NATIONSTAR MORTGAGE LLC v. LINICAM INVESTMENTS LLC (2025)

OPINION

Appellee Linicam Investments, LLC sued appellants Nationstar Mortgage, LLC and Federal National Mortgage Association (“Fannie Mae”), seeking to be declared the owner of a piece of residential property in west Houston. The trial court granted Nationstar's summary judgment motion in full, so Nationstar did not attend the subsequent bench trial against Fannie Mae. But after trial, the trial court rendered a final judgment declaring Linicam the owner of the property—a judgment that necessarily revisited issues the trial court had previously determined in Nationstar's favor in its summary judgment order. Because the trial court did not give Nationstar notice or the opportunity to relitigate those issues, we reverse the trial court's final judgment and remand for further proceedings.

Analysis

A partial summary judgment is a binding decision on the merits unless it is set aside by the trial court. Hyundai Motor Co. v. Alvarado, 892 S.W.2d 853, 855 (Tex. 1995) (per curiam). However, the trial court cannot set aside a partial summary judgment after the close of evidence if it precludes a party from “presenting its case on the issues previously decided.” Bi-Ed, Ltd. v. Ramsey, 935 S.W.2d 122, 123 (Tex. 1996) (per curiam) (citing Elder Constr., Inc. v. City of Colleyville, 839 S.W.2d 91, 92 (Tex. 1992) (per curiam)).

But that's precisely what happened here. Linicam purchased the property at a foreclosure sale; at the time of the purchase, the property was subject to a deed of trust securing the loan issued for the property's original purchase. Linicam then sued all entities in the deed of trust's chain of title, including Fannie Mae and Nationstar, seeking to quiet title and be declared the owner of the property. It argued that the applicable four-year limitations period voided any interest that Fannie Mae and Nationstar had in the deed of trust because the loan had been previously accelerated in May 2016.¹ Nationstar moved for summary judgment, arguing that limitations did not void its interest because any prior acceleration of the loan was abandoned.² The trial court granted Nationstar summary judgment on all claims against it.

Linicam and Fannie Mae appeared at the subsequent bench trial. Nationstar, unsurprisingly, did not. In its opening statement, Linicam again asserted that the applicable four-year limitations period voided both Fannie Mae and Nationstar's interests in the deed of trust. Fannie Mae responded that this issue had already been decided by summary judgment. Linicam then informed the trial court that it “should proceed today as to Fannie Mae and Nationstar,” but “[i]n the alternative, [Linicam was] prepared to proceed ahead today as to Fannie Mae only.” The trial court did not state whether trial would proceed on only those claims asserted against Fannie Mae or on all claims against both Fannie Mae and Nationstar.

But the trial court's subsequent rulings—issued after the bench trial—clearly revisited the limitations issue as to both Fannie Mae and Nationstar. The findings of fact and conclusions of law found that limitations voided both Fannie Mae and Nationstar's interests in the deed of trust—directly contrary to the trial court's prior ruling—and the final judgment ordered that Linicam is the legal owner of the property and any interest under the deed of trust was void. The trial court erred by setting aside the partial summary judgment rendered in Nationstar's favor without notice or an opportunity to relitigate the issue. See Bi-Ed, Ltd., 935 S.W.2d at 123; Elder Constr., Inc., 839 S.W.2d at 92.

This error requires reversal and remand of the entire judgment. Even though there was only error as to Nationstar, the parties’ rights are interwoven—Nationstar and Fannie Mae were both in the chain of title for the property, Linicam made the same limitations argument as to both, and both Nationstar and Fannie Mae argued that limitations had not run because any acceleration had been abandoned. Indeed, the trial court's fourteen-page findings of fact and conclusions of law rendered after trial never distinguished between the parties, referring to them as “Defendants” throughout. This interweaving requires reversal as to both Nationstar and Fannie Mae. See Torrington Co. v. Stutzman, 46 S.W.3d 829, 843 (Tex. 2000) (reversing and remanding judgment even as to non-appealing party because parties’ rights were interwoven and dependent).

A remand as to both parties is also appropriate here because the record was not fully developed below. See Tex. Windstorm Ins. Ass'n v. Dickinson Indep. Sch. Dist., 561 S.W.3d 263, 280 (Tex. App.—Houston [14th Dist.] 2018, pet. denied). The trial court failed to clarify whether it was proceeding to trial against one or both parties, after having granted Nationstar's motion for summary judgment in its entirety. Had the trial court just denied summary judgment in the first place, “the evidence presented well may have been different.” Id.³

Conclusion

We reverse the trial court's final judgment and remand for proceedings consistent with this opinion.

FOOTNOTES

1.   A secured lender must bring suit to foreclose on a real property lien within four years after the day the cause of action accrues. Tex. Civ. Prac. & Rem. Code § 16.035(a). Where, as here, the security instrument contains an optional acceleration clause, the cause of action accrues when the lender exercises its option to accelerate the maturity date of the note. See Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 566 (Tex. 2001).

2.   Once a lender has accelerated a note's maturity date, it can restore the original maturity date—and reset the running of the statute of limitations—by abandoning the acceleration as though it never happened. Holy Cross Church of God in Christ, 44 S.W.3d at 566-67.

3.   Appellants also assert (1) there is no live controversy between Fannie Mae and Linicam, and (2) insufficient evidence supports Linicam's claim that the loan was accelerated. However, based on our disposition of Appellants’ first issue, we need not consider their other issues.

Katy Boatman, Justice