Kyle v. Strasburger

520 S.W.3d 74

Wendy Lee KYLE, Appellant,

v.H.T. STRASBURGER, individually and in his capacity as a member of the board of directors of Fidelity Bank of Texas, and as a member of Tuition LLC, Shirley Strasburger, individually and in her capacity as vice-chair of the board of directors of Fidelity Bank of Texas, and as a member of Tuition LLC; Terry Whitely, individually and in his capacity as president and member of the board of directors for Fidelity Bank of Texas; Fidelity Bank of Texas, a bank chartered under the laws of the State of Texas; and Tuition LLC, a limited liability corporation organized under the laws of the State of Texas, Appellees.

NUMBER 13–13–00609–CV

Court of Appeals of Texas, Corpus Christi-Edinburg.

Delivered and filed November 24, 2015

Hon. Diane Henson, Austin, Hon. Kyle Farrar, Houston, Hon. William F. Ikard, Hon. Anne S. Wynne, Austin, Hon. Zachary Bowman, Hon. Daniel Durell, Austin, for Appellant.

Hon. Scott S. Cooley, Hon. Shannon H. Ratliff, Hon. Michael Lynn Navarre, Austin, for Appellees.

Before Chief Justice Valdez and Justices Rodriguez and Garza

MEMORANDUM OPINION

Memorandum Opinion by Chief Justice Valdez¹

Appellant, Wendy Kyle, appeals the trial court's summary judgment in favor of appellees, which include two financial institutions and the officers of those institutions (collectively "Fidelity").² By five issues, appellant contends that Fidelity failed to (1) establish entitlement to a no-evidence summary judgment regarding her fraud in a real estate transaction cause of action (issue one); (2) establish every element of its affirmative defenses (issues two, three, and four); and (3) negate the reliance element of her claims for violations of the Texas Finance Code and the Deceptive Trade Practices Act ("DTPA") (issue five).³ We affirm.

I. BACKGROUND

On May 24, 2004, appellant's ex-husband, Mark Kyle, obtained a 1.1 million dollar home equity loan from Fidelity, a loan which was secured by the couple's homestead. It is undisputed that Mark's employee signed appellant's name on the loan documents, including the promissory note, deed of trust, and disclosure statements.⁴ Fidelity alleges that appellant consented to her friend signing the document⁵ ; however, appellant claims that she did not consent to the forgery and learned of the signature later. In late 2009, appellant filed for divorce from Mark. During the divorce proceedings, Mark failed to pay ad valorem taxes and Fidelity declared the note on the loan in default. Threatened with foreclosure, attorneys for Mark and appellant attempted to negotiate a forbearance agreement with Fidelity that would temporarily abate the threatened foreclosure of the couple's homestead. Appellant refused to sign a document requiring her to verify that she had signed the original loan documents. Terry Whitley, Fidelity's president, testified that he did not know whether Fidelity was aware that appellant had not signed the original loan documents.

On March 24, 2011, Fidelity began foreclosure proceedings on the property. The foreclosure application included Whitley's affidavit stating that appellant and Mark had executed the loan agreement. Appellant filed a verified denial in response to the foreclosure proceedings stating that she had not signed the loan agreement and that she had not given anyone authority to sign on her behalf. Fidelity began investigating whether appellant had actually signed the loan documents. However, according to appellant, Fidelity continued to pursue foreclosure against the couple's homestead and represented to others that appellant had executed the home-equity loan documents. Fidelity also "sent notice of the pending non-judicial foreclosure sale of the [couple's] homestead to the Internal Revenue Service," asserting "that Mark and [appellant] had executed the home-equity loan and that Fidelity had scheduled the foreclosure sale on August 2, 2011."

On June 2, 2011, pursuant to a Rule 11 agreement with Mark and as part of the final divorce decree, appellant conveyed her interest in the home to Mark by special warranty deed, thereby making Mark the sole owner of the home. Fidelity points out that appellant testified that she signed the Rule 11 agreement and accompanying documents based on the advice of her attorneys and confirmed that she did not rely on the advice of anyone else. However, appellant claims that she sold the property because she did not want to be part of the foreclosure proceeding. The divorce court entered a final judgment of divorce decreeing that the home was Mark's sole and separate property and appellant signed the judgment as "approved and consented as to both form and substance." On June 21, 2011, Fidelity nonsuited appellant from the foreclosure proceedings.

On October 13, 2011, Fidelity sold the note and assigned the lien to Tuition LLC, a corporation formed by the Strasburgers for, according to appellant, "the sole purpose of holding the note and lien." Appellant claims that Tuition LLC had been attempting to collect past-due payments on the home-equity note from her and has instituted foreclosure proceedings naming her as a party.

On October 3, 2012, appellant filed suit against Fidelity and Mark asserting claims for fraudulent filing of a financing statement, statutory fraud in a real estate transaction, securing the execution of a document by deception, common law fraud, negligent misrepresentation, "aiding and abetting," fraudulent inducement, and damage to credit. Appellant sought damages from Fidelity that she claims were sustained as a result of misrepresentations made by Fidelity that a loan secured by a fraudulent signature was enforceable. Appellant requested the trial court to declare the loan agreement void and set aside the transfer of the property to Mark.

On March 11, 2013, Fidelity filed its first motion for summary judgment on traditional and no-evidence grounds challenging all elements of appellant's causes of action and claiming the affirmative defense of absolute privilege. On March 13, 2013, appellant amended her petition adding claims for forfeiture of principal and interest and declaratory judgment actions requesting that the lien be declared void and that the special warranty deed be set aside. The trial court granted Fidelity's motion on May 16, 2013. Fidelity filed a subsequent motion for summary judgment as to the claims appellant added in her amended petition arguing that appellant did not have standing and that her suit was barred by the statute of limitations. The trial court granted the motion without specifying the grounds and severed appellant's suit against Fidelity from her claims against Mark. This appeal followed.⁶

II. STANDARDS OF REVIEW

A party may move for summary judgment on the ground that no evidence exists of one or more essential elements of a claim on which the adverse party bears the burden of proof at trial. TEX. R. CIV. P. 166a(i) ; Timpte Inds., Inc. v. Gish, 286 S.W.3d 306, 310 (Tex. 2009). Once the motion is filed, the burden shifts to the nonmovant to produce evidence raising a genuine issue of material fact on the elements specified in the motion. TEX. R. CIV. P. 166a(i) ; Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006).

A no-evidence summary judgment is properly granted if the respondent does not bring forth more than a scintilla of probative evidence to raise a genuine issue of material fact. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003). More than a scintilla of evidence exists when the evidence "rises to a level that would enable reasonable and fair-minded people to differ in their conclusions." Id. (quoting and citing Merrell Dow Pharms., Inc. v. Havner , 953 S.W.2d 706, 711 (Tex. 1997) ; Kindred v. Con/Chem, Inc. , 650 S.W.2d 61, 63 (Tex. 1983) ) (internal quotations omitted).

"A no-evidence summary judgment is essentially a pretrial directed verdict, and we apply the same legal sufficiency standard in reviewing a no-evidence summary judgment as we apply in reviewing a directed verdict." Id. at 750–51. We consider the evidence in the light most favorable to the non-movant, crediting such evidence if reasonable jurors could and disregarding all contrary evidence and inferences unless reasonable jurors could not. Mack Trucks, Inc. , 206 S.W.3d at 582 (citing City of Keller v. Wilson , 168 S.W.3d 802, 825, 827 (Tex. 2005) ); King Ranch, Inc. , 118 S.W.3d at 751 (citing Wal–Mart Stores, Inc. v. Rodriguez , 92 S.W.3d 502, 506 (Tex. 2002) ; Johnson v. Brewer & Pritchard, P.C. , 73 S.W.3d 193, 208 (Tex. 2002) ).

We review the granting of a traditional motion for summary judgment de novo. Valence Operating Co. v. Dorsett , 164 S.W.3d 656, 661 (Tex. 2005) ; Provident Life & Accident Ins. Co. v. Knott , 128 S.W.3d 211, 215 (Tex. 2003) ; Branton v. Wood , 100 S.W.3d 645, 646 (Tex.App.—Corpus Christi 2003, no pet.). "[W]e take as true all evidence favorable to the non[-]movant, and we indulge every reasonable inference and resolve any doubts in the non [-]movant's favor." Valence Operating Co. , 164 S.W.3d at 661.

In a traditional motion for summary judgment, the movant has the burden to establish that no genuine issue of material fact exists and that he is entitled to judgment as a matter of law. Sw. Elec. Power Co. v. Grant , 73 S.W.3d 211, 215 (Tex. 2002) (citing TEX. R. CIV. P. 166a(c) ); City of Houston v. Clear Creek Basin Auth. , 589 S.W.2d 671, 678 (Tex. 1979). A defendant seeking a traditional motion for summary judgment must either disprove at least one element of each of the plaintiffs causes of action or plead and conclusively establish each essential element of any affirmative defense. Cathey v. Booth , 900 S.W.2d 339, 341 (Tex. 1995) (per curiam); Sanchez v. Matagorda County , 124 S.W.3d 350, 352 (Tex.App.—Corpus Christi 2003, no pet.). When reasonable people could not differ as to the conclusion to be drawn from the evidence, the matter is conclusively established. Franks v. Roades , 310 S.W.3d 615, 621 ...