Huston v. U.S. Bank National Ass'n
988 F. Supp. 2d 732
S.D. Tex.2013Background
- Hustons obtained a $224,000 home equity loan from Wells Fargo in 2007 secured by a first-lien deed of trust on their Harris County homestead.
- Plaintiffs defaulted on payments beginning in 2009; Wells Fargo notified default and accelerated the debt in December 2009/February 2010.
- Wells Fargo assigned the note and security instrument to U.S. Bank around February 2010; Wells Fargo remained the servicer for U.S. Bank.
- U.S. Bank pursued a Rule 736 foreclosure in state court; Huston I proceedings and related actions followed, including a dismissal of claims in state court and subsequent federal removal and filings.
- Huston II and related pleadings asserted declaratory relief and challenged U.S. Bank’s foreclosure rights; the court here resolves cross-motions for summary judgment on foreclosure and related fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether res judicata bars foreclosure claims | Huston asserts compulsory counterclaim barred foreclose | U.S. Bank argues Kaspar/Douglas avoid compulsory-counterclaim bar | Not barred; Kaspar rule applies to permit remedies choice |
| Whether U.S. Bank could foreclose via judicial foreclosure despite Rule 736 | Kaspar bar prevents foreclosure | Kaspar does not prevent; lender may pursue either remedy | Bank not barred from pursuing judicial foreclosure; Rule 736 and Kaspar applied to permit choice |
| Whether U.S. Bank is entitled to attorneys’ fees | Fees unavailable against mortgagor personally | Fees recoverable against property under security instrument | Fees granted; $28,449.00 recoverable against property, not personally against plaintiffs |
Key Cases Cited
- Gulf Island-IV, Inc. v. Blue Streak-Gulf Is Ops, 24 F.3d 743 (5th Cir.1994) (preclusion law governs res judicata under federal judgment)
- U.S. v. Davenport, 484 F.3d 321 (5th Cir.2007) (four-part test for claim preclusion)
- Montana v. United States, 440 U.S. 147 (1980) (final judgment on the merits requires same claim)
- Dillard v. Sec. Pac. Brokers, Inc., 835 F.2d 607 (5th Cir.1988) (compulsory counterclaims scope in foreclosure context)
- Kaspar v. Keller, 466 S.W.2d 326 (Tex.Civ.App.-Waco 1971) (Kaspar rule: mortgagor cannot force lender into remedies; exception for applicability)
- Douglas v. First RepublicBank Abilene, N.A., 979 F.2d 1128 (5th Cir.1992) (Kaspar doctrine applied to allow lender remedies choice in secured transactions)