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

Opinion

ACCEPTED

01-15-00404-CV

FIRST COURT OF APPEALS

HOUSTON, TEXAS

7/21/2015 1:02:23 PM

CHRISTOPHER PRINE

CLERK

CASE NO. 01-15-00404-CV

_________________________________

FILED IN

IN THE COURT OF APPEALS 1st COURT OF APPEALS FIRST DISTRICT OF TEXAS HOUSTON, TEXAS 7/21/2015 1:02:23 PM

______________________________________________________

CHRISTOPHER A. PRINE

Clerk

MID PAC PORTFOLIO, LLC

Appellant

VS.

PAULA WELCH AND CLYDE ALAN ASHWORTH Appellees

______________________________________________________

On Appeal From the

405th Judicial District Court Galveston County, Texas

______________________________________________________

BRIEF OF APPELLANT

______________________________________________________

Michael Burns

Attorney at Law

State Bar No. 03447980

P.O. Box 992

Allen, Texas 75013

Phone: (214) 354-1667

Attorney for Appellant

ORAL ARGUMENT IS NOT REQUESTED

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IDENTITY OF PARTIES AND COUNSEL

1. The Appellant/Plaintiff is:

Mid Pac Portfolio LLC 2. The Appellant/Plaintiff Trial and Appellant Counsel is:

Michael Burns Attorney at Law State Bar No. 03447980 P.O. Box 992 Allen, Texas 75013 Email: burnslaw@outlook.com Phone: (214) 354-1667

3. The Appellee/Defendants are:

Paula Welch and Clyde Alan Ashworth 4. The Appellee/Defendant Trial and Appellant Counsel is:

Mark W. Stevens P.O. Box 8118 Galveston, Texas 77553 Email: markwandstev@sbcglobal.net Phone: (409) 765-6306 Fax: (409) 765-6469

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TABLE OF CONTENTS

IDENTITY OF PARTIES AND COUNSEL ........................................................... ii TABLE OF AUTHORITIES ................................................................................... iv STATEMENT OF THE CASE ..................................................................................1 ORAL ARGUMENT……………………………………………………………….4 ISSUES PRESENTED……………………………………………………………..4

STATEMENT OF FACTS ........................................................................................5 SUMMARY OF ARGUMENT…………………………………………………….7

ARGUMENT .............................................................................................................9 CONCLUSION AND PRAYER………………………………………………….24 CERTIFICATE OF SERVICE ................................................................................25 CERTIFICATE OF COMPLIANCE .......................................................................25 APPENDIX ..............................................................................................................26

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TABLE OF AUTHORITIES

Cases

Baughn v. Capps, 2010 Tex. App. LEXIS 1580 (Tex. App. Waco 2010) .............10 Brown v. Brown, 145 S.W.3d 745 (Tex.App. – Dallas 2004). ................................17 Expro Americas, LLC v. Sanguine Gas Exploration, LLC, 351 S.W.3d 915 (Tex.

App.—Houston [14th ist.] 2011,pet.denied). .........................................................5 FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868 (Tex. 2000). ................4 Harbor Ventures, Inc. v. Dalton, 2012 Tex. App. LEXIS 4009, (Tex. App. Austin 2012). ....................................................................................................................19 Mem'l Park Med. Ctr., Inc. v. River Bend Dev. Group, L.P., 264 S.W.3d 810 (Tex.

App. Eastland 2008) .............................................................................................10 Pierce v. Gillespie, 761 S.W.2d 390 (Tex. App. Corpus Christi 1988) ..................10 Rhodes v. Cahill, 802 S.W.2d 643 (Tex. 1990) .........................................................9 Sarandos v. Blanton, 25 S.W.3d 811 (Tex. App.--Waco 2000, pet. denied) ............9 Schoellkopf Co. v. Starr, 88 S.W.2d 564 (Tex. Civ. App.- Galveston 1935), aff'd, 113 S.W.2d 1227 (Tex. 1938) ..............................................................................10 Session v. Woods, 206 S.W.3d 772 (Tex. App.—Texarkana 2006, pet. denied). .....8 Thomas v. Rhodes, 701 S.W.2 d 943, (Tex. App- Fort Worth, 1986). ....................10 Thompson v. Curtis, 127 S.W.3d 446, 450 (Tex.App.-Dallas 2004, no pet.) .........14 Watson v. Tipton, 274 S.W.3d 791 (Tex. App. Fort Worth 2008). ...........................7 Wells v. Johnson (Tex. App.-Amarillo, 2014) ...........................................................8 Statutes

Tex. Civ. Prac & Rem. Code § 16.004(a)(1) ...................................................... 8, 12 Tex. Civ. Prac & Rem. Code § 16.025 ....................................................................10 Tex. Civ. Prac. & Rem. Code § 16.021 (3)................................................................9 Tex. Civ. Prac. & Rem. Code § 16.021 (4)................................................................9 Tex. Civ. Prac. & Rem. Code § 16.025(a) (2) .........................................................10 Tex. Civ. Prac. & Rem. Code § 37.009 ............................................................. 19,20 Rules

Tex. R. Civ. P. 735 ...................................................................................................14 Tex. R. Civ. P. 736 ...................................................................................................14

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STATEMENT OF THE CASE

This case involves a dispute over the ownership of a piece of property located in Santa Fe, Texas. The Plaintiff in this case is Mid Pac Portfolio, LLC (Mid Pac). The Defendants, who are the appellees in this appeal, are Paula Welch and Clyde Ashworth (Welch and Ashworth).

The Court will probably notice in reviewing the pleadings in the Clerk’s Record that some of the pleadings contain different fonts. The font for Mid Pac’s original pleadings in the trial court were in 12 inch Times New Roman. Some of Mid Pac’s pleadings in the Clerk’s Record are in a font that is different from the original pleadings which must have occurred when the Clerk’s Record was prepared by the Galveston District Court clerk for this appeal.

Mid Pac filed this suit as a Declaratory Judgment action under Tex. Civil Practice and Remedies Code Sec. 37.001, et. seq. The initial Defendants were Ms. Welch, Mr. Ashworth and Wells Fargo Bank, Minnesota NA, formerly known as Norwest Bank, Minnesota, NA as Trustee for Salomon Brothers Mortgage Securities VII, Inc. Floating Rate Mortgage Pass Through Certificates, series 1999 –LB1 (Wells Fargo) (CR 6).

The general factual allegations in the original Petition were that Mid Pac had acquired a Deed in Lieu of Foreclosure executed by Welch and Ashworth in 2003 as part of a settlement of a law suit that Welch and Ashworth had initiated over a Texas Home

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Equity loan they had on their property in Santa Fe, Texas and that Mid Pac was now the true and record owner of the property. The legal theories Mid Pac alleged in the original Petition were a Declaratory Judgment to quiet title to the property in Mid Pac and Trespass to Try Title. (CR 6- 51). Welch and Ashworth filed a General Denial Answer to the Original Petition and raised several affirmative defenses which included various statutes of limitation. (CR 52- 56). Wells Fargo was served with the original Petition on March 20, 2013. (CR 57-59).

On July 9, 2013, Mid Pac filed an Amended Petition which added Citigroup Global Markets Realty Corp. (Citigroup) as a Defendant. The basic factual allegations and legal theories as to the ownership dispute between Mid Pac and Welch and Ashworth remained the same in the Amended Petition as in the Original Petition. (CR 60- 106). Citigroup was added as Defendant because Mid Pac had acquired the Deed in Lieu that is the central issue of the case from Citigroup. (CR 63-64). Citigroup was served with the Amended Petition by certified mail from the Court Clerk. (CR 107- 108). Ashworth and Welch responded to the Amended Petition by filing a Supplemental Answer raising several affirmative defenses and a Counterclaim for a Declaratory Judgment. (CR 109- 115).

On January 2, 2014, counsel for Mid Pac filed a Stipulation and Disclaimer executed by Citigroup and Mid Pac in which Citigroup disclaimed any interest in the property at issue and admitted that it had sold whatever interest it had in the Deed in Lieu

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at issue to Mid Pac. (CR 115-116). Wells Fargo failed to file an appearance in the suit. On January 15, 2014, Mid Pac filed a Motion for a Default Judgment against Wells Fargo and submitted a proposed Interlocutory Default Judgment against Wells Fargo to the trial court. (CR 117- 129).

From January 15, 2014 to April 15, 2015, Mid Pac and Welch and Ashworth filed cross Motions for Summary Judgment, responses and replies to the motions along with objections to each other’s summary judgment evidence and various other motions related to the cross Motions for Summary judgment. (CR 129 – 757). On August 15, 2015, the trial court entered an order granting Welch and Ashworth’s Motion for Summary Judgment and denying the Mid Pac’s Motion. (CR 758). The order entered by the court was based on the Welch and Ashworth’s proposed order granting their Motion for Summary Judgment which was submitted to the trial court on January 15, 2014. (CR- 553). On September 22, 2014, Mid Pac filed an Amended Motion for Default Judgment against Wells Fargo and Citigroup. (CR 759- 772). On February 11, 2015, the trial court entered an Order granting Mid Pac’s Amended Motion for Default Judgment against both Wells Fargo and Citigroup on a limited basis. (CR 799).

On April 14, 2015, the trial court entered an Amended Final Judgment granting the Motion for Summary Judgment filed by Welch and Ashworth and overruling Mid Pac’s Motion for Summary Judgment. The judgment also reflected that Mid Pac’s Amended Motion for Default Judgment against Wells Fargo and Citigroup was granted to only to

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the extent that Citigroup did not have any right, title or interest in the Deed in Lieu or the property at issue and that the judgment did not rule that Mid Pac had acquired the Deed in Lieu from Citigroup or Wells Fargo. The final Judgment also awarded Welch and Ashworth attorney fees in the amount of $5,208. (CR 842- 844). Mid Pac filed its Notice of Appeal on April 29, 2015. (CR 845)

ORAL ARGUMENT

Mid Pac Portfolio does not request oral argument because the facts, issues on appeal and applicable law are of a nature that can be sufficiently presented to the Court in the briefs of the parties.

ISSUES PRESENTED

1. Whether the trial court erred in granting Ashworth and Welch’s Motion for Summary Judgment while denying Mid Pac’s Motion for Summary Judgment.

2. Whether statements made by Paula Welch in her affidavits supporting Welch and Ashworth’s Motion for Summary Judgment that funds used to pay taxes on the property at issue were from a suspense account held by a loan servicer for her Texas Home Equity loan, and that these funds belonged to her, were proper summary judgment evidence.

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3. Whether statements by Paula Welch in her affidavits supporting Welch and Ashworth’s Motion for Summary Judgment relating to the history of her Texas Home Equity loan were proper summary judgment evidence.

4. Whether the trial court erred in the Amended Final Judgment by ruling that the Amended Motion for a Default Judgment filed by Mid Pac against both Wells Fargo and Citigroup was granted against only Citigroup instead of both Citigroup and Wells Fargo.

5. Whether the trial court erred in awarding Welch and Ashworth attorney fees and costs in its Amended Final Judgment.

STATEMENT OF FACTS

As noted in the Statement of the Case, this case involves a title dispute between Mid Pac and Welch and Ashworth over the property located in Santa Fe, Texas. Welch and Ashworth executed a Texas Home Equity Note dated March 26, 1999 in the amount of $270,000 payable to Long Beach Mortgage Company which was secured by 1625 Avenue L, Santa Fe, Texas (the property). (CR 163-186, 223- 235).

In 2000, Welch and Ashworth filed suit against Long Beach Mortgage over the home equity loan which led to a settlement between Welch and Ashworth and Long Beach Mortgage on March 14, 2003. (CR 164, 166-184, 213, 236-252). The settlement agreement provided that Welch and Ashworth had 90 calendar days from March 21, 2003

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to pay off the Texas Home Equity loan and that the 90 day period ended on June 19, 2003. (CR 167, 237). The settlement agreement also provided that Welch and Ashworth would execute a Deed in Lieu of Foreclosure to secure the requirement that they pay off the loan within the 90 day period. (CR 168, 238, RR Vol 1 of 1 page 22). Welch and Ashworth executed the Deed in Lieu on March 21, 2003. (CR 182-186, 253-257, RR Vol 1 of 1 page 22). The grantee on the Deed in Lieu was Wells Fargo. (CR 182, 253).

The settlement agreement provided that the Deed in Lieu would be held in escrow until the end of the 90 day period and that if Welch and Ashworth had not paid off the home equity loan, the Deed in Lieu would be released from escrow. (CR 169, 240, RR Vol 1 of 1 page 22).Welch and Ashworth failed to pay off the balance of the loan in accordance with the settlement agreement. (CR 165, 211-215, RR Vol 1 of 1 page 23).

On June 1, 2012, Mid Pac acquired the original Deed in Lieu from Citigroup as part of asset purchase of loans and properties classified as foreclosed properties. (CR 165, 141, 508-548, RR Vol 1 of 1 page 9, 20, 26). Mid Pac recorded the Deed in Lieu in the Galveston County real estate records on March 14, 2013. (CR 165, 182-185, RR Vol 1 of 1 page 20).

Welch and Ashworth have lived in the property since February of 1995. (CR 211).

Paula Welch paid the real estate taxes on the property for the years of 2002 to 2004 on July 27, 2005. The taxes for 2006 and 2007 were paid by Dovenmuehle Mortgage, Inc. The taxes for 2008 were paid by QBE First. American Home Mortgage Servicing paid

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the 2009 taxes. SN Servicing Corporation paid the 2010 taxes. Paula Welch paid the 2011 taxes on March 27, 2012. (CR 667-677). Paula Welch first became aware a competing claim to ownership of the property by Wells Fargo in 2013. (CR 668).

SUMMARY OF ARGUMENT

This case is based on the Deed in Lieu that Welch and Ashworth executed as part of the 2003 settlement agreement with Long Beach Mortgage to resolve the lawsuit they initiated against Long Beach over their Texas Home Equity loan. Mid Pac acquired the Deed in Lieu in June of 2012 from Citigroup as part of an asset purchase and recorded it in 2013. Mid Pac filed this suit as a Declaratory Judgment action against Welch and Ashworth, Wells Fargo and Citigroup to clear the title to the property in its name. Mid Pac initially included a Trespass to Title claim in its suit but abandoned it so it was not at issue in the trial court.

Both Mid Pac and Welch and Ashworth filed cross motions for summary judgment. The trial court granted Welch and Ashworth’s Motion and denied Mid Pac’s. Mid Pac contends that the trial should have granted its Motion for Summary Judgment and denied Welch and Ashworth’s.

Mid Pac’s position on the merits of the case is not complicated. It contends that Welch and Ashworth transferred their title to the property when they executed the Deed in Lieu and failed to comply with the 2003 settlement agreement by paying off their

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home equity loan. The undisputed summary judgment evidence, including the stipulation and disclaimer by Citigroup, conclusively proves that Mid Pac acquired the Deed in Lieu from Citigroup.

Mid Pac named Wells Fargo as a Defendant so that Wells Fargo could assert any claims it may have had to the Deed in Lieu or the property. Since Wells Fargo defaulted, any claims it had have been disposed of. Consequently, Mid Pac, as the holder of the Deed in Lieu, it is the sole owner of the property.

Mid Pac also objects to certain statements Ms. Welch made in her affidavits in support of her Motion for Summary Judgment relating to her payment of the taxes on the property and the history of her dispute on the home equity loan. These statements are either conclusory or irrelevant and are not proper summary judgment proof to support the trial court’s judgment.

In addition, Mid Pac contends that the trial court’s Amended Final Judgment is incorrect because it is inconsistent with the Order the trial court entered granting Mid Pac’s Motion for Default against Citigroup and Wells Fargo. The Order granting the Motion for Default stated that neither Citigroup nor Wells Fargo had any interest in the property while the Amended Final Judgment stated that only Citigroup did not have any interest in the property. The Final Judgment should have been consistent with the trial court’s default order in that it should have stated that neither Citigroup nor Wells Fargo had any interest in the property.

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Finally, Mid Pac contends that the trial incorrectly awarded attorney fees and costs to Welch and Ashworth. Mid Pac is requesting that this Court reverse the trial court’s judgment and render judgment in its favor and remand the issue of attorney fees back to the trial court for reconsideration.

ARGUMENT

SUMMARY JUDGMENT REVIEW

This case is before the Court upon cross motions for summary judgment. A summary judgment is reviewed de novo on appeal. Tex. Civ. Prac. & Rem. Code § 37.009 In reviewing a trial court's ruling on cross-motions for summary judgment, an appellate court will consider all summary judgment evidence, determine all issues presented, and then render the judgment the trial court should have rendered. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868 (Tex. 2000). This Court may consider evidence presented by both parties in determining whether to grant either motion. Expro Americas, LLC v. Sanguine Gas Exploration, LLC, 351 S.W.3d 915 (Tex. App.— Houston [14th Dist.] 2011, pet. denied).

SUMMARY JUDGMENT EVIDENCE The undisputed facts in this case are simple and straight forward. It is undisputed that:

1. Paula Welch and Clyde Ashworth executed a Texas Home Equity Note in the

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amount of $270,000.00 payable to Long Beach Mortgage Company which was secured by the property located at 1625 Avenue L, Santa Fe, Texas. (CR 163-182, 211, 210-234)

2. Ms. Welch, Mr. Ashworth and Long Beach Mortgage Company executed the 2003 Settlement Agreement to settle a lawsuit between Ms. Welch, Mr. Ashworth and Long Beach Mortgage Company over the home equity loan. (CR 163-182, 213, 236-252)

3. As part of the settlement agreement, Ms. Welch and Mr. Ashworth executed the Deed in Lieu to the property to Wells Fargo as the grantee. (CR 164-165, 182-186, 253-257)

4. The settlement agreement provided that Ms. Welch and Mr. Ashworth had until June 19, 2003, to pay off the home equity loan or vacate the property and, if they failed to do so, the Deed in Lieu would be released from escrow. (CR 164, 169, 170, 213, 239,240)

5. Paula Welch and Clyde Ashworth did not pay off the Note in accordance the 2003 Settlement Agreement. (CR 213)

6. On June 1, 2012, Mid Pac acquired the Deed in Lieu from Citigroup as part of an asset purchase transaction. (CR 115-116, 165).

7. Mid Pac Portfolio recorded the Deed in Lieu on March 14, 2013 in the Galveston County Real Estate Records. (CR 165)

8. Wells Fargo failed to file an appearance in the suit to contest the allegations

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or assert a claim to the Deed in Lieu or the property itself. (CR 759, 799).

9. Citigroup admitted through its stipulation that it transferred its interest in the Deed in Lieu to Mid Pac and disclaimed any interest in the Deed in Lieu or the property at issue. (CR 115).

10. Ms. Welch paid taxes on the property for the years of 2003 and 2004 on July 27, 2005. (CR 671, 704-707).

MID PAC PORTFOLIO IS THE OWNER OF THE PROPERTY Under Texas law, title to real property is vested in the grantee of a deed when the deed is executed by the grantor and delivered to the grantee. An unrecorded deed is binding on the grantor in the deed and is effective to pass title to the grantee. When a deed is recorded, it creates a presumption, and establishes a prima facie case, of the delivery of the deed and the intent of a grantor to transfer title to a property. Watson v. Tipton, 274 S.W.3d 791 (Tex. App. Fort Worth 2008).

In the 2003 settlement agreement that Ms. Welch and Mr. Ashworth executed, Ms.

Welch and Mr. Ashworth agreed to pay off their home equity loan by June 19, 2003. They also executed the Deed in Lieu at issue in this case in accordance with the 2003 settlement agreement. (CR 163, 194, 213, 236, 253). The 2003 agreement provided that the Deed in Lieu would be held in escrow until the loan was paid off. If Ms. Welch and Mr. Ashworth failed to pay off the loan by the deadline in the settlement agreement, the

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Deed in Lieu would be released from the escrow. (CR 237- 240).

Ms. Welch and Mr. Ashworth no longer have title to the property because they transferred the property out of their names with the Deed in Lieu in 2003. There is no factual dispute that Mid Pac acquired the Deed in Lieu from Citigroup on June 1, 2012 and that Mid Pac recorded it on March 14, 2013. Likewise, it is undisputed that Mid Pac acquired any interest that Citigroup and Wells Fargo may have had in the property by virtue Mid Pac’s purchase of the Deed in Lieu from Citigroup and Wells Fargo’s default in the suit. Consequently, Mid Pac is the owner of the property. The trial court was incorrect in denying Mid Pac’s Motion for Summary Judgment and granting Welch and Ashworth’s.

WELCH AND ASHWORTH’S CLAIMS AND DEFENSES Although Welch and Ashworth raised several legal theories in their pleadings, it appeared in the trial court that they primarily based their counter claim and affirmative defenses on the three year adverse possession statute in Tex. Civ. Prac. & Rem. Code § 16.024, the five year adverse possession statute in Tex. Civ. Prac. & Rem. Code § 16.025 and the four year statute of limitation in Tex. Civ. Prac. & Rem. Code § 16.004(a)(1). (CR 113,742, RR (Vol 1 of 1 pages 26-27).

ADVERSE POSSESSION CLAIMS Ms. Welch and Mr. Ashworth contend that they acquired ownership of the property through adverse possession. The nature of adverse possession is that a person

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takes possession of property adversely to another party’s ownership rights and is eventually allowed to acquire title because of continuous adverse use over time without the possession being broken by the true owner. Session v. Woods, 206 S.W.3d 772 (Tex. App.—Texarkana 2006, pet. denied). Wells v. Johnson (Tex. App.-Amarillo, 2014). Because establishing title by adverse possession has the effect depriving a party of lawful title to property, adverse possession is not well regarded in the law so the statutory prerequisites must be strictly complied with. Thomas v. Southwestern Settlement & Development Co., 131 S.W.2d 31 (Tex. Civ. App.—Beaumont 1939) Wells v. Johnson (Tex. App.- Amarillo 2014)

To establish title by adverse possession, a party must prove:

(1) a visible appropriation and possession of land, sufficient to give notice to the title holder;

(2) that is peaceable, (3) under claim of right hostile to the title holder's claim, and (4) that continues for the duration specified in the applicable three, five, ten or twenty-five year limitation statute. See Rhodes v. Cahill, 802 S.W.2d 643 (Tex. 1990), Sarandos v. Blanton, 25 S.W.3d 811 (Tex. App.--Waco 2000, pet. denied).

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The summary judgment evidence that was before the trial court in this case was not sufficient to prove that Ms. Welch and Mr. Ashworth occupied the property for the amount of time required by each adverse possession statute. Ms. Welch states in her Supplemental Affidavit in support of her Motion for Summary Judgment that she and Mr. Ashworth have “lived continuously and openly in the property” but does not state how long they have occupied it. (CR 670).

Likewise, both the three and five year statutes require that Welch and Ashworth have some form of record title to support their adverse possession claim. The three year statute requires “title or color of title”. “Title” is defined as “a regular chain of transfers of real property from or under the sovereignty of the soil”. Tex. Civ. Prac. & Rem. Code § 16.021 (4). “Color of title” is defined in Tex. Civ. Prac. & Rem. Code § 16.021 (3) as a “consecutive chain of transfers to the person in possession that:

(A) is not regular because of a muniment that is not properly recorded or is only in writing or because of a similar defect that does not want of intrinsic fairness or honesty; or

(B) is based on a certificate of headright, land warrant, or land scrip.”

The five year statute requires that Welsh and Ashworth claim title to the property under a “duly registered deed”. Tex. Civ. Prac & Rem. Code § 16.025 There is no summary judgment evidence in the trial court record of any type of record title into

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Welch and Ashworth to satisfy the “title” or “color of title” requirement for the three year statute or a “duly registered deed” in their names for the five year statute.

Beside a “duly registered deed” into Welch and Ashworth, the five year statute also requires that they had paid the taxes on the property for five consecutive years. Tex. Civ. Prac. & Rem. Code § 16.025(a) (2), Mem'l Park Med. Ctr., Inc. v. River Bend Dev. Group, L.P., 264 S.W.3d 810 (Tex. App. Eastland 2008); Baughn v. Capps, 2010 Tex. App. LEXIS 1580 (Tex. App. Waco 2010); Pierce v. Gillespie, 761 S.W.2d 390 (Tex. App. Corpus Christi 1988); Schoellkopf Co. v. Starr, 88 S.W.2d 564 (Tex. Civ. App.- Galveston 1935), aff'd, 113 S.W.2d 1227 (Tex. 1938). In order to satisfy this requirement the taxes must be paid before they become delinquent. Thomas v. Rhodes, 701 S.W.2 d 943, (Tex. App- Fort Worth, 1986).

The summary judgment evidence relating to the payment of taxes is in the Supplemental Affidavit of Paula Welch (CR 667 -676). Welch and Ashworth also submitted certified records from the Galveston County Tax Assessor to substantiate the statements in her affidavit. (CR 703-719).

There was no undisputed summary judgment evidence in the trial court that Ms.

Welch and Mr. Ashworth paid the taxes for five consecutive years before they became delinquent beginning from either March 23, 2003 (the Date of the Deed in Lieu) or June 23, 2003 (which was the date the Deed in Lieu could have been released from escrow

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under the 2003 settlement agreement). (CR 665). Ms. Welch’s affidavit shows the following tax payments from 2003 to 2012:

Receipt Date Amount Tax Year Description Payer

2012-03-27 $5,152.99 2011 Payment WELCH PAULA A 2011-.06-17 ($95.12) 2010 Refunded SN SERVICING CORPORATION 2011-04-27 $95.12 2010 Transfer SN SERVICING CORPORATION 2011-04-27 ($95.12) 2010 Transfer SN SERVICING CORP.

2011-04-27 $5,373.61 2010 Payment SN SERVICING CORP.

2009-12-31 $2,820.81 2008 QBE FIRST 2009-12-29 $4,039.56 2009 Payment AMERICAN HOME MTG SERV 2009-01-05 ($2,820.81) 2008 Reversal QBE FIRST 2008-12-31 $2,820.81 2008 QBE FIRST 2007-12-19 $2,827.94 2007 Payment DOVENMUEHLE MORTGAGE, 2007-01-02 $2,883.83 2006 Payment DOVENMUEHLE MORTGAGE 2006-02-10 $2,977.30 2005 MORTGAGE SERVICES 2005-07-27 ($0.02) 2004 WELCH PAULA A 2005-07-27 $3,949.39 2004 WELCH PAULA A 2005-07-27 $101.84 2004 WELCH PAULA A 2005-07-27 $2,871.38 2003 WELCH PAULA A 2005-07-27 $1,210.12 2003 WELCH PAULA A 2005-07-27 $1,191.08 2002 WELCH PAULA A 2005-07-27 $2,730.10 2002 WELCH PAULA A

Ms. Welch states in her affidavit that even though these records show that the taxes were paid by the lenders or servicing companies on the loan rather than herself, Ms. Welch still claims credit for the payments because she assumes the payments were made from a “suspense account” held by the loan servicers which were actually her funds. Whether Ms. Welch’s “suspense account” statements are proper summary evidence is an

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issue in this appeal. Regardless of how that issue will be resolved, the summary judgment evidence still does not prove that the taxes were paid before they became delinquent for any consecutive five year period by anyone even if Welch and Ashworth are given credit for all of the tax payments Ms. Welch claims to have made.

FOUR YEAR STATUTE OF LIMITATION IN 16.004(a)(1)

Ashworth and Welch raised Tex. Civ. Prac. & Rem. Code § 16.004(a)(1) as an affirmative defense in the trial court. The statute provides that a suit for specific performance on a contract to convey property must be brought within four years. This statute is not applicable to this case. Mid Pac has not alleged that it was a party to a contract with Ms. Welch and Mr. Ashworth to convey the property and is not trying to enforce a contract to convey the property. Mid Pac is trying to clear title to the property in its name based on the Deed in Lieu.

OTHER ISSUES RAISED BY WELCH AND ASHWORTH Welch and Ashworth raised several other issues in their pleadings and Motion for Summary Judgment. Even though it is unclear from the trial court’s judgment whether these issues had any bearing on the trial court’s ruling on the cross Motions for Summary Judgment, Mid Pac would like to briefly address the following two issues and will address them more thoroughly if Welch and Ashworth develop them in their Response Brief in this appeal.

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MARY CARTER AGREEMENT

Welch and Ashworth questioned the asset purchase transaction between Mid Pac and Citigroup Global Markets Realty Corp as being a collusive “Mary Carter Agreement” scheme for Citigroup to enforce the Deed in Lieu instead of a legitimate business transaction through which Mid Pac acquired the Deed in Lieu. Ms. Welch and Mr. Ashworth produced absolutely no evidence, let alone undisputed summary judgment evidence, to support this accusation because there is none. The undisputed evidence is that Mid Pac acquired the Deed in Lieu from Citigroup in June of 2012 under an asset purchase transaction.

RES JUDICATA AND ISSUE PRECLUSION In their Amended Motion for Summary Judgment, Welch and Ashworth raised the issue of whether the ruling in Case No. 06CV0224, Citigroup Global Realty Markets Corp. v. Paula Welch and Clyde Ashworth, is a defense to the Mid Pac’s Motion for Summary Judgment on the grounds of res judicata and issue prelusion. (CR 742- 744)

Although Ms. Welch and Mr. Ashworth did not produce copies of any pleadings or orders from Case No. 06CV0224 to substantiate their contention, they referenced the docket sheet for the case and, in particular, the ruling by the trial judge on March 28, 2008. This entry reads: “APPL FOR FORECLOSURE IS DENIED /S/JE/DS”.

As it pertained to Citigroup , Case No. 06CV0224 was a proceeding under Tex. R.

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Civ. P. 735 and Tex. R. Civ. P. 736 which apply to foreclosures of home equity loans. Tex.R.Civ. P. 736.9 states:

“Effect of the Order. --An order is without prejudice and has no res judicata, collateral estoppel, estoppel by judgment, or other effect in any other judicial proceeding. After an order is obtained, a person may proceed with the foreclosure process under applicable law and the terms of the lien sought to be foreclosed.”

Consequently, the ruling in Case No. 06CV0224 regarding Citigroup’s attempt to foreclose Mr. Welch’s and Ms. Ashworth’s home equity loan did not have a preclusive effect on Mid Pac’s cause of action in this case.

OBJECTIONS TO SUMMARY JUDGMENT EVIDENCE Mid Pac raised several objections to the affidavits that Paula Welch submitted in support of her Motion for Summary Judgment which the trial court failed to rule on. (CR 565, 677). To the extent that these objections were to the form of Ms. Welch’s affidavits, Mid Pac concedes that these objections were waived. Thompson v. Curtis, 127 S.W.3d 446 (Tex.App.-Dallas 2004, no pet.). However, objections to defects in the substance of an affidavit may be may be raised for the first time on appeal. Lack of relevancy and conclusory statements are substantive defects which can be raised on appeal. McMahan v. Greenwood, 108 S.W.3d 467 (Tex.App.-Houston [14th Dist.] 2003, pet. denied).

RELEVANCY

Ms. Welch filed two separate affidavits in support of her Motion for Summary Judgment (CR 211, 667). In her first affidavit (CR 211) she makes the following

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statements:

“4. In approximately 1999, Clyde Ashworth and I applied for a home equity loan. In around March 26, 1999, we signed all closing documents. Under those closing documents we were supposed to get $28,045.06. See Exhibit 4, which is a true and correct copy of the closing statement which we signed, and as was later unilaterally modified by the lender.

After we had signed the closing statement, and after the right rescission (3 days) had passed on March 29, 1999, we went to pick up the check on March 30, 1999. At that time, I noticed that the check was about $8,000 short of what we were supposed to get under the original form of Exhibit 4, as we had signed it. I asked the closing agent (Stewart Title)

why the amount was short and was given no response except to contact the lender, Ameriquest. This meeting took place at Stewart (League City) at approximately 11:00 that day, March 30, 1999. That afternoon, I contacted Ameriquest by telephone, and they faxed me Exhibit 4 as it presently appears, with the handwritten entries as1presently shown on Exhibit 4, changing the settlement charges on line 103 from $15,839.13 to $11,803.13;

changing the "Payoff ' on line 104 from $226,495.81 to $239,034.83; changing the Gross Amount due from Borrower on 4, we were supposed to get cash of $28,045.06, as indicated on Line 303 (Cash to Borrower). Instead, Exhibit 2 was changed to read on line 303 $19,562.04, a difference of approximately $8,483.02.

5. Neither I nor my husband Clyde Ashworth ever authorized or approved in advance the change in figures on Exhibit 4 as described above. As a result, the objective of the loan (Paying off business partners of my husband Clyde's) was prevented, and we had to borrow additional funds (about $5,000) from another bank.

5A. The previous lender, who was repaid with the proceeds of the loan now in dispute, was IMC Mortgage. In year 2000, IMC Mortgage advised that it had been overpaid and that the amount received was $148,000 in excess, so it refunded the $148,000 to the lender, i.e., Long Beach or its assigns. I have never gotten an account of where the $148,000 went other than documents filed in the 122d District Court showing the credit. These facts were related later to the various judges described below.” (CR 211 -212).

The issue in this case is whether the Deed in Lieu that Welch and Ashworth

21

executed in connection with the 2003 settlement agreement is effective to pass title to the property at issue to Mid Pac. The litigation that led to the 2003 settlement agreement was initiated by Welch and Ashworth and was intended to resolve the dispute that they had over the loan.

All of the referenced excerpts from her affidavit relate to issues that Ms. Welch had with the loan prior to her lawsuit that resulted in the 2003 settlement agreement. The problems that Ms. Welch had with the loan prior to the 2003 settlement are not relevant to this law suit. Therefore, paragraphs 4, 5 and 5A of her affidavit that relate to the historical issues with the home equity loan are not proper summary judgment evidence and should not have be considered by the trial court in ruling on the Cross Motions for Summary Judgment.

CONCLUSORY STATEMENTS

Ms. Welch also filed a Supplementary Affidavit to support her adverse possession claim in which she states that some of the funds that were used to pay the taxes on the property came from a suspense account. (CR 667). These excerpts are:

Paragraph 6: “I should further note that, looking at the third column (Tax Year), taxes were paid by me for the tax years of 1991 through 2005 (15 years) and for the tax years 1999 through 2005 (6 years). Furthermore, since 2003 (the year in which the so-called Deed in Lieu was executed) taxes have been continuously paid through 2011 directly by me or with funds of mine taken from a suspense account, for a period of approximately 8 years.”

Paragraph 9: “Comparing Exhibit "C” to the list of ad valorem payments, Exhibit A, it is apparent that ASC or subsequent Mortgage Companies used the suspense account (i.e., my money) to pay taxes on the home in question from February 10, 2006 through June 17,2011.”

Paragraph 10: “The total amount of taxes paid out of the suspense account (i.e., my money in the possession of a servicing agent) are as follows:

22

Date of Pmt Amt. of Payment TX year Total 2006-02-10 $2,977.30 2005 2,977.30 2007-01-02 $2,883.83 2006 $5,861.13 2007-12-19 $2,827.94 2007 $8,689.07

2008- 12-31 $2,820.81 2008 $11,509.88 2009-01-05 (2,820.81) 2008 8,689.07 (reversal)

2011-04-27 $5,373.61 2010 $14,062.68”

(2009)

Affidavit: 12: “Thus, of the 26,089.57 held in suspense, $14,062.68 has been applied to taxes. I have never received an accounting of the remaining monies, i.e.,

A statement is conclusory if it does not provide facts to support it. Brown v.

Brown, 145 S.W.3d 745 (Tex.App. – Dallas 2004). All of these statements by Ms. Welch that any funds that were used to pay the taxes were paid from funds in a suspense account held by one of the servicers for the loan and that the suspense account funds were hers are conclusory. There are no facts in her affidavit explaining what a “suspense account” is, why it was created, where the funds came from that were supposedly in the suspense account or that funds used in the suspense account were used to pay the taxes. Ms. Welch assumes that because she received a letter dated 2004 from a loan servicer named ASC which referred to a suspense account, the funds in that account were used to pay the taxes. (CR 668). None Ms. Welch’s above referenced conclusory statements relating to the suspense account funds being hers or that they were used to pay the taxes on the property should be considered competent summary judgment evidence.

23

DEFAULT JUDGMENT AGAINST WELLS FARGO Mid Pac filed an Amended Motion for a Default judgment against Wells Fargo on the grounds that Wells Fargo had not appeared or filed an answer in the suit and against Citigroup by virtue of the disclaimer it filed. (CR 759) The trial court granted the motion and entered an order stating that neither Wells Fargo nor Citigroup had any interest in the property at issue. (CR 799).

However, in the Amended Final Judgment, the trial court stated that Mid Pac’s Amended Motion for Default was granted only against Citigroup and that only Citigroup (instead of both Citigroup and Wells Fargo) had “no right, title or interest” in the property or Deed in Lieu at issue in the suit. There is no explanation or reason in the trial court record why the trial court’s Final Amended Judgment should not have been consistent with its Order Granting Mid Pac’s Amended Motion for Default in cutting off Wells Fargo’s rights in the property and Deed in Lieu just as Citigroup’s were. Mid Pac requests that the case be remanded to the trial court enter a final judgment that is consistent with its Order granting Mid Pac’s Motion for Default against Wells Fargo and Citigroup.

ATTORNEY FEES AND COSTS

The trial court awarded the Welch and Ashworth $5,208 in legal fees and court costs under Tex. Civ. Prac. & Rem. Code § 37.009 in the Amended Final Judgment. When a declaratory judgment is reversed on appeal, the award of attorneys' fees may no

24

longer be “equitable and just” as required is under §37.009 and the issue of whether to award attorneys' fees and costs, and to whom, can be remanded to the trial court for further proceedings. Harbor Ventures, Inc. v. Dalton, 2012 Tex. App. LEXIS 4009, (Tex. App. Austin 2012). Since Mid Pac contends that the trial court erred in granting Welch and Ashworth’s Motion for Summary Judgment and denying its Motion for Summary Judgment, if this Court reverses the trial court’s judgment, the trial court should be directed to reconsider the portion of its judgment awarding attorney fees and costs to Welch and Ashworth.

CONCLUSION AND PRAYER

Appellant Mid Pac Portfolio requests that the Court reverse the trial court’s judgment and render judgment for Mid Pac by denying the Appellee Welch and Ashworth’s Motion for Summary Judgment and granting Mid Pac’s Motion for Summary Judgement, award the costs of this appeal to Mid Pac and remand the case to the trial court to determine whether any of the parties should be awarded reasonable attorney fees and court costs at the trial court level pursuant to Tex. Civ. Prac. & Rem. Code § 37.009.

Respectfully submitted,

/s/ Michael Burns

State Bar No. 03447980

P.O. Box 992

Allen, Texas 75013

Phone: (214) 354-1667

ATTORNEY FOR APPELLANT

25

CERTIFICATE OF SERVICE

I hereby certify that a copy of the above and foregoing pleading was accomplished on the July 21, 2015 by the method and to the following as indicated:

Mark W. Stevens P.O. Box 8118 Galveston, Texas 77553 E-mail: markwandstev@sbcglobal.net

/s/ Michael Burns

CERTIFICATE OF COMPLIANCE

I hereby certify that this document was produced on a computer using Microsoft Word 2013 and contains 6628 words, as determined by the computer software’s wordcount function excluding the sections of the document listed in Texas Rule of Appellate Procedure 9.4(i)(1).

/s/ Michael Burns

26

APPENDIX

Record Pages

Amended Final Judgment in Case No. 13-CV- 0422…………………………………………………………………… CR 356-358

2003 Settlement Agreement …………………………………………. CR 236- 251 Deed in Lieu of Foreclosure …………………………………………. CR 182-186 Citigroup Stipulation…………………………………………………. CR 115-116

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•

COMPROMISE. Af"«) SETT{£MEl'fT ACREEMENT AND R£l:USe:

•

This COMPROMISE AND SEnLEMENT AGREEMENT AND RElEASE (betein,ftcc

,efm-ed to u lhe "A~nl'') is.made UId trote:ted into effective lIS of MIIrth 14, 2(W;n; by and betWl:Cn P1alntifTSl'CCMItIICI"-Dderdzrlls CI)'de Ashwonh aod hul. Welch (bqeinalttfrtfemd 10 u ~ASAWOR1lI AND WELCH')1nCS De~tf· Plailltitr LONG BEAOf MOR.TGAGE COMP...,.,.... bmcd,. W'I fINANCING USA (bcrc.inaftu rd"c:rnd to IS. ""LONG B£ACHi-

WHEREAS, ASHWORTH AND WEl..O{ brovgbtlWt ~ LONG·BEACH, in the 56th Judici.1 Oi:strict Coan of Galveil:aa Couo.ty, Tuu. bcari:lg CIusc: No. OO-CV.0409 CIltidd C1yd~ ~ IImI P<NIII ff'-klt ". l.-~ 8-0. J.io,tpp c:-p-y. dIW<r F~ USA lind wbcR:u tONG BEACH hrou&hI COlIl'llerclaims qaiost ASHWORlH AND WELQ( ill. said sui!.

equjIy loan. (orm...· loUl no. 8125517, current klan no. 01)4.1770264, m;al ASHWORTH AND WaCH ob~fted from LONG BEACH ("the: Home Equity Loan., ·in die c.igiul prirlciP'l &IOOIn

ofS270.400.00 --S ~ b)" \hit rcaI popcrty ~ at 1625 A"YCftJC 1.. SlIIIb Fe, GaM:Aon Cotmty. TeJl:u (1M kfroperty"),lbc 1.c1r.of ASHWORTH AND WELCH 'S _hl1,.ym.:n13 for

$lid! H()Cnt Equity t-n.. tbc 61iq.s of Appt~ roc- &pedited.Fom;;losurr: ~. Jnd ASHWORTH AND .WEI..Q{'S cas.tina ofFanuen: Inswaaee Ex.cblng#·s check 110. ]25SOOO101.

Ibtcd No"cmber 16, 2000. 1nd madt: plyabk 10 P...... lI Wdch, Clyde I\.$bwonh. _ Long 8ach

Monpge in lbe MDOUIII 0(1 10.936.63; and WHEREAS. LONe BEACH dt:ni~ u..t ASHWOR.1li AND wa.cJI b3VC sufl"cn!d any cl&l!l*SC5 and runha" bCliet-a I:h'II ASHWORTH AND WELCH'S c.bi~s an: whDlly witl!oUI meOl

c.- IOundltion; and

!i

EXHIBIT - D-

------ 236

237

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•

LONG BEACH (ASHWORTH' AND WElOf and ~G •

BEACH collectiYely are sometines

WHEREAS, tlx Pvl~ wi&b to avoid tht Qpu!St I)f litiplion and. bavc. .gee4 to

! WELCH iW1d LONG BEACi. ineludill$ all claims and callSC:l of al:tion of any kind IbM CIII"(~ "

~ Of" lhl1 may elI:ist in the future tNI ,e~e in Illy wly 10 !b" ~ions. the- CICCIIrRnCCS., IDd

tM Hom .. Equity Loan d.r:scribc:d k Ihc LaYmlit (wUcdi ..uy, the..,.~ ... dte Iozms of ~ .and u lim.iltd b~ !bose teaDJ. 111 R( roM ill this A.grt:cmeoI. with Ibe ro:;:opitioa tbu

Ilae n-ay be: d~ IIJ;d ace unlmwn 10 tb= Parties .at!be time of e:u,:uUon.ofdU ApIcIDcar or that IPY arise in Ihc Allure. with fu.n I:nI)wledp oftbcpossibililyor-.dditiClrlIl claims., ad with Ih= illtcol Lhallhis A~cnl $dtIes.net f~y disposes of all e\aimsarisin& out oftb:: Home Equity loIrI. the TrillLSle!iOllS, iII'Id the Lawwit. ~ ~ fit IIf\knooIIIn. CHI Ib:; b::tm$ of uttkmml.

and u Iirpito:l by I!»U: terms., as: Cd fOM W! this A~ NOW. THEREFORE. in considcntion ortlle forqoinsw tile foJlowins rnul\llJ pnHfti$a$

liIad agreemtnl$, lnd othe.r£OOd UId valIJable consideration. the llCdp! and sufflCitll(;)' ofwhieb arc I !. htrcby atkno ..... led&cd, the. Pmies agrr:e CD sc:nle., rolloW5:

t. LONG BEAClf ~ to liYe ASHWORTH AND weLCH 90 calendM ~

from MiAIdl 21. 2003. whic:b 90 day perigd c.nds II 5:00 p.m. on Th~." June 19,200).

an;malcd with LONG BEACH rtndi« (b)..-., olTthc Horne Eq.ity [.0... u issue in !WI Ihrou.&h their I),,", 1"C$01.II"tC$.. . COIIPSd for ASHWOR1lf AND WELCH .!:ftc' to pro-ride by fKSimiJe

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• • IrltUll'liuion. no IZler lhan twcnlY (20) busillHS days prior 10 the ~ or an)' refinancing oflhc

Home Eq-..ily Loan. r.hc: nvnu or any and III cnlilieS rrom .... hkh ASHWORTH ANI> WELCH

eorrc:sponoenl lender WI mi;hl be inl'Olvcd if! VI)' sueh tefin~nc;ng. ICI eovnsc:1 ror LONG BEACH. COIlnse1 for tONG BEAOf wil] lben nOliCy coonse.! ror ASHWORTH AND WELCH by f.uimilc traosmiuWn. no !alel tban ~ () busiDf:u da)'S alia- rucivin, lhe faaimite .

u-amrnis:oicm Iforn ASHWORTH AND W"£.LOrS covnsd. infixmation U 10 ~· any nx:h milies arc: II{JiJiased 'fII'ilh LONG BEAOf ·Of iavo]YCd in .1. coaapon6elJ1 lcadin, rdatiollShip . with LONG BEACH or its affilillhs with fUpUllo Illy sl6Ch rdinancinC 10 LONG BEACH'S knowledge or information.

2. ASHWORTH AND WELCH asne thaI CC?lJ\'c:mporMl£OU~y upon their txCiCulion or thil AgrHmalt, they win c::r;c.tWe Jnd provide I Dc:cd in Lieu of Foru~ in the form Iltac:hr;d u E.dubit A hereto lad incorpantcd huc:in by rd",encc. 10 tbc botdef of !he Tau Home Equity Sc:a:rity (Il5trumenl (the MDI=d orTruslj to be hdd in escro ..... by LONG B£..-\01.

ASHWORTH AND WELCH IS"'C' thlllhW" coucsc:l ....iII said 10 LONG BEACH'S eounuJ via OVemichl delivery the origilllUy A~ Deed ill Lieu.·ofForeeIO$Uft': af\er er:~tioo! or urae by ASHWORTH AND WELCH, ror de~e:y!he. first b~.ay after uccution of DIlle.

1. ASHWOR·m AND WELCH and LONG BEACH lDfemand and ~ Ih.- tbe lenn "100% OF TIlE FULL AMOUNT OWED ON THJ:: HOME EQUITY LOAN.M wbidl lo:rrD will be set forth hen:inaftet" thrtIlIg.out ws Ap-oemetIt. InI:IIl't$ 1000.4 oflhe full amcnllll owed on the Home Eqully ~. as shown on Ihr: I~ pIIygfT talea'\1:Qt U:sued by LONG BEACH or irs .!liIi.IEI a:i Clr thc. date- paymenl i. received by LONG BEACH, which iiKludu lbe prioc.ipaJ balaoce, U(;med in(erest, late charles. Reovtrahlo b"'~ aoy uatlW Idv~ p.)'Orr

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•

p:rymenl is rec:eiYed by LONG BEACf-l •

4. ASHWORnt AND ~.~ 10 refinance by lhc end oflbe 9O-DaY-Pe:riod

set forth in pan.~ I tbo-ve 100% OF THE RJLL AMOUNT OWED ON THE HOME EQUITY LOAN. ASHWORTH AND WEte;H aebIaw~g~ that tbey previously ..... ere:

pwv;dcd willi infonnllion &S 10 'oYtIat ~pri~ Ck.b of Ih= ~ of 100% OF THE

FULL AMOUNT OWED ON THE HOME EQUITY LOAN: ASHWORTH AND WELCH . .

uodc:rstand and ,get: ItAl ~e will be no c:o~tq: Dn lbe &11 amoaBt doc and owed on lbe

HOIn$ Equity Loan.u ortbe: dale: pa)m!Zll isn:cc:ivtd by LONG BEAOL ,. In IlH: cvmt ....SHWORTIi AND WELCH oblllin tdiDancln, DC Ie$J tbllll 100%

OF nm FULL AMOUNT OWED ON 1HE HOME EQUITY LOAN". ASHWORTH AND WELaf .cree 10 pay in ~r~ nDWI5 on !he d.I~ of ~g the: rViuaneinl oC the Home

Eqoiry Loan. the diffcteot;c ~ 100"-' Of TIlE fULL. AMOUNT. OwED ON 1lIE H0M;E EQUITY LOAN IIXllhe ItQO\IIlII of lhe Hoene Eqairy Lolllll tAai ASHWORm AND WELCH

6. In the: a.i'«1l..ivc, if ASHWORTH ANt) WELCH do DOl obtaip re:Maaei,!' orille Home Equ;,;y l.Mft. ASHWORTIl AND WELCH IJrU: ~ pay by th:: end oflhe 9O-D.y·Pcriod

tow. OF THE fULL AMOUNT OWED ON THE ROME EQUITY LOAN.

ill oertified filPds

ASHWORnt AND WELOI widemaocl and Igrec:!hal rbere .... mbe: 00 COII))fWQis:cs on Ibe c,n

I.mOUftI due md owed on !he Home Equity f..Nn &S of !be dale p&)UICfII is: received by LONG ..... CH.

I 1. If ~I Iblr en1 of dJc 9O-Day-l"eriod LONG BEACH is r)OI: pailS 100"10. OF THE.

I FVLL AMOI..INT OWED ON THE HOME EQUITY WAN thtoulb ASHWORTH AND

i WELCH'S &11 or partial ~"ro...c;:nc .(jf lhe H,,,ne Eqwty Lou lnCVoc .ASHWORTH AND

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• • WELCH luivc nol paid 100% OF THE FUU AMOUNT C?WED ON' THE HOME EQUITY

LOAN. ASHWORTH AND WELCH "vee ttw the: Deed in LiCII ofFOf«;1osun: ..,ill be; relcucd !Tom escrow, lnd !he holder of the Deed orTrvst"";lI tUe lille 10 IIJ1d poS$e:nion or,lle Property wilbow. ajudicial foredocun: ~1Ig. 0', in the "ttenQlive and ~ iu opIion. the hvldcr orthe.

Deed of Trust rcWllS the rip to judicially foredo" on the Property and puBIWIIIO thu richt.

un judi<:RJly roru:lO$e ' on !he Propmy. ASHWORlH· .\ND ' WELCH agre" 10 vacate the

Pitlpnty Iry the md orthe ~,..pt:riod., which u by 5:00 pm. 011 Thwsdar. Jlme 19,2003. if 1000-' OF TIre FUll AMOUNT OWED ON TIfE HOME EQUITY WAN has no!: been paid

ill filII by Ibat date (ather by a rc.linlnte andfOf" wilh ASHWORTH AND waal's I;/III'!I

r~). ASHWORT1f AND WEUl{ fVrthtr agee: M llO c:Bmmif wute: on me Proper!)' or cop~ in my.as lhu would intpair Illk to !be Propertyor!he vallie of Ute Pn:Ipcrty.

3. LONG BeACR -sr- 10 p,ay ASHWORTH AND WELCH the: slim or TWENTY rnOVSAND.AND 0(1(100 OOUARS (SlO,CIOO.OO)tc:n (IO) b = - days .. tter!be date ASHWORTH AND WELCH pay lOW. OF THE" FUlL AMOUNT OWED ON l1iE HOME EQUTn' LOAN. HOWEVER. iCa11bc end.orlb.: 9Q-Day·Pcriod 100% OF THE FULL AMOUNT OWED' ON THE HOME EQUITY LOAN lIM nol been paid in full 10 LONG BEACH. L~NG BEACE:J "",11 PlY ASHwORrn AND WELCH the n1m of fIFTEEN rnOUSAND AND (1)'100 DOlLA.RS (515,000.00) teD (10) b....inUJ days Lftc:r the Qld ordl~ 9O-Dty-Pcriod, as long as .ASHWORtH AND W£LClf hay", ~Iod Ita: Propcny. as ASHWORTH AND. W£LOf Ul"C aped in panCf¢ 7 or Ihis I\&TcemQlL ~. ASHwo~rn AND WELCH agree thai. LONG BEACH'S eounsd hu provided ASHWORTH AND weta-c's ~I with a ~ ""'irI, that W .NG BEACH ad W~on M"lUal bY<: ~uet:led .11 credit buraus- 10 wnicll LONG BEAOi ~ Wuhintton lIIuI\W Blink. F.A.. n:pon 10 n:movc any ... rneacc III 1"ora:1o"..e from A.SHWORTH AND

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WELCH'S er~t reports.

• • ASHWORTH AND WELCH agree lhac the lett« from tONG

SeACH'S counsel regardin! the dch::tio~ of~lOfeclosw-t~ ~g will nor boI: UKd It lily Icpt proce:cdinl by ASHWORTH AND WELCH qaWst toNG BEAct:t or any entity Irrilated .... ith LONG BEAQI, ASHwoam AND WElCH agree tN.1 the leUQ' trom LONG BEACH'S

SlO·o.y-Period; if th .. bol.dou oftht: Deed o(Tnua c lects to judiciall), ronclos.c.;It the end of Ihc 9O·D.,..Pcriod as sec forth in ~ppft 1.bovt. '(orec:loswrc' ~~ for that ronclos\lR:~)'

be made. ASHWOR!H AND WELCH I~ that lICithc:r LONG BEACH nor its afliliates are Ol'"

will bcresponsible foe ~ credit bunzt's dccisioa toTemcnoe, or DOt ~cmovo. sUd rcrrf~ 10. ASHWORTH AND ~ 'cree 10 di.lmis.s aD Ibci~ cWlns. ill 1!xU m~ with ~ in Ibc Lawsuit b)' 5:00 pm. CcNral StandCd T_ OQ MMCh 21, 2003, LONG ~EACH apes to dismis5 ilf dUDs' for bud, fnlJduJmt i~l. conversion, AnCtiom. and

the Atin (jump $tnuu Raurz It. Feld UP~' r_ iDo..lm:IIiI iDlhc Lall"aUI wilh prqudice l,pill$! ASHWORTH AND WELOf wlth tapcd io!be ~c Equity Loan by 5:00 pm. CtJml

$landud Time on Mardi 2 1, 2003, irthis AIJCcmCnl aad \he Deed in Lieu orFom:loJV~ have be::n e;(=~ by ASHWORTH ,AND WELCH and roecived. by LONC BEAQI'S eINI\Jc! b)'

that lime and dill!. LONG BEACH wiU diRl'liu its claims for!JrtaCh ofconlTlCt with pntiudic:..i ~P.ilUI ASHWORTH AND weLCH wilb rapcct to the HoDic eqlliry Loan 01\ !he dale !hat (l)

LON(; BEA~ U paid 100% OF nm fVLL AMOVNT OWED ON THE H~E EQUITY

WAH; (2) !be bolckl- of tbec Deed o(Tru$l COOIpIcte; its judicial (om:Iosun: 011 Ihe ~y It . .

iu optioa; or (3) !he !ked in lial of For=loIur-e is rduscd &ocn escrow IlId tile holder" or the

beed o( Tr"I#! t.Ices tilk 10 .nd: pt""' 'M o(!h. Property without I jud'oci'l proo;edute II. iu

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\1.

•

Provided ASHWORTH AND WELCK and LONG BEACH exeCtlle • lhi~

"~ent by s :oo p..rn. on March 21. 2OOJ. and IIPO'- fuJI e.o:c:cution or Ihis Asro:nnent.

"SHWORTH AND WELCH Mly rclea$D. \Qivc. discblfJe.. (O~ acquit, nd etl'VCrW\t not to AIe.n)' and , II past. prc:scu!. wi ~cnlilit:s.,.d penoM rdllled 10 or .aiUalcd.n1h LONG BEACH inclvcl.ins. but not lu,ulcd 10, LONG BEACH -=I iIIll past. ptUent. Load fuhI~ paralt

eorpon.tions., subsidi~ ~ions. ~ pfedc:ttuors. affiliated torporUions. offiecu.

dira:;son. employe". sb:udIol6en, aps.. auGnlC)'s. re~ti ...c:s. insureu, amps., pvtnen., and ~ Uld .. 1 pcnons, M111nl or ~ ill privity with Ihefn. &om any W In

pu&.. pn:.scnl. 01' N~ eI.titns. ~ and d.amaets. bowr:t or uiIlcnowo. ~a:S or IInsuJpeded. wising out o( 01' rdIiai in lilY ..ay to !he HOIDe' Equity £.om at iuue. the

origination II.t'Id 5CfVitil1t of tbc: Rome. E'qIriIJ loaD. lhe Tau Horne Equit)' Note cblcd as of MalclI 26. 1999 {the: '"Narc}. th.= Deed Df"{lUSl" any CorecloSln procudlnp. tile TWl$lClioAS.

!he "Property, any «edit rc:portir« ~ Ibc Home Equity l..oaft. any of the c:Jaim s« forth or wbic:b collid h .... O' ben set (onh ill the Lawsuit, ·md ....y 0(1he r.cts IInc1 matten" opon whith the: claims and ~ Uwsu!t ""III'm based. Provided ASHWOltIH ANI> WEt.CH and LONG BEACH CXc:Ql\C tbis ~by 5:00p.m. oa M:lfCh21, 200J. UKl ~ iuD cxCClltoo orlhis Atfl:t:ment. WNG BEACH will !'IInytdQJ&, waifto d.iscIIargc. ~YQ" aeqllit. and COVU\lft not .

10 we ASHWORTH AND WELOf. It« a~ ~e)'S. reprcscnutivcs. uda.mplS. m4 all

cPil1l5, coarrovetSies, md ~ nWA or untnawn. ~ Qf \I1I.uspcctcd. .trisin, OIIt o( or reWed in any way to tho ell:hns Kl forth in the laww:it foe- bud. tta.dulmr ~nl,

!be lrwsmt with n:sped 10 Iba Home f:qaily LoltL. The hn:i.cs II;)- dlil A&ru:r.xnt bcJapy .C1>pm:sly .:knowrcd&e _ consmt WI die rdQsc:J.~. waive"$, 1ICqIitlab. azict 00"tCI.uts

---------- 242

243

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• • injuty, ~ dilm'Sc:s.· sWutoty ~ c::ttmJWy ~ pJnitivc ~ ~

dZllllgt:J &ou!# pursuBII to WI, fedenl. stale Of IoctII.ws,:1I1d lOt damagtS Qfwlutcva tiDd Of

chIIraeI~, ~ pas!. (II" AlNt: ~Icd bdJnI .. y tribuaal iocIlICIUia faknl. sw.; and bmblIpky t;:OUttJ aM NrJ ~ age:rq, wbii::h'" Parties auynow have, hllve had in the pl5t.or hcR"do::r ~ lia'f'CarisiDIourorlhenuncn~bylhisA~t. HOWEV£R, fie p~ expressly I!:I"CC tfw ncchirtJ hmin RaIl tebse. ~HWORTH AND WELCH fi"orn tile · Home Equit)" louI.. ASHWORTH AND WELCH'S ·ob1iptionc under- !he. NQ(e and Deed of Tra ~~ to !he lfoIne Eqaily l.om,. and. LONG BEACH"S clllm$ b" bt:=acb o[coattxl.

Ipin1t ASHWORnI AND WELCH. until the dIle ~ (I) LDNG BEAOf i5 paid 100% OF

THE FULL AMOUNT OWED ONTRE HOME EQUITY LOAN; (2) lht bctlib of!he.Dced of T~ completu its judietlJ fbRclOlll.re on tbc P'rope:t)' II its option; or (1) the Deed in ·Ueu of

tNt natblng t.cmn shall ~Ieuc,. II its option, the ript of the bolder- of !be l)c,ed orTna" 10 judici2lly ro«:cbsc= 1m Ihf; P!openy,.1 tllc end of the 9O-DIY-Period as set tbnh in l)lng1ph 7 lbove.

12. ASHWORTIf AND WELCH affum tbc validity of (be Home Equit)' Loari, tile

A"........

. 14. ASHWORTH ANn·WELCH .~ tfiaI ibe:y ":"ill "be:- .y IIOd -'I cost. of

reIi~ns: the Rorne Equity Loan..

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. Case 034 6247 O. :nent 20 Filed in nes s on 03122/. 4 Page 45 of 66

• • PWlUBt to ltv: dlllil::S sd fonh in ~$.ApumcrII or ~1Jt &/Iybreach ofillis Apement.

16. It is Iiutbet vndtntood and •.,-=d tbas pursuant ID p~ 10 above, ASHWORnl.AND WELOi will appcQV8andjoinill~iA&1o ikCoult in wbidallK Lawsuit

is pQ"dill3 an Apeo::d Monon and Ord=r DC OUmisnl with l'reju4itt.. ~"wi'Ih prejadicc an claims in theit" tntin:ty !m:U,lcI"A- by ASKWOR'l."" .AND WELQ{ apiDst LONG BEACH it! thE

t-S!oIit and aU cbiln5 btOIIs,tt by LONG BEAOf apinG ASHWORTH .vm WELCH for-6ud.. .

• ~. feu inaJm:d in the Lawsuit witb I"Up:CI to the- HOJDC l!q\ity 1oJn. .wi wittl costs of UIWl 1Ad.~' fees {;Q;CIIf Ipinst Ibr:patties: ineurrinlwne.

11. ASBWOltTIf .-fo.ND WELCti (b. Mrdty Iiznbet ~· and MmDt IhIr" U"ct:p:

a set forth in ~ II below, 00 other person Of altity has or hal; b.d ~ ioI:oests in the claim.. ~ oblipdvn$. or ~ of Klion rdwod ben:!. Ind 1M ASHWORTH AND

wa.ot have- the $Ole rigN mel cz.c\Li$i"n auIborily \0 ecealle W. "'~I ;aocl r=oM: flrit"

claims., if UI)'. ~ LONG BEACH; a.od dIM ASKWORrn .AND WELCH h&~ not sold.

_gna1. transfemd. co~ or 0Ihawisc ~ or _y DC ~ clainD, danaJ)ds, obliptions. Of""

C3I1SCS of Krion Ideucd bemn.

18. ASHW~l"H AND WEI.£H c::lpI"CSSI)' repn:smt mel ...-.nnl thas 1bcir ~

G . " . lid)', m. lerome 0.. F"Jdd,. -t HaId'l ok Iabos. lii0i)' haw: or I!"Y bave bd ~ ill he d.alnu, demands. obli~ _ eauJCS oC ~ n:b&od .ben:in; ibM ASHWORTH AND WEt..CH ,.~ \ht :I01e ris:bl aod a;~usiYe mhoriI'I 10 c:II~ lIliE ~I u:d ~ Iho:

claims. demands., obliptionr.. ~d. ~ olldioa rek:ltScd herein: an! IbII ASHWORTH AND ·WELCH have. DOt otbc:rwise sokf, assipod.lI"IIISIi:m:d. can.... yod or dispo.cd gCanyoCIbt claims.

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. .,. .

• • bold Iwndcu LONG BEACH and mil and .11 of its Umnncc f.AIria1, ~ _Jell!', XfVXIIs.

employees, usi~, pJltnta, ~ips. ~ives. otrlCClS, dir=on, shartfto/den, SlIc:a:sson. ~ sub$kiiary COIpOl1KiotIs, atfiliak: oorpontioas. abd partnl ~

\OgeIhef with Mrf such persons' or mtitia' ~ ~ o~ diredOtS, tn'fIlCI)CCS.

iltt«DC)1I. -JC'llS, R:pteSCn1IIdwes., auiJIl" and shxehoIdm, &'O!n ..y liabilityw claim o(ti.bWry ro.- ASHWORnl AND WEl.CH'S ~' rea wisUIa Id or tac: InIItar$ rdC8:llld hen:itI.

whether the AIDe be DOW blown ofn:aJizcd. and &I:uI:II1y liabililyorcl.lim oflilbilify fw breach of

their ~ md warnmies cec I'ortb.in Ihi5 Ap'tcmmt 19. ASHWORTH AND W'ELCH and. LONG B.EAOI do henby Iluth« repn::smla ~ tbai they ~ have ~ witb Ibcirown ~ repnlina Ihcri~ ofilipion"

~ve ~ into lila Agru:mmto!their awn he wiD UId ItUIfd and in ....-nd...xe"';!h Ihc:ir".,..

jlldpncnt alI:ft' rew:lint the tnrirdy of tlUs ADftmcnl. and after fiaH coosultation wiCb Ihdr tttome)'S. and tbey do hereby .ffirm undc:r oath ~ tbc:Y have not been indlIad to erucr ioto Ujs I+.grtcolCIII. byany~ancm. XC or~ oranykind OId1uaetct, tte:epl &$ txprtS:S!yset forth herein. OIl. It1c ~ oftbe P'1ltitf or 011 !he pm of I.he hrtIC$' IUome)'f. qaIIS. =-1:1"

~ ~ or~1iva. By !he ~ oflbis ~ ASHWORrn Nfl)

WELCH _ LONG BEACK ..:tnowkdae ~ to !he' o:;J;kIIt HIt forth ha-cin, ;f is Ibcir iM::nIioa ti:t

nzsopeded, Of realized and thai: ItJeybncoot bo= com;:cd in v.y warto ~ct into dliJApcmcu.

.20. ASHWORtH AlID WELC1f idcno",lccIp md _gee thai tlIis A~ iI a ~ &ettltrnenI ofd.ispalcd danu, and rrotbinI ~ shall ~ not sh.Il it be

- -'- ' -'- - - - 245

246

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•

WNG BEAOf, all fllbility, hull, ~d r~ lj l)'!:Iei,,! expre$Sly denied..

•

21 . If is ~y undcntoOd and ~ by the Parties ItZ the I.IInn$ or this AlfClCmenl Ire ~ and fI!'( merdy n::ciQ.ls lid thai the Idc:ascs u set forth bc:reln shall not open" 10

rc:kasc!he. Parties &on:! tbeir duDes 01" obtip1ioo.s ~ .10Mb iD dis Ap.:emCllt. fllMc:r, if~,. pifty to ali1: ~ is ~ 10 onro.a ItDr ~ wIIidt the Parties .~ is- enbtc:c:able. by kpl. 1Cti0lt or OI~ ~ pc1y c:n/"on:ial INS A~I 5haIl be c:nti:dcd to RCO"Wa" its

allomtyS' rees...eosts..-I Q"PCAU$ rrw. Iht brShing pxt)'. The Partier fit:rtbct ap !hat am, ~ maybe plcaiXd ... oompl*d.r.n.o to.. mil U$ed!lli thelnsis lOr loll iljwcticln qUm.

any ICIion, suit, orotha-proec:cdilll bacdoo.tIIims rek&sc:d. by this A~

22. ni. ~ contains lh.aJtirc ~l with mpcet 10 mc$Sl:~sct I'onIl hetein bdwoea tM PJric:s,.. This Ag:rI:snocnt embodies, indudes.. ma-ges ~ iatqnlcs II' ~

priOl" ~ curn:nt agm:mcII~ arxI "!IIIdenbodiAp berween ASHWOltTlt AND WELCH Md tONG BEACH. and this Aa;rttma:It may not be modltied, chq:cd, 01" arncnde:d acc:pt in ,,""liD, aod.

sipod by ASHWOR.1"HANI) WEl..Q{aod LONG BEAOl 23. 10 ..sdition II;) Il)e IdS rc:ci1IId in thii Agrmnent 10 be pet"rormed. by !he PIlIies. Ihc:

Puties .-= 10 pcdOI:ll\ or t;.mSIC ID be perlOrrocd. OIl or .JW the execution or 1hi5.~ my and. aJl _11 Mthcr". ..a.; as 111<1)' bI reiIIIDIl<Ibly ~ 10 ~ the ~ eoi1I~ hcftin.

or mon: 00tIt"Itttputs. c:xh of IIo'bkh sIWI be deemed an orizinaI and. an of wbieb. td:m IDp:Iher shllf constitUst one and the: $IIlIC" inmImetIl

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~ ~d

25_

ill ~

•

TOe- Panles :litl:ct INZ Wy...,u beN cbc:it 0"",," cosu.IlldIllbrt,~ , (m. ...nic:1l

..a Jb~ t..",,"il II'Id the ""'I'Itl't rdu~...s 1u:rci1).. ~, LONG " ,-

sr,....w <Iou; DQl ........ lILt: ~(Il!\l)1., ~ w rnsn: incutrtd II t OMCC"Iio4 ~Ih Ulr JUS!

fmcicsW't pcoecC'dirv (10 III. c.UDII'N'iI Ce.s WId tMlJ M"e pr:...iolld), i:H:II IlkDlilird.,.an 0( II or (be r_o:nb~ bllml:l: "" 'Itw ~)Otr Of&PIftli d~t4- D«ecQbct 2. 2002) Of" I'IIDItC b',d""'u;!~

26 TIMs ~ ,'hdlk bIt-,:bs ItId Uun 10 !he Itcatlil of !lit rtSp(C~e I\dn,

c..m.s.. ~ ~~ n:ptcsamliva....ucss.on. pet!..."Cn~ US1"...n~~ fJc'f., lIIorne)'S'.- Ia ...: ~tric:cn. 41CC1:11S, ~ ~' I I;a'Ill, pIIJtIIt «I!JO'¥QbIu,

~ tAd Illiiucd torpona-,. ~ IIOd IMuun of Itw ~i_ Pa.ni<:s- btrt;\Q,

LONa 8EACH ),(OItTGAG£ COktANY IOaIrcrfr cl.1IA FlHAHC1NC USA

8Y-_ __ ---,_ _ _--'-_ _ ~~----------~----

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---.---------_._---_ .. _- ----- 247

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Case 03-4~247 C .menl20 Filed in TXSB on 03122i '4 , Page 49 of 66

JIHn-'.

.. . 25. The PaUc:s ~ Ihar'lbc:ywld beaclbeilO\W'A c:o$U. iDcluding~' fra.. which

_" ~ U! caDlec:Qcn wid'l12Ie La~ mel the ~ n'kased ~ }P,I:IoCT.lONG BEACH does noc waiw die anotDIe)S"' fees tDd mszs ~ in COUAtaioI:I witb my past fan:clMure prot!"ldings (lo du: c:ueutAcii frc:s;md eom"baYe ptC"fiously ~ iG=Ii'filid u pan: or-

all or lhc: ~ bUracc on !ba pI)'Off.....,......... d.uaI ~ 2. 20(1) or fiob.= £:.r.:c:~~~

26. no Agreemr« an be 't:udia& &lid ~ to cb: bcAc5c ofl:bc rcspccIivc bein,.

t.o:dIies. cta:lIItId, ~ J"P'T"""'wrives, ~ predl'CT!!"n. uti... ~

fKt. ~....... ~ ~ dwDoHc:rs. tmp~ ~ ptrmI. azpcndc:cs.

subsiliZ)'..t alfi1ict:deorprorioM. atfilic:s. mel iasanz! atlbr respective PInks hcn:Io. .

----_._------ - ._----- .... _-_._._._. 248

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Case 03-46247

n-.<'1·2IlIiU U''!8

~

.,... - •

Imenl 20 FHed in TXSB on 03122: )4 Page 51 of 66 ",1~

,,

sr ....n. Of T'!'XAS I COUNTY ot.,l?uarrc~

B£FOflE kE.1fa,j -=apcot N.-y ""!:it,. 0- 411 dIy p:noAIIly .,pnrc6 ?AUl..A, waot. ~ ICI_ ~ bclile pcDI)Il wboul:lCll iJ Al1IIa:W1I:I she Jx~ ~ SJIe ~~ ~ me ~. CUCUII:d die ~ fasutAcIIl (III' Ihr.~ 4l1li ~ txpleu« Ift tlle~~

~hT;M>EJ. _~_fW«) AND S£AL Of omcr l1li, ~7 of

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---_. __._---------------.,.--_.- - _. --- .. -_._- 249

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Case 03-46247 .... .. ~- .- ..... C-

..--.--

Jinent 20

I

Filed in TXSB on 03122

•

14 Page 50 of 66

ST "Tf OF TEXAS

COUNTY Of. B/TZheJ·o

•I

•

BUORE ME. IbM Wl4QSSpcd ~y ~ GIl ~ ~) pa'SClDIoIIy -.ppurod clYDE' ; ..; .

ASHWoanf, booVIIOVQlll! &0 _ _ pe.-. wbose..- ~~ IOl>oe"fDr~~ •• He >C.Iaoowlcdtcd II:! . . _ ho:: ~ ' Ibc ~ iPslNllCPl !of the PlIIl*n InII ~_ expmscd iIIw 1Dn:ao<II&~ ; j.

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/?J!r-:mg lJM)EI. .~ ~ ~ or OIfiCE lIIi, Ihe~r of , .:.

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Filed in TXSB on 03/22_ )4

+

C;lse 03-46247 r Jment 20 Page 52 of 66

~' ·ll-fl If :l. I,.-,u., JJ'.au--oe r·m ' .IVl J HII

.,

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STA'IEOF CAUFORNl!\.

~ull1

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coumYOI'

.f:,(~::ia:- taaimi~~:k:'::'~~ .

10 lbe . . . . .ioa~. J:idW~ riO me _kIIbe CltaIIII4cdis dlUy_lvrized 10 _ l b t t.q;pi;Da ~ bldr:_ or.s c.a bdIIJ{ail..ONQ BHAai MOR.'I'GAClE =

"cOWPANY. r..:dy 4JbIa FINANCNG USA.,1br1lae JU1I05ICS'" ccaaide1ldoa eqn:sad ia. .

Ibrm~iaw __

.~ UNDER .~.~ AND sw. Of ()ffICl;".. . . ~..., or

Ny CommlniOQ £xpirts:

~kc 3Qn?c

--<>I>/ooay)

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CC»1rt.01«t5l: ~D ~ MOII'1'kI1'f1' AND t$UAJI - ..... 15

. _ - - - - - .._----_ _. ... 251

III1I1IIIIII1 • PGS 2IIJeI5S26

DEED IN LIEU OF FORECLOSURE

Date: March 21 , 2003

Grantor: PAULA A. WELCH AKA PAULA ANN WELCH AND HUSBAND, CLYDE ALLEN ASHWORTH

Grantor's Mailing Address:

1625 Avenue L

Santa Fe, Texas 775 10

Grantee: WELLS FARGO BANK MINNESOTA, NA. fonnerly known as NORWEST BANK MINNESOTA, NA, as Trustee for Salomon Brothers Mortgage Securities VII, Inc., Floating Rate Mortgage Pass Through Certificales, series 1999-LBI

Grantee's Mailing Address:

Sixth Street & Marquette Avenue Mirmeapolis, Minnesota 55479

Note: Texas Home Equity Note dated March 26, 1999 in the principal amount of Two Hundred Seventy Thousand Four Hundred Dollars ($270,400.00) bearing interest as stated therein, executed by PAULA A. WELCH AKA PAULA ANN WELCH AND HUSBAND, CLYDE ALLEN ASHWORTH, and payable to the order of LONG BEACH MORTGAGE COMPANY DBA FINANCING USA, a Delaware Corporation.

Security Instrument: Texas Home Equity Security Instrument, dated March 26, 1999, executed by PAULA A. WELCH AKA PAULA ANN WELCH AND HUSBAND, CLYDE ALLEN ASHWORTH to FRANK J. CURRY Trustee, securing the payment of the above referenced Note. Said Security Instrument filed for record in the office of the County Clerk of Galveston County, Texas on April I, 1999 under Clerk's File No. 9915359.

Said Security Instrument having been assigned to NOR WEST BANK MINNESOTA, NATIONAL ASSOCIATION, AS TRUSTEE, by instrument dated April 2, 1999.

Consideration: TEN AND NOl i 00 DOLLARS (SIO.OO) and further the release of Grantor from all liability for the indebtedness and obligations under the Note and Security Instrument, except that no release is given of any liens or warranties of title and further except that the indebtedness under the Note is not canceled or extinguished.

Property Legal Description: Lot One Hundred (100) ofTHAMAN' S FIRST SUBDIVISION in Ihe East !.4 of the Mary Austin League, located in Galveston County, Texas, according to the map Of plat thCfc:of re<;orded in Volume 23 1, Page 6, in the office of the County C lerk of Galveston County, Texas.

EXHIBIT IIIB"

Exceptions to Conveyance and Warranty: The liens described in this deed and the exceptions to conveyance and warranty in the Security Instrument.

Grantor, for the Consideration and subject to the Exceptions to Conveyance and Warranty, grants, sells, and conveys to Grantee the Property, together with all and singular the rights and appurtenances thereto in any way belonging, to have and to hold it to Grantee and Grantee's heirs, successors, and assigns forever. Grantor binds Grantor and Grantor's heirs and successors to warrant and forever defend all and singular the Property to Grantee and Grantee's heirs, successors, and assigns against every person whomsoever lawfully claiming or to claim the same or any part hereof, except as to the Exceptions to Conveyance and Warranty.

Conveyance in Lieu of Foreclosure. This deed and the conveyances being made are executed, delivered. and accepted in lieu of foreclosure and will be interpreted and construed the same as a foreclosure of the liens and as an absolute conveyance to Grantee of all right., title, and interest in and to the Property, including specifically but without limitation any equity or rights of redemption of Grantor in or to the Property.

Continuing Nature of Lien. Notwithstanding the release of Grantor from all liability for the indebtedness and obligations under the Note and Security Instnunent, the indebtedness has not been canceled or extinguished and the Property continues to be subject to the perfonnance of the obligations under the Security Instrument. The Security Instrument lien is not released or relinquished in any manner, and the indebtedness, obligations, and lien will remain valid and continuous and in full force and effect, unless and until the indebtedness, obligations, and liens are expressly released by written instrument executed and delivered by the holder thereof:, at the holder's sole discretion.

Nonmerger. Neither Grantor nor Grantee intend that there be, and there will never be, a merger of the Security Instrument lien with the fee simple title or any other interest of Grantee in the Property by virtue of this conveyance, and the parties expressly provide that any interest in the Security Instrument Hen and fee simple title wlll be and remain at all times separate and distinct.

tfl<VY H'l1) J ~ P.04

GRANTOR:

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PAULA A. WELCH AJ(A PAULA ANN ", WELCH

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GRANTEE:

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WELLS FARGO BANK MINNESOTA. NA . . ~'.

FORMERLY KNOWN AS NOIlWEST BANK .'

MINNESOTA, NA. AS TRUSTEE fO!). ·f SALOMON BROTHERS MORTGAGE · , SECURITIES VII. INC:. FLOATlNO RATE MORTOAGEPASSTHROUOH ... , CERTIFICATES. SERIES 1999·LBI . .' " .

BY~~

· ,~

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Title: First Vice Pres;id!::nt of "

Long BeacI1 _~_.

the attmney in fact

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STATE Of TEXAS ) ,,;

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COUNTY OF,~l:4' )

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The foregoing instrument was acknowledged before me.on ~ty of &cJ, · l/, .4 ~~.

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2003, by PAULA A. WELCH. · , (~,.

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[SEAL]

My Commi"ion .xpi,.. , Lt {I (ot

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Printed Natn£ of Notary , . '.

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STATE OF TEXAS )

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COUNTY OFJ3(II2M'i ) > <.

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1be foregoing instrument was acknowledged before me on ~ of/l1nl,. ,.

2003, by CLYDE ALLEN ASHWORTH •

[SEAL]

My Commi,.;"...pi..., 4-/10 I4

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Printed Name of Notary

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STATE OF California )

)ss;

COUNTY OF Los Angeles )

The foregoing instrument was acknowledged before me this 14th day of November, 2003, by George Cooksey, First Vice President oeLong Beach Mortgage Company. the attorney in fact of Wells Fargo Bank Minnesota, NA, on behalf ofWell ~ Fargo Bank Minnesota, NA, formerly known as NOIWest Bank Minnesota, NA, as Trustee for Salomon Brothers Mortgage Securities VII, Inc., Floating Rate Mortgage Pass Through Certificates, series 1999·LBI.

California

My Commission ex:pires:S;·~t ,-;00, 9<l W"t&.-ren--rJ Printed Name of Notary

FILED AND RECORDED

OFFICIAL PUBlIC RIlCOROS

~f~l5526

n.rch 14, ZOl3 1. : I.;~1 An FEE: Sl2 .01

Dwight O. 5&.I1I1v..". County Clerk Gai .....tOl'l Count.y, TEXAS

1/2/2014 11:22:41 AM

JOHN D. KINARD

District Clerk

Galveston County, Texas

NO.13·CV·0422

MID PAC PORTFOLIO, LLC § IN THE DISTRICT COURT §

VS. § §

PAULA WELCH, CYDE ALAN ASHWORTH, § AND WELLS FARBO BANK, MINNESOTA,NA § FORMERLY KNOWN AS NORTHWEST § 40Sth JUDICIAL DISTRICT BANK, MINNESOTA, NA, AS TRUSTEE FOR § SALOMON BROTHERS MORTAGE § SECURITIES VD,INC. FLOATING RATE § MORTGAGE PASS THROUGH § CERTIFICATES SERIES 1999·LBI § GALVESTON COUNTY, TEXAS

STIPULATION AND DISCLAIMER OF DEFENDANT cmGROUP GWBAL MARKETS REALTY CORP.

COMES NOW, Defendant Citigroup Global Markets Realty Corp states that:

1. It was served with the Amended Petition for a Declaratory Judgment filed in this case by Mid Pac Portfolio. LLC on July 24, 2013.

2, Citigroup Global Markets Realty Corp. and Mid Pac Portfolio, LLC executed a Master Asset Sale Agreement dated June I , 2012 under which Citigroup Global Markets Realty Corp sold and transferred its interest in the Paula Welch! Clyde Ashworth Deed in Lieu to Mid Pac Portfolio, LLC as an REO (Real Estate Owned") asset.

3. A copy of the Deed in Lieu is attached as Exhibit "E" to the Amended Petition filed by Mid Pac Portfolio.

4. As a result of the sale, Citigroup Global Markets Realty Corp no longer claims any interest in the Deed in Lieu or the property covered by it.

5. Consequently. Citigroup Global Markets Realty Corp disclaims any right, title or interest in the real property at issue in this case.

6. Citigroup Global Markets Realty Corp consents to the entry of a judgment against it in favor of Mid Pac Portfolio, LLC providing that Citigroup Global Markets Realty Corp sold and transferred its interest in the Deed in Lieu to Mid Pac Portfolio, LLC provided that the judgment

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as to Citigroup Global Markets Realty Corp is IN REM only.

7. Plaintiff Mid Pac Portfolio, LLC agrees not to pursue, and waives the award of, any monetary damages, attorney fees, court costs or discovery against Citigroup Global Markets Realty Corp. but not against any other Defendant in this case.

STATE OF NEW YORK § COUNTY OF New Y,(t §

This instrument was acknowledged before me on the :<5 day of Seph ... b" r , 2013, by JJ+I'-\e.s G.tld..JA. .... J who is the Vk.L P/'ls,~dt ... .;-- (capacity) of Citigroup Global Markets Realty Corp, on behalf of said company.

SEAL S;~ - My commission expires:

JlAl'le.l&, 2015

RODDC0RNER _ry Public - Slate of New YO<1< Mid-Pac Portfolio, LLC No. DICXl6169041

BY~

Qualified.in New York County My Commissi6n Expires June 18, 20U:S

Michael Burns

Texas Bar No. 03447980

8111 LBJ Freeway, Suite 1501 Dallas, Texas 75251

(214) 276-1545 - Telephone (214) 276-1546-Fax