### TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03
- 20
- 00125
- CV

Jimmy Ray Sepeda and Hortencia Sepeda , Appellant s

v. Madison Revolving Trust 2017; Select Portfolio Servicing, Inc.; and

Shapiro Schwartz, LLP , Appellee s

FROM T HE 21ST DISTRICT C OURT OF BASTROP COUNTY NO. 1051
- 21 , THE HONORABLE CARSON TALMADGE CAMPBELL , JUDGE PRESIDING

M E M O R A N D U M O P I N I O N
Jimmy Ray Sepeda and Hortencia Sep eda , appearing pro se , appeal from the trial
court ’ s judgme nt dismiss ing their claims a ga inst Select Po rtfol io Servicing , Inc. , Madison Revolving Trust 20 17 , and Shap i r o Schwartz, LLP , pursuant to Texas Rule of Civil Procedure 91a

. See Tex. R. Civ. P. 91a ( party may move to dismiss cause of action on grounds that it has

n o basis in law or f

ac t). The trial court also gr anted S hapiro Schwartz , LLP ’ s no evidence motion for summary judgment

. We will affirm the trial court ’ s jud gment.

BACKGROUND In 2006, the Sepedas took out a $79,899.88 home equity lo an ( the Loan) with Beneficial Fi nancial I, I n c . (Beneficial) usin g their p roperty located at 386 Hidden Oaks in Elgin (the Property) as security . In May 2010, Beneficial informed the Sep edas that their loan was in default and , in 2011, filed a rule 736 application for an order to proce ed with N ot ice2

of Forecl osure Sale and Forecl osure Sale. See id. R. 736.1 (application for ord er allowing foreclosure of l ien).

In October 2012, the Sepe das filed suit in the 423rd Judicial District Court of Bastrop County , asserting claims against Benefi c ial fo r breac h of contract, violation of the Texas Constitution, usury, and forgery. A fter thre e years of litigation, the suit was dismissed with
pre judice in December 2015. The Sepedas then initiated an arbit ration procee ding against Benefi cial , assertin g th a t it had failed to properly apply payments they had made on the Loan , had improper ly dec lared that the Sepedas were in def ault, and committed insurance fraud. On summary judgment, the ar bitrator ruled that (1) Benefi cial did not improperly apply the Sep ed as ’
paym ent s pursuan t t o the loan ag reement , (2) Beneficial gave the Sepeda s proper notice of default and opportunity to cure as r equired by the loan agreement and applicab le law, (3) the Sepedas ’ claim that Beneficial b reached a personal credit line agree m e nt was barred by the statute of limitations, (4) the Sepedas ’ insurance fraud claim wa s barred by limitations and was b ased on representations made by entitie s other than Beneficial, and (5 ) the S epedas wer e no t legally entitled to mental an guish or exem p l ary da mages based on the only claim not disposed of on summary judgment

— a breach of contract claim

. The arbitra tor then held a hearing on th e remaining issue of whether the Sep edas were in fa ct in de fault on their loan in May 201 0 when Beneficial decla r e d that their account

was in default. A fter reviewin g and considering all the evidence, the arbitra tor determined that the Sep edas had been making payment s of $471.09 per month , b u t that Benefi cial ’ s mo nthly statements were for amounts greater than t hat be c ause o f the cost to Beneficial of obtaining hazar d insurance and paying delinquent property taxes on the Property that secured the loan. The arbitrator found tha t Beneficial ’ s action to obtain hazard insurance and char ge the S epedas3

for the cost of that insur a n ce was authorized by the loan documents. The arbitrator also rejected the Sepedas ’ claim tha t they never received notices or monthly statements charging them the additional amounts f

or insurance. Th e arbitrator considered the Sepedas ’ claim th at t hey sho ul d not hav e been charged with the amount Beneficial paid in delinqu ent property taxes fo r 2007 and 2008 and determined that, while the Sepedas had obtained a full Disabled Veteran Exemption
f rom property taxes f

rom 2009 forward , the exemption d id n ot exte nd back to 2007 or 2008 and
B enefici al proper ly charged them for its payment of their delinquent 2007 and 2008 property
taxes. The a rbit rator determined tha t the evidence showed that when the Sepedas made payments to Benefi cial in amounts less tha n the mo nt hly statem en ts , which included charges for insurance and property taxes , the funds w ere placed in an accoun t entitled “ un applied funds ” as authorized by the loan documents. When Beneficial received the Sepedas ’ next payment, it was also pla ce d
i n the “ un ap plied funds ” account. When the amount in the “ unapplied fun ds ” account was suf ficient to cover a full monthly statement , tha t amount was withdrawn from the “ unappl ied funds ” and applied to the Sepedas ’ account. The ar bitrator found that “ wh i le the accoun ting is conf using, it is authorized by the loan doc uments , and w as done correctly. ” In its A ward dated June 13, 2016, t he arbitrator denied the Sepedas ’ claim s and determined that the Sepedas were in fact in default on their loan in May 2010 wh e n Ben eficial n oti fied them that the ir account

was in default. The A rbitr ati on Awa rd stated that it was in full settlement of all claims submitted
to arbitration

. One month later, in July 201 6 , Beneficial filed an origi nal petitio n for judicial forec l os u re in the 33 5th Judicial District Cour t of Bastrop County. While that case was pending, the L oan was assigned f

rom Beneficial to Madison R evolving Trust. I n October 2018, the t r ia l court grant ed Madison Revolving Trust and Select Portfolio Se r vicing ’ s s u mmary judgme nt4

mo tion and rendered a final judgment fo r judicial foreclosure of the Property. The Property was sold at a forecl osure sale on Ju ly 2, 2019.

On July 29, 2019, a fter the forecl osure sale, the Sepedas filed the proceeding underly ing this ap p eal in the 21st Judicial District Court of Bastrop County . In a d ocument titled

“ Verified First Amended Compla i nt/Judicial Notice/Demand for Declaratory Relief and Qu iet Title, ” the Sepedas sought a number of spec ific de clarations r elated to the forec los ure process and, ultimately a declaration that the for e cl osure sal e con ducted on July 2, 2019 , was “ null , void , and of no legal effect

. ” The y also sou ght “ [a] judgment of Quiet Title gr anting lawful ownership of [the Property] ” to them. T he Sepedas ’ alle gations in the und erlying suit arise ou t of
Ben eficial ’ s and ul timat ely Madison R evolving Trust an d Select P ort folio Servicing ’ s efforts to enforce rights an d obligations arising out of the Loan , including the right to judicial forecl osure, which were the subject of the above

- described two pr evious co urt case s and th e arbit ration proceed ing. Specifically , the Sepedas allege d a variety of im proprie ties related to the assignment of the Loan from Beneficial to Madi son Revolving Trust , the appointment of Shapi ro Schwartz as a substitute trustee , and the r ight to j udicial ly foreclose on the P roperty

.

Madison Revolving Trust and Select Portfolio Servicing filed a gene ral denial and asserted as affirmative defens es that (1) the Sepeda s failed to state a claim up on which relief could be grante d , (2) the Se pedas ’ cl a ims wer e barred in whole or in pa rt by the Sepeda s ’ failure to miti gate dama ges, and ( 3 ) the Sepedas ’ claims were barred by res judicata an d collat eral estoppel. Madison Revolving Trust a nd Select P ort folio Servicing als o moved for sancti o ns
pursuan t to T exas Civ il P rac tice and Remedies Code section 10.002 , asserting that the Sepedas ’ claims were frivolous and mad e in bad faith for the purpose of harassment. See Tex. Civ. Prac. & Rem. Code § 10.0 02

. T hey a sserted that the Sep edas ’ claims have been repe a t edly argued ,5

litigated, an d deci ded by Bastrop County courts or by court

- ordered arbitration for seven
years, ending with a final ju dgment of foreclosure rendered by t he 335th Judicial District Court of Bastrop County on October 24, 2018. Madison Revolving Trust attached to its motion for sanctions court records from the following proceedings :

● On Decem ber 17, 2015, the 423rd Judicial District Court of Bastro p County rend er ed final judgment dismissing with prejudice the Sep edas ’ claims against Madison R evolving Tru st an d Select Por tfol io Servicing ’ s pr edecessor, Benef i cial Financ ial I Inc., fo r : (1) failure to give an advance copy o f all closing paperwork; (2) us u ry; (3) violation of th e Texas Cons titu tion; (4) failure to provide an independent apprais al; (5) failure to p rovide a cop y of the title policy ; (6) illeg al tie

- in of a personal loan; ( 7) forgery; and (8) illegally char ging fo r credit life insurance and homeo wners ’ insurance.

● On March 7, 2016, a court

- appointed arbitra tor in a new suit filed by the Sepedas ruled on Be nefici al ’ s motion f or summary judgment and dism issed the Sep edas ’ claims tha t defendants : (1) improperly applied mortgage payments the Sep edas made ; (2 ) imprope r ly gave notice of d efaul t; (3) breached the credi t agreement; and (4 ) committe d insurance fraud

. The ar bitrator als o di smissed the Sep edas ’ request for men tal anguis h and exemplary damages.

● On June 13, 2016, the arbitrator entered his Arbitra tor ’ s Awa r d denying the Sepedas ’ claims and finding t hat the S epedas were in default on their loan in May 2010.

● On October 24, 2018, the 335th Judicial Court of B astrop County entered an order granting plainti ff Madison R evolving Trust ’ s moti on for summ ary judgm e n t for forec losure . Th e court denied the Sepedas ’ motion fo r summary judgment. ● On January 7, 2019, the Sepedas ’ motion for new trial was overruled by operation of la w and the Sepedas did not appeal the final judgment of foreclosure.

Madison R evolving T rust a nd Select P ortfolio S ervi cing argued that th e underlying proceeding constituted an impermissible collateral attack o n th e judgm ent of fore closure , that the claims were barred by res judicat a and collateral estoppe l , and tha t th e Sepedas bro ught this suit for

no purpose other than harassment

. The court granted the mo ti on for sanctions , f i nding that the Sepedas ’ claims against Madison Revolving Trus t and Select Portfolio Servicing were6

groundless and brought in bad faith for the pur pose of ha rassment

. The court dismissed the claims with prejudice and ordered the Sepedas to pa y $4,200. 00 in sanctions, represe nting
M adison Revolving Trus t and Select Port folio Servicing ’ s reasonable and necessary attorneys ’ fees an d c osts in pre paring an d prosec uti ng th e motion for sanct ions. The Sepedas then filed a Second Original Amended Comp laint in which they reasserted the same claim s and added an additional claim under the Texas Decep tive Trade Practi ces and Cons umer Protection Act (DTPA). Madison R evolv ing Trus t and Sele ct Portfolio Servicing filed a motion to di smiss
purs uant to rule 91a of th e Texas Ru les o f Civil Procedure and Sh apiro Schwartz fi led a rule 91 a motion to dismiss and a no

- evidence motion for summary judgment.

After consi dering the mot ions, t h e court signed two orders

— one gra nting Shapiro Schwar tz ’ s no - evidence motion for summary judgm ent and another granting M adison Re volving
Trus t and Select Portfolio Servicing ’ s mo tion to di smiss pursuant to Texas Rule of Civ il Procedure 91a

. The co urt rend e r ed a f inal judgment stating that the Sepedas ’ claims against Madison R evolving Trust , Select Portfolio S ervicing, and Shap iro Schwartz had no ba sis in law or fact and that the Sepedas h ad no evidence to support their claims against Shapiro Sch wa rtz. The j ud gme nt dis missed all the Sepedas ’ claim s against the three defendant s .

The Sepedas then filed a notice o f appeal in which they stated that they were

“ appealing the unlawful summary d ismissal of their case ” and that the appeal is based “ upon

u n constitut i onal usurpa tion of a uthority an d due process violations committed by the court. ”

DISCUSSION
Entitled “ Dismissal of Ba sel ess Causes of Action, ” rule 91a allow s a party to move to di smiss a cause of action on the ground that it has no basis in law o r in f act

. See Tex. R.7

Civ. P. 91a . The rule is in addition to, and does not supersede or aff ect, other procedu res tha t authorize di smissal. Id. R. 91a. 9. As s peci fied in the rule :

A cause of ac tion has no basis in law if the alle gations, taken as true, tog e the r with inferences rea sonably drawn from them, do not entitle th e claimant to the rel ief sought. A cause of action has no basis in fact if no reasonable person could belie ve the facts pleaded.

Id. R. 91a.1. The determination of whether a caus e of acti on ha s a b asis in law is, on it s face, a questi on of law that we review de novo. See GoDaddy

. com, LLC v. Toups , 429 S.W.3d 752, 754 (Tex. App.

— Beaumont 2014, pet. de nied)

.

Madison Revolving Trust and Select Portfolio Servicing argued tha t the S epedas ’

c la ims had no b asis in law becau se the y are barred by res judicata , which pre ve nt ed t hem from relitigating claims arising out o f any attempt s to enforce righ ts and obligations created by the Loan or the foreclosure on th e Pro perty resulting from the Sepeda s ’ d efault

. See Barr v. Resoluti on Tr

. Corp. , 837 S.W.2d 627, 628 (Tex. 1992) ( explaining that res judicata is generic term for group of related conc epts concerning preclusive effects giv en to final judgments). Res j udicata, or claim prec lusion, pre vents the r eli tigation of a claim or cause of action that has been finally adjudicated, as well as matter s that, with the u se of diligence, should have been litigated in the prior suit. Gracia v. RC Cola

- 7

- Up Bottlin g Co. , 667 S.W.2d 517, 519 (Tex. 1984)

. 1 For

res judi cat a to a pply, t he following elements must be pr esent: (1) a prior final judgment on the merits by a court of competent jurisdic ti on, (2) the same parties o r those in privity with them, and (3) a second action based on the same claims as wer e rais ed or cou ld have been raised in the first action. Amstadt v. United State s B ras s Corp. , 919 S.W.2d 644, 652 (Tex . 1996) . Madison

1 Issue preclusion, or collateral estoppel, prevents relitigation of particular i ssues already resolved in a prior suit. Bonni well v. Beech Aircraft Corp. , 663 S.W.2d 816, 818 (Tex. 1 984)

.8

Revolving Trust and Select Port f o lio Servicing argu ed t hat these elements were met, barring the Sepeda s ’ claims. They also a rgued that the Sep edas ’ DTPA claim ha d no basis in law becau se
t he Sepedas were not “ consumer s ” as that term is defined in the statute. See Tex. Bus. & Com

. Code § 17. 45(4) (consumer is individual “ who seeks or acquires by purchase or lease any
go od s or s ervic es ” ) ; R ivers ide Nat ’ l Bank v. Lewis , 603 S.W. 2 d 169, 174

- 75 (Tex. 1980) (obtaining lo an or extension of credit does no t qualify ind ividual as “ consumer ” because
money is not good or service) ; see also La Sara Grain Co. v. First N at ’ l Bank of Merc ed e s , 673 S

. W.2d 5 58, 567 (Tex. 1984) ( “ Because the loan i nvolves only the extension of credit,
La Sara has not sho wn itself to be a consu mer and therefore has no DTPA claim

. ” ). The trial court granted the rule 91a motion.

On appeal, the Sepedas do not c h all enge w h ether re s judic ata in fact barred their claims against Madison R evolving Trust and Select Portfolio Servicing. Nor do they challeng e the tr ial court ’ s order granting Shapiro Schwartz ’ s no - evidence motion for summary judgme nt. Instead , the Sepe d a s ’ brief includes the f ol lowing five issues:
1. Did the Sep edas receive the remedy of due course of law as promised in the Texas Constitution, A r t. 1, Sec. 1 3? 2 . Did [the trial jud ge] err when he re fused to allow Sep edas ’ pleadings to be filed? 3. Did [ the tria l judge] err when he summarily threw th e Sepedas out of court in the middle of a hearing, and signed an Order against them without com pleting the hearing and in the absence of Sep edas ’ filings? 4. Did [the trial judge] vi olate the Texas Constitu t i on when h e closed th e Cou rt to the Seped as and their contracted counsel? 5. Did [the t rial judge] violate the Contracts Clause, A r t. 1, Sec. 10, Cl. 1 , of the U .S. Constitution?9

The Sep e das briefed thes e five iss ues together and their argument appears to f o c us on th eir contention th at the trial court “ restric t[ed] the Sepedas ’ representation in court only to a [State Bar of Te xas] member, ” and that such alleged restriction viol ated the Sherm an Act. Th e Sepedas further argue that the y “ have the Right to con t r act for se rvices from anyon e they c ho ose , ” and that they were “ cruelly punished and th eir case dism issed , not becau se of the law, bu t because [the trial ju dge] became enraged when he believed h e had an infidel in the room. ” In th e ir request for relief, t h e Sepedas assert that “ the law in their case f avor s them and the case should have been allowed to progress to a jury ” and request tha t “ in the interest o f justice the Court reinstate their case and allow[] them to continue until an orderly conclusion is r e ached afte r application of the due course of the law of the land. ” T his argume nt is not sufficient to sat isfy the requirement that an app ellant ’ s bri ef “ contain a clear and concise argument fo r the contentions made, with appropriate cita tions to authori t i es and to the record. ” See Tex. R. App.
P. 38.1

. “ Although we co nstrue pro se briefs li ber ally, pro se appellants are held to the s ame standards as appel lants represented by counsel to avoid giving them an unfair advantage. ” Vaclavi k v. Ad

dison , No. 0 3

- 1 9

- 00528

- C V, 2021 WL 170424 9, at *1 (Tex. App

. — Austin Apr. 30 , 2021, no p et

. ) (mem. op.) (citing Mansfield State Bank v. Cohn , 573 S.W. 2 d 181,
184

- 85 (Tex. 1978) ).

Furthermore, t he Sep eda s pro vide no substantive argument addressing whether the trial c o u r t ’ s conc lusion that the ir claims have no ba si s in law was erroneous. Rather, the Sepedas argue that the ir case was decided against them becau s e, apparently, th ey appeared in court repr esented by a person who was not licensed to practice law in the Stat e o f Texas. Th e Sep edas cont end that this constituted bias and prej udice by th e trial court and resulted in

“ j udicial e rro r. ” In their brief, the Sepedas refer to various portions of a reporter ’ s record that is10

not part of the appellate record . W e must p r e s ume, th erefore, that the reporter ’ s record supports th e trial court ’ s judgment. S ee Jaramillo v. A tchiso n , Topeka & Santa Fe Ry . , 986 S

. W. 2 d 701, 702 (Tex. App.

— Eastland 1998, n o pet.). Moreover, the Sepedas ’ assertions regarding th eir

r ig ht t o represe n t ation by a person n ot ad mit ted to practice law in T exas has no bearing on whether the trial court correctly determined the legal question of whether their cl aims were barred by res judicata and whether they were “ consumers ” for purposes of the D TPA. In f a ct, the court was not required to conduct an oral hearing on the rule 91 a motion and could have disposed of it without argument. See Tex. R. Civ. P. 9 1a.6 ( “ The court may, but is not required to, conduct an oral hearing on the motion. ” )

. Becau se the Se p e da s ’ brief fails to comply with Texas Rule of Appellate Procedure 38.1(i) and because it also f ails to contain any argument

or authoriti es to support a basis for reversing the t rial court ’ s order gr anting Madison Revolving Trust an d Select Portfolio Ser v i c ing ’ s rule 91 a motion to dismiss , we overrule each of their five issues

. 2

CONCLUSION

For the reasons stated in thi s opinion, w e affirm the trial court ’s judgment.

2 In their appella te briefing, the Sep eda s discl aim any challenge to the trial court ’ s order gran ting Sh apiro Schwartz ’ s no - evidence motion for summary judgment and, represent that they nonsuited any clai ms against that defendant . We ther efore do not address the p ortion of the trial court ’ s j udgment dismissing the Sep e das ’ claims ag ainst Shapiro Schwart z. See Wojcik v. Wesolick , 97 S.W.3d 335, 336

- 37 (Tex. App.

— Houston [14th Dist.] 2003, no pet.) (concluding that appellee had abandoned ground asserted to trial co urt by affirmatively “ stating in its br i ef that it ‘ does not contend at this time [ground asserted to tr ial co urt.] ’ ” ).11 ____________________ ______________________ Chari L. Kelly , Justice Before Justices Goodwin, Triana, and Kelly Affirmed
Fi led: August 6, 2021