Case: 12-41023 Document: 00512399439 Page: 1 Date Filed: 10/07/2013
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
October 7, 2013
No. 12-41023 Lyle W. Cayce
Clerk
RAPHAEL HALL,
Plaintiff - Appellant,
v.
BAC HOME LOANS SERVICING, L.P., formerly known as Countrywide
Home Loan Servicing, L.P.; MORTGAGE ELECTRONIC REGISTRATION
SYSTEMS, INCORPORATED; FEDERAL NATIONAL MORTGAGE
ASSOCIATION; TONI STEPHENS; JACQUELINE ANNE KOUGL,
Defendants - Appellees.
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 3:11-CV-417
Before REAVLEY, ELROD, and HAYNES, Circuit Judges.
PER CURIAM:*
Plaintiff-Appellant Raphael Hall (“Hall”) brought suit in state court to
challenge the non-judicial foreclosure of his property. The Defendants removed
to federal court, and the district court granted summary judgment in favor of the
Defendants on all claims. 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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: 12-41023 Document: 00512399439 Page: 2 Date Filed: 10/07/2013
No. 12-41023
I. BACKGROUND
In 2007, Hall purchased real property in Brazoria County, Texas, (“the
Property”) financed with a note payable to First Magnus Financial Corporation
(“First Magnus”). The note was secured by a deed of trust in favor of First
Magnus. The deed of trust lists as beneficiary Mortgage Electronic Registration
System (“MERS”) (as nominee for First Magnus and its successors and assigns)
and the successors and assigns of MERS. The deed of trust also states that
MERS “has the right to exercise any or all of those interests [granted in the deed
of trust], including, but not limited to, the right to foreclose and sell the
Property.” In 2009, MERS assigned its rights and interests under the note and
deed of trust to BAC Home Loans Servicing, L.P. (“BAC”)1 by a written
instrument recorded by the county clerk.
Hall failed to make timely payments on his mortgage, and in October 2010,
he received a notice of default stating that unless he paid the overdue amount,
foreclosure proceedings would be initiated. Hall did not cure the default, and in
June 2011, he received a notice of trustee’s sale with a scheduled foreclosure sale
date of August 2, 2011. The foreclosure sale was postponed, and in August 2011,
Hall received a second notice of trustee’s sale with a scheduled foreclosure sale
date of September 6, 2011. On September 1, 2011, Hall brought suit in state
court and obtained an ex parte temporary restraining order to enjoin BAC from
proceeding with the non-judicial foreclosure sale. Nonetheless, the sale occurred
as scheduled on September 6, 2011, with Federal National Mortgage Association
(“Fannie Mae”) purchasing the Property.
Shortly thereafter, the Defendants removed the case to federal court based
on diversity jurisdiction. The Defendants ultimately filed a motion for summary
judgment. After Hall filed a response, the district court granted summary
1
Shortly before foreclosure, BAC merged into Bank of America, N.A. In this opinion,
we simply refer to the combined entity as BAC.
2
Case: 12-41023 Document: 00512399439 Page: 3 Date Filed: 10/07/2013
No. 12-41023
judgment in favor of the Defendants. Hall appealed.
II. DISCUSSION
“We review a grant of summary judgment de novo, applying the same
standard as the district court and viewing the evidence in the light most
favorable to the non-moving party.” Am. Family Life Assurance Co. v. Biles, 714
F.3d 887, 895 (5th Cir. 2013). Summary judgment is appropriate when “there
is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” FED. R. CIV. P. 56(a). “Unsubstantiated
assertions, improbable inferences, and unsupported speculation are not
sufficient to defeat a motion for summary judgment.” Brown v. City of Hous.,
337 F.3d 539, 541 (5th Cir. 2003).
In his amended complaint, Hall asserted seven causes of action. The
district court granted summary judgment against Hall on all of his claims. On
appeal, Hall raises three issues, each of which relate only to his first two causes
of action: wrongful foreclosure and suit to quiet title and void substitute
trustee’s deed. Because Hall has not raised arguments regarding his other five
causes of action, any such arguments are waived. Bailey v. Shell W. E&P Inc.,
609 F.3d 710, 722 (5th Cir. 2010) (“Issues not briefed on appeal are waived.”).
A.
Hall first argues that summary judgment was improper because the
temporary restraining order entered in state court rendered the foreclosure sale
void ab initio therefore giving rise to an action for wrongful foreclosure and suit
to quiet title. He relies on O’Brian v. First State Bank, No. 03-95-00644-CV,
1996 Tex. App. LEXIS 4099 (Tex. App.—Austin Sept. 11, 1996, writ denied) (not
designated for publication), for the proposition that “[a] foreclosure sale made in
violation of an injunction is void and transfers no title.” Id. at *15. In Hall’s
case, this theory of relief is inapposite because the restraining order that he
received was itself void and of no legal effect.
3
Case: 12-41023 Document: 00512399439 Page: 4 Date Filed: 10/07/2013
No. 12-41023
Pursuant to Texas Rule of Civil Procedure 680, “[no] temporary restraining
order shall be granted without notice to the adverse party unless it clearly
appears from specific facts shown by affidavit or by the verified complaint that
immediate and irreparable injury, loss, or damage will result to the applicant
before notice can be served and a hearing had thereon.” TEX. R. CIV. P. 680.
Furthermore, “[e]very temporary restraining order granted without
notice . . . shall define the injury and state why it is irreparable and why the
order was granted without notice.” Id. “Orders that fail to fulfill these
requirements are void.” In re Office of the Attorney Gen., 257 S.W.3d 695, 697
(Tex. 2008).
Hall sought the temporary restraining order ex parte and his application
for the order did not contain any specific facts demonstrating that immediate
injury or loss would occur before notice and a hearing could be had. More
significantly, the temporary restraining order that Hall received failed to state
why it was granted without notice. Because the temporary restraining order did
not meet the requirements of Texas Rule of Civil Procedure 680, it is void under
Texas law.2 Id. Accordingly, the temporary restraining order could not serve to
void the foreclosure sale or prevent transfer of the Property as Hall asserts. See
In re Garza, 126 S.W.3d 268, 271 (Tex. App.—San Antonio 2003, orig. proceeding
[mand. denied]) (“A void [temporary injunction] order has no force or effect and
confers no rights; it is a mere nullity.” (citing Slaughter v. Qualls, 162 S.W.2d
671, 674 (Tex. 1942))). Hall’s argument that he may maintain a wrongful
foreclosure action and suit to quiet title based on the temporary restraining
order is without merit.
2
This appears to be what the district court had in mind when it instructed Hall during
a conference that there were “no grounds for” the temporary restraining order, that he
“shouldn’t have gotten it,” that the court would dissolve the order, and that Hall’s theory of
relief on this ground was meritless.
4
Case: 12-41023 Document: 00512399439 Page: 5 Date Filed: 10/07/2013
No. 12-41023
B.
Hall’s second argument on appeal is that his first two causes of action
survive summary judgment based on the “split-the-note” theory: while MERS
may have transferred the deed of trust to BAC, it did not transfer the note to
BAC; because BAC did not possess the note, it could not enforce the deed of trust
through foreclosure. In Martins v. BAC Home Loans Servicing, L.P., we recently
considered this theory in depth and found it “inapplicable under Texas law
where the foreclosing party is a mortgage servicer and the mortgage has been
properly assigned. The party to foreclose need not possess the note itself.” 722
F.3d 249, 255 (5th Cir. 2013). We are bound by the holding in Martins.
Hall acknowledged MERS had the authority to foreclose when he signed
the deed of trust, which states that MERS can “exercise any or all of those
interests [granted in the deed of trust], including, but not limited to, the right
to foreclose and sell the Property.” The summary judgment evidence
demonstrates that MERS validly assigned its rights under the deed of trust to
BAC.3 “[T]he assignment explicitly included the power to foreclose by the deed
of trust.” Id. As “the last person to whom the security interest ha[d] been
assigned of record,” BAC was a mortgagee as defined by the Texas Property
Code. See TEX. PROP. CODE ANN. § 51.0001(4)(C) (West 2007). BAC was also a
mortgage servicer under the Texas Property Code. See § 51.0001(3) (defining
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
3
The Defendants submitted the sworn deceleration of Veronica Vela in which she
testified that MERS assigned its interests under the deed of trust to BAC. Attached to the
declaration were copies of the note, the deed of trust, and the assignment of the deed of trust,
which was signed, notarized, and recorded by the county clerk. Hall did not present evidence
that created a genuine issue of material fact as to the validity of the assignment.
Furthermore, on appeal, Hall does not contest the validity of the assignment of the deed
of trust. Instead, Hall relies on the split-the-note theory to contend that the assignment did
not transfer the note, which Hall asserts BAC must possess in order to foreclose.
5
Case: 12-41023 Document: 00512399439 Page: 6 Date Filed: 10/07/2013
No. 12-41023
instrument”). Accordingly, BAC had the authority to foreclose on the Property
in either its role as mortgagee or mortgage servicer. See TEX. PROP. CODE ANN.
§§ 51.002, 51.0025 (West 2007).
Pursuant to Martins, Hall’s characterization of Texas law is incorrect—it
simply was not necessary for BAC to possess the note to foreclose. See Martins,
722 F.3d at 255. The district court did not err in granting summary judgment
to BAC on Hall’s causes of action relying on the split-the-note theory.
C.
Hall’s final argument is that because the notice of foreclosure incorrectly
lists BAC as the mortgagee and mortgage servicer, it misrepresents key facts
and fails to comply with § 51.0025 of the Texas Property Code, thereby rendering
the foreclosure sale void or voidable. This ground for relief was not included in
Hall’s amended complaint and therefore could not have been considered by the
district court when granting summary judgment. Since this issue was raised for
the first time on appeal, we will not consider it. Priester v. Lowndes Cnty., 354
F.3d 414, 424–25 (5th Cir. 2004).4
AFFIRMED.
4
In any event, BAC was a mortgagee and mortgage servicer as defined by the Texas
Property Code. See § 51.0001(3)–(4).
6