Roper v. CitiMortgage, Inc.

• Decision Date: 27 November 2013
• Docket Number: NO. 03-11-00887-CV,03-11-00887-CV
• Parties: William Alexander Roper, Jr., Appellant v. CitiMortgage, Inc., Appellee
• Court: Texas Court of Appeals

William Alexander Roper, Jr., Appellant v. CitiMortgage, Inc., Appellee

NO. 03-11-00887-CV

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

Filed: November 27, 2013

FROM THE COUNTY COURT AT LAW NO. 2 OF COMAL COUNTY

NO. 2005PC0102, HONORABLE CHARLES A. STEPHENS II, JUDGE PRESIDING

MEMORANDUM OPINION

This appeal arises out of probate proceedings related to the estate of Michael C. Roper. Michael's brother, William A. Roper, Jr., is a potential heir to Michael's estate.¹ When the appellee, CitiMortgage, Inc., sought to enforce its security interest on a certain piece of real property (the Property) that is part of Michael's estate and to sell the Property, Roper intervened and opposed CitiMortgage's claim against the estate. On cross-motions for summary judgment, the trial court granted CitiMortgage's traditional motion for summary judgment and denied Roper's no-evidence motion for summary judgment on CitiMortgage's claim. The trial court determined that CitiMortgage held a secured claim against Michael's estate and was entitled to judgment against the estate under the Probate Code. The trial court authorized CitiMortgage to sell the Property at public auction tothe highest bidder. As part of its order, the trial court also denied Roper's objection to an affidavit submitted by CitiMortgage with its summary-judgment motion.

The dispute at the heart of this appeal is whether CitiMortgage has shown as a matter of law that it has a valid lien against the Property and is thus entitled to foreclose its security interest as provided in the deed of trust and to sell the Property. Roper has not produced evidence refuting CitiMortgage's evidence that payments were not made on the outstanding loan as required by the note and deed of trust after May 1, 2005, or that the loan secured by the deed of trust and the vendor's lien went into default. Instead, in eleven appellate issues, he challenges CitiMortgage's right to bring its claim, the admissibility of its summary-judgment evidence, and the timeliness of service of its summary-judgment motion and evidence. Roper also contends that he established several affirmative defenses against CitiMortgage's claim.

Because we find that CitiMortgage established its claim as a matter of law, we will affirm the trial court's judgment.

BACKGROUND

To purchase the Property located at 2655 Candlelight, Canyon Lake, Texas 78133, Michael Roper obtained a $67,200 loan from Milestone Mortgage Corporation.² Michael purchased the Property from Michael and Roper's father, William A. Roper (Roper Sr.), and Roper Sr.'s wife,Patricia Roper, on October 3, 2002. On that date, Roper Sr. and Patricia Roper executed a warranty deed with vendor's lien conveying the Property to Michael for consideration that included Michael's execution of a promissory note. Also on that date, Michael executed the promissory note for the original principal amount of $67,200 and the accompanying security instrument. The promissory note identifies Milestone Mortgage Corporation as the Lender—the holder of the note and the entity entitled to receive monthly payments in the amount of $402.90. The note states, "I [Michael Roper, the Borrower] understand that the Lender may transfer this Note. The Lender or anyone who takes this Note by transfer and who is entitled to receive payments under this Note is called the 'Note Holder.'"

The security instrument, a deed of trust, secures repayment of the debt evidenced in the note and was recorded in the Official Records of Comal County. In the deed of trust, Michael granted and conveyed the Property to the trustee (Milestone's president) to hold in trust with power of sale. The deed of trust names Mortgage Electronic Registration Systems, Inc. (MERS) as the beneficiary under the security instrument, stating that "MERS is a separate corporation that is acting solely as a nominee for Lender and Lender's successors and assigns." The deed of trust further states:

Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender's successors and assigns) has the right: to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property; and to take any action required of Lender including, but not limited to, releasing and canceling this Security Instrument.

The note's signature page bears an indorsement signed by Milestone's president (the trustee) stating: "Pay without recourse to the order of Principal Residential Mortgage, Inc." This indorsement transferred Milestone's rights as a holder of the note to Principal Residential. See Tex. Bus. & Com. Code § 1.201 (holder is person in possession of negotiable instrument that is payable either to bearer or to identified person that is the person in possession). The note also bears a blank indorsement signed by Principal Residential's executive vice president and chief operating officer stating: "Pay to the order of _ without recourse." See id. § 3.205 (instrument indorsed in blank is payable to bearer and may be negotiated by transfer of possession alone). It is a matter of public record that Principal Residential was succeeded in interest by CitiMortgage through a merger that was effective as of January 1, 2005.³

Michael Roper died on March 16, 2005. After May 1, 2005, payments were no longer made as required by the note and deed of trust. Accordingly, the loan secured by the deed of trustand by the vendor's lien, which was expressly reserved in the deed of trust and the warranty deed conveying the Property from Roper Sr. and Patricia Roper to Michael Roper, went into default. On October 6, 2006, MERS, "as Nominee, as nominee for Lender and Lender[']s Successors and Assigns ('Mortgagee')," presented the Mortgagee's claim against the estate to the estate administrator and the trial-court clerk. See Tex. Prob. Code §§ 306 (establishing procedure for handling secured claim for money against estate), 308 (establishing that depositing claim with clerk begins 30-day time period after which claim is presumed to be rejected if not acted on by estate's representative). As required by Section 306 of the Texas Probate Code, MERS specified that the Mortgagee sought "to have the claim allowed, approved, and fixed as a preferred debt and lien against the specific property securing the indebtedness and paid according to the terms of the contract which secured the lien . . . ." Id. § 306(a)(2). The estate administrator took no action to either allow or reject the Mortgagee's claim within 30 days after the claim was presented, and therefore, the claim was deemed rejected by operation of law. See id. §§ 309 (estate representative shall allow or reject claim within 30 days of presentment), 310 (estate representative's failure to timely allow or reject claim under Section 309 constitutes rejection of claim).

On November 15, 2006, CitiMortgage filed its original petition in the probate proceeding, seeking to first establish and obtain judgment for its Section 306 claim against the estate, see id. § 313 (suit on rejected claim must be filed within 90 days of claim rejection), and then to obtain an order authorizing a public sale of the Property, see id. §§ 338 (sale of mortgaged property), 341 (application for sale of real estate), 346 (order of sale), 349 (public sales of real estate); Tex. Prop. Code § 51.002 (sale of real property under contract lien). CitiMortgage filed itsoriginal petition "as Mortgage Servicing Agent for [MERS], as Nominee for Lender, its successors and assigns." In this petition, CitiMortgage asserted that it "now held" the deed of trust and the vendor's lien secured by the deed of trust and that it is the beneficiary of the deed of trust. CitiMortgage later filed an amended petition to clarify that it is the current holder of the note and deed of trust (i.e., a successor or assign of the Lender), in addition to being a mortgage servicing agent and servicing the note. In the amended petition, CitiMortgage asserted that it had been the holder of the note and deed of trust at all times relevant to the proceedings. CitiMortgage also asserted that the unpaid principal balance of Michael Roper's indebtedness as of June 30, 2006 was at least $72,553, plus all earned interest, fees, and expenses, which were accruing under the terms of the loan documents.

Roper filed a contest to the claim and counterclaims against the estate administrator, "the unnamed 'mortgagee,'" MERS, and MERS's law firm. Several years of litigation followed. A few events are relevant to this appeal. On June 28, 2007, the trial court accepted the original estate administrator's resignation. On July 25, 2007, the trial court appointed Roper Sr. and Roper's sister, Kimberly Roper Flannery, as co-dependent administrators. On June 1, 2010, the trial court accepted the resignation of Kimberly Roper Flannery as co-administrator.

In September 2011, CitiMortgage filed its Second Motion for Summary Judgment. Two days later, Roper filed both an intervention and original answer to CitiMortgage's amended petition and a no-evidence summary-judgment motion. Between September 22, 2011 and September 27, 2011, Roper also filed two separate objections to the affidavit and attached documents that CitiMortgage submitted with its summary-judgment motion, an opposition toCitiMortgage's summary-judgment motion with an attached affidavit and documents, a motion for continuance, and a document entitled "Objections to Hearing, CitiMortgage Second SJ Motion and Nixon Affidavit." On September 27, 2011, CitiMortgage filed a motion for continuance on Roper's no-evidence summary-judgment motion. On September 29, 2011, at a hearing on CitiMortgage's motion to retain and its summary-judgment motion, the trial court determined that it would not hear oral argument on the summary-judgment motions and instead would...