Vera F. Wilson v. Aames Capital Corporation--Appeal from 125th District Court of Harris County

Affirmedand Memorandum Opinion filed October 23, 2007.

In The

Fourteenth Court of Appeals

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NO. 14-06-00524-CV

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VERA F. WILSON, Appellant

V.

AAMES CAPITAL CORPORATION, Appellee

On Appeal from the 125th District Court

Harris County, Texas

Trial Court Cause No. 05-51877

M E M O R A N D U M O P I N I O N

In this homestead foreclosure case, Vera F. Wilson appeals a judgment entered in favor of Aames Capital Corporation (AAames@) on the grounds that the evidence was insufficient to prove that the loan closing took place at the office of the lender, an attorney, or a title company or that the lender was qualified to make the home equity loan. We affirm.

Wilson entered into a home equity loan of $115,500 by executing a note and security agreement with One Stop Mortgage, Inc. (AOne Stop@), which assigned the note and security agreement to Aames. After Wilson defaulted on the note, Aames brought a judicial foreclosure proceeding against her.[1] A bench trial was held, and the court rendered judgment, awarding Aames: (1) recovery of the note balance; (2) a declaration that the security agreement created an enforceable lien on Wilson=s homestead; and (3) a foreclosure of that lien. The trial court also entered findings of fact and conclusions of law.

In 1997, the Texas Constitution was amended to allow Ahome-equity@ loans. See Tex. Const. art. XVI, ' 50.(a)(6); Doody v. Ameriquest Mortgage. Co., 49 S.W.3d 342, 343 (Tex. 2001). However, strict criteria were imposed in order for a lien to Aattach@ to a homestead, thereby giving its holder the right to foreclosure. See Tex. Const. art. XVI, '50 (a)(6)(A)-(Q). If any of these requirements are not met, the lien against the homestead is not valid, and the loan is treated as an unsecured extension of credit. Doody, 49 S.W.3d at 345B46.

Wilson=s challenge to the evidence supporting the judgment relies on her contention that, as the party seeking to enforce the lien, Aames had the burden to plead and prove that its lien on Wilson=s homestead satisfied the many requirements set forth in subsections 50(a)(6)(A) (Q). However, Wilson cites no authority, and we have found none, indicating that a home equity lender, seeking to enforce its lien, has the burden of proof on those requirements.[2] If anything, judicial economy would dictate that a failure to comply with any of these requirements is in the nature of an affirmative defense so that judicial resources are spent litigating the few requirements that are contested rather than the many that are not.[3] Because Wilson fails to demonstrate that Aames had the burden to prove that it met the contested constitutional requirements, Wilson=s challenge to the evidence to prove that compliance affords no basis for relief. Accordingly, Wilson=s issues are overruled, and the judgment of the trial court is affirmed.

/s/ Richard H. Edelman

Senior Justice

Judgment rendered and Memorandum Opinion filed October 23, 2007.

Panel consists of Justices Yates, Seymore, and Edelman.*

[1] See Tex. R. Civ. P. 735.

[2] Wilson cites Hruska v. First State Bank of Deanville to support her claim that Aames had the burden to plead and prove that it had a valid lien. 747 S.W.2d 783, 785 (Tex. 1988). However, Hruska holds only that a lien cannot be created by estoppel and thus has no application here. See id. In addition, the holding of Hruska that a defect in a lien cannot be cured is not longer valid. See Doody, 49 S.W.3d at 346.

[3] See generally Greathouse v. Charter Nat=l Bank-Sw., 851 S.W.2d 173, 175-176 (Tex. 1992)(describing considerations affecting the allocation of burdens of proof); see also 2 William V. Dorsaneo, III et al., Tex. Real Estate Guide ''53.130[1][b] & 53.131 (2001) (stating that invalidity of lien based on noncompliance with the constitutional requirements is an affirmative defense).

* Senior Justice Richard H. Edelman sitting by assignment.