ACCEPTED
03-15-00382-CV
7816336
THIRD COURT OF APPEALS
AUSTIN, TEXAS
11/13/2015 10:54:10 AM
JEFFREY D. KYLE
CLERK
NO. 03-15-00382-CV
______________________________________________FILED IN
3rd COURT OF APPEALS
IN THE THIRD COURT OF APPEALS OF TEXAS AUSTIN, TEXAS
11/13/2015 10:54:10 AM
JEFFREY D. KYLE
______________________________________________ Clerk
STEVEN B. ARMBRUSTER,
Appellant
V.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Appellee
______________________________________________
Appeal from the 277th District Court
Williamson County, Texas
______________________________________________
APPELLEES' BRIEF
______________________________________________
Peter C. Smart
Texas Bar No. 00784989
CRAIN, CATON & JAMES, P.C.
1401 McKinney St., Suite 1700
Houston, Texas 77010
(713) 658-2323 (Telephone)
(713) 658-1921 (Facsimile)
psmart@craincaton.com
Attorneys for Appellees, Deutsche Bank National Trust
Company as Indenture Trustee for New Century Home
Equity Loan Trust 2004-2 and Juanita Strickland
ORAL ARGUMENT REQUESTED
TABLE OF CONTENTS
TABLE OF CONTENTS ............................................................................................i
TABLE OF AUTHORITIES ................................................................................... iii
STATEMENT OF THE CASE .................................................................................iv
REQUEST FOR ORAL ARGUMENT ....................................................................iv
STATEMENT REGARDING RECORD REFERENCES.......................................iv
ISSUES PRESENTED............................................................................................... v
Issue 1
Appellant contends that the summary judgment evidence does not
demonstrate that Carrington Mortgage Services, LLC (a non-party)
was the mortgage servicer for the subject loan. Appellant did not
raise that issue in the trial court, either in his response to the motion
for summary judgment or at the hearing. Can Appellant raise an issue
on appeal seeking to reverse a summary judgment when he did not
raise the issue in the trial court?
Issue 2
The summary judgment evidence demonstrates that Carrington
Mortgage Services, LLC was the mortgage servicer for the subject
loan. There is no summary judgment evidence to the contrary. Can
the summary judgment be reversed when the evidence conclusively
demonstrates that Carrington Mortgage Services, LLC was the
mortgage servicer for the subject loan?
STATEMENT OF FACTS ........................................................................................ 1
SUMMARY OF ARGUMENT ................................................................................. 5
i
ARGUMENT ............................................................................................................. 7
1. Standard for Affirming Summary Judgment......................................... 7
2. Armbruster Waived Any Contention that Carrington Is Not the
Mortgage Servicer for the Note and Deed of Trust. ............................. 7
3. The summary judgment evidence demonstrates that Carrington
was the Mortgage Servicer for the Note and Deed of Trust. ................ 8
4. The summary judgment evidence demonstrates that Carrington
Was Entitled to Summary Judgment. .................................................. 10
PRAYER .................................................................................................................. 10
CERTIFICATE OF COMPLIANCE ....................................................................... 11
CERTIFICATE OF SERVICE ................................................................................ 12
ii
TABLE OF AUTHORITIES
Cases
Bradley v. State ex rel. White, 990 S.W. 2d 245 (Tex. 1999)....................................7
City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671 (Tex. 1979) .......8
McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337 (Tex. 1993)..................7
Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546 (Tex. 1985) ...................................7
Travis v. City of Mesquite, 830 S.W.2d 94 (Tex. 1992) ............................................8
Statutes
Texas Business & Commerce Code, Section 3.205 ..................................................2
Rules
Tex. R. Civ. P., Rule 166a(c) .....................................................................................7
iii
STATEMENT OF THE CASE
Appellant filed suit contending that the foreclosure of his residence is void
(CR pages 7 - 17). Appellees each filed an answer denying Appellant’s
contentions (CR pages 104 – 109 & 110 - 119).
Appellees filed a motion for summary judgment (CR pages 125 - 240). The
trial court granted the motion and entered judgment in favor of Appellees (CR
pages 367 - 369). Appellant appeals the summary judgment.
REQUEST FOR ORAL ARGUMENT
Appellees believe this case can be decided without the benefit of oral
argument, but would welcome the opportunity.
STATEMENT REGARDING RECORD REFERENCES
The Clerk’s Record has one volume. References to the Clerk’s Record will
be shown by “CR page number.” The Reporter’s Record has 1 volume.
References to the Reporter’s Record will be shown by “RR page number.”
iv
ISSUES PRESENTED
Issue 1
Appellant contends that the summary judgment evidence does not
demonstrate that Carrington Mortgage Services, LLC (a non-party) was the
mortgage servicer for the subject loan. Appellant did not raise that issue in the trial
court, either in his response to the motion for summary judgment or at the hearing.
Can Appellant raise an issue on appeal seeking to reverse a summary judgment
when he did not raise the issue in the trial court?
Issue 2
The summary judgment evidence demonstrates that Carrington Mortgage
Services, LLC was the mortgage servicer for the subject loan. There is no
summary judgment evidence to the contrary. Can the summary judgment be
reversed when the evidence conclusively demonstrates that Carrington Mortgage
Services, LLC was the mortgage servicer for the subject loan?
v
NO. 03-15-00382-CV
______________________________________________
IN THE THIRD COURT OF APPEALS OF TEXAS
______________________________________________
STEVEN B. ARMBRUSTER,
Appellant
V.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Appellee
______________________________________________
APPELLEES' BRIEF
______________________________________________
STATEMENT OF FACTS
Appellant Steven Armbruster (“Armbruster”) borrowed $151,000 from New
Century Mortgage Corporation (“New Century”) on May 7, 2004 in order to
purchase residential real estate located at 621/623 Greenlawn Boulevard, Round
Rock, Texas 78664 (the “Property”) (CR page 157). The loan is memorialized via
a promissory note (the “Note”) executed by Armbruster and issued to New Century
(CR pages 141 - 143).
Armbruster also executed a Deed of Trust (the “Deed of Trust”) that was
issued to New Century (CR pages 144 - 159). The Deed of Trust, which provides
1
a lien on the Property to secure Armbruster’s obligations under the Note and Deed
of Trust, provides, among other things, that:
Sec. 20. Sale of Note; … The Note … (together with this Security
Instrument) can be sold one or more times without prior notice to
Borrower (CR page 154)
New Century indorsed and assigned the Note to Appellee Deutsche Bank
National Trust Company as Indenture Trustee for New Century Home Equity Loan
Trust 2004-2 (“Deutsche Bank, as Trustee of the Mortgage Trust”) pursuant to
Section 3.205 of the Texas Business & Commerce Code shortly after the loan was
made (CR pages 143, 236 – 238 & 239 - 240). Deutsche Bank, as Trustee of the
Mortgage Trust, has possession of the original Note, as indorsed (CR pages 236 –
238 & 239 - 240).
New Century, which retained servicing rights to the Note after it was
assigned, filed for bankruptcy in the United States Bankruptcy Court for the
District of Delaware in April 2007. In May 2007, the bankruptcy court approved
the sale of New Century’s servicing business to Carrington Mortgage Services,
LLC (“Carrington”) and authorized New Century to execute all documents,
instruments and papers necessary to effectuate the sale of its servicing business to
Carrington (CR page 172).
New Century and the liquidating trustee in New Century’s bankruptcy case
each executed separate limited powers of attorney appointing Carrington as
2
attorney in fact and authorizing Carrington to execute deeds of trust/mortgage note
endorsements, assignments of deed of trust/mortgage, assign mortgages and do any
other act and complete any other document required in the normal course of
servicing (CR pages 190 & 191). Deutsche Bank, as Trustee of the Mortgage
Trust, also executed a limited power of attorney appointing and authorizing
Carrington to be the mortgage servicer and its attorney-in-fact as to the Note and
Deed of Trust (CR pages 192 - 196). Carrington services, and at all pertinent times
hereto has serviced, the Note and Deed of Trust on behalf of Deutsche Bank, as
Trustee of the Mortgage Trust (CR pages 236 - 238).
The assignment of the Note and Deed of Trust to Deutsche Bank, as Trustee
of the Mortgage Trust, is memorialized via an instrument entitled Assignment of
Note and Deed of Trust, which is on file in the Williamson County real property
records (CR page 197).
Armbruster defaulted several times (CR pages 198 – 203, 207, 208 – 212 &
236 - 238). Armbruster has not made a payment on the Note since September
2010 (CR pages 207 & 236 - 238).
Carrington provided Plaintiff with notice of default and an opportunity to
cure in February 2011 (CR pages 208 212). In that notice of default letter,
Carrington informed Armbruster that it was servicing the Note and Deed of Trust
3
under a mortgage servicing agreement and pursuant to the Texas Property Code
(CR pages 208 – 209).
Carrington provided Armbruster with notice of acceleration of the Note two
different times (CR pages 215 – 225 & 226 - 231). The foreclosure trustee named
in the Deed of Trust was removed and a substitute trustee appointed in April 2011,
as reflected in a document entitled Removal of Trustee - Appointment of Substitute
Trustee, which is on file in the Williamson County real property records (CR pages
213 - 214).
A foreclosure was posted for October 2011, and Armbruster was provided
notice of the foreclosure sale (CR pages 226 – 231 & 232 - 233). Deutsche Bank,
as Trustee of the Mortgage Trust, purchased the Property at the foreclosure sale
(CR pages 232 - 235).
Armbruster filed this suit contending that the foreclosure sale is void
because (according to Armbruster) the assignment of the Note and Deed of Trust to
Deutsche Bank, as Trustee of the Mortgage Trust, is void and also because
(according to Armbruster) there is no evidence that Carrington was appointed
attorney in fact for New Century (CR page 12). Armbruster did not allege that
Carrington was not the servicer of the Note and Deed of Trust (CR pages 7 – 17).
Appellees filed a motion for summary judgment under both traditional and
no evidence grounds (CR pages 125 – 240). Armbruster filed a response, but did
4
not contend in his response that Carrington was not the mortgage servicer for the
Note and Deed of Trust (CR pages 241 – 366) nor did Armbruster argue at the
summary judgment hearing that Carrington was not the mortgage servicer for the
Note and Deed of Trust (RR pages 1 – 30).
The trial court granted Appellees’ motion for summary judgment, disposing
of all issues in the case (CR 367 – 369).
Armbruster filed this appeal, contending that: (i) the no evidence portion of
the motion for summary judgment was flawed; and (ii) the summary judgment
record does not demonstrate that Carrington was the servicer of the Note and Deed
of Trust, an issue Armbruster did not raise at the trial court level.
SUMMARY OF ARGUMENT
Armbruster asserts, for the first time on appeal, that Carrington was not the
mortgage servicer for the Note and Deed of Trust. That assertion cannot form the
basis for reversal of the trial court’s summary judgment because that contention
was not expressly presented to the trial court in writing in response to the motion
for summary judgment.
Moreover, the summary judgment evidence conclusively demonstrates that
Carrington was the mortgage servicer. The Delaware bankruptcy court approved
the sale of New Century’s servicing business to Carrington in 2007.
5
New Century and the liquidating trustee for New Century’s bankruptcy each
signed limited powers of attorney appointing Carrington as attorney in fact and
authorizing Carrington to take any action as mortgage servicer.
Deutsche Bank, as Trustee of the Mortgage Trust, executed a limited power
of attorney appointing and authorizing Carrington to be the mortgage servicer and
its attorney-in-fact as to the Note and Deed of Trust.
Carrington testified under oath that, at all pertinent times, it has serviced the
Note and Deed of Trust on behalf of Deutsche Bank, as Trustee of the Mortgage
Trust. Carrington provided Plaintiff with a notice of default and an opportunity to
cure letter in February 2011 wherein it informed Armbruster that it was servicing
the Note and Deed of Trust under a mortgage servicing agreement and pursuant to
the Texas Property Code.
Armbruster offered no summary judgment evidence to contradict any of that
evidence.
Armbruster has not raised any other issue on appeal contends that Appellees
were not entitled to judgment on its traditional motion for summary judgment. The
record on appeal conclusively demonstrates that Appellees’ traditional motion for
summary judgment should be affirmed. Therefore, there is no need to address
whether the no evidence portion of the motion should be affirmed.
6
ARGUMENT
1. Standard for Affirming Summary Judgment
A party moving for summary judgment on traditional grounds has the
burden of showing no genuine issue of material fact exists and that it is entitled to
judgment as a matter of law. See Tex. R. Civ. P. 166a(c); Nixon v. Mr. Prop.
Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). If a summary judgment order does
not specify the ground or grounds relied upon for a ruling, the ruling will be upheld
if any of the grounds in the summary judgment motion can be sustained. Bradley
v. State ex rel. White, 990 S.W. 2d 245, 247 (Tex. 1999).
2. Armbruster Waived Any Contention that Carrington Is Not the
Mortgage Servicer for the Note and Deed of Trust.
Armbruster’s contention that Carrington was not the mortgage servicer for
the Note and Deed of Trust was not raised at the trial court level. Therefore,
Armbruster waived that issue as a basis for appeal. The Texas Rule of Civil
Procedure pertaining to a motion for summary judgment specifically provides:
Issues not expressly presented to the trial court by written
motion, answer of other response shall not be considered
on appeal as grounds for reversal. Tex. R. Civ. P.
166a(c).
An issue that a non-movant contends avoid a movant’s entitlement to
summary judgment must be expressly presented by written answer to the motion or
by other written response. See McConnell v. Southside Indep. Sch. Dist., 858
S.W.2d 337, 341 (Tex. 1993). In an appeal from a summary judgment, issues to be
7
reviewed by the appellate court must have been actually presented to and
considered by the trial court. See City of Houston v. Clear Creek Basin Authority,
589 S.W.2d 671, 675-77 (Tex. 1979). Issues not expressly presented to the trial
court by written motion, answer or other response shall not be considered on
appeal as grounds for reversal. See Travis v. City of Mesquite, 830 S.W.2d 94, 99-
100 (Tex. 1992).
Armbruster did not contend in his response to the motion for summary
judgment that Carrington was not the mortgage servicer of the Note and Deed of
Trust (CR pages 241 – 366) nor did Armbruster argue at the summary judgment
hearing that Carrington was not the mortgage servicer of the Note and Deed of
Trust (RR pages 1 – 30). Therefore, Armbruster’s contention that Carrington was
not the mortgage servicer for the Note and Deed of Trust may not be considered as
a basis for appeal of the summary judgment in this case.
3. The summary judgment evidence demonstrates that Carrington
was the Mortgage Servicer for the Note and Deed of Trust.
The summary judgment evidence demonstrates that Carrington Mortgage
Services, LLC was the mortgage servicer for the Note and Deed of Trust.
In May 2007, the Delaware bankruptcy court approved the sale of New
Century’s servicing business to Carrington and authorized New Century to execute
all documents, instruments and papers necessary to effectuate the sale of its
servicing business to Carrington (CR page 172).
8
New Century and the liquidating trustee in New Century’s bankruptcy case
each executed separate limited powers of attorney appointing Carrington as
attorney in fact and authorizing Carrington to execute deeds of trust/mortgage note
endorsements, assignments of deed of trust/mortgage, assign mortgages and do any
other act and complete any other document required in the normal course of
servicing (CR pages 190 & 191).
Deutsche Bank, as Trustee of the Mortgage Trust, executed a limited power
of attorney appointing and authorizing Carrington to be the mortgage servicer and
its attorney-in-fact as to the Note and Deed of Trust (CR pages 192 - 196).
Carrington testified under oath that, at all pertinent times, it has serviced the
Note and Deed of Trust on behalf of Deutsche Bank, as Trustee of the Mortgage
Trust (CR pages 236 - 238).
Carrington provided Plaintiff with a notice of default and an opportunity to
cure letter in February 2011 wherein it informed Armbruster that it was servicing
the Note and Deed of Trust under a mortgage servicing agreement and pursuant to
the Texas Property Code (CR pages 208 – 209).
Armbruster offered no summary judgment evidence to contradict any of that
evidence. Therefore, the summary judgment evidence conclusively demonstrates
that Carrington was the mortgage servicer for the Note and Deed of Trust.
9
4. The summary judgment evidence demonstrates that Carrington
Was Entitled to Summary Judgment.
Armbruster has not raised any other issue on appeal contending Appellees
were not entitled to judgment on its traditional motion for summary judgment. The
record on appeal conclusively demonstrates that Appellees’ traditional motion for
summary judgment should be affirmed. Therefore, there is no need to address
whether the no evidence portion of the motion should be affirmed.
PRAYER
Wherefore, Appellees ask the Court affirm the trial court’s summary
judgment.
Respectfully submitted,
By: /s/ Peter C. Smart
Peter C. Smart
State Bar No. 00784989
Crain, Caton & James, P.C.
1401 McKinney St., Suite 1700
Houston, Texas 77010
(713) 658-2323 (Telephone)
(713) 658-1921 (Facsimile)
psmart@craincaton.com
Attorneys for Appellees, Deutsche Bank
National Trust Company as Indenture
Trustee for New Century Home Equity
Loan Trust 2004-2 and Juanita Strickland
10
CERTIFICATE OF COMPLIANCE
Pursuant to TRAP 9.4(i)(3), the undersigned certifies that this document,
excluding those parts not counted pursuant to TRAP 9.4(i)(1), contains 1,996
words.
/s/ Peter C. Smart
Peter C. Smart
11
CERTIFICATE OF SERVICE
I certify that a true and correct copy of the foregoing has been served on the
following counsel of record through the electronic filing system and via regular
mail this 13th day of November 2015:
David Rogers
Law Offices of David Rogers
1201 Spyglass, Suite 100
Austin, Texas 78746
/s/ Peter C. Smart
Peter C. Smart
12