5th Circuit: Liens That Are Constitutionally Defective Under Texas Homestead Law Are Merely Voidable, Not Void Ab Initio; Kiboshes Homeowners' Effort To Invaildate Mortgage Brought After Expiration Of 4-Year Statute Of Limitations

From Justia.com US Law:

• Plaintiffs sued for a declaratory judgment that the lien on their homestead was void and that the mortgage holder was required to forfeit all principal and interest. Plaintiffs also sought damages for defamation.
  
  The court concluded that plaintiffs' claims were time-barred under Tex. Const. Art. XVI 50(a)(6);(1) because there was no evidence or allegation of defendants' attempting to conceal information, and because the facts that gave rise to any claims were obvious and not hidden, the doctrine of fraudulent concealment did not apply in this instance to estop the lenders' assertion of the limitations defense; because the loan was valid, and plaintiffs were delinquent, the statements at issue were true and no defamation occurred; the court rejected plaintiffs' claim that the statute of limitations barred only remedies; and the district court did not abuse its discretion in striking the amended complaints. Accordingly, the court affirmed the judgment.

Source: Opinion Summary: Priester, Jr., et al v. JP Morgan Chase Bank, N.A., et al.

For the court ruling, see Priester v. JP Morgan Chase Bank, N.A., No. 12-40032 (5th Cir. February 13, 2013).

(1) In addressing whether the a statute of limitations is generally applicable to claims of invalid liens on homestead property in Texas, the court stated:

• We first address whether a limitations period applies to the Priesters' claims. Although the state constitution does not include a limitations period related to claims under Section 50(a)(6), "[e]very action for which there is no express limitations period, except an action for the recovery of real property, must be brought not later than four years after the day the cause of action accrues." TEX. CIV. PRAC. & REM. CODE § 16.051.
  
  The Texas Supreme Court has not addressed whether that residual limitations period applies to defects in homestead liens, but the two Texas courts of appeals that have addressed the issue have found that the residual statute applies.
  
  Addressing a Section 50(a)(6) defect, the court in Rivera v. Countrywide Home Loans, Inc., 262 S.W.3d 834, 839 (Tex. App.-Dallas 2008, no pet.), concluded that the "four-year statute of limitations applies to the constitutional and fraudulent lien causes of action" embodied in the Texas Constitution.
  
  The court in Schanzle v. JPMC Specialty Mortg. LLC, No. 03-09-00639-CV, 2011 WL 832170, at *4 (Tex. App.-Austin Mar. 11, 2011, no writ), adopted that position as well, noting that the "four-year statute of limitations has been applied to violations of the constitutional requirements for home equity loans, calculated from the date of closing on the loan."