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					                               NO.05-10-00835-CV



      IN THE FIFTH DISTRICT COURT OF APPEALS AT DALLAS, TEXAS



KENNETH GOOD and MARIA DEL CARMEN GOOD,
    Appellants,

vs.

STATE BANK AND TRUST COMPANY, DALLAS,
    Appellee.


  On Appeal from the District Court, 162 nd Judicial District, Dallas County, Texas

                               Cause No. 10-02469

                 The Honourable Lorraine A. Raggio Presiding



                               APPELLEE'S BRIEF





THOMAS M. WHELAN
Texas Bar No. 21263800
ASHLEY ERIN MARINO
Texas Bar No. 24065676
MCGUIRE, CRADDOCK & STROTHER, P.e.
2501 N. Harwood, Suite 1800
Dallas, TX 75201
(214) 954-6800 - Telephone
(214) 954-6850 - Telecopier

ATTORNEYS FOR DEFENDANT,
STATE BANK AND TRUST
COMPANY, DALLAS
                               TABLE OF CONTENTS


Table of Contents                                                                     II



Index of Authorities                                                                 .iv


Statement Regarding Oral Argument                                                      2


Statement of Facts                                                                     2


Summary of the Argument                                                                9


Argument                                                                               9


1.	   State Bank Complied with Section 51.002(d) of the Texas Property Code            9


       A.	   The Standstill Agreement Itself Satisfies the 20-Day Notice

             Requirement of Section 51.002(d) of the Texas Property Code              10


      B.	    Actual Notice is Sufficient to Satisfy the Mailing Requirements in

             Section 51.002 of the Texas Property Code                                11


       C.	   An agreement - such as the Standstill Agreement - may contain the

             20-Day Notice Required under Section 51.002(d)                           12


       D.	   The July 14,2009 Standstill Agreement Gave the Goods More Than 20­

             Days Notice and Opportunity to Cure their Maturity Default before State

             Bank Noticed the Good's Northaven Property for Foreclosure on January

             12, 2010                                                                 14


       E.	   The Goods' Receipt of Actual Notice Satisfies the Certified Mailing

             Requirement in the Property Code                                         15


2.	    Appellants Did Not Raise Genuine Issues of Material Fact That the Foreclosure

       Sale Price was Grossly Inadequate                                              17


       A.	    There Was No Irregularity in the February 2, 20 10, Foreclosure Sale    18





                                           (ii)
         B.	   Even If State Bank Failed To Comply With The Statutory Notice

               Requirements of Section 51.002(D)---It Did Not-Appellants Did

               Not Raise A Fact Issue As To Whether That Failure Caused Or

               Contributed To Cause The Property To Be Sold For A Grossly

               Inadequate Price                                                           20


3.       State Bank Demonstrated it is Entitled, as a Matter of Law, to Attorneys' Fees ..21


Prayer                                                                                    24


Signature Page                                                                            24


Certificate of Service                                                                    25





                                              (iii)
                             INDEX OF AUTHORITIES


Am. Sav. & Loan Ass 'n v. Musick,
      531 S.W.2d 581 (Tex. 1975)                                             17, 18, 19

Bellah v. First Nat 'I Bank,
       474 S.W.2d 785 (Tex. Civ. App. - Eastland 1971, writ refd n.r.e.)            21

BFP v. Resolution Trust Corp.,
      511 U.S. 531, 1145S.Ct.1757, 128L.Ed2d556(1994)                               18

Bocquet v. Herring,
     972 S.W.2d 19 (Tex.1998)                                                       22

Carlile v. RLS Legal Solutions, Inc.,
       138 S.W.3d 403 (Tex. App. - Houston [14 th Dist.] 2004, no pet.)             22

Charter Nat 'I Bank Houston v. Stevens,
      781 S.W.2d 368 (Tex. App. - Houston [14 th Dist.] 1989, writ denied)          18

EMC Mtg. Corp. v. Davis,
     167 S.W.3d 406 (Tex.App.-Austin 2005, pet. denied)                             22

First State Bank v. Keilman,
        851 S.W.2d 914 (Tex. App. - Austin 1993, writ denied)                       18

Fitzgerald v. Harry,
       2003 WL 22147557 (Tex. App. - Fort Worth 2003, no pet.)                       16

Forestier v. San Antonio Sav. Ass 'n,
       564 S.W.2d 160 (Tex. Civ. App. - EI Paso 1978, writ refd n.r.e)       11, 12, 13

Herrera v. Emmis Mtg., Inc.,
      1995 WL 654561 (Tex. App. - San Antonio Nov. 8, 1995, writ denied)             16

Hunt v. Jefferson Sav. & Loan Ass 'n,
       756 S.W.2d 762 (Tex. App. - Dallas 1988, writ denied)                     18, 20

In re Cunningham,
       2008 WL 1696756 (Bkrtcy. N.D. Tex. 2008)                                      12
                                           (iv)
In re Greenhaw Energy, Inc.,
       2007 WL 1953491 (Bkrtcy. S.D. Tex. July 3, 2007)                             18

Johnson v. First S. Props., Inc.,
      687 S.W.2d 399 (Tex. App. - Houston [14 th Dist.] 1985 writ refd n.r.e.)      11

Lambert v. First Nat'l Bank,
     993 S.W.2d 833 (Tex. App. - Fort Worth 1999, pet. denied)                       7

Loomis Land & Cattle Co. v. Diversified Mtg. Investors,
      533 S.W.2d 420 (Tex. Civ. App. - Tyler 1976, writ refd n.Le.)                  7

Porras v. Craig,
      675 S.W.2d 503 (Tex. 1984)                                                    21

Powell v. Stacy,
      117 S.W.3d 70 (Tex. App. - Fort Worth 2003, no pet.)                          18

Richardson v. Kent,
      47 S.W.2d 420 (Tex. Civ. App. - Dallas 1932, no writ)                         21

Savers Fed. Savs. & Loan Ass'n v. Reetz,
       888F.2d 1497 (5thCiL 1989)                                                11, 19

Stewart Title Guar. Co. v. Sterling,
      822 S.W.2d 1 (Tex. 1991)                                                      22

Thomas v Thomas,
     902 S.W. 2d 621 (Tex.App.-Austin 1995, writ denied)                            22

Tricon Insurance Services, Inc. v. Dallas Cowboys Football Club, Ltd.,
       2004 WL 1813752 (Tex. App. - Dallas Aug. 16,2004)                            23

                                STATUTES AND RULES


§ 51.002(b)(3). TEX. PROP. CODE § 51.002(d)                                         10



                                           (v)
                                  TREATISES

Slotnik, Barbara
       30 TEX. JUR.3D Deeds a/Trust and Mortgages §190 (2010)   20




                                        (vi)
                                NO.OS-I0-0083S-CV



      IN THE FIFTH DISTRICT COURT OF APPEALS AT DALLAS, TEXAS



KENNETH GOOD and MARIA DEL CARMEN GOOD,
    Appellants,

vs.

STATE BANK AND TRUST COMPANY, DALLAS,
    Appellee.


  On Appeal from the District Court, 162 nd Judicial District, Dallas County, Texas

                               Cause No. 10-02469

                 The Honourable Lorraine A. Raggio Presiding



                               APPELLEE'S BRIEF





THOMAS M. WHELAN
Texas Bar No. 21263800
ASHLEY ERIN MARINO
Texas Bar No. 24065676
MCGUIRE, CRADDOCK & STROTHER, P.e.
2501 N. Harwood, Suite 1800
Dallas, TX 7520 I
(214) 954-6800 - Telephone
(214) 954-6850 - Telecopier

ATTORNEYS FOR APPELLEE,
STATE BANK AND TRUST
COMPANY, DALLAS




APPELLEE'S BRIEF                                                        PAGE I
                                                I.
                      STATEMENT REGARDING ORAL ARGUMENT

         State Bank and Trust Company, Dallas (State Bank) does not believe that oral

argument is necessary.         If the Court grants Appellants' request for oral argument,

however, State Bank requests that the Court allow State Bank to present oral argument.

                                               II.
                                   STATEMENT OF FACTS

                            State Bank Loans Ken Good S2.8 Million

     On or about March 21, 2007, Kenneth Good (Ken Good) executed and delivered a

Promissory Note (Note) with a I-year tenn payable to State Bank in the original principal

amount of $2,800,000.00. R. 0015 (Defendant's Motion for Summary Judgment,                ~4);   R.


    -.
0026 (Affidavit of Valerie Kroiss (Kroiss AjJ.),       ~   3); and R. 0031-0033 (Kroiss AjJ.,

Exhibit 1 - Promissory Note). Also, on or about March 21, 2007, to secure payment of

the Note, Ken Good and his wife, Maria del Cannen Good (Maria Good)(collectively, the

Goods), executed and delivered a Deed of Trust in favor of State Bank, as beneficiary,

granting State Bank a first lien in the real property and improvements commonly known

as 6520 Northaven Road, Dallas, Texas (Property) and more fully described in the Deed

of Trust.    R. 0015-0016 (Defendant's Motion for Summary Judgment,              ~5);    R. 0026

(Kroiss AjJ.,   ~   4); and R. 0039-0056 (Kroiss AjJ., Exhibit 2 - Deed of Trust). A true and

correct copy of the Deed of Trust was recorded in the Official Public Records of Dallas,

County Texas. R. 0015-0016 (Defendant's Motion for Summary Judgment,              ~5);   R. 0026

(Kroiss AjJ., ~ 4); and R. 0039-0056 (Kroiss AjJ., Exhibit 2 - Deed of Trust).

APPELLEE'S BRIEF                                                                 PAGE 2
     Ken Good Fails to Pay the S2.8 Million Loan at Maturity on March 21, 2008

     The Note matured by its express tenns on March 21, 2008, and Ken Good did not

pay the outstanding principal or accrued interest at maturity.      R. 0016 (Defendant's

Motion for Summary Judgment,     ~6);   R. 0027, 0028 (Kroiss AjJ.,   ~   5); R. 0031-0033,

0067-0088 (Kroiss AjJ., Exhibit I - Promissory Note and Exhibit 5 - Standstill

Agreement).

                             Ken Good Files Bankruptcy

     On April 15,2008, within a month of the maturity date of the Note, Ken Good filed

a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in

the United States Bankruptcy Court for the Eastern District of Texas, Sherman Division

(Bankruptcy Court), Bankruptcy Case No. 08-40955, styled In re Kenneth Marston Good

(Good Bankruptcy Case). R. 0016 (Defendant's Motion for Summary Judgment,              ~7);   R.

0027 (Kroiss AjJ., ~ 6); R. 0123-0124, 0134 (Plaintiffs' Response to Motion for Summary

Judgment, pp. 1-2 and Exhibit A - Affidavit of Kenneth M. Good, ~3).

     On August 26, 2008, Ken Good and State Bank entered into, and the Bankruptcy

Court signed, an Agreed Order and Stipulation Regarding State Bank and Trust

Company, Dallas' Motion for Relief from Automatic Stay against Real Property located

at 6520 Northaven Road, Dallas, Texas 75230 (First Agreed Order).                    R. 0016

(Defendant's Motion for Summary Judgment,        ~8);   R. 0027 (Kroiss AjJ.,   ~   7); and R.

0057-0061 (Kroiss AjJ., Exhibit 3 - First Agreed Order). Then, on March 16,2009, Ken

Good and State Bank entered into a Second Agreed Order and Stipulation Regarding
APPELLEE'S BRIEF                                                                PAGE 3
State Bank and Trust Company, Da)]as' Motion for Relief from Automatic Stay against

Real Property Located at 6520 Northaven Road, Dallas, Texas 75230 (Second Agreed

Order). R. 0017 (Defendant's Motion for Summary Judgment, '19); ll... 0027-0028 (Kroiss

Aff, '1 8); and R. 0062-0066 (Kroiss Aff, Exhibit 4 - Second Agreed Order).         The

Bankruptcy Court signed the Second Agreed Order on April 12, 2009.             R. 0017

(Defendant's Motion for Summary Judgment, '19); R. 0027-0028 (Kroiss Aff, ~ 8); and R.

0062-0066 (Kroiss Aff, Exhibit 4 - Second Agreed Order).

              State Bank Gives the Goods 170 Days to Pay Off the Loan

     State Bank and the Goods entered into a Standstill Agreement effective as of July

14, 2009. R. 0006 (Plaintiffs' Original Petition, '19); R. 0017-0018 (Defendant's Motion

for Summary Judgment,    ~10);   R. 0028 (Kroiss Aff, '1 9); R. 0067-0088 (Kroiss A!f.,

Exhibit 5 - Standstill Agreement); and R. 0123-0124 (Plaintiffs' Response to Motion for

Summary Judgment, pp.1-2). In the Standstill Agreement, State Bank and the Goods­

among other things-stipulated:

          •	 the Note matured on March 21, 2008;

          •	 Ken Good "failed and refused to pay the outstanding principal and accrued

             interest" on March 21, 2008;

          •	 as of July 14, 2009, the total amount due under the Note is principal in the

             amount of $2,733,833.24, plus accrued and unpaid interest of $26,163.63

             and attorneys' fees and costs of$10,833.29;



APPELLEE'S BRIEF	                                                          PAGE 4
          •	 State Bank is the legal owner and holder of the Note and beneficiary of the

             first priority security interest in the Property; and

          •	 all sums due and owing under the Note are due and payable.

R. 0017 (Defendant's Motion for Summary Judgment, 'i[9); R. 0027-0028 (Kroiss Ajf.,     '1
8); and R. 0067-0088 (Kroiss Ajf., Exhibit 5 - Standstill Agreement). Under the terms of

the Standstill Agreement, State Bank also agreed to forbear until December 31, 2009 ­

exactly 170 days after the date the parties signed the Standstill Agreement - from

exercising its remedies under the Deed of Trust for Ken Good's failure to pay the

outstanding principal and accrued interest due under the Note at maturity on March 21,

2008. R. 0067-0088 (Kroiss Ajf., Exhibit 5 - Standstill Agreement).

     Ken Good did not pay the Note in full by December 31, 2009.                 R. 0018

(Defendant's Motion for Summary Judgment, 'i[11) and R. 0028 (Kroiss Ajf., 'i[1O). And,

in early January 2010, State Bank directed David Woods, the substitute trustee, to post

the Property for foreclosure on February 2, 2010.        R. 0018 (Defendant's Motion for

Summary Judgment, 'i[11) and R. 0028 (Kroiss Ajf., 'i[1O).

               State Bank Forecloses 22 Months After the Loan Matured

     The notice of sale was posted and sent by certified mail, return receipt requested to

the Goods on January 12,2010, at least 21 days before the February 2, 2010, foreclosure

sale. R. 0018 (Defendant's Motion for Summary Judgment, '112); R. 0101 (Appleton

Mailing Affidavit (Appleton Mailing Ajf.)); R. 0102-106 (Appleton Mailing Ajf., Exhibit

A); R. 0109 (Appleton Filing & Posting Affidavit (Appleton Filing & Posting Ajf.));    &
APPELLEE'S BRIEF	                                                           PAGE 5
0110-0117 (Appleton Filing & Posting AfJ., Exhibit A). As of February 2, 2010, the

amount of at least $2,865,968.85 in outstanding principal, accrued and unpaid interest,

and other charges was due, owing, and unpaid under the terms of the Note. R. 0018

(Defendant's Motion for Summary Judgment,          ~13)   and R. 0029 (Kroiss Ajf.,   ~   II). The

substitute trustee foreclosed on February 2, 2010 (Foreclosure Sale).                     R. 0018

(Defendant's Motion for Summary Judgment, '114); R. 0029 (Kroiss AfJ.,          ~   12); R.0089­

0094 (Kroiss AfJ., Exhibit 6 - Foreclosure Sale Deed).

        State Bank purchased the Property at the Foreclosure Sale for the amount of

$2,865,968.85. R 0018 (Defendant's Motion for Summary Judgment, '114); R 0029

(Kroiss AfJ.,   ~   12); R0089-0094 (Kroiss AfJ., Exhibit 6 - Foreclosure Sale Deed). And,

on February 9, 2010, State Bank conveyed the Property to SB&T Assets Corp., a wholly

owned subsidiary of State Bank. R. 0018 (Defendant's Motion for Summary Judgment,

~15);   R 0029 (Kroiss AfJ.,      ~   13); and R.0095-0100 (Kroiss AjJ., Exhibit 7 - Special

Warranty Deed).

        State Bank and SB&T Assets Corp. hired MCGUIRE, CRADDOCK & STROTHER, P.C.

to represent them in connection with the enforcement of their rights and remedies and to

represent them in the suit filed by the Goods. State Bank and SB&T Assets Corp. agreed

to pay the reasonable and necessary attorneys' fees incurred in the course of the

representation.      R 0018-0019 (Defendant's Motion for Summary Judgment,                ~16);   R.

0029-0030 (Kroiss AfJ.,       ~   14); and R.0118-0122 (Affidavit of Thomas M. Whelan

(Whelan Ajf.)).
APPELLEE'S BRIEF                                                                    PAGE 6
                                    Goods'Suitfor Wrongful Foreclosure

      The Goods sued State Bank for wrongful foreclosure I and for a detennination of the

fair market value of the Property as of February 2, 20 10, the date of the Foreclosure Sale.

R. 0008-0009 (Plaintiffs' Original Petition,                    ~~119-25).      In their petition, the Goods'

alleged, among other things, that Ken Good did not receive 20 days' notice to cure his

default before the substitute trustee served the 21-day notice of the Foreclosure Sale and

that the substitute trustee sold the Property for a grossly inadequate price.                                  R. 0008

(Plaintiffs' Original Petition,        ~20).


       State Bank then filed its Motion for Summary Judgment (Motion) on the grounds

that: (i) State Bank complied with Section 51.002 of the Texas Property Code; (ii) there is

no defect in the foreclosure that caused or contributed to a grossly inadequate foreclosure

sales price; and (iii) State Bank is entitled to its attorneys' fees under the tenns of the

Deed of Trust and other applicable Texas law.                            R. 0015 (Defendant's Motion for

Summary Judgment,           ~12).


       The Goods response to State Bank's Motion relies exclusively on the Affidavit of

Ken Good (Good Aff). R. 0123-0162 (Plaintiffs' Response to Motion for Summary

Judgment). In his affidavit, Ken Good admits that he executed the Standstill Agreement,




     I Although the Goods asked, in the alternative, that the foreclosure sale be "set aside and declared void," the
Goods are not entitled to have the foreclosure sale set aside because they did not tender the outstanding debt.
Lambert v. Firsr Nat'l Bank, 993 S. W.2d 833, 835-36 (Tex. App. - Fort Worth 1999, pet. denied) (citing Loomis
Land & Carrie Co. v. Diversified Mtg. Investors, 533 S.W.2d 420, 424 (Tex. Civ. App. - Tyler 1976, writ refd
n.r.e.) for proposition that to be entitled to rescission of a void foreclosure sale, plaintiff must tender all amounts due
under the note).
APPELLEE'S BRIEF                                                                                        PAGE 7
but he claims that he did not receive a separate letter offering at least 20 days to cure the

default under the Standstill Agreement. R. 0135 (Good Aff., ~~ 4, 10).

      On April 21, 2010, the trial court heard State Bank's Motion, and, on May 10,2010,

the trial court signed an Order Granting Defendant's Motion for Summary Judgment and

setting a June 9, 2010, hearing on the amount of State Bank's attorneys' fees. R. 0163­

0165 (Order Granting Defendant's Motion for Summary Judgment). On June 9, 2010,

after hearing evidence on State Bank's attorneys' fees, the trial court signed a Final

Judgment ordering that the Goods take nothing on their claims against State Bank and

awarding State Bank judgment against the Goods for its reasonable attorneys' fees in the

amount of$10,000.00.2 R. 0166-0168 (Final Judgment).

                                                     Appeal

      The Goods filed their Notice of Appeal-on or about July 2, 2010. R. 0169-0170

(Notice of Appeal). In July, 2010, the Bankruptcy Court converted the Good Bankruptcy

Case from a Chapter 11 case, to a Chapter 7 case. At that time the Bankruptcy Court

appointed Mark A. Weisbart (Trustee), as Chapter 7 trustee of the Good Bankruptcy

Case. The Bankruptcy Court has made no determination regarding ownership of the

claims at issue in this appeal.) Collectively, the Trustee and the Goods are referred to as

Appellants.



2 In addition to attorneys' fees in the amount of $10,000, the Final Judgment provides for an additional $2,500 if the
Goods file an unsuccessful motion for new trial; an additional $10,000 if State Bank prevails in any appeal to the
Court of Appeal; and an additional $5,000 if State Bank prevails on any appeal or other application for review to the
Texas Supreme Court.
1 See Appellants' Joint Opening Brief, p. I, n.l.

APPELLEE'S BRIEF                                                                                    PAGE 8
                                            III.
                                 SUMMARY OF THE ARGUMENT

        The trial court properly granted State Bank's summary judgment motion and

 entered final judgment in its favor. State Bank's Motion demonstrates, as a matter of

 law, that State Bank complied with the applicable statutory foreclosure requirements of

 the Texas Property Code and that the Goods failed to raise a triable issue of material

 fact that any alleged irregularity in the foreclosure process caused, or contributed to, a

 grossly inadequate price at the foreclosure sale. The trial court also properly awarded

 State Bank its attorneys' fees under the terms of the Deed of Trust and other applicable

 Texas law.

                                                    IV.

                                                 ARGUMENT


1.	     STATE BANK COMPLIED WITH SECTION 51.002( d) OF THE TEXAS PROPERTY
        CODE.

        Appellants first contend that the trial court erred in granting State Bank's Motion

for Summary Judgment because the Goods, by competent controverting evidence, raised

genuine issues of material fact regarding State Bank's compliance with the 20-day notice

requirement in Section 51.002(d) of the Texas Property Code. 4 Under Section 51.002(d)

a mortgage servicer of a debt secured by the debtor's residence must first serve the

defaulting debtor with written notice, by certified mail, stating that the debtor is in default


     4 In their brief, Appellants claim "State Bank failed to provide written notice of sale," but Appellants made no
additional argument related to that claim. State Bank proffered the Affidavit of Julia Appleton in support of its
Motion for Summary Judgment in which Ms. Appleton testifies that she posted the notice of sale and sent it by
certified mail, return receipt requested, to the Goods on January 12, 2010, at least 21 days before the Foreclosure
Sale.
APPELLEE'S BRIEF	                                                                                    PAGE 9
and giving the debtor at least twenty (20) days to cure the default before the mortgage

servicer serves the 21-day notice of foreclosure required by Section 51.002(b)(3). TEX.

PROP. CODE § 51.002(d). The only material facts, however, are undisputed and establish,

as a matter of law, that the Standstill Agreement gave the Goods the required 20-day

notice in compliance with Section 51.002(d) of the Texas Property Code before State

Bank served the 21-day notice of the Foreclosure Sale in compliance with all applicable

requirements of the Texas Property Code and the Deed of Trust.

      A.	    The Standstill Agreement ItselfSatisfies the 20-Day Notice Requirement
             ofSection 5l.002(d) ofthe Texas Property Code.

      The July 14, 2009, Standstill Agreement satisfies the essential requirements of

Section 51.002(d). It gives the Goods - who signed the Standstill Agreement before a

notary public - actual notice of their default, stating that the Note matured by its terms

on March 21, 2008, and that the Goods did not pay the loan when it matured. R. 0067­

0088 (Kroiss AjJ, Exhibit 5 - Standstill Agreement).        The July 14, 2009, Standstill

Agreement not only gave the Goods more than 20-days notice and opportunity to cure ­

it actually gave them 170 days - their failure to pay the loan at maturity, but it also gave

them notice that State Bank would post the property for foreclosure if the Goods did not

pay the loan in full by December 31, 2009.        R. 0067-0088 (Kroiss AjJ, Exhibit 5 ­

Standstill Agreement).   Moreover, when the Goods did not cure the maturity default

within the 170 day cure period the Standstill Agreement allowed them, the substitute




APPELLEE'S BRIEF	                                                            PAGE   to
trustee waited 12 more days until January 12,2009, before he served the 2 I-day notice of

the February 2, 2010, Foreclosure Sale that the Goods now attack as wrongful. It is not.

       B.     Actual Notice is Sufficient to Satisfy the Mailing Requirements in Section
              51.002 ofthe Texas Property Code.

       The Goods complain that, although they received timely actual notice and

opportunity to cure the maturity default in the Standstill Agreement they signed before a

notary public, the notice is deficient because State Bank did not deliver the notice by

certified mail. But Texas courts have held consistently that actual notice is sufficient to

comply with the notice requirement of Section 51.002(b), which requires the mortgage

servicer, at least 21 days before the date of the foreclosure sale, to serve written notice of

the sale by certified mail on each debtor obligated to pay the debt. Savers Fed. Sav.- &

Loan Ass'n v. Reetz, 888 F.2d 1497, 1501 n. 6 (5th Cir. 1989) (where the only deficiency

in the notice of the foreclosure sale was that the written notices to the debtors were hand

delivered twenty-one days before the sale, rather than being mailed to them certified mail

as required by Texas Property Code Section 51.002(b)(3), and the debtor actually timely

received the notice required by Section 51.002(b)(3), there is sufficient compliance with

the notice requirement); Johnson v. First S. Props., Inc., 687 S.W.2d 399, 402 (Tex. App.

- Houston [14 th Dist.] 1985 writ refd n.r.e.) (incorrect name on notice address did not

violate Section 51.002 when debtor admitted receiving notice); Forestier v. San Antonio

Sav. Ass'n, 564 S.W.2d 160, 163 (Tex. Civ. App. - EI Paso 1978, writ refd n.r.e.)

(failure to send individual notice to spouse/co-debtor was immaterial since spouse/co-


APPELLEE'S BRIEF                                                              PAGE 11
debtor admitted receiving actual notice). Actual notice, timely received by the Goods

and long held sufficient under Section 51.002(b)(3), is sufficient, for the same reasons, to

satisfy the 20-day notice requirement in Section 51.002(d) of the Texas Property Code,

even though State Bank did not send the 20-day notice by certified mail.

          C.	 An agreement - such as the Standstill Agreement - may contain the 20­
              day Notice Required under Section 5J.002(d).

       The crux of Goods' defective notice claim is that an agreement - such as the

Standstill, Agreement -     cannot satisfy the Property Code's foreclosure notice

requirements; in other words, the Goods contend that a mailed notice, separate from any

kind of forbearance or other agreement, is required to satisfy the statute. This is not so.

Section 51.002(d) does not dictate the fonn the notice should take.         Cunningham v.

Dovenmuehle Mtg., Inc. (In re Cunningham), 2008 WL 1696756, at           * 11   (Bkrtcy. N.D.

Tex. 2008) (unpublished). Moreover, in Forestier, under a similar agreement to postpone

foreclosure, the court of appeals held that the foreclosure sale was valid, despite the

lender's failure to send the spouse/co-debtor notice by certified mail, because she

received actual notice "in the written agreement to postpone foreclosure and in the

written notice given to her attorney who notified her of the contents of the notice."

Forestier, 564 S.W.2d at 163 (emphasis added).

       The holding in Forestier strongly supports the trial court's summary judgment. In

Forestier, the debtors (husband and wife) acknowledged in their agreement with the

lender that: (1) they had made no payments to the lender on the mortgage loan note since


APPELLEE'S BRIEF	                                                               PAGE 12
October 1975; (2) the note was in default; (3) the defendant had exercised its option to

accelerate the maturity of the note and declared the entire amount of the note to be due

and payable; and (4) the defendant had the right to proceed with a trustee's foreclosure

sale of the property. Id. at 162. The agreement further provided that the debtors would

pay the entire amount of the debt to the lender by December 1, 1976, and, if the debt was

not paid in full, the lender had the right to proceed with the January 4, 1977, foreclosure

sale. Id. The debtors, like the Goods, failed to pay, and the lender instructed the trustee

under the deed of trust to proceed with foreclosure of the debtor's property. Id. at 163.

Mrs. Forestier sued the note holder and the trustee under the deed of trust for wrongful

foreclosure on the grounds that she did not receive statutory notice of the sale as required

by statute. [d. at 162. But Mrs. Forestier admitted that she had actual notice of the

foreclosure sale more than twenty-one days preceding the date of the sale because her

attorney received a copy of the actual notice and advised her of that notice. Id. at 163.

Moreover, the agreement to postpone the foreclosure put Mrs. Forestier on notice that the

defendant had the right to proceed with the January 4, 1977, foreclosure sale if she and

her husband did not pay the debt in full by December 1, 1976. Id. at 162. On these quite

similar facts, the court held the lender's failure to send Mrs. Forestier notice by certified

mail did not affect the validity of the foreclosure because Mrs. Forestier received actual

notice "in the written agreement to postpone foreclosure and in the written notice given

to her attorney who notified her of the contents of the notice." Id. at 163 (emphasis

added).
APPELLEE'S BRIEF                                                              PAGE 13
            D.	 The July 14, 2009, Standstill Agreement Gave the Goods More Than
                20-Days Notice and Opportunity to Cure their Maturity Default before
                State Bank Noticed the Goods' Property for Foreclosure on January
                12,2010.

        The Standstill Agreement gave the Goods actual notice of the default and more

than 20 days opportunity to cure before the substitute trustee - on January 12, 2010 ­

posted the Property for, and sent notice to the Goods of, the February 2, 2010,

Foreclosure Sale. The Standstill Agreement expressly and specifically notified the Goods

of their default, stating that­

            •	 the Note matured on March 21,2008;

            •	 Ken Good "failed and refused to pay the outstanding principal and accrued

                 interest" on March 21,2008;

            •	 as of July 14, 2009, the total amount due under the Note is principal in the

                 amount of $2,733,833.24, plus accrued and unpaid interest of $26,163.63

                 and attorneys' fees and costs of$10,833.29;

            •	 State Bank is the legal owner and holder of the Note and beneficiary of the

                 first priority security interest in the Property; and

            •	 all sums due and owing under the Note are now due and payable. 5

R. 0017 (Defendant's Motion for Summary Judgment,                       ~   9; R. 0027-0028 (Kroiss AjJ.,

~8);   and R. 0067-0088 (Kroiss AjJ., Exhibit 5 - Standstill Agreement). The Standstill

Agreement also established a 170 day forbearance period-from July 14, 2009, the

    S Although TEX. PROP. CODE §51.002(d) only requires notice to the debtor, both Ken Good (the debtor) and his
wife, Maria Good, signed the Standstill Agreement before a notary public.
APPELLEE'S BRIEF	                                                                              PAGE 14
 effective date of the Standstill Agreement, until December 31, 2009 - for the Goods to

 cure the maturity default by paying off the Note. R. 0067-0088 (Kroiss Ajf., Exhibit 5 ­

 Standstill Agreement). In fact, the Standstill Agreement expressly states that the purpose

 of the 170 day Forbearance Period is to give the Goods the opportunity to cure the

 maturity default by allowing "the Borrower [Ken Good] until December 31, 2009, to

 either sell or refinance the Northaven Property." R. 0067-0088 (Kroiss Ajf., Exhibit 5, p.

 2 - Standstill Agreement). Moreover, the Standstill Agreement specifically warns the

 Goods that State Bank would be entitled to post the Property for foreclosure because of

 the then existing maturity default unless the Note was paid off before the expiration of

 the Forbearance Period (as that term is defined in the Standstill Agreement). R. 0067­

 0088 (Kroiss Ajf., Exhibit 5 - Standstill Agreement).     State Bank complied with the

., statute in the Standstill Agreement by giving the Goods actual notice of Ken Good's

 failure to pay the Note at maturity and more than 20 days opportunity to cure. R. 0067­

 0088 (Kroiss Ajf., Exhibit 5 - Standstill Agreement).

        E.	    The Goods' Receipt ofActual Notice Satisfies the Certified Mailing
               Requirement in the Property Code.

        The Goods' receipt of actual notice-as demonstrated by their notarized signatures

 on the Standstill Agreement-satisfies the certified mail requirement in the foreclosure

 statutes. The Goods cannot complain that State Bank did not give them notice at all

 because, like the spouse/co-debtor in Forestier, the Goods signed the document giving

 them notice rather than receiving it in the mail. The fact that State Bank gave additional


  APPELLEE'S BRIEF	                                                          PAGE 15
notices-with shorter cure periods-when the Goods breached the Standstill Agreement

does not negate State Bank's compliance with Section 51.002(d) through the Standstill

Agreement. As the court of appeals held in Fitzgerald v. Harry, 2003 WL 22147557

(Tex. App. - Fort Worth Sept. 18,2003, no pet.), once a lender satisfies the 20-day notice

requirement of Section 51.002(d), the lender does not have to reissue 20-day notice after

borrower's bankruptcy and may issue subsequent notices of default giving less than 20­

days to cure. See also Herrera v. Emmis Mfg., Inc., 1995 WL 654561, at *4 (Tex. App.

- San Antonio Nov. 8, 1995, writ denied) (absent evidence that the Note was reinstated,

appellee was not required to re-accelerate by serving new notices, demands, and

accelerations).   Because State Bank did not reinstate the loan in the Standstill

Agreement-in fact, the Standstill expressly states that the loan remains in default - the

20-day notice requirement in the Standstill Agreement satisfies Section 51.002(d) of the

Texas Property Code.     State Bank did not - as the Goods contend - have to serve

additional 20-day notices when the Goods failed to satisfy the conditions to continued

forbearance in the Standstill Agreement.

       Appellants reliance on In re Cunningham, for the broad proposition that Texas

courts do not look to the period of actual notice, is misplaced.            This case is

distinguishable from Cunningham. The Goods received actual notice on July 14, 2009,

the effective date of the Standstill Agreement, that Ken Good was in default under the

Note and gave him until December 31, 2009-at least 170 days from the date of the

notice-to pay the matured debt in full.    The Court in Cunningham did not find that the
APPELLEE'S BRIEF                                                            PAGE 16
lender ever gave any effective notice giving Ms. Cunningham notice of default and at

least 20 days to cure.    Unlike Ms. Cunningham, the Goods knew on the date they

executed the Standstill Agreement that they had until December 31,2009, to pay the Note

in full or State Bank would thereafter proceed with its remedies, including foreclosure.

      The Standstill Agreement-a written notice-gave the Goods actual notice of Ken

Good's default and gave the Goods more than 20 days to payoff the matured debt. State

Bank gave the Goods sufficient notice under Section 51.002(d), and the Goods did not

raise a material issue of fact regarding State Bank's compliance with Section 51.002(d);

therefore, State Bank is entitled to judgment, as a matter of law, on the Goods' wrongful

foreclosure claims.

   2.	 ApPELLANTS DID NOT RAISE GENUINE ISSUES OF MATERIAL FACT THAT THE
       FORECLOSURE SALE PRICE WAS GROSSLY INADEQUATE.

       Appellants, in an inadequately briefed point of error, assert that that the Goods

raised a genuine issue of material fact regarding whether a defect in the non-judicial

foreclosure caused or contributed to a grossly inadequate foreclosure sale price, depriving

the Goods of equity in the Property. To establish a claim for wrongful foreclosure, there

must be: (1) evidence of irregularity; and (2) that irregularity must have caused or

contributed to cause the property to be sold for a grossly inadequate price. Am. Sav. &

Loan Ass'n of Houston v. Musick, 531 S.W.2d 581,587 (Tex. 1975). They did not meet

their burden. The undisputed material facts - including those presented by the Goods ­

negate the Goods' claim for wrongful foreclosure as a matter oflaw.


APPELLEE'S BRIEF	                                                            PAGE 17
       A.     There Was No Irregularity in the February 2,2010, Foreclosure Sale.

       In a wrongful foreclosure claim, "[t]he threshold issue is whether there were any

irregularities in the sale and if so, whether there is proof that those irregularities caused a

sale at a grossly inadequate price." Powell v. Stacy, 117 S.W.3d 70, 75 (Tex. App. - Fort

Worth 2003, no peL), citing Charter Nat 'I Bank Houston v. Stevens, 781 S.W.2d 368, 372

(Tex. App. - Houston [14 th DisL] 1989, writ denied)(interpreting the supreme court's

holding in Musick). In other words, "[m]ere inadequacy of consideration alone ... does

not render a foreclosure sale void if the sale was otherwise conducted legally and fairly."

First State Bank v. Keilman, 851 S.W.2d 914, 921 (Tex. App. - Austin 1993, writ

denied); See also, Hunt v. Jefferson Sav. & Loan Ass 'n, 756 S.W.2d 762, 764 (Tex. App.

- Dallas 1988, writ denied).       Absent a showing of an irregularity, the court is not

permitted to review the amount received at the foreclosure sale. See BFP v. Resolution

Trust Corp., 511 U.S. 531, 545,1145 S.CL 1757,1765,128 L.Ed 2d 556 (l994)("a fair

and proper price, or a 'reasonably equivalent value,' for foreclosed property, is the price

in fact received at the foreclosure sale, so long as all the requirement [sic] of the State's

foreclosure law have been complied with."); Am. Sav. & Loan Ass 'n of Houston v.

Musick, 531 S.W.2d 581, 587 (Tex. 1975)("[t]here must be evidence of irregularity,

though slight, which irregularity must have caused or contributed to cause the property to

bt: sold for a grossly inadequate price."); In re Greenhaw Energy, Inc., 2007 WL

1953491, at   * 12   (Bkrtcy. S.D. Tex. July 3, 2007)(without a showing of an irregularity,

the Court is not permitted to review the amount received at the foreclosure sale).
APPELLEE'S BRIEF                                                                PAGE 18
      State Bank has already addressed Appellants' erroneous claim that State Bank

failed to give the 20-day notice required under Section 51.002(d) of the Texas Property

Code. There is simply no evidence of any defect or other irregularity in the foreclosure.

The Note was mature. The Standstill Agreement satisfies the 20 day notice requirement

in Section 51.002(d). Savers Fed. Say. & Loan Ass'n v. Reetz, 888 F.2d 1497, 1501 n. 6

(timely hand delivery in lieu of delivery by certified mail could not have caused or

contributed to any inadequacy of price at the foreclosure sale).       After the 170-day

forbearance period prescribed in the Standstill Agreement expired, the substitute trustee

posted the required foreclosure notice and gave the Goods 21 days notice of the

foreclosure in accordance with the Deed of Trust and Section 51.002(b)(3) of the Texas

Property Code.      State Bank purchased the Property at the Foreclosure Sale for

$2,865,968.85. See, e.g., Am. Say. & Loan Ass'n v. Musick, 531 S.W.2d 581, 587 (Tex.

1975)(finding sale of property valued at $338,365 for $25,000 not grounds to set aside

sale absent irregularities). State Bank's summary judgment evidence negates the first

element of the Goods' wrongful foreclosure claim as a matter of law.

       B.	   Even If State Bank Failed To Comply With The Statutory Notice
             Requirements Of Section 51.002(D)-It Did Not-Appellants Did Not
             Raise A Fact Issue As To Whether That Failure Caused Or Contributed
             To Cause The Property To Be Sold For A Grossly Inadequate Price.

       State Bank complied with the notice requirements of the Texas Property Code and

negated the first element of the Goods' wrongful foreclosure claim. But, even if it had

not done so, Appellants did not put on competent, controverting evidence to raise a


APPELLEE'S BRIEF	                                                          PAGE 19
material fact issue that their alleged failure to receive the notice caused or contributed to

cause the Property to be sold for a grossly inadequate price.

         The purpose of a wrongful foreclosure action is to protect mortgagors against

those sales where through mistake, fraud, or unfairness, the sale results in an inequitably

low price. See 30 TEX. JUR.3D Deeds of Trust and Mortgages §190 (2010). Specifically,

Appellants must show an irregularity in the foreclosure sale as a prerequisite to any

recovery for wrongful foreclosure. And that irregularity must contribute to an inadequate

pnce.     "Evidence showing that a better price would have resulted if the sale was

conducted in a different manner is required." Hunt, 756 S.W.2d 762, 764 (Tex. App. ­

Dallas 1988, writ denied). The Goods did not raise a fact issue regarding whether the

alleged irregularity-their purported failure to receive the notice required by Section

51.002(d)-caused any reduction in the bid, much less a bid for a grossly inadequate

price.

         And, in any case, the Goods did not establish that Sate Bank purchased the

property for for a grossly inadequate price.         State Bank purchased the Property for

$2,865,968.85 at the Foreclosure Sale.           R. 0018 (Defendant's Motion for Summary

Judgment,    ~14);   R. 0029 (Kroiss AjJ.,   ~   12); R.0089-0094 (Kroiss AjJ., Exhibit 6 ­

Foreclosure Sale Deed). The Goods, relying on unauthenticated, hearsay from the Dallas

County Appraisal District records, maintain that the appraised value of the property is




APPELLEE'S BRIEF                                                              PAGE 20
$3,525,000.00. 6 R. 0123-0124 (Plaintiffs' Response to Motion for Summary Judgment,

p. 9 and Exhibit A - Affidavit of Kenneth M. Good,                           ~11).     Even if the Appraisal

District's valuation were admissible and the value accurate - State Bank's bid for just

over 81 % of appraisal district's appraised value is not grossly inadequate as a matter of

law. Bellah v. First Nat'l Bank, 474 S.W.2d 785, 788 (Tex. Civ. App. - Eastland 1971,

writ refd n.r.e.). As the Dallas Court of Civil Appeals held in Richardson v. Kent, 47

S. W.2d 420, 425 (Tex. Civ. App. - Dallas 1932, no writ), a foreclosure sales price of

more than fifty percent of property value is not grossly inadequate as a matter of law.

Even if the Goods put on evidence to create a fact issue regarding irregularities in the

foreclosure procedure, which they did not, the Goods did not raise a fact issue that the

sale price would have been higher if they had received notice under Section 51.002(d), or

if the sale were conducted in a different manner. State Bank negated the second element

of the Good's wrongful foreclosure claim as a matter oflaw.

3.	     State Bank Demonstrated it is Entitled, as a Matter of Law, to Attorneys'
        Fees.

        Appellants last-and also inadequately briefed-point challenges the attorneys'

fees awarded to State Bank as "excessive and unsupported by the evidence." The Goods




     6 In Plaintiffs' Response to Motion for Summary Judgment, the Goods state-without further support-that the

actual market value of the Property "may be higher" than the appraised tax value. In his affidavit, attached to the
Response, Ken Good stated that he "believes" the market value of the Property is higher than $3,525,000, but gives
no basis for this belief and no amount. Although Texas follows a relaxed approach to the "expertise" requirement
for owners of property to testify as to the fair market value of their own property, the owner must establish that he
has the requisite knowledge of the fair market value of the property. Porras v. Craig, 675 S.W.2d 503, 504-505
(Tex. 1984). Ken Good did not establish the requisite knowledge.
APPELLEE'S BRIEF	                                                                                  PAGE 21
also claim that they raised genuine issues of material fact regarding State Bank's

entitlement to attorneys' fees.

       Generally, an appellate court reviews a trial court's decision to grant or deny

attorneys' fees for an abuse of discretion, subject to the requirement that any fees

awarded be reasonable and necessary. See Bocquet v. Herring, 972 S.W.2d 19, 21

(Tex. 1998); EMC Mtg. Corp. v. Davis, 167 S.W.3d 406, 418 (Tex.App.-Austin 2005, pel.

denied). A trial court abuses its discretion if there is no evidence or insufficient evidence

to support the fee award. Bocquet, 972 S.W.2d at 21. When reviewing a trial court's

decision under this standard, the appellate court must view the evidence in the light most

favorable to the trial court's ruling and indulge every presumption in its favor. Carlile v.

RLS Legal Solutions, Inc., 138 S.W.3d 403, 409 (Tex. App. - Houston [14 th DisL] 2004,

no peL).

       "As a general rule, the party seeking to recover attorneys' fees carries the burden

of proof." Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 10 (Tex. 1991). But when a

party attacks the legal sufficiency of an adverse finding on an issue that it did not have

the burden to prove at trial, it must demonstrate that there is no evidence to support the

adverse finding. Carlile, 138 S.W.3d at 409. "The party seeking review of a trial court's

award of attorneys' fees has the burden of presenting the reviewing court with a record

showing that the trial court abused its discretion in making the award." Thomas v.

Thomas, 902 S.W.2d 621,626 (Tex.App.-Austin 1995, writ denied).



APPELLEE'S BRIEF                                                              PAGE 22
       The trial court granted State Bank's motion for summary judgment "as to all

issues and parties," except the issue of State Bank's reasonable and necessary attorneys'

fees, and ordered a hearing on the attorneys' fee issue. On June 9, 20 I0, the trial court,

after hearing evidence on State Bank's reasonable and necessary attorneys' fees, found

that State Bank is entitled to recover reasonable and necessary attorneys' fees in the

amount of $10,000; an additional $2,500 if the Goods file an unsuccessful motion for

new trial; an additional $10,000 if State Bank prevails in any appeal to the Court of

Appeal; and an additional $5,000 if State Bank prevails on any appeal or other

application for review to the Texas Supreme Court. The Goods did not ask for a record at

the June 9, 2010, hearing, and the record on this appeal does not contain a transcript of

that hearing. When, as in this case, the party complaining did not request or obtain a

record of an evidentiary hearing, the court will presume there was evidence before the

trial court to support the court's award of attorneys' fees. Tricon Ins. Serv., Inc. v. Dallas

Cowboys Football Club, Ltd., No. 05-02-01737-CY, 2004 WL 1813752, at * 1 (Tex. App.

- Dallas Aug. 16, 2004)(mem. op., not designated for publication). This presumption is

sufficient to support the trial court's award of attorneys' fees. The Appellants have not

sustained their burden of presenting this Court with a record showing the trial court

abused its discretion.   This Court should affirm the trial court's award of State Bank's

attorneys' fees.




APPELLEE'S BRIEF                                                               PAGE 23
                                            V.
                                        PRAYER
       State Bank prays that the Court affinn the trial court's summary judgment and that

State Bank be granted such other and further relief, including costs, to which it may show

itselfjustly or equitably entitled.



                                         Respectfully submitted,


                                         THOMAS M. WHELAN
                                         Texas BarNo. 21263800
                                         ASHLEY ERIN MARINO
                                         Texas Bar No. 74065676
                                         MCGUIRE, CRADDOCK & STROTHER, P.e.
                                         2501 N. Harwood, Suite 1800
                                         Dallas, TX 7520 I
                                         (214) 954-6800 - Telephone
                                         (2141954-6850 - Telecopier
                                         ATTORNEYS FOR DEFENDANT,
                                         STATE BANK AND TRUST
                                         COMPANY, DALLAS




APPELLEE'S BRIEF                                                           PAGE 24
                          CERTIFICATE OF SERVICE

     I certify that on Wednesday, December 29, 2010, my office served a copy of this
document via certified mail, return receipt requested, to:

      Francis B. Majorie, PC

      The Majorie Firm, Ltd.

      3514 Cedar springs Road

      Dallas, Texas 75219

      ATTORNEY FOR APPELLANTS

                                                           ,          .
                                                A. ~ MtiAUIUL
                                                   Ashley Erin Marino




APPELLEE'S BRIEF                                                      PAGE 25

				
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