Favor Ministries, Inc. v. Buttross V, Inc. ( 2014 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-13-00562-CV
Favor Ministries, Inc., Appellant
v.
Buttross V, Inc., Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 126TH JUDICIAL DISTRICT
NO. D-1-GN-12-001607, HONORABLE STEPHEN YELENOSKY, JUDGE PRESIDING
MEMORANDUM OPINION
Favor Ministries, Inc. sued Buttross V, Inc.1 asserting causes of action for wrongful
foreclosure on a house located in Manor, Texas, violation of the Texas Deceptive Trade
Practices-Consumer Protection Act, and unfair debt collection. Buttross V filed a general denial and
asserted a counterclaim seeking to recover the difference between the price the property sold for at
the foreclosure sale and the unpaid balance of the loan on the property. See Tex. Prop. Code
§ 51.003 (governing suits to recover deficiency when price at which real property sold at non-judicial
foreclosure sale is less than unpaid balance of indebtedness secured by real property). The trial court
granted Buttross V’s motion for summary judgment and rendered judgment that (1) Buttross V
recover $53,814.54 for the deficiency along with attorneys’ fees of $10,000 and pre- and
1
While the proceedings below were styled “Favor Ministries, Inc. v. Buttross Group V,” the
allegations in the pleadings and the pertinent documentation appears to show that the correct name
of the defendant below is “Buttross V, Inc.”
post-judgment interest, and (2) Favor Ministries take nothing by its claims. Favor Ministries
perfected this appeal, contending in four issues that the trial court erred in granting the
summary-judgment motion and by awarding attorneys’ fees. We will reverse and remand.
BACKGROUND
In order to purchase property located in Manor, Favor Ministries borrowed $255,000
from Buttross V. The loan is evidenced by a promissory note dated May 24, 2011 in the original
principal amount of $255,000 payable to Buttross V. The note is secured by a deed of trust dated
May 24, 2011, and recorded in the official public records of Travis County. The deed of trust
secures repayment of the debt evidenced in the note, and for that purpose Favor Ministries granted
and conveyed the property to the trustees2 to hold in trust with power of sale.
In April 2012, counsel for Buttross V gave Favor Ministries notice of its intent to
foreclose on the property securing the note, and in May 2012 the substitute trustee sold the property
at a non-judicial foreclosure sale. Favor Ministries then sued Buttross V asserting, among other
claims, a cause of action for wrongful foreclosure. Buttross V filed a counterclaim asserting that it
was entitled to recover from Favor Ministries the deficiency remaining after applying the proceeds
of the sale to the unpaid amount due under the note. Buttross V moved for summary judgment on
its deficiency claim and on Favor Ministries’ claims against it, including the claim for wrongful
foreclosure. After the court granted Buttross V’s motion for summary judgment, Favor Ministries
perfected this appeal.
2
The trustees are Regina Buttross, David Buttross, Deborah Carter, and Yousef Lahlou.
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DISCUSSION
In its first issue, Favor Ministries asserts that the trial court erred in granting Buttross
V’s traditional summary-judgment motion because Buttross V failed to submit competent
summary-judgment evidence regarding the amount due on the note on the date of foreclosure, which
Favor Ministries contends is an element of the cause of action to recover the deficiency. A party
moving for traditional summary judgment under Texas Rule of Civil Procedure 166a(c) must
establish that no genuine issue of material fact exists and that it is entitled to judgment as a matter
of law. See Tex. R. Civ. P. 166a(c). For a claimant to be entitled to a traditional summary judgment,
it must conclusively prove all elements of its cause of action as a matter of law. MMP, Ltd. v. Jones,
710 S.W.2d 59, 60 (Tex. 1986) (per curiam); see Tex. R. Civ. P. 166a(c). In its counterclaim,
Buttross V sought to recover an alleged deficiency remaining after its non-judicial foreclosure on
property securing the note in the original principal amount of $255,000. “It is settled Texas law that
where a validly executed note goes into default and there is a resulting trustee’s sale of the security
for the note, a mortgagee must prove 1) the amount due on the note at the time of foreclosure, 2) that
proper notice of acceleration has been given, 3) that a valid foreclosure sale was made and 4) that
he has given credit to the mortgagor for the amount received at the trustee’s sale and any other
legitimate credits before he is entitled to a judgment for any deficiency.” Carruth Mortg. Co.
v. Ford, 630 S.W.2d 897, 899 (Tex. App.—Houston [1st Dist.] 1982, no writ); see also
Charles R. Tips Family Trust v. PB Commercial LLC, ___ S.W.3d ___, No. 01-13-00449-CV,
2014 WL 4085496, at *3 (Tex. App.—Houston [1st Dist.] Aug. 19, 2014, no pet. h.); Thompson
v. Chrysler First Bus. Credit, 840 S.W.2d 25, 28 (Tex. App.—Dallas 1992, no writ) (same). Thus,
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in order for summary judgment awarding Buttross V any deficiency amount to have been proper,
Buttross V was required to conclusively prove each of these elements. See Tex. R. App. P. 166a(c).
An examination of the record reveals that Buttross V failed to conclusively establish
at least one of the elements of its deficiency claim—the amount due on the note at the time of
foreclosure. The summary-judgment motion itself simply states that (1) the original principal
amount of the note was $255,000; (2) the property securing the note was sold for $200,000; and
(3) the claimed deficiency is $53,814.54. Attached to the summary-judgment motion is the affidavit
of David A. Buttross, II, in which he avers:
The Statement of the Case contained in Defendant’s Motion for Summary Judgment
accurately and truthfully reflects my understanding of the factual matters which form
the subject matter of this lawsuit. All of the documents attached to Defendant’s
Motion for Summary Judgment are true and correct copies.
The documents attached to the motion for summary judgment are copies of (1) the promissory note,
(2) the deed of trust, (3) correspondence from counsel for Buttross V demanding payment of a
past-due installment payment, (4) the appointment of a substitute trustee, (5) correspondence from
counsel for Buttross V regarding acceleration of the note and notice of the substitute trustee’s sale,
(6) the notice of the substitute trustee’s sale, and (7) the substitute trustee’s deed conveying the
property to the purchaser at the non-judicial foreclosure sale. None of these documents even
identifies, much less constitutes competent summary-judgment evidence of, the amount due on the
note at the time of foreclosure. Moreover, the Buttross affidavit does not amount to “evidence” of
anything; at the most it is simply a verification of the statements made in the summary-judgment
motion, which does not meet the standard for competent summary-judgment evidence. See Laidlaw
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Waste Sys., Inc. v. City of Wilmer, 904 S.W.2d 656, 660 (Tex. 1995) (“Generally, pleadings are
not competent evidence, even if sworn or verified.”); Quanaim v. Frasco Rest. & Catering,
17 S.W.3d 30, 42 (Tex. App.—Houston [14th Dist.] 2000, pet. denied) (“It is well settled that neither
the motion for summary judgment, nor the response, even if sworn, is ever proper summary
judgment proof.”). Because Buttross V failed to conclusively establish the amount due on the
promissory note at the time of foreclosure, an element of its cause of action, it was not entitled to
summary judgment. We sustain Favor Ministries’ first issue.
Because of our disposition of Favor Ministries’ first issue, we need not address its
remaining issues regarding the sufficiency of the notice, the existence of fact issues related to its
fair-market-value defense, or the evidence supporting the award of $10,000 in attorneys’ fees based
on the affidavit of Buttross V’s attorney, who simply stated that, in his opinion, $10,000 was a
reasonable fee. See Tex. R. App. P. 47.1 (court of appeals must hand down written opinion that is as
brief as practicable while addressing every issue raised and necessary to final disposition of appeal).
CONCLUSION
For the reasons stated above, we reverse the trial court’s summary judgment and
remand the case to that court for further proceedings.
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_____________________________________________
J. Woodfin Jones, Chief Justice
Before Chief Justice Jones, Justices Rose and Goodwin
Reversed and Remanded
Filed: December 18, 2014
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