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Wakefield v. Bank of America, N.A.

Court of Appeals of Texas, Fourteenth District

January 18, 2018

KAREN WAKEFIELD, Appellant
v.
BANK OF AMERICA, N.A. AND FEDERAL NATIONAL MORTGAGE ASSOCIATION, Appellees

         On Appeal from the 157th District Court Harris County, Texas Trial Court Cause No. 2013-05157A.

          Panel consists of Chief Justice Frost and Justices Donovan and Wise.

          MEMORANDUM OPINION

          KEN WISE JUSTICE.

         Karen Wakefield sued Bank of America, N.A. and Federal National Mortgage Association ("the lenders"), among others, for fraud, breach of fiduciary duty, and other claims relating to her purchase of real property. The lenders moved for summary judgment based on the statute of limitations, among other grounds. The trial court granted the motion and severed Wakefield's claims against the lenders from her claims against the other defendants, resulting in a final judgment. We affirm.

         I. Background

         In October 2005, Wakefield purchased real property located at 1812 Marshall Street, Houston, Texas, 77098. She had been living at the property for several years and purchased the property from her then-landlord, Alan Mundy. At the time, Mundy lived at 1825 Marshall Street.

         The sales price was $437, 750. Wakefield financed the purchase by obtaining several loans from Countrywide Home Loans, which later merged with Bank of America. She signed several notes and deeds of trust to secure financing for the purchase. Ultimately, Bank of America became the owner and holder of the first-lien promissory note and deed of trust.

         In December 2006, Wakefield and her then-boyfriend also purchased 1825 Marshall Street from Mundy, and the couple began residing at 1825 Marshall Street while she leased 1812 Marshall Street to tenants. In April 2011, Wakefield and her former boyfriend sold 1825 Marshall Street, and Wakefield moved back to 1812 Marshall Street. While packing up at 1825 Marshall Street, Wakefield found closing documents related the purchase of 1812 Marshall Street. She testified by affidavit that she "did not fully realize that a potential fraud had been perpetrated until [she] found the closing documents for 1812 in the garage at 1825 in April 2011."

         On appeal, Wakefield summarizes her reasons for suspecting fraud:

Upon review of the 1812 closing documents, it became clear to Appellant that there was something wrong with the closing on her home at 1812. The discrepancies that were readily apparent included (a) the real estate earnest money contract transposed the addresses for the seller/buyer showed [sic] Appellant's primary residence to be 1825 and MUNDY's primary residence to be 1812; (b) the Uniform Residential Loan Application showed the incorrect birth date for Appellant; (c) the HUD-1 Settlement Statement had the addresses transposed showing Appellant's primary residence to be 1825 and MUNDY's primary residence to be 1812; [and] (d) the survey was wholly incorrect; showing the property as a two-story structure when it is a one-story structure, Marshall Street running in an incorrect direction, and the survey appears to be a mirror image of the property at 1825 which is a completely different house.

         Wakefield alleged in her petition that she believed "something nefarious had occurred regarding the purchase" of 1812 Marshall Street. After April 2012, Wakefield stopped paying her mortgage because she believed that continuing to make payments would "perpetuate a fraud." In September 2012, Bank of America foreclosed on the property.

         In January 2013, Wakefield sued the lenders and others for breach of fiduciary duty, fraud, and other claims. She pleaded the discovery rule for each claim. Regarding the substance of her claims, she contended that the lenders "went along for the ride" of fraud initiated by Mundy. She sought to hold the lenders liable for lending her money to buy the house at a "highly inflated sales price." She pleaded that the lenders owed her a fiduciary duty to assure that she was "purchasing the property at fair market value."[1]

         The lenders filed a hybrid motion for summary judgment on all of Wakefield's claims. In relevant part, the lenders argued that the statute of limitations barred all of Wakefield's claims and that the discovery rule did not apply because the basis of her claims would have been readily apparent if she had exercised ordinary diligence to inspect the closing documents. The lenders also contended that there was no evidence that they owed Wakefield a fiduciary duty.

         Wakefield objected to much of the lenders' evidence, and the trial court sustained the objections and denied the motion for summary judgment in a single order. But, the trial court granted the lenders' motion for reconsideration in its entirety, set aside the prior order, and thereafter granted the lenders' motion for summary judgment without making another ruling on the objections. The trial court severed Wakefield's claims against the lenders, and Wakefield appeals from the final judgment.

         II.Issues and ...


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