Oloyede v. Citizens Bank

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JANET OLOYEDE AND OLU OLOYEDE, Appellants v. CITIZENS BANK, N.A., Appellee

No. 05-22-00141-CV

Court of Appeals of Texas, Fifth District, Dallas

August 1, 2023

On Appeal from the 193rd Judicial District Court Dallas County Texas Trial Court Cause No. DC-21-05931

Before Justices Reichek, Nowell, and Garcia

MEMORANDUM OPINION

AMANDA L. REICHEK JUSTICE

Janet Oloyede and Olu Oloyede appeal a summary judgment in favor of Citizens Bank, N.A. ("Citizens Bank") in its suit for breach of a student loan agreement. In four issues, the Oloyedes contend: Citizens Bank, an entity not named as the lender in the agreement, failed to prove it had standing to collect the loan; the trial court abused its discretion in overruling objections to the bank's summary judgment evidence; and the judgment erroneously disposed of their counterclaims and affirmative defense. Because the bank did not establish it was entitled to traditional summary judgment on its claims and the trial court erroneously granted a no-evidence summary judgment for the bank on the Oloyedes' counterclaims, we reverse and remand.

Background

On January 10, 2008, Janet Oloyede, as student borrower, and Olu Oloyede, as cosigner, took out a student loan to finance Janet's college education. Both Janet and Olu signed a "Non-Negotiable Credit Agreement." The agreement and accompanying note disclosure statement identified the lender as RBS Citizens, N.A. ("RBS Citizens"). Olu also signed a "Notice to Cosigner," which referred to the credit agreement for the name of the lender. Payments were deferred until July 14, 2012.

In May 2021, Citizens Bank filed its original petition against the Oloyedes. The bank alleged "the original creditor" advanced funds to the Oloyedes pursuant to a credit agreement. The bank further alleged the Oloyedes failed to make the required payments and owed it $41,156.16. Citizens Bank asserted a breach of contract claim, alternative claims for account stated and quantum meruit, and also sought attorney's fees.

The Oloyedes each filed a pro se answer, using a form from a website. They checked boxes next to a list of affirmative defenses. And in a space provided for additional affirmative defenses, they asserted the bank failed to perform conditions precedent and failed to mitigate. In that space, they also alleged the bank did not release a copy of the signed agreement and failed to prove Truth-in-Lending disclosures were given and that therefore "the monies received were not legally binding which violates the Fair Debt Collection Practices Act and the Higher Education Opportunity Act of 2008."

Citizens Bank moved for traditional and no-evidence summary judgment. The motion for summary judgment conflictingly asserted the Oloyedes "entered into an agreement with Citizens Bank N.A." and also that the bank acquired the records associated with the Oloyedes' account from "the original creditor." The bank sought traditional summary judgment on its claims for breach of the credit agreement and account stated and presented three affidavits with supporting documents. The bank also asserted the Oloyedes had no evidence of any element of their affirmative defenses and no evidence the bank violated any State or Federal debt collection act.

After the motion for summary judgment was filed, the Oloyedes hired counsel. On February 7, 2022, seven days before submission of the motion, the Oloyedes filed four documents-a first amended answer, an original counterclaim, a plea to the jurisdiction and a response to the motion for summary judgment. In their amended answer, the Oloyedes dropped the affirmative defenses in their original answers and raised a new affirmative defense, limitations.

In a separate document, they asserted counterclaims for violations of Chapter 392 of the Texas Finance Code, known as the Texas Debt Collection Act. The Oloyedes alleged Citizens Bank was a debt collector who violated § 392.301 of the Act by using criminal means to cause harm to a person or property and by threatening to take an action prohibited by law. See Tex. Fin. Code Ann. § 392.301(a)(1) & (8). They further alleged the bank violated § 392.304 of the Act by misrepresenting the character and amount of a consumer debt and the status of the debt in a judicial proceeding and by using false representations and deceptive means to collect a debt. See id. § 392.304(a)(8) & (19). The Oloyedes asserted the bank's violations of Chapter 392 were also violations of the Texas Deceptive Trade Practices Act. See id. § 392.404 (violation of Chapter 392 is also actionable under DTPA).

In both their plea to the jurisdiction and their summary judgment response, the Oloyedes argued Citizens Bank lacked standing to bring a suit on the credit agreement because Citizens Bank did not originate the loan and did not demonstrate it had a justiciable interest in the controversy. Their summary judgment response also raised objections to the bank's summary judgment evidence.

No hearing was held on the summary judgment motion. On July 15, 2022, the trial court signed a written order overruling all of the Oloyedes' objections to the bank's summary judgment evidence and overruling their argument about standing. That same day, the court granted summary judgment in favor of Citizens Bank. The court ordered that Citizens Bank was entitled to recover from Janet Oloyede and Olu Oloyede, jointly and severally, $41,156.16, attorney's fees of $1,500, conditional appellate attorney's fees, costs, and post-judgment interest. The judgment recites that all relief not expressly granted is denied and purports to finally dispose of all claims and parties. This appeal followed.

Applicable Law

To recover on a claim for breach of a note, a plaintiff must establish (1) the existence of the note in question, (2) the defendant signed the note or the guaranty, (3) the plaintiff is the owner and holder of the note, and (4) a certain balance is due and owing on the note. Napoleon v. Strategic Dealer Servs., LP, No. 05-15-04154-CV, 2017 WL 894540, at *3 (Tex. App.-Dallas Mar. 6, 2017, no pet.) (mem. op.).

We review the granting of a motion for summary judgment de novo. Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013). A party moving for a traditional summary judgment has the burden of proving that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Tex.R.Civ.P. 166a(c). The pleading of an affirmative defense does not, in itself, defeat a motion for summary judgment by a plaintiff whose proof conclusively establishes its right to summary judgment. Thompson v. Chrysler First Bus. Credit Corp., 840 S.W.2d 25, 28 (Tex. App.-Dallas 1992, no writ).

When a motion is presented under rule 166a(i) asserting there is no evidence of one or more essential elements of the nonmovant's claims upon which the nonmovant would have the burden of proof at trial, the burden is on the nonmovant to present enough evidence raising a genuine fact issue entitling the nonmovant to trial. Jinright v. N. Tex. Mun. Water Dist., No. 05-21-00027-CV, 2022 WL 2302167, at *4 (Tex. App.-Dallas June 27, 2022, no pet.) (mem. op.). The court must grant the motion unless the nonmovant produces summary judgment evidence raising a genuine issue of material fact. Tex.R.Civ.P. 166a(i).

Rule 166a(i) requires a no-evidence summary judgment motion to specifically state the element or elements of the nonmovant's claims for which there is no evidence. Tex.R.Civ.P. 166a(i); Community Health Sys. Prof. Servs. Corp. v. Hansen, 525 S.W.3d 671, 695 (Tex. 2017). The Texas Supreme Court has called for strict enforcement of this requirement. Community Health, 525 S.W.3d at 695. A no-evidence motion that only generally challenges the sufficiency of the nonmovant's case and fails to state specific elements that the movant contends lack supporting evidence is fundamentally defective and cannot support summary judgment as a matter of law. Jose Fuentes Co. v. Alfaro, 418 S.W.3d 280, 283 (Tex. App.-Dallas 2013, pet. denied).

Analysis

In their first issue, the Oloyedes contend the trial court erred in granting summary judgment for Citizens Bank on its claims because the bank failed to prove it had standing to collect the loan, as the credit agreement is between RBS Citizens and the Oloyedes. They assert that nothing in the record explains this discrepancy. Citizens Bank responds that it presented evidence it was the owner and holder of the note and directs this Court to an affidavit from John Masello. The bank also asks this Court to take judicial notice of the fact that RBS Citizens changed its name to Citizens Bank.

The issue of standing focuses on whether a party has a sufficient relationship with the lawsuit so as to have a justiciable interest in its outcome. Austin Nursing Ctr., Inc. v Lovato, 171 S.W.3d 845, 848 (Tex. 2005). A plaintiff has standing when it is personally aggrieved. Id. The standing doctrine requires a real controversy between the parties that will actually be determined by the judicial declaration sought. Id. at 849. Without standing, a court lacks subject matter jurisdiction to hear the case. Id.

As summary judgment evidence, Citizens Bank provided affidavits from Masello, the bank's Collection Recovery Senior Specialist, and Christopher J.M. Jones, its Recovery Agency Manager, as well as a third affidavit about attorney's fees. Masello's affidavit states that he is the bank's records custodian and has personal knowledge of the facts in the affidavit. He states that records kept on the Oloyedes' account are attached to his affidavit, including a true and correct copy of the contract. The affidavit says, "Plaintiff is the owner and holder of this account."

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