Court Opinion

ID: 4543367
Source: CourtListenerOpinion
Date Created: 2020-06-23 18:00:21.541212+00
Date Added: 2024-06-11T12:46:44.557730
License: Public Domain

Case: 19-11329      Document: 00515462327         Page: 1    Date Filed: 06/23/2020

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

                                                                                FILED
                                    No. 19-11329                            June 23, 2020
                                  Summary Calendar
                                                                           Lyle W. Cayce
                                                                                Clerk
CHARLES CONSTANCE; MARION CONSTANCE,

              Plaintiffs - Appellants

v.

INTERSTATE INTRINSIC VALUE FUND A, L.L.C.,

              Defendant - Appellee

                   Appeal from the United States District Court
                       Northern District of Texas, Dallas
                              USDC 3:18-CV-3047

Before STEWART, HIGGINSON, and COSTA, Circuit Judges.
PER CURIAM:*
       Plaintiffs-Appellants Charles Constance (Mr. Constance) and Marion
Constance (Mrs. Constance) filed this breach of contract action against
Defendant-Appellee Interstate Intrinsic Value Fund A, L.L.C. Upon motion,
the district court granted summary judgment in Defendant’s favor. We affirm.

       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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: 19-11329    Document: 00515462327     Page: 2   Date Filed: 06/23/2020

                                 No. 19-11329
                                       I.
      In 2001, Plaintiffs became borrowers under a “80/20” mortgage lien
which allowed them to secure a residential property located at 13132 Fall
Manor Drive, Dallas, Texas (the Property). They are both listed as borrowers
to the Primary Mortgage in the original amount of $101,600.00 and its Deed of
Trust. Mr. Constance is the listed borrower on the remaining 20 percent of the
property purchase price in a Junior Mortgage. However, in their petition that
initiated this action, Plaintiffs state they both undertook the Primary and
Junior mortgages. And, under the Junior Mortgage’s Deed of Trust, both
Plaintiffs executed their signatures as borrowers and Mrs. Constance initialed
every page of this document.
      In 2013, Defendant became assignees of the beneficiary interests in the
the Primary and Junior Mortgages, and Defendant began collecting
repayments from Plaintiffs. Subsequently, in 2016, Mr. Constance was no
longer submitting timely payments on the Note, and, the following year, the
mortgage defaulted.     Defendant, in turn, attempted to foreclose on the
Property.
      Between 2013 and 2017, the record reflects that Mr. Constance filed for
bankruptcy on three occasions.       During the 2015 and 2017 bankruptcy
proceedings, Mr. Constance acknowledged the existence of the Primary and
Junior Mortgages within his signed bankruptcy schedules which he executed
under penalty of perjury.
      Following the bankruptcy proceedings, Plaintiffs initiated this action for,
inter alia, breach of contract in state court in Dallas County, Texas. While
Plaintiffs acknowledge that the Junior Mortgage is in default, they claim that
(for various reasons) Defendant is in breach of the Deed of Trust of this Junior
Mortgage. Defendant subsequently removed this case. Once before the district
court, Defendant moved for summary judgment. In response, Plaintiff claimed
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    Case: 19-11329     Document: 00515462327        Page: 3     Date Filed: 06/23/2020

                                   No. 19-11329
that there was a genuine dispute of material fact as to their reasonable belief
that the Junior Mortgage “no longer existed” because they thought that the
Junior Mortgage merged into the Primary Mortgage after a 2005 loan
modification.    The    district   court       determined     this   assertion   to   be
unsubstantiated in light of the 2015 and 2017 bankruptcy record that
demonstrated that Mr. Constance was aware that both mortgage debts still
existed. Because Mr. Constance’s bankruptcy admissions could be imputed on
Mrs. Constance and were considered judicial admissions, the court concluded
that there were no genuine issues of material fact and granted Defendant’s
motion.
      Plaintiffs now appeal.
                                       II.
      We review grants of summary judgment de novo, applying the same
standard as the district court. Antoine v. First Student Inc., 713 F.3d 824, 830
(5th Cir. 2013); see also FED. R. CIV. P. 56(a) (summary judgment is proper “if
the movant shows that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law”).
                                       III.
      For clarity, this action relates only to the Junior Mortgage that is now in
default and subjecting the Property to foreclosure. There is no indication in
the record that Plaintiffs defaulted on the Primary Mortgage.
      On appeal, Plaintiffs claim that the district court erred because (1) Mrs.
Constance is not a borrower under the Junior Mortgage and therefore
Defendant cannot seek recourse against her; (2) Mr. Constance’s bankruptcy
proceedings should not be considered as admissions because he later
disclaimed any admissions via affidavit in this civil case; and (3) Mr.
Constance’s bankruptcy admissions cannot be imputed to Mrs. Constance. In
response, Defendant primarily contends that the district court did not commit
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                                  No. 19-11329
error because Mr. Constance’s bankruptcy admissions can be used in
subsequent litigation as judicial admissions and can be attributable to Mrs.
Constance.
      As to their first and third points, Plaintiffs highlight an inconsistency in
Mrs. Constance’s positions. In the petition that initiated this action, Plaintiffs
explicitly state that they both undertook both Primary and Junior Mortgages.
Now on appeal, they contend that Mrs. Constance is not a borrower or party to
the Junior Mortgage because she is not listed as a borrower under the Junior
Mortgage and only signed its Deed as a witness. This begs the question on how
Mrs. Constance has standing to sue and recover on a contract (even as a third-
party beneficiary) when she now disclaims her protected contract interest. Cf.
Reinagel v. Deutsche Bank Nat. Trust Co., 735 F.3d 220, 224–25 (5th Cir. 2013)
(“Texas courts have held that a non-party to a contract cannot enforce the
contract unless she is an intended third-party beneficiary . . . .”). If Mrs.
Constance is now renouncing any protected non-party contract interest under
this mortgage, she is stating that she lacks the requisite Article III standing to
recover under the Junior Mortgage. Thus, we take this new position by Mrs.
Constance as her effectively dismissing herself.
      As to the second point, Mr. Constance is attempting to conjure up a
genuine issue of material fact via a conclusory affidavit that contradicts signed
documents in his bankruptcy proceedings.           We reject this attempt to
manufacture material fact disputes. We adopt the district court’s analysis for
rejecting Plaintiffs-Appellants’ claims.
      For the foregoing reasons, we AFFIRM the summary judgment in favor
of Defendant.

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