Court Opinion

ID: 1040680
Source: CourtListenerOpinion
Date Created: 2013-09-13 05:23:32.372486+00
Date Added: 2024-06-11T12:49:48.617175
License: Public Domain

Case: 13-20132       Document: 00512371692         Page: 1     Date Filed: 09/12/2013

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

                                                                            FILED
                                                                        September 12, 2013
                                     No. 13-20132
                                   Summary Calendar                        Lyle W. Cayce
                                                                                Clerk

MORLOCK, L.L.C., A Texas L.L.P.,

               Plaintiff - Appellant

v.

METLIFE HOME LOANS, L.L.C., A Division of MetLife Bank, N.A.,

               Defendant - Appellee

                   Appeals from the United States District Court
                        for the Southern District of Texas
                              USDC No. 4:12-CV-142

Before DAVIS, SOUTHWICK, and HIGGINSON, Circuit Judges.
PER CURIAM:*
       This quiet-title action concerns the ownership of the property located at
14907 East Lime Blossom Court in Cypress, Texas (the “Property”).
       On February 28, 2008, Thearith Soeung and Maly May (“Mortgagors”)
purchased the Property. They executed a promissory note payable to Destino
Mortgage, Inc. The note was secured by a deed of trust under which Mortgage
Electronic Registration Systems, Inc. (“MERS”) was named a beneficiary and
acted “solely as a nominee for Lender and Lender’s successors and assigns.”

       *
         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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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. 13-20132

Destino was identified in the instrument as the Lender. MERS assigned its
interest in the deed of trust to Defendant-Appellee Metlife Home Loans, L.L.C.
(“Metlife”).
      The Property had a prior recorded homeowners’ association lien for
assessments created through a declaration of covenants (the “HOA lien”). When
the Mortgagors failed to pay assessments as they came due, the Fairfield Village
South Neighborhood Association, Inc. (the “HOA”) foreclosed on the Property,
and Plaintiff-Appellant Morlock, L.L.C. purchased the Property at the
foreclosure sale.    The conveyance was “made and accepted subject to any
superior liens and encumbrances against the property.”
      Metlife, the assignee of the deed of trust, later posted the Property for sale
as part of a substitute trustee sale scheduled for January 3, 2012. On the day
of the scheduled sale, Morlock filed a petition and application for temporary
restraining order in Texas state court seeking to enjoin the foreclosure sale and
quiet title to the Property. Metlife removed on basis of diversity jurisdiction and
moved to dismiss for failure to state a claim. Adopting the magistrate judge’s
memorandum and recommendation, the district court granted the motion to
dismiss, dismissed the case with prejudice, and entered final judgment for
Metlife.
      For essentially the reasons stated by the district court, we agree that
dismissal was warranted. The HOA sale deed, pursuant to which Morlock
obtained an interest in the Property, provides that the conveyance was “made
and accepted subject to any superior liens and encumbrances against the
property.” And the declaration of covenants, which created the HOA lien,
provides that it “shall be deemed subordinate to any Mortgage.” In light of these
documents, which, because they were referenced in the complaint and are
matters of public record, were properly considered in connection with the motion
to dismiss, Norris v. Hearst Trust, 500 F.3d 454, 461 (5th Cir. 2007); Collins v.
Morgan Stanley Dean Witter, 224 F.3d 496, 498–99 (5th Cir. 2000), Morlock

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                                   No. 13-20132

cannot establish a plausible quiet-title claim under Texas law, see Hahn v. Love,
321 S.W.3d 517, 531 (Tex. App.—Houston [1st Dist.] 2009, pet. denied); see also
Morlock, L.L.C. v. Bank of America, N.A. (“Morlock v. BOA”), No. H-12-0364,
2012 WL 1640895, at *4 (S.D. Tex. May 8, 2012) (“[G]iven the contents of the
Condominium Declaration, which provides that mortgage liens are superior to
liens arising from the Condominium Declaration, Morlock has not, and cannot,
establish the strength of his title vis-a-vis BofA. Accordingly, Morlock’s quiet
title claim is subject to dismissal under Rule 12(b)(6).”); Morlock, L.L.C. v. JP
Morgan Chase Bank, N.A. (“Morlock v. JP Morgan”), No. 12-20623, 2013 WL
2422778, at *1 (5th Cir. Jun. 4, 2013) (per curiam) (“Morlock’s quiet-title claim
fails to allege any facts establishing the superiority of its title as compared to the
Deed of Trust.”).
      Morlock’s argument that the deed of trust “is invalid and has no force or
effect because . . . MERS was not the holder of the original note” is likewise
unavailing. We find persuasive and correspondingly adopt the reasoning of an
unpublished decision of this court rejecting this very argument in a similar
context. See Morlock v. JP Morgan, 2013 WL 2422778, at *2 (“[Morlock]
challenges the validity of the assignment of the Deed of Trust from MERS to
Chase. This argument, however, merely questions whether Chase or MERS has
authority to enforce the Deed of Trust. Because Morlock does not challenge the
Deed of Trust’s validity or otherwise assert title superior to that of Chase or
MERS, Morlock fails to advance a plausible quiet-title claim.”); see also Morlock
v. BOA, 2012 WL 1640895, at *4 (“BofA’s facially valid claim to the Property is
not, and cannot be found, invalid or unenforceable based on the improper
assignment allegations in Morlock’s petition.”).
      We hold, in addition, that the district court did not abuse its discretion in
denying leave to amend the complaint, as any amendment would have been
futile. See Wilson v. Bruks-Klockner, Inc., 602 F.3d 363, 373 (5th Cir. 2010); see
also Morlock v. JP Morgan, 2013 WL 2422778, at *2 n.5 (“Morlock fails to

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                                 No. 13-20132

present any evidence or argument to suggest that a second amended complaint
would not have been futile.”); Morlock v. BOA, 2012 WL 1640895, at *4
(“Morlock’s proposed amendment does not, and cannot, overcome the contents
of the Deed of Trust, the assignment of the Deed of Trust, and the Condominium
Declaration, all of which defeat any allegation or claim Morlock may have that
its interest in the property is not subject to BofA’s lien. Thus, even if the
amendment Morlock proposes were allowed, dismissal of Morlock’s quiet title
claim would still be warranted.”).
      AFFIRMED.

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