As chronicled in the sister blog 600Commerce (following business cases in the Dallas Court of Appeals), the issue of whether a guarantor can waive the “fair market value” offset right provided by the Texas Property Code — a problem that arises frequently after foreclosure sales — was hotly-litigated until the Texas Supreme Court settled the matter in Moyaedi v. Interstate 35/Chisam Road, L.P, 438 S.W.3d 1 (Tex. 2014), finding that the right was waivable.
The Fifth Circuit acknowledged and applied that holding in Hometown 2006-1 1925 Valley View, LLC v. Prime Income Asset Management LLC, finding that the waiver there was even clearer than in Moyaedi. In Moyaedi, the guarantor waived “every . . . defense”; here, the guarantor waived “any . . . offset, claim or defense,” and the guaranty also had a provision saying: “Guarantor WAIVES each and every right to which it may be entitled by virtue of any suretyship law, including any rights it may have pursuant to . . . Section
51.005 of the Texas Property Code.” No. 14-10182 (Dec. 11, 2014, unpublished).