Court Opinion

ID: 5129527
Source: CourtListenerOpinion
Date Created: 2021-11-25 01:00:36.964098+00
Date Added: 2024-06-11T08:23:12.405871
License: Public Domain

Case: 21-20225     Document: 00516107533         Page: 1     Date Filed: 11/24/2021

              United States Court of Appeals
                   for the Fifth Circuit                              United States Court of Appeals
                                                                               Fifth Circuit

                                                                             FILED
                                  No. 21-20225                       November 24, 2021
                                Summary Calendar                        Lyle W. Cayce
                                                                             Clerk

   Conrell Hadley,

                                                           Plaintiff—Appellant,

                                       versus

   The Bank of New York Mellon, as Trustee; Carrington
   Mortgage Services, L.L.C.,

                                                         Defendants—Appellees.

                  Appeal from the United States District Court
                      for the Southern District of Texas
                           USDC No. 4:20-CV-2553

   Before Davis, Jones, and Elrod, Circuit Judges.
   Per Curiam:*
          Conrell Hadley appeals the district court’s summary judgment in
   favor of Defendants, the Bank of New York Mellon, as Trustee, and

          *
            Pursuant to 5th Circuit Rule 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   opinion should not be published and is not precedent except under the limited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 Circuit Rule 47.5.4.
Case: 21-20225         Document: 00516107533           Page: 2    Date Filed: 11/24/2021

                                        No. 21-20225

   Carrington Mortgage Services, L.L.C. Because Hadley’s claims are barred by
   the doctrine of res judicata, we AFFIRM.1
                                    BACKGROUND
          In 1989, Hadley bought the property located at 6908 Fox Mesa Lane
   in Humble, Texas. In October 2004, Hadley executed a note and home equity
   deed of trust promising to repay a $72,000 loan and granting a lien against
   the property to America’s Wholesale Lender, the mortgagee.
          In December 2016, after the mortgagee applied for a foreclosure
   order, Hadley filed suit in state court against Ditech Financial, L.L.C., f/k/a
   Green Tree Servicing, L.L.C. (“Ditech”), the mortgage servicer, contesting
   the defendant’s right to foreclose. Hadley asserted claims for breach of
   contract, alleging that Ditech failed to abide by certain provisions in the deed
   of trust before proceeding with foreclosure. Hadley also alleged that Ditech
   failed to comply with certain federal statutes and regulations, as well as state
   laws, prior to applying for foreclosure.
          Ditech removed the action to federal district court. Thereafter,
   Hadley moved to voluntarily dismiss all of his claims against Ditech without
   prejudice. After the district court conducted a conference with the parties,
   however, the district court entered a “Final Dismissal” on February 13,
   2017, which provided: “Having been advised that Conrell Hadley no longer
   wishes to pursue his claims against Ditech Financial, LLC, this case is
   dismissed with prejudice.” (emphasis added). No appeal from the final
   dismissal was taken.
          In June 2020, Hadley filed the instant suit in state court against the
   Bank of New York Mellon (“Bank”), which he alleged was the “current

          1
              We also GRANT Defendants’ motion for judicial notice.

                                              2
Case: 21-20225          Document: 00516107533              Page: 3      Date Filed: 11/24/2021

                                           No. 21-20225

   purported ‘mortgagee’ of the mortgage loan” relating to his property. He
   also sued Carrington Mortgage Services, L.L.C. (“Carrington”), which he
   alleged was the “current purported mortgage servicer” of the mortgage.
   Hadley contended that Defendants first sent him a notice of acceleration of
   the loan on July 15, 2010, and that because Defendants had not sought
   foreclosure within four years of that date, any foreclosure sale would be time-
   barred and consequently the deed of trust had to “be stripped from the title
   record and title quieted in [his] name.” He sought a declaratory judgment
   that expiration of the statute of limitations barred foreclosure, rendered the
   deed of trust held by Defendants void, and entitled him to quiet title relief.
   He also sought a permanent injunction preventing Defendants from
   interfering with his status as owner, as well as attorney’s fees and costs.
          Defendants removed the action to federal district court and thereafter
   moved for summary judgment. They argued that Hadley’s claims were
   barred by the doctrine of res judicata. The district court agreed and granted
   summary judgment in favor of Defendants. Hadley timely filed a notice of
   appeal.
                                        DISCUSSION
          “Claim preclusion, or res judicata, bars the litigation of claims that
   either have been litigated or should have been raised in an earlier suit.”2 In
   order for res judicata to apply, four conditions must be met: “(1) the parties
   to both actions are identical, or in privity; (2) a court of competent
   jurisdiction rendered the judgment in the first action; (3) the first action
   concluded with a final judgment on the merits; and (4) both suits involved

          2
              In re Southmark Corp., 163 F.3d 925, 934 (5th Cir. 1999) (citation omitted).

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Case: 21-20225           Document: 00516107533               Page: 4       Date Filed: 11/24/2021

                                            No. 21-20225

   the same claim or cause of action.”3 The res judicata effect of a prior
   judgment is a question of law that we review de novo.4
           The district court determined that all four conditions for res judicata
   were met in this case. Specifically, the defendants from both of Hadley’s
   actions were in privity because Ditech was the mortgage servicer and the
   Bank was the trustee/mortgagee; the district court was of competent
   jurisdiction in the first action; the first action ended in a final judgment on
   the merits; and both actions challenged the enforcement of the same lien that
   secures the same loan on the same property. The district court concluded
   that because Hadley had the opportunity to raise his claims based on the
   expiration of the statute of limitations in his first action and should have, res
   judicata barred him from raising those claims in the instant action.
           Hadley does not challenge the district court’s determination that the
   four elements of res judicata have been met in this case.5 Instead he argues
   that whether the elements have been met “is not relevant” because “the
   Deed of Trust is void and therefore res judicata cannot be applied to it.” He
   asserts the deed of trust securing the loan became void when the statute of
   limitations allegedly expired on July 15, 2014, and that a void deed of trust is
   equivalent to a void prior judgment.

           3
            Warren v. Mortgage Electronic Registration Systems, Inc., 616 F. App’x 735, 737 (5th
   Cir. 2015) (unpublished) (citation omitted). Unpublished opinions issued on or after
   January 1, 1996, are not precedential but may be persuasive. Ballard v. Burton, 444 F.3d
   391, 401 & n.7 (5th Cir. 2006).
           4
               Test Masters Educ. Serv., Inc. v. Singh, 428 F.3d 559, 571 (5th Cir. 2005).
           5
            Consequently, Hadley has waived any argument that the district court erred in
   determining that the four elements of res judicata were satisfied. See Chambers v. Mukasey,
   520 F.3d 445, 448 n.1 (5th Cir. 2008) (noting that legal issues not briefed are waived on
   appeal).

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Case: 21-20225            Document: 00516107533           Page: 5       Date Filed: 11/24/2021

                                          No. 21-20225

           In support of this argument, Hadley cites to a Texas appellate court
   case, McNally v. McNally,6 that is inapposite. In McNally, the appellate court
   determined that res judicata did not apply because the fourth condition for
   application of the doctrine (i.e., both suits involved the same claim or cause
   of action) was not present.7 The first action was a 1984 divorce proceeding in
   which a property-settlement agreement between the husband and wife was
   approved. As part of that agreement, the husband executed a promissory note
   in favor of the wife, which was secured by a deed of trust on property the
   couple owned. The second action was a challenge by the husband to the deed
   of trust securing the note. The appellate court determined that the second
   suit was not a challenge to the property-settlement agreement, and that the
   husband’s payment obligation under the note would be unaffected by the
   validity of the deed. Therefore, res judicata was inapplicable.8
           Here, the district court determined that both of Hadley’s actions
   challenged the enforcement of the same lien that secures the same loan on
   the same property. As stated above, Hadley does not challenge this
   determination.9 Hadley has not cited any other authority supporting his
   contention that res judicata is inapplicable here.10

           6
               No. 02-18-00142-CV, 2020 WL 5241189 (Tex. App.—Fort Worth Sept. 3, 2020).
           7
               See id. at *5.
           8
               See id.
           9
             Although the parties address the merits of Hadley’s limitations argument, we
   need not do so because any claim based on the expiration of the statute of limitations is
   barred by the doctrine of res judicata, as set forth above.
           10
              As Defendants point out, this Court has rejected similar arguments that res
   judicata does not apply when a lien is allegedly invalid based on the expiration of the four-
   year limitations period for enforcing a real property lien under Texas law. See Underwood v.
   Ocwen Loan Serv., 829 F. App’x 678 (5th Cir. 2020) (unpublished); Ballard, 444 F.3d at

                                                5
Case: 21-20225       Document: 00516107533            Page: 6     Date Filed: 11/24/2021

                                       No. 21-20225

          Based on the foregoing, we AFFIRM the district court’s judgment.

   401 & n.7 (Unpublished opinions issued on or after January 1, 1996, may be persuasive
   authority.).

                                            6