Wendy Lee Kyle v. H.T. Strasburger, Individually and in His Capacity as a Member of the Board of Directors of Fidelity Bank of Texas, and as a Member of Tuition LLCShirley Strasburger, Individually and in Her Capacity as Vice-Chair of the Board of Directors of Fidelity, 520 S.W.3d 74

Background

In 2004 Mark Kyle obtained a $1.1M home-equity loan from Fidelity Bank secured by the couple’s homestead; Wendy Kyle’s signature on the loan documents was later alleged to be forged.
Fidelity proceeded toward nonjudicial foreclosure in 2011 and filed an application including an affidavit stating both Mark and Wendy had executed the loan; Wendy filed a verified denial claiming she never signed or authorized the signature.
During divorce proceedings Wendy conveyed her interest in the home to Mark by Rule 11 agreement and the divorce decree; Fidelity later nonsuited Wendy from its foreclosure action.
In 2011 Fidelity sold the note and assigned the lien to Tuition LLC (related to the Strasburgers), which thereafter sought collection/foreclosure naming Wendy.
Wendy sued (2012) alleging fraudulent filing, statutory fraud in a real estate transaction, DTPA and Finance Code violations, claims to void the loan and deed, and forfeiture of principal and interest.
The trial court granted Fidelity’s traditional and no-evidence summary judgment; on appeal the court affirmed, primarily holding Wendy’s voidness/forfeiture claims were time-barred because constitutional defects were curable and thus subject to the four-year residual limitations period.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether claim to declare home-equity loan void and obtain forfeiture of principal/interest is time-barred	Kyle: Section 50(a)(6)(A) violation renders loan void ab initio and not subject to limitations	Fidelity: Section 50(a)(6)(Q)(xi) is a cure provision; defects are curable so claim is subject to 4-year residual statute	Held: Defect is curable; loan is voidable not void; 4-year residual limitations applies; Kyle’s claim (filed ~8 years after loan) is barred
Whether claim that special warranty deed is void survives summary judgment	Kyle: Deed should be set aside as incident to void loan	Fidelity: Claim is time-barred under residual limitations	Held: Kyle did not contest the limitations ground on appeal; summary judgment affirmed on that unchallenged ground
Fraud in a real estate transaction (no-evidence) — falsity, intent to induce, reliance, causation	Kyle: Fidelity’s foreclosure application and affidavit falsely stated both spouses executed and were obligated on the loan; she relied and was induced	Fidelity: Even if signature was forged, because the loan is only voidable and limitations expired, statements were not false; no evidence of required elements	Held: No-evidence summary judgment affirmed — Kyle’s fraud claim premised on a void loan fails because loan became valid after limitations expired, so no genuine fact issue on falsity or reliance
Finance Code (ch. 392) and DTPA claims based on misrepresentation of debt status	Kyle: Filing foreclosure application misrepresented her obligation and thus violated Finance Code and DTPA; reliance not required for Finance Code claim	Fidelity: Loan was in default and valid (limitations lapsed); statements about obligation were not false	Held: No-evidence summary judgment affirmed — loan’s validity at time barred challenge; Fidelity did not misrepresent debt status; claims fail

Key Cases Cited

In re Estate of Hardesty, 449 S.W.3d 895 (Tex. App. Texarkana 2014) (lien defective under article XVI §50 is curable; claim subject to residual limitations)
Williams v. Wachovia Mortg. Corp., 407 S.W.3d 391 (Tex. App. Dallas 2013) (section 50(a)(6)(Q)(x) is a cure provision making liens voidable)
Priester v. JPMorgan Chase Bank, N.A., 708 F.3d 667 (5th Cir. 2013) (federal court discussion of curability under §50(a)(6))
Brazzel v. Murray, 481 S.W.2d 801 (Tex. 1972) (distinguishing void acts from voidable acts; voidable acts can be ratified or validated)
King Ranch, Inc. v. Chapman, 118 S.W.3d 742 (Tex. 2003) (no-evidence summary judgment legal-sufficiency standard)