ACCEPTED
03-14-00029-CV
6244541
THIRD COURT OF APPEALS
AUSTIN, TEXAS
7/27/2015 10:49:19 PM
JEFFREY D. KYLE
CLERK
No. 03-14-00029-CV
In the Court of Appeals July 28, 2015
for the
Third Court of Appeals District of Texas
Sitting at Austin, Texas
________________________________________________________________________
Oscar Melendez and Connie Melendez, Appellants
vs.
Citimortgage, Inc., Ernestine Williams and Wendy Alexander, Appellees
________________________________________________________________________
Appealed from the 261st District Court
of Travis County, Texas
The Honorable Lora Livingston, Presiding
________________________________________________________________________
MOTION FOR REHEARING
________________________________________________________________________
Michael Brinkley
State Bar No. 03004300
BRINKLEY LAW PLLC
P. O. Box 820711
Fort Worth, TX 76182-0711
(817) 284-3535; metro (817) 589-7111
(888) 511-0946
Attorney for Appellant, Oscar Melendez
MOTION FOR REHEARING
No. 03-14-00029-CV
In the Court of Appeals
for the
Third Court of Appeals District of Texas
Sitting at Austin, Texas
________________________________________________________________________
Oscar Melendez and Connie Melendez, Appellants
vs.
Citimortgage, Inc., Ernestine Williams and Wendy Alexander, Appellees
___________________________________________________________________
Appealed from the 261st District Court
of Travis County, Texas
The Honorable Lora Livingston, Presiding
________________________________________________________________________
MOTION FOR REHEARING
_______________________________________________________________________
TO THE HONORABLE COURT OF APPEALS:
Appellant, Oscar Melendez, respectfully submits this Motion for Rehearing under
Texas Rule of Appellate Procedure 49.1 and any other applicable law. Mr. Melendez
acts solely herein, as his wife, Connie Melendez, died after the case was submitted.
I.
On the 25th day of June, 2015, this Court’s panel upheld the judgment of the trial
court in a memorandum opinion signed on behalf of the Court by Justice Bourland (the
“Opinion”).
MOTION FOR REHEARING 2
II.
This Court erred in overruling Appellant’s Points of Error, because the trial court
should have denied summary judgment first, as a matter of fundamental law, and
additionally due to fact questions raised by Appellee’s own summary judgment
evidence–as already explained at length in the Appellants’ response to the motion for
summary judgment, in their motion for new trial, and in briefing to this Court.
III.
The Opinion makes an assumption at several points of something not proven
by the summary judgment evidence: that Amtrust made Citimortgage, Inc. the mortgage
servicer because Amtrust was the mortgagee at the time of such designation of
Citimortgage’s status. However, the Note, even as offered by Citimortgage (page 62
of the Clerk’s Record) does not indicate any date of indorsement, nor is there any other
indication of when Amtrust’s interest might have terminated. Thus, there was not sufficient
proof before the trial court to determine whether or not Citimortgage was properly deemed
the “mortgage servicer” at the times of taking actions preliminary to foreclosure. It is
not enough to rely on a presumptive appointment of Citimortgage as servicer by Amtrust,
because at the time of the giving of all predicate notices to the foreclosure, Citimortgage
was claiming in those notices that Amtrust then held no interest, hence the status of
Citimortgage in relation to the Note and Deed of Trust had to be determined at those
MOTION FOR REHEARING 3
times by means other than a questionably timed appointment as servicer in 2006.
IV.
Melendez clearly can challenge the Assignment to Citimortgage, Inc., and/or
the Appointment of substitute trustees, in the circumstances of (a) a claim involving
the fraudulent nature of all or part of the instrument, or (b) the invalidity of the Assignment
or Appointment due to the lack of capacity of the person executing such instruments,
respectively. A Texas bankruptcy court has noted:
. . . it is axiomatic that an assignee walks in the shoes of the assignor. State
v. Oakley, 181 S.W.3d 855 (Tex. App. -Austin 2005), and other courts in
other jurisdictions have held that when a perfected lien is assigned, no
new lien is created, and therefore, an assignee of a lien which has been
perfected succeeds to the perfected status via the assignment and may assert
the lien. In re Wuerzberger, 284 B.R. 814 (Bankr. W.D. Va. 2002); In
re Field, 263 B.R. 323, 329 (Bankr. D. Idaho 2001).
In Re Kleibrink,346 B.R. 734, 758; 2006 Bankr. LEXIS 1633 *56 (Bankr. N. D. Tex.
2006), affirmed August 28, 2007.
In Green v. JPMorgan Chase Chase Bank, 937 F.Supp.2d 849, 855-856
(N.D.Tex. 2013), a Texas federal district court squarely addressed this issue at length,
and found that debtors such as Melendez can indeed challenge assignments (emphases
supplied):
The Court is aware of no Texas court that has denied standing to
all borrowers to challenge assignments of their mortgages. Rather, as this
Court has previously noted,
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The law is settled that the obligors of a claim may defend
the suit brought thereon on any ground which renders the
assignment void, but may not defend on any ground which
renders the assignment voidable only, because the only interest
or right which an obligor of a claim has in the instrument of
assignment is to insure himself that he will not have to pay
the same claim twice.
Puente v. CitiMortgage, Inc., No. 3:11-CV-2509-N, 2012 WL 4335997,
at *6 (N.D. Tex. Aug. 29, 2012) (quoting Kramer v. Fed. Nat'l Mortg. Ass'n,
No. A-12-CA-276-SS,, 2012 WL 3027990, at *4-5 (W.D. Tex. May 15,
2012)); accord Miller v. Homecomings Fin., LLC, 881 F.Supp.2d 825,
831 (S.D. Tex. 2012) ("Texas has long followed the common law rule
which permits a debtor to assert against an assignee any ground that
renders the assignment [p. 856] void or invalid." ) (citing Tri-Cities
Constr., Inc. v. American Nat'l Ins. Co., 523 S.W.2d 426, 430
(Tex.Civ.App.–Houston [1st Dist.] 1975, no writ); Glass v. Carpenter,
330 S.W.2d 530, 537 (Tex.Civ.App.–San Antonio 1959, writ ref'd n.r.e.)).
As the Glass court observed, "a debtor may, generally, assert against
an assignee all equities or defenses existing against the assignor prior
to notice of the assignment, any matters rendering the assignment
absolutely invalid or ineffective, and the lack of plaintiff's title or right
to sue." 330 S.W.2d at 537 (quoting 6 C.J.S. Assignments § 132 [no ed.
given]) [4] (emphasis added). And, as the Miller court recognized, " Texas
courts routinely allow a homeowner to challenge the chain of assignments
by which a party claims the right to foreclose." 881 F.Supp.2d at 832 (citing
Martin v. New Century Mortg. Co., 377 S.W.3d 79, 2012 WL 2529251
(Tex. App. --Houston [1st Dist.] June 14, 2012, no pet.); Austin v.
Countrywide Homes Loans, 261 S.W.3d 68 (Tex. App.–Houston [1st Dist.]
2008, pet denied); Leavings v. Mills, 175 S.W.3d 301 (Tex. App.–Houston
[1st Dist.] 2004, no pet.); Shepard v. Boone, 99 S.W.3d 263 (Tex. App.–
Eastland 2003, no pet.) ; Priesmeyer v. Pac. Sw. Bank, F.S.B., 917 S.W.2d
937 (Tex. App.–Austin 1996, no writ)).
Some lenders and servicers cite to Reinagel v. Deutsche Bank Nat’l Trust Co.,
735 F.3d 22, 225 and 226 (5th Cir. 2013). But, footnote 8 in the first Reinagel opinion,
MOTION FOR REHEARING 5
at 722 F.3d 700, 705, cited to (emphasis supplied): “Tri-Cities Const., Inc. v. Am. Nat.
Ins. Co., 523 S.W.2d 426, 430 (Tex.Civ.App.1975) (citing Glass v. Carpenter, 330
S.W.2d 530, 537 (Tex.Civ.App.1959)); see also, e.g., 6A C.J.S. ASSIGNMENTS §
132 (2013) ("A debtor may, generally, assert against an assignee ..., any matters rendering
the assignment absolutely invalid ..., such as [] the nonassignability of the right
attempted to be assigned, or a prior revocation of the assignment."); Murphy v.
Aurora Loan Servs., LLC, 699 F.3d 1027, 1033 (8th Cir.2012) (recognizing that mortgagors
can defend against foreclosure by establishing a fatal defect in the purported mortgagee's
chain of title).” In the instant case, there is just such a fatal defect in the chain of title,
where there was the Assignment made without capacity, and all acts from and after
such Assignment are tainted. The Appointment of Substitute Trustees, the notices to
Melendez preceding the foreclosure sale, and the Substitute Trustee’s Deed all relied
on the Assignment for validity, and therefore should be deemed of no effect, and all
acts flowing from and after the Assignment should be held void, the foreclosure acts
disregarded and the substitute trustee’s deed removed from the chain of title to the
Property.
V.
The import of the Hultman deposition transcript offered with the Melendez
response to the Motion for Summary Judgment was that clearly, persons such as the
MOTION FOR REHEARING 6
person executing the Assignment were never actually appointed to their claimed positions
by the board of directors of Mortgage Electronic Registration Systems, Inc. (“MERS”).
Those persons claimed authority to act from certifications issued by Mr. Hultman, but
were never appointed to any MERS office by the MERS board of directors, and hence
lacked authority for instruments such as the Assignment, which was therefore void,
rendering all subsequent actions of Citimortgage with respect to the Melendez Note
and Deed of Trust invalid.
VI.
The Opinion never bridges the gap created by the Assignment being putatively
made by MERS on behalf of a “dead” entity, Amtrust having ceased to exist before
MERS claimed to have acted as its nominee/agent. It is a solidly established principle
that “the law is clear that an agent's authority to bind his principal terminates upon the
principal's death. See Cleveland v. Williams, 29 Tex. 204, 213 (1867); Crawford v. Morris,
228 S.W.2d 364, 366 (Tex. Civ. App.—Eastland 1950, writ ref'd n.r.e.).” Cole v. McWillie,
11-12-00265-CV (Tex.App.–Eastland 2015), p. 9. MERS, by its declared nature and
by the terms of the Deed of Trust, has never been anything but a pure nominee, never
a beneficial interest holder. As such, when Amtrust ceased to exist before the execution
of the Assignment, the ownership of the lien of the Deed of Trust would have had to
have been settled independently of MERS, before MERS could even possibly have
MOTION FOR REHEARING 7
had any interest to convey. There is no evidence of any such disposition.
Conclusion
Rehearing of this case, by the panel or en banc, and vacating of the June 25, 2015
memorandum opinion and judgment, would be consistent with the apparent purpose
of the applicable common law of Texas and the cited statutes and rules. In the interest
of justice in this matter, Appellant asks that the Court grant this motion for rehearing.
Respectfully submitted,
/s/ Michael Brinkley
____________________________________
Michael Brinkley
State Bar No. 03004300
BRINKLEY LAW PLLC
P. O. Box 820711
Fort Worth, Texas 76182-0711
(817) 284-3535
(888) 511-5854; fax (888) 511-0946
michael@brinkleypllc.com
Attorney for Appellant
MOTION FOR REHEARING 8
Certificate of Compliance for T.R.A.P. 9.4(i)(3)
I certify that the word count indicated by my word processing software for the
portions of the Appellant’s Motion for Rehearing covered by Texas Rule of Appellate
Procedure 9.4(i)(1) is 1,489, which, when added to the 2,786 words in Appellant’s brief,
totals 4,275 words.
Dated: July 27, 2015.
/s/ Michael Brinkley
_____________________________________
Michael Brinkley
Certificate of Service
I certify that a true and correct copy of the foregoing has been served on the
following counsel and/or pro se parties of record, by mailing in accordance with Texas
Rule of Appellate Procedure 9.5, on July 27, 2015:
James G. Ruiz
WINSTEAD PC
401 Congress Avenue, Suite 2100
Austin, Texas 78701
fax (512) 370-2850
Attorneys for Appellee.
/s/ Michael Brinkley
_____________________________________
Michael Brinkley
MOTION FOR REHEARING 9