Court Opinion

ID: 4148110
Source: CourtListenerOpinion
Date Created: 2017-02-24 01:00:57.554031+00
Date Added: 2024-06-11T07:46:28.322429
License: Public Domain

Case: 16-10899      Document: 00513887403         Page: 1    Date Filed: 02/23/2017

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

                                    No. 16-10899
                                                                                   Fifth Circuit

                                                                                 FILED
                                  Summary Calendar                       February 23, 2017
                                                                            Lyle W. Cayce
HAROLD ALVIN MCGEE; ROSETTA MCGEE,                                               Clerk

              Plaintiffs - Appellants

v.

CITI MORTGAGE, INCORPORATED; GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION; CTX MORTGAGE COMPANY, L.L.C.;
BARRETT DAFFIN FRAPPIER TURNER & ENGEL, L.L.P.,

              Defendants - Appellees

                   Appeal from the United States District Court
                        for the Northern District of Texas
                             USDC No. 3:15-CV-1746

Before DAVIS, SOUTHWICK, and HIGGINSON, Circuit Judges.
PER CURIAM:*
       This case concerns a home foreclosure. The plaintiff borrowers brought
this pro se action against the defendant lenders asserting several claims
related to a promissory note and deed of trust. The district court granted the

       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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. 16-10899
defendants’ motions to dismiss. The district court later denied the plaintiffs’
motion to alter or amend judgment. We AFFIRM.

                FACTUAL AND PROCEDURAL BACKGROUND
      In January 2006, Harold and Rosetta McGee executed a promissory note
in the amount of $174,377 in favor of CTX Mortgage Company, LLC. Days
later, they secured the promissory note through a deed of trust on their
residence in Mesquite, Texas.     The McGees state that CTX assigned the
promissory note to CitiMortgage, Inc. in January 2006, and CTX sold the note
two months later to the Government National Mortgage Association
(“GNMA”).
      In April 2015, after the McGees defaulted on the note, CitiMortgage
initiated foreclosure proceedings with the assistance of its foreclosure counsel,
Barrett, Daffin, Frappier, Turner & Engel, LLP.        The McGees filed their
original petition in Texas state court against CTX, CitiMortgage, GNMA, and
the Barrett Daffin law firm, challenging the transfer and assignment of the
promissory note and deed of trust. The McGees’ claims included breach of
contract, slander of title, void assignment, and fraud. They sought declaratory
relief and punitive damages.
      The defendants removed the case to federal court on the basis of diversity
of citizenship, then filed motions to dismiss for failure to state a claim. The
McGees, in turn, filed a motion to remand to state court and opposed the
motions to dismiss. There was initially some dispute about whether there was
diversity jurisdiction, and the magistrate judge requested supplemental filing
on the issue.
      On November 16, 2015, the district court entered an order determining
CitiMortgage, GNMA, and CTX to be diverse defendants and the non-diverse
law firm of Barrett Daffin to be improperly joined. The district court concluded
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that complete diversity existed among the parties despite the law firm’s
presence because the citizenship of the improperly joined party is disregarded
for purposes of determining diversity jurisdiction.       The court denied the
McGees’ motion to remand and granted the law firm’s motion to dismiss it from
the suit with prejudice.
      Separately, and also on November 16, 2015, the district court granted
the motions to dismiss filed by CitiMortgage, GNMA, and CTX. The district
court accepted the magistrate judge’s findings and recommendation, holding
that the slander of title, breach of contract, and fraud claims were barred by
the applicable statutes of limitation. The McGees’ challenge to the assignment
of the promissory note between CTX and CitiMortgage failed because they did
not have standing to challenge it. Because the McGees’ underlying causes of
action were dismissed, the claim for declaratory relief failed as well. Finally,
the court denied leave to amend the complaint because an amendment would
have been futile. The court entered final judgment on November 16, 2015,
dismissing all of the McGees’ claims against the Barrett Daffin law firm,
CitiMortgage, GNMA, and CTX.
      On December 10, 2015, the McGees filed a pro se motion to have the
court “reconsider its Order Granting Defendants’ Motion to Dismiss on
November 16, 2015.” Recognizing the plaintiffs were proceeding pro se, and
noting that the motion was filed within 28 days after entry of judgment, the
district court treated the motion as a motion under Federal Rule of Civil
Procedure 59(e) to alter or amend judgment. We note that the McGees did not
ask for reconsideration of the portion of the judgment relating to the order
granting the law firm’s motion to dismiss. Moreover, the district court in ruling
on the motion did not indicate that it considered the McGees to be challenging
the dismissal of the claims against the law firm. On June 8, 2016, the district
court denied the McGees’ motion, characterizing it as “a near verbatim attempt
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to relitigate objections that were overruled by the court . . . .”   The McGees
appealed on June 23, 2016.

                                 DISCUSSION
      The Barrett Daffin law firm has filed a brief stating all claims against it
should be dismissed. As just noted, the plaintiffs did not move in the district
court for reconsideration of the law firm’s dismissal. Further, the McGees have
not made any argument on appeal to set the dismissal aside. In fact, the only
mention of Barrett Daffin on appeal is in the McGees’ certificates of service
and interested persons. The dismissal of the firm is affirmed due to the
absence of any relevant briefing. See United States v. Scroggins, 599 F.3d 433,
446–47 (5th Cir. 2010).
      We now examine what the McGees have effectively appealed. The notice
of appeal said that the Plaintiffs were appealing
      the Order Denying [] Plaintiff’s Motion for Reconsideration entered
      by this Court on June 8, 2016. A copy of the Judgment upon which
      the appeal is based is attached hereto.
The attachment to the notice is not the district court’s final judgment, though,
but it is the district court’s June 8 order denying reconsideration. The McGees’
arguments on appeal are partly directed at the district court’s decision to deny
their motion for reconsideration and partly directed at the court’s initial
decision to deny their underlying claims.
      A party may appeal from and challenge the denial of a Rule 59(e) motion
to alter or amend judgment. Youmans v. Simon, 791 F.2d 341, 349 (5th Cir.
1986). “A notice of appeal from the denial of a timely [Rule 59(e)] motion brings
up the underlying judgment for review.” Martinez v. Johnson, 104 F.3d 769,
771 (5th Cir. 1997).
      Here, the pro se plaintiffs’ briefing makes arguments about the district
court’s denial of their Rule 59(e) motion as well as about certain parts of the
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                                    No. 16-10899
district court’s dismissal of their underlying claims.          “[A] policy of liberal
construction of notices of appeal prevails in situations where the intent to
appeal an unmentioned or mislabeled ruling is apparent and there is no
prejudice to the adverse party.” C.A. May Marine Supply Co. v. Brunswick
Corp., 649 F.2d 1049, 1056 (5th Cir. 1981). In one case, we allowed the broader
appeal because it was “clear that [the plaintiff], although nominally appealing
the denial of the motion to reconsider, intended to appeal the merits of the
underlying judgment.” Fletcher v. Apfel, 210 F.3d 510, 512 (5th Cir. 2000).
      In light of the clarity in the briefing, we will recast the McGees’ notice of
appeal as also bringing the parts of the final judgment here that rejected their
arguments about void assignments. The McGees have argued throughout this
litigation that the assignment of the promissory note between CTX and
CitiMortgage was void.        This claim was consistently rejected for lack of
standing because, in Texas, “an obligor cannot defend against an assignee’s
efforts to enforce the obligation on a ground that merely renders the
assignment voidable at the election of the assignor . . . .”         See Reinagel v.
Deutsche Bank Nat’l Tr. Co., 735 F.3d 220, 225 (5th Cir. 2013). The district
court held that the McGees had failed to allege a claim that, if true, would
render the assignment void as opposed to voidable. 1 The McGees also based
their arguments on an alleged failure to record the assignment, citing TEX.
LOC. GOV’T CODE § 192.007. We have held that Section 192.007 “imposes no
duty to record.” Harris County Texas v. MERSCORP, Inc., 791 F.3d 545, 556
(5th Cir. 2015).
      For the first time on appeal, the McGees attempt to avoid these obstacles
by arguing the defendants had no authority under the promissory note and

      1 As the district court noted, even if the McGees had standing to challenge the
assignment, their substantive challenges to the assignment appeared to be without merit.
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                                  No. 16-10899
deed of trust to make assignments and foreclose on the property. Standing
might not be an impediment to making such a claim because they were parties
to the note and deed of trust. It is simply too late, though, to recast this
argument. The McGees had ample opportunities to press this claim in the
district court. We decline to consider it for the first time on appeal. See In re
Paige, 610 F.3d 865, 871 (5th Cir. 2010).
      The McGees also challenge the district court’s denial of their “motion for
reconsideration,” which was deemed a Rule 59(e) motion because it was filed
within 28 days of entry of judgment. See Demahy v. Schwarz Pharma, Inc.,
702 F.3d 177, 182 n.2 (5th Cir. 2012). Denial of a Rule 59(e) motion is reviewed
for abuse of discretion. Martinez, 104 F.3d at 771. A Rule 59(e) motion is
appropriate “(1) where there has been an intervening change in the controlling
law; (2) where the movant presents newly discovered evidence that was
previously unavailable; or (3) to correct a manifest error of law or fact.”
Demahy, 702 F.3d at 182. The motion is inappropriate “to raise arguments or
claims that could, and should, have been made before the judgment issued.”
Id. (quotation marks omitted).
      We agree with the district court that the McGees’ Rule 59(e) motion was
an attempt to litigate objections already rejected by the court. The motion did
not identify a change in the law, present new evidence, or identify a manifest
error of law or fact. The district court did not abuse its discretion in denying
the motion.
      Finally, the McGees argue the district court erred in denying their
requests to amend the complaint. The McGees first moved to amend their
complaint to include a claim of trespass to try title or quiet title. The district
court determined that the proposed amendment was futile because the claims
would be barred by the applicable statutes of limitation and would therefore

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                                    No. 16-10899
fail to state a claim upon which relief could be granted. 2 Several months after
the district court entered judgment, the McGees again requested leave to
amend. They stated they were prepared to allege proper causes of action with
newly discovered evidence, but no new evidence was mentioned. The district
court denied the request, noting that any amendment would have been futile
and would have unnecessarily delayed resolution of the case.
      “Whether leave to amend should be granted is entrusted to the sound
discretion of the district court, and that court’s ruling is reversible only for an
abuse of discretion.” Wimm v. Jack Eckerd Corp., 3 F.3d 137, 139 (5th Cir.
1993). The district court may deny leave to amend if the amendment would be
futile because “the amended complaint would fail to state a claim upon which
relief could be granted.” Stripling v. Jordan Prod. Co., 234 F.3d 863, 873 (5th
Cir. 2000). Additionally, where a party seeks to amend after judgment is
entered, “we have consistently upheld the denial of leave to amend where the
party seeking to amend has not clearly established that he could not
reasonably have raised the new matter prior to the trial court’s merits ruling.”
Rosenblatt v. United Way of Greater Houston, 607 F.3d 413, 420 (5th Cir. 2010)
(quotation marks omitted). All of the McGees’ proposed amendments were
futile or untimely. The district court did not abuse its discretion in denying
leave to amend.
      AFFIRMED.

      2  The court also determined that Harold McGee would be judicially estopped from
bringing the proposed claims because the claims would be inconsistent with the stance he
took in previous bankruptcy proceedings.
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