Wendy Lee Kyle v. H.T. Strasburger, Individually and in His Capacity as a Member of the Board of Directors of Fidelity Bank of Texas, and as a Member of Tuition LLC Shirley Strasburger, Individually and in Her Capacity as Vice-Chair of the Board of Directors of Fidelity Bank of Texas, and as Member of the Tuition LLC Terry Whitley, Individually and in His Capacity as President and Member of the Board of Directors of Fidelity Bank of Texas Fidelity Bank of Texas Tuition LLC ( 2019 )

NUMBER 13-13-00609-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
WENDY LEE KYLE, Appellant,
v.
H.T. STRASBURGER, INDIVIDUALLY AND
IN HIS CAPACITY AS A MEMBER OF THE
BOARD OF DIRECTORS OF FIDELITY BANK
OF TEXAS, AND AS A MEMBER OF TUITION
LLC; SHIRLEY STRASBURGER, INDIVIDUALLY
AND IN HER CAPACITY AS VICE-CHAIR OF
THE BOARD OF DIRECTORS OF FIDELITY
BANK OF TEXAS, AND AS A MEMBER OF THE
TUITION LLC; TERRY WHITLEY, INDIVIDUALLY
AND IN HIS CAPACITY AS PRESIDENT AND
MEMBER OF THE BOARD OF DIRECTORS OF
FIDELITY BANK OF TEXAS; FIDELITY BANK
OF TEXAS; AND TUITION LLC, Appellees.
On appeal from the 250th District Court
of Travis County, Texas.
MEMORANDUM OPINION ON REMAND
Before Chief Justice Contreras1 and Justices Valdez and Rodriguez2
Memorandum Opinion on Remand by Justice Contreras
We issued our memorandum opinion on remand and judgment in this matter on
December 28, 2018. Appellant Wendy Lee Kyle has filed a motion for rehearing. We
deny the motion for rehearing but withdraw our December 28, 2018 memorandum opinion
on remand and judgment and substitute the following memorandum opinion on remand
and accompanying judgment.
This matter is before the Court on remand from the Texas Supreme Court.3 Kyle
argued by five issues that the trial court erred in granting summary judgment dismissing
her claims against appellees, Fidelity Bank of Texas et al. (collectively Fidelity).4
The dispute arose from a 2004 home equity loan which was secured by a deed of
trust on the Austin homestead belonging to Kyle and her ex-husband Mark. Kyle later
learned that Mark’s employee forged Kyle’s signature on the loan documents.
Subsequently, pursuant to a Rule 11 agreement, Kyle executed a special warranty deed
1 Chief Justice Dori Contreras, formerly Justice Dori Contreras Garza. See TEX. FAM. CODE ANN.
§ 45.101 et seq. (West, Westlaw through 2017 1st C.S.).
2 The Honorable Rogelio Valdez, former Chief Justice of this Court, and the Honorable Nelda V.
Rodriguez, former Justice of this Court, participated in the consideration of this case on original submission,
but their terms of office expired on December 31, 2018. Retired Justices Valdez and Rodriguez have been
assigned to this Court by the Chief Justice of the Texas Supreme Court pursuant to the government code.
See TEX. GOV’T CODE ANN. § 74.003 (West, Westlaw through 2017 1st C.S.).
3 The appeal was transferred to this Court from the Third Court of Appeals in Austin pursuant to an
order issued by the Texas Supreme Court. See id. § 73.001 (West, Westlaw through 2017 1st C.S.).
4 Appellees are H.T. Strasburger, individually and in his capacity as a member of the board of
directors of Fidelity Bank of Texas, and as a member of Tuition LLC; Shirley Strasburger, individually and
in her capacity as vice-chair of the board of directors of Fidelity Bank of Texas, and as a member of Tuition
LLC; Terry Whitley, individually and in his capacity as president and member of the board of directors of
Fidelity Bank of Texas; Fidelity Bank of Texas; and Tuition LLC.
2
and an agreed divorce decree transferring her interest in the homestead to Mark. In this
suit, filed in 2012, Kyle alleges that she agreed to the transfer only because Fidelity and
others incorrectly and fraudulently led her to believe that the property would be foreclosed
upon and that she would be held personally liable on the home equity loan.
On original submission, we affirmed the trial court’s dismissal of the following
claims made by Kyle, on limitations grounds: (1) for declaratory judgment that the deed
of trust securing the loan is void; (2) for forfeiture of principal and interest under article
XVI, section 50 of the Texas Constitution; and (3) for declaratory judgment setting aside
the special warranty deed. Kyle v. Strasburger, 520 S.W.3d 74, 80 (Tex. App.—Corpus
Christi 2015) (holding that the alleged defects made the loan voidable, not void ab initio,
and applying the residual four-year statute of limitations), aff’d in part & rev’d in part, 522
S.W.3d 461 (Tex. 2017). We also held that because Kyle’s statutory real estate fraud,
Texas Finance Code, and Deceptive Trade Practices Act (DTPA) claims (collectively, the
statutory claims) were each dependent on her claim that the deed of trust is void, those
claims were properly disposed of on no-evidence grounds. 520 S.W.3d at 81–83.5
The supreme court affirmed in part and reversed in part, holding that: (1) Kyle’s
claim for forfeiture of principal and interest was not an independent cause of action under
the Texas Constitution and was therefore properly dismissed; but (2) the statute of
limitations did not bar Kyle’s declaratory judgment claims and, therefore, those claims and
the remaining statutory claims should not have been dismissed. 522 S.W.3d at 464–67
(“A home-equity loan secured by a lien that was not created with the consent of each
5 After Kyle filed her notice of appeal in 2013, the trial court rendered an order denying Fidelity’s
motion for sanctions against Kyle for filing a frivolous lawsuit. Fidelity appealed that order separately, and
we affirmed. Strasburger v. Kyle, No. 13-14-00079-CV, 2016 WL 1072618, at *1 (Tex. App.—Corpus
Christi Mar. 17, 2016, no pet.) (mem. op.).
3
owner and each owner’s spouse is not ‘a debt described by this section’ [under article
XVI, section 50] and is therefore invalid unless and until such consent is
obtained. . . . The statute of limitations does not bar Kyle’s claim to declare the lien
invalid.”) (citing Garofolo v. Ocwen Loan Servicing, 497 S.W.3d 474, 478 (Tex. 2016);
Wood v. HSBC Bank USA, N.A., 505 S.W.3d 542, 548 (Tex. 2016)).6
In accordance with the supreme court’s opinion, we now consider whether
summary judgment on Kyle’s outstanding claims was supported on any of the other
grounds raised in Fidelity’s motions. We affirm in part and reverse and remand in part.
I. BACKGROUND
In our 2015 opinion, we set forth the background of this case as follows:
On May 24, 2004, appellant’s ex-husband, Mark Kyle, obtained a 1.1
million dollar home equity loan from Fidelity, a loan which was secured by
the couple’s homestead. It is undisputed that Mark’s employee signed
appellant’s name on the loan documents, including the promissory note,
deed of trust, and disclosure statements.7 Fidelity alleges that appellant
consented to her friend signing the document8; however, appellant claims
that she did not consent to the forgery and learned of the signature later. In
late 2009, appellant filed for divorce from Mark. During the divorce
proceedings, Mark failed to pay ad valorem taxes and Fidelity declared the
note on the loan in default. Threatened with foreclosure, attorneys for Mark
and appellant attempted to negotiate a forbearance agreement with Fidelity
that would temporarily abate the threatened foreclosure of the couple's
homestead. Appellant refused to sign a document requiring her to verify
that she had signed the original loan documents. Terry Whitley, Fidelity’s
6 As to Kyle’s claim for declaratory judgment setting aside the special warranty deed, we affirmed
summary judgment on limitations grounds because Kyle did not challenge those grounds on appeal with
respect to that claim. Kyle v. Strasburger, 520 S.W.3d 74, 80–81 (Tex. App.—Corpus Christi 2015), aff’d
in part & rev’d in part, 522 S.W.3d 461 (Tex. 2017). The Texas Supreme Court disagreed, finding that
“[a]lthough Kyle could have more clearly referenced the deed claim in the portion of her brief devoted to the
statute of limitations, she fully responded to the substance of Fidelity’s limitations argument.” 522 S.W.3d
at 466.
7 Whoever signed the documents used appellant’s passport as identification.
8 Fidelity provided Mark’s testimony that appellant agreed to the loan and allowed her friend to sign
the loan documents. Fidelity also provided as summary judgment evidence, an email dated June 8, 2004,
from appellant to Mark stating, “I asked you for $5,000. of the 1.? ? ? million that we took out of the house
but haven’t had the courtesy of a reply.”
4
president, testified that he did not know whether Fidelity was aware that
appellant had not signed the original loan documents.
On March 24, 2011, Fidelity began foreclosure proceedings on the
property. The foreclosure application included Whitley’s affidavit stating
that appellant and Mark had executed the loan agreement. Appellant filed
a verified denial in response to the foreclosure proceedings stating that she
had not signed the loan agreement and that she had not given anyone
authority to sign on her behalf. Fidelity began investigating whether
appellant had actually signed the loan documents. However, according to
appellant, Fidelity continued to pursue foreclosure against the couple’s
homestead and represented to others that appellant had executed the
home-equity loan documents. Fidelity also “sent notice of the pending non-
judicial foreclosure sale of the [couple’s] homestead to the Internal Revenue
Service,” asserting “that Mark and [appellant] had executed the home-
equity loan and that Fidelity had scheduled the foreclosure sale on August
2, 2011.”
On June 2, 2011, pursuant to a Rule 11 agreement with Mark and as
part of the final divorce decree, appellant conveyed her interest in the home
to Mark by special warranty deed, thereby making Mark the sole owner of
the home. Fidelity points out that appellant testified that she signed the
Rule 11 agreement and accompanying documents based on the advice of
her attorneys and confirmed that she did not rely on the advice of anyone
else. However, appellant claims that she sold the property because she did
not want to be part of the foreclosure proceeding. The divorce court entered
a final judgment of divorce decreeing that the home was Mark’s sole and
separate property and appellant signed the judgment as “approved and
consented as to both form and substance.” On June 21, 2011, Fidelity
nonsuited appellant from the foreclosure proceedings.
On October 13, 2011, Fidelity sold the note and assigned the lien to
Tuition LLC, a corporation formed by the Strasburgers for, according to
appellant, “the sole purpose of holding the note and lien.” Appellant claims
that Tuition LLC had been attempting to collect past-due payments on the
home-equity note from her and has instituted foreclosure proceedings
naming her as a party.
On October 3, 2012, appellant filed suit against Fidelity and Mark
asserting claims for fraudulent filing of a financing statement, statutory fraud
in a real estate transaction, securing the execution of a document by
deception, common law fraud, negligent misrepresentation, “aiding and
abetting,” fraudulent inducement, and damage to credit. Appellant sought
damages from Fidelity that she claims were sustained as a result of
misrepresentations made by Fidelity that a loan secured by a fraudulent
signature was enforceable. Appellant requested the trial court to declare
the loan agreement void and set aside the transfer of the property to Mark.
5
On March 11, 2013, Fidelity filed its first motion for summary
judgment on traditional and no-evidence grounds challenging all elements
of appellant’s causes of action and claiming the affirmative defense of
absolute privilege. On March 13, 2013, appellant amended her petition
adding claims for forfeiture of principal and interest and declaratory
judgment actions requesting that the lien be declared void and that the
special warranty deed be set aside. The trial court granted Fidelity’s motion
on May 16, 2013. Fidelity filed a subsequent motion for summary judgment
as to the claims appellant added in her amended petition arguing that
appellant did not have standing and that her suit was barred by the statute
of limitations. The trial court granted the motion without specifying the
grounds and severed appellant’s suit against Fidelity from her claims
against Mark. This appeal followed.
Kyle, 520 S.W.3d at 76–77 (footnotes in original).
Following Kyle’s abandonment of certain claims and the supreme court’s 2017
ruling, only the following claims raised by Kyle remain pending: (1) declaratory judgment
that the deed of trust securing the loan is void; (2) declaratory judgment setting aside the
special warranty deed; (3) Texas Finance Code violations; (4) DTPA violations; and (5)
statutory fraud in a real estate transaction under the business and commerce code. See
id. at 81 n.13.
II. DISCUSSION
A. Summary Judgment Law and Standard of Review
A party may move for summary judgment on traditional or no-evidence grounds.
See TEX. R. CIV. P. 166a(c), (i). In a traditional motion for summary judgment, the movant
has the burden to establish that no genuine issue of material fact exists and that he is
entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); Sw. Elec. Power Co. v.
Grant, 73 S.W.3d 211, 215 (Tex. 2002). A defendant seeking traditional summary
judgment must either disprove at least one element of each of the plaintiff’s causes of
action or plead and conclusively establish each essential element of an affirmative
defense. Cathey v. Booth, 900 S.W.2d 339, 341 (Tex. 1995) (per curiam); Sanchez v.
6
Matagorda Cty., 124 S.W.3d 350, 352 (Tex. App.—Corpus Christi 2003, no pet.). A no-
evidence summary judgment must show that no evidence exists of one or more essential
elements of a claim on which the adverse party bears the burden of proof at trial. TEX. R.
CIV. P. 166a(i); Timpte Inds., Inc. v. Gish, 286 S.W.3d 306, 310 (Tex. 2009). Once the
motion is filed, the burden shifts to the non-movant to produce evidence raising a genuine
issue of material fact on the elements specified in the motion. TEX. R. CIV. P. 166a(i);
Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006).
Fidelity’s motions for summary judgment raised both traditional and no-evidence
grounds. See TEX. R. CIV. P. 166a(c), (i). Though the burden varies for traditional and
no-evidence summary judgment motions, because all parties brought forth summary
judgment evidence, the differing burdens are immaterial and the ultimate issue is whether
a fact issue exists. Neely v. Wilson, 418 S.W.3d 52, 59 (Tex. 2013) (citing Buck v. Palmer,
381 S.W.3d 525, 527 & n.2 (Tex. 2012)). A fact issue exists, precluding summary
judgment, if there is more than a scintilla of probative evidence to support each element
of the plaintiff’s claim. Id. Evidence is more than a scintilla if it “rises to a level that would
enable reasonable and fair-minded people to differ in their conclusions.” Serv. Corp. Int’l
v. Guerra, 348 S.W.3d 221, 228 (Tex. 2011). Evidence is less than a scintilla if it is “so
weak as to do no more than create a mere surmise or suspicion that the fact exists.”
Regal Fin. Co. v. Tex Star Motors, Inc., 355 S.W.3d 595, 603 (Tex. 2010). We review the
summary judgment evidence in the light most favorable to the non-movant, indulging
every reasonable inference and resolving any doubts against the motion. City of Keller
v. Wilson, 168 S.W.3d 802, 824 (Tex. 2005).
7
Because the trial court’s orders granting summary judgment do not specify the
basis for the rulings, we must affirm the judgments if any of the theories advanced in
Fidelity’s motions are meritorious. W. Invs., Inc. v. Urena, 162 S.W.3d 547, 550 (Tex.
2005). We review the rulings de novo. Neely, 418 S.W.3d at 59.
B. Analysis
The following grounds raised in Fidelity’s summary judgment motions have not
previously been addressed on appeal: (1) whether Kyle lacks standing to assert her
declaratory judgment claims; (2) whether judicial estoppel bars her declaratory judgment,
finance code, and DTPA claims; (3) whether the absolute privilege doctrine bars her
statutory claims; (4) whether the evidence conclusively negates the reliance and
causation elements of Kyle’s statutory claims; and (5) whether there is no evidence
supporting the statutory claims or the claim to declare the special warranty deed invalid.
See Kyle, 520 S.W.3d at 467 n.11.9
1. Standing
In a footnote in its second summary judgment motion, Fidelity argued that Kyle
does not have standing to pursue her claims for declaratory relief because she “divested
herself of all interest to her homestead.” It further contended that, having already
conveyed her interest in the homestead, Kyle has no justiciable interest in the loan
documents because the loan is “without recourse for personal liability.” Kyle argues by
9Fidelity’s second summary judgment motion additionally argued in part that (1) Kyle abandoned
her homestead, and (2) her suit constitutes an impermissible collateral attack on the divorce decree.
However, the trial court sustained Kyle’s objections to these arguments on grounds that they are affirmative
defenses which were not pleaded. The trial court ordered Fidelity to plead these defenses in an amended
answer prior to moving for summary judgment thereon; however, no amended answer asserting these
defenses appears in the record. Accordingly, the trial court could not have properly granted summary
judgment on these grounds. See TEX. R. CIV. P. 94, 166a(c).
8
part of her first issue on appeal that summary judgment was improper if granted on these
grounds.
Standing is a component of subject matter jurisdiction and is a constitutional
prerequisite to maintaining suit. Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d
440, 443–44 (Tex. 1993). A plaintiff has the initial burden to plead facts establishing
standing. See id. at 446. The issue focuses on whether a party has a sufficient
relationship with the lawsuit so as to have a “justiciable interest” in its outcome. Austin
Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845, 848 (Tex. 2005). Generally, a party has
standing to sue if there is (1) “a real controversy between the parties” that (2) “will be
actually determined by the judicial declaration sought.” Id. (citing Tex. Ass’n of Bus., 852
S.W.2d at 443–44). More specifically, chapter 37 of the civil practice and remedies code,
the Uniform Declaratory Judgments Act (UDJA), provides that:
A person interested under a deed, will, written contract, or other writings
constituting a contract or whose rights, status, or other legal relations are
affected by a statute, municipal ordinance, contract, or franchise may have
determined any question of construction or validity arising under the
instrument, statute, ordinance, contract, or franchise and obtain a
declaration of rights, status, or other legal relations thereunder.
TEX. CIV. PRAC. & REM. CODE ANN. § 37.004 (West, Westlaw through 2017 1st C.S.).
As to her claim for a declaration that the special warranty deed is void, Kyle alleged
in her live petition that she is a party to the deed and therefore has a justiciable interest
in her claim to determine its validity.10 However, the sequence of events revealed by the
summary judgment evidence shows that there is no genuine controversy surrounding the
10 In the sections of her live petition addressing standing under the UDJA, Kyle asserts that “[t]he
justiciable controversy centers around [her] homestead rights to the [subject property] and her rights to the
forfeiture of principal and interest paid on the Fidelity Loan.” She claims that “[t]his Court’s declaration of
the void status” of the loan and special warranty deed, respectively, “will resolve this controversy.”
9
validity of the special warranty deed. The parties’ Rule 11 agreement, in which Kyle
agreed to transfer her interest in the homestead to Mark, was executed and filed with the
trial court on June 2, 2011. Kyle executed the special warranty deed a few days later.
But the agreed divorce decree, rendered in August 2011 and also based on the Rule 11
agreement, also awarded the entire homestead to Mark as part of the just and right
division of the marital estate. The decree stated that Kyle “is divested of all right, title,
interest, and claim in and to” the homestead. The decree further stated as follows in a
section entitled “Judgment Effective to Pass Title”:
Notwithstanding any other provisions of this Agreed Final Decree of
Divorce, this judgment shall operate as a conveyance to the parties so
named of the real property described herein and title to such real property
passes as ordered herein, without the necessity of any further action by the
party being divested of title.
This decree shall serve as a muniment of title to transfer ownership of all
property awarded to any party in this Agreed Final Decree of Divorce.
The terms of the unchallenged divorce decree render the validity of the special warranty
deed inconsequential. Even if the trial court were to declare the June special warranty
deed invalid, the August divorce decree would effectuate the same result—i.e., a 100%
conveyance of Kyle’s interest in the homestead to Mark. Accordingly, the judicial
declaration sought by Kyle would not “actually determine” a “real controversy” between
the parties. See Austin Nursing Ctr., Inc., 171 S.W.3d at 848. It follows that Kyle lacked
standing under the UDJA to bring her claim for a declaration that the special warranty
deed is invalid. See id.
The terms of the agreed divorce decree also deprive Kyle of standing to seek a
declaration that the deed of trust securing the home equity loan is void. In particular,
consistent with the Rule 11 agreement, the decree allocated 100% of the debt associated
10
with the loan to Mark11; and as Fidelity notes, the Texas Constitution provides that a home
equity loan is “without recourse for personal liability against each owner and the spouse
of each owner . . . .” TEX. CONST. art. XVI, § 50(a)(6)(C); see Patton v. Porterfield, 411
S.W.3d 147, 159 (Tex. App.—Dallas 2013, pet. denied). The terms of the decree,
combined with the constitutional provision cited above, ensured that Kyle could not be
held personally liable on the home equity loan, regardless of whether the trial court
declared the deed of trust securing the loan void. Kyle therefore lacked a justiciable
interest in the outcome of this claim. See Austin Nursing Ctr., Inc., 171 S.W.3d at 848.
Kyle argues on appeal that she has standing to seek these declarations because
she “remain[s] an obligor on the promissory note, her credit continued to be affected by
the loan despite the conveyance of the collateral to her husband in the divorce, and she
is still named as a respondent in Fidelity’s latest foreclosure application.” But Kyle did not
allege these specific facts in her live petition and her appellate brief directs us to no
evidence in the summary judgment record establishing those facts. Accordingly, she has
not met her burden to allege facts showing that she has standing to seek a declaration
that the deed of trust is void. See Tex. Ass’n of Bus., 852 S.W.2d at 446.
We observe that Kyle’s claims are focused principally on the alleged
misrepresentations by Mark and Fidelity as to whether the home equity loan was valid
11 The decree stated:
IT IS ORDERED AND DECREED that the husband, MARK KYLE, shall pay, as a part of
the division of the estate of the parties, and shall indemnify and hold the wife and her
property harmless from any failure to so discharge, these items:
H-1. The balance due, including principal, interest, tax, and insurance escrow, on the
promissory note executed by MARK KYLE and wife, WENDY KYLE, in the original principal
sum of $1,100,00.00 [sic] dated May 29, 2004, payable to Fidelity Bank of Texas, and
secured by deed of trust on the real property awarded in this decree to the husband . . . .
11
and whether she could be held personally liable thereon. She asserts that, without those
alleged misrepresentations, she would not have entered into the Rule 11 agreement to
convey her interest in the homestead. But, as the supreme court noted, “[t]here is no
basis for declaratory relief when a party is seeking in the same action a different,
enforceable remedy, and a judicial declaration would add nothing to what would be
implicit or express in a final judgment for the enforceable remedy.” Kyle, 522 S.W.3d at
467 n.10 (citing Patel v. Tex. Dep’t of Licensing & Regulation, 469 S.W.3d 69, 79 (Tex.
2015) (holding that “courts will not entertain an action [against a governmental unit] under
the [UDJA] when the same claim could be pursued through different channels”); Etan
Indus., Inc. v. Lehmann, 359 S.W.3d 620, 624 (Tex. 2011) (per curiam) (noting that a
declaratory judgment claim “must do more than merely duplicate the issues litigated via
[other] claims” in order to authorize an award of attorney’s fees under the UDJA);
Universal Printing Co. v. Premier Victorian Homes, Inc., 73 S.W.3d 283, 296 (Tex. App.—
Houston [1st Dist.] 2001, pet. denied)).12 To the extent Kyle seeks relief in connection
with the alleged misrepresentations, her remaining statutory claims provide an
enforceable remedy and the declarations she seeks “would add nothing to what would be
implicit or express in a final judgment for the enforceable remedy.” See id.
For the foregoing reasons, we conclude that the trial court’s summary judgment on
Kyle’s declaratory judgment claims was proper on grounds that she lacked standing. This
12 The supreme court held that Kyle’s declaratory judgment claims are not moot merely because
“[w]hile the appeal was pending, Mark sold the encumbered property at issue to a third party” and the home
equity loan was paid off.” Kyle v. Strasburger, 522 S.W.3d 461, 467 (Tex. 2017). Nevertheless, it explicitly
declined to opine on “whether the above-referenced doctrine precludes Kyle from litigating them alongside
her remaining statutory claims.” Id. at 467 n.10.
12
part of Kyle’s first issue on appeal is overruled. We proceed to address the remaining
summary judgment grounds as they pertain to Kyle’s remaining statutory claims.
2. Judicial Estoppel
Fidelity argued in its second summary judgment motion that Kyle is judicially
estopped from asserting that she did not execute the home equity loan documents
“because she successfully took the contrary position in the divorce action.” Fidelity’s
argument is based on the recital, in the section of the divorce decree regarding the just
and right division of marital liabilities, that both Kyle and Mark “executed” the promissory
note associated with the loan. See supra n.11. Fidelity notes that Kyle signed the decree
under a statement indicating that she “approved and consented to” both the “form and
substance” of the decree. It argues that this negates the contrary assertion made by Kyle
as part of her finance code and DTPA claims.
Judicial estoppel “precludes a party from adopting a position inconsistent with one
that it maintained successfully in an earlier proceeding.” Pleasant Glade Assembly of
God v. Schubert, 264 S.W.3d 1, 6 (Tex. 2008). “The doctrine is not strictly speaking
estoppel, but rather is a rule of procedure based on justice and sound public policy.” Id.
“Its essential function ‘is to prevent the use of intentional self-contradiction as a means of
obtaining unfair advantage.’” Id. (quoting Andrews v. Diamond, Rash, Leslie & Smith, 959
S.W.2d 646, 650 (Tex. App.—El Paso 1997, writ denied)).
By part of her first issue on appeal, Kyle contends that the recital in the decree
cannot give rise to judicial estoppel because it “is not a sworn statement.” We agree.
Judicial estoppel may be based only on a sworn statement made in a prior judicial
proceeding. See Long v. Knox, 291 S.W.2d 292, 295 (Tex. 1956) (“Under the doctrine of
13
judicial estoppel, as distinguished from equitable estoppel by inconsistency, a party is
estopped merely by the fact of having alleged or admitted in his pleadings in a former
proceeding under oath the contrary to the assertion sought to be made.” (emphasis
added)); In re Marriage of Butts, 444 S.W.3d 147, 151 (Tex. App.—Houston [14th Dist.]
2014, no pet.); Owen v. Knop, 853 S.W.2d 638, 641 (Tex. App.—Corpus Christi 1993,
writ denied) (noting that “the doctrine of judicial estoppel serves to uphold the sanctity of
the oath, and to eliminate the prejudice which would result to the administration of justice
if a litigant were to swear one way one time and a different way another time”). Citing
Schubert, Fidelity argues that a statement need not be sworn in order to trigger judicial
estoppel, but the Texas Supreme Court held nothing of the sort in that case. See 264
S.W.3d at 6. Though the Schubert Court did not recite the well-established precedent
that a statement must be sworn in order to give rise to judicial estoppel, it held that the
doctrine did not apply in that case for three unrelated reasons. See id. Therefore, it is
inapposite.
Because the recital in the agreed divorce decree was not a sworn statement, it
could not have served as the basis for judicial estoppel. Therefore, the trial court erred if
it granted summary judgment on these grounds. We sustain this part of Kyle’s first issue.
3. Absolute Privilege
It is first summary judgment motion, Fidelity argued that Kyle’s statutory claims are
barred because they are based on statements made in the foreclosure proceedings and
are therefore absolutely privileged. See, e.g., Neely, 418 S.W.3d at 62 (“[T]he common
law has recognized a judicial proceedings privilege since at least 1772 for parties,
witnesses, lawyers, judges, and jurors.”); Krishnan v. Law Offices of Preston Henrichson,
14
P.C., 83 S.W.3d 295, 302 (Tex. App.—Corpus Christi 2002, pet. denied) (“Absolute
privilege provides that communications that are made in the due course of a judicial
proceeding cannot serve as the basis for a defamation action.”). On appeal, Kyle asserts
by her third issue that the doctrine of absolute privilege does not apply to her statutory
claims because those claims “does not sound in defamation and she does not seek
defamation-type damages.”
This Court addressed the issue of absolute privilege as it pertains to this case in
our 2016 opinion affirming the trial court’s denial of Fidelity’s motion for sanctions. See
Strasburger v. Kyle, No. 13-14-00079-CV, 2016 WL 1072618, at *1 (Tex. App.—Corpus
Christi Mar. 17, 2016, no pet.) (mem. op.). In considering whether Kyle’s pleadings were
frivolous because they were barred by the absolute privilege doctrine, we noted that the
doctrine “typically applies” only in “claims of libel and slander arising out of judicial
proceedings.” Id. at *3 (citing Reagan v. Guardian Life Ins. Co., 166 S.W.2d 909, 912
(Tex. 1942)). We then held:
. . . . Kyle’s claims are not based solely on Fidelity’s legal filings for
foreclosure. There were communications between at least the bank
president and Kyle’s agents regarding the threatened foreclosure by Fidelity
as well as alleged verbal threats to foreclose even after Fidelity knew Kyle
claimed both lack of consent to the underlying loan and forgery. Fidelity
sent a notice to the Internal Revenue Service. Further, Fidelity was directly
involved in negotiations surrounding the Rule 11 agreement and special
warranty deed wherein Kyle signed away her interest. In its reply brief,
Fidelity cites Perdue, Brackett, Flores, Utt & Burns v. Linebarger, Goggan,
Blair, Sampson & Meeks, L.L.P., 291 S.W.3d 448, 451 (Tex. App.—Fort
Worth 2009, no writ). However, once again, the case deals with libel or
slander in a governmental context: “the affirmative defense that the alleged
defamatory statements were absolutely privileged under the doctrine of
quasi-judicial immunity.” Id.; see also Bird v. W.C.W., 868 S.W.2d 767,
771–72 (Tex. 1994) (stating that a communication was privileged where the
father’s damages were basically defamation).
Moreover, as Kyle argues, the Lee case observes: “We know of no Texas
case where absolute privilege was asserted as anything other than an
15
affirmative defense to a defamation claim.” In re Lee, 995 S.W.2d 774, 776
(Tex. App.—San Antonio 1999, orig. proceeding).13
With due consideration for the above arguments and authorities, we hold
that absolute privilege did not apply, or there was a sound argument against
its application under these facts.
Strasburger, 2016 WL 1072618, at *3 (footnote in original).
The question we addressed in Strasburger (whether Kyle’s argument against
application of the absolute privilege doctrine was frivolous) differs slightly from the one
that is presented here (whether Fidelity conclusively established application of the
doctrine). See id.; see also Cathey, 900 S.W.2d at 341. Nevertheless, the observations
we made in the earlier case are salient to this appeal. In particular, as we noted in 2016,
Kyle’s statutory claims are based in part on her allegations that Fidelity threatened her
with foreclosure and notified the IRS of her potential liability, even after Fidelity was made
aware that she was claiming that her signature was forged on the loan documents and
she did not consent to the loan. Kyle claims that Fidelity’s threats were false because the
loan was void, and that she would not have otherwise agreed to transfer her interest in
the homestead. The communications made by Fidelity directly to Kyle and to the IRS are
independent of the allegations made by Fidelity in its foreclosure pleadings and do not
constitute statements made in the course of judicial proceedings.
In any event, even assuming that Fidelity’s threats were made only in the context
of judicial proceedings, the judicial privilege doctrine does not apply to claims of the sort
brought by Kyle. Fidelity is correct that the judicial privilege doctrine may, under certain
circumstances, apply in non-defamation cases. But those circumstances are limited to
13 We acknowledge other cases sometimes extend the absolute privilege rule into a broader context
but here other proof takes the claim outside the rule.
16
cases in which a plaintiff, though asserting a non-defamation claim, seeks “defamation
damages”—i.e., damages for loss of reputation and mental anguish. See Bird, 868
S.W.2d at 772 (finding absolute privilege applied in negligence suit because the damages
sought “are basically defamation damages”); 5-State Helicopters, Inc. v. Cox, 146 S.W.3d
254, 259 (Tex. App.—Fort Worth 2004, pet. denied) (holding absolute privilege applied in
tortious interference with contract claim because plaintiff sought “defamation-type
damages based on the allegedly libelous communications”); Laub v. Pesikoff, 979 S.W.2d
686, 691–92 (Tex. App.—Houston [1st Dist.] 1998, pet. denied) (holding absolute
privilege applied in intentional infliction of emotional distress claim because essence of
claim was that plaintiff was injured “as a result of the communication of allegedly false
statements during a judicial proceeding”); see also Tex. Mut. Ins. Co. v. Ray Ferguson
Interests, Inc., 2006 WL 648834, at *9 (Tex. App.—Houston [1st Dist.] 2006, pet. denied)
(mem. op.) (holding that absolute privilege applied in deceptive insurance practices claim
under Texas Insurance Code because “although [plaintiff] did not plead defamation, its
theory of damages was that its clients, creditors, and bonding companies abandoned it,
in part, because of the [insurer’s] allegations and assertions . . . made in the course of
this judicial proceeding”); Steadfast Ins. Co. v. SMX 98, Inc., No. CIV.A. H-06-2736, 2009
WL 890398, at *22 (S.D. Tex. Mar. 30, 2009) (mem. op.). To the extent Kyle’s statutory
claims are based on statements made in judicial proceedings, they do not seek relief akin
to reputational or mental anguish damages—instead, they seek damages arising from
Kyle’s agreement to transfer her interest in the homestead to Mark.14
14 It is also noteworthy that misrepresentations “in a judicial or governmental proceeding” are
explicitly made actionable under the Texas Finance Code and DTPA provisions pleaded by Kyle. See TEX.
FIN. CODE ANN. § 392.304(a)(8) (West, Westlaw through 2017 1st C.S.) (providing generally that “in debt
collection or obtaining information concerning a consumer, a debt collector may not use a fraudulent,
17
We conclude that the absolute privilege doctrine does not bar Kyle’s Texas
Finance Code, DTPA, and statutory fraud claims. Her third issue is sustained.
4. Conclusive Negation of Reliance and Causation
Fidelity argued in both summary judgment motions that Kyle’s deposition testimony
conclusively negates her allegations that she relied on misrepresentations by Fidelity in
signing the Rule 11 agreement, agreed divorce decree, and special warranty deed. It
also argued that her testimony conclusively negates the causation element of her
statutory claims. In her second issue on appeal, Kyle argues that she produced evidence
generating an issue of fact as to the reliance and causation elements.15
In its summary judgment motions, Fidelity cited the following deposition testimony
given by Kyle:
Q. [Fidelity’s counsel] You entered into a settlement with your husband,
with Mark Kyle. Correct?
A. [Kyle] Yes.
Q. Okay. And that settlement split up both the debts
and the assets. Correct?
[Kyle’s counsel]: Objection, form.
THE WITNESS: I believe that’s what a divorce is.
deceptive, or misleading representation . . . misrepresenting the character, extent, or amount of a
consumer debt, or misrepresenting the consumer debt’s status in a judicial or governmental
proceeding . . . ”); id. § 392.404(a) (West, Westlaw through 2017 1st C.S.) (providing that a violation of
finance code chapter 392 is also actionable under the DTPA). This indicates that the clear intent of the
Legislature was to exclude these statutory claims from application of the judicial privilege doctrine.
15 Kyle also argues by her second issue that reliance is not an essential element of her claim under
the Texas Finance Code. See id. § 392.403(a)(2) (West, Westlaw through 2017 1st C.S.). For purposes
of this issue, we will assume, but not decide, that reliance is an element of that cause of action. It is
undisputed that reliance is an essential element of a claim for fraud in a real estate transaction under the
Texas Business and Commerce Code. See TEX. BUS. & COM. CODE ANN. § 27.01(a)(1)(B) (West, Westlaw
through 2017 1st C.S.).
18
Q. And you entered into that agreement based upon
the advice of—of your lawyers. Correct?
A. Yes.
Q. Okay. And your lawyers being Ms. Jodi Lazar and
Ms. Rikki Rivers. Correct?
A. Yes.
Q. And also Mr. Tom Virr?
A. Yes. He—yes.
Q. Okay. Okay. Was there anybody else who was
giving you advice as to whether or not to enter into
that divorce settlement, aside from those three
lawyers?
A. No.
Q. Okay. And you relied on that advice. Correct?
A. Yes.
Q. Okay. In looking back at it now, you think that was
bad advice. Correct?
A. Yes.
Q. Okay. And it was—it was—it was the advice from
those attorneys that caused you to enter into that
agreement and to, as you say, I think, give away
your half of the house. Is that right?
[Kyle’s counsel]: Object objection, form.
THE WITNESS: Yes. I believe that Rikki Rivers stated specifically
that even if the signature was forged, that I would
still be responsible for the debt.
Q. [Fidelity’s counsel] And did Jodi Lazar tell you something similar?
A. Yes.
Fidelity argued that this shows Kyle relied solely on her three attorneys’ “advice,” and did
not rely on anyone else’s “advice,” in agreeing to the terms of the divorce decree.
19
In response, Kyle contends that, even though the only “advice” she relied on was
that of her attorneys, she also relied on Fidelity’s alleged misrepresentations. She points
to additional testimony later in the same deposition which she argues creates a fact issue
as to whether she relied on Fidelity’s representations. In particular, Kyle testified as
follows:
Q. [Fidelity’s counsel] . . . [Y]ou allege in Paragraph 38 [of the live
petition] that your husband obtained the Fidelity
loan documents through deception. Do you see
that?
A. [Kyle] Yes.
Q. Okay. And then you add my clients and say that
they obtained your execution of the Rule 11
Agreement through deception. Correct?
A. Yes.
Q. Okay. What deception did my clients perform on
you that got you to execute the Rule 11
Agreement?
A. They said that they were going to foreclose, and I
believed that I was liable for the debt.
Q. And they said they were going to foreclose in the
documents, the application for foreclosure.
Correct?
A. . . . Yes.
Q. In Count 4, “Common Law Fraud,” . . . you allege
that the Defendants committed common law fraud
when they misrepresented to you that your home
would be foreclosed upon. Correct?
A. Yes.
Q. Okay. And that representation, at least by my
clients, was, again, in that application for
foreclosure. Correct?
[Kyle’s counsel]: Objection, form.
20
THE WITNESS: Yes.
Q. [Fidelity’s counsel] Okay. Count 5, the “Negligent Misrepresentation,”
you say, “The Defendants are guilty”—this is
Paragraph 44—“of negligent misrepresentation
because they did not exercise reasonable care
when they represented to Wendy that her interest
in the River Hills home would be foreclosed upon
if she did not sign the Rule 11 Agreement.[”] Do
you see that?
A. [Kyle] Yes.
Q. Okay. Who told you that if you didn’t sign the Rule
11 Agreement, the home would be foreclosed
upon?
A. Jodi Lazar.
Q. Who else?
A. Rikki Rivers.
Q. Anybody else?
A. That’s it.
We agree with Kyle that this testimony was enough to establish a genuine issue of
material fact as to whether she relied on Fidelity’s alleged misrepresentations in agreeing
to convey her share of the homestead to Mark. The testimony cited by Fidelity in its
summary judgment motions established that Kyle relied on the advice of her attorneys in
signing the agreed divorce decree; however, the Rule 11 agreement was executed before
the divorce decree, so it is plausible that her attorneys were simply advising Kyle to
comply with the terms of the earlier agreement when they advised her to sign the decree.
Kyle additionally testified that only her attorneys—not Fidelity—told her “if you didn’t sign
the Rule 11 Agreement, the home would be foreclosed upon.” But that narrow fact does
not conclusively establish that she did not rely on Fidelity’s alleged misrepresentations.
The misrepresentations by Fidelity, as alleged by Kyle, did not explicitly involve the Rule
21
11 agreement at all—instead, they were confined to the status or character of the home
equity loan.
Kyle cites cases holding in the fraud context that, even if a misrepresentation is
“not a party’s sole inducement for entering into the contract,” it “may still be material so
long as the party relied on it.” Reservoir Sys., Inc. v. TGS-NOPEC Geophysical Co., L.P.,
335 S.W.3d 297, 305 (Tex. App.—Houston [14th Dist.] 2010, pet. denied); Brush v. Reata
Oil & Gas Corp., 984 S.W.2d 720, 727 (Tex. App.—Waco 1998, pet. denied). Although
these cases discuss materiality rather than reliance, they are instructive because they
show that there may be multiple pieces of information upon which a party relies when
agreeing to enter into a contract. As set forth above, when asked what “deception” Fidelity
engaged in that “got [her] to execute” the Rule 11 agreement, Kyle replied: “They said
that they were going to foreclose, and I believed that I was liable for the debt.” This
statement constitutes more than a scintilla of evidence that Kyle relied upon Fidelity’s
representations when she first agreed to convey her share of the homestead, and it
constitutes more than a scintilla of evidence that those representations proximately
caused her to do so. Therefore, Fidelity did not meet its burden to conclusively disprove
the reliance element of Kyle’s statutory claims. See Cathey, 900 S.W.2d at 341. Kyle’s
second issue is sustained.
5. No-Evidence Summary Judgment
Finally, we address Kyle’s fourth issue on appeal, by which she argues that she
provided more than a scintilla of probative evidence as to the challenged elements of her
22
statutory claims, thereby defeating Fidelity’s no-evidence grounds for summary
judgment.16
To establish fraud in a real estate transaction under chapter 27 of the business
and commerce code, a plaintiff must prove these essential elements: (1) a transaction
involving real estate; (2) the defendant made a false representation of fact, a false
promise, or benefited by not disclosing that some other person’s representation or
promise was false; (3) the false representation or promise was made to induce the plaintiff
to enter into a contract; (4) the plaintiff relied on the false representation or promise and
entered into the transaction; and (5) the reliance caused the plaintiff’s injury. Kyle, 520
S.W.3d at 81; see TEX. BUS. & COM. CODE ANN. § 27.01(a) (West, Westlaw through 2017
1st C.S.). Fidelity’s first summary judgment motion challenged each element listed above
except the first.
To recover under chapter 392 of the Texas Finance Code, a plaintiff must prove
that: (1) a debt collector used “a fraudulent, deceptive, or misleading representation that
employs” one of several prohibited practices, including, as pleaded here,
“misrepresenting the character, extent, or amount of a consumer debt, or misrepresenting
the consumer debt’s status in a judicial or governmental proceeding”; and (2) the plaintiff
sustained actual damages as a result. TEX. FIN. CODE ANN. §§ 392.304(a)(8),
392.403(a)(2) (West, Westlaw through 2017 1st C.S.). A violation of chapter 392 is also
a deceptive trade practice actionable under the DTPA. Id. § 392.404(1) (West, Westlaw
16 Kyle also argues by this issue that she produced evidence as to all essential elements of her
claim for declaratory judgment that the special warranty deed is invalid. However, we have already held
that she did not have standing to raise that claim. Therefore, we do not address that argument. See TEX.
R. APP. P. 47.1.
23
through 2017 1st C.S.). Fidelity’s second summary judgment motion challenged each
element of these claims.
We have already held above that Kyle’s deposition testimony—in which she stated
that Fidelity’s application for foreclosure was the “deception” that “got [her] to execute”
the Rule 11 agreement—was sufficient to create a fact issue as to the elements of reliance
and causation. See TEX. BUS. & COM. CODE ANN. § 27.01(a); TEX. FIN. CODE ANN.
§§ 392.403(a)(2). We will proceed to consider the remaining elements of Kyle’s statutory
claims.
Misrepresentation is an essential element of all three statutory claims. See TEX.
BUS. & COM. CODE ANN. § 27.01(a)17; TEX. FIN. CODE ANN. §§ 392.304(a)(8). Kyle argues
that Fidelity’s foreclosure application is evidence supporting this element. The
application, signed by Fidelity’s counsel and filed with the district court on March 24, 2011,
stated in relevant part as follows:
FIDELITY BANK OF TEXAS, the applicant, seeks an order from this court
pursuant to TEX. R. CIV. P. 736 allowing foreclosure of a lien on real property
securing a debt owed to the application by Mark Kyle and Wendy Kyle, the
respondents . . . .
The respondents are residents of Travis County, Texas, and are the
persons obligated to pay the debt described in Paragraph II below,
according to the records of the applicant.
On May 20, 2004, the respondents executed and delivered to the applicant
a Texas Home Equity Extension of Credit in the amount of [$1,100,000] to
be paid in equal monthly installments commencing on June 20, 2004 for
thirty years in the amount of [$5,905.32]. The respondents also executed a
Texas Home Equity Deed of Trust in favor of the trustee, in trust for the
17 Kyle did not allege that Fidelity made a false promise or benefited by not disclosing that some
other person’s representation or promise was false. Therefore, to establish statutory fraud in a real estate
transaction, she had to show that Fidelity made a “false representation of a past or existing material fact.”
TEX. BUS. & COM. CODE ANN. § 27.01(a)(1).
24
benefit of the applicant, as security for the Texas Home Equity Extension of
Credit.
The debt owed by the respondents to the applicant is secured by a lien
created under Article XVI, Section 50(a)(6) of the TEXAS CONSTITUTION on
the [subject property] . . . .
The respondents, although obligated by the terms of Home Equity
Extension of Credit . . . , failed to pay the property taxes. . . . The failure to
pay the property taxes in a timely manner constituted a default under the
Texas Home Equity Deed of Trust.
Attached to the application was a copy of the forged deed of trust. According to Kyle, the
application contained the misrepresentations upon which she relied in agreeing to transfer
her share of the homestead to Mark.
Fidelity argues that the foreclosure application cannot be evidence of a
misrepresentation because it also contained an extensive disclaimer which noted Kyle’s
claims of forgery, explained that she already conveyed her interest in the property to Mark,
and affirmed that the loan is “without recourse for personal liability” for Kyle.18 However,
the version of the foreclosure application which was attached as evidence to Fidelity’s
summary judgment motions did not contain this disclaimer. Instead, as Fidelity concedes,
this disclaimer was included for the first time in a subsequent application for foreclosure
filed on December 9, 2013, well after the trial court rendered its two summary judgment
18 The entire disclaimer is as follows:
Wendy Kyle is listed as a Respondent in these proceedings in order that Petitioner may
comply with Texas law and ensure that Ms. Kyle receives notice of these proceedings.
See Tex. R. Civ. P. 736.1(d)(1)(8). Ms. Kyle claims that she did not sign the Note and
Deed of Trust. On June 6, 2011, she executed a Special Warranty Deed, deeding her
interest in the property to Mark Kyle. A true and correct copy of the Special Warranty Deed
is attached to the Affidavit of Terry Whitley as Exhibit “F”. In the Special Warranty Deed,
Mr. Kyle agrees to “indemnify and hold [Ms. Kyle] harmless from payment of the note and
from performance of [her] obligations specified in the instruments securing payment of the
note.” Accordingly, while Ms. Kyle’s name is on the loan agreement, as evidenced by
Exhibits “B” and "C”, Petitioner recognizes that Ms. Kyle no longer has an interest in the
Property and that Mr. Kyle agreed to assume all liability on the Note. Because this is a
home equity loan, it without recourse for personal liability as to Ms. Kyle [sic].
25
orders. Indeed, the version of the application containing the disclaimer does not appear
in the trial court record, but was attached to Fidelity’s brief on appeal. Accordingly, we do
not consider the disclaimer in our analysis. See TEX. R. CIV. P. 166a(c); Nguyen v.
Citibank N.A., 403 S.W.3d 927, 932 (Tex. App.—Houston [14th Dist.] 2013, pet. denied);
Blankinship v. Brown, 399 S.W.3d 303, 309 (Tex. App.—Dallas 2013, pet. denied).
Instead, considering only summary judgment evidence properly before the trial
court, we conclude that there was more than a scintilla of evidence that Fidelity made a
misrepresentation concerning the character and status of the debt associated with the
home equity loan. See TEX. BUS. & COM. CODE ANN. § 27.01(a); TEX. FIN. CODE ANN.
§§ 392.304(a)(8).
Next, Kyle’s statutory fraud claim required a showing that Fidelity’s representations
were made to her for the purpose of inducing her to enter into a contract. See TEX. BUS.
& COM. CODE ANN. § 27.01(a)(1)(A). As evidence to support this element, Kyle points to
an email from her attorney to Fidelity’s attorney, which she attached as evidence to her
summary judgment response. The email, dated June 8, 2011, contained a copy of the
newly-executed Special Warranty Deed and stated in part: “As we discussed, since
Wendy Kyle no longer has an interest in the property, you will dismiss her with prejudice
from the foreclosure action.” Kyle’s summary judgment response also included a copy of
the notice of non-suit filed by Fidelity on June 21, 2011 dismissing Kyle from the
foreclosure action. This constitutes more than a scintilla of evidence that Fidelity’s
representations in the foreclosure application were made to Kyle for the purpose of
inducing her to enter into the Rule 11 agreement and special warranty deed.
26
Finally, Kyle was required to show that she suffered actual damages as part of her
finance code and DTPA claims. See TEX. FIN. CODE ANN. § 392.403(a)(2). Kyle testified
at deposition that she executed the Rule 11 agreement and special warranty deed
because of the representations made by Fidelity in the foreclosure application. Her theory
is that, had Fidelity not made those representations, she would not have agreed to convey
her share of the homestead as part of the divorce settlement, and she then could have
challenged the foreclosure process. Subsequent events in these proceedings have lent
significant credence to that theory. In particular, the supreme court held that, assuming
Kyle did not consent to the home equity loan, the lien associated with the loan is void ab
initio because it did not comply with the Texas Constitution. Kyle, 522 S.W.3d at 465
(citing Wood, 505 S.W.3d at 548); see TEX. CONST. art. XVI, § 50(a)(6)(A) (requiring a
foreclosure-eligible home-equity loan to be “secured by a voluntary lien on the homestead
created under a written agreement with the consent of each owner and each owner’s
spouse”). Thus, had she retained her interest in the homestead, Kyle would have been
able to make a colorable case that foreclosure was prohibited. See Kyle, 522 S.W.3d at
465 n.7 (noting that article XVI, section 50 “describes what a home-equity loan must look
like if a lender wants the option to foreclose on a homestead upon borrower default”). We
conclude that Kyle has produced more than a scintilla of evidence that she suffered actual
damages as a result of Fidelity’s alleged misrepresentations.
Having found more than a scintilla of evidence to support each of the challenged
elements, we conclude that trial court erred if it granted summary judgment on no-
evidence grounds. Kyle’s fourth issue is sustained.
27
C. Repleading of Forfeiture Claim
In her motion for rehearing, Kyle observes that the Texas Supreme Court noted as
follows in its 2017 opinion:
Kyle argues that, as we recognized in Garofolo, an independent contractual
right to compel forfeiture exists because the constitutional forfeiture
provision was incorporated into the terms of the loan. She requests that the
case be remanded in the interest of justice in the event she has not
adequately pled a forfeiture claim based on the terms of the loan. She
further argues that she may pursue such a claim even though she is not a
formal party to the loan agreement. As these issues have not been
considered by the lower courts, and we are remanding to the court of
appeals to consider other as-yet unaddressed arguments, we leave it to that
court to consider this request in the first instance.
Id. at 466. Kyle argues that, in light of the supreme court’s instructions, we should
“consider whether and how [she] could adequately plead a forfeiture cause of action” in
this opinion.
The forfeiture claim raised in Kyle’s live petition was based solely on article XVI,
section 50 of the Texas Constitution, and the Texas Supreme Court affirmed the dismissal
of that claim. Id. Having found that summary judgment was unwarranted on some of
Kyle’s other claims, we will remand the case to the trial court, and we clarify that nothing
in this opinion shall be construed as prohibiting Kyle from repleading “a forfeiture claim
based on the terms of the loan” on remand. See id.; see also TEX. R. CIV. P. 63. However,
because such a claim has not yet been pleaded, we decline to address whether “she may
pursue such a claim even though she is not a formal party to the loan agreement.” See
Kyle, 522 S.W.3d at 566; Valley Baptist Med. Ctr. v. Gonzalez, 33 S.W.3d 821, 822 (Tex.
2000) (noting that Texas courts have no jurisdiction to render advisory opinions).
28
III. CONCLUSION
The trial court properly dismissed Kyle’s declaratory judgment claims because Kyle
lacked standing. However, summary judgment was improper as to Kyle’s finance code,
DTPA, and statutory fraud claims. Accordingly, we affirm the trial court’s judgment of
dismissal as to the declaratory judgment claims, reverse the remainder of the judgment,
and remand for further proceedings consistent with this opinion.
DORI CONTRERAS
Justice
Delivered and filed the
4th day of April, 2019.
29