Michael W. Schuetz and Jamie K. Schuetz v. Source One Mortgage Services Corporation Mortgage Electronic Registration Systems, Inc. Citimortgage, Inc. Barrett Daffin Frappier Turner & Engle Robert Ferguson, and Barbara Ferguson

CourtCourt of Appeals of Texas
DecidedSeptember 1, 2016
Docket03-15-00522-CV
StatusPublished

This text of Michael W. Schuetz and Jamie K. Schuetz v. Source One Mortgage Services Corporation Mortgage Electronic Registration Systems, Inc. Citimortgage, Inc. Barrett Daffin Frappier Turner & Engle Robert Ferguson, and Barbara Ferguson (Michael W. Schuetz and Jamie K. Schuetz v. Source One Mortgage Services Corporation Mortgage Electronic Registration Systems, Inc. Citimortgage, Inc. Barrett Daffin Frappier Turner & Engle Robert Ferguson, and Barbara Ferguson) 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.

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Michael W. Schuetz and Jamie K. Schuetz v. Source One Mortgage Services Corporation Mortgage Electronic Registration Systems, Inc. Citimortgage, Inc. Barrett Daffin Frappier Turner & Engle Robert Ferguson, and Barbara Ferguson, (Tex. Ct. App. 2016).

Opinion

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-15-00522-CV

Michael W. Schuetz and Jamie K. Schuetz, Appellants

v.

Source One Mortgage Services Corporation; Mortgage Electronic Registration Systems, Inc.; CitiMortgage, Inc.; Barrett Daffin Frappier Turner & Engle; Robert Ferguson, and Barbara Ferguson, Appellees

FROM THE DISTRICT COURT OF COMAL COUNTY, 274TH JUDICIAL DISTRICT NO. C2013-1445C, HONORABLE DIB WALDRIP, JUDGE PRESIDING

MEMORANDUM OPINION

Michael and Jamie Schuetz filed suit against appellees, Source One Mortgage

Services Corporation, Mortgage Electronic Registration Systems, Inc. (MERS), CitiMortgage, Inc.,

Barrett Daffin Frappier Turner & Engle (Barrett Daffin), and Robert and Barbara Ferguson, asserting

a variety of claims arising from the nonjudicial foreclosure of residential property. The Schuetzes

appeal from a final summary judgment granted in favor of the appellees. For the reasons that follow,

we will affirm the trial court’s final order and judgment.

BACKGROUND

The Schuetzes purchased residential property located in Comal County in July 1998.

To finance the purchase, they signed a promissory note (the Note) payable to the lender, First

Guaranty Financial Corporation. Concurrently with their signing of the Note, the Schuetzes signed a deed of trust that secured performance of the Note with the property. The deed of trust states that

“the covenants and agreements of this Security Instrument shall bind and benefit the successors and

assigns of Lender and Borrower.” That same day, First Guaranty assigned its interests in the Note

and in the deed of trust to Source One, and the Schuetzes acknowledged the assignment of the

mortgage servicing rights to Source One. Following a series of subsequent assignments, in 2009

CitiMortgage acquired all rights under the deed of trust.

The Schuetzes defaulted on the Note three times between 2002 and 2011, and were

provided loan modifications on each occasion. The Schuetzes defaulted a fourth time on the Note

in December 2011. In July 2012, CitiMortgage entered into a payment forbearance plan with the

Schuetzes, but the Schuetzes failed to make the required payments. In May 2013, Barrett Daffin,

acting as CitiMortgage’s attorneys, sent the Schuetzes a notice of acceleration and a notice of

substitute trustee’s sale. The Schuetzes did not pay the outstanding debt, and CitiMortgage foreclosed

on the property in June 2013. The property was purchased by the Fergusons.

The Schuetzes filed suit against CitiMortgage, MERS, Source Once, Barrett Daffin,

and the Fergusons. With respect to CitiMortgage, MERS, and the Fergusons, the Schuetzes

claimed that the foreclosure sale was void and that the substitute trustee’s deed should be set aside

because (1) CitiMortgage did not have the authority to initiate the foreclosure proceedings, and

(2) CitiMortgage failed to comply with a HUD regulation requiring that lenders have a face-to-face

meeting with borrowers at least 30 days prior to foreclosure. See 24 C.F.R. § 203.604(b), (c).

With respect to Barrett Daffin, the Schuetzes claimed that the firm’s attorneys violated the Texas

Deceptive Trade Practices Act (DTPA), see Tex. Bus. & Com. Code § 17.50, the Finance Code,

2 see Tex. Fin. Code §§ 392.301, .304 (prohibited debt-collection methods), and section 12.002 of the

Texas Civil Practice and Remedies Code, see Tex. Civ. Prac. & Rem. Code § 12.002 (liability

related to fraudulent court record or lien).

The Fergusons moved for summary judgment on grounds that there was no evidence

to support any of the claims against them. Subsequently, CitiMortgage and MERS, collectively,

filed a traditional motion for summary judgment and a no-evidence motion for summary judgment

on the Schuetzes’ claims. Finally, Barrett Daffin moved for summary judgment, citing both traditional

and no-evidence grounds. After the Schuetzes filed responses to the various motions, the trial court

granted the appellees’ respective motions for summary judgment, without specifying the grounds

upon which it was relying, and rendered final judgment that the Schuetzes take nothing on their

claims. The Schuetzes filed a motion for new trial, which was overruled by operation of law. This

appeal followed. In six issues, the Schuetzes challenge the trial court’s summary judgment in favor

of CitiMortgage, MERS, and Barrett Daffin.1

STANDARD OF REVIEW

We review the trial court’s rulings on motions for summary judgment de novo.

Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). A party seeking summary

judgment may combine in a single motion a request for summary judgment under the no-evidence

standard with a request under the traditional summary-judgment standard. Binur v. Jacobo, 135

1 The Schuetzes filed a motion for partial summary judgment on its claim that CitiMortgage failed to conduct a face-to-face meeting prior to foreclosure, see 24 C.F.R. § 203.604(b), (c), and the trial court denied the motion. On appeal, the Schuetzes do not challenge the denial of their motion for partial summary judgment. The Schuetzes also do not challenge the trial court’s grant of summary judgment in favor of the Fergusons.

3 S.W.3d 646, 650 (Tex. 2004). When a party files both a traditional and no-evidence motion for

summary judgment and the order does not specify which motion was granted, we typically first

review the propriety of the summary judgment under the no-evidence standard. Merriman v. XTO

Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013). If we determine that the no-evidence summary

judgment was properly granted, we do not reach arguments under the traditional motion for summary

judgment. Id. However, in the interest of efficiency, we may review a summary judgment under the

traditional standard of Rule 166a(c) first, if the application of that standard would be dispositive.

Melendez v. Citimortgage, Inc., No. 03-14-00029-CV, 2015 WL 5781103, at *3 (Tex. App.—Austin

Oct. 2, 2015, pet. denied) (mem. op.); see also Tex. R. App. P. 47.1.

A no-evidence summary judgment is properly granted when “(a) there is a complete

absence of evidence of a vital fact, (b) the court is barred by rules of law or evidence from giving

weight to the only evidence offered to prove a vital fact, (c) the evidence offered to prove a vital fact

is no more than a mere scintilla, or (d) the evidence conclusively establishes the opposite of the vital

fact.” Merriman, 407 S.W.3d at 248 (quoting King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751

(Tex. 2003)). “Thus, a no-evidence summary judgment is improperly granted if the nonmovant

brings forth more than a scintilla of probative evidence to raise a genuine issue of material fact.”

King Ranch, 118 S.W.3d at 751. “More than a scintilla of evidence exists where the evidence,

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Michael W. Schuetz and Jamie K. Schuetz v. Source One Mortgage Services Corporation Mortgage Electronic Registration Systems, Inc. Citimortgage, Inc. Barrett Daffin Frappier Turner & Engle Robert Ferguson, and Barbara Ferguson, Counsel Stack Legal Research, https://law.counselstack.com/opinion/michael-w-schuetz-and-jamie-k-schuetz-v-source-one-mortgage-services-texapp-2016.