Mid Pac Portfolio, LLC v. Paula Welch, Clyde Alan Ashworth and Wells Fargo Bank, Minnesota, NA Formerly Known as Norwest Bank, Minnesota, NA, as Trustee for Salomon Brothers Mortgage Securities VII, Inc. Floating Rate Mortgage Pass Through Certificates Series 1999-LBI, 01-15-00404-CV

Background

Mid Pac Portfolio sued to enforce a 2003 "Deed in Lieu of Foreclosure" against Paula Welch and Clyde Ashworth, claiming ownership via assignments from prior holders (CGMRC, Wells Fargo, etc.).
The underlying loan was a home-equity loan subject to Texas Constitution Art. XVI, §50 (judicial-foreclosure restrictions); defendants contend the deed/settlement violated those restrictions and was therefore unenforceable.
Multiple prior foreclosure suits and related proceedings (filed by Long Beach, Norwest, CGMRC, etc.) were filed and repeatedly dismissed or denied between 1999–2008; in 2008 a Galveston court denied CGMRC foreclosure for lack of proof of title/standing.
Mid Pac acquired a mortgage package from CGMRC years later; Mid Pac and CGMRC used a stipulation/assignment and a default-judgment maneuver to try to press the claim, but the trial court limited the effect of that stipulation and found no proof of chain of title.
Defendants moved for summary judgment asserting: lack of chain of title/standing, statutes of limitation (including the five-year tax-payment provision), unenforceability under home-equity rules, and that the assignment/stipulation amounted to an impermissible collusive ("Mary Carter") arrangement.
The trial court granted summary judgment to Welch and Ashworth, held the deed unenforceable by any party claiming through it (including Mid Pac, Wells Fargo, CGMRC), denied Mid Pac’s MSJ, and awarded fees/costs to defendants; defendants appealed and Mid Pac appealed the summary judgment ruling.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Chain of title / standing to enforce deed	Mid Pac: acquired rights via assignment from CGMRC and thus may enforce deed	Welch: no admissible instrument or recorded chain proving CGMRC or Mid Pac held title; assignment lacks conveyancing formalities	Court: No proven chain of title; summary judgment for defendants — deed unenforceable by Mid Pac/CGMRC/Wells Fargo
Collateral estoppel / prior adverse determinations	Mid Pac: prior rulings against CGMRC don’t bind Mid Pac; TRCP 736.9 limits preclusive effect	Welch: CGMRC’s prior loss on standing was fully litigated and bars re-litigation by Mid Pac in privity	Court: Prior adjudication that CGMRC lacked standing supported summary judgment; Mid Pac could not overcome preclusion/privity concerns
Mary Carter / collusive assignment	Mid Pac: assignment and stipulation legitimate transfers of interest	Welch: assignment and stipulation are collusive, attempt to sidestep earlier adverse rulings and evade sanctions; violate public policy/Mary Carter principles	Court: Agreement/assignment characterized as improper collusive device; not sufficient to cure title/standing defects
Limitations / statute of repose (including tax-payment tolls)	Mid Pac: limitations not barred or defendants’ tax-payment arguments insufficient	Welch: suit time-barred (various statutes) and taxes paid from defendants’ escrow funds satisfy five-year provision	Court: Limitations and defendants’ uncontroverted evidence (affidavit with tax records) supported summary judgment for defendants

Key Cases Cited

Elbaor v. Smith, 845 S.W.2d 240 (Tex. 1992) (Mary Carter agreements doctrine and public-policy prohibition of collusive settlements)
State Farm v. Gandy, 925 S.W.2d 696 (Tex. 1996) (policy rationale against agreements that promote litigation over settlement)
Sysco Food Servs., Inc. v. Trapnell, 890 S.W.2d 796 (Tex. 1994) (requirements for preclusion and finality in earlier proceedings)
Rockwall Commons Assocs., Ltd. v. MRC Mortgage Grantor Trust, 331 S.W.3d 500 (Tex. App.—El Paso 2010) (affidavit conclusory-evidence analysis; burdens to preserve challenge)
Turoff v. McCaslin, 222 S.W.3d 665 (Tex. App.—Waco 2007) (litigation-trust/Mary Carter principles extended beyond classic form)
Bradford v. Bradford, 971 S.W.2d 595 (Tex. App.—Dallas 1998) (offering testimony or evidence may constitute general appearance)
Brownlee v. Brownlee, 665 S.W.2d 111 (Tex. 1984) (distinction between admissible factual testimony and impermissible legal conclusions)
Johnson v. Bethesda Lutheran Homes & Servs., 935 S.W.2d 235 (Tex. App.—Houston [1st Dist.] 1996) (discussion of what constitutes conclusory affidavit evidence)
Rizkallah v. Conner, 952 S.W.2d 580 (Tex. App.—Houston [1st Dist.] 1997) (limits on conclusory affidavits)
Mays v. Perkins, 927 S.W.2d 222 (Tex. App.—Houston [1st Dist.] 1996) (general-appearance principles when a party offers testimony)