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Uddin v. Cunningham

Court of Appeals of Texas, First District

April 25, 2019

SHAKEEL UDDIN, Appellant
v.
JACQUELINE K. CUNNINGHAM, DEPUTY RECEIVER OF SOUTHERN TITLE INSURANCE CORPORATION. AND SOUTHERN TITLE INSURANCE CORPORATION, Appellee

          On Appeal from the 334th District Court Harris County, Texas Trial Court Case No. 2012-29600

          Panel consists of Justices Lloyd, Kelly, and Hightower.

          MEMORANDUM OPINION

          Richard Hightower Justice.

         Appellant Shakeel Uddin guaranteed a loan made by Sterling Bank to Nabeel & Amaan Investments, Inc. NAI used the loan to purchase real property. Following NAI's loan default and a superior lienholder's foreclosure on the property, Sterling filed a claim under the title-insurance policy it received from Appellee Southern Title Insurance Company. STIC, as Sterling's subrogee, sued Uddin as guarantor of the loan. After paying on Sterling's insurance claim and being assigned the rights under the loan, STIC amended its petition against Uddin, abandoning its subrogation action and asserting a direct claim on the guaranty. STIC successfully moved for summary judgment over Uddin's arguments that the statute of limitations deprived STIC of standing or capacity, STIC failed to prove each element of its claim, and he had raised material issues of fact on his affirmative defenses. Uddin now appeals, raising the same arguments. We conclude that the statute of limitations did not implicate STIC's standing, any defect in STIC's capacity was cured by the relation-back doctrine, STIC established each element of its claim, and Uddin contractually waived his right to assert his other affirmative defenses. We therefore affirm.

         Background

         Nabeel & Amaan Investments, Inc. obtained a $1, 400, 000 loan from Sterling Bank on January 10, 2008, to finance its purchase of real property located at 9112 North Broadway, Houston. By the terms of the Promissory Note, NAI had five years to pay off the loan and granted Sterling a first lien on the property. That same day, NAI's president, Appellant Shakeel Uddin, signed a Guaranty Agreement, promising Sterling that he would be responsible for NAI's obligations under the Note if NAI defaulted.

         Appellee Southern Title Insurance Company, a Virginia corporation authorized to do business in Texas, issued an Owner's Policy to NAI and a Lender's Policy to Sterling.[1] Under the Owner's Policy, STIC insured NAI against loss caused by any lien on the sold property. Under the Lender's Policy, STIC insured Sterling against loss caused by any lien on the property that was superior to Sterling's lien. Unknown to STIC and Sterling, a superior lien existed: JLE Investors, Inc. possessed an unpaid Deed of Trust on the property that predated Sterling's lien.

         Following NAI's failure to make several payments on the Note, Sterling sent a letter to NAI and Uddin on February 10, 2011, demanding full payment on the Note and the Guaranty Agreement. Neither NAI nor Uddin paid. Twelve days later, Sterling accelerated the Note. Sometime within the following month, Sterling discovered that JLE's lien was superior to its own and notified STIC. Because JLE's lien was never paid off, JLE foreclosed on the property in October 2011. The property was later sold during a trustee's sale. By this time, STIC was in serious financial trouble.

         The State Corporation Commission of Virginia filed an application with the Circuit Court of the City of Richmond, seeking its appointment as STIC's receiver. In December 2011, the Virginia circuit court found that STIC was "in a hazardous financial condition such that any further transaction of its business will be hazardous to its insureds, policyholders, creditors, and the public." Accordingly, the Commission was appointed as STIC's receiver and was authorized "to proceed with the rehabilitation or liquidation of [STIC] and to take whatever steps . . . reasonably necessary . . . for the protection of [STIC's] insureds, policyholders, creditors, or the public."

         On May 21, 2012, through its Virginia-appointed receiver, STIC sued Uddin in Harris County District Court. STIC, being subrogated to Sterling's rights against third parties by the Lender's Policy's terms, sought payment from Uddin for the damages it would incur from its having to pay Sterling under the policy. After Sterling formally filed its claim with STIC under the Lender's Policy in September 2012, the trial court granted an agreed plea in abatement that removed the case from the trial court's docket until Sterling's claim against STIC was "settled or resolved such that the exact amount of damages sought by [STIC could] be confirmed." Sterling eventually received $710, 000 from STIC on its Lender's Policy claim.

         Through a series of assignments that concluded in June 2016, Sterling's rights under the Note were assigned to STIC. And on August 30, 2016, STIC filed an amended petition against Uddin, abandoning its subrogation action and seeking full recovery under the terms of the Guaranty Agreement. During the nearly two years of litigation that followed, STIC unsuccessfully moved for summary judgment numerous times, and Uddin repeatedly asserted a number of defenses, including the statute of limitations and offsets.

         In STIC's final attempt at summary judgment, it argued, among other things, that under Paragraph 11 of the Guaranty Agreement, Uddin waived all defenses, including his statute-of-limitations and offset defenses. STIC also contended that, even if Uddin did not waive the statute-of-limitations defense, its claim under the Note was still timely. The trial court granted STIC's motion and ultimately signed a judgment requiring Uddin to pay $1, 656, 269.28, which consisted of the Note's remaining principal balance, interest, and various fees. Uddin unsuccessfully moved for a new trial and now appeals.

         Analysis

         Uddin contends that the trial court improperly granted summary judgment because the statute of limitations deprived it of subject-matter jurisdiction; STIC did not cure its lack of capacity until after the statute of limitations lapsed; STIC failed to prove each ...


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