Justia U.S. 5th Circuit Court of Appeals Opinion Summaries

The Counties filed suit against defendants, alleging that defendants violated Texas Local Government Code 192.007 and Texas Civil Practice and Remedies Code 12.002, and, alleging claims of fraudulent misrepresentation and unjust enrichment. The court agreed with the district court's holding that it had no authority to grant the requested relief under the Declaratory Judgment Act, 28 U.S.C. 2201, because the Texas Legislature did not create a private right of action to enforce section 192.007. The court also agreed with the district court's holding that even if there were a right of action, section 192.007 does not impose a duty to create and record assignments of deeds of trust when an interest in the related promissory note is transferred. Dallas County's common law claim for fraudulent misrepresentation failed based upon the reliance and injury elements. Finally, the unjust enrichment claim failed because any benefit from recording a mortgage was derived not from the county clerk, but from Texas law recognizing lien priority. Accordingly, the court affirmed the district court's dismissal of all of the Counties' claims. View "Dallas County, TX v. MERSCORP, Inc." on Justia Law

In 1990, property encumbered by a deed of trust held by the RTC was foreclosed upon and sold to a third party in a tax sale, purportedly extinguishing the RTC’s lien. Two years ago, CAP Holdings, the alleged current holder of the deed of trust for the property, filed suit against the current owners of the property seeking a declaration that the foreclosure and resulting sale were void for violating 12 U.S.C. 1825(b)(2). Section 1825(b)(2) prohibits “property of the” RTC from being foreclosed upon or sold “without the consent of” the RTC. The court vacated and remanded because the court's precedent dictates that, if the sale was conducted in violation of section 1825(b)(2), then it indeed is entirely void, and because the district court failed to consider whether the sale’s being void would render the defendants without standing under Texas law to assert a limitations defense. View "CAP Holdings, Inc. v. Lorden" on Justia Law

Stacy Barzelis appealed the dismissal of her various state-law claims against Flagstar Bank, F.S.B. as preempted under the Home Owners' Loan Act of 1933 ("HOLA"), as well as a summary judgment on her claim under the Real Estate Settlement Procedures Act of 1974 ("RESPA"). In 2007, Stacy Barzelis and her husband Nicholas Barzelis refinanced their home loan with Fairway Independent Mortgage Corporation. For the refinancing, they executed a Texas Home Equity Security Instrument granting the bank a security interest in the property, but only Nicholas signed the promissory note. The loan was later assigned to Flagstar. In October 2009, Nicholas died, and Stacy submitted the death certificate to Flagstar in March 2010. She then filed for Chapter 13 bankruptcy relief, and the trustee continued to send loan payments to Flagstar on her behalf. But the bank refused them, stating that it would accept payments only from Nicholas, who had signed the Note. Stacy then sent Flagstar two Qualified Written Request, Complaint, and Dispute of Debt and Validation of Debt letters ("QWR"), asking Flagstar for information about the status of the loan and why it was refusing her payments. Flagstar replied to the first letter, but only to say that it would not supply her with the requested information because she was not a borrower under the Note, and she needed to provide "letters of authority from a probate attorney" to show that she was acting as the agent of the estate. Flagstar then began foreclosure proceedings. Barzelis sued in state court for wrongful foreclosure. Flagstar removed to federal court, and Barzelis amended her complaint to include an array of state and federal claims, including, in relevant part, breach of contract, negligent misrepresentation, violations of the Texas Debt Collection Act (TDCA), and violation of RESPA. The district court dismissed all the state-law claims as preempted by HOLA and granted summary judgment to Flagstar on the RESPA claim. The issue this case presented for the Fifth Circuit's review centered on which if any of Barzelis's state-law claims (breach of contract, negligent misrepresentation, and TDCA violations) were preempted by HOLA. The Fifth Circuit affirmed in part, reversed in part, and remanded: (1) despite finding that certain state-law claims with regard to Barzelis' breach of contract claim was preempted, the Court reversed dismissal of the contract claim insofar as it did not address alleged breaches of the Security Instrument; (2) Barzelis' negligent misrepresentation claim was pre-empted; (3) Barzelis' claims under the Texas Debt Collection Act (TDCA) were not pre-empted; and (4) because the district court did not consider the legal implications of Texas's community-property system and estate laws as they related to Barzelis's borrower status, the Court reversed the summary judgment on the RESPA claim. View "Barzelis v. Flagstar Bank, F.S.B." on Justia Law

David and Toni Thompson appealed the grant of summary judgment dismissing their state-law claims against Bank of America (“BOA”) and U.S. Bank, N.A. (“U.S. Bank”), arising from of the foreclosure on their home. They also appealed the exclusion of particular exhibits from the summary-judgment evidence. Because BOA did not waive its right to foreclose and made no actionable misrepresentations, the Fifth Circuit affirmed. View "Thompson v. Bank of America N.A." on Justia Law

At issue in this appeal was a contract dispute involving a Right-of-Way Easement Option (Agreement) between plaintiff-appellee Angus Chemical Company and defendant-appellant Glendora Plantation, Inc. This appeal stems from the district court’s grant of Angus’s motion for partial summary judgment, denial of Glendora’s motion for partial summary judgment, and denial of Glendora’s motion to compel discovery. Specifically, the issues presented were: (1) whether Angus had authority under the Agreement to abandon the original 12” pipeline in place when it constructed a new 16” pipeline; (2) whether Angus had authority under the Agreement to install fiber optic cables; and (3) whether it was improper for the district court to deny Glendora’s motion to compel discovery. Upon review, the Fifth Circuit concluded: (1) the there was still a material fact issue as to whether the Agreement required removal of the 12" pipeline; (2) the Agreement was sufficiently clear allowing Angus to install fiber optic cables; and (3) because the Fifth Circuit was remanding for consideration of other facts and issues, the Fifth Circuit remanded for the trial court to consider the motion to compel. View "Angus Chemical Company v. Glendora Plantation, Inc" on Justia Law

Central Southwest Texas Development, LLC and Washington Mutual Bank (WaMu) entered into a lease agreement in November 2007: Central was to construct a WaMu bank branch in Austin, and deliver it to WaMu by January 1, 2008, after which WaMu would owe rent to Central for the twenty-year term of the lease. Central did not yet have fee simple ownership of the property, but had contracted to purchase it and had deposited earnest money in escrow. After a number of extensions of the deadline, Central had not yet closed on the property at the time of WaMu’s collapse in September 2008. WaMu was declared insolvent and the FDIC was appointed as its receiver. JPMorgan Chase Bank acquired most of WaMu’s assets and liabilities under a Purchase and Assumption (P&A) Agreement with the FDIC. If Chase declined, the FDIC would have been authorized to repudiate “burdensome” leases if doing so would “promote the orderly administration of [WaMu’s] affairs.” Having determined that Chase was unlikely to accept the lease based on the proximity of Chase branches to the leased property, a Central executive emailed the FDIC and asked to be “release[d] . . . from the Lease obligation in order to pursue other options.” Central was soon notified by Chase of its rejection of the lease and by the FDIC of its repudiation. Central subsequently closed on the property. Having failed to find a replacement tenant, Central sold the property the same day a little more than it paid. Central later concluded that the lease did not qualify as "Bank Premises" under the P&A Agreement because no banking facilities were occupied (or even built) by the time of WaMu’s failure. With this new understanding of the lease’s status, Central filed this lawsuit against Chase for breach. After Central moved for summary judgment, the district court held that the lease was not a Bank Premises lease, and therefore that Chase could not decline assignment under the P&A Agreement. Consistent with the Fifth Circuit's ruling in "Excel Willowbrook, LLC v. JPMorgan Chase Bank, NA (758 F.3d 592 (2014)), the district court also held that this assignment created privity of estate between Central and Chase, and therefore that Central had standing to assert its interpretation of the P&A Agreement. Chase also moved for summary judgment on the ground that the email communications between the parties constituted a mutual termination of the lease. ROA 2048. The case proceeded to a bench trial, and the district court ruled that Chase’s attempted rejection of the lease was an anticipatory breach, entitling Central to contract damages and excusing it from further performance. Chase and the FDIC appealed. After review, the Fifth Circuit found "no reason to disturb the trial court's finding" that no mutual termination occurred. Accordingly, the Court affirmed the district court. View "Central SW Texas Devel, L.L.C. v. JP Morgan Chase" on Justia Law

The United States filed an in rem civil forfeiture complaint on the property, alleging that Carlos Alberto Oliva-Castillo was the true of owner of the property and that Oliva purchased the property with proceeds from the sale of illegal drugs. Dr. Carlos Ricardo Tirado Tamez filed an answer and amended answer to the complaint claiming to be the owner of the property. Dr. Tirado and his wife are the claimants. On appeal, Dr. Tirado challenged the district court's default judgment and final judgment of forfeiture. The court concluded that the district court did not abuse its discretion in denying Dr. Tirado's Venue Motion; the district court did not abuse its discretion in finding that claimants had been properly served; and the district court did not abuse its discretion in ordering discovery sanctions resulting in default judgment against Dr. Tirado. Accordingly, the court affirmed the judgment. View "United States v. 200 Acres of Land Near FM 2686" on Justia Law

The Avakians purchased a house with a loan secured by a properly executed deed of trust. The property was their homestead, where they lived together. Citibank refinanced the loan. Unlike the original loan, the refinancing note only listed Norair as the debtor. Citibank required that the Avakians execute another deed of trust. Norair signed the Citibank deed of trust. The next day, Burnette signed an identical deed of trust. The deeds of trust did not mention each other, and did not refer to signature of counterpart documents. Citibank recorded them as separate instruments. The Avakians received a loan modification. Around the time of Norair’s death, Burnette received notice that Citibank was taking steps to foreclose. After Norair’s death, Burnette sought a declaratory judgment. The district court granted summary judgment to Burnette, finding that, because the two were living together when they signed the Citibank deeds of trust, the instruments were invalid. The Fifth Circuit reversed. Under Mississippi law, a deed of trust on a homestead is void if it is not signed by both spouses, but the Mississippi Supreme Court would likely hold that a valid deed of trust is created when husband and wife contemporaneously sign separate, identical instruments. View "Avakian v. Citibank, N.A." on Justia Law

Sundown filed suit against defendants in state and federal court seeking a partition of land they co-owned, return of rental payments, and a right of way over Defendant Haller's property. In appeal No. 13-30294, Sundown challenges the district court's interpretation of the settlement agreement. In appeal No. 13-30721, Sundown challenges the district court's enforcement of the settlement. In appeal No. 13-30748, defendants challenged the district court's denial of their motion for contempt. The court held that the district court erred when it interpreted the settlement agreement to include those items not mentioned during the parties' oral recitation of the settlement agreement; the district court abused its discretion when it enforced the settlement agreement; and defendants failed to demonstrate that the district court clearly erred in its factual findings in regards to the denial of the motion for contempt. Accordingly, the court reversed in part and affirmed in part. View "Sundown Energy v. Haller" on Justia Law

This case arose from a dispute between Franks and Union Pacific over whether Franks has the right to cross Union Pacific's train tracks on certain property in Caddo Parish originally owned by the Levy family at the turn of the 20th Century. On appeal, Franks challenged the district court's final judgment granting summary judgment for defendant and dismissing Franks's claims with prejudice. Franks argued that the district court erred in denying the existence of a predial servitude in the three crossings at issue. The court concluded that, under the law applicable to the interpretation of the 1923 deed, the contract is unambiguous; it does not establish a predial servitude with respect to Texas and Pacific Railway Company's obligation to provide three crossings across what was then its property; but, rather, it is merely a personal obligation which does not bind the railway's successors-in-interest. View "Franks Investment Co, L.L.C. v. Union Pacific Railroad Co." on Justia Law