Posted by Rich Phillips
In its weekly order list, the Texas Supreme Court issued one opinion in an argued case. The Court did not grant any new petitions for review.
The Court issued its opinion in No. 13-0337, PlainsCapital Bank v. Martin. In an opinion by Justice Johnson (joined by Chief Justice Hecht, and Justices Green, Willett, Lehrmann, Devine, and Brown) the Court again addressed the application of Texas Property Code section 51.003, which gives property owners whose property has been foreclosed on the right to seek an offset against any deficiency if the fair market value of the property exceeds the foreclosure sales price. Here, the bank bought the property at the foreclosure sale and sold it more than a year later. The bank first argued that section 51.003 does not apply because the bank was basing its deficiency calculation on the amount the property was sold for after foreclosure, rather than on the foreclosure price. The Court rejected that argument, holding that section 51.003 applies to any case where a deficiency judgment is sought. The Court then held that "fair market value" for purposes of section 51.003 is not the historical "willing buyer-willing seller" definition used in other contexts. Instead, section 51.003 expressly permits the court to take into account certain factors, such as "the necessity an amount of any discount to be applied to the future sales price." Thus, fair market value for purposes of section 51.003 is the historical definition as modified by the evidence expressly permitted in section 51.003(b). Justice Boyd (joined by Justice Guzman) dissented because he would have held that the historical meaning of "fair market value' should apply and that evidence of the future sales price should be used only to the extent it leads to a determination of that value as of the date of the foreclosure sale. Justices Boyd and Guzman agreed with the majority that section 51.003 applies.