349 S.W.3d 148
Tex. App.2011Background
- Charles and Maria Rinard obtained a February 10, 1998 home equity loan from NationsBank of Texas, secured by a deed of trust on their El Paso home.
- The loan included $20,518.24 listed for joint credit life insurance; no line item for credit disability insurance appeared in the note.
- The Rinards defaulted in November 2003; they filed for Chapter 7 bankruptcy in October 2005 and received a discharge in February 2006, but the 1998 loan survived the bankruptcy.
- Bank of America (successor to NationsBank) filed a petition for judicial foreclosure in October 2006; Rinards answered with a general denial and asserted fraud-based defenses and counter-claims under the DTPA and the Texas Insurance Code.
- The trial court granted summary judgment for foreclosure in June 2009, and concluded that the Rinards’ defenses and counter-claims were barred or unsupported.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether summary judgment was proper for foreclosure | Rinard defense issues negate enforceability | Bank showed note, deed of trust, default, intent to accelerate; defenses fail | Yes; court held Bank established right to foreclosure as a matter of law |
| Fraud defense to foreclosure (inducement and misrepresentation) | Rinards relied on bank’s misrepresentation regarding credit disability insurance | Reliance contradicted by express terms of the note; no justifiable reliance | Fraud defenses insufficient; no justifiable reliance; foreclosure upheld |
| Abandonment of counter-claims and offset theory | Rinards’ counter-claims could offset or negate amounts due | No adequate briefing or legal basis; counter-claims dismissed | Counts on counter-claims rejected; summary judgment on foreclosure affirmed for remaining grounds |
| Res judicata and collateral estoppel | Bank’s res judicata defense bars Rinards’ later challenges | Defense justified by bankruptcy proceedings and conduct | Applied; defenses barred by res judicata to the foreclosure action |
| Statutes of limitations on DTPA and Insurance Code claims | Limitations should not bar defensive claims | Limitations bar affirmative relief; defenses treated accordingly | Issues Five and Six overruled; limitations defenses apply |
Key Cases Cited
- Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211 (Tex. 2003) (traditional summary-judgment standards; burden shifting)
- D.R.C. Parts & Accessories, L.L.C. v. VM Motori, S.P.A., 112 S.W.3d 854 (Tex.App.-Houston [14th Dist.] 2003) (reliance required for fraud defense; written contract controls)
- Leone v. Valiant Ins. Co., 461 S.W.2d 426 (Tex.Civ.App.-El Paso 1970) (motion for summary judgment; outline of proving defenses)
- Thigpen v. Locke, 363 S.W.2d 247 (Tex.1963) (duty to exercise ordinary care for protection of interests)
- Garcia v. Vera, 342 S.W.3d 721 (Tex.App.-El Paso 2011) (written terms control when contrary oral representations are alleged)
- Kyle v. Countrywide Home Loans, Inc., 232 S.W.3d 355 (Tex.App.-Dallas 2007) (purchase-money note; proof required for foreclosure)
- Sellers v. Gomez, 281 S.W.3d 108 (Tex.App.-El Paso 2008) (summary-judgment framework in El Paso division)