RVFRSE and IWNI)ER; Opinion issued December 11,2012

in The Quurt 

## of 441JZt1 

## iftI! Jttrirt of 1rxa at )a1hui No. 05-1 1-00700-CV
WELLS FARGO BANK, N.A., AS TRUSTEE, Appellant

RAY ROBINSON, Appellee
On Appeal from the 296th Judicial District Court Collin County, Texas Trial Court Cause No. 296-02231-2008 

### OPINION Before Justices Morris, Francis, and Murphy Opinion By Justice Morris Inthis appeal following atrialto the courtwithoutajury, Wells Fargo Bank. N.A. challenges the trial courts judgment in favor ofRay Robinson on his claims for wrongful foreclosure and breach ofcontract. In three issues. Wells Fargo contends the evidence is legally and factually insufficientto supportthetrial court’s award ofdamages undereithertheoryofrecovery assertedby Robinson and there is no proper basis to support the award ofattorney’s fees. Robinson brings a cross-appeal contending the trial court erred in failing to order Wells Fargo to lhrfeit all ofthe principal andinterestcollectedonhishomeequitynote. Afterreviewingtheevidence andapplicable law. weconcludethetrial courterredinawarding Robinson damages and attorneys fees. We further conclude Robinson is not entitled to a foiteiture ofthe principal and interest paid on his note Wereverse the trial courts judgment and render judgment that Robinson take nothing by his claims.

On May 24. 1 999. Ray Robinson executed a home equity note in the principal amount of $71800. The note was secured h a deed oftrust on the property. It is undisputed that Robinson defaulted under the terins ofthe note by failing to make his monthly payments. As a result, Wells Fargo accelerated the note and it became due andpayable. Although Robinson stated attrial thathe made some payments on the note through 2007 pursuant to a bankruptcy court proceeding. he conceded that he did not make all the necessary payments and had not made any payments on the note for more than three years before trial despite the fact that he was still living on the property. Wells Fargo filed an application with the trial court for an expedited Ibreclosure underrule 736 ofthe Texas Rules ofCivil Procedure. Robinson did not contest the hanLs right to foreclose. hut requested additional time to try to sell the house. The parties later reached an agreement and.
on March 12, 2008, the trial court signed an agreed order stating that Wells Fargo was authorized to proceed with a foreclosure and directed the hank to “post [the] property on or before April 14. 2008 for the May 6. foreclosure sale.’ Contrary to the order, the substitute trustee for Wells Fargo did notpostthe property fbr sale until May 12. 2008 and did not conductthe foreclosure until June 3. Wells Fargo purchased the property at the June 3 foreclosure sale. Approximatelytwo months afterthe sale. Robinson broughtthis suitcontendingWellsFargo
was not authorized to foreclose on his property because it did not comply with the agreed court order. Robinson asserted claims including wrongful foreclosure and breach ofcontract as well as requesting declaratory relieI A trial was conductedbefore the court without ajury. Based on the evidence presented. the trial court stated in its findings of fact and conclusions of law that the foreclosure on June 3, 2008 was wrongful and inbreach ofthe deed oftrust because Wells Fargo’ssubstitute trustee did not have a valid court order to kreclose on the property on the date the hueclosurc occurred. The judgment awarded Robinson S47.007.37 in damaucs represcntine the difference between the fair market value ofthe property on the foreclosure date and the unpaid balance ofthe note. The judgment also awarded attorney’s fees and additional fees in the event of appeals. All other reliefwas denied. This appeal ensued. II. In its first two points oferror, Wells Fargo contends the evidence is legally and factually insufficient to support the damages awarded by the trial court. Wells Fargo argues there is no evidence ofa causal connection between the alleged wrongful foreclosure or the alleged breach of the deed oftrust and the monetary damages asserted by Robinson. According to Wells Fargo. Robinson suffered neither prejudice nor harm as a result of the delay in the foreclosure sale. Robinsonrespondsthathe is entitledto damages based solely onthe factthatthe sale was conducted in violation ofboth the deed oftrust and the Texas Constitution. We disagree with Robinson. Article 16. Section 50(a)(6) ofthe Texas Constitution sets forth the requirements for an extension ofcredit securedby a lien onthe borrower’s homestead. TEx. CoxsT. artXVI. S 50(a)(6). Among these is the requirement that the lien may be foreclosed upon only by a court order. id. 

### § 50(a)(6)(D). The deed oftrust signed by the parties incorporated this requirement by stating that Wells Fargo must obtain a court order before foreclosing on the property. The court order in this
case authorized Wells Fargo to foreclose on the property only on May 6. 2008. Because the foreclosure sale was conducted on a different date. it was not authorized by a court order and, therefore, violated the constitutional requirement set forth in the deed oftrust. A foreclosure sale notconducted in accordance with the terms ofthe deed oftrust gives rise to acause ofactionto set aside the sale and the resulting trustees deed. See UniversitySays. Ass ‘av. Soringivoacl.s Shopping ( ‘ir.

. 644 S.\V.2d 705. 706 ( [cx. 1983). I’hc trial court did not set aside the trustee’s deed however. hut instead awarded damages. For a party to recover damages lbr wrongful toreclosure and breach ofthe deed ol trust. he must show that he has suttered a loss or material injury as the result ofan irregularity in the foreclosure sale. .S’ee Id.; see 

### also Gainesville Oil & 

### Gas Co., Inc. v, Farm Credit Bank of Tex., 847 S.W.2d 655, 659 (Tex. App.—Texarkana 1993. no writ). In general, this is shown where the actions ofthe lender or note holder have caused the property to be sold for agrossly inadequateprice. See American Says. & LoanAssoc, v. 4iusick. 531 S.W.2d 581. 587 (Tex. 1975). in such a case, the damages are measured by the difference between the market value ofthe land and the remaining balance on the outstanding mortgage debt. See John HancockMu!. Life Ins. Co. v, Howard, 85 S.W.2d 986, 988-89 (Tex. Civ. App.—Waco 1981, writ refd). The recovery ofdamages is not appropriate, however, where title to the property has not passed to a third party and the borrower’s possession of the property has not been materially disturbed. See.Janes i’. CPR Corp..623 S.W.2d 733. 738 (Tex. App-—Houston [1° Dist.] 1982. writ refd n.r.c.): see also Peterson v. Black, 980 S.W.2d XIX, 823 (Tex. App.—San Antonio 1998, no pet.). Where the note holder obtains title to the property at the foreclosure sale and the borrower retains possession. the properremedy is to set aside the trustee’s deed andto restore the borrower’s title. subject to the note holder’s right to establish the debt owed and foreclose its lien. See Jones, 623 S.W.2d at 738. The reason forthis is that ‘the law undertakes to awardjust compensation

—no
more and no less

— for the injuries sustained.” See Howard. 85 S.W.2d at 989. Ifthe borrower’s possession has not been disturbed and no third party rights to the property have been created, the

Although Robinson’s petition seeks reliefincluding quiettitle to the property and a ‘declaration” that the substitute trustee’s deed be canceled, the petition does not directly requestthat the foreclosure sale be set aside. To the extentthe petition can he read to request this reliek the trial court did not order the deed set aside and Robinson does not appeal from such ruling.borrower has sufThred no compensable injury. See Peterson. 980 S.W.2d at 823. In this case. Robinson presented no evidence that the property it iSSUe was sold for an inadcqtiate price orthat he as other\ise harmed by the delay in the foreclosure sale. lurthermure, it is undisputed that Wells Fargopurchased the property atthe foreclosure and, as ol the date oftrial, Robinson continued to occupy the premises. l3ased on the record hethre us. we conclude Robinson failedto present any evidence ofacompensable injury. The trial courterred, therefore, in awarding Robinson monetary damages under either his wrongful foreclosure or his breach ofcontract cause olaction. We resolve Wells Fargo’s Iirst two issues in its favor. In its third issue, Wells Fargo contends thetrial court erred in awarding Robinson attorney’s fees. Robinson responds thathe is entitled to recoverthe fees underthe [‘exas Uniform Declaratory Judgment Act. An examination ofthe trial court’sjudgment, however, shows that Robinson was not awarded any declaratory relief. The judgment merely ordered that Robinson recover monetary damages. fees, and Wells Fargo. All reliefnot specifically grantedin thejudgment was denied. Furthermore. Robinson’srequestfordeclaratoryreliefismerelyduplicative ofhis claims for wrongful foreclosure and breach ofcontract. A plaintiffmay not use the declaratoryjudgment act to recover attorney’s fees that are not otherwise availableby simply seeking adeclaratoryjudgment
on issues already before the court as part ofthe oher claims asserted. See MBM Fin. Corp. v. Ifoodlands Operating Co., L.P., 292 S.W.3d 660, 669 (Tex. 2009). As the Texas Supreme Court has stated. “[iifrepleading a claim as a declaratoryjudgment couldjustify a fee award, attorney’s fees would be available for all parties in all cases.” Robinson’s petitionrequested thetrial courtto declare that Wells Fargo did nothave avalid court order authorizing it to foreclose on the property on June 3, 2008 and that its foreclosure waswrongltil and a breach of the deed oftrust. lhese requests are nothing more than areassertion ofthe issues underlying Robinson’s claims for wrongful foreclosure and breach of contract. All of the relief sought tinder Robinson s declaratoryjudgment action could have been sought in connection withhis otherclaims. The onlyapparentbenefitto Robinson ofthe declaratoryjudgmentaction was to provide a basis for an award ofattorney’s fees. As such, an award ofattorney’s les under the declaratoryjudgment act is improper. 5cc ElanIndus, Inc. i’. Lch,nunn. 359 S.W.3d 620. 624 (Fex. 2011). We resolve Wells Fargo’s third issue in its favor. Finally, we address Robinson’s cross-appeal contending the trial court erred in failing to order Wells Fargo to forfeit all principal and interest collected on his home equity note. Robinson bases his argument on Article 16, section 50(a)(6)(Q)(x) ofthe Texas Constitution that states ifa lender Ihils to complywith therequirements foran extension ofcredit found in section 50(a)(6). the lender forfits all principal and interestofthe loan. See TEx. CONST. art. XVI. 

### § 50(a)(6)(Q)(x): see also Vincentv. BunkofAm., NA., 109 S.W.3d 856, 862 (Tex. App.—Dallas 2003. pet. denied). But,
as this Court has held, so long as the loan agreement originally entered into by the parties complies with the constitutional requirements. forfeiture is not an appropriate remedy. See Vincent. 109 S.W.3d at 862. A borrower’s recourse for a lender’s failure to abide by the terms ofhis loan agreement is to assert traditional tort and breach ofcontract causes ofaction, not constitutionally mandated forfeiture. See id. As statedabove, section 50(a)(6)(D)requiresthatahome equitynotebe securedbyalienthat may only be foreclosed upon by court order. The deed oftrust at issue hererequired a court order for foreclosure. Because the loan agreement entered into by the parties complied with the constitutional requirements, the trial court did noterr in denyingforfeiture. We resolve Robinson’s sole issue against him.Base on the foregoing, we conclude there is no evidence to support the award ofmonetary damages and attornevs tees to Robinson based on his claims [orwrongful foreclosure and breach of contract. We further conclude the trial court did not err in denying Robinsons request for forfeiture. Accordingly. we reverse the trial court’s judgment and renderjudgment that Robinson take nothing by his claims.

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------- JOSEIORRlS / JUS1’icI 1 I0700F.P05

## Enitrt nf .ppiahi iifth 3iitrirt uf rxa at 

## 1allai JUDGMENT WELL FARGO E3ANK. N.A., AS TRUSTEE, Appellant No. 05-1 1-00700-CV RAY ROBINSON, Appellee V. Appeal from 

### the 296 th Judicial District Court of Collin County, Texas. (Tr.Ct.No, 296- 02231-2008). Opinion delivered by Justice Morris, Justices Francis and Murphy participating.
In accordance with this Court’s opinion ofthis date, thejudgment ofthe trial court is REVERSED andjudgment is RENDERED that Ray Robinson take nothing by his claims. It is ORDERED 

### that appellant Well Fargo Bank, N.A., as Trustee recover its costs of

### this appeal 

### from appellee Ray Robinson. Judgment entered December 11, 2012.