Rosedale Partners, Ltd. v. Resolution Trust Corp.

• Decision Date: 25 August 1994
• Docket Number: No. 13-93-211-CV,13-93-211-CV
• Citation: 882 S.W.2d 622
• Parties: ROSEDALE PARTNERS, LTD., as Successor-In-Interest to Victoria Savings Association, et al. v. RESOLUTION TRUST CORPORATION, as Receiver for Victoria Savings Association F.S.A.
• Court: Texas Court of Appeals

Page 622

882 S.W.2d 622

ROSEDALE PARTNERS, LTD., as Successor-In-Interest to

Victoria Savings Association, et al. v. RESOLUTION TRUST CORPORATION, as Receiver for Victoria

Savings Association F.S.A.

No. 13-93-211-CV.

Court of Appeals of Texas,

Corpus Christi.

Aug. 25, 1994.

Rehearing Overruled Sept. 22, 1994.

Richard Jackson, Richard Jackson & Associates, Dallas, for appellant.

C. John Scheef, III, David & Goodman, Dallas, Randall A. Pulman, Brian L. Mims, Stumpf & Falgout, Houston, for appellee.

Before KENNEDY, GILBERTO HINOJOSA and YANEZ, JJ.

OPINION

YANEZ, Justice.

Rosedale Partners and Michael and Patricia Walters appeal the denial of their motions for summary judgment and the granting of summary judgment in favor of the Resolution Trust Corporation whereby the court determined that the RTC's nonjudicial foreclosure on a piece of property was valid. The court also issued a permanent injunction ordering that Rosedale refrain from any interference with the RTC's attempts to sell the property. We affirm the trial court's judgment.

This is a three-party lawsuit in which all parties filed motions for summary judgments and responses to each summary judgment filed against them. Summary judgment is proper if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Tex.R.Civ.P. 166a(c). When both parties move for summary judgment, or, as in the case before us, all parties move for summary judgment, and one motion is granted and the others are denied, the appellate court considers all questions presented to the trial court, including whether the losing party's motion should have been overruled. Jones v. Strauss, 745 S.W.2d 898, 900 (Tex.1988). Each party must carry its own burden as the movant and, in response to the other party's motion, as the nonmovant. James v. Hitchcock Indep. School Dist., 742 S.W.2d 701, 703 (Tex.App.--Houston [1st Dist.] 1987, writ denied). To prevail, each party bears the burden of establishing that it is entitled to judgment as a matter of law. Guynes v. Galveston County, 861 S.W.2d 861, 862 (Tex.1993). When all parties move for summary judgment, this court has the authority to affirm the judgment, or reverse the trial court's judgment and render the judgment that the trial court should have rendered, or reverse and remand. Members Mut. Ins. Co. v. Hermann Hosp., 664 S.W.2d 325, 328 (Tex.1984).

By six points of error, Rosedale complains that the RTC's nonjudicial foreclosure in December 1992 was ineffective and void because there had been an election of remedies in favor of a judicial sale in 1987; therefore, the nonjudicial power of sale in the deed of trust was abandoned or extinguished. Alternatively, Rosedale contends that the public record shows that procedurally the trustee's sale was not conducted in accordance with law and therefore was a nullity. Rosedale also contends that the trial court erred in granting the injunction because as a matter of law there existed no grounds to support the injunction in favor of the RTC. Finally, Rosedale asserts that the trial court erred in denying its motion for summary judgment against the Walters.

By seven points of error, the Walters raise some of the same points as Rosedale in that they contend that the RTC's foreclosure sale was void as a matter of law because there had been an election of remedies in favor of a judicial sale, and thus the nonjudicial power of sale was abandoned or extinguished, and the attempted trustee's sale in December 1992 was a nullity because it was not conducted in accordance with the law. In addition to some of the similar points raised by Rosedale, the Walters contend that the trial court correctly denied Rosedale's summary judgment against the Walters, but that the trial court erred in denying the Walters' motion for continuance to conduct discovery relating to the foreclosure sale of another tract of land before holding this summary judgment hearing.

Factual Background

In April 1986, the Walters executed a promissory note payable to Victoria Savings Association. The note was secured by a deed of trust that gave Victoria Savings a security interest in the property. The deed was properly recorded in the Lavaca County deed records.

The Walters defaulted and Victoria Savings sued on the note. On February 3, 1987, the court signed a summary judgment in favor of Victoria Savings whereby the court ordered a judicial foreclosure, and in addition, declared the rights of Victoria Savings and its trustee to sell the property at a nonjudicial trustee's sale.

Subsequently, Victoria Savings and the Walters executed a forbearance agreement, whereby Victoria Savings agreed to forbear from foreclosing on the property. They then executed a renewal note, followed by another forbearance agreement.

In June 1989, Victoria Savings was declared insolvent, and the FSLIC succeeded to all of Victoria Savings' rights, and as receiver, transferred Victoria Savings' rights to Victoria Savings Association, F.S.A. In August 1989, the RTC was created and was appointed receiver for Victoria, F.S.A. As a result, the RTC became the owner and holder of the deeds of trust, the renewal notes, and the forbearance agreements. The parties executed and recorded a third forbearance agreement whereby the parties agreed that the bank would forebear until July 2, 1992, from exercising its rights to conduct a judicial or nonjudicial foreclosure sale of the property.

In May 1992, the RTC appointed Don Rainosek as substitute trustee. On November 5, 1992, the RTC posted the property for foreclosure. The RTC notified the Walters that the substitute trustee's sale was scheduled for December 1, 1992. The RTC timely filed the notices of sale with the county clerk in accordance with the deed of trust. On December 1, 1992, the substitute trustee's deed on the property executed by Rainosek transferred title to the RTC.

On January 13, 1993, as part of a larger package, the RTC sold, transferred and assigned its remaining rights, if any, under the 1987 judgment to Rosedale. The sale, expressly provided that the RTC "shall retain all right title and interest in and to all items of collateral which, prior to [January 11, 1993] may have been foreclosed upon or otherwise acquired by [the RTC] through enforcement of any Collateral Document or proceeding in lieu of such enforcement."

On or about February 16, 1993, the RTC entered into a contract for sale and purchase of the property with Victor Strynadka. The closing was to occur on March 16, 1993. On February 22, 1993, the Lavaca County clerk, at the request of Rosedale and others, issued a writ of execution on the 1987 judgment. On March 3, 1993, the Lavaca County sheriff issued a notice of sheriff's sale for the property setting the sale for April 6, 1993.

Procedural Background

On April 1, 1993, the RTC filed suit seeking to prohibit Rosedale from interfering with the RTC's attempts to sell the property to Strynadka. The RTC also sued for damages and requested that the trial court declare that 1) the RTC foreclosure was valid 2) the RTC held title to the property in fee simple, and 3) any subordinate liens were extinguished by the foreclosure sale of December 1, 1992. On April 5, 1993, the court entered a temporary restraining order preventing Rosedale from proceeding with the sheriff's sale.

On April 7, 1993, Rosedale counterclaimed against the RTC alleging that the RTC had wrongfully foreclosed on the property and sought a declaratory judgment that Rosedale had the right to have the property sold at a sheriff's sale in satisfaction of the 1987 judgment.

On April 12, 1993, the Walters filed a cross-action against the RTC alleging that the RTC had wrongfully foreclosed on the property and that they owned the property in fee simple. The Walters sought a declaratory judgment that the 1987 judgment had been satisfied and extinguished by a novation. The Walters contended that after the 1987 judgment, they executed a new promissory note with Victoria Savings which operated as a novation and extinguished the judgment. Therefore, there was nothing upon which Rosedale could foreclose.

All three parties filed motions for summary judgment. The RTC subsequently objected to Rosedale's summary judgment evidence. On April 29, 1993, the court granted the RTC's motion for a partial summary judgment and denied Rosedale's and the Walters' motions. Specifically, the trial court 1) sustained RTC's objections to Rosedale's summary judgment evidence and struck its evidence; 2) declared that the RTC validly foreclosed on the property and that the substitute trustee's deed conveyed fee simple title to the RTC; 3) declared that any subordinate judgment liens were extinguished by the substitute trustee's sale; 4) permanently enjoined Rosedale from interfering with the RTC's attempts to sell the property; 5) denied Rosedale's and the Walters' motions for summary judgment; and 6) severed all other matters.

Validity of December 1992 Foreclosure

By point one, Rosedale and the Walters assert that the December 1992 foreclosure was void as a matter of law because the court in 1987 ordered a judicial foreclosure and therefore Victoria Savings had elected its remedy between judicial and nonjudicial foreclosure. Rosedale and the Walters continue the argument in point two by asserting that the trial court in 1987 was without authority to provide alternative methods of conducting a foreclosure. They assert that once the trial court provided for a judicial foreclosure, the private power of sale was abandoned or extinguished. By point three, Rosedale and the Walters continue the argument by asserting that once a judicial foreclosure was sought and granted, the RTC was bound to have the judicial foreclosure conducted by the method provided by statute and by no other method. By point four, Rosedale and the Walters conclude this portion of their arguments by contending that the...