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Garcia v. Reverse Mortgage Solutions, Inc.

Court of Appeals of Texas, Fourth District, San Antonio

July 10, 2019

Terry T. GARCIA, Deceased and/or All Other Occupants, Appellants
v.
REVERSE MORTGAGE SOLUTIONS, INC., Appellee

          From the County Court at Law No. 10, Bexar County, Texas Trial Court No. 2018CV02856 Honorable Jason Wolff, Judge Presiding

          Sitting: Rebeca C. Martinez, Justice, Beth Watkins, Justice, Liza A. Rodriguez, Justice

          MEMORANDUM OPINION

          Rebeca C. Martinez, Justice

         Appellant Cindy Garcia, an heir of Terry Garcia, appeals the trial court's judgment granting possession of a foreclosed home to Reverse Mortgage Solutions, Inc. ("RMS"). We affirm the trial court's judgment.

         Background

         Terry Garcia executed a Fixed Rate Home Equity Conversion Deed of Trust ("Original Deed") on the disputed property ("Property") to secure a reverse mortgage loan. The Original Deed contained a clause stating Terry, or anyone in possession of the Property through Terry, must surrender the Property to the purchaser of the Property at a nonjudicial foreclosure sale should the Property be foreclosed. Under the clause, if Terry failed to surrender the Property upon foreclosure, Terry would become a tenant at sufferance and could be removed by a forcible detainer action. However, the Original Deed contained an erroneous legal description of the Property. In 2015, the original mortgagee filed a correction deed ("Corrected Deed") to correct the legal description of the Property. All other terms of the Original Deed remained the same in the Corrected Deed. The original mortgagee filed the Corrected Deed without Terry's signature because it considered the change to be a non-material correction that did not require Terry's signature under section 5.028 of the Texas Property Code.

         Apparently, Terry defaulted on the loan; thereafter, the mortgagee initiated a nonjudicial foreclosure and sold the Property to RMS on July 4, 2018.[1] A Substitute Trustee's Deed was recorded in the Bexar County Public Records identifying RMS as the new owner of title to the Property. RMS subsequently notified Cindy Garcia[2] that she was a tenant at sufferance, and that RMS would initiate a forcible detainer action if she did not vacate the Property. Cindy did not vacate the Property.

         RMS initiated the first of two forcible detainer actions. In the first action, the Justice of the Peace court ("JP court") determined RMS was entitled to possession of the Property, and Cindy appealed the judgment to the county court at law. The appellate record does not include a final judgment entered by the county court at law in the first action. It is undisputed that the appeal was nonsuited.

         RMS then initiated a second forcible detainer suit. The JP court again determined RMS was entitled to possession of the Property, and Cindy appealed that judgment to the trial court in the underlying cause. The trial court agreed with the JP court and entered judgment finding RMS was entitled to possession of the Property. Cindy appeals claiming the trial court: (1) was barred from adjudicating the case under the doctrine of collateral estoppel; (2) lacked subject matter jurisdiction; and (3) erred because RMS does not hold title to the Property since the Corrected Deed was filed without Terry's signature. Cindy also attempts to make a statute of limitations argument regarding the Corrected Deed.

         Collateral Estoppel

         Cindy claims the forcible detainer action initiated in the first forcible detainer action bars the second forcible detainer action on appeal in this case. We disagree.

         "Collateral estoppel bars a claim only if (1) the facts sought to be litigated in the second action were fully and fairly litigated in the first action; (2) those facts were essential to the judgment in the first action; and (3) the parties were cast as adversaries in the first action." Hallco Tex., Inc. v. McMullen County, 221 S.W.3d 50, 73 (Tex. 2006) (citations omitted). All three elements of collateral estoppel must be met in order for the doctrine to apply. Avila v. St. Luke's Lutheran Hosp., 948 S.W.2d 841, 847 (Tex. App.-San Antonio 1997, pet denied).

         In this case, because no judgment is contained in the record before us, Cindy cannot demonstrate that the facts were fully and fairly litigated in the first action.[3] See Ex parte Serna, 957 S.W.2d at 608. Both parties concede there was not a final judgment entered by the county court at law in the first forcible detainer action. Because Cindy has failed to satisfy the first and second prongs of the test, the doctrine of collateral estoppel does not bar the second forcible detainer action. See Hallco, 221 S.W.3d at 73. Cindy's first issue is overruled.

         Subject ...


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