Jerome J. Isaac and Michelle P. Isaac v. Vendor Resource Management, Inc. Mortgage Electronic Registration Systems, Inc. And CitiMortgage, Inc.

Opinion

ACCEPTED 03-14-00529-CV 3993295 THIRD COURT OF APPEALS AUSTIN, TEXAS 2/2/2015 10:20:59 PM JEFFREY D. KYLE CLERK No. 03-14-00529-CV

In the Court of Appeals FILED IN 3rd COURT OF APPEALS for the AUSTIN, TEXAS Third Court of Appeals District of Texas 2/2/2015 10:20:59 PM Sitting at Austin, Texas JEFFREY D. KYLE Clerk

________________________________________________________________________

Jerome J. Isaac and Michelle P. Isaac, Appellants

vs.

Vendor Resource Management, Inc., Mortgage Electronic Registration Systems, Inc., and Citimortgage, Inc., Appellees ________________________________________________________________________

Appealed from the 26th District Court of Williamson County, Texas The Honorable Billy Ray Stubblefield, Presiding ________________________________________________________________________

Brief of Appellants,

Jerome J. Isaac and Michelle P. Isaac ___________________________________________________________________

Michael Brinkley State Bar No. 03004300 BRINKLEY LAW PLLC P. O. Box 820711 Fort Worth, TX 76182-0711 888.511.5854; 817.284.3535 fax 888.511.0946 michael@brinkleypllc.com Attorney for Appellants

BRIEF OF APPELLANTS Certificate of Parties

The following is a complete list of all parties to this action:

(1) Jerome J. Isaac and Michelle P. Isaac, appellants 123 Dana Drive, Hutto, Texas 78634

(2) Vendor Resource Management, Inc. (“VRM”), appellee 4100 International Parkway, Suite 1000 Carrollton, Texas 75007

(3) Mortgage Electronic Registration Systems, Inc. (“MERS”), appellee 1818 Library St., Ste. 300 Reston, Virginia 20190-6280

(4) Citimortgage, Inc. (“Citi”), appellee 1595 Springhill Road #310 Vienna, Virginia 22182

(5) Michael Brinkley, attorney for appellants BRINKLEY LAW PLLC P. O. Box 820711 Fort Worth, Texas 76182-0711

(6) John Ellis, attorney for appellees MERS and Citi HUSCH BLACKWELL LLP 2200 Ross Avenue, Suite 2200 Dallas, Texas 75201

(7) Christopher Ferguson, attorney for appellee VRM JACK O’BOYLE & ASSOCIATES P. O. Box 815369 Dallas, Texas 75381

(8) Mark Hopkins, attorney for appellee VRM HOPKINS & WILLIAMS 12117 Bee Caves Road, Suite 260 Austin, Texas 78738

BRIEF OF APPELLANTS 2 Subject Index

Page

List of Authorities 4

Statement of the Case 6

Statement Regarding Oral Argument 6

Points of Error 7

Statement of the Facts 7

Summary of Argument 8

Argument and Authorities

POINT OF ERROR 1. The trial court erred in granting Summary Judgment to Citimortgage, MERS and VRM because there was sufficient summary judgment evidence to permit the Isaacs to proceed to trial on one or more of their claims. 9

POINT OF ERROR 2. The trial court erred in granting Summary Judgment to Citimortgage, MERS and VRM, since the substitute substitute trustees putatively appointed by or for Citimortgage were each and all acting, on the face of the summary judgment record, without capacity at all relevant times, and hence all acts taken in furtherance of the invalid trustee sale are void. 22

Conclusion/Prayer 25

Certificate of Compliance 26

Certificate of Service 27

Appendix 1 Judgment 28f

Appendix 2 Statutes and Rules 30ff

BRIEF OF APPELLANTS 3 List of Authorities

Cases Page

Biggers v. BAC Home Loans Servicing, LP, 2011 WL 588059, 2011 U.S. Dist. LEXIS 13104 (N.. D. Tex. 2011) 13, 17, 21 Bonilla v. Roberson, 918 S.W.2d 17, 21 (Tex. App. – Corpus Christi, 1996) 24 Grotjohn Precise Connexiones International v. Jem Financial, Inc., 12 S.W.3d 859, 865 (Tex.App.–Texarkana 2000) 18 Hilton v. Texas Inv. Bank, N.A., 650 S.W.2d 545, 547 (Tex.App.– Houston [14th Dist.] 1983, no writ) 18 th Kaltenbach v. Richards, 464 F.3d 524-529 (5 Cir. 2006) 13 Kingman Holdings, LLC v. CitiMortgage, Inc., No. 4:10-cv-619, 2011 BL 129902 (E.D. Tex. May 17, 2011) 12 Kolb v. Texas Employers' Ins. Ass'n, 585 S.W.2d 870, 873 (Tex.Civ.App. – Texarkana 1979, writ ref'd n.r.e.) 18 Martin v. Cadle Co., 133 S.W.3d 897, 905; 2004 Tex. App. LEXIS 4478 **16-17 (Tex.App. – Dallas 2004) 24 Miller v. BAC Home Loans Servicing, L.P., 726 F.3d 717, 723-724 (5th Cir. 2013) 21, 23 Taylor Elec . Services, Inc. v. Armstrong Elec. Supply Co., 167 S.W.3d 522, 531-32 (Tex. App.-Ft. Worth 2005, no pet.) 11, 12

Statutes and Rules

TEXAS CIV. PRAC. & REM. CODE §12.001 et seq 11 TEX. FIN. CODE Chapter 392 13, 20, 21 TEXAS PROPERTY CODE §§24.002 and 24.005 19 TEXAS PROPERTY CODE §51.001(4) 15

BRIEF OF APPELLANTS 4 No. 03-14-00529-CV

In the Court of Appeals for the Third Court of Appeals District of Texas Sitting at Austin, Texas

________________________________________________________________________

Jerome J. Isaac and Michelle P. Isaac, Appellants

vs.

Vendor Resource Management, Inc., Mortgage Electronic Registration Systems, Inc., and Citimortgage, Inc., Appellees ________________________________________________________________________

Appealed from the 26th District Court of Williamson County, Texas The Honorable Billy Ray Stubblefield, Presiding ________________________________________________________________________

Brief of Appellants,

Jerome J. Isaac and Michelle P. Isaac ___________________________________________________________________

TO THE HONORABLE COURT OF APPEALS:

Appellants, Jerome J. Isaac and Michelle P. Isaac (hereinafter “Isaac”), respectfully

submit this brief in appeal of the summary judgment that they take nothing in their claims

against Vendor Resource Management, Inc. (“VRM”), Mortgage Electronic Registration

Systems, Inc. (“MERS”) and Citimortgage, Inc. (“Citi”) and that their claims against

BRIEF OF APPELLANTS 5 appellees be dismissed with prejudice, signed by the trial court May 23, 2014 (“Summary

Judgment”), which judgment the trial court declined to vacate. This is an appeal from

the 26th District Court of Williamson County, Texas, in Cause No. 13-0472-C26, in

which Appellants Isaac were the plaintiffs and appellees were the Appellees.

Statement of the Case

This is a case brought by the Isaacs against appellees for violations of the Texas

Debt Collection Act (seeking damages and injunctive relief), Property Code, for the

filing of a fraudulent lien instrument, breach of contract, to quiet title subject to any

valid and subsisting lien, and seeking injunctive relief under the trial court’s inherent

powers and the TDCA. After considering summary judgment motions filed by (a) VRM

and (b) MERS and Citi, the trial court granted the summary judgment motions. Isaacs

filed their Motion to Vacate, which was overruled by operation of law, after which

the Isaacs gave notice of their appeal.

Statement Regarding Oral Argument

Appellants would welcome the opportunity for oral argument and requests they

be so heard, due to the novelty of the issues and factual background to which the applicable

law is to be applied.

BRIEF OF APPELLANTS 6 Points of Error

POINT OF ERROR 1. The trial court erred in granting Summary Judgment to

Citimortgage, MERS and VRM because there was sufficient summary

judgment evidence to permit the Isaacs to proceed to trial on one or more

of their claims.

POINT OF ERROR 2. The trial court erred in granting Summary Judgment to

Citimortgage, MERS and VRM, since the substitute substitute trustees

putatively appointed by or for Citimortgage were each and all acting, on

the face of the summary judgment record, without capacity at all relevant

times, and hence all acts taken in furtherance of the invalid trustee sale are

void.

Statement of the Facts

The Isaacs filed their original petition with the District Clerk of Williamson County,

which assigned the case to the 26th District Court.1 The Isaacs thereafter filed a First

Amended Original Petition.2 VRM, MERS and Citi filed their Motions for Summary

1 District Clerk’s Official Record, pages 5-16. 2 District Clerk’s Official Record, pages 23-34.

BRIEF OF APPELLANTS 7 Judgment on April 17, 2014 and April 3, 2014 respectively.3 The Isaacs filed their

Response4 to the Motions for Summary Judgment on May 19, 2014 as permitted by

the Court’s Order of May 15, 2014.5 Thereafter, on May 23, 2014, the trial court conducted

a hearing on the Motions for Summary Judgment.6 The Court granted the Summary

Judgment.7 The Isaacs filed their Motion to Vacate Judgment,8 which was overruled

by operation of law, and this appeal was taken by notice of appeal filed August 21, 2014.9

Summary of Argument

The 26th District Court erred in granting a summary judgment for VRM, MERS

and Citimortgage because the evidence before the court was to the effect that Citimortgage,

MERS, the putatively appointed substitute trustees who conducted the sale of the Isaacs’

Property, and VRM all lacked capacity for their various acts as a matter of public record,

and because the summary judgment evidence and argument within the motions for

3 District Clerk’s Official Record, pages 314-359 and 40-313. 4 District Clerk’s Official Record, pages 369-401. 5 District Clerk’s Official Record, pages 363-366. 6 District Clerk’s Official Record, page 4 (docket sheet) and 432 (summary judgment). 7 District Clerk’s Official Record, page 432 (judgment) and page 4 (docket sheet). 8 District Clerk’s Official Record, pages 434-456. 9 District Clerk’s Official Record, pages 467-468.

BRIEF OF APPELLANTS 8 summary judgment and response established that there was a sufficient legal basis for,

and factual support for, each of the Isaacs’claims. Therefore, there was sufficient basis

for the Isaacs’ claims under TDCA, the Property Code, the Civil Practice & Remedies

Code that the foreclosure threatened and effected in 2013 was wrongfully pursued by

Citi and the subsequent forcible detainer proceeding was wrongfully pursued by VRM

even after VRM no longer had any claim of title to the Property. The Isaacs’ claims

that involved allegations of reliance on representations of Citi personnel were not

appropriate for disposition by summary judgment.

Argument and Authorities

POINT OF ERROR 1. The trial court erred in granting Summary Judgment to

Citimortgage, MERS and VRM because there was sufficient summary

judgment evidence to permit the Isaacs to proceed to trial on one or more

of their claims.

The 2013 substitute trustee’s sale, the resulting deed, and all acts taken with respect

to the subsequent forcible detainer action should be held invalid for the plain reasons

that (a) the process was predicated on the Assignment, which was not supported by

authority to act as nominee for the assigning entity (the essential facts of which were

not denied in the Motions for Summary Judgment, but were established by them).

BRIEF OF APPELLANTS 9 The trial court should not have rendered the Summary Judgment, since (a) the

Assignment and hence any appointment of trustees following the Assignment was of

no effect; (b) that the foregoing documents are all void and should be removed from

Official Public Records of Williamson County, Texas; (c) that Citi, MERS and VRM

are liable to the Isaacs in respect of violations of the Texas Debt Collection Act for the

Isaacs’ reasonable and necessary attorney’s fees and costs of court in this proceeding;

and for such other and further relief as may be provided by law.

Citi, MERS and VRM were not entitled to summary judgment on a no-evidence

or traditional basis:

A. Deficient Summary Judgment Evidence. The declaration of Travis

Nurse (Exhibit A to the Citi-MERS MSJ) is insufficient as summary

judgment evidence since it (1) avers no personal knowledge on the

part of the affiant, but merely an examination of records in what

form we are not told, (2) claims no actual examination of a document

or record, only potentially vouching for electronic copies maintained

by Citi, and clearly containing copies that are “Representation of

Printed Document” rather than a copy of a physical document, (3)

makes no claim of custody of any of the referenced documents by

Citi on the basis of affiant having actually examined the document

BRIEF OF APPELLANTS 10 itself.

B. Fraudulent Lien Claim. It is clear from the summary judgment

evidence tendered to the Court by Citi that given the absence of

apparent capacity on the part of the persons executing the Assignment,

there have been violations of Texas Civil Practice & Remedies Code

§12.002 et seq. The Isaacs are therefore entitled to damages, including

statutory damages. Citi and MERS actively and knowingly made,

presented or used a document, including but not limited to the

Assignment, intending that the Assignment be given effect, intending

that The Isaacs suffer financial injury, specifically the loss of their

homestead as indicated by all other pleading and proof. Thus, the

elements of Texas Civil Practice and Remedies Code §12.001 et

seq. and the jeopardy of loss of title to The Isaacs’ Property have

been met and proven by the summary judgment evidence in the MSJ.

Intent to cause harm in these cases is presumed. “In the context

of Section 12.002(a)(3), Texas courts have interpreted the ‘intent’

element to require only that the person filing the fraudulent lien be

aware of the harmful effect that filing such a lien could have on a

landowner. Taylor Elec . Services, Inc. v. Armstrong Elec. Supply

BRIEF OF APPELLANTS 11 Co., 167 S.W.3d 522, 531-32 (Tex. App.-Ft. Worth 2005, no pet.).”

Kingman Holdings, LLC v. BAC Home Loans Servicing, LP, 2011

U.S. Dist. LEXIS 52807, 11-12 (E.D. Tex. Apr. 21, 2011). Appellees

Citi and MERS possessed such awareness at the times of their relevant

acts with the Assignment, which is clear from the fact that the same

person signed the Assignment as a putative officer of MERS and

as an assistant vice president of Sterling Capital, payee of the Note.

Kathy Thorp was never constituted as an assistant secretary of MERS

by the board of directors of MERS, as demonstrated by the appended

Letter from Ohio Secretary of State, available online at

http://www.sos.state.oh.us/SOS/Upload/news/DettelbachLtr9-1-10.pdf

and the deposition of William Hultman referenced therein, Mr.

Hultman at such time being secretary of MERS, particularly pages

94-96ff of such deposition, and thus Ms. Thorp did not have authority

to execute the Assignment (Exhibit D to the Citi-MERS Motion).

Hence, all acts flowing from and after the Assignment should be

held void, the foreclosure acts disregarded and the Substitute Trustee’s

Deed of 2013 removed from the chain of title to the Property.

C. Texas Debt Collection Act. The summary judgment evidence

BRIEF OF APPELLANTS 12 appended to the Citi-MERS Motion proves that Citi threatened to

take and did take actions prohibited by law, in violation of Chapter

392, Finance Code. Citi was certainly engaged in debt collection

in the attempt to threaten and effect a nonjudicial foreclosure of

a claimed lien on the Property. Citi is charged with knowledge of

the state of the public record, which began with the fact that there

was no proper Assignment to Citi, hence no proper appointment

of substitute trustees by Citi, and extends to the resulting Substitute

Trustee’s Deed and the conveyances since (ending, so far as the

summary judgment evidence shows, in Citi). It would seem that

applying the standards of Biggers v. BAC Home Loans Servicing,

LP, 2011 WL 588059, 2011 U.S. Dist. LEXIS 13104 (N.. D. Tex.

2011) and Kaltenbach v. Richards, 464 F.3d 524-529 (5th Cir. 2006),

the activities of Citi with respect to foreclosure acts were clearly

collection activity, and should be chargeable to Citi. Exhibits J-1

and J-2 as well as the Howell Affidavit to the Citi-MERS Motion

establish that the acts complained of with respect to foreclosure

activity were unquestionably done by Citi and not another party

or nonparty.

BRIEF OF APPELLANTS 13 D. Injunctive Relief. The Isaacs are entitled to injunctive relief because

they are statutorily entitled to it under TDCA due to the foregoing

wrongful acts of Citi and VRM, to prevent further acts to deprive

them of title to and possession of the Property, since there is a

complete lack of chain of authority for all acts since the Assignment.

There is further a right to injunctive relief under the Court’s equitable

powers, to prevent violations of the Isaacs’ right to the ownership

and possession of the Property as against those who cannot

demonstrate their own right (including VRM), and from the

Assignment forward Citi cannot claim that right.

E. Damages and Exemplary Damages. Through the summary judgment

evidence of all parties, The Isaacs have demonstrated their right

to statutory, actual and exemplary damages as to Appellees, because

of the clear absence of authority for the various persons to act for

MERS (as to the Assignment), Citi and VRM, for the signers of

documents to act in threatening or attempting to effect foreclosure

in 2013 or foreclosure or eviction at present. The Isaacs are entitled

to statutory damages under TDCA, but are further entitled to actual

damages on their other theories of recovery, and to exemplary

BRIEF OF APPELLANTS 14 damages due to the willful, wanton and reckless nature of the acts

of Appellees in the absence of a chain of authority from the

unsupported Assignment and subsequent instruments through the

chain of deeds. Citi therefore cannot have proceeded in good faith

to threaten foreclosure as to The Isaacs, when Citi was charged with

knowledge of the absence of essential items in the public record

beginning with the Assignment.

F. Owner or Holder Status is Certainly Required to be a Mortgagee.

The plain language of the relevant statute, TEXAS PROPERTY CODE

§51.001(4) provides (emphasis supplied):

"Mortgagee" means: (A) the grantee, beneficiary, owner, or holder of a security instrument; (B) a book entry system;or (C) if the security interest has been assigned of record, the last person to whom the security interest has been assigned of record.

Thus since Citi had chosen to establish “mortgagee” status through

recording, it is bound by the ineffectiveness of the Assignment, and

should be required to record a proper and effective assignment or

to refrain from attempting to enforce the lien of the Deed of Trust.

G. Wrongful Foreclosure Claim Is Valid. The Citi-MERS Motion

BRIEF OF APPELLANTS 15 misinterprets and misapplies the case law regarding wrongful

foreclosure claims. Recently, the standard was clearly set forth by

the Chief Judge of the Northern District:

In Texas, the elements of a wrongful foreclosure claim are " (1) a defect in the foreclosure sale proceed- ings; (2) a grossly inadequate selling price; and (3) a causal connection between the defect and the grossly inadequate selling price." Sauceda v. GMAC Mortg. Corp., 268 S.W.3d 135, 139 (Tex.App.2008, no pet.) (citing Charter Nat'l Bank-Houston v. Stevens, 781 S.W.2d 368, 371 (Tex.App.1989, writ denied)); see also Sotelo v. Interstate Fin. Corp., 224 S.W.3d 517, 523 (Tex.App.2007, no pet.) (" The elements of wrongful foreclosure are (1) an irregularity at the sale; and (2) the irregularity contributed to an inadequate price." (citing Forestier v. San Antonio Sav. Ass'n, 564 S.W.2d 160, 165 (Tex.App.1978, writ ref'd n.r.e.))). A claim for " wrongful foreclosure" is not available based merely on showing a defect in the foreclosure process; it is also necessary that there be an inadequate selling price resulting from the defect. Texas courts have yet to recognize a claim for " attempted wrongful foreclosure." See Port City State Bank v. Leyco Constr. Co., 561 S.W.2d 546, 547 (Tex.Civ.App.1977, no writ); Peterson v. Black, 980 S.W.2d 818, 823 (Tex.App.1998, no pet.) (" [T]he mortgagor is only entitled to [recovery for the difference between the foreclosure value and the remaining balance on the debt] if (1) title to the property has passed to a third party; or (2) the property has been appropriated to the use and benefit of the mortgagee." ); see also Farrell v. Hunt, 714 S.W.2d 298, 299 (Tex.1986) (" In a wrongful foreclosure suit the measure of damages is the difference between the value of the property in question at the date of foreclosure and the remaining balance due on the

BRIEF OF APPELLANTS 16 indebtedness.").

Because under Texas law an inadequate selling price is a necessary element of a wrongful foreclosure action, a foreclosure sale is a precondition to recovery. The Biggers only allege that BAC undertook wrongful conduct in preparation for foreclosure, but not that the foreclosure sale actually occurred or that the price that was paid was inadequate. The Biggers have therefore failed to plead a plausible claim for wrongful foreclo- sure. See, e.g., Smith v. J.P. Morgan Chase Bank N.A., 2010 WL 4622209, at *2-3 (S.D.Tex. Nov. 4, 2010) (dismissing wrongful foreclosure claim under Rule 12(b)(6) where no foreclosure sale occurred, because of failure to state claim recognized under state law); Baker v. Countrywide Home Loans, Inc., 2009 WL 1810336, at *4 (N.D.Tex. June 24, 2009) (Boyle, J.) (granting summary judgment because the Isaacs never lost possession of homestead, even though lender commenced foreclosure proceedings).

Biggers, at 729-730. Having lost possession is not a necessary element

of the claim, but having lost title is. The Isaacs clearly lost title to

the Property, and have been in constant jeopardy of loss of possession

of the Property ever since the first notice/demand for possession

was issued to them by the anonymous party via Jack O’Boyle &

Associates, even to the point of imminent threat of enforcement of

the writ of possession in September, 2013. Given the state of the

public record, the sale was inherently tainted and should be set aside.

Terra XXI, Ltd., cited by Citi-MERS in their Motion at page 28,

BRIEF OF APPELLANTS 17 did not opine that a sale price exceeding 50% of the property’s value

was not per se grossly inadequate, but cited to yet another case where

that finding had been made; Terra involved a property whose fair

market value was stated to be $5,700,000, and hence not comparable

in terms of the marketability or range of potential bidders to the

Property. Additionally, the tender of the full amount of the Note

should not be held to be required here as a condition of removal

of the Substitute Trustee’s Deed from the chain of title to the Property,

but merely reinstatement of the Note and lien to its status before

it was wrongfully accelerated and the claimed lien securing it

foreclosed.

H. Summary judgment is particularly inappropriate when matters that

are inherently those for a fact finder-such as intent, knowledge,

motive, reliance, and the like-constitute essential elements of

recovery or defense. Grotjohn Precise Connexiones International

v. Jem Financial, Inc., 12 S.W.3d 859, 865 (Tex.App.–Texarkana

2000), emphasis supplied; citing Hilton v. Texas Inv. Bank, N.A.,

650 S.W.2d 545, 547 (Tex.App.– Houston [14th Dist.] 1983, no

writ); Kolb v. Texas Employers' Ins. Ass'n, 585 S.W.2d 870, 873

BRIEF OF APPELLANTS 18 (Tex.Civ.App. – Texarkana 1979, writ ref'd n.r.e.). When, as here,

The Isaacs relied on misrepresentations by Citi (a) as to the capacity

of one or more persons purporting to act (1) in effecting a foreclosure

for Appellee, (b) modifying or not modifying the Loan while at the

same time threatening and effecting foreclosure while promising

not to foreclose, (c) appointing trustees and/or to have such trustees

act to effect the non-judicial foreclosure which they did in 2013,

then there is at minimum conflicting evidence as to representations

bearing on liability of The Isaacs and Citi related to the Loan, and

the trier of fact should have an opportunity to fully evaluate the

testimony of the individual The Isaacs, Citi’s representatives and

other persons in open court at trial.

I. VRM’s summary judgment evidence, via Exhibit D (Berain Affidavit)

and Exhibit E to the VRM Motion, establish that VRM per se violated

the Texas Debt Collection Act in seeking to take actions prohibited

by law in seeking eviction of The Isaacs from the Property, because

demand for possession was made (prior to filing the Forcible Detainer

Suit) that did not comport with the requirements of Texas Property

Code §§24.002 and 24.005 that such demand for possession be made

BRIEF OF APPELLANTS 19 by, or clearly on behalf of, a party having a clear right to the Property.

A generic notice and demand, rather than one made on behalf of

a clear and specific claimant, is not statutorily sufficient to support

a forcible detainer suit. Further, an entity such as VRM that is and

was not in title to the Property was without standing to be the plaintiff

in the Forcible Detainer Case. Therefore, in violation of Tex. Fin.

Code §392.301(a)(8), VRM threatened to take and/or did take several

actions prohibited by law, in that:

(1) VRM, relying on the insufficient pre-suit notice to The Isaacs

that is shown appended to the Berain Affidavit, filed suit for

forcible detainer against The Isaacs in the Justice Court,

Precinct 4, of Williamson County, Texas, in the Forcible

Detainer Case and obtained a writ of possession, as detailed

in the Brinkley Affidavit appended to the RSJ, and threatened

then to imminently dispossess The Isaacs from the Property;

(2) the Reconveyance Deed, as VRM refers to it, Exhibit E to

the VRM Motion, establishes that VRM wishes to assert that

it conveyed the Property to Appellee Citi on June 10, 2013,

yet the Writ of Possession was issued on behalf of VRM by

BRIEF OF APPELLANTS 20 the Justice of the Peace, Precinct 4, on September 16, 2013,

some three months after VRM now says it didn’t claim

any interest in the Property;

(3) Under Tex. Fin. Code §392.403, VRM’s actions without legal

foundation constitute violations of the TDCA, and render

VRM liable to The Isaacs for statutory damages, injunctive

relief, costs and reasonable attorney’s fees;

(4) The acts of VRM (a) were debt collection activities, and (b)

were in violation of and actionable under TDCA because

they were actions taken that were prohibited by law. Biggers

v. BAC Home Loans Servicing, LP, 2011 WL 588059, 2011

U.S. Dist. LEXIS 13104 (N.. D. Tex. 2011).10 The Isaacs

should be granted their actual damages, statutory damages,

costs and reasonable attorney’s fees for enforcement of their

claims against VRM under TDCA. The Isaacs do allege loss

outside the Loan documents, and the economic loss rule is

10 Judge Fitzwater, in deciding Biggers v. BAC Home Loans Servicing, LP, 2011 WL 588059, 2011 U.S. Dist. LEXIS 13104 (N.. D. Tex. 2011), found that TDCA applied to foreclosure activity. The Fifth Circuit has recently determined that it applies to mortgage loan servicing as well as foreclosure activity specifically, Miller v. BAC Home Loans Servicing, L.P., 726 F.3d 717 (5th Cir. 2013), and therefore The Isaacs’ claims under TDCA are sound.

BRIEF OF APPELLANTS 21 inapposite.

J. By its own summary judgment evidence, VRM establishes that it

took actions prohibited by law, which were therefore wrongful, in

attempting to obtain possession of the Property. When taken together

with the Brinkley Affidavit, it is clear that the writ of possession

issued as to the Property, based on the judgment of possession in

favor of VRM, was wrongfully issued at a time when VRM now

claims to have had no interest whatsoever in the Property. Therefore,

VRM has established that it wrongfully sought eviction of The Isaacs

from the Property, and The Isaacs are entitled to judgment on their

common law claim as well as their TDCA claim.

K. Nothing in the VRM Motion or the Citi-MERS Motion established

that VRM was ever the authorized agent for Citi.

POINT OF ERROR 2. The trial court erred in granting Summary Judgment to

Citimortgage, MERS and VRM, since the substitute substitute trustees

putatively appointed by or for Citimortgage were each and all acting, on

the face of the summary judgment record, without capacity at all relevant

times, and hence all acts taken in furtherance of the invalid trustee sale are

BRIEF OF APPELLANTS 22 void.

The 2013 foreclosure and Substitute Trustee’s Deed to Citi should be held invalid

because the Assignment and Appointment each were executed by a person lacking

authority, as outlined above. As set forth in the pleadings11 and in the Brinkley Affidavit

there are, under state court pleading standards, sufficient facts pleaded and established

that are not inconsistent with Appellees’ summary judgment proof, that would establish

a violation of the TDCA because of the misleading course of conduct of Citi in dealing

with the Isaacs as recognized under the even more stringent pleading federal pleading

standards in Miller v. BAC Home Loans Servicing, L.P., 726 F.3d 717, 723-724 (5th

Cir. 2013). Further, Citi was charged with knowledge of the state of the public record

in regard to the Assignment and Appointment and all subsequent predicate notices for

the 2013 trustee’s sale and beyond, and all other acts that flowed from any of the foregoing

documents. The Fifth District Court of Appeals explained in a relevant factual situation:

In this case, the Martins cannot be considered innocent purchasers without notice because, although they submitted affidavit testimony stating they purchased the property in good faith, they are charged with knowledge of all facts appearing in the chain of title to the property. See Westland Oil Dev. Corp. v. Gulf Oil Corp., 637 S.W.2d 903, 908 (Tex.1982). Any description, recital of fact, or reference to other documents in the chain of title puts the purchaser on inquiry notice, and "he is bound to follow up this inquiry, step by step, from one discovery to another and from one instrument to another, until the whole series of title deeds is

11 District Clerk’s record, pages 7-9.

BRIEF OF APPELLANTS 23 exhausted and a complete knowledge of all matters referred to and affecting the estate is obtained." Id.

Martin v. Cadle Co., 133 S.W.3d 897, 905; 2004 Tex. App. LEXIS 4478 **16-17

(Tex.App. – Dallas 2004), emphasis supplied. Citi, MERS and VRM was charged at

all times relevant to the foreclosure and eviction processes with knowledge of the state

of the public record, including the absence of a valid Assignment or Appointment of

Substitute Trustees (and, in the case of VRM, the absence of title in VRM or its authorized

principal at the time of VRM’s critical acts, including its last effort to have a writ of

possession executed as to the Property of the Isaacs when VRM no longer had even

a superficial claim of title).

The standard for compliance with lien instruments and applicable statutes is strict,

and even “harsh” in the terminology of our courts.12 Strict compliance requires that

12 The Thirteenth Court of Appeals explained, in Bonilla v. Roberson, 918 S.W.2d 17, 21 (Tex. App. – Corpus Christi, 1996) (emphasis supplied):

The power of the trustee to sell the deed for the parties is derived wholly from the trust instrument. Winters v. Slover, 151 Tex. 485, 251 S.W.2d 726, 728 (1952). Because a power of sale under a deed of trust is a harsh method of collecting debts and of disposing of another's property, it can only be exercised by strict compliance with the note and conditions of sale. Crow v. Heath, 516 S.W.2d 225, 228 (Tex.Civ.App.--Corpus Christi 1974, writ ref'd n.r.e.). Thus, a trustee must strictly pursue the terms of the instrument, the provisions of law relative to such a sale, and the details prescribed as to the manner of the sale. See Durkay v. Madco Oil Co., 862 S.W.2d 14, 17 (Tex.App.--Corpus Christi 1993, writ denied); Randolph v. Citizens Nat'l Bank, 141 S.W.2d 1030, 1032 (Tex.Civ.App.--Amarillo 1940, writ dism'd judgm't cor.).

When exercising a power contained in a deed of trust, the trustee becomes a special agent for both parties, and he must act with absolute impartiality and with fairness to all concerned in order to achieve the objective of the trust. See Hammonds v. Holmes,

BRIEF OF APPELLANTS 24 there be no foreclosure attempt without clearly established authority for the Assignment

or Appointment. There was no strict compliance with applicable law, since the Assignment,

Appointment and any subsequent trustee or other deed(s) were all made without authority,

of which Citi (and MERS, as to the Assignment) would have been aware since Citi and

MERS were charged with knowledge of the state of the public record at the times of

creation and execution of each such instrument.

Conclusion/Prayer

For the reasons stated above, this Court should reverse and vacate the summary

judgment of the 26th District Court that the claims of Appellants Isaac against Citi, MERS

and VRM be dismissed with prejudice, and should remand the case to the 26th District

Court for a new trial. Appellants Isaac further request that all costs of this appeal be

taxed against Appellees.

559 S.W.2d 345, 347 (Tex.1977); First Federal Sav. & Loan Ass'n v. Sharp, 359 S.W.2d 902, 904 (Tex.1962).

In addition, a purchaser at a foreclosure sale obtains that title which the trustee has authority to convey. Durkay, 862 S.W.2d at 17.

BRIEF OF APPELLANTS 25 Respectfully submitted,

/s/ Michael Brinkley _____________________________________ Michael Brinkley State Bar No. 03004300 BRINKLEY LAW PLLC P. O. Box 820711 Fort Worth, Texas 76182-0711 817.284.3535; fax 888.511.0946 michael@brinkleypllc.com Attorney for Appellants

Certificate of Compliance for T.R.A.P. 9.4(i)(3)

I certify that the word count indicated by my word processing software for the portions of the foregoing brief covered by Texas Rule of Appellate Procedure 9.4(i)(1) is 4,214.

Dated: February 2, 2015. /s/ Michael Brinkley _____________________________________ Michael Brinkley

BRIEF OF APPELLANTS 26 Certificate of Service

I certify that a true and correct copy of the foregoing has been served on the following counsel and/or pro se parties of record, by mailing in accordance with Texas Rule of Appellate Procedure 9.5, on the date shown:

B. David L. Foster John W. Ellis LOCKE LORD LLP 600 Congress Avenue, Suite 2200 Austin, Texas 78701 voice 512.305.4700; fax 512.305.4800

Christopher Ferguson LAW OFFICES OF JACK O’BOYLE P.O. Box 815369 Dallas, Texas 75381 voice 972.247.0653, fax 972.247.0642.

Mark D. Hopkins HOPKINS & WILLIAMS 12117 Bee Caves Road, Suite 260 Austin, Texas 78738 voice 512.600.4320, fax 512.600.4326

Dated: February 2, 2015. /s/ Michael Brinkley _____________________________________ Michael Brinkley

BRIEF OF APPELLANTS 27 APPENDIX 1

BRIEF OF APPELLANTS 28 432 APPENDIX 2

BRIEF OF APPELLANTS 30 CIVIL PRACTICE AND REMEDIES CODE

TITLE 2. TRIAL, JUDGMENT, AND APPEAL

SUBTITLE A. GENERAL PROVISIONS

CHAPTER 12. LIABILITY RELATED TO A FRAUDULENT COURT RECORD OR A

FRAUDULENT LIEN OR CLAIM FILED AGAINST REAL OR PERSONAL PROPERTY

Sec. 12.001. DEFINITIONS. In this chapter:

(1) "Court record" has the meaning assigned by Section

37.01, Penal Code.

(2) "Exemplary damages" has the meaning assigned by

Section 41.001.

(2-a) "Filing office" has the meaning assigned by

Section 9.102, Business & Commerce Code.

(2-b) "Financing statement" has the meaning assigned by

Section 9.102, Business & Commerce Code.

(2-c) "Inmate" means a person housed in a secure

correctional facility.

(3) "Lien" means a claim in property for the payment of

a debt and includes a security interest.

(4) "Public servant" has the meaning assigned by Section

1.07, Penal Code, and includes officers and employees of the United

States.

(5) "Secure correctional facility" has the meaning

assigned by Section 1.07, Penal Code.

Added by Acts 1997, 75th Leg., ch. 189, Sec. 16, eff. May 21, 1997.

Renumbered from Civil Practice & Remedies Code Sec. 11.001 by Acts

1999, 76th Leg., ch. 62, Sec. 19.01(3), eff. Sept. 1, 1999.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 895, Sec. 1, eff. September 1,

2007.

Sec. 12.002. LIABILITY. (a) A person may not make, present,

Page -1 - or use a document or other record with:

(1) knowledge that the document or other record is a

fraudulent court record or a fraudulent lien or claim against real

or personal property or an interest in real or personal property;

(2) intent that the document or other record be given

the same legal effect as a court record or document of a court

created by or established under the constitution or laws of this

state or the United States or another entity listed in Section

37.01, Penal Code, evidencing a valid lien or claim against real or

personal property or an interest in real or personal property; and

(3) intent to cause another person to suffer:

(A) physical injury;

(B) financial injury; or

(C) mental anguish or emotional distress.

(a-1) Except as provided by Subsection (a-2), a person may

not file an abstract of a judgment or an instrument concerning real

or personal property with a court or county clerk, or a financing

statement with a filing office, if the person:

(1) is an inmate; or

(2) is not licensed or regulated under Title 11,

Insurance Code, and is filing on behalf of another person who the

person knows is an inmate.

(a-2) A person described by Subsection (a-1) may file an

abstract, instrument, or financing statement described by that

subsection if the document being filed includes a statement

indicating that:

(1) the person filing the document is an inmate; or

(2) the person is filing the document on behalf of a

person who is an inmate.

(b) A person who violates Subsection (a) or (a-1) is liable

to each injured person for:

(1) the greater of:

Page -2 - (A) $10,000; or

(B) the actual damages caused by the violation;

(2) court costs;

(3) reasonable attorney's fees; and

(4) exemplary damages in an amount determined by the

court.

(c) A person claiming a lien under Chapter 53, Property Code,

is not liable under this section for the making, presentation, or

use of a document or other record in connection with the assertion

of the claim unless the person acts with intent to defraud.

Added by Acts 1997, 75th Leg., ch. 189, Sec. 16, eff. May 21, 1997.

Renumbered from Civil Practice & Remedies Code Sec. 11.002 by Acts

1999, 76th Leg., ch. 62, Sec. 19.01(3), eff. Sept. 1, 1999.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 895, Sec. 2, eff. September 1,

2007.

Acts 2009, 81st Leg., R.S., Ch. 1260, Sec. 1, eff. September

1, 2009.

Sec. 12.003. CAUSE OF ACTION. (a) The following persons may

bring an action to enjoin violation of this chapter or to recover

damages under this chapter:

(1) the attorney general;

(2) a district attorney;

(3) a criminal district attorney;

(4) a county attorney with felony responsibilities;

(5) a county attorney;

(6) a municipal attorney;

(7) in the case of a fraudulent judgment lien, the

person against whom the judgment is rendered; and

(8) in the case of a fraudulent lien or claim against

real or personal property or an interest in real or personal

Page -3 - property, the obligor or debtor, or a person who owns an interest

in the real or personal property.

(b) Notwithstanding any other law, a person or a person

licensed or regulated by Title 11, Insurance Code (the Texas Title

Insurance Act), does not have a duty to disclose a fraudulent, as

described by Section 51.901(c), Government Code, court record,

document, or instrument purporting to create a lien or purporting

to assert a claim on real property or an interest in real property

in connection with a sale, conveyance, mortgage, or other transfer

of the real property or interest in real property.

(c) Notwithstanding any other law, a purported judgment lien

or document establishing or purporting to establish a judgment lien

against property in this state, that is issued or purportedly

issued by a court or a purported court other than a court

established under the laws of this state or the United States, is

void and has no effect in the determination of any title or right

to the property.

Added by Acts 1997, 75th Leg., ch. 189, Sec. 16, eff. May 21, 1997.

Renumbered from Civil Practice & Remedies Code Sec. 11.003 by Acts

1999, 76th Leg., ch. 62, Sec. 19.01(3), eff. Sept. 1, 1999.

Amended by:

Acts 2005, 79th Leg., Ch. 728, Sec. 11.104, eff. September 1,

2005.

Sec. 12.004. VENUE. An action under this chapter may be

brought in any district court in the county in which the recorded

document is recorded or in which the real property is located.

Added by Acts 1997, 75th Leg., ch. 189, Sec. 16, eff. May 21, 1997.

Renumbered from Civil Practice & Remedies Code Sec. 11.004 by Acts

1999, 76th Leg., ch. 62, Sec. 19.01(3), eff. Sept. 1, 1999.

Sec. 12.005. FILING FEES. (a) The fee for filing an action

Page -4 - under this chapter is $15. The plaintiff must pay the fee to the

clerk of the court in which the action is filed. Except as

provided by Subsection (b), the plaintiff may not be assessed any

other fee, cost, charge, or expense by the clerk of the court or

other public official in connection with the action.

(b) The fee for service of notice of an action under this

section charged to the plaintiff may not exceed:

(1) $20 if the notice is delivered in person; or

(2) the cost of postage if the service is by registered

or certified mail.

(c) A plaintiff who is unable to pay the filing fee and fee

for service of notice may file with the court an affidavit of

inability to pay under the Texas Rules of Civil Procedure.

(d) If the fee imposed under Subsection (a) is less than the

filing fee the court imposes for filing other similar actions and

the plaintiff prevails in the action, the court may order a

defendant to pay to the court the differences between the fee paid

under Subsection (a) and the filing fee the court imposes for

filing other similar actions.

Added by Acts 1997, 75th Leg., ch. 189, Sec. 16, eff. May 21, 1997.

Renumbered from Civil Practice & Remedies Code Sec. 11.005 by Acts

1999, 76th Leg., ch. 62, Sec. 19.01(3), eff. Sept. 1, 1999.

Sec. 12.006. PLAINTIFF'S COSTS. (a) The court shall award

the plaintiff the costs of bringing the action if:

(1) the plaintiff prevails; and

(2) the court finds that the defendant, at the time the

defendant caused the recorded document to be recorded or filed,

knew or should have known that the recorded document is fraudulent,

as described by Section 51.901(c), Government Code.

(b) For purposes of this section, the costs of bringing the

action include all court costs, attorney's fees, and related

Page -5 - expenses of bringing the action, including investigative expenses.

Added by Acts 1997, 75th Leg., ch. 189, Sec. 16, eff. May 21, 1997.

Renumbered from Civil Practice & Remedies Code Sec. 11.006 by Acts

1999, 76th Leg., ch. 62, Sec. 19.01(3), eff. Sept. 1, 1999.

Sec. 12.007. EFFECT ON OTHER LAW. This law is cumulative of

other law under which a person may obtain judicial relief with

respect to a recorded document or other record.

Added by Acts 1997, 75th Leg., ch. 189, Sec. 16, eff. May 21, 1997.

Renumbered from Civil Practice & Remedies Code Sec. 11.007 by Acts

1999, 76th Leg., ch. 62, Sec. 19.01(3), eff. Sept. 1, 1999.

Page -6 - FINANCE CODE CHAPTER 392. DEBT COLLECTION http://www.statutes.legis.state.tx.us/Docs/FI/htm/FI.392.htm

FINANCE CODE

TITLE 5. PROTECTION OF CONSUMERS OF FINANCIAL SERVICES

CHAPTER 392. DEBT COLLECTION

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 392.001. DEFINITIONS. In this chapter: (1) "Consumer" means an individual who has a consumer debt. (2) "Consumer debt" means an obligation, or an alleged obligation, primarily for personal, family, or household purposes and arising from a transaction or alleged transaction. (3) "Creditor" means a party, other than a consumer, to a transaction or alleged transaction involving one or more consumers. (4) "Credit bureau" means a person who, for compensation, gathers, records, and disseminates information relating to the creditworthiness, financial responsibility, and paying habits of, and similar information regarding, a person for the purpose of furnishing that information to another person. (5) "Debt collection" means an action, conduct, or practice in collecting, or in soliciting for collection, consumer debts that are due or alleged to be due a creditor. (6) "Debt collector" means a person who directly or indirectly engages in debt collection and includes a person who sells or offers to sell forms represented to be a collection system, device, or scheme intended to be used to collect consumer debts. (7) "Third-party debt collector" means a debt collector, as defined by 15 U.S.C. Section 1692a(6), but does not include an attorney collecting a debt as an attorney on behalf of and in the name of a client unless the attorney has nonattorney employees who: (A) are regularly engaged to solicit debts for collection; or (B) regularly make contact with debtors for the purpose of collection or adjustment of debts.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.42, eff. Sept. 1, 1999.

SUBCHAPTER B. SURETY BOND

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Sec. 392.101. BOND REQUIREMENT. (a) A third-party debt collector or credit bureau may not engage in debt collection unless the third-party debt collector or credit bureau has obtained a surety bond issued by a surety company authorized to do business in this state as prescribed by this section. A copy of the bond must be filed with the secretary of state. (b) The bond must be in favor of: (1) any person who is damaged by a violation of this chapter; and (2) this state for the benefit of any person who is damaged by a violation of this chapter. (c) The bond must be in the amount of $10,000.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 392.102. CLAIM AGAINST BOND. A person who claims against a bond for a violation of this chapter may maintain an action against the third-party debt collector or credit bureau and against the surety. The aggregate liability of the surety to all persons damaged by a violation of this chapter may not exceed the amount of the bond.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

SUBCHAPTER C. INFORMATION IN FILES OF CREDIT BUREAU OR DEBT COLLECTOR

Sec. 392.201. REPORT TO CONSUMER. Not later than the 45th day after the date of the request, a credit bureau shall provide to a person in its registry a copy of all information contained in its files concerning that person.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 392.202. CORRECTION OF THIRD-PARTY DEBT COLLECTOR'S OR CREDIT BUREAU'S FILES. (a) An individual who disputes the accuracy of an item that is in a third-party debt collector's or credit bureau's file on the individual and that relates to a debt being collected by the third-party debt collector may notify in writing the third-party debt collector of the inaccuracy. The third-party debt collector shall make a written record of the dispute. If the third-party debt collector does not report information related to the dispute to a credit bureau, the

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third-party debt collector shall cease collection efforts until an investigation of the dispute described by Subsections (b)-(e) determines the accurate amount of the debt, if any. If the third-party debt collector reports information related to the dispute to a credit bureau, the reporting third-party debt collector shall initiate an investigation of the dispute described by Subsections (b)-(e) and shall cease collection efforts until the investigation determines the accurate amount of the debt, if any. This section does not affect the application of Chapter 20, Business & Commerce Code, to a third-party debt collector subject to that chapter. (b) Not later than the 30th day after the date a notice of inaccuracy is received, a third-party debt collector who initiates an investigation shall send a written statement to the individual: (1) denying the inaccuracy; (2) admitting the inaccuracy; or (3) stating that the third-party debt collector has not had sufficient time to complete an investigation of the inaccuracy. (c) If the third-party debt collector admits that the item is inaccurate under Subsection (b), the third-party debt collector shall: (1) not later than the fifth business day after the date of the admission, correct the item in the relevant file; and (2) immediately cease collection efforts related to the portion of the debt that was found to be inaccurate and on correction of the item send, to each person who has previously received a report from the third-party debt collector containing the inaccurate information, notice of the inaccuracy and a copy of an accurate report. (d) If the third-party debt collector states that there has not been sufficient time to complete an investigation, the third-party debt collector shall immediately: (1) change the item in the relevant file as requested by the individual; (2) send to each person who previously received the report containing the information a notice that is equivalent to a notice under Subsection (c) and a copy of the changed report; and (3) cease collection efforts. (e) On completion by the third-party debt collector of the investigation, the third-party debt collector shall inform the individual of the determination of whether the item is accurate or inaccurate. If the third-party debt collector determines that the information was accurate, the third-party debt collector may again

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report that information and resume collection efforts.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 2003, 78th Leg., ch. 851, Sec. 1, eff. Sept. 1, 2003.

SUBCHAPTER D. PROHIBITED DEBT COLLECTION METHODS

Sec. 392.301. THREATS OR COERCION. (a) In debt collection, a debt collector may not use threats, coercion, or attempts to coerce that employ any of the following practices: (1) using or threatening to use violence or other criminal means to cause harm to a person or property of a person; (2) accusing falsely or threatening to accuse falsely a person of fraud or any other crime; (3) representing or threatening to represent to any person other than the consumer that a consumer is wilfully refusing to pay a nondisputed consumer debt when the debt is in dispute and the consumer has notified in writing the debt collector of the dispute; (4) threatening to sell or assign to another the obligation of the consumer and falsely representing that the result of the sale or assignment would be that the consumer would lose a defense to the consumer debt or would be subject to illegal collection attempts; (5) threatening that the debtor will be arrested for nonpayment of a consumer debt without proper court proceedings; (6) threatening to file a charge, complaint, or criminal action against a debtor when the debtor has not violated a criminal law; (7) threatening that nonpayment of a consumer debt will result in the seizure, repossession, or sale of the person's property without proper court proceedings; or (8) threatening to take an action prohibited by law. (b) Subsection (a) does not prevent a debt collector from: (1) informing a debtor that the debtor may be arrested after proper court proceedings if the debtor has violated a criminal law of this state; (2) threatening to institute civil lawsuits or other judicial proceedings to collect a consumer debt; or (3) exercising or threatening to exercise a statutory or contractual right of seizure, repossession, or sale that does not require court proceedings.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

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Sec. 392.302. HARASSMENT; ABUSE. In debt collection, a debt collector may not oppress, harass, or abuse a person by: (1) using profane or obscene language or language intended to abuse unreasonably the hearer or reader; (2) placing telephone calls without disclosing the name of the individual making the call and with the intent to annoy, harass, or threaten a person at the called number; (3) causing a person to incur a long distance telephone toll, telegram fee, or other charge by a medium of communication without first disclosing the name of the person making the communication; or (4) causing a telephone to ring repeatedly or continuously, or making repeated or continuous telephone calls, with the intent to harass a person at the called number.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 392.303. UNFAIR OR UNCONSCIONABLE MEANS. (a) In debt collection, a debt collector may not use unfair or unconscionable means that employ the following practices: (1) seeking or obtaining a written statement or acknowledgment in any form that specifies that a consumer's obligation is one incurred for necessaries of life if the obligation was not incurred for those necessaries; (2) collecting or attempting to collect interest or a charge, fee, or expense incidental to the obligation unless the interest or incidental charge, fee, or expense is expressly authorized by the agreement creating the obligation or legally chargeable to the consumer; or (3) collecting or attempting to collect an obligation under a check, draft, debit payment, or credit card payment, if: (A) the check or draft was dishonored or the debit payment or credit card payment was refused because the check or draft was not drawn or the payment was not made by a person authorized to use the applicable account; (B) the debt collector has received written notice from a person authorized to use the account that the check, draft, or payment was unauthorized; and (C) the person authorized to use the account has filed a report concerning the unauthorized check, draft, or payment with a law

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enforcement agency, as defined by Article 59.01, Code of Criminal Procedure, and has provided the debt collector with a copy of the report. (b) Notwithstanding Subsection (a)(2), a creditor may charge a reasonable reinstatement fee as consideration for renewal of a real property loan or contract of sale, after default, if the additional fee is included in a written contract executed at the time of renewal. (c) Subsection (a)(3) does not prohibit a debt collector from collecting or attempting to collect an obligation under a check, draft, debit payment, or credit card payment if the debt collector has credible evidence, including a document, video recording, or witness statement, that the report filed with a law enforcement agency, as required by Subsection (a)(3)(C), is fraudulent and that the check, draft, or payment was authorized.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2005, 79th Leg., Ch. 505 (H.B. 628), Sec. 1, eff. September 1, 2005.

Sec. 392.304. FRAUDULENT, DECEPTIVE, OR MISLEADING REPRESENTATIONS. (a) Except as otherwise provided by this section, in debt collection or obtaining information concerning a consumer, a debt collector may not use a fraudulent, deceptive, or misleading representation that employs the following practices: (1) using a name other than the: (A) true business or professional name or the true personal or legal name of the debt collector while engaged in debt collection; or (B) name appearing on the face of the credit card while engaged in the collection of a credit card debt; (2) failing to maintain a list of all business or professional names known to be used or formerly used by persons collecting consumer debts or attempting to collect consumer debts for the debt collector; (3) representing falsely that the debt collector has information or something of value for the consumer in order to solicit or discover information about the consumer; (4) failing to disclose clearly in any communication with the debtor the name of the person to whom the debt has been assigned or is owed when making a demand for money; (5) in the case of a third-party debt collector, failing to

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disclose, except in a formal pleading made in connection with a legal action: (A) that the communication is an attempt to collect a debt and that any information obtained will be used for that purpose, if the communication is the initial written or oral communication between the third-party debt collector and the debtor; or (B) that the communication is from a debt collector, if the communication is a subsequent written or oral communication between the third-party debt collector and the debtor; (6) using a written communication that fails to indicate clearly the name of the debt collector and the debt collector's street address or post office box and telephone number if the written notice refers to a delinquent consumer debt; (7) using a written communication that demands a response to a place other than the debt collector's or creditor's street address or post office box; (8) misrepresenting the character, extent, or amount of a consumer debt, or misrepresenting the consumer debt's status in a judicial or governmental proceeding; (9) representing falsely that a debt collector is vouched for, bonded by, or affiliated with, or is an instrumentality, agent, or official of, this state or an agency of federal, state, or local government; (10) using, distributing, or selling a written communication that simulates or is represented falsely to be a document authorized, issued, or approved by a court, an official, a governmental agency, or any other governmental authority or that creates a false impression about the communication's source, authorization, or approval; (11) using a seal, insignia, or design that simulates that of a governmental agency; (12) representing that a consumer debt may be increased by the addition of attorney's fees, investigation fees, service fees, or other charges if a written contract or statute does not authorize the additional fees or charges; (13) representing that a consumer debt will definitely be increased by the addition of attorney's fees, investigation fees, service fees, or other charges if the award of the fees or charges is subject to judicial discretion; (14) representing falsely the status or nature of the services rendered by the debt collector or the debt collector's business;

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(15) using a written communication that violates the United States postal laws and regulations; (16) using a communication that purports to be from an attorney or law firm if it is not; (17) representing that a consumer debt is being collected by an attorney if it is not; (18) representing that a consumer debt is being collected by an independent, bona fide organization engaged in the business of collecting past due accounts when the debt is being collected by a subterfuge organization under the control and direction of the person who is owed the debt; or (19) using any other false representation or deceptive means to collect a debt or obtain information concerning a consumer. (b) Subsection (a)(4) does not apply to a person servicing or collecting real property first lien mortgage loans or credit card debts. (c) Subsection (a)(6) does not require a debt collector to disclose the names and addresses of employees of the debt collector. (d) Subsection (a)(7) does not require a response to the address of an employee of a debt collector. (e) Subsection (a)(18) does not prohibit a creditor from owning or operating a bona fide debt collection agency.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 2003, 78th Leg., ch. 851, Sec. 2, eff. Sept. 1, 2003; Acts 2003, 78th Leg., 3rd C.S., ch. 3, Sec. 28.01, eff. Jan. 11, 2004.

Sec. 392.305. DECEPTIVE USE OF CREDIT BUREAU NAME. A person may not use "credit bureau," "retail merchants," or "retail merchants association" in the person's business or trade name unless: (1) the person is engaged in gathering, recording, and disseminating information, both favorable and unfavorable, relating to the creditworthiness, financial responsibility, and paying habits of, and similar information regarding, persons being considered for credit extension so that a prospective creditor can make a sound decision in the extension of credit; or (2) the person is a nonprofit retail trade association that: (A) consists of individual members; (B) qualifies as a bona fide business league as defined by the United States Internal Revenue Service; and (C) does not engage in the business of debt collection or

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credit reporting.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 392.306. USE OF INDEPENDENT DEBT COLLECTOR. A creditor may not use an independent debt collector if the creditor has actual knowledge that the independent debt collector repeatedly or continuously engages in acts or practices that are prohibited by this chapter.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

SUBCHAPTER E. DEFENSE, CRIMINAL PENALTY, AND CIVIL REMEDIES

Sec. 392.401. BONA FIDE ERROR. A person does not violate this chapter if the action complained of resulted from a bona fide error that occurred notwithstanding the use of reasonable procedures adopted to avoid the error.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 392.402. CRIMINAL PENALTY. (a) A person commits an offense if the person violates this chapter. (b) An offense under this section is a misdemeanor punishable by a fine of not less than $100 or more than $500 for each violation. (c) A misdemeanor charge under this section must be filed not later than the first anniversary of the date of the alleged violation.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 392.403. CIVIL REMEDIES. (a) A person may sue for: (1) injunctive relief to prevent or restrain a violation of this chapter; and (2) actual damages sustained as a result of a violation of this chapter. (b) A person who successfully maintains an action under Subsection (a) is entitled to attorney's fees reasonably related to the amount of work performed and costs. (c) On a finding by a court that an action under this section was brought in bad faith or for purposes of harassment, the court shall award the defendant attorney's fees reasonably related to the work

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performed and costs. (d) If the attorney general reasonably believes that a person is violating or is about to violate this chapter, the attorney general may bring an action in the name of this state against the person to restrain or enjoin the person from violating this chapter. (e) A person who successfully maintains an action under this section for violation of Section 392.101, 392.202, or 392.301(a)(3) is entitled to not less than $100 for each violation of this chapter.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 392.404. REMEDIES UNDER OTHER LAW. (a) A violation of this chapter is a deceptive trade practice under Subchapter E, Chapter 17, Business & Commerce Code, and is actionable under that subchapter. (b) This chapter does not affect or alter a remedy at law or in equity otherwise available to a debtor, creditor, governmental entity, or other legal entity.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

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Sec. 24.002. FORCIBLE DETAINER. (a) A person who refuses to surrender possession of real property on demand commits a forcible detainer if the person: (1) is a tenant or a subtenant wilfully and without force holding over after the termination of the tenant's right of possession; (2) is a tenant at will or by sufferance, including an occupant at the time of foreclosure of a lien superior to the tenant's lease; or (3) is a tenant of a person who acquired possession by forcible entry. (b) The demand for possession must be made in writing by a person entitled to possession of the property and must comply with the requirements for notice to vacate under Section 24.005.

Acts 1983, 68th Leg., p. 3514, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1985, 69th Leg., ch. 200, Sec. 1, eff. Aug. 26, 1985; Acts 1989, 71st Leg., ch. 688, Sec. 2, eff. Sept. 1, 1989.

Sec. 24.003. SUBSTITUTION OF PARTIES. If a tenancy for a term expires while the tenant's suit for forcible entry is pending, the landlord may prosecute the suit in the tenant's name for the landlord's benefit and at the landlord's expense. It is immaterial whether the tenant received possession from the landlord or became a tenant after obtaining possession of the property.

Acts 1983, 68th Leg., p. 3515, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1985, 69th Leg., ch. 891, Sec. 1, eff. Aug. 26, 1985.

Sec. 24.004. JURISDICTION; DISMISSAL. (a) Except as provided by Subsection (b), a justice court in the precinct in which the real property is located has jurisdiction in eviction suits. Eviction suits include forcible entry and detainer and forcible detainer suits. A justice court has jurisdiction to issue a writ of possession under Sections 24.0054(a), (a-2), and (a-3). (b) A justice court does not have jurisdiction in a forcible entry and detainer or forcible detainer suit and shall dismiss the suit if the defendant files a sworn statement alleging the suit is based on a deed executed in violation of Chapter 21, Business & Commerce Code.

Acts 1983, 68th Leg., p. 3515, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1985, 69th Leg., ch. 891, Sec. 1, eff. Aug. 26, 1985; Acts 1997, 75th Leg., ch. 1205, Sec. 1, eff. Sept. 1, 1997. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 958, Sec. 1, eff. January 1, 2012. Acts 2011, 82nd Leg., R.S., Ch. 1242, Sec. 3, eff. September 1, 2011. Sec. 24.005. NOTICE TO VACATE PRIOR TO FILING EVICTION SUIT. (a) If the occupant is a tenant under a written lease or oral rental agreement, the landlord must give a tenant who defaults or holds over beyond the end of the rental term or renewal period at least three days' written notice to vacate the premises before the landlord files a forcible detainer suit, unless the parties have contracted for a shorter or longer notice period in a written lease or agreement. A landlord who files a forcible detainer suit on grounds that the tenant is holding over beyond the end of the rental term or renewal period must also comply with the tenancy termination requirements of Section 91.001. (b) If the occupant is a tenant at will or by sufferance, the landlord must give the tenant at least three days' written notice to vacate before the landlord files a forcible detainer suit unless the parties have contracted for a shorter or longer notice period in a written lease or agreement. If a building is purchased at a tax foreclosure sale or a trustee's foreclosure sale under a lien superior to the tenant's lease and the tenant timely pays rent and is not otherwise in default under the tenant's lease after foreclosure, the purchaser must give a residential tenant of the building at least 30 days' written notice to vacate if the purchaser chooses not to continue the lease. The tenant is considered to timely pay the rent under this subsection if, during the month of the foreclosure sale, the tenant pays the rent for that month to the landlord before receiving any notice that a foreclosure sale is scheduled during the month or pays the rent for that month to the foreclosing lienholder or the purchaser at foreclosure not later than the fifth day after the date of receipt of a written notice of the name and address of the purchaser that requests payment. Before a foreclosure sale, a foreclosing lienholder may give written notice to a tenant stating that a foreclosure notice has been given to the landlord or owner of the property and specifying the date of the foreclosure. (c) If the occupant is a tenant of a person who acquired possession by forcible entry, the landlord must give the person at least three days' written notice to vacate before the landlord files a forcible detainer suit. (d) In all situations in which the entry by the occupant was a forcible entry under Section 24.001, the person entitled to possession must give the occupant oral or written notice to vacate before the landlord files a forcible entry and detainer suit. The notice to vacate under this subsection may be to vacate immediately or by a specified deadline. (e) If the lease or applicable law requires the landlord to give a tenant an opportunity to respond to a notice of proposed eviction, a notice to vacate may not be given until the period provided for the tenant to respond to the eviction notice has expired. (f) The notice to vacate shall be given in person or by mail at the premises in question. Notice in person may be by personal delivery to the tenant or any person residing at the premises who is 16 years of age or older or personal delivery to the premises and affixing the notice to the inside of the main entry door. Notice by mail may be by regular mail, by registered mail, or by certified mail, return receipt requested, to the premises in question. If the dwelling has no mailbox and has a keyless bolting device, alarm system, or dangerous animal that prevents the landlord from entering the premises to leave the notice to vacate on the inside of the main entry door, the landlord may securely affix the notice on the outside of the main entry door. (g) The notice period is calculated from the day on which the notice is delivered. (h) A notice to vacate shall be considered a demand for possession for purposes of Subsection (b) of Section 24.002. (i) If before the notice to vacate is given as required by this section the landlord has given a written notice or reminder to the tenant that rent is due and unpaid, the landlord may include in the notice to vacate required by this section a demand that the tenant pay the delinquent rent or vacate the premises by the date and time stated in the notice.

Acts 1983, 68th Leg., p. 3515, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1985, 69th Leg., ch. 891, Sec. 1, eff. Sept. 1, 1985; Acts 1989, 71st Leg., ch. 688, Sec. 3, eff. Sept. 1, 1989; Acts 1997, 75th Leg., ch. 1205, Sec. 2, eff. Sept. 1, 1997.

Texas Rule of Civil Procedure 93 / Certain Pleas to be Verified

A pleading setting up any of the following matters, unless the truth of such matters appear of record, shall be verified by affidavit. 1. That the plaintiff has not legal capacity to sue or that the defendant has not legal capacity to be sued. 2. That the plaintiff is not entitled to recover in the capacity in which he sues, or that the defendant is not liable in the capacity in which he is sued. 3. That there is another suit pending in this State between the same parties involving the same claim. 4. That there is a defect of parties, plaintiff or defendant. 5. A denial of partnership as alleged in any pleading as to any party to the suit. 6. That any party alleged in any pleading to be a corporation is not incorporated as alleged. 7. Denial of the execution by himself or by his authority of any instrument in writing, upon which any pleading is founded, in whole or in part and charged to have been executed by him or by his authority, and not alleged to be lost or destroyed. Where such instrument in writing is charged to have been executed by a person then deceased, the affidavit shall be sufficient if it states that the affiant has reason to believe and does believe that such instrument was not executed by the decedent or by his authority. In the absence of such a sworn plea, the instrument shall be received in evidence as fully proved. 8. A denial of the genuineness of the indorsement or assignment of a written instrument upon which suit is brought by an indorsee or assignee and in the absence of such a sworn plea, the indorsement or assignment thereof shall be held as fully proved. The denial required by this subdivision of the rule may be made upon information and belief. 9. That a written instrument upon which a pleading is founded is without consideration, or that the consideration of the same has failed in whole or in part. PROBATE CODE Section 489.

A durable power of attorney for a real property transaction requiring the execution and delivery of an instrument that is to be recorded, including a release, assignment, satisfaction, mortgage, security agreement, deed of trust, encumbrance, deed of conveyance, oil, gas, or other mineral lease, memorandum of a lease, lien, or other claim or right to real property, shall be recorded in the office of the county clerk of the county in which the property is located.

Added by Acts 1993, 73rd Leg., ch. 49, Sec. 1, eff. Sept. 1, 1993.

PROPERTY CODE

TITLE 5. EXEMPT PROPERTY AND LIENS

SUBTITLE B. LIENS

CHAPTER 51. PROVISIONS GENERALLY APPLICABLE TO LIENS

Sec. 51.0001. DEFINITIONS. In this chapter:

(1) "Book entry system" means a national book entry system for registering a beneficial interest in a security instrument that acts as a nominee for the grantee, beneficiary, owner, or holder of the security instrument and its successors and assigns.

(2) "Debtor's last known address" means:

(A) for a debt secured by the debtor's residence, the debtor's residence address unless the debtor provided the mortgage servicer a written change of address before the date the mortgage servicer mailed a notice required by Section 51.002; or

(B) for a debt other than a debt described by Paragraph (A), the debtor's last known address as shown by the records of the mortgage servicer of the security instrument unless the debtor provided the current mortgage servicer a written change of address before the date the mortgage servicer mailed a notice required by Section 51.002.

(3) "Mortgage servicer" means the last person to whom a mortgagor has been instructed by the current mortgagee to send payments for the debt secured by a security instrument. A mortgagee may be the mortgage servicer.

(4) "Mortgagee" means:

(A) the grantee, beneficiary, owner, or holder of a security instrument; (B) a book entry system; or

(C) if the security interest has been assigned of record, the last person to whom the security interest has been assigned of record.

(5) "Mortgagor" means the grantor of a security instrument.

(6) "Security instrument" means a deed of trust, mortgage, or other contract lien on an interest in real property.

(7) "Substitute trustee" means a person appointed by the current mortgagee or mortgage servicer under the terms of the security instrument to exercise the power of sale.

(8) "Trustee" means a person or persons authorized to exercise the power of sale under the terms of a security instrument in accordance with Section 51.0074.

Added by Acts 2003, 78th Leg., ch. 554, Sec. 1, eff. Jan. 1, 2004.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 903 (H.B. 2738), Sec. 1, eff. June 15, 2007.

Sec. 51.001. EFFECT ON OTHER LIENS. Except as provided by Chapter 59, this subtitle does not affect:

(1) the right to create a lien by special contract or agreement; or

(2) a lien that is not treated in this subtitle, including a lien arising under common law, in equity, or under another statute of this state.

Acts 1983, 68th Leg., p. 3525, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 51.0011. DEFAULT ARISING FROM DELINQUENT AD VALOREM TAXES: INSTALLMENT AGREEMENTS. (a) Notwithstanding any agreement to the contrary, a debtor is not in default under a deed of trust or other contract lien on real property used as the debtor's residence for the delinquent payment of ad valorem taxes if:

(1) the debtor gave notice to the mortgage servicer of the intent to enter into an installment agreement with the taxing unit under Section 33.02, Tax Code, for the payment of the taxes at least 10 days before the date the debtor entered into the agreement; and

(2) the property is protected from seizure and sale and a suit may not be filed to collect a delinquent tax on the property as provided by Section 33.02(d), Tax Code.