Leslie Clint Slay v. Nationstar Mortgage, L.L.C., F/K/A Centex Home Equity Company, L.L.C. ( 2010 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 2-09-052-CV
LESLIE CLINT SLAY APPELLANT
V.
NATIONSTAR MORTGAGE, L.L.C., APPELLEE
F/K/A CENTEX HOME EQUITY
COMPANY, L.L.C.
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FROM THE 415TH DISTRICT COURT OF PARKER COUNTY
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MEMORANDUM OPINION 1
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I. Introduction
Appellant Leslie Clint Slay (“Slay”) appeals a summary judgment in favor
of Appellee Nationstar Mortgage, L.L.C. f/k/a Centex Home Equity Company,
L.L.C. (“Nationstar”). In seven points, Slay contends the trial court erred by
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 See Tex. R. App. P. 47.4.
granting summary judgment for Nationstar because Nationstar’s pleading
amendment was untimely, the statute of limitations bars Nationstar’s claims,
Slay cannot have personal liability relating to a home equity loan, and the
arbitrator exceeded his authority and displayed manifest disregard for the law.
We affirm.
II. Background
Slay obtained a home equity loan from Nationstar on October 23, 2001.
Slay defaulted on the loan, and Nationstar gave notice of intent to accelerate.
Nationstar thereafter accelerated the loan on August 5, 2003. That same day,
Nationstar filed an application for foreclosure of the lien pursuant to Texas Rule
of Civil Procedure 736. Slay responded to Nationstar’s foreclosure application
by filing a lawsuit against Nationstar and alleging the loan and lien were void.
Nationstar removed Slay’s lawsuit to federal court and successfully moved to
compel arbitration, but Slay did not initiate arbitration. In November 2004, Slay
filed a new lawsuit against Nationstar alleging the loan and lien were void.
Nationstar ultimately initiated an arbitration against Slay on August 23,
2006. Nationstar sought recovery of its attorneys’ fees and asked for
declarations that, among other things, Slay had no defenses to Nationstar’s
foreclosure action. Slay answered and counter-claimed in the arbitration.
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On March 29, 2007, the arbitrator entered an award finding, among other
things, that the loan, note, and security instrument did not violate the Texas
constitution and that Slay was not entitled to recover on any of his claims. The
arbitrator also awarded $36,054.85 in attorneys’ fees and costs to Nationstar
and ordered that Slay bear personal liability for the award of attorneys’ fees and
costs. Slay did not file an application or motion to vacate, modify, or correct
the arbitrator’s award.
On July 11, 2007, Nationstar filed suit to enforce the arbitrator’s award.
Nationstar’s original petition sought to enforce the arbitrator’s award and asked
for non-judicial foreclosure of the loan on Slay’s homestead. On August 15,
2007, Slay counter-claimed and asked to have the arbitrator’s award
disregarded. Nationstar filed a motion for summary judgment in May 2008, and
the trial court granted summary judgment on June 20, 2008, for a judicial
foreclosure. On July 3, 2008, Nationstar sought and was granted leave to
amend its pleadings to seek judicial foreclosure and filed a supplement to its
motion for summary judgment seeking judicial foreclosure. The trial court
signed a second summary judgment on July 9, 2008, that expressly stated that
it “replace[d] and supercede[d] any prior summary judgment order.”
Slay filed a motion to vacate the July 9, 2008 summary judgment order
on August 11, 2008. The trial court granted Slay’s motion on October 14,
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2008, and vacated both the June 20, 2008 and July 9, 2008 orders granting
summary judgment to Nationstar. 2 On October 20, 2008, relying on its July 3,
2008 amended petition, Nationstar filed an amended motion for summary
judgment seeking judgment for a judicial foreclosure. After a hearing on
Nationstar’s amended motion, the trial court signed a final summary judgment
for Nationstar on November 20, 2008.
III. Pleading Amendments and Trial by Consent
In his first, second, and third points, and in part of his fifth point, Slay
complains of Nationstar’s July 2008 pleading amendments. Specifically, Slay
contends the trial court should not have granted Nationstar leave to amend its
pleadings because (1) the trial court had already rendered judgment in June
2008, (2) the amendment was untimely and prejudicial to Slay, (3) there was
no trial by consent of a claim for judicial foreclosure, and (4) granting leave was
“contrary to established summary judgment procedure.”
Each of Slay’s arguments relate to the June 20 and July 9, 2008
summary judgments that the trial court vacated on October 14, 2008. But “[a]
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 Slay’s motion to vacate sought to vacate only the July 9, 2008 order
and did not seek to vacate the June 20, 2008 order. However, the trial court’s
October 14, 2008 order states, in part, that “since the July 9, 2008 Summary
Judgment was structured as a replacement of this Court’s Summary Judgment
of June 20, 2008, such earlier summary judgment should also be vacated.
Therefore, the Court sua sponte VACATES the Summary Judgment of June 20,
2008.”
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judgment that has been vacated has no legal effect” and “the matter stands
precisely as if there had been no judgment.” Pringle v. Moon, 158 S.W.3d
607, 610 (Tex. App.—Fort Worth 2005, no pet.); see also In re Hidalgo, 279
S.W.3d 456, 461 (Tex. App.—Dallas 2009, pet. filed) (“An order setting aside
or vacating a judgment returns the parties to the position they occupied before
rendition of the judgment and leaves the case as if no judgment had been
rendered.”). Thus, Slay’s complaints concerning the trial court’s grant of leave
to Nationstar to amend its pleadings are moot. See In re Gunnstaks, No. 05-
07-01289-CV, 2010 WL 22795, at *3 (Tex. App.—Dallas Jan. 6, 2010, no
pet. h.) (mem. op.) (dismissing as moot an appeal from a sanctions order
previously vacated by the trial court).
In the remainder of his fifth point, Slay cites rule 67 of the rules of civil
procedure and contends there was no trial by consent of a judicial foreclosure
claim in the November 20, 2008 summary judgment proceeding. 3 However,
Nationstar filed its amended petition and motion for leave on July 3, 2008, and
the trial court granted leave for Nationstar to amend its pleadings on July 9,
2008. Therefore, Nationstar’s pleadings included a claim for judicial foreclosure
at the time of the November 20, 2008 summary judgment, and rule 67 does
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 Rule 67 states: “When issues not raised by the pleadings are tried by
express or implied consent of the parties, they shall be treated in all respects
as if they had been raised in the pleadings.” Tex. R. Civ. P. 67.
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not apply. See Tex. R. Civ. P. 67. We overrule Slay’s first, second, third, and
fifth points.
IV. Statute of Limitations
Slay argues in his fourth point that the trial court erred by granting
judgment to Nationstar because the statute of limitations bars Nationstar’s
foreclosure claim. Citing section 16.035 of the civil practice and remedies
code, Slay argues any foreclosure must have occurred within four years of
August 5, 2003, the date upon which Nationstar accelerated the loan. Slay
concedes that Nationstar filed suit on July 11, 2007, but he contends that “no
lawful non-judicial foreclosure could be effected” after August 5, 2007, and
that “a judicial foreclosure should be barred if sought after, at the very latest,
August 5, 2007.”
Section 16.035(a) of the civil practice and remedies code states: “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.” Tex. Civ. Prac. & Rem. Code Ann.
§ 16.035(a) (Vernon 2002). Section 16.035(d) provides that the real property
lien becomes void on the expiration of the four-year limitations period. Id.
§ 16.035(d). If, as here, a loan secured by real property contains an optional
acceleration clause, “the action accrues only when the holder actually exercises
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its option to accelerate.” Holy Cross Church of God in Christ v. Wolf, 44
S.W.3d 562, 566 (Tex. 2001).
Nationstar accelerated the note on August 5, 2003, and Nationstar filed
its lawsuit to enforce the arbitrator’s award and to obtain non-judicial
foreclosure on July 11, 2007. Therefore, Nationstar filed suit within four years
of acceleration. The plain language of section 16.035(a) does not require that
the actual foreclosure occur within the four-year limitation period, but rather,
requires only that the party seeking foreclosure “bring suit . . . not later than
four years after the day the cause of action accrues.” Tex. Civ. Prac. & Rem.
Code Ann. § 16.035(a). Furthermore, because Nationstar’s July 2008
amended pleading, which asserted a claim for judicial foreclosure, was not
“wholly based on a new, distinct, or different transaction or occurrence,”
Nationstar’s July 2008 amended pleading related back to Nationstar’s timely-
filed original petition. 4 Id. § 16.068 (Vernon 2008) (providing that an amended
or supplemental pleading relates back to a timely-filed petition unless the
amended or supplemental pleading “is wholly based on a new, distinct, or
different transaction or occurrence”); see also Brewster v. Columbia Med. Ctr.
of McKinney Subsidiary, L.P., 269 S.W.3d 314, 317–18 (Tex. App.—Dallas
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 Nationstar sought foreclosure of the same lien against the same real
property in both its July 2007 original petition and its July 2008 amended
petition.
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2008, no pet.) (stating, for purposes of section 16.068, that “a ‘transaction’
is defined as a set of facts that gives rise to the cause of action premised
thereon”). We overrule Slay’s fourth point.
V. The Arbitrator’s Award
Slay argues in his sixth and seventh points that the trial court erred by
granting summary judgment for Nationstar because he cannot be personally
liable for Nationstar’s attorneys’ fees and costs since the loan is a home equity
loan and because the arbitrator exceeded his authority and displayed manifest
disregard for the law. 5 Nationstar responds that Slay is barred from asserting
this argument because he did not timely file an application or motion to vacate,
modify, or correct the arbitrator’s award. We agree with Nationstar.
Nationstar asserts the arbitration agreement in this case is governed by
the Federal Arbitration Act, but we need not decide whether the Federal
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 Specifically, Slay contends the arbitrator’s award of $36,054.85 in
attorneys’ fees and costs to Nationstar violates article XVI section 50(a)(6)(C)
of the Texas constitution because the award makes him personally liable for
damages relating to a home equity loan. Article XVI section 50(a)(6)(C) states:
(a) The homestead of a family, or of a single adult person, shall be,
and is hereby protected from forced sale, for the payment of all
debts except for: (6) an extension of credit that: (C) is without
recourse for personal liability against each owner and the spouse
of each owner, unless the owner or spouse obtained the extension
of credit by actual fraud; . . .
Tex. Const. art. XVI § 50(a)(6)(C).
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Arbitration Act or the Texas Arbitration Act controls. Both acts require a party
to file a motion or application to vacate, modify, or correct the arbitrator’s
award within a set time after the award is filed or delivered (three months under
the federal act and ninety days under the Texas act). See 9 U.S.C. § 12
(2006); Tex. Civ. Prac. & Rem. Code Ann. § 171.088(b) (Vernon 2005). A
party who fails to timely seek to vacate, modify, or correct an arbitrator’s
award forfeits his right to seek judicial review of the award. See Mauldin v.
MBNA Am. Bank, N.A., No. 02-07-00208-CV, 2008 WL 4779614, at *3 (Tex.
App.—Fort Worth 2008, no pet.) (mem. op.); La. Natural Gas Pipeline, Inc. v.
Bludworth Bond Shipyard, Inc., 875 S.W.2d 458, 462 (Tex. App.—Houston
[1st Dist.] 1994, writ denied).
In this case, the arbitrator’s award is dated March 29, 2007. Even
assuming Slay’s original answer and counterclaim constituted a motion to
vacate, modify, or correct the arbitrator’s award, Slay did not file his original
answer and counterclaim until August 15, 2007. Thus, Slay did not seek to
vacate, modify, or correct the arbitrator’s award within three months or ninety
days of the award and forfeited his right to seek judicial review of the
arbitrator’s award. Mauldin, 2008 WL 4779614, at *3; La. Natural Gas
Pipeline, Inc., 875 S.W.2d at 462. We overrule Slay’s sixth and seventh
points.
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VI. Conclusion
Having overruled each of Slay’s seven points, we affirm the trial court’s
judgment.
ANNE GARDNER
JUSTICE
PANEL: DAUPHINOT, GARDNER, and MCCOY, JJ.
DELIVERED: February 25, 2010
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