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SRMOF II 2012-1 Trust v. Alaimo

Court of Appeals of Texas, Second District, Fort Worth

August 22, 2019

SRMOF II 2012-1 Trust, U.S. Bank Trust National Association, not in its Individual Capacity but Solely as Trustee, Appellant/Cross-Appellee
v.
Kevin Alaimo, Appellee/Cross-Appellant

          On Appeal from the 158th District Court Denton County, Texas Trial Court No. 15-04164-158

          Before Sudderth, C.J.; Gabriel and Womack, JJ.

          MEMORANDUM OPINION

          Lee Gabriel Justice

         In October 2014, Kevin Alaimo filed a suit to quiet title to a residence in Aubrey, Texas. On December 15, 2014, he obtained a final default judgment declaring him to be the fee owner of the residence. Claiming that the default judgment was void, SRMOF II 2012-1 Trust, U.S. Bank Trust National Association, not in its Individual Capacity but Solely as Trustee (U.S. Bank) subsequently filed an amended petition for bill of review seeking to set aside that default judgment. The trial court granted the amended petition and set aside the default judgment.

         The parties then proceeded to adjudicate the merits of Alaimo's quiet-title suit. Alaimo moved for summary judgment. The trial court granted the motion and signed a final judgment on August 2, 2018, that declared Alaimo to be the fee owner of the residence. Both Alaimo and U.S. Bank have appealed.

         Alaimo's appeal raises two issues challenging the trial court's order granting U.S. Bank's amended petition for bill of review. U.S. Bank's appeal presents three issues challenging the trial court's subsequent order granting Alaimo's motion for summary judgment. We conclude the trial court abused its discretion by granting U.S. Bank's amended petition for bill of review. Therefore, we reverse that order, vacate the trial court's August 2, 2018 final judgment, and render judgment reinstating the December 15, 2014 default judgment.

         I. BACKGROUND [1]

         In early 2008, James Fann borrowed $121, 539 to purchase a residence in Aubrey, Texas. To secure that debt, he executed a deed of trust that ultimately was assigned to U.S. Bank. Fann was also subject to a homeowner's-association agreement that gave the association a lien on the residence to secure his obligations under that agreement. The lien created under the homeowner's-association agreement was subordinate to the deed of trust. Fann eventually defaulted on his obligations under the homeowner's-association agreement, the association foreclosed on its lien, and Mark DiSanti purchased the residence for $2, 300 at the November 3, 2009 foreclosure sale.

         On September 14, 2011, DiSanti conveyed the residence to the Bradford 790 Land Trust (Bradford). After that conveyance, U.S. Bank filed a notice stating its intent to foreclose on its lien under the deed of trust. In response, Bradford filed a quiet-title suit, seeking a declaration that U.S. Bank's deed of trust was unenforceable because its power of sale was barred by limitations. On January 6, 2014, the district court signed a default judgment finding that U.S. Bank had been duly served but had failed to answer and rendering judgment in Bradford's favor.

         In its default judgment, the trial court decreed that Bradford owned the residence and that U.S. Bank held no ownership interest in the residence, and it permanently enjoined U.S. Bank from enforcing the power of sale in its deed of trust. On February 21, 2014, Bradford conveyed the residence to Alaimo. A few months later, U.S. Bank filed and, on July 25, 2014, obtained, a bill of review declaring the district court's January 6, 2014 default judgment void and of no effect.

         On October 23, 2014, Alaimo initiated trial court cause number 14-08565-158, a quiet-title suit alleging that since the time he had acquired the residence, U.S. Bank had attacked the January 6, 2014 default judgment that was in his chain of title and had attempted to reassert an ownership interest in the residence. Alaimo alleged that he was a bona fide purchaser of the residence, and he sought a declaration that as such, he owned the residence free of any encumbrances claimed by U.S. Bank. On December 15, 2014, the trial court signed a default judgment finding that U.S. Bank had been duly served but had failed to answer. The trial court rendered judgment declaring that Alaimo was a bona fide purchaser of the residence and owned it free of any liens or encumbrances that arose prior to the time he had purchased it from Bradford.

         Presumably unaware of the trial court's December 15, 2014 default judgment, U.S. Bank foreclosed on its deed of trust and purchased the residence for $219, 661.15 at the foreclosure sale in April 2015.

         On May 18, 2015, U.S. Bank initiated this bill-of-review proceeding, docketed as trial court cause number 15-04164-158, seeking to set aside the December 15, 2014 default judgment in trial court cause number 14-08565-158. U.S. Bank alleged it was never properly served with process in trial court cause number 14-08565-158 and that consequently, the December 15, 2014 default judgment the trial court rendered in that cause was void. U.S. Bank amended its bill of review and set it for hearing on July 8, 2015. After conducting a hearing, the trial court granted the amended bill of review and set aside the December 15, 2014 default judgment. This is the order Alaimo challenges on appeal.

         After the trial court set aside the December 15, 2014 default judgment, U.S. Bank and Alaimo proceeded to litigate Alaimo's quiet-title claims against U.S. Bank. The parties eventually filed cross-motions for summary judgment, and the trial court ultimately rendered a final summary judgment in Alaimo's favor, declaring that he owned the residence, that U.S. Bank's deed of trust was unenforceable, and that the April 7, 2015 foreclosure sale was void ab initio. This is the order from which U.S. Bank appeals.

         II. ISSUES ON APPEAL

         In his appeal, Alaimo argues the trial court abused its discretion by granting U.S. Bank's amended petition for bill of review and setting aside the December 15, 2014 default judgment that quieted title to the residence in him. He raises two issues. In the first, he argues that the trial court's granting the bill of review was an abuse of discretion because U.S. Bank failed to plead and prove the three essential elements necessary to prevail on a bill of review. And in the ...


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