In Re ONEWEST BANK, FSB , 2014 Tex. App. LEXIS 4593 ( 2014 )

NUMBER 13-14-00198-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
IN RE ONEWEST BANK, FSB
On Petition for Writ of Mandamus.
OPINION
Before Justices Garza, Benavides and Perkes
Opinion by Justice Garza
Relator, OneWest Bank, FSB (“OneWest”), filed a petition for writ of mandamus in
the above cause contending that the trial court abused its discretion by rendering an order
denying relator’s application for expedited foreclosure “with prejudice to refiling same.”
See generally TEX. R. CIV. P. 735, 736.1 Relator requests that we direct the trial court to
strike the language “with prejudice” from its order. We conditionally grant the writ of
mandamus.
I. BACKGROUND
Real party in interest, Carolyn Casterline, owned real property located at 103 Bay
Court, Aransas Pass, Texas. On or about June 14, 2007, Casterline obtained a home
equity loan from OneWest and granted a deed of trust to the property as collateral.
Casterline thereafter stopped making payments and OneWest began foreclosure
attempts.2
In the course of attempted foreclosure proceedings and related litigation, OneWest
filed an application for an expedited home equity foreclosure proceeding under Texas
Rule of Civil Procedure 736. See generally TEX. R. CIV. P. 736. On October 14, 2013,
the trial court initially denied OneWest’s application for an expedited foreclosure with
prejudice, subsequently granted reconsideration of that order on October 18, 2013, and
ultimately granted OneWest’s application on November 25, 2013. Casterline then filed
an original proceeding in this Court contending that the rules of civil procedure prohibited
the trial court from reconsidering its original denial of the expedited foreclosure
application. See In re Casterline, No. 13-13-00708-CV, 2014 WL 217285, at *1 (Tex.
App.—Corpus Christi Jan. 15, 2014, orig. proceeding). We concluded that Rule 736.8
prohibited the trial court from granting reconsideration of its original order. Id.; see TEX.
1 This original proceeding arises from cause number S-13-5428-CV-B in the 156th Judicial District
Court of San Patricio County, Texas, and the respondent is the Honorable Joel B. Johnson, the presiding
judge of that court.
2Additional information about the procedural history of this case can be found in a previous opinion
issued by this Court. See In re Casterline, No. 13-13-00708-CV, 2014 WL 217285, at *1 (Tex. App.—
Corpus Christi Jan. 15, 2014, orig. proceeding).
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Rawle CIV. P. 736.8(c) (providing that an “order granting or denying the application is not
subject to a motion for rehearing, new trial, bill of review, or appeal.”). We conditionally
granted mandamus relief directing the trial court to vacate its October 18, 2013 and
November 25, 2013 orders and reinstate its original order of October 14, 2013 denying
OneWest’s application. In re Casterline, 2014 WL 217285, at *6.
By order signed on January 21, 2014, the trial court vacated its October 18, 2013
and November 25, 2013 orders. This original proceeding ensued. By one issue,
OneWest contends that the trial court abused its discretion by entering an order denying
its application for expedited foreclosure with prejudice to refiling when Texas Rule of Civil
Procedure 736.9 states that orders on such applications are “without prejudice.” See TEX.
R. CIV. P. 736.9. The Court requested and received a response to the petition for writ of
mandamus from Casterline. Casterline contends generally that the trial court did not
abuse its discretion in denying the application with prejudice because OneWest is
precluded from re-filing another expedited foreclosure action and, further, that OneWest
has an adequate remedy by appeal of any adverse decision that might be rendered in a
judicial foreclosure action.
II. STANDARD OF REVIEW
Mandamus relief is proper to correct a clear abuse of discretion when there is no
adequate remedy by appeal. In re Frank Motor Co., 361 S.W.3d 628, 630–31 (Tex. 2012)
(orig. proceeding); In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135–36 (Tex. 2004)
(orig. proceeding). “A trial court has no discretion in applying the law to the facts or
determining what the law is.” In re Prudential Ins. Co. of Am., 148 S.W.3d at 135. We
assess the adequacy of an appellate remedy by balancing the benefits of mandamus
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review against the detriments. In re State, 355 S.W.3d 611, 614–15 (Tex. 2011) (orig.
proceeding); In re Team Rocket, L.P., 256 S.W.3d 257, 262 (Tex. 2008) (orig.
proceeding). In performing this balancing, we look at a number of factors, including
whether mandamus review “will spare litigants and the public ‘the time and money utterly
wasted enduring eventual reversal of improperly conducted proceedings.’” In re State,
355 S.W.3d at 615 (quoting In re Prudential Ins. Co. of Am., 148 S.W.3d at 136).
Orders granting or denying applications for expedited foreclosure are not subject
to appeal, and thus may be reviewed by mandamus. See TEX. R. CIV. P. 736.8(c); In re
Casterline, 2014 WL 217285, at *5; In re Dominguez, 416 S.W.3d 700, 708 (Tex. App.—
El Paso 2013, orig. proceeding).
III. EXPEDITED APPLICATIONS FOR FORECLOSURE
Under article XVI, section 50(a)(6)(D) of the Texas Constitution, the homestead of
a family or of a single adult person is protected from forced sale for the payment of all
debts except, for instance, when an extension of credit is secured by a lien that may be
foreclosed upon only by a court order. TEX. CONST. art. XVI, § 50(a)(6)(D); see In re
Dominguez, 416 S.W.3d at 705. Under Texas Rule of Civil Procedure 735.1, a party
seeking to foreclose a lien for, inter alia, a home equity loan, reverse mortgage, or home
equity line of credit may file an application for an expedited order allowing the foreclosure
of a lien under Rule 736. See TEX. R. CIV. P. 735.1; see also TEX. CONST. art. XVI, §§
50(a)(6), 50(k), 50(t).
Rule 736, as referenced in Rule 735, sets forth the procedures and requirements
for seeking an expedited foreclosure. See TEX. R. CIV. P. 735, 736. A party may seek a
court order permitting the foreclosure of a lien by filing a verified application in the district
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court in any county where all or any part of the real property encumbered by the lien is
located or in a probate court with jurisdiction over proceedings involving the property. See
id. R. 736.1(a). The only issue to be determined in a Rule 736 proceeding is the right of
the applicant to obtain an order to proceed with foreclosure under the “applicable law and
the terms of the loan agreement, contract, or lien sought to be foreclosed.” Id. R. 735.2.
A respondent may file a response to the application, but the response may not raise any
independent claims for relief, and no discovery is permitted. See id. R. 736.4, 736.5(d).
The trial court must not conduct a hearing on the application unless the respondent files
a response, but must hold a hearing “after reasonable notice to the parties” if a response
is filed. See id. R. 736.6. At a hearing, the petitioner has the burden to prove the grounds
for granting the order sought in the application. See id. If no response is filed, the
petitioner may obtain a default order. See id. R. 736.7.
The court must issue an order granting the application if the petitioner establishes
the basis for the foreclosure; otherwise, the court must deny the application. See id. R.
736.8(a). “An order granting or denying the application is not subject to a motion for
rehearing, new trial, bill of review, or appeal.” Id. R. 736.8(c). “Any challenge to a Rule
736 order must be made in a suit filed in a separate, independent, original proceeding in
a court of competent jurisdiction.” Id. An order issued pursuant to Rule 736 “is without
prejudice and has no res judicata, collateral estoppel, estoppel by judgment, or other
effect in any other judicial proceeding.” Id. R. 736.9. After an order is obtained, the
foreclosure may proceed. Id.
IV. ANALYSIS
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Relator contends that the trial court erred in denying its application “with prejudice.”
The resolution of this issue requires us to construe Texas Rule of Civil Procedure 736.
The Texas Rules of Civil Procedure have the same force and effect as statutes. See
Assignees of Best Buy v. Combs, 395 S.W.3d 847, 862 (Tex. App.—Austin 2013, pet.
filed); see also In re City of Georgetown, 53 S.W.3d 328, 332 (Tex. 2001) (orig.
proceeding). Thus, when we construe rules of procedure, we apply the same rules of
construction that govern the interpretation of statutes. Ford Motor Co. v. Garcia, 363
S.W.3d 573, 579 (Tex. 2012); In re Christus Spohn Hosp. Kleberg, 222 S.W.3d 434, 437
(Tex. 2007) (orig. proceeding); In re CompleteRx, Ltd., 366 S.W.3d 318, 323 (Tex. App.—
Tyler 2012, orig. proceeding); Huston v. U.S. Bank Nat’l Ass'n, 359 S.W.3d 679, 681 (Tex.
App.—Houston [1st Dist.] 2011, no pet.).
The construction of procedural rules is a legal question and is subject to de novo
review. See In re Christus Spohn Hosp. Kleberg, 222 S.W.3d at 437; State v. Gonzalez,
82 S.W.3d 322, 327 (Tex. 2002); see also In re CompleteRx, Ltd., 366 S.W.3d at 323. Of
primary concern is the express language of the rule or statute. See Galbraith Eng'g
Consultants, Inc. v. Pochucha, 290 S.W.3d 863, 867 (Tex. 2009); In re Christus Spohn
Hosp. Kleberg, 222 S.W.3d at 437. “We first look to the plain language of the rule and
construe it according to its plain or literal meaning.” Ford Motor Co., 363 S.W.3d at 579;
see In re Christus Spohn Hosp. Kleberg, 222 S.W.3d at 437; Assignees of Best Buy, 395
S.W.3d at 864–65.
We further examine the rule as a whole to ascertain its intent. Huston, 359 S.W.3d
at 681; Tex. Bldg. Owners & Managers Ass'n, Inc. v. Pub. Util. Comm'n of Tex., 110
S.W.3d 524, 531 (Tex. App.—Austin 2003, pet. denied). The Texas Code Construction
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Act applies to the construction of procedural rules and, among other things, permits our
consideration of the object sought to be attained, the circumstances under which the rule
was enacted, and the consequences of a particular construction. See TEX. GOV'T CODE
ANN. §§ 311.002(a)(4), 311.023(1)–(3),(5) (West, Westlaw through 2013 3d C.S.); see
also Huston, 359 S.W.3d at 681; BASF Fina Petrochemicals Ltd. P'ship v. H.B. Zachry
Co., 168 S.W.3d 867, 871 (Tex. App.—Houston [1st Dist.] 2004, pet. denied). We liberally
construe the rules of civil procedure to obtain “just, fair, equitable and impartial
adjudication of the rights of litigants under established principles of substantive law” with
“as great expedition and dispatch and at the least expense to both the litigants and to the
state as may be practicable.” TEX. R. CIV. P. 1; see Huston, 359 S.W.3d at 681.
In the instant case, Rule 736.9 expressly provides that:
An order [issued pursuant to Rule 736] is without prejudice and has no res
judicata, collateral estoppel, estoppel by judgment, or other effect in any
other judicial proceeding. After an order is obtained, a person may proceed
with the foreclosure process under applicable law and the terms of the lien
sought to be foreclosed.
TEX. R. CIV. P. 736.9. Based on the plain and express language of the rule, we conclude
that the trial court abused its discretion in denying OneWest’s application “with prejudice.”
See Ford Motor Co., 363 S.W.3d at 579; In re Christus Spohn Hosp. Kleberg, 222 S.W.3d
at 437. Moreover, looking at Rule 736 as a whole, allowing a dismissal with prejudice
would be inconsistent with the provisions of 736.8(c), which allows challenges to Rule
736 orders to be made in “a suit filed in a separate, independent, original proceeding in a
court of competent jurisdiction.” TEX. R. CIV. P. 736.8(c); see Mossler v. Shields, 818
S.W.2d 752, 754 (Tex. 1991) (per curiam) (holding that a “dismissal with prejudice
functions as a final determination on the merits”); In re Guardianship of Patlan, 350
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S.W.3d 189, 196 (Tex. App.—Austin 2011, no pet.) (“A dismissal with prejudice is a final
determination on the merits and prevents a party from re-filing a case under the doctrines
of res judicata or collateral-estoppel.”).
V. CONCLUSION
The trial court abused its discretion in denying OneWest’s application for expedited
foreclosure “with prejudice.” Accordingly, we conditionally grant mandamus relief and
direct the trial court to strike the words “with prejudice” from its order of October 14, 2013
denying OneWest’s application for expedited foreclosure. We are confident the trial court
will act promptly in accord with this opinion. The writ of mandamus will issue only if the
trial court fails to act within a reasonable time.
DORI CONTRERAS GARZA
Justice
Delivered and filed the
29th day of April, 2014.
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