ANTHONY QUINN WELCH
CONVICTED FELON & FRIEND OF THE COURTS FOR DECADES
PUBLISHED BY LIT: JUL 22, 2024, UPDATED SEP 2, 2024
JUL 22, 2024
By providing twice-convicted tax fraudster, felon Anthony “Tony” Welch continued access to courts, the lawyers on both sides of the table as well as the courts are earning substantial illicit fees, in this case several cases over several years on one property alone.
SEP. 2, 2024
The silent operation to nullify the noise created by LIT’s published revelations by the judiciary and government branches takes effect. Two appeal court opinions dismissing Anthony Welch and co-conspirator Eno Williams claims were issued in Aug. 2024, and Welch’s usually routine application for a state district court TRO would – this time – be denied.
Above is the date LIT Last updated this article.
FIRST CONVICTION RE ANTHONY WELCH TAX RETURN FRAUD (1992)
Thirty-two years ago (32), in April 1992, Welch was indicted on five counts of aiding in the preparation of false tax returns. 26 U.S.C. § 7206(2). Welch pled guilty to all five counts of the indictment.
“The sentencing court in this case found that Welch’s true occupation was not as a sports agent but as an organizer and preparer of fraudulent tax returns for profit.
Welch was not licensed or recognized as a sports agent and was unable to provide evidence of legitimate profits as a sports agent.
Furthermore, Welch failed to demonstrate that he was otherwise gainfully employed, and he played the principal role in the drafting and filing of at least five individual fraudulent tax returns over a three-year period.
He also misrepresented himself at least once as a CPA.
We find no error in the sentencing court’s finding that Welch was “in the business” of filing fraudulent tax returns.
SECOND CONVICTION RE ANTHONY WELCH TAX RETURN FRAUD (2007)
The Houston Chronicle reports, in part “A con man who collected more than $2 million from the bogus tax returns of NFL players and made bail earlier this year with a bad check was sentenced Monday to six years in federal prison.”
How much of the $2.7 million restitution do you think he has paid since his release? LIT suggests you will probably find out he’s paid not one single cent back.
Ex-sports agent gets 6 years for phony tax returns
Welch also must pay $2.7 million for false returns
July 24, 2007
A con man who collected more than $2 million from the bogus tax returns of NFL players and made bail earlier this year with a bad check was sentenced Monday to six years in federal prison.
Anthony Quinn Welch, 48, a former sports agent from Sugar Land, was also ordered to pay $2.7 million in restitution to the government.
IRS investigators were alerted to the scam when the agency received multiple annual tax returns for former Houston Oiler Joe Bowden and former Buffalo Bill Antowain Smith.
Welch was indicted in February on four counts of aiding and assisting the preparation of false income tax returns and two counts of filing fraudulent income tax claims.
His bail was revoked in March after authorities learned he paid it from an investment account that held insufficient funds.
Welch was responsible for preparing the players’ returns from 1997 through 2002. Unbeknownst to Bowden or Smith, Welch used his authority and access to personal information to snag fraudulent refunds.
He pleaded guilty to collecting $974,620 from the bogus tax returns for himself.
In his plea agreement, Welch acknowledged including phony deductions, business expenses and losses to obtain more than $2 million. He also admitted using bogus mailing addresses and secret bank accounts in the names of the players to pull off the scheme.
His pleaded guilty to two counts; each carried a maximum penalty of three years.
This isn’t the first time Welch has pleaded guilty to tax fraud involving pro football players. In 1992, he admitted to similar charges in Dallas and served time in federal prison. In that scheme, the bogus returns included inflated agent fees and union dues.
Bowden suited up for the Houston Oilers, Dallas Cowboys and the Tennessee Titans. He last played in 2000 and is now the assistant football coach at the University of Central Oklahoma.
Smith, who played for the Buffalo Bills, New England Patriots, Tennessee and the New Orleans Saints, was signed by the Houston Texans last year but was cut in training camp.
32 years ago in April 1992, Welch was indicted on five counts of aiding in the preparation of false tax returns. Welch pled guilty to all five and did time.
In July 2007, Anthony “Tony” Welch was convicted for a again, sentenced to 6 years / $2.7M restitution in SDTX court. pic.twitter.com/ana221y0Af
— lawsinusa (@lawsinusa) July 22, 2024
PARRISH & DEBORAH WITHERSPOON
18814 COVE VISTA LN, CYPRESS, TX 77433
Defaulted in 2015 and since 2017/2018 Welch and/or associates have been litigating regarding a home in which they have no legal interest. The latest case is at the Fourteenth Court of Appeals, decision pending. Seven years Welch has been in Texas state and federal courts regarding this one property. There’s many, many more.
REPUBLISHED BY LIT: JUL 22, 2024
JUL 22, SEP 2, 2024
Above is the date LIT Last updated this article.
The first $1,000 appeal bond filed by bandit lawyer and co-partner Rhonda Shedrick Ross on Aug. 8, 2022. Later, an appeal bond of $30,000 would be paid by Welch to allow him to appeal to the Fourteenth Court of Appeals. He would lose the case on appeal in an Aug. 29, 2024 decision, more than two years after Ross’s appeal bond was deposited.
Parrish and Deborah [Nevarez] Witherspoon defaulted on their $565,715 mortgage loan in 2015 and that was the year the first stop foreclosure case was filed in Harris County District Court.
Public real estate records show that legal Bandit Rhonda Ross became involved in 2017 with the first Harris County case, followed by a year later the $10 buck fake deed filed in Harris County property records on July 12, 2018 transferring the property to convicted felon Anthony Q. Welch aka Mr Properties. This would trigger another case in 2018, followed with yet another baseless case in 2019.
Each time these cases were removed to federal court and each time Welch was the losing party.
On Feb. 28, 2023 there was a state appeal opinion by Justice April Farris which detailed all of the above, and when that order was rendered in favor of the foreclosure mill lawyers and their client, one would assume that would be the end.
It is not the end, far from it.
The home became subject to further eviction proceedings and appeals, during which time the following events occurred;
On Jun 6, 2023 the County Court at Law granted Morgan Stanley’s Motion for Final Summary Judgment and ordered that Morgan Stanley have judgment of possession of the subject property against Welch.
On Jun 15, 2023 Welch appealed and the case was assigned to COA14.
On Sept. 12, 2023, Morgan Stanley executed a special warranty deed in favor of Best in Class, aka HP engineer Shahab Syed selling and assigning property to him for a nominal $10 (ten dollars), which keeps the true sales value hidden from public inspection.
On Sept. 14, 2023, and despite the case being dismissed, Welch wrote to the court expressing concern that the home utilities had been turned off by the lender/servicer/foreclosure mill/investor.
On Sept. 28, 2023 the deed would be formally filed in HC real property records.
On April 17, 2024, the case has been fully briefed and submitted at COA14.
There’s some grey areas we’ve noted, one in particular is the $30,000 bond necessary to appeal and stop being evicted from the property. It doesn’t appear that the $30k set has been submitted to the registry, nor a monthly payment alternative by Welch. In short, there’s a lot of motions discussing this in the eviction court case, but no orders we could locate that resolve the same.
On August 29, 2024, the COA14 appellate court issued a judgment, affirming eviction judgment by lower court.
M E M O R A N D U M O P I N I O N
In this forcible detainer case, appellant Anthony Welch d/b/a Superior Consulting Group (“Welch”) argues that his appeal from the county court’s judgment is moot because during the pendency of this appeal the property whose possession is at issue was sold.
Welch contends that no justiciable controversy regarding possession of the property exists between the parties and that any judgment would be ineffectual.
In his opening brief, Welch does not challenge the merits of the county court’s judgment.
Concluding that this appeal is not moot, we affirm the county court’s judgment.
I. Factual and Procedural Background
In November 2021 FV-1, Inc. in Trust for Morgan Stanley Mortgage Capital Holding LLC (“Morgan Stanley”) purchased the real property located at 18814 Cove Vista Lane, Cypress, Texas 77433 (the “Property”) at a foreclosure sale.
In January 2022 Morgan Stanley filed a forcible detainer action in the justice of the peace court against all occupants of the Property seeking possession of the Property.
Welch, acting pro se, filed an answer.
The justice court rendered a final judgment that Morgan Stanley have possession of the Property.
The defendants in the justice court timely appealed to the County Civil Court at Law No. 3 of Harris County, Texas (the “county court”) for a trial de novo.
Welch, again acting pro se, filed an answer in the county court. Morgan Stanley filed a motion for summary judgment, and Welch responded in opposition.
The county court rendered a final judgment granting Morgan Stanley’s summary-judgment motion and ordering that Morgan Stanley have possession of the Property (the “Judgment”). On June 15, 2023, Welch, acting pro se, timely perfected this appeal from the Judgment.
Welch superseded the Judgment, and it is undisputed that he is in possession of the Property.
On September 12, 2023, Morgan Stanley signed a “Special/Limited Warranty Deed” that conveyed all of Morgan Stanley’s interest in the Property to Best in Class Real Estate Investments LLC (“Best in Class”).
Sixteen days later that deed was filed in the Harris County real property records. Morgan Stanley also signed an instrument in which it assigned to Best in Class the Judgment and all right, title, interest, claim, and demand therein, with full authority of Best in Class to execute on the Judgment and undertake all other legal processes necessary to enforce the Judgment.
In his opening appellate brief Welch named Morgan Stanley as the appellee
and asserted that this appeal is moot and that this court should set aside or vacate the Judgment and dismiss the appeal as moot, based on Morgan Stanley’s sale of the Property and conveyance of Morgan Stanley’s interest in the Property to Best in Class.
Morgan Stanley filed a motion under Texas Rule of Appellate Procedure 7.1(b)1 asking this court to allow Best in Class to substitute in for Morgan Stanley as the appellee. This court granted the motion. Best in Class then filed the appellee’s brief in this case, and Welch filed a reply brief.
II. Analysis
A. Is this appeal moot?
In his two appellate issues, Welch argues that this court lacks appellate jurisdiction because the appeal is moot in light of Morgan Stanley’s sale of the Property to Best in Class.2
Welch contends that no justiciable controversy regarding possession of the Property exists between the parties and that any judgment would be ineffectual.
In his opening brief, Welch only raised the mootness issues and did not challenge the merits of the Judgment.
Welch asserts that because this appeal is moot this court should set aside or vacate the Judgment and dismiss this appeal.
Appellate courts are not to decide moot controversies.
1 Texas Rule of Appellate Procedure 7.1 (b) provides that “[i]f substitution of a party in the appellate court is necessary for a reason other than death, the appellate court may order substitution on any party’s motion at any time.” Tex. R. App. P. 7.1(b).
2 We liberally construe briefs and other filings submitted by pro se parties, and we hold pro se parties to the same standards as licensed attorneys, requiring them to comply with all applicable laws and rules of procedure.
See Mansfield State Bank v. Cohn, 573 S.W.2d 181, 184–85 (Tex. 1978); Rogers v. City of Houston, 627 S.W.3d 777, 786 n.1 (Tex. App.—Houston [14th Dist.] 2021, no pet.).
Nat’l Collegiate Athletic Ass’n v. Jones, 1 S.W.3d 83, 86 (Tex. 1999).
This rule is based on constitutional prohibitions against rendering advisory opinions.
See id.; see also Valley Baptist Med. Ctr. v. Gonzalez, 33 S.W.3d 821, 822 (Tex. 2000).
A case becomes moot if there ceases to be an actual controversy between the parties at any stage of the litigation.
Jones, 1 S.W.3d at 86; see Robinson v. Alief I.S.D., 298 S.W.3d 321, 324 (Tex. App.—Houston [14th Dist.] 2009, pet. denied).
If a judgment can have no practical effect on an existing controversy, the case is moot and any opinion issued on the merits in the appeal would constitute an impermissible advisory opinion.
Thompson v. Ricardo, 269 S.W.3d 100, 103 (Tex. App.—Houston [14th Dist.] 2008, no pet.).
A case becomes moot if, during the appeal, either of the opposing sides of the litigation ceases to have a legally cognizable interest in the outcome of the appeal.
See Jones, 1 S.W.3d at 87.
In this forcible detainer action the only issue is who is entitled to possession of the Property.
See Cao v. MTGLQ Investors, LP, No. 14-22-00820-CV, 2023 WL 3642009, at *1 (Tex. App.—Houston [14th Dist.] May 23, 2023, no pet.).
The county court determined that Morgan Stanley was entitled to possession of the Property.
While this appeal was pending Morgan Stanley sold the Property to Best in Class and assigned all of its right, title, and interest in the Judgment to Best in Class.
Best in Class is now the appellee in this case, and it has filed a brief arguing that this appeal is not moot and that this court should affirm the Judgment.
It is a well-settled rule that, if the interest of either party to a suit is purchased by a third party after commencement of the suit, the purchaser stands in the shoes of the seller, and the sale does not affect the progress or determination of the litigation.
See Smith v. Olsen, 46 S.W. 631, 632 (Tex. 1898); Lee v. Salinas,15 Tex. 495, 496 (Tex. 1855).
Such a sale does not make the case moot.
See Smith, 46 S.W. at 632; Lee, 15 Tex. at 496; City Nat’l Bank of Houston v. Moody, 115 S.W.2d 745, 749–50 (Tex. Civ. App.—Galveston 1938, writ dism’d).
If a litigant who has sold his interest to a third party succeeds in the litigation, the judgment inures to the benefit of the purchaser.
See Smith, 46 S.W. at 632; Lee, 15 Tex. at 496.
The lawsuit may be continued in the name of the seller, or the court may exercise its discretion to allow the purchaser to be substituted in as a party in place of the seller.
See Texas Machinery & Equip. Co. v. Gordon Knox Oil & Explor. Co., 442 S.W.2d 315, 316–17 (Tex. 1969); Lee, 15 Tex. at 496.
In today’s case, this court exercised its discretion to allow Best in Class to be substituted in as a party in place of Morgan Stanley. An actual, justiciable controversy exists between Welch and Best in Class and each party has a legally cognizable interest in the outcome of this appeal.
See Jones, 1 S.W.3d at 86–88.
A judgment from this court will have a practical effect on this existing controversy.
See In the Interest of C.C.E., 530 S.W.3d 314, 318–19 (Tex. App.—Houston [14th Dist.] 2017, no pet.).
We conclude that this appeal is not moot.
See Smith, 46 S.W. at 632; Lee, 15 Tex. at 496; City Nat’l Bank of Houston, 115 S.W.2d at 749–50.
Therefore we overrule Welch’s two appellate issues.
B. May Welch raise new appellate arguments in his reply brief?
In his opening brief, Welch only raised the mootness issues and did not challenge the merits of the Judgment.
In his reply brief Welch asserts two “Additional Issues Presented,” in which he asserts that the county court erred in granting the summary-judgment motion and in failing to rule on Welch’s objections to the summary-judgment evidence before granting summary judgment.
In the reply brief Welch presents arguments in support of these issues.
We overrule these two additional issues and the arguments under them because they were raised for the first time in a reply brief.
See Williams v. Jimglo Yellowstone, LLC, No. 14-21-00375-CV, 2022 WL 4354114, at *3 (Tex. App.—Houston [14th Dist.] Sept. 20, 2022, no pet.) (mem. op.).
III. Conclusion
This appeal is not moot.
In his opening brief Welch only makes mootness arguments; he does not challenge the merits of the Judgment.
Therefore, we affirm the Judgment.
/s/ Randy Wilson Justice
Panel consists of Justices Hassan, Poissant, and Wilson.
| Case (Cause) Number | Style | File Date | Court | Case Region | Type Of Action / Offense | |
|---|---|---|---|---|---|---|
| 201828710- 7 Disposed (Final) |
WITHERSPOON, PARRISH vs. AMCAP MORTGAGE LTD | 4/30/2018 | 157 | Civil | Foreclosure – Other | |
| 201743741- 7 Disposed (Final) |
WITHERSPOON, PARRISH vs. AMCAP MORTGAGE LTD |
6/30/2017 | 157 | Civil | Quiet Title | |
| 201530323- 7 Disposed (Final) |
WITHERSPOON, PARRISH vs. AMCAP MORTGAGE LTD | 5/27/2015 | 164 | Civil | OTHER CIVIL |
Defendant
AmCap Mortgage, Ltd.
Morgan Stanley Mortgage Capital Holdings, LLC
Represented by
Jason Lee Fowell
(832) 372-6766
The Fowell Law Firm
1523 Yale St.
Houston, TX 77008
ATTORNEY TO BE NOTICED
LEAD ATTORNEY
Specialized Loan Servicing, LLC
Represented by
Jason Lee Fowell
(832) 372-6766
The Fowell Law Firm
1523 Yale St.
Houston, TX 77008
ATTORNEY TO BE NOTICED
Plaintiff
Mr. Properties
Represented by
Rhonda Shedrick Ross
(281) 216-8778
Attorney at Law
121 E 12th St
Ste 6
Houston, TX 77008
ATTORNEY TO BE NOTICED
LEAD ATTORNEY
Defendant
AMCAP Mortgage, Ltd.
Represented by
Nathan Joseph Milliron
(713) 759-0818
Fax: (713) 759-6834
Hughes Watters Askanase
1201 Louisiana St.
28th Floor
Houston, TX 77002
ATTORNEY TO BE NOTICED
LEAD ATTORNEY
FV-1, Inc. in Trust for Morgan Stanley Capital Holdings, LLC
Represented by
Jason R Bernhardt
(713) 650-8400
Fax: (713) 650-2400
Winstead PC
600 Travis St.
Suite 5200
Houston, TX 77002
ATTORNEY TO BE NOTICED
LEAD ATTORNEY
Kasi Nicole Chadwick
(713) 547-9181
Hicks Thomas LLP
700 Louisiana
Suite 2000
Houston, TX 77002
ATTORNEY TO BE NOTICED
Specialized Loan Servicing, Inc.
Represented by
Jason R Bernhardt
(713) 650-8400
Fax: (713) 650-2400
Winstead PC
600 Travis St.
Suite 5200
Houston, TX 77002
ATTORNEY TO BE NOTICED
LEAD ATTORNEY
Kasi Nicole Chadwick
(713) 547-9181
Hicks Thomas LLP
700 Louisiana
Suite 2000
Houston, TX 77002
ATTORNEY TO BE NOTICED
Plaintiff
Anthony Welch
Represented by
Anthony Welch
Anthony Welch
7322 Southwest Freeway
Suit 1816
Houston, TX 77074
Deborah Witherspoon
Represented by
Deborah Witherspoon
(478) 318-1581
Deborah Witherspoon
18814 Cove Vista Lane
Cypress, TX 77433
Robert Chamless Lane
(713) 595-8200
ATTORNEY TO BE NOTICED
LEAD ATTORNEY
TERMINATED: 05/24/2018 (May 24, 2018)
Parrish Witherspoon
Represented by
Parrish Witherspoon
(478) 318-1581
Parrish Witherspoon
18814 Cove Vista Lane
Cypress, TX 77433
Robert Chamless Lane
(713) 595-8200
ATTORNEY TO BE NOTICED
LEAD ATTORNEY
TERMINATED: 05/24/2018 (May 24, 2018)
Consol Defendant
Capital Holdings, LLC
Consol Plaintiff
Deborah Nevarez
Represented by
Deborah Nevarez
Deborah Nevarez
18814 Costa Vista Lane
Cypress, TX 77433
Defendant
Amcap Mortgage
Represented by
Jason R Bernhardt
(713) 650-8400
Fax: (713) 650-2400
Winstead PC
600 Travis St.
Suite 5200
Houston, TX 77002
ATTORNEY TO BE NOTICED
LEAD ATTORNEY
Morgan Stanley Mortgage Capital Holdings LLC
Terminated (April 11, 2018)
Represented by
Jason R Bernhardt
(713) 650-8400
Fax: (713) 650-2400
Winstead PC
600 Travis St.
Suite 5200
Houston, TX 77002
ATTORNEY TO BE NOTICED
Specialized Loan Servicing LLC
Terminated (April 11, 2018)
Represented by
Jason R Bernhardt
(713) 650-8400
Fax: (713) 650-2400
Winstead PC
600 Travis St.
Suite 5200
Houston, TX 77002
ATTORNEY TO BE NOTICED
Plaintiff
Parrish Witherspoon
Represented by
Rhonda Shedrick Ross
(281) 216-8778
Attorney at Law
121 E 12th St
Ste 6
Houston, TX 77008
ATTORNEY TO BE NOTICED
LEAD ATTORNEY
| 202217953- 7 Disposed (Final) |
FIRST SUPERIOR INVESTMENTS LLC vs. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC (AKA MERS) | 3/25/2022 | 152 | Civil | Foreclosure – Other | |
| 202201509- 7 Disposed (Final) |
WOODLEY, DAMONA vs. SIDNEY, DONALD R |
1/10/2022 | 152 | Civil | Debt / Contract – Fraud / Misrepresentation | |
| 201917751- 7 Disposed (Final) |
MOSS, WILLIAM D vs. WELLS FARGO BANK NA | 3/11/2019 | 152 | Civil | Foreclosure – Other | |
| 201885318- 7 Disposed (Final) |
KUEHNERT, KATIE vs. HOMEBRIDGE FINANCIAL SERVICES INC |
11/29/2018 | 152 | Civil | Foreclosure – Other | |
| 201879873- 7 Disposed (Final) |
KUEHNERT, KATIE vs. HOMEBRIDGE FINANCIAL SERVICES INC | 11/5/2018 | 152 | Civil | Foreclosure – Other | |
| 201328881- 7 Disposed (Final) |
HARRIS COUNTY, ET AL vs. SHEDRICK, ROBERT B |
5/20/2013 | 152 | Civil | Tax Delinquency |
🔥 SUNDAY’s GOSPEL: TX REAL ESTATE FRAUD CARTELS 🔥
Uncover the truth about how the judiciary, foreclosure mill lawyers, and state and federal judges provide a fraudulent system that allows a felon operating several businesses to litigate over homes he does not legally own.💰🏠 pic.twitter.com/Tcu8Cu7Wa0— lawsinusa (@lawsinusa) July 21, 2024
Welch v. Specialized Loan Servicing, LLC
No. 01-21-00704-CV
(Tex. App. Feb. 28, 2023)
MEMORANDUM OPINION
Appellant Anthony Welch d/b/a Superior Consulting Group obtained a temporary restraining order to stop the sale of real property at foreclosure by appellees, Specialized Loan Servicing, LLC and FV-I, Inc., in trust for Morgan Stanley Mortgage Capital Holdings, LLC (collectively, “the lenders”).
After the temporary restraining order expired, the lenders conducted a foreclosure sale of the property.
The trial court found that Superior Consulting Group had filed suit for an improper purpose.
As sanctions, the court struck Superior Consulting Group’s pleadings, dismissed its claims, and awarded the lenders attorney’s fees.
In its sole issue on appeal, Superior Consulting Group argues that the foreclosure sale was void because the lenders posted the property for sale while the temporary restraining order was in effect.
Superior Consulting Group also requests that we reverse the trial court’s order dismissing its claims. We affirm.
Background
A. The Litigation History
In 2010, Deborah Nevarez and Parrish Witherspoon purchased a piece of real property in Cypress, Texas, and executed a promissory note for the purchase price. A vendor’s lien secured payment of the promissory note, and Nevarez and Witherspoon also executed a deed of trust in favor of their mortgage company, AMCAP Mortgage, Ltd.
Through a series of assignments, FV-I, Inc., in trust for Morgan Stanley Mortgage Capital Holdings, LLC, became the holder of the promissory note and obtained ownership of the deed of trust in 2015.
In 2018, Nevarez and Witherspoon conveyed the property to Mr. Properties, which conveyed the property to Superior Consulting Group in 2019. Both Mr. Properties and Superior Consulting Group are sole proprietorships operated by Welch.
Nevarez and Witherspoon defaulted on the note in 2015.
Over the next six years, Nevarez, Witherspoon, Mr. Properties, and Superior Consulting Group filed multiple lawsuits to stop the lenders from foreclosing on the property.
Nevarez, Witherspoon, Mr. Properties, and Superior Consulting Group have raised substantially the same claims in each lawsuit.
None of these lawsuits have been successful.
Nevarez and Witherspoon first filed suit in May 2015, and this lawsuit was assigned to the 164th District Court of Harris County.
That court granted summary judgment in favor of the lenders and dismissed Nevarez and Witherspoon’s claims with prejudice in May 2016.
Unsatisfied with this outcome, Witherspoon and Nevarez filed separate lawsuits in June 2017 and October 2017.
These lawsuits were assigned to the 157th District Court and the 164th District Court, respectively, and the lenders removed both cases to federal court where the Southern District of Texas consolidated the suits into one proceeding.
Upon the lenders’ motion for dismissal under Federal Rule of Civil Procedure 12(b)(6), the federal district court granted the motion, ruling that the summary judgment order signed by the 164th District Court in May 2016 was res judicata and barred adjudication of the claims.
After Witherspoon and Nevarez conveyed the property to Mr. Properties in 2018, Mr. Properties began asserting similar claims against the lenders.
A lawsuit filed in April 2018 was assigned to the 333rd District Court, and the lenders again removed the case to federal court.
Upon the magistrate judge’s recommendation, the federal district court dismissed Mr. Properties’ claims based on res judicata in September 2018.
Undeterred, Mr. Properties filed another lawsuit raising the same claims—the fifth lawsuit concerning this property—in November 2018.
This case was assigned to the 281st District Court, and the lenders again removed the case to federal court. Once again, the magistrate judge recommended dismissal of the lawsuit based on res judicata grounds, and the federal court dismissed the case in August 2019.
Mr. Properties conveyed the property to Superior Consulting Group, which filed a substantially similar lawsuit against the lenders in July 2019.
This lawsuit was assigned to the 157th District Court. Superior Consulting Group alleged that the lenders did not have standing to seek non-judicial foreclosure because they had failed to provide Superior Consulting Group with a notice of default, notice to accelerate, and notice of foreclosure.
It also alleged that there was a “discrepancy in the chain of title” and that there was no evidence that the lenders were “in ownership of the note.” It further alleged that the assignments from the original lender to the current lenders were not valid.
Superior Consulting Group asserted the following claims:
(1) improper lien due to a “break in the lien of the alleged noteholder”;
(2) declaratory judgment that the lenders did not properly accelerate the loan, which had been paid in full;
(3) improper acceleration of the loan;
(4) suit to “remove cloud and quiet title”;
and
(5) declaratory judgment that the lenders did not follow proper procedures for foreclosing under the deed of trust and Texas law.
Superior Consulting Group also requested a temporary restraining order (“TRO”) and a permanent injunction to stop foreclosure.
In this prior proceeding, the trial court signed three summary judgment orders in favor of the lenders.
In the first order, signed in October 2019, the trial court granted the lenders’ summary judgment motion on Superior Consulting Group’s claims, finding that the claims the property owners brought in their prior lawsuits “arose out of the same nucleus of operative facts raised by [Superior Consulting Group] in this matter.”
The court ruled that Superior Consulting Group take nothing on its claims “and that all claims brought by said Plaintiff against the [lenders] are hereby DISMISSED with prejudice as to the right to refile the same.”1
1 Superior Consulting Group filed a notice of appeal from this summary judgment order.
In July 2020, a panel of this Court dismissed the appeal for nonpayment of fees and for want of prosecution.
See Superior Consulting Grp. v. AMCAP Mortg. Ltd., No. 01-20-00020-CV, 2020 WL 4296894 (Tex. App.—Houston [1st Dist.] July 28, 2020, no pet.) (per curiam) (mem. op.).
In the second and third orders, signed in December 2020, the trial court granted the lenders’ traditional and no-evidence motions for summary judgment relating to a notice of lis pendens that Superior Consulting Group had filed on the property.
In the order granting the traditional motion, the court found that Superior Consulting Group had “no evidence that it has a probable valid real property claim entitling [it] to the filing of a lis pendens.”
The court found that FV-I was the owner and beneficiary of the promissory note executed by Nevarez and Witherspoon and secured by a deed of trust.
The note and deed of trust were “in material breach.”
The court expunged the notice of lis pendens and ruled that FV-I “has superior legal title to the Property” and “has the legal right of foreclosure and may proceed with foreclosure of the Deed of Trust and lien created therein.”
Anthony Q. Welch was convicted in 2007 in SDTX Court. Judge Lynn Hughes claims that’s a forgettable moment, a $2M Dollar Bogus Tax Refund Scheme per @USAO_SDTX and @DOJCrimDiv. Since then, the Judiciary has provided open access to the courts to this felon, a habitual criminal. pic.twitter.com/90ehHmcGzs
— lawsinusa (@lawsinusa) July 21, 2024
B. The Underlying Proceeding
The lenders scheduled the property for foreclosure on October 5, 2021. On September 28, 2021, Superior Consulting Group filed the underlying lawsuit, the seventh lawsuit relating to this property.
This petition was substantively identical to the petition Superior Consulting Group filed in July 2019 that was assigned to the 157th District Court.2
Superior Consulting Group sought an ex parte TRO enjoining
2 The only changes that Superior Consulting Group made in the September 2021 petition was to add Nevarez as a plaintiff and to allege that the lien against the property had been released.
Superior Consulting Group also argued that the lien had been released in its motion for reconsideration of the trial court’s order dismissing its pleadings. It attached a purported release of lien to this filing.
the lenders the foreclosure sale.
Superior Consulting Group did not make any reference to the prior litigation history of the case, the judgments that had been rendered against it or its predecessors in interest, or the 157th District Court’s dismissal of the July 2019 lawsuit with prejudice.
The Harris County ancillary judge granted the ex parte TRO on September 30.
This order prohibited the lenders from foreclosing on the property; evicting anyone from the residence; entering and taking possession of the property; “[p]roceeding with or attempting to sell or foreclose upon the home”; and attempting to purchase, transfer, assign, or collect on the mortgage “from the date of entry of this Order until and to the 14th day after entry or until further order of this Court.”
The ancillary judge set a hearing for October 8, 2021, to determine whether the TRO should become a temporary injunction.
The appellate record does not include a citation for the TRO, a writ of injunction, or a return of service.
However, the lenders filed an answer on October 4, 2021.
In their answer, the lenders briefly recited the history of the litigation between the parties and argued that Superior Consulting Group’s petition was frivolous under Civil Practice and Remedies Code Chapter 10 and Texas Rule of Civil Procedure 13.
See TEX. CIV. PRAC. & REM. CODE §§ 10.001–.006
(allowing responded and presented evidence that this purported release was a fraudulent instrument.
trial court to impose sanctions if pleading is filed for improper purpose);
TEX. R. CIV. P. 13
(allowing trial court to impose sanctions if pleading is groundless and brought in bad faith or for purpose of harassment).
The lenders sought sanctions against Superior Consulting Group and its counsel.
On October 6, 2021, the lenders posted the property for foreclosure sale.
The notice listed the date of the sale as November 2, 2021.
The TRO expired pursuant to its own terms on October 14, 2021.
Superior Consulting Group did not request that the TRO be extended.
No hearing was held on whether the TRO should become a temporary injunction.
The lenders moved for sanctions and attorney’s fees on the basis that Superior Consulting Group’s lawsuit was frivolous, groundless, and brought in bad faith.
The lenders requested that the trial court strike Superior Consulting Group’s pleadings and dismiss the lawsuit.
As supporting evidence, the lenders attached the promissory note; the deed of trust; the assignments of the deed of trust to FV-I; the prior pleadings filed by Nevarez, Witherspoon, Mr. Properties, and Superior Consulting Group; three sets of recommendations by federal magistrate judges; and multiple orders from various state and federal courts dismissing the claims of the property owners.
Superior Consulting Group also requested that the trial court impose sanctions.
It argued that the lenders posted the property for foreclosure on October 6, 2021, even though the TRO was in effect at the time. Superior Consulting Group requested attorney’s fees as a sanction.
The foreclosure sale occurred on November 2, 2021.3
On November 9, 2021, the trial court held a hearing on the lenders’ motion for sanctions.
That same day, the trial court granted the lenders’ motion.
In the order granting this motion, the court found that Superior Consulting Group was in privity with Mr. Properties, Witherspoon, and Nevarez.
The court then specifically found:
6. Final Judgment has been rendered in favor of the Movant [the lenders] based upon claims raised by Parrish Witherspoon and Deborah Witherspoon in Cause No. 2015-30323 in the 164th Judicial District Court of Harris County, Texas, which claims arouse out of the same nucleus of operative facts raised by Plaintiff in this matter, and that subsequent actions, also based upon the nucleus of operative facts have been dismissed by the Southern District Court of Texas in Civil Action Nos. 4:17-CV- 02675, 4:17-CV-02675, 4:18-CV-01528, and 4:19-cv-00062;
3 On appeal, the lenders argue that Superior Consulting Group’s appeal is moot because the property has been sold at foreclosure and the status quo that Superior Consulting Group “seeks to preserve has long ago changed.”
“When a temporary injunction becomes inoperative due to a change in status of the parties or the passage of time, the issue of its validity is also moot.”
Nat’l Coll. Athletic Ass’n v. Jones, 1 S.W.3d 83, 86 (Tex. 1999).
However, whether the ancillary judge erred by granting the TRO is not at issue in this appeal.
The issue is whether the fact that the lenders posted the property for foreclosure sale while the TRO was in effect rendered the ensuing foreclosure sale void.
Superior Consulting Group urges us to hold that the trial court erred by failing to set aside the foreclosure sale and by dismissing its pleadings.
This is still a live controversy between the parties.
See id. (“A case becomes moot if at any stage there ceases to be an actual controversy between the parties.”).
7. Final Judgment was rendered in favor of the Movant based upon claims raised by Plaintiff Superior Consulting Group by this Court in Cause No. 2019-48510, wherein superior title to the Property and the right to foreclose was granted to Movant;
8. Plaintiffs and Plaintiffs’ Counsel have filed various lawsuits in vain to delay the foreclosure sale of the Property;
9. Plaintiffs and Plaintiffs’ Counsel have knowledge of the judgments entered against them and in favor of the Movant;
10. Plaintiffs and Plaintiffs’ Counsel have abused the judicial system by filing a lawsuit for an improper purpose, with frivolous and/or groundless claims and/or claims which have been adjudicated against them, and which were brought in bad faith and/or for the purpose of harassment; and
11. To deter such conduct, the Court finds the sanctions set forth herein are worthy of the actions of the Plaintiffs and Plaintiffs’ Counsel to deter such future conduct.
It is therefore, ORDERED, ADJUDGED AND DECREED that the claims made by Plaintiffs Superior Consulting Group and Deborah Nevarez are hereby stricken and dismissed in their entirety.
The trial court also awarded attorney’s fees to the lenders.
Superior Consulting Group filed a motion to reconsider.
In this motion, Superior Consulting Group requested that the trial court vacate the foreclosure sale that occurred on November 2, 2021, because the lenders had posted the property for foreclosure on October 6, in violation of the TRO.
The trial court denied the motion to reconsider. This appeal followed.
Felon Welch registered the Excess Funds Online LLC in 2017 and we know there’s been a push to expunge criminal records in Texas, incl. Bill Text: TX HB3331 | 2023-2024 | @SenBryanHughes https://t.co/TDAnKNGPQL
The $3m home’s been repeatedly litigated in SDTX, incl Mark Hopkins. pic.twitter.com/myMUljkQgq— lawsinusa (@lawsinusa) July 21, 2024
Validity of Foreclosure Sale
In its sole issue on appeal, Superior Consulting Group argues that the foreclosure sale was void because the property was posted for sale while the TRO was in effect.
It requests that this Court set aside the foreclosure sale and vacate the trial court’s order dismissing its pleadings.
A. Governing Law
The purpose of a temporary restraining order is to the preserve the status quo, defined as the “last, actual, peaceable, non-contested status which preceded the pending controversy.”
In re Newton, 146 S.W.3d 648, 651 (Tex. 2004) (orig. proceeding) (quoting Janus Films, Inc. v. City of Fort Worth, 358 S.W.2d 589, 589 (Tex. 1962) (per curiam)).
A TRO becomes effective at the time the trial court signs the order and endorses the date and hour of issuance.
TEX. R. CIV. P. 680; In re Walkup, 122 S.W.3d 215, 217–18 (Tex. App.—Houston [1st Dist.] 2003, orig. proceeding).
A TRO “shall expire by its terms within such time after signing, not to exceed fourteen days, as the court fixes,” unless, upon a showing of good cause, the TRO is “extended for a like period or unless the party against whom the order is directed consents that it may be extended for a longer period.”
TEX. R. CIV. P. 680.
Although the trial court may extend a TRO, it may only do so once unless subsequent extensions are unopposed. Id.
“[A]ll temporary restraining orders are subject to Rule 680’s limitations on duration.”
In re Tex. Nat. Res. Conservation Comm’n, 85 S.W.3d 201, 204 (Tex. 2002) (orig. proceeding).
When a TRO is granted without notice to the opposing party, the application for temporary injunction shall be set for hearing at the “earliest possible date.”
TEX.R. CIV. P. 680.
When the application for temporary injunction “comes on for hearing the party who obtained the temporary restraining order shall proceed with the application for a temporary injunction and, if he does not do so, the court shall dissolve the temporary restraining order.” Id.
Every TRO shall include an order setting a certain date for hearing on the temporary or permanent injunction sought. Id.
A TRO 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.”
TEX. R. CIV. P. 683; Ex parte Jackman, 663 S.W.2d 520, 523 (Tex. App.—Dallas 1983, no writ)
(“The rules of civil procedure require only that the parties receive actual notice of the order by personal service or otherwise.”).
When a petition requesting a TRO or a temporary injunction is filed and that petition does not pertain to a matter already pending in the trial court, the clerk of the court shall issue citation to the defendant “as in other civil cases, which shall be served and returned in like manner as ordinary citations issued from said court.”
TEX. R. CIV. P. 686; In re Poe, 996 S.W.2d 281, 282–83 (Tex. App.—Amarillo 1999, orig. proceeding).
Rule of Civil Procedure 687 sets out specific requirements for a writ of injunction.
TEX. R. CIV. P. 687; see Ex parte Coffee, 328 S.W.2d 283, 290 (Tex. 1959)
(stating that “writ of injunction” includes temporary restraining order).
If the writ is a TRO, it shall “state the day and time set for hearing, which shall not exceed fourteen days from the date of the court’s order granting such temporary restraining order.”
TEX. R. CIV. P. 687(e).
The writ must also “be dated and signed by the clerk officially and attested with the seal of his office and the date of its issuance must be indorsed thereon.”
TEX. R. CIV. P. 687(f).
When the petition, order of the judge, and the bond have been filed, the clerk must issue the TRO “in conformity with the terms of the order, and deliver the same to the sheriff or any constable of the county of the residence of the person enjoined, or to the applicant, as the latter shall direct.”
TEX. R. CIV. P. 688.
The officer receiving the writ shall indorse the date of receipt, execute the writ by delivering it to the party enjoined, and file a return of service.
TEX. R. CIV. P. 689.
These procedural requirements are mandatory.
In re Guardianship of Chang, 635 S.W.3d 444, 448 (Tex. App.—Houston [14th Dist.] 2021, pet. denied).
If a party disobeys an injunction, the trial court may punish the violation “as a contempt.”
TEX. R. CIV. P. 692.
If an injunction is not void, it must be obeyed while it remains in effect, and any disobedience is properly punished by contempt.
Ex parte Jackman, 663 S.W.2d at 524.
B. Analysis
Historically, Texas courts have held that a foreclosure sale that occurs in violation of a TRO or a temporary injunction is void and no title passes to the purchaser.
See, e.g., Ward v. Billups, 13 S.W. 308, 308 (Tex. 1890); Pioneer Bldg. & Loan Ass’n v. Cowan, 123 S.W.2d 726, 729–30 (Tex. App.—Waco 1938, writ dism’d).
Similarly, the Dallas Court of Appeals has held that even if the injunction has been dissolved at the time of the foreclosure sale, the sale will still be void if notice of the foreclosure sale was posted in violation of the injunction.
Jackson v. The Praetorians, 83 S.W.2d 740, 741 (Tex. App.—Dallas 1935, no writ).
However, the Dallas Court of Appeals distinguished Jackson in a later case in which notice of a foreclosure sale was posted at the time a TRO was in effect, but no order or injunction was in force at the time of the sale.
In Tower Contracting Co. v. Central States, Southeast and Southwest Areas Pension Fund, the owner of commercial property defaulted on a promissory note due to failure to pay property taxes.
See 581 S.W.2d 724, 726 (Tex. App.—Dallas 1979, writ ref’d n.r.e.).
The trustee under the deed of trust informed the owner that it intended to post the property for sale on June 3. Id.
In a sworn petition requesting a TRO, the property owner swore that it had obtained an agreement from a third-party lender to pay the property taxes before June 3, and the trustee had orally agreed not to hold the sale if the taxes were paid. Id.
The property owner alleged that, on May 30, the lender informed it that funds would not be advanced. Id.
The attorney for the trustee then refused to grant any additional time for payment of the property taxes and intended to conduct the sale on June 3. Id.
A TRO issued on June 2. Id.
The TRO prohibited the trustee from posting the property for sale or conducting any sale before a hearing on the application for temporary injunction, which was set for June 12. Id.
The trustee did not conduct the sale on June 3, but on June 9, it posted the property for sale occurring on July 1. Id.
On June 12, the parties signed an agreement to dissolve the TRO. Id.
The property owner agreed that it would not request a temporary injunction. Id.
The parties also agreed that if they did not reach a new agreement concerning payment of the taxes by July 1, then the trustee would be free to proceed with foreclosure of the property without interference by the owner. Id.
Ultimately, the trustee sold the property on July 1, and the property owner sought damages for wrongful foreclosure and tortious interference. Id.
The Dallas Court refused to hold that the property owner was entitled to damages on the theory that no valid notice of the foreclosure sale was posted. Id. at 727.
The court stated:
The only defect in the notice resulted from the temporary restraining order that plaintiff itself had obtained on obviously insufficient grounds.
The petition alleged only that the [trustee] had agreed not to foreclose if plaintiff should pay the taxes by June 3, and that plaintiff expected to borrow the money to pay the taxes, but was notified by the prospective lender on May 30 that the money would not be advanced.
Plaintiff makes no pretense in this suit that it had even an arguable ground for a temporary restraining order or a temporary injunction.
In its present petition plaintiff alleges simply that it obtained the temporary restraining order “(b)ecause plaintiff’s source for raising the necessary funds was unexpectedly withdrawn.”
Plaintiff’s president testified by deposition in the present action that the only reason for obtaining the temporary restraining order was to gain time in the hope that the necessary funds could be raised.
Id.
In distinguishing the case before it from Jackson, the Dallas Court noted that the property owner had obtained the TRO “on a petition stating insufficient grounds” and that the owner “voluntarily withdrew” the order “after agreeing not to interfere further with the sale.”
Id.
The Dallas Court also reasoned that the property owner knew that the foreclosure sale would occur on July 1, but made no objection to the sale until afterwards.
Id.
Additionally, the court noted that the owner, as the plaintiff and party seeking the TRO, had the burden to show that it “acted in good faith when it applied for the temporary restraining order and not, as it now admits, deliberately to delay a sale that otherwise would have been entirely proper.”
Id. at 727–28.
The property owner “abuse[d] the judicial process” when it sought a TRO without legal or equitable grounds.
Id. at 728.
The Dallas Court stated that the property owner “should not be able thus to rely on its own wrong to create a cause of action in its favor.” Id.
Therefore, the property owner was not entitled to damages.
Id. at 727– 28.
We conclude that this case, with its unique litigation history, is analogous to Tower Contracting. At the time Superior Consulting Group sought the TRO in the underlying proceeding to halt a foreclosure sale scheduled for October 5, 2021, six judgments had been rendered against it or against its predecessors in interest.
Nearly two years prior, the 157th District Court had, in a substantively identical case, granted summary judgment in favor of the lenders and dismissed with prejudice Superior Consulting Group’s claims related to this property.
Nine months before this proceeding began, the 157th District Court again granted summary judgment in favor of the lenders and expressly ruled that the lenders had superior legal title to the property and had the right to foreclose upon the property.
Since the 164th District Court rendered the first judgment against Nevarez and Witherspoon in May 2016, the owners of this property, including Superior Consulting Group, have engaged in impermissible forum shopping in the Harris County district courts.
They have repeatedly filed substantively identical lawsuits after a court—whether state or federal—renders an adverse judgment against them.
When it sought the TRO at issue in this proceeding, Superior Consulting Group disclosed none of this prior litigation history in its petition.
It did not inform the ancillary judge that it had raised identical claims in prior lawsuits, but multiple state and federal courts had issued judgments against it and its predecessors.
It also did not inform the ancillary judge that the 157th District Court had expressly ruled that the lenders had superior legal title to the property and had the right to foreclose.
The lenders presented evidence of this litigation history to the trial court and requested sanctions, including dismissal of the underlying proceeding.
The trial court, supported by ample evidence, found that Superior Consulting Group, its predecessors, and its counsel had knowledge of the judgments entered against them.
Nevertheless, Superior Consulting Group “abused the judicial system by filing a lawsuit for an improper purpose, with frivolous and/or groundless claims and/or claims which have been adjudicated against them, and which were brought in bad faith and/or for the purpose of harassment.”
To “deter such future conduct,” the trial court struck Superior Consulting Group’s pleadings and dismissed its claims “in their entirety.”
Based on the factual record before it, the trial court did not abuse its discretion in granting the lenders’ motion for sanctions and dismissing Superior Consulting Group’s petition.4
See Unifund CCR Partners v. Villa, 299 S.W.3d 92, 97 (Tex. 2009) (per curiam)
(stating that trial court’s order imposing sanctions is reviewed for abuse of discretion).
Moreover, we conclude that in light of the trial court’s ruling that Superior Consulting Group abused the judicial process and filed the underlying petition seeking a TRO for an improper purpose, under the facts of this case, the trial
4 On appeal, Superior Consulting Group does not argue that the trial court erroneously found that Superior Consulting Group filed its petition for an improper purpose, asserted frivolous or groundless claims, or brought suit in bad faith or for the purpose of harassment.
court did not err by refusing to set aside the foreclosure sale that occurred on November 2, 2021, as void.
See Tower Contracting, 581 S.W.2d at 727–28
(stating that, when seeking damages for wrongful foreclosure, plaintiff has burden to show that it acted in good faith when it sought TRO rather than attempting to deliberately delay foreclosure sale that “otherwise would have been entirely proper”).
We overrule Superior Consulting Group’s sole issue.
Conclusion
We affirm the judgment of the trial court.
April L. Farris Justice
Panel consists of Justices Goodman, Countiss, and Farris.
Yesterday, LIT was posting on X re the property and case involving “Eno” Williams, a known crew member of Welch. That home is legally owned by Parrish and Deborah Witherspoon – well guess what, he’s got another identity, “Matt” Williams, per a 2024 tax delinquency estate case. pic.twitter.com/w4WaADtY0A
— lawsinusa (@lawsinusa) July 21, 2024
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