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Gregory v. Bank of America, N.A.

Court of Appeals of Texas, Fourth District, San Antonio

June 14, 2017

Everett W. GREGORY Jr. and Marcia Gregory, Appellants
v.
BANK OF AMERICA, N.A. and Jesse R. Mendoza, Appellees

         From the 37th Judicial District Court, Bexar County, Texas Trial Court No. 2014 CI 05064 Honorable Cathy Stryker, Judge Presiding

          Sitting: Karen Angelini, Justice, Luz Elena D. Chapa, Justice, Irene Rios, Justice.

          MEMORANDUM OPINION

          Luz Elena D. Chapa, Justice.

         Everett W. Gregory Jr. and Marcia Gregory appeal the trial court's summary judgment on their claims against appellees Bank of America N.A. and Jesse R. Mendoza. The Gregorys argue they raised a fact issue regarding each element of their cause of action for breach of contract against Bank of America and their related claims for a declaratory judgment, permanent injunction, and attorney's fees. The Gregorys do not challenge the dismissal of their cause of action under the Deceptive Trade Practices Act (DTPA) or their claims against Mendoza. We affirm in part, reverse in part, and remand for further proceedings.

         Background

         In 1999, the Gregorys refinanced a house they owned in San Antonio. The Gregorys signed a deed of trust and a promissory note to NationsBank for the amount of $85, 900. The note required the Gregorys to make payments on the first day of each month for fifteen years. The deed of trust provided how the payments received by NationsBank must be applied to interest, principal, and other amounts due. If the Gregorys defaulted by failing to timely pay in full each month, the note authorized NationsBank to notify the Gregorys of the default. If the Gregorys failed to pay the overdue amount by a certain date after their receipt of the notice, NationsBank could accelerate the note and demand payment of the entire balance. Bank of America is NationsBank's successor in interest and became the holder of the note in April 1999.

         The Gregorys filed for bankruptcy in 2008, but continued to make payments to Bank of America through the bankruptcy trustee. After the Gregorys filed for bankruptcy, Bank of America stopped accepting the Gregorys' automated payments. Bank of America's records show Bank of America received funds from the Gregorys in various months, but Bank of America reversed the payments instead of applying the payments to the Gregorys' account. In fall 2012, the Gregorys started making payments to Bank of America over the phone, but Bank of America also reversed some of those payments and did not apply them to the Gregorys' account. The Gregorys continued making payments in 2013 and 2014 by cashier's checks drawn on the Gregorys' account at Chase Bank. Bank of America accepted the Gregorys' cashier's checks throughout 2013 and the first several months of 2014. Bank of America credited some of the Gregorys' payments in 2013, but reversed other payments.

         In July 2013, Bank of America sent the Gregorys a notice stating the Gregorys were in default. The notice lists the payments allegedly missed from March 2011 to July 2013. The notice stated the Gregorys had the right to cure the default by paying Bank of America a total of $38, 555.20. The notice also stated that if the default was not cured "in the full amount" by August 20, 2013, "the mortgage payments will be accelerated with the full amount . . . becoming due and payable in full." The Gregorys attempted to tender payments, but Bank of America refused to accept the payments as curing the default because the amount paid was less than $38, 555.20.

         Bank of America requested that the bankruptcy court grant it relief from the automatic stay. After the request was granted, the Gregorys filed suit to enjoin Bank of America from foreclosing on the house. The trial court issued a preliminary injunction, finding there was a substantial probability that Bank of America would foreclose on the house "when there is no default sufficient to justify foreclosure." The Gregorys also sued Bank of America for breach of contract and violating the DTPA. The Gregorys sought damages, a declaratory judgment, a permanent injunction, and attorney's fees. The Gregorys named Jesse Mendoza, a Bank of America employee, as a defendant and alleged he defamed Marcia Gregory and was "verbally rough" with her, but Mendoza was never served.

         Bank of America filed a traditional and no-evidence motion for summary judgment. Bank of America argued its evidence conclusively established it did not breach the deed of trust or the note. In support of its traditional ground, Bank of America relied on the loan documents, the default notice, Everett Gregory Jr.'s deposition, bankruptcy filings, and a "bankruptcy plan ledger." Although Bank of America also attached a business records affidavit to its motion, the affidavit does not explain the transaction codes contained in the bankruptcy plan ledger. Bank of America further argued the Gregorys had no evidence of any element of their cause of action for breach of contract. Bank of America's motion also challenged the Gregorys' cause of action under the DTPA, and requested summary judgment on the Gregorys' claims for a declaratory judgment, permanent injunction, and attorney's fees because the Gregorys did not have a valid, underlying cause of action to support the requested relief.

         The Gregorys filed a response and produced an affidavit from Everett Gregory Jr., Bank of America's records showing the transaction history for the Gregorys' account, and copies of the fronts and backs of cashier's checks made payable to, and accepted and cashed by, Bank of America beginning in January 2013 through April 2014. The trial court granted Bank of America's motion and dismissed all of the Gregorys' claims. The Gregorys appeal.

         Standard of Review

         "We review a summary judgment de novo." City of San Antonio v. San Antonio Express-News, 47 S.W.3d 556, 561 (Tex. App.-San Antonio 2000, pet. denied). To prevail on a traditional motion for summary judgment, the movant must show "there is no genuine issue as to any material fact and the [movant] is entitled to judgment as a matter of law." Tex.R.Civ.P. 166a(c); accord Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). "When a party moves for a no-evidence summary judgment, the nonmovant must produce some evidence raising a genuine issue of material fact." Romo v. Tex. Dep't of Transp., 48 S.W.3d 265, 269 (Tex. App.-San Antonio 2001, no pet.) (citing Tex.R.Civ.P. 166a(i)). The nonmovant does not have the burden to marshal its evidence, but it must produce some evidence that raises a fact issue on the challenged element. See id. We take as true all evidence favorable to the nonmovant, resolve all conflicts in the evidence in the non-movants' favor, and "indulge every reasonable inference and resolve any doubts in the nonmovant's favor." Rhône-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999); see City of San Antonio, 47 S.W.3d at 561.

         DTPA & Claims against Mendoza

         The Gregorys do not argue the trial court erred by rendering summary judgment on their DTPA cause of action or on their claims against Mendoza. We must refrain from deciding cases on issues not raised by the parties. See W. Steel Co. v. Altenburg, 206 S.W.3d 121, 124 (Tex. 2006) (per curiam). We therefore affirm the trial court's judgment as to the Gregorys' DTPA cause of action and their claims against Mendoza.

         Breach of Contract

         Bank of America raised several grounds for summary judgment on the Gregorys' cause of action for breach of contract. Because the trial court did not specify the grounds for granting summary judgment, we must affirm if any grounds advanced in Bank of America's motion are meritorious. See FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000). Bank of America argued in its summary judgment motion that its evidence conclusively established it did not breach the deed of trust or the note and the Gregorys have no evidence of any element of their cause of action for breach of contract. The elements of breach of contract are: "(1) a valid contract; (2) the plaintiff performed or tendered performance; (3) the defendant breached the contract; and (4) the plaintiff was damaged as a result of the breach." Richter v. Wagner Oil Co., 90 S.W.3d 890, 898 (Tex. App.-San Antonio 2002, no pet.). The Gregorys argue they raised a fact issue as to each element of their breach of contract claim and established Bank of America is not entitled to judgment as a matter of law.

         A. Valid Contract

         The covenants in a deed of trust and a promissory note are contractual. See Williams v. Durst's Adm'x, 35 Tex. 421, 423 (1871); Jim Maddox Props., LLC v. WEM Equity Capital Invs., Ltd., 446 S.W.3d 126, 132 (Tex. App.-Houston [1st Dist.] 2014, no pet.). The parties agreed to the covenants contained in the deed of trust and the promissory note in 2009, and the Gregorys allege they are suing Bank of America for breaching those agreements. Bank of America does not argue on appeal why the deed of trust or the note is not a valid contract. We hold Bank of America's no-evidence ground as to the "valid contract" element of the Gregorys' cause of action does not support the trial court's summary judgment.

         B. Performance or Tendered Performance

         A plaintiff alleging a breach of contract must show it performed or tendered performance under the contract. Richter, 90 S.W.3d at 898. "A tender is an unconditional offer by a debtor to pay another a sum not less in amount than that due on a specified debt." Jensen v. Covington, 234 S.W.3d 198, 206 (Tex. App.-Waco 2007, pet. denied). "Prevention of performance by one party excuses performance by the other party, both of conditions precedent to performance and of promise." Dorsett v. Cross, 106 S.W.3d 213, 217 (Tex. App.-Houston [1st Dist.] 2003, pet. denied). "When the obligation of a party to a contract depends upon a certain condition's being performed, and the fulfillment of the condition is prevented by the act of the other party, the condition is considered fulfilled." Id.; see Jensen, 234 S.W.3d at 206 ("[A] formal tender is excused where the creditor has indicated he is unwilling to accept what is due in discharge of the debt.").

         Bank of America did not challenge this element in its traditional motion for summary judgment or argue the evidence conclusively establishes the Gregorys failed to perform or tender performance. Instead, Bank of America asserted the Gregorys had no evidence showing they performed or tendered performance. Bank of America also argues the Gregorys did not perform because they missed several payments and failed to pay $38, 555.20 to cure the default. The promissory note required the Gregorys to make monthly payments at a specified NationsBank location in San Antonio "or at a ...


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