Cronyism: Roman Catholic Widow Martha Stolowski’s Home Foreclosure Saved by the Catholic Bandit

LIT’s Founder – Mark Burke – Disclosure Statement

FEB 5, 2024

PHH Mortgage Corporation v. Stolowski

(5:23-cv-01304)

District Court, W.D. Texas

OCT 13, 2023| REPUBLISHED BY LIT: FEB 5, 2024

Is this why the Catholic Bandit voluntarily dismissed this case?

“Tim was a lifetime member of St. Gerard Catholic Church on the Eastside. He was a founding member of the Knights of Columbus council #10270. He served two terms as Grand Knight in 2000-2002 and 2011-2012 and was an honorary member.”

“He attended several Men’s Acts Retreat, his first with Espada Cabrini. He was also a member of St. Jerome’s TMIY (This Man is YOU). He was a member of the Wednesday Bible Study group at St. Leo the Great Catholic Church lead by Deacon Gerard Gonzalez.”

In a perplexing legal development, the dismissal of a lawsuit against a decedent’s estate has caught attention, revealing an unexpected connection.

The foreclosure lawyer handling the case, Mark “The Catholic Bandit” Cronenwett, who is assumed to be a member of the Knights of Columbus, chose to dismiss the lawsuit without explicitly citing any affiliation with the organization.

This unanticipated decision prompts concerns of potential cronyism, as the lawyer’s presumed membership in the Knights of Columbus, despite not being expressly mentioned, raises questions about the decision not to pursue foreclosure and voluntarily dismiss the case on behalf of his client, PHH Mortgage Corporation.

Here’s where you find out Texas lawyers and judges socialize together inside and outside of the workplace, including having their own Knights-styled Catholic society. Check it out; https://t.co/qdm3SAzQSB

— lawsinusa (@lawsinusa) February 4, 2024

PLAINTIFF’S ORIGINAL COMPLAINT

OCT 13, 2023

COMES NOW, Plaintiff PHH Mortgage Corporation (“PHH” or “Plaintiff”), and files this its Original Complaint against Martha A. Stolowski and Sean Stolowski (“Defendants”), and respectfully shows unto the Court as follows:

I.                   PARTIES

1.                  Plaintiff is appearing through the undersigned counsel.

2.                  Timothy G. Stolowski (“Decedent’) was a borrower under the loan agreement described below. Decedent passed away on February 3, 2022. Upon information and belief, no probate is open for Decedent’s estate in Bexar County, Texas, the county where the subject Property is located nor the county in which the Decedent died. Accordingly, there is no executor or administrator to be made a party in this proceeding as the personal representative of the Decedent’s estate.

3.                  Pursuant to Texas Estates Code §§ 101.001, 101.051, and 201.001, the heirs at law of Decedent (“Heir” or, collectively, “Heirs”), whether known or unknown, acquired all of Decedent’s estate, including an undivided interest in the Property, immediately upon his death. Each Heir is made a party in this proceeding.

4.                  Martha A. Stolowski is an heir and surviving spouse of Decedent. She is a citizen of the state of Texas and may be served with process at 4014 Skylark Ave., San Antonio, Texas 78210 or at such other place as she may be found. Summons is requested.

5.                  Sean Stolowski is an heir and son of Decedent. He is a citizen of the state of Texas and may be served with process 12520 Welcome Dr., San Antonio, Texas 78233 or at such other place as he may be found. Summons is requested.

II.                PROPERTY

6.                  This proceeding concerns the following real property and improvements commonly known as 4014 Skylark Ave. San Antonio, Texas 78210 (the “Property”) and more particularly described as:

LOT THE NORTH 31.5 FEET OF LOT 16, ALL OF LOT 15, AND THE SOUTH 17.5 FEET OF LOT 14, BLOCK 14, NEW CITY BLOCK 7552, MISSION VIEW ADDITION, CITY OF SAN ANTONIO, BEXAR COUNTY, TEXAS, ACCORDING TO PLAT THEREOF RECORDED IN VOLUME 105, PAGE 212-213, DEED AND PLAT RECORDS OF BEXAR COUNTY, TEXAS.

III.             DIVERSITY JURISDCTION AND VENUE

7.                  This Court has jurisdiction over the controversy because there is complete diversity between Plaintiff and Defendants, and the amount in controversy exceeds $75,000.00. See 28 U.S.C. § 1332.

8.                  Plaintiff is a corporation with its principal place of business in New Jersey. A corporation is a citizen of the state where it has been incorporated, and any state where the corporation has its principal place of business. 28 U.S.C. § 1332(c)(1). Therefore, Plaintiff is a citizen of New Jersey for diversity purposes.

9.                  The named Defendants are individuals and citizens of the state of Texas.

10.              In this suit, Plaintiff seeks a declaratory judgment and foreclosure so it may enforce its security interest in the Property. Because the lien interest is valued at more than $75,000.00, the minimum amount-in-controversy requirement has been met. When the object of the litigation is a mortgage lien that entitles its owner to the full use and enjoyment of the property, the lien may be measured by the appraised value of the property, the purchase price, or the outstanding principal and interest. Cf. Farkas v. GMAC Mortg., LLC, 737 F.3d 338, 341 (5th Cir. 2013).

11.              When a party seeks declaratory relief, the amount in controversy is measured by the value of the object of the litigation, and the value of that right is measured by the losses that will follow. Webb v. Investacorp, Inc., 89 F.3d 252, 256 (5th Cir. 1996). Stated differently, the amount in controversy is “the value of the right to be protected or the extent of the injury to be prevented.” Hartford Ins. Grp. v. Lou-Con, Inc., 293 F.3d 908, 910 (5th Cir. 2002) (quoting Leininger v. Leininger, 705 F.2d 727, 729 (5th Cir. 1983)); see also Farkas, 737 F.3d at 341.

12.              Here, the value of the right to be protected is enforcement of mortgage contract through foreclosure. If Plaintiff were to foreclose on the Property, it would be entitled to either the full use and possession of it, or the proceeds of a foreclosure sale. But if Plaintiff is unable to foreclose, it may be entirely divested of any interest in the Property. Thus, rights to the entirety of the property are in question, and the value of the property controls. And the value of the Property exceeds $75,000.00. The Bexar County Appraisal District values the Property at $259,760.00 Therefore, the amount of controversy is met.

13.              Venue is proper in the Western District of Texas, San Antonio Division, because this suit concerns title to real property located in Bexar County, Texas. See 28 U.S.C. §§ 124, 1391(b)(2).

IV.              FACTS

14.              The foregoing paragraphs are incorporated by reference for all purposes.

15.              On or about February 15, 2012, for value received, Decedent Timothy G. Stolowski and Defendant Martha A. Stolowski (collectively, “Borrowers”) executed that certain Note (the “Note) originally payable to USAA Federal Savings Bank (”USAA”) in the principal amount of $55,460.00, bearing an interest rate of 4.000% per annum. A true and correct copy of the Note is attached hereto as Exhibit A.

16.              Concurrently with the Note, Borrowers executed that certain Deed of Trust (the “Security Instrument” and together with the Note, the “Loan Agreement”), as grantors, granting a security interest in the Property. On February 21, 2012, the Security Instrument was recorded in the Official Public Records of Bexar County, Texas, as Document No. 20120031084. A true and correct copy of the Security Instrument is attached hereto as Exhibit B.

17.              The Loan Agreement was transferred from Mortgage Electronic Registration Systems, Inc. (“MERS”) acting solely as Nominee for USAA to Plaintiff, as evidenced by that certain Corporate Assignment of Deed of Trust (the “Assignment”) recorded on June 8, 2023, in the Official Public Records of Bexar County, Texas, as Document No. 20230103667. A true and correct copy of the MERS Assignment is attached hereto as Exhibit C.

18.              Plaintiff is the current legal owner and holder of the Note and beneficiary of the Security Instrument. Plaintiff is also the mortgagee as that term is defined in § 51.0001(4) of the Texas Property Code.

19.              On or about February 3, 2022, Decedent passed away. Upon information and belief, no probate was ever opened for Decedent. In accordance with Texas Estates Code §§ 101.001(b) and 101.051, his heirs acquired all his interest in the Property immediately upon his death, subject to the Loan Agreement debt owed to Plaintiff.

20.              Under the terms of the Loan Agreement, Borrowers were required to pay when due the principal and interest on the debt evidenced by the Note, as well as any applicable charges and fees under the Note.

21.              The Loan Agreement further provides that should Borrowers fail to comply with any or all of the covenants and conditions of the Loan Agreement, then the lender may require immediate payment in full of all outstanding principal and accrued interest owed on the Note. The Loan Agreement further provides that the lender may enforce the Security Instrument by selling the Property according to law and in accordance with the provisions set out in the agreement.

22.              Borrowers have failed to comply with the terms of the Loan Agreement. The Loan Agreement is currently due for the April 1, 2023 payment and all subsequent monthly payments. A Notice of Default (the “Notice of Default”) was provided to Borrowers in accordance with the Loan Agreement and the Texas Property Code. A true and correct copy of the Notice of Default is attached hereto as Exhibit D.

23.              The default was not cured, and the maturity of the debt was accelerated. On June 30, 2023, a Notice of Acceleration of Loan Maturity (the “Acceleration”) was provided to Borrowers in accordance with the Loan Agreement and the Texas Property Code. A true and correct copy of the Acceleration is attached hereto as Exhibit E.

24.              Plaintiff brings this suit for declaratory judgment and foreclosure so it may enforce its security interest in the Property.

V.                 CAUSES OF ACTION

A. DECLARATORY JUDGMENT

25.              The foregoing paragraphs are incorporated by reference for all purposes.

26.              Plaintiff requests a declaration from this Court that it is the owner and holder of the Note and beneficiary of the Security Instrument.

27.              Plaintiff requests a further declaration from this Court that, as owner and holder of the Note and beneficiary of the Security Instrument, Plaintiff is a mortgagee as that term is defined under Texas Property Code§ 51.0001(4) and is authorized to enforce the power of sale in the Security Instrument through foreclosure of the Property.

B.                   ENFORCEMENT OF A STATUTORY PROBATE LIEN

28.              The foregoing paragraphs are incorporated by reference for all purposes.

29.              Plaintiff seeks a declaration from this Court that Plaintiff has a statutory probate lien against the Property under the terms of the Loan Agreement and the following statutory authority:

Tex. Estates Code §§ 101.001(b) and 101.051(b)(1), which state in pertinent part:

“the estate of a person who dies intestate vests immediately in the person’s heirs at law, subject to the payment of, and is still liable for: the debts of the decedent, except as exempted by law”

a.       TEXAS TITLE EXAMINATION STANDARDS § 11.10,

which states in pertinent part:

“A decedent’s Property passes to his or her heirs at law or devisees immediately upon death, subject in each instance, except for exempt Property, to payment of debts, including estate and inheritance taxes;” and

b.      TEXAS TITLE EXAMINATION STANDARDS § 11.60,

which states in pertinent part:

“A decedent’s Property passes to his or her heirs at law or devisees immediately upon death, subject in each instance, except for exempt Property, to payment of debts, including estate and inheritance taxes . . . Property of a decedent passes subject to unpaid debts and taxes of the estate.”

30.              Through Plaintiff’s statutory probate lien, reserved in Texas Estates Code §§ 101.001 and 101.151, Plaintiff has an enforceable and superior lien against the Heirs’ interest in the Property. Because of a material breach of the Loan Agreement, Plaintiff seeks to enforce its statutory probate lien in the Property through foreclosure.

C.                 NON-JUDICIAL FORECLOSURE

31.              The foregoing paragraphs are incorporated by reference for all purposes.

32.              Because of a material breach of the Loan Agreement, Plaintiff seeks an order from this Court to enforce its security interest through non-judicial foreclosure pursuant to the terms of the Loan Agreement and Texas Property Code § 51.002.

D.    PUBLIC AUCTION

33.              The foregoing paragraphs are incorporated by reference for all purposes.

34.              Because of the material breach of the Loan Agreement, a public auction of the Property in conjunction with all other regularly scheduled non-judicial foreclosure sales on the first Tuesday of the month would provide the most practical, efficient, and effective means to enforce Plaintiff’s security interest in the Property. Because the rights, responsibilities, and duties of Plaintiff and the trustee are well known under Texas Property Code § 51.002 and Texas case law, a public auction conducted in the same manner as a non-judicial foreclosure sale would meet all constitutional standards of due process, Because no personal liability is sought against the Defendants, a public auction of the Property would be the most expedient means to put the Property back into the stream of commerce and the housing stock of the community.

E.                   JUDICIAL FORECLOSURE

35.              The foregoing paragraphs are incorporated by reference for all purposes.

36.              In the alternative, for failure to cure the default of the Loan Agreement, Plaintiff seeks to enforce its security interest against the Property in an amount equal to the payoff at the time of judgment.

37.              Plaintiff seeks a judgment for judicial foreclosure together with an order of sale issued to the sheriff or constable of Bexar County—the county where the Property is located— directing the sheriff or constable to seize and sell the Property in satisfaction of the Loan Agreement debt, pursuant to Texas Rules of Civil Procedure 309.

F.                 TRESSPASS TO TRY TITLE

38.              The foregoing paragraphs are incorporated by reference for all purposes.

Concurrent with Plaintiff acquiring all of Defendants’ right, title, and interest in the Property— by enforcement of Plaintiff’s statutory probate lien by non-judicial foreclosure under Security Instrument’s power-of-sale provision and the Texas Property Code or, alternatively, by judicial foreclosure. Plaintiff seeks a declaration and judgment that the Defendants are divested of all of their right, title, and interest in the Property and that all of Defendants’ right, title, and interest in the Property are vested in Plaintiff.

G.                WRIT OF POSSESSION

39.              The foregoing paragraphs are incorporated by reference for all purposes

If any person occupies or claims possession of the Property (an “Occupant”) after transfer of all right, title, and interest in the Property in favor of Plaintiff, then Plaintiff requests a writ of possession against any Occupant.

H.                ATTORNEYS FEES

40.              U.S. Bank has been forced to hire the undersigned attorneys to seek a declaratory judgment as a result of Defendants’ failure to comply with the Loan Agreement. U.S. Bank is therefore entitled to and seeks judgment against Defendant for its reasonable attorney’s fees in

this action, both through trial and in the event of a subsequent appeal, as provided by the Security Instrument, and by statute. Tex. Civ. Prac. & Rem. Code §§ 37.009; 38.001. Plaintiff requests that the award of attorney’s fees be made not as a money judgment against the Defendant, but as further obligation under the subject Note and Security Instrument.

VI.     CONDITIONS PRECEDENT

41.              The foregoing paragraphs are incorporated by reference for all purposes.

42.              In accordance with Federal Rule of Civil Procedure 9(c), all conditions precedent have been performed or have occurred for Plaintiff to enforce its security interest against the Property.

VII.          PRAYER

WHEREFORE, PREMISES CONSIDERED, Plaintiff requests that Defendants be summoned to appear and answer, and the Court enter judgment granting:

a.       A declaration that Plaintiff is the owner and holder of the Note and beneficiary of the Security Instrument, and that Plaintiff is a mortgagee as that term is defined under Texas Property Code section 51.0001(4), and is authorized to enforce the power of sale in the Security Instrument through foreclosure of the Property;

b.      A declaration that due to a breach of the Loan Agreement, Plaintiff’s statutory probate lien against the Property shall be enforced by a non-judicial foreclosure at public auction—or alternatively, a judgment for judicial foreclosure—and that through the foreclosure or auction the Defendants are divested, and the purchaser at foreclosure sale is vested, of all of Decedent’s right, title, and interest to the Property;

c.       A writ of possession against any Occupant of the Property if the Occupant fails or refuses to leave the Property after foreclosure or auction;

d.      Attorney fees and costs of suit, not as a personal judgment against the Defendants, by only as an additional debt secured by the Security Instrument; and

e.       All other relief, in law and in equity, to which Plaintiff is entitled.

Respectfully submitted,

By:  /s/ Mark D. Cronenwett

MARK D. CRONENWETT
Texas Bar No. 00787303 mcronenwett@mwzmlaw.com

SARAH SIBLEY COX
State Bar No. 24043439 scox@mwzmlaw.com

MACKIE WOLF ZIENTZ & MANN, P. C.
14160 North Dallas Parkway, Suite 900
Dallas, TX 75254
Telephone: (214) 635-2650
Facsimile: (214) 635-2686

ATTORNEYS FOR PLAINTIFF