Homeowner Strikes Back: Counters Wolves Predatory Legal Scheme to Protract Litigation Until Death

I.                  STATEMENT OF THE NATURE AND STAGE OF THE CASE

Plaintiffs filed their Original Complaint (ECF-01) on July 3, 2019, followed by their First Amended Complaint (ECF-18) on August 21, 2019, seeking foreclosure against Lamell’s property.

Final Judgment (ECF-100), issued on March 24, 2021, granted Plaintiffs’ requests for declaratory relief that

(1) res judicata bars Lamell’s statute of limitations defense;

(2) they are entitled to pay taxes on the Property;

(3) they are entitled to pursue non-judicial foreclosure; and

(4) they are entitled to equitable and contractual subrogation.

The Court DENIED Plaintiffs’ request for declaratory relief that their pre-2019 notices of acceleration were abandoned.

Lamell filed a Notice of Appeal of the Final Judgment on June 18, 2021 (ECF-121).

In its Opinion issued on June 2, 2022, the Court of Appeals REVERSED this Court’s grants of Plaintiffs’ requests for declaratory relief as to res judicata and equitable/contractual subrogation, AFFIRMED its denial of summary judgment as to their request for a declaration that the pre- 2019 notices of acceleration were abandoned, and REMANDED “for determination of the abandonment, foreclosure, and subrogation issues and for further proceedings not inconsistent with this opinion.”

(ECF-125 at p.15)

The Court of Appeals’ Opinion serves as Law of the Case, is supported further by the Supreme Court’s decision in PNC Mortg. v. Howard, No. 21-0941 (Tex. May. 12, 2023), and effectively disposes of most of Plaintiffs’ claims.

Plaintiffs recently filed Plaintiffs’ Second Amended Complaint, adding new claims of judicial foreclosure and equitable subrogation related to advances of property taxes.

II.               STATEMENT OF ISSUES TO BE RULED ON

Each of the following issues found in Plaintiffs’ Complaint are, based on the Law of the Case, the uncontested factual record as it stands, and the evidence duly submitted by the parties, “not plausible on [their] face”

(Ashcroft v. Iqbal, 556 U.S. 662, 677 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007))) and “fail[] to state a claim upon which relief can be granted” FED. R. CIV. P. 12(b)(6).

A.                 Equitable Subrogation as to Property Tax Payments:

(Complaint, ¶ 49) –

Plaintiffs have shown no facts or evidence sufficient to overcome the fact that, as detailed more fully herein, this claim is:

a) Barred as a matter of law by the very statute they cite,

and

b) precluded by Plaintiffs’ lack of clean hands and inequitable behavior in these proceedings and in the prior state action.

B.                 Abandonment:

(Complaint, ¶ 30) –

Plaintiffs’ claim of Abandonment should be dismissed.

Beyond the “well-pled” facts already reviewed by the Court and found to be insufficient to “manifest an unequivocal intent to abandon acceleration”—which determination has been affirmed on appeal—Plaintiffs have pled no other facts to support Abandonment.

C.                     Successor-in-Interest:

(Complaint, ¶ 32) –

Plaintiffs have requested that the Court “construe” the provisions of Lamell’s Settlement Agreement with CIT Bank, N.A. (“CIT”) to “determine whether, under the plain language of the agreement, Plaintiffs are ‘successors and assigns’ who were released of claims by Defendant.”

As detailed herein, this is a request the Court cannot satisfy. Because neither Plaintiffs’ Complaint nor the Settlement Agreement present any evidence or information to establish they are successors or assigns, this assertion cannot be sustained.

D.                 Release:

(Complaint, ¶ 32) –

Plaintiffs’ claim of Release is based entirely on the presumption—ahead of the Court’s determination—that Plaintiffs are successors and assigns to CIT Bank, N.A. (“CIT”)

Because neither USBNA nor PHH can be shown by evidence to be a successor-in-interest or assign to CIT, Plaintiffs’ claim of Release fails.

E.                 Res Judicata (Collateral Estoppel):

(Complaint, ¶ 33) –

This Court’s grant of Plaintiffs’ claim of Res Judicata was reversed by the Court of Appeals. As such, Plaintiffs’ claim of res judicata is no longer tenable.

F.                 Tolling:

(Complaint, ¶ 31) –

The uncontested factual record, the record of proceedings in the state court action, and Plaintiffs’ own cited authorities show that the pendency of the state court action did not, per se, toll the running of limitations.

G.                Equitable/Contractual Subrogation:

(Complaint, ¶¶ 46, 50) –

Under the Law of the Case and the uncontested factual record, Plaintiffs’ claims of Equitable and Contractual Subrogation have been nullified and are no longer viable.

H.                Limitations:

(Second Amended Complaint, ¶ 26) –

Under the Law of the Case and the uncontested factual record, Plaintiffs’ claim that Limitations have not expired is untenable.

I.                   Entitlement to Foreclose:

(Second Amended Complaint, ¶ 42) –

Under the Law of the Case, the uncontested factual record, and the failure of Plaintiffs’ subrogation, abandonment, successor, res judicata, release, tolling and limitations claims as established herein, Plaintiffs cannot avoid the effects of expired limitations and are therefore barred from conducting foreclosure or suing to collect on the Note.

III.           STANDARD OF REVIEW

Under Rule 12(b)(6), a case must be dismissed when the allegations asserted in the Petition “fail[] to state a claim upon which relief can be granted.”

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

Under the 12(b)(6) standard, a court cannot look beyond the pleadings

(Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir. 1999)),

and pleadings must show specific, well-pleaded facts, not mere conclusory allegations.

Guidry v. Bank of LaPlace, 954 F.2d 278, 281 (5th Cir. 1992).

The court must accept those well-pleaded facts as true and view them in the light most favorable to the plaintiff.

Id.

Although “detailed factual allegations” are not necessary, a plaintiff must provide “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.”

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 1974, 167 L. Ed. 2d 929 (2007).

In short, a complaint fails to state a claim upon which relief can be granted when it fails to plead “enough facts to state a claim to relief that is plausible on its face.”

Twombly, 570.1 “Plausibility, not sheer possibility or even conceivability, is required to survive a Rule 12(b)(6) motion to dismiss.”

Twombly, 550 U.S. at 556-557.

I.                  INTRODUCTION

The claims introduced in Plaintiffs’ Second Amended Complaint (“Complaint”) (ECF- 164) fall into two basic categories:

(1) Claims related to avoiding the effects of expired limitations – release/waiver, successor-in-interest, and res judicata (collateral estoppel),

and

(2) Claims related to loan enforcement and statutes of limitations – acceleration, abandonment, tolling, equitable/contractual subrogation, equitable subrogation related to property tax payments, foreclosure, and collection. Plaintiffs’ claims in the first category depend entirely on two inter-

1 “Here, in contrast, we do not require heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face. Because the plaintiffs here have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed.”

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 1974, 167 L. Ed. 2d 929 (2007)

related allegations:

that CIT was a servicer of the Note, and that Plaintiffs are “successors and assigns” of CIT under the terms of the Settlement Agreement contract.

As shown infra, both allegations are false.

Plaintiffs, however, have provided no evidence to support, let alone prove, either allegation.

Instead, documents and other evidence in the record—much of it provided against interest by Plaintiffs—show that CIT was not a servicer of the Note and that Plaintiffs are not “successors and assigns” of CIT.

Even so, these basic allegations appear to be the only basis for Plaintiffs’ claims of release, successor-in-interest, and res judicata, which Plaintiffs rely on to contradict Lamell’s limitations defense.

Because these claims have no evidentiary support, dismissing them should be straightforward.

Plaintiffs’ claims of equitable and contractual subrogation, though initially granted by the Court, have been reversed on appeal with further support from the Supreme Court in PNC v. Howard, No. 21-0941 (Tex. May. 12, 2023).

While the Complaint does not mention the Opinion of the Fifth Circuit of Appeals or the Supreme Court decision in the related Howard case at all, those decisions were key to the reversal of this Court’s grant of Plaintiffs’ contractual/equitable subrogation,2 res judicata, and abandonment claims, and should be given particular attention.

The main issues left for the Court to determine are Plaintiffs’ claims of equitable subrogation in connection with tax payments, abandonment, and foreclosure.

However, once the issues in the first category have been decided, resolving these remaining issues should be equally straightforward.

Ultimately, Plaintiffs’ claims should be dismissed and their misadventure in bringing them finally brought to an end.

2 The court of appeals implicitly qualified its reversal of the Court’s grant of Plaintiffs’ equitable subrogation claim as subject to the Supreme Court’s decision in PNC Mortg. v. Howard, No. 21-0941 (Tex. May 12, 2023) which has since issued with a ruling that supports the court of appeals’ decision and effectively finalizes it as Law of the Case.

I.                  EXHIBITS

Exhibit-R01

2016-11-08 Notice of Appearance and Designation of Counsel

Exhibit-R02

2010-05-03 Plaintiff’s Amended 2009 Petition – Title Page (ECF-32-2. P.65)

Exhibit-R03

2019-05-16 Settlement Agreement (ECF-32-1, pp.58-67)

Exhibit-R04

2013-10-16Notice of Servicing Transfer (RESPA) and Welcome to Ocwen Loan Servicing LLC

Exhibit-R05

2019-05-06 Notice of Servicing Transfer from Ocwen to PHH Servicing LLC

II.               ARGUMENT

Two basic allegations underlie the majority of Plaintiffs’ claims.

Lamell shows how and why these underlying allegations are false before addressing Plaintiffs’ more specific claims, point-by-point.

1.                  Plaintiffs’ Underlying Allegations

The first allegation, that CIT is/was a servicer of the Note, appears to be based on the statement in Paragraph 20 of the Complaint that “Defendant named the then-servicer of the Loan Agreement, CIT Bank, N.A. f/k/a OneWest Bank, N.A. f/k/a One West Bank, FSB (“CIT”) as a defendant.”

However, while the f/k/a wording might seem to imply some connection between the parties listed, it does not prove CIT is or ever was a servicer of the Note.

Instead, the record shows that when CIT entered the state court action as defendant on November 8, 2016, (Exhibit- R01) it had no interests in the servicing of the Note.

Nor could it have acquired servicing rights or interests from OneWest because, at the time of its merger with OneWest,3 OneWest had

3 See hyperlink reference provided by Plaintiffs (ECF-76 at p.2, Fn.1) to the letter dated July 2, 2015 from the Office of the Comptroller of the Currency (“OCC”) conditionally approving the application to merge CIT Bank (CITB) with and into OneWest Bank N.A. at: https://www.occ.gov/news-issuances/news-releases/2015/nr-occ- 2015-105a.pdf (Judicial Notice of the OCC letter found at the above hyperlink is hereby requested)

already divested itself of its servicing rights for the Note when it sold them to Ocwen some two years earlier.4

The record shows that, on May 3, 2010, Lamell sued IndyMac Mortgage Services, division of OneWest Bank, FSB (“OneWest”) as named defendant, not the CIT Bank, N.A. that had merged with OneWest some five years later.

(ECF-32-2 at p.65)

The f/k/a wording employed in this paragraph by Plaintiffs is an abstraction that distorts the timeline of the case. Plaintiffs have provided no evidence in their Complaint to support the allegation that he sued CIT or that CIT was a servicer of the Note.

The second allegation, that Plaintiffs are “successors and assigns” of CIT, is essentially speculative in that it depends on the Court’s ability and willingness to satisfy Plaintiffs’ request in paragraph 32 of the Complaint, that the Court “construe the provisions of the settlement agreement (Exhibit-R03) and determine whether, under the plain language of the agreement, Plaintiffs are ‘successors and assigns’ who were released of claims by Defendant.” Plaintiffs’ request is out of line.

The “plain language” of the agreement plainly does not mention either PHH or U.S. Bank, N. A. (“USBNA”), does not identify who CIT’s successors or assigns are, and does not contain or point to any facts or information within its four corners about either PHH or USBNA from which the Court would be able to “construe” anything about them.

Moreover, the settlement agreement itself was only possible because CIT had clearly and emphatically represented in motions filed in the state court action, shortly before settlement negotiations were even proposed, that it was not a servicer of the note and had no connection with non-parties PHH or USBNA.

(see Section 2. below)

For Plaintiffs to ask the Court to

4 Plaintiffs presented evidence of this fact with the following link to a document filed with the SEC:

https://www.sec.gov/Archives/edgar/data/873860/000101905613000776/ocn_8k.htm (See ECF-76: p.2 Fn.2). The SEC filing states:

“On June 13, 2013, Ocwen Loan Servicing, LLC (“OLS”), a Delaware limited liability company and an indirect, wholly owned subsidiary of Ocwen Financial Corporation (“Ocwen”), entered into a mortgage servicing rights purchase and sale agreement (the “Purchase Agreement”) with OneWest Bank, FSB, a federal savings bank (the “Seller”) … No operations or other assets are being purchased in the transaction.”

(Judicial Notice of the SEC filing found at the above hyperlink is hereby requested)

construe whether they are “successors and assigns” to a party that has already effectively disclaimed any such relationship in formal filings is clearly inappropriate.

The Court is not a magician.

It cannot create from nothing, a legal status for parties that aren’t even mentioned.

Particularly not a legal status that, based on evidence in the record, does not exist.

Because there is no evidence or information in the Settlement Agreement or in the Complaint itself that the Court can rely on in satisfying Plaintiffs’ request, the request is essentially impossible.

Indeed, the only support for the claim that Plaintiffs are in any way connected to CIT seems to be where CIT is identified as a party to the agreement in yet another f/k/a sequence as follows:

“Defendant CIT Bank, N.A. f/k/a OneWest Bank, N.A. f/k/a One West Bank, FSB, incorrectly named as Indymac Mortgage Services, a division of OneWest Bank, FSB, a foreign corporation (collectively referred to as ‘Defendant’).”

While this reference seems to imply some kind of connection between the entities shown, it does not prove that such a connection exists or explain what the connection might be, if indeed there is a connection.

2.                  CIT’s Status

CIT disavowed any connection to Plaintiffs or to the servicing of the Note in its final filings and representations to the state court.

It represented that:

a)      “Neither Ocwen (Lamell’s current mortgage servicer) nor US Bank, N.A.., as Trustee for CSMC Mortgage-Backed Trust 2007-3 (the current investor) are before the Court. … Lamell cannot adjudicate the rights of nonparties to this action through requests for declaratory relief.”

(ECF-57-1 at p.19 ¶ 2)

b)      “Lamell seeks declarations that certain claims which have not been brought are barred by limitations based on the actions and inactions of non-parties to the suit.

His supplemental claims do not present a justiciable controversy as to the rights of parties actually before the court.

Neither Ocwen (Lamell’s current mortgage servicer) nor US Bank, N.A., as Trustee for CSMC Mortgage-Backed Trust 2007-3 (the current investor) are before the Court.”

… and …

“Lamell cannot adjudicate the rights of nonparties to this action through requests for declaratory relief. And CIT cannot speak for the rights of the investor or current servicer or what they intend to do in the future.” (ECF- 57-1 at p.19 ¶ 2)

c)      “Lamell’s claims are also moot. CIT is not the current servicer of Lamell’s mortgage loan Ex.12.

There is simply nothing to adjudicate with regard to CIT’s current rights to service or enforce the loan on behalf of the investor.”

(ECF-57-1 at p.50 ¶ 4)

The foregoing statements show that:

a) CIT was not involved with the servicing of the Note,

b) CIT could not speak for—i.e. did not represent—either USBNA or Ocwen,

c) Lamell’s limitations-related claims and requests for declarations had nothing to do with CIT,

and

d) neither USBNA nor Ocwen were parties in the state court action.

To date, two notices of servicing transfer have been issued in this case.

The first, issued on October 16, 2013 in connection with Ocwen’s purchase of OneWest’s servicing rights, shows the transfer of rights from OneWest to Ocwen

(Exhibit-R04).

The second, issued on May 6, 2019 in connection with the Ocwen/PHH merger, shows the transfer six years later from Ocwen to PHH.

(Exhibit-R05)

Together they show a continuous, unbroken chain of servicing in which CIT does not appear.

1.                  The Issues

A.                 Equitable Subrogation with Respect to Property Tax

(Complaint, ¶ 53)

Plaintiffs have not shown any facts or information sufficient to overcome the fact that this claim is barred by the very statute they refer to, Tax Code section 33.06, (Complaint, ¶ 39) and precluded by their own inequitable behavior.

Plaintiffs fail to acknowledge part (b) of section 33.06, which prohibits the filing of a suit for collection or undertaking foreclosure where an “Over-65” tax deferral affidavit has been filed by the homeowner.5

Plaintiffs acknowledge that

5 TEX. TAX AND PROP. CODE SEC. 33.06(b) “To obtain a deferral, an individual must file with the chief appraiser for the appraisal district in which the property is located an affidavit stating the facts required to be established by Subsection(a).

The chief appraiser shall notify each taxing unit participating in the district of the filing.

After an affidavit is filed under this subsection, a taxing unit may not file suit to collect delinquent taxes on the property and the property may not be sold at a sale to foreclose the tax lien until the 181st day after the date the collector for the taxing unit delivers a notice of delinquency of the taxes following the date the individual no longer owns and occupies the property as a residence homestead.

Lamell applied for such a deferral (Complaint, ¶ 38) and, indeed, Lamell has a valid “Over-65” deferral affidavit on file.

The maxim that “one who seeks equity must do equity” is not satisfied by Plaintiffs’ actions in this case.

For example, in its Rule 194.2 Disclosures, CIT’s lead counsel responds to the request for information under 194.2(b) about “the name, address, and telephone number of any potential parties” with, “at this time, Defendant is unaware of any potential parties to this action.”

(Exhibit-R01)

Later, on April 24, 2019 in CIT’s “Defendant’s Supplemental Answer to Plaintiff’s Third Supplemental Petition,” the same lead counsel then argued the exact opposite position, now representing that “Plaintiff’s allegations and claims attempt to ‘improperly adjudicate’ rights of indispensable parties who are not parties to this action and should be barred as such.”

(ECF-50-1 at p.34 ¶ 4)

These clearly contradictory statements have served to misdirect Lamell and the Court, and it seems questionable whether they meet the standard of candor which lead counsel is obliged to uphold.

Similarly inappropriate and “inequitable” are initiating and carrying on a lawsuit based on falsehoods and representing Ocwen’s interests “sub rosa” in this action, instead of as a party.

Plaintiffs’ conflation of CIT and OneWest was consistent, pervasive, and improper.

It reached a peak in their Response Brief of Appellees 6 in which “CIT” is mentioned 74 times throughout the brief and “OneWest” only once.

Judging from the preponderance of these mentions and from particular references like, “On April 8, 2010, CIT—the mortgage servicer at the time—sent its First Notice of Default to Lamell” (Response Brief, page.4) one might be led to conclude that OneWest was hardly involved in this case at all.

6 See Response Brief of Appellees, U.S. Bank Nat’l Ass’n v. Lamell, No. 21-20326 (5th Cir. June 2, 2022), Document: 00516134341) Case No. 4:19-cv-2402 – (Judicial Notice is hereby requested of the foregoing filing which can be found in the online records of court proceedings accessible through the CM/ECF Pacer electronic filing system)

To support the argument that Lamell released his limitations defense, Plaintiffs conflate “successor” as used in everyday parlance for someone who simply follows someone else, with “successor” as a legal term of art used in a contract to indicate a “successor-in-interest” who expressly assumes the liability of the one followed.

This is problematic not only because it is false, but also because it confuses and distorts the parties’ actual rights.

Even so, Plaintiffs rely heavily on this “replacement” device to support their false claim of successorship arising out of the Settlement Agreement.

(Exhibit-R03)

Relying on such contorted logic, instead of furnishing actual evidence, in order to bring effectively unsupported claims against Lamell is certainly not equitable behavior.

Accordingly, with respect to Equitable Subrogation as to Taxes, Plaintiffs “fail[] to state a claim upon which relief can be granted.”

FRCP 12(b)(6).

Nor, in the light of statutory law, is Plaintiffs’ claim plausible on its face.

B.                 Abandonment

(Complaint, ¶ 30)

Beyond the “well-pled” facts the Court has already reviewed and found wanting, Plaintiffs have pled no other facts to support abandonment.

The three documents 7 referred to in their Complaint, had already been considered and effectively dismissed by the Court and by the Court of Appeals.

The Law of the Case as it applies here evolved in four distinct stages of increasing finality:

1) In her Amended Memorandum and Recommendations  (ECF-86 at p.12), the Magistrate found that Plaintiffs’ evidence did not manifest an unequivocal intent to abandon acceleration,

2) the Court adopted the Magistrate’s findings in full in its Order Adopting (ECF- 99)—including the particular finding that  “Plaintiffs’ failed to present evidence of an

7 January 20, 2014 Mortgage Account Statement (ECF-32-1 at pp.78-79); February 17, 2014 Mortgage Account Statement (ECF-32-1 at p.98); March 17, 2014 Mortgage Account Statement (ECF-32-1 at p.100) (ECF-164 at ¶ 30)

unequivocal intent to abandon the prior acceleration”, 3) the Court’s adoption of the Magistrate’s findings was finalized in its Final Judgment (ECF-100) denying summary judgment as to Plaintiffs’ claim of abandonment and, finally, 4) the Appeals Court ruled,

“[W]e AFFIRM that part of the district court’s order holding that a genuine dispute of material fact exists as to whether the Appellees abandoned their acceleration of the underlying loan’s maturity.”

(ECF- 125 at pp.15-16)

Even without relying on the Law of the Case, however, Plaintiffs’ abandonment claim is implausible for other reasons as well.

None of the Mortgage Account Statements that Plaintiffs depend on make any mention of default, acceleration, intent to accelerate, abandonment, or a cure period with a certain deadline for payment to be made to avoid acceleration.

It is hard to see how, from the complete absence of those words, a borrower could guess that an acceleration not mentioned could have been rescinded by an abandonment not mentioned.

Furthermore, the three authorities cited by Plaintiffs—Boren, Leonard, Meachum—are essentially unavailing 8 because their fact patterns differ in one dispositive respect that is missing entirely in this case.

In each of the three cases cited, the account statement or notice of default that was sent out was also followed or accompanied by a notice clearly indicating the lender’s intent to accelerate.

It was the indication of the intent to accelerate that made it possible for the courts to conclude that abandonment had occurred.

In contrast with the cases Plaintiffs’ cited, not only did Ocwen’s Mortgage Accounts Statements fail to “evidence an unequivocal intent to abandon the June 4, 2010 acceleration,” Ocwen failed to send out a new notice of default/intent to accelerate or any other indication of

8 Boren v. U.S. Nat. Bank Ass’n, 807 F.3d 99, 106 (5th Cir. 2015); Leonard v. Ocwen Loan Servicing, L.L.C., 616 F. App’x. 677, 679 (5th Cir. 2015); Meachum v. Bank of N.Y. Mellon Trust Co., No. 3:13-cv-2322-N, 2015 U.S. Dist. LEXIS 21046, 2015 WL 765982 *3 (N.D. Tex. Feb.20, 2015))

their intent to accelerate, let alone of their “unequivocal intent” to do so.

It is clear from this that Plaintiffs did not abandon acceleration.

Because Plaintiffs’ Complaint offers no evidence beyond what the Court has already found to be insufficient to establish the requisite “unequivocal intent to abandon” in the documents Ocwen sent out, and because Ocwen failed to send out any accompanying notice of an intent to accelerate, their claim is not “plausible on its face.”

Accordingly, Plaintiffs have “fail[ed] to state a claim upon which relief can be granted,” and the Court is well-positioned to dismiss Plaintiffs’ claim of abandonment.

A.                 Successor-in-Interest

(Complaint, ¶No.32)

The allegation that either Plaintiff is a successor-in-interest to or an assign of CIT is unsubstantiated.

As shown Supra at p.6, the fact that Plaintiffs’ claim to being “successors and assigns” of CIT is not supported by any probative evidence should be sufficient to warrant dismissal.

This is not to say, however, that further argument might not be helpful to the Court.

Indeed Plaintiffs’ successor-in-interest claim fails for the further reasons laid out below as well.

Plaintiffs’ claim to successor-in-interest status fails by definition – As used in a contract,

“successor” is a well-established term of art. It is defined as “[a] corporation that, through amalgamation, consolidation, or other assumption of interests, is vested with the rights and duties

of an earlier corporation.” (emphasis added) (Black’s Law Dictionary 1569 (9th ed. 2009)).

Plaintiffs have provided no evidence or authority to show the existence of any kind of merger, acquisition, or other business combination between them and OneWest 9 or CIT.

Unequivocal sets a Higher Standard – The Magistrate’s finding that “[Ocwen’s] monthly

9 Plaintiffs’ conflation of OneWest with CIT does not in any way affect the applicability of these further arguments regardless of whether Ocwen purchased servicing rights from OneWest (as the record shows) or CIT as Plaintiffs would like the record to show.

statements and loan modification letters do not evidence an unequivocal intent to abandon the June 4, 2010 acceleration” is significant.

It led her to conclude that “the Court cannot find as a matter of law that the statute of limitations is unexpired.”

(ECF-86 at p.12¶1)

Though the Court’s conclusion was developed in a summary judgment context, it seems to satisfy a standard of proof much higher than the bare minimum required to deny summary judgment and should be applicable in the context of a Rule 12(b)(6) Motion.

Black’s Law defines “unequivocal” as “free from uncertainty.” 10

This comports with other dictionary definitions that define unequivocal as “leaving no doubt.”11

They preclude the possibility that any doubt or uncertainty can exist in matters of acceleration and abandonment.

The mere existence of the genuine issue of material fact identified by this Court and affirmed by the Fifth Circuit (ECF-125 at pp.14-15) establishes ipso facto the very uncertainty necessary for this Court to rule that—as a matter of law and not merely for purposes of summary judgment— Plaintiffs’ acceleration of the Note was not abandoned.

The U.S. Supreme Court recognizes three general standards of proof:

1) preponderance of the evidence (the minimum standard),

2) clear-and-convincing evidence (the intermediate standard),

and

3) beyond a reasonable doubt (the highest standard).12, 13

It notes further that the addition of the word “unequivocal” creates a burden “approximating, if not exceeding, that used in criminal cases”—i.e. beyond reasonable doubt—which higher burden is required for cases

10 Cassano v. Shoop, 10 F.4th 695 No. 18:3761 F.4th (6th Cir. August 26, 2021) “A request is unequivocal if it’s ‘free from uncertainty.’ Unequivocal, Black’s Law Dictionary (11th ed. 2019)”

11 Standing alone, the term “unequivocal” means proof that admits of no doubt, a burden approximating if not exceeding, that used in criminal cases.

Webster’s Third New International Dictionary 2494 (1961);

“Unequivocally” – (adverb) In a way that is total, or expressed very clearly with no doubt

– Cambridge Dictionary https://dictionary.cambridge.org/dictionary/english/unequivocally;

12 Addington v. Texas, 441 U.S. 418, 423–24, 99 S.Ct. 1804, 60 L.Ed.2d 323 (1979)

13 Mondaca-Vega v. Lynch, 808 F.3d 413 (9th Cir. 2015)

with “unusually drastic” consequences.14

The standard actually met by the Magistrate in reaching her findings appears to be sufficiently stringent to warrant giving dispositive effect to the Court’s rulings that Plaintiffs’ evidence did not manifest the necessary unequivocal intent to abandon acceleration and that, therefore, Plaintiffs’ acceleration of the Note was not abandoned.

Accordingly, Plaintiffs’ claim of abandonment “fail[s] to state a claim upon which relief can be granted,”

The purchase of servicing rights from OneWest did not make Ocwen/PHH its successor-in-interest – Plaintiffs have provided no evidence or authority to show that, simply because Ocwen purchased servicing rights from OneWest in the “mortgage servicing rights sale and purchase agreement” between them (see Supra at p.6 Fn.4), it had somehow become its successor-in-interest.

In fact, because “Texas law does not generally recognize successor liability for subsequent purchases of corporate assets” (Allied Home Mortg. Corp.. v. Donovan, 830 F. Supp. 2d 223, 233 (S.D. Tex. 2011)),15 the opposite is true.

Allied establishes that:

“There is no successor in interest when the acquiring corporation did not expressly agree to assume the liabilities of the party to the agreement because ‘successor’ has a specialized meaning ‘beyond simple acquisition.’” 16

Plaintiffs have provided no evidence that Ocwen agreed to assume—let alone “expressly” agreed to assume—any of OneWest’s servicing-related liabilities associated with the claims

14The Supreme Court further noted that “the term ‘unequivocal’ is not constitutionally required, although the states are free to use that [higher] standard.” Addington, 441 U.S. at 432, 99 S.Ct. 1804.

15 Further citing “Norfolk Southern Ry. Co. v. Trinity Industries, Inc., No. 3–07–CV–1905–F, 2009 WL 362437, *4 (N.D.Tex.2009), citing McKee v. Am. Transfer & Storage, 946 F.Supp. 485, 487 (N.D.Tex.1996), citing Article 5.10(B) of the Texas Business Corporation Act, effective Sept. 1, 1993.”

16 citing further “Sitaram v. Aetna U.S. Healthcare of N. Tex., Inc., 152 S.W.3d 817, 828 (Tex.App.-Texarkana 2004). See also C.M. Asfahl Agency v. Tensor, Inc., 135 S.W.3d 768 (Tex.App.-Houston [1st Dist.] 2004)

(finding no successor liability because there was no express assumption by the successor to acquire the liability of the predecessor)”

Lamell originally filed against it in state court for its servicing failures and abuses.

Accordingly, Ocwen did not become a successor-in-interest to OneWest as a result of its purchase of OneWest’s servicing rights, nor did it become a successor-in-interest to OneWest’s actual successor, CIT Bank, N.A.

A.                 Release

(Complaint, ¶No.32)

Plaintiffs assert that Lamell released his limitations defense under the terms of his Settlement Agreement (“Agreement”) with CIT.17

(ECF-32-1 p.63, ¶6.2).

Their claim of Release is based entirely on a purported status as successors-in-interest to CIT.

Insofar as their claim of Release is predicated on successor-in-interest status and, as shown above, neither Plaintiff is a successor-in-interest to CIT, their claim of Release is false and not “plausible on its face.”

Plaintiffs have thus “fail[ed] to state a claim upon which relief can be granted”

Id.

Accordingly, the Court is should dismiss Plaintiffs’ claim of Release.

B.                 Res Judicata (Collateral Estoppel)

(Complaint, ¶No.33)

Plaintiffs’ claim of Res Judicata as the basis for dismissing Lamell’s defense of limitations, presented in his requests for declaratory relief in state court, is no longer viable.

In reviewing the Court’s grant of Plaintiffs’ res judicata claim, the Fifth Circuit pointed out that,

… unlike coercive relief, declaratory relief does not necessarily constitute the “full measure of relief to be accorded between the same parties on the same ‘claim’ or ‘cause of action.”

(ECF-125 at p.9)

… Mr. Lamell’s declaratory judgment “claim” was not really a claim at all; it was an “anticipatory defense to a potential claim.”

(ECF-125 at p.11)

Citing Kaspar Wire Works, Inc. v. Leco Engineering & Machine, Inc., 575 F.2d 530 (5th Cir. 1978) for authority, inasmuch as Lamell’s declaratory relief requests were not accompanied by specific claims seeking coercive relief, the Fifth Circuit concluded:

“We REVERSE the district

17 as set out in ¶ 32 of the Complaint

court’s determination that Mr Lamell is barred by res judicata from asserting his statute of limitations affirmative defense.”

As a result, Plaintiffs’ claim of Res Judicata can no longer be brought by Plaintiffs or countenanced by the Court.

As to collateral estoppel, Plaintiffs’ reference to this issue is not sufficiently specific or detailed for Lamell to formulate a meaningful response.

Here again, Plaintiffs “fail[] to state a claim upon which relief can be granted” Id., and Plaintiffs’ claim is “implausible on its face.”

Dismissal under Rule 12 would be appropriate.

C.                 Tolling

(Complaint, ¶No.31)

Plaintiffs’ claim that the pendency of the state court action, per se, prevented them from pursuing foreclosure is contradicted by the actions and positions actually taken during the pendency of that action by defendant OneWest on USBNA’s behalf.

Indeed, OneWest was free to file and in fact did file six consecutive foreclosure notices on USBNA’s behalf during the first years of the state court action between 2010 and 2013.18

Only three circumstances prevented OneWest from completing any of the foreclosure sales it had issued notice of:

1) a mutually-agreed upon suspension of foreclosure while a loan workout program Lamell was invited to apply for was under consideration,

2) a TRO issued to hold off foreclosure,

and

3) a stay applied for and granted pending completion of an ongoing appeal, paid for with an up-front cash deposit and monthly cash installments totaling more than $30,000.

In short, it was not the pendency of legal proceedings that, per se, prevented foreclosure, it was the agreement, TRO, and “paid-for” stay that prevented foreclosure.

Had those not gone into effect, OneWest would have been able to complete any of its noticed sales in short order.

18 The six Notice[s] of Acceleration Enclosing Substitute Trustee Sale can be found in the record at ECF-57-3 pp.27-30 (the June 4, 2010 Notice), ECF-57-3 pp.32-34 (July 12, 2010 Notice), ECF-32-1 pp.54-56 (August 15, 2011 Notice), ECF-57-4 pp.2-4 (February 13, 2012 Notice), ECF-57-4 pp.12-14 (May 8, 2012 Notice), and ECF- 57-4 pp.21-23 (February 8, 2013 Notice between 2010 and 2013. Each notice identifies OneWest—not CIT—as attorney-in-fact and mortgage servicer.

Plaintiffs cite Jorrie v. Bank of New York Mellon Tr. Co., N.A., 740 F. App’x 809, 813 (5th Cir. 2018) to support their argument that litigation tolls limitations (ECF-164 at p.8 ¶ 31).

Jorrie, however, does not support Plaintiffs’ argument. 19

Instead, it involves a fact pattern similar to that exhibited in Lamell’s state action 20 in which limitations were tolled only as a result of stays formally applied for and granted subject to payments of bond amounts and specific agreement between Lamell, OneWest, and the court.

Again, limitations were in no way tolled by the mere onset or pendency of litigation itself.

In Jorrie, limitations were tolled only because the bank was formally prevented from foreclosing by specific and limited stays put in place by multiple TRO’s and bankruptcy-related stays.

Added together, these filings and automatic stays tolled and extended the running of limitations for nearly 300 days.

Then, before the extended period expired, the bank suspended the running of limitations altogether by unequivocally rescinding/abandoning acceleration via a clear written notice of rescission as provided for under TEX. CIV. PRAC. & REM. CODE §16.036.

Upon the bank’s re-acceleration of the note months later, the clock started running again on a new four-year limitations period.

When a claim was then filed for quiet title, it was denied because imitations had not yet expired.

Thus, instead of supporting Plaintiffs’ tolling claim, Jorrie provides a textbook example of what can and should be done to toll limitations.

Indeed, it shows the very steps Plaintiffs could and should have taken—but failed to—to protect their

19 Plaintiffs’ further citations to Devdara L.L.C. v. v. Wells Fargo Bank, N.A., No. 4:16-CV-00140, 2017 WL 2537345 (S.D. Tex. June 9, 2017) (citing Meachum v. Bank of N.Y. Mellon Trust Co., No. 3:13-cv-2322-N, 2015 WL 765982 *3 (N.D. Tex. Feb. 20, 2015)); and Boren v. U.S. Nat. Bank Ass’n, 807 F.3d 99, 106 (5th Cir. 2015) are likewise unavailing.

None of these cases support Plaintiffs’ claim that the litigation in Defendant’s state court action, per se, tolled limitations throughout its pendency.

20 Defendant’s showing that limitations for non-judicial foreclosure were tolled three times: from August 25 to December 20, 2011 for 117 days, from February 28, to April 3, 2012 for 35 days, and from May 31, 2012 to January 31, 2014 for 603 days—all together totaling 755 days—is not disputed.

(ECF-57-3 at p.24 ¶¶39-44)

(See also Appellant’s Brief, U.S. Bank Nat’l Ass’n v. Lamell, No. 21-20326 (5th Cir. June 2, 2022), Document: 00516047820) (Judicial Notice Requested)

enforcement remedies and prevent limitations from expiring.21

Plaintiffs’ reference to Meachum, as in Jorrie, is unavailing in that it relies on the fact that an additional notice indicating the lender’s intent to accelerate was sent out.

It was the combination of the first and second notices that supported the Court’s determination that abandonment had occurred.

Plaintiffs’ reference to Devdara is unavailing because it involves legal circumstances substantially different from this case.

D.                 Equitable/Contractual Subrogation

(Complaint, ¶¶ 46, 50)

Under the Law of the Case, Plaintiffs cannot invoke equitable or contractual subrogation.

Upon conclusion of Lamell’s appeal, the Fifth Circuit ruled as follows:

[W]e AFFIRM that part of the district court’s order holding that a genuine dispute of material fact exists as to whether the Appellees abandoned their acceleration of the underlying loan’s maturity.

We REVERSE the district court’s determination that Mr. Lamell is barred by res judicata from asserting his statute of limitations affirmative defense, as well as its determination that the Appellees are entitled to foreclosure under the theories of contractual and equitable subrogation.

(ECF-125 at pp.15-16)

However, a related case, specifically concerning equitable subrogation in a mortgage foreclosure22 context, was pending before the Supreme Court at the time.  Even though the Court of Appeals reversed the Court’s grant of Plaintiffs’ equitable subrogation claim, it decided to remand the equitable subrogation issue to allow for the possibility that the Supreme Court might come to a different conclusion in that case.

The decision that ultimately issued harmonized with, and effectively finalized, the Court of Appeals’ ruling that Plaintiffs are not entitled to foreclosure under equitable subrogation.

Thus it became Law of the Case that Plaintiffs cannot invoke

21 Plaintiffs neglected to file a suit or claim to collect on the Note within the six years allowed by statute despite the fact that they were never in any way impeded or prevented from doing so.

The running of the six-year limitations for collection on the note was unaffected by any of the tolling periods applicable to foreclosure.

Accordingly, limitations for collection expired on June 4, 2016, six years after OneWest’s June 4, 2010 notice of acceleration.

22 PNC Mortg. v. Howard, No. 21-0941 (Tex. May 12, 2023)

equitable subrogation to overcome Lamell’s limitations defense.

The Court is constrained to dismiss Plaintiffs’ claim of Contractual/Equitable Subrogation on the basis that Plaintiffs’ claim is precluded under the Law of the Case.

As such, Plaintiffs “fail[] to state a claim upon which relief can be granted.” FRCP 12(b)(6) and Plaintiffs’ claim is not “plausible on its face.”

E.                 Limitations (Complaint, ¶No.26)

Regarding a lender’s enforcement options, the note and lien are separate obligations with separate remedies 23 subject to separate limitations.

The Statute of Limitations for bringing a suit for collection on a note accelerated to maturity is six years.

(TEX. BUS. & COM. CODE ANN. §3.118(a))

The Statute of Limitations for completing a Non-Judicial Foreclosure and/or for bringing a suit or claim for Judicial Foreclosure is four years.

(TEX. CIV. PRAC. & REM. CODE ANN. §§16.035–.037) 24

If the debt is barred by the statute of limitations, the trustee has no authority to conduct a foreclosure sale.

Stubbs v. Lowrey’s Heirs, 253 S.W.2d 312 (Tex.App.- Eastland 1952, ref’d n.r.e.).

Because the lien is incident to and inseparable from the debt it secures, if the debt is barred by limitations, the lien is likewise barred.

University Savings & Loan Ass’n v. Security Lumber Co, 423 S.W.2d 287 (Tex. 1967).

In her Amended Memorandum and Recommendation, the Magistrate found that “the Court cannot find as a matter of law that the statute of limitations is unexpired.”

On reviewing the issue, the Fifth Circuit noted, 25 certain tollings have occurred.

Factoring in the applicable tollings however, (see Supra at p.17 Fn.20) limitations for non-judicial foreclosure, judicial foreclosure, and collection expired on June 28, 2016, March 3, 2016, and June 4, 2016

23 Kempner v. Comer, 11 S.W.194, 196 (Tex. 1889)

24 “On the expiration of the four-year limitations period, the real property lien and a power of sale to enforce the real property lien become void.”

TEX. CIV. PRAC. & REM. CODE ANN. §16.035(d)

25 In Fn.5 of its Opinion, (ECF-125 at Fn.5) the court notes as follows:

“Mr. Lamell concedes in his brief that some tolling occurred, which pushed back the deadline to bring suit by around two years. Even accepting that as true, any such tolling is immaterial here.”

respectively.26

As shown Supra at B. p.10-12, the law of the case as set by the Opinion of the Fifth Circuit, establishes that abandonment did not occur.

Furthermore, the Fifth Circuit acknowledged as “undisputed” that acceleration occurred on June 4, 2010, and that Plaintiffs did not bring suit to foreclose within four years of that date

(ECF-125 at p.13).

Together with the further finding that Plaintiffs “failed to present evidence of an unequivocal intent to abandon the prior accelerations,” (ECF-86 at p.12) each of the conditions required for the Court to rule that limitations expired has been satisfied.

Therefore, a final ruling that limitations have expired is indicated.

As such, Plaintiffs “Fail[] to state a claim upon which relief can be granted” and dismissal under Rule 12 is warranted.

F.                  Entitlement to Foreclose

(Complaint, ¶No.42)

As established above, Limitations have expired.

Therefore, Plaintiffs no longer have any right to pursue collection on the Note or to conduct non-judicial foreclosure of Lamell’s property.

Likewise, limitations have expired for judicial foreclosure, and Plaintiffs no longer have any right to file a claim or suit for judicial foreclosure.

Because the lien is incident to and inseparable from the debt it secures, if the debt is barred by limitations, the lien is likewise barred.

University Savings & Loan Ass’n v. Security Lumber Co, 423 S.W.2d 287 (Tex. 1967).

Given the above, Plaintiffs “fail to state a claim upon which relief can be granted,” and dismissal under Rule 12 is warranted.

26 The expiration of limitation on the Note renders the Deed of Trust void (Under Texas Law, the mortgage follows the Note – ibid. University Savings & Loan Ass’n v. Security Lumber Co, 423 S.W.2d 287 (Tex. 1967)) and the running of limitations associated with Plaintiffs’ power of sale and foreclosure remedies effectively moot.

I.                       CONCLUSION

The Law of the Case set by the Opinion of the Fifth Circuit Court of Appeals, as further supported by the final decision of the Supreme Court in Howard, and taken together with the facts and argument herein, establish that, under Rule 12, all of Plaintiffs’ claims should be dismissed without prejudice.

Lamell hereby also registers his intent to file an amended answer to Plaintiffs’ newly- amended complaint with counterclaims, affirmative defenses, and requests for relief of his own and expressly reserves the right to do so.

II.               PRAYER

WHEREFORE, PREMISES CONSIDERED, Lamell prays that the Court dismiss all of Plaintiffs’ claims with Prejudice and grant him all other relief to which he may be entitled.

Lamell intends to file a Second Amended Answer with counterclaims, affirmative defenses and requests for relief and hereby expressly reserves the right to do so.

Date: April 23, 2024

Respectfully Submitted,

/s/ J. M. Arpad Lamell

J M Arpad Lamell, pro se
5131 Glenmeadow Drive
Houston, Texas 77096
lamell@alum.mit.edu