Court of Appeals of Texas, Fifth District, Dallas
LUIS A. SANTIAGO, Appellant
THE BANK OF NEW YORK MELLON, AS SUCCESSOR TRUSTEE TO JPMORGAN CHASE BANK, AS TRUSTEE FOR NOVASTAR MORTGAGE FUNDING TRUST, SERIES 2004-2. NOVASTAR HOME EQUITY LOAN ASSET-BACKED CERTIFICATES, SERIES 2004-2, AND OCWEN LOAN SERVICING, LLC, Appellees
Appeal from the 296th Judicial District Court Collin County,
Texas Trial Court Cause No. 296-01232-2015
Justices Lang, Brown, and Whitehill.
appeal is appellant's fourth trip here regarding this
dispute. In this instance, he challenges (i) a summary
judgment dismissing his current suit aimed at preventing a
foreclosure on his home and awarding appellee its
attorney's fees and (ii) an order releasing to the lender
funds held in the court's registry pending the
borrower's first appeal. As discussed more fully below, we
affirm the trial court's judgment because (i) even if the
trial court erred in granting the summary judgment or
releasing the registry funds, appellant has not shown any
resulting harm, (ii) appellant's arguments attacking an
order from a prior suit are an impermissible collateral
attack on that order, and (iii) the trial did not actually
award appellee any attorney's fees.
The Home Equity Loan and Default
2004, Luis Santiago, Borrower, signed a home equity
promissory note secured by a first lien on his property.
Novastar Mortgage, Inc. was the original lender on the home
equity promissory note. The security instrument was granted
in Mortgage Electronic Registration Systems, Inc.'s
(MERS) favor as nominee for Novastar Mortgage Funding Trust,
its successors and assigns. The note and security instrument
were subsequently transferred to Bank of New York Mellon
(BONY), which retained Ocwen to act as its attorney-in-fact
and servicer-in-fact on the loan. We refer to BONY and Ocwen
together as "Lender."
defaulted on the Note in August 2010, and Lender sent a
default notice three months later.
2011, Lender filed a verified home equity foreclosure
application seeking an expedited foreclosure on the home
equity loan following Borrower's default. See
Tex. R. Civ. P. 736. At that time, the August 2010 payment
was past due and Borrower owed Lender $1, 015, 521.31 on the
The First Lawsuit
Rule 736 proceeding was automatically stayed when Borrower
filed a separate lawsuit alleging fraud, and breach of
contract claims and a suit to quiet title asserting that the
loan was void, illegal, and unenforceable (the First
Lawsuit). See Tex. R. Civ. P. 736.11. Lender filed
counterclaims against Borrower and asserted third-party
claims against his wife, seeking a judgment permitting
foreclosure on the property according to the security
later moved for and was granted a summary judgment ordering
that Borrower take nothing on all claims and that Lender
"may conduct a non-judicial foreclosure of the property
that is the subject of this cause" (the First Summary
appealed the First Summary Judgment (the First Appeal), and
the trial court entered an "Agreed Order Staying
Enforcement of Judgment" (Agreed Order), which stayed
the First Summary Judgment's enforcement during the First
Appeal if Borrower (i) made monthly $2, 500 payments into the
court's registry, (ii) made three month's payments in
advance, and (iii) kept the property insured and in good
repair. The Agreed Order further provided that the money
deposited in the court's registry would be paid to Lender
against Borrower's debt if the First Appeal failed.
Lender in April 2014 sent Borrower an erroneous foreclosure
notice, but Borrower states that he has "forgiven"
Lender and does not include this notice as part of the
the First Appeal was pending, Lender filed a motion to
clarify the Agreed Order regarding the tolling of any
limitations periods that might preclude it from exercising
its right to foreclose if it did not do so within certain
time limits (the Clarification Motion). See Tex.
Civ. Prac. & Rem. Code § 16.035(b). Lender argued
that the First Summary Judgment gave it an absolute right to
foreclose if Borrower's First Appeal failed, but Lender
filed the Clarification Motion out of an "abundance of
caution" to clarify the parties' intent regarding
limitations tolling. Specifically, Lender asked the trial
court to clarify that the Agreed Order "includes an
implied provision that limitations are tolled during such
time as the Agreed Order is in effect."
trial court granted Borrower's Clarification Motion on
December 17, 2014, but did not explain why or include the
requested clarifying language (the Clarification Order). The
Clarification Order, however, granted the motion "in its
entirety." In a jurisdictional brief to this court in
the First Lawsuit, however, Borrower acknowledged that the
Clarification Order "mandate[d] that the statute of
limitations would be tolled within the contract."
challenged the Clarification Order in a mandamus proceeding
in this court, which we denied. Borrower then filed an
untimely direct appeal (the Second Appeal), which we
dismissed for want of jurisdiction.
First Appeal, we affirmed the trial court's First Summary
Judgment for Lender. See Santiago v. Novastar Mortg.
Inc., 443 S.W.3d 462, 479 (Tex. App.-Dallas 2014, pet.
denied) (abrogated by Wood v. HSBC Bank, USA, N.A.,
505 S.W.3d 542, 547 (Tex. 2016)). Borrower filed a petition
for review, which the supreme court denied in February 2015.
March 3, 2015, after the supreme court denied Borrower's
petition for review, Lender notified Borrower that it would
sell the property on April 7th (the March 2015 Notice). But
the April foreclosure did not occur because Lender recognized
that Borrower still had time to file a motion for rehearing
in the supreme court. Borrower so moved, and rehearing was
denied on April 17, 2015.