ACCEPTED
13-14-00644-CV
THIRTEENTH COURT OF APPEALS
CORPUS CHRISTI, TEXAS
12/30/2014 6:19:19 PM
DORIAN RAMIREZ
CLERK
No. 13-14-00644-CV FILED IN
13th COURT OF APPEALS
CORPUS CHRISTI/EDINBURG, TEXAS
12/30/2014 6:19:19 PM
DORIAN E. RAMIREZ
IN THE COURT OF APPEALS Clerk
FOR THE THIRTEENTH DISTRICT OF TEXAS
AT CORPUS CHRISTI & EDINBURG
_________________________________________________
LAREDO NATIONAL BANK D/B/A BBVA COMPASS BANK
Appellant,
v.
MYRNA ELIZABETH DE LUNA MORALES,
Appellee.
On Appeal from the 107th Judicial District Court of Cameron County, Texas, the
Honorable Benjamin Euresti, Jr., Presiding
SECOND AMENDED BRIEF OF APPELLANT
Selim H. Taherzadeh Michelle Peritore
Taherzadeh, PLLC Taherzadeh, PLLC
State Bar No. 24046944 State Bar No. 24088212
st@taherzlaw.com mp@taherzlaw.com
5080 Spectrum Drive, Suite 1000 East 5080 Spectrum Drive, Suite 1000 East
Addison, TX 75001 Addison, TX 75001
Tel. (469) 791-0445 Tel. (469) 791-0445
ATTORNEYS FOR APPELLANT
ORAL ARGUMENT REQUESTED
December 30, 2014
IDENTITY OF PARTIES AND COUNSEL
Appellant:
Laredo National Bank D/B/A BBVA Compass Bank
Trial and Appellate Counsel for Appellant:
Selim H. Taherzadeh, Trial and Appellate Counsel
Taherzadeh, PLLC
st@taherzlaw.com
5080 Spectrum Drive, Suite 1000 East
Addison, TX 75001
Tel. (469) 791-0445
Fax (469) 828-2772
Michelle Peritore, Appellate Counsel
Taherzadeh, PLLC
mp@taherzlaw.com
5080 Spectrum Drive, Suite 1000 East
Addison, TX 75001
Tel. (469) 791-0445
Fax (469) 828-2772
Appellee:
Myrna Elizabeth De Luna Morales
Trial and Appellate Counsel for Appellee:
Law Office of Noe Robles
23331 Tamm Lane
Harlingen, Texas 78552
Tel. (956) 440-8200
Fax (956) 440-8205
nrobelslawoffice@aol.com
i
STATEMENT REGARDING ORAL ARGUMENT
Pursuant to Texas Rules of Appellate Procedure 39.1, Appellant requests oral
argument and submits that it would materially aid this Court’s decision.
RECORD REFERENCES
The references to the record used in this Brief are:
CR ___: Refers to the Clerk’s Record and page number(s).
RR ___: Refers to the Reporter’s Record and page number(s).
ii
TABLE OF CONTENTS
IDENTITY OF PARTIES AND COUNSEL .......................................................................... i
STATEMENT REGARDING ORAL ARGUMENT .............................................................. ii
RECORD REFERENCES ................................................................................................ ii
TABLE OF CONTENTS ................................................................................................ iii
TABLE OF AUTHORITIES ..............................................................................................v
STATEMENT OF THE CASE ...........................................................................................x
ISSUE PRESENTED...................................................................................................... xi
INTRODUCTION ............................................................................................................1
STATEMENT OF THE FACTS ..........................................................................................2
A. The Parties' Agreement ..............................................................................2
B. Appellee's Default and the Foreclosure Sale ..............................................3
C. The Course of Litigation ............................................................................5
SUMMARY OF THE ARGUMENT ....................................................................................6
ARGUMENT .................................................................................................................8
I. District Court Should Not Have Issued an Injunction to Stop the Forcible
Detainer Action from Proceeding in the Justice Court…………………9
A. Appellant has the Right to Possession of the Premises………………….9
B. Appellant's Action in Justice Court Should Not Have Been Interrupted
by the District Court……………………………………………………10
II. Appellee Can Not Establish the Three Elements Required to Issue a
Temporary Injunction...............................................................................12
A. Appellee has no Cause of Action against Appellant or Probable Right to
Recovery on Trial on the Merits…….…………………...…………… 13
i. Appellant's Deception……………………………….…………………13
ii. Appellant's Breach of Contract………………………………………...17
iii. Breach of Fiduciary Duty or Duty of Good Faith and Fair Dealing…..19
iv. Negligence……………………………………………………………..21
v. Trespass to Try Title……………………......…………………………23
vi. Wrongful Foreclosure…………………………………………………24
vii. Breach of Trustee's Duties…………………………………………….26
iii
B. Appellee Cannot Show a Probable, Imminent, and Irreparable Injury in
the Interim………………………………………….…………………26
C. Temporary Injunction Should Be Declared Void…………………….29
D. The Bond Should Be Increased………………………………………31
PRAYER FOR RELIEF .................................................................................................32
CERTIFICATE OF SERVICE ..........................................................................................34
CERTIFICATE OF COMPLIANCE ..................................................................................34
APPENDIX
Tab A: Order Granting Temporary Injunction - 107th District Court,
Cameron County Texas, Cause No. 2014-DCL-02962
Tab B: Compass Bank’s Motion To Dissolve Temporary Injunction Order
or in the Alternative to Modify the Order - 107th District Court,
Cameron County Texas, Cause No. 2014-DCL-02962
Tab C: Plaintiff’s Response To Defendant’s Motion(s) to Dismiss and
Defendant’s Motion to Dissolve Temporary Injunction Order and
Alternatively, Plaintiff’s Motion to Reset Hearing on Motions -
107th District Court, Cameron County Texas, Cause No. 2014-
DCL-02962
Tab D: Compass Bank’s Reply to Plaintiff’s Response to Defendant’s
Motion to Dismiss and Motion to Dissolve Temporary Injunction
Order - 107th District Court, Cameron County Texas, Cause No.
2014-DCL-02962
Tab E: Order Denying Motion to Dissolve Temporary Injunction - 107th
District Court, Cameron County Texas, Cause No. 2014-DCL-
02962
Tab F: Texas Rules of Civil Procedure 683
iv
TABLE OF AUTHORITIES
Cases
Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 649 (Tex. 1996). ...........................15
Bank of America v. Babu, 340 S.W.3d 917, 928 (Tex. App. 2011) ........................21
Baucum v. Great American Insurance Co. of New York,
370 S.W.2d 863, 866 (Tex. 1963)........................................................................28
Biodynamics, Inc. v. Guest, 817 S.W.2d 128, 131 (Tex. App.-- Houston
[14th Dist.] 1991, writ dism'd by agr.) .................................................................32
Bittinger v. Wells Fargo Bank NA, 744 F. Supp. 2d 619, 626 (S.D. Tex. 2010) ....19
Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002) ..................................9
Cameron v. Terrell & Garrett, Inc., 618 S.W.2d 535, 539 (Tex. 1981) .................15
Cardinal Health Staffing Network, Inc. v. Bowen, 106 S.W.3d 230, 236-37
(Tex. App.—Houston [1st Dist.] 2003, no pet.) (en banc) ...................................9
Case Corp. v. Hi-Class Business Systems of America, Inc., 184 S.W.3d 760,
769–70 (Tex. App.—Dallas 2005, pet. denied)………………………………...18
Coleman v. Bank of America, N.A., No. 3:11-CV-430-G-BD,
2011 WL 2516169, at *1 (N.D. Tex. May 27, 2011), rec. adopted,
2011 WL 2516668 (N.D. Tex. June 22, 2011). ...................................................20
Dewayne Rogers Logging, Inc. v. Propac Industries, Ltd.,
299 S.W.3d 374, 382–83 (Tex. App.—Tyler 2009, pet. denied). .......................22
D.S.A., Inc. v. Hillsboro Independent School District,
973 S.W.2d 662, 663 (Tex. 1998)........................................................................22
Durkay v. Madco Oil Co., 862 S.W.2d 14, 21
(Tex. App.—Corpus Christi 1993, writ denied)………………………………...27
English v. Fischer, 660 S.W.2d 521, 522 (Tex. 1983)……………………………20
Fillion v. David Silvers Co., 709 S.W.2d 240, 246 (Tex. App.—Houston
[14th Dist.] 1986, writ ref’d n.r.e.). ............................................................... 27,28
FDIC v. Coleman, 795 S.W.2d 706, 709 (Tex. 1990)…………………………….20
Ford v. Exxon Mobil Chem. Co., 235 S.W.3d 615, 618 (Tex. 2007). .....................23
Formosa Plastics Corp. USA v. Presidio Engineers & Contractors, Inc., 960 S.W.2d
41, 45–47 (Tex. 1998) ..........................................................................................22
Galvan v. Centex Home Equity Co., L.L.C., No. 04–06–00820–CV, 2008 WL 441773,
at *4 (Tex. App.—San Antonio Feb. 20, 2008, no pet.) (mem. op.)….27
v
Gatling v. CitiMortgage, Inc., No. H-11-2879, 2012 WL 3756581,
at *13 (S.D. Tex. Aug. 28, 2012)………………………………………………16
Great American Insurance Co. v. North Austin Municipal
Utility District No. 1, 908 S.W.2d 415, 418 (Tex. 1995) ....................................19
Greater Houston Transp. Co. v. Phillips, 801 S.W.2d 523, 525 (Tex. 1990). ........22
Grella v. Berry, 647 S.W.2d 15, 18 (Tex. App.—Houston 1982)………………...28
GTE Mobilnet of South Texas Ltd. Partnership v. Cellular Max, Inc.,
123 S.W.3d 801 (Tex. App. – Beaumont 2003, review dismissed) ....................32
Hall v. Resolution Trust Corp., 958 F.2d 75, 79 (5th Cir. 1992) ............................21
HeilCo. v. Polar Corp., 191 S.W.3d 805, 815–18 (Tex. App.—Fort Worth 2006,
pet. denied)..……………………………………………………………………22
Intercontinental Terminals Co., LLC v. Vopak N. Am., Inc.,
354 S.W.3d 887, 892 (Tex.App.—Houston [1st Dist.] 2011, no pet.) ................30
Jaimes v. Fannie Mae, 03-13-00290-CV, 2013 Tex. App. LEXIS 14615,
(Tex. App. Dec. 4, 2013). ......................................................................................9
Jim Walter Homes, Inc. v. Reed, 711 S.W.2d 617, 618 (Tex. 1986) .......................22
Kassim v. Carlisle Interests, Inc., 308 S.W.3d 537, 541
(Tex. App.—Dallas 2010)....................................................................................12
King v. Wells Fargo Bank, N.A., 3-11CV-0945-M-BD, 2012 WL 1205163,
at *2 (N.D. Tex. Mar. 20, 2012) ..........................................................................18
Kiper v. BAC Home Loans Servicing, LP, 884 F. Supp. 2d 561, 573 (S.D. Tex. 2012).
..............................................................................................................................23
Lambert v. First National Bank of Bowie, 993 S.W.2d 833, 835
(Tex. App.—Fort Worth 1999, pet. denied)……………………………………27
La Sara Grain Co. v. First Nat’l Bank of Mercedes, 673 S.W.2d 558, 564
(Tex. 1984)...………………………………………………………………........15
Liberty Lending Servs. v. Musselwhite, 1999 WL 649131 (Tex. App.--[14th} Houston)
..............................................................................................................................31
Lovell v. Western National Life Insurance Co., 754 S.W.2d 298, 302–03 (Tex.App.—
Amarillo 1988, writ denied)…………………………………………20
Marketic v. U.S. Bank Nat. Ass’n, 436 F. Supp. 2d 842, 855 (N.D. Tex. 2006) .....15
Martin v. Amerman, 133 S.W.3d 262, 265 (Tex. 2004). .........................................23
Matthews v. Wells Fargo Bank, N.A., No. 3-10-CV-O-BD, 2011 WL 2429153,
at *1 (N.D. Tex. May 27, 2011)..........................................................................25
vi
McGlothlin v. Kliebert, 672 S.W.2d 231, 232 (Tex. 1984). .................................7,10
Milton v. U.S. Bank National Ass’n, 508 F. App’x 326, 329–30
(5th Cir. 2013) ......................................................................................................20
Moreno v. Baker Tools, Inc., 808 S.W.2d 208, 210 (Tex.App—Houston
[1st dist.] 1991, no writ). ......................................................................................30
Mullins v. TestAmerica, Inc., 564 F.3d 386, 418 (5th Cir. 2009). ...........................17
Nelson v. Wells Fargo Home Mortg., No. 3:10-CV-1771-O,
2012 WL 6928579, at *6 (N.D. Tex. Nov. 5, 2012) ............................................16
Nichamoff v. CitiMortgage, Inc., No. H-12-1039, 2012 WL 4388344,
at *3-4 (S.D. Tex. Sept. 25, 2012)……………………………………………..16
Northcutt v. Waren, 326 S.W.2d 10, 10 (Tex.Civ.App. -- Texarkana 1959,
writ ref'd n.r.e.).....................................................................................................30
Pachter v. Woodman, 534 S.W.2d 940, 945–46 (Tex. Civ. App.—Tyler 1976), rev’d
on other grounds, 547 S.W.2d 954 (Tex. 1977) ...................................................28
Peoples v. BAC Home Loans Servicing, L.P., No. 4:10-CV-489-A, 2011 WL 1107211,
at *4 (N.D. Tex. Mar. 25, 2011)…………………………………......25
Phillips v. Latham, 523 S.W.2d 19, 24–25 (Tex. Civ. App.—Dallas 1975, writ ref’d
n.r.e.); ...................................................................................................................28
Price v. Reeves, 91 S.W.2d 862, 865 (Tex. Civ. App.—Fort Worth 1936, writ dism’d).
..............................................................................................................................28
Quest Comm. Corp. v. AT&T Corp., 24 S.W.3d 334, 337 (Tex. 2000). .................30
Reyna v. State National Bank, 911 S.W.2d 851, 855–56
(Tex. App.—Fort Worth 1995, writ denied).................................................. 24,26
Riverside Nat’l Bank v. Lewis, 603 S.W.2d 169, 173 (Tex. 1980) ..........................15
Sadler v. Duvall, 815 S.W.2d 285, 293, n.2 (Tex. App.—Texarkana 1991,
pet. denied) ...........................................................................................................24
Saenz v. JPMorgan Chase Bank, N.A., No. 7:13-CV-156, 2013 WL 3280214,
at *2 (S.D. Tex. Jun. 27, 2013). ........................................................ …………..27
Sandhar v. Grewal, No. H-08-2348, 2009 WL 175073, at *4
(S.D. Tex. Jan. 23, 2009)……………………………………………………….18
Sauceda v. GMAC Mortgage Corp., 268 S.W.3d 135, 139 (Tex. App.—Corpus
Christi 2008, no pet.). ...........................................................................................25
Scott v. Hewitt, 90 S.W.2d 816, 819 (Tex. 1936). ............................................ 2,7,12
Sgroe v. Wells Fargo Bank, N.A., 941 F. Supp. 2d 731, 748 (E.D. Tex. 2013). .....24
vii
Smith v. Hamby, 609 S.W.2d 866, 868 (Tex.Civ.App. -- Fort Worth 1980,
no writ).. ..............................................................................................................30
Southwestern Bell Telephone Co. v. DeLanney, 809 S.W.2d 493, 494–95
(Tex. 1991) ...........................................................................................................22
Sport Supply Grp., Inc. v. Columbia Cas. Co., 335 F.3d 453, 466
(5th Cir. 2003)…. .................................................................................................21
Thomas v. EMC Mortgage Corp., No. 4:10-CV-861-A, 2011 WL 5880988,
at *6 (N.D. Tex. Nov. 23, 2011) ..........................................................................25
TMC Med., Ltd. v. Lasaters French Quarter P’ship, 880 S.W.2d 789, 791
(Tex. App.--Tyler 1993). ..................................................................................1,11
Truly v. Austin, 744 S.W.2d 934, 938 (Tex. 1988)………..………………..……..27
UMLIC VP LLC v. T&M Sales & Environmental Systems, Inc.,
176 S.W.3d 595, 612 (Tex. App.—Corpus Christi 2005, pet. denied) ................20
University Interscholastic League v. Torres, 616 S.W.2d 355, 357-58 (Tex.Civ.App --
San Antonio 1981, no writ) ..................................................................................30
Visconti v. Bank of America, No. 4:10-CV-532, 2012 WL 3779083,
at *4-5 (E.D. Tex. Aug. 31, 2012)...……………………………………………16
Vogel v. Travelers Indemnity Co., 966S.W.2d 748, 753
(Tex. App.—San Antonio 1998, no pet.)……………………………………….20
Watson v. Citimortgage, Inc., 814 F. Supp. 2d 726, 731 (E.D. Tex. 2011)………20
White v. BAC Home Loans Servicing, LP, No. 3:09-CV-2484-G, 2010 WL 4352711, at
*5 (N.D. Tex. Nov. 2, 2010)...………………………………….....27
Williams v. Countrywide Home Loans, Inc., 504 F. Supp. 2d 176, 192
(S.D. Tex. 2007)...................................................................................................19
Williams v. Federal National Mortgage Ass’n, No. 2:11-CV-157-J,
2012 WL 443986, at *4 (N.D. Tex. Feb. 13, 2012)……………………………22
Woods v. Bank of America, N.A., No. 3:11-CV-1116-B, 2012 WL 1344343,
at *7 (N.D. Tex. April 17, 2012)………………………………………………17
1001 McKinney Ltd. V. Credit Suisse First Boston Mortgage Capital,
192 S.W.3d 20, 36 (Tex App. 2005)….……………………………………......19
viii
Statutes
TEX. R. CIV. P. 683………………………………………………………………29
TEX. R. CIV. P. 684………………………………………………………………31
ix
STATEMENT OF THE CASE
Nature of the case Appeal of Order Denying Appellant Compass
Bank’s Motion to Dissolve or a Temporary
Injunction.
Course of proceedings Appellant Compass Bank sought to exercise its
rights to possession as owner of a property
following a valid foreclosure sale on April 1, 2014.
On May 12, 2014, Appellee filed its Original
Petition. CR 7. On June 4, 2014, Appellant
Compass Bank filed its Motion to Dismiss and
Motion for Sanctions. CR 59. On June 16, 2014,
Appellant filed a Motion to Deny the Temporary
Injunction. CR 241. On June 26, 2014, the Court
entered an Order granting the Appellee’s Request
for a Temporary Injunction. CR 372. On August 1,
2014, the Appellant filed a Motion for Summary
Judgment. CR 522. On September 23, 2014, the
Appellant filed a Motion to Dissolve Temporary
Injunction Order or in the Alternative to Modify the
Order. CR 667. On October 31, 2014, the Court
entered an Order Denying the Appellant’s Motion
to Dismiss, Motion for Summary Judgment and
Motion to Dissolve the Temporary Injunction. CR
684-86.
Disposition below Order Denying Appellant’s Motion to Dissolve
Temporary Injunction Order or In the Alternative to
Modify the Ordered Entered. Order Denying
Appellant’s Motion to Dismiss and Order Denying
Appellant’s Motion for Summary Judgment
Entered. CR 684-86.
x
ISSUE PRESENTED
Did the Trial Court Err in Denying Appellant’s Motion to Dissolve Temporary
Injunction when:
1.) Appellant has a Right to Immediate Possession of the Premises;
2.) Appellee has No Valid Cause of Action against Appellant or Probable Right
to Recovery on Trial on the Merits;
3.) Appellee Cannot Show a Probable, Imminent, and Irreparable Injury in the
Interim; and
4.) The Temporary Injunction Order fails to comply with the Texas Rules of
Civil Procedure.
xi
INTRODUCTION
The Trial Court erred in denying the Appellant’s Motion to Dissolve
Temporary Injunction because Appellant has the right to immediate possession of
the Premises, the Appellee cannot establish the three elements required for the
issuance of a temporary injunction, and the temporary injunction order, as signed,
does not comply with the Texas Rules of Civil Procedure. When Appellee
defaulted on her loan, Appellant foreclosed on the Property in accordance with the
Note and Deed of Trust. RR 29, CR 276. After the foreclosure sale, Appellee
remained in possession of the Property, and the Appellant had to file a forcible
detainer action in Justice Court in order to obtain possession of the Property. RR
21. As a result, the Appellee filed a petition in District Court in order to enjoining
the parties from proceeding on the forcible detainer action. CR7. On June 26,
2014, the District Court issued a Temporary Injunction enjoining the parties from
proceeding on the forcible detainer action in Justice Court. CR 372.
The Justice Court has the jurisdiction alone to determine the immediate
possessory rights of the parties. TMC Med., Ltd. v. Lasaters French Quarter
P’ship, 880 S.W.2d 789, 791 (Tex. App.--Tyler 1993). Therefore, title disputes in
District Court can proceed concurrently with forcible detainer actions in Justice
Court. Permitting parties to abate forcible detainer actions simply by filing suit in
1
District Court frustrates the legislative intent of forcible detainer proceedings
designed to be an inexpensive and speedy remedy “for the determination of who is
entitled to possession of the premises.” Scott v. Hewitt, 90 S.W.2d 816, 819 (Tex.
1936). The Appellant’s action in Justice Court should not have been interrupted by
the Appellee’s action in District Court.
Even if it would have been appropriate to issue a temporary injunction,
neither the pleadings nor the evidence presented support likelihood of success on
any of the merits of a cause of action that could support rescission of the
foreclosure sale. Since rescission is not available, then it was improper for the
District Court to enjoin the eviction proceedings pending the outcome of the
underlying suit.
The District Court should not have denied the Appellant’s Motion to
Dissolve the Temporary Injunction, and this Court should reverse the Trial Court’s
order.
STATEMENT OF THE FACTS
A. The Parties’ Agreement
2
On January 24, 2006, Myrna Elizabeth de Luna Morales (“Appellee”) signed a
30-year loan agreement (the “Note” or “Loan”) in which she agreed to repay
$291,200.00 to Laredo National Bank (“the Appellant”) in monthly installments of
$1,937.37 beginning March of 2006. Appellee obtained the loan so that she could
purchase a home located at 6503 Fountain Way, South Padre Island, TX 78597
(“Premises” or “Property”). CR 264.
On January 24, 2006, Appellee executed a deed of trust in which she agreed to
repay the amount owed to Appellant in accordance with the note and conveyed the
home to a trustee as security for their repayment. CR 262. Under the deed of trust,
Appellant agreed that it shall give notice to Appellee prior to acceleration following
Appellee’s breach of any covenant or agreement. CR 276. If Appellee failed to cure
her default, Appellant was entitled to require immediate payment in full of all sums
secured without further demand and to invoke the power of sale. CR 276.
If Appellant invoked the power of sale, Appellee authorized the trustee or, any
subsequently appointed trustee, to sell the home to the highest bidder for cash and
agreed that Appellant was allowed to purchase the home at any such sale. CR 276.
Sale under this provision immediately required Appellee to surrender possession of
the home to the purchaser or become a tenant at sufferance. CR 277.
B. Appellee’s Default and the Foreclosure Sale
3
On January 8, 2014, Appellant sent Appellee a notice specifying that (a)
Appellee was in default of her loan by failing to make the required payments for six
consecutive months, (b) Appellee must cure the default by paying $19,919.83, (c)
Appellee must cure the default on or before February 7, 2014, and (d) failure to cure
the default by February 7, 2014, would result in all sums secured by the Deed
becoming immediately due and payable. CR 215; RR 27. Appellee did not cure the
default by February 7, 2014. RR 27. On February 10, 2014, Appellant sent Appellee
a Notice of Acceleration and Notice of Sale notifying Appellee that Appellant was
exercising its power of sale, and that the foreclosure sale would take place on March
4, 2014. CR 224; RR 27-29. Appellee’s former counsel contacted Appellant on
February 26, 2014. Appellee’s former counsel informed Appellant that the Appellee
was working on various ways to obtain the funds to reinstate the Loan or satisfy the
Loan in its entirety. Additionally, Appellee’s former counsel stated that Appellee was
confident she could get the money put together in the next thirty (30) days and/or get
the subject property sold. Relying on that statement, Appellant agreed to postpone
the sale until April 1, 2014. RR 29.
Appellee’s former counsel informed Appellant on March 20, 2014 that the
alleged new purchaser had got cold feet and the sale was not going to go through.
RR29. Appellee’s former counsel subsequently requested a second postponement of
4
the foreclosure sale because Appellee believed she had another potential purchaser
but that it would not close until after the foreclosure sale. RR 31. Appellant, via its
attorney, informed Appellee’s former counsel that the request for a second
postponement of the foreclosure was denied.
The foreclosure sale occurred on April 1, 2014 as noticed, and Appellant
purchased the home for $308,000.00. CR 238. The deed of trust authorizing the sale
provides that upon occurrence of a non-judicial foreclosure sale, Appellee is to
surrender the Premises to the Purchaser at such sale or be deemed to be a tenant at
sufferance. CR 277. Appellee is currently in possession of the premises. RR 21.
Appellant brought a forcible detainer action in a Justice Court. Appellee subsequently
requested and obtained a temporary injunction in District Court and impeded the
Appellant from continuing the forcible detainer action in the Justice Court. CR 7.
C. The Course of Litigation
The Appellee’s Original Petition was filed on May 12, 2014. CR 7.
Appellant Compass Bank filed its Original Answer on May 23, 2014. CR 51. A
temporary injunction hearing was held on May 27, 2014. As a result of a Rule 11
Agreement, the hearing was reset for June 5, 2014. CR 54. The temporary
injunction hearing was held on June 5, 2014, and the temporary restraining order
was extended to June 18, 2014. Appellant Compass Bank filed a Motion to
5
Dismiss and Motion for Sanctions on June 4, 2014. CR 59. On June 11, 2014, the
Appellee filed its First Amended Petition. CR 194. On June 16, 2014, Appellant
filed a Motion to Deny Temporary Injunction. CR 241. On June 26, 2014,
Appellant filed a Second Motion to Deny Temporary Injunction. CR 376. The
Trial Court entered an order granting a Temporary Injunction on June 26, 2014.
CR 372. On July 28, 2014, Appellant filed its Second Motion to Dismiss. CR 508.
On August 1, 2014, Appellant filed a Motion for Summary Judgment. CR 522. On
September 9, 2014, Appellant filed a Motion to Dissolve Temporary Injunction
Order or in the Alternative to Modify the Order. On October 31, 2014, the Trial
Court entered an Order denying the Motion to Dissolve the Temporary Injunction.
CR 684. On October 31, 2014, the Court also entered an Order denying
Appellant’s Motion to Dismiss and an Order Denying Appellant’s Motion for
Summary Judgment. CR 684-86. As a result, this Appeal ensued.
SUMMARY OF THE ARGUMENT
The District Court should not have issued a temporary injunction to stop the
forcible detainer action from proceeding in the Justice Court. Notwithstanding the
fact that the Appellee cannot establish the three elements required for the issuance
of a temporary injunction, Appellant’s action in Justice Court should not have been
interrupted by the Appellee’s claim in District Court. Forcible entry and detainer
6
proceedings are intended to be “summary, speedy, and inexpensive.” See
McGlothlin v. Kliebert, 672 S.W.2d 231, 232 (Tex. 1984). Permitting parties to
abate forcible detainer actions simply by filing suit in District Court frustrates the
legislative intent of forcible detainer proceedings designed to be an inexpensive
and speedy remedy “for the determination of who is entitled to possession of the
premises.” Scott v. Hewitt, 90 S.W.2d 816, 819 (Tex. 1936).
Because Appellant has the right to immediate possession of the premises, the
adequate remedy at law for Appellee is defending oneself in Justice Court. See
McGlothlin v. Kliebert, 672 S.W.2d 231, 232 (Tex. 1984). When the Appellee
defaulted under the terms of the deed of trust, the Appellant purchased the property
as evidenced by the substitute trustee’s deed, which resulted in the Appellant’s
superior right to immediate possession of the premises. CR 238. It is undisputed
that the deed of trust provides that Appellee becomes a tenant at sufferance upon
the foreclosure sale of the property. CR 37.
Even if it was appropriate for the District Court to interrupt Appellant’s
Action in Justice Court, the Plaintiff cannot establish the three elements required
for the issuance of a temporary injunction. Not only does the Appellee have no
cause of action against the Appellant with a probable right to recovery on a trial on
7
the merits, but the Appellee cannot show a probable, imminent, and irreparable
injury.
Finally, the Temporary Injunction Order should be declared void. Under
Texas law, when a temporary injunction order entered by a court does not
articulate essential requirements, it is subject to being declared void and dissolved.
TEX. R. CIV. P. 683. The temporary injunction order failed to mention two
mandatory requirements. CR 372. First, the order failed to set the case for trial on
the merits. Second, the order failed to state the harm that would result in the event
the order was not entered. Therefore, the Temporary Injunction Order fails to
comply with the requirements of Rule 683, and should be declared void and be
dissolved.
The facts and the law show that the Trial Court’s order should be reversed
and the temporary injunction be dissolved and declared void and Appellant be
allowed to proceed with its forcible detainer action pending in the Justice Court.
ARGUMENT
Texas law is clear that the burden of proof for a temporary injunction is on
the party seeking the injunction. To obtain a temporary injunction, a party must
plead and prove three specific elements (1) a cause of action against the defendant;
8
(2) a probable right to recovery following a trial on the merits; and (3) a probable,
imminent, and irreparable injury in the interim. Butnaru v. Ford Motor Co., 84
S.W.3d 198, 204 (Tex. 2002). A temporary injunction is an extraordinary remedy
that does not issue as a matter of right. Butnaru, 84 S.W.3d at 204. An injury is
“irreparable” if the injured party cannot be adequately compensated in damages.
See, e.g., Cardinal Health Staffing Network, Inc. v. Bowen, 106 S.W.3d 230, 236-
37 (Tex. App.—Houston [1st Dist.] 2003, no pet.) (en banc). Moreover, injunctive
relief brought through a District Court to stop an eviction is improper if there is a
forcible detainer action in Justice Court. Jaimes v. Fannie Mae, 03-13-00290-CV,
2013 Tex. App. LEXIS 14615, (Tex. App. Dec. 4, 2013).
I. District Court Should Not Have Issued an Injunction to Stop the
Forcible Detainer Action from Proceeding in the Justice Court.
Under Texas law, a District Court cannot enjoin parties from proceeding on
a forcible detainer action pending in Justice Court, and in support Appellant states
as follows:
A. Appellant has the Right to Possession of the Premises.
A forcible detainer action occurs following a foreclosure sale when a person
becomes a tenant at sufferance, meaning the person is in possession of real
property and refuses to surrender possession on demand. Id. In the present case, the
9
Appellee became a tenant at sufferance when she refused to leave the premises that
no longer belonged to her. “To prevail in a forcible detainer action, a party must
only show sufficient evidence of ownership to demonstrate a superior right to
immediate possession.” Id. Here, the Appellant has a superior right to immediate
possession as evidenced by the trustee’s deed. The substitute trustee’s deed reflects
the Compass Bank purchased the Property after Appellee defaulted under the terms
of the deed of trust. CR 238. The deed of trust established that after acceleration
of the note, foreclosure and sale of the property, any person in possession of the
sold premises would become a “tenant at sufferance” and would be “removed by
writ of possession or other court proceeding.” CR 277. The notices sent by
Compass Bank informed Appellee that her tenancy was being terminated and that
she was required to vacate the Property. CR 287. This evidence is sufficient to
show that Appellant has the right to immediate possession of the Property.
B. Appellant’s Action in Justice Court Should Not Have Been
Interrupted by Appellee’s Claim in District Court.
The Texas Supreme Court held in McGlothlin v. Kliebert that “[f]or the
district court to enjoin the exercise of the justice court’s exclusive jurisdiction in a
forcible entry and detainer case, there must be a showing that the justice court is
without jurisdiction to proceed in the cause or the defendant has no adequate
remedy at law.” McGlothlin v. Kliebert, 672 S.W.2d 231, 232 (Tex.
10
1984). Therefore, a party could have brought her action in District Court only by
“show[ing] facts that existed which prevented [Plaintiff] from making his defense
at law in the justice court.” Id. The adequate remedy at law is defending oneself in
the Justice Court proceedings. Id. In the present case, the Appellee can bring her
defenses in Justice Court rather than delay the “summary, speedy, and
inexpensive” process of forcible entry and detainer proceedings that the legislature
intended. Id. Another Texas court has specifically stated that a trial court had “no
authority to enjoin eviction proceedings” when a landlord attempted to evict a
tenant and the tenant filed a temporary injunction in District Court. TMC Med.,
Ltd. v. Lasaters French Quarter P’ship, 880 S.W.2d 789, 791 (Tex. App.--Tyler
1993). The court further stated that “[t]he justice court alone has jurisdiction to
determine the possessory rights of the parties.” Id.
The Appellee has not alleged any facts nor offered any evidence to support
that that the Justice Court does not have jurisdiction. This case pending in the
Justice of the Peace is merely a dispute between a tenant at sufferance and the
rightful owner of the property. Similar to the facts in the present case, the court in
Jaimes found that a Justice Court proceeding for forcible detainer could not be
enjoined by a temporary injunction filed in District Court when the lienholder
foreclosed on the borrower’s property and the borrower refused to surrender
11
possession. Jaimes, 2013 Tex. App. LEXIS 14615. Additionally, the Texas
Supreme Court held in Scott v. Hewitt that “a forcible detainer action is ‘not
exclusive, but cumulative’ of other remedies that a party may have, thus a party
may pursue both a forcible detainer action in justice court and a suit to quiet title in
district court.” Scott v. Hewitt, 90 S.W.2d 816, 819 (Tex. 1936). Therefore, the
forcible detainer actions in Justice Court may proceed concurrently with title
disputes in District Court. Permitting parties to abate forcible detainer actions
simply by filing suit in District Court would frustrate the legislative intent of
forcible detainer proceedings occurring in “a summary, speedy, and inexpensive
remedy for the determination of who is entitled to possession of the premises.”
Id. This is true “even if the other action adjudicates matters that could result in a
different determination of possession from that rendered in the forcible detainer
suit.” Kassim v. Carlisle Interests, Inc., 308 S.W.3d 537, 541 (Tex. App.—Dallas
2010).
II. Appellee Cannot Establish the Three Elements Required for the
Issuance of a Temporary Injunction.
Despite the fact that the Appellee cannot show that the Justice Court does
not have jurisdiction to proceed with the forcible detainer action, even if she could,
Appellee should not have been entitled to a temporary injunction because she
cannot prove the three elements necessary for the issuance of injunctive relief.
12
A. Appellee Has No Cause of Action against Appellant or Probable
Right to Recovery on Trial on the Merits.
It is undisputed that the Appellee was in default on the loan and that
Appellee received both the notice of default and notice of sale. RR 28. In fact, the
only allegation of wrongdoing on behalf of the Appellee is that Compass Bank
refused to postpone the foreclosure sale for a second time to allow Appellee to
continue to try to sell the property. Appellee admitted that she was not current on
the loan, did not possess the funds to reinstate or payoff the loan, and she did not
attempt to tender the funds to Appellant but was refused. RR 29. Nevertheless,
Appellee’s Amended Petition states her causes of action are a DTPA claim, Breach
of Contract, Breach of Trustee’s Duties, and Negligence. CR 194. Appellee also
makes references throughout the petition to a Breach of Duty of Fairness and Good
Faith. CR 194. Additionally, Appellee’s opening paragraph describes the Petition
as “Plaintiff’s Petition to Set Aside Wrongful Foreclosure, Trespass to Try
Title…” despite making no other references to these causes of action throughout
the pleading. CR 194. As shown below, Appellee either has no cause of action or
no probability of success on the merits for any of them, even the ones improperly
pled.
i. Appellant’s Deception
13
The Appellee asserts that the Appellant violated the Texas Deceptive Trade
Practices Act (“DTPA”) when the Appellant allegedly “led plaintiff to believe that
as a borrower plaintiff would have an absolute right to recourse when faced with
default, acceleration of the note and foreclosure.” CR 197.
Appellee has no likelihood of success on the merits for the reasons stated
below. The Court should also note that Appellant allowed Appellee to attempt to
cure the default when the Appellee alleged that she had a buyer and would be able
to fully pay off the note. RR 29. This contradicts Appellee’s allegation that
Appellant failed to allow her to cure the default. Moreover, Appellee admitted in
the temporary injunction hearing that she did not have the funds to reinstate or
payoff the loan at the time of the foreclosure sale. RR 29; CR 10. Appellee does
not allege nor provided any evidence to suggest that Appellant did anything to
prevent her from reinstating or paying off the loan or how, since she did not have
the funds at the time of the foreclosure sale, she would have been damaged.
Additionally, Appellee lacks standing to bring a claim under the DTPA. To
prevail on a claim under the DTPA, a Plaintiff must establish: (1) she is a
consumer who sought or acquired, by purchase or lease, goods or services from a
defendant; (2) the defendant can be sued under the DTPA; (3) the defendant
committed an act in violation of the DTPA; and (4) the act was a producing cause
14
of the plaintiff’s damages. See Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 649
(Tex. 1996). Appellee’s only factual allegations in support of this claim concern a
failure to postpone the foreclosure sale for a second time, and she alleges no fact
that would tend to show any wrongdoing by Appellant. CR 197. But even if
Appellee could prove conduct that is actionable under the DTPA, which Appellant
denies, Appellee lacks standing as a consumer.
A person must be a consumer to establish a claim under the DTPA. See
Riverside Nat’l Bank v. Lewis, 603 S.W.2d 169, 173 (Tex. 1980); Cameron v.
Terrell & Garrett, Inc., 618 S.W.2d 535, 539 (Tex. 1981); La Sara Grain Co. v.
First Nat’l Bank of Mercedes, 673 S.W.2d 558, 564 (Tex. 1984). A person is a
consumer under the DTPA only if two requirements are met. First, the person
must seek or acquire goods or services by purchase or lease. Riverside, 603
S.W.2d at 173-74; Cameron, 618 S.W.2d at 539; La Sara, 673 S.W.2d at
564. Second, the goods or services must form the basis of the
complaint. Riverside, 603 S.W.2d at 173-74; Cameron, 618 S.W.2d at 539; La
Sara, 673 S.W.2d at 564. In the present action, both requirements fail.
The Texas Supreme Court holds that loans of money or extensions of credit
are not considered goods or services under the DTPA. Riverside, 603 S.W.2d at
174; La Sara, 673 S.W.2d at 567; see also Marketic v. U.S. Bank Nat. Ass’n, 436 F.
15
Supp. 2d 842, 855 (N.D. Tex. 2006) (“[A person] who obtains a home equity loan
does not obtain a “good” or a “service” to qualify as a consumer under the
DTPA”).
Appellee does not allege facts nor offered any evidence demonstrating that
they sought to purchase or lease any goods or services from Appellant. Appellee
does not allege facts nor offered any evidence that would show that they had
dealings with Appellant unrelated to the Loan. Numerous courts in Texas have
held that borrowers similarly situated are not consumers under the DTPA. See
Nelson v. Wells Fargo Home Mortg., No. 3:10-CV-1771-O, 2012 WL 6928579, at
*6 (N.D. Tex. Nov. 5, 2012); Nichamoff v. CitiMortgage, Inc., No. H-12-1039,
2012 WL 4388344, at *3-4 (N.D. Tex. Sept. 25, 2012); Visconti v. Bank of
America, No. 4:10-CV-532, 2012 WL 3779083, at *4-5 (E.D. Tex. Aug. 31, 2012);
Gatling v. CitiMortgage, Inc., No. H-11-2879, 2012 WL 3756581, at *13 (S.D.
Tex. Aug. 28, 2012) (finding that plaintiff was not a consumer because her “claim
is based on acts occurring years after the financing transaction”); Woods v. Bank of
America, N.A., No. 3:11-CV-1116-B, 2012 WL 1344343, at *7 (N.D. Tex. April
17, 2012) (holding “the servicing or administration of the loan is merely incidental
to a plaintiff’s prior objective to purchase a residence, such events do not bestow
consumer status upon the plaintiff for purposes of the DTPA”).
16
Appellee cannot show a probability of success on her DTPA claim since she
is not a consumer, fails to show that Appellant did any wrongdoing, and cannot
show how she was damaged. Additionally, a claim under the DTPA cannot
support a temporary injunction since recovery would be limited to damages and
not rescission of the foreclosure sale.
ii. Appellant’s Breach of Contract
The elements of a breach of contract claim in Texas are “(1) the existence of
a valid contract; (2) performance or tendered performance by the Plaintiff, (3)
breach of the contract by the Defendant; and (4) damages sustained by the Plaintiff
as a result of the breach.” See Mullins v. TestAmerica, Inc., 564 F.3d 386, 418 (5th
Cir. 2009). Defaulting on a loan, absent a showing that the lender actively
prevented the Appellee from making payment, precludes the Appellee from
demonstrating her own performance under the loan agreement. See Woods v. Bank
of America, N.A, No. 3:11-CV-1116-B, 2012 WL 1344343 at *3 (N.D. Tex. Apr.
17, 2012). Here, Appellee cannot show performance on the note or deed of trust
because it is undisputed that she was in default of her payment obligations under
those agreements and that she did not have the funds to reinstate or payoff the loan
at the time of the foreclosure sale. RR 29.
17
Additionally, a borrower “suing for breach of contract must point to a
specific provision in the contract that was breached by the defendant.” King v.
Wells Fargo Bank, N.A., 3-11CV-0945-M-BD, 2012 WL 1205163, at *2 (N.D.
Tex. Mar. 20, 2012); see also Sandhar v. Grewal, No. H-08-2348, 2009 WL
175073, at *4 (S.D. Tex. Jan. 23, 2009) (stating that a plaintiff “must plead . . . the
provisions of the contract allegedly breached” to survive a motion to dismiss);
Case Corp. v. Hi-Class Business Systems of America, Inc., 184 S.W.3d 760, 769–
70 (Tex. App.—Dallas 2005, pet. denied) (“A breach of contract occurs when a
party fails to perform an act that it has expressly or impliedly promised to
perform.”). Appellee fails to point out where in the Note or Deed of Trust it
requires Appellant to postpone a foreclosure sale for a second time to allow her to
try to sell the property in order to payoff the loan.
Appellee has no probable right to relief on her breach of contract claim since
she admittedly was in default under the terms of the contract, failed to allege or
provide evidence as to what section of the deed of trust Appellant breached, admits
to receiving all of the required notices prior to foreclosure, and suffered no
damages as she did not have the funds to reinstate or payoff the loan at the time of
the foreclosure sale. Additionally, a breach of contract claim does not support
18
injunctive relief since the remedy would be damages and not rescission of the
foreclosure sale.
iii. Breach of Fiduciary Duty or Duty of Good Faith and Fair Dealing
In Texas, the elements of a claim for Breach of Fiduciary Duty are “(1) that
the Plaintiff and Defendant had a fiduciary relationship; (2) the Defendant
breached its fiduciary duty to the Plaintiff; and (3) the Defendant’s breach resulted
in injury to the Plaintiff.” See Williams v. Countrywide Home Loans, Inc., 504 F.
Supp. 2d 176, 192 (S.D. Tex. 2007). The relationship between a lender and
borrower is not by itself fiduciary in nature. See Bittinger v. Wells Fargo Bank NA,
744 F. Supp. 2d 619, 626 (S.D. Tex. 2010); Williams, 504 F. Supp. 2d at 192
(citing 1001 McKinney Ltd. v. Credit Suisse First Boston Mortgage Capital, 192
S.W.3d 20, 36 (Tex App. 2005)). Because Appellee has not alleged or produced
any evidence indicating that their interaction with Appellant gave rise to anything
other than an ordinary lender-borrower relationship, they have not shown that
Appellant owed a fiduciary duty to Appellee.
Under Texas law, a duty of good faith and fair dealing does not exist in all
contractual contexts. See Great American Insurance Co. v. North Austin Municipal
Utility District No. 1, 908 S.W.2d 415, 418 (Tex. 1995). Rather, the duty of good
faith and fair dealing arises where a special relationship of trust exists between the
19
parties. See Vogel v. Travelers Indemnity Co., 966 S.W.2d 748, 753 (Tex. App.—
San Antonio 1998, no pet.). “Ordinarily, there is no such duty in lender/lendee
relationships.” Vogel, 966 S.W.2d at 753 (citing FDIC v. Coleman, 795 S.W.2d
706, 709 (Tex. 1990)). Texas law does not “recognize a common law duty of good
faith and fair dealing in transactions between a mortgagee and mortgagor, absent a
special relationship marked by shared trust or an imbalance in bargaining power.”
Coleman v. Bank of America, N.A., No. 3:11-CV-430-G-BD, 2011 WL 2516169, at
*1 (N.D. Tex. May 27, 2011), rec. adopted, 2011 WL 2516668 (N.D. Tex. June 22,
2011). This is because there is no “special relationship between a mortgagor and
mortgagee.” UMLIC VP LLC v. T&M Sales & Environmental Systems, Inc., 176
S.W.3d 595, 612 (Tex. App.—Corpus Christi 2005, pet. denied); see also Watson
v. Citimortgage, Inc., 814 F. Supp. 2d 726, 731 (E.D. Tex. 2011) (citing Coleman,
2011 WL 2516169, at *1); English v. Fischer, 660 S.W.2d 521, 522 (Tex. 1983);
Lovell v. Western National Life Insurance Co., 754 S.W.2d 298, 302–03
(Tex.App.—Amarillo 1988, writ denied).
In applying Texas law, the Fifth Circuit has explicitly refused to recognize
any duty of good faith and fair dealing in the lender-borrower relationship. See
Milton v. U.S. Bank National Ass’n, 508 F. App’x 326, 329–30 (5th Cir. 2013)
(rejecting contention that mortgagee had a “special relationship” with mortgagor
20
where plaintiff had alleged active participation by lender and substantial
interactions, including numerous oral representations by lender that the loan would
not be foreclosed); see also Hall v. Resolution Trust Corp., 958 F.2d 75, 79 (5th
Cir. 1992) (“Three Texas intermediate appellate courts have explicitly refused to
overlay an implied duty of good faith and fair dealing duty in the lender-borrower
relationship. We join them in that respect.”).
The Appellee does not allege any facts nor offered any evidence to suggest
that there is any sort of special relationship between the Appellee and Appellant to
create a fiduciary duty or duty of good faith and fair dealing. As such, Appellee
has no probability of success on the merits for this cause of action and it does not
support injunctive relief.
iv. Negligence
"Under Texas law, the elements of a negligence claim are (1) a legal duty on
the part of the defendant; (2) breach of that duty; and (3) damages proximately
resulting from that breach." Sport Supply Grp., Inc. v. Columbia Cas. Co., 335
F.3d 453, 466 (5th Cir. 2003). "The threshold inquiry with regard to negligence is
whether a legal duty existed." Bank of America v. Babu, 340 S.W.3d 917, 928
(Tex. App. 2011) (citing Greater Houston Transp. Co. v. Phillips, 801 S.W.2d 523,
525 (Tex. 1990)).
21
Texas law follows the Economic Loss Doctrine and this precludes recovery
in tort when the loss complained of is the subject matter of a contract between the
parties. See Southwestern Bell Telephone Co. v. DeLanney, 809 S.W.2d 493, 494–
95 (Tex. 1991); Jim Walter Homes, Inc. v. Reed, 711 S.W.2d 617, 618 (Tex. 1986);
Dewayne Rogers Logging, Inc. v. Propac Industries, Ltd., 299 S.W.3d 374, 382–83
(Tex. App.—Tyler 2009, pet. denied). In other words, tort damages are generally
not recoverable unless the plaintiff suffers an injury that is independent and
separate from the economic losses recoverable under a breach of contract claim.
See Formosa Plastics Corp. USA v. Presidio Engineers & Contractors, Inc., 960
S.W.2d 41, 45–47 (Tex. 1998); HeilCo. v. Polar Corp., 191 S.W.3d 805, 815–18
(Tex. App.—Fort Worth 2006, pet. denied) (citing D.S.A., Inc. v. Hillsboro
Independent School District, 973 S.W.2d 662, 663 (Tex. 1998)). Texas courts
have held that the Economic Loss Doctrine applies to claims for fraud,
misrepresentation, negligence-based claims (including negligent misrepresentation
claims) and Deceptive Trade Practices-Consumer Protection Act claims that arise
from a contract, such as a note or deed of trust. Williams v. Federal National
Mortgage Ass’n, No. 2:11-CV-157-J, 2012 WL 443986, at *4 (N.D. Tex. Feb. 13,
2012); Kiper v. BAC Home Loans Servicing, LP, 884 F. Supp. 2d 561, 573 (S.D.
Tex. 2012).
22
As discussed above, Texas law makes it clear that Appellant has no duty to
Appellee. Even if it did, Appellee fails to allege any actions that would have
breached that duty. And once again, even if she did, recovery under a negligence
cause of action would be barred under the Economic Loss Doctrine. As such,
Appellee has no probability of success on the merits and thus this cause of action
does not support injunctive relief.
v. Trespass to Try Title
"To prevail in a trespass-to-try-title action, Plaintiff must usually (1) prove a
regular chain of conveyances from the sovereign, (2) establish superior title out of
a common source, (3) prove title by limitations, or (4) prove title by prior
possession coupled with proof that possession was not abandoned." Martin v.
Amerman, 133 S.W.3d 262, 265 (Tex. 2004). A suit to quiet title is an equitable
remedy to clarify ownership by removing clouds on the title. See Ford v. Exxon
Mobil Chem. Co., 235 S.W.3d 615, 618 (Tex. 2007). To establish a claim for suit
to quiet title, Plaintiff must show the following: (1) an interest in specific property;
(2) that title to the property is affected by a claim by the defendant; and (3) that the
claim, although facially valid, is invalid or unenforceable. Sadler v. Duvall, 815
S.W.2d 285, 293, n.2 (Tex. App.—Texarkana 1991, pet. denied). An adverse
claim, to constitute a cloud on the title removable by the court, must be one that is
23
valid on its face but is proved by extrinsic evidence to be invalid or unenforceable.
Id.
Appellee has failed to allege any facts that she has a superiority of title. It is
undisputed that the Property was purchased at a foreclosure sale. When she
defaulted on the note and the home was subsequently foreclosed, the Appellee lost
her interest in the Property. Moreover, the courts have found that the purchaser of
the foreclosure sale to be a bona fide purchaser of the Property. See Sgroe v. Wells
Fargo Bank, N.A., 941 F. Supp. 2d 731, 748 (E.D. Tex. 2013). Thus, Appellee has
no likelihood for success for an action to try title.
vi. Wrongful Foreclosure
The basic legal remedies available to the mortgagor for a mortgagee’s
wrongful foreclosure are (1) damages in the amount of the mortgagor’s lost equity
in the property or (2) setting aside the foreclosure sale. See Reyna v. State National
Bank, 911 S.W.2d 851, 855–56 (Tex. App.—Fort Worth 1995, writ denied). The
elements of a claim for wrongful foreclosure are (1) a defect in the foreclosure sale
proceedings, (2) a grossly inadequate selling price, and (3) a causal connection
between the defect and the grossly inadequate selling price. Sauceda v. GMAC
Mortgage Corp., 268 S.W.3d 135, 139 (Tex. App.—Corpus Christi 2008, no
pet.). Moreover, a wrongful foreclosure claim is only available when the
24
irregularity in the foreclosure sale causes the inadequate price for the property. See
Matthews v. Wells Fargo Bank, N.A., No. 3-10-CV-O-BD, 2011 WL 2429153, at
*1 (N.D. Tex. May 27, 2011).
Under Texas law, a claim for wrongful foreclosure is premised upon the
mortgagor’s loss of possession of the property. Thomas v. EMC Mortgage Corp.,
No. 4:10-CV-861-A, 2011 WL 5880988, at *6 (N.D. Tex. Nov. 23, 2011) (holding
that under Texas law, loss of possession is required to state a claim for wrongful
foreclosure); Peoples v. BAC Home Loans Servicing, L.P., No. 4:10-CV-489-A,
2011 WL 1107211, at *4 (N.D. Tex. Mar. 25, 2011).
Appellee has not alleged facts or offered evidence supporting a defect in the
foreclosure sale proceedings, a grossly inadequate selling price, or any connection
between the two. In fact, the Appellee’s own testimony shows that she received all
the contractually and statutorily required notices required for a foreclosure sale.
RR 29. Additionally, Appellee was attempting to sell the property in question for
less than the price sold at the foreclosure sale and thus cannot claim that it sold for
an inadequate sales price. As such, Appellee cannot show a likelihood for success
on the merits for a Wrongful Foreclosure cause of action.
vii. Breach of Trustee’s Duties
25
Appellee alleged a breach of trustee’s duties in its Amended
Pleadings. However, it is undisputed that Connie Medley was the Trustee that
handled the foreclosure sale and thus Appellant cannot be liable for a breach of
trustee’s duties when it was not in fact the trustee of the foreclosure sale. CR 238.
B. Appellee Cannot Show a Probable, Imminent, and Irreparable
Injury in the Interim.
Except for Wrongful Foreclosure or Trespass to Title, recovery for
Appellee’s causes of action is limited to damages, and rescission is not
available. Thus, even if Appellee is ultimately successful on her causes of action,
she would not be entitled to rescission of the foreclosure and to remain in the
property. Thus, she cannot show irreparable injury. The basic legal remedies
available to the mortgagor for a mortgagee’s wrongful foreclosure are (1) damages
in the amount of the mortgagor’s lost equity in the property or (2) setting aside the
foreclosure sale. See Reyna v. State National Bank, 911 S.W.2d 851, 855–56 (Tex.
App.—Fort Worth 1995, writ denied). These are alternative remedies, as a
fundamental principal of Texas law is that “[a] party who has lost property through
a wrongful foreclosure is entitled to either the property or its value, but not both.”
Durkay v. Madco Oil Co., 862 S.W.2d 14, 21 (Tex. App.—Corpus Christi 1993,
writ denied); see also Saenz v. JPMorgan Chase Bank, N.A., No. 7:13-CV-156,
2013 WL 3280214, at *2 (S.D. Tex. Jun. 27, 2013).
26
Since rescission is an equitable remedy, the mortgagor seeking rescission
must do equity itself: “In order to set aside the foreclosure sale, however, the
mortgagor must tender the amount owed on the mortgage. Setting aside a trustee
sale is an equitable remedy which requires the mortgagor to make a valid tender of
the amount due to receive equity.” Galvan v. Centex Home Equity Co., L.L.C., No.
04–06–00820–CV, 2008 WL 441773, at *4 (Tex. App.—San Antonio Feb. 20,
2008, no pet.) (mem. op.) (citing Lambert v. First National Bank of Bowie, 993
S.W.2d 833, 835 (Tex. App.—Fort Worth 1999, pet. denied); Fillion v. David
Silvers Co., 709 S.W.2d 240, 246 (Tex. App.—Houston [14th Dist.] 1986, writ
ref’d n.r.e.)). Consequently, a mortgagor must come to the court with clean hands
to seek the equitable remedy of setting aside the foreclosure sale. See Truly v.
Austin, 744 S.W.2d 934, 938 (Tex. 1988). Thus, Appellee must do equity and
tender the amount due and owing under the promissory note. White v. BAC Home
Loans Servicing, LP, No. 3:09-CV-2484-G, 2010 WL 4352711, at *5 (N.D. Tex.
Nov. 2, 2010) (“to the extent [plaintiff] seeks equitable relief to avoid foreclosure,
he cannot state a claim for such relief because he has not tendered the amount due
on the loan”); Fillion, 709 S.W.2d at 246 (“a necessary prerequisite to
the…recovery of title…is tender of whatever amount is owed on the note”); Grella
v. Berry, 647 S.W.2d 15, 18 (Tex. App.—Houston 1982, no writ) (“In a suit
seeking equitable relief to avoid foreclosure, where the appellants allege they can
27
pay the full amount of the note, we are of the opinion that the appellants must
affirmatively demonstrate their ability to pay the full amount due on the note if
they are to obtain equity”).
In Fillion, the court held not only that the defaulting mortgagor was required
to tender the secured debt but also that the tender was required to be “an
unconditional offer by a debtor or obligor to pay another, in current coin of the
realm, a sum on a specified debt or obligation.” Fillion, 709 S.W.2d at 246
(quoting Baucum v. Great American Insurance Co. of New York, 370 S.W.2d 863,
866 (Tex. 1963)); See also Pachter v. Woodman, 534 S.W.2d 940, 945–46 (Tex.
Civ. App.—Tyler 1976), rev’d on other grounds, 547 S.W.2d 954 (Tex. 1977);
Phillips v. Latham, 523 S.W.2d 19, 24–25 (Tex. Civ. App.—Dallas 1975, writ
ref’d n.r.e.); Price v. Reeves, 91 S.W.2d 862, 865 (Tex. Civ. App.—Fort Worth
1936, writ dism’d).
It is undisputed that Appellee did not unconditionally offer the amounts
owed under the Note. It is also undisputed that the Appellee did not have the funds
at the time of the foreclosure sale to reinstate or payoff the loan. As such,
rescission is not an available remedy for the Appellee. Since rescission is not an
available remedy, it was improper for the Court to issue a temporary injunction
28
order since proceeding with the eviction action in the justice court would not
irreparable injure her ability to recover damages, her only available remedy.
C. Temporary Injunction Order Should be Declared Void.
Under Texas law, the temporary injunction order entered by the Trial Court
did not articulate essential requirements and therefore is voidable. TRCP 683
clearly states that “Every order granting an injunction…1.) shall set forth the
reasons for its issuance; 2.) shall be specific in terms; 3.) shall describe in
reasonable detail and not by reference to the complaint or other document, the act
or acts sought to be restrained; and 4.) is binding only upon the parties to the
action, their officers, agents, servants, employees, and attorneys and upon those
person in active concert or participation with them who receive actual notice of the
order by personal service or otherwise.” TRCP 683 further states, “Every order
granting a temporary injunction shall include an order setting the cause for trial on
the merits with respect to the ultimate relief sought. The appeal of a temporary
injunction shall constitute no cause for delay of the trial.”
An injunction order that does not comply with Rule 683 is subject to being
declared void and dissolved. Quest Comm. Corp. v. AT&T Corp., 24 S.W.3d 334,
337 (Tex.2000). Two mandatory requirements for a Temporary Injunction Order
are: (1) the order must set the case for trial for a specific date, and (2) the order
29
must specifically state what injury will be suffered if the order is not granted. Id.
See also, Intercontinental Terminals Co., LLC v. Vopak N. Am., Inc., 354 S.W.3d
887, 892 (Tex.App.—Houston [1st Dist.] 2011, no pet.) citing Moreno v. Baker
Tools, Inc., 808 S.W.2d 208, 210 (Tex.App—Houston [1st dist.] 1991, no writ).
When a temporary injunction order does not adhere to the requirements of
Rule 683, the injunction order is subject to being declared void and dissolved. E.g.,
Northcutt v. Waren, 326 S.W.2d 10, 10 (Tex.Civ.App. -- Texarkana 1959, writ
ref'd n.r.e.); University Interscholastic League v. Torres, 616 S.W.2d 355, 357-58
(Tex.Civ.App -- San Antonio 1981, no writ); Smith v. Hamby, 609 S.W.2d 866,
868 (Tex.Civ.App. -- Fort Worth 1980, no writ).)
This specific temporary injunction order failed on both counts. First, the
order did not set the case for trial on the merits. Thus, it leaves the Temporary
Injunction to potentially last forever without a resolution. Second, the order failed
to state the harm that would result in the event the order was not entered. The only
harm that there could be would be wrongful foreclosure. But as stated again, based
on the elements of wrongful foreclosure, the Appellee has not alleged facts
supporting a defect in the foreclosure sale proceedings, a grossly inadequate selling
price, or any connection between the two; nor has Appellee unconditionally
tendered the amounts owed under the note.
30
For these reasons, the temporary injunction order does not comply with the
requirements of Rule 683 and it should be declared void and be dissolved.
D. The Bond Should be Increased
Texas Rules of Civil Procedure 684 addresses the issue of the bond
requirement prior to issuing the temporary injunction. TRCP 684 states that an
order granting any temporary injunction, the court shall fix the amount of security
to be given by the applicant. See Liberty Lending Servs. V. Musselwhite, 1999 WL
649131, No. 14-98-01372. The amount of the bond must have some relation to the
potential damages to the respondent if the injunction is wrongfully obtained. The
purpose of the bond is to secure payment to the party against whom injunction is
granted in the amount of damages that party would suffer if the injunction is
subsequently dissolved. Id.
“A trial court has considerable discretion in setting the amount of bond for a
temporary injunction.” GTE Mobilnet of South Texas Ltd. Partnership v. Cellular
Max, Inc., 123 S.W.3d 801 (Tex. App. – Beaumont 2003, review dismissed) citing
Biodynamics, Inc. v. Guest, 817 S.W.2d 128, 131 (Tex. App.-- Houston [14th
Dist.] 1991, writ dism'd by agr.) However, in Mobilnet, the appellate court found
31
that a bond of $1,000 was clearly insufficient when the potential damages suffered
would greatly exceed that $1,000. Id.
Per the note and deed of Trust, Ms. Morales was supposed to make a
monthly payment of $2,849.69. Because of this lawsuit, Appellant is unable to
dispose of the Property or lease it. Thus, Appellant has missed out on monthly
rents since the foreclosure sale on April 1, 2014 of approximately $22,797.52. If
this court does not find that the temporary injunction is dissolved for the reasons
stated above, then the bond should be raised since the Appellant has already
suffered damages well in excess of $1,000.
PRAYER FOR RELIEF
Appellant Compass Bank respectfully asks this Court to reverse the trial
court’s order denying the request to dissolve or modify the temporary injunction.
Appellant pleads further for all other relief to which it is justly entitled under law
or equity.
32
Respectfully submitted,
By: /s/ Selim Taherzadeh
TAHERZADEH, PLLC
Selim H. Taherzadeh
st@taherzlaw.com
Texas Bar No. 24046944
5080 Spectrum Drive
Suite 1000 East
Addison, Texas 75001
Tel. (469) 791-0445
Fax. (469) 828-2772
Michelle Peritore
mp@taherzlaw.com
Texas Bar No. 24088212
5080 Spectrum Drive
Suite 1000 East
Addison, Texas 75001
Tel. (469) 791-0445
Fax. (469) 828-2772
ATTORNEYS FOR APPELLANT
COMPASS BANK
33
CERTIFICATE OF SERVICE
I hereby certify that on December 30, 2014 a true and correct copy of the
above and foregoing Amended Brief of Appellant was properly forwarded to all
counsel of record for Appellee in accordance with Rule 9.5 of the Texas Rules of
Appellate Procedure, as follows:
Law Office of Noe Robles
23331 Tamm Lane
Harlingen, Texas 78552
(T) 956-440-8200
(F) 956-440-8205
nrobelslawoffice@aol.com
/s/ Selim Taherzadeh
Selim Taherzadeh
CERTIFICATE OF COMPLIANCE
Pursuant to Tex. R. App. P. 9.4, I hereby certify that this brief contains
9893 words. This is a computer-generated document created in Microsoft Word
2013, using 14-point typeface for all text, except for footnotes which are in 12-
point typeface. In making this certificate of compliance, I am relying on the word
count provided by the software used to prepare the document.
/s/ Selim Taherzadeh
Selim Taherzadeh
34
No. 13-14-00644-CV
IN THE COURT OF APPEALS
FOR THE THIRTEENTH DISTRICT OF TEXAS
AT CORPUS CHRISTI & EDINBURG
_________________________________________________
LAREDO NATIONAL BANK D/B/A BBVA COMPASS BANK
Appellant,
v.
MYRNA ELIZABETH DE LUNA MORALES,
Appellee.
APPENDIX, TAB A
372
No. 13-14-00644-CV
IN THE COURT OF APPEALS
FOR THE THIRTEENTH DISTRICT OF TEXAS
AT CORPUS CHRISTI & EDINBURG
_________________________________________________
LAREDO NATIONAL BANK D/B/A BBVA COMPASS BANK
Appellant,
v.
MYRNA ELIZABETH DE LUNA MORALES,
Appellee.
APPENDIX, TAB B
No. 13-14-00644-CV
IN THE COURT OF APPEALS
FOR THE THIRTEENTH DISTRICT OF TEXAS
AT CORPUS CHRISTI & EDINBURG
_________________________________________________
LAREDO NATIONAL BANK D/B/A BBVA COMPASS BANK
Appellant,
v.
MYRNA ELIZABETH DE LUNA MORALES,
Appellee.
APPENDIX, TAB C
FILED
2014-DCL-02962
9/23/2014 2:00:29 PM
Aurora De La Garza
Cameron County District Clerk
By Carolina Ostos Deputy Clerk
2590594
667
668
669
No. 13-14-00644-CV
IN THE COURT OF APPEALS
FOR THE THIRTEENTH DISTRICT OF TEXAS
AT CORPUS CHRISTI & EDINBURG
_________________________________________________
LAREDO NATIONAL BANK D/B/A BBVA COMPASS BANK
Appellant,
v.
MYRNA ELIZABETH DE LUNA MORALES,
Appellee.
APPENDIX, TAB D
FILED
2014-DCL-02962
10/10/2014 3:32:28 PM
Aurora De La Garza
Cameron County District Clerk
By Carolina Ostos Deputy Clerk
CAUSE NUMBER 2014-DCL-02962 2797539
MYRNA ELIZABETH DE LUNA § IN THE DISTRICT COURT
MORALES §
§
Plaintiff §
§
v. § 107TH JUDICIAL DISTRICT
§
LAREDO NATIONAL BANK, D/B/A §
BBVA COMPASS BANK §
§
Defendant § CAMERON COUNTY, TEXAS
____________________________________________________________________________________________________________________________________________________________
COMPASS BANK’S REPLY TO PLAINTIFF’S RESPONSE TO DEFENDANT’S
MOTION TO DISMISS AND MOTION TO DISSOLVE TEMPORARY INJUNCTION
ORDER
_____________________________________________________________________________________________________________________
Compass Bank (“Defendant” or “Compass Bank”), an Alabama Banking Corporation, authorized to
do business as BBVA Compass as successor by merger to the Laredo National Bank files this Reply
to Plaintiff’s Response to Defendant’s Motion to Dismiss and Motion to Dissolve Temporary
Injunction and would respectfully show the Court as follows:
1. Plaintiff Myrna Elizabeth De Luna Morales requests the Court to deny Defendant’s
Motion to Dismiss and Motion to Dissolve Temporary Injuction on two grounds. First,
Plaintiff claims that the Court should deny the Motions because the Defendant based its
Motions on an affirmative defense but failed to file an affirmative defense. Secondly,
Plaintiff claims that the Court should deny Defendant’s Motions because Defendant
failed to file Special Exceptions.
2. Plaintiff fails to state what affirmative defense Defendant based its Motions on. In fact,
REPLY 205-00187 Page 1
670
Defendant neither filed an affirmative defense nor relied on an affirmative defense in its
Motion to Dismiss or Motion to Dissolve. Defendant’s is entitled to judgment as a matter
of law based of the pleadings and evidence of record, and not based off of an affirmative
defense.
3. Plaintiff seems to misunderstand Texas Rule of Civil Procedure 91(a). Said rule allows
the Court to dismiss a cause of action that has no basis in law or fact. TRCP 91(a)
provides an alternative remedy to Special Exceptions for pleadings that have no basis in
law or fact. The fact that Defendant did not file Special Exceptions has no bearing on
whether the court should grant its Motion to Dismiss.
4. Plaintiff fails to even respond to the individual reasons the Motion to Dismiss should be
granted as a matter of law for each cause of action.
5. Furthermore, Plaintiff fails to respond to the arguments contained in the Motion to
Dissolve Temporary Injunction Order or in the Alternative to Modify Order. It is
undisputed that the Temporary Injunction Order does not comply with Texas Rules of
Civil Procedure 683.
Conclusion
Even if the Court considers all pleadings in the light most favorable to the Plaintiff, the
causes of action have no basis in law or fact. Plaintiff suggests by the Court granting the
Temporary Injunction, that the Defendant is thus barred from bringing its Motion to Dismiss.
However, each cause of action must stand on its own and even if the Court finds that grounds
exist for a Temporary Injunction Order, it does not mean that other causes of action that have
no basis in law or fact can survive a Motion to Dismiss. Further, the Plaintiffs failed to
respond to the Motion to Dissolve Temporary Injunction. Additional arguments and case law
REPLY 205-00187 Page 2
671
was provided for the court to consider and thus it once again cannot rely on the previous
hearing on the temporary injunction as a defense to the Motion to Dissolve, especially in
light of the fact that the Order, as prepared by counsel for Plaintiff, fails to comply with
TRCP 683.
Respectfully Submitted,
s/ Selim H. Taherzadeh________
Selim H. Taherzadeh
Texas Bar Number: 24046944
Taherzadeh, Pllc
5080 Spectrum Dr.
Suite 1000 East
Addison, Texas 75001
Telephone: (469) 791-0445
Facsimile: (469) 828-2772
Email: st@taherzlaw.com
ATTORNEY FOR DEFENDANT
CERTIFICATE OF SERVICE
A copy of the foregoing document is being served on the below by certified mail, return
receipt requested, first class mail, and electronic mail in accordance with the Texas Rules of Civil
Procedure on the 10th day of October, 2014:
Noe Robles
23331 Tamm Lane
Harlingen, TX 78552
nrobleslawoffice@aol.com
s/ Selim H. Taherzadeh________
Selim H. Taherzadeh
REPLY 205-00187 Page 3
672
No. 13-14-00644-CV
IN THE COURT OF APPEALS
FOR THE THIRTEENTH DISTRICT OF TEXAS
AT CORPUS CHRISTI & EDINBURG
_________________________________________________
LAREDO NATIONAL BANK D/B/A BBVA COMPASS BANK
Appellant,
v.
MYRNA ELIZABETH DE LUNA MORALES,
Appellee.
APPENDIX, TAB E
684
No. 13-14-00644-CV
IN THE COURT OF APPEALS
FOR THE THIRTEENTH DISTRICT OF TEXAS
AT CORPUS CHRISTI & EDINBURG
_________________________________________________
LAREDO NATIONAL BANK D/B/A BBVA COMPASS BANK
Appellant,
v.
MYRNA ELIZABETH DE LUNA MORALES,
Appellee.
APPENDIX, TAB F
Tex. R. Civ. P. 683
This document is current through July 28, 2014
Texas Court Rules > STATE RULES > TEXAS RULES OF CIVIL PROCEDURE > PART VI.
RULES RELATING TO ANCILLARY PROCEEDINGS > SECTION 5. Injunctions
Rule 683 Form and Scope of Injunction or Restraining Order
Every order granting an injunction and every restraining order shall set forth the reasons for its
issuance; shall be specific in terms; shall describe in reasonable detail and not by reference to the
complaint or other document, the act or acts sought to be restrained; and is binding only upon the
parties to the action, their officers, agents, servants, employees, and attorneys, and upon those persons
in active concert or participation with them who receive actual notice of the order by personal service
or otherwise.
Every order granting a temporary injunction shall include an order setting the cause for trial on the
merits with respect to the ultimate relief sought. The appeal of a temporary injunction shall constitute
no cause for delay of the trial.
Annotations
Notes
SOURCE: Federal Rule 65(d), unchanged.
Change by amendment effective April 1, 1984: The last paragraph is added.
PUBLICATION REFERENCES. --See Texas Litigation Guide, Ch. 50, Injunction.
See also Civil Practice & Remedies Code §§ 65.001--65.045.
Case Notes
Antitrust & Trade Law: Trade Practices & Unfair Competition: General Overview
Banking Law: Consumer Protection: Unfair & Deceptive Credit Practices
Business & Corporate Law: Corporations: Shareholders: Actions Against Corporations: General
Overview
Business & Corporate Law: Distributorships & Franchises: Causes of Action: Covenants Not to
Compete
Civil Procedure: Justiciability: Mootness: General Overview
Civil Procedure: Jurisdiction: Subject Matter Jurisdiction: Jurisdiction Over Actions: General
Overview
Civil Procedure: Pleading & Practice: Pleadings: Proceedings in Forma Pauperis: Prisoners: Petitions
Civil Procedure: Parties: Prisoners: Dismissals of Petitions
Civil Procedure: Alternative Dispute Resolution: Arbitrations: General Overview
Civil Procedure: Pretrial Matters: Continuances
Civil Procedure: Trials: Bench Trials
Civil Procedure: Trials: Jury Trials: Actions in Equity
Civil Procedure: Judgments: Entry of Judgments: General Overview
Civil Procedure: Judgments: Entry of Judgments: Enforcement & Execution: General Overview