to versus wells fargo bank national association mr baker recently pretty well know what happened you can emphasize certain things ok well what i want to emphasize for that motion for summary judgment whereas the issues involved in that were the texas constitutional issues with the lien and then what the two motions for summ shortly before it was brought to federal court and all this is done before not only a scheduling order for the federal court before there was a joint status report federal so in in may twenty sixteen that texas supreme court came out with a case that has helped us out on the constitutional issues and the issues that were there and in fact in the second motion for summary judgment they wells fargo basically conceded that the primary lane that was at dispute was likely in violation  texas constitution and that one of the spouses of when the parties didn't sign on to the law so that's when they brought their record will subrogation claim into their this their minute motion for summary judgment so this is the first one is haim and so basically the time line to respond was to to follow response  that transaction although before they got to that second lien i'll concede that they had an interest in the law and the property so on that particular  they're allowed to get another words in the in the record there's a concession is that my class made payments on the second home equity loan they get a credit for that t equitable subrogation in this in this situation but the actual ability or there were a defenses or constitutional issues that at that point aren't there at the time i think when in our original petition we raised going to the first thing we raised several constitutional issues one that i think that was it was clear on it's not common to both lanes was that one of the parties or spouse didn't sign the lane but we had others whether the loan amount was more than eighty percent i will concede that we have more raise in my this case presents the issue of what a lender needs to establish to be entitled to judgment on its claim that is equably subrogated to a prior lien paid off with the proceeds of a second loan here after it became apparent that there was an issue that made it two while fargo filed a motion for summary judgment relying on three key pieces of evidence the evidence was a certified copy of the two thousand and four lien that had been recorded in the real property records of dallas county the second was the one settlement statement that showed that two hundred forty eight thousand dollars of the loan prove seeds from the two thousand and six loan were used to pay off the preexisting lien and the third piece of evidence was the contemporary ennius release of the two thousand and four lien based on that summary judgment evidence magistrate judge recommended granting wells fargo is summary judgment on equitable subrogation appellants objective the magistrate judge his recommendation simply asserting that the there that the recommendation failed to include an express finding on validity however they offered no argument as to why the two thousand four lean would have been invalid and certainly offered no evidence to support those arguments the district court granted wells fargo summary judgment finding that the two thousand and four lien was valid on its face and appellant had not offered any specific argument or evidence to create a genuine issue of material fact that judgment should be affirmed first as the court has noted any issues about the validity of the two thousand four lane were not raised before the magistrate judge and i contend that that means those issues have been waived second even if the issue were not waived wells fargo met and summary judgment  burden as to waiver this court has made it clear that we're legal arguments are not made before a magistrate issues a report recommendation those arguments are waived here ethical subrogation was put into play in this case in october two thousand and fifteen when wells fargo first filed that the answer before wells fargo removed to a federal court for the second time in february of two thousand and sixteen it asserted a counterclaim for act little segregation in the alternative if there were any merit to the arguments about the validity of the two thousand and six lane when we got back to federal court in february we filed a motion for summary judgment relatively quickly and as to the constitutional issues with the two thousand and six lean the primary argument we asserted was statute of limitations based on this court's ruling in issued a ruling that overruled priests or disagreed with priester and says that a special limitations did not apply to claims about constitutional invalidity of home equity loans in texas as a result we had to retool our motion for s judgment because now we had a situation where we were going to have to concede the invalidity of the two thousand and six lean which mean we had to rely on actual segregation which is what we did in our motion in response to the motion they did raising issues about the invalidity of the two thousand they didn't file a motion seeking a continuance of their response deadline to assert those arguments are developed discovery on those issues and it be difficult to see why would they would need to skive around those issues anyway given that mr bennett was the borrower on that loan and presumably if there were any problems with the two thousand for a loan he would have been privy to that knowledge so by failing to raise the issue and waiting to raise until after the magistrate judge had issued her report recommendation the palettes have waived that issue even if that issue weren't where waived the district court correctly applied the summary judgment standard the position appears to be that in order for a lender to have an actual subrogation lien premised on a preexisting home equity lien the lender to prove a little he has to prove the laundry list of all the requirements under the constitution that position is inconsistent with texas law and would impose a burden that is unworkable from a practical standpoint as to the consistency with texas law in most sal the texas supreme court made it clear that where a lender pays off a preexisting lien the lender steps into the shoes of the original lender that means the lender has the same rights as the original lender to the same defenses as the original lender that also means if the lender is stepping into the shoes that the same burden framework should apply thus to determine the proper summary judgment framework we need to consider how this dispute would have played out between the borrower and the original lender in a typical home equity dispute between a borrower and the original home equity lender the original lender would meet its burden by presenting a facially valid security instrument without affirmatively demonstrating all of the laundry list of the constitutional requirements the burden within shift to the borrower to race specific requirements that had not been met in fact the fourteenth court of appeals has rejected the argument that a lender would have to affirmatively show compliance with all constitutional prerequisites and requirements for home equity loans instead the burden is on the borrower to plead improve alleged violations in the home equity lien that would render constitutionally invalid they are treated in the nature of an affirmative defense the court recognize that this ensures that quote judicial resources are spent litigating the few requirements that are contested rather than the many that are not and that's from the wilson vs ames case it's two thousand and seven west law three zero seven two zero five four i also know that the court recognized or imply only recognize the affirmative defense type framework in auckland vs barry which is the two thousand and seventeen opinion from this court that dealt more with the limitations issue with home equity line liens but in that case the issue of the invalidity of the home equity lien was raised through the use of affirmative defenses accordingly if wells fargo is going to be put in the shoes of the original lender it would establish a lien by coming forward with evidence of the recorded security instrument the berm would then of shifted to the appellants to raise issues of invalidity and present evidence on those issues appellant's failed to do so they did not assert any reason that the lean was invalid in a specific constitutional provision that was not met with regard to the two thousand and four lean or any evidence to support that assertion requiring a borrower like the unproven alleged constitutional deficiency in the original lien is consistent with the framework that would apply outside the equitable subrogation context in addition if it's consistent with the texas supreme court's policy underlying acquittal subrogation in let's say all the texas supreme court recognized that permitting equitable subrogation rights to preserve a lender's lien even where the issues involve an invalid home equity lien protects the homestead rights of texans the court stated throughout our jurisprudence we have stressed the doctrine of aquittal subrogation works to protect homestead property without equitable subrogation lenders would be hesitant to refinance homestead property du increased risk that they might be forced to forfeit their liens or the ability to refinance provides homeowners the flexibility to rearrange debt and avoid foreclosure if a lender were for required to affirmatively establish compliance with each of those laundry list in the home and the texas constitutional provisions regarding home equity loans lenders would be less likely to approve refinancing of home equity loans which would limit the protection of homestead rights available for through refinancing well but that would be consistent with the fact that as mr baker pointed out texas is very strict about allowing these loans to occur even where the borrowers wish to we wish to engage in those loans yes your honor and i will fully admit that texas is very protective of homeowners with regard to home equity loans but the issue is how do those protections play out in the way we see those protections play out is that if  facially valid lien is submitted the burden shifts to the borrower to point out places where they think there are violations and here that was not done i think if in and to impose the obligation like the to having to prove issues about a loan they had nothing to do with a girl that happens all the time and it does happen all the time sometimes they can even find the paper i understand you are but in the situation where is a situation where the loan has itself been transferred what transfers with that contents of that loan file from the from in this case the two thousand and four lean in think about how that would play out in the course of trying to prove this checklist the constitution requires things like that the patient had to be submitted twelve days before closing disclosures had to be provided twelve days before closing a copy of the application had been provided to the borrower a day before closing the day before closing the borrower had to be given a laundry list of the closing costs the closing cost can't be more than three percent now two percent under the new amendments to the constitution the closing had to curd at a approved place all of those sorts of issues that deal with the closing of a loan are issues that will only appear in the in the original loan file those are things that you cannot look at the record indeed to see instead the ethical subrogation lender would have to have access to the original loan file in this case that original loan file would have been created in two thousand and four whilst fargo's lien was created in two thousand and six at which time the two thousand four lien was paid off in two thousand and fifteen then is the first time the issues about the validity of the two thousand and six lien were raised it's the first time equable subrogation even comes into any kind of thought process at that point you're eleven years past the origination of the loan and nine years past pay off the loan so if you that the loan file for the two thousand forward even still exists that creates a high practical burden on  a specific violation if they claim that three percent fee rule is not math we understand the issue will be put in and when they bring forward evidence of that we're going to have to rebut that we understand that but in a situation like this where th issue is never even raised they never make an argument about why it was invalid they don't present any evidence there's nothing to see if that burden back to us as a result we met our summary judgment burden by bringing forward the evidence facially valid two thousand for lien which is recorded in the real property records the hud one statement which shows that money is going to be used to pay off that lien which mr bennett was signed on by the way he signs of knowledge ing that the two hundred forty eight thousand dollars is going to be used to pay what is apparently a valid and existing lien he didn't contest that back in two thousand and six certainly and all that evidence met wells fargo's burden the burden shifted appellants raise a genuine issue of material fact by arguing a specific invalidity and bringing forward evidence to support that when they didn't do that they did not raise a genuine issue of material fact and according cordingley summary judgment was properly i agree in general with sympathize with the banks position in that going back to something that happened two thousand and four that perhaps they didn't have anything to do with and as you indicated just met the you know even in a two thousand and six on they may have not had anything to do with it at the time it creates a burden it does create burdens on both parties and i think i'd agree in general that having to prove up to hold one hundred list for a valid lien is probably not the correct policy either but in this case we had on the on the active lane had specific raised pacific constitutional issues and so instead of having to prove like all the real detail closing issues maybe the sort of the same issues that were raised in the constitution are you on the first layer would need to be shown that the second to be the alledged so i'm not arguing that it every part of a laundry list should be considered but i think some parts of the the list are more