Edwards v. Holleman

842 S.W.2d 704, 1992 Tex. App. LEXIS 1961, 1992 WL 173570
CourtCourt of Appeals of Texas
DecidedJuly 23, 1992
Docket01-90-00336-CV
StatusPublished
Cited by5 cases

This text of 842 S.W.2d 704 (Edwards v. Holleman) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Edwards v. Holleman, 842 S.W.2d 704, 1992 Tex. App. LEXIS 1961, 1992 WL 173570 (Tex. Ct. App. 1992).

Opinions

OPINION

DUGGAN, Justice.

Stephen Holleman, appellee, brought suit against Galveston Savings and Loan Association (Galveston S & L) and David E. Edwards, defendants in the trial below, for charging unreasonable trustee’s fees, attorney’s fees, and expenses under a deed of trust. The jury found that the trustee’s fees and expenses of $18,061.31 were unreasonable and that a total of $3,000 would be reasonable. The jury further found that, by charging such trustee’s fees, defendants breached their fiduciary duty to Holleman and that defendants intended to gain an additional advantage for Edwards or Galveston S & L. Based on these findings, the jury determined that Holleman was entitled to $10,000 in exemplary damages. The jury also found that Holleman was entitled to reasonable attorney’s fees of $18,500 for legal services rendered in preparation and trial of the case.

The judgment recites that Holleman is awarded $20,061.31 from defendants and $18,500 for attorney’s fees for services rendered through trial of the case. The amount of $20,061.31 reflects a deduction of the $3,000 found by the jury to be reasonable trustee’s fees.

Edwards asserts five points of error on appeal. In points of error one through four, he maintains that the evidence adduced at trial was legally and factually insufficient to support the judgment regarding trustee’s fees and expenses. In point of error five, Edwards asserts that the trial court erred in the wording of a jury question and in submitting the question about additional benefits in the disjunctive. Holleman brings two cross-points on appeal. Because Holleman’s cross-point one may be determined as a matter of law, it is dispositive of the case; therefore, appellant’s points of error need not be addressed. Donwerth v. Preston II Chrysler-Dodge, 775 S.W.2d 634, 639 (Tex.1989); Hernandez v. City of Fort Worth, 617 S.W.2d 923, 924 (Tex.1981); Jackson v. Ewton, 411 S.W.2d 715, 717 (Tex.1967); Young v. Kilroy Oil Co., 673 S.W.2d 236, 241 (Tex.App.—Houston [1st Dist.] 1984, writ ref’d n.r.e.).

Summary of Facts

On November 30, 1984, Holleman and Richard Higgins purchased a house in Galveston by borrowing a portion of the purchase money from Galveston S & L. In connection with the purchase, Holleman and Higgins executed a promissory note and a deed of trust to secure the note.

In order to make improvements on the property, Holleman and Higgins executed a Builder’s & Mechanic’s Lien Note and Contract, which were assigned to Galveston S & L. In connection with the loan for im[706]*706provements, Holleman and Higgins also signed a promissory note payable to the order of Galveston S & L. This note was secured by a second deed of trust on the property.

By warranty deed dated August 30,1985, Higgins conveyed all of his right, title, and interest in the property to Holleman. Several months later, Holleman became delinquent on his note payments and Galveston S & L accelerated the notes. Edwards, trustee under the notes and president of Galveston S & L, instituted foreclosure proceedings.

Holleman found a buyer for the property and was prepared to close the sale on the day before the scheduled foreclosure sale. When Holleman sought a payoff figure from Galveston S & L, it submitted a figure that included trustee’s fees, attorney’s fees, and expenses. Holleman objected to paying any fees or expenses, but Galveston S & L refused to delete these items.

Holleman alleged that, because of Galveston S & L’s refusal to reduce the fees and expenses, he was forced to go to persons who were to receive portions of the closing proceeds and persuade them to reduce the amounts they were to receive. The sale was then consummated.

Trustee’s Fees

In his first cross-point, Holleman contends that the trial court erred in failing to hold as a matter of law, as urged in “Plaintiffs’ Motion to Deem Issues as Matters of Law” and in “Plaintiffs’ Motion for Judgment Non Obstante Veredicto, Motion to Disregard Findings, or Alternatively, Motion for Judgment,” that a trustee has no right to withhold trustee’s fees, attorney fees, and expenses from the proceeds of the sale of property when the property is not sold at a trustee’s sale, but is sold by the mortgager prior to the foreclosure sale.

The record reveals that Galveston S & L, the holder of the notes, accelerated the loans after Holleman failed to make monthly payments. Through its attorney, James Schweitzer, Galveston S & L sent Holleman notice of default with a formal demand to pay the sums due by November 8, 1985. The letter stated, “[i]f the past due installments, accrued interest, attorney’s fees and expenses, are not paid on or before November 8,1985, foreclosure proceedings, in accordance with the Deed of Trust, will be instituted.”

Thereafter, Galveston S & L elected to foreclose under the power of sale clause contained in the deed of trust. On December 2, 1985, one day before the foreclosure sale was to take place, Holleman tendered the amount of the loan and, under protest, also paid attorney’s fees, trustee’s fees, and expenses in the amount of $18,061.31.

To determine whether the trustee is entitled to recover reasonable fees, this Court must look to the language set out in the note and the deed of trust. Murchison v. Freeman, 127 S.W.2d 369, 372 (Tex.Civ. App.— El Paso 1939, writ ref’d). The terms in the note and the deed of trust securing the note should be strictly construed to determine the rights of the parties. Id.

Here, the deeds of trust provide:

[i]f the breach is not cured on or before the date specified in the notice, then the Lender at Lender’s option may declare all of the sums secured by this Deed of trust to be immediately due and payable without further demand and may invoke the power of sale and any other remedies permitted by applicable law. Lender shall be entitled to collect all reasonable costs and expenses incurred in pursuing the remedies provided in this paragraph 18, including, but not limited to, reasonable attorney’s fees.

The deeds further provide that in the event the Lender invokes the power of sale clause, then the “[tjrustee shall apply the proceeds of the sale to reasonable trustee’s fees and attorney’s fees and costs of title evidence, to all sums secured by the deeds of trust and any excess to the persons entitled thereto.” (Emphasis added.) Under this provision, the trustee is entitled to fees only where there has been a foreclosure sale by the trustee. Here, the property was not sold at the foreclosure sale, but was sold by the mortgagor prior to the foreclosure sale. Thus, under this [707]*707deed of trust, the trustee is not entitled to receive any fees.

Appellant argues that at the time the loan payoff occurred, the trustee had done everything except conduct the foreclosure sale and sign the deed over to the successful bidder.

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Related

Anderson, Greenwood & Co. v. Martin
44 S.W.3d 200 (Court of Appeals of Texas, 2001)
Edwards v. Kaye
9 S.W.3d 310 (Court of Appeals of Texas, 2000)
Edwards v. Holleman
893 S.W.2d 115 (Court of Appeals of Texas, 1995)
Edwards v. Holleman
862 S.W.2d 580 (Texas Supreme Court, 1993)

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Bluebook (online)
842 S.W.2d 704, 1992 Tex. App. LEXIS 1961, 1992 WL 173570, Counsel Stack Legal Research, https://law.counselstack.com/opinion/edwards-v-holleman-texapp-1992.