Diаnne D. MORGAN, Both Individually and as Administrator of Estate of Donald Edward Starnes, Jr., Plaintiff-Appellant, v. CHASE HOME FINANCE, LLC, Defendant-Appellee.
No. 08-50288
United States Court of Appeals, Fifth Circuit.
Dec. 31, 2008.
Summary Calendar.
The state court concluded that Mosley‘s appellate counsel was not deficient in failing to raisе this claim. It found that the prosecution‘s questions were relevant and admissible because they concerned whether Mallard could accurately perceive events. Alternatively, the state court concluded that Mosley failed to show how he was prejudiced by his appellate counsel‘s failure to object. The district court, in turn, determined that the state court reasonably applied Strickland‘s standards.
Mosley presses that impeachment was so clearly improper that the failure to challenge the impeachment on appeal renders counsel ineffective. But Mosley‘s categorical assertion is belied by the support he cites. In Virts v. State, the Texas Court of Criminal Appeals stated that “[c]ross-examination of a witness to show that the witness has suffered a recent mental illness or disturbance is proper, providеd that such mental illness or disturbance is such that it might tend to reflect upon the witness‘s credibility.” 739 S.W.2d 25, 30 (Tex.Crim.App.1987) (emphasis added). Mosley fails to demonstrate a debatable issue on whether the district court was correct in concluding that the state court reasonably applied Strickland to his claim that his appellate counsel were deficient, and we deny a COA for this issue.
F. Failure To Challenge On Appeal The Jury‘s Parole Instruction
And finаlly, Mosley claims that his appellate counsel rendered ineffective assistance by failing to challenge the alleged incorrect jury instruction regarding his parole eligibility had he been sentenced to a life term. This argument, however, was not made in the state court‘s habeas proceedings or in the district court, and Mosley has therefore procedurally defaulted this claim. See Finley v. Johnson, 243 F.3d 215, 220 (5th Cir.2001) (“If a petitioner fails to exhaust state remedies, but the court to which he would be required to return to meet the exhaustion requirement would now find the claim procedurally barred, then there has been a procedural default for purposes of federal habeas corpus relief.“). On this issue, the COA is denied.
V. Conclusion
For the foregoing reasons, Mosley‘s application for a COA is DENIED.
W. Michael Murray, for Plaintiff-Appellant.
Before SMITH, STEWART, and SOUTHWICK, Circuit Judges.
Dianne Morgan sued Chase Home Financing (“Chase“) for wrongful foreclosurе on a house owned by her late common-law husband, Donald Starnes. The district court denied a motion to remand and granted summary judgment in favor of Chase. We affirm.
I.
Donald Starnes purchased a house in Pflugerville, Texas, with a mortgage secured by a promissory note and deed of trust that were subsequently transferred to Chase. Starnes later entered into a common-law marriage with Dianne Morgan.
Several years later, Starnеs moved to Kerrville, Texas, and checked into a rehabilitation facility to obtain treatment for an alcohol problem; Morgan remained behind in the Pflugerville house. Starnes told Chase that he wanted his contact address changed to a post office box in Kerrville, because he no longer lived in Pflugerville, and that he would eventually need to evict his “girlfriend and friend” who were living in the Pflugerville house. Following those instructiоns, Chase updated Starnes‘s account information with the new mailing address.
Shortly thereafter, Starnes died. His parents contacted Chase and forwarded a copy of the official death certificate and an affidavit of heirship. The certificate indicated that Starnes had died single; the affidavit of heirship represented that he “was never married” and that his parents “constitute the sole heirs at law.” Pursuant to instructions from the parents, Chase changed the account‘s contact information to their mailing address in Coleman, Texas.
Although Morgan continued to make regular mortgage payments on the Pflugerville house, Chase determined that the account was in default. As required by Texas law, it mailed a notice of the default and provided an opportunity to cure. Because it was unaware that Morgan had any claim to thе residence, the notice was sent to Starnes‘s parents in Coleman.
The account remained in default, and Chase referred it to foreclosure. As part of that process, it began rejecting payments that were not sufficient to bring the account current. When Morgan attempted to make her regular monthly payment at a Chase branch office, it was rejected, and she was informed of the foreclosurе. The vice-president of the branch office faxed Chase‘s mortgage research department to say that “the client (Dianne Morgan, common law spouse)” had “received a foreclosure letter and is therefore quite concerned.” Because Morgan was neither named on the promissory note nor listed anywhere on the account, Chase instructed its employees not to provide her with infоrmation about the loan. It called her to request that she furnish documentation of her claim to the property;1 none was ever provided.
Several months after the foreclosure sale, Morgan filed a probate proceeding to have herself named as administrator of Starnes‘s estate. The probate court determined that Morgan was indeed Starnes‘s common-law wife аnd, accordingly, named her administrator.
II.
Morgan sued in the state probate court that was handling Starnes‘s estate; the defendants were Chase and Wendy Alexander, the trustee who conducted the foreclosure sale. Alexander moved to dismiss based on
Morgan moved to remand, arguing that the federal district court either lacked jurisdiction or should decline to exercise it to avoid interfering with the probate proceedings. The district court denied the motion on both counts, then granted summary judgment for Chase. Morgan appeals that ruling.
III.
“In reviewing a district court‘s denial of a plaintiffs motion to remand а case from federal court to state court, the Court of Appeals applies a de novo standard of review.” Sherrod v. Am. Airlines, Inc., 132 F.3d 1112, 1117 (5th Cir.1998). Generally, “a case nonremovable on the initial pleadings [can] become removable only pursuant to a voluntary act of the plaintiff“; this is the “voluntary-involuntary” rule. Weems v. Louis Dreyfus Corp., 380 F.2d 545, 547 (1967). We have long recognized an exception to this rule, however, “where a claim against a nondiverse or in-state defendant is dismissed on account of fraudulent joinder. Fraudulent joinder can be established by demonstrating either (1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court.” Crockett v. R.J. Reynolds Tobacco Co., 436 F.3d 529, 532 (5th Cir.2006) (quoting Travis v. Irby, 326 F.3d 644, 646-47 (5th Cir.2003)).
Morgan‘s suit did not become removable until the probate court dismissed Alexander.4 Because her dismissal was not a voluntary act by the plaintiff, Morgan beliеves that the voluntary-involuntary rule should have barred removal. The district court, on the other hand, found that Alexander had been fraudulently joined, be-
Morgan‘s complaint alleged a single cause of action against Alexander: breach of fiduciary duty. As the district court correctly noted, under Texas law “the trustee does not owe a fiduciary duty to the mortgagor.” Stephenson v. LeBoeuf, 16 S.W.3d 829, 838 (Tex.App.-Houston [14th Dist.] 2000, pet. denied). The only cause of action alleged against Alexander was therefore invalid.
Morgan responds that “if later discovery showed that [Alexander] was a necessary party to the suit[,] she could be brought back into the suit.” But we have rejected the notion “that any mere theoretical possibility of recovery under local law—no matter how remotе or fanciful—suffices to preclude removal.” Badon v. RJR Nabisco Inc., 236 F.3d 282, 286 n. 4 (5th Cir. 2000). Accordingly, because Morgan failed to establish a cause of action against Alexander, we agree with the finding that she was fraudulently joined.5
Morgan next argues that the district court should have remanded, because “the Court should not accept jurisdiction since this [suit] involved a Probate Matter.” A federal court may still exercise its jurisdiction, however, “so long as [it] does nоt interfere with the probate proceedings or assume general jurisdiction of the probate or control of the property in custody of the state court.” Markham v. Allen, 326 U.S. 490, 494, 66 S.Ct. 296, 90 L.Ed. 256 (1946). “In determining whether a suit interferes with state probate proceedings, this court considers whether the plaintiff‘s claim implicates the validity of the probate proceedings or whether the plaintiff is merely seeking adjudication of a claim between the parties.” Breaux v. Dilsaver, 254 F.3d 533, 536 (5th Cir.2001) (citation and internal quotations omitted).
The district court found that the dispute between Morgan and Chase “is a wrongful foreclosure case that does not interfere with any state probate proceeding.” It noted that Morgan “argues that the case would be better adjudicated in the state probate court due to specialization and judicial efficiency concerns, yet makes no effort to explain how this case would imрlicate the validity of the probate proceedings.”
On appeal, Morgan re-raises many of those same arguments but still does not explain how this case could possibly “implicate the validity of the probate proceedings.” We agree with the district court; whether the Pflugerville house is part of the estate will “have no effect on the state probate court proceeding.” The probate сourt has already ordered a division of the estate,6 and the resolution of the claims in this case does not invalidate that division.7
IV.
After denying Morgan‘s motion for remand, the district court entered an order granting Chase‘s motion for summary judgment and denying Morgan‘s. Morgan appeals that order on two grounds: first, she says that foreclosure was improper because the note was not in default; second, she avers that Chase failеd to give her notice of the default and an opportunity to cure as required by
“We review a summary judgment de novo, applying the same standard as the district court. Summary judgment is proper when no issue of material fact exists and the moving party is entitled to judgment as a matter of law. Questions of fact are viewed in the light most favorable to the nonmovant and questions of law are reviewed de novo.” United States v. Lawrence, 276 F.3d 193, 195 (5th Cir.2001) (internal citations and quotations omitted).
A.
Morgan states that thе foreclosure was improper because the mortgage note was not in default. She claims that she made monthly payments on the mortgage in January, February, March, and April 2005 and has submitted receipts for the payments. Chase, on the other hand, contends that on May 12, 2005, the mortgage had been paid only through February 1, 2005, and so was in default by over three months. In support of its contention, Chase submitted a detailed payment history covering the life of the mortgage.
Morgan is only partially correct. The district court erroneously read her receipts as showing that she paid only $411 per month, “approximately half of the amount due.” As she points out in her brief, though, “[t]he receipts show that [she] made payments of $411 in cash and made the remaining balance of her payment by check. ... It appears that Chase and the [district court] have misread the receipts.” A review of the payment history supplied by Chase confirms this—it documents payments of $821.75 on each of January 24, February 15, March 16, and April 15, 2005.
Despite Morgan‘s payments, however, the mortgage was still in default. The payment history shows that Starnes had missed several monthly payments in 2003 and 2004 that were never caught up.8 Accordingly, when Morgan made her January, February, March, and April payments, she was actually cоvering amounts due on November 1, 2004; December 1, 2004; January 1, 2005; and February 1, 2005. Chase is therefore correct in stating that on May 12, when the mortgage had only been paid through February 1, it was in default by over three months.
We may affirm for any reason supported by the record, even if not relied on by the district court. United States v. Grosz, 76 F.3d 1318, 1324 n. 6 (5th Cir.1996). Accordingly, we affirm the finding that the mortgage was in default.
B.
Morgan‘s second argument is that she was not given a notice of default and аn opportunity to cure as required by
The district court agreed with Chase. It determined that only Starnes‘s parents were entitled to notice, because Chase was unaware of Morgan‘s claim to the property during the foreclosure proceedings. The court found no Texas authority stating that “in the event of the dеath of a debtor, the [mortgage servicer] should be required to conduct some level of investigation to determine the legal heirs for purposes of proper notification prior to foreclosure.”
Morgan‘s primary argument on appeal is that the district court overlooked a post-oral-argument memo that cited a single case, In re Hayes, 2004 WL 2926006 (W.D.Tex. Dec.15, 2004). There, Elizabeth Hayes sold her house to John Henderson but failеd to transfer the property by general warranty deed. After payment had been made and Henderson had moved in, Hayes received a loan from a bank using the house as collateral. When Hayes later declared Chapter 7 bankruptcy, the bank asserted its lien. Henderson objected, arguing that he had superior equitable title; the bank responded that it had no notice of Henderson‘s claim to the house and so was a bona fide purchaser for value.
Under Texas law, open, visible, exclusive, and unequivocal possession of property is constructive notice to any subsequent purchaser and triggers a duty of inquiry. Id. at *9. The bank in Hayes, however, argued that lenders should not be held to the same duty of inquiry as individual purchasers, because “the valuation model and desktop appraisal methods it used ... did not require physical inspection of the subject real property.” Id. at *12. The court disagreed, finding that Texas law did not distinguish between lenders and individuals regarding bona fide purchaser status.
As Chase‘s brief points out, Hayes “had nothing to do with foreclosure or a lender‘s obligations when acting on its foreclosure rights.” The district court‘s statement that Morgan had cited no relevant authority is therefore accurate.
Moreover, even if we import the bona fide purchaser law from Hayes into the present foreclosure dispute, the “duty to ascertain the rights of a third-party possessor” arises only “if the pоssession is visible, open, exclusive, and unequivocal.” Madison v. Gordon, 39 S.W.3d 604, 606 (Tex.2001). And “when an occupant‘s possession is compatible with another‘s ownership assertion, the occupant‘s possession cannot be said to be unequivocal.” Id. at 607.
Morgan‘s possession was not unequivocal. Before his death, Starnes contacted Chase and explicitly communicated that his “girlfriend and friend” were current tenants in the house. Thus, Morgan‘s possession was compatible with both Starnes‘s and his parents’ assertions of ownership.10
Morgan responds that Chase was put on notice of her claim by the fax from the local branch office that parenthetically referred to her as a “common law spouse.” She contends that Chase should have done more to investigate.
Further, despite a phone call requesting additional information, Morgan did not submit any proof of her claim to Chase.11 And as she admits in her brief, the probate court determined that a common law marriage existed only after “a lengthy and contested hearing.” It is therefore not evident what more Chase could have reasonably discovered.
In summary, we agree with the district court‘s cоnclusion that no Texas authority required Chase to conduct a more extensive investigation than it did. Further, even if, arguendo, we were to adopt Morgan‘s proposed extension of bona fide purchaser law, Chase reasonably relied on the representations from Starnes, his parents, and the official death certificate.
The summary judgment is AFFIRMED.
JERRY E. SMITH
UNITED STATES CIRCUIT JUDGE
UNITED STATES of America, Plaintiff-Appellee v. Stephen Ray RIVKIN, Defendant-Appellant.
No. 07-41121
United States Court of Appeals, Fifth Circuit.
Jan. 5, 2009.
Summary Calendar.