Morse v. Codilis & Stawiarski, P.C. et al

MOTION for Summary Judgment and Brief in Support

E.D. Tex.May 1, 2017

MOTION FOR SUMMARY JUDGMENT PAGE 1 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS SHERMAN DIVISION GREGORY C. MORSE, § § Plaintiff, § § vs. § § CIVIL ACTION NO. 4:16-cv-00279 CODILIS & STARWIARSKI, P.C., ET AL., § § Defendants. § MOTION FOR SUMMARY JUDGMENT AND BRIEF IN SUPPORT Defendant Ditech Financial LLC, incorrectly also named as "Ditech Financial, LLC, NA" ("Defendant") hereby files this Motion for Summary Judgment and Brief in Support ("Motion for Summary Judgment"), respectfully showing the Court as follows: I. INTRODUCTION Despite an admitted default of his mortgage payment obligations, this is Plaintiff Gregory C. Morse's ("Plaintiff") fourth lawsuit over the past five years in furtherance of his unsubstantiated litigation crusade against each and every mortgagee, among others, of a mortgage loan that he obtained in March 2008. The first two lawsuits were unsuccessful and the third lawsuit was consolidated into the instant lawsuit, which fares no better than the others. The essence of Plaintiff's complaint is that the foreclosure of the real property located at 223 High Point Drive, Murphy, Texas 75094 (the "Property") was unlawful because assignments of a deed of trust, an appointment of substitute trustee, notice of trustee's sale, and substitute trustee's deed are purportedly fraudulent. Based on these allegations, Plaintiff asserts a variety of ill-conceived state and federal law claims that are either barred by res judicata, time-barred, and/or otherwise fail. Consequently, this Court should grant the Motion for Summary Judgment and dismiss Plaintiff's claim with prejudice. Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 1 of 30 PageID #: 2067 MOTION FOR SUMMARY JUDGMENT PAGE 2 II. STATEMENT OF ISSUES Whether, pursuant to Rule 56 of the Federal Rules of Civil Procedure, there is no genuine issue as to any material fact and Defendant is entitled to judgment as a matter of law dismissing Plaintiff's claims with prejudice. III. SUMMARY JUDGMENT EVIDENCE Exhibit A: Amendment to Registration (August 31, 2015); Exhibit B: Collin Central Appraisal District Valuation of the Property; and Exhibit C: Asset Purchase Agreement IV. STATEMENT OF UNDISPUTED MATERIAL FACTS A. THE LOAN On March 3, 2008, Plaintiff obtained a $414,500 loan from Homecomings Financial, LLC ("Homecomings") to refinance a prior loan on the Property, evidenced by his execution of a promissory note (the "Note") and deed of trust (the "Deed of Trust"), which secured payment of the Note by placing a lien on the Property. (Doc. 49 at 10–11 & Exs. 302-303, 397.) Mortgage Electronic Registration Systems, Inc. ("MERS") is a named beneficiary under the Deed of Trust and nominee for Homecomings and its successors and assigns. (Doc. 49, Ex. 303 at 2.) On October 8, 2012, MERS assigned the Deed of Trust to GMAC Mortgage, LLC ("GMAC"). (Doc. 49, Ex. 722.) Thereafter, on May 16, 2013, GMAC assigned the Deed of Trust to Green Tree Servicing LLC n/k/a Ditech Financial LLC.1 (Id., Ex. 7.) The assignments from Homecomings to GMAC and from GMAC to Defendant are collectively referred to herein as, the "Assignments." The Note is endorsed in blank.2 (Doc. 49, Ex. 302.) Defendant was the 1 Green Tree Servicing LLC changed its name to Ditech Financial LLC effective August 31, 2015. A true and correct copy of the Amendment to Registration is attached hereto and incorporated by reference as Exhibit A. (See also Doc. 55, Ex. D.) Defendant requests that the Court take judicial notice of under Rule 201 of the Federal Rules of Evidence. See Gomez v. Niemann & Heyer, L.L.P., No. 1:16-CV-119-RP, 2016 WL 3562148, at *15 (W.D. Tex. June 24, 2016) (taking judicial notice of records of the Texas Secretary of State’s office). 2 The true and correct copy of the Note is attached as Exhibit A to Ditech’s Motion to Dismiss Amended Complaint and Brief in Support. (Doc. 55, Ex. A.) Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 2 of 30 PageID #: 2068 MOTION FOR SUMMARY JUDGMENT PAGE 3 mortgagee and mortgage servicer of the Loan before the foreclosure of the Property. (See Doc. 49, Exs. 1-2, 1016 (reflecting Defendant was the mortgagee and mortgage servicer of the Loan).) B. PREVIOUS LAWSUITS3 This is Plaintiff's fourth lawsuit regarding the Loan and Property. The first lawsuit was filed on April 26, 2011 in the United States District Court for the Eastern District of Texas, Sherman Division, No. 4:11-cv-00230-DDB, against Homecomings and MERS, among others (the "First Lawsuit"). Plaintiff asserted state laws claims and claims under the Real Estate Settlement Procedures Act ("RESPA") and Truth-in-Lending Act ("TILA"). See First Lawsuit, Doc. Nos. 1, 30. The court dismissed the RESPA and TILA claims with prejudice and declining to exercise supplemental jurisdiction over the state law claims. Id. at Doc. No. 30. On May 18, 2012, Plaintiff filed a second lawsuit against Homecomings, GMAC, MERS, and Federal National Mortgage Association ("Fannie Mae"), among others, which was removed to the United States District Court for the Eastern District of Texas, Sherman Division, No. 4:12- cv-00375-ALM-KJP (the "Second Lawsuit"). Among other things, Plaintiff sought a declaratory judgment on various grounds regarding the status of the title and mortgage to the Property and asserted claims for quite title, statutory fraud, breach of contract, and violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO") and Deceptive Trade Practices-Consumer Protection Act ("DTPA"). See Second Lawsuit, Doc. Nos. 14, 50. On September 10, 2012, GMAC and Homecomings filed a Notice of Bankruptcy Filing in the Second Lawsuit.4 Id., Doc. No. 16. All claims against GMAC and Homecomings were stayed, except those for declaratory judgment based on the validity of the lien on the Property. 3 Defendant respectfully requests that this Court take judicial notice of the pleadings, orders, and judgments in the First Lawsuit, Second Lawsuit, and GMAC Bankruptcy. See Taylor v. Charter Med. Corp., 162 F.3d 827, 830 (5th Cir. 1998); Logistics Control Group Int'l, 762 F.2d at 459. 4 In May 2012, GMAC and Homecomings filed bankruptcy petitions (the "GMAC Bankruptcy") in the United States Bankruptcy Court for the Southern District of New York, No. 12-12020(MG) (the "Bankruptcy Court"). Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 3 of 30 PageID #: 2069 MOTION FOR SUMMARY JUDGMENT PAGE 4 Id., Doc. No. 50. The Magistrate Judge recommended dismissing with prejudice all claims against the non-debtor defendants, including MERS and Fannie Mae, and all non-stayed claims against GMAC and Homecomings. Id., Doc. No. 50 at p. 21. The District Court Judge dismissed the Second Lawsuit finding that Plaintiff "has not stated any claim here and is not entitled to any of the relief he seeks." Id., Doc. No. 73 at p. 2.5 C. ADMITTED DEFAULT AND FORECLOSURE Plaintiff is in default for failure to make payments due and owing under the Loan. (See Doc. 49, Exs. 2, 414.) Plaintiff admits that he stopped making payments on the Loan in 2011. See Second Lawsuit, Doc. No. 19 at p. 26; Doc. No. 50 at 10. On March 25, 2016, Defendant executed a Removal of Trustee and Appointment of Substitute Trustee (the "Appointment of Substitute Trustee"), and on April 11, 2016, Codilis & Stawiarski ("Codilis") sent a Notice of Acceleration and Notice of Posting & Foreclosure and Notice of Trustee's Sale (the "Notice of Sale") to Plaintiff. (See Doc. 49, Exs. 2 & 11.) On May 3, 2016, the Property was sold at a non- judicial foreclosure sale to Fannie Mae (the "Trustee's Deed"). (Id., Ex. 1016.) V. ARGUMENTS & AUTHORITIES A. SUMMARY JUDGMENT STANDARD Summary judgment is proper when "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c). The movant has the burden of showing that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 317, 323 (1986). Where the non-movant bears the burden of proof at trial, the movant need only point to the absence of evidence to support an 5 Plaintiff’s third lawsuit was removed to this Court, No. 4:16-cv-00346-ALM-CAN, and consolidated into the instant lawsuit. (See Doc. No. 39.) Plaintiff further filed four proofs of claim in the GMAC Bankruptcy based on the same claims asserted in the Second Lawsuit. See Bankruptcy Case, Doc. No. 7069. The claims were expunged and disallowed. Id. Plaintiff's appeal was denied. See id., Doc. No. 8218. Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 4 of 30 PageID #: 2070 MOTION FOR SUMMARY JUDGMENT PAGE 5 essential element of the non-movant's case; the movant does not have to support its motion with evidence negating the non-movant's case. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). If the movant succeeds, the nonmovant must come forward with evidence "such that a reasonable party could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The non-movant "must come forward with 'specific facts showing there is a genuine issue for trial.'" Matsushita Elec. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). "A factual dispute is deemed 'genuine' if a reasonable juror could return a verdict for the nonmovant, and a fact is considered 'material' if it might affect the outcome of the litigation under the governing substantive law." Cross v. Cummins Engine Co., 993 F.2d 112, 114 (5th Cir. 1993). The non-movant "cannot defeat summary judgment with conclusory, unsubstantiated assertions, or 'only a scintilla of evidence.'" Turner v. Baylor Richardson Med. Center, 476 F.3d 337, 343 (5th Cir. 2007). Conjecture, conclusory allegations, unsubstantiated assertions and speculation are also not adequate to satisfy the non-movant's burden. Little, 37 F.3d at 1079; Ramsey v. Henderson, 286 F.3d 264, 269 (5th Cir. 2002). A "district court may not make credibility determinations or weigh evidence when deciding a summary judgment motion." EEOC v. Chevron Phillips, 570 F.3d 606, 612 n. 3 (5th Cir. 2009). Nor does the court have to sift through the record in search of evidence to support opposition to summary judgment. Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998). B. SEVERAL OF PLAINTIFF'S CLAIMS ARE BARRED BY RES JUDICATA Res judicata "precludes the relitigation of claims which have been fully adjudicated or arise from the same subject matter, and that could have been litigated in the prior action." Palmer v. Federal Home Loan Mortg. Corp., No. 4:13–CV–430–A, 2013 WL 2367794, at * 2 (N.D. Tex. May 30, 2013). "Under res judicata, a prior judgment bars a subsequent judgment Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 5 of 30 PageID #: 2071 MOTION FOR SUMMARY JUDGMENT PAGE 6 when (1) the parties are identical or in privity; (2) the judgment in the prior action was rendered by a court of competent jurisdiction; (3) the prior action was concluded by a final judgment on the merits; and (4) the same claim or cause of action was involved in both actions." Id. In this case, all four elements for the application of res judicata are present. 1. The Parties are Identical or in Privity and The First Lawsuit Concluded by a Final Judgment on the Merits Privity exists: (1) where the non-party is the successor in interest to a party's interest in property; (2) where the non-party controlled the prior litigation; and (3) where the non-party's interests were adequately represented by a party to the original suit. Wicker v. Seterus, Inc., No. EP-15-CV-331-KC, 2016 WL 2622017, at *5 (W.D. Tex. May 5, 2016). Specifically, "privity exists between preceding and succeeding owners of property," and "assignees and servicing agents of a loan are in privity with an original mortgage company." See Ernest v. CitiMortgage, Inc., No. SA:13-CV-802-DAE, 2014 WL 294544, at *4 (W.D. Tex. Jan. 22, 2014). Here, the plaintiff in the First Lawsuit is identical to the Plaintiff in the instant lawsuit, and Defendant, as mortgagee and mortgage servicer, is in privity with Homecomings and GMAC, the previous mortgagees of the Property. See Ernest, 2014 WL 294544, at *4. The First Lawsuit concluded by final judgment on the merits, and that the Eastern District of Texas, Sherman Division was competent to enter such final judgment.6 See First Lawsuit, Doc. Nos. 31-32. 2. Several of the Same Claims and Causes of Action are involved in the First Lawsuit and Instant Lawsuit Under the Fifth Circuit's "transactional test," a "prior judgment's preclusive effect extends to all rights of the plaintiff with respect to all or any part of the transaction, or series of connected transactions, out of which the original action arose." Test Masters Educ. Servs., Inc. v. Singh, 428 F.3d 559, 571 (5th Cir. 2005). To determine whether the same claims or causes of action are 6 The Second Lawsuit was concluded as to the claim for declaratory judgment based on the validity of the lien on the Property. Thus, any claims challenging the validity of the lien would also be barred by res judicata. Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 6 of 30 PageID #: 2072 MOTION FOR SUMMARY JUDGMENT PAGE 7 brought, the transactional test is applied, in which "all claims arising from a common nucleus of operative facts and could have been brought in the first lawsuit, are barred by res judicata." Id. "It is black-letter law that res judicata . . . bars all claims that were or could have been advanced in support of the cause of action on the occasion of its former adjudication . . . not merely those that were adjudicated." Id. (emphasis in original). In this case, many of the causes of action asserted in the First Lawsuit and instant lawsuit arise from a common nucleus of operative facts and were either brought or could have been brought in the First Lawsuit, and as a result, are barred by res judicata. In the First Lawsuit, Plaintiff asserted a RESPA claim based on his allegations that he was fraudulently induced into entering the Loan and that required disclosures were not provided. See First Lawsuit, Doc. No. 31 at p. 5. The RESPA claim was dismissed with prejudice. Id. In the instant lawsuit, Plaintiff also asserts a RESPA claim, this time based on his allegations that the Loan involved hidden table funding that was not disclosed to him. (See Doc. 49 at 11.) The RESPA claim is barred by res judicata because it is based on conduct relating to the Loan that was either brought or could have been brought in the First Lawsuit. C. ANY CLAIMS BASED ON THE ASSIGNMENT AND SECURITIZATION CHALLENGES FAIL Plaintiff alleges that the Assignments were not recorded in violation of Sections 192.001, 192.007, and 193.003 of the Texas Local Government Code and Sections 11.001(a), 11.004, 12.001, 13.001, and 13.002 of the Texas Property Code. (See id. at 10, 12–13.) Plaintiff also alleges that the Loan was not timely transferred into a securitized trust by the closing date specified in the trust's pooling and servicing agreement and that the Loan was illegally added to the trust because assignments were not recorded. (Id. at 12.) Plaintiff fails to appreciate that no violations of the Texas Local Government Code and Texas Property Code occurred because the referenced sections of those statutes do not require Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 7 of 30 PageID #: 2073 MOTION FOR SUMMARY JUDGMENT PAGE 8 that an assignment be recorded and there is no such requirement under Texas law.7 Regardless, the Assignments are recorded. (Id., Exs. 7 & 722.) Plaintiff lacks standing to assert any violations of the pooling and servicing agreement and challenge any assignments that violate the closing date provision in a pooling and servicing agreement.8 Plaintiff has not alleged that he is a party to or intended third-party beneficiary of any pooling and servicing agreement or any assignment, and thus, lacks standing to assert violations of the pooling and serving agreement under Texas law. Any claims based on the alleged assignment and securitization challenges fail as a matter of law. Defendant is entitled to summary judgment dismissing any claims based on the alleged assignment and securitization challenges with prejudice. D. THE CHAIN OF TITLE CHALLENGE FAILS Plaintiff alleges that there is a break in the chain of title relating to the Property. (See Doc. 49 at 9, 11-13, 43.) The chain of title challenge fails as a matter of law and does not support any claims in this lawsuit. To the extent Plaintiff alleges that MERS does not have the authority to execute any assignments, such allegation has been roundly rejected by "Fifth Circuit precedent and Texas law." Reed v. Bank of Am., N.A., No. CV H-15-2005, 2015 WL 7736642, at *2 (S.D. Tex. Nov. 30, 2015).9 As beneficiary of the Deed of Trust, MERS has the right to assign the Deed of Trust.10 The chain of title challenge also fails because the chain of title between Homecomings, the original lender designated in the Deed of Trust, and Defendant, the 7 See, e.g., Harris Cnty. v. MERSCORP, Inc., No. 14-10392, 2015 WL 3937927, at *8 (5th Cir. June 26, 2015); Reinagel v. Deutsche Bank Nat'l Trust Co., 735 F.3d 220, 228 n.27 (5th Cir. 2013); Munoz v. HSBC Bank USA, N.A., No. CIV.A. H-12-0894, 2013 WL 265982, at *7 (S.D. Tex. Jan. 22, 2013); Bittinger v. Wells Fargo Bank, NA, 744 F. Supp. 2d 619, 625 (S.D. Tex. 2010). 8 See Sigaran v. U.S. Bank Nat'l Ass'n, 560 F. App'x 410, 413-14 (5th Cir. 2014); Reinagel, 735 F.3d at 228; Ermisch v. HSBC Bank, Nat'l Ass'n., No. 15-50276, 2015 WL 7423234, at *2 (5th Cir. Nov. 20, 2015); Farkas v. GMAC Mortg., L.L.C., 737 F.3d 338, 342 (5th Cir. 2013). 9 See also Martins v. BAC Home Loans Servicing, L.P., 722 F.3d 249, 253 (5th Cir. 2013); Reece v. U.S. Bank Nat'l Ass'n, 762 F.3d 422, 424-425 (5th Cir. 2014). 10 See Wiley v. Deutsche Bank Nat'l Tr. Co., 539 F. App'x 533, 536 (5th Cir. Sept. 6, 2013); Richardson v. CitiMortgage, Inc., No. 6:10CV119, 2010 WL 4818556, at *5 (E.D. Tex. Nov. 22, 2010) Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 8 of 30 PageID #: 2074 MOTION FOR SUMMARY JUDGMENT PAGE 9 mortgagee of record prior to the foreclosure of the Property, is unbroken. (Doc. 49, Exs. 7, 302, 303.) On October 8, 2012, MERS, as nominee for Homecomings and its successors and assigns, assigned the Deed of Trust to GMAC. (See id., Ex. 722.) Thereafter, on May 16, 2013, GMAC assigned the Deed of Trust to Green Tree Servicing, LLC, which changed its name to Defendant. (Id., Ex. 7); Ex. A. The Assignments belie any allegations of a break in the chain of title.11 Accordingly, the chain of title challenge fails as a matter of law and does not support any claims in this lawsuit. E. THE DEFAULT NOTICE ALLEGATIONS DO NOT SUPPORT ANY CLAIMS IN THE LAWSUIT Plaintiff alleges the foreclosure sale of the Property is unlawful because no notice of default was timely sent and/or mailed to him. (See Doc. 49 at 24, 39, 43.) But in a November 22, 2016 letter, Plaintiff contends that he "never received . . . a Notice of Default from the mortgagee . . . " (Doc. 49, Ex. 20 at p. 3 (emphasis added)). Plaintiff also acknowledges that a default notice was sent in July 2011, but that the statute of limitations on that notice purportedly expired under Section 16.035 of the Texas Civil Practice and Remedies Code.12 (Id. at 44 (acknowledging default notice was sent on July 11, 2011 and describing contents of notice)). The allegation that Plaintiff did not receive notice of default does not support any claims in this lawsuit because, under Texas law, "[t]here is no requirement that [a plaintiff actually] receive the notice." See Martins, 722 F.3d at 256 (citing TEX. PROP. CODE § 51.002(e)) (emphasis added).13 Simply put, Plaintiff's notice-of-default allegations do not support any claims in this lawsuit. Therefore, Defendant is entitled to summary judgment dismissing any claims based on failure to 11 See Morlock, L.L.C. v. JP Morgan Chase Bank, N.A., 586 F. App'x 631, 634 (5th Cir. 2013); Jemison v. CitiMortgage, Inc., No. H-13-2475, 2014 WL 2739351, at *3-5 (S.D. Tex. Jun. 17, 2014). 12 Contrary to Plaintiff's allegation, this section of the Civil Practice and Remedies Code does not provide that a notice of default is subject to any limitations period. See generally TEX. CIV. PRAC. & REM. CODE § 16.035. 13 See also Rodriguez v. Ocwen Loan Servicing, LLC, 306 Fed. Appx. 854, 856 (5th Cir. 2009); Wheeler v. JPMorgan Chase Bank, Nat'l Ass'n, No. 4:13–CV–364, 2013 WL 3965304, at *4 (S.D. Tex. Aug. 1, 2013). Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 9 of 30 PageID #: 2075 MOTION FOR SUMMARY JUDGMENT PAGE 10 receive default notice allegations with prejudice. F. THE TDCA CLAIM FAILS AS A MATTER OF LAW The TDCA claim fails as a matter of law because it is based on Plaintiff's fatally flawed notice-of-default allegations. (Doc. 49 at 39.) Nonetheless, the TDCA claim otherwise fails as a matter of law. To establish a claim under the TDCA, Plaintiff must allege that: (1) the debt at issue is a consumer debt; (2) the defendant is a "debt collector" within the meaning of the TDCA; (3) the defendant committed a wrongful act in violation of the TDCA; (4) the wrongful act was committed against the plaintiff; and (5) the plaintiff was injured as a result of the defendant's wrongful act. See TEX. FIN. CODE §§ 392.001 et. seq. Plaintiff, however, fails to allege any of the elements of a TDCA claim and otherwise fails to plead sufficient facts to state a TDCA claim. Plaintiff cannot sufficiently plead a claim for a TDCA violation—much less support each element of a TDCA violation with any evidence. Indeed, Plaintiff also has no evidence that Defendant committed a wrongful act in violation of the TDCA, that any wrongful act was committed against Plaintiff, or that Plaintiff was injured as a result of the wrongful act. Therefore, the Court should dismiss the TDCA claim with prejudice. G. THE FRAUDULENT LIEN CLAIM FAILS AS A MATTER OF LAW Plaintiff alleges that the filing of the Assignments,14 Appointment of Substitute Trustee, Notice of Sale, and Trustee's Deed in the real property records violated Section 12.002 of the Texas Civil Practice and Remedies Code. (Doc. 49 at 2, 7, 19, 23-27, 32, 42, 44-45.) Plaintiff also asserts violations of Section 12.002 for providing legal services in support of a purported unlawful foreclosure sale and conducting an unlawful foreclosure sale. (Id. at 28-29.) The fraudulent lien claim, however, fails as a matter of law. Section 12.002 "prohibits a person from making, presenting, or using a document with 14 The fraudulent lien claim based on the filing of the Assignments, which occurred either in 2012 or 2013, is barred by res judicata. (Doc. 49, Exs. 7 & 722.) Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 10 of 30 PageID #: 2076 MOTION FOR SUMMARY JUDGMENT PAGE 11 knowledge the document is a fraudulent lien against real property." Lassberg v. Barrett Daffin Frappier Turner & Engel, L.L.P., No. 4:13-CV-577, 2015 WL 123756, at *5 (E.D. Tex. Jan. 8, 2015). To prove a fraudulent lien claim, Plaintiff must show "(1) the defendant made, presented, or used a document with knowledge it was a fraudulent lien, (2) the defendant intended that the document be given legal effect, and (3) the defendant intended to cause plaintiff physical injury, financial injury, or mental anguish." Merritt v. Davis, 331 S.W.3d 857, 860-61 (Tex. App— Dallas 2011, pet. denied). Under Section 12.001(3), a "lien" is defined as "a claim in property for the payment of a debt and includes a security interest." TEX. CIV. PRAC. & REM. CODE § 12.001(3). A "majority of federal district courts have held that a document assigning a deed of trust does not qualify as a 'lien or claim' under Section 12.002." Golden v. Wells Fargo Bank, N.A., 557 F. App'x 323, 327 n.2 (5th Cir. 2014). Thus, the Assignment and Notice of Sale do not qualify as liens under Section 12.002. Additionally, appointments of substitute trustees are not liens, and therefore, Section 12.002 does not apply. See Lassberg, 2015 WL 123756, at *5. Further, the Plaintiff has no evidence that the Notice of Sale qualifies as a lien under Section 12.002. The Fifth Circuit has also affirmed the dismissal of fraudulent lien claims where plaintiffs fail to adequately plead that defendants intended to cause physical injury, financial injury, or mental anguish.15 The Amended Complaint is devoid of any elements to state a fraudulent lien claim. Plaintiff also has no evidence that Defendant made, presented, or used a document with knowledge it was a fraudulent lien, intended that the document be given legal effect, and intended to cause plaintiff physical injury, financial injury, or mental anguish. Plaintiff also has no evidence of the requisite intent to prove a fraudulent lien claim. There is no evidence 15 See Harris Cnty., Tex. v. MERSCORP Inc., 791 F.3d 545, 556 (5th Cir. 2015); Ybarra v. Wells Fargo Bank, N.A., 575 F. App'x 471, 474 (5th Cir. 2014); Trang v. Bean, 600 F. App'x 191, 193 (5th Cir. 2015). Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 11 of 30 PageID #: 2077 MOTION FOR SUMMARY JUDGMENT PAGE 12 demonstrating that Defendant intended to cause Plaintiff physical injury, financial injury, or mental anguish.16 Nor can Plaintiff establish that Defendant caused him any injury or mental anguish. This is because, as the Fifth Circuit has stated, the use of an assignment "for business purposes hardly equates to an argument that [Defendant] intended to inflict financial injury or mental anguish." Reece, 762 F.3d at 424 (quoting Golden, 557 F. App'x at 326 (affirming dismissal of Section 12.002 claim for failure to adequately plead "injury" element)). It is self- evident from Plaintiff's allegations that Defendant was acting in a business capacity relating to the Assignments, Appointment of Substitute Trustee, Notice of Sale, and Trustee's Deed, and thus, the fraudulent lien claim fails. See Miceli v. The Bank of New York Mellon, No. 1:13-CV- 1032-DAE, 2015 WL 300671, at *17 n.2 (W.D. Tex. Jan. 21, 2015). The fraudulent lien claim also fails because Plaintiff lacks standing to challenge the Assignments and the Appointments of Substitute Trustee.17 Consequently, Defendant is entitled to summary judgment dismissing the fraudulent lien claim with prejudice. H. THE FDCPA CLAIM FAILS AS A MATTER OF LAW Plaintiff alleges that the foreclosure of the Property violated Section 1692g of the FDCPA, but fails to specify which of the five subsections form the basis of the FDCPA claim. (See Doc. 49 at 28.) To state an FDCPA claim, Plaintiff must prove the following: (1) he has been the object of collection activity arising from consumer debt; (2) Defendant is a debt collector defined by the FDCPA; and (3) Defendant has engaged in an act or omission prohibited by the FDCPA. See Vick v. NCO Financial Systems, Inc., No. 2:09-CV-114-TJW-CE, 2011 WL 1193027, at *2 (E.D. Tex. Mar. 2011). "Only parties who meet the statutory definition of debt 16 See Jolem, LLC, 2015 WL 3823642, at *9; Lassberg, 2015 WL 123756, at *5; Salomon v. Lesay, 369 S.W.3d 540, 549 (Tex. App.—Houston [1st Dist.] 2012, no pet.). 17 See Coe v. Fed. Nat'l Mortg. Ass'n, No. 3:14-CV-4231-M-BN, 2015 WL 7444213, at *3 (N.D. Tex. Oct. 28, 2015); Vickery v. Wells Fargo Bank, N.A., No. 11–cv–0243, 2013 WL 321662, at *9 (S.D. Tex. Jan. 28, 2013); Lassberg, 2015 WL 123756, at *5 n.5. Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 12 of 30 PageID #: 2078 MOTION FOR SUMMARY JUDGMENT PAGE 13 collector are subject to civil liability under the FDCPA." Bacon v. Sw. Airlines Co., No. Civ. A. 3:97–CV–2211–L, 1999 WL 134569, *2 (N.D. Tex. Mar. 5, 1999). "[A] debt collector does not include the consumer's creditors, a mortgage servicing company, or an assignee of a debt, as long as the debt was not in default at the time it was assigned." Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 1985). As an initial matter, Plaintiff fails to state any of the elements of an FDCPA claim. Plaintiff fails to allege and has no evidence that he has been the object of collection activity arising from consumer debt, that Defendant is a debt collector under the FDCPA, and that Defendant has engaged in an act or omission prohibited by the FDCPA. Notwithstanding the above, the FDCPA claim fails as a matter of law because foreclosure proceedings are not debt collection under the FDCPA.18 Further, Plaintiff fails to specify how a foreclosure sale violates Section 1692g, which is a debt validation provision of the FDCPA. Accordingly, Defendant is entitled to summary judgment dismissing the FDCPA with prejudice. I. THE TEXAS PROPERTY CODE CLAIMS FAIL AS A MATTER OF LAW Plaintiff asserts various violations of multiple sections of the Texas Property Code based on his allegations that: (1) a release of lien from 2005 violates Section 12.017 of the Texas Property Code; (2) no notice of default was provided to him, and as a result, subsequent foreclosure-related notices were fraudulent and the foreclosure sale of the Property was unlawful; and (3) there were no legally appointed substitute trustees to conduct the sale, and therefore, the appointment of substitute trustee is fraudulent. (See Doc. 49 at 11-12, 14, 24, 28, 30-33, 36-39, 44-45.) The Texas Property Code claims fail as a matter of law. 18 See Sweet v. Wachovia Bank & Trust Co., No. 3:03-cv-1212-R, 2004 WL 1238180, at *2 (N.D. Tex. Feb. 26, 2004); Castanon v. Wells Fargo Bank, N.A., No. 3:11-CV-03472-P, 2012 WL 3200869, at *3 (N.D. Tex. June 22, 2012); Anderson v. CitiMortgage, No. 4:10-CV-398, 2011 WL 1113494, at *5 (E.D. Tex. Mar. 24, 2011); Brown v. Morris, 243 Fed. App'x 31, 35 (5th Cir. 2007); Mortberg v. Litton Loan Servicing, LP, No. 4:10-CV-668, 2011 WL 4431946, at *6 (E.D. Tex. Aug. 30, 2011). Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 13 of 30 PageID #: 2079 MOTION FOR SUMMARY JUDGMENT PAGE 14 None of the complained of conduct relating to the release of lien and Appointment of Substitute Trustee constitutes a violation of any of the referenced sections of the Texas Property Code.19 Notwithstanding such, the Texas Property Code does not provide Plaintiff with a private right of action as a matter of law. See Reed, 2015 WL 7736642, at *2; Swannie v. Bank of N.Y., Mellon, No. 4:11-CV-338, 2012 WL 2942242, at *4 (N.D. Tex. July 19, 2012). "A plaintiff does not have a right of action merely because a defendant violated a statute." Reed, 2015 WL 7736642, at *4. In particular, courts have held that there is no private right of action under Chapter 51 of the Texas Property Code, and that such claims are construed as ones for wrongful foreclosure.20 Thus, the Court should construe Plaintiff's purported claim for violation of the Texas Property Code relating to the foreclosure of the Property as one for wrongful foreclosure. Plaintiff, however, cannot establish a wrongful foreclosure claim or produce any evidence of its elements as a matter of law because he admits that he is still in possession of the Property. (Doc. 49 at 2.)21 Further, Plaintiff cannot allege or prove sufficient facts demonstrating a grossly inadequate selling price and a causal connection between the defect and the grossly inadequate 19 Defendant was not involved in the 2005 release of lien and the release of lien is not related to the subject Deed of Trust. (See Doc. 49, Ex. 396.) Regardless, Plaintiff's allegation that only an insurance company or title company can release a lien is incorrect. See TEX. PROP. CODE § 12.017 (stating that a "title insurance company or . . . title insurance agent may, on behalf of the mortgagor or a transferee of the mortgagor . . . , execute an affidavit . . . .") (emphasis added). Additionally, Plaintiff's allegation that an appointment of substitute trustee must contain the name and address of each substitute trustee pursuant to Sections 51.0075(e), 51.0076, and 51.002(b) is wrong. None of these sections requires that an appointment of substitute trustee contain such information. See TEX. PROP. CODE §§ 51.0075(e), 51.0076, 51.002(b). Similarly, Plaintiff's allegation that there is no effective date of the Appointment of Substitute Trustee pursuant to Section 51.0076 is without merit because that section does not require that the language Plaintiff contends was omitted be included in an appointment of substitute trustee, but rather such omitted language is to be included in a notice of sale. Id. § 51.0076. 20 Reed, 2015 WL 7736642, at *4; England v. JPMorgan Chase Bank, N.A., No. 4:14-CV-183-Y, 2014 WL 12588508, at *1 (N.D. Tex. June 19, 2014); Hill v. Wells Fargo Bank, N.A., No. V–12–11, 2012 WL 2065377, at *7 (S.D. Tex. June 6, 2012); Bittinger, 2011 WL 3568206, at *4. 21 See also Marsh v. Wells Fargo Bank, NA, No. 3:10-cv-1283-M, 2011 WL 180031, at *5-6 (N.D. Tex. Jan. 19, 2011); Peoples v. BAC Home Loans Servicing, LP, No. 4:10–CV–489–A, 2011 WL 1107211, at *4 (N.D. Tex. Mar. 25, 2011); Biggers v. BAC Home Loans Servicing, LP, No. 3:10-CV-1182-D, 2011 WL 588059, at *3-4 (N.D. Tex. Feb. 10, 2011). Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 14 of 30 PageID #: 2080 MOTION FOR SUMMARY JUDGMENT PAGE 15 selling price,22 both of which are required to state a wrongful foreclosure claim. See Hurd v. BAC Home Loans Servicing, LP, 880 F. Supp. 2d 747, 766 (N.D. Tex. 2012). In this case, the Property did not sell for a grossly inadequate selling price as a matter of law. The Property sold for $594,781.78 on March 3, 2016. (See Doc. 49, Ex. 1016.) According to the Collin County Appraisal District, the market value of the Property in 2016 was $418,083. A true and correct copy of the Collin Central Appraisal District valuation of the Property is attached hereto and incorporated by reference as Exhibit B.23 Thus, the Property sold for more than 100% of its fair market value, and as a result, the selling price is not grossly inadequate as a matter of law. Consequently, Plaintiff also cannot demonstrate any causal connection between any defect and a grossly inadequate selling price. Plaintiff has no evidence demonstrating a grossly inadequate selling price or a causal connection between the defect and the grossly inadequate selling price. Moreover, Texas law is clear that to set aside, cancel, and rescind a foreclosure sale, a borrower is required to tender, not just offer, the full amount due under the note.24 The Amended Complaint is devoid of any allegations that Plaintiff tendered the full amount due under the Note and Plaintiff has no evidence that he tendered the full amount due under the Note. Accordingly, Defendant is entitled to summary judgment dismissing the wrongful foreclosure claim and claim for violation of the Texas Property Code with prejudice. 22 There must be evidence of an irregularity that "must have caused or contributed to cause the property to be sold for a grossly inadequate price." Barcenas v. Fed. Home Loan Mortg. Corp., 2013 WL 286250, at *5 (S.D. Tex. Jan. 24, 2013). Under Texas law, "a grossly inadequate price would have to be so little as 'to shock a correct mind.'" Martins, 722 F.3d at 256. The Fifth Circuit has recognized that a selling price is not grossly inadequate under Texas law if the property sells for at least 60% of its fair market value. See Ayres v. Parker, No. SA-12-CV-621-XR, 2013 WL 4048323, at *8 (W.D. Tex. Jul, 29, 2013). 23 Pursuant to Rule 201, Defendant requests that the Court take judicial notice of the Collin Central Appraisal District market valuation for the Property. See FED. R. EVID. 201(b). 24 Hill, 2012 WL 2065377, at *9; Fillion v. David Silvers Co., 709 S.W.2d 240, 246 (Tex. App.—Houston [14th Dist.] 1986, writ ref'd n.r.e.). Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 15 of 30 PageID #: 2081 MOTION FOR SUMMARY JUDGMENT PAGE 16 J. PLAINTIFF LACKS STANDING TO CHALLENGE THE APPOINTMENT OF SUBSTITUTE TRUSTEE Plaintiff alleges that the Appointment of Substitute Trustee was fraudulently filed in the real property records, that the Notice of Sale is fraudulent because there are no legally appointed substitute trustees, and that the foreclosure of the Property is unlawful because the substitute trustees were fraudulently appointed. (See Doc. 49 at 23, 27, 32-39, 43-44.) While unclear, Plaintiff appears to allege that the Appointment of Substitute Trustee is fraudulent because the membership rules of MERS prohibit the initiation of foreclosure in MERS' name and that the individual that signed the Appointment of Substitute Trustee did not provide any evidence of his authority to enter into any document on behalf of MERS. (See Doc. 49 at 34-36.) Such allegations, however, do not support any claims in this lawsuit because Plaintiff lacks standing to challenge the Appointment of Substitute Trustee and the membership rules of MERS because he is neither a party to the Appointment of Substitute Trustee and MERS rules or intended third-party beneficiary of the Appointment of Substitute Trustee and MERS rules.25 Notwithstanding the above, Plaintiff has not pled facts sufficient to undermine the validity of the Appointment of Substitute Trustee. Pursuant to the Deed of Trust, Defendant has the authority to remove or substitute any trustee, add trustees, and appoint successor trustees. (See Doc. 49, Ex. 303 at ¶ 24 ("Lender, at its option and with or without cause, may from time to time . . . remove or substitute any trustee, add one or more trustees, or appoint a successor trustee to any Trustee without the necessity of any formality other than a designation by Lender in writing.").) 25 See Reinagel, 735 F.3d at 224-25; Wilson–McClain v. Specialized Loan Servicing, LLC, No. 3:15CV541, 2016 WL 5662002, at *4 (E.D. Va. Sept. 29, 2016) (holding that borrower lacked standing to challenge an appointment of substitute trustee because she was neither a party to the appointment nor the intended beneficiary of the appointment); Reamer v. Deutsche Bank Nat'l Tr. Co. Americas, No. 3:15CV00601-HEH, 2016 WL 1259557, at *3 (E.D. Va. Mar. 28, 2016) ("A debtor who is not a party to or intended beneficiary of the appointment of a substitute trustee has no legal rights or interest in that appointment and therefore lacks standing to challenge its validity."); Hines v. Wells Fargo Bank, N.A., No. CIV.A. H-13-167, 2014 WL 897805, at *5 (S.D. Tex. Mar. 6, 2014) (holding borrower lacked standing under MERS "internal rules . . . ."); Nobles v. Marcus, 533 S.W.2d 923, 927 (Tex. 1976); NRG Exploration, Inc. v. Rauch, 905 S.W.2d 405, 410 (Tex. App.—Austin 1995, writ denied). Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 16 of 30 PageID #: 2082 MOTION FOR SUMMARY JUDGMENT PAGE 17 Plaintiff agreed to these terms by executing the Deed of Trust. (See Doc. 49, Ex. 303.) Defendant exercised its authority under the Deed of Trust in appointing the substitute trustees in the Appointment of Substitute Trustee. Consequently, the Appointment of Substitute Trustee is not fraudulent. Contrary to Plaintiff's allegation, nowhere in the Appointment of Substitute Trustee is there any indication that MERS was pursing foreclosure of the Property in its own name. (See Doc. 49, Ex. 11.) The Appointment of Substitute Trustee merely replaces the original trustee under the Deed of Trust. Any allegation that the foreclosure of the Property was initiated in MERS' name is belied by the Notice of Sale, which reflects that Defendant, as the mortgagee and mortgage servicer—not MERS—was pursing foreclosure. (Id., Ex. 1.) Therefore, Defendant is entitled to summary judgment dismissing any claims based on the fraudulent substitute trustee allegations with prejudice. K. THE RESPA CLAIM FAILS AS A MATTER OF LAW Plaintiff alleges that the Loan involved hidden table funding that was not disclosed to him and not identified in his mortgage documents in violation of RESPA. (See Doc. 49 at 11.) The RESPA claim, however, is barred by res judicata. Nonetheless, the RESPA claim otherwise fails as a matter of law. The RESPA claim is time-barred. Pursuant to 12 U.S.C. § 2614, there is a one-year statute of limitations for RESPA actions brought pursuant to §§ 2607 and 2608, and a three-year statute of limitations in the case of a violation of § 2605. See 12 U.S.C. § 2614; see also Casterline v. Indy Mac/One W., 761 F. Supp. 2d 483, 489 (S.D. Tex. 2011). "The limitations periods [for a RESPA claim] begins to run at the date of closing . . . ." Val-Com Acquisitions Tr. v. Wells Fargo Bank, N.A., No. 4:10-CV-407, 2011 WL 1344176, at *3 (E.D. Tex. Mar. 15, 2011). The Loan closed in 2008, but this lawsuit was not filed until 2016, well after the one and three year statute of limitations to bring a RESPA claim lapsed. Further, Plaintiff has no evidence of any actual damages in relation to the alleged RESPA violation. Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 17 of 30 PageID #: 2083 MOTION FOR SUMMARY JUDGMENT PAGE 18 Therefore, Defendant is entitled to summary judgment dismissing the RESPA with prejudice. L. THE RICO CLAIM FAILS AS A MATTER OF LAW Reduced to its essence, the RICO claim is based on Plaintiff's allegations that the Appointment of Substitute Trustee and Notice of Sale are purportedly fraudulent and that the foreclosure sale of the Property is unlawful. (See Doc. 49 at 46-47.) According to Plaintiff, in unspecified actions occurring on January 31, 2013, May 17, 2013, March 31, 2016, April 11, 2016, April 13, 2016, May 5, 2016, and May 20, 2016, Ditech and Codilis "engaged in: (1) racketeering (18 USC §1961), (2) disregarding bankruptcy law (18 USC §156), (3) monetary transactions in property derived from unlawful activity (18 USC §1957), (4) conspiracy (18 USC §2), (5) mail fraud (18 USC §1341), (6) wire fraud (18 USC §1343), (7) other acts of fraud (18 USC §1349), and (8) bank fraud (18 USC §1344) . . . ." (Id. at p. 46.) The RICO claim fails. 26 The essential elements of a RICO claim are: "(1) a person who engages in (2) a pattern of racketeering activity (3) connected to the acquisition, establishment, conduct, or control of an enterprise." Auto-Opt Networks, Inc. v. GTL USA, Inc., No. 3:14-CV-1252-D, 2014 WL 2719219, at *5 (N.D. Tex. June 16, 2014). A "pattern of racketeering activity requires . . . at least two acts of racketeering activity, one of which occurred after the effective date of [RICO] and the last of which occurred within ten years (excluding any period of imprisonment) after the commission of a prior act of racketeering activity." 18 U.S.C. § 1961(5)). 1. Plaintiff Has No Evidence of Two or More Predicate Acts To recover on a RICO claim, Plaintiff "must do more than simply list the predicate act crimes necessary to establish a pattern of racketeering activity . . . ." Gordon, 2014 WL 6611991, at *10. Plaintiff must plead and prove the elements of the criminal offenses that 26 The alleged violations of 18 U.S.C § 156, 18 U.S.C § 2, 18 U.S.C § 1349 do not qualify as predicate acts for purposes of establishing a pattern of racketeering activity because they are not listed in 18 U.S.C. 1961(1). See Gordon v. Neugebauer, No. 1:14-CV-0093-J, 2014 WL 6611991, at *9 (N.D. Tex. Nov. 21, 2014); see also Bonton v. Archer Chrysler Plymouth, Inc., 889 F. Supp. 995, 1002 (S.D. Tex. 1995). Therefore, the RICO claim based on the alleged violation of these federal statutes fails as a matter of law. Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 18 of 30 PageID #: 2084 MOTION FOR SUMMARY JUDGMENT PAGE 19 comprise the predicate acts and provide evidence that would establish that each predicate act was in fact committed by Defendant. See Elliott v. Foufas, 867 F.2d 877, 880 (5th Cir. 1989). a. The Mail and Wire Fraud Claims Fail as a Matter of Law RICO claims based on fraud are subject to the heightened pleading requirements of Rule 9(b). See Paul v. Aviva Life & Annuity Co., No. 3:09-CV-1490-B, 2010 WL 5105925, at *4-5 (N.D. Tex. Dec. 14, 2010). Thus, for each fraud-based predicate act, "a plaintiff must at a minimum allege the time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby." Id. (citations and quotations omitted). "The elements of a properly pled mail fraud claim under 18 U.S.C. § 1341 are (1) [d]efendants' participation in some scheme or artifice to defraud, (2) the use of the mails 'caused by' [d]efendants or someone associated with the scheme, and (3) the use of the mails for the purpose of executing the scheme." W. Tex. Nat’l Bank v. FEC Holdings, LP, No. MO-11- CV-086, 2013 WL 2158947, at *5 (W.D. Tex. May 17, 2013). "The elements of a wire fraud claim under 18 U.S.C. § 1343 are the same as those for a mail fraud claim except the use of the wire must be interstate." W. Tex. Nat’l Bank, 2013 WL 2158947, at *5. "A RICO claim asserting mail fraud as a predicate act must allege how each specific act of mail fraud actually furthered the fraudulent scheme, who caused what to be mailed when, and how the mailing furthered the fraudulent scheme." Bonton v. Archer Chrysler Plymouth, Inc., 889 F. Supp. 995, 1002 (S.D. Tex. 1995). As to scienter, "both RICO mail and wire fraud require evidence of intent to defraud, i.e., evidence of a scheme to defraud by false or fraudulent representations." St. Paul Mercury Ins. Co. v. Williamson, 224 F.3d 425, 441 (5th Cir. 2000). In this case, Plaintiff fails to sufficiently allege and has no evidence of the predicate acts of mail and wire fraud. Notably, the mail and wire fraud allegations fail to specifically identify, and Plaintiff has no evidence of, the time, place, contents, and identity of the person making the Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 19 of 30 PageID #: 2085 MOTION FOR SUMMARY JUDGMENT PAGE 20 misrepresentation and what he obtained thereby. Plaintiff also fails to allege and has no evidence of how each specific act of mail fraud actually furthered the fraudulent scheme and who caused what to be mailed when. Plaintiff further fails to allege and has no evidence of any evidence of the intent to defraud, i.e. evidence of a scheme to defraud by false or fraudulent representations. Simply put, the allegations in the Amended Complaint are not pled with sufficient particularity and Plaintiff has no evidence of the RICO predicate act of wire fraud or mail fraud. And even if they were, Plaintiff has no evidence of any RICO predicate acts to defeat this Motion for Summary Judgment. As demonstrated herein, Plaintiff's allegations regarding the Appointment of Substitute Trustee, Notice of Sale, and foreclosure sale of the Property are without merit. Consequently, Defendant is entitled to summary judgment dismissing the RICO claim.. b. The Bank Fraud Claim Fails as a Matter of Law "The federal bank fraud statute requires pleading that a defendant knowingly executed or attempted to execute a scheme to either defraud a financial institution or 'to obtain any of the moneys, funds, credits, assets, securities, or other property owned by . . . a financial institution, by means of false or fraudulent pretenses, representations, or promises.'" B Choice Ltd. v. Epicentre Dev. Assocs. LLC, No. CV H-14-2096, 2016 WL 3911123, at *13 (S.D. Tex. May 12, 2016) (citing 18 U.S.C. § 1344). However, "only financial institutions have standing to allege bank fraud violations as RICO predicate acts." Id.; see also W. Tex. Nat’l Bank, 2013 WL 2158947, at *6 ("[C]ourts have consistently found that only financial institutions may claim bank fraud under 18 U.S.C. § 1344 as a predicate act for RICO purposes."). Because he is an individual and not a financial institution, Plaintiff cannot allege and has no evidence of a predicate act of bank fraud as a matter of law. And as demonstrated herein, Plaintiff's allegations regarding the Appointment of Substitute Trustee, Notice of Sale, and foreclosure sale of the Property are meritless. Consequently, Defendant is entitled to summary judgment. Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 20 of 30 PageID #: 2086 MOTION FOR SUMMARY JUDGMENT PAGE 21 c. The Money Laundering Claim Fails as a Matter of Law 18 U.S.C. § 1957 prohibits "knowingly engag[ing] or attempt[ing] to engage in a monetary transaction in criminally derived property of a value greater than $10,000 and is derived from specified unlawful activity." 18 U.S.C. § 1957(a). Although Plaintiff does not specifically identify the offense or offenses listed in Section 1956(c)(7) upon which he relies, it appears that he is basing the money laundering allegations on the same allegations upon which he relies to support the other independent predicate acts of mail, wire, and bank fraud. Because Plaintiff fails to adequately plead facts and has no evidence to support these predicate acts, the predicate act of money laundering necessarily must fail, as it is based on the same allegations that support the mail, wire, and bank fraud predicate acts.27 Notwithstanding the above, Plaintiff has no evidence of the elements necessary to establish a money laundering claim under RICO. "The elements of money laundering, in violation of 18 U.S.C. § 1957(a), are: (i) property valued at more than $10,000 that was derived from a specified unlawful activity; (ii) the defendant's engagement in a financial transaction with the property; and (iii) the defendant's knowledge that the property was derived from unlawful activity." United States v. Alaniz, 726 F.3d 586, 602 (5th Cir. 2013). Thus, Section 1957 prohibits one from engaging in a monetary transaction in criminally derived proceeds, but Plaintiff's allegations, at most, appear to allege only receipt of proceeds derived from the alleged money laundering. The Amended Complaint contains no allegations whatsoever that Defendant engaged in any monetary transactions with the Property or that Defendant had any knowledge 27 See Kimberlin v. Nat'l Bloggers Club, No. GJH-13-3059, 2015 WL 1242763, at *8 (D. Md. Mar. 17, 2015) (dismissing money laundering predicate act because it was based on same allegations as failed mail and wire fraud predicate acts); W. 79th St. Corp. v. Congregation Kahl Minchas Chinuch, No. 03–8606, 2004 WL 2187069, at *9 (S.D.N.Y. Sept. 29, 2004) ("[b]ecause [plaintiff's] allegations of mail and wire fraud [were] insufficient . . . , the 'specified unlawful activity' required [for money laundering] may not be satisfied by reference to those allegations"); Flores v. Emerich & Fike, No. 05–0291, 2009 WL 900738, at *8 (E.D. Cal. Mar. 31, 2009) (holding that plaintiff cannot rely on the "specified unlawful activity" of mail and wire fraud to support the predicate act of money laundering where "[t]he complaint's allegations of mail and wire fraud [were] inadequate"). Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 21 of 30 PageID #: 2087 MOTION FOR SUMMARY JUDGMENT PAGE 22 that the Property was derived from an unlawful activity. Even if he could sufficiently plead a claim, Plaintiff has no evidence that Defendants engaged in money laundering. Thus, this alleged RICO predicate act fails as a matter of law. Consequently, Defendant is entitled to summary judgment dismissing the RICO claim with prejudice. 2. Plaintiff Has Failed to Establish, and Has No Evidence of, a Pattern of Racketeering Activity To establish a pattern of racketeering activity, Plaintiff must produce evidence showing a violation of two or more related predicate acts of racketeering activity and that they amount to or pose a threat of continued criminal activity. Word of Faith World Outreach Ctr. Church, Inc. v. Sawyer, 90 F.3d 118, 122 (5th Cir. 1996). Continuity of racketeering activity can be established by pointing either to "a closed period of repeated conduct, or to past conduct that by its nature projects into the future with a threat of repetition." Id. A closed period of repeated conduct may be demonstrated "by proving a series of related predicates extending over a substantial period of time." Id. An open period of conduct may be shown where there exists a "specific threat of repetition extending indefinitely into the future," or "where it is shown that the predicates are a regular way of conducting defendant's ongoing legitimate business." Id. Plaintiff does not sufficiently allege facts to show, and has no evidence of, a pattern of racketeering activity. Nor can he. This is because Plaintiff has not sufficiently alleged the existence of any predicate acts and has no evidence of any predicate acts. Naturally, if at least two predicate acts are not sufficiently pled, which is the case here, a pattern of racketeering cannot exist. Additionally, Plaintiff has not satisfied the continuity requirement and has no evidence of continuity to demonstrate that a pattern of racketeering activity exists. The Amended Complaint is devoid of any allegations and Plaintiff has no evidence that the predicate acts amount to or pose a threat of continued criminal activity. Plaintiff neither alleges or has any evidence of a series of related predicate acts extending over a substantial period time nor alleges Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 22 of 30 PageID #: 2088 MOTION FOR SUMMARY JUDGMENT PAGE 23 a threat of repetition extending indefinitely into the future. If Plaintiff’s pleading deficiencies were not enough, then Plaintiff’s inability to produce any evidence as to two predicate RICO acts and continuity demonstrate that summary judgment is proper in favor of Defendant on Plaintiff’s racketeering claim. Consequently, Defendant is entitled to summary judgment dismissing the RICO claim with prejudice. 3. Plaintiff Has Failed to Establish, and Has No Evidence of, the Existence of an Enterprise RICO defines an "enterprise" as including "any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity." 18 U.S.C. § 1961(4). "To prove the existence of an enterprise, a plaintiff must show either a legal entity or a union or group of individuals associated in fact." Gordon, 2014 WL 6611991, at *11. "The Fifth Circuit has applied a three-part test to determine whether an alleged enterprise is . . . an association-in-fact for RICO purposes: (1) the enterprise must have an existence separate and apart from the pattern of racketeering, (2) the enterprise must have an ongoing organization, and (3) the members of the enterprise must function as a continuing unit as shown by a hierarchical or consensual decision making structure." Id. In this case, Plaintiff has failed to plead any facts and has no evidence that establishes the existence of an enterprise to which the pattern of racketeering activities are connected. The Amended Complaint fails to allege specific facts and Plaintiff has no evidence establishing the existence or purposes of an enterprise and that the enterprise has an existence separate and apart from any racketeering activity.28 Plaintiff also fails to allege any facts and has no evidence that the enterprise was an ongoing organization. There are no facts describing and no evidence of the organization of the alleged enterprise or how the enterprise conducts its business. See, e.g. 28 See Paul, 2010 WL 5105925, at *4 (plaintiff failed to plead facts showing that the enterprise was an entity separate and apart from the pattern of activity in which it engaged); Oblio Telecom, Inc. v. Patel, CIV A 308–CV– 0279–L, 2009 WL 1650481, at *4 (N.D. Tex. June 10, 2009) ("[plaintiff] must therefore plead specific facts that establish that the association exists for purposes other than simply to commit the predicate acts"). Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 23 of 30 PageID #: 2089 MOTION FOR SUMMARY JUDGMENT PAGE 24 Allstate Ins. Co. v. Donovan, No. CIV.A. H–12–0432, 2012 WL 2577546, at *14 (S.D. Tex. July 3, 2012) (plaintiff failed to plead facts sufficient to establish an ongoing organization where the complaint "lack[ed] factual allegations capable of establishing how the alleged scheme was formed, who—if anyone—was in charge, how each of the defendants participated in the alleged scheme . . . ."). Plaintiff also do not allege facts and has no evidence that the members of the enterprise functioned as a continuing unit as shown by a hierarchical or consensual decision making structure or allege facts relating to the decision-making structure of such. See, e.g., Gordon, 2014 WL 6611991, at *11. Instead, Plaintiff simply contends that if "Ditech Financial LLC, National Association" does not exist, then it is a RICO enterprise and that "Homecomings Wholesale Fundings . . . does not exist" and it could be the RICO enterprise. (See Doc. 49, at 5, 15.) These allegations are not pled with sufficient particularity and are not evidence proving the existence of an enterprise. Nor can they because the purported RICO enterprise, according to Plaintiff, are entities that do not exist. Nevertheless, Plaintiff has no evidence of an “enterprise” for the purposes of a RICO claim. Consequently, Defendant is entitled to summary judgment dismissing the RICO claim with prejudice. M. THE DTPA CLAIM FAILS AS A MATTER OF LAW The DTPA claim is based on Plaintiff's allegation that he purchased goods and services from Homecomings in March 2008. (See Doc. 49 at 8, 11 & Ex. 397.) The DTPA claim is barred by res judicata and otherwise fails as a matter of law. The DTPA claim is barred by the two-year statute of limitations. See TEX. BUS. & COM. CODE § 17.565. The DTPA claim is based on goods and services that Plaintiff alleges he purchased in March 2008, but this lawsuit was not filed until 2016, well after the statute of limitations expired. Plaintiff also fails to allege sufficient facts and has no evidence establishing each element of such claim. To prove a DTPA claim, Plaintiff must establish that: (1) he is a consumer of Defendant's goods or services; (2) Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 24 of 30 PageID #: 2090 MOTION FOR SUMMARY JUDGMENT PAGE 25 Defendant can be sued under the DTPA; (3) Defendant committed a wrongful act proscribed by the DTPA; and (4) Defendant's alleged wrongful act was the producing cause of his damages.29 To qualify as a consumer under the DTPA, Plaintiff must: (1) seek or acquire goods or services by purchase or lease; and (2) the goods or services purchased or leased must form the basis of the complaint.30 "It is well recognized, however, that borrowing money does not constitute the acquisition of a good or service" under the DTPA.31 Even if a lender provides services that are incidental to the completed loan, the performance of such services, such as the servicing of a mortgage, does not transform the borrower into a consumer under the DTPA.32 Additionally, loan servicing and foreclosure activities do not constitute services under the DTPA.33 In this case, the DTPA claim is premised on a loan that Plaintiff obtained from Homecomings in March 2008. (Doc. 49 at 8.) Borrowing money, however, does not constitute the acquisition of a good or service under the DTPA as a matter of law. Plaintiff has no evidence to the contrary. He has no evidence that he is a consumer. Consequently, Plaintiff is not a consumer under the DTPA. Further, the Amended Complaint is devoid of any allegations and Plaintiff has no evidence that he either 29 See TEX. BUS. & COM. CODE § 17.41 et seq.; Adams v. Bank of America, et al., No. 4:10-CV-709, 2011 WL 5080217, at *6 (E.D. Tex. Oct. 26, 2011); Amstadt v. U.S. Brass Corp., 919 S.W. 2d 644, 649 (Tex. 1996); Doe v. Boys Club of Greater Dallas, Inc., 907 S.W.2d 473, 478 (Tex. 1995). 30 See Walker v. Fed. Deposit Ins. Corp., 970 F.2d 114, 123 (5th Cir. 1992); Gomez v. Wells Fargo Bank, N.A., No. 3:10-CV-0381-B, 2010 WL 2900351, at *2 (N.D. Tex. July 21, 2010); Adams, 2011 WL 5080217, at *6. 31 Baker, 2009 WL 1810336, at *6; Fowler v. U.S. Bank, Nat. Ass'n, 2 F. Supp. 3d 965, 974 (S.D. Tex. 2014); Whittier v. Ocwen Loan Servicing, LLC, No. H–12–3095, 2013 WL 5425294, at *7 (S.D. Tex. Sept. 25, 2013); Marketic v. U.S. Bank Nat'l Ass'n, 436 F. Supp. 2d 842, 854-855 (N.D. Tex. 2006); Grant-Brooks v. WMC Mortgage Corp., No. 3:02-CV-2455-AH, 2003 WL 23119157, at *1, 8 (N.D. Tex. Dec. 9, 2003). 32 See Khan v. Wells Fargo Bank, N.A., No. H:12–1116, 2013 WL 5323098, at *4 (S.D. Tex. Sept. 20, 2013); Fowler, 2 F. Supp. 3d at 975; Porter, 2008 WL 2944670, at *3. 33 See Rojas v. Wells Fargo Bank, N.A., 571 F. App'x. 274, 279 (5th Cir. 2014); Brown v. Wells Fargo Bank, N.A., No. H-13-3228, 2015 WL 926573, at *3 (S.D. Tex. Mar. 4, 2015); Fowler, 2 F. Supp. 3d at 974; Hutchinson v. Bank of Am., N.A., No. H-12-3422, 2013 WL 5657822, at *5 (S.D. Tex. Oct. 16, 2013) aff'd, 575 F. App'x 443 (5th Cir. 2014); Khan, 2013 WL 5323098, at *4. Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 25 of 30 PageID #: 2091 MOTION FOR SUMMARY JUDGMENT PAGE 26 sought to purchase or lease or actually purchased or leased any good or services from Defendant. Moreover, Plaintiff fails to allege any facts and has no evidence showing that Defendant committed a wrongful act proscribed by the DTPA, and fails to allege any facts and has no evidence demonstrating that the wrongful act was the producing cause of any alleged damages. Plaintiff has no evidence of the predicate elements to establish a claim for a violation of any provision of the DTPA. Therefore, Defendant is entitled to summary judgment dismissing the DTPA claim with prejudice. N. THE BANKRUPTCY ALLEGATIONS DO NOT SUPPORT ANY CLAIMS IN THIS LAWSUIT Plaintiff alleges that the foreclosure sale of the Property is unlawful because the Property was purportedly "legally excluded" from an asset purchase agreement (the "APA") approved by the Bankruptcy Court in the GMAC Bankruptcy. (See Doc. 49 at 18 & Ex. 1015.) According to Plaintiff, the Property could not be included in the APA because his "mortgage had numerous legal encumbrances on it at the time" of the sale. (Id. at p. 16-17.) Although Plaintiff fails to identify what those encumbrances were, such allegations nonetheless do not support any claims in this lawsuit because Plaintiff misinterprets the APA. Section 2.1 of the APA provides, in relevant part, that "Sellers shall sell, convey, transfer, assign, and deliver . . . to Purchaser, and Purchaser shall purchase from Sellers, all of Sellers' right, title and interest in, to and under the following assets as they exist on the Closing Date . . . in each case free and clear of all Claims and Liens except Permitted Liens . . . : (j) the Owned Real Property . . . ." See Ex. C ¶ 2.1 (emphasis added), a true and correct copy of which is the relevant parts of the APA that is incorporated by reference.34 Under the APA: "Owned Real Property" includes "real property owned by a Seller . . . and that is being sold, conveyed and transferred to Purchaser pursuant to this Agreement"; and 34 Pursuant to Rule 201, Defendant requests that the Court take judicial notice of the Asset Purchase Agreement. See FED. R. EVID. 201(b). Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 26 of 30 PageID #: 2092 MOTION FOR SUMMARY JUDGMENT PAGE 27 "Permitted Liens" includes "(i) with respect to Owned Real Property, all defects, exceptions, restrictions, easements, rights of way, and encumbrances . . . (ii) statutory liens for current Taxes, assessments or other governmental charges not yet due and payable . . . (iv) with respect to Owned Real Property, . . . other customary encumbrances on title to real property . . . ." Id. (emphasis added). Because the APA contemplates the sale of property free and clear of all "Claims and Liens except Permitted Liens," and Permitted Liens includes encumbrances on title to real property, Plaintiff's allegation that the Property could not be included in the APA because his "mortgage had numerous legal encumbrances on it at the time" of the sale is without merit. Regardless, Plaintiff is not a party to the APA or intended third-party beneficiary of the APA, and as a result, Plaintiff lacks standing to challenge, enforce, or assert any claims based on the APA as a matter of law. See Reinagel, 735 F.3d at 224-25; Nobles, 533 S.W.2d at 927; NRG Exploration, Inc., 905 S.W.2d at 410.35 Consequently, Defendant is entitled to summary judgment dismissing any claims based on Plaintiff's bankruptcy allegations. O. THE ALLEGED RULE 736 VIOLATION FAILS AS A MATTER OF LAW Plaintiff alleges the foreclosure sale of the Property violated the automatic stay provision of Rule 736.11 of the Texas Rules of Civil Procedure based on the filing of the instant lawsuit. (See Doc. 49 at 28, 30, 43.) The instant lawsuit, however, did not stay the foreclosure of the Property because the automatic stay provision of Rule 736.11 only applies to foreclosures brought under Rule 736, but Plaintiff fails to allege that Defendant filed an expedited application for foreclose under Rule 736 and has no evidence of a lawsuit filed under Rule 736 seeking a court order authorizing foreclosure. See TEX. R. CIV. P. 736.11.36 35 Plaintiff also has no evidence that he has standing to challenge any loan transfers that occurred during the GMAC Bankruptcy. 36 Defendant requests that the Court take judicial notice that the Collin County Civil Case Records reflect that no expedited foreclosure action pursuant to Rule 736 has been filed relating to the Property. Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 27 of 30 PageID #: 2093 MOTION FOR SUMMARY JUDGMENT PAGE 28 P. THE QUIET TITLE CLAIM FAILS AS A MATTER OF LAW To state a quiet title claim, Plaintiff "must prove: (1) his right, title, or ownership in real property; (2) that the defendant has asserted a 'cloud' on his property, meaning an outstanding claim or encumbrance valid on its face that, if it were valid, would affect or impair the property owner's title; and (3) that the defendant's claim or encumbrance is invalid." Warren v. Bank of America, N.A., 566 F. App'x 379, 382 (5th Cir. 2014). Further, Plaintiff "must prove and recover on the strength of his own title, not the weakness of his adversary's title." Id.37 In this case, the quiet title claim fails as a matter of law because it is not based on the strength of Plaintiff's purported title to the Property, but rather the purported weakness of Defendant's title to the Property. (See Doc. 49 at 52–53) Moreover, Plaintiff has no evidence of an invalid claim or encumbrance that is clouding an right, title, or ownership possessed by him in the Property. At best, Plaintiff is attempted to set aside the foreclosure sale, but for the reasons previously set forth, such a claim fails as a matter of law. See supra Part V.I. Therefore, Defendant is entitled to summary judgment dismissing the quiet title claim with prejudice. Q. THE STATUTORY FRAUD CLAIM FAILS AS A MATTER OF LAW To establish a statutory-fraud claim, Plaintiff must prove: (1) a transaction involving real estate or stock; (2) during the transaction, the other party made a false representation of fact, made a false promise, or benefitted by not disclosing that a third party's representation was false; (3) the false representation or promise was made for the purpose of inducing the party to enter into a contract; (4) the party relied on the false representation or promise by entering into the contract; and (5) the reliance caused the party injury. Ginn v. NCI Bldg. Sys., Inc., 472 S.W.3d 802, 823 (Tex. App.—Houston [1st Dist.] 2015, no pet.) However, "[a] loan transaction, even if 37 See also Martin v. Amerman, 133 S.W.3d 262, 265 (Tex. 2004); Ballard v. Allen, No. 12-03-00370-CV, 2005 WL 1037514, at *3 (Tex. App.—Tyler 2005, no pet.); Fricks v. Hancock, 45 S.W.3d 322, 327 (Tex. App.—Corpus Christi 2001, no pet.); Richardson v. Wells Fargo Bank, N.A., 873 F. Supp. 2d 800, 816 (N.D. Tex. 2012); Cruz v. OneWest Bank, FSB, No. 3:11-cv-01985-M, 2012 WL 1684622, at *2 (N.D. Tex. May 15, 2012). Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 28 of 30 PageID #: 2094 MOTION FOR SUMMARY JUDGMENT PAGE 29 secured by land, is not considered to come under the statute." Burleson State Bank v. Plunkett, 27 S.W.3d 605, 611 (Tex. App.—Waco 2000, pet. denied). In this case, the statutory fraud claim fails as a matter of law because it does not relate to a transaction involving real estate or stock in a corporation. Instead, the statutory fraud claim is based on a mortgage loan and/or various documents that Plaintiff alleges are fraudulent relating to the Loan. (See Doc. 49 at 2, 24-29, 36, 38, 45.) Section 27.01, however, does not apply to loan transactions. Moreover, Plaintiff has no evidence that he relied on a false representation made during a real estate transaction for the purpose of inducing Plaintiff into a contract—much less that he actually entered into a real estate contract and suffered injury as a result. Consequently, Defendant is entitled to summary judgment dismissing the statutory fraud claim with prejudice. VI. CONCLUSION WHEREFORE, Defendant requests that the Court grant this Motion for Summary Judgment and dismiss Plaintiff's claims with prejudice. Defendant further requests all other relief to which it may be justly entitled. Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 29 of 30 PageID #: 2095 MOTION FOR SUMMARY JUDGMENT PAGE 30 Respectfully submitted, /s/ Daniel Durell Marc D. Cabrera State Bar No. 24069453 mcabrera@lockelord.com LOCKE LORD LLP 2200 Ross Avenue, Suite 2800 Dallas, Texas 75201-6776 Telephone: (214) 740-8000 Facsimile: (214) 740-8800 Daniel Durell State Bar No. 24078450 daniel.durell@lockelord.com LOCKE LORD LLP 600 Congress Ave., Suite 2200 Austin, Texas 78701 Telephone: (512) 305-4700 Facsimile: (512) 305-4800 (Facsimile) ATTORNEYS FOR DEFENDANT CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing was served on the 1st day of May, 2017, to Plaintiff via CM/ECF, regular mail, and certified mail, and to all counsel of record via CM/ECF. /s/ Daniel Durell Daniel Durell Case 4:16-cv-00279-ALM-CAN Document 86 Filed 05/01/17 Page 30 of 30 PageID #: 2096 EXHIBIT A Case 4:16-cv-00279-ALM-CAN Document 86-1 Filed 05/01/17 Page 1 of 3 PageID #: 2097 Case 4:16-cv-00279-ALM-CAN Document 86-1 Filed 05/01/17 Page 2 of 3 PageID #: 2098 Case 4:16-cv-00279-ALM-CAN Document 86-1 Filed 05/01/17 Page 3 of 3 PageID #: 2099 EXHIBIT B Case 4:16-cv-00279-ALM-CAN Document 86-2 Filed 05/01/17 Page 1 of 3 PageID #: 2100 Property ID Property Status Geographic ID Property Type Property Address Total Land Area Total Improvement Main Area Abstract/Subdivision Primary State Code Legal Description General Information 2105957 Active R-4457-00B-0040-1 Real 223 High Point Dr Murphy, TX 75094 n/a 3,357 sq. ft. Rolling Ridge Estates #1 A (Residential Single Family) Rolling Ridge Estates #1, Blk B, Lot 4 Owner ID Owner Name(s) Exemptions Percent Ownership Mailing Address Improvement Homesite Value Improvement Non-Homesite Value Total Improvement Market Value Land Homesite Value Land Non-Homesite Value Land Agricultural Market Value Total Land Market Value Total Market Value Agricultural Use Loss Total Appraised Value Homestead Cap Loss Total Assessed Value Owner Information 41417 Federal National Mort Assn HS (Homestead) 100.00% Po Box 650043 Dallas, TX 75265-0043 2016 Value Information $298,083 $0 $298,083 $120,000 $0 $0 $120,000 $418,083 $0 $418,083 (-) $20,084 $397,999 Improvement #1 Improvements Residential Land Segment #1 Land Segments Residential Single Family Property Search Property ID: 2105957 - Tax Year: Entities Taxing Entity Tax Rate Collected By CMR (Murphy City) 0.510000 (2016 Rate) Collin County Tax Office GCN (Collin County) 0.208395 (2016 Rate) Collin County Tax Office JCN (Collin College) 0.081222 (2016 Rate) Collin County Tax Office SPL (Plano ISD) 1.439000 (2016 Rate) Collin County Tax Office 2016 Case 4:16-cv-00279-ALM-CAN Document 86-2 Filed 05/01/17 Page 2 of 3 PageID #: 2101 State Code Homesite Market Value Total Main Area A (Residential Single Family) Yes $298,083 3,357 sq. ft. Detail # Type Year Built Sq. Ft. 1 MA - Main Area 2002 2,175 2 MA2 - Main Area 2nd Floor 2002 1,182 3 AG - Attached Garage 2002 892 4 CP - Covered Porch/patio 2002 30 5 CP - Covered Porch/patio 2002 90 State Code Homesite Market Value Ag Use Value Land Size A (Residential Single Family) Yes $120,000 n/a n/a Value History Year Improvement Land Market Ag Loss Appraised HS Cap Loss Assessed 2016 $298,083 $120,000 $418,083 $0 $418,083 $20,084 $397,999 2015 $266,817 $95,000 $361,817 $0 $361,817 $0 $361,817 2014 $247,906 $95,000 $342,906 $0 $342,906 $0 $342,906 2013 $221,145 $95,000 $316,145 $0 $316,145 $0 $316,145 2012 $226,940 $95,000 $321,940 $0 $321,940 $0 $321,940 Deed History Deed Date Seller Buyer Instr # Volume/Page 05/03/2016 MORSE GREGORY C FEDERAL NATIONAL MORT ASSN 20160520000623790 12/18/2002 MORSE GREGORY C MORSE GREGORY C 21835 5349/4503 12/18/2002 CAP RESIDENTIAL CONSTRUCTION MORSE GREGORY C 192369 5323/5242 SB 541 – Amends Section 25.027 of the Property Tax Code, effective September 1, 2005 RESTRICTION ON POSTING DETAILED IMPROVEMENT INFORMATION ON INTERNET WEBSITE: Information in appraisal records may not be posted on the Internet if the information is a photograph, sketch, or floor plan of an improvement to real property that is designed primarily for use as a human residence. This section does not apply to an aerial photograph that depicts five or more separately owned buildings. HB 394 – Amends Section 25.027 of the Property Tax Code, effective September 1, 2015 RESTRICTION ON POSTING AGE RELATED INFORMATION ON INTERNET WEBSITE: Information in appraisal records may not be posted on the Internet if the information indicates the age of a property owner, including information indicating that a property owner is 65 years of age or older. Case 4:16-cv-00279-ALM-CAN Document 86-2 Filed 05/01/17 Page 3 of 3 PageID #: 2102 EXHIBIT C Case 4:16-cv-00279-ALM-CAN Document 86-3 Filed 05/01/17 Page 1 of 17 PageID #: 2103 Execution Copy 703759658.4 02935186 NY2-711063 v1 ASSET PURCHASE AGREEMENT between OCWEN LOAN SERVICING, LLC and RESIDENTIAL CAPITAL, LLC, RESIDENTIAL FUNDING COMPANY, LLC, GMAC MORTGAGE, LLC, EXECUTIVE TRUSTEE SERVICES, LLC, ETS OF WASHINGTON, INC., EPRE LLC, GMACM BORROWER LLC and RFC BORROWER LLC dated as of November 2, 2012 12-12020-mg Doc 2246-1 Filed 11/21/12 Entered 11/21/12 08:38:01 Exhibit 1 Pg 1 of 104 Case 4: 6-cv-00279-ALM-CAN Document 55-6 Filed 12/16/16 Page 2 of 7 PageID #: 142586 3 05 0 7 2104 -i- 703759658.4 02935186 NY2-711063 v1 Table of Contents Page ARTICLE I DEFINITIONS AND INTERPRETATION .................................................... 1 Section 1.1 Definitions............................................................................................ 1 Section 1.2 Interpretation ...................................................................................... 29 ARTICLE II PURCHASE AND SALE OF ASSETS ........................................................ 30 Section 2.1 Purchase and Sale of Assets ............................................................... 30 Section 2.2 Assignment of Contracts, Leases and Other Assets ........................... 32 Section 2.3 Excluded Assets ................................................................................. 33 Section 2.4 Post-Closing Asset Deliveries............................................................ 35 Section 2.5 Conveyance of Assets by Affiliate Sellers......................................... 36 Section 2.6 Non-Assignable Purchased Assets; Necessary Consents .................. 36 Section 2.7 Assumption of Certain Liabilities ...................................................... 37 Section 2.8 Retained Liabilities ............................................................................ 37 Section 2.9 Closing ............................................................................................... 37 Section 2.10 Ancillary Agreements ........................................................................ 37 Section 2.11 Deliveries by Purchaser ..................................................................... 38 Section 2.12 Deliveries by Sellers .......................................................................... 39 Section 2.13 Consumer Privacy Matters ................................................................. 39 Section 2.14 “As Is, Where Is” Transaction ........................................................... 39 Section 2.15 Exclusion of Certain Agreements ...................................................... 40 Section 2.16 [RESERVED] ................................................................................... 40 Section 2.17 Indemnity Escrow Agreement ........................................................... 40 ARTICLE III PURCHASE PRICE; ADJUSTMENT; ALLOCATION .............................. 41 Section 3.1 Purchase Price; Payment of Purchase Price ....................................... 41 Section 3.2 Purchase Price Adjustment; Final Payment ....................................... 41 Section 3.3 Allocation of the Purchase Price for Tax Purposes ........................... 43 Section 3.4 Deposit ............................................................................................... 43 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLERS...................... 44 Section 4.1 Organization and Authority ............................................................... 44 Section 4.2 Non-Contravention ............................................................................ 44 Section 4.3 Consents and Approvals .................................................................... 45 Section 4.4 Financial Statements .......................................................................... 45 Section 4.5 Absence of Certain Changes or Events .............................................. 46 Section 4.6 Title to Assets .................................................................................... 46 Section 4.7 Purchased Assets Used in Business ................................................... 46 Section 4.8 Real Property Leases.......................................................................... 46 Section 4.9 Mortgage Servicing Portfolio; Servicing Agreements; the Business ............................................................................................. 47 Section 4.10 Material Contracts .............................................................................. 49 Section 4.11 Compliance with Law, Licensing and Data Security......................... 49 12-12020-mg Doc 2246-1 Filed 11/21/12 Entered 11/21/12 08:38:01 Exhibit 1 Pg 2 of 104 Case 4: 6-cv-00279-ALM-CAN Document 55-6 Filed 12/16/16 Page of 7 PageID #: 142686 3 05 0 7 2105 TABLE OF CONTENTS (continued) Page -ii- 703759658.4 02935186 NY2-711063 v1 Section 4.12 Employee Benefits ............................................................................. 50 Section 4.13 Employees .......................................................................................... 50 Section 4.14 Litigation and Claims ......................................................................... 51 Section 4.15 Intellectual Property ........................................................................... 51 Section 4.16 Brokers, Finders and Financial Advisors ........................................... 53 Section 4.17 Ginnie Mae Loans .............................................................................. 53 Section 4.18 Tax Matters ........................................................................................ 54 Section 4.19 Shared Services Agreement ............................................................... 55 ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER ............... 55 Section 5.1 Organization and Authority ............................................................... 55 Section 5.2 Non-Contravention ............................................................................ 55 Section 5.3 Consents and Approvals .................................................................... 56 Section 5.4 Financing............................................................................................ 56 Section 5.5 Non-reliance ....................................................................................... 56 Section 5.6 Brokers, Finders and Financial Advisors ........................................... 57 ARTICLE VI PRE-CLOSING MATTERS AND OTHER COVENANTS ......................... 57 Section 6.1 Subsequent Actions; Further Assurances........................................... 57 Section 6.2 Third Party Consents.......................................................................... 57 Section 6.3 Access to Information; Interim Financial Information ...................... 58 Section 6.4 Records; Post-Closing Access to Information ................................... 58 Section 6.5 Interim Operations of the Business .................................................... 59 Section 6.6 Servicing Approvals and Licenses ..................................................... 64 Section 6.7 Employee Matters .............................................................................. 64 Section 6.8 Notices of Certain Events .................................................................. 67 Section 6.9 Tax Matters ........................................................................................ 68 Section 6.10 Insurance ............................................................................................ 68 Section 6.11 Mortgage Loan Schedules and Servicing Advance Schedules .......... 69 Section 6.12 Title Documents and Surveys ............................................................ 69 Section 6.13 Schedules and Disclosure Memorandum ........................................... 69 Section 6.14 Bankruptcy Actions ........................................................................... 70 Section 6.15 Participation of Walter Entity ............................................................ 71 Section 6.16 Consent Order and DOJ/AG Settlement ............................................ 71 Section 6.17 Antitrust Clearances and Obligations ................................................ 71 Section 6.18 Post-Closing Amounts Received and Paid ........................................ 73 Section 6.19 Confidentiality ................................................................................... 73 Section 6.20 Real Property Matters and Transition Services ................................. 75 Section 6.21 Required Financial Information ......................................................... 75 Section 6.22 PSA Amendments .............................................................................. 76 Section 6.23 Mortgage Loans Documents .............................................................. 76 Section 6.24 Preparation for Transfer of Certain Purchased Mortgage Servicing ............................................................................................ 76 Section 6.25 Purchaser Payment Cap ..................................................................... 76 Section 6.26 DIP Financing Agreements ................................................................ 77 12-12020-mg Doc 2246-1 Filed 11/21/12 Entered 11/21/12 08:38:01 Exhibit 1 Pg 3 of 104 Case 4: 6-cv-00279-ALM-CAN Document 55-6 Filed 12/16/16 Page 4 of 7 PageID #: 142786 3 05 0 7 2106 TABLE OF CONTENTS (continued) Page -iii- 703759658.4 02935186 NY2-711063 v1 Section 6.27 [RESERVED] .................................................................................... 77 Section 6.28 Separation Services ............................................................................ 77 Section 6.29 Repurchase ......................................................................................... 77 Section 6.30 Rebranding ......................................................................................... 77 ARTICLE VII BANKRUPTCY COURT MATTERS .......................................................... 78 Section 7.1 Competing Transaction ...................................................................... 78 Section 7.2 Bankruptcy Court Filings ................................................................... 78 ARTICLE VIII CONDITIONS ............................................................................................... 79 Section 8.1 Conditions to Obligations of Purchaser and Sellers .......................... 79 Section 8.2 Conditions to Obligations of Sellers .................................................. 80 Section 8.3 Conditions to Obligations of Purchaser ............................................. 80 ARTICLE IX TRANSFER OF SERVICING ....................................................................... 82 Section 9.1 Transfer of Purchased Mortgage Servicing and MSRs ...................... 82 Section 9.2 Costs of Transfer ................................................................................ 82 ARTICLE X TERMINATION AND SURVIVAL ............................................................. 83 Section 10.1 Termination ........................................................................................ 83 Section 10.2 Procedure and Effect of Termination ................................................. 85 ARTICLE XI INDEMNIFICATION.................................................................................... 85 Section 11.1 Indemnification by Sellers ................................................................. 85 Section 11.2 Notice of Claims ................................................................................ 86 Section 11.3 Third Person Claims .......................................................................... 87 Section 11.4 Claims Against the Indemnity Escrowed Funds ................................ 88 Section 11.5 Adjustment to Purchase Price ............................................................ 88 Section 11.6 Survival .............................................................................................. 88 Section 11.7 Exclusive Remedy ............................................................................. 88 ARTICLE XII MISCELLANEOUS ...................................................................................... 89 Section 12.1 Expenses ............................................................................................ 89 Section 12.2 Amendment; Waiver .......................................................................... 89 Section 12.3 Notices ............................................................................................... 89 Section 12.4 Waivers .............................................................................................. 90 Section 12.5 Counterparts ....................................................................................... 91 Section 12.6 Applicable Law; WAIVER OF JURY TRIAL; Venue and Retention of Jurisdiction .................................................................... 91 Section 12.7 Assignment ........................................................................................ 91 Section 12.8 No Third-Party Beneficiaries ............................................................. 92 Section 12.9 Public Announcements ...................................................................... 92 Section 12.10 Severability ........................................................................................ 92 Section 12.11 Matters Related to Purchaser as Next Highest Bidder; Specific Performance ....................................................................................... 92 Section 12.12 Waiver of Bulk Transfer Laws .......................................................... 93 12-12020-mg Doc 2246-1 Filed 11/21/12 Entered 11/21/12 08:38:01 Exhibit 1 Pg 4 of 104 Case 4: 6-cv-00279-ALM-CAN Document 55-6 Filed 12/16/16 Page 5 of 7 PageID #: 142886 3 05 0 7 2107 TABLE OF CONTENTS (continued) Page -iv- 703759658.4 02935186 NY2-711063 v1 Section 12.13 Personal Liability ............................................................................... 93 Section 12.14 Entire Agreement ............................................................................... 93 12-12020-mg Doc 2246-1 Filed 11/21/12 Entered 11/21/12 08:38:01 Exhibit 1 Pg 5 of 104 Case 4: 6-cv-00279-ALM-CAN Document 55-6 Filed 12/16/16 Page 6 of 7 PageID #: 142986 3 05 0 7 2108 -v- 703759658.4 02935186 NY2-711063 v1 SCHEDULES Schedule A [Reserved] Schedule B Agency Special Requirements Schedule C Schedule of Purchased Assets and Assumed Liabilities Schedule D DIP Financing Agreements Schedule E Private Investor Servicing Agreements and Servicing Agreements for Other Serviced Loans Schedule F Agency Contracts Schedule G Knowledge of Sellers Schedule H Owned Real Property and Leased Real Property Schedule I Other Serviced Loans Schedule J [Reserved] Schedule K Computer Equipment Located at Real Property Schedule L-1 Other Purchased Assets Schedule L-2 Credits and Other Expenses Schedule M Ginnie Mae Loan Criteria Schedule N Owned Transferred IP Schedule O Other Assigned Contracts Schedule P Material Agreements Schedule Q Excluded Contracts and Assets Schedule R Material Employee Benefit Plans Schedule S Business Licenses Schedule T Deemed Eligible Servicing Agreements Schedule U ETS Contracts Schedule 1.1 Agency Timelines Schedule 2.15(b) Excludable Servicing Agreements Schedule 3.1(a) Purchase Price Schedule 4.3 Seller Consents and Approvals Schedule 4.9(a) Mortgage Loan Data Fields Schedule 4.9(c) Servicing Advances Data Fields Schedule 5.3 Purchaser Consents and Approvals Schedule 8.3(vi) Required Seller Consents Schedule 8.3(viii) Necessary Purchaser Business Licenses EXHIBITS Exhibit 1 [RESERVED] Exhibit 2 Deposit Escrow Agreement Exhibit 3 Sale Approval Order Exhibit 4 Sale Procedures Exhibit 5 Sale Procedures Order Exhibit 6 Form of GM Transition License Exhibit 7 Preliminary Form of Transition Services Agreement between AFI and Purchaser Exhibit 8 Shared Services Agreement Exhibit 9 Form of Mutual Release Exhibit 10 Form of Estate Subservicing Agreement 12-12020-mg Doc 2246-1 Filed 11/21/12 Entered 11/21/12 08:38:01 Exhibit 1 Pg 6 of 104 Case 4: 6-cv-00279-ALM-CAN Document 55-6 Filed 12/16/16 Page 7 of 7 PageID #: 143086 3 05 0 7 2109 -vi- 703759658.4 02935186 NY2-711063 v1 Exhibit 11 Form of Estate Servicing Agreement DISCLOSURE MEMORANDUM 12-12020-mg Doc 2246-1 Filed 11/21/12 Entered 11/21/12 08:38:01 Exhibit 1 Pg 7 of 104 Case 4: 6-cv-00279-ALM-CAN Document 55-6 Filed 12/16/16 Page 8 of 7 PageID #: 143186 3 05 0 7 2110 1 703759658.4 02935186 NY2-711063 v1 ASSET PURCHASE AGREEMENT This Asset Purchase Agreement, dated as of November 2, 2012, entered into between Ocwen Loan Servicing, LLC, a Delaware limited liability company (“Purchaser”), and Residential Capital, LLC (“ResCap”), Residential Funding Company, LLC (“RFC”), GMAC Mortgage, LLC (“GMAC Mortgage”), each of which is a Delaware limited liability company, Executive Trustee Services, LLC, a Delaware limited liability company (“ETS LLC”), ETS of Washington, Inc., a Washington corporation (“ETS WA” and together with ETS LLC, “ETS”), EPRE LLC, a Delaware limited liability company (“EPRE”), GMACM Borrower LLC, a Delaware limited liability company (“GMACM Borrower”), and RFC Borrower LLC, a Delaware limited liability company (“RFC Borrower” and together with ResCap, RFC, GMAC Mortgage, ETS, EPRE and GMACM Borrower, the “Sellers”). WHEREAS, Sellers are engaged in the Business (as hereinafter defined); WHEREAS, Sellers, together with other Affiliates (as hereinafter defined), filed voluntary petitions (“Petitions”) for relief (collectively, the “Bankruptcy Case”) under Chapter 11 of Title 11, U.S.C. §§ 101, et seq., as amended (the “Bankruptcy Code”), in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) on May 14, 2012 (the “Petition Date”); WHEREAS, upon the terms and subject to the conditions set forth in this Agreement, and as authorized under sections 105, 363 and 365 of the Bankruptcy Code, Sellers wish to sell to Purchaser, and Purchaser (or Purchaser’s assignee or assignees pursuant to Section 12.7 hereof) wishes to purchase from Sellers, the Purchased Assets (as hereinafter defined), and Purchaser is willing to assume all of the Assumed Liabilities (as hereinafter defined); and WHEREAS, Sellers, as debtors and debtors-in-possession, will continue in the possession of their respective assets and in the management of the Business pursuant to sections 1107 and 1108 of the Bankruptcy Code. NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows: ARTICLE I DEFINITIONS AND INTERPRETATION Section 1.1 Definitions. As used in this Agreement, the following terms have the meanings set forth below: “Adjustment Amount” has the meaning specified in Section 3.2(b). “Adjustment Report” has the meaning specified in Section 3.2(d). 12-12020-mg Doc 2246-1 Filed 11/21/12 Entered 11/21/12 08:38:01 Exhibit 1 Pg 8 of 104 Case 4: 6-cv-00279-ALM-CAN Document 55-6 Filed 12/16/16 Page 9 of 7 PageID #: 143286 3 05 0 7 2111 15 703759658.4 02935186 NY2-711063 v1 “Knowledge of Sellers” concerning a particular subject, area or aspect of the Business, the affairs of any Seller, the Purchased Assets or the Assumed Liabilities, means the actual knowledge of any individual listed on Schedule G hereto. “Law” means any law, statute, ordinance, rule, regulation, code, Order, Permit, or other legal requirement enacted, issued, promulgated, enforced, or entered by a Government Entity. “Lease” means each lease or other Contract pursuant to which a Seller leases any Real Property or personal property, either as lessor or lessee. “Leased Real Property” means all real property, including leasehold improvements, that are the subject of the Real Property Leases. “Liabilities” means any and all Indebtedness, liabilities, costs, Losses, commitments and obligations of any kind, whether fixed, contingent or absolute, matured or unmatured, liquidated or unliquidated, accrued or not accrued, asserted or not asserted, known or unknown, determined, determinable or otherwise, whenever or however arising (including whether arising out of any Contract or tort based on negligence or strict liability), and whether or not the same would be required by GAAP to be reflected in financial statements or disclosed in the notes thereto. “Licensed Transferred IP” has the meaning specified in the definition of “Transferred Intellectual Property.” “Lien” means any lien, charge, pledge, deed of trust, right of first refusal, security interest, conditional sale agreement or other title retention agreement, lease, mortgage, option, proxy, hypothecation, voting trust agreement, transfer restriction, easement, servitude, encroachment, or other encumbrance (including the filing of, or agreement to give, any financing statement under the Uniform Commercial Code of any jurisdiction). “Loss” or “Losses” means any and all damages, losses, actions, proceedings, causes of action, Liabilities, claims, Liens, penalties, fines, demands, Taxes, assessments, awards, judgments, settlements, costs and expenses, including (i) court costs and similar costs of litigation; (ii) reasonable attorneys’ and consultants’ fees, including those incurred in connection with (a) investigating or attempting to avoid the matter giving rise to the Losses or (b) successfully establishing a valid right to indemnification for Losses; and (iii) interest awarded as part of a judgment or settlement, if any, but in any event “Loss” or “Losses” shall exclude punitive damages claimed, incurred or suffered by any Person (which exclusion does not include any such damages for which such Person is liable to a third party as a direct, out-of-pocket cost of such Person). “Material Adverse Effect” means any condition, circumstance, event, state of facts, change or effect that is materially adverse to the Business or the Purchased Assets or to Sellers’ ability to effect the transactions contemplated herein or to perform their obligations under this Agreement and the Ancillary Agreements; provided that, for purposes of this Agreement, a Material Adverse Effect shall not include any condition, circumstance, event, state of facts, change or effect to the Business or the Purchased Assets resulting from (i) conditions, circumstances, events or changes to the housing or mortgage market or the mortgage servicing 12-12020-mg Doc 2246-1 Filed 11/21/12 Entered 11/21/12 08:38:01 Exhibit 1 Pg 22 of 104 Case 4:16-cv-00279-ALM-CAN Document 55-6 Fil d 12/ 6/ 6 Page 1 of 17 PageID #: 1433 86 3 05 01 7 2112 20 703759658.4 02935186 NY2-711063 v1 Investor or a Seller and serviced by a Seller (as master servicer, servicer or otherwise), the servicing of which is intended to be transferred hereunder, as set forth on Schedule I hereto. “Owned Real Property” means the U.S. real property that is owned by a Seller, as set forth on Schedule H hereto, and that is being sold, conveyed and transferred to Purchaser pursuant to this Agreement. Owned Real Property does not include any REO Property. “Owned Transferred IP” has the meaning specified in the definition of “Transferred Intellectual Property.” “Permits” means permits, concessions, grants, franchises, licenses, variances, exemptions, exceptions, clearances, registrations, qualifications, filings and other authorizations and approvals required or issued by any Government Entity and Related to the Business. “Permitted Liens” means (i) with respect to Owned Real Property, all defects, exceptions, restrictions, easements, rights of way and encumbrances disclosed in policies of title insurance provided to Purchaser prior to the date of this Agreement or disclosed in title search reports made available by Sellers to Purchaser prior to the date of this Agreement; (ii) statutory liens for current Taxes, assessments or other governmental charges not yet due and payable or the amount or validity of which is being contested in good faith by appropriate proceedings or the making of appropriate demands, notices or filings; provided that an appropriate reserve is established therefor against the carrying amount of the related assets; (iii) mechanics’, carriers’, workers’, repairers’ and similar Liens arising or incurred in the Ordinary Course of Business and the amount or validity of which is being contested in good faith by appropriate proceedings or the making of appropriate demands, notices or filings; provided that an appropriate reserve is established therefor against the carrying amount of the related assets; (iv) with respect to Owned Real Property, minor survey exceptions, reciprocal easement agreements and other customary encumbrances on title to real property; (v) with respect to Leased Real Property, statutory landlord’s Liens under leases to which any Seller is a party; (vi) with respect to Real Property, requirements and restrictions of zoning, building and other similar Laws that are not violated in any material respect by the current use or occupancy of the Real Property or the activities conducted thereon as of the date of this Agreement; (vii) rights granted to any licensee of any Transferred Intellectual Property in the Ordinary Course of Business; (viii) Liens on equipment registered under the Uniform Commercial Code as adopted in any applicable state or similar legislation in other jurisdictions by any lessor or licensor of assets to a Seller (in respect of the Business) or in respect of the purchase price therefor (it being understood that all such Liens shall be discharged or released at the Closing); and (ix) Liens that will be and are discharged or released either prior to, or simultaneously with the Closing; provided that, except in the case of clause (ii), such exceptions (a) do not render title to the property encumbered thereby unmarketable and (b) do not, individually or in the aggregate, materially detract from the value or use of such property for its current purposes. “Person” means a natural person, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Government Entity or other entity or organization. “Petition Date” has the meaning specified in the preamble. 12-12020-mg Doc 2246-1 Filed 11/21/12 Entered 11/21/12 08:38:01 Exhibit 1 Pg 27 of 104 Case 4:16-cv-00279-ALM-CAN Document 55-6 Fil d 12/ 6/ 6 Page 11 of 17 PageID #: 1434 86 3 05 01 7 2113 31 703759658.4 02935186 NY2-711063 v1 shall be construed as if it is drafted by all the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of authorship of any of the provisions of this Agreement. ARTICLE II PURCHASE AND SALE OF ASSETS Section 2.1 Purchase and Sale of Assets. On the terms and subject to the conditions set forth herein, at the Closing, Sellers shall sell, convey, transfer, assign and deliver (or cause to be sold, conveyed, transferred, assigned and delivered) to Purchaser, and Purchaser shall purchase from Sellers, all of Sellers’ right, title and interest in, to and under the following assets as they exist on the Closing Date (collectively, the “Purchased Assets”), whether tangible or intangible, real, personal or mixed, Related to the Business, in each case free and clear of all Claims and Liens except Permitted Liens, as approved for sale, transfer and assignment pursuant to the Sale Approval Order: (a) the Purchased Mortgage Servicing and rights to receive Servicing Compensation related thereto, including Servicing Compensation that is accrued and unpaid as of the Closing Date; (b) except as provided in Section 2.15, the Servicing Advances outstanding as of the Closing Date; (c) subject to Schedule M, the Ginnie Mae Loans; (d) the Owned Transferred IP and Licensed Transferred IP; (e) the Books and Records; (f) copies of all Tax Returns and related books, records and workpapers filed by or on behalf of any REMIC as to which a Seller is REMIC Administrator (and the duties of which in that capacity the Purchaser will assume), together with all information technology or software in Sellers’ possession related to the performance of the duties of the REMIC Administrator, including any such information technology or software used to assemble or supply information needed to be provided to any third-party service provider engaged by the REMIC Administrator to perform any or all of its duties on its behalf; (g) all REMIC Residual Interests representing a De Minimis Interest in the residual interests of the related REMIC and required to be held by Purchaser as the REMIC Administrator of such REMIC; (h) the Fixtures and Equipment; (i) the Transferred IT Assets; 12-12020-mg Doc 2246-1 Filed 11/21/12 Entered 11/21/12 08:38:01 Exhibit 1 Pg 38 of 104 Case 4:16-cv-00279-ALM-CAN Document 55-6 Fil d 12/ 6/ 6 Page 12 of 17 PageID #: 1435 86 3 05 01 7 2114 32 703759658.4 02935186 NY2-711063 v1 (j) the Owned Real Property, including, to the extent transferable, all easements, Government Authorizations and other rights and interests appurtenant thereto; (k) certain other assets listed on Schedule L-1; (l) credits, prepaid expenses, deferred charges, security deposits, prepaid items and duties to the extent related to a Purchased Asset or an Assumed Liability; Schedule L-2 sets forth all such items for which the amount is at least $100,000 as of the date of this Agreement; (m) the causes of action, lawsuits, judgments, refunds, choses in action, rights of recovery, rights of set-off, rights of recoupment, demands and any other rights or Claims related to the Purchased Assets, the Assumed Liabilities and any foreclosure, recovery and other loss mitigation activities related to the Business, and, with respect to the Transferred Employees and any vendors (other than AFI and its Affiliates) with whom any of the Sellers have conducted business in the year prior to the Closing and with whom Purchaser will continue to engage in connection with the operation of the Business following the Closing (including, for the avoidance of doubt, any vendor that is a party to an Assumed Contract), all preference or avoidance claims and actions of any of the Sellers related thereto, including any such claims and actions arising under sections 544, 547, 548, 549, and 550 of the Bankruptcy Code (provided that, for the avoidance of doubt, Sellers shall be entitled to participate in the defense of any counterclaim that does not constitute an Assumed Liability) (the “Transferred Rights and Claims”); (n) all rights of and benefits accruing under the Assumed Contracts and the Purchased Assets; (o) all telephone or facsimile numbers used by Sellers in connection with the Business, which, for the sake of clarity, does not include such numbers for Sellers’ business locations or individuals that are not transferring to Purchaser pursuant to this Agreement; (p) to the extent permitted by Law, all Permits held by Sellers to the extent primarily Related to the Business or the Purchased Assets; (q) all signage, marketing materials, art and collectables relating to the Business; (r) all rights to receive mail and other communications addressed to Sellers that pertains to the Business or the Purchased Assets, including any mail and communications from Serviced Mortgagors, Investors, ETS Customers, trustees, customers, suppliers, distributors and their respective representatives; (s) all client lists, customer lists, supplier lists, mailing lists, do not call lists and other data Related to the Business, including service and warranty records, operating guides and manuals, studies, and correspondence (electronic or otherwise); 12-12020-mg Doc 2246-1 Filed 11/21/12 Entered 11/21/12 08:38:01 Exhibit 1 Pg 39 of 104 Case 4:16-cv-00279-ALM-CAN Document 55-6 Fil d 12/ 6/ 6 Page 13 of 17 PageID #: 1436 86 3 05 01 7 2115 33 703759658.4 02935186 NY2-711063 v1 (t) to the extent transferable, all rights under insurance policies and insurance proceeds directly relating to Mortgage Loans serviced pursuant to any Servicing Agreement, all bank accounts, other accounts, safe deposit boxes, lock boxes and safes Related to the Business, and the responsibility for all cash and cash equivalents held in or required to be held in such accounts as identified in clause (i) of Section 2.3(a) (exclusive of the parenthetical reference to investment income); (u) to the extent transferable, all guaranties, warranties, indemnities and similar rights in favor of any Seller or any Affiliate Seller to the extent Related to the Business or related to any Purchased Asset or Assumed Liability; and (v) the goodwill and other intangible assets Related to the Business or related to the Purchased Assets. Section 2.2 Assignment of Contracts, Leases and Other Assets. On the terms and subject to the conditions set forth in this Agreement and any applicable Ancillary Agreement, each Seller will assign and transfer to Purchaser, effective as of the Closing Date, all of Sellers’ right, title and interest in, to and under, and Purchaser will assume, the following Contracts, as approved for sale, transfer and assignment pursuant to the Sale Approval Order (all of the following collectively are referred to herein as the “Assumed Contracts” and included in the term “Purchased Assets” as used herein): (a) the Real Property Leases; (b) except as provided in Section 2.15, the Servicing Agreements; (c) the Intellectual Property Licenses; (d) the Software Contracts; (e) other Contracts to which any Seller is a party and that are Related to the Business, as set forth on Schedule O, but excluding (i) any Plan to the extent not assumed by Purchaser pursuant to Section 6.7 and (ii) the Consent Order and the DOJ/AG Settlement Agreement; and (f) Contracts that are solely Related to the Business entered into or made by any Seller in the Ordinary Course of Business after the date of this Agreement and before the Closing Date in accordance with the terms of this Agreement (provided that Sellers shall have furnished Purchaser a true, correct and complete copy of each such Contract promptly following the execution and delivery thereof). Section 2.3 Excluded Assets. Notwithstanding anything herein to the contrary, Sellers will not sell, assign, convey, transfer or deliver to Purchaser, and Purchaser will not purchase, acquire or assume or take assignment or delivery of, any and all assets, Contracts or rights that are not expressly Purchased Assets or Assumed Contracts, whether tangible, real, personal or mixed (collectively, the “Excluded Assets”). For the avoidance of doubt, Excluded Assets include the following: 12-12020-mg Doc 2246-1 Filed 11/21/12 Entered 11/21/12 08:38:01 Exhibit 1 Pg 40 of 104 Case 4:16-cv-00279-ALM-CAN Document 55-6 Fil d 12/ 6/ 6 Page 14 of 17 PageID #: 1437 86 3 05 01 7 2116 12-12020-mg Doc 2246-1 Filed 11/21/12 Entered 11/21/12 08:38:01 Exhibit 1 Pg 102 of 104 Case 4:16-cv-00279-ALM-CAN Document 55-6 Fil d 12/ 6/ 6 Page 15 of 17 PageID #: 1438 86 3 05 01 7 2117 12-12020-mg Doc 2246-1 Filed 11/21/12 Entered 11/21/12 08:38:01 Exhibit 1 Pg 103 of 104 Case 4:16-cv-00279-ALM-CAN Document 55-6 Fil d 12/ 6/ 6 Page 16 of 17 PageID #: 1439 86 3 05 01 7 2118 12-12020-mg Doc 2246-1 Filed 11/21/12 Entered 11/21/12 08:38:01 Exhibit 1 Pg 104 of 104 Case 4:16-cv-00279-ALM-CAN Document 55-6 Fil d 12/ 6/ 6 Page 17 of 17 PageID #: 1 40 86 3 05 01 7 2119 SOLO PAGE AUS:0106420/00097:693591v1 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS SHERMAN DIVISION GREGORY C. MORSE, § § Plaintiff, § § vs. § § CIVIL ACTION NO. 4:16-cv-00279 CODILIS & STARWIARSKI, P.C., ET AL., § § § Defendants. § ORDER GRANTING DEFENDANT DITECH FINANCIAL LLC’S MOTION FOR SUMMARY JUDGMENT ON THIS DAY, the Court considered the Motion for Summary Judgment (the “Motion”) filed by Defendant Ditech Financial LLC (“Ditech”). Upon consideration of the Motion, any responses or replies thereto, the competent evidence, the pleadings, and the argument of counsel and the parties, if any, the Court finds that the Motion should be, and hereby is, GRANTED. It is therefore ORDERED that Plaintiff Gregory C. Morse (“Plaintiff”) TAKE NOTHING in the Cause against Ditech. It is further ORDERED that all costs are taxed against Plaintiff. This order finally disposes of all claims by Plaintiff against Ditech. Case 4:16-cv-00279-ALM-CAN Document 86-4 Filed 05/01/17 Page 1 of 1 PageID #: 2120