Georgeine Mike Korompay v. Deutsche Bank National Trust Company as Trustee for Carrington Mortgage Loan Trust Series 2005-NC3 Asset Backed Pass Through Certificates

ACCEPTED
03-14-00523-CV
3740835
THIRD COURT OF APPEALS
AUSTIN, TEXAS
1/12/2015 6:12:12 PM
JEFFREY D. KYLE
CLERK
No. 03-14-00523-CV

FILED IN
3rd COURT OF APPEALS
IN THE THIRD COURT OF APPEALS OF TEXASAUSTIN, TEXAS
1/12/2015 6:12:12 PM
JEFFREY D. KYLE
Clerk
GEORGEINE MIKE KOROMPAY
Appellant

DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE
FOR CARRINGTON MORTGAGE LOAN TRUST, SERIES 2005-
NC3 ASSET BACKED PASS THROUGH CERTIFICATES
Appellees

Appeal from the County Court at Law 1 Travis County, Texas
Trial Court No. C-1-CV-14-003847

REPLY BRIEF OF APPELLANT

David Rogers
Texas Bar No. 24014089
Law Office of David Rogers
1201 Spyglass Suite 100
Austin, TX 78746
Matthew Wilson
Texas Bar No. 24079588
Telephone: (512) 923-1836
Fax: (512) 201-4082

ATTORNEY FOR APPELLANT

ORAL ARGUMENT NOT REQUESTED

i
 No. 03-14-00523-CV

IN THE THIRD COURT OF APPEALS OF TEXAS

GEORGEINE MIKE KOROMPAY
Appellant

DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE
FOR CARRINGTON MORTGAGE LOAN TRUST, SERIES 2005-
NC3 ASSET BACKED PASS THROUGH CERTIFICATES
Appellees

Appeal from the County Court at Law 1 Travis County, Texas
Trial Court No. C-1-CV-14-003847

REPLY BRIEF OF APPELLANT

David Rogers
Texas Bar No. 24014089
Law Office of David Rogers
1201 Spyglass Suite 100
Austin, TX 78746
Matthew Wilson
Texas Bar No. 24079588
Telephone: (512) 923-1836
Fax: (512) 201-4082

ATTORNEY FOR APPELLANT

ORAL ARGUMENT NOT REQUESTED

ii
 IDENTITY OF PARTIES AND COUNSEL
APPELLANT:

Georgeine Mike Korompay

COUNSEL:

David Rogers
SBN 24014089
Law Office of David Rogers
1201 Spyglass Suite 100
Austin, TX 78746
(512) 923-1836
(512) 201-4082 [Facsimile]
DARogers@aol.com

Matthew Wilson
SBN 24079588
1201 Spyglass Suite 100
Austin, TX 78746
(512) 923-1836
(512) 201-4082 [Facsimile]
MWilson@MatthewWilsonLaw.com

APPELLEES:

Deutsche Bank National Trust Company as Trustee for Carrington Mortgage
Loan Trust, Series 2005-NC3 Asset Backed Pass Through Certificates

COUNSEL:

Travis H. Gray
SBN 24044965
Jack O’Boyle & Associates
P.O.Box 815369
Dallas, TX 75381
(972) 247-0653
(972) 247-0642 [Facsimile]
Travis@jackoboyle.com

iii
TABLE OF CONTENTS

Identity of Parties and Counsel……………………………………………..iii

Table of Contents…………………………………………………………...iv

Index of Authorities…………………………………………………......v-viii

Summary of Argument………………………………………………………1

Argument & Authorities…..………………………………………………....2

Prayer…….…..……………………………………………….....................16

iv
 INDEX OF AUTHORITIES
FEDERAL CASES
Train v. Natural Resources Defense Council, Inc., 421 U.S. 60, 87, (1975)..5
See Commissioner v. South Texas Lumber Co., 333 U.S. 496, 501,
92 L. Ed. 831, 68 S. Ct. 695 (1948)…………………………………..……..5

FEDERAL CIRCUIT APPEALS CASES
Nalle v. Commissioner, 997 F.2d 1134, 1136 (5th Cir. 1993)………………5
Enron Gas Processing Co. v. United States, 1996 U.S. Dist. LEXIS 13750
(5th Cir. 1996)……………………………………………………………..…6
Elgin Nursing And Rehabilitation Center vs. U.S. Department Of
Health And Human Services, 718 F.3d 488, (5th Cir. 2013)…………...……6
First Nat'l Bank v. Comptroller of Currency, 697 F.2d 674;
1983 U.S. App. LEXIS 30720………………………………………………9
Fidelity & Deposit Co. v. Conner, 973 F.2d 1236, 1241-42 (5th Cir. 1992)….10

U.S. SUPREME COURT CASES
Chevron, U.S.A., Inc., v. Natural Resources Defense Council. Inc.,
467 U.S. 837, 842-43, 81 L. Ed. 2d 694, 104 S. Ct. 2778 (1984)………….4
Mims v. Arrow Fin. Servs., LLC, 132 S. Ct. 740, 748; 181 L. Ed. 2d 881,
2012 U.S. LEXIS 906 (2012)………………………………………………6
Tafflin v. Levitt, 493 U.S. 455, 458-459, 110 S. Ct. 792,
107 L. Ed. 2d 887 (1990)…………………………………………………..6
Howlett v. Rose, 496 U.S. 356, 367, 110 S. Ct. 2430, 110 L.
Ed. 2d 332 (1990)………………………………………………………….7
Maryland v. Louisiana, 451 U.S. 725, 746, 101 S. Ct. 2114, 68

v
L. Ed. 2d 576
(1981)……………………………………………………….……………..7
Hurd v. Hodge, 334 U.S. 24; 68 S. Ct. 847; 92 L. Ed. 1187;
1948 U.S. LEXIS 2765………………………………………………….…8
W.R. Grace & Co. v. Local Union 759, Int'l Union of United Rubber,
461 U.S. 757; 103 S. Ct. 2177; 76 L. Ed. 2d 298; 1983 U.S. LEXIS 42.…9

TEXAS SUPREME COURT CASES
Zachry Constr. Corp. v. Port of Houston Auth., 2014 Tex.
LEXIS 768 (Tex. 2014)…………………………………………………..11
James v. Fulkrod, 5 Tex. 512, 520 (1851)………………………………..12
Bond v. Terrell Cotton & Woolen Mfg. Co., 82 Tex. 309, 313
(Tex. 1891)………………………………………………………………..14

TEXAS COURTS OF APPEAL
Jaimes v. Fannie Mae, 2013 Tex. App. LEXIS 14615
(Tex. App.-Austin December 4, 2013)………………………………………1
Falcon v. Ensignia, 976 S.W.2d 336, 338 (Tex. [*558]
App.-- Corpus Christi 1998, no pet.); Mitchell, 911 S.W.2d at 171…….…..2
Fandey v. Lee, 880 S.W.2d 164, 169 (Tex. App.--El Paso 1994,
writ denied)……………………………………………………………….…2
Haith v. Drake, 596 S.W.2d 194, 196 (Tex. Civ. App.--Houston
[1st Dist.] 1980, writ ref'd n.r.e.)……………………………………………2
Dormady v. Dinero Land & Cattle Co., 61 S.W.3d 555, 558-559
(Tex. App.--San Antonio 2001, pet. dism'd w.o.j.)………………………..…2
First Nat'l Collection Bureau, Inc. v. Walker, 348 S.W.3d 329, 336
(Tex.App. – Dallas 2011)…………………………………………………...7

vi
see The Chair King, Inc. v. GTE Mobilnet of Houston, Inc., 184
S.W.3d 707, 712 (Tex. 2006)……………………………………………….8
In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 129 (Tex. 2004)………11
Sonny Arnold, Inc. v. Sentry Sav. Ass'n, 633 S.W.2d 811, 815
(Tex.1982)………………………………………………………………….11
Curlee v. Walker, 112 Tex. 40, 244 S.W. 497, 498 (Tex.
1922)………………………………………………………….………….....11
Miller v. Long-Bell Lumber Co., 148 Tex. 160, 222 S.W.2d 244,
246 (Tex. 1949)…………………………………………………………….12
Franklin v. Jackson, 847 S.W.2d 306, 310 (Tex. App.--El Paso
1992……………………………………………………………….………..12
TCA Bldg. Co. v. Northwestern Resources Co., 922 S.W.2d 629, 636
(Tex.App. – Waco 1996)…………………………………………………...12
Plaza Nat. Bank v. Monfrey, 706 S.W.2d 714, 717
(Tex. App.—San Antonio 1986, writ rf’d
n.r.e.)…………………………………………………………………….…13
Jack v. State, 694 S.W.2d 391, 397 (Tex. App.—San Antonio 1985,
writ ref’d
n.r.e.)………………………………………………………………….……13
International Aircraft Sales, Inc. v. Betancourt, 582 S.W.2d 632, 635
(Tex. Civ. App. -- Corpus Christi 1979, writ ref'd n.r.e.)………………….14
Park v. Coulson, 139 S.W.2d 667, 668 (Tex. Civ. App. –
Amarillo 1940, no writ)……………………………………………………14
Mayfield v. Troutman, 613 S.W.2d 339, 344 (Tex. Civ. App. –
Tyler 1981, writ ref'd n.r.e.)……………………………………………….14
Peniche v. AeroMexico, 580 S.W.2d 152, 157
(Tex. Civ. App. -Houston [1st Dist.] 1979, no writ)………………………14

vii
Continental Fire & Casualty Ins. Corp. v. American Mfg. Co.,
221 S.W.2d 1006, 1009 (Tex. Civ. App. -Fort Worth 1949, writ ref'd)…..14
Roberts v. San Jacinto Shipbuilders, Inc., 198 S.W.2d 488, 492
(Tex. Civ. App. -Galveston 1946, writ ref'd n.r.e.)………………………..14
Mortgage Elec. Registration Sys. v. Young, No. 02-08-00088-CV,
2009 Tex. App. LEXIS 3937, 2009 WL 1564994, at *5
(Tex. App.—Fort Worth June 4, 2009, no pet.)………………………...…16

CODES
26 USC 860G(a)(3)(A)(ii)…………………..………………………………3
IRS Code 860G(a)(3)(ii)……………………….……………………………3
13 TEX. JUR.2D CONTRACTS, § 220………………..……………………….14

Tex. Gov't Code Ann. § 27.031(a)(2)………………………………………14

Tex. Prop. Code Ann. § 24.004…………………………………………….14

RULES
Tex. R. Civ. P. 749 (West 2013, repealed 2013)…………………………...15
Tex. R. Civ. P. 751 (West 2013, repealed 2013)…………….………….….15

viii
TO THE HONORABLE THIRD COURT OF APPEALS:
1. Appellant, Georgeine Korompay, hereby pleads that the honorable

Court of Appeals reverse the judgment of the County Court at Law #1 and

remand for further proceedings, and in support of this motion she shows the

Court:

SUMMARY OF ARGUMENT

2. The sole issue in this case is whether a title dispute exists precluding

the lower court’s jurisdiction. As the trial court properly outlined the issue:

“nemo dat quod non habet . . . You cannot give what you don't have.” RR

Vol002, p. 15, lines 12-19. The trial court, nevertheless, came to the

incorrect conclusion in granting possession to a party that did not own the

property.1 A title dispute exists in this case because the party seeking to

foreclose has no ownership interest, actual or by agency.

3. Appellees the CARRINGTON MORTGAGE LOAN TRUST,

SERIES 2005-NC3, are, based on their SEC filing, a "real estate mortgage

investment conduit" (or "REMIC" as defined in the Code.) (RR-Vol 003, p.
1
Ownership is the first of the five elements a plaintiff must prove in a
forcible detainer suit. Jaimes v. Fannie Mae, 2013 Tex. App. LEXIS 14615
(Tex. App.-Austin December 4, 2013), at 4-5 (“To establish forcible
detainer, Fannie Mae had to prove: (1) it was the owner of the property in
question, (2) [Defendant] was an occupant at the time of foreclosure, (3) the
foreclosure was of a lien superior to [Defendant]’s right to possession, (4)
Fannie Mae made a written demand for possession in accordance with
section 24.005 of the Property Code, and (5) [Defendant] refused to vacate.”)

p. 1
144) or REMIC trust, created for purposes of enjoying the federal IRS tax

benefits such trusts enjoy. The same code provides limits on what

constitutes a “qualified mortgage” (a mortgage conveyed into the trust

within a 3 month window after the trust “closing date”). The evidence

provided to the trial court was sufficient proof to notify the trial court that

inclusion of Appellants’ property into the REMIC Trust at the time of the

purported assignment, outside of the 3 month window, violated federal law.

A contract – including a contract for sale or transfer of a note – that violates

federal law is void ab initio. The state courts are bound to follow federal

law and so hold.

4. Consequently, a title dispute does exist. The justice and county courts

below lacked jurisdiction to consider, much less grant, possession.2 The

order of possession must be reversed. This case must be remanded, on

jurisdictional grounds, for dismissal by the Travis County Court.

2
“[I]f the question of title is so intertwined with the issue of possession, then
possession may not be adjudicated without first determining title. Falcon v.
Ensignia, 976 S.W.2d 336, 338 (Tex. [*558] App.-- Corpus Christi 1998,
no pet.); Mitchell, 911 S.W.2d at 171; Fandey v. Lee, 880 S.W.2d 164, 169
(Tex. App.--El Paso 1994, writ denied). In such a case involving a genuine
issue of title, neither the justice court, nor the county court on appeal, has
jurisdiction. Mitchell, 911 S.W.2d at 171; Haith v. Drake, 596 S.W.2d 194,
196 (Tex. Civ. App.--Houston [1st Dist.] 1980, writ ref'd n.r.e.).”
Dormady v. Dinero Land & Cattle Co., 61 S.W.3d 555, 558-559 (Tex. App.--
San Antonio 2001, pet. dism'd w.o.j.) (op. on reh'g).

p. 2
 ARGUMENT & AUTHORITIES

Appellees are a "real estate mortgage investment conduit" or "REMIC"

trust

5. At the 736 hearing, Appellants (Defendants) proffered their Exhibit 1

(RR – VOL003, p. 80).3 Therein, it states:

FEDERAL INCOME TAX CONSEQUENCES

In the opinion of Thacher Proffitt & Wood LLP, counsel to the
depositor, assuming compliance with the provisions of the pooling
and servicing agreement, for federal income tax purposes, each
REMIC established under the pooling and servicing agreement will
qualify as a REMIC under the Code.

6. As a REMIC trust, the trust fund is regulated by the U.S. Internal

Revenue Service pursuant to the mandate passed by Congress, 26 USC

860G. The statute sets forth the requirements for a mortgage to qualify as an

asset of Defendants in a REMIC trust. 26 USC 860G(a)(3)(A)(ii) states, in

pertinent part:

(a) Definitions
For purposes of this part—
(3) Qualified mortgage
The term “qualified mortgage” means—
(A) any obligation (including any participation or
certificate of beneficial ownership therein) which is principally
secured by an interest in real property and which—

3
http://www.secinfo.com/dr66r.z11c.f.htm?Show=All#TOT

p. 3
 (ii) is purchased by the REMIC within the 3-month
period beginning on the startup day if, except as provided in
regulations, such purchase is pursuant to a fixed-price contract
in effect on the startup day.
(Emphasis added).
7. All REMIC loans must be acquired on the startup day of the REMIC

or within 3 months thereafter, according to IRS Code 860G(a)(3)(ii). The

Internal Revenue Service has issued an opinion interpreting this provision of

the Code. That opinion held:

B. Treatment of release of real property lien under section
860G
Section 860D(a)(4) of the Code defines a REMIC in pertinent
part as an entity substantially all of the assets of which consist
of qualified mortgages and permitted investments as of the
close of the third month beginning after the startup day and at
all times thereafter. Section 860G(a)(3)(A) requires that an
obligation be principally secured by an interest in real property
to be considered a qualified mortgage. Section 860G(a)(3)(A)
also requires that an obligation be transferred to the REMIC
on the startup day in exchange for regular or residual
interests in the REMIC or be purchased by the REMIC within
the 3-month period beginning on the startup day to be
considered a qualified mortgage.
Internal Revenue Service Op. No. 200648023, Release Date:
12/1/2006 Index Number: 860G.03-00, 1001.00-00, William E.
Coppersmith Chief, Branch 2 Office of Associate Chief Counsel
Financial Institutions & Products.

8. Agency interpretation of laws they are required to execute are to be

given deference as to the meaning of a statute. In Chevron, U.S.A., Inc., v.

Natural Resources Defense Council. Inc., 467 U.S. 837, 842-43, 81 L. Ed.

p. 4
2d 694, 104 S. Ct. 2778 (1984), the Supreme Court forged the analytic

framework for assessing the validity of an administrative agency's

construction of the statute that it is charged with administering.

9. The Court in Chevron announced a two-step method of analysis.

Initially, a reviewing court must determine "whether Congress has directly

spoken to the precise question at issue." To the extent that this court is

asked to assess the relevant government agency's construction of a statutory

term, two inquiries are immediate: whether Congress has spoken directly to

the precise question at hand and, if not, whether the agency's proposed

answer to the question is based on a permissible construction of the statute.

See Chevron, id.

10. If the Congressional intent is clear, the matter ends and the court and

the agency must "give effect to the unambiguously expressed intent of

Congress". Chevron, 467 U.S. at 843. In the absence of such clear intent, or

in the face of an ambiguity, the court will assess the administrative

interpretation. "Such legislative regulations are given controlling weight

unless they are arbitrary, capricious, or manifestly contrary to the statute."

Chevron, 467 U.S. at 844 (citing INS v. Jong Ha Wang, 450 U.S. 139,

(1981); Train v. Natural Resources Defense Council, Inc., 421 U.S. 60, 87,

(1975).

p. 5
11. The proffered agency interpretation will not be "disturbed unless it

appears from the statute or its legislative history that the accommodation is

not one that Congress would have sanctioned." Chevron, 467 U.S. at 845

(citing United States v. Shimer, 367 U.S. 374, 382, 383, (1961) (citation

omitted)). In that regard, judicial deference is owed to the IRS interpretation

of a regulation when it constitutes a "contemporaneous construction" of the

statute. See Commissioner v. South Texas Lumber Co., 333 U.S. 496, 501,

92 L. Ed. 831, 68 S. Ct. 695 (1948). 12. In deciding whether a regulation

carries out its congressional mandate properly, the court must "look to see

whether the regulation harmonizes with the plain language of the statute, its

origin, and its purpose." Nalle v. Commissioner, 997 F.2d 1134, 1136 (5th

Cir. 1993) (quoting National Muffler Dealers Ass'n v. United States, 440

U.S. 472, 477, (1979)). Enron Gas Processing Co. v. United States, 1996

U.S. Dist. LEXIS 13750 (5th Cir. 1996). See also Elgin Nursing And

Rehabilitation Center vs. U.S. Department Of Health And Human Services,

718 F.3d 488, (5th Cir. 2013).

13. The provisions of this REMIC trust are not contested. The issue is

whether, based on the requirements of 26 USC 860G(a)(3)(ii), Appellants’

Note was a ‘qualified mortgage’ when it was included into the Trust more

p. 6
than five years after it legally could have been included. As a matter of

federal law and undisputed fact, it was not. The Note was not TIMELY

assigned to the Trust as required by federal law. The assignment is therefore

in violation of federal law.

State Courts Must Enforce Federal Law

14. The trial court, as well as all other state courts, must enforce federal

law. The U.S. Supreme Court has recently spoken on this issue. In Mims v.

Arrow Fin. Servs., LLC, 132 S. Ct. 740, 748; 181 L. Ed. 2d 881, 2012 U.S.

LEXIS 906 (2012), the Supreme Court held:

In cases “arising under” federal law, we note, there is a “deeply
rooted presumption in favor of concurrent state court
jurisdiction,” rebuttable if “Congress affirmatively ousts the state
courts of jurisdiction over a particular federal claim.” Tafflin v.
Levitt, 493 U.S. 455, 458-459, 110 S. Ct. 792, 107 L. Ed. 2d 887
(1990).

15. State courts are consistent with the federal courts’ interpretation of

state courts’ duty to enforce federal law. In First Nat'l Collection Bureau,

Inc. v. Walker, 348 S.W.3d 329, 336 (Tex.App. – Dallas 2011), the court

held:

According to the Supremacy Clause of the United States
Constitution, "[t]his Constitution, and the Laws of the United
States . . . shall be the supreme Law of the Land . . . any Thing
in the Constitution or Laws of any state to the Contrary
notwithstanding." U.S. Const. art. VI, cl.2. The United States

p. 7
 Supreme Court has stated [T]he Constitution and laws passed
pursuant to it are as much laws in the State as laws passed
by the state legislature. The Supremacy Clause makes those
laws "the supreme Law of the Land," and charges state
courts with a coordinate responsibility to enforce that law
according to their regular modes of procedure. Howlett v.
Rose, 496 U.S. 356, 367, 110 S. Ct. 2430, 110 L. Ed. 2d 332
(1990). Thus, it is generally true that states may not decline
to recognize or enforce federal law. Id. at 371; see The Chair
King, Inc. v. GTE Mobilnet of Houston, Inc., 184 S.W.3d 707,
712 (Tex. 2006). Further, "the federal law that states are
required to enforce must be applied according to its terms."
Chair King, 184 S.W.3d at 712. State laws that conflict with
federal law are generally without effect. Maryland v. Louisiana,
451 U.S. 725, 746, 101 S. Ct. 2114, 68 L. Ed. 2d 576 (1981).
(Emphasis added)

16. In this case, Appellees CARRINGTON MORTGAGE LOAN

TRUST, SERIES 2005-NC3 claim ownership to Appellants’ property and a

right to foreclose. As a REMIC trust, ownership interests are circumscribed

by federal law. Only “qualified mortgages” can be assets of the Appellees, a

REMIC trust. According to Appellants’ Exhibit 1 (RR-Vol003, p. 10)4, the

closing date of the trust is listed as June 7, 2005. The trial court

acknowledged the fact that the assignment to Appellees was executed in

4
The trial court erred in failing to take judicial notice of Appellees’ U.S. Securities
and Exchange Commission filing of its prospectus available from the internet. See
http://www.secinfo.com/dr66r.z11c.f.htm?Show=All#TOT Pursuant to Texas
Rule of Evidence 201(d) “a court shall take judicial notice if requested by a party
and supplied with the necessary information”, Appellants request this honorable
Court take judicial notice of the SEC report presented to the trial court.

p. 8
2010, five years after the closing date of the Trust.5 As a matter of federal

law, the assignment violates 26 U.S.C. 860G.

Statute Vitiates Assignment to Trust as an Illegal Contract

17. To the extent that the alleged assignment affects title to the property,

the undisputed fact is that the transaction is illegal as a matter of law and

public policy. Public policy vitiates illegal contracts regardless of whether

the parties agree to it. Courts cannot enforce contract terms which violate

federal law. The U.S. Supreme Court, in Hurd v. Hodge, 334 U.S. 24; 68 S.

Ct. 847; 92 L. Ed. 1187; 1948 U.S. LEXIS 2765, held:

The power of the federal courts to enforce the terms of private
agreements is at all times exercised subject to the restrictions and
limitations of the public policy of the United States as manifested
in the Constitution, treaties, federal statutes, and applicable legal
precedents. Where the enforcement of private agreements would
be violative of that policy, it is the obligation of courts to refrain
from such exertions of judicial power.

(Emphasis added)

18. The U.S. Supreme Court again in W.R. Grace & Co. v. Local Union

759, Int'l Union of United Rubber, 461 U.S. 757; 103 S. Ct. 2177; 76 L. Ed. 2d

298; 1983 U.S. LEXIS 42, the court, citing Hurd, held:

5
The assignment indicated that the transfer was effective on the date of the
Assignment. Travis County Public Records # 2010177942. The Court is
hereby requested to take judicial notice of this record in the Travis County
Property Records, attached Appendix B.

p. 9
 As with any contract, however, a court may not enforce a
collective-bargaining agreement that is contrary to public policy.
If the contract as interpreted by Barrett violates some explicit
public policy, we are obliged to refrain from enforcing it. Such a
public policy, however, must be well defined and dominant, and is
to be ascertained "by reference to the laws and legal precedents
and not from general considerations of supposed public interests."
(Emphasis added)(Citing Hurd; also citing Muschany v. United
States, 324 U.S. 49, 66 (1945)).

19. The 5th Circuit has followed the U.S. Supreme Court in weighing the

right to contract with the supremacy of public policy and statutory

enforcement. In First Nat'l Bank v. Comptroller of Currency, 697 F.2d 674;

1983 U.S. App. LEXIS 30720, it held:

The purpose of 12 U.S.C. § 29 is "to keep the capital of
the banks flowing in the daily channels of commerce; to
deter them [banks] from embarking in hazardous real-
estate speculations; . . . The statute sets forth the four
exclusive categories of real property a bank can purchase,
hold or convey. . . If the five-year limitation is applied to
property outside the four permissible categories (to property
[which the bank is not authorized to hold) the effect would
be to allow the bank to hold unauthorized property, which is
held under mortgage or was purchased to secure debts due
the bank, for five years. Such a construction would clearly
be contrary to the intent of Congress. The five-year category
was meant to limit the four permissible categories and not to
expand them.

See also Fidelity & Deposit Co. v. Conner, 973 F.2d 1236, 1241-42 (5th Cir.

1992)(“Public policy is to be ascertained by reference to the laws and legal

precedents . . .”; citing Muschany).

p. 10
20. In the case at bar, Appellants’ evidence proffered to the trial court

established that the assignment Appellees rely on violates 26 USC

860G(a)(3)(ii). Defendants do not dispute the fact that the assignment of

Plaintiffs’ mortgage to the Trust was untimely nor that it violates 26 USC

860G(a)(3)(ii).

21. Texas courts hold the same position: an illegal transaction is void as a

matter of law. Zachry Constr. Corp. v. Port of Houston Auth., 2014 Tex.

LEXIS 768 (Tex. 2014)(“As a rule, parties have the right to contract as they

see fit as long as their agreement does not violate the law or public policy."

Enforcing such a provision to allow one party to intentionally injure another

with impunity violates the law) (citing In re Prudential Ins. Co. of Am., 148

S.W.3d 124, 129 (Tex. 2004); Sonny Arnold, Inc. v. Sentry Sav. Ass'n, 633

S.W.2d 811, 815 (Tex.1982) (recognizing "the parties' right to contract with

regard to their property as they see fit, so long as the contract does not

offend public policy and is not illegal"); Curlee v. Walker, 112 Tex. 40, 244

S.W. 497, 498 (Tex. 1922) ("The law recognizes the right of parties to

contract with relation to property as they see fit, provided they do not

contravene public policy and their contracts are not otherwise illegal.");

James v. Fulkrod, 5 Tex. 512, 520 (1851) ("That contracts against public

policy are void and will not be carried into effect by courts of justice are

p. 11
principles of law too well established to require the support of

authorities.") (Emphasis added).

22. Under Texas law, a contract is illegal, and thus void, if the contract

obligates the parties to perform an action that is forbidden by the law of the

place where the action is to occur. Miller v. Long-Bell Lumber Co., 148 Tex.

160, 222 S.W.2d 244, 246 (Tex. 1949). Contracts are presumptively legal, so

the party challenging the contract carries the burden of proving illegality.

Franklin v. Jackson, 847 S.W.2d 306, 310 (Tex. App.--El Paso 1992, writ

denied).

23. Because the assignment violates federal law, it is illegal. In TCA

Bldg. Co. v. Northwestern Resources Co., 922 S.W.2d 629, 636 (Tex.App. –

Waco 1996), the court held:

Illegal contracts, however, are void. Paragon Oil Syndicate v.
Rhoades Drilling Co., 115 Tex. 149, 277 S.W. 1036, 1037
(1925); Texas Life, Accident, Health and Hosp. Serv. Ins.
Guar. Ass'n v. Lorena State Bank, 911 S.W.2d 842, 844 (Tex.
App.--Austin 1995, n.w.h.); Rogers v. Wolfson, 763 S.W.2d
922, 924 (Tex. App.--Dallas 1989, writ denied); Ben E. Keith
Co. v. Lisle Todd Leasing, Inc., 734 S.W.2d 725, 727 (Tex.
App.--Dallas 1987, writ ref'd n.r.e.); Jack, 694 S.W.2d at 397;
Peniche, 580 S.W.2d at 157.

24. Appellants are not, nor do they claim, to be parties to the PSA.

Whether or not Appellants are a party to the PSA is irrelevant: the

p. 12
assignment in violation of statute is void on public policy grounds expressed

by Congress. This Court is therefore obligated to deny effect to such an

illegal and void assignment.

Assignment is Void and Not Voidable

25. Further, because the window for addition of mortgage assets to

Appellees closed three months after it was established, the assignment is not

voidable but void. The Texas Supreme court explained the distinction:

It is true that a distinction is made between the act of a
corporation which is merely without authority and one which
is illegal. In the one case, it is a question of authority; in the
other, of legality. A corporate act becomes illegal when
committed in violation of an express statute on a specific
subject, or when it is malum in se or malum prohibitum, or
when it is against public policy. Bond v. Terrell Cotton &
Woolen Mfg. Co., 82 Tex. 309, 313 (Tex. 1891)

Void Contracts Cannot Be Ratified

26. Defendants cannot ratify the assignment to comport with federal law

after the fact. See Plaza Nat. Bank v. Monfrey, 706 S.W.2d 714, 717 (Tex.

App.—San Antonio 1986, writ rf’d n.r.e.); Jack v. State, 694 S.W.2d 391,

397 (Tex. App.—San Antonio 1985, writ ref’d n.r.e.). In Monfrey, the court

held:

A demand connected with an illegal act cannot be
enforced if plaintiff requires any aid from the illegal

p. 13
 transaction to establish his cause of action. International
Aircraft Sales, Inc. v. Betancourt, 582 S.W.2d 632, 635 (Tex.
Civ. App. -- Corpus Christi 1979, writ ref'd n.r.e.). In this case,
the consideration for the notes executed by defendants was the
unlawful loan by Bank. It was the illegal loan, and not the
giving of the promissory notes, which violated the statute.
With respect to the conduct prohibited by the statute, the date
of the promissory notes upon which Bank bases its claim is
irrelevant. Since the loan of money was unlawful, it cannot
furnish legal consideration and is insufficient to support the
promise of defendants to pay. Where a prior note is based on
an illegal consideration, a note given in renewal of such note
cannot be enforced. Park v. Coulson, 139 S.W.2d 667, 668
(Tex. Civ. App. -- Amarillo 1940, no writ). Defendants did not
waive the defense of illegality by executing the renewal notes.
A contract that is made in violation of a statute cannot be
ratified by subsequent conduct of the obligor. Mayfield v.
Troutman, 613 S.W.2d 339, 344 (Tex. Civ. App. -- Tyler 1981,
writ ref'd n.r.e.). (Emphasis added)

27. In Mayfield, the court held (emphasis added):

If, upon remand, it is found that appellees were guilty of fraud
under § 29C of the Securities Act, ratification may not be
raised to justify the making of an illegal contract. A contract
which is made in violation of a statute is illegal and void and
therefore not subject to ratification. Peniche v. AeroMexico,
580 S.W.2d 152, 157 (Tex. Civ. App. -Houston [1st Dist.]
1979, no writ); Continental Fire & Casualty Ins. Corp. v.
American Mfg. Co., 221 S.W.2d 1006, 1009 (Tex. Civ. App. -
Fort Worth 1949, writ ref'd); Roberts v. San Jacinto
Shipbuilders, Inc., 198 S.W.2d 488, 492 (Tex. Civ. App. -
Galveston 1946, writ ref'd n.r.e.); see 13 TEX. JUR.2D
CONTRACTS, § 220. (Emphasis added)

28. The assignment to the Trust in this case is void and therefore

unenforceable. See Hurd (“Where the enforcement of private

agreements would be violative of that policy, it is the obligation of courts

p. 14
to refrain from such exertions of judicial power.”)

29. Since the issue of title is completely intertwined, the trial court lacked

jurisdiction. By statute, justice courts do not have jurisdiction over title

disputes, and by rule, a justice court may not adjudicate the question of title

in a forcible detainer action. Tex. Gov't Code Ann. § 27.031(a)(2) (West

Supp. 2013); Tex. Prop. Code Ann. § 24.004 (West Supp. 2013).

Accordingly, a justice court has no jurisdiction over a forcible detainer

action if the adjudication of the action requires resolution of a title dispute.

Tex. Gov't Code Ann. § 27.031(b); Rice, 51 S.W.3d at 708.

30. Because a county court conducting a trial de novo in an appeal from a

justice court is limited to the jurisdiction of the justice court, a county court

hearing an appeal in a forcible detainer action also has no jurisdiction over

the action if it requires resolution of a title dispute. Tex. R. Civ. P. 749

(West 2013, repealed 2013) (stating that an appeal in a forcible detainer

action is to the county court); Tex. R. Civ. P. 751 (West 2013, repealed

2013) (providing that the appeal must be tried de novo); Rice, 51 S.W.3d at

708-09 (stating that a county court hearing an appeal in a forcible detainer

action has no jurisdiction if the justice court had no jurisdiction).

31. But the mere existence of a title dispute does not deprive the court of

p. 15
jurisdiction. It is only when the right to immediate possession necessarily

requires resolution of the title dispute, that is, when the court's decision of

which party has a superior right of possession must rest on a determination

of title, that the justice court may not adjudicate the forcible detainer action.

Rice, 51 S.W.3d at 709; see, e.g., Mortgage Elec. Registration Sys. v. Young,

No. 02-08-00088-CV, 2009 Tex. App. LEXIS 3937, 2009 WL 1564994, at

*5 (Tex. App.—Fort Worth June 4, 2009, no pet.) (mem. op.) (finding a title

dispute when the evidence showed that the plaintiff in the forcible detainer

action had purchased the property but then conveyed it to another party).

CONCLUSION

The first duty of any court is to determine whether it has jurisdiction.

The trial court, due to the disputed title in this case, did not. Appellees were

not and are not owners of Appellants property as a matter of federal law,

which the trial court, as well as this Court, must enforce. As a result, the

assignment was void. To the extent that Appellees’ title is in dispute, the

trial court lacked jurisdiction to grant possession.

PRAYER

Appellant Korompay respectfully request that the Court reverse the
judgment of the County Court in all things and remand for further action
consistent with its opinion.

p. 16
RESPECTFULLY SUBMITTED,

__/s/ Matthew Wilson_________
Matthew L. Wilson
Texas Bar No. 24079588
1201 Spyglass Drive, Suite 100
Austin, TX 78746
mwilson@matthewwilsonlaw.com
(512) 923-1836 [Phone]
(512) 201-4082 [Fax]

__/s/ David Rogers_____________
DAVID ROGERS
Law Office of David Rogers
State Bar No. 24014089
1201 Spyglass Drive, Suite 100
Austin, TX 78746
(512) 923-1836
(512) 201-4082 (fax)
DARogers@aol.com

p. 17
 CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing Appellant’s
Brief was served upon counsel of record for Appellees on this 12th day of
January, 2015 via this Court’s online filing system.

Travis H. Gray
SBN 24044965
Jack O’Boyle & Associates
P.O. Box 815369
Dallas, TX 75381
(972) 247-0653
(972) 247-0642 [Facsimile]

__/s/ Matthew Wilson_________
Matthew L. Wilson
Texas Bar No. 24079588
1201 Spyglass Drive, Suite 100
Austin, TX 78746
mwilson@matthewwilsonlaw.com
(512) 923-1836 [Phone]
(512) 201-4082 [Fax]

__/s/__David Rogers___________
David Rogers
SBN 24014089
Law Office of David Rogers
1201 Spyglass Suite 100
Austin, TX 78746
(512) 923-1836
(512) 201-4082 [Facsimile]

p. 18
 CERTIFICATE OF COMPLIANCE

Pursuant to Texas Rule of Appellate Procedure 9.4(i), I hereby certify that
this document contains 3,296 words.

__/s/ Matthew Wilson_________
Matthew L. Wilson
Texas Bar No. 24079588
1201 Spyglass Drive, Suite 100
Austin, TX 78746
mwilson@matthewwilsonlaw.com
(512) 923-1836 [Phone]
(512) 201-4082 [Fax]

__/s/__David Rogers___________
David Rogers
SBN 24014089
Law Office of David Rogers
1201 Spyglass Suite 100
Austin, TX 78746
(512) 923-1836
(512) 201-4082 [Facsimile]

p. 19
 No. 03-14-00523-CV

IN THE THIRD COURT OF APPEALS OF TEXAS

GEORGEINE MIKE KOROMPAY
Appellant

DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE
FOR CARRINGTON MORTGAGE LOAN TRUST, SERIES 2005-
NC3 ASSET BACKED PASS THROUGH CERTIFICATES
Appellees

Appeal from the County Court at Law 1 Travis County, Texas
Trial Court No. C-1-CV-14-003847

APPELLANT’S APPENDIX B

ITEM 1 Instrument No. 2010177942 Travis County Public Records

p. 20
 No. 03-14-00523-CV

IN THE THIRD COURT OF APPEALS OF TEXAS

GEORGEINE MIKE KOROMPAY
Appellant

DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE
FOR CARRINGTON MORTGAGE LOAN TRUST, SERIES 2005-
NC3 ASSET BACKED PASS THROUGH CERTIFICATES
Appellees

Appeal from the County Court at Law 1 Travis County, Texas
Trial Court No. C-1-CV-14-003847

ITEM 1

Travis County Public Records

Instrument No. 2010177942

Assignment of Lien

p. 21