REPLY ARGUMENT

I.                  THE   MECHANICS  OF   THE   FORECLOSURE   PROCESS  ARE IRRELEVANT TO THE APPEAL

Ms. Callan’s appeal is based on Deutsche Bank’s voluntary release of the disputed lien against her homestead on November 20, 2014.

ROA.475-476.

That was eight months after the district court ruled in her favor in the Original Opinion1 on March 27, 2014, and four months before it issued its Amended Opinion2 on March 21, 2015.

The only relevant issue is the district court’s lack of jurisdiction to issue a ruling changing Ms. Callan’s rights after the controversy was ended by the release of the lien.

Deutsche Bank’s Brief is irrelveant where it tries to relitigate the mechanics of the disputed foreclosure process and glosses over the district court’s loss of jurisdiction.

Most telling is that their Brief does not even list Article III of the United States Constitution in its Table of Authorities and does not mention it at all in responding to Ms. Callan’s claims regarding the district court’s loss of jurisdiction.

They have conceded the issue of the district court’s loss of jurisdiction and are needlessly consuming additional judicial resources by rehashing the irrelevant details of the foreclosure process.

1The Opinion and Order [ROA.308-326.] and the Final Judgment [ROA.327.], both dated March 27, 2014. ROA.

2The Opinion and Order [ROA.369-388.] and Amended Final Judgment [ROA.389-390.]

The argument that their voluntary release of the lien “did not render the declaratory judgment claim and attorney’s fees matter moot” 3 makes no sense and ignores indisputable facts.

At the time Deutsche Bank released the lien, the March 27, 2014, Original Opinion had decided both of those issues.

It denied Ms. Callan’s claim for attorney fees and it granted her the declaratory judgment she requested that the lien was void.

She accepted the original ruling and did not challenge the denial of fees because of the differences between the Texas and federal declaratory judgment acts.

Deutsche Bank clearly accepted the validity of the Original Opinion even though its Motion to Alter Judgment [ROA.328-348.] was pending when it released the lien, thereby ratifying the finding in the declaratory judgment in Ms. Callan’s favor that the lien was void.

As soon as the lien was released the controversy was resolved and Ms. Callan and Deutsche were in agreement.

She had clear title to her homestead and they did not have to pay her any damages.

There was no longer a case or controversy left to decide when the Amended Opinion was issued.

Justice Scalia’s well-reasoned analysis of this type of situation in 1998 cites cases going back to 1804 for the proposition that jurisdiction absolutely must be considered before a federal court can proceed in adjudicating a case.

It is still valid.

3Appellee’s Brief at 15.

“This conclusion should come as no surprise, since it is reflected in a long and venerable line of our cases. “Without jurisdiction the court cannot proceed at all in any cause. Jurisdiction is power to declare the law, and when it ceases to exist, the only function remaining to the court is that of announcing the fact and dismissing the cause.”

Ex parte McCardle, 7 Wall. 506, 514 (1869).

“On every writ of error or appeal, the first and fundamental question is that of jurisdiction, first, of this court, and then of the court from which the record comes. This question the court is bound to ask and answer for itself, even when not otherwise suggested, and without respect to the relation of the parties to it.”

Great Southern Fire Proof Hotel Co. v. Jones,4 supra, at 453.

The requirement that jurisdiction be established as a threshold matter “spring[s] from the nature and limits of 95*95 the judicial power of the United States” and is “inflexible and without exception.”

Mansfield, C. & L. M. R. Co. v. Swan, 111 U. S. 379, 382 (1884).

This Court’s insistence that proper jurisdiction appear begins at least as early as 1804, when we set aside a judgment for the defendant at the instance of the losing plaintiff who had himself failed to allege the basis for federal jurisdiction.

Capron v. Van Noorden, 2 Cranch 126 (1804).

Just last Term, we restated this principle in the clearest fashion, unanimously setting aside the Ninth Circuit’s merits decision in a case that had lost the elements of a justiciable controversy:

“`[E]very federal appellate court has a special obligation to `satisfy itself not only of its own jurisdiction, but also that of the lower courts in a cause under review,’ even though the parties are prepared to concede it.

Mitchell v. Maurer, 293 U. S. 237, 244 (1934).

See Juidice v. Vail, 430 U. S. 327, 331-332 (1977)(standing).

`And if the record discloses that the lower court was without jurisdiction this court will notice the defect, although the parties make no contention concerning it. [When the lower federal

4[177 U.S. 449 (1900)].

court] lack[s] jurisdiction, we have jurisdiction on appeal, not of the merits but merely for the purpose of correcting the error of the lower court in entertaining the suit.’

United States v. Corrick, 298 U. S. 435, 440 (1936) (footnotes omitted).’

“Arizonans for Official English v. Arizona, 520 U. S. 43, 73 (1997), quoting Bender v. Williamsport Area School Dist., 475 U. S. 534, 541 (1986) (brackets in original).

Steel Co. v. Citizens For Better Environment, 583 U.S. 83, 94-95 (1998).

Deutsche Bank’s Brief cites no reason why Justice Scalia’s analysis is inapplicable here.

II.    THE TEXAS CONSTITUTION PROHIBITS RETROACTIVE LAWS

Even if the lien had not been released, and there were still a live controversy, and the district court somehow had jurisdiction to issue the Amended Opinion, it could not have based that opinion on the retroactive application of TEX. CIV. PRAC. & REM. CODE §16.038 to support a prior acceleration.

Deutsche Bank’s position is that it rescinded the November 6, 2007, acceleration [ROA.152.] by its letter dated November 3, 2011. ROA.220.

The statute it relies on only became effective on June 17, 2015,5 almost eight years after the actual acceleration.

To be valid a statute has

5 Sec. 16.038. RESCISSION OR WAIVER OF ACCELERATED MATURITY DATE.

(a)    If the maturity date of a series of notes or obligations or a note or obligation payable in installments is accelerated, and the accelerated maturity date is rescinded or waived in accordance with this section before the limitations period expires, the acceleration is deemed rescinded and waived and the note, obligation, or series of notes or obligations shall be governed by Section 16.035 as if no acceleration had occurred.

(b)    Rescission or waiver of acceleration is effective if made by a written notice of a rescission or waiver served as provided in Subsection (c) by the lienholder, the servicer of the debt, or an attorney representing the lienholder on each debtor who, according to the records of the

to be constitutional and it is clear the one Deutsche Bank relies on is unconstitutional on its face, as TEX. CONST. ART. 1, §16 prohibits retroactive laws:

BILLS OF ATTAINDER; EX POST FACTO OR RETROACTIVE  LAWS;  IMPAIRING  OBLIGATION  OF CONTRACTS.

No bill of attainder, ex post facto law, retroactive law, or any law impairing the obligation of contracts, shall be made.

III.           IT IS IMPOSSIBLE FOR ANY FINDINGS IN THE ORIGINAL OPINION TO DAMAGE DEUTSCHE BANK’S REPUTATION

Deutsche Bank’s Original Answer in state court was a general denial.

ROA.33-34.

No counterclaim was filed there or in the district court prior to Deutsche Bank’s filing its Motion For Summary Judgment.

ROA.58-126.

The first mention of any allegedly potential damage to Deutsche Bank’s reputation for what was held in the Original Opinion was not made until the Summary lienholder or the servicer of the debt, is obligated to pay the debt.

(c)    Service of a notice under Subsection (b) must be by first class or certified mail and is complete when the notice is deposited in the United States mail, postage prepaid and addressed to the debtor at the debtor’s last known address. The affidavit of a person knowledgeable of the facts to the effect that service was completed is prima facie evidence of service.

(d)    A notice served under this section does not affect a lienholder’s right to accelerate the maturity date of the debt in the future nor does it waive past defaults.

(e)    This section does not create an exclusive method for waiver and rescission of acceleration or affect the accrual of a cause of action and the running of the related limitations period under Section 16.035(e) on any subsequent maturity date, accelerated or otherwise, of the note or obligation or series of notes or obligations.

Added by Acts 2015, 84th Leg., R.S., Ch. 759 (H.B. 2067), Sec. 1, eff. June 17, 2015.

of the Argument in its Brief here.6

This Court follows the standard that it should “not consider issues raised for the first time on appeal except in extraordinary instances when such consideration is required to avoid a miscarriage of justice, and this is not such a situation.” 7

The issue of damages to Deutsche Bank’s reputation is irrelevant and should not be considered as it presents yet another lack of jurisdiction, this time on the appellate level.

Even if the untimely raised issue could be considered, it is demonstrably impossible for the holding in the Original Opinion relating to Deutsche Banks’s conduct in attempting foreclosure on a single consumer loan to damage its reputation – they have repeatedly ruined it themselves on an international scale and have shown no signs of stopping.

There is no good faith in Deutsche Bank’s claim that it “had an ongoing interest in the litigation and in correcting the Original Opinion and Original Judgment (even after the Release of Lien was recorded) … because it was damaging to Deutsche Bank’s reputation.”8

There was even less good faith contained in the assertion that “It was critical

6 Appellee’s Brief, 12.

7 Bayou Liberty Association, Inc. v. United States Army Corps of Engineers, 217 F.3d 393, 398 (5th Cir. 2000).

8 Appellee’s Brief, 18.

to Deutsche Bank, and to its reputation, to establish that allegations made by Callan against it were without merit, that Deutsche Bank had properly rescinded the acceleration of Callan’s debt, and that the statute of limitations had not passed at the time it was pursuing foreclosure on Callan’s unpaid debt.” 9

The Court can take judicial notice of the myriad law suits, enforcement actions, consent orders, public documents, and financial news stories related to Deutsche Bank’s pattern of improprieties, including its criminal acts.

The April 23, 2015, Press Release from the Department of Justice announced that a Deutsche Bank subsidiary “agreed to plead guilty to wire fraud for its role in manipulating the London Interbank Offered Rate (LIBOR), a leading benchmark interest rate used in financial products and transactions around the world.

In addition, Deutsche Bank entered into a deferred prosecution agreement to resolve wire fraud and antitrust charges in connection with its role in both manipulating U.S. Dollar LIBOR and engaging in a price-fixing conspiracy to rig Yen LIBOR.”10

“Deutsche Bank is the sixth major financial institution that has admitted its misconduct in this wide-ranging criminal investigation, and today’s criminal

9 Appellee’s Brief at 19. Emphasis in the original.

10 https://www.justice.gov/opa/pr/deutsche-banks-london-subsidiary-agrees-plead-guilty-c onnection-long-running-manipulation

resolution represents the largest penalty to date in the LIBOR investigation.” 11

It “was ordered to pay a record $2.5 billion fine and fire seven employees to settle U.S. and U.K. investigations into its role in rigging Libor.” 12

There is no possible logical comparison between the imperceptible impact on its reputation from a finding it tried to foreclose on a single consumer loan after a disputed statute of limitations expired and its pleading guilty to participating in a criminal conspiracy with international repercussions that resulted in its having to pay billions of dollars in fines.

Nothing truthful in a civil judgment can damage a criminal’s reputation.

A search for “Deutsche Bank Consent Order” turns up numerous other instances where Deutsche Bank has had much more serious issues that are “critical” to its reputation than whether or not it properly calculated the time to foreclose on Ms. Callan’s homestead.

The first major blemish that search found was the Consent Order Under New York Banking Law §§ 29 and 44 signed by Deutsche Bank on November 3, 2015

11 Id.

12 http://www.bloomberg.com/news/articles/2015-04-23/deutsche-bank-to-pay-record-2-5-billion-to-resolve-libor-probes

(“Consent Order”).13

In it Deutsche admitted that “from at least 1999 though 2006, Deutsche Bank used non-transparent methods and practices to conduct more than 27,200 U.S. dollar clearing transactions valued at over $10.86 billion on behalf of Iranian, Libyan, Syrian, Burmese, and Sudanese financial institutions and other entities subject to U.S. economic sanctions…”14

It further agreed that

“Deutsche Bank’s conduct ran counter to U.S. foreign policy and national security interests, constituted violations of New York and federal laws and regulations…”15

Included in the settlement was a provision that

“Deutsche Bank shall pay a civil monetary penalty pursuant to Banking Law §44 to the Department in the amount of $200,000,000. The Bank shall pay the entire amount within ten days of executing this Consent Order.” 16

The November 4, 2015, Press Release from the Board of Governors of the Federal Reserve System shows Deutsche Bank also required to pay an additional $58 million penalty as part of the settlement.17

Additionally it had to submit to a

13 http://www.dfs.ny.gov/about/ea/ea151103.pdf

14 Id., 2.

15 Id., 3.

16 Id., ¶29.

17 http://www.federalreserve.gov/newsevents/press/enforcement/20151104a.htm

monitoring period and fire several employees.18

Deutsche Bank’s admission to conducting business in a way that was counter to the national security of the United States, and being required to pay $258 million in fines for those actions, is infinitely more damaging to its reputation than anything alleged by Ms. Callan and included in the Original Opinion.

On September 30, 2015, Deutsche Bank agreed to the “Order Instituting Proceedings Pursuant To Sections 6(c) and 6(d) of the Commodity Exchange Act, Making Findings and Imposing Remedial Sanctions.” 19

There they agreed to “cease and desist from violating” various regulations and to “pay a civil monetary penalty in the amount of two million and five-hundred thousand dollars ($2,500,000), within ten (10) days of the date of entry of this Order (the “CMP Obligation”).20

In the March 31, 2013, Consent Order with the Commonwealth of Massachusetts Office of The Secretary of the Commonwealth Securities Division21  Deutsche Bank agreed to “pay a civil administrative penalty in the amount of

18 Consent Order ¶¶ 30-44.

19 http://www.cftc.gov/idc/groups/public/@lrenforcementactions/documents/legalpleading/enfdeutscheorder093015.pdf

20 Id. at 8.

21 https://www.propublica.org/documents/item/618184-deutsche-bank-consent-order.html

$17,500,000.00.”22

When it was sued by the Federal Housing Administration23 Deutsche Bank “agreed to pay $202.3 million to settle one of the biggest U.S. government civil fraud lawsuits over reckless mortage lending practices.”24

Deutsche Bank’s well-documented behavior has made it abundantly clear that it is impossible for anything in the Original Opinion to damage its reputation. Its assertion otherwise should be disregarded as a misrepresentation to the Court and given no weight.

IV.            THIS COURT HAS THE ABILITY TO RECALL THE MANDATE IN LEONARD v. OCWEN LOAN SERVICING, LLC

Deutsche Bank does not disagree that Leonard v. Ocwen Loan Servicing, LLC, No. 14-20611 (5th Cir. – June 9, 2015) relied on the Amended Opinion.

It only claims that Ms. Callan cannot appeal in the cases that relied on it.

It is correct in that Ms. Callan is not a party in those cases.

However, nothing in Deutsche Bank’s Brief addresses or negates this Court’s inherent power, now codified by rule, to modify a recent mandate where justice

22 Id. at 34.

23 United States v. Deutsche Bank AG and MortgageIT, Inc., No. 1:11-cv-02976-LAK (SDNY 2011).

24 http://www.reuters.com/article/us-deutschebank-mortgageit-idUSBRE84917T20120510

requires –

“Recall of Mandate. Once issued a mandate will not be recalled except to prevent injustice.”

5th Cir. R. 41.2.

The Leonard opinion relies on the Amended Opinion.

Leonard is also as an unpublished case that is being repeatedly cited as precedent in contravention of 5th Cir. R. 47.5.4.

When Ms. Callan’s Brief was filed there were two more cases from this Court that had cited Leonard.

A third has since been added.

Martin v. Federal National Mortgage Association, No. 15-41104 (5th Cir. February 22, 2016).

The several cases that are cited in Ms. Callan’s Brief show that Leonard has in turn been relied on by district courts, and there is no sign that will stop.

This Court has the ability, if not the duty, to address the existing reliance on the flawed Amended Opinion in Leonard and its progeny and keep it from being the foundation for future cases.

CONCLUSION

Deutsche Bank’s voluntary action in releasing the lien against Ms. Callan’s homestead in November 2014, while its Motion To Alter was pending, resolved the controversy between the parties.

That action divested the district court of jurisdiction four months before the Amended Opinion was entered in March 2015, at a time when it no longer had jurisdiction.

The Amended Opinion should be stricken as constitutionally void, and any opinions in other cases that relied on it should be revised accordingly.

Respectfully submitted,

/s/         Ira D. Joffe