LIT UPDATE AND COMMENTARY
APR 16, 2024
“There is no dispute that Texas Civil Practice & Remedies Code §16.035 describes a four year statute of limitations in which to sell the property or bring suit for judicial foreclosure”
In June 2016, Smitherman filed his fourth lawsuit in state court relating to this mortgage dispute to prevent a fourth foreclosure attempt.
This fourth lawsuit filed by Smitherman is the subject of this appeal.
Smitherman’s original petition in state court alleged claims under the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2601, et seq., state law claims for quiet title and wrongful foreclosure, and sought declaratory and injunctive relief.
Bayview subsequently removed this suit to federal court based on both federal question and diversity jurisdiction.
Smitherman’s home would sell at the Aug. 2, 2016 Auction, while the latest removed case was before Judge Lynn Hughes, who issued a permanent injunction by oral hearing on July 17, 2016, upon payment of $1k bond, preventing Smitherman from interfering with any future foreclosure auction(s). This was premised on motion to dismiss requesting All Writs Act be applied to Smitherman by BDF Law Group.
b. Wrongful Foreclosure Claim
Smitherman’s wrongful foreclosure claim was properly dismissed. Ordinarily, Texas law recognizes three elements for a wrongful foreclosure claim: (1) “a defect in the foreclosure sale proceedings;” (2) “a grossly inadequate selling price;” and (3) “a causal connection between the defect and the grossly inadequate selling price.”
Sauceda v. GMAC Mortg. Corp., 268 S.W.3d 135, 139 (Tex. App.—Corpus Christi 2008, no pet.).
“A claim of wrongful foreclosure cannot succeed . . . when no foreclosure has occurred.”
Foster v. Deutsche Nat’l Trust Co., 848 F.3d 403, 406 (5th Cir. 2017) (per curiam).
Additionally, “a party cannot state a viable claim for wrongful foreclosure if the party never lost possession of the Property.”
See id. (quoting James v. Wells Fargo Bank, N.A., 533 F. App’x 444, 446 (5th Cir. 2013) (per curiam) (unpublished) (quotation marks omitted)); see also Filgueira v. U.S. Bank Nat’l Ass’n, 734 F.3d 420, 423 (5th Cir. 2013) (per curiam).
It is undisputed that no foreclosure sale had taken place and Smitherman still resided at the property when the district court entered judgment denying his claim of wrongful foreclosure.
Smitherman even represented on appeal that he still resides at the property.
Because the foreclosure sale had not occurred and Smitherman never lost possession of the property,
Smitherman’s wrongful foreclosure claim was premature and properly dismissed.
See Foster, 848 F.3d at 406-07 (“Texas does not recognize an action for attempted wrongful foreclosure.”).
WE WILL FIGHT FOR CITIZENS WHO ARE TOO TIMID TO SPEAK OUT. WE AIN’T INTIMIDATED, WE’RE 🔥 LIT 🤠
And if you haven’t gathered, we ain’t stoppin’ publishing the lawlessness in Texas State and Federal Courts, despite the malicious and egregious targeting of LIT’s founder, et al. pic.twitter.com/q5f5WFnxnB— lawsinusa (@lawsinusa) April 16, 2024
Smitherman v. Bayview Loan Servicing, LLC,
No. 16-20560 (5th Cir. Mar. 6, 2018)
In the Fifth Circuit Court of Appeals decision, Smitherman v BayView Loan Servicing they answered a series of arguments and dismissed them all, Bank wins.
“D. Patrick Smitherman (“Smitherman”), proceeding pro se, appeals the district court’s dismissal of his lawsuit relating to the foreclosure of his property in Houston, Texas. The district court dismissed Smitherman’s complaint that included Texas state law quiet title and wrongful foreclosure claims, and requests for declaratory and injunctive relief. This is the fourth lawsuit filed by Smitherman that relates to his mortgage dispute with Appellee, Bayview, LLC (“Bayview”), or its predecessor in interest, Bank of America, N.A. (“Bank of America”). For the following reasons, we AFFIRM. “
However, we’ll look at Quiet Title response, where they claim the Plaintiff has to show why the title was “clouded” as much as the court has the power of equity in removing any cloud;
Request to Quiet Title.
Smitherman’s claim to quiet title was also properly dismissed. Smitherman sought to avoid a threatened foreclosure sale on his home by contending that a transfer of interest between Bayview and the third party purchaser at the foreclosure sale was invalid due to an improper assignment of the deed of trust on the property. Smitherman specifically alleged that Bank of America’s assignment of the note and deed of trust was invalid because
(1) it was not signed by Bank of America,
(2) Bayview signed as “attorney in fact” for Bank of America without showing that it possessed a valid power of attorney, and
(3) Bank of America did not have authority to assign the note and deed of trust to Bayview because the note and deed of trust were owned by the Federal Home Loan Mortgage Corporation.
A suit to quiet title is a request to invoke the court’s powers of equity in removing a “cloud” on the plaintiff’s title to the property. Ellis v. Waldrop, 656 S.W.2d 902, 905 (Tex. 1983). To quiet title in his favor, a plaintiff “must allege right, title, or ownership in himself . . . with sufficient certainty to enable the court to see he . . . has a right of ownership that will warrant judicial interference.” Turner v. AmericaHomeKey Inc., 514 F. App’x 513, 516 (5th Cir. 2013) (per curiam) (unpublished) (citing Wright v. Matthews, 26 S.W.3d 575, 578 (Tex. App.—Beaumont 2000, pet. denied)).
Importantly, the plaintiff in a quiet title action must recover on the strength of his title, not on the alleged weakness of the defendant’s title. Fricks v. Hancock, 45 S.W.3d 322, 327 (Tex. App.—Corpus Christi 2001, no pet.).
Notably, Smitherman seeks to support his claim to quiet title with a series of conclusory assertions that he is the alleged rightful owner of the property, and primarily focuses his argument on alleged weaknesses in Bayview’s title.
Smitherman’s approach is insufficient to amount to a viable claim to quiet title. See id. Smitherman acknowledges in his amended complaint that the note and deed of trust on the mortgage were validly executed, and that he has not made a mortgage payment since 2011.
These concessions alone show that he has no sound title to the property. See Smallwood v. Bank of Am. Nat’l Ass’n, 670 F. App’x 333, 334 (5th Cir. 2016) (per curiam) (unpublished). Smitherman “must allege right, title, or ownership in himself . . . with sufficient certainty to enable the court to see he . . . has a right of ownership that will warrant judicial interference.” See Turner, 514 F. App’x at 516 (quotation marks omitted).
The amended complaint “contained no assertions regarding the strength of [his] own title” but rather only discussed the weaknesses of Bayview’s interest in the property. See id.; see also Morlock, L.L.C. v. JP Morgan Chase Bank, N.A., 586 F. App’x 631, 633 (5th Cir. 2013)(per curiam) (unpublished) (“[T]he plaintiff has the burden of supplying the proof necessary to establish superior equity and right to relief.”) (emphasis in original).
Moreover, in Reinagel v. Deutsche Bank National Trust Co., this court held that the plaintiffs’ challenge to the validity of the assignment failed because they did not plead facts to support allegations that an unauthorized individual executed an assignment as an “authorized agent” and an “attorney in fact” for a corporation. See 735 F.3d 220, 226 (5th Cir. 2013).
This court additionally held that the plaintiffs could not challenge an assignment for being void that was alleged to be fraudulently executed on behalf of a corporation. Id. The alleged unauthorized assignment was deemed to be “not void, but merely voidable” at the election of the defrauded principal. Id.
Similar to the plaintiffs in Reinagel, Smitherman failed to plead facts that proved that the individual who executed the assignment on behalf of Bayview as an “attorney in fact” lacked authority to execute the assignment. See id.
Even if it was accepted as true that Bayview fraudulently misrepresented the scope of its authority, Smitherman cannot challenge the assignment as void. See id.
In sum, the district court was correct to dismiss Smitherman’s claim to quiet title.
Before STEWART, Chief Justice, HAYNES, and WILLETT
The issues relating to the injunctive relief in this appeal are moot because Bayview has already foreclosed upon the home and sold the property to a third party.
See Pollett v. Aurora Loan Servs., 455 F. App’x 413, 415 (5th Cir. 2011) (per curiam) (unpublished) (citing Marilyn T., Inc. v. Evans, 803 F.2d 1383, 1384-85 (5th Cir. 1986)).
Smitherman’s argument that the district court erred in issuing the injunction prohibiting him from interfering with Bayview’s foreclosure sale is also rendered moot because the foreclosure sale has taken place.
“Ordinarily, an appeal will be moot when the property underlying the dispute has been sold at a foreclosure sale because this court cannot fashion adequate relief, i.e., cannot reverse the transaction.”
Dick v. Colorado Hous. Enters., L.L.C., 872 F.3d 709, 711 (5th Cir. 2017) (per curiam) (quoting Christopher Village, Ltd. P’ship v. Retsinas, 190 F.3d 310, 314 (5th Cir. 1999)).
“No order of this court could affect the parties’ rights with respect to the injunction[s] we are called upon to review.”
NCNB Tex. Nat’l Bank v. Southwold Assoc., 909 F.2d 128, 129 (5th Cir. 1990).
Accordingly, we dismiss all issues relating to injunctive relief as moot.
Smitherman additionally sought over ten declarations relating to Bayview’s foreclosure on the property.
Because Smitherman’s wrongful foreclosure and quiet title claims fail, he is not entitled to declaratory relief.
Although Smitherman’s amended complaint stated two independent causes of action along with his requests for declaratory judgments, “the latter ground is merely a theory of recovery for the former.”
See Sid Richardson Carbon & Gasoline Co. v. Interenergy Res., Ltd., 99 F.3d 746, 752 n.3 (5th Cir. 1996) (citing the Texas Uniform Declaratory Judgments Act).
The Declaratory Judgment Act, which authorizes a federal court to “declare the rights and other legal relations of any interested party seeking such declaration,” is merely a procedural device and does not create any substantive rights or causes of action.
See 28 U.S.C. § 2201(a); Harris Cty., Tex. v. MERSCORP Inc., 791 F.3d 545, 552 (5th Cir. 2015); Okpalobi v. Foster, 244 F.3d 405, 423 n.31 (5th Cir. 2001) (en banc)
(“[A]lthough the Declaratory Judgment Act provides a remedy different from an injunction—it does not provide an additional cause of action with respect to the underlying claim.”).
Accordingly, because Smitherman asserted no viable cause of action against Bayview, the district court properly dismissed his requests for declaratory relief.
See Harris Cty., 791 F.3d at 552; see also Smallwood, 670 F. App’x at 334
(affirming for reasons given by the magistrate judge, which included that the plaintiffs’ requests for declaratory relief should be dismissed because of there not being any relief under the Declaratory Judgment Act).
Smitherman additionally argues that the district court erred in failing to grant his motion to remand. In addition to asserting there is no diversity jurisdiction, Smitherman contends there is no basis for federal question jurisdiction because he dropped his federal RESPA claims in his amended complaint after the suit’s removal to federal court.
Smitherman’s arguments as to the lack of subject matter jurisdiction are unavailing.
We review the denial of a motion to remand to state court de novo.
Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1336 (5th Cir. 1995).
“Jurisdictional facts are determined at the time of removal, and consequently post-removal events do not affect that properly established jurisdiction.”
Spear Mktg., Inc. v. BancorpSouth Bank, 791 F.3d 586, 592 (5th Cir. 2015) (alterations and quotation marks omitted).
“It is this court’s established precedent that once a case is properly removed, the district court retains jurisdiction even if the federal claims are later dropped or dismissed.”
Id. (emphasis in original).
Because this lawsuit was properly removed to federal court based on federal question jurisdiction being established from Smitherman’s RESPA claims, Smitherman’s subsequent deletion of his RESPA claims in his amended complaint was immaterial.
Smitherman’s wrongful foreclosure claim was properly dismissed. Ordinarily, Texas law recognizes three elements for a wrongful foreclosure claim:
(1) “a defect in the foreclosure sale proceedings;”
(2) “a grossly inadequate selling price;”
and
(3) “a causal connection between the defect and the grossly inadequate selling price.”
Sauceda v. GMAC Mortg. Corp., 268 S.W.3d 135, 139 (Tex. App.—Corpus Christi 2008, no pet.).
“A claim of wrongful foreclosure cannot succeed . . . when no foreclosure has occurred.”
Foster v. Deutsche Nat’l Trust Co., 848 F.3d 403, 406 (5th Cir. 2017) (per curiam).
Additionally, “a party cannot state a viable claim for wrongful foreclosure if the party never lost possession of the Property.”
See id. (quoting James v. Wells Fargo Bank, N.A., 533 F. App’x 444, 446 (5th Cir. 2013) (per curiam) (unpublished) (quotation marks omitted)); see also Filgueira v. U.S. Bank Nat’l Ass’n, 734 F.3d 420, 423 (5th Cir. 2013) (per curiam).
It is undisputed that no foreclosure sale had taken place and Smitherman still resided at the property when the district court entered judgment denying his claim of wrongful foreclosure.
Smitherman even represented on appeal that he still resides at the property.
Because the foreclosure sale had not occurred and Smitherman never lost possession of the property, Smitherman’s wrongful foreclosure claim was premature and properly dismissed.
See Foster, 848 F.3d at 406-07
(“Texas does not recognize an action for attempted wrongful foreclosure.”).
Smitherman v. Bayview Loan Servicing, LLC. (4:16-cv-01927)
District Court, S.D. Texas
Smitherman v. Bayview Loan Servicing, LLC,
No. 16-20328 (5th Cir. Mar. 29, 2017) – Unpublished
D. Patrick Smitherman, proceeding pro se, brought suit against Bayview Loan Servicing, LLC in Texas state court, alleging various state law claims regarding foreclosure proceedings related to Smitherman’s mortgage loan.
Bayview removed to federal court under a diversity jurisdiction theory.
The district court denied Smitherman’s motion to remand and then dismissed Smitherman’s claims with prejudice.
We ordered a limited remand to the district court to permit supplementation of the record and to make findings regarding Bayview’s citizenship.
The district court then issued an order vacating its judgment and remanding the case to state court.
Because the district court lacked the authority to do so, we construe it’s order to be an indicative ruling made pursuant to Federal Rule of Civil Procedure 62.1(a)(3).
Accordingly, we REMAND this case to the district court and DISMISS the appeal as moot and relinquish jurisdiction pursuant to Federal Rule of Appellate Procedure 12.1(b).
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
Smitherman v. Bayview Loan Servicing, LLC. (4:16-cv-01927)
District Court, S.D. Texas
Unraveling the Intricacies of Federal vs. State Jurisdiction
In the ongoing saga of foreclosure proceedings, a pivotal question persists: why are these cases being funneled into federal courts when they are quintessentially state law matters? https://t.co/OnXhuecUcI— lawsinusa (@lawsinusa) February 11, 2024
Court of Appeals Docket #: 16-20560
Docketed: 08/23/2016
Termed: 03/06/2018
Nature of Suit: 3220 Foreclosure
D. Smitherman v. Bayview Loan Servicing, L.L.C.
Appeal From: Southern District of Texas, Houston
Fee Status: Fee Paid
FOURTH LAWSUIT (July 2016 Lawsuit)
Appellee then sought once again to sell the property via non-judicial sale.
The sale was scheduled for July 5, 2016.
Once again Appellant filed a fourth lawsuit on June 30, 2016 to prevent this sale.
This action was again removed to Federal Court where it was issued cause No. 4:16-cv-1927.
Again, one issue raised by Appellant was whether he was provided with proper notice of default based on the same March 2011 letter as the prior four suits.
Upon removal the case was assigned again to Judge Lynn N. Hughes who conducted a conference on July 19, 2016.
After a lengthy hearing on all pending matters before the court, Judge Hughes issued orders on July 25, 2016
1) Denying Remand (ROA. 346),
2) Expunging Lis Pendens (ROA. 347),
3) Providing Injunctive Relief (ROA. 407),
and
4) Order of Dismissal (ROA. 410)
SALE OF PROPERTY
On August 2, 2016, the property was sold to a third party at public auction via a substitute trustee’s sale.
Issue 5: Whether the district court erred in entering the injunction.
Appellant argues that the District Court erred in entering an injunction that prevented Appellant from interfering with the August 2, 2016 sale.
Similar to his complaint about the lis pendens, whether or not the injunction was properly entered is of no consequence at this point.
The injunction sought to prevent Appellant from disturbing the August 2016 sale date, and if Bayview were to have purchased the property at sale, prevent Appellant from contesting eviction proceedings.
The property was sold to a third party.
Bayview is not, as it cannot, seeking [SIC] to evict Appellant.
There no longer remains any injunction.
Remanding the case on this issue as Appellant requests would be of no value to either party as the injunction expired upon the sale of the Property to a third party.
This issue is moot.
Issue 6: Whether the August 2, 2016 foreclosure was barred by limitations.
Appellant did not properly raise a claim that the foreclosure was barred by statute of limitations.
While Appellant’s amended petition asserted numerous theories for why declaratory judgment should be rendered in his favor, he had only two identifiable causes of action as discussed above
1) wrongful foreclosure,
and
1) suit to quiet title.
“The court will not allow a party to raise an issue for the first time on appeal merely because a party believes that he might prevail if given the opportunity to try a case again on a different theory.”
Leverette v. Louisville Ladder Co., 183 F.3d 339, 342 (5th Cir. 1999).
In any event, there is no dispute between the Parties that the original acceleration occurred on July 19, 2011.
There is no dispute that Texas Civil Practice & Remedies Code §16.035 describes a four year statute of limitations in which to sell the property or bring suit for judicial foreclosure.
Appellant avers that the statute of limitations ran when there was no rescission or abandonment prior to July 19, 2015.
However, as noted by Appellant a rescission of acceleration was sent to Appellant on July 17, 2015.
The rescission of acceleration is not on file with this case, but is on file in a contemporaneous appeal of the Third Lawsuit (ROA. 16- 20328.36) and was reviewed by the District Court at the July 19, 2016 hearing as shown by the transcript (ROA. 471, ln. 25 to 472 ln. 1-16.)
(actually two notice of rescission were sent to Appellant as discussed on the record, one with “Unit E” and one without “Unit E”. (ROA. 472 ln. 25 – 473 ln. 1-7.)
As shown by that document, the rescission letter was sent on behalf of the mortgagee and lienholder at the time, Bank of America, N.A. Pursuant to Texas Civil Practice & Remedies Code §16.038(b), a unilateral rescission such as this is effective when written notice is provided by the lienholder.
See also, Boren v. U.S. Nat. Bank Ass’n, 807 F.3d 99 (5th Cir. 2015) (discussing §16.038).
Appellant while admitting to the existence of the rescission letter argues that it was impossible for Bank of America to rescind the acceleration via the July 17, 2015 letter, as it had transferred servicing rights to Bayview on July 16, 2015.
Appellant is not recognizing that while Bayview may have been the servicer on July 17, 2015, Bank of America was still the lienholder on that date, and remained so until the loan was assigned to Bayview in December of 2015. (ROA. 65).
See also, discussion on the record that the notice of rescission were sent on July 17 (2016) and the assignment did not occur until December 2015.
(ROA. 471 ln. 25 to 472 ln. 1-6.)
Therefore Appellant’s argument that Bank of America was no longer the servicer at the time the rescission letter was sent is of no importance.
Bank of America was still the mortgagee and lienholder, and the rescission letter was proper and effective to rescind acceleration.
In addition, Appellant attached to his own original complaint a Reinstatement letter that was sent to him on May 1, 2015.
(ROA. 120).
This letter operates as an abandonment of the prior acceleration. The letter advises Appellant with what is required to reinstate his loan, and provides him with an amount to pay to reinstate the loan ($103,680.41) which is less than the full amount due and owing.
“A lender…put[s] the debtor on notice of its abandonment of acceleration by requesting payment on less than the full amount of the loan.”
See, Leonard v. Ocwen Loan Servicing, LLC 616 Fed.Appx 677, 680 (5th Cir. 2015).
(holding that the lender properly abandoned acceleration, in part, by sending a new notice of default demanding payment not for the full amount, but for the past due sums.
By its actions in offering Appellant the opportunity to reinstate his note, rather than demanding the full balance due, Bank of America effectively abandoned acceleration on May 1, 2015, more than a year before the statute of limitations would have run.
In either event the original acceleration was properly rescinded, and this issue, even if the court were to consider it properly raised, is moot.
CONCLUSION
The Property that Appellant sought to enjoin from sale was sold at a public Auction on August 2, 2016.
Accordingly, Appellant’s appeal is moot and the court is without the ability to provide Appellant with the relief he seeks. Further, the Court did not err in entering its orders or dismissing Appellant’s case.
For these reasons, Appellant should be denied the relief he seeks and the underlying judgment affirmed.
Respectfully submitted,
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| D. Patrick Smitherman,
Plaintiff – Appellant v. Bayview Loan Servicing, L.L.C., Defendant – Appellee |
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| 5th Circuit – Appellate – 04/16/2024 13:14:04 |
Court of Appeals Docket #: 16-20328
Docketed: 05/26/2016
Termed: 03/29/2017
Nature of Suit: 4220 Foreclosure
D. Smitherman v. Bayview Loan Servicing, L.L.C.
Appeal From: Southern District of Texas, Houston
Fee Status: Fee Paid
SUMMARY OF THE ARGUMENT
Appellant‟s claims in the underlying action are moot.
Appellant‟s second lawsuit, the 2014 Lawsuit, asserted claims that he did not receive proper notice of default, specifically arguing that a March 2011 Notice of Default was ineffective to provide him with proper notice and that he was entitled to damages, among other things for force placed insurance.
Those same claims was made by Appellant in the underlying case.
On May 31, 2016 Appellant dismissed the 2014 Lawsuit, with prejudice.
Accordingly, Appellant is barred from asserting any claims that he had or could have asserted against Appellee related to the 2014 Lawsuit.
The Property at issue was subsequently sold at a foreclosure sale on August 2, 2016.
The only claim Appellant could make in regard to the foreclosure sale of the Property is a claim for wrongful foreclosure, but by dismissing his 2014 Lawsuit, he has acquiesced to the validity of the March 2011 Notice of Default.
Therefore, Appellants claims in the underlying case, and any future action, is moot.
The District Court was within its inherent authority, after looking at the prior lawsuits filed by Appellant and upon a conference with the parties to discuss the case and pending motion to dismiss, that the dismissal of the 2011 lawsuit operated as res judicata and that Plaintiff failed to state any viable claims.
The District court did not err in denying remand by finding that the amount in controversy exceeded $75,000.00.
ARGUMENT AND AUTHORITIES
Mootness Doctrine
The majority of Appellant‟s claims in the underlying case were premised on alleged issues with force placed insurance policy issued by the prior servicer Bank of America.
These are substantially similar to the claims asserted by Appellant in the 2014 Lawsuit.
As shown in Appellee‟s motion to dismiss, Appellant was a member of a class action suit, failed to opt out, and as a result was bound by the class action settlement.
(ROA.177-180).
Per the Class Action Settlement, any class member who did not opt out was permanently barred from filing or continuing any lawsuit.
(ROA.179),
See also, Hall v. Bank of America, N.A. 1:12-cv-2270, Southern District of Florida [Doc. 443, p. 25].
The settlement order further decreed that any claims that a borrower may have in regard to force placed insurance must be dismissed with prejudice.
(ROA. 180.)
As shown by Appellant‟s own brief, and attached Ex.1, Appellant did just that, and dismissed the 2014 Lawsuit that included these same claims.
Accordingly, any claims regarding force placed insurance presented in this case are moot.
That leaves Appellant with the following claims
1) declaratory judgment
2) breach of contract for lack of notice of default
3) breach of Rule 11 agreement
and
4) Defamation.
These claims are discussed independently below in regard to failure to state a viable claim.
However, the lack of notice of default and Rule 11 claims are also moot.
Appellant‟s 2014 lawsuit asserted a claim for lack of notice, asserting that the March 2011 Notice of Default was improper.
These same claims were asserted both in this case and the June 2016 Lawsuit that came after this case.
As Appellant dismissed the 2014 Lawsuit with prejudice, he has equally dismissed those claims from the current case as he would be now barred by res judicata from arguing that the March 2011 Notice of Default was not proper.
Appellant admits as much in his brief when he argued that res judicata didn’t attached because “there was no final judgment in the Second Foreclosure Litigation at the time the Final Judgment was entered by the district court on April 26, 2016.”
(Appellant‟s Brief, page 27.)
However, there is a final judgment now, which results in such claims now being moot before the appellate court.
In regard to the Rule 11 claim, even though as argued by Appellee it was inapplicable to it, the plain language of the agreement was that it terminated upon the case being disposed.
(ROA.38).
Accordingly, as the 2014 Lawsuit was disposed by Appellant‟s own motion, the Rule 11 was disposed and is now moot.
Further, the Property in question was sold to a third party at a foreclosure sale on August 2, 2016.
“If the debtor fails to obtain a stay, and if the property is sold in the interim, the district court will ordinarily be unable to grant any relief. Accordingly, the appeal will be moot.”
See, Matter of Sullivan Cent. Plaza I, Ltd. 914 F2d 731 (5th Cir. 1990).
Appellant petitioned this court for a stay, which was denied.
Appellant did not seek any particular measure of monetary damages in the underlying case.
Appellant sought both temporary and permanent injunctive relief.
As the property was already sold such relief is unavailable to Appellant and there is no effective relief which this court can grant Appellant even if he were to prevail.
Accordingly, this matter and all claims are moot and must be dismissed.
Issue 1: Whether the district court erred in granting the Defendant- Appellee’s Rule 12(b)(6) motion based on an affirmative defense of res judicata.
Appellant complains that it was improper for the court to dismiss his claims based on res judicata, asserting that res judicata was not raised in Appellee‟s motion to dismiss.
First, district courts have the inherent authority to dismiss a pro se litigant‟s frivolous or malicious complaint sua sponte.
Odeh v. Fish, 2011 WL 4424400 (N.D. Tex., 2011) citing authority from sister circuits.
The Supreme Court has also stated, in dicta, that federal courts have the inherent authority to dismiss such lawsuits.
See, Mallard v. United States District Court for the Southern District of Iowa, 490 U.S. 296, 307-308, 109 S.Ct. 1814, 104 L.Ed2d 318 (1989).
(“Statutory provisions may simply codify existing rights or powers. [28 U.S.C. §] 1915(d), for example authorizes courts to dismiss a „frivilous or malicious action,‟ but there is little doubt they would have power to do so even in the absence of this statutory provision.”)
Appellant complains that such a sua sponte dismissal is improper because he was not provided with an opportunity to be heard.
Appellant however fails to inform the court that the court conducted an in person conference to discuss the case and pending motions on April 20, 2016 (ROA. 216 and 217).
As shown by these documents, the conference lasted at least 35 minutes.
For unknown reasons, Appellant decided to not request a copy of the transcript be included with this appeal.
During this conference the Court discussed with counsel the pending motion to dismiss, motion to remand, the declaratory relief sought by Appellant, the equitable claims for relief sought by Appellant, the prior lawsuits filed by Appellant and the general facts, evidence and issues before the court.
The District Court could easily discern from the pleadings on file, public records available to the Court, and discussion with counsel that in the prior 2011 lawsuit Appellant alleged that he was not provided notice of default.
Appellant asserted in the 2011 lawsuit that the March 2011 notice of default provided to him by then mortgagee Bank of America was insufficient to put him on notice that he was in default of his mortgage obligations.
The court in the 2011 case dismissed Appellant’s claims, with prejudice.
That means that Appellant could not in the future raise any issues regarding the March 2011 notice of default and argue that it constituted lack of notice in any subsequent proceeding.
Bayview as the successor mortgagee was in privity with Bank of America and res judicata would attach.
After discussing these issues the District Court issued an order dismissing Bayview Loan Servicing (the mortgage servicing division of Appellee) as an unnecessary party, denied remand, and informed Appellant that he had until April 26, 2016 to file his response to the motion to dismiss.
(ROA.217).
Appellant could have also sought to amend his pleadings to address the concerns the Court raised during the conference, but he did not.
Appellant had notice from the court pursuant to the April 20, 2016 conference that the court intended to dismiss Appellant‟s case in whole or in part.
Appellant was provided the opportunity to respond at the conference and file a response, motion or amended pleading afterwards.
He did not.
This meets the threshold provided for a sua sponte dismissal as provided by Tingler v. Marshall 716 F.2d 1109 (6th Cir. 1983) as cited by Appellant.
As a result of this conference, the Court was within its inherent authority to determine that the prior dismissal of the 2011 lawsuit operated as res judicata.
Accordingly, the District Court did not err in finding that res judicata applied in this case.
Further, without relying on res judicata, the decision of the District Court was sound as Appellant failed to state a viable claim as discussed below.
Issue 2: Whether the district court erred in granting the Defendant- Appellee’s Rule 12(b)(6) motion for failure to state a claim.
Declaratory Judgment
Appellant complains that his request for declaratory judgment was denied or not properly considered.
However, the Federal Declaratory Judgment Act is an enabling act which is procedural only.
See, Hockessin Holdings, Inc. v. Ocwen Loan Servicing, LLC 2016 WL 247727, at *5 (W.D. Tex, 2016).
To invoke relief under the Act a party must have an underlying and viable cause of action.
Id. See also, Reid v. Aransas Cnty. 805 F.Supp.2nd 322, 339 (S.D.Tex. 2011)
holding that a party cannot use the Act upon failure to state the existence of a judicially remediable right.
As the District Court found that his case lacked merit, there were no viable causes of action and Appellant was not entitled to declaratory relief.
Breach of Rule 11 Agreement
Appellant complains that he had a Rule 11 Agreement, per Texas Rule of Civil Procedure 11, with the prior mortgagee Bank of America as part of the 2014 Lawsuit which agreed that it would not foreclose on the Property until that case was disposed.
As the District Court correctly held, Appellant may have had an agreement with Bank of America, but did not have an agreement with Bayview, nor Bayview‟s counsel.
The Rule 11 agreement did not bind Bayview.
Further, this issue is moot as Appellant dismissed the 2014 lawsuit, with prejudice, on May 31, 2016.
See Appellant‟s Brief, page 9 and attached Ex. 1.
The Court did not err in making this finding.
Defamation
Appellant‟s complaint asserts that “[D]efendants grossly misrepresented whether Plaintiff could make his mortgage payments by instituting foreclosure proceedings without first giving the Plaintiff the benefit of a default notice, and did so knowing a Rule 11 agreement prohibited such a foreclosure.”
(ROA 25-26).
As discussed above, there was no valid Rule 11 agreement between Appellant and Appellee. Appellant‟s brief further states that the Court must take his pleadings as true and find that he was not in default because he never admitted in his complaint that he was in default.
He also never admitted in his complaint that he was current on his loan.
He complained only that he was not provided notice of default.
Further, “it is clearly proper in deciding a 12(b)(6) motion to take judicial notice of matters of public record.”
Norris v. Hearst Trust, 500 F.3d 454, 461 n. 9 (5th Cir.2007); Cinel v. Connick, 15 F.3d 1338, 1343 n. 6 (5th Cir.1994).
At the conference that was conducted by the Court the prior lawsuits and appellate decision was specifically relied on by the Court.
Appellant attached a copy of the appeal from the 2011 Lawsuit as an addendum to his brief, in which the court notes that Appellant has admittedly not paid property taxes since 2010 and had not made a mortgage payment since 2011.
See, Appellant Brief, attachment A5 – Opinion of the 14th Court of Appeals.
Appellant was admittedly in default since 2011.
Accordingly, as the District Court held, publication of a fact does not constitute defamation and there is no error.
Force Placed Insurance
Appellant asserts that he had a valid claim regarding force placed insurance that was put in place by the prior mortgagee Bank of America.
This was also the basis of the 2014 Lawsuit.
As noted above, Appellant dismissed the 2014 lawsuit with prejudice on May 31, 2016.
Accordingly, res judicata would render this claim moot.
Further, as noted in Appellee‟s motion to dismiss, Appellant was a member of a class action lawsuit regarding lender placed insurance Bank of America.
(ROA.177-180).
As a member of the defined Settlement Class, Appellant was to dismiss with prejudice all claims or actions that have been brought in regard to the issue of forced place insurance. Id.
As noted above, on May 31, 2016 Appellant did just that.
See, Ex. 1.
As argued by Appellee in its motion to dismiss, any claims that Appellant had regarding force placed insurance are specifically barred by the settlement agreement.
Accordingly, the District Court did not err in finding that there was no valid claims in regard to force placed insurance.
Issue 3: Whether the district court erred in denying the Motion for Remand.
Appellant argues that the court erred in denying the motion to remand because the amount in controversy did not exceed $75,000.00.
Appellee attached to its motion to remove a copy of the Harris County Property Appraisal District‟s valuation which listed the value at the time of filing at $356,338.00.
(ROA.168).
In an action for injunctive relief, the amount in controversy is the value of the object of the litigation.
See, Leininger v. Leininger, 705 F.2d 727, 729 (5th Circ. 1983.)
See also, Nationstar Mortg. LLC v. Knox, 351 Fed.Appx. 844, 2009 WL 2605356 (5th Cir. 2009).
Accordingly, the District Court did not err in denying remand.
CONCLUSION
The Property that Appellant sought to enjoin from sale was sold at a public Auction on August 2, 2016.
Accordingly, Appellant‟s appeal is moot and the court is without the ability to provide Appellant with the relief he seeks.
For these reasons, Appellant should be denied the relief he seeks and the underlying judgment affirmed.
Respectfully submitted,
| General Docket United States Court of Appeals for the Fifth Circuit |
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| D. PATRICK SMITHERMAN,
Plaintiff – Appellant v. BAYVIEW LOAN SERVICING, L.L.C., Defendants – Appellees |
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| 5th Circuit – Appellate – 04/16/2024 10:54:07 |
Coming up on LIT: Shocking facts and case studies on the current criminal activity endorsed by the US Gov for implementation by Federal Judges and Wall Street’s Creditor Rights lawyers. Truth that will shake American homeowners to the core. Stay tuned. #TruthRevealed #USJustice pic.twitter.com/3TBxGtLIgm
— lawsinusa (@lawsinusa) February 9, 2024
INJUNCTION.
This injunction was rendered in open court on 7/19/2016.
The injunction is effective when Bayview deposits $1,000.00 in the court’s registry.
(Signed by Judge Lynn N Hughes) Parties notified. (ghassan, 4) (Entered: 07/26/2016)
U.S. District Court
SOUTHERN DISTRICT OF TEXAS (Houston)
CIVIL DOCKET FOR CASE #: 4:16-cv-01927
| Smitherman v. Bayview Loan Servicing, LLC. Assigned to: Judge Lynn N Hughes Cause: 28:1446 Notice of Removal |
Date Filed: 06/30/2016 Date Terminated: 07/25/2016 Jury Demand: None Nature of Suit: 220 Real Property: Foreclosure Jurisdiction: Federal Question |
| Plaintiff | ||
| D. Patrick Smitherman | represented by | D. Patrick Smitherman 1044 W. 25th Street #E Houston, TX 77008 832-712-1842 PRO SE |
| V. | ||
| Defendant | ||
| Bayview Loan Servicing, LLC. | represented by | Mark Daniel Hopkins Hopkins Law, PLLC 3 Lakeway Centre Ct. Suite 110 Austin, TX 78734 512-600-4320 Email: mark@hopkinslawtexas.com LEAD ATTORNEY ATTORNEY TO BE NOTICEDShelley L. Hopkins Hopkins Law, PLLC 3 Lakeway Centre Ct. Suite 110 Austin, TX 78734 512-600-4320 Email: shelley@hopkinslawtexas.com ATTORNEY TO BE NOTICEDMichael Clifton Maus Lisa Chastain & Associates 811 Louisiana, Suite 2400 Houston, TX 77002 713-336-2842 Fax: 877-684-4165 Email: michael.maus@allstate.com ATTORNEY TO BE NOTICED |
| Date Filed | # | Docket Text |
|---|---|---|
| 06/30/2016 | 1 | NOTICE OF REMOVAL from 269th District Court, Harris County, case number 2016-44024 (Filing fee $ 400 receipt number 0541-16885122) filed by Bayview Loan Servicing, LLC.. (Attachments: # 1 Exhibit A Index of Matters, # 2 Exhibit B Docket Sheet, # 3 Exhibit C Court Documents, # 4 Exhibit D Notice to State Court, # 5 Exhibit E Disclosure, # 6 Exhibit F Counsel of Record, # 7 Exhibit G CAD)(Maus, Michael) (Entered: 06/30/2016) |
| 06/30/2016 | 2 | NOTICE OF RELATED ACTION re: 1 Notice of Removal, by Bayview Loan Servicing, LLC., filed. (Maus, Michael) (Entered: 06/30/2016) |
| 07/01/2016 | 3 | ORDER for Initial Pretrial and Scheduling Conference and Order to Disclose Interested Persons. Initial Conference set for 8/26/2016 at 09:00 AM in Courtroom 8B before Judge Alfred H Bennett(Signed by Judge Alfred H Bennett) Parties notified.(smurdock, 4) (Entered: 07/01/2016) |
| 07/05/2016 | 4 | TRANSFER ORDER. Case reassigned to Judge Lynn N Hughes for all further proceedings. Judge Alfred H Bennett no longer assigned to the case(Signed by Judge Alfred H Bennett) Parties notified.(jguajardo, 4) (Entered: 07/06/2016) |
| 07/07/2016 | 5 | Order: Initial Conference set for 7/19/2016 at 10:00 AM in Room 11122 before Judge Lynn N Hughes. (Signed by Judge Lynn N Hughes) Parties notified. (ghassan, 4) (Entered: 07/07/2016) |
| 07/08/2016 | 7 | MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM by Bayview Loan Servicing, LLC., filed. Motion Docket Date 7/29/2016. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Proposed Order Expunging Lis Pendens)(Maus, Michael) (Entered: 07/08/2016) |
| 07/14/2016 | 10 | MOTION to Remand by D. Patrick Smitherman, filed. Motion Docket Date 8/4/2016. (hler, 4) (Entered: 07/19/2016) |
| 07/15/2016 | 16 | VERIFIED AMENDED ORIGINAL PETITION against Bayview Loan Servicing, LLC. filed by D. Patrick Smitherman.(amireles, 2) Clerk Notes: pleading is not signed properly. (Entered: 07/20/2016) |
| 07/18/2016 | 8 | RESPONSE to 7 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM filed by D. Patrick Smitherman. (mmapps, 4) (Entered: 07/18/2016) |
| 07/18/2016 | 9 | Second MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM AND RESPONSE TO PLAINTIFF’S MOTION TO REMAND by Bayview Loan Servicing, LLC., filed. Motion Docket Date 8/8/2016. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Proposed Order)(Maus, Michael) (Entered: 07/18/2016) |
| 07/19/2016 | 11 | RESPONSE to 9 Second MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM AND RESPONSE TO PLAINTIFF’S MOTION TO REMAND, filed by D. Patrick Smitherman. (thanniable, 4) (Entered: 07/19/2016) |
| 07/19/2016 | 12 | First AMENDED NOTICE OF REMOVAL against Bayview Loan Servicing, LLC. filed by D. Patrick Smitherman.(hler, 4) (Entered: 07/19/2016) |
| 07/19/2016 | 13 | Minute Entry for INITIAL CONFERENCE held before Judge Lynn N Hughes on 7/19/2016. Order to be entered. Appearances: D. Patrick Smitherman, Michael Clifton Maus. (Court Reporter: M. Malone) (ghassan, 4) (Entered: 07/19/2016) |
| 07/19/2016 | 14 | ORDER Denying Remand. Smitherman’s motion to remand is denied 10 . (Signed by Judge Lynn N Hughes) Parties notified. (ghassan, 4) (Entered: 07/20/2016) |
| 07/19/2016 | 15 | ORDER Expunging Lis Pendens. The notice of lis pendens filed 7/1/2016 and 7/5/2016 are expunged when a certified copy of this order has been recorded in the real property records of Harris County, Texas. (Signed by Judge Lynn N Hughes) Parties notified. (ghassan, 4) (Entered: 07/20/2016) |
| 07/25/2016 | 17 | INJUNCTION. This injunction was rendered in open court on 7/19/2016. The injunction is effective when Bayview deposits $1,000.00 in the court’s registry. (Signed by Judge Lynn N Hughes) Parties notified. (ghassan, 4) (Entered: 07/26/2016) |
| 07/25/2016 | 18 | ORDER OF DISMISSAL terminating 7 , 9 . Smitherman’s claims against Bayview are dismissed because each is barred by res judicata and, even if they were not barred, he fails to state a claim upon which relief can be granted. Case terminated on 7/25/2016. (Signed by Judge Lynn N Hughes) Parties notified. (ghassan, 4) (Entered: 07/26/2016) |
| 08/22/2016 | 19 | NOTICE OF APPEAL to US Court of Appeals for the Fifth Circuit re: 18 Order of Dismissal, by D. Patrick Smitherman, filed.(gclair, 4) (Entered: 08/22/2016) |
| 08/22/2016 | 20 | STATEMENT of Issues on Appeal by D. Patrick Smitherman, filed.(gclair, 4) (Entered: 08/23/2016) |
| 08/23/2016 | 21 | Clerks Notice of Filing of an Appeal. The following Notice of Appeal and related motions are pending in the District Court: 19 Notice of Appeal. Fee status: Paid. Reporter(s): M. Malone, filed. (Attachments: # 1 Notice of Appeal, # 2 Order on Dismissal, # 3 Docket Sheet) (scastillo, 1) (Entered: 08/24/2016) |
| 08/29/2016 | 22 | MOTION for Release of Funds by Bayview Loan Servicing, LLC., filed. Motion Docket Date 9/19/2016. (Attachments: # 1 Proposed Order)(Maus, Michael) (Additional attachment(s) added on 8/29/2016: # 2 Proposed Order Reviewed by Finance) (knguyen, 4). (Entered: 08/29/2016) |
| 08/29/2016 | 23 | ORDER granting 22 Motion for Release of Funds. (Signed by Judge Lynn N Hughes) Parties notified. (wbostic, 4) (Entered: 08/29/2016) |
| 08/30/2016 | 24 | RESPONSE to 22 MOTION for Release of Funds, filed by D. Patrick Smitherman. (mmapps, 4) (Entered: 08/30/2016) |
| 09/02/2016 | 25 | DKT13 TRANSCRIPT ORDER REQUEST by David Patrick Smitherman. Transcript is unnecessary for appeal purposes This order form relates to the following: 19 Notice of Appeal, filed.(smurdock, 4) (Entered: 09/02/2016) |
| 09/06/2016 | 26 | MOTION Motion to Require Plaintiff to Order Transcript for Appellate Record by Bayview Loan Servicing, LLC., filed. Motion Docket Date 9/27/2016. (Maus, Michael) (Entered: 09/06/2016) |
| 09/07/2016 | 27 | RESPONSE to 26 MOTION to Require Plaintiff to Order Transcript for Appellate Record, filed by D. Patrick Smitherman. (gclair, 4) (Entered: 09/07/2016) |
| 09/09/2016 | 28 | ORDER. D. Patrick Smitherman and Bayview Loan will each pay one-half of the cost of ordering the 7/19/2016 transcript 26 . (Signed by Judge Lynn N Hughes) Parties notified. (ghassan, 4) (Entered: 09/09/2016) |
| 09/13/2016 | 29 | Transmittal Letter on Appeal re: 19 Notice of Appeal. The electronic record on CD is being sent to D. Patrick Smitherman, appellant via regular mail. (USCA No. 16-20560), filed. (mperez, 1) (Entered: 09/13/2016) |
| 09/27/2016 | 30 | DKT13 TRANSCRIPT ORDER REQUEST by Bayview Loan Seriving, LLC. This is to order a transcript of Court Conference on July 19, 2016 before Judge Hughes. Court Reporter/Transcriber: Mayra Malone. This order form relates to the following: 13 Pretrial Conference, filed.(Maus, Michael) (Entered: 09/27/2016) |
| 10/04/2016 | 31 | APPEAL TRANSCRIPT re Conference held on July 19, 2016 before Judge Lynn N Hughes. Court Reporter/Transcriber Mayra Malone. Ordering Party: Patrick Smitherman and Michael Maus. This transcript relates to the following: 30 Appeal Transcript Request,. Release of Transcript Restriction set for 1/3/2017., filed. (mmalone, ) (Entered: 10/04/2016) |
| 10/05/2016 | 32 | Notice of Filing of Official Transcript as to 31 Transcript – Appeal,. Party notified, filed. (hcarr, 4) (Entered: 10/05/2016) |
| 11/16/2016 | 33 | Transmittal Letter on Appeal re: 19 Notice of Appeal. The supplemental electronic record on CD is being sent to Appellant, D. Patrick Smitherman via regular mail. (USCA No. 16-20560), filed. (bcampos, 1) (Entered: 11/16/2016) |
| 03/29/2017 | 34 | NOTICE of Appearance by Mark D. Hopkins and Shelley L. Hopkins on behalf of Bayview Loan Servicing, LLC., filed. (Hopkins, Mark) (Entered: 03/29/2017) |
| 03/28/2018 | 35 | Order of USCA – JUDGMENT; Judgment issued as mandate 3/28/2018 re: 19 Notice of Appeal ; USCA No. 16-20560. the judgment of the district court is affirmed, filed.(dnoriega, 1) (Entered: 03/28/2018) |
| 03/28/2018 | 36 | Order of USCA – PER CURIAM re: 19 Notice of Appeal ; USCA No. 16-20560. the judgment of the district court is affirmed, filed.(dnoriega, 1) (Entered: 03/28/2018) |
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| 02/27/2024 13:31:22 |
Beck Redden Partner Constance Pfeiffer’s lengthy tenure at David Beck’s boutique law firm embedded into the @SupremeCourt_TX, was quickly terminated after this statement in federal court, callin’ out the corrupt 5th Cir. https://t.co/wUYKNwL1P2 pic.twitter.com/DjTBxTbZcn
— lawsinusa (@lawsinusa) February 23, 2024
DEFENDANT’S SECOND RULE 12(B)(6) MOTION TO DISMISS AND RESPONSE TO PLAINTIFF’S MOTION TO REMAND
Document 9 – Filed on 07/18/16
Defendant, BAYVIEW LOAN SERVICING, LLC files its Second Motion to Dismiss and Response to Motion to Remand and respectfully shows the court as follows:
RELIEF REQUESTED
1. Bayview moves this Court to dismiss Plaintiff’s claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure as Plaintiff’s Petition fails to state a claim on which relief can be granted.
Bayview further moves for injunctive relief pursuant to the All Writs Act, an order removal Lis Pendens, and further moves the court to deny Plaintiff’s motion for remand.
RECENT FILING HISTORY
2. The pro se Plaintiff recently served upon Defendant’s counsel via e-mail a Motion to Remand (dated July 14, 2016) an Amended Petition (dated July 15, 2016) and Plaintiff’s Response to Motion to Dismiss (dated July 18, 2016).
As Plaintiff is pro se these documents were not electronically filed.
At the time of filing of this pleading, only Plaintiff’s Response to the Motion to Dismiss [Doc. 8] had been scanned into the court’s system.
3. In the event that the court were to allow the amended petition, then Bayview’s motion to dismiss [Doc. 7] would be rendered moot.
Likewise, Plaintiff’s Response [Doc. 8] would also be moot.
Thus, Bayview files the current motion with the court, which is substantially similar to its prior motion as Plaintiff has primarily amended to remove RESPA claims in attempt to avoid the jurisdiction of this court.
FACTUAL BACKGROUND
4. This is the fourth lawsuit (plus related appeals) in the last 5 years filed by Plaintiff D. Patrick Smitherman to frustrate and prevent an otherwise lawful foreclosure of his Property.
5. Plaintiff has failed to make any payment on his loan agreement in over 5 years while this litigation has continued.
As he admitted to this court previously, no payment has been made on the loan since April 2011.
Nor has Plaintiff paid the associated taxes on the property.
The total amount due under the terms of the loan agreement exceeds $269,000.00.
First Lawsuit
6. In August of 2011 Plaintiff filed his first suit seeking to prevent foreclosure – Cause No. 2011-47746; D. Patrick Smitherman v. Bank of America, NA; In the 270th District Court of Harris County, Texas.1
Bank of America was the prior mortgagee on the loan agreement.
Faced with a September 6, 2011 pending foreclosure sale date, Plaintiff filed suit on August 12, 2011.
7. Plaintiff asserted numerous claims, including claiming that the March 2011 notice of default was not valid or otherwise improper.
See, Ex. 1 which includes a copy of the original petition, judgment and Court of Appeals Order.
1 Bayview asks that the court take judicial notice of the lawsuits referenced herein and the Exhibits attached hereto pursuant to FRE 201.
The court may consider documents attached or incorporated in the complaint and matters of which judicial notice may be taken without converting a 12(b)(6) motion into a motion for summary judgment.
Norris v. Hearst Trust, 500 F.3d 454, 461 (5th Cir. 2007); Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498-99 (5thCir. 2005).
8. This case was resolved on March 15, 2014 by the Hon. Judge Brent Gamble when he signed an Order that ended with the words “all claims asserted by plaintiff in the above entitled action is hereby DISMISSED WITH PREJUDICE.” (emphasis in original.)
9. Mr. Smitherman appealed this dismissal to the Fourteenth Court of Appeals under Cause No. 14-14-00550-CV where the judgment was affirmed by an opinion issued April 7, 2015.
Quizzically, Plaintiff maintains that res judicata did not attached to this dismissal as it was allegedly to damages only.
The plain wording of the Courts’ order, which was affirmed as noted above, clearly stated that “all claims” were dismissed with prejudice.
Second Lawsuit
10. After the trial court dismissed the first action, and while the appeal proceeded, Mr. Smitherman filed a second lawsuit against Bank of America in Harris County under Cause No. 2014-42122.
This time he filed suit on July 23, 2014 to prevent a scheduled an August 5, 2014 sale date.
11. Like his first suit, Plaintiff also asserted that he was not provided proper notice of default, claiming again that the March 2011 notice was improper. See, Ex. 2.
12. Bank of America obtained a dismissal in this case based on res judicata of the First Lawsuit, which was appealed by Mr. Smitherman again to the Fourteenth Court of Appeals under Cause No. 14-15-001480-CV.
This this time the parties agree to reverse and remand the judgment on December 21, 2015.
13. Mr. Smitherman subsequently dismissed all claims with prejudice on May 31, 2016.
Third Lawsuit
14. On February 22, 2016 Mr. Smitherman filed his third lawsuit, this time to prevent a sale scheduled for March 1, 2016.
This was filed against the current mortgagee Bayview in Harris County under Cause No. 2016-10910.
This was subsequently removed to this court where it was assigned to Hon. Judge Lynn Hughes under 4:16-cv-00798.
15. Again, Plaintiff asserted that the March 2011 notice of default was improper. See, [4:16-cv-00798, Doc. 1-3.]
16. Bayview filed a motion to dismiss, which was granted by an order signed April 28, 2016, dismissing Plaintiff’s claims against Bayview with prejudice.
17. As is his custom, Mr. Smitherman has also appealed this decision. It is currently before the 5th Circuit under Cause No. 16-20328.
Fourth Lawsuit
18. The current lawsuit was filed by Mr. Smitherman on June 30, 2016 to prevent a July 5, 2016 scheduled sale date.
Again, Plaintiff asserts that the March 2011 notice of default was somehow improper.
The property did not go to sale on that date.
STANDARD OF REVIEW
19. The Plaintiff’s Complaint should be dismissed for failure to state a claim upon which relief should be granted under Rule 12(b)(6). In reviewing a Rule 12(b)(6) motion, the court must accept all well-pleaded facts in the complaint as true and view them in the light most favorable to the plaintiff.
Martin K. Eby Const. Co. v. Dallas Area Rapid Transit, 369 F.3d 464,467 (5th Cir. 2004).
“However, conclusory allegations, unwarranted deductions of fact, or legal conclusions masquerading as factual allegations will not suffice to prevent the granting of a motion to dismiss.”
Percival v. American Home Mortgage Corp., 469 F.Supp.2d 409,412 (N.D. Tex. 2007).
A plaintiff “must plead specific facts, not mere conclusional allegations, to avoid dismissal for failure to state a claim.”
Kane Enter. v. MacGregor (USA), Inc., 322 F.3d 371, 374 (5th Cir. 2003).
ARGUMENT AND AUTHORITIES
A. Res Judicata – Federal Law
20. Fifth Circuit precedent stipulates that res judicata can be raised on a motion to dismiss.
See, Clifton v. Waranco, Inc. 53 F.3d 1280 (5th Cir. 1995).
21. Any claims against Bayview that Plaintiff had or may have had prior to the dismissal of his prior Federal lawsuit in this court on April 28, 2016 would be subject to res judicata and Plaintiff would be barred from asserting such claims at this time.
22. Pursuant to FRE 201, Defendant requests that the court take judicial notice of the prior litigation noted above and the documents attached hereto. The court may consider documents attached or incorporated in the complaint and matters of which judicial notice may be taken without converting a 12(b)(6) motion into a motion for summary judgment.
Norris v. Hearst Trust, 500 F.3d 454, 461 (5th Cir. 2007); Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498-99 (5th Cir. 2005).
23. The preclusive effect of a prior federal court judgment is controlled by federal res judicata rules.
See, Agrilectric Power Partners, Ltd. v.. General Electric Co., 20 F.3d 663, 664 (5th Cir. 1994).
Res judicata is appropriate if
1) the parties to both actions are identical
2) the judgment in the first action is rendered by a court of competent jurisdiction
3) the first action concluded with a final judgment on the merits,
and
4) the same claim or cause of action is involved in both suits.
24. Accordingly, any claims that Plaintiff may have regarding the assignment of the loan from Bank of America to Bayview or claims that Bayview was a “non-mortgagee” would be barred by res judicata.
If there were any issues that Plaintiff wished to raise in regard to the assignment, they could have and should have been brought in the prior suit.
In fact, Plaintiff did assert in prior litigation that “Bayview…has provided no proof to Plaintiff that it actually holds the Note and Deed of Trust.”
See, 4:16-cv-00798, Doc. 1-3, page 4, Para. 9.
Therefore, Plaintiff actually raised, or had knowledge of the alleged claim in the prior suit, which was dismissed with prejudice, therefore such claims would be barred by res judicata.
25. Likewise, any claims that Plaintiff would have that he lacked notice of default would be barred by res judicata as the same notice of default that is at issue in this case was at issue in the prior case before this court.
Plaintiff specifically stated in the prior complaint that he did not receive a notice of default.
See, 4:16-cv-00798, Doc. 1-3, page 4, Para. 11.
Again, all claims of Plaintiff, including this one, were dismissed with prejudice and would be barred by res judicata.
B. Res Judicata – State Court Law
26. When asked to give preclusive effect to state court judgments, federal courts turn to the preclusion principles of the state whose jurisdiction is invoked as a bar to further litigation.
See, Wilder Corp. of Delaware, Inc. v. Rural Community Ins. Services, 494 Fed. Appx. 487, 489 (5th Cir. 2012).
Under Texas law, res judicata requires
(1) prior final judgment on the merits by a court of competent jurisdiction.
(2) the same parties in the second action or their privies,
and
(3) claim in the second action that were or could have been raised in the first.
Igal v. Brightstar Info. Tech Grp., Inc., 250 S.W.3d 78,86 (Tex. 2008).
27. As noted above, and as shown by Ex. 1 and 2, Plaintiff previously asserted claims against the prior mortgagee/mortgage servicer Bank of America.
Bayview is in privity with Bank of America as it was assigned all interest in the Note and Deed of trust that is subject of this lawsuit.
See, Warren v. MERS, Inc. 616 Fed.Appx. 735, 737 (5th Cir. 2015)
28. The claims asserted by Plaintiff in both cases asserted that the March 2011 notice of default was not valid or was otherwise improper.
As noted, the First Lawsuit resulted in the Court granting summary judgment and dismissing all claims of Plaintiff with prejudice.
Thus, there was a final judgment on the merits.
29. The second resulted in Plaintiff non-suiting his claims with prejudice.
Res judicata applies to the Plaintiff’s dismissal as a dismissal or non-suit with prejudice is tantamount to a judgment on the merits and thereby works a permanent inalterable change in the legal relationship to the defendant’s benefit and the defendant can never be sued again by the Plaintiff or its privies out of the same subject matter.
See, Arrow Marble, LLC v. Estate of Killion, 441 S.W.3d 702 (Tex.App –Houston [1st Dist.]
30. Accordingly, res judicata from the state court cases would bar Plaintiff from asserting that the March 2011 notice of default was invalid.
C. Wrongful Foreclosure.
31. Plaintiff’s amended complaint asserts a claim for wrongful foreclosure.
32. However, as there has been no foreclosure sale, and there is no valid claim in Texas for “attempted wrongful foreclosure” this claim should be dismissed as moot.
D. Suit To Quite Title
33. Plaintiff’s amended complaint asserts a claim for suit to quiet title. It is well known that a party must recover on the strength of their own claims, not the alleged weakness of the claims of others. See, Turner v. AmeriaHomeKey, Inc. 514 Fed. App’x. 513, 516 (5th Cir. 2013).
Plaintiff has failed to sufficiently plead or otherwise show that he has title superior to the current lienholder.
Plaintiff has merely asserted that the assignment is somehow invalid or void.
However, as shown above, any claims that Plaintiff would have in regard to the assignment of the note and deed of trust would be barred by res judicata as Plaintiff failed to assert these claims in the prior litigation.
34. Further, Plaintiff does not have standing to contest issues with an assignment that render the assignment voidable at the option of the assignor.
Plaintiff has not plead any facts that would show the assignment is void.
Plaintiff has merely asserted that there is a question because Bayview signed an assignment as attorney in fact for Bank of America.
However, Plaintiff has not alleged – let alone pled facts to support – that the individual that signed the assignment lacked authority to sign the assignment or provide any basis for this allegation.
See, also Reinagel v. Deutsche Bank Nat. Trust Co., 735 F.3d 220, 226 (5th Cir. 2013) holding that under similar pleadings, the allegation failed to state a claim by its own terms.
E. Declaratory Judgment request fails
35. The Federal Declaratory Judgment Act provides that “[i]n a case of actual controversy within its jurisdiction…any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration whether or not further relief is or could be sought.”
28 USCA §2201.
36. The Federal Declaratory Judgment Act is an enabling act which is procedural only.
See, Hockessin Holdings, Inc. v. Ocwen Loan Servicing, LLC 2016 WL 247727, at *5 (W.D. Tex, 2016).
To invoke relief under the Act a party must have an underlying and viable cause of action.
Id. See also, Reid v. Aransas Cnty. 805 F.Supp.2nd 322, 339 (S.D.Tex. 2011)
holding that a party cannot use the Act upon failure to state the existence of a judicially remediable right.
37. The declarations that Plaintiff asks the court to make are improper and are not based on any affirmative claims asserted against Movants.
Since Plaintiff’s only claims, a suit to quiet title and wrongful foreclosure are meritless and invalid as a matter of law, Plaintiff has no valid claims.
38. As Plaintiff has failed to allege a viable cause of action, its request for declaratory judgment must fail.
REMOVAL OF LIS PENDENS
39. On July 1, 2016 Plaintiff filed a Notice of Lis Pendens under instrument number RP-2016-287210 in the official real property records of Harris County, Texas.
Plaintiff filed a second Notice of Lis Pendens on July 5, 2016 under instrument number RP-2016-289092.
40. Defendant moves the court to expunge both documents pursuant to §12.0071(c)(2) of the Texas Property code as Plaintiff has failed to establish by a preponderance of the evidence that he has a valid claim against defendant.
Section 12.0071 provides that “the court shall order the notice of lis pendens expunged” if the claimant fails to show that he has a valid claim.
See also, Nguyen v. Federal National Mortgage Association 2015 WL 8207525 (S.D.Tex 2015.)
As show above, Plaintiff has no valid claims against Defendant.
REQUEST FOR INJUNCTIVE RELIEF – ALL WRITS ACT
41. Bayview requests that the court, pursuant to the All Writs Act and the inherent power of the Court, issue an order that any further suits that Plaintiff may seek to file in regard to Bayview’s lien on this property not be filed unless it is filed in this court.
42. The court has in prior litigation and again in the current litigation will make rulings in regard to the property and facts controlling this case.
Plaintiff is bordering on, if he is not already, becoming a vexatious Plaintiff with three prior suits decidedly adversely against him, and likely a fourth.
43. It would be inequitable and a waste of judicial resources for Plaintiff to merely make the same claims once again in state court, under the guise of a emergency restraining order, to prevent any future foreclosure sale.
Such an order would be inline with the relitigation exception of the Anti-Injunction Act.
DENIAL OF REMAND
44. Plaintiff makes the same specious arguments that he made previously when he requested remand in the Third Lawsuit.
In addition, Plaintiff asserts that as he has now removed his RESPA claims with his amended complaint that this court no longer has jurisdiction.
45. However, Plaintiff may not defeat a federal court’s jurisdiction over a properly removed case merely by amending his complaint to omit federal causes of action as the court has supplemental jurisdiction over the remaining claims.
Further, the court can consider whether the Plaintiff has attempted to manipulate the forum by simply deleting federal claims from the complaint and requesting remand and should safeguard against such manipulation.
Carnegie Mellon Univ. v. Cohill 484 U.S. 343, 357, 108 S.Ct 614, 98 L.Ed2d 720 (1988).
Finally, this court has previously presided over a prior case between the parties, conducted a conference, considered evidence and pleadings and is familiar with the parties and arguments.
Judicial economy, convenience and fairness require this court to retain jurisdiction.
CONCLUSION
As outlined above, Plaintiff has failed to state a claim for which relief could be granted against Bayview and all affirmative claims must be dismissed. Defendant further requests that the court issue an order expunging the lis pendens, an injunction on further suits, deny Plaintiff’s request for remand.
WHEREFORE, PREMISES CONSIDERED, Defendant respectfully requests this Court dismiss Plaintiff’s Petition with prejudice and without leave to amend and grant Defendant such additional and further relief to which it may show itself entitled.
Respectfully submitted,
BARRETT DAFFIN FRAPPIER TURNER & ENGEL, LLP
/s/ Michael C. Maus
Michael C. Maus,
Attorney-in-charge
State Bar No. 24008803
Federal Bar No. 23064
1900 St. James Place, Suite 500
Houston, Texas 77056
Telephone: 713-693-2065
Facsimile: 713-693-2025
michaelm@bdfgroup.com
ATTORNEYS FOR DEFENDANT
CERTIFICATE OF SERVICE
I certify that a true and correct copy of the foregoing was sent to all counsel of record on this18th day of July 2016.
D. Patrick Smitherman
1044 W. 25th Sreet #E
Houston, Texas 77008
dpatricksmitherman@yahoo.com
/s/ Michael C. Maus
Michael C. Maus
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