Opinion
No. 05-14-00663-CV
03-15-2016
COLLIN PORTERFIELD, Appellant v. CENLAR FSB AND MORGAN STANLEY PRIVATE BANK NA, F/K/A MORGAN STANLEY CREDIT CORPORATION, Appellees
On Appeal from the County Court at Law No. 3 Dallas County, Texas
Trial Court Cause No. CC-12-00651-C
MEMORANDUM OPINION
Before Chief Justice Wright, Justice Fillmore, and Justice Stoddart
Opinion by Chief Justice Wright
This appeal arises from the foreclosure sale of appellant Collin Porterfield's home. Porterfield appeals the trial court's summary judgment in favor of appellees Cenlar FSB (Cenlar) and Morgan Stanley Private Bank NA (Morgan Stanley). In one issue, Porterfield contends the trial court erred in granting summary judgment because his claim for wrongful foreclosure is not barred by res judicata. Because all dispositive issues are settled in law, we issue this memorandum opinion. TEX. R. APP. P. 47.2(a), 47.4. We affirm the trial court's judgment.
I. FACTUAL AND PROCEDURAL BACKGROUND
Porterfield and his wife, Kimberley Porterfield, acquired title to real property located at 3336 Hanover, University Park, Dallas County, Texas 75225 (the Property), and claimed this Property as their homestead. On March 13, 2003, the Porterfields executed an adjustable rate note (the Note) in the principal amount of $648,150, and a purchase money deed of trust (the Deed of Trust), granting a first lien security interest in the Property to Mortgage Electronic Registration Systems, Inc., as nominee for GreenPoint Mortgage Funding, Inc. On June 15, 2004, GreenPoint notified Porterfield that effective July 1, 2004, the Note and the Deed of Trust (collectively, the loan) would be serviced by Morgan Stanley, and subserviced by Cenlar. Porterfield contends he did not receive this notice. The loan was later assigned to Morgan Stanley. Morgan Stanley contracted with Cenlar to act as a mortgage servicer under a subservicing contract that authorized Cenlar to delegate foreclosure, bankruptcy, claims and conveyance, and other default-related services to a subcontractor.
On August 10, 2005, the Porterfields executed a home equity note in the original principal amount of $261,655. On the same day, Porterfield executed a home equity security instrument, which granted a second lien security interest in the Property to Centex Home Equity Company, LLC. Centex later assigned the servicing of the home equity loan to America's Servicing Company (ASC). It is uncontested that both the purchase money Deed of Trust and home equity security instrument encumbered the Property and the home equity security instrument was junior to the purchase money Deed of Trust.
On July 10, 2007, Cenlar, on behalf of and as subservicer for Morgan Stanley, sent Porterfield a notice of default and intent to accelerate. The notice warned Porterfield that if he failed to cure the default, his loan would be accelerated and referred for foreclosure. Porterfield contends he did not receive this notice. Cenlar retained the law firm of Barrett Daffin Frappier Turner & Engel, L.L.P. f/k/a Barrett Burke Wilson Castle Daffin & Frappier, L.L.P. (Barrett Daffin) to conduct the foreclosure sale of the Property. Barrett Daffin provided Porterfield with notice that because of his failure to cure the default, Cenlar had elected to accelerate the indebtedness and the Property would be sold at a foreclosure sale to take place on October 2, 2007. Porterfield confirmed receipt of Barrett Daffin's letter and notice of trustee's sale, asked for additional documentation, advised Barrett Daffin that he was preparing to file for Chapter 13 bankruptcy protection if necessary to avoid a foreclosure sale, stated his preference for a workout agreement, and asked that Barrett Daffin communicate with him by telephone or email. On September 27, 2007, Barrett Daffin emailed a letter to Porterfield, attaching a copy of the July 10, 2007 notice of default sent to Porterfield by Cenlar and a reinstatement quote good through October 1, 2007. Porterfield confirmed receipt of Barrett Daffin's email and attachments.
On January 11, 2008, Barrett Daffin notified Porterfield that because payment of the past due balance had not been received, Cenlar had elected to accelerate the maturity of the debt and the Property would be sold at a foreclosure sale on February 5, 2008. Lisle D. Patton (Patton), an employee of Barrett Daffin, acted as substitute trustee pursuant to the Deed of Trust. On February 5, 2008, Patton conducted a foreclosure sale and sold the Property to American Home Renovation, LLC and Kenneth Stein for $1,102,000. Patton, with the assistance of Barrett Daffin, disbursed funds from the proceeds of the sale to Cenlar to satisfy the outstanding balance of the loan secured by the first lien. Patton and Barrett Daffin then disbursed the excess proceeds. The home equity lien holder was paid the balance on its note in the amount of $293,424.27. Patton and Barrett Daffin also sent Porterfield a check in the amount of $70,375.33.
The day of the foreclosure sale, February 5, 2008, Porterfield filed a petition for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court, case no. 08-30653-sgj. Several days later, Porterfield filed suit against Cenlar FSB, Morgan Stanley, American Home Renovations, LLC, and Kenneth Stein, in Dallas County, case no. CC-08-01127e, seeking judgment for wrongful foreclosure and a temporary restraining order, temporary injunction, and permanent injunction to protect his ownership interest in the Property. This suit became an adversary proceeding in Porterfield's bankruptcy. When Porterfield's underlying bankruptcy case was dismissed, his adversary proceeding was also dismissed.
FIRST LAWSUIT
On October 25, 2010, Porterfield filed a lawsuit styled Collin D. Porterfield v. Lisle D. Patton, National Default Exchange, L.P., and Barrett Daffin Frappier Turner & Engel, LLP, f/k/a Barrett Burke Wilson Castle Daffin & Frappier, L.L.P., cause no. CC-10-07440-A, in Dallas County Court at Law No. 1 (the First Lawsuit), pertaining to the foreclosure sale of the Property. In the First Lawsuit, Porterfield sought an accounting of the foreclosure sale proceeds and alleged claims against Patton and Barrett Daffin for conspiracy to commit conversion, conspiracy to breach duty of trust, conspiracy to commit fraud, negligence, and breach of contract (the Deed of Trust). Porterfield asserted that Patton and Barrett Daffin should not have paid off the home equity lien from foreclosure sale proceeds. He further asserted that Patton and Barrett Daffin wrongfully withheld and failed to pay him all of the foreclosure sale proceeds in excess of that paid to satisfy the debt secured by the Deed of Trust and sought actual, consequential, and exemplary damages.
Patton and Barrett Daffin denied Porterfield was entitled to the excess proceeds before payment was made to ASC, the servicer for the home equity note. The case was tried before the trial court on agreed facts. On October 20, 2011, the trial court granted judgment in favor of Porterfield, concluding that Patton and Barrett Daffin breached their contractual obligation to Porterfield, and ordering that Porterfield recover $293,424.27 in damages, equal to the amount paid to ASC. This Court subsequently reversed the trial court's judgment and rendered a take-nothing judgment on Porterfield's claim against Patton and Barrett Daffin. See Patton v. Porterfield, 411 S.W.3d 147, 161 (Tex. App.—Dallas 2013, pet. denied).
SECOND LAWSUIT
On February 6, 2012, Porterfield filed the lawsuit now before us on appeal, styled Collin Porterfield v. Cenlar Federal Savings Bank, Morgan Stanley Credit Corporation, Barrett Daffin Frappier Turner & Engel, LLP, cause no. CC-12-00651-C, in Dallas County Court at Law No. 3 (the Second Lawsuit), and also pertaining to the foreclosure sale of the Property. In the Second Lawsuit, Porterfield claimed that Cenlar, Morgan Stanley, and Barrett Daffin wrongfully foreclosed on the Property by: (1) failing to properly notify Porterfield of intent to accelerate the note; (2) conspiring to create documents of a backdated assignment in order to establish Cenlar's right to foreclose on the Property; and (3) foreclosing on the Property without the right to foreclose. Porterfield alleged claims against Cenlar and Barrett Daffin for fraud and conspiracy to defraud for making false representations and preparing backdated, fictitious documents. Porterfield also asserted a breach of contract claim with respect to Cenlar's payment of property taxes on the Property. In his third amended petition, Porterfield added a claim for breach of contract against Cenlar and Morgan Stanley, asserting they breached the terms of the Deed of Trust by failing to provide Porterfield with proper notice of default and intent to accelerate before accelerating the note and before seeking a sale of the Property.
Barrett Daffin, Cenlar, and Morgan Stanley filed a consolidated traditional motion for summary judgment, arguing that Porterfield's claims were barred by the doctrine of res judicata because all of the claims in the Second Lawsuit could have been brought in the First Lawsuit. On January 25, 2013, the trial court granted the consolidated motion for summary judgment against Porterfield. Porterfield filed a motion for new trial, specifically limited in scope to his wrongful foreclosure claim against Cenlar and Morgan Stanley. Porterfield's motion did not seek a new trial or reconsideration with respect to his claims against Barrett Daffin. The trial court granted Porterfield's motion in part to allow submission of additional evidence as to privity between Cenlar and Morgan Stanley.
After both parties filed supplemental pleadings, the trial court granted summary judgment for Cenlar and Morgan Stanley on their affirmative defense of res judicata. The trial court's final judgment disposed of all parties and issues. This appeal followed. Porterfield's notice of appeal states that both summary judgments are appealed; however, Porterfield's appellate brief does not raise any issues with respect to Barrett Daffin.
On May 14, 2014, Porterfield filed an agreed motion for partial dismissal, stating he had settled all matters in controversy between himself and Barrett Daffin. He requested that this Court sever Barrett Daffin from this appeal, render a judgment affirming the trial court's summary judgment in favor of Barrett Daffin, dismiss Barrett Daffin from the appeal, and assess costs and expenses against the party that incurred them. On December 10, 2014, this Court entered an order granting Porterfield's request to sever his claims against Barrett Daffin, and docketing Porterfield's appeal of the trial court's judgment in favor of Barrett Daffin as appellate cause no. 05-14-01537-CV, styled Collin Porterfield v. Barrett Daffin Frappier Turner & Engle, LLP. We subsequently entered an order granting Porterfield's motion to dispose of his appeal against Barrett Daffin in accordance with the parties' agreement.
II. DISCUSSION
In one issue, Porterfield asserts the trial court erred by granting summary judgment in favor of Cenlar and Morgan Stanley. Porterfield presents the following arguments in support of his assertion: (1) Cenlar and Morgan Stanley waived their affirmative defense of res judicata; and (2) Cenlar and Morgan Stanley failed to prove there was no fact issue regarding their affirmative defense of res judicata.
Standard Of Review
We review the granting of a summary judgment de novo. See Nathan v. Whittington, 408 S.W.3d 870, 872 (Tex. 2013); North Tex. Mun. Water Dist. v. Ball, 466 S.W.3d 314, 318 (Tex. App.—Dallas 2015, no pet.). In a traditional motion for summary judgment, the moving party has the burden of showing there is no genuine issue of material fact and it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); see also Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009).
Where a defendant moves for summary judgment on an affirmative defense, it must prove all the essential elements of its defense as a matter of law. See Ryland Group, Inc. v. Hood, 924 S.W.2d 120, 121 (Tex. 1996) (per curiam); Van Voris v. Team Chop Shop, LLC, 402 S.W.3d 915, 918 (Tex. App.—Dallas 2013, no pet.). Once the defendant establishes a right to summary judgment as a matter of law, the burden shifts to the plaintiff to present evidence raising a genuine issue of material fact, thereby precluding summary judgment. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678-79 (Tex. 1979); Wesby v. Act Pipe & Supply, Inc., 199 S.W.3d 614, 617 (Tex. App.—Dallas 2006, no pet.).
An appellate court must take as true evidence favorable to the nonmovant, indulge every reasonable inference from the evidence in favor of the nonmovant, and resolve any doubt in favor of the non-movant. See Fort Worth Osteopathic Hosp., Inc. v. Reese, 148 S.W.3d 94, 99 (Tex. 2004). "A matter is conclusively established if ordinary minds could not differ as to the conclusion to be drawn from the evidence." In re Estate of Hendler, 316 S.W.3d 703, 707 (Tex. App.—Dallas 2010, no pet.) (quoting W.H.V., Inc. v. Assocs. Hous. Fin., LLC, 43 S.W.3d 83, 87 (Tex. App.—Dallas 2001, pet. denied)).
Waiver
Porterfield suggests that Cenlar and Morgan Stanley waived their res judicata affirmative defense because they did not comply with Dallas County Local Rules pertaining to the transfer of related cases. The district and statutory county courts of Dallas County adopted local rules of administration that provide, in part, for the transfer of cases. See TEX. GOV'T CODE ANN. § 74.093 (West Supp. 2015); In re City of Coppell, 219 S.W.3d 552, 557 (Tex. App.—Dallas 2007, no pet.). Local rule 1.06 provides that it may be appropriate to transfer a pending case when it is so related to another case previously filed in or disposed of by another Dallas County court that transfer of the later case to such other court would facilitate orderly and efficient disposition of the litigation. See DALLAS CTY. CIV. CT. LOC. R. 1.06. Local rule 1.07 provides that "any case involving a plea that a judgment in the earlier case is conclusive of any of the issues of the later case by way of res judicata" shall be subject to transfer under local rule 1.06. DALLAS CTY. CIV. CT. LOC. R. 1.07(b). If a case is a related case as defined by local rule 1.07, the attorney filing the case must make a disclosure that the case is so related and identify the related case. See DALLAS CTY. CIV. CT. LOC. R. 1.08. If the plaintiff's attorney does not make this disclosure, the defendant's attorney shall point out the failure of plaintiff's attorney to make the related-case disclosure. Id. "In the absence of any such plea, the signature of the attorney filing the original defensive pleading shall be that attorney's certificate either that the disclosure of the attorney filing the case was accurate, or, if no disclosure was made by the attorney filing the case, that the case is not so related to a prior filed or disposed of case." Id.
Porterfield asserts he did not make a related-case disclosure. The record does not contain any evidence that counsel for Cenlar and Morgan Stanley pointed out this lack of disclosure to the trial court. Porterfield argues that by failing to point out the lack of a related-case disclosure, Cenlar and Morgan Stanley certified that the Second Lawsuit was not related to the First Lawsuit, and such certification was sufficient to constitute a waiver of their right to raise the affirmative defense of res judicata. We reject this argument for several reasons. First, the local rule does not state that a party waives the right to assert a res judicata affirmative defense if they certify pursuant to local rule 1.08 that the case is not related to a prior filed or disposed of case. And Porterfield provides no legal authority to support this contention. Second, "in view of the fact that judges can freely transfer and exchange cases, the local rule is purely procedural." Starnes v. Holloway, 779 S.W.2d 86, 96 (Tex. App.—Dallas 1989, writ denied). Third, to the extent that the local rule is in conflict with the rules of civil procedure or the constitution, the rule cannot be given controlling effect. TEX. R. CIV. P. 3a(1). If violation of the local rule leads to the result suggested by Porterfield (waiver of the affirmative defense of res judicata asserted by Cenlar and Morgan Stanley), the local rule may be in conflict with the rules of civil procedure. See TEX. R. CIV. P. 3a(6) (erroneous application of a local rule cannot determine the merits of a case). Accordingly, we conclude the result suggested by Porterfield is not required by the terms of the local rule.
In addition, the record does not contain the original defensive pleading of any of the defendants.
Res Judicata
Res judicata precludes the relitigation of claims that have been finally adjudicated, as well as all related matters that with the use of diligence could or should have been litigated in the prior suit. Citizens Ins. Co. of Am. v. Daccach, 217 S.W.3d 430, 449 (Tex. 2007); State & Cnty. Mut. Fire Ins. Co. v. Miller, 52 S.W.3d 693, 696 (Tex. 2001); MGA Ins. Co. v. Charles R. Chesnutt, P.C., 358 S.W.3d 808, 816 (Tex. App.—Dallas 2012, no pet.). The party relying on the affirmative defense of res judicata must prove: (1) a prior final determination on the merits by a court of competent jurisdiction; (2) identity of parties or those in privity with them; and (3) a second action based on the same claims as were raised or could have been raised in the first action. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010); Hill v. Tx-An Anesthesia Mgmt., LLP, 443 S.W.3d 416, 424 (Tex. App.—Dallas 2014, no pet.). The doctrine seeks to bring an end to litigation, prevent vexatious litigation, maintain stability of court decisions, promote judicial economy, and prevent double recovery. Barr v. Resolution Trust Corp., 837 S.W.2d 627, 629 (Tex. 1992). In this appeal, Porterfield contends Cenlar and Morgan Stanley failed to establish the second and third elements of their affirmative defense of res judicata.
A. Identity of Parties and Privity
Generally a person is not bound by a judgment in a suit to which he was not a party. See TEX. CIV. PRAC. & REM. CODE ANN. § 37.006(a) (West 2015); see also Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex. 1996). "The doctrine of res judicata creates an exception to this rule by forbidding a second suit arising out of the same subject matter of an earlier suit by those in privity with the parties to the original suit." Amstadt, 919 S.W.2d at 652-53; see also Brown v. Zimmerman, 160 S.W.3d 695, 703 (Tex. App.—Dallas 2005, no pet.). No prevailing definition of privity exists that automatically applies to all cases involving res judicata. See Truck Ins. Exchange v. Mid-Continent Cas. Co., 320 S.W.3d 613, 618 (Tex. App.—Austin 2010, no pet.) (citing Getty Oil Co. v. Ins. Co. of N. Am., 845 S.W.2d 794, 800 (Tex. 1992)). Rather, the determination of who are privies requires careful examination of the circumstances of each case. See id.; see also Brown, 160 S.W.2d at 703. A person may be in privity with a party in at least three ways: (1) he can control an action even though not a party to it; (2) his interests can be represented by a party to the action; or (3) he can be a successor in interest deriving his claim through a party to the prior action. Amstadt, 919 S.W.2d at 653; Samuel v. Federal Home Loan Mortg. Corp., 434 S.W.3d 230, 234-35 (Tex. App.—Houston [1st Dist.] 2014, no pet.).
Porterfield sued Barrett Daffin in both the First and Second Lawsuits. Porterfield did not sue Cenlar and Morgan Stanley in the First Lawsuit and here, in the Second Lawsuit, Porterfield contends Barrett Daffin is not in privity with Cenlar and Morgan Stanley. We begin our analysis by examining the interests the parties shared. See Amstadt, 919 S.W.2d at 653. The record shows Morgan Stanley was the mortgagee of the Porterfield mortgage. Morgan Stanley retained and authorized Cenlar to act as the subservicer of the Porterfield mortgage and to subservice the Porterfield mortgage in accordance with the subservicing agreement, the loan documents, and applicable law. Porterfield does not dispute Cenlar and Morgan Stanley were in privity with each other.
Upon Porterfield's default, Cenlar was further authorized to delegate the foreclosure, conveyance, and other default-related services to a subcontractor. Cenlar delegated the foreclosure and default-related services by retaining Barrett Daffin to foreclose the interests of Morgan Stanley in the Property. Thus the basic legal rights in which Morgan Stanley, Cenlar, and Barrett Daffin shared an identity of interests were the ability to foreclose the Deed of Trust and to sell the Property at foreclosure. Barrett Daffin's actions on behalf of Cenlar and Morgan Stanley represent a common identity of interests. See Samuel, 434 S.W.3d at 235.
Porterfield asserts that Cenlar and Morgan Stanley were not in privity with Barrett Daffin on the specific date his wrongful foreclosure claim arose because Cenlar had not yet hired Barrett Daffin. He contends his wrongful foreclosure claim arose on July 10, 2007—the date of Cenlar's notice of default and intent to accelerate—because the notice was not sent by certified mail to the address of the Property.
Initially, Porterfield alleged a variety of claims in support of his wrongful foreclosure lawsuit. In his motion for new trial and reconsideration of summary judgment, Porterfield limited the scope of his wrongful foreclosure claim, basing it on his allegation that Cenlar and Morgan Stanley failed to properly provide the notice of default and intent to accelerate as required by section 51.002(d) of the property code. --------
Mere irregularities in the foreclosure process do not give rise to a wrongful foreclosure claim. Charter Nat'l Bank-Houston v. Stevens, 781 S.W.2d 368, 371 (Tex. App.—Houston [14th Dist.] 1989, writ denied). To establish a wrongful foreclosure, a plaintiff must prove: (1) a defect in the foreclosure sale proceeding; (2) a grossly inadequate selling price; and (3) a causal connection between the defect and the grossly inadequate selling price. Montenegro v. Ocwen Loan Servicing, LLC, 419 S.W.3d 561, 569 (Tex. App.—Amarillo 2013, pet. denied). Because a grossly inadequate selling price is a requisite element of a wrongful foreclosure claim, a claim for wrongful foreclosure does not arise until there has been a foreclosure sale. See Biggers v. BAC Home Loans Servicing, LP, 767 F. Supp. 2nd 725, 729 (N.D. Tex. 2011) (Texas courts do not recognize a claim for attempted wrongful foreclosure.). Accordingly, Porterfield did not have a claim for wrongful foreclosure until the foreclosure sale occurred on February 5, 2008. Id.
It is undisputed that Barrett Daffin was hired prior to the foreclosure sale because Cenlar retained Barrett Daffin to conduct the foreclosure sale. Barrett Daffin emailed Porterfield a copy of the notice of default and intent to accelerate in late September, well before the foreclosure sale on February 5, 2008. Barrett Daffin sent the operative notice of acceleration and notice of trustee's sale on January 11, 2008, more than thirty days after Porterfield received the notice of default and intent to accelerate. And although Porterfield complains that notices were sent to him by email, he requested that Barrett Daffin send written communications to him by email.
Privity exists if the parties share an identity of interests in the basic legal right that is the subject of the litigation. See Truck Ins. Exchange, 320 S.W.3d at 618. Here, Cenlar and Morgan Stanley were in privity with Barrett Daffin because they shared an identity of interests in enforcement and foreclosure under the deed of trust and the foreclosure sale of the Property.
B. Subject Matter of Suit
"Under the transactional approach followed in Texas, a subsequent suit is barred if it arises out of the same subject matter as the prior suit, and that subject matter could have been litigated in the prior suit." Citizens, 217 S.W.3d at 449; see also Miller, 52 S.W.3d at 696; Barr, 837 S.W.2d at 630-31. Whether the claims arise from the same transaction is determined pragmatically, "giving weight to such considerations as whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a trial unit conforms to the parties' expectations or business understanding or usage." Citizens, 217 S.W.3d at 449 (quoting RESTATEMENT (SECOND) OF JUDGMENTS § 24(2) (1982)). Any cause of action arising out of the same facts should, if practicable, be litigated in the same lawsuit. Barr, 837 S.W.2d at 630.
Porterfield contends the nucleus of operative facts in the two lawsuits are not the same: the outcomes of the cases are not dependent or related to each other, the duties of the parties are not the same, and the facts regarding liability are not the same. We disagree. "When there is a legal relationship, such as under a lease, a contract, or a marriage, all claims arising from that relationship will arise from the same subject matter and be subject to res judicata." Genecov Grp., Inc. v. Roosth Prod. Co., 144 S.W.3d 546, 552 (Tex. App.—Tyler 2003, pet. denied) (citing Pinebrook Properties, Ltd. v. Brookhaven Lake Prop. Owners Ass'n, 77 S.W.3d 487, 497 (Tex. App.—Texarkana 2002, pet. denied)). The same Deed of Trust created the legal relationships and determined the duties of the parties in both lawsuits. And Porterfield's claims in both lawsuits pertain to the February 2008 foreclosure of the Property.
In the First Lawsuit, Porterfield did not complain that the foreclosure itself was improper; he complained that Patton and Barrett Daffin did not pay him all of the foreclosure proceeds to which he was entitled. See Patton, 411 S.W.3d at 151-52. He claimed that Patton and Barrett Daffin breached their duty to strictly comply with the provisions of the Deed of Trust requiring that any excess proceeds from a foreclosure sale be paid to the person or persons legally entitled to it. Id. Now, in an attempt to distinguish between the facts and claims involved in the two lawsuits, Porterfield contends the First Lawsuit only dealt with the home equity loan and how Patton and Barrett Daffin distributed money to an unrelated lender under a separate loan. We acknowledge that the First Lawsuit considered whether Patton and Barrett Daffin properly distributed excess foreclosure proceeds to satisfy the junior home equity note. However, it is clear that Porterfield's underlying claims in the First Lawsuit alleged that Patton and Barrett Daffin breached their duties and responsibilities under the Deed of Trust. And the funds being disbursed were proceeds from the foreclosure sale of the Property pursuant to the Deed of Trust.
In the Second Lawsuit, the basis for Porterfield's wrongful foreclosure claim is his allegation that Cenlar and Morgan Stanley breached the Deed of Trust by their failure to comply with contract terms pertaining to the provision of a notice of default and notice of intent to accelerate the note. But Porterfield's claim for wrongful foreclosure cannot exist separate and apart from the foreclosure sale conducted by Patton and Barrett Daffin, at the request of Cenlar and for the benefit of Morgan Stanley, that was the subject of the First Lawsuit. Many of the facts alleged in both lawsuits were identical. Any facts that were not identical were related in time and origin, as they detailed the events leading up to the foreclosure sale, the foreclosure sale itself, and the distribution of proceeds from the foreclosure sale. Because the claims arose from the same operative facts, they would have formed a convenient trial unit. See Citizens, 217 S.W.3d at 449. After reviewing the record, we conclude that Porterfield's claims in the Second Lawsuit arose out of the same subject matter involved in the First Lawsuit and, through the exercise of due diligence, could have been litigated in the First Lawsuit. See Barr, 837 S.W.2d at 630; Hill, 443 S.W.3d at 426.
Porterfield did not raise a genuine issue of material fact with respect to the affirmative defense of res judicata asserted by Cenlar and Morgan Stanley. The trial court did not err when it granted the motions for summary judgment filed by Cenlar and Morgan Stanley because all of Porterfield's claims against Cenlar and Morgan Stanley were barred by res judicata. We overrule Porterfield's sole issue.
III. CONCLUSION
Because res judicata bars Porterfield's Second Lawsuit, the trial court properly granted summary judgment in favor of Cenlar and Morgan Stanley. We affirm the trial court's judgment.
/Carolyn Wright/
CAROLYN WRIGHT
CHIEF JUSTICE 140663F.P05
JUDGMENT
On Appeal from the County Court at Law No. 3, Dallas County, Texas
Trial Court Cause No. CC-12-00651-C.
Opinion delivered by Chief Justice Wright. Justices Fillmore and Stoddart participating.
In accordance with this Court's opinion of this date, the judgment of the trial court is AFFIRMED.
It is ORDERED that appellee CENLAR FSB, MORGAN STANLEY PRIVATE BANK NA, F/K/A MORGAN STANLEY CREDIT CORPORATION recover their costs of this appeal from appellant COLLIN PORTERFIELD. Judgment entered March 15, 2016.