Jerry Hofrock v. Nationstar Mortgage, LLC Federal National Mortgage Association (Fannie Mae) And Jonathan Kantor

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-16-00114-CV

Jerry Hofrock, Appellant

v.

Nationstar Mortgage, LLC; Federal National Mortgage Association (Fannie Mae); and
Jonathan Kantor, Appellees

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 353RD JUDICIAL DISTRICT
NO. D-1-GN-15-000128, HONORABLE ORLINDA NARANJO, JUDGE PRESIDING

MEMORANDUM OPINION

Jerry Hofrock, proceeding pro se, appeals from the trial court’s final order granting

appellees’ traditional and no-evidence motion for summary judgment on Hofrock’s petition for bill

of review. Hofrock’s petition for bill of review sought to void the trial court’s “Order to Proceed

with Notice of Foreclosure Sale and Foreclosure Sale” from an expedited foreclosure proceeding in

the trial court’s cause number D-1-GN-11-001674, which proceeding was brought by appellee

Nationstar Mortgage, LLC, pursuant to Texas Rule of Civil Procedure 736. See Tex. R. Civ. P. 736

(eff. Apr. 15, 2000).1 Because we conclude that the trial court did not err when it granted summary

judgment, we affirm.

1
Unless otherwise stated, we cite and apply the version of Texas Rule of Civil Procedure
736 as it existed in 2011 in our analysis of this appeal.
 BACKGROUND2

In 2007, Hofrock signed a home-equity note and security instrument on property

located in Travis County. Hofrock defaulted under the terms of the note and security instrument, and

Nationstar, as the assignee of the deed of trust, filed an application for expedited foreclosure in 2011

pursuant to Texas Rule of Civil Procedure 736. See id. The expedited foreclosure proceeding was

assigned cause number D-1-GN-11-001674, and the trial court ultimately entered the order that is

the subject of Hofrock’s petition for bill of review—“the Order to Proceed with Notice of

Foreclosure Sale and Foreclosure Sale” (the Order to Proceed)—in August 2011. Nationstar

thereafter sold the property to appellee Federal National Mortgage Association (Fannie Mae) at

a foreclosure sale, and, after evicting Hofrock, Fannie Mae then sold the property to appellee

Jonathan Kantor.

Hofrock filed his petition for bill of review in January 2015, primarily challenging

the Order to Proceed based on his allegation that he was not properly served in the expedited

foreclosure proceeding. Appellees answered and filed a traditional and no-evidence motion for

summary judgment. They sought traditional summary judgment on multiple grounds, including that:

(i) Hofrock’s petition for bill of review was barred by res judicata; (ii) the petition for bill of review

was not proper; and (iii) Hofrock’s claims were “baseless and otherwise refuted by summary

judgment evidence.” Appellees’ summary judgment evidence included copies of pleadings from the

expedited foreclosure proceeding and several other related lawsuits.

2
Because the parties are familiar with the facts of the case and its procedural history, we do
not recite them in this opinion except as necessary to advise the parties of the Court’s decision and
the basic reasons for it. See Tex. R. App. P. 47.1, 47.4.

2
 Hofrock filed a response to appellees’ motion, urging that he met the criteria for a bill

of review. See Katy Venture, Ltd. v. Cremona Bistro Corp., 469 S.W.3d 160, 164 (Tex. 2015) (per

curiam) (describing required elements of bill of review); Caldwell v. Barnes, 154 S.W.3d 93, 96

(Tex. 2004) (per curiam) (same). He primarily argued that the Order to Proceed was void because

he was never properly served with citation pursuant to Texas Rule of Civil Procedure 99, see Tex.

R. Civ. P. 99 (addressing issuance and form of citation), and, thus, that the trial court in the

expedited foreclosure proceeding did not have jurisdiction to enter the Order to Proceed. His

summary judgment evidence included copies of pleadings from the 2011 expedited foreclosure

proceeding and copies of discovery.

Following a hearing, the trial court signed the final order granting appellees’

traditional and no-evidence motion for summary judgment without specifying the grounds for its

ruling. Hofrock filed a motion for new trial, which was overruled by operation of law. This

appeal followed.

ANALYSIS

Hofrock brings three issues challenging the trial court’s summary judgment in favor

of appellees on his petition for bill of review.3 He argues that (i) no citation was ever issued or

served on him “as required by law” in the expedited foreclosure proceeding, (ii) the trial court did

not have jurisdiction in that proceeding to issue the Order to Proceed, and (iii) the trial court in this

3
On the same day that the trial court signed its final order granting summary judgment, the
trial court also signed an order granting the motion for sanctions and request for pre-filing injunction
that was filed by appellees Nationstar and Federal National Mortgage Association (Fannie Mae).
Hofrock has not appealed from the order granting sanctions and pre-filing injunctive relief.

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case erred because “there were material facts in dispute, namely, was he ever served with citation”

in the expedited foreclosure proceeding.

Bill of Review Requirements and Standards of Review

“A bill of review is an equitable proceeding, brought by a party seeking to set aside

a prior judgment that is no longer subject to challenge by a motion for new trial or direct appeal.”

Katy Venture, 469 S.W.3d at 164. Traditionally, a bill of review requires proof of three elements:

(1) a meritorious defense to the underlying cause of action, (2) which the plaintiff was prevented

from making by the fraud, accident or wrongful act of the opposing party or official mistake,

(3) unmixed with any fault or negligence by the movant. Id.; Caldwell, 154 S.W.3d at 96. However,

a bill of review plaintiff claiming no service is relieved of the obligation to prove the first two

elements because a judgment rendered without service is constitutionally infirm. Peralta v. Heights

Med. Ctr., Inc., 485 U.S. 80, 84–85 (1988); Katy Venture, 469 S.W.3d at 164; Caldwell, 154 S.W.3d

at 96–97. We generally review a trial court’s denial of a bill of review for an abuse of discretion.

Morris v. O’Neal, 464 S.W.3d 801, 806 (Tex. App.—Houston [14th Dist.] 2015, no pet.).

This appeal, however, is from a summary judgment ruling, which we review de novo.

Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). To prevail on a

traditional summary judgment motion, the movant must demonstrate that there are no genuine issues

of material fact and that it is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c); Knott,

128 S.W.3d at 215–16. “When the trial court does not specify the grounds for its ruling,” as is the

case here, “a summary judgment must be affirmed if any of the grounds on which judgment is sought

are meritorious.” Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013) (citing State

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v. Ninety Thousand Two Hundred Thirty-Five Dollars & No Cents in U.S. Currency ($90,235),

390 S.W.3d 289, 292 (Tex. 2013)).

Service in the Expedited Foreclosure Proceeding

The focus of Hofrock’s issues is a challenge to Nationstar’s service on him in the

2011 expedited foreclosure proceeding. He contends that the Order to Proceed is void because no

citation was entered or served on him in the expedited foreclosure proceeding that complied with

Texas Rule of Civil Procedure 99, see Tex. R. Civ. P. 99, and further argues that there are material

facts in dispute as to whether he was served in the expedited foreclosure proceeding, which

precluded summary judgment in favor of appellees.

Texas Rule of Civil Procedure 736, however, addresses the procedures for obtaining

a court order to allow the foreclosure of a home equity loan and provides its own requirements for

service. See Tex. R. Civ. P. 736(2) (addressing service and form of notice), 736(7) (“The only issue

to be determined under Rule 736 shall be the right of the applicant to obtain an order to proceed with

foreclosure under the security instrument and Tex. Prop. Code § 51.002.”); see also Tex. Const. art.

XVI, § 50(a)(6) (addressing home-equity-loan exception to Texas Constitution’s protection from

forced sales of homesteads for payment of debts), 50(r) (directing Texas Supreme Court to

“promulgate rules of civil procedure for expedited foreclosure proceedings related to the foreclosure

of liens under Subsection (a)(6) of this section”); Tex. Prop. Code § 51.002 (addressing sale of real

property under contract lien). As it existed in 2011, Rule 736 required service of the application and

notice “by delivery of a copy to the party to be served by certified and first class mail addressed to

each party who, according to the records of the holder of the debt [was] obligated to pay the debt.

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Service [was] complete upon the deposit of the application and notice, enclosed in a postage prepaid

and properly addressed wrapper, in a post office or official depository under the care and custody of

the United State Postal Service.”4 See Tex. R. Civ. P. 736(2)(A) (addressing service of notice and

application). Rule 736(2)(C) also specified the required form of the notice by providing a template

and stating that notice was “sufficient if it [was] in substantially” the same form as the template. See

id. R. 736(2)(C) (providing form of notice).

Hofrock does not dispute and the record reflects that Nationstar mailed the notice and

its application for expedited foreclosure pursuant to Rule 736 to Hofrock by certified and first class

mail. The summary judgment evidence included the certificate of service in which Nationstar’s

counsel certified that a copy of the notice and application were sent via certified and regular mail to

Hofrock. See id. R. 736(2)(B) (“The certificate of service shall be prima facie evidence of the fact

of service.”). The record also conclusively establishes that Hofrock actually received the notice and

application. Among other summary judgment evidence was a letter dated August 24, 2011, that was

signed by Hofrock and addressed to and filed in the trial court on August 25, 2011. In the letter,

Hofrock identified the address of the property, referred to the expedited foreclosure proceeding by

the trial court’s cause number in the subject line of the letter, and stated in the body of the letter that

he “just received notice of this today and am responding” and “contest[ed] any Default Judgment

4
Although not relevant to this appeal, the service provision of Rule 736 as it existed in 2011
also required an additional copy of the application and notice to be sent to the respondent’s attorney
when the respondent was represented by an attorney and the applicant’s attorney had knowledge of
the attorney’s name and address. See Tex. R. Civ. P. 736(2)(A) (eff. Apr. 15, 2000). The current
version of the rule directs the clerk of the court to issue and serve citation in an expedited foreclosure
proceeding. See Tex. R. Civ. P. 736.3 (eff. Jan. 1, 2012) (addressing issuance of citation).

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in this matter.” At the time that he filed this letter, there was a motion for default judgment pending

before the trial court. Nationstar had filed the motion for default judgment on August 22, 2011, and

the certificate of service to this motion certified that a copy of the motion was sent to Hofrock. In

his letter that was filed with the trial court on August 25, 2011, Hofrock also referred to and attached

a letter dated August 8, 2011, that was signed by Hofrock and addressed to Nationstar’s counsel.

In that letter, Hofrock identified the address of the property and stated that he was “responding to

a letter demanding a response today.” As to the form of Nationstar’s notice, the summary evidence

also included a copy of the notice. Based on our review of Nationstar’s notice, we conclude that

it substantially followed the template for the form of notice provided in Rule 736. See id.

R. 736(2)(C). Thus, we conclude that Nationstar properly served Hofrock with notice of the

expedited foreclosure proceeding pursuant to Rule 736.

Further, even if we were to conclude that Hofrock was not properly served with notice

in the expedited foreclosure proceeding, we would conclude that the trial court did not err in granting

summary judgment in favor of appellees. When a party files an answer, the answer “constitute[s]

an appearance of the defendant so as to dispense with the necessity for the issuance or service of

citation upon him.” Tex. R. Civ. P. 121. Here, the record reflects that Hofrock appeared in the

expedited foreclosure proceeding by filing an answer—his letter dated August 24, 2011, signed by

him and addressed to the trial court, that referred to the expedited foreclosure proceeding by its

assigned cause number, “contest[ed] any Default Judgment in this matter,” and attached Hofrock’s

letter dated August 8, 2011, signed by him and addressed to Nationstar’s counsel—prior

to the trial court’s entry of the Order to Proceed. See Owusu v. Citibank (S. Dakota), N.A.,

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No. 05-10-00175-CV, 2011 Tex. App. LEXIS 4800, at *5–6 (Tex. App.—Dallas June 22, 2011, no

pet.) (mem. op.) (concluding that pro se letter that “bore his name, address, and signature” and

referred to parties and trial court’s cause number was properly treated as answer when filed with trial

court and, based on this conclusion, overruling appellant’s issue contending that he did not receive

service of citation). Thus, Hofrock waived any complaints about service by making an appearance

in the expedited foreclosure proceeding. See id.; see also Tex. R. Civ. P. 121; Phillips v. Dallas Cty.

Child Protective Servs. Unit, 197 S.W.3d 862, 865 (Tex. App.—Dallas 2006, pet. denied) (“[F]iling

an answer waives any complaints about service.”).

We also observe that appellees raised other independent grounds for summary

judgment in their motion, including that a petition for bill of review was not an available avenue for

Hofrock to challenge the Order to Proceed that was granted pursuant to Rule 736. Rule 736(8)(A)

provided that “[t]he granting or denial of the application [was] not an appealable order.” See Tex.

R. Civ. P. 736(8)(A).5 Rather, the rule allowed the filing of a separate suit. See id. R. 736(9) (“The

granting of an application under these rules shall be without prejudice to the right of the respondent

to seek relief at law or in equity in any court of competent jurisdiction.”); see also McLane

v. Washington Mut. Bank, No. 02-07-00460-CV, 2008 Tex. App. LEXIS 5360, at *2 (Tex.

App.—Fort Worth July 17, 2008, no pet.) (mem. op.) (per curiam) (concluding that appellant could

not circumvent prohibition of appeal in Rule 736 by challenging denial of motion for new trial

5
The current version of Rule 736 expressly precludes a challenge to an order granting an
application for expedited foreclosure by bill of review. See Tex. R. Civ. P. 736.8(c) (“An order
granting or denying the application is not subject to a motion for rehearing, new trial, bill of review,
or appeal. Any challenge to a Rule 736 order must be made in a suit filed in a separate, independent,
original proceeding in a court of competent jurisdiction.”).

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instead of order granting foreclosure application and dismissing appeal for want of jurisdiction).

This independent ground standing alone was sufficient to support the trial court’s summary judgment

ruling. Thus, we need go no further in our analysis in this appeal. See Merriman, 407 S.W.3d at 248

(requiring summary judgment to be affirmed “if any of the grounds on which judgment is sought

are meritorious”).

CONCLUSION

For these reasons, we overrule Hofrock’s issues and affirm the trial court’s final order

granting appellees’ traditional and no-evidence motion for summary judgment on Hofrock’s petition

for bill of review.

__________________________________________
Melissa Goodwin, Justice

Before Chief Justice Rose, Justices Goodwin and Bourland

Affirmed

Filed: November 22, 2016

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