Court Opinion

ID: 4385253
Source: CourtListenerOpinion
Date Created: 2019-04-09 10:40:52.422357+00
Date Added: 2024-06-11T14:50:20.445602
License: Public Domain

AFFIRMED; Opinion Filed April 8, 2019.

                                               In The
                                 Court of Appeals
                          Fifth District of Texas at Dallas
                                        No. 05-17-01491-CV

 CHARLES A. FARRIS, JESSIE FARRIS, AND ALL OTHER OCCUPANTS OF 2325
          AVENUE C, GRAND PRAIRIE, TEXAS 75051, Appellants
                                  V.
NATIONSTAR MORTGAGE LLC F/K/A CENTEX HOME EQUITY COMPANY LLC,
                               Appellee

                       On Appeal from the 193rd Judicial District Court
                                    Dallas County, Texas
                            Trial Court Cause No. DC-17-01834

                              MEMORANDUM OPINION
                           Before Justices Bridges, Myers, and Osborne
                                    Opinion by Justice Myers
       Appellants Charles A. Farris, Jessie Farris, and all other occupants of 2325 Avenue C,

Grand Prairie, Texas 75051, appeal from a summary judgment granted in favor of appellee

Nationstar Mortgage, LLC, f/k/a Centex Home Equity Company, LLC. In one issue, appellants

contend Nationstar did not sufficiently establish it was the real party in interest such that the trial

court had subject matter jurisdiction. We affirm.

                            BACKGROUND AND PROCEDURAL HISTORY

       On September 24, 2004, Charles A. Farris executed a Texas home equity note in favor of

Centex Home Equity Company, LLC, for $35,000. The note required Charles A. Farris to make

monthly payments in the amount of $481.14 on the first of each month beginning November 1,

2004. Charles A. Farris and Jessie Farris concurrently executed a Texas home equity security
instrument that secured payment of the note by encumbering the subject property, which was

located at 2325 Avenue C, Grand Prairie, Texas 75051.

       Charles A. Farris defaulted on the note. On June 3, 2013, appellee Nationstar Mortgage,

LLC, f/k/a Centex Home Equity Company, LLC (“Nationstar”), filed an application for an

expedited order allowing foreclosure on the property under Texas Rule of Civil Procedure 736.

See TEX. R. CIV. P. 735.1(a) (“Rule 736 provides the procedure for obtaining a court order, when

required, to allow foreclosure of a lien containing a power of sale in the security instrument,

declaratory instrument, or declaration creating the lien, including a lien securing. . . a home equity

loan, reverse mortgage, or home equity line of credit. . . .”). The application alleged that the note

was then 78 months past due. The 95th Judicial District Court of Dallas County, Texas, granted

the application, allowing Nationstar to proceed with foreclosure. The property was sold at a

foreclosure sale on February 7, 2017, to The Bank of New York Mellon f/k/a The Bank of New

York, as successor in interest to JP Morgan Chase Bank, N.A., as trustee for Centex Home Equity

Loan Trust 2005-A.

       On February 13, 2017, appellants Charles A. Farris, Jessie Farris, and all other occupants

of 2325 Avenue C, Grand Prairie, Texas 75051 (“Farris”) filed suit against Nationstar seeking a

declaratory judgment that Nationstar did not establish it had the authority to foreclose. Farris also

sought a temporary injunction. Nationstar filed a traditional motion for summary judgment, to

which Farris responded, and a hearing on Nationstar’s summary judgment motion was held on

October 5, 2017. That same day, the trial court signed an order granting Nationstar’s motion for

summary judgment. Farris filed a motion for new trial, which the trial court denied in a written

order. This appeal followed.

                                            DISCUSSION

       In his only issue, Farris argues that Nationstar, as the plaintiff in a Texas Rule of Civil

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Procedure 736 home equity loan foreclosure action, did not sufficiently establish it was the real

party in interest such that “it could have established the trial court’s subject-matter jurisdiction in

the ancillary rule 736 action.” In effect, Farris is arguing Nationstar did not have standing to seek

foreclosure when it filed the application for an expedited order under rule 736, and that it could

not foreclose because it was not the owner or holder of the note. As a result, according to Farris,

the court lacked subject matter jurisdiction.

       We review the grant of summary judgment de novo. Travelers Ins. Co. v. Joachim, 315
S.W.3d 860, 862 (Tex. 2010); Spicer v. Tex. Workforce Comm’n, 430 S.W.3d 526, 532 (Tex.

App.—Dallas 2014, no pet.). A movant for traditional summary judgment has the burden of

showing there is no genuine issue of material fact and it is entitled to judgment as a matter of law.

TEX. R. CIV. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex. 1985);

Spicer, 430 S.W.3d at 532; McCoy v. Texas Instruments, Inc., 183 S.W.3d 548, 553 (Tex. App.––

Dallas 2006, no pet.). When reviewing a summary judgment, we consider the evidence in the light

most favorable to the nonmovant. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289
S.W.3d 844, 848 (Tex. 2009); Spicer, 430 S.W.3d at 532.

       A party must have both standing to sue and capacity to sue. Austin Nursing Ctr. v. Lovato,

171 S.W.3d 845, 849 (Tex. 2005). “The issue of standing focuses on whether a party has a

sufficient relationship with the lawsuit so as to have a ‘justiciable interest’ in its outcome, whereas

the issue of capacity ‘is conceived of as a procedural issue dealing with the personal qualifications

of a party to litigate.’” Id. at 848 (quoting 6A Charles Alan Wright, Arthur R. Miller, and Mary

Kay Kane, WRIGHT, MILLER & KANE, FEDERAL PRACTICE AND PROCEDURE: CIVIL 2d § 1559, at

441 (2d ed. 1990)). “Standing is a prerequisite to subject-matter jurisdiction and is essential to a

court’s power to decide a case.” Drilltec Technologies, Inc. v. Edwards, 64 S.W.3d 212, 214 (Tex.

App.––Houston [14th Dist.] 2001, no pet.).

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       Farris does not offer an argument, nor does he identify any evidence, showing how or why

Nationstar lacked standing to foreclose. In fact, Texas law does not require the person or entity

seeking foreclosure to be the owner or holder of the note. See Morlock L.L.C. v. Bank of N.Y., 448
S.W.3d 514, 518 (Tex. App.—Houston [1st Dist.] 2014, pet. denied) (noting that the Fifth Circuit

had “correctly recognized that the ‘weight of Texas authority’ supports the proposition that the

party owning the deed of trust need not also show that it is the owner or holder of the note in order

to foreclose.”); Morlock L.L.C. v. Nationstar Morg. L.L.C., 447 S.W.3d 42, 47 (Tex. App.—

Houston [14th Dist.] 2014, pet. denied) (“Morlock’s allegation that Nationstar is not the owner or

holder of the Note is irrelevant with respect to Nationstar’s right to enforce the Deed of Trust

through non-judicial foreclosure under Texas law.”); Farkas v. Aurora Loan Services, LLC, No.

05–12–01095–CV, 2013 WL 6198344, at *4 (Tex. App.—Dallas Nov. 26, 2013, pet. denied) (“A

party asserting an interest under the deed of trust is not required to possess the corresponding note

as a prerequisite to foreclose.”); Lowery v. Bank of Am., N.A., No. 04–12–729–CV, 2013 WL
5762227, at *2 (Tex. App.—San Antonio Oct. 23, 2013, no pet.) (“A promissory note and the deed

of trust that secures the note constitute two separate and severable obligations of the debtor-

mortgagor, each with its own distinct remedy for the breach of those obligations.”).

       The evidence in the summary judgment record shows that Nationstar, as the mortgage

servicer, had the authority to enforce the power of sale conferred by the deed of trust. In the

original foreclosure matter, Nationstar moved to foreclose in its role as the mortgage servicer of

the subject home equity loan. The application stated in part: “Nationstar Mortgage, LLC is acting

as the Mortgage Servicer for JP Morgan Chase, Trustee 2005-A, the Mortgagee of the Note and

Security Instrument identified below. Nationstar Mortgage, LLC is authorized to represent the

Mortgagee by virtue of a servicing agreement with the Mortgagee.” In an affidavit attached to the

application, a Nationstar employee affirmed that Nationstar was acting in its role as the servicing

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agent for the mortgagee. The affidavit also affirmed that, at the time the application was filed, (1)

the note was 78 months past due; (2) the amount required to cure the default was $80,404.22; and

(3) the amount required to pay off the lien was $86,691.95. But Farris nonetheless argues that

“[t]he evidence at trial does not reveal any connection between Nationstar and Charles and Jessie

Farris such that Nationstar could establish it has the authority to enforce the terms of the deed of

trust,” an argument that overlooks both the evidence in the record and the applicable law.

       The Texas Property Code allows mortgagees and mortgage servicers to conduct a

nonjudicial foreclosure sale “under a power of sale conferred by a deed of trust or other contract

lien.” See TEX. PROP. CODE ANN. § 51.002. The property code defines mortgagee as “the grantee,

beneficiary, owner, or holder of a security instrument,” and “if the security interest has been

assigned of record, the last person to whom the security interest has been assigned of record.” Id.

§ 51.0001(4)(A), (C). It defines “mortgage servicer” as “the last person to whom a mortgagor has

been instructed by the current mortgagee to send payments for the debt secured by a security

instrument.” Id. § 51.0001(3). “A mortgagee may be the mortgage servicer.” Id. Section 51.0025

provides that a mortgage servicer may administer the foreclosure of property under section 51.002

on behalf of a mortgagee if the mortgage servicer and the mortgagee have entered into an

agreement granting the current mortgage servicer authority to service the mortgage, and if:

       the notices required under Section 51.002(b) disclose that the mortgage servicer is
       representing the mortgagee under a servicing agreement with the mortgagee and
       the name of the mortgagee and:

       (A) the address of the mortgagee; or

       (B) the address of the mortgage servicer, if there is an agreement granting a
       mortgage servicer the authority to service the mortgage.

Id. § 51.0025(1), (2).

       The disclosures contained in the February 15, 2007 notice of default addressed to Charles

Farris, which was attached to Nationstar’s rule 736 application, satisfy the statutory requirements.

                                                –5–
The notice of default (1) stated Nationstar was “acting as the Mortgage Servicer for JP Morgan

Chase, Trustee 2005-a, who is the Mortgagee of the Note and Deed of Trust associated with your

real estate loan;” (2) provided the address of the mortgagee (“Nationstar Mortgage LLC, as

Mortgage Servicer, is representing the Mortgagee, whose address is 2725 N. Harwood, Dallas, TX

75201.”); and (3) identified Nationstar’s address (“Nationstar Mortgage LLC requests that all

payments be made in certified funds, cashier’s check or money orders(s) payable to and mailed to

Nationstar Mortgage LLC at 350 Highland Drive, Lewisville, TX 75067.”). It also included a

contact telephone number for Nationstar Mortgage, LLC. In addition, and as discussed earlier, the

application and the accompanying affidavit show that Nationstar was acting in its role as the

mortgage servicer.

       The record establishes that Nationstar is the servicer of the subject mortgage loan, has the

power of sale conferred by the deed of trust, and that it properly conducted the February of 2017

foreclosure sale following the entry of the court order authorizing foreclosure. Accordingly, we

conclude the trial court did not err in granting summary judgment for appellee, and we overrule

appellants’ issue.

       We affirm the trial court’s judgment.

                                                            /Lana Myers/
                                                            LANA MYERS
                                                            JUSTICE

171491F.P05

                                               –6–
                               Court of Appeals
                        Fifth District of Texas at Dallas
                                       JUDGMENT

 CHARLES A. FARRIS, JESSIE FARRIS,                    On Appeal from the 193rd Judicial District
 AND ALL OTHER OCCUPANTS OF                           Court, Dallas County, Texas
 2325 AVENUE C, GRAND PRAIRIE,                        Trial Court Cause No. DC-17-01834.
 TEXAS 75051, Appellants                              Opinion delivered by Justice Myers.
                                                      Justices Bridges and Osborne participating.
 No. 05-17-01491-CV          V.

 NATIONSTAR MORGAGE LLC F/K/A
 CENTEX HOME EQUITY COMPANY
 LLC, Appellee

     In accordance with this Court’s opinion of this date, the judgment of the trial court is
AFFIRMED. It is ORDERED that appellee NATIONSTAR MORGAGE LLC F/K/A CENTEX
HOME EQUITY COMPANY LLC recover its costs of this appeal from appellants CHARLES A.
FARRIS, JESSIE FARRIS, AND ALL OTHER OCCUPANTS OF 2325 AVENUE C, GRAND
PRAIRIE, TEXAS 75051.

Judgment entered this 8th day of April, 2019.

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