Lawrence C. Mathis v. DCR Mortgage III Sub I, L.L.C.
389 S.W.3d 494
| Tex. App. | 2012Background
- Mathis executed a March 31, 2000 promissory note payable to Norwest Bank secured by a deed of trust for a 20,000-square-foot Austin building.
- DCR Mortgage III Sub I, L.L.C. acquired the note and deed of trust from Norwest and became holder.
- DCR appointed a substitute trustee for a May 5, 2009 foreclosure sale after acceleration was contemplated.
- Mathis filed a declaratory judgment and sought a temporary injunction; the trial court conditionally granted injunction but later ruled in favor of DCR on acceleration.
- The trial court found the note accelerated and forecloseable, awarding DCR fees and ordering disbursements from funds deposited in court.
- Appellate court reversed, holding no notice of intent to accelerate was given, so acceleration was improper, and remanded for final computations and disbursements.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was there a valid waiver of notice to accelerate? | Mathis argues waiver was not clear and unequivocal when read with the deed. | DCR contends the waiver in the note is clear and sufficient to waive notice. | Waiver not clearly unequivocal; acceleration void for lack of notice. |
| Did the deed of trust render the waiver ineffective due to read-together construction? | Mathis asserts the deed creates ambiguity that negates a clear waiver. | DCR asserts waiver in the note should stand when read with the security documents. | When read together, waiver is not clear and unequivocal; acceleration void. |
| Was notice of intent to accelerate required under the agreement? | Mathis contends no valid notice was given before acceleration. | DCR relies on waiver and law allowing acceleration without the standard notice. | No effective notice to accelerate; acceleration invalid. |
| Did DCR’s conduct and forbearance actions waive or nullify acceleration? | Mathis argues forbearance and accepting partial payments implied waiver of acceleration. | DCR maintains it did not waive its rights by accepting late or partial payments. | Forbearance did not waive acceleration rights; acceleration remained improper. |
Key Cases Cited
- Shumway v. Horizon Credit Corp., 801 S.W.2d 890 (Tex. 1991) (waiver must be clear and unequivocal; acceleration must be treated with caution)
- Ogden v. Gibraltar Savs. Ass’n, 640 S.W.2d 232 (Tex. 1982) (notice of intent to accelerate generally required unless waived)
- Parker v. Frost Nat’l Bank of San Antonio, 852 S.W.2d 741 (Tex. App.—Austin 1993) (waiver of notices may be valid if clear and explicit)
- Mastin v. Mastin, 70 S.W.3d 148 (Tex. App.—San Antonio 2001) (acceleration is a harsh remedy; strict construction)
- Burns v. Stanton, 286 S.W.3d 657 (Tex. App.—Texarkana 2009) (acceleration provisions receive strict scrutiny)
- Adams v. First National Bank of Bells/Savoy, 154 S.W.3d 859 (Tex. App.—Dallas 2005) (contract interpretation applies to notes and deeds of trust)