Nancy Alanis v. US Bank National Association as Successor Trustee to Bank of America National Association, as Successor by Merger to One LaSalle Bank, N.A. as Trustee for the MLMI Trust Series 2006-HE6
489 S.W.3d 485
Tex. App.2015Background
- In 2006 Nancy Alanis took a $96,000 home-equity loan secured by a deed of trust on her San Antonio duplex; the loan was later serviced/owned by Wilshire/BAC and ultimately US Bank.
- Alanis made “bundled” payments and disputed servicer charges (late fees, forced-place insurance, escrow advances); communications with servicer Wilshire and its VP Danny Tye resulted in partial reapplication of payments but did not resolve all charges.
- Mann & Stevens (foreclosure counsel for the servicer) sent collection/foreclosure notices; Wilshire/Mann & Stevens foreclosed in Jan. 2010 and US Bank bought the property at sale; Alanis sued for fraud, FDCPA (Texas debt-collection statute), and the False Lien Statute among other claims.
- Jury found: BAC (loan servicer) liable for common-law fraud and entitled to a bona fide error defense; US Bank liable under the FDCPA (no bona fide error); Mann & Stevens found to have violated FDCPA but jury rejected its bona fide error defense.
- Trial court granted JNOV for Mann & Stevens (finding it established bona fide-error defense as a matter of law), applied comparative-responsibility reduction (Alanis 30% at trial against BAC/US Bank), applied a $35,000 pretrial settlement credit (Alanis settled earlier with Vericrest), awarded mental-anguish and loss-of-use damages, and awarded attorney’s fees.
- On appeal the court affirmed most rulings but reversed the $95,000 out-of-pocket award as legally insufficient, and reversed the attorney-fee award (because Alanis’s pretrial settlement exceeded the jury recovery); after reductions and credit the appellate court rendered judgment of $0 recovery to Alanis against US Bank and BAC and affirmed take-nothing as to Mann & Stevens.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Declaratory relief voiding deed of trust under Tex. Const. art. XVI §50(a)(6)(Q)(x) | Alanis: she never defaulted; lender failed obligations so lien should be voided and principal/interest forfeited | Bank/servicer: record shows evidence of default, failure-to-perform allegations contested | Court: Alanis failed to prove entitlement as matter of law; evidence conflicted; issue overruled |
| 2. Declaratory relief setting aside foreclosure (Prop. Code §51.002(d); Fin. Code §392.304) | Alanis: servicer failed required notice, misrepresented debt status, and she timely performed; foreclosure should be set aside | Defendants: evidence of notice and proper procedures; jury findings did not establish wrongful sale | Court: Alanis did not prove as matter of law or obtain jury findings to set aside foreclosure; overruled |
| 3. JNOV for Mann & Stevens on bona fide-error defense to FDCPA claim | Alanis: law firm failed to prove reasonable procedures; JNOV improper because jury rejected defense | Mann & Stevens: relied on servicer’s data, produced uncontroverted evidence of internal procedures and reliance; BAC obtained bona fide-error finding | Court: JNOV proper—firm established bona fide-error defense as matter of law; take-nothing judgment affirmed |
| 4. Damages reductions: comparative responsibility and settlement credit | Alanis: Chapter 33 inapplicable; FDCPA is strict liability; settlement credit improper because different defendants | Defendants: claims sound in tort (fraud, FDCPA); Chapter 33 applies; one-satisfaction rule and settlement credit appropriate | Court: Chapter 33 applies; court properly reduced damages by plaintiff’s percentage and applied $35,000 settlement credit |
Key Cases Cited
- Dow Chem. Co. v. Francis, 46 S.W.3d 237 (Tex. 2001) (burden to prove declaratory-judgment affirmative relief; legal-sufficiency standard)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standards for reviewing legal sufficiency; view evidence in light most favorable to verdict)
- Tiller v. McLure, 121 S.W.3d 709 (Tex. 2003) (JNOV/no-evidence review principles)
- Formosa Plastics Corp. USA v. Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41 (Tex. 1998) (out-of-pocket vs. benefit-of-the-bargain damages in fraud)
- Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378 (Tex. 2000) (one-satisfaction rule; single recovery principle)
- Utts v. Short, 81 S.W.3d 822 (Tex. 2002) (burden and proof for settlement credit entitlement)
- Wells Fargo Bank, N.A. v. Robinson, 391 S.W.3d 590 (Tex. App.—Dallas 2012) (remedy to set aside trustee’s deed when foreclosure not conducted under deed-of-trust terms)