Edward Charles Prado was a federal judge on the United States Court of Appeals for the 5th Circuit. He joined the court in 2003 after being nominated by President George W. Bush. He retired from the court on April 2, 2018, to take a position as an ambassador in President Donald Trump’s administration.
A Rule 736 proceeding is not “an ordinary lawsuit,” but rather “a faster, more streamlined alternative to judicial foreclosure.” Huston v. U.S. Bank Nat’l Ass’n,, 682 (Tex. App.—Houston [1st Dist.] 2011, no pet.). Once the petitioner files a Rule 736 application for foreclosure, if the respondent files a response, Rule 736.6 requires that the court hold an evidentiary hearing before issuing an order on the application.
A Rule 736 order “is without prejudice and has no res judicata, collateral estoppel, estoppel by judgment, or other effect in any other judicial proceeding.” Tex. R. Civ. P. 736.9. “After an order is obtained, a person may proceed with the foreclosure process under applicable law and the terms of the lien sought to be foreclosed.” Id. Rule 736 also provides an exclusive procedure for challenging an order on a Rule 736 application: “Any challenge to a Rule 736 order must be made in a suit filed in a separate, independent, original proceeding in a court of competent jurisdiction.” Id. at 736.8(c) (emphasis added).
An order granting or denying a Rule 736 application “is not subject to a motion for rehearing, new trial, bill of review, or appeal.” Id. However, if a party files an independent suit challenging a Rule 736 foreclosure order before 5:00 p.m. on the Monday before the scheduled foreclosure sale, the Rule 736 proceeding or order is automatically stayed. Id. at 736.11(a). Once the Rule 736 court is notified that an independent suit has been filed challenging the Foreclosure Order, the court is required to dismiss the Rule 736 proceeding or vacate the foreclosure order. Id. at 736.11(c). “If the automatic stay under [Rule 736.11] is in effect, any foreclosure sale of the property is void.” Id. at 736.11(d).
Here, as we detailed above, Texas law provided the Burciagas an adequate procedure to challenge the Foreclosure Order by filing an independent suit in a court of competent jurisdiction. See Tex. R. Civ. P. 736.8. The Burciagas, however, never argued that this lawsuit constitutes a Rule 736.8 proceeding. The Burciagas cannot forgo procedures and remedies available to correct a state procedural error, and then belatedly claim they were denied due process because of that error.
A prior unpublished opinion of this court reached the opposite conclusion. In Magor v. GMAC Mortg., L.L.C., 456 F. App’x 334, 335–36 (5th Cir. 2011), we held that Rooker- Feldman barred review of a claim “inextricably intertwined” with a foreclosure order issued pursuant to Tex. R. Civ. P. 736. In so holding, the Magor court did not discuss our circuit’s exception for judgments with no preclusive or res judicata effect. Further, the panel did not address the peculiarities of Rule 736 proceedings and did not recognize that Texas law specifically allows for collateral attacks on Rule 736 foreclosure orders “in a court of competent jurisdiction.” Because Magor is non-binding, see 5th Cir. R. 47.5.4, we decline to follow its reasoning.