DEBTOR-CREDITOR LAW

SPRING 2008

Hutson v. Tri-County Properties, LLC, 240 S.W.3d 484 (Tex. App.—Fort Worth 2007)

Homestead: The definition of “residence homestead” in Texas Tax Code § 34.21 (incorporating the definition given in § 11.13 (j)(1)) and the applicable redemption period may be applied independently from the definition of “homestead” in Tex. Const., §§ 50 and 51 (and the applicable redemption period for that definition), given the different contexts of forced sales governed by each provision.

Robinson v. Saxon Mortgage Services, Inc., 240 S.W.3d 311 (Tex. App.—Austin 2007)

Homestead Protection: Tex. Const. art. XI, § 50(a) sets out detailed provisions related to the homestead protection and the types of debt that may give rise to a forced sale of the homestead, including home equity loans and reverse mortgages, but it does not provide any specifics related to refinancing loans. In this case, the creditor had established as a matter of law that the original purchase money lien had been subsequently refinanced, with the original loan being paid off and the new extension of credit being secured by a deed of trust. The court held, applying contract rules of interpretation, that the failure of the deed of trust to in reference the renewal or describe the refinanced debts would not defeat the validity of the refinancing as against the homestead when the note and the loan application referenced clearly the refinanced debt.

McCoy v. Rogers, 240 S.W.3d 267 (Tex. App.—Houston [1^st Dist] 2007)

Agreed Judgment—Notice: A party entering into an agreed judgment that provided that the judgment creditor could pursue execution and any other collection remedies, even though such remedies were contingent on certain further acts of the judgment debtor, waived the Tex. R. Civ. Pro. 647 required notice to the judgment debtor or debtor’s counsel of an execution sale, once the judgment debtor performed the further acts.

Buckeye Retirement Co. v. Bank of America, 239 S.W.3d 394 (Tex. App.—Dallas 2007)

Recovery of Cots: Under Tex. R. Civ. Pro. 677, when a garnishee controverted the petition of the garnishing party and the garnishee was discharged on the writ, the garnishee may recover its costs from the garnishing party pursuant to the language “where the answer is contested, the costs shall abide the issue of such contest.”

Meador v. EMC Mortgage Corp., 236 S.W.3d 451 (Tex. App.—Amarillo 2007)

Homestead Refinancing v. Unsecured Debt: When a borrower refinanced debt on a homestead and at the time of the refinancing the borrower also took an unsecured loan from the same creditor that was refinancing the debt on the homestead, Tex. Const. § 50(e), which specifies the necessary documentation, in speaking of the “refinance of debt secured by a homestead and . . . that includes the advance of additional funds” referred only to the refinanced secured debt and not to the contemporaneous extension of unsecured debt.

Zieman v. TX. Arlington Oaks Apartments, 233 S.W.3d 548 (Tex. App.—Dallas 2007)

Execution Seizure and Sale: Tex. Civ. Prac. & Rem. Code § 34.022 provided for recovery from a judgment creditor in the event of an execution seizure and sale if the underlying judgment was reversed or set aside. The Court opined that the right of the claimant under this provision turned on the matter of whether the judgment was set aside on a bill of review and did not turn on the underlying merits on the cause of action on which judgment was taken. Furthermore, even if the grant of the bill of review had been appealed, absent a supersedeas bond, the judgment was regarded as final for the purposes of § 34.022 and therefore, the sale by the judgment creditor supported a recovery under the wrongful execution section.