Jarvis, William C. and Cindy Jarvis v. K&E RE One, LLC Stewart Title Company Bayview Loan Servicing, LLC
390 S.W.3d 631
| Tex. App. | 2012Background
- Lofton purchased a 14-unit property in Dallas; NAC serviced the loan between Jarvises (lenders) and Lofton; NAC handled payments, escrowed funds, and communications with counsel for foreclosure or bankruptcy; Lofton signed documents naming NAC as servicer or c/o; payoff funds were wired to NAC after a sale closing; NAC began issuing monthly checks to the Jarvises purportedly as loan payments; the Jarvises later alleged NAC had no authority to receive payoff funds on their behalf; in 2009–2010 the Jarvises sued to declare the Note paid and the DOT discharged and to enjoin foreclosure; the trial court found NAC had actual, implied, and apparent authority to accept payoff funds on the Jarvises’ behalf and granted K&E relief and fees; Stewart Title and Bayview were also largely successful in summary judgment proceedings; this appeal followed.
- The Jarvises sought to exclude evidence of NAC activity on other loans, asserting parol evidence barred such collateral conduct; the court held collateral evidence was admissible to establish NAC’s authority.
- Trial court granted summary judgment to Stewart Title and Bayview; the court found NAC had authority to receive payoff funds and that payment to NAC discharged the lien; the Jarvises’ breach of contract and negligence claims against Stewart Title were resolved in favor of Stewart Title and Bayview on summary judgment.
- The court awarded UDJA-based attorney’s fees to K&E; the Jarvises challenged the basis and the inclusion of a legal assistant’s time, but the court found no abuse of discretion and affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether parol evidence barred collateral NAC conduct evidence | Jarvises: parol evidence bars extrinsic NAC conduct | K&E: collateral evidence consistent with loan terms admissible | No; collateral evidence admissible, parol rule not bar |
| Whether NAC had authority to accept payoff funds | Jarvises: NAC lacked authority | K&E: NAC had actual/implicit authority | NAC had implied actual authority to accept payoff funds |
| Whether summary judgment for Stewart Title/Bayview was proper | Jarvises: Stewart Title breached duties to pay funds | Stewart Title: paid funds to NAC; no breach | Stewart Title/Bayview entitlement to summary judgment; lien discharged |
| Whether attorney’s fees under UDJA were proper | Jarvises: fees improper for quiet-title-like action | K&E: UDJA permissible for real-note validity relief | Fees upheld; no abuse of discretion |
Key Cases Cited
- Audubon Indem. Co. v. Custom Site-Prep, Inc., 358 S.W.3d 309 (Tex. App.—Houston [1st Dist.] 2011) (parol evidence rule; collateral agreements)
- Hubacek v. Ennis State Bank, 159 Tex. 166 (1958) (parol evidence; collateral agreement exception)
- David J. Sacks, P.C. v. Haden, 266 S.W.3d 447 (Tex. 2008) (unambiguous contract enforcement; collateral evidence exception)
- Swinnea v. ERI Consulting Eng'rs, Inc., 318 S.W.3d 867 (Tex. 2010) (collateral and consistent exception to parol rule)
- Gaines v. Kelly, 235 S.W.3d 179 (Tex. 2007) (apparent authority; estoppel standard)
- CNOOC Se. Asia Ltd. v. Paladin Res. (SUNDA) Ltd., 222 S.W.3d 889 (Tex. App.—Dallas 2007) (actual/apparent authority considerations)
- Cash v. Lebowitz, 734 S.W.2d 396 (Tex. App.—Dallas 1987) (payment to authorized agent constitutes payment to principal)
- Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standard for reviewing summary judgment; defer to inferences)
- Perkins v. Sterne, 23 Tex. 561 (1859) (lien discharge upon payment)