Residential Credit Solutions, Inc. v. Martha Burg
01-15-00067-CV
| Tex. App. | May 1, 2015Background
- Borrower Martha Burg executed a Texas home-equity note and deed of trust in 2007; note was later held by Residential Credit Solutions, Inc. (RCS).
- Saxon (prior servicer) mailed a Notice of Acceleration on August 12, 2008 and filed an expedited foreclosure action that was later dismissed after settlement discussions.
- In mid–2009 Saxon sent Burg proposed stipulation agreements (reflecting only the defaulted amounts, not the full accelerated balance), and Burg executed a Home Affordable Modification Trial Period Plan and made one trial payment (Oct. 19, 2009) which was accepted.
- RCS later sent a Notice of Default (Feb. 19, 2013) and a Notice of Acceleration (Apr. 26, 2013) and filed a second foreclosure action in May 2013; that action was dismissed after Burg sued to declare RCS’s lien void under TEX. CIV. PRAC. & REM. CODE § 16.035(d).
- Trial court granted Burg summary judgment on Sept. 12, 2014, declaring RCS’s deed of trust lien void under § 16.035(d) (because Burg argued the 2008 acceleration started the four‑year limitations period and RCS did not foreclose within four years).
- RCS appealed, arguing the 2008 acceleration was abandoned (by later stipulations, modification negotiations, and acceptance of payment), so limitations restarted only after the 2013 acceleration and RCS’s 2013 counterclaim to foreclose was timely.
Issues
| Issue | Plaintiff's Argument (Burg) | Defendant's Argument (RCS) | Held (trial court) |
|---|---|---|---|
| Whether RCS’s deed of trust lien is void under TEX. CIV. PRAC. & REM. CODE § 16.035(d) because acceleration occurred on Aug. 12, 2008 and four years have passed | Aug. 12, 2008 acceleration triggered accrual; RCS failed to foreclose within four years, so lien and power of sale are void | Saxon/RCS abandoned the 2008 acceleration (stipulations, modification negotiations, acceptance of payment); limitations was tolled/restarted with the Apr. 26, 2013 acceleration, so foreclosure was timely | Trial court held the lien void under § 16.035(d) (ruled for Burg) |
Key Cases Cited
- Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562 (Tex. 2001) (accrual occurs when holder accelerates maturity; holder may abandon acceleration by accepting payments)
- Khan v. GBAK Properties, Inc., 371 S.W.3d 347 (Tex. App. 2012) (acceleration may be abandoned; abandonment restores original note condition)
- San Antonio Real Estate Bldg. & Loan Assn. v. Stewart, 61 S.W. 386 (Tex. 1901) (historical authority that acceleration can be abandoned)
- Provident Life & Acc. Ins. Co. v. Knott, 128 S.W.3d 211 (Tex. 2003) (standard of review for summary judgment; appellate courts review de novo)