Court Opinion

ID: 2752362
Source: CourtListenerOpinion
Date Created: 2014-11-18 01:00:54.614406+00
Date Added: 2024-06-11T10:04:48.648569
License: Public Domain

Case: 14-40489      Document: 00512839337         Page: 1    Date Filed: 11/17/2014

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT

                                    No. 14-40489
                                  Summary Calendar
                                                                         United States Court of Appeals
                                                                                  Fifth Circuit

                                                                                FILED
                                                                        November 17, 2014
                                                                           Lyle W. Cayce
                                                                                Clerk
ERNESTO SOLIS; ILEANA SOLIS,

                                                 Plaintiffs−Appellants,

versus

HSBC BANK USA; OCWEN LOAN SERVICING, L.L.C.,

                                                 Defendants−Appellees.

                   Appeal from the United States District Court
                        for the Southern District of Texas
                              USDC No. 7:13-CV-640

Before SMITH, WIENER, and ELROD, Circuit Judges.
PER CURIAM:*

       Ernesto and Ileana Solis appeal on two grounds. First, they claim that

       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
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                                    No. 14-40489
the district court erred in denying their motion to remand for want of jurisdic-
tion because the amount in controversy did not exceed $75,000. Second, they
challenge the dismissal of their claim. Because the court had jurisdiction and
the claim was barred by the statute of limitations, we affirm.

                                          I.
      The following facts are taken from the complaint. The Solises own a
5.29-acre plot of land, of which 4.12 acres were designated for agricultural use
for property-tax purposes. In 2006 they executed a lien to secure a $65,000
loan from HSBC Bank USA (“HSBC”). The instrument covered the entire plot,
including the land designated for agricultural use. In their 2013 property-tax
assessment, the property was valued at $221,483.
      The Solises contend that the inclusion of the agricultural-use-designated
land to secure the loan was a violation of the Texas Constitution, which does
not allow homestead liens to be secured by “homestead property that on the
date of closing is designated for agricultural use.”          TEX. CONST. art. XVI,
§ 50(a)(6)(I). In July 2013, the Solises notified HSBC and Ocwen Loan Servic-
ing, L.L.C. (“Ocwen”), of this perceived infirmity and asked them to cure it.
      The Solises sued in state court in November, asking the court to cancel
the mortgage, order the return of the principal and interest paid for the pre-
ceding four years, and award costs and attorney’s fees. They included a notar-
ized stipulation stating that they agreed to limit their damages to $75,000.
      HSBC and Ocwen removed to federal court and moved to dismiss. The
Solises moved to remand, arguing that the court did not have diversity juris-
diction because the amount in controversy did not exceed $75,000. 1              The

      1   The Solises also contended that HSBC and Ocwen had not established complete
                                          2
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                                      No. 14-40489
district court denied the motion to remand and granted the motion to dismiss.
The court held that the amount in controversy was the total value of the
property, which exceeded $75,000, and that the action was barred by a four-
year statute of limitations in the Texas Constitution.

                                             II.
       “[W]hen the validity of a contract or a right to property is called into
question in its entirety, the value of the property controls the amount in con-
troversy.” 2 Although the Solises portray the district court’s decision as being
based on whether their $75,000 stipulation is binding, that inaccurately por-
trays what they are attempting to do. Their complaint seeks “an order can-
celing the Mortgage” on property that is worth more than $200,000 while also
stipulating that they will not recover more than $75,000. Given our estab-
lished rule that the amount in controversy in cases like this is determined by
the value of the property, it is irrelevant whether the stipulation is binding. A
party cannot sue over a mountain but stipulate that it is a molehill.

                                            III.
       The Solises claim that the district court’s reliance on Priester v.
JP Morgan Chase Bank, N.A., 708 F.3d 667 (5th Cir. 2013), was misplaced.
There we concluded that the Texas Constitution’s four-year statute of limita-
tions applies to infirmities that arise from violations of Section 50(a)(6) of the
Texas Constitution, which contains a list of rules for homestead liens. Id.
at 674. One party may give notice to the other party of an infirmity, and that

diversity, but the district court ably rejected that argument, and the Solises have not main-
tained it on appeal.
      Waller v. Prof’l Ins. Corp., 296 F.2d 545, 547–48 (5th Cir. 1961); accord Farkas v.
       2

GMAC Mortgage, L.L.C., 737 F.3d 338, 341 (5th Cir. 2013).
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                                  No. 14-40489
other party will have sixty days to cure it under Section 50(a)(6)(Q)(x). This
cure provision means that liens that violate Section 50(a)(6) are voidable
instead of void and therefore are subject to the four-year statute. On its face,
then, Priester forecloses this action: The lien allegedly had an infirmity under
Section 50(a)(6) and was executed more than four years before the Solises sued.
      According to the Solises, Priester is inapplicable because their lien is void
ab initio rather than merely voidable. They reason that the only way to cure
the infirmity would have been to remove the lien from the agricultural prop-
erty, so the cure was not really a cure at all. Even if we had not stated in
Priester that the limitations period “applies to constitutional infirmities under
Section 50(a)(6),” Solis’s argument here would be unsuccessful. As the Solises
acknowledge, some of the property secured by the lien was not designated for
agricultural use, and HSBC could have retained its lien on that portion as part
of its cure. This case does not present a situation that demands a deviation
from Priester.
      AFFIRMED.

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