Thomas D. Young A/K/A T. David Young v. JP Morgan Chase Bank, N.A.
03-15-00261-CV
| Tex. App. | Sep 1, 2015Background
- David Young (borrower/homeowner) and JPMorgan Chase (servicer for Deutsche Bank) settled pending foreclosure litigation by a written Compromise Settlement Agreement requiring Young to obtain a third‑party refinance or sell and deliver $220,000 to payoff the loan by August 1, 2014.
- The Agreement obligates the parties to perform "any and all such further acts as may be reasonably necessary to consummate the transactions contemplated in this Agreement."
- Young attempted to close a refinance but an updated appraisal and the federally mandated, non‑waivable 3‑day right of rescission delayed funding past August 1 by only a few days; Young requested an updated payoff/brief extension from Chase before and shortly after the deadline.
- Chase refused to provide a new payoff letter or grant any extension; Young claims Chase’s refusal prevented performance and was inequitable.
- The trial court granted JPMorgan Chase’s traditional motion for summary judgment, ordered specific performance (execution of an agreed judgment), foreclosure, and denied Young’s counterclaims; Young appealed.
Issues
| Issue | Plaintiff's Argument (Young) | Defendant's Argument (Chase) | Held |
|---|---|---|---|
| Whether "time is of the essence" for performance under the Settlement Agreement | Time is not of the essence unless expressly stated or the contract’s nature demands it; the Agreement contains no express term and a brief delay was reasonable. | The Agreement set an August 1 payoff deadline and provided consequences for failure to tender Settlement Funds, supporting enforcement. | Trial court treated deadline as material and granted summary judgment for Chase (specific performance/foreclosure). |
| Whether summary judgment was proper on the issue of breach/nonperformance | The question is fact‑intensive (whether time was of the essence and whether Chase’s conduct prevented performance) and inappropriate for summary judgment. | Chase argued material deadline and absence of facts creating a genuine issue precluding judgment. | Trial court granted summary judgment to Chase; Young contends de novo review should reverse. |
| Whether Chase’s refusal to issue a payoff letter bars equitable relief under unclean hands | Young argues Chase had "unclean hands" by refusing to take a simple further act (issue payoff) that would have permitted compliance with the federal rescission period, so Chase should be denied equitable relief. | Chase relied on the Agreement’s deadlines and enforcement provisions to seek equitable relief. | Trial court nonetheless awarded equitable relief to Chase; Young argues this was error under the clean‑hands doctrine. |
| Proper equitable remedy (specific performance/foreclosure) | Young contends equitable remedy should be denied because Chase’s conduct prevented performance and time was not of the essence. | Chase sought and obtained specific performance and foreclosure as provided by the Agreement. | Court awarded specific performance, foreclosure, attorney’s fees, and costs to Chase; Young appeals. |
Key Cases Cited
- Lockhart‑Hutchens v. Bergstrom, 434 S.W.2d 453 (Tex. Civ. App.—Austin 1968) (time is not of the essence in land conveyance contracts absent express language or necessity)
- Laredo Hides Co. v. H & H Meat Products Co., 513 S.W.2d 210 (Tex. Civ. App.—Corpus Christi 1974) (date alone does not make time of the essence; requires clear manifestation)
- Valence Operating Co. v. Dorsett, 164 S.W.3d 656 (Tex. 2005) (standard of review for summary judgment and contractual interpretation principles)
- Diversicare Gen. Partner, Inc. v. Rubio, 185 S.W.3d 843 (Tex. 2005) (summary judgment review: view entire record in favor of nonmovant)
- Meisler v. Smith, 814 F.2d 1075 (5th Cir. 1987) (discussing Texas precedent that time is not of the essence absent clear intent)