Opinion ID: 2757409
Heading Depth: 2
Heading Rank: 1

Heading: Declaratory Judgment and the TDCA

Text: The Whittiers’ primary argument is that neither Deutsche Bank nor Ocwen is the current assignee, owner, or holder of the note or deed of trust and, therefore, neither has the right to foreclose on the property. The district court rejected this claim and denied the Whittiers’ motion for declaratory relief. The district court determined that Deutsche Bank was entitled to enforce the note because it had possession of the original note, bearing a blank indorsement. We agree. Under Texas law, a bank in possession of a note indorsed in blank is entitled to collect on it. The Texas statutory definition of “holder” includes someone who is in possession of a note payable to bearer. See TEX. BUS. & COM. CODE ANN. § 1.201(b)(21). “When indorsed in blank, an 3 Case: 13-20639 Document: 00512856290 Page: 4 Date Filed: 12/03/2014 No. 13-20639 instrument becomes payable to bearer” – in this case, Deutsche Bank. Id. at § 3.205(b). This court reached the same conclusion using a similar analysis in a non-precedential opinion. See Kiggundu v. Mortg. Elec. Registration Sys. Inc., 469 F. App’x 330, 331 (5th Cir. 2012). The Whittiers now argue that the note is not enforceable because it is not an original. This argument has no merit. First, there is no evidence that the note presented to the district court was not the original. Second, the original note is not required as evidence under Texas law. “[E]xistence of a note may be established by [a] photocopy of the promissory note, attached to an affidavit in which the affiant swears that the photocopy is a true and correct copy of the original note.” Martins v. BAC Home Loans Servicing, L.P., 722 F.3d 249, 254 (5th Cir. 2013) (quotations and citation omitted). Here, a copy of the note was attached to the defendants’ motion for summary judgment along with an affidavit in which an Ocwen employee attested that all documents were “the original or exact duplicates of the original.” Accordingly, the defendants had possession of the note and were entitled to foreclose. The Whittiers next challenge the actual indorsement. They claim that the indorsement is improper because it was photocopied onto the note instead of stamped in ink. This argument is flawed for two reasons. First, the Whittiers present no evidence to support this argument. Second, even if the indorsement was produced by photocopying, it would still be valid. See TEX. BUS & COM. CODE ANN. § 1.201 cmt. 37 (noting that a symbol may be printed, stamped, or written). The Whittiers also claim that the indorsement is not a valid blank indorsement because it was not expressly made payable to “bearer” or the “order of bearer.” Such words are not required to create a valid blank indorsement. TEX. BUS & COM. CODE ANN. § 3.205(b). Accordingly, the note contained a valid blank indorsement under Texas law. 4 Case: 13-20639 Document: 00512856290 Page: 5 Date Filed: 12/03/2014 No. 13-20639 The Whittiers further claim that the district court erred in holding that the defendants were also entitled to foreclose pursuant to the deed of trust. There is no need for us to discuss this alternative basis for the court’s decision. We also need not address the Whittiers’ TDCA claim. The claim is based entirely on the contention that Ocwen was not entitled to act on Deutsche Bank’s behalf because the bank was not the “true mortgagee” of the debt. We have already held that Deutsche Bank is the holder of the note and thus the “true mortgagee.” The TDCA claim fails.