Gulliver v. Texas Commerce Bank

This is a case in which bad lawyering, no lawyering and a lack of notice resulted in
appellants losing their property to foreclosure. Appellants appeal the refusal of the court
to give them relief from judgment due to "mistake, inadvertence, surprise, or excusable
neglect."

Appellee obtained the mortgage herein through assignment. At the time of the
assignment, appellee claims, the mortgage was one month in default. Appellee notified appellants of the delinquent status of the loan by letter in September, 1997. However,
appellee admits receiving (and retaining in a "suspense" account) payments subsequent
to that date without notifying appellants that their payments were being accepted for
deposit but not applied to the debt.

On February 4, 1998, the bank filed a complaint to foreclose on the property
secured by the mortgage. It alleged under oath that no payments had been made on the
account since the June 1997 payment. Appellants retained Lawyer Boncek to represent
them and he answered the complaint and alleged the affirmative defense of payment of
all monthly obligations up to and following the filing of the foreclosure action.

Appellee moved for summary judgment swearing that no payments had been made
since the June payment. Appellants responded with their affidavit disputing this allegation
and set out the payments made by them, attaching copies of several of the checks sent
to appellee showing appellee's endorsement. Appellee then filed a "supplemental" affidavit
admitting that while some additional payments had been made, the account was always
delinquent by a month or so.1 This affidavit reveals that many payments were received
from appellants and retained by the bank in a "suspense" account. It also reveals that
while appellee "attempted to contact the borrower," its calls were not returned. Therefore,
instead of sending notice (as it did the default notice) by mail, it merely continued to
deposit the payments made by appellants.

During this period of time, Boncek left the firm formerly representing appellants and
took the file with him to south Florida. Appellee learned of this move and had contact with
Boncek at his new office. However, when appellee filed its notice of the summary
judgment hearing, it sent notice to Boncek at "an old address." When notified that the
notice should be sent to Boncek's new address, appellee responded by sending a copy of
the notice directly to appellants. No one appeared for appellants in proceedings regarding
the motion for summary judgment. And there is no indication in the record that a copy of
the final summary judgment or the notice setting the sale date were provided to appellants.
A copy of the judgment was sent to Boncek's "old address", but it is uncertain whether the
"Notice of Foreclosure Sale" was sent with the judgment.

The lack of notice is fatal in this case. The mere fact that a copy of a notice of
hearing is sent to a represented client does not relieve the adverse party from notifying
counsel of the hearing. A represented party rarely attends a hearing on summary
judgment. Therefore, notice to the client is not an acceptable substitute for the required
notice to opposing counsel. ***

Reversed.

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