in Re Albert Ortiz ( 2015 )

ACCEPTED
14-14-00979-CV
FOURTEENTH COURT OF APPEALS
HOUSTON, TEXAS
1/6/2015 6:21:20 PM
CHRISTOPHER PRINE
CLERK
NO. 14-14-00979-CV
__________________________________________________________________
FILED IN
14th COURT OF APPEALS
IN THE COURT OF APPEALS HOUSTON, TEXAS
FOR THE FOURTEENTH DISTRICT OF TEXAS 1/6/2015 6:21:20 PM
AT HOUSTON CHRISTOPHER A. PRINE
Clerk
__________________________________________________________________
In Re ALBERT ORTIZ
______________________________________
Original Proceeding From the
Harris County District Court,
164th Judicial District
______________________________________
RESPONSE TO PETITION FOR WRIT OF MANDAMUS
______________________________________
JOEL W. MOHRMAN
State Bar No. 14253500
STEPHANIE LAIRD TOLSON
State Bar No. 11795430
1001 McKinney, Suite 1500
Houston, Texas 77002
Telephone: (713) 520-1900
Facsimile: (713) 520-1025
ATTORNEYS FOR RESPONDENTS
490948.3; 102869.0019
TABLE OF CONTENTS
INDEX OF AUTHORITIES..................................................................................... ii
STATEMENT OF THE CASE ..................................................................................1
STATEMENT OF FACTS ........................................................................................5
A. The Mandate of the Court of Appeals ...................................................5
1. Portions of Judgment Reversed by Court of Appeals .................5
2. Portions of Judgment Affirmed by the Court of Appeals ...........6
3. Limited Remand Order ...............................................................7
B. The Summary Judgment and the Court of Appeals’ Opinion...............8
C. Ortiz’s New Claims ...............................................................................9
ARGUMENT ...........................................................................................................10
A. Introduction .........................................................................................10
B. Ortiz Attempts to Mislead The Court of Appeals as to His
“New Claims”......................................................................................11
C. Court of Appeals Issued a Limited Remand .......................................13
D. Law of the Case Also Bars the “New Claims” ...................................21
CONCLUSION AND PRAYER .............................................................................24
CERTIFICATE OF SERVICE ................................................................................25
CERTIFICATE OF COMPLIANCE .......................................................................25
RECORD INDEX ....................................................................................................26
490948.1; 102869.0019 i
INDEX OF AUTHORITIES
Page(s)
Cases
Allied Finance Co. v. Shaw,
373 S.W.2d 100 (Tex.Civ.App.—Ft. Worth 1963, writ ref’d n.r.e.).................. 22
Baptist Memorial Hosp. System v. Smith,
822 S.W.2d 67 (Tex. App. –San Antonio 1991, writ denied) ............................ 22
Barrows v. Ezer,
624 S.W.2d 613 (Tex.Civ.App.—Houston [14th Dist.] 1981, no
writ) ..................................................................................................................... 22
Bonilla v. Roberson,
918 S.W.2d 17 (Tex.App.—Corpus Christi 1996, no writ) ............................... 12
Briscoe v. Goodmark Corp.,
102 S.W.3d 714 (Tex. 2003) .............................................................................. 21
Cessna Aircraft Co. v. Aircraft Network,
LLC, 345 S.W.3d 139 (Tex.App.—Dallas 2011, no pet.) ..........13, 19, 20, 22, 23
Denton County v. Tarrant County,
139 S.W.3d 22, 23 (Tex.App.—Fort Worth 2004, pet. denied) ......................... 13
In re Henry,
388 S.W.3d 719 (Tex. App.—Houston [1st Dist.] 2012, no pet.) ..................... 22
Hudson v. Wakefield,
711 S.W.2d 628 (Tex. 1986) ......................................................13, 15, 16, 18, 22
Hurd Enterprises, Ltd. v. Bruni,
828 S.W.2d 101 (Tex. App.- San Antonio 1992, writ denied) .......................... 22
Jim Walter Homes Inc. v. Reed,
711 S.W.2d 617 (Tex. 1986) .............................................................................. 11
Kahn v. Seely,
37 S.W.3d 86 (Tex.App.—San Antonio 2000, no pet.) .................................... 22
490948.1; 102869.0019 ii
Leake v. Half Price Books,
918 S.W.2d 559 (Tex.App.—Dallas 1996, no writ) ........................................... 21
In re Lesikar,
285 S.W.3d 577 (Tex.App.—Hous. [14th Dist.] 2009, no writ) ........................ 21
Lifshutz v. Lifshutz,
199 S.W.3d 9 (Tex. App.—San Antonio 2006, pet. denied) ........................22, 23
Mart. v. Credit Protection Assoc., Inc.,
824 S.W.2d 254 (Tex.App.—Dallas 1992, writ dism’d w.o.j.)....................20, 23
National City Bank of Indiana v. Ortiz,
401 S.W.3d 867 (Tex.App.—Houston [14th Dist.] 2013, pet.
denied).......................................................................................................1, 5, 8, 9
Price v. Gulf Atlantic Ins. Co.,
621 S.W.2d 185 (Tex. Civ. App.-Texarkana, 1981) ............................................ 7
Reynolds v. Murphy,
266 S.W.3d 141 (Tex. App.—Fort Worth 2008, pet. denied). .....................16, 17
Simulis, LLC v. General Electric Capital Corp.,
392 S.W.3d 729, 736 (Tex. App.—Houston [14th Dist.] 2011,
pet denied)...........................................................................................3, 17, 18, 19
Southwestern Bell Telephone Co. v. DeLanney,
809 S.W.2d 493 (Tex. 1991) .............................................................................. 11
In re Team Rocket, L.P.,
256 S.W.3d 257 (Tex. 2008) .............................................................................. 21
Thomas v. Allstate Ins. Co.,
2006 WL 2290840 (Tex.App.-Houston [14th Dist.] Aug. 10, 2006,
no pet.) ................................................................................................................ 19
University of Texas System v. Harry,
948 S.W.2d 481 (Tex.App.—El Paso 1997, no pet.) ......................................... 13
Wall v. Wall,
143 Tex. 418 (1945)............................................................................................ 13
490948.1; 102869.0019 iii
Statutes
TEX. BUX. & COM. CODE § 3.604 (West 2005).......................................................... 9
TEX. CIV. PRAC. & REM. CODE. § 41.003 (West 2003)............................................ 12
Tex. Ins. Code § 21.55 ............................................................................................. 19
Other Authorities
Tex. R. App. P. 33(a)(1)(A) ....................................................................................... 2
Tex. R. Civ. P. 272-274 ............................................................................................. 2
490948.1; 102869.0019 iv
STATEMENT OF THE CASE
Respondents PNC, N.A. as successor-in-interest to National City Bank of
Indiana (“National City”) and Home Loan Services, Inc. (“HLS”) (referred to
together as the “Bank”) provide this Honorable Court of Appeals with a Statement
of the Case because Relator Albert Ortiz (“Ortiz”) failed to fully describe the
relevant proceedings before the trial court. The Bank also files a Supplemental
Record because Ortiz failed to file all of the documents pertinent to the
proceedings before the Court.1
After the first trial to a jury in June of 2010, the judgment of the trial court
was appealed to the 14th Court of Appeals. The Court of Appeals issued its initial
opinion on November 20, 2012 (R. M). Following motions for rehearing by both
parties, the Court of Appeals withdrew its original opinion and issued its final
opinion on rehearing on May 16, 2013 (R. B).2 Ortiz filed a Petition for Review to
the Texas Supreme Court which was denied.3 Thereafter, the Court of Appeals
issued its limited mandate to the trial court remanding the case for retrial on
specific limited issues (R. B).
The parties appeared before the trial court on August 1, 2014 for a
scheduling conference at which time this matter was set for trial for January 26,
1
The Bank’s Supplemental Record begins with document “M” as the last document in Ortiz’s Record is document
“L.” The Bank’s Record reference will follow the form “R.M at p. ___.”
2
National City Bank of Indiana v. Ortiz, 401 S.W.3d 867 (Tex.App.—Houston [14th Dist.] 2013, pet. denied).
3
Id.
490948.1; 102869.0019 1
2014 (R. N).4 Prior to the scheduling conference, Ortiz filed a motion to Set Aside
Order Denying Leave to Supplement Pleadings (“Motion to Set Aside”) (R. O).
By this motion, Ortiz sought to set aside an order the trial court entered shortly
before the first trial denying a motion by Ortiz to amend his pleadings to add
causes of actions purportedly arising out of a rescission deed (Id.). The trial court
had denied the motion prior to trial because the trial court determined any claims
involving the rescission deed were already plead (R. P at p. 2).5 The rescission
deed was admitted as an exhibit at trial and Ortiz was allowed to submit testimony
regarding the existence of the instrument and argue the document before the jury
(Id.).
The Bank objected to Ortiz’s Motion to Set Aside because Ortiz failed to
raise any issue on appeal regarding the trial court’s denial of his motion to amend
his pleading or any failure to include an issue regarding the rescission deed to the
jury (Id).6 The Bank also asserted any new claims arising out of the rescission
deed were beyond the mandate of the court of appeals and any “old claims” had
either been tried or were already before the trial court (Id.). During the hearing,
Ortiz withdrew his motion stating he intended to assert the rescission deed based
4
The trial court removed the case from this trial docket due to the pending mandamus proceeding.
5
Attached as exhibits to R. P are the trial transcript in which the rescission deed was admitted as evidence at the first
trial and the copy of the rescission deed admitted at trial as Exhibit 19.
6
See Brief of Cross Appellant Albert Ortiz filed in No. 14-10-01125-CV. Furthermore, Ortiz failed to object during
the first trial to any failure by the trial court in excluding a question to the jury relating to the rescission deed
although Ortiz filed objections to the jury charge with the court (See CR in No. 14-10-01125-CV at CR 01453). In
fact, Ortiz failed to submit any proposed issues specifically related to the rescission deed as required by Tex. R. Civ.
P. 272-274; Tex. R. App. P. 33(a)(1)(A).
490948.1; 102869.0019 2
claims and some new claims in a subsequent pleading (R. N at p. 12-14). At this
point the trial court encouraged the parties to amend their pleadings to file
dispositive motions so the scope of the remand order court be ascertained and law
of the case issues could be addressed (Id. at p. 23-24).
The parties subsequently entered into an agreed scheduling order to allow
the parties to amend their pleadings and then file dispositive motions on the
pleadings by October 3, 2014. Both Ortiz and the Bank amended their pleadings
(R. E and R. J).7
After the parties amended their pleadings, the Bank timely filed a motion for
partial summary judgment (not a motion to strike as Ortiz asserts) seeking to
dispose of portions of Ortiz’s 10th Amended Petition barred by the remand order,
the law of the case and/or res judicata (R. G).8 On October 24, 2010, Ortiz
responded to the motion for summary judgment and filed a notice of partial non-
suit without prejudice purporting to non-suit the following causes of action:
trespass to try title, trespass to realty, quiet title, fraud, unlawful debt collection,
breach of letter agreements, request for declaratory relief and equitable subrogation
(R. H and R. F). In his response to the Bank’s motion for summary judgment Ortiz
stated he non-suited the listed claims so he can bring them as a new lawsuit (R. H
7
Ortiz claims Bank has added causes of action in violation of the trial court’s order. While not directly relevant to
Ortiz’s petition the allegation is untrue. Bank has added no new causes of action and has amended its defenses in
accordance with the mandate.
8
The Court in Simulis, LLC v. General Electric Capital Corp., suggests that summary judgment is the proper
procedural mechanism to raise these issues. 392 S.W.3d 729, 736 (Tex. App.—Houston [14th Dist.] 2011, pet.
denied).
490948.1; 102869.0019 3
at p. 1).9 On October 28, 2014, Ortiz filed a lawsuit against Bank of America, NA
and PNC Bank, NA in 133rd District Court, Harris County, Texas, Cause No. 2014-
63579 (R. Q) (the “New Lawsuit”).10 The causes of action in the new lawsuit arise
out of the rescission deed and include trespass to try realty, quiet title, fraud,
unlawful debt collection, breach of letter agreements, declaratory relief, equitable
subrogation, punitive damages and attorney’s fees which were all litigated to
judgment in the first trial (Id.).
The Bank filed a reply to Ortiz’s response to the Bank’s Motion for Partial
Summary Judgment (R. R). The trial court heard the motion on October 31, 2014
at which time the trial court granted the Bank’s motion (R. U). The trial court
entered an order granting the motion for summary judgment largely tracking the
language of the court of appeals mandate (R. I).
Ortiz filed this mandamus proceeding on December 11, 2014.
Following his filing of this Mandamus proceeding, Ortiz filed amended
disclosures in this action in which he made the following statement, “These
disclosures include Ortiz’s claims that have not been non-suited or disposed by the
Court and that are not listed in the Court’s order of November 12, 2014. Ortiz is
presently seeking to have this summary judgment order vacated or set aside by the
9
Bank in its Reply Brief pointed out that its Motion for Summary Judgment was directed to causes of action which
are finally decided and not appealed. Therefore, Ortiz could not non-suit what was already finally disposed of.
10
Contrary to Ortiz’s representations in his Mandamus Brief, a copy of the petition in this lawsuit was not included
in Ortiz’s Mandamus Record. Accordingly, the Bank provides a copy in its record. As of the date of the filing of
this Response, the Bank is unaware of the New Lawsuit having been served on the defendants.
490948.1; 102869.0019 4
court of appeals and makes these disclosures conditional on prevailing in that
proceeding; if successful in establishing the appellate court’s mandate in not
limited, Ortiz intends to take such claims to trial and to re-plead and try many or all
of the non-suited claims.” (R. S).
STATEMENT OF FACTS
A. The Mandate of the Court of Appeals
After a trial to a jury, a jury verdict and judgment, an appeal to the 14th
Court of Appeals, motions for rehearing by both parties, and a Petition to the
Supreme Court, the Court of Appeals issued a mandate based upon an opinion on
rehearing with specific and detailed language instructing the trial court how to
proceed (R. B).11
1. Portions of Judgment Reversed by Court of Appeals
In the remand order, the Court of Appeals reversed the following portions of
the judgment:
• “holding National City liable to Ortiz for damages and attorney’s
fees,”
• “providing that National City take nothing by its claims,”
• “denying National City a request for judicial foreclosure,” and;
• “declaring the Note and Deed of Trust fully, completely and finally
satisfied and no past, present, or further obligations sums are or shall
become due and owing under said Note and Deed of Trust.” (R. B).
11
Ortiz, 401 S.W.3d at 867.
490948.1; 102869.0019 5
The Court of Appeals reversed the portion of the judgment providing “that
all partial and/or interlocutory judgments heretofore granted in this case are hereby
made final and incorporated into this Final Judgment.” (Id.) This means that any
summary judgment previously entered by the trial court are no longer effective and
controlling. Finally, the Court of Appeals reversed the portion of the judgment
specifying the amount of actual damages awarded against HLS (Id.).
2. Portions of Judgment Affirmed by the Court of Appeals
The Court of Appeals affirmed portions of the judgment that were not
challenged on appeal or otherwise addressed by their opinion (Id.). Specifically,
this included all the causes of action for which the trial court granted the
Defendants directed verdict including “fraud, common-law unreasonable debt-
collection, statutory debt-collection violations, statutory deceptive trade-practice
violations, breach of oral contract, promissory estoppel, theft, breach of bailment,
invasion of privacy and defamation per se.” (Id.) (See also trial transcript where the
trial court grants the Bank’s directed verdict which is attached as Exhibit “G” to
the Bank’s Motion for Summary Judgment at R. G).
The judgment for damages awarded Ortiz was not appealed by the
Defendants (other than the correct application of the one satisfaction rule) (R. B at
34-37).12 Ortiz was awarded damages against HLS on his causes of action for
12
See also Brief of Appellant on file in No. 14-10-01125-CV.
490948.1; 102869.0019 6
trespass and trespass to personalty, conversion, negligence and gross negligence
and punitive damages (Id. at 7, 34-37).
3. Limited Remand Order
The Court of Appeals issued a limited remand order identifying the causes
of action to be retried. Specifically, the Court of Appeals ordered the Trial Court
to:
• “retry Ortiz’s claim against National City for breach of contract and
National City’s claims against Ortiz for breach of contract and judicial
foreclosure, and, with the exception of Ortiz’s limitations defense
discussed in [the Court of Appeal’s] opinion, permitting the parties to
assert defenses to these claims,”;
• “after applying the one-satisfaction rule and any settlement credits,
determine the total amount of HLS’s liability to Ortiz for actual
damages and the amounts, if any, that are owned by National City to
Ortiz or by Ortiz to National City,” and;
• “render final judgment that is consistent with this court’s opinion.”
(R. B) [Emphasis added].
First, the Court of Appeals’ language is very specific and therefore the
remand is limited.13 That the Court of Appeals was focused on the language of its
mandate is evidenced not only by its specificity but also by comparing the
language of its original opinion to that of the final opinion following rehearing. In
its original opinion, the Court of Appeals stated that the Court of Appeals
13
The Price Court states that a case is not remanded on all “issues of fact” where the appellate court limits the
remand “by specific instructions.” Price v. Gulf Atlantic Ins. Co., 621 S.W.2d 185, 187 (Tex. Civ. App.-Texarkana,
1981).
490948.1; 102869.0019 7
“[remanded] the case with instructions to the trial court to (1) sever National City’s
claims from the remainder of the case; 2) retry National City’s severed claims (R.
M at p. 35-36). Following motions for rehearing by both parties, the Court of
Appeals provided the much more specific language “retry Ortiz’s claim against
National City for breach of contract and National City’s claims against Ortiz for
breach of contract and judicial foreclosure, and, with the exception of Ortiz’s
limitations defense discussed in [the Court of Appeal’s] opinion, permitting the
parties to assert defenses to these claims.” (R. B at p. 2). This is a significant and
very specific change in the language of the remand order reflecting the Court of
Appeals’ careful attention to the claims to be retried on remand. It is hard to
imagine that, with this considered change in language, the Court of Appeals
intended that any and all claims be subject to retrial as Ortiz suggests, rather than a
limited remand and retrial of specific named claims.
B. The Summary Judgment and the Court of Appeals’ Opinion
The Court of Appeal’s opinion focused on an incorrect summary judgment
ruling (included in the final judgment) by the trial court that the letter agreements
between the parties released all of the Bank’s claims arising out of the notes and
deed of trust (R. B).14 The trial court granted a judgment notwithstanding the
verdict to Ortiz explicitly incorporating its summary judgment rulings on these
14
401 S.W.3d at 875-876. A copy of the published opinion is attached as Exhibit “C” to Defendant’s Motion for
Summary Judgment which is included at R. G.
490948.1; 102869.0019 8
letter agreements in the final judgment and dealt with whether UCC § 3.604
applied to the letter agreements (Id.).15 In its opinion, the Court of Appeals found
the trial court improperly granted Ortiz summary judgment based on the letter
agreements and thus the parties’ breach of contract claims and National City’s
judicial foreclosure claims must be remanded and retried (Id.).16 The summary
judgment, its incorporation into the final judgment, reversal, and remand were
unrelated to any tort claims (Id.).17
C. Ortiz’s New Claims
Ortiz’s 10th Amended Petition far exceeds the scope of the Court of Appeal’s
limited remand (R. E). Ortiz seeks to retry causes of action which were dismissed
in a take nothing judgment which was not appealed or for which he received a final
judgment award of damages which was not appealed. The claims Ortiz seeks to
retry are barred by the remand order or the law of the case doctrine.
Ortiz now claims, following his ineffective non-suit, there are only six
claims remaining in his 10th Amended Petition subject to the trial court’s summary
judgment order that Ortiz is seeking to have tried in the second trial of this case:
negligent performance of a contract (paragraphs 58 and 59); breach of contract
(paragraphs 61 and 62); request for declaratory relief (paragraph 63) and punitive
damages (paragraph 66) (Mandamus Brief at p. 13). Ortiz further claims none of
15
401 S.W.3d at 875-876.
16
Id. at 884-885.
17
In fact, Ortiz raised issues on appeal related to his tort claims on cross-appeal. See 401 S.W.3d at 887.
490948.1; 102869.0019 9
these claims involve trespass upon personal property or real property or any other
claims that were disposed on during trial. However, Ortiz makes it clear he intends
to bring these additional tort claims including “new claims” again by consolidating
his new lawsuit or by amending the pleadings in the underlying case should this
Court grant him mandamus relief (R. S at fn 1).
Ortiz’s “new claims” arise largely out of a rescission deed that was admitted
as an exhibit at the prior trial (See p. 23-36 of Ortiz’s 10th Amended Petition at R
E). Ortiz elicited testimony regarding this document and referred frequently to the
document in his closing argument (R. O). The trial court did not allow Ortiz to
amend his pleading prior to trial to add causes of action specific to this deed for
trespass to try title, trespass to realty, quiet title, fraud, unlawful debt collection and
sanctions because Ortiz already plead those claims (R. O). These claims, including
facts surrounding the rescission deed, were submitted to the jury and Ortiz either
recovered damages and/or the Bank obtained a directed verdict (neither of which
were appealed) (R. O).
ARGUMENT
A. Introduction
The Bank filed a motion for summary judgment asking the trial court to
recognize the Court of Appeals’ limited mandate and try only the causes of action
and defenses identified in the mandate. (R. G and R. R). Ortiz seeks to thwart the
490948.1; 102869.0019 10
mandate of the Court of Appeals, first by his Motion to Modify referenced supra,
second by amending his pleading, and next by presumably consolidating the “new
lawsuit.” The trial court did not abuse its discretion when it entered the order
granting the Bank’s summary judgment, but rather, was following the specific
instructions of the Court of Appeals as set forth in its mandate.
B. Ortiz Attempts to Mislead The Court of Appeals as to His “New
Claims”
Ortiz asserts that the claims that remain following his non-suit are not “new
claims”, but rather relate to the contract which the parties were ordered to relitigate
and do not involve relitigation of issues already tried and litigated (Mandamus
Brief at p. 13-14). Each assertion by Ortiz is wrong. These claims were not in his
live pleading at the time of trial (See Eighth Amended Pleading at R. T).18 If these
are indeed not new claims, Ortiz has no need to raise them in new pleadings.
Further, as recognized by the trial court, two of the causes of action,
negligent performance of a contract (paragraphs 58 and 59 of Ortiz’s 10th
Amended Petition), cannot be maintained as a matter of law (R. U at p. 5-6, 8).19
The remaining claims are breach of contract (paragraphs 61 and 62), request for
declaratory relief (paragraph 63) and punitive damages (paragraph 66). The
contract and declaratory judgment claims are within the mandate and not at issue
18
Ortiz’s Eighth Amended Petition was his live pleading prior to the first trial.
19
Ortiz’s non-contractual claims provide no basis for recovery because under the economic loss doctrine a party
cannot assert tort claims for matters which are the subject of a contractual relationship and for which the damages
are purely economic in nature. Jim Walter Homes Inc. v. Reed, 711 S.W.2d 617 (Tex. 1986); Southwestern Bell
Telephone Co. v. DeLanney, 809 S.W.2d 493 (Tex. 1991).
490948.1; 102869.0019 11
here. Ortiz cannot recover punitive damages for breach of contract or declaratory
judgment the only claims allowed by the mandate.20 Accordingly, the only causes
of action these damages could relate to have already been tried (the tort claims)
and were not appealed. Further, Ortiz was awarded $100 in punitive damages the
amount of which was not appealed by the Bank or Ortiz.21
Post appeal, Ortiz amended to add claims and then non-suited the claims for
trespass to try title, trespass to realty, quiet title, fraud, unlawful debt collection,
breach of letter agreements, request for declaratory relief and equitable subrogation
claim all arising out of the rescission deed (R. E and F) in a failed attempt to avoid
the trial court’s summary judgment limiting claims to those stated in the Court of
Appeals’ mandate. In his “New Lawsuit”, which Ortiz intends to consolidate with
the underlying suit, Ortiz reasserts these same claims and asserts that he suffered
the loss of use of his property as a result of the issuance of the rescission deed by
the substitute trustee following the foreclosure of the property (R. Q).22 However,
his claims arising out of the rescission deed were previously tried and Ortiz
obtained damages for the claims. The rescission deed was an exhibit at trial, Ortiz
20
Tex. Civ. Prac. & Rem. Code. 41.003.
21
See also the parties briefs filed in No. 14-10-01125-CV.
22
The rescission deed was not valid at the time it was executed as the borrower was not a party to the instrument.
Further, the substitute trustee had no authority to execute the rescission deed and thus it was void at execution.
Bonilla v. Roberson, 918 S.W.2d 17 (Tex.App.—Corpus Christi 1996, no writ). Once a sale is complete, there is no
further express or implied authority to act as the mortgagor's agent in the cancellation or rescission of a sale. A
trustee does not have the power to execute a “Cancellation of Deed” purporting to take back title to the property and
resurrect the underlying debt. To imply a power in the trustee to nullify a sale after the sale is complete and the
trustee's deed has been executed, delivered, and filed, would be to give the trustee powers never specified or
contemplated by the deed of trust.
490948.1; 102869.0019 12
elicited testimony regarding the document and argued the rescission deed during
closing arguments (R. P and exhibits). Ortiz recovered damages for his loss of use
of the property.23 The trial court awarded the defendants directed verdict on the
causes of action for fraud and unlawful debt collection (R. O at exhibits 2-5 and R.
G at exhibit G).24
C. Court of Appeals Issued a Limited Remand
The Supreme Court stated in Hudson v. Wakefield that when a court of
appeals issues a limited remand, the trial court is restricted to the specific
remanded issues on retrial.25 Thus, in a subsequent appeal, instructions given to a
trial court by the court of appeals will be adhered to and enforced.26 In interpreting
the mandate, a trial court should look not only to the mandate itself, but also to the
opinion of the court.27 When an appellate court remands a case with specific
instructions , the trial court is limited to complying with the instructions and cannot
relitigate issues controverted at the former trial.28
23
The only issue that remains regarding Ortiz’s damages is the application of the one satisfaction rule after the
contract claims are tried.
24
Ortiz may argue that the rescission based clams are “new claims” because he did not get to submit a jury question
on the issue. Ortiz failed to object during the first trial to any failure by the trial court in excluding a question to the
jury relating to the rescission deed although Ortiz filed objections to the jury charge with the court (See CR in No.
14-10-01125-CV at 01453).
25
Hudson v. Wakefield, 711 S.W.2d 628, 630 (Tex. 1986); See University of Texas System v. Harry, 948 S.W.2d
481, 482-483 (Tex.App.—El Paso 1997, no pet.) (on appeal following jury trial on a workers compensation claim,
the court of appeals issued limited remand when it stated that retrial was limited to issue of whether plaintiff
incurred an injury on a certain date and, if so, whether she received the injury in the scope of her employment. Trial
court went beyond remand when it tried other issues).
26
Hudson, 711 S.W.2d at 630., citing, Wall v. Wall, 143 Tex. 418 (1945).
27
Id. at p. 630.
28
Cessna Aircraft Co. v. Aircraft Network, LLC, 345 S.W.3d 139, 144 (Tex.App.—Dallas 2011, no pet.), citing,
Denton County v. Tarrant County, 139 S.W.3d 22, 23 (Tex.App.—Fort Worth 2004, pet. denied).
490948.1; 102869.0019 13
Ortiz incorrectly states the Bank failed to identify in its motion for summary
judgment any language in the mandate limiting the claims to be retried (Mandamus
Brief at p. 9). To the contrary, the Bank pointed to language in the mandate in
which the Court of Appeals specifically identified the claims to be retried stating,
“We therefore . . . REMAND the case with instructions to the trial court to retry
Ortiz’s claim against National City for breach of contract and National City’s
claims against Ortiz for breach of contract and judicial foreclosure, and, with the
exception of Ortiz’s limitations defense discussed in [the Court of Appeal’s]
opinion, permitting the parties to assert defenses to these claims. . ,” (R. B). This
language identifies exactly what claims are to be retried. The language of the
mandate cannot be read as a license to litigate new claims.
Ortiz further claims that the Court of Appeals must use magic words of some
sort to state that no claims other than those listed can be tried upon remand
(Mandamus Brief at p. 9-10). But, the mandate here states exactly what the
parties are allowed to amend: to assert defenses to the previously stated claims, i.e.
Ortiz’s claim for breach of contract and National City’s claim for breach of
contract and judicial foreclosure. Why would the Court of Appeals be so specific
490948.1; 102869.0019 14
in its instructions if the remand is unlimited? Why wouldn’t the Court of Appeals
simply say the case is remanded –period—if all claims can still be brought?29
Ortiz selectively cites language from Hudson v. Wakefield for the
proposition that “the cases are rare and exceptional in which this court is warranted
in limiting the issues of fact . . .” (Mandamus Brief at p. 8). In Hudson v.
Wakefield, a case involving specific performance of a contract for the sale of
property, the case initially had been disposed of at early juncture by summary
judgment.30 After reversal and remand by the Supreme Court, the seller amended
to add fraud in the inducement prior to a full trial before a jury. The decision in
Hudson v. Wakefield discusses at length how a critical factor in determining
whether a mandate is limited is whether the case involves a review of a case
disposed by summary judgment versus a case disposed of by a full trial on the
merits.31 Since Hudson v. Wakefield involved a case disposed of following a
motion for summary judgment, the court of appeals determined the mandate
allowed for amendment following remand.32 The Hudson v. Wakefield case as cited
by Ortiz does not apply to a case fully tried as the case at hand.
29
Ortiz makes much of the Mandate’s language expressly prohibiting the retrial of Ortiz’s statute of limitations
defense. But, this language actually favors reading the Mandate as being limited. When the Court of Appeals wants
to allow retrial of certain issues (defenses to the contract claims) it says so. When it wants to limit such retrial (no
retrial of statute of limitations) it also says so. One simply cannot read such language and conclude all issues are
open for retrial.
30
Id.at 629.
31
Id. at p. 630-631.
32
Id.
490948.1; 102869.0019 15
Similarly, Ortiz’s reliance on Reynolds v. Murphy is misplaced.33 In
Reynolds, the appellant sued the appellee for negligence, fraud, and DTPA for
losses arising out of stock market losses.34 The trial court granted appellee final
summary judgment on all of these claims and appellee appealed.35 The court of
appeals affirmed most of the summary judgment but reversed and remanded as to
one claim upon which the appellee had failed to specifically move for summary
judgment.36 Upon remand, the appellant sought to take depositions and amend its
petition to add two new causes of action—violations of Texas Securities Law and
the Texas Business and Commerce Code—while retaining his previously plead
claims.37 The trial court, upon special exceptions filed by appellee, struck the new
claims asserted by appellant stating that the mandate of the court of appeals only
allowed the retrial of the previously plead claims.38
The appellant filed a mandamus petition which the court of appeals granted.
As in Hudson v. Wakefield, the court distinguished between cases in which the case
proceeded to a full trial to a jury (as in the case at hand) and cases in which the
matter was disposed by summary judgment.39 The court noted that in summary
judgment cases, the case is still in the pretrial stage, with discovery ongoing, and if
33
Reynolds v. Murphy, 266 S.W.3d 141 Tex. App.—Fort Worth 2008, pet. denied.
34
Id. at 142-143.
35
Id. at 143-144
36
Id.
37
Id.
38
Id.
39
Id. at 147-148.
490948.1; 102869.0019 16
the trial court had denied summary judgment initially, the party would have been
free to amend his pleadings and add new claims subject to any scheduling orders of
the court.40 Because the mandate in Reynolds v. Murphy involved the reversal and
remand of a final summary judgment, the court of appeals determined the appellant
should have been allowed to amend his pleadings.41 In contrast, the parties here
have completed discovery, made final amendments to pleadings, and must bring all
the claims they intend to assert for a trial to a jury. Upon remand after a full trial
on the merits, the parties do not get a complete do over.
The final case primarily relied upon by Ortiz, Simulis, L.L.C. v. General
Electric Capital Corp., again involved a judgment rendered upon summary
judgment, rather than final judgment rendered following a jury trial.42 The trial
court had granted summary judgment on a promissory estoppel and quantum
meruit counter-claim.43 The court of appeals reversed and remanded the quantum
meruit counter-claim finding there was a fact issue.44 On remand, rather than
pursue the quantum meruit claim, the defendant amended its pleading to add
various new claims.45 The plaintiff filed a motion to dismiss the new claims as not
consistent with the mandate, which the trial court granted.46 The court of appeals
40
Id. at 148.
41
Id.
42
Simulis, L.L.C., 392 S.W.3d at 729.
43
Id. at 731.
44
Id. at 732.
45
Id.
46
Id. at 735.
490948.1; 102869.0019 17
reversed noting that it had not included any language limiting defendant to
quantum meruit only thus the defendant was free to amend its claims “except as to
those claims on which we rendered summary judgment in [plaintiff’s favor]” (the
application of law of the case will be discussed in detail below).47
Again, the case at hand does not involve a final judgment arising out of a
summary judgment motion. Additionally, unlike Simulis, the mandate in this case
DOES include language limiting the parties, including Ortiz, to specific causes of
action.
In the instant case a two week trial was held after years of discovery and
extensive motion practice. Only a narrow portion of the claims were appealed
relating to contract causes of action. Tort based claims were appealed and they
became final. Hudson notes that:
By narrowing issues in successive stages of the litigation, the law of
the case doctrine is intended to achieve uniformity of decision as well
as judicial economy and efficiency.48
This case has been narrowed by the Court of Appeals and its mandate should be
followed.
Ortiz asserts he can rely on the above-referenced line of cases because one
of the basis for reversal in the case at hand was the incorporation of a partial
summary judgment into the final judgment entered in this case following a jury
47
Id. at p. 735.
48
Id. at 630.
490948.1; 102869.0019 18
trial (Mandamus Brief at p. 15). In contrast to the cases cited by Ortiz, the case at
hand was pending for four years before it went to trial, was fully discovered and
proceeded to a full jury trial. The summary judgment which was the subject of the
appellate court’s decision was issued prior to the jury trial, incorporated into the
final judgment and is not even relevant to the “new claims” Ortiz seeks to assert
49
following remand (the new claims relate to the rescission deed). Ortiz was
allowed to introduce evidence regarding the rescission deed to the jury. Ortiz tried
his tort claims and obtained an award of damages and did not appeal this portion of
the judgment. He does not get to retry those claims on a second trial because he
did not like the outcome.
The mandate in this case is very similar to the mandate issued following the
jury trial in Cessna Aircraft Company v. Aircraft Network, LLC.50 In Cessna, an
airplane owner brought a case against an airplane repairer for damage to an
airplane.51 The case proceeded to a jury trial and Cessna was awarded damages for
breach of bailment, breach of reimbursement contract, breach of implied warranty,
49
A court can issue a limited remand from an appeal of a summary judgment if it includes the correct limiting
language. See Thomas v. Allstate Ins. Co., 2006 WL 2290840, *3 (Tex.App.-Houston [14th Dist.] Aug. 10, 2006, no
pet.) in which the court held that following an appeal of a motion for summary judgment, the court of appeals
remanded on claims for misrepresentation claims and misrepresentation claims under the Texas Insurance Code, and
not claims for unreasonable delay, bad faith, unfair settlement practices and article 21.55 remedies. The remand
language stated the following, “We also hold Allstate's summary judgment motion does not establish the absence of
a genuine issue of material fact in relation to Thomas's claims for misrepresentation under the Texas Insurance
Code. We therefore reverse the judgment on those claims, and remand them to the trial court for further proceedings
consistent with this opinion. Thomas v. Allstate Ins. Co., 2004 WL 1574542 (Tex.App.-Houston [14th Dist.] July 15,
2004)).
50
Cessna Aircraft Co. v. Aircraft Network, LLC, 345 S.W.3d 139, 145 (Tex. App.--Dallas 2011, no pet.).
51
Id. at 142.
490948.1; 102869.0019 19
negligent misrepresentation, pre and post judgment interest and attorney’s fees.52
On appeal, the, the court of appeals issued the following mandate:
We REFORM the trial court's judgment to delete the $166,000.00
award for breach of bailment contract ... We REVERSE the trial
court's awards for breach of reimbursement contract, negligent
misrepresentation, and breach of implied warranty, and RENDER
judgment that Aircraft Network take nothing on those claims ... We
REFORM ... the judgment to reinstate the award of $210, 517.66 for
Aircraft Network ... on its promissory estoppel claim. We REVERSE
the trial court's award of attorney's fees and costs and REMAND those
issues to the trial court for proceedings consistent with this Court's
opinion. In all other respects, we AFFIRM the trial court's judgment.53
Like the case at hand, the court of appeals reversed certain portions of the
judgment in Cessna, rendered that Cessna take nothing on those claims and
reversed and remanded a specifically identified claim to the trial court, the issue of
attorney’s fees. Although the mandate in Cessna did not specifically state that the
parties could not amend their pleadings, on a second appeal, the court held that
contrary to Cessna’s assertion, the trial court had no authority to enter a judgment
addressing any other issues other than attorney’s fees and costs.54 “To do
otherwise would have exceeded the scope of the mandate.”55
The Court of Appeals makes it clear in both its mandate and its opinion the
claims that the parties are to retry: Ortiz and the Bank’s breach of contract claims
52
Id.
53
Id. at 145.
54
Id. at 145.
55
Id.; See also Martin v. Credit Protection Assoc., Inc., 824 S.W.2d 254 (Tex.App.—Dallas 1992, writ dism’d
w.o.j.).
490948.1; 102869.0019 20
and the Bank’s judicial foreclosure claims. The only amendment allowed by the
mandate is that the parties may assert affirmative defenses to these claims. Retrial
following a full jury trial is not meant to start the entire litigation process over.
Rather remand after a jury trial seeks to retry only the issues remaining after
appeal. The trial court did not abuse is discretion when it granted the Bank’s
motion for summary judgment and the Court of Appeals should deny Ortiz’s
Petition for Writ of Mandamus.56
D. Law of the Case Also Bars the “New Claims”
In addition to being excluded from retrial by the limited remand,
many of the claims Ortiz attempts to reassert are barred by the law of the case.
These include claims Ortiz asserts following Ortiz’s non-suit and the claims Ortiz
intends to bring back into this action either by consolidating the “new lawsuit” or
amending his petition again.
The law of the case doctrine provides that a question of law decided on
appeal to a court of last resort will govern the case throughout its subsequent
stages.57 The law of the case doctrine applies only to questions of law, not
56
Ortiz fails to even mention one of the elements required to obtain mandamus relief. To be entitled to the
extraordinary relief of a writ of mandamus, the relator must show the trial court clearly abused its discretion and left
him no adequate remedy by appeal. In re Team Rocket, L.P., 256 S.W.3d 257, 259 (Tex. 2008); In re Lesikar, 285
S.W.3d 577, 582 (Tex.App.—Hous. [14th Dist.] 2009, no writ) (applied to scope of remand order). Ortiz failed to
show that the trial court’s abuse of discretion left him no adequate remedy by appeal (See Mandamus Brief at p. 5-
8). For this reason, Ortiz’s Petition should be denied.
57
Briscoe v. Goodmark Corp., 102 S.W.3d 714, 716 (Tex. 2003); Leake v. Half Price Books, 918 S.W.2d 559, 562-
63 (Tex.App.—Dallas 1996, no writ) (point established on remand of earlier summary judgment was properly made
the basis of second summary judgment, and appellate court would not revisit the issue on appeal of second summary
judgment).
490948.1; 102869.0019 21
questions of fact.58 Moreover, the doctrine may not be applied to subsequent
stages of the case if the issues presented or the facts presented are not substantially
the same as presented in the first trial.59 A determination by an appellate court
that the evidence is legally insufficient to support a finding involves a question
of law and falls within the ambit of the law of the case doctrine.60 Once a case
has been appealed to the Supreme Court and the Supreme Court declined to accept
the petition for review, the law of the case applies.61
On issues that a court of appeals affirms, the judgment of the trial court
becomes the judgment of the court of appeals and the trial court is not required to
make any further orders as to those issues.62 The court of appeals’ decision is
binding on the trial court on those points that have already been decided by the
court of appeals.63
In this case, the court of appeals affirmed the trial court’s judgment of
Ortiz’s causes of action for: fraud, common-law unreasonable debt collection,
58
Hudson, 711 S.W.2d at 630 (Tex. 1986).
59
Id.
60
Lifshutz v. Lifshutz, 199 S.W.3d 9, 20 (Tex. App.—San Antonio 2006, pet. denied).
61
See Baptist Memorial Hosp. System v. Smith, 822 S.W.2d 67, 73 (Tex. App. –San Antonio 1991, writ denied);
Allied Finance Co. v. Shaw, 373 S.W.2d 100, 106 (Tex.Civ.App.—Ft. Worth 1963, writ ref’d n.r.e.); Hurd
Enterprises, Ltd. v. Bruni, 828 S.W.2d 101, 106 (Tex. App.- San Antonio 1992, writ denied); But see, In re Henry,
388 S.W.3d 719, 727 (Tex. App.—Houston [1st Dist.] 2012, no pet.) (“Because neither party filed a motion for
rehearing or a petition for review with the Texas Supreme Court challenging these holdings, our ruling became the
law of the case and controlling on remand.”); See also, Barrows v. Ezer, 624 S.W.2d 613, 616-617 (Tex.Civ.App.—
Houston [14th Dist.] 1981, no writ) (where law of the case was applied when decision of court of appeals in original
appeal was not challenged by petition for writ to the Supreme Court).
62
Cessna Aircraft Co., 345 S.W.3d at 145.
63
Kahn v. Seely, 37 S.W.3d 86, 88 (Tex.App.—San Antonio 2000, no pet.). In Kahn v. Seely, Kahn attempted to
relitigate points of error related to the post-dissolution compensation of his business that had been affirmed on
appeal. The court of appeals, on a second appeal, determined Kahn could not relitigate those matters under the law
of the case doctrine
490948.1; 102869.0019 22
statutory debt collection violations, statutory deceptive trade practices violations,
breach of oral contract, promissory estoppel, theft, breach of bailment, invasion of
privacy and defamation per se (R. B). The trial court disposed of these claims on
directed verdict by the Bank which was not appealed by Ortiz (R. G at exhibit G).
The dismissal of these causes of action by directed verdict became law of the case
and Ortiz cannot attempt to relitigate them in the retrial of this matter.64 If the trial
court allowed Ortiz to retry any of the claims for which the Bank already obtained
a final judgment, the trial court would be interfering with the Court of Appeals’
jurisdiction which would be an abuse of discretion.65
Further, any claims involving the rescission deed have already been tried to
a jury in the first trial. The rescission deed was an exhibit at trial, Ortiz elicited
testimony at trial and argued the effect of the rescission deed at closing arguments
(R. O at exhibits 2-5). Ortiz recovered damages for his loss of use of the property
and the only issue that remains is the application of the one satisfaction rule once
the breach of contract claims are tried (R.B). On remand, the trial court is limited
to complying with the instructions of the mandate and cannot relitigate issued
controverted at the prior trial.66
64
Lifshutz, 199 S.W.3d at 20; Cessna Aircraft Co., 345 S.W.3d at 145.
65
See Martin , 824 S.W.3d at 255-256.
66
Id. at 256.
490948.1; 102869.0019 23
CONCLUSION AND PRAYER
The trial court did not abuse its discretion when it granted the Banks’ motion
for summary judgment. The Court of Appeals issued a limited remand and Ortiz
seeks to litigate on retrial causes of action beyond the scope of the mandate and/or
barred by the law of the case. This Court should thus deny Ortiz’s Petition for
Writ of Mandamus.
Respectfully submitted,
McGLINCHEY STAFFORD, PLLC
By: /s/ Stephanie Laird Tolson
JOEL MOHRMAN
State Bar No. 14253500
STEPHANIE LAIRD TOLSON
State Bar No. 11795430
1001 McKinney, Suite 1500
Houston, Texas 77002
Telephone: (713) 520-1900
Facsimile: (713) 520-1025
Attorneys for Respondents
490948.1; 102869.0019 24
CERTIFICATE OF SERVICE
I hereby certify that on January 6, 2015, a copy of the above and foregoing
was filed electronically with the Clerk of Court using the CM/ECF system. Notice
of this filing has been forwarded to all attorneys of record, by operation of the
Court’s electronic filing system as follows:
VIA ECF NOTIFICATION VIA ECF NOTIFICATION
Michael C. Donovan Gary Michael Block
6300 Dixie Drive 6942 FM 1960 East, Suite 132
Houston, Texas 77087 Humble, Texas 77346-2706
mdonovanesq@yahoo.com judgeblock@gmail.com
/s/ Stephanie Laird Tolson
STEPHANIE LAIRD TOLSON
CERTIFICATE OF COMPLIANCE
I certify that this document was produced on a computer using Microsoft
Word 2010 and contains 6,791 words, as determined by the computer software’s
word-count function, excluding the sections of the document listed in Texas Rule
of Appellate Procedure.
/s/ Stephanie Laird Tolson
STEPHANIE LAIRD TOLSON
490948.1; 102869.0019 25
RECORD INDEX
14th Court of Appeals’ Opinion issued 11/20/12 regarding
Original Proceeding Writ of Mandamus .................................................................. M
164th District Court Transcript of 8/1/14 Court Hearing .......................................... N
Plaintiff’s Motion to Set Aside Order Denying Leave to
Supplement Pleadings filed 7/18/14 ......................................................................... O
Defendants’ Response to Plaintiff’s Motion to Set Aside Order
Denying Leave to Supplement Pleadings filed 7/31/14 ........................................... P
Albert Ortiz’s Original Petition filed 10/28/14
in Cause No. 2014-63579 ......................................................................................... Q
Defendants’ Reply to Plaintiff’s Response to Defendants’ Motion
for Partial Summary Judgment to Dismiss Portions of Plaintiff’s
10th Amended Petition filed 10/30/14 ....................................................................... R
Albert Ortiz’s Supplemental Disclosures Subsequent to Appellate
Court’s Remand of the Case dated 12/26/14 ............................................................ S
Plaintiff’s Eighth Amended Original Petition filed 4/12/10 ..................................... T
164th District Court Transcript of 10/31/14 Motions Hearing .................................. U
Verification of Stephanie Laird Tolson .................................................................... V
490948.1; 102869.0019 26
TAB M
Petition Denied; Affirmed in Part; Affirmed as Modified in Part; Reversed in Part;
Remanded; and Opinion and Dissenting Opinion filed November 20, 2012.
In The
1Jinurh~.enti1 168 S.W.3d 802, 823, 827 (Tex. 2005). The evidence is legally
sufficient if it would enable fair-minded people to reach the verdict under review. ld. at
827. Evidence is legally insufficient only if (1) there is a complete absence of evidence
of a vital fact, (2) the court is barred by rules of law or evidence from giving weight to
the only evidence offered to prove a vital fact, (3) the evidence offered to prove a vital
fact is no more than a mere scintilla, or (4) the evidence conclusively establishes the
opposite of the vital fact. I d. at 810.
After reviewing the record under the applicable standard of review, we agree with
the Bank Parties that the evidence is legally insufficient to support the jury's finding that
National City breached the Deed of Trust first.
1. National City materially breached the Deed of Trust no earlier than
November 1, 2005.
The central dispute in this issue involves the construction of Section 15 of the
Deed of Trust. Under the terms of this section, the Bank Parties were required to send
notices to Ortiz at the "notice address," which the parties agreed "shall be the Property
Address unless [Ortiz] has designated a substitute notice address." It is undisputed that
Ortiz designated a substitute notice address, and therefore, his notice address was not the
address of the Property.
8
But, under the unambiguous language of the Deed of Trust, sending a notice to
Ortiz at an address other than his notice address could be a breach of the Deed of Trust
only if the Deed of Trust required a notice to be sent. On November 1, 2005, HLS sent a
notice of acceleration to Ortiz at the Property Address rather than to the notice address
that Ortiz had designated. Because the terms of the Deed of Trust required any notice of
acceleration to be sent to Ortiz's "notice address," the failure of National City's agent to
send the notice to the correct address was a breach of the Deed of Trust. Although Ortiz
offered evidence that the Bank Parties sent other documents and notices to him at the
wrong address before November 1, 2005, this was the first time that a notice required
under the Deed of Trust was misaddressed. As a matter of law, National City first
breached the Deed of Trust by failing to send a required notice to Ortiz at his designated
address on November 1, 2005. Although the jury also could have concluded that
National City breached the Deed of Trust by declaring that Ortiz abandoned the property,
or by securing or possessing the property without providing Ortiz proper advance notice
of the intent to do so, there is no evidence that either of these events occurred before
November 1, 2005. According to the undisputed evidence, the Birdsall Property was
declared abandoned on November 8, 2005, and was secured on November 27, 2005.
Thus, based on the unambiguous language of the Deed of Trust and the evidence adduced
at trial, no rational jury could conclude that National City breached the Deed of Trust
before November 1, 2005.
2. Ortiz materially breached the Deed of Trust not later than October 1,
2005.
Based on the instructions in the court's charge, the jury could have found that
Ortiz materially breached the Deed of Trust by (a) "failing to occupy the Birdsall
Property as his principal residence and/or secure the property pursuant to the terms of the
Deed of Trust," (b) "failing to make payments as required under the Deed of Trust," or
(c) "failing to keep the Birdsall Property insured." No reasonable jury could have found
that Ortiz first breached the Deed of Trust in one of these ways after November 1, 2005.
The Deed of Trust provided that Ortiz "shall occupy, establish, and use the
9
Property as [his] principal residence within 60 days after the execution of [the Deed of
Trust] and shall continue to occupy the Property as Borrower's principal residence for at
least one year after the date of occupancy." Although Ortiz executed the Deed of Trust
on March 15, 2004, he never resided at the Birdsall Property. Under the terms of his
contract with the prior owners, he was required to lease the Property to them through July
2004 unless they notified Ortiz of their intent to vacate the premises earlier. Ortiz
testified that the Bank Parties were informed of this at the closing on the Property, and it
is undisputed that the prior owners vacated the premises without extending the lease. As
a result, Ortiz could have established the Property as his principal residence at any time
on or after August 1, 2004, but he did not do so. Thus, if the jury's finding that Ortiz
materially breached the Deed of Trust was based on his failure to "occupy, establish, and
use the Property as [his] principal residence," then the jury could not reasonably find that
this breach first occurred later than October 1, 2004, i.e., sixty days after the expiration of
the prior owners' lease.
The Deed of Trust further provided that Ortiz "shall pay when due the principal of,
and interest on, the debt evidenced by the Note and any prepayment charges and late
charges due under the Note." The Note specified that payments were due on the first day
of every month. It is undisputed that Ortiz never made a monthly payment on or before
its due date, and that he last made a payment in September 2005. If the jury based its
finding that Ortiz materially breached the Deed of Trust on his failure to make payments
when due, then the jury could not reasonably conclude that the breach first occurred later
than October 1, 2005.
Finally, Ortiz was required under the terms of the Deed of Trust to keep the
Birdsall Property insured. He admitted at trial that he purchased a year of coverage when
he purchased the home in March 2004, but failed to renew coverage when it expired in
April 2005. He did not reinsure the property for several months. Thus, he breached the
insurance requirements of the Deed of Trust in April2005.
Because National City breached the Deed of Trust no earlier than November 1,
2005, and Ortiz breached the same agreement not later than October 1, 2005, the
10
evidence is legally insufficient to support the jury's finding that National breached the
Deed of Trust first. The trial court therefore erred in denying the Bank's motion to
disregard this finding and in rendering judgment in Ortiz's favor on his breach-of-
contract claim.
We accordingly sustain the Bank Parties' second issue/ and we reverse the
portion of the judgment in which the trial court held National City liable to Ortiz for
breach of contract and for attorney's fees. In light of our disposition of this issue, the
first and third issues presented in Ortiz's cross-appeal are moot.
B. Did the Bank Parties Unambiguously Renounce Any Rights to Further
Payment or Foreclosure If the June 2006 Foreclosure Were Reversed?
In their first issue, the Bank Parties contend that the trial court erred in rendering
judgment that Ortiz has no obligation on the Note and the Deed of Trust. In making this
argument, they effectively challenge the legal sufficiency of the evidence on which the
following rulings were based: (I) the interlocutory partial summary judgment of April 9,
2009; (2) the trial court's interlocutory order of June 14, 2010 granting in part and
denying in part the parties' cross-motions for partial summary judgment; (3) the trial
court's ruling, incorporated in the final judgment, granting in part and denying in part the
parties' cross-motions for entry of judgment and to disregard certain jury findings; (4) the
denial of the Bank Parties' motion to modify the judgment; (5) the denial of their motion
for judgment notwithstanding the verdict; and (6) the denial of their motion for new trial.
When reviewing the legal sufficiency of the evidence, we apply the same standard
of review regardless of the procedural vehicle used to raise the issue. See City of Keller,
168 S.W.3d at 823. That is, we review the evidence in the light most favorable to the
challenged finding and indulge every reasonable inference that supports it. Id. at 822.
We credit favorable evidence if a reasonable factfinder could, and disregard contrary
evidence unless a reasonable factfinder could not. See id. at 827.
2
We have not addressed the issues in the same order in which they were presented by the parties.
II
1. The trial court erred in granting Ortiz partial summary judgment as to
"any claim arising from the Note mentioned in the Letter
Agreements."
A party who has raised an affirmative defense and moves for summary judgment
on that basis bears the burden of proving each essential element of the defense. See Fed.
Deposit Ins. Corp. v. Lenk, 361 S.W.3d 602, 609 (Tex. 2012). Here, the Bank Parties
asserted claims for amounts due under the Note and the Deed of Trust, to which Ortiz
raised the affirmative defenses of waiver and release. See TEX. R. CIV. P. 94 (listing
"waiver" and "release" as separate affirmative defenses). The Bank Parties then asserted
an additional counterclaim in which they asked the trial court to "declar[e] the legal
significance of the Letter Agreements." They asserted that the Letter Agreements were
"null and void ab initio for failure of consideration and/or due to the fraud committed by
Donovan, Ortiz's attorney, in obtaining the Letter Agreement[s ]." They additionally
argued that by retaining the benefits of the Letter Agreements, Ortiz ratified the
foreclosure.
In the first summary-judgment motion at issue in this appeal, Ortiz sought
judgment on the following grounds:
(a) In the Letter Agreements, the Bank Parties expressly waived all
claims against Ortiz;
(b) The Bank Parties' claims for declaratory judgment were
impermissible attempts to recast affirmative defenses as counterclaims;
(c) No evidence supported the assertion that Ortiz ratified the
foreclosure;
(d) Failure of consideration does not render a waiver void because
waivers require no consideration;
(e) With respect to the Bank Parties' assertion that Donovan's alleged
fraud in obtaining the Letter Agreements rendered those contracts void,
Ortiz argued that
(i) a violation of the Texas Disciplinary Rules of Professional
Conduct does not give rise to a private cause of action, and
12
(ii) the Bank Parties could not establish that they relied on
Donovan's failure to inform them of the lawsuit because their
attorney's actual knowledge of the lawsuit was imputed to them, and
because the lawsuit was filed as a matter of public record.
(f) In a supplement to the summary-judgment motion, Ortiz asserted
that the evidence conclusively showed that National City breached the
Deed of Trust, and thus, National City was liable for breach-of-contract
damages and attorney's fees in an unspecified amount.
The Bank Parties responded that "[t]he Letter Agreements represent a release of
liability which requires consideration," and that "[t]he only consideration possible for the
Letter Agreements would be [Ortiz's] ratification of the foreclosure." They argued that
because Ortiz moved to set aside the foreclosure, 3 there was no consideration. The Bank
Parties had stated in their pleadings that the Letter Agreements were ambiguous, and
although they denied in their summary-judgment response that the Letter Agreements
were ambiguous, they nevertheless argued that if the agreements were ambiguous, then
the ambiguity should be construed against Ortiz because his attorney drafted the letters.
In addition, they argued that because Ortiz circumvented the Bank Parties' counsel in
violation of the Texas Disciplinary Rules of Professional Conduct in order to obtain the
Letter Agreements, there was at least a question of fact as to the parties' intentions. As
for Ortiz's breach-of-contract claim, the Bank Parties asserted that as a result of Ortiz's
repudiation and material breach of contract by failing to make payments when due, they
were discharged from performing under the contract. They further asserted that Ortiz
failed to plead or prove damages from the alleged breach.
In April 2009, the trial court granted Ortiz's partial summary-judgment motion
without stating the grounds for the ruling; however, the trial court allowed the Bank
Parties to amend their pleadings to assert claims for all amounts due "under the Deed of
Trust." Ortiz then moved for summary judgment again, arguing that the Letter
Agreements were express waivers of all claims against him, and that at the time the Bank
3
Two years after the Letter Agreements were signed, the trial court set aside the sale because the
required foreclosure notices were sent to the wrong address.
13
Parties executed the agreements, they were aware of Ortiz's lawsuit challenging the
foreclosure. The Bank Parties again asserted that the Letter Agreements were releases
that were unenforceable due to the absence of consideration, or alternatively, that the
consideration for the releases was Ortiz's ratification of the foreclosure.
On June 14, 2010, the day before the start of the jury trial in this case, the trial
court issued an order providing in pertinent part as follows:
The Court has reviewed the following pleadings: Defendants'
Motion for Partial Summary Judgment on 'their Declaratory Judgment
Claim and Plaintiffs Motion for Summary Judgment as to Defendant's
Counterclaims and as to Plaintiffs Declaratory Judgment Claim. After
review of the foregoing pleadings, all responses, and arguments made
during the Thursday June 3, 2010 pre-trial conference[, t]he Court enters
the following findings and Orders:
Both Motions are Granted in Part and Denied in Part.
The Court finds,
1. That the Letter Agreements making basis [sic] of the motions
lack consideration, and accordingly are not valid contracts to be enforced
for all purposes.
2. That the portion of the afore-mentioned Letter Agreements
concerning the Note on the subject property is a valid agreement to
release/waive Plaintiffs obligation on the Note, under the tenants [sic] of
Texas Business and Commerce Code § 3.604 and as of the date of the
Letter Agreements.
It is ORDERED, that [the Bank Parties] are entitled to take nothing
for any claim arising from the Note mentioned in the Letter Agreements.
It is ORDERED, that [the Bank Parties] are entitled to pursue claims
as to the Deed of Trust on the subject property.
The basis for the trial court's ruling is stated in its "findings." As we previously
have explained, "If summary judgment is proper, there are no facts to find and the legal
conclusions have already been stated in the motion and the response." Golden v.
McNeal, 78 S.W.3d 488, 495 (Tex. App.-Houston [14th Dist.]2002, pet. denied) (citing
14
IKE Indus. (Nigeria) Ltd. v. Pro-Line Corp., 938 S.W.2d 440, 441 (Tex. 1997)). Thus,
"[t]he trial court should not make, and the appellate court cannot consider, such findings
and conclusions in connection with a summary judgment." Id Here, however, the trial
court stated in its final judgment "that all partial and/or interlocutory judgments
heretofore granted in this case are hereby made final and incorporated into this Final
Judgment." In light of the pleadings requesting a declaratory judgment on the legal effect
of the Letter Agreements, we construe the trial court's "findings" incorporated into the
final judgment as the requested declaration.
Summary judgments may only be granted upon grounds expressly asserted in the
summary-judgment motion. TEX. R. C!V. P. 166a(c); G & H Towing Co. v. Magee, 347
S.W.3d 293, 297 (Tex. 2011) (per curiam). Here, however, the trial court ruled based on
grounds that were not properly before it. Thus, we conclude that the trial court erred in
granting Ortiz's motions for summary judgment concerning the Bank Parties' claims
under the Note because the rulings were not supported by grounds raised in the motions.
a. The trial court erred in granting partial summary judgment on
a statutory ground that was not encompassed in Ortiz's
summary-judgment motions.
At a pretrial conference on June 3, 2010, less than two weeks before trial, Ortiz
argued for the first time that the Letter Agreements were governed by a provision in this
state's codification of the Uniform Commercial Code. During the hearing, Ortiz argued
that the Letter Agreements were enforceable even in the absence of consideration because
Texas Business and Commerce Code section 3.604 provides that "[a] person entitled to
enforce an instrument, with or without consideration, may discharge the obligation of a
party to pay the instrument ... by agreeing not to sue or otherwise renouncing rights
against the party by a signed record." TEX. Bus. & COM. CODE ANN.§ 3.604(a)(2) (West
Supp. 2012). No such grounds for summary judgment were presented in his written
summary-judgment motions. Although Ortiz argues on appeal that this basis for
judgment was properly before the trial court based on the waiver arguments presented in
his summary-judgment motions, those arguments were based solely on the common law,
15
as can be seen by the authorities he cited.
Ortiz argued in his summary-judgment motions that the Letter Agreements were
express waivers for which no consideration was required. In support of this position, he
cited cases showing that, under the common law, waiver can be express or can be
established through a parties' actions. See, e.g., Motor Vehicle Bd. of Tex. Dep't of
Transp. v. El Paso Indep. Auto. Dealers Ass 'n, Inc., 1 S.W.3d 108, 111 (Tex. 1999) (per
curiam) ("Although waiver is ordinarily a question of fact, when the facts and
circumstances are admitted or clearly established, the question becomes one of law.");
Tenneco Inc. v. Enter. Prods. Co., 925 S.W.2d 640, 643--44 (Tex. 1996) (explaining that
although "[w]aiver ordinarily is a question of fact," it becomes a question of law when
"the facts and circumstances are admitted or clearly established," and holding that
testimonial admissions proved waiver as a matter of law); Sun Exploration & Prod. Co.
v. Benton, 728 S.W.2d 35, 37 (Tex. 1987) (explaining that "the waiver of a condition
precedent may be inferred from a party's conduct").
Although Ortiz characterized the Letter Agreements as express waivers for which
no consideration was required, the parties were already in litigation with one another;
thus, Ortiz was asking the trial court, in effect, to treat the Letter Agreements as releases.
A release is a writing providing that a duty or obligation owed to one party to the release
is discharged immediately. See Nat 'I Union Fire Ins. Co. of Pittsburg, Pa. v. Ins. Co. of
N Am., 955 S.W.2d 120, 127 (Tex. App.-Houston [14th Dist.] 1997), aff'd sub nom.
Keck, Mahin & Cate v. Nat'! Fire Ins. Co., 20 S.W.3d 692 (Tex. 2000); RESTATEMENT
(SECOND) OF CONTRACTS § 284 (1981). A release of a claim or cause of action
extinguishes the claim or cause of action. Dresser Indus., Inc. v. Page Petroleum, Inc.,
853 S.W.2d 505, 508 (Tex. 1993). But, none of the grounds expressly presented in
Ortiz's summary-judgment motions or replies addresses the Bank Parties' summary-
judgment responses that the Letter Agreements are releases for which consideration is
required. See US. Fire Ins. Co. v Republic Nat'/ Life Ins. Co., 602 S.W.2d 527, 529-30
(Tex. 1980) (release requires consideration); Torchia v. Aetna Cas. & Sur. Co., 804
S.W.2d 219,223 (Tex. App.-El Paso 1991, writ denied) (same); Leonardv Texaco, Inc.,
16
422 S.W 2d 160, 165 (Tex. 1967) (settlement agreement requires consideration). See
also McLernon v. Dynegy, Inc., 347 S.W.3d 315, 335 (Tex. App.-Houston [14th Dist.]
2011, no pet.) ("Generally, a contract must be supported by consideration to be
enforceable."). Cf Pate v. Eversole, No. 14-03-00250-CV, 2004 WL 582319, at *1 n.l
(Tex. App.-Houston [14th Dist.] Mar. 25, 2004, pet. denied) (mem. op.) (settlement
agreement concerning amount due under promissory note was supported by consideration
in the form of a promise to postpone the foreclosure sale). In particular, Ortiz did not
contend that there is a statutory exception to the common-law rule that a release requires
consideration.
The common-law arguments in Ortiz's motion cannot support summary-judgment
based on the Uniform Commercial Code because the U.C.C. "preempts principles of
common law and equity that are inconsistent with either its provisions or its purposes and
policies."' AMX Enters., Inc. v. Bank One, NA., 196 S.W.3d 202, 207 (Tex. App.-
Houston [1st Dist.] 2006, pet. denied) (quoting TEX. Bus. & COM. CODE ANN. § 1.103
cmt. 2). If, as Ortiz belatedly argued, section 3.604 rendered the Letter Agreements
enforceable in the absence of consideration, then that provision conflicts with the
common law that a release requires consideration. We then could not read Ortiz's motion
for summary judgment based on the common law to encompass an argument that he is
entitled to judgment based on a statute that preempts the common law. On the other
hand, if section 3.604 does not apply to releases when, as here, claims between the parties
are being actively litigated, then the statute and the common law do not conflict because
the statute does not apply at all. Ortiz then would be not entitled to summary judgment
based on the common law because there was no consideration for the release. 4
4
In his responsive brief, Ortiz contends that the there is a legal presumption that a written
agreement was supported by consideration, and thus, the Bank Parties bore the burden to respond to the
summary-judgment motion with evidence rebutting the presumption. This is incorrect. As the summary-
judgment movant, Ortiz bore the burden in the trial court to establish his right to summary judgment as a
matter of law. Because the Bank Parties pleaded the lack of consideration, Ortiz could not prove his right
to judgment as a matter of law unless he conclusively established that the Letter Agreements were
supported by consideration, or that no consideration was required. See Brocail v. Detroit Tigers, Inc., 268
S.W.3d 90, 109 (Tex. App.-Houston [14th Dist.] 2008, pet. denied) (movant for traditional summary-
17
b. The grounds expressly presented in the motions also do not support
summary judgment.
Because the Letter Agreements are ambiguous, we also cannot affirm the
summary-judgment rulings based on the grounds expressly raised in the summary-
judgment motions. See Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 626 (Tex.
1996) (explaining that even when the trial court identifies the basis for its summary-
judgment ruling, the appellate court may consider other summary-judgment grounds that
have been preserved for review). 5 When we interpret a written contract, "our primary
concern is to ascertain and give effect to the intent of the parties as expressed in the
contract." In re Serv. Corp. Int'l, 355 S.W.3d 655, 661 (Tex. 2011) (orig. proceeding)
(per curiam). To understand the parties' intent as expressed in the agreement, it is
essential that courts examine the contract as a whole in light of the circumstances present
when the contract was entered. Anglo-Dutch Petroleum Int 'l, Inc. v. Greenberg Peden,
P.C., 352 S.W.3d 445, 450, 451 (Tex. 2011); David J. Sacks, P.C. v. Haden, 266 S.W.3d
447, 451 (Tex. 2008) (per curiam); Columbia Gas Transmission Corp. v. New Ulm Gas,
Ltd., 940 S.W.2d 587, 589 (Tex. 1996)). No single provision is given controlling effect;
instead, we consider all the provisions in all parts of the contract. J.M Davidson, Inc. v.
Webster, 128 S.W.3d 223, 229 (Tex. 2003). We also bear in mind the particular business
activity to be served, and when possible and proper to do so, we avoid a construction that
is unreasonable, inequitable, and oppressive. Frost Nat 'l Bank v. L & F. Distribs., Ltd.,
165 S.W.3d 310, 312 (Tex. 2005) (per curiam); US. Denro Steels, Inc. v. Lieck, 342
S.W.3d 677,682 (Tex. App.-Houston [14th Dist.]2011, pet. denied). If the contract is
judgment is required to disprove allegations pleaded by nomnovant that would defeat summary
judgment). On appeal, the smnmary-judgment movant still bears the burden of showing that there is no
genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Rhone-
Poulenc, Inc. v. Steel, 997 S.W.2d 217,223 (Tex. 1999).
5
The Bank Parties raised the issue of ambiguity in response to the first summary-judgment
motion, but not the second motion; however, the trial court stated in its order that it considered both
summary-judgment motions and "all responses." The trial judge submitted a jury question on intent. In
addition, the parties before us have presented arguments about whether the Letter Agreements
unambiguously expressed an intent to waive or release all of the Bank's claims, or conversely, whether
there was a question of fact about the Bank's intent.
18
subject to two or more reasonable interpretations after applying the pertinent rules of
construction, then the contract is ambiguous. XCO Prod. Co. v. Jamison, 194 S.W.3d
622, 627 (Tex. App.-Houston [14th Dist.] 2006, pet. denied). A contract is not
ambiguous if it can be given a certain or definite meaning as a matter of law. Universal
Health Servs., Inc. v. Renaissance Women's Group, P.A., 121 S.W.3d 742, 746 (Tex.
2003). The determination that a contract is or is not ambiguous is decided by the court as
a matter oflaw. Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996).
After reviewing the express language of the Letter Agreements in light of the
circumstances present when they were signed and the business activity they were
intended to serve, we conclude that there is more than one reasonable interpretation of the
scope and conditions of the release. Although parts of the Letter Agreements use broad
and sweeping language, other parts of the agreement identify the release as the result of
the Bank Parties' foreclosure of the Birdsall Property in 2006. Thus, there is a question
of fact as to whether the Letter Agreements express an intent to release Ortiz from all
claims related to the property and to his indebtedness, or only an intent to release him
from the indebtedness remaining after the sale of the Property.
In his letter of June 23, 2006, Ortiz's attorney Michael Donovan wrote as follows:
This Agreement shall confirm that Lender has completed and will file an
Internal Revenue Service Form 1099-A in connection with its foreclosure
on the above-referenced property. As a result, it does not intend to and
shall not file or pursue any lawsuit or other legal proceeding against
Borrower for any deficiency or otherwise. Lender agrees to and does fully
release Borrower from any and all obligations and liability that Borrower
may have or may have had to Lender, and Lender waives any and all
demands and claims regarding any such obligation or liability. It is agreed
that no further sums will be made or owed by Borrower, and no further
sums will be demanded or litigated by Lender.
(emphasis added). The letter was signed and returned by an employee of HLS, together
with the requested information regarding Ortiz's Form 1099-A.
We find it significant that the Form 1099-A forms a part of the Letter Agreements.
19
Under federal income-tax laws, one who, in connection with his trade or business, lends
money secured by property must provide a borrower with a Form 1099-A if the lender
"in full or partial satisfaction of any indebtedness, acquires an interest in any property
which is security for such indebtedness .... " 26 U.S.C. § 6050J(a)(1). 6 As a result of
the initial foreclosure, National City acquired an interest in the property on June 6, 2006
by purchasing it for $351,356.77; thus, it was required to provide Ortiz with a Form
1099-A. At that time, the amount of Ortiz's indebtedness exceeded both the purchase
price and the home's value; thus, there was an unanswered question as to whether
National City would treat the foreclosure as full satisfaction of Ortiz's indebtedness, or
only as partial satisfaction of the debt. In other words, there was an open question of
whether National City would pursue a judgment against Ortiz for the deficiency, i.e., the
difference between the amount of indebtedness and the value of the property. See Kolbo
v. Blair, 379 S.W.2d 125, 130 (Tex. Civ. App.-Corpus Christi 1964, writ refd n.r.e.)
("Deficiency is that part of the secured obligation which remains after crediting it with
the net proceeds accruing from a valid sale of the security by the creditor."). In response
to the letter, HLS provided Ortiz with the information about the foreclosure to be
included on the Form 1099-A, and in this material, HLS identified the "debt outstanding"
as $537,207.83. In the Letter Agreement, HLS agreed that "as a result" of the
foreclosure, it would not pursue "further" sums from Ortiz. Thus, drawing all inferences
in favor of the summary-judgment respondents, and considering the circumstances
present at the time the Letter Agreement was executed, the document reasonably can be
read as expressing HLS 's intent to release only the deficiency by accepting the property
as full satisfaction of the debt. On the other hand, HLS stated that it would not pursue
any legal proceeding "for any deficiency or otherwise." This language reasonably could
be read as an expression of the intent to release every claim related to the property. Thus,
6
See a/so INTERNAL REVENUE SERV., DEP'T OF THE TREASURY, 2006 INSTRUCTIONS FOR FORMS 1099-A
AND 1099-C, Cat. No. 27991U, available at http://www.irs.gov/pub/irs-prior/il099ac--2006.pdf ("File
Form I 099-A, Acquisition or Abandonment of Secured Property ... for each borrower if you lend money
in connection with your trade or business and, in full or partial satisfaction of the debt, you acquire an
interest in property that is security for the debt, or you have reason to know that the property has been
abandoned.") (emphasis added).
20
the agreement is ambiguous.
This ambiguity was not resolved by the second Letter Agreement, which provided
as follows:
Thank you for providing a copy of the 1099-A and executing the
letter agreement I sent regarding the above-referenced matter. It has come
to my attention that National City Bank of Indiana was the current
mortgagee and that First Franklin Financial Corporation was the original
mortgagee. The letter agreement did not specifically reference National
City Bank of Indiana. 171
Out of an abundance of caution, I am requesting that you please
confirm, by signing where indicated below, that all of the terms and
conditions of the June 23, 2006 letter agreement also apply to National City
Bank of Indiana, as the Lender, and that National City Bank of Indiana also
releases and waives any and all actual and potential demands and claims
regarding any obligations or liabilities of the Borrower, Albert Ortiz, in
connection with the above-referenced property, including the note and deed
of trust associated with such property.
This letter incorporates "all of the terms and conditions" of the earlier letter-
including those that made the first letter ambiguous. Moreover, the proposed amendment
is ambiguous because it reasonably can be read as an agreement merely to add another
party to the original agreement, or as an agreement expanding the scope of the claims
released.
A narrow interpretation is suggested by the use of the phrase, "out of an
abundance of caution." When a person states that he is taking some action "out of an
abundance of caution," he saying, in effect, that the action likely is unnecessary, but is
employed to remove any uncertainty. He is saying, in effect, "I think that I already have
taken sufficient steps to achieve the same result, but I am taking this additional step to
remove any doubt." See e.g., Fort Stewart Sch. v. Fed. Labor Relations Auth., 495 U.S.
641,646, 110 S. Ct. 2043,2047, 109 L. Ed. 2d 659 (1990) (explaining that "technically
7
In the first letter, Donovan incorrectly identified the "Lender" as "First Franklin Financial
Corporation I National City Home Loan Services, Inc."
21
unnecessary" provisions sometimes are "inserted out of an abundance of caution-a
drafting imprecision venerable enough to have left its mark on legal Latin (ex abundanti
cautela)."); In re City of Georgetown, 53 S.W.3d 328, 335-36 (Tex. 2001) (orig.
proceeding) (explaining that although statutory redundancies were unnecessary, the
legislature "repeated itself out of an abundance of caution, for emphasis, or both");
Wright v. Macdonell, 88 Tex. 140, 146, 30 S.W. 907, 909 (1895) ("[I]t is not unusual for
the parties to a contract, out of abundance of caution, to express that which the law would
have implied .... ").
A narrow interpretation also is implied by the use of the word, "confirm." "[T]o
confirm is to establish as true that which was doubtful or uncertain." WEBSTER'S NEW
WORLD COLLEGE DICTIONARY 292 (3d ed. 1996). The use of this word suggests that the
intent was to verify that the same terms present in the first Letter Agreement apply to
National City, not to enlarge the scope of the release.
On the other hand, one reasonably could read the second paragraph of the Letter
Agreement as expressing an intent to agree to two things: first, to confirm that the terms
of the first letter agreement apply to National City, and second, to expand the scope of the
release. This interpretation is based on the statement that National City "also releases
and waives any and all actual and potential demands and claims" against Ortiz. Because
both of these interpretations are reasonable, the second Letter Agreement is ambiguous.
The ambiguity of the Letter Agreements precluded summary judgment.
The trial court took one step to partially correct this error. Despite its
interlocutory rulings on the partial motions for summary judgment, the trial court
recognized that the Letter Agreements were ambiguous before the case was submitted to
I
the jury, and included in the charge a question about the meaning of the Letter
Agreements. See Bowden v. Phillips Petroleum Co., 247 S.W.3d 690, 705 (Tex. 2008)
("[B]y sending the interpretation of the [agreements] to the jury, the trial court implicitly
held that the [agreements] were ambiguous."). The question was presented as follows:
22
"With respect to the Letter Agreements, did HLS or National City validly agree that
Albert Ortiz would receive ownership and possession of the Birdsall Property without
obligation for further payments on the Note, and that HLS and National City would not
pursue any claims, lawsuits and/or obligations that they could have asserted against
Albert Ortiz?" The jury answered, "No." 8 In effect, the jury found that in executing the
Letter Agreements, the Bank Parties did not agree to release Ortiz from any further
obligation to make payments on the Note if he received ownership and possession of the
Birdsall Property. This finding was supported by the evidence in the case. At trial,
HLS's representative testified that the intent of the agreements was to release the
deficiency. Ortiz's lawyer testified that he wanted to ensure that Ortiz did not owe any
more money to the bank. After receiving the verdict, however, the trial court reversed its
implicit holding that the Letter Agreements were ambiguous, and instead reinstated its
earlier erroneous rulings on the summary-judgment motions and incorporated them into
the final judgment. In a ruling that appears to have been based in part on the
interlocutory summary judgments, the trial court further declared in the final judgment
that Ortiz had no past, present, or future obligations under the Note and the Deed of
Trust, a declaration that is contrary to the jury's finding, which the trial court apparently
disregarded. 9
8
This question presents a mixed question of law and fact (i.e., the legal detennination of whether
the contract was valid and the factual determination of the Bank's intent). Mixed questions of law and
fact are appropriate for the factfinder to decide. See, e.g., Tony Gullo Motors, I, L.P. v. Chapa, 212
S.W.3d 299, 313 (Tex. 2006); Valence Operating Co. v. Anadarko Petroleum Corp., 303 S.W.3d 435,
441 (Tex. App.-Texarkana 2010, no pet.). If the trial court asks the jury to make a factual finding on a
matter essential to a claim or defense, the jury's answer is not rendered immaterial merely because the
question may have been defective. Spencer v. Eagle Star Ins. Co. of Am., 876 S.W.2d 154, 157 (Tex.
1994). In such a situation, the trial court may grant a motion for a new trial, but it may not disregard the
jury's finding. Id.
9
The trial court did not expressly state that it disregarded any findings, but this is apparent from
other language in judgment and from the result. In the final judgment, the trial court stated that "the
motion of [Ortiz] for judgment on the verdict is GRANTED in part and that the motion of Defendants for
judgment on the verdict is DENIED in part." Ortiz's motion actually was titled, "Plaintiff's Motion for
Judgment on the Verdict with Motion to Disregard Immaterial Jury Finding," and the Bank Parties'
motion was called "Defendants' Motion for Entry of Judgment' and to Disregard Certain Jury Findings."
(emphasis added). Although the trial court refers to both motions only as motions for judgment, the
23
We therefore conclude that the trial court erred in granting summary judgment and
in incorporating those rulings in the judgment.
c. The trial court's erroneous summary-judgment rulings were neither
waived nor harmless.
On appeal, Ortiz asserts that the Bank Parties waived any error by the trial court in
considering summary-judgment grounds that were not presented in the motion but were
raised orally at the summary-judgment hearing. He points out that the Bank Parties failed
to object that the issue was untimely, but no such objection was necessary. See
McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 342 (Tex. 1993) ("Even if the
non-movant fails to except or respond, if the grounds for summary judgment are not
expressly presented in the motion for summary judgment itself, the motion is legally
insufficient as a matter of law."). Ortiz also argues that because the trial court permitted
the parties to address these grounds, we should presume that the trial court gave him
leave to amend his summary-judgment motion; however, he has not identified an
amended summary-judgment motion in the record.
Ortiz further contends that even if the trial court erred in granting the summary
judgments based on section 3.604, the error was harmless because the Bank Parties had
an opportunity to brief the issue and the trial court fully considered the brief. But,
summary-judgment grounds must be "expressly set out in the [summary-judgment]
motion or in an answer or any other response." TEX. R. Crv. P. 166a(c). The Bank
Parties' brief was not a "motion," and it was not an "answer or response" to a summary-
judgment motion. Instead, it was a response to an oral argument, and summary judgment
on a ground that is not expressly presented in the written motion, answer, or response is
not properly before the trial court simply because it is addressed in a brief. McConnell,
substance of the ruling demonstrates that the trial court granted the portion of Ortiz's motion in which he
asked the trial court to disregard the jury finding interpreting the Letter Agreements, and denied the
portion of the Bank Parties' motion in which they stated, "In accordance with the jury's answer to
Question 6 in the negative, the court should enter a judgment allowing National City to foreclose under
the Deed of Trust."
24
858 S.W.2d at 341.
We also disagree with Ortiz's contention that the rulings, even if erroneous, were
harmless. He reasons that the same result reached by the trial court was reached by the
jury, because the jury found that National City breached the Deed of Trust before Ortiz
did, and thus, failed to assess any monetary damages for Ortiz's breach. But as we have
previously discussed, the evidence supporting this finding was based on legally
insufficient evidence. Moreover, the trial court did not only fail to award monetary
damages; it also denied the claim for judicial foreclosure, a result that is not supported by
the jury's verdict. We further note that Ortiz's statutory argument was raised after the
time for amending pleadings had passed, but the trial court denied the Bank Parties leave
to amend their answers to plead mistake-even though this is a defense to renunciation of
a debt under the statute. See Gibraltar Sav. Ass'n v. Watson, 624 S.W.2d 650, 653 (Tex.
App.-Houston [14th Dist.] 1981, no writ). Finally, because the Letter Agreements are
ambiguous, summary judgment based on section 3.604 was not just procedurally
incorrect; it was substantively incorrect. See Burton v. Nat 'l Bank of Commerce ofDall.,
679 S.W.2d 115, 118 (Tex. App.-Dallas 1984, no writ). In Burton, a bank sued a
borrower for the deficiency remaining on a promissory note after the bank sold the
collateral securing the loan. Id. at 116. Relying on the predecessor to the statute at issue
here, the borrower argued that the bank waived the right to a deficiency judgment, and
the bank argued that this was not its intent. Id. at 118. 10 The court concluded that
determining the bank's intent was a question of fact to be resolved by the jury. We reach
the same result here.
As the foregoing shows, the erroneous summary-judgment rulings were one of
several ways in which the trial court addressed the interpretation of the Letter
Agreements. We turn now to the trial court's ruling disregarding the jury's finding on
10
The substantive text of Texas Business and Commerce Code section 3.604 formerly appeared
at section 3.605. See Act of May 19, 1965, 60th Leg., R.S., ch. 785, §I, Sec. 3-605, 1965 TEX. GEN.
LAWS I, 80; Act of May 25, 1967, 60th Leg., R.S., ch. 785, §I, Sec. 3.605, 1967 TEX. GEN. LAWS 2343,
2438; Act of May 28, 1995, 74th Leg., R.S., ch. 921, §I, Sec. 3.604, 1995 TEX. GEN. LAWS 4582,4606.
25
that issue.
2. The trial court erred in disregarding the jury's finding interpreting the
Letter Agreements.
A trial court may disregard a jury finding only if it is unsupported by evidence or
if the issue is immaterial. Spencer v. Eagle Star Ins. Co. of Am., 876 S.W.2d 154, 157
(Tex. 1994); Lee v. Hasson, 286 S.W.3d 1, 17 (Tex. App.-Houston [14th Dist.] 2007,
pet. denied). A question is immaterial when it should not have been submitted, or when
it was properly submitted but has been rendered immaterial by other findings. Spencer,
876 S.W.2d at 157. A jury question also can be considered immaterial when its answer
cannot alter the effect of the verdict. City of Brownsville v. Alvarado, 897 S.W.2d 750,
752 (Tex. 1995); Hernandez v. Atieh, No. 14-06-00582-CV, 2008 WL 2133193, at *3
(Tex. App.-Houston [14th Dist.] May 20, 2008, no pet.) (mem. op.).
Here, Ortiz asserted that the trial court should disregard the jury's finding
interpreting the Letter Agreements for several reasons. We conclude, however, that none
of these arguments have merit.
First, Ortiz asserted that the finding would not change the effect of the verdict and
that it does not concern a controlling issue. But, Ortiz's argument that the Bank Parties
had released all claims for amounts due under the Note and the Deed of Trust was an
affirmative defense to their claim for judicial foreclosure. In rejecting Ortiz's
interpretation of the agreements, the jury rejected his affirmative defense. This finding
on a controlling issue therefore made a difference in the effect of the verdict.
Ortiz also argued that the finding that the Bank Parties did not agree to forego all
claims under the Deed and the Note was rendered immaterial by the jury's finding that
Ortiz owes nothing under the Deed of Trust. This argument is factually incorrect; the
jury did not answer the question regarding the amount due under the Deed of Trust,
because the jury erroneously concluded that National City breached the Deed of Trust
first and National City's damage issue was predicated on an answer that Ortiz breached
26
first.ll The absence of a finding is not a finding.
Finally, Ortiz asserted that "the jury took into consideration and accounted for any
amounts it may have found were owed by [Ortiz] in its award of damages to [him]." We
presume, however, that the jury followed the instructions in the charge. Columbia Rio
Grande Healthcare, L.P. v. Hawley, 284 S.W.3d 851, 862 (Tex. 2009). Here, each of the
questions regarding Ortiz's actual damages was accompanied by the instruction, "Do not
increase or reduce the amount in one answer because of your answer to any other
question about damages." The single question concerning exemplary damages to be
assessed against HLS was accompanied by a list of the factors to be considered, and this
list did not include consideration of the amount Ortiz owed to National City under the
Deed of Trust.
Because no valid basis was asserted for disregarding the jury's finding interpreting
the agreement, we conclude that the trial court reversibly erred in partially granting
Ortiz's post-verdict motions and denying the Bank Parties' post-verdict and post-
judgment motions concerning this question. Although Ortiz used a variety of motions in
asserting that the Letter Agreements prevented the Bank Parties from pursuing any claims
against him, we have examined each of the challenged rulings and concluded that none
are supported by the record. We therefore sustain the Bank Parties' first issue.
The Bank Parties argued that if we sustained this issue, then we should render
judgment in favor of National City in the amount of $1,012,982.90, which they state is
the amount of the indebtedness established by the uncontroverted evidence. Because we
do not consider the record to be so clear that the amount of Ortiz's indebtedness is
conclusively established, we conclude that remand is necessary to correct the error and
11
The parties submitted the breach question in accordance with Mustang Pipeline Co. v Driver
Pipeline Co., 134 S.W.3d 195 (Tex. 2004) and Texas Pattern Jury Charge 101.2 and then further
conditioned damages so that jury would make a damage finding only for the party who did not breach
first. Practitioners should be careful not to over-predicate, especially if one party asserts a prior material
breach as a matter oflaw.
27
establish the amount owed.
The trial court's rulings created an artificial distinction between the Note and the
Deed of Trust; the disjunction between the two was so pronounced that there were
different jury questions proposed for each, and the trial court submitted one question
(predicated on a finding that a particular party breached first) and refused one of the
questions (without such a predication). But, "in order to ascertain the entire agreement
between contracting parties, separate documents executed at the same time, for the same
purpose, and in the course of the same transaction are to be construed together." See Jim
Walter Homes, Inc. v. Schuenemann, 668 S.W.2d 324, 327 (Tex. 1984) (citing Jones v.
Kelley, 614 S.W.2d 95 (Tex. 1981)); Nevels v. Harris, 129 Tex. 190, 195, 102 S.W.2d
1046, 1048 (1937) (deed of trust and notes for principal and interest must be treated as
one contract because the borrowers executed them at the same time and for the same
purpose of obtaining a loan secured by real property). National City's claims cannot be
parsed fairly into claims under the Note and claims under the Deed of Trust, because the
two documents form a single contract. See TEX. R. APP. P. 44.1(b) ("If the error affects
part of, but not all, the matter in controversy and that part is separable without unfairness
to the parties, the judgment must be reversed and a new trial ordered only as to the part
affected by the error.") (emphasis added). Both must be considered on remand in
retrying National City's claims for breach of contract and judicial foreclosure.
But, just as National City's breach-of-contract claim must be retried to treat the
Note and the Deed of Trust as a single contract, so 'too must Ortiz's breach-of-contract
claim against National City be retried, because the cross-claims are not separable without
unfairness to the parties. Moreover, the parties must be allowed to assert defenses to one
another's claims; thus, for example, if Ortiz asserts that by executing the Letter
Agreements, National City released of all of its claims without regard to whether the
foreclosure was set aside, then the jury must be allowed to determine, as a question of
fact, whether this was National City's intent. And, just as Ortiz may assert affirmative
defenses to National City's claims, National City may assert any counter-affirmative
28
defenses, such as mistake.
C. Is Judicial Foreclosure Time-Barred?
In response to the Bank Parties' counterclaim to judicially foreclose on the
Birdsall Property, Ortiz raised the affirmative defense that the claim was time-barred. He
moved unsuccessfully for a directed verdict on this basis, and his motion to modify the
judgment on the same ground was overruled by operation of law. On appeal, he contends
that this defense has been conclusively established, and thus, the trial court erred in
failing to grant either motion. We address this issue because the resolution of this
question of law affects the issues to be addressed on remand.
In appealing the denial of a motion for directed verdict, Ortiz in effect challenges
the legal sufficiency of the evidence. See Fein v. R.P.H, Inc., 68 S.W.3d 260, 265 (Tex.
App.-Houston [14th Dist.] 2002, pet. denied). The test for legal sufficiency is the same
for summary judgments, directed verdicts, judgments notwithstanding the verdict, and
appellate no-evidence review. City ofKeller, 168 S.W.3d at 823. Where, as here, a party
moves for a directed verdict on an issue on which he bore the burden of proof, he must
demonstrate that that he conclusively proved all facts necessary to establish his right to
the requested verdict. See Montgomery v. Byrd, No. 14-07-01015-CV, 2009 WL
2589431, at *3 (Tex. App.-Houston [14th Dist.] Aug. 25, 2009, no pet.) (mem. op.).
Ortiz points out that on December 21, 2005, the Bank Parties sent Ortiz a notice
that the debt had been accelerated, but the letter was mailed to the wrong address. The
Bank Parties faxed the same letter to Ortiz's attorney on January 13, 2006. Ortiz
contends that the cause of action for judicial foreclosure accrued on one of these dates.
Because National City did not file its judicial-foreclosure claim until February 3, 2010,
which is more than four years after each of these dates, Ortiz contends that the claim is
time-barred. See TEX. C!V. PRAC. & REM. CODE ANN. § 16.035(a) (West 2002) ("A
person must bring suit for the recovery of real property under a real property lien or the
foreclosure of a real property lien not later than four years after the day the cause of
action accrues.").
29
Where, as here, a deed of trust contains an optional debt-acceleration clause, a
cause of action for judicial foreclosure accrues when the note holder actually exercises its
option to accelerate. Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 566
(Tex. 2001); CA Partners v. Spears, 274 S.W.3d 51, 65 (Tex. App.-Houston [14th
Dist.]2008, pet. denied). "Effective acceleration requires two acts: (1) notice of intent to
accelerate, and (2) notice of acceleration." Holy Cross, 44 S.W.3d at 566. "Notice of
intent to accelerate is necessary in order to provide the debtor an opportunity to cure his
default prior to harsh consequences of acceleration and foreclosure." Ogden v. Gibraltar
Sav. Ass'n, 640 S.W.2d 232, 234 (Tex. 1982). A notice that the debt actually has been
accelerated is ineffective if it was not preceded by proper notice of intent to accelerate the
debt. Jasper Fed. Sav. & Loan Ass'n v. Reddell, 730 S.W.2d 672, 674 (Tex. 1987). In
addition, both the Note and the Deed of Trust in this case provided that a notice of
acceleration "shall provide a period of not less than 30 days from the date the notice is
given in accordance with Section 15 [of the Deed of Trust] within which Borrower must
pay all sums secured by [the Deed of Trust]." Under.the terms of Section 15 of the Deed
of Trust, all notices were to be mailed or otherwise delivered to "Borrower's notice
address," which was defined to be "the Property Address unless Borrower has designated
a substitute notice address by notice to Lender."
At no time before accelerating the debt did the Bank Parties provide proper notice
to Ortiz of the intent to accelerate. According to the undisputed testimony presented at
trial, Ortiz properly notified the Bank Parties that all required notices to him were to be
sent to his business address. The Bank Parties failed to send the required notice of intent
to accelerate and notice of acceleration to the specified address, and instead mailed the
notices to the address of the Birdsall Property. On January 13, 2006, the attorney for the
Bank Parties faxed to Ortiz's attorney copies of the following documents: (1) a default
letter dated November I, 2005 stating that the debt would be accelerated if it was not
brought current by December 1, 2005; (2) a notice of acceleration, dated December 21,
2005; (3) a file-stamped notice of the foreclosure sale scheduled to take place on
February 7, 2006, i.e., twenty-five days from the date of the fax; and (4) a "payoff quote
30
good through February 6, 2006," in which the total amount due from Ortiz was said to be
$490,882.19. All of this material was sent to Ortiz's attorney at the same time, after the
debt had been accelerated and less than 30 days before a scheduled foreclosure sale.
Thus, the cause of action for judicial foreclosure did not accrue on December 21, 2005 or
on January 13, 2006 as Ortiz contends, because there was no effective notice of
acceleration at either of these times. 12
Because Ortiz failed to establish conclusively that the judicial-foreclosure cause of
action accrued more than four years before the claim was filed, the trial court did not err
in denying Ortiz's motion for directed verdict. For the same reason, the trial court did not
abuse its discretion in failing to modify the judgment to specify that the judicial-
foreclosure claim is time-barred. We accordingly overrule Ortiz's fourth issue.
D. Lis Pendens
In Ortiz's petition for a writ of mandamus, he argued that the trial court clearly
abused its discretion by denying his motion to expunge the post-trial notice of lis
pendens. By statute, "[a] party to an action in connection with which a notice of lis
pendens has been filed may ... apply to the court to expunge the notice .... " TEX.
PROP. CODE ANN. § 12.007l(a)(l) (West Supp. 2012). "The court shall rule on the
motion for expunction based on the affidavits and counteraffidavits on file and on any
other proof the court allows." Id. § 12.007l(e). "The court shall order the notice of lis
pendens expunged if the court determines that . . . the claimant fails to establish by a
preponderance of the evidence the probable validity of the real property claim .... " Id.
§ 12.007l(c)(2).
In light of our determination of the issues presented in the Bank Parties' appeal
and "the probable validity of the real property claim," we cannot conclude that the trial
court abused its discretion in denying Ortiz's motion to expunge the notice of lis pendens.
12
Indeed, in a motion for summary judgment, Ortiz stated,
Ortiz never received ... a notice of intent to accelerate the Note before learning
that the Note had been actually accelerated and was being posted for sale. Thus, Ortiz
never received the opportunity to avoid acceleration, as required by law and ... the Deed
of Trust.
31
We accordingly deny Ortiz's petition for writ of mandamus. See TEX. R. APP. P.
44.1(a)(l) ("No judgment may be reversed on appeal on the ground that the trial court
made an error of law unless the court of appeals concludes that the error complained
of ... probably caused the rendition of an improper judgment .... ").
IV. CLAIMS AGAINST, HLS
In the remaining issue asserted in Ortiz's cross-appeal, he points out that he
presented three different theories of liability entitling him to damages from HLS for the
loss of his personal property, and the jury answered a damage question associated with
each theory. He argues that the trial court erred in awarding him the largest amount of
damages assessed by the jury for this injury, rather than awarding him the sum of all
three damage calculations for this loss. 13 Ortiz similarly asserts that he is entitled to
recover damages from HLS for the loss of use of the real property, even though the trial
court granted judgment against National City for that injury. As a result of our
disposition of the other issues in this case, Ortiz is partially correct.
Absent an election, the trial court is required to render judgment "so framed as to
give the party all the relief to which he may be entitled either in law or in equity." TEX.
R. CIV. P. 301. But, under the one-satisfaction rule, a claimant is entitled to only one
recovery for any damages suffered. Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 390
(Tex. 2000) (citing Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 7 (Tex. 1991)).
The rule applies when different parties commit the same act or when different acts cause
the same injury. !d. When a party tries a case on alternative theories of recovery and a
jury returns favorable findings on two or more theories, the prevailing party has a right to
a judgment on the theory that affords him the greatest or most favorable relief. Boyce
Iron Works, Inc. v. Sw. Bell Tel. Co., 747 S.W.2d 785,787 (Tex. 1988).
Ortiz contends that he is entitled to recover the sum of all of the damages found by
the jury for each injury under the various theories of liability submitted because the Bank
13
HLS has not appealed the portion of the judgment in which the trial court held it to be liable to
Ortiz for $100 in exemplary damages and $10,000 in actual •damages, which represents the maximum
amount found by the jury to be the fair market value of his personal property.
32
Parties (1) did not plead the one-satisfaction rule as an affirmative defense, (2) did not
object to the submission of more than one acceptable measure of his damages, and (3) did
not request a limiting instruction to prevent the possibility of a double recovery. No such
actions were required. Waite Hill Servs., Inc. v. World Class Metal Works, Inc., 959
S.W.2d 182, 184 (Tex. 1998) (per curiam); see also Tony Gullo Motors I, L.P. v. Chapa,
212 S.W.3d 299, 303 (Tex. 2006) ('"There can be but one recovery for one injury, and
the fact that ... there may be more than one theory of liability[] does not modify this
rule."' (alterations in original) (quoting Stewart Title Guar. Co., 822 S.W.2d at 8)).
Here, the jury found that Ortiz suffered two injuries: the loss of personal property,
measured by the property's fair market value, and the loss of the use of the real property,
measured as lost rental value. Because the one-satisfaction rule no longer applies to one
of these injuries, we discuss them separately.
A. Damages for Lost Personal Property
Ortiz asserted three different theories of liability for this injury, and the jury made
favorable findings for each of them. Under a negligence theory of liability, the jury
found that the fair market value of Ortiz's lost personal property was $10,000. Under
theories of conversion and trespass to personalty, the jury found that the fair market value
of the lost personal property was $1,500. The trial court rendered judgment against HLS
for $10,000 in actual damages, which is the largest amount of damages assessed by the
jury for this injury. Because an additional award for the same injury would be an
impermissible double recovery, we overrule Ortiz's second cross-issue as it pertains to
his damages for lost personal property.
B. Loss of the Use of Real Property
In the trial court, Ortiz alleged that National City's breach of contract and HLS's
trespass to real property caused him to lose the use of the Birdsall Property. The jury
agreed, and for each of these claims, the jury was asked to measure the damage by the
property's lost rental value. Under the breach-of-contract theory, the jury found that the
property's lost rental value was $100,000; under the trespass theory, the jury found that
the lost rental value was $77,000. After applying a $12,500 settlement credit from a
33
defendant who settled before trial, the trial court rendered judgment against National City
$87,500. The trial court did not render judgment against HLS for the damages for the
same injury, because this would have constituted a double recovery.
On appeal, Ortiz argues that he is entitled to recover the damages assessed by the
jury against HLS for loss of use of real property because the one-satisfaction rule does
not apply. The Bank Parties respond that Ortiz is not entitled to recover from HLS for
this damage because damages for the same injury were awarded against National City,
and thus, an additional award against HLS for loss of use of the real property would
constitute a double recovery. But, this is no longer the case. Because we have eliminated
Ortiz's recovery against National City for loss of use of his real property, the one-
satisfaction rule no longer applies to bar Ortiz's recovery for this injury from HLS.
We sustain this issue only as it pertains to the jury's finding that HLS caused Ortiz
$77,000 in loss-of-use damages as a result of its trespass to real property. To the extent
that Ortiz complains that the trial court erred in awarding him the greatest fair market
value found by the jury· for his lost personal property rather than awarding him an amount
equal to the sum of the jury's three personal-property fair market-value findings, we
overrule this issue. Because Ortiz is entitled to recover the highest amount that the jury
found HLS caused Ortiz for (1) loss of use of the real property and (2) loss of the fair
market value of his personal property, we modify the judgment to order that Ortiz recover
actual damages from HLS in the amount of $74,500 (i.e., $10,000 for personal-property
loss, plus $77,000 for loss of use of real property, minus the $12,500 settlement credit). 14
V. CONCLUSION
Regarding Ortiz's claims against National City, we hold that the evidence is
14
On appeal, Ortiz argued that the settlement credit should not have been applied as an offset to
any recovery for his breach-of-contract claim against National City. In response, the Bank Parties
correctly pointed out that Ortiz sued National City, HLS and Keystone, the settling party, for trespass to
real property. Moreover, Ortiz alleged that the Bank Parties were liable with Keystone because its acts or
omissions were committed as the Bank Parties' agent, and because the Bank Parties ratified, adopted, and
accepted the benefits of Keystone's actions. Ortiz does not contend that the settlement credit does not
apply to the real-property damages assessed against HLS for its trespass, and he points out that a
nonsettling defendant can claim a settlement credit for damages for which all joint tortfeasors are jointly
liable.
34
legally insufficient to support the finding that National City breached the Deed of Trust
before Ortiz did. Moreover, the Letter Agreements signed by National City's
representative are ambiguous; thus, Ortiz did not establish as a matter of law that
'
National City is barred from recovering amounts owed under the Note and the Deed of
Trust or from judicially foreclosing on the Property. Instead, there is a question of fact
regarding the parties' intentions. Ortiz also did not establish that National City's claims
for judicial foreclosure are time-barred. Although the trial court's rulings erroneously
divided the parties' breach-of-contract claims into claims under the Note and claims
under the Deed of Trust, the two documents must be construed as a single contract.
Because these parties' various breach-of-contract claims against one another are not
separable without unfairness to the parties, we must remand both of their contract claims
for retrial.
As for Ortiz's claims against HLS, we hold that the trial court did not err in
limiting Ortiz to one recovery for loss of the use of the real property, and one recovery
for the loss of his personal property; however, as a result of our conclusion that there is
legally insufficient evidence to support the jury's finding that National City breached the
Deed of Trust first, the damages based on this finding cannot stand. This leaves only one
damage award for the loss of the use of the real property; thus, Ortiz is no longer barred
by the one-satisfaction rule from recovering those damages from HLS.
For these reasons, we deny Ortiz's petition for a writ of mandamus, and we
(a) reverse the portions of the judgment
(1) holding National City liable to Ortiz for actual damages,
interest, and attorneys' fees;
(2) providing that National City takes nothing by its claims;
(3) denying National City's request for judicial foreclosure;
(3) declaring that the "Note and the Deed of Trust are fully,
completely, and finally satisfied and no past, present, or
further obligations or sums are or shall become due and
owing under said Note and DeedofTrust"; and
35
(4) providing that "all partial and/or interlocutory judgments
heretofore granted in this case are hereby made final and
incorporated into this Final Judgment";
(b) modify the amount of the actual damages awarded against HLS, replacing
the award of $10,000 in actual damages with an award of $74,500, which
represents the largest amounts found by the jury for the injuries caused by
HLS (i.e., $10,000 for the fair market value of Ortiz's personal property
and $77,000 for the loss of the use of the real property, reduced by the
$12,500 settlement credit);
(c) affirm the remainder of the judgment as modified; and
(d) remand the case with instructions to the trial court to
(1) sever National City's claims from the remainder of the case; and
(2) retry National City's severed claims.
Is! Tracy Christopher
Justice
Panel consists of Justices Frost, Brown, and Christopher (Frost, J., dissenting).
36
TAB N
1
1 CAUSE NUMBER 2006-61178
2 ALBERT ORTIZ IN THE DISTRICT COURT
3 v. HARRIS COUNTY, TEXAS
4 FRED LOMBARDO, et al. 164th JUDICIAL DISTRICT
5
6
7
8
9
*************************************************
10
AUGUST 1, 2014
11
*************************************************
12
13
14
15
16
17 On the 1st day of August, 2014, the
18 following proceedings came on to be heard in the
19 above-entitled and -numbered cause before the
20 Honorable Alexandra Smoots-Rogan, Judge Presiding,
21 held in Houston, Harris County, Texas.
22 Proceedings reported by Certified Shorthand
23 Reporter and Machine Shorthand/Computer-Aided
24 Transcription.
25
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
2
1
2 A P P E A R A N C E S
3
FOR THE PLAINTIFF:
4 Mr. David M. Medina, SEN 00000088
Mr. Gary M. Riebschlager, SEN 16902200
5 THE LAW OFFICES OF BRENT COON & ASSOCIATES
300 Fannin Street, Suite 200
6 Houston, Texas 77002
Telephone: 713-225-1682
7 Facsimile: 713-225-1785
8 Mr. Michael Donovan, SEN 00796478
Attorney at Law
9 6300 Dixie Drive
Houston, Texas 77087
10 Telephone: 713-956-4043
Facsimile: 713-956-4042
11
12 FOR THE DEFENDANTS:
Mr. Joel Mohrman, SEN 14253500
13 Ms. Stephanie L. Tolson, SEN 11795430
McGLINCHEY STAFFORD, P.L.L.C.
14 1001 McKinney, Suite 1500
Houston, Texas 77002
15 Telephone: 713-520-1900
Facsimile: 713-520-1025
16
17
18
19
20
21
22
23
24
25
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
3
1 P R 0 C E E D I N G S
2 THE COURT: We're on the record in
3 Cause Number 2006-61178, Albert Ortiz and Fred
4 Lombardo, and appearance for the record, Counsel.
5 MR. MEDINA: David Medina for Albert
6 Ortiz.
7 MR. RIEBSCHLAGER: Good morning, Your
8 Honor. My name is Gary Riebschlager, for Albert
9 Ortiz.
10 MR. DONOVAN: Good morning, Your Honor.
11 Mike Donovan. I represent Albert Ortiz.
12 THE COURT: Uh-huh.
13 MR. MOHRMAN: Your Honor, Joel Mohrman
14 for the defendant.
15 MS. TOLSON: And Stephanie Tolson for
16 the defendants also.
17 THE COURT: All righty. Well, you're
18 back. I'm so excited. Can you tell how excited I
19 am? Been waiting with bated breath to see this come
20 across my docket. So, you guys want to go back to
21 trial again, or at least the Fourteenth Court of
22 Appeals saw fit to make me put y'all back to trial
23 again. Yes?
24 MR. MOHRMAN: Yes, Your Honor. And
25 obviously our motion was to get in front of the Court
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
4
1 to schedule the trial and anything else that might
2 need to be done. our position is that the re -- that
3 the Court remanded in its mandate on a limited basis,
4 and when you have a limited remand, it is our
5 position that you can't just open the case up again
6 and start doing discovery and start adding new causes
7 of action and effect -- effectively not taking care
8 of what the Court of Appeals said for us to take care
9 of, but deciding, "Well, we're just going to start a
10 whole new case," in effect. And so that's what we're
11 here today -- we think what the Court ought to do --
12 or what we're asking the Court to do is set a trial
13 date, to set a date for the amendment of defensive
14 pleadings, affirmative pleadings, because the Court
15 of Appeals, in its mandate and its opinion,
16 specifically said that with regard to the very
17 limited remand on the contract issue here, that the
18 parties could in fact assert defenses, such as for
19 the bank mistake, such as release on the part of
20 the -- of the plaintiff, that sort of thing.
21 In addition, we think that we should
22 set a motion for summary judgment deadline because I
23 think there will probably -- we'll probably join --
24 issue on exactly what the meaning of the appellate
25 opinion is, and the mandate, and we think that
DONNA KING', CSR
164TH OFFICIAL REPORTER
(713) 368-6256
5
1 essentially the only thing that we have left to try
2 here, Judge, is -- well, actually, it's probably two
3 things, one, the contract issue, that is, does
4 Mr. Ortiz owe on the note and can we foreclose on the
5 house, or is he right, that somehow these two letter
6 agreements have said that he gets a free house?
7 That's -- that's what I think the main issue that
8 we're going to join on is.
9 One other issue would be -- as you may
10 recall, the jury entered a verdict and the Court
11 entered a judgment on the tort causes of action as
12 against HLS, which was the servicer.
13 THE COURT: Okay.
14 MR. MOHRMAN: I think it was around
15 85,000 once the credits and everything shook out. We
16 did not appeal that, and so that's done. But the
17 basis of those damages was loss of use of the house.
18 Over on the contract side there's also an argument
19 for loss of use of the house, and under the one --
20 one complete satisfaction rule, one complete judgment
21 rule that this Court used in determining that
22 judge -- judgment last time -- which, the Court of
23 Appeals said, "That's correct. That's -- that's
24 exactly what you should do." I think what the Court
25 will have to do is, if the jury comes back with loss-
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
6
1 of-use damages under the contract, then compare the
2 two and see which one is more favorable for the
3 plaintiff and then award that version of loss-of-use
4 damages. So it's sort of a two-stage process, the
5 contract and then loss-of-use damages. If we win, of
6 course, then the loss-of-use damages would be just
7 what it was under the torts.
8 THE COURT: Uh-huh.
9 MR. MOHRMAN: One final thing I ' l l say,
10 Judge, is with regard to this issue of -- of the
11 torts, if I'm understanding in talking with opposing
12 counsel, what they want to do is they want to amend
13 or at least supplement their petition with the same
14 supplemental petition that was offered to the Court
15 right before trial, and that supplemental petition
16 was based upon this rescission deed, which you may
17 remember, that came up in discovery towards the end.
18 THE COURT: Uh-huh.
19 MR. MOHRMAN: We found it in their
20 expert's folder and then turned it over, and
21 everybody got all excited about it.
22 So they basically used all their same
23 causes of action, said, "Well, because of the
24 rescission deed -- these causes of action are -- are
25 sort of different because of the rescission deed.''
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
7
1 Court did not allow them to supplement.
2 They say that's because it was untimely, but we
3 provided the transcript for the Court of what --
4 Court's ruling, and what the Court said was, ''You've
5 already got all those causes of action. There's no
6 reason to have double fraud and double trespass to
7 try title," and in fact, as we also cite in our
8 response to their motion, they -- the deed -- the
9 rescission it was actually entered as an exhibit
10 at trial. Quick witnesses multiple witnesses were
11 questioned on the rescission deed, and Mr. Junell
12 spent quite a bit of his closing argument talking
13 about the rescission deed and how it ties into
14 everything.
15 And so our view is, number one, the
16 mandate of the Court prevents any amendment to add
17 new causes of action because i t ' s - - and, of course,
18 we attached it there. It says, "retry Ortiz's claims
19 against National City" Bank "for breach of contract
20 and National City's claims against Ortiz for breach
21 of contract and judicial foreclosure, and, with the
22 exception of Ortiz's limitations defense," which they
23 said was not good, "discussed in this Court's
24 opinion, permitting the parties to assert defenses to
25 these claims."
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
8
1 Then it says, "after applying the one-
2 satisfaction rule" then it goes into what I talked
3 about just a moment ago about comparing the two
4 awards there, and then, "render a final
5 judgment ... consistent with this ... "
6 It affirms, immediately before that,
7 "the portions of the judgment that were neither
8 challenged on appeal nor affected by our disposition
9 of the issues as set forth,'' and those are ''Ortiz's
10 claims for fraud, common-law unreasonable debt-
11 collection, statutory-debt collection violations,
12 statutory deceptive trade-practice violations''
13 THE COURT: Slow down, Mr. Mohrman.
14 MR. MOHRMAN: Okay. Sorry. "breach
15 of oral contract, promissory estoppel, theft, breach
16 of bailment, invasion of privacy, and defamation
17 per se." And so our position would be an amendment
18 deadline for defensive pleadings that people can
19 bring with regard to the contract causes of action, a
20 deadline for a motion for summary judgment so that we
21 can resolve what the Court believes is law of the
22 case and exactly what is going to go to the jury,
23 then ultimately a trial date, with any pre-trial
24 deadlines, such as pre-trial order, that the Court
25 thinks is appropriate.
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1 THE COURT: And with respect to a trial
2 date, what were you envisioning?
3 MR. MOHRMAN: Well, we're happy to --
4 to go as quickly as the Court can accommodate us, but
5 I know -- busy docket, and so I was hearing your
6 earlier hearing. It sounds like we're probably into
7 next year sometime.
8 THE COURT: I'm sure you're almost
9 definitely into next year. And your feeling -- and
10 I'm going to ask them the same questions. Your
11 feelings with respect to how long it will take?
12 Because if memory serves, last time I think I was
13 told, you know, week and a half or something, and it
14 ended up going, like, well into, like -- if not
15 finishing the second week, I feel like we went into a
16 third -- we went on forever with trial. So how long
17 do we think this trial will go?
18 MR. MOHRMAN: If -- if if, in fact,
19 the trial is limited to contract issues and loss of
20 use on the contract and that sort of thing -- some of
21 the other testimony that related to the torts
22 obviously will come in. Jury needs background, but I
23 honestly think that we -- we can get it done in a
24 week and I think for sure a week and a half.
25 THE COURT: Okay.
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1 MR. MOHRMAN: I think -- I think you're
2 right, Judge. I think we went two weeks and a day or
3 something last time.
4 THE COURT: We did. I remember. It
5 was, like, the never-ending trial, much like the
6 never-ending case.
7 All right. Mr. Medina or
8 Mr. Riebschlager.
9 MR. MEDINA: David Medina for
10 Mr. Ortiz. Judge, I'm not certain i f this issue is
11 ripe.
12 THE COURT: Uh-huh.
13 MR. MEDINA: You know, there's a remand
14 there. And we haven't filed any pleadings, and it's
15 clear that when Your Honor considers a pleading
16 that's on file, you take into consideration the
17 remand and the instructions in the mandate.
18 We haven't filed anything, and it's
19 certainly clear, according to the opinion written by
20 Justice Raul Gonzalez, with a "z," writing for the
21 Court in Hudson versus Wakefield, 711 S.W.2d 628,
22 where he wrote: Cases are rare and very exceptional
23 in which the Court is warranted in limiting the
24 issues of fact, in reversing and remanding a case
25 where there's been a trial by jury; and to authorize
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1 such interpretation, it must be clearly -- must
2 clearly appear from the decision that it was so
3 intended.
4 And, Judge, I think when you take that
5 analysis and review any pleading that we may file,
6 then you can make your decision, and I think that is
7 well supported by an opinion that came out
8 February 15th, 2011, where Justice Brown, now a
9 justice on the Texas Supreme Court, in a panel that
10 consisted of now Chief Justice Frost and Justice
11 Christopher -- this is Justice Justice
12 Christopher's opinion, I believe, in the Ortiz
13 case.-- pretty much says the same analysis, a
14 general versus specific mandate, and -- and I think
15 both of those cases would at some point support our
16 pleadings. We certainly have the right to amend the
17 pleadings as long as we're not specifically excluded
18 in the Court of Appeals' mandate, and we intend to do
19 that. And to the extent that there are some law
20 issues that may or may not be a law of the case,
21 there are also some new factual issues that happened
22 post-judgment which need to be added to the
23 complaint. And so I think itls too early to have a
24 discovery or scheduling deadline. We intend to get
25 that filed as soon as possible, and then we'll be
DONNA KING, CSR
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12
1 guided by Your Honor's decision. Certainly, a trial
2 date -- I think opposing counsel is correct. Length
3 of time? Week and a half, two weeks, ir
4 irrespective of our amended pleadings.
5 THE COURT: Okay. So let me see if I
6 got this straight. You have not filed any
7 supplemental pleadings?
8 MR. MEDINA: No. No, we haven't,
9 Judge.
10 MR. MOHRMAN: Your Honor, may I
11 respond?
12 THE COURT: Yeah.
13 MR. MOHRMAN: They filed a motion to
14 set aside your earlier order which denied the - -
15 MR. MEDINA: Your Honor --
16 MR. MOHRMAN: the filing of the
17 supplemental petition. And so my understanding was
18 that meant they wanted that supplemental petition to
19 come in, and that's sort of the point here, I think.
20 MR. MEDINA: Mr. Mohrman's correct.
21 we -- we withdraw that, Judge, and
22 THE COURT: Oh, well, see, now
23 MR. MEDINA: because, Judge
24 THE COURT: -- you should've told me
25 that before we started our soliloquy there of cases.
DONNA KING, CSR
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1 Okay. Now I understand. So you're withdrawing that
2 motion?
3 MR. MEDINA: Yes, Judge. I mean, we --
4 we intend to assert some of that -- those claims, but
5 we're also going to assert other claims, which --
6 which the law allows us to do and the rules allow us
7 to do.
8 MR. MOHRMAN: Judge -- Judge, may I
9 briefly respond?
10 THE COURT: No. Hold on.
11 MR. MOHRMAN: Okay.
12 THE COURT: No.
13 Let let me see i f I got this
14 straight. You're going to assert some of those
15 claims that you were talking about asserting in the
16 pleading which you've now withdrawn, but you're not
17 sure which of those you were --
18 MR. MEDINA: To the extent they're
19 not
20 THE COURT: -- talking about asserting?
21 MR. MEDINA: Yes, Judge, to the extent
22 they're not excluded by the mandate.
23 THE COURT: Okay. So he's saying he's
24 going to follow the mandate.
25 MR. MOHRMAN: Judge, I -- you may have
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1 a copy of the mandate up there, but -- may I
2 approach?
3 THE COURT: Sure. And it may be in
4 this stack of paper I have
5 MR. MOHRMAN: Second page is, sort of,
6 I think, where the facts of it is.
7 THE COURT: All right. So it's
8 sounding like if they're withdrawing their
9 original motion that they filed for today, it sounds
10 like really all that's ripe for today is figuring out
11 what your trial date is and working back from there,
12 and getting you a summary judgment date as well.
13 And call it whatever motion you want to
14 call it, whenever I have these remands I end up with,
15 like, a day of, "What exactly did the Court of
16 Appeals mean when they wrote this?'' So I recognize
17 that's going to happen in this case, as it does in
18 all of these cases, and generally somewhere in there
19 we start going, "Well, blah" -- and then it turns
20 into a nightmare. But fine.
21 So, yes. We're going to have to have a
22 hearing, whether we call it a motion for summary
23 judgment or something else, to basically say, "What
24 exactly did" -- who wrote this? ''Justice Frost and
25 Justice Christopher mean when they wrote all this
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1 stuff?"
2 MR. MOHRMAN: Your Honor, may I address
3 just one point here?
4 THE COURT: Uh-huh.
5 MR. MOHRMAN: With regard to these
6 causes of action -- and we cite the Hudson v.
7 Wakefield case also, and it says, "When this Court
8 remands a case and limits a subsequent trial to
9 particular issues,'' which I think that mandate does,
10 quite honestly --
11 THE COURT: Uh-huh.
12 MR. MOHRMAN: ''the trial court is
13 restricted to a determination of that particular
14 issue."
15 THE COURT: Now, Mr. Mohrman, you've
16 been in front of me before, and Mr. Medina hasn't
17 been, which is why I let him get away with the
18 reading to me thing. Generally, as you know, just
19 give me a copy of the case so I can read it.
20 MR. MOHRMAN: I've got it right here,
21 Judge.
22 THE COURT: Thank you. For future
23 reference --
24 MR. MEDINA: Judge, I was just trying
25 to -- just trying to protect my record on appeal.
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1 THE COURT: No. I know you're trying
2 to protect your record. I just always like to see a
3 hard copy because I was never good at listening to my
4 mother when she read to me as a child, so it's
5 generally better if I just read the words as you read
6 them. So yes.
7 MR. MOHRMAN: And so, Judge, that's one
8 point. But in our response to their motion to set
9 aside your order so they could have their
10 supplemental petition --
11 THE COURT: Uh-huh.
12 MR. MOHRMAN: -- the second point that
13 we made is that the Court of Appeals' opinion has set
14 up some things that are law of the case, and, as an
15 example, as you saw in the mandate, the --
16 Subsection B on Page 2 says these claims are done.
17 THE COURT: Right.
18 MR. MOHRMAN: ''These claims are done
19 because either they weren't -- weren't appealed or we
20 affirmed the Court's directed verdict on them.'' And
21 those claims are all these tort claims that are in
22 the supplemental petition that they say ''maybe we
23 want to raise again, or maybe some new tort claims.''
24 And so my argument would be that
25 they're precluded not only by the limitation of the
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1 mandate, but also by the Court of Appeals' opinion
2 saying these are done.
3 THE COURT: And -- and you may be
4 correct whenever they file whatever this is that
5 they're going to file.
6 MR. MOHRMAN: Right.
7 THE COURT: All they're saying and now
8 I'm saying is: Lovely conversation for yet another
9 day when we'll meet together, as is very consistent
10 with what happens in the Ortiz case. So let's talk
11 about trial.
12 MR. MOHRMAN: Okay. Could we say that
13 there will not be any discovery, therefore, at this
14 point in time, until such time
15 THE COURT: Have they sent discovery?
16 MR. MOHRMAN: Well, I've heard that
17 they want to start taking discovery again.
18 MR. RIEBSCHLAGER: Here's -- may I
19 respond, Your Honor?
20 THE COURT: Yes.
21 MR. RIEBSCHLAGER: Here's the issue.
22 After trial
23 THE COURT: Uh-huh.
24 MR. RIEBSCHLAGER: after the
25 evidence was closed --
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1 THE COURT: Uh-huh.
2 MR. RIEBSCHLAGER: and and even
3 after, I think, judgment, the defendant in this case
4 took it upon themselves to once again go lock
5 Mr. Ortiz out of his house, go stick a "For Sale"
6 sign in front of the house and attempt to sell this
7 poor man's house one more time.
8 All those facts were not before this
9 Court at the time of trial, weren't before this jury
10 and weren't before the appellate court, and we
11 believe that those facts are sufficient to be pled
12 and placed before the jury in this case, even on
13 remand, because they're new. They they were --
14 didn't even exist at the time that the jury charge
15 was prepared, didn't exist at the time that the
16 evidence came in before this Court.
17 So that's why we will file -- it's not
18 ripe for you to decide on the pleadings issue because
19 there are new facts that did not even exist at the
20 time this case went to trial, did not exist in the
21 in the previous briefs that went to the Court of
22 Appeals. And so we feel that we're going -- that we
23 are entitled by the mandate, by everything -- law of
24 the case does not apply to the factual issues, as
25 this Court well knows. Only applies to the law. And
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1 because the defendant chose to do those --
2 THE COURT: Stop.
3 Please don't --
4 MR. RIEBSCHLAGER: We're going to put
5 those in our pleading.
6 THE COURT: -- tell me that -- that
7 that happened.
8 MR. MOHRMAN: Your Honor, it was a
9 completely different servicing company, had nothing
10 to do with us. They sued that servicing company. I
11 even talked to the attorney. There's a separate
12 lawsuit about it.
13 MR. RIEBSCHLAGER: They're responsible
14 for their own servicing company, Your Honor.
15 THE COURT: Is it your servicing
16 company?
17 MR. MOHRMAN: No. It was not.
18 MR. RIEBSCHLAGER: The servicing
19 company doesn't work for your bank?
20 MR. MOHRMAN: No. It did not.
21 MR. RIEBSCHLAGER: Is that true?
22 MR. DONOVAN: (Moving head side to
23 side.)
24 MR. RIEBSCHLAGER: Okay. He says it's
25 not true. We're going to plead those facts.
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1 THE COURT: I don't know, but-- y'all
2 figure that out, but -- I -- I mean, honestly-- and
3 we talked about this, I swear, at the time of
4 judgment. Like, "Okay. Everybody sit on their hands
5 because we got to wait for whatever the appellate
6 court's going to do." I swear we had this
7 conversation.
8 MR. MOHRMAN: Your Honor, absolutely,
9 and it was sent to a new servicing company. That
10 servicing company went in, secured the building, they
11 complained, and they sued that servicing company.
12 My guess is they either got a judgment
13 or settlement from them.
14 THE COURT: I ' l l tell you right now, if
15 this defendant did not order, orchestrate,
16 facilitate, or have anything to do with that other
17 servicing company coming in after judgment, then
18 we're absolutely not going to talk about it. And
19 MR. RIEBSCHLAGER: I would agree.
20 THE COURT: -- to the extent that there
21 is another case on file already dealing with those
22 set of facts that you just told me and you did not
23 already name these people as being part of that other
24 case, that's an issue not for me.
25 MR. RIEBSCHLAGER: Okay.
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1 THE COURT: So you need to understand
2 that and figure out what's going on with that
3 MR. RIEBSCHLAGER: All right.
4 THE COURT: -- before we start throwing
5 those things out into the universe. Okay?
6 MR. RIEBSCHLAGER: I get that. I get
7 that, Judge, but I also know that a bank is the one
8 that hired this servicing company, and there will be
9 an agreement between the bank and its servicer for
10 the servicer to be authorized to conduct a
11 foreclosure.
12 THE COURT: Like I said, check out your
13 facts --
14 MR. RIEBSCHLAGER: I will.
15 THE COURT: -- before we throw said
16 stuff into the universe.
17 MR. RIEBSCHLAGER: Yes, Your Honor.
18 THE COURT: Until something comes
19 about, then there's really no need to discuss all of
20 this discovery and whatnot. And it sounds like y'all
21 over there, since you're new to the party, need to
22 get your ducks in a row before we start doing all of
23 this stuff. Okay?
24 MR. RIEBSCHLAGER: Yes, Your Honor.
25 MR. MEDINA: Judge, they will be in a
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1 perfect row.
2 THE COURT: Okay. Now, with that said,
3 let's discuss trial date. So
4 (Discussion off the record between the
5 Court and trial coordinator.)
6 THE COURT: My gut is telling me
7 March 2nd. Y'all got any issues with March as you
8 sit here --
9 MR. MEDINA: No, Judge.
10 THE COURT: -- right now?
11 MR. RIEBSCHLAGER: No, Your Honor.
12 MR. MEDINA: Any date you pick is fine.
13 THE COURT: Okay. That dead week
14 normally at the beginning of the year is not even
15 until April.
16 (Discussion off the record.)
17 THE COURT: Sounds like maybe y'all
18 could actually go in January if you wanted. Think
19 you can get it together that fast?
20 MR. MOHRMAN: Yes, Your Honor.
21 THE COURT: Or is January bad?
22 (Discussion off the record.)
23 THE COURT: Maybe we'll put y•all in
24 January. Y'all got any issue with January?
25 MR. MEDINA: No. No, Your Honor.
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1 MR. MOHRMAN: No. That's great, Judge.
2 THE COURT: All right. We'll push you
3 up to January. What a great way to start the year.
4 Please tell me this is going to be better than last
5 time.
6 MR. MEDINA: It will be.
7 THE COURT: All righty. January 26.
8 Y'all good with that?
9 MR. MEDINA: Yes.
10 MR. MOHRMAN: Yes, Your Honor.
11 THE COURT: Okay. So you're
12 January 26th. Work backwards from there. Please
13 don't wait until the 89th hour to do that motion for
14 summary judgment figuring out I mean, frankly, I
15 think that needs to come pretty quick down the pipe
16 so y'all aren't doing stuff you don't need to be
17 doing, if you want to know the honest truth, because
18 that's what happened last time. We wasted, like,
19 nine months of people working on stuff that ended up
20 not being part of the trial, and then we had to go
21 back to the Court of -- anyways which we're not
22 doing, so don't even ask me to do. But my point is:
23 Let's get figure out the what's the law of the
24 case now and then work from there. So your trial
25 date is January 26th. Come back and see me and we'll
DONNA KING, CSR
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1 talk about law of the case.
2 MR. MEDINA: Thank you, Judge.
3 THE COURT: Anything else?
4 MR. MOHRMAN: I think that's it I Judge.
5 THE COURT: All right. See y'all.
6 You 1 re excused.
7 (Court adjourned.)
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1 THE STATE OF TEXAS
2 COUNTY OF HARRIS
3
4 I, Donna King, Official Court Reporter in
and for the 164th Judicial District Court of Harris
5 County, Texas, do hereby certify that the above and
foregoing contains a true and correct transcription
6 of all portions of evidence and other proceedings
requested in writing by counsel for the parties to be
7 included in this volume of the Reporter's Record in
the above-styled and -numbered cause, all of which
8 occurred in open court or in chambers and were
reported by me.
9
10 I further certify that this Reporter's
Record of the proceedings truly and correctly
11 reflects the exhibits, if any, admitted by the
respective parties.
12
13 I further certify that the total cost for
the preparation of this Reporter's Record is
14 $ and was paid/will be paid by
15
16 WITNESS MY OFFICIAL HAND this, the 13th day
of August, 2014.
17
18
19
DONNA KING, Texas CSR 6273
20 Expiration Date: 12/31/14
Official court Reporter
21 164th Judicial District Court
Harris County, Texas
22 201 Caroline, 12th Floor
Houston, Texas 77002
23 (713) 368-6256
24
25
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
TAB 0
7/18/2014 7:13:10 PM
NO. 2006-61178 Chris Daniel ~ District Clerk Harris County
Envelope No.1881068
By: MARCELLA WILES
ALBERT ORTIZ § IN THE DISTRICT COURT OF
§
v. § HARRIS COUNTY, TEXAS
§
FRED LOMBARDO, NATIONAL §
CITY HOME LOAN SERVICES, INC., §
D/B/A FIRST FRANKLIN LOAN §
SERVICES, NATIONAL CITY BANK §
OF INDIANA, KEYSTONE ASSET §
MANAGEMENT, INC AND RICHARD §
HOWELL D/B/A ALEXANDER §
HUNTER PROPERTIES A/K/A §
ALEXANDER HUNTER PROPERTIES, INC. § 164TH JUDICIAL DISTRICT
PLAINTIFF'S MOTION TO SET ASIDE ORDER
DENYING LEAVE TO SUPPLEMENT PLEADINGS
TO THE HONORABLE JUDGE OF THIS COURT:
Plaintiff and Counter-Defendant Albert Ortiz ("Ortiz") files this motion requesting the
Court to set aside its order denying Ortiz leave to supplement his petition and answer in this
cause. In light this case being remanded for a second trial, there is no longer any basis for
denying the pleadings. In support of this motion, Ortiz hereby respectfully shows the Court the
motion should be granted for reasons as follow:
PROCEDURAL BACKGROUND
1. On or about May 28, 2010, Ortiz filed a supplemental petition and a
supplemental answer along with a motion requesting leave of the Court to supplement his
pleadings. A true and correct copy of the pleadings, on file with the Court, are attached hereto
as Exhibit 1. The supplemental pleadings were filed a few days before trial. The pleadings were
based on new facts and documents revealed by Defendants in discovery just before trial. On
June 3, 2010, the Court denied Ortiz's motion, and the case proceeded to trial. A true and
correct copy of this Court's order is attached hereto as Exhibit 2.
STATEMENT OF FACTS
2. Ortiz prevailed at trial, and Defendants appealed. The court of appeals reversed
the trial court's judgment in part, affirmed it in part, and remanded the case for a second trial.
The Texas Supreme Court denied Ortiz's petition for review. The case is now back before this
Court but has not yet been set for trial. The parties have requested a scheduling conference
with the Court to establish a new trial date and other docket control order deadlines.
ORTIZ REQUESTS COURT SET ASIDE ORDER DENYING LEAVE TO SUPPLEMENT PLEADINGS
3. Ortiz now moves the Court to set aside its order denying Ortiz leave to
supplement his pleadings. There is no longer any basis for precluding Ortiz from bringing his
claims and defenses set forth in the supplemental pleadings. The pleadings are no longer
untimely as a date for the second trial of this cause has not yet even been set. The Court
should set aside its order denying Ortiz leave to supplement his pleadings and should deem the
pleadings as filed on May 28, 2010, the original date of filing, and consider them timely filed for
the second trial.
4. Based on the need for a second trial and the new facts and documents disclosed
by Defendants in discovery just before the first trial, Ortiz hereby requests that the Court set
aside its order denying him to leave to file his supplemental pleadings. The Court should grant
this motion for all of the reasons set forth herein and in the interest of justice and fairness.
PRAYER
WHEREFORE, PREMISES CONSIDERED, Plaintiff, respectfully requests that the Court
grant this motion and set aside its order denying him to leave to file his supplemental
pleadings. Plaintiff also respectfully request of the Court any other and further relief to which
he may be entitled.
Respectfully submitted,
Is/ Michael Donovan
Michael Donovan
Texas Bar No. 00796478
6300 Dixie Drive
Houston, TX 77087
{713) 956-4043; {713) 956-4042 fax
mdonovanesq@yahoo.com
ATIORNEY FOR ALBERT ORTIZ
CERTIFICATE OF CONFERENCE
I, Michael Donovan, hereby certify that I have conferred with opposing counsel, or
attempted to do so, and have made a reasonable effort to resolve the matter that is the subject
of this motion. Counsel for Defendants is OPPOSED at this time.
Is/ Michael Donovan
Michael Donovan
CERTIFICATE OF SERVICE
I certify that on July 18, 2014, a true and correct copy of this document was served on
all parties pursuant to Rule 21a of the Texas Rules of Civil Procedure.
Attorneys for Defendants:
Joel W. Mohrman I jmohrman@mcglinchey.com
Stephanie Laird Tolson I stolson@mcglinchev.com
McGlinchey Stafford PLLC
1001 McKinney Street, Suite 1500
Houston, TX 77002
Fax: 713-520-1025
Is/ MichaelDonovan
Michael Donovan
EXHIBIT 1
l'l!EK!10: Mey Zfl P7;~
l.tJrno1 J~n- D!$bicl Cl!ilrl!
ALBERT ORTEZ: IN THE OISTRicr:il~i&m
By: Cool'leia Joi'lnson
v. HARRIS COUNT", 'f E X A S
FRED LOM!IAADO, NATIONAL
CITY HOME LOAN .SERVICeS, INC.,
0/B/A FIRST FRANKLIN WAN
SERVICB, NATIONALClTY BANI(
OF INDIANA, KE"SlONE ASSET
MAN.AGEMENT, lNC AND RICHARD
HOWELl 0/B/A ALEXANDE!l
HUNTER PROPERTIES A/K/A
AlfXANOER HUNTER PROPERTIES, JNC.
Alb~rt Ortiz ("OrUi'l hLipplememal petitio~. 'lfr~tiled ln res.pon>e to new discovery ohtaine<1 at
lY1:3<
depositfrms recently ordered by the:~,```` Tnis petition is a supplement, no! an amendment to
!''``>-<
Orti<'s !Eighth Amended Petition<.~n·il' does not act !D >Lip!lrsede or substitute for s.afdl Petition.
,lf1~'·~{;
Tex. R. Civ. P. 78. By thl; >OO!i.i\;rtiental petition, Ortl;; alleges. new daims, as follows;
~
'~-'">'Ji
.•~?.$. TRESPASS TO TRV TITlE
P~i:``pT
1. Plat1\'tiff reallege:; am! inmrporates by relerence at! of the f<``;!o;;~l s~atements
:t·'/~
>'!---'!_-
,_ .,~ '•'
and aHegatiRii'l>;·made hereinabove in this petition. Pla!nHff allege£ a trespass to try. title diilm
-.-_``J
tns!rurmmt, atta~hed hereto as Exhlhit "A#, lncorpor~ted herein by ref(mmce, !he same as It
entitled to possess.ion of llle R<~"l Property.
seized !!'131!1tilf~ homi'l on Nov¢m~tore po~t;!$slon oftlle pro[X>rt];``rtlt,
)J,_- ,1_l
'r~·',''
'Io:o"'~;
po$Si'lSsiO!n as to all !and py.};i~l~e am! as to which BANK dl;daims tide.
{.~t-
lo addition io a~)ward of title and posSe>sion ol the Rea' Property, Plaintiff also seek>
'~-',,_;y;;:)/
?(;'::.
to tflwver hit d~;r:&~ii
·-._.. in the form of lt>st rental ~mi/or los; of uSE! su!ferelies&ioh of lhe !'lea! Property. l'taintiff i,s entitfBd to rr the intEmtioool tvrt oftrespai>& UP08 \~ P\' eflitering the Real
~:;:?``(``~<
f>roperty wfthollt Plaintiff's. amsent, illterJUonalty causini! one or m&.i?third persons to enter th€
(:"·fj'i,.
Real F>rop~rtv, and/or entering or ~al!Sing others to enter tf.l:eJleal Property in excess of anv
tcr:,{.f{/!
authority to enter the Ileal Property. Such entry W,l, rrrtentlonal, ar>d V'()-luntarv.
<',::~.;~:··'``-
Defend<>nt HI.S'$ and BANK's tre>pass whlalntiff I'll$ us;), !lf home, ``Jj~tJ,>'
··..
Plaintiff Is ~I so entitled t~> prevail a;-l~ftocil'ller on his trespas~ to realty dalm ori tl\e b<>~l~
SAN!Uo removethe dotJd on tho title to the Fh:tall'roperty cmated !ly saicl ResQ)s,eionlruuum.,nt
{(._;:>.'
to the atent It purports to reinstate tfu; Deed and Trus! and Note asscw:iilf~{f';,.,ltll the FlEml
,_( V("'
-/~,_.~:·
,~,
Property as~>;ell as ti'l~ debt previousl'l associated tllerewith. Altemativefyi Cmm should modi!)'
b:·:~'!;-:c:';
or reform the Rl"sclssion Ins\wment, througll Dedaratmy Judgme.gf,'iif refle;;t and comport '•'lith
- {;,``~z~-
Defendant BANK's waiver dated July 6, 2006, whith in~orporilt!l& all of!he term.> and conditions
,``i%J-
;r-·-~:;
ortr•e June ];1, .2006, >vaiVE'f ami o!so contains langu<~B:~ c~t;il,i;liessl;r sbUng that BANI\ waives <~nv
~·~;;)'~'
<~nd all actllal and poien!lal demands and dalms re&nnli!'ction wrth the R~;~ai f>rpperty, inchJ<:linttb~;~n.~te and d~ii!'d oftrw;t ss>o<:iate~ with sud~
',``-· ,_JJ
``-c
Re.*ff'roperty,
c"•'
,lfJj_;
Alterl'la.tlvely, i'laint1ff $eeks ,tJJ;'f;l~ratory Ji.tdgif>e'nt de>el<~rlr>g ~he Fct$CIIl$llre of JuM G,
,.J``·'"-·.
2LlQI'l wrot~gli!l, null and voitl; 1!''1 it~irll! title to the property to Plaintiff free "oo ~M t>f .~!1 llEnd {;f;;``orlng tnat D!l'lent!arrt
.;}-~{~?' -
BANK ha$ re leaseJ:!:Jl~tllPr waivo;,t! any ri;gnt£ it mli\!111 llav¢ had under the Do;,INJ ollm;t.
,f.~:,·;~-.'
u. )~
,,{F.,''{ ~MUD
-'":_·~;}
and all!!gatlon> made h false at the time lt was
DefentJants m~;;le it With intent that Plaintiff act 1m\!, P'laif!l'ff did rely on it,,.ilfld Plaintiff was
i~::{~
Injured ~sa proxi'mMe result, {i':``s!'
Specil'lc<>lly, D$!er;oants doe<:uss!ld or commur>k:~ted wl~b,P,)~n,!lff num,.rouc; tlm$s
,--.:.'``~//
regarding ~n<\1 Substltut$ trustee's (leed, the Property, and ``````dowr~ of th!l Proper\;'
,_'-;:``f~
without ever disclosing that !he fa re.elosur!! had boen res.elftli~(J a.nd ttw Sul:lsHtlJ!e Trustee's
~ fi{,J1
A~<-:r
oeedl had b(Hm deemed void and of no -l!'f!<:!ct !or al~ ~4f!]loscs. A party ha~ a l<:!gal duty to
<:.:it~'
dlsdos,e in the followlng situations~ [1~ wlu:.n one!x~limtarily dio;closes Information, he IE!B a
~· ;.-{£::``'
dUll:\'' ro dio;c!o~ the whole !ruth; (21 wh~n~si).e:'makeo; a represen!a!ion, he ha> a dut\' to
I \:::..'"..')
~,
dlsdo>fl' new information when hl! is ``are the new information makes 111e earlier
"'_~:.f'f,r,
repre&entatlon mio;!eading or llf'ltFU~j:~i:! (:3:) when one makes a partial disdosure and {.onveys
h`` ----·
(-_...~ ·-``
3 f;,lse impression, he has a du:tit.ti! speintiff teal!~e~ andJ!I(.$porates by reference i'lll of the fo.ctual statemt>nts and
-tt·~-.:,.<·
allegatlom. made her<)!nab(:Ne i(( \``,,petition. Ti'lil' cot'ldiiet of Defendant~ Hl!> and/or !:lANK
l````~:~b
constitutes uniav.tiui tl!o'bt ct:~lhldion< Derendanl> f.a!li!d to dl>do$<(! ![it! !lescissian in>tmment 10
l::.l_:;
Plaintiff suillsfr(JUfrl'lt to ·\(~,.,·,,
the Property ~Jn Daf!!Ftdant Jl.Al~l<, not Ortlz.• and ro·ntln~ed tel u~e this ass!!rtkm as a basis for
0.~--``f
fa.iling ami re!using to allow I'L;Jin!IH to regaln possession tQ tfltt i'tof)erty. Defemlant(s) also
tollectiM Practices Act or !:lCF'A), includll'lfi Section 39:1:.304 or tlH! OCPA. Suth,Jl\VIola!km ls al$0
le:``,~,,
act<~s Co•1$um~r Prot~t1on-Dec~pllve Practt«)s Ai<~. rti+PAh Under the
',~_ JY...
t·-~ '-<.·,~-·
OTPA. l'lal(!tiff 5e<'!ks up to threE'! Htnes his damil;[leS for thl> know·lng Jl
r._,,i.~\!e
"'-;:=-~:;:::
;.c:tual damage~. $tatuto!Y dam$ge~, or both. Such .a.~tk>ns also con>i!lt~inabl~ d
~,,r,-:c,.
``w for whr<:h l"!ainmr $eeks to ri!COIII!r his dafr'Kf!!l7slrom saki D<:!lendant{s).
?,. "?:-''-''
slJiJb'IONS
and tile true .statu; of title to ti'le .Fteal Property prior ta fflir1g sucn pleading; and/or motiom.
!;(~d) pleadifligs am:l/ar motiom l a11d
·~ ·:1"··
':~,:.iAi
;,::::f:~l!
Plaintiff i> ent1tled to a further aw3tt:I;J:teal<~nt:l fiMI Juclgm!1nt
:U.0-.""·'
r--t``~,;;~·
ultim~otely be awarded irn f~vor 9f'Piairn!iff.
\,
Should It be necessn tli~
{'(;~):``~
Texas Supreme court for rsv.~•,l;;f'lalnt1ff furth1:1r requ.~sts that, upon ff11al judgrrH!!'Il for f>lalntl!f,
\( }:``
ihe Court aw<~rd ~ii acl,datjp';;al amOilnt l)s ;Jttomo``)•!.' fees !or ~pr~sentlng Plaintiff clurli'>i! such
n d''Jl
review.
<);Y
0/~J:{f~:t
>'f!AVl!it
Wt1£RHOfil"..• PRi;MI$~$ t:ONSlDERED, l'!alnliff ORTIZ rt!Spectfuliy rnquests: of the Court
!he rol!owlng:
for ORTIZ'Srecove!)l o! title to the Real Property.
4. Judgment agaimt Defendant BANK and/or,~;~\o rnodlfy or reform tile Rescission
r:::.("''tt
,~., Yl
lr;strument, lnroug~ Dedarato!)l Juclgmentto refl~,~ii"comport with Defendaflt SANK's w<>iv~r
_.g_:~:``,_,
.: '·
t'':c-!'
•·.
5. Jvdi'jment <>gainst Defendan~;{ar re.c.overy _.r personal property of O~TIZ tnat Wil$
1.
ll.
9.
iHE Jl!NE'LL, lAW fiRM, f'.C.
7560 WmxJwav Dr,, Suite 59()
M~
1-iou:;ton, Te~as 1700:;)
Phone: 713·266·6700
Fax: Jl3,265-!JSZ!l
ATTORNEY !'OR PLAJNTIH
Mr. foe I W. Mohrman
Ms. karl S. Rohi nmn
Mr. John L V,e;ner
lvkGilnchey Sttaiford PtlC
1001 M~;lUitOtl, TX 17002
fax: 713,520,1025
ALSE!i.fORTU.
FRED l..OMBARI:lO, NATIONAL
CITY HOM!; LOAN SERV!C!;.$, INC.,
0/ll/A FIRST I'RAN!I<,llN LOAN
StRVICES, NATIONAl Cl'fY !lANK
Ol' INDIANA, K!!'fSTONE ASsET
MANAGEM~T, INC AI•Hl RlCHAJ!.t)
HOWEL~ D/ll/A ALEXANDER
l"iUNTER PROPER'f!E$A/1ROP£RTIES, INC ~ :,tt;:F JliDit:IAt OISTR!tf
(i-\-.~-~·:``~·;Y
ALBERT ORTil'S THIR[) SUPf'LEMENTAl'ANiSWER
TO THE HONORABLE: JUDGE Of THIS COURT: i:&f;e)' ·. . . . . . .
Plaintiff and CounteH:\elendant Albert 6(i'~"' ("Ortiz"} nereby files his Third '~
Supplemental Answer to thf! claims brought agi:li``Jh~m
..
by Nation<~! City Home loan Services,
,<;(;J!'-,-:,-.
{ ~,_.~
7
\.~_;y
Inc, d/b/a First Fran'klin Loiln Servk.es {"f-IbS"), National City BaJ1k of Indiana {"llANK"}, and
·t:::~r~
K11ystone Asset Manageffil!nt, Inc. {"Key~t~e"), This supplemental answer acids to but does not
,1kii},Ji
amend or superS{)de .any previoo~oi:[g(nal, supplemental, cw amended Mswer Med b·~ Plaintitt
\0``~,
·- ~:\
This supp lement<~i answer is fl~ifln respon;e to new discovery obtained illt deposition; recently
~c, i()j:~:
ordered by tile Court, £1sfsr6uml> and 5U!Jport fur tnls filing, Ptaintiff woold respettMiy show
., l(J)·
the Court<~> follvwf':_,,,J;;'
.~i~:>
.-
t::~."-:, :~
WAIVER
l, ,,,``;r further answer, if O!fll/ i> necessary, as a defense, Ortiz would show the Court
d()m.:~ntl N daim upon Ortiz for suri'l amounts (other than amendfng their ple ne,e:>sary, acs a ~pJ~dal den\al, Ortk 5pedfkally de'nres
!i~;h>'
tllat <>li conditions precedent tG thll daMn$ of DeferwJiil!'tts;;:1~5 pled, hil'{,
occurred. Plaintiff specrfkally der~res that all rondl.tli;ill~ precedent to the daims of Defendant~ em
''"'''•]
the Note and for enforcement or foredosure.,o``~'~'R[en or security interesb tlltoogh the beed of
iW:~
Tru$t or olh~rwl~e tlave be~tl peif-orrn~_!,h,or have oo:urrw. Plaintiff S~Jedflcal!y denJ~s that,
;0:;;--··
F.:..~--~-Y
subsequ~rument> Oefend<~nt:s haw made anv dlemaml or
'<:;:/
' aile~edly m•es, ~nd spetifkall)l dertle~ that Defendants ii>lve
clalmL:!pon him for an)' amo(lrl_!,~'h~
----~·/J;·i '"
s~n! an·• .notlc~§ of defa!.f1t;j:~:>l Intent to ``cel~rate thii Note, oi aw~lli1ration of th~ Note, of
~-- . .,_.
misrepresentatio~ by nml5csion in tf>at Delemlant> failed to tli5J;Iose !he ReM;ission Instrument,
ES!OI'PE1J WAIVER} Rf<1']F1<:JITION I JUDICIAL ADMiSSION
{<_~ :1
4, l'~,>r fur!hflt aMwer, If <1111' is ll()C``~ry, '!.:;,·,..,
- _ - _ - ,vyv
Property be restomd to Ortiz. Defemlants im!icated(ffil\lr agreement that the foreclosure was
-~){
c,,\~;
Wl'Otlgfu! when they resclmll'd it. i)efendant~ ac{i~ted ami/or camp!ied with the Court's ordl'lr
f~ ,:;;;;~;:::;
r·;~':>"
when they resclooed the foreclosure and SllQsti'tJte tru>tee's dee::!. !l" such conduct, Defendar>ts
have waived anv right to contest
li>wrongful forl.'dosure clatm,
!'!ai~l:\ff'> are estopped from
_tt``}_}i
wntestlnt; such claim, and/or hav``~lfled the Court's order th;;t the foreclosure w.as; wror~gful,
~'-_.i'
thot the oubs!itllle trustee's deed' l>e f.£'! aside, arod thai title be restored to Ortiz.. Furthe rmor~,
)~::``; 3
Defendant BANK, acting.IJ~io'ugn Defendant HLS, e~eGuted i'lnd filed the aforcission lns.trument is a stipbl~ation and deda:ration by
0fi``~Jf·'
Defendonts thatr~tl;fe 1 5ub&titute Trustee's Deed is vold. Del!.'m!ants r,annot c!efeat or furthe-r
,;_-,~,_-,
'?--~!, "
~ontest Plairit1Ws\1aim lor Mongful foreclosure due to this judRcial admission.
FAll!JRE TO J>RE'.5ENT C!AI M
5, For further anw1er, if <>riy is necessary, as a delense, Ortiz WOLlkl soow the Court
aru:l resultitlg sL>bstitute trustee's dcl!d. As a result. Denmd.an!s n.avt:: tailed to coo1ply with the
st<~tutory reqllirements a!ld/or requiremems or tile Note and/or Deed of Trust for recovery ¢F
attorneys' lees.
NO ETI-IICS VIOlATION
6. neoossar,•, .a; a defen;e, Ortiz •.vout;l 1~flow tl'le Court
For furtner answer, if any is
~·tJ?f;i:,
!h;;t Defendant>' darrn~ altestng; tt>at tile waiver as;reerneots exect•i.ed! ~Jiefer>dan!s are void
•.x
·- i(;``-
3nd/<:>r 1.menfort:eable due to etl1rc; violation by f'l.aintlff:> attorney f?:!f~lill/or
--:.
are bamffi because "-~
~\.._l-1§``
!llere was no e!l1i~<> vkrlotir,lments,
"'~:.,:·~:;;:?
- - -- -,-_ - - - - - - - -- -- - - ' "' . '' {''<'ti"'
~:>efenda!lt 6ANK w;~s not rer>r'lsernter{l by couns~;>l r~;>gatdins:.m~subi ~&~!1:men!$,
j::?``:">~"
t~., tfle actua~ and potetr1tia! dalms f
~ ,_:::;;;:,
sam;;,. Similar!•;, at the tim~ it e``·cuti;>d tile J~i~r agr~meots, Defendant IllS •.vas not
~ ~:}tY:>
repres.llntec! by <:<:>l.lns~l regarding tn~ s~bjrtiJ:,t,;t!er
1;.'\
ol tlie ag~<:,em¢nts, Le_, the actual ;~nd
ff_:..\("
~tential daim§ and demands of Hl.:S agairn~i'O'rtlz and thrn !ltigatkm of sam~,
!'leading altemat[v~ll', S<1C'?-~IiJ~!·"Obie P¢tallse Defendants
':;< "'-"':!-,~
wrtFE' not lnjL>rad or 'p``tdlcecl !;Jy arw fllieged ethics violation. Regard!C!'Ss of the actions .of
d~;``Jf''
Plaintiff's a!torn``;"DEr Ill~ tm,tl!!w prior t.:> li!Xl\!Wtinjj' them. Thus, Defemlants weore
diosE' to execu:te tl1e wal1rer agreement{sj without waiting for their attorne'{s review and cou.nSlmtly employed by such an organi~tlWtl or eniity whose conduct is
: ' (,;?``~;:;.~
not il matter at issue but who mi.ght possess im1wledge ~(),~tning the matter at issue.# ,IJ,ny
·~. ' )
cont;;;cts by 1'1-;intiffs <~ttomey wil~ illl''i' P'erson who wa~(``
"''0o/
emp[G\'ell of HLS ;:";'",
such i! person with whom contact was not J)rohibl~'
~}``)
ll.:i!
\!Kfff oR
(:}';;::)
WHEREFOR!2, PREMl$1;,$ CONSiDER~' Ortit F,C,
, fi' Mili_~Gl Blotk
SBOT~'Qt'l97200 SBOT!t~ 24032610
7660 WoodWif\' DL1 Suite 5.90 3900 Esse:<:, Suite 390
Houston" Tex<~> 71053 tJq~J~tM, n~a• 77027
PllOI'H!~ 713·2&&6700 P!mne; 281·768·1530
l'ax: 7H-Zl>l>-!!S28 fa`` 83::trockman, Srouch le & Evans, f'tLC
Mr.l(lhn L lill:m'.!r 2020 Sm.rtnw~st Freeway, Sui~@ ,323
Mrul1nt!'ley St?fford PUC H oJUs!tm, Tex;.s 17008
1001 McKlnn£y sm~ct, S.uite 1500 Fax~ 71.3.·533·0303
Hmlslon, TX 17002
Fax: 71.3·520..102.5
. . ubu!»lrA!tt ttonc'E tu t:t~-lttKK1
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``i!' mY!j_ ~·'P'-'t-"'IY -sn_t: `` ;. ~ ' :' . l{i'';." -
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fuduli'M~ i'nW-¢. ~'~ >i frhttltw.!l:~ W"+ril~i'tot:!~tY'!Ifil.i Hi;.!JUN'i..illfii;f r~l•y ~ill
-tr,J)4m if ~ ,~l ~ 1,1;,; ~_AA;f!li.~- "ftit~tr- ~ ilifl;ld i't!J(~1.'X_1i w~ tt!>t~m:lr~f;J w~rri4l'4~ fuJrfk~Tt M!c
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til,l~l4 \;~-;Jf~ t.f if:-t~; l~ioii.:t.J ?rt 1(-«!ltt:TJ~ Vf 1ft~
til
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hul::.'&::!~ rt;\t41;;t!; ~ }~_t, ta-,11 :n=-.~. til l:LMfll _;,q! ~ '$¢ rkJ(ti tQ ~ ~i ~!:! !j:j,JiJti\ij
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~'I( "fl!Ei'..EFOR~3 ~t tw".i•ld'"i~:e r·``~itiM!c~ If~ i'rlot'itt ~ l'li'IW!~-,;r M' -~lil1-d ``
``~ itbitfil.i' ra -q;(\1; -tJ,)j-N:m•.ii$Y'f'.:;>:~ ~p:;_t :W. ~-`` ~( lnlrr,ffl,. 1:11;1:; l!'u_, M¥iUI tr~. Nf.!ll:M.p.r~: )'n(i.lilii`` k Icy i,l,."ft' 4;~r\q· t
~-~-feii``1fi lh¢~ ll;dD=.!I:,(''fN~'!,(Ut.t.~ri!1frki' '11:::1-:or d~W¢ ~ :1i~:. ioll'<"-Cl TM:ll''
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l!!f(dme~ at Hl~ f~ 1rr n;: ;,u`` ":flti!'tll'~ q.,~ -i:t:cl~e., ~-~ tl.ti,.h~!i~ ~b
1h.i!i¢t:!.l:.l'lnll:fi:Ci'~ -Drr;t ``_,1._.-~-jl 11~ i$1~1 ~!'J! \m::l rt-;`` :ku1 f!~•J '"of ~"\'!ri,
H \I~K'Jif:lli!'£Wt_f#1'!j~ i:.CI!,-'\'!:!Wi;Y'!:::e\ ~ l:"t.foi'"'.!~ t:i"n\rn-o.::!iio~Hl H````,.1.
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~ill"~t'I'Zii ``"l!Tt'$ Mill ,l;,!l~P;J:JSl f>l1r~-~' T'b~!- OOLi'V.kiWOO ~ N``.,1rwl.. E~l~ ~tt 1h-e ttt.:9 (l-f !h¢ 1\\nt;:
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EXHIBIT 2
ALilERT ORTIZ IN THE DISTRICT COU!rf 05'
HARRIS COUNTY, TEXAS
FilE!> LOMBARDO, NATIONAL
Clfl' HOME I..OAN SERVICES, ~NC.,
0/B/A FIRST FRANKLlN lOAN
SERVICE~ NAl'IONAL CITY BANK
OF !NI>!ANA, KEYSTONE ASSET
MANAGEMENT, INC AN:D RICHARD
HOW~LI..D/8/A ALEXANOER
HUNTER. I'ROi>~RTIES A/K/ A
AlEXANDER HUNTER l'lii;Jl'Eim~. INC. OlSTlllCT
QRQ£R
NO. 2006-61178
ALBERT ORTIZ § IN THE DISTRICT COURT OF
§
v. § HARRIS COUNTY, T E X AS
§
FRED LOMBARDO, NATIONAL §
CITY HOME LOAN SERVICES, INC., §
D/B/A FIRST FRANKLIN LOAN §
SERVICES, NATIONAL CITY BANK §
OF INDIANA, KEYSTONE ASSET §
MANAGEMENT, INC AND RICHARD §
HOWELL D/B/A ALEXANDER §
HUNTER PROPERTIES A/K/A §
ALEXANDER HUNTER PROPERTIES, INC. § 164TH JUDICIAL DISTRICT
ORDER
BE IT REMEMBERED that on this the __ day of-------~ 2014, the Court
considered Plaintiff's Motion To Set Aside Order Denying Leave To Supplement Pleadings. After
considering the motion, any response, and any arguments of counsel, the Court is of the
opinion that the relief requested in the motion should be granted; it is, accordingly, therefore,
ORDERED that the Plaintiff's Motion To Set Aside Order Denying Leave To Supplement
Pleadings be and the same is hereby GRANTED; that the pleadings of Plaintiff which were filed
with the Court on May 28, 2010, are deemed filed as of that date and timely for the purposes of
a second trial of this cause, and this Court shall consider the claims and defenses alleged
therein; and that this Court's Order of June 3, 2010, denying Plaintiff leave to supplement its
pleadings, is superseded and vacated.
SIGNED this __ day of _ _ _ _ _ _ _ _ , 2014.
JUDGE PRESIDING
APPROVED AS TO FORM:
Is/ Michael Donovan
Michael Donovan
Tex. Bar No. 00796478
6300 Dixie Drive
Houston, Texas 77087
Phone (713) 956-4043; Fax (713) 956-4042
mdonovanesq@yahoo.com
ATIORNEY FOR PLAINTIFF
NO. 2006-61178
ALBERT ORTI2 § IN THE DISTRICT COURT OF
§
V. § HARRIS COUNTY, T EX AS
§
FRED LOMBARDO, NATIONAL §
CITY HOME LOAN SERVICES, INC., §
D/B/A FIRST FRANKLIN LOAN §
SERVICES, NATIONAL CITY BANK §
OF INDIANA, KEYSTONE ASSET §
MANAGEMENT, INC AND RICHARD §
HOWELL D/B/A ALEXANDER §
HUNTER PROPERTIES A/K/A §
ALEXANDER HUNTER PROPERTIES, INC. § 164TH JUDICIAL DISTRICT
NOTICE OF ORAL HEARING
A hearing on Plaintiff's Motion To Set Aside Order Denying Leave To Supplement
Pleadings, being filed contemporaneously herewith, is set for:
August 1, 2014, at 11:00 o'clock A.M.
in the courtroom of the 164'h District Court of Harris County, Texas.
Respectfully submitted,
(sf Michael Donovan
Michael Donovan
Texas Bar No. 00796478
6300 Dixie Drive
Houston, TX 77087
(713) 956-4043; (713) 956-4042 fax
mdonovanesq@yahoo.com
ATIORNEY FOR ALBERT ORTIZ
CERTIFICATE OF SERVICE
I certify that on July 18, 2014, a true and correct copy of this document was served on
all parties pursuant to Rule 21a of the Texas Rules of Civil Procedure.
Attorneys for Defendants:
Joel W. Mohrman I jmohrman@mcglinchey.com
Stephanie Laird Tolson I stolson@mcglinchey.com
McGlinchey Stafford PLLC
1001 McKinney Street, Suite 1500
Houston, TX 77002
Fax: 713-520-1025
Is/ Michael Donovan
Michael Donovan
TAB P
7/31/201410:27:05 AM
Chris Daniel- District Clerk Harris County
Envelope No. 2003509
By: CHANDA WILLIAMS
CAUSE NO. 2006-61178
ALBERT ORTIZ § IN THE DISTRICT COURT OF
Plaintiff §
§
\TS. §
§ HARRIS COUNTY, TEXAS
FRED LOMBARDO, NATIONAL CITY §
HOME LOAN SER\TICES, INC. DBA §
FIRST FRANKLIN LOAN SER\TICES; §
NATIONAL CITY BANK OF INDIANA; §
KEYSTONE ASSET MANAGEMENT, §
INC., and RICHARD HOWELL, DBA §
ALEXANDER HUNTER PROPERTIES §
AKA ALEXANDER HUNTER §
PROPERTIES, INC. §
Defendants. § 164'1H JUDICIAL DISTRICT
DEFENDANTS' RESPONSE TO PLAINTIFF'S MOTION TO SET ASIDE ORDER
DENYING LEAVE TO SUPPLEMENT PLEADINGS
Defendants Home Loan Services Inc. and National City Bank of Indiana
("Defendants") file this Response to Plaintiff's Motion to Set Aside Order Denying
Leave to Supplement Pleadings ("Plaintiff's Motion").
I.
INTRODUCTION
1. Plaintiff's motion seeks to set aside an order entered by this Court more
than four years ago and retry issues already decided by this Court's judgment and the
Court of Appeals' opinion. Plaintiff now seeks to add "new" causes of action and to
open the case up to additional discovery. This is beyond the scope of the Court of
Appeals' limited remand and would violate the "law of the case" doctrine (See Court of
Appeals Mandate at Exhibit "1"). Accordingly, Plaintiff's Motion must be denied.
484737.1
l
I.
RELEVANT PROCEDURAL BACKGROUND
2. Plaintiff seeks to amend his pleadings to add new causes of action for
fraud, trespass to try title, trespass, quiet title and for unfair debt collection practices
allegedly arising out of a rescission deed (See Plaintiff's proposed First Supplemental
Petition attached to Plaintiff's Motion). 1 The Court previously ruled that Plaintiff did
not need to amend his pleadings because any claims arising out of the rescission deed
were already plead or otherwise covered (See Pretrial Transcript at p. 51 lines 4-13 at
Exhibit "2"). The Plaintiff was allowed to enter the rescission deed as an exhibit,
submitted testimony regarding its existence and Ortiz's counsel argued at length about
the effect of the rescission deed during closing arguments (Plaintiff's Trial Exhibit 19
attached as Exhibit "3" and Trial Testimony attached as Exhibit" 4").
3. Each of these "new" claims was either ruled on as a matter of law or was
tried to a jury. The Court granted the Defendants a directed verdict on the fraud and
unfair debt collection claims (See Final Judgment attached as Exhibit "5" and Court of
Appeals' Mandate affirming the directed verdict at Exhibit "1"). The trespass and
1
Plaintiff also seeks to amend his answer to Defendant's counterclaims adding affirmative defenses
arising out of the rescission deed. Defendants concede that the limited remand allows for the Plaintiff to
amend his answer to plead additional affirmative defenses. Although Plaintiff may be allowed to plead
these defenses, they have no merit. The rescission deed was not valid at the time it was executed as the
borrower was not a party to the instrument. Further, the substitute trustee had no authority to execute the
rescission deed and thus it was void at execution. Bonilla v. Roberson, 918 S.W.2d 17 (fex.App.-Corpus
Christi 1996) Once a sale is complete, there is no further express or implied authority to act as the
mortgagor's agent in the cancellation or rescission of a sale. A trustee does not have the power to execute
a "Cancellation of Deed" purporting to take back title to the property and resurrect the underlying debt.
To imply a power in the trustee to nullify a sale after the sale is complete and the trustee's deed has been
executed, delivered, and filed, would be to give the trustee powers never specified or contemplated by
the deed of trust.
484737.1
2
trespass to try title claims were tried to a jury and Ortiz obtained an award for damages
for these claims (See Final Judgment at Exhibit "5" and Jury Charge at Exhibit" 6"). The
quiet title claim became moot when Ortiz obtained possession of the property prior to
the trial.
4. Ortiz did not appeal the directed verdicts on the fraud and unfair debt
collection claims. The Defendants did not appeal the award of tort damages to Plaintiff
other than the application of the "one satisfaction rule." The main issue on appeal was
the Court's interpretation of the letter agreements between the parties. Accordingly, H1e
Court of Appeals issued a very limited remand and specific instructions as to what is to
be retired (See Court of Appeals' Mandate at Exhibit "1").
5. This limited mandate does not allow for Plaintiff to amend his pleadings
to add these "new" causes of action or to amend his pleadings retry causes of action
that have been finally decided. The only amendment contemplated by the Court of
Appeals' instructions is to allow the parties to amend their arlSWers to assert affirmative
defenses. Accordingly, the Court must deny the Plaintiff's motion.
III.
ARGUMENT
6. The appellate rules permit the courts of appeals and the Supreme Court to
reverse and remand as to part of a case if that part is separable without unfairness to the
parties. 2 When the court of appeals limits its remand to particular issues, the trial
2Tex. R. App. Proc. 44.1(b). When the remand by the appellate court is unlimited in scope the case is
opened in its entirety. See Simulis, L.L.C. v. General Electric Capital Corporation, 392 S.W.3d 729, 731-732
(Tex.App.-Houston [14th Dist.] 2011, pet. denied). Following a reversal of a summary judgment on the
484737.1
3
court is restricted to such issues on retrial.3 In interpreting the mandate, the trial
courts should look not only to the mandate, but also to the opinion of the court of
appeals. 4
7. The Court of Appeals specified the only causes of action to be retried are
Plaintiff's claim against National City for breach of contract and National City's claims
against Plaintiff for breach of contract and for judicial foreclosure (Court of Appeals'
Mandate attached as Exhibit "1"). The Majority Opinion provides additional support
that the Court of Appeals intended a limited mandate excluding Plaintiff from pleading
additional tort claims. The Majority notes that "it can limit the scope of the remand to
the part affected by the error if that part is separable without unfairness to the parties"
citing to Tex. R. Civ. P. 44.l(b) (Majority Opinion at p. 28 at Exhibit "7"). The Majority
goes on to specifically identify the claims to be retried as the breach of contract claims
and the judicial foreclosure claims with no mention of any tort claims (Id. at p. 28). To
allow Plaintiff to amend his pleadings to add additional causes of action would violate
the limited mandate of the Court of Appeals.
issuance of quantum meruit, the court of appeals issued a remand that stated 'the trial court erred in
granting summary judgment as to Simulis' quantum meruit claim, and reverse that portion of the trial
court's judgment and remand for further proceeclings consistent with this opinion." On second appeal,
the court of appeals held that the first court of appeals remand was a general remand with no limiting
instructions which allowed the plaintiff to amend its pleadings and to add new claims. Id. at 734-735.
3 Hudson v. Wakefield, 711 S.W.2d 628, 630 (Tex. 1986) ("When this court remands a case and limits a
subsequent trial to a particular issues, the trial court is restricted to a determination of that particular
issue."). See Universihj of Texas System v. Ham;, 948 S.W.2d 481, 482-483 (Tex.App.-El Paso 1997) (on
appeal following jury trial on a worker's compensation claim, the court of appeals issued limited remand
when it stated that retrial was limited to issue of whether plaintiff incurred an injury on a certain date
and, if so, whether she received the injury in the scope of her employment. Trial court went beyond
remand when it tried other issues).
4 Id.
484737.1
4
 8. Additionally, the "law of the case" holds that questions of law decided on
appeal to a court of last resort will govern the case throughout subsequent stages. 5 A
determination by an appellate court that the evidence is legally insufficient to support a
finding involves a question of law and thus falls within the ambit of "law of the case." 6
The Defendants obtained a directed verdict on Plaintiff's fraud and unfair collection
practices claims. Those directed verdicts were specifically affirmed by the Court of
Appeals mandate. Accordingly, the finding of no evidence as to those claims has now
become law of the case and this portion of the Court's judgment cannot be re-litigated. 7
9. The trespass claims the Plaintiff seeks to add have been tried to a jury and
the Plaintiff was awarded damages for his loss of use. The award of those damages was
not appealed (other than the application of the one satisfaction rule). Plaintiff now
seeks the exact same award for his loss of use damages under his "new" claims. The
Plaintiff has had his opportunity to present evidence of his damages on trespass and
received an award of damages. s The Majority Opinion makes clear that the only issue
that remains pending on these claims is the application of the one satisfaction rule once
the parties' breach of contract claims against each other are retried (Majority Opinion at
p. 37 at Exhibit "7"). In neither the body of its Opinion nor its mandate does the
Majority provide for the retrial of any claim Ortiz had for loss of use damages.
s Id. ("By narro-wing the issues in successive stages of litigation, the law of the case doctrine is intended to
achieve uniformity of decision as well a judicial economy and efficiency.").
6 Lifshutz v. Lifsltutz, 199 S.W.3d 9, 20 (Tex. App. -San Antonio 2006, pet denied) (by upholding the trial
court's directed verdict on certain issues, the court of appeals established "law of the caseu on those
issues).
7 Id.
'The jury awarded Ortiz $100,000 in loss rental income against National City for breach, $77,000 for loss
rental income against HLS for trespass.
484737.1
5
10. Defendants respectfully request that Plaintiffs motion be denied and that
the Court retry this case in accordance with the limited instructions of the Court of
Appeals as set forth in the Court of Appeals' remand order.
Respectfully submitted,
McGLINCHEY STAFFORD
By: /s/ Stephanie Laird Tolson
Joel Mohrman
State Bar No. 14253500
Stephanie Laird Tolson
State Bar No. 11795430
1001 McKinney, Suite 1500
Houston, Texas 77002
Telephone: (713) 520-1900
Facsimile: (713) 520-1025
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing has been sent to all
counsel of record via facsimile on July 31, 2014:
VIA U.S. Mail and/ or Email
Michael C. Donovan
6300 Dixie Drive
Houston, Texas 77087
mdonovanesq@yahoo.com
Is/ Stephanie Laird Tolson
Stephanie Laird Tolson
484737.1
6
MANDATE
W~e lt!nurleent11 Ql:mrd uf i\ppcala
NO. 14-10-01125-CV
National City Bank of Indiana and Appealed from the !64th District Court
National City Home Loan Services, of Harris County. (Tr. Ct. No. 2006-
Inc., Appellants/Cross-Appellees 61178). Opinion delivered by Justice
Christopher. Justices Frost and Brown
v. also participating (Frost, J., dissenting).
Albert Ortiz, Appellee/Cross-Appellant
TO THE l64TH DISTRICT COURT OF HARRIS COUNTY, GREETINGS:
Before our Court of Appeals on May !6, 2013, the cause upon appeal to
revise or reverse your judgment was detennined. Our Court of Appeals made its
order in these words:
The court today heard appellee Albert Ortiz's amended motion for rehearing.
The court has duly considered the motion and found it meritorious in part. We
therefore order that the motion be granted in part and this court's former judgment
of November 20, 2D12, be vacated, set aside, and annulled. We further order this
court's opinion of November 20, 2012 withdrawn. We deny appellants' motion for
rehearing as moot.
This cause, an appeal from the judgment signed August !8, 201 0 in favor of
appellee, Albeit Ortiz, was heard on the transcript of the record. We have
inspected the record and find error in the judgment. We therefore
A. REVERSE the portions of the judgment
I
1. holding National City liable to Ortiz for actual damages,
interest, and attomeys' fees;
2. providing that National City takes nothing by its claims;
3. denying National City's request for judicial foreclosure;
4. declaring that the "Note and the Deed of Trust are fully,
completely, and finally satisfied and no past, present, or
further obligations or sums are or shall become due and
owing under sald Note and Deed of Trust";
5. providing that "all partial and/or interlocutory judgments
heretofore granted in this case are hereby made final and
incorporated into this l'inal Judgment"; and
6. specifying th.e amount of the actual dan1ages awarded against
HLS;
B. AFFIRM the portions of the judgment that were neither challenged
on appeal nor affected by our disposition of the issues as set tenth in
this court's opinion, that is, Ortiz's claims for fraud, common-Jaw
unreasonable debt-collection, statutory debt-collection violations,
statutory deceptive trade·practice violations, breach of oral contract,
promissory estoppel, theft, breach of bailment, invasion of privacy,
and defamation per se; and
C. REMAND the case with instructions to tl1e trial court to
(l) retry Ortiz's claim against National City for breach of contract
and National City's claims against Ortiz for breach of contract
and judicial foreclosure, and, with the exception of Ortiz's
limitations defense discussed in this court's opinion, permitting
the parties to assert defenses to these claims;
(2) after applying the one-satisfaction rule and any settlement
credits, determine the total amount of IlLS's liability to Ortiz
for actual damages and !he amounts, if any, that are owed by
National City to Ortiz or by Ortiz to Natiou.al City; and
(3) render a final judgment that is consistent with this court's
opinion.
We order appellee Albert Ortiz to pay all costs incurred in this appeal.
\Ve further order this decision certified below for observance.
WHEREFORE, WE COMMAND YOU to observe the order of our said
Court in this behalf and in all things have it duly recognized, obeyed, ami executed.
WITNESS, the Hon. Adele Hedges, Chief Justice of our Fourteenth Court
of Appeals, with the Seal thereofaffixed, at the City ofHouston, May 2, 2014.
CHR!STOPHER A. PRINE, Clerk
FILED fN
COURT OF APPEALS
II
.HOUSTON, TK
CHRlSTDl'HERJ'.: PH!NE, II
1 REPORTER'S RECORD CLERK ,J.,_,___j
TRIAL COURT CAUSE NUMBER 2006-611~,``r·--­
2 COURT OF APPEALS CASE NUMBER 14·10-01125-CV
VOLUME 7 OF 18
3
ALBERT ORTIZ IN THE DISTRICT COURT
4
v. HARRIS COUNTY, TEXAS
5
FRED LOMBARDO, et al. 164th JUDICIAL DISTRICT
6
7
8
9
10 *************************************************
11 JUNE 3, 2010
12 *************************************************
13
14
15
16
1'7 on the 3rd day of June, 2010, the following
18 proceedings came on to be heard in the above-entitled
19 and -numbered cause before the Honorable Alexandra
20 Smoots-Bogan, Judge Presiding, held in Houston,
21 Harris County, Texas.
22 Proceedings reported by Certified Shorthand
23 Reporter and Machine Shorthand/Computer-Aided
24 Transcription.
25
DONNA KING, CSR
164TH OFFICIAL REPORTER EXHIBIT
(713) 368-6256
2
1
2 A P P E A R A N C E S
3
4 FOR THE PLAINTIFF:
Mr. Mark A. Junell, SBN 24032610
5 THE JUNELL LAW FIRM, P.C.
3900 Essex, Suite 390
6 Houston, Texas 77027
Telephone: 281-768-3530
7 Facsimile: 832-213-1830
8 - and -
9 Mr. Gary Michael Block, SBN 02497200
Attorney at Law
10 7660 woodway, suite 590
Houston, Texas 77063
11 Telephone: 713-443-7722
Facsimile: 713-266-8528
12
13 FOR THE DEFENDANTS:
Mr. Joel Mohrman, SBN 14253500
14 Ms, Kari Robinson, SBN 24004891
McGLINCHEY STAFFORD, P.L.L.C.
15 1001 McKinney, suite 1500
Houston, Texas 77002
16 Telephone: 713-520-1900
Facsimile: 713-520-1025
17
- and -
18
Ms. Kristen Brauchle, SBN 24012326
19 BROCKMAN, BRAUCHLE & EVANS, P.L.L.C.
2020 Southwest Freeway, Suite 323
20 Houston, Texas 77098
Telephone: 713-224-6100
21 Facsimile: 713-533-0303
22
23
24
25
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
48
1 already been deposed --
2 MR. BLOCK: Yeah.
3 MS. ROBINSON: or it was around the
4 same time.
5 MR .. BLOCK: Around the same time.
6 MS. ROBINSON: So, you know, they never
7 asked for leave to file a new -- basically, new
8 claims.
9 MR. JUNELL: The problem is -- is that
10 they -- just a month or two earlier they had added
11 all these new counterclaims that they had never
12 been brought up before, and we argued about that. I
13 mean, if I got leave of the Court to
14 THE COURT: All right. All right. All
15 right. Stop. I'm going to allow the eighth amended
16 original petition. There. All right.
17 MR. B.LOCK: Your Honor, the last -- the
18 last item would be our motion for leave regarding the
19 supplemental petition and answer.
20 THE COURT: When was the supplemental
21 petition and answer?
22 MR. BLOCK: That was filed --
23 THE COURT: Oh, wait, wait.
24 MR. BLOCK: --Friday, I think, Judge,
25 or maybe -- no. Monday.
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
49
1 THE COURT: Monday of what -- of this
2 week?
3 MR. BLOCK: Yeah. It's based on what
4 we discovered on May 11th.
5 THE COURT: The deed?
6 MR. BLOCK: The -- yes, ma'am. Well,
7 not just the deed, but also the information from the
8 depositions, specifically the Barrett Burke
9 deposition. And --
10 MR. JUNELL: And it's -- and it's an
11 answer to their claims.
12 MR. BLOCK: It -- it -- well, there --
13 it's supplemental, Judge. It -- it -- basically what
14 it does, Your Honor, is it does a suit to quiet title
15 because that wasn't pled because we didn't know about
16 the -- the rescission deed to be able to -- to prove
17 up the objection we have to the rescission
18 instrument, which is the deed of trust and the note.
19 It does trespass to try title.
20 Pretty much that's -- that's it, Judge.
21 I mean, everything else is -- is pretty much the
22 same. And as far as the answer -- it's the same
23 thing. It all goes right to those issues.
24 THE COURT: Response.
25 MS. ROBINSON: Yes, Your Honor. The
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
50
1 new evidence that they cite in their motion to file
2 their supplemental pleadings this is that
3 rescission instrument. When we went through their
4 expert's file-- their expert had it for a year. How
5 long has he had it in his file? I mean, they say
6 they don't know about it, but they are the ones that
7 produced that file to me. So
8 MR. BLOCK: Judge
9 MS. ROBINSON: If they don't know the
10 contents of their expert's file they knew about it
11 before we did. we got that expert file April the 9th
12 at -- at the deposition, and no one went through each
13 document with the witness. And when we were
14 preparing for trial, we saw this rescission
15 instrument. You know, this was after the production
16 by Barrett Burke, but the fact remains, the Plaintiff
17 had this in
18 MR. BLOCK: No.
19 MS. ROBINSON: in their possession,
20 and they could've discovered it before we did.
21 MR. BLOCK: Your Honor, that is
22 100 percent untrue, and if I need to actually testify
23 on this, I'll be happy to, and I -- I can have
24 Mr. Sikes come down here in person or be available by
25 telephone right now to -- to go over this. I will
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
51
1 tell you that, first of all
2 THE COURT: Stop. Here's what I'm
3 going to do. I'm going to deny the motion for leave
4 to file the first supplemental petition. You don't
5 need it. You have other causes of action that easily
6 the deed would come under. You don't need another
7 trespass to try title. And on top of that, I suspect
8 one of the umpteen thousand causes of action that are
9 here will answer any and all questions with respect
10 to whose house it is at the end of the day.
11 MR. BLOCK: And the supplemental
12 answer, Your Honor?
13 THE COURT: It's out too,
14 So, anythi~g else?
15 MR. MOHRMAN: Yes, Your Honor, just a
16 couple of housekeeping measures. One, we had
17 subpoenaed for trial three different witnesses. Can
18 we have those subpoenas carried over to the next
19 trial date still effective without having to go out
20 and re-subpoena those folks?
21 THE COURT: That's fine with me.
22 MR. MOHRMAN: All right. Then also, of
23 course, the Court, as part of its pre-trial, had
24 asked us to prepare jury charges. Do you want us to
25 hold on to those and give those to you when we come
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
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3
BAR 00060
National City its !1UCCOS5ors .and z s . , to the e:rtcnt JO-<::CO.S"')' lo re-vest legal ti!le to the .
Property to Albert Ottiz, hertby conveys ro Albert Olili the Proptr.y; li\!b)ect, however, to the l9J2;
indtb!alness e>idenced by the NiM and the li= and =n:lty iotc;n:sts oecu.-in& payment of tl:e No!e,
and olhet encumbrances, ttsuiuliuas ~nd coyeuattts of reccml, in<;!uding wirhout llml!alion the. Deed of
Trust and a!l othor ooTh!terel )om inslmtncnts executed Ul porchao¢, Eou,;oo, Tc.= 71007.
'10 RAVE A.'ID TO HOLD, the~. !iUbjt:ct to 1he mallets hetcinabove s.et fucth,. togttbec
~;ith ..U and singular the ri.gbt.l! and appurtemnccs lhm:to in anywi.se belonging= Albert Orllz
hlslhelitheir suocossors and assigns, forever. This coovey~ is li!llde wlthout v.";l!:mlty, express ar
implic:ts olh""'.se edVllllccd by National City llllder !.he temis of the No!~.
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BAR 00062
. I'ILED!N
i . . 14'"COURTOF APPEAlS
.HOUSTON, TX
CHRiSTOPHER A'''"'"'
1 REPORTER'S RECORD CcERK
TRIAL COURT CAUSE NUMBER 2006-6117!.;·------~·1---·
2 COURT OF APPEALS CASE NUMBER 14-10-01125-CV
VOLUME 6 OF 18
3
ALBERT ORTIZ, et al. IN THE DISTRICT COURT
4
v. HARRIS COUNTY, TEXAS
5
FRED LOMBARDO, et al. 164th JUDI-CIAL DISTRICT
6
7
B
9
10
11
*************************************************
12
JUNE 1, 2010
13
*************************************************
14
15
16
17 on the 1st day of June, 2010, the following
18 proceedings came on to be heard in the above-entitled
19 and -numbered cause before the Honorable Alexandra
20 Smoots-Hogan, Judge Presiding, held in Houston,
21 Harris County, Texas.
22 Proceedings reported by Certified Shorthand
23 Reporter and Machine Shorthand/Computer-Aided
24 Transcription.
25
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
2
1
2 A P P E A R A N C E S
3
4 FOR THE PLAINTIFF:
Mr. Mark A. Junell, SEN 24032610
5 THE JUNELL LAW FIRM, P.C.
3900 Essex, suite 390
6 Houston, Texas 77027
Telephone: 281-768-3530
7 Facsimile: 832-213-1830
8 - and -
9 Mr. Gary Michael Block, SEN 02497200
Attorney at Law
10 7660 woodway, Suite 590
Houston, Texas 77063
11 Telephone: 713-443-7722
Facsimile: 713-266-8528
12
13 FOR THE DEFENDANTS:
Mr. Joel Mohrman, SEN 14253500
14 Ms. Kari Robinson, SEN 24D04891
McGLINCHEY STAFFORD, P.L.L.C.
15 1001 McKinney, Suite 1500
Houston, Texas 77002
16 Telephone: 713-520-1900
Facsimile: 713-520-1025
17
- and -
18
Ms. Kristen Brauchle, SEN 24012326
19 BROCKMAN, BRAUCHLE & EVANS, P.L.L.C.
2020 Southwest Freeway, suite 323
20 Houston, Texas 77098
Telephone: 713-224-6100
21 Facsimile: 713-533-0303
22
23
24
25
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
3
1 I N D E X
2 PAGE LINE
3 Proceeding --------------------------- 14 1
4 Court Reporter's Certificate --------- 280 1
5
PLAINTIFF'S EXHIBITS
6
NO. DESCRIPTION PRE-ADMITTED
7
1 Promissory Note 10 2' 14
8
2 Deed of Trust 102' 14
9
3 Ortiz Birdsall Property
10 Lease with Former Owners 102' 14
11 4 Mailing Address Confirmation 102' 14
12 5 Insurance Certification 102' 14
13 6 Lombardo Letter Agreement 1 10 2' 14
14 7 Lombardo Letter Agreement 2 10 2' 14
15 8 HLS 10-Day Abandonment Letter 102' 14
16 9 substitute Trustee's Deed 102' 14
17 10 Waiver Letter with Gary Stockey
Cover Letter and 1099-A 102' 14
18
11 Waiver Letter 10 2' 14
19
12 Order Granting Summary Judgment
20 on Wrongful Foreclosure 102' 14
21 13 Childress Letter Requesting
Possession of Birdsall 102' 14
22
14 Mr. Leyh's Letter -Notice
23 of Default 102' 14
24
25
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
4
1 PLAINTIFF'S EXHIBITS
2 NO. DESCRIPTION PRE-ADMITTED
3 15 Mr. Donovan's Response Letter
to Mr. Leyh 102' 14
4
16 Mr. Leyh's Letter - Notice of
5 Substitute Trustee's Sale 102' 14
6 17 Mr. Donovan's Response Letter
to Mr. Leyh 102' 14
7
18 Order Granting Summary Judgment
8 Take Nothing on Defendants'
Counterclaims XX
9
19 Rescission of Substitute
10 Trustee's Deed 102' 14
11 20 Defendants' Notice Regarding
the Property XX
12
21 Plaintiff's Notice Regarding
13 the Property XX
14 22 Affidavit of Byron Blevins XX
15 23 Mark Sikes' Expert Report XX
16 24 IMS Production from
May 7, 2010, Deposition XX
17
25 Barrett Burke's Custodian of
18 Records Affidavit 102' 15
19 26 HLS Referral Letter and
Instructions to Barrett Daffin 102' 15
20
27 Barrett Daffin's Full Production
21 from May 6, 2010, Deposition 102' 15
22 28 Barrett Daffin's Foreclosure
Comments 102' 15
23
29 Barrett Daffin's Litigation
24 Comments 102' 15
25 30 HLS's Net Worth Statement 102' 16
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
5
1 PLAINTIFF'S EXHIBITS
2 NO. DESCR.IPTION PRE-ADMITTED
3 31 National City's Net
Worth Statement 102' 16
4
32 Letter to Kari Robinson
5 from Mark Junell
1/20/10 102, 17
6
33 Ortiz Video of Property
7 Inspection 102, 17
8 34 HLS Service Notes 102, 17
9 35 HLS Service Notes and
Letter Logs 102, 17
10
36 Keystone Call Notes 102, 17
11
37 Keystone Contract with HLS 102, 17
12
38 Keystone Contract with
13 Richard Howell 102, 17
14 39 Richard Howell MLS Listing XX
15 40 Affidavit of Gary Stookey XX
16 41 HLS Property Preservation
and Collection Procedures 102' 18
17
42 Plaintiff's Attorney Fee
18 Statements and Agreements 102' 18
19 43 Ortiz canceled Checks 102' 18
20 44 Ortiz Payment History 102' 18
21 45 Defendants' Answers to
Request for Admissions
22 and Interrogatories 102' 18
23 46 Defendants' Responses to
Request for Disclosure 102' 18
24
25
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
6
1 DEFENDANTS' EXHIBITS
2 NO. DESCRIPTION PRE··ADMITTED
3 1 Deed of Trust 113' 11
4 2 Note 113' 11
5 3 Servicing Notes 113' 11
6 4 Payment History '05-'07 113' 11
7 5 Corporate Assignment of
Deed of Trust 113' 11
8
6 Purchase Contract Between
9 Ortiz and the Winstons 113' 11
10 7 Loan Application 113' 11
11 8 credit Report 113, 17
12 9 Occupancy Declaration 113, 17
13 10 Warranty and Compliance
Agreement 113, 17
14
11 HUD Settlement Statement 113' 17
15
12 Loan Application Signed
16 at Closing 113, 17
17 13 Hazard Insurance Requirements 113' 17
18 14 Borrower's Certification and
Authorization 113, 17
19
15 Notice of Policy 113, 17
20
16 Confirmation of Cancellation
21 of Hazard Insurance 113' 18
22 17 Letter Agreement Regarding
Credit Reporting 113' 18
23
18 Letter to Mr. Ortiz 113' 18
24
19 Hazard Insurance Requirement
25 Notice 113' 18
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
7
1 DEPENDANTS' EXHIBITS
2 NO. DESCRIPTION PRE-ADMITTED
3 20 Letter to Mr. Ortiz 113' 18
4 21 Fax from Mr. Lombardo to
Mr. Donovan Enclosing
5 Letter Regarding Correction
to Credit Bureau 113' 18
22 Letter Agreement Regarding
7 Credit Reporting 113' 18
8 23 Correspondence from Fred
Lombardo Regarding Credit
9 Reporting 113' 18
10 24 Notice of Lapse of Coverage 113' 18
11 25 Policy Placing Coverage
Effective 4/20/05 113' 18
12
26 Breach Letter - Notice of
13 Intent to Accelerate 113' 18
14 27 11/8/05 Letter to Mr. Ortiz
Regarding Vacancy 113, 18
15
28 confirmation of Cancellation
16 of Hazard Insurance 113' 18
17 29 Letter from Mr. Donovan 113' 18
18 30 Donovan Representation Letter 113' 19
19 31 Letter from Barrett Burke to
Mr. Donovan Enclosing Notice
20 of sale, Default Letter, and
Payoff Quote 113 t 19
21
32 Letter from Barrett Burke to
22 Mr. Donovan Enclosing
Reinstatement 113' 19
23
33 Letter from Mr. Donovan to
24 Karen Kwolek to Discuss
Ortiz Account with Glenn
25 Patterson 113' 19
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
8
1 DEFENDANTS' EXHIBITS
2 NO. DESCRIPTION PRE-ADMITTED
3 34 Notice of Trustee Sale 113' 19
4 35 Fax from Mr. Donovan with
Petition 113' 19
5
36 Letter from Mr. Donovan to
6 Mr. Fedoronko to Complete
the Short Sale 113' 19
7
37 Letter from Gary Stookey to
8 Mr. Donovan with First
Letter Agreement and 1099 113, 20
9
38 Second Letter Agreement 113, 20
10
39 Substitute Trustee's Deed 113, 20
11
40 Keystone REO Notes 113, 20
12
41 Keystone Pictures 113, 20
13
42 Plaintiff's Settlement with
Richard Howell 113, 20
14
15 43 Keystone Directions to
Richard Howell 113' 22
16
44 Right to Sell Agreement
17 Richard Howell and Keystone 113' 22
18 45 Appraisal 113' 22
19 46 Patterson Records Regarding
G.H. Reid 113' 22
20
47 Patterson Records Regarding
21 G.H. Reid 113, 22
22 48 Letter to Mr. Donovan from
Ms. Baldassano 113' 22
23
49 Letter to Mr. Donovan from
24 Ms. Baldassano 1.13' 23
25
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
9
1 DEFENDANTS' EXHIBITS
2 NO. DESCRIPTION PRE-ADMITTED
3 50 Application for Registration
of a Foreign Limited
4 Liability Company 113' 23
5 51 Pictures of the Property 113' 23
6 52 Hazard Process Notes 113' 23
7 53 Tax Process Notes 113' 23
8 54 Escrow Analysis 113' 24
9 55 Procedure - Fundamentals of
a Collection Call 113' 24
10
56 IMS Business Records 113' 24
11
57 Deposition of Noel West,
12 Peggy West Records 113' 24
13 58 Saucier Records 113' 24
14 s9 McGlinchey Stafford Invoices 113' 24
15 60 Mr. Ortiz's Fee Agreement
with Mr. Donovan 113' 24
16
61 H-97-2197 - First Amended
17 Original Complaint XX
18 62 1999-03217 - original Petition XX
19 63 1999-03218 - Petition to Vacate
or Modify Arbitration Award XX
20
64 1999-28590 - Original Petition XX
21
65 1998-44063 - Second Amended
22 original Petition XX
23 66 2000-02147 - Petition Requesting
Deposition XX
24
67 2000-28304 - First Amended
25 Original Petition XX
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
10
1 DEFENDANTS' EXHIBITS
2 NO. DESCRIPTION PRE-ADMITTED
3 68 2001-01898 - original Petition
for Injunction and Damages XX
4
69 2000-01263 - Fifth Amended
5 Original Petition XX
6 70 2001-04570 - Second Amended
Original Petition for
7 Injunction and Damages XX
8 71 2001-54861 - Petition to
Vacate or Modify
9 Arbitration Award XX
10 72 2001-56742 - Petition Requesting
Oral Depositions XX
11
73 2002-29333 - Original Petition XX
12
74 2004-00972 - Original Petition XX
13
75 2004-03346 - First Supplemental
14 Petition XX
15 76 2004-52032 - Application for
Order compelling Appearance
16 at Deposition XX
17 77 2003-47081 - Fourth Amended
original Petition XX
18
78 2005-19480 - Original Petition XX
19
79 2005-16065 - Amended original
20 Petition XX
21 80 2005-25982 - First Amended
original Petition XX
22
81 2006-35252 - First Amended
23 Original Petition XX
24 82 2005-59966 - second Amended
Original Petition XX
25
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
11
1 DEFENDANTS' EXHIBITS
2 NO. DESCRIPTION PRE-ADMITTED
3 83 2005-60488 - Third Amended
Original Petition XX
4
84 2007-20857 - Second Amended
5 Original Petition XX
6 85 2008-57161 - First Amended
original Petition XX
7
86 2009-18253 - First Amended
8 Original Petition XX
9 87 2009-42174 - Original
Petition XX
10
88 748,057 - original Petition XX
11
89 2006-61178 - Eighth Amended
12 Original Petition XX
13 90 748,057 - Original Petition XX
14 91 752,821 - Petition Requesting
Depositions XX
15
92 809,265 - Original Petition
16 with Application for TRO XX
17 93 809,513 - Original Petition XX
18 94 813,000 - Petition Requesting
Deposition XX
19
95 822,517 - Fourth Amended
20 Original Petition XX
21 96 834,219 - Original Petition XX
22 97 838,610 - original Petition XX
23 98 845,055 - Original Petition
with Application for TRO XX
24
99 867,786 - Original Petition XX
25
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
12
1 DEFENDANTS' EXHIBITS
2 NO. DESCRIPTION PRE-ADMITTED
3 10 0 867,7as -Original Petition XX
4 101 868,048 - Original Petition XX
5 10 2 905,054 - Petition for Writ
of Mandamus XX
6
103 826,343 - Second Amended
7 Original Petition XX
8 10 4 01-08-05401-CV - Third
Amended original Petition XX
9
105 Mark Sikes• Retention
10 Agreement with Ortiz 114, 8
11 10 6 Appraisal of Thomas Smithee
for G.H. Reid XX
12
107 Rescission Deed 114, 9
13
108 Birdsall ATO 114, 9
14
109 Photo of 105 Birdsall 114' 9
15
110 Photo of Back Yard 114, 9
16
111 Photo of Bath 1 114, 9
17
112 Photo of Birdsall Garage
18 Damage 114, 9
19 113 Photo of Birdsall Garage
Damage 4 114, 9
20
114 Photo of Bedroom 2 114, 9
21.
115 Photo of Damaged Ceiling 114' 10
22
11.6 Photo of Kitchen Sink
23 Missing 114. 10
24 117 Photo of Damaged Railing 114' 10
25 118 Photo of Rotten French Door 114. 10
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
13
1 DEFENDANTS' EXHIBITS
2 NO. DESCRIPTION PRE-ADMITTED
3 119 Photo of Dining Room 1 114, 10
4 120 Photo of Dining Room
Birdsall ATO 114, 10
5
121 Photo of Bath 1 114, 10
6
122 Photo of Bath 2 114, 10
7
123 Photo of Bath 3 114' 10
8
124 Photo of Garage 114, 10
9
125 Photo of Master Bath 1 114, 10
10
126 Photo of Haster Bath 2 114, 10
11
127 Photo of Patio 114, 10
12
128 Photo of Stairway 114, 10
13
129 E-mail dated April 6 ' 2009 114, 10
14
130 E-mail dated April 16, 2009 114, 10
15
131 E-mail dated April 2 0 r 2009 114, 10
16
132 E-mail dated May 5 ' 2009 114, 11
17
133 E-mail dated Hay 20, 2009 114, 11
18
134 Hazard Insurance Requirement
19 Notice 114, 11
20 135 Notice of Lapse of Coverage 114, 11
21 136 Leyh Letter - Notice of
Default 114, 11
22
137 Leyh Letter - c/o Michael
23 Donovan 114, ll
24
25
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
102
1 THE COURT: Well - - so I'm not
2 pre-admitting it unless you need it for
3 MR. BLOCK: Very good.
4 THE COURT: -- >lha tchacall it,
5 impeachment. All right. Next.
6 MR. MOHRMAN: Those conclude my
7 objections to opposing --
8 THE COURT: All right. So then you're
9 fine with pre-admitting all the rest of them? Is
10 that correct, Mr. Mohrman?
11 MR. MOHRMAN: Correct. Correct,
12 Your Honor.
13 THE COURT: All right. So Plaintiff's
14 1 through 17 are admitted. Plaintiff's 19 are
15 admitted. Plaintiff's -- what does that say? -- 25
16 through 29 are admitted. Plaintiff's 30 and 31 are
17 admitted. Plaintiff's 32 through 38 are admitted.
18 Plaintiff's 41 through 46 are admitted.
19 All right. End of Plaintiff's.
20 Defendants •.
21 MR. JUNELL: Give -- give me one
22 second.
23 MR. MOHRMAN: Judge, if I could, I
24 think I may be able to peruse these and save us a
25 little bit of time real quickly.
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
fiL£D IN
!+'"COURT OF APPE!ll.S
,HOUSTON, TX
iA.PRl!
1 REPORTER'S RECORD
TRIAL COURT CAUSE NUMBER 2006-6!h.,.C"~"-------i-J
2 COURT OF APPEALS CASE NUMBER 14-10-01125-CV
VOLUME 9 OF 18
3
ALBERT ORTIZ IN THE DISTRICT COURT
4
v. HARRIS COUNTY, TEXAS
5
FRED LOMBARDO, et al. 164th JUDICIAL DISTRICT
6
7
8
9
10
11
*************************************************
12
JUNE 16, 2010
13
*************************************************
14
15
16
17 On the 16th day of June, 2010, the following
18 proceeding came on to be heard in the above-entitled
19 and -numbered cause before the Honorable Alexandra
20 Smoots-Hogan, Judge Presiding, held in Houston,
21 Harris County, Texas.
22 Proceeding reported by Certified Shorthand
23 Reporter and Machine Shorthand/Computer-Aided
24 Transcription.
25
DONNA KING, CSR
164TH OFFICIAL REPORTER EXHIBIT
l ______.4~-
(713) 368-6256
2
1
2 A P P E A R A N C E S
3
4 FOR THE PLAINTIFF:
Mr. Mark A. Junell, SBN 24032610
5 THE JUNELL LAW FIRM, P.C.
3900 Essex, Suite 390
6 Houston, Texas 77027
Telephone: 281-768-3530
7 Facsimile: 832-213-1830
8 - and -
9 Mr. Gary Michael Block, SEN 02497200
Attorney at Law
10 7560 Woodway, suite 590
Houston, Texas 77063
11 Telephone: 713-443-7722
Facsimile: 713-266-8528
12
13 FOR THE DEFENDANTS:
Mr. Joel Mohrman, SBN 14253500
14 Ms. Kari Robinson, SEN 24004891
McGLINCHEY STAFFORD, P.L.L.C.
15 1001 McKinney, Suite 1500
Houston, Texas 77002
15 Telephone: 713-520-1900
Facsimile: 713-520-1025
17
· and -
18
Ms. Kristen Brauchle, SBN 24012326
19 BROCKMAN, BRAUCHLE & EVANS, P.L.L.C.
2020 southwest Freeway, Suite 323
20 Houston, Texas 77098
Telephone: 713-224-6100
21 Facsimile: 713-533-0303
22
23
2 ·1
25
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
3
1
2 I N D E X
3 PAGE LINB
4 Proceeding -"----------------------- 4 1
5
PLAINTIFF'S
6 WITNESSES DIRECT CROSS
7 Albert Ortiz 7, 1 195, 24
8
9 PAGE LINB
10 Court Reporter's Certificate ------- 216 1
11
12 PLAINTIFF'S EXHIBITS
13 NO. DESCRIPTION OFFER ADMIT
14 23 Photos 59, 4 59' 14
15 47 Photos made from video
of 105 Birdsall 110' 21 111' 9
16
17
18
19
20
21
22
23
24
25
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
181
1 Q May 7th. Is that • 09?
2 A Yes.
3 Q Okay. And do -- have you ever seen this
4 document before?
5 A Yes, recently.
6 Q Okay. When was the first time that -- that
7 you saw this rescission and reconveyance deed?
8 A It was the end of May.
9 Q Of what year?
10 A I'm sorry. End of May of 2010, about --
11 less than a week before I took possession of the
12 home my home.
13 Q I mean, a week af -- a week before?
14 A Week before May 23. Somewhere in there,
15 Q Okay. And -- and -- and if you would,
16 please the substitute trustee's deed -- see, I'm
17 trying to use my pen here. See if I can -- there we
18 go. The notice of -- deed of trust -- see -- see
19 that?
20 A 11 Reinstate" ~- yes, sir.
21 Q Right. Okay. And above that, II the
22 substitute Trustee's Deed•
23 A Right. Reference
24 Q •dated June 6"
25 A 2006. Yes, sir~
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
182
1 Q •is hereby rescinded"
2 A Right.
3 Q •and deemed void . . of no effect for
4 all purposes." Did I read that right?
5 A Yes, sir.
6 Q Go to the second page, zoom out. It's dated
7 April 17th. Do you see who it's signed by?
8 A Bryan Kusich.
9 Q Have you ever heard of Bryan Kusich before?
10 A Not before seeing this document.
11 Q Okay. It's also signed by Thomas Reder
12 March lOth of '09. Have you ever heard of Thomas
13 Reder before?
14 A I believe he's the original substitute
15 trustee.
16 Q And then -- remember? The -- the trustee's
17 deed had that little address to return things to.
18 A Yes~ sir.
19 Q Is that the same law firm? Little different
20 name, but --
21 A Yes. My understanding is the same firm.
22 Q Did anybody from either Barrett Daffin --
23 Mr. Leyh's office ever provide to you or your lawyers
24 a copy of this?
25 A The attorneys didn't. Neither did
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
183
1 Defendants. No, sir~
2 Q Not until
3 A Not until
4 Q -- May 11th or 12th?
5 A Somewhere in there. Right.
6 Q I'm going to show you -- I'm going to go
7 back to Page Number 2 of this, blow this up, if I can
8 work the machine.
9 A May of 2010.
10 Q That was when you -- when
11 A Right. You said May, but just
12 Q Oh, okay.
13 A -- 2010.
14 Q Look at the -- at the very bottom of that
15 top paragraph.
16 A Okay.
17 Q The grantee's address is 105 Birdsall,
18 Houston, 77007.
19 A Oh, okay. Right. Right. I see it.
20 Q Okay. Now, the grantee i.s you?
21 A Yes.
22 Q Is that your address?
23 A No.
24 Q You wish? or wished?
25 A I mean~ it is now, I mean, but - -
DONNA KING, CSR
l64TH OFFICIAL REPORTER
(713) 368··6256
184
1 Q Right.
2 A Right.
3 Q Okay. Before May 11th or 12th of 2010, did
4 you have any inkling at all that the property was put
5 back in your name?
6 A No idea whatsoever.
7 Q okay. Again, file -- this happened to be
8 ~lay of '09 --May 7th of '09, right?
9 A That's when it was filed. Right.
10 Q okay.
11 A Yes, sir.
12 Q Now, in July of 2009, you were able to go
13 back onto the property; is that right?
14 A Yes, to take -- make a video of the place.
15 Yes.
16 Q Okay. At the time that you went back there,
17 in July of '09, did you have any idea the property
18 was put back in your name?
19 A No, because they wouldn't let us in without
20 an escort or
21 Q Okay.
22 A -- chaperone, whatever.
23 Q I'm going to play for you right now, if I
24 can figure out how to work my computer contraption
25 this is the video that you took. It's been admitted
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
F!!.EDlN
'--14tltCOUHTOF APPEALS
HOUSTON,TX
- cf!R:lS'foi'liER'iCPRINE,
1 REPORTER'S RECORD CLER 1'{ il
TRIAL COURT CAUSE NUMBER 2006-611 .~------1----..J
2 COURT OF APPEALS CASE NUMBER 14-10-01125-CV
VOLUME 10 OF 18
3
ALBERT ORTIZ IN THE DISTRICT COURT
4
v. HARRIS COUNTY, TEXAS
5
FRED LOMBARDO, et al. 164th JUDICIAL DISTRICT
6
7
8
9
10
11 *************************************************
12 JUNE 17, 2010
13 *************************************************
14
15
16
17 on the 17th day of June, 2010, the following
18 proceeding came on to be heard in the above-entitled
19 and -numbered cause before the Honorable Alexandra
20 Smoots-Hogan, Judge Presiding, held in Houston,
21 Harris County, Texas.
22 Proceeding reported by Certified Shorthand
23 Reporter and Machine Shorthand/Computer-Aided
24 Transcription.
25
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
2
1
2 A P P E A R A N C E S
3
4 FOR THE PLAINTIFF:
Mr. Mark A. Junell, SBN 24032610
5 THE JUNELL LAW FIRM, P.C.
3900 Essex, Suite 390
6 Houston, Texas 77027
Telephone: 281-768-3530
7 Facsimile: 832-213-1830
8 - and -
9 Mr. Gary Michael Block, SBN 02497200
Attorney at Law
10 7660 Woodway, Suite 590
Houston, Texas 77063
11 Telephone: 713-443-7722
Facsimile: 713-266-8528
12
13 FOR THE DEFENDANTS:
Mr. Joel Mohrman, SBN 14253500
14 Ms. Kari Robinson, SBN 24004891
McGLINCHEY STAFFORD, P.L.L.C.
15 1001 McKinney, Suite 1500
Houston, Texas 77002
16 Telephone: 713-520-1900
Facsimile: 713-520-1025
17
- and -
18
Ms. Kristen Brauchle, SEN 24012326
19 BROCKMAN, BRAUCHLE & EVANS, P.L.L.C.
2020 southwest Freeway, suite 323
20 Houston, Texas 77098
Telephone: 713-224-6100
21 Facsimile: 713-533-0303
22
23
24
25
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
3
1 I N D E X
2 PAGE LINE
3 Proceeding -------------------------- 4 1
4
PLAINTIFF'S VOIR
5 WITNESSES DIRECT CROSS DIRE
6 Albert Ortiz 171' 3
263, 23 282, 23
7
DEFENDANTS' VOIR
8 W.TTNESSES DIRECT CROSS DIRE
9 Gary Fedoronko 2 0' 17 3 3' 13
3 4' 18 6 5' 10
10 14 9' 7 162' 15
11
PAGE LINE
12
court Reporter's Certificate -------- 297 1
13
14
PLAINTIFF'S EXHIBITS
15
NO. DESCRIPTION OFFER ADMIT
16
32A February 2, 2010, letter
17 from Kari Robinson
to Mark Junell 272, 18 273, 1
18
19
20
21
22
23
24
25
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
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1 trespassing. I wouldn't be risking criminal
2 prosecution. I wouldn't be risking, you know,
3 defying the law or anything by -- by going in there
4 because at that this point, a couple of weeks ago,
5 I was -- I was aware that the property was under my
6 name. It was no longer under, you know, National
7 City's name.
8 Q so you are saying that up until the time --
9 we've seen this rescission deed or instrument that
10 was filed about a
11 A Uh-huh.
12 Q -- year or so ago -- year ago. Are you
13 saying up until that time, you believed you didn't
14 have the legal right to be in the property?
15 A I believed that a wrongful foreclosure
16 I -- I believe that a foreclosure was wrongful, but
17 until that foreclosure was deemed wrongful or until
18 we undid the foreclosure, I wasn't going to break in.
19 As upset as I was, as much as I felt the foreclosure
20 should never have happened, until it was reversed or
21 rescinded, I wasn't going to break in.
22 Q What changed your mind that gave you, all of
23 a sudden, the green light to go ahead and change the
24 locks?
25 MR. BLOCK: Objection, Your Honor. Can
DONNA KING, CSR
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1 we approach the bench, please?
2 THE COURT: sure. Come on up.
3 (At the bench, with bench noise on.)
4 MR. BLOCK: The -- the true answer is
5 based on attorney advice, so it's delving into some
6 attorney/client privileged matters. In other words,
7 since I've been on the case--
8 THE COURT: Uh-huh.
9 MR. BLOCK: -- I have I have
10 specifically advised him against doing any such
11 thing. Of course, that wasn't --
12 THE COURT: Yeah. But I think he's
13 just asking what, in his own mind, made him think,
14 "Okay. I'm cool now to go ahead•
15 I presume
16 MR. MOHRMAN: If --
17 THE COURT: I mean, you're not actually
18 asking him for attorney/client privileged
19 information
20 MR. MOHRMAN: Of course not.
21 THE COURT: -- are you?
22 MR. MOHRMAN: I mean, if he said •my
23 attorney advised me,• I'm not going to ask
24 MR. BLOCK: But -- but I
25 MR. MOHRMAN: him what he said.
DONNA KING, CSR
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196
1 MR. BLOCK: Yeah. So, I mean, I didn't
2 know if that's -- I -- I don't know how Mr. Ortiz was
3 going to answer, but I know the conversations I've
4 had with my client.
5 THE COURT: Well, that's fine. But to
6 the extent he's not about to just divulge a bunch of
7 stuff that you all talked about, that's fine.
8 And to the extent that you were
9 attempting to ask such a thing -- which, I don't
10 think you were, but if you were
11 MR. MOHRMAN: I'm not
12 THE COURT: Please don't ask for any
13 attorney/client privileged information.
14 MR. BLOCK: I don't think he was trying
15 to -- attorney/client privilege.
16 THE COURT: Okay. Good.
17 MR. BLOCK: But --
18 THE COURT: Okay. We're all on the
19 same page then.
20 (Open court.)
21 THE COURT: All right. You may
22 proceed, Mr. Mohrman.
23 MR. MOHRMAN: Thank you, Judge.
24 Q (BY MR. MOHRMAN): Mr. Ortiz, I think what I
25 was asking you is what happened to cause you to
DONNA KING, CSR
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1 believe you had the green leg -- green light to go in
2 and change the locks?
3 A Well, I knew that the rescission deed had
4 been filed, I think a year and three months ago or
5 whatever it was, and that the -- that was a
6 game-changer, the -- the property was under my name.
7 Q Okay. so prior to the filing of the
8 rescission deed, instrument, whatever you want to
9 call it a year -- three months ago -- you did not
10 believe that you had the right to go in at that point
11 in time; is that correct?
12 MR. BLOCK: If the question is not
13 calling for a legal conclusion --
14 MR. MOHRMAN: I'm asking what he
15 believes, Your Honor.
16 MR. BLOCK: Just making sure.
17 THE COURT: That's fine. Overruled.
18 Answer the question.
19 A Okay. I'm sorry. Could you
20 Q (BY MR. MOHRMAN): Sure. I ' l l --
21 A You said prior to the rescission deed? Is
22 that what you said?
23 Q Right. Let me -- let me just say it again
24 so we're all--
25 A Okay.
DONNA KING, CSR
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198
1 Q -- on the same page.
2 A Okay.
3 Q Prior to the rescission deed or instrument,
4 you believe that you did not have the present right
5 to go in and change the locks on the property; is
6 that correct?
7 A I was aware of the foreclosure. As much
8 as emphatically as I believed it was wrongful, it did
9 happen, it was recorded, and I was going to respect
10 it until we could overturn it or somehow work it out.
11 Q Okay. And so you believe that you didn't
12 have the right to go in there at that point in time,
13 until you found out about the rescission deed or
14 instrument, correct?
15 A Yes. I believed it was your property
16 in in the county records, your property, so I
17 wasn't going to trespass
18 Q All right.
19 A -- your property until I could handle the
20 foreclosure.
21 Q All right. Thank you.
22 A No problem.
23 Q Now, in this lawsuit -- you know a gentleman
24 by the name of Mr. Lombardo, who worked at HLS,
25 correct?
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
-14-'llCOURTOF APPEALS
~10USTON, TX
CHRWTOPHERJL PfUNE1
1 REPORTER'S RECORD Ct.EEK '
TRIAL COURT CAUSE NUMBER 200G-611I)s i
2 COURT OF APPEALS CASE NUMBER 14-10-01125-CV
VOLUME 16 OF 18
3
ALBERT ORTIZ IN THE DISTRICT COURT
4
v. HARRIS COUNTY, TEXAS
5
FRED LOMBARDO, et al. 164th JUDICIAL DISTRICT
6
7
8
9
10
*************************************************
11
JUNE 29, 2010 : i
12
*************************************************
13
14
15
16
17 On the 29th day of June, 2010, the following
18 proceeding came on to be heard in the above-entitled
19 and -numbered cause before the Honorable Alexandra
20 Smoots-Hogan, Judge Presiding, held in Houston,
21 Harris County, Texas.
22 Proceeding reported by certified Shorthand
23 Reporter and Machine Shorthand/Computer-Aided
24 Transcription.
25
DONNA KING, CSR
164TH OFFICIAL REPORTER
( 7 13) 3 6 8 - 6 2 5 6
2
1
2 A P P E A R A N C E S
3
4 FOR THE PLAINTIFF:
Mr. Mark A. Junell, SBN 24032610
5 THE JUNELL LAW FIRM, P.C.
3900 Essex, Suite 390
6 Houston, Texas 77027
Telephone: 281-768-3530
7 Facsimile: 832-213-1830
8 - and -
9 Nr. Gary Michael Block, SEN 02497200
Attorney at Law
10 7660 Woodway, suite 590
Houston, Texas 77063
11 Telephone: 713-443-7722
Facsimile: 713-266-8528
12
13 FOR THE DEFENDANTS:
Mr. Joel Mohrman, SEN 14253500
14 Ms. Kari Robinson, SBN 24004891
McGLINCHEY STAFFORD, P.L.L.C.
15 1001 McKinney, Suite 1500
Houston, Texas 77002
16 Telephone: 713-520-1900
Facsimile: 713-520-1025
17
- and -
18
Ms. Kristen Brauchle, SEN 24012326
19 BROCKMAN, ERAUCHLE & EVANS, P.L.L.C.
2020 Southwest Freeway, Suite 323
20 Houston, Texas 77098
Telephone: 713-224-6100
21 Facsimile: 713-533-0303
22
23
24
25
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
3
1 I N D E X
2 PAGE LINE
3 Jury Charge Conference -------------- 4 1
4 Charge of the Court - - - - - - ~ ~ ~ ------ - - 41 5
5 Plaintiff's Closing Argument -------- 60 20
6 Defendant's Closing Argument -------- 88 17
7 Plaintiff's Closing Argument -------- 128 15
8 Jury Verdict ------------------------ 142 10
9 Plaintiff's Opening and Closing
Argument ------------- ------------ 160 19
10
Defendants' Opening and Closing
11 Argument -------------------------- 163 9
12 Jury Verdict ----------------------- 166 17
13 Court Reporter's Certificate ------- 169 1
14
15 PLAINTIFF'S EXHIBITS
16 NO. DESCRIPTION ADMITTED
17 30 Net Worth Statement 158' 12
18
19
20
21
22
23
24
25
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
60
1 instructions of the Court and your presiding juror
2 has placed your answers in the spaces provided and
3 signed the verdict as presiding juror or obtained the
4 signatures, you will inform the bailiff at the door
5 of the jury room that you have reached a verdict, and
6 then you will return to the court with your verdict.
7 And that is the charge of the Court,
8 and now I ' l l take a little respite from all that
9 talking.
10 MR. JUNELL: The Kinkaid debate program
11 would be proud.
12 THE COURT: I'm telling you; I've still
13 got the debater in me.
14 All righty. And with that, I invite
15 the plaintiffs to begin their closing argument.
16 Mr. Junell.
17 MR. JUNELL: Thanks. can you lower the
18 screen, Judge?
19 THE COURT: Yes.
20 PLAINTIFF'S C.LOSING ARGUMENT
21 MR. JUNELL: The bank wants to do
22 what's all too common nowadays, and that's to have
23 someone else clean up its mess.
24 Good morning, ladies and gentlemen. As
25 you already know, my name is Mark Junell, and I'm
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
61
1 here today with Gary Block on behalf of Albert Ortiz.
2 And it's been a long two-and-a-half weeks, and let me
3 first thank you for your time in being here. I know
4 that everybody has more important things to do and
5 responsibilities, and we really do appreciate it. I
6 know everybody does today. And I, you know,
7 apologize that the case ran longer than it should
8 have, and sometimes these -- litigation just does
9 that, and and I want to thank you for your
10 patience and for being here. It really is
11 appreciated from us.
12 I also wanted to say that -- although
13 we spent the majority of the time in the case, as you
14 probably know, during our case-in-chief, I -- I just
15 want to make sure that you all understand that it was
16 really a split between the defendants and the
17 plaintiffs so that you don't think that we took all
18 the time during the last two weeks, because, if you
19 recall, we called a couple of their witnesses out of
20 order because of scheduling problems, their expert,
21 Mr. Little, and -- and -- as well as Mr. Fedoronko,
22 who had to fly in. And then every time we watched a
23 video deposition or we read a deposition into the
24 record, which was a lot, those involved both side's
25 cuts. So we combined them up together and read them
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
62
1 at the same time, so -- and and we did our best to
2 get out of here as quick as we can, and I'm going to
3 do my best this morning to do the same thing.
4 This case is is complicated, and
5 it's not the most exciting of subjects. And you're
6 probably all kicking yourselves for not getting that
7 juicy Tiger Woods case the judge talked about at the
8 beginning, and I -- and I wish it were a little bit
9 less dry, but -- but it's serious, nonetheless, and
10 it's serious for Mr. Ortiz because it involves his
11 home. We've been fighting this battle for, as you've
12 heard a lot of times, four years.
13 The defendant, the bank, has hired some
14 very good attorneys on their side, some of the best
15 that money can buy, and they've done a very effective
16 job in this case of trying to distract you from the
17 mistakes that the bank made.
18 They have thrown -- and if you remember
19 Mr. Block talking about in opening statements that he
20 thought that the -- the bank was going to come at
21 Albert Ortiz with both guns, they were going to throw
22 everything at him they could in terms of making you
23 take your eye off the prize and look at all the
24 issues that doesn't matter -- they talk about
25 Albert Ortiz making payments late, talk about the
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
63
1 fact that Albert Ortiz properly had the property
2 insured for a little while and then missed an
3 insurance on the second part.
4 They talk about other issues that are
5 completely irrelevant to this case, G.H. Reid, the
6 company that Mr. Ortiz is associated with, the short
7 sale, the short sale that never went through. These
8 are all issues that were designed to try and make
9 Albert look bad. But we're not here to talk about
10 Albert looking bad. We're here to talk about what
11 the bank did wrong.
12 And a lot of y'all may or may not
13 remember -- it's been a long time since we had the
14 voir dire, which was a little over two weeks ago, and
15 I was standing right up here, and I was talking to
16 y'all about the bank's mistakes and how long this
17 thing had been going on. And -- and I don't remember
18 who it was. A couple of y'all -- at least it was
19 said in voir dire that you -- the comment was made
20 that if it's -- if it's been going on for four years,
21 you would've thought the bank would've fixed the
22 mistake, and that was the argument that -- that a
23 couple of people out in the panel agreed with.
24 Well, if -- if it's been-- taken four
25 years -- if somebody made a mistake, you would've
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
64
1 thought they'd fix that mistake. But they never did.
2 They refused to admit they made a mistake, and they
3 have fought as hard as anybody can fight in
4 litigation to try and refuse to honor the agreements
5 that they made with Mr. Ortiz.
6 And so when we come in here to trial,
7 instead of talking about the mistake, instead of
8 talking about the notice address, instead of talking
9 about the wrong lockout, the fact they declared the
10 property abandoned, instead of talking about the
11 trespass that occurred on his property and the fact
12 that he's been stripped of his home for four years,
13 they want to talk about G.H. Reid, the short sale,
14 his attorney, Mike Donovan. They want to talk about
15 all the issues they can to try and distract you from
16 what -- what occurred in this case.
17 There's a question in the jury charge,
18 and I think it's Question Number 5 -- and I want to
19 put this up on the ELMO real quick.
20 The question is -- seems pretty simple.
21 who breached first. was it Albert Ortiz, or was
22 it the bank, National City, on behalf of Home Loan
23 Services, its agent? And remember, Home Loan
24 Services is the mortgage servicer.
25 And let me also speak, before we talk
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
65
1 about this, to the fact that National City, the
2 bank -- they don't care about this case. When we got
3 up -- one of the very last depositions that we
4 read -- and I was up here on the stand. You remember
5 the guy, Mr. Portz, who kept saying, "I have no
6 loan-level knowledge. I have no knowledge. I have
7 no knowledge.• That was the person that National
8 City designated as the person at the bank that has
9 the most knowledge with regard to Mr. Ortiz's loan,
10 and he couldn't answer a question_ •r have no idea
11 what's going on with Mr. Ortiz's loan.•
12 And you know why you know the bank
13 doesn't care about this case? Because they didn't
14 even send a representative down here to this trial.
15 We'vs been down here for two-and-a-half weeks.
16 Mr. Stookey has been down here on behalf of Home Loan
17 Services, but National City hasn't even sent a person
18 down to monitor what's going on with this trial.
19 That should speak something to you to tell you how
20 the bank considers Mr. Ortiz. Do they consider him a
21 person, or is he just a number to them?
22 That question right there, "Did -- who
23 breached the -- first, who failed to comply with the
24 deed of trust first?• and the answer is either
25 Albert Ortiz or National City.
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
66
1 It's an easy question, and it's an easy
2 answer. The very first breach occurred when they got
3 on their computer system and they entered in the
4 wrong address. That is an important -- it sounds
5 like it's not a very important item, and in daily
6 life, it's not that big a deal. But in -- context of
7 mortgages and deed of trusts, it is huge.
8 The deed of trust says that you -- if
9 they don't mail it to the right address, then you are
10 not deemed to have received it.
11 That question says Mr. Ortiz
12 designates, in -- March 15th of 2004, which is when
13 the loan closed, that his mailing address was 6300
14 Dixie Drive. Mr. Stookey testified on the stand that
15 HLS and the bank never mailed a single notice to
16 6300 Dixie Drive. All the bills that were mailed,
17 all the notices, the lockout, the ten-day, the
18 vacancy, the abandonment -- everything that they
19 mailed went to the property address, where nobody was
20 living and nobody was getting the mail.
21 Well -- Mr. Mohrman says, "Well,
22 there's a black hole. You should've gotten some of
23 that mail." That doesn't matter. What matters is
24 what's on that piece of paper.
25 See, banks want to hold -- person to
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
67
1 the documents they sign. When you go in and you sign
2 a mortgage and you sign a promissory note and a deed
3 of trust with the bank, I can promise you that
4 they're going to hold you to every single word that's
5 on that document. Right?
6 But they don't want to be held to it.
7 They don't want to be held to have to send stuff to
8 the right address, and they don't want to have to be
9 held to what we're going to see in a minute, which is
10 the agreements that they signed with regard to those
11 letter agreements. So instead, they'll do whatever
12 they can to try and avoid that situation.
13 Now, we're here mainly because
14 Mr. Ortiz was locked out of the house, and that's
15 really kind of the linchpin of this case and where we
16 are. The timing is important for you all to -- to
17 understand, and -- and I think that it was -- it came
18 out in a question and answer, but Mr. Ortiz was
19 locked out of his house seven months before they
20 foreclosed on him. Seven months before foreclosure,
21 he was locked out. That's against the law. Banks
22 can't come in and just decide, well, somebody's late
23 on their payment. He -- he didn't have the property
24 insured. He missed -- he was 29 days' late on a
25 payment. 'Let's lock him out of his house.•
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
68
1 No. You can't do that. You can't do
2 that under the law, and you can't do that under the
3 property I mean, under the deed of trust, and you
4 can't do it under the promissory note. There's a
5 thing in the-- in the United States that's been
6 around for a long time. It's called due process.
7 And when you have a document -- a deed of trust and a
8 mortgage, the bank has to foreclose on you. If you
9 don't make your payments, they have to come in and
10 properly foreclose on you. They can't go in and just
11 change the locks because they don't like you and kick
12 you out of the house.
13 So that's exactly what they did in this
14 case. The bank, which is up in Pittsburgh -- they're
15 not even down here, so they can't even come around
16 and take a look at the property. They send their
17 little local company called IMS. And you heard --
18 you heard -- saw some of those documents from IMS
19 with their inspection reports. Remember? They had a
20 couple pictures attached.
21 The very first document from IMS said
22 that the property is occupied. They knew that
23 property was occupied. They have it all through
24 those call logs that we looked at. "Property's
25 occupied. Being renovated." And yet they decided,
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
69
1 because they didn't like Albert, because he had made
2 some payments late, and because they didn't like the
3 fact that he wasn't -- that he was holding their feet
4 to the fire with regard to the forced-placed
5 insurance and the credit reporting and all the other
6 mistakes they kept making -- and he couldn't get them
7 on the phone. -- they said, "Well, you know what?
8 Let's just go over there and change the locks on
9 him." So on Thanksgiving Day 2005, they went over
10 and changed the locks without even telling him.
11 Didn't mail a notice to him to the right address.
12 Didn't give him a phone call to let him know they
13 were going to lock him out. Instead, they just
14 changed the locks on him.
15 So Mr. Ortiz called them up, tried to
16 figure out what was going on and explain to them that
17 the property's being renovated. And I think that
18 everybody understands -- and -- and it may not even
19 be disputed that the property was being renovated.
20 I'm not even sure they can deny that.
21 Now, the question is -- is what happens
22 when property's renovated. Do they have a right to
23 come in and change the locks because someone's fixing
24 up their house? Of course not.
25 In fact, we looked at those Home Loan
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
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1 Services procedures with Mr. Stookey, if you
2 remember, and there was a little -- little deal that
3 says ''Enter SER2 Setup, • and it had some computer
4 codes on there. But in bold on that sheet, it says,
5 "If it's determined that the property is not vacant
6 or it's being rehabbed or refurbished, then stop the
7 securitization. Cal.l IMS. Tell them to call off the
8 dogs, and don't change the locks.•
9 That's what should've happened, but
10 they didn't do that in this case. They locked him
11 out of the property, and they did not even institute
12 the foreclosure proceedings until June 6 of 2006,
13 seven months later. That's when the trespass
14 occurred. So the initial breach -- the first breach
15 was when they got - - started sending stuff to the
16 wrong address and when they entered i t wrong on the
17 computer, but the trespass occurred as soon as they
18 locked him out of the property.
19 Now, this -- we ve seen a lot of these
1
20 things, and I know everybody's sick of them. I am.
21 I can barely read them.
22 Zoom it out a little bit so you can see
23 the date.
24 MR. BLOCK: That good?
25 MR. JUNELL: Okay. So 12/8/05 -- I
DONNA KING, CSR
164TH OFFICIAL REPORTER
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1 underlined the part to look at. "Refurbish. Under
2 construction.• That's -- this is their own internal
3 notes. 12/8/05, it was being worked on. Okay? This
4 is right after the lockout. This is a week later.
5 Did they bother to give Mr. Ortiz the
6 keys back? noops. Sorry. We made a mistake. We
7 didn't realize you were refurb -- refurbishing
8 your -- your house. Let's let you back in•? NO.
9 Instead, they continue to lock out. They wait five
10 or six more months, and then they start the
11 foreclosure proceeding.
12 Now, you heard Mr. Lombardo, Fred
13 Lombardo. He was the video deposition that we
14 played, and -- and during his testimony you heard him
15 say that in his experience working at that bank, he's
16 never heard of a lockout before a foreclosure. Their
17 own per -- their own employee says that he's never
18 even heard of that situation, where you go and lock
19 someone out before you foreclose against them.
20 Gail Walters, who's another employee,
21 said that Mr. Ortiz could've gotten back in. "All he
22 had to do was ask for the keys. We would've let him
23 back in.• Well, the evidence has shown -- and I ' l l
24 show you in just a second. that we did ask for the
25 keys over a period of years, and they never, ever
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
72
1 gave us the keys back.
2 The foreclosure that they entered into
3 on June 6th of 2006 was wrongful. That has already
4 been determined by this Court. That's an order
5 October 28, 2008 -- right? -- almost two years ago
6 that says that Ortiz is granted summary judgment as
7 to his claim against Defendant, National City Bank of
8 Indiana, for wrongful foreclosure.
9 They made a mistake. They didn't send
10 the foreclosure papers to the right address, and I
11 believe that Mr. Mohrman admitted that in his opening
12 statement, that that foreclosure was -- was a mistake
13 and it had been found to be wrongful.
14 It also goes on to say that that the
15 substitute trustee's deed conveying the real property
16 at 105 Birdsall is set aside, and title to the real
17 property is restored to Ortiz. Okay?
18 That should've been the end of it,
19 right? October 28, 2008, Mr. Ortiz should've gotten
20 back in his house, should've got the keys back. In
21 fact, the very next day, on october 29, 2008 --
22 Zoom out so you can see the date. Zoom
23 out a little bit.
24 Beck, Redden & Secrest, which was
25 Mr. Ortiz's attorneys at the time, sent a letter on
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
73
1 October 28 -- 29th, the day after that order came out
2 and said, "Please promptly deliver to our office the
3 keys to the property located at 105 Birdsall,
4 Houston, Texas 77007." Did they do that? Of course
5 not. They said, "That document's not final. That
6 order's not final. We're still litigating this
7 matter." So they never gave him the keys back
8 with - - with regard to October 29th, 2008.
9 So here we are in 2010, in May, about a
10 month or so ago, and Mr. Ortiz is still locked out of
11 the house, which is now four years, and the
12 foreclosure was wrongful. He still doesn't have
13 possession of his house, still doesn't have the keys,
14 and he starts taking depositions in this case to
15 determine, you know, what's going on. "Let's talk
16 about -·- talk to some of these employees, figure out
17 what happened with regard to this property."
18 During one of the depositions a month
19 ago, in May, we found a very important document.
20 This is a document that y•all have seen a couple
21 times. This is the rescission deed. The date of
22 this document is May of 2007. And you -- you don't
23 need to read the whole thing because
24 MR. BLOCK: 2009.
25 MR. JUNELL: I'm sorry. May of 2009.
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
74
1 May-- May 7th, 2009.
2 Zoom out to the bottom part.
3 You don't need to -- to read the whole
4 thing, but what this document is -- it's something
5 that they filed -- the bank filed last May -- not
6 this May, last Hay, of '09, that says, "We're undoing
7 the foreclosure, the one in 2006. Let's just put
8 everybody back in their place. Let's restore the
9 parties back to the status guo, • it says up there,
10 and it says, "The substitute trustee's deed dated
11 June 6, 2006, is hereby rescinded and deemed void and
12 of no effect for all purposes.•
13 So the bank is admitting here that they
14 made a mistake on the foreclosure. 'Let's just undo
15 it. Let's undo it three years later and put
16 everybody back in the status guo.• All right?
17 That should've been the end of it;
18 shouldn't it have? Mr. Ortiz should've gotten the
19 keys back at that point.
20 Zoom out.
21 I mailed a letter to Kari Robinson over
22 here. She's an attorney for the bank, and I mailed
23 this letter to her on January 20th, 2010, seven --
24 eight months after that rescission deed was filed,
25 eight months later, and I said, "Now my client is
DONNA KING, CSR
164TH OFFICIAL REPORTER
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75
1 again requesting that the keys to the property be
2 delivered to him." They said, "No, thanks. We're
3 not giving you the keys back."
4 For years, Mr. Ortiz -- been asking for
5 the keys back to his house, and in January of 2010,
6 they have no right to refuse to give us the keys. In
7 fact, they had already undone their own foreclosure.
8 They had filed that rescission deed that undid
9 everything, but still they said, "No. We're not
J.O going to give him the keys back."
11 The reason why, I think, Ms. Robinson
12 said that in in response to my letter is because
13 she didn't even know that the bank had filed that
14 rescission deed in May. In fact, we discovered it
15 during one of those 14 depositions that they said
16 that we took unnecessarily.
17 We took that deposition, and we found
18 out for the very first time in years of litigation
19 that the bank, a year ago, had already undid its own
20 foreclosure. The attorneys didn't even know about
21 it. They didn't know about it. We didn't know about
22 it. And so it begs the question: Why would the bank
23 hide that information? Why would the bank not tell
24 its own attorneys that they undid the own -- their
25 own foreclosure and that title to the property had
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
76
1 been restored in Mr. Ortiz's name? I don't know why.
2 That's why you guys are here today is to help us
3 make that determination.
4 As jurors in this case, you know,
5 you -- you can check your coat and your hat at the
6 door, but you don't have to check your common sense.
7 You don't have to check your experiences. And when a
8 person takes the stand, you determine whether or not
9 that person's telling the truth. You determine
10 whether or not that reason is credible.
11 And so you look at Mr. Stockey•s
12 questions and answers that I talked to him about.
13 And he had, kind of, an excuse for everything. And
14 you determine whether or not that's credible and
15 believable and whether or not it's reasonable, that
16 they acted reasonably in that regard, and with regard
17 to not returning his keys -- if that's something
18 that's proper. And I'll tell you that it's not.
19 And there's a reason why this case has
20 gotten so expensive and. it's lasted so long and it's
21 taken four years, and that's because, despite order
22 from the court, their own bank undoing the
23 foreclosure deed, they still refuse to acknowledge
24 that the house should've gone back to Albert Ortiz,
25 and they refuse to give it to him, and that's why
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
77
1 we're standing here today. This case shouldn't have
2 been tried. It shouldn't have gotten this far. The
3 bank should've, like we said in voir dire, fixed its
4 mistake when they discovered it years ago.
5 But in October of 2008, when the Court
6 gave them an order to restore the property to
7 Mr. Ortiz, they didn't do it. So instead, what the
8 bank does is they scream to Albert Ortiz that he owes
9 them more money, and they put on a witness,
10 Mr. Stookey, to testify to what the bank's damages
11 are in this case. And i f you think about the damage
12 time line -- they went through all the payments that
13 were due from 2005 to the present, 2010, and they
14 went through the taxes, and they went through the
15 interest. But almost the entire time of all those
16 numbers, the bank was in possession of the house and
17 they had title to the house.
18 So they're asking this jury, you guys,
19 to come in and make an award against Mr. Ortiz that
20 says, "Oh, I know you didn't have the house for four
21 years. You didn't have possession of the house. You
22 didn't have title to the house. You were locked out
23 of the house, but you still owe the bank interest,
24 penalties, late charges, taxes, all those things on
25 the house." It's ridiculous that the bank can take
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368,.6256
78
1 everything away from him and say that he still owes
2 them money for that. And it wasn't until May, when
3 we discovered that rescission deed, that Albert
4 finally went back and took possession of the house
5 back, and since that time, no one's -- on the bank
6 has ever complained that that happened, and that's
7 the way things stand here today.
8 So since 2005, there have been no bills
9 sent to Mr. Ortiz about taxes owed, about interest,
10 payments, or anything like that that are owed. Since
11 he was -- since he was foreclosed on in two thou
12 or locked out in 2005 and foreclosed on in 2006, the
13 bank has never once sent him a letter. You've never
14 seen any letter that says, "Hey, you owe us, you
15 know, taxes for this year, • and -- and yet today
16 they're here in court asking for those damages that I
17 don't think they're entitled to because, A, Albert
18 didn't have the house, and, B, because they had
19 signed away their rights based on those letter
20 agreements that we're going to talk about right now.
21 THE COURT: You have 13 minutes left.
22 MR. JUNELL: How much?
23 THE COURT: Thirteen.
24 MR. JUNELL: Okay.
25 A couple quick points on the letter
DONNA KING, CSR
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79
1 agreements. There's basically four letter agreements
2 on here in this case, The first two, they don't
3 complain about. Everything's cool with those letter
4 agreements. May 31st, 2005, Fred Lombardo signed
5 this that says Albert Ortiz pays -- I can't read it
6 up there. -- 5,700, 6,700. As long as the bank's
7 getting money, they have no problem. Mr. Lombardo
8 had authority to execute that agreement, no problem.
9 so at that point, this letter agreement
10 is fine. The bank has no complaint about it, and
11 Mr. Lombardo -- I'm sorry. -- Mr. Fedoronko and
12 Mr. Stookey testified that everything was fully
13 complied with with this letter agreement.
14 Next letter agreement is also to
15 Mr. Lombardo, and that's a little bit later,
16 February 15th, 2005, and that was to fix another bank
17 mistake, and they have no problem with this letter
18 agreement too. Everybody had authority to sign it.
19 The bank had authority to bind itself to this
20 agreement, and yet the bank received $9,600. Good
21 for them. They got their money. Nobody has a
22 complaint about that letter agreement. Okay?
23 But they're kicking and screaming about
24 the last two. These are very, very important in this
25 case, and the first one is dated --
DONNA KING, CSR
l64TH OFFICIAL REPORTER
(713) 368-6256
80
1 Well, let me put this one up first. I
2 gave you the wrong -- here. This is June 23rd.
3 The first one is June 23, 2006. And if
4 you look at that letter agreement -- the bank signs
5 this document that says, "Mr. Ortiz, we will not ever
6 sue you. We will not ever ask that you owe us any
7 money. n It could not be more clear, what this
8 agreement says. And what they say is, "Well -- oh, I
9 didn't know what I signed.• Mr. Stockey said on the
10 stand, "I didn't know if my job description gave me
11 authority to sign it, but I didn't know if it didn't
12 give me authority. So -- sure, the first two are
13 okay. we -- we could sign and be bound by those two,
14 but this one? No. Maybe not so much. I signed away
15 the bank's rights" -- Mr. Stookey signed away the
16 bank's rights with that letter agreement, and now he
17 doesn't want to live by it.
18 We're here today because the bank has
19 absolutely refused to acknowledge that this document
20 is valid. It says that it won't pursue any lawsuit
21 or other legal proceeding against Borrower for any
22 deficiency or otherwise. That's exactly the opposite
23 of what they're doing here today, asking for money
24 against Mr. Ortiz.
25 It says that it fully releases
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
81
1 Mr. Ortiz from any and all obligations and
2 liabilities that he may have had to Lender and he
3 waives any and all demands and claims regarding any
4 such obligations or liability. That's exactly the
5 opposite of what they're doing here today. And the
6 very last question, in my mind, couldn't even be any
7 more clear. "It is agreed that no further sums will
8 be made or owed by Borrower, and no further sums will
9 be demanded or litigated by Lender. •
10 If the bank wants to hold people to
11 signed documents, then why can't we hold the bank to
12 their signed documents? If the bank signs an
13 agreement that says "We're not going to ask for any
14 more sums to be owed by Mr. Ortiz, • then why is it
15 fair for Mr. Ortiz to have to spend hundreds of
16 thousands of dollars and -- and fight this case for
17 four years just to make this agreement stand up?
18 Mr. Stookey didn't even sign this --
19 this -- this agreement once. He signed it twice.
20 Okay? He signed it again in July, about -- a couple
21 weeks later, and i t says the same thing, that that
22 agreement -- the first agreement applies, and it
23 applies not just to HLS, but also National City Bank
24 of Indiana. And again, i t says, "National City Bank
25 of Indiana also releases -- waives any and all actual
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
82
1 and potential demands and claims regarding any
2 obligations or liabilities of the borrower.•
3 So what does Mr. Stockey do? He says,
4 •well, I must' ve made a mistake. I didn't -- I
5 didn't know what I was doing.• This -- this call log
6 is key here because it says June 26, 2006 that's
7 the date of that first letter agreement. It says,
8 "Gave to BAB for response." Who ' s "BAB"? That's
9 Byron Blevins. Remember? We saw his video.
10 He's their attorney. They gave it to
11 their own attorney to review before they signed it.
12 They can't come up here and say we
13 tricked them into anything -- Mr. Donovan tricked him
14 in because he's smarter than Mr. Stookey. They gave
15 it to their own attorney to sign off on before he
16 signed that document. And then he signed another
17 document a week and a half later. But Mr. Stockey
18 says, "Oh, he's he's not -- attorney. He's a
19 letter writer, and -- and -- he had a law degree. He
20 worked at the company. He was an in-house counsel,
21 at least at some point, but -- but during June 26, in
22 that two-week time period, maybe longer, he was a
23 letter writer, not attorney. •
24 Ladies and gentlemen, that doesn't make
25 any sense at all. Why would he give that document to
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
83
1 a letter writer to review before he signed it?
2 So what we know in this case,
3 essentially, is that they had the wrong address from
4 the very beginning. They breached the contract
5 first. Every single piece of paper that they sent
6 was mailed to the wrong address. They foreclosed
7 wrongfully. The Court has already made that
8 determination, and I think the evidence has also
9 shown that since they took over the property, they
10 haven't really done anything to maintain it. Their
11 own expert talked about how the yard was in terrible
12 condition, $9,000 to re re -- relandscape the
13 yard. And -- and so a lot of the property has
14 probably deteriorated over the last five years
15 because nobody's been living in it.
16 So the last couple minutes that I have,
17 I want to talk to you just briefly about our damages
18 in the case and what we're asking for.
19 Our damages in this case are real
20 simple: loss of use of the home. You know, what
21 what is it worth for you to be stripped of your home
22 and be unable to use it for the period of time that
23 Albert was stripped of his home wrongfully?
24 Mark Sikes was an expert appraiser who
25 came up and testified, and you remember his
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
84
1 testimony. He says loss of use is based on the
2 market rent that was in place at that time and -- and
3 the damages are $258,000. That's what we're asking
4 for in damages for the fact that they have stripped
5 Mr. Ortiz of his home and breached their contract
6 under the deed of trust.
7 Now, they they hired another expert.
8 Their their paid gun got up, took the stand and
9 said, "Wait a minute. No. It's not 258. It's zero.
10 You -- you should -- you won't get any damages for
11 losing your home for five years." It's ridiculous.
12 He used a renovation cost of $91,000
13 that was based on 2010 building costs even though he
14 acknowledged that the renovation needed to occur back
15 in 2005. so the building costs are off.
16 He used comparables and comps in his --
17 in his valuation that were wrong, that were outdated
18 and -- and -- and that were significantly -- the
19 property was worth significantly less than
20 Mr. Ortiz's property.
21 And he used a lost-profit analysis
22 that you have to take into account the net gains and
23 the lost profits of that, and it's not that. It's
24 simple. It's what does the property rent for during
25 that time period? And that's what the damages are.
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
85
1 So you, as the jury, can make a
2 determination of whether or not Mark Sikes' number is
3 correct, whether or not zero is correct or if there's
4 some number in between. Based on the evidence that
5 you've heard, you can make that determination.
6 The last item for damages is our
7 attorneys• fees in the case, and I testified to it
8 yesterday, and you remember. It's 473,317.
9 THE COURT: You have five minutes left.
10 MR. JUNELL: Okay. Thank you, Judge.
11 This case has been fought as hard as a
12 case can be fought by the bank. Mr. Mohrman took the
13 stand yesterday and said, "Well, we're only asking
14 for 296,000 in attorneys• fees." Basically, round it
15 up to $300,000. ''That's all we're asking for," and
16 they're just asking for their fees, not the fees for
17 all the other attorneys that worked on the case
18 before they got involved last November.
19 Mr. Mohrman's bill, which is an exhibit
20 in here, for April -- his law firm billed the bank
21 $67,000. In March, they billed the bank $71,000.
22 They are only asking this court to award six months
23 of their time. Six months, this firm has billed
24 $300,000 to the bank.
25 Well, this case has been going on for
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
86
1 four years, not six months. So for Mr. Mohrman to
2 take the stand and say that Mr. Ortiz's attorneys'
3 fees of 473 are unreasonable -- that doesn't make any
4 sense when his own firm billed 300 grand in six
5 months. You see, before Mr. Mohrman and his law firm
6 got involved, there was another team of lawyers that
7 were on tho case. Mr. Ortiz has had to fight this
8 case four years and fight attorneys from the very
9 beginning or else at any point in time this would be
10 over and he'd be out of his house and out of luck.
11 And at the end of the day, this
12 could've happened to a single mom, could've happened
13 to a newlywed couple with a few kids, and it could've
14 happened to an elderly person, someone that did not
15 have the financial resources to be able to stand up
16 to the bank and say, "We're not going to take this."
17 You know, how many times -- other times
18 has this happened where people just bow down and do
19 what the bank wants? Because if Mr. Ortiz wants to
20 stand up to the bank and say, "You know what? What
21 you did was wrong. Taking my house was wrong" and
22 fight them -- look what it's gotten him. It's gotten
23 him four years in court, 18 depositions, 4
24 mediations, tons and tons of hearings and hundreds of
25 thousands of dollars in legal bills.
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
87
1 That's what fighting the bank gets you,
2 and that's where Mr. Ortiz is here today. So I would
3 submit to you that the fees in this case -- our fees
4 of four hundred thou -- $473,000 -- which are not
5 even twice as much as Mr. Mohrman's firm has billed
6 in one fourth of the amount of time that they -- that
7 this case has been pending.
8 we have the burden of proof in this
9 case. We're the plaintiff. Judge talked about that,
10 and we talked about that a little bit at the
11 beginning. We have to prove the case beyond a
12 preponderance of a doubt. It's not beyond a
13 reasonable doubt, like it is in criminal court.
14 Ms. Norris, you probably know this from
15 law school.
16 It's -- all you have to prove is
17 51 percent, slightly better than halfway. If you're
18 on a football field and you get over the 50-yard
19 line, then we've proven our case. That's
20 preponderance of the evidence.
21 The evidence in this case has shown
22 that they wrongfully foreclosed. There's been three
23 different summary-judgment orders entered by this
24 Court. The first one found that the foreclosure was
25 wrongful. The second one found that they -- all
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
88
1 their counterclaims were dismissed, and the third one
2 found that they have no -- that they cannot claim any
3 liability under the note because they waived it in
4 that letter agreement dated June 23rd, that they
5 cannot say that Albert owes any more money under the
6 note. Those are all orders from this Court.
7 So here we are, four years later. You
8 would've thought the bank would've fixed the mistake
9 if they knew about it, but they haven't fixed the
10 mistake, and we're still here, and, unfortunately,
11 the bank is doing what's all too common nowadays,
12 which is asking someone else to clean up its mess.
13 Thank you.
14 THE COURT: Mr. Mohrman.
15 MR. MOHRMAN: Thank you, Judge. May it
16 please the Court.
17 DEFENDANTS' CLOSING ARGUMENT
18 MR. MOHRMAN: Ladies and gentlemen of
19 the jury, my dad died in December of 1983. He had
20 had a number of heart attacks, and after the last one
21 he was in really bad shape. He was in intensive care
22 up at Methodist, and I guess I sort of realized how
23 serious the problem was for him when he was just
24 brushing his teeth there in his bed -- and you know
25 how they have you all hooked up to things, and
DONNA KING, CSR
164TH OFFICIAL REPORTER
(713) 368-6256
ALBERT ORTIZ
v.
§. IN THE DISTRICT COURT
-.. ; ... ,.., f•': ''1'
§
§· ·, ' ' ·.) i "
164TH JUOICIAU>ISTRICT
7: 23 5
§
FRED LOMBARDO, NATIONAL §
CITY HOME LOAN SERVICES, INC.,
D/B/A FIRST FRANKUN LOAN
§
§
F !``k,,~,
§
' ·:--.@J'Jf f.' [ '•'• ..
SERVICES, NATIONAL CITY BANK
OF INDIANA, KEYSTONE ASSET § ('~jiTG I 3 ZOiO
MANAGEMENT, INC AND RICHARD § Tsrne: }!~-:~
"',,\S:!T\{:.t 1~· ;:.,1),;-.1 1-'7~"'"____
HOWELL 0/B/A ALEXANDER §
Bst·"·''i'~
- "
HUNTER PROPERTIES A/K/A § f '-':? C"tl-".t!y
ALEXANDER HUNTER PROPERTIES, INC. § OF HA````OUNTY, TEXAS
·~.;:
,,~ ~
FINAL JUOGMENTc)"
.}ic".l
i.Ci']\.
On June 15, 2010, the Court called this ca``o!fpr trial. Plaintiff, Albert Ortiz ("Ortiz"),
'"\\);
, ...Y/fii'
appeared in person and through his attorneys imd announced ready for trial. Defendants
,.!~
National City Home Loan Services, Inc. ("fJb~); and National City Bank of Indiana ("National
crSi'J
City") appeared through their attorney'S>a..i'd announced ready for trial. The Court determined
'?>,
i(j;·
that It had jurisdiction over the swJ~ matter and the parties. A jury having been previously
.A:>"'"((J_r
demanded, the Court then in{p~)reled and swore the jury consisting of twelve qualified jurors.
(•.( Jl
-·:-··-...·~
The case proceed to triai,,ilfid.the Jury heard the evidence and arguments of counsel.
'{}'''
Following thr' il``entation of Plaintiff Ortiz's case and after Plaintiff had rested, the
\\, )_)
Defendants H~,}~)~ational City moved for a directed verdict. The court, having considered
D (tj~'
the motlon,~dered judgment as a matter of law In favor of the Defendants with respect to
-~'\;''
/:``))
Plaintiff"~ftiz's claims for fraud, common-law unreasonable debt collection, statutory debt
':.~":,})
collection violations, statutory deceptive trade practice violations, breach of oral contract,
promissory estoppel, theft, breach of bailment, invasion of privacy, and defamation per se.
At the conclusion of the evidence, the Court submitted questions, definitions, and
EXHIBIT
~
instructions to the Jury. In response, the Jury made findings that the Court received, filed, and
entered ofrecord . .=-!R!IIIillllil••iii•IIIIIIII!P.!!!!I!!III.Iila:;l=iiijiiiil!il!!!!!!!'l!!ll``l!l:li!i~
After the Jury returned its verdict, Plaintiff and Defendants each moved for judgment on
¥• i! I
I :1 7 2 II !!It f :I
l``,_Jl
3 ':acid 66: II~ 41' d;az; :a: 5 PI 1 &!If? , .)iid agoiJN£ 2 a J;h
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IT IS THEREFORE ORDERED by the Court that the motto)\ of Plaintiff for judgment on th~;
ir~ pc..-+ !£."' ' oa t
verdict is GRANTED":lnd that the motion of Defendan~;i(Judgment on the verdict is DENIED.'" r t"
``:;·
Therefore, the Court renders judgment for Pla``g``nd against the Defendants, and renders
judgment as follows: ~.?:"> ·
(('~/~Y
J('-,.__,;
IT IS ORDERED, ADJUDGED, AND rPECREED that Plaintiff Ortiz recove.s. from Defendant
t 8?, sro. fP.;)I. llillilltJaf".fe..- se#le.ot~tnt c~d.-.r criOI, 5a:J. oo F-;d bj DJ``
National City the sum of $~15,15rnl.qpi'"'Jius pre-judgment interest , which is k,_'f>fo.
\c_,))
interest on that sum at the •,``u§,Y1rate of five percent (5%) per annum, from September 28,
,l,f;;_..;:,·
'}t\:)"
2006, until the day before i.~ate of final judgm~;nt;
"'-~
IT IS FURTHER Rllj'l:ERED, ADJUDGED, AND DECREED that Plaintiff Ortiz recover from
-- ,,.J_,
,;:. (1'\1'--0~
;:.~>1' o, 0 00#00 . . . .
Defendant Hl5 the~JLL[f)l of w,aee.oo, plus pre-judgment Interest wh1ch IS
(~-
interest on th~t[~ffi;, at the annual rate of five percent (5%) per annum, from September 28,
{"';.:_:,)}
2006, unti!``day before the date of final judgment;
.sr%-"
~"'~"TS
~,,(_1)) FURTHER ORDERED, ADJUDGED, AND DECREED that Plaintiff Ortiz also recover
from Defendant HLS the separate sum of $100.00, as exemplary damages;
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Plaintiff Ortiz, having
requested and proved reasonable and necessary attorneys' fees, also recover from Defendant
National City attorneys' fees in the sum of $400,000.00, for ser11ices render~d through the trial
of this case.
A~ly, if OefeAaaAt NaHeRal Cit 1 files Bit appeal (01 cross-appeal) Hut i>
oltliiialely tllll~eeessful, Plaintiff Ortiz shall recever f1 om Defeoclaot Natlulldl City the addttlull&l-
;lz~i"7
"''")
'bit! of$186,000.tl(l as a reaseflable attollte! Fee. @)I'"
t1~'
-.;,).
-Additionally, if Deferu.Jant Natiertal Cit~' files a petition for t;e_¥JPw (or cmss~petitioR) lR
;;"'"• "-'./
¢-t~-J
~Sopteme comt ofiuxas t!1at is Ulisuccessfule• telief is r1ot 1~J
oltfikate!y granted to Defet1dant
/-"·``-::;;;~!
__,.,.ana Ctly, am t 1z s a I recover from Detendant'No~ional Ctty the addttlOnat sum of-
/(~\,
t !':" f\OA- ;;-~·'-:;0
~u.OO as a reasonable atremey fae. ..SJ'
(.!f;Q)'"
``c.::
IT 15 FURTHER ORDERED, ADJUDGED, ANDJ!J.tltREED that Defendants National City and
~)J
HLS take nothing in this case; .r.r'-"
IT IS FURTHER ORDERED, ADJUD'f6(;{ND DECREED that Plaintiff Ortiz recover against
Defendants National City and HLS po'h``ment interest on an amounts awarded herein at the
t[.'J)
rate of five percent (5%) per ann``':from the date of judgment until paid;
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IT IS FURTHER ORP,f'f);EO, ADJUDGED, AND DECREED that all costs of court incurred
•:eo,;;
herein are taxed again~\.:``Jendants National City and HLS for recovery by Plaintiff Ortiz;
.~ ({Jj '' DENTI:D
IT i$ FURTH~)~j;JRDERED, ADJUDGED, AND DECREED that Plaintiff Ortiz is graAtes]udgment
~ -,.-
on his affirmati~J~(~fense of statute of limitations, with respect to the counter·clalm of Defendant
-'t<-'~\dJ
National dl:;i:t6r judicial foreclosure, and that National City take nothing on such claim;
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FURTHER ORDERED, ADJUDGED, AND DECREED that the Deed of Trust dated March
15, 2004, recorded in Clerk's File No. X469555 of the Official Real Property Records of Harris
County, Texas, and securing the Note dated March 15, 2004lla!lll!lllllllll•lllllll•llii•IIJIII~
~ _.5; • •.. _
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.. -. . '
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_;::!l!li!I!!!I!!!IEiiiiillliiiiiilll•••lllt•o the real property (the "Property") with a common address of
105 Birdsall, Houston, Harris County, Texas 77007, and legally described as follows:
LOT SIX (6), IN BLOCK ONE (I) OF VILLAS OF BAYOU BEND. A SUBDIVISION IN
HARRIS COUNTY, TEXAS, ACCORDING D TO THE MAP OR ?tAT THEREOF
RECORDED UNDER fiLM CODE NO. 417080 OF THE MAP RECORDS OF HARRIS
COUNTY, TEXAS; ·;;0,.
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. rr70
and that sa1d Note and Deed of Trust are fully, completely, and fina)!Y·~*bsfied and no past,
~.)
present, or further obligations or sums are or shall become due and~ing under said Note and
~t`` .. J
tv>(``~
Deed of Trust; ,J~
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IT IS FURTHER ORDERED, ADJUDGED, AND DECRE``"ttiat that the Substitute Trustee's
. . tQ?
Deed of June 6, 2006, recorded In the Real Property Re.Wds of Harris Colllllty, Texas; Clerk's File
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Number Z366547, and resulting from Defendants!((l;i,irongful foreclosure of the Property, Is set
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aside, rescinded, deemed null and void and ~[;'to"' effect;
IT IS FURTHER ORDERED,
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ADJUQG~ffAND DECREED that all partial and/or interlocutory
c.'V
judgments heretofore granted in th$ic:ase are hereby made final and ITncorporated into this
JW
Final Judgment. ,e"~J;
rp0:;::.
All writs and proce~t~}~or the enforcement and collection of this. judgment and for the
eo:\:.\
costs of court may·isstt4~ ~ecessary.
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All
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relief r·~oe'sted in this case and not granted herein is denied. This judgment finally
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disposes of ~!io;l'~ies and all claims and is appealable.
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SIG'fl~ this }jj'ay of
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J, t&-f , 2010.
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APPROVED AS TO FORI\! AND SUI3STA;-.;CE:
ATTORNEYS FOR PLAINTiFF
Murk A. Junell
THE JUNELL, LAW FIRM, P.C.
S BOT#: 240326 t 0
3900 Essex, Suite 390
Houston, Texas 77027
Phone: 2S I· 768-3530
Fax: 832-2!3-1830
Gary Michael Block
SBOT#: 02497200
7660 Woodway Dr.. Suite 590
Houston, Texas 77063
Phone: 713-266·6700
Fax: 713-266-8528
. LOHICI AL COLJRTCOPY
'··\
AlBERT ORTIZ, .
CAUSE t;IO; 2006-$1176
..
.i. 1NTHE DISTRICT COURT OF 0) ~
.v.
· Plalnllff,
FRED LOMBARDO; .
§
§
§
HARRIS COUNTY, TEXAS
r:
NATtONAL CfTY. HOMS LOAN. . . § ·.
SERVICES, INC, DBA FIRST • . §
FRANKJ..IN I,OMI SERVICES; . .• : §
·NATIONAL CITY flANK OF INDIANA; §
KEYST<;lNEl ASSET MANAGEMENT; §
INC.; and RICHARD HOWELL DBA § ·
ALEXANDER HUNTER PROPERTIES §
AKAALEXMIDERHONTER § ·
PROPERTIES, INC., §
OE1fendants, :. ....... ·.. · . §....
LADIES AND GENTLEMeN OF THE JURY:. ~It
. . . ©i. :- .. . ...
This .case is submitted to ~ ~-asking questions about tha facts, which you
must decide from the evidence ycu ha , ~ eard In this-tria!. You are the sole judges of ths
credib!ltty of the witnesses and the 111 · ' o be given !heir testimony, but In metiers of law you
must be govemed by the-instruct! Is charge. ln discharging your responsibllily on thi$
jury, you will obsenie all !he lnstnio . hich have previously been given you. I shall now give
``````````- !ns!nJclions ~.you ~!)auld. carefu!ly. and strictly follow. during your
. •·· ~ ..
·1 •. · · Do ngtlet bl``udica a; sympathy play any part In your rlellberatlons •
. ·.· Q. . . ' .
2. In arcivl~ your ·answers, ccnslder only !he .evidence Introduced here under
. oath and sucll exh-~ii)lany, as have been introduced fer your consideration under the rulings
of the court, that· f. at you have. seen and heerd in !his courtroom, together with the law a5
glven·you b~ :t:.e.~'!i · ·ftfyciur deil_ibefationi.; yiiu wlli not consider or discuss ·anything \hat Is
notrapresen~u·e·~lV'Idence in this case. :
· :. .3;' · ·· ~ce
'every answer lha~ ~quired
is bY: lhe charge Is important, n<:> juror should
state or consider that any required answer is no! Important.
4. You must not decide who you thinR should Win, and !hen try to answer the ·
qJJestions oooordingly, Simply answer the questions, and do not discuss nor ooncern
yourselves with the ~!'feet of your answers.
EXHIBIT
I --=---
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. 5. . You wlll.notdeckje the !3£lSWer.to ~question by lot or by<:ourt's Instruction$ shall
.im~edla!e!y wam tne cine who Is ~iofating th~e and caution the illlror not to do e;o again.
. ... Wn~n words are used in
this ~¥ ui 'a sense wf\lch' vaules from the meaning
c:Ommorily underst~od, you are glva·ti a p@!kr legal deflnitlorr, wh lch yoo<1 ~re bound to accept in
place of any other meaning. tj . . •:. · .'
. Answer "Yes" or"No" to all~tions unless otherwise instructed; A"Yes" answer must
be based oo a preponderance ~"e-;;vidence,unless ptherwfse tnsb!l:!cted. It you do not find
that a preponderanceof'tha e!M!lnce supports a 'Yes• answer, !he!$ anawer"N()". The term
~preponderailce of the eVide``"\neans the gr~aterweight endrlegre.e ol credible testimony cir
evidence in !reduced befom~u and admitted to !fils <;ase. Wl1et1ever a question requires other
than a_ "Yes" or~N_o' a~M, your answertnust be basecfon a prepomderance of the evidence
unless otherwise lns``d. . · · ·· .
. . A fact m``~ta~Ushed by direct evidence or.by circw:nsl:a!:lillal evidence or both•. A
fact Is estabf!sh`` direct evidence when prove<) by documentary evidence or by witnesses
who saw the ~one or heard the·words spoken. A fac! 1~ estal!!l!lshed by circumstantial
evidence wh~ may be fakfy and reasonably inferred from other fac:ts proved. ·
. " '• ··". ' . '
..·
Definitions ;~nd Stlp,ulated Facts
.. "A!6eit OrtiZ" shall refer to the Plaintiff ir11his lawsuit:
'H(s• shail refer to· Oelilndant, NatiOnal. City Home Loan SerVices, Inc., d/b/a First Franklin
Loan Services,
"National Ctty• shall refer l'o .Defendant, National City Bank of Indiana. . ,
"Kf,lystone' shall refe( t6.Keijsto6e AsS~t Management, Inc. · ir'fP~ .
. ~The.Bin':fsallProperiy' shall ref~r.the .resld`` at 105 Blrc!sall, 1-f``n, Texas, made the
subject of this lawsuit. · . . . · . ~::??
"The Note• shall refer to the promissory note whereby Albe~il: borrowed money from
National City tO' purchase the Birdsall Property. · · · ·
. . .
(} · ·
-
. .
'The Deed of Trust' shall ref!"t ta the Jnstru111ent signed b~ert Ortlz: in connection with his
signing ofthe Note,. . .. . . . . . . . : :. :. . ~ . .
~he Lett~r Agreements' shall refe( to ~e Jti~a 23~1iJuly 5, 2006!et!efS. ·
'Howell" sHaD mean Richard Howell, d/b/a Al~der' Hunter Properties, afkfaJ Alexander
Hunter Propertl~s. lnc. £,1%Jj '
'Lombardo' shaff mean Fred Lombardo.
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OUE"STIONNO. i
Did National City fail to comply with the Deed of Trust in any one or more of the following
aspeCts? ·
consider· the follOWing instruc~ons. in respond"mg to the question, and nona
. . . other-_. .. ' ·· ·. . • .. . ~fJ:
By de<1lartng that Albert Ortiz had abandoned the Birilln~ ~ send to ~ to Albert Orti~lhe correct address.
. . .. :i'. .. .
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Answer "Yes· or 'No''.. · ""
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If you have answered .''Yes!• to Que$~on No. 1, then answer the following question.. Otherwise,
do no_t answer !hf? q'uestlori. · ·
· QUESTION NO. 2
breach of the Deed ofTrust? · . : . • . * .·
Do you.'ffnd that failure to comply with the Deed ofTrust by National CitY was a ma!srlal
A failure to comply must ba ·material. "flte' c!ncums!lih.~ to conside~ ln
determining IV~ethar af~nu.~.l? co~ply ismaterlallnelude:
'i?<,Y ·
(a) . The exte~t to which the inju~ party wm be d``of the benefit which he
: ~ . ·, . _-reasonably expected;.. . : · . · , . . . • ~ .
(b) Theextent1o'llhlch theinjur~d pa,ty ~n b~ ad~'i:e!y compensated for the part
·. of that benefit of whfch he wdl be depnved;..:_~
(c) The ·eXtent to which the party failing to perr~r or to offer to perform will suffer
(d) ~:::``~Cl~ that the party failing to P'l_~-of\0 offer to perform wiU cure his
~!~r;.;n``:n.g i:t~ ~cco~nt. the ``stances lncludlniJ any reasonable
{e) The· extent to which !he behavior•!l}the patty failing to perform or to offer to
perform com pons wlth standard~b!\\iood faith and fuic dealing.
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Answer 'r.fesn or •1NOl1; ....~
Answer: . ·'/t?.? !JJ"'·
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. ,. :· QUESTION NO. 3 .
. :. . . ' .
Do you fll\d that Albert Ortiz failed to cO!]lply with the terms of the Deed ofTrustin eny of
ihe following partiCIJtars?
..
Consider the followit19 irisl:ruc!Jons, In resp6riding to the question, and none other:
• Byfaffil)\l to occupy !h!! Birqsall P`` as his !Jrlnclpai reside~nd/orsacura the
property pursuanrto the leflTis oftlia Deed ofTrust ()."'¥
· · . ~ . 13Y. fainng to make payl111!9ts a!;. req~ire~ under.\fl~ Dee~ ffrust .
. , . ay talilog to keep too Birdsall Properly lllsured, , Jf'
Answer "Yes.• or 'No'.• .~
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If you have answ&rlia .you fi~d..tltat.!!Je failure to .comply with the Dead ofTrust by,*ert Orjiz was a
material breach at' the Dead ofTrust?_ .. . . . (/'u'
A .faill1re ro comply must be material. The clri:umst.an~.l``msider in determining
whether a failure to ~mpfy is material include: . ~ ·
· (a). ~=!`` ::``~e .ln]u~d party will be ~ed of !he beneflt which he
(b) .The eXtant to which the Injured party can be ~uataly compensated for the pari.
':' oflh!il benefrt of which he "will be deprivedi_~
· (a)· . Tha··extant to which the party failing to ~rm or ta offer to perform Will $Uffer
. fotfelture; · · fffl .
· (d) The llkeli)1ood !hat the party failing to~rform \)f to offer to perform will cure his
faiiUr!l, taking into acccH.mt th``rcumstanoas including any reasonable
a!;Surance"s; A@ .
(e) The extern to which the beha'
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If you have i.rnswered "Yes" to Question No. 6. then answer the folloWing question.
OthetWise, do not answer OuE:>stlon No.7.
... 9l,!ESTtON NO.7
Do you find that ttie letter Agreements were uriconsclonable as ·applied to.HLS and National
`` . . . -~
... . . . . . . .. . . .. ·. . · ~f!j .
· You are ins!l'ucted that an agreement Is unconscionable If it Q·
. . A.
Talias. adv"aotage of tha lack of knowledge, abiU!y, or cap· 1 "~t ~ person to a srossly
unfair degree· or
.' ·
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B. Results ln a gross disparity !letween the value rec~ and the consideration paid in
a transaction Involving the:transfa'r of oonsidar£?tion. $;-' · ·
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. ·. : Al1 agreement oan be unconscionable if enter~'flllo I~ ccntravenl!on of an attomey's
·professional obll~atians under tne·.appllcable rules· of auct · ·
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'-. '
QUESTION NO. 8
- Do you find that tlie negligerice, it' ~riy; of those nari.ed lielow proximately caused a.loss
of or dernage to.1M personal property of Albert Om?
,; ' . '
'Negligen~' means failure t~ ``e ordinatj ciue, lfi_atis, faUir\g to do that which a ~rson ·
of ordinary prudenre.would have done under the same or similar circumstances or doing that
~hlch a perso~ of mdinal)' prudence would itot have done under th~me or similar
CJrcumstances, . . - _~ . ·
·orolnary oare· rn~a'ns
that degree ot care that woutct be usa~Ya person ot ararnaty
prudence under th'§!j •
•<@
Yott are ln~tructed that a.. person who enters on re · perty ll'lwfully pursuant to a
conditional or restricted consent l!lnd remains after his or her • to possession terminates and
demand i~ made for his or !ler removal becomes a trespa from the beginning, and the law
. wilf.operate retrnspeqtfve!y to. defeat al' acts don.e by h~ Qr color of laWful authority.
· . Answer "Yes' or "No' for each ofthefollowin~ ·
. ·~©r
a. HLS: · Yr:t..> .{;:"'J
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b. National City: · _....:.fV..;__ ~
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QUESTION NO. 11
Do you find that HLS or Natlonlll Cily, or l:Joth, converted personal property belonging to
1\lbert Ortiz? ' · · · · • . · · • ·. " · · ·
. . .
:· ' Conversion
. . ' poours when each' . of' the
.· foilowing
' . elements
. ere present.
'
. 1. ·Plaintiff owned, possessed, or had the right to immediate posse~R of property,
2. Ttte propertY was p~onal property;. ... . · Qt!f; ·
. .. . . ~
3•. Defen~ant wr~n~n:lly ~x~n;lsed dominion or control ov``~propeey,
4, Plaintiff suffered Injury. . • . . Q,f}
'A~rm~f'Y~s· or 'No" far each of the fallowing • ·· ·:§:' ··
a. HLS: . . y(?;, . ~
b. National City: . }"
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QUESTION NO. 12
Do< you find ltiat HLS or Natlona(Clty, or' both, committed trespass with regard to personal
property belonging to Albert Ortiz? ·
A trespass against personal property ni:t:Urs when·a party, wi!fl or without the use offeree,
unlawfully Injures or interferes with another's.persilnal property. '!;,.~
.
Answer•Yes• or ~Nci', for each of.llle follawi~. (jp}f
.a. HLS:· v?">
,' •, ;.;. »'1"'
.L~tion comparable properties,
comhtlon of the properly at the lrme of the loss, and oth'l!))operatlng costs and expenses.
• « < < •• < < " < ""'' < •
D;, not lnclude'in· your answer any amount.that you ~Albert Ortiz could have avoided by.
.. . the. e~e(clse of re~sonablo care. · .. 'iifJ · . . ·
· .. Jn ·<'!nswering questions about damages, "
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If you h,ave answered "¥es· to Question li!o. 3 and 4 and "Ortiz" to Question No,S, and you
have answered "Yes• to Question No.7, then answer !he following question. ·
' . '' < ·' , ·qOESTION M0.14
Wltatamount of money, lf any. remain.s unpaid by Albert Ortiz to Natlonal City under the
DeedofTrtist't ·· · · · •· · · · ·· · · ·
Ansmer in dollars and cents, if any.
' '
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17
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Answer Questlon 15, if you answered 'Yes' for Oe@ndarrts tq Question 8 and answered:
1. "No" for Albert Ortrz to Questton a, or
2. 50 pail;eiit or less· for Albert Ortfz to Question 9.
. . d¢
·' ' Otherwise, . not anSwer. Questlon.15.
. '
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'. . ~ ., ' '
. QUESTION NO. 15
What sum of money, if any, If paid nevi In casli, wauld fairly a``asonab!y compensate
ALBERT ORTIZ for his damages, if any, tl:lat resulted from such n~ence?
. ~
Consider.the fol~ng elements m. damages and non``:
Fair market value. The falr market value of ~persona{ property of Albert Ortiz
:. :: tbaf.was
' lost or damaged, as of the·date of.~negligeni:e.
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Do not increase or reduce the amoontin one because of your answer to any other ao~);'r
·questio[l abput damages, Do not specula~ ~l:f!ibtwhat any party's ultimate recovery may
or mey not be, Any recovery wKI be determJ.q,llil by the Court when It applies to law to your
answers ai the Ume ofjudgmenl. Do net~ any amount for interest on damages, if any.
. . . . §;
Answar in dollars and cents for da"'",©i, ·It any. ·
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If you have ar\swered "Yes".to Questlqrt No.10,!hen answer the foUOwingquestlon.
Otherwise, do 'ndt ansvier the following q'uestion. . · . ·
. QUi:STION NO. 16
. ~: '
What sum of money, if any, if pi!ld now in ~ash, would fairly and reasonably compensate
Al.h~rt Ortiz for his damages, 1f ;l!1y,
that resulted from any trespass?
Consfder the f~Uowlng elements of ~a~ages, If any, and none oth •'\Js-
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loss of use- may be mf:lasured as lostrentel value. Rental val~ the amount of rent~
propertywoutd·eam on the open market, tilking into consldera~comparallle properties,
·_oondi!ion of the p:opeJ:tY. at the ur,ne oftbe loss, and other ring costs and e;.:penses.
Do'ncitinclude in your answer an)T amount that Y?U Rnd ffi.~ Ortl~ could have avoided by
.
the exercise of reasonable care.
. . 4~' .
In ~swering questions about damages, -~nsw~JI!}~ch question ~eparalafy. Oo not
increase or reduce the amount ln one answer becau~e!f your answer to any other question
about damages. Do not speculate about What any pa!ID\'1 ultimate recovery may or may !lOt be.
Any recovel'f will bedete!ll)lnell_ b)l the.courtwhen ll)~ .
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., If your. answer to Question Number 12 );~ ''Yes•, then answer the following question.
Otherwise;do not answer the following question: · · ·· ·
QUESTION NO. 18
What sum of money, ifany, if paid now in cash, would fairly and reasonably com pens ate
ALBERT ORTIZ for his damages,}f any, that resulted from such trespass ~rsonalty?
. Consider th~:fo)lowing elem~nts'of d~niages and none other. d
. .. . . . a,·. :Fair market value. The fair market value of thi!~onal property of Albert
as
brtlz'thatwas'trespassed'upao, of' the date of the !res•~.
. ' -~
Do not lnorease or reduce the amount in one answ~ause of your answer to any
other question about damages. Do not speculat~'lf~t what any party's ultimate
recovery may or may .not .be. Any recovery wur ~'\:letermlnod by the Court when lt
ap!}lies to law to your answers at the lime of ``ent. Do not add any amount fbr
interest on damages, if any. . . .. : · ... (ft=. ·
. Answer
...... . .
i~ d~lars and cents for damages,.n.if~ ~·
f\nswer. $ ·i \:>,.., 0 iJ ..@'
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If you have answered 'Yes" to ~estioii No. 1and 2 and 'National City" to Quesflon
No.5, than answer the foil not' answer the follow'illg wing: ,&
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.a. For preparation and trial.
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b. For ail· appeal to. !lie Court ~eala:
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· c. . For making or resp~g to an application for writ of error io the
Supreme c:ou~t ofTexa~.~
Ans~e~ ··. ··· · ··--·i:!J· · · · .·
-- d. If appllet~a objectively from the standpoint of
. Defendants at:tl'\e time of its oecurrenoe involves an
extreme d~e of risk, eonsideling !he probability
and· maf}fi\J'd$ of the potentlalharm tO oJhers; and
(b) of w,a'RlWDefendants has actual. subj.ictive
a.ess oHhe risk involved!, but nevertheless
· R!Jl,oeeds with conscious indlfferenoe to the rights,
.~ety, or welfare of others.
'·'' ' .. . ~
Answer 'Yes' or "i'lo."O\ .. · ··· ·
. Answer. / .e``
- ... ury
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After you retir& to the ]IllY· room. you will select your own presiding juror. lhe flrst thing
the presiding juror will do is to have this complelll Chl!rge read. aloUd and then you will
deliberate upon your· answers (o the questions asked. · ·
It Is the duty ofthe.presidiilg
. [uror-...
' ..
:·
. 1. to preside durlng your deliberations,
', 2. ... to:~.. that your deliberatio~s are conducted in an ora·*'manner and in
aCC!).rdance with the Instructions In this charge, (/'.'
3. . to write out and hand to the baRiff any oommuolcation~ncernlng the case that
you desire to have delivered \p the judge, C ·
4. to vote an !lie questions,· ``
· .5. . . to v,:~!e ycur answers to the questiot1S.. in the~•e.>ces provided, and ·
. ' .· 1§3,\r
. 6. . Ia certify to your verdict in the space prav~forthe presiding juror's signature or
to obtain the signatures of all the juro~o agree with the verdict if your verdict
is Jes·s than unanimous. ·~ : · ·
. . . ~
· You should not discuss the case with an~lie, not even with ather members ofthe jury,
unless all of you .ar.e.pJesentan.d assembled, i@ile jury room. Should anyone attempt to talk to
you about the case beloie the verdict i? r'lfu(ll!ld, whether at the oour!house, at your home, or
. elsewhere, please Inform the court of thl~mct . .
.· .·· ' \ivhen Yo~· have answer`` a!!Jile que~ti~ns you are required to answer under the
• lMtn.Jctians of the· court and yo~"1{;;idfng juror has placed your answers In the spaces
provided and signed th~ verdict ¥'~iding ju.rar. 9r ob)ained the signatures, you will inform the
bafi!ff at thedoorofthejury ~at you have reached a verdict, and then you wm rerum into
court with your verdict,. · ~ ·· · · .
•. (»{'£ . . .
. ~· ..
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. 24
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C&rtifleate
, •, '. We,Jhe.J!;!!Y. ·have a~re,i !he Ji!bove aod. foregoing queStions as herein indicated,·
. and herewith
. retUrn same ln!o court.as our'Jerd1ct.
.
(fci be signed~ by ti16 presiding juror lft~e jury Is unanimous.),
.. ',, :. !='RESIDING JUROR
,;, ·.· ,•
,. .;_·-~-------
25
'··".
... ,•
'·:
1OFFICtAL Co uRI Copy ;
L_
'
:: '
CAUSE NO. 200S:.S11.7.8
ALBERT ORTIZ, . § . IU THI: DISTRICT COURT OF
Plaintiff, §
§
v. . ... ,.
§
§ HARRIS COUNTY, TExAS
FRED LOMBARDO; . , § ~"
N,tiTIQNAL(;ITYHOMELOAN.
St;::RVICI":S, INC; DBA FIRST
.. §
§.
·.· FIIJ.E
. ;,Jl;nJ"'"'
D
FRANKUN LO:AN SERVICES; § -~ •<>aBli<
NATIONA!:. CITY BANK OF INDIANA; § '\,.. ·
KEYSTONE ASSEIT MANAGEMENT, § ;if; UN-~ 9 2fi10 .
INC.; and RICHARD HOWELL DBA . § ~- . 1.> .' ov /) fiA.
Al.E.XANDER HUNTER PROPERTIES § . --J~'ii~Q._40~---
AI norrettim a quo~ent ven:ffct._ A quotient ven:fict means tl)at U1e
JUrors _agree to abide by-the !):)suit to be reaChed by adding together each jurors figures and
dividing by the number of jurors to get an average; Do not do-any trading on your answers; that
·· .i.~, oire jtlrqr shoUld. pot agree to '!flllwer a cerjain question one W'f!Y if others will agree to
answe``otl!~a:u::o``::``u~:rdict upbn the vote of tan or morA ``ers
of the jury: ·
The same ten or m<:Jre o( yqu must agree upor\ all ofthe answers made~ the
entire verdict.
You will not, therefore, enter into an agreementlt1 be botJnd by a mEI!?rll'f or any other vote or
IE>ss than ten jurors •. lftfle verdict and all of the answers therei!:n ffi)"raached by unanimous
agreement, the presk:!!ri~:furor shan sign the verdict for the errtire l!l! . If any Juror disagrees as
to any answer.made by the verdict, those Jurors who agree tO<>., 111dlngs shall each sign the
veryict. {'}'
. ``ese in&Juctions are given you becauseyouroo ·~issubject!Q review the same as
th<;~t
of the witnesses, parties, attorneys and the jud ll.should be found that you have
disregarded any of !!lese !nstructlo!ls,. it will be jUI)I • duct and it may require another trial
by ano!herjury; then aU of-our time will have been ~ed. . . .
0
. 1be presiding juror or ·any 0\her.who ohs~s a violation of !he court's instructions shall
immediately warn ina: ohe who -iS 'violating th·e . e and caution the juror not to d<:> so again.
. . . ... . 'od, Y?U are given if~ legal definition, which Y.,u are bound to accept lrr
piaceofanyothermaan~g. _ rt!j .. . · .
Answer 'Yes•. or "No" to a~sdons unless otherwise instructed. A "Yes" anS'II'ef must
be based on a preponde,raoce· ~e evidence unless otherwise inwuctethetVvTs~ 1nsV,'~d. .· · ·: . . . . .
. F'ili .
A fact m``stablished by direct evidence_ oi by circumstantial evidence or both. A
fact Is establish · direct evidence when prov~ by ,dpc)lmentary evld ence or by witnesses
who saw the~ one .or h!'la~d the words spoken. A fact Is established py clrcum.stmtlal
evidence w~t may be fairly and reasonably inferred from other facts proved. · ·
"Albert Ort)z" shaU refer to the
Definitions and Sliputated Facts
~ '.
Pl~intiff in this lawsuit.
.. ' .
"HLS"·shall rel'erto Def11ndan~ Nalbnal Cll:y Home Loan Services, Inc., d/b/a Fllst Franklin
Lo_an Servloes. · · ·· · · · · ·
"Natfonal City" shall r.efui to Defend``· f.!a!io[lal City Bank of !~diana . ~:& .
"Keystone" shan refef ro Keystone Asset Management, Inc:. . ~
· ~Tru;Bbti&~ll pibpefty' shaH ~r the·~eslden.:e.at 10$. Birdsall, H~(l,n, Texas, made the
subject of.this lawsuit · · · ·· 6,~
"The NobJ~ shall ~fer ta the promissory note Whereby Alb``:;: ·borrowed money· from
National City to purchase the Birdsall Propertjl. · · · Q· ·
'The Deed of Trust" .shaU 'ry;f'er !o. the instrument signed ~bert 0~ in c~oectlon with hls
signing of the ~ote, · . r . . : · . . .' . . . ,");;'!if! . :
~The ~tter Agreemen!!l' &hall refer to the June z~i{;July 5, 2006 letters. ..
. "HO'weii• shall mean Richard Howell. d/b/a Al~nc!er Hunter Properties, aJk!a! Alexander ·
Hunter .Properties, lnct. /?) ·
. . (f
"Lombardo' shall mean Fred Lombardo. It,.~
~
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3
•..
-,
QUESTIONf
You are in,stmctcdtha:t }'bu'lf!Ust unl\llimously agree on the attJOlJIII of any awatd of
cxcinplw:y damages: , ·-
., ''' ..
' .
. ~ .
. to
After you mtlre the jury room •. you Will select your own presidln!l Juror. The first thing
. .Qre gresidlnl:riUr.or .will do Is to have tl11.s c;ompl<>~ charge ~ead. aloud and then you will
· deliberate upon you'r answers to thB qaestlnns asked. ·
II Is the duly oftlla presiding juror-c
,· ..
L to preside.~urlng your deliberations,
2. to $!!6. that your 9elb.erat!Ons are conducted .in an ordl'manner and ln
~CO/dance wtth the instructions In this charge, (}: • ·
·· · . 3. .. to write out and hand jJ:r the bailiff any communloali~ncerninr;J the case that
you desire to have delivered to the judge, .'If: .
.. ~ .
4. fo. vote optha questions, . . tf;p~
5. to wri\a your answers lo the questions in the@ces prov~. and
. 6. ' ' r:£!"" .
to certify to .your.verdict lnihe·space p .. · for tha presiding juror's signature or
. ~ obf>
1u~
t;j.
-~
-~·
24
... ·.
:'•
-: . . '".
' ..
','
'.': C..rtifroate
We, !ne jury, have ~flSWered the ·above and fo~egolng questions as herein indicated,
and herewith return ~aine.into court as our'verdict.
.. . . . Printed Nan;~resfding Juror
(To be .signed by tllosa rendering the ~erd!ct ff !he jury I~ ~tJanimoUs.).
' ~
Jl.!rol'$' S1gn``re~ . . . J~<>Printed Names
~· .· .. , .
. .·.
25·
Opinion and Dissenting Opinion of November 20, 2012 Withdrawn and
Judgment Vacated; Appellee's Amended Motion for Rehearing Granted in
Part and Denied in Part; Appellant's Motion for Rehearing Denied as Moot;
Petition Denied; Affirmed in Part; Reversed in Part; Remanded; and Opinion
and Dissenting Opinion on Rehearing filed May 16, 2013.
In The
N0.14-10-0l125-CV
NATIONAL CITY BANK OF INDIANA AND NATIONAL CITY HOME
LOAN SERVICES, me., Appellants/Cross-Appellees
v.
ALBERT ORTIZ, Appellee/Cross-Appellant
On Appeal from the 164th District Court
Harris County, Texas .
Trial Court Cause No. 2006-61178
N0.14-10-01262-CV
lN RE ALBERT ORTIZ, Relator
EXHIBIT
I 1
ORIGINAL PROCEEDING
WRIT OF MANDAMUS
OPINION ON REHEARING
We withdraw our opinion and vacate our judgment of November 20,2012;
grant appellee's amended motion for rehearing in part and deny it in part; deny
appellants' motion for rehearing as moot; and on rehearing, issue this opinion and
its accompanying judgment.
In this opinion on rehearing, we address cross-appeals and a mandamus
petition arising out of the foreclosure of a residential property. The bo1rower,
Albert Ortiz, sued the bank and its mortgage servicer for a variety of claims
including wrongful foreclosure, breach of contract, negligence, trespass to real
property, trespass to personalty, and conversion. Th.e bank counterclaimed to
recover on the note and to judicially foreclosure the deed-of-trust lien, and the
borrower responded that the bank's representative had signed letter agreements
waiving and releasing the bank's claims. The trial court granted summary
judgment in favor of the borrower on his wrongful-foreclosure claim, set aside the
foreclosure sale, and restored title in the property to the borrower. The trial court
also granted partial summary judgments allowing the bank to pursue claims under
the deed of trust, but not to pursue claims arising from the promissory note. After
a jury trial, the trial court rendered judgment in the borrower's favor on his claims
for breach of contract, trespass to personalty, and gross negligence, and ruled
against the bank and mortgage servicer on all of their claims, instead declaring that
the borrower had no further obligations under the note and deed of trust.
The effect of the trial court's judgment was to award the home to the
borrower free and clear of all debt on this loan (on which he had repaid none of the
$472,000 principal) and to additionally award him damages and attorney's fees in
2
the amount of$497,600.
Wr; conclude that the trial court erred in (a) granting summary judgment in
Ortiz's favor on his argument that the bank waived or released its claims, and in
incorporating the erroneous interlocutory rulings into the fmal judgment;
(b) denying the bark's claim for judicial foreclosure; and (c) declaring that the note
and deed of trust are "fully, completely and finally satisfied and no past, present, or
further obligations or sums are or shall become due and owing." The trial court
did not err, however, in (d) applying the one-satisfaction rule to limit the damages
awarded to Ortiz, (e) failing to render judgment that the bank's judicial-foreclosure
claim was time-barred, or (f) denying Ortiz's motion to expunge the notice of lis
pendens. In light of our disposition of these issues, we deny Ortiz's petition for a
writ of mandamus, affirm the judgment in part, reverse it in part, and remand the
case for retrial of the bank's claim for judicial foreclosure, which we conclude is
not time-barred, and the breach-of-contract claims between the bank and Ortiz.
I. FACTUAL AND PROCEDURAL BACKGROUND
On March 15, 2004, Albert Ortiz, the plaintiff below, purchased a house
("the Birdsall Property'' or "the Property''), and fmanced it by executing a
promissory note ("the Note") secured by a deed of trust ("the Deed of Trust"). At
all material times, defendant National City Bank of Indiana ("National City") was
the owner and holder of the Note and the beneficiary of the Deed of Trust, and
defendant National City Home Loan Services, Inc. ("BLS") was the mortgage
servicer.1 .
Under the terms of the Deed of the Trust, Ortiz was required to maintain
1 futheir notices of appeal and documents filed in this court, the parties identify "HLS"
as "Home Loan Services, fuc.," but no such corporation is identified in the parties' pleadings in
the trial court or in the trial court's judgment fu Ortiz's pleadings "IlLS" is identified as
''National City Home Loan Services, Inc. d/b/a First Franklin Loan Services." fu the trial court's
judgment, "HLS" also is identified as "National City Home Loan Services, Inc."
3
insurance on the home. If he failed to do so, then National City was permitted to
insure the Property and treat the amounts expended for insurance as additional
secured debt. Although Ortiz's privately purchased insurance was still in effect at
this time, HLS sent a notice to Ortiz on September 1, 2004 that it had insured the
Property and charged his escrow account for the annual premium shown on the
policy it enclosed with fue notice; however, HLS sent fue letter to the wrong
address. The premium on the policy enclosed wifu fue letter was $10,903.00; with
taxes and surcharges, the total amount charged was $11,442.70. As Ortiz later
testified, HLS (a) applied Ortiz's mortgage payments to this insurance purchase,
and in a telephone conversation with Ortiz, demanded that he make additional
payments to cover the resulting deficiencies; (b) made a negative report to a credit
bureau based on the erroneous conclusion that Ortiz had not paid all that was due;
and (c) learned of its mistake and agreed to correct the negative report to the credit
bureau, but failed to do so.
Ortiz consistently paid late or missed payments. On November 1, 2005,
HLS mailed Ortiz a notice of its intent to accelerate the loan, and on December 21,
2005, HLS notified Ortiz by mail that it had accelerated the loan, but these letters
also were misaddressed. During this same time period, HLS caused the locks at
the home on the Property to be changed, and although Ortiz did not reside there, he
kept personal property there that was never returned to him.
At the request of Ortiz's attorney, HLS faxed the rnisaddressed documents
concerning acceleration of the loan to Ortiz's attorney on January 13, 2006. By
that time, a foreclosure sale had been scheduled for February 7, 2006. Although
that sale did not take place, Ortiz continued to miss payments, and the Property
was posted for a foreclosure sale to occur on June 6, 2006. That morning, Ortiz
filed a lawsuit against National City and HLS (collectively, the "Bank Parties") to
enjoin the sale. The trial court denied Ortiz's request for a temporary restraining
4
order, and National City purchased the Property.
Less than three weeks later, Ortiz's attorney Michael Donovan bypassed
I-lLS's counsel and contacted an HLS employee directly, asking the employee to
execute a proposed letter agreement that Donovan had drafted. The employee was
not an attorney, and he forwarded the letter to another non-attorney employee who
signed the Jetter agreement as an "Authorized Representative" of HLS and of
National City's predecessor. Two weeks later, Donovan again bypassed HIS's
attorney and sent a proposed amendment to the letter agreement to the employee
who had signed the first leiter. The employee signed and returned the amendment
as the authorized representative of National City. ·In these two letters ("the Letter
Agreements"), National City stated that it "releases and waives any and ail actual
and potential demands and claims regarding any obligations or liabilities of [Ortiz],
in connection with the [Property], including the note and deed of trust associated
with such property."
Two months later, Ortiz filed another suit against the Bank Parties. Over the
course of the litigation, he amended his petition eight times to add more parties and
causes of action. As relevant to the issues presented here, he ultimately asserted
that National City was liable to him for wrongful foreclosure and breach of the
Deed of Trust, and that both of the Bank Parties were liable for negligence,
conversion, trespass to realty, and trespass to personalty. Ortiz also requested a
declaratory judgment that (a) he owes no further debt whatsoever to National City
under the Note, the Deed of Trust, or otherwise, even if the trial court were to set
aside the foreclosure sale; (b) through the Letter Agreements, National City waived
or released its claims against Ortiz concerning his indebtedness under the Note and
the Deed of Trust; and (c) the Letter Agreements do not fail for lack of
consideration. In response to Ortiz's allegations regarding the Letter Agreements,
National City raised the affirmative defense that the purported agreements were
5
unsupported by consideration. National City also asserted counterclaims for
breach of the Note and for judicial foreclosure of its lien on the Birdsall Property.
In addition, National City asked for declaratory judgment that (a) th.e Letter
Agreements are void because Ortiz's counsel obtained them by directly contacting
a party that he knew was represented by counsel, thereby violating Texas
Disciplinary Rule of Professional Conduct 4.02; and (b) if the foreclosure sale is
void, then National City's deed-of-trust lien is valid, the debt is revived, and
National City may proceed with a new foreclosure.
The trial court granted a partial summary judgment in Ortiz's favor as to his
'NTongful-foreclosure claim. Ill an order signed October 28, 2008, the trial court
set aside the trustee's deed conveying title in the Property to National City and
ordered title in the Prope1ty restored to Ortiz. That ruling is not challenged in
these proceedings.
In a number of different explicit and implicit rulings, the trial court
addressed the parties' arguments about the validity and effect of the Letter
Agreements. In April 2009, the trial court granted Ortiz's motion for partial
summary judgment on "Defendants' counterclaims" concerning the Letter
Agreements. In June 2010, the trial court ruled again on the same summary-
judgment motion and on an additional summary-judgment motion concerning
Ortiz's claims and affirmative defenses on the same subject. In the June 2010
. ruling, the trial court stated "findings" that the Letter Agreements (a) "lack
consideration, and accordingly are not valid contracts to be enforced for all
purposes; and (b) contain a "valid agreement to release/waive [Ortiz's] obligation
on the Note." The trial c.ourt concluded that the Bank Parties were "to take nothing
for any claim arising from the Note" but were "entitled to pursue claims as to the
Deed of Trust."
Despite these rulings construing the effect of the Letter Agreements as a
6
. '. --·'
matter of law, the trial court submitted a question to the jury for a flnding of fact
concerning the meaning of the Letter Agreements. The jury found in pertinent part
as follows:
• In the Letter Agreements, neither National City nor HLS "validly
agree[d] that [Ortiz] would receive ownership and possession of the
[Property] without obligation for further payments on the Note and that
[HLS] and [National City] would not pursue any claims, lawsuits and/or
obligations that they could have asserted against [Ortiz]."
• Ortiz and National City each materially breached the Deed of Trust.
• National City breached the Deed of Trust first.
• National City's breach caused Ortiz damages of $100,000 in loss of
rental income for his loss of use of the Property.
• HLS trespassed upon the Property, causing Ortiz damages of $77,000 in
loss of rental income for his loss of use of the Property.
• HLS's negligence proximately caused Ortiz the loss of personal property
having a fair market value of$10,000.
• HLS converted Ortiz's personal property having a fair market value of
$1,500.
• HLS committed trespass upon personalty, causing Ortiz's loss of
personal property having a fair market value of$1,500.
• IlLS was grossly negligent and should be assessed exemplary damages of
$100.
• $400,000 is a reasonable fee for the necessary services of Ortiz's
attorneys for preparation and trial of the ease. The jury failed to assess
any appellate attorneys' fees.
Both Ortiz and the Bank Parties flled motions irr which they asked the trial
court to disregard certain jury fmdings and to grant judgment on the verdict in
other respects. Although the jury rejected Ortiz's contention that National City
agreed not to pursue any claims concenring his indebtedness, the trial court granted
7
Ortiz's motion to disregard the finding and explicitly incorporated fue interlocutory
summary judgments into the final judgment The trial court impliedly granted the
portion of the Bank Parties' motion in which they argued that, under fue one-
satisfaction rule, Ortiz was not entitled to recover multiple damage awards for each
injury. The trial court also impliedly granted fue portion of the Bank Parties'
motion in which they argued that they were entitled to a settlement credit of
$12,500, representing fuc amount paid by .their alleged agent, Keystone Asset
Management, Inc., to settle Ortiz's claims against it
After applying fue settlement credit, the trial court rendered judgment that
Ortiz recover actualdamages $87,500 from National City and $10,000 fi:om HLS;
exemplary damages of $100 from HLS; attorneys' fees of $400,000 from National
City; pre- and post-judgment interest; and costs. In addition to the monetary
awards, the trial court declared that the "Note and Deed of Trust are fully,
completely, and finally satisfied and no past, present, or further obligations or sums
are or shall become due and owing under said Note and Deed of Trust," and that
the Substitute Trustee's Deed of June 6, 2006 "resulting from Defendants'
·wrongful foreclosure of the Property[] is set aside, rescinded, deemed null and void
and of no effect."
Both Ortiz and the Bank Parties have appealed.
On the same day fuat it rendered final judgment, the trial court signed an
order denying Ortiz's motion under Texas Property Code section 12.0071 to
expunge a notice of lis pendens filed by the Bank Parties. Ortiz filed an original
proceeding in this court seeking mandamus relief regarding this order. We
consolidated the mandamus proceeding with the appeal.
IT. ISSUES PRESENTED
In their first issue, the Bank Parties contend that the trial court erred in
granting judgment that Ortiz had no obligation on fue Note and Deed of Trust,
&
because the Letter Agreements are not enforceable. 'Ibey argue in their second
issue that Ortiz's prior breach of the Deed of Trust bars him from recovery for any
alleged breach by National City; thus, the trial court erred in rendering judgment
2
for Ortiz for breach-of-contract damages and attorney's fees.
In his cross-appeal, Ortiz asserts that the trial court reversibly erred by
(a) failing to award Ortiz appellate attomey' s fees against National City; (b) failing
to award Ortiz the cumulative amount of damages that the jury assessed against
HLS under different theories of liability for the same injuries; (c) applying a
$12,500 settlement credit to the amount of Ortiz's damages against National City;
and (d) failing to grant Ortiz judgment on his statute-of-limitations defense to
National City's judicial-foreclosure claim.
In his original proceeding, Ortiz additionally contends that the trial court
clearly abused its discretion in denying his motion to expunge the Bank Parties'
notice of lis pendens.
ill. CLAIMS AGAINST NATIONAL CITY
A. I>i.d the Bank Parties Unambiguously Renounce Any Rights to Further
Payment or Foreclosure If the June 2006 Foreclosure Were Reversed?
In their first issue, the Bank Parties contend that the trial court erred in
rendering judgment that Ortiz has no obligation on the Note and the Deed of Trost.
In making this argument, they effectively challenge the legal sufficiency of the
evidence on which the following rulings were based: (1) the interlocutory partial
summary judgment of April 9, 2009; (2) the trial court's interlocutory order of
June 14, 2010 granting in part and denying in part the parties' cross-motions for
partial summary judgment; (3)the trial court's 1uling, incorporated in the fmal
judgment, granting in part and denying in part the parties' cross-motions for entry
2HJ,S appealed the trial court's judgment, but it has not assigned any error or presented
any argument challenging the trial court's money judgment against it.
9
of judgment and to disregard certain jury findings; (4) the denial of the Bank
Parties' motion to modifY the judgment; (5) the denial of their motion for judgment
notwithstanding the verdict; and (6) the denial of their motion for new trial.
When reviewing the legal sufficiency of the evidence, we apply the same
standard of review regardless of the procedural vehicle used to raise the issue. See
City of Keller, 168 S.W.3d at 823. That is, we review the evidence in the light
most favorable to the challenged finding and indulge every reasonable inference
that supports it. ld. at 822. We credit favorable evidence if a reasonable factfinder
could, and disregard contrary evidence 1.U11ess a reasonable factfi.nder could not.
See id. at 827.
1. The trial court erred in granting Ortiz partial summary judgment
as to "any claim arising from the Note mentioned in the Letter
Agreements."
A party who has raised an affirmative defense and moves for summary
judgment on that basis bears the burden of proving each essential element of the
defense. See Fed. Deposit Ins. Corp. v. Lenk, 361 S.W.3d 602, 609 (Tex. 2012).
Here, the Bank Parties asserted claims for amounts due under the Note and the
Deed of Trust, to which Ortiz raised the affirmative defenses of waiver and release.
See TEx. R. CIV. P. 94 (listing "waiver" and "r:elease" as separate affirmative
defenses). The Bank Parties then asserted an additional counterclaim in which
they asked the trial court to "declar[e] the legal significance of the Letter
Agreements." They asserted that the Letter Agreements were "null and void ab
initio for failure of consideration .and/or due to the fraud committed by Donovan,
Ortiz's attorney, in obtaining the Letter Agreement[s]." They additionally argued
that by retaining the benefits of the Letter Agreements, Ortiz ratified the
foreclosure.
In the first sul1J.Illary-judgment motion at issue in this appeal, Ortiz sought
10
judgment on the following grounds:
(a) In the Letter Agreements, the Bank Parties expressly waived all
claims against Ortiz;
(b) The Bank Parties' claims for declaratory judgment were
impermissible attempts to recast affirmative defenses as
counterclaims;
(c) No evidence supported the assertion that Ortiz ratified the
foreclosure;
(d) Failure of consideration did not render the waivers void because
waivers require no consideration;
(e) With respect to the Bank Parties' assertion that Donovan's
alleged fraud in obtaining U1e Letter Agreements rendered those
contracts void, Ortiz argued that
(i) a violation of the Texas Disciplinary Rules of
Professional Conduct does not give rise to a private cause of
action, and
(ii) the Bank Parties could not establish that they relied on
Donovan's failure to inform them of the lawsuit, because their
attorney's actual knowledge of the lawsuit was imputed to
them, and because the lawsuit was filed as a matter of public
record.
(f) In a supplement to the summary-judgment motion, Ortiz
asserted that the evidence conclusively showed that National City
breached the Deed of Trust, and thus, National City was liable for
breach-of-contract damages and attorney's fees in an uuspecified
amount.
The Bank Parties responded that "[t]he Letter Agreements represent a
release of liability which requires consideration," and that "[t]he only consideration
possible for the Letter Agreements would be [Ortiz's] ratillcation of the
11
3
foreclosure." They argued that because Ortiz moved to set aside the foreclosure,
there was no consideration. The Bank Parties had stated in their pleadings that the
Letter Agreements were ambiguous, and although they denied in their summary-
judgment response that the Letter Agreements were ambiguous, they neve1theless
argued that if the agreements were ambiguous, then the ambiguity should be
construed against Ortiz because his attorney drafted the letters. In addition, they
argued that because Ortiz circumvented the Bank Parties' counsel in violation of
the Texas Disciplinary Rules of Professional Conduct in order to obtain the Letter
Agreements, there was at least a question of fact as to the parties' intentions. As
for Ortiz's breach-of-contract claim, the Bank Parties asserted that as a result of
Ortiz's repudiation and material breach of contract by failing to make paymenls
when due, th.ey were discharged from performing under the contract. They further
asserted that Ortiz failed to plead or prove damages from the alleged breach.
In April 2009, the trial court granted Ortiz's partial summa'ry-judgment
motion without stating the grounds for the ruling; however, the trial court allowed
the Bank Parties to amend their pleaclings to assert claims for all amounts due
"under the Deed of Trust." Ortiz then moved for summary judgment again,
arguing that the Letter Agreements were express waivers of all claims against him,
and that at the time the Bank Parties executed the agreements, they were aware of
Ortiz's lawsuit challenging the foreclosure. The Bank Parties again asserted that
the Letter Agreements were releases that were unenforceable due to the absence of
consideration, or alternatively, th.at the consideration for the releases was Ortiz's
ratification of the foreclosure.
On June 14, 2010, the day before the start of the jury trial in this case, the
trial court issued an order providing in pertinent part as follows:
3 Two years after the Letter Agreements were signed, the trial eourt set aside the sale
because the required foreclosure notices were sent to the wrong address.
12
The Court has reviewed the following pleadings: Defendants'
Motion for Partial Summary Judgment on their Declaratory Judgment
Claim and Plaintiff's Motion for Su=ary Judgment as to
Defendant's Counterclaims and as tu Plaintiff's Declaratory Judgment
Claim. After review of the foregoing pleadings, all responses, and
arguments made during the Thursday June 3, 2010 pre-trial
conference[, t]he Court enters the following findings and Orders:
Both Motions are Granted in Part and Denied in Part.
The Court finds,
1. That the Letter Agreements making basis [sic] of the
motions lack consideration, and accordingly are not valid contracts to
be enforced for all purposes.
2. That the portion of the afore-mentioned Letter
Agreements concerning the Note on the subject property is a valid
agreement to release/waive Plaintiff's obligation on the Note, under
the tenants [sic] of Texas Business and Co=crce Code§ 3.604 and
as of the date of the Letter Agreements.
It is ORDERED, that [the Bank Parties] are entitled to take
nothing for any claim arising from the Note mentioned in the Letter
Agreements.
It is ORDERED, that [the Bank Parties] are entitled to pursue
claims as to the Deed of Trust on the subject property.
The basis for the trial court's ruling is stated in its "findings." As we
previously have explained, "If summary judgment is proper, there are no facts to
find and the legal. conclusions have already been stated in the motion and the
response." Golden v. McNeal, 78 S.W.3d 488, 495 (Tex. App.-Houston [14th
Dist.] 2002, pet denied) (citing 1KB Indus. (Nigeria) Ltd. v. Pro-Line Corp., 938
S.W.2d 440, 441 (fex. 1997)). Thus, "[t]he trial court should not make, and the
appellate court cannot consider, such findings and conclusions in connection with a
summary judgment." Id Here, however, the trial court stated in its final judgment
"that all partial and/or interlocutory judgments heretofore granted in this case are
13
hereby made final and incorporated into this Final Judgment." In light of the
pleadings requesting a declaratory judgment on the legal effect of the Letter
Agreements, we construe the trial court's "findings" incorporated into the final
judgment as the requested declaration.
Summary judgments may only be granted upon grounds expressly asserted
in the sununary-judgment motion. TEX. R. CN. P. 166a(c); G & H Towing Co. v.
Magee, 347 S.W.3d 293, 297 (Tex. 2011) (per curiam). Here, however, the trial
court ruled based on grounds that were not properly before it. Thus, we conclude
that the trial court erred in granting Ortiz's motions for summary judgment
concerning the Bank Parties' claims under the Note because the rulings were not·
supported by grounds raised .in the motions.
a. The trial court erred in granting partial summary judgment
on a statutory ground that was not encompassed in Ortiz's
summary-judgment motions.
At a: pretrial conference on June 3, 2010, less than two weeks before trial,
Ortiz argued for the first time that the Letter Agreements were governed by a
provision in this state's codification of the Uniform Commercial Code. During the
hearing, Ortiz argued that the Letter Agreements were enforceable even in the
absence of consideration because Texas Business and Commerce Code section
3.604 provides that "[a] person entitled to enforce an instrument, with or without
consideration, may discharge the obligation of a party to pay the instrument ... by
agreeing not to sue or otherwise renouncing rights against the party by a signed
record." TEX. Bus. & CoM. CODE ANN. § 3.604(a)(2) (West Supp. 2012). No such
statutory grounds for summary judgment were presented in his v.Titten summary-
judgment motions. Although Ortiz argues on appeal that this basis for judgment
was properly before the trial court based on the waiver arguments presented in his
summary-judgment motions, those arguments were based solely on the common
14
law, as can be seen by the authorities he cited.
Ortiz argued in his summary-judgment motions that the Letter Agreements
were express waivers for which no consideration was required. In support of this
position, he cited cases showing that, under the common law, waiver can be
express or can be established through a parties' actions. See, e.g., Motor Vehicle
Bd. of Tex. Dep't ofTransp. v. El Pasolndep. Auto. Dealers Ass'n, Inc., 1 S.W.3d
108, 111 (Tex. 1999) (per curiam) ("Although waiver is ordinarily a question of
fact, when the facts and circumstances arc admitted or clearly established, the
question becomes one of law."); Tenneco Inc. v. Enter. Prods. Co., 925 S.W.2d
640, 643.-44 (Tex. 1996) (explaining that although "[w]aiver ordinarily is a
question of fact," it becomes a question of law when "the facts and circumstances
are admitted or clearly established," and holding that testimonial admissions
proved waiver as a matter of law); Sun Exploration & Prod. Co. v. Benton, 728
S.W.2d 35, 37 (Tex. 1987) (explaining that "the waiver of a condition precedent
may be inferred from a party's conduct").
Although Ortiz characterized the Letter Agreements as express waivers for
which no consideration was required, the parties were already in litigati.on with one
another; thus, Ortiz was asking the trial court, in effect, to treat the Letter
Agreements as releases. A release is a writing providing that a duty or obligation
owed to one party to the release is discharged immediately. See Nat'! Union Fire
Ins. Co. ofPittsburg, Pa. v. Ins. Co. ofN. Am., 955 S.W.2d 120, 127 (Tex. App.-
Houston [14th Dist.] 1997), aff'd sub nom. Keck, Mahin & Cate v. Nat'/ Fire Ins.
Co., 20 S.W.3d 692 (Tex. 2000); RESTATEMENT (SECOND) OF CmrrRACTS § 284
(1981). A release of a claim or cause of action extinguishes the claim or cause of
action. Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 508 (Tex.
1993). None of the grmmds expressly presented in Ortiz's summary-judgment
motions or replies addressed the Bank Parties' summary-judgment responses that
15
the Letter Agreements are releases for which consideration is required. See US
Fire Ins. Co. v Republic Nat'l Life Ins. Co., 602 S.W.2d 527, 529-30 (Tex. 1980)
(release requires consideration); Torchia v. Aetna Cas. & Sur. Co., 804 S.W.2d
219, 223 (Tex. App.-El Paso 1991, writ denied) (same); Leonard v Texaco, Inc.,
422 S.W 2d 160, 165 (Tex. 1967) (settlement agreement requires consideration).
See also McLernon v. Dynegy, Inc., 347 S.W.3d 315, 335 (Tex. App.-Houston
[14fu Dist.] 2011, no pet.) ("Generally, a contract must be supported by
consideration to be enforceable."). Cf Pate v. Eversole, No. 14-03-00250-CV,
2004 WL 582319, at *ln.l (Tex. App.-Houston [14fu Dist.] Mar. 25, 2004, pet.
denied) (mem. op.) (settlement agreement concerning amount due under
promissory note was supported by consideration in the form of a promise to
postpone the foreclosure sale). In particular, Ortiz did not contend that fuere is a
statutory exception to the common-law rule that a release requires consideration.
The common-law arguments in Ortiz's motion cannot support 5Ulllillary-
judgment based on the Uniform Commercial Code because the U.C.C. "preempts
principles of common law and equity that are inconsistent with eitherits provisions
or its purposes and policies."' AMX Enters., Inc. v. Bank One, N.A., 196 S.W.3d
202, 207 (Tex. App.-Houston [1st Dist.] 2006, pet. denied) (quoting TEX. Bus. &
CoM, CODE ANN. § 1.103 cmt. 2). If, as Ortiz belatedly argued, section 3.604
rendered the Letter Agreements enforceable in the absence of consideration, then
that provision conflicts with the common law fuat a release requires consideration.
We then could not read Ortiz's motion for sununary judgment based on the
common law to encompass an argument that he is entitled to judgment based on a
statute that preempts the common law. On the other hand, if section 3.604 does
not apply to releases when, as here, claims between the parties are being actively
litigated, then the statute and the common law do not conflict because fue statute
does not apply at all. Ortiz then would be not entitled to sununary judgment based
16
4
on the common law because there was no consideration for the release.
b. The grounds expressly presented in the motions also do not
support summary judgment.
Because the Letter Agreements are ambiguous, we also cannot affirm the
summary-judgm.ent rulings based on the grounds expressly raised ill the summary-
judgment motions. See Cincinnati Life Ins. Co. v. Cates, 927 S.W,2d 623, 626
(Tex. 1996) (explaining that even when the trial court identifies the basis for its
summary-judgment ruling, the appellate court may consider other summary-
5
judgment grounds that have been preserved for review). When we interpret a
written contract, "our primary concern is to ascertain and give effect to the intent
of the parties a.~ expressed in the contract." In re Serv. Corp. lnt'l, 355 S.W.3d
655, 661 (Tex. 2011) (01ig. proceeding) (per curiam). To understand the parties'
intent as expressed in the agreement, it is essential that courts examine the contract
as a whole in light of the circumstances present when the contract was entered.
Anglo-Dutch Petrolewn Int'l, Inc. v. Greenberg Peden, P.C., 352 S.W.3d 445, 450,
4 Tn his responsive appellate brief, Ortiz contends there is a legal presumption that a
\Vritten agreement was supported by consideration, and thus, the Bank Parties bore the burden to
respond to the summary-judgment motion with evidence rebutting the presumption. This is
incorrect. As the summary-judgment movant, Ortiz bore the burden in the trial court to establish
his right to summary judgment as a matter of law. Because the Bank Parties pleaded the lack of
consideration, Ortiz could not prove his right to judgment as a matter of law unless he
conclusively established that the Letter Agreements were supported by consideration or that no
consideration was required. See Brocail v. Detroit Tigers, Inc., 268 S.W.3d 90, 109 (Tex.
App.-Houston [14th Dist.] 2008, pet. denied) (movant for traditional summary-judgment is
required to disprove allegations pleaded by non-movant that would defeat summary judgment).
On appeal, the summary-judgment movant still bears the burden of showing that there is no
genuine issue of material fact and that the movant is entitled to judgment as a matter of law.
Rhone-Poulenc, Inc. v. i:i'teel, 997 S.W.2d217, 223 (Tex.. 1999).
5 The Bank Parties raised the issue of ambiguity in response to the first summary-
judgment motion, but not the second motion; however, the trial court &tated in its order that it
considered both s1Jlllil1ary-judgment motions and "all responses." The trial judge also submitted
a jury question on intent. In addition, the parties before us have presented arguments about
whether the Letter Agreements unambiguously expressed an intent to walve or release all of the
Bank's claims, or conversely, whether there was a question of fact about the Bank's intent.
17
451 (Tex. 2011); David J Sacks, P.C. v. Haden, 266 S.W.3d 447, 451 (Tex. 2008)
(per curiam); Columbia Gas Transmission Corp. v. New l.llm Gas, Ltd., 940
S.W.2d 587, 589 (Tex. 1996)). No single provision is given controlling effect;
instead, we consider all the provisions in all parts of the contract. Jlvf. Davidson,
Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003). We also bear in mind the
particular business activity to be served, and when possible and proper to do so, we
avoid a construction that is unreasonable, inequitable, and oppressive. Prost Nat'!
Bankv. L & P. Distribs., Ltd., 165 S.W.3d 310, 312 (Tex. 2005) (per curiam); U.S.
Denro Steels, Inc. v. Lieck, 342 S.W.3d 677,682 (Tex. App.-Houston [14th Dist.]
2011, pet. denied). If the contract is subject to two or more reasonable
interpretations after applying the pertinent rules of construction, then the contract
is ambiguous. XCO Prod. Co. v. Jamison, 194 S.W.3d 622, 627 (Tex. App.-
Houston [14th Dist.] 2006, pet. denied). A contract is not ambiguous if it can be
given a certain or definite meaning as a matter of law. Universal Health Servs.,
Inc. v. Renaissance Women's Group, P.A., 121 S.W.3d 742, 746 (Tex. 2003). The
determination that a contract is or is not ambiguous is decided by the court as a
matter oflaw. Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex.
1996).
After reviewing the express language of the Letter Agreements in light of
the circumstances present when they were signed and the business activity they
were intended to serve, we conclude that there is more than one reasonable
interpretation of the scope and conditions of the release. Although parts of the
Letter Agreements use broad and sweeping language, other parts of the agreement
identify the release as the result of the Bank: Parties' foreclosure of the Birdsall
Property in 2006. Thus, there is a question of fact as to whether the Letter
Agreements express an intent to release Ortiz from all claims related to the
Property and to his indebtedness, or only an intent to release him from the
18
indebtedness remaining after the sale of the Property.
In his Jetter of Jnne 23, 2006, Ortiz's attorney Michael Donovan wrote as
follows:
This Agreement shall confirm that Lender has completed and will file
an Internal Revenue Service Form 1099-A in connection with its
foreclosure on the above-referenced property. As a result, it does not
intend to and shall not file or pursue any lawsuit or other legal
proceeding against Borrower for any deficiency or otherwise. Lender
agrees to and does fully release B01rower from any and all obligations
and liability that Borrower may have or may have had to Lender, and
Lender waives any and all demands and claims regarding any such
obligation or liability. It is agreed that no further sums will be made
or owed by Borrower, and no further slims will be demanded or
litigated by Lender.
(emphasis added). The letter was signed and returned by an employee of HLS,
together with the requested information regarding Ortiz's Form 1099-A.
We find it sigJtificant that the Form 1099-A is a part of the Letter
Agreements. Under federal income-tax laws, one who, in connection with his
trade or business, lends money secured by property must provide a borrower with a
Form 1099-A if the lender "in full or partial satisfaction of any indebtedness,
acquires an interesl in any property which is security for such indebtedness ...."
26 U.S.C. § 6050J(a)(1).6 As a result of the initial foreclosure, National City
acquired an interest in the Property on June 6, 2006 by purchasing it for
$351,356.77; thus, it was required to provide Ortiz with a Form 1099-A. At that
time, the amount of Ortiz's indebtedness exceeded both the purchase price and the
home's value; thus, there was an unanswered question as to whether National City
6 See also INTERNAL REVENUE SERV., DEP'T OF THE TREAsURY, 2006 L'ISIRUCTIONS FOR FORMS
1099-A AND 1099-C, Cat. No. 27991U, available at http://www.irs.gov/pub/irs-priorli1999ac-·2006.pdf
("File Form 1099-A, Acquisition or Abandonment of Secured. Property ... for each borrower if you lend
money iu connection wifu your trade or business and, tn full or partial satisfactiM of the debt, you
acquire an interest in property that is security for the debt, or you have reason to know that the property
has been abandoned.") (emphasis added).
19
~ • '- ' J
would tre.at the foreclosure as full satisfaction of Ortiz's indebtedness, or only as
partial satisfaction of the debt. In other words, there was an open question of
whether National City would pursue a judgment against Ortiz for the deficiency,
i.e., the difference between th.e amount of indebtedness and the value of the
property. See Kolbo v. Blair, 379 S.W.2d 125, 130 (Tex. Civ. App.-Corpus
Christi 1964, writ refd n.r.e.) ("Deficiency is that part of the secured obligation
which remains after crediting it with the net proceeds accruing from a valid sale of
the security by the creditor."). In response to the letter, HLS provided Ortiz with
the information about the foreclosure to be included on t11e Form 1099~A, and in ·
this material, HLS identified the "debt outstanding" as. $537,207.83. In the Letter
Agreement, HLS agreed that "as a result" of the foreclosure, it would not pursue
"further" sums from Ottiz. Thus, drawing all inferences in favor of the su!Iffi1ary-
judgment respondents, and considering the circumstances present at the time the
Letter Agreement was executed, the document reasonably can be read as
expressing HLS' s intent to release only the deficiency by accepting the property as
full satisfaction of the debt. On the other hand, HLS stated that it would not pursue
any legal proceeding "for any deficiency or otherwise." This language reasonably
could be read as an expression of the intent to release every claim related to the
Property. Thus, the agreement is ambiguous.
This ambiguity was not resolved by the second Letter Agreement, which
provided as follows:
Thank you for providing a copy of the 1099-A and executing
the letter agreement I sent regarding the above-referenced matter. It
has come to my attention that National City Bank of Indiana was the
current mortgagee and that First Franklin Financial Corporation was
the original mortgagee. The letter agreement did not specifically
20
reference National City Bank of Indiana. [7]
Out of an abundance of caution, I am requesting that you please
confinn, by signing where indicated below, that all of the terms and
conditions of the June 23, 2006 letter agreement also apply to
National City Bank of Indiana, as the Lender, and that National City
Bank of Indiana also releases and waives any and all actual and
potential demands and claims regarding any obligations or liabilities
of the Borrower, Albert Ortiz, in connection with the above-
referenced properly, including the note and deed of trust associated
with such property.
This letter incorporates "all of the terms and conditions" of the earlier
letter-including those that made the first letter ambiguous. Moreover, the
proposed amendment is ambiguous because it reasonably can be read as an
agreement merely to add another party to the original agreement, or as an
agreement expanding the scope of the claims released.
A narrow interpretation is suggested by the use of the phrase, "out of an
abundance of caution." When a person states that he is taking some action "out of
an abundance of caution," he saying, in effect, that the action likely is unnecessary,
but is employed to remove any uncertainty. He is saying, in effect, ''I think that I
already have taken sufficient steps to achieve the same result, but I am taking this
additional step to remove any doubt." See e.g., Fort Stl!wart Sch. v. }ed. Labor
Relations Auth., 495 U.S. 641, 646, 110 S. Ct. 2043, 2047, 109 L. Ed. 2d 659
(1990) (explaining that "technically unnecessary" provisions sometimes are
"inserted out of &'1 abundance of caution-a drafting imprecision venerable enough
to have left its mark on legal Latin (ex abundanti cautela)."); In re City of
Georgetown, 53 S.W.3d 328, 335-36 (Tex. 2001) (orig. proceeding) (explaining
that although statutory redundancies were unnecessary, the legislature "repeated
7 In the first letter, Donovan incorrectly identified the "Lender" as "First Franklin
Financial Corporation I National City Home Loan Services, Inc."
21
itself out of an abundance of caution, for emphasis, or both"); Wright v. Macdonell,
88 Tex. 140, 146,30 S.W. 907, 909 (1895) ("[I}t is not unusual for the parties to a
contract, out of abundance of caution, to express that which the law would have
implied ....").
A narrow interpretation also is implied by the use of the word, "confinn."
"[T]o confirm is to establish as true that which was doubtful or uncertain."
WEBSTER'SNEWWORLD COLLEGE DICTIONARY 292 (3d ed. 1996). The use ofthis
word suggests that the intent was to verifY that the same terms present in the first
Letter Agreement apply to National City, not to enlarge the scope of the release.
On the other hand, one reasonably could read the second paragraph of the
Letter Agreement as expressing an intent to agree to two things: first, to confirm
that the terms of the first letter agreement apply to National City, and second, to
expand the scope of the release. This interpretation is based on the statement that
National City "also releases and waives any and all actual and potential demands
and claims" against Ortiz. Because both of these interpretations are reasonable, the
second Letter Agreement is ambiguous. The ambiguity of the Letter Agreements
precluded summary judgment.
The trial court took one step to partially correct this error. Despite its
interlocutory rulings on the partial motions for summary judgment, the trial court
recognized that the Letter Agreements were ambiguous before the case was
submitted to the jury, and included in the charge a question about the meaning of
the Letter Agreements. See Bowden v. Phillips Petroleum Co., 247 S.W.3d 690,
705 (Tex. 2008) ("[B]y sending the interpretation of the [agreements] to the jury,
the trial court implicitly held that the [agreements] were ambiguous."). The
question was presented as follows: "With respect to the Letter Agreements, did .
HLS or National City validly agree that Albert Ortiz would receive ownership and
possession of the Birdsall Property without obligation for further payments on the
22
Note, and that HLS and Nati.onal City would not pursue any claims, lawsuits
and/or obligations that iliey could have asserted against Albert Ortiz?" The jury
answered, ''No." 8 In effect, the jury found that in executing the Letter Agreements,
the Bank Parties did not agree to release Ortiz from any further obligation to make
payments on the Note if he received ownership and possession of the Birdsall
Property. This fmding was supported by the evidence in the case. At trial, HLS's
representative testified that the intent of the agreements was to release the
deficiency. Orti;;:' s lawyer testified that he wanted to ensure that Ortiz did not owe
any more money to the banlc After receiving the verdict, however, the trial court
reversed its implicit holding that the Letter Agreements were ambiguous, and
instead reinstated its earlier erroneous rulings on the summary-judgment motions
and incorporated them into the final judgment. In a ruling that appears to have
been based in part on the interlocutory summary judgments, the trial court further
declared in the final judgment iliat Ortiz had no past, present, or future obligations
under the Note and the Deed of Trust, a declaration that is contrary to the jury's
9
finding, which the trial court apparently disregarded.
g 1bis question presents a mixed question of law and fact (i.e., the legal determination of
whether the contract was valid and the factual determination of the Bank's intent). Mixed
questions of law and fact are approprial.e for the factfinder to decide. See, e.g., Tony Gullo
Motors, I, L.P. v. Chapa, 212 S.W.3d 299, 313 (Tex. 2006); Valence Operating Co. v. Anadarko
Petroleum Corp., 303 S.W.3d 435,441 (Tex. App.-Texarkana 2010, no pet). If the trial court
asks the jury to make a factual fmding on a matter essential to a claim or defense, the jury's
answer is not rendered immaterial merely because the question may have been defective.
Spencer v. Eagle Star Ins. Co. ofAm., 876 S.W.2d 154, !57 (Tex. 1994). Tn such a situation, the
trial court may grant a motion for a new trial, but it may not disregard the jury's finding. Id.
9 The trial court did not expressly state that it disregarded any findings, but this is
apparent from other language .in judgment and from the result. In the fll:la.! judgment, the trial
court stated that "the motion of [Ortiz] for judgment on the verdict is GRANTED in part and that
the motion of Defendants for judgment on the verdict is DB'NIED in part." Ortiz's motion
aetually was titl.ed, "Plaintiff's Motion for Judgment on the Verdict with Motion to Disregard
Immaterial Jury Firuling," and the Bank Parties' motion \vas called "Defendants' Motion for
Entry ofJudgment and to Disregard Certain Jw-y Findings." (emphasis added). Although the
trial court refers to both motions only as motions for judgment, the substllnce of the ruling
23
We therefore conclude that the trial comt erred in granting summary
judgment and in incorporating those rulings in the fmal judgment.
c. The trial court's erroneous summary-Judgment rulings
were neither waived nor harmless.
On appeal, Ortiz asserts that the Bank Parties waived any error by the trial
court in considering summary-judgment grounds that were not presented in the
motion but were raised orally at the su=ary-judgment hearing. He points out
that the Bank Parties failed to object that the issue was untimely; however, no such
objection was necessary. See McConnell v. Southsideindep. Sch. Dist., 858
S.W.2d 337, 342 (Tex. 1993) ("Even if the non-movant fails to except or respond,
if the grounds for summary judgment are not expressly presented in the motion for
summary judgment itself, 1he motion is legally insufficient as a matter of law.").
See also Clement v. City of Plano, 26 S.W.3d 544, 549 (Tex. App.-Dallas, no
pet.) (explaining that although parties can agree to expand the issues beyond the
specific grounds expressly presented in the written motion, answer, or response,
the change must comply with Rule 11 of the Texas Rules of Civil Procedure),
disapproved on other grounds, .Telthorster v. .Tennell, 92 S.W.3d 457, 464 (Tex.
2002). Ortiz also argues that because the trial court permitted the parties to address
these grounds, we should presume that 1he trial court gave him leave to amend his
su=ary-judgment motion; however, he has not identified an amended summary-
judgment motion in 1he record.
Ortiz further contends that even if the trial court erred in granting the
summary judgments based on section 3.604, the error was harmless because the
demonstrates that the trial court granted the portion of Ortiz's motion in which he asked the trial
court to disregard the jury finding interpreting the Letter Agreement<;, and denied the portjon of
the Bank Parties' motion in which they stated, "In accordance with the jury's answer to Question
6 in the negative, the court should enter a judgment allo111ing National City to foreclose under the
Deed of Trust"
24
Bank Parties had an opportunity to brief the issue and the trial court fulLy
considered the brief. But, summary-judgment grounds must be "expressly set out
iil the [summary-judgment] motion or in an answer or any other response." TEX.
R. Crv. P. 166a(c). The Bank Parties' brief was not a "motion," and it was not an
"answer or response" to a sunnnary-judgment motion. Instead, it was a response to
an oral argument, and summary judgment on a ground that is not expressly
presented iil the written motion, answer, or response is not properly before the trial
court simply because it is addressed iil a brief. McConnell, 858 S.W.2d at 341.
We also disagree with Ortiz's contention that the rulings, even if erroneous,
were harmless. He reasons that the same result reached by the trial court was
reached by the jury, because the jury found that National City breached the Deed
of Trust before Ortiz did, and thus, failed to assess any monetary damages fm
Ortiz's breach. But th.e trial court not only failed to award monetary damages; it
also denied the claim for judicial foreclosure, a result that is not supported by the
jury's verdict. We further note that Ortiz's statutory argument was raised after the
time for amending pleadings had passed, but the trial court denied the Bank Parties
leave to am.end their answers to plead mistake-even though this is a defense to
renunciation of a debt under the statute. See Gibraltar Sav. Ass 'n v. Watson, 624
S.W.Zd 650, 653 (Tex. App.-Houston [14th Dist.] 1981, no writ). Finally,
becanse the Letter Agreements are ambiguous, summary judgment based on
section 3.604 was not just procedurally incorrect; it was substantively incorrect.
See Burton v. Nat'! Bank of Commerce of ])all., 679 S.W.2d 115, ll8 (Tex.
App.-Dallas 1984, no writ). In Burton, a bank sued a borrower for the deficiency
remaining on a promissory note after the bank sold the collateral securing the loan.
Id. at 116. Relying on the predecessor to the statute at issue here, the borrower
argued that the bank waived the right to a deficiency judgment, and the bank
25
10
argued that this was not its intent. Id at 118. The court concluded that
determining the bank's intent was a question offact to be resolved by the jury. We
reach the same result here.
As the foregoing shows, the erroneous summary-judgment rulings were one
of several ways in which the trial court addressed the interpretation of the Letter
Agreements. We tum now to the trial court's ruling disregarding the jury's finding
on that issue.
2. The trial court erred in disregarding the jury's finding
interpreting the Letter Agreements.
A trial court may disregard a jury finding only if it is unsupported by
evidence or if the issue is immaterial. Spencer v. Eagle Star Ins. Co. of Am., 876
S.W.2d
. 154, 157 (Tex. 1994); Lee v. Hasson,. 286 S.W.3d 1, 17. (Tex. App.-
Houston [14th Dist.] 2007, pet. denied). A question is immaterial when it should
not have been submitted, or when it was properly submitted but has been rendered
immaterial by other findings. Spencer, 876 S.W.2d at 157. A jury question also
can be considered immaterial when its answer carmot alter the effect of the verdict.
City of Brownsville v. Alvarado, 897 S.W.2d 750, 752 (Tex. 1995); Hernandez v.
Atieh, No. 14-06-00582-CV, 2008 WL 2133193, at *3 (rex. App.-Houston [14th
Dist.] May 20, 2008, no pet.) (mem. op.).
Here, Ortiz asserted that the trial court should disregard the jury's fmding
interpreting the Letter Agreements for several reasons. We conclude, however,
that none of these arguments have merit.
First, Ortiz asserted t.ltat the finding would not change the effect of the
10 The substantive text of Texas Business and Commerce Code section 3.604 formerly
appeared at section 3.605. See Act of May 19, 1965, 60fu Leg., R.S., ch. 785, § 1, Sec. 3-605,
1965 TEx. GEN. LAWS 1, 80; Act of May 25, 1967, 60fu Leg., R.S., ch. 785, § 1, Sec. 3.605,
1967 TEx. GEN. LAWS 2343, 2438; Act of May 28, 1995, 74th Leg., R.S., ch. 921, § 1, Sec.
3.604, 1995 TEX. GEN. LAWS 4582,4606.
26
_j '
verdict and that it does 110t concern a controlling issue. But, Ortiz's argument that
the Bank Parties had released all claims for amounts due under the Note and the
Deed of Trust was an afflrmative defense to their claim for judicial foreclosure. In
rejecting Ortiz's interpretation of the agreements, the jury rejected his affirmative
defense. This finding on a controlling issue therefore made a difference in the
effect of the verdict.
Ortiz also argued that the finding that the Bank Parties did not agree to
forego all claims under tile Deed and the Note was rendered immaterial by the
jury's flnding that Ortiz owes nothing under the Deed of Trust This argument is
factually incorrect; the jury did not answer the question regarding the anJount due
under the Deed of Trust, because the jury concluded that National City breached
the Deed of Trust first and National City's damage issue was predicated on an
answer that Ortiz breached first.ll The absence of a finding is not a :finding.
Finally, Ortiz asserted that "the jury took into consideration and accounted
for any amounts it may have found were owed by [OrtiiJ in its award of damages
to [him}." We presume, however, that the jury followed the instructions in the
charge. Columbia Rio Grande Healthcare, L.P. v. Hawley, 284 S.W.3d 851, 862
(Tex. 2009). Here, each of the questions regarding Ortiz's actual dalllages was
accompanied by the instruction, "Do not increase or reduce the amount in one
answer because of your answer to any other question about damages." The single
· question concerning ·exemplary damages to be assessed against HLS was
accompanied by a list of the factors to be considered, and this list did not Include
consideration of the amount Ortiz owed to National City under the Deed of Trust.
11 The parties submitted the breach question in accordance with Mustang Pipeline Co. v
Driver Pipeline Co., 134 S.W.3d 195 (Tex. 2004) and Texas Pattern Jury Charge 101.2, and then
further conditioned damages so that jury would make a damage finding only for the party who
did not breach firsL Practitioners should be careful not to over-predicate, especially if one party
asserts a prior material breach as a matter of law.
27
Because tl1e jury's finding interpreting the agreement was material and no
valid basis was asserted for disregarding it, we conclude that the trial court
reversibly erred in partially granting Ortiz's post-verdict motions and denying the
Bank Parties' post-verdict and post-judgment motions concerning this question.
Although Ortiz used a variety of motions in asserting that the Letter Agreements
prevented the Bank Parties from pursuing any claims against hlm, we have
examined each of the challenged rulings and concluded that none are supported by
the record. We therefore sustain the Bank Parties' ftrst issue.
3. The Note and the Deed of Trust constitute a single contract, and
the claims of National City and Ortiz against one another based
on this contract are not separable without unfairness to the
parties.
The Bank Parties argued that if we sustained this issue, then we should
render judgment in favor of National City in the amount of $1,012,982.90, which
they state is the amount of the indebtedness established by the uncontroverted
evidence. Because we do not consider the record to be so clear that the amount of
Ortiz's indebtedness is conclusively established, we conclude that remand is
necessary to correct the error and establish the amount owed, if any.
If an error affects only part of the matter in controversy, we can limit the
scope of remand to the part affected by 1he error if that part is separable without
unfairness to 1he parties. TEX. R. API'. P. 44.l(b). Here, however, National City's
claims against Ortiz under the Note and the Deed of Trust for breach of contract
and judicial foreclosure are not separable without unfairness from Ortiz's cross-
claims against National City for breach of 1he same contract. The trial court's
rulings created an artificial distinction between the Note and the Deed of Trust; the
disjunction between the two was so pronounced 1hat there were different jury
questions proposed for each, and the trial comt submitted one question (predicated
on a finding that a particular party breached first) and refused one of the questions
28
(without such a predication). But, "in order to ascertain the entire agreement
between contracting parties, separate documents executed at the same time, for the
same purpose, and in the course of the same transaction are to be construed
together," Jim Walter Homes, Inc. v. Schuenemann, 668 S.W.2d 324, 327 (Tex.
1984) (citing Jones v. Kelley, 614 S.W.2d 95 (Tex. 1981)); Nevels v. Harris, 129
Tex. 190, 195, 102 S.W.2d 1046, 1048 (1937) (deed of trust and notes for principal
and interest must be treated as one contract because the borrowers executed them
at the same time and for the same purpose of obtaining a loan secured by real
property). National City's claims for breach of contract and judicial foreclosure
cannot be parsed fairly into claims under the Note and claims under ilie Deed of
Trust. Because the two documents form a single contract, both the Note and the
Deed of Trust must be considered on remand in relitigating these claims. On the
other hand, Ortiz's clain1s for breach of the same contract were tried to tbe jury
based on only half of the contract-the Deed of Trust. We therefore conclude tbat
it would be unfair to tbe parties to remand one party's claims for a new trial based
on the entire contract without also remanding the opposing party's claims that were
tried based on only half of the contract. Moreover, with the exception of Ortiz's
limitations defense discussed below, the parties must be allowed to assert defenses
to one another's claims; tbus, for example, if Ortiz asserts tbat by executing tbe
Letter Agreements, National City released of all of its claims without regard to
whether the foreclosure was set aside, then the jury must be allowed to determine,
as a question of fact, whether tbis was National City's intent. And, just as Ortiz
may assert affirmative defenses to National City's clain1s, National City may assert
any counter-affirmative defenses, such as mistake.
Our disposition oftbis issue renders moot (a) tbe first issue in Ortiz's cross-
appeal, in which he challenges the trial court's failure to award him appellate
attorney's fees; and (b) tbe third issue in Ortiz's cross-appeal, in which he contends
29
that the trial court erred in applying a settlement credit to reduce National City's
liability for actual damages.
B. Is Judicial Foreclosure Time-Barred?
In response to the Bank Parties' counterclaim to judicially foreclose on the
Birdsall Property, Ortiz raised the affirmative defense that the claim was time-
barred. He moved unsuccessfully for a directed verdict on this basis, and his
motion to modify the judgment on the same ground was overruled by operation of
law. On appeal, he contends that this defense has been conclusively. established,
and thus, the trial court erred in failing to grant either motion. We address this
issue because it is based on the premise that a cause of action for wrongful
foreclosure accrues when a misaddressed notice of intent to accelerate the debt is
mailed or belatedly received. If Ortiz is correct, it could be possible to exclude
National City's judicial-foreclosure claim from the scope of remand; if he is
incorrect, then this defense can be excluded
In appealing the denial of a motion for directed verdict, Ortiz in effect
cha11enges the legal sufficiency of the evidence. See Fein v. R.P.H., Inc., 68
S.W.3d 260, 265 (Tex. App.-Houston [14th Dist.] 2002, pet. denied). The test
for legal sufficiency is the same for sununary judgments, directed verdicts,
judf:,'T!lents notwithstanding the verdict, and appellate no-evidence review. City of
Keller, 168 S.W.3d at 823. Where, as here, a party moves for a directed verdict on
an issue on which he bore the burden of proof, he must demonstrate that he
conclusively proved all facts necessary to establish his right to the requested
verdict. See Montgomery v. Byrd, No. 14-07-01015-CV, 2009 WL 2589431, at *3
(Tex. App.-Houston [14thDist.] Aug. 25,2009, no pet.) (mem. op.).
Ortiz points out that on December 21, 2005, the Bank Parties sent Ortiz a
notice that the debt had been accelerated, but the letter was mailed to the wrong
30
address. The Bank Parties faxed the same letter to Ortiz's attorney on January 13,
2006. Ortiz contends that the cause of action for judicial foreclosure accrued on
one of these dates. Because National City did not file its judicial-foreclosure claim
until February 3, 2010, which is more than four years after each of these dates,
Ortiz contends that the claim is time-barred. See TEx. C!V. PRAC. & REM. CODE
ANN. § 16.035(a) (West 2002) ("A person must bring suit for the recovery of real
property under a real property lien or the foreclosure of a real property lien not
later than four years after the day the cause of action accrues.").
Where, as here, a deed of trust contains an optional debt-acceleration clause,
a cause of action for judicial foreclosure accrues when the note holder actually
exercises its option to accelerate. Holy Cross Church of God in Christ v. Wolf, 44
S.W.3d 562, 566 (Tex. 2001); CA Partners v. Spears, 274 S.W.3d 51, 65 (fex.
App.-Houston [14th Dist.] 2008, pet. denied). "Effective acceleration requires
two acts: (1) notice of intent to accelerate, and (2) notice of acceleration." Holy
Cross, 44 S.W.3d at 566. "Notice of intent to accelerate is necessary in order to
provide the debtor an opportunity to cure his default prior to harsh consequences of
acceleration and foreclosure." Ogden v. Gibraltar Sav. Ass'n, 640 S.W.2d 232,
234 (Tex. 1982). A notice that the debt actually has been accelerated is ineffective
if it was not preceded by proper notice of intent to accelerate the debt. Jasper Fed
Sav. & Loan Ass 'n v. Reddell, 730 S.W.2d 672, 67 4 (Tex. 1987). In addition, both
the Note and the Deed of Trust in this case provided that a notice of accelerati.on
"shall provide a period of not less than 30 days from the date the notice is given in
accordance with Section 15 [of the Deed of Trust] within which Borrower must
pay all sums secured by [the Deed of Trust]." l[nderthe terms ofSectionl5 of the
Deed of Trust, all notices were to be mailed or otherwise delivered to "Borrower's
notice address," which was defined to be "the Property Address unless Borrower
has designated a substitute notice address by notice to Lender."
31
Ortiz has not conclusively established that before accelerating the debt the
Bank Parties provided proper notice to him of their intent to accelerate. According
to the undisputed testimony presented at trial, Ottiz properly notified the Bank
Parties that all required notices to him were to be sent to his business address. The
Bank Parties failed to send the required notice of intent to accelerate and notice of
acceleration to the specified address, and instead mailed the notices to the address
of the Birdsall Property. On January 13, 2006, the attorney for the Bank Parties
faxed to Ortiz's attorney copies of the following documents: (1) a default letter
dated November 1, 2005 stating that the debt would be accelerated if it was not
brought current by December 1, 2005; (2) a notice of acceleration, dated December
21, 2005; (3) a file-stamped notice of the foreclosure sale scheduled to take place
on February 7, 2006, i.e., twenty-five days from the date of the fax; and (4) a
"payoff quote good through Febmary 6, 2006," in which the total amount due from
Ortiz was said to be $490,882.19. All of this material was sent to Ortiz's attorney
at the same time, after the debt had been accelerated and less than 30 days before a
scheduled foreclosure sale. Thus, Ortiz failed to conclusively establish that the
cause of action for judicial foreclosure accmed on December 21, 2005 or on
January 13, 2006 as he contends, because he did not prove that there was an
12
effective notice of acceleration at either of these times.
Because Ortiz failed to establish conclusively that the judicial-foreclosure
cause of action accrued more than four years before the claim was filed, the trial
court did not err in denying Ortiz's motion for directed verdict. For the same
reason, the trial court did not abuse its discretion in failing to modify the judgment
12 Indeed, in a motion for summary judgment, Ortiz stated,
Ortiz never received ... a notice of intent to accelerate the Note before learning
i:hat the Note had been actually accelerated and was being posted for sale. Thus,
Ortiz never received the opportunity to avoid acceleration, as required by law
and ... the Deed of Trust.
32
to specizy that the judicial-foreclosure claim is time-barred. We accordingly
overrule Ortiz's fourth issue. In light of our disposition of tllis issue and of
National City's first issue, we conclude that National City is not barred from
retrying its claim for judicial foreclosure on remand.. Because Ortiz's limitations
defense was based on a mistaken legal premise-i.e., that a cause of action for
'Nrongful foreclosure accrues when a notice of intent to accelerate the debt is
mailed to the \\Tong address or belatedly received-this defense is excluded from
the scope of remand.
C. Did the Trial Court Abuse its Discretion by Failing to Expunge a Post-
Trial Notice of Lis Pendens?
In Ortiz's petition for a writ of mandamus, he argued that the trial court
clearly abused its discretion by denying his motion to expunge the post-trial notice
of lis pendens. By statute, "[a] party to an action in connection with which a notice
oflis pendens has been filed may ... apply to the court to expunge the notice ...."
TEx. PROP. CODE ANN. § 12.007l(a)(l) (West Supp. 2012). "The court shall rule
on the motion for expunction based on the affidavits and eounteraffidavits on file
and on any other proof the comt allows." Id. § 12.0071(e). "The court shall order
the notice of lis pendens expunged if the court determines that . . . the claimant
fails to establish by a preponderance of the evidence the probable validity of the
real property claim ...." Id. § 12.007l(c)(2).
In light of our determinati.on of the issues presented in the Bank Parties'
appeal and "the probable validity of the real property claim," we cannot conclude
that the trial court abused its discretion in denying Ortiz's motion to expunge the
notice of lis pendens. We accordingly deny Ortiz's petition for writ of mandamus.
See TEx. R. APP. P. 44.1(a)(l) ("No judgment may be reversed on appeal on the
ground that the trial court made an error of law unless the court of appeals
concludes that the error complained of ... probably caused the rendition of an
33
improper judgment ....").
IV. CLAIMS AGAINST HLS
In the remaining issue asserted in Ortiz's cross-appeal, he points out that he
presented three different theories of liability entitling him to damages from BLS
for the loss of his personal property, and the jury answered a damage question
associated with. each theory. He argues that the trial court ened in awarding him
the largest amount of damages assessed by the jury for this injury, rather than
13
awarding him the sum of all three damage calculations for this loss. Ortiz
similarly asserts that he is entitled to recover damages from HLS for the loss of use
of the real property, even though the trial court granted judgment against National
City for that injury.
Absent an election, the trial court is required to render judgment "so framed
as to give the party all the relief to which he may be entitled either in law or in
equity." TEX. R. CN. P. 301. But, under the one-satisfaction rule, a claimant is
entitled to only one recovery for any damages suffered. Crown Life Ins. Co. v.
Casteel, 22 S.W.3d 378, 390 (rex. 2000) (citing Stewart Title Guar. Co. v.
Sterling, 822 S.W.2d 1, 7 (Tex. 1991)). The rule applies when different parties
commit the same act or when different acts cause the same injury. Id. When a
party tries a case on alternative theories of recovery and a jury returns favorable
findings on two or more theories, the prevailing party has a right to a judgment on
the theory that affords him the greatest or most favorable relief. Boyce Iron Work~,
h747 S.W.2d 785, 787 (Tex. 1988).
Ortiz contends that he is entitled to recover the sum of all of the damages
13 HLS has not appealed the portion of the judgment in which the trial court held it to be
liable to Ortiz for $100 in exemplary damages and $10,000 in actual damages, which represents
the maximum amount found by the jury to be the fair market value of his personal property.
34
found by the jury for each injury under the various theories of liability submitted
because the Bank Parties (1) did not plead the one-satisfaction rule as an
affirmative defense, (2) did not object to the submission of more than one
acceptable measure of his damages, and (3) did not request a limiting instruction to
prevent the possibility of a double recovery. No such actions were required. See
Waite Hill Sen's., Inc. v. World Class Metal Works, Inc., 959 S.W.2d 182, 184
(Tex. 1998) (per curiam); see also Tony Gullo Motors I, L.P. v. Chapa, 212
S.W.3d 299, 303 (Tex. 2006) ("'There can be but one recovery for one injury, and
the fact that ... there may be more than one theory of liabilityO does not modify
this rule."' (alterations in original) (quoting Stmmrt Title Guar. Co., 822 S.W.2d at
8)).
Here, the jury found that Ortiz suffered two injuries: the loss of personal
property, measured by the property's fair market value, and the loss of the use of
the real property, measured as lost rental value. As a result of our disposition of
National City's first issue, the one-satisfaction rule currently does not apply to one
of these injuries. We therefore discu.~s them separately.
A. Damages for Lost Personal Property
Ortiz asserted three different theories of liability for this injury, and th.e jury
made favorable findings for each of them. Under a negligence theory of liability,
the jury found that the fair market value of Ortiz's lost personal property was
$10,000. Under theories of conversion and trespass to personalty, the jury found
that the fair market value of the lost personal property was $1_,500. The trial court
rendered judgment against HLS for $10,000 in actual damages, which is the largest
amount of damages assessed by the jury for this injury. Because an additional
award for the same injury would be an impermissible double recovery, we overrule
Ortiz's second cross-issue as it pertains to his damages for lost personal property.
35
B. Loss of tile Use of Real Property
In fue trial court, Ortiz alleged that National City's breach of contract and
FILS's trespass to real property caused him to lose the use of the Birdsall Property.
The jury agreed, .and for each of these claims, the jury was asked to measure the
damage by the Property's lost rental value. Under the breach-of-contract theory,
the jury found that the Property's lost rental value was $100,000; under the
trespass theory, the jury found that the lost rental value was $77,000. Because the
jury assessed the larger amount of damages for this injmy againo1: National City,
the trial court included tlwse damages in the judgment rendered against that
defendant. After applying a $12,500 settlement credit from a defendant who
settled before trial, the trial court rendered judgment against National City for
$87,500. 14 The trial court did not render judgment against HLS for the damages
·for the same injury because this would have constituted a double recovery.
On appeal, Ortiz argues that he is entitled to recover the damages assessed
by the jury agaiust HLS for loss of the use of real property because the one-
satisfaction rule does not apply. The Bank Parties respond that Ortiz is not entitled
to recover from HLS for this damage because damages for the same injury were
awarded against National City, and thus, an additional award against HLS for loss
of use of the real property would constitute a double recovery. Because we have
reversed the judgment as it pertains to Ortiz's breach-of-contract claim against
14
On appeal, Ortiz argued that the settlement credit shonld not have been applied as an
offse.ot to any recovery for his breach-of-contract claim against National City. In response, the
Bank Parties correctly pointed out that Ortiz sued National City, m,s and Keystone, the settling
party, for trespass to real property. Moreover, Ortiz alleged that the BMk Parties were liable
with Keystone because its acts or omissions were committed as the Bank Parties' agent, and
because the Bank Parties ratified, adopted, and accepted the benefits of Keystone's actions.
Ortiz does not contend that the settlement credit does not apply to the real-property damages
assessed against HLS for its trespass, and he points out that a non-settling defendant can claim a
settlement credit for darnagt'S for which all joint tortfeasors are jointly liable.
36
National City and National City's claims against Ortiz for breach of contract and
judicial foreclosure, it currently is not possible to determine whether, on retrial of·
these issues, the one-satisfaction rule will continue to apply to reduce HLS' s
liability for actual damages.
To the extent that Ortiz complains that the trial court erred in awarding him
the greatest fair market value found by the jury for his lost personal property ratl1er
than awarding him an amount equal to the sum of the jmy's three personal-
property fair market-value findings, we. overrule this issue. Because the total
amount ofHLS's liability to Ortiz for actual damages cannot be determined until
the breach-of-contract claims of Ortiz and National City against one another are
retried, we reverse the portion of the judgment specifYing this amount.
In effect, our resolution of this case results in a bifurcated trial. HLS will
continue to be liable to Ortiz for at least $10,000 in actual damages, which is the
maximum amount that he is entitled to recover for his loss of personal property,
together wifu $100 in exemplary damages; however, the total amount of HLS's
liability for actual damages will have to be determined after the claims to be retried
arc resolved. Until then, it cannot be determined if the one-satisfaction rule will
continue to bar Ortiz's recovery of damages from HLS for loss of the use of real
property.
V. CONCLUSION
We conclude that the Letter Agreements signed by National City's
representative are ambiguous; thus, Ortiz did not establish as a matter of law that
National City is barred from recovering amounts owed under the Note and the
Deed of Trust or from judicially foreclosing on the Property. Instead, there is a
question of fact regarding the parties' intentions. Ortiz also did not establish that
National City's claims for judicial foreclosure are time-barred. Although the trial
37
court's rulings erroneously divided t1e parties' breach-of-contract claims into
claims under the Note and claims under the Deed of Trust, the two documents must
be construed as a single contract. Because these parties' vadous breach-of-
contract claims against one another are not separable without unfairness to the
parties, both of their contract claims must be retried on remand, together with
National City's claim for judicial foreclosure. In light of the need to retry the
judicial foreclosure claim and the probable validity of that claim, we deny Ortiz's
petition for a \Vrit of mandamus.
As for Ortiz's claims against HLS, we hold that the trial court did not err in
limiting Ortiz to one recovery f:or the loss of his personal property. Because the
breach-of-contract claims of National City and Ortiz against one another must be
retried, it carmot yet be determined whether National City will be found to be liable
to Ortiz for loss ofthe use of real property, or if so, whether the damages found for
that il~ury will be greater or lesser than the amount assessed against HLS for the
same injury. As a result, the total amount of :fiLS's liability to Ortiz for actual
damages will have to be determined after those breach-of-contract claims are
retried.
For these reasons, we deny Ortiz's petition for a writ of mandamus, and we
A. reverse the portions of the judgment
1. holding National City liable to Ortiz for actual damages,
interest.• and attorneys' fees;
2. providing that National City takes nothing by its claims;
3. denying National City's request for judicial foreclosure;
4. declaring that the "Note and the Deed of Trust are fully,
completely, and finally satisfied and no past, present, or
further obligations or smns are or shall become due and
owing under said Note and Deed of Trust";
38
5. providing that "all partial and/or inter!ocutol)' judgments
heretofore granted in this case are hereby made final and
incorporated into this Final Judgment"; and
6. specifYing the amount of the actual damages awarded against
HLS;
B. affirm the portions of the judgment that were n('lither challenged on
appeal nor affected by our disposition of the issues as set forth in this
opinion, that is, Ortiz's claims for fraud, common-law unreasonable
debt-collection, statutory debt-collection violations, statutory
deceptive trade-practice violations, breach of oral contract,
promissory estoppel, theft, breach of bailment, invasion of privacy,
and defamation per se; and
C. remand the case with instructions to the trial court to
(1) retry Ortiz's claim against National City for breach of contract
and National City's claims against Ortiz for breach of contract
and judicial foreclosure, and, with the exception of Ortiz's
limitations defense discussed herein, pennitting the parties to
assert defenses to these claims;
(2) after applying the one-satisfaction rule and any settlement
credits, detennine the total amount of FILS's liability to Ortiz
for actual damages and the amounts, if any, that are owed by
National City to Ortiz or by Ortiz to National City; and
(3) render a final judgment that is consistent with this opinion.
Is/ Tracy Christopher
Justice
Panel consists of Justices Frost, Brown,· and Christopher (Frost, J., dissenting).
39
TAB-
10/28/2014 4:28:27 PM
CAUSE N O . - - - - - - Chris Daniel- District Clerk Harris County .
Envelope No. 2986045 ·
ALBERT ORTIZ
2014 -63579/ r.ourt·
'§'
1 qq
'JtrTJ:'IB'D1STRICT
· By:Mellssacox
COUR:Ted: 10128/2014 4:28:27 PM.
Plaintiff §
vs. §
§
§
BANK OF AMERlCA, NATIONAL § OF HARRIS COUNTY, TEXAS
ASSOCIATION; and §
PNC BANK, NATIONAL ASSOCIATION; §
Defendants § JUDICIAL DISTRICT
ALBERT ORTIZ'S ORIGINAL PETITION .
TO THE HONORABLE COURT:
Albert Ortiz ("ORTIZ"), Plaintiff in this cause, hereby files this Original Petition
complaining of Bank of America, National Association (''BOA"); and PNC Bank, National
'
Association ("PNC"), the Defendants. ORTIZ respectfully shows the Court the following:
--------- --- ------DISCOVERY-----
1. Discovery in this case is intended to be conducted under a Level 2 Discovery
Control Plan pursuant to Rule 190.3 of the Texas Rules of Civil Procedure.
JURISDICTION, VENUE, AND CONDITIONS PRECEDENT
2. This Court has jurisdiction over the claims stated herein in that this Court has
general jurisdiction and specific jurisdiction over the Defendants. Jurisdiction of this case is
,,
proper exclusively in the Harris County District Courts based !Jn the prior exclusive jurisdiction
doctrine, which holds that "when one court is exercising in rem jurisdiction over a res, a second
court will not assume in rem jurisdiction over the same res." Marshall v. Marshall, 547 U.S.
293, 311 (2006); Kline v. Burke Constr. Co., 260 U.S. 226, 229 (1922). Plaintiff Ortiz is seeking
damages within the jurisdictional limits of the Court and monetary relief over $1,000,000.
Venue is proper in Harris County, pursuant to Section 15.002 and/or Section 15.011 of the Texas
Civil Practice and Remedies Code. Plaintiff generally avers that all conditions precedent to filing
the claims herein have been performed or have occurred or the conditions have been excused
because of the conduct of the Defendants.
PARTIES
3. Plaintiff Albert Ortiz is an individual who resides in Harris County.
4. Defendant Bank of America, National Association, 100 North Tryon Street,
Charlotte, North Carolina 28202, is a national bank and non-resident engaged in business in Texas
that can be served by serving its registered agent, CT Corporation Systems, at1999 Bryan Street,
Dallas, Texas 75201.
5. Defendant PNC Bank, National Association, is a national bank and non-resident
engaged in business in Texas and does not maintain a regular place of business or have a
designated agent for service in Texas, and may be served with a citation directed to said
--'---Defendant at·the·heme-·offieeor-pl'ineipal-effiee--aEIE!fess-Gf-Def217 S.W.3d 653, 670-71 (Tex.
App.-Houston [14th Dist.]2006, pet. denied). Defendants violated this duty.
Defendants committed fraud in that they disclosed infonnation to ORTIZ regarding the
status of title to the Real Property and the effect of the foreclosure, without ever disclosing the
whole truth. Defendants had a duty to disclose that the June 6, 2006, foreclosure sale of the Real
Property, the resulting Substitute Trustee's Deed had been rescinded and/or title to the Real
Property had been transferred back to ORTIZ. Defendants disclosed information about the
foreclosure sale and the Substitute Trustee's Deed but failed to disclose the existence and
-- -- ------execution.of'the-Rescission-Instrument;.Defendants.l'epresented. thaLthdor.eclo.sure_s_ak.had_n_ot__ _ _ _ ____ _
been set aside and that title to the Real Property was in Defendants name but failed to disclose
the existence and execution of the Rescission Instrument, which Defendants knew made the
earlier misrepresentation misleading or untrue. Defendants intended that ORTIZ act on this
fraudulent omission(s), ORTIZ did rely on it, and ORTIZ thereby snffered injury in that he
continued to be deprived of the Real Property and incurred expenses associated with living
elsewhere.
Moreover, subsequent to their execution and filing of the Rescission Instrument,
Defendants affirmatively made fraudulent representations to Plaintiff that BANK, not ORTIZ,
had title to the Real Property, and continued to use this contention as a basis for failing and
refusing to allow ORTIZ to regain possession to the Property. Specifically, Defendants', acting
through their attorneys or agents, sent a letter, in response to a letter from ORTIZ'S attorney, in
which they falsely represented that BANK was the owner of the Real Property, denied ORTIZ
the keys to the Real Property, and refused to transfer the Real Property to ORTIZ, when they
knew (or should have known but for their recklessness) that the Real Property had already been
transferred to ORTIZ. A true and correct copy of the letter is attached hereto as Exhibit "4" and
incorporated herein. Pleading further, ORTIZ alleges a claim against Defendants for fraudulent
conduct. T11e above-described wrongful conduct by Defendants constitutes fraudulent conduct as
it is the successful employment of deception, cunning, or artifice to circumvent, cheat, or defraud
ORTIZ to his injury.
Defendants' fraudulent omissions, representations, and/or .conduct alleged herein
regarding the Rescission Instrument was carried out and accomplished by Defendants' attorneys
or agents at the time, including the law finn of McGlinchey Stafford, PLLC, Kari Robinson, Joel
Mohmlan, the law firm of Barrett Daffin Frappier Turner & Engel, LLP, and/or the law firm of
Leyh & Payue, LLP.
·UNlrAWFUirDEBT-G0bhE-G-1'1GN-- - - - -- -
23. Plaintiff 0 RTIZ realleges and incorporates by reference all of the factual statements
and allegations made hereinabove in this petition. The conduct of BOA and/or PNC constitutes
unlawful debt collection. Defendants failed to disclose the Rescission Instrument to ORTIZ
subsequent to its execution and filing. Moreover, subsequent to their execution and filing of the
Rescission Instrument, Defendants affrrmatively represented to ORTIZ that title to the Property was
in BANK, not ORTIZ, and continued to use this assertion as a basis for failing and refusing to
allow ORTIZ to regain possession to the Property. Defendants also continually refused ORTIZ
possession to the Real Property even though they have since testified that ORTIZ could have had
entry, access, and/or possession to the Real Property at any time if he had requested same. All such
conduct constituted deceptive, fraudulent, and/or misleading practices by said Defendants and
employed the use of false representations or deceptive means in attempts to collect a debt.
Defendants engaged in such action in collection of an actual or alleged consumer debt of
ORTIZ and thus violated Chapter 392 of the Texas Finance Code (the Texas Debt Collection
Practices Act or DCPA), including Section 392.304 of the DCPA. ORTIZ alleges a cause of action
for violation of the DCPA against Defendants, seeking to recover for all damages caused thereby,
including his aetna! damages, statutory damages, and/or injunctive relief available under the DCPA.
Such actions also constitute an unfair and unreasonable debt collection practice that is prohibited
by and actionable under Texas common law for which ORTIZ seeks to recover his damages from
Defendants.
BREACH OF LETTER AGREEMENTS
24. Plaintiff ORTIZ realleges and incorporates by reference all of the factual statements
and ailegations made hereinabove in this petition. ORTIZ entered into contracts with Defendants
-ROA-and-PNG-(at-the time-acting-in the capacity of BLS and/-Dr-BANK)_when_ theyexecuted_the
Letter Agreements, attached hereto. Such agreements are valid, binding, and fully enforceable
against Defendants as they constitute valid covenants not to sue, waivers, renunciations, and/or
releases, whether or not they are supported by consideration. "A release is a surrender of the cause
of action, which may be gratuitous, or given for inadequate consideration." McMillen v.
Klingensmith, 467 S.W.2d 193, 195 (Tex.1971); Knutson v. Morton Foods, Inc., 603 S.W.2d 805,
810 (Tex. 1980) (Denton, J., concurring); Adams v. Petrade Intern., Inc., 754 S.W.2d 696, 723
(Tex. App.-Houston [1 Dist.] 1988, writ denied). Furthennore, Section 1.306 of the Texas
Business and Commerce Code provides that a claim or right arising out of an alleged breach may be
discharged in whole or in part without consideration by agreement of the aggrieved party in an
authenticated record. Accordingly, by executing the Letter Agreements, Defendants discharged any
6f their claims or rights against ORTIZ related to any alleged breach by ORTIZ, regardless of
whether the Letter Agreements are supported by consideration.
By the Letter Agreements, PNC agreed that it would not file or pursue any lawsuit or other
legal proceeding ORTIZ and otherwise renounced its rights against ORTJZ. Such agreements
thereby discharged any obligation of ORTIZ to pay the Note, whether or not they were supported by
consideration. Tex. Bus. & Com. Code § 3.604. Nevertheless, PNC has continued to pursue legal
proceedings against ORTIZ in attempts to collect on the Note and foreclose on the Real Property.
ORTIZ performed, tendered performance of, or was excused from performing his
obligations under such contracts. By such contracts, Defendants agreed to release, renounce,
discharge, and/or waive all claims and/or rights against ORTJZ concerning the Real Property and
ORTJZ'S Note and/or Deed of Trust executed in connection with the loan for the purchase of the
Real Property. Defendants further agreed that they would not demand or litigate any further sums
from ORTIZ. Defendants failed to comply with the Letter Agreements, and the releases and/or
covenants not to sue contained therein, by pursuing: an appeal ofa Texas court oflaw' s judgment,.
in favor of ORTIZ, dated August 18, 2010, and further failed to comply, subsequent to the appellate
court's remand, by continuing to pursue claims against ORTIZ related to the Note and Deed of
Trust. The conduct of Defendants constitutes a breach of the Letter Agreements by Defendants
under Texas law and caused damages to ORTIZ. ORTIZ seeks to recover all such damages from
Defendants and/or requests from the Court specific performance and/or injunction relief as remedy
for enforcement of the Letter Agreements.
REQUEST FOR DECLARATORY RELIEF
25. Plaintiff ORTIZ realleges and incorporates by reference all of the factual
statements and allegations made hereinabove in this petition. ORTIZ requests that the Court
declare that the Letter Agreements constitute Defendants' waiver, relea'se, discharge, and/or
renouncing of any rights to pursue any further legal proceedings against ORTIZ related to the
Note and Deed of Trust, including any appeal and/or mandamus in connection with any ruling or
judgment of this Court. A conflict exists regarding this issue as the parties' have conflicting
interpretations regarding the scope and meaning of the Letter Agreements. ORTIZ requests a
declaratory judgment to resolve this controversy and remove the resulting uncertainty. See Tex.
Civ. Prac. & Rem. Code Ann. §§37.003, 37.004.
EQUITABLE SUBROGATION CLAIM
26. Plaintiff ORTIZ realleges and incorporates by reference all of the factual
..
statements and allegations made hereinabove in this petition. ORTIZ hereby makes a contingent
or conditional claim alleging that, if PNC obtains a judgment in its favor determining that it was
the owner of the Real Property for any period of time that ORTIZ has paid property taxes as the
presumed owner, then ORTIZ is entitled to recoup and obtain reimbursement from PNC of all
sums ORTIZ paid as property taxes for that time period. ORTIZ alleges a claim against PNC for
equitable subwgation-with respecUona!Lsuch_tax pay=ents_mad_dn. conneQtion_with_tb~J3&l!L ___ ... __ _
Property. If and only if PNC is determined to have been the owner of the Real Property at the
time of any such payments, such payments were made on behalf of and for the benefit of PNC.
To such extent, all such payments were made involuntarily in that ORTIZ was protecting his own
interest since, at the time, he would have been considered responsible for the taxes as the
purpmted owner of the Real Property. ORTIZ would be entitled under the law to recover all
such payments from PNC. ORTIZ hereby asserts an equitable subrogation claim against PNC to
recover all such payments. Pleading in addition and/or in the alternative thereto, ORTIZ alleges
against PNC an action on an assumpsit, or implied right of; or contract for, reimbursement, in
that ORTIZ has paid the debt or obligation of PNC, which has thereby unjustly enriched PNC.
Ortiz seeks to recover from PNC based on the obligation implied by law in his favor for such
reimbursement. ORTIZ's payments were made to protect his interests with regard to the Real
Property. ORTIZ'sright to recovery of such payments is based on PNC's unjust retention of a
benefit to the loss of ORTIZ, against the fundamental principles of jw;tice and equity. ORTIZ
may and intends to assert all those rights held by the taxing authorities against PNC in
connection with the taxes on the Real Property. Accordingly, to the extent ORTIZ is deemed to
not own the Real Property, ORTIZ seeks to have the Court order a tax sale of the Real Property
to recover the sums to which he is entitled.
PUNITIVE DAMAGES
27. Plaintiff ORTIZ realleges and incorporates by reference all ofthefactual statements
and allegation made hereinabove in this petition. Defendants' actions against ORTIZ were done
with gross negligence, malice, and/or the committing of fraud. Defendants are therefore liable to
ORTIZ for punitive damages within the jurisdictional limits of the Court.
Proof in support of recovery of such damages includes, without limitation, Defendants'
. ··--· -actions-committed just. weeks. after a-Texas court of.law's_judgment.(subsequently appealed).
awarding ORTIZ the Real Property free of any lien under the Deed of Trust or any further
obligations on the Note. Despite such judgment, Defendants soon proceeded with actions
including again changing ORTIZ'S locks at the Real Property, excluding ORTIZ from the Real
Property, and attempting to sell the Real Property, all of which were committed without any
notice to or consent from ORTIZ.
ATTORNEYS' FEES
28. Plaintiff ORTIZ realleges and incorporates by reference all of the factual statements
and allegation made hereinabove in this petition. As a result ofPNC's failure to comply with the
Letter Agreements, ORTIZ retained an attorney to prosecute his claims related thereto. ORTIZ is
entitled to an award of attorneys' fees for prosecution of this action under the DCPA, Chapter 392
of the Texas Finance Code, and/or Chapter 38 of the Texas Civil Practice and Remedies Code.
ORTIZ. is also entitled to an award of attorneys' fees under Chapter 37 of the Texas Civil Practice
and Remedies Code for his claims for declaratory judgment brought thereunder. ORTIZ is entitled
to a further award of attorneys' fees should a party appeal and final judgment ultimately be awarded
in favor of ORTIZ. Should it be necessary for a party to petition the Texas Supreme Court for
review, ORTIZ further requests that, upon fmal judgment for ORTIZ,. the Court award an additional
amount as attorneys' fees for representing ORTIZ during such review.
PRAYER
WHEREFORE, PREMISES CONSIDERED, Plaintiff ORTIZ respectfully requests of the
Court the following:
1. Judgment against Defendants for all damages, including mental anguish, actual,
economic, statutory, consequential and exemplary damages, within the Court's jurisdictional limits;
2. Judgment against Defendant PNC that provides for ORTIZ'S recovery oftitle to the
·--Real Property..
3. Judgment against Defendants for all other declaratory relief requested herein;
4. Prejudgment interest as provided by law;
5.. Interest after judgment as allowed by law until paid;
6. All costs of suit and attorneys' fees; and
7. Such other and further relief, in law and in equity, including specific performance
and injunctive relief, to which Plaintiff ORTIZ may be entitled.
Respectfully submitted,
/s/ Michael Donovan
Michael Donovan
Texas BarNo. 00796478
6300 Dixie Drive
Houston, TX 77087
(713) 956-4043; (713) 956-4042 fax
mdonovanesq@yahoo.com
ATTORNEY FOR ALBERT ORTIZ
2014-63579 I Court: 133
EXHIBIT 1
I
.Tlme 27, 2006
Mr. Miclutel DonoVtUt, Esq. SENTVTAliAXTO:
6300 Dixie Drlve 2Sl-S61AI493
Houston, nt 77fJ&7
Dear Mr. Donnvllll,
I l'!ll1 i:rW!nittlng a copy o:fth~; executedlette.r Agreement, lllQ!l!l wifh{)l.l.t' !099-A which
will b~ :fiu:nished to the futerrud ReYenuo Service. Should you have noy additional
questitJns f NaUonal folly ant>k `` tndllln$, Fl,.! Franlrll!l•nd N•eonf'<>lnt•to tilvlnlollS Qf
Na,uon"t 'City Banf~ o·t JndJ:tn1t1 whi~It ia a wholty"C'\Yn~ cubtlldf;~,ry nf Natlono.t Ctty Celrporat!o.rt. Nauonol Cfty Home l.oa_n SeNJce.9~ Jno..
.ge(IJ{ces loans tor the totfow.Jng al'tlUUtfld enUtlaD ag Firat Fn:mldln_ tottn Servtce.,.,-~ Nz~tlonnl ~fty L.P~n.ServtoO'a- and Nati:OtlPPln'h
ff~nnl-C!ty tlrmt NctttonaltiW bnnk~ff!\di_~nn 1\mt((:l:f\ttt "P;tty ~nn"k ofKantuckY
Nullooul Clty Bll.Uk o.ftfl_ll .flllc'lWCn~t Hn~fQnaJ City I'lttnk ofPntUTnyi``;:nlP: ~tiQ"n)'ofrtl
'FJrut l~t~klln- fhutnola.l,Pytppt4llbli.
J!IN-23-Ull FRI 14:03 7L3 sr !005 FA:K tll1 113 64\3 tOO!l
June 23, Zi)(J6
ne: Albert Ortitt Ulan
:t'&Vl~ 7'ffJIJ7
l)l'!ll!' l\~. 'Fedlltonko;
A11 you !\now, r repre!lllnt Albert Ortiz.. 'lila Jetter is pw:®Ult to ~ur converMt!ou thla
dt~te ttnd i~ l~ed til b~e n,s a binding {![!Moment betwll!m my cllenh Albert 01ti:.>:
{'':8¢n awar"), I.Uid Fii' S~oe F!lrm IO!l9·A in CQllllcctlort wifu its ib.reclosure on 11m abovo·flll'erenood
property. /u e. r~ult. !t t~ not intond iQ aud shall not :Ot* or put~!® ooy luwwlt Md doe$ fully
``~«o !iQ®W<>r il:ryott t !Xltltlllt!~ at!.ention tOo t)li$ mutter.
Yl'Bl MSllYEAR-.ENDWORKSTAnON 06!2.7/06 10:23:59
-~---·-·~·· 1099-A FORECLOSUR.BS ·---------·.;..··--
KEY INFORMATION: TAX YEAR: 06 (+TIN/CO:Mi'Ah'YNAMEFROM 'IrE
HEADER*)
PAYER'S TIN: XX-XXXXXXX NAM:E;NA'J.'IONAL CITYROMELOAN SERVICES
___ ___ _. __ __
lNC . .
:tO
--- _ AN NO: 1044241031
,....... ... _,..__ .. lUiC... NO: OOl......
BOlffiO\VER'S iNFORMATION
~--"' ... ....._.. _
{NAMEZ,M NO'tltEl'ORTED TO lRS}
``~:iAIILBIIEiiRTIIORTlZ
NAME2:
NAME3:
NAME 4: BORRO\VERRESP FOR DEBT: Y (YIN)
ADDR: l.OS BlRDSALL AYE FNMA (F) OR FBLMC (M) lU'TO: _ .
CITY: HOUSTON . STATE: 1'X' "' INVESTOR LOAN NO: 0033595141
1
Z1PCODE:77007_ FOREIGNADDR; N SERYICRRCODE: _ __
DEBT OUTSTANJJlNG: 537,207.83
FA'IRMARl{ETV.ALUE~ 525,00(}.00
ACQUlslTION DATE 06/06!06 :PROP DESC: lOS llm.DSALL AVE ROUSTON
---------- -'f!;{7'!001-------------·---- -------- -. -·---- ----------
2014-63579 I Court: 133
EXHIBIT 2
G~try SU:1c.*:-t:~v
t\lnt.l{JrwJ CitY l~O'trt¢ L¢Ht'tl Ser0,oc``'lna;.
J),o. r``._l~-= 1s5 f1
.?ltt~tiw·gJr, PA. 1523 0-183 8
ltte~ Af.O,f.P.t 0Pt:i.."t.; Loarr #1 {J4421/l.!JS1l Jfropcrf,J1 .``tldr'(tf,:B: 105 'lJfP(f.SI\'n. R;!JHtiflh'1~
'l'extJ"u>;. 1?'fit)?'
'l'b.;utk yo'bt ±br JlfO'lidln.&; <1- copy of the 1()99-A lUX! e:t.e~ui'lng tlte liii!te>r a,g;rc~ment 1 >5C11l
re~r;<\rding tlw above-re!bmnced matte1'. It has eome to my JJ.ttentlon tba~ Natl<>tlal City ~:lank of
-" -;L--Dlclinna-w:ts-t.heet!fl"<"ltl"tllol1b'l;l``il!'bat Fil'*J.lia:nkllu"Vlnanc1"'1. Corporatlot)-'1/'Jl\S-tll ~'"'· T1R' lWL .
Om of R.tl aburtdam~ of cfttttion, l am :c.;quot;tlng that you Jileas!l' ccmfixm, by ${!llllng
wl:\<>~·¢ illdicliU>tR.tive
a11d rec1.1m lt to me vi~<. fl~eslmlf NOTICE OF COMllilli:l'l'l1ALrrY RlGH'l'!4 !F YOU ARE A NATURAL l'ERSON, YOU MA V
V REMOVE OR STRIKE ANY 01~ ALLOFTl!'!: FOU,OWING INI'ORMAT!ON FROM ANY
INSTRUMENT THAT TRANSFERS AN lN'l'EltltST lN 'R.Ii:AI· l'llOI'ERt"l BEFORE IT IS
llc!Lfi!(} FOR RF..Cotm lN THE PUB!,ICRECOJtDS, YOUR SOCIAL SECURITY NllMllER OR
YOUR DRIVER'S L!CENSJ> NU~1BER.
*"XMI'Ol\TANT NOTIC!t TQ CoUNTY ()Lli:RK;
ll'IDEX AIJI~RT ORTIZ AS GRANTEE
$1'A'fE OF TE;nl Albttt
Ot!i~ to. First Fr•n1<1in Flnsnolal
Corp. Soil! Notllla «:t•mod by tb~t oertlln Deed of'fru>t dutcd Mureh
ri 1:;, Z004, ana ``rordud in Cletk'o Pile N~. )(46llSS5 ot 1M Officio! R of Ham•
J Co)jill;', ToxM, wiln mv<win;~ribcd proJlliil)' ()he "ProJX'ilY'1:
--
'\>l
j
LOT S!X (6)1• IN !ll.llCK ONE {!} OF VILLAS OF liAYOU lll!:ND, A
SUBDIVISION IN HARRIS COUNTY, TEXAS, ACC()JIDINGTOTHEMAP OR
-1fL---------PbAT-'tHEREOF-JU,)G0lmJ:D:UNil:ER-FJL;\~-COD'EN0,4.l1n80-0F-THKMAP
D
li) l\'ECORDS OF HARRIS COUNTY, TEli:A$,
Q WHERBASt in compliance with the tm:>vi,-;ions ~et out in §; 51,002- -of ilie Texas: Property C~
the n'bove property \\'tl:S posted for foreclosurc!i sale ana on June: 6~ 200.6.t Thomas Red-er, the tmmed
Substitute Trustee, conll!~t;ted a foreclosur.. sale whereby the l'fO!X'rty was S<>fd to Nations! City Bank of
llidinna 01> ••• out in the Sobslitnte Tnlst«'•D 6, 20!16 which i• recorded in Clet'll':; Fill
No, Z366S41 ofth• Official ll<:all'to~"i!Y Record•oflfaJtls Cl)\lnty, Texas.
\VB!!lll'.AS, Natio~af Ciiy and. TltI tho Properl)l to Na1l011al <::lfy Bonk <>f lndi•n•t re;olnd the ~m;d!rnLiott of tlle
inoebtl\dnes>. r tho mw• qUo existing
Wer{i;tiDder.
NOW TifEREFORE, for ~ood Md v•lu>ble wnsidmtion, tb• roe.lpt and lll!ffioiencyof ume is
hereby acknowledged ab and Peed ofTrum, ll!ld Thomas Rl\dt>r, tbe SJ.tbstituto Trnstoe do
1\tTol>y stipulate and de¢l!re (l)th« Substbuto Trustc~•s Peed oatild June 1>, 21106 is heto!>y rout l!m!tation, suoh
Su~sli!Uto 1'n.!stce•• b~ den<:rib.O allow._, itsuch O.od hl!d not boon liled of rtcord.
!l:lt.lfMlC!t!!LES\CUEN'WIOME LOANS SBRVJCBS FKA NA'llONAL ClT'I'\Orttt ('>OOSO 15l9!1
lpt)'f"'d"'
nnw No. l0050153900l26
National City its suocessors and assigns, to the extent necessary to re-vest legal title IC> the
Property to Albelt Ortiz, hereby conveys !n Albert Ortiz the Property; subject, however, ta tlte !L9.2J
indebtedness evidenood by !btl' Note and the Hens and sewrity Interests seenriug pnyment or the Note,
and other encumbrances, restrictions and ccwenants of record, lncludlng without limitation the Deed of
'
Trost and all other col!atetnl loan instruments executed topurehas~ the Property. The Grantee's address
is 105 Birdsnll Avenue, Hr1le(s} to pay in full all taKes or other lawful assessm~nts
against !he Property and all amounts otherwise advan.eed by National City under the terms of the Note
and Deed of Trost.
-~·-----E-X-EC_U_T_ED_t_hi_s_l_J_da_.y-ofi-'.JI)_""._.,.,___"-__,__-___,20~·-- -~-- - @)_okli Thorn"' Roder,
$ubodMo Trust subscrlb<>o to tn• (orcgolngc
instrument ruu:f a;cknowledgcd lo-me thst he/sit~ ex:ecutod fue; $llmJW
``>~ >J)OJ, ,m~\&t\~
ffoJiry Public, State ofTelGls
2014-63579 I Court: 133 ·'
'
EXHIBIT 3
--·~
~ . ·.·~ .·.·. `` ~¥~.
lJ , i!IOTIClHlFCONl'IDENT!ALl'l'Y IUGH'l'Sl fFYOU AR!i:A NATORALT'ERSON, YOU~fAY
y !U:MOVE OR STRIKE ANY OR ALL OF THE FOJ,LOW!NO IN~'ORMAT!ON' FROM ANY
JNS'tRIJME!'.T THAT TRANSllJ!JRS AN INTil'ftf.l>T IN ne,u, l'ltOI'ERTll Bl<:!i'ORE IT IS
FILED FORRECOI\JHN THE PUlll.TC RECORDS, YOUR SOC! AL SECURITY NmrnER OR
YOUR DIUVE:ll'S LtCENSJ< NUMBER.
•••nU>OllTANTNOTICE '1'0 COUNTY CLEIU<:o
lN'!le.X ALllE,RT ORTIZ AS ORANTEE
STATE OFIEXAS
COUN"l'YOFHA!llUS
WEERllAS, N>tronAI Citt ll•hl< o£ lndi•m. {"NaUonal Chy") io lh• ~wner •nd holdtr ot •
pt(>llllstory note d>!Od Mart Fnm1<1ln Financial Corp, Safd Note U! seeury th;l oettaln l')oe!l of'!'rust ®ted Morth
TS, 2004, Md reoordud mClerl<'• l'!l• N<>. :IV!69555 of tb• Official R..l !1:op¢r~y R«<>rds orll•m~
C(jul\ly, Tttl~ propO\'IY (!h~ "l't0pet!;>'1'
LOT SIX (6), IN BLOCK ONE (l) OF VlLLAS OF UAYOlJ BF.ND, !<
SlJBDIVISTON JN HARRIS COUNTY, Tli:XAS, ACCOliD.ING 'fOTllE MAP OR
D
·PbA'I''I'ltERE{)F-l'lEOOliDEOVNDElU!II..M C'ODENCl,-4{10&G-OF-Tf!E-MAl'-----· - ---· - - - - ·------
RECORDS (lF HAR!llS COUNTY, TEXAS.
Wl!BREAS, in compliance with U~e provil;ions set out in i Sl ,OOZ of the Tms Prt>petty Code,
the nbov~ prope:rty was· posted for !Qreclosure s11k and on Jnne 6, 2006, Thomas Redert the patn¢d
Substitute Trust«; oondt~!ed a fom!osur~ ..tewl~trobytl>el'ropel'!)' was sold !u National City !lank of
fudi;nal\ilsol out;., lh.o Sub!limto Trusteo'• Ooed dated SUllo ~. 2Qil6 wllicb is reoordod in Cloil<'s!'ille tl1e Now Md Oeed of Trust; o.nd return the patlies !o the tt>tu• qoo existing
thereunder,
NOW mERBFORJ1, fora11d v•luable <;onsid.,..tlon, •b.• -ipt ond sufficiency or,.mo i•
h!OtiS Willi tho covenant< ond nsroomen!l oont~iny ttlpulate ~nd declo to (1) the Sub>lilute '1'<11>~1¢t'• Deed d!ll.ed Iuno JS, 2¢06 is hertby re,.inded lU!d
det oooumng prior !v~ •·• If suoltl:lt been. tlled ofttcord,
11:\LIOM!Cl!ELI)ll\Cf.lllNTS\ItOME LOANS SER.VICSS FKA NA!lONALCin'\Drllt (!®$1!151900326)\0ttiz.
lplyrrw,c_tw
saw No. ;lOOS-0-J$3900316
National Clty llll suoc\lSS011! ;~nd assigns, to lh<:t extent neceSSllry to re-vest legal title I() the
Property to Albert Ortiz, hereby conveys to Albert Ortiz the Property; subject, howev~r, to the {l_9.QJ
indebtedness evldeceed by tbe Note and the liens and security interests securing payment of th~ Note,
and other encumbrances, restrictions and eClVcuants of record, including wltbout limitati'on the Deed of
'
Trust and all other collalotlil loan instruments executed to plil'Chase the Property. The Grantee's address
Is lilS Birdsall Awnue, Houston, Texas 77007.
TO HAVB AND TO HOLD, tlle Property, Sllbjecllo the nunters hereinabove set forth, together
with aU and Sltlgular the ri_ghts and. appurt<:~nanocs thereto in anywise belonging unto Albert Ortiz
hls/her/tlleir successors and assigns, fOrever, Thl$ conveyance is made without warranty, express or
implied. AlbQ!i Ortiz l1ercby assume(s) and nQree(s} to pay in full all taxes. or other lawful assessmtbis4J__®yof ·. . ·.. ,2009. ~\
· · ---- ·•·· ---·----Nalroualt:iijrBankof1ii:dlani..liyani11'iifOugnit~L-·~--
duly authorized servicing ~gent, Hqme Loan Services,
·
tno,
COMMONWEALTHOPPBNNSYLVANIA §
§
COVNTY OF ALLEGHENY §
BEFORF! ME, theunderslgned notacy public, on tbisduy persolltllly appeared BRYAN KUS!CH,
the VtCE PRESIDENT of Home Loan Services, lno., duly authorized servicl11g agent for National City
Bank of Indiana known to me personally ro be the perscn whose name is subscribed to the foregoing
lastrument and acknowledged to me that he/she executed the same for the purposes and consideration
thereln expressed.
Given under my blind and sen! of office this Lt day oljfj.f:!k~L..--;::--)!iJ
STA'I'BOFTllXAS
OO!JNT'I' Or HARl\l!f
llEfORB ME, lhe imd:..,iptcd ootin:Y ptJ!;flie, "~ M5 d•y personan$ •ppoQrod ThO!flJl$ Reder,
Sub•tllute Trn•t•~ knoWillo m~ por""'UJI!o b• the ~"'"" whQse nume I• subsorlbed to the (oregoin~
instrnment and acknowledged to me U..t bcl>h¢ exeou10d the "me for tl>¢ PI>'P"" aM eonsidernlion
thereln..:p.-.md. ·
Ql\'en ooO3603 P. 2/2
t§ MoLINCBEY S'E:\FFoRP !'Llc --~-----~-----{(_n_oR-~NE_Ys_A_r_VIw
LOVISIANA MlllSISiilr~l NEW YORK OHIQ 1~XAS
tJIIncMy.com
VIA FACSl\lfiLE
Mark A. Jtmell
The Junell Law Finn, PC
3900 Essex, Suite 390
HQuston, T¢Xllll 71027
RE: Ca\I$e No . 2006-61178; Albert Ottlt: vs. Ft·ed Lombardo, National Cfty Home
Loan Senlct>S, Inc. d/b/a First Franklin Loan S!!rviQIJ$, Natfon4l City Bank of
Indfmu:; and Keystone Asset Managermmt, Inc., et al; In the 154th Judicial District
Court of:B'anis County, Texas
DearMmk
I am te01pondina to yom letter dated .Tanuacy 20, 2010. Beoallse ~gel, re;cord title is stl11
vested in National City :Sank by virtue of'th0 substitute trustee's deed, Natiomu City is not going
to relinquish the keys. There is no court order requiring National City to do so, and the S'U.lll.)l1ary
judgment orders are not P.nal. You should receive our supplemental response t() the plaintift's
motion to clancy which lays out the leg-al issues in greater detail.
Sincerely,
MtGlinchfly Stafford, PLLC
KR/ab
304483.1 102869.001~
cc! Gary Michael Block
7660 Woodway Drive, Suite )90
Houston, Texll!l 77063
10D1 Mtl392 S.W.3d 729, 735 n. 7 (Tex.App.-IIouston [14"' Dist.]
2011, pet. denied) in which the court discusses that a summary judgment motion, rather than special exceptions, is
the proper vehicle for a court to address the dismissal of a party's claims.
488285.1 5
Judgment at Exhibit "B" and Jury Charge at Exhibit "A" to Defendants' Motion for Summary
Judgment). The quiet title claim became moot when Ortiz obtained possession of the property
prior to the trial.
C. Law of the Case
13. The law of the case doctrine limits the issues a trial court may address in a second
trial and provides that a question of law decided on appeal to a court of last resort will govern the
case throughout its subsequent stages. 3 A determination by an appellate court that the evidence
is legally insufficient to support a fmding involves a question of law and falls within the ambit of
the law of the case doctrine 4 Once a case has been appealed to the Supreme Court and the
5
Supreme Court declined to accept the petition for review, the law of the case applies.
14. Defendants seek an order from the Court applying the law of the case to bar Ortiz
from retrying the causes of action for which the trial court granted the Defendants' directed
verdict including "fraud, common-law unreasonable debt-collection, statutory debt-
collection violations, statutory deceptive trade-practice violations, breach of oral contract,
promissory estoppel, theft, breach of bailment, invasion of privacy and defamation per se."
[emphasis added].
3
Briscoe v. Goodmork Cmp., 102 S.W.3d 714, 716 (Tex. 2003); Lealce v. Half Price Books, 918 S.W.2d 559, 562-
63 (Tex.App.-Dallas 1996, no writ) (point established on remand of earlier summary judgment was properly made
the basis of second summruy judgment, and appellate comt would not revisit the issue on appeal of second summary
judgment).
4
Lifshutz v. Llfshutz, 199 S.W.3d 9, 20 (Tex. App.-San Antonio 2006, pet. denied).
5
See Baptist Memorial Hasp. System v. Smith, 822 S.W.2d 67, 73 (Tex. App. -San Antonio 1991, writ denied);
Allied Finance Co. v. Shaw, 373 S.W.2d 100, 106 (Tex.Civ.App.-Ft. Worth 1963, writ ref'd n.r.e.); Hurd
Ente~prises, Ltd. v. Bruni, 828 S.W.2d 101, 106 (Tex. App.- San Antonio 1992, writ denied); But see, In re Hemy,
388 S.W.3d 719, 727 (Tex. App.-Houston [1" Dist.]2012) ("Because neither party filed a motion for rehearing or
a petition for review with the Texas Supreme Court challenging these holdings, our ruling became the law of the
case and controlling on remand."); See also, Barrows v. Ezer, 624 S.W.2d 613, 616-617 (Tex.Civ.App.-Houston
[14ili Dist.]l981, no writ) (where law of the case was applied when decision of court of appeals in original appeal
was not challenged by petition for writ to the Supreme Court).
488285.1 6
15. Ortiz tries to avoid the law of the case doctrine by claiming the "law of the case
does not bar Ortiz's claims because Ortiz's new claims are based on facts that were not part of
the first trial and legal issues that were not decided in the first trial." (See Defendants' Response
at~ 7).
16. But, these are not "new claims." In particular, two of the claims that were subject
to directed verdict (See discussion above) which Ortiz now seeks to non-suit as "new claims" are
the fraud and unlawful debt collection claims (See Plaintiffs Non-suit attached to his Response
to Defendants' Motion for Summary Judgment). This Court allowed the Ortiz to introduce
evidence and argue to the jury regarding the rescission deed (See Defendants' Response to
Plaintiffs Motion to Set Aside Order Denying Leave to Supplement Pleadings incorporated
herein by reference). Defendants obtained directed verdict which was affirmed by the Court of
Appeals. These claims fall directly within the definition of the "law of the case" and Ortiz is not
allowed to retry those claims.
D. Limited Remand Limits Trial on Remand
17. Remarkably, Ortiz reads the Court of Appeals' two and half page mandate as a
general mandate as opposed to a limited remand. The Supreme Court stated in Hudson v.
Wakefield that when a court of appeals issues a limited remand, the trial court is restricted to the
488285.1 7
specific remanded issues on retrial. 6 In interpreting the mandate, trial courts should look not only
to the mandate itself, but also to the opinion of the court. 7
18. The Court of Appeals tells this Court exactly what claims to retry: Ortiz's claim
against National City for breach of contract and National City's claims against Ortiz for breach
of contract and judicial foreclosure. The Court of Appeals goes on to state "and, with the
exception of Ortiz's limitations defense discussed in this Court's opinion, pennitting the parties
to assert defenses to these claims." (See Exhibit "E" to Defendants' Motion). If the Court of
Appeals, in such a specific and limited mandate, intended for the parties to be allowed to freely
amend their pleadings, it would have said so (especially given that it specifically stated that the
parties could amend their affirmative defenses).
19. All of the case law relied on by Ortiz in support of the proposition that the remand
order does not limit 01tiz's ability to bring new claims involves a remand after an appeal of a
summary judgment (See Defendants' Response at p. 7). This is a significant distinction as stated
by the Supreme Court in Hudson v. Wakefield in which the Court noted that on a review of
summary judgments, the appellate courts are limited in their consideration of issues and facts. 8
One case cited by Ortiz further highlights the difference noting that in non-summary judgment
cases, like the case at hand, "the parties had had the opportunity to fully litigate all issues to a
6
Hudson v. Wakefield, 711 S.W.2d 628, 630 (Tex. 1986) ("When this court remands a case and limits a subsequent
trial to a particular issues, the trial court is restricted to a determination of that particular issue."). See Unjversi(Y of
Texas System v. !Iany, 948 S.W.2d 481, 482-483 (Tex.App.-E1 Paso 1997) (on appeal following jury trial on a
workers compensation claim, the court of appeals issued limited remand when it stated that retrial was limited to
issue of whether plaintiff incurred an injury on a certain date and, if so, whether she received the injury in the scope
of her employment. Trial court went beyond remand when it tried other issues).
7 Id. at p. 630. The Supreme Court does recognize that the cases are rare where issues of fact should be limited in a
case reversing and remanding a case to a jury and to authorize such an interpretation, "it must clearly appear from
the decision that it was so intended." Id., [emphasis added] citing. Cole v. Estell, 6 S.W. 175, 177 (Tex. 1887).
This is such a case.
8
Hudson v. Wakefield, 711 S.W.2d 628,630 (Tex. 1996).
488285.1 8
resolution." 9 Accordingly, it was appropriate for the Court of Appeals to issue a limited remand
after a full trial on the merits because the Court of Appeals had the benefit of the full record
when it issued its remand order. In this case, the Court of Appeals reviewed this case after a full
trial on the merits. The cases cited by Ortiz are inapposite. A plaintiff must bring all claims it
seeks judgment upon at trial. An appeal is not a license for a plaintiff to confect a new lawsuit.
20. Ortiz takes issue with the Court of Appeals language in its mandate in which it
states "we .. reverse the portions of the judgment. .. providing that 'all partial and/or
interlocutory judgments heretofore granted in this care arc hereby made final and incorporated
into this Final Judgment." (Plaintiffs Response at~ 13). Ortiz claims this merely makes these
summary judgments interlocutory again rather than reversing those judgments.
21. As directed by the Court in Hudson v. Wakefield, the mandate must be read in
conjunction with the Court's opinion. 10 In its Opinion, the Court of Appeals makes it clear it is
reversing the summary judgments. Among the statements included in the opinion that make it
clear that the Court of Appeals is reversing the summary judgments are the following:
• "The common-law-arguments in Ortiz's motion cannot support summary-
judgment based on the Uniform Commercial Code because the U.C.C. 'preempts
principles of common law and equity that are inconsistent with either its provisions or its
purposes and policies." (p. 877).
• Ortiz then would be not entitled to sunnnary judgment based on common law
because there was no consideration for the release. (p. 878)
• Because the Letter Agreements arc ambiguous, we also cannot affirm the
summary-judgment rulings based on the grounds expressly raised in the summary-
judgment motions.
• The ambiguity of the Letter Agreements precluded sunm1ary judgment. (p. 881)
9
Reynolds, 266 S.W.3d at 147.
10
Hudson, 711 S.W.2d at 630.
488285.1 9
• We therefore conclude that the trial court erred in granting surrunary judgment
and in incorporating those rulings in the final judgment.
22. The Trial Court incorporated all of the summary judgments into its final judgment
and the Court of Appeals reversed all of those summary judgments. 11
23. Ortiz also argues that Defendants' are somehow barred, waived, estopped and/or
ratified Ortiz's efforts to retry claims barred by the Courts of Appeals remand order because
Defendants allegedly plead new claims in its amended pleading. Defendants did not plead new
claims. Defendants have plead a declaratory judgment since its Original Counterclaim filed in
2010 (A copy is on file with this Court). Defendants' recently amended their counterclaim
adding factual detail to their previously plead declaratory judgment. Defendants' declaratory
judgment has always been defensive in nature.
IV.
SUMMARY AND PRAYER
24. The Court of Appeals issued a limited remand and Ortiz is barred from reopening
his case by that limited remand. By attempting to manipulate the system and avoid the order of
the Court of Appeals, Ortiz entered the realm of sanctionablc activity. The Defendants pray that
this Court enter an order limiting the re-trial in this case in accordance with the limited remand
of the Court of Appeals.
11
Defendants do not intend to contest the issue of whether the June 2006 non-judicial foreclosure sale was valid.
Defendants intend to pursue their judicial foreclosure cause of action.
488285.1 10
RespectfuJly submitted,
McGLINCHEY STAFFORD
By: Is/ Stephanie Laird Tolson
Joel Mohrman
State Bar No. 14253500
Stephanie Laird Tolson
State Bar No. 11795430
1001 McKinney, Suite 1500
Houston, Texas 77002
Telephone: (713) 520-1900
Facsimile: (713) 520-1025
Attorneys for Defendants National City Home
Loan Services, Inc. d/b/a First Franklin Loan
Services and National City Bank ofIndiana
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing has been sent to aJI counsel
of record via Email, U.S. certified mail and/or facsimile on October 30, 2014:
Email, U.S. Certified Mail and/or Facsimile
Michael C. Donovan
6300 Dixie Drive
Houston, Texas 77087
mdonovanesg(al,yahoo.com
Is/ Stephanie Laird Tolson
Stephanie Laird Tolson
488285.1 11
Exhibit List
A. Albert Ortiz's Original Petition
B. Plaintiffs First Amended Original Petition with Application for Injunctive Relief
C. Order of Nonsuit dated November 23, 2011
488285.1
:\I HFRT ORTIZ
Pi~1i1ttiff
8/\T\K OF ,~\1\'iER!C/L NATJ(f-.JAL OF HARRIS COENTV~
/\SSUCT/\TKf~'i; ;tiJJ
f"\ C·BANK. -N/1.TlONAL ;\SSOCL·'\_lTCJN,:
1
____ J\ID~CI;\L DISTRICT
TO THf:' HONORABLE COURT:
IHSCOV!m.Y
EXHIBIT
I A
---~- =-------=
J_ Phrfntiff Albert 01ilz ·l~- W1 indivkhmf who re~ide~ in t--hHTis (\Jtmty.
4, Dt~fl.;)tKff1111 Bank. i)f ./\ tnerka.. \Jntlon-ai A.s-socint[(~rl, 100 N-orth Trynn Street
Charll:ftt\!\ NortJ1 Caro11Jm 28202. \sa m~iionui l.J~mk nnJ ntm~rc:::!-dcnt J.mg~tg~d h1 b1Lsincs:1 'in '1'tx:t>)
SIJCCESSO!ut to !-he _tll'esent datc- ot~
:ihctn``tivt:iy~ frnm the chU(: ofihr: c.xecutinn nrth~- Rcsclssk'Hllnstntn1CI1l hl ~ht~ pr~;,;::entd4i;'.
TRESPASS TO HEALTY
20. Pb~mit!''dRTlZ IT.r``logcs nr~d incorporates by refCr~ncc ali ofth\5 l11cim.tf Sctflt_(.":H-w:n1;;
nnd nllegm.imq; mud" !ler~inabow in !his pmhio1\. ·n1e eond nre Hable ltJ ORT~Z h1r -;he imcntlomlf l_Ol1- or trespass
\{pi1n rcahy by enledng the R\_~1 Prclpcrty ·withottt OKTiZ~-S coH.stnt, :!nie_rtth~maHY c:rmslrrg nn~ r1r
in r:x1``ss ot' any nwthori(y to ent~r the Real Prope-rty und/ur .remaining upon the--Re~1i Prop1;:~·ty ~fter
1t 110 J(lnger bG-d au!.bfn·!Ly tO du so. Stich c1Hry \V~eS ph3.:skuL fritemiomiL_ ~tnd vo!u-JH\tl)'.
Rcrd Pmpl:rty.
ORTf?~ ~ill-::g:.::-s ~1 ~..~iHJ:-;c~ nf '1crkm for tre~rm->s against said D..:H:.ndan1s~ seeking 10 n.:c-ovcr f(n·
i.Ltnange t"n =tlw H. cuf Ftup~rty tm\Ji!.-ft ioss or Htl!' u~:.c nnd enjoyment- t:>f .tiatrk.' f'nt· LlU dmtt $1Jb$r:q~.;~fit t~:
h1s bdng_loc;keJ out the Re.:d Property. ;\]knmtlvdy~ ORTIZ sed;s to rec-over i.lfi s.:K>h dtmlagc$
f:h'm:1 Aprll J 7~ 204.19, to the- tlni.e nfhJs rr:``entry to the R_('aJ Property.
Ql!lET TITLE CLATI\l
21_. PhtintliTORTIZ rculkgcs amJ i_ncorporntcs hy r-efcl-"{'ntk.~ ~l! of the i1t.,;;tuai stutcmcnrs
and alkgfltkmg mnde ber-dnahovL' in t.h1s pct1Hon~ ORTiZ requesl1) that the Conrt cn:nc-d th~ DteJ
uf Trust rektl.d w tho Real Pmpcrty ami rolllO\'e the dnml on the Htle to the Real Prnp~liy creat~r&\. inc. l'. Tesoh'! Petn~hnm; C"a_sc. 2!7 S,\V.}d 6SJ. 670..,.7! (Tex.
App.--·-···f rnu-~td-n I14dt: Di3LJ 2006, pet, den}cd1. DdCndam~ v-1olrHt;::d thh: duty.
Dc=i``JH::h:mts c-ommhled fi'i1Ud in that they disclosed in'J1xm::.l1lon to (}Jtnz regordlng Lht:
:;;.irtt``;;: of title l.D the Ro~'il Ptoptn)'' and tht.! c-i1Cct of the fort'dosure. \Vi!hout eve1' d~sclos;;t1g the=
'\Yhnle ti;xth. Deft~nJ,)r1ts hZld ri duty to t.Hsdosc rba_t the June: 6, 2006_ l-'tm~-elosu.re L~;1fe of the Rca~
Property~ the -r\.!Hlh~ng Suhst~!utc Tnrsh.'``s D~c:d bnrl he-en rcsdnr.:k-;_cl ``nd/nr tHk in !he Real
Proper~y h~1d hc~..~n ltt:m::d~rrtd bnck in ORTlZ, [)(·[-l~nthutt;.; Jith~-!u~ed lnf'bnnrttfnrt nbn-ut the
for{.:dl).SUrl~ 58l!1 it 1md ORTIZ thereby >ttfferd injury in !bat he
r-nntimh,:d w- be dep1+"·-.,'l~ \Jf th~ R\tal Prnperty' .::md incurred exp:;nst'S: assock~ted \Vfth thing
e1~e\vht·rc·,
rcfttsing, ~o aHnw ORTJZ Ur regain ptrs~cssion t-0 the- Prr;_p-erty. SfJCt:-l!I~::O.Jiy, Dt}fo2:mhms`` acth1g
thnmgJ1 lhdr atu:ntH:)'~ or ~lgJ!nt~. sent :1 idt!.!r. in n~sponsc to a ktlt;--r Ih.Hn ORT1Z'1'S t.~Horncy. it1
\cVhleh tlwy Lh~sely reprc~ente-d that BANK \Vas the -nw1K~r ot' the R~al Propc1ty, denh~d ORTIZ
the kCJ-'S h1 lilt- R·~:~tl ProperLy. and rdl1scd to· transJCr tlK· Rca~ Prop-~ny to ORTIZ, \-vhcn tht:,Y
kn_¢.\V for -~hou!d hnvc known but for- dwtr J"Cckfcs~ne'SS} th dbclosc the Rcsoist:dtl!l lm•lnnncnt !n OH.TIZ
~ub:s~qucm 1o ih execution and filing. \.1orco\~L BUb:51.Xft1(flt to their cx.cGUtkon aruJ HHng nf ihe
``c;;;c.l:_.;::>ion lnstn[ment. Dcfen:danb uftlmmtivdy r·cptL~scnted to ORTlZ lhat lltk~ to the Pn-,perty -\vas
hl BANK. !1Gt ORTIZ. nnd continued m use iJ1ls assenion as a lx1sls [iJr !h.iling and rdhsing to
n!lrr•.v- ORT1Z lo re-gain pr,·sses:;ion to th~ Property. Di..'fCrhbfltj alw conth~unHy refused ORTLZ
po>.:<~>siotl to rh~ R~t>sion lf> lhc Real Prnpcrty Bl ;my lime lfhe had requested same, All sudt
said Defendants rrnd
llHEACH OF LETTER AGJ-
t!1;;t t-hev would J:l(}t d~mand or tithwte nnY further sums
r - - - - ' ,_. - '
Dder1dc1:1ts !lth.!/or req~esls frwm th~ Coun spcdfk perfc•nnBrKe nndior injunction relief as mmcdy
REQUEST FOR DECLARATORY RELIEl'
Note and Deed cfTnt~t~ including at('l appcai and/or mo.rH.brntjs itt connection \Vilh any ruling tH'
EQ!JITAHLR SUBROGATION CLAE\1
l'mpeny. lf and only il' PNC i;; determined to !Jave been tfl£ owner
l'NC tr1
ORTlZ
ATTORNEYS' !?RF$
Lcw:r /\grccment;;. ORTJZ retained an attorney to prosecute his dairns rdatd lh~reln. ORflZ i,;
PRAYER
\VHERHFORL PREMISES CONStiJP.RED. Plaintiff ORTIZ respectfnlfy reqm"i' nftlw
mld injunctiv•c rdfcL ll> which PbimifTORT!Z may be ccnt!t!cd.
RcspcctfuHy submWcd.
isl !vlkhtcei[J'l1'9Yf1l1 ..
lvlidmd Dnnovan
Tcxos Bar No. 0079M78
63\10 Dixi0 Drive
l-!nw;wn, TX 770N7
(7 !3) 956-40-!3: (7 L1) 956·4042 lltx
ttl1-,iQJii.l.V_ftlJG":o'iJ,flD~JJbH£).SflfD.
AHORNEY FOR ALBERT ORTlZ
2014-63579 I Court 133
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or Hrib-;_Hty. 1t 111 nzr-~t.;;.d fhet rd) furth.CJ' ~U\1~ wn! be mnde -or awe4i by Bor.rO\o\fi..W~ tt~1-d no ft~r{hf:!f
Em\IH will \,;, \ir&Bzd;,d or lnil;J!k'<'i by l...:oder,
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DEBT OUTSIANDINO: 53~t\2-Cl?.S1
F/1Ul MAlU{ET VALUE: 525,0DO.IlCf
ACQU IS1TlON DATE Q!j/Qf'/06 PROP DESC: J05 nlRDSMJ. AVE HOUSTON
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2014-63579 I Court 133
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By;
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COMMONWEAt:r!l OF l"El\'NSYLVANlA §
§
CO\RvTY Oi' ALLEGHENY §
BE FORi:~ ~{E. the uGdcr$~t~ned ~tot.:Lf)' puhtie,1 ort thh 'day ptr31-tml:lHy aJ)j)~:m S~-r.dc4:'~h h:~.~ duty 4t~tho:r~.zed sei"vtdn-g ~g~n-t :":~r Ntt~H>mil CHy
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I' HOLD FOR: SARRETT DAFFIN
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20 14~63579 l Court: 133
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Pr,.;,•JY.:Hy t"~;i Albert h~:t"by -c-oH\'-ey.s m t\_l~-rt Ortiz !11c Pmp;.~rty: s:ubj{';ct, h~:r\\·cv;;r, ft1 !he (t,.,09J
im:ic~!cJnr;:ss. c\."idt;;H;cd hy th;,; f'·h1tc: aad th~ lien:;: a-n(I ``~u-rr~y in:t~n:;::!ils tl~curili_g pn}"nl-C~H n-f 1iK~ ·gnte 1
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ag_3ln-~t th~ P:tOJYftl;4 and <1H attunm'r.s Nheo·wb~ a.dvan;::t.:~J -by Na1i-o-m1i C~!_y umkr lhe. htm'l_'i ``f the· NQte
COMMONWEALTH OF PE.NNSYLVAN!A §
§
COU~TY OF ALL-EGHENY §
BEFORE Ml,, ihe \!Hdcm~nw noi\'~TH Of PWNSYtVANiA
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HOlD FOR: SARRETI OAFF\U
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2014-63579/ Court: 133
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3\J!Xl Srutc 390
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RE-; Cl3.us-e.· No. 20lJQ ..61l7S; Albert Orri:t •.;sl Fr~d Lcmrbardo, Na-ripn:tl Ctt) Hnt7h~
Sa1rViCc. S, it1C:. d/bA~ F"irsr Fttut:h:/in [fxtn Sen:>{tt:':!c', 1\itHiOflal' Cirv
btdi,Jr:~ and Kfl]oStbne Alant.1gt~mszltf luc,, l]f a!; In th.\':- 164rh Jud-it.ii~l D±5ittii!l
7
Court of Harris County, TeltiTs
l arn: respond~ug to yottr ktter 4~.tetJ-l&n1.Wtry 2b~ 1010. Eet.``use h;B~l~ record tlt1c i;c; sti!l
v"~t~"d in Niiihmal City Bank by vi1t11C ·of tJic substlmte: trusteers dceril NutiOnll City is not roin~S
to rclinq\:d_~-h ~he 'keys. There is no court order rr;quhing N;Jtianal Cit'/ to do soi i111d the.; $\lll';J).hit)"
judg;n0n:t ord(3tS are nor finat Y-oll sho-u.id receive- G~lr ;;rnpp1ernont31 n~poHS:,9 to the pl__rdnHf\ S
1
m~Liart to d~ifV whith lavs out the ~euiil1s5t.:n;.s hl f.:r\::~{tcr detaiL
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:>d !llld styled c;mse, C.'lmplaln$ {:•f I'NC
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Bilnk. N.A. (''PNC"), Select PorttbHD Servkin~(!P't· {''SPS'"), Saibguard Properties, Inc.
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- i3~-:.·
("Safbguanr}. Tracy Niroln, L.P. d/b/a Nlco~''!SW! Estate {"Nkol11"), and LPS Field Services,
,cd~{``~
lnc. {"U'S"), the Defendilllis, !llld for cause~ ~f_dbtion re>pectfuliy shows the Court n,; follow~:
'-'1
.~.~;CO VERY
,;}````
l. Discovery In thls ·
general jurisdiGti,*~bi'nd specific jurisdiction over ~he Defcr.dantll. The illmmnt claimed by
'.:.<;.-_'·~
Plaintiff is ``~·~ the jurisd1ctiona1 limits of this Court. Venue ls proper ln Harris Counry,
...JJ
~
pursua11t to Chapter 15 of the Texas Ci vii Practice and Remedies Cad e. Plaintiff genemlty avers
thai aH candltlons precedent to filing the claims hereir. have been p~formed or have Dccurred or
!he c-onditions have been excused because of the condm;t ofthe D.l!liJ-
&1 (``t;~ {)f S11~ft£1
3, Pl;>intHf Albert Ortiz Is an individual who resides in HIT.ms County.
4. Defend1mts l'NC Bunk. N..i\., Select Portfolio Servicing, !no., Safeguard
this litigation.
5. Defemlant LPS Field Services, !nc, is an entity that can be sen·ed by serving its
registered agent. C T Corporalton System. at 350 N. St. !'au! Sl-, Suite Dallas, Te~ as
7520 I.
SUMMARY Of ACTfON
~- .l````~
6. On or about March t5, 2004. Plaintiff purchased``" real property tumaining a
~_ 1,01··
tu•,vnhome in Harris Countv, Texas (referred to h<:rcin as the --rt;;;l\i``~perty'' or ··rtaintitrs house").
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____J;``;:~::.··
LOT S!X (6), !N BLOCK ONE Ill OFi:,:"t!LLAS OJ' BAYOU BEND, A
SUBD!V!SION !N HARRIS COI.1NTY, I~f,i'I:E, ACCORDING D TO THE MAP
OR PLU THEREOF RECORDED UN~ER FiLM CODE NO. 4!7080 OF THE
MAP RECORDS OF HARRIS COUift}';TEXAS.
,,_ '>;_J}
~--~
TI1c Real Properly addrc:>s is I05 Bird~alt rf~usmn, Harris Collll\y. Texas 770(}7.
\:~:::l
1. On or ab(>\!l OctobFri~?); 20!0, while tho Real Property was under extoosivo
·:3ih:;:~;l
renovruions, Dcfcudanl(s) !>mk~> ~i~'Plaintil'rs house. o!JStcd Plaintiff from the house
~<--
chl!nging
~-5~\
the !ocks, kept exclusive poss``jfiin ofthe house for approximately six weeks, caused damage to Lhe
r- ,~(~:) -:,}
house, removed aU of Plllihiitr ~ oos&essivns !rom the house, faileil and refused tel remm the
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possessions taken ij[O'~'~hc house, and !ried !o sell the house, all without Plaintiff;; C(1nsent or
lmowledge. ;{``~':''
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8. ,,,,,}Subs;;:quently, while this litigation wru; pending. SPS J.ired LPS to pmorm certain
gervtel:li in connection with Plaintiffs house, On at \east iwo occasionc>, Lf'S has entered on to
Plaintiffs !and, perfmmed inspe1;tions of the house, and, within a few day;; before the date ofthi>
!he property and !hre.tening to enter the property and take <>;ortain unauthorized actions therein.
9, Moreover, such ~cts nf Dcfendant{s} were committed as pur! of thcir efforts to
10. P!alnti!fbrings Lhis suit to recover his damages caused by Defen;iant(sr uc1s ~nd for
'~J``
ci"•'>
injunctive n,!ief to prev~'llt and res! min '" repeat of such ucts or the coml1J!* of s!milar ~ds by
tr=---``'";--
Defemlant(s). Plaintiff seeks rec.overy or all damages caused by Def~Jrrt'(s), incl\1ding .his actual
-:s,~J:J/~
damage-S, nominal damages, puni!iw damages, and/or recovery ~g~,i§ attorneys' fees. !njunctlve
-/i``~
relief is necessary to prevent and/c)r re$truin Delendani(>) fmrrl'~lnmirting
"\';;.., ,
the same or similar ac!s
___
c].'·;:c,
as described herein, including lhrther entri`` into Pl>~iotift;~usc,
.,:,_
changing !he locks at the house,
h>~<·
removing or taking lli1y possessions tn the house.. at(``~hng t() se..tf or dispose of Hw possc;.;.;;;ions
0 \0:::-1
taken from the house, attempting to sell the hnuse;f;l!lZl!ur threatening to commit nny such acts.
_,f;;,``~p ----- ' -
BACKGROUND .·\;:'\~.STATEMENT
'1_·!
OF ~'ACTS
y~'j
1l. ln November, 2005. Pl,R~infr'trs
•/f•
lender, which has since merged Into Defendant
;f,'0~(1t'
l'NC, and its mortgage servl::c;:~}iimn~ntly ous!ed P!aintl !f from hls house, removed his
:f:::i~'
possessions, and .then monthsJ;ter wrongfuily foredtJsed on his house. Plaintiff louk them to
_jf:_;~::i)
c<.>url ;4·nl won, after fig,'l~iriliJ'fiem ii;l court for almost five years.
``~-}
l:!. About :(!:~.: ycaro into the lawsuit. Pla!ntift's lender rescinded the wrongful
- ,~\~{J~
!l>reciosur<: and ~;~·title lo ilie house back to Plaintiffbm failed to inform Plaintiff of this facl,
kl:~:::'
failed to restq~'i>f,sserssion oft~e house to Plaintiff. and Cmitlnucd lss of use of his
house and the taking of his belongings, and declared that he owed nothing on hi~ Mte flitd deed
of trw>l associated wirh the house, The court's t!nal judgment decided and confirmed that rhe
tbrecl0surc ofth!! Real ?ropcrty is set -asirle. that tit~e t\.1 the Real Property is restored to Pl::dntiff~
and that Plaimiirs Note and Deed of Trust h1 connection with the Real Pn:mertv are ihliv, ~ " 4-
become due and llwingnmlor the No!e rmd Deed ofTwst A true I!I!d c(lrrecl mpy of the Jlnal
Aimr the jury returned its ''erdici and despite taking nothing on all
'
,:rt``
~nc!udlng itsjudicial foreclosure clRim. Plaintiff& Iemler, now Defem:ia\ltcJN:'K:, filed a notice of
·~:::t::;::,':::;'·
(f' 'I\'"
lio pcndeas. asserting that it st!!l had alien on Plaintiffs house, which"Ifstieks to en!hrce.
~J<~;J/
15. Aller the judgment, Plaintiffs Iemler, now Defert~t l'NC, apporently :;wilchcd
~:',f*~f
mortgage servicers. tctn5ftrring servicing of the loan to L?c(~lr~l SPS. S PS bred Delimclunt
1_<::;,7'~
Safcgu14'1llt1 forcefully enter Plaintiffs house, loGk out ~);,~tiff, and remove ull of his hdMgings
,_ i````
from !he house. See Exhibit 2. auu~:hocl h~'fe!o. Dei;':``fu!t Ni<;ola was hired !o att<.1npt to .>ell the
- R":-.-``,
house and was also involved in entering tl1e hous!firrljit'or removing itemsthert:!rorn.
,rz``!
! 6. Just six wee.t:s after the finn\Jtidgmem awarding Plaintiff drunages for ttt.-spess to his
,{,-\~\
hoLt>e and removal ofhis personal pmp``"Defcndant{s}, without Piainhifs knowledge N consen!,
corr.mitteJ or causocl w be cormnt````" following acts with respect to Plaintiff.~ house. which
:{~.)``
Plaimiffwns st!H trying to ren?'~ale. Defendarrt(s): unlawfully enteroo into lhe house; chaitg-cd the
.'·Ci~-t
locks trt the house so a;;,!,''~geprive l'luintift' of entry and possessi<)P; unlawfully ~nd pe:rmlmmlly
- \``;;~'~'
remoYc4 at:tcl!or d!;;p,;;lij;JI of ali of Plaintitl's ptoTSonnl belongings lf!ld building mal<:riais .in the
~.-,_.;-·,'-?-
house; darnagedz4f~J;ru;e; and listed the hou;a tor sale, Defendant(:') committed l>Uch act> while
l``-;"
anempling to,~gltect on the Note, a debt lhat they allege\$ stili due. Thes~ debt col!ecHon oct;; were
r misleading. awl caused ha.'1!tll> Plaintiff aadlur his property.
!7. UpDn ieamiPg that Defendant{s} had cDmmitted !hcse acts P!cimifftilcd trJ> suit and
Dcfendents in the future. The order we;,; agreed !o by the orl.glnal DeR-nclants and was fl!ed with the
18, Subseq~cntly. Defendant Ll'S was hired by SF'S 16 p<::dbrm certain s~;cTVices in
connection with Plaintiffs hou2e. to date, f'!aintiff hilS discovered that Ll'S has entcroo onto his.
property and has conciuctoo mu!Hple inspections of his house and pmperty. Just afew day;; before
.:ri~::7
the filing of this petition, Ll'S posted u notice on the front door ·uf J'lail\~t:l'b~'housc. A true and
$;~;--:}~J
com>ct. copy of the n,,tice is attached hereto .as [Exhibit "2'1 a;1d ·,irit6(-pomted herein tbr ?li
purposes. 'Inc notice stnted ~s follows: ,;·,,``~'J'"? .
LPS Fieid Services, !nc. has iru::pected this properly ~rii\1lbund it to be vacant w
abandoned. The mortgage; holder ha$ the right an``ly tD protect this prop~rty.
Accordingly, it is !ikdy that ihe mortgage hold~i';;:\~1ll
0
have !he property secured
' ' ' ' ' ' ' h f' d '·'
an d·Tor ·w~ntenzeo w;.thtn t e next e-w ays, _"}7,~:?
(``-"j)':.·
Pl. The p,>sdng cf this nr.tice cortstifu).;d'"~li entr1 upon the Real Property in £!tree!
- ;)``'f::-;21
violation of thc order agreed to by Defen~·~:ld ll ilireut to take rrction• prohibited by the
-;k)l
agroomem &'1d the law. furthe!IDtlre, J``notice is the.
\':;_.)}
only communication or attempted
(c;-:_
communication that LPS or a!1y oth<;f JJ~dant has hud wilh Plalrtiif conet.'rtling the;;e threatened
ncti"ns. (J``l"'
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19. Defemlant(sf.:~Wi~n~ ar~ attempts to col.lecl. on a loan that Plaintiff n" longer ow~.,;
`` . .
by taking possession ;:;t''l.lis house and attempting to sell it and by stealing rrll Df his personal
<;.,
belongings in the hgd````d!or ``sequently threatening to take th~ same or similw actions whlle
,{/j{``s_i-'
this 1i!Igatlon is p\itrciing and despite being enjoined by !his Court frmntakingo~ch action~. Pbintiff
~{t:.:;~·
:.~sserts l!au~)f action against De!enda."lt(s) for committing such ucts, including, withoutlimitl!tion.
viola!lnn of T e.x•s starJtes, tmJeasonahle debt collection in violation of T~:XHS 1.'1Jmnwn law,
United St~lf'S. or any othf:'r fe<;ierallaw.
TRESPASS TO REALTV
allegations mi>de hereinabove in this petition. The u!x:JVe-described conduct of Defendant>
~i"-~
const''``h erttry wru: physicaL intentionaL and
-·· "<,'j'
vol\lnt;;ry. Plaintiffwa.> wbolly tkprived of any ~sion of the Real Property w'1d was 1ockc.xl out
t~.:;;:<::{:.
for suverul wooks while he owned !he Re<); 'li``erty. Such a~tkm o~ce-,!dOO rhe nmhoril}\ if rrny,
:f~:,:t
conf'">rrt trespass to pcrsormlty by DefcndmJt(s). l'!ain!iff owned, possessr.xl, or had the right to
immedtate possession of the items a'ld belongi:1gs locuted at the Real Pmp<:rty. Such propmty was
subject of
the trespass to pelwMlty commltte'J by Defendarrt{s). L1efem:lar,t(s J have engaged in an
property()!' Plaintiff. to the exclusi()Jl of or inconsistent with hi:; rights in the property :;s its true
owner. Defend!lrit{s) have Injured Plaintiffs personalty or interfered with his pqssession of smne.
"~l~wf.1i!y. As a direct and proximate resul.t of su~h wrongful conduct, Plaintiff has been dnrnagcd
~J--,,.,
~o the efiect that he nc longer has the personal property at iss~e ami has l?'li:;`` benefit of its use.
;:``:\':.}1·
De!bndan!{s) should be held liable for &l.lch conversion, and th10~ (bl~rt should order that
,-. r(~'
Defem!imt(s} return the personal property converted or pay Ptaintili£~(;;,ages such that rre wi!l l!e
::~c,~?;~'~"
comp~·ns~ted for lm;s of such perscma! property. Plaintitf ther~if8fe asserts an act!oo to recover the
-:--. >c!
,;;,~;~)
per,;orml propc'rty, and al!cma1iv~ly for damages wrrcr~;'ll~ a r~sult nf the co;wer.ion and/or
f:r··~:/
trespass ro perSonulty.
"2":.---.
THei\J'
-'!:."':;.<:~"
Plaintiff realieges Md mtoep'~J!,l~ by reference all of the factual stutcments and
.A>~
allegations made hereinubove in thls peti_tiorl~ All acts described herein W~'re committed by mte or
7 .,~si``
more of Defendlltlrs, m::ting individ``;4a.ndfor t!3 ngt:nt for or on beha!fof one nr mere of the ather
r;dRc;>
!) 'fl
Defoodants. Upon further inv~'iltfation lltld disrovery. the evidence wll! show :hat the abcwe-
y~:``
deSGrihed eoncluct corstil\!Ji:l:fihn of Plaintiffs personal property by Defendant(;;) for wWch they
t( \;__ ,
\;;-~ .('
:rre Habl~ !o Plaintiff ``iiint to Chapter 134 0f the Texas Civil l'r-4ctice !lrid Remedies Code, the
"-;:-:·tJ,:c
Texas TI1eft Ua``````ct. De:fendtmt(s} have engaged in !heft by untawiUHy appropriating :he
t?!f:?:``
!J"'!OOnsl pro.p~$; 1'of Plaintiff by taking it without Ortiz's effe(;tive ronsl;nl, as describe:·._"··-'
"'~;:,.))
Penal Cmle- 'Plaintiff had a posses\K>ry right to the property thai wns the subject of such theft.
Defcndant(s) appropriated the property with the int<:nt to dt.')lrh•e Plaintiff of the pw!J"'ri:y.
Ocfendrult(s) vio!meri Section 3LOJ ofthe Texas Penal Code. As a direct and proximate result of
such wrongful conduct, Plaintiff has been damaged lltld seeks to rf;j(.'(Jver from Dci'endMt{s) the
amount of his actual dam~ges and, in addition thereto. rilnnagos not to cxc=J S IJlil\WU for ead·,
sud1 theft, In accord with the Texas Theft Lia!Jility Ace Defendant( s) should be held. Hable for such
UNLAWFUL DEBTCOLLECHON
24, Plaintiff rea!leges and incorporates by referenC ls well as unreawnable and unfaih``lJl: collection in viol~ticm of
,:.,;§t3:'!J
the common l~w of the state of Te~1l.S. Defend:mt!l have 4,(i'i;jiicpted to C(ll!ect on a loan thn!
·--:;>
Plaintiff no lnnger owes by ta.'l:ing possession of his arJ.d uttompting ttl s.di it and hy
stealing all ofhls persona! belongings in the "u~o'"''"'
25. The wrongful chrmging of locks;1Ji~hdf,,r entry to the Real Property. !he ouster.
``f'"}:;~
exdus1on, ol"ld dispossession of Plaintiff lr6~J)lhe Real !'n)perty, and/or wmngful removal and
,;~h'··'
and!nr retllining; of Plaintiffs per:mn!l!',~property by one or mnre of Dcfcndlmts invo!vod
..r:~t;J
fraudulent or misleading represel}t``{6~. dec~ptive means, ihreuts, coercion and/or gttcmptGd
:~,v~,
cocn:;im1 by viol-ence and/or 6;Hrfiina1 Rctior.~ inciudirrg criminal trespass~ criminal mlschkf
,~::;;_``~\
`` "\l ~·
and/or theft. Defendant(_sM<:iJgaged in such action in atKmpting to cotled a debt or alleged debt
g:$tages ullderthe DCPA a.> u result qf such actions by Delendal!t(s). Such ucrions
'-'-<<'~
t~-'.:·.j( -
alw constitute on U·itfllir and tmr~as;Jnable d~b! collection practice that is prilh!bll~d by and
U4:;-donab!e under T¢xas common law for which Plaintiff seeks tn recover his damages from
Defendant(£),
~6. FutihmnorG, Defend!L'lt(s) Gnterd into the Rcul Property withom notke to Plaintiff
and without consent of Plaintiff, changed the lncks to the Real l'mperty. llnd!or ous!ed. excluded
misleading prac!ice.S by Defendant(>/ and employed ihe usc of fai;;e representations ur deoeptiw
means. Defendunt (s) "'l.lgagcd in such action in collection of un scrual or alleged consumer debt of
Plaintiff :;nd thus v:olated Chapter 392 of the T~xas Dt-bt Coile(}UO!\ PracHceo Act, induding
"::.JL...•
Section 392.304 of the DC!' A. Such
-
acHons ulsn CO!!Stitulr ao unfair_.·.~- ru:fd;'tmreawnab!e
·h::.D
debt
/,;:;``~s-~
mllection practice that is pmhibitro by and actiom;.ble under Tum; C:::.~"
- -
i7):~,~
viGhttion of !he DCPA against Defendru'lt(s). s®kilJf1~)i'ecovcr for a!l damages caused tllereby,
>-;~?
lnduding his aetual damage>, sti!tutQry dmnagcs. lf'ioth. Such uction alw czmsnsent of
--'~-``""(1
PlaintHI: :hreatened to et>tor,PWthtitrs house, threatooro :o change the !od:;; \l) Plalniiff& house a.'1d
(~Jr--
\ll..\;e other unau!hnri;fe;J,,--actions upon tile Real l'mper1y "ml!ot inside Plnintl!1's house,
,".,a/j;:-
mlsreprescntcd tq,:!lllli'i~llff that an cn!bnreable mortgoa:;c or lien cx.\sted on the Real Property. and
,;``~->~ ' ~
misr~1Jrcsent~,;!l:ti'!aintitfdwt the holder of the al!&ged monguge had certuin right& and du1i<:> with
• ,__'0,_'-0
n:.'$pe<:t to thttReal Property !hat it intendt'd to exerG(se wHbin the ncJct few duys. Thc::..c ;J.Cts
involved fro.udulent or misleading representatil>ns, deceptive mearu, th.rcats. rocrdon and/or
al!emphrJ OO$rcinr. by violoncc and!or erim!nal action, including criminal trespass. criminal
mlsd-Jef andior lhelt Defendru'lt(s) engaged in such action in attt'mpli.'lg to c' injunctive reiiof and his Jumages under the DCPA es a result of sud! actions
that is prohibited by and sctionahle under Texas c'Dmnmn law rbr which Plaintiff seeks ro recover
his damages from Defendant( s).
;}~t``
NEGLIGENCE
";\·r/fi~
29. Plaintiff wnlleges m>d inenrporatm; by reten:nce a\1 of thl faqttml statements and
4->``~r,)
allegations made hereinabove in this petition. One or more of.,``rendants, acting im.1h~dually
::-````?/"'
and/or as agent for or un behalf of one or more of tho other De\~fW'..nts, knowingly took posst>ssion,
:``.·._"':::>
[r. s«,iflllng Dcfcndilllt( s) had a dutv to use
?":;~;:> .,_ ~
reasonab-le c.ru-~ in hundHn_g._ protcct~ng·;md/or presery~n~£:ffie personalty and/or maintaining custody,
'sion of !he personalty, Q:etcndanl(s) breached that duty ~md pmximalely
~"';:r.c~:.: ~
caused damages to Plabdf!' v.t,en they aHo,~f:Plaintiffs peruor~al!yto be-come lost or d:unag1.-d.
Plaintiff p!<"ads a claim for negligence _!l,t:t Deferid:un(s) and seeks recovery o!' his dx>magcs
,,~i~&tl
resulting therefrom.
{"``~l
. '"'fNVASION OF PRIVACY
'
<'if``"::),
30. Plaintiff redl)lili;i;~ am! incorporalc act lntrusinn on seclusion by Defendant(s). Detendtmt{s,\ committed an
aHeg
~;L'*for iniooctive
DCPA. Pursuant l\l Section392A03 of the DCPA. Ortiz ,}(-~.:;,_..,; "'
relief to ~prevent antlh!r
wsmlin any further violation of the DCPA, When:,.$```` provides t1Jr a right man h;j\mdon for
'-'0'
~ violf!tit>n.. a paxty docs not have It> establish ;\lii~;'genentl equitable principles for .~ temporary
,;~.;;``
injw">Ction. ilarauder Corp. "· Beat/, 30\ 1SJV.3d 8l7.. S20 {Tex. App.-Dullas 200\l,. no pci.)
5:::~-~
{citing Butnw11 1', Ford Motor Co., 84 S.~lif;~d ! 9&, 2! 0 (Tex.2002). Wben an nppticant relies upon
__if2r
~ !; y,
a statutory wurce for injunctive r«lj~l;ihe stature"s expres.s !angu~ge suporsedes the common law
r.=Z·~"':;::._·~
iT ·y;"
injunctive relief elements such..,iif1mminent ham1 or irrepim!ble injury and lack of ·an uol)..'ll)' tt1 pre\i'f~:.;ihdlor te.s!rain Defendants from further v1olatiotls of the DCPA. including the
{11:,.:;;~-~
tbllowing actil$.';: 1'
- ~:;``;:~
'
(i) ";making or threrrtening fhrther entries upon Plaintiffs. Real Properly or into
Plaintiffs house thereon;
(ii) chf!llging orthn:atening to change the locks ~t Plaintiffs Real Pmpcrtyqr Plaintiffs
house;
Real Property nr Plainti_tTs hnuse thcrcon;
(iv) aucmpling Qf tl1re:;tenlng to sell or dispose of any p<;±2l Pro!"'rt)' or Plaintiffs hom;e thcroorr;
(VJ attempting <>t threatening to sell Plaintitfs Real Property or l'ialntiifs houw
r:.~_fL.,~
{vii) taking or atten1pting or lhreatcning to take any actions t;il``mH violence on
{C~}f~d
l'iaint\ff s Real Properly or Plaintiffs htJus.o thereon;
;;;k/!;~7~
(vii) <::<:>mmunicatlng or attcrnpting to communicate wit'ii;''{;'1aintiff regarding an ~Reger!.
- _.!.';~;]/"
mongage or deed oflrust Hen mt Plaintiffs Real Property or Pii\ji;f~!rs hoU5c thereon;
-<:::;_-.,___ ~-:r
J'~;":i',
(viii,) representin-g to My pc.'l"son or publicly ``i:rt\g or giving notice, other L."ian for
~-,
_--,'>..,-
'-::-
~r;;)~·~
purposes of this Jitigat\Nl, that Plaintitrs Real Prop~htor Plaintm·~ house thereon is vacant t)t
"'-':;d
~f·``?~
~[_ '-)
-.~-?``(``
\ix) representing to any person, &tJ1l:blicly posting or giving no:ice, other !han for
)``:;r
ourposes of this !itige!ion, thut there is al)'loftgsge or deed of rrust Ji~n on !'lalntiffs Relit Property
~r Plaintiffs house thereon. ,.;:c~tr``f;p .
PROB.4BLE INJURY fl~1lVH~Eiff HARM
-``~:~·;,
''<...~!'! <.
34. Pl.aintilf al,§'l!~§!o!iks such injunctive relief on grounds· set forth ill Section 65,0 l f of
{(. .;,--
\.:._,~:f
the Tex!'S Ci1ill Pract}~,and Rem"ies Code andlnr equi!able grounds. Plaintiff is in rmminent
_':1,;{J,~
hann as a result &[~efendants · action_< a!tLWpting undlor threatet1ing to enter the Real Property and
(::~.~·-.,.
take unau1hqp..:i!if' actit.ns therein or thereupon, bc!uding changing the locks. Abscn\ injunctive
<<·~:.;,
tticrclo as a resu\t of Lhe unlawful a(:tions of Defendoots.
PROBABLE RIGUTTO RELIEF
appro:xtrrtiUely six week$ based on 11 debt that be no iortger: owehi and a Hen that iS no longer
now Defendants are dtteatening further entries into his hom<>, furt:ter changing of his !ncb and
tak~ng over posses.siatt o-f his home. and further unauthOrir:ed actions it1 his home.
,,
;F::;``---
PROBABLE IRREPARABLE J:L4RM r;';'~i.''
36. Plginliff wiil sufler irreparable lwm lf Defendants are,~i'.tJkstraJnoo and enjnlnt'-d
--``"-'";-
-~"!f-.~>,';)
from Defendants re-taldng possession of hh; hom~ ~nd possibly ~uving fur'Cher items from his
&,J?iily
1{~-;2»1;~--
!NAD£QUATE REMEDt:·iftAW
-``~:;-~
37. lnjunctive rdlefis authorized when i``te injury to re1ll or personu! property is
---s.§
threatened. irrespective of any remedy rr! law. 1~{Civ. Prac. & R``n. Oxle Ann.§ 65J)l !(S}.
,P'``(~?
Regardless,
~
Plaimlff will show that there ls,``1if9.--~remedy at law that i:t clear and adequate to pmtewt
!'laintiffs properly in!erc~t against thls ';\;``! aliempt to enter the Real Property and change th~
((J``~f
1
locks to his house.
38. !'lalr,tiffrequ~sl:\t!emporary res!raining orrl~,-. temporcr-y injunction and P"nnanent
,,``;},
.;'l.Jj . ,_
injunction so that justice 1:Pt~done, not merely for delay, tn presctve me status qun of the subject
((_, ;;-
matter ofthe li!igation,;:md'lor ma.\;:e the Court's judg;nent eff~-ctive, Pl~intiff is ready, willing, and
-~J;``f'
able t(l perform ``;ilable acllles the Court deems n.,.:;essary.
..!'6``~/
,,iC'"'
·_. - . ,~ .· I
ATIOfu"iE)S Fi':ES
1 . - . ~
'" "-~:;)'~
39. ''c/ Plcintlff :ealleges and locorporates by reference all of tlw f~erua! statement~ and
aHegation made hereinalYJVc in rhis p<:t!tion. As a ~ult of Defendants" acftne Court: '"·'ifji'
,.;f'{;;'
,.:>,~...,
2, A temporar:y restraining order be [:l~t{¢. ;``t1h or rdthout rrotice to Defendarlt(s), and
--:·``/
upon he-dring hefhrc tile Court. a temporary injun~?~rl' he issued, and upon final trial of this mU>e, u
~;/;:c:t~¢
pen:nanenl injunction be issued, euch for \h:&,.jti'rpose of enjoining. prevmll::1g amYor restraining
,~,..
?~}::,.
Defendant{s), Ll]dr artomeys. agentsL. ;~"!'\rants, rmd employees, fiwn tlir~>e\lji or indirectly
comm!!ting !he following; t````])
(!} making or thre<.~l:etling liJ.rther entrle> upon Plaintiffs Real Property "' in!o
ifl``'J
Plaint1 ff' s house thet(:XHl~ ir;:~:0~,
rt:' <~0
(ii) choogl~j}•.gi'tltrcateningto change the lock~ at Plaintiffs Re-a! Property or Plaintiff's
house: , 1!~;~i:fl
.~ ,i.``~ving or taking !)f threatenin).' to rt:movc or lake any possessions from !'laintlffE
(iii} ..
-·~·~"~
i~eall'roD;``r Plaintiffs house ;hereon:
(iv) attempting or threatening to seli or db1JOsc of :my possessions taken frow. Pll!intiff s
Real Pm!'er1y or Plaintiffs house thereon;
thereon;
(vH) taking or attempring or threatening to take any adions to commit violence on
{vii) oommunicating or attemptin!l to etlmruunicate wilh Plaintiff re!\o.rding ar\ alleged
mortgege or deed oftrost lien on Plaintiffs Real Property or l'iaintiff s house thereon;
<;,~.e"O
{viii) repre><--ntlng to any per>on or publicly posting or giving l~lce, other !han for
if:.````:``
purpos<.>;> of this iitigatio~ that Plaintiff's Real Property or PhfrttitT'b!iouse thereon is vammt or
abandoned; c<,;``~f~"
(ix) representing to any per;,on or publicly posti~g)pr giving notice, other ttum for
~;tS:~,~-~·/
purposes ofthis litigation, that there i~ a mo,tgagc \lrdoe!NAlll!OGM~N~;:;;;·•
=``~¥~(-
On Jurte 15, 2010, tho Ciourt ;;al!etf -C~ty SaoK ijf ~ndi"Jna (*N:at:foJul
{?';-~?§,?~
Cit() appeared through th<:lr attQr``d ormrmncod ready iV•rlh;o ``*t m•!ler and the parties. A. jury h•vlng been pre,iously
~ ::-````
derm;nded, the Cvurt thenc\\ili!iiitelo~ and 1wore th~ !mY <:onsisting of twelve qualifled jurors•
.({'``````'?
Tho"'" proc"f! "'"' •no after Plaintiff h•d '"ste&, the
(~ ~ft:;:!,
Defendants .,~-``National City moved fur a directed vu fur Jraud, comm{>!l·law unr~o:mn•cl• debt toll~ctlon, rt~t-tto1\l debr
-~ l(``;jJ:
<:;llili!j;(lon '>r•acl\ of ro;;over agafn'!
_., --;~-'
Deiendar\t£ N•tiorml my and H!.S ~q..,jddgment lnterost on a!! amou~t; >lllimlt untl! pal":
Si1t~t
IT IS FURTHER q!\~Cl, AOJl!DGED, AND 0\:CREED that ali costs o.i court lncurr•d
~\~..``h/
h~reln are ti1lt!!'itiftr>da~ts National Oty and HlS forr<>;overyby Pl•liTtiff Ortiz;
---<~--0.' _,.
iT 1£ FU!f!J{~:oRED, .~Dll!DGW, AND OI;CREW thatPfainflff Oi'll! lsW``udgm;,nt
{1;"~'
on. hh: iiffif'ma``f~n~ of statvte of llmtt~tkH'\5, with r.e:s:pect_ to the counter-clalm of Oe:fe:ndan:t
;!.,,_:r:'S:."'"Y'
,;{"*---·-
Notion!!!t!'lY:J~r judicial forJ>c.last!r~. •nd ~h,at Natian•l City !O'lre nothing on >uf the O!iici;cas 77\.IOJ
P'btm-e-; 7 t J ..26Q...67(m
Fn.:-;: 7D~26-6:~&52S
NO, WQ&-SU7§1
:TAt\·::
\{,
•" • • ,,
~
'.>'p•
._-1"
§
§
1 ... i
""'
> '
'
IN THE 111STR!Cf COfJIU'
i·'"·..;
•
·~.
j !; 7; 2.'8
lS4TH I IJD!OAl OISTI!ICT
5
§
FRED lOMBAllOO, W.TIOI<>\L !i
... , .
C!'!Y HOME tOt>.N SERI!!CES, !N~ §
§
F
D/B/A Rf/Sr FMNKU!\1 LOAN
SERVI!:ES, NATIOI't.M emf SANK § '
c?
§
"``~;~-.~.,··``,,~"' ~,_"'·"'____
OF lN!li!AMA, KEYSTONE 1\iSET
M.ANAG'tM£i\IT, INC AAIJ RICfiAR.D §
HQWE!L I:J/6/A Aw:AHO'ER §
lllJNTER f'!loi'ERTIES A/IIJA § ~,-- !.!•·:f>.:¥-1'
ALEXANil~ilHUNT~R PROI'ERTIES, INC § OF HA'MJ.~11il!lintHf, Albert Ortl' ("Ortiz").
/{j*~!?!
appeared in 9emn •ml thmogh hi< •ltomeyi"';!;il'd annow>eecl reaciv for trial. Defeod~nt<
"----~(;)-
National !;ity fiO'l'lO Lean ServiO!S,, Inc. r!i)!j;l); and Nat!onoi C:ty Bank of lndial'\a n:at!onol
,{"``~;~-
City"] •PI>"''"d through \heor attor~.~l!ifd announced re3dy far trial, The Cnurt ca•e and aft" ~l•int!ff had re•t•d. the
following
(i~.fr:-'.t-
Oefend•nts HtaMory deb!
F,-..."-._;-; ~­
!;::-> ``c:'~j':l
C<:<~"¢lbo violill!ons, statutory dec~ptiv~ trade prartl~e viol.titms, breach o! oral wntract,
-~-:;::;:;
Exhibit\
& J;eaUL$.i Ji uF !'
''~fib.t::7J ~
/;````·
f! IS TilER!::fORE ORDeREOhy tho Court that the m\\l~l!ift of P!a``tlll for jud~ment an the
'- ~
v~rdltt Is Gil!INTEO~Ft:.t th• motion of De!emlan' ;5; ~;udgment 1
pn the verd!ct is DENIED/'' f""'T
if
-;;:
Ther~fore, th~ Court renders judgment lor Pia:
< - "- - ,-~--``}:
;m:igme'.nt as follows: t~"'``r"
,$04.
IT ;5 Oll0£l ~/r;.
lnt~re>t on ~'nt sum al the ~·'.'rate of 1\ve p•rcent (5%r per annum, from September 2&,
IT 15 FURTHER- RED, ADiUDGEO, AND OfCREED tk•t !'li>!ntiif Or!l> r«<:<>'ler from
-{ 'fo, oo;:~.oo
!Jeieml.•m HL!i tl).;! of ~.6114il.liQ, pi~• pr<>-ju~gment int£rest whkh Is
!:~i!.t
''··,·if'.;, "t t~e annu~! rate oi five !)<:> rerover
f````~:fenctant HlS !he >oparate 1um of $100.00, as e, havlng
If IS FURTHER ORDERED. ADJll
'·'
~'; ·?
Oefend~nts: Natfonill Otl{ ~nd Hl5 ``\ldg:ment interest on all $tm.H.mts a~rded h~efo at th-e
rot~ of !lv& p~>rr judement until paid;
, ADJUDGED, ANO O!'i:fl.€ED t!lat all cost• of rourt lnc"rrll:~. ~
herein"'" taxed •l!;ain~§\ifer>d;mtl
-~-~<]!'
fl•tional City and HL> i<>r re.:overy by ?laln!lff Ortit;
ff IS FUR")Ht~ri'Eru::O. A1)JU0G£0, AND tiECREEO ~hat Plnintlff Ortl!: Is ~dgmen!
t:~).:'-
" his •ffnm"'l~li1ifen>o of >P>M:e cflimltation>, with respect t<> th~ counter-cl•im of Dclendant
_':&?·~;'
illationa[~j~r judicial farocia•vr", 3<1d th•t Natlon<>l City take nothi~g onsumd•fm;
(tJ;;_'~({J
,,[~'!l Fl.iRTHtR O~DEREO, AOJUOGECl, ANI:l DECREED that th" DeeI Trust dated Mart11
-~:.{.~"'
is;,l.E of H~rr1s
Al'f'I&6~S.52&
CAUSE NO. l!ll0-79363
ALBf.JlT ORTIZ !N TIUi DrSTRfCT COURT
Phtlntiff
!'NC BAl':-_;;>'
:~-,
AGREED ORDER GRAN'fiNG AGREED TEMPORAR\IINJUNCTION
\~,
petition snd application for lojunctive relief fi),Jflft~us cai.!Se by fue Plaintiff. l'lam!iff ALBERT
' ,(·~ '·~t~"'
ORTIZ, siang w!tb De[!mdants, have a! l a``fto me cnizy ofa TempotllfY !.njooct ion.
' lj}-
THE COURT FINDS, hav,~- reviewed th~ pleadings ~nd the affidavi\s a.'tdior
_-.)e_l(1f''
verifications contained with 1.~e lil:~i!ir.gs, !md noting that this Order is ~. that fuis Otder
;{``~
should be entered by the CO!.lrt,,·-eo;·
~t:r;,_~'
THE COURT m"Wi t.lw.r, to preserve the ;;talu> qoo of the l>Uh,jcct rru;tter of fuls litigation
- - -
n::-' ~r~
pmdLog a trial on ths~Fitsor othecr disposition offuis rnatter, Pefeoclarru; agree fu!'tllwith to desist
<:-~.9(!)?
and refrain fro'/1;~@1Jrr actions, as set forth hereinbelow, with respect iol'!llinttff ALBERT ORTtZ
\:?::'·?;,·
~::.--:::-'~
and oortain g{~t$ real property and personal property. This tempormy injunction ls bci11g ordered
-~ ````>)"
and ~-eb in order to ~revcnt Plaintiff from suffering any at!o:ged lnjlll}' or harm arising from
Exhibit z.
injunction.
(i) further entries into the Real Property;
,.,,;f,'l:?
(ii) changing the locks ~t the Real Proll,~;'
if::~_:'"'?\,,
(iii) reroqvmg or taking any ~r:;ollil!''prtiperty or trmgll;>le !h!J:!gs from the Rc.al Property;
,,``;:,
liv) selling or disPOsin~ or ott~pting pr cal)Sing lo set! or dispqs~, any pel'S
property ·~r tmgible things alread)``oved or taken from the R<."a! Property; ar.d
,;;::~::_-::t,
sell or dlspuse, ofthe Rc,~! Property.
-~-,)"•
:)
.'``~;:,
in coufunni!V:\~ith the law, or cash in lleu afbnnd, in \he ;lmount ofTen Dollars (S !IJOO).
·``~:"~
c;
rt'!:S OR!JEREV !ha! this· Temporary !njum:tion s!Jall rcrrutlll in eff sed: !l'lief from !l"te 1etms of !his Aweed
Temj:)OC'il.'"JI !!\)Wl<:tion prior Lo !he ool!CIW!ion bftil!£ mal±w by wey ition,
l\1ic~I Danow~"
T~x. Bar No. 00796478
6300 Dl.xieDnve
HoUOlOn, Te1tas 17087
Phon!l (7U) 9564043
Fa."- (113} 95(i..4042
ATTOR."'SY FOR PLA..*l11FF
l'.ji.ijf~diCiit:k
.'J<41l~
INVOICE I IStnoS~l
Vatle-yV'l-!!<038-1 1
To
SELECT PORTfOLIO ~ER\'ICDIG
NONI:GIVliN REO [}EI'AF!T;I!E~!T,
105 !l!RDSALk A\'1'- 3Sl5
HOUSTON. TX-770\f7
Remit Tu:
P.O. Bnx 714441
C<>lumb.,., OH ~JZ7l414l
Wcrk.Orner # i!b~_:llt5
\\'ttrk Ordered. REO ALA CARTe INIT Sll.VCS
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:J,p.:i;. <:h:,mg~J ! -If i,(,{!-_HH S~2lU!>H
IOW201il
Credits; $940,00
?ago I of i
Exhibit 2
Albert Ortiz
Exhibit,
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nnr S'i'ATE OF TE.){AS
CAUSE NO. 201!1-79363
ALBERT ORTIZ
Piuintiff
Ml\Y :] tOll
PNC BANK. N.A;;
SELECT PORTFOLIO SERVIC!NG,lNC.;
SAFEGUARD PROPERTIES, lNC.,
TRACY A. NICOLA, L.P. D/B/A
NICOLA REAL ESTATE and
LPS HELD SERVICES, !NC 1:·1
Detcmiants l90"'JUDfClAL DISTRICT
'``£``````
ORDER ~(``)f:!}-
TD: PNC BAN~ N.A., SELECT PORTFOLIO SER"i'fbNG,
,t':.',.,-
INC., uml LNl FIELD
SERVIC!i:S, INC. ·:·,j{·!'
;;(~:~;·'
ALBERT ORT!Z, Plaintiff ln this (,'!!Use, hi!S;~flled a vcritled petition ior J !cmpnrary
"'} '
inj-unction and. in connection thcrewllh. has prefierfft.~}ii_ request fbr ri tt.mpor.ury restrnining order~ as
``;.~r::~-'
set forth b his Original Petition. it dCJrly . apJ:!~iiTJ; from the fuc!s s~et forth in the vrn:itled origioal
'>;-
]-~'-:t
petition th~t 1mle,>s PNC BANK, N.A., $E-fEC"r PORTFOLIO SERVICING. INC,, md LPS
J~1
"' sC 1.1"-
F!EUJ SERVICE.'), INC., deti;nd~'(@'.lii thls caJL'-1<:, are immediately prevented and restrained from
- - ·?"';~-~:0.'~'::t - ..
,. '>(
dlre~tly or indirectly committir~g·tKe fuUowing with respect lo the rGl!t pn:•pcrty located at 105
·~-!;\
Birdsall, Houston, Harris c;;'(}t!~f~exas 77007 ~nd legally described as fo!lows:
('"l;:;;"
LOT S!X (6),\{tl,, BLOCK ONE ([) OF VJLLAS OF BAYOU BEND. A
SUBDIVlSlOJ\HliN HARRIS COUl\l'JY, TEXAS. ACCORDING D TO Tl-!6 MAP
OR PL1.C£[cffEREOF
n:k:o._-,;;
RECORDED UNDER FlUv1 CODE NO. 4!7080 Of THE
MAP RE!i;KlROS OF HARRIS COUN1Y TEXAS.
'( j~
(i) making or tllrML11lng furthe-r entries upon Plaintifrs R!'a! Property or into
FILED
ChrJs Otn!•l
Df~!rlel Clui<
IJ.AV - 9 20\l
(l!i) removing or tnking or thrl;lltening to remove ur take ~ny pos>cssions from Plafmiit's
(iv) atlempting or threalen!ng to set! or dispose of uny f!0ll$Cssion.<; taken from Plaintiffs
(v) altcmptlng or threatening to sell Plaintiff~ Real
(vii) tnkln£;1 or attempdng or threatening to
Pln:inlilTs Real Property or Pla!nti!Ys hou:scthureon;
:~,~"
tvli) enmmunicating or attempting to crlmmunt~tl\vit!1
;..r·,>:.:,
Plaintiff reganling :rn allegL'il
,.-.··,;.)
mortgage or de<.'d of trust lkn on f'lainti ff s Reai Prop~t~ii'lt ?lainti ff s how;e thereon;
·~-::;:;
?
(viii) ilnY person or p``y posting or giving notice, other thiln !br
representing tG
,}"11``\~
purposes ofthis litigation, that Plaintilfs R,&tl)'roperty or Plaintiffs house !herron h; vaca,'lt or
\c~....
:,(;jy~-
·:>:"/
then said defendant;; ~'j.lt,comrnit the f(lregolng acts before notice can be !,~ven and a hearing is
.~::~{!f
had on Plaintiffs >~l'on for a temporary injunction; and that if the commission of these acts is
-~z{;,~
not prevontc9 &~1~strnincd irnmcdiate!y, Plnintitf will suffer lrrcp•rmb!c injury because P!nlntHf
<0.-``~:,
will deprivd''Oftne posses:;iqn, use and enjoyment of said real prop~'rty and perso::wJ proper(y.
!T 1S. THEREFORE, ORDERED that I'NC BANK, N.A., SELECT I'ORTfOUO
SERVICING, INC., and LI'S FIELD SERVICES, INC, defendants in this aauS Real l'I'Operty or Plaintiffs
(iv) taken from Plaintiffs
{v)
thereon:
{vii) tcldng at ar~mpting or thre-atenipj~tb ·take MY actions to oornrn1t \riote-nce on
-;:::lc::::J(``;;_~
Pluintltfs Real Property or l'lmnliffs housc,rlkjjiln:
--``-:--.
(vii} oomm~mlcating C>r attempJ)~ 'm communi~ate with Plaintiff regurding un alle.gw
-f--~ro:-
mortl!Age O< deed of trust lien on Pla~tf s Real Property or Plabtifi' s house thereon;
- t``~'
(viii) representing to ~rry''person or pllblidy posting or giving raotice, oth(tr tc't:m fbr
from the date of crury of !his order until ll!ld tu the rburteenlh day after entry or until further
rr tS FURTHER ORDERED that I'NC Bru"!K, N.A., SELECT i"ORTFOL!O
SERVICING, !7\C, and LPS FIELD SERVICES, INC,, dci<:ndllilts in th~' c~use, appear
courtmom of the County Civil Court At Law I'\ umber ____ uf Hams County at the Civil
Courts Building, 20! Caroline, Houston, Harris County, Texas, thGn and there to show clluse, if
Dollat'S (S .\lfJ).
SIGNED thl~
CAUSE NO. !OW-79363
ALBERT ORTfZ § IN U!E DISTRICT COURT
Plaintiff §
~
VS, §
ll
PNC BANK, N.l\.; § OF HARRiS COUNTY, TEXAS
SELECT PORTFOLiO SERVICiNG. INC.: §
SAFEGU.I>.JI.D PROPERTIES, !NC., §
TRA.CY A. NICOLA. LP. DfBIA §
NICOLA REAL ESTATE am:! s
~
LPS !llELD SERVICES, lNC. §
Defendants §
VERI]lCI\:JION
STATE OF TEXitS
::,<;{f!Ji ~ ~·,,.,.·,
COUNTY OF HAR.!US ~;(``~·
&;fore rne, tim undel'lligne::::::~ • •"' ., ' ' ' ,.
.. --·-·~- -·~---·· -~" ---·--=~-
VERiFICATION '"'"'''"
STATE OF TE-XAS §
§
COUNTY OF HARRIS S;'-
}``~2··2
Before me. the undersigned notary public, on !hi~ll;\lY p~n;onalfy appeared A!bert Ortiz who.
,~:``;~(d"
a(lcr being duly swom. 'ta:tx! under oath that !lmt,))R'?:as read lhe first a-nooderl original petition,
:r``?·
with applioatitm for injunctive rdlef, attachcdJtel:tto, that he is authorized to sign this verification as
,~ {oc~J".'"'
!he plaintiff in this action, and h'lat cv~-.,stalemem contained therein is \Viillin his personal
,_ '-<':.-d/
r~/ . . ./..,.../
. ......
``,..'///F.rr.r.......-;,............-,...-;"'1; FILED
~ AYE.SI!AREJIE!!' DOL fORO§ Ch'rls Oanle!
S . •etA~¥ P. "'.'."-. ti•Tl o• '~" ii
JJiairtet CI$rk
*~.;4t't/I"'~'Gid$'411t."G'l-."+9o-``'G~-~
t'l: r~-
``
yy c:-catJ.lllft;iCtM lJ:rt~t:u
SEI>T. ;" f1 !
::f.-·- •, ,· 1.,.. -· 1 '.
VS, § .. .
PNC BANK, N.A.; OF HARRIS COUNTY. TEXAS
SELECT PORTFOLIO SERVIC[NG, INC.;
SAFEGUARD PROPERTIES, INC,
TRACY A. NICOLA, Ll'. DIB!A
NICOLA REAL ESTATE and
Ll'S FIELD SERV!CES, INC.
Defendants
ORDER ON NON-S{JJT
suil With l'rejudic·~ filed by Plaintiff Albert Onlz. PlaintJJjf.Albert Ortiz having thereby givm
-'-,, -___ -~ ,,
nutk~ to tMs Court and tq all pnrties t<> this suil that h<;;\~'f~king a non· suit, WITH rREJUDICE,
.-__ ; ;\):-'
ofa!l qfhis claims against all Dcfcnd~nts in this cll,t~<'.'
~-r:~(l
IT IS THEREFORE ORDERED thaLI'i;J:h non-suit by Plaintiff Albert Ortiz is !,'Tlirlted
illld that all or his claims agsinst ail Defe~{f;;nts thai have or Gf>Uld have hecm brought in !hi>
Iawsttil «rB hereby dismissed WITH P~j:'JUD!CE.
Mich;J&;novan .
Texas Bru-No. 00796478
FILED
· cnrt" panl~l
6300 Dixie Drive o!t!rl~t Clerk
Houston, Texas 71087 NOV 1 Z0\1
7!3-9564043; !FAX) 7l3.<.l56-4tl42
ATTORNEY FOR PLAINTIFF
EXHIBIT
j
---
TAB S
CAUSE N0.2006-61l78
ALBERT ORTIZ § IN THE DISTRICT COURT
Plaintiff §
vs. §
§
§
NATIONAL CITY HOME LOAN SERVICES, .§ OF HARRIS COUNTY, TEXAS
INC. DBA FIRST FRANKLIN LOAN SERVICES;§
And NATIONAL CITY BANK OF INDIANA; §
Defendants § 164m WDICIAL DISTRICT
ALBERT ORTIZ'S SUPPLEMENTAL DISCLOSURES
SUBSEQUENT TO APPELLATE COURT'S REMAND OF THE CASE
TO: DEFENDANTS (and any successors) (collectively referred to as "Defendants"), by
and through Defendants' attorneys of record, Joel Mohrman and Stephanie Lai.rd Tolson,
McGlinchey Stafford, PLLC, 1001 McKinney, Suite 1500, Houston, Texas 77002.
Albert Ortiz, the plaintiff in this cause, hereby supplements his response, in the attached
documents, to Defendants' requests for disclosures.
Respectfully submitted,
/s/ Michael Donovan
Michael Donovan
Texas Bar No. 00796478
6300 Dixie Drive
Houston, TX 77087
(713) 956-4043; (713) 956-4042 fax
ATTORNEY FOR PLAINTIFF
CERTIFICATE OF SERVICE
I certify that on December 26, 2014, a true and correct copy of this document was served
on all parties pursuant to Rule 21 a of the Texas Rules of Civil Procedure.
Attorneys for Defendants:
Joel W. Mohrman/
Stephanie Laird Tolson I
McGlinchey Stafford PLLC
1001 McKinney Street, Suite 1500
Houston, TX 77002
Fax: 713-520-1025
Is/ Michael Donovan
Michael Donovan
RESPONSES TO REQUESTS FOR DISCLOSURE
194.2fc)
The legal1heories and general factual bases of Plaintiff's claims and/or defenses include
the following: 1
The claims and defenses of Plaintiff Ortiz have heretofore been set for1h with supporting
facts in his live pleadings, which are incorporated herein for all purposes. Such pleadings
include 1he following claims set forth in Plaintiff's Tenth Amended Original Petition:
1. Negligent performance of contract (at Paragraph 58)
2. Negligent perfonnance of contract (at Paragraph 59)
3. Breach of contract (at Paragraph 61)
4. Breach of contract (at Paragraph 62)
5. Request for declaratory relief (at Paragraph 63)
6. Punitive damages (at Paragraph 66)
Mr. Ortiz's claims concern the contract between him and Defendant National City Bank
Of Indiana (and any successor) (''Bank"), which consisted of a Note and Deed of Trust related to
1he property at 105 Birdsall, Houston, Texas 77007 (the "Real Property"). The claims are based
on 1he Bank's breach of and failure to comply with that written contract. Such breach consists of
actions and/or omissions which were committed by the Bank and/or parties for which the Bank is
responsible, including its mortgage servicer and agent- National City Home Loan Services, Inc.,
and any successor ("HLS").
The Bank breached and/or negligently performed the parties' contract as follows: 1) it
failed to comply with the notice provisions requiring notices to be sent to Mr. Ortiz at 6300 Dixie
Drive, Houston, Texas 77087; 2) it failed to accept Mr. Ortiz's monthly mortgage payments as
full payment of the amount then due; 3) it wrongfully demanded of, collected from, and/or
assessed on Mr. Ortiz various fees and charges, including late charges, attorney fees, and related
fees when Mr. Ortiz's payments of interest were wrongfully alleged to be overdue; 4) it
wrongfully reported Mr. Ortiz to 1he credit bureaus by alleging he was delinquent or in default
with regard to his interest payments when those payments were not overdue; and 5) it otherwise
violated its obligation, under Chapter 1 of the Texas Business and Commerce Code, to act in
good faith in the performance and enforcement of the parties' contract.
Defendant Bank failed to comply witb the requirements of both Texas law and its
contract with Plaintiff when it failed to provide Plaintiff with notice regarding its purchase of
collateral protection insurance and its resulting increase to Plaintiff's mortgage payment. By
such conduct, Defendant Bank violated or breached its duty to perform its contract with Plaintiff
with care and skill and negligently performed under the contract; such conduct also constitutes
negligence per se in 1hat the Bank violated Texas statutes requiring such notice to be provided to
Plaintiff. Such conduct was a proximate cause of damages to Plaintiff. Defendant Bank
committed such actions at least twice, once when Plaintiff actually already had purchased
1
These disclosures include Ortiz's claims that have not been non-suited or disposed of by the Court and that are not
.listed :in the Court's order of November 12~ 2014. Ortiz is presently .seeking to have this order vacated or set aside
by the court of appea1s and makes these disclosures conditiollal upon prevailing in that proceeding; if successful in
establishing that the appellate court's mandate is not limited, Ortiz intends to take such claims to trial and to re-plead
and try many or all of the non-suited claims. He will then further supplement his discovery as necessary.
collateral protection insurance. As a result, the Banlc wrongfully increased Plaintiffs mortgage
payment and charged him amounts to which it was not entitled, all without notice to Plaintiff.
When Plaintiff failed to pay the increased amount of which he was not aware, the Banlc unjustly
charged him late fees and wrongfully and negatively affected his credit reports.
Defendant Banlc failed to comply with the requirements of both Texas law and its
contract with Plaintiff when it entered the Real Property without Ortiz's consent, changed his
locks at the Real Proper(y, and permanently excluded him from the Real Property. By such
conduct, Defendant Banlc violated or breached its duty to perform its contract with Ortiz with
care and skill and negligently performed under the contract; such conduct also constitutes
negligence per se in that such conduct constitutes criminal violations of Texas statutes. Such
conduct was a proximate cause of damages to Plaintiff. Plaintiff suffered damages in the form of
loss of use of the Real Property. Such conduct also constitutes gross negligence for which
Defendant Bank is liable to Plaintiff for exemplary or punitive damages.
Plaintiffs pleadings further disclose that Ortiz is also entitled to. recover his punitive
damages due to the gross negligence and/or malice of one or more of Defendants in connection
with the wrongful and/or uulawful acts that are the subject of this suit. Such pleadings. further
disclose that Ortiz is also entitled to recover his attorneys' fees pursuant to Chapters 37 and 38 of
the Texas Civil Practice and Remedies Code. Recovery of such fees is based on demand letters
to Defendants, including Plaintiffs demand Jetter to Defendant Banlc, dated December 23, 2014,
which Plaintiff intends to use as an exhibit as evidence in support of his claim for attorney fees
194.2(d)
Plaintiffs economic damages further include the just amount owed to Mr. Ortiz for his
claims against the Bank, which consists of the total oflate charges, attorney fees, and related fees
wrongfully charged to Mr. Ortiz when his payments of interest were wrongfully alleged to be
overdue .. The amount is calculated by totaling all such amounts, which are evidenced by the
exhibits admitted in the first trial that disclose or itemize such amounts.
194.2Ce)
Persons having knowledge of relevant facts are as follows:
Joel Mohrman; Stephanie Laird Tolson; John Verner; 1001 McKinney Street, Suite
1500, Houston, Texas 77002; 713-520-1900. These attorneys work at the law firm of
McGlinchey Stafford, PLLC, and presently represent Defendants and did so at the time that
Defendants' rescission document at issue was concealed from, and then later discovered by or
disclosed to, Plaintiff.
Karl Robinson; 1301 McKinney Street, Suite 3700, Houston, Texas 77010; 713-286-
7161; Dan Patton. 3939 Washington Ave., Suite 203, Houston, Texas 77007; 281-377-3311
These attorneys formerly worked at the law firm of McGlinchey Stafford, PLLC, and
represented Defendants and did so at the time that Defendants' rescission document at issue was
concealed from, and then later discovered by or disclosed to, Plaintiff.
AND ALL PERSONS DISCLOSED BY DEFENDANTS.
194.2(f)
The testimony of previously-designated expert Mark Sikes will include all matters to
which he testified at the first trial of this case as well as all damages related to lost value, rents,
profits, and/or use of the Real Property up to and including through the time of the second trial of
this case, as applicable.
TAB T
• • Filed 10 Aprtl12 P4:56
Loren Jackson - Distrtct Clerk
Hams County
ED101J015140384
By:Charlem Johnson
CAUSE NO. 2006-61178
ALBERT ORTIZ § IN THE DISTRICT COURT
Plaintiff §
vs. §
§
FRED LOMBARDO; § OF HARRIS COUNTY, TEXAS
NATIONAL CITY HOME LOAN SERVICES, §
INC. DBA FIRST FRANKLIN LOAN SERVICES;§
NATIONAL CITY BANK OF INDIANA; §
KEYSTONE ASSET MANAGEMENT, INC., and §
RICHARD HOWELL DBA ALEXANDER §
HUNTER PROPERTIES AKA ALEXANDER §.
HUNTER PROPERTIES, INC. §
Defendants § 164TH JUDICIAL DISTRICT
PLAINTIFF'S EIGHTH AMENDED ORIGINAL PETITION
TO THE HONORABLE JUDGE OF THIS COURT:
Albert Ortiz ("ORTIZ"), Plaintiff in this cause, complains of Fred Lombardo ("Lombardo");
National City Home Loan Services, Inc. d/b/a First Franklin Loan Services ("HLS"), National City
Bank of Indiana ("BANK"), and Keystone Asset Management, Inc. ("Keystone"), the Defendants,
and for causes of action respectfully shows the Court as follows:
DISCOVERY
1. Discovery in this case is intended to be conducted under a Level 2 Discovery
Control Plan pursuant to Rule 190.3 of the Texas Rules of Civil Procedure.
JURISDICTION, VENUE, AND CONDITIONS PRECEDENT
2. This Court has jurisdiction over the claims stated herein in that this Court has
general jurisdiction and specific jurisdiction over the Defendants. The amount claimed by
Plaintiff is within the jurisdictional limits of this Court. Venue is proper in Harris County,
pursuant to Subdivisions (1), (3), and/or (4) of Section 15.002(a) of the Texas Civil Practice and
Remedies Code. Plaintiff generally avers that all conditions precedent to filing the ~!aims herein
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have been performed or have occurred or the conditions· have been excused because of the conduct
·of the Defendants.
PARTIES
3. Plaintiff Albert Ortiz is an individual who resides in Harris County.
4. Each of the Defendants has heretofore appeared by filing an answer in this cause.
NATURE OF ACTION
5. On or about March 15, 2004, Plaintiff ORTIZ purchased a home in Harris County,
Texas. The home in question is located at I 05 Birdsall, Houston, Harris County, Texas 77007 (the
"Real Property") and is legally described as follows to-wit:
.....................•.••..•...................................................
LOT SIX (6), IN BLOCK ONE (I) OF VILLAS OF BAYOU BEND.
A SUBDIVISION IN HARRIS COUNTY, TEXAS, ACCORDING D
TO THE MAP OR PLAT THEREOF RECORDED UNDER FILM
CODE NO. 417080 OF THE MAP RECORDS OF HARRIS
COUNTY, TEXAS .
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6. ORTIZ borrowed $475,000 from lender First Franklin Financial Corp., a subsidiary
of Defendant BANK. The Promissory Note evidencing the loan was subsequently assigned to
Defendant BANK. The loan was collateralized by a Deed of Trust. Both the Promissory Note and
Deed of Trust were signed on or about March 15, 2004. A true and correct copy of the Promissory
Note in question is attached hereto as Exhibit "A" and is incorporated herein by reference, the same
as if fully set forth at length. A true and correct copy of the Deed of Trust in question is attached
hereto as Exhibit "B" and is incorporated herein by reference, the same as if fully set forth at length.
7. Pursuant to the terms of the Promissory Note and Deed of Trust in question, any and
all notices and/or communications to ORTIZ were to be sent to the address of the real property
made the subject of this suit, unless ORTIZ designated- in writing- a different (substitute) address
to lender. In fact, ORTIZ provided such written notification to Defendants contemporaneous With
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his execution of the Promissory Note and Deed of Trust (March 15, 2004). ORTIZ designated his
office address of:
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6300 Dixie Dr.
Houston, TX 77087
ATTN: A. ORTIZ
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This written designation of address to receive Notices was made in writing in accordance with the
terms of the Promissory Note and Deed of Trust. A true and correct copy of the Designation of
Substitute Address (Titled: MAILING ADDRESS CONFIRMATION I PAYMENT LETTER) is
attached hereto as Exhibit "C", and is incorporated herein by reference, the same as if fully set forth
at length.
8. The actions of Defendant HLS giving rise to this lawsuit were undertaken while
HLS served as "Loan Servicer" or "Mortgage Servicer" for and on behalf of Defendant BANK.
HLS specifically serviced the ORTIZ loan, more fully described above for and on behalf of
Defendant BANK. HLS was - at all times complained of herein - acting within the course and
scope of its duties as agent, servant or employee for and on behalf of Defendant BANK. All actions
complained of herein were undertaken at the direction, instruction, approval and/or knowledge of
Defendant BANK.
9. Less than a year into the loan, beginning in early, 2005, a series of disputes arose
between ORTIZ and HLS. Defendant HLS wrongfully accused ORTIZ of not having insurance on
the Real Property and charged ORTIZ for force-placed insurance for several months. HLS also
reported ORTIZ to the credit bureaus for not paying for such insurance and charged him late fees
even though the cost of the insurance was not properly chargeable to ORTIZ.
10. ORTIZ had to hire counsel to have the payment and credit reporting problems
corrected. HLS admitted its mistake and entered into two separate agreements with ORTIZ in
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which HLS and/or BANK agreed to remove the negative credit reporting and re-adjust ORTIZ'S
payments on his mortgage. HLS violated the agreement(s) and continued to wrongfully report him
as paying late for at least one of the months in question. True and correct copies of these
agreements are attached hereto as Exhibits "D" and "E", respectively, and are incorporated herein
by reference, the same as if fully set forth at length.
11. Later in 2005, ORTIZ discovered that he was again being charged for force placed
insurance purchased by HLS and/or BANK and that charges for the insurance were being added to
his monthly mortgage payment. The force placed insurance had again been purchased without any
prior knowledge of ORTIZ. His loan payments again were being applied to pay for the force-placed
insurance. ORTIZ also discovered that his credit report again showed delinquencies with HLS
and/or BANK that were supposed to have been corrected under his agreements with them.
12. Extremely frustrated at this point, ORTIZ advised HLS that he was suspending
making any further monthly mortgage payments until this latest problem was fully resolved. He
made it clear that he was not wholly refusing to pay but was refusing to pay only until the problem
was fully resolved. The problem was not resolved despite substantial efforts by ORTIZ.
13. HLS - rather than honoring its agreements with ORTIZ, and still acting in the course
and scope of its duties as Mortgage Servicer for Defendant BANK - declared the real property
made the basis of this suit "abandoned" by ORTIZ. They locked Ortiz out of his home in or around
Thanksgiving in -November of 2005 and refused to allow Ortiz re-entry into his home .. Without
verification from ORTIZ, Defendant HLS alleged that ORTIZ had abandoned the Real Property
and, without notice to ORTIZ, took possession of the Real Property, had the locks changed, refused
to provide ORTIZ with a key to the new locks, and not once was ORTIZ able to access the Real
Property prior to its foreclosure several months later (more on the foreclosure, below) .
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14. At the time he was locked out of his house by Defendant(s), ORTIZ was in the midst
of extensive renovations and improvements to the Real Property made the basis of this suit. In fact,
ORTIZ did not ever abandon the Real Property and had given notice of this fact to HLS. ORTIZ-
at all times -denied that he ever abandoned the Real Property. He advised HLS of this fact before
the locks were changed and advised them repeatedly thereafter that he had not abandoned the Real
Property.
15. ORTIZ was advised by HLS that he could not gain entry to or possession of the
Real Property until he paid certain amounts on the Real Property that were alleged to have been past
due. Months later, HLS promised to give ORTIZ a key to the Real Property, but HLS then reneged
on the promise.
16. In addition, ORTIZ had various valuable possessions and belongings still locked. up
at the Real Property that he was not been able to retrieve. Such items included various building
materials for the on-going renovations, exercise equipment, and other personal items.
17. Seven months later, on or about the 6th day of June, 2006, Defendants foreclosed·.on
ORTIZ'S home. Defendant BANK purchased ORTIZ'S home at a non-judicial foreclosure
proceeding (Substitute Trustee's Sale). A true and correct copy of the Substitute Trustee's Deed is
attached hereto as Exhibit "F" and is incorporated herein by reference, the same as if fully set forth
at length
18. Prior to and in connection with the foreclosure, Defendants HLS and/or BANK
failed to provide proper notice to ORTIZ as required, including failing to provide proper notices of
default, intent to accelerate the note, acceleration of the note, and notice of the foreclosure sale. All
notices were sent to the wrong address as they were not sent to the address designated by ORTIZ as
the proper address for receipt of notices from Defendants HLS and/or BANK.
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19. Following the foreclosure, Defendant HLS and BANK twice agreed that BANK and
HLS fully released ORTIZ from any and all obligations ORTIZ may have had to his lender
(Defendant BANK), agreed to waive any and all claims and demands of liability or obligation on
the part of ORTIZ and agreed that no further sums would be demanded or litigated (emphasis
added) by lender. The first such waiver was executed on behalf of Defendants on June 27, 2006,
and a second was executed on July 6, 2006. True and correct copies of these agreements are
attached hereto as Exhibits "G" and "If', respectively, and are incorporated herein by reference, the
same as if fully set forth at length.
20. The Real Property was foreclosed upon without Ortiz ever being allowed to regain
possession and/or access to the Real Property prior to it being foreclosed upon. Sometime after the
foreclosure of the Real Property, ORTIZ was finally able to retrieve some of the items, while others
had been removed or stolen from the Real Property and have never been restored to ORTIZ.
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21. Additionally, prior to the foreclosure and the acceleration of the note, Defendant
BANK entered into an oral contract with ORTIZ that it would forbear from foreclosing on the
Real Property and release its lien on the Real Property in return for receipt of the proceeds of
ORTIZ'S sale of the Real Property tO a third party for $330,000, which was the value of the Real
Property according to Defendant BANK's appraisal. Defendant BANK breached and repudiated
the contract and made additional demands of ORTIZ before it would comply with the contract.
After entering the contract, Defendant BANK also later stated that the contract was conditional
upon a final decision as to whether the Real Property was still appraising at $330,000 and/or
whether it would require more than $330,000 to release its lien and forgo the foreclosure.
Defendant BANK later declared that the $330,000 sale price was not enough and then foreclosed
on the Real Property.
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22. Defendant Lombardo is an employee of Defendant HLS, which was attempting to
collect a debt from ORTIZ. Defendant HLS misapplied ORTIZ'S payments, wrongfully charged
him late fees, and wrongfully reported him to the credit bureaus. As a result, ORTIZ for a time
suspended making any further mortgage payments. Defendant HLS later admitted it was wrong to
have charged him the late fees and made negative credit reporting about ORTIZ. Defendant
Lombardo had ORTIZ enter into an agreement with Defendants HLS and BANK in which ORTIZ
would resume payments and Defendants HLS and BANK agreed to correct the late fee charges and
negative credit reporting. Defendant Lombardo assured ORTIZ that he Would personally oversee
the process to make sure the negative credit reporting was removed. ORTIZ fully paid all payments
that had been suspended and became current on his loan. However, ORTIZ'S credit report was
never properly fixed. Defendant Lombardo therefore made false representations to ORTIZ to
collect the debt and violated the Texas DTPA.
23. Defendant Lombardo also slandered the credit of ORTIZ so as to cause ORTIZ to
suffer damage to his credit reputation and other damages. Defendant Lombardo, individually and as
agent for Defendants HLS and BANK, also participated in and/or was responsible, in whole .or in
part, for wrongfully refusing ORTIZ entry or possession of the Real Property unless he made
payments allegedly past due and/or signed a release.
24. Defendant Keystone is an entity that was hired by one or more of the other
Defendants and that had access to and/or possession of the Real Property as it was responsible for
maintaining and/or managing the Real Property after ORTIZ had been locked out of the Real
Property. Defendant Howell is an individual and an agent of Keystone who also had access to,
custody, control and/or possession of the Real Property as he was retained to attempt to market and
sell the Real Property for one or more of the Defendants after it was purchased at foreclosure.
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Plaintiff ORTIZ asserts that, upon further investigation and discovery, the evidence will show that
Defendant Keystone and/or Defendant Howell is liable to ORTIZ based on claims of theft,
conversion, unlawful debt collection, trespass to personalty, trespass, breach of bailment,
negligence, invasion of privacy and/or conspiracy to commit conversion in connection with the
personal property at the Real Property, some of which was never restored to ORTIZ after the
foreclosure of the Real Property. Such acts and/or omissions of Defendants Keystone and/or
Howell were committed as agents of and/or on behalf of Defendants HLS and/or BANK or such
acts and/or omissions were ratified or adopted by and/or the benefits of same were accepted by
Defendants HLS and/or BANK. Defendants HLS and/or BANK are therefore similarly liable for
all of the aforesaid claims of ORTIZ.
25. On October 28, 2008, this Court granted Plaintiff an interlocutory summary
judgment ruling that Defendant BANK'S foreclosure of the Real Property was wrongful and that
title to the Real Property should be restored to Ortiz.
26. Rather than comply with this Court's Order restoring the Real Property in question
to ORTIZ, Defendants still hold possession of same, refuse to allow ORTIZ entry to his home, fail
to restore title to the Real Property into ORTIZ'S name and -in complete disregard of Court Order
and prior Agreements, have chosen to again attempt to not only collect on a debt that no longer is
due and owing, but has sought to "re-foreclose" on ORTIZ'S home.
27. This time, Defendant HLS, acting on behalf of Defendant BANK, demanded that
ORTIZ make house payments for the two-plus years that he had been wrongfully deprived of title to
the Real Property as a result of the wrongful foreclosure. Defendants alleged, among other things,
that ORTIZ again owned the Real Property, even though it would still not let him have possession
of it. Defendants alleged that ORTIZ was in default for not making house payments and insuring
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the Real Property even though Defendant BANK still owned and possessed the Real Property.
Defendant BANK wrongfully held title to the Real Property for well over two years due to its
wrongful foreclosure and then told ORTIZ that because he had not made any mortgage payments to
Defendant BANK while he had been locked out of his house, Defendant BANK was going to
accelerate his note and foreclose on the Real Property yet a second time. A true and correct copy of
Defendants' latest demand Notice to ORTIZ is attached hereto as Exhibit "I" and is incorporated
herein by reference, the same as if fully set fotth at length.
28. When ORTIZ refused to make such payments, Defendant BANK accelerated the ·
Note and again posted the Real Property for foreclosure. ORTIZ made multiple requests to
Defendant BANK that it refrain from proceeding with the threatened foreclosure because of, among
other reasons, the fact that Defendant BANK still held title to fhe Real Property and fhe fact that the
order signed by the Court provided that title to the Real Property should be restored to ORTIZ.;
however, Defendant BANK refused or failed to respond to all such requests.
29. The Real Property was posted for foreclosure sale despite Defendant BANK still
holding title to the Real Property and despite fhe Court's order providing that title to the Real
Property should be restored to ORTIZ. Without notice to or knowledge of ORtiZ, either Defendant
BANK elected to not proceed with the foreclosure sale or there was no buyer of fhe Real Property at
the foreclosure sale. Despite ORTIZ'S multiple requests and his expression of his grave concerns
that the Real Property would again wrongfully being transferred, Defendant BANK refused
ORTIZ'S requests for a copy of a substitute trustee's deed and any other information that would
have evidenced the foreclosure sale, or lack thereof. A true and correct copy of Defendants' Notice
of Substitute Trustee's Sale is attached hereto as Exhibit "J" and is incorporated herein by reference,
the same as if fully set forth at length .
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BREACH OF CONTRACT I DEED OF TRUST
30. Plaintiff ORTIZ realleges and incorporates by reference all of the factual statements
and allegations made hereinabove in this petition. The Note and/or Deed of Trust executed in
connection with the loan for the purchase of the Real Property constitute a valid and enforceable
contract. Ortiz performed, tendered performance of, or was excused from perfonning his
contractual obligations under such contract. The conduct of Defendant BANK as set forth herein
constitutes a breach of contract by said Defendant under Texas law and caused damages to ORTIZ.
31. Defendant BANK failed to comply with the Deed of Trust. Said Defendant
breached the Deed of Trust by wrongfully accusing ORTIZ of abandoning the Real Property, when
ORTIZ gave notice that it had not been abandoned, then taking possession of the Real Property or
causing others to take possession of the Real Property, and changing the locks to exclude ORTIZ
from occupying the Real Property and continuing to exclude him when they knew the Real Property
was not abandoned. Defendant further failed to comply with the Deed of Trust by entering into the
Real Property without notice to ORTIZ, changing the locks to the Real Property without notice to
ORTIZ, refusing to provide ORTIZ with a key to the new locks, and/or ousting, excluding and
dispossessing ORTIZ of the Real Property without notice to ORTIZ, These acts violated the Deed
of Trust as they were not reasonable or appropriate, as required by the Deed of Trust, to protect
Defendant's interest in the Real Property and rights under the Deed of Trust. Defendant further
failed to comply with the Deed of Trust by misapplying payments in violation of the Deed of Trust.
32. Defendant BANK also failed to comply with the Deed of Trust and the requirements
for sending notices to ORTIZ regarding the Deed of Trust, the Real Property, and/or the note
affiliated with same. Prior to and in connection with the foreclosure, Defendants HLS and/or
BANK failed to provide proper notice to ORTIZ as required, including failing to provide proper
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notices of default, intent to accelerate the note, acceleration of the note, and notice of the foreclosure
sale. All notices were sent to the wrong address as they were not sent to the address designated by
ORTIZ as the proper address for receipt of notices from Defendants HLS and/or BANK. Because it
did not follow the provisions and requirements of the deed of trust, Defendant BANK failed to
conduct the foreclosure sale properly and, thus, violated the contract executed between the parties.
33. Defendant BANK also entered into an oral contract with ORTIZ that it would
forbear from foreclosing on the Real Property and release its lien on the Real Property in return for
receipt of the proceeds of ORTIZ'S sale of the Real Property to a third party for $330,000, which
was the value of the Real Property according to Defendant's appraisal. Such contract constituted a
valid and enforceable contract. ORTIZ perfonned, tendered perfonnance of, or was excused from
performing his contractual obligations under such contract. Said Defendant breached the contract.
Defendant repudiated the contract and made additional demands of ORTIZ before it would comply
with the contract. After entering the contract, Defendant also later stated that the contract was
conditional upon a final decision as to whether the Real Property was still appraising at $330,000
and/or whether it would require more than $330,000 to release its lien and forgo the foreclosure.
Defendant subsequently breached the contract by declaring that the $330,000 sale price was not
enough and then foreclosing on the Real Property.
FRAUD/FRAUDULENTUNDUCEMENT
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34. Plaintiff ORTIZ realleges and incorporates by reference all of the factual
statements and allegations made hereinabove in this petition. The conduct of Defendant BANK
and/or Defendant HLS constitutes fraud and/or fraudulent inducement by said Defendants under
Texas law and caused damages to ORTIZ.
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35.
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ORTIZ alleges that, upon further investigation and discovery, the evidence will
show that said Defendant(s) constitutes fraud and/or fraudulent inducement in that said
Defendant(s) entered into the oral contract with ORTIZ knowing at the time that their promise to
perform was false and that they had no intention of performing. Defendant(s) had a duty to refrain
from inducing ORTIZ to enter into a contract by using a false representation. Defendant(s) made a
material representation; the representation was false; when the representation was made,
Defendant(s) knew it was false or made it recklessly without any knowledge of the truth and as a
positive assertion; Defendant(s) made the representation with the intent that ORTIZ should act
upon it; ORTIZ acted in reliance on the representation; and ORTIZ thereby suffered injury.
ORTIZ entered into a binding contract based on Defendant(s) false representation. The binding
contract was the Defendant BANK's oral contract with ORTIZ that it would forbear from
foreclosing on the Real Property and release its lien on the Real Property in return for receipt of
the proceeds of ORTIZ'S sale of the Real Property to a third party for $330,000, which was the
value of the Real Property according to Defendant's appraisal. Pleading further, ORTIZ alleges
fraudulent conduct on the part of the Defendant(s). The above-described wrongful conduct by
Defendant(s) constitutes fraud as it is the successful employment of deception, cunning, or
artifice to circumvent, cheat, or defraud ORTIZ to his injury.
PROMISSORY ESTOPPEL
36. Pleading in the alternative, and without waiving the foregoing, ORTIZ alleges
Defendants BANK and/or HLS are liable under the theory of promissory estoppel in that said
Defendant(s) made the above-described promise to ORTIZ that they would not foreclose on and
would release their lien on the Real Property in return for receipt of the proceeds of ORTIZ'S
sale of the Real Property to a third party for $330,000, which was the value of the Real Property
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according to Defendant's appraisal.
•
It was reasonably foreseeable to said Defendant(s) that
ORTIZ would rely on the promise, ORTIZ did reasonably and substantially rely on the promise
to his detriment in electing to forgo reinstating the loan to prevent the foreclosure, and injustice
can only be avoided by enforcing the promise of said Defendant(s).
WRONGFUL FORECLOSURE I DTPA VIOLATION
37. Plaintiff ORTIZ realleges and incorporates by reference all of the factual
statements and allegations made hereinabove in this petition. The subsequent foreclosure upon
the Real Property constituted a wrongful foreclosure by Defendants HLS and/or BANK under
Texas law. Defendants posted the Real Property for foreclosure and foreclosed upon the Real
Property on June 6, 2006. Ortiz alleges that the foreclosure upon the Real Property was
wrongful and as a result, the foreclosure sale and the trustee's deed evidencing the sale is void.
Prior to and in connection with the foreclosure, Defendants HLS and/or BANK failed to provide
proper notice to ORTIZ as required, including failing to provide proper notices of default, intent to
accelerate the note, acceleration of the note, and notice of the foreclosure sale. All notices were sent
to the wrong address as they were not sent to the address designated by ORTIZ as the proper
address for receipt of notices from Defendants HLS and/or BANK. Such failures concerning
notices constitute a defect in the foreclosure proceedings and/or an irregularity in the conduct of the
foreclosure sale.
38. ORTIZ further alleges that he was not in default so as to justify foreclosure, that
he justifiably suspended his performance, that said Defendants' actions constituted a material
breach discharging him of further performance and/or said Defendants' conduct estopped them
·from the remedy of foreclosure. Said Defendant(s)' foreclosure was also wrongful because
equity prevented acceleration of ORTIZ'S debt under the facts of this case due to the conduct of
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said Defendant(s). Defendant(s) misapplied ORTIZ'S payments, wrongfully locked ORTIZ out
of the Real Property, permanently excluded him from it, and took over possession of it.
Defendant(s) took possession and/or control of ORTIZ'S personalty, deprived him of it,
attempted to sell it, and refused for months demands to return it until finally allowing ORTIZ to
recover some of it while some of it was denied and some of it was damaged. Defendant(s)
agreed and/or promised to forebear from foreclosing on the Real Property and to release its lien
on the Real Property in return for receipt of the proceeds of ORTIZ'S sale of the Real Property to
a third party for '$330,000, which was the vitlue of the Real Property according to Defendant's
appraisal, and then failed to comply with the contract and/or fulfill the promise and/or the
contract was made with no intention of performing it and the time it was made. Moreover,
Defendants exercised the option to accelerate, not for the purpose of protecting the debt or
preserving the security therefor given that Defendants had dispossessed ORTIZ of and secured
the Real Property and at the time already had entered an agreement to receive approximately 70
percent of the debt years before its maturity. In light of the facts of this case, even if ORTIZ was
in default, which he denies, the default was the result of Defendants' conduct and the
acceleration of ORTIZ'S mortgage was wrongful as it was inequitable, unfair, unreasonable,
unjust, oppressive, fraudulent and/or in bad faith. Such foreclosure based on an absence of default
by ORTIZ or a default that was the result of Defendants' conduct, as well as the wrongful
acceleration of ORTIZ'S mortgage, constitutes a defect in the foreclosure proceedings and/or an
irregularity in the conduct of the foreclosure sale.
39. ORTIZ seeks to have the Court set aside the foreclosure sale and to recover title
to the Real Property. The conduct of said Defendant(s) described above and in locking him out
and dispossessing him of the Real Property prior to foreclosure further constitutes an
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unconscionable action or course of action under the Texas Deceptive Practices-Consumer
Protection Act ("DTPA") that was a producing cause of damages to ORTIZ and for which said
Defendant(s) are liable to ORTIZ under the DTPA. ORTIZ is a consumer under the DTPA, and
said Defendant(s) can be sued under the DTPA. Said Defendant(s) conduct constitutes an
unconscionable action or course of action in violation of and actionable under Section 17.50 of
the DTPA and/or false, misl~ading, or deceptive acts or practices in the conduct of trade or
commerce that are unlawful and in violation of Section 17.46 of the DTPA. As a result, under
the DTPA, ORTIZ seeks up to three times his damages for Defendants' knowing and/or
intentional unlawful conduct. ORTIZ alleges a cause of action for violation of the DTPA against
said Defendant(s), seeking to recover for all damages caused thereby, including actual damages,
statutory damages, or both.
UNLAWFUL DEBT COLLECTION I FRAuD
40. The above-described conduct of Defendants HLS, BANK, Lombardo and/or
Keystone constitutes a violation of the Texas debt collection statutes as well as unreasonable and
unfair debt collection in violation of the common law of the state of Texas.
41. The wrongful changing of locks at and/or entry to the Real Property, the ouster,
exclusion, and dispossession of ORTIZ from the Real Property, and/or wrongful removal and
and/or retaining of ORTIZ'S personal property by one or more of said Defendants involved
fraudulent or misleading representations, deceptive means, and/or coercion or attempted coercion
by violence and/or criminal action, including criminal trespass and/or theft. Defendants HLS
and/or BANK and Defendants Keystone and/or Lombardo, as agents of Defendants HLS and/or
BANK. engaged in such action in attempting to collect a debt or alleged debt of ORTIZ and thus
violated Chapter 392 of the Texas Finance Code (the Texas Debt Collection Practices Act .or
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DCPA), including Section 392.301 of the DCPA. Such a violation is also actionable under the
Texas Consumer Protection-Deceptive Practices Act (DTPA). Under the DTPA, ORTIZ seeks
up to three times his damages for Defendants' knowing and/or intentional unlawful conduct.
ORTIZ alleges a cause of action for violation of the DCPA and/or the DTPA against said
Defendant(s), seeking to recover for all damages caused thereby, including his actual damages,
statutory damages, or both. Such action, along with Defendant(s)' actions in wrongfully refusing
ORTIZ entry or possession of the Real Property unless he made payments allegedly past due
and/or signed a release, also constitutes an unfair and unreasonable debt collection practice that
is prohibited by and actionable under Texas common law for which ORTIZ seeks to recover his
damages from said Defendant(s).
Furthermore, said Defendant(s) entered into the Real Property without notice to ORTIZ,
changed the locks to the Real Property without notice to ORTIZ, refused to provide ORTIZ with a
key to the new locks, and/or ousted, excluded and dispossessed ORTIZ of the Real Property without
notice to ORTIZ, These acts were deceptive, fraudulent, and/or misleading practices by said
Defendant(s) and employed the use of false representations or deceptive means. Said Defendant (s)
engaged in such action in collection of an actual or alleged consumer debt of ORTIZ and thus
violated Chapter 392 of the Texas Finance Code (the Texas Debt Collection Practices Act or
DCPA), including Section 392.304 of the DCPA. Such a violation is also actionable under the
Texas Consumer Protection-Deceptive Practices Act (DTPA). Under the DTPA, ORTIZ seeks up
to three times his damages for Defendants' knowing and/or intentional unlawful conduct. ORTIZ
alleges a cause of action for violation of the DCPA and/or the DTPA against said Defendant(s),
seeking to recover for all damages caused thereby, including his actual damages, statutory damages,
or both. Such actions also constitute an unfair and unreasonable debt collection practice that is
Page 16 of 30
:01224
• •
prohibited by and actionable under Texas common law for which ORTIZ seeks to recover his
damages from said Defendant(s).
Moreover, said Defendant(s) actions also constitute fraud by omission and/or fraudulent
conduct in that said Defendant(s) failed to inform or notify ORTIZ prior to their entry to the Real
Property and their lock-out, ouster, exclusion and/or dispossession of ORTIZ from the Real
Property that they intended to exercise their purported rights or remedies under the Deed of Trust
concerning securing of the Real Property and protecting their rights or interests related thereto.
Such omissions constituted false representations, said Defendant(s) knew they were false when
made, said Defendant(s) intended ORTIZ to act on such representations, ORTIZ relied on such
representations to his detriment and suffered damages as a result. Pleading further, ORTIZ alleges
fraudulent conduct on the part of said Defendant(s). The above-described wrongful conduct by said
Defendant(s) constitutes fraud as it is the successful employment of deception, cunning, or artifice
to circumvent, cheat, or defraud ORTIZ to his injury. ·
42. Plaintiff ORTIZ realleges and incorporates by reference all of the factual statements
and allegations made hereinabove in this petition. Shortly after the Court granted an interlocutory
summary judgment in this cause stating that title to the Real Property was restored to ORTIZ,
Defendant HLS, acting on behalf of Defendant BANK, sent notices to ORTIZ that it was again
threatening to accelerate his Note and to post the Real Property for foreclosure sale due to alleged
default by ORTIZ. This time, Defendant HLS demanded that ORTIZ make house payments for the
two-plus years that he had been wrongfully deprived of title to the Real Property as a result of the
wrongful foreclosure. When ORTIZ refused to make such payments, Defendant BANK stated that
it had accelerated the Note and again posted the Real Property for foreclosure .
•••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••
Page 17 of 30
:01225
• •
43. Defendants HLS and BANK informed ORTIZ that, because he had not made any
mortgage payments to Defendant BANK while he had been locked out of his house and deprived of
title to the Real Property for well over two years due to Defendant(s)' wrongful foreclosure,
Defendant BANK was going to again accelerate his note and foreclose on the Real Property. Such
wrongful conduct of said Defendants involved fraudulent, false, or misleading representations,
deceptive means, and/or coercion or attempted coercion in attempting to collect a debt or alleged
debt of ORTIZ. Such conduct also threatened action prohibited by law and the waivers executed by
Defendants. Furthermore, by such conduct, Defendant HLS and Defendant Bank were unfairly and
unconscionably attempting to collect interest or a charge, fee, or expense incidental to the Note
and/or Deed of Trust that was not expressly authorized by same or was not legally chargeable to
ORTIZ. Moreover, Defendants HLS and Bank committed fraudulent, deceptive or misleading debt
collection violations by misrepresenting the character, extent, or amount of ORTIZ'S Note balance,
or misrepresenting the status of ORTIZ'S Note balance in this judicial proceeding in that they
alleged that ORTIZ was obligated for further payments on the Note even after said Defendants
waived all such payments and agreed ORTIZ was not so obligated.
Furthermore, said Defendant(s) threatened to accelerate ORTIZ'S note and foreclose on him
again even though they knew that ORTIZ no longer owned the Real Property at the time. These
acts were deceptive, fraudulent, and/or misleading practices by said Defendant(s) and employed the
use of false representations or deceptive means. In connection with such debt collection, said
Defendant(s) also demanded usurious amounts and/or unfairly or unconscionably engaged in
collecting or attempting to collect interest or a charge, fee, or expense incidental to the obligation
that was not expressly authorized by the agreement creating the obligation or legally chargeable to
ORTIZ, and further falsely accused and/or threatened to falsely accuse one or more persons of fraud
Page 18 of30
:01226
• •
and/or the commission of a crime. Said Defendant (s) engaged in such action in collection of an
actual or alleged consumer debt of ORTIZ and thus violated Chapter 392 of the Texas Finance
Code (the Texas Debt Collection Practices Act or DCPA), including Sections 392.30 l, 392.303, and
392.304 of the DCPA. Such a violation is also actionable under the Texas Consumer Protection-
Deceptive Practices Act (DTPA). Under the DTPA, ORTIZ seeks up to three times his damages for
Defendants' knowing and/or intentional unlawful conduct. ORTIZ alleges a cause of action for
violation of the DCPA and/or the DTPA against said Defendant(s), seeking to recover for all
damages caused thereby, including his actual damages, statutory damages, or both. Such actions
also constitute an unfair and unreasonable debt collection practice that is prohibited by and
actionable under Texas common law for which ORTIZ seeks to recover his damages from said
Defendant(s).
Defendant HLS and Defendant BANK engaged in such action and thus violated Chapter
392 of the DCPA, including Sections 392.301, 392.303, and 392.304 of the DCPA. Such a
violation is also actionable under the DTPA, per Section 392.404 of the DTPA. Under the DTPA,
ORTIZ seeks up to three times his damages for Defendants' knowing and/or intentional unlawful
conduct. ORTIZ alleges a cause of action for violation of the DCPA and/or the DTPA against said
Defendant(s), seeking to recover for all damages caused thereby, including his actual damages,
statutory damages, or both. Such action also constitutes an unfair and unreasonable debt collection
practice that is prohibited by and actionable under Texas common law for which ORTIZ seeks to
recover his damages from said Defendant(s).
TRESPASS TO REALTY
44. Plaintiff ORTIZ realleges and incorporates by reference all of the factual statements
and allegations made hereinabove in this petition. The above-described conduct of Defendants
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:0:1227
• •
HLS, BANK, and/or Keystone constitutes a trespass. ORTIZ owned and had a lawful right to
possess the Real Property. Defendants HLS, BANK, and/or Keystone are liable to ORTIZ for the
intentional tort of trespass upon realty by entering the Real Property without ORTIZ'S consent,
intentionally causing one or more third persons to enter the Real Property, and/or entering or
causing others to enter the Real Property in excess of any authority to enter the Real Property. Such
entry was physical, intentional, and voluntary. ORTIZ was wholly deprived of any possession of
the Real Property and was permanently locked out for several months while he still owned the Real
Property up until its foreclosure in June of 2006. Such action exceeded any authority conferred on
Defendants by the Deed of Trust or otherwise. Such action of Defendants interfered with and/or
caused injury to ORTIZ'S right of possession of the Real Property and thus constitutes a trespass.
ORTIZ alleges a cause of action for trespass against said Defendant(s), seeking to recover for
damage to his realty and/or loss of the use and enjoyment of same.
CONVERSION AND TRESPASS TO PERSONALTY
45. Plaintiff ORTIZ realleges and incorporates by reference all of the factual statements
and allegations made hereinabove in this petition. The above-described conduct constitutes
conversion of ORTIZ'S personal property and/or trespass to personalty by Defendants HLS and/or
BANK. ORTIZ owned, possessed, or had the right to immediate possession of the items and
belongings located at the Real Property. Such property was personal property. All items located at
the Real Property, including all items identified by ORTIZ in response to Defendants' discovery
requests in this cause, were converted by and/or the subject of the trespass to personalty committed
by Defendants HLS and/or BANK. Said Defendant(s) have engaged in an unauthorized and
wrongful assumption and exercise of control and dominion over the personal property of ORTIZ, to
the exclusion of or inconsistent with his rights in the property as its true owner. Said Defendant(s)
Page 20 of30
:01228
• •
have injured ORTIZ'S personalty or interfered with his possession of same, unlawfully. As a direct
and proximate result of such wrongful conduct, ORTIZ has been damaged to the effect that he no
longer has the personal property at issue and has lost the benefit of its use. Said Defendant(s)
should be held liable for such conversion, and the Court should order that said Defendant(s) return
the personal property converted or pay ORTIZ damages such that he will be compensated for loss of
such personal property. ORTIZ therefore asserts an action to recover the personal property, and
alternatively for damages suffered as a result of the conversion.
CONVERSION AND TRESPASS TO PERSONALTY
46. Plaintiff ORTIZ realleges and incorporates by reference all of the factual statements
and allegations made hereinabove in this petition. Plaintiff ORTIZ pleads and alleges that, upon
further investigation and discovery, the evidence will show that Defendant Keystone and/or
Defendant Howell is liable to ORTIZ for trespass to personalty, conversion and/or conspiracy. to
commit conversion in connection with the personal property at the Real Property that was never
restored to ORTIZ after the foreclosure of the Real Property. It is alleged that the evidence Will
show that said Defendant(s) have engaged in an unauthorized and wrongful assumption and
exercise of control and dominion over the personal property of ORTIZ, to the exclusion of or
inconsistent with his rights in the property as its true owner and/or that said Defendant(s) have
injured ORTIZ'S personalty or interfered with his possession of same, unlawfully. As a direct and
proximate result of such wrongful conduct, ORTIZ has been damaged to the effect that he no longer
has the personal property at issue and has lost the benefit of its use. Said Defendant(s) should be
held liable for such conversion, and the Court should order that said Defendant(s) return the
personal property converted or pay ORTIZ damages such that he will be compensated for loss of
such personal property. ORTIZ therefore asserts an action to recover the personal property, and
Page 21 of30
:01229
• •
alternatively for damages suffered as a result of the conversion. ORTIZ pleads and alleges that said
Defendant(s) is liable to ORTIZ for conspiracy to commit conversion. ORTIZ alleges that, upon
further investigation and discovery, the evidence will show that said Defendant(s) conspired with
Defendant HLS and/or BANK with respect to the conversion of such Defendant(s) in that
Defendant Keystone and/or Defendant Howell assisted, encourage, or participated with the
conversion of such Defendant(s).
THEFT
47. Plaintiff ORTIZ real leges and incorporates by reference all of the factual statements
and allegations made hereinabove in this petition. Upon further investigation and discovery, the
evidence will show that the above-described conduct constitutes theft of ORTIZ'S personal property
by Defendants HLS, BANK, Keystone and/or Howell for which they are liable to ORTIZ pursuant
to Chapter 134 of the Texas Civil Practice and Remedies Code, the Texas Theft Liability Act. Said
Defendant(s) have engaged in theft by unlawfully appropriating the perspnal property of ORTIZ by
taking it without Ortiz's effective consent, as described by the Penal Code. ORTIZ had a
possessory right to the property that was the subject of such theft. Said DCtendant(s) appropriated
the property with the intent to deprive ORTIZ of the property. Said Defendant(s) violated Section
31.03 of the Texas Penal Code. As a direct and proximate result of such wrongful conduct, ORTIZ
has been dam~ged and seeks to recover from said Defendant(s) the amount of his actual damages
and, in addition thereto, damages not to exceed $1,000.00 for each such theft, in accord with the
Texas Theft Liability Act. Said Defendant(s) should be held liable for such theft and all such
damages; ORTIZ therefore asserts an action for same.
UNLAWFUL DEBT COLLECTION
•••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••
Page 22 of30
---··``----
48.
• •
Plaintiff ORTIZ realleges and incorporates by reference all of the factual statements
and allegations made hereinabove in this petition. · Defendant Lombardo's wrongful conduct
constitutes an unfair debt collection practice in violation of Section 392.304 of the DCPA and, per
392.404 of the DCPA, constitutes a violation of the Texas DTPA, and said Defendant is therefore
liable to ORTIZ for all damages of ORTIZ that were caused by the wrongful actions of said
Defendant, including ORTIZ'S actual damages, statutory damages, or both.. Defendant
Lombardo's wrongful conduct caused injury to ORTIZ'S credit, and said Defendant is therefore
liable to ORTIZ for all such damages of ORTIZ that were caused by the wrongful actions of said
Defendant. As a result, under the DTPA, ORTIZ seeks up to three times his damages for
Defendants' knowing and/or intentional unlawful conduct. ORTIZ alleges a cause of action for
violation of the DTPA against said Defendant(s), seeking to recover for all damages caused thereby,
including actual damages, statutory damages, or both.
BREACH OF BAILMENT
49. Plaintiff ORTIZ realleges and incorporates by reference all of the factual statements
and allegations made hereinabove in this petition. A bailor-bailee relationship and implied bailment
contract existed between ORTIZ and Defendants Howell, Keystone, HLS and/or BANK in that
Howell, acting individually and/or as agent for or on behalf of one or more of the other Defendants,
knowingly took possession, custody, and/or control of ORTIZ'S personalty, thereby creating an
implied bailment. The property that was the subject of the bailment agreement included all items
located at the Real Property, including all items identified by ORTIZ in response to Defendants'
discovery requests in this cause, All parties to the bailment contract were to benefit. Defendants
Howell, Keystone, HLS and/or BANK owed a duty to exercise ordinary care with respect to
ORTIZ'S personal property. Said Defendant(s) committed a breach of their bailment obligations
Page 23 of30
:01231
• •
and ORTIZ is entitled to recover and makes a claim for his damages incurred as a result. ORTIZ
seeks recovery of his damages in connection with his personalty that was not returned to him and
his personalty that was returned in a damaged state caused by the negligence of Defendants Howell,
Keystone, HLS and/or BANK.
NEGLIGENCE
50. Plaintiff ORTIZ realleges and incorporates by reference all of the factual statements
and allegations made hereinabove in this petition. Defendant Howell, acting individually and/or as
agent for or on behalf of one or more of the other Defendants, knowingly took possession, custody,
and/or control of ORTIZ'S personalty, In so doing Defendants Howell, Keystone, HLS and/or
BANK had a duty to use reasonable care in handling, protecting and/or preserving the personalty
and/or maintaining custody, control, and/or possession of the personalty. Defendants Howell,
Keystone, HLS and/or BANK breached that duty and proximately caused damages to ORTIZ when
it allowed ORTIZ'S personalty to become lost or datnaged. ORTIZ pleads a claim for negligence
against Defendants Howell, Keystone, HLS and/or BANK and seeks recovery of his damages
resulting therefrom.
INVASIONOFPRIVACY
51. Plaintiff ORTIZ realleges and incorporates by reference all of the factual statements
and allegations made hereinabove in this petition. The above-complained of acts of Defendants
Keystone, HLS and/or BANK and/or of Defendant Howell, acting individually and/or as agent or
on behalf of one or more of the other Defendants, involving ORTIZ'S personalty and/or realty
constituted an invasion of privacy against ORTIZ as they were an intentional intrusion, physically
or otherwise, upon ORTIZ'S solitude, seclusion, or private affairs or concerns, which would be
highly offensive to a reasonable person. ORTIZ'S invasion of privacy claim thus includes an
Page 24 of30
:0:1232
• •
intrusion on seclusion by said Defendant(s). Defendants Howell, Keystone, HLS and/or BANK
committed an invasion of privacy and ORTIZ is entitled to recover and makes a claim for his
damages, including mental anguish or suffering, incurred as a result.
BREACH OF CONTRACT I WAIVER LETTER AGREEMENTS
52. Plaintiff ORTIZ realleges and incorporates by reference all of the factual statements
and allegations made hereinabove in this petition. ORTIZ entered into contracts with Defendants
HLS and BANK when they executed Jetter agreements with ORTIZ. Such agreements are valid,
enforceable contracts and constitute valid covenants not to sue and/or releases. ORTIZ performed,
tendered performance of, or was excused from performing his obligations under such contracts. By
such contracts, said Defendants agreed to release and waive all claims against ORTIZ concerning
the Real Property and ORTIZ'S Note and/or Deed of Trust executed in connection with fhe loan for
the purchase of the Real Property. Said Defendants further agreed that they would not demand or
litigate any further sums from ORTIZ. Said Defendants failed to comply wifh the contracts by
litigating claims against ORTIZ in this cause, including claims for further sums they alleged were
due from ORTIZ, and by making demand for further sums from ORTIZ. The conduct of said
Defendants constitutes a breach of contract by said Defendants under Texas law and caused
damages to ORTIZ.
REQUEST FOR DECLARATORY RELIEF
53. Plaintiff ORTIZ realleges and incorporates by reference all of the factual statements
and allegations made hereinabove in fhis petition. ORTIZ requests that fhe Court declare that
ORTIZ owes no further debt whatsoever to Defendant BANK under his note and deed of trust with
BANK or otherwise, regardless of whether this Court sets aside the foreclosure sale of the Real
Property and provides for ORTIZ'S recovery of title to the Real Property. After ORTIZ filed suit
Page 25 of 30
:01233
• •
against Defendant BANK to challenge the foreclosure of the Real Property, Defendant BANK
entered into an agreement with ORTIZ in which it released ORTIZ from and/or waived any debt
that ORTIZ may have owed to BANK in connection with its loan to ORTIZ or otherwise.
However, Defendant BANK contends the release and/or waiver applies only as to any deficiency on
the note subsequent to the foreclosure and does not prevent it from foreclosing its lien under the
Deed of Trust after title is fully restored to ORTIZ. Thus, a conflict exists regarding this issue and
the agreement and waiver existing between the parties. ORTIZ requests a declaratory judgment that
ORTIZ owes no further debt whatsoever to Defendant BANK under his note and deed of trust with
BANK or otherwise and that BANK has no, and is prohibited from attempting to pursue or enforce
any, further claims or demands of any kind against ORTIZ related to the Real Property, regardless
of whether this Court sets aside the foreclosure sale of the Real Property and provides for ORTIZ'S
recovery of title to the Real Property. ORTIZ requests a declaratory judgment to resolve this
controversy and remove the resulting uncertainty. See Tex. Civ. Prac. & Rem. Code Ann.
§§37.003, 37.004.
54. Plaintiff ORTIZ realleges and incorporates by reference all of the factual statements
and allegations made hereinabove in this petition. ORTIZ further requests, under Chapter 37 of the
Texas Civil Practice and Remedies Code, that the Court declare that:
•••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••
1. Based on the waiver agreements that are the subject of this suit, ORTIZ is entitled to title
to the Real Property, free and clear of any liens by Defendants, including, but not limited
to those arising from the Promissiory Note and Deed of Trust made the subject of this
suit.
2. Defendants are not entitled to judicial or non-judicial foreclosure of the Real Property
upon title to the Real Property being fully and finally restored to Ortiz.
3. The waiver agreements that are the subject of this suit do not fail for "lack of
consideration``
Page 26 of 30
:0:1234
• •
4. There was no fraud or any violation of any ethics rule governing attorneys committed in
connection with Defendants' execution of the waiver agreements that are the subject of
this suit.
QUIET TITLE CLAIM
55. Plaintiff ORTIZ realleges and incorporates by reference all of the factual statements
and allegations made hereinabove in this petition. ORTIZ requests that the Court cancel the Deed
of Trust related to the Real Property and, upon title to the Real Property being fully and finally
restored to ORTIZ, remove the cloud on the title to the Real Property created by said Deed of Trust.
DEFAMATION PER SE
56. Plaintiff ORTIZ realleges and incorporates by reference all of the factual statements
and allegations made hereinabove in this petition. ORTIZ alleges a cause of action, upon
information and belief, against Defendant(s) for defamation per se. ORTIZ alleges that, upon
further investigation and discovery, the evidence will show that Defendant(s) made one or more
false statements to third parties about ORTIZ that constitute defamation per se. Such statement(s)
were defamatory because they tend to injure ORTIZ'S reputation and thereby expose him to public
hatred, contempt, ridicule, or financial injury or to impeach his honesty, integrity, virtue, or
reputation and/or the words are so obviously hurtful to ORTIZ'S reputation that they require no
proof of their injurious character to make them actionable. Upon information and belief, such
statement(s) would include without limitation falsely stating that ORTIZ failed and/or refused to
pay a debt without justification or excuse or otherwise defaulted on his Note or Deed of Trust,
falsely stating that ORTIZ abandoned the Real Property, falsely stating that the Real Property was
subject to a valid foreclosure, and/or falsely stating that ORTIZ was properly locked-out of, ousted,
excluded and/or dispossessed of the Real Property. General damages are presumed without
requiring specific evidence of harm to ORTIZ'S reputation thereby entitling him to recover, at a
minimum, nominal damages. ORTIZ alleges a cause of action against Defendant(s) for the
Page 27 of30
:01235
• •
defamatory per se statements and is entitled to recover actual damages for injury to his reputation
and for mental anguish.
PUNITIVE DAMAGES
57, Plaintiff ORTIZ realleges and incorporates by reference all of the factual statements
and allegation made hereinabove in this petition. Defendants' actions against ORTIZ were done
with malice and/or the committing of fraud. Defendants are therefore liable to ORTIZ for punitive
damages within the jurisdictional limits of the Court.
ATTORNEYS' FEES
58. Plaintiff ORTIZ realleges and incorporates by reference all of the factual statements
and allegation made hereinabove in this petition. As a result of Defendant BANK's failure to
comply with the Deed of Trust, ORTIZ retained an attorney to prosecute his claims. Ortiz is
entitled to an award of attorneys' fees for prosecution of this action under the DTPA, Chapter 392
of the Texas Finance Code, Chapters 37 and/or 38 of the Texas Civil Practice and Remedies Code,
and/or Chapter 134 of the Texas Civil Practice and Remedies Code. ORTIZ is also entitled to an
award of attorneys' fees under Chapter 37 of the Texas Civil Practice and Remedies Code for
defending against Defendant(s)' claims for declaratory judgment brought thereunder. ORTIZ is
entitled to a further award of attorneys' fees should a party appeal and final judgment ultimately be
awarded in favor of ORTIZ. Should it be necessary for a party to petition the Texas Supreme Court
for review, ORTIZ further requests that, upon final judgment for ORTIZ, the Court award an
additional amount as attorneys' fees for representing ORTIZ during such review.
PRAYER
WHEREFORE, PREMISES CONSIDERED, Plaintiff ORTIZ respectfully requests of the
Court the following:
•••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••
Page 28 of 30
:0123S
• •
1. Judgment against Defendants for all damages, including mental anguish, actual,
economic, statutory, consequential and exemplary damages, in a sum within the jurisdictional limits
of the Court and not in excess of $50,000,000.00;
2. Judgment against Defendant BANK setting aside the foreclosure sale of the Real
Property and providing for ORTIZ'S recovery of title to the Real Property.
3. Judgment against Defendant BANK declaring that ORTIZ owes no further debt
whatsoever to Defendant BANK under his note and deed of trust with BANK or otherwise,
regardless of whether this Court sets aside the foreclosure sale of the Real Property and provides for
ORTIZ'S recovery of title to the Real Property.
4. Judgment against Defendants for recovery of personal property of ORTIZ that was
converted;
5. Prejudgment interest as provided by law;
6. Interest after judgment as allowed by law until paid;
7. All costs of suit and attorneys' fees; and
•••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••
8. Such other and further relief, in law and in equity, to which Plaintiff ORTIZ may be
entitled .
•••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••
Respectfully submitted,
THE JUNELL LAW FIRM, P.C.
/s/ Mark A. Junell
Mark A. Junell (SBN 24032610)
3900 Essex, Suite 390
Houston, Texas 77027
281-768-3530 Phone
832-213-1830 Fax
mark@sandersjune\1.com
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:01237
• •
ATTORNEYS FOR PLAINTIFF
CERTiFICATE OF SERVICE
I certify that a true and correct copy of the foregoing document has been served in
accordance with the Texas Rules of Civil Procedure upon the following on this the 12th day
April, 2010:
Via Facsimile
Daniel Patton/Kari S. Robinson
McGlinchey Stafford PLLC
1001 McKinney Street, Suite 1500
Houston, TX 77002
Facsimile: 713-520-1025
Via Facsimile
Kristin Brauchle
Brockman, Brauchle & Evans, PLLC
2020 Southwest Freeway, Ste 323
Houston, Texas 77098
Facsimile: 713-533-0303
/s/ Mark A. Junell
..............•....................................................•.......••• ,
Page 30 of30
:01.238
TAB U
1
1 REPORTER'S RECORD
2 TRIAL COURT CAUSE NO. 2006-61178
3
4
5 ALBERT ORTIZ IN THE DISTRICT COURT
6
7 vs. HARRIS COUNTY, TEXAS
8
9 FRED LOMBARDO 164TH JUDICIAL DISTRICT
10
11
12
13
14 MOTIONS HEARING
15
16
17
18
19 On the 31st day of October, 2014, the following
20 proceedings came on to be held in the above-titled and
21 numbered cause before the Honorable Alexandra Smoots-Hogan,
22 Judge Presiding, held in Houston, Harris County, Texas.
23 Proceedings reported by computerized stenotype machine.
24
25
2
1 APPEARANCES
2
3
MR. GARY MICHAEL BLOCK
4 SBOT NO. 02497200
Gary Block Attorney At Law
5 6942 Fm 1960 Rd E #132
Humble, TX 77346
6 Telephone: 713-443-7722
7 AND
8 MR. MICHAEL CHALAN DONOVAN
Law Offices of Michael Chalan Donovan
9 SBOT NO. 00796478
6300 Dixie Drive
10 Houston, TX 77087
Telephone: 713-956-4043
11
12 Counsel for Plaintiff
13
14
15 MR. JOEL W. MOHRMAN
SBOT NO. 14253500
16 MS. STEPHANIE LAIRD 'STEPHANIE TOLSON' TOLSON
SBOT NO. 11795430
17 McGlinchey Stafford
1001 McKinney St Ste 1500
18 Houston, TX 77002
Telephone: 713-520-1900
19
20 Counsel for Defendant
21
22
23
24
25
3
1 (Proceedings commence.)
2 THE COURT: All right. We're on the record
3 in Cause Number 2006-61178, Albert Ortiz vs. Fred Lombardo.
4 And appearances for the record, Counsel.
5 MR. MOHRMAN: Your Honor, Joel Mohrman for
6 the Defendants and, also, Ms. Stephanie Tolson.
7 MR. BLOCK: Gary Michael Block for Mr. Ortiz,
8 as well as Michael Donovan.
9 THE COURT: All right. All right. Here's
10 the first thing I think, just off the top of my head: I
11 don't understand why we just don't whittle the Petition down
12 to what's left.
13 Because if you acknowledge the fact -- which I read in
14 whatever Mr. Donovan --
15 MR. BLOCK: Yes.
16 THE COURT: that there's things that I
17 already took out of the case, that the Court of Appeals
18 didn't send back down to us, so why are they still in the
19 Petition?
20 MR. BLOCK: They're -- yeah. In other words,
21 do an --
22 THE COURT: Clean it up.
23 MR. BLOCK: -- an amended. So basically
24 what -- what I did was, I just made a list of -- in
25 categories --
4
1 THE COURT: Uh-huh.
2 MR. BLOCK: -- okay, of what's been
3 non-suited, what we claimed as a non-suit, what we claim
4 that we all agree the Court of Appeals did or didn't do.
5 THE COURT: Uh-huh.
6 MR. BLOCK: And then that leaves -- I've
7 listed, based on Mr. Donovan's response, six, I'll call
8 them, causes of action. And I'll just lump them into three
9 different categories.
10 THE COURT: Uh-huh.
11 MR. BLOCK: Breach of contract, which the
12 Court of Appeals allows both sides to proceed with. And
13 it's just new facts dealing with breaches of contract.
14 Negligent breach of contract which stems from the same as
15 the breach of contract -- negligent performance of a
16 contract, I'm sorry, which is -- it's just a re-pleading,
17 negligent-wise, of the breach of contract.
18 So if you look-- and I think I've got this right.
19 Well, before you make your face, Judge, if you look at
20 Paragraph 61 and 62.
21 THE COURT: Uh-huh.
22 MR. BLOCK: And I've done something else for
23 you that'll make things kind of easy, based on what you just
24 said --
25 THE COURT: Uh-huh.
5
1 MR. BLOCK: -- which is -- do y'all just --
2 it might be easier for you to follow, too. (Handed)
3 It's basically the-- the causes of action that are
4 remaining in the -- to be argued in the Summary Judgment in
5 the lOth Amended Original Petition.
6 THE COURT: Uh-huh.
7 MR. BLOCK: Okay? So if you look at
8 Paragraph 61, it's a claim of breach of contract. And then
9 negligent performance of that is identified in Paragraph 58
10 just as a negligence cause of action.
11 If you look at Paragraph 62, it's the same, only pled
12 as a negligent performance of a contract under the same
13 essential set of facts as 6, breach of contract.
14 Okay? So you can -- you can just lump those together.
15 You may not like the negligent performance causes of action.
16 THE COURT: I mean, I can save you the dead
17 tree that he's going to file, because I can already smell it
18 coming down the pike, which is: "You can't have negligence
19 and breach of contract. You must pick one." Is that what
20 you're about to say?
21 MR. MOHRMAN: Yes, Your Honor.
22 THE COURT: I figured. Okay.
23 MR. BLOCK: So they're pled alternatively.
24 THE COURT: I've just never let anybody go to
25 trial like that.
6
1 MR. BLOCK: So then saying that, let's let
2 the facts develop a little further before we make our -- if
3 you would, our -- our choice of how we're going to approach
4 it at trial, negligent -- negligence or breach of contract
5 itself.
6 It's going to be the same discovery. It's going to be
7 the same testimony from witnesses.
8 THE COURT: Uh-huh.
9 MR. BLOCK: And if you're scrunching up your
10 face on that, I'd like to just go ahead and move to the
11 other --
12 THE COURT: Okay. I'll hear those.
13 MR. BLOCK: -- two or three -- okay. That's
14 just going to leave two-- two other claims, because I've
15 got -- we'll lump the negligent cause of action and the
16 breach of contract cause of action kind of as --
17 Let me ask you a question.
18 Sure.
19 All this stuff (indicating) is
20
21 It's already out.
22 -- of the Petition?
23 It's already out.
24 Did you file an amended one and
25
7
1 MR. BLOCK: No, not yet because of this --
2 because of this hearing. But either the Court of Appeals or
3 the non-suits that we filed --
4 THE COURT: Uh-huh.
5 MR. BLOCK: -- 1 through 17, are already
6 gone. So yes, we will amend.
7 THE COURT: Okay.
8 MR. BLOCK: Okay?
9 THE COURT: That's why-- that's the only
10 reason we're standing here.
11 MR. BLOCK: I -- I -- I got that.
12 THE COURT: Okay.
13 MR. BLOCK: I got that. So we're also
14 standing here because we still have six claims that they are
15 claiming are gone through Summary Judgment. Okay?
16 THE COURT: No, no. I think the issue is:
17 What is live to be tried?
18 MR. BLOCK: I - - I got it. But it's being
19 done as Summary Judgment, as a matter of law, based on what
20 the Court of Appeals mandated. What is remaining? What are
21 we allowed to plead?
22 THE COURT: You can call it whatever vehicle
23 you want to call it. I -- I --my issue and what I think
24 really the whole point of the Summary Judgment was, was to
25 get rid of these 17 things that shouldn't have been in that
8
1 Petition and then to figure out which of all of this is
2 still live; which, we already know these are live, but --
3 MR. BLOCK: Yes.
4 THE COURT: And frankly
5 MR. BLOCK: Right.
6 THE COURT: -- without him even re-filing
7 that which I know he's about to file, I can already tell you
8 what's going to happen with the negligent versus, you know,
9 breach of contract. I can already tell you what's going to
10 happen with that.
11 MR. BLOCK: Okay. So then let's move on
12 to -- to what I have listed as Number 5, which is
13 declaratory relief --
14 THE COURT: Okay.
15 MR. BLOCK: -- which is Paragraph 63 of the
16 Petition.
17 THE COURT: Okay.
18 MR. BLOCK: We're seeking declaratory relief,
19 which is exactly what Defendants have pled in their Amended
20 Counterclaim. They've alleged four different causes of
21 action for declaratory relief, branding (phonetic) never in
22 front of this Court before.
23 We have one for declaratory relief. And if you're
24 gonna get --
25 THE COURT: Is this the recision argument
9
1 that we did at trial?
2 MR. BLOCK: No.
3 MR. MOHRMAN: Your Honor --
4 THE COURT: Is that it?
5 MR. MOHRMAN: May I respond, Your Honor?
6 THE COURT: To that little limited portion,
7 yes.
8 MR. MOHRMAN: Yes, Your Honor. Yes, the
9 recision deed, as you may recall, popped up in their
10 expert's records. We put it up; they got excited about
11 that. They wanted to amend their Petition right before
12 trial, adding what the Court described as sort of a double
13 trespass.
14 To try to hide a double -- you said, "You've already
15 got the causes of action there, so use those. I'm not going
16 to allow this amendment." And in fact, as an exhibit was
17 the recision deed.
18 THE COURT: Uh-huh.
19 MR. MOHRMAN: Witnesses including Mr. Ortiz
20 were questioned about it. And Mr. Jamail made a good bit of
21 his final argument on the recision deed.
22 THE COURT: Uh-huh. Yes. But that didn't
23 come -- that didn't come there.
24 MR. BLOCK: It is not part -- no, it is not
25 part of the mandate, either excluded or included. The
10
1 the mandate is silent on that because that issue, this
2 Court -- it was like three days before trial or maybe during
3 the trial.
4 Oh, you're giving her a copy of the mandate? I've got
5 it. Thank you.
6 MR. MOHRMAN: (Handed to Court.)
7 THE COURT: Okay.··
8 MR. BLOCK: As this Court put it and put it
9 already today, too, "Let's not kill a whole bunch more
10 trees." So you didn't allow the trial amendment on the
11 recision.
12 THE COURT: But I still let you effectively
13 try that issue.
14 MR. BLOCK: We -- we -- we were allowed to
15 present evidence.
16 THE COURT: And it went to the jury, didn't
17 it?
18 MR. BLOCK: But not on the declaratory relief
19 that we were seeking then. It was not in the live pleading
20 at trial. It was not tried by consent. The jury did not
21 get a charge
22 THE COURT: Are you sure about that?
23 MR. BLOCK: Yes, ma'am; yes, ma'am.
24 MR. MOHRMAN: Your Honor, may I respond?
25 THE COURT: Sure.
11
1 MR. MOHRMAN: How could it not be tried by
2 consent? It was an exhibit. It was testified to. It was
3 talked about. And all the causes of action which they
4 allege now, that relate supposedly to this recision deed,
5 are the same causes of actions.
6 As the Court heard then and is still true now, they're
7 the same causes of action. You don't need to plead them
8 twice. It was tried. And whatever went to the jury went to
9 the jury.
10 MR. BLOCK: Judge, what --
11 MR. MOHRMAN: When you have a trial, you're
12 supposed to bring everything you've got to that trial. And
13 then the Court makes its judgment based upon the jury
14 verdict. It goes up to the Court of Appeals and it comes
15 back.
16 And the whole process is designed to narrow the issues,
17 and that's what the Court of Appeals did. So if you look at
18 that mandate, Judge, it says, number one, "Here's how we --
19 here's where we think the Court got it wrong," and it lists
20 several things.
21 THE COURT: Uh-huh.
22 MR. MOHRMAN: And then it says, "Here's where
23 the Court got it right. All these things are gone. All of
24 these torts are all gone."
25 And then it says, "Court -- Trial Court, here is what
12
1 you retry," and it lists them. And it doesn't list anything
2 about retrying torts that have already been tried.
3 Whether or not it relates to the recision deed or not,
4 they got their shot at it. You can't -- I'll make this the
5 final point, Judge.
6 THE COURT: Uh-huh.
7 MR. MOHRMAN: You can go to trial on, say,
8 ten causes of action; you win some, you lose some. It goes
9 to the Court of Appeals. The Court of Appeals comes back
10 down, after a final trial, and says, "This is what we think
11 needs to be retried."
12 You can't, after that appeal, then say, "You know
13 something? I wish I had added this cause of action back at
14 that first trial. Now I'm gonna expand this case into
15 something that's very different than what it was at trial."
16 We narrow; we don't expand.
17 And that's what they're trying to do. They're trying
18 to come back and not get a second bite at the apple but
19 really restart this case. I heard Mr. Block say a second
20 ago, "Well, we need to determine the facts. We need to do
21 discovery."
22 No, we've already done that. We have been down that
23 road, Judge. The Court of Appeals says, "Retry these issues
24 and that's it."
25 And I think, with all due respect to the Court, that's
13
1 what the Court should do.
2 MR. BLOCK: Now, as to the dec action, again,
3 Mr. Mohrman has got four dec action -- causes of action
4 amended in his counterclaim. This dec action was not
5 presented to the jury, because the Court wouldn't allow us
6 to.
7 It wasn't done as a breach of contract. It wasn't done
8 as a tort. It was a dec action. We tried to get a Triple
9 T, "Trespass to Try Title," cause of action. The Court
10 didn't allow those. There was no jury issue presented on
11 those.
12 There was evidence presented. We got to present that
13 deed, that -- that -- that recision deed, which mysteriously
14 appeared a few days before trial.
15 But it was never adjudicated to a final judgment.
16 There was -- there was nothing done through the Court of
17 Appeals mandate. You can look at the mandate, Judge, and
18 see.
19 And I'm going to bring up one last point on that before
20 I move on to the last, which is the gross negligence -- the
21 punitive damage claim. There is nothing that prevents this
22 Court from barring us again at trial but letting us go
23 forward, at least at this point, with -- with this
24 declaratory judgment action, as the Court may allow
25 Defendants to move forward with their declaratory action.
14
1 There's no difference.
2 And then lastly, I'm just going to go into the punitive
3 damage, which is Paragraph 66. That is a ground of
4 recovery, not a new cause of action.
5 THE COURT: Uh-huh.
6 MR. MOHRMAN: Your Honor --
7 THE COURT: Uh-huh.
8 MR. MOHRMAN: -- may I respond?
9 THE COURT: Sure.
10 MR. MOHRMAN: Your Honor, whether or not this
11 Court allowed them to present a jury issue on a particular
12 cause of action or not, it has still been tried. If the
13 Court said, "I'm sorry, I'm not going to give you that, a
14 jury issue on that," then that has been tried.
15 And you have made a legal decision that that wasn't
16 evidence, or it's not legally cognizable, or whatever it
17 was, and so it didn't go to the jury.
18 If they thought that that was wrong and, in fact, the
19 Court should have allowed them to have a jury issue on that,
20 then it was their duty to appeal that. If they chose not to
21 appeal it, it's just as final as if the Court had submitted
22 an issue and it had been decided against them.
23 The idea that simply because this Court made, in the
24 exercise of its judicial discretion, a decision that, "These
25 are going to the jury and these aren't," and somehow
15
1 everything that didn't go to the jury, which they didn't
2 appeal, now can come back and we'll give it another shot is
3 ridiculous.
4 MR. BLOCK: And if the Court is going to take
5 out our dec action, then take out theirs as well. It's the
6 same dang thing, Judge, identical. There's --
7 MR. MOHRMAN: Your Honor --
8 MR. BLOCK: There's no difference.
9 MR. MOHRMAN: And I'll be-- if i f -- if
10 they want to file a motion to that extent, I'm happy to
11 respond to that. I think there are differences, but it's
12 really, quite honestly, not even before the Court at this
13 point in time.
14 THE COURT: Well, that's what I was about to
15 say, that you would need to file your own motion.
16 MR. BLOCK: I got that, too, Judge.
17 THE COURT: So-- and I'm not stopping you
18 from filing your own motion on it, but yeah, the dec action
19 is gone. All that 1 through 17 is gone; the dec action is
20 gone.
21 I will tell you at this point: Make your decision, by
22 the next time that we meet, as to whether or not you want
23 negligent performance or breach of contract. But I just
24 don't see in this mandate where you even get that far.
25 Because to me, in the mandate, it's real simple, breach of
16
1 contract.
2 MR. BLOCK: Yeah. So then that would be what
3 I've listed as 3 and 4, versus 1 and 2.
4 THE COURT: Right.
5 MR. MOHRMAN: Well, Your Honor, to be honest
6 with you --
7 THE COURT: Uh-huh.
8 MR. MOHRMAN: -- I've prepared them an
9 absolute detail of what -- 3 and 4 that are listed there.
10 They have things like-- again, it's like good faith and
11 fair dealing and all sorts of other things.
12 If you look, for example -- let me get to this section
13 here. If you look at the top of this second page,
14 Paragraph 61
15 THE COURT: Uh-huh.
16 MR. MOHRMAN: you start to go into all
17 these various statutory claims. And then at the very
18 bottom, he says, "The violation of Defendant's bank
19 obligation, under Chapter 1 of the Texas Business and
20 Commerce Code, to act in good faith in the performance and
21 enforcement of a party's contract."
22 So I would argue he doesn't get to plead new causes of
23 action like that. What -- what I would suggest that we do,
24 Your Honor, is -- it seems like, after all of this running
25 and -- and, you know, wanting to have a new Petition at the
17
1 last hearing and then pulling it back, and now filing a new
2 Petition and now non-suiting it -- and, oh, one other thing
3 I would like to address before we leave here, just this --
4 this new lawsuit that they filed out there.
5 THE COURT: Uh-huh.
6 MR. MOHRMAN: But -- and now they pull it
7 back. And now, evidently after we spent ungodly amounts of
8 money to deal with this issue and brief it and bring it to
9 this Court, now they all of a sudden say, "Oh, yeah, 1
10 through 17, you're right. Let's go ahead and get rid of
11 those. And oh, yes, we all agree on 1 through 3."
12 And so now -- but we have these 1 through 6
13 distinctions. I think that those distinctions are things
14 that are outside of what they tried to try the first time,
15 and they don't get to expand them.
16 What the Court said -- what the Appellate Court said, I
17 think, is, "Retry the contract action. You don't get the
18 statute of limitations defense, but you can do other
19 affirmative defenses."
20 And so to the extent they want to have an affirmative
21 defense, they get to do that. But you don't get to plead
22 new theories on your contract cause of action, new
23 affirmative theories.
24 THE COURT: Here -- here's what I'm going to
25 say: I frankly am going to wholeheartedly agree with you,
18
1 but I am going to give you this guidance and heads-up. I
2 have not looked at whatever it is that's in your
3 counterclaim that you have filed.
4 To the extent that it's anything outside of something
5 that I already saw before the last time, that the Court of
6 Appeals sent back to me, I'm going to take it out.
7 MR. MOHRMAN: Okay, Judge, I understand.
8 THE COURT: Now, admittedly, once he files
9 the motion asking me to take it out --
10 MR. BLOCK: Sure.
11 THE COURT: but I'm going to take it out.
12 So I frankly think this case, in all honesty, is limited to
13 these three things and nothing else.
14 MR. MOHRMAN: And Your Honor, I will
15 represent to the Court that I will go back and look at my
16 counterclaim and re-evaluate it. And if I think that's the
17 case, then I will just stipulate.
18 MR. BLOCK: Yeah. And if the Court is
19 correct, then that would -- in the next category, 3 and 4
20 would stay in.
21 THE COURT: No, because 3 and 4 allege
22 different causes, different theories, under that breach of
23 contract action.
24 MR. BLOCK: It's still a breach of contract.
25 And if you look at the mandate --
19
1 THE COURT: But it's not -- the mandate is
2 "Retry Ortiz's claim against National City for breach of
3 contract and National City claims against Ortiz for breach
4 of contract and judicial foreclosure ... with the exception of
5 Ortiz's limitations defense ... permitting the parties to
6 assert defenses" ...
7 I don't read that to mean that then you get to allege
8 new breach of contract things that we didn't talk about the
9 first time. I read that to mean, "Go back and retry
10 whatever your breach of contract claim was at the time of
11 trial."
12 MR. BLOCK: And here's the trouble with
13 with the way you're reading that: If you're wrong, we get
14 the joy of trying this thing a third time here. And I think
15 that's what's going to end up happening--
16 THE COURT: Okay. Well, I may be wrong.
17 MR. BLOCK: And --
18 THE COURT: I may be wrong. I don't think I
19 am, but I may be wrong. But I think that the Court of
20 Appeals never envisioned that telling me to retry your claim
21 on breach of contract would somehow expand to your claim
22 that you already have here, that was up on appeal, and add
23 to it some other stuff that we didn't add in the first time.
24 I refuse to believe that that's what the Court of
25 Appeals intended. What I do think the Court of Appeals
20
1 intended by that phrase is the exact stuff we had at the
2 time of trial. That breach of contract claim, what we
3 handled at that time of trial, that's what gets --gets a
4 chance to be retried.
5 It's just like whatever his breach of contract claim
6 was at the time of trial is what we get a chance to retry.
7 And I'm not going outside of that. I have no intention of
8 going outside of that. So it's going to be 1, 2, 3.
9 MR. BLOCK: Okay. So to make it clear, we
10 just -- and I don't want to have to keep coming back here
11 we will --
12 THE COURT: Crystal.
13 MR. BLOCK: Yeah. We will re-plead our
14 causes of actions.
15 THE COURT: Uh-huh.
16 MR. BLOCK: And if there's any issues, then
17 we'll we can waive 21 days and just come in front of the
18 Judge if there's special exceptions or whatever, if there
19 is --
20 THE COURT: It's going to irk me to no end--
21 MR. BLOCK: I got it, Judge.
22 THE COURT: --to no end. See how nice I've
23 been right now? I haven't started screaming or frothing at
24 the mouth or any of that stuff, right? We've been very nice
25 and calm.
21
1 I'm even going to go you one better, okay? I'm going
2 to implore you -- no, order you to go back to your office
3 and look at your pleading. And if it is outside of 1, 2, 3
4 and what just came out of my mouth, and he has to come back
5 down here and say, "Now they went outside the blah, blah,
6 blah, blah, blah," I'm going to start handing out money to
7 everybody.
8 Does that make sense?
9 MR. MOHRMAN: Yes, Your Honor.
10 MR. BLOCK: Yes, sounds good.
11 THE COURT: Real crystal. Okay? It's 1, 2,
12 3; that's it. And if it wasn't around back when we tried
13 this sucker the first time, it better not be here.
14 MR. BLOCK: Okay.
15 THE COURT: And if it is, then I start to get
16 angry and start to hand out money. Understand?
17 MR. BLOCK: Yes, Your Honor.
18 THE COURT: Crystal?
19 MR. BLOCK: Crystal.
20 THE COURT: Okay. Great.
21 MR. MOHRMAN: Your Honor, a couple -- three
22 things just as housekeeping measures.
23 THE COURT: Uh-huh.
24 MR. MOHRMAN: Number one, with regard to what
25 was done here, would it be helpful to the Court for me to
22
1 prepare an order saying what the Court has said so we get it
2 done? I mean, here's my concern: Mr. Block and Mr. Donovan
3 go back. They file a new Petition, which is beyond the
4 deadline at this point in time, I'll point out.
5 I mean, we had a pleading deadline, and then it isn't
6 in accordance with 1, 2 and 3 and we have to come back.
7 What I would prefer is that the Court just issue an order,
8 just exactly what the Court said a second ago, "It's 1, 2,
9 3. All this other stuff is gone," and then we're done. And
10 it doesn't matter what's in the Petition because we're done.
11 THE COURT: If you want to fashion an order,
12 that's fine.
13 MR. MOHRMAN: Okay.
14 THE COURT: It might get tweaked --
15 MR. MOHRMAN: That's fine.
16 THE COURT: -- but yes.
17 MR. MOHRMAN: Obviously.
18 THE COURT: But it's gonna get tweaked to
19 what just came out of my mouth.
20 MR. MOHRMAN: I understand, Judge. And I
21 will try to get it as -- I'm going to get the transcript,
22 and I'm gonna try to get it as exactly as what the Court
23 just said. And if I get it wrong, well, obviously the Court
24 will issue the order that's correct.
25 THE COURT: Okay.
23
1 MR. MOHRMAN: Secondly, I think Ms. -- we've
2 had, I don't know, between 8 and 10 attorneys representing
3 Mr. Ortiz in this case.
4 THE COURT: Uh-huh.
5 MR. MOHRMAN: You may remember at the last
6 hearing we had, Mr. Rayschlager (phonetic) and Mr. Medina,
7 they refused -- they made an appearance here, made an
8 announcement, but refused to get on the pleadings and they
9 refused to accept service of anything.
10 Mr. Block has now come back to join the party. And if
11 Mr. Block is here, I want him here. Because I've been told
12 that I can only serve Mr. Donovan, nobody else. And if
13 Mr. Block is here, I don't want him in and out, playing
14 temporary lawyer. I want to know who's on the other side.
15 MR. BLOCK: I hate to quote Hilary Clinton
16 but, "What difference does it make?" E-mail Mike Donovan.
17 I mean, it's going to go to-- to whoever it needs to go to.
18 MR. MOHRMAN: Here's the difference, Judge.
19 As the Court knows, Mr. Donovan is a Supreme Court fact
20 witness in this case.
21 THE COURT: Uh-huh.
22 MR. MOHRMAN: And he has been accused of
23 professional impropriety in this case. And the Court has
24 said, "You're not gonna be at trial. You're not gonna be
25 actually representing, in court, people who can be here.
24
1 But you're not gonna be in trial, representing people in
2 court."
3 And I think the case law is clear that he can help
4 fashion pleadings and give advice to his client, but he
5 can't represent the client in court, arguing here or in
6 front of the -- the jury.
7 So I need to know who is going to be the attorney in
8 charge, who is going to handle this case, so that we don't
9 keep having a carousel of attorneys that pop up here.
10 THE COURT: Well, here's what I think: And I
11 will say I have been a little troubled that the only name on
12 the signature block on all of these things has been him
13 (indicating Mr. Donovan). I frankly don't care which one of
14 you is -- well, outside of I don't want him doing it.
15 But it gives me much heartburn that his name is the
16 only name on the signature clock. So pick somebody, throw
17 them up on the piece of paper. Now, if this person changes
18 in 30 days, fine, whatever. I get that's gonna happen. But
19 at this exact juncture --
20 MR. DONOVAN: Judge, very well.
21 THE COURT: I don't want to just see his
22 name. I want to see somebody else's name. So whoever it's
23 gonna be --
24 MR. BLOCK: Not a problem, Judge.
25 THE COURT: -- throw their name on there.
25
1 Okay?
2 MR. BLOCK: We have one other motion in front
3 of us, which is a simpler motion, which is --
4 MR. MOHRMAN: Judge -- Judge, one other thing
5 before we get to this other motion, because I think it's
6 related to what we've been doing here. And that is: They
7 have filed a new lawsuit against us in Harris County
8 District Court, which is essentially a copy of a lawsuit in
9 front of this Court.
10 You may have seen -- I'm sure you saw that they've
11 non-suited everything and they said, "Well, put this new
12 lawsuit in. And what we'll do is we'll then consolidate it
13 back into this case, and our claims will be revived again."
14 THE COURT: Uh-huh.
15 MR. MOHRMAN: I know that lawsuit is not
16 before this Court, but --
17 THE COURT: Nor is the Motion to Consolidate
18 that you appear to be orally making.
19 MR. MOHRMAN: Right, Judge. Not -- I know
20 they've argued that, Judge. But could the Court perhaps
21 give us some guidance about its view of the propriety of
22 that, so that we know
23 THE COURT: Well, I think that --
24 MR. MOHRMAN: -- whether that can go forward.
25 THE COURT: -- goes to what I think about the
26
1 successor motion.
2 MR. MOHRMAN: Okay.
3 THE COURT: My attitude about all this I
4 think I've made pretty clear today. That attitude is not
5 going to change about anything in this case. If we didn't
6 have it before, we're not going to have it now.
7 MR. BLOCK: And keeping that in mind, we've
8 got one party that I believe Mr. Mohrman has admitted is a
9 successor interest, although he has not supplemented
10 discovery to show successor interest names.
11 B.O.A. is in dispute, Bank of America. And that one
12 was not a party. We're thinking it's a successor in
13 interest. They're claiming here, "Oh, they're not a
14 successor in interest," but they have filed pleadings in
15 federal court saying they are.
16 So I don't know how they want to approach it. I don't
17 mind carrying the successor issue forward for the time
18 being, but let's wait and see what happens with the other
19 cause of action.
20 And if it's a successor in interest, or whatever it is
21 in that new lawsuit, if it comes back into this court,
22 either consolidate it or -- under a new cause of action or
23 it stays in the 133rd. When this comes before you, we'll
24 deal with that, Judge.
25 MR. MOHRMAN: Your Honor, very briefly, with
27
1 regard to S.P.S., which is the servicer -- excuse me, P & C,
2 which is the bank that ultimately took over with regard to
3 servicing this account and actually holds -- you know, they
4 have S.P.S. as their servicer. We don't have any problem
5 with P & C being put in. They actually hold the note.
6 THE COURT: Uh-huh.
7 MR. MOHRMAN: So they need to be there,
8 probably, in that situation. As the Court may remember, the
9 S.P.S., the new servicer, who went in after the lawsuit and
10 went back into their house again, that was after we had
11 already gotten rid of the note at that point in time.
12 And they sued them and they got, I guess, a settlement,
13 because there was a Motion to Dismiss with Prejudice that
14 was signed, an Order of Dismissal.
15 With regard to Bank of America, however, Bank of
16 America only came in after this judgment, and their only
17 connection is that the prior servicer, H.L.S., ultimately
18 merged up into Bank of America.
19 There's already a judgment against H.L.S. Bank of
20 America has nothing to do with this case. At any time, in
21 any form or fashion in this case, Bank of America had
22 nothing to do with it. The only connection is that H.L.S.
23 ultimately went up into Bank of America's --
24 MR. BLOCK: Okay.
25 MR. MOHRMAN: They got -- excuse me.
28
1 MR. BLOCK: Sorry.
2 MR. MOHRMAN: They got a judgment. And it
3 doesn't look like --
4 THE COURT: When did H.L.S. go into Bank of
5 America?
6 MR. MOHRMAN: When -- after the case.
7 THE COURT: So while it was up on appeal?
8 MR. MOHRMAN: Correct.
9 THE COURT: Okay. What's the big deal?
10 MR. BLOCK: B.O.A. is substituted in. That's
11 the big deal.
12 MR. MOHRMAN: Why?
13 THE COURT: Why?
14 MR. BLOCK: Because B.O.A. is the successor
15 in interest.
16 THE COURT: So let me ask you this question:
17 So you're telling me you're somehow all going to instruct
18 the witnesses to stop calling H.L.S., "H.L.S." and call it
19 "B.O.A." because all the documents are gonna say, "H.L.S. "?
20 All the testimony is going to say, "H.L.S." And then you're
21 just gonna say, "Bank of America," just
22 MR. BLOCK: No. They're it --
23 THE COURT: -- because you want to say, "Bank
24 of AmericaH?
25 MR. BLOCK: No. It's a matter of the final
29
1 judgment and who our final judgment --
2 THE COURT: And at the time of judgment, then
3 maybe we can have this discussion.
4 MR. BLOCK: Okay.
5 THE COURT: But as of right now, it's so not
6 gonna happen.
7 MR. BLOCK: Okay.
8 THE COURT: Okay. Anything else?
9 MR. BLOCK: That's it. Thank you, Judge.
10 MR. MOHRMAN: Thank you, Your Honor.
11 MR. BLOCK: Good seeing you.
12 THE COURT: Have a good day.
13 MR. BLOCK: Happy Halloween.
14 THE COURT: Thank you.
15 (Proceedings concluded.)
16
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25
30
1 STATE OF TEXAS
2 COUNTY OF HARRIS
3
4 I, Sheryl E. Stapp, Deputy Official Reporter in and
5 for the 164th District Court of Harris County, State of Texas,
6 do hereby certify that the above and foregoing contains a true
7 and correct transcription of all portions of evidence and
8 other proceedings requested in writing by counsel for the
9 parties to be included in this volume of the Reporter's Record
10 in the above-styled and numbered cause, all of which occurred
11 in open court or in chambers and were reported by me.
12 I further certify that this Reporter's Record of the
13 proceedings truly and correctly reflects the exhibits, if
14 any, offered, admitted, and/or requested by the respective
15 parties.
16 I further certify that the total cost for the
17 preparation of this Reporter's Record is ~$==~2~5~0~·~0~0== and
18 was paid by McGlinchey stafford
19 WITNESS MY OFFICIAL HAND on this the 25th day of
20 ====dN~o~v~e~m~b~e~r~===============' 2014.
21 Sheryl E. Stapp, ~-~-``llysignedbysheryiE.stapp,c.s.R.,
ON: cn,.Sheryl !:.Stapp, C.S.R., R.P.R., o,ou,
22 C SR
--=•=• RPR
=•,_:_:_:•.:.__::•
erhall=>sdepo@aol.com, c"'US
'-"--'_ _ ,,_.QD•ill"'-'!''"'"IJ.Ill.>"'-111<1:4LJ1:5"-'4·Q[06'ill!OO'c...__ __
SHERYL E. STAPP, C.S.R., R.P.R.
23 Texas C.S.R. #6227 -- Exp. 12/31/14
Deputy Official Court Reporter
24 164th Judicial District Court
201 Caroline, 12th Floor
25 Houston, Texas 77002
Telephone: 713-368-6264
TAB V
STATE OF TEXAS §
§
COUNTY OF HARRIS §
VERIFICATION
Before me, the undersigned notary, on this day personally appeared
Stephanie Laird Tolson, the affiant, a person whose identity is known to me. After
I administered an oath, affiant testified as follows:
1. My name is Stephanie Laird Tolson. I am over 18 years of age, of
sound mind, and capable of making this verification. The facts in this
verification are within my personal knowledge and are true and
correct.
2. I am the attorney for Respondents. All documents included with the
Response to the Writ of Mandamus are true copies.
G~NlELAIRDT``N
SWORN TO AND SUBSCRIBED BEFORE ME on the 6th day of
January, 2015, to certifY which witness my hand and seal of office.
,JJuuL.' ~
'
~PUBLIC,S