i

CASE NO. 01-15-00404-CV

_________________________________

IN THE COURT OF APPEALS

FIRST DISTRICT OF TEXAS

______________________________________________________

MID PAC PORTFOLIO, LLC

 Appellant

VS.

PAULA WELCH AND CLYDE ALAN ASHWORTH

 Appellees

______________________________________________________

On Appeal From the 

405th Judicial District Court

Galveston County, Texas 

______________________________________________________

BRIEF OF APPELLANT

______________________________________________________

 

 Michael Burns

 Attorney at Law 

 State Bar No. 03447980

 P.O. Box 992

 Allen, Texas 75013

Phone: (214) 354-1667

 Attorney for Appellant

ORAL ARGUMENT IS NOT REQUESTED 

ACCEPTED

01-15-00404-CV

FIRST COURT OF APPEALS

HOUSTON, TEXAS

7/21/2015 1:02:23 PM

CHRISTOPHER PRINE

CLERK

 FILED IN 1st COURT OF APPEALS HOUSTON, TEXAS 7/21/2015 1:02:23 PM CHRISTOPHER A. PRINE Clerk
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IDENTITY OF PARTIES AND COUNSEL

1. The Appellant/Plaintiff is: 

Mid Pac Portfolio LLC

2. The Appellant/Plaintiff Trial and Appellant Counsel is:

Michael Burns

Attorney at Law

State Bar No. 03447980

P.O. Box 992

Allen, Texas 75013

Email: burnslaw@outlook.com

Phone: (214) 354-1667

3. The Appellee/Defendants are:

Paula Welch and Clyde Alan Ashworth

4. The Appellee/Defendant Trial and Appellant Counsel is:

Mark W. Stevens 

P.O. Box 8118

Galveston, Texas 77553

Email: markwandstev@sbcglobal.net

Phone: (409) 765-6306

Fax: (409) 765-6469
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TABLE OF CONTENTS

IDENTITY OF PARTIES AND COUNSEL ........................................................... ii

TABLE OF AUTHORITIES ................................................................................... iv

STATEMENT OF THE CASE..................................................................................1

ORAL ARGUMENT.........................................................................4

ISSUES PRESENTED.......................................................................4

STATEMENT OF FACTS ........................................................................................5

SUMMARY OF ARGUMENT.............................................................7

ARGUMENT.............................................................................................................9

CONCLUSION AND PRAYER..........................................................24

CERTIFICATE OF SERVICE ................................................................................25

CERTIFICATE OF COMPLIANCE.......................................................................25

APPENDIX..............................................................................................................26
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TABLE OF AUTHORITIES 

Cases

Baughn v. Capps, 2010 Tex. App. LEXIS 1580 (Tex. App. Waco 2010).............10

Brown v. Brown, 145 S.W.3d 745 (Tex.App. – Dallas 2004). ................................17

Expro Americas, LLC v. Sanguine Gas Exploration, LLC, 351 S.W.3d 915 (Tex. 

App.—Houston [14th ist.] 2011,pet.denied). .........................................................5

FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868 (Tex. 2000). ................4

Harbor Ventures, Inc. v. Dalton, 2012 Tex. App. LEXIS 4009, (Tex. App. Austin 

2012). ....................................................................................................................19

Mem'l Park Med. Ctr., Inc. v. River Bend Dev. Group, L.P., 264 S.W.3d 810 (Tex. 

App. Eastland 2008) .............................................................................................10

Pierce v. Gillespie, 761 S.W.2d 390 (Tex. App. Corpus Christi 1988) ..................10

Rhodes v. Cahill, 802 S.W.2d 643 (Tex. 1990).........................................................9

Sarandos v. Blanton, 25 S.W.3d 811 (Tex. App.--Waco 2000, pet. denied) ............9

Schoellkopf Co. v. Starr, 88 S.W.2d 564 (Tex. Civ. App.- Galveston 1935), aff'd,

113 S.W.2d 1227 (Tex. 1938) ..............................................................................10

Session v. Woods, 206 S.W.3d 772 (Tex. App.—Texarkana 2006, pet. denied). .....8

Thomas v. Rhodes, 701 S.W.2 d 943, (Tex. App- Fort Worth, 1986). ....................10

Thompson v. Curtis, 127 S.W.3d 446, 450 (Tex.App.-Dallas 2004, no pet.) .........14

Watson v. Tipton, 274 S.W.3d 791 (Tex. App. Fort Worth 2008). ...........................7

Wells v. Johnson (Tex. App.-Amarillo, 2014)...........................................................8

Statutes

Tex. Civ. Prac & Rem. Code § 16.004(a)(1)...................................................... 8, 12 

Tex. Civ. Prac & Rem. Code § 16.025 ....................................................................10

Tex. Civ. Prac. & Rem. Code § 16.021 (3)................................................................9

Tex. Civ. Prac. & Rem. Code § 16.021 (4)................................................................9

Tex. Civ. Prac. & Rem. Code § 16.025(a) (2).........................................................10

Tex. Civ. Prac. & Rem. Code § 37.009 ............................................................. 19,20

Rules

Tex. R. Civ. P. 735...................................................................................................14

Tex. R. Civ. P. 736...................................................................................................14
1

STATEMENT OF THE CASE

This case involves a dispute over the ownership of a piece of property located in 

Santa Fe, Texas. The Plaintiff in this case is Mid Pac Portfolio, LLC (Mid Pac). The 

Defendants, who are the appellees in this appeal, are Paula Welch and Clyde Ashworth 

(Welch and Ashworth).

The Court will probably notice in reviewing the pleadings in the Clerk’s Record 

that some of the pleadings contain different fonts. The font for Mid Pac’s original 

pleadings in the trial court were in 12 inch Times New Roman. Some of Mid Pac’s 

pleadings in the Clerk’s Record are in a font that is different from the original pleadings 

which must have occurred when the Clerk’s Record was prepared by the Galveston 

District Court clerk for this appeal. 

Mid Pac filed this suit as a Declaratory Judgment action under Tex. Civil Practice 

and Remedies Code Sec. 37.001, et. seq. The initial Defendants were Ms. Welch, Mr. 

Ashworth and Wells Fargo Bank, Minnesota NA, formerly known as Norwest Bank, 

Minnesota, NA as Trustee for Salomon Brothers Mortgage Securities VII, Inc. Floating 

Rate Mortgage Pass Through Certificates, series 1999 –LB1 (Wells Fargo) (CR 6). 

The general factual allegations in the original Petition were that Mid Pac had 

acquired a Deed in Lieu of Foreclosure executed by Welch and Ashworth in 2003 as part 

of a settlement of a law suit that Welch and Ashworth had initiated over a Texas Home 
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Equity loan they had on their property in Santa Fe, Texas and that Mid Pac was now the

true and record owner of the property. The legal theories Mid Pac alleged in the original 

Petition were a Declaratory Judgment to quiet title to the property in Mid Pac and 

Trespass to Try Title. (CR 6- 51). Welch and Ashworth filed a General Denial Answer to 

the Original Petition and raised several affirmative defenses which included various

statutes of limitation. (CR 52- 56). Wells Fargo was served with the original Petition on 

March 20, 2013. (CR 57-59). 

On July 9, 2013, Mid Pac filed an Amended Petition which added Citigroup Global 

Markets Realty Corp. (Citigroup) as a Defendant. The basic factual allegations and legal 

theories as to the ownership dispute between Mid Pac and Welch and Ashworth remained 

the same in the Amended Petition as in the Original Petition. (CR 60- 106). Citigroup 

was added as Defendant because Mid Pac had acquired the Deed in Lieu that is the 

central issue of the case from Citigroup. (CR 63-64). Citigroup was served with the 

Amended Petition by certified mail from the Court Clerk. (CR 107- 108). Ashworth and 

Welch responded to the Amended Petition by filing a Supplemental Answer raising 

several affirmative defenses and a Counterclaim for a Declaratory Judgment. (CR 109-

115).

On January 2, 2014, counsel for Mid Pac filed a Stipulation and Disclaimer 

executed by Citigroup and Mid Pac in which Citigroup disclaimed any interest in the 

property at issue and admitted that it had sold whatever interest it had in the Deed in Lieu 
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at issue to Mid Pac. (CR 115-116). Wells Fargo failed to file an appearance in the suit. 

On January 15, 2014, Mid Pac filed a Motion for a Default Judgment against Wells Fargo 

and submitted a proposed Interlocutory Default Judgment against Wells Fargo to the trial 

court. (CR 117- 129).

From January 15, 2014 to April 15, 2015, Mid Pac and Welch and Ashworth filed 

cross Motions for Summary Judgment, responses and replies to the motions along with 

objections to each other’s summary judgment evidence and various other motions related 

to the cross Motions for Summary judgment. (CR 129 – 757). On August 15, 2015, the 

trial court entered an order granting Welch and Ashworth’s Motion for Summary 

Judgment and denying the Mid Pac’s Motion. (CR 758). The order entered by the court 

was based on the Welch and Ashworth’s proposed order granting their Motion for 

Summary Judgment which was submitted to the trial court on January 15, 2014. (CR553). On September 22, 2014, Mid Pac filed an Amended Motion for Default Judgment 

against Wells Fargo and Citigroup. (CR 759- 772). On February 11, 2015, the trial court 

entered an Order granting Mid Pac’s Amended Motion for Default Judgment against both

Wells Fargo and Citigroup on a limited basis. (CR 799). 

On April 14, 2015, the trial court entered an Amended Final Judgment granting the 

Motion for Summary Judgment filed by Welch and Ashworth and overruling Mid Pac’s 

Motion for Summary Judgment. The judgment also reflected that Mid Pac’s Amended

Motion for Default Judgment against Wells Fargo and Citigroup was granted to only to 
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the extent that Citigroup did not have any right, title or interest in the Deed in Lieu or the 

property at issue and that the judgment did not rule that Mid Pac had acquired the Deed 

in Lieu from Citigroup or Wells Fargo. The final Judgment also awarded Welch and 

Ashworth attorney fees in the amount of $5,208. (CR 842- 844). Mid Pac filed its Notice 

of Appeal on April 29, 2015. (CR 845)

ORAL ARGUMENT

Mid Pac Portfolio does not request oral argument because the facts, issues on 

appeal and applicable law are of a nature that can be sufficiently presented to the Court in 

the briefs of the parties. 

ISSUES PRESENTED

1. Whether the trial court erred in granting Ashworth and Welch’s Motion for 

Summary Judgment while denying Mid Pac’s Motion for Summary Judgment. 

2. Whether statements made by Paula Welch in her affidavits supporting 

Welch and Ashworth’s Motion for Summary Judgment that funds used to pay taxes on 

the property at issue were from a suspense account held by a loan servicer for her Texas 

Home Equity loan, and that these funds belonged to her, were proper summary judgment 

evidence. 
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3. Whether statements by Paula Welch in her affidavits supporting Welch and 

Ashworth’s Motion for Summary Judgment relating to the history of her Texas Home 

Equity loan were proper summary judgment evidence. 

4. Whether the trial court erred in the Amended Final Judgment by ruling that 

the Amended Motion for a Default Judgment filed by Mid Pac against both Wells Fargo 

and Citigroup was granted against only Citigroup instead of both Citigroup and Wells 

Fargo. 

5. Whether the trial court erred in awarding Welch and Ashworth attorney fees 

and costs in its Amended Final Judgment. 

STATEMENT OF FACTS

As noted in the Statement of the Case, this case involves a title dispute between 

Mid Pac and Welch and Ashworth over the property located in Santa Fe, Texas. Welch 

and Ashworth executed a Texas Home Equity Note dated March 26, 1999 in the amount 

of $270,000 payable to Long Beach Mortgage Company which was secured by 1625 

Avenue L, Santa Fe, Texas (the property). (CR 163-186, 223- 235). 

In 2000, Welch and Ashworth filed suit against Long Beach Mortgage over the 

home equity loan which led to a settlement between Welch and Ashworth and Long 

Beach Mortgage on March 14, 2003. (CR 164, 166-184, 213, 236-252). The settlement 

agreement provided that Welch and Ashworth had 90 calendar days from March 21, 2003 
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to pay off the Texas Home Equity loan and that the 90 day period ended on June 19, 

2003. (CR 167, 237). The settlement agreement also provided that Welch and Ashworth 

would execute a Deed in Lieu of Foreclosure to secure the requirement that they pay off 

the loan within the 90 day period. (CR 168, 238, RR Vol 1 of 1 page 22). Welch and 

Ashworth executed the Deed in Lieu on March 21, 2003. (CR 182-186, 253-257, RR Vol 

1 of 1 page 22). The grantee on the Deed in Lieu was Wells Fargo. (CR 182, 253). 

The settlement agreement provided that the Deed in Lieu would be held in escrow 

until the end of the 90 day period and that if Welch and Ashworth had not paid off the 

home equity loan, the Deed in Lieu would be released from escrow. (CR 169, 240, RR 

Vol 1 of 1 page 22).Welch and Ashworth failed to pay off the balance of the loan in 

accordance with the settlement agreement. (CR 165, 211-215, RR Vol 1 of 1 page 23). 

On June 1, 2012, Mid Pac acquired the original Deed in Lieu from Citigroup as 

part of asset purchase of loans and properties classified as foreclosed properties. (CR 

165, 141, 508-548, RR Vol 1 of 1 page 9, 20, 26). Mid Pac recorded the Deed in Lieu in 

the Galveston County real estate records on March 14, 2013. (CR 165, 182-185, RR Vol 

1 of 1 page 20). 

Welch and Ashworth have lived in the property since February of 1995. (CR 211). 

Paula Welch paid the real estate taxes on the property for the years of 2002 to 2004 on 

July 27, 2005. The taxes for 2006 and 2007 were paid by Dovenmuehle Mortgage, Inc. 

The taxes for 2008 were paid by QBE First. American Home Mortgage Servicing paid 
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the 2009 taxes. SN Servicing Corporation paid the 2010 taxes. Paula Welch paid the 2011 

taxes on March 27, 2012. (CR 667-677). Paula Welch first became aware a competing 

claim to ownership of the property by Wells Fargo in 2013. (CR 668). 

SUMMARY OF ARGUMENT

 This case is based on the Deed in Lieu that Welch and Ashworth executed as part 

of the 2003 settlement agreement with Long Beach Mortgage to resolve the lawsuit they 

initiated against Long Beach over their Texas Home Equity loan. Mid Pac acquired the 

Deed in Lieu in June of 2012 from Citigroup as part of an asset purchase and recorded it

in 2013. Mid Pac filed this suit as a Declaratory Judgment action against Welch and 

Ashworth, Wells Fargo and Citigroup to clear the title to the property in its name. Mid 

Pac initially included a Trespass to Title claim in its suit but abandoned it so it was not at

issue in the trial court.

 Both Mid Pac and Welch and Ashworth filed cross motions for summary 

judgment. The trial court granted Welch and Ashworth’s Motion and denied Mid Pac’s. 

Mid Pac contends that the trial should have granted its Motion for Summary Judgment 

and denied Welch and Ashworth’s. 

 Mid Pac’s position on the merits of the case is not complicated. It contends that

Welch and Ashworth transferred their title to the property when they executed the Deed 

in Lieu and failed to comply with the 2003 settlement agreement by paying off their 
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home equity loan. The undisputed summary judgment evidence, including the stipulation

and disclaimer by Citigroup, conclusively proves that Mid Pac acquired the Deed in Lieu

from Citigroup. 

 Mid Pac named Wells Fargo as a Defendant so that Wells Fargo could assert any 

claims it may have had to the Deed in Lieu or the property. Since Wells Fargo defaulted,

any claims it had have been disposed of. Consequently, Mid Pac, as the holder of the 

Deed in Lieu, it is the sole owner of the property. 

 Mid Pac also objects to certain statements Ms. Welch made in her affidavits in 

support of her Motion for Summary Judgment relating to her payment of the taxes on the 

property and the history of her dispute on the home equity loan. These statements are 

either conclusory or irrelevant and are not proper summary judgment proof to support the 

trial court’s judgment. 

 In addition, Mid Pac contends that the trial court’s Amended Final Judgment is 

incorrect because it is inconsistent with the Order the trial court entered granting Mid 

Pac’s Motion for Default against Citigroup and Wells Fargo. The Order granting the 

Motion for Default stated that neither Citigroup nor Wells Fargo had any interest in the 

property while the Amended Final Judgment stated that only Citigroup did not have any 

interest in the property. The Final Judgment should have been consistent with the trial 

court’s default order in that it should have stated that neither Citigroup nor Wells Fargo 

had any interest in the property. 
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 Finally, Mid Pac contends that the trial incorrectly awarded attorney fees and costs 

to Welch and Ashworth. Mid Pac is requesting that this Court reverse the trial court’s 

judgment and render judgment in its favor and remand the issue of attorney fees back to 

the trial court for reconsideration. 

ARGUMENT

SUMMARY JUDGMENT REVIEW

This case is before the Court upon cross motions for summary judgment. A 

summary judgment is reviewed de novo on appeal. Tex. Civ. Prac. & Rem. Code § 

37.009 In reviewing a trial court's ruling on cross-motions for summary judgment, an 

appellate court will consider all summary judgment evidence, determine all issues 

presented, and then render the judgment the trial court should have rendered. FM Props. 

Operating Co. v. City of Austin, 22 S.W.3d 868 (Tex. 2000). This Court may consider 

evidence presented by both parties in determining whether to grant either motion. Expro 

Americas, LLC v. Sanguine Gas Exploration, LLC, 351 S.W.3d 915 (Tex. App.—

Houston [14th Dist.] 2011, pet. denied).

SUMMARY JUDGMENT EVIDENCE 

The undisputed facts in this case are simple and straight forward. It is undisputed 

that:

1. Paula Welch and Clyde Ashworth executed a Texas Home Equity Note in the 
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amount of $270,000.00 payable to Long Beach Mortgage Company which was secured 

by the property located at 1625 Avenue L, Santa Fe, Texas. (CR 163-182, 211, 210-234)

2. Ms. Welch, Mr. Ashworth and Long Beach Mortgage Company executed 

the 2003 Settlement Agreement to settle a lawsuit between Ms. Welch, Mr. Ashworth and 

Long Beach Mortgage Company over the home equity loan. (CR 163-182, 213, 236-252)

3. As part of the settlement agreement, Ms. Welch and Mr. Ashworth executed

the Deed in Lieu to the property to Wells Fargo as the grantee. (CR 164-165, 182-186, 

253-257)

4. The settlement agreement provided that Ms. Welch and Mr. Ashworth had 

until June 19, 2003, to pay off the home equity loan or vacate the property and, if they 

failed to do so, the Deed in Lieu would be released from escrow. (CR 164, 169, 170, 

213, 239,240)

 5. Paula Welch and Clyde Ashworth did not pay off the Note in accordance the 

2003 Settlement Agreement. (CR 213)

6. On June 1, 2012, Mid Pac acquired the Deed in Lieu from Citigroup as part of 

an asset purchase transaction. (CR 115-116, 165).

 7. Mid Pac Portfolio recorded the Deed in Lieu on March 14, 2013 in the 

Galveston County Real Estate Records. (CR 165)

8. Wells Fargo failed to file an appearance in the suit to contest the allegations
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or assert a claim to the Deed in Lieu or the property itself. (CR 759, 799).

9. Citigroup admitted through its stipulation that it transferred its interest in the 

Deed in Lieu to Mid Pac and disclaimed any interest in the Deed in Lieu or the property 

at issue. (CR 115). 

10. Ms. Welch paid taxes on the property for the years of 2003 and 2004 on July 

27, 2005. (CR 671, 704-707). 

MID PAC PORTFOLIO IS THE OWNER OF THE PROPERTY

Under Texas law, title to real property is vested in the grantee of a deed when the 

deed is executed by the grantor and delivered to the grantee. An unrecorded deed is 

binding on the grantor in the deed and is effective to pass title to the grantee. When a 

deed is recorded, it creates a presumption, and establishes a prima facie case, of the 

delivery of the deed and the intent of a grantor to transfer title to a property. Watson v. 

Tipton, 274 S.W.3d 791 (Tex. App. Fort Worth 2008).

In the 2003 settlement agreement that Ms. Welch and Mr. Ashworth executed, Ms. 

Welch and Mr. Ashworth agreed to pay off their home equity loan by June 19, 2003.

They also executed the Deed in Lieu at issue in this case in accordance with the 2003 

settlement agreement. (CR 163, 194, 213, 236, 253). The 2003 agreement provided that 

the Deed in Lieu would be held in escrow until the loan was paid off. If Ms. Welch and 

Mr. Ashworth failed to pay off the loan by the deadline in the settlement agreement, the 
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Deed in Lieu would be released from the escrow. (CR 237- 240).

 Ms. Welch and Mr. Ashworth no longer have title to the property because they 

transferred the property out of their names with the Deed in Lieu in 2003. There is no 

factual dispute that Mid Pac acquired the Deed in Lieu from Citigroup on June 1, 2012 

and that Mid Pac recorded it on March 14, 2013. Likewise, it is undisputed that Mid Pac 

acquired any interest that Citigroup and Wells Fargo may have had in the property by 

virtue Mid Pac’s purchase of the Deed in Lieu from Citigroup and Wells Fargo’s default 

in the suit. Consequently, Mid Pac is the owner of the property. The trial court was 

incorrect in denying Mid Pac’s Motion for Summary Judgment and granting Welch and 

Ashworth’s. 

WELCH AND ASHWORTH’S CLAIMS AND DEFENSES 

Although Welch and Ashworth raised several legal theories in their pleadings, it 

appeared in the trial court that they primarily based their counter claim and affirmative 

defenses on the three year adverse possession statute in Tex. Civ. Prac. & Rem. Code §

16.024, the five year adverse possession statute in Tex. Civ. Prac. & Rem. Code § 16.025

and the four year statute of limitation in Tex. Civ. Prac. & Rem. Code § 16.004(a)(1).

(CR 113,742, RR (Vol 1 of 1 pages 26-27). 

ADVERSE POSSESSION CLAIMS 

Ms. Welch and Mr. Ashworth contend that they acquired ownership of the 

property through adverse possession. The nature of adverse possession is that a person 
13

takes possession of property adversely to another party’s ownership rights and is 

eventually allowed to acquire title because of continuous adverse use over time without 

the possession being broken by the true owner. Session v. Woods, 206 S.W.3d 772 (Tex. 

App.—Texarkana 2006, pet. denied). Wells v. Johnson (Tex. App.-Amarillo, 2014).

Because establishing title by adverse possession has the effect depriving a party of lawful 

title to property, adverse possession is not well regarded in the law so the statutory 

prerequisites must be strictly complied with. Thomas v. Southwestern Settlement & 

Development Co., 131 S.W.2d 31 (Tex. Civ. App.—Beaumont 1939) Wells v. Johnson

(Tex. App.- Amarillo 2014)

To establish title by adverse possession, a party must prove: 

(1) a visible appropriation and possession of land, sufficient to give 

notice to the title holder;

(2) that is peaceable,

(3) under claim of right hostile to the title holder's claim, and 

(4) that continues for the duration specified in the applicable three, 

five, ten or twenty-five year limitation statute. See Rhodes v. Cahill, 

802 S.W.2d 643 (Tex. 1990), Sarandos v. Blanton, 25 S.W.3d 811 

(Tex. App.--Waco 2000, pet. denied).
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The summary judgment evidence that was before the trial court in this case was not 

sufficient to prove that Ms. Welch and Mr. Ashworth occupied the property for the 

amount of time required by each adverse possession statute. Ms. Welch states in her 

Supplemental Affidavit in support of her Motion for Summary Judgment that she and Mr. 

Ashworth have “lived continuously and openly in the property” but does not state how 

long they have occupied it. (CR 670). 

Likewise, both the three and five year statutes require that Welch and Ashworth 

have some form of record title to support their adverse possession claim. The three year

statute requires “title or color of title”. “Title” is defined as “a regular chain of transfers

of real property from or under the sovereignty of the soil”. Tex. Civ. Prac. & Rem. Code 

§ 16.021 (4). “Color of title” is defined in Tex. Civ. Prac. & Rem. Code § 16.021 (3) as a 

“consecutive chain of transfers to the person in possession that:

(A) is not regular because of a muniment that is not properly recorded or is only in 

writing or because of a similar defect that does not want of intrinsic fairness or 

honesty; or

(B) is based on a certificate of headright, land warrant, or land scrip.” 

The five year statute requires that Welsh and Ashworth claim title to the property 

under a “duly registered deed”. Tex. Civ. Prac & Rem. Code § 16.025 There is no 

summary judgment evidence in the trial court record of any type of record title into 
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Welch and Ashworth to satisfy the “title” or “color of title” requirement for the three year 

statute or a “duly registered deed” in their names for the five year statute. 

Beside a “duly registered deed” into Welch and Ashworth, the five year statute 

also requires that they had paid the taxes on the property for five consecutive years. Tex. 

Civ. Prac. & Rem. Code § 16.025(a) (2), Mem'l Park Med. Ctr., Inc. v. River Bend Dev. 

Group, L.P., 264 S.W.3d 810 (Tex. App. Eastland 2008); Baughn v. Capps, 2010 Tex. 

App. LEXIS 1580 (Tex. App. Waco 2010); Pierce v. Gillespie, 761 S.W.2d 390 (Tex. 

App. Corpus Christi 1988); Schoellkopf Co. v. Starr, 88 S.W.2d 564 (Tex. Civ. App.-

Galveston 1935), aff'd, 113 S.W.2d 1227 (Tex. 1938). In order to satisfy this requirement 

the taxes must be paid before they become delinquent. Thomas v. Rhodes, 701 S.W.2 d 

943, (Tex. App- Fort Worth, 1986). 

The summary judgment evidence relating to the payment of taxes is in the

Supplemental Affidavit of Paula Welch (CR 667 -676). Welch and Ashworth also 

submitted certified records from the Galveston County Tax Assessor to substantiate the 

statements in her affidavit. (CR 703-719). 

There was no undisputed summary judgment evidence in the trial court that Ms. 

Welch and Mr. Ashworth paid the taxes for five consecutive years before they became 

delinquent beginning from either March 23, 2003 (the Date of the Deed in Lieu) or June 

23, 2003 (which was the date the Deed in Lieu could have been released from escrow 
16

under the 2003 settlement agreement). (CR 665). Ms. Welch’s affidavit shows the 

following tax payments from 2003 to 2012: 

Receipt Date Amount Tax Year Description Payer

2012-03-27 $5,152.99 2011 Payment WELCH PAULA A

2011-.06-17 ($95.12) 2010 Refunded SN SERVICING CORPORATION

2011-04-27 $95.12 2010 Transfer SN SERVICING CORPORATION

2011-04-27 ($95.12) 2010 Transfer SN SERVICING CORP.

2011-04-27 $5,373.61 2010 Payment SN SERVICING CORP.

2009-12-31 $2,820.81 2008 QBE FIRST

2009-12-29 $4,039.56 2009 Payment AMERICAN HOME MTG SERV

2009-01-05 ($2,820.81) 2008 Reversal QBE FIRST 

2008-12-31 $2,820.81 2008 QBE FIRST

2007-12-19 $2,827.94 2007 Payment DOVENMUEHLE MORTGAGE, 

2007-01-02 $2,883.83 2006 Payment DOVENMUEHLE MORTGAGE 

2006-02-10 $2,977.30 2005 MORTGAGE SERVICES

2005-07-27 ($0.02) 2004 WELCH PAULA A

2005-07-27 $3,949.39 2004 WELCH PAULA A

2005-07-27 $101.84 2004 WELCH PAULA A

2005-07-27 $2,871.38 2003 WELCH PAULA A

2005-07-27 $1,210.12 2003 WELCH PAULA A

2005-07-27 $1,191.08 2002 WELCH PAULA A

2005-07-27 $2,730.10 2002 WELCH PAULA A

Ms. Welch states in her affidavit that even though these records show that the 

taxes were paid by the lenders or servicing companies on the loan rather than herself, Ms. 

Welch still claims credit for the payments because she assumes the payments were made 

from a “suspense account” held by the loan servicers which were actually her funds. 

Whether Ms. Welch’s “suspense account” statements are proper summary evidence is an 
17

issue in this appeal. Regardless of how that issue will be resolved, the summary 

judgment evidence still does not prove that the taxes were paid before they became 

delinquent for any consecutive five year period by anyone even if Welch and Ashworth 

are given credit for all of the tax payments Ms. Welch claims to have made. 

FOUR YEAR STATUTE OF LIMITATION IN 16.004(a)(1)

Ashworth and Welch raised Tex. Civ. Prac. & Rem. Code § 16.004(a)(1) as an 

affirmative defense in the trial court. The statute provides that a suit for specific 

performance on a contract to convey property must be brought within four years. This 

statute is not applicable to this case. Mid Pac has not alleged that it was a party to a 

contract with Ms. Welch and Mr. Ashworth to convey the property and is not trying to 

enforce a contract to convey the property. Mid Pac is trying to clear title to the property 

in its name based on the Deed in Lieu.

OTHER ISSUES RAISED BY WELCH AND ASHWORTH 

Welch and Ashworth raised several other issues in their pleadings and Motion for 

Summary Judgment. Even though it is unclear from the trial court’s judgment whether 

these issues had any bearing on the trial court’s ruling on the cross Motions for Summary 

Judgment, Mid Pac would like to briefly address the following two issues and will 

address them more thoroughly if Welch and Ashworth develop them in their Response 

Brief in this appeal. 
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MARY CARTER AGREEMENT

 Welch and Ashworth questioned the asset purchase transaction between Mid Pac 

and Citigroup Global Markets Realty Corp as being a collusive “Mary Carter Agreement”

scheme for Citigroup to enforce the Deed in Lieu instead of a legitimate business 

transaction through which Mid Pac acquired the Deed in Lieu. Ms. Welch and Mr. 

Ashworth produced absolutely no evidence, let alone undisputed summary judgment 

evidence, to support this accusation because there is none. The undisputed evidence is 

that Mid Pac acquired the Deed in Lieu from Citigroup in June of 2012 under an asset 

purchase transaction. 

RES JUDICATA AND ISSUE PRECLUSION

In their Amended Motion for Summary Judgment, Welch and Ashworth raised the 

issue of whether the ruling in Case No. 06CV0224, Citigroup Global Realty Markets 

Corp. v. Paula Welch and Clyde Ashworth, is a defense to the Mid Pac’s Motion for 

Summary Judgment on the grounds of res judicata and issue prelusion. (CR 742- 744)

Although Ms. Welch and Mr. Ashworth did not produce copies of any pleadings or 

orders from Case No. 06CV0224 to substantiate their contention, they referenced the 

docket sheet for the case and, in particular, the ruling by the trial judge on March 28, 

2008. This entry reads: “APPL FOR FORECLOSURE IS DENIED /S/JE/DS”. 

As it pertained to Citigroup , Case No. 06CV0224 was a proceeding under Tex. R. 
19

Civ. P. 735 and Tex. R. Civ. P. 736 which apply to foreclosures of home equity loans. 

Tex.R.Civ. P. 736.9 states: 

“Effect of the Order. --An order is without prejudice and has no res judicata, 

collateral estoppel, estoppel by judgment, or other effect in any other judicial 

proceeding. After an order is obtained, a person may proceed with the foreclosure 

process under applicable law and the terms of the lien sought to be foreclosed.”

Consequently, the ruling in Case No. 06CV0224 regarding Citigroup’s attempt to 

foreclose Mr. Welch’s and Ms. Ashworth’s home equity loan did not have a preclusive 

effect on Mid Pac’s cause of action in this case. 

OBJECTIONS TO SUMMARY JUDGMENT EVIDENCE 

Mid Pac raised several objections to the affidavits that Paula Welch submitted in 

support of her Motion for Summary Judgment which the trial court failed to rule on. (CR

565, 677). To the extent that these objections were to the form of Ms. Welch’s affidavits, 

Mid Pac concedes that these objections were waived. Thompson v. Curtis, 127 S.W.3d 

446 (Tex.App.-Dallas 2004, no pet.). However, objections to defects in the substance of 

an affidavit may be may be raised for the first time on appeal. Lack of relevancy and 

conclusory statements are substantive defects which can be raised on appeal. McMahan 

v. Greenwood, 108 S.W.3d 467 (Tex.App.-Houston [14th Dist.] 2003, pet. denied). 

RELEVANCY

Ms. Welch filed two separate affidavits in support of her Motion for Summary 

Judgment (CR 211, 667). In her first affidavit (CR 211) she makes the following 
20

statements: 

“4. In approximately 1999, Clyde Ashworth and I applied for a home equity loan. In 

around March 26, 1999, we signed all closing documents. Under those closing documents 

we were supposed to get $28,045.06. See Exhibit 4, which is a true and correct copy of the 

closing statement which we signed, and as was later unilaterally modified by the lender. 

After we had signed the closing statement, and after the right rescission (3 days) had passed 

on March 29, 1999, we went to pick up the check on March 30, 1999. At that time, I 

noticed that the check was about $8,000 short of what we were supposed to get under the 

original form of Exhibit 4, as we had signed it. I asked the closing agent (Stewart Title) 

why the amount was short and was given no response except to contact the lender, 

Ameriquest. This meeting took place at Stewart (League City) at approximately 11:00 that 

day, March 30, 1999. That afternoon, I contacted Ameriquest by telephone, and they faxed 

me Exhibit 4 as it presently appears, with the handwritten entries as1presently shown on 

Exhibit 4, changing the settlement charges on line 103 from $15,839.13 to $11,803.13; 

changing the "Payoff ' on line 104 from $226,495.81 to $239,034.83; changing the Gross 

Amount due from Borrower on 4, we were supposed to get cash of $28,045.06, as indicated 

on Line 303 (Cash to Borrower). Instead, Exhibit 2 was changed to read on line 303 

$19,562.04, a difference of approximately $8,483.02.

5. Neither I nor my husband Clyde Ashworth ever authorized or approved in advance the 

change in figures on Exhibit 4 as described above. As a result, the objective of the loan 

(Paying off business partners of my husband Clyde's) was prevented, and we had to borrow 

additional funds (about $5,000) from another bank.

5A. The previous lender, who was repaid with the proceeds of the loan now in dispute, was 

IMC Mortgage. In year 2000, IMC Mortgage advised that it had been overpaid and that the 

amount received was $148,000 in excess, so it refunded the $148,000 to the lender, i.e., 

Long Beach or its assigns. I have never gotten an account of where the $148,000 went 

other than documents filed in the 122d District Court showing the credit. These facts were 

related later to the various judges described below.” (CR 211 -212). 

The issue in this case is whether the Deed in Lieu that Welch and Ashworth 
21

executed in connection with the 2003 settlement agreement is effective to pass title to the 

property at issue to Mid Pac. The litigation that led to the 2003 settlement agreement was 

initiated by Welch and Ashworth and was intended to resolve the dispute that they had 

over the loan. 

All of the referenced excerpts from her affidavit relate to issues that Ms. Welch 

had with the loan prior to her lawsuit that resulted in the 2003 settlement agreement. The 

problems that Ms. Welch had with the loan prior to the 2003 settlement are not relevant 

to this law suit. Therefore, paragraphs 4, 5 and 5A of her affidavit that relate to the 

historical issues with the home equity loan are not proper summary judgment evidence 

and should not have be considered by the trial court in ruling on the Cross Motions for 

Summary Judgment. 

CONCLUSORY STATEMENTS 

Ms. Welch also filed a Supplementary Affidavit to support her adverse possession 

claim in which she states that some of the funds that were used to pay the taxes on the 

property came from a suspense account. (CR 667). These excerpts are: 

Paragraph 6: “I should further note that, looking at the third column (Tax Year), taxes were 

paid by me for the tax years of 1991 through 2005 (15 years) and for the tax years 1999 

through 2005 (6 years). Furthermore, since 2003 (the year in which the so-called Deed in 

Lieu was executed) taxes have been continuously paid through 2011 directly by me or with 

funds of mine taken from a suspense account, for a period of approximately 8 years.”

Paragraph 9: “Comparing Exhibit "C” to the list of ad valorem payments, Exhibit A, it is 

apparent that ASC or subsequent Mortgage Companies used the suspense account (i.e., my 

money) to pay taxes on the home in question from February 10, 2006 through June 

17,2011.”

Paragraph 10: “The total amount of taxes paid out of the suspense account (i.e., my

money in the possession of a servicing agent) are as follows:
22

Date of Pmt Amt. of Payment TX year Total

2006-02-10 $2,977.30 2005 2,977.30

2007-01-02 $2,883.83 2006 $5,861.13

2007-12-19 $2,827.94 2007 $8,689.07

2008- 12-31 $2,820.81 2008 $11,509.88

2009-01-05 (2,820.81) 2008 8,689.07

(reversal)

2011-04-27 $5,373.61 2010 $14,062.68”

(2009)

Affidavit: 12: “Thus, of the 26,089.57 held in suspense, $14,062.68 has been applied to 

taxes. I have never received an accounting of the remaining monies, i.e.,

A statement is conclusory if it does not provide facts to support it. Brown v. 

Brown, 145 S.W.3d 745 (Tex.App. – Dallas 2004). All of these statements by Ms. Welch 

that any funds that were used to pay the taxes were paid from funds in a suspense account 

held by one of the servicers for the loan and that the suspense account funds were hers

are conclusory. There are no facts in her affidavit explaining what a “suspense account” 

is, why it was created, where the funds came from that were supposedly in the suspense 

account or that funds used in the suspense account were used to pay the taxes. Ms. Welch 

assumes that because she received a letter dated 2004 from a loan servicer named ASC 

which referred to a suspense account, the funds in that account were used to pay the 

taxes. (CR 668). None Ms. Welch’s above referenced conclusory statements relating to 

the suspense account funds being hers or that they were used to pay the taxes on the 

property should be considered competent summary judgment evidence. 
23

DEFAULT JUDGMENT AGAINST WELLS FARGO

Mid Pac filed an Amended Motion for a Default judgment against Wells Fargo on 

the grounds that Wells Fargo had not appeared or filed an answer in the suit and against 

Citigroup by virtue of the disclaimer it filed. (CR 759) The trial court granted the motion 

and entered an order stating that neither Wells Fargo nor Citigroup had any interest in the 

property at issue. (CR 799). 

However, in the Amended Final Judgment, the trial court stated that Mid Pac’s

Amended Motion for Default was granted only against Citigroup and that only Citigroup

(instead of both Citigroup and Wells Fargo) had “no right, title or interest” in the property

or Deed in Lieu at issue in the suit. There is no explanation or reason in the trial court 

record why the trial court’s Final Amended Judgment should not have been consistent 

with its Order Granting Mid Pac’s Amended Motion for Default in cutting off Wells 

Fargo’s rights in the property and Deed in Lieu just as Citigroup’s were. Mid Pac 

requests that the case be remanded to the trial court enter a final judgment that is 

consistent with its Order granting Mid Pac’s Motion for Default against Wells Fargo and 

Citigroup. 

ATTORNEY FEES AND COSTS

The trial court awarded the Welch and Ashworth $5,208 in legal fees and court

costs under Tex. Civ. Prac. & Rem. Code § 37.009 in the Amended Final Judgment. 

When a declaratory judgment is reversed on appeal, the award of attorneys' fees may no 
24

longer be “equitable and just” as required is under §37.009 and the issue of whether to 

award attorneys' fees and costs, and to whom, can be remanded to the trial court for 

further proceedings. Harbor Ventures, Inc. v. Dalton, 2012 Tex. App. LEXIS 4009, (Tex. 

App. Austin 2012). Since Mid Pac contends that the trial court erred in granting Welch 

and Ashworth’s Motion for Summary Judgment and denying its Motion for Summary 

Judgment, if this Court reverses the trial court’s judgment, the trial court should be 

directed to reconsider the portion of its judgment awarding attorney fees and costs to 

Welch and Ashworth.

CONCLUSION AND PRAYER

Appellant Mid Pac Portfolio requests that the Court reverse the trial court’s 

judgment and render judgment for Mid Pac by denying the Appellee Welch and 

Ashworth’s Motion for Summary Judgment and granting Mid Pac’s Motion for Summary 

Judgement, award the costs of this appeal to Mid Pac and remand the case to the trial 

court to determine whether any of the parties should be awarded reasonable attorney fees 

and court costs at the trial court level pursuant to Tex. Civ. Prac. & Rem. Code § 37.009.

 Respectfully submitted,

 /s/ Michael Burns

 State Bar No. 03447980

 P.O. Box 992

 Allen, Texas 75013

Phone: (214) 354-1667

 ATTORNEY FOR APPELLANT
25

CERTIFICATE OF SERVICE

I hereby certify that a copy of the above and foregoing pleading was accomplished 

on the July 21, 2015 by the method and to the following as indicated:

Mark W. Stevens 

P.O. Box 8118

Galveston, Texas 77553

E-mail: markwandstev@sbcglobal.net

/s/ Michael Burns

 

CERTIFICATE OF COMPLIANCE

I hereby certify that this document was produced on a computer using Microsoft 

Word 2013 and contains 6628 words, as determined by the computer software’s wordcount function excluding the sections of the document listed in Texas Rule of Appellate 

Procedure 9.4(i)(1).

/s/ Michael Burns
26

APPENDIX

Record Pages

Amended Final Judgment in Case No. 13-CV0422.............................................................................. CR 356-358

2003 Settlement Agreement ................................................. CR 236- 251

Deed in Lieu of Foreclosure ................................................. CR 182-186

Citigroup Stipulation.......................................................... CR 115-116 
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COMPROMISE. Af"«) SETT{£MEl'fT ACREEMENT AND R£l:USe: 

This COMPROMISE AND SEnLEMENT AGREEMENT AND RElEASE (betein,ftcc 

,efm-ed to u lhe A~nl'') is.made UId trote:ted into effective lIS of MIIrth 14, 2(W;n; by and 

betWl:Cn P1alntifTSl'CCMItIICI"-Dderdzrlls CI)'de Ashwonh aod hul. Welch (bqeinalttfrtfemd 10 u 

~ASAWOR1lI AND WELCH')1nCS De~tf Plailltitr LONG BEAOf MOR.TGAGE 

COMP...,.,.... bmcd,. W'I fINANCING USA (bcrc.inaftu rd"c:rnd to IS. ""LONG B£ACHiWHEREAS, ASHWORTH AND WEl..O{ brovgbtlWt ~ LONG· BEACH, in the 56th 

Judici.1 Oi:strict Coan of Galveil:aa Couo.ty, Tuu. bcari:lg CIusc: No. OO-CV.0409 CIltidd C1yd~ 

~ IImI P<NIII ff'-klt ". l.-~ 8-0. J.io,tpp c:-p-y. dIW<r F~ USA lind wbcR:u 

tONG BEACH hrou&hI COlIl'llerclaims qaiost ASHWORlH AND WELQ( ill. said sui!. 

equjIy loan. (orm ... · loUl no. 8125517, current klan no. 01)4.1770264, m;al ASHWORTH AND 

WaCH ob~fted from LONG BEACH ("the: Home Equity Loan., ·in die c.igiul prirlciP'l &IOOIn 

ofS270.400.00 --S ~ b)" \hit rcaI popcrty ~ at 1625 A"YCftJC 1.. SlIIIb Fe, GaM:Aon 

Cotmty. TeJl:u (1M kfroperty"),lbc 1.c1r.of ASHWORTH AND WELCH'S _hl1,.ym.:n13 for 

$lid! H()Cnt Equity t-n.. tbc 61iq.s of Appt~ roc- &pedited.Fom;;losurr: ~. Jnd 

ASHWORTH AND .WEI..Q{'S cas.tina ofFanuen: Inswaaee Ex.cblng#·s check 110. ]25SOOO101. 

Ibtcd No"cmber 16, 2000. 1nd madt: plyabk 10 P ...... lI Wdch, Clyde I\.$bwonh. _ Long 8ach 

Monpge in lbe MDOUIII 0(110.936.63; and 

WHEREAS. LONe BEACH dt:ni~ u..t ASHWOR.1li AND wa.cJI b3VC sufl"cn!d any 

cl&l!l*SC5 and runha" bCliet-a I:h'II ASHWORTH AND WELCH'S c.bi~s an: whDlly witl!oUI meOl 

c.- IOundltion; and 

EXHIBIT - D-

! 

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LONG BEACH (ASHWORTH' AND WElOf and ~G BEACH collectiYely are sometines 

WHEREAS, tlx Pvl~ wi&b to avoid tht Qpu!St I)f litiplion and. bavc. .gee4 to 

WELCH iW1d LONG BEACi. ineludill$ all claims and callSC:l of al:tion of any kind IbM CIII"(~ 

~ Of" lhl1 may elI:ist in the future tNI ,e~ e in Illy wly 10 !b" ~ions. the- CICCIIrRnCCS., IDd 

tM Hom .. Equity Loan d.r:scribc:d k Ihc LaYmlit (wUcdi .. uy, the..,.~ ... dte Iozms of 

~ .and u lim.iltd b~ !bose teaDJ. 111 R( roM ill this A.grt:cmeoI. with Ibe ro:;:opitioa tbu 

Ilae n-ay be: d~ IIJ;d ace unlmwn 10 tb= Parties.at!be time of e:u,:uUon.ofdU ApIcIDcar or 

that IPY arise in Ihc Allure. with fu.n I:nI)wledp oftbcpossibililyor-.dditiClrlIl claims., ad with Ih= 

illtcol Lhallhis A~cnl $dtIes.net f~y disposes of all e\aimsarisin& out oftb:: Home Equity 

loIrI. the TrillLSle!iOllS, iII'Id the Lawwit. ~ ~ fit IIf\knooIIIn. CHI Ib:; b::tm$ of uttkmml. 

and u Iirpito:l by I!»U: terms., as: Cd fOM W! this A~ 

NOW. THEREFORE. in considcntion ortlle forqoinsw tile foJlowins rnul\llJ pnHfti$a$ 

liIad agreemtnl$, lnd othe.r£OOd UId valIJable consideration. the llCdp! and sufflCitll(;)' ofwhieb arc 

htrcby atkno ..... led&cd, the. Pmies agrr:e CD sc:nle., rolloW5: 

t. LONG BEAClf ~ to liYe ASHWORTH AND weLCH 90 calendM ~ 

from MiAIdl 21. 2003. whic:b 90 day perigd c.nds II 5:00 p.m. on Th~." June 19,200). 

an;malcd with LONG BEACH rtndi« (b)..-., olTthc Horne Eq.ity [.0 ... u issue in !WI Ihrou.&h 

their I),,", 1"C$01.II"tC$.. . COIIPSd for ASHWOR1lf AND WELCH .!:ftc' to pro-ride by fKSimiJe 

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IrltUll'liuion. no IZler lhan twcnlY (20) busillHS days prior 10 the ~ or an)' refinancing oflhc 

Home Eq-..ily Loan. r.hc: nvnu or any and III cnlilieS rrom .... hkh ASHWORTH ANI> WELCH 

eorrc:sponoenl lender WI mi;hl be inl'Olvcd if! VI)' sueh tefin~nc;ng. ICI eovnsc:1 ror LONG 

BEACH. COIlnse1 for tONG BEAOf wil] lben nOliCy coonse.! ror ASHWORTH AND WELCH 

by f.uimilc traosmiuWn. no !alel tban ~ () busiDf:u da)'S alia- rucivin, lhe faaimite . 

u-amrnis:oicm Iforn ASHWORTH AND W"£.LOrS covnsd. infixmation U 10 any nx:h 

milies arc: II{JiJiased 'fII'ilh LONG BEAOf ·Of iavo]YCd in .1. coaapon6elJ1 lcadin, rdatiollShip 

. with LONG BEACH or its affilillhs with fUpUllo Illy sl6Ch rdinancinC 10 LONG BEACH'S 

knowledge or information. 

2. ASHWORTH AND WELCH asne thaI CC?lJ\'c:mporMl£OU~y upon their txCiCulion 

or thil AgrHmalt, they win c::r;c.tWe Jnd provide I Dc:cd in Lieu of Foru~ in the form 

Iltac:hr;d u E.dubit A hereto lad incorpantcd huc:in by rd",encc. 10 tbc botdef of !he Tau 

Home Equity Sc:a:rity (Il5trumenl (the MDI=d orTruslj to be hdd in escro ..... by LONG B£..-\01. 

ASHWORTH AND WELCH IS"'C' thlllhW" coucsc:l .... iII said 10 LONG BEACH'S eounuJ via 

OVemichl delivery the origilllUy A~ Deed ill Lieu.·ofForeeIO$Uft': af\er er:~tioo! or urae by 

ASHWORTH AND WELCH, ror de~e:y!he. first b~.ay after uccution of DIlle. 

1. ASHWOR·m AND WELCH and LONG BEACH lDfemand and ~ Ih.- tbe 

lenn "100% OF TIlE FULL AMOUNT OWED ON THJ:: HOME EQUITY LOAN.M wbidl lo:rrD 

will be set forth hen:inaftet" thrtIlIg.out ws Ap-oemetIt. InI:IIl't$ 1000.4 oflhe full amcnllll owed on 

the Home Eqully ~. as shown on Ihr: I~ pIIygfT talea'\1:Qt U:sued by LONG BEACH or irs 

.!liIi.IEI a:i Clr thc. date- paymenl i. received by LONG BEACH, which iiKludu lbe prioc.ipaJ 

balaoce, U(;med in(erest, late charles. Reovtrahlo b"'~ aoy uatlW Idv~ p.)'Orr 

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p:rymenl is rec:eiYed by LONG BEACf-l 

4. ASHWORnt AND ~.~ 10 refinance by lhc end oflbe 9O-DaY-Pe:riod 

set forth in pan.~ I tbo-ve 100% OF THE RJLL AMOUNT OWED ON THE HOME 

EQUITY LOAN. ASHWORTH AND WEte;H aebIaw~g~ that tbey previously ..... ere: 

pwv;dcd willi infonnllion &S 10 'oYtIat ~pri~ Ck.b of Ih= ~ of 100% OF THE 

FULL AMOUNT OWED ON THE HOME EQUITY LOAN: ASHWORTH AND WELCH 

. . uodc:rstand and ,get: ItAl ~e will be no c:o~tq: Dn lbe &11 amoaBt doc and owed on lbe 

HOIn$ Equity Loan.u ortbe: dale: pa)m!Zll isn:cc:ivtd by LONG BEAOL 

, . In IlH: cvmt .... SHWORTIi AND WELCH oblllin tdiDancln, DC Ie$J tbllll 100% 

OF nm FULL AMOUNT OWED ON 1HE HOME EQUITY LOAN". ASHWORTH AND 

WELaf .cree 10 pay in ~r~ nDWI5 on !he d.I~ of ~g the: rViuaneinl oC the Home 

Eqoiry Loan. the diffcteot;c ~ 100"-' Of TIlE fULL. AMOUNT. OwED ON 1lIE H0M;E 

EQUITY LOAN IIXllhe ItQO\IIlII of lhe Hoene Eqairy Lolllll tAai ASHWORm AND WELCH 

6. In the: a.i'«1l .. ivc, if ASHWORTH ANt) WELCH do DOl obtaip re:Maaei,!' orille 

Home Equ;,;y l.Mft. ASHWORTIl AND WELCH IJrU: ~ pay by th:: end oflhe 9O-D.y·Pcriod 

ill oertified filPds tow. OF THE fULL AMOUNT OWED ON THE ROME EQUITY LOAN. 

ASHWORnt AND WELOI widemaocl and Igrec:!hal rbere .... m be: 00 COII))fWQis:cs on Ibe c,n 

I.mOUftI due md owed on !he Home Equity f..Nn &S of !be dale p&)UICfII is: received by LONG 

..... CH. 

1. If ~I Iblr en1 of dJc 9O-Day-l"eriod LONG BEACH is r)OI: pailS 100"10. OF THE. 

FVLL AMOI..INT OWED ON THE HOME EQUITY WAN thtoulb ASHWORTH AND 

WELCH'S &11 or partial "ro...c;:nc .(jf lhe H,,,ne Eqwty Lou lnCVoc .ASHWORTH AND 

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WELCH luivc nol paid 100% OF THE FUU AMOUNT C?WED ON' THE HOME EQUITY 

LOAN. ASHWORTH AND WELCH "vee ttw the: Deed in LiCII ofFOf«;1osun: ..,ill be; relcucd 

!Tom escrow, lnd !he holder of the Deed orTrvst"";lI tUe lille 10 IIJ1d poS$e:nion or,lle Property 

wilbow. ajudicial foredocun: ~1Ig. 0', in the "ttenQlive and ~ iu opIion. the hvldcr orthe. 

Deed of Trust rcWllS the rip to judicially foredo" on the Property and puBIWIIIO thu richt. 

un judi<:RJly roru:lO$e' on !he Propmy. ASHWORlH·.\ND 'WELCH agre" 10 vacate the 

Pitlpnty Iry the md orthe ~,..pt:riod., which u by 5:00 pm. 011 Thwsdar. Jlme 19,2003. if 

1000-' OF TIre FUll AMOUNT OWED ON TIfE HOME EQUITY WAN has no!: been paid 

ill filII by Ibat date (ather by a rc.linlnte andfOf" wilh ASHWORTH AND waal's I;/III'!I 

r~). ASHWORT1f AND WEUl{ fVrthtr agee: M llO c:Bmmif wute: on me Proper!)' or 

cop~ in my.as lhu would intpair Illk to !be Propertyor!he vallie of Ute Pn:Ipcrty. 

3. LONG BeACR -sr- 10 p,ay ASHWORTH AND WELCH the: slim or 

TWENTY rnOVSAND.AND 0(1(100 OOUARS (SlO,CIOO.OO)tc:n (IO) b=- days .. tter!be 

date ASHWORTH AND WELCH pay lOW. OF THE" FUlL AMOUNT OWED ON l1iE 

HOME EQUTn' LOAN. HOWEVER. iCa11bc end.orlb.: 9Q-Day·Pcriod 100% OF THE FULL 

AMOUNT OWED' ON THE HOME EQUITY LOAN lIM nol been paid in full 10 LONG 

BEACH. L~NG BEACE:J "",11 PlY ASHwORrn AND WELCH the n1m of fIFTEEN 

rnOUSAND AND (1)'100 DOlLA.RS (515,000.00) teD (10) b .... inUJ days Lftc:r the Qld ordl~ 

9O-Dty-Pcriod, as long as .ASHWORtH AND W£LClf hay", ~Iod Ita: Propcny. as 

ASHWORTH AND. W£LOf Ul"C aped in panCf¢ 7 or Ihis I\&TcemQlL 

~. ASHwo~rn AND WELCH agree thai. LONG BEACH'S eounsd hu provided 

ASHWORTH AND weta-c's ~I with a ~ ""'irI, that W .NG BEACH ad 

W~on M"lUal bY<: ~uet:led .11 credit buraus- 10 wnicll LONG BEAOi ~ Wuhintton 

lIIuI\W Blink. F.A.. n:pon 10 n:movc any ... rneacc III 1"ora:1o" .. e from A.SHWORTH AND 

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WELCH'S er~t reports. ASHWORTH AND WELCH agree lhac the lett« from tONG 

SeACH'S counsel regardin! the dch::tio~ of~lOfeclosw-t~ ~g will nor boI: UKd It lily Icpt 

proce:cdinl by ASHWORTH AND WELCH qaWst toNG BEAct:t or any entity Irrilated .... ith 

LONG BEAQI, ASHwoam AND WElCH agree tN.1 the leUQ' trom LONG BEACH'S 

SlO·o.y-Period; if th .. bol.dou oftht: Deed o(Tnua c lects to judiciall), ronclos.c.;It the end of Ihc 

9O·D.,..Pcriod as sec forth in ~ppft 1.bovt. '(orec:loswrc' ~~ for that ronclos\lR:~)' 

be made. ASHWOR!H AND WELCH I~ that lICithc:r LONG BEACH nor its afliliates are Ol'" 

will bcresponsible foe ~ credit bunzt's dccisioa toTemcnoe, or DOt ~cmovo. sUd rcrrf~ 

10. ASHWORTH AND ~ 'cree 10 di.lmis.s aD Ibci~ cWlns. ill 1!xU m~ 

with ~ in Ibc Lawsuit b)' 5:00 pm. CcNral StandCd T_ OQ MMCh 21, 2003, LONG 

~EACH apes to dismis5 ilf dUDs' for bud, fnlJduJmt i~l. conversion, AnCtiom. and 

the Atin (jump $tnuu Raurz It. Feld UP~' r_ iDo..lm:IIiI iDlhc Lall"aUI wilh prqudice 

l,pill$! ASHWORTH AND WELOf wlth tapcd io!be ~c Equity Loan by 5:00 pm. CtJml 

$landud Time on Mardi 21, 2003, irthis AIJCcmCnl aad \he Deed in Lieu orFom:loJV~ have 

be::n e;(=~ by ASHWORTH ,AND WELCH and roecived. by LONC BEAQI'S eINI\Jc! b)' 

that lime and dill!. LONG BEACH wiU diRl'liu its claims for!JrtaCh ofconlTlCt with pntiudic:..i 

~P.ilUI ASHWORTH AND weLCH wilb rapcct to the HoDic eqlliry Loan 01\ !he dale !hat (l) 

LON(; BEA~ U paid 100% OF nm fVLL AMOVNT OWED ON THE H~E EQUITY 

WAH; (2) !be bolckl- of tbec Deed o(Tru$l COOIpIcte; its judicial (om:Iosun: 011 Ihe ~y It . . 

iu optioa; or (3) !he !ked in lial of For=loIur-e is rduscd &ocn escrow IlId tile holder" or the 

beed o( Tr"I#! t.Ices tilk 10 .nd: pt""' 'M o(!h. Property without I jud'oci'l proo;edute II. iu 

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• • 

\1. Provided ASHWORTH AND WELCK and LONG BEACH exeCtlle lhi~ 

"~ent by s:oo p..rn. on March 21. 2OOJ. and IIPO'- fuJI e.o:c:cution or Ihis Asro:nnent. 

"SHWORTH AND WELCH Mly rclea$D. \Qivc. discblfJe.. (O~ acquit, nd etl'VCrW\t not to 

AIe.n)' and , II past. prc:scu!. wi ~cnlilit:s.,.d penoM rdllled 10 or .aiUalcd.n1h LONG 

BEACH inclvcl.ins. but not lu,ulcd 10, LONG BEACH -=I iIIll past. ptUent. Load fuhI~ paralt 

eorpon.tions., subsidi~ ~ions. ~ pfedc:ttuors. affiliated torporUions. offiecu. 

dira:;son. employe". sb:udIol6en, aps.. auGnlC)'s. re~ti ... c:s. insureu, amps., pvtnen., 

and ~ Uld .. 1 pcnons, M111nl or ~ ill privity with Ihefn. &om any W In 

pu&.. pn:.scnl. 01' N~ eI.titns. ~ and d.amaets. bowr:t or uiIlcnowo. ~a:S or 

IInsuJpeded. wising out o( 01' rdIiai in lilY .. ay to !he HOIDe' Equity £.om at iuue. the 

origination II.t'Id 5CfVitil1t of tbc: Rome. E'qIriIJ loaD. lhe Tau Horne Equit)' Note cblcd as of 

MalclI 26. 1999 {the: '"Narc}. th.= Deed Df"{lUSl" any CorecloSln procudlnp. tile TWl$lClioAS. 

!he "Property, any «edit rc:portir« ~ Ibc Home Equity l..oaft. any of the c:Jaim s« forth 

or wbic:b collid h .... O' ben set (onh ill the Lawsuit, ·md .... y 0(1he r.cts IInc1 matten" opon whith 

the: claims and ~ Uwsu!t ""III'm based. Provided ASHWOltIH ANI> WEt.CH and LONG 

BEACH CXc:Ql\C tbis ~by 5:00p.m. oa M:lfCh21, 200J. UKl ~ iuD cxCClltoo orlhis 

Atfl:t:ment. WNG BEACH will !'IInytdQJ&, waifto d.iscIIargc. ~YQ" aeqllit. and COVU\lft not . 

10 we ASHWORTH AND WELOf. It« a~ ~e)'S. reprcscnutivcs. uda.mplS. m4 all 

cPil1l5, coarrovetSies, md ~ nWA or untnawn. ~ Qf \I1I.uspcctcd. .trisin, OIIt o( 

or reWed in any way to tho ell:hns Kl forth in the laww:it foe- bud. tta.dulmr ~nl, 

!be lrwsmt with n:sped 10 Iba Home f:qaily LoltL. The hn:i.cs II;)- dlil A&ru:r.xnt bcJapy 

.C1>pm:sly .:knowrcd&e _ consmt WI die rdQsc:J.~. waive"$, 1ICqIitlab. azict 00"tCI.uts 

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• • 

injuty, ~ dilm'Sc:s.· sWutoty ~ c::ttmJWy ~ pJnitivc ~ ~ 

dZllllgt:J &ou!# pursuBII to WI, fedenl. stale Of IoctII.ws,:1I1d lOt damagtS Qfwlutcva tiDd Of 

chIIraeI~, ~ pas!. (II" AlNt: ~Icd bdJnI .. y tribuaal iocIlICIUia faknl. sw.; and 

bmblIpky t;:OUttJ aM NrJ ~ age:rq, wbii::h'" Parties auynow have, hllve had in the 

pl5t.or hcR"do::r ~ lia'f'CarisiDIourorlhenuncn~bylhisA~t. HOWEV£R, fie 

p~ expressly I!:I"CC tfw ncchirtJ hmin RaIl tebse. ~HWORTH AND WELCH fi"orn tile · 

Home Equit)" louI.. ASHWORTH AND WELCH'S ·ob1iptionc under- !he. NQ(e and Deed of 

Tra ~~ to !he lfoIne Eqaily l.om,. and. LONG BEACH"S clllm$ b" bt:=acb o[coattxl. 

Ipin1t ASHWORnI AND WELCH. until the dIle ~ (I) LDNG BEAOf i5 paid 100% OF 

THE FULL AMOUNT OWED ONTRE HOME EQUITY LOAN; (2) lht bctlib of!he.Dced of 

T~ completu its judietlJ fbRclOlll.re on tbc P'rope:t)' II its option; or (1) the Deed in ·Ueu of 

tNt natblng t.cmn shall ~Ieuc,. II its option, the ript of the bolder- of !be l)c,ed orTna" 10 

judici2lly ro«:cbsc= 1m Ihf; P!openy,.1 tllc end of the 9O-DIY-Period as set tbnh in l)lng1ph 7 

lbove. 

12. ASHWORTIf AND WELCH affum tbc validity of (be Home Equit)' Loari, tile 

A" ........ 

. 14. ASHWORTH ANn· WELCH .~ tfiaI ibe:y ":"ill "be:- .y IIOd -'I cost. of 

reIi~ns: the Rorne Equity Loan.. 

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• • 

PWlUBt to ltv: dlllil::S sd fonh in ~$.ApumcrII or ~1Jt &/Iybreach ofillis Apement. 

16. It is Iiutbet vndtntood and • .,-=d tbas pursuant ID p~ 10 above, 

ASHWORnl.AND WELOi will appcQV8andjoinill~iA&1o ikCoult in wbidallK Lawsuit 

is pQ"dill3 an Apeo::d Monon and Ord=r DC OUmisnl with l'reju4itt.. ~"wi'Ih prejadicc an 

claims in theit" tntin:ty !m:U,lcI"A- by ASKWOR'l."" .AND WELQ{ apiDst LONG BEACH it! thE 

t-S!oIit and aU cbiln5 btOIIs,tt by LONG BEAOf apinG ASHWORTH .vm WELCH for-6ud.. . 

• . feu inaJm:d in the Lawsuit witb I"Up:CI to the- HOJDC l!q\ity 1oJn. .wi wittl costs of 

UIWl 1Ad.~' fees {;Q;CIIf Ipinst Ibr:patties: ineurrinlwne. 

11. ASBWOltTIf .-fo.ND WELCti (b. Mrdty Iiznbet and MmDt IhIr" U"ct:p: 

a set forth in ~ II below, 00 other person Of altity has or hal; b.d ~ ioI:oests in the 

claim .. ~ oblipdvn$. or ~ of Klion rdwod ben:!. Ind 1M ASHWORTH AND 

wa.ot have- the $Ole rigN mel cz.c\Li$i"n auIborily \0 ecealle W. "'~I ;aocl r=oM: flrit" 

claims., if UI)'. ~ LONG BEACH; a.od dIM ASKWORrn .AND WELCH h&~ not sold. 

_gna1. transfemd. co~ or 0Ihawisc ~ or _y DC ~ clainD, danaJ)ds, obliptions. Of"" 

C3I1SCS of Krion Ideucd bemn. 

18. ASHW~l"H AND WEI.£H c::lpI"CSSI)' repn:smt mel ...-.nnl thas 1bcir ~ 

G. " . lid)', m. lerome 0.. F"Jdd,. -t HaId'l ok Iabos. lii0i)' haw: or I!"Y bave bd ~ ill he 

d.alnu, demands. obli~ _ eauJCS oC ~ n:b&od .ben:in; ibM ASHWORTH AND 

WEt..CH ,.~ \ht :I01e ris:bl aod a;~usiYe mhoriI'I 10 c:II~ lIliE ~I u:d ~ Iho: 

claims. demands., obliptionr.. ~d. ~ olldioa rek:ltScd herein: an! IbII ASHWORTH AND 

·WELCH have. DOt otbc:rwise sokf, assipod.lI"IIISIi:m:d. can .... yod or dispo.cd gCanyoCIbt claims. 

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• • 

bold Iwndcu LONG BEACH and mil and .11 of its Umnncc f.AIria1, ~ _Jell!', XfVXIIs. 

employees, usi~, pJltnta, ~ips. ~ives. otrlCClS, dir=on, shartfto/den, 

SlIc:a:sson. ~ sub$kiiary COIpOl1KiotIs, atfiliak: oorpontioas. abd partnl ~ 

\OgeIhef with Mrf such persons' or mtitia' ~ ~ o~ diredOtS, tn'fIlCI)CCS. 

iltt«DC)1I. -JC'llS, R:pteSCn1IIdwes., auiJIl" and shxehoIdm, &'O!n .. y liabilityw claim o(ti.bWry 

ro.- ASHWORnl AND WEl.CH'S ~' rea wisUIa Id or tac: InIItar$ rdC8:llld hen:itI. 

whether the AIDe be DOW blown ofn:aJizcd. and &I:uI:II1y liabililyorcl.lim oflilbilify fw breach of 

their ~ md warnmies cec I'ortb.in Ihi5 Ap'tcmmt 

19. ASHWORTH AND W'ELCH and. LONG B.EAOI do henby Iluth« repn::smla 

~ tbai they ~ have ~ witb Ibcirown ~ repnlina Ihcri~ ofilipion" 

~ve ~ into lila Agru:mmto!their awn he wiD UId ItUIfd and in ....-nd...xe"';!h Ihc:ir".,.. 

jlldpncnt alI:ft' rew:lint the tnrirdy of tlUs ADftmcnl. and after fiaH coosultation wiCb Ihdr 

tttome)'S. and tbey do hereby .ffirm undc:r oath ~ tbc:Y have not been indlIad to erucr ioto Ujs 

I+.grtcolCIII. byany~ancm. XC or~ oranykind OId1uaetct, tte:epl &$ txprtS:S!yset 

forth herein. OIl. It1c ~ oftbe P'1ltitf or 011 !he pm of I.he hrtIC$' IUome)'f. qaIIS. =-1:1" 

~ ~ or~1iva. By !he ~ oflbis ~ ASHWORrn Nfl) 

WELCH _ LONG BEACK ..:tnowkdae ~ to !he' o:;J;kIIt HIt forth ha-cin, ;f is Ibcir iM::nIioa ti:t 

nzsopeded, Of realized and thai: ItJeybncoot bo= com;:cd in v.y warto ~ct into dliJApcmcu. 

.20. ASHWORtH AlID WELC1f idcno",lccIp md _gee thai tlIis A~ iI a 

~ &ettltrnenI ofd.ispalcd danu, and rrotbinI ~ shall ~ not sh.Il it be 

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• • 

WNG BEAOf, all fllbility, hull, ~d r~lj l)'!:Iei,,! expre$Sly denied.. 

21 . If is ~y undcntoOd and ~ by the Parties ItZ the I.IInn$ or this AlfClCmenl 

Ire ~ and fI!'( merdy n::ciQ.ls lid thai the Idc:ascs u set forth bc:reln shall not open" 10 

rc:kasc!he. Parties &on:! tbeir duDes 01" obtip1ioo.s ~ .10Mb iD dis Ap.:emCllt. fllMc:r, if~,. pifty 

to ali1: ~ is ~ 10 onro.a ItDr ~ wIIidt the Parties .~ is- enbtc:c:able. by 

kpl. 1Cti0lt or OI~ ~ pc1y c:n/"on:ial INS A~I 5haIl be c:nti:dcd to RCO"Wa" its 

allomtyS' rees...eosts..-I Q"PCAU$ rrw. Iht brShing pxt)'. The Partier fit:rtbct ap !hat am, 

~ maybe plcaiXd ... oompl*d.r.n.o to.. mil U$ed!lli thelnsis lOr loll iljwcticln qUm. 

any ICIion, suit, orotha-proec:cdilll bacdoo.tIIims rek&sc:d. by this A~ 

22. ni. ~ contains lh.aJtirc ~l with mpcet 10 mc$Sl:~sct I'onIl 

hetein bdwoea tM PJric:s,.. This Ag:rI:snocnt embodies, indudes.. ma-ges ~ iatqnlcs II' ~ 

priOl" ~ curn:nt agm:mcII~ arxI "!IIIdenbodiAp berween ASHWOltTlt AND WELCH Md tONG 

BEACH. and this Aa;rttma:It may not be modltied, chq:cd, 01" arncnde:d acc:pt in ,,""liD, aod. 

sipod by ASHWOR.1"HANI) WEl..Q{aod LONG BEAOl 

23. 10 ..sdition II;) Il)e IdS rc:ci1IId in thii Agrmnent 10 be pet"rormed. by !he PIlIies. Ihc: 

Puties .-= 10 pcdOI:ll\ or t;.mSIC ID be perlOrrocd. OIl or .JW the execution or 1hi5 ~ my 

and. aJl _11 Mthcr" . ..a.; as 111<1)' bI reiIIIDIl<Ibly ~ 10 ~ the ~ 

eoi1I~ hcftin. 

or mon: 00tIt"Itttputs. c:xh of IIo'bkh sIWI be deemed an orizinaI and. an of wbieb. td:m IDp:Iher 

shllf constitUst one and the: $IIlIC" inmImetIl 

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25_ TOe- Panles :litl:ct INZ Wy...,u beN cbc:it 0"",," cosu.Illd

• Illbrt,~ , (m. ... nic:1l 

~ ~d ill ~ ..a Jb~ t..",,"il II'Id the ""'I'Itl't rdu~...s 1u:rci1).. LONG 

sr,....w <Iou; DQl ........ lILt: ~(Il!\l)1 , ~ w rnsn: incutrtd II tOMCC"Iio4 ~Ih Ulr JUS! 

fmcicsW't pcoecC'dirv (10 III. c.UDII'N'iI Ce.s WId tMlJ M"e pr: ... iolld), i:H:II IlkDlilird.,.an 0( 

II or (be r_o:nb~ bllml:l: "" 'Itw ~)Otr Of&PIftli d~t4- D«ecQbct 2. 2002) Of" I'IIDItC 

b',d""'u;!~ 

26 TIMs ~ ,'hdlk bIt-,:bs ItId Uun 10 !he Itcatlil of !lit rtSp(C~e I\dn, 

c..m.s.. ~ ~~ n:ptcsamliva....ucss.on. pet!..."Cn~ US1" . ..n~~ 

fJc'f., lIIorne)'S'.-Ia ... : ~tric:cn. 41CC1:11S, ~ ' II;a'Ill, pIIJtIIt «I!JO'¥QbIu, 

~ tAd Illiiucd torpona-,. ~ IIOd IMuun of Itw ~i_ Pa.ni<:s- btrt;\Q, 

LONa 8EACH ),(OItTGAG£ COktANY 

IOaIrcrfr cl.1IA FlHAHC1NC USA 

8Y-___ ---, ___ --'-__ 

~~----------~----

---.---------_._---_ .. _- -----

; 

I 

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, 

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I 

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" ,-

247
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25. The PaUc:s ~ Ihar'lbc:ywld beaclbeilO\W'A c:o$U. iDcluding~' fra.. which 

_" ~ U! caDlec:Qcn wid'l12Ie La~ mel the ~ n'kased ~ }P,I:IoCT.lONG 

BEACH does noc waiw die anotDIe)S"' fees tDd mszs ~ in COUAtaioI:I witb my past 

fan:clMure prot!"ldings (lo du: c:ueutAcii frc:s;md eom"baYe ptC"fiously ~ iG=Ii'filid u pan: orall or lhc: ~ bUracc on !ba pI)'Off.....,......... d.uaI ~ 2. 20(1) or fiob.= 

£:.r.:c:~~~ 

26. no Agreemr« an be 't:udia& &lid ~ to cb: bcAc5c ofl:bc rcspccIivc bein,. 

t.o:dIies. cta:lIItId, ~ J"P'T"""'wrives, ~ predl'CT!!"n. uti ... ~ 

fKt. ~ ....... ~ ~ dwDoHc:rs. tmp~ ~ ptrmI. azpcndc:cs. 

subsiliZ)'..t alfi1ict:deorprorioM. atfilic:s. mel iasanz! atlbr respective PInks hcn:Io. . 

----_._------ ._----- .... _-_._._._. 

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I 

I , 

Case 03-46247 ~ 

n-.<'1·2IlIiU U''!8 

Imenl 20 FHed in TXSB on 03122: )4 Page 51 of 66 

., ... - • 

sr .... n. Of T'!'XAS 

COUNTY ot.,l?uarrc~ 

I 

, 

, 

B£FOflE kE.1fa,j -=apcot N.-y ""!:it,. 0- 411 dIy p:noAIIly .,pnrc6 ?AUl..A, 

waot. ~ ICI_ ~ bclile pcDI)Il wboul:lCll iJ Al1IIa:W1I:I she Jx~ ~ SJIe 

txpleu« 

~ 

Ift tlle~~ 

~ me ~. CUCUII:d die ~ fasutAcIIl (III' Ihr.~ 4l1li ~ 

~hT;M>EJ. fW«) AND S£AL Of omcr l1li, ~7 of 

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",1~ 

---_. __ ._---------------.,.--_.- - _. ---.. -_._-

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, 

,.,.; 

, 

249
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ST "Tf OF TEXAS 

COUNTY Of. B/TZheJ·o • 

I 

• I 

• 

BUORE ME. IbM Wl4QSSpcd ~y ~ GIl ~ ~) pa'SClDIoIIy -.ppurod clYDE' 

ASHWoanf, booVIIOVQlll! &0 __ pe.-. wbose..-~~ IOl>oe"fDr~~ 

He >C.Iaoowlcdtcd II:! .. _ ho:: ~ ' Ibc ~ iPslNllCPl !of the PlIIl*n InII 

~_ expmscd iIIw 1Dn:ao<II&~ 

/?J!r-:mg lJM)EI. .~ ~ ~ or OIfiCE lIIi, Ihe~r of 

(~=- '.if' ... ~- ~~ 10~ 

S&acorTan 

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-_ .. _----_ .. _._--- --..• --- 250
f rOrl : 

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·ll-fl If :l. I,.-,u.,+ 

STA'IEOF CAUFORNl!\. 

coumYOI' ~ull1 

., 

I 

, 

JJ'.au--oe r·m ' .IVlJ HII 

.f:,(~::ia:- taaimi~~:k:'::'~~ .. = 

10 lbe ..... ioa~. J:idW~ riO me _kIIbe CltaIIII4cdis dlUy_lvrized 

10 _lbt t.q;pi;Da ~ bldr:_ or.s c.a bdIIJ{ail..ONQ BHAai MOR.'I'GAClE 

"cOWPANY. r..:dy 4JbIa FINANCNG USA.,1br1lae JU1I05ICS'" ccaaide1ldoa eqn:sad ia. . Ibrm~iaw __ 

~ UNDER .~ ~ AND sw. Of ()ffICl;".. .. ~..., or 

Ny CommlniOQ £xpirts: 

~kc3Qn? c --<>I>/ooay) 

. CC»1rt.01«t5l: ~D ~ MOII'1'kI1'f1' AND t$UAJI- ..... 15 

._-----.. _----_ ... _. 251
Date: 

Grantor: 

III1I1IIIIII1 • PGS 

DEED IN LIEU OF FORECLOSURE 

March 21 , 2003 

PAULA A. WELCH AKA PAULA ANN WELCH 

AND HUSBAND, CLYDE ALLEN ASHWORTH 

Grantor's Mailing Address: 

1625 A venue L 

Santa Fe, Texas 775 10 

2IIJeI5S26 

Grantee: WELLS FARGO BANK MINNESOTA, NA. fonnerly known as NORWEST 

BANK MINNESOTA, NA, as Trustee for Salomon Brothers Mortgage Securities 

VII, Inc., Floating Rate Mortgage Pass Through Certificales, series 1999-LBI 

Grantee's Mailing Address: 

Sixth Street & Marquette Avenue 

Mirmeapolis, Minnesota 55479 

Note: Texas Home Equity Note dated March 26, 1999 in the principal amount of Two Hundred 

Seventy Thousand Four Hundred Dollars ($270,400.00) bearing interest as stated therein, 

executed by PAULA A. WELCH AKA PAULA ANN WELCH AND HUSBAND, CLYDE 

ALLEN ASHWORTH, and payable to the order of LONG BEACH MORTGAGE COMPANY 

DBA FINANCING USA, a Delaware Corporation. 

Security Instrument: Texas Home Equity Security Instrument, dated March 26, 1999, executed 

by PAULA A. WELCH AKA PAULA ANN WELCH AND HUSBAND, CLYDE ALLEN 

ASHWORTH to FRANK J. CURRY Trustee, securing the payment of the above referenced 

Note. Said Security Instrument filed for record in the office of the County Clerk of Galveston 

County, Texas on April I, 1999 under Clerk's File No. 9915359. 

Said Security Instrument having been assigned to NOR WEST BANK MINNESOTA, 

NATIONAL ASSOCIATION, AS TRUSTEE, by instrument dated April 2, 1999. 

Consideration: TEN AND NOl i 00 DOLLARS (SIO.OO) and further the release of Grantor 

from all liability for the indebtedness and obligations under the Note and Security Instrument, 

except that no release is given of any liens or warranties of title and further except that the 

indebtedness under the Note is not canceled or extinguished. 

Property Legal Description: Lot One Hundred (100) ofTHAMAN'S FIRST SUBDIVISION 

in Ihe East !.4 of the Mary Austin League, located in Galveston County, Texas, according to the 

map Of plat thCfc:of re<;orded in Volume 23 1, Page 6, in the office of the County Clerk of 

Galveston County, Texas. 

EXHIBIT IIIB" 

182
Exceptions to Conveyance and Warranty: The liens described in this deed and the exceptions 

to conveyance and warranty in the Security Instrument. 

Grantor, for the Consideration and subject to the Exceptions to Conveyance and 

Warranty, grants, sells, and conveys to Grantee the Property, together with all and singular the 

rights and appurtenances thereto in any way belonging, to have and to hold it to Grantee and 

Grantee's heirs, successors, and assigns forever. Grantor binds Grantor and Grantor's heirs and 

successors to warrant and forever defend all and singular the Property to Grantee and Grantee's 

heirs, successors, and assigns against every person whomsoever lawfully claiming or to claim the 

same or any part hereof, except as to the Exceptions to Conveyance and Warranty. 

Conveyance in Lieu of Foreclosure. This deed and the conveyances being made are 

executed, delivered. and accepted in lieu of foreclosure and will be interpreted and construed the 

same as a foreclosure of the liens and as an absolute conveyance to Grantee of all right., title, and 

interest in and to the Property, including specifically but without limitation any equity or rights 

of redemption of Grantor in or to the Property. 

Continuing Nature of Lien. Notwithstanding the release of Grantor from all liability for 

the indebtedness and obligations under the Note and Security Instnunent, the indebtedness has 

not been canceled or extinguished and the Property continues to be subject to the perfonnance of 

the obligations under the Security Instrument. The Security Instrument lien is not released or 

relinquished in any manner, and the indebtedness, obligations, and lien will remain valid and 

continuous and in full force and effect, unless and until the indebtedness, obligations, and liens 

are expressly released by written instrument executed and delivered by the holder thereof:, at the 

holder's sole discretion. 

Nonmerger. Neither Grantor nor Grantee intend that there be, and there will never be, a 

merger of the Security Instrument lien with the fee simple title or any other interest of Grantee in 

the Property by virtue of this conveyance, and the parties expressly provide that any interest in 

the Security Instrument Hen and fee simple title wlll be and remain at all times separate and 

distinct. 

2 

183
tfl<VY H'l1) J ~ 

J 

GRANTOR: 

rih!l/tJ~ PAULA A. WELCH AJ(A PAULA ANN 

WELCH 

GRANTEE: 

P.04 

WELLS FARGO BANK MINNESOTA. NA 

FORMERLY KNOWN AS NOIlWEST BANK 

MINNESOTA, NA. AS TRUSTEE fO!). 

SALOMON BROTHERS MORTGAGE 

SECURITIES VII. INC:. FLOA TlNO RATE 

MORTOAGEPASSTHROUOH 

CERTIFICATES. SERIES 1999·LBI 

N~ 

Y~~ Title: First Vice Pres;id!::nt of 

Long BeacI1 _~_. 

the attmney in fact 

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i'"H'<IJY HNU J lH'I::o 

STATE Of TEXAS ) 

COUNTY OF ~l:4' )S5 : 

) 

The foregoing instrument was acknowledged before me.on ~ty of &cJ, 

2003, by PAULA A. WELCH. 

[SEAL] 

My Commi"ion .xpi, .. , Lt {I D (ot 

STATE OF TEXAS 

COUNTY OFJ3(II2M'i 

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)ss, 

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Printed Natn£ of Notary 

1be foregoing instrument was acknowledged before me on ~ of/l1nl,. 

2003, by CLYDE ALLEN ASHWORTH • 

[SEAL] 

My Commi,.;" ... pi ... , 4-/10 I D 4 

Printed Name of Notary 

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STATE OF California ) 

)ss; 

COUNTY OF Los Angeles ) 

The foregoing instrument was acknowledged before me this 14th day of November, 

2003, by George Cooksey, First Vice President oeLong Beach Mortgage Company. the attorney 

in fact of Wells Fargo Bank Minnesota, NA, on behalf ofWell ~ Fargo Bank Minnesota, NA, 

formerly known as NOIWest Bank Minnesota, NA, as Trustee for Salomon Brothers Mortgage 

Securities VII, Inc., Floating Rate Mortgage Pass Through Certificates, series 1999·LBI. 

California 

My Commission ex:pires:S;·~t ,-;00, 9<l W "t&.-ren--rJ 

Printed Name of Notary 

FILED AND RECORDED 

OFFICIAL PUBlIC RIlCOROS 

n.rch 14, 

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FEE: Sl2 .01 

Dwight O. 5&.I1I1v .. ". County Clerk 

Gai ..... tOl'l Count.y, TEXAS 

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186
1/2/2014 11:22:41 AM

JOHN D. KINARD

District Clerk

Galveston County, Texas

NO.13·CV·0422 

MID PAC PORTFOLIO, LLC § IN THE DISTRICT COURT 

§ 

VS. § 

§ 

PAULA WELCH, CYDE ALAN ASHWORTH, § 

AND WELLS FARBO BANK, MINNESOTA,NA § 

FORMERLY KNOWN AS NORTHWEST § 40Sth JUDICIAL DISTRICT 

BANK, MINNESOTA, NA, AS TRUSTEE FOR § 

SALOMON BROTHERS MORTAGE § 

SECURITIES VD,INC. FLOATING RATE § 

MORTGAGE PASS THROUGH § 

CERTIFICATES SERIES 1999·LBI § GALVESTON COUNTY, TEXAS 

STIPULATION AND DISCLAIMER OF DEFENDANT cmGROUP 

GWBAL MARKETS REALTY CORP. 

COMES NOW, Defendant Citigroup Global Markets Realty Corp states that: 

1. It was served with the Amended Petition for a Declaratory Judgment filed in this case by 

Mid Pac Portfolio. LLC on July 24, 2013. 

2, Citigroup Global Markets Realty Corp. and Mid Pac Portfolio, LLC executed a Master 

Asset Sale Agreement dated June I, 2012 under which Citigroup Global Markets Realty Corp sold 

and transferred its interest in the Paula Welch! Clyde Ashworth Deed in Lieu to Mid Pac Portfolio, 

LLC as an REO (Real Estate Owned") asset. 

3. A copy of the Deed in Lieu is attached as Exhibit "E" to the Amended Petition filed by Mid 

Pac Portfolio. 

4. As a result of the sale, Citigroup Global Markets Realty Corp no longer claims any interest 

in the Deed in Lieu or the property covered by it. 

5. Consequently. Citigroup Global Markets Realty Corp disclaims any right, title or interest in 

the real property at issue in this case. 

6. Citigroup Global Markets Realty Corp consents to the entry of a judgment against it in 

favor of Mid Pac Portfolio, LLC providing that Citigroup Global Markets Realty Corp sold and 

transferred its interest in the Deed in Lieu to Mid Pac Portfolio, LLC provided that the judgment 

115
as to Citigroup Global Markets Realty Corp is IN REM only. 

7. Plaintiff Mid Pac Portfolio, LLC agrees not to pursue, and waives the award of, any 

monetary damages, attorney fees, court costs or discovery against Citigroup Global Markets Realty 

Corp. but not against any other Defendant in this case. 

STATE OF NEW YORK § 

COUNTY OF New Y,(t § 

This instrument was acknowledged before me on the :<5 day of Seph ... b" r , 

2013, by JJ+I'-\e.s G.tld..JA. .... J who is the Vk.L P/'ls, dt ... .;-- (capacity) 

of Citigroup Global Markets Realty Corp, on behalf of said company. 

SEAL S;~ - My commission expires: 

JlAl'le.l&, 2015 

Mid-Pac Portfolio, LLC 

RODDC0RNER 

_ry Public - Slate of New YO<1< 

No. DICXl6169041 

Qualified.in New York County 

My Commissi6n Expires June 18, 20U:S 

BY~ Michael Burns 

Texas Bar No. 03447980 

8111 LBJ Freeway, Suite 1501 

Dallas, Texas 75251 

(214) 276-1545 - Telephone 

(214) 276-1546-Fax 

116