Reagan Florey and Neila Florey, Individually and as Trustees for the Mercedes 2004 Trust 6438 v. U.S. Bank National Association, Trustee for the RMAC Trust, Series 2016-CCT and Nationstar Mortgage, L.L.C.
05-20-00306-CV
| Tex. App. | Jun 21, 2021Background:
- 2007: Floreys took a $392,000 home-equity loan secured by a deed of trust; they later defaulted.
- Nationstar sent notice of default on Sept. 6, 2013 and a notice of acceleration on Dec. 19, 2013.
- After acceleration Nationstar continued sending monthly statements and delinquency notices seeking periodic payments, offering reinstatement, modification, or forbearance, and allowing voluntary prepayments without penalty.
- Nationstar filed an expedited foreclosure application in Aug. 2017 (relying on the 2013 default notice); that application was denied in May 2018; Nationstar later assigned the loan to U.S. Bank.
- U.S. Bank filed an expedited-foreclosure application on Jan. 15, 2019; the Floreys sued to quiet title, arguing the four-year statute of limitations expired based on the 2013 acceleration.
- Trial court granted summary judgment to U.S. Bank and Nationstar; the court of appeals affirmed, holding the 2013 acceleration was abandoned and the lenders' standing challenge did not require a verified pleading.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Dec. 2013 acceleration was abandoned, impacting the 4-year limitations period | Floreys: Acceleration remained in effect; foreclosure had to be brought within four years and the lien is time-barred/void | U.S. Bank/Nationstar: Post-2013 conduct (statements seeking partial payments, delinquency notices, offers of reinstatement/modification/forbearance) manifested abandonment of acceleration, resetting limitations; later notices restarted process | Court: Acceleration was abandoned as a matter of law; lien not time-barred; summary judgment for defendants affirmed |
| Whether Nationstar needed a verified pleading to challenge Floreys' quiet-title claim | Floreys: Nationstar failed to file a verified capacity pleading; challenge improper; transfer may be void | Nationstar: It raised lack of standing (not capacity) because it had transferred the lien to U.S. Bank; standing challenges need no verified pleading | Court: Standing (as raised) need not be asserted by verified pleading; claim dismissed as to Nationstar; argument about void transfer fails because lien was valid when transferred |
Key Cases Cited
- Helix Energy Solutions Grp., Inc. v. Gold, 522 S.W.3d 427 (Tex. 2017) (standard of review for summary judgment)
- Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex. 2009) (evaluate summary-judgment evidence in favor of nonmovant)
- FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868 (Tex. 2000) (review both parties' summary-judgment evidence when both move)
- Ford Motor Co. v. Ridgway, 135 S.W.3d 598 (Tex. 2004) (no-evidence summary-judgment standard)
- Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562 (Tex. 2001) (optional acceleration accrues when lender actually exercises the option)
- Boren v. U.S. Nat'l Bank Ass'n, 807 F.3d 99 (5th Cir. 2015) (communications inconsistent with foreclosure can show abandonment of acceleration)
- Affiliated Capital Corp. v. Commercial Fed. Bank, 834 S.W.2d 521 (Tex. App.—Austin 1992) (distinguishing voluntary prepayment from payment based on acceleration)
- Burney v. Citigroup Global Mkts. Realty Corp., 244 S.W.3d 900 (Tex. App.—Dallas 2008) (an expedited-foreclosure application can itself serve as notice of acceleration)
- Nootsie, Ltd. v. Williamson Cty Appraisal Dist., 925 S.W.2d 659 (Tex. 1996) (standing requires a real controversy; verified pleading requirement pertains to capacity, not standing)
- Wilmington Trust, N.A. v. Rob, 891 F.3d 174 (5th Cir. 2018) (after rescission/abandonment of acceleration a new notice may be required; discussed but not controlling here)