Juan Hernandez and Maria Hernandez v. MERS and Household Finance Corporation III, U.S. Bank Trust, N.A. as Trustee for LSF8 Master Participation Trust and Caliber Homes Loan, Inc.

Opinion issued October 22, 2019
In The
Court of Appeals
For The
First District of Texas
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NO. 01-18-00468-CV
———————————
JUAN HERNANDEZ AND MARIA HERNANDEZ, Appellants
V.
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.,
HOUSEHOLD FINANCE CORPORATION III, U.S. BANK TRUST, N.A.,
AS TRUSTEE FOR LSF8 MASTER PARTICIPATION TRUST, AND
CALIBER HOMES LOAN, INC., Appellees
On Appeal from the 133rd District Court
Harris County, Texas
Trial Court Case No. 2015-32570
MEMORANDUM OPINION
This appeal challenges a trial court’s dismissal of Juan Hernandez and Maria
Hernandez’s claims asserted against a lender, its predecessors-in-interest, and its
loan servicer. The controversy stems from the Hernandezes’ home-equity loan and
their failure to make the required payments on the loan. We find jurisdiction to
review, and we affirm both orders from which the Hernandezes appeal.
Background
This dispute has a long and torturous history, starting out in state court, then
removal and remand, continuing with a flood of motions in the district court, and
ending with summary judgment.
Juan Hernandez and Maria Hernandez took out a $145,600 home-equity loan
from Town and Country Credit Corporation in 2004. To secure repayment, the
Hernandezes signed a deed of trust along with the note. The deed of trust granted
Town and Country a first-lien security interest in the Hernandezes’ home. Town
and Country then assigned the note and deed of trust to Ameriquest Mortgage
Company, 1 which later assigned the note and deed of trust to Mortgage Electronic
Registration Systems, Inc. (“MERS”). MERS eventually assigned the loan to
Household Finance Corporation III (“HFC”).
In 2011, the Hernandezes defaulted on their monthly loan payments. After
satisfying the statutory notice and other procedural requirements, HFC obtained a
court order authorizing foreclosure on the property. U.S. Bank Trust, N.A., as
Trustee for LSF8 Master Participation Trust (“U.S. Bank Trust”), bought the
property at a foreclosure auction in 2015. HFC then assigned the note and deed of
1
Ameriquest Mortgage Company is not a party to this appeal.
2
trust to U.S. Bank Trust. Caliber Home Loans, Inc. (“Caliber”) was servicer of the
note and deed of trust at all times relevant to the foreclosure sale and the notices of
the sale.
U.S. Bank Trust gave notice to the Hernandezes to surrender possession of
the property. The Hernandezes did not surrender possession, and U.S. Bank Trust
filed a forcible detainer action in justice court to evict them from the property. The
justice court issued an order to evict the Hernandezes in 2015.
The Hernandezes appealed the justice court’s eviction order to the county
court, and the county court ruled that U.S. Bank Trust was entitled to immediate
possession of the property and to a writ of possession if the Hernandezes failed to
vacate the premises within one week.
Without complying with this possession order, the Hernandezes then sued
U.S. Bank Trust, Caliber, HFC, and MERS in state district court2 and alleged the
following claims: (1) violation of the Texas Civil Practice and Remedies Code
section 12.002 (addressing liability related to use of fraudulent court record or lien
or claim against property); (2) violation of the Texas Penal Code sections 32.21
(defining criminal forgery) and 32.47 (prohibiting fraudulent destruction, removal,
2
The Hernandezes also named Town and Country Credit Corp., U.S. Bank Trust, as
Trustee for the Household Home Equity Loan Trust 2004-1, HFC Revolving
Corporation, and Ameriquest Mortgage Company as defendants. However, these
entities are not parties to this appeal.
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or concealment of writing); (3) negligence per se; (4) gross negligence; (5) lack of
standing to foreclose; (6) statutory fraud; (7) violation of the Truth in Lending Act;
(8) violation of the Texas Constitution article XVI, section 50(a)(6)(D); (9)
violation of the Texas Property Code § 51.0075(e); (10) for declaratory relief; (11)
to quiet title; and (12) “breach of contract/lack of contractual standing.”
U.S. Bank Trust, MERS, and Caliber removed the case to federal court on
federal question jurisdiction (the Truth in Lending Act claim). Caliber and U.S.
Bank Trust moved for summary judgment. In September 2016, the federal district
court granted Caliber and U.S. Bank Trust’s motion for summary judgment and
disposed of the claims for lack of standing to foreclose, statutory fraud, the Truth
in Lending Act, the Texas Constitution article XVI, section 50(a)(6)(D), Texas
Property Code section 51.0075(e), declaratory relief, quiet title, and breach of
contract/lack of standing. The federal court held that U.S. Bank Trust had standing
to foreclose and “establish[ed] it is the proper holder of the note and deed of trust”
and that the Hernandezes lacked standing to challenge the assignments.
The Hernandezes filed a motion for leave to amend their complaint and a
motion for remand, both seeking to non-suit the violation of the Truth in Lending
Act claim against all parties. In January 2017, the magistrate judge filed a report
and recommendation denying supplemental jurisdiction over the remaining state
law claims and remanding the Hernandezes’s remaining claims to state court. The
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magistrate judge also recommended denying the other pending motions without
prejudice to being asserted in state court upon remand. The district court signed an
order adopting the recommendations, dismissing the Truth in Lending Act claim
against Caliber, HFC, MERS, and U.S. Bank Trust, and remanded the case to state
court.3 The Hernandezes did not appeal that order.4
On remand, the Hernandezes filed a third amended petition and added
several new causes of action against MERS and HFC, and one additional claim
against Caliber and U.S. Bank Trust.
MERS and HFC then filed a traditional and no-evidence motion for
summary judgment in the trial court. They raised the affirmative defenses of res
judicata and collateral estoppel to bar relitigation of all claims asserted against
them. Similarly, Caliber and U.S. Bank Trust filed a traditional and no-evidence
summary-judgment motion, requesting dismissal of remaining claims that were not
3
The remaining state law claims against Caliber and U.S. Bank Trust include the
following: violation of the Texas Civil Practice and Remedies Code section
12.002, violation of the Texas Penal Code sections 32.21 and 32.47, negligence
per se, and gross negligence.
4
The order became final and not subject to appeal because the Hernandezes failed
to timely appeal the order. See FED. R. APP. P. 4(a)(1) (prescribing thirty-day
period to file notice of appeal); see also HDW2000 256 E. 49th St. v. City of
Houston, No. 01-12-00053-CV, 2012 WL 6095226, at *10 (Tex. App.—Houston
[1st Dist.] Dec. 6, 2012, pet. denied) (mem. op.) (citations omitted) (“A federal
district court’s grant of summary judgment on all federal claims and remand of all
remaining state law claims in a partial-summary judgment is an appealable final
order because there is nothing left for the federal court to decide.”).
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dismissed in the federal court proceedings. They argued that these remaining
claims were barred by res judicata and collateral estoppel.
In April 2018, the district court granted both motions for summary judgment
without specifying the grounds relied on for its rulings and issued two orders
disposing of all parties and claims—one reflecting that it was a partial judgment
and the other order stating it was a final judgment. The Hernandezes appeal from
both summary judgment orders.
DISCUSSION
A. Finality
We first determine the extent of our jurisdiction over the rulings that the
Hernandezes appeal. MERS and HFC assert that the Hernandezes prematurely
filed this appeal because no final judgment has been rendered and request that we
abate to allow the district court to clarify its orders. Caliber and U.S. Bank Trust
disagree. They contend that the trial court entered a final judgment, disposing of all
claims and all parties.
Absent certain statutory exceptions that do not apply to this case, appeals
may only be taken from a final judgment. See Lehmann v. Har-Con Corp., 39
S.W.3d 191, 195 (Tex. 2001); but see TEX. CIV. PRAC. & REM. CODE § 51.014
(permitting, in some cases, interlocutory appeals from orders disposing of specified
claims and issues). When, as here, “there has not been a conventional trial on the
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merits, an order or judgment is not final for purposes of appeal unless it actually
disposes of every pending claim and party or unless it clearly and unequivocally
states that it finally disposes of all claims and all parties.” Lehmann, 39 S.W.3d at
205. A review of the record determines whether an order disposes of all pending
claims and parties. Id. at 205–06.
In the trial court, Caliber and U.S. Bank Trust moved for traditional and no-
evidence summary judgment, asserting res judicata and collateral estoppel
affirmative defenses against the Hernandezes’s claims. The underlying issue on
which the Hernandezes based their claims—the deed assignments—was already
litigated in federal court. The trial court granted summary judgment and entered an
order stating that it is a “partial judgment.” The trial court granted Caliber and U.S.
Bank Trust’s summary judgment motion “on all grounds” and ordered that the
Hernandezes “take nothing on all of their claims” against Caliber and U.S. Bank
Trust. MERS and HFC also moved for traditional and no-evidence summary
judgment on all claims asserted by the Hernandezes. They argued that res judicata
and collateral estoppel barred litigation of their claims and requested “an order . . .
disposing of all causes of action asserted against” them based on res judicata and
collateral estoppel. The trial court subsequently granted MERS and HFC’s motion
for summary judgment. The order expressly stated, “This Order resolves all claims
between all parties, and therefore the Court hereby renders FINAL
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JUDGMENT.” Because this order unequivocally states that it “disposes of all
claims and all parties,” this order is a final judgment. Lehmann, 39 S.W.3d at 200
(“A judgment that actually disposes of every remaining issue in a case is not
interlocutory merely because it recites that it is partial or refers to only some of the
parties or claims. Thus, if a court has dismissed all of the claims in a case but one,
an order determining the last claim is final.”).
For these reasons, the record shows the combination of both orders creates a
final and appealable judgment and we have appellate jurisdiction.
B. Standard of review
We review summary judgments de novo. Godoy v. Wells Fargo Bank, N.A.,
575 S.W.3d 531, 536 (Tex. 2019). When, as here, the trial court grants summary
judgment without specifying the grounds for granting the motion, we must affirm
its judgment if any one of the grounds is meritorious. Browning v. Prostok, 165
S.W.3d 336, 344 (Tex. 2005). In reviewing the grounds for summary judgment, we
take as true all evidence favorable to the nonmovant and indulge every reasonable
inference and resolve any doubts in the nonmovant’s favor. Sommers for Ala. &
Dunlavy, Ltd. v. Sandcastle Homes, 521 S.W.3d 749, 754 (Tex. 2017). When the
trial court does not specify the grounds for granting the motion, as is the case here,
we must uphold the judgment if any of the grounds asserted in the motion and
preserved for appellate review are meritorious. Merriman v. XTO Energy, Inc., 407
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S.W.3d 244, 248 (Tex. 2013). If the appellant fails to challenge all possible
grounds, we must accept the validity of the unchallenged grounds and affirm the
adverse ruling. Malooly Bros., Inc. v. Napier, 461 S.W.2d 119, 121 (Tex. 1970)
(“The judgment must stand, since it may have been based on a ground not
specifically challenged by the plaintiff and since there was no general assignment
that the trial court erred in granting summary judgment.”); see, e.g., Taylor v.
CenterPoint Energy Houston Elec., LLC, No. 01-16-00466-CV, 2017 WL
1536266, at *1 (Tex. App.—Houston [1st Dist.] Apr. 27, 2017, no pet.) (mem. op.)
(applying Malooly Bros., Inc. and affirming summary judgment because appellant
failed to brief each independent ground for summary judgment alleged in the
motion).
A party seeking summary judgment may move for both traditional and no-
evidence summary judgment. TEX. R. CIV. P. 166a(c), (i); see Binur v. Jacobo,
135 S.W.3d 646, 650 (Tex. 2004). When a party has sought summary judgment on
both grounds, we typically first review the no-evidence grounds. See Merriman,
407 S.W.3d at 248. We will not address the traditional motion if we determine the
trial court properly granted the no-evidence summary-judgment motion on the
same claims. See Lightning Oil Co. v. Anadarko E&P Onshore, LLC, 520 S.W.3d
39, 45 (Tex. 2017).
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On the no-evidence grounds, the movant bears the burden to specifically
identify one or more elements for which there is no evidence. TEX. R. CIV. P.
166a(i); see Cmty. Health Sys. Prof’l Services Corp. v. Hansen, 525 S.W.3d 671,
695–96 (Tex. 2017). The burden then shifts to the nonmovant to present more than
a scintilla of evidence raising a genuine issue of material fact as to each challenged
element. Lightning Oil Co., 520 S.W.3d at 45. On the traditional grounds, the
movant bears the burden to show that no genuine issue of material fact exists and
that it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); see City of
Richardson v. Oncor Elec. Delivery Co. LLC, 539 S.W.3d 252, 259–60 (Tex.
2018). To meet this burden, the movant must conclusively negate at least one
essential element of each of the nonmovant’s causes of action or conclusively
prove all the elements of an affirmative defense. KCM Fin. LLC v. Bradshaw, 457
S.W.3d 70, 79 (Tex. 2015) (citing TEX. R. CIV. P. 166a(c)).
C. Whether failure to challenge all possible grounds bars review of merits
of all claims
On remand, the Hernandezes asserted their claims against MERS and HFC,
contesting the assignments of the note and deed of trust. MERS and HFC moved
for summary judgment on all claims asserted by the Hernandezes on the grounds of
res judicata and collateral estoppel. Specifically, they argued that res judicata and
collateral estoppel barred relitigation of all claims because the federal court had
already determined the Hernandezes do not have standing to challenge the
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assignments and because the evidence revealed that there was a sufficient chain of
title. MERS and HFC also attacked specific elements of each claim and asserted
that the Hernandezes did not present evidence for the elements.
Similarly, the Hernandezes asserted their claims against Caliber and U.S.
Bank trust, challenging the assignments of the note and deed of trust. Caliber and
U.S. Bank Trust also filed traditional and no-evidence summary judgment motions
and asserted two affirmative defenses against these claims: res judicata and
collateral estoppel. Caliber and U.S. Bank Trust specifically argued that the federal
court dismissed several of the Hernandezes’s claims in federal court and res
judicata and collateral estoppel barred relitigation of the remaining claims because
of the court’s holding that “established standing to foreclose by both an unbroken
chain of recorded assignments and . . . [its]holding the [n]ote [was] indorsed in
blank at all relevant times.” The court, more importantly, held that the
Hernandezes lacked standing to challenge the assignments. Caliber and U.S. Bank
Trust challenged each element of the remaining claims asserted by the
Hernandezes, asserting no evidence existed for certain elements.
Neither order granting summary judgment specified the particular grounds
on which it was rendered; therefore, the Hernandezes must defeat every ground
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raised by the motion.5 See Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex.
1995) (citing Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989)). The
Hernandezes do not do so here.
In order to negate each possible ground, the Hernandezes must comply with
the Rules of Appellate Procedure and present arguments and supporting authority
to merit reversal. TEX. R. APP. P. 38.1(h) (requiring that appellant’s brief contain
clear, concise argument for contentions asserted); TEX. R. APP. P. 38.1(f) (requiring
that appellant’s brief state all issues and points presented for review; further
requiring that this Court consider statement of issue “as covering every subsidiary
question that is fairly included”); see Klentzman v. Brady, 312 S.W.3d 886, 899
(Tex. App.—Houston [1st Dist.] 2009, no pet.) (“Although we recognize that such
a broad [Malooly] issue is authorized, an appellant must nevertheless also present
argument and supporting authorities in support of that issue.”).
The Hernandezes failed to address res judicata and collateral estoppel. These
defenses were discussed at length in each summary-judgment motion. The
Hernandezes not only do not discuss the defenses, they omit any discussion of this
case’s removal to federal court or the orders issued by that court before remand.
Indeed, the Hernandezes’ brief repeats nearly word for word the arguments raised
5
An appellant may also assert a general complaint that the trial court erred in
granting summary judgment. See Malooly Bros. Inc., 461 S.W.2d at 121. The
Hernandezes, however, make no such assertion.
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in their original petition (and subsequent amendments) without regard to the
federal action on which the defenses are based. Nowhere in their brief do they
expressly or implicitly challenge the defenses of res judicata or collateral estoppel
as independent, alternative grounds upon which the trial court could have based its
decision to grant summary judgment in favor of MERS, HFC, Caliber, and U.S.
Bank Trust. Moreover, the Hernandezes offer no legal analysis, argument, citations
to the record, nor any authorities that would support a conclusion that their claims
are not barred by collateral estoppel or res judicata. See TEX. R. APP. P. 38.1(h).
Because the trial court could have granted summary judgment on the basis
that the Hernandezes’s claims were barred by either res judicata or collateral
estoppel, and the Hernandezes did not brief either ground, we must accept the
validity of the unchallenged grounds and affirm the summary judgment. See
Malooly Bros., Inc. v. Napier, 461 S.W.2d at 121; McIntyre v. Wilson, 50 S.W.3d
674, 681–82 (Tex. App.—Dallas 2001, pet. denied) (upholding summary judgment
because trial court could have granted summary judgment on ground that appellant
did not challenge or discuss); Iglesia Hispana Nueva Vida Houston, Inc. v. Rosin,
No. 01–06–00048–CV, 2007 WL 1633723, at *3 (Tex. App.—Houston [1st Dist.]
June 7, 2007, no pet.) (mem. op.) (affirming summary judgment on collateral
estoppel because appellant did not address it as possible ground for trial court’s
summary-judgment ruling).
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Under these circumstances, we need not consider the arguments in support
of the Hernandezes’s various issues challenging the trial court’s summary
judgment orders because we must affirm the trial court’s decision to grant
summary judgment in favor of MERS, HFC, Caliber, and U.S. Bank Trust on the
unchallenged grounds of res judicata and collateral estoppel.
Conclusion
We affirm the judgment of the trial court.
Sarah Beth Landau
Justice
Panel consists of Justices Lloyd, Goodman, and Landau.
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