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Melton v. CU Members Mortgage

Court of Appeals of Texas, Third District, Austin

July 31, 2019

Ben Melton, Appellant
v.
CU Members Mortgage, a Division of Colonial Savings F. A.; and First Western Title Co., Appellees

          FROM THE 340TH DISTRICT COURT OF TOM GREEN COUNTY NO. C130102C, THE HONORABLE JAY K. WEATHERBY, JUDGE PRESIDING

          Before Justices Goodwin, Baker, and Triana.

          OPINION

          Gisela D. Triana, Justice.

         In this dispute concerning the constitutionality of a loan on real property, Appellant Ben Melton challenges the district court's grant of summary judgment in favor of Appellees. We will affirm the judgment in part and reverse and remand in part for a determination of attorney's fees.

         BACKGROUND

         In 1997, Melton purchased a leasehold estate interest from the City of San Angelo for a property on Lake Nasworthy. The leasehold is Melton's homestead. Melton makes annual payments under the terms of the lease, which ends in September 2036. On March 13, 2009, Melton refinanced an existing note on the property by taking out a home equity loan from Colonial.[1] To effectuate the loan, Melton signed a Texas Home Equity Note (Note) and a Texas Home Equity Security Instrument (collectively, the loan documents) securing a $223, 648 lien on the leasehold. The loan was settled and funded at title company First Western's office. Melton stopped paying on the Note in February 2013. On March 13, 2013, the fourth anniversary of the day he signed the loan documents, Melton sued Appellees as well as the appraiser involved in the loan's origination, asserting several causes of action and seeking a declaratory judgment that the loan was not eligible for foreclosure based on several provisions of Article XVI, section 50, of the Texas Constitution.

         Appellees moved for summary judgment on the ground that the statute of limitations barred Melton's claims, which Appellees asserted accrued on the date the loan closed. Although Melton filed his suit on the fourth anniversary of the loan's closing, he did not serve Appellees with the suit until two months later, May 13, 2013. The district court granted summary judgment in favor of Appellees in 2014, ordering that Melton take nothing on his claims. The district court ruled that Melton defaulted on his payment obligations, that the loan could be foreclosed through sale of the property, and that Colonial could recover attorney's fees and costs from Melton. In 2015, the district court granted summary judgment in favor of the appraiser. The district court found Melton's claims against the appraiser frivolous and awarded sanctions against Melton and Melton's attorney. Melton did not challenge the portions of the judgment relating to the appraiser, although his then-attorney appealed the sanctions against him. See Mosser v. Mims, No. 03-15-00365-CV, 2017 Tex.App. LEXIS 3988, at *1 (Tex. App.-Austin May 3, 2017, no pet.) (mem. op.). After these rulings were merged into a final judgment, Melton appealed, arguing that his claims against Appellees alleging constitutional defects in the loan were not subject to any limitations defense.

         While Melton's appeal was pending, the Texas Supreme Court issued Wood v. HSBC Bank USA, N.A., holding that "liens securing constitutionally noncompliant home-equity loans are invalid until cured and thus not subject to any statute of limitations." 505 S.W.3d 542, 545 (Tex. 2016). In light of Wood, this Court reversed the judgment of the district court and remanded the case for further proceedings. See Melton v. CU Members Mortg., No. 03-15-00339-CV, 2017 Tex.App. LEXIS 1441 (Tex. App.-Austin Feb. 22, 2017, no pet.) (mem. op.). On remand, Appellees again moved for summary judgment, which the district court granted, entering an order disposing of all claims except for the amount of attorney's fees to be awarded to Appellees. Later the district court granted summary judgment to Appellees as to their attorney's fees. On Appellees' motion, the district court entered an amended order combining its two earlier orders into a single final order. Melton appeals.

         STANDARD OF REVIEW

         Appellees moved for summary judgment on both no-evidence and traditional grounds. A no-evidence summary-judgment motion must assert that the nonmovant has produced no evidence of one or more essential elements of its claim. Duvall v. Texas Dep't of Human Servs., 82 S.W.3d 474, 477 (Tex. App.-Austin 2002, no pet.); see Tex. R. Civ. P. 166a(i). Once the movant specifies the elements on which there is no evidence, the burden shifts to the nonmovant to produce summary-judgment evidence raising a genuine issue of material fact on the challenged elements. Trilogy Software, Inc. v. Callidus Software, Inc., 143 S.W.3d 452, 459 (Tex. App.-Austin 2004, pet. denied) (citing Tex.R.Civ.P. 166a(i)). To raise a genuine issue of material fact, the nonmovant must set forth more than a scintilla of probative evidence as to the essential elements of the nonmovant's claim on which the nonmovant would have the burden of proof at trial. Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). If the evidence supporting a finding rises to a level that would enable reasonable, fair-minded persons to differ in their conclusions, then more than a scintilla of evidence exists. Id. Less than a scintilla of evidence exists when the evidence is "so weak as to do no more than create a mere surmise or suspicion" of fact, and the legal effect is that there is no evidence. Jackson v. Fiesta Mart, Inc., 979 S.W.2d 68, 70 (Tex. App-Austin 1998, no pet.) (quoting Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983)). If the nonmovant fails to produce more than a scintilla of evidence of the challenged fact, the motion must be granted. Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004).

         To prevail on a motion for traditional summary judgment, a party must show that there are no genuine issues of material fact and that it is entitled to judgment as a matter of law. Tex.R.Civ.P. 166a(c); KMS Retail Rowlett, LP v. City of Rowlett, No. 17-0850, 2019 Tex. Lexis 463, at *9 (Tex. May 17, 2019). When reviewing a summary judgment, we take as true all evidence favorable to the nonmovant, indulging every reasonable inference and resolving any doubts in the nonmovant's favor. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). A defendant who moves for summary judgment must disprove at least one essential element of the plaintiffs causes of action. Duvall, 82 S.W.3d at 477.

         If the trial court does not state the basis on which it granted summary judgment, we must affirm if any of the movants' theories has merit. Texas Workers' Comp. Comm'n v. Patient Advocates, 136 S.W.3d 643, 648 (Tex. 2004). Because the propriety of a summary judgment is a question of law, we review the trial court's decision de novo. Valence Operating Co., 164 S.W.3d at 661.

         DISCUSSION

         Melton argues the district court erred in granting summary judgment for a multitude of reasons that are organized into four overarching issues: (1) the district court abused its discretion in sustaining objections to two pieces of summary-judgment evidence, (2) the district court erred in ruling that Melton take nothing on his claims against Appellees, (3) the district court erred in granting Appellees' motion for summary judgment, and (4) the district court erred in awarding attorney's fees to Appellees.

         Summary-Judgment Evidence

         In his first issue, Melton complains that the district court abused its discretion in sustaining two of Appellees' objections to summary-judgment evidence. Appellees had objected that (1) Melton's declaration was a sham affidavit, (2) Melton's designation of an expert was untimely, and (3) Melton is contractually estopped from challenging the appraisal. The district court agreed ...


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