Reported / Citable
Background
Clarence and Andrastea Griffin obtained a $359,200 home-equity loan from the Federal National Mortgage Association on March 7, 2022, secured by their property and serviced by Truist Bank. They alleged that, at closing, they did not receive a final itemized disclosure, the final loan application, and all executed documents as required by Article XVI of the Texas Constitution.
The Griffins alleged that they delivered a notice to cure in January 2026 and that the defendants failed to cure. They sued in Texas state court for declaratory relief, quiet title, and breach of contract, after which the defendants removed the case based on diversity jurisdiction and moved to dismiss the declaratory-judgment and contract claims. The motion did not address the quiet-title claim.
The Court’s Holding
The court dismissed the declaratory-judgment claim as unripe. The requested declarations arose under Article XVI, Section 50(a) of the Texas Constitution, which the Texas Supreme Court has held has no application outside foreclosure. Because the Griffins did not allege an attempted foreclosure, no ripe controversy supported that claim. Their reliance on the separate quiet-title claim did not convert the pleaded Section 50(a) claim into one under Section 50(c).
The court also dismissed the breach-of-contract claim as barred by Texas’s four-year limitations period. The alleged failure to provide documents occurred when the loan closed on March 7, 2022, so the claim accrued then—not when the defendants later failed to cure. The court rejected tolling because the Griffins waited more than 46 months to send the cure notice, offered no justification for the delay, and did not make the demand within a reasonable time.
Because the defendants did not seek dismissal of the quiet-title claim, that claim remains pending against them.
Key Takeaways
- A claim seeking relief under Texas Constitution Article XVI, Section 50(a) is not ripe without an alleged foreclosure or attempted foreclosure.
- For alleged home-equity closing violations, a contract claim generally accrues at closing rather than when the lender later fails to cure.
- A borrower cannot postpone limitations by waiting until near the end of the limitations period to initiate a contractual cure process.
Why It Matters
The ruling underscores that Texas home-equity borrowers must distinguish between the underlying constitutional violation, the cure process, and the remedies available after a failure to cure. A late cure notice does not reset the accrual date or automatically toll limitations.
The decision also illustrates the limited scope of a Rule 12 motion: although the court dismissed two claims, the unchallenged quiet-title claim survived and the case remained pending.