Court Opinion

ID: 5129727
Source: CourtListenerOpinion
Date Created: 2021-11-29 08:18:16.467007+00
Date Added: 2024-06-11T08:23:13.483136
License: Public Domain

Affirmed and Memorandum Opinion filed November 23, 2021.

                                In The

                 Fourteenth Court of Appeals

                         NO. 14-20-00319-CV

                   DHI HOLDINGS, LLP, Appellant

                                  V.
THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL
ASSOCIATION F/K/A THE BANK OF NEW YORK TRUST COMPANY,
         N.A. AS SUCCESSOR TO JP MORGAN CHASE
   BANK, AS TRUSTEE FOR RESIDENTIAL ASSET MORTGAGE
 PRODUCTS, INC., MORTGAGE ASSET-BACKED PASS-THROUGH
CERTIFICATES SERIES 2004-RS8; OCWEN LOAN SERVICING, LLC;
   MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.;
  NATIONSTAR MORTGAGE LLC D/B/A MR. COOPER; U.S. BANK
NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY BUT
  SOLELY AS TRUSTEE OF THE NRZ PASS-THROUGH TRUST X,
                         Appellees

                On Appeal from the 189th District Court
                        Harris County, Texas
                  Trial Court Cause No. 2017-08009

                     MEMORANDUM OPINION
         Appellant DHI Holdings, LLP (“DHI”) appeals from the granting of the
summary judgment filed by appellees, The Bank of New York Mellon Trust
Company, National Association f/k/a The Bank of New York Trust Company,
N.A. as successor to JP Morgan Chase Bank, as trustee for Residential Asset
Mortgage Products, Inc., Mortgage Asset-Backed Pass-Through Certificates Series
2004-RS8; Ocwen Loan Servicing, LLC; Mortgage Electronic Registration
Systems, Inc.; Nationstar Mortgage LLC d/b/a Mr. Cooper; U.S. Bank National
Association, not in its individual capacity but solely as trustee of the NRZ Pass-
Through Trust X, and the denial of its own motion for summary judgment.
Concluding appellees met their summary judgment burden and DHI did not, we
affirm the trial court’s final judgment.

                                          BACKGROUND

         In 2004 Donna Campbell, the original borrower, obtained a purchase-money
mortgage loan from Homecomings Financial Network, Inc. to purchase a property
located in Humble, Texas.1 Campbell executed a deed of trust encumbering the
real property in order to secure repayment of the loan.                  Mortgage Electronic
Registration Systems, Inc. (“MERS”) was appointed as the original beneficiary of
the 2004 Deed of Trust. It is undisputed that the 2004 Deed of Trust was recorded
in the Harris County property records soon after Campbell executed the loan
documents. The 2004 Deed of Trust contains an optional acceleration clause
entitling the lender and its assigns to accelerate the loan and call the entire balance
due in the event that the borrower defaults.

         In June 2012, MERS assigned the 2004 Deed of Trust to Bank of New York
(“BONY”). BONY subsequently assigned the 2004 Deed of Trust to U.S. Bank.

         1
             Some documents in the appellate record describe the property’s location as Kingwood,
Texas.

                                                  2
Nationstar has serviced the loan since February 2018 and Ocwen serviced the loan
prior to that time.

      Campbell failed to make required monthly payments on the loan and she
failed to timely cure her default. As a result, in late 2012, Ocwen, the servicer of
the loan at the time, sent Campbell notice of Ocwen’s intent to accelerate the loan
balance secured by the 2004 Deed of Trust. The record next indicates that Ocwen
accelerated the entire balance of the loan in 2014. No foreclosure occurred as a
result of the 2014 acceleration possibly because Ocwen agreed to place the loan
into a Trial Modification Plan in October of that year. The October 2014 account
statement informed Campbell:

      Please note that your loan has been accelerated and you are and will
      continue to be legally obligated to pay the accelerated amount.
      However, because you have entered into a Trial Modification Plan,
      Ocwen has agreed to accept the Trial Modification Plan Payment
      during the term of the Trial Modification Plan. Failure to make all
      Trial Modification Plan Payments may prevent you from receiving a
      permanent modification.

      On June 17, 2015, Ocwen sent a new notice of default to Campbell. The
notice advised Campbell that she was in default on her mortgage loan, that
“[f]ailure to bring your account current will result in our election to exercise our
right to foreclose on your property,” and that “[u]pon acceleration, your total
obligation will be immediately due and payable without further demand.” The
notice advised Campbell to pay $46,922.65, an amount less than the total amount
of the loan, on or before July 24, 2015. The notice further informed Campbell that
“[i]f your loan has already been accelerated and foreclosure proceedings already
begun, we will continue the foreclosure action if possible.”

      After Campbell failed to cure the default, Ocwen accelerated the entire
balance of the note on April 9, 2016. The April 9, 2016 notice of acceleration

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specifically referenced the June 17, 2015 notice of default:

      You have previously been advised by letter dated 06/17/2015, of
      certain defaults under the Note or Deed of Trust and informed of the
      intent to accelerate the maturity of the Note if defaults therein were
      not cured within the specified time period. Because of defaults in
      complying with the terms and provisions of the Note and Deed of
      Trust, notice is hereby given that the present legal holder of the Note
      HAS ACCELERATED THE MATURITY DATE OF THE NOTE.
      As result of such acceleration, the entire unpaid principal balance of
      the Note and all accrued interest and all other sums lawfully owing on
      the Note or under the Deed of Trust are now due and payable and
      demand is hereby made for the immediate payment in full of all such
      sums. As of 04/15/2016, the total amount due is $160,140.09.
(emphasis in original) Subsequently, Ocwen set the foreclosure sale of the Humble
property for February 7, 2017.

      While these events were unfolding, Elm Grove Village Community
Association (“Elm Grove”) assessments on the Humble property were not paid.
Elm Grove filed suit and the county court at law issued a decree of sale. The
county court at law ordered that Elm Grove “have FORECLOSURE of its lien
created by the provisions of the Restrictions.” It further ordered any sheriff or
constable to “seize and sell the Premises the same as under execution, in
satisfaction of this Final Summary Judgment subject to any superior liens provided
for in the Restrictions or at law . . . .” In December 2015, the Harris County
Precinct 4 Constable’s Office conducted the sale of the property. DHI obtained
Elm Grove’s interest in the Humble property at that sale for $6,000.00. Elm Grove
subsequently recorded a deed memorializing DHI’s purchase of the Humble
property at the constable’s sale.

       DHI filed suit against appellees asserting numerous causes of action
including (1) quiet title; (2) violation of section 12.002 of the Texas Civil Practice
and Remedies Code; (3) negligence per se; (4) gross negligence; (5) fraud; (6)
                                          4
seeking an accounting of Campbell’s loan; and (7) several requests for declaratory
relief that would have prevented enforcement of the 2004 Deed of Trust. The
substance of DHI’s claims was that appellees had accelerated the loan in 2014, had
then not foreclosed on the property, and the statute of limitations had expired four
years later rendering their lien void. DHI moved for partial summary judgment on
that basis. The trial court denied DHI’s motion.

       Appellees eventually filed a motion for final summary judgment arguing that
DHI did not have standing to pursue its claims and also that its quiet title suit and
other claims failed as a matter of law because they had abandoned the 2014 loan
acceleration. The trial court granted appellees’ motion on all claims asserted by
DHI. DHI filed a motion for new trial, which the trial court denied. This appeal
followed.

                                          ANALYSIS

       DHI raises two issues in this appeal challenging the summary judgment only
on its quiet title cause of action. In its first issue, DHI challenges the trial court’s
order granting appellees’ motion for summary judgment. In its second issue, DHI
argues the trial court erred when it denied its own motion for partial summary
judgment asserting that limitations had expired rendering appellees’ lien void. In
both issues DHI argues the trial court erred because the summary judgment
evidence conclusively proved that appellees had accelerated the loan in 2014, that
appellees had not abandoned those accelerations, and the statute of limitations had
passed four years later rendering appellees’ lien void. Because both issues turn on
the same facts and law, we address them together.2

       2
         Appellees argue in their response brief that DHI does not have standing to challenge the
assignments of the 2004 Deed of Trust that occurred in this case. DHI, however, does not raise
an issue in this appeal challenging any of the assignments that occurred. We therefore need not
reach appellees’ standing arguments related to the assignments. To the extent appellees’
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I.     Standard of review and appliable law

       We review a trial court’s order granting a traditional summary judgment de
novo. Mid-Century Ins. Co. v. Ademaj, 243 S.W.3d 618, 621 (Tex. 2007). When
both parties move for summary judgment, each party bears the burden of
establishing that it is entitled to judgment as a matter of law. City of Garland v.
Dallas Morning News, 22 S.W.3d 351, 356 (Tex. 2000). When the trial court
grants one motion and denies the other, the appellate court reviews both motions
and determines all questions presented. Id. The reviewing court should then
render the judgment that the trial court should have rendered, or reverse and
remand if neither party met its summary judgment burden. Id.

       We consider all of the summary judgment evidence in the light most
favorable to the nonmovant, crediting evidence favorable to the nonmovant if a
reasonable factfinder could and disregarding contrary evidence unless a reasonable
factfinder could not. See Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex.
2006); Ron v. AirTran Airways, Inc., 397 S.W.3d 785, 788 (Tex. App.—Houston
[14th Dist.] 2013, no pet.). When a party with the burden of proof moves for
summary judgment on its claim, it must conclusively prove all essential elements
of its claim as a matter of law. Cullins v. Foster, 171 S.W.3d 521, 530 (Tex.
App.—Houston [14th Dist.] 2005, pet. denied).

       A secured lender must bring suit to foreclose on a real property lien “not
later than four years after the day the cause of action accrues.” Tex. Civ. Prac. &
Rem. Code § 16.035(a). As a general rule, the accrual date is the maturity date of

arguments can be construed as a challenge to DHI’s standing to pursue a quiet title cause of
action, we conclude that since DHI’s interest in the property would be affected if appellees
foreclose on the property, DHI has standing to pursue its claims raised in this appeal. See
Morlock, L.L.C. v. Nationstar Mortg., L.L.C., 447 S.W.3d 42, 45 (Tex. App.—Houston [14th
Dist.] 2014, pet. denied) (concluding plaintiff which acquired interest at a foreclosure sale had
standing to pursue cause of action seeking to remove deed of trust as a cloud on title).

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the note, rather than the date of a borrower’s default. See id. § 16.035(e). If, as
here, the security instrument contains an optional acceleration clause, the cause of
action accrues when the lender exercises its option to accelerate the maturity date
of the note. See Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 566
(Tex. 2001). Effective acceleration requires both notice of intent to accelerate and
notice of acceleration, and both notices must be clear and unequivocal. Id.

       Once a lender has accelerated the maturity date of the note, the lender can
restore the original maturity date—and thereby reset the running of limitations—by
abandoning the acceleration. Id. at 566–67. Abandonment is based on the concept
of waiver and requires proof that the party has an existing right, has actual
knowledge of the right, and intends to relinquish the right or engages in intentional
conduct inconsistent with the right. See Ulico Cas. Co. v. Allied Pilots Ass’n, 262
S.W.3d 773, 778 (Tex. 2008). “Intent is the critical element, and its manifestation
must be unequivocal.” Swoboda v. Ocwen Loan Servicing, LLC, 579 S.W.3d 628,
633 (Tex. App.—Houston [14th Dist.] 2019, no pet.).

       The best means of achieving an abandonment is through written notice of
rescission. Id. (citing Tex. Civ. Prac. & Rem. Code § 16.038(a) (providing for this
method)). This is not, however, the exclusive method. Id. (citing Tex. Civ. Prac.
& Rem. Code § 16.038(e)). Abandonment can also be accomplished through an
agreement between the parties, through other joint actions, or through unequivocal,
unilateral conduct of the lender. See id. at 633, 635–36. Whether a lender has
abandoned an acceleration is generally a question of fact, but when the facts are
admitted or clearly established, abandonment may be determined as a matter of
law. Swoboda, 579 S.W.3d at 633 (citing Holy Cross Church, 44 S.W.3d at 566–
67).

II.    Appellees established abandonment of the 2014 acceleration of the debt

                                         7
      as a matter of law.

      We turn first to DHI’s argument that an anti-waiver provision in the 2004
Deed of Trust estops appellees from arguing that requesting a partial payment
constitutes an unambiguous abandonment of a loan acceleration. Section 12 of the
2004 Deed of Trust provides:

      Borrower Not Released; Forbearance By Lender Not a Waiver.
      Extension of the time for payment or modification of amortization of
      the sums secured by this Security Instrument granted by Lender to
      Borrower or any Successor in Interest of Borrower shall not operate to
      release the liability of Borrower or any Successors in Interest of
      Borrower. Lender shall not be required to commence proceedings
      against any Successor in Interest of Borrower or to refuse to extend
      time for payment or otherwise modify amortization of the sums
      secured by this Security Instrument by reason of any demand made by
      the original Borrower or any Successors in Interest of Borrower. Any
      forbearance by Lender in exercising any right or remedy including,
      without limitation, Lender's acceptance of payments from third
      persons, entities or Successors in Interest of Borrower or in amounts
      less than the amount then due, shall not be a waiver of or preclude the
      exercise of any right or remedy.

In addition, section 1 of the 2004 Deed of Trust provides that the “Lender may
accept any payment or partial payment insufficient to bring the Loan current,
without waiver of any rights hereunder or prejudice to its rights to refuse such
payment or partial payments in the future, but Lender is not obligated to apply such
payments at the time such payments are accepted.”

      We have previously addressed and rejected the same argument in another
case involving a similar anti-waiver provision. See Citibank N.A. as Trustee for
NRZ Pass-Through Trust VI v. Pechua, Inc., 624 S.W.3d 633, 642 (Tex. App.—
Houston [14th Dist.] 2021, pet. filed). There, we held that the anti-waiver “clause
does not prohibit the Bank from abandoning a prior acceleration.                The

                                         8
abandonment of a specific event of acceleration and the waiver of a right to
accelerate and foreclose are distinct concepts.” Id. We therefore reject DHI’s anti-
waiver argument for the same reasons stated in Citibank, N.A. Id.

      Next, we turn to whether either side in this dispute met their summary
judgment burden. It is undisputed that appellees accelerated the debt in 2014.
Therefore, the issue on appeal is whether appellees’ summary judgment evidence
proved as a matter of law that they abandoned the 2014 acceleration and thereby
reset the limitations clock and conversely, whether DHI proved as a matter of law
they did not. See id. at 640 (“The key question here is whether the notices in
question unequivocally manifested an intent to unilaterally abandon the prior
acceleration.”).

      We conclude appellees met their summary judgment burden through two
documents in the summary judgment record. The first is the June 16, 2015 Notice
of Default.    Appellees argue this notice establishes it abandoned the 2014
acceleration because it requested payment of an amount less than the total
accelerated debt and also informed Campbell that “[u]pon acceleration, your total
obligation will be immediately due and payable without further demand.” The
second is a June 16, 2015 account statement.        This statement referenced the
original 2034 maturity date and informed Campbell that the total amount due was
$48,229.10 and they requested payment of that amount through an attached
payment coupon.

      In Citibank, N.A., we addressed the effect of similar documents. Based on
those documents, we held the lender established abandonment of acceleration
through a notice of acceleration that (1) notified the borrower it could cure the
default by paying the past due amount, not an accelerated amount; (2) requested
payment of the past due amount; and (3) informed the borrower that the loan
                                         9
would be accelerated if the past due amount was not paid by a specified date. Id. at
642. As there is no legally significant difference between the facts in Citibank,
N.A. and the present appeal, we follow our binding precedent and hold appellees
conclusively established they abandoned the 2014 acceleration and thereby reset
limitations. Id.

      We reached a different result in another recent case, but we conclude it is
distinguishable on its facts.    In Swoboda, we held that the lender did not
conclusively prove abandonment of acceleration because the account statement in
the summary judgment record did not actually request payment and it did not
indicate that the borrower could bring his account current by paying the past due
amount mentioned in the statement. See Swoboda, 579 S.W.3d at 635. We also
observed that the account statement appeared to be an incomplete copy because it
did not include a payment coupon. Id. Because our record includes the items we
pointed out were missing in Swoboda, we hold that the trial court did not err when
it granted appellees’ motion for summary judgment and denied DHI’s.             We
therefore overrule DHI’s issues on appeal.

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                                  CONCLUSION

      Having overruled DHI’s issues on appeal, we affirm the trial court’s final
judgment.

                                     /s/    Jerry Zimmerer
                                            Justice

Panel consists of Chief Justice Christopher and Justices Zimmerer and Wilson.

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