U.S. Bank National Association v. Bates ( 2023 )

Case: 21-11251 Document: 00516611530 Page: 1 Date Filed: 01/16/2023
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
January 16, 2023
No. 21-11251 Lyle W. Cayce
Clerk
U.S. Bank National Association, as Trustee, successor
in interest to Bank of America, National Association,
as Trustee, successor by merger to LaSalle Bank
National Association, as Trustee, for Residential
Asset Mortgage Products, INC., Mortgage Asset-
Backed Pass-Through Certificates, Series 2007-R,
Plaintiff—Appellee,
versus
Kevin G. Bates; Regina Bates,
Defendants—Appellants.
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 4:20-cv-965
Before Jones, Southwick, and Ho, Circuit Judges.
Per Curiam:*
This appeal arises out of a mortgage foreclosure suit, in which the
Plaintiff creditor successfully sought summary judgement against a
*
This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 21-11251 Document: 00516611530 Page: 2 Date Filed: 01/16/2023
No. 21-11251
Defendant debtor. Because the appeal has been rendered moot by Plaintiff’s
sale of the property in question, we dismiss the appeal.
I.
On or around October 25, 2000, Defendant Kevin Bates obtained a
mortgage loan by executing a Texas Home Equity Adjustable Rate Note. The
Note was secured by a Texas Home Equity Security Instrument, signed by
both Defendants, which encumbered the property located at 1012 South
Hollow Drive, Southlake, Texas 76092 (“the Property”).
On July 24, 2020, Plaintiff’s mortgage servicer notified Defendants
that they were in default. Plaintiff filed suit against Defendants seeking
judicial foreclosure. Plaintiff sought and the district court granted summary
judgment, which Defendants now appeal.
After noticing this appeal, Defendants filed a motion in the district
court asking the court to set a bond to stay the upcoming scheduled sale of
the Property by the Plaintiff. See Fed. R. Civ. P. 62(b). The district court
issued an order requiring Defendants to post a $387,000 bond—worth about
one-third of the outstanding debt—to obtain a stay of the court’s judgment.
Defendants did not post the bond. Subsequently, Defendants sought an
emergency stay in this court, which we denied. See Fed. R. App. Proc. 8.
Following these proceedings, Plaintiff scheduled a foreclosure sale of
the Property for June 7, 2022. That morning, Defendants filed a Notice of
Lis Pendens. Plaintiff subsequently conducted the sale and sold the property
to a third party.
Plaintiff has now filed a motion in this court to dismiss the appeal as
moot because of the sale, which Defendants oppose. In its reply, Plaintiff also
moved to cancel or expunge the lis pendens. Defendants moved for leave to
file a sur-reply to Plaintiff’s motion, which Plaintiff opposes.
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No. 21-11251
II.
“Ordinarily, an appeal will be moot when the property underlying the
dispute has been sold at a foreclosure sale because this court cannot fashion
adequate relief, i.e., cannot reverse the transaction.” Christopher Vill., Ltd.
P’ship v. Retsinas, 190 F.3d 310, 314 (5th Cir. 1999). “If the debtor fails to
obtain a stay, and if the property is sold in the interim, the . . . court will
ordinarily be unable to grant any relief” and “the appeal will be moot.”
Matter of Sullivan Cent. Plaza, I, Ltd., 914 F.2d 731, 733 (5th Cir. 1990), on
reh’g sub nom. Matter of Sullivan Cent. Plaza I, Ltd., 935 F.2d 723 (5th Cir.
1991). Both sides acknowledge this baseline rule.
Nevertheless, Defendants contend that their lis pendens filing means
that relief may be granted with regards to the subsequent purchaser’s title to
the Property—and that the appeal is not moot. But by its plain terms, the lis
pendens statute makes clear that the procedure is available only to “a party
to the action who is seeking affirmative relief.” Tex. Prop. Code §
12.007(a). See also In re Jamail, 156 S.W.3d 104, 107 (Tex. App. 2004);
Brown v. Martin, 2011 WL 3366359, at *2 (Tex. App. Aug. 4, 2011). Here,
neither the Defendants’ original Answer nor their operative First Amended
Answer offer any basis on which they seek affirmative relief in this suit.
Consequently, the lis pendens filed by Defendants is “void.” Helmsley-Spear
of Texas, Inc. v. Blanton, 699 S.W.2d 643, 645 (Tex. App. 1985). And
“[w]hen a lis pendens is not authorized under Texas law, the court need not
follow the procedures prescribed by [the statute] to cancel it.” Matter of
Texas Extrusion Corp., 844 F.2d 1142, 1153 (5th Cir. 1988).
III.
We grant Plaintiff’s motion to dismiss the appeal as moot. We also
grant Plaintiff’s motion to cancel the lis pendens. We deny Defendant’s
motion for leave to file a sur-reply.
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