Mainoo et al v. Comerica Bank
Memorandum Opinion and Order...The order from which the above-captioned appeal is taken is affirmed. (Ordered by Judge John McBryde on 6/22/2017) (wrb)
U.S. DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
IN THE UNITED STATES DISTRICT
NORTHERN DISTRICT OF TEXAS
FORT WORTH DIVISION
EMMANUEL 0. MAINOO,
Case No. 13-41095-MXM13
EMMANUEL 0. MAINOO,
District Court Case
This action is before the court as an appeal from an order
of the United States Bankruptcy Court for the Northern District
of Texas, Fort Worth Division, the Honorable Mark X. Mullin
presiding. Having considered the briefs of appellant, Emmanuel 0.
Mainoo ("Debtor"), and appellee, Comerica Bank ("Comerica"), the
record on appeal, and applicable authorities, the court finds
that the bankruptcy court's order should be affirmed.
The appeal is from a bankruptcy court order signed February
2, 2017, granting Comerica relief from stay. The bankruptcy court
denied Debtor's motion for reconsideration on March 1, 2017. This
court's jurisdiction exists under 28 U.S.C.
Around December 2002, Debtor purchased real property located
at 2546 N. Beltline Road, Arlington, Texas 76011 (the
"Property"). To finance the purchase, Debtor executed a U.S.
Small Business Administration Note (the "Note•) made payable to
Comerica in the original payable amount of $279,800.00. The Note
was secured by a Deed of Trust that was filed in the deed records
of Dallas County, Texas on December 30, 2002.
On March 5, 2013, Debtor filed a Voluntary Petition for
Relief under Chapter 13 of the Bankruptcy Code. Debtor disclosed
that he held an interest in the Property but did not disclose
that the Property was subject to a secured lien held by Comerica.
Rather, Debtor listed Comerica as an unsecured creditor with a
claim of $267,387.
Debtor filed a Chapter 13 Plan and Motion for Valuation (the
"Plan") on March 13, 2013, again listing Comerica as an unsecured
creditor and omitting the existence of the secured lien. Comerica
did not file a Proof of Claim or object to Debtor's plan, and the
plan was confirmed.
Over three years after the Plan was confirmed, Comerica
filed a motion in the bankruptcy court to terminate the automatic
stay pursuant to 11 U.S.C.
362(d), asserting that it was a
secured creditor with a claim of at least $345,747.14, which was
secured by a valid and perfected lien in the Property. In
response, Debtor argued that the stay should not be lifted
because the lien was void and unenforceable. Debtor contended
that his signature on the Deed of Trust was forged, Comerica
waived its right to enforce the lien by failing to object to the
Plan, and that the statute of limitations had expired, among
other things. After full briefing and a hearing, the bankruptcy
court granted Comerica's motion for relief from stay.
Issues on Appeal
The six issues that Debtor presents on appeal are:
Whether the bankruptcy court's determination
that the Debtor signed a deed of trust is
clearly erroneous as [Comerica] presented no
testimony or other evidence contradicting the
Debtor's claim of forgery, and the Debtor
submitted expert testimony in support.
Whether the bankruptcy court correctly
determined that Comerica is a secured
creditor notwithstanding its failure to
object to chapter 13 plain [sic] .
Whether Comerica was required to object to
its treatment as an unsecured creditor under
the Debtor's Chapter 13 Plan.
Whether the bankruptcy court improperly
allowed Comerica double recovery on its loan
by allowing it to receive both a money
judgment and enforce a lien.
Whether the bankruptcy court failed to
correctly apply Texas' four-year statute of
limitations for enforcing a lien on real
Whether it was proper to deny the Debtor's
motion for a new trial without a hearing. 1
Appellant's Br. at 2.
Standard of Review
To the extent an appeal presents questions of law, the
bankruptcy court's judgment is subject to de novo review. In re
Renaissance Hosp. Grand Prairie Inc., 713 F.3d 285, 294
2013). Findings of fact are reviewed for clear error. Id. at 29394.
The Bankruptcy Court's Determination that the Debtor Signed
a Deed of Trust is not Clearly Erroneous
Debtor argues that the bankruptcy court's determination that
Debtor signed the Deed of Trust was clearly erroneous because
"[t]he only evidence on point is that given by the Debtor" and
'Debtor did not appeal the bankruptcy court's order denying Debtor's motion for new trial. To
the extent, if any, that such order pertains to this appeal, the court is denying any relief sought by Debtor.
"[Comerica's] attorney seems to have acknowledged as much as he
wanted to call the notary in the event that the court were to
deem it necessary." Doc.' 4 at 9.
The record substantiates the bankruptcy court's findings.
Debtor's testimony oscillated between denying that he signed the
Deed of Trust and stating that he did not remember whether he
signed the Deed of Trust. R. 3 at 294-96, 315, 328-29. The
bankruptcy court found that Debtor's testimony was "inconsistent,
not believable and lacked credibility." Id. at 11. The court
accords "even greater deference" to the bankruptcy court for
findings based on determinations regarding the credibility of
witnesses. See In re Renaissance Hosp., 713 F.3d at 293
Anderson v. Bessemer City, N.C., 470 U.S. 564, 575 (1985).
Further, the Deed of Trust was notarized, R. at 180, and Debtor
demonstrated that he understood a lien would accompany the Note,
id. at 325. Thus, the bankruptcy court's determination that the
Debtor signed the Deed of Trust was not clearly erroneous.
The Bankrupcy Court did not Award Comerica a Double Recovery
In his brief and reply, Debtor combines issues two, three,
and four to argue, in essence, that the bankruptcy court
The "Doc. "references are to the number of the item on the docket in this Civil Action No.
The "R. _" references are to the record on appeal, docketed in the above-captioned action at
improperly awarded Comerica a double recovery by allowing
Comerica to receive both a money judgment and enforce a lien
after Comerica failed to object to its treatment under the Plan.
Debtor contends that Comerica's failure to object to its
treatment under the Plan constituted acceptance of the Plan that
precluded Comerica from enforcing the lien.
A secured creditor who is not seeking a distribution "is not
required to file a proof of claim but may choose to ignore the
bankruptcy proceeding and look to its lien for satisfaction of
the debt.• In re Hogan, 346 B.R. 715, 719 n.7
(Bankr. N.D. Tex.
2006). It is well established that "(a] suit may be maintained on
a note secured by lien without enforcement of the lien, and after
judgment another suit can be brought to foreclose the lien at any
time before the debt is barred by limitation.• Kempner v. Comer,
11 S.W. 196, 202
(Tex. 1889); see Martins v. BAC Home Loans
Servicing, L.P., 722 F.3d 249, 255 (5th Cir. 2013); Carter v.
Gray, 81 S.W.2d 647, 648
Ltd., 316 S.W.3d 742, 746
(Tex. 1935)'; Stephens v. LLP Mortgage,
(Tex. App.-Austin 2010, pet. denied).
The above-referenced cases directly refute Debtor's claim
that the bankruptcy court awarded Comerica a double recovery by
Cmter was decided by the Commission of Appeals of Texas, Section A on April24, 1935. Every
opinion of the Commission issued on or after March 21, 1934, was adopted by the Texas Supreme Court
and has the full authority of a Texas Supreme Court decision. The Greenbook: Texas Rules of Form 5.2
& 5.2.2 (Texas Law Review Ass'n ed., 13th ed. 2014).
permitting it to seek enforcement of the lien. The bankruptcy
court did not err.
The Bankruptcy Court Correctly Applied the Statute of
The court next turns to issue five presented by Debtor:
whether the bankruptcy court failed to correctly apply Texas'
four-year statute of limitations for enforcing a lien on real
Debtor argues that the bankruptcy court erred in relying on
Boren v. U.S. Nat'l Bank Ass'n, 807 F.3d 99 (5th Cir. 2015) to
hold that the statute of limitations ceased to run after Comerica
unilaterally abandoned its May 2, 2006 acceleration of the Note.
To reach its holding, the bankruptcy court cited evidence that
Comerica accepted payments from Debtor after the May 2, 2006
acceleration and noted that Comerica issued a second notice of
acceleration on September 18, 2009. Debtor cites Martin v. Fed.
Nat'l Mortg. Ass'n, 814 F.3d 315 (5th Cir. 2016) to argue that
"the acceptance of the payments alone does not establish an
abandonment without more.
sending a new notice cannot
be deemed to be an abandonment of the first." Doc. 4 at 15.
Debtor misconstrues Martin. In Martin, the Fifth Circuit
stated that "[a]ccepting a payment after acceleration could be
intentional conduct inconsistent with the acceleration that-in
some circumstances-amounts to an abandonment or waiver of the
acceleration.• Contrary to Debtor's assertion, Martin stands for
the proposition that in some circumstances, accepting a payment
after acceleration could, without more, amount to abandonment.
Rivera v. Bank of Am., N.A., 607 F. App'x. 358, 361
(5th Cir. 2015)
(per curiam); Wheeler v. U.S. Bank Nat'l Ass'n,
No. H-14-0874, 2016 WL 554846, at *6 (S.D. Tex. Feb. 10, 2016)
After finding that Comerica accepted payments after its May 2,
2006 notice of acceleration, the bankruptcy court could have
found that Comerica abandoned the acceleration based on this
evidence alone. However, the bankruptcy court went further by
noting that Comerica's second notice of acceleration issued
September 18, 2009 constituted additional evidence that Comerica
unilaterally abandoned the acceleration of the Note. See Wheeler,
2016 WL 554846, at *6. Thus, the bankruptcy court did not err in
applying the statute of limitations.
The court ORDERS that the order from which the abovecaptioned appeal is taken be, and is
SIGNED June 22, 2017.
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