Ben Melton v. CU Members Mortgage, a Division of Colonial Savings, F.A. And First Western Title Co.
03-15-00339-CV
Tex. App.Dec 8, 2015Background
- In 2009 Ben Melton obtained a Texas home‑equity loan (note and security instrument) secured by his primary residence; Colonial was the original lender and later became servicer for Freddie Mac.
- Melton alleges multiple origination defects (constitutional §50(a)(6) violations, fraud, DTPA, breach and seeks forfeiture/voiding of the loan); claims accrued at closing (March 13, 2009).
- Melton filed his original petition on March 13, 2013 (the last day of the applicable residual limitations period) but did not effect service on defendants until May 13, 2013.
- Defendants moved for summary judgment asserting Melton’s claims were time‑barred because he failed to exercise due diligence in effectuating service and applicable limitations run from closing.
- The trial court granted summary judgment for appellees on July 14, 2014 and later awarded attorney’s fees; appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff’s filing on the limitations deadline tolled limitations when service occurred after the period | Melton filed on last day and argues he reasonably waited to serve to allow a 60‑day cure period after sending a notice of defect | Defendants: timely filing does not toll limitations unless plaintiff exercised due diligence in effecting service; Melton waited two months with no service efforts and his strategy/mistake does not excuse delay | Court held: no tolling—summary judgment warranted because Melton failed as a matter of law to use due diligence in serving process |
| Which limitations period applies to home‑equity origination defect claims | Melton argued limitations unclear or inapplicable | Defendants: such claims are governed by the residual four‑year limitations period because defects are potentially curable and liens are voidable, not void ab initio | Court held: four‑year residual limitations applies; claims accruing at closing are time‑barred if not timely brought and served |
| Whether Colonial has standing to foreclose/counterclaim | Melton (on appeal) contended Colonial lacked proof it was mortgage servicer or mortgagee entitled to foreclose | Defendants: Colonial is servicer (payment history, notice of default, affidavit) and is last assignee of record, qualifying as a mortgagee under Property Code | Court held: Colonial has standing as mortgage servicer and as mortgagee of record to pursue foreclosure |
| Whether attorney’s fees award to defendants was proper | Melton challenged merits and fees on appeal | Defendants: fees proper because summary judgment on merits was correct | Court affirmed award of attorney’s fees alongside summary judgment (appellees’ position upheld) |
Key Cases Cited
- Priester v. JP Morgan Chase Bank, N.A., 708 F.3d 667 (5th Cir. 2013) (home‑equity origination defects are potentially curable and subject to a limitations period)
- Proulx v. Wells, 235 S.W.3d 213 (Tex. 2007) (timely filing does not toll limitations absent diligence in service)
- Valence Operating Co. v. Dorsett, 164 S.W.3d 656 (Tex. 2005) (standard for de novo appellate review of summary judgment)
- In re Estate of Hardesty, 449 S.W.3d 895 (Tex. App.—Texarkana 2014) (applying residual limitations to home‑equity origination claims)
- Wood v. HSBC Bank USA, N.A., 439 S.W.3d 585 (Tex. App.—Houston [14th Dist.] 2014) (same)
- Santiago v. Novastar Mortg., Inc., 443 S.W.3d 462 (Tex. App.—Dallas 2014) (same)
- Williams v. Wachovia Mortg. Corp., 407 S.W.3d 391 (Tex. App.—Dallas 2013) (same)