                         COURT OF APPEALS
                          SECOND DISTRICT OF TEXAS
                               FORT WORTH

                              NO. 02-13-00039-CV


BROOKE A. WEEKS AND CANDI                                           APPELLANTS
WEEKS

                                        V.

BANK OF AMERICA, N.A. F/K/A                                            APPELLEE
BAC HOME LOANS SERVICING,
L.P. F/K/A COUNTRYWIDE HOME
LOANS SERVICING, LP


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           FROM THE 271ST DISTRICT COURT OF WISE COUNTY

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                         MEMORANDUM OPINION 1

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      This is an appeal from a summary judgment for appellee Bank of America,

N.A. 2 in a suit to recover amounts due on a real property note and for foreclosure




      1
       See Tex. R. App. P. 47.4.
of the deed of trust securing the note.    In one issue that contains several

subissues, appellants Brooke A. Weeks and Candi Weeks contend that the trial

court erred by granting the summary judgment. We affirm.

                              Background Facts

      In 2004, Brooke purchased real property in Wise County and received a

warranty deed, which included a vendor’s lien in favor of GreenPoint Mortgage

Funding, Inc., from whom he had received a loan to purchase the property.

Brooke executed a note payable to GreenPoint, and Brooke and Candi jointly

executed a deed of trust naming GreenPoint as the lender and designating

Mortgage Electronic Registration Systems, Inc. (MERS) as GreenPoint’s

nominee and the beneficiary. The deed of trust was recorded in Wise County.

      Appellants admit they stopped making payments on the note in 2008 and

have not made any payments since then. In 2008 and 2009, they recorded

several documents in the Wise County property records purporting to discharge

MERS as a beneficiary under the deed of trust, including a quitclaim deed, a

special warranty deed, a “Release of Trust Deed,” and two UCC financing

statements. Appellants concede that these documents were ineffective. 3



      2
      Bank of America, N.A. is the successor-in-interest by merger to BAC
Home Loans Servicing, LP, which was formerly known as Countrywide Home
Loans Servicing, LP.
      3
      Appellants have not challenged the parts of the summary judgment
expunging these documents.


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      In September 2010, MERS filed a document in the Wise County property

records stating that it had assigned the note and deed of trust to BAC as of

July 23, 2010. The document, which was signed by MERS’s assistant secretary,

Stephen C. Porter, states, “[F]or value received, Holder of the Note and Deed of

Trust does hereby evidence and memorialize its transfer and assignment of the

Note and Deed of Trust to Assignee on the date of assignment indicated above.”

      A month later, BAC sued appellants seeking (1) a declaratory judgment

that the note and deed of trust created a valid, unreleased lien on the property,

(2) a declaratory judgment expunging all documents “published” by appellants

that “putatively [a]ffect, encumber or cloud” its interest in the property, and (3) a

nonjudicial foreclosure, or in the alternative, a judicial foreclosure.

      In September 2012, appellee filed a traditional motion for summary

judgment. In the motion, appellee contended that it was the holder of the note,

that it had been assigned the deed of trust, and that appellants had engaged in a

“scheme” to eliminate its lien against the property by recording false documents.

Appellee attached to its motion an affidavit from Jodi Zook, an assistant vice

president with Bank of America. Zook averred that Bank of America had merged

with BAC in 2011 and was therefore the lawful holder of the note and the

beneficiary of the deed of trust. A copy of the certificate of merger filed with the

Texas Secretary of State is attached to the motion.           Zook also averred that

appellants had not made any payments on the loan since August 1, 2008 and

that as of February 17, 2012, they owed $427,874.86 on the note.


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      Appellants filed a pro se response to appellee’s motion, in which they

argued that appellee did not have standing to enforce the note and deed of trust

because it had not shown it was a holder in due course. They also contended

that as a result of GreenPoint’s securitizing the loan the note and deed of trust

had been split and could no longer be enforced. Appellants further argued that

appellee had not produced an original, “wet ink” note, that the blank endorsement

on the note is invalid, that MERS is not a valid agent of GreenPoint and could not

validly assign the note and deed of trust, and that the only way appellee could

prove a proper chain of title is to produce GreenPoint’s pooling and security

agreement by which it initially securitized the debt.

      Appellants attached an affidavit from Joseph Esquivel, who averred that he

is   “experienced    in   Securitization    Analysis,”    that   he   researches     “the

Corporate/Trust Documents which are officially filed with the Securities and

Exchange Commission,” and that he uses licensed software to “see each Note

that is held by [a] ‘named Trust-Entity’ . . . and . . . its current status in real time.”

He also stated that his experience is based on “many hours of study[,] research[,]

and formal training.” Esquivel averred that GreenPoint had sold the “intangible

payment stream” from the loan as part of a securitized pool soon after it was

executed, that this transfer “stripped” the note and deed of trust from the

intangible payment stream and from each other rendering them unenforceable

together, that the note was not properly endorsed to the purchaser of the

securitized loan and thus could not have been validly assigned to appellee by


                                            4
MERS, and that the note and deed of trust are now a nullity and cannot be

enforced against appellants.

      The trial court granted appellee’s motion for summary judgment.             The

judgment includes a declaration that appellee has “a valid and subsisting lien”

against the property and additional declarations purging and expunging the

Release of Trust deed, quitclaim deed, financing statements, and “any other

instrument purporting to cloud title to the Property now filed or in the future” in the

“Official Records of Wise County.”      The judgment also ordered that appellee

could enforce the deed of trust by nonjudicial foreclosure in accordance with

section 51.002 of the Texas Property Code.

                            Propriety of Summary Judgment

      Appellants raise six subissues in their single issue challenging the

propriety of the summary judgment.

Standard of Review

      A plaintiff is entitled to summary judgment on a cause of action if it

conclusively proves all essential elements of the claim. See Tex. R. Civ. P.

166a(a), (c); MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex. 1986). We review a

summary judgment de novo. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860,

862 (Tex. 2010). We consider the evidence presented in the light most favorable

to the nonmovant, crediting evidence favorable to the nonmovant if reasonable

jurors could and disregarding evidence contrary to the nonmovant unless

reasonable jurors could not.      Mann Frankfort Stein & Lipp Advisors, Inc. v.


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Fielding, 289 S.W.3d 844, 848 (Tex. 2009).          We indulge every reasonable

inference and resolve any doubts in the nonmovant’s favor.            20801, Inc. v.

Parker, 249 S.W.3d 392, 399 (Tex. 2008).              We must consider whether

reasonable and fair-minded jurors could differ in their conclusions in light of all of

the evidence presented. See Wal-Mart Stores, Inc. v. Spates, 186 S.W.3d 566,

568 (Tex. 2006); City of Keller v. Wilson, 168 S.W.3d 802, 822–24 (Tex. 2005).

Admissibility of Esquivel’s Affidavit

      Appellants first contend that Esquivel’s affidavit was admissible and

defeats appellee’s grounds for summary judgment. Although Esquivel averred in

his affidavit that he is not an attorney and “nothing within this Affidavit should be

construed as Legal Opinion or Legal Advice,” most of the statements in his

affidavit are legal conclusions to which he did not show competence to testify.

See, e.g., Mercer v. Daoran Corp., 676 S.W.2d 580, 583 (Tex. 1984); Grace

Interest, LLC v. Wallis State Bank, No. 14-12-00557-CV, 2013 WL 4604570, at

*11 (Tex. App.––Houston [14th Dist.] Aug. 29, 2013, pet. filed).

      The only factual statement set forth in the affidavit is the assertion that

GreenPoint securitized the loan shortly after the note and deed of trust were

executed.   Taking that factual statement as true, we will address appellants’

argument that the securitization of the loan somehow separated the note and

deed of trust.

      Appellants rely on the United States Supreme Court’s decision in

Carpenter v. Longan, which stated, in part, that an “assignment of [a] note carries


                                          6
[a] mortgage with it, while an assignment of the latter alone is a nullity.” 83 U.S.

271, 274 (1872). As the Fifth Circuit Court of Appeals has noted, Carpenter,

decided in 1872, was construing Colorado territorial law and federal common law

and is not apposite. Martins v. BAC Home Loans Servicing, LP, 722 F.3d 249,

254 (5th Cir. 2013). Furthermore, in Martins, the Fifth Circuit, construing Texas

law, held that the split-the-note theory is “inapplicable under Texas law where the

foreclosing party is a mortgage servicer and the mortgage has been properly

assigned.” Id. at 255 (citing property code section 51.0025 and Texas cases

holding that note and deed of trust are not inseparable and may be enforced

separately). While we do not hold that the legal effect of the securitization of the

loan was to split the note and deed of trust, we agree with the federal court’s

reasoning in Martins and hold that even if it had, appellants’ split-the-note

argument does not defeat appellee’s grounds for summary judgment.              See

Arzola v. ACM Props., LP, No. 04-12-00713-CV, 2013 WL 5948413, at *4 (Tex.

App.––San Antonio Nov. 6, 2013, no pet.) (mem. op.) (agreeing with Martins and

rejecting split-the-note theory raised in defense to summary judgment motion).

We overrule appellants’ first subissue.

Validity of Endorsement on Note

      In their second subissue, appellants claim that the blank endorsement on

the copy of the note creates a fact issue as to the note’s validity under section

3.204 of the business and commerce code because it has no “notations,

distinguishing marks,” date, or signatures of appellants. However, appellants cite


                                          7
no law requiring such notations, distinguishing marks, date, or signatures. See

Tex. Bus. & Comm. Code Ann. § 3.204(a) (West 2002) (defining endorsement as

a signature by one other than the maker of an instrument that evidences an

intent to negotiate or restrict payment of an instrument).

      Moreover, appellee was entitled to the relief it sought pursuant to the other

summary judgment evidence, including the deed of trust, which was also

attached to the motion for summary judgment. See, e.g., Farkas v. Aurora Loan

Servs., LLC, No. 05-12-01095-CV, 2013 WL 6198344, at *4 (Tex. App.––Dallas

Nov. 26, 2013, no pet. h.) (mem. op.); Kyle v. Countrywide Home Loans, Inc.,

232 S.W.3d 355, 361–62 (Tex. App.––Dallas 2007, pet. denied) (holding that in

suit for foreclosure under deed of trust, introduction of note into evidence was

unnecessary when other evidence showed borrower was in default on the note).

Accordingly, we overrule appellants’ second subissue.

Whether MERS Had Transferrable Interest in Note and Deed of Trust

      In their third subissue, appellants contend that because MERS has

asserted in other litigation that it maintains “no actionable interest in mortgage

loans,” it had no “interest” to transfer here, and thus its purported assignment of

the note and deed of trust to BAC was ineffective. See MERS v. Neb. Dep’t of

Banking & Fin., 704 N.W.2d 784 (Neb. 2005). We have previously discussed the

validity of transfers by MERS:

      MERS was created for the purpose of tracking ownership interests in
      residential mortgages. Entities such as mortgage lenders “subscribe
      to the MERS system and pay annual fees for the electronic


                                         8
      processing and tracking of ownership and transfers of mortgages.”
      These MERS members “contractually agree to appoint MERS to act
      as their common agent on all mortgages they register in the MERS
      system.” When a mortgage is executed through a MERS member
      and registered in the MERS system, it is recorded in the real
      property records with MERS named on the instrument as nominee[4]
      or mortgagee of record. While the mortgage is in effect, the original
      lender may transfer the beneficial ownership or servicing rights on
      the mortgage to another MERS member, with MERS tracking these
      electronic transfers; these assignments are not recorded in the real
      property records. If a MERS member assigns its interest in a
      mortgage to a non-MERS member, this assignment is recorded in
      the real property records and MERS deactivates the loan within its
      system.

MERS v. Young, No. 02-08-00088-CV, 2009 WL 1564994, at *4 (Tex. App.––

Fort Worth June 4, 2009, no pet.) (mem. op.) (citations omitted). Therefore, we

reject appellants’ arguments that MERS, acting as nominee on behalf of the

lender, could not transfer the note and deed of trust to BAC and that appellee

was required to provide evidence of every transfer of the note and deed of trust

within the MERS system before the assignment to BAC. See, e.g., Roper v.

CitiMortgage, Inc., No. 03-11-00887-CV, 2013 WL 6465637 at *8 (Tex. App.––

Austin Nov. 27, 2013, no pet. h.) (mem. op.); see also MERS, 704 N.W.2d at 788

(rejecting argument that MERS is a “mortgage banker” under Nebraska’s

Mortgage Bankers Registration and Licensing Act and noting that MERS serves



      4
       Black’s Law Dictionary defines “nominee” as a “person designated to act
in place of another” or a “party who holds bare legal title for the benefit of others.”
Black’s Law Dictionary 1149 (9th ed. 2009); see also Green v. JPMorgan Chase
Bank, N.A., 937 F. Supp. 2d 849, 862 (N.D. Tex. 2013) (“[S]cores of courts have
upheld the validity of deeds in which MERS is named nominee and beneficiary.”).


                                          9
only as legal title holder in a nominee capacity and does not extend credit or

have independent right to collect debt). We overrule appellants’ third subissue.

Vendor’s Lien

      Appellants contend in their fourth subissue that appellee did not produce

any evidence that it is the owner of the vendor’s lien on the property. However,

appellee did not seek to foreclose on the vendor’s lien but the deed of trust.

Therefore, we overrule appellants’ fourth subissue.

Conclusory Statements in Zook’s Affidavit

      In their fifth subissue, appellants contend that the trial court impermissibly

relied on Zook’s statement in her affidavit that appellee “is the lawful holder of the

Note and beneficiary of the Deed of Trust.” Their argument is based on their

contention that MERS could not have validly assigned the note to BAC and that

Zook did not show personal knowledge of the execution of the assignment.

Whether this statement is conclusory is immaterial; appellee presented other

evidence to the trial court––including a copy of the assignment itself––from which

the trial court could have concluded as a matter of law that appellee is the lawful

holder of the note and deed of trust. See Atchley v. Chase Home Fin. LLC,

No. 02-12-00365-CV, 2013 WL 3064444, at *2 (Tex. App.––Fort Worth

June 20, 2013, no pet.) (mem. op.). We overrule appellants’ fifth subissue.

Hearsay Objection to Zook’s Affidavit Not Preserved

      Finally, appellants argue that the copies of the note and deed of trust

attached to the summary judgment motion are inadmissible hearsay and were


                                         10
not properly authenticated as business records. Appellants failed to object to the

evidence on these grounds before the trial court granted summary judgment;

thus, they failed to preserve this subissue. See Wilner v. Deutsche Bank Nat’l

Trust Co., No. 02-11-00287-CV, 2012 WL 6632508, at *1 n.2 (Tex. App.—Fort

Worth Dec. 21, 2012, no pet.) (mem. op.); Tex. Dev. Co. v. Exxon Mobil Corp.,

119 S.W.3d 875, 879 (Tex. App.––Eastland 2003, no pet.) (op. on reh’g). We

overrule appellants’ sixth subissue.

                                   Conclusion

      Having overruled all of the subissues in appellants’ sole issue, we affirm

the trial court’s judgment.


                                                  /s/ Terrie Livingston

                                                  TERRIE LIVINGSTON
                                                  CHIEF JUSTICE

PANEL: LIVINGSTON, C.J.; GARDNER and GABRIEL, JJ.

DELIVERED: January 30, 2014




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