Chinara Butler v. Deutsche Bank National Trust Company as Trustee for the Registered Holders of Morgan Stanley ABS Capital Inc.

In The
Court of Appeals
Ninth District of Texas at Beaumont
__________________
NO. 09-20-00137-CV
__________________
CHINARA BUTLER, Appellant
V.
DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE FOR
THE REGISTERED HOLDERS OF MORGAN STANLEY ABS CAPITAL
INC., Appellee
__________________________________________________________________
On Appeal from the 136th District Court
Jefferson County, Texas
Trial Cause No. D-201,752
__________________________________________________________________
MEMORANDUM OPINION
In a restricted appeal from a take-nothing judgment in a wrongful foreclosure
suit, Chinara Butler argues (1) she satisfied the first three requirements of Texas
Rule of Appellate Procedure 30, (2) the trial court’s erroneous grant of a motion for
summary judgment constitutes error on the face of the record, (3) that as an heir and
interested person of the deceased debtor she was entitled to notice under section
355.157 of the Estates Code and section 51.002 of the Property Code, and (4)
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genuine issues of material fact preclude summary judgment. The appellee, Deutsche
Bank National Trust Company as Trustee for the registered holders of Morgan
Stanley ABS Capital Inc. (“Deutsche Bank” or “the Bank”) filed a combined no-
evidence and traditional motion for summary judgment seeking a take-nothing
judgment on all causes of action asserted against it by Butler. We affirm the trial
court’s judgment.
Background
In her original petition, which Butler filed on May 14, 2018, Butler alleged
she filed suit in her capacity as the widow of Chad Butler. Butler alleged that she
gained ownership of the subject property through a deed executed on August 14,
2006. The general warranty deed with vendor’s lien attached to the petition recites
that the grantee is Chad L. Butler, an Unmarried Man. Butler alleged that the
property was sold at a foreclosure sale on August 5, 2008, but the following month
Deutsche Bank recorded a Rescission for Acceleration and Foreclosure Sale and of
Substitute Trustee’s Deed. Butler alleged several notices of substitute trustee’s sale
were filed from 2008 through 2011. Butler alleged that the note remained in
acceleration until April 2, 2018, the date Deutsche Bank posted a notice of substitute
trustee’s sale for May 1, 2018. Butler alleged Deutsche Bank sent Butler a notice to
vacate after taking title to the property at the May 1, 2018 substitute trustee’s sale.
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Butler pleaded two counts of wrongful foreclosure. In Count 1, she alleged
Deutsche Bank was liable for a wrongful foreclosure because it caused the property
to be sold at a foreclosure sale more than four years after the October 2008
acceleration of the note secured by the trustee’s deed. Butler alleged she was
damaged by the loss of her equity in her home. In Count 2, Butler alleged Deutsche
Bank was liable for a wrongful foreclosure because it failed to comply with Texas
Rule of Civil Procedure 21(b) by providing at least three days’ hearing notice to
Butler, or to her minor child and heir to Chad Butler’s estate, before the probate
court granted Deutsche Bank’s Application to Foreclose Preferred Lien on Real
Property. She alleged Deutsche Bank’s failure to comply with Rule 21(b) of the
Texas Rules of Civil Procedure caused her to lose the opportunity to defend her
property against a foreclosure sale and she suffered damages in that she lost her
property.
Butler’s original petition alleged Deutsche Bank also was liable in tort for
negligently executing a foreclosure sale barred by limitations and the bank’s
negligence caused Butler to lose her home. She further alleged Deutsche Bank was
liable in gross negligence because it acted with an objective extreme degree of risk
and conscious indifference. Butler sought a declaratory judgment that limitations
barred foreclosure. She requested a temporary restraining order, a temporary
injunction, and a permanent injunction against selling or encumbering the property.
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Butler’s prayer for relief requested an order setting aside the foreclosure, interest,
and attorney’s fees.
Deutsche Bank answered the suit with a general denial and asserted various
affirmative defenses. On December 6, 2019, Deutsche Bank filed a combined no-
evidence and traditional motion for summary judgment. The no-evidence motion for
summary judgment urged that Butler had no evidence of irregularity in the
foreclosure proceeding as alleged in Count 1 of her wrongful foreclosure pleading.
In particular, Deutsche Bank asserted that Butler had no evidence that the 2008
Notice of Acceleration remained in effect after Deutsche Bank filed its Rescission
of Acceleration. The no-evidence portion of the motion for summary judgment did
not address Count 2 of the wrongful foreclosure claim. Deutsche Bank moved for
summary judgment on Butler’s claims for negligence and gross negligence because
she had no evidence of a legal duty owed by Deutsche Bank to Butler. Deutsche
Bank claimed Butler had no evidence to support a duty-creating special relationship
between Butler and Deutsche Bank and no evidence that Deutsche Bank breached
any duty of care by foreclosing on the property more than four years after
acceleration.
Deutsche Bank’s traditional motion for summary judgment asserted Butler’s
limitations-based wrongful foreclosure claims, including her requests for injunctive
relief, failed as a matter of law because the 2008 Rescission of Acceleration
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conclusively established that Deutsche Bank abandoned the 2008 acceleration that
Butler alleged started limitations. Deutsche Bank maintained that to the extent Butler
relied upon accelerations triggered from 2009 through 2011, a declaration by Senior
Loan Analyst Katherine Ortwerth and documents attested by her conclusively
established that such accelerations were abandoned by the acceptance of mortgage
payments and the operative acceleration occurred on March 29, 2018.
The evidence attached to the motion for summary judgment included a
declaration by counsel for Deutsche Bank that Butler failed to respond to requests
of admissions, thereby admitting that she signed a Loan Modification Agreement,
and that the agreement is in default. The Loan Modification Agreement, submitted
to the trial court as summary judgment evidence, establishes that in 2013 Chinara
Butler signed a Loan Modification Agreement for the Estate of Chad Butler. The
agreement established a new principal balance of $267,000 and provided that the
Note will become contractually current upon signing the agreement.
Deutsche Bank’s traditional motion for summary judgment on Count 2 of
Butler’s wrongful foreclosure claim asserted that as a matter of law Butler and her
daughter were not entitled to notice of the probate court’s hearing on Deutsche
Bank’s application for foreclosure. Deutsche Bank argued Section 355.157 of the
Texas Estates Code required citation issue only to the personal representative or a
person having a security interest against the property, and “[n]either [Butler] nor her
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daughter were a party to the probate action, since at the time of the hearing [Butler]
had been removed as the dependent administrator.” Deutsche Bank referred to two
orders that Butler attached to her original petition: (1) the probate court’s October
28, 2016 Order, which removed Butler as the administrator of the estate and
appointed Wyatt Snider as temporary administrator of the estate; and (2) the probate
court’s August 23, 2017 order granting Deutsche Bank’s application to foreclose a
preferred lien on property.
Butler did not file a response to the motion for summary judgment. On January
17, 2020, the trial court granted Deutsche Bank’s motion for summary judgment in
its entirety and ordered that Butler take nothing in her suit against Deutsche Bank.
On April 17, 2020, Butler filed a notice of restricted appeal.
Restricted Appeal
To attack an order by restricted appeal, the appealing party must show: (1) she
filed a notice of restricted appeal within six months after the judgment or
complained-of order was signed; (2) she was a party to the underlying lawsuit; (3)
she did not participate in person or through counsel in the hearing that resulted in
the judgment or complained-of order and did not timely file any post-judgment
motions or request findings of fact or conclusions of law; and (4) error is apparent
on the face of the record. Pike-Grant v. Grant, 447 S.W.3d 884, 886 (Tex. 2014); see
also Tex. R. App. P. 26.1(c), 30. Deutsche Bank concedes that Butler did not
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respond to the motion for summary judgment granted by the trial court in the order
that disposed of the case. The clerk’s record contains no post-judgment motions.
Butler filed her notice of appeal within six months of the date on which the trial court
signed the final judgment. Accordingly, the issue in dispute in this appeal concerns
whether Butler established error on the face of the record. This element of a restricted
appeal is not jurisdictional. See Ex parte E.H., 602 S.W.3d 486, 497 (Tex. 2020).
Review by restricted appeal affords review of the entire case and thus permits
the same scope of review as an ordinary appeal, but the face of the record must reveal
the claimed error. Ginn v. Forrester, 282 S.W.3d 430, 431 (Tex. 2009). The appellate
court cannot infer error from a silent record. Id. at 433.
Summary Judgment Review
We review a summary judgment de novo. Shell Oil Co. v. Writt, 464 S.W.3d
650, 654 (Tex. 2015). If the trial court’s order granting summary judgment does not
specify the basis for the ruling, we must affirm the trial court’s judgment on any
meritorious theory advanced by the movant in the motion for summary judgment.
W. Invs., Inc. v. Urena, 162 S.W.3d 547, 550 (Tex. 2005). In reviewing a summary
judgment, we consider the evidence in the light most favorable to the non-movant
and resolve any doubt in the non-movant’s favor. Ford Motor Co. v. Ridgway, 135
S.W.3d 598, 601 (Tex. 2004); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-
49 (Tex.1985).
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We consider the no-evidence ruling before we consider the ruling on the
traditional motion for summary judgment. See Ridgway, 135 S.W.3d at 600. “If the
nonmovant fails to produce more than a scintilla of evidence on the essential
elements of a cause of action challenged by a no-evidence motion, there is no need
to analyze the movant’s traditional grounds for summary judgment.” Cmty. Health
Sys. Prof’l Servs. Corp. v. Hansen, 525 S.W.3d 671, 680-81 (Tex. 2017). A party
may move for summary judgment on the ground that there is no evidence of one or
more essential elements of a claim or defense on which the adverse party would have
the burden of proof at trial. See Tex. R. Civ. P. 166a(i). The trial court must grant a
no-evidence motion if (1) there is a complete absence of evidence of a vital fact, (2)
the court is barred by rules of law or of 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 established the
opposite of the vital fact. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex.
2003). We apply the same legal sufficiency standard that we apply in reviewing a
directed verdict because an order granting a no-evidence motion for summary
judgment functions essentially as a pretrial directed verdict. Id. at 750-51. “A
genuine issue of material fact exists if more than a scintilla of evidence establishing
the existence of the challenged element is produced.” Ridgway, 135 S.W.3d at 600.
“When the evidence offered to prove a vital fact is so weak as to do no more than
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create a mere surmise or suspicion of its existence, the evidence is no more than a
scintilla and, in legal effect, is no evidence.” Kindred v. Con/Chem, Inc., 650 S.W.2d
61, 63 (Tex. 1983).
Summary Judgment on No-Evidence Motion
Citing C & K Investments v. Fiesta Group, Inc., Butler argues Deutsche
Bank’s no-evidence motion for summary judgment on Butler’s wrongful foreclosure
claim is insufficient because the motion incorrectly stated the element of damages
as a grossly inadequate selling price when the correct measure of damages is the
difference in the value of the property on the date of the foreclosure and the
indebtedness. See 248 S.W.3d 234, 254 (Tex. App.—Houston [1st Dist.] 2007, no
pet.). A no-evidence motion for summary judgment “must state the elements as to
which there is no evidence.” See Tex. R. Civ. P. 166a(i). Deutsche Bank’s no-
evidence motion for summary judgment on Butler’s wrongful foreclosure claim
challenged only the element of irregularity of the foreclosure as to Count 1.
Accordingly, Butler was not harmed by any misstatement of the damages element
of Count 1 of Butler’s wrongful foreclosure claim.
Deutsche Bank’s no-evidence motion for summary judgment also challenged
Butler’s negligence claims on the elements of existence of a legal duty and breach
of duty. In her appeal, Butler’s sole mention of her claims of negligence and gross
negligence is to state that “these causes of action proved immaterial.” Regarding the
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negligence and gross negligence claims, Butler inadequately briefed her argument
that the trial court erred by granting a no-evidence motion for summary judgment.
See Tex. R. App. P. 38.1(i) (providing that appellate briefs must contain appropriate
citations to authorities).
Butler argues the evidence submitted in support of and attached to Deutsche
Bank’s motion for summary judgment raises fact issues on the claims challenged by
the no-evidence motion for summary judgment, but Butler did not refer the trial court
to that evidence in a response to the no-evidence motion for summary judgment. To
defeat a motion made under Rule 166a(i), “the respondent is not required to marshal
its proof; its response need only point out evidence that raises a fact issue on the
challenged elements.” See Tex. R. Civ. P. 166a cmt. (1997). If the non-movant fails
to respond to a properly presented no-evidence motion for summary judgment, the
trial court must grant the motion for summary judgment. In re Kingman Holdings,
LLC, No. 13-21-00217-CV, 2021 WL 4301810, at * 4 (Tex. App.—Corpus Christi-
Edinburg Sept. 22, 2021, orig. proceeding) (mem. op.).
In her appeal, Butler does not argue that the face of the record reveals a defect
of summary judgment procedure. Any defect in notice of the filing and submission
of the motion for summary judgment would have to appear on the face of the record.
See Taylor v. Perricone, No. 03-16-00331-CV, 2017 WL 3585215, at *3 (Tex. App.
—Austin Aug. 16, 2017, no pet.) (mem. op.). Deutsche Bank filed the motion for
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summary judgment over eighteen months after Butler filed her lawsuit. Some
discovery had been requested and Butler did not request additional time to conduct
discovery. Deutsche Bank filed the motion for summary judgment more than twenty-
one days before the trial court granted the motion. Butler cannot show error on the
face of the record because the record shows that she failed to file a response to
Deutsche Bank’s no-evidence motion for summary judgment. We conclude the trial
court did not err in granting summary judgment on Butler’s claims for negligence,
gross negligence, and wrongful foreclosure based on limitations.
Summary Judgment on Traditional Motion
A motion for summary judgment must itself state the specific grounds for
which the movant seeks judgment. McConnell v. Southside Indep. Sch. Dist., 858
S.W.2d 337, 339 (Tex. 1993). Deutsche Bank omitted Count 2 of Butler’s wrongful
foreclosure claim from its no-evidence motion for summary judgment but included
it in that part of the motion seeking traditional summary judgment. Accordingly, we
apply the standard of review for a traditional motion for summary judgment in
reviewing the trial court’s judgment that Butler take nothing on her claim that
Deutsche Bank wrongfully foreclosed on her home due to lack of notice.
The movant on a traditional motion for summary judgment has the burden of
showing that no genuine issue of material fact exists and that it is entitled to
judgment as a matter of law. Hillis v. McCall, 602 S.W.3d 436, 439-40 (Tex. 2020);
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Tex. R. Civ. P. 166a(c). If the movant satisfies this initial burden on the issues
expressly presented in the motion, then the burden shifts to the nonmovant to present
to the trial court any issues or evidence that would preclude a summary judgment.
See City of Hous. v. Clear Creek Basin Auth., 589 S.W.2d 671, 678-79 (Tex. 1979).
“Issues not expressly presented to the trial court by written motion, answer or other
response shall not be considered on appeal as grounds for reversal.” Tex. R. Civ. P.
166a(c). Consequently, the non-movant must expressly present in writing any
reasons the non-movant contends avoids the movant’s entitlement to summary
judgment. Clear Creek Basin Auth., 589 S.W.2d at 677-78.
Deutsche Bank’s traditional motion for summary judgment on Count 2 of
Butler’s wrongful foreclosure claim asserted that as a matter of law Butler and her
daughter were not entitled to notice of the probate court’s hearing on Deutsche
Bank’s application for foreclosure because Section 355.157 of the Texas Estates
Code required citation issue only to the personal representative or a person having a
security interest against the property, and “[n]either [Butler] nor her daughter were
a party to the probate action, since at the time of the hearing [Butler] had been
removed as the dependent administrator.”
In Count 2 of her wrongful foreclosure claim, Butler did not plead that she
was entitled to service by citation but had not been served with citation; rather, she
pleaded that she had not been served with the notice of the hearing required for a
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party appearing in the case. See Tex. R. Civ. P. 21(b) (“An application to the court
for an order and notice of any hearing thereon, not presented during a hearing or
trial, must be served upon all other parties not less than three days before the time
specified for the hearing, unless otherwise provided by these rules or shortened by
the court.”).
On October 28, 2016, the probate court removed Butler as the representative
of the estate and appointed a temporary administrator. That order concluded a
discrete phase of the probate proceeding. See Kirkland v. Schaff, 391 S.W.3d 649,
655 (Tex. App.—Dallas 2013, no pet.); In re Estate of Washington, 262 S.W.3d 903,
905 (Tex. App.—Texarkana 2008, no pet.). The administrator of the estate was a
necessary party to Deutsche Bank’s application to foreclose its preferred lien. See
Tex. Est. Code Ann. § 355.157(a)(1). The probate court’s August 23, 2017 order
granting Deutsche Bank’s application for a non-judicial foreclosure recited that
Deutsche Bank established its claim by suit and fixed as a preferred debt and lien
claim on the property, that the application and citation had been served on the
representative of the estate, and that any other persons interested in the estate had
been served by posting. See Tex. Est. Code Ann. § 355.157. The probate court’s
August 23, 2017 order identifies no other person who had appeared in that discrete
phase of the probate case.
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After her removal as administrator, Butler would be entitled to notice of the
hearing if she had made an appearance in the subsequent phase of the probate case.
See Tex. R. Civ. P. 21(b). A party enters a general appearance by (1) invoking the
judgment of the court on any question other than the court’s jurisdiction, (2)
recognizing by her acts that an action is properly pending, or (3) seeking affirmative
action from the court. In re Guardianship of Fairley, No. 20-0328, 2022 WL 627776,
at *10 (Tex. Mar. 4, 2022) (not yet reported). Deutsche Bank’s summary judgment
evidence established that Butler did not appear in the probate court in opposition to
Deutsche Bank’s application; consequently, she was not a party entitled to three
days’ notice of the hearing in the probate court. See Tex. R. Civ. P. 21(b). Butler did
not file a summary judgment response that raised a fact issue that she was entitled
to three days’ notice of the hearing on Deutsche Bank’s foreclosure application
because she had entered her appearance in the phase of the probate case where
Deutsche Bank applied for an order to allow the non-judicial foreclosure to proceed.
Having failed to present the issue to the trial court as a ground for avoiding Deutsche
Bank’s motion for summary judgment, she cannot argue it as a ground for reversal
on appeal. See Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995);
Clear Creek Basin Auth., 589 S.W.2d at 678-79.
In her appeal, Butler also argues she was entitled to notice under section
51.002 of the Texas Property Code. See Tex. Prop. Code Ann. § 51.002(b)(3)
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(requiring “written notice of the sale by certified mail on each debtor who, according
to the records of the mortgage servicer of the debt, is obligated to pay the debt[.]”).
Butler neither pleaded in her original petition that the foreclosure was wrongful due
to non-compliance with section 51.002 nor presented such non-compliance as a
ground for avoiding summary judgment. She cannot raise the argument for the first
time in her appeal. See Clear Creek Basin Auth., 589 S.W.2d at 678-79.
Butler asks this Court to take judicial notice of the date of marriage on her
marriage certificate. See Tex. R. Evid. 201. An appellate court generally cannot
consider material that was not before the trial court when the court made the
challenged ruling. Hammer v. Hammer, No. 03-18-00715-CV, 2021 WL 1916481,
at *2-3 (Tex. App.—Austin May 13, 2021, no pet.) (mem. op.); Van Tran v.
Fiorenza, 934 S.W.2d 740, 742 (Tex. App.—Houston [1st Dist.] 1996, no writ).
Butler has not shown that the document is summary judgment evidence that could
raise a fact issue to avoid summary judgment, nor has she established that the
document appears on the face of the record for purposes of establishing error
requiring reversal for a restricted appeal. We decline to take judicial notice of a
document that we cannot consider in our review of the trial court’s judgment. See
Van Tran, 934 S.W.2d at 742.
We conclude the trial court did not err by granting the motion for summary
judgment. Accordingly, we hold that no error on the face of the record supports the
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restricted appeal. We affirm the trial court’s judgment that Butler take nothing in her
suit against Deutsche Bank.
AFFIRMED.
_________________________
CHARLES KREGER
Justice
Submitted on January 11, 2022
Opinion Delivered April 28, 2022
Before Golemon, C.J., Kreger and Horton, JJ.
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