Stop 736 Foreclosure Litigation: Linda Allan v Mr Cooper aka Nationstar Mortgage LLC in Court 11

COMES NOW, Nationstar Mortgage, LLC (“Defendant” or “Nationstar”), Defendant in the above-styled and numbered cause, and files this its Summary Judgment Reply in response to Plaintiff Linda S. Allan’s (“Plaintiff” or “Borrower”) Response to Summary Judgment filed in this cause.

In support Nationstar’s Motion for Summary Judgment, Nationstar would respectfully show unto the Court by way of Summary Judgment Reply the following:

I. SUMMARY

1.                  Plaintiff seeks to avoid summary judgment by arguing that:

(1) Nationstar misapplied payments to the loan circa 2012,

and

(2) limitations has expired on Nationstar’s right to enforce its deed of trust lien through foreclosure.

Plaintiff’s arguments both fail as a matter of law:

a.      A Judgment Authorizing Foreclosure Already Exists.

Plaintiff is incorrect that Nationstar has lost the right to enforce its deed of trust through foreclosure under the applicable four year statute of limitations regarding enforcement of a deed of trust lien.

Plaintiff fails to understand that Nationstar already possesses a final judgment authorizing foreclosure.

Nationstar has ten years to execute on the existing final judgment. Ten years have not expired from the date of the final judgment, that being January 5, 2018.

b.      Res Judicata Bars Plaintiff’s Ability to re-litigate matters from 2012 given the preclusive effect of a Judgment rendered January 5, 2018.

The Texas Supreme Court has consistently held that res judicata bars not only claims that were actually litigated but also those that could have been litigated in the prior action.

Plaintiff previously sued Nationstar over Nationstar’s right to foreclose.

Nationstar obtained judgment against Plaintiff in 2018 dismissing Plaintiff’s claims with prejudice.

Now, herein, Plaintiff wishes to re-hash whether payments made in year 2012 work to prohibit Nationstar’s right to foreclose.

Res judicata bars Plaintiff’s actions.

II.

ARGUMENT AND AUTHORITIES

A.                A Judgment Authorizing Foreclosure Already Exists.

2.                  Plaintiff’s opposition to summary judgment hinges on Plaintiff’s belief that Nationstar’s right to foreclose its deed of trust lien has been lost to limitations pursuant to either Civil Practice & Remedies Code §16.035 or §16.004.

Plaintiff fails to understand that the foregoing periods of limitation to commence an action have nothing to do with a litigant’s ability to enforce an existing judgment for foreclosure.

3.                  The summary judgment record is clear that a Final Judgment authorizing foreclosure of the home equity loan was obtained by Nationstar against Plaintiff in prior litigation.

The Final Judgment provides in part, “Furthermore, this judgment serves as an Order authorizing Nationstar to foreclose the lien created under Tex. Const. art. XVI, §50(a)(6).”.

4.                  Nationstar has ten years to execute on the Final Judgment.

Section 34.001(a) of the Texas Civil Practice & Remedies Code provides that “[i]f a writ of execution is not issued within 10 years after the rendition of a judgment of a court of record or a justice court, the judgment is dormant and execution may not be issued on the judgment unless it is revived.”

Tex. Civ. Prac. & Rem. Code § 34.001(a).

As such, once Nationstar obtained the foreclosure judgment, that foreclosure judgment must be executed on within 10 years or it is dormant (unless revived).

See Tex. Civ. Prac. & Rem. Code §34.001.

5.                  Plaintiff theorizes Nationstar’s limitations period has expired because Plaintiff confuses the time period in which a judgment creditor can execute on a judgment with the time period provided to bring suit to foreclose after acceleration of a debt and /or collection on a note.

Plaintiff focuses on Sections 16.035 and 16.004 of the Texas Civil Practice and Remedies Code as being applicable to this case, but it is not. Section 16.035(a) of the Texas Civil Practice and Remedies Code provides that 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).

For this reason, once a lender accelerates a mortgage loan, any suit necessary to enforce the related deed of trust should be filed within four years of acceleration of the debt upon fear of bar.

Nationstar timely brought its claim to foreclose the Deed of Trust lien in the prior litigation and obtained a Final Judgement authorizing foreclosure.

6.                  Section 16.035(b) of the Texas Civil Practice and Remedies Code addresses something slightly different.

This section addresses a lender’s need to conduct a foreclosure sale within four years of when the cause of action accrues.

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

Section 16.035(b) states that 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).

7.                  Borrowers routinely argue that a lender must comply with both sections 16.035(a) and (b) of the Texas Civil Practice & Remedies Code, meaning that a lender must not only file suit within four years of acceleration but also conduct any resulting foreclosure sale within the same time period.

Courts have specifically rejected this argument. By way of example the Fifth Circuit (applying Texas substantive law) held in Couch v. Bank of New York Mellon,

The Couches contend that §16.035(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 Tex. App. LEXIS 1365, (Tex. App.—Fort Worth Feb. 25, 2010, pet. denied) (emphasis added) (quoting § 16.035(a)).

Couch, 2024 U.S. App. LEXIS 25701 (emp. in the orig.).

Couch v. Bank of New York Mellon, Case No. 24-10297, 2024 U.S. App. LEXIS 25701 (5th Cir. Oct. 11, 2024).

8.                    Couch is no outlier.

Less than five months ago, Plaintiff’s argument was rejected again in Holcomb v. Specialized Loan Servicing, LLC. In Holcomb, the court held,

The Holcombs take the position that, to be timely, a foreclosure sale had to occur within four years of the entry of the August 2013 Judgment.

This is simply not the law.

To the contrary, it is well-settled that so long as a party seeking foreclosure brings an action within the four-year limitations period, “the plain language of section 16.035(a) does not require that the actual foreclosure occur within the four-year limitations period.”

Metcalf v. Wilmington Sav. Fund Soc’y, FSB, No. 03-16-007950-cv, 2017 Tex. App. LEXIS 2627 (Tex. App.—Austin Mar. 29, 2017, pet. denied).

Holcomb v. Specialized Loan Servicing, LLC; No. 3:21-cv-00210; 2024 Dist. LEXIS 161326 (S.D. Tex. Sept. 9, 2024) (noting that a number of other courts have followed this line of reasoning) (emp. added);

also see

Maluski v. Rushmore Loan Mgmt. Servs., LLC, Case No. 14-17-00233-CV; 2018 Tex. App. LEXIS 8092) (Tex. App.—Houston [14th Dist.] Oct. 4, 2018) (same).

9.                     Holcomb went on to state that simply because a mortgagee meets the limitations period by filing suit within four years per Tex. Civ. Prac. & Rem. Code §16.035(a), that does not mean a mortgagee can wait an indiscriminate amount of time to conduct a foreclosure sale following the entry of a judgment.

In recognizing the distinction between meeting limitations by filing a suit compared to the period within which a party can execute on a judgment, the Holcomb court explained,

This is not to say, however, that a lender can obtain a final judgment authorizing non-judicial foreclosure and wait an indeterminate period of time before actually foreclosing.

Rather, once a final judgment has issued, the lender has 10 years to execute the judgment before it becomes dormant.

See Tex. Civ. Prac. & Rem. Code Ann. § 34.001;

see also

Cox v. Nelson, 223 S.W.2d 84, 85 (Tex. App.— Texarkana 1949, writ ref’d)

(permitting foreclosure of judgment lien against real property where writ of execution did not issue for more than nine years—but still within 10 years—after judgment was issued).

Holcomb, 2024 Dist. LEXIS 161326 at *n.4;

also see

Strange v. Deutsche Bank Nat’l Trust Co., No. 4:21-cv-03298, U.S. Dist. LEXIS 53968 (S.D. Tex. Mar. 25, 2022)

(foreclosure sale noticed seven years after entry of final judgment deemed timely).

10.              Once the amended final order was obtained in January of 2018, the limitations period for execution on the judgment is ten years.

See, Tex. Prop. Code §52.006.

The Texas Property Code specifically provides in part,

(b)  a judgment lien continues for ten years following the date of recording and indexing of the abstract, except if the judgment becomes dormant during that period the lien ceases to exist.

Tex. Prop. Code Ann. §52.006(b).

As previously recognized by the Beaumont Court of Appeals in Shaw v. Jackson, once a judgment has been entered on a note secured by a deed of trust and foreclosure ordered, the four-year statute of limitations no longer applies.

Rather, the judgment can be enforced against the parties with foreclosure under the deed of trust at any time within ten years after the judgment’s rendition.

As stated by the Beaumont court,

The debt evidenced by the note took the form of a judgment in that suit, and the judgment itself, instead of the note, evidenced the debt owed by White and wife to Lowry.

Execution was issued upon that judgment within the year after its rendition, and thereby the debt and obligation evidenced by the judgment were preserved for a period of ten years, and no statute of limitation of this state other than the 10- year statute could successfully pleaded against the debt…

Shaw v. Jackson, 227 S.W. 520 (Tex. App. – Beaumont 1920).

11.              Simply put, ten years have not elapsed since Nationstar obtained a Final Judgment granting Nationstar foreclosure.

Plaintiff confuses the limitations period for bringing a lawsuit for foreclosure from the limitation period for enforcing a judgment granting foreclosure.

As a result, Plaintiff’s defense to summary judgment, based on the expiration of limitations, fails.

B.                 Res Judicata Bars Plaintiff’s Latest Tactics.

12.              In creative fashion, Plaintiff argues in opposition to summary judgment that Nationstar misapplied funds and/or extended additional credit to Plaintiff during the years 2012 and 2013.

In short, Plaintiff attempted to make partial mortgage payments to her mortgagee, but those payments were rejected because they were insufficient to cure the default at the time.

Plaintiff theorizes that since some of the payments were deposited into Nationstar’s account, and then the funds were issued back out to Plaintiff via check, that the Nationstar accepted the funds and then modified the note to extend Plaintiff additional funds due under the loan.

13.              As interesting and creative as Plaintiff’s argument is, the argument fails to overcome the bar to re-litigating matters provided by the doctrine of res judicata.

Plaintiff sets out in her summary judgment response that these “payments” were made in 2012 and 2013.

This admission alone is damning to Plaintiff’s argument. As Nationstar obtained a Final Judgment in 2018, Plaintiff’s claims about misapplication of funds in 2012-2013 was available to her to litigate within the 2018 litigation.

The finality of the prior litigation now bars Plaintiff from attempting to dredge up new theories as to why foreclosure should not go forward.

14.              As provided by black letter law from the Supreme Court of Texas,

The scope of res judicata is not limited to matters actually litigated; the judgment in the first suit precludes a second action by the parties and their privies not only on matters actually litigated, but also on causes of action or defenses which arise out of the same subject matter and which might have been litigated in the first suit.

Barr v. Resolution Trust Corp., 837 S.w.2d 627, 630 (Tex. 1992).

In the prior litigation, Nationstar was granted judgment authorizing foreclosure.

The judgment was rendered on January 5, 2018.

Plaintiff’s allegations (now) that loan payments were misapplied back in 2012 were available to Plaintiff to be asserted within the 2018 litigation defending against Nationstar’s cause of action for foreclosure.

As, such res judicata works to prohibit Plaintiff from litigating now what should have been litigated back then.

PRAYER

WHEREFORE, PREMISES CONSIDERED, Defendant Nationstar Mortgage, LLC prays that after consideration of its Motion for Summary Judgment and this Reply, the Court grant summary judgment in its favor dismissing all of Plaintiff’s claims with prejudice, and awarding Defendant any and all other relief, whether at law or in equity, to which Defendant Nationstar may be justly entitled.

Respectfully submitted,

COMES NOW, Plaintiff, Linda Allan, (“Plaintiff’) and files her response to Defendant, Nationstar Mortgage, LLC’s, Motion Summary Judgment and in support of her response would show the Court the following:

Synopsis

This case involves an attempt by a Lender, Nationstar Mortgage, LLC, to foreclose on a home equity loan. The Lender has made a motion for summary judgment. Borrower, Linda Allan, has two points of contention affecting the Lender’s rights:

First, the Lender modified the loan by paying to Borrower a certain sum. Such modification did not conform to the Texas Constitution’s provisions which allow for home equity loans in the State of Texas.

Second, the amount of the debt claimed by the Lender includes amounts (payments) that matured more than four (4) years before the action was filed and thus collection of the amounts that were more than four (4) years old are barred by the statute of limitations.

I.          Factual & Procedural Background

1.                  This action originated when Plaintiff, Linda Allan (“Plaintiff’) filed suit against Defendant, Nationstar Mortgage, LLC (“Defendant”) to receive the appropriate remedies associated with the following causes of actions: Violation of the Texas Constitution, Statute of Limitations, breach of contract, demand for accounting, declaratory judgment, and waiver, estoppel, and failure to mitigate damages.

2.                  The Plaintiff along with the Plaintiffs husband (Ziad Allan) at the time entered into and agreed to a home equity loan.

The Plaintiff and the’ Plaintiffs husband were both executing parties to the home equity loan.

3.                  The Plaintiff made several payments but ultimately failed to make timely payments under the original terms of the home equity loan.

The Defendant and Plaintiff agreed to a home equity loan modification and reorganization of the original loan to include all the incurred penalties, fees, and interest in the new home equity loan modification.

4.                  The Plaintiff again made payments under the terms of the new home equity loan modification.

However, eventually the Plaintiff failed to make timely payments, but this time the Plaintiff did attempt to make payments that would allow the Plaintiff to catch with the past payments, fees, and interest.

5.                  The Plaintiffs attempts to make payment were met with two different responses from the Defendant.

One response by the Defendant to the Plaintiffs checks was met with the response that the Defendant would not accept any form of payment unless it was in the amount necessary to bring the account back in good standing.

The other response was the Plaintiff would make the payment and the payment would be deposited into the Defendant’s bank account.

The Defendant would then advance the same amount to the Plaintiff, which the Plaintiff reasonably understand to be an advancement of additional funds by the Defendant.

II.                Summary Judgment Standard

6.                  The purpose of summary-judgment is to permit courts to summarily end a case when there is no genuine issue of facts, and dispose of cases that involve unmeritorious claims or untenable defenses.

G&H Towing Co. v. Magee, 347 S.W.3d 293, 296-97 (Tex. 2011).

When evaluating a motion for summary judgment based on summary-judgment proof, the court must do the following:

(i) assume all the non- movants proof is true;

(2) make every reasonable inference in favor of the non-movant;

and

(3) resolve all doubts about the existence of a genuine issue of material fact against the movant.

MD. Anderson Hosp. & Tumor Inst. V. Willrich, 28 S.W.3d 22, 23 (Tex. 2000).

7.                    The non-movant can defeat a motion for summary judgment by showing the summary-judgment evidence raises a genuine issue of material fact.

Dillard’s, Inc. v. Newman, 299 S.W.3d 144, 148 (Tex. App.-Amarillo 2008, pet. denied).

The movant has the burden of showing

(1) there is no genuine issue of material fact

and

(2) the movant is entitled to judgment as a matter of law.

Tex. R. Civ. Proc. 166a(c).

Only after the movant has established that it is entitled to summary judgment does not the burden shift and the nonmovant must produce summary judgment evidence a fact issue.

Casso v. Brand, 776 S.W.2d 551, 556 (Tex. 1989).

III.             Summary Judgment Evidence

8.                  The Plaintiff would provide the following summary judgment Evidence:

A. The Declaration of the Plaintiff, Linda Allan. Attached here to as Exhibit “1”

IV.             Arguments & Authorities

9.                  There is the longstanding tradition and history in the State of Texas to provide protection against a person’s ability to lose their homestead, the homestead rights were and continue to be very protectionist in nature and as evidenced by the fact that home equity loans are regulated and governed not by statute, but the Texas Constitution.

(Sims v. Carrington Mortg. Servs., LLC, 440 S.W3d 10, 13 (Tex. 2014).

10.                The Plaintiff has made numerous scheduled monthly payments to the Defendant.

The Defendant would receive the monthly payments and would either return the check to the Plaintiff without depositing the check or the Defendant would deposit the check into the Defendant’s bank account.

The Defendant then advanced to the Plaintiff for the same amount of the Plaintiffs check.

The payment of money to •the Plaintiff constitutes an additional advancement of funds by the Defendant to the Plaintiff. These events demonstrate a debt incurred by the Plaintiff and an additional increase in monies lent to the Plaintiff by the Defendant upon the Defendant’s issuing to the Plaintiff an additional check.

These additional advancements change the structure of the loan by modifying the amount due, the loan amortization, and the payment schedule.

These additional funds are additional advances not covered by the original loan documentation and therefore are in violation of the Texas Constitution, Article XVI, Section 50 (TEX. CONST. ART. XVI, § 50).

11.              When asked to opine on the constitutionality of a modification of a home equity loan the Texas Supreme Court found,

“as long as the original note is not satisfied and replaced, and there is no additional extension of credit, as we define it, the restructuring is valid and need not meet the constitutional requirements for a new loan.”

(Sims, 440 S.W.3d 10, 11-12).

The facts presented in this case are the opposite of the Sims case in that the additional advancements by the Defendant to the Plaintiff in the case at hand were additional extensions of credit.

The Plaintiffs balance increased as each additional advance was made by the Defendant to the Plaintiff.

Therefore, the facts at hand present and require that the additional advances be made in compliance with the Texas Constitution’s requirements.

12.              The Texas Constitution has not provided a definition for the phrase “extension of credit” as noted in Sims.

(Sims, 440 S.W3d 10, 15).

Rather the Texas Finance Code has provided us with the definition of the phrase “‘extensions of credit” means direct or indirect advances of money by a state bank to a person that are conditioned on the obligation of the person to repay the money or that are repayable from specific property pledged by or on behalf of the person.”‘

The Defendant gave the Plaintiff additional advances when the Defendant issued the Plaintiff checks that the Defendant was then obligated to provide the necessary funds upon the Plaintiffs presentment and depositing of those checks to the Plaintiffs banks.

13.              The Defendant claims in Defendant’s Motion Summary Judgment that the Plaintiff was “years” behind in making payments.

In the Plaintiffs petition plaintiff acknowledges that the Defendant had communicated to Plaintiff that Plaintiff has missed Fifty- Seven (57) monthly payments.

Texas Civil Practice and Remedies Code §16.035 provides for a four year statute of limitation to enforce a lien otherwise enforcement of the lien is void after four years.

The statute of limitations according to the Texas Civil Practice and Remedies Code §16.035 prohibits the Defendant’s attempt to foreclose on a cause of action, which began when Defendant rejected Plaintiffs’ monthly payment with notification that the Defendant would no longer accept payment unless the payment included all arrearages and/or the entire outstanding balance of the account.

Additionally, the Texas Civil Practice and Remedies Code §16.035 provides for a four year statute of limitation to enforce a lien otherwise enforcement of the lien is void after four years.

14.              The Plaintiff argues that the Defendant is barred from recovery of any monthly payments sought by the Defendant that are beyond the four year statute of limitation.

The Defendant alleges that there were at the time of the filing of this action 146 late payments, but the Plaintiff argues that the Defendant is barred from recovering any payment that is more than 48 months late because the collection of payments beyond the four year statute of limitations is prohibited.

15.              The amounts which represent payments that were due more than four (4) years prior to this action being filed are beyond the statute of limitations in accordance with Texas Civil Practice and Remedies Code §16.004(a)(3) as well.

The debts here referred to are each monthly payment that the Plaintiff was unable and not allowed to pay by the Defendant.

PRAYER

For the foregoing reasons, Plaintiff prays that after hearing, this Court deny the Defendant’s motion for summary judgment, and grant Plaintiff all other relief to which she is entitled.

Respectfully Submitted,

COMES NOW, Nationstar Mortgage, LLC (“Defendant” or “Nationstar”), Defendant in the above-styled and numbered cause, and pursuant to the Texas Rules of Civil Procedure files this Motion for Summary Judgment in response to Plaintiff Linda S. Allan’s (“Plaintiff” or “Borrower”) claims asserted in her Original Petition. In support thereof, Nationstar would respectfully show the Court the following:

I. SUMMARY

1.                  This is a foreclosure matter brought by a Plaintiff adept at utilizing the judicial system to remain in her property without paying for the mortgage, taxes or even insurance to insure that property.

Plaintiff has been in default under her loan agreement for over a decade (since 2011) and though Nationstar has a valid and final foreclosure judgment (which was affirmed on appeal and denied review by the Texas Supreme Court),1 Plaintiff continues to abuse the judicial process by delaying foreclosure with this suit.

All of Plaintiff’s claims asserted against Nationstar herein are barred by res judicata and her suit against Nationstar must be dismissed with prejudice.2

1 See Allen v. Nationstar Mortg., LLC, No. 14-18-00246-CV, 2019 Tex. App. LEXIS 5686 (Tex. App.–Houston [14th], July 9, 2019, pet. denied), attached hereto as Exhibit C.

2 This motion is limited to the claims asserted by Plaintiff. Nationstar does not move for summary judgment on its counterclaim at this time.

II. BACKGROUND FACTS & PROCEDURAL HISTORY

2.                  In order to stop foreclosure of the Property, Plaintiff filed this lawsuit on April 29, 2024, asserting claims for statute of limitations, breach of contract, accounting, declaratory judgment, and, for waiver, estoppel, and failure to mitigate damages.

All claims asserted by Plaintiff have been previously adjudicated against her, affirmed on appeal, and arise from Borrower’s failure to pay the monthly amounts due on her mortgage from February 1, 2011, to present. Plaintiff’s claims are barred by res judicata.

3.                  In this suit, Plaintiff asserts the same claims that she previously brought in her prior suit against Defendant in Linda Allan v. Nationstar Mortgage, LLC, in the 125th Judicial District Court of Harris County, Cause No. 2016-09047 (“Borrower’s Prior Suit”).

A comparison of the claims brought in this matter to the ones brought in Borrower’s Prior Suit reveals that they are identical.

Both this lawsuit and Borrower’s Prior Suit allege claims for improper extension of credit, statute of limitations, breach of contract, accounting, declaratory judgment, and, in the alternative, for waiver, estoppel, and failure to mitigate damages, all arising from Borrower’s failure to pay her mortgage.3

Those claims are herein barred.

4.                  In the Borrower’s Prior Suit, Nationstar was granted judgment dismissing all of Borrower’s claims with prejudice, affirming Nationstar’s valid and binding security interest in the property and authorizing judicial foreclosure of the subject property.4

The Judgment was affirmed on appeal by the Fourteenth Court of Appeals at Houston and the Texas Supreme Court denied review.

See Allan v. Nationstar Mortg., LLC, No. 14-18-00246-CV, 2019 Tex. App. Lexis 5686

3 Compare Exhibit A (Borrower’s Prior Suit) with the Original Petition filed by Plaintiff herein.

4 See Exhibit B (Order Granting Summary Judgment in favor of Nationstar and against Borrower Allan, entered January 5, 2018, in Cause No. 2016-09047, 125th Judicial District, Harris County, Texas (the “Judgment”).

(Tex. App.—Houston [14th Dist.] July 9, 2019, pet denied).5

The Judgment is valid for ten years from its date of entry, and even further if renewed prior to its expiration. The Judgment remains a valid judgment, thereby barring all of Plaintiff’s claims herein.

III. SUMMARY JUDGMENT EVIDENCE

5.                  In support of this motion, and in addition to the pleadings and evidence previously submitted to the Court in this matter of which Nationstar requests the Court take judicial notice, Nationstar attaches hereto and incorporates by reference the following exhibits in support of this Motion for Summary Judgment:

Exhibit A: Petition in Borrower’s Prior Suit, Linda Allan v. Nationstar Mortgage, LLC, in the 125th Judicial District Court of Harris County, Cause No. 2016-09047;

Exhibit B:      Final Judgment from Linda Allan v. Nationstar Mortgage, LLC , in the 125th Judicial District Court of Harris County, Cause No. 2016- 09047;

and

Exhibit C: Opinion of the Fourteenth Court of Appeals – Allan v. Nationstar Mortg., LLC, No. 14-18-00246-CV, 2019 Tex. App. Lexis 5686 (Tex. App.—Houston [14th Dist.] July 9, 2019, pet denied)

IV. ARGUMENTS AND AUTHORITIES

A.                Summary Judgment Standard.

6.                  To succeed on a traditional motion for summary judgment movant must show there is no genuine issue of material fact and that it is entitled to summary judgment as a matter of law.

See Tex. R. Civ. P. 166a(c);

Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex. 2009);

Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985).

To meet this burden, the movant must conclusively prove all essential elements of its claim.

MMP, Ltd. v. Jones, 710 S.W.2d 59 (Tex. 1986).

5 See Exhibit B-2 – Opinion of the Fourteenth Court of Appeals.

A matter is conclusively established if reasonable people could not differ on the conclusion to be drawn from the evidence.

City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex. 2005).

If the movant establishes its right to summary judgment as a matter of law, the burden shifts to the non-movant to present evidence that raises a genuine issue of material fact.

M.D. Anderson Hosp. & Tumor, Inst. v. Willrich, 28 S.W.3d 22 (Tex. 2000).

Summary judgment should be granted if the moving party can show the absence of a genuine issue of material fact and entitlement to judgment as a matter of law.

See, Black v. Victoria Lloyds Ins. Co., 797 S.W.2d 20, 23 (Tex. 1990).

7.                  The movant for a traditional motion for summary judgment has the burden to show that there are no genuine issues of material fact and that she is entitled to judgment as a matter of law.

Tex. R. Civ. P. 166a(c);

KPMG Peat Marwick v. Harrison Cnty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999).

If the movant’s motion for summary judgment facially establishes its right to judgment as a matter of law, then the burden shifts to the non-movant to raise fact issues precluding summary judgment.

See City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979).

In determining whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the non-movant will be taken as true.

Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex. 1985).

B.                 Res Judicata Bars This Suit.

8.                  “Res judicata prevents parties and their privies from relitigating a cause of action that has been finally adjudicated by a competent tribunal.”

Ingersoll-Rand Co. v. Valero Energy Corp., 997 S.W.2d 203, 206 (Tex. 1999) (emp. added).

“The rule of res judicata rests upon the policy of protecting a party from being twice vexed for the same cause, together with that of achieving judicial economy in precluding a party who has had a fair trial from relitigating the same issue.”

Benson v. Wanda Petroleum Co., 468 S.W.2d 361, 363 (Tex. 1971).

Res judicata also serves “[t]o prevent causes of action from being split, thus curbing vexatious litigation and promoting judicial economy.”

Casterline v OneWest Bank, FSB, 2018 WL 1755821 (Tex. App.— Corpus Christi 2018);

Ingersoll-Rand Co. v. Valero Energy Corp., 997 S.W.2d 203, 206–07 (Tex. 1999).

9.                  The doctrine of res judicata addresses the conclusive effects of judgments.

Puga v. Donna Fruit Co., 634 S.W.2d 677, 679 (Tex.1982).

The general principle of res judicata is simple: a party may not dispute a right, question, or fact distinctly put in issue and directly determined by a court of competent jurisdiction in a prior suit as a ground of recovery or defense in a later suit between the same parties.

Marange v. Marshall, 402 S.W.2d 236, 239–40 (Tex. Civ. App.— Corpus Christi 1966, writ ref’d n.r.e.).

Res judicata also bars a party from litigating matters in a later lawsuit that it could have raised, but did not raise, in a previous lawsuit.

Jeanes, 688 S.W.2d at 103; Abbott Labs. v. Gravis, 470 S.W.2d 639, 642 (Tex.1971) (emp. added).

All the elements of res judicata exist herein.

10.              Res judicata (claim preclusion) requires:

(1) a prior final judgment on the merits by a court of competent jurisdiction;

(2) identity of parties or those in privity with them;

and

(3) a second action based on the same claims that were raised of could have been raised in the first action.

Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex. 1996).

All three elements apply to Plaintiff’s lawsuit herein.

11.            The Petition filed by Plaintiff in Borrower’s Prior Suit and this lawsuit are identical save a few additions in the factual background portion of the current lawsuit.

All claims in both suits arise from Borrower’s failure to pay her mortgage for all payments since February 1, 2011, and are as follows:

a.                   Causes of action asserted in Borrower’s Prior Suit – improper extension of credit, statute of limitations, breach of contract, accounting, declaratory judgment, and, in the alternative, for waiver, estoppel, and failure to mitigate damages;

and

b.                  Causes of action asserted in this lawsuit – improper extension of credit, statute of limitations, breach of contract, accounting, declaratory judgment, and, in the alternative, for waiver, estoppel, and failure to mitigate damages.

12.              For the first element of res judicata, a final judgment on the merits by a court of competent jurisdiction exists as reflected by the Judgment granted in Nationstar’s favor in Borrower’s Prior Suit by the Harris County District Court, which was affirmed on appeal by the Fourteenth Court of Appeals.6

13.              As for the second element, the parties are identical in both lawsuits, with Linda Allan being the Plaintiff and Nationstar Mortgage, LLC as the Defendant.7

The second element is met for res judicata bar.

14.              Third, this lawsuit is based on the same claims and same facts that were raised or could have been raised in Borrower’s Prior Suit.

See Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex. 1996).

Allan asserts the exact same claims in both lawsuits and makes the same arguments herein regarding her loan, her alleged efforts to pay her loan, and her communications with Defendant regarding her loan that she raised in Borrower’s Prior Suit.8

All of Plaintiff’s arguments were previously dismissed with prejudice and affirmed. Further, the validity of the lien was recognized, and a foreclosure judgment was issued.

6 See Exhibit B-1.

7 Compare Exhibits A-1 and B-1 to the parties in this matter.

8 See footnote 1 and sources cited therein.

Res judicata bars this suit in its entirety and Plaintiff cannot maintain her attempts to circumvent foreclosure.

15.              In a very similar scenario with a borrower extending her battle over decade (and more) to remain in the Property without paying for her home equity loan, the Fifth Circuit stated,

“Given nearly a decade of free living ….there is no injustice in allowing that foreclosure to proceed.”

Deutsche Bank Nat’l Trust Co. v. Burke, 902 F.3d 548. (5th Cir. 2018)(emp. added.).

Here, there is simply no injustice in dismissing Plaintiff’s suit with prejudice as Plaintiff’s claims are barred by res judicata, and allowing Nationstar to execute upon its valid final judgment.

IV. PRAYER

WHEREFORE, PREMISES CONSIDERED, Defendant Nationstar Mortgage, LLC prays that after consideration of this Motion for Summary Judgment, the Court grant summary judgment in its favor dismissing all of Plaintiff’s claims with prejudice, and awarding Defendant any and all other relief, whether at law or in equity, to which Defendant Nationstar may be justly entitled.

Respectfully submitted,

By:      /s/ Shelley L. Hopkins

Shelley L. Hopkins
State Bar No. 24036497

BARRETT DAFFIN FRAPPIER
TURNER & ENGEL, LLP – Of Counsel
2802 Flintrock Trace, Suite B103
Austin, Texas 78738
(512) 600-4320
ShelleyH@bdfgroup.com
shelley@hopkinslawtexas.com

Robert D. Forster, II State Bar No. 24048470
BARRETT DAFFIN FRAPPIER TURNER & ENGEL, LLP
4004 Belt Line Road, Ste. 100
Addison, Texas 75001
(972) 386-5040
RobertFO@bdfgroup.com

ATTORNEYS FOR NATIONSTAR

TO THE HONORABLE JUDGE OF SAID COURT:

COMES NOW, Nationstar Mortgage, LLC (“Defendant” or “Nationstar”), Defendant in the above-styled and numbered cause, and files this Original Answer with Affirmative Defenses and Counterclaim in response to Plaintiff’s Linda S. Allan (“Plaintiff”) Original Petition (“Petition”).

In support of the foregoing, Nationstar would respectfully show the Court the following:

I. GENERAL DENIAL

1.                  Pursuant to Rule 92 of the Texas Rules of Civil Procedure, Nationstar generally denies each and every allegation contained within Plaintiff’s Petition and any amendments thereto and demands strict proof thereof as required by the Constitution and the laws of the State of Texas.

Defendant further reserves the right to plead further and in greater particularity as the case progresses.

II. AFFIRMATIVE DEFENSES

2.                   Nationstar asserts that all conditions precedent to Plaintiff’s rights to recover, if any, have not been satisfied, have not occurred or have not been waived.

3.                   Plaintiff’s claims are barred by res judicata, claim preclusion and issue preclusion.

4.                   Plaintiff’s claims are barred by judicial estoppel, judicial admissions and collateral estoppel.

5.                   Plaintiff’s claims are barred by unclean hands.

6.                   Plaintiff’s damages, if any, which Defendant does not admit, were caused in whole or in part by Plaintiff’s own acts, negligent or otherwise, and Defendant is thus not liable.

7.                   Plaintiff’s claims are barred due to Defendant’s compliance with the terms of the Deed of Trust and all applicable laws.

8.                   Nationstar asserts any and all limitations on exemplary damages, additional damages and/or punitive damages prescribed by the Texas Rules of Civil Procedure and/or case law and/or Civil Practice and Remedies Code.

9.                   Plaintiff’s claims are barred by her prior breach.

10.               Plaintiff’s claims are barred as Defendant holds a valid final judgment for foreclosure, affirmed on appeal.

III. COUNTERCLAIM

A.                Factual Background

11.               This proceeding concerns a home equity loan agreement, as the term “loan agreement” is generally defined under TEX. BUS. & COM. CODE § 26.02, created according to TEX. CONST. art. XVI, § 50(a)(6), secured by the property made subject of this suit and described below.

Plaintiff Linda S. Allan is the obligor on a certain Texas Home Equity Note (“Note”)1 and mortgagor of a Texas Home Equity Security Instrument (“Deed of Trust”) (together the “Loan Agreement”), recorded in the official public records of the Harris County, Texas2 encumbering the

1 See Exhibit A – Note.

2 See Exhibit B – Deed of Trust.

real property commonly known at 7512 Del Monte Drive, Houston, Texas 77063 (the “Property”) and more particularly described as follows:

LOT THIRTY-TWO (32), IN BLOCK ONE (1), OF HAMMERSMITH, SECTION ONE (1), AN ADDITION IN HARRIS COUNTY, TEXAS, ACCORDING TO THE MAP OR PLAT THEREOF RECORDED IN VOLUME 122, PAGE 63 OF THE MAP RECORDS OF HARRIS COUNTY, TEXAS.

12.               Defendant Nationstar is the beneficiary of the Loan Agreement by virtue of assignment and has the authority to enforce the loan agreement.3

13.               Plaintiff defaulted on the Loan Agreement for failure to make the required payments.4

Plaintiff was promptly notified of her default under the Note and demand was made on her to pay the past due amounts owing thereunder. Id.

Despite such notice and demand, Plaintiff failed to pay the amounts then due and owing under the Note which has only continued to accrue.

14.               Due to Plaintiff’s default,

Nationstar obtained a judgment allowing foreclosure on January 5, 2018,

which was affirmed on appeal by the Fourteenth Court of Appeals on July 9, 2019.

See Allan v. Nationstar Mortg., LLC, 2019 Tex. App. LEXIS 5686, 2019 WL 2939746, (Tex. App. – Houston [14th Dist.] July 9, 2019, pet. denied).5

Thereafter, the Texas Supreme Court denied review – on April 3, 2020.

By the time the mandate issued, the world was struck by the COVID-19 pandemic.

The Judgment is not dormant and Plaintiff may execute on the Judgment for ten years from its date of entry prior to the Judgment becoming stale.

In the event the prior Final Judgment has become impaired in any manner, Nationstar is entitled to relief as requested in this current lawsuit.

3 See Exhibit C – Assignment.

4 See Exhibit D – Notices of Default.

5 See Exhibit E – Foreclosure Judgment and Opinion of the Fourteenth Court of Appeals. The judgment and opinion affirming, also dismissed the same claims Plaintiff has made herein.

15.               Due to repeat filings of suit, much like this one, and appeals by Plaintiff against Defendant, Nationstar has been unable to foreclosure on the Property.

Due to demands being sent to Plaintiff, Nationstar’s recently filed an Application for Expedited Order Under Rule 736, which resulted in a Home Equity Foreclosure Order entered by the 157th Judicial District of Harris County, Texas on March 8, 2024.6

In response, Plaintiff then filed this suit.

Defendant Nationstar, in its capacity as the mortgagee, and its successors and assigns, now proceeds with this counterclaim, to the extent necessary and only in the event its prior judgment is unenforceable (which is denied) requesting judgment to allow for non-judicial foreclosure.

B.                 Declaratory Judgment

16.               Because the subject loan is a Texas Home Equity Loan, foreclosure requires a Court order.

Tex. Const. art. XVI, § 50(a)(6)(D).

While Nationstar believes its prior judgment for foreclosure remains valid, in the event the 2018 Final Judgment is not in all things enforceable, Nationstar files this counterclaim in the alternative.

17.               Defendant Nationstar seeks a declaratory judgment allowing it to proceed with the non-judicial foreclosure sale of the Property made subject of this suit.

Nationstar seeks a declaratory judgment that establishes

(1) that all conditions precedent to foreclose on the Property occurred;

(2) that the Plaintiff is in default on the loan;

(3) that Nationstar, as mortgagee, is entitled to proceed with its foreclosure proceedings;

and

(4) that the requisite notices were sent as required by the Deed of Trust and the Texas Property Code.

18.               Declaratory Judgment is appropriate when a real controversy exists between the parties, and the entire controversy may be determined by judicial declaration. Furthermore, the trial court is duty-bound to declare the rights of the parties as to those matters and has limited

6 See Exhibit F – Home Equity Foreclosure Order.

discretion to refuse a declaratory judgment and may do so only where judgment would not remove the uncertainty giving rise to the proceedings.

Spawglass Construction Corporation v. City of Houston, 974 S.W.2d 876 (Tex. App – Houston 1998, no writ).

Based on the UNIFORM DECLARATORY JUDGMENT ACT, TEX. CIV. PRAC. & REM. CODE §37.001, et. seq., and the Loan Agreement, Defendant Nationstar seeks a Declaratory Judgment from this Court with a judgment for non-judicial foreclosure of the Property pursuant to Tex. Const. art. XVI, § 50(a)(6)(D).

C.                Breach of Contract

19.               As explained above, in the event the 2018 Final Judgment is not in all things enforceable, Nationstar is now entitled to a judgment for foreclosure of the Property due to Plaintiff’s breach of the loan agreement.

As described above, on or about June 2, 2008, Plaintiff entered into a binding contract in the form of a Note and Deed of Trust.7

Together, the Note and Deed of Trust formed a Texas Home Equity Loan under Tex. Const. Art. 16, §50(a)(6) (the “Loan Agreement”).

20.               Under the terms of the Note, Plaintiff is obligated to pay the loan amount as prescribed in the Note and Deed of Trust.

Nationstar performed completely under the terms of the Loan Agreement. Plaintiff breached the terms of the Loan Agreement by failing to tender payments in accordance with the payment schedule of the Loan Agreement.

The Loan Agreement is in default for failure to make payments according to the terms of the Note and Deed of Trust. Therefore, there has been a material breach of the Loan Agreement.

21.               In accordance with the Texas Rules of Civil Procedure and Tex. Const. art. XVI, §50(a)(6) Nationstar, as mortgagee, seeks judgment for breach of contract, allowing the non- judicial foreclosure of the lien against the Property.

No personal liability is sought against Plaintiff.

7 See Exhibits A and B.

All other actions required by law or the terms of the Loan Agreement requisite to foreclosure of the security interest have been performed.

D.                Judicial Foreclosure

22.               In the event the 2018 Final Judgment is not in all things enforceable,

Nationstar is now entitled to a judgment for judicial foreclosure of the Property.

Texas law requires a party to secure a court order to foreclose on a home equity loan.

Tex. Const. art. XVI § 50(a)(6)(C).

Section 51.002 of the Texas Property Code provides for the sale of real property pursuant to a security instrument with a power of sale.

A lien subject to non-judicial foreclosure “may also be foreclosed by judgment in an action for judicial foreclosure.”

Tex. R. Civ. P. 735.3.

Therefore, pleading in the alternative, Nationstar asserts, a cause of action for judicial foreclosure.

Nationstar, as the successor in interest to the original lender, has the right to enforce the Note and Deed of Trust.

Nationstar has fully performed its obligations under the Loan Agreement; however, Plaintiff did not comply with the Loan by failing to substantially perform material obligations required under its terms (principally, the payment of amounts due under the Loan).

Plaintiff was provided with notice of default and intent to accelerate if the default was not cured.

The default was not cured.

23.               Nationstar has been forced to hire the undersigned attorneys to seek judgment allowing foreclosure as a result of the Plaintiff’s failure to comply with the Loan Agreement.

Nationstar is therefore entitled to and seeks judgment for its reasonable attorneys’ fees in this action, both through trial and in the event of a subsequent appeal, as provided by the Deed of Trust and under Texas law.

Defendant also seeks a writ of possession.

24.               All conditions precedent have been performed or have occurred.

E.                 Equitable & Contractual Subrogation

25.               In the alternative to the foregoing, Nationstar asserts a cause of action against Plaintiffs for equitable and contractual subrogation.

To the extent a portion of the proceeds of the Note were used to pay off prior lien interest(s), Nationstar is entitled, by law, to recover from Plaintiffs the amount of the payoff of the previous interest by way of a claim sounding in equitable subrogation.

26.               Proceeds from Plaintiff’s 2008 Home Equity Loan were used to pay off and discharge prior valid liens, secured by the Property, if the Court declares that the 2008 home equity loan is unenforceable for any reason, Nationstar is entitled to a lien by equitable subrogation in the amount of the payoff of the liens extinguished

LaSalle Bank Nat’l Ass’n v. White, 246 S.W.3d 616, 620 (Tex. 2008).

27.               Plaintiffs will be unjustly enriched if equitable subrogation and/or contractual subrogation is denied. Nationstar therefore requests that if the current home equity loan is found unenforceable, Nationstar be awarded a declaratory judgment awarding it a lien by equitable subrogation against the Property in the amount it expended to discharge prior liens, plus interest accruing from the date of the payoff.

F.                 Contractual Subrogation – Payment of Taxes.

28.               Pleading further, and in the alternative to the extent necessary, Nationstar further asserts that the Deed of Trust creates contractual rights of subrogation in favor of Nationstar in relation to Nationstar’s payment of the real property taxes assessed against the Property since origination of the Note.

Nationstar seeks enforcement of its right to contractual subrogation against Plaintiff.

Nationstar is entitled to a lien by equitable subrogation for each real property tax payment made by Nationstar in an effort to protect its lien interest in the Property.

29.               Nationstar seeks a lien by contractual subrogation in amount equal to the amount of all real property taxes advanced on behalf of Plaintiff and paid by Nationstar, which were paid by Nationstar in discharge of any potential tax lien against the Property arising after the origination of the Note.

G.                Damages

30.               Based on the breach in the respective obligations under the Loan Agreement, Nationstar has been damaged in an amount of at least of the payoff of the Loan Agreement.

That amount continues to accrue and Nationstar is further entitled to attorney fees, costs of court, interest, and all other fees and costs allowed to Nationstar under the terms and conditions of the Loan Agreement.

H.                Attorney’s Fees

31.               As a result of the breach of Plaintiff’s obligation under the Loan Agreement, Defendant Nationstar has been forced to retain the undersigned legal counsel to institute and prosecute this action.

32.               Under the terms of the Note and Deed of Trust, Plaintiff agreed to pay all reasonable attorney’s fees and costs of court incurred in enforcing the payment and collection of the Note and Deed of Trust, to include any appeal to a Court of Appeals or an appeal to the Texas or U.S. Supreme Court.

Pursuant to the terms of the Deed of Trust, Defendant Nationstar is entitled to recover its reasonable attorney’s fees for the services rendered in instituting and prosecuting this action.

IV. PRAYER

WHEREFORE, PREMISES CONSIDERED, Defendant Nationstar Mortgage, LLC prays that Plaintiff’s Petition be dismissed and that Plaintiff take nothing by way of her claims. Nationstar

further requests that judgment be granted in its favor with respect to all claims asserted herein, and for all further and other relief, whether at law or in equity, to which Nationstar may be justly entitled.

Respectfully submitted,

By:      /s/ Shelley L. Hopkins

Shelley L. Hopkins
State Bar No. 24036497

BARRETT DAFFIN FRAPPIER
TURNER & ENGEL, LLP – Of Counsel
2802 Flintrock Trace, Suite B103
Austin, Texas 78738
(512) 600-4320

ShelleyH@bdfgroup.com
shelley@hopkinslawtexas.com

Robert D. Forster, II
State Bar No. 24048470

BARRETT DAFFIN FRAPPIER TURNER & ENGEL, LLP
4004 Belt Line Road, Ste. 100
Addison, Texas 75001
(972) 386-5040
RobertFO@bdfgroup.com

Attorneys for Defendant