Jerome J. Isaac and Michelle P. Isaac v. Vendor Resource Management, Inc. Mortgage Electronic Registration Systems, Inc. And CitiMortgage, Inc.
03-14-00529-CV
| Tex. App. | Feb 2, 2015Background
- Jerome and Michelle Isaac (plaintiffs) sued Citimortgage (Citi), Mortgage Electronic Registration Systems (MERS), and Vendor Resource Management (VRM) after a 2013 nonjudicial foreclosure and related forcible detainer proceedings concerning the Isaacs’ homestead.
- Plaintiffs allege the Assignment of the deed of trust was executed by a person lacking authority, rendering the Assignment, subsequent trustee appointments, the 2013 trustee’s sale, and the substitute trustee’s deed void.
- Plaintiffs assert claims under the Texas Debt Collection Act (TDCA), Texas Civil Practice & Remedies Code chapter 12 (fraudulent lien/record), wrongful foreclosure, quiet title, breach of contract, and requests for injunctive relief and damages (including statutory and exemplary damages).
- Plaintiffs contend summary judgment evidence submitted by defendants fails to establish authority, relies on deficient affidavits, and raises fact issues (intent, reliance, knowledge) inappropriate for summary disposition.
- Defendants obtained summary judgment in the 26th District Court dismissing the Isaacs’ claims with prejudice; the Isaacs appeal, arguing the summary judgment was erroneous and the 2013 sale and related acts are void.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of Assignment and trustee appointments | Assignment signed by unauthorized person (e.g., Kathy Thorp lacked authority), so Assignment and subsequent trustee appointments are void and all downstream acts are void | Defendants relied on recorded Assignment and supporting affidavits to show proper authority and chain of title | Trial court granted summary judgment for defendants; Isaacs appeal arguing material fact issues exist regarding authority and chain of title |
| Applicability of Texas Civil Practice & Remedies Code ch.12 (fraudulent lien) | The Assignment and related instruments were fraudulent or knowingly used to cause financial injury, entitling Isaacs to statutory damages, fees, exemplary damages | Defendants assert instruments were valid and offered admissible evidence (affidavits/records) negating fraudulent-lien claims | Trial court dismissed Isaacs’ ch.12 claims at summary judgment; Isaacs assert triable issues of intent and knowledge remain |
| TDCA liability for foreclosure/eviction activities | Citi and VRM engaged in debt-collection practices (foreclosure, eviction) that violated TDCA (threats, deceptive acts); injunctive relief and damages appropriate | Defendants maintain foreclosure/forcible detainer activities were lawful and do not constitute TDCA violations | Trial court granted summary judgment to defendants; Isaacs contend TDCA applies and fact issues (knowledge, intent, agency, notice) preclude summary judgment |
| Standing/authority to pursue forcible detainer (VRM) | VRM lacked title/authority when it demanded possession and sued for forcible detainer; pre-suit demand did not comply with Property Code notice requirements | VRM relies on recorded documents and its proof of interest (or agency) to support forcible detainer actions | Trial court dismissed Isaacs’ claims against VRM; Isaacs argue statutory notice and party-in-possession requirements create genuine fact issues |
Key Cases Cited
- Taylor Elec. Servs., Inc. v. Armstrong Elec. Supply Co., 167 S.W.3d 522 (Tex. App.—Ft. Worth 2005) (intent and knowledge issues often preclude summary judgment)
- Kaltenbach v. Richards, 464 F.3d 524 (5th Cir. 2006) (foreclosure-related conduct can constitute debt-collection activity)
- Miller v. BAC Home Loans Servicing, L.P., 726 F.3d 717 (5th Cir. 2013) (TDCA can apply to mortgage servicing and foreclosure activity)
- Martin v. Cadle Co., 133 S.W.3d 897 (Tex. App.—Dallas 2004) (purchaser at foreclosure is charged with inquiry notice from the chain of title)
- Bonilla v. Roberson, 918 S.W.2d 17 (Tex. App.—Corpus Christi 1996) (strict compliance required for trustee’s power of sale)