James v. Long v. Southwest Funding, L.P. OneWest Bank, FSB IndyMac Mortgage Services And Deutsche Bank National Trust, Co.

ACCEPTED
03-15-00020-CV
4961005
THIRD COURT OF APPEALS
AUSTIN, TEXAS
4/20/2015 5:20:05 PM
JEFFREY D. KYLE
April 21, 2015 CLERK
NO.03-15-00020-CV
_________________________________
IN THE COURT OF APPEALS
FOR THE THIRD SUPREME JUDICIAL DISTRICT
AUSTIN, TEXAS
_________________________________
JAMES V. LONG.,
Appellant,
-versus-
SOUTHWEST FUNDING LP, et al.,
Appellees.
_________________________________
Appeal from the 126th Judicial District Court,
of Harris County, Texas
Honorable Tim Sulak, Presiding
_______________________________________
BRIEF OF APPELLANT
JAMES V. LONG
________________________________________
Oral Argument Waived
James D. Pierce
Attorney for Appellant
1 Sugar Creek Center 1080
Sugar Land, TX 77478
713-650-0150
jim@jamespierce.com
Attorney for Appellant
James V. Long
Page -1-
IDENTITY OF PARTIES AND COUNSEL
For the sake of simplicity the parties are sometimes referred by their name
or by their designation below. The following is a complete list of all the parties
and their attorneys.
Plaintiff/Appellee Defendant/Appellant
James V. Long Southwest Funding, LP
Austin, Texas Dallas, Texas
Attorney:
Attorney:
Brian P. Casey
Mr. James D. Pierce 6836 Bee Caves Suite 272
SBN: 06702350 Austin, Texas 78746
Attorney At Law 512-617-6409
1 Sugar Creek Center 1080 SBN 00793476
Sugar Land, Texas 77478
713-650-0150 Deutsche Bank National Trust
713-650-0146 Fax Company,
Indy Mac Mortgage Services and
One West Bank, FSB
Pasadena, CA 91101
Attorney:
Mark P. Hopkins
Hopkins & Williams, P.L.L.C.
12117 Bee Caves Road, Suite 260
Austin, TX 78738
(512)600-4320
Lauren E. Hayes
SettlePou
3333 Lee Parkway Eighth Floor
Dallas, TX 75129
214-520-3300
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WAIVER OF ORAL ARGUMENT
Appellant respectfully waives oral argument.
Page -3-
TABLE OF CONTENTS
COVER PAGE 1
IDENTITY OF PARTIES AND COUNSEL 2
WAIVER ORAL ARGUMENT 3
THIS TABLE OF CONTENTS 4
INDEX OF AUTHORITIES 5
ADDRESS TO THE COURT 6
STATEMENT OF THE CASE 7
ISSUE PRESENTED 9
STATEMENT OF FACTS 10
SUMMARY OF ARGUMENT 12
ARGUMENT & AUTHORITIES 13
Summary Judgment Standards 13
Affidavit Requirements 13
Genuine Issues of Material Fact 15
PRAYER 18
CERTIFICATE OF COMPLIANCE 19
CERTIFICATE OF SERVICE 20
Appendix 1 (Order being Appealed)
Appendix 2 (Second Order being Appealed)
Page -4-
INDEX OF AUTHORITIES
Cases
Espalin v. Children's Med. Ctr. of Dallas, 27 S.W.3d 675 13
(Tex. App.-Dallas 2000, no pet.)
Humphreys v. Caldwell, 888 S.W.2d 469, 470 (Tex. 1994). 14
McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337 (Tex. 1993) 13
Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546 (Tex. 1985) 13
Powell v. Vavro, McDonald, & Assoc., L.L.C., 136 S.W.3d 762 12, 15
(Tex.App.-Dallas 2004, no pet.)
Rivera v. Countrywide Home Loans, Inc., 262 S.W.3d 834 16-17
(Tex. App.-Dallas 2008, no pet.)
Rowland v. California Men’s Colony, Unit II Mens Advisory Council, 12, 14
506 U.S. 194(1992)
Ryland Group v. Hood, 924 S.W.2d 120 (Tex. 1996) 13-14
Valenzuela v. State & Cnty. Mut. Fire Ins. Co., 317 S.W.3d 550 12, 14
(Tex. App.-Houston [14th Dist.] 2010, no pet.)
Texas Constitution
Tex. Const. Art. 16 Sec. 50(6) 7-8, 13, 16-17
Rules and Statutes
Tex. R. Civ. P. 166a(f) 12, 16
Tex. Gov't Code § 312.011 14
Page -5-
NO.03-15-00020-CV
_________________________________
IN THE COURT OF APPEALS
FOR THE THIRD SUPREME JUDICIAL DISTRICT
AUSTIN, TEXAS
_________________________________
JAMES V. LONG.,
Appellant,
-versus-
SOUTHWEST FUNDING LP, et al.,
Appellees.
_________________________________
BRIEF OF APPELLANT
JAMES V. LONG
TO THE HONORABLE THIRD COURT OF APPEALS:
COMES NOW, Appellant, James V. Long., Respondent, below in Trial Court
Number D-1-GN-10-003483 in the 126st Judicial District Court of Harris County,
Texas, Honorable Tim Sulak, presiding, and respectfully submits this his Brief for the
purpose of appealing the Orders Granting Summary Judgment (Clerk’s Record at p.
350, 363)
As required by the applicable rules, the parties will be referred to as Appellant
and Appellees, their designation below, or by the proper names. The record on appeal
consists of a one volume Clerk’s Record (CR).
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STATEMENT OF THE CASE
This is an appeal of the granting of a summary judgment for “declaratory
judgment” foreclosure of on a loan against Appellant’s homestead, and dismissal of
claims related to a putative prior foreclosure later admitted to be wrongful. (CR 350,
CR 313). In 2010, Deutsche Bank, brought home equity foreclosure proceedings.
On July 23, 2010, Deutsche Bank obtained an order of foreclosure. (CR. 305) On
September 2, the foreclosure order was set aside. (CR 305, 312). On September 7,
2010, signed and filed a foreclosure deed on Appellant’s homestead.
On September 28, 2010, Long filed this pro se suit for damages related to the
wrongful foreclosure, and irregularities in connection with the loan.(CR 4, CR. 24).
On June 14, 2011, Deutsche Bank counterclaimed for declaratory judgment to
confirm its prior sale, and in the alternative for foreclosure. On May 14, 2013,
Deutsche Bank filed with the Travis County property records an acknowledgment that
its prior foreclosure in 2010 was void as it failed to comply with “one or more
conditions precedent....” (CR. 313). Deutsche Bank, joined by related Defendants,
filed a Motion for Summary Judgment. (CR 182). Long challenged the sufficiency
of the summary judgment evidence, and challenged Defendants’ compliance with the
constitutional requirements of Tex. Const. Art. 16 Sec. 50(6). He offered evidence
that the market value loan ratio exceeded that permitted by Tex. Const Art. 16, Sec.
Page -7-
50(6)(B). (CR 303, 315). The Court granted Deutsche Bank’s Motion. (CR 350). It
later granted Southwest Funding L.P.’s summary judgment which simply adopted
Deutsche Bank’s motion. (CR 318, 363).
Page -8-
ISSUE PRESENTED
FIRST POINT OF ERROR
EXCEPT AS TO PLAINTIFF’S FRAUD CLAIM,1 THE TRIAL
COURT ERRED IN GRANTING SUMMARY JUDGMENT FOR
DEFENDANTS.
. Appellant concedes the court did not err in granting the no evidence motion for summary
1
judgment directed at Appellant’s common law fraud claim.
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STATEMENT OF FACTS
The property located at 608 Cutlass, Lakeway, Texas is appellant’s homestead.
(CR at p. 303). Two suits were brought concerning the putative foreclosure of the
property including the case below. In 2010, Defendant/Appellee, Deutsche Bank
National Trust Co., claiming to be the holder and owner of the home equity loan, sued
Long seeking a home equity foreclosure order. (CR. 305, 312). Although initially
obtaining its foreclosure order (CR, at 305), the order was set aside by order granting
new trial in September of 2010. (CR at. 312). While the record in this Court does not
indicate the current status of the first suit (Cause No. D-1-GN-10-000461), it was
dismissed.2
On September 28, 2010, Long brought the instant suit, pro se, alleging
irregularities in the original loan by Southwest Funding, LP seeking rescission and
later damages for wrongful foreclosure against Deutsche Bank. (CR. at pp. 4, 32). On
June 14, 2011, Deutsche Bank filed a counterclaim (CR at 22) seeking a declaratory
judgment, and Request for Foreclosure pursuant to Rule 735(2). (CR at 26-27) On
May 14, 2013, Duetsche Bank National Trust Co., filed a “Statement of Facts to
Purge Real Property Records” with the Travis County property records in which it
admitted it improperly foreclosed on Plaintiff’s property in 2010, and that conditions
2
. The current status of the suit is not material to the appeal but is provided for background.
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precedent to foreclosure had not been met. (Id. at 313).
On November 12, 2013, Defendant’s Onewest Bank, FSB, IndyMac Mortgage
Services and Deutsche Bank National Trust Co., filed a motion for Summary
Judgment. (CR at 182). The Motion stated that these defendants sought both a
traditional and “no evidence” motion for summary judgment. The no evidence
motion was only directed to Long’s common law fraud claim. (CR at 194). The order
granting the no evidence summary judgment on Plaintiff’s fraud claim is not being
appealed. The remainder of OneWest Bank, FSB, IndyMac Mortgage Services and
Deutsche Bank National Trust Co., motion sought a traditional summary judgment
for A) Deutsche Bank’s Declaratory Judgment for Foreclosure Claims (CR. 187), B)
Long’s Claims under TILA (CR at 189) C) Long’s Claims for Wrongful Foreclosure
(CR 190), and D) Long’s claims for fraud (CR 192). On January 21, 2014, the court
granted OneWest Bank, FSB, IndyMac Mortgage Services and Deutsche Bank
National Trust Co., motion for summary judgment. Southwest Funding filed an
adoption of OneWest Bank, FSB, IndyMac Mortgage Services and Deutsche Bank
National Trust Co., motion for summary judgment, which was granted October 9,
2014.
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SUMMARY OF ARGUMENT
The traditional motion for summary judgment was not supported by affidavit
that complied with Tex. R. Civ. P. 166a(f). The affidavit supporting the motion for
summary judgment was signed as if a corporation was testifying:
Rowland v. California Men’s Colony, Unit II Mens Advisory Council, 506 U.S. 194,
204-06 (1992) (corporation does not have the capacity to give an affidavit because
it cannot be charged and jailed imprisoned for perjury). Additionally, the affidavit
failed "set forth such facts as would be admissible in evidence, and . . . show
affirmatively that the affiant was competent to testify to the matters stated therein."
Tex. R. Civ. P. 166a(f); Valenzuela v. State & Cnty. Mut. Fire Ins. Co., 317 S.W.3d
550, 552-54 (Tex. App.-Houston [14th Dist.] 2010, no pet.). The deposition excerpts
from the Long are unconnected questions and provide no evidence on the merits of
the issues in this case. Deutsche Bank filed a sworn statement in the property records
of Travis County admitting that its prior foreclosure was “void, and without force and
effect, and that it failed to meet “conditions precedent required by Tex. R. Civ. P. 54
and Tex. Prop. Code 51.002.” (CR 313). For all these reasons summary judgment
was improper.
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ARGUMENT & AUTHORITIES
Summary Judgment Standards
The standards granting a traditional summary judgment are well established.
The party moving for summary judgment has the burden of showing no genuine issue
of material fact exists and that it is entitled to judgment as a matter of law. See Tex.
R. Civ. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985).
In deciding whether a disputed material fact issue exists, precluding summary
judgment, evidence favorable to the non-movant will be taken as true. Nixon, 690
S.W.2d at 548-49. Further, every reasonable inference must be indulged in favor of
the non-movant and any doubts resolved in his favor. Id. A motion for summary
judgment must expressly present the grounds upon which it is made and must stand
or fall on those grounds alone. McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d
337, 341 (Tex. 1993); Espalin v. Children's Med. Ctr. of Dallas, 27 S.W.3d 675, 688
(Tex. App.-Dallas 2000, no pet.).
Affidavit Requirements
A summary-judgment affidavit must state that it is based on the affiant's
personal knowledge and that the facts in it are true. TEX. R. CIV. P. 166a(f)
("supporting and opposing affidavits shall be made on personal knowledge, shall set
forth such facts as would be admissible in evidence, and shall show affirmatively that
the affiant is competent to testify to the matters stated therein."); Ryland Group v.
Page -13-
Hood, 924 S.W.2d 120, 122 (Tex. 1996); Humphreys v. Caldwell, 888 S.W.2d 469,
470 (Tex. 1994). If an affidavit does not positively show a basis for the affiant's
knowledge, the mere recitation that it is based on personal knowledge is inadequate
.Valenzuela v. State & Cnty. Mut. Fire Ins. Co., 317 S.W.3d 550, 552-54 (Tex.
App.-Houston [14th Dist.] 2010, no pet.). The “affidavit” of Representative of One
West Bank, FSB (CR 19), is wholly inadequate. Initially, the document is not even
an affidavit, because a corporation cannot testify. See, Tex. Gov't Code §
312.011(affidavit must be signed by a party). The subject affidavit is signed as
follows:
A signature in a corporate capacity is not an affidavit. Rowland v. California Men’s
Colony, Unit II Mens Advisory Council, 506 U.S. 194, 204-06 (1992) (corporation
does not have the capacity to give an affidavit because it cannot be charged and jailed
imprisoned for perjury). This signature block would not support a perjury charge.
Further the documents, referenced are not OneWest Bank documents. The corporate
“affidavit” does not show how the witness would have knowledge of documents 1-A
though 1-F (CR 200 to 231). Documents received from another entity are not
Page -14-
admissible under rule 803(6), if the witness is not qualified to testify about the other
entity's record keeping. Powell v. Vavro, McDonald, & Assoc., L.L.C., 136 S.W.3d
762, 765 (Tex.App.-Dallas 2004, no pet.) (custodian of records for travel agency was
not qualified to testify as to records received from third-party company, showing
credits to customers' credit card account). Exhibits 1A to 1 F, are not properly
authenticated by a witness with knowledge. There is no showing as to why these
documents are business records of OneWest Bank.
Genuine Issues of Material Fact
Deutsche Bank National Trust Company, as Trustee of the Indymaac Indx
Mortgage Trust 2007-AR13, etc. filed with the Travis County property records a
document title "Statement of Facts to Purge Real Property Records." (CR at 313. In
that document it admits to having participated and conducted an invalid foreclosure
in 2010 as it pertains to James V. Long and his property at 608 Cutlass Way,
Lakeway, TX. The document recites that a foreclosure sale was held on September
7, 2010. It acknowledges that the sale was improper and that the deed in connection
therewith filed two and one half years earlier was "void and without force and
effect." Its declaratory judgment claim (count 1) is moot. The document
specifically states that one or more conditions precedent were not performed. The
summary judgment evidence does not attempt to provide evidence that Deutsche
Bank did anything to correct its prior problems even assuming such were correctable.
Page -15-
As pointed out above, none of the supposed summary judgment evidence it did
present did not comply with Tex R. Civ. P. 166a(f). The excerpts from the
deposition of James V. Long are disjointed, and did not address any issue in this case,
and do not support summary judgment.
Long presented evidence that Deutsche Bank was not the holder of the note.
(CR. at 303). He states he made numerous demands to review the note. He stated
that Dutche Bank representatives advised him that the note could not be located. (CR.
At 303). A fact question is raised as to whether Deutsche Bank was the note holder.
Southwest Funding LP was not on the list of supervised and registered licensed
entities. (CR at 303). It was therfore not authorized to make a home equity loan.
Home Equity Loans. Tex. Const. Art. 16 Sec. 50(6)(P). The purported extension of
credit exceeded the fair market value ratio provided for in Tex. Const. Art. 16 Sec.
50(6)(B). (CR at 303 paragraph 5, CR at 315, CR 200). The purported loan amount
was $710,400.00. (CR 200). Under the Texas constitution, the fair market value of
the property would have to be at least $888,000.00 to support this loan. (888,000 x
0.80 = 710,400). The appraisal district market value was $608,770.00. (CR 315).
Long testified that the value was under $704,000. The consequence of making this
type of loan is forfeiture of principal and interest. Rivera v. Countrywide Home
Loans, Inc., 262 S.W.3d 834, 840 (Tex. App.-Dallas 2008, no pet.):
The constitution provides that the cap on the amount of the
home equity loan must not exceed eighty percent of the fair
Page -16-
market value of the homestead "on the date the extension
of credit is made." TEX. CONST. art. XVI, § 50(a)(6)(B)
(emphasis added). See also TEX. CONST. art. XVI, §
50(a)(6)(J) (may not accelerate home equity loan because
of decrease in homestead market value). Under the
constitutional amendment, when a lender makes a loan in
violation of the eighty-percent cap, the borrower has a right
to bring suit for forfeiture of all principal and interest
resulting from the extension of credit at any time after the
loan closes. TEX. CONST. art XVI, § 50(Q)(x).
Id.. Deutche Bank offered no summary evidence that it complied with all the
requirements of Tex. Const. Art. 16 Sec. 50(6). The court erred in granting summary
judgment.
Page -17-
PRAYER
WHEREFORE, PREMISES CONSIDERED, Appellant prays that the Court
reverse the Orders Granting Summary Judgment except as to the no evidence motion
for summary judgment concerning Appellant’s common law fraud claim, remand for
new trial, and for such other and further relief as is just.
Respectfully submitted,
___/S/James D. Pierce________
James D. Pierce(15994500)
1 Sugar Creek Center Suite 1080
Sugar Land, TX 77478
(713) 650-0150
jim@jamespierce.com
ATTORNEY FOR APPELLANT,
James V. Long
Page -18-
CERTIFICATE OF COMPLAINCE
This is to certify that the foregoing brief has 2775 words.
Page -19-
CERTIFICATE OF SERVICE
This is to certify that a true and correct copy of the foregoing brief has been
served on the below listed counsel of record this 20TH day of April, 2015 through the
Court’s Electronic Filing System.
Brian P. Casey
6836 Bee Caves Suite 272
Austin, Texas 78746
Mark P. Hopkins
Hopkins & Williams, P.L.L.C.
12117 Bee Caves Road, Suite 260
Austin, TX 78738
___/S/James D. Pierce________
James D. Pierce
Page -20-
DC BK14030 PG862
l'llouc., :.e::m; l'"llldl lmtmocutory None
Disp Parties:._ _ _ _ _ _ _ __ Filed In The District Court
of Travts County, Texas
D1sp code: CVD 1 CLS _....,....__ __
Redact pgs:..f...A_ fl JAN 21 2014
Juage f l '0 Clerk._ _:f_i+-- N. _ 5?.0.I2.e_M.
CAUSE NO. D-1-GN-10-003483 Amalia Rodriguez-Mendoza, Clerk
JAMES V. LONG, § IN THE DISTRICT COURT
Plaintiff, §
§
v. § 126th JUDICIAL DISTRICT
§
SOUTHWEST FUNDING, L.P., INDY §
MAC MORTGAGE SERVICES, ONE §
WEST BANK AND DEUTSCHE §
BANK NATIONAL TRUST CO., §
Defendants. § TRAVIS COUNTY, TEXAS
ORDER GRANTING DEFENDANTS ONEWEST BANK, FSB, INDYMAC
MORTGAGE SERVICES AND DEUTSCHE BANK NATIONAL TRUST CO.'S
MOTION FOR TRADITIONAL AND NO EVIDENCE SUMMARY JUDGMENT
On the 6th day of December 2013 came on to be heard ~efendants OneWest
Bank, FSB, Indymac Mortgage Services and Deutsche Bank National Trust Co's Motion
For Traditional And No Evidence Summary Judgment (the "Motions")_ After due
consideration of the pleadings, the Motions, any responses, arguments of counsel and
evidence and the law, this Court is of the opinion that the Motions should be GRANTED..
IT IS THEREFORE ORDERED that Defendants' Motion for Summary
Judgment and No Evidence Motion for Summary Judgment is in all things GRANTED.
IT IS FURTHER ORDERED that Plaintiff take nothing by way of this suit
against Indy Mac Mortgage Services, One West Bank, FSB and Deutsche Bank National
Trust Co.
IT IS FURTHER ORDERED that Defendants, or their successors or assigns,
are granted declaratory relief that they may lawfully proceed with the foreclosure sale of
the property at issue in this litigation pursuant to the tenus of the Deed of Trust and
§5 L002 of the Texas Property Code, such property being commonly known as
PAGE 1
350
DC BK14030 PG863
608 Cutlass, Lakeway, Texas 78738 and legally described as follows~
LOT 349 AND 350, OF LAKEWAY, SECTION THREE, A
SUBDIVISION IN TRAVIS COUNTY, TEXAS,
ACCORDING TO THE MAP OR PLAT, OF RECORD IN
VOLUME 22, PAGE 20, OF THE PLAT RECORDS OF
TRAVIS COUNTY, TEXAS
Upon conveyance of the property by Substitute Trustee's Deed after public sale,
Defendants will file a Report of Sale with the Court, and will thereafter petition the Court
for an Order confirming that the public sale was held in accordance with the loan
documents.
'?( Sl
SIGNED on this the ~ day ~f ~Ati '-' ~ 2014
Order Submitted By:
HOPKINS & WILLIAMS, P.L.L.C.
Mark D. Hopkins
State Bar No : 00793975
Glenn A. Brown
State Bar No.: 00796255
12117 Bee Caves Road, Suite 260
Austin, Texas 78738
Phone~ (512) 600-4320
Fax: (512) 600-4326
ATTORNEYS FOR DEFENDANTS
ONEWEST BANK, FSB, INDYMAC
MORTGAGE SERVICES AND DEUTSCHE
BANK NATIONAL TRUST Co.
PAGE2
351
DC BK14287 PG936
JAMES LONG, § IN THE DISTRICT COURT
§
Plaintiff, §
§
v. § 126TH JUDICIAL DISTRICT
§
SOUTHWEST FUNDING L.P., INDY §
MAC MORTGAGE SERVICES, ONE §
WEST BANK AND DEUTSCHE §
BANK NATIONAL TRUST CO., §
Defendants § OF TRAVIS COUNTY, TEXAS
ORDER GRANTING DEFENDANT SOUTHWEST FUNDING L.P.'S
MOTION FOR TRADITIONAL AND NO EVIDENCE SUMMARY JUDGMENT
On the 9th day of October 2014, came on to be heard Defendant Southwest Funding L.P. 's
Motion for Traditional and No Evidence Summary Judgment (the "Motions"). After due
consideration of the pleadings, the Motions, any responses, arguments of counsel and evidence and
the law, this Court is of the opinion that the Motions should be GRANTED.
IT IS THEREFORE ORDERED that Defendant's Motion for Summary Judgment and No
Evidence Motion for Summary Judgment is in all things GRANTED.
IT IS FURTHER ORDERED that Plaintiff take nothing by way of this suit against
Southwest Funding L.P.
SIGNED on this __ day
1
363