Court Opinion

ID: 4394092
Source: CourtListenerOpinion
Date Created: 2019-05-04 07:44:02.70783+00
Date Added: 2024-06-11T13:32:05.189992
License: Public Domain

In the
                    Court of Appeals
            Second Appellate District of Texas
                     at Fort Worth
                 ___________________________
                      No. 02-18-00325-CV
                 ___________________________

               MARLENE W. MITCHELL, Appellant

                                V.

WILMINGTON SAVINGS FUND SOCIETY, FSB D/B/A CHRISTIANA TRUST
 AS TRUSTEE OF THE AMERICAN MORTGAGE INVESTMENT PARTNERS
FUND I TRUST AND WILMINGTON SAVINGS FUND SOCIETY, FSB D/B/A
CHRISTIANA TRUST AS OWNER TRUSTEE OF THE RESIDENTIAL CREDIT
               OPPORTUNITIES TRUST III, Appellee

               On Appeal from the 17th District Court
                      Tarrant County, Texas
                  Trial Court No. 017-291827-17

                Before Kerr, Birdwell, and Bassel, JJ.
              Memorandum Opinion by Justice Birdwell
                            MEMORANDUM OPINION

       This appeal is from the trial court’s final summary judgment for Wilmington

Savings Fund Society, in its trustee capacity, in Marlene Mitchell’s second suit

attempting to challenge the judicial foreclosure sale of her residence. Because her

second suit is barred by res judicata, we affirm.

                                       Background

       Mitchell’s home was sold in September 2016 pursuant to a judicial foreclosure

order. See Mitchell v. Wilmington Sav. Funds Soc., FSB, No. 02-18-00089-CV, 2019 WL
150262, at *1 (Tex. App.––Fort Worth Jan. 10, 2019, no pet.) (mem. op.). After the

buyer filed a forcible detainer suit, Mitchell filed two bankruptcy petitions in federal

court. Id. After dismissal of the first bankruptcy petition, Mitchell filed an adversary

proceeding in the second bankruptcy against Wilmington in its trustee capacities,

bringing claims for wrongful foreclosure, for injunctive relief, and to quiet title. A little

over a week later, Mitchell filed this suit in the 17th District Court, bringing claims to

quiet title, for relief from wrongful foreclosure, and for injunctive relief.

       On June 13, 2017, Mitchell filed a Joint Stipulation of Dismissal With Prejudice

of the adversary proceeding in the bankruptcy court. In that filing, Mitchell agreed

that she “no longer wishe[d] to pursue the claims she . . . asserted in [the] adversary

proceeding,” and, in agreement with Wilmington, she sought dismissal of “all of her

claims in [the] adversary proceeding” with prejudice. This effected a dismissal of the

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proceeding with prejudice. See Fed. R. Civ. P. 41(a)(1)(A)(ii); Fed. R. Bankr. P. 7041;

McVay v. Perez (In re Perez), 411 B.R. 386, 397 (Bankr. D. Colo. 2009).

      In February 2018, the county court at law rendered a judgment of possession

for Wilmington in the forcible detainer case; Mitchell appealed that judgment, which

this court affirmed and which is now final. See Mitchell, 2019 WL 150262, at *4.

Meanwhile, Wilmington filed a traditional and no-evidence motion for summary

judgment in the 17th District Court case, arguing in part that res judicata applied to

bar Mitchell’s claims against it because they had already been resolved in the

bankruptcy adversary proceeding. The trial court granted Wilmington’s traditional

motion and rendered a final, take-nothing judgment on all of Mitchell’s claims.

                                 Standard of Review

      We review a summary judgment de novo. Travelers Ins. v. Joachim, 315 S.W.3d
860, 862 (Tex. 2010). We consider the evidence presented in the light most favorable

to the nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors

could, and disregarding evidence contrary to the nonmovant unless reasonable jurors

could not. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848

(Tex. 2009). We indulge every reasonable inference and resolve any doubts in the

nonmovant’s favor. 20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008). A

defendant is entitled to summary judgment on an affirmative defense if the defendant

conclusively proves all elements of that defense. Frost Nat’l Bank v. Fernandez, 315
S.W.3d 494, 508–09 (Tex. 2010); see Tex. R. Civ. P. 166a(b), (c). To accomplish this,

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the defendant must present summary-judgment evidence that conclusively establishes

each element of the affirmative defense as a matter of law. See Chau v. Riddle, 254
S.W.3d 453, 455 (Tex. 2008).

                     Mitchell’s Claims Barred by Res Judicata

      In her first issue, Mitchell claims the trial court erred by granting summary

judgment for Wilmington, claiming in part that the trial court refused to hear critical

evidence1 and that res judicata does not apply. 2 The trial court did not specify in its

order whether it granted summary judgment on traditional or no-evidence grounds.

Because our review of the traditional grounds makes a review of Mitchell’s second

issue regarding evidentiary exclusion unnecessary, we consider the propriety of

granting the traditional motion first. See Reynolds v. Murphy, 188 S.W.3d 252, 258 (Tex.

App.––Fort Worth 2006, pet. denied) (op. on reh’g).

      Res judicata bars litigation of a second suit when (1) a court of competent

jurisdiction has rendered a prior final judgment on the merits, (2) the prior suit

involved the same parties or those in privity with them, and (3) the second suit’s

claims are the same as those raised in the prior suit or the claims in the second suit

could have been raised in the first suit. Amstadt v. U.S. Brass Corp., 919 S.W.2d 644,

      1
       The majority of her argument relates to the no-evidence motion, but she also
argues that summary judgment was improper on res judicata grounds.
      2
        Arguably, Mitchell failed to adequately brief her res judicata complaint for
failure to cite authority. See Tex. R. App. P. 38.1(i). We nevertheless address the
argument because Mitchell clearly raises it as a ground for reversal. See Perry v. Cohen,
272 S.W.3d 585, 587–88 (Tex. 2008).

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652 (Tex. 1996); New Talk, Inc. v. Sw. Bell Tel. Co., 520 S.W.3d 637, 645 (Tex. App.—

Fort Worth 2017, no pet.). Mitchell does not dispute that the parties in the adversary

proceeding were the same, but she does contend that the bankruptcy court did not

adjudicate the complaints she raised in the 17th District Court.

       We must look to federal law to determine whether the disposition of Mitchell’s

claims in the second bankruptcy proceeding bars this state-court suit. See San Antonio

ISD v. McKinney, 936 S.W.2d 279, 281 (Tex. 1996); Hill v. Fed. Nat’l Mortg. Ass’n, No.

14-15-00388-CV, 2016 WL 1660392, at *2 (Tex. App.—Houston [14th Dist.] Apr. 26,

2016, no pet.) (mem. op.); see also, e.g., Aerojet-Gen. Corp. v. Askew, 511 F.2d 710, 715

(5th Cir. 1975) (explaining reasons for applying federal res judicata law when federal

judgment was rendered first); cf. Ellis v. Amex Life Ins. Co., 211 F.3d 935, 937–38 (5th

Cir. 2000) (holding that when two cases are pending, first-rendered judgment is

entitled to preclusive effect even if suit in which second judgment was rendered was

filed first). Under federal law, a dismissal or nonsuit with prejudice is “tantamount to

a judgment on the merits” for res judicata purposes because it “works a permanent,

inalterable change in the parties’ legal relationship to the defendant’s benefit: the

defendant can never again be sued by the plaintiff or its privies for claims arising out

of the same subject matter.” Epps v. Fowler, 351 S.W.3d 862, 868–69 (Tex. 2011)

(citing Dean v. Riser, 240 F.3d 505, 509 (5th Cir. 2001)); see, e.g., Matter of W. Tex. Mktg.

Corp., 12 F.3d 497, 501 (5th Cir. 1994) (noting that parties’ filing of stipulations of

dismissal in bankruptcy proceeding barred relitigation of any of the issues raised in the

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dismissed proceeding); Matlock Realty Enter., Inc. v. Crown Fin., LLC, No. 02-15-00189-

CV, 2016 WL 438381, at *4 (Tex. App.—Fort Worth Feb. 4, 2016, no pet.) (mem.

op.) (noting that it is well settled in the Fifth Circuit that a dismissal with prejudice,

including in a bankruptcy proceeding, is a final judgment on the merits for res judicata

purposes).

       Mitchell contends that the bankruptcy court never adjudicated her 17th District

Court claim that Wilmington lacked standing to file the 2016 judicial foreclosure suit.

But she raised those complaints in the adversary proceeding, seeking to have the

foreclosure sale declared void because “neither the original mortgagee, subsequent

holders of the note or Deed of Trust, their trustees or any successor trustees held a

beneficial interest under the deed of trust.” And even if her 17th District Court title

and wrongful foreclosure complaints based on a lack of standing are not identical to

the standing complaints she raised in the adversary proceeding, 3 they are similar

enough that she could have raised them in the adversary proceeding; Mitchell’s goal in

both the adversary proceeding and this suit was the same: to have the 2016 judicial

foreclosure order and sale declared void. See Petro-Hunt, L.L.C. v. United States, 365
F.3d 385, 395–96 (5th Cir. 2004) (explaining that Fifth Circuit has adopted

transactional test for determining whether claims are the same for res judicata

       3
        In a first amended petition in the 17th District Court, Mitchell more expressly
argued that in the 2016 foreclosure suit, Wilmington failed to provide sufficient
evidence of all of the transfers by which it had obtained its interest in the debt; thus, it
had failed to show standing.

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purposes, under which the critical question is whether the claims arise from the same

nucleus of operative facts).

       Finally, the bankruptcy court had jurisdiction to adjudicate Mitchell’s adversary

proceeding claims. See 11 U.S.C.A. § 541, 28 U.S.C.A. §§ 157(b)(1), (2)(E), 1334;

Matlock v. Lomas Mortg. U.S.A., Inc. (In re Matlock), 154 B.R. 721, 721–22 (Bankr. E.D.

Ark. 1993); cf. Ger. Am. Capital Corp. v. Oxley Dev. Co. (In re Oxley Dev. Co.), 493 B.R.
275, 283–84, 286–87 (Bankr. N.D. Ga. 2013) (holding that creditor’s suit to quiet title

and declare foreclosure valid was a core proceeding over which bankruptcy court had

jurisdiction even if bankruptcy court would have to refer to state law to determine at

least part of claim).

       Accordingly, we hold (1) that Wilmington conclusively proved that the

dismissal of Mitchell’s bankruptcy adversary proceeding with prejudice was a final

judgment adjudicating Mitchell’s claims in this suit for res judicata purposes and,

therefore, (2) that the 17th District Court did not err by granting Wilmington’s

traditional summary judgment. We overrule Mitchell’s first issue. Because her second

issue challenges the trial court’s decision to exclude her evidence that is unrelated to

Wilmington’s affirmative defense––and thus could not raise a fact issue defeating

Wilmington’s proof––we need not address the issue. See Tex. R. App. P. 47.1.

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                                   Conclusion

      Having overruled Mitchell’s dispositive issue, we affirm the trial court’s

judgment. We also deny any pending motions in this court.

                                                   /s/ Wade Birdwell

                                                   Wade Birdwell
                                                   Justice

Delivered: May 2, 2019

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