Rivera v. Countrywide Home Loans, Inc.

• Citation: 262 S.W.3d 834
• Decision Date: 08 August 2008
• Docket Number: No. 05-07-00962-CV.,05-07-00962-CV.
• Parties: Wilfredo RIVERA and Ines Del C. Rivera, Appellants v. COUNTRYWIDE HOME LOANS, INC., Landsafe Appraisal Services, Inc., and Shirley Burchett, Appellees.
• Court: Court of Appeals of Texas

262 S.W.3d 834

Wilfredo RIVERA and Ines Del C. Rivera, Appellants v. COUNTRYWIDE HOME LOANS, INC., Landsafe Appraisal Services, Inc., and Shirley Burchett, Appellees.

No. 05-07-00962-CV.

Court of Appeals of Texas, Dallas.

August 8, 2008.

Rehearing Overruled October 3, 2008.

Evan R. Clift, Clift & Associates, P.C., Denton, for appellants.

Kirsten M. Castaneda, James M. Wortman, Robert T. Mowrey, Don C. Clayton, Locke Lord Bissell & Liddell LLP, Dallas, Jennifer Pettit, Gay, McCall, Isaacks, Gordon, May & Roberts, P.C., Plano, for appellees.

Before Justices WHITTINGTON, RICHTER, and MAZZANT.

OPINION

Opinion by Justice WHITTINGTON.

Wilfredo and Ines Del C. Rivera appeal summary judgments in favor of Countrywide Home Loans, Inc., Landsafe Appraisal Services, Inc., and Shirley P. Burchett. In nine issues, the Riveras complain the trial judge erred in granting summary judgment on limitations, granting no evidence motions for summary judgment on the Riveras' damages, granting Burchett summary judgment on the Riveras' claim of fraudulent misrepresentation, and awarding attorney's fees to Burchett. We affirm in part and reverse and render in part.

In 1998, the Texas Constitution was amended to allow homeowners to voluntarily encumber their homesteads with liens in exchange for extension of credit, i.e., "home equity loan." TEX. CONST. art. XVI, § 50(a)(6)(A)-(Q). Section 50(a)(6)(B) specifically provides that a Texas homestead is protected "from forced sale, for the payment of all debts" except for an extension of credit that "is of a principal amount that when added to the aggregate total of the outstanding principal balance of all other indebtedness secured by valid encumbrances against the homestead does not exceed 80 percent of the fair market value of the homestead on the date the extension of credit is made." TEX. CONST. art. XVI, § 50(a)(6)(B).

In 2001, the Riveras requested a loan from Countrywide. The loan was to be secured by their homestead. Countrywide contacted a subsidiary, Landsafe, to obtain an appraisal of the property. Landsafe in turn requested Burchett perform the appraisal. Burchett appraised the fair market value of the property at $350,000 as of the September 28, 2001 closing date. Countrywide loaned the Riveras $280,000, eighty percent of the $350,000 fair market value appraisal. At closing, the Riveras received a copy of Burchett's appraisal. They were also provided and signed an "Acknowledgment as to Fair Market Value of Homestead Property" stating the fair market value of the property as of the closing date was $350,000. That acknowledgment, also signed by Countrywide, states the lender "has no knowledge or reason to believe that the fair market value of the Homestead Property stated in this written acknowledgment is incorrect," as well as the lender's acknowledgment of the $350,000 fair market value of the property as of the closing date per the appraisal evaluation. Included in the loan documents at closing was a review appraisal obtained by Countrywide and Landsafe prepared by Jeff McGregor, Jr. This appraisal indicated the $350,000 fair market value by Burchett appeared overstated and the fair market value of the property was between $261,040 and $293,580. A "Home Equity Note Texas Home Equity Security Instrument (First Lien)" was also executed contemporaneously with the home equity loan.

The Riveras fell behind in their loan payments, and the property was scheduled for foreclosure by trustee's sale in April 2006. In March 2006, while speaking with neighbor John "Patrick" Bain, Wilfredo Rivera learned Bain was an appraiser in the mortgage industry. Bain reviewed the Riveras' loan documents and brought McGregor's review appraisal to Wilfredo's attention.

In their original petition, the Riveras assert common law causes of action against Countrywide, Landsafe, and Burchett for negligence, fraud, and conspiracy, seeking damages for mental anguish and out of pocket costs.¹ Additionally, the Riveras allege Countrywide violated article XVI, section 50(a)(6)(B) of the Texas Constitution by lending more than eighty percent of the fair market value of the homestead property.² At the time of the Riveras' loan closing, the forfeiture provision of the home equity constitutional provision stated the lender or any holder of the note for a home equity loan

shall forfeit all principal and interest of the extension of credit if the lender or holder fails to comply with the lender's or holder's obligations under the extension of credit within a reasonable time after the lender or holder is notified by the borrower of the lender's failure to comply.

Act of May 29, 2003, 78th Leg., R.S., S.J.R. No. 42, § 1, 2003 Tex. Gen. Laws 6219, 6219 (amended 2003) (current version TEX. CONST. art. XVI, § 50(Q)(x)).³ See Doody v. Ameriquest Mortgage Co., 49 S.W.3d 342, 343 (Tex.2001) (lender shall forfeit all principal and interest on the extension of credit if lender fails to comply with lender's obligations under extension of credit within reasonable time after lender notified by borrower of lender's failure to comply). The Riveras sought a forfeiture by Countrywide of the loan principal and interest in the event Countrywide failed to cure the alleged violation of the constitution. They also sought reinstatement of a home equity note and security instrument that complied with the constitution. Finally, the Riveras alleged Countrywide violated the fraudulent lien statute by making, presenting, or using a document or other record with the knowledge that the document is a fraudulent court record or a fraudulent lien or claim against real property and sought damages for the same. See TEX. CIV. PRAC. & REM.CODE ANN. § 12.002(a), (b) (Vernon Supp.2008).

Countrywide, Landsafe, and Burchett moved for traditional and no-evidence summary judgments. See TEX.R. CIV. P. 166a(c) and (i). Burchett moved for traditional summary judgment on the grounds that (i) limitations barred the Riveras' common law claims and (ii) Burchett made no false representation. Burchett also moved for no-evidence summary judgment on the ground the Riveras had not sustained any damages. Countrywide and Landsafe jointly moved for traditional summary judgment on the grounds the statute of limitations barred the Riveras' common law claims as well as the two claims against Countrywide and for a no-evidence summary judgment on the ground the Riveras had not sustained any damages. The trial judge granted Countrywide and Landsafe's traditional and no-evidence motions for summary judgment and granted Burchett's motion for summary judgment "in its entirety."

Standard of Review

The standard for reviewing a traditional summary judgment is well established. See TEX.R. CIV. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex.1985). Defendants who move for summary judgment must show the plaintiffs have no cause of action. Defendants may meet this burden by either disproving at least one essential element of each theory of recovery or conclusively proving all elements of an affirmative defense. See Wornick Co. v. Casas, 856 S.W.2d 732, 733 (Tex.1993). A matter is conclusively established if ordinary minds cannot differ as to the conclusion to be drawn from the evidence. See Triton Oil & Gas Corp. v. Marine Contractors & Supply, Inc., 644 S.W.2d 443, 446 (Tex.1982). After the movants have established a right to summary judgment, the burden shifts to the nonmovants to present evidence creating a fact issue. See Kang v. Hyundai Corp., 992 S.W.2d 499, 501 (Tex.App.-Dallas 1999, no pet.).

We review a no-evidence summary judgment under the same legal sufficiency standard used to review a directed verdict. See TEX.R. CIV. P. 166a(i); Gen. Mills Rests., Inc. v. Tex. Wings, Inc., 12 S.W.3d 827, 832-33 (Tex.App.-Dallas 2000, no pet). Thus, we must determine whether the nonmovant produced more than a scintilla of probative evidence to raise a fact issue on the material questions presented. Gen. Mills, 12 S.W.3d at 833. When analyzing both traditional and no-evidence summary judgments, we consider the evidence in the light most favorable to the nonmovant. See Nixon, 690 S.W.2d at 549 (traditional summary judgment); Gen. Mills, 12 S.W.3d at 833 (no-evidence summary judgment).

Countrywide's Statute of Limitations Affirmative Defense

In their first four issues, the Riveras assert the trial judge erred in granting Countrywide's traditional motion for summary judgment on limitations. The Riveras and Countrywide agree the four-year statute of limitations applies to the constitutional and fraudulent lien causes of action. See TEX. CIV. PRAC. & REM.CODE ANN. § 16.051 (Vernon 2008) (when no corresponding action expressly listed within statutes, residual four-year statute of limitations applies); Ho v. Univ. of Tex. at Arlington, 984 S.W.2d 672, 686 (Tex.App.-Amarillo 1998, pet. denied) (same). They disagree, however, on the date of accrual of those causes of action. Countrywide asserts the causes of action accrued on either the date of Burchett's overstated appraisal, September 1, 2001, or the date of the loan closing, September 28, 2001. Although their argument is not clear, it appears the Riveras claim the proper accrual date is the date of the final installment or payment on the home equity note or, in the event of foreclosure, the date of acceleration of the note. The Riveras further argue the discovery rule and fraudulent concealment doctrine apply to preclude summary judgment on limitations grounds.

Defendants moving for summary judgment on the affirmative defense of limitations must prove conclusively the elements of that defense. Pustejovsky v. Rapid-American Corp., 35 S.W.3d 643, 646 (Tex.2000). See TEX.R. CIV. P. 166a(c). This includes conclusively proving when the cause of action accrued. KPMG Peat Marwick v. Harrison County Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex.1999).

Neither the constitutional provision or the fraudulent lien statut...