Court Opinion

ID: 2779347
Source: CourtListenerOpinion
Date Created: 2015-02-13 19:00:47.618409+00
Date Added: 2024-06-11T10:55:25.016489
License: Public Domain

Case: 14-50421      Document: 00512936844         Page: 1    Date Filed: 02/13/2015

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                           United States Court of Appeals
                                                                                    Fifth Circuit

                                    No. 14-50421                                  FILED
                                  Summary Calendar                         February 13, 2015
                                                                             Lyle W. Cayce
                                                                                  Clerk
ARTHUR LAGUETTE,

                                                 Plaintiff - Appellant
v.

U.S. BANK, N.A., as the alleged Trustee of Specialty Underwriting and
Residential Finance Trust, Mortgage Loan Asset-Backed Certificates, Series
2006-BC4; GMFS, L.L.C.,

                                                 Defendant - Appellees

                   Appeal from the United States District Court
                        for the Western District of Texas
                                 No. 1:13-CV-495

Before KING, JOLLY, and HAYNES, Circuit Judges.
PER CURIAM:*
       Plaintiff-Appellant Arthur Laguette appeals the district court’s order
granting summary judgment in favor of Defendant-Appellee U.S. Bank, N.A.
Laguette argues that U.S. Bank lacked standing to foreclose on his property.
For the reasons explained below, we AFFIRM the district court’s entry of
summary judgment.

       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
    Case: 14-50421    Document: 00512936844     Page: 2   Date Filed: 02/13/2015

                                 No. 14-50421
                 FACTUAL AND PROCEDURAL BACKGROUND
      On July 11, 2006, Laguette obtained a home equity loan in the amount
of $312,000 from GMFS, L.L.C. to purchase the real property located at 15009
Banbridge Trail, Austin, Texas, 78717. Laguette signed a promissory note (the
“Note”) agreeing to pay $312,000, plus interest, to GMFS, or to any entity that
takes the Note by transfer. Laguette also signed a deed of trust, to secure his
obligations under the Note, naming Mortgage Electronic Registration Systems,
Inc. (“MERS”) as the beneficiary and nominee for GMFS. The deed of trust
explicitly states that “MERS (as nominee for Lender and Lender’s successors
and assigns) has the right to exercise any or all of those interests [granted in
the deed of trust] including, but not limited to, the right to foreclose and sell
the property.”   Laguette alleges that U.S. Bank is a trustee of a pool of
mortgages organized as a trust (the “Trust”). Laguette further alleges that the
Trust is governed by a Pooling and Service Agreement (“PSA”) which sets a
“cut-off” date of September 1, 2006 and a closing date of September 27, 2006.
On December 7, 2009, MERS assigned its interest as mortgagee under the deed
of trust to U.S. Bank. Bank of America, N.A., was chosen to serve as U.S.
Bank’s mortgage servicer.
      In April 2008, Laguette fell behind on his mortgage payments.           In
response, Bank of America, N.A. began foreclosure proceedings. On May 7,
2013, Laguette filed a complaint in Texas state court alleging that U.S. Bank
had engaged in a wrongful foreclosure and had violated the Texas Debt
Collection Practices Act (“TDCPA”). He further brought suit to quiet title, and
asked for an accounting, a declaratory judgment, and an injunction. The 26th
District Court, Williamson County, Texas, entered a temporary restraining
order, which stopped the foreclosure process on the same day. The foreclosure
process has not resumed since the entry of this order.

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                                   No. 14-50421
      After removing the case to the United States District Court for the
Western District of Texas, U.S. Bank moved for summary judgment. Laguette
filed his own motion for summary judgment shortly thereafter. On February
28, 2014, a magistrate judge issued a Report and Recommendation to the
district court, which recommended that the district court grant U.S. Bank’s
motion for summary judgment and deny Laguette’s motion for summary
judgment. On April 2, 2014, the district court accepted the magistrate judge’s
Report and Recommendation, and entered final judgment for U.S. Bank.
Laguette’s timely appeal followed.
                           STANDARD OF REVIEW
      “We review a district court’s grant of summary judgment de novo,
applying the same standard on appeal as that applied below.”            Rogers v.
Bromac Title Servs., L.L.C., 755 F.3d 347, 350 (5th Cir. 2014). Summary
judgment is proper “if the movant shows that there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). “A genuine dispute as to a material fact exists ‘if the
evidence is such that a reasonable jury could return a verdict for the
nonmoving party.’”     Rogers, 755 F.3d at 350 (quoting Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986)). “[T]his court construes ‘all facts and
inferences in the light most favorable to the nonmoving party.’” McFaul v.
Valenzuela, 684 F.3d 564, 571 (5th Cir. 2012) (quoting Dillon v. Rogers, 596
F.3d 260, 266 (5th Cir. 2010)). However, “[s]ummary judgment may not be
thwarted by conclus[ory] allegations, unsupported assertions, or presentation
of only a scintilla of evidence.” Id.
                                 DISCUSSION
      Laguette asserts claims for wrongful foreclosure and violations of the
TDCPA. He also asks the court to quiet title and for a declaratory judgment
and an accounting. However, on appeal, his sole contention is that U.S. Bank
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                                 No. 14-50421
did not have standing to foreclose on the property because MERS’s assignment
of the deed of trust to U.S. Bank was untimely under the PSA.
      We have previously considered, and rejected, this argument, applying
Texas law. See Reinagel v. Deutsche Bank Nat’l Trust Co., 735 F.3d 220, 228
(5th Cir. 2013) (stating that “the Reinagels claim that both assignments are
void because they violated the [applicable] PSA” by taking place after the
closing date listed in the PSA). In Reinagel, we made clear that “[t]he Texas
Supreme Court has established ‘a presumption . . . that parties contracted for
themselves,’ which applies ‘unless it clearly appears that they intended a third
party to benefit from the contract.’” Id. (quoting Basic Capital Mgmt., Inc. v.
Dynex Commercial, Inc., 348 S.W.3d 894, 900 (Tex. 2011)). Accordingly, we
held that non-parties to the PSA “have no right to enforce its terms unless they
are its intended third-party beneficiaries.” Id.
      Therefore, while it is true that the closing date in the PSA is September
27, 2006––more than three years before MERS’s assignment of the deed of
trust to U.S. Bank––Laguette cannot challenge U.S. Bank’s authority to
foreclose because he has offered no evidence to establish that he was an
intended third-party beneficiary of the PSA. See id. Laguette’s attempt to
invoke the consequences of a violation of the PSA under the Internal Revenue
Code is also unavailing, because he fails to show how those potential
consequences affect him as a non-party to the PSA. See id. Even if he were an
intended third-party beneficiary of the PSA, “the fact that the assignments
violated the PSA—a separate contract––would not render the assignments
void, but merely entitle [him] to sue for breach of the PSA.” Id. Laguette fails
even to attempt to distinguish our holding in Reinagel.

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                                      No. 14-50421
      Furthermore, Laguette’s reliance on New York law is misplaced. 1
Although “every . . . act of the trustee in contravention of the trust . . . is void,”
N.Y. Est. Powers & Trusts Law § 7–2.4, “New York courts have treated ultra
vires actions by trustees as voidable and therefore susceptible of ratification.”
Svoboda v. Bank of Am., N.A., 571 F. App’x 270, 273 (5th Cir. 2014)
(unpublished) (citing Mooney v. Madden, 193 A.D.2d 933, 933–34 (N.Y. App.
Div. 1993)). In Mooney, the New York Supreme Court, Appellate Division, held
that “[a] trustee may bind the trust to an otherwise invalid act or agreement
which is outside the scope of the trustee’s power when the beneficiary or
beneficiaries consent or ratify the trustee’s ultra vires act or agreement.”
Mooney, 193 A.D.2d at 933–34. Given that “the essence of ratification is that
the beneficiary unequivocally declares that he does not regard the act in
question as a breach of trust but rather elects to treat it as a lawful transaction
under the trust,” In re Levy, 69 A.D.3d 630, 632 (N.Y. App. Div. 2010) (internal
citation and quotation marks omitted), any violation “of the PSA that allegedly
took place when [Laguette’s] mortgage was transferred to the Trust would
merely make such a transaction voidable, not void.” Svoboda, 571 F. App’x at
273. This is dispositive because under Texas law “an obligor cannot defend
against an assignee’s efforts to enforce the obligation on a ground that merely
renders the assignment voidable.” Reinagel, 735 F.3d at 225.
      We also reject Laguette’s invitation to certify this issue to the Texas
Supreme Court. This court has previously explained that we should exercise
our discretion to certify a question “sparingly, certifying only in exceptional
cases.” In re FEMA Trailer Formaldehyde Prods. Liab. Litig., 668 F.3d 281,
290 (5th Cir. 2012) (internal brackets and internal quotation marks omitted).
Given that the Texas Supreme Court has provided us with sufficient guidance

      1   Laguette alleges that the Trust is a New York common law trust.
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                                 No. 14-50421
to conclude that Laguette lacks authority to enforce the terms of the PSA
unless it was intended for him to be a third-party beneficiary, see Basic Capital
Mgmt., Inc., 348 S.W. at 900, we decline to certify this issue to the Texas
Supreme Court.
                                CONCLUSION
      For the foregoing reasons, the judgment of the district court is
AFFIRMED.

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