John H. Thomas, M.D. v. Graham Mortgage Corporation and Chris Norris, Substitute Trustee

408 S.W.3d 581, 2013 WL 4007513, 2013 Tex. App. LEXIS 9041
CourtCourt of Appeals of Texas
DecidedJuly 24, 2013
Docket03-11-00335-CV
StatusPublished
Cited by28 cases

This text of 408 S.W.3d 581 (John H. Thomas, M.D. v. Graham Mortgage Corporation and Chris Norris, Substitute Trustee) 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
John H. Thomas, M.D. v. Graham Mortgage Corporation and Chris Norris, Substitute Trustee, 408 S.W.3d 581, 2013 WL 4007513, 2013 Tex. App. LEXIS 9041 (Tex. Ct. App. 2013).

Opinion

ON MOTION FOR REHEARING

OPINION

SCOTT K. FIELD, Justice.

We withdraw the opinion and judgment issued on April 4, 2013, and substitute the following opinion and judgment in their place. We deny the appellees’ motion for rehearing.

The suit underlying this appeal concerns the nonjudicial foreclosure of certain ranch property located in Burnet and Llano Counties (“the Property”). Prior to the foreclosure, the Property was owned by appellant John H. Thomas, M.D. Asserting various claims, Thomas contends that the foreclosure by Graham Mortgage Corporation (“the Bank”) and Christopher Norris, substitute trustee, (collectively, “the Bank Defendants”) was wrongful because the Property is his homestead and thus exempt from forced sale. See Tex. Const, art. XVI, § 50. The Bank Defendants moved for summary judgment on all of Thomas’s claims and argued that, as a matter of law, Thomas cannot establish that the Property was his homestead when he executed a loan secured by the Property.

Thomas appeals from the trial court’s grant of summary judgment in favor of the Bank Defendants. Thomas also appeals from the trial court’s orders striking his amended motion for summary judgment, striking his motion for an appraisal, and denying his motion for continuance. We will affirm the orders striking Thomas’s amended motion and denying his motion for continuance. We will reverse the trial court’s order striking Thomas’s motion for appraisal. Consequently, we will affirm the trial court’s summary judgment in part, and we will reverse and remand in part.

BACKGROUND

On August 14, 2007, Thomas entered into a written loan agreement with the Bank, borrowing 3.4 million dollars. The loan agreement signed by Thomas included, as security on the loan, a deed of trust covering 618 acres of the Property.

A few weeks before closing on the loan, a proposed title insurance policy identified 200 acres of the Property as Thomas’s homestead. The identification was based on a homestead designation filed by Thomas in 2005, and upon learning of the problem, Thomas sent an e-mail to the Bank loan officer, Dean Castelhano, regarding the issue. In his June 2007 e-mail, Thomas stated that the title insurance policy’s homestead exception “was unexpected as the attorney with whom [he] spoke advised this could be avoided.” Thomas also proposed three options for addressing the issue: (1) a loan for $2.5 million with the Property reduced by 200 acres, (2) “proceed as planned with the [proposed loan for $3.7 million] and reduced collateral,” or (3) “no deal.” According to Castelhano, his initial reaction to the discovery of the 2005 homestead designation was not to make the loan, but he decided to proceed after Thomas argued that the Property was not his homestead. Conversely, Thomas contends that he never had any discussions with any representative from the Bank about the homestead character of the Property, aside from his June 2007 e-mail.

In any event, in closing on the loan, Thomas signed a documented entitled “Non-Homestead Affidavit and Contingent Designation of Homestead.” In this document, Thomas declared under oath:

1. “That he has never occupied the dwelling house located on the [Prop *586 erty] for residence purposes, but has instead allowed such dwelling house at all times to be utilized by a ranch foreman in his employ.”
2. “That he has no present intent to occupy such dwelling house, or any other dwelling house to be constructed on the [Property] as his residence in the future.”
3. “That he does not now claim either a business or residence homestead in the [Property] and hereby renounces and disclaims any homestead right[,] interest!,] or exemption in the property.”

Thomas also swore and acknowledged that the affidavit and contingent designation was “made to induce Graham Mortgage Corporation to fund a mortgage loan secured by a Deed of Trust on the [Property].” 1

According to the Bank, by May 2009, Thomas had defaulted on his obligations under the agreement by failing to make payments. Consequently, the Bank sought to foreclose on its security interest and eventually posted the Property for sale. However, before the foreclosure sale could be conducted, Thomas sued the Bank Defendants, claiming that he had been fraudulently induced into the loan agreement. Thomas also sought a temporary restraining order and temporary injunction to prevent the sale of the Property pending suit, both of which the trial court granted.

In July 2009, Thomas amended his petition, alleging for the first time that 200 acres of the Property had been designated and continually maintained as his homestead. Based on these new allegations, Thomas omitted his claim for fraudulent inducement and instead claimed that as a result of the Property's homestead status, the Bank Defendants had violated the Texas Constitution, home equity lending laws, and the Texas Debt Collection Act. See Tex. Const, art. XVI, § 50; Tex. Fin. Code Ann. §§ 392.001-.404 (West 2006) (debt collection act). In addition to monetary relief, Thomas sought declarations that (1) the lien held by the Bank was void, (2) the Bank had forfeited the entire note on the Property, and (3) the Bank was in violation of the Texas Debt Collection Act. See Tex. Civ. Prac. & Rem.Code Ann. §§ 37.001-37.009 (West 2008) (uniform declaratory judgment act). That same month, the Bank filed a counterclaim against Thomas for breach of contract.

In August 2009, following a hearing on the Bank Defendants’ motion to reconsider temporary injunction, the trial court dissolved the temporary injunction prohibiting foreclosure on the Property. The next month, the Bank foreclosed on its security interest in the Property. 2

*587 In December 2010, Thomas filed a motion for summary judgment on all of his claims. In February 2011, the Bank amended its counterclaim against Thomas and, after applying the proceeds from the foreclosure sale to the balance on the loan, sought to recover the remaining deficiency on the loan balance. The Bank Defendants also filed their own motion for summary judgment, seeking a declaration that the Property was not a homestead, recovery of the deficiency, attorney’s fees, and dismissal of all of Thomas’s claims. Both summary-judgment motions were set for hearing on April 21, 2012.

Ten days before the summary-judgment hearing, Thomas filed a first amended motion for summary judgment, to which the Bank Defendants filed a written objection on the ground that the amended motion was untimely. Two days before the hearing on the summary-judgment motions, Thomas filed an answer to the Bank’s counterclaim and, in the alternative, a motion for an appraisal. In response, the Bank Defendants filed a motion to strike Thomas’s motion for appraisal. One day before the hearing, Thomas filed a motion for continuance of the hearing.

On the day of the hearing, the parties appeared, and the trial court denied Thomas’s motion for continuance.

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Bluebook (online)
408 S.W.3d 581, 2013 WL 4007513, 2013 Tex. App. LEXIS 9041, Counsel Stack Legal Research, https://law.counselstack.com/opinion/john-h-thomas-md-v-graham-mortgage-corporation-and-chris-norris-texapp-2013.