Court Opinion

ID: 7800542
Source: CourtListenerOpinion
Date Created: 2022-08-15 12:10:37.28007+00
Date Added: 2024-06-11T16:29:06.629342
License: Public Domain

Opinion issued August 11, 2022

                                    In The

                             Court of Appeals
                                   For The

                         First District of Texas
                           ————————————
                            NO. 01-20-00799-CV
                          ———————————
        ARIEL MONTOYA AND OFELIA MONTOYA, Appellants
                                      V.
                   AMCAP MORTGAGE, LTD, Appellee

                  On Appeal from the 155th District Court
                           Austin County, Texas
                     Trial Court Case No. 2019V-0152

                        MEMORANDUM OPINION

      Appellants Ariel and Ofelia Montoya challenge the trial court’s summary

judgment in favor of appellee AmCap Mortgage, Ltd. (“AmCap”) in its mortgage

foreclosure suit. The trial court’s judgment allowed AmCap to elect either a

nonjudicial foreclosure or a judicial foreclosure sale. On appeal, the Montoyas
raise five issues. In the first two issues, they challenge AmCap’s standing. In the

first issue, they assert that AmCap did not prove that it owned or held the Note. In

the second issue they assert that the assignment of the deed of trust occurred after

the lawsuit was filed. In their third issue, they argue that AmCap did not prove

“privity to the deed of trust” as part of its judicial foreclosure claim. In their fourth

issue, the Montoyas assert that AmCap did not demonstrate that it was entitled to

invoke nonjudicial foreclosure as a mortgagee or mortgage servicer. In their fifth

issue, the Montoyas contend that the trial court erred by rendering judgment

allowing AmCap to use both judicial and nonjudicial foreclosure.

      We affirm.

                                     Background

I.    Refinancing, Note, and deed of trust

      Ariel Montoya refinanced his house in Sealy, Texas. On February 2, 2017,

he signed a note (“Note”) for a mortgage loan, in the amount of $144,229.00 plus

interest. The Note identified the lender as AmCap, and it identified the address

where payments should be made as a location in Houston, Texas. The Note

provided that if Ariel Montoya failed to pay the full amount of each payment on

the date due, the loan would be in default and the holder of the Note could

accelerate it with 30 days’ written notice. In the event of acceleration of the Note,

                                           2
Ariel Montoya would be required to reimburse the costs and expenses, including

reasonable attorneys’ fees, incurred to enforce the Note.

      The Note was secured by a deed of trust also signed on February 2, 2017.1

Both Ariel and Ofelia signed the deed of trust, which identified both spouses as the

“borrower[s].” AmCap was identified as the “lender,” which the deed of trust

defined as “any holder of the Note who is entitled to receive payments under the

Note.” The deed of trust also stated that “MERS,” Mortgage Electronic

Registration Systems, Inc., is a separate corporation acting “solely as a nominee for

Lender” and “Lender’s successors and assigns.” MERS was the beneficiary of the
1
      10.    UNIFORM SECURED NOTE

      This Note is a uniform instrument with limited variations in some jurisdictions. In
      addition to the protections given to the Note Holder under this Note, a Mortgage,
      Deed of Trust or Security Deed (the “Security Instrument), dated that same date as
      this Note, protects the Note Holder from possible losses which might result if I do
      not keep the promises which I make in this Note. That Security Instrument
      describes how and under what conditions I may be required to make immediate
      payment in full of all amounts I owe under this Note. Some of those conditions are
      described as follows:

      If all or any part of the Property or any Interest in the Property is sold or
      transferred (or if Borrower is not a natural person and a beneficial interest in
      Borrower is sold or transferred) without Lender’s prior written consent, Lender
      may require immediate payment in full of all sums secured by this Security
      Instrument. However, this option shall not be exercised by Lender if such exercise
      is prohibited by Applicable Law.

      If Lender exercises this option, Lender shall give Borrower notice of acceleration.
      The notice shall provide a period of not less than 30 days from the date the notice
      is given in accordance with Section 15 within which Borrower must pay all sums
      secured by this Security Instrument. If Borrower fails to pay these sums prior to
      the expiration of this period, Lender may invoke any remedies permitted by this
      Security Instrument without further notice or demand on Borrower.
                                           3
deed of trust in its capacity as nominee for the lender and its successors and

assigns.2 MERS, however, held only bare legal title under the deed of trust, which

expressly secured certain rights to the lender, including repayment of the loan and

performance of other covenants in the security interest and the Note. Under the

2
      MERS is “an electronic mortgage registration system and clearinghouse that tracks
      beneficial ownerships in, and servicing rights to, mortgage loans.” Richardson v.
      CitiMortgage, Inc., No. 6:10cv119, 2010 WL 4818556, at *5 (E.D. Tex. Nov. 22,
      2010). It is a “book entry system” as defined by Texas Property Code
      § 51.0001(1), which defines book entry system as “a national book system for
      registering a beneficial interest in [a] security instrument and its successors and
      assigns.” Under Texas law, a book entry system, including MERS, is a mortgagee.
      See TEX. PROP. CODE § 51.0001(4). The Fort Worth Court of Appeals has
      described the nature and purpose of MERS:

            MERS was created for the purpose of tracking ownership interests in
            residential mortgages. Mortg. Elec. Registration Sys. v. Young, No.
            2-08-088-CV, 2009 WL 1564994, at *4 (Tex. App.—Fort Worth
            June 4, 2009, no pet.) (mem. op.). Entities such as mortgage lenders
            subscribe to MERS and pay annual fees for the electronic processing
            and tracking of ownership and transfers of mortgages. Id. These
            members contractually agree to appoint MERS to act as their
            common agent on all mortgages they register in MERS. Id. When a
            mortgage is executed through a MERS member and registered in
            MERS, it is recorded in the real property records with MERS named
            on the instrument as nominee or mortgagee of record. Id. While the
            mortgage is in effect, the original lender may transfer the beneficial
            ownership or servicing rights on the mortgage to another MERS
            member, with MERS tracking these electronic transfers; these
            assignments are not recorded in the real property records. Id. If a
            MERS member assigns its interest in a mortgage to a nonmember,
            this assignment is recorded in the real property records, and MERS
            deactivates the loan within its system. Id. Thus, through MERS,
            interests in notes and liens can be transferred between members
            without assignment documents having to be recorded each time. See
            id.

      Robeson v. Mortg. Elec. Registration Sys., Inc., No. 02-10-00227-CV, 2012 WL
      42965, at *5 (Tex. App.—Fort Worth Jan. 5, 2012, pet. denied) (mem. op.).
                                           4
deed of trust, the Montoyas were required to make payments to the lender, and the

lender had the right to certain remedies in the event of default. These remedies

expressly included acceleration of the loan and the option to use the power of sale.

      22. Acceleration; Remedies. Lender shall give notice to Borrower
      prior to acceleration following Borrower’s breach of any covenant or
      agreement in this Security Instrument . . . . The notice shall specify:
      (a) the default; (b) the action required to cure the default; (c) a date,
      not less than 30 days from the date the notice is given to Borrower, by
      which the default must be cured; and (d) that failure to cure the
      default on or before the date specified in the notice will result in
      acceleration of the sums secured by this Security Instrument and sale
      of the Property. . . . If the default is not cured on or before the date
      specified in the notice, Lender at its option . . . may invoke the power
      of sale and any other remedies permitted by Applicable Law. Lender
      shall be entitled to collect all expenses incurred in pursuing the
      remedies provided in this [section] . . . including, but not limited to,
      reasonable attorneys’ fees and costs of title evidence. . . .

(Original printed in bold type.)

      The deed of trust described the Note as “in renewal and extension, but not in

extinguishment” of a prior mortgage loan described in an attached exhibit, and it

expressly denied that the secured debt was a home equity loan: “Loan Not a Home

Equity Loan. The Loan evidenced by the Note is not an extension of credit as

defined by Section 50(a)(6) or Section 50(a)(7), Article XVI, of the Texas

Constitution.” (Original printed in bold type.)

II.   Default, demand, and lawsuit

      Ariel Montoya defaulted on the Note by failing to make payments. AmCap

sent Ariel Montoya written notice of default on October 17, 2019. The notice

                                          5
identified AmCap as the “owner and/or holder” of the Note and the

“creditor/mortgagee” to whom the debt was owed. The notice stated the amount

due, $10,351.17, and informed Montoya that he had until November 21, 2019, to

cure the default. AmCap stated its intention to accelerate the maturity of the loan if

Montoya failed to cure the default.

      Montoya did not cure the default, and, on December 6, 2019, AmCap filed

suit against both Ariel and Ofelia Montoya for breach of contract due to the breach

of the Note and for, alternatively, judicial or nonjudicial foreclosure.3 AmCap

sought a judgment establishing the existence, validity, and amount of its lien on the

house in Sealy, along with interest, court costs, and reasonable and necessary

attorney’s fees incurred enforcing the lien. AmCap did not seek a deficiency

judgment and sought “to satisfy the judgment solely from the foreclosure

proceeds.”4

      On January 23, 2020, MERS assigned the February 2, 2017 deed of trust that

was executed by the Montoyas to AmCap. The assignment was signed by Amanda

L. Avila on behalf of MERS, “as nominee for AmCap Mortgage, Ltd., its

successors and assigns.” The jurat stated that Avila acknowledged to the notary

3
      Ofelia Montoya was served with the lawsuit on December 26, 2019, and Ariel
      Montoya was served with the suit on December 30, 2019.
4
      The Montoyas filed counterclaims against AmCap and third-party claims against
      MERS, but they later nonsuited all of their counterclaims and third-party claims
      without prejudice.
                                          6
that she was “authorized to execute this instrument on behalf of [MERS as

nominee for AmCap] . . . .”

       On May 1, 2020, AmCap accelerated the maturity of the loan and declared

the entire balance due and payable in full. A payoff statement dated April 29, 2020,

identified AmCap and listed its address as the same address designated in the Note

as the location to send payments. The payoff statement indicated that the total

amount due on the Note, through May 28, 2020, was $161,525.21. It also indicated

a remaining escrow shortage due of $13,161.42 and attorney’s fees of $3,600.

III.   Summary judgment

       AmCap moved for summary judgment arguing that its evidence conclusively

proved that Montoya breached the Note, AmCap was the proper party to enforce

the deed of trust, and the amount of damages was liquidated. Included among its

evidence was an affidavit from Amanda Avila in which she averred that she “was

authorized by MERS to sign [the 2020 assignment] on its behalf.”

       The Montoyas responded to the motion for summary judgment with legal

arguments. They did not provide any controverting summary judgment evidence.5

Instead, they argued that the court lacked subject matter jurisdiction because

AmCap filed suit prior to the execution of the 2020 assignment. They also argued

5
       In their response to the motion for summary judgment, the Montoyas stated that
       they “rely upon and incorporate by reference the pleadings, orders, and
       agreements from the clerk’s record of this case and ask the Court to take judicial
       [notice] thereof.”
                                            7
that AmCap was required to elect either judicial or nonjudicial foreclosure and that

the trial court could not properly render judgment affording AmCap an election.

The Montoyas further argued that there was an unexplained gap in the chain of title

because the 2020 assignment of the deed of trust does not identify whether MERS

is acting as nominee for AmCap or one of its successors or assigns.

      The trial court granted final summary judgment in favor of AmCap. In the

judgment, the trial court made the following rulings:

         1. A lien, evidenced by the recorded deed of trust on the
            Montoyas’ house in Sealy, was fixed and established in the
            amount of $163,916.83 as of October 15, 2020 plus interest at
            the per diem rate of $17.083 from October 15, 2020 until
            satisfied.

         2. AmCap was awarded judgment for $163,916.83 plus all court
            costs and reasonable and necessary attorneys’ fees of $9,309.50
            and contingent appellate attorney’s fees.

         3. AmCap’s lien was foreclosed, and AmCap was authorized to
            proceed with foreclosure under the deed of trust “pursuant to
            Tex. Prop. Code § 51.002.”

         4. In the alternative, and at AmCap’s election, AmCap or its
            successors and assigns were authorized “to request an Order of
            Sale issue to any sheriff or constable in the State of Texas to
            seize and sell the above-described Property the same as under
            execution in satisfaction of this Judgment against Ariel
            Montoya and Ofelia Montoya . . . .”

      The Montoyas filed a notice of appeal, and the trial court entered an order

setting appellate security and prohibiting AmCap from enforcing the final

judgment so long as the Montoyas paid $1,750 per month into the registry of the

                                         8
court or “until a subsequent order from a court of competent jurisdiction states

otherwise.”

                                     Analysis

      On appeal, the Montoyas raise five issues. The first two issues challenge

AmCap’s standing to sue. The first issue challenges AmCap’s standing to sue on

the Note and asserts that there was no evidence that AmCap owned or held the

Note on the date it filed suit. The second issue asserts that AmCap lacked standing

to sue for judicial foreclosure because the assignment of the deed of trust from

MERS to AmCamp occurred after the lawsuit was filed. In the third issue, the

Montoyas assert that AmCap did not provide sufficient evidence of its privity with

the deed of trust to support the trial court’s rendition of judicial foreclosure and

that the assignment did not identify the party for whom AmCap was serving as

nominee. In the fourth issue, the Montoyas assert that AmCap offered no evidence

establishing that it was a mortgagee or mortgage servicer as defined by the Texas

Property Code.

      In the fifth issue, the Montoyas assert that the trial court erred by rendering

judgment that “allowed for both judicial and non-judicial foreclosure.”

I.    Standards of review

      We review a trial court’s summary judgment de novo. Lujan v. Navistar,

Inc., 555 S.W.3d 79, 84 (Tex. 2018). In doing so, “we take as true all evidence

                                         9
favorable to the nonmovant, and we indulge every reasonable inference and

resolve any doubts in the nonmovant’s favor.” Provident Life & Accident Ins. Co.

v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). If the trial court does not state the

grounds upon which it grants summary judgment, an appellate court will affirm the

judgment if any of the grounds set forth by the movant is meritorious. Dow Chem.

Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001).

      To prevail on a traditional motion for summary judgment, the movant must

show that no genuine issue of material fact exists and that it is entitled to judgment

as a matter of law. TEX. R. CIV. P. 166a(c); Lujan, 555 S.W.3d at 84. When a

plaintiff moves for summary judgment on its own claim, it must conclusively

prove all essential elements of its cause of action. Rhône–Poulenc, Inc. v. Steel,

997 S.W.2d 217, 223 (Tex. 1999). A matter is conclusively proven if ordinary

minds could not differ as to the conclusion to be drawn from the evidence. Hall v.

Sonic Drive–In of Angleton, Inc., 177 S.W.3d 636, 643–44 (Tex. App.—Houston

[1st Dist.] 2005, pet. denied) (citing Triton Oil & Gas Corp. v. Marine Contractors

& Supply, Inc., 644 S.W.2d 443, 446 (Tex. 1982)). A nonmovant can defeat a

plaintiff’s motion for summary judgment on his own claim by coming forward

with evidence that creates a genuine question of material fact. Lujan, 555 S.W.3d

at 84–85.

                                         10
      “A deed is subject to the same rules of interpretation and construction as a

contract.” Cooke v. Morrison, 404 S.W.3d 100, 111 (Tex. App.—Houston [1st

Dist.] 2013, no pet.); see Luckel v. White, 819 S.W.2d 459, 461–62 (Tex. 1991).

“The construction of an unambiguous deed is a question of law for the court,”

which we review de novo. Wenske v. Ealy, 521 S.W.3d 791, 794 (Tex. 2017)

(quoting Luckel, 819 S.W.2d at 461).

II.   Standing

      Standing is a constitutional prerequisite to suit and a component of subject

matter jurisdiction. Farmers Tex. Cnty. Mut. Ins. Co. v. Beasley, 598 S.W.3d 237,

240 (Tex. 2020); Heckman v. Williamson Cnty., 369 S.W.3d 137, 150 (Tex. 2012).

“The standing requirement derives from the Texas Constitution’s provision for

separation of powers among the branches of government, which denies the

judiciary authority to decide issues in the abstract, and from the open courts

provision, which provides court access only to a ‘person for an injury done him.’”

Meyers v. JDC/Firethorne, Ltd., 548 S.W.3d 477, 484 (Tex. 2018) (quoting TEX.

CONST. art. I, § 13); see also In re Abbott, 601 S.W.3d 802, 807 (Tex. 2020) (orig.

proceeding) (per curiam) (stating that standing requirement in Texas parallels

federal test for Article III cases-and-controversies standing).

      Whether a court has subject-matter jurisdiction is a question of law. Tex.

Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). “A court

                                          11
has no jurisdiction over a claim made by a plaintiff who lacks standing to assert it.”

Heckman, 369 S.W.3d at 150. “In Texas, the standing doctrine requires a concrete

injury to the plaintiff and a real controversy between the parties that will be

resolved by the court.” Id. at 154.

         Although standing is commonly raised in a plea to the jurisdiction, see Bland

Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000), in this case, the

Montoyas challenged AmCap’s standing in response to AmCap’s motion for

summary judgment. Because this appeal arises from the trial court’s grant of

summary judgment, we consider whether the trial court properly rendered

summary judgment in light of the Montoyas’ arguments about standing. In

determining whether standing exists, we will consider the pleadings and the

summary judgment evidence. See, e.g., TEX. R. CIV. P. 166a(c); Lujan, 555 S.W.3d

at 84.

III.     Notes, liens, and foreclosure, generally

         When a debt is “secured by a note, which is, in turn, secured by a lien, the

note and lien constitute separate obligations.” Aguero v. Ramirez, 70 S.W.3d 372,

374 (Tex. App.—Corpus Christi 2002, pet. denied). “Texas law differentiates

between enforcement of a promissory note and foreclosure.” Bierwirth v. BAC

Home Loans Servicing, L.P., No. 03-11-00644-CV, 2012 WL 3793190, at *4 (Tex.

App.—Austin Aug. 30, 2012, pet. denied) (mem. op.). The Texas courts have

                                           12
“rejected the argument that a note and its security are inseparable by recognizing

that the note and the deed-of-trust lien afford distinct remedies on separate

obligations.” Id. at *3. A suit to enforce a recourse note, like the Note in this case,

is “a personal action against the signatory and requires a judicial proceeding.” Id. at

*4. “Foreclosure is an independent action against the collateral,” which may, upon

proper proof, “be conducted without judicial supervision.” Id.

      When construing the terms of a note or deed of trust, we must read the

documents together when they are executed as part of the same transaction. See

Jim Walter Homes, Inc. v. Schuenemann, 668 S.W.2d 324, 327 (Tex. 1984) (“[I]n

order to ascertain the entire agreement between contracting parties, separate

documents executed at the same time, for the same purpose, and in the course of

the same transaction are to be construed together.”). In addition, “the rule in Texas

is that the mortgage follows the note,” therefore a party who owns or holds the

note is entitled to foreclose on property even in the absence of a valid assignment.

See EverBank, N.A. v. Seedergy Ventures, Inc., 499 S.W.3d 534, 541 (Tex. App.—

Houston [14th Dist.] 2016, no pet.) (citing Kiggundu v. Mortg. Elec. Registration

Sys. Inc., 469 Fed. App’x 330, 332 (5th Cir. 2012) (“It was sufficient for the Bank

of New York to establish that it was in possession of the note; it was not required

to show that the deed of trust had been assigned to it.”), and Antony v. United

Midwest Sav. Bank, No. H–15–1062, 2016 WL 914975, at *3 (S.D. Tex. Mar. 10,

                                          13
2016) (mem. op.) (“Even if the assignment of the Deed of Trust from MERS to

Flagstar was void, the record shows that Flagstar was the holder of the Note at

foreclosure and had standing to foreclose on that basis.”)).

IV.   Issues related to standing and sufficiency of summary judgment proof

      The first two issues challenge AmCap’s standing to sue for breach of the

Note and for judicial foreclosure or to invoke the power of sale in a nonjudicial

foreclosure. Because AmCap’s uncontroverted summary judgment proof

demonstrates that it was the owner and holder of the Note, we conclude that

AmCap had standing to sue for breach of the Note and for judicial foreclosure.

Because AmCap meets the definition of a lender and mortgage servicer, and under

the express terms of the deed of trust, AmCap alternatively had standing to pursue

nonjudicial foreclosure.

      A.     AmCap has standing to sue for breach of the Note.

      “To recover on a debt due under a promissory note, a lender must establish

that the note in question exists, the debtor executed the note, the lender is the

holder or owner of the note, and a certain balance is due and owing on the note.”

Martin v. New Century Mortg. Co., 377 S.W.3d 79, 84 (Tex. App.—Houston [1st

Dist.] 2012, no pet.); Wells Fargo Bank, N.A. v. Ballestas, 355 S.W.3d 187, 191

(Tex. App.—Houston [1st Dist.] 2011, no pet.) (quoting Cadle Co. v. Regency

Homes, Inc., 21 S.W.3d 670, 674 (Tex. App.—Austin 2000, pet. denied)); Austin v.

                                         14
Countrywide Homes Loans, 261 S.W.3d 68, 72 (Tex. App.—Houston [1st Dist.]

2008, pet. denied); Leavings v. Mills, 175 S.W.3d 301, 309 (Tex. App.—Houston

[1st Dist.] 2004, no pet.). “Ownership of the note is an essential element of the

right to collect amounts due on it.” Martin, 377 S.W.3d at 84; see Wells Fargo,

355 S.W.3d at 191.

      A true and correct copy of a note accompanied by sworn testimony proving

ownership and possession of the instrument establishes a plaintiff’s status as the

owner and holder of the note, absent controverting evidence. See Life Ins. Co. of

Va. v. Gar-Dal, Inc., 570 S.W.2d 378, 380–81 (Tex. 1978); Mandarino v.

Sherwood Lane Invs., LLC, No. 01-15-00192-CV, 2016 WL 4034568, at *3 (Tex.

App.—Houston [1st Dist.] July 26, 2016, no pet.) (mem. op.); see also Comerica

Bank v. Progressive Trade Enters., Inc., 544 S.W.3d 459, 463 (Tex. App.—

Houston [14th Dist.] 2018, no pet.). “Further, when one alleged to be the maker of

a note does not deny the genuineness of his signature on the note, he is established

as the maker of the note.” Comerica Bank, 544 S.W.3d at 463–64.

      AmCap attached a copy of the Note and an affidavit from Amanda Avila,

who averred that she was the Vice President of Capital Markets for AmCap and a

custodian of its records. Avila further averred: “A true and correct copy of the Note

is attached as Exhibit A to this Affidavit. AmCap is the current owner of the Note

and has the Note in its possession.” The Note identifies AmCap as the original

                                         15
lender. The Montoyas did not proffer any controverting summary judgment

evidence. In the absence of controverting proof, we conclude that AmCap was the

owner and holder of the Note and, therefore, had standing to sue for breach of the

Note. See Martin, 377 S.W.3d at 84–85; Ballestas, 355 S.W.3d at 191.

      B.     AmCap has standing to sue for judicial foreclosure.

      The general rule in Texas is that a party seeking to foreclose on real property

secured by a security instrument with a power of sale has the option either to sell

the property in a nonjudicial foreclosure in accordance with the terms of the deed

of trust or to bring a judicial foreclosure action. See Bonilla v. Roberson, 918

S.W.2d 17, 21 (Tex. App.—Corpus Christi 1996, no writ) (“A foreclosure sale

may be instituted either by a judgment of the court establishing the debt and fixing

the lien or by a valid exercise of a power contained in a deed of trust.”); see also

Phillips v. Charles Schreiner Bank, 894 F.2d 127, 129 n.1 (5th Cir. 1990) (“Texas

law allows a mortgagee either to sell property in a non-judicial foreclosure

pursuant to powers expressly granted in a deed of trust, Tex. Prop. Code § 51.002,

or to bring a judicial foreclosure action.”).6

      Texas Rule of Civil Procedure 309 (“In Foreclosure Proceedings”) provides

the basic rule for judicial foreclosure judgments:

6
      An exception, which does not apply in this case, arises when the loan being
      foreclosed is a home equity loan. See TEX. CONST., art. XVI, § 50(a)(6)(D); TEX.
      R. CIV. P. 735, 736.
                                           16
      Judgments for the foreclosure of mortgages and other liens shall be
      that the plaintiff recover his debt, damages and costs, with a
      foreclosure of the plaintiff’s lien on the property subject thereto, and,
      except in judgments against executors, administrators and guardians,
      that an order of sale shall issue to any sheriff or any constable within
      the State of Texas, directing him to seize and sell the same as under
      execution, in satisfaction of the judgment; and, if the property cannot
      be found, or if the proceeds of such sale be insufficient to satisfy the
      judgment, then to take the money or any balance thereof remaining
      unpaid, out of any other property of the defendant, as in case of
      ordinary executions.

TEX. R. CIV. P. 309. “Rule 309’s requirement that the judgment allow the

foreclosing party to recover his debt dictates that the party seeking judicial

foreclosure establishes the existence of the debt and that he is entitled to recover

it.” De La Garza v. Bank of N.Y. Mellon, No. 02-17-00427-CV, 2018 WL

5725250, at *7 (Tex. App.—Fort Worth Nov. 1, 2018, no pet.) (mem. op.).

      To obtain a judicial foreclosure, a party must prove: (1) the existence of a

financial obligation secured by real property, (2) a default on the loan, and (3) that

the property subject to the lien is the same property the party seeks to foreclose.

See Maldonado v. CitiMortgage, Inc., 676 F. App’x 282, 284 (5th Cir. 2017);

Rinard v. Bank of Am., 349 S.W.3d 148, 152 (Tex. App.—El Paso 2011, no pet.)

(“To obtain a judicial foreclosure, Bank of America was required to demonstrate

that the note was a purchase money note, that some part of the purchase money is

due and unpaid, and that the property subject to the lien is the same property on

which it seeks to enforce the lien.”); see also De La Garza, 2018 WL 5725250, at

                                         17
*7 (“Accordingly, to be entitled to summary judgment for a judicial foreclosure

under rule 309, a movant must prove (1) the existence of and some privity to a

financial obligation—i.e., the note; (2) the existence of and some privity to the lien

securing it—i.e., the deed of trust or security instrument; and (3) a default on the

loan.”);   e.g.,   17   William   V.    Dorsaneo    III   et   al.,   Texas   Litigation

Guide § 255.03[3][a] (2008) (“Judicial foreclosure is initiated when the creditor

files an action alleging the existence of the indebtedness, default by the debtor, and

the existence of the deed of trust or vendor’s lien.”).

      The summary judgment evidence showed that AmCap had standing to seek

judicial foreclosure. First, we have already concluded that the summary judgment

evidence showed that AmCap was the owner and holder of the note. As the holder

of the Note, and in light of the uncontroverted summary judgment evidence of

default, there can be no question that a case or controversy that can be resolved by

the court exists between AmCap and the Montoyas. See Heckman, 369 S.W.3d at

154. In addition, the summary judgment evidence includes the Note, deed of trust,

assignment, and notices of default sent to the Montoyas, which refer to the same

real property, demonstrating that the property subject to the lien is the same

property upon which AmCap seeks to foreclose.

      The Note expressly states that it is a “uniform secured note,” and it states

that the deed of trust signed on February 2, 2017, “protects the Note Holder from

                                          18
possible losses” that might arise from the borrower’s default. The Note also

expressly provides that if, upon notice of acceleration, the borrower fails to pay all

sums due, the “Lender may invoke any remedies permitted by this Security

Instrument without further notice or demand on Borrower.” The deed of trust

identifies “Lender” as AmCap, who was the original lender, and includes in the

definition of “lender” “any holder of the Note who is entitled to receive payments

under the Note.

      The Montoyas argue that there is a lack of privity between AmCap and the

deed of trust due to the inclusion of MERS as nominee for AmCap and its

successors and assigns. But the summary judgment evidence plainly demonstrates

that AmCap was the original lender, AmCap was the holder and owner of the Note

at all times relevant to this suit, that AmCap was named in the deed of trust as

Lender, and that the deed of trust expressly authorized the Lender to “invoke the

power of sale and any other remedies permitted by applicable law.”

      We conclude that (1) AmCap showed a sufficient connection to the deed of

trust, (2) the unrefuted summary judgment evidence (a) establishes AmCap’s

standing to pursue judicial foreclosure and (b) was sufficient to prove the elements

necessary to prevail on summary judgment. See Maldonado, 676 F. App’x at 284;

Rinard, 349 S.W.3d at 152; see also EverBank, 499 S.W.3d at 541; Kiggundu, 469

                                         19
F. App’x at 331–32; Antony, 2016 WL 914975, at *3. We overrule the Montoyas’

second and third issues. See TEX. R. APP. P. 47.1.

         C.    AmCap had standing to pursue nonjudicial foreclosure in the
               alternative.

         In their fourth issue, the Montoyas argue that AmCap offered “no evidence

of whom [MERS] was acting as nominee for in assigning the Deed of Trust to

AmCap.” We rejected a nearly identical argument in Ybarra v. Ameripro Funding,

Inc., No. 01-17-00224-CV, 2018 WL 2976126, at *6 (Tex. App.—Houston [1st

Dist.] June 14, 2018, pet. denied) (mem. op.), and for the same reasons, we reject it

here.7

7
         In Ybarra v. Ameripro Funding, Inc., No. 01-17-00224-CV, 2018 WL 2976126, at
         *6 (Tex. App.—Houston [1st Dist.] June 14, 2018, pet. denied) (mem. op.), the
         appellants were represented by the same attorney who represents the Montoyas in
         this appeal. Our opinion stated:

               Finally, the Ybarras challenge the assignment from MERS to U.S.
               Bank (as Trustee for the 2005–H Trust) as “completely unclear”
               because it failed to identify “for whom MERS [was] acting i[n] its
               capacity as the ‘nominee’ for Ameripro or [Ameripro’s] successors
               or assigns.” The Ybarras have presented no evidence or authority–
               nor have we found any–to support their position that MERS's
               assignment here was void ab initio on this basis.

               Federal courts addressing similar arguments have rejected them. See
               e.g., Bynane v. Bank of N.Y. Mellon, No. H-15-2901, 2015 WL
               8764272 at *5 (S.D. Tex. Dec. 15, 2015) (“Plaintiff argues that
               because MERS held the Note only as a nominee, and because the
               Assignment does not identify for whom MERS was a nominee,
               Plaintiff has validly pleaded that the Assignment in this case is
               void ab initio for lack of the essential elements of a contract, that is
               two identifiable real parties in interest. Plaintiff’s argument is
                                              20
      The Montoyas also argue that AmCap’s evidence did not prove that it was a

mortgagee or mortgage servicer as defined by the Texas Property Code for the

purpose of nonjudicial foreclosure. We disagree.

      Chapter 51 of the Texas Property Code governs nonjudicial foreclosures. See

TEX. PROP. CODE §§ 51.0001–.016. Under the statute, either a mortgagee or a

mortgage servicer may invoke the power of sale conferred by a deed of trust. Id.

§§ 51.002, 51.0025. The Property Code defines a “mortgagee” as “(A) the grantee,

beneficiary, owner, or holder of a security instrument; (B) a book entry system; or

(C) if the security interest has been assigned of record, the last person to whom the

security interest has been assigned of record.” Id. § 51.0001(4). A “mortgage

servicer” is “the last person to whom a mortgagor has been instructed by the

current mortgagee to send payments for the debt secured by a security instrument.

A mortgagee may be the mortgage servicer.” Id. § 51.0001(3).

      The uncontroverted summary judgment evidence includes the Note, the deed

of trust, and the assignment. The summary judgment evidence also demonstrates

that AmCap is the last party to whom the security instrument was assigned of

             without merit, factually and legally.”) (internal citations
             omitted); Morgan v. Gov’t Nat’l Mortg. Ass’n, No. H-15-1803, 2016
             WL 3058301, at *4 (S.D. Tex. May 31, 2016) (“[T]he deed of trust
             indicates that MERS could exercise the rights granted to the lender
             by the deed of trust. Morgan agreed to this when he signed the deed
             of trust. There was no need to identify the lender in the
             assignment.”) (internal citations omitted).

      Ybarra, 2018 WL 2976126, at *6 (footnotes omitted).
                                          21
record. Thus, AmCap is the mortgagee under the Property Code. See id.

§ 51.0001(4). The original Note and deed of trust instruct the Montoyas to send

payments for the debt to AmCap. Thus, AmCap is also a mortgage servicer under

the Property Code. See id. § 51.0001(3). The summary judgment evidence shows

that AmCap had standing to pursue nonjudicial foreclosure under the Property

Code.

          The contractual language of the Note and deed of trust also demonstrate that

AmCap had standing to invoke the power of sale in a nonjudicial foreclosure. The

deed of trust identifies the “Lender” as “any holder of the Note who is entitled to

receive payments under the Note.” Avila’s unchallenged affidavit states that

“AmCap is the current owner of the Note and has the Note in its possession.” Thus,

AmCap was the holder of the Note and party entitled to receive payments under it.

The express language of the Note and deed of trust authorize the lender to exercise

the power of sale in the deed of trust. Clerk’s R. 24 (“If Lender invokes the power

of sale . . . .); see Stanley v. Wells Fargo Bank, N.A., No. 03-14-00376-CV, 2015

WL 5096534, at *3 (Tex. App.—Austin Aug. 25, 2015, pet. denied) (mem. op.)

(holding that bank seeking to foreclose met the definition of “lender” in deed of

trust and that deed of trust expressly granted lender the right to enforce the deed of

trust).

                                           22
      Because we conclude that AmCap had standing to invoke nonjudicial

foreclosure, we overrule the fourth issue.

V.    Judgment and election of remedies

      In their fifth issue, the Montoyas argue that the trial court erred by rendering

judgment allowing AmCap to pursue both judicial and nonjudicial foreclosure.

However, the judgment actually provided only that AmCap was entitled to invoke

nonjudicial foreclosure or “in the alternative and at [AmCap’s] election” it could

proceed to a judicial foreclosure with a sheriff’s sale. We conclude that the

judgment, therefore, was disjunctive and not conjunctive.

      “An election of remedies is the act of choosing between two or more

inconsistent but coexistent modes of procedure and relief allowed by law on the

same state of facts.” Krobar Drilling, L.L.C. v. Ormiston, 426 S.W.3d 107, 113

(Tex. App.—Houston [1st Dist.] 2012, pet. denied). “When a party thus chooses to

exercise one of them he abandons his right to exercise the other remedy and is

precluded from resorting to it.” Id. (citing Custom Leasing, Inc. v. Tex. Bank & Tr.

Co. of Dall., 491 S.W.2d 869, 871 (Tex. 1973), and City of Glenn Heights v.

Sheffield Dev. Co., 55 S.W.3d 158, 165 (Tex. App.—Dallas 2001, pet. denied)).

The election of remedies doctrine may bar relief “when (1) one has made an

informed choice (2) between two or more remedies, rights, or states of facts

(3) which are so inconsistent as to (4) constitute manifest injustice.” Bocanegra v.

                                         23
Aetna Life Ins. Co., 605 S.W.2d 848, 851 (Tex. 1980). “An election between

remedies occurs, at the latest, when a party proceeds to final judgment on one

claim with knowledge of an inconsistent claim or remedy.” Krobar Drilling, 426

S.W.3d at 113. “Generally, it is the obtaining of a judgment on one theory or state

of facts that precludes the ability to pursue other inconsistent remedies.” Id.

      More recently, courts have found that judicial and nonjudicial foreclosure

are not such inconsistent remedies that a summary judgment movant must elect

between them. E.g., Mitchell v. Ocwen Loan Servicing, No. 4:15-CV-668-O, 2018

WL 10335466, at *2 (N.D. Tex. Feb. 22, 2018) (remedies not inconsistent);

Metcalf v. Wilmington Sav. Fund Soc’y, FSB, No. 03-16-00795-CV, 2017 WL

1228886, at *4 (Tex. App.—Austin Mar. 29, 2017, pet. denied) (mem. op.)

(finding it appropriate to ask for foreclosure by trustee’s sale and, alternatively, by

sheriff’s sale); see, e.g., Smith v. Wells Fargo Bank N.A., No. 3:19-CV-02406-X-

BT (N.D. Tex. Aug. 18, 2021), report and recommendation adopted sub nom.

Smith v. Wilson, No. 3:19-CV-02406-X-BT (N.D. Tex. Sept. 2, 2021).

      The Montoyas rely on a line of authorities that has held that when a creditor

prosecutes a judicial foreclosure action to judgment, it has exercised an election

between the two inconsistent remedies of judicial foreclosure and nonjudicial

foreclosure by exercise of the power of sale in a security instrument. See, e.g., In re

Gayle, 189 B.R. 914, 916 (Bankr. S.D. Tex. 1995) (“An election of remedies must

                                          24
be made between judicial foreclosure and nonjudicial foreclosure.”); In re Phillips,

124 B.R. 712, 718 n.13 (Bankr. W.D. Tex. 1991) (“Judicial foreclosure and

foreclosure under the power of sale in a deed of trust are remedies which cannot be

concurrently prosecuted.”); Coffman v. Brannen, 50 S.W.2d 913, 915 (Tex. App.—

Amarillo 1932, no writ) (institution of judicial foreclosure constitutes election of

remedies that precludes exercise of nonjudicial foreclosure); Gandy v. Cameron

State Bank, 2 S.W.2d 971, 973 (Tex. Civ. App.—Austin 1927, writ ref’d) (“While

there is some diversity of view among the decisions of other states upon the

subject, the holding in this state is that judicial foreclosure and foreclosure under a

power are remedies which cannot be prosecuted concurrently, and institution of the

former constitutes an election of remedies and precludes subsequent resort to the

latter.”).

       We agree, and we overrule the Montoyas’ fifth issue.

                                     Conclusion

       We affirm the judgment of the trial court.

                                               Peter Kelly
                                               Justice

Panel consists of Chief Justice Radack and Justices Kelly and Landau.

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