Vanderbilt Mtge and Fin, Inc. v. Cesar Flores, et
692 F.3d 358
5th Cir.2012Background
- Flores and King financed the purchase of a mobile home under a CMH Retail Installment Contract in 2002, with Vanderbilt financing the loan.
- The debt was secured by two Trevino land parcels in Jim Wells County via CMH’s land-in-lieu program, using a Deed of Trust and a Mechanics’ Lien.
- In 2004–2005 CMH VANDERBILT allegedly forged signatures on liens and then, to rectify, released hundreds of liens including the Trevinos’ in 2005.
- In August 2009 Vanderbilt sued Flores and King for foreclosure; Flores and King counterclaimed that the DOT/BML releases released not only the Trevinos’ liens but also Flores and King’s underlying debt and filed related claims (unfair debt collection, fraud, RICO).
- The Trevinos intervened asserting Chapter 12 false liens; a jury found for the Trevinos and others on multiple claims; district court reduced exemplary damages and awarded attorneys’ fees; on appeal the district court’s JMOL/new-trial/remittitur rulings are challenged.
- The central issue is whether the DOT and BML releases ever released Flores and King from their debt and related claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether DOT/BML releases released Flores and King from the underlying debt. | Trevinos argued releases showed intent to release Trevinos only, potentially releasing Flores/King as implied. | Vanderbilt contends releases were ambiguous or did not release the debt; Trevinos’ claims premised on release. | The releases did not release Flores and King from the underlying debt; no ambiguity justified jury relief on this point. |
| Whether Trevinos’ Chapter 12 claims are time-barred by accrual rules. | Trevinos rely on discovery rule tolling the statute of limitations. | Companies argue discovery rule applies differently post-Kansa; liens were public records. | District court properly applied the discovery rule; claims were not time-barred. |
| Whether Trevinos have statutory standing under Chapter 12. | Treviños are obligated or own an interest in property; thus standing. | Lien release moots standing; Trevinos lacked ongoing injury. | Treviños have statutory standing under §12.003(a)(8) despite releases. |
| Whether statutory damages under Chapter 12 are permissible apart from actual damages. | Statutory damages of $10,000 per lien per plaintiff are recoverable as damages. | Argues damages are “exemplary” and limited by Chapter 41. | §12.002(b)(1)(A) provides non-exemplary statutory damages; allowed and not capped by Chapter 41. |
| Whether the district court properly exercised personal jurisdiction over CHI. | CHI marketed land-in-lieu and financed in Texas; contacts existed. | Conflicting evidence on CHI’s separate corporate identity; insufficient contacts. | District court’s finding of specific personal jurisdiction over CHI affirmed; evidence supported contacts. |
Key Cases Cited
- Kansa Reinsurance Co. v. Congressional Mortg. Corp. of Tex., 20 F.3d 1362 (5th Cir. 1994) (constructive notice and discovery-rule applicability in accrual)
- HECI Exploration Co. v. Neel, 982 S.W.2d 881 (Tex. 1998) (constructive notice and due diligence in real-property contexts)
- Sherman v. Sipper, 152 S.W.2d 319 (Tex. 1941) (constructive notice for fraud claims on property records)
- Mooney v. Hardin, 622 S.W.2d 83 (Tex. 1981) (constructive notice in probate/estate contexts)
- Kelley v. Rinkle, 532 S.W.2d 947 (Tex. 1976) (discovery rule under non-contract claims when records exist)