Janet Smith v. JP Morgan Chase Bank, N.A.

594 F. App'x 221

• Court: Court of Appeals for the Fifth Circuit
• Decided: November 5, 2014
• Docket: 14-10555
• Status: Unpublished

Opinion

PER CURIAM: *

This is a mortgage case arising under Texas state law. Plaintiff-Appellant Janet Cummings Smith appeals the district court’s decision dismissing her Texas state law claim under Federal Rule of Civil Procedure 12(b)(6) as time-barred. The parties agree that the suit was filed more than four years after the cause of action accrued and that this case is indistinguishable from our decision in Priester v. JP Morgan Chase Bank, N.A., 708 F.3d 667 (5th Cir.), cert. denied, — U.S.-, 134 S.Ct. 196, 187 L.Ed.2d 256 (2013) in which we affirmed a district court’s dismissal of a similar claim as time-barred after four years. Smith argues that this Court in Priester made an Erie guess that has not been ratified by the Texas Supreme Court, and, therefore, Priester, and the Texas case it relies on, “is not controlling.” Constrained by our prior precedent under our rule of orderliness, we disagree and affirm.

I. JURISDICTION AND STANDARD OF REVIEW

This Court has jurisdiction to review the district court’s final judgment. 28 U.S.C. § 1291. The district court had diversity jurisdiction under 28 U.S.C. § 1332. We apply Texas substantive law and federal procedural law to the state law claims. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938).

“We review a district court’s dismissal under Rule 12(b)(6) de novo, ‘accepting all well-pleaded facts as true and viewing those facts in the light most favorable to the plaintiffs.’ ” Doe ex rel. Magee v. Cov-ington Cnty. Sch. Dist. ex rel. Keys, 675 F.3d 849, 854 (5th Cir.2012) (en banc) (citation omitted). “To survive dismissal pursuant to Rule 12(b)(6), plaintiffs must plead ‘enough facts to state a claim to relief that is plausible on its face.’ ” Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)).

II. DISCUSSION

The dispute in this case is over a home equity line of credit that Defendants Appellee JP Morgan Chase Bank, N.A. (JP Morgan) extended to Smith in exchange for a lien on her home. Smith asserts JP Morgan’s lien is invalid under article XVI, § 50(t) of the Texas Constitution because the principal on the loan exceeds fifty percent of the fair market value of her home. Smith argues the district court erred in dismissing this claim as time-barred. JP Morgan counters that the Texas “residual four year statute of limitations applies to claims a home equity loan violates the Texas constitutional requirements regarding home equity loans.” JP Morgan cites our decision in Priester, 708 F.3d at 674. We agree with JP Morgan.

Article XVI, § 50 of the Texas Constitution provides that a second lien on a home is invalid “if the total principal amount outstanding exceeds ... 50 percent of the fair market value of the homestead.” Section 16.051 of the Texas Civil Practice and Remedies Code provides that “[ejvery action for which there is no express limitations period ... must be brought not later than four years after the day the cause of action accrues.” In Priester, we concluded this section of the Civil Practice and Remedies Code and its four-year “limitations period applies to constitutional infirmities.” 708 F.3d at 674.

As noted above, the parties agree that this suit was filed more than four years after the action accrued. But Smith contends that our decision in Priester was a wrongly decided Erie guess. Maybe so, but “[i]t is a well-settled Fifth Circuit rule of orderliness that one panel of our court may not overturn another panel’s decision, absent an intervening change in the law.” Jacobs v. Nat’l Drug Intelligence Ctr., 548 F.3d 375, 378 (5th Cir.2008). As three other panels have previously noted, there has been no change in the law that would allow us to overturn the Priester decision. 1 On the contrary, subsequent Texas decisions have followed Priester’s reasoning and validated its holding. Williams v. Wachovia Mortg. Corp., 407 S.W.Bd 391, 397 (Tex.App.-Dallas 2013, pet. denied) (“We find the Fifth Circuit’s analysis persuasive.” (citing Priester, 708 F.3d at 674)). 2

Therefore, the four-year residual limitations period continues to apply to claims of this nature, and Smith’s claims are time-barred.

III. CONCLUSION

For the foregoing reasons, the judgment of the district court is AFFIRMED.

IV. SANCTIONS

We notice that Smith’s counsel, Mark A. Swaim, of the Swaim Law Office in Irving, Texas has pressed this same argument on behalf of different clients in two other appeals before this Court, and each time this Court has swiftly rejected the argument. See Bormio Invs., Inc., 2014 WL 4668390, at *1 (“Bormio does not dispute that if Priester applies, the statute of limitations has run. Instead it argues ... that Priester was wrongly decided.”); Bor-mio Invs., Inc., 2014 WL 2924915, at *2 (“The Plaintiffs contend that Priester was wrongly decided under an Fne-guess analysis.”). One of these panels recently cautioned Mr. Swain “not to file frivolous appeals,” but ultimately concluded “that sanctions [were] not warranted in [that] case.” Bormio Invs., Inc., 2014 WL 4668390, at *1.

Federal Rule of Appellate Procedure 38 authorizes the award of damages and single or double costs if an appeal is frivolous, and federal courts of appeals “can sanction an appellant for a frivolous appeal sua sponte.” Conner v. Travis Cnty., 209 F.3d 794, 801 (5th Cir.2000) (per curiam). An appeal is frivolous if it is “entirely devoid of colorable merit.” See Coghlan v. Starkey, 852 F.2d 806, 811-12 (5th Cir.1988) (supplemental opinion) (per curiam). We also have the authority to order counsel for the appellants to pay attorney fees and costs from his or her own resources. See Atwood v. Union Carbide Corp., 850 F.2d 1093, 1094 (5th Cir.1988) (per curiam).

The Appellant’s argument borders on frivolity; however, in light of the timing of the two prior decisions of this Court, 3 we cannot say this appeal is “entirely de void of colorable merit.” See Coghlan, 852 F.2d at 812. But because the judgment of the district court is affirmed, costs are taxed against the appellant consistent with Federal Rule of Appellate Procedure 39(a)(2). In light of the repetitive arguments advanced by counsel for the Appellant without notice to the Court of their rejection, see Fed. R.App. P. 28(j), we HEREBY ORDER counsel for the Appellant to pay the costs taxed against the Appellant from his own resources. See Atwood, 850 F.2d at 1094. We again caution Mr. Swaim “not to file frivolous appeals.” Bormio Invs., Inc., 2014 WL 4668390, at *1.

* Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5th Cir. R. 47.5.4.

1 . Bormio Invs., Inc. v. U.S. Bank Nat'l Ass'n, No. 14-10548, 2014 WL 4668390, at *1 (5th Cir. Sept. 22, 2014) (per curiam) (“Bormio does not dispute that if Priester applies, the statute of limitations has run. Instead, it argues that the subsequent Texas Supreme Court case of Finance Commission of Texas v. Norwood, 418 S.W.3d 566 (Tex.2014) demonstrates that Priester was wrongly decided.... Neither party has cited, and we have not located, any case that would represent an intervening change in the law allowing us to reconsider Priester; accordingly, under our rule of orderliness, we are bound by Pries-ter."'); Bormio Invs., Inc. v. USBC Bank USA Nat’l Ass’n, No. 13-11311, 2014 WL 2924915, at *2 (5th Cir. June 30, 2014) (per curiam) ("The four-year residual limitations period continues to apply to claims [under the Texas Constitution], and, having failed to file within four years of the accrual of this action, the Plaintiffs' claims are time-barred.”); Moran v. Ocwen Loan Servicing, L.L.C., 560 Fed.Appx. 277, 279 (5th Cir.2014) (per curiam) (rejecting the plaintiffs’ argument "that Priester is not controlling because it is incorrect,” because under the rule of orderliness, the court had "no occasion to revisit Priester ”).

2 . See also Wood v. HSBC Bank USA, N.A., No. 14-13-00389-CV, 2014 WL 3747618, at *4, *7 (Tex.App.-Houston. [14th Dist.] July 31, 2014, no pet. h.) ("We too find the Priester court's analysis persuasive not only because of its sound reasoning, but also because its conclusion comports with Texas Supreme Court precedent.... We conclude that the [Texas Civil Practice & Remedies Code] section 16.051 four-year statute of limitations applies to the Woods’ constitutional claims.”).

3 . The first rejected appeal was filed six days after Mr. Swain filed Smith’s appellant brief in this case.