Petition Denied; Affirmed in Part; Affirmed a s Modified in Part ; Reverse d in Part;

Remanded; and Opinion and Dissenting Opinion filed November 20 , 2012.

In The 

## Fourteenth Court of Appeals

NO. 14

- 10

- 01125

- CV

NATIONAL CITY BANK O F INDIANA AND HOME LOAN SERVICES , INC. Appellant s/Cross

- Appellees

V.

ALBERT ORTIZ , Appellee /Cross

- Appellant

On Appeal from the 164th District Court

Harris County, Texas Trial Court Cause No. 2006

- 61178

NO. 14

- 10

- 01262

- CV

IN RE ALBERT ORTIZ , Relator

O RIGINAL PROCEEDING WRI T OF MANDAMUS



### D I S S E N T I N G O P I N I O N I respectfully dissent.2 

### A PPEAL

The main issue in this case is whether there is more than one reasonable interpretation of two letters signed on behalf of National City Bank of Indiana (the “Bank”) by Home Loan Services, Inc. ( the “Servicer”)
, at the request of one of the Bank’s borrowers, Albert Ortiz. A careful review of the text of these letters shows only one reasonable interpretation: without receiving any consideration, the Bank expressly waived all of its rights ag ainst Ortiz under the promissory note dated March 15, 2004 (“Note”). Because of this unambiguous waiver, the Bank is not entitled to recover under the Note. Accordingly, this court should affirm the trial court’s partial take

- nothing summary judgment in favor of Ortiz on claim s arising from the Note. The majority errs by concluding that the letters are ambiguous. As explained below, there is nothing unclear or uncertain ab out the waiver language or its effect. Under a straightforward application of Te xas law, the l etters mean precisely what they
say. T hough the Bank and the Servicer (collectively, the “Bank Parties”) assert that they
did not intend to waive all the claims under the Note , the words they used could hardly be
clearer

. The Bank may have acted imprudently in renouncing its rights under the Note without obtaining its own release or waiver from Ortiz but imprudent acts have consequences under the law. The Bank stated that it “r eleases and waives

. . . all

. . . claims regarding any obligati ons or liabilities of [ Ortiz ] in connection with the above

referenced property, including the note and deed of trust associated with such property.” The legal consequence of this act is a renunciation of the Bank’s claims under the Note. This is the only reasonable interpretation of the language. Instead of holding the Bank to its unambiguous words, the majority finds an ambiguity where none exists and remands
this case for a new trial. Today’s decision is bad for borrowers and bad for lenders. By stret ching and straining to find that the unambiguous waiver language is ambiguous, the majority not only contravenes the directives of the Supreme Court of Texas but also creates bad precedent from this court that will make it more difficult for courts in this jurisdiction to3

find any waiver language unambiguous. An unambiguous waiver or release of claims serve s a crucial purpose in our
economy

. Waivers and r eleases are utilized to bring an immediate and final end to claims and related disputes. By giving and receiving unambiguous waivers or releases, parties can avoid the time, expense, and distraction of protracted litigation. The ambiguous/unambiguous distinction is significant. Unambiguous provisions can be enforced by summary judgment; ambiguous ones u sually cannot. In many cases, parties will not settle disputes if there is no reasonable expectation that courts will enforce a waiver of rights without putting them to the time, expense, and uncertainty of a
full

- blown trial. By refusing to hold the Ban k to its unambiguous waiver, the majority reaches the wrong result in this case and devalues all unambiguous waiver language. Because the waiver language at issue is commonly used to settle claims, today’s decision that this language is ambiguous will pro vide any party with waiver’s remorse an arguable means of avoiding summary judgment. This time it is the Bank trying to avoid its unambiguous waiver of claims against the borrower; next time, it may be a borrower who seeks to avoid the unambiguous waiver of lender

- liability claims against a bank. Unambiguous waivers and releases are valued precisely because of the expectation that courts will enforce them as written in response to a properly filed and presented
summary

- judgment motion. When courts fail t o do so, parties’ legitimate expectations are frustrated and the law becomes uncertain and unpredictable. Predictability is beneficial in the law because it enables parties to evaluate the strength of a proposed written waiver or release and the likely ou tcome should the enforceability of the waiver or release become an issue in court. Knowing how a court interprets standard waiver and release language is critical to the settlement decision. When parties can trust courts to enforce unambiguous waivers an d releases, they will engage in settlement transactions. Without that assurance, more often they will not

. The citizens of this state are best served by a jurisprudence that will foster predictability by holding parties to their written word. Today’s dec ision undermines the certainty and predictability in the legal interpretation of unambiguous language under Texas law. The majority has redefined4

unambiguous language in a way that tends to erode confidence that courts will honor unambiguous waivers and r eleases at the summary

- judgment stage. Simple issues previously resolved through summary judgment may have to be determined through trials to fix the meaning of documents that should be declared clear and unambiguous as a
matter of law. Borrowers who have been released from debt obligations face uncertainty because what they reasonably believed was an unambiguous renunciation of debt claims now holds only the hope of enforcement at the end of long and costly litigation. Lenders and other parties may end up paying twice for the same waiver or release just to avoid the time, expense, and uncertainty of full

- scale trials th ey already bargained to escape. Application of longstanding Texas law demonstrates that the waiver language at issue in this case is suscep tible to only one reasonable interpretation. For this reason, the Bank’s claims under the Note fail as a matter of law.
The trial court granted summary judgment as to the Bank Parties’ claims under the Note, concluding that these claims were waived or rele ased under section 3.604 of the Texas Business and Commerce Code.

T he trial court g rant ed partial summary judgment in Ortiz’s favor, ordering that
the Bank Parties take nothing on any claim arising from the Note. The trial court based this summary

-

judgm ent ruling upon its conclusion that the claims under the Note were
waived or released under section 3.604 of the Texas Business and Commerce Code. 1
This statute , entitled “Discharge by Cancellation or Renunciation,” provides in pertinent part as follows:
(a) A person entitled to enforce an instrument, with or without consideration, may discharge the obligation of a party to pay the instrument:
(1) by an intentional voluntary act, such as surrender of the instrument to the party, destruction, mutilation, o r cancellation of the instrument, cancellation or striking out of the party’s signature, or the addition of words to the instrument indicating discharge; or

1 Unless otherwise stated , all statutory citations in this opinion are to the Texas Business and Commerce Code.5

(2) by agreeing not to sue or otherwise renouncing rights against the party by a signed record.

Tex. Bus. & Comm. Code Ann. § 3.604(a). Discharge by written renunciation, the type of waiver addressed in section 3.604(a)(2), has a long pedigree stretching back many
years. See Hall v. Wichita State Bank & Trust Co ., 254 S.W. 1036, 1037

– 39 (Tex. Civ. App.

— Amarillo 1923, writ refused); Bagley v. Kerr , 112 P.2d 459, 464

– 66 (Or. 1941). It was imported into the law merchant from French law, and then the British Parliament adopted it into English law from the law merchant in the Bills of Exchange Act of 1 882.
See Hall , 254 S.W. at 1038. Though discharge by written renunciation was generally not adopted into American common law, the drafters of the American Uniform Negotiable Instruments Act incorporated it from English law into section 122 of that act, w hich was eventually enacted in all American states. See Hall , 254 S.W. at 1038

– 39; Bagley , 112
P.2d at 465

– 66. This provision was the basis for the part of the Uniform Commercial Code currently found in section 3.604(a). Despite having been the law of a ll American states for many years, there are not many cases addressing discharge by written
renunciation. See Hall , 254 S.W. at 1037

– 39; Shaffer v. Akron Products Co ., 109 N.E.2d 24, 26 (Ohio Ct. App. 1952); Bagley , 112 P.2d at 464

– 66. The parties have n ot cited and research has not revealed any case in which a court has construe d section 3.604(a)(2). But, there is ample Texas jurisprudence on the law of waiver; renunciation is a species of
waiver.
This court review s the trial court’s interpretation of a pplicable statutes de novo. See Johnson v. City of Fort Worth , 774 S.W.2d 653, 655

– 56 (Tex. 1989). In interpret ing
a statute, this court’s objective is to determine and give effect to the Legislature ’ s intent. See Nat’l Liab. & Fire Ins. Co. v. Allen , 15 S.W.3d 525, 527 (Tex. 2000). If possible,
this court must ascertain that intent from the language the Legislature used in the statute
and not look to extraneous matters for an intent the statute does not state. Id . If the meaning of the statutory langu age is unambiguous, the court is to adopt the interpretation supported by the plain meaning of the provision’s words. St . Luke’s Episcopal Hosp. v.6

Agbor , 952 S.W.2d 503, 505 (Tex. 1997). This court must yield to the plain sense of the words the Legislat ure chose. See id

. S ection 3.604(a)(2) is unambiguous. In this section the Legislature provides that a person entitled to enforce a negotiable instrument may unilaterally and without consideration discharge the obligation of a party to pay the instrume nt by agreeing in writing not to sue the party or by expressly renouncing or waiving the person’s rights against the party in a writing signed by the person. See Tex. Bus. & Comm. Code Ann. § 3.604(a). See also Hall , 254 S.W. at 1039 (stating that “‘a wri tten renunciation or discharge of a bill or note or of the liability of any party thereon is now good without consideration’”) (quoting W ILLISTON ON C ONTRACTS ); Shaffer , 109 N.E.2d at 26 (stating that “[b]y ‘renunciation’ is meant the gratuitous abandonmen t or giving up of a right; and
express waiver without consideration”). That is precisely what we have in this case.

The Bank unambiguously waived its rights under the Note by written renunciation, and the majority errs in concluding that the Letters are a mbiguous. An employee of the Servicer signed one letter on June 27, 2006 (“First Letter”), and a second letter on July 6, 2006 (“Second Letter”). The summary

- judgment evidence contains the First Letter and the Second Letter (collectively, the “Letters”), both of which are signed writings. The First Letter states, in pertinent part, as follows:

This Agreement shall confirm that Lender has completed and will file an Internal Revenue Service Form 1099

- A in connection with its foreclosure on the above

- refer enced property. As a result, it does not intend to and shall not file or pursue any lawsuit or other legal proceeding against Borrower for any deficiency or otherwise. Lender agrees to and does fully release Borrower from any and all obligations and liabi lity that Borrower may have or may have had to Lender, and Lender waives any and all demands and claims regarding any such obligation or liability. It is agreed that no further sums will be made or owed by Borrower, and no further sums will be demanded or litigated by Lender. Under the unambiguous language of the First Letter, the agent who signed this writing did not sign it on behalf of the Bank. Nonetheless, as discussed below, under the unambiguous language of the Second Letter the agent who signed t he Second Letter7

signed it on behalf of the Bank, and in the Second Letter, the Bank agreed to all of the terms of the First Letter. The majority concedes that, at a minimum, the Second Letter makes all the terms of the First Letter applicable to the Bank

. In the text of the First Letter, the Bank 2 stated that, as a result of its foreclosure on the real property that was the subject of the deed of trust (the “Property”), the Bank did not intend to and would not “file or pursue any lawsuit or other legal proceeding against [Ortiz] for any deficiency or otherwise .” 3 (emphasis added). The majority concludes that it is reasonable to construe this text as waiving only the Bank’s claim against Ortiz for the deficiency remaining after the foreclosure sale. Se e a nte at p. 20. But the words that follow “deficiency” cannot be treated as though they are invisible; the Bank stated that it would not file or pursue any lawsuit or legal proceeding against Ortiz “for any deficiency or otherwise.” This language is pla inly cast in the disjunctive and “or otherwise” plainly entails more than “any deficiency.” To give effect to the “or otherwise” language, one must interpret the Bank’s waiver to include its deficiency claim as well as all other claims against Ortiz regar ding the Note and the Property. The majority asserts that it is reasonable to construe this language as waiving only the Bank’s deficiency claim. But such a construction renders the words “or otherwise” meaningless; therefore, this
construction is unreas onable. See Gilbert Texas Construction, L.P. v. Underwriters at Lloyd’s London , 327 S.W.3d 118, 133 (Tex. 2010) (concluding contract interpretation was not reasonable because it would render part of the contract meaningless ); Am. Mfrs.
Mut. Ins. Co. v. Sc haefer , 124 S.W.3d 154, 1 60 (Tex. 2003) (rejecting a contract construction as unreasonable because it was inconsistent with language in the contract that was clearly disjunctive); Virginia Power Energy Marketing, Inc. v. Apache Corp. , 297 S.W.3d 397, 403 ( Tex. App.

— Houston [14th Dist.] 2009, pet. denied) (rejecting

2 For ease of reference, in discussing the First Letter, the “ Lender ” is referred to as the Bank, even though the Bank did not become bound by the terms of the First Let ter until an agent of the Bank signed the Second Letter.

3 According to the majority, in the First Letter the Bank “agreed that ‘as a result’ of the foreclosure, it would not pursue ‘further’ sums from Ortiz.” Ante at p. 20. This statement is not accura te.8

contract interpretation that would render part of the contract meaningless); Coastal Terminal Operators v. Essex Crane Rental Corp. , No. 14

- 02

- 00627

- CV, 2004 WL 1795355, at *6 (Tex. App.

— Houston [14th Dist.] Aug. 12, 2004, pet. denied) (concluding contract interpretation was not reasonable because it would render part of the contract meaningless) (mem. op .). A faithful interpretation under Texas law cannot render part of the document meaningless. Because the “as a result” phrase refers to the foreclosure sale, the majority
concludes that it is reasonable to construe this sentence as waiving only the Bank’s claim against Ortiz for the deficiency remaining after the foreclosure sale. See ante at p p

. 19

– 20. The majority finds ambiguity because of a perceived conflict between “broad and sweeping” language in the First Letter and other language in the letter referring to the
foreclosure sale. See id

. But the specific reference to the foreclosure sa le does not make
it reasonable to construe “ for any deficiency or otherwise ” to mean “ for any deficiency

. ” See Memorial Medical Center of East Texas v. Keszler , 943 S.W.2d 433, 434

– 35 (Tex. 1997) (interpreting two documents that constituted a single agree ment and concluding that, even though the release given by releasor in one part of the agreement was clearly narrower than the release given by releaser in another part of the agreement, the court court would still give effect as a matter of law to the una mbiguous, broader language); Sterling Equities, Inc. v. Chubb Custom Ins. Co. , 806 F. Supp. 2d 1004, 1007

– 1010 (S.D. Tex. 2011) (applying Texas law and holding that broad language of release unambiguously covered one of the insured’s properties, even thoug h that property was not specifically mentioned at all in the release and even though three other properties were specifically mentioned as being the subject of the release). The additional words the majority ignores add meaning, and it is not reasonable o r proper to disregard these
words in constru ing the First Letter. They are a key and integral part of the operative language.
In the next sentence of the First Letter, the Bank waives “ any and all demands and claims” regarding “ any and all obligations an d liability that [Ortiz] ma y have or may have9

had to [the Bank].” (emphasis added). Again, the majority concludes it is reasonable to

construe the text of the First Letter as waiving only Ortiz’s obligations and liability under
the then

- existing deficienc y claim. This construction makes the words “ or may have had” meaningless; therefore
, this construction is unreasonable. See Gilbert Texas Construction, L.P. , 327 S.W.3d at 133; Virginia Power Energy Marketing, Inc. , 297 S.W.3d at 403; Coastal Terminal Op erators , 2004 WL 1795355, at *6. The words “ or may have had” add meaning, and it is not reasonable or proper to ignore these words in construing the text of the First Letter. The majority relies upon the word “further” in the following sentence in the F irst
Letter: “ It is agreed that no further sums will be made or owed by Borrower, and no further sums will be demanded or litigated by Lender. ” This language follows a sentence in which the Bank waives any and all claims regarding Ortiz’s past or present obligations
and liabilit ies . In this context, the First Letter describes the Bank’s waiver as applying to all claims regarding all of Ortiz’s past or present obligations and liability, and then the letter states that no further obligations will accrue or be pursued by the Bank. Even presuming that this sentence is limited to claims regarding further obligations and liability, it is not reasonable to construe this sentence as limiting the waiver in the entire letter to such obligations and liability.

I n determining whether the First Letter is ambiguous, the majority relies upon the
summary

- judgment standard of review, drawing all inferences in favor of the Bank Parties because they were non

- movants. See ante at p. 20

. But, whether the First Letter
is ambiguous is a question of law that this court is supposed to determine de novo. See Bowden v. Phillips Petroleum Co. , 247 S.W.3d 690, 705 (Tex. 2008); Avenell v. Chrisman Properties, L.L.C. , No. 14

- 08

- 01180

- CV, 2010 WL 1379972, at *2 (Tex. App.

— Houston [ 14th Dist.] Apr. 8, 2010, no pet.) (mem. op.). Therefore, the majority does not apply the correct standard of review in reaching its result

. See Bowden , 247 S.W.3d at 705; Avenell , 2010 WL 1379972, at *2. An analysis under the proper standard yields the opposite result.10

The majority attaches significance to the fact that the First Letter contains a
reference to the IRS Form 1099

- A that the Bank planned to file regarding the June 6,
2006 foreclosure sale. The First Letter contains a confirmation that th e Bank has completed and will file such a form. But the filing of this form does not speak to whether the Bank waives any or all of its rights against Ortiz under the Note.
Under the unambiguous language of the First Letter, the Bank waived any and al l claims it had against Ortiz regarding any obligations or liabilities under the Note and renounced in a signed writing the Bank’s rights against Ortiz under the Note. See Tex.
Bus. & Comm. Code Ann. § 3.604(a); Thompson v. Kerr , No. 14

- 08

- 00978

- CV, 2010 WL 2361636, at *4 (Tex. App.

— Houston [14th Dist.] June 15, 2010, no pet.) (holding trial court properly granted summary judgment because, in a settlement agreement, plaintiffs unambiguously manifested an intent to waive their rights against the defendant) (mem. op.); Tran v. Compass Bank , No. 02

- 11

- 00189

- CV, 2012 WL 117859, at *1

– 2 (Tex. App.

— Fort Worth Jan. 12, 2012, no pet.) (holding that, under broad and unambiguous provision of guaranty agreement, guarantor waived as a matter of law statutory right to offset against a deficiency owed following foreclosure on deed

- of

- trust lien) (mem. op.); ASI Technologies, Inc. v. Johnson Equipment Co ., 75 S.W.3d 545, 547

– 49 (Tex. App.

— San Antonio 2002, pet. denied) (holding that, under unambiguous language of settleme nt agreement, party waived its statutory indemnity rights as a matter of law); Shaffer , 109 N.E.2d at 26 (stating that “all of the authorities agree that, where there is an express renunciation in writing of a claim evidenced by a note by the holder
thereo f, such instrument is discharged” and holding that writing signed by holder of note discharged the note by written renunciation); Bagley , 112 P.2d at 466 (holding that signed writing by holder of promissory note discharged the note by written renunciation)

. As a matter of law, under the plain language of the First Letter, the Bank waived and renounced all claims and demands against Ortiz based upon the Note. Hence , the

s ummary

- judgment evidence proved as a matter of law the Bank’s waiver of its rights
und er the Note based upon the First Letter.11

In pertinent part, the Second Letter contains the following language:
Thank you for providing a copy of the 1099

- A and executing the letter agreement I sent regarding the above

- referenced matter. It has come to my attention that National City Bank of Indiana was the current mortgagee and that First Franklin Financial Corporation was the original mortgagee. The letter agreement did not specifically reference National City Bank of Indiana. [ 4 ]

Out of an abundance of caution, I am requesting that you please confirm, by signing where indicated below, that all of the terms and conditions of the June 23, 2006, letter agreement also apply to [the Bank], as the Lender, and that [the Bank] also releases and waives any an d all actual and potential demands and claims regarding any obligations or liabilities of the Borrower, Albert Ortiz, in connection with the above

referenced property, including the note and deed of trust associated with such property. Under the unambiguou s text of the Second Letter, the Bank confirmed that all of the terms and conditions of the First Letter applied to the Bank. As discussed above, under these terms and conditions, the Bank unambiguously waived any and all claims it had against Ortiz regar ding any obligations or liabilities arising from the Note . Under the unambiguous conjunctive language of the Second Letter, the Bank also confirmed that it
release d and waive d any and all demands and claims regarding any obligations or
liabilities of Orti z, in connection with the P roperty, including the Note and the deed of

t rust secur ing payment of the Note ( the “Deed of Trust”)

. The majority concludes that it
is reasonable to construe the text of the Second Letter as only confirming that the Bank is
bou nd by the First Letter. See ante at p. 21. But such a construction renders the word “and” meaningless; so, this construction is unreasonable. See Gilbert Texas Construction, L.P. , 327 S.W.3d at 133; Am. Mfrs. Mut. Ins. Co. , 124 S.W.3d at 1 60; Virginia P ower Energy Marketing, Inc. , 297 S.W.3d at 403; Coastal Terminal Operators , 2004 WL 1795355, at *6. Under the only reasonable construction of the Second Letter, the Bank confirmed two things: “ that all of the terms and conditions of the [First Letter]

4 In the first letter, t he “Lender” was incorrectly identified as “First Franklin Financial Corporation/National City Home Loan Services, Inc.”12

als o apply to [the Bank], as the Lender, and that [the Bank] also releases and waives any and all actual and potential demands and claims regarding any obligations or liabilities of [ Ortiz ] , in connection with the [P roperty ] , including the [N ote ] and [Deed of T rust ]

. ” (emphasis added). By each of these confirmations, the Bank unambiguous ly agreed not to sue Ortiz regarding any obligations or liabilities under the Note and renounced in a signed writing all of the Bank’s rights against Ortiz under the Note. 5 S ee Tex. Bus. &
Comm. Code Ann. § 3.604(a); Thompson , 2010 WL 2361636, at *4; Tran , 2012 WL 117859, at *1

– 2; ASI Technologies, Inc. , 75 S.W.3d at 547

– 49; Shaffer , 109 N.E.2d at 26; Bagley , 112 P.2d at 466. The majority’s interpretation is not reasonable u nder Texas
law.
In support of its conclusion that it is reasonable to construe the Second Letter as only confirming that the Bank is bound by the First Letter , th e majority relies upon the words “out of an abundance of caution” and “confirm.” But these w ords do not make it
reasonable to interpret the Second Letter as confirming one matter a s opposed to two matters. Ortiz’s lawyer identified an issue at the beginning of the Second Letter

— the Servicer had signed the First Letter on behalf of the wrong lend er. Though addressing this mistake in the First Letter was clearly a purpose of the Second Letter, the existence
of this purpose does not mean that the Bank can not confirm two matters under the unambiguous language of the Second Letter. See Memorial Medi cal Center of East
Texas , 943 S.W.2d at 434

– 35 (construing two documents that constituted a single agreement and concluding that, even though the release given by releasor in one part of the agreement was clearly narrower than the release given by releaser in another part of the agreement, the court court would still give effect as a matter of law to the unambiguous, broader language); Sterling Equities, Inc. , 806 F. Supp. 2d at 1007

– 1010 (applying Texas law and holding that broad language of release unambi guously covered

5 Even presuming for the sake of argument that the First Letter is ambiguous as to whether the Bank waived all of its rights against Ortiz under the Note, this second confirmation still would constitute an unambiguous renunciation and waiver by the Bank in a signed writing of the Bank’s rights against Ortiz under the Note.13

one of the insured’s properties, even though that property was not specifically mentioned at all in the release and even though three other properties were specifically mentioned as being the subject of the release). As a matter of law, un der the plain language of the Second Letter, the Bank waived and renounced all claims and demands against Ortiz based upon the Note. 6 Therefore, the s ummary

- judgment evidence proved as a matter of law the Bank’s waiver of its rights under the Note based u pon the Second Letter. 7
The trial court did not err in concluding that, under section 3.604(a), in the Letter s , the Bank unambiguously waived its rights against Ortiz under the Note, without any
consideration. 8 See Tex. Bus. & Comm. Code Ann. § 3.604(a ); Thompson , 2010 WL 2361636, at *4; Tran , 2012 WL 117859, at *1

– 2; ASI Technologies, Inc. , 75 S.W.3d at
547

– 49; Shaffer , 109 N.E.2d at 26; Bagley , 112 P.2d at 466. Because the Bank expressly waived its rights against Ortiz under the Note in both the Firs t Letter and the Second Letter, the Bank Parties were not entitled to recover on the Note. There is only one reasonable interpretation of the Letters, and this court should
enforce these documents as written. See Helmerich & Payne Int’l Drilling Co. v. Swift Energy Co. , 180 S.W.3d 635, 646 (Tex. App.

— Houston [14th Dist.] 2005, no pet.). This court should not disregard key words in the Letters or question the wisdom of the Bank’s execution of them, nor should this court rewrite the provisions of the Lett ers under the guise of interpretation. See id

. Sometimes parties

— even sophisticated ones like banks

— sign unambiguous documents that they later regret having signed. When that happens,

6 The Bank Parties also argue that i ntent is a fact issue for the jury and not a proper subject of a summary judgment. But, this court has held that a court should find waiver whe n, as in this case, a party unequivocally manifests an intent to no longer assert its rights and that a trial co urt may grant summary judgment if such a waiver is proved by the language of an unambiguous writing. See Thompson , 2010 WL 2361636, at *4

. 7 The Bank Parties cite three cases that they assert support their position ; but these cases are not on point becaus e they all involve the alleged discharge of a negotiable instrument based upon conduct described in section 3.604(a)(1) rather than under section 3.604(a)(2).

8 The majority relies upon Burton v. National Bank of Commerce of Dallas

. See ante at p. 25 (rel ying upon Burton v. National Bank of Commerce of Dallas , 679 S.W.2d 115 (Tex. App

. — Dallas 1984, no writ). In this case, the waiver was based upon oral statements, not upon any writing, as in the case under review. See Burton , 679 S.W.2d at 116

– 18. See i d . The Burton case is not on point.14

the answer is not to make clear things cloudy or to strain to find fa ct issues that will spoil a summary judgment and thereby give the hope of a better outcome in a jury trial. It is this court’s duty to enforce clear waiver language as written. Doing so not only honors the parties’ intentions as expressed in unambiguous writings but, even more importantly, it strengthens crucial rule

- of

- law values that are so vital to the health of our system of justice. The Bank unequivocally waived its claims under the Note and it should be held to
its waiver. This court should affirm the trial court’s June 2010 partial summary judgment that the Bank Parties take nothing on any claim arising from the Note (the “Partial Summary Judgment”).
T he trial court did not err in impliedly granting the borrower ’s motion to disregard the jury’s fi nding in response to Question 6

. T he Bank Parties also argue that the trial court erred by impliedly granting Ortiz’s motion to disregard the jury’s finding in response to Question 6. In this finding the jury answered “no” to the following question, whic h was submitted without any accompanying instructions:

With respect to the Letter Agreements, did [the Servicer] or [the Bank] validly agree that Albert Ortiz would receive ownership and possession of the [Property] without obligation for further payments on the Note, and that [the Servicer] and [the Bank] would not pursue any claims, lawsuits and/or obligations that they could have asserted against Albert Ortiz?

A trial court may disregard a jury finding if it is unsupported by evidence or if the question is immaterial. See Spencer v. Eagle Star Ins. Co. of America , 876 S.W.2d 154, 157 (Tex. 1994). A question is immaterial when it should not have been submitted, when it calls for a finding beyond the province of the jury, such as a question of law, or wh en it was properly submitted but has been rendered immaterial by other findings. Id

. The trial court submitted Question 6 over Ortiz’s objection that this question does not track the wording of the Letters. Ortiz’s counsel pointed out that the Letters were signed after the foreclosure sale had occurred and before the trial court set it aside. Ortiz15

objected to the language in this question about Ortiz receiving ownership and possession of the Property because the Letters contain no such language. Orti z’s objections were valid. The Letters were signed within one month of the foreclosure sale and more than two years before the trial court granted summary judgment on Ortiz’s wrongful

foreclosure claim , set aside the trustee’s deed, and restored title in the Property to Ortiz. When the Letters were signed, the Bank held title to the Property, and the Letters do not mention any agreement that Ortiz would receive ownership and possession of the Property. The Letters address an express waiver of the Bank’s rights under the Note and Deed of Trust, but they do not purport to memorialize an agreement that Ortiz would receive ownership and possession. Neither Ortiz nor the Bank Parties asserted that the Letters were an agreement to convey ownership and possessi on of the Property to Ortiz. Title and right to possession of the Property were conveyed to Ortiz when the trial court ruled in his favor on his wrongful

- foreclosure claim, and the Bank Parties have not challenged this trial court ruling on appeal.

In addition, in Question 6, the trial court asked the jury to determine whether the Letters contain a “valid” agreement between Ortiz and the Bank or the Servicer. This question calls for a jury finding as to a question of law, which is beyond the province o f the jury. See Forest Oil Corp. v. McAllen , 268 S.W.3d 51, 55 n.9 (Tex. 2008) (noting
that the determination of an agreement’s validity is a legal question) ; J.M. Davidson, Inc.
v. Webster , 128 S.W.3d 223, 227 (Tex. 2003) (s ame ) ; In re Guggenheim Corpora te Funding, LLC , No. 14

- 12

- 00329

- CV,

— S.W.3d

— , — , 2012 WL 3939857, at *6 (Tex. App.

— Houston [14th Dist.] Sep. 11, 2012, orig. proceeding) (same). For this additional reason, the question was immaterial.
In sum, Question 6 was immaterial both because it s hould not have been submitted and because it calls for a legal determination, which is beyond the province of the jury. See Ulico Cas. Co. v. Allied Pilots Ass’n , 262 S.W.3d 773, 787 (Tex. 2008); National Plan Adm’rs v. National Health Ins. Co. , 235 S.W.3 d 695, 703

– 04 (Tex. 2007). Accordingly, the trial court did not err by impliedly granting Ortiz’s motion to disregard16

the jury’s finding in response to this question. See Ulico Cas. Co. , 262 S.W.3d at 787; National Plan Adm’rs , 235 S.W.3d at 703

– 04

.
T he trial court did not seek “to partially correct” an error in the Partial Summary Judgment by submitting Question 6 to the jury. According to the majority, after granting the Partial Summary Judgment based upon the conclusion that the Letters were unambigu ous, the trial court (1) realized it had erred in reaching this conclusion, (2) set aside the Partial Summary Judgment, (3) sought to “partially correct this error” by submitting Question 6 to the jury, and (4) changed its ruling yet again after trial by r einstating the Partial Summary Judgment in the final judgment. See ante at pp. 22

– 23. No oral or written rulings or actions of the trial court support such findings.

The record does not reflect that t he trial court set aside or vacated the Partial
Sum mary Judgment. Nor does the record reflect that the trial court determined it had erred in granting the Partial Summary Judgment and sought to “partially correct this error” by submitting Question 6 to the jury. Nor does the record show that the trial co urt reinstated its Partial Summary Judgment. T he unambiguous language of the Partial Summary Judgment and of t he trial court’s final judgment
, and a careful review of the
entire record , show that the trial court never set aside or modified the Partial Sum mary Judgment. Instead, the trial court incorporated the Partial Summary Judgment unchanged into the final judgment, without having ever set aside the Partial Summary Judgment.

The majority infers that the trial court took these purported actions based upon the majority’s conclusion that the trial court submitted the interpretation of the Letters to the jury in Question 6. See ante at pp. 22

– 23. The majority cites a case for the proposition that a trial court’s ruling that the interpretation of a cont ract should be submitted to the jury is an implicit holding that the contract is ambiguous. See id . (citing Bowden v. Phillips Petroleum Co. , 247 S.W.3d 690, 705 (Tex. 2008) ). But, notably, the trial court did not submit the interpretation of the Letters to the jury in Question 6. In that question, the trial court did not instruct the jury that it was the jury’s duty to interpret any part of17

the Letters. Nor did the trial court instruct the jury to decide the meaning of the Letters by determining the mu tual intent of Ortiz and the Bank Parties when the Letters were signed. Instead, the trial court asked the jury whether the parties validly entered into an agreement that no party asserted had been made and of which there was no evidence. 9 Unsurprisingly , the jury did not find that the parties had validly entered into this agreement. The trial court did not submit the interpretation of the Letters to the jury in Question 6. Therefore, the premise underlying the majority’s conclusion is fundamentally
flaw ed. The trial court did not set aside the Partial Summary Judgment, nor did the trial court try to “ partially correct” any alleged error in the Partial Summary Judgment by submitting Question 6 to the jury

. T h e trial court granted summary judgment based u pon a ground expressly stated in Ortiz’s summary

-

judgment motion. Under their first issue, the Bank Parties argue that, in response to the Bank Parties’ assertion that the Letters were not supported by consideration, the only issue properly raised by Ort iz was that the Letters did not require consideration because the Letters are waivers. The Bank Parties assert that the trial court erred by granting partial summary judgment in Ortiz’s favor based upon section 3.604, which the Bank Parties assert is a

gr ound not stated in Ortiz’s summary

- judgment motion. The Bank Parties are correct that Ortiz did not cite section 3.604 in his summary

judgment motion or response to the Bank Parties’ motion. Ortiz’s counsel first cited this
statute to the trial court dur ing oral argument on the summary

- judgment motion, and then addressed section 3.604 further in supplemental briefing to the trial court. This court cannot affirm a summary judgment on a ground not stated in the summary

- judgment
motion. See Stiles v. Resol ution Trust Corp. , 867 S.W.2d 24, 26 (Tex . 1993). But, in evaluating what g rounds were raised in a summary

- judgment motion, this court must

9 The majority states that, in response to Question 6, “ the jury found that in executing the Letter Agreements, the Bank Parties did not agree to release Ortiz from any further obligation to make payments on the Note if he received ownership and possession of the [ Property ]

. ” Ante at p. 23. This statement is inaccurate because this is not the finding that the jury was asked to make in Question 6.18

remember that summary

- judgment grounds may be stated concisely, without detail and argument. See Allen v. City of Baytown , No. 01

- 09

- 0 0914

- CV, 2011 WL 3820963, at *7 (Tex. App.

— Houston [1st Dist.] Aug. 25, 2011, no pet.) (holding that traditional
summary

- judgment ground may be raised in a footnote that concisely states the ground without any argument or citation to l egal authorities) (mem. op.); Coleman v. Revak , No.
01

- 07

- 00438

- CV, 2008 WL 2466276, at *2 (Tex. App.

— Houston [1st Dist.] June 19, 2008, no pet.) (stating that traditional summary

- judgment ground may be raised by merely identifying a theory of liability or defense) (mem. op.); Conquistador Petroleum,
Inc. v. Chatham , 899 S.W.2d 439, 441

– 42 (Tex. App.

— Eastland 1995, writ denied) (holding that the following sentence, which lacked any citation to legal authority, was sufficient to expressly state a summary

- jud gment ground: “ [defendant] moves for summary judgment against [plaintiff] on the affirmative defense of unenforceability pursuant to the Rule against Perpetuities.”). See also McConnell v. Southside Independent School District , 858 S.W.2d 337, 340 (Tex. 1 993) (stating in plurality opinion that summary

-

judgment grounds may be stated in the motion concisely, without detail or argument). Thus, as a threshold matter, this court must determine whether, in his summary

-

judgment motion, Ortiz expressly identified a ground that was the basis of the trial court’s partial summary judgment.
In the summary

-

judgment motion that was granted in part by the trial court in the Partial Summary Judgment , Ortiz asserted that he is entitled to judgment as a matter of
law as to the Bank Parties’ claims on the Note because, under the plain language of the Letters, the Bank Parties “expressly renounced any and all further rights to assert claims against Ortiz.” Courts analyzing a predecessor statute to section 3.604(a)(2) have

co ncluded that, if the holder of a promissory note signs a writing in which the holder expressly renounces any claim on the note, this action is sufficient to discharge the note.
See Hall , 254 S.W. at 1037

– 39; Shaffer , 109 N.E.2d at 26; Bagley , 112 P.2d at 464

– 66

. Under the unambiguous language of section 3.604(a), the Bank, without consideration, may discharge the obligation of Ortiz to pay the Note “by agreeing not to sue or19

otherwise renouncing rights against [Ortiz] by a signed record.” Tex. Bus. & Com m. Code Ann. § 3.604(a). In his motion, Ortiz also asserted that, in the Letters, the Bank Parties expressly waived all demands and claims regarding any obligations or liabilities
of Ortiz on the Note. I n his summary

- judgment motion, Ortiz expressly iden tified a defensive theory that the Bank Parties waived their claims based upon the Note by signing the Letters, writings in which the Bank Parties expressly renounced their rights against Ortiz on the Note. See Coleman , 2008 WL 2466276, at *2

. Significan tly, O rtiz did not limit this summary

- judgment ground to common

- law waiver. Though Ortiz stated this ground concisely and without argument or citation to section 3.604 , he sufficiently raised this ground in his motion. 10 See Allen , 2011 WL 3820963, at *7;
Coleman , 2008 WL 2466276, at *2; Conquistador Petroleum, Inc. , 899 S.W.2d at 441

– 42

. The majority’s narrow reading of the grounds stated in the motion elevates form over substance and ignores both the concept and the legal principles embodied in the moti on based upon the express waiver of rights by the Bank. I n granting partial summary judgment on this ground, the trial court did not grant summary judgment on a ground not expressly stated in Ortiz’s summary

- judgment motion.

Because all of the arguments asserted by the Bank Parties under their first issue
lack merit , this court should overrule this issue. The court correctly sustains the Bank Parties’ second issue and Ortiz’s second cross

- issue. Thus, this court should modify the trial court’s judgment (1) to delete any monetary recovery in favor of Ortiz and against
the Bank , and (2) to award actual damages to Ortiz and against the Servicer in the amount of $74,500 rather than in the amount of $10,000. A fter modif ying the trial court’s

10 When the Letters were signed, Ortiz’s suit to enjoin the foreclosure sa le was still pending, though the foreclosure sale already had occurred and Ortiz later dismissed this suit. There is no evidence that the Bank had filed any counterclaims in this suit when the Letters were signed. The majority asserts that, even though O rtiz asserted waiver as a summary

- judgment ground, “the parties were already in litigation with one another [when the Letters were signed]; thus, Ortiz was asking the trial court, in effect, to tre at the [Letters] as releases.” Ante at p. 16. None of the cases cited by the majority support its assertion that a party in litigation cannot waive or renounce its rights against another party in the litigation but must release its rights. And , this proposition is contrary to the unambiguous language of section 3.604 and Texas cases. See Tex. Bus. & Comm. Code Ann. § 3.604; ASI Technologies, Inc. , 75 S.W.3d at 547

– 49.20

judgment in this way , th is court should affirm the judgment.



### M ANDAMUS The Bank Parties assert judicial

- foreclosure claims against Ortiz. On June 14, 2010, the trial court rendered an interlocutory take

- nothing judgment against the Bank Parties on their claims arising from the Note secured by the deed

- of

- trust lien that provides the basis of the judicial

- foreclosure claims. The parties’ other claims proceeded to trial. After the jury’s verdict, but before the trial court signed a judgment, the Bank
Parties filed a not ice of lis pendens regarding the Property, based upon the judicial

foreclosure claims. Shortly thereafter, Ortiz filed a motion to expunge the notice of lis pendens under Texas Property Code section 12.0071, a statute enacted by the Texas Legislature in 2 009. See Act of May 21, 2009, 81st Leg., R.S., ch. 297, 2009 Tex. Gen. Laws 806, 806 (codified at Tex. Prop. Code Ann. § 12.0071 (West 2012)). On the same day that it signed the final judgment ordering that the Bank Parties take nothing on their judicial

- foreclosure claims, the trial court signed an order denying Ortiz’s motion to
expunge.

Ortiz then file d a petition for writ of mandamus in this court, asserting that the trial court abused its discretion by denying Ortiz’s motion to expunge and by impliedly finding that the Bank Parties established by a preponderance of the evidence the probable validity of their judicial

- foreclosure claims. This court requested a response from the Bank Parties, but , to date, they have not filed one.

A writ of mandamus generally will issue to correct a clear abuse of discretion when there is no adequate remedy at law. See Walker v. Packer , 827 S.W.2d 833, 839 (Tex. 1992) (orig. proceeding). But, if a trial court abuses its discretion by failing to
cancel or expunge a notice of lis pendens, mandamus relief is available without any need to show that there is no adequate remedy at law. 11 See Flores v. Haberman , 915 S.W.2d

11 Thus, the only issue in the mandamus proceeding is whether the trial court abused its discretion by denying Ortiz’s motion to expunge. See Flo res v. Haberman , 915 S.W.2d 477, 478 (Tex. 1995) (per curiam). The majority relies upon the harmless

- error rule applicable in civil appeals, but that rule applies21

477, 478 (Tex. 1995) (per curiam). A trial court clearly abuses its discretion if it reac hes a decision so arbitrary and unreasonable as to amount to a clear and prejudicial error of
law. See Walker , 827 S.W.2d at 839. With respect to the resolution of factual issues, this court may not substitute its judgment for that of the trial court, ev en if this court would have decided the issue differently. Id . at 839

- 40. Instead, this court may not overturn the trial court’s decision on factual issues unless th e trial court reasonably could have reached only the opposite decision. See id . at 840. With respect to the resolution of legal issues, however, the review is much less deferential. Id . The trial court has no discretion in determining what the law is or in applying the law to the facts. Id . Therefore, a clear failure by the trial court to an alyze or apply the law correctly constitutes an abuse of
discretion. Id

. Texas Property Code section 12.0071, entitled “Motion to Expunge Lis Pendens,” provides in pertinent part as follows:
(a) A party to an action in connection with which a notice of l is pendens has been filed may:
(1) apply to the court to expunge the notice; and
(2) file evidence, including declarations, with the motion to expunge the notice.
(b) The court may:
(1) permit evidence on the motion to be receive d in the form of oral testimony; and
(2) make any orders the court considers just to provide for discovery by a party affected by the motion.

only in civil appeals, not in mandamus proceedings. See Tex. R. App. 44.1 (a)(1) (stating that “[n]o judgment may be reversed on appeal on the ground that the trial court made an error of law unless the court of appeals concludes that the error complained of . . . .”) (emphasis added); London v. London , 342 S.W.3d 768, 776 (Tex. App.

— Houston [1 4th Dist.] 2011, no pet.).22

(c) The court shall order the notice of lis pendens expunged if the court determines that:
(1) t he pleading on which the notice is based does not contain a real property claim;

(2) the claimant fails to establish by a preponderance of the evidence the probable validity of the real property claim; or
(3) the person who filed the notice for record did not serve a copy of the notice on each party entitled to a copy under Section 12.007(d).

. . . (e) The court shall rule on the motion for expunction based on the affidavits and counteraffidavits on file and on any other proof the court allows. Tex. Prop. Code Ann. § 12.0071. Research reveals only one case in which the court interprets Property Code section 12.0071. See In re Cohen , 340 S.W.3d 889 (Tex. App.

— Houston [1st Dist.] 2011, orig. proceeding). T hat case , however, de als with subsection (c)(1) of the statute rather than subsection (c)(2), which is at issue in the mandamus petition before the court today

. See id

. The parties have not cited and research has not revealed any case in which a court has construed or applie d subsection (c)(2), and its interpretation appears to be an issue of first impression. Under its plain meaning, this subsection marks a substantial change in the legal standard by which parties can seek expunction of notices of lis pendens. See Tex. Prop

. Code Ann. § 12.0071(c). Before enactment of Property Code section 12.0071, a party seeking cancellation or expunction of a lis pendens notice had to show that the party filing the notice (the claimant) did not have pending claims that fell into one of t he categories of claims contained in Property Code section 12.007(a). See Tex. Prop. Code Ann. § 12.007(a) (West 2012). This inquiry focused on the nature of the claims asserted
and not on the merits or like lihood that the claims would be prosecuted succ essfully. See
id .; In re Collins , 172 S.3d 287, 293

– 94 (Tex. App.

— Fort Worth 2005, orig. proceeding). In enacting the new statute, the Legislature made a fundamental change by including language that requires consideration of the merits of the claim that forms the basis of the23

lis pendens. Under the plain meaning of Property Code section 12.0071, the trial court must grant a motion for expunction of a lis pendens notice if “ the claimant fails to establish by a preponderance of the evidence the probable validity of the real property claim.” Tex. Prop. Code Ann. § 12.0071(c)(2); In re Cohen , 340 S.W.3d at 892. The new statute allows for discovery and evidentiary hearings regarding the evidence necessary to meet the claimant’s burden of proof. See Tex. Pr op. Code Ann. § 12.0071(b).
The language of Property Code section 12.0071(c) is substantially similar to language in California statutes. Compare Tex. Prop. Code Ann. § 12.0071(c), with Cal. Civ. P. Code § 405.31 (West 2012) (stating that “the court sh all order the notice expunged if the court finds that the pleading on which the notice is based does not contain a real property claim”); id

. § 405.32 (West 2012) (stating that “ the court shall order that the notice be expunged if the court finds that the claimant has not established by a preponderance of the evidence the probable validity of the real property claim”). In the Texas statute, “probable validity” is not defined, but in the California statute,

“ ‘[ p ] robable validity, ’ with respect to a real pro perty claim, means that it is more likely than not that the claimant will obtain a judgment against the defendant on the claim.” Cal. Civ. P. Code § 405.3 (West 2012).
The majority acknowledges that, in responding to Ortiz’s motion to expunge
, the
Bank Parties had the burden of establishing by a preponderance of evidence the probable validity of their judicial

- foreclosure claims. See ante at p. 31. But, instead of reviewing
the Bank Parties’ response in the trial court to determine whether the trial c ourt abused its discretion in concluding that the Bank Parties satisfied this burden, the majority summarily concludes that the trial court did not abuse its discretion because this court is reversing the trial court’s judgment on appeal. See id . In doi ng so, the majority fails to follow a fundamental rule of appellate practice which requires this court to review the trial court’s ruling based upon the materials before the trial court when the trial court made the ruling at issue and not based upon other materials or upon events occurring after the trial court’s ruling. See In re Bristol

- Myers Squibb Co. , 975 S.W.2d 601, 60524

(Tex. 1998) (noting that courts determine whether to grant mandamus relief based upon
the record that was before the trial court wh en it made the ruling at issue); Axelson, Inc. v. McIlhany , 798 S.W.2d 550, 556 n.9 (Tex. 1990) (stating that, in determining whether the trial court abused its discretion such that mandamus should issue, appellate courts do
not consider evidence and subs equent events that were not before the trial court when it ruled); Univ. of Tex. v. Morris , 344 S.W.2d 426, 429 (Tex. 1961) (holding that appellate court, in determining correctness of a trial court ruling, does not consider events that occurred subsequent to the ruling unless they deprive the appellate court of jurisdiction); Stephens County v. J.N. McCammon, Inc. , 52 S.W.2d 53, 55 (Tex 1932) ( stating that

“ [w] hen an appellate court is called upon to revise the ruling of a trial court, it must do so
upon the record before that court when such ruling was made ”); Keck v. First City Nat. Bank of Houston , 731 S.W.2d 699, 700 (Tex. App.

— Houston [14th Dist.] 1987, no writ) (concluding that, in reviewing a trial court ruling, it is improper for an appellate court to consider pleadings, actions by the parties, or actions by other courts taking place after the trial court rendered the ruling at issue, unless the subsequent matters deprive the appellate court of jurisdiction ). Thus, in a mandamus proceeding such as t his, in which subsequent

matters ( such as this court’s opinion and judgment ) do not deprive this court of jurisdiction , this court’s review should focus on the state of affairs in the trial court at the time of the ruling. This court’s opinion and appel late judgment in the case under review occurred after the trial court’s denial of Ortiz’s motion to expunge and were not before the trial court when it ruled. Accordingly, this court’s opinion and judgment should not be considered in determining whether t he trial court abused its discretion by concluding that the Bank Parties established by a preponderance of evidence the probable validity of their judicial

- foreclosure claims. The majority incorrectly makes this determination based upon the outcome of the appeal rather than upon Ortiz’s motion to expunge and the Bank Parties’ response. In Property Code section 12.0071, the Legislature has provided that the trial court must grant a motion for expunction of a lis pendens notice if “ the claimant25

fails to est ablish by a preponderance of the evidence the probable validity of the real property claim.” Tex. Prop. Code Ann. § 12.0071(c)(2); In re Cohen , 340 S.W.3d at 892. The Legislature has not provided an exception to this rule if an intermediate court of
appea ls reverses the trial court’s take

- nothing judgment on the real property claim and
remands for a new trial. 

### C ONCLUSION
Words matter. Borrowers and lenders and other parties who seek to resolve
di sputes through waiver of claims want to use language th at a court will enforce as unambiguous without the time, expense, and uncertainty of trial. I f lenders are permitted

to avoid summary judgment and p ursue collection actions on unambiguously waived debt claims, waivers will hold little value for borrowers. Likewise, if courts applying the same interpretive principles do not grant summary judgment on unambiguous waivers of
lender

- liability claims, lenders will lose the ability to reliably settle those claims. The language the majority finds ambiguous today is garden

- variety waiver and
release language, the sort used every day to settle disputes. Today’s decision diminishes the chance for prompt enforcement of such unambiguous language through summary judgment, a development that will tend to lower the value and utility of the unambiguous
waiver and release in the public square. Instead of finding this waiver language ambiguous and sending the parties back to the trial court, this court should enforce the unambiguous language of the Letters as written. By re fusing to do so, the majority adds uncertainty and unpredictability to the law . T he better course would be to hold the Bank

to its unambiguous written word and thereby advance a jurisprudence that would foster a more predictable legal environment, reduce unnecessary litigation, and honor rule

- of

- law values that make our justice system strong.

/s/ Kem Thompson Frost Justice
Panel consists of Justices Frost, Brown, and Christopher. (Christoper, J., majority).