Justia Texas Supreme Court Opinion Summaries

American Pearl Group, L.L.C., John Sarkissian, and Andrei Wirth (collectively, “Pearl”) and National Payment Systems, L.L.C. (“NPS”) operate in the credit-card-payment-processing industry. In May 2019, NPS loaned $375,100.85 to Pearl, to be repaid with interest over forty-two months. The Loan Agreement required Pearl to pay back $684,966.76, with a schedule allocating each month’s payment between principal and interest. Pearl sued NPS in March 2022, seeking a declaration that the Loan and Option Agreement violated Texas usury law.The U.S. District Court for the Northern District of Texas granted NPS’s motion to dismiss, concluding that the scheduled interest payments were not usurious under the “spreading doctrine,” the purchase option’s value was too uncertain to constitute interest, and Pearl had not adequately alleged a scheme to conceal usury. The district court calculated the interest by spreading it over the term of the loan in equal parts, finding no usury violation. Pearl appealed to the U.S. Court of Appeals for the Fifth Circuit, arguing that the district court erred by applying the “equal parts” method instead of the actuarial method required by Section 306.004(a) of the Texas Finance Code.The Supreme Court of Texas reviewed the case and held that Section 306.004(a) requires courts to calculate the maximum permissible interest based on the declining principal balance for each payment period, using the actuarial method. The court emphasized that the Legislature’s deliberate choice of words in the statute matters, and the actuarial method calls for interest amounts to be calculated for each payment period based on the declining principal balance. The court answered the Fifth Circuit’s certified question affirmatively, clarifying that the interest calculations must be based on the declining principal balance when periodic principal payments are provided during the loan term. View "AMERICAN PEARL GROUP, L.L.C. v. NATIONAL PAYMENT SYSTEMS, L.L.C." on Justia Law

Oljine Noguez and Manuel Zepeda Mendoza were investigated for their alleged involvement in an opioid trafficking operation. Following the investigation, the State of Texas seized their bank accounts and cash, initiating four civil-forfeiture actions. The State alleged that the funds were contraband related to the trafficking operation, attaching a sworn declaration and affidavit from the investigating officer, Bryan Bacon, to each notice of seizure. Nearly two years later, the Claimants filed a no-evidence motion for summary judgment, arguing that the State had no evidence to support its claims. The State responded but did not attach any exhibits, instead referencing Officer Bacon’s affidavit.The trial court considered the motion and granted summary judgment for the Claimants, noting that the State did not attach the affidavit to its response. The State then filed a motion for leave to file a response with the affidavit attached, which the trial court denied, finalizing its order granting summary judgment to the Claimants. The State appealed, and the Court of Appeals for the Seventh District of Texas affirmed the trial court’s decision, holding that the State failed to meet its burden by not attaching the affidavit and not sufficiently directing the trial court to specific portions of the affidavit.The Supreme Court of Texas reviewed the case and held that Texas Rule of Civil Procedure 166a(i) does not require the attachment of previously filed summary judgment evidence. The Court found that the State’s response sufficiently pointed out and discussed the evidence, reversing the Court of Appeals’ judgment. The Supreme Court remanded the case to the trial court for further proceedings, instructing the trial court to reconsider the no-evidence motion in light of the opinion that previously filed evidence referenced in a response can be considered without being attached. View "THE STATE OF TEXAS v. THREE THOUSAND, SEVEN HUNDRED SEVENTY-FOUR DOLLARS AND TWENTY-EIGHT CENTS U.S. CURRENCY ($3,774.28)" on Justia Law

The Supreme Court of Texas examined whether a lender could rescind a loan acceleration and reaccelerate the loan simultaneously, thereby resetting the foreclosure statute of limitations under the Texas Civil Practice and Remedies Code Section 16.038. The plaintiffs, Linda and Thomas Moore, defaulted on their home loan, leading to an acceleration of the loan by the lenders, Wells Fargo Bank and PHH Mortgage Corporation. The lenders subsequently issued notices rescinding the acceleration and then reaccelerating the loan. The Moores sued, arguing that the foreclosure statute of limitations had run out because the lenders' rescission notices also included notices of reacceleration. The federal district court ruled against the Moores, leading to their appeal and the subsequent certification of questions to the Supreme Court of Texas by the Fifth Circuit. The key question was whether simultaneous rescission and reacceleration could reset the limitations period under Section 16.038.The Supreme Court of Texas held that a rescission that complies with the statute resets the limitations period, even if it is combined with a notice of reacceleration. The court reasoned that the statute doesn't require the rescission notice to be separate from other notices, nor does it impose a waiting period between rescission and reacceleration. The court's ruling means that lenders can rescind and reaccelerate a loan simultaneously, thereby resetting the foreclosure statute of limitations. View "MOORE v. WELLS FARGO BANK, N.A." on Justia Law

The Supreme Court affirmed the conclusion of the court of appeals on remand that PNC Mortgage's foreclosure claim was time-barred, holding that there was no error.PNC, whose predecessor refinanced John and Amy Howards' original mortgage loans, did not initiate foreclosure proceedings until its claim to enforce its own lien was time-barred under the relevant statute of limitations. On appeal, the court of appeals concluded that the common-law doctrine of equitable subrogation did not provide PNC with an alternative means of disclosure. The Supreme Court reversed and remanded with instructions to address the Howards' claim that PNC's equitable subrogation claim was time-barred. On remand, the court of appeals concluded that the equitable subrogation claim was time-barred. The Supreme Court affirmed, holding that PNC's claim was time-barred. View "PNC Mortgage v. Howard" on Justia Law

The Supreme Court reversed the judgment of the court of appeals affirming the decision of the trial court granting summary judgment in favor of Roy Elizondo and dismissing this action brought by Cadence Bank, N.A. for breach of a deposit agreement, breach of warranty under the Uniform Commercial Code (UCC), and common-law torts, holding that the lower courts erred.In response to a stranger's email for legal assistance, Elizondo, an attorney, deposited a cashier's check in his bank account then wired most of the funds to an overseas account. The check was dishonored, and the bank charged the transfer back to Elizondo, as allowed by the UCC and the parties' deposit agreement. When Elizondo refused to pay the overdrawn funds Cadence brought this action. The trial court granted summary judgment for Elizondo, and the court of appeals affirmed. The Supreme Court reversed, holding that the wire-transfer form failed to create the contractual duty urged by Elizondo. View "Cadence Bank, N.A. v. Elizondo" on Justia Law

In this case involving proper service of lawsuits on financial institutions that act as fiduciaries the Supreme Court reversed the decision of the court of appeals affirming the judgment of the trial court rendering judgment that the defendant financial institution take nothing on its equitable bill of review, holding that Defendant was not properly served and that the default judgment rendered against it must be set aside.At issue was which of two Texas statutes applied in this case: Tex. Civ. Prac. & Rem. Code 17.028, which provides that citation may be served on Defendant by serving its "registered agent," or chapter 505 of the Estates Code, which provides that a foreign corporate fiduciary must appoint the Secretary of State as an "agent for service of process." Plaintiff in this case served the Secretary rather than the defendant's designated registered agent. Because it had not updated its Chapter 505 designation of the person to whom the Secretary should forward process, Defendant did not receive the citation, and default judgment was entered against it. The Supreme Court rendered summary judgment granting Defendant's bill of review, holding that Defendant was not properly served. View "U.S. Bank National Ass'n v. Moss" on Justia Law

The Supreme Court reversed the judgment of the court of appeals concluding that a refinancing lender's failure to timely foreclose its property lien precluded the lender from seeking recourse from the borrowers' default through equitable subrogation, holding that a lender's forfeit of its lien does not preclude the lender's equitable right to assert a preexisting lien discharged with the proceeds from its loan.After Borrowers defaulted, Lender sought foreclosure of its lien and alternatively sought a judgment declaring its right to foreclosure of the underlying liens on the property through equitable subrogation. The trial court declared that Lender's lien was unenforceable. The court of appeals affirmed, thus rejecting Lender's assertion of an equitable right to enforce the liens. After the court of appeals issued its opinion, the Supreme Court decided Fed. Home Loan Mortgage Corp. v. Zepeda, 601 S.W.3d 763 (Tex. 2020). The Supreme Court reversed the portion of the judgment declaring Lender's equitable subrogation rights unenforceable, holding that the Court's opinion in Zepeda required reversal. View "PNC Mortgage v. Howard" on Justia Law

The Supreme Court held that Plaintiff, rather than his Bank, must suffer the financial consequences of the complete draining of Plaintiff’s bank account by an identity theft through a series of fraudulent transactions.At issue was Tex. Bus. & Com. Code 4.406(c), which limits the liability of a bank when the customer fails to comply with his or her duties to examine the statement of account and notify the bank of any unauthorized payment. Rather than monitor his account as contemplated by the statute, for more than a year Plaintiff failed to look for missing bank statements or inquire about the status of his account. The court of appeals rendered judgment for Plaintiff, holding that the Bank neither sent the statements to Plaintiff nor made them available to him, and therefore, his statutory duties to examine the statements and report unauthorized transactions never arose. The Supreme Court reversed, holding (1) the Bank made the statements “available” to Plaintiff for purposes of section 4.406; and (2) under the circumstances, section 4.406 precluded Plaintiff’s attempt to hold the Bank liable for the losses. View "Compass Bank v. Calleja-Ahedo" on Justia Law

The Supreme Court reversed the decision of the court of appeals holding that a cause of action for acknowledgment of a debt must be “specifically and clearly” pleaded “in plain and emphatic terms” because this holding conflicts with Tex. R. Civ. P. 47(a), which provides that a pleading is “sufficient” if it gives “fair noice of the claim involved.”A Trust sued Defendants seeking payment on a debt. Defendants moved for summary judgment arguing that the Trust’s claims were barred by the statute of limitations because the Trust had not properly pleaded acknowledgment. The trial court agreed and granted summary judgment for Defendants. The court of appeals affirmed, concluding that while the Trust had raised acknowledgment in response to Defendants’ motion for summary judgment, it had failed to plead acknowledgement as a cause of action because it had not done so “specifically and clearly” and in “plain and emphatic terms.” The Supreme Court reversed and remanded, holding that the Trust provided fair notice to Defendants of its claim on their acknowledgment and thus satisfied Rule 47, and the court of appeals erred in requiring a higher standard. View "DeRoeck v. DHM Ventures, LLC" on Justia Law

This case arose from an allegedly forged home-equity loan. Plaintiff sued the lenders, bringing several claims, including statutory fraud and violations of the Texas Finance Code and Texas Deceptive Trade Practices Act. The trial court granted summary judgment for the lenders without stating its reasons. The court of appeals affirmed. The Supreme Court affirmed in part and reversed and remanded in part, holding that the court of appeals (1) properly affirmed summary judgment on Plaintiff’s constitutional forfeiture claim; and (2) erred in holding that Plaintiff’s remaining claims were barred on statute of limitations and waiver grounds. View "Kyle v. Strasburger" on Justia Law