Residential Credit Solutions, Inc. v. Martha Burg

ACCEPTED
01-15-00067-CV
FIRST COURT OF APPEALS
HOUSTON, TEXAS
5/1/2015 3:08:46 PM
CHRISTOPHER PRINE
CLERK
No.01-15-00067-CV

IN THE COURT OF APPEALS
FILED IN
FOR THE FIRST DISTRICT OF TEXAS1st COURT OF APPEALS
HOUSTON,TEXAS HOUSTON, TEXAS
5/1/2015 3:08:46 PM
CHRISTOPHER A. PRINE
Clerk
RESIDENTIAL CREDIT SOLUTIONS,INC.,
Appellant,

V.

MARTHA BURG,
Appellee.

Appealed from the 281St Judicial District Court
of Harris County, Texas
Trial Court Cause No. 2013-47157

APPELLANT'S BRIEF

Nathan J. Milliron
State Bar No. 24030984
HUGHES WATTERS ASKANASE,L.L.P.
Three Allen Center
333 Clay, 29th Floor
Houston, Texas 77002
(713)759-0818 (Telephone)
(713)759-6834 (Facsimile)
nmilliron(a,hwa.com (Email)

ATTORNEY FOR APPELLANT
 IDENTITY OF PARTIES AND COUNSEL

APPELLANT:

Residential Credit Solutions, Inc.

TRIAL AND APPELLATE COUNSEL FOR APPELLANT:

Nathan J. Milliron
State Bar No. 24030984
Hughes Watters Askanase, LLP
Three Allen Center
333 Clay, 29th Floor
Houston, Texas 77002
(713)759-0818 (Telephone)
(713)759-6834 (Facsimile)
nmilliron(a~hwa.com(E-mail)

APP~LL~E:

Martha Burg

TRIAL AND APPELLATE COUNSEL FOR APPELLEE:

Michael C. O'Connor
State Bar No. 15187000
O'Connor, Craig, Gould &Evans
2500 Tanglewilde, Suite 222
Houston, Texas 77063
(713)266-3311 (Telephone)
(713)953-7513 (Facsimile)
moconnor(a,ocon'norcrai~ com(E-mail)

1
 TABLE OF CONTENTS

INDEX OF AUTHORITIES...............................................................................................4

TERMS AND ABBREVIATIONS USED WITHIN APPELLANT'S BRIEF...............................6

STATEMENT OF THE CASE..................................................:.........................................7

STATEMENT REGARDING ORAL ARGUMENT ...............................................................8

ISSUE PRESENTED ........................................................................................................9

STATEMEN"I' OF FACTS.............................................................................................. 1 O

STANDARDOF REVIEW ............................................................................................. 15

SUMMARY OF ARGUMENT ........................................ ............................................ 16

ARGUMENT.............................................................................................................. 17

1. The deed of trust lien sought to be foreclosed by RCS is not void pursuant to
TEx. Clv. P1~C. &REM.C. § 16.035(d) because the original acceleration of the
loan was abandoned. The trial court erred in granting summary judgment and
holding that the deed of trust lien was void pursuant to TEx. Clv.Pic.&REM.
C. § 16.035(d)...........................................................................17

A. Foreclosure must occur within four years of acceleration.....................17

B. Acceleration can be unilaterally abandoned......................................18

C. Acceleration was abandoned.......................................................19

D. Statute of limitations was restarted upon abandonment of acceleration......22

E. RCS' counter-claim for judicial foreclosure was timely and its lien is not
void.......................................... ........................................22

PRAYER.................................................................................................................... 24

CERTIFICATE OF COMPLIANCE ................................................................................. 25

2
CERTIFICATE OF SERVICE .............................:........................................................... 25'

APPENDIx................................................................................................................. 26

A. TEx. Clv.PRAC.& RElvi:. C. § 16.035.

B. Stipulation Agreement dated July 20, 2009
(Unexecuted by Burg)

C. Stipulation Agreement dated July 20, 2009
(Executed by Burg)

D. Home Affordable Modification Trial Period Plan dated October 1, 2009
 INDEX OF AUTHORITIES
Case Law

Bogen v. U.S. Nat. Bank Assn,
CIV.A. H-13-2160, 2014 WL 5486100(S.D. Tex. Oct: 29, 2014)..................... 19

Bogen v. U.S. Nat. Bank Assn,
CIV.A. H-13-2160., 2014 WL 6892553 (S.D. Tex. Sept. 8, 2014)............... 18, 19

Clawson v. GMAC Mortgage, LLC,
3:12-CV-00212, 2013 WL 1948128 (S.D. Tex. May 9, 2013)........................... 22

Gen. Mills Restaurants, Inc. v. Texas Wings, Inc.,
12 S.W.3d 827(Tex. App. 2000)........................................................................ 15

Holy Coss Chinch ofGod in Christ v. Wolf,
44 S.W.3d 562(Tex. 200'1)....................:............................................................ 17

Holy Coss Chinch ofGod zn Christ,
44 S.W.3d, 566-567 .............................................................................:............... 18

Khan v. GBAKP~ope~ties, Inc.,
371 S.W.3d 347(Tex. App. 2012).......................................................... 17, 18, 22

Kind~^ed v. Con/Chem, Inc.,
650 S.W.2d 61 (Tex. 1983)................................................................................. 15

Lampasas v. Spying Ct~., Inc.,
988 S.W.2d 428 (Tex. App. 1999)...................................................................... 15

Leonard v. Ocwen Loan Servicing, LLC,
CIV.A. H-13-3019, 2014 WL 4161769(S.D. Tex. Aug. 19, 2014)............. 19, 22

Provident Life & Acc. Ins. Co. v. Knott,
128 S.W.3d 211 (Tex. 2003)...:................................:.......................................... 15

San Antonio Real Estate Bldg. &Loan Assn v. Stewart,
94 Tex. 441,61 S.W. 386(1901)........................................................................ 18
Statutes

TEX. CIV.PRAC.& REM. CODE ANN. § 16.035(a)..........:............................ 13, 18,22
Rules

Tex. R. Civ. P. 736............................................................................................ 11, 13

5
TERMS AND ABBREVIATIONS USED WITHIN APPELLANT'S BRIEF

Appellant Residential Credit Solutions, Inc.

Appellee Martha Burg

Burg Martha Burg

CR Clerk's Record.

RCS Residential Credit Solutions, Inc.

Saxon Saxon Mortgage Services, Inc.

C
 STATEMENT OF THE CASE

Appellee Burg brought suit challenging Appellant RCS' right to foreclose on

real property located in Harris County, Texas[CR 4-5, 25-27].

Following hearing, the court entered a final summary judgment in favor of

Burg on September 12, 2014 [CR 155]. RCS filed its Motion for New Trial on

October 10, 2014 [CR 158-161]. The Motion for New Trial was overruled as a

matter of law on November 26, 2014. RCS timely filed its Notice of Appeal on

December 10, 2014[CR 165-166].

7
 STATEMENT REGARDING ORAL ARGUMENT

RCS suggests that this matter is appropriate for determination on the briefs

and record without oral argument. If the Court believes that oral argument would.

assist, RCS requests the opportunity to present oral argument.

~~
 ISSUE PRESENTED

I. The deed of trust lien sought to be foreclosed by RCS is not void pursuant to
TEx. C1V. PRAC. & RE1v1. CODE ANN. § 16.035(d) because the original
acceleration of the loan was abandoned. The trial court erred. in granting
summary judgment and holding that the deed of trust lien was void pursuant
to TEX. CIV.PRAC.&REM.CODE ANN. § 16.035(d).

9
 STATEMENT OF FACTS

On March 30, 2007, Burg signed a Texas Home Equity Adjustable Rate

Note in .the original principal amount of $270,000.00 (the "Note"), bearing interest

at the initial rate of 7.600% per annum [CR 99-103]. The Note was originally

payable to Dallas Home Loans, Inc.[CR-99-103].

In connection with the Note, Burg signed a Texas Home Equity Security

Instrument("Security Agreement")covering real property described as:

LOT EIGHT (8), IN BLOCK EIGHTEEN (18), OF REPEAT
LETTERED "F" OF MEYERLAND, SECTION EIGHT (8), AN
ADDITION IN'HARRIS COUNTY, TEXAS, ACCORDING TO
THE MAP OR PLAT THEREOF,.RECORDED IN VOLUME 67,
PAGE 68, OF THE MAP RECORDS OF HARRIS COUNTY,
TEXAS. [CR 110-133]

The property is more commonly known as 5330 Dumfries Drive, Houston,

Texas 77096 (the "Property") [CR 110-133]. The Property was pledged as

collateral for payment of the Note. The Security Agreement was recorded under

Clerk's File No. 20070256175 of the real property records of Harris County, Texas

[CR 110-133].

The Note and Security Agreement were transferred to RCS. RCS is the

current holder of the Note and is entitled to enforce the terms of the Note and

Security Agreement.

Burg became delinquent in the payment of the Note by failing and refusing

to pay the installment due on June 1, 2008 and all installments due after that date

10
[CR 97]. Pursuant to the Note and Security Agreement, Burg agreed to be liable

for the debt, interest on the debt, and all costs, fees, advances, and expenses,

including attorneys' fees, authorized under the terms of the Note and the Security

Agreement[CR 99-103; 110-133].

On June 23, 2008, Saxon Mortgage Services, Inc., the prior mortgage

servicer for the Note, caused a Notice of Default and Intent to Accelerate to be

mailed to Burg. Burg did not cure her default.

On August 12, 2008, Saxon caused a Notice of Acceleration of Texas Non-

Recourse Home Equity Loan to be mailed to Burg. Burg did not pay the

accelerated loan balance.

On September 9, 2008, Saxon filed its Application for Expedited

Foreclosure Proceeding Pursuant to Tex. R. Civ. P. 736 in cause number 2008-

54797 styled In ~e O~de~°fog Fo~eclosu~e Concerning Martha A. Bing and 5330

Dumfries Dive, Houston, Texas 77096, in the 190th Judicial District Court of

Harris County, Texas (the "First Foreclosure Action"). The First Foreclosure

Action was ultimately dismissed for want of prosecution because the parties

announced settlement.

In July 2009, Saxon sent Burg two proposed Stipulation Agreements (dated

July 30, 2009) [CR 68-70; 71-73]. Burg does not acknowledge signing both

Stipulation Agreements, but she does not dispute that she received both, after

discussions with Saxon's representative(CR 39). Further, Burg admits that, "... I
11
signed and sent to Ms. Bell this second Stipulation Agreement, but I never made

the initial payment or any other payment, provided for in this Stipulation

agreement"[CR 39].

Burg would have the court believe that the .Stipulation Agreement never

went into effect because she did not snake any payments; however, Burg neglects

to address the fact that both Stipulation Agreements -sent to and admittedly

received by her -show an unpaid principal balance of approximately $266,000.00

and only show a defaulted amount of approximately $39,000.00 [CR 68-70; 71-

73].1 These Stipulation Agreements provide unequivocal evidence that Saxon

Mortgage Services, Inc. was not seeking the accelerated loan balance and instead

had abandoned the August 12, 2008 acceleration. The Stipulation Agreements

easily put Burg on notice that Saxon Mortgage Services, Inc. was not seeking to

collect the full balance ofthe Note.

Later, on September 30, 2009, Burg executed a Home Affordable

Modification Trial Period Plan and agreed to make monthly trial period plan

payments of $1,747.03 in October 2009, November 200.9, and December 2009[CR

137-140].

1 The copies of the Stipulation Agreements in the record, at CR 68-70, CR 71-73, and CR 134-
136 are of poor quality and the exact figures .cannot be discerned from the face of these
documents.
12
 On October 19, 2009, Burg made one payment toward the Holne Affordable

Modification Trial Period Plan [CR 97]. RCS accepted the October 19, 2009

payment[CR 97]. No further payments have been made [CR 97].

On February 19, 2013, RCS mailed a Notice of Default and Intent to

Accelerate letter to Burg [CR 141-143]. Again, Burg did. not cure her default[CR

97].

On April 26, 2013, RCS caused a Notice of Acceleration of Texas Non-

Recourse Home Equity Loan to be mailed to Burg [CR 144-145]. Again, Burg did

not pay the accelerated loan balance[CR 97-98].

On May 10, 20:13, RCS filed its Application for Expedited Foreclosure

Proceeding Pursuant to Tex. R. Civ. P. 736 in cause number 2013-28135 styled In

~e O~de~ fog ForeclosuNe Concerning Martha A. Bugg and 5330 Dumfries Dive,

Houston, Texas 77096, in the 281St Judicial District Court of Harris County, Texas

(the "Second Foreclosure Action")[CR 4; 25]. The Second Foreclosure Action

was dismissed on September 10, 2013, following the filing ofthis lawsuit.

On August 12, 2013, Burg filed this suit against RCS[CR 4-5]. Burg sought

only a declaration that RCS' deed of trust lien on the Property, and thus its power

of sale, are void pursuant to the limitations period contained in [TEx. CIV. PxAC.&

REM. CODE ANrr. § 16.035(d)][CR 4-5, 25-27].

RCS answered and filed acounter-claim seeking judicial foreclosure of the

Property[CR 7-14].
13
 Burg filed her Traditional and No Evidence Motion for Summary Judgment

on July 11, 2014[CR 32-86]. RCS filed its Response to Burg's Traditional and No

Evidence Motion for Summary Judgment on July 25, 2014 [CR 90-145].. Burg

filed a Reply on July 28, 2014 [CR 146-154]. The Traditional and No Evidence

Motion for Summary Judgment was set for hearing on August 1, 2014[CR 87-88].

Following hearing, the court entered a final summary judgment in favor of

Burg on September 12, 2014 [CR 155]. The court's judgment stated that, "the

lien[] sought to be foreclosed by [RCS] [is] void pursuant to [TEx. Clv. Pic. &

REM. CODE ANN. § 16.035(d)]"[CR 155].

RCS filed its Motion for New Trial on October 10, 2014 [CR 158]. The

Motion for New Trial was overruled as a matter oflaw on November 26, 2014.

This appeal followed with RCS timely filing its Notice of Appeal on

December 10, 2014[CR 165].

14
 STANDARD OF REVIEW

Appellate courts review summary judgments de novo. Provident Life & Acc.

Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). When reviewing a summary

judgment, the competent summary judgment evidence, if any, favorable to the non-

movant is taken as true, and all reasonable inferences are drawn and doubts

resolved in the non-movant's favor. Id. A fact is "material" only if it affects the

outcome of the suit under governing law, and only those facts identified by the

substantive law are considered material. See Lampasas v. Spying Ct~., Inc., 988

S.W.2d 428, 433 (Tex. App. 1999)(Tex. App. — Houston [14th Dist.] 1999, no pet.);

see -also Gen. Mills Restaurants, Inc. v. Texas Wings, Inc., 12 S.W.3d 827, 832-33

(Tex. App. 2000). Even if a fact is material, it is "genuine" only if the evidence "is

such that a reasonable jury could find the fact in favor of the non-moving party.

Id. By the same token, if the evidence is not significant probative, the fact issue is

not genuine. Id.; accord Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex.

1983).

15
 SUMMARY OF THE ARGUMENT

The trial court's final summary judgment declaring that RCS' lien is void

pursuant to TEx. Clv. Pic. &REM. CODE ANN:. § 16.035(d) was improper and

demands reversal.

It is undisputed that Saxon originally accelerated the loan's maturity by

written letter dated August 12, 2008. Burg alleges that this acceleration would

have made any effort. to foreclose on her property barred by limitations after

August 12, 2012, four years after the original acceleration.

RCS' lien is not void, pursuant to the limitations period prescribed in TEx.

Clv. Pic. &RAM. CODE ANN. § 16.035(d) because the August 12, 2008

acceleration of the loan's maturity was clearly and unequivocally abandoned by the

actions of the parties.. Burg was provided with Stipulation Agreements, issued

after the loan's original August 12, 2008 acceleration advising her of the defaulted,

not the accelerated, loan balance. These Stipulation Agreements gave notice to

Burg that the accelerated loan balance was not being pursued. In addition, Burg

made a payment in October 2009 for less than the loan's matured balance. The

payment was accepted by RCS.

RCS sent-Burg a Notice of Default and Intent to Accelerate on February 19,

2013. This notice was followed up with a Notice of Acceleration of Texas Non-

Recourse Home Equity Loan on April 26,-2013. This latest acceleration restarted

the limitations period, allowing RCS to foreclose until April 26, 2017, four years
16
after the latest acceleration. Since RCS filed its counter-claim for judicial

foreclosure on October 17, 2013, it was well inside of the four year limitations

period.

ARGUMENT

I. The deed of trust lien sought to be foreclosed by RCS is not void
pursuant to Tex. Clv.PAC.& Rc~. CODE ANN.§ 16.035(d) because the
original acceleration of the loan was abandoned. The trial court erred
in granting summary.judgment and holding that the deed of trust lien
was void pursuant to TEx.C~v.Pic.&RED.CODE ANN.§ 16.035(d}.

A. Fo~eclosu~e Must Occur^ Within Four Yeas ofAccele~ation

Texas law requires that, "[a] person must bring suit for the recovery of real

property under a real property lien or the foreclosure of a real property lien not

later. than four years after the day the cause of action accrues." TEx. Clv. PRAC.&

RE1v1. CODE ANN. § 16.035(a). Further, after the expiration of the four year

limitations period, the real property lien and power of sale become void. TEx. Clv.

PRAC. & RE1v1. CODE ANly. § 16.035(d); Khan v. GBAK P~ope~ties, Inc., 371

S.W.3d 347, 353 (Tex. App. 2012).

The accrual of the cause of action occurs when the option to accelerate the

maturity of the loan has been exercised. Holy Coss Church of God in Christ v.

Wolf, 44 S.W.3d 562, 566 (Tex. 2001). While accrual is a legal question, whether

a noteholder has accelerated a loan's maturity is a fact question. Holy Coss

Church of God in Christ, 44 S.W.3d, 568. Accordingly, as long as the maturity of

the loan has been accelerated, one must seek to foreclose on a real property lien
17
within four years of the acceleration date or the property lien. and power of sale

become void.

There is no dispute that Saxon originally accelerated the maturity of Burg's

loan on August 12, 20.08 [CR 25-26, ¶5]. Burg contends that this acceleration

started the four year limitations period articulated in TEx. Clv.Pic.&REM.Co~E

Ate. § 16.035(a), requiring RCS to have initiated efforts to foreclose on the

Property by August 12, 2012 [CR 26, ¶6]. Burg also contends that RCS' deed of

trust lien on the Property is void because RCS did not foreclose or bring suit to

foreclose on the Property by August 12, 2012[CR 26, ¶6].

Burg neglects to acknowledge that the original August 12, 2008 acceleration

was abandoned and the four year.limitations period did not begin to run again until

the latest acceleration effort, on April 26, 2013.

B. Acceleration Can Be Unilaterally Abandoned

Texas courts have routinely held that parties can abandon acceleration of a

loan's maturity. .Khan, 371 S.W.3d, 356(citing San Antonio Real Estate Bldg. &

Loan Assn v. Stewart, 94 Tex. 441, 61 S.W. 386 (1901)). Acceleration can be

abandoned by the acceptance of payments. Holy Coss Chinch of God in Christ,

44 S.W.3d, 566-67(stating that a noteholder _can abandon acceleration `if the holder

continues to accept payments without exacting any remedies available to it upon

declared maturity'.). Acceleration can _also be abandoned by providing account

statements and mailing notices of intent to accelerate. Bogen v. U.S. Nat. Bank
18
Assn, CIV.A. H-13-2160, 2014 WL 6892553 (S.D. Tex. Sept. 8, 2014)(S.D. Tex.

2014, recommendation adopted in relevant part, Bogen v. U.S. Nat. Bank Assn,

CIV.A. H-13-2160, 2014 WL 5486100(S.D. Tex. Oct. 29, 2014)(citing Leonard v.

Ocwen Loan Servicing, LLC, CIV.A. H-13-3019, 2014 WL 4161769, , ~5 (S.D.

Tex. Aug. 19, 2014)).

C. Acceleration Was Abandoned

The acceleration of Burg's loan was clearly abandoned.

After Saxon originally accelerated the loan's maturity, on August 12, 2008,

and filed. the First Foreclosure Action, Saxon announced settlement and the First

Foreclosure Action was dismissed.

Saxon engaged in communications with Burg about her loan [CR 39, ~~1-2].

Burg admits that, "In July 2009, I discussed with Sarah Bell, a representative of

[Saxon], as to whether I could obtain a modification of my loan" [CR 39, ¶1].

Burg also acknowledges receiving two separate Stipulation Agreements from

Saxon, "Ms. Bell initially prepared a Stipulation Agreement dated as of July 20,

2009, but I refused to sign it because the payments, including a payment of

$42,444.95 for December 1, 2009, were much higher than I could afford"[CR 39,

¶1]. She added, "Later in July 2009, Ms. Bell sent me a different Stipulation

Agreement, which only changed the dates of the payments, I again complained to

her that I could not afford the payments"[CR 39, ¶2].

19
 While Burg contends that neither Stipulation Agreement went into effect,

either because she did not sign (the first Stipulation Agreement) or because she

never made any payment pursuant to either, both Stipulation Agreements provided

notice to Burg that Saxon. was seeking recovery. of only the defaulted loan balance

of approximately $39,000.00 [CR 39, ¶2]. The Stipulation Agreements did not

seek payment of the accelerated loan balance [CR 68-70, 71-73; 134-136, Recital

4].

Burg also admits that she executed a Home Affordable Modification Trial

Period Plan,"I signed [the Home Affordable Modification Trial Period Plan] on or

about September 30, 2009, and sent it to Saxon" [CR 40, ¶1]. She also

acknowledges that the program was not terminated until February 26, 2010, when

she received a termination letter from Saxon[CR 40, ¶1].

Importantly, Burg made one payment pursuant. to the terms of the Home

Affordable Modification Trial Period Plan [CR 40, ~l; CR 97, ¶9]. She admits

that, "I later made one payment under the [Home Affordable Modification Trial

Period Plan]"[CR 40, ¶1]. Burg's last payment was made on or about October 19,

2009[CR 40, ~l; CR 97, ¶9]. It was accepted and applied to her account [CR 97,

¶9].

Burg will argue that the Home Affordable Modification Trial Period Plan

contained a provision that no payment made would waive acceleration or

foreclosure action. The Home Affordable Modification Trial Period Plan provides:
20
 When the Lender accepts. and posts a payment during the Trial Period
it will be without prejudice to, and will not be deemed a waiver of, the
acceleration of the loan or foreclosure action and. related activities and
shall not constitute a cure of lny default under the Loan Documents
unless such payments are sufficient to completely cure my entire
default under the Loan Documents. [CR 75, ~2(e); CR 138, ¶2(e)]

Burg's reliance on this provision is misplaced. She neglects to recognize that

Saxon had already abandoned the August 12, 2006 acceleration by way of sending

her the Stipulation Agreements and malting demand for only the defaulted amount

owed of approximately $39,000.00 [CR 68-70, 71-73, 134-136, Recital 4]. The

loan was not accelerated on October 1, 2009 when the Home Affordable

Modification Trial Period Plan was prepared.

The abandonment of acceleration is further evidenced by the fact that RCS

sent Burg a Notice of Default and Intent to Accelerate letter on February 19, 2013

[CR 141-143]. Much like the Stipulation Agreements, RCS only made demand for

the total monthly payments then due, June 2008.through February 2013, for a total

of $136,457.34, plus late charges and other charges[CR 141].2

RCS, by and through its counsel, Hughes Watters Askanase, LLP, also sent

a Notice of Acceleration of Texas Non-Recourse Home Equity Loan to Burg on

April 26, 2013[CR 144-145].

2 The total amount due in the February 19, 2013 Notice of Default and Intent to Accelerate was
$146,770.14 consisting of total monthly payments due ($136,457.34), late charges ($6,255.70),
other fees ($5,339.31), less a credit for unapplied funds ($1,282.21).
21
 RCS would have had no reason for sending Burg a new Notice of Default

and. Intent to Accelerate letter and. Notice of Acceleration- of Texas Non-Recourse

Home Equity Loan unless the August 12, 2008 acceleration had been abandoned.

D. Statute ofLimitations Restated Unon Abandonment ofAccele~ation

Upon abandonment of acceleration, the note is restored to its original

condition, including the note's original maturity date. Khan, 371 S.W3d, 353;

Clawson v. GMAC Mortgage, LLC, 3:12-CV-00212, 2013 WL 1948128,, *3 (S.D.

Tex. May 9, 2013). If a noteholder abandons acceleration, the noteholder need not

foreclose within four years from the date of acceleration. Leonard, 2014 WL

4161769 at , *4(unpublished).

Because RCS abandoned its original August 12, 2008 acceleration of Burg's

Note, the four year limitations period ceased running. Limitations only began

running again on April 26, 2013 when RCS mailed Burg the latest Notice of

Acceleration of Texas Non-Recourse Hoine Equity Loan.

E. RCS' Counter-Claim fog Judicial Foreclosure Was Timely and its Lien is
ATn t Tln in7

RCS accelerated the maturity of Burg's loan on April 26, 2013 [CR 144-

145].- Pursuant to the requirements in TEx. CIV. Pic. &REM. CODE ANN.

16.035(a), RCS would need to initiate an action to foreclose on the Property no

later than four years after April 26, 2013. Put another way, RCS would have to

22
initiate an action for judicial foreclosure on or before April 26, 2017. RCS clearly

did so.

RCS filed its counter-claim for judicial foreclosure on October 17, 2013[CR

7-14]. RCS' counter-claim for judicial foreclosure was filed well before April 26,

2017 and well within the limitations period commencing at acceleration of the

loan's maturity, occuring on April 26, 2013:

Since RCS filed its counter-claim for judicial foreclosure well before the

limitations period expired, RCS' lien on the property. is valid and the trial court

erred. when it determined otherwise.

23
 PRAYER

Appellant Residential Credit Solutions, Inc. respectfully requests that this

Honorable Court reverse the trial court's final summary judgment entered on

September 12, 2014 and remand this case back to the trial court for further

proceedings. Residential Credit Solutions, Inc. additionally requests such other

and further relief, at law or in equity, to which it may be justly entitled.

Respectfully submitted,

HUGHES WATTERS ASKANASE,LLP

/s/ Nathan J. Milli~^on
Nathan J. Milliron
State Bar No. 24030984
Three Allen Center
333 Clay, 29th Floor
Houston, Texas 77002
(713)759-0818 (Telephone)
(713)759-6834 _(Facsimile)
nmilliron(a~hwa.com(E-mail)

ATTORNEY FOR APPELLANT,
RESIDENTIAL CREDIT SOLUTIONS,
INC.

24
 CERTIFICATE OF COMPLIANCE

Pursuant to Texas Rule of Appellate Procedure 9.4(1)(3), I hereby certify that
this brief contains 3,240 words (excluding the caption, table of contents, table of
authorities, signature, proof of service, certifcation, and certificate of compliance).
This is acomputer-generated document created in Microsoft Word, using 14-point
typeface for all text, except for footnotes which are in 12-point typeface. In making
this cet-tificate of compliance, I am relying on the word count provided by the
software used to prepare the document.

/s/ Nathan J. Million
Nathan J. Milliron

CERTIFICATE OF SERVICE

I hereby certify that the foregoing Appellant's Brief was forwarded. to all
parties and/or their attorneys of record, in accordance with the Texas Rules of Civil
Procedure, on this the 1st day of May 2015, addressed as follows:

Via Electronic Mail at moconno~(a~oconno~c~^ai~com
and Via Ce~tifed Mail/Return Receipt Regz~ested
Mr. Michael C. O'Connor
O'Connor, Craig, Gould &Evans
2500 Tanglewilde, Suite 222
Houston, Texas 77063

/s/ Nathan J. Million
Nathan J. Milliron

25
 No. O1-15-00067-CV

IN THE COURT OF APPEALS
FOR THE FIRST DISTRICT OF TEXAS
HOUSTON,TEXAS

RESIDENTIAL CREDIT SOLUTIONS,INC.,
Appell~jit,

V.

MARTHA BURG,
Appellee.

Appealed from the 281St Judicial District Court
of Harris County, Texas
Trial Court Cause No. 2013-47157

APPENDIX

26
§ 16.035. Lien on Real Property, TX CIV PRAM 8~ RAM ~ 16.€t35

Vernan's Texas Stattrtes acid Codes Annotated
Civil 7?raeti.ce and Remedies Cade ,~Kefs 8r ~inn.~s)
`Title 2.Trial, Jucl~ment, aYit~ A~~~ieal
Subtitle.l3.'f'.rial Matkers
(;ha~~ker 7.6.,LiYnitatians

V.T.C.A., Civil Practice &Remedies Code § 16.035

§ i6.o35. Lien on Real Properly

(.',urrentness

(a) A person must bring suit for the recovery ofreal property under a real property lien or the foreclosure of a real property lien
not later than four years after the day the cause of action accrues.

(b) A sale of real property under a power of sale in a mortgage or deed of trust that creates a real property lien must be made
not later than four years after the day the cause of action accrues,

(c) The running of the statute of limitations is not suspended against a bona fide purchaser for value, a lienholder, ar a lessee
who has no notice or knowledge of the suspension of the limitations period and who acquires an interest in the property when
a cause of action on an outstanding real property lien has accrued for more than four years, except as provided by:

(1) Sectiat7. 1.<.Ofi2, providing for suspension in the event of death; or

(2)~e..ctio...n,_I.6.,,Q~6., providing for recorded extensions of real property liens.

(d) On the expiration of the four-year limitations period, the real property lien and a power of sale to enforce the real property
lien become void.

(e)If a series of notes or obligations or a note or obligation payable in installments is secured by a real property lien, the four-
year limitations period does not begin to run until the maturity date of the last note, obligation, or installment.

(fl The limitations period under this section is not affected by Section 3.1 t R Bi~~iness & CrnYarnerce Code.

(g)In this section,"real property lien" means:

(1) a superior title retained by a vendor in a deed of conveyance or a purchase money note; or

(2) a vendor's lien, a mortgage, a deed of trust, a voluntary mechanic's lien, or a voluntary materialinan's lien on real estate;
securing a note or other written obligation,

EXH~B~T
~ ~ ~~?~~ e~ts~.,,LL~ ita~.i.,'i£.~f; ~~~;Il~~tt:a, i~Ci i.~~,tIY?"i ~.ta `7Sf~a ? €'it~i i.~.:7, ~.i7Vf~#'rk YlE 1f~ ~d~+~ 7i"K!
a
9
§.16.035. Lien an ReaC Property,"CX GIV PRAC & RANI ~ 16.035

Credits
Acts 1985, 69th Leg., ch. 959,§ 1, eff. Sept. 1, 1985. Amended by l~cts 1997.75th C,c,~, eh. 27.9. ~ 1, ef£ M~~y 23~ 1997.

Editors' votes

REVISOR'S NOTE

2002 Maiu Volume

(1)The definition of"lien debt" is addedas a drafting convenience and derives from V,.A,.C.S..._At~ticie,_552~.

(2) The revised law omits the source law material that provides for a suit to be brought within one year of the
effective date of V.11.C;.S. ~.rticle S52(:)(September 3, 1945)or within four years ofthe maturity date ofa lien debt
in effect on the effective date of the article because the period has expired.

Nc~tc;s,,~f,I~ccisions,,.~2.1.~,),

V. T. C. A., Civil Practice &Remedies Code § 16.035, TX CIV PRAC &REM § 16.035
Current through the end of the 2013 Third Called Session of the 83rd Legislature

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73
 r Inv~slor Loan ~k ; 2000 22067 1 C7C~C'~.I
N~tVi~ AF~~l~C7ABl.(~ ~€~~E~(~AT~C}N
TRIAL PERl~D P~.AN
(~t~p one of Two-Step Dacum~n~~tic~n Prac~ss).
Trial l~orind Plan ~ifactive Dato: O~taher 1, '1009
Borrovrpr (~~~~~y •: MAt~7MA A, ~UF2G

Lender("Lender"};
~ederai National Mor1.g~9e Association

pate of first lien Security lnsfrumonF("Mprtgage"} and tJoto("Note"); Apri14, 200
i.oan NumEx3r; 230621 ~J3
property Address ("Prbpeny"):
.5330 DUNIFRIE5:DR
HOUSTbN,1'X 77096

df l atn in compliancQ with lhls '~riai Period Plan (the:"Plan'') and my rQpYosantatidr~s in 5€aUon 3 continuo ko bo
in aN riiaterlef respects, thfln the.(.ender viili provides me wilh a Name.Affordable:Modittcatitin Ag~esment true
("Madiflcaifan A regiment°y, as:set forth.in Suction 3;. that v~ould amend Arid supple.meni .(1) lhs .MQrtgage,on the
i'rap~riy;. and (~~ the Note. secured icy the Mortgage, The Mort~~~e and tJnte #ggether,. as they may previously .Have
been arnendecl, are ref~rr~d to as th.e "Loari Documents:" Cap~tal~zed terms used. ~n this: Plan an8 riot ciefined.have
;he me.an(ng gluon to their in the Loam Documents.

1I I have not aire~dy done so, f am prnvitlinc~ confirmation ai the masons I cannot Afford my mi~rtgac~e payment end
dncumerlfs ka pormit. vdriflcation of a)! of my Income .{~xaapt that I understand that 1 am not req~tred to .disclose r5ny
child suppart or eiimony unless t wish to hive such income cc~nslderod) to detormina i qualify far the offer.
descriU~d In this plan (iha "gffe~'): I un~arstand that after 1 sign and return two oopleswhether
of this' Plan to the Lender, ttie
Lendor will send me ~ signed copy of this Plan If f qualify !oc the Oifer nr ~Vltl sAnd me written notice that I do noF
qu~li(Y for the QFfer. Title Plan will rat take ~ffacE unless and unfit t~otli i end the Lentler
me wrth a copy of this f'lon with the Lender's signature. sifln tt and I.~nder provides

1. Ncy Rnpr~s4nt~ttnna. t cer~Ety, reprosnnt in I.entlor and agree:
A. I ~m unablo to afford my rnortgaye p.ayrnents for the teasers indicated In. my Nardehfp Affidavit and
85 8 f05U1f_, (i) I
am either in default or believe I wll{ bQ in' dei~ult under the~.l,pan t~ocuments in the
rear tUture, and (il) i do-.not hevesuffiaient incdmo. oracaess to su.Hiclont liquid as~etu l6 make thQ
monthly n~origago payments now or in the near futuro~
. p. I live in the Properly as my princ(pal xesidence, and tl~e Proporly has not bson condornned;

'It Thera is. morn than ono Barrw~t~r ar Mortgegdr axoculind this documont, onch (a ralnrrad to ac '1'. For purpoao~ of (his document words
algnllylny iho oingulnr (sued es °!') ehttii (nctudo the plural (suoh as "tve") .and ylde versa whgr9 nppropdplo:

Fq~fE AFiIXiD.V:1fi F600eICATtO+I TRtdl FiRgP~Ut~!
ScW Fray • Fmti:.a N.ilFiedClo fdoC UN~F"OR1t 1NSTRUkENf~ iwm 8f53 SU3 irev.5l'~1
VkiP 0 ~
Wdiurt HI~nvor FinoraN F,anF:Ma Oi00W9 0]41W _(CG03}
p:;o tole

GOCf7~BI 1

~ ~~~~t~009~

137
 C, There hes been no change In ih~ ownership of the Property since I signac~ the Loan Documents;
l7, I ~m providing or already haue providc~ddocumant~tlon foralt incoma that I r4ceive (antl
understand that I am not raquiced to dlscVosa any child suppart nr alimany that i receive, unless i
wish to have such- income considered to quali{y ic~r tha Qtfer);
~, Under pen~iity of pi~rjury, aU dUCUmonts and information I _have prnvitled.fo (.ender pursuant to this
Plan, including fhe dacu.ments and fnfarmatlon regarding my ~Ilc~ibiUty for the program, are true and
cortQCi; and
~. If Lender requires me to obtAin credit counseling, i.will do so.
2. The 'Trip) Pnriod F'I~n, On or before ench of the follaa~ing due ciatas, I w(II pay the Lender tha amount set
torch t~lov~..("Trim Pariod Payment"}, which Includes p~ymeni For escrow Items, includlnc~ real os(atQ taxes,
insurance premiums and other fees, If any, otU.S. $1,7a7A3.
7da1 Period Payment.# Trial.Period Payment Due Date (Jn or Befo
1 ~ 1,?Q7.03 10i D09 ~lJ,
~ $ 1,797,03 11 12009 1-.~
3: $ 1.,7c3T.p'a 72 7.00~J
TNc 1"rlal Period f~ayment is an esUrriate of the payment that will Us required under fhe modified loan
teCms, vrhint~ will be finalized in accordance with Saclion 3 below..
During the 6riod (ihe "Trial 4'eriod") cammenc'rng on the' Trial Period Effective Qate and ending on the
earlier of: (i~fhe first ii~y o(the month foUotiving the mnntt~ In which, the last T~4al Porlad Payment is due
(ihe "Modification ~~fieotfvo D~ite") or (it) terminailon of this' plan. 1 understand oriel acknovriedge that:
A. 71ME iS OF 7hIE ESSENCE under this Plan;
6. except as set- forth. in 5eGt on Z,C, be.lo~~f, the Lender will suspend -Any scheduled foreclosure sale,
~rovldod i oontinue to meeF the abligatians under this .plan, but any pending foreclosure acllon
naC be dismissed and may bo Immed3ately resumed from the point at whieh It was sus~enciod IfwiDthis.
R{.an tecminaies,. and na now nolfce: of default, n6tira of intent 10 accelerate, notice of acceleration,
ar simiEar notice will be. necessacy to cbni{nue the (or~clasur~;acifon,..all rights to such npticAs
being hereby waived to the extent permitted by ap~liceble law;
G. If my prpparty is heated in Gocirnia, Hawaii, Missouri, or Virginia anti a foreclosure sale is currently
sehedulad, tha forecJosura said will.nQt.be suspended and the (antler may foreclose ff i have nUt
made each and:every Thai {'erlod Paynient thei Is due before thQ scheduled foreclosure sale. If a
fgreclosure s~(e .occurs pursuant to this Section 2;G., ibis agreement shall be deemed terminated;
D, 7h~ Lender will hold the p~ymerits. recalv~d durfirp the '~~iaf Period in 'a non•interest bearing accoun4
until they tnfal an amaunt`that Is. enough to pay my .oldest. da:ifnquent monthly payment on my loan
In lull., i(there.is any remaining money afior such payment Is tap}~lied, such remaining funds will be
held by the lender and not pnsied io my account until they total an amount that (s enough ko day
the n.exi oldest delinquent monthly payment in fu11;
~. When the Lender ~ccep,fs and posts a payment Buring the Trla! Period it will b~ wltttout pre)'uciicfl fa,
and ~~~III riot be deemed a'waiverof,. the acceleration of the loan or foreclosure action and related
activ{U~a .and shall not conatituie a cure of rriy dafau~t under 11~e loan DoGUment~ unless such
payments are sufficient to complataly cure rriy enllro d~fauit under iha ~.gan Documents;
F, 1t Prior to th+~ Modl(icat►on E(tvctivg polo, (i) the Under does noY provide me a fully executed copy.of
this Plan and the Mariificalibn Agree.mant; (i(} I have nfl! mHde the Trial Period payments required
under Section 2 of this Plan; or (iii).ihe Lender ~teterminas that my ropresentaiions in Seeti~n 1 are
na lanper true and correct, the i.oan pacumonts will riot b~ mnd(fied and this Plan will terminate,
ibis event, IhQ Lender will have all of the ric~hEs and remedies .provided by the Loan Documents, andM
any payment I make underihis. Plan shall be applied io.~mounts 1 owe underihe Loan Documents
and .shall not be refunded fo me; and

HOME- lipFOF7DA8lE AtWiflCAifQN •7RtAl. p&R140 PLAN
~rh FAfnBy ~ ffu~~b AFx:.'Fcetlff.0 Al:.^. U4iF0lIIA 1lSTRVY.~NT Fomt 3156 aq0 (rov. JAO)
VeW is
WdbrafUvrr Fkrr„~t 6o~y.~~G20;1J D14tOJ (09~3~
r~ zoi ~

138
 G. I undersiand that the Plan is not a rimadification of the I~aan Dooumants and ihet the i.oan
Documents wlil _not bo modified unless and until (i) 1 meal a!f of tho conditions rdquired for
modiQcatlon, ti) I rocoiva a fully executed copy of a. Modification Agroen~ent, and (IQ) tho
hAadifiaak(nn ~itaGkiv~ Qatr. has p~ss~ti, I t~~rther ~tncterstRnd and agree li~at tha I..gnclAr Dili nit bn
obligated or hound to mako any madi0cafion of the Loan Documents it 1 fail to moat any_ ono of iho
requirements under this Flan. i understand and ~groe that tho lender veil{ not.be obfic~atsd v~ bound
to make any mQdlfication o(Iha Loan pocumants or to execute the ModiRcat+on Agreement If (he
Lender has not received An ~cCeptable :liEle endorssmenk andlor subordinatio agreements
other lien holders,. as necessary, to censors that Ehe modified mortgage Loan nrotains 'its firstfrom lien
posi►ton and is fully enforceable.
3, Tho Modification, t understand thak nnce Candor is able to detecrnlne the final amounts of unpaid Intorest
and any other delinquent.amounts (oxcept iato ahargos) to be ~ddod to my loan balance and after- dedu~ling
from my loan balance any remaining money hold at thA anti of iho Trial Period under Sactlon D, ab~vo, titre
t~enderwill determine the.new payment amount, If i eamply wish the requirements in Seclinn 2,
repr~:sentations in Section 1 continue to b~ true In all mate.ria! respects; the Lender will send 2 and my
me a
Modlflcatlon Agreemont farmy signature which ~~ill modify my l.aan Doaumnnts necessary'to reAoct.this
nevi payment amount and watve any unp~{d late charges accrued is date. Upanas axaoution ofa Modification
Agreement by the Lend.orand me, thEs 1?lan shall terrninate and the Loan Dacumants, as madl8od:b. the
Moddicalion Agreeinont, shall govern the terms .l~aiweon file (.enrlar and mo Tor lf~e remaining terrn.o~the
loan.
~; Additlnnal Agreamante. I agree tp .the iollo►ving:
A. That all persons v.ho signed the Loan L7ocuments or (heir authartzed rAprasentative(s) have signed
~hls Plan, unigss a borrower or Go-bo[rowor is deceased or the Lender has waived ibis requirement
In v~r1t(ng.
~. To comp{y, oxcepl to the extent that tiioy arp rnodifiod by this PI~r7, wilh aN covenants; agreonients,
and requirements aF!_oan Rocurnonts, Including my agreement to make all payments taxes,
lnsu~ance premiums, assessmenks, ~sarow Items, impounds,_ And all other paymonis,ofthQ amount
of vlhlch may change periodically ovecfhe term of my lean.
C. Intentionally i~eleCad,.
p. That all terms end provisions of the ~nan t~oc:aments remain in full force-and effect; nothing 1n
Plan shill be understood or aortstcu~d to ba a s~Fisfacfian car ralease:in whRle or in pert of the ibis
obligations Gont~ined :in the.Loan 17ocumants. The.i:ender and!villl be bound by, and. will ,comply
with, all of file terms ~r~d provisions of the Lr~an Documents.
G: What, as of the Modifcatfan ~t{ective Date, any provis+bn in ihti Nota, as emended, for tl~a
assessment of a pen~ity (or ful{ ar pariiai prepayment of the Nate is null and.vaJd.
REi41AINCtER 0~ !'AGE INTENT10tJALLY L~~T ~I.ANK:
51Gt1D~Ti1R~ pACyE FOLLOWS,

. 11W~~ AFGOHdA➢L[ t'AOIFIGN110N •TNUll. pENlOD PlN!
5I~ti Fouuly- ~~oru~n A~ee~Fracf3~ Mi; U711f()F7A1 - Yv`S7RU},IpNT iorm 7166 3tlQ (NK 309).
V~'.A O
WoNa-~ NLxa F~~''?~3nn~cae 020aU ~ U1~70.7 {0903)
vcgo3oi~.

(~.Oevl^4loV7~ 1

139
I in Witness Whereot, the Lender and i havv executed iNis Plan.

~..~ ` .-.
MAR'PHA /1, aURG •Hotrov✓ur C1~to

(Saa1)
,8orruw.er Date

(S@~I)
-0hrroWOr Qoto

{.~A~I~
_ .borrower Qaia

~cieC~i Nalion~ NtorE e ss c' ti ;f orne = - - {Seal)
.Lender

_ _fit 4

IfOME l~FFOt{0.YN.~ tA0p7F~-iATION . ~ TflVil. P[(IIDA- plNl
S'v~•,,~ famay - Fnn,~m Moa+KmCd~n l~ta:-t1N~'t1RM" I1J5712UMEN1 Fani ~315U 1/CA Irov. 3.~1
VMP ~ . -
Wd~ Wv~vor F'mni~csl t~.ti~•a. A2Da? - D1S103 (P~3)
- Palo ~~of 1

Cf~~~»OflO~~

140