DTND Sierra Investment, LLC v. HSBC Bank USA, National Association, as Successor Trustee to Wells Fargo Bank, N.A., as Trustee for Bear Stearns Mortgage Funding Trust 2006-AC1, Asset-Backed Certificates, Series 2006-AC1 ( 2016 )

Fourth Court of Appeals
San Antonio, Texas
MEMORANDUM OPINION
No. 04-15-00657-CV
DTND SIERRA INVESTMENT, LLC,
Appellant
v.
HSBC BANK USA, NATIONAL ASSOCIATION,
as Successor Trustee to Wells Fargo Bank, N.A.,
as Trustee for Bear Stearns Mortgage Funding Trust 2006-AC1,
Asset-Backed Certificates, Series 2006-AC1,
Appellee
From the 285th Judicial District Court, Bexar County, Texas
Trial Court No. 2015-CI-00165
Honorable Richard Price, Judge Presiding
Opinion by: Rebeca C. Martinez, Justice
Sitting: Karen Angelini, Justice
Rebeca C. Martinez, Justice
Patricia O. Alvarez, Justice
Delivered and Filed: June 15, 2016
AFFIRMED
DTND Sierra Investment, LLC appeals a summary judgment entered against it in the
underlying cause. The summary judgment declared DTND’s lien on certain real property to be
subordinate to a lien held by appellee, HSBC Bank USA, National Association, as Successor
Trustee to Wells Fargo Bank, N.A., as Trustee for Bear Stearns Mortgage Funding Trust 2006-
AC1, Asset-Backed Certificates, Series 2006-AC1, and will be extinguished upon foreclosure of
HSBC’s lien. DTND contends the trial court erred in granting the summary judgment because:
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(1) HSBC’s claims were barred by res judicata and collateral estoppel; and (2) HSBC’s declaratory
relief claim in its motion for summary judgment was not supported by its petition. DTND also
contends HSBC did not allege a claim involving a justiciable controversy. We affirm the trial
court’s judgment.
BACKGROUND
In 2006, Wayne Crews entered into a loan to purchase a home by executing a note and
deed of trust. The note and deed of trust were subsequently assigned to HSBC.
Crews’s home was subject to the Declarations of Covenants, Conditions and Restrictions
of the Shaenfield Association, Inc. Homeowners Association. The HOA Declarations subordinate
any HOA assessment lien to “any vendor’s lien or deed of trust lien now of record or which may
hereafter be placed of record against any lot covered hereby and/or improvements located
thereon.” In 2011, Crews defaulted in paying his HOA assessments, and the HOA conducted a
foreclosure sale at which the HOA purchased the property. The Trustee’s Deed Following
Foreclosure granted Crews’s property to the HOA “subject to each and every superior lien and
encumbrance.” The HOA subsequently deeded the property to DTND.
In 2015, HSBC filed the underlying lawsuit against Crews and DTND, alleging Crews was
in default under the note and deed of trust. The petition also alleged DTND claimed to hold an
interest in the property. The petition sought to judicially foreclose HSBC’s lien on the property
and to divest the defendants of any right, title and interest in the property after the foreclosure.
HSBC subsequently filed a motion for a default judgment against Crews and a motion for
summary judgment against DTND. In its summary judgment motion, HSBC requested a
declaratory judgment “that DTND’s lien is junior to that of HSBC and will [be] extinguished by
foreclosure of HSBC’s senior lien.” HSBC attached a series of documents to its motion as
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evidence that its lien was senior, including the Declarations, the Trustee’s Deed Following
Foreclosure, and the Special Warranty Deed from the HOA to DTND.
DTND filed a response to the motion for summary judgment, asserting HSBC’s claim
against it was barred by res judicata and collateral estoppel. DTND attached to its response an
order issued by a federal court in a lawsuit filed by DTND against HSBC seeking to enjoin a non-
judicial foreclosure sale noticed by HSBC. In the lawsuit, DTND alleged it should have been
given the opportunity to cure the default on the loan before HSBC scheduled a foreclosure sale.
After the lawsuit was removed to federal court, HSBC filed a motion to dismiss and a motion for
sanctions. After finding DTND’s claims to be meritless, the federal court granted HSBC’s motion
to dismiss and awarded HSBC sanctions. DTND relied on this prior order as the basis for its
assertion of res judicata and collateral estoppel.
After a hearing, the trial court entered an order granting the default and summary judgment.
As previously noted, the trial court’s judgment declared DTND’s lien to be subordinate to HSBC’s
lien and that DTND’s lien would be extinguished upon the foreclosure of HSBC’s lien. DTND
appeals.
JUSTICIABLE CONTROVERSY
DTND contends the trial court and this court lack subject matter jurisdiction because
HSBC’s claims do not present a justiciable controversy. We disagree.
If a party lacks standing, a court does not have subject matter jurisdiction to hear a case.
City of San Antonio v. Rogers Shavano Ranch, Ltd., 383 S.W.3d 234, 242 (Tex. App.—San
Antonio 2012, pet. denied). “A determination of standing focuses on whether a party has a
‘justiciable interest’ in the outcome of the lawsuit.” Id. “[F]or a controversy to be justiciable,
there must be a real controversy between the parties that will be actually resolved by the judicial
relief sought.” State Bar of Tex. v. Gomez, 891 S.W.2d 243, 245 (Tex. 1994). “As a component
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of subject matter jurisdiction, standing is a question of law reviewed de novo.” City of San
Antonio, 383 S.W.3d at 242.
Rule 309 of the Texas Rules of Civil Procedure expressly permits a mortgagee to request
a judicial foreclosure. TEX. R. CIV. P. 309. Furthermore, any person whose rights or status is
affected by a deed or contract may file a declaratory judgment claim to have determined any
question of construction arising under the deed or contract and obtain a declaration of the person’s
rights or status. TEX. CIV. PRAC. & REM. CODE ANN. § 37.004(a) (West 2015). In this case, HSBC
sought a judicial foreclosure and a declaration regarding its superior lien under the terms of the
HOA Declarations. Both claims constituted real controversies regarding HSBC’s right to foreclose
and the superiority of its lien that would be resolved by the judicial relief sought.
DTND argues the superiority of HSBC’s lien was resolved in a prior lawsuit; therefore, no
real controversy exists regarding HSBC’s lien status. In support of this argument, DTND refers
to two federal court orders. One of those orders, however, is not contained in the appellate record
but is only included in an appendix to DTND’s brief. This court must decide a case based on the
appellate record as filed and cannot consider documents attached as exhibits or appendices to
briefs. Myer v. Cuevas, 119 S.W.3d 830, 836 (Tex. App.—San Antonio 2003, no pet.) (quoting
Mitchison v. Houston Indep. Sch. Dist., 803 S.W.2d 769, 771 (Tex. App.—Houston [14th Dist.]
1991, writ denied)). The only federal court order contained in the appellate record dismisses
claims DTND asserted against HSBC under the Texas Deceptive Trade Practices – Consumer
Protection Act and the Texas Debt Collection Act in a separate lawsuit. That court order does not,
however, address the HOA Declarations or the superiority of HSBC’s lien.
RES JUDICATA/COLLATERAL ESTOPPEL
In its first issue, DTND contends HSBC’s claim is barred by the doctrines of res judicata
and collateral estoppel. DTND again refers to the two federal court orders as the basis for its
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contention. As previously noted, this court can only address the federal court order contained in
our appellate record. Myer, 119 S.W.3d at 836.
“The doctrine of res judicata, or claim preclusion, bars a second action by parties and their
privies on matters actually litigated in a previous suit, as well as claims which, through the exercise
of diligence, could have been litigated in a prior suit.” Hallco Tex., Inc. v. McMullen Cty., 221
S.W.3d 50, 58 (Tex. 2006) (internal citations omitted). “We apply the transactional approach to
res judicata.” Id. “This approach mandates that a defendant bring as a counterclaim any claim
arising out of the transaction or occurrence that is the subject matter of the opposing party’s suit.”
State & Cty. Mut. Fire Ins. Co. v. Miller, 52 S.W.3d 693, 696 (Tex. 2001).
“[T]he doctrine of collateral estoppel bars relitigation of fact issues that were fully and
fairly litigated and that were essential to the prior judgment.” Id. “The issue decided in the prior
action must be identical to the issue in the pending action.” Id.
We hold that neither of the doctrines applies in the instant case. Res judicata is inapplicable
because the transaction or occurrence that was the subject matter of the prior federal lawsuit was
a non-judicial foreclosure, while the underlying lawsuit relates to a judicial foreclosure. Moreover,
the federal court’s order only addressed the fact that DTND was not entitled to notice of an
opportunity to cure Crews’s default. The order did not decide any issue regarding lien superiority.
Accordingly, DTND’s first issue is overruled.
PETITION V. MOTION FOR SUMMARY JUDGMENT
DTND finally asserts the trial court erred in granting declaratory relief in favor of HSBC
because HSBC’s petition did not allege a declaratory judgment claim against DTND. In its brief,
however, DTND concedes “[t]he Appellee’s Motion for Summary Judgment sought declaratory
relief and asked the Court to render a judgment against Appellant holding that Appellant’s lien
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was junior to the Appellee’s lien and that the Appellant’s lien would be extinguished by foreclosure
of the superior interest.”
If a summary judgment motion moves for relief on an unpled claim, “the claim is deemed
to have been tried by consent in the absence of an objection by [the non-movant] to the lack of a
supporting pleading.” Banner Sign & Barricade, Inc. v. Price Const., Inc., 94 S.W.3d 692, 695
(Tex. App.—San Antonio 2002, pet. denied) (citing Roark v. Stallworth Oil & Gas, Inc., 813
S.W.2d 492, 494-95 (Tex. 1991)). In this case, DTND never objected to the absence of a
supporting pleading. Accordingly, the declaratory judgment claim was tried by consent.
CONCLUSION
The trial court’s judgment is affirmed.
Rebeca C. Martinez, Justice
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