Meyerhoff v. Pacific Union Financial, LLC

          On Appeal from the 342nd District Court Tarrant County, Texas Trial Court No. 342-298779-18

          Before Kerr, Birdwell, and Bassel, JJ.

          MEMORANDUM OPINION

          Dabney Bassel, Justice

         I. Introduction

         This case concerns a residential mortgage-loan dispute that was resolved by summary judgment when the trial court dismissed Appellant Brent Meyerhoff's claims with prejudice and granted Appellee Pacific Union Financial, LLC's counterclaim for foreclosure. Meyerhoff alleges three points on appeal: (1) the trial court prematurely granted Appellee's motion for summary judgment, (2) fact issues precluded summary judgment on Meyerhoff's claims, and (3) the summary judgment was improper on Appellee's counterclaim because it was not properly pleaded or supported by evidence. We also identify one issue that neither party has brought to our attention: summary judgment was rendered against a party who was never joined and who never entered an appearance in the trial court proceedings, Rhonda Barr. Barr is the wife of Meyerhoff. Though Barr was listed in the notice of appeal, we acquire jurisdiction only over those parties who were parties to the trial court's judgment. We therefore vacate the trial court's judgment as to Barr and affirm the trial court's judgment as to Meyerhoff.

         II. Background

         Meyerhoff signed a note (Note) on May 29, 2015, payable to Loan Simple, Inc. The Note provided a thirty-year term with monthly payments due on the first day of every month. The Note contained an allonge, also dated May 29, 2015, which stated, "PAY TO THE ORDER OF: WITHOUT RECOURSE LOAN SIMPLE, INC. and its successors and assign[s]." The allonge was signed by Loan Simple's CEO.

         Also on May 29, 2015, Meyerhoff and Barr^[1] signed a Deed of Trust to secure the repayment of the Note and their performance under the Deed of Trust and the Note. The Deed of Trust granted Loan Simple a lien and power of sale on certain real property and improvements (Property). The Deed of Trust named Mortgage Electronic Registration Systems, Inc. (MERS) as beneficiary "solely as nominee for [Loan Simple]." The Deed of Trust was recorded on June 3, 2015, in Tarrant County.

         The record reflects that on October 12, 2017, MERS transferred and assigned the Deed of Trust to Appellee. The assignment was recorded in Tarrant County. The record contains an affidavit in which Appellee's "limited assistant vice president," Donald Edwards, averred that Appellee is the "current legal owner and holder of the Note." In his affidavit, Edwards also stated that Meyerhoff had failed to make his June 1, 2017 payment and all subsequent payments. Meyerhoff did not dispute that he had failed to make the June 1, 2017 payment and all subsequent monthly payments.

         In an August 2, 2017 certified letter, Appellee notified Meyerhoff that he was in default for missing the prior three months of payments ($9, 848.01); that he owed late charges ($1, 210.86); and that he owed an escrow advance ($9, 311.82), minus an unapplied balance ($2, 404.44), for a total amount of $17, 966.25 due to cure the default. The notice gave Meyerhoff until September 6, 2017, to cure the default or the maturity of the Note would be accelerated and the Property would be sold under the Deed of Trust. Meyerhoff presented no evidence that he had cured or had attempted to cure the default.

         In an October 5, 2017 certified letter, Appellee's counsel sent Meyerhoff and Barr notices of acceleration, stating that the entire balance ($290, 251.16) on the Note was then due. In a November 13, 2017 certified letter, Appellee's counsel sent Meyerhoff and Barr notices of a foreclosure sale, stating that the trustee or a substitute trustee would be conducting a foreclosure sale at the Tarrant County Courthouse on Tuesday, December 5, 2017, at 10:00 a.m.

         The morning that the foreclosure sale was scheduled to take place, Meyerhoff filed a Chapter 13 bankruptcy petition, which stayed the foreclosure sale. The bankruptcy case was dismissed on December 27, 2017, because Meyerhoff had failed to file required documents, including certain property schedules, a statement of financial affairs, and a bankruptcy plan or summary. New notices of foreclosure sale, dated January 25, 2018, were sent to Meyerhoff and Barr. The notices stated that the foreclosure sale would take place on April 3, 2018, at 10:00 a.m., at the Tarrant County Courthouse.

         On April 2, 2018, Meyerhoff filed his original petition and application for temporary restraining order, bringing various claims, including for violations of the Texas Debt Collection Practices Act (TDCPA), for violations of the Texas Property Code, and alternatively for breach of contract. On the same day, the trial court signed a temporary restraining order, enjoining Appellee from conducting the foreclosure sale.

         On April 20, 2018, Appellee answered Meyerhoff's claims and raised a counterclaim for foreclosure against Meyerhoff and Barr. In its single cause of action labeled "Suit for Foreclosure," Appellee stated as follows:

18. Defendant seeks a judgment for judicial foreclosure allowing it to enforce its lien against the Property in accordance with the Security Instrument and Texas Property Code section 51.002.

19. Alternatively, Defendant seeks a judgment for foreclosure together with an order of sale issued to the Tarrant County sheriff or constable, directing the sheriff or constable to seize and sell the Property in satisfaction of the Loan Agreement debt, pursuant to Texas Rule of Civil Procedure 309.

         On July 10, 2018, Appellee filed a motion for summary judgment, asserting traditional summary-judgment grounds on each of Meyerhoff's claims and on its counterclaim. Appellee also included a no-evidence challenge to Meyerhoff's breach-of-contract claim, arguing that Meyerhoff had produced no evidence of the second, third, and fourth elements of such a claim. Meyerhoff filed a response but attached no summary-judgment evidence. Meyerhoff claimed that one of the parties in the chain of title lacked "capacity" because it did not exist at the time of the loan origination. Further, Meyerhoff claimed that Appellee was making an improper use of deemed admissions. Meyerhoff also challenged Edwards's affidavit as containing inadmissible, conclusory statements.

         On August 31, 2018, the trial court signed a final summary judgment, ordering that Meyerhoff take nothing on his claims, reciting that Appellee was the current holder of the Note and assignee of the Deed of Trust, that a default had occurred on the Note, that the current outstanding balance due on the Note was $315, 522.77, and that Appellee could enforce the Note through nonjudicial foreclosure as provided in the Deed of Trust and Section 51.002 of the Property Code. The final summary judgment did not contain rulings on any of Meyerhoff's evidentiary objections.

         With respect to Barr's presence in the trial-court proceedings, the record reflects that the parties periodically treated her as a party but that there is no indication that she was ever served with process on Appellee's counterclaim or that she had ever entered an appearance before the trial court rendered judgment. The original petition in this matter was filed by Meyerhoff, and the caption and the body of the petition listed only him as the plaintiff. The TRO issued by the trial court granted only the relief requested by Meyerhoff, but the confusion begins in the TRO because its caption includes Barr.

         Next, Appellee filed a counterclaim that joined Barr and stated, "Plaintiffs/Counter-Defendants Brent Meyerhoff and Rhonda Jane Barr ('Plaintiffs') have previously appeared herein and may be served through their counsel of record via ECF notification." The caption of this pleading also listed Barr. But Barr never appeared.

         Appellee then filed its motion for summary judgment against both Meyerhoff and Barr, and the caption of this pleading included Barr as a plaintiff. An answer to the counterclaim and a response to the motion for summary judgment were filed, but both of those documents were filed on behalf of only Meyerhoff, and their captions listed only Meyerhoff as the plaintiff. Appellee then filed a reply in support of its summary-judgment motion with a caption that again included Barr as a plaintiff.

         The trial court's summary judgment listed both Meyerhoff and Barr as parties and rendered judgment against them. A motion to vacate was subsequently filed, but that motion's caption also listed only Meyerhoff as the plaintiff; the motion sought relief only on behalf of "Plaintiff and Counter-Defendant" (both singular in form) and never mentioned Barr. That motion was overruled by operation of law. See Tex. R. Civ. P. 329b(c).

         Meyerhoff filed a notice of appeal. Barr is listed as a party to the notice of appeal and is also listed on the Appellants' brief. Barr does not raise any issue in the ...