IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 13-41146

In the Matter of: HIGHWAY 82/FANNIN JOINT VENTURE, 

 Debtor

HIGHWAY 82/FANNIN JOINT VENTURE,

Appellant

v.

CAPITAL ONE BANK,

Appellee

Appeal from the United States District Court

for the Eastern District of Texas

USDC No. 4:12-CV-707

Before STEWART, Chief Judge, OWEN, Circuit Judge, and MORGAN∗

, 

District Judge.

PER CURIAM:**

Plaintiff-Appellant Highway 82/Fannin Joint Venture (the “Joint 

Venture”) appeals the dismissal of its adversary bankruptcy proceeding claim 

for declaratory relief against Defendant-Appellee, Capital One Bank. The 

∗ District Judge for the Eastern District of Louisiana, sitting by designation.

** Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should 

not be published and is not precedent except under the limited circumstances set forth in 

5TH CIR. R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

September 9, 2014

Lyle W. Cayce

Clerk

 

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No. 13-41146

Joint Venture contends it has set forth a claim for relief under a theory of 

quasi-estoppel.

On July 7, 2006, Mark Ragon executed a promissory note in favor of 

Capital One in the principal amount of $340,000. On that same day, Ragon 

executed a deed of trust providing Capital One a lien on a 243 acre parcel of 

property. The Deed of Trust contained a cross-collateralization clause 

whereby the property served as additional collateral for any and all 

obligations owed by Ragon to Capital One, whether then existing or 

thereafter arising. On January 3, 2007, the Joint Venture executed a 

promissory note in favor of Ragon in the principal amount of $340,000 for the 

purchase of the property. The Joint Venture was aware of the bank’s prior 

lien on the property and the cross-collateralization provision in the Deed of 

Trust. Later, the bank became aware that Ragon had transferred the 

property to the Joint Venture. The Joint Venture made all its payments to 

Ragon but, at some point, Ragon defaulted on his obligations to the bank and 

the bank initiated foreclosure proceedings on the property. 

The Joint Venture filed a petition for relief under Chapter 11 of the 

Bankruptcy Code on December 15, 2011 to prevent the foreclosure. The Joint 

Venture initiated an adversary bankruptcy proceeding seeking a declaratory 

judgment that it is entitled to a release of the bank’s lien on the property

based on quasi estoppel under Texas law. The district court affirmed the 

order of the bankruptcy court dismissing Highway 82/Fannin’s adversary 

proceeding for failure to state a claim under Federal Rule of Civil Procedure 

12(b)(6) because there was no plausible claim for relief under a theory of 

quasi estoppel.

“Quasi estoppel precludes a party from asserting, to another’s 

disadvantage, a right inconsistent with a position previously taken.” Lopez v. 

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Munoz, Hockema & Reed, LLP ̧22 S.W. 3d 857, 864 (Tex. 2000). This form of 

estoppel applies when it would be unconscionable to allow a party to 

maintain a position inconsistent with one in which it acquiesced or accepted a 

benefit. Id. To adequately plead a claim under a theory of quasi estoppel, a 

party must allege (1) the defendant acquiesced to or accepted a benefit under 

a transaction; (2) the defendant’s present position is inconsistent with its 

earlier position wherein it acquiesced to or accepted the benefit of the 

transaction; and (3) it would be unconscionable to allow the defendant to 

maintain its present position, which is to the plaintiff’s disadvantage. Id.

The district court dismissed the Joint Venture’s claim because the 

second element had not been sufficiently pleaded. Specifically, the district 

court held Capital One’s enforcement of the cross-collateralization clause and 

foreclosure on the property was not inconsistent with any earlier position the 

bank had taken. On appeal, the Joint Venture argues it did sufficiently plead 

Capital One’s inconsistent position by alleging (1) the Joint Venture offered 

to pay its debt to Ragon by paying Capital One in exchange for release of the 

lien on the property, but the bank declined; (2) the Joint Venture offered to 

pay off Ragon’s note to the bank in exchange for the release of the bank’s lien 

on the property, but the bank declined the offer; and (3) the Joint Venture 

filed a Chapter 11 bankruptcy petition to prevent foreclosure of the property 

by the bank. 

We affirm for the reasons articulated by the district court in affirming 

the bankruptcy court’s dismissal of the Joint Venture’s complaint under Rule 

12(b)(6). The allegations of the complaint, taken as true, do not state a claim 

for relief that is plausible on its face. The Joint Venture has failed to allege 

any position taken by Capital One that was inconsistent with the bank’s

earlier position. The Joint Venture’s belief that the cross-collateralization 

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No. 13-41146

would not be enforced after its purchase does not demonstrate any 

inconsistency on the bank’s part. Neither is the bank’s after the fact 

knowledge of Ragon’s sale to the Joint Venture, and receipt of payments from 

the Joint Venture for five years, inconsistent with the bank’s enforcement of 

the cross-collateralization clause. Leave to amend was not necessary as the 

amendment would be futile.

The judgment of the district court is AFFIRMED. 

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