Legacy Bank v. Fab Tech Drilling Equipment, Inc.
Texas Court of Appeals
566 S.W.3d 922 (2018)
In 2011, Legacy Bank (creditor) loaned Canyon Drilling Company (debtor) money for a promissory note and security interest in Canyon’s assets, including its accounts receivable. The parties already had a lockbox agreement allowing Legacy to receive payments directly from Canyon customers. The note, security, and lockbox agreements all contained nonwaiver clauses that said Legacy could not waive its rights without a signed writing. In 2012, two trade creditors, Fab Tech Drilling Equipment, Inc. and Impulse Electric, Ltd. (creditors) obtained a $1.66 million default judgment against Canyon. In January 2013, the creditors filed garnishment proceedings against the Thompsons, who owed Canyon money. Legacy intervened, claiming a senior perfected interest in Canyon’s accounts receivable. The Thompsons interpleaded and deposited the disputed funds into the court registry. Meanwhile, Legacy loaned Canyon yet another $2 million and did not initiate foreclosure until April 2014. The jury found Legacy waived its security interest and awarded the disputed funds to the trade creditors. Legacy appealed.
Rule of Law
Holding and Reasoning (Bailey, C.J.)
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