SRMOF II 2012-1 Trust, U.S. Bank Trust National Association, Not in Its Individual Capacity but Solely as Trustee v. Kevin Alaimo

CourtCourt of Appeals of Texas
DecidedAugust 22, 2019
Docket02-18-00336-CV
StatusPublished

This text of SRMOF II 2012-1 Trust, U.S. Bank Trust National Association, Not in Its Individual Capacity but Solely as Trustee v. Kevin Alaimo (SRMOF II 2012-1 Trust, U.S. Bank Trust National Association, Not in Its Individual Capacity but Solely as Trustee v. Kevin Alaimo) 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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SRMOF II 2012-1 Trust, U.S. Bank Trust National Association, Not in Its Individual Capacity but Solely as Trustee v. Kevin Alaimo, (Tex. Ct. App. 2019).

Opinion

In the Court of Appeals Second Appellate District of Texas at Fort Worth ___________________________ No. 02-18-00336-CV ___________________________

SRMOF II 2012-1 TRUST, U.S. BANK TRUST NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY BUT SOLELY AS TRUSTEE, Appellant/Cross-Appellee

V.

KEVIN ALAIMO, Appellee/Cross-Appellant

On Appeal from the 158th District Court Denton County, Texas Trial Court No. 15-04164-158

Before Sudderth, C.J.; Gabriel and Womack, JJ. Memorandum Opinion by Justice Gabriel MEMORANDUM OPINION

In October 2014, Kevin Alaimo filed a suit to quiet title to a residence in

Aubrey, Texas. On December 15, 2014, he obtained a final default judgment

declaring him to be the fee owner of the residence. Claiming that the default

judgment was void, SRMOF II 2012-1 Trust, U.S. Bank Trust National Association,

not in its Individual Capacity but Solely as Trustee (U.S. Bank) subsequently filed an

amended petition for bill of review seeking to set aside that default judgment. The

trial court granted the amended petition and set aside the default judgment.

The parties then proceeded to adjudicate the merits of Alaimo’s quiet-title suit.

Alaimo moved for summary judgment. The trial court granted the motion and signed

a final judgment on August 2, 2018, that declared Alaimo to be the fee owner of the

residence. Both Alaimo and U.S. Bank have appealed.

Alaimo’s appeal raises two issues challenging the trial court’s order granting

U.S. Bank’s amended petition for bill of review. U.S. Bank’s appeal presents three

issues challenging the trial court’s subsequent order granting Alaimo’s motion for

summary judgment. We conclude the trial court abused its discretion by granting U.S.

Bank’s amended petition for bill of review. Therefore, we reverse that order, vacate

the trial court’s August 2, 2018 final judgment, and render judgment reinstating the

December 15, 2014 default judgment.

2 I. BACKGROUND1

In early 2008, James Fann borrowed $121,539 to purchase a residence in

Aubrey, Texas. To secure that debt, he executed a deed of trust that ultimately was

assigned to U.S. Bank. Fann was also subject to a homeowner’s-association

agreement that gave the association a lien on the residence to secure his obligations

under that agreement. The lien created under the homeowner’s-association

agreement was subordinate to the deed of trust. Fann eventually defaulted on his

obligations under the homeowner’s-association agreement, the association foreclosed

on its lien, and Mark DiSanti purchased the residence for $2,300 at the November 3,

2009 foreclosure sale.

On September 14, 2011, DiSanti conveyed the residence to the Bradford 790

Land Trust (Bradford). After that conveyance, U.S. Bank filed a notice stating its

intent to foreclose on its lien under the deed of trust. In response, Bradford filed a

quiet-title suit, seeking a declaration that U.S. Bank’s deed of trust was unenforceable

because its power of sale was barred by limitations. On January 6, 2014, the district

1 This case has a complex procedural history, which includes two previous appeals and one mandamus proceeding in this court, as well as one mandamus proceeding in the supreme court. See Alaimo v. U.S. Bank Tr. Nat’l Ass’n, 551 S.W.3d 212, 213 (Tex. App.—Fort Worth 2017, no pet.); In re Alaimo, No. 02-15-00321-CV, 2015 WL 7019874, at *1 (Tex. App.—Fort Worth Nov. 12, 2015, orig. proceeding [mand. denied]) (mem. op.); Alaimo v. SRMOF II 2012-1 Tr., No. 02-15-00217-CV, 2015 WL 4776097, at *1 (Tex. App.—Fort Worth Aug. 13, 2015, no pet.) (mem. op.). We omit the details of this procedural history from our discussion except to the extent they are necessary to our analysis of the issues raised in this appeal. See Tex. R. App. P. 47.1.

3 court signed a default judgment finding that U.S. Bank had been duly served but had

failed to answer and rendering judgment in Bradford’s favor.

In its default judgment, the trial court decreed that Bradford owned the

residence and that U.S. Bank held no ownership interest in the residence, and it

permanently enjoined U.S. Bank from enforcing the power of sale in its deed of trust.

On February 21, 2014, Bradford conveyed the residence to Alaimo. A few months

later, U.S. Bank filed and, on July 25, 2014, obtained, a bill of review declaring the

district court’s January 6, 2014 default judgment void and of no effect.

On October 23, 2014, Alaimo initiated trial court cause number 14-08565-158,

a quiet-title suit alleging that since the time he had acquired the residence, U.S. Bank

had attacked the January 6, 2014 default judgment that was in his chain of title and

had attempted to reassert an ownership interest in the residence. Alaimo alleged that

he was a bona fide purchaser of the residence, and he sought a declaration that as

such, he owned the residence free of any encumbrances claimed by U.S. Bank. On

December 15, 2014, the trial court signed a default judgment finding that U.S. Bank

had been duly served but had failed to answer. The trial court rendered judgment

declaring that Alaimo was a bona fide purchaser of the residence and owned it free of

any liens or encumbrances that arose prior to the time he had purchased it from

Bradford.

4 Presumably unaware of the trial court’s December 15, 2014 default judgment,

U.S. Bank foreclosed on its deed of trust and purchased the residence for $219,661.15

at the foreclosure sale in April 2015.

On May 18, 2015, U.S. Bank initiated this bill-of-review proceeding, docketed

as trial court cause number 15-04164-158, seeking to set aside the December 15, 2014

default judgment in trial court cause number 14-08565-158. U.S. Bank alleged it was

never properly served with process in trial court cause number 14-08565-158 and that

consequently, the December 15, 2014 default judgment the trial court rendered in that

cause was void. U.S. Bank amended its bill of review and set it for hearing on July 8,

2015. After conducting a hearing, the trial court granted the amended bill of review

and set aside the December 15, 2014 default judgment. This is the order Alaimo

challenges on appeal.

After the trial court set aside the December 15, 2014 default judgment, U.S.

Bank and Alaimo proceeded to litigate Alaimo’s quiet-title claims against U.S. Bank.

The parties eventually filed cross-motions for summary judgment, and the trial court

ultimately rendered a final summary judgment in Alaimo’s favor, declaring that he

owned the residence, that U.S. Bank’s deed of trust was unenforceable, and that the

April 7, 2015 foreclosure sale was void ab initio. This is the order from which U.S.

Bank appeals.

5 II. ISSUES ON APPEAL

In his appeal, Alaimo argues the trial court abused its discretion by granting

U.S. Bank’s amended petition for bill of review and setting aside the December 15,

2014 default judgment that quieted title to the residence in him. He raises two issues.

In the first, he argues that the trial court’s granting the bill of review was an abuse of

discretion because U.S. Bank failed to plead and prove the three essential elements

necessary to prevail on a bill of review. And in the second, he contends the record

does not show a defect in service of process, which was the basis of U.S. Bank’s

amended bill of review.

U.S.

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