       TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN


                                     NO. 03-18-00363-CV


                                    Ben Melton, Appellant

                                               v.

              CU Members Mortgage, a Division of Colonial Savings F. A.; and
                          First Western Title Co., Appellees


             FROM THE 340TH DISTRICT COURT OF TOM GREEN COUNTY
        NO. C130102C, THE HONORABLE JAY K. WEATHERBY, JUDGE PRESIDING



                                         OPINION


               In this dispute concerning the constitutionality of a loan on real property,

Appellant Ben Melton challenges the district court’s grant of summary judgment in favor of

Appellees. We will affirm the judgment in part and reverse and remand in part for a determination

of attorney’s fees.


                                       BACKGROUND

               In 1997, Melton purchased a leasehold estate interest from the City of San Angelo

for a property on Lake Nasworthy. The leasehold is Melton’s homestead. Melton makes annual

payments under the terms of the lease, which ends in September 2036. On March 13, 2009,

Melton refinanced an existing note on the property by taking out a home equity loan from
Colonial.1 To effectuate the loan, Melton signed a Texas Home Equity Note (Note) and a Texas

Home Equity Security Instrument (collectively, the loan documents) securing a $223,648 lien on

the leasehold. The loan was settled and funded at title company First Western’s office. Melton

stopped paying on the Note in February 2013. On March 13, 2013, the fourth anniversary of the

day he signed the loan documents, Melton sued Appellees as well as the appraiser involved in

the loan’s origination, asserting several causes of action and seeking a declaratory judgment that

the loan was not eligible for foreclosure based on several provisions of Article XVI, section 50,

of the Texas Constitution.

               Appellees moved for summary judgment on the ground that the statute of

limitations barred Melton’s claims, which Appellees asserted accrued on the date the loan closed.

Although Melton filed his suit on the fourth anniversary of the loan’s closing, he did not serve

Appellees with the suit until two months later, May 13, 2013. The district court granted summary

judgment in favor of Appellees in 2014, ordering that Melton take nothing on his claims. The

district court ruled that Melton defaulted on his payment obligations, that the loan could be

foreclosed through sale of the property, and that Colonial could recover attorney’s fees and costs

from Melton. In 2015, the district court granted summary judgment in favor of the appraiser.

The district court found Melton’s claims against the appraiser frivolous and awarded sanctions

against Melton and Melton’s attorney. Melton did not challenge the portions of the judgment

relating to the appraiser, although his then-attorney appealed the sanctions against him. See

Mosser v. Mims, No. 03-15-00365-CV, 2017 Tex. App. LEXIS 3988, at *1 (Tex. App.—Austin

May 3, 2017, no pet.) (mem. op.). After these rulings were merged into a final judgment, Melton


       1
          The loan was later assigned to the Federal Home Loan Mortgage Corporation, but
Colonial continues to service the loan.
                                                2
appealed, arguing that his claims against Appellees alleging constitutional defects in the loan

were not subject to any limitations defense.

               While Melton’s appeal was pending, the Texas Supreme Court issued Wood v.

HSBC Bank USA, N.A., holding that “liens securing constitutionally noncompliant home-equity

loans are invalid until cured and thus not subject to any statute of limitations.” 505 S.W.3d 542,

545 (Tex. 2016). In light of Wood, this Court reversed the judgment of the district court and

remanded the case for further proceedings. See Melton v. CU Members Mortg., No. 03-15-

00339-CV, 2017 Tex. App. LEXIS 1441 (Tex. App.—Austin Feb. 22, 2017, no pet.) (mem. op.).

On remand, Appellees again moved for summary judgment, which the district court granted,

entering an order disposing of all claims except for the amount of attorney’s fees to be awarded

to Appellees. Later the district court granted summary judgment to Appellees as to their attorney’s

fees. On Appellees’ motion, the district court entered an amended order combining its two earlier

orders into a single final order. Melton appeals.


                                  STANDARD OF REVIEW

               Appellees moved for summary judgment on both no-evidence and traditional

grounds. A no-evidence summary-judgment motion must assert that the nonmovant has produced

no evidence of one or more essential elements of its claim. Duvall v. Texas Dep’t of Human

Servs., 82 S.W.3d 474, 477 (Tex. App.—Austin 2002, no pet.); see Tex. R. Civ. P. 166a(i).

Once the movant specifies the elements on which there is no evidence, the burden shifts to the

nonmovant to produce summary-judgment evidence raising a genuine issue of material fact on

the challenged elements. Trilogy Software, Inc. v. Callidus Software, Inc., 143 S.W.3d 452, 459

(Tex. App.—Austin 2004, pet. denied) (citing Tex. R. Civ. P. 166a(i)). To raise a genuine issue



                                                    3
of material fact, the nonmovant must set forth more than a scintilla of probative evidence as to

the essential elements of the nonmovant’s claim on which the nonmovant would have the burden

of proof at trial. Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). If the

evidence supporting a finding rises to a level that would enable reasonable, fair-minded persons

to differ in their conclusions, then more than a scintilla of evidence exists. Id. Less than a

scintilla of evidence exists when the evidence is “so weak as to do no more than create a mere

surmise or suspicion” of fact, and the legal effect is that there is no evidence. Jackson v. Fiesta

Mart, Inc., 979 S.W.2d 68, 70 (Tex. App.—Austin 1998, no pet.) (quoting Kindred v. Con/Chem,

Inc., 650 S.W.2d 61, 63 (Tex. 1983)). If the nonmovant fails to produce more than a scintilla

of evidence of the challenged fact, the motion must be granted. Ford Motor Co. v. Ridgway,

135 S.W.3d 598, 600 (Tex. 2004).

               To prevail on a motion for traditional summary judgment, a party must show

that there are no genuine issues of material fact and that it is entitled to judgment as a matter

of law. Tex. R. Civ. P. 166a(c); KMS Retail Rowlett, LP v. City of Rowlett, No. 17-0850,

2019 Tex. Lexis 463, at *9 (Tex. May 17, 2019). When reviewing a summary judgment, we

take as true all evidence favorable to the nonmovant, indulging every reasonable inference and

resolving any doubts in the nonmovant’s favor. Valence Operating Co. v. Dorsett, 164 S.W.3d 656,

661 (Tex. 2005). A defendant who moves for summary judgment must disprove at least one

essential element of the plaintiff’s causes of action. Duvall, 82 S.W.3d at 477.

               If the trial court does not state the basis on which it granted summary judgment,

we must affirm if any of the movants’ theories has merit. Texas Workers’ Comp. Comm’n v.

Patient Advocates, 136 S.W.3d 643, 648 (Tex. 2004). Because the propriety of a summary



                                                 4
judgment is a question of law, we review the trial court’s decision de novo. Valence Operating

Co., 164 S.W.3d at 661.


                                         DISCUSSION

               Melton argues the district court erred in granting summary judgment for a

multitude of reasons that are organized into four overarching issues: (1) the district court abused

its discretion in sustaining objections to two pieces of summary-judgment evidence, (2) the

district court erred in ruling that Melton take nothing on his claims against Appellees, (3) the

district court erred in granting Appellees’ motion for summary judgment, and (4) the district

court erred in awarding attorney’s fees to Appellees.


Summary-Judgment Evidence

               In his first issue, Melton complains that the district court abused its discretion in

sustaining two of Appellees’ objections to summary-judgment evidence. Appellees had objected

that (1) Melton’s declaration was a sham affidavit, (2) Melton’s designation of an expert was

untimely, and (3) Melton is contractually estopped from challenging the appraisal. The district

court agreed and excluded Melton’s and the proposed expert’s declarations from the evidence at

summary judgment.


       Sham affidavit

               “Although we generally review summary judgments de novo, a trial court’s

refusal to consider evidence under the sham affidavit rule should be reversed only if it was an

abuse of discretion.” Lujan v. Navistar, Inc., 555 S.W.3d 79, 84 (Tex. 2018). Under Rule 166a(c),

a trial court may conclude that a party does not raise a genuine fact issue by submitting sworn



                                                 5
testimony that materially conflicts with the same witness’s prior sworn testimony, unless there is

a sufficient explanation for the conflict. Id. at 87.

               Melton opined in his declaration that the appraisal of his property was too high

and that he did not receive signed copies of certain documents at his closing. Among the items

Melton signed at closing, however, was an “Acknowledgment Regarding Fair Market Value of

Homestead Property” (Acknowledgment of Value) affirming, consistent with the appraisal, that

the fair market value of the homestead was $300,000. He also signed a “Texas Home Equity

Receipt of Copies,” in which he acknowledged receipt of copies of “all documents signed by the

owner related to the loan,” including the Acknowledgment of Value. Several of the documents

Melton signed at closing, including the Acknowledgment of Value and the loan documents, cite

Article XVI, section 50, of the Texas Constitution. Melton does not contest that these documents

are sworn testimony.

               In contravention of the documents Melton signed at closing, Melton’s declaration

indicated that the appraiser failed to account for repairs needed on the property in making

his appraisal. The declaration does not contain any explanation for the new assertion that the

appraisal was too high because the appraiser did not include “damage to the home and repairs to

correct the damage” in the appraisal. Melton argues that the declaration serves to “clarify” the

issue and that the property’s “true value was later revealed,” but, aside from his declaration, he

does not cite any evidence in the voluminous appellate record that suggests that the appraiser

failed to consider damage to the home or otherwise erred in his analysis. Melton urges that

because the declaration “reflects what Appellant believed to be true during that time,” “the trial

court abused its discretion” in excluding it as a sham.



                                                   6
                 In reviewing Melton’s declaration, the documents it contradicts, and the

pleadings, it is evident that Melton’s assertion regarding the appraisal is material to his claim that

the loan exceeds the constitutional limit for a foreclosure eligible loan. See Tex. Const. art. XVI,

§ 50(a)(6)(B) (limiting the amount of foreclosure eligible debt on a homestead to 80 percent of

the fair market value of the homestead on the date the extension of credit is made). Although

Melton’s declaration may reflect his changing beliefs, the fact that it does so without offering an

explanation renders it susceptible to the district court’s conclusion that it is a sham affidavit

executed to create a fact issue regarding the property’s value. See Lujan, 555 S.W.3d at 88

(stating that the trial court does not abuse its discretion by concluding no genuine issue of fact

exists when an affidavit is executed after a deposition and there is a clear contradiction on a

material point without explanation, and noting that the rule’s application requires a case-specific

inquiry). On this record, we conclude that the district court did not abuse its discretion in

excluding Melton’s declaration.


       Expert declaration

                 Melton included in his response to Appellees’ summary-judgment motion a

declaration from Philip McCormick, an appraiser. Appellees objected to the use of the declaration

on summary judgment, asserting that they did not have an opportunity to depose McCormick

before moving for summary judgment, that McCormick’s declaration did not contain an expert

opinion of the property’s value, and that Melton was contractually estopped from challenging

the appraisal.

                 In response to Appellees’ objection, the district court excluded McCormick’s

declaration for purposes of summary judgment. We review rulings on the admission or exclusion


                                                  7
of evidence for abuse of discretion. Beck v. Law Offices of Edwin J. (Ted) Terry, Jr., P.C.,

284 S.W.3d 416, 442 (Tex. App.—Austin 2009, no pet.) (citing City of Brownsville v. Alvarado,

897 S.W.2d 750, 753 (Tex. 1995)). We agree that Melton is contractually estopped from

challenging the appraisal. Estoppel by contract is a form of quasi-estoppel based on the idea that

a party to a contract cannot, to the prejudice of another, take a position inconsistent with a

contract’s provisions. Freezia v. IS Storage Venture, LLC, 474 S.W.3d 379, 387 (Tex. App.—

Houston [14th Dist.] 2015, no pet.); accord Johnson v. Structured Asset Servs., 148 S.W.3d 711,

721-22 (Tex. App.—Dallas 2004, no pet.); see also Albright v. Rhea & Sons Enters., No. 03-15-

00496-CV, 2016 Tex. App. LEXIS 11296 at *5 (Tex. App.—Austin Oct. 19, 2016, no pet.)

(mem. op.) (describing estoppel by contract). The rule of estoppel by contract is another way of

saying that a party is bound by the terms of his or her contract. Johnson, 148 S.W.3d at 722; see

Lozano v. Ocwen Fed. Bank, FSB, 489 F.3d 636, 641 (5th Cir. 2007) (applying Texas law to find

that a party was estopped from taking a position contrary to a position taken in forbearance

agreements). As part of his loan agreement, Melton signed the Acknowledgment of Value,

affirming the property’s $300,000 value. He further agreed, by signing a Texas Home Equity

Affidavit and Agreement (Home Equity Affidavit), that the $223,648 loan did not exceed 80% of

the fair market value of the property at the time the loan was made. Having confirmed the

property’s value by signing the loan agreement, Melton is now estopped from taking a contrary

position. We conclude the district court did not abuse its discretion in excluding McCormick’s

affidavit and we therefore overrule Melton’s first issue on appeal.




                                                 8
The District Court’s Ruling Against Melton and Grant of Appellees’ Summary Judgment

               In his second and third issues, Melton complains in twenty-four sub-issues that

the district court erred in granting a take-nothing judgment against Melton and granting summary

judgment in favor of Appellees. Because these issues are intertwined and nearly all depend on

whether the loan complied with the requirements of Article XVI, section 50, of the Texas

Constitution, we address them together.


       Alleged Constitutional Defects under Article XVI, section 50

               In Texas, both as a state and during its days as a republic, the homestead has been

“protected from forced sale, not merely by statute as in most states, but by the Constitution.”

Finance Comm’n v. Norwood, 418 S.W.3d 566, 570 & n.8 (Tex. 2013) (citing Tex. Const.

art. XVI, § 50 (1876); Tex. Const. art. XII, § 15 (1869); Tex. Const. art. VII, § 22 (1866);

Tex. Const. art. VII, § 22 (1861); Tex. Const. art. VII, § 22 (1845)). Currently, “section 50 of

the constitution protects the homestead from foreclosure for the payment of debts subject to

eight exceptions, one of which covers only those home-equity loans that contain a litany of

exacting terms and conditions set forth in the constitution.” Garofolo v. Ocwen Loan Servicing,

497 S.W.3d 474 (Tex. 2016); see Tex. Const. art. XVI, § 50(a)(6)(A)-(Q); Stringer v. Cendant

Mortg. Corp., 23 S.W.3d 353, 354 (Tex. 2000). As a result, if Melton’s loan failed to comply

with section 50’s provisions, the Texas Constitution would shield Melton’s homestead from

forced sale.


       Loan Exceeding 80% of Fair Market Value

               Melton first complains that there is a genuine issue of material fact as to whether

the loan exceeded 80% of the fair market value of the homestead on the date of closing.


                                                9
Section 50(a)(6)(B) allows foreclosure on an extension of credit only if the loan “is of a principal

amount that when added to the aggregate total of the outstanding principal balances of all other

indebtedness secured by valid encumbrances of record against the homestead does not exceed

80 percent of the fair market value of the homestead on the date the extension of credit is made.”

Tex. Const. art. XVI, § 50(a)(6)(B). Prior to closing, Melton received an appraisal listing the value

of his leasehold as $300,000. For a property with a value of $300,000, the maximum allowable

amount of debt for a foreclosure eligible home equity loan on a homestead would be $240,000;

the $223,648 loan to Melton would comply. But Melton argues that the appraisal was wrong,

and asserts that in providing his declaration and the declaration of McCormick, both of which

were excluded from evidence in the district court, he created a fact issue as to the property’s

value, even though McCormick did not perform a comparative market analysis and even though

Melton previously signed the Acknowledgment of Value acknowledging that “on the date the

extension of credit is made, the fair market value of the Homestead Property is $300,000.” See

id. § 50(a)(6)(Q)(ix), (h) (lender may rely conclusively on an acknowledgment of fair market

value if certain conditions are met). Citing the testimony of Colonial’s corporate representative,

Melton also argues that the loan failed to take into account an existing encumbrance of about

$70,000. In her testimony, the representative explained that Melton had an existing $70,000 lien

on the homestead that would be paid off as part of the refinancing process. In other words, the

lender would pay off the $70,000 and the remaining outstanding debt against the homestead

would be the $223,648 loan. Thus, the $70,000 did not count toward the constitution’s 80% cap,

and the loan complied with section 50(a)(6)(B).




                                                 10
       Personal Liability for a Home Equity Loan

               Melton alleges that there is a genuine issue of material fact as to whether he was

personally liable for the loan, in contravention of Article XVI, section 50(a)(6)(C). See Tex.

Const. art. XVI § 50(a)(6)(C) (a loan is foreclosure eligible only if it is made “without recourse

for personal liability against each owner. . . .”). Without citing legal authority, Melton alleges

that Appellees’ reporting his failure to repay the loan to credit agencies as “personal credit”

provides evidence that he is personally liable for the loan. Generally, a nonrecourse note has the

effect of making the note payable out of a particular fund or source, namely, the proceeds of the

sale of the collateral securing the note, rather than having the maker of the note personally

guarantee repayment. Patton v. Porterfield, 411 S.W.3d 147, 157 (Tex. App.—Dallas 2013, pet.

denied). Appellees have not wavered from the position that Melton’s leasehold is the collateral

securing the lien. Additionally, the provisions of the loan documents contemplate that the

leasehold serves as collateral for the loan. Under the circumstances, we cannot agree that

reporting delinquent payments to a credit agency is equivalent to averring that a person is

exposed to personal liability.


       Unconstitutional Prepayment Penalty

               Melton argues that there is a genuine issue of material fact as to whether the

loan includes an unconstitutional penalty. To be foreclosure eligible, a loan must be “payable in

advance without penalty or other charge.” Tex. Const. art. XVI, § 50(a)(6)(G). Melton argues

that the Note’s language that the Note holder may apply a prepayment to the “accrued and unpaid

interest on the Prepayment amount” constitutes a prepayment penalty. Melton acknowledges that

paying “[a]ccrued interest would not be a penalty,” but argues that “unpaid interest on the



                                               11
prepayment amount (the principal) would be a penalty.” Melton is correct that construing the

Note to mean that a borrower would have to pay interest not yet accrued in making a prepayment

might run afoul of the constitution’s protection for paying off a loan in advance. Here, however,

the Note refers to “accrued and unpaid interest”—interest that is already owed but not yet paid,

as the amount to which a prepayment can be applied before applying the remainder to principal.

As such, this is not an unconstitutional penalty.


       Repayment of Unsecured Debts

               Melton contends that there is a genuine issue of material fact as to whether the

loan complied with Article XVI, section 50(a)(6)(Q)(i). A foreclosure eligible loan may not require

the owner of the homestead “to apply the proceeds of the extension of credit to repay another

debt except debt secured by the homestead or debt to another lender.” Id., § 50(a)(6)(Q)(i)

(emphasis added). Melton argues that Appellees required him to pay off third-party debt2 and

cites Box v. First State Bank, 340 B.R. 782, 786-88 (S.D. Tex. 2006), to support his position.

Box concluded that a lender violated section 50(a)(6)(Q)(i) by requiring the borrowers to use


       2
           Melton also complains that this requirement, and the requirement that he sign an
Acknowledgment of Value, should be unenforceable because the loan documents were all
unconscionable contracts of adhesion. Whether a contract is unconscionable is a question of law
for the court to decide. Kendziorski v. Saunders, 191 S.W.3d 395, 406 (Tex. App.—Austin 2006,
no pet.). The basic test for unconscionability is whether, given the parties’ general commercial
background and the commercial needs of the particular trade or case, the clause involved is so
one-sided that it is unconscionable under the circumstances existing when the parties made the
contract. In re FirstMerit Bank, N.A., 52 S.W.3d 749, 757 (Tex. 2001). Melton alleges he had
no ability to negotiate the terms of the loan, which the record shows he sought out, applied for,
and closed on in order to refinance the existing lien on his homestead and to pay off consumer
debt. However, Melton identifies no evidence indicating unconscionability. See In re Oakwood
Mobile Homes, Inc., 987 S.W.2d 571, 574 (Tex. 1999) (per curiam) (orig. proceeding) (“adhesion
contracts are not automatically unconscionable or void”). We conclude that requiring Melton to
pay off third-party debt and sign an Acknowledgment of Value in compliance with the Texas
Constitution is not unconscionable.
                                                    12
proceeds of a home equity loan to repay unsecured debt to that same lender. In this case, Melton

argues he was required to repay debts to third-party lenders, and he identifies about $138,000 in

credit card and car loan debt that he paid off with the loan. Melton’s argument is unavailing

because the loan was used to pay non-homestead debts to lenders other than Colonial. “Section

50(a)(6) allows a home-equity lender to require the borrower to use loan proceeds to pay: (1) debts

secured by the homestead; and (2) non-homestead debts to third-party creditors.” Stringer,

23 S.W.3d at 356.


       Executed Copies of Documents Signed at Closing

               Melton argues that Appellees’ summary judgment should be overturned because

he produced evidence that, in violation of Article XVI, section 50(a)(6)(Q)(v), he did not receive

copies of all required documents at closing. A foreclosure eligible loan must be “made on the

condition that . . . at the time the extension of credit is made, the owner of the homestead shall

receive a copy of the final loan application and all executed documents signed by the owner at

closing related to the extension of credit.” Tex. Const. art. XVI, § 50(a)(6)(Q)(v). Although he

received copies of the documents he signed at closing, he alleges he received copies without his

or the lender’s signatures and that this violated the constitution. Appellees argue that Melton

signed documents reflecting that he received copies of the documents he signed at closing and

they cite Pelt v. U.S. Bank Trust National Association, 359 F.3d 764, 768-69 (5th Cir. 2004), for

the proposition that the constitution does not require copies of executed documents to be provided.

We disagree. Pelt determined that the plain language of the constitution required the borrower

to receive copies of the documents the borrower signed but did not require those copies to

be executed by the parties. In other words, the Pelt court determined that copies with blank


                                                13
signature lines sufficed to satisfy section 50(a)(6)(Q)(v). When Pelt was decided, however,

section 50(a)(6)(Q)(v) required that “the lender, at the time the extension of credit is made,

provide the owner of the homestead a copy of all documents signed by the owner related to the

extension of credit.” Tex. Const. art. XVI, § 50(a)(6)(Q)(v) (amended 2007). After Pelt issued,

section 50(a)(6)(Q)(v) was amended to expressly require that the borrower receive copies of

executed documents. The documents Melton signed at closing do not affirm that the copies he

received were executed, and in any event, Appellees admit that at least the Acknowledgment

of Value was not signed by Colonial on the date of closing.             See Tex. Const. art. XVI,

§ 50(a)(6)(Q)(ix) (requiring both the lender and the owner of the homestead to “sign a written

acknowledgment as to the fair market value of the homestead property on the date the extension

of credit is made”). Instead, both parties agree it was signed within four weeks of closing.

Thus, Colonial did not initially comply with section 50(a)(6)(Q)(v). However, the constitution

provides a series of cure provisions in anticipation of errors in closing these home equity loans.

Id. § 50(a)(6)(Q)(x)-(xi). In the event of a failure to provide executed documents or a signed

acknowledgment of fair market value:


       the lender or any holder of the note for the extension of credit shall forfeit all
       principal and interest of the extension of credit if the lender or holder fails to
       comply with the lender’s or holder’s obligations under the extension of credit and
       fails to correct the failure to comply not later than the 60th day after the date the
       lender or holder is notified by the borrower of the lender’s failure to comply by . . .

               (d) delivering the required documents to the borrower if the lender
               fails to comply with Subparagraph (v) of this paragraph or
               obtaining the appropriate signatures if the lender fails to comply
               with Subparagraph (ix) of this paragraph.


Id. § 50(a)(6)(Q)(x)(d). Under section 50(a)(6)(Q)(x)(d), Appellees had 60 days to provide copies

of the executed documents and to sign the Acknowledgment of Value once Melton notified them

                                                 14
of the constitutional defect. Melton does not identify any documents aside from the Assignment

of Value that required a signature from Colonial but were not signed. The record shows that

Melton received signed copies of the documents signed by him and it contains a copy of the

Acknowledgment of Value signed both by Melton and a representative for Colonial, which

the parties agree in their briefing was executed within four weeks of closing.             Under the

circumstances, the evidence conclusively shows that although Colonial initially failed to comply

with the constitution’s requirements, Colonial complied with the cure provisions found in section

50(a)(6)(Q)(x)(d) and thereby became compliant.


       Melton’s Claims Against Appellees

               Having determined that Appellees were entitled to judgment as a matter of law

and that Melton did not raise a genuine issue of material fact on these constitutional issues, we

also overrule Melton’s claim that the district court erred in rendering a take-nothing judgment

against him based on alleged failure to satisfy these constitutional requirements. Similarly, we

overrule Melton’s claims that (1) Appellees violated the Texas Debt Collection Act because their

affirmative representation that the loan is foreclosure eligible is false; (2) the district court erred

in holding that Colonial’s lien and its right to foreclose are valid; (3) Colonial should be

considered to have “unclean hands”; (4) Appellees committed fraud in misrepresenting that the

loan did not have a prepayment penalty; and (5) Appellees committed fraud by misrepresenting

the fair market value of the property and misrepresenting that the loan proceeds had to be applied

to another debt not secured by the property because these claims are all based on the alleged

constitutional violations that we overruled above. Because Melton has not prevailed on these




                                                  15
claims, we need not address Melton’s claims seeking forfeiture, declaratory relief, and an

accounting. We overrule Melton’s second and third issues on appeal.


Attorney’s Fees

               In his fourth issue, Melton asserts that the district court lacked plenary power to

award attorney’s fees or to issue the amended final judgment. Melton asserts that the summary

judgment granted on February 20, 2018, as to all issues except attorney’s fees was the final

judgment. To the contrary, the remaining issue of attorney’s fees rendered the February 20, 2018

judgment interlocutory. See McNally v. Guevara, 52 S.W.3d 195, 196 (Tex. 2001) (holding a

judgment that did not dispose of attorney’s fees was not an appealable judgment). “A judgment

is final for purposes of appeal if it disposes of all pending parties and claims in the record, except

as necessary to carry out the decree.” Lehmann v. Har-Con Corp., 39 S.W.3d 191, 195 (Tex.

2001). Although courts presume that a judgment following a trial on the merits is final, “there

is no such presumption of finality following a summary judgment or default judgment.” In re

Burlington Coat Factory Warehouse of McAllen, Inc., 167 S.W.3d 827, 829 (Tex. 2005) (orig.

proceeding) (citing Lehmann, 39 S.W.3d at 199-200). “[W]hen there has not been a conventional

trial on the merits, an order or judgment is not final for purposes of appeal unless it actually

disposes of every pending claim and party or unless it clearly and unequivocally states that it

finally disposes of all claims and all parties.” Lehmann, 39 S.W.3d at 205. As a result, the

district court’s plenary power did not expire before it awarded attorney’s fees and issued the

amended final judgment.

               Melton asserts in the alternative that if the district court had power to render

judgment on attorney’s fees and to issue an amended final judgment, we should nonetheless


                                                 16
reverse because Melton was entitled to a jury trial on the amount of the fees and because

Appellees are “not entitled to any attorney’s fees prior to February 22, 2017,” when this Court

remanded the case to the district court in light of Wood. In response to Appellees’ motion for

summary judgment on attorney’s fees, the district court awarded $56,025.50 in attorney’s fees to

Appellees for defending against Melton’s claims under the Uniform Declaratory Judgment Act

and $10,180 to Colonial pursuant to the language of the Note allowing recovery of reasonable

attorney’s fees. See Tex. Civ. Prac. & Rem. Code § 37.009 (“In any proceeding under this chapter,

the court may award costs and reasonable and necessary attorney’s fees as are equitable and

just.”). An attorney’s affidavit can sufficiently establish reasonable attorney’s fees on motion for

summary judgment. American 10-Minute Oil Change, Inc. v. Metropolitan Nat’l Bank-Farmers

Branch, 783 S.W.2d 598, 602 (Tex. App.—Dallas 1989, no writ) (citing Querner Truck Lines v.

Alta Verde Indus., 747 S.W.2d 464, 468 (Tex. App.—San Antonio 1988, no writ); Bado Equip.

Co. v. Ryder Truck Lines, Inc., 612 S.W.2d 81, 83 (Tex. App.—Houston [14th Dist.] 1981,

writ ref’d n.r.e.), disapproved of on other grounds by McConnell v. Southside Indep. Sch. Dist.,

858 S.W.2d 337 (Tex. 1993)). The attorney for the nonmovant may file an affidavit contesting

the reasonableness of the movant’s attorney’s affidavit in support of attorney’s fees, thus creating

a fact issue. Id. However, Melton did not do so here. Instead he presented the argument that the

amount awarded for attorney’s fees incurred before February 22, 2017, when this Court

remanded the case to the district court, should not have been included in the fee award. It is

undisputed that the amount of fees awarded by the district court included fees for preparing for

the first appeal to this Court, where Appellees were not the prevailing party. See Schlueter v.

Schlueter, 975 S.W.2d 584, 590 (Tex. 1998) (“a party should not be penalized for taking a

successful appeal”). Thus, there is a genuine issue of material fact as to whether the amount of

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attorney’s fees awarded is reasonable. We will therefore remand the issue of attorney’s fees for a

determination of the reasonable amount of attorney’s fees. See Hardman v. Dault, 2 S.W.3d

378, 381-82 (Tex. App.—San Antonio 1999, no pet.) (remanding the case to the trial court for a

jury trial on attorney’s fees after the trial court granted a partial motion for summary judgment

and held a bench trial on attorney’s fees). We sustain Melton’s fourth issue on appeal.


                                        CONCLUSION

               We affirm the district court’s judgment as to Melton’s first three issues on appeal.

Having sustained Melton’s fourth issue, we reverse the district court’s award of attorney’s fees

and remand the case for a new trial on attorney’s fees.



                                             __________________________________________
                                             Gisela D. Triana, Justice

Before Justices Goodwin, Baker, and Triana

Affirmed in Part; Reversed and Remanded in Part

Filed: July 31, 2019




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