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Rivera v. Baptist Foundation of Texas

Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg

January 9, 2020

SETH RIVERA, Appellant,
v.
BAPTIST FOUNDATION OF TEXAS, Appellee.

          On appeal from the 404th District Court of Cameron County, Texas.

          Before Chief Justice Contreras and Justices Benavides and Yañez [1]

          MEMORANDUM OPINION ON REHEARING

          LINDA YAÑEZ, JUSTICE.

         Appellant Seth Rivera appeals the trial court's judgment, following a bench trial, in favor of appellee Baptist Foundation of Texas (Baptist Foundation). By his sole issue, Rivera contends the trial court erred in ruling that the statute of limitations period had not run for the collection and foreclosure of real estate. We affirm.[2]

         I. Background

         Rivera purchased real property from the Verbeek family in 1999. He made monthly lien note payments pursuant to the terms of their agreement. Rivera made his last payment on December 14, 2007. On or about April 23, 2008, Verbeek's attorney sent Rivera a "Demand for Payment" which included an optional acceleration clause. Verbeek did not foreclose on the lien.

         Subsequently, Baptist Foundation inherited Verbeek's interest in the property. On or about February 9, 2016, Baptist Foundation sent Rivera a notice of foreclosure and notice of substitute trustee sale for the property. Rivera sued Baptist Foundation, seeking to enjoin Baptist Foundation from foreclosing. Baptist Foundation answered and filed a counterclaim. Rivera filed a motion for summary judgment arguing that because demand for payment was made in April 2008, the applicable four-year statute of limitations barred Baptist Foundation from foreclosing on the property eight years later, which the trial court denied. See Tex. Civ. Prac. & Rem. Code Ann. § 16.035(a). On September 18, 2017, [3]the trial court held a bench trial and determined that the "Demand for Payment" was not an acceleration letter and therefore the statute of limitations had not run. The trial court entered a final judgment in favor of Baptist Foundation on October 4, 2017, and this appeal followed.

         II. Legal Sufficiency

         By his sole issue, Rivera argues the trial court erred by ruling as a matter of law that the statute of limitations had not run for the collection and foreclosure of the property.[4]

         A. Standard of Review[5]

         Limitations is an affirmative defense, which Rivera bore the burden to prove. See Tex. R. Civ. P. 94; Woods v. William M. Mercer, Inc., 769 S.W.2d 515, 517 (Tex. 1988). "When a party attacks the legal sufficiency of an adverse finding on an issue on which she has the burden of proof, she must demonstrate on appeal that the evidence establishes, as a matter of law, all vital facts in support of the issue." Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001) (per curiam). In other words, the appellant must show that there is no evidence to support the finding and the evidence conclusively establishes the opposite of the finding. Id. We first examine the record for any evidence supporting the finding while ignoring all evidence to the contrary. Id. If no evidence supports the finding, then we review the entire record to determine whether the contrary proposition is established as a matter of law. Id. When examining a legal sufficiency challenge, we review the evidence in the light most favorable to the challenged finding and indulge every reasonable inference that would support it. City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005). We credit favorable evidence if a reasonable fact finder could and disregard contrary evidence unless a reasonable fact finder could not. Id. at 827.

         B. Applicable Law

         A foreclosure suit must be filed within four years after the cause of action accrues. Tex. Civ. Prac. & Rem. Code Ann. § 16.035(a). A cause of action for foreclosure does not accrue "until the maturity date of the last note, obligation, or installment." Id. § 16.035(e). "On the expiration of the four-year limitations period, the real property lien and a power of sale to enforce the real property lien become void." Id. § 16.035(d). "While accrual is a legal question, whether a lender has accelerated a note is a fact question." Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 568 (Tex. 2001). If a note contains an optional acceleration clause, defaulting on the note does not automatically begin the statute of limitations. Id. at 566. Rather, the statute of limitations does not start to run until the lender of the note actually exercises its option to accelerate. Id.

         "Effective acceleration requires two acts: (1) notice of intent to accelerate, and (2) notice of acceleration." Id. Each notice must be "clear and unequivocal." Id. (quoting Shumway v. Horizon Credit Corp., 801 S.W.2d 890, 893 (Tex. 1991)). The lender must exercise its option to accelerate "by sending both a notice of intent to accelerate and a notice of acceleration." Id. "If the default has not been cured by the deadline established in the notice, the lender must then give notice of acceleration." Karam v. Brown, 407 S.W.3d 464, 470 (Tex. App-El Paso 2013, no pet.). "So long as it is preceded by the required notice ...


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