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Rogers v. Asset Lending, L.L.C.

Court of Appeals of Texas, Fourteenth District

June 26, 2018

WILLIAM V. ROGERS and RONALD J. MARKS, Appellants
v.
ASSET LENDING, L.L.C., Appellee

          On Appeal from the 334th District Court Harris County, Texas Trial Court Cause No. 2015-61117

          Panel consists of Justices Boyce, Jamison, and Brown.

          MEMORANDUM OPINION

          MARC W. BROWN JUSTICE

         Appellee Asset Lending, L.L.C., brought suit to recover an unpaid deficiency balance on a promissory note after a foreclosure sale against appellants William V. Rogers and Ronald J. Marks as guarantors. Asset Lending moved for traditional summary judgment. Rogers and Marks sought to defeat summary judgment based on the affirmative defense of statute of limitations based on untimely service. The trial court granted Asset Lending summary judgment.

         On appeal, Rogers and Marks argue that the trial court erred because: (1) a fact question exists as to whether Asset Lending attempted to diligently serve Rogers and Marks: (2) Asset Lending failed to prove that any amount was owed under the note: and (3) Asset Lending's petition and summary-judgment motion failed to specify any cause of action against them. We conclude that the trial court did not err in granting summary judgment, and we affirm.

         I. Background

         Sunset Estates, L.P.[1] entered into a promissory note dated October 11, 2007, in the principal amount of $7, 069, 034.00 (the Note) to MetroBank, N.A. The note was secured by a lien on real property. That same day, both Rogers and Marks entered into guaranty agreements with MetroBank, guaranteeing payment of the Note.[2] Sunset Estates also executed a deed of trust and security agreement in favor of the trustee for MetroBank to secure payment of the Note.

         In October 2009, Sunset Estates entered into a modification and renewal agreement concerning the Note with MetroBank. Rogers and Marks, among others, [3]signed this agreement as guarantors. In October 2010, Sunset Estates entered into a second modification and renewal agreement with MetroBank, again with Rogers and Marks as guarantors. In October 2011, Sunset Estates entered into a third modification and renewal agreement with MetroBank. In June 2012, Sunset Estates entered into a fourth modification agreement with MetroBank. In December 2012, Sunset Estates entered into a fifth modification agreement with MetroBank. Rogers and Marks both signed the third, fourth, and fifth modification agreements as guarantors. The Note was due and payable on October 10, 2012. The guarantors, including Rogers and Marks, failed to pay the Note as required by its terms.

         By an allonge and transfer of debt and liens dated April 10, 2013, MetroBank endorsed the Note to the order of and transferred the liens securing payment thereof along with the guaranty agreements to H/D Management, Inc. By an allonge and transfer of debt and liens dated May 29, 2013, H/D Management endorsed the Note to the order of and transferred the liens securing payment thereof along with the guaranty agreements to Asset Lending, LLC. Asset Lending currently owns and holds the Note, deed of trust, and guaranty agreements.

         Asset Lending appointed its manager John Hilton as substitute trustee. Hilton timely posted and sent notice of substitute trustee's sale to Rogers and Marks, informing them that the property described in the deed securing the Note would be sold at foreclosure on November 5, 2013. As of November 5, after allowing all offsets and credits, the outstanding principal unpaid balance due under the Note was $1, 315, 096.39 plus accrued interest of $98, 578.18, for a total due of $1, 413, 674.57. Asset Lending was the highest bidder; the property was sold to Asset Lending for $575, 000 as a credit on the Note. Therefore, the remaining deficiency on the Note is $838, 674.57 in outstanding principal, plus interest that continues to accrue.

         On October 14, 2015, Asset Lending filed suit against Sunset Estates, Sunset Operating G.P., L.L.C., nuCitygroup.com, L.L.C., Rogers, and Marks.[4] Asset Lending sought to recover the remaining deficiency after the foreclosure sale on the unpaid outstanding balance of the Note. Marks answered and was deemed served on February 26, 2016. Rogers answered and was deemed served on April 18, 2016. Both Rogers and Marks raised the affirmative defense of the two-year statute of limitations under section 51.003(a) of the Texas Property Code.

         Asset Lending filed a motion for summary judgment. In its motion, Asset Lending sought summary judgment as to its claims against Rogers and Marks for the outstanding balances owed on the Note. Asset Lending also sought summary judgment because under the guaranty agreements Rogers and Marks waived all of their rights and defenses under section 51.003. Attached to Asset Lending's motion, in pertinent part, were:

• an affidavit by Hilton;
• the Note;
• the first modification and renewal agreement;
• the second modification and renewal agreement;
• the third modification and renewal agreement;
• the fourth modification;
• the fifth modification;
• Rogers's guaranty agreement;
• Marks's guaranty agreement;
• Sunset Estates' deed of trust and security agreement;
• the allonge to H/D Management;
• the transfer of debt and liens to H/D ...

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