Justice v. Wells Fargo Bank, N.A.

BRIAN W. JUSTICE, Appellant v. WELLS FARGO BANK, NATIONAL ASSOCIATION, ONBEHALF OF THE REGISTERED HOLDERS OF BEAR STEARNSASSET BACKED SECURITIES I TRUST 2007-AC2,ASSET-BACKED CERTIFICATES, SERIES 2007-AV2, Appellee

NO. 09-19-00101-CV

Court of Appeals Ninth District of Texas at Beaumont

Submitted on October 22, 2019

December 12, 2019

On Appeal from the 410th District Court Montgomery County, Texas

Trial Cause No. 18-05-06155-CV

MEMORANDUM OPINION

Appellant Brian W. Justice appeals the trial court's summary judgment in favor of Appellee Wells Fargo, National Association, on Behalf of the Registered Holders of Bear Stearns Asset Backed Securities I Trust 2007-AC2, Asset-Backed Certificates, Series 2007-AC2 ("Wells Fargo"). We affirm.

Procedural Background

Original Pleadings

On May 11, 2018, Wells Fargo filed its original petition, stating a claim against Justice for breach of contract and judicial foreclosure on the property located at 10503 E. Wild Wind Circle in The Woodlands ("the property"). The petition alleged that Justice had defaulted on the promissory note on the property and Wells Fargo was the holder of the note. Wells Fargo also asserted that, under the terms of the note, it could recover unpaid principal and accrued interest, late charges, and lender's costs of collection, including reasonable attorney's fees.

Justice filed two pro se answers, generally denying the allegations. The answers indicate that Justice's address is:

10503 E. WildWind Cir.

The Woodlands, Tx 77380

The clerk's record also includes a copy of the envelope Justice used to mail one of the answers, and it reflects a return address of:

P.O. Box 30413

Fort Lauderdale, FL 33303

The trial court sent the parties a scheduling order on July 26, 2018, setting the case for trial on May 28, 2019, and ordering that all motions for summary judgmentshould be filed forty-five days before trial. The scheduling order reflected that it was sent to Justice via email, and to the Woodland's address for Justice.

Wells Fargo's Motion for Summary Judgment

On October 29, 2018, Wells Fargo filed a traditional motion for summary judgment. In its motion, Wells Fargo argued that it was entitled to summary judgment because it was the legal holder of the promissory note that Justice executed, Justice had defaulted on the note, the note was secured by a deed of trust, and that Wells Fargo sent Notice of Acceleration to Justice. The following exhibits were attached in support of Wells Fargo's motion:

• A "Texas Home Equity Note" executed by Justice in December 2006 payable to Maverick Residential Mortgage, Inc. ("Maverick") and a "Texas Home Equity Security Instrument" giving Maverick a secured interest in the property. The Texas Home Equity Security Instrument reflected that Mortgage Electronic Registration Systems, Inc. ("MERS") is the nominee for the lender and the lender's successors and assigns, and MERS is the beneficiary under the security instrument.

• An affidavit of Monica Vongdara, a Document Control Officer for Select Portfolio Servicing, Inc. ("SPS"), which was the servicer for the loan. In her affidavit, Vongdara attested that Wells Fargo is the current holder of Justice's note on the property.

• An Assignment of Note and Deed of Trust executed in September 2008, in which MERS assigned the deed of trust to Wells Fargo Bank, National Association, as Trustee for Certificateholders of Bear Stearns Asset Backed Securities I LLC, Asset BackedCertificates, Series 2007-AC2, and the markings on the assignment reflect that it was recorded in the Montgomery County records.

• A September 2010 assignment from Wells Fargo Bank, National Association, as Trustee for Certificateholders of Bear Stearns A[s]set Backed Securities I LLC, Asset Backed Certificates, Series 2007-AC2 to EMC Mortgage Corporation as attorney-in-fact for Wells Fargo Bank, National Association, as Trustee for Certificateholders of Bear Stearns Asset Backed Securities I LLC, Asset Backed Certificates, Series 2007-AC2, with markings reflecting it was recorded in the Montgomery County records.

• Demand letters dated January 20, 2016 sent to Justice by SPS on behalf of Wells Fargo notifying Justice that he had failed to make payments under the note, and the amount due and owing at that time was $890,753.73. One letter was addressed to Justice at the property's address and one was addressed to him at the Fort Lauderdale address.

• Letters sent to Justice by attorneys for SPS and dated February 8, 2018, notifying Justice of SPS's intent to accelerate the note. One letter was addressed to Justice at the property's address and one was addressed to him at the Fort Lauderdale address.

• An Affidavit in Support of Attorneys' Fees from Dominique Varner, an attorney for Wells Fargo.

• A Military Status Affidavit attesting that Justice was not in the military or on active duty in any of the armed forces.

Wells Fargo set the motion on the trial court's submission docket for December 3, 2018. The clerk's record includes no response filed by Justice in 2018. On January 3, 2019, the trial court signed an order granting summary judgment in favor of Wells Fargo. The judgment ordered that Wells Fargo's lien on the property

. . . is $1,589,525.10, plus interest from and after July 31, 2018, plus costs of court and reasonable and necessary attorney's fees in the amount of $1,300.00, plus conditional attorneys' fees of $7,500.00 $10,000.00 in the event of appeal to a court of appeals, additional conditional attorneys' fees of $2,000.00 $5,000.00 if an Application for Writ of Error to the Texas Supreme Court is filed, and an additional conditional attorneys' fees of $6,000.00 $15,000.00 if the Application is granted by the Texas Supreme Court (non-recourse to Defendants).

The judgment also authorized Wells Fargo to proceed with foreclosure on the property.

Justice's Motions and Wells Fargo's Response

On February 1, 2019, Justice filed a Motion to Set Aside Summary Judgment and for New Trial. Therein, Justice argued that, because he was out of state and out of the trial court's jurisdiction between October 2, 2018 and January 19, 2019, he had no actual or constructive notice of the motion for summary judgment until after judgment had been rendered. According to the motions, summary judgment in favor of Wells Fargo was erroneously granted because Wells Fargo had failed to establish a "chain of title and/or standing to sue for foreclosure[,]" which constitutes a fact issue. Justice argued that his failure to respond to the motion for summary judgment was due to accident or mistake and not conscious indifference, and applying Craddock,¹ the judgment should be set aside, and a new trial should be granted.Justice also argued that he was pro se, lacked legal training, and was wholly incapable of responding timely; however, the motions were filed by an attorney representing Justice. Attached to the motions was a declaration of Lawrence E. Daniel, an attorney for Justice, and the declaration stated, in part, that

[Justice] departed the State of Texas on October 2, 2018 and did not return until January 19, 2019. His mail was not forwarded out of state and no one was opening his mail for him. No one told him he had received notices of certified letters on this matter.

He was not aware, and no one made him aware, that a Motion for Summary Judgment had been filed, that the Notice of Hearing had been sent, or that a judgment had been entered. He had no attorney or other individual periodically reviewing the Court's file for documents, motions, settings, or judgments being entered. He was unaware that he could check the Montgomery County District Court records online.

He did not discover the filings, notices, and judgments until he returned to his home in Montgomery County, state of Texas until January 19, 2019.

He did not intentionally fail to file a Response to the Motion for Summary Judgment. He did not intentionally avoid retrieving certified mail from the US Post Office. Missing the Motion, Notice, and Judgment were solely due to his travel out of state causing him to accidentally miss filing a response, and was not due to conscious indifference to the Motion, Notice, or Judgment.

Justice also filed a Motion for Leave to File Late Response to Plaintiff's Motion for Summary Judgment. This motion argued that good cause existed for permitting a late response because he did not receive notice of Wells Fargo's motion for summary judgment until January 19, 2019, and the no undue prejudice would result from permitting him to file a late response. Justice additionally filed a First Amended Answer on February 1, 2019, asserting a general denial and pleading certain affirmative defenses. The amended answer also contained a special exception under Texas Rules of Civil Procedure 736.1 that addresses the style of a lawsuit where judicial foreclosure is sought.

In addition to the foregoing motions, Justice filed a response to the motion for summary judgment. Therein, Justice argued that Wells Fargo failed to prove that the chain of title results in it being the holder of the note and that Wells Fargo failed to establish it has standing to sue. Justice also challenged the amount due and owing under the note. According to Justice, material fact issues regarding the chain of title and the amount owed precluded summary judgment.

Wells Fargo filed a response to Justice's motions to set aside summary judgment and for new trial. The response asserted that Justice had not filed a "vacation letter" with the trial court or otherwise informed Wells Fargo or the court that he would be out of the jurisdiction for any length of time. Wells Fargo objectedto the declaration of Lawrence Daniel for lack of foundation and because it failed to show how Daniel had sufficient personal knowledge of the matters it addressed. In addition, Wells Fargo argued that Justice "was consciously indifferent to the judicial processes in this matter as he appears to have ignored any case activity...