BBVA Compass A/K/A Compass Bank, Successor in Interest to Texas State Bank v. Adolfo Vela and Leticia Vela ( 2018 )

NUMBER 13-16-00318-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
BBVA COMPASS A/K/A COMPASS
BANK, SUCCESSOR IN INTEREST
OF TEXAS STATE BANK, Appellant,
v.
ADOLFO VELA AND LETICIA VELA, Appellees.
On appeal from the 93rd District Court
of Hidalgo County, Texas.
MEMORANDUM OPINION
Before Justices Rodriguez, Contreras, and Benavides
Memorandum Opinion by Justice Rodriguez
This appeal arises from a summary judgment disposing of appellant Compass
Bank’s1 claim for judicial foreclosure against appellees Adolfo Vela and Leticia Vela. By
two issues, Compass Bank asserts that the summary judgment was erroneously granted
and that it was entitled to foreclose as a matter of law. We reverse and remand.
I. BACKGROUND
Compass Bank alleges that the Velas obtained a home equity loan in 2006. To
that end, the Velas executed a note (the “note”) which was secured by their home via an
instrument titled “Texas Home Equity Deed of Trust” (the “deed of trust”). Compass
Bank alleges that it sought to foreclose on the deed of trust after the Velas stopped
making payments on the note.2
In 2014, both parties filed motions for summary judgment.3 The trial court denied
Compass Bank’s motion and instead granted the Velas’ motion in an order declaring that
1Appellant is BBVA Compass, a/k/a Compass Bank, Successor in Interest of Texas State Bank.
For ease of reference, we refer to appellant as “Compass Bank.”
2 Compass Bank’s foreclosure claim has a complicated procedural history that is not entirely clear
within the record. In 2010, Compass Bank filed an application for expedited foreclosure in cause number
C-2690-10-C. See generally TEX. R. CIV. P. 736.1 et seq. In 2011, the Velas filed various claims against
Compass Bank in cause number C-2151-11-C. Compass Bank’s application for foreclosure was
apparently defective, and in 2011, all claims in both suits were dismissed.
This appeal arises from cause number T-1586-11-F, which originated as a separate tax proceeding.
In 2011, taxing authorities in Hidalgo County sued the Velas, and they named Compass Bank as a
defendant in rem because of Compass Bank’s lien on the Velas’ house. Within the tax suit, Compass
Bank and the Velas filed crossclaims against one another. The parties’ crossclaims were severed into this
lawsuit in June of 2014. Compass Bank filed a claim for judicial foreclosure, which is the subject of this
appeal. The Velas filed various tort claims regarding Compass Bank’s attempted foreclosure, some of
which were nonsuited, and the remainder of which were eventually severed into yet another suit. The
Velas’ tort claims are not at issue in this appeal.
3 Compass Bank filed a motion for summary judgment to dispose of the Velas’ counterclaims,
which the trial court denied. For their part, the Velas asserted that the defenses of quasi-estoppel and res
judicata barred Compass Bank’s claim for foreclosure; the Velas asserted that the trial court’s dismissal of
Compass Bank’s previous foreclosure claim in cause number C-2690-10-C had a preclusive effect on
Compass Bank’s ability to foreclose. The Velas discussed this theory in their petition but did not include
this theory in their “Summary Judgment Brief,” which discussed various legal doctrines in the abstract, but
2
“Compass Bank has no right, title or interest” in the Velas’ house (the “first summary
judgment”).
Compass Bank filed a motion for new trial.4 While Compass Bank’s motion for
new trial was pending, the Velas executed a general warranty deed that purported to
transfer legal title of their house into a trust. Specifically, the deed stated that the Velas
thereby transferred their interest in the property to “Aracelia Vela, trustee of The Adolfo
and Leticia Vela Family Trust, of . . . Boston, Massachusetts 02135.”
The trial court granted the motion for new trial, setting aside the first summary
judgment in favor of the Velas. Following the grant of new trial, Compass Bank moved
for summary judgment on its foreclosure claim. Compass Bank submitted evidence to
show its status as the holder of the note and deed of trust, the Velas’ default under both
instruments, various notices of default, an acceleration of the note, the note’s outstanding
balance, and other facts supporting foreclosure.
The Velas also moved for summary judgment, though without stating specific
grounds entitling them to judgment. At the hearing, the Velas made the particulars of
their argument clear for the first time: the Velas argued that their house was now free
from Compass Bank’s security interest because they transferred the property into a trust
while the first summary judgment—and its declaration that Compass Bank had no interest
did not mention the facts of the case or make specific arguments. Instead, the Velas argued for the first
time at the summary judgment hearing that res judicata entitled them to judgment as a matter of law on
Compass Bank’s claim for foreclosure. The trial court agreed with the Velas’ argument at the hearing and
granted the first summary judgment in their favor.
4 Compass Bank’s motion for new trial argued that the governing rule for expedited foreclosure
applications at that time, rule 736, expressly provided that res judicata does not apply in such situations,
and therefore the trial court could not have granted the first summary judgment on that basis. See former
TEX. R. CIV. P. 736(9) (current version at TEX. R. CIV. P. 736.9).
3
in the house—was in effect. The Velas asserted that if Compass Bank had wished to
preserve its lien, Compass Bank should have taken steps to suspend the enforcement of
the first summary judgment while their motion for new trial was pending. According to
the Velas, Compass Bank should have obtained a supersedeas bond, as a judgment
debtor might do while pursuing an appeal. See TEX. R. APP. P. 24.1. The Velas
contended that because the first summary judgment was not suspended by supersedeas
or other measures, they acted in justified reliance and enforced their rights under that
judgment when they transferred their house into the trust, thus discharging the lien.
Finally, the Velas reasoned that because they no longer had legal title to the property,
Compass Bank’s ongoing foreclosure action failed as a matter of law. As support, the
Velas submitted the general warranty deed itself and exhibits showing that the Velas
executed the property transfer while the first summary judgment was in effect.
The trial court agreed with the Velas’ oral argument at the summary judgment
hearing. The court denied Compass Bank’s motion and instead granted the Velas’
motion, rendering an order which declared that Compass Bank “take nothing” by its
foreclosure claim (the “second summary judgment”). Compass Bank filed this appeal of
the second summary judgment.
II. DISCUSSION
By its first issue on appeal, Compass Bank asserts that the trial court erred in
rendering the second summary judgment in favor of the Velas. By its second issue,
Compass Bank asserts that it was entitled to a judicial order of foreclosure as a matter of
law.
4
A. Standard of Review and Applicable Law
We review a grant of summary judgment de novo. SeaBright Ins. Co. v. Lopez,
465 S.W.3d 637, 641 (Tex. 2015). A party moving for traditional summary judgment has
the burden to prove that there is no genuine issue of material fact and that it is entitled to
judgment as a matter of law. Id. We review summary judgment evidence in the light
most favorable to the party against whom the summary judgment was rendered, crediting
evidence favorable to that party if reasonable jurors could, and disregarding contrary
evidence unless reasonable jurors could not. Id. When both sides move for summary
judgment and the trial court grants one motion and denies the other, we review the
summary judgment evidence presented by both sides and render the judgment the trial
court should have rendered. Id. at 641–42.
B. The Second Summary Judgment in Favor of the Velas
Compass Bank asserts that the second summary judgment in favor of the Velas
cannot stand. According to Compass Bank, the Velas’ motion did not advance any
specific grounds for summary judgment, and the grounds which the Velas argued for the
first time at the hearing have no merit.
The Vela’s motion for summary judgment consisted of four paragraphs, three of
which were used for formalities. The substance of the Velas’ motion was set out in the
remaining paragraph, which generally asserted that the Velas were entitled to summary
judgment based on the evidence:
This motion is predicated upon the ground that the summary judgment
evidence submitted as support for the pending summary judgment motion
of BBVA Compass Bank, and the summary judgment evidence filed
herewith, collectively support all findings needed to establish Movants’
entitlement to the summary judgment herein requested.
5
The Velas revealed their grounds for summary judgment for the first time at the hearing.
A motion for summary judgment must state the specific grounds entitling the
movant to judgment, identifying or addressing the cause of action or defense and its
elements. ExxonMobil Corp. v. Lazy R Ranch, LP, 511 S.W.3d 538, 545–46 (Tex. 2017).
Rule 166a does not permit the movants to state their summary judgment grounds for the
first time “in . . . the summary judgment evidence” or during argument at the hearing.
McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341 (Tex. 1993). We may
affirm a summary judgment based only on a ground expressly stated in the motion for
summary judgment. Stiles v. Resolution Tr. Corp., 867 S.W.2d 24, 26 (Tex. 1993);
Guevara v. Lackner, 447 S.W.3d 566, 571 (Tex. App.—Corpus Christi 2014, no pet.).
The term “ground” refers to the reasons that entitle the movant to summary judgment.
Stephens v. LNV Corp., 488 S.W.3d 366, 373 (Tex. App.—El Paso 2015, no pet.) (quoting
Garza v. CTX Mortg. Co., LLC, 285 S.W.3d 919, 923 (Tex. App.—Dallas 2009, no pet.)).
Because the Velas presented no specific grounds in their motion, we may not
affirm the summary judgment in their favor.5 See Stiles, 867 S.W.2d at 26. We sustain
Compass Bank’s first issue.
C. Compass Bank’s Motion for Summary Judgment
5 The Velas did not make any written argument concerning the validity of Compass Bank’s lien,
and unlike the first summary judgment, the second summary judgment did not declare that Compass Bank
had no interest in the property. Accordingly, we need not express an opinion on whether Compass Bank’s
lien remains intact. See First Nat’l Bank of Kerrville v. O’Dell, 856 S.W.2d 410, 415 (Tex. 1993) (discussing
discharge of a lien through judicial foreclosure or satisfaction of the note); TEX. PROP. CODE ANN. § 12.017
(West, Westlaw through 2017 1st C.S.) (providing for release-of-liens affidavits); see also Hill v. Preston,
34 S.W.2d 780, 786 (Tex. 1931); but see Sewell v. Spitzer, 234 S.W. 1083, 1085 (Tex. Comm’n App. 1921)
(“It is a well-settled rule of the common law that, in a suit to foreclose a mortgage, it is not necessary to
make the debtor a party to the suit where he has parted with his interest in the property, unless a personal
judgment is sought against him. The plaintiff in such suit may proceed against the purchaser of the
property alone, establish his debt, and subject the property to the payment thereof.”); Mackey v. Great
Lakes Invs., Inc., 255 S.W.3d 243, 253 (Tex. App.—San Antonio 2008, pet. denied) (similar).
6
We next determine whether the trial court should have granted Compass Bank’s
motion for summary judgment. Compass Bank contends that it presented
uncontroverted evidence that it was entitled to foreclosure.
In support of its summary judgment motion, Compass Bank attached the affidavit
of its employee David Smith, a “mortgage default specialist.” Smith averred that he was
a custodian of Compass Bank’s records, and he summarized and attempted to
authenticate certain purported records regarding the Velas’ account:
• the note, which obligated the Velas to repay the principal sum of $113,600, with
interest, to Compass Bank over fifteen years;
• the deed of trust signed by the Velas, under which the note was secured by the
Velas’ house, a particularly described property in McAllen which could be
foreclosed through a court order in the event of default;
• certified letters from Compass Bank notifying the Velas of their default and
demanding payment, first in September and October 2009, and again in
December 2011; and
• a notice of acceleration dated May 2, 2012.
Smith identified Compass Bank as the holder of the note and the deed of trust, and he
attested to the Velas’ default under both instruments. According to Smith, the balance
due and owing under the note was $158,910.72 as of September 23, 2015, and Compass
Bank sought judicial foreclosure of its lien in order to mitigate its loss on the Velas’ debt.
However, Compass Bank concedes that the Velas executed a general warranty
deed to transfer ownership of the subject property to “Aracelia Vela, trustee of The Adolfo
7
and Leticia Vela Family Trust.” A general warranty deed passes to the grantee all the
rights and interests the grantor holds in the conveyed land unless there is language in the
instrument that clearly shows an intention to convey a lesser interest. Aery v. Hoskins,
Inc., 493 S.W.3d 684, 700 (Tex. App.—San Antonio 2016, pet. denied) (citing Farm &
Ranch Inv’rs, Ltd. v. Titan Operating, LLC, 369 S.W.3d 679, 681 (Tex. App.—Fort Worth
2012, pet. denied)). Compass Bank suggests in its appellate brief that this transfer was
fraudulent, but Compass Bank has not yet pleaded or proved any theory that would vitiate
this transfer or otherwise demonstrate Compass Bank’s entitlement to an order of
foreclosure against any defendant in this appeal. See TEX. BUS. & COM. CODE ANN.
§ 24.001 et seq. (West, Westlaw through 2017 1st C.S.). Accordingly, we may not
render disposition in Compass Bank’s favor.
We overrule Compass Bank’s second issue.
III. CONCLUSION
Having found that neither party is entitled to summary judgment, we reverse the
trial court’s order granting summary judgment and remand the matter to the trial court for
further proceedings consistent with this opinion.
NELDA V. RODRIGUEZ
Justice
Delivered and filed the
8th day of March, 2018.
8