Court Opinion

ID: 3130656
Source: CourtListenerOpinion
Date Created: 2015-10-16 16:50:55.232774+00
Date Added: 2024-06-11T11:52:12.252822
License: Public Domain

COURT OF APPEALS
                          SECOND DISTRICT OF TEXAS
                               FORT WORTH

                               NO. 2-09-052-CV

LESLIE CLINT SLAY                                                APPELLANT

                                        V.

NATIONSTAR MORTGAGE, L.L.C.,                                       APPELLEE
F/K/A CENTEX HOME EQUITY
COMPANY, L.L.C.

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            FROM THE 415TH DISTRICT COURT OF PARKER COUNTY

                                    ------------

                         MEMORANDUM OPINION 1

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I. Introduction

      Appellant Leslie Clint Slay (“Slay”) appeals a summary judgment in favor

of Appellee Nationstar Mortgage, L.L.C. f/k/a Centex Home Equity Company,

L.L.C. (“Nationstar”). In seven points, Slay contends the trial court erred by

      1
           See Tex. R. App. P. 47.4.
granting summary judgment for Nationstar because Nationstar’s pleading

amendment was untimely, the statute of limitations bars Nationstar’s claims,

Slay cannot have personal liability relating to a home equity loan, and the

arbitrator exceeded his authority and displayed manifest disregard for the law.

We affirm.

II. Background

      Slay obtained a home equity loan from Nationstar on October 23, 2001.

Slay defaulted on the loan, and Nationstar gave notice of intent to accelerate.

Nationstar thereafter accelerated the loan on August 5, 2003. That same day,

Nationstar filed an application for foreclosure of the lien pursuant to Texas Rule

of Civil Procedure 736. Slay responded to Nationstar’s foreclosure application

by filing a lawsuit against Nationstar and alleging the loan and lien were void.

Nationstar removed Slay’s lawsuit to federal court and successfully moved to

compel arbitration, but Slay did not initiate arbitration. In November 2004, Slay

filed a new lawsuit against Nationstar alleging the loan and lien were void.

      Nationstar ultimately initiated an arbitration against Slay on August 23,

2006.    Nationstar sought recovery of its attorneys’ fees and asked for

declarations that, among other things, Slay had no defenses to Nationstar’s

foreclosure action. Slay answered and counter-claimed in the arbitration.

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      On March 29, 2007, the arbitrator entered an award finding, among other

things, that the loan, note, and security instrument did not violate the Texas

constitution and that Slay was not entitled to recover on any of his claims. The

arbitrator also awarded $36,054.85 in attorneys’ fees and costs to Nationstar

and ordered that Slay bear personal liability for the award of attorneys’ fees and

costs. Slay did not file an application or motion to vacate, modify, or correct

the arbitrator’s award.

      On July 11, 2007, Nationstar filed suit to enforce the arbitrator’s award.

Nationstar’s original petition sought to enforce the arbitrator’s award and asked

for non-judicial foreclosure of the loan on Slay’s homestead. On August 15,

2007, Slay counter-claimed and asked to have the arbitrator’s award

disregarded. Nationstar filed a motion for summary judgment in May 2008, and

the trial court granted summary judgment on June 20, 2008, for a judicial

foreclosure. On July 3, 2008, Nationstar sought and was granted leave to

amend its pleadings to seek judicial foreclosure and filed a supplement to its

motion for summary judgment seeking judicial foreclosure.         The trial court

signed a second summary judgment on July 9, 2008, that expressly stated that

it “replace[d] and supercede[d] any prior summary judgment order.”

      Slay filed a motion to vacate the July 9, 2008 summary judgment order

on August 11, 2008. The trial court granted Slay’s motion on October 14,

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2008, and vacated both the June 20, 2008 and July 9, 2008 orders granting

summary judgment to Nationstar. 2 On October 20, 2008, relying on its July 3,

2008 amended petition, Nationstar filed an amended motion for summary

judgment seeking judgment for a judicial foreclosure.         After a hearing on

Nationstar’s amended motion, the trial court signed a final summary judgment

for Nationstar on November 20, 2008.

III. Pleading Amendments and Trial by Consent

      In his first, second, and third points, and in part of his fifth point, Slay

complains of Nationstar’s July 2008 pleading amendments. Specifically, Slay

contends the trial court should not have granted Nationstar leave to amend its

pleadings because (1) the trial court had already rendered judgment in June

2008, (2) the amendment was untimely and prejudicial to Slay, (3) there was

no trial by consent of a claim for judicial foreclosure, and (4) granting leave was

“contrary to established summary judgment procedure.”

      Each of Slay’s arguments relate to the June 20 and July 9, 2008

summary judgments that the trial court vacated on October 14, 2008. But “[a]

      2
        Slay’s motion to vacate sought to vacate only the July 9, 2008 order
and did not seek to vacate the June 20, 2008 order. However, the trial court’s
October 14, 2008 order states, in part, that “since the July 9, 2008 Summary
Judgment was structured as a replacement of this Court’s Summary Judgment
of June 20, 2008, such earlier summary judgment should also be vacated.
Therefore, the Court sua sponte VACATES the Summary Judgment of June 20,
2008.”

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judgment that has been vacated has no legal effect” and “the matter stands

precisely as if there had been no judgment.” Pringle v. Moon, 158 S.W.3d
607, 610 (Tex. App.—Fort Worth 2005, no pet.); see also In re Hidalgo, 279
S.W.3d 456, 461 (Tex. App.—Dallas 2009, pet. filed) (“An order setting aside

or vacating a judgment returns the parties to the position they occupied before

rendition of the judgment and leaves the case as if no judgment had been

rendered.”). Thus, Slay’s complaints concerning the trial court’s grant of leave

to Nationstar to amend its pleadings are moot. See In re Gunnstaks, No. 05-

07-01289-CV, 2010 WL 22795, at *3 (Tex. App.—Dallas Jan. 6, 2010, no

pet. h.) (mem. op.) (dismissing as moot an appeal from a sanctions order

previously vacated by the trial court).

      In the remainder of his fifth point, Slay cites rule 67 of the rules of civil

procedure and contends there was no trial by consent of a judicial foreclosure

claim in the November 20, 2008 summary judgment proceeding. 3 However,

Nationstar filed its amended petition and motion for leave on July 3, 2008, and

the trial court granted leave for Nationstar to amend its pleadings on July 9,

2008. Therefore, Nationstar’s pleadings included a claim for judicial foreclosure

at the time of the November 20, 2008 summary judgment, and rule 67 does

      3
         Rule 67 states: “When issues not raised by the pleadings are tried by
express or implied consent of the parties, they shall be treated in all respects
as if they had been raised in the pleadings.” Tex. R. Civ. P. 67.

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not apply. See Tex. R. Civ. P. 67. We overrule Slay’s first, second, third, and

fifth points.

IV. Statute of Limitations

      Slay argues in his fourth point that the trial court erred by granting

judgment to Nationstar because the statute of limitations bars Nationstar’s

foreclosure claim. Citing section 16.035 of the civil practice and remedies

code, Slay argues any foreclosure must have occurred within four years of

August 5, 2003, the date upon which Nationstar accelerated the loan. Slay

concedes that Nationstar filed suit on July 11, 2007, but he contends that “no

lawful non-judicial foreclosure could be effected” after August 5, 2007, and

that “a judicial foreclosure should be barred if sought after, at the very latest,

August 5, 2007.”

      Section 16.035(a) of the civil practice and remedies code states: “A

person must bring suit for the recovery of real property under a real property

lien or the foreclosure of a real property lien not later than four years after the

day the cause of action accrues.”           Tex. Civ. Prac. & Rem. Code Ann.

§ 16.035(a) (Vernon 2002). Section 16.035(d) provides that the real property

lien becomes void on the expiration of the four-year limitations period.        Id.

§ 16.035(d). If, as here, a loan secured by real property contains an optional

acceleration clause, “the action accrues only when the holder actually exercises

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its option to accelerate.”   Holy Cross Church of God in Christ v. Wolf, 44
S.W.3d 562, 566 (Tex. 2001).

      Nationstar accelerated the note on August 5, 2003, and Nationstar filed

its lawsuit to enforce the arbitrator’s award and to obtain non-judicial

foreclosure on July 11, 2007. Therefore, Nationstar filed suit within four years

of acceleration. The plain language of section 16.035(a) does not require that

the actual foreclosure occur within the four-year limitation period, but rather,

requires only that the party seeking foreclosure “bring suit . . . not later than

four years after the day the cause of action accrues.” Tex. Civ. Prac. & Rem.

Code Ann. § 16.035(a).        Furthermore, because Nationstar’s July 2008

amended pleading, which asserted a claim for judicial foreclosure, was not

“wholly based on a new, distinct, or different transaction or occurrence,”

Nationstar’s July 2008 amended pleading related back to Nationstar’s timely-

filed original petition. 4 Id. § 16.068 (Vernon 2008) (providing that an amended

or supplemental pleading relates back to a timely-filed petition unless the

amended or supplemental pleading “is wholly based on a new, distinct, or

different transaction or occurrence”); see also Brewster v. Columbia Med. Ctr.

of McKinney Subsidiary, L.P., 269 S.W.3d 314, 317–18 (Tex. App.—Dallas

      4
        Nationstar sought foreclosure of the same lien against the same real
property in both its July 2007 original petition and its July 2008 amended
petition.

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2008, no pet.) (stating, for purposes of section 16.068, that “a ‘transaction’

is defined as a set of facts that gives rise to the cause of action premised

thereon”). We overrule Slay’s fourth point.

V. The Arbitrator’s Award

      Slay argues in his sixth and seventh points that the trial court erred by

granting summary judgment for Nationstar because he cannot be personally

liable for Nationstar’s attorneys’ fees and costs since the loan is a home equity

loan and because the arbitrator exceeded his authority and displayed manifest

disregard for the law. 5 Nationstar responds that Slay is barred from asserting

this argument because he did not timely file an application or motion to vacate,

modify, or correct the arbitrator’s award. We agree with Nationstar.

      Nationstar asserts the arbitration agreement in this case is governed by

the Federal Arbitration Act, but we need not decide whether the Federal

      5
        Specifically, Slay contends the arbitrator’s award of $36,054.85 in
attorneys’ fees and costs to Nationstar violates article XVI section 50(a)(6)(C)
of the Texas constitution because the award makes him personally liable for
damages relating to a home equity loan. Article XVI section 50(a)(6)(C) states:

      (a) The homestead of a family, or of a single adult person, shall be,
      and is hereby protected from forced sale, for the payment of all
      debts except for: (6) an extension of credit that: (C) is without
      recourse for personal liability against each owner and the spouse
      of each owner, unless the owner or spouse obtained the extension
      of credit by actual fraud; . . .

Tex. Const. art. XVI § 50(a)(6)(C).

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Arbitration Act or the Texas Arbitration Act controls. Both acts require a party

to file a motion or application to vacate, modify, or correct the arbitrator’s

award within a set time after the award is filed or delivered (three months under

the federal act and ninety days under the Texas act).       See 9 U.S.C. § 12

(2006); Tex. Civ. Prac. & Rem. Code Ann. § 171.088(b) (Vernon 2005). A

party who fails to timely seek to vacate, modify, or correct an arbitrator’s

award forfeits his right to seek judicial review of the award. See Mauldin v.

MBNA Am. Bank, N.A., No. 02-07-00208-CV, 2008 WL 4779614, at *3 (Tex.

App.—Fort Worth 2008, no pet.) (mem. op.); La. Natural Gas Pipeline, Inc. v.

Bludworth Bond Shipyard, Inc., 875 S.W.2d 458, 462 (Tex. App.—Houston

[1st Dist.] 1994, writ denied).

      In this case, the arbitrator’s award is dated March 29, 2007.         Even

assuming Slay’s original answer and counterclaim constituted a motion to

vacate, modify, or correct the arbitrator’s award, Slay did not file his original

answer and counterclaim until August 15, 2007. Thus, Slay did not seek to

vacate, modify, or correct the arbitrator’s award within three months or ninety

days of the award and forfeited his right to seek judicial review of the

arbitrator’s award.   Mauldin, 2008 WL 4779614, at *3; La. Natural Gas

Pipeline, Inc., 875 S.W.2d at 462.      We overrule Slay’s sixth and seventh

points.

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VI. Conclusion

     Having overruled each of Slay’s seven points, we affirm the trial court’s

judgment.

                                          ANNE GARDNER
                                          JUSTICE

PANEL:      DAUPHINOT, GARDNER, and MCCOY, JJ.

DELIVERED: February 25, 2010

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