Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg
appeal from the 250th District Court of Travis County, Texas.
Chief Justice Contreras  and Justices Valdez and Rodriguez
MEMORANDUM OPINION ON REMAND
issued our memorandum opinion on remand and judgment in this
matter on December 28, 2018. Appellant Wendy Lee Kyle has
filed a motion for rehearing. We deny the motion for
rehearing but withdraw our December 28, 2018 memorandum
opinion on remand and judgment and substitute the following
memorandum opinion on remand and accompanying judgment.
matter is before the Court on remand from the Texas Supreme
Court. Kyle argued by five issues that the trial
court erred in granting summary judgment dismissing her
claims against appellees, Fidelity Bank of Texas et al.
dispute arose from a 2004 home equity loan which was secured
by a deed of trust on the Austin homestead belonging to Kyle
and her ex-husband Mark. Kyle later learned that Mark's
employee forged Kyle's signature on the loan documents.
Subsequently, pursuant to a Rule 11 agreement, Kyle executed
a special warranty deed and an agreed divorce decree
transferring her interest in the homestead to Mark. In this
suit, filed in 2012, Kyle alleges that she agreed to the
transfer only because Fidelity and others incorrectly and
fraudulently led her to believe that the property would be
foreclosed upon and that she would be held personally liable
on the home equity loan.
original submission, we affirmed the trial court's
dismissal of the following claims made by Kyle, on
limitations grounds: (1) for declaratory judgment that the
deed of trust securing the loan is void; (2) for forfeiture
of principal and interest under article XVI, section 50 of
the Texas Constitution; and (3) for declaratory judgment
setting aside the special warranty deed. Kyle v.
Strasburger, 520 S.W.3d 74, 80 (Tex. App.-Corpus Christi
2015) (holding that the alleged defects made the loan
voidable, not void ab initio, and applying the
residual four-year statute of limitations), aff'd in
part & rev'd in part, 522 S.W.3d 461 (Tex.
2017). We also held that because Kyle's statutory real
estate fraud, Texas Finance Code, and Deceptive Trade
Practices Act (DTPA) claims (collectively, the statutory
claims) were each dependent on her claim that the deed of
trust is void, those claims were properly disposed of on
no-evidence grounds. 520 S.W.3d at 81-83.
supreme court affirmed in part and reversed in part, holding
that: (1) Kyle's claim for forfeiture of principal and
interest was not an independent cause of action under the
Texas Constitution and was therefore properly dismissed; but
(2) the statute of limitations did not bar Kyle's
declaratory judgment claims and, therefore, those claims and
the remaining statutory claims should not have been
dismissed. 522 S.W.3d at 464-67 ("A home-equity loan
secured by a lien that was not created with the consent of
each owner and each owner's spouse is not 'a debt
described by this section' [under article XVI, section
50] and is therefore invalid unless and until such consent is
obtained. . . . The statute of limitations does not bar
Kyle's claim to declare the lien invalid.") (citing
Garofolo v. Ocwen Loan Servicing, 497 S.W.3d 474,
478 (Tex. 2016); Wood v. HSBC Bank USA, N.A., 505
S.W.3d 542, 548 (Tex. 2016)).
accordance with the supreme court's opinion, we now
consider whether summary judgment on Kyle's outstanding
claims was supported on any of the other grounds raised in
Fidelity's motions. We affirm in part and reverse and
remand in part.
2015 opinion, we set forth the background of this case as
On May 24, 2004, appellant's ex-husband, Mark Kyle,
obtained a 1.1 million dollar home equity loan from Fidelity,
a loan which was secured by the couple's homestead. It is
undisputed that Mark's employee signed appellant's
name on the loan documents, including the promissory note,
deed of trust, and disclosure statements. Fidelity alleges
that appellant consented to her friend signing the
document; however, appellant claims that she did
not consent to the forgery and learned of the signature
later. In late 2009, appellant filed for divorce from Mark.
During the divorce proceedings, Mark failed to pay ad valorem
taxes and Fidelity declared the note on the loan in default.
Threatened with foreclosure, attorneys for Mark and appellant
attempted to negotiate a forbearance agreement with Fidelity
that would temporarily abate the threatened foreclosure of
the couple's homestead. Appellant refused to sign a
document requiring her to verify that she had signed the
original loan documents. Terry Whitley, Fidelity's
president, testified that he did not know whether Fidelity
was aware that appellant had not signed the original loan
On March 24, 2011, Fidelity began foreclosure proceedings on
the property. The foreclosure application included
Whitley's affidavit stating that appellant and Mark had
executed the loan agreement. Appellant filed a verified
denial in response to the foreclosure proceedings stating
that she had not signed the loan agreement and that she had
not given anyone authority to sign on her behalf. Fidelity
began investigating whether appellant had actually signed the
loan documents. However, according to appellant, Fidelity
continued to pursue foreclosure against the couple's
homestead and represented to others that appellant had
executed the home-equity loan documents. Fidelity also
"sent notice of the pending non-judicial foreclosure
sale of the [couple's] homestead to the Internal Revenue
Service," asserting "that Mark and [appellant] had
executed the home-equity loan and that Fidelity had scheduled
the foreclosure sale on August 2, 2011."
On June 2, 2011, pursuant to a Rule 11 agreement with Mark
and as part of the final divorce decree, appellant conveyed
her interest in the home to Mark by special warranty deed,
thereby making Mark the sole owner of the home. Fidelity
points out that appellant testified that she signed the Rule
11 agreement and accompanying documents based on the advice
of her attorneys and confirmed that she did not rely on the
advice of anyone else. However, appellant claims that she
sold the property because she did not want to be part of the
foreclosure proceeding. The divorce court entered a final
judgment of divorce decreeing that the home was Mark's
sole and separate property and appellant signed the judgment
as "approved and consented as to both form and
substance." On June 21, 2011, Fidelity nonsuited
appellant from the foreclosure proceedings.
On October 13, 2011, Fidelity sold the note and assigned the
lien to Tuition LLC, a corporation formed by the Strasburgers
for, according to appellant, "the sole purpose of
holding the note and lien." Appellant claims that
Tuition LLC had been attempting to collect past-due payments
on the home-equity note from her and has instituted
foreclosure proceedings naming her as a party.
On October 3, 2012, appellant filed suit against Fidelity and
Mark asserting claims for fraudulent filing of a financing
statement, statutory fraud in a real estate transaction,
securing the execution of a document by deception, common law
fraud, negligent misrepresentation, "aiding and
abetting," fraudulent inducement, and damage to credit.
Appellant sought damages from Fidelity that she claims were
sustained as a result of misrepresentations made by Fidelity
that a loan secured by a fraudulent signature was
enforceable. Appellant requested the trial court to declare
the loan agreement void and set aside the transfer of the
property to Mark.
On March 11, 2013, Fidelity filed its first motion for
summary judgment on traditional and no-evidence grounds
challenging all elements of appellant's causes of action
and claiming the affirmative defense of absolute privilege.
On March 13, 2013, appellant amended her petition adding
claims for forfeiture of principal and interest and
declaratory judgment actions requesting that the lien be
declared void and that the special warranty deed be set
aside. The trial court granted Fidelity's motion on May
16, 2013. Fidelity filed a subsequent motion for summary
judgment as to the claims appellant added in her amended
petition arguing that appellant did not have standing and
that her suit was barred by the statute of limitations. The
trial court granted the motion without specifying the grounds
and severed appellant's suit against Fidelity from her
claims against Mark. This appeal followed.
Kyle, 520 S.W.3d at 76-77 (footnotes in original).
Kyle's abandonment of certain claims and the supreme
court's 2017 ruling, only the following claims raised by
Kyle remain pending: (1) declaratory judgment that the deed
of trust securing the loan is void; (2) declaratory judgment
setting aside the special warranty deed; (3) Texas Finance
Code violations; (4) DTPA violations; and (5) statutory fraud
in a real estate transaction under the business and commerce
code. See id. at 81 n.13.
Summary Judgment Law and Standard of Review
may move for summary judgment on traditional or no-evidence
grounds. See Tex. R. Civ. P. 166a(c), (i). In a
traditional motion for summary judgment, the movant has the
burden to establish that no genuine issue of material fact
exists and that he is entitled to judgment as a matter of
law. Tex.R.Civ.P. 166a(c); Sw. Elec. Power Co. v.
Grant, 73 S.W.3d 211, 215 (Tex. 2002). A defendant
seeking traditional summary judgment must either disprove at
least one element of each of the plaintiff's causes of
action or plead and conclusively establish each essential
element of an affirmative defense. Cathey v. Booth,
900 S.W.2d 339, 341 (Tex. 1995) (per curiam); Sanchez v.
Matagorda Cty., 124 S.W.3d 350, 352 (Tex. App.-Corpus
Christi 2003, no pet.). A no-evidence summary judgment must
show that no evidence exists of one or more essential
elements of a claim on which the adverse party bears the
burden of proof at trial. Tex.R.Civ.P. 166a(i); Timpte
Inds., Inc. v. Gish, 286 S.W.3d 306, 310 (Tex. 2009).
Once the motion is filed, the burden shifts to the non-movant
to produce evidence raising a genuine issue of material fact
on the elements specified in the motion. Tex.R.Civ.P.
166a(i); Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572,
582 (Tex. 2006).
motions for summary judgment raised both traditional and
no-evidence grounds. See Tex. R. Civ. P. 166a(c),
(i). Though the burden varies for traditional and no-evidence
summary judgment motions, because all parties brought forth
summary judgment evidence, the differing burdens are
immaterial and the ultimate issue is whether a fact issue
exists. Neely v. Wilson, 418 S.W.3d 52, 59 (Tex.
2013) (citing Buck v. Palmer, 381 S.W.3d 525, 527
& n.2 (Tex. 2012)). A fact issue exists, precluding
summary judgment, if there is more than a scintilla of
probative evidence to support each element of the
plaintiff's claim. Id. Evidence is more than a
scintilla if it "rises to a level that would enable
reasonable and fair-minded people to differ in their
conclusions." Serv. Corp. Int'l v. Guerra,
348 S.W.3d 221, 228 (Tex. 2011). Evidence is less than a
scintilla if it is "so weak as to do no more than create
a mere surmise or suspicion that the fact exists."
Regal Fin. Co. v. Tex Star Motors, Inc., 355 S.W.3d
595, 603 (Tex. 2010). We review the summary judgment evidence
in the light most favorable to the non-movant, indulging
every reasonable inference and resolving any doubts against
the motion. City of Keller v. Wilson, 168 S.W.3d
802, 824 (Tex. 2005).
the trial court's orders granting summary judgment do not
specify the basis for the rulings, we must affirm the
judgments if any of the theories advanced in Fidelity's
motions are meritorious. W. Invs., Inc. v. Urena,
162 S.W.3d 547, 550 (Tex. 2005). We review the rulings de
novo. Neely, 418 S.W.3d at 59.
following grounds raised in Fidelity's summary judgment
motions have not previously been addressed on appeal: (1)
whether Kyle lacks standing to assert her declaratory
judgment claims; (2) whether judicial estoppel bars her
declaratory judgment, finance code, and DTPA claims; (3)
whether the absolute privilege doctrine bars her statutory
claims; (4) whether the evidence conclusively negates the
reliance and causation elements of Kyle's statutory
claims; and (5) whether there is no evidence supporting the
statutory claims or the claim to declare the special warranty
deed invalid. See Kyle, 520 S.W.3d at 467
footnote in its second summary judgment motion, Fidelity
argued that Kyle does not have standing to pursue her claims
for declaratory relief because she "divested herself of
all interest to her homestead." It further contended
that, having already conveyed her interest in the homestead,
Kyle has no justiciable interest in the loan documents
because the loan is "without recourse for personal
liability." Kyle argues by part of her first issue on
appeal that summary judgment was improper if granted on these
is a component of subject matter jurisdiction and is a
constitutional prerequisite to maintaining suit. Tex.
Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d
440, 443-44 (Tex. 1993). A plaintiff has the initial burden
to plead facts establishing standing. See id. at
446. The issue focuses on whether a party has a sufficient
relationship with the lawsuit so as to have a
"justiciable interest" in its outcome.
Austin Nursing Ctr., Inc. v. Lovato, 171
S.W.3d 845, 848 (Tex. 2005). Generally, a party has standing
to sue if there is (1) "a real controversy between the
parties" that (2) "will be actually determined by
the judicial declaration sought." Id. (citing
Tex. Ass'n of Bus., 852 S.W.2d at 443-44). More
specifically, chapter 37 of the civil practice and remedies
code, the Uniform Declaratory Judgments Act (UDJA), provides
A person interested under a deed, will, written contract, or
other writings constituting a contract or whose rights,
status, or other legal relations are affected by a statute,
municipal ordinance, contract, or franchise may have
determined any question of construction or validity arising
under the instrument, statute, ordinance, contract, or
franchise and obtain a declaration of rights, status, or
other legal relations thereunder.
Tex. Civ. Prac. & Rem. Code Ann. § 37.004 (West,
Westlaw through 2017 1st C.S.).
her claim for a declaration that the special warranty deed is
void, Kyle alleged in her live petition that she is a party
to the deed and therefore has a justiciable interest in her
claim to determine its validity. However, the sequence of
events revealed by the summary judgment evidence shows that
there is no genuine controversy surrounding the validity of
the special warranty deed. The parties' Rule 11
agreement, in which Kyle agreed to transfer her interest in
the homestead to Mark, was executed and filed with the trial
court on June 2, 2011. Kyle executed the special warranty
deed a few days later. But the agreed divorce decree,
rendered in August 2011 and also based on the Rule 11
agreement, also awarded the entire homestead to Mark as part
of the just and right division of the marital estate. The
decree stated that Kyle "is divested of all right,
title, interest, and claim in and to" the homestead. The
decree further stated as follows in a section entitled
"Judgment Effective to Pass Title":
Notwithstanding any other provisions of this Agreed Final
Decree of Divorce, this judgment shall operate as a
conveyance to the parties so named of the real property
described herein and title to such real property passes as
ordered herein, without the necessity of any further action
by the party being divested of title.
This decree shall serve as a muniment of title to transfer
ownership of all property awarded to any party in this Agreed
Final Decree of Divorce.
terms of the unchallenged divorce decree render the validity
of the special warranty deed inconsequential. Even if the
trial court were to declare the June special warranty deed
invalid, the August divorce decree would effectuate the same
result-i.e., a 100% conveyance of Kyle's interest in the
homestead to Mark. Accordingly, the judicial declaration
sought by Kyle would not "actually determine" a
"real controversy" between the parties. See
Austin Nursing Ctr., Inc., 171 S.W.3d at 848. It follows
that Kyle lacked standing under the UDJA to bring her claim
for a declaration that the special warranty deed is invalid.
terms of the agreed divorce decree also deprive Kyle of
standing to seek a declaration that the deed of trust
securing the home equity loan is void. In particular,
consistent with the Rule 11 agreement, the decree allocated
100% of the debt associated with the loan to
Mark; and as Fidelity notes, the Texas
Constitution provides that a home equity loan is
"without recourse for personal liability against each
owner and the spouse of each owner . . . ." Tex. Const.
art. XVI, § 50(a)(6)(C); see Patton v.
Porterfield, 411 S.W.3d 147, 159 (Tex. App.-Dallas 2013,
pet. denied). The terms of the decree, combined with the
constitutional provision cited above, ensured that Kyle could
not be held personally liable on the home equity loan,
regardless of whether the trial court declared the deed of
trust securing the loan void. Kyle therefore lacked a
justiciable interest in the outcome of this claim. See
Austin Nursing Ctr., Inc., 171 S.W.3d at 848.
argues on appeal that she has standing to seek these
declarations because she "remain[s] an obligor on the
promissory note, her credit continued to be affected by the
loan despite the conveyance of the collateral to her husband
in the divorce, and she is still named as a respondent in
Fidelity's latest foreclosure application." But Kyle
did not allege these specific facts in her live petition and
her appellate brief directs us to no evidence in the summary
judgment record establishing those facts. Accordingly, she
has not met her burden to allege facts showing that she has
standing to seek a declaration that the deed of trust is
void. See Tex. Ass'n of Bus., 852 S.W.2d at 446.
observe that Kyle's claims are focused principally on the
alleged misrepresentations by Mark and Fidelity as to whether
the home equity loan was valid and whether she could be held
personally liable thereon. She asserts that, without those
alleged misrepresentations, she would not have entered into
the Rule 11 agreement to convey her interest in the
homestead. But, as the supreme court noted, "[t]here is
no basis for declaratory relief when a party is seeking in
the same action a different, enforceable remedy, and a
judicial declaration would add nothing to what would be
implicit or express in a final judgment for the enforceable
remedy." Kyle, 522 S.W.3d at 467 n.10 (citing
Patel v. Tex. Dep't of Licensing &
Regulation, 469 S.W.3d 69, 79 (Tex. 2015) (holding that
"courts will not entertain an action [against a
governmental unit] under the [UDJA] when the same claim could
be pursued through different channels"); Etan
Indus., Inc. v. Lehmann, 359 S.W.3d 620, 624 (Tex. 2011)
(per curiam) (noting that a declaratory judgment claim
"must do more than merely duplicate the issues litigated
via [other] claims" in order to authorize an award of
attorney's fees under the UDJA); Universal Printing
Co. v. Premier Victorian Homes, Inc., 73 S.W.3d 283, 296
(Tex. App.- Houston [1st Dist.] 2001, pet.
denied)). To the extent Kyle seeks relief in
connection with the alleged misrepresentations, her remaining
statutory claims provide an enforceable remedy and the
declarations she seeks "would add nothing to what would
be implicit or express in a final judgment for the
enforceable remedy." See id.
foregoing reasons, we conclude that the trial court's
summary judgment on Kyle's declaratory judgment claims
was proper on grounds that she lacked standing. This part of
Kyle's first issue on appeal is overruled. We proceed to
address the remaining summary judgment grounds as they
pertain to Kyle's remaining statutory claims.
argued in its second summary judgment motion that Kyle is
judicially estopped from asserting that she did not execute
the home equity loan documents "because she successfully
took the contrary position in the divorce action."
Fidelity's argument is based on the recital, in the
section of the divorce decree regarding the just and right
division of marital liabilities, that both Kyle and Mark
"executed" the promissory note associated with the
loan. See supra n.11. Fidelity notes that Kyle
signed the decree under a statement indicating that she
"approved and consented to" both the "form and
substance" of the decree. It argues that this negates
the contrary assertion made by Kyle as part of her finance
code and DTPA claims.
estoppel "precludes a party from adopting a position
inconsistent with one that it maintained successfully in an
earlier proceeding." Pleasant Glade Assembly of God
v. Schubert, 264 S.W.3d 1, 6 (Tex. 2008). "The
doctrine is not strictly speaking estoppel, but rather is a
rule of procedure based on justice and sound public
policy." Id. "Its essential function
'is to prevent the use of intentional self-contradiction
as a means of obtaining unfair advantage.'"
Id. (quoting Andrews v. Diamond, Rash, Leslie
& Smith, 959 S.W.2d 646, 650 (Tex. App.-El Paso
1997, writ denied)).
of her first issue on appeal, Kyle contends that the recital
in the decree cannot give rise to judicial estoppel because
it "is not a sworn statement." We agree. Judicial
estoppel may be based only on a sworn statement made in a
prior judicial proceeding. See Long v. Knox, 291
S.W.2d 292, 295 (Tex. 1956) ("Under the doctrine of
judicial estoppel, as distinguished from equitable estoppel
by inconsistency, a party is estopped merely by the fact of
having alleged or admitted in his pleadings in a former
proceeding under oath the contrary to the assertion
sought to be made." (emphasis added)); In re
Marriage of Butts, 444 S.W.3d 147, 151 (Tex.
App.-Houston [14th Dist.] 2014, no pet.); Owen v.
Knop, 853 S.W.2d 638, 641 (Tex. App.-Corpus Christi
1993, writ denied) (noting that "the doctrine of
judicial estoppel serves to uphold the sanctity of the oath,
and to eliminate the prejudice which would result to the
administration of justice if a litigant were to swear one way
one time and a different way another time"). Citing
Schubert, Fidelity argues that a statement need not
be sworn in order to trigger judicial estoppel, but the Texas
Supreme Court held nothing of the sort in that case.
See 264 S.W.3d at 6. Though the Schubert
Court did not recite the well-established precedent that a
statement must be sworn in order to give rise to judicial
estoppel, it held that the doctrine did not apply in that
case for three unrelated reasons. See id. Therefore,
it is inapposite.
the recital in the agreed divorce decree was not a sworn
statement, it could not have served as the basis for judicial
estoppel. Therefore, the trial court erred if it granted
summary judgment on these grounds. We sustain this part of
Kyle's first issue.