Court Opinion

ID: 222014
Source: CourtListenerOpinion
Date Created: 2011-07-27 23:11:49+00
Date Added: 2024-06-11T17:28:52.633911
License: Public Domain

Case: 11-10055     Document: 00511553026         Page: 1     Date Filed: 07/27/2011

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

                                                                            FILED
                                                                           July 27, 2011

                                     No. 11-10055                          Lyle W. Cayce
                                   Summary Calendar                             Clerk

VAL-COM ACQUISITIONS TRUST; KENNETH F HOLT; KIMBERLY R
HOLT,

                                                  Plaintiffs–Appellants
v.

SUNTRUST MORTGAGE CO.,

                                                  Defendant–Appellee

                   Appeal from the United States District Court
                        for the Northern District of Texas
                            USDC No. 4:10-CV-0436-Y

Before HIGGINBOTHAM, SMITH, and HAYNES, Circuit Judges.
PER CURIAM:*
        Kenneth and Kimberly Holt purchased a home in 2005, financing the
purchase through a note and deed of trust payable to Home Loan Corporation.
SunTrust states it later became the holder of the note and deed of trust, as well
as the mortgage servicer. In April 2010, the complaint alleges that Val-Com
acquired the property from the Holts pursuant to a general warranty deed,

        *
         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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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: 11-10055         Document: 00511553026       Page: 2     Date Filed: 07/27/2011

                                       No. 11-10055

subject to the note and deed of trust. After the mortgage went into default,
SunTrust sought a non-judicial foreclosure. To avoid foreclosure, Val-Com filed
suit in Texas state court on its own behalf and on behalf of the Holts. SunTrust
removed to federal district court. Val-Com’s amended complaint alleged a
variety of claims, all of which the district court dismissed under Federal Rule of
Civil Procedure 12(b)(6). The plaintiffs appeal only the dismissal of their
Declaratory Judgment Act claims.             They seek declarations as to whether
SunTrust a) is the owner and/or holder of the note and deed of trust, b) is
entitled to enforce the note and deed of trust, c) may administer a foreclosure of
the home on behalf of the mortgagee, and d) is entitled to enforce the note and
deed of trust by means of a non-judicial foreclosure sale.
       The Declaratory Judgment Act authorizes the federal courts to “declare
the rights and other legal relations of any interested party seeking such
declaration.”1 Such a declaration may issue only to resolve an actual controversy
between the parties.2 An actual controversy is a dispute that is “definite and
concrete, touching the legal relations of parties having adverse legal interests.”3
The controversy “‘must be such that it can presently be litigated and decided and
not hypothetical, conjectural, conditional or based upon the possibility of a
factual situation that may never develop.’”4 The plaintiffs have the burden of
establishing the existence of an actual controversy under the Act.5

       1
           28 U.S.C. § 2201(a).
       2
         United Transp. Union v. Foster, 205 F.3d 851, 857 (5th Cir. 2000) (quoting Aetna Life
Ins. Co. v. Haworth, 300 U.S. 227, 239–40 (1937)).
       3
        MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007) (citation and internal
quotation marks omitted).
       4
        Rowan Companies, Inc. v. Griffin, 876 F.2d 26, 28 (5th Cir. 1989) (quoting Brown &
Root, Inc. v. Big Rock Corp., 383 F.2d 662, 665 (5th Cir. 1967)).
       5
       See Vantage Trailers, Inc. v. Beall Corp., 565 F.3d 745, 748 (5th Cir. 2009); Young v.
Vannerson, 612 F. Supp. 2d 829, 840 (S.D. Tex. 2009).

                                              2
   Case: 11-10055    Document: 00511553026      Page: 3   Date Filed: 07/27/2011

                                  No. 11-10055

      Here, the plaintiffs have failed to carry that burden. The plaintiffs’ first
amended complaint does not allege—even on information and belief—that
SunTrust is not the owner and/or holder of the note and deed of trust, that
SunTrust is not the mortgage servicer, or that SunTrust lacks authority to
enforce the note and deed of trust by administering a non-judicial foreclosure
sale. The only related factual allegation in the complaint is that SunTrust was
not the original lender on the note and deed of trust. Plaintiffs never allege that
SunTrust is not the current holder and owner of the note and deed of trust.
Further, the plaintiffs fail to allege any facts suggesting that the note and deed
of trust are non-negotiable or that they were improperly transferred or indorsed.
While there could be a dispute between the parties, absent these allegations, any
such dispute is, at this point, hypothetical or conjectural. As a result, the
district court was correct to dismiss the plaintiffs’ request for a declaratory
judgment.
      AFFIRMED.

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