Appeal from the 133rd District Court Harris County, Texas
Trial Court Case No. 2015-32570
consists of Justices Lloyd, Goodman, and Landau.
Beth Landau, Justice
appeal challenges a trial court's dismissal of Juan
Hernandez and Maria Hernandez's claims asserted against a
lender, its predecessors-in-interest, and its loan servicer.
The controversy stems from the Hernandezes' home-equity
loan and their failure to make the required payments on the
loan. We find jurisdiction to review, and we affirm both
orders from which the Hernandezes appeal.
dispute has a long and torturous history, starting out in
state court, then removal and remand, continuing with a flood
of motions in the district court, and ending with summary
Hernandez and Maria Hernandez took out a $145, 600
home-equity loan from Town and Country Credit Corporation in
2004. To secure repayment, the Hernandezes signed a deed of
trust along with the note. The deed of trust granted Town and
Country a first-lien security interest in the
Hernandezes' home. Town and Country then assigned the
note and deed of trust to Ameriquest Mortgage Company,
which later assigned the note and deed of trust to Mortgage
Electronic Registration Systems, Inc. ("MERS").
MERS eventually assigned the loan to Household Finance
Corporation III ("HFC").
2011, the Hernandezes defaulted on their monthly loan
payments. After satisfying the statutory notice and other
procedural requirements, HFC obtained a court order
authorizing foreclosure on the property. U.S. Bank Trust,
N.A., as Trustee for LSF8 Master Participation Trust
("U.S. Bank Trust"), bought the property at a
foreclosure auction in 2015. HFC then assigned the note and
deed of trust to U.S. Bank Trust. Caliber Home Loans, Inc.
("Caliber") was servicer of the note and deed of
trust at all times relevant to the foreclosure sale and the
notices of the sale.
Bank Trust gave notice to the Hernandezes to surrender
possession of the property. The Hernandezes did not surrender
possession, and U.S. Bank Trust filed a forcible detainer
action in justice court to evict them from the property. The
justice court issued an order to evict the Hernandezes in
Hernandezes appealed the justice court's eviction order
to the county court, and the county court ruled that U.S.
Bank Trust was entitled to immediate possession of the
property and to a writ of possession if the Hernandezes
failed to vacate the premises within one week.
complying with this possession order, the Hernandezes then
sued U.S. Bank Trust, Caliber, HFC, and MERS in state
district court and alleged the following claims: (1)
violation of the Texas Civil Practice and Remedies Code
section 12.002 (addressing liability related to use of
fraudulent court record or lien or claim against property);
(2) violation of the Texas Penal Code sections 32.21
(defining criminal forgery) and 32.47 (prohibiting fraudulent
destruction, removal, or concealment of writing); (3)
negligence per se; (4) gross negligence; (5) lack of standing
to foreclose; (6) statutory fraud; (7) violation of the Truth
in Lending Act; (8) violation of the Texas Constitution
article XVI, section 50(a)(6)(D); (9) violation of the Texas
Property Code § 51.0075(e); (10) for declaratory relief;
(11) to quiet title; and (12) "breach of contract/lack
of contractual standing."
Bank Trust, MERS, and Caliber removed the case to federal
court on federal question jurisdiction (the Truth in Lending
Act claim). Caliber and U.S. Bank Trust moved for summary
judgment. In September 2016, the federal district court
granted Caliber and U.S. Bank Trust's motion for summary
judgment and disposed of the claims for lack of standing to
foreclose, statutory fraud, the Truth in Lending Act, the
Texas Constitution article XVI, section 50(a)(6)(D), Texas
Property Code section 51.0075(e), declaratory relief, quiet
title, and breach of contract/lack of standing. The federal
court held that U.S. Bank Trust had standing to foreclose and
"establish[ed] it is the proper holder of the note and
deed of trust" and that the Hernandezes lacked standing
to challenge the assignments.
Hernandezes filed a motion for leave to amend their complaint
and a motion for remand, both seeking to non-suit the
violation of the Truth in Lending Act claim against all
parties. In January 2017, the magistrate judge filed a report
and recommendation denying supplemental jurisdiction over the
remaining state law claims and remanding the
Hernandezes's remaining claims to state court. The
magistrate judge also recommended denying the other pending
motions without prejudice to being asserted in state court
upon remand. The district court signed an order adopting the
recommendations, dismissing the Truth in Lending Act claim
against Caliber, HFC, MERS, and U.S. Bank Trust, and remanded
the case to state court. The Hernandezes did not appeal that
remand, the Hernandezes filed a third amended petition and
added several new causes of action against MERS and HFC, and