Court Opinion

ID: 4070904
Source: CourtListenerOpinion
Date Created: 2016-09-30 01:35:43.260094+00
Date Added: 2024-06-11T14:26:54.457087
License: Public Domain

ACCEPTED
                                                                                       03-14-00029-CV
                                                                                               6244541
                                                                            THIRD COURT OF APPEALS
                                                                                       AUSTIN, TEXAS
                                                                                 7/27/2015 10:49:19 PM
                                                                                     JEFFREY D. KYLE
                                                                                                CLERK
                                 No. 03-14-00029-CV

                              In the Court of Appeals                    July 28, 2015
                                       for the
                       Third Court of Appeals District of Texas
                              Sitting at Austin, Texas

________________________________________________________________________

                Oscar Melendez and Connie Melendez, Appellants

                                         vs.

   Citimortgage, Inc., Ernestine Williams and Wendy Alexander, Appellees

________________________________________________________________________

                        Appealed from the 261st District Court
                              of Travis County, Texas
                       The Honorable Lora Livingston, Presiding

________________________________________________________________________

                            MOTION FOR REHEARING

________________________________________________________________________

                                        Michael Brinkley
                                        State Bar No. 03004300
                                        BRINKLEY LAW PLLC
                                        P. O. Box 820711
                                        Fort Worth, TX 76182-0711
                                        (817) 284-3535; metro (817) 589-7111
                                        (888) 511-0946
                                        Attorney for Appellant, Oscar Melendez
MOTION FOR REHEARING
                                 No. 03-14-00029-CV

                         In the Court of Appeals
                                  for the
                 Third Court of Appeals District of Texas
                         Sitting at Austin, Texas
________________________________________________________________________

                Oscar Melendez and Connie Melendez, Appellants

                                           vs.

  Citimortgage, Inc., Ernestine Williams and Wendy Alexander, Appellees
___________________________________________________________________

                  Appealed from the 261st District Court
                         of Travis County, Texas
                The Honorable Lora Livingston, Presiding
________________________________________________________________________

                      MOTION FOR REHEARING
_______________________________________________________________________

TO THE HONORABLE COURT OF APPEALS:

       Appellant, Oscar Melendez, respectfully submits this Motion for Rehearing under

Texas Rule of Appellate Procedure 49.1 and any other applicable law. Mr. Melendez

acts solely herein, as his wife, Connie Melendez, died after the case was submitted.

                                           I.

       On the 25th day of June, 2015, this Court’s panel upheld the judgment of the trial

court in a memorandum opinion signed on behalf of the Court by Justice Bourland (the

“Opinion”).
MOTION FOR REHEARING                       2
                                            II.

       This Court erred in overruling Appellant’s Points of Error, because the trial court

should have denied summary judgment first, as a matter of fundamental law, and

additionally due to fact questions raised by Appellee’s own summary judgment

evidence–as already explained at length in the Appellants’ response to the motion for

summary judgment, in their motion for new trial, and in briefing to this Court.

                                           III.

       The Opinion makes an assumption at several points of something not proven

by the summary judgment evidence: that Amtrust made Citimortgage, Inc. the mortgage

servicer because Amtrust was the mortgagee at the time of such designation of

Citimortgage’s status. However, the Note, even as offered by Citimortgage (page 62

of the Clerk’s Record) does not indicate any date of indorsement, nor is there any other

indication of when Amtrust’s interest might have terminated. Thus, there was not sufficient

proof before the trial court to determine whether or not Citimortgage was properly deemed

the “mortgage servicer” at the times of taking actions preliminary to foreclosure. It is

not enough to rely on a presumptive appointment of Citimortgage as servicer by Amtrust,

because at the time of the giving of all predicate notices to the foreclosure, Citimortgage

was claiming in those notices that Amtrust then held no interest, hence the status of

Citimortgage in relation to the Note and Deed of Trust had to be determined at those

MOTION FOR REHEARING                        3
times by means other than a questionably timed appointment as servicer in 2006.

                                             IV.

       Melendez clearly can challenge the Assignment to Citimortgage, Inc., and/or

the Appointment of substitute trustees, in the circumstances of (a) a claim involving

the fraudulent nature of all or part of the instrument, or (b) the invalidity of the Assignment

or Appointment due to the lack of capacity of the person executing such instruments,

respectively. A Texas bankruptcy court has noted:

       . . . it is axiomatic that an assignee walks in the shoes of the assignor. State
       v. Oakley, 181 S.W.3d 855 (Tex. App. -Austin 2005), and other courts in
       other jurisdictions have held that when a perfected lien is assigned, no
       new lien is created, and therefore, an assignee of a lien which has been
       perfected succeeds to the perfected status via the assignment and may assert
       the lien. In re Wuerzberger, 284 B.R. 814 (Bankr. W.D. Va. 2002); In
       re Field, 263 B.R. 323, 329 (Bankr. D. Idaho 2001).

In Re Kleibrink,346 B.R. 734, 758; 2006 Bankr. LEXIS 1633 *56 (Bankr. N. D. Tex.

2006), affirmed August 28, 2007.

              In Green v. JPMorgan Chase Chase Bank, 937 F. Supp. 2d 849, 855-856

(N.D.Tex. 2013), a Texas federal district court squarely addressed this issue at length,

and found that debtors such as Melendez can indeed challenge assignments (emphases

supplied):

              The Court is aware of no Texas court that has denied standing to
       all borrowers to challenge assignments of their mortgages. Rather, as this
       Court has previously noted,

MOTION FOR REHEARING                          4
                The law is settled that the obligors of a claim may defend
              the suit brought thereon on any ground which renders the
              assignment void, but may not defend on any ground which
              renders the assignment voidable only, because the only interest
              or right which an obligor of a claim has in the instrument of
              assignment is to insure himself that he will not have to pay
              the same claim twice.

       Puente v. CitiMortgage, Inc., No. 3:11-CV-2509-N, 2012 WL 4335997,
       at *6 (N.D. Tex. Aug. 29, 2012) (quoting Kramer v. Fed. Nat'l Mortg. Ass'n,
       No. A-12-CA-276-SS,, 2012 WL 3027990, at *4-5 (W.D. Tex. May 15,
       2012)); accord Miller v. Homecomings Fin., LLC, 881 F. Supp. 2d 825,
       831 (S.D. Tex. 2012) ("Texas has long followed the common law rule
       which permits a debtor to assert against an assignee any ground that
       renders the assignment [p. 856] void or invalid." ) (citing Tri-Cities
       Constr., Inc. v. American Nat'l Ins. Co., 523 S.W.2d 426, 430
       (Tex.Civ.App.–Houston [1st Dist.] 1975, no writ); Glass v. Carpenter,
       330 S.W.2d 530, 537 (Tex.Civ.App.–San Antonio 1959, writ ref'd n.r.e.)).
       As the Glass court observed, "a debtor may, generally, assert against
       an assignee all equities or defenses existing against the assignor prior
       to notice of the assignment, any matters rendering the assignment
       absolutely invalid or ineffective, and the lack of plaintiff's title or right
       to sue." 330 S.W.2d at 537 (quoting 6 C.J.S. Assignments § 132 [no ed.
       given]) [4] (emphasis added). And, as the Miller court recognized, " Texas
       courts routinely allow a homeowner to challenge the chain of assignments
       by which a party claims the right to foreclose." 881 F. Supp. 2d at 832 (citing
       Martin v. New Century Mortg. Co., 377 S.W.3d 79, 2012 WL 2529251
       (Tex. App. --Houston [1st Dist.] June 14, 2012, no pet.); Austin v.
       Countrywide Homes Loans, 261 S.W.3d 68 (Tex. App.–Houston [1st Dist.]
       2008, pet denied); Leavings v. Mills, 175 S.W.3d 301 (Tex. App.–Houston
       [1st Dist.] 2004, no pet.); Shepard v. Boone, 99 S.W.3d 263 (Tex. App.–
       Eastland 2003, no pet.) ; Priesmeyer v. Pac. Sw. Bank, F.S.B., 917 S.W.2d
937 (Tex. App.–Austin 1996, no writ)).

       Some lenders and servicers cite to Reinagel v. Deutsche Bank Nat’l Trust Co.,

735 F.3d 22, 225 and 226 (5th Cir. 2013). But, footnote 8 in the first Reinagel opinion,

MOTION FOR REHEARING                        5
at 722 F.3d 700, 705, cited to (emphasis supplied): “Tri-Cities Const., Inc. v. Am. Nat.

Ins. Co., 523 S.W.2d 426, 430 (Tex.Civ.App.1975) (citing Glass v. Carpenter, 330
S.W.2d 530, 537 (Tex.Civ.App.1959)); see also, e.g., 6A C.J.S. ASSIGNMENTS §

132 (2013) ("A debtor may, generally, assert against an assignee ..., any matters rendering

the assignment absolutely invalid ..., such as [] the nonassignability of the right

attempted to be assigned, or a prior revocation of the assignment."); Murphy v.

Aurora Loan Servs., LLC, 699 F.3d 1027, 1033 (8th Cir.2012) (recognizing that mortgagors

can defend against foreclosure by establishing a fatal defect in the purported mortgagee's

chain of title).” In the instant case, there is just such a fatal defect in the chain of title,

where there was the Assignment made without capacity, and all acts from and after

such Assignment are tainted. The Appointment of Substitute Trustees, the notices to

Melendez preceding the foreclosure sale, and the Substitute Trustee’s Deed all relied

on the Assignment for validity, and therefore should be deemed of no effect, and all

acts flowing from and after the Assignment should be held void, the foreclosure acts

disregarded and the substitute trustee’s deed removed from the chain of title to the

Property.

                                              V.

        The import of the Hultman deposition transcript offered with the Melendez

response to the Motion for Summary Judgment was that clearly, persons such as the

MOTION FOR REHEARING                          6
person executing the Assignment were never actually appointed to their claimed positions

by the board of directors of Mortgage Electronic Registration Systems, Inc. (“MERS”).

Those persons claimed authority to act from certifications issued by Mr. Hultman, but

were never appointed to any MERS office by the MERS board of directors, and hence

lacked authority for instruments such as the Assignment, which was therefore void,

rendering all subsequent actions of Citimortgage with respect to the Melendez Note

and Deed of Trust invalid.

                                           VI.

       The Opinion never bridges the gap created by the Assignment being putatively

made by MERS on behalf of a “dead” entity, Amtrust having ceased to exist before

MERS claimed to have acted as its nominee/agent. It is a solidly established principle

that “the law is clear that an agent's authority to bind his principal terminates upon the

principal's death. See Cleveland v. Williams, 29 Tex. 204, 213 (1867); Crawford v. Morris,

228 S.W.2d 364, 366 (Tex. Civ. App.—Eastland 1950, writ ref'd n.r.e.).” Cole v. McWillie,

11-12-00265-CV (Tex.App.–Eastland 2015), p. 9. MERS, by its declared nature and

by the terms of the Deed of Trust, has never been anything but a pure nominee, never

a beneficial interest holder. As such, when Amtrust ceased to exist before the execution

of the Assignment, the ownership of the lien of the Deed of Trust would have had to

have been settled independently of MERS, before MERS could even possibly have

MOTION FOR REHEARING                        7
had any interest to convey. There is no evidence of any such disposition.

                                      Conclusion

       Rehearing of this case, by the panel or en banc, and vacating of the June 25, 2015

memorandum opinion and judgment, would be consistent with the apparent purpose

of the applicable common law of Texas and the cited statutes and rules. In the interest

of justice in this matter, Appellant asks that the Court grant this motion for rehearing.

                                                Respectfully submitted,

                                                /s/ Michael Brinkley
                                                ____________________________________
                                                Michael Brinkley
                                                State Bar No. 03004300
                                                BRINKLEY LAW PLLC
                                                P. O. Box 820711
                                                Fort Worth, Texas 76182-0711
                                                (817) 284-3535
                                                (888) 511-5854; fax (888) 511-0946
                                                michael@brinkleypllc.com
                                                Attorney for Appellant

MOTION FOR REHEARING                       8
                  Certificate of Compliance for T.R.A.P. 9.4(i)(3)

       I certify that the word count indicated by my word processing software for the
portions of the Appellant’s Motion for Rehearing covered by Texas Rule of Appellate
Procedure 9.4(i)(1) is 1,489, which, when added to the 2,786 words in Appellant’s brief,
totals 4,275 words.

Dated: July 27, 2015.

                                               /s/ Michael Brinkley
                                               _____________________________________
                                               Michael Brinkley

                                Certificate of Service

      I certify that a true and correct copy of the foregoing has been served on the
following counsel and/or pro se parties of record, by mailing in accordance with Texas
Rule of Appellate Procedure 9.5, on July 27, 2015:

James G. Ruiz
WINSTEAD PC
401 Congress Avenue, Suite 2100
Austin, Texas 78701
fax (512) 370-2850

Attorneys for Appellee.

                                               /s/ Michael Brinkley
                                               _____________________________________
                                               Michael Brinkley

MOTION FOR REHEARING                       9