Cockrell v. Republic Mortg. Ins. Co.
| Decision Date | 26 August 1991 |
| Docket Number | No. 05-90-01338-CV,05-90-01338-CV |
| Citation | 817 S.W.2d 106 |
| Parties | John H. COCKRELL, Jr., Appellant, v. REPUBLIC MORTGAGE INSURANCE COMPANY and Secor Bank, Federal Savings Bank, Successor by Merger to Coosa Federal Savings and Loan Association, Appellees. |
| Court | Texas Court of Appeals |
Before STEWART, KINKEADE, and BURNETT, JJ.
John H. Cockrell, Jr., defendant and third-party plaintiff in the court below, appeals a summary judgment entered in favor of the plaintiff Republic Mortgage Insurance Company (RMIC) and the third-party defendant Secor Bank, F.S.B., as the successor by merger to Coosa Federal Savings and Loan Association (Secor). RMIC brought suit against Cockrell for the deficiency on eleven promissory notes assigned to it by Coosa. Cockrell brought a cross-action against Secor as Coosa's successor. In two points of error, Cockrell asserts that the trial court erred in granting RMIC's summary judgment because (1) RMIC's summary judgment evidence was legally insufficient to support RMIC's claim, and a genuine issue of material fact existed as to whether Cockrell was liable to RMIC for an unpaid deficiency balance on a debt owed to Coosa, and (2) RMIC's rights as subrogee were limited to the rights of Secor as Coosa's successor and a genuine issue of material fact existed as to Secor's rights against Cockrell. In three points of error, Cockrell asserts that the trial court erred in granting Secor's summary judgment because (1) Secor's affirmative defense of the D'Oench, Duhme doctrine of equitable estoppel did not bar Cockrell's claims, (2) Secor's defenses of res judicata, collateral estoppel, or law of the case did not bar Cockrell's claims, and (3) Coosa owed a duty to deal fairly and in good faith with Cockrell.
We overrule Cockrell's points of error one and two with regards to the interlocutory summary judgment granted for RMIC. We sustain Cockrell's points of error three and four regarding Secor's affirmative defenses to Cockrell's fraud claim. We overrule the fifth point of error regarding any implied duty of good faith and fair dealing. We affirm the trial court's summary judgment for RMIC. We affirm in part the summary judgment for Secor on Cockrell's claim for the breach of duty of good faith and fair dealing, and reverse in part the summary judgment granted to Secor on Cockrell's fraud claim. We remand this cause to the trial court for further proceedings consistent with this opinion.
In August 1982, Cockrell obtained forty-three mortgage loans from TriTexas, eleven of which form the basis of this suit (the notes). The notes were secured by deeds of trust to the properties. In September 1982, TriTexas assigned the notes and any beneficial interests it had to Coosa, but remained as servicing agent. Cockrell defaulted on the notes. TriTexas made demand on Cockrell and notified him of its intent to foreclose if payment was not made. TriTexas ordered the substitute trustee to foreclose under the deeds of trust. Coosa bought the properties at foreclosure leaving a $110,830.15 deficiency under the notes. TriTexas then filed a claim for the deficiency against its private mortgage insurance policy with RMIC. RMIC alleges that it paid on the policy and took assignment of the notes from Coosa on or about June 23, 1988. Secor and Coosa merged three months later in September in an FSLIC-assisted transaction. RMIC, as the subrogee of Coosa, sued Cockrell for the deficiency. Cockrell entered a general denial. In April 1989, Cockrell filed his amended answer and original cross-action against Secor. It contained a general denial to RMIC's claim against him and a cross-action against Secor claiming fraud and breach of duty of good faith.
Cockrell based his cross-action on an oral agreement between himself and Coosa. Cockrell asserted that he agreed not to file bankruptcy, and in exchange, Coosa, through its president, agreed to bid the note value of the properties at foreclosure so there would be no deficiency. Cockrell alleged this oral agreement as the basis for the fraud and the breach of the duty of good faith and fair dealing claims against Secor. He sued Secor as Coosa's successor.
In October 1989, RMIC amended its original petition to claim the right to the deficiency as the owner and holder in due course of the notes. On the same day, RMIC moved for summary judgment on the same grounds. On November 6, 1989, Cockrell filed his response alleging special exceptions and objections to the evidence. He contended that a fact issue existed as to whether there was any deficiency due under the notes because of the oral agreement. The trial court granted an interlocutory summary judgment to RMIC.
In April 1990, six months after the court granted summary judgment for RMIC, Cockrell filed his answer to RMIC's amended petition. For the first time, he affirmatively pleaded the defense of subrogation against RMIC. Cockrell sought to limit RMIC's rights to Secor's rights, which he contends were limited by fraud and the breach of an implied duty of good faith. Secor answered with a general denial and four affirmative defenses--equitable estoppel under the D'Oench Duhme doctrine, res judicata, collateral estoppel, and the law of the case. Secor then moved for summary judgment. In September 1990, the trial court granted Secor's summary judgment.
Summary judgment may be rendered only if the evidence establishes as a matter of law that there is no genuine issue as to any material fact. Rodriguez v. Naylor Indus., Inc., 763 S.W.2d 411, 413 (Tex.1989). A summary judgment seeks to eliminate patently unmeritorious claims and untenable defenses, not to deny a party its right to a full hearing on the merits of any real issue of fact. Gulbenkian v. Penn, 151 Tex. 412, 416, 252 S.W.2d 929, 931 (1952).
To prevail on the summary judgment, RMIC, as plaintiff-movant, must conclusively prove all of the elements of its cause of action as a matter of law. See Gibbs v. General Motors Corp., 450 S.W.2d 827, 828 (Tex.1970); TEX.R.CIV.P. 166a(c). In deciding whether there is a disputed fact issue precluding summary judgment, evidence favorable to Cockrell will be taken as true, and every reasonable inference indulged in his favor. Nixon v. Mr. Property Mgmt., 690 S.W.2d 546, 548-49 (Tex.1985).
In his first point of error, Cockrell asserts that the trial court erred in granting summary judgment for RMIC. Cockrell argues that RMIC's summary judgment evidence was legally insufficient to support RMIC's claim, and a genuine issue of material fact existed as to whether Cockrell was liable to RMIC for an unpaid deficiency balance on a debt owed to Coosa.
In its motion for summary judgment, RMIC pleaded that it was the owner and holder in due course of the notes by virtue of an assignment from Coosa. RMIC also pleaded that it was subrogated to all rights of TriTexas as servicing agent for Coosa. At the time of the summary judgment hearing, Cockrell had only a general denial on file to RMIC's claims. He neither challenged RMIC's claim to holder in due course status, nor raised any other affirmative defenses. Therefore, in order to recover under the notes, RMIC merely had to establish (1) the notes in question, (2) that Cockrell signed the notes, (3) that RMIC was the legal owner and holder of the notes, and (4) that a certain balance was due and owing under the notes. Clark v. Dedina, 658 S.W.2d 293, 295 (Tex.App.--Houston [1st Dist.] 1983, writ dism'd). RMIC stated that it supported its motion with the affidavits of Terry V. Parrish, RMIC's Vice-President in Charge of Claims for the Western Region of the United States, and Janell Ruiz, an employee of TriTexas, and attached exhibits, including the insurance policy executed between itself and TriTexas. However, RMIC did not submit the Ruiz affidavit. Instead, it submitted the affidavit of Sandra E. King, RMIC's Assistant Claims Manager for the Western Region of the United States.
First, RMIC had to establish the notes in question. RMIC submitted photocopies of the notes attached to the Parrish affidavit, in which Parrish swears that the photocopies are true and correct copies of the notes. This constitutes a sworn copy within the meaning of Texas Rule of Civil Procedure 166a(c) and is proper summary judgment evidence. Life Ins. Co. of Va. v. Gar-dal, Inc., 570 S.W.2d 378, 380 (Tex.1978). RMIC established the notes in question as a matter of law.
Second, RMIC had to establish that Cockrell signed the notes. Cockrell entered a general denial after RMIC's first petition, and did not file another answer to RMIC's amended petition until after the grant of the interlocutory summary judgment. Texas Rule of Civil Procedure 93(7) requires that Cockrell enter a verified pleading to deny the execution of a written instrument. In the absence of such a sworn denial, the court receives the instrument into evidence as fully proven. Bevan v. Zarges, 645 S.W.2d 589, 590-91 (Tex.App.--El Paso 1982), rev'd on other grounds, 652 S.W.2d 368, 369 (1983) (per curiam). In his response to the motion for summary judgment, Cockrell did not deny or attempt to present any evidence that denied his execution of the notes. Since RMIC properly presented sworn copies of the notes and Cockrell did nothing to raise a fact issue on his execution of the notes, RMIC established Cockrell's signature as a matter of law.
Third, RMIC had to establish that it was the owner and holder of the notes. The back of the notes show an assignment of the notes from TriTexas to Coosa, and then from Coosa to RMIC without recourse. Texas Rule of Civil Procedure 93(8) requires Cockrell to submit a verified pleading to deny the genuineness of the endorsements on the notes. Cockrell's general denial did not put this fact...
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