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Metcalf v. Wilmington Savings Fund Society

Court of Appeals of Texas, Third District, Austin

March 29, 2017

Mark Metcalf and Cheryl Metcalf, Appellants
v.
Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust, Not In Its Individual Capacity but solely as Trustee for BCAT 2014-9TT, and Rushmore Loan Management Services, LLC, Appellees

         FROM THE DISTRICT COURT OF TRAVIS COUNTY, 353RD JUDICIAL DISTRICT NO. D-1-GN-003696, HONORABLE LORA LIVINGSTON, JUDGE PRESIDING

          Before Chief Justice Rose, Justices Field and Bourland.

          MEMORANDUM OPINION

          Scott K. Field, Justice.

         Mark and Cheryl Metcalf challenge the trial court's rendition of summary judgment in favor of Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust (Wilmington), as Trustee for BCAT 2014-9TT (BCAT), and Rushmore Loan Management Services, LLC (Rushmore) (collectively, "the Lender Defendants"). The trial court ordered that all right, title, and interest to certain real property located in Travis County was fully vested in Wilmington pursuant to a substitute trustee's deed executed after a foreclosure sale. We will affirm.

         BACKGROUND[1]

         In 2005, the Metcalfs obtained a purchase money loan to acquire property located at 7401 Twilight Shadow Drive in Austin (the Property). Cheryl Metcalf executed a promissory note in the original principal amount of $400, 000. The Note was secured by a Deed of Trust in which the Metcalfs granted and conveyed the Property to the trustee to hold in trust with the power of sale. The Note and Deed of Trust were assigned and transferred over the years, but the parties agree that Wilmington and Rushmore were the mortgagee and mortgage servicer when the Property was ultimately sold in a foreclosure sale.

         In 2010, Cheryl Metcalf stopped making payments on the loan and BAC Home Loans Servicing, LP, at that time the mortgage servicer, sent the Metcalfs a notice that if they did not pay a specific amount by a specific date it would accelerate the debt. The Metcalfs did not tender the amount BAC demanded, and on June 23, 2010, BAC advised them that it had accelerated the Note and gave notice of a foreclosure sale. Before the sale occurred, the Metcalfs petitioned a federal bankruptcy court in the Western District of Texas for bankruptcy relief under Chapter 13 of the United States Bankruptcy Code. The case was converted to a Chapter 7 case, and the Metcalfs were personally discharged in March 2011.

         After the discharge, BAC sent another notice of acceleration of the Note in May 2011 along with notice of a foreclosure sale to be held on July 5, 2011. Days before the sale was scheduled to occur, the Metcalfs filed suit in Travis County District Court (the 2011 suit) seeking to prevent the sale, alleging that BAC did not timely offer them a loan modification and interfered with their attempts to complete a sale of the property that would have permitted them to pay the loan in full. The trial court granted the Metcalfs' request for a temporary restraining order preventing the foreclosure sale. BAC filed a counterclaim in the 2011 suit on November 4, 2013, seeking a declaration that it had complied with Texas law and the terms of the Deed of Trust and Note and was therefore authorized to proceed with a non-judicial foreclosure sale of the Property pursuant to Texas law and the terms of the Deed of Trust. In the alternative, BAC requested that the court sign an order foreclosing on the lien and authorizing sale of the Property. BAC filed a motion for summary judgment on the Metcalfs' claims against it, as well as a motion for summary judgment on its counterclaim, and requested the Court to order that BAC was authorized to proceed with foreclosure of the Property in accordance with the terms of the Deed of Trust.

         On the day of the summary-judgment hearing, the Metcalfs filed a notice of nonsuit of their claims against BAC. After the hearing, the trial court signed an order granting BAC's motion for summary judgment in which it recited that "[BAC], or its successors or assigns, may lawfully proceed with the foreclosure sale of the property at issue in this litigation pursuant to the terms of the Deed of Trust and § 51.002 of the Texas Property Code." The order, dated December 2, 2013, included the address and legal description of the Property and directed that "[u]pon conveyance of the property by Substitute Trustee's Deed after public sale, [BAC] will file a Report of Sale with the Court, and will thereafter petition the Court for an Order confirming that the public sale was held in accordance with the loan documents." Neither party filed a notice of appeal from or otherwise challenged the trial court's order.

         During the next two years, rather than sell the Property in a foreclosure sale, the successor mortgage servicers, Bank of America, N.A. and later Rushmore, sent the Metcalfs several notices asking them to pay balances due on the Note. The Metcalfs did not make any payments on the Note and twice more sought protection under Chapter 13 of the United States Bankruptcy Code. After the third bankruptcy proceeding was dismissed with prejudice in July 2015, Rushmore sent another notice of acceleration of the Note and included a notice that a foreclosure sale was scheduled for September 1, 2015. On August 31, 2015, the Metcalfs filed the proceeding underlying this appeal, seeking a temporary restraining order to prevent the sale. The trial court did not grant the requested relief. The public sale of the Property went forward hours before the Metcalfs filed a fourth bankruptcy proceeding. The substitute trustee executed a Substitute Trustee's Deed conveying the Property to Wilmington.

         The Metcalfs then amended their petition to allege that the Lender Defendants had "lost any lien or claim to the [P]roperty through the running of limitations by failing to file a lawsuit or foreclose within four years of accelerating the debt" on June 23, 2010. According to the Metcalfs, the Lender Defendants' lien or claim to the Property had become, through the passage of time, "invalid and unenforceable." See Tex. Civ. Prac. & Rem. Code § 16.035(a) (providing that person must bring suit for recovery of real property under real property lien or foreclosure of real property not later than four years after day cause of action accrues), (b) (sale of real property under power of sale in mortgage or deed of trust that creates real property lien must be made not later than four years after day cause of action accrues), (c) (on expiration of four-year limitations period real property lien and power of sale to enforce real property lien become void). The Metcalfs sought a declaration that limitations had run on the Lender Defendants' right to foreclose several months before the September 2015 sale and asked the trial court to set aside the sale, cancel the substitute trustee's deed, and quiet title to the Property in their name.

         The Metcalfs and the Lender Defendants filed cross-motions for summary judgment. After a hearing, the trial court denied the Metcalfs' motion, granted the Lender Defendants' motion, and declared that right and title to the Property was fully vested in Wilmington pursuant to the September 1, 2015 Substitute Trustee's Deed. The Metcalfs then perfected this appeal arguing that the trial court erred by concluding that the real property lien on the Property, along with the power of sale to enforce that lien, were not void due to the expiration of the four-year limitations period.

         STANDARD OF REVIEW

         We review the district court's summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005); Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). Summary judgment is proper when there are no disputed issues of material fact and the movant is entitled to judgment as a matter of law. Tex.R.Civ.P. 166a(c); Shell Oil Co. v. Khan, 138 S.W.3d 288, 291 (Tex. 2004). When, as here, both parties move for summary judgment on overlapping issues and the trial court grants one motion and denies the other, we review the summary-judgment evidence presented by both sides, determine all questions presented, and render the judgment the trial court should have rendered. Texas Workers' Comp. Comm'n v. Patient Advocates of Tex., 136 S.W.3d 643, 648 (Tex. 2004); FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000). When the trial court does not specify the ground ...


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