Godoy v. Wells Fargo Bank, N.A.

• Decision Date: 31 October 2017
• Docket Number: NO. 14-16-00599-CV,14-16-00599-CV
• Citation: 542 S.W.3d 50
• Parties: Gerald GODOY, Appellant v. WELLS FARGO BANK, N.A., Appellee
• Court: Texas Court of Appeals

542 S.W.3d 50

Gerald GODOY, Appellant

v.WELLS FARGO BANK, N.A., Appellee

NO. 14-16-00599-CV

Court of Appeals of Texas, Houston (14th Dist.).

Opinions filed October 31, 2017

Rehearing and Rehearing En Banc Denied December 14, 2017

Kathleen Hoekstra Boll, Charles L. Henke Jr., Houston, TX, for appellant.

Sean Michael Reagan, Genevieve Graham, Houston, TX, for appellee.

Panel consists of Chief Justice Frost and Justices Boyce and Brown

William J. Boyce, Justice

AppelleeWells Fargo Bank, N.A. sued appellantGerald Godoy to collect a deficiency on a debt that Godoy guaranteed.Godoy moved for summary judgment on grounds that Wells Fargo’s claims were barred by a two-year statute of limitations applying to deficiency claims; Wells Fargo moved for partial summary judgment on grounds that Godoy contractually waived any limitations defense.The trial court denied Godoy’s motion for summary judgment, granted Wells Fargo’s motion as well as a subsequent motion for summary judgment on the deficiency claim, and signed a final judgment in favor of Wells Fargo.

At issue in this appeal is whether a general waiver of "any and all rights or defenses" that might be available to a guarantor is sufficient to waive application of a shortened statute of limitations applicable to deficiency actions.Because the Texas Supreme Court has determined that such a waiver applies to all defenses under the applicable statute, we affirm.

BACKGROUND

Wachovia Bank loaned $250,000 to GDG Mortgage, Inc. in 2005.The loan was evidenced by a promissory note and secured by a construction deed of trust on certain real property.Godoy guaranteed the promissory note.

GDG defaulted on the note, and Wells Fargo—Wachovia’s successor by merger and holder of the note—foreclosed on the real property securing the note on November 1, 2011.Wells Fargo purchased the real property at the foreclosure sale with a bid that was insufficient to satisfy the outstanding balance on the promissory note, leaving a deficiency.

Wells Fargo sued Godoy to collect the deficiency on June 24, 2015—more than three years after the foreclosure sale.Godoy moved for summary judgment on the sole ground that Wells Fargo’s claim was barred by a shortened two-year statute of limitations applicable to suits to collect deficiencies from guarantors.SeeTex. Prop. Code Ann. § 51.003(a)(Vernon 2014).Wells Fargo moved for partial summary judgment on Godoy’s limitations defense, asserting that Godoy specifically waived his limitations defense in the guaranty agreement.The trial court denied Godoy’s motion for summary judgment and granted Wells Fargo’s motion for partial summary judgment.

Wells Fargo then moved for final summary judgment on its deficiency claim seeking judgment for the outstanding balance as well as attorney’s fees and costs.The trial court granted Wells Fargo’s motion for summary judgment on its deficiency claim against Godoy and signed a final judgment.

STANDARD OF REVIEW

A party moving for summary judgment must conclusively prove all elements of its cause of action or defense as a matter of law.Tex. R. Civ. P. 166a(c);Browning v. Prostok , 165 S.W.3d 336, 344(Tex.2005).When both parties move for summary judgment and the trial court grants one motion but denies the other, we review the evidence produced by each party, determine de novo all questions presented, and render the judgment the trial court should have rendered.Colo. Cty. v. Staff , 510 S.W.3d 435, 444(Tex.2017);Moayedi v. Interstate 35/Chisam Rd., L.P. , 438 S.W.3d 1, 3-4(Tex.2014).A defendant moving for summary judgment on the affirmative defense of limitations has the burden to conclusively establish that defense.Diversicare Gen. Partner, Inc. v. Rubio , 185 S.W.3d 842, 846(Tex.2005).

ANALYSIS

Godoy contends the trial court erred in denying his motion for summary judgment and in granting Wells Fargo’s motions for summary judgment because a statute of limitations defense cannot be waived unless the waiver is specific and for a pre-determined length of time.Godoy contends the general waiver in the guaranty agreement is void as against public policy because it is indefinite and would allow Wells Fargo to bring suit at any time, in perpetuity.

Wells Fargo points to Moayedi , 438 S.W.3d at 6-8, in which the Texas Supreme Court held that all defenses under Property Code section 51.003 may be waived.Wells Fargo contends this holding necessarily includes the two-year statute of limitations found in that section and asserted by Godoy as a bar to suit.

I.Scope of Waiver

Property Code section 51.003 —entitled "Deficiency Judgment"—provides that, if a deficiency remains after a nonjudicial foreclosure sale, any action to recover the deficiency must be brought within two years of the foreclosure sale.SeeTex. Prop. Code Ann. § 51.003(a).A defendant in such an action may be entitled to an offset against the deficiency if the trial court determines that the fair market value of the property sold at foreclosure was greater than the foreclosure sales price.Seeid.§ 51.003(c)(Vernon 2014).

Moayedi addressed whether a party waived the statutory right of offset under section 51.003(c) by agreeing to a general waiver of defenses in a guaranty agreement.SeeMoayedi , 438 S.W.3d at 2.The guaranty agreement in that case included the following general waiver of defenses:

Guarantor further agrees that this Guaranty shall not be discharged, impaired or affected by ... any defense (other than the full payment of the indebtedness hereby guaranteed in accordance with the terms hereof) that the Guarantor may or might have as to Guarantor’s respective undertakings, liabilities and obligations hereunder, each and every such defense being hereby waived by the undersigned Guarantor.

Id. at 3.

The supreme court first examined section 51.003 and determined that "the statute provides an offset that otherwise would not be available.In other words, it provides a defense."Id. at 6.The court then determined that "Moayedi could waive section 51.003" so long as the waiver was clear and specific.Seeid.

Rejecting Moayedi’s argument that the general waiver in the guaranty agreement was not clear and specific, the court determined that a party’s waiver of "any,""each," and "every" defense in a guaranty agreement "results in a broad waiver of all possible defenses."Seeid. at 8.The court stated:

Just because the waiver is all encompassing does not mean that it is unclear or vague.To waive all possible defenses seems to very clearly indicate what defenses are included: all of them.

Id.Moayedi concluded that the guaranty’s broad defense waiver "indicate[d] an intent that the guaranty would not be subject to any defense other than full payment."Id.

At issue here is whether, in light of Moayedi , Godoy waived the shortened two-year statute of limitations for deficiency actions contained within section 51.003(a).

The guaranty agreement at issue here provided in relevant part:

GUARANTOR'S WAIVERS. ...

... Guarantor also waives any and all rights or defenses arising by reason of (A) any "one action" or "anti-deficiency" law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender’s commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; ... (E) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced, there is outstanding indebtedness of Borrower to Lender which is not barred by any applicable statute of limitations; or (F) any defenses given to guarantors at law or in equity other than actual payment and performance of the indebtedness....

...

GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS.Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor’s full knowledge of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to public policy or law.If any such waiver is determined to be contrary to any applicable law or public policy, such waiver shall be effective only to the extent permitted by law or public policy.

Wells Fargo contends that a party’s broad waiver of all defenses in a guaranty agreement necessarily includes a defense based on any statute of limitations.It contends that, at the very least, the waivers at issue here are sufficient under Moayedi to waive the two-year statute of limitations contained in section 51.003(a).Seeid. at 6-8.

We need not decide the correctness of Wells Fargo’s general assertion that a party may waive any statute of limitations via the language contained in the guaranty agreement.We focus instead on the narrower and dispositive issue presented by this case and agree that the waiver at issue was sufficient to waive the shortened two-year statute of limitations contained in section 51.003(a).

Moayedi explicitly held that guaranty agreement language waiving "any,""each," or "every" defense "results in a broad waiver of all possible defenses " under section 51.003.SeeMoayedi , 438 S.W.3d at 8(emphasis added).Since Moayedi was decided, the supreme court has referred to the right of offset under section 51.003 as "an affirmative defense to a deficiency claim."SeePlainsCapital Bank v. Martin , 459 S.W.3d 550, 557(Tex.2015).

A statute of limitations also is an affirmative defense that a party may plead.See, e.g. , Epps v. Fowler , 351 S.W.3d 862, 869 n.8(Tex.2011)("Limitations is an affirmative defense that must be pleaded and proven.");KPMG Peat Marwick v. Harrison Cty. Hous. Fin. Corp. , 988 S.W.2d 746, 748(Tex.1999)("A defendant moving for summary judgment on the affirmative defense of limitations has the burden to conclusively establish that defense.").We see no reason to interpret the supreme court’s holding that "all possible defenses" may be waived under section 51.003 to mean that a party may...