Callan v. Deutsche Bank Trust Co. Americas
11 F. Supp. 3d 761
S.D. Tex.2014Background
- In 2004 Callan obtained a home-equity loan secured by property in Houston; she defaulted in August 2006 and Deutsche (successor to Bank of America) accelerated the loan on November 6, 2007.
- Deutsche filed three expedited non-judicial foreclosure applications (2008, 2009, 2012); it dismissed the 2008 application and later obtained authorization to foreclose in 2009 and 2012 but never completed foreclosure.
- Callan filed Chapter 13 bankruptcy on August 2, 2010; the case was dismissed October 18, 2010. Deutsche sent a “notice of rescission of acceleration” to Callan on November 3, 2011.
- Callan sued (state court, removed) for declaratory relief and quiet title, asserting the four-year limitations period under Tex. Civ. Prac. & Rem. Code § 16.035 expired the lender’s lien.
- Deutsche moved for summary judgment, arguing Callan’s bankruptcy schedules revived the debt under Tex. Civ. Prac. & Rem. Code § 16.065; Callan cross-moved for summary judgment that the lien expired.
- The district court granted Callan leave to amend her complaint, denied Deutsche’s summary-judgment motion, and granted Callan’s cross-motion: the court held Deutsche’s lien expired and is void.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the four-year limitations period on enforcing the deed-of-trust power of sale expired | Callan: accrual date is acceleration (Nov. 6, 2007); adding tolling for the bankruptcy stay, the lien expired Jan. 22, 2012; Deutsche’s 2012 foreclosure was time-barred | Deutsche: Callan’s inclusion of the debt in bankruptcy schedules (and dismissal) revived/reaffirmed the debt under §16.065, extending limitations | Held for Callan: statute accrues on acceleration; §16.065 does not apply because the alleged acknowledgment occurred during—not after—the limitations period, so the lien expired and is void |
| Whether Deutsche effectively rescinded acceleration on Nov. 3, 2011 so as to restart accrual | Callan: Deutsche cannot unilaterally rescind after relying on acceleration for years and after debtor detrimentally relied (bankruptcy); the late rescission is ineffective | Deutsche: sent written notice of rescission Nov. 3, 2011 (and earlier dismissals) — a holder may abandon/withdraw acceleration | Held for Callan: unilateral rescission was ineffective where Deutsche had long relied on acceleration and Callan detrimentally relied; equity bars Deutsche from extending the statutory period |
| Whether acknowledgement in bankruptcy revived a time-barred claim per §16.065 | Callan: acknowledgment occurred while limitations still running, so §16.065 revival does not apply | Deutsche: Dominguez supports that bankruptcy schedules/dismissal can satisfy §16.065 and revive a claim | Held for Callan: §16.065 only revives claims already barred; because the claim was not yet time-barred at dismissal, §16.065 does not revive it |
| Entitlement to remedies (quiet title, declaratory judgment, attorneys' fees) | Callan: seeks quiet title, declaratory judgment that lien expired, and attorney’s fees | Deutsche: opposes relief | Held: quiet title and declaratory judgment granted; attorney’s fees denied (no basis under federal practice / quiet-title law) |
Key Cases Cited
- San Antonio Real-Estate Bldg. & Loan Ass’n v. Stewart, 61 S.W. 386 (Tex. 1901) (waiver/estoppel by conduct may prevent later assertion of rights like acceleration)
- Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562 (Tex. 2001) (holder may abandon acceleration where parties’ conduct demonstrates waiver and debtor relied)
- Dominguez v. Castaneda, 163 S.W.3d 318 (Tex. App.—El Paso 2005) (bankruptcy schedules and dismissal treated as письмен acknowledgment under §16.065; treated as reviving a barred claim)
- Denbina v. City of Hurst, 516 S.W.2d 460 (Tex. App.—Tyler 1974) (dismissal may indicate abandonment of acceleration where debtor did not object)
- Manes v. Bletsch, 239 S.W. 307 (Tex. App.—Austin 1922) (option to accelerate may be irrevocable against the payor where payor objects)
- Swoboda v. Wilshire Credit Corp., 975 S.W.2d 770 (Tex. App.—Corpus Christi 1998) (creditor cannot revoke acceleration when debtor has detrimentally relied)