Bryan Gaydos v. Bank of America, N.A.

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH

NO. 02-14-00221-CV

BRYAN GAYDOS APPELLANT

V.

BANK OF AMERICA, N.A. APPELLEE

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FROM THE 236TH DISTRICT COURT OF TARRANT COUNTY
TRIAL COURT NO. 236-267821-13

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MEMORANDUM OPINION 1

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Appellant Bryan Gaydos appeals the trial court’s grant of summary

judgment against him on his claims against appellee Bank of America, N.A. We

affirm.

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See Tex. R. App. P. 47.4.
 Background Facts

In January 2008, Gaydos executed a note in favor of Bank of America to

purchase real property in Fort Worth, secured by a deed of trust. Gaydos later

defaulted on his mortgage payments. In March and July 2010, Bank of

America’s attorney filed two appointments of substitute trustee. Bank of America

foreclosed on Gaydos’s property on August 3, 2010 and sold the property to

Federal National Mortgage Association (Fannie Mae).

Gaydos, Bank of America, and Fannie Mae entered into an agreement to

rescind the foreclosure so that Gaydos could cure his default and keep his home.

Gaydos executed a rescission deed and agreed that the foreclosure had been in

compliance with the property code. Gaydos remained in default, and Bank of

America again began foreclosure proceedings.

To prevent foreclosure, Gaydos sued Bank of America for (1) violations of

the Texas Debt Collection Act and the Property Code, (2) filing a fraudulent lien

instrument, (3) breach of contract, and (4) wrongful foreclosure, and (5) to quiet

title. Bank of America filed a motion for summary judgment on all of Gaydos’s

claims, which the trial court granted after a hearing. Gaydos then filed this

appeal.

Standard of Review

We review a summary judgment de novo. Travelers Ins. Co. v. Joachim,

315 S.W.3d 860, 862 (Tex. 2010). We consider the evidence presented in the

light most favorable to the nonmovant, crediting evidence favorable to the

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nonmovant if reasonable jurors could, and disregarding evidence contrary to the

nonmovant unless reasonable jurors could not. Mann Frankfort Stein & Lipp

Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). We indulge every

reasonable inference and resolve any doubts in the nonmovant’s favor.

20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008). A defendant who

conclusively negates at least one essential element of a cause of action is

entitled to summary judgment on that claim. Frost Nat’l Bank v. Fernandez,

315 S.W.3d 494, 508 (Tex. 2010); see Tex. R. Civ. P. 166a(b), (c).

Discussion

1. Bank of America’s summary judgment evidence

In part of Gaydos’s first point, he objects to an affidavit by Shalini Parker

that Bank of America attached to its motion for summary judgment. Specifically,

he complains that Parker “avers no personal knowledge,” “claims no actual

examination of a document or record, only vouching for electronic copies

maintained by B[ank of America],” and “makes no claim of custody of any of the

referenced documents by B[ank of America] on the basis of . . . having actually

examined the document itself.”

We review the trial court’s rulings concerning the admission or exclusion of

evidence for an abuse of discretion. See City of Brownsville v. Alvarado,

897 S.W.2d 750, 753 (Tex. 1995). A trial court abuses its discretion if the court

acts without reference to any guiding rules or principles, that is, if the act is

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arbitrary or unreasonable. Low v. Henry, 221 S.W.3d 609, 614 (Tex. 2007); Cire

v. Cummings, 134 S.W.3d 835, 838–39 (Tex. 2004).

Parker’s affidavit states, in part,

2. In my capacity as AVP, Operations Team Lead for Bank of
America, I have access to the book and records of Bank of America
pertaining to the mortgage at issue in this matter.

3. The documents, attached hereto . . . , are true and correct
copies of records that are kept or have been obtained by Bank of
America in the ordinary course of business. It was in the regular
course of business for an employee or representative of Bank of
America who had knowledge of the act, event, condition, or opinion
recorded, to transmit information to be included in such record. The
record was made at or near the time of the act, event, condition, or
opinion recorded or reasonably soon thereafter. The records
attached hereto are exact duplicates of the originals.

The rules of evidence do not require that the qualified witness who lays the

predicate for the admission of business records be their creator, be an employee

of the same company as the creator, or have personal knowledge of the contents

of the record—personal knowledge of the manner in which the records were kept

will suffice. See Tex. R. Evid. 803(6), 902(10); see also In re E.A.K., 192 S.W.3d

133, 142 (Tex. App.—Houston [14th Dist.] 2006, pet. denied) (explaining that

witness laying predicate for admission of a document under business-records

exception need only have knowledge of how the records were prepared). Parker

averred knowledge of the manner of Bank of America’s recordkeeping and that

an employee with knowledge of the act or event made the record; such

statements substantially comply with the business-records exception. See

Tex. R. Evid. 803(6), 902(10); Obgomo v. Am. Homes 4 Rent Properties

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Two, LLC, No. 02-14-00105-CV, 2014 WL 7204552, at *3 (Tex. App.—Fort

Worth Dec. 18, 2014, no pet. h.) (mem. op.); see also Rockwell v. Wells Fargo

Bank, N.A., No. 02-12-00100-CV, 2012 WL 4936619, at *4 (Tex. App.—Fort

Worth Oct. 18, 2012, no pet.) (mem. op.) (noting that affiant was not required to

examine original documents for purposes of making an affidavit and that it was

sufficient for affiant to aver that attached records were exact duplicates of the

originals). We therefore overrule that part of Gaydos’s first point regarding Bank

of America’s summary judgment evidence.

2. Recorded power of attorney

In the remainder of his first point, Gaydos contends that the trial court

erred by granting summary judgment because he presented sufficient evidence

on his claims to raise a fact issue on each of his claims. He premises his

argument largely on his claim that the appointments of substitute trustees were

invalid. His second point also concerns the validity of the appointments. Gaydos

claims that the appointments were not “sufficiently supported by a recorded

power of attorney.” He cites to section 489 of the former probate code (now

codified as section 751.151 of the estates code), which requires a durable power

of attorney for any real property transaction requiring an instrument to be

recorded. See Tex. Est. Code Ann. § 751.151 (West 2014).

A durable power of attorney is a written instrument that designates another

person as attorney in fact or agent, is signed by an adult principal, and contains

words that “show the principal’s intent that the authority conferred on the attorney

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in fact or agent shall be exercised notwithstanding the principal’s subsequent

disability or incapacity.” Id. § 751.002 (West 2014). We fail to see how a statute

in the probate code relating to a person’s disability or incapacitation is applicable

to a bank’s actions under the property code. See id. § 22.016 (West 2014)

(defining an incapacitated person as a minor or “an adult who, because of a

physical or mental condition, is substantially unable to: (A) provide food, clothing,

or shelter for himself or herself; (B) care for the person’s own physical health; or

(C) manage the person’s own financial affairs; or . . . must have a guardian

appointed for the person to receive funds due the person from a governmental

source”).

The property code states, “A mortgagee or mortgage servicer may make

an appointment or authorization [of a substitute trustee] by power of attorney,

corporate resolution, or other written instrument.” Tex. Prop. Code Ann.

§ 51.0075 (West 2014). The code does not require a power of attorney, much

less a durable power of attorney, to be recorded for an appointment of a

substitute trustee to be valid. See Covarrubias v. U.S. Bank, Nat’l Ass’n,

No. 3:13-CV-3002-B, 2015 WL 221083, at *4 (N.D. Tex. Jan. 15, 2015)

(“Defendants correctly assert that a power of attorney such as the one executed

between BOA and U.S. Bank need not be recorded to give effect to an

assignment or appointment affecting a real property interest.”); Green v.

JPMorgan Chase Bank, N.A., 937 F. Supp. 2d 849, 862 (N.D. Tex. 2013) (“The

Deed does not mandate that appointment of a substitute trustee be recorded.

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Likewise, the Texas Property Code contains no such requirement.”); Gillespie v.

BAC Home Loans Servicing, LP, No. 4:11-CV-388-A, 2013 WL 646383, at *6

(N.D. Tex. Feb. 21, 2013) (“The plain language of the Property Code does not

indicate the existence of any requirement that the appointment of a substitute

trustee be recorded to be valid, and courts interpreting the provisions have not

found such a requirement.”). The deed of trust in this case also allows for the

appointment of a substitute trustee “without the necessity of any formality other

than a designation by Lender in writing.” Thus, we overrule Appellant’s points to

the extent they are premised on invalid appointments.

3. Bank of America’s status as a mortgagee

In part of his first point, Gaydos argues that Bank of America “had no more

arguable relationship to the Loan” after “a merger of record title via the Trustee’s

Deed.” We interpret his argument to be that the rescission of the substitute

trustee’s foreclosure sale to Fannie Mae was ineffective. Gaydos relies on

Bonilla v. Roberson, 918 S.W.2d 17, 21 (Tex. App.—Corpus Christi 1996, no

writ), for his contention that a trustee cannot rescind a sale. However, in Bonilla,

the substitute trustee attempted to rescind the foreclosure sale without the

debtor’s knowledge or consent. Id. at 20. In this case, Gaydos, Bank of

America, and Fannie Mae all agreed to rescind the sale. Cf. Lopez v.

Countrywide Mortg., No. CIV. A. C-06-116, 2007 WL 2455292, at *2 (S.D. Tex.

Aug. 24, 2007) (comparing that case to Bonilla, noting that there was no

evidence that Lopez “agreed, or was even aware, of the rescission putting title

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back in his name,” and citing Williams v. Countrywide Home Loans, Inc., 2007

WL 2076960, at *14 (S.D. Tex. 2007), for proposition that parties may agree to

rescind the foreclosure sale). Bonilla is therefore inapplicable to the instant case,

and we overrule the remainder of Gaydos’s points.

Conclusion

Having overruled Gaydos’s two points on appeal, we affirm the trial court’s

judgment.

/s/ Lee Gabriel

LEE GABRIEL
JUSTICE

PANEL: LIVINGSTON, C.J.; DAUPHINOT and GABRIEL, JJ.

DELIVERED: April 2, 2015

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