                                                                                     ACCEPTED
                                                                                13-15-00289-CV
                                                                THIRTEENTH COURT OF APPEALS
                                                                       CORPUS CHRISTI, TEXAS
                                                                          10/16/2015 6:57:57 PM
                                                                               Dorian E. Ramirez
                                                                                          CLERK

                   IN THE COURT OF APPEALS
       FOR THE THIRTEENTH JUDICIAL DISTRICT OF TEXAS
                       AT CORPUS CHRISTI            FILED IN
                                             13th COURT OF APPEALS
      ______________________________________________________
                                          CORPUS CHRISTI/EDINBURG, TEXAS
                                               10/16/2015 6:57:57 PM
                         No. 13-15-00289-CV      DORIAN E. RAMIREZ
                                                        Clerk
      _______________________________________________________

                           PAUL P. BLACK
                             Appellant,

                                  v.

                    FIRST COMMUNITY BANK
                             Appellee.
__________________________________________________________________

           On Appeal from Nueces County Court at Law #1
               Trial Court Cause No. 2011-CCV-62433-1
__________________________________________________________________

                         APPELLANT’S BRIEF

__________________________________________________________________

ANDY TAYLOR
State Bar No. 19727600
Andy Taylor & Associates, P.C.
2668 Highway 36S, #288
Brenham, Texas 77833
Telephone: (713) 222-1817
Facsimile: (713) 222-1855
ataylor@andytaylorlaw.com

COUNSEL FOR APPELLANT

            APPELLANT REQUESTS ORAL ARGUMENT


                                  1
               IDENTITY OF PARTIES AND COUNSEL

1.   Appellant:
     Paul P. Black

     Counsel for Appellant:
     ANDY TAYLOR & ASSOCIATES, P.C.
     Andy Taylor
     State Bar No. 19727600
     2668 Highway 36S, #288
     Brenham, Texas 77833
     Telephone: (713) 222-1817
     Facsimile: (713) 222-1855
     ataylor@andytaylorlaw.com

2.   Appellees:
     First Community Bank

     Counsel for Appellee:
     ANDERSON, LERHMAN, BARRE, MARAINST, LLP
     Denny Barre
     State Bar No. 01805280
     Gaslight Square
     1001 Third Street, Ste 1
     Corpus Christi, TX 78404
     Telephone: (361) 884-4981
     Facsimile: (361) 883-4079
     dbarre@albmlaw.com




                              2
                                          TABLE OF CONTENTS


Identity of Parties and Counsel............................................................................. 2

Table of Contents ....................................................................................................3

Index of Authorities ................................................................................................4

Statement of the Case .............................................................................................4

Issues Presented ......................................................................................................4

Statement of Facts ...................................................................................................5

Summary of the Argument ....................................................................................8

Argument and Authorities ....................................................................................9

Prayer ......................................................................................................................15

Certificate of Service .............................................................................................15

Certificate of Compliance ....................................................................................16

Appendix ................................................................................................... Attached




                                                              3
                                     INDEX OF AUTHORITIES

Authority                                                                                           Page

Custom Transit, L.P. v. Flatrolled Steel, Inc.,
     375 S.W.3d 337 (Tex. App. Houston 14th Dist. 2012) ............................11

Lucas v. Clark,
      347 S.W.3d 800, 803-04 (Tex.App.--Austin 2011, pet. denied)……..14

Marhaba Partners Ltd. P'ship v. Kindron Holdings, LLC,
    2015 Tex. App. LEXIS 805, 8-9
    (Tex. App. Houston 14th Dist. Jan. 29, 2015) ..........................................10

Moayedi v. Interstate 35/Chisam Rd., L.P.,
    438 S.W.3d 1, 4-5 (Tex. 2014) ....................................................................... 9

Taiwan Shrimp Farm Village Ass 'n v. U.S.A. Shrimp Farm Dev.,
915 S.W.2d 61, 71 (Tex. App. Corpus Christi 1996)……………………….12

                                STATEMENT OF THE CASE

Nature     of         underlying Suit for money allegedly due on a Promissory
proceeding:                      Note.

Action from which relief Judge Vargas of the Nueces County Court at
requested:               Law No. 1 granted Appellee’s No Evidence
                         and Traditional Motion for Summary
                         Judgment on April 1, 2015. (App. Tab 1).


                                      ISSUE PRESENTED

        Did the Trial Court err in granting summary judgment in favor of the

Appellee Bank where the Appellant Debtor/Owner of the collateral plead



                                                    4
and raised a genuine issue of material fact as to the fair market value of the

collateral?

                        STATEMENT OF FACTS

      Appellant Paul Black executed a promissory note ("Note #6272" or

the “Note”), deed of trust and modification agreement. CR 42-CR 57.

Appellee First Community Bank is the owner and holder of Note #6272.

To secure the debt created by this note, Appellant Black granted Appellee

a security interest in Lot One B (lB), Block One (1), MARSDEN PLACE, a

Subdivision of the City of Corpus Christi, Nueces County, Texas, as further

described in the deed of trust.

      Appellant Black thereafter defaulted in the payment of Note #6272.

Appellee Bank made demand for payment and gave notice of its intent to

sell the collateral at a foreclosure sale. CR 87-CR 90. Appellee Bank then

disposed of the collateral and applied the sales proceeds to the note. CR

40. At the foreclosure sale, Appellee Bank made a credit bid of $405,000.00,

which left a substantial deficiency remaining under the Note. Appellee

Bank then pursued Appellant Black for the alleged deficiency by filing the

lawsuit which is now the subject of this appeal.




                                      5
      In response to the deficiency suit, Appellant Black asserted a right to

an offset or credit on the basis that the fair market value of his property, at

the time of foreclosure, was in excess of the claimed deficiency. CR 254.

Appellant Black also filed a motion seeking a fair market value

determination. CR 158.

      Appellee Bank eventually filed a motion for summary judgment. CR

62. Appellant Black thereafter filed his response to Appellee’s motion for

summary judgment asserting a right to a credit or offset to Appellee Bank’s

alleged deficiency claim under Texas Property Code 51.003 (c). CR 158,

366. Appellant Black also submitted a sworn affidavit, as the owner of the

real property, that the fair market value was $1,155,000.00.               More

specifically, the affidavit contained the following statements:

      “In 2008 until the foreclosure in early 2012, I owned two
      neighboring lots (the subject lot was unimproved and the other
      was contained my homestead) on Ocean Drive in Corpus
      Christi, Texas. These lots were Marsden Place Block 1 Lot 1-B
      (the "1-B" lot) and Marsden Place Block 1 Lot 2-A. I purchased
      these lots for $850,000.00 and $2,030,000.00 respectively.

      The 1-B lot is an unimproved, vacant, residential lot on the bay
      side of Ocean Drive. At the time of the purchase of the 1-B lot, I
      learned that it was appraised by the bank for $850,000.00.

      During the time I lived on the property, I kept up with property
      values in the area and based upon such knowledge I believe the

                                      6
     fair market value of the 1-B lot was $1,155,000.00 as of the time
     of foreclosure.

     In 2011 (which became effective in 2012), I combined the 1-B lot
     with the 2-A lot which contained my homestead.

     Around the time of the foreclosure, the appraisal district
     removed the homestead exemption and separated the lots.
     After this split, lot 1-B was the same lot, with the same
     dimensions, and same location as before the split. The value
     was the same as before the split.

     At the time of the foreclosure lot 1-B was worth $1,155,000.
     However, the bank foreclosed on the Note and Deed of Trust
     and purchased it for a mere $405,000.00.”

CR 375 (“Affidavit of Paul Black”).

     Appellee Bank attempted to avoid Appellant Black’s response by

arguing two things. First, Appellee Bank argued that Appellant Black’s

prior attorney’s failure to respond and deny a request for admission on

how much was owed as a deficiency constituted a deemed admission.

Second, Appellee Bank argued that Appellant Black’s affidavit should be

ignored because his attorney had not designated Appellant Black as an

expert witness in response to propounded discovery requesting the

identification of experts.   In response, Appellant Black provided good

cause for why the request for admission should not be deemed against




                                      7
him, filed a denial to that particular request for admission, and asked that

any such deemed admission be stricken for the reasons explained therein.

     The Trial Court never entered any written orders on any of these

issues, but simply signed a final summary judgment without further

explanation.

                      SUMMARY OF ARGUMENT

     The Trial Court erred in granting summary judgment in favor of the

Appellee Bank where Appellant, who was the owner of the real property

that was the collateral for the Note, plead and raised a genuine issue of

material fact as to the fair market value of the collateral. The Trial Court

never entered a written order that Appellant Black’s affidavit should be

stricken, and never ordered that his attorney’s alleged failure to timely

respond and deny a request for admission was indeed an admission to be

deemed against him. Although Rule 198.2(c) provides that no court order

is required to deem a request for admission against a non-responder, there

must first be a court finding that there was indeed a failure to timely serve

a response. Where, as here, the evidence clearly demonstrated a fact issue

of when the discovery request was sent, and when it was due, coupled

with a denial of same and sworn evidence explaining the confusion


                                     8
surrounding the situation, the predicate finding of “not timely served”

within the meaning of Rule 198.2(c) was not proven as a matter of law. As

a result, a written order would have been required, but the Trial Court did

not enter one. Accordingly, Appellant’s affidavit raised a genuine issue of

material fact, and it was error for the Trial Court to grant summary

judgment in favor of Appellee Bank.         This case should therefore be

reversed remanded to the Trial Court for further proceedings.

                               ARGUMENT

                                 I.
          Appellee Bank Had No Incentive to Pay Market Value

      Texas courts widely view a bank's bid at a foreclosure sale with

suspicion. The Supreme Court in Moayedi v. Interstate 35/Chisam Rd., L.P.,

438 S.W.3d 1, 4-5 (Tex. 2014) made this clear:

      "When lenders are the sole bidders at a foreclosure sale, they
      can control the foreclosure sale price and by implication the
      deficiency judgment. There is little incentive for them to bid
      high when a low bid preserves the amount they might get in
      a judgment against the borrower. Thus, the nonjudicial
      foreclosure sale often does not directly represent what a buyer
      might pay in the market." (emphasis added)




                                      9
      Earlier this year the 14th Court of Appeals cited this same case in

Marhaba Partners Ltd. P'ship v. Kindron Holdings, LLC, 2015 Tex. App. LEXIS

805, 8-9 (Tex. App. Houston 14th Dist. Jan. 29, 2015), when it said:

      "The legislature created this mechanism in recognition that
      post-foreclosure deficiencies artificially can be inflated
      because ‘the nonjudicial foreclosure sale often does not
      directly represent what a buyer might pay in the market."’
      Moayedi, 438 S.W.3d at 5. When the lender is the sole bidder, it
      has little incentive to bid high." (emphasis added).

                                II.
     Appellee Bank's Acts Demonstrate Intent to Create Deficiency

      Appellant Black asked the Trial Court—and now asks this Honorable

Court--to take notice that this suit was filed before the non-judicial

foreclosure took place. CR 6, CR 96-CR 98.     The only way the bank could

have known, prior to conducting the foreclosure sale, that it could file a

lawsuit and pursue a deficiency claim is if it intended to create one. Thus,

the Court must look at the amount bid at the foreclosure sale with the

upmost suspicion. Indeed, it is obvious that the Appellee Bank, as the sole

bidder, had no reason to make a credit bid that was even close to fair

market value. That being the case, the Appellee Bank's $405,000.00 bid

reflects the Bank's attempt to preserve what it might get in a judgment

against Appellant Black.     As the Appellee Bank knew its intention to


                                      10
underbid even before it sold the property, its credit bid at the foreclosure

sale in no way reflects the market value of the property.

                                     III.
       Appellant Black Is Qualified As An Expert On His Own Property

        Although the Trial Court never ruled on the issue, Appellee Bank

argued that only an expert is allowed to value the property. CR 175-CR

178.     However, Texas courts recognize what is known as the “Property

Owner's Rule”.      In Custom Transit, L.P. v. Flatrolled Steel, Inc., 375 S.W.3d

337, 352 (Tex. App. Houston 14th Dist. 2012), the court examined the

Property Owner's Rule, holding as follows:

        "Custom Transit's speculation challenge to Bollman's testimony
        focuses on the Property Owner Rule, under which "a property
        owner is qualified to testify to the value of her property even
        if she is not an expert and would not be qualified to testify to
        the value of other property." Reid Road Mun. Util. Dist. No. 2 v.
        Speedy Stop Food Stores, Ltd., 337 S.W.3d 846, 852-53 (Tex. 2011)
        (citing Porras v. Craig, 675 S.W.2d 503, 504 (Tex. 1984)). "The
        rule is based on the presumption that an owner will be
        familiar with her own property and know its value." Speedy
        Stop, 337 S.W.3d at 853. The Texas Supreme Court has applied
        this principle to valuation of real property, see id ; the supreme
        court also has applied it to valuation of personal property. See
        Redman Homes, Inc. v. Ivy, 920 S.W.2d 664, 668-69 (Tex. 1996); see
        also Taiwan Shrimp Farm Village Ass 'n, Inc. v. U.S.A. Shrimp
        Farm Dev., Inc., 915 S.W.2d 61, 71 (Tex. App.-Corpus Christi
        1996, writ denied), cited with approval in Speedy Stop, 337
        S.W.3d at 853." (emphasis added).



                                       11
      In addition, the Corpus Christi Court of Appeals encountered this

issue in the case of Taiwan Shrimp Farm Village Ass 'n v. U.S.A. Shrimp Farm

Dev., 915 S.W.2d 61, 71 (Tex. App. Corpus Christi 1996). The Court held

that "[A] property owner can testify to market value as long as testimony

shows it refers to market value and not intrinsic value." Id.

      In the Trial Court, Appellant Black filed an affidavit providing the

sworn basis for his non-expert owner’s opinion as to the value of the

collateral at the time the Appellee Bank foreclosed.        CR 375.    In his

affidavit, Appellant Black states that the value of the property is

$1,155,000.00. As the property owner, he is qualified to testify about the

value of the property, and disclosure of his identity or opinions in response

to an expert witness discovery request was not required. In any event, the

Trial Court did not enter a written order on this subject, so, for purposes of

this appeal, Appellant Black asserts that his affidavit was properly before

the Trial Court and necessarily created a genuine issue of material fact.

His testimony is consistent with the Supreme Court's reasoning in Moayedi,

cited above. Namely, that the bank made a low bid, not because it was

consistent with the value of the property, but to bring a cause of action

against Appellant Black for an artificially-created deficiency.

                                      12
                             IV.
      No Deemed Admission Occurred Under The Circumstances

     Although Rule 198.2(c) provides that no court order is required to

deem a request for admission against a non-responder, there must first be a

court finding that there was indeed a failure to timely serve a response.

Where, as here, the evidence clearly demonstrated a fact issue of when the

discovery request was sent, and when it was due, coupled with a denial of

same and sworn evidence explaining the confusion surrounding the

situation, the predicate finding of “not timely served” within the meaning

of Rule 198.2(c) was not proven as a matter of law. As a result, a written

order would have been required, but the Trial Court did not enter one.

Accordingly, Appellant’s affidavit raised a genuine issue of material fact,

and it was error for the Trial Court to grant summary judgment in favor of

Appellee Bank.

     Even if the evidence mandates a finding that no timely response was

made to Appellee Bank’s request for admission, which Appellant Black

denies, it would still be error to deem an admission on an outcome-

determinative issue, particularly where, as here, the issue had been plead,

sworn proof submitted by way of affidavit, a motion requesting a fair



                                    13
market determination had been filed, and a reasonable sworn explanation

had been provided over the confusion about what had been served and

when a response was due. As explained in the case of Lucas v. Clark, 347

S.W.3d 800, 803-04 (Tex.App.--Austin 2011, pet. denied):

             The primary purpose of requests for admissions is to
      "simplify trials by eliminating matters about which there is no
      real controversy." (citation omitted). They were never intended
      to be used as a demand upon a plaintiff or defendant to admit
      that he had no cause of action or ground of defense. Id. Courts
      have cautioned that litigants should not be allowed to use
      requests for admissions as a tool to trap their opposition.
      (citation omitted). The rule regarding requests for admissions
      "was designed, not as a trap to prevent the presentation of the
      truth in a full hearing but as a tool for the fair disposition of
      litigation with a minimum of delay." (citation omitted). When a
      party uses deemed admissions to try to preclude presentation
      of the merits of a case, however, due process concerns may
      arise. Therefore, overly broad, merits-preclusive requests for
      admissions are improper and may not result in deemed
      admissions. (citations omitted).

      For the above stated reasons, the Trial Court erred in granting the

Appellee Bank’s Motion for Summary Judgment as there was a genuine

fact issue and Appellee is not entitled to judgment as a matter of law.

Specifically, Appellee Bank’s lack of incentive, low bid, and Appellant

Black’s affidavit created a material issue of fact.




                                       14
                                 PRAYER

     Appellant Paul Black seeks a reversal and remand for a new trial

against Appellee Bank. Appellant Black seeks all further and other relief to

which they may show themselves to be justly entitled.

                                   Respectfully Submitted,

                                   Andy Taylor & Associates, P.C.

                                          BY: /s/Andy Taylor
                                          Andy Taylor
                                          State Bar No. 19727600
                                          2668 Highway 36 S, #288
                                          Brenham, Texas 77833
                                          713-222-1817 (telephone)
                                          713-222-1855 (facsimile)

                       CERTIFICATE OF SERVICE

     The undersigned hereby certifies that a true and correct copy of the
above and foregoing document has been served via the electronic filing
system on the following on this the 16th day of October, 2015.
     Denny Barre
     Anderson, Lerhman, Barre, Marainst, LLP
     Gaslight Square
     1001 Third Street, Ste 1
     Corpus Christi, TX 78404

                                   /s/ Andy Taylor




                                     15
                   CERTIFICATE OF COMPLIANCE
      I, Andy Taylor, Counsel for Appellant certify that this document was
generated by a computer using Microsoft Word which indicates that the
word count of this document is 2,807using Book Antiqua, 14 pt for text and
12 pt for footnotes.

                                                   /s/ Andy Taylor




                                    16
                            Appendix

Tab Description

1   Order of Trial Court granting Motion for Summary Judgment
TAB 1
