Bank of New York Mellon (BONYM)

Couchin’ The Truth: Dickey and Sharon Couch Battle The Unsung Fifth Circuit’s Three Straight Faces

The Fifth Circuit court has been reversed more times at SCOTUS than any other, and SCOTX continues to reject their Erie Guesses.

We’re Lighting Up the Federal Judiciary’s Illegal Acts Which Allow Texas Homes to be Seized by Unlawful Orders

OCT 14, 2024

Under the three-panel’s theory, section (b) is rendered obsolete as they focus solely on the wording of section (a). This raises an important question: Why did the legislature take care to differentiate between the time to “bring suit” in section (a) and the time for “sale of real property under a power of sale” in section (b)?

For instance, in In re Abraham, 662 S.W.3d 541 (Tex. App. 2022), the court discusses the statute of limitations relevant to this issue. The Abraham opinion cites section 16.035 four times but notably omits any reference to section (b). This pattern is consistent across most cases we’ve examined, where the focus remains on acceleration and the initial four-year time limit to “bring suit.”

The sale of a home is an entirely separate action and should not be a primary consideration when discussing the deadline for filing a foreclosure lawsuit. In cases of default, a nonjudicial foreclosure does not necessitate the initiation of a lawsuit, as outlined in Tex. Prop. Code § 51.002.

See;  Bierwirth v. Bac Home Loans Servicing, LP, No. 03-12-00583-CV, at *2-3 (Tex. App. Feb. 20, 2014)

(“Bierwirth admits that he ceased making payments. Based on Bierwirth’s default on the loan, BAC initiated nonjudicial foreclosure proceedings under the terms of the deed of trust and in compliance with the property code. See Tex. Prop. Code § 51.002 (authorizing sale of real property after default under powers granted in deed of trust without necessity of filing suit and obtaining judgment directing foreclosure); Starcrest Trust v. Berry, 926 S.W.2d 343, 351 (Tex. App.—Austin 1996, no writ) (defining “deed of trust” as mortgage with power to sell on default).”);

See also; Farkas v. Mortg. Elec. Registration Sys., Inc., No. 11-12-00024-CV, at *3 (Tex. App. Jan. 9, 2014);

And, as the Fifth Circuit went to great lengths to explain in Burke I;

Deutsche Bank Nat’l Tr. Co. v. Burke, 655 F. App’x 251, 4-5 (5th Cir. 2016)

(“MERS assigned the Burkes’ mortgage to Deutsche Bank—the new mortgagee—by an Assignment of Deed of Trust dated January 20, 2011.

By this assignment, Deutsche Bank now held “a perfected security interest in the [Burkes’] property,”

including “the right to invoke the power of sale.” Harris Cty., 791 F.3d at 556;

see also Farkas, 737 F.3d at 342

(“Our holding in Martins permits MERS and its assigns to bring foreclosure actions under the Texas Property Code. Deutsche Bank became the mortgagee as defined under Section 51.0001(4) by valid and recorded transfer of the deed[ ] of trust and therefore was an appropriate party to initiate non-judicial foreclosure actions.”).”)

In short, the only common-sense interpretation of section 16.035 aligns with Joanna Burke’s application in her case, which exemplifies the legislative intent to separate the time for filing an action from the time allowed for sale.

Under Burke’s theory, the 2011 lawsuit initiated by DBNTCO in federal court for a declaratory judgment permitting nonjudicial foreclosure constituted the necessary filing. However, because DBNTCO had already sought to foreclose and had not abandoned that acceleration, they were bound by the four-year time limit to sell the home.

Burke applied equitable tolling to her case, noting that litigation spanned from 2011 to 2018, during which the Burkes won judgments twice, only to have them erroneously reversed by the Fifth Circuit. While the foreclosure order entered by Judge David Hittner was deficient, it was dated November 29, 2018.

Burke allowed the full four years from that date to sell the home under the “power of sale” in section (b), which the Fifth Circuit recognized in their Burke I opinion.

DBNTCO failed to act within that timeframe and is now time-barred.

LIT acknowledges recent federal opinions suggesting otherwise, including claims that a federal foreclosure order can extend the time “up to 10 years.” However, both Texas law and the Fifth Circuit’s position in Burke I prevent federal courts from adopting a conflicting stance.

During the recent PNC v. Howard case at the Texas Supreme Court, where Mark Hopkins served as second chair for PNC, all parties recognized that equity does not permit a federal court to benefit from misapplying Texas law.

In conclusion, Deutsche Bank sought a nonjudicial foreclosure but received a deficient order. They attempted to use this order to initiate a nonjudicial foreclosure after the four-year limit, thus rendering them time-barred.

Section 16.035(b) must apply, and the interplay between the request for nonjudicial foreclosure and the statute cannot be ignored; extending the order to 10 years is impermissible.

Furthermore, over a century of common law, as highlighted in the Texas Supreme Court’s 1927 opinion in Jolly v. Fidelity Union Trust Co., 118 Tex. 58, confirms that while nonjudicial foreclosures had a ten-year limit from 1905 to 1913, this was reduced to four years after July 1, 1913.

Moreover, the lender had the ability to “suspend” the four-year time limit under Tex. Civ. Prac. Rem. Code § 16.036. It is absurd to suggest that the legislature intended to create a 10-year window for nonjudicial foreclosure.

These flawed opinions have no legal foundation; they reveal a continued pattern of the federal judiciary overstepping its bounds to impose a reckless and illegal agenda, resulting in the unlawful seizure of citizens’ homes.

Couch v. The Bank of N.Y. Mellon

No. 24-10297

(5th Cir. Oct. 11, 2024, unpublished opinion)

REPUBLISHED BY LIT: OCT 14, 2024
OCT. 14, 2024

Above is the date LIT Last updated this article.

Notice how many times the panel refer to Tex. Prop. Code § 51.002: Zero times.

Before King, Southwick, and Engelhardt, Circuit Judges. Per Curiam:*

This appeal arises out of mortgagee Bank of New York Mellon’s foreclosure and sale of Sharon and Dickey Couch’s home.

The Couches filed a quiet title action seeking a declaratory judgment that the Bank had no claim to the property because

(1) the four-year statute of limitations period to sell lapsed,

and

(2) the Couches adversely possessed the home.

The district court granted the Bank’s Rule 12(b)(6) motion to dismiss, concluding the relevant Texas statute did not require a sale within four years.

The district court also granted the Bank’s Rule 12(c) motion, holding that the Couches had not satisfied the applicable adverse possession period.

We AFFIRM.

Rule 12(b)(6) dismissals and Rule 12(c) judgments on the pleadings are reviewed de novo under the same Rule 12(b)(6) standard.

Vardeman v. City of Houston, 55 F.4th 1045, 1049–50 (5th Cir. 2022).

A court may dismiss a complaint as a matter of law when the plaintiff fails to “state a claim upon which relief can be granted.”

FED. R. CIV. P. 12(b)(6).

The Couches fail to state a quiet title claim based on limitations.

Under Texas law, a “person must bring suit for the recovery of real property under a real property lien or the foreclosure of a real property lien not later than four years after the day the cause of action accrues.”

Tex. Civ. Prac. & Rem. Code § 16.035(a).

Similarly, a “sale of real property under a power of sale in a mortgage or deed of trust that creates a real property lien must be made not later than four years after the day the cause of action accrues.”

Id.§ 16.035(b).

When a note or deed of trust contains an optional acceleration clause, the foreclosure “action accrues . . . when the holder actually exercises its option to accelerate.’”

HSBC Bank USA, N.A. v. Crum, 907 F.3d 199, 203 (5th Cir. 2018) (citing Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 566 (Tex. 2001)).

“Once the four-year limitations period has expired, both the real property lien and the power of sale to enforce the real property lien become void” under § 16.035(d).

Metcalf v. Wilmington Sav. Fund Soc’y, FSB, No. 03-16-00795-CV, 2017 WL 1228886, at *3 (Tex. App.—Austin Mar. 29, 2017, pet. denied).

Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 567 (Tex. 2001)

C. Limitations

Under state law, a sale of real property under a power of sale in a mortgage or deed of trust that creates a real-property lien must be made not later than four years after the day the cause of action accrues.

Tex. Civ. Prac. Rem. Code § 16.035(b);

 McLemore v. Pacific Southwest Bank, 872 S.W.2d 286, 292 (Tex.App.-Texarkana 1994, writ dism’d by agr.).

When this four-year period expires, the real-property lien and the power of sale to enforce the lien become void.

Tex. Civ. Prac. Rem. Code § 16.035(d).

This four-year limitations period can be suspended by filing a written agreement in the county clerk’s office where the real property is located.

Tex. Civ. Prac. Rem. Code § 16.036.

The Couches contend that § 16.025(a) and (b) require mortgagees to file suit and sell within four years to preserve the lien.

Texas courts disagree.

Section 16.035(a) “does not require that the actual foreclosure occur within the four-year limitation period, but rather, requires only that the party seeking foreclosure ‘bring suit . . . not later than four years after the day the cause of action accrues.’”

Slay v. Nationstar Mortg., L.L.C., No. 2-09-052-CV, 2010 WL 670095, at *3 (Tex. App.—Fort Worth Feb. 25, 2010, pet. denied) (emphasis added) (quoting § 16.035(a)).

For this reason, when the mortgagee “complie[s] with § 16.035(a)” by filing a claim for judicial or non-judicial foreclosure “within the four year limitations period,” the mortgagee is “not required to satisfy both sections 16.035(a) and 16.035(b) in order to preserve the validity of the lien.”

Pittman v. Seterus, Inc., No. 3:18-CV-3076-M-BH, 2019 WL 2425196, at *6 (N.D. Tex.) (collecting cases), rec. adopted, No. 3:18- CV-3076-M, 2019 WL 2425189 (N.D. Tex. June 6, 2019), aff’d, 786 F. App’x 14 (5th Cir. 2019).

Stated otherwise, a claim for either judicial or non-judicial “foreclosure preserve[s] the validity of the real property lien under section 16.035(a) and therefore [the mortgagee is] not time-barred from pursuing foreclosure.”

Santiago v. Bank of N.Y. Mellon, No. 4:18-CV-533, 2019 WL 4267437, at *5 (E.D. Tex. Sept. 10, 2019), aff’d, 802 F. App’x 855 (5th Cir. 2020);

see also Pittman, 786 F. App’x at 15 n.2 (citing Metcalf, 2017 WL 1228886, at *4).

The Bank accelerated the note on August 5, 2014 and filed a counter-claim for judicial foreclosure the same day in response to the Couches’ initial action. The Bank’s counterclaim satisfied the four-year statute of limitations and preserved its lien.

The Couches also contend that they own the property via adverse possession because they have possessed the property for approximately eight years since the Bank purportedly obtained the right to foreclose.

But “it is well-settled in Texas that, for adverse possession purposes, the statute of limitations does not run against the mortgagee out of possession and in favor of an adverse claimant until the mortgagee acquires title to land at the foreclosure sale.”

Tex. Cap. Bank, N.A. v. Hoppe, No. 14-98-00621-CV, 2000 WL 1125425, at *2 (Tex. App.—Houston [14th Dist.] Aug. 10, 2000, pet. denied).

For this reason, the adverse possession clock did not start until the Bank acquired the property at the constable’s sale.

The Couches have not adversely possessed the property for a sufficient period of time under any of the potentially applicable periods.

See TEX. CIV. PRAC. & REM. CODE §§ 16.024–026

(explaining circumstances for three-, five-, and ten-year adverse possession periods).

Because the Couches failed to state a quiet title claim under either limitations or adverse possession theories, we AFFIRM.

* This opinion is not designated for publication. See 5th Cir. R. 47.5.

Couch v. The Bank of New York Mellon

(4:24-cv-00085)

District Court, N.D. Texas

JAN 25, 2024 | REPUBLISHED BY LIT: MAR 7, 2024
MAR 7, 2024

Above is the date LIT Last updated this article.

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Couchin’ The Truth: Dickey and Sharon Couch Battle The Unsung Fifth Circuit’s Three Straight Faces
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