Gordon Dean Haley, Anton Scott Haley, Gordon Dean Haley as Independent Co-Executor of the Estate of Margaret L. Haley, and Anton Scott Haley as Independent Co-Executor of the Estate of Margaret L. Haley v. Beneficial Financial I Inc., Successor by Merger to Beneficial Texas, Inc. ( 2019 )

NUMBER 13-18-00058-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
GORDON DEAN HALEY AND ANTON
SCOTT HALEY, INDIVIDUALLY AND
AS INDEPENDENT CO-EXECUTORS OF
THE ESTATE OF MARGARET L. HALEY, Appellants,
v.
BENEFICIAL FINANCIAL I INC.,
SUCCESSOR BY MERGER
TO BENEFICIAL TEXAS, INC., Appellee.
On appeal from the 94th District Court
of Nueces County, Texas.
MEMORANDUM OPINION
Before Justices Benavides, Hinojosa, and Perkes
Memorandum Opinion by Justice Perkes
Proceeding pro se, appellants Gordon Dean Haley and Anton Scott Haley,
individually and as independent co-executors of the estate of Margaret L. Haley, appeal
from a summary judgment granted in favor of appellee Beneficial Financial I Inc.,
successor by merger to Beneficial Texas, Inc. (Beneficial), on Beneficial’s suit for judicial
foreclosure. In what we construe as three main issues, the Haleys argue on appeal that:
(1) the trial court lacked subject-matter jurisdiction because there was a pending probate
proceeding in county court; (2) Beneficial failed to conclusively establish its right to judicial
foreclosure; and (3) the Haleys raised genuine issues of fact on their affirmative defenses
under the Texas Constitution. We affirm.1
I. BACKGROUND
On May 25, 2006, Bennie Spencer Haley and Margaret L. Haley obtained a home-
equity loan secured by their homestead, commonly known as 4910 Lavaca Drive, Corpus
Christi, Texas 78411 (the Property).2 On October 8, 2006, Bennie died, and Margaret
became the sole owner of the Property. When Margaret died in May 2011, the Haleys
opened an independent administration of their mother’s estate in Nueces County Court at
Law No. 4. In September 2011, Margaret’s last will and testament was admitted to
probate and the Haleys were appointed as the independent co-executors. Under the will,
the Haleys inherited the Property.
It is undisputed that the last payment on the note was made in June 2011, the month
after Margaret died. In March 2015, Beneficial filed suit for judicial foreclosure in the
1 All pending motions are hereby dismissed as moot.
2 The Property’s legal description is “Lot Three (3), Block Four (4), Margo Plaza, A Subdivision In
The City Of Corpus Christi, Texas, According To The Map Or Plat Thereof, Recorded In Volume 29, Page
98, Map Records Of Nueces County, Texas.”
2
district court.3 The Haleys, initially proceeding pro se, each filed an answer containing a
general denial, specific denials, and affirmative defenses. Anton’s answer also included
counterclaims for violations of the “State and Federal Truth in Lending Acts” and “State
and Federal Fair Debt Collection Practices Act.”
In August 2016, Beneficial moved for traditional summary judgment on its
foreclosure claim and no-evidence summary judgment on Anton’s counterclaims.
According to Beneficial’s live pleading filed eight months prior, the administration of
Margaret’s estate was still open at that time, and there is nothing in the record to indicate
when or if it was closed.
The Haleys, represented by counsel at this point, filed a joint response to the
combined motion for summary judgment arguing: (1) Beneficial lacked standing because
it was not the owner of the note; (2) the copy of the promissory note produced by Beneficial
was inadmissible because it was not the “original ink-signed paper promissory note;” (3)
the affidavit by Beneficial’s custodian of records was inadmissible because it was internally
inconsistent and not based on personal knowledge; (4) as a result of the inadmissible
affidavit, the attached business records were not properly authenticated; and (5) the
business records were otherwise not admissible because they contained internal
inconsistencies. They subsequently filed a joint sur-response repeating these issues.
While the combined motion was pending,4 and after they had filed their response
3 The suit was originally filed in the 214th Judicial District Court, but it was later transferred to the
94th Judicial District Court under Nueces County Local Rules.
4 Beneficial’s combined motion was filed on August 30, 2016. After being noticed for hearing
several times, the motion was heard on October 23, 2017.
3
and sur-response, the Haleys filed joint first and second supplemental answers, attaching
affidavits and other documents in support of their affirmative defenses under the Texas
Constitution. The summary judgment hearing was held thirty-nine days after the Haleys
filed their second supplemental answer. The trial court granted Beneficial’s combined
motions for summary judgment and this appeal ensued.5
II. STANDARD OF REVIEW
A party moving for traditional summary judgment must establish there is no genuine
issue of material fact and that it is entitled to judgment as a matter of law. TEX. R. CIV. P.
166a(c). We review summary judgment de novo. Rogers v. RREF II CB Acquisitions,
LLC, 533 S.W.3d 419, 425 (Tex. App.—Corpus Christi–Edinburg 2016, no pet.) (citing
Tex. Mun. Power Agency v. Pub. Util. Comm’n of Tex., 253 S.W.3d 184, 192 (Tex. 2007)).
We take as true all evidence favorable to the non-movant, indulge every reasonable
inference, and resolve any doubts in the non-movant’s favor. Id. at 426 (citing Sw. Elec.
Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002)).
III. ANALYSIS
A. The trial court’s subject-matter jurisdiction
By their first issue, the Haleys contend for the first time on appeal that the trial court
lacked subject-matter jurisdiction because the administration of Margaret’s estate was
pending in another court when Beneficial filed its foreclosure action. Unlike other issues
discussed below, subject-matter jurisdiction may be raised for the first time on appeal.
Waco Indep. Sch. Dist. v. Gibson, 22 S.W.3d 849, 850 (Tex. 2000) (citing Tex. Ass’n of
5 Anton Haley did not appeal Beneficial’s no-evidence summary judgment on his counterclaims.
4
Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 445 (Tex. 1993)).
The Haleys rely on King v. Deutsche Bank National Trust Co. in which the First
Court of Appeals held that a district court lacked subject-matter jurisdiction over a judicial
foreclosure claim because a Harris County statutory probate court previously obtained
exclusive jurisdiction over the claim. 472 S.W.3d 848, 856 (Tex. App.—Houston [1st
Dist.] 2015, no pet.). The Haleys’ reliance on King is misplaced. Unlike Harris County,
Nueces County does not have a statutory probate court, only statutory county courts at
law. Compare TEX. GOV’T CODE ANN. § 25.1031(c) with § 25.1801(a). Under the Texas
Estates Code, a “statutory probate court has exclusive jurisdiction of all probate
proceedings, regardless of whether contested or uncontested.” TEX. EST. CODE ANN.
§ 32.005(a). On the other hand, “a county court at law in Nueces County
has . . . concurrent jurisdiction with the district court in disputes ancillary to
probate . . . [and] concurrent jurisdiction with the district court in all actions by or against a
personal representative.” TEX. GOV’T CODE ANN. § 25.1802(a)(2), (6).
“When the jurisdiction of a county court sitting in probate and a district court are
concurrent, the issue is one of dominant jurisdiction.” In re Puig, 351 S.W.3d 301, 305
(Tex. 2011) (per curiam) (citing Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245, 248 (Tex.
1988)). “As a general rule, when cases involving the same subject matter and same
parties are brought in different courts, the court with the first-filed case has dominant
jurisdiction, and the other case should be abated.” King, 472 S.W.3d 848. at 852 (citing
Wyatt, 760 S.W.2d at 248). However, the court without dominant jurisdiction is not
deprived of subject-matter jurisdiction; the only remedy is a plea in abatement. In re Puig,
5
351 S.W.3d at 306.
Based on the record before us, it appears that Nueces County Court at Law No. 4
had dominant jurisdiction over Beneficial’s judicial foreclosure claim; however, there is no
indication in the record that the Haleys filed a plea in abatement in favor of the county
court’s dominant jurisdiction, and the Haleys have made no such argument on appeal.
Instead, they generally challenge the district court’s subject-matter jurisdiction. Because
the county court’s dominant jurisdiction did not deprive the district court of subject-matter
jurisdiction, we overrule the Haleys’ first issue. See id.
B. Beneficial’s right to judicial foreclosure
By their second issue, the Haleys contend that Beneficial failed to meet its summary
judgment burden, repeating the same objections they made to Beneficial’s evidence in the
trial court. However, the Haleys failed to obtain a ruling from the trial court on any of their
objections. They also failed to object to the trial court’s refusal to rule on their objections.
Therefore, to the extent the Haleys complain on appeal that the trial court abused its
discretion by admitting Beneficial’s evidence, those objections were not preserved for our
review. See TEX. R. APP. P. 33.1(a)(2)(A), (B); Seim v. Allstate Tex. Lloyds, 551 S.W.3d
161, 166 (Tex. 2018) (holding that granting summary judgment alone does not constitute
an implied ruling on an evidentiary objection).
Regardless, we must determine whether Beneficial met its summary judgment
burden. See TEX. R. CIV. P. 166a(c); see also City of Houston v. Clear Creek Basin Auth.,
589 S.W.2d 671, 678 (Tex. 1979) (“Summary judgments must stand on their own merits,
and the non-movant’s failure to answer or respond cannot supply by default the summary
judgment proof necessary to establish the movant’s right.”). After review, we conclude
6
that Beneficial’s evidence—a declaration by Beneficial’s custodian of records attesting to
the default and unpaid balance, as well as authenticated copies of the note, mortgage,
and notices of default and acceleration sent by certified mail—were competent summary
judgment evidence routinely used to establish a plaintiff’s right to judicial foreclosure.
See, e.g., Kyle v. Countrywide Home Loans, Inc., 232 S.W.3d 355, 362 (Tex. App.—Dallas
2007, pet. denied) (holding that summary judgment evidence consisting of (1) a sworn
affidavit by bank’s foreclosure specialist attesting to borrower’s default and (2) a deed of
trust, which gave bank right to seek judicial foreclosure in event of default, was sufficient
to entitle bank to judgment as matter of law against borrower); see also Zarges v. Bevan,
652 S.W.2d 368, 369 (Tex. 1983) (per curiam) (holding that a true and correct copy of the
note is legally sufficient for summary judgment purposes).
The burden then shifted to the Haleys to raise an issue that would preclude
summary judgment. See Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995)
(citing “Moore” Burger, Inc. v. Phillips Petroleum Co., 492 S.W.2d 934, 936–37 (Tex.
1972)). In their summary judgment responses, the Haleys specifically challenged
Beneficial’s standing to enforce the note. See Bean v. Bluebonnet Sav. Bank FSB, 884
S.W.2d 520, 522 (Tex. App.—Dallas 1994, no writ) (holding that to recover on a
promissory note the plaintiff must prove, among other things, that it is the owner or holder
of the note) (citing Sorrells v. Giberson, 780 S.W.2d 936, 938 (Tex. App.—Austin 1989,
writ denied)). To establish a fact issue, the Haleys produced copies of documents filed
with the United States Securities and Exchange Commission as evidence that the note
had been sold as part of a securitization agreement. These documents span 238 pages,
and the Haleys have failed to provide this Court with pinpoint citations to the record to
7
support their position that the note was sold. See TEX. R. APP. P. 38.1(i) (“The
[appellant’s] brief must contain a clear and concise argument for the contentions made,
with appropriate citations to authorities and to the record.”); Trebesch v. Morries, 118
S.W.3d 822, 825 (Tex. App.—Fort Worth 2003, pet. denied) (“We are not required to
search the record, with no guidance from Appellants, to see if an issue of material fact was
raised by the record.”) (citing Hall v. Stephenson, 919 S.W.2d 454, 466–67 (Tex. App.—
Fort Worth 1996, writ denied)). However, even if we assume those documents raise a
genuine issue of fact about ownership of the note, Beneficial contends that it has standing
to enforce the note because it conclusively established its status as the holder of the note.
We agree.
A “holder” is a “person entitled to enforce” an instrument. TEX. BUS. & COM. CODE
ANN. § 3.301. A “holder” includes “the person in possession of a negotiable instrument
that is payable either to bearer or to an identified person that is the person in possession.”
Id. § 1.201(b)(21). Whether the holder is also the owner is irrelevant. SMS Financial,
Ltd. Liability Co. v. ABCO Homes, Inc., 167 F.3d 235, 239 (5th Cir. 1999). The Uniform
Commercial Code specifically provides that “[a] person may be a person entitled to enforce
the instrument even though the person is not the owner of the instrument or is in wrongful
possession of the instrument.” TEX. BUS. & COM. CODE ANN. § 3.301 (emphasis added).
Thus, the Haleys’ focus on ownership is misplaced.
Beneficial is the holder of the note as defined in § 1.201(b)(21) because it is in
possession of a note which is payable to itself.6 See ABCO Homes, Inc., 167 F.3d at 239.
6 The note is payable to Beneficial Texas, Inc. As part of its summary judgment evidence, appellee
produced a certified copy of a certificate of merger from the Texas Secretary of State showing Beneficial
Texas, Inc. merged into appellee.
8
Beneficial provided a true and correct copy of the note authenticated by Beneficial’s
custodian of records, who further attested that “Beneficial is currently the note holder and
servicer of the Note and Security Instrument.” This evidence was legally sufficient to
conclusively establish Beneficial’s status as holder of the note. See Zarges, 652 S.W.2d
at 369. Because Beneficial conclusively established its standing to enforce the note, and
all other elements of its claim for judicial foreclosure, the Haleys’ second issue is overruled.
C. The Haleys’ constitutional defenses
The Haleys also argue that they raised genuine issues of material fact on their
affirmative defenses under the Texas Constitution. See TEX. CONST. art. XVI, § 50(a)(6);
Garofolo v. Ocwen Loan Servicing, L.L.C., 497 S.W.3d 474, 478 (Tex. 2016). Beneficial
responds that the Haleys waived these defenses by failing to raise them in their summary
judgment responses. We agree.
In a summary judgment proceeding, the movant has no burden to negate the non-
movant’s affirmative defenses. Exxon Mobile Corp. v. Rincones, 520 S.W.3d 572, 593
(Tex. 2017). After the movant conclusively establishes each element of its claim, the
nonmovant must come forward with summary judgment evidence sufficient to raise an
issue of fact on each element of its affirmative defenses to avoid summary judgment.
Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex. 1984) (citing Clear Creek, 589 S.W.2d
at 678–79). “[I]ssues a non-movant contends avoid the movant’s entitlement to summary
judgment must be expressly presented by written answer to the motion or by other written
response to the motion . . . .” McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337,
341 (Tex. 1993) (citing Clear Creek, 589 S.W.2d at 678). An “answer” to summary
9
judgment means a response to the summary judgment motion, not an answer in the form
of a regular pleading. Clear Creek, 589 S.W.2d at 679. Accordingly, affidavits filed with
an answer are not summary judgment evidence unless they are also attached to the
summary judgment response or incorporated in the response by express reference.
Speck v. First Evangelical Lutheran Church of Hous., 235 S.W.3d 811, 816 (Tex. App.—
Houston [1st Dist.] 2007, no pet.); see Sugarland Bus. Ctr., Ltd. v. Norman, 624 S.W.2d
639, 642 (Tex. App.—Houston [14th Dist.] 1981, no writ) (holding that an affidavit “attached
to the pleadings but not attached to the motion for summary judgment, does not constitute
summary judgment evidence.”); Lance v. Robinson, 543 S.W.3d 723, 732–33 (Tex. 2018)
(holding the trial court in a summary judgment proceeding properly considered evidence
previously filed because the movant’s motion expressly incorporated the evidence by
reference); see also Granata v. Kroese, No. 05-17-00118-CV, 2018 WL 345637, at *5
(Tex. App.—Dallas Jan. 10, 2018, pet. dism’d by agr.) (mem. op.) (“Because [the
appellant] did not attach the affidavit to his response to the motion for summary judgment,
incorporate it by reference, or even mention it in the response, the affidavit was not part of
the summary judgment evidence.”) (citing Speck, 235 S.W.3d at 816).
In this case, the Haleys did neither. They filed supplemental answers after their
summary judgment response and sur-response, attaching affidavits they now rely on in
this Court to raise a genuine issue of material fact on each element of their affirmative
defenses. But the Haleys never amended their summary judgment response to expressly
raise these affirmative defenses in avoidance of Beneficial’s motion for summary
judgment. When asked by the trial court during the summary judgment hearing whether
these supplemental answers were actually sur-responses, the Haleys insisted that they
10
were only supplemental answers, but argued instead that the court was obligated to
consider them in the summary judgment proceeding. Beneficial then responded, “I don’t
think I’m under any affirmative obligation to respond to an answer. So this is in his
answer. What would I file in response to that?” Indeed, because the Haleys failed to
expressly raise their affirmative defenses in their responses to Beneficial’s motion for
summary judgment, they were not preserved for our review.7 See TEX. R. CIV. P. 166a(c);
Speck, 235 S.W.3d at 816; McConnell, 858 S.W.2d at 341. The Haleys’ third issue is
overruled.
IV. CONCLUSION
The judgment of the trial court is affirmed.
GREGORY T. PERKES
Justice
Delivered and filed the
28th day of June, 2019.
7 Any other issue raised by the Haleys on appeal that was not discussed in this opinion was deemed
waived because it was not expressly raised in their summary judgment responses. See TEX. R. CIV. P.
166a(c); McConnell, 858 S.W.2d at 341.
11