Williams v. Nationstar Mortgage, LLC
349 S.W.3d 90
Tex. App.2011Background
- Birds purchased property with two purchase-money notes secured by two deeds of trust; Nationstar held both liens.
- Notice of trustee's sale referenced only the $37,200 lien, omitting the $148,800 lien.
- Foreclosure sale conducted; Williams bought property for $9,000; deed conveyed without reserving Nationstar’s other lien.
- Williams later discovered the $148,800 note/deed of trust; Nationstar sued to foreclose that lien and maintain priority.
- Trial court held the $148,800 lien superior and entered a take-nothing judgment for Nationstar; Williams appealed.
- Appeal raises whether lien priority was legally/factually supported, whether trustee’s deed conveyed Nationstar’s rights, and whether foreclosure on one lien discharged the other.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the evidence supports the priority of the $148,800 lien | Williams contends priority is legally/factually insufficient | Nationstar argues the two liens were recorded identically but the $148,800 lien predates | Evidence supports trial court’s priority finding for the $148,800 lien |
| Whether the trustee's deed conveyed Nationstar’s rights to Williams | Warranty language implies conveyance of Nationstar’s rights | Warranties are from Birds; Nationstar’s equitable interests remained intact | Trustee’s deed warranties are from borrowers, not Nationstar; Nationstar's lien survived |
| Whether foreclosing one lien extinguishes the other lien when liens are separate and recorded | Puntney/ Vieno rule should extinguish the remaining lien | Two separate deeds of trust; foreclosure on one does not terminate the other | Foreclosure did not extinguish the superior $148,800 lien; Nationstar retained its interest |
| Whether nonjudicial foreclosure of one lien discharged the other lien | Vieno/Brown line would discharge the second lien upon sale | Vieno/Brown distinguishable; this is nonjudicial, separate liens | Nonjudicial sale did not discharge the other lien; priority remains intact |
Key Cases Cited
- Anderson v. City of Seven Points, 806 S.W.2d 791 (Tex.1991) (findings review and standard of sufficiency)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex.2005) (legal/factual sufficiency review framework)
- World Help v. Leisure Lifestyles, Inc., 977 S.W.2d 662 (Tex.App.-Fort Worth 1998) (first in time, first in right principle for liens)
- AMC Mortgage Servs., Inc. v. Watts, 260 S.W.3d 582 (Tex.App.-Dallas 2008) (priority of liens; recording and notice considerations)
- Windham v. Citizens Nat'l Bank, 105 S.W.2d 348 (Tex.Civ.App.-Austin 1937) (priority of liens from different dates)
- Winters v. Slover, 251 S.W.2d 726 (Tex.1952) (lien priority and sale authority principles)
- Puntney v. Moseley, 237 S.W.1116 (Tex.Civ.App.-Amarillo 1922) (foreclosure effects on vendor’s lien and related interests)
- Vieno v. Gibson, 20 S.W. 717 (Tex.Civ.App.1892) (vendor's/vendor lien foreclosures and multiple notes with equal dignity)
- Brown v. Canterbury, 104 S.W. 1055 (Tex.1907) (election of remedies and effect on title lien outcomes)
- Alston v. Piper, 79 S.W.357 (Tex.Civ.App.1904) (multiple liens and foreclosure effects on title)