Wendy Kyle v. H.T. Strasburger, Shirley Strasburger, Terry Whitley, Fidelity Bank of Texas, and Tuition LLC

Summary

The Texas Supreme Court reviewed claims arising from an allegedly forged home-equity loan secured by a homestead lien. Relying on Garofolo v. Ocwen Loan Servicing and Wood v. HSBC Bank USA, the court held that the claim to declare the lien invalid was not barred by limitations, reversed summary judgment on several related claims, and remanded for further proceedings. The court affirmed summary judgment on the constitutional forfeiture claim.

Holdings

1. A lien securing a home-equity loan that was not created with the consent of each owner and each owner’s spouse is invalid under Article XVI, section 50(c) unless and until the defect is cured; it is not merely voidable.
2. The statute of limitations did not bar Kyle’s claim seeking a declaration that the deed of trust was invalid.
3. Kyle did not waive her challenge to the validity of the special warranty deed by failing to reference that claim more clearly in the limitations portion of her appellate brief.
4. The court of appeals erred in affirming summary judgment on Kyle’s statutory fraud, Finance Code, and DTPA claims based on its erroneous conclusion that the underlying deed-of-trust claim was barred by limitations.
5. Kyle could not pursue forfeiture of principal and interest as an independent cause of action under the Texas Constitution.
6. The declaratory-judgment claims were not moot to the extent they underlay Kyle’s remaining statutory and related claims.

Questions Presented

1. Whether the statute of limitations barred Kyle’s claim for a declaration that the deed of trust securing the home-equity loan was invalid under Article XVI, section 50(c) of the Texas Constitution.
2. Whether a lien securing a home-equity loan allegedly created without the consent of each owner and each owner’s spouse is void or merely voidable.
3. Whether the statute of limitations or waiver barred Kyle’s claim to invalidate the special warranty deed conveying her interest in the property to Mark.
4. Whether Kyle could maintain statutory fraud, Finance Code, and DTPA claims that depended on the alleged invalidity of the deed of trust.
5. Whether the appeal became moot after the property was sold, the loan was paid off, and the lien was extinguished.
6. Whether Kyle could obtain constitutional forfeiture of principal and interest as an independent cause of action.

Disposition

reversed_and_remanded