2nd Appellate District Court affirms no-evidence judgment in foreclosure suit

By Charmaine Little | Nov 21, 2018

FORT WORTH – On Nov. 1, the Court of Appeals for the 2nd Appellate District of Texas at Fort Worth affirmed in part and reversed in part a district court’s ruling in a home-equity loan lawsuit.

Chief Justice Bonnie Sudderth authored the opinion. Justices Lee Gabriel and Mark T. Pittman concurred.

"...We affirm the trial court’s no-evidence summary judgment as to the (Thomas and Judy) De La Garzas’ claims, reverse the traditional summary judgment as to BNYM’s counterclaims, and remand this case to the trial court for further proceedings not inconsistent with this opinion," Sudderth wrote.

Judy and Thomas De La Garza sued Bank of New York Mellon (BNYM) and other banks after they foreclosed on the couple’s home following a default on a loan. They alleged wrongful foreclosure, breach of contract and violations of the Texas Debt Collections Practices Act (TDCPA). 

Chief Justice Bonnie Sudderth  

BNYM filed its own counterclaim asking for a judgment for judicial foreclosure and a writ of possession. In their appeal, the De La Garzas said the trial court shouldn’t have granted the summary judgment since genuine issues of material facts are still unanswered in their claims as well as BNYM’s counterclaims.

The Appeals Court first looked at the no-evidence summary judgment claim. The banks alleged the trial court was right when it granted this order since the De La Garzas didn’t provide any evidence to for their breach of contract no-evidence. Instead, they only noted evidence that the banks included in their traditional motion for summary judgment. 

“The De La Garzas produced no evidence in response to the breach-of-contract no-evidence ground regarding whether they had performed or tendered performance of their obligations under the loan documents, and they did not direct the trial court to any of appellees’ exhibits as to this ground,” Sudderth wrote.

Sudderth also wrote the couple failed to provide evidence that the property was sold at foreclosure. The De La Garzas rather said that the property is still their permanent residential homestead. She added the couple didn’t even provide evidence that the banks violated the TDCPA, so the court affirmed the lower court’s ruling concerning the no-evidence summary judgment.

Concerning the traditional summary judgment from BNYM’s counterclaims, the De La Garzas said there is still conflicting evidence in this matter. They allege BNYM wasn’t authorized to foreclose on the home because the documents from BNYM’s rule 736 application and motion for summary judgment don’t prove the promissory note was assigned or transferred to the bank. BNYM argued a party can still foreclose even if it doesn’t serve as the note holder. 

“Although a nonjudicially foreclosing mortgagee need not demonstrate ownership of a note in order to defeat a mortgagor’s standing challenge and although BNYM may have established that it is the mortgage under chapter 51 for purposes of a nonjudicial foreclosure, this does not necessarily entitle BNYM to a rule 309 judgment for a judicial foreclosure,” Sudderth wrote.

Since BNYM requested a rule 309 judgment for judicial foreclosure instead of an order for a nonjudicial foreclosure and trustee’s sale via chapter 51 of the property regulation, the rules of chapter 51 that oversee nonjudicial foreclosures are irrelevant. Therefore, BNYM didn’t properly prove its argument, so the court agreed with the De La Garzas on this issue.

The court also subsequently determined the lower court erred when it OK'd BNYM’s ask for a judgment of writ of possession.

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