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Worthing v. Deutsche Bank National Trust Co.

Court of Appeals of Texas, Eighth District, El Paso

July 31, 2017


         Appeal from 33rd District Court of Burnet County, Texas (TC # 40677A)

          Before McClure, C.J., Rodriguez, and Hughes, JJ.


          ANN CRAWFORD McCLURE, Chief Justice.

         In this appeal, we review a summary judgment in favor of a lender and a loan servicing company following the foreclosure on Howard and Lisa Worthings' homestead. Like many cases of this type, the homeowners seek to stave off eviction and retain their home while the lender seeks to enforce a mortgage contract in the face of default and delinquency. For the reasons that follow, we affirm.


         Howard and Lisa Worthing allege that they refinanced the purchase of their homestead in Marble Falls, Texas, through Argent Mortgage Company, LLC (Argent) on August 12, 2003.[1]Howard executed a Texas Home Equity Note for $652, 500 (the Note) and a Texas Home Security Instrument (Deed of Trust) in favor of Argent. Argent indorsed the Note to Amerquest Mortgage Company. In turn, Amerquest later indorsed the Note in blank. Appellee Deutsche Bank National Trust Company, as Trustee for Argent Securities, Inc., Asset-Backed Pass-Through Certificates, Series 2003-W5 (Deutsche Bank) was in possession of the Note at the time of the summary judgment.

         The Note had a string of different loan service companies. Amerquest, which later changed its name to AMC Mortgage Services, Inc., originally serviced the Note. Two years later AMC assigned the loan servicing functions to Citi Residential Lending, Inc. Effective February 11, 2009, Citi Residential assigned the loan serving to Appellee Homeward Residential Inc., f/k/a American Home Servicing, Inc. (Homeward). As a part of that change, Citi Residential as the "Attorney in Fact for Argent, " conveyed, granted, sold, assigned, and transferred the Deed of Trust and Note to Deutsche Bank. The transfer document was executed by Crystal Moore, whose signature was notarized by Bryan Bly. As we note below, both of these persons are important to the Worthings' forgery contentions.

         On August 18, 2009, Homeward provided notice of default and notice of intent to accelerate the Note after the Worthings had stopped making payments. Thereafter, Deutsche Bank filed a proceeding under Tex.R.Civ.P. 736 to judicially authorize the foreclosure. A trial court granted it permission to do so on March 9, 2010. More than two years later, Deutsche Bank appointed a substitute trustee under the Deed of Trust and on July 3, 2012, the substitute trustee sold the property at a foreclosure sale.

         The Worthings, who were still living at the house, sued Deutsche Bank, Homeward, and others. The factual recitations in the lawsuit claimed that Argent did not qualify as one of the designated type of lenders allowed to make a home equity loan in Texas. Consequently, the Worthings assert that Argent automatically forfeited all principal and interest under the Note, and the ensuing foreclosure was invalid. As we explain in more detail below, the Worthings pled additional technical problems with the paperwork in the chain of title, including that the assignment is "fake" having been executed by "robo-signers."

         From the factual allegations, the Worthings allege causes of action for (1) wrongful foreclosure (2) quiet title (3) breach of contract (4) statutory violations of Chapter 51 of the Texas Property Code (5) violation of Chapter 392 of the Texas Finance Code (6) violation of the Texas Deceptive Trade Practices Act and (7) violation of Chapter 12 of the Texas Civil Practice and Remedies Code. Deutsche Bank and Homeward answered and filed a traditional and no-evidence motion for summary judgment. The traditional motion addressed Argent's status as a lender and laid out the chain of title documents for the Note and Deed of Trust. In its no-evidence motion, Deutsche Bank set out the pled causes of action and claimed the Worthings lacked evidence on one or more elements of each. The motion further recited that as of December 2, 2014, the Worthings were still living at the property and had made no payment since July 2009. The Worthings responded to the affirmative summary judgment claims, and responded to some, but not all of the challenged causes of action under the no-evidence portion of the motion. The trial court granted the motion and this appeal follows.[2]

         The Worthings present three issues with subparts, and we discern there are four remaining disputes between the parties: (1) whether the original lender, Argent, was authorized to make the Worthings' home equity loans; (2) whether the 2009 assignment of the Deed of Trust and loan to Deutsche Bank forged; (3) whether claimed discrepancies in the chain of title create a fact issue; and (4) whether the existence of a non-conforming copy of the Note creates a fact issue as to who now owns the note. Answering these questions resolves the ultimate issue of whether the trial court erred in granting summary judgment as to each of the Worthings' claims.


         We review a trial court's decision to grant summary judgment de novo. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). Deutsche Bank filed a hybrid motion including both traditional and no-evidence grounds. Rule 166a(i) permits a party to move for a no-evidence summary judgment "without presenting summary judgment evidence, " but requires the moving party to "state the elements as to which there is no evidence." Tex.R.Civ.P. 166a(i); Wade Oil & Gas, Inc. v. Telesis Operating Company, Inc., 417 S.W.3d 531, 540 (Tex.App.--El Paso 2013, no pet.); Aguilar v. Morales, 162 S.W.3d 825, 834 (Tex.App.--El Paso 2005, pet. denied). The burden then shifts to the non-movant to produce summary judgment evidence raising a genuine issue of material fact regarding each element challenged in the motion. Wade Oil & Gas, 417 S.W.3d at 540. The trial court must grant the motion unless the non-movant produces summary judgment evidence raising a genuine issue of material fact. Tex.R.Civ.P. 166a(i).

         A no-evidence motion for summary judgment is essentially a pretrial directed verdict, and we apply the same legal sufficiency standard of review as we would for a directed verdict. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750-51 (Tex. 2003). Under this standard, we review the evidence in the light most favorable to the non-movant, crediting evidence favorable to that party if a reasonable fact finder could, and disregarding contrary evidence unless a reasonable fact finder could not. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006). The non-movant raises a genuine issue of material fact by producing more than a scintilla of evidence regarding the challenged element. King Ranch, 118 S.W.3d at 751. More than a scintilla of evidence exists when reasonable and fair-minded individuals could differ in their conclusions. Id. at 751. There is not a scintilla of evidence when the evidence is so weak as to do no more than create a mere surmise or suspicion of material fact. Wade Oil & Gas, 417 S.W.3d at 540. Evidence that fails to constitute more than a mere scintilla is, in legal effect, no evidence at all. Lozano v. Lozano, 52 S.W.3d 141, 148 (Tex. 2001); Wade Oil & Gas, 417 S.W.3d at 540.

         Deutsche Bank also asserted a traditional summary judgment under Tex.R.Civ.P. 166a(c). Under a traditional motion, the moving party carries the burden of showing that there is no genuine issue of material fact and it is entitled to judgment as a matter of law. Diversicare General Partner, Inc. v. Rubio, 185 S.W.3d 842, 846 (Tex. 2005); Nixon v. Mr. Property Mgmt. Co., Inc., 690 S.W.2d 546, 548 (Tex. 1985). Evidence favorable to the non-movant is taken as true in deciding whether there is a disputed issue of material fact. Fort Worth Osteopathic Hospital, Inc. v. Reese, 148 S.W.3d 94, 99 (Tex. 2004); Tranter v. Duemling, 129 S.W.3d 257, 260 (Tex.App--El Paso 2004, no pet.). All reasonable inferences, including any doubts, must be resolved in favor of the non-movant. Fort Worth Osteopathic Hospital, 148 S.W.3d at 99. Once the movant establishes its right to summary judgment, the burden then shifts to the non-movant to present evidence that raises a genuine issue of material fact, thereby precluding summary judgment. See City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671, 678 (Tex. 1979).

         The common thread to each of the Worthings' causes of action is that the chain of title from Argent to Deutsche Bank was for various reasons broken, and thus it had no right to ...

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