339, 341 (Tex. 1995). In assessing a motion for summary
judgment, the court must assume that all the non-movant's proof is true. Science Spectrwn, Inc. v.
Martinez, 941 S.W.2d 910-911 (Tex. 1997); Nixon v. Mr. Property Management Company, 690
S.W.2d 546, 548-49 (Tex. 1985). Moreover, the court must indulge every reasonable inference in
favorofthenon-movant. Science Spectrum, 941 S.W.2dat 911;Nixon, 690 S.W.2d at 549. Under
Rule 166a(c), the movant must demonstrate that there is no genuine issue as to any material fact
involved in the elements of the movant's claim and that the movant is entitled to judgment as a
AMENDED MOTION FOR PARTIAL SUMMARY JUDGMENT PageS
matter of law. In applying this test, the court must resolve all doubts concerning the existence of a
genuine issue of material .fact against the movant. Johnson County Sheriffs Posse, Inc. v. Endsley,
926 S.W.2d 284,285 (Tex. 1996); Nixon, 690 S.W.2d at 548-49.
v.
Factual Background
5 .1. Most of the accurate facts regarding the instant MSJ have been adequately sef out in
mf 2-11 ofthe First Roach Affidavit, which are incorporated herein by reference.
5.2. Moreover, with respect to one of the crucial elements of Brenda's Counterclaim for
usury, she has submitted no competent summary judgment whatsoever, as will be demonstrated
below. The essential elements of a claim for usury are: (1) a loan of money; (2) an absolute
obligation that the principal be repaid; and (3) the exaction of a greater compensation than allowed
by law for the borrower's use of the money. First Bankv. Tony 's Tortilla Factory, Inc., 877 S. W.2d
285, 287 (Tex. 1994). On element number 3, Brenda bas submitted no competent summary
judgment whatsoever, so her MSJ must fail as a matter oflaw.
5.3. Additionally, as properly pled by Plaintiff in Plaintiffs First Amended Original
Petition (at , 5.2-5 .5) and Plaintiff's No-Evidence Motion for Summary Judgment (at, 2.2 ), Brenda
executed all of the earlier notes by herself or by her authority leading up to the August 24, 2006
Promissory Notes, and Brenda's execution of said August 24, 2006 Notes constitutes a confirmation
and ratification of those prior notes.
AMENDED MOTION FOR PARTIAL SUMMARY .nJDGMENT Page6
VI.
ARGUMENTS & AUTHORITIES
A. Plaintiff's Evidence Creates A Fact Issue On the Essential Elements ofBrenda's Usuty
Counterclaim
6.1 . As referenced above, the third essential element of a claim of usury requires proof
of the exaction of a greater compensation than allowed by law for the borrower's use of the money.
Brenda's only argument that Plaintiff exacted a greater compensation than allowed by law is her pled
contention that "the renewal and extension of the November 24, 2004 note was apparently
conditioned on her agreement to asswne responsibility for payment of the Apri115, 2004 note."
Counterclaim 1 1.5. The grounds for a summary judgment motion must be fully set out in the
motion and must be founded on grounds contained in the movant's live pleadings. McConnell v.
Southside ISD, 858 S.W.2d 337, 341 (Tex. 1993); Rule 166a(c). The only pleading ground set out
in Brenda's live Counterclaim is that quoted immediately above, that is, that the renewal and
extension of a prior note was "apparently conditioned onH Brenda's agreement to asswne payment
of a different note. This hypothetical allegation does not constitute competent summary judgment
evidence and merely represents speculation, conjecture, and assumption, which cannot constitute
evidence conclusively proving this necessary element of usury.
6.2. Moreover, the only affidavit evidence cited by Brenda to support her MSJ is the First
Roach Affidavit, cited sporadically throughout the MSJ (at ~ 1 2.3-2.6). Shockingly, Brenda submitS
absolutely no affidavit of herself even purporting to affirmatively state that Plaintiff or Mr. Roach
required Brenda to assume or pay the prior note as a condition of extending her OYerdue note. Under
the applicable law, this omission on Brenda's part defeats the MSJ by itself. Indeed, in the only
Affidavit presented by Brenda herein, she expressly negates the possibility ofPlaintiff or Mr. Roach
AMENDED MOTION FOR PARTIAL SUMMARY JUDGMENT Page 7
expressly requiring her to asswne any prior note as a condition of extending her overdue note when
she admits, with respect to the $300,000.00 note, "I had no discussions with either Nancy Hamon
or JohnL. Roach concerning that note and, with respect to the $1,300,000.00 note: "ln.August2006
Michael asked me to sign a note dated August 24, 2006 ... at no time in connection with the
execution of that note (or the other note dated August 24, 2006 in the amount of $1 05,000.00) did
I have any conversations with either Nancy Hamon nor John L. Roach concerning that or any prior
indebtedness owed by Michael., Because Brenda judicially admits that she had no communications
whatsoever with Plaintiff or Mr. Roach concerning either of these questioned notes, Brenda has
submitted absolutely no evidence that Plaintiff or Mr. Roach expressly required her to assume or pay
the debt of another person (including Michael Lagow) as an express condition to the extension of
Brenda's overdue debt. Thus, the MSJ must be swnmarily denied.
6.3. The subject notes themselves do not, on their faces, state a rate of interest exceeding
those rates allowed by law, nor does Brenda claim differently. Moreover, the notes themselves do
not, on their faces, expressly require Brenda to assume or pay the debt of Michael as an express
condition to Plaintiff's extension of Brenda's overdue debt. Brenda's only allegation to support the
third element of usuzy (a greater compensation than allowed by law) is her utterly unsupported
contention that Plaintiff's renewal and extension ofBrenda' s prior note was "apparently conditioned
on" her agreement to assume payment of a separate note. Under Texas Supreme Court authority,
this tenuous allegation fails as a matter of law. In Alamo Lumber Co. v. Gold, 661 S.W.2d 926,928
(Tex. 1983), the Court held that the amount of the allegedly assumed debt could constitute interest
at "a greater compensation than allowed by law" only if the borrower proved that the lender
"required" the borrower "to assume or pay the debt" of an independent third party already owed to
AMENDED MOTION FOR PARTIAL SUMMARY JUDGMENT PageS
.<
the lender "as a condition to" the lender's extension of an overdue debt owed by the borrower. 661
S.W.2d at 927. Brenda has submitted absolutely no summary judgment evidence, competent or
otherwise, proving that Plaintiff or Mr. Roach required Brenda to assume or pay a prior note of an
independent third person on which Brenda was not already liable as a condition to extending
Brenda's existing note. Thus, Brenda has utterly failed to submit competent summary judgment
evidence conclusively proving this required element of her usury claim.
6.4. Furthermore, in the Second Affidavit of John L. Roach (the "Second Roach
Affidavit"), a t ~ 2, Mr. Roach specifically testifies that, during his discussions with Michael Lagow
and Brenda Lagow concerning their affirmative request for an extension of the subject Notes, neither
Plaintiff nor Mr. Roach required Brenda to assume or pay any debt that Michael Lagow owed to
Plaintiff as a condition of extending the due dates on either of those Notes. Indeed, the subject Notes
would have been extended by Plaintiff and Mr. Roach whether or not Brenda agreed to assume or
pay them because the motivating goal of Plaintiff and Mr. Roach at that time was to prevent the
notes from lapsing and their enforcement from being barred by limitations. Third Affidavit of John
L. R o a c h ~ 2. Accordingly, these statements alone create a genuine issue of material fact on an
essential element of Brenda's usury Counterclaim and precludes the grant of her MSJ.
6.5. Moreover, according to the Texas Supreme Court, as a matter of law, when a
borrower is required, as a condition of making or extending a loan, merely to assume and/or pay
another one of his own debts, such requirement cannot constitute usurious interest. Alamo Lumber,
651 S. W.2d at 928. The subject Note(s) that Brenda alleges she was "apparently required to assume"
were, as a matter oflaw, already existing debt of Brenda. Thus, even if she were actually required
to assume that debt (which she was not), same cannot result in usurious interest, as a matter of law.
....
6.6. Under at least three different legal precepts, the prior Note(s) that Brenda alleges she
might have apparently been required to assume (but which factually she was not) represent debt on
which Brenda was already liable. First, Brenda and Michael Lagow were married at all relevant
times (First Roach 4 & 5; Brenda Affidavit and if a wife receives any benefit from
a note or contract signed by the husband, the wife is bound by the terms of that note or contract, as
a matter of law. Patel v. Kuciemba, 82 S. W .3d 589, 598 (Tex. App. - - Corpus Christi 2002, pet.
denied); Nationwide of Brian, Inc. v. Dyer, 969 S.W.2d 518, 520 (rex. App. - - Austin 1998, no
pet.). Second, the August 24, 2006 Promissory Notes which Brenda signed constitute ratification
and confirmation of her liability on the prior notes. Patel, 82 S. W.3d at 598. Third, because none
of the prior notes agrees to look solely to the separate estate of Michael Lagow for satisfaction and
payment, those notes represent joint community obligations on which Brenda and Michael Lagow
(and their community property) are jointly obligated. See Mock v. Mock, 216 S. W.3d 3 70, 3 7 4 (Tex.
App. - - Eastland 2006, pet. denied); Cockerham v. Cockerham, 527 S. W.2d 162, 171 (Tex. 1975).
These arguments and authorities are explained more fully in Plaintiffs NoEvidence Motion for
Summary Judgment (at W 2.1 through 2.3) and in Plaintiffs Motion for Partial Summary Judgment
(at ft 3.20 through 3.22), which are expressly incorporated herein by reference.
VII.
Conclusion
As discussed above, Brenda has wholly failed to submit any competent summary judgment
evidence conclusively proving at least one of the required elements of her usury claim. Moreover,
Plaintiff has submitted competent summary judgment evidence raising genuine issues of material
fact on at least one of these required elements of Brenda's usury CoWlterclaim. Accordingly,
AMENDED MOTION FOR PARTIAL SUMMARY .roDGMENT Page 10
,.
Brenda's MSJ must be denied.
WHEREFORE, PREMISES CONSIDERED, Plaintiff prays that this Court deny Brenda's
MSJ in its entirety, and for such other and further relief, both at law and in equity, to which Plaintiff
shows himself justly entitled.
Respectfully submitted,
~ ~ ~ h r :
Donovan Campbell, J . ~ ~ ,
McCord Wilson
RADER & CAMPBELL
(A PROFESSIONAL CORPORATION)
Stemmons Place
Dallas, Texas 75207
Telephone No.: (214) 630-4700
Telecopy No.: (214) 630-9996
Bredehoft & Associates
2777 N. Stemmons Freeway, Suite 1124
Dallas, Texas 75207
Telephone No.: {214) 819-8085
TelecopyNo.: (214) 630-9996
ATTORNEYS FOR PLAINTIFF
~
I hereby certify that on this L day of February, 2010, a true and correct copy of the
foregoing document (and any attachments) was forwarded by hand delivery, telecopy transmittal,
and/or certified mail, return receipt requested, to all counsel of record, as follows:
Robert H. Renneker, Esq.
1412 Main Street, Suite 21 0
Dallas, TX 75202
VIA CM # 7002 1000 0004 8879 1319
:
No. 08-11922-F
Roach,
Plaintiff
v.
R MICHAEL LAGOW andBRENDA S.
LAGOW,
Defendants.

IN 1HE DISTRICT COURT
116m JUDICIALDISTRICT
DAllAS COUNTY, TEXAS
SECOND AFFIDAVIT OF JOHN L ROACH
STATEOFTEXAS

COUNTY OF DALLAS
EXHIBIT
1.
BEFORE ME, the undersigned authority, on this day personally appeared John L. Roach,
who being by me duly sworn on his oath deposed and said:
1. "My name is John L. Roach. I am over twenty-one (21) years of age and am of sound
mind and fully competent to make this Affidavit I have never been convicted of a felony or a crime
involving moral turpitude. I am an attorney licensed by the State of Texas. I currently am .and, at
all relevant times hereto, have been the agent and attorney-in-filet for Nancy B. Hamon, Plaintiff
herein. fn this capacity, I am responsible for the management ofMs. Hamon's financial and business
affairs, and I had personal involvement in the transactions on which this lawsuit is based. This
involvement specifically included participating in the negotiation of the series of loans of monies
from Ms. Hamon to Defendants R. Michael Lagow and Brenda S. Lagow, drafting the Promissory
Notes which the Lagows signed to evidence the loans from Ms. Hamon, and taking actions in an
SECOND AFFIDAVIT OF JOHN L. ROACH Pa,el
.-
effort to collect principal and interest amounts due and owing under the Promissory Notes.
Accordingly, the following facts are within my personal knowledge and are 1rue and correct. I
attach hereto as Exhibit 1 a true and correct copy of the Power of Attorney that I bold from Nancy
B. Hamon; on page 5 thereof appears Nancy B. Hamon's signature, which I know and recognize.
2. Regarding the August 24, 2006 Promissory Notes (as defined and discussed on pages
46 of the "Affidavit of John L. Roach in Support of Plaintiff's Motion for Partial Summary
Judgment'' (the "First Roach Affidavit")), during my discussions with Michael Lagow and Brenda
Lagow (the "Lagowsn) in or about August 2006 concerning their affirmative request for an extension
ofboth the $1,000,000.00 Aprill5, 2004 Promissory Note and the $300,000.00 November 24,2004
Promissory Note, neither Nancy Hamon nor I required Brenda Lagow to assume or pay any debt that
Michael Lagow owed to Ms. Hamon as a condition of extending the due dates on either of said
Promissory Notes."
Further Affiant sayeth not.
SUBSCRIBED AND SWORN TO BE
certify which witness my hand and official sea .
SECOND AFFIDAVIT OF IOHN L ROACH
ME on thed day of January, 2010, to
Pagel
No. 08-11922-F
Roach,
Plaintiff
v.
R MICHAEL LAGOW and BRENDA S.
LAGOW,
Defendants.

IN THE DISTRICT COURT
116m JUDICIAL DISTRICT
DALLAS COUNTY, TEXAS
TIDRD AFFIDAVIT OF JOHN L. ROACH
EXHIBIT
STATE OF TEXAS I.:L

COUNTY OF DALLAS
BEFORE .ME, the undersigned authority, on this day personally appeared John L. Roach,
who being by me duly sworn on his oath deposed and said:
1. "My name is John L. Roach. I am over twenty-one (21) years of age and am of sound
mind and fully competent to make this Affidavit. I have never been convicted of a felony or a crime
involving moral turpitude. I am an attorney licensed by the State of Texas. I currently am and, at
all relevant times hereto, have been the agent and attorney-in-fact for Nancy B. Hamon, Plaintiff
herein. In this capacity, I am responsible for the management ofMs. Hamon's financial and business
affairs, and I had personal involvement in the transactions on which this lawsuit is based. Tiris
involvement specifically included participating in the negotiation of the series of loans of monies
from Ms. Hamon to Defendants R. Michael Lagow and Brenda S. Lagow, drafting the Promissory
Notes which the Lagows signed to evidence the loans from Ms. Hamon, and taking actions in an
THffiD AFFIDAVIT OF JOHN L. ROACH Pagel
effort to collect principal and interest amowt.ts due and owing under the Promissory Notes.
the following facts are within my personal knowledge and are true and correct.
2. Regarding the August 24, 2006 Promissory Notes (referred to as Notes 5 and 6 in
Brenda's MSJ and as defined and discussed on pages 4-6 of the "Affidavit of John L. Roach in
Support of Plaintiff's Motion for Partial Summary Judgment .. (the "First Roach Affidavit")}, during
my discussions and communications with Michael Lagow and Brenda Lagow (tbe "Lagows,.) in or
about August 2006 concerning their affinnative request for an extension of both the $1,000,000.00
AprH 1.5, 2004 Promissory Note and the $300,000.00 November 24, 2004 Promissory Note, neither
Nancy Hamon nor I required Brenda Lagow to assume or pay any debt tbat Michael Lagow owed
to Ms. Hamon as a condition of extending the due dates on either of said Promissory Notes. In fact,
these Notes would have been extended by Ms. Hamon and me whether or not Brenda Lagow agreed
to assume or pay them (or any other debt of Michael Lagow) because the motivating goal of Ms.
Hamon and myself at tbat time was to prevent said earlier Notes from lapsing and their enforcement
from being barred by limitations."
SUBSCRIBED AND SWORN TO BEF
certify wbicb witness my hand and official seal.
TIURD AFnDA VJT OF JOHN L. ROACH
ME on tbe/.J.d_ dayofFebruary, 2010, ro
LJC)A J. OIH.VA.'tt
M'f CO+.ut!S!nN XJIIm
Qltioar ao. 2012
Appendix Tab C
Defendant's Response to Plaintiffs Motion for Partial Summary Judgment
(filed January 28, 201 0), including Its Exhibits consisting of the Affidavits of
R. Michael Lagow and Brenda S. Lagow (SCR _)
her Agent and John L.
Roach,
Plaintiff,
NO. 08-11922-F
IN TIIE DISTRICT COURT
vs.

116111 JUDICIAL DISTRICT
R. :MICHAEL LAGOW and BRENDA
S. LAGOW,
Defendants. DALLAS COUNTY,_-TEXAS ..
DEFENDANTS' RESPONSE TO PLAINTIFF'S
MOTION FOR PARTIAL SUMMARY
-
I ,
Defendants R. MICHAEL LAGOW and BRENDA S. LAGOW file Defeh,4ants'
-<
Response to Plaintiff's Motion for Partial Summary Judgment and in support thereof would show
the following:
1.0 Scope of the Response.
1.1 This Defendants' Response to Plaintiffs Motion for Partial Summary Judgment is
based on the following pleadings, affidavits, and exhibits on file herein:
A. Plaintiff's Original Petition;
B. Defendants' First Amended Answer;
C. Defendants' First Supplemental Answer;
D. First Amended Counterclaim of Defendant Brenda S. Lagow;
E. Second Amended Counterclaim of Defendant Brenda S. Lagow;
F. Plaintiffs Answer to Defendants' First Amended Counterclaim and Plea in
Abatement;
G. Plaintiff's Motion for Partial Summary Judgment and the Affidavit of John
L. Roach in Support of Plaintiff's Motion for Partial Summary Judgment;
RESPONSE TO PLAINTIFF'S MOTION
FOR PARTIAL SUMMARY JUDGMENT- Page 1
H. Defendant Brenda S. Lagow's Motion for Partial Summary Judgment;
I. Defendant Brenda S. Lagow's Response to Plaintiff's No-Evidence Motion
for Summary Judgment;
J. the Affidavit of Brenda S. Lagow;
K. the Affidavit ofRobe11 H. Renneker; and
L. this Defendants' Response to Plaintiff's Motion for PartiaJ Summary
Judgment.
2.0 Factual Basis of This Response.
2.1 Plaintiff bas brought this action to enforce two promissory notes executed by
Defendants R. Michael Lagow and Brenda S. Lagow on August 24, 2006- one for $1,300,000 and
one for $105,000. The two notes represent the culmination of a series of four prior notes spanning
the course of four years and are surnm.arized as follows:
Date of Note Principal Maker(s)
Amount
Note 1 June 12, 2002 $500,000 Michael Lagow
Note2 December 1, 2003 $750,000 Michael Lagow
Note3 Aprill5, 2004 $1,000,000 Michael Lagow
Note4 November 24, 2004 $300,000 Michael Lagow &
Brenda Lagow
Note 5 August 24, 2006 $1)300,000 Michael Lagow &
Brenda Lagow
Note 6 August 24, 2006 $105,000 Michael Lagow &
Brenda Lagow
DEFENDANTS' RESPONSE TO PLAINTIFF'S MOTION
Comments
renewal ofNote I
plus advance of
additional $250,000
renewal ofNote 2
plus advance of
additional $250,000
additional advance of
$300,000 for
personal expenses
renewal of Note 3
and Note 4
interest on Note 3
The notes listed above are attached to the Affidavit of John L. Roach attached to Plaintiffs Motion
for Partial Summary Judgment. Defendants do not challenge the execution of the notes.
2.2 Defendant Brenda S. Lagow has challenged Plaintiff's claims in this case on the
groWld that the notes charge usurious interest and has asserted a counterclaim seeking recovery for
usurious interest. The evidence is undisputed that Notes I through 3 were for advances that were
made solely to Michael Lagow and were used in connection with his business. In fact, these notes
were executed and the fimds were advanced only after Michael Lagow submitted a business plan to
Plaintiff. Notes 1 through 3 were not executed by Brenda Lagow nor did she receive any of the
funds advanced pursuant to those notes.
2.3 The $300,000 note [Note 4] represents a personal loan to both Michael and Brenda
Lagow of$300,000 that was advanced to maintain the Lagow's lifestyle. [See, Affidavit of John L.
Roach, 5]. Brenda Lagow does not deny the execution of this note or the receipt of the funds
represented by the $300,000 note.
2.4 The $300,000 note [Note 4) matured on March 31, 2005. On August 24, 2006, the
Lagows executed anew note in the principal amountof$1,300,000 [Note 5]. The $1,300,000 note
recited that it was "executed in renewal and extension of the unpaid balances of (i) the note dated
April15, 2004 [i.e., Note 3 ], payable by R. Michael Lagow to the payee herein in the principal sum
of One Million Dollars ($1,000,000) and (ii) the note dated November 24, 2004 [i.e. , Note 4),
payable by the makers hereof to the payee herein in the principal sum ofTirree Hundred Thousand
Dollars." Renewal of the $300,000 note on which Brenda Lagow was obligated was therefore
expressly conditioned on her assuming the obligation for the repayment of the $1,000,000 executed
solely by Michael Lagow.
RESPONSE. TO-PLAINTIFF'S MOTION.
FOR PARTIAL SUMMARY JUDGI\.IENT - Page 3
2.5 In addition to the $1,3 00,000 note, the Lagows were required to execute a note in the
amountof$105,000 [i.e., Note 6], which wasfortheoutstandinginterestdueonNotes3 and4. [See
Affidavit off John L. 6 -7]. The $105,000 note recited that it was "executed in renewal
and extension of the \mpaid interest accrued to the date hereof on (i) the note dated April 15, 2004
[i.e., Note 3], payable by R. Michael Lagow to the payee herein in the principal sum of One Million
Dollars ($1, 000, 000) and (ii) the note dated November 24, 2004 (i.e., Note 4 ], payable by the makers
hereof to the payee herein in the principal sum of Three Hundred Thousand Dollars." Renewal of
the $300,000 note Brenda Lagow was obligated on was therefore further expressly conditioned on
her assuming the obligation for the repayment of the interests due on the $1,000,000 executed solely
by Michael Lagow.
2.6 According to the affidavit of John L. Roach, Plaintiff has charged Defendant Brenda
S. Lagow the following sums of interest through August 3 I, 2009:
"Principal" on Note 5 dated August 24,2006:
interest through December 31, 2006:
interest from January I, 2007 through August 31, 2009:
"Principal" on Note 6 dated August 24, 2006:
interest from January 1, 2007 through August 31, 2009:
Total "principal" and interest charged by Plaintiff:
$ 1,300,000.00
27,567.12
353,532.94
$105,000.00
2,226.57
28.554.56
$ 1,816.881.19
[These numbers are derived from the Affidavit of John L. Roach, 9 and 10]. Deducting the
principal amount of the November 24, 2004 note [Note 4] that represented an actual advance to
Brenda Lagow, it is clear from Plaintiff's own proof that Brenda Lagow was charged interest of
$1,516,881.19 from November 24, 2004 through August 31,2009.
DEFENDANTS' .RESPONSE TO PLAINTIFF'S MOTION
FOR PARTIAL SUMMARY JUDG:MENT - Page 4
2. 7 The maximum amount of interest that Plaintiff could charge Brenda Lagow was 18%
per annum. For the period from November 24, 2004 through August 31, 2009, the maximum
amount of interest that could be charged on the $300,000.00 note at 18% per annum, compounded
annually, is $331,946.53. The excess interest charged by Plaintiff is $1,1 84,934.66, which is more
than three times the amount that could be lawfully charged.
3.0 Objections to the Affidavit of John L. Roach.
3.1 Defendants object to Paragraph 6 of the Affidavit of John L. Roach where be states:
... both Michael Lagow and Brenda Lagow agreed to sign new Promissory Notes:
under which Brenda Lagow confirmed and ratified the principal obligation consisting
of the total outstanding principal and interest due on the $1,000,000 Aprill5, 2004
Note; which extended the maturity dates for the principal amounts due and owing
under both Notes; and pursuant to which they would agree to pay the outstanding
interest due.
The promissory notes signed by the Lagows are the best evidence oftheir terms. None of the notes,
including the $1,000,000 note, recite that they are a ratification of any prior action,. loan, or advance.
Mr. Roach s statement that the note was a confirmation and ratification by Brenda Lagow is merely
a legal conclusion that is unsupported by any competent summary judgment evidence.
states:
3.2 Defendants also object to Paragraph 7 of the Affidavit of John L. Roach where he
This Note represented for Michael Lagow. a renewal and extension of the principal
balances due under the April 15, 2004 Promissory Note (for $1,000,000) and the
November 24, 2004 Promissory Note (for $300,000) and, for Brenda Lagow, the
confirmation and ratification of the principal obligation consisting (in part) of the
$1,000,000 amount and the renewal and extension of the $300,000 amount.
Mr. Roach's statement that the $1,300,000 note was a confirmation and ratification by Brenda
Lagow is merely a legal conclusion that is unsupported by any competent summary judgment
evidence and is contrary to the express language of the $1,300,000 note which carefully recited that
the $1,000, 000 note was the payable by Michael Lagow and that the $300,000 note was payable by
both Michael and Brenda Lagow.
3.3 Defendants also object to the additional gratuitous statement contained in the
Affidavit of Jolm L. Roach where be states:
Thls Note [i.e., the $105,000 note] represented, for Michael Lagow, the amount of
interest then due and owing under the April 15, 2004 Promissory Note and, for
Brenda Lagow, the confirmation and ratification of the principal obligation consisting
(in part) ofthe $105,000 amount.
Mr. Roach's statement that the $105,000 note was a confirmation and ratification by Brenda Lagow
is merely a legal conclusion that is unsupported by any competent summary judgment evidence and
is contrary to the express language of the $105,000 note which carefully recited that the $1,000, 000
note was the payable by Michael Lagow and that the $300,000 note was payable by both Michael
and Brenda Lagow.
4.0 There Is No Such Thing As Community Debt.
4.1 In her motion for partial summary judgment, Plaintiff argues that Defendants are
"jointly and severally liable in their personal and community capacities for all monies due and owing
under the August 24, 2006 promissory notes." [Plaintiffs Motion for Partial Summary Judgment,
~ 3.18]. P1aintiffinvokes-incorrectly-''the long-standing presumption that debts contracted during
marriage are presumed to be on the credit of the conununity and, thus, are joint C<>mmunity
obligations," citingMockv. Mock, 216 S.W.3d 370, 374 (Tex. App.-Eastland, 2006, pet denied),
and Cockerham v. Cockerham, 527S.W.2d 162, 171 (Tex. 1975).
4.2 Mock v. Mock, was recently discussed in an article appearing in the January 2010
Texas Bar Journal, T. FEATHERSON AND A. DICKSON, Marital Property Liabilities: Dispelling the
Myth of Community Debt. 13 TEx. BAR J. 16 (2010). In the article, the authors noted that the so-
FOR PARTIAL SUMMARY JUDGMENT - Page 6
called presumption [that debts contracted during marriage are community debts] doesn't really exist:
"There is no presumption that debts contracted during the marriage are on the credit of the
community and thus are joint conununity obligations. The correct long-standing presumption is that
property acquired on credit is community property unless the creditor agreed to look only to the
acquiring spouse's separate property for satisfaction., In other words, where the creditor agrees to
look only to a spouse's separate property for repayment, the property acquired by that extension of
credit may be considered as separate property-under the Texas Family Code, there is no such thing
as a community debt. In fact, this "long-standing presumption" flies in the face of Section 3.201 of
the Texas Family Code, which provides that:
Sec. 3201. SPOUSAL LIABILITY. (a) A person is personally liable for the acts
of the person's spouse only if:
(1) the spouse acts as an agent for the person; or
(2) the spouse incurs a debt for necessaries as provided by Subchapter
F, Chapter 2.
(b) Except as provided by this subchapter, community property is not subject to
a liability that arises from an act of a spouse.
(c) A spouse does not act as an agent for the other spouse solely because of the
marriage relationship.
In the present case, the undisputed summary judgment evidence establishes that the first $1,000,000
that was advanced by Plaintiff was advanced solely to Michael Lagow. Brenda Lagow did not sign
any of the notes until she signed the November 24, 2004 note for $300,000. The $1,000,000
advanced to Michael Lagow was advanced after he had submitted a business plan to Plaintiff and
the proceeds were used in the operation ofhis business, which was his sole management community
property. The first $1 ,000, 000 advanced by Plaintiff was not for necessaries and therefore Brenda
-DEFENDANTS'. RESPONSE TO PLAINTIFF'S MOTION.
FOR PARTIAL SUMMARY JUDG.MENT- Page 7
, . ........... ,
Lagow is not personally liable for the first $1,000,000 advanced by Plaintiff to Michael Lagow.
4.3 The evidence is also undisputed that Michael Lagow was not acting as agent for
Brenda Lagow when he executed the notes for the first $1,000,000 advanced. The notes are all
signed solely by him and there is no indication that be was acting in any sort of representative
capacity. There is no evidence before the court that Michael Lagow was acting as agent for Brenda
Lagow in connection with the $1,000,000 note, the $300,000 note, or the $1,300,000 note.
4.4 Contrary to the conclusory assertions contained in the Affidavit of John L. Roach,
Brenda Lagow never ratified any conduct on Michael Lagow's part in connection with the
$1,000,000 note. In fact, both the $1,300,000 note and the $105,000 evidence two separate
obligations by stating that the notes were executed in renewal and extension of the unpaid balances
and interest due "of (i) the note dated April 15, 2004, payable by R. Michael Lagow to the payee
herein in the principal sum of One Million Dollars ($1,000,000) and (ii) the note dated November
24,2004, payable by the makers hereof to the payee herein in the principal sum of Three Hundred
Thousand Dollars.'' Reference to two separate obligatioD-One by Michael Lagow individually and
the other by Michael Lagow and Brenda Lagow jointly-is an express recognition of two separate
obligations, not a ratification by Brenda Lagow that Michael Lagow ever acted as an agent on her
behalf. In fact, the only summary judgment evidence presented on this topic is Brenda Lagow's
testimony that she was not involved with any of the loans leading up to the $1,000,000 note, the use
of the proceeds, or any attempt by Michael Lagow to act on her behalf Therefore, there is no
summary judgment evidence before the court that Michael Lagow was acting as an agent on behalf
of Brenda Lagow or that she ever ratified any such conduct.
FOR PARTIAL SUMJ\1ARY JUDGMENT- Page 8
5.0 Plaintiff Is Not Entitled to Abatement of This Action.
5.1 Plaintiff has asserted in her no-evidence motion summary judgment that Brenda
Lagow carmot prevail on her claim for usury because she has failed to provide written notice of usury
on the "6lst day before Defendants filed said counterclaim" as required by TEx. FIN. CODE ANN.
305.006. Plaintiffs are incorrect in asserting that a defendant must give 60 days notice prior to
asserting a counterclaim- because usury was raised as a defense and as a counterclaim, the notice
requirements are governed by subparagraph (d) of Section 305.006 which provides that the party
claiming usury may give notice of the offense at the time of the filing of the counterclaim. Brenda
Lagow has complied with all statutory prerequisites to brining this usury claim.
5.2 Although prior notice of usury is not required when asserted as a counterclaim,
Brenda Lagow provided Plaintiff notice of the usury violation on July 29, 2009 by serving
Defendants' First Amended Response to Plaintiff's Request for Disclosure that stated:
By requiring Brenda Lagow to assume the obligation owed by her husband as his
separate debt, Plaintiff has charged Brenda Lagow interest in excess of the amount
allowed by law. As a result, Plaintiff has forfeited the principal amount of the "loan"
to Brenda Lagow, forfeited the interest charged, and is liable to Brenda Lagow for
three times the amount of unlawful interest charged, together with attorneys' fees.
S .3 On September 4, 2009 Brenda Lagow filed her original counterclaim, asserting her
usury claim for the first time. On the same date, Defendants served their Defendants' Second
Amended Response to Plaintiffs' Request for Disclosure. In addition to the language contained the
same language as Defendants' First Amended Response to Plaintiff's Request for Disclosure, the
Seconded Amended Response also provided a calculation of Brenda Lagow's damages:
Brenda S. Lagow is seeking the recovery of $2,969,648.1 0. The maximum
amount of interest that Plaintiff could charge Defendant Brenda S. Lagow on the
$300,000 note from April 15, 2004 through August 24, 2006 was no more than
$110,118. By requiring Brenda S. Lagow to assume the obligation evidenced by the
April 15, 2004 note, Plaintiff contracted for and charged Brenda S. Lagow
$889,882.70 interest in excess of the maximum amount allowed by law. Brenda S.
Lagow is entitled to recover from Plaintiff three times the amount of excess interest
charged by Plaintiff. Because Plaintiff has charged more than twice the amount of
lawful interest, Brenda S. Lagow is also entitled to recover from Plaintiff the sum of
$300,000, which is amount of principal of the November 24, 2004 note.
This disclosure was made prior to Defendants having the benefit of John L. Roach's calculations of
interest as asserted in Plaintiffs Motion for Partial Swnmary Judgment, although the underlying
basis for calculation remains the same.
5.4 Section305.006(d)allowsfor-butdoesn'tmandate-a60-dayperiodofabatement
during which period the creditor may correct the violation. The language of 305.006(d) is
reproduced below:
(d) With respect to a defendant filing a counterclaim action alleging usurious
interest in an original action by the creditor, the defendant shall provide notice
complying with Subsection (b) at the time of filing the counterclaim and, on
application of the creditor to the court, the action is subject to abatement for a period
of 60 days from the date of the court order. During the abatement period the creditor
may correct a violation. As part of the correction of the violation, the creditor shall
offer to pay the obligor's reasonable attorney's fees as determined by the court based
on the hours reasonably expended by the obligor's counsel with regard to the alleged
violation before the abatement. A creditor who corrects a violation as provided by
this subsection is not liable to an obligor for the violation.
5.5 Plaintiff has received the 60-day period and failed to correct that violation. On
September 22, 2009 Plaintiff filed Plaintiff's Uncontested First Motion for Continuance of Trial
Setting. In the motion, Plaintiff asserted as the reason for continuance of the trial setting that
Plaintiff has asserted her usury counterclaim on September 4, 2009. As an additional reason for
continuance the Plaintiff stated:
4. In addition, more time is needed for all parties to pursue settlement
negotiations and mediation. Some initial settlement inquiries have been made
between the parties, but the present trial setting does not allow for significant,
substantive settlement negotiations and any potential mediation. While it is
premature to anticipate whether full settlement could be reached, even if partial
settlement can be accomplished in the near future, any necessary trial could be
significantly streamlined. Additional time is necessary to devote to such settlement-
mediation efforts, as opposed to consuming that time in trial-preparation activities.
This motion for continuance is an express acknowledgment of Plaintiffs usury claims and an
implicit acknowledgment of Plaintiffs right to cure the violation.
5.6 The court granted Plainti:fPs motion and reset the trial from October 5, 2009 to
February 15,2010, granting Plaintiff a de facto abatement in this case. During that period of time
Plaintiff made no effort to cure the usury violation. In fact, Plaintiff did not raise abatement as a
defensive issue until the date she filed her Plaintiff's Motion for Partial Summary Judgment and
Plaintiff's No-Evidence Motion for Summary Judgment.
5. 7 Abatement is not an absolute prerequisite to asserting a counterclaim for usury and
may be waived. Like the Texas usury laws, the Deceptive Trade Practices Act also contains
provision for notice ofDTP A violations and abatement of actions to cure the violation. In Hines v.
Hash 843 S. W.2d 464 (Tex. 1992), the supreme court held that the defendant waived abatement of
the action by failing to request it in a timely fashion. In Hines, the court noted that while the notice
requirement of the DTP A is clearly mandatory, that feature alone does not determine the
consequences for failing to comply with it. Comparing the DTP A notice provision with similar
provisions in the Medical Liability and Insurance Improvement Act (and a number of other acts), the
court in Hines held that "the purpose of the notice requirement, to encourage pre-suit negotiations
so as to avoid the expense oflitigation, is better served by abating an action filed without notice for
the duration of the statutory notice period to allow the parties to negotiate, than by dismissing the
action altogether." 843 S.W.2d at 468. A request for abatement must be timely. "To be timely, the
request for abatement must be made while the purpose of notice--settlement and avoidance of
..
litigation expense-remains viable. Thus, defendant must request an abatement with the filing of
an answer or very soon thereafter." 843 S.W.2d at 469. "A defendant who fails to make a timely
request for abatement must be considered to have waived his objection to the lack of notice." Jd
5.8 Plaintiff was placed on notice of the usury violation on July 29, 2009 and again on
September 4, 2009. On September 22, 2009 Plaintiff moved for a "continuance" of this action to
enable the parties to pursue settlement discussions. Tills continuance constitutes an abatement of
this action, and allowed Plaintiff ample opportunity to cure the usury. From July 29, 2009 to present,
neither Plaintiff nor her counsel bas taken any steps to correct the violation. Section 305.006 of the
Texas Finance Code has been satisfied and Plaintiff is not entitled to assert lack of notice or
abatement as a defense to Brenda Lagow's usury counterclaim.
5.9 Even if this court were to hold that Plaintiff has not been offered an ample
opportunity to cure the usury violation, the evidence is Wldisputed that Plaintiffhas waived any right
to abatement she might otherwise have. Plaintiff first raised abatement in Plaintiff's Answer to
Defendant's First Amended CoWlterclaim and Plea in Abatement (filed on January 8, 20 I 0) and in
the contemporaneously-filed Plaintiff's Motion for Summary Judgment (also filed on
January 8, 201 0). Filing a motion for summary judgment seeking the recovery of usurious interest
is inconsistent with seeking an abatement to cure the usury violation, therefore, Plainti:ffhas waived
her right to abate this action by failing to timely request abatement. A summary judgment hearing
is considered to be a trial on the merits. By filing a request for abatement concurrently with a motion
for suminazy judgment and a evidence motion for summary judgment, Plaintiff has essentially
waited until the time of trial to seek abatement. Defendants have been prejudiced by this delay and
have been forced to respond to both motions for sununary judgment and to file a counter motion for
summary judgment. This is the type of polarization that a prompt request for abatement would
avoid. A summary judgment is considered a trial setting and waiting until the time of trial to request
abatement is not timely. Consequently, Plaintiff has, as a matter of law, waived any right to
abatement of this action under 305.006 of the Texas Finance Code.
6.0 Usury Renders the Notes Unenforceable as a Matter of Law.
6.1 A lender who requires as a condition to making a loan that a borrower assume a third
party's debt, as distinguished from a requirement that the borrower pay another of his own debts,
must include the amount of the third party's debt in the interest computation. Alamo Lumber Co.
v. Gold, 661 S.W.2d 926, 928 (fex. 1983). As noted above, Brenda Lagow had no liability for
$1,000,000 note executed by her husband, Michael Lagow. When determining the interest charged
Brenda Lagow under the $300,000 note, the amount of principal and interest associated with the
$1,000,000 note and the $105,000 note must be included in the interest computation. In this case,
including the $1,000,000 note, the $105,000 note, and the post maturity interest charged by Plaintiff,
it is clear that Plaintiffhas charged Brenda Lagow more than twice the amount ofinterest authorized
by law.
6.2 Defendant moves that the court take judicial notice that the maximum amount of
interest that Plaintiff could charge under the note was 18% per annum. See, published rates of the
Texas Office of Consumer Credit Conunissioner.
6.3 A creditor who contracts for, charges, or receives interest that is greater than the
amount authorized by the Texas Finance Code is liable to the obligor for an ammmt that is equal to
the greater of: (1) three times the amount computed by subtracting 1he amount of interest allowed
by law from the total amount of interest contracted for, charged, or received; or (2) $2,000 or 20
percent of the amount of the principal, whichever is less. TEx. FJN. CODE ANN. 305.001. In
addition, a creditor who charges and receives interest that is greater than twice the amount authorized
by this subtitle is liable to the obligor for: (1) the principal amount on which the interest is charged
and received; and (2) the interest and all other amounts charged and received.
6. 4 Defendant Brenda Lagow is entitled to recover from Plaintiff three times the amount
of excess interest charged by Plaintiff($1,184,934.66 x 3 = $3,554,803.98). TEX. FIN. CoDE ANN.
305.00l(a)(l). Because the interest charged by Plaintiff is more than twice the lawfuJ rate, Brenda
Lagow is also entitled to recover the principal amount on which the interest is charged and received
($300,000), and the interest and all other amounts charged and received ($1,516.881.19).
6.5 In addition, a creditor who bas charged usurious interest is also liable to the obligor
for reasonable attorney's fees set by the court. True FIN. CODE ANN. 305.005.
6.6 Because the $1,300,000 note and the $105,000note were usurious, in addition to the
statutory penalties, the transactions are against public policy and unenforceable as a matter oflaw.
7.0 A Fact Issue Exists on the Issue of Attorneys' Fees.
7.1 Plaintiff is also seeking the recovery of attorneys' fees in this case, supported by the
Affidavit of Donovan Campbell, Jr.
7.2 Defendants object to the Affidavit of Donovan Campbell, Jr. on the ground that is is
vague and ambiguous and fails to segregate (other than in a conclusory fashion) the fees charged for
seeking recovery on the notes rather than defending the usury counterclaim. In addition, Defendants
object to the affidavit to the extent that it purports to rely on the hearsay business records of
Bredehoft & Associates.
7.3 Campbell's evidence of attorneys' fees is also controverted by the Affidavit ofRobert
FOR PARTIAL SUI\1MARY JUDGMENT- Page 14
H. Renneker. Therefore, a fact issues exists concerning the reasonableness and necessity of
Plaintiffs attorneys' fees in this case.
WHEREFORE, Defendants R. Michael Lagow and Brenda Lagow pray that the court
overrule Plaintiff's Motion for Partial Summary Judgment and Plaintiff's No-Evidence Motion for
Summary Judgment, that it grant Defendant Brenda S. Lagow's Motion for Partial Summary
Judgment and award her damages for Plaintiffs usury violation in the amount of$5,3 71,685.17, and
that Defendants have such further relief to which they may be entitled.
Rob H. Reoneker
Texas Bar No. 16778800
1412 Main Street
Suite 210
Dallas, Texas 75202
(214) 742-7100
(214) 7 4 2 ~ 7 1 1 0 (telecopier)
E-Mail: renneker@verizon.net
AITORNEY FOR DEFENDANTS
A true and correct copy of the foregoing Defendants' Response to Plaintiff's Motion for
Partial Summary Judgment, together with the Affidavits ofR. Michael Lagow, Brenda Lagow, and
Robert H. Renneker, was served on the attorneys for the Plaintiff, Mr. Donovan Campbell, Jr., Rader
& Campbell, 2777 Sternmons Freeway, Suite 1125, Dallas, Texas 75207, and Mr. J. Patrick
Bredeho.ft, Bredehoft & Associates, 2777 Stemmons Freeway, Suite I 125, Dallas, Texas 7 07, by
hand delivery on this the 28th day of January, 2010
DEFENDANTS' RESPONSE TO PLAINTIFF'S. MOTION
her Agent and Attorney-in-Fact, Jolm L.
Roach,
Plaintiff,
vs.
S. LAGOW,
NO. 08-11922-F
Defendants.

I 16TH JUDICIAL DISTRICT
AFFIDAVIT OF R. MICHAEL LAGOW
STATE OF TEXAS

COUNTY OF DALLAS
BEFORE ME, the undersigned authority, on this day personally appeared R. Michael Lagow
who, being duly sworn deposes and says:
1. My name is R. Michael Lagow. I am one of the Defendants in the above-styled and
numbered cause. I am over twenty-one years of age and am of sound mind and fully competent to
make this affidavit, the facts of which are within my personal knowledge and are tn\e and correct.
2. I am married to Brenda S. Lagow, the other defendant in this action.
3. In 2002, Nancy Hamon offered to advance me money for use in my business. At her
request, I submitted a business plan for her and John L. Roach to review. Between June 12, 2002
and Apri115, 2004, Nancy Hamon advanced the sum of$1,000,000 to me. These advances are
evidenced by promissory notes that I signed on June 12, 2002 for $500,000 (representing the initial
advance); on December 1, 2003 (representing a renewal of the June 12,2002 note plus the advance
of an additional $250,000), and on April I 5, 2004 for $1,000,000 (representing a renewal of the
AFFIDAVIT OF R. MICHAEL LAGOW- Page I
December I, 2003 note plus the advance of an additional $250,000). I invested and used the funds
evidenced by the three notes in my business, Systems Group. Each of the notes was submitted to
me by Jolu1 L. Roach and I had no input in their terms and conditions.
4. Brenda Lagow was not involved in any of the transactions in which the $1,000,000
in funds was advanced to me. Other than providing accounting services through her separate
business, The Lagow Group, Brenda has never been involved in the operations of Systems Group,
has never served as an officer or director of Systems Group, and has never exercised any role in the
management of Systems Group. Within our marriage, Systems Group is, and always has been, my
sole responsibility.
5. On November 24, 2004 Nancy Hamon advanced another $300,000, this time to me
and my wife, Brenda Lagow. John L. Roach presented a note to me for us to sign. TI1is note was
dated November 24, 2004 in the original principal amount of $300,000.
6. Brenda Lagow and I were unable to repay the $1,000,000 note and the $300,000 note
when they matured. John L. Roach wrote me on August 22, 2006 that he and Ms. Hamon had
discussed the status of the two notes and could not continue with the notes in past due status.
Enclosed with his letter was a renewal note for $1,300,000. Mr. Roach stated in his letter: "I am
enclosing a form of renewal note dated August 24, 2006, which renews both ofthe existing notes."
Brenda and 1 signed the note as submitted by Mr. Roach without discussion and returned it to him.
A copy of Mr. Roach's letter enclosing the $1,300,000 note is attached to this affidavit as Exhibit
A.
7. Because I was unable to pay the interest that was outstanding on my debt to Ms.
Hamon, Mr. Roach prepared and submitted a separate note for $1 05,000. This note was for interest
on the $I ,000,000 note. A copy of Mr. Roach's letter dated October 13, 2006 transmitting the
AFFIDAVIT OF R. MICHAEL LAGOW- Page 2
$105,000 note is attached hereto as Exhibit B.
8. At the time Brenda and I executed the $1,300,000 note and the $105,000, we were
unable to repay t11e either the $1,000,000 note or the $3000,000 note, and were i11 no position to
negotiate the te1ms of renewal. The $1,300,000 note and the $105,000 note were presented to us as
a "take it or leave it" proposition.
9. To the best of my knowledge, Brenda Lagow never had any discussions or
negotiations with Nancy Hamon or John L. Roach conceming the four notes that I executed, the
$1,300,000 note, or the $105,000 note, or any of the funds that were advanced.
SUBSCRIBED AND SWORN TO BEFORE ME on 's the 28th day of January, 2010/;
JOSEPH L ROSENFIELD
Notary Public
STATE OF TEXAS
My Comm. Ellp.Apr.16. 2013
AFFIDAVIT OF R. MICHAEL LAGOW- Page 3
./'
y Commission Expires:
JOHN L. ROACH, INc.
A P:llol"ESSlONAL Co.aPO&&:ri ON
ATTO;Rzn;:YS KX LAW
4150 LINCOLN PLAZA
soo NOR"IH .Ax.uiD
DALLAS, TEXAS 75201
August 22, 2006
PERSONAL AND CONFIDENTIAL
Mr. R. Michael Lagow
C/0 Systems Group, Inc.
3102 Oak Lawn Avenue
Suite 700
Dallas, Texas 75219
Dear Michael :
Tll:tEl'liONE
(2!4) 92298:!0
TELECOPT
(2!4) 9:13-1.965
BMA.n.
jlr.itlc@oinnw.net
Mr s. Hamon and I have dis cussed the status of
your two notes payable to her. We cannot continue on the
books notes that have been past due for the periods these
notes have been owing. She has instructed me to have the
principal balances of the notes renewed, with the interest
now accrued paid to date.
The note in the sum of $1,000,000 is dated
April 15, 2004, and was due November 24, 2004. The
interest the n owing on such note was paid from the proceeds
of the s econd note. Mrs . Hamon has ins true ted me to
collect intere st only at the 6% rate owing prior to
maturity and not charge interest at the past due or
compounded rate s .
Thus, the interest owing on the $1, 000, 000 note
as of August 24, 2006, is $105,000 .
The note in the sum of $300,000 is dated
November 24, 2004, and was due March 31, 2005. The
interest calculated on such note as instructed is $31,500.
Exhibit A
Mr. R. Mi chael Lagow
August 22, 200 6 Page 2
I am enclosing a form of renewal note dated
August 24 , 2006, which renews both of the existing notes.
Please return to me the fully executed note
1
together with
a check t o bring the interest current to such date.
- - -----
JLR:ld
Enclosure
cc: Mrs. Nancy B. Hamon
Mr. R. Michael Lagow
c/o Systems Group, Inc.
3 1 02 Oal< Lawn A venue
Suite 700
Dallas, Texas 75219
Dear Michael:
JoHN RoA.c:s:. INc.
1>.. PRO:PE&stoN.u. Coli.Po&.UlON
ATTO.R.NEYS .&:X LAW
4150 L INCOI.ZI' PLAZA
500 No.:a-r:a: .AxAil.D
DALLAS, T EXAS 75201
October 13,2006
Tlll.EJ'BOifE
(214) 922
TS:Ll!COJ'Y
(214) 9Stl 196B
.EM..a..u.
jlr.inc@airllltil.nel
Inasmuch as the interest accrued on your two notes payable to Mrs.
Hamon is not being paid l am enclosing for execution by you and your wife a note
payable to Mrs. Hamon in the sum of $1 0?,000, the amoUnt of such interest, calculated as
I advised you. Please return the note to this office on its completion.
JLR/crh
_)f'e;;9y y urs, / --------
/ .... / ,' -----
(' .. -, ..... {/f?-1'.___-------
. . ... --;;! /1.

/ 1/
( /
_ _/
Enclosure
Exhibit B
NANCY B. HAMON, by and through -
Roach,
Plaintiff,
vs.
R MICHAEL LAGOW and BRENDA
S. LAGOW,
NO. 08-11922-F
Defendants.

IN 1HE DISTRICT COURT
I 16TH JUDICIAL DISTRICT
AFFIDAVIT OF BRENDA S. LAGOW
STATEOFTEXAS

COUNTY OF DALLAS
BEFORE ME, the undersigned authority, on this day personally appeared Brenda S. Lagow
who, being duly sworn deposes and says:
I. My name is Brenda S. Lagow. I am one of the Defendants in the above-styled and
numbered cause. I am over twenty-one years of age and am of sound mind and fully competent to
make this affidavit, the facts of which are within my personal knowledge and are true and correct.
2. I am married to R. Michael Lagow, the other defendant in this action.
3. During 2002 and through most of2003, Michael Lagow and I were married, but
separated and living apart.
4. At all times material hereto, I own and operate my own business, The Lagow Group,
and through that business provide accounting services to individual, families, sole proprietors, small
businesses. I have owned this business for over seventeen years. My husband is not involved in the
management, business decisions, or affairs of The Lagow Group, which is my sole responsibility.
AFFIDAVIT OF BRENDA S. LAGOW- Page 1
5. Likewise, Michael Lagow has his own business, Systems Group. Although Systems
Group is now a publicly traded company, it started out as a corporation in which he was the sole
shareholder. Other than providing accounting services (i.e., paying bills and generating reports) for
Systems Group, I am not nor have I ever been an officer or director of that company nor am I or have
I ever been involved in the management or control of Systems Group, all of which is handled solely
by Michael (in association with the officers and directors of the corporation).
6. I was not involved in any of the transactions related to or involving the June 12, 2002
note executed by Michael Lagow and payable to Nancy Hamon in the amount of $500,000, the
December 1, 2003 note executed by Michael Lagow and payable to Nancy Hamon in the amount of
$750,000.00, or the April IS, 2004 note executed by Michael Lagow and payable to Nancy Hamon
in the amount of $1,000,000. Based on my discussions with Michael, I learned that the funds
represented by those notes were invested by him in Systems Group.
7. I do not deny the execution of the November 24, 2004 note in the amount of
$300,000, although I had no discussions with either Nancy Hamon or John L. Roach concerning that
note.
8. Michael and I were unable to repay the $300,000 note when it matured. In August
2006 Michael asked me to sign a noted dated August 24, 2006 payable to Nancy Hamon in the
amount of $1,300,000. At no time in connection with the execution of that note (or the other note
dated August 24, 2006 in the amount of $1 05,000) did I have any conversations with either Nancy
Hamon nor John L. Roach concerning that or any prior indebtedness owed by Michael. I never told
either Nancy Hamon or John L. Roach that I was responsible for repayment of the $1,000,000 note
that had previously been signed by Michael or that Michael was authorized to act on my behalf in
borrowing any of the money evidenced by that note.
9. I have reviewed the Mfidavit of John L. Roach and the interest he has charged based
on the $1,300,000 note and the $105,000 note through August 31, 2009. Those charges are
summarized as follows:
"Principal" on the $1,3000,000 note dated August 24, 2006:
interest from January 1, 2007 through August 31, 2009:
"Principal" on the $105,000 note dated August 24, 2006:
interest through December 31,2006:
interest from January I, 2007 through August 31, 2009:
Total amo1.mt charged:
$ 1,300,000.00
27,567.12
353,532.94
$105,000.00
2,226.57
28.554.56
$ 1,816.881.19
10. Asstuning an annual rate of 18%, compounded annually, the interest that would
accrue on $300,000 from November 24, 2004 through August 31, 2009 is $331,946.53. Deducting
the $300,000 principal of the November 24,2004 note and the interest of$331,946.53 from the total
amount charged by John L. Roach leaves the smn of $1,184,934.66.
SUBSCRIBED AND SWORN TO BEFORE ME on this the 28th day of January, 2010.
JOSEPH L. ROSENFIELD
Notary Public
STATE OF TEXAS
My Contm. Exp. 2013 .
/ /
. .'/
My Commission
Roach,
Plaintiff,
vs.
S.LAGOW,
NO. 08-11922-F
Defendants.

116TH JUDICIAL DISTRJCT
AFFIDAVIT OF ROBERT H. RENNEKER
STATE OF TEXAS

COUNTY OF DALLAS
BEFORE .ME, the undersigned authority, on this day personally appeared Robert H.
Renneker, who being duly sworn by me on his oath deposed and said as follows:
1. My name is Robert H. Renneker. I am over the age of twenty-one years, duly
competent, and authorized to make this affidavit, the facts of which are within my personal
knowledge true and correct. I am the attorney of record for the Defendants in the above-styled cause.
2. Attached to this affidavit as Exhibit A is a copy of Defendant's First Amended
Response to Plaintiff's Request for Disclosure. I prepared this document and served it on Donovan
Campbell Jr. by fax on July 29,2009.
3. Attached to this affidavit as Exhibit B is a copy of Defendant's Second Amended
Response to Plaintiff's Request for Disclosure. I prepared this document and served it on Donovan
Campbell Jr. by fax on September 4, 2009.
4. I am an attorney practicing law in Dallas County, Texas. I am licensed to practice in
AFFIDAVIT OF ROBERT H. RENNEKER- Page 1
all courts of the State of Texas and have been admitted to practice and have practiced before the
federal district courts in the Northern, Eastern, Southern, and Western Districts of Texas, the Fifth
and Ninth Circuit Courts of Appeal, and the United States Supreme Court. I graduated from the
University ofTexas School ofLaw in 1978 and between 1978 and 1980 served as a briefing attorney
for the Hon. William J. Cornelius, Chief Justice of the Court of Civil Appeals for the Sixth Supreme
Judicial District of Texas.
3. Since November 1978 I have actively practiced law in the State of Texas and am
familiar with legal fees charged in Dallas County, Texas.
4. In arriving at the detennination of whether a fee is reasonable, an attorney must
consider the elements set out in Section 1.04(b)the Texas Disciplinary Rules of Professional
Conduct, including time and labor required to render the services on a client's behalf, the novelty
and difficulty of the questions presented, the skill requisite to perfonn the services properly; the
preclusion of other employment; the fee customarily charged in the locality for similar legal services;
the amount involved and the results obtained; the time limitations imposed by the client or the
circumstances; the nature and length of the professional relationship with the client; the experience,
reputation, and ability of the lawyer or lawyers performing the services; and whether the fee is fLXed
or contingent on results obtained or uncertainty of collection before the legal services have been
rendered.
5. I have reviewed the Affidavit of Donovan Campbell, Jr. with attached invoices for
his flrm and the firm ofBredehoft and Associates. Based on the invoices, it appears that counsel
have accrued fees and expenses in excess of$28,000.00 through the date of Plaintiff's Motion for
Summary Judgment.
6. I have represented the defendant in this case since the suit the date the answer was
filed. Although Plaintiff is seeking the recovery of principal and interest of $1,184,934.66, this is
still just a suit on two promissory notes. Plaintiffs counsel have conducted minimal discovery in
this case and filed one unsuccessful motion to compel discovery. Although this case has been
complicated by Brenda Lagow's counterclaim for usury, that counterclaim was not filed until
September 4, 2009. This case was continued shortly after that filing and other than presenting a
motion for partial summary judgment and a no-evidence motion for summary judgment, there has
been no apparent activity in this case by Plaintiff's counsel since July 2009. In my opinion, a legal
fee in excess of $28,000.00 for filing a petition and motion for summary judgment to enforce two
promissory notes is excessive. A reasonable fee, based on the activity in this case up to the filing
of Plaintiff's motions for summary judgment, is no more than $10,000.00.
4. Further, affiant sayeth not.
SUBSCRIBEDANDSWORNTOBEFOREME,theundersignedauthority,onthisthe28th
day of J anuruy, 2010, to certifY which witness my hand and of office.
JO!EPl-1 L. ROSENFIELD
Notary Public
STATE OF TEXAS
My comm. Exp. Apr. 16. 2013
her Agent and in-Fact> John L.
Roach,
Plaintiff,
VS.
R. WCHAEL LAGOW and BRENDA
S.LAGOW,
NO.
Defendants.

IN THE DISTRlCT COURT
116111 JUDICIAL DISTRlCT
DALLASCOUNTY,TEXAS
DEFENDANTS' FIRST AMENDED RESPONSE
TO PLAlNTIFF'S REQUEST FOR DISCLOSURE
TO: PlaintinffNancy Hamon, by and through her attorney of record, Mr. Donovan Campbell,
Jr., Rader & Campbell, 2777 Stemmons Freeway, Suite 1125, Dallas, Texas 75207
R. MICHAEL LAGOW and BRENDA S. LAGOW, make tllis their Defendants' Response
to Plaintiff's Request for Disclostue and would show the following:
1. The con'ect names of the parties to the lawsuit.
The names of the parties are coiTect1y stated.
2. The name, address, and telephone number of any potential parties.
Defendants are tmaware of any potential parties at this time.
3. The legal theories and, in general, the factua) bases of the responding party's daims
and defenses.
Defendants have denied generally the allegations raised in Plaintiffs lawsuit. Defendant
Brenda Lagow has also raised an affirmative defense that any notes that were executed by her were
without consideration because she was not personally liable on the original note executed by Michael
Lagow. By requiring Brenda Lagow to assume the obligation owed by her husband as lris separate
debt. Plaintiff has charged Brenda Lagow interest in excess of the amotmt allowed by law. As a
result, Plaintiff has forfeited the principal amount of the "loan'' to Brenda Lagow, forfeited the
interest charged, and is liable to Brenda Lagow for three times the amount of unlawful interest
charged, together with attmneys' fees.
DEFENDANTS' FIRST AMENDED RESPONSE.TO. .:
PLAINTIFF,S REQUEST FOR DISCLOSURE - Page 1
. ExhiblfA
4. The amount and any method of calculating economic damages.
Defendants are not seeldng economic damages at the present time.
5. The name, address, and telephone number of persons having lmowledge of relevant
facts, and a b1ief statement of each identified person's connection with the case.
Nancy Hamon
% Donovan Campbell, Jr.
Rader & Campbell
2777 Stenunons Freeway
Suite 1125
Dallas, Texas 75207
Ms. Hamon is the Plaintiff in this lawsuit.
John L. Roach
Rader & CampbeU
2777 Stemmons Freeway
Suite 1125
Dallas, Texas 75207
Ms. Roach purports to act as the attorney-in-fact for the Plaintiff in tbis lawsuit.
R. Michael Lagow
Brenda S. Lagow
6627 Velasco
Dallas, Texas 75214
(214) 828-0703
The Lagows are the Defendants in this lawsuit.
6. For any testifying expert:
(1) the expert's name, address, and telephone number;
(2) the subject matter on which the expert will testify;
(3) the general substance of the expert's mental impressions and opinions and a
brief summary of the basis for them, or if the expert is not retained by,
employed by, or otherwise subject to the control of the responding party,
documents reflecting such information;
(4) if the expert is retained by, employed by, or otherwise subject to the control of
the responding party:
D.EFENQ.t\Nf.S, : F I R ~ : r Al\1EMDED.RESP.QN.SE 1:.0
PLAINTIFF'S REQUEST FOR DISCLOSURE- Page 2
(A) all documents, tangible things, reports, models, or data compilations that
have been provided to, reviewed by, or prepared by or for the expert in
anticipation of the expert's testimony; and
(B) the expert's current resume and bibliography.
Robert H .. Renneker
The Adolphus Tower
1412 Main Street, Suite 210
Dallas, Texas 75202
(214) 742-7100
Robert H. Renueker is Defendants' counsel and may be called to render an opinion
concerning the reasonableness and necessity of attorney's fees incmred in tllis case. Renneket's
testimony, if any, will be based on the number of hours and services rendered on behalf of a party
and the factors generally considered in determining a reasonable fee, namely the elements set out in
Section 1.04(b)the Texas Disciplinary Rules of Professional Conduct, including time and labor
required to render the services a client's beha.l.f. the novelty and difficulty of the questions presented,
the skill requisite to perform the services properly; the preclusion of other employment; the fee
customarily charged in the locality foJ similar legal services; the amount involved and the results
obtained; the time limitations imposed by the client or the circumstances; the nature and length of
the professional relationship with the client; the experience, reputation, and ability of the lawyer or
lawyers perfonning the services; and whether the fee is fixed or contingent on results obtained or
unce1tainty of collection before the legal services have been rendered.
Robert H. Rennelrer is a 1978 graduate oftbe University of Texas School ofLaw. Between
1978 and 1980 he served as a briefing attorney for the Court of Civil Appeals for the Sixth Supreme
Judicial District of Texas. Renneker has been actively engaged in the practice of law in Dallas
County, Texas (and throughout the State of Texas) since 1980 and is rated "av'' by Martindale
Hubbell. Renneker is admitted to practice before all the courts in the State of Texas, the United
States District Courts for the Northem, Eastern, Southem, and Westem Districts of Texas, the Fifth
and Nn1th Circuit CoUrts of Appeals, and the United States Suprenie Court."
7. Any discoverable indemnity and insuring agreements.
None.
8. Any discoverable settlement agreements.
Norie.
9. Any discoverable witness statements.
None.
DEFENDANTS' FIRST .Al\1ENDED RESPONSE TO . ; ....
10. In a suit alleging physical or mental injury and damages from the occurrence that is the
subject of the case, all medical records and bills that are reasonably related to the
injuries or damages asserted or, in lieu thereof, an authorization permitting the
disclosure of such medical records and bills.
Not applicable.
11. In a suit alleging physical or mental injury and damages from the occurrence that is the
subject of the case, all medical records and bills obtained by the responding party by
virtue of an authorizntion furnished by the requesting party.
Not applicable.
12. The name, address, and telephone number of any person who may be designated as a
responsible third party.
Defendant is tmawm:e of any responsible third party at the present time.
1412 Main Street
Suite 210
Dallas, Texas 75202
(214) 742-7100
(214) 742-7110 (teiecopier)
E-Mail: rem1eker@verizou.net
ATTORNEY FOR DEFENDANTS
DEFENDANTS' Fm.ST.Al\1ENDED RESPONSE TO
A true and correct copy of the foregoing Defendants' First Amended Response to Plaintiffs
Request for Disclosure was served on the attorney for the Plaintiff, Mr. Donovan Campbell, Jr.,
Rader & Campbell,_2777 Stemmons Freeway, Suite ? Dallas, Texas 75207 b telecopy and
regular mail on this the 29th day of July, 2009.
DEFENDANTS' FIRST AMENDED RESPONSE TO
PLAINTIFF'S REQUEST FOR DISCLOSURE - Page 5
Roach,
Plaintiff,
VS.
R.NflCHAELLAGOWandBRENDA
S. LAGOW,
NO. 08-1 1922-F
Defendants.

116TH JUDICIAL DISTRICT
DEFENDANTS' SECOND AMENDED RESPONSE
TO PLAINTIFF'S REQUEST FOR DISCLOSURE
TO: PlaintiffNancy Hamon, by and through her attorney of record, Mr. Donovan Campbell, Jr.,
Rader & Campbell, 2777 Stemmons Freeway, Suite 1125, Dallas, Texas 75207
R MICHAEL LAGOW and BRENDA S. LAGOW, make this their Defendants' Response
to Plaintiff's Request for Disclosure and would show the following:
1. The correct names of the parties to the Jawsuit.
The names of the parties are correctly stated.
2. The name, address, and telephone number of any potential parties.
Defendants are unaware of any potential parties at this time.
3. The legal theories and, in genera), the factual bases of the responding party's claims
and defenses.
Defendants have denied generally the allegations raised in Plaintiff' s lawsuit Defendant
Brenda Lagow has also raised an affirmative defense that any notes that were executed by her were
without consideration because she was not personally liable on the original note executed by Michael
Lagow. By requiring Brenda Lagow to asswne the obligation owed by her husband as his separate
debt, Plaintiff has charged Brenda Lagow interest in excess of the amount allowed by law. As a
result, Plaintiff has forfeited the principal amount of the "loan" to Brenda Lagow, forfeited the
interest charged, and is liable to Brenda Lagow for three times the amount of unlawful interest
charged, together with attorneys, fees.
DEFENDANTS'. SECOND AMENDED RESPONSE TO
PLAINTIFF'S REQUEST FOR DISCLOSURE- Page 1 Exhibit a -
4. The amount and any method of calculating economic damages.
Brenda S. Lagow is seeking the recovery of$2,969 ,648 .1 0. The maximwn amollllt of interest
that Plaintiff could charge Defendant Brenda S. Lagow on the $300,000 note from April 15, 2004
throughAugust24, 2006 was no more than $110,118. By requiring Brenda S. Lagow to assume the
obligati<;>n evidenced by the April 15, 2004 note, Plaintiff contracted for and charged Brenda S.
Lagow $889,882.70 interest in excess of the maximum amoWlt allowed by law. Brenda S. Lagow
is entitled to recover from Plaintiff three times the amount of excess interest charged by Plaintiff.
Because Plaintiffhas charged more than twice the amount of) awful interest, Brenda S. Lagow is also
entitled to recover from Plaintiff the sum of$300,000, which is amount of principal of the November
24, 2004 note.
5. The name, address, and telepl10ne number of persons baving knowledge of relevant
facts, and a brief statement of each identified person's connection witb the case.
Nancy Hamon
%Donovan Campbell, Jr.
Rader & Campbell
2777 Stenunons Freeway
Suite 1125
Dallas, Texas 75207
Ms. Hamon is the Plaintiff in this lawsuit
John L. Roach
Rader & Campbell
2777 Stemmons Freeway
Suite 1125
Dallas, Texas 75207
Ms. Roach purports to act as the attorney-in-fact for the Plaintiff in this lawsuit
R. Michael Lagow
Brenda S. Lagow
6627 Velasco
Dallas, Texas 75214
(214) 828-0703
The Lagows are the Defendants in this lawsuit.
DEFENDANTS' SECOND AMENDED RESPONSE TO
PLAINTIFF,S REQUEST FOR DISCLOSURE - Page 2
6. For any testifying expert:
(1) the expert's name, address, and telephone number;
(2) the subject matter on which the expert will testify;
(3) the general substance of the expert)s mental impressions and opinions and a
brief summary of the basis for them, or if the expert is not retained by,
employed by, or otherwise subject to the control of the responding party,
documents reflecting such information;
(4) if the expert is retained by, employed by, or otbenvise subject to the control of
the responding party:
(A) a]) documents, tangible things, reports, models, or data compilations that
have been provided to, reviewed by, or prepared by or for the expert in
anticipation of the expert's testimony; and
(B) the expert's current resume and bibliography.
Robert H. Renneker
The Adolphus Tower
1412 Main Street, Suhe 210
Dallas, Texas 75202
(214) 742-7100
Robert H. Renneker is Defendants' counsel and may be cailed to render an opinion
concerning the reasonableness and necessity of attorney's fees incurred in this case. Renneker's
testimony, if any, will be based on the number of hours and services rendered on behalf of a party
and the facto IS generally considered in determining a reasonable fee, namely the elements set out in
Section 1.04(b)tbe Texas Disciplinary Rules of Professional Conduct, including time and labor
required to render the services a client's behalf, the novelty and difficulty of the questions presented,
the skill requisite to perform the services properly; the preclusion of other employment; the fee
customarily charged in the locality for similar legal services; the amount involved and the results
obtained; the time limitations imposed by the client or the circumstances; the nature and length of
the professional relationship with the client; the experience, reputation, and ability of the lawyer or
lawyers performing the services; and whether the fee is fixed or contingent on results obtained or
uncertainty of collection before the legal services have been rendered.
Robert H. Renneker is a 1978 graduate of the University of Texas School of Law. Between
1 978 and 1980 he served as a briefing attorney for the Court of Civil Appeals for the Sixth Supreme
Judicial District of Texas. Renneker has been actively engaged in the practice of law in Dallas
County, Texas (and throughout the State of Texas) since 1980 and is rated "av" by Martindale
Hubbell Renneker is admitted to practice before all the courts in the State of Texas, the United
States District Courts for the Northern, Eastern, Southern, and Western Districts ofTexas, the Fifth
and Ninth Circuit Courts of Appeals, and the United States Supreme Court.
7. Any discoverable indemnity and insuring agreements.
None.
8. Any discoverable sett]ement agreemeots.
None.
9. Any discoverable witness statements.
None.
10. In a suit aUeging physical or mental injury and damages from the occurreD ce tba tis the
subject of the case, all medical records and bills that are reasonably related to the
injuries or damages asserted or, in lieu thereof, an authorization permitting the
disclosure of such medical records and bills.
Not applicable.
11. In asuitaJlegingphysical or mental injury and damages from the occurrence that is the
subject of the case, aiJ medical records and biJJs obtained by the responding party by
virtue of an authorization furnished by the requesting party.
Not applicable.
12. The name, address, and telephone number of any person who may be designated as a
third party.
Defendant is unaware of any responsible third party at the present time.
1412 Main Street
Suite 210
Dal1as, Texas 75202
(214) 742-7100
(214) 742-7110 (telecopier)
E-Mail: renneker@verizon.net
ATTORNEY FOR DEFENDANTS
PLAINTIFF,S REQUEST FOR DISCLOSURE- Page 4
A true and correct copy of the foregoing Defendants' Second Amended Response to
Plaintiffs Request for Disclosure was served on the attorneys for the Plaintiff, Mr. Donovan
Campbell, Jr., Rader & Campbell, 2777 Stemmons Freeway, Suite I 125, Dallas, Texas 75207, and
Mr. J. Patrick Bredehoft, & Associates, 2777 Stemmons Freeway, Suite 1125, Dallas,
Texas 75207by telecopy and regular mail on this the of
DEFENI>A,NT.S' SEC.OND.AMENl>ED RESPONSE TO
PLAINTIFF'S REQUEST FOR DISCLOSURE - Page 5

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