HSBC Bank USA, N.A. v. Watson

377 S.W.3d 766, 2012 Tex. App. LEXIS 4811, 2012 WL 2217037
CourtCourt of Appeals of Texas
DecidedJune 15, 2012
DocketNo. 05-10-00676-CV
StatusPublished
Cited by31 cases

This text of 377 S.W.3d 766 (HSBC Bank USA, N.A. v. Watson) 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
HSBC Bank USA, N.A. v. Watson, 377 S.W.3d 766, 2012 Tex. App. LEXIS 4811, 2012 WL 2217037 (Tex. Ct. App. 2012).

Opinion

OPINION

Opinion By

Justice FITZGERALD.

Appellants filed this bill of review, seeking to set aside a default judgment that had allegedly voided property and contract rights owned by Fieldstone Mortgage. Appellants further alleged that they were the proper parties to sue for this relief by virtue of certain assignments by Fieldstone Mortgage. Appellees contested appellants’ standing via pleas to the jurisdiction. The trial judge signed an order denying appellants’ bill of review and subsequently made findings of fact and conclusions of law reciting that the pleas to the jurisdiction were sustained and the proceeding was dismissed. Appellants appealed. We affirm in part and reverse and remand in part.

I. Appeal by Litton Loan Servicing, L.P.

Appellant Litton Loan Servicing, L.P. voluntarily dismissed its appeal with respect to appellees Tony Watson and Jeanie Watson but not with respect to appellee Matthew Aiken. Litton did not file an appellant’s brief, but appellees filed briefs. Accordingly, we will affirm the judgment as to Litton. See Tex.R.App. P. 38.8(a)(3) (permitting court of appeals to affirm judgment based on appellee’s brief when appellant fails to file a brief); In re L.N.E., No. 05-07-01712-CV, 2009 WL 280472, at *3 (Tex.App.-Dallas Feb. 6, 2009, no pet.) (mem. op.) (applying Rule 38.8(a)(3)).

II. Background

The facts of the case are complex. In short, appellant HSBC Bank USA, N.A. alleges that it acquired a note and deed of trust relating to a certain piece of real property and that appellees claimed an interest in the same property when HSBC took steps to foreclose on the property. Because appellees relied in part on a default judgment to establish their title, HSBC filed this bill of review to set aside that default judgment.

[770]*770A. The underlying default judgment

Except as noted, the following facts are drawn from HSBC’s live bill-of-review pleading, which was verified, and its responses to appellees’ pleas to the jurisdiction. The default judgment under attack was rendered in a case styled Jeanie Watson and Tony Watson v. First Source Real Estate Services & Property Management, Inc. and Tim Torlincasi dba Supreme Lending. That case arose after the Wat-sons acquired a parcel of real property at 212 Castle Hill Drive in Burleson, Texas (the property) from underlying defendant First Source in July 2004. The Watsons borrowed the purchase money from Field-stone Mortgage, which was the grantee in two deeds of trust on the property. In early 2005, the Watsons sued First Source and Tim Torlincasi in the underlying suit. The final judgment in that suit indicates that the Watsons sued First Source and Torlincasi for statutory fraud, violations of the Texas Deceptive Trade Practices Act, and declaratory judgment. Fieldstone was neither sued nor notified of the suit.

On July 1, 2005, the trial judge signed a default judgment that both awarded damages to the Watsons and voided their purchase of the property. The judgment voided all real estate closing documents relating to the Watsons’ acquisition of the property, including First Source’s warranty deed with vendor’s lien and Fieldstone’s two deeds of trust. Fieldstone, which had not been sued, did not file a motion for new trial or appeal from the default judgment. According to appellees, the default judgment had the effect of re-vesting the property in First Source, free and clear of the liens addressed by the default judgment.

B. The competing claims to the property

HSBC further alleged the following facts in its verified bill of review. The Watsons executed on the default judgment against First Source, resulting in a constable’s sale of the property in August 2006. An entity called Burleson Old Town, L.L.C. purportedly acquired an interest in the property at the constable’s sale. Burleson Old Town conveyed its interest to Matthew and Tobyn Ribitzki in August 2007, but they conveyed that interest back to Burleson Old Town only a few weeks later. Then Burleson Old Town conveyed its interest to Aiken & Ribitzki Investments, L.L.C., which conveyed the interest to appellee Aiken in January 2008.

Meanwhile, HSBC alleged, it acquired the Watsons-Fieldstone note and deed of trust relating to the property in June 2007 by an assignment by Mortgage Electronic Registration Systems, Inc. as nominee for the lender and its successors and assigns. According to Aiken, HSBC took steps towards conducting a nonjudicial foreclosure sale of the property, causing Burleson Old Town to sue HSBC in Johnson County. Aiken asserts that he was later substituted for Burleson Old Town in that litigation.

C.Procedural history of this case

HSBC, now ostensibly standing in the shoes of Fieldstone, filed this bill of review against the Watsons in April 2009. The Watsons answered. Aiken filed a petition in intervention in which he alleged that he and HSBC were already engaged in litigation in Johnson County over the issue of whether Aiken was a bona fide purchaser of the property.

Aiken then filed a plea to the jurisdiction in which he asserted that HSBC lacked standing to bring a bill of review. He also filed a motion to abate in which he argued that abatement was required because HSBC had not joined all necessary parties. Aiken asked the trial judge to abate the case and to dismiss it if HSBC [771]*771did not join all necessary parties within seven days. A few months later, the Wat-sons filed a plea to the jurisdiction that was similar to Aiken’s. HSBC filed separate responses, with evidence attached, to the two jurisdictional pleas. HSBC also filed a response to Aiken’s motion to abate. Aiken filed a reply with objections to HSBC’s evidence, and HSBC filed a supplemental response to both jurisdictional pleas.

According to the district clerk’s computer-generated “case summary” contained in the clerk’s record, Aiken’s plea to the jurisdiction and his motion to abate were set for hearing at the same time. The court conducted a nonevidentiary hearing that was devoted mostly to the question of jurisdiction, but the motion to abate was discussed briefly. The Watsons and Aiken then filed post-hearing letter briefs reiterating that the suit should be dismissed for lack of subject-matter jurisdiction and standing. Aiken also filed a supplemental reply with additional objections to HSBC’s evidence. HSBC filed a supplemental response to the pleas to the jurisdiction.

On May 5, 2010, the trial judge signed an order entitled “Order Denying Bill of Review.” Therein, the judge recited, “The Court, having read the pleadings and hearing argument of counsel, finds that the elements for Bill of Review have not been satisfied. Therefore, it is ORDERED, ADJUDGED and DECREED that the Bill of Review is hereby DENIED. All relief herein requested and not expressly granted is hereby DENIED.” HSBC timely requested findings of fact and conclusions of law, filed a notice of past due findings of fact and conclusions of law, and timely filed a notice of appeal. On June 28, 2010, the trial judge signed findings of fact and conclusions of law in which his final conclusion of law was, “The pleas to the jurisdiction filed by the Watsons and Aiken are sustained and the bill of review proceeding is dismissed.”

III. Analysis

A. The nature of the trial court’s judgment

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Cite This Page — Counsel Stack

Bluebook (online)
377 S.W.3d 766, 2012 Tex. App. LEXIS 4811, 2012 WL 2217037, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hsbc-bank-usa-na-v-watson-texapp-2012.