Alanis v. US Bank Nat'l Ass'n

489 S.W.3d 485

Nancy Alanis, Appellant

v.US Bank National Association as Successor Trustee to Bank of America, National Association, as Successor by Merger to One LaSalle Bank, N.A. as Trustee for the MLMI Trust Series 2006–HE6, BAC Home Loans Servicing, LP, as Successor by Merger to Wilshire Credit Corporation, and the Law Offices of Mann & Stevens, PC, AppelleesandUS Bank National Association as Successor Trustee to Bank of America, National Association, as Successor by Merger to One LaSalle Bank, N.A. as Trustee for the MLMI Trust Series 2006–HE6, and BAC Home Loans Servicing, LP, as Successor by Merger to Wilshire Credit Corporation, Cross–Appellants

v.Nancy Alanis, Cross–Appellee

NO. 01–14–00559–CV

Court of Appeals of Texas, Houston (1st Dist.).

Opinion issued November 3, 2015

Rehearing Overruled May 30, 2016

Philip M. Ross, San Antonio, Texas, for Appellant.

Nathan T. Anderson, R. Dwayne Danner, McGlinchey Stafford, PLLC, Dallas, TX, Michael B. Johnson, Sean M. Crowley, Thompson, Coe, Cousins & Irons, L.L.P., Austin, TX, for Appellees.

Panel consists of Justices Keyes, Huddle, and Lloyd.

OPINION

Evelyn V. Keyes, Justice

Appellant and cross-appellee, Nancy Alanis, sued appellees, U.S. Bank National Association (“US Bank”), BAC Home Loans Servicing, L.P. (“BAC”), and the Law Offices of Mann & Stevens (“Mann & Stevens”) for fraud and violations of various debt collection statutes relating to the foreclosure of her property in San Antonio, Texas.¹ Following a jury trial, the trial court rendered judgment in part based on the jury's verdict and in part based on the various motions for judgment notwithstanding the verdict (“JNOV”) filed by the parties. It awarded Alanis damages for U.S. Bank's violation of the Texas Fair Debt Collection Practices Act (“FDCPA”) and for BAC's common-law fraud, including attorney's fees. The trial court rendered a take-nothing judgment in favor of Mann & Stevens.

In six issues, Alanis argues that the trial court erred by: (1) failing to grant declaratory judgment voiding the deed of trust lien pursuant to Texas Constitution article XVI, section 50 (a)(6)(Q)(x); (2) failing to grant declaratory judgment setting aside the foreclosure based on the appellees' violations of the Texas Property and Finance Codes; (3) failing to grant declaratory judgment setting aside the foreclosure because she performed under the deed of trust and timely remitted mortgage payments for the alleged periods of default; (4) granting Mann & Stevens' JNOV on the basis of its bona fide error affirmative defense; (5) applying a settlement credit and the jury's finding of proportionate liability to reduce her damages; and (6) denying her post-judgment motions, including her motion for JNOV and motion for new trial.

Cross-appellants U.S. Bank and BAC argue that (1) the award of out-of-pocket damages in the amount of $95,000 to Alanis was against the great weight and preponderance of the evidence because Alanis failed to provide any evidence supporting an award of this amount; (2) the award of attorney's fees improperly included amounts for claims for which attorney's fees were not recoverable and improperly included amounts attributable to the claims against a settling defendant; and (3) the trial court incorrectly assessed post-judgment interest as accruing on September 14, 2013—the last day of trial—and not the date the final judgment was entered.

We affirm in part and reverse and render in part.

Background

In 2006, Alanis owned a duplex located at 1040 Blanco Road in San Antonio, Texas, (the “Property”) that was damaged when a neighbor's tree fell on the roof To enable her to make the necessary repairs, Alanis obtained a home equity loan for $96,000 from CIT Loan Corporation f/k/a CIT Group Consumer Finance Inc. (“CIT”), which was also the original servicer of the loan. A few months later, in October 2006, CIT assigned the loan to Wilshire Credit Corporation. BAC, one of the defendants in the trial court, succeeded Wilshire as the loan servicer as the result of a merger. Through a series of assignments, including to LaSalle Bank, N.A., and Bank of America, N.A., U.S. Bank became the owner of the loan by the time of trial.

The promissory note signed by Alanis in 2006 provided that the principal balance on the loan was $96,000 and that Alanis was to make monthly payments of $849.57. The promissory note provided that Alanis was required to “pay principal and interest by making payments every month” and that she must “make [the] monthly payments on the same date of each month beginning on [09/01/06].” Regarding prepayments, the promissory note provided in relevant part that “[t]he Note Holder will use all of my prepayments to reduce the amount of principal that I [the borrower] owe under this Note. If I make a partial prepayment, there will be no changes in the due dates of my monthly payments unless the Note Holder agrees in writing to those changes.” The promissory note further provided that a late fee of “5% of the unpaid amount of the payment” might be charged if a payment was more than ten days late and that the loan would be considered in default if Alanis did not pay the full amount of each monthly payment on the date it was due.

No escrow account was created at the time the loan was funded, as Alanis had provided a non-escrow affidavit. Alanis was obligated under the terms of the deed of trust to pay the taxes and maintain insurance on the property. The deed of trust provided that it “secures an extension of credit defined by Section 50(a)(6), Article XVI, Texas Constitution ” and that all of the terms and conditions of that section “for creating a valid lien on a homestead have been fully satisfied.” The deed of trust further provided that Alanis was required to make payments in accordance with the terms of the promissory note.

Regarding the application of payments, the deed of trust provided:

Unless applicable law provides otherwise, all payments received by Lender under the Note [and the Deed of Trust's payment provisions] shall be applied by Lender first to accrued interest due on the Note, then to the principal due on the Note and then to other charges, if any, as stated in the Note or this Deed of Trust.

Eventually, problems arose between Alanis and the lender resulting in the lender's foreclosing on the Property on January 5, 2010, and instituting eviction proceedings. Alanis's challenge to the eviction proceedings in the justice court was unsuccessful. However, she subsequently filed the instant suit in district court, complaining of the actions of her original lender and servicer CIT and Vericrest Financial, Inc. (“Vericrest”), and the successors in interest, including current litigants U.S. Bank and BAC, and the law firm, Mann & Stevens, in foreclosing on her Property. She asserted numerous causes of action, including trespass to try title, violations of the False Lien Statute, fraud, conspiracy, breach of contract, violations of the FDCPA and its federal counterpart, violations of the Texas Constitution's provisions regarding home equity loans, negligence, and wrongful foreclosure, and she sought declaratory judgment voiding the foreclosure. Alanis eventually settled with CIT and Vericrest and proceeded to trial on her claims against U.S. Bank, BAC, and Mann & Stevens. The only claims submitted to the jury were for violations of the FDCPA and False Lien Statute and for common-law fraud.

At trial, Alanis testified that at the time she obtained the loan from CIT she lived on the Property, which is a duplex with one unit on the ground floor and another on the second floor that had also been used at one point as office space. She asserted that she obtained permission from CIT to make “bundled” payments, i.e., to make a single payment that would be applied to multiple months, because she was traveling a lot to care for her ailing mother. Alanis also testified that although the terms of the loan required that she maintain the Property as her homestead for one year after obtaining the loan, CIT agreed that she could move out of the Property approximately six months after obtaining the loan as long as her brother remained living on the Property. Alanis did not provide any written agreements between herself and CIT adopting these amendments to the original loan documents.

Alanis continued making bundled payments after CIT assigned the note, and the new loan servicer—at that time, Wilshire—objected to this practice as being a violation of the terms of her note. The loan servicer's log listing the transactions and communications regarding Alanis's loan was admitted at trial and showed multiple communications in writing and on the phone between Alanis and the lender on this issue. Beginning in early 2007, the log shows that Wilshire reported Alanis's nonpayment of her loan. Alanis contacted Wilshire, seeking to have her single large payments applied to multiple months, rather than to the unpaid principal as provided in the loan documents. According to the log, Wilshire agents advised Alanis on multiple occasions that she could not make payments for multiple months at one time.

Wilshire also asserted that it was required to force-place an insurance policy in 2007 when Alanis's insurance coverage lapsed, a contention which Alanis disputed. Wilshire charged Alanis various fees and other expenses, such as late fees, fees for inspections, and legal fees, which she likewise disputed.

Regarding her payment history, Alanis testified that she did not miss any payments. At trial, she presented evidence that she sent two payments of $1,000 on December 12, 2007, and one payment of $550 on December 31, 2007, for a total of $2,550, which she intended to be applied to her loan repayment for January, February, and March 2008. Alanis remitted another “bundled” payment of $2,550 for April, May, and June 2008. Alanis also provided evidence that she remitted payments for the remainder of 2008 and for each month of 2009.

Alanis testified that,...