                                    COURT OF APPEALS
                                 EIGHTH DISTRICT OF TEXAS
                                      EL PASO, TEXAS

 BONNIE SUE ROBERTS IN HER                       §
 CAPACITY AS INDEPENDENT                                          No. 08-12-00113-CV
 EXECUTRIX OF THE ESTATE OF                      §
 CHARLOTTE ROBERTS, DECEASED,                                       Appeal from the
                                                 §
                              Appellant,                      Probate Court Number Two
                                                 §
 v.                                                             of El Paso County, Texas
                                                 §
 WELLS FARGO BANK, N.A.,                                          (TC# 2010-P00420)
                                                  §
                              Appellee.

                                           OPINION

       Appellant, Bonnie Sue Roberts, appeals the trial court’s partial summary judgment in favor

of Appellee, Wells Fargo Bank, N.A. (Wells Fargo). We affirm.

                                          BACKGROUND

       In 1992, Roberts and her mother, Charlotte Roberts, obtained a loan for the purchase of a

home in El Paso. The loan was secured by a deed of trust. Wells Fargo subsequently became the

owner and holder of the loan and the deed of trust. Several years later, Charlotte became disabled

and applied for a HUD loan, which required that the property be placed in Charlotte’s name.

       In May 2009, Charlotte died and Roberts became the sole interest holder in the property by

virtue of Charlotte’s will. Roberts had left her job to care for Charlotte during her illness but was

not rehired by her employer after Charlotte’s death. After September 2009, Roberts was unable
to refinance or make payments on the mortgage.

        A year later, in September 2010, Roberts discovered hail damage to the roof of the home

and reported it to her insurance company. The insurance company issued a check payable to

Charlotte and Wells Fargo. On or about October 20, 2010, Roberts took the check to the Wells

Fargo mortgage office, where a receptionist informed Roberts that monies would be distributed to

the roofing contractor for repairs after she submitted the check and appropriate documents to

Wells Fargo.1 After Roberts submitted the documents and check as directed, a Wells Fargo

employee informed Roberts that Wells Fargo would be applying the insurance proceeds to the

delinquency on the mortgage rather than toward the repair of the roof. Roberts’ roof was never

repaired.

        Roberts brought suit against Wells Fargo for conversion, breach of contract, and fraud.2

Wells Fargo sought partial summary judgment on the claims related to the insurance proceeds and

argued that its treatment of the insurance proceeds did not constitute conversion, breach of

contract, or fraud but, rather, comported with the terms of the deed of trust which provides:

                Fire, Flood and Other Hazard Insurance. Borrower shall insure all
        improvements on the Property[.] . . . The insurance policies and any renewals
        shall be held by Lender and shall include loss payable clauses in favor of, and in a
        form acceptable to, Lender.
                In the event of loss, . . . . [a]ll or any part of the insurance proceeds may be
        applied by Lender, at its option, either (a) to the reduction of the indebtedness under
        the Note and this Security Instrument, first to any delinquent amounts applied in the
        order in paragraph 3, and then to prepayment of principal, or (b) to the restoration
        or repair of the damaged Property.

        Roberts filed her response to the summary judgment motion and, on October 11, 2011, the

trial court heard the motion.

1
 Roberts had been named Executrix of Charlotte’s estate and had obtained letters testamentary.
2
 Roberts’ suit included a trespass cause of action against Wells Fargo and Medina Property Services, L.L.C., which is
not part of this appeal.
                                                         2
           Two days later, on October 13, 2011, the trial court issued a letter in which it granted the

partial summary judgment and directed Wells Fargo’s counsel to prepare an order and submit it for

the court’s approval. The trial court’s letter was faxed to the parties’ counsel at 10:10 a.m. on the

morning of October 13, 2011. On October 14, 2011, Roberts filed a nonsuit at 10:05 a.m. and

sought an order of dismissal without prejudice. At 11:28 a.m. that same morning, the trial court

filed its letter ruling with the clerk. Later that day, Wells Fargo issued to both the trial court and

Roberts’ counsel a proposed order of dismissal pursuant to nonsuit accompanied by a letter in

which it argued that because Roberts’ claims had been adjudicated by summary judgment, the trial

court was required to dismiss those claims with prejudice.3 On December 1, 2011, Roberts’

claims subject to the trial court’s October 13, 2011, pronouncement were dismissed with prejudice

and the remaining claims without prejudice.

                                                   DISCUSSION

           Roberts presents two issues for our review. In Issue One, Roberts contends that partial

summary judgment was not rendered below because the trial court’s “ex parte” letter in which it

declared the partial summary judgment: (1) did not constitute a “judicial pronouncement” as

required by the Texas Supreme Court in Hyundai Motor Company, and (2) cannot constitute

rendition of judgment because the letter was not filed with the clerk until after Roberts filed her

nonsuit and it directed counsel to prepare a draft order. See Hyundai Motor Co. v. Alvarado, 892

S.W.2d 853, 855 (Tex. 1995). We disagree.

           The Texas Supreme Court has declared that a judgment is rendered when the trial court’s

decision “is officially announced orally in open court, by memorandum filed with the clerk, or

otherwise announced publicly.” Garza v. Tex. Alcoholic Bev. Comm’n, 89 S.W.3d 1, 6 (Tex.
3
    The letter was filed with the clerk on December 1, 2011.
                                                           3
2002); see also Keim v. Anderson, 943 S.W.2d 938, 942 (Tex.App. – El Paso 1997, no pet.). A

trial court’s letter to the parties setting out its findings and requesting counsel to prepare a

judgment has been held to be a memorandum that can serve as the rendition of judgment if it is

filed with the clerk. See Abarca v. Roadstar Corp. of Am., 647 S.W.2d 327, 327-28 (Tex.App. –

Corpus Christi 1982, no writ).

       The question of whether judgment has been rendered is distinct from the issue of whether

the form of the judgment is final. See Greene v. State, 324 S.W.3d 276, 282 (Tex.App. – Austin

2010, no pet.) (issue of whether the form of judgment is final for appellate timetable purposes is

distinct from question of whether judgment was actually rendered). Rendition of judgment is not

synonymous with the signing of a written judgment. Id. Once judgment is rendered, the

subsequent acts of drafting and signing a written form of judgment constitute merely “preparatory,

administrative acts that would authenticate the record of the court’s rendition.” See TEX. R. CIV.

P. 306a(1); Burns v. Bishop, 48 S.W.3d 459, 465 (Tex.App. – Houston [14th Dist.] 2001, no pet.)

(emphasis in original).

       Rule 162 permits a plaintiff to nonsuit at any time before introducing all of her evidence

other than rebuttal evidence. TEX. R. CIV. P. 162; Epps v. Fowler, 351 S.W.3d 862, 868 (Tex.

2011). However, under the rule, the dismissal shall not prejudice an adverse party’s right to be

heard on a pending claim for affirmative relief.     TEX. R. CIV. P. 162; In re Greater Houston

Orthopaedic Specialists, Inc., 295 S.W.3d 323, 324 (Tex. 2009). As long as the defendant has not

made a claim for affirmative relief, the plaintiff’s right to take a nonsuit is unqualified and

absolute. Id. “Granting a nonsuit is a ministerial act, and a plaintiff’s right to a nonsuit exists

from the moment a written motion is filed or an oral motion is made in open court, unless the


                                                4
defendant has, prior to that time, sought affirmative relief.” Id. at 325 (quoting Greenberg v.

Brookshire, 640 S.W.2d 870, 872 (Tex. 1982)).

       When nonsuit is filed after an unfavorable partial summary judgment has been entered

against the claimant, the nonsuit is with prejudice as to those claims of which the judgment has

disposed. Hyundai Motor Co. v. Alvarado, 892 S.W.2d 853, 854 (Tex. 1995); see also Epps, 351

S.W.3d at 868 n.7. This concept promotes judicial efficiency, protects parties from multiple

lawsuits, and prevents inconsistent judgments through the preclusion of matters that have already

been decided or which could have been litigated in a prior suit. See In re Team Rocket, L.P., 256

S.W.3d 257, 260 (Tex. 2008); see also Epps, 351 S.W.3d at 870 (recognizing that nonsuit filed for

the purpose of circumventing unfavorable legal restrictions or rulings are disfavored); Yazdchi v.

Bank One, Tex., N.A., 177 S.W.3d 399, 408 (Tex.App. – Houston [1st Dist.] 2005, pet. denied) (a

party may not escape the effects of an unfavorable ruling on the merits by taking a nonsuit of its

claims).

       We conclude the trial court rendered its partial summary judgment on October 13, 2011,

when the trial court officially announced its decision by memorandum, which was filed with the

clerk on the following day. Garza, 89 S.W.3d at 6; see also Keim v. Anderson, 943 S.W.2d 938,

942 (Tex.App. – El Paso 1997, no pet.); Rhima v. White, 829 S.W.2d 909, 913 (Tex.App. – Fort

Worth 1992, writ denied) (decision of trial court announced by letter directed to the parties

constitutes rendition of judgment when no announcement is made in open court). Because the

trial court rendered partial summary judgment in favor of Wells Fargo before Roberts filed her

nonsuit, the trial court properly dismissed with prejudice Roberts’ claims adjudicated by the

summary judgment. Issue One is overruled.


                                                5
       In Issue Two, Roberts contends the trial court erred in granting partial summary judgment

because a genuine issue of material fact exists regarding whether Wells Fargo timely elected under

the deed of trust to apply the insurance proceeds to the reduction of Roberts’ indebtedness rather

than repair the roof of the home pursuant to the deed of trust.

       We first consider whether Roberts’ second issue is properly before us. In her pleadings,

Roberts did not raise the timeliness of Wells Fargo’s election regarding application of the

insurance proceeds as a claim, as an element of any cause of action, or as a genuine issue of

material fact. In her response to Wells Fargo’s summary judgment motion, Roberts asserted that

the issue of whether Wells Fargo exercised its option within a reasonable amount of time precludes

summary judgment.

       A defendant is “not required to guess what unpleaded claims might apply and negate

them.” Via Net v. TIG Ins. Co., 211 S.W.3d 310, 313 (Tex. 2006). However, when a nonmovant

asserts a claim for the first time in its summary judgment response, the movant has two options:

(1) object that the claim was not pleaded, or (2) respond on the merits and try the issue by consent.

Id.; see Roark v. Stallworth Oil and Gas, Inc., 813 S.W.2d 492, 495 (Tex. 1991) (“The party who

allows an issue to be tried by consent and who fails to raise the lack of a pleading before

submission of the case cannot later raise the pleading deficiency for the first time on appeal.”).

When the latter course is chosen, the claim is placed squarely before the trial and appellate courts.

Via Net, 211 S.W.3d at 313.

       The record before us fails to demonstrate that Wells Fargo ever objected to Roberts’

unpleaded timeliness-of-election claim. Therefore, we find that Wells Fargo has chosen to try

this claim by consent. Id.


                                                 6
                                        Standard of Review

         We review a trial court’s decision to grant a motion for summary judgment de novo.

Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005); E.B.S. Enterprises, Inc. v.

City of El Paso, 347 S.W.3d 404, 407 (Tex.App. – El Paso 2011, pet. denied). Summary

judgment is appropriate when there is no genuine issue as to any material fact and judgment should

be granted in favor of the movant as a matter of law. TEX. R. CIV. P. 166a(c); E.B.S. Enterprises,

Inc., 347 S.W.3d at 407; Melendez v. Padilla, 304 S.W.3d 850, 852 (Tex. App. – El Paso 2010, no

pet.).

         A fact question exists when the summary judgment record contains inconsistent or

conflicting summary judgment proof. Salazar v. Ramos, 361 S.W.3d 739, 746 (Tex.App. – El

Paso 2012, pet. denied). In determining whether there are disputed issues of material fact, we

take as true all evidence favorable to the nonmovant and indulge every reasonable inference in the

nonmovant’s favor. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985); E.B.S.

Enterprises, Inc., 347 S.W.3d at 407.

         When the trial court does not state the basis for granting summary judgment, the appealing

party must negate on appeal all possible grounds that could form the basis of that ruling. See

Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995); State Farm Fire & Cas. Co. v. S.S.

& G.W., 858 S.W.2d 374, 381 (Tex. 1993); Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989);

Melendez v. Padilla, 304 S.W.3d 850, 853 (Tex.App. – El Paso 2010, no pet.). If the appealing

party fails to negate each ground on which the trial court may have rendered summary judgment,

we must uphold the summary judgment. See Carr, 776 S.W.2d at 569; Melendez, 304 S.W.3d at

853-54.


                                                 7
                                 Summary Judgment Evidence

       Wells Fargo’s summary judgment evidence included Roberts’ testimony from an

injunction hearing. At the hearing, Roberts testified that she went to a Wells Fargo Home

Mortgage office and spoke with the receptionist, Lorraine, and a manager who spoke by phone

with their customer service department regarding the processing of the insurance proceeds check.

Roberts was advised to submit the check and other necessary papers and payment would be

disbursed in three payments to the roofing contractor.       Roberts called Wells Fargo after

submitting the documents, confirmed that Wells Fargo had received her documents, and was then

advised that the funds were being held and would not be released. After contacting the mortgage

department as advised, Roberts provided updated financial and income information, including her

unemployment benefits, and was advised that she was ineligible for repayment options.

According to Roberts, Wells Fargo advised her to call the “loss draft department” and have the

insurance money sent directly to the contractor. The “loss draft department” advised Roberts that

no funds would be distributed to Roberts or her contractor and informed her that the funds being

held would probably be applied to her delinquent payments. Roberts later received a letter from

Wells Fargo that assumed that funds had been paid to a roofing contractor. Acknowledging that

she was delinquent on her house payments, that the mortgage was in default, that she had tried

unsuccessfully to refinance her home, and that her notarized signature was on the deed of trust

containing the election-of-options language, Roberts testified that Wells Fargo had determined

that because her payments had been in arrears, it would apply the insurance proceeds to her debt.

According to Roberts, at the time of the injunction hearing in June 2011, she owed approximately

$85,000 on the home.


                                               8
       In support of her response to the motion for partial summary judgment, Roberts offered a

portion of the deposition testimony of Wells Fargo’s default litigation specialist and business

records custodian, Mary Ellen Brust. In her deposition, Brust noted that Wells Fargo has different

divisions, including banks and home mortgage servicing centers. Brust noted that the first

individuals with whom Roberts made contact regarding the insurance proceeds check work for

Wells Fargo’s bank division.      Brust confirmed that records showed its customer service

department had advised Lorraine Viscon, the person to whom Roberts had spoken about obtaining

payment for repair of the roof, that the normal procedure in such circumstances is that the

insurance check, the repair estimate, and the contractor’s bid are all submitted to Wells Fargo,

which deposits the funds, reviews the documents, and typically releases funds to the contractor in

three draws. Brust testified that its guidelines require that a mortgagor who is making a hazard

claim be informed that the insurance funds are deposited into an escrow account, and that Roberts

was so informed on October 22, 2010. However, Brust explained that when a loan is not current,

the Default Department is notified and the guidelines require that a mortgagor be actively repaying

before “the process can begin.”

       On October 26, 2010, Roberts had submitted all necessary documents to Wells Fargo.

The check endorsed by Roberts was received and subsequently sent to Wells Fargo’s property

preservation section and, because the property was already in foreclosure, the foreclosure

department was contacted. The foreclosure department directed that the funds be held. Brust

testified that Roberts’ loan met the criteria for default which barred Ms. Roberts from hiring

someone to perform repairs unless she had achieved a repayment status. According to Wells

Fargo records, when Roberts called on October 26, 2010, to have the funds released to her roofer,


                                                9
she was advised that because her account was delinquent, she needed to be placed on a repayment

plan. Brust agreed that its records showed that Roberts was unable to afford a repayment

agreement or other “retention” options.

       Brust acknowledged that records showed that Wells Fargo had contacted Roberts in

November 2010, and that Roberts had advised both that she had been unable to achieve a

repayment status and that Wells Fargo should contact her attorney. Brust was asked about a

follow-up letter issued on December 23, 2010, to Roberts regarding her claim for repairs. Brust

explained that the follow-up letter may have simply been a “next task” of a claim representative

and that it would have been normal to send a mortgagor such letter to determine whether repairs

had been completed. Wells Fargo records show that it received a deposit of $10,819.31 on

Roberts’ account on October 26, 2010.

                                              Analysis

       Roberts contends that Wells Fargo failed to timely elect to apply the insurance proceeds to

her indebtedness and that Wells Fargo’s follow-up letter to her in December 2010, in which it

inquired about the progress of the roof repairs, is additional evidence that Wells Fargo equivocated

about its electing its option regarding the insurance proceeds. Roberts argued that Wells Fargo

had failed to make a single, timely election regarding the application of the insurance proceeds as

required under the deed of trust.

       In Statewide Bank and SN Servicing Corp. v. Keith, 301 S.W.3d 776, 781-83 (Tex.App. –

Beaumont 2009, pet. abated), which involved a challenge to the factual sufficiency of the evidence

to support the jury’s verdict in favor of the mortgagor, the appellate court recognized that the short

time limits set forth in the Texas Insurance Code “demonstrate that parties to similar option


                                                 10
agreements reasonably expect the mortgagee to act to make a decision on utilizing the insurance

proceeds fairly quickly,” and held that a mortgagee’s seven-month delay after receiving insurance

proceeds and attempting to elect to repair property under a deed of trust supported the jury’s

conclusion that the mortgagee had failed to timely make an election under a deed of trust and had

breached its obligations thereunder. See Statewide Bank, 301 S.W.3d at 782, 784-85 (noting that

“time is of the essence” with respect to agreements that create options).

       Roberts was initially advised that Wells Fargo would distribute proceeds to a roofing

contractor and, four days later, because of the delinquency of Roberts’ loan payments, Wells Fargo

informed Roberts that the proceeds would not be released and would be kept in an account and

applied to the amounts due under the loan. Moreover, Roberts concedes in her brief that Wells

Fargo “changed its mind a few days later . . . .” We conclude that Wells Fargo’s four-day election

of its option under the deed of trust is not untimely.

       Moreover, we are persuaded by Wells Fargo’s contentions below and on appeal that it

could not have committed conversion, breach of contract, or fraud because it was contractually,

rightfully, and lawfully entitled to the insurance proceeds under the terms of the deed of trust and

had applied such proceeds consistent with the deed of trust.

       In English v. Fischer, 660 S.W.2d 521, 522-23 (Tex. 1983), a deed of trust which secured a

promissory note on a house and lot included a provision covering the disbursement of insurance

proceeds in the event of damage to the property. The deed of trust provided that the purchasers

“shall keep said property fully insured in some company or companies approved by the holder of

said indebtedness [seller], to whom the loss, if any, shall be payable and by whom the policy shall

be kept.” Id. When the house was partially destroyed by fire, the purchasers asked the seller to


                                                 11
endorse the insurance proceeds check to them to permit them to rebuild the house. Id. at 522.

The seller verbally agreed to endorse the check but later decided against that course of action. Id.

The Texas Supreme Court held that the parties specifically contracted for the disbursement of

proceeds of the fire insurance and that the seller was entitled to apply such proceeds to the

indebtedness and pay any remaining proceeds to the purchasers. Id. at 523.

       In Lewis v. Wells Fargo Home Mortg., Inc., 248 S.W.3d 828, 830-31 (Tex.App. –

Texarkana 2008, no pet.), a deed of trust provided that the mortgagor was to insure the premises,

that the insurance proceeds would be paid to Wells Fargo as mortgagee which, at its option could

apply the proceeds in whole or part to the reduction of indebtedness existing under the note or to

the restoration or repair of the damaged property. Id. at 830. The home burned down. Id. at

828. In that case, Wells Fargo opted to apply the insurance proceeds to the construction of a

house on the remaining foundation. Id. at 829. The mortgagor complained that Wells Fargo

improperly applied the insurance proceeds because it did not repair or restore the house. Id. at

831. In conducting its analysis, the Lewis court discussed the facts of Zidell v. John Hancock

Mut. Life Ins. Co., 539 S.W.2d 162 (Tex.Civ.App. – Dallas 1976, writ ref’d n.r.e.), wherein a

security instrument provided that loss proceeds would be paid to John Hancock which had the

option, among others, to apply those proceeds to the indebtedness of Zidell or to the restoration of

the property. Lewis, 248 S.W.3d at 830; Zidell, 539 S.W.2d at 165. The Zidell court, noting that

it knew of no public policy reason that would bar an agreement that permitted a mortgagee to apply

insurance proceeds to indebtedness, “even when the property has been restored at the mortgagor’s

expense,” held that John Hancock’s application of the insurance proceeds to the debt was proper.

Zidell, 539 S.W.2d at 165. The Lewis court recognized that the distinction between the facts in


                                                12
that case and those in Zidell was simply the election to apply the insurance proceeds either to the

restoration of the building or to the indebtedness of the mortgagor. Lewis, 248 S.W.3d at 830.

The Lewis court concluded that, “[the] principle involved is the same: the contract of the parties

authorized the mortgagee to make that election [and having] that contractual right, it is not the

prerogative of Lewis or this Court to require the mortgagee to apply the insurance proceeds to the

debt.” Id. at 830-31.

       Under the terms of the deed of trust, Wells Fargo was permitted to elect to apply the

insurance proceeds to the reduction of Roberts’ indebtedness with application made first to any

delinquent amounts and then to prepayment of principal. Because the trial court did not state its

basis for granting partial summary judgment, Roberts was required to negate all possible grounds

that could form the basis for the trial court’s partial summary judgment. Melendez, 304 S.W.3d at

853. Because she has failed to do so, and because there is no genuine issue of material fact, Issue

Two is overruled.

                                        CONCLUSION

       The trial court’s judgment is affirmed.



                                             GUADALUPE RIVERA, Justice
June 20, 2013

Before McClure, C.J., Rivera, and Rodriguez, JJ.




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