Locke Lord Win Affirmed In Foreclosure Fraud Suit
Law360, Dallas (April 30, 2015, 8:40 PM ET) — A Texas appellate court on Thursday said a trial judge properly dismissed wrongful foreclosure claims launched against Locke Lord LLP, Mortgage Electronic Registration Systems Inc. and subsidiaries of Deutsche Bank AG and Morgan Stanley.
The Third Court of Appeals in Austin affirmed the summary judgment dismissal of plaintiff Tony Davis’ claims that the mortgage companies lacked standing to foreclose on his property because his loan and deed of trust were fraudulent and his warranty deed was void. The court agreed with Locke Lord and the mortgage companies that Davis hadn’t proved his claims for wrongful foreclosure, lack of due process, fraud, civil conspiracy and quiet title.
The court said the due process claim was properly dismissed because none of the defendants is a state actor, but instead a law firm, corporations and a privately held company. It held Davis had presented no argument supporting his claim the defendants committed fraud by making misrepresentations that induced him to enter a fraudulent mortgage. And it said because Davis retained possession of the property, he had no compensable damages for his wrongful foreclosure or civil conspiracy claims.
“Although Davis’s petition alleges that the defendants made an agreement to perform a ‘sham foreclosure’ that proximately caused him injury, the element of damages is lacking,” the court said in the opinion. “As previously discussed, the defendants proved that Davis retained possession of the property in question and thus that the rescinded foreclosure caused him no compensable damage. Because the defendants proved the rescinded foreclosure caused Davis no compensable damage, an alleged agreement to perform that foreclosure cannot be the basis for an actionable civil conspiracy claim.”
Davis had alleged he was misled into thinking he had entered into a mortgage with First National Bank of Arizona, and contended the warranty deed for his property was fraudulent because it lacked a legal description of the property, because it was improperly notarized and because it had allegedly been “robosigned.”
According to court records, Davis took out a $512,050 mortgage in 2007 and defaulted on his payment obligations in 2008. In 2009, the defendants initiated foreclosure proceedings and sold the property Sept. 7, 2010. But Davis had filed for Chapter 11 bankruptcy on Sept. 1, and the foreclosure was rescinded.
Davis filed suit against the mortgage companies in October 2010, alleging wrongful foreclosure, fraud, civil conspiracy, lack of due process and seeking to quiet title to the property. He added Locke Lord as a party seven months after the firm had been representing the defendants. The case was dismissed on the defendants’ motion for summary judgment in May 2012.
During the court of the litigation, Davis had accused the trial judge of bias because Locke Lord had made campaign donations and because the judge had a mortgage held by one of the defendant companies.
The mortgage companies and Locke Lord had told the court in briefing Davis “has engaged in a pattern of bringing meritless claims and abusing judicial resources.”
Davis couldn’t be reached for comment Thursday. A Locke Lord spokesman did not immediately respond to a request for comment on the ruling.
Davis represented himself.
The defendants were represented by David Foster, Lauren Fincher, Kirsten Castaneda and Robert Mowrey of Locke Lord LLP.
The case is Davis v. Deutsche Bank National Trust et al., case number 03-12-00768-CV, in the Texas Court of Appeals for the Third District.
–Editing by CHris Yates.