STFU: Mischief at the Fifth Court of Appeals in Dallas, Texas by the Indoctrinated Justice Emily Miskel

MEMORANDUM OPINION

Before Justices Smith, Miskel, and Breedlove Opinion by Justice Miskel

This case involves a suit on a real estate transaction that occurred over twenty- five years ago.

The appellants, Guadalupe and Teresa Castaneda, contend the district court erred in denying their motion for summary judgment, which asserted the statute of limitations,

and in granting a summary-judgment motion filed by appellee Abacus Funding Group, LLC, which asserted res judicata.

We conclude the district court properly denied the Castanedas’ motion and properly granted Abacus’s motion.

We therefore affirm.

I.                        Background

In August 1997, the Castanedas entered a seller-financed purchase of a home owned by Larry and Carolyn Newsom.

To finance the purchase, the Castanedas executed a Real Estate Lien Note, which was payable in installments over a twenty- year period ending in August 2017.

The Castanedas also executed and delivered a deed of trust, which states that the note is secured by a vendor’s lien for the benefit of the Newsoms.

As of April 2018, the Newsoms claimed that the Castanedas still owed $30,388.04 on the note, although the Castanedas disputed this claim.

Approximately two years later, on March 30, 2020, Abacus purchased the note from the Newsoms.

The Castanedas then began making payments to Abacus.

A.                    The First Lawsuit (2020)

In September 2020, Abacus sent the Castanedas a notice of non-judicial foreclosure.

A month later, the Castanedas filed suit against the Newsoms, Abacus, and R. Scott Steinbach, the substitute trustee, in the 160th Judicial District Court of Dallas County (the “First Lawsuit”).

The Castanedas alleged they had paid the balance of the note, and they claimed that “the defendants” breached the subject contract by refusing to release the note.

The Castanedas requested, among other remedies, specific performance of the contract “in that the Court order defendants to immediately release the real estate lien note and issue title in fee simple to [the Castanedas.]”

Alternatively, the Castanedas sought money damages in the amount of the market value of the home or in the amount of all payments, including alleged overpayments, that the Castanedas made on the note.

The Castanedas’ petition also asserted a claim for fraud against the Newsoms and Abacus under Chapter 27 of the Texas Business and Commerce Code.

See TEX. BUS. & COM. CODE ANN. § 27.01.

The Castanedas’ fraud claim against Abacus alleged that, after it purchased the note from the Newsoms, Abacus presented the Castanedas with a “Modification and Extension Agreement” even though it knew, or should have known, that the Castanedas had already paid the note in full.

In addition, the Castanedas’ petition included an application for a temporary restraining order (“TRO”) and for a temporary injunction, which requested the district court to preclude the defendants from selling the property at a foreclosure sale until a full trial on the merits.

Abacus filed a no-evidence and traditional motion for summary judgment which urged that the Castanedas’ sole cause of action against Abacus was for statutory fraud.

Concerning its no-evidence summary-judgment motion, Abacus argued the Castanedas had not produced any evidence to support their allegation that Abacus knowingly made false representations about the amount remaining due on the note.

As for the traditional summary-judgment motion, Abacus argued that:

(i) it did not make any false representations to the Castanedas;

and

(ii) the Castanedas refused to sign the Modification and Extension Agreement that contained the amount purportedly owed.

On April 8, 2022, the district court rendered a final judgment (the “First Judgment”) which severed the Castanedas’ claim against Abacus from the rest of the case and assigned the severed claim against Abacus new cause number.1

The judgment granted Abacus’s summary-judgment motion and ordered that the Castanedas take nothing from Abacus.

The Castanedas did not appeal the district court’s judgment.

B.                    The Second Lawsuit (2022)

On September 30, 2022, after the First Judgment became final, Abacus demanded payment from the Castanedas and provided notice of its intent to accelerate the note.

A little over six weeks later, on November 14, 2022, Abacus sent the Castanedas a notice of acceleration and foreclosure. (LIT; see FFGGP above)

In this notice, Abacus stated that it had instructed the substitute trustee to sell the Castanedas’ home at a non-judicial foreclosure sale.

On December 20, 2022, the Castanedas filed a suit for declaratory relief and an action to quiet title against Abacus in Dallas County Court at Law No. 4 (the “Second Lawsuit”).

The Castanedas alleged “satisfaction of the debt,” and they sought “a declaratory judgment to that effect and removal of the lien.”

Their petition also included an application for a TRO and for a temporary injunction, which

1 Following the severance, the district court rendered a take-nothing judgment against the Castanedas with respect to their claims against the Newsoms.

The Castanedas appealed the judgment, and this Court affirmed.

See Castaneda v. Newsom, No. 05-22-01294-CV, 2024 WL 1190486 (Tex. App.—Dallas Mar. 20, 2024, no pet).

requested the county court at law to preclude Abacus from selling the property at a foreclosure sale until a full trial on the merits.

Abacus filed an answer to the Castanedas’ petition which asserted res judicata as an affirmative defense.

It also filed a motion to transfer venue to the 160th Judicial District Court, which had rendered judgment in the First Lawsuit.

The county court at law granted the Castanedas a TRO, which enjoined Abacus from conducting a foreclosure sale.

The county court also granted Abacus’s motion to transfer venue.

Once transferred to the district court, the Second Lawsuit was assigned a new cause number.2

Abacus filed a traditional motion for summary judgment relying on its res judicata defense.

In response, the Castanedas amended their petition twice.

The Castanedas’ current petition, their second amended petition, included a declaratory relief claim that alleged “[t]he real estate lien note ha[s] been fully paid and any alleged claim by Abacus is barred by the statute of limitations.”

Accordingly, the Castanedas requested the district court to “declare that the real estate lien on the property is void and unenforceable and order Abacus to file a release(s) of lien and deed of trust with the Dallas County Clerk.”

2 Per Abacus’s appeal brief, when the county court at law transferred the Second Lawsuit to the district court, the files transferred did not include Abacus’s answer in which it asserted res judicata as an affirmative defense.

Accordingly, this answer is not in the district court’s docket, nor is it in the record before us.

However, on May 11, 2023, a little over two weeks before the district court’s summary-judgment orders at issue in this appeal, Abacus filed its second amended answer in the 160th district court, which also asserted res judicata as an affirmative defense.

Abacus’s second amended answer is in the record before us.

The Castanedas also filed a response to Abacus’s motion for summary judgment and their own competing summary-judgment motion.

Based on their statute of limitations argument, the Castanedas sought summary judgment on their declaratory judgment claim and requested that the district court declare the note invalid and order that the note and deed of trust be released and removed as a cloud on the Castanedas’ title to their home.

On April 14, 2023, the district court conducted a hearing on Abacus’s motion for summary judgment, and on May 18, 2023, the district court conducted a hearing on the Castanedas’ motion.

Following the hearings, on May 26, 2023, the district court denied the Castanedas’ motion for summary judgment and granted Abacus’s motion.

The order granting Abacus’s motion states that the Castanedas shall take nothing against Abacus.

In addition, this order states that it “fully disposes of all of [the Castanedas’] claims against Abacus . . ., and all [the Castanedas’] requested relief is denied.”

The Castanedas then filed this appeal.

II.                   Standard of Review

We review a trial court’s order granting summary judgment de novo.

Lujan v. Navistar, Inc., 555 S.W.3d 79, 84 (Tex. 2018).

To prevail on a traditional motion for summary judgment, the movant must show there is no genuine issue of material fact and that, as a result, it is entitled to judgment as a matter of law.

See TEX. R. CIV. P. 166a(c).

When both parties move for summary judgment and the trial court grants one motion and denies the other, we must we determine all issues presented and render the judgment the trial court should have rendered.

Colorado Cty. v. Staff, 510 S.W.3d 435, 444 (Tex. 2017).

Each party bears the burden to establish that it is entitled to judgment as a matter of law.

Yowell v. Granite Operating Co,, 620 S.W.3d 335, 343 (Tex. 2020).

III.               The District Court Properly Granted Abacus’s Motion for Summary Judgment on the Ground of Res Judicata.

The Castanedas’ appeal brief does not include a list of issues presented, but we interpret their brief as raising two issues:

(1) whether the district court erred in denying the Castanedas’ motion for summary judgment, which argued that limitations voided collection on the note and barred foreclosure of the Castanedas’ home;

and

(2) whether the district court erred in granting Abacus’s motion for summary judgment, which urged that the Castanedas’ claims are barred by res judicata.

We first consider the Castanedas’ second issue, and as discussed below, our determination of this issue disposes of this appeal.

A.                    Applicable Law

Texas follows the transactional approach to res judicata, under which “a subsequent suit is barred if it arises out of the same subject matter as the prior suit, and that subject matter could have been litigated in the prior suit.”

Citizens Ins. Co. of Am. v. Daccach, 217 S.W.3d 430, 449 (Tex. 2007);

see also

Rosetta Res. Operating, LP v. Martin, 645 S.W.3d 212, 225 (Tex. 2022)

(noting that res judicata bars causes of action that have already been fully adjudicated or that, with the use of diligence, could have been brought in the prior suit);

Compania Financiara Libano, S.A. v. Simmons, 53 S.W.3d 365, 367 (Tex. 2001) (per curiam)

(noting that res judicata bars a second suit not only on matters actually litigated, but also on causes of action or defenses which arise out of the same subject matter and which might have been litigated in the first suit)).

The doctrine seeks to bring an end to litigation, prevent vexatious litigation, maintain stability of court decisions, promote judicial economy, and prevent double recovery.

Daccach, 217 S.W.3d at 449.

A party who relies on res judicata must prove three elements:

“(1) a prior final judgment on the merits by a court of competent jurisdiction;

(2) identity of parties or those in privity with them;

and

(3) a second action based on the same claims that were raised or could have been raised in the first action.”

Id.

Regarding the third element above, “a final judgment on an action extinguishes the right to bring suit on the transaction, or series of connected transactions, out of which the action arose.”

Id. at 449.

To determine the scope of the “subject matter” or “transaction” of the prior suit, we must analyze the factual matters that make up the gist of the complaint, without regard to the form of action.

Id.;

see also Better Bus. Bureau of Metro. Hous., Inc. v. John Moore Servs., Inc., 500 S.W.3d 26, 40 (Tex. App.—Houston [14th Dist.] 2016, pet. denied)

(“Under [the transactional] approach, we examine the factual bases, not the legal theories, presented in the cases to determine whether the cases share the same set of operative facts.”).

This should be done pragmatically, giving weight to such considerations as whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a trial unit conforms to the parties’ expectations or business understanding or usage.

Daccach, 217 S.W.3d at 449.

Any cause of action which arises out of those same facts should, if practicable, be litigated in the same lawsuit.

Id.

The Castanedas contend that Abacus did not meet its summary judgment burden as to two of the three essential elements of its res judicata defense:

(a) the First Lawsuit resulted in a final judgment on the merits (element one above)

and

(b) the Second Lawsuit was based on the same claims as were raised or could have been raised in the First Lawsuit (element three above).

For the reasons discussed below, we conclude that Abacus met its burden.

B.                    Abacus Proved That the First Judgment Was a Final Judgment on the Merits (Element One).

In support of its motion for summary judgment, Abacus attached, among other evidence, the First Judgment, which granted Abacus’s summary-judgment motion in the First Lawsuit.

The Castanedas do not dispute that the First Judgment was a final judgment, but they contend such judgment was not “on the merits” for purposes of res judicata because the judgment was not the result of a “trial on the merits” regarding the validity of the note and the amount of the Castanedas’ debt, if any.

They also argue that the district court’s order “granting [Abacus] summary judgment in the prior case did not adjudicate anything on the merits other than [the Castanedas’] claim of statutory fraud and . . . did not adjudicate the cloud on the title to their homestead.”

We are not persuaded by these arguments.

A final judgment is entitled to res judicata effect even if such judgment did not result from a trial.

See, e.g., Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 861, 865–66 (Tex. 2010)

(holding that trial court’s erroneous dismissal of a suit with prejudice, following plaintiff’s filing of nonsuit, operates to bar a later suit because of res judicata);

Howard Constr. Co., Inc. v. Tex. Ass’n of Women’s Clubs, No. 07- 15-00361-CV, 2017 WL 3611704, at *4 (Tex. App.—Amarillo Aug. 15, 2017, no pet.) (mem. op.)

(“A summary judgment is an adjudication on the merits entitled to res judicata effect.”);

Fite v. King, 718 S.W.2d 345, 347 (Tex. App.—Dallas 1986, writ ref’d n.r.e.)

(holding that grant of summary judgment based on affirmative defense of limitations was a valid and final judgment on the merits for purposes of res judicata).

Accordingly, the First Judgment qualifies as a final judgment on the merits notwithstanding that it disposed of a different cause of action against Abacus than the causes of action alleged against Abacus in this suit.

We conclude Abacus’s summary-judgment evidence established that the First Judgment was a final judgment on the merits.

C.                    Abacus Proved that the Second Lawsuit Was Based on the Same Claims as Were Raised or Could Have Been Raised in the First Lawsuit (Element Three).

The Castanedas raise two arguments to support their assertion that Abacus did not prove the third element of its res judicata defense as a matter of law:

(1) Abacus did not establish that the First and Second Lawsuits were based on the same transaction of occurrence;

and

(2) the Castanedas’ declaratory judgment claim in the Second Lawsuit, which assert that the statute of limitations voided the note and lien, could not have been asserted in the First Lawsuit because, at that time, the limitations period had not yet expired.

We will consider each of these arguments, in turn.

1.                      The First and Second Lawsuits Are Based on the Same Subject Matter.

As noted previously, a final judgment in a suit bars the right to bring a separate suit based on the same “subject matter,” “transaction,” or “connected transactions” out of which the first suit arose.

Daccach, 217 S.W.3d at 449.

Determining the scope of the “subject matter” or “transaction” of the first suit requires us to analyze the factual matters that make up the gist of the complaint, such as “whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a trial unit conforms to the parties’ expectations or business understanding or usage.”

Id.

To establish the above element, Abacus’s summary-judgment motion attached the Castaneda’s original petition from the First Lawsuit.

Abacus’s motion also included a chart that compared the allegations in such First Lawsuit petition to the allegations in the original petition filed in the Second Lawsuit.

This side-by-side comparison shows that both suits arise out of the same subject matter and the same underlying transaction, namely:

(1)  In August 1997, the Castanedas entered a contact to purchase a home from the Newsoms and signed the note in connection with the purchase:

(2)  At the end of the note’s twenty-year period, the Newsoms refused to release the note, claiming that there was still a balance due.

However, the Newsoms’ accounting of the payments made by the Castanedas allegedly failed to include numerous note payments made by the Castanedas.

(3)  The property was placed in foreclosure.

In fear of losing their home, the Castanedas paid the Newsoms $4,100 to remove the property for foreclosure and resumed making mortgage payments to the Newsoms.

(4)  In April 2020, Abacus notified the Castanedas that it had purchased the note from the Newsoms.

Abacus then presented the Castanedas with a Modification and Extension Agreement which showed an alleged balance of $33,500.

(5)  The Castanedas paid Abacus an additional $5,000 for the period April 2020 through August 2020.

In total, the Castanedas paid an additional $37,200 on the note after the twenty-year period ended in August 2017.

Nonetheless, Abacus placed the property for foreclosure.3

We conclude that Abacus’s summary-judgment evidence establishes that the First and Second Lawsuits arise from the same subject matter—the Castanedas’ purchase of a home from the Newsoms in August 2007, and the Newsoms’ (and subsequently, Abacus’s) attempts to foreclose on the home at the conclusion of the note’s term after the Castanedas allegedly did not make all the required payments.

3 As noted previously, after Abacus filed its motion for summary judgment but before the district court ruled on the motion, the Castanedas amended their petition twice in the Second Lawsuit.

These amended petitions shortened the recitation of the facts on which the Castanedas based their claims.

They also repackaged the Castanedas’ description of their claims.

Nevertheless, the Castanedas’ amended petitions are based on the same subject matter as their original petition.

Accordingly, Abacus’s summary-judgment motion was sufficiently broad to cover the Castanedas’ amended petitions.

See Callahan v. Vitesse Aviation Servs., LLC, 397 S.W.3d 342, 350–51 (Tex. App.—Dallas 2013, no pet.)

(“[A[n amended or supplemental motion for summary judgment is not required . . . when the original motion is broad enough to encompass the newly asserted claims.”).

Nonetheless, the Castanedas’ summary-judgment response, and their appeal brief, dispute the relevance of the above facts to Abacus’s summary-judgment motion.

Specifically, the Castanedas argue that the above allegations in the First Lawsuit applied only to their claims against the Newsoms (not Abacus), and, in the Second Lawsuit, these allegations were included only as background facts to show how and why Abacus acquired the note.

As support, the Castanedas rely on the affidavit of Jim Livingston, Abacus’s Managing Member, in which Livingston states that Abacus had no involvement in the above transaction prior to April 2020, when Abacus purchased the note from the Newsoms.4

The Castanedas contend that the “operational facts in this case did not commence until Abacus acquired the note in April, 2020.”

And, again, the Castanedas assert that the summary-judgment order disposing of their statutory-fraud claim in the First Lawsuit did not adjudicate the merits of their “cloud on the title” claim in this lawsuit.

Notwithstanding the above arguments, we conclude that Abacus’s summary-judgment evidence establishes that the First and Second Lawsuits arise out of the same facts and are based on the same subject matter.

See Daccach, 217 S.W.3d at 449.

Accordingly, res judicata bars any of the Castanedas’ causes of action in the Second Lawsuit unless they could not have been litigated in the First Lawsuit.

See Rosetta Res., 645 S.W.3d at 225; Daccach, 217 S.W.3d at 449; Simmons, 53 S.W.3d at 367.

4 Abacus submitted the Livingston affidavit in support of its motion for summary judgment, and the Castanedas also incorporated the Livingston affidavit in support of the summary-judgment response.

We address this issue below.

2.                      The Castanedas could have asserted their statute of limitations claim in the First Lawsuit.

After Abacus filed its motion for summary judgment in the Second Lawsuit, the Castanedas amended their declaratory judgment action to request a declaration that the lien on the Castaneda’s home is void and unenforceable because the note “ha[s] been fully paid and any alleged claim by Abacus is barred by the statute of limitations.”

The Castanedas argue that they could not have asserted their limitations claim in the First Lawsuit because, at that time, the limitations period had not yet expired.

Accordingly, the Castanedas urge that res judicata does not bar their limitations claim.

We disagree that the Castanedas could not have asserted their limitations claim in the First Lawsuit.

The Castanedas’ pleadings allege that the note was subject to a twenty-year term, expiring in August 2017.

Accordingly, under the Castanedas’ theory of the case, the four-year statute of limitations for Abacus to bring an action on the note expired in August 2021.

See TEX. CIV. PRAC. & REM. CODE ANN. § 16.004(a)(3)

(providing limitations applicable to an action for debt);

id. § 16.035

(providing limitations applicable to liens on real property).

Abacus’s motion for summary judgment attached evidence establishing that the district court did not render judgment in the First Lawsuit until April 8, 2022, which was over seven months after the above limitations period had expired in August 2021.

Therefore, the Castanedas could have asserted their limitations claim in the First lawsuit.

Nevertheless, the Castanedas contend that that it is unreasonable to require them to have anticipated, in the First Lawsuit, that Abacus might at some time in the future file a claim or counterclaim to collect of the note.

In other words, the Castanedas argue that they should not be expected to have “preemptively file an affirmative defense of limitations” to a claim that Abacus had not yet asserted.5

Abacus responds to this argument by relying upon a decision from one of our sister courts.

See New Penn Fin. LLC v. Salvagio, No. 09-19-00157-CV, 2021 WL 1307442 (Tex. App.—Beaumont Apr. 8, 2021, pet. denied) (mem. op).

The facts in New Penn Financial resemble the facts of this case in many respects.

In New Penn Financial, the owners of a home, which was subject to a mortgage, filed a lawsuit against the loan servicer to avoid foreclosure.

Id. at *1–*2, *5.6

The trial court dismissed the homeowners’ suit with prejudice in December 2017

5 The Castanedas also contend that, if res judicata applies to their claims, it likewise required Abacus to assert, in the First Lawsuit, any counterclaims to foreclose on the Castanedas’ home or to collect on the note, which it did not do.

We need not consider whether res judicata bars such counterclaims because Abacus has not asserted them in this lawsuit.

6 The homeowners obtained their ownership of the home through a conveyance from the prior owners who had taken out the loan (the “borrowers”).

Id. at *1 n.3.

The borrowers failed to make payments on the loan, which prompted the servicer to accelerate the note and to schedule the home for non-judicial foreclosure. Id. at *1.

Also in 2017, the loan was assigned to a new lender and a new loan servicer (referenced herein as “the lenders”).

Id. at *1.

In early 2018, the homeowners filed a second suit against the lenders based on the same note.

Id. at 2, *5.

In this second lawsuit, the homeowners asserted a declaratory judgment claim premised on the statute of limitations, which they claimed expired in November 2015.

Id.

In response to the homeowners’ second lawsuit, the lenders pleaded the affirmative defense of res judicata, and they later counterclaimed for judicial foreclosure and breach of contract.

Id. at *2.

The lenders also filed a traditional motion for summary judgment based on their res judicata defense.

Id. at *2, *5.

The homeowners then filed a traditional motion for summary judgment based on their statute of limitations claim, and they also responded to the lenders’ summary-judgment motion, contending that limitations barred the lenders’ right to foreclose on the home and their right to seek damages on the note.

Id.

The trial court denied the lenders’ motion for summary judgment but granted the homeowners’ motion, ruling that the lenders take nothing against the homeowners.

Id. at *3.

On the lenders’ appeal, the Ninth District Court of Appeals reversed the trial court’s judgment granting the homeowners’ motion for summary judgment and denying the lenders’ summary-judgment motion.

See id. at *6.

Our sister court noted that the homeowners never raised the statute of limitations in the first lawsuit, but they asserted in the second lawsuit that imitations ran in November 2015, over two years before the trial court dismissed the first lawsuit with prejudice.

See id. at *1, *5.

Accordingly, if the homeowners had exercised diligence in their attempts to avoid foreclosure in the first lawsuit, they could have sought a similar declaration regarding limitations at any point between November 2015 and the lawsuit’s December 2017 dismissal with prejudice.

Id. at *5.

Our sister court was not persuaded by the homeowners’ argument that there was no need for them to assert limitations in the first lawsuit because the servicer did not counterclaim for judicial foreclosure.

Id.

According to the court:

In the present lawsuit, the [homeowners] raised the issue of limitations in their original petition, prior to [the lenders] answering or counterclaiming for judicial foreclosure.

If the [homeowners’] decision to raise limitations depended upon [the lenders’] counterclaim for judicial foreclosure, it stands to reason that they would not have raised it in their original petition before [the lenders] asserted any counterclaims.

Id.

We agree with the reasoning of New Penn Financial. Although Abacus did not file any counterclaims in the First Lawsuit (nor in this lawsuit), nothing precluded the Castanedas from seeking a declaratory judgment in the First Lawsuit based on the statute of limitations, as they did in this lawsuit.

We therefore conclude that Abacus’s summary-judgment evidence establishes that res judicata bars the Castanedas’ limitations claim, just as it bars their other claims.

See Rosetta Res., 645 S.W.3d at 225; Daccach, 217 S.W.3d at 449; Simmons, 53 S.W.3d at 367.

In sum, we conclude that Abacus met its summary-judgment burden of proving its res judicata defense as a matter of law.

D.                    The Castanedas’ Summary-Judgment Evidence Does Not Raise Any Genuine Issues of Material Fact That Preclude the Rendition of Summary Judgment for Abacus.

Along with their response to Abacus’s motion for summary judgment, the Castanedas submitted evidence that included

(i) Abacus’s September 30, 2022 notice to the Castanedas of its intent to accelerate

and

(ii) its November 14, 2022 notice of acceleration and foreclosure.

None of these notices reflect the balance due on the note, and the Castanedas contend that the notices were defective for this reason.

They also argue that the notices did not provide the balance purportedly owed because Abacus does not know the amount of any such balance.

The Castanedas also submitted summary-judgment evidence which they contend shows there is a genuine issue of material fact regarding the balance, if any, due on the note.

Their evidence included the following:

(1) The Newsoms prepared an amortization schedule on or about April 29, 2018, which stated that the Castanedas stilled owed $30,388.

However, Guadalupe Castaneda testified by affidavit that this schedule mispresented numerous payments already made, but the Castanedas continued to make payments to the Newsoms for fear of losing their home.

(2) In February 2020, Larry Newsom sent an e-mail to Jim Livingston, Abacus’s Managing Member, which reflected a $38,000 balance on the Castaneda loan.

The Castanedas questioned the accuracy of this sum, given that it had increased since April 2018 by nearly $8,000 notwithstanding the evidence that they continued to make payments during this time.

(3) In April 2020, after Abacus purchased the note from the Newsoms, it sent the Castanedas a proposed Modification and Extension Agreement which reflected a $33,500.27 balance due.

The Castanedas surmise that this shows Abacus must not have believed the $38,000 sum previously reported by Larry Newsom.

(4) Four months later, in August 2020, Abacus created an updated payment schedule which showed that the Castanedas owed $30,314.44, essentially the same amount owed in April 2018.

(5) In November 2022, Abacus sent an email to the Castanedas’ counsel which listed a $103,863.00 balance to remove the case from foreclosure and to extinguish the note.

The Castanedas contend the above evidence shows that the amount of money, if any, owed on the note remains unresolved.

Their summary-judgment evidence also included affidavit testimony by Guadalupe Castaneda that the note had been paid in full.

In the Castanedas’ view, an affirmance of Abacus’s summary judgment “will result in further litigation questioning the validity of the default notices and non-judicial foreclosure process that cannot state the actual amount claimed to be owned on the [N]ote.”

The above evidence is not material to Abacus’s res judicata defense, which was the basis for Abacus’s summary-judgment motion that the district court granted.

Instead, the question material to res judicata is whether the Castanedas’ claims in this lawsuit arise out of the same subject matter as the First Lawsuit and could have been asserted in the First Lawsuit.

See Rosetta Res., 645 S.W.3d at 225; Daccach, 217 S.W.3d at 449; Simmons, 53 S.W.3d at 367.

As to this question, we conclude the Castanedas’ summary-judgment evidence does not raise any genuine of material fact that preclude the rendition of summary judgment for Abacus.

See TEX. R. CIV. P. 166a(c).

E.                    Conclusion

We conclude the district court did not err when it granted Abacus’s motion for summary judgment and denied the Castanedas’ declaratory judgment action. We overrule the Castanedas’ second issue.

IV.               The District Court Properly Denied The Castanedas’ Motion for Summary Judgment, Which Was Based on Limitations.

The Castanedas’ first issue contends the district court erred in denying their motion for summary judgment, which argued that the statute of limitations rendered the note invalid and the lien unenforceable.

In our above discussion of the Castanedas’ second issue, we determined that the Castanedas’ suit for declaratory relief and action to quiet title based on limitations is barred by res judicata because the Castanedas could have, but did not, raise this claim in the First Lawsuit.

Our disposition of the Castanedas’ second issue likewise disposes of this issue.

Accordingly, we conclude that the district court properly denied the Castanedas’ motion for summary judgment.

We affirm the judgment of the district court.

/Emily A. Miskel/
EMILY A. MISKEL

JUSTICE

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