COURT OF APPEALS SECOND DISTRICT OF TEXAS FORT WORTH
NO. 02-14-00221-CV
BRYAN GAYDOS APPELLANT
V.
BANK OF AMERICA, N.A. APPELLEE
----------
FROM THE 236TH DISTRICT COURT OF TARRANT COUNTY TRIAL COURT NO. 236-267821-13
MEMORANDUM OPINION 1
Appellant Bryan Gaydos appeals the trial court’s grant of summary
judgment against him on his claims against appellee Bank of America, N.A. We
affirm.
1 See Tex. R. App. P. 47.4. Background Facts
In January 2008, Gaydos executed a note in favor of Bank of America to
purchase real property in Fort Worth, secured by a deed of trust. Gaydos later
defaulted on his mortgage payments. In March and July 2010, Bank of
America’s attorney filed two appointments of substitute trustee. Bank of America
foreclosed on Gaydos’s property on August 3, 2010 and sold the property to
Federal National Mortgage Association (Fannie Mae).
Gaydos, Bank of America, and Fannie Mae entered into an agreement to
rescind the foreclosure so that Gaydos could cure his default and keep his home.
Gaydos executed a rescission deed and agreed that the foreclosure had been in
compliance with the property code. Gaydos remained in default, and Bank of
America again began foreclosure proceedings.
To prevent foreclosure, Gaydos sued Bank of America for (1) violations of
the Texas Debt Collection Act and the Property Code, (2) filing a fraudulent lien
instrument, (3) breach of contract, and (4) wrongful foreclosure, and (5) to quiet
title. Bank of America filed a motion for summary judgment on all of Gaydos’s
claims, which the trial court granted after a hearing. Gaydos then filed this
appeal.
Standard of Review
We review a summary judgment de novo. Travelers Ins. Co. v. Joachim,
315 S.W.3d 860, 862 (Tex. 2010). We consider the evidence presented in the
light most favorable to the nonmovant, crediting evidence favorable to the
2 nonmovant if reasonable jurors could, and disregarding evidence contrary to the
nonmovant unless reasonable jurors could not. Mann Frankfort Stein & Lipp
Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). We indulge every
reasonable inference and resolve any doubts in the nonmovant’s favor.
20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008). A defendant who
conclusively negates at least one essential element of a cause of action is
entitled to summary judgment on that claim. Frost Nat’l Bank v. Fernandez,
315 S.W.3d 494, 508 (Tex. 2010); see Tex. R. Civ. P. 166a(b), (c).
Discussion
1. Bank of America’s summary judgment evidence
In part of Gaydos’s first point, he objects to an affidavit by Shalini Parker
that Bank of America attached to its motion for summary judgment. Specifically,
he complains that Parker “avers no personal knowledge,” “claims no actual
examination of a document or record, only vouching for electronic copies
maintained by B[ank of America],” and “makes no claim of custody of any of the
referenced documents by B[ank of America] on the basis of . . . having actually
examined the document itself.”
We review the trial court’s rulings concerning the admission or exclusion of
evidence for an abuse of discretion. See City of Brownsville v. Alvarado,
897 S.W.2d 750, 753 (Tex. 1995). A trial court abuses its discretion if the court
acts without reference to any guiding rules or principles, that is, if the act is
3 arbitrary or unreasonable. Low v. Henry, 221 S.W.3d 609, 614 (Tex. 2007); Cire
v. Cummings, 134 S.W.3d 835, 838–39 (Tex. 2004).
Parker’s affidavit states, in part,
2. In my capacity as AVP, Operations Team Lead for Bank of America, I have access to the book and records of Bank of America pertaining to the mortgage at issue in this matter.
3. The documents, attached hereto . . . , are true and correct copies of records that are kept or have been obtained by Bank of America in the ordinary course of business. It was in the regular course of business for an employee or representative of Bank of America who had knowledge of the act, event, condition, or opinion recorded, to transmit information to be included in such record. The record was made at or near the time of the act, event, condition, or opinion recorded or reasonably soon thereafter. The records attached hereto are exact duplicates of the originals.
The rules of evidence do not require that the qualified witness who lays the
predicate for the admission of business records be their creator, be an employee
of the same company as the creator, or have personal knowledge of the contents
of the record—personal knowledge of the manner in which the records were kept
will suffice. See Tex. R. Evid. 803(6), 902(10); see also In re E.A.K., 192 S.W.3d
133, 142 (Tex. App.—Houston [14th Dist.] 2006, pet. denied) (explaining that
witness laying predicate for admission of a document under business-records
exception need only have knowledge of how the records were prepared). Parker
averred knowledge of the manner of Bank of America’s recordkeeping and that
an employee with knowledge of the act or event made the record; such
statements substantially comply with the business-records exception. See
Tex. R. Evid. 803(6), 902(10); Obgomo v. Am. Homes 4 Rent Properties
4 Two, LLC, No. 02-14-00105-CV, 2014 WL 7204552, at *3 (Tex. App.—Fort
Worth Dec. 18, 2014, no pet. h.) (mem. op.); see also Rockwell v. Wells Fargo
Bank, N.A., No. 02-12-00100-CV, 2012 WL 4936619, at *4 (Tex. App.—Fort
Worth Oct. 18, 2012, no pet.) (mem. op.) (noting that affiant was not required to
examine original documents for purposes of making an affidavit and that it was
sufficient for affiant to aver that attached records were exact duplicates of the
originals). We therefore overrule that part of Gaydos’s first point regarding Bank
of America’s summary judgment evidence.
2. Recorded power of attorney
In the remainder of his first point, Gaydos contends that the trial court
erred by granting summary judgment because he presented sufficient evidence
on his claims to raise a fact issue on each of his claims. He premises his
argument largely on his claim that the appointments of substitute trustees were
invalid. His second point also concerns the validity of the appointments. Gaydos
claims that the appointments were not “sufficiently supported by a recorded
power of attorney.” He cites to section 489 of the former probate code (now
codified as section 751.151 of the estates code), which requires a durable power
of attorney for any real property transaction requiring an instrument to be
recorded. See Tex. Est. Code Ann. § 751.151 (West 2014).
A durable power of attorney is a written instrument that designates another
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COURT OF APPEALS SECOND DISTRICT OF TEXAS FORT WORTH
NO. 02-14-00221-CV
BRYAN GAYDOS APPELLANT
V.
BANK OF AMERICA, N.A. APPELLEE
----------
FROM THE 236TH DISTRICT COURT OF TARRANT COUNTY TRIAL COURT NO. 236-267821-13
MEMORANDUM OPINION 1
Appellant Bryan Gaydos appeals the trial court’s grant of summary
judgment against him on his claims against appellee Bank of America, N.A. We
affirm.
1 See Tex. R. App. P. 47.4. Background Facts
In January 2008, Gaydos executed a note in favor of Bank of America to
purchase real property in Fort Worth, secured by a deed of trust. Gaydos later
defaulted on his mortgage payments. In March and July 2010, Bank of
America’s attorney filed two appointments of substitute trustee. Bank of America
foreclosed on Gaydos’s property on August 3, 2010 and sold the property to
Federal National Mortgage Association (Fannie Mae).
Gaydos, Bank of America, and Fannie Mae entered into an agreement to
rescind the foreclosure so that Gaydos could cure his default and keep his home.
Gaydos executed a rescission deed and agreed that the foreclosure had been in
compliance with the property code. Gaydos remained in default, and Bank of
America again began foreclosure proceedings.
To prevent foreclosure, Gaydos sued Bank of America for (1) violations of
the Texas Debt Collection Act and the Property Code, (2) filing a fraudulent lien
instrument, (3) breach of contract, and (4) wrongful foreclosure, and (5) to quiet
title. Bank of America filed a motion for summary judgment on all of Gaydos’s
claims, which the trial court granted after a hearing. Gaydos then filed this
appeal.
Standard of Review
We review a summary judgment de novo. Travelers Ins. Co. v. Joachim,
315 S.W.3d 860, 862 (Tex. 2010). We consider the evidence presented in the
light most favorable to the nonmovant, crediting evidence favorable to the
2 nonmovant if reasonable jurors could, and disregarding evidence contrary to the
nonmovant unless reasonable jurors could not. Mann Frankfort Stein & Lipp
Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). We indulge every
reasonable inference and resolve any doubts in the nonmovant’s favor.
20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008). A defendant who
conclusively negates at least one essential element of a cause of action is
entitled to summary judgment on that claim. Frost Nat’l Bank v. Fernandez,
315 S.W.3d 494, 508 (Tex. 2010); see Tex. R. Civ. P. 166a(b), (c).
Discussion
1. Bank of America’s summary judgment evidence
In part of Gaydos’s first point, he objects to an affidavit by Shalini Parker
that Bank of America attached to its motion for summary judgment. Specifically,
he complains that Parker “avers no personal knowledge,” “claims no actual
examination of a document or record, only vouching for electronic copies
maintained by B[ank of America],” and “makes no claim of custody of any of the
referenced documents by B[ank of America] on the basis of . . . having actually
examined the document itself.”
We review the trial court’s rulings concerning the admission or exclusion of
evidence for an abuse of discretion. See City of Brownsville v. Alvarado,
897 S.W.2d 750, 753 (Tex. 1995). A trial court abuses its discretion if the court
acts without reference to any guiding rules or principles, that is, if the act is
3 arbitrary or unreasonable. Low v. Henry, 221 S.W.3d 609, 614 (Tex. 2007); Cire
v. Cummings, 134 S.W.3d 835, 838–39 (Tex. 2004).
Parker’s affidavit states, in part,
2. In my capacity as AVP, Operations Team Lead for Bank of America, I have access to the book and records of Bank of America pertaining to the mortgage at issue in this matter.
3. The documents, attached hereto . . . , are true and correct copies of records that are kept or have been obtained by Bank of America in the ordinary course of business. It was in the regular course of business for an employee or representative of Bank of America who had knowledge of the act, event, condition, or opinion recorded, to transmit information to be included in such record. The record was made at or near the time of the act, event, condition, or opinion recorded or reasonably soon thereafter. The records attached hereto are exact duplicates of the originals.
The rules of evidence do not require that the qualified witness who lays the
predicate for the admission of business records be their creator, be an employee
of the same company as the creator, or have personal knowledge of the contents
of the record—personal knowledge of the manner in which the records were kept
will suffice. See Tex. R. Evid. 803(6), 902(10); see also In re E.A.K., 192 S.W.3d
133, 142 (Tex. App.—Houston [14th Dist.] 2006, pet. denied) (explaining that
witness laying predicate for admission of a document under business-records
exception need only have knowledge of how the records were prepared). Parker
averred knowledge of the manner of Bank of America’s recordkeeping and that
an employee with knowledge of the act or event made the record; such
statements substantially comply with the business-records exception. See
Tex. R. Evid. 803(6), 902(10); Obgomo v. Am. Homes 4 Rent Properties
4 Two, LLC, No. 02-14-00105-CV, 2014 WL 7204552, at *3 (Tex. App.—Fort
Worth Dec. 18, 2014, no pet. h.) (mem. op.); see also Rockwell v. Wells Fargo
Bank, N.A., No. 02-12-00100-CV, 2012 WL 4936619, at *4 (Tex. App.—Fort
Worth Oct. 18, 2012, no pet.) (mem. op.) (noting that affiant was not required to
examine original documents for purposes of making an affidavit and that it was
sufficient for affiant to aver that attached records were exact duplicates of the
originals). We therefore overrule that part of Gaydos’s first point regarding Bank
of America’s summary judgment evidence.
2. Recorded power of attorney
In the remainder of his first point, Gaydos contends that the trial court
erred by granting summary judgment because he presented sufficient evidence
on his claims to raise a fact issue on each of his claims. He premises his
argument largely on his claim that the appointments of substitute trustees were
invalid. His second point also concerns the validity of the appointments. Gaydos
claims that the appointments were not “sufficiently supported by a recorded
power of attorney.” He cites to section 489 of the former probate code (now
codified as section 751.151 of the estates code), which requires a durable power
of attorney for any real property transaction requiring an instrument to be
recorded. See Tex. Est. Code Ann. § 751.151 (West 2014).
A durable power of attorney is a written instrument that designates another
person as attorney in fact or agent, is signed by an adult principal, and contains
words that “show the principal’s intent that the authority conferred on the attorney
5 in fact or agent shall be exercised notwithstanding the principal’s subsequent
disability or incapacity.” Id. § 751.002 (West 2014). We fail to see how a statute
in the probate code relating to a person’s disability or incapacitation is applicable
to a bank’s actions under the property code. See id. § 22.016 (West 2014)
(defining an incapacitated person as a minor or “an adult who, because of a
physical or mental condition, is substantially unable to: (A) provide food, clothing,
or shelter for himself or herself; (B) care for the person’s own physical health; or
(C) manage the person’s own financial affairs; or . . . must have a guardian
appointed for the person to receive funds due the person from a governmental
source”).
The property code states, “A mortgagee or mortgage servicer may make
an appointment or authorization [of a substitute trustee] by power of attorney,
corporate resolution, or other written instrument.” Tex. Prop. Code Ann.
§ 51.0075 (West 2014). The code does not require a power of attorney, much
less a durable power of attorney, to be recorded for an appointment of a
substitute trustee to be valid. See Covarrubias v. U.S. Bank, Nat’l Ass’n,
No. 3:13-CV-3002-B, 2015 WL 221083, at *4 (N.D. Tex. Jan. 15, 2015)
(“Defendants correctly assert that a power of attorney such as the one executed
between BOA and U.S. Bank need not be recorded to give effect to an
assignment or appointment affecting a real property interest.”); Green v.
JPMorgan Chase Bank, N.A., 937 F. Supp. 2d 849, 862 (N.D. Tex. 2013) (“The
Deed does not mandate that appointment of a substitute trustee be recorded.
6 Likewise, the Texas Property Code contains no such requirement.”); Gillespie v.
BAC Home Loans Servicing, LP, No. 4:11-CV-388-A, 2013 WL 646383, at *6
(N.D. Tex. Feb. 21, 2013) (“The plain language of the Property Code does not
indicate the existence of any requirement that the appointment of a substitute
trustee be recorded to be valid, and courts interpreting the provisions have not
found such a requirement.”). The deed of trust in this case also allows for the
appointment of a substitute trustee “without the necessity of any formality other
than a designation by Lender in writing.” Thus, we overrule Appellant’s points to
the extent they are premised on invalid appointments.
3. Bank of America’s status as a mortgagee
In part of his first point, Gaydos argues that Bank of America “had no more
arguable relationship to the Loan” after “a merger of record title via the Trustee’s
Deed.” We interpret his argument to be that the rescission of the substitute
trustee’s foreclosure sale to Fannie Mae was ineffective. Gaydos relies on
Bonilla v. Roberson, 918 S.W.2d 17, 21 (Tex. App.—Corpus Christi 1996, no
writ), for his contention that a trustee cannot rescind a sale. However, in Bonilla,
the substitute trustee attempted to rescind the foreclosure sale without the
debtor’s knowledge or consent. Id. at 20. In this case, Gaydos, Bank of
America, and Fannie Mae all agreed to rescind the sale. Cf. Lopez v.
Countrywide Mortg., No. CIV. A. C-06-116, 2007 WL 2455292, at *2 (S.D. Tex.
Aug. 24, 2007) (comparing that case to Bonilla, noting that there was no
evidence that Lopez “agreed, or was even aware, of the rescission putting title
7 back in his name,” and citing Williams v. Countrywide Home Loans, Inc., 2007
WL 2076960, at *14 (S.D. Tex. 2007), for proposition that parties may agree to
rescind the foreclosure sale). Bonilla is therefore inapplicable to the instant case,
and we overrule the remainder of Gaydos’s points.
Conclusion
Having overruled Gaydos’s two points on appeal, we affirm the trial court’s
judgment.
/s/ Lee Gabriel
LEE GABRIEL JUSTICE
PANEL: LIVINGSTON, C.J.; DAUPHINOT and GABRIEL, JJ.
DELIVERED: April 2, 2015