No. 05-17-01484-CV

IN THE COURT OF APPEALS

FIFTH DISTRICT OF TEXAS AT DALLAS

PNC MORTGAGE, A DIVISION OF PNC BANK, N.A. SUCCESSOR TO 

NATIONALCITY BANK AND NATIONAL CITY MORTGAGE, A DIVISION 

OF NATIONAL CITY BANK OF INDIANA, 

Appellants,

v.

JOHN HOWARD AND AMY HOWARD, 

Appellees.

ON APPEAL FROM CAUSE NO. 199-01559-2010 

199TH JUDICIAL DISTRICT COURT COLLIN COUNTY, TEXAS 

APPELLANTS’ BRIEF

Mark D. Hopkins Robert D. Forster, II.

Texas State Bar No. 00793975 Texas State Bar No. 24048470

Shelley L. Hopkins Brian S. Engel

Texas State Bar No. 24036497 Texas State Bar No. 00789279

Hopkins Law, PLLC Barrett Daffin Frappier 

3809 Juniper Trace, Suite 101 Turner & Engel

Austin, Texas 78738 4004 Belt Line Rd.

(512) 600-4320 – Telephone Addison, Texas 75001

(512) 600-4326 – Facsimile (972) 386-5040 - Telephone

mark@hopkinslawtexas.com Robertfo@bdfgroup.com

shelley@hopkinslawtexas.com brianen@bdfgroup.com

ATTORNEYS FOR APPELLANTS 

 Oral Argument Requested

ACCEPTED

05-17-01484-cv

FIFTH COURT OF APPEALS

DALLAS, TEXAS

6/1/2018 4:50 PM

LISA MATZ

CLERK

 FILED IN 5th COURT OF APPEALS DALLAS, TEXAS 6/1/2018 4:50:08 PM LISA MATZ Clerk
ii

IDENTITY OF PARTIES AND COUNSEL

Pursuant to Texas Rule of Appellate Procedure 38.2(a)(1), Appellee certifies 

that the following is a complete list of all parties and counsel:

1. Appellants: PNC, Mortgage, a Division of PNC Bank, 

Successor to National City Bank and 

National City Mortgage, a Division of 

National City Bank of Indiana

Represented at trial by: Robert F. Maris

Texas State Bar No. 12986300

Maris & Lanier, P.C.

3710 Rawlins Street, Suite 1550

Dallas, Texas 75219

rmaris@marislanier.com 

Represented on Appeal by: Mark D. Hopkins 

Texas State Bar No. 00793975

Shelley L. Hopkins

Texas State Bar No. 24036497

Hopkins Law, PLLC

3809 Juniper Trace, Suite 101

Austin, Texas 78738

(512) 600-4320 – Telephone

(512) 600-4326 – Facsimile 

mark@hopkinslawtexas.com

shelley@hopkinslawtexas.com

and

BARRETT DAFFIN FRAPPIER

TURNER & ENGEL, LLP

Robert D. Forster, II

State Bar No.: 24048470

4004 Belt Line Rd., Suite 100

Addison, Texas 75001

972-340-7901 (Telephone)

972-341-0734 (Facsimile)
iii

Brian Scott Engel

State Bar No. 00789279

3809 Juniper Trace, Suite 205

Austin, Texas 78738

RobertFo@bdfgroup.com

BrianEn@bdfgroup.com

2. Appellees: John Howard and Amy Howard

Represented at trial 

and on appeal by: J. Neal Prevost 

Texas Bar No. 00788222

Prevost & Shaff

1518 Legacy Drive, Suite 260

Frisco, Texas 75034

(972) 239-6200 – Telephone

(972) 239-6205 – Facsimile

sdc@prevostandshaff.com

3. Trial Judge: Hon. Angela Tucker 

199th Judicial District Court

Collin County, Texas
iv

TABLE OF CONTENTS

APPELLANTS’ BRIEF .............................................................................................i

IDENTITY OF PARTIES AND COUNSEL............................................................ ii

TABLE OF CONTENTS .........................................................................................iv

INDEX OF AUTHORITIES....................................................................................vi

STATEMENT OF THE CASE .................................................................................1

STATEMENT REGARDING ORAL ARGUMENT ...............................................3

ISSUES PRESENTED..............................................................................................4

STATEMENT OF FACTS........................................................................................6

SUMMARY OF THE ARGUMENT......................................................................11

ARGUMENTS & AUTHORITIES.........................................................................15

I. ISSUE NO. 1..................................................................................................16

DID THE TRIAL COURT ERR IN FAILING TO FILE FINDINGS 

OF FACT AND CONCLUSIONS OF LAW AS REQUIRED BY 

TEXAS RULE OF CIVIL PROCEDURE 296 AND 297, AFTER 

BEING TIMELY REQUESTED TO DO SO UPON CONCLUSION 

OF THE BENCH TRIAL?

II. ISSUE NO. 2 ................................................................................................16

DID THE TRIAL COURT ERR IN GRANTING INTERLOCUTORY 

SUMMARY JUDGMENT IN FAVOR OF APPELLEES WHEN THE 

TRIAL COURT MISAPPLIED THE LAW TO THE UNDISPUTED 

SUMMARY JUDGMENT FACTS?

A. The Trial Court’s Determination that PNC lacked Authority 

 to Foreclose was in error....................................................................20

B. The Substitute Trustee was Properly Appointed................................25
v

C. Notice of a foreclosure is effective upon mailing and is not 

 contingent on receipt..........................................................................27

D. A Wrongful Foreclosure Claim requires a showing of Both 

 an irregularity with the Sale Process and an inadequate Sale 

 Price. ..................................................................................................31

III. ISSUE NO. 3 ...............................................................................................34

DID THE TRIAL COURT ERR BY FAILING TO GRANT 

JUDGMENT IN FAVOR OF APPELLANTS ON ITS CLAIM FOR 

EQUITABLE SUBROGATION DESPITE THE TOTALITY OF THE 

STIPULATED EVIDENCE ESTABLISHING APPELLANTS' 

RIGHT TO SUBROGATION?

IV. ISSUE NO. 4 ...............................................................................................41

DID THE TRIAL COURT ERR BY FAILING TO GRANT 

JUDGMENT IN FAVOR OF APPELLANTS ON ITS SUIT ON THE 

NOTE DESPITE THE TOTALITY OF THE STIPULATED 

EVIDENCE ESTABLISHING APPELLANTS' RIGHT TO 

COLLECT ON THE NOTE SEPARATE FROM ITS RIGHT TO 

ENFORCE ITS IN REM DEED OF TRUST LIEN?

CONCLUSION .......................................................................................................44

CERTIFICATE OF SERVICE................................................................................46

CERTIFICATE OF COMPLIANCE ......................................................................47
vi

INDEX OF AUTHORITIES

CASES PAGE(S)

Ad Villarai, LLC v. Chan Il Pak, 

519 S.W.3d 132 (Tex. 2017)................................................................................17

Adebo v. Litton Loan Servicing, L.P., 

2008 WL 2209703, at *4 (Tex. App.–Houston [1st Dist.] May 29, 2008, no pet.)

........................................................................................................................28, 29

Amberboy v. Societe de Banque Privee, 

831 S.W.2d 793, 801 (Tex. 1992)........................................................................43

Bank of Am. v. Babu, 

340 S.W.3d 917, 922 (Tex. App.--Dallas 2011 rev. denied).........................37, 38

Benchmark Bank v. Crowder, 

919 S.W.2d 657, 661 (Tex.1996)...................................................................35, 36

Bierwirth v. BAC Home Loans Servicing, L.P., 

2012 WL 3793190, (Tex. App. – Austin 2012) (pet. denied)..............................42

Brooks v. Hous. Auth. of El Paso, 

926 S.W.2d 316, 321 (Tex. App.—El Paso 1996)...............................................18

Brown v. Zimmerman, 

160 S.W.3d 695, 700 (Tex. App.—Dallas 2005, no pet.)..............................39, 40

Burnett v. Manufacturer’s Hanover Trust Co., 

593 S.W. 2d 755 (Tex. App. – Dallas, 1979).................................................25, 26

Calegon v. 2009 SWE, LLC, 

2009 WL 4288076 (Tex. App. – Houston [1st Dist.] 2017)..........................28, 29

Carroll v. PNC Bank, N.A., 

2014 WL 12530951 (N.D. Tex. 2014)...........................................................21, 24
vii

Charter Nat’l Bank – Houston v. Stevens, 

781 S.W.2d 368, 371 (Tex. App. – Houston [14th Dist.] 1989, writ denied).......31

Chase Home Fin., L.L.C. v. Cal W. Reconveyance Corp., 

309 S.W.3d 619, 629 (Tex. App.—Houston [14th Dist.] 2010, no pet.).............37

Cherne Indus., Inc. v. Magallanes, 

763 S.W.2d 768, 772 (Tex. 1989)..................................................................17, 18

CitiMortgage, Inc. v Roper, 

2013 WL 6465637 (Tex. Civ. App. – Austin 2013)............................................21

City of Houston v. Clear Creek Basin Authority, 

589 S.W.2d 671 (Tex. 1979) .........................................................................29, 30

City of Keller v. Wilson,

168 S.W.3d 802, 824 (Tex.2005).........................................................................20

Croteau v. CitiMortgage, Inc., 

2014 WL 119968 (E.D. Tex. 2014).....................................................................24

Downer v. Aquamarine Operators, Inc.,

701 S.W.2d 238, 241–42 (Tex.1985)...................................................................38

Ermisch v. HSBC Bank, N.A., 

2015 WL 12862878 (W.D. Tex. Feb. 9, 2015)....................................................23

Faires v. Cockerell, 

88 Tex. 428, 31 S. W. 190, 194, (Tex. Comm’n App. 1932, opinion adopted) ..38

Farrell v. Hunt, 

714 S.W.2d 298, 299 (Tex. 1986)........................................................................32

FDIC v. Morris, 

782 S.W.2d 521, 524 (Tex. App.-Dallas 1989, no writ)......................................18

First Nat'l Bank of Kerrville v. O'Dell, 

856 S.W.2d 410, 415 (Tex.1993).........................................................................38
viii

Frymire Eng'g Co. ex rel. Liberty Mut. Ins. Co. v. Jomar Int'l, Ltd., 

259 S.W.3d 140, 142 (Tex. 2008)............................................................14, 37, 38

Galbraith-Foxworth Lumber Co. v. Long, 

5 S.W.2d 162, 167 (Tex. Civ. App.—Dallas 1928).......................................38, 39

Givens v. Midland Company, et. al, 

393 S.W.3d 876 (Tex. Civ. App. – Dallas, 2012)................................................20

Graham Cent. Station, Inc. v. Peña, 

442 S.W.3d 261, 263 (Tex. 2014)........................................................................17

Grubbs v. Houston First Am. Sav. Ass'n, 

730 F.2d 236, 241 (5th Cir. 1984) .......................................................................30

Guillot v. Hix, 

838 S.W.2d 230, 232-33 (Tex. 1992) ..................................................................39

Holy Cross Church of God in Christ v. Wolf, 

44 S.W.3d 562, 566 (Tex. 2001)..........................................................................40

In re Harmon, 

444 B.R. 696, 711 (Bankr. S.D. Tex. 2011), on reconsideration,

2011 WL 1457236 (Bankr. S.D. Tex. Apr. 14, 2011) .........................................37

In re Rubarts, 

896 F.2d 107, 115 (5th Cir. 1990) .......................................................................36

In re Taddeo, 

685 F.2d 24, 29 (2d Cir. 1982).............................................................................30

Interfirst Bank Dallas, N.A. v. U.S. Fid. & Guar. Co., 

774 S.W.2d 391, 397 (Tex. App.-Dallas 1989, writ denied).........................37, 38

LaSalle Bank Nat. Ass'n v. White, 

246 S.W.3d 616, 619-20 (Tex. 2007) ............................................................35, 36

Lazarides v. Farris, 

367 S.W.3d 788, 799 (Tex. App.-Houston [14th Dist.] 2012, no pet.)................21
ix

Leonard v. Brazosport Bank of Texas, 

628 S.W. 2d 216, 220 (Tex. App—Houston [14th Dist.] 1982, 

writ ref’d n.r.e.)....................................................................................................37

Lewis v. Wells Fargo Bank, N.A., 

939 F.Supp.2d 634 (N.D. Tex. 2013) ............................................................21, 24

Liberty Mut. Fire Ins. v. Laca, 

243 S.W.3d 791, 794 (Tex. App. - El Paso, 2007) ..............................................17

Lusk v. Palmer, 

114 S.W.2d 677 (Tex. Civ. App. – Amarillo 1938, writ dism’d)........................40

Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding,

289 S.W. 3d 844, 848 (Tex. 2009).......................................................................20

Marban v. PNC Mortg., 

2013 WL 3356285, at *5 (N.D. Tex. 2013)........................................................24

Martins v. BAC Home Loans Servicing, L.P., 

722 F.3d 249, 255 (5th Cir.)..................................................................................22

Murray v. Cadle Co., 

257 S.W.3d 291, 299 (Tex. App.—Dallas 2008, pet. denied).................14, 37, 39

Nixon v. Mr. Prop. Mgmt. Co.,

690 S.W.2d 546, 548 (Tex.1985).........................................................................20

NSL Property Holdings, LLC v. Nationstar Mortgage, LLC, 

2017 WL 3526354 (Tex. App. – Fort Worth 2017).............................................33

Office of Pub. Util. Counsel v. Public Util. Comm'n., 

878 S.W.2d 598, 600 (Tex.1994).........................................................................21

Oury v. Saunders,

77 Tex. 278, 13 S.W. 1030, 1031 (Tex. 1890) ....................................................39

Providence Institution for Savings v. Sims, 

441 S.W. 2d 516, 520 (Tex. 1969).......................................................................37
x

Randall v. Jennings,

788 S.W.2d 931 (Tex. App. – Houston [14th Dist.] 1990).............................11, 18

Richardson v. Kent, 

47 S.W.2d 420, 425 (Tex. Civ. App. – Dallas 1932)...........................................32

Rourk v. Cameron Appraisal Dist., 

305 S.W.3d 231 (Tex. App. – Corpus Christi 2009) .....................................34, 41

Salazar v. BAC Home Loans Servicing, L.P., 

2012 WL 995296, at *4 (N.D. Tex. 2012)...........................................................24

Smart v. Tower Land & Inv. Co.,

597 S.W.2d 333, 338 (Tex. 1980)........................................................................39

Smith v. The Weber Co., Inc., 

110 S.W.3d 611 (Tex. App. – Dallas 2003)...................................................17, 18

Stanley v. CitiFinancial Mortg. Co., 

121 S.W.3d 811, 817 (Tex. App.—Beaumont 2003, pet. denied).......................29

Stephens v. LPP Mortg.,

316 S.W.3d 742, 747 (Tex. App.-Austin 2010, pet. denied) ...............................42

Swiley v. Hughes, 

488 S.W.2d 64, 67 (Tex. 1972)............................................................................30

Tenery v. Tenery, 

932 S.W.2d 30 (Tex. 1996)......................................................................11, 17, 18

Terra XXI, Ltd. v. Harmon, 

279 S.W.3d 781, 788 (Tex. App. – Amarillo 2007) ............................................32

Tex. Mun. Power Agency v. Pub. Util. Comm'n of Tex.,

253 S.W.3d 184, 192 (Tex. 2007)........................................................................20

Texas Commerce Bank Nat’l Ass’n v. Liberty Bank, 

540 S.W.2d 554, 557 (Tex. Civ. App.—Houston [14th Dist.] 1976, no writ).....36
xi

Townsend v. Barrett Daffin Frappier Turner & Engel, LLP, 

2013 WL 5874607 at *8 (Tex. App. – Beaumont 2013) ...............................31, 32

United States v. ITT Cont'l Baking Co., 

420 U.S. 223, 236–37, 95 S.Ct. 926, 43 L.Ed.2d 148 (1975)..............................30

Wasserberg v. Flooring Servs. of Texas, LLC, 

376 S.W.3d 202 (Tex. App. – Houston [1st Dist.] 2012, no pet.) ..................12, 24

Water Dynamics, LTD. v. HSBC Bank USA, Nat. Ass’n, 

509 Fed. Appx. 367 (5th Cir. 2013).....................................................................32

Wilmington Trust, N.A. v. Rob, 

2018 WL 2304600 (5th Cir. May 21, 2018) ........................................................33

WMC Mortg. Corp. v. Moss, 

2011 WL 2089777, at *7 (Tex. App. – Houston [1st Dist.] 2011, no pet.)..........29

STATUTES

11 U.S.C. 1322 (b)(5)..............................................................................................30

11 U.S.C. 1322(b)(3)...............................................................................................30

12 U.S.C. § 215a(e).................................................................................................23

Tex. Bus. & Comm. Code §1.201(b)(21)(A) ..........................................................43

Tex. Bus. & Comm. Code 3.104 .............................................................................42

Tex. Bus. Org. Code §10.008(2) .............................................................................23

Tex. Civ. Prac. & Rem. Code § 3.118.....................................................................42

Tex. Civ. Prac. & Rem. Code §16.035........................................................33, 39, 40

Tex. Prop. Code §51.002.................................................................13, 21, 27, 28, 29

Tex. Prop. Code § 51.002 (e) ......................................................................13, 28, 29

Tex. Prop. Code §51.0025.......................................................................................21

Tex. Prop. Code §51.0001(3)..................................................................................21

Tex. Prop. Code §51.0001 (4). ................................................................................21
xii

RULES

Tex. R. App. P. 44.1(a)(2);......................................................................................18

Tex. R. App. P. 44.4................................................................................................18

Tex. R. App. P. 9.4..................................................................................................47

Tex. R. App. P. 9.4(i)(1)..........................................................................................47

Tex. R. App. P. 9.4(i)(3)..........................................................................................47

Tex. R. Civ. P. 166a(c)............................................................................................20

Tex. R. Civ. P. 296 ..................................................................................4, 11, 16, 17

Tex. R. Civ. P. 297 ..................................................................................4, 11, 16, 17

Tex. R. Evid. 201(b)................................................................................................21
1

STATEMENT OF THE CASE

Appellants PNC, Mortgage, a Division of PNC Bank, Successor to National 

City Bank (“PNC” or “Successor Bank”) and National City Mortgage, a Division of 

National City Bank of Indiana (“National City” or “Predecessor Bank”) appeal the 

Trial Court’s grant of an interlocutory summary judgment in favor of John Howard 

and Amy Howard (collectively “Howards”). (CR 518-520). Following the grant of 

an interlocutory summary judgment, a nonjury trial was held that resulted in the 199th

Judicial District Court of Collin County, Texas (“Trial Court”) entering a Final 

Judgment in favor of the Howards. The judgment was entered by the Trial Court on 

October 11, 2017. (CR 900-903). Appellants also appeal the Trial Court’s Final 

Judgment. 

On October 26, 2017, Appellants requested that the Trial Court file Findings 

of Fact and Conclusions of Law with respect to the nonjury trial. (CR 906-907). 

After the Trial Court did not file its findings, on November 27, 2017, Appellants 

filed a Notice of Past Due Findings of Fact and Conclusions of Law. (CR 926-927). 

No findings were subsequently filed by the Trial Court.

Appellants filed a Motion for New Trial on November 10, 2017. (CR 911-

925). The Trial Court took no action on Appellants’ Motion for New Trial. 
2

Appellants filed a Notice of Appeal of both the Partial Summary Judgment and Final 

Judgment on December 27, 2017. (CR 928).
3

STATEMENT REGARDING ORAL ARGUMENT

Appellants PNC, Mortgage, a Division of PNC Bank, Successor to National 

City Bank and National City Mortgage, a Division of National City Bank of Indiana 

respectfully request that the Court grant oral argument in this Case. Oral argument 

would give the Court a more complete understanding of the facts presented in this 

appeal and may significantly aid the Court in deciding the issues presented. 
4

ISSUES PRESENTED

ISSUE NO. 1

DID THE TRIAL COURT ERR IN FAILING TO FILE FINDINGS OF 

FACT AND CONCLUSIONS OF LAW AS REQUIRED BY TEXAS RULE 

OF CIVIL PROCEDURE 296 AND 297 AFTER BEING TIMELY 

REQUESTED TO DO SO UPON THE CONCLUSION OF THE BENCH 

TRIAL?

ISSUE NO. 2 

DID THE TRIAL COURT ERR IN GRANTING INTERLOCUTORY 

SUMMARY JUDGMENT IN FAVOR OF APPELLEES WHEN THE 

TRIAL COURT MISAPPLIED THE LAW TO THE UNDIPSUTED 

SUMMARY JUDGMENT FACTS? 

ISSUE NO. 3

DID THE TRIAL COURT ERR BY FAILING TO GRANT JUDMGENT IN 

FAVOR OF APPELLANTS ON ITS CLAIM FOR EQUITABLE 

SUBROGATION DESPITE THE TOTALITY OF THE STIPULATED 

EVIDENCE ESTABLISHING APPELLANTS' RIGHT TO 

SUBROGATION? 
5

ISSUE NO. 4

DID THE TRIAL COURT ERR BY FAILING TO GRANT JUDMGENT IN 

FAVOR OF APPELLANTS ON ITS SUIT ON THE NOTE DESPITE THE 

TOTALITY OF THE STIPULATED EVIDENCE ESTABLISHING 

APPELLANTS' RIGHT TO COLLECT ON THE NOTE SEPARATE FROM 

ITS RIGHT TO ENFORCE ITS IN REM DEED OF TRUST LIEN? 
6

STATEMENT OF FACTS

This is a home foreclosure matter involving real property commonly known 

as 5783 Versailles Avenue, Frisco, Texas 75034 (“Property”). On March 24, 2005, 

John and Amy Howard (“Howards” or “Appellees”), borrowed $894,900.00 to 

refinance the Property. In connection with the refinance1, the Howards executed a 

Promissory Note (CR 225-229 ) and a Deed of Trust that pledged the Property as 

collateral for repayment of the Note. (CR 202-224). The Howards ceased making 

payments on the Note on November 1, 2008 (CR 801). The Howards still reside in 

the Property despite not making payments on the Note in almost a decade. (CR 102). 

PNC has paid the real property taxes on the Property for all tax years since 2008.

The original lender of the Note and beneficiary under the Deed of Trust was 

National City. (CR 799). National City merged with and into several other lenders 

over the years, with the surviving entity being PNC Mortgage, a Division of PNC 

Bank, N.A. Successor to National City Bank (“PNC”). The merger history of the 

original lender into the surviving merged entity is both a matter of public record and 

stipulated fact between the parties.2 

 

1 The parties stipulated that $888,286.25 of the $894,000.00 refinance Note was utilized to pay off 

the original purchase money notes and liens. (CR 800). 

2 The merger history is as follows: 

a. National City Mortgage a Division of National City Bank of Indiana is the original 

lender;
7

As a result of the Howards inability or unwillingness to pay the Note, 

foreclosure proceedings were commenced by PNC in 2009. (CR 103-106). The 

Howards filed bankruptcy to delay the looming foreclosure, and within the 

bankruptcy proceedings the Howards judicially admitted that PNC was their 

mortgagee. (CR 580-582)(RR. Vol. 3, Defendant’s Exhibit 17, 20). During the 

bankruptcy, PNC sought relief from the automatic stay to pursue foreclosure. (RR 

Vol. 3, Defendant’s Exhibit 29.)3 The Howards judicially admitted that PNC is one 

of their secured creditors in connection with the Howards’ entry of an Agreed Order 

Conditioning the Automatic Stay. (RR Vol. 3, Defendant’s Exhibit 26.). 

To avoid immediate foreclosure, the Howards entered into a binding 

agreement with PNC to pay installments to cure their post-petition default and put 

the loan back on its regular installment track. (RR Vol. 3, Defendant’s Exhibit 26.) 

The agreement to forego immediate foreclosure and put the loan back on an 

installment basis is included in an Agree Order Conditioning Stay signed by the 

 

b. National City Mortgage Bank of Indiana elected to transfer the Note from a division of 

itself to a wholly owned subsidiary, the subsidiary being National City Mortgage Co. 

a subsidiary of National City Bank; (CR 606-610)(the endorsed Note).

c. National City Bank of Indiana (and all of its wholly owned subsidiaries) merged with 

and into National City Bank on July 22, 2006. (CR 748);

d. National City Bank merged with and into PNC Bank, N.A. on November 6, 2009. (CR 

748); and

e. At the time of the foreclosure sale the mortgagee (and mortgage servicer) was PNC 

Mortgage, a Division of PNC Bank, Successor to National City Bank (CR 109-110).

3 The bankruptcy court recognizing that “PNC Mortgage, a Division of PNC Bank, N.A. Successor 

to National City Bank its Assigns and/or Successors in Interest” is the secured creditor of the 

Howards. (RR. Vol. 3, Defendant’s Exhibit 26).
8

bankruptcy court on September 29, 2009. The Howards did not perform this 

agreement, but during the bankruptcy did pay through the trustee the sum of 

$1,012.50 to PNC on the mortgage. (RR Vol. 3, Defendant’s Exhibit 20). The 

bankruptcy was subsequently dismissed (RR Vol. 3, Defendant’s Exhibit 19). PNC 

accelerated the Note again. (RR Vol. 3, Defendant’s Exhibit 21). 

Contemporaneously with accelerating the Note on March 12, 2010, PNC (as the 

mortgagee and its own mortgage servicer) gave notice of a nonjudicial foreclosure 

sale to be held on April 6, 2010. Id. The Property was sold at the noticed foreclosure 

sale to PNC for $825,000.00. (RR Vol. 3, Defendant’s Exhibit 22). 

The Howards subsequently filed suit alleging that PNC wrongfully 

foreclosed. The Howards alleged, contrary to their bankruptcy judicial admissions,

that PNC did not have authority to act in selling the Property. (CR 22-28). The basis 

of the Howards' claim for wrongful foreclosure stems from PNC’s accidental use of 

its pre-merger name within its Notice of Acceleration4and the resulting Substitute 

Trustee’s Deed.

5

Id. The Howards further alleged that the foreclosure sale was 

 

4 Within the Notice of Acceleration sent on March 12, 2010, PNC correctly listed itself as its own 

mortgage servicer but used both its pre-merger and post-merger name in describing itself as the 

mortgagee (listing itself as National City Mortgage, a Division of National City Bank of Indiana 

*** PNC Mortgage, a Division of PNC Bank, N.A. Successor to National City Bank). (CR 109).

5 Within the Substitute Trustee’s Deed PNC correctly identifies itself as its own mortgage servicer 

but then uses its pre-merger name in describing itself as the mortgagee (listing itself as National 

City Mortgage, a Division of National City Bank of Indiana). (CR 113).
9

improper because Mr. Howard did not receive a notice of the foreclosure sale as 

required by statute.

The Howards moved for a partial summary judgment based upon the reasons 

described above. (CR 67-105). PNC filed a summary judgment response (CR 118-

131) and sur-reply (CR 142-148) asserting that the Howards are barred from 

attacking PNC’s standing to foreclose, and that the Howards have also misconstrued 

Texas law regarding when a notice of foreclosure sale is deemed to have been 

delivered. The Trial Court granted partial summary judgment in favor of the 

Howards setting aside the foreclosure sale as void. (CR 518-520). 

The remaining issues of PNC’s right to collect on the Note and PNC’s right 

to equitable subrogation were subsequently tried to the bench. The Parties stipulated 

at the bench trial that: (1) the Note is in default (CR 801), (2) the Proceeds from the 

Note were used to pay off two prior existing secured notes (CR 800), and (3) PNC 

paid the taxes on the Property for years 2008- 2016 (RR. Vol. 3, Exhibit 29). Upon 

the conclusion of bench trial, the Trial Court took the case under advisement. 

After trial, PNC discovered a piece of evidence (a proof of mailing of the 

Notice of Acceleration to Mr. Howard) that had previously been unable to be located. 

PNC therefore moved for the admission of the additional evidence (CR 818 – 894). 

The Trial Court denied the motion on September 18, 2017. (RR. Vol. 3, page 40, 

line 8). Thereafter the Trial Court signed a Final Judgment in favor of the Howards 
10

on October 11, 2017. (CR 900). PNC filed a Motion for New Trial (CR 911-925), 

on which the Trial Court took no action. 

PNC’s Notice of Appeal of the Partial Summary Judgment and the Final 

Judgment was filed on December 27, 2017. (CR 928-929).
11

SUMMARY OF THE ARGUMENT

A. Failure of the Trial Court to file Findings of Fact is harmful error.

PNC timely requested the court issue findings of fact and conclusions of law 

pursuant to Tex. R. Civ. P. 296. Once the timely request was made, the Court was 

required by Tex. R. Civ. P. 297 to issue findings of fact and conclusions of law, yet 

the Trial Court failed to do so. If a trial court does not file findings of fact and 

conclusion of law, it is presumed harmful error unless the record shows the 

appellant suffered no harm. See, Tenery v. Tenery, 932 S.W.2d 30 (Tex. 1996). In 

a complicated case, such as this, when there are disputed facts or two or more 

grounds for recovery or defenses, the inference of harm cannot be overcome. See, 

Randall v. Jennings, 788 S.W.2d 931 (Tex. App. – Houston [14th Dist.] 1990).

B. The Trial Court misapplied the law in granting summary judgment.

In granting the Howards a partial summary judgment prior to trial, the Trial 

Court misapplied Texas foreclosure law in four distinct ways.

First, the Trial Court erred in determining that PNC did not possess the ability 

to foreclose its Deed of Trust lien interest. The merger history of National City (the 

predecessor lender) with and into PNC (the successor by merger lender) is a matter 

of public record and was also stipulated between the parties. No formal assignment 

of interest is necessary between merging entities. PNC (no matter how it 

misidentified itself by using its “pre-merger name” within some of the foreclosure 
12

documents) had the authority to foreclose as it did. Texas law is clear; no assignment 

of a deed of trust between merging entities is ever necessary. Texas law provides 

that all rights of parties to a merger are allocated to and vested in the surviving entity 

without need of formal transfer of assignment. See Wasserberg v. Flooring Servs. 

of Texas, LLC, 376 S.W.3d 202 (Tex. App. – Houston [1st Dist.] 2012, no pet.).

Second, the Trial Court erred in invalidating the foreclosure sale based upon 

what it perceived to be a defective Appointment of Substitute Trustee. (CR 519). It 

is true that when a deed of trust provides for specific formalities in the appointment 

of a substitute trustee, then those formalities must be strictly followed. However, 

when a deed of trust specifies that no such formalities are necessary, then no formal 

Appointment of Substitute Trustee needs to be recorded in the local real property 

records. The Howard Deed of Trust provides that a substitute trustee may be 

appointed, “without the necessity of any formality other than a designation by 

Lender in writing.” (CR 214). PNC adequately designated Greg Bertrand as one of 

the substitute trustees within PNC’s notice of foreclosure sale (CR 108-112) wherein 

that notice listed Mr. Bertrand as a substitute trustee. Given the foregoing, even if 

PNC’s notice of appointment of substitute trustee (CR 107) was defective (because 

PNC used its pre-merger name within the recorded Notice), it is of no consequence 

given that that the recorded notice of appointment of substitute trustee was not even 

necessary to effectuate the valid appointment of Mr. Bertrand.
13

Third, the Trial Court erred in determining that the foreclosure sale was 

defective due to Mr. Howard not physically receiving a notice of foreclosure sale. 

Contrary to Mr. Howard’s summary judgment evidence that he did not receive the 

notice of foreclosure sale, Texas black letter law provides that a notice of foreclosure 

sale is deemed effective upon mailing and not upon physical receipt of the notice by 

the borrower. See, Tex. Prop. Code §51.002(e) The Trial Court misapplied 

§51.002(e) in drawing the incorrect legal conclusion that a notice of sale is improper 

based solely upon testimony that a borrower did not physically receive the notice of 

the sale. Actual receipt of the notice is not and never has been required under Tex. 

Prop. Code §51.002(e).

Fourth, even if there were irregularities with the foreclosure sale as alleged 

by Howard, the Trial Court still erred in determining that those irregularities 

invalidated the foreclosure sale. Texas black letter law is that in order to recover on 

a claim of wrongful foreclosure the borrower must show that an irregularity with the 

foreclosure sale resulted in a grossly inadequate sales price. The Howards failed to 

establish that the Property was sold at sale for an inadequate price. Texas law 

provides that any price at sale, that is greater than 50% of a property’s value, is a 

sufficient sales price as a matter of law. Here the Property sold at sale for 

$825,000.00, and at the time of sale the Property was valued at $917,575.00 by the 

Collin County Appraisal District. (RR. Vo1. 3, Defendant’s Exhibit 29).
14

C. PNC was entitled to Equitable Subrogation at a minimum. 

Even if summary judgment were properly granted in favor of the Howards 

(which PNC asserts was not), the Trial Court erred in determining, after the 

conclusion of the bench trial, that PNC was not entitled to equitable subrogation 

and/or the ability to collect on its Note. The stipulated facts provided that PNC was 

the holder of the Note and beneficary under the Deed of Trust (CR 799-802). The 

stipulated evidence furher provided that $888,286.25 in proceeds from the Note were 

used to extinguish two prior notes and deeds of trust encumbering the Property. (CR 

800). 

The doctrines of equitable subrogation and the ability to collect on a Note are

straightforward. Under the doctrine of equitable subrogation, a lender who advances 

funds to pay off a prior lien on property that secures the lender’s loan steps into the 

prior lienholder’s shoes with all the prior lienholder’s rights, remedies and securities. 

Murray v. Cadle Co., 257 S.W.3d 291, 299 (Tex. App.- Dallas 2008, pet. denied). 

Equitable subrogation applies “in every instance in which one person, not acting 

voluntarily, has paid a debt for which another is primarily liable and which in equity 

should have been discharged by the latter.” Frymire Eng'g Co. ex rel. Liberty Mut. 

Ins. Co. v. Jomar Int'l, Ltd., 259 S.W.3d 140, 142 (Tex. 2008). As for collection on 

the Note, the stipulated evidence was clear. The Howards made the Note, were in 
15

default under the terms of the Note, and PNC is the holder of the Note. As such 

PNC is entitled to collect on the Note. 

The trial record is absent of any evidence upon which the Trial Court could 

have concluded that equitable subrogation does not apply, or concluded that PNC 

does not possess the right to collect on its Note.

ARGUMENTS & AUTHORITIES

This appeal turns on whether PNC had standing to act when it did in 

foreclosing on the Property. Despite PNC’s error in misidentifying itself within the 

Notice of Acceleration, Notice of Sale and Appointment of Substitute Trustee, PNC 

possessed the authority to act because it was both the holder of the Note that is 

endorsed in blank, and also the beneficiary under the Deed of Trust, as the successor 

by merger to the original lender. The Howards also judicially admitted, within Ms. 

Howard’s bankruptcy proceeding, that PNC has been their mortgagee (RR Vol. 3, 

Defendant’s Exhibit 26) and payments were made to PNC within the bankruptcy 

(RR. Vol. 3, Defendant’s Exhibit 20).

The Trial Court erred in granting partial summary judgment in striking down 

PNC’s foreclosure sale. The Trial Court next erred when it determined at trial that 

PNC is not entitled to equitable subrogation, as well as not entitled to collect on its 
16

Note (separate and apart from its voided in rem foreclosure rights against the 

Property under the Deed of Trust).

I. ISSUE NO. 1

Did the Trial Court err in failing to file findings of fact and conclusions 

of law as required by Texas Rule of Civil Procedure 296 and 297, after 

being timely requested to do so upon conclusion of the bench trial?

The case proceeded to a bench trial after the Court granted a partial summary 

judgment. The issues left for determination at trial were: 

1) The enforceability of PNC’s Deed of Trust lien;

2) PNC’s right to collect on its Note separate and apart from its in rem right 

to foreclose its Deed of Trust lien against the Property; and

3) PNC’s right to equitable subrogation if its Deed of Trust lien were 

unenforceable.

The Trial Court granted Final Judgment in favor of the Howards on October 

11, 2017. (CR 900-903). The Final Judgment determined that PNC’s Deed of Trust 

lien interest was void and unenforceable, that PNC’s Note was not only 

uncollectable but was void and unenforceable, that PNC was not entitled to equitable 

subrogation, and that PNC owed the Howards attorney’s fees. (CR 900-903).

Texas Rule of Civil Procedure 296 provides that “In any case tried in the 

district or county court without a jury, any party may request the court to state in 

writing its findings of fact and conclusions of law.” Tex. R. Civ. P. 296. The rule 

further provides that the requesting party must file its request within twenty days 
17

after the court enters it judgment. Id. PNC timely complied with Rule 296 by filing 

its Request for Findings of Fact and Conclusions of Law fifteen days after judgment. 

(CR 906-907). After receiving no response from the Trial Court, PNC then complied 

with Texas Rule of Civil Procedure 297 in filing its Notice of Past Due Findings of 

Fact and Conclusions of Law within thirty days of PNC’s initial notice to the Trial 

Court. See, Tex. R. Civ. P. 297 and (CR 926-927). 

The Trial Court subsequently failed to file the requested findings. The trial 

court's duty to make such findings, in response to a timely request, is mandatory. 

Tex. R. Civ. P. 297; Liberty Mut. Fire Ins. v. Laca, 243 S.W.3d 791, 794 (Tex. App. 

- El Paso, 2007); see also Cherne Indus., Inc. v. Magallanes, 763 S.W.2d 768, 772 

(Tex.1989). As explained by the Texas Supreme Court, “[I]f a court fails to file 

findings when the facts are disputed, the burden of rebutting every presumed finding 

can be so burdensome that it effectively “prevent[s the appellant] from properly 

presenting its case to the court of appeals or this Court.” Ad Villarai, LLC v. Chan 

Il Pak, 519 S.W.3d 132 (Tex. 2017) relying on, Graham Cent. Station, Inc. v. Peña, 

442 S.W.3d 261, 263 (Tex. 2014); Tenery, 932 S.W.2d at 30 (Tex. 1996). As further 

provided by the Dallas Court of Appeals, 

The absence of written findings and conclusions would permit us to 

affirm the trial court's judgment on any legal theory supported by the 

evidence. To confront the scope of our permissible review, Smith 

would have to broaden his appeal to challenge all possible grounds 

supporting the judgment. Smith therefore suffers the same degree of 
18

harm because of the trial court's failure to make findings and 

conclusions as if the judge had made no oral pronouncements at all. 

FDIC v. Morris, 782 S.W.2d 521, 524 (Tex. App.-Dallas 1989, no writ); also see 

Smith v. The Weber Co., Inc., 110 S.W.3d 611 (Tex. App. – Dallas 2003).

If the trial court does not file findings of fact and conclusions of law, it is 

presumed harmful error unless the record affirmatively shows the appellant suffered 

no harm. Tenery v. Tenery, 932 S.W.2d 30 (Tex. 1996). However, “In a complicated 

case [such as this case] with disputed facts or two or more grounds for recovery or 

defenses, the inference of harm cannot be overcome.” Randall v. Jennings, 788 

S.W.2d 931 (Tex. App. – Houston [14th Dist.] 1990).

When the trial court's failure is harmful [as it is herein], the preferred remedy 

is for the appellate court to direct the trial court to file the missing findings. See 

Cherne Indus., Inc. v. Magallanes, 763 S.W.2d 768, 772 (Tex. 1989) (instructing 

court of appeals to direct trial court to correct its error by filing findings and 

conclusions). Texas Rule of Appellate Procedure 44.4 also requires an appellate 

court to direct a trial court to correct any correctable error that prevents “the proper 

presentation of a case to the court of appeals.” Tex. R. App. P. 44.4. If after being 

instructed to do so by the appellate court, a trial court still fails to file the findings, 

the appellate court must reverse the trial court's judgment and remand the case for a 

new trial. Tex. R. App. P. 44.1(a)(2); Brooks v. Hous. Auth. of El Paso, 926 S.W.2d 

316, 321 (Tex. App.—El Paso 1996).
19

As presented in Issue No. 2 below, PNC asserts that partial summary judgment 

was granted in error which requires the reversal of the Trial Court’s Final Judgment 

with a remand for a new trial. However, in the event the Court determines the 

summary judgment to have been properly granted, PNC respectfully requests that 

this Court instruct the Trial Court to file findings of fact and conclusions of law (as 

to the bench trial) so that PNC may better show this Court where reversible error 

exists within the trial record. 

II. ISSUE NO. 2

Did the Trial Court err in granting interlocutory summary judgment in 

favor of Appellees when the Trial Court misapplied the law to the 

undisputed summary judgment facts? 

The Trial Court committed reversal error in granting a partial summary 

judgment determining that PNC’s foreclosure sale was void for lack of authority by

PNC to appoint the substitute trustee and conduct the foreclosure sale. The Trial 

Court’s order re-vested title to the Property in the Howards. (CR 518-520). In 

granting Partial Summary Judgment the Trial Court misapplied Texas foreclosure 

law in four distinct ways: 

1) The Trial Court improperly determined that PNC lacked authority to act as 

it was the successor by merger to the original lender;

2) The Trial Court erred in determining that the Appointment of Substitute 

Trustee was defective and further erred in determining that the recorded 

Appointment was even necessary given the terms of the Deed of Trust;
20

3) The Trial Court erred in determining that Mr. Howard’s failure to 

physically receive a copy of the Notice of Foreclosure Sale invalidated the 

sale; and 

4) The Trial Court erred in determining that the alleged irregularities in the 

foreclosure sale process created an invalid sale when the Howards failed 

to establish causation that the irregularities resulted in an inadequate sale 

price. 

Standard of Review of Summary Judgment. An appellate court reviews a 

trial court’s ruling on a summary judgment motion de novo. See, Mann Frankfort 

Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W. 3d 844, 848 (Tex. 2009). As noted 

by the Dallas Court of Appeals regarding its review of summary judgment,

We review a trial court's decision to grant or deny a motion for 

summary judgment de novo. See Tex. Mun. Power Agency v. Pub. Util. 

Comm'n of Tex., 253 S.W.3d 184, 192 (Tex. 2007). The standard of 

review for traditional summary judgment is well established. See Nixon 

v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex.1985). The movant 

has the burden to demonstrate that no genuine issue of material fact 

exists and he is entitled to judgment as a matter of law. See Tex. R. Civ. 

P. 166a(c); Nixon, 690 S.W.2d at 548–49. We consider the evidence in 

the light most favorable to the nonmovant. See Nixon, 690 S.W.2d at 

549. Every reasonable inference must be indulged in favor of the 

nonmovant and any doubts resolved in his favor. City of Keller v. 

Wilson, 168 S.W.3d 802, 824 (Tex.2005).

Givens v. Midland Company, et. al, 393 S.W.3d 876 (Tex. Civ. App. – Dallas, 

2012).

A. The Trial Court’s Determination that PNC lacked Authority to 

Foreclose was in error.

It is undisputed that the original lender (National City Mortgage, a Division 

of National City Bank of Indiana) merged with and into PNC (PNC Mortgage, a 
21

Division of PNC Bank, Successor to National City Bank).6 The merger documents 

are publicly available7and Ms. Howard judicially admitted within her bankruptcy 

proceeding that PNC is the both the holder of the Note and beneficiary under the 

Deed of Trust since at least December 29, 2009. (CR 801)(RR. Vol. 3, Exhibit 26).

8

 

As the holder of the Note and/or beneficiary of the Deed of Trust, PNC is the 

Howards’ “mortgagee” as that term is defined by Texas Property Code 

§51.0001(3)&(4). PNC is also its own mortgage servicer, a servicer being permitted 

to assist with the administration of a foreclosure as provided by Texas Property Code 

§§51.002 and 51.0025. 

 

6 National City Bank of Indiana (along with all of its divisions and subsidiaries) merged with and 

into National City Bank on July 22, 2006. Thereafter, on November 6, 2009, National City Bank 

merged with and into PNC Bank, N.A. A court may judicially notice a fact that is not subject to 

reasonable dispute because it: (1) is generally known within the trial court’s jurisdiction; or (2) can 

be accurately and readily determined from sources whose accuracy cannot reasonably be 

questioned. Tex. R. Evid. 201(b). As provided by the Austin Court of Appeals in CitiMortgage, 

Inc. v Roper, the merger history of a mortgagee is capable of being judicially noticed and can be 

done so sua sponte, as well as for the first time on appeal. CitiMortgage, Inc. v Roper, 2013 WL 

6465637 (Tex. Civ. App. – Austin 2013); relying on, Office of Pub. Util. Counsel v. Public Util. 

Comm'n., 878 S.W.2d 598, 600 (Tex.1994); Lazarides v. Farris, 367 S.W.3d 788, 799 (Tex. App.-

Houston [14th Dist.] 2012, no pet.); also see Lewis v. Wells Fargo Bank, N.A., 939 F.Supp.2d 634 

(N.D. Tex. 2013). 

7 See, Office of the Comptroller of Currency Conditional Approval #928, November 2009, 

regarding the approval of the merger of PNC and National City. PNC’s merger history has also 

been the subject of past litigation and judicially noticed. See, Carroll v. PNC Bank, N.A., 2014 

WL 12530951 (N.D. Tex. 2014).

8 PNC even questions the need for recitation of the merger history given Ms. Howard’s judicial 

admission within her bankruptcy that at all relevant times to the foreclosure process PNC was in 

fact her mortgagee.
22

Despite PNC admittedly being the holder of the Note, beneficiary under the 

Deed of Trust, and its own mortgage servicer, the Howards still brought suit 

challenging PNC’s authority to foreclose9its Deed of Trust lien. 

After PNC undisputedly became the mortgagee, on March 12, 2010, PNC (as 

its own mortgage servicer) sent the Howards’ Notice of Acceleration and a Notice 

of Foreclosure sale. (CR 109-112). On April 6, 2010, the Property was sold at 

foreclosure sale. The Substitute Trustee’s Deed reflects that PNC was the mortgage 

servicer at the time of sale. (CR 113-114).10 

What apparently confused the Trial Court, at summary judgment, was the 

Howards' smoke and mirrors argument surrounding an errant Assignment (CR 100-

101) executed by National City Bank of Indiana assigning the Deed of Trust from 

one if its own divisions to one of its own wholly owned subsidiaries in 2008. The 

Howards argued that if National City Bank of Indiana had assigned away its interest, 

then it no longer possessed standing to appoint a substitute trustee (addressed in the 

section below) and also no longer possessed standing to foreclose. 

The Trial Court misapplied Texas law in holding, “National City Mortgage, a 

Division of National City Bank of Indiana was not a party to, and had no right, title, 

 

9 See Martins v. BAC Home Loans Servicing, L.P., 722 F.3d 249, 255 (5th Cir.)(summarizing Texas 

law granting mortgagee and mortgage servicer authority to foreclose).

10 PNC admittedly described itself improperly when it used its pre-merger name (National City 

Mortgage...) as the mortgagee listed in the substitute trustee’s deed.
23

or interest in the Note and Deed of Trust at issue in this case at the time of the 

appointment of the substitute trustee, at the time the home was posted for foreclosure 

on March 15, 2010, or at the time of the actual foreclosure sale on April 6, 2010.” 

(CR 518-520). The Trial Court failed to appreciate that National City Bank of 

Indiana, National City Bank and PNC were all merged with and into each other; and

that successors by merger do not need any special assignment to memorialize a 

transfer of the Deed of Trust or Note. 

Texas statutory law specifically provides that upon the merger of entities, 

[A]ll rights, title, and interests to all real estate.... owned by each 

organization that is a party to the merger is allocated to and vested ... 

in one or more of the surviving or new organizations as provided in the 

plan of merger without: 

(A) reversion or impairment; 

(B) any further act or deed; or

(C) any transfer or assignment having occurred. 

Tex. Bus. Org. Code §10.008(2). Federal law governing the merger of national 

banks into national banks also provides that “[a]ll rights, franchises, and interests of 

the individual merging banks or banking associations in and to every type of 

property (real, personal and mixed) and choses in action shall be transferred to and 

vested in the receiving association by virtue of such merger without any deed or 

other transfer.” 12 U.S.C. §215a(e); also see Ermisch v. HSBC Bank, N.A., 2015 WL 

12862878 (W.D. Tex. Feb. 9, 2015). In addressing the above statutory law to PNC’s 

merger history litigated in a similar case to this matter, the United States District 
24

Court for the Western District of Texas held, “NCMC [National City] was merged 

into PNC. As the successor, PNC acquired the Note and Plaintiff’s indebtedness, 

and “stepped into the shoes” of NCMC.” Carroll v. PNC Bank, N.A., 2014 WL 

12530951 (W.D. Tex. 2014).

Both Texas state and federal courts have held that a successor by merger 

automatically acquires its predecessor status as the lender. See, Lewis v. Wells Fargo 

Bank, 939 F. Supp. 2d 634, 638 (N.D. Tex. 2013)(“By virtue of its successor status, 

[defendant] also has the status of Lender under the deed of trust”); Marban v. PNC 

Mortg., 2013 WL 3356285, at *5 (N.D. Tex. 2013)(holding that upon merger the 

surviving entity automatically acquired the predecessor’s status as Lender and 

mortgagee); Salazar v. BAC Home Loans Servicing, L.P., 2012 WL 995296, at *4 

(N.D. Tex. 2012)( holding that as the successor in interest to the original lender, the 

defendant became “the holder of the Note and Deed of Trust for the property at 

issue”); Wasserberg v. Flooring Servs. of Texas, L.L.C., 376 S.W.3d 202, 207 (Tex. 

App. – Houston [1st Dist.] 2012, no pet.)(holding that under Texas law, all rights of 

parties to merger are allocated to and vested in the surviving entity without need of

formal transfer or assignment); Croteau v. CitiMortgage, Inc., 2014 WL 119968 

(E.D. Tex. 2014)(holding no assignment necessary between merging entities to 

transfer Note and Deed of Trust).
25

The Trial court erred in determining that PNC (whether as the mortgagee or 

its own mortgagee servicer) lacked the ability to administer the foreclosure. The 

merger history is a public record and Ms. Howard has judicially admitted that PNC 

was her mortgagee at all relevant times when the Notice of Acceleration, Notice of 

Sale and the sale itself occurred. PNC asserts that the Partial Summary Judgment 

should be set aside and this case remanded for a trial on the merits.

B. The Substitute Trustee was Properly Appointed. 

As a result of mistake or accident on the part of National City / PNC, an 

Appointment of Substitute Trustee was filed in the Collin County Real Property 

Records in June of 2009. (CR 107). The Appointment was mistakenly filed by 

National City / PNC describing itself by its pre-merger name, that being “National 

City Mortgage, a Division of National City Bank of Indiana.” Given the error, the 

Howards’ presented the shallow headnote only argument that the pre-merger entity 

was without authority to appoint a substitute trustee when it did because the entity 

had already been merged out of existence. And, a trustee’s sale conducted by a 

trustee appointed without authority results in a void foreclosure sale. For the abovestated reason, the Trial Court granted Partial Summary Judgment in favor of the 

Howards voiding the April 2010 foreclosure sale. (CR 518-520). 

The Howards based their argument on this Court’s prior holding in Burnett v. 

Manufacturer’s Hanover Trust Co., citing the case for only the proposition that, 
26

Texas cases reveal that a foreclosure sale by a person not properly 

appointed as a substitute trustee according to the terms of the deed of 

trust is not merely an irregularity in the foreclosure proceedings. Rather 

such sales have been declared void because they are not conducted 

within the authority conferred by the deed of trust. 

Burnett v. Manufacturer’s Hanover Trust Co., 593 S.W. 2d 755 (Tex. App. – Dallas, 

1979). Unfortunately, the Howards’ headnote quotes reveal only half of this Court’s 

holding in Burnett. A studied reading of Burnett, reveals as Paul Harvey would say, 

the rest of the story. This Court went on to hold,

We hold that if the person purporting to act as substitute trustee has not 

been properly appointed in accordance with the deed of trust, he is not 

authorized to sell the property ... When the appointment of a substitute 

trustee is authorized by the terms of the deed of trust, the details set 

forth in the deed of trust must be strictly followed. 

Id. at 757 (emp. added).

The Trial Court was required, under Burnett, to review the Deed of Trust to 

determine what requirements (if any) were necessary to appoint a substitute trustee 

by the beneficiary, and then determine if those requirements were carried out. The 

Howard Deed of Trust plainly states that a substitute trustee may be appointed, 

“without the necessity of any formality other than a designation by Lender in 

writing.” (CR 96). As such, whether the recorded Appointment (CR 107) is in error 

is because the formal Appointment was not even necessary. 

All that was required for the proper appointment of a substitute trustee is that 

it be memorialized some way “in writing.” PNC adequately designated Greg 
27

Bertrand “in writing” as one of the substitute trustees within PNC’s Notice of 

Acceleration mailed to Ms. Howard. (CR 108-112).11 Given the foregoing, even if 

PNC’s Notice of Appointment of Substitute Trustee dated June 2009 (CR 107) was 

defective it is of no consequence given that PNC subsequently re-designated Greg 

Bertrand as the Substitute Trustee in writing within PNC’s March 12, 2010 Notice 

of Acceleration mailed to Ms. Howard. (CR 108-112). The Howards’ own summary 

judgment evidence disproved the very claim they sought to establish. (CR 108-112).

C. Notice of a foreclosure is effective upon mailing and is not 

contingent on receipt.

The Court erred in applying the wrong statutory standard regarding the “Notice 

Requirement” due a borrower prior to a foreclosure sale. Regarding a Notice of 

Substitute Trustee’s Sale, as controlled by §51.002 of the Texas Property Code, Notice 

is deemed sufficient upon the mailing of the Notice, not upon the receipt of the Notice. 

The sole factual evidence submitted by the Howards, on the issue in support of their 

summary judgment motion, was affidavit testimony of Mr. Howard stated, “I did not 

receive a notice of substitute trustee’s sale regarding the April 6, 2010 sale date...” 

(CR 77-78).

 

11 The Notice of Acceleration to Ms. Howard was sufficient to serve as the notice of acceleration 

to both Mr. and Mrs. Howard. The Deed of Trust specifically provides, “Any notice given to 

Borrower in connection with this Security Instrument shall be deemed to have been given to 

Borrower when mailed .... Notice to any one Borrower shall constitute notice to all Borrowers 

unless Applicable Law expressly requires otherwise. (CR 93).
28

Section 51.002 of the Texas Property Code specifically addresses how a 

notice of a substitute trustee sale is to be delivered. Section 51.002(e) states in 

relevant part:

(e) Service of a notice under this section by certified mail is 

complete when the notice is deposited in the United States 

mail, postage prepaid and addressed to the debtor at the 

debtor's last known address. The affidavit of a person 

knowledgeable of the facts to the effect that service was 

completed is prima facie evidence of service. Id.(emp. added).

Tex. Prop. Code §51.002. (emp. added).

In mirroring §51.002, the Deed of Trust contains language stating that: “If 

Lender invokes the power of sale, Lender or Trustee shall give notice of the time, 

place and terms of sale by posting and recording the notice at least 21 days prior to 

sale as provided by applicable law. Lender shall mail a copy of the notice of sale to 

Borrower in the manner prescribed by applicable law.” (CR 96). In this case the 

applicable law is the Texas Property Code referenced above, which clearly states 

that notice is “complete when the notice is deposited in the United States mail, 

postage prepaid and addressed to the debtor at the debtor’s last known address.” 

The Houston Court of Appeals (1st Dist.) has previously addressed this exact 

issue as to when service of a Notice of Foreclosure Sale is complete. In Calegon v. 

2009 SWE, LLC, the Houston Court held, 

Calegon next asserts that she did not receive the letter or notice at her 

home address. 2009 SWE correctly responds that “[t]he dispositive 

inquiry under section 51.002(e), however, it not receipt of notice, but, 
29

rather, service of notice.” Adebo v. Litton Loan Servicing, L.P., No. 01–

07–00708–CV, 2008 WL 2209703, at *4 (Tex. App.–Houston [1st 

Dist.] May 29, 2008, no pet.) (mem. op.) (citing TEX. PROP. CODE 

ANN. § 51.002(e)). Thus, Calegon's alleged non-receipt of the notice 

does not create a fact issue about whether 2009 SWE satisfied the 

notice requirements of Texas Property Code section 51.002.

Calegon v. 2009 SWE, LLC, 2009 WL 4288076 (Tex. App. – Houston [1st Dist.] 

2017) (emp. added); relying on §51.002(e); also see, WMC Mortg. Corp. v. Moss, 

2011 WL 2089777, at *7 (Tex. App. – Houston [1st Dist.] 2011, no pet.).

Moreover, John Howard’s testimony that he did not receive a notice 

constitutes no evidence as a matter of law that notice was not mailed. This exact 

question was before the Beaumont Court of Appeals in Stanley v. CitiFinancial 

Mortg. Co., 121 S.W.3d 811, 817 (Tex. App.—Beaumont 2003, pet. denied)

(holding an affidavit denying receipt “does not state facts pertaining to the statutory 

requirements, i.e., whether the debt holder's records contain the last-known address 

of the debtor, and whether such notice was deposited in the U.S. Mail, certified mail, 

return receipt requested"); Tex. Prop. Code § 51.002. 

In line with City of Houston v. Clear Creek Basin Authority, PNC responded 

to the Howards’ motion for summary judgment that the proof offered (failure to 

receive the notice) is legally insufficient to establish that notice was improperly 

given by PNC. As provided by the Texas Supreme Court in City of Houston, 

the movant must still establish his entitlement to a summary judgment 

on the issues expressly presented to the trial court by conclusively 

proving all essential elements of his cause of action or defense as a 
30

matter of law. See Swiley v. Hughes, 488 S.W.2d 64, 67 (Tex. 1972). 

Summary Judgments must stand on their own merits, and the nonmovant’s failure to answer or respond cannot supply by default the 

summary judgment proof necessary to establish the movant’s right.

City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671 (Tex. 1979). 

The Court’s error in applying the wrong standard in construing when Notice 

of Foreclosure Sale12 is effectively sent, was on a matter of extreme relevance in 

determining if the foreclosure sale was properly conducted. The Court’s erroneous 

application of the law resulted in the rendition of an improper summary judgment 

that requires reversal.

 

12 For reasons unknown, the Howards have complicated the Trial Court’s analysis of the 2010 

Notices of Acceleration and Sale by including in the record various immaterial notices of 

acceleration from 2009 that had been abandoned. The abandoned 2009 acceleration is of no 

relevance. It is true that the parties stipulated at trial that the 2009 Notice of Acceleration was 

properly given at the time, (CR 801), but the 2009 acceleration was subsequently abandoned when 

Amy Howard filed a Chapter 13 bankruptcy case on August 31, 2009. Chapter 13 effectively 

deaccelerates all prior accelerations. E.g., Grubbs v. Houston First Am. Sav. Ass'n, 730 F.2d 236, 

241 (5th Cir. 1984) (holding that Chapter 13 debtors bankruptcy de-accelerated a pre-petition 

acceleration to allow the debtor to cure a default under the 11 U.S.C. 1322(b)(3) or (b)(5); In re 

Taddeo, 685 F.2d 24, 29 (2d Cir. 1982). Moreover, when PNC moved for relief from the automatic 

bankruptcy stay to allow PNC to proceed with foreclosure, the Howards made an enforceable 

agreement with PNC to abandon the foreclosure in consideration for the Howards’ promise to 

make periodic payments in specified amounts. (RR. Vol. 3, Defendants’ Exhibit 26). Their 

agreement is embodied in a consent order the bankruptcy court signed and entered on the docket 

on January 25, 2011. [Id.] [Docket No. 51 and 55 in Case No. 09-35705, In the United States 

Bankruptcy Court for the Northern District of Texas]. A consent order is a binding contract 

between the parties and should be construed as a contract. United States v. ITT Cont'l Baking Co., 

420 U.S. 223, 236–37, 95 S.Ct. 926, 43 L.Ed.2d 148 (1975). The consent order further 

memorialized the abandonment of the 2009 acceleration. It is for this reason new notices of 

acceleration were sent in March of 2010. (RR. Vol. 3, Exhibit 21).
31

D. A Wrongful Foreclosure Claim requires a showing of Both an 

Irregularity with the Sale Process and an inadequate Sale Price. 

The Howards’ Third Amended Petition (CR 58-66) was their operative 

pleading at the time the Howards' moved for summary judgment. Within the 

petition, the Howards' “[S]eek to set aside Defendant’s void foreclosure of the 

Property...” (CR 59). In moving for summary judgment on their wrongful 

foreclosure claim13 the Howards’ were required to show, “(1) a defect in the 

foreclosure sale proceedings; (2) a grossly inadequate sales price; and (3) a causal 

connection between the defect and the grossly inadequate selling price.” Charter 

Nat’l Bank – Houston v. Stevens, 781 S.W.2d 368, 371 (Tex. App. – Houston [14th

Dist.] 1989, writ denied). Even if the Howards are correct that PNC’s accidental 

use of its pre-merger name within either the foreclosure documents (the 

Appointment, Notice of Acceleration, Notice of Foreclosure Sale, or the Foreclosure 

Sale Deed), such an error did not result in an inadequate sale price at foreclosure. 

As the Beaumont Court of Appeals explained in Townsend v. Barrett Daffin 

Frappier Turner & Engel, LLP, 

Townsend did not allege facts that describe a defect in the foreclosure 

proceedings that caused a grossly inadequate selling price. Without a 

causal connection between the alleged defect and the allegedly 

 

13 PNC recognizes the difference between a sale held without authority and a sale conducted with 

authority to act, but irregularities occurring with the sale. To the extent the Howards’ are asserting 

that the irregular way in which PNC described itself within the Appointment of Substitute Trustee, 

Notice of Acceleration, Notice of Foreclosure Sale and/or the Substitute Trustee’s Deed is an 

irregularity that impacted the sale, then PNC asserts no inadequate sale price resulted from the

irregularities thereby negating the Howards’ claim.
32

inadequate sale price for the property, Townsend has no wrongful 

foreclosure claim. 

Townsend v. Barrett Daffin Frappier Turner & Engel, LLP, 2013 WL 5874607 at 

*8 (Tex. App. – Beaumont 2013)(emp. added)(internal citations omitted). “A claim 

for ‘wrongful foreclosure’ is not available based merely on showing a defect in the 

foreclosure process; it is also necessary that there be an inadequate 

selling price resulting from the defect.” See, Farrell v. Hunt, 714 S.W.2d 298, 299 

(Tex. 1986).

The Howards fail to even allege that the Property sold for an inadequate price 

at sale. In fact, the uncontroverted evidence establishes, a matter of law, that the 

sale price of $825,000.00 is not grossly inadequate. As observed by the United 

States Fifth Circuit Court of Appeals, “Texas cases establish that a foreclosure price 

exceeding 50% is not grossly inadequate." Water Dynamics, LTD. v. HSBC Bank 

USA, Nat. Ass’n, 509 Fed. Appx. 367 (5th Cir. 2013) citing Terra XXI, Ltd. v. 

Harmon, 279 S.W.3d 781, 788 (Tex. App. – Amarillo 2007); Richardson v. Kent, 47 

S.W.2d 420, 425 (Tex. Civ. App. – Dallas 1932). The reality is that the Property sold 

for 90% of its appraised value at the time of sale. Compare, Substitute Trustee’s 

Deed (RR Vol. 3, Defendant’s Exhibit 22) to Tax Appraisal for 2010 (RR. Vo1. 3, 

Defendant’s Exhibit 29).

The Trial Court erred in granting summary judgment in favor of the Howards, 

striking down PNC’s foreclosure sale. PNC had the authority to act as it did in 
33

conducting the foreclosure sale. What the Howards hope to achieve is a free home. 

In seeking the trifecta, the Howards sought to establish that the Note was properly 

accelerated (so limitations would begin to run) but that a foreclosure sale was never 

properly held (so that limitations would expire on PNC’s right to foreclose its Deed 

of Trust lien). The Trial Court erred in applying Texas black letter law in giving the 

Howards a free million-dollar home.14 

 

14 Even if the Trial Court was correct in its factual determination that John Howard did not receive 

proper Notice of Acceleration and Notice of Sale, the only legal conclusions that can be drawn 

from that factual finding is that the “2010 Notice of Acceleration” was ineffective to cause the 

acceleration of the debt (because notice was not properly given). It follows that without a proper 

acceleration of the debt, the four-year limitation period under Tex. Civ. Prac. & Rem. Code 

§16.035 did not commence to run and PNC would therefor still possess the right to enforce its 

Deed of Trust lien. 

The Howards’ summary judgment proof establishing that the debt was properly accelerated in 

2010 is also lacking. As most recently stated by the Fort Worth Court of Appeals, “Acceleration 

of the amount due on a loan is a two-step process requiring clear and unequivocal notices of (1) 

intent to accelerate and (2) acceleration.” NSL Property Holdings, LLC v. Nationstar Mortgage, 

LLC, 2017 WL 3526354 (Tex. App. – Fort Worth 2017). There is no Notice of Intent to Accelerate 

within the Howards summary judgment proof regarding the 2010 acceleration. Without a proper 

Notice of Intent to Accelerate there can be no acceleration (resulting again in the reality that 

limitations on enforcement of the Deed of Trust lien did not commence in 2010). It is anticipated 

the Howards will argue that the 2009 Notice of Intent to Accelerate is sufficient to serve as the 

notice of intent for the 2010 acceleration. However, the Fifth Circuit, less than two weeks ago, 

made an Erie guess holding that when an acceleration is abandoned (such as the 2009 acceleration 

being abandoned in this case) a new notice of intent to accelerate is required to be sent before the 

debt can be re-accelerated. See, Wilmington Trust, N.A. v. Rob, 2018 WL 2304600 (5th Cir. May 

21, 2018). 
34

III. ISSUE NO. 3

Did the Trial Court err by failing to grant judgment in favor of 

Appellants on its claim for equitable subrogation despite the totality of 

the stipulated evidence establishing Appellants' right to subrogation? 

Even if the Trial Court had properly determined that PNC’s Deed of Trust lien 

is void, PNC is still entitled to equitable subrogation. Specifically, to the extent 

proceeds were used from the 2005 loan origination to pay off any prior valid lien 

interest, equitable subrogation provides that PNC steps into the shoes of the prior 

lender, and assumes the prior lender’s lien position. 

Standard of Review. The review of the Trial Court’s Final Judgment 

denying PNC’s equitable subrogation claim is reviewed on appeal as follows, “[W]e 

review [the Trial Court’s] factual findings under a sufficiency of the evidence 

standard and review [the Trial Court’s] conclusions of law de novo.” Rourk v. 

Cameron Appraisal Dist., 305 S.W.3d 231 (Tex. App. – Corpus Christi 2009). 

PNC’s entitlement to equitable subrogation was established by the stipulated 

evidence. Given the stipulated evidence, the only question is whether the stipulated 

evidence established each element of PNC’s claim, and whether the Trial Court in 

receiving the stipulated evidence properly drew the correct conclusion of law from 

the evidence. 

Undisputed at trial was the stipulated evidence that the Howards obtained the 

$894,000.00 Note to pay off and refinance two pre-existing loans secured by liens 
35

against the Property. The amount of the Note used to pay off the prior secured loans 

was $888,282.25. (CR 800). The trial evidence also established, in addition to PNC 

being subrogated to the prior lender(s) liens, that PNC is subrogated to the ad 

valorem taxing authorities as PNC paid $174,000 to satisfy ad valorem tax liens that 

the Howards failed to pay in violation of their Deed of Trust. The evidence at trial 

was both undisputed and irrefutable.15 The Trial Court’s refusal to grant judgment 

in favor of PNC on its claim of equitable subrogation is in direct conflict with the 

factual and legal sufficiency of the evidence before the Court at the time of trial.

“Texas has long recognized a lienholder’s common law right to equitable 

subrogation. The doctrine allows a third party who discharges a lien upon the 

property of another to step into the original lienholder’s shoes and assume the 

lienholder’s right to the security interest against the debtor. The doctrine of equitable 

subrogation has been repeatedly applied to preserve lien rights on homestead 

property.” LaSalle Bank Nat. Ass'n v. White, 246 S.W.3d 616, 619-20 (Tex. 2007)

(citing Benchmark Bank v. Crowder, 919 S.W.2d 657, 661 (Tex.1996)). In 

Benchmark and again in LaSalle, the Texas Supreme Court “honored equitable 

subrogation claims against homestead property when a refinance, even though 

 

15 Under the loans, the Howards were obligated to pay ad valorem taxes and provide insurance to 

keep the property insured. (RR. Vol. 3, Defendants’ Exhibit 6, ¶4). After March 24, 2005, 

National City Bank of Indiana and its merger successors, National City Bank and PNC Bank, N.A. 

paid at least $174,531.64 to extinguish senior priority ad valorem tax liens for the Howards’ benefit 

and which tax liens the Howards were required to pay and remove. (RR Vol. 3, Defendant’s 

Exhibits 29, 31, 32).
36

unconstitutional, was used to pay off valid liens.” Id. The Court reasoned that to hold 

otherwise “would defeat the purpose of homestead protection”, stating: 

Homestead owners must have the ability to renew, rearrange, and 

readjust the encumbering obligation to prevent a loss of the homestead 

through foreclosure . . . Without equitable subrogation, lenders would 

be hesitant to refinance homestead property due to increased risk that 

they might be forced to forfeit their liens. 

Id. at 620.

The Texas Supreme Court has “emphasized that, ‘[o]nce valid, the lien does 

not become invalid against the homestead simply because the original debt has been 

refinanced.’” LaSalle Bank Nat’l Ass’n, 246 S.W.3d at 620 (quoting Benchmark 

Bank v. Crowder, 919 S.W.2d 657, 661 (Tex. 1996)). In short, the goal of equitable 

subrogation is to put the borrower back in essentially the same position he was in 

immediately before the transaction at issue occurred. See In re Rubarts, 896 F.2d 

107, 115 (5th Cir. 1990) (noting that all the lender “gains by operation of subrogation 

is the lien ... that it had prior to the subject questionable transaction”); Texas 

Commerce Bank Nat’l Ass’n v. Liberty Bank, 540 S.W.2d 554, 557 (Tex. Civ. 

App.—Houston [14th Dist.] 1976, no writ) (observing that “the appellant stood in 

exactly the same position as before the transaction”). Applying equitable 

subrogation in this case will accomplish the purpose of the doctrine, placing the 

Howards in the same position they were in before the prior liens totaling 

$888,286.25 were paid off. 
37

Where a lien is created by equitable subrogation, the subrogated lien is in the 

amount of the amount of the pre-existing lien that was paid off, plus legal interest 

from the date of payoff at the legal rate of six percent per annum. Chase Home Fin., 

L.L.C. v. Cal W. Reconveyance Corp., 309 S.W.3d 619, 629 (Tex. App.—Houston 

[14th Dist.] 2010, no pet.); In re Harmon, 444 B.R. 696, 711 (Bankr. S.D. Tex. 

2011), on reconsideration, 10-33789, 2011 WL 1457236 (Bankr. S.D. Tex. Apr. 14, 

2011) (“When a party qualifies for equitable subrogation, the party is entitled to a 

lien in the same amount as the previous lien plus 6% interest beginning at the time 

of the payoff of the previous lien.”). If a lienholder is equitably subrogated to a prior 

lien and both liens contain powers of sale, the subrogated lienholder is authorized to 

exercise its rights by virtue of a non-judicial foreclosure of its deed of trust. 

Providence Institution for Savings v. Sims, 441 S.W. 2d 516, 520 (Tex. 1969); 

Leonard v. Brazosport Bank of Texas, 628 S.W. 2d 216, 220 (Tex. App—Houston 

[14th Dist.] 1982 , writ ref’d n.r.e.). 

Equitable subrogation applies “in every instance in which one person, not 

acting voluntarily, has paid a debt for which another is primarily liable and which in 

equity should have been discharged by the latter.” Frymire Eng'g Co. ex rel. Liberty 

Mut. Ins. Co. v. Jomar Int'l, Ltd., 259 S.W.3d 140, 142 (Tex. 2008); Murray v. Cadle 

Co., 257 S.W.3d 291, 299 (Tex. App.—Dallas 2008, pet. denied); see Bank of Am. 

v. Babu, 340 S.W.3d 917, 922 (Tex. App.—Dallas 2011 rev. denied); Interfirst Bank 
38

Dallas, N.A. v. U.S. Fid. & Guar. Co., 774 S.W.2d 391, 397 (Tex. App.-Dallas 1989, 

writ denied). The Texas Supreme Court even directs courts to apply equitable 

subrogation to prevent unjust enrichment as the case is herein.16

The Dallas Court of Appeals, among other courts, has held that in cases like 

this, where the evidence establishes the right to equitable subrogation, the trial court 

errs materially and abuses its discretion in declining to grant that relief. Bank of 

Amer. v. Babu, 340 S.W.3d 917, 922 (Tex. App.—Dallas 2011, pet. denied) (holding 

that court abused its discretion in failing to grant equitable subrogation relief as a 

matter of law) (quoting Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 

241–42 (Tex.1985)(for its holding that “a trial court abuses its discretion when it 

acts arbitrarily or unreasonably without reference to any guiding rules and 

principles”). 

Continuing, the Dallas Court of Appeals has previously held that “[t]he right 

of subrogation is not dependent upon contract, agreement, or stipulation, or upon 

privity or strict suretyship; but it is a mode which equity adopts to compel the 

ultimate payment of a debt, by one who, in justice, equity, good conscience, ought 

 

16 PNC asserted an unjust enrichment claim in this case which was denied by the Trial Court. E.g.

Faires v. Cockerell, 88 Tex. 428, 31 S. W. 190, 194, (Tex. Comm’n App. 1932, opinion adopted)

(observing that “[p]erhaps the courts of no state have gone further in applying the doctrine of 

subrogation than has the court of this state”); see Frymire Eng'g Co. ex rel. Liberty Mut. Ins. Co. 

v. Jomar Int'l, Ltd., 259 S.W.3d 140, 142 (Tex. 2008); First Nat'l Bank of Kerrville v. O'Dell, 856 

S.W.2d 410, 415 (Tex. 1993).
39

to pay it. Galbraith-Foxworth Lumber Co. v. Long, 5 S.W.2d 162, 167 (Tex. Civ. 

App.—Dallas 1928), writ refused (Nov. 21, 1928).

The Texas Supreme Court has held that where a party seeking equitable 

subrogation paid a debt under circumstances that “would lead to the belief” such 

payment would protect that party's interest, such party was not a “volunteer” an 

obligation to subrogate such party to lien at issue should be implied. Oury v. 

Saunders, 77 Tex. 278, 13 S.W. 1030, 1031 (Tex. 1890)); Murray v. Cadle Co., 257 

S.W.3d 291, 301 (Tex. App.—Dallas 2008, pet. denied)( A refinancing mortgagee’s 

acts in paying off prior liens establishes the element of involuntariness as a matter 

of law). The same principles apply where tax liens are concerned. Smart v. Tower 

Land & Inv. Co., 597 S.W.2d 333, 338 (Tex. 1980) (holding that a mortgagee who 

pays taxes does so to protect its security and is an involuntary payor in law).

The Trial Court erred in failing to grant judgment for PNC on its equitable 

subrogation claim(s).17 Clear, convincing, uncontroverted and stipulated evidence 

 

17 It is anticipated that the Howards may suggest that PNC’s equitable subrogation claim is barred 

by limitations. The Howards are incorrect. The Texas Supreme Court has explained that because 

there is no specific statute of limitations for subrogation actions in Texas, “such actions are 

generally subject to the same statute of limitations which would apply had the action been brought 

by the subrog[or]” because “rights conferred by subrogation are entirely derivative of the 

subrogor’s interests, to which the subrogee merely succeeds.” Guillot v. Hix, 838 S.W.2d 230, 

232-33 (Tex. 1992); see also Brown v. Zimmerman, 160 S.W.3d 695, 700 (Tex. App.—Dallas 

2005, no pet.) (“There is no specific statute of limitations for subrogation actions.”). Therefore, 

the court must look to the nature of the subrogation action brought by PNC. The subrogation 

action brought by PNC is one for judicial foreclosure. As such and because the claim is one for 

the recovery of real property, under a real property lien or the foreclosure of a real property lien 

(i.e., based on the vendor’s lien, superior title, and/or purchase-money lien), it is governed by the 

four-year statute of limitations in section 16.035(a) of the Texas Civil Practice and Remedies Code. 
40

admitted at trial establishes PNC’s right to equitable subrogation as a matter of law. 

While PNC disagrees with the Trial Court that its Deed of Trust lien is void, even if 

the Deed of Trust lien were void, PNC would still be entitled to equitable 

subrogation. Specifically, to the extent proceeds were used from the 2005 loan 

origination to pay off a prior valid lien interest, equitable subrogation provides that 

PNC steps into the shoes of the prior lender, and assumes the prior lender’s lien 

position. Further, to the extent PNC pay ad valorem taxes on preservation of the 

Property it is subrogated to those tax liens as well. 

Even if all of PNC’s other claims failed, the Trial Court should have still found 

at trial that PNC was entitled to be equitably subrogated to the prior lienholders in 

the amount of $888,265.25 (plus interest) and subrogated to the tax lienholder in the 

amount of $174,000.00. 

 

See Brown, 160 S.W.3d at 701 (holding that “[t]o the extent [the subrogation action] is a suit for 

the recovery of real property under a real property lien, it is governed by the four-year statute of 

limitations” in section 16.035(a)). The Amarillo Court of Appeals has been presented with this 

exact issue and has held that the limitations begins to run upon the maturity of the note that was 

paid off, herein that being the date the prior notes were scheduled to fully mature (that date being 

in the late 2020’s). See, Lusk v. Palmer, 114 S.W.2d 677 (Tex. Civ. App. – Amarillo 1938, writ 

dism’d)(limitations could not be successfully urged against the subrogation pleaded until four 

years after the maturity dates of the notes paid by Mrs. Parmar); Holy Cross Church of God in 

Christ v. Wolf, 44 S.W.3d 562, 566 (Tex. 2001)(“[i]f a note or deed of trust secured by real property 

contains an optional acceleration clause, default does not ipso facto start limitations running on 

the note. Rather, the action accrues only when the holder actually exercises its option to accelerate).
41

IV. ISSUE NO. 4

Did the Trial Court err by failing to grant judgment in favor of 

Appellants on its suit on the Note despite the totality of the stipulated 

evidence establishing Appellants' right to collect on the Note separate 

from its right to enforce its in rem Deed of Trust lien? 

The Court erred in determining that Defendant PNC was not entitled to recover 

on its suit on the Note. The evidence before the Court on the suit over the note 

established conclusively that: (1) PNC is the holder of the Note (the Note being in the 

physical possession of PNC and endorsed in blank), (2) Plaintiffs default in paying the 

Note, (3) all conditions precedent have occurred to PNC’s right to recover under the 

Note, and (4) suit was filed within the applicable statute of limitations. As such, no 

legally or factually sufficient evidence exists within the record upon which the Court 

could have denied the requested relief.

Standard of Review. The review of the Trial Court’s Final Judgment 

denying PNC’s claim on its Note is reviewed on appeal under the same standard as 

PNC’s claim for equitable subrogation is reviewed. The Trial Court’s factual 

findings are reviewed under a sufficiency of the evidence standard and review and 

the Trial Court’s conclusions of law are reviewed de novo.” See, Rourk v. Cameron 

Appraisal Dist., 305 S.W.3d 231 (Tex. App. – Corpus Christi 2009). PNC’s 

entitlement to the recovery on its Note is established by the stipulated evidence. 
42

Even if the Trial Court was correct in concluding that PNC’s Deed of Trust 

lien is void, PNC still possessed the right to collect on its Note. As stated by the 

Austin Court of Appeals, “[T]he note and the deed-of-trust lien afford distinct 

remedies on separate obligations—the note against the borrower and the lien against 

the real property. See Stephens v. LPP Mortg., 316 S.W.3d 742, 747 (Tex. App.-

Austin 2010, pet. denied). For this reason, a lien creditor may pursue foreclosure of 

a lien against real property under the deed of trust independent of any personal action 

against the borrower for collection on the note. Id. As further explained by the 

Austin Court of Appeals in Bierwirth v. BAC Home Loans Servicing, L.P.,

Texas law differentiates between enforcement of a promissory note and 

foreclosure. Foreclosure enforces the deed of trust, not the underlying 

note. Foreclosure is an independent action against the collateral and 

may be conducted without judicial supervision. Enforcement of the 

note, on the other hand, is a personal action against the signatory and 

requires a judicial proceeding.... Texas courts have refused to conflate 

foreclosure with enforcement of a promissory note.

Bierwirth v. BAC Home Loans Servicing, L.P., 2012 WL 3793190, (Tex. App. –

Austin 2012) (pet. denied).

Perhaps the Trial Court denied PNC’s right to collect on the Note as it believed 

limitations had run on PNC’s right to enforce collection. However, unlike the fouryear limitation on a lender’s right to enforce a deed of trust lien after maturity, an 

action on a Note must be brought within six years. See, Tex. Civ. Prac. & Rem. 

Code §3.118 (regarding limitations); Tex. Bus. & Comm. Code §3.104 (providing 
43

that the Note qualifies as a negotiable instrument); Amberboy v. Societe de Banque 

Privee, 831 S.W.2d 793, 801 (Tex. 1992). The undisputed evidence established that 

PNC brought its suit on the Note on May 14, 2015, a date less than six years after 

even the earliest date the Howards’ claim acceleration of the Note occurred. (CR 

804).

In short, the Trial Court’s judgment that the Note is “Void and Unenforceable” 

is particularly perplexing. (CR 901-902). The evidence at trial and stipulations 

establish the Howards’ made, owed and defaulted on the loan. (CR 799-801). The 

trial evidence established the amount of principal and interest due on the note. (RR. 

Vol. 3, Defendants’ Exhibit 20). The note is endorsed in blank and the Howards’

judicially admit that PNC holds the Note.18 (CR 801-802). These stipulated facts 

establish PNC’s right to recovery on its Note. There was no evidence presented at 

trial controverting this clear and convincing proof that the Note is valid and 

enforceable. The Court’s “alternative finding” that the note is “Void” is a complete 

mystery; no pleading and no evidence of any sort was submitted to the Court at any 

time that would remotely allow such a conclusion. Given the foregoing, the Trial

Court erred in failing to grant PNC’s requested relief on its suit on the note; the 

 

18 A “holder” is defined in the Texas Business and Commerce Code as “the person in possession 

of a negotiable instrument that is payable either to bearer or to an identified person that is the 

person in possession.” Tex. Bus. & Com. Code Ann §1.201(b)(21)(A).
44

Court’s judgment is unsupported by any legally or factually sufficient evidence on 

this issue.

CONCLUSION

WHEREFORE, Appellants PNC Mortgage, a Division of PNC Bank, N.A. 

Successor to National City Bank ("PNC") and National City Mortgage, A Division 

of National City Bank of Indiana respectfully request that this Court vacate the Trial 

Court’s Partial Summary Judgment and the Trial Court's Final Judgment. PNC 

request this Court render judgment in favor of PNC on its equitable subrogation 

claim and remand the case for further trial court proceedings as to PNC’s right to 

enforce its Deed of Trust lien. PNC alternatively requests that this Court direct the 

Trial Court to file Findings of Fact and Conclusions of Law and thereafter permit 

PNC to re-brief matters as necessary. 

Respectfully submitted,

HOPKINS LAW, PLLC

3809 Juniper Trace, Suite 101

Austin, Texas 78738

(512) 600-4320 – Telephone

(512) 600-4326 – Facsimile 

MARK@HOPKINSLAWTEXAS.COM

SHELLEY@HOPKINSLAWTEXAS.COM

By: /s/ Mark D. Hopkins

Mark D. Hopkins

Texas State Bar No. 00793975

Shelley L. Hopkins

Texas State Bar No. 00796255
45

BARRETT DAFFIN FRAPPIER

TURNER & ENGEL, LLP

Robert D. Forster, II

State Bar No.: 24048470

4004 Belt Line Rd., Suite 100

Addison, Texas 75001

972-340-7901 (Telephone)

972-341-0734 (Facsimile)

Brian Scott Engel

State Bar No. 00789279

3809 Juniper Trace, Suite 205

Austin, Texas 78738

RobertFo@bdfgroup.com

BrianEn@bdfgroup.com

ATTORNEYS FOR APPELLANTS
46

CERTIFICATE OF SERVICE

Pursuant to Texas Rules of Civil Procedure, I certify that a true and correct 

copy of the foregoing has been sent on this the 1st day of June 2018 to all parties of 

record the method indicated below.

Via E-Service

J. Neal Prevost

Prevost & Shaff

1518 Legacy Drive, Suite 260

Frisco, Texas 75034

sdc@prevostandshaff.com

____/s/ Mark D. Hopkins ______________

Mark D. Hopkins
47

CERTIFICATE OF COMPLIANCE

Pursuant to Texas Rule of Appellate Procedure 9.4(i)(3), the undersigned 

certifies this brief complies with the type-volume limitations of Texas Rule of 

Appellate Procedure 9.4. Exclusive of the exemption portions in Texas Rule of 

Appellate Procedure 9.4(i)(1), the brief contains: 10,859 words.

 /s/ Mark D. Hopkins

Mark D. Hopkins