Janos Farkas v. GMAC Mortgage, L.L.C.
2013 U.S. App. LEXIS 23991
| 5th Cir. | 2013Background
- Farkas appeals district court’s grant of summary judgment in a foreclose-and-claims suit involving two Texas properties.
- Mortgage loans were originated with Cornerstone Mortgage; MERS named as beneficiary; notes later assigned to Deutsche Bank.
- Servicing rights transferred from Cornerstone to Homecomings, then to GMAC Mortgage; GMAC continued servicing.
- Farkas stopped paying in Dec 2010; state court issued restraining order blocking foreclosure; case removed to federal court.
- Farkas sought injunctive relief to stop foreclosures; district court held no jurisdictional defect and foreclosures valid.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Subject-matter jurisdiction sufficiency | Farkas contends amount in controversy not met for diversity. | Object of litigation (foreclosure of two properties) yields >$75,000, | |
| making removal proper. | Jurisdiction exists; amount in controversy satisfied. | ||
| Deutsche Bank as mortgagee to foreclose | Deutsche Bank not proper mortgagee since transfers/assignments defective. | Deutsche Bank valid mortgagee under Texas law as current holder after valid transfers. | Deutsche Bank valid mortgagee; may initiate foreclosures. |
| PSA assignment validity and standing | Assignments violated PSA; Deutsche Bank cannot foreclose. | Borrower lacks standing to enforce PSA terms; non-party cannot enforce trust terms. | Plaintiff lacks standing; PSA violations do not defeat foreclosure. |
| GMAC as mortgage servicer and foreclose right | GMAC not proper servicer; required notice to foreclose. | GMAC valid servicer; notice chain and authority established; quasi-estoppel may bar challenge. | GMAC valid servicer; quasi-estoppel supports foreclose authority. |
| Quasi-estoppel applicability | GMAC’s servicing notices were insufficient to establish servicer identity. | Equitable estoppel bars Farkas from challenging status after payments and acquiescence. | Quasi-estoppel applies; affirm the district court’s rulings. |
Key Cases Cited
- Lombardi, Inc. v. Smithfield, 11 A.3d 1180 (Del. 1989) (not used for injunctions here)
- Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333 (U.S. 1977) (amount in controversy in injunctive actions equals value of object)
- Martins v. BAC Home Loan Servicing, L.P., 722 F.3d 249 (5th Cir. 2013) (MERS is a mortgagee; may foreclose)
- Reinagel v. Deutsche Bank Nat’l Trust Co., 2013 WL 5832812 (5th Cir. 2013) (no standing to enforce PSA terms by non-party borrower)
- Lopez v. Munoz, Hockema & Reed, L.L.P., 22 S.W.3d 857 (Tex. 2000) (quasi-estoppel applies to disallow inconsistent positions)
- Steubner Realty 19, Ltd. v. Cravens Rd. 88, Ltd., 817 S.W.2d 160 (Tex. App. – Houston 1991) (quasi-estoppel defined (acquiescence, acceptance of benefits))