Green Tree Servicing, LLC v. Woods

• Decision Date: 09 August 2012
• Docket Number: No. 01–11–00670–CV.,01–11–00670–CV.
• Citation: 388 S.W.3d 785
• Parties: GREEN TREE SERVICING, LLC f/k/a Conseco Finance Servicing Corp., Appellant v. Ralph D. WOODS and Karen Woods, Appellees.
• Court: Texas Court of Appeals

388 S.W.3d 785

GREEN TREE SERVICING, LLC f/k/a Conseco Finance Servicing Corp., Appellant

v.Ralph D. WOODS and Karen Woods, Appellees.

No. 01–11–00670–CV.

Court of Appeals of Texas,

Houston (1st Dist.).

Aug. 9, 2012.

Richard Allen McKinney, for Green Tree Servicing, LLC f/k/a Conseco Finance Servicing Corp.

Robert Hohenberger, for Ralph D. Woods and Karen Woods.

Panel consists of Chief Justice RADACK and Justices HIGLEY and BROWN.

OPINION

LAURA CARTER HIGLEY, Justice.

Appellant, Green Tree Servicing, LLC f/k/a Conseco Finance Servicing Corp., appeals from the trial court's grant of appellees', Ralph D. Woods and Karen Woods, no evidence motion for summary judgment on standing, capacity, and chain of title. In five issues, Green Tree argues the trial court erred in granting the no-evidence motion for summary judgment because (1) standing cannot be challenged in a no-evidence motion for summary judgment; (2) there was some evidence that Green Tree had standing to sue; (3) there was some evidence that Green Tree had capacityto sue; and (4) there was some evidence of the chain of title.

We reverse and remand.

Background

On August 29, 2000, Ralph Woods executed a Manufactured Home Retail Installment Contract with Palm Harbor Homes I LP. The same contract assigned Palm Harbor Homes' interest in the contract to Green Tree. Some time later—though the evidence does not indicate when—Green Tree assigned its interest in the Woods contract to Conseco Finance Corp. (“Conseco Finance”). What assignments took place after that is a subject of dispute in this appeal.

There is evidence that, at some unidentified time, Conseco Finance Corp., Post Consummation Estate (“Conseco Finance PCE”) assigned its interest in the contract to U.S. Bank National Association, as trustee for Manufactured Housing Contract Senior/Subordinate Pass–Through Certificate Trust 2000–5 (“U.S. Bank National”). In that document, Conseco Finance PCE identifies itself as “successor in interest to Conseco Finance Corp.”

The record shows that, on October 1, 2000, Conseco Finance Securitizations Corp. (“Conseco Finance Securitizations”), Conseco Finance, and U.S. Bank National entered into a pooling agreement for servicing of certain contracts, including the Woods contract. There is no evidence in the record of who claimed to own the interest in the Woods contract as of October 1, 2000. The contract identified Conseco Finance as the servicer for the contract, giving it “the sole obligation to manage, administer, service[,] and make collections on the Contracts.”

On June 23, 2003, the service pooling agreement was amended. The contract involved the same parties except that Green Tree MH LLC was identified as the “Successor Servicer,” giving it “the sole obligation to manage, administer, service[,] and make collections on the Contracts.” As a part of its duties, Green Tree MH LLC was authorized to “sue to enforce or collect upon Contracts, in its own name.” By filing suit on a contract, the act of filing suit would “be deemed to be an automatic assignment of the Contract to [Green Tree MH LLC] for purposes of collection only.”

Concurrent with the execution of the amended service pooling agreement, Green Tree MH LLC entered into a “subservicing agreement” with Green Tree. The subservicing agreement authorized Green Tree “to manage, administer, service [,] and make collections on each [contract covered by the amended service pooling agreement], and shall perform or cause to be performed all contractual and customary servicing activities of the holder of such” contract covered by the amended service pooling agreement.

On September 2, 2010, Green Tree sent a notice to Ralph Woods, asserting that he was in default on his obligations under the Woods contract and giving him an opportunity to cure. Green Tree asserted that failure to cure the default would result in acceleration of the payments owed under the contract and a suit to repossess or foreclose on the collateral. Green Tree subsequently filed suit against Ralph and Karen Woods on November 12, 2010, seeking to collect the amount owed under the contract and to obtain possession of the home.

The Woods filed a verified answer, asserting, among other things, that Green Tree is not entitled to recover in the capacity in which it sues. On March 9, 2011, the Woods filed a no-evidence motion for summary judgment, claiming Green Tree could not establish that (1) it had standing to sue them, (2) that it had the capacity to sue them, and (3) there was a proper chain of title from the original seller to Green Tree.

Green Tree filed its response, attaching evidence that it asserted established its standing, capacity, and chain of title. The Woods did not include any evidence in its reply. Instead, they identified what they believed to be gaps in Green Tree's proof of standing, capacity, and chain of title. The trial court agreed and granted the Woods' no-evidence motion for summary judgment without identifying the grounds on which it was granting summary judgment.

Green Tree filed a motion for new trial, arguing that a plea to the jurisdiction was the proper vehicle to bring a claim challenging standing and that the proper resolution of a plea to the jurisdiction was dismissal without prejudice. Green Tree also argued that, viewing the evidence in the light most favorable to the nonmovant, summary judgment was inappropriate. The trial court denied Green Tree's motion for new trial.

Standard of Review

Because summary judgment is a question of law, we review a trial court's summary judgment decision de novo. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex.2009).

After an adequate time for discovery, a party may move for no-evidence summary judgment on the ground that no evidence exists of one or more essential elements of a claim on which the adverse party bears the burden of proof at trial. Tex.R. Civ. P. 166a(i); Flameout Design & Fabrication, Inc. v. Pennzoil Caspian Corp., 994 S.W.2d 830, 834 (Tex.App.-Houston [1st Dist.] 1999, no pet.). The burden then shifts to the nonmovant to produce evidence raising a genuine issue of material fact on the elements specified in the motion. Tex.R. Civ. P. 166a(i); Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex.2006). The trial court must grant the motion unless the nonmovant presents more than a scintilla of evidence raising a fact issue on the challenged elements. Flameout Design, 994 S.W.2d at 834;see also Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex.1997) (holding “[m]ore than a scintilla of evidence exists when the evidence supporting the finding, as a whole, rises to a level that would enable reasonable and fair-minded people to differ in their conclusions”).

To determine if there is a fact issue, we review the evidence in the light most favorable to the nonmovant, crediting favorable evidence if reasonable jurors could do so, and disregarding contrary evidence unless reasonable jurors could not. See Fielding, 289 S.W.3d at 848 (citing City of Keller, 168 S.W.3d at 827). We indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex.2002). When the trial court's summary judgment order does not state the basis for the trial court's decision, we must uphold the order if any of the theories advanced in the motion are meritorious. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 216 (Tex.2003).

Capacity

In its third issue, Green Tree argues the trial court could not have granted summary judgment on the Woods' defense that Green Tree lacked the capacity to sue them. Before determining what evidence is relevant to establishing capacity, it is useful to note the distinction between standing and capacity.

“A plaintiff has standing when it is personally aggrieved, regardless of whether it is acting with legal authority; a party has capacity when it has the legal authority to act, regardless of whether it has a justiciable interest in the controversy.” Nootsie, Ltd. v. Williamson Cnty. Appraisal Dist., 925 S.W.2d 659, 661 (Tex.1996). Capacity concerns whether a party has a personal right to come into court, not whether it has an enforceable right or interest. Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845, 849 (Tex.2005) (citing 6A Wright, Miller, & Kane, Federal Practice and Procedure: Civil 2D § 1559, at 441).

The service pooling agreement, its amendment, and the subservicing agreement together present more than a scintilla of evidence that Green Tree has the capacity to bring this lawsuit. The subservicing agreement makes Green Tree the servicer for the contracts part of the service pooling agreement. The original service pooling agreement identifies the Woods contract as a part of the service pooling agreement. The subservicing agreement gives Green Tree all of the authority for servicing that was given to Green Tree MH LLC under the amended service pooling agreement. The amended service pooling agreement gives the servicer the right to sue to collect and enforce the Woods contract. We hold this is sufficient to establish capacity. See id. at 851 & n. 3 (holding whether a party has the right to sue on behalf of another is a question of capacity).

Whether Green Tree presented sufficient evidence of a chain of title from the original seller in the Woods contract to one of the parties to the service pooling agreement—or whether the evidence establishes that the Woods contract remained a part of the service pooling agreement—relates not to capacity, but to standing. See Interstate Contracting Corp. v. City of Dallas, 135 S.W.3d 605, 618 (Tex.2004) (holding privity of contract is matter of standing).

Accordingly, we hold that the Woods' claim of Green Tree's lack of capacity could not have been a basis to support the trial court's grant of no-evidence summary judgment. We sustain Green Tree's third issue.

Standing

In its first...