                                                                                    ACCEPTED
                                                                                01-15-00404-CV
                                                                     FIRST COURT OF APPEALS
                                                                             HOUSTON, TEXAS
                                                                          11/12/2015 2:23:04 PM
                                                                          CHRISTOPHER PRINE
                                                                                         CLERK

                      No. 01-15-00404-CV

                  In the First Court of Appeals                FILED IN
                        at Houston, Texas               1st COURT OF APPEALS
                                                            HOUSTON, TEXAS
                                                        11/12/2015 2:23:04 PM
                MID PAC PORTFOLIO LLC
                                                        CHRISTOPHER A. PRINE
                                                                 Clerk
                               V.

          PAULA WELCH AND CLYDE ASHWORTH



                On Appeal from the 405th Judicial
            District Court of Galveston County, Texas
                     Case No. No. 13CV0422

              BRIEF OF APPELLEES

                                                      Mark W. Stevens
                                                       SBN 19184300
                                                         PO Box 8118
                                                 Galveston, TX 77553
                                                         409.765.6306
                                                     Fax 409.765.6469
                                    Email: markwandstev@sbcglobal.net

ORAL ARGUMENT REQUESTED




                      November 12, 2015



                                1
                     Contents
Authorities……………………………………………………………………...…3

Overview………………………………………………………………….….……5

Request for Oral Argument………………………………………………...………6

Procedural History………………………………………………………………….6

Request for Supplementation……………………………………………….………6

Facts……………………………………………………………………..………….7

    Reply Issue 1—Summary Judgment for Welch and Ashworth was
                     properly granted………………………………………..…19
    Reply Issue 2--- The statements of Paula Welch concerning payment
                     of taxes was “proper summary judgment evidence.”……19
    Reply Issue 3---Summary Judgment was proper because Mid Pac was
                     Collaterally stopped to claim that its predecessor ever
                     had authority to assert the note or the deed…………..….19

Summary of the Argument………………………………………………….…… 20

Arguments and Authorities…………………………………………….……..….. 20

Conclusion……………………………………………………………….………..32

Prayer……………………………………………………………………………..32

Signature…………………………………………………………………………..32

Certificate of Compliance………………………………………….………..…….33

Certificate of Service…………………………………………..………………….33




                                    2
                             AUTHORITIES

                                 Cases

Bradford v. Bradford, 971 S.W.2d 595 (Tex. App.—
Dallas 1998, no pet.)…………………………………………………………..…..23

Brown v. Brown, 145 S.W.3d 745 (Tex. App.—
Dallas 2004 , pet. denied)…………………………………….…………..……….29

Brownlee v. Brownlee, 665 S.W.2d 111 (Tex. 1984)……………..………..……..26

Elbaor v. Smith, 845 S.W.2d 240(Tex. 1992)………………………………...…. 20

Graebener v. Graebener, 2012 WL 1143590
(Tex. App.—Houston [1st Dist.] 2012)………………..…………………………..22

Johnson v. Bethesda Lutheran Homes and Services,
935 S.W.2d 235 (Tex. App.—Houston [1st Dist.] 1996, no writ)……….………..25

Mays v. Perkins, 927 S.W.2d 222, 225 (Tex. App.-
Houston [1st Dist.] 1996, no writ)……………………………………………..…..22

Rizkallah v. Conner, 952 S.W.2d 580
(Tex. App.—Houston [1st Dist.] 1997, no writ)……….………………………….26

Rockwall Commons Associates, Ltd. v. MRC Mortgage Grantor Trust,
331 S.W.3d 500 (Tex. App.—El Paso 2010, no pet.)………………………….…27

Seals v. Upper Trinity Reg’l Water District, 145 S.W.3d 291
(Tex. App.—Fort Worth 2004, pet. dism’d)………………………………………22

Serna v. Webster, 908 S.W.2d 487, 492 (Tex. App.—
San Antonio 1995, no writ)……………………………………….………………23

State Farm v. Gandy, 925 S.W.2d 696, 709 (Tex. 1996)…………...…………….20

Sysco Food Services, Inc. v. Trapnell, 890 S.W.2d 796 (Tex. 1994)……………31

Turoff v. McCaslin, 222 S.W.3d 665 (Tex. App.—Waco 2007)……...………20-21
                                   3
                           Statute and Rules

Texas Constitution, art. 16a- 50………….……………………………………..25

Tex. Civ. Practice & Remedies Code Sec. 11.054(1)(A)………………………17

Texas Civil Practice & Remedies Code Sec. 16.004(a)(1)…..………………….23

Texas Civil Practice & Remedies Code Sec. 16.024…………………………….23
..
Texas Civil Practice & Remedies Code Sec. 16.025…………………………….23

Texas Civil Practice & Remedies Code Sec. 16.035…………….……………….23

Texas Civil Practice & Remedies Code Sec. 16.051……………….…………….23

Texas Rule of Appellate Procedure 34.5(b)(4)………...…………………………….6

Texas Rule of Appellate Procedure 34.5(c)(1)………………………………………6

Texas Rule of Civil Procedure 120…………………………………………….….22

Texas Rule of Civil Procedure 166a(c) ………………………………………..…28

Texas Rule of Civil Procedure 166a(i)……………………………………………28

Texas Rule of Civil Procedure 736.9…………………………………………….30




                                   4
                               No. 01-15-00404-CV

                           In the First Court of Appeals
                                 at Houston, Texas

                         MID PAC PORTFOLIO LLC

                                         V.

                 PAULA WELCH AND CLYDE ASHWORTH



                        On Appeal from the 405th Judicial
                    District Court of Galveston County, Texas
                             Case No. No. 13CV0422

                            BRIEF OF APPELLEES

TO THE HONORABLE FIRST COURT OF APPEALS:

            Men have been swindled by other men on many occasions.
            The autumn of 1929 was, perhaps, the first occasion when
             men succeeded on a large scale in swindling themselves.

                                              John Kenneth Galbraith,
                                              The Great Crash, 1929
                                              Chapter VII, p. 130

                                     Overview

      This is a case study in how a “junk” mortgage, unenforceable and

previously rejected by courts on multiple occasions, has been being recycled in an

attempt to extort money from Appellees who have already been victimized with

over 10 years of litigation. The trial court recognized the scam, properly denied

what would have been a windfall for Appellant, and granted summary judgment to


                                         5
Appellees. In purchasing the “deed in lieu” now asserted, Appellant Mid Pac has

succeeded only in swindling itself, and the summary judgment should be in all

things affirmed.

                              Request for Oral Argument

         This case presents what appear to be novel questions about the means in

which defunct mortgages are being systematically and improperly asserted in

Texas Courts. Oral argument may therefore be beneficial, in the discretion of the

Court.

                                  Procedural History

         Both parties moved for summary judgment. Appellees moved to supplement

their motion for summary judgment and that motion was granted by the court’s

order at CR 738, attached as Tab D. The trial court granted what was styled a

Motion for “default” judgment but denied the requested effect of that judgment by

making it clear in the original and amended final judgments, Tabs A and B, that it

was not finding implicitly or otherwise that any effective conveyance by the

“defaulting” party had been made to Mid Pac.

                               Record Supplementation

         In its Brief, Mid Pac claims that there is no deed under which Appellees

occupied the property in question. In fact, such a deed was filed on March 21, 2014

to correct an earlier omission. However, that filing and the certified copies of the


                                           6
deed and a subsequent Probate Judgment of muniment of title in favor of Paula

Welch, were not included in the Clerk’s Record. Supplementation was requested

under TRAP 34.5 on November 11, 2015. At this time, a copy of the 10-page

filing of March 21, 2015 is attached hereto as Tab C.

                                        Facts

      Appellant’s account of the facts leaves the impression that Mid Pac was

merely the innocent owner of pristine commercial paper. The truth is more

complex and disturbing.

      Appellant never sued on a note. The basis of Mid Pac’s suit was a

purported “Deed in Lieu of Foreclosure” signed by Defendants Paula Welch and

Clyde Ashworth on March 21, 2003 CR 122, 158. The Deed in Lieu of

Foreclosure was given pursuant to a purported compromise and Settlement

Agreement attached to Plaintiff’s Original and Amended Petitions. CR 85.

However, the underlying obligation was a Home Equity Loan, which meant that

such transactions were subject to restrictions under the Texas Constitution, art.

16a-50.

      Per the Affidavit of Paula Welch, CR 213, Para. 10, it was impossible to

comply with the terms of the purported settlement agreement because any

financing company contacted was claimed to have been an “affiliate” of Long

Beach Mortgage. Compromise & Settlement Agreement, CR 85 ff. For that


                                          7
reasons, the terms of the agreement were not met, i.e., the required sums were not

paid by 5:00 p.m on June 19, 2003.

        IF the grantee of the deed of trust (i.e., present plaintiff’s alleged

predecessor in the dim and undocumented past) had any cause of action for

possession of the property in question, such cause of action accrued no later than

June 20, 2003 and limitations as to enforcement of the deed began to run on that

date.

        What preceded and followed was reminiscent of Charles Dickens’ Jarndyce

v. Jarndyce.

        On December 13, 1999, A suit was filed by Long Beach Mortgage Company

as a servicer for Norwest Bank Minnesota NA in Cause No. 99CV1209 in the

122nd District Court. See Documentation, 13 CR 281. According to the Docket

sheet and subsequent order, a hearing was held on February 9, 2000. The Court’s

Docket Sheet entry for that day reads:

               2-9-00 Hearing conducted (Judy Hansen, Court Reporter).

               Application for expedited foreclosure proceeding is denied. F.T.C.



        An order to that effect, purporting to deny the application “without

prejudice.” See Order of March 20, 2000. CR 416.




                                             8
       On February 22, 2000, the same parties –and the same attorneys-- filed a suit

against Welch and Ashworth styled “Plaintiff’s Original Petition for Judicial

Foreclosure” in Cause No. 00CV0173 in the 212th Judicial District Court of

Galveston County. CR 419-450. The Petition included a demand letter from

Counsel for Long Beach dated October 19, 1999. The letter goes on to note that,

“…if you fail to pay the total amount due on or before thirty (30) days from the

date hereof, Creditor will accelerate amounts owed on your loan secured by the

Deed of Trust, declare the entire balance of your loan due and payable without

further demand and proceed to judicial foreclosure and sell the property under the

terms of the deed of trust and Tex. Const. Art. XVI Sec. 50(a)(6).” CR 444.

       In the Petition in No. 00CV0173, Long Beach claimed damages in the

amount of $270,280.12 (the original amount of the loan was $270,000), and further

stated, “Accordingly, Plaintiff elected to accelerate and mature the Loan

Agreement.” Exh. 14, Original Petition, p. 3, CR 421. This commenced

limitations for purposes of the four year limitation statute governing suits on notes,

although it does not appear that at any time Mid Pac has attempted to enforce the

note itself.

       The Docket Sheet in No. 00CV0173 reflects that a status conference was set

for May 25, 2000. However, on July 20, 2000, an order of Dismissal without




                                          9
prejudice was entered at the behest of Plaintiff Long Beach. Docket Sheet and

Order of 7/20/2000. CR 450.

       On March 6, 2000, Norwest Bank Minnesota, acting through the same

counsel as previously involved, filed suit against Defendants in Cause No.

00CV0222 in the 122nd District Court, again seeking “expedited” foreclosure and

again reciting that the debt had been accelerated. CR 452 ff. At the Petition p. 2,

Para. 6, CR 453, Norwest stated, “On October 15, 1999, Applicant gave the

requisite 30 day demand to cure the default and notice of acceleration of maturity

of the debt as provided for under the Security Instrument, Tex. Prop. Code Sec.

51.002, and applicable law.” The petition was verified by Raymond Agostini,

Vice president and “default manager” of Norwest. However, on March 20,

2000—about two weeks after filing—the same suit was dismissed “without

prejudice.” See Exhibit 22, final page. CR 468.

       On March 10, 2000, a suit seeking foreclosure was again filed –even while

the previous suit was pending—in No. 00CV0241, CR 472, in the 212th District

Court. The docket Sheet, CR 472 shows that a hearing originally set for May 26,

2000 was reset to May 31, 2000. The 212th District Court also denied relief. CR

488.

       Next, the lawsuit which gave rise to the “deed in lieu” asserted in the present

case was filed on April 24, 2000 in the 56th District Court in No. 00CV0409 by


                                          10
Welch and Ashworth against Long Beach Mortgage d/b/a Financing USA, Docket

Sheet, CR 499 (Nonsuit). Long Beach counterclaimed and thus the issue was

joined.

      The purported settlement agreement and Deed in Lieu of Foreclosure were

signed on March 21, 2003. CR 494 ff. Certain claims were dismissed following

the execution of the Compromise Agreement and “Deed in Lieu”. See entry of

3/24/2003, CR 499-500, reciting agreed motions of partial dismissals. The Court’s

final order of May 9, 2008 (the day after Judge Ellisor’s final order in No.

06CV0224), makes clear that the Agreed Order of March 24, 2003 dismissed

Ashworth and Welch’s lawsuit in its entirety with prejudice, and dismissed Long

Beach Mortgage Company d/b/a Financing USA’s counterclaims against Ashworth

and Welch with prejudice. CR 494. Those orders of March 24, 2003 were “not

affected” by the Court’s order of May 9, 2008. CR 499. However, the Order of

May 9, 2008 in No. 00CV0409 did dismiss “without prejudice” the remaining

“breach of contract” claims of Long Beach Mortgage d/b/a Financing USA,

apparently at the Motion of Long Beach.

      When Welch and Ashworth signed the Settlement Agreement and “Deed in

Lieu” on March 21, 2003, they had no way of knowing the “shell game” that was

beginning. As Paula Welch testifies in her affidavit, Exh. 1,Para. 11, 11A, 12, CR

213-14, the settlement required that Welch and Ashworth obtain financing to take


                                          11
out the “note” from an entity that was not “affiliated” with Long Beach. In the 90

day refinancing window, Welch and Ashworth learned that Long Beach claimed

that a financing company with whom they were dealing was “affiliated” with Long

Beach and thus was not available as a lender. This was exactly the kind of gambit

which was sought to be avoided by constitutional and statutory provisions

requiring that home equity mortgages be foreclosed only by judicial order.

      Clyde Ashworth filed a proceeding in Bankruptcy on June 19, 2003. CR 257

When that proceeding was dismissed on or about November 12, 2003 (Entry 48,

final page, CR 262), a joint proceeding was filed the next day by both Paula

Welch and Clyde Ashworth in No. 03-46247, See Exh. 9, first entry. CR 264.

      That proceeding, however, was also eventually dismissed on September 28,

2004. See Exh. 9, PACER docket Sheet, Entry No. 79, final page. See bankruptcy

Docket Sheets, CR 268. The last date on which either Welch or Ashworth were

under bankruptcy protection would have been September 28, 2004. See ,

Bankruptcy PACER docket sheet, Item 79, Order on Trustee’s Motion to Dismiss,

CR 268.

      It was not over. On February 24, 2006, Citigroup Global Markets Realty

Corp. (i.e., “CGMRC” the entity from whom Mid Pac claims to have purchased the

paper in question), filed a suit seeking foreclosure against Welch and Ashworth in

Cause No. 06CV0224, in the 122nd District Court. Per the Docket Sheet, CR 330 ff


                                        12
and related documents. The issues were joined, hearings conducted, and on March

28, 2008, Judge Ellisor denied the application for foreclosure precisely because

GCMRC could not establish its “title” to the deed or note. CR330-333 . CGMRC

sought leave to take additional time to obtain such proof. CR 337-38, lamely

requesting “…additional time to locate documents to prove that it is the proper

applicant.” CR 338.

      On May 8, 2008, Judge Ellisor of the 122nd District Court entered an order

denying rehearing and confirming his original dismissal of CGMRC’s suit. CR

355. Cf. the Court’s emphatic docket sheet entry, CR 359 (“DENIED”). Thus, as

of May 8, 2008, GCMRC apparently could not even locate the paperwork

necessary to demonstrate its authority with respect to the deed or the property now

in question.,

      As noted, there was no further action in No. 00CV0409 following the

dismissal of both bankruptcies and the lifting of the automatic stay in bankruptcy.

The last act in No. 00CV0409 was the order of the Court dismissing the contract

claims of Long Beach “without prejudice” on May 9, 2008. CR 494 From that

date to the date of filing of the present suit, March 13, 2013, four years and 307

days elapsed. From the date of accrual (at latest, June 20, 2003, at which time

possession was to have been relinquished) to the date of filing (March 18, 2013), a

period of nine years 271 days days elapsed.


                                         13
      CGMRC attempted to salvage something by selling---for an undisclosed

consideration --- the mortgage package to Mid-Pac. See “Purchase Agreement ”

Exh. 27, CR 505, 532 ff, with price redacted. Now Mid Pac is attempting to

enforce the same deed when that relief was specifically denied almost six years

ago, i.e., May 8, 2008, , CR 355.

      For Mid Pac, the critical and unresolved problem was that there was no

chain of title from any incarnation of “Long Beach” mortgage to Mid Pac, and in

particular no indication of how “Long Beach” bequeathed the deed in lieu to Wells

Fargo or subsequently to GCMRC or Mid Pac. That problem led to an

embarrassing admission—which defeats any summary judgment in favor of Mid

Pac and which supports the summary judgment in favor of Welch and Ashworth:

            19. When Mid Pac Portfolio acquired the home equity loan from
            Citibank, it also acquired any interest that Wells Fargo may have
            under the Deed in Lieu executed by Paula Welch and Clyde
            Ashworth. Consequently, there exists a genuine controversy between
            Mid Pac Portfolio and Wells Fargo as to whether Mid Pac Portfolio
            or Wells Fargo is the actual owner of the property under the Deed in
            Lieu.

Original Petition of Mid Pac, Para. 19, CR 8-9. (emphasis added).

      In short, Mid Pac and Wells Fargo did not know who the owner of the deed

was, or what interest if any Wells Fargo “may” have had under the “deed in

lieu”—and they could not find out.



                                        14
      It wasn’t for want of trying. The record also reveals that a lawsuit in Dallas,

removed to federal court, resulted in an agreed judgment to the effect that Akin

Gump Hauer & Feld LLP, counsel for J P Morgan Chase Bank, NA, was to

“…immediately turnover [sic] the original Deed in Lieu … to Michael Burns…”

Federal Judgment, CR 664. That deed, if indeed it was turned over, is absent from

the record in this case, although in candor Counsel for Mid Pac has stated in court

in this case that he has the deed in lieu in his safe in the Dallas area.

      The “stipulation” between Mid Pac and CGMRC, CR 502 is an audacious

document—not a thing done in a corner, but in broad daylight.

      The “Stipulation”, CR 502 purports to disclaim any right, title or interest to

the Deed in Lieu which Mid Pac is asserting. (Para. 2). This does not cure the

underlying defect, i.e., that CGMRC and Mid Pac cannot produce an instrument

giving it title to property question. The ipse dixit of any affiant to that effect

would simply be an inadmissible “opinion of belief, i.e., a pure legal conclusion.

      The “Stipulation” goes on to “consent” to a judgment against itself in favor

of Mid Pac, “…providing that [CGMRC] sold and transferred its interest in the

Deed in Lieu to Mid Pac Portfolio, LLC provided that the judgment as to Citgroup

Global Markets Realty Corp is IN REM only.” CR 502 (emphasis added). Mid-

Pac and its counsel in this case were thus doing the bidding of CGMRC, and




                                           15
asking the courts to do the same even though the 122nd District Court denied any

relief in 2008.

      This “stipulation” in paragraph 7t provides further that “…Mid Pac

Portfolio LLC agrees not to pursue, and waives the award of, any monetary

damages, attorney fees, court costs or discovery against CitiGroup Global Markets

Realtiy Corp, but not against any other defendant in this case.”

      Also before the court was an email dated February 26, 2013 between Mid

Pac’s counsel at trial and on this appeal-- Mike Burns-- and Mr. Nathan Vaccaro of

Wells Fargo. That document, CR 764, demonstrates that a Special Warranty

Deed from Wells Fargo had been requested and apparently was not forthcoming.

There Mr. Burns stated:

             I will have to record the Deed in Lieu into Wells [Fargo] name and
             start a quiet title suit to transfer the title into Mid-Pac’s name. I’ll have
             to name Wells Fargo as a Defendant. I hope you’ll be able to file a
             disclaimer in the suit and get out of it without it getting too
             complicated….Will your office accept service of the suit?

      Thus, the subsequent “default” judgment was a sham, intended to somehow

substitute a collusive “stipulation” for a Special Warranty Deed which Wells

Fargo could not provide.

      CGMRC had been “thrown out” of court in No. 06CV0224 when the basis

of its own claimed assignment was challenged. For that reason, CGMRC would be

potentially subject to sanctions as a vexatious litigant if it were determined that it


                                           16
had on five occasions filed a suit which had been “finally determined adversely to

the plaintiff”. See Tex. Civ. Practice & Remedies Code Sec. 11.054(1)(A). The

packet containing the “assignment” of the “deed” in question had the other items

redacted—suggesting that this suit is potentially only one of many such abusive

salvage operations by Mid Pac and the vendors of dubious paper.

         Thus, CGMRC simply purported to “assign” a deed Mid Pac. The

assignment, CR 51, contains no property description, no words of conveyance or

habendum clause, and in short is completely ineffective as a conveyance of title to

real property.

         GGMRC apparently thought—along with Mid Pac—that it could avoid

exposure to attorneys fees, possible sanctions, and embarrassing discovery by

simply not filing an answer in the normal form. However, by offering testimony in

the form of an affidavit, i.e., the “stipulation”, and especially by consenting to any

outcome, CGMRC has entered a general appearance and is before this Court for all

purposes. See below at p. *** The conduct of GCMRC and Mid Pac raise serious

policy questions as the devices used in this suit and generally to resurrect defunct

loans.

         The trial court refused to give effect to the bogus stipulation madquerading

as a default judgment . The Final Judgment and Amended Final Judgment, Tabs A

and B hereto, contain the same limiting language:


                                           17
             The Motion of Mid Pac for a Default Judgment as against Citigroup
             Global Markets Realty Corp. is Granted to the extent only that
             Citigroup Global Markets Realty Corp. has at this time no right, title
             or interest in the Deed in Lieu of Foreclosure or the property
             described therein and further provided that the Court does not thereby
             rule implicitly or otherwise that any effective conveyance by
             Citigroup Markets Realty Corp. or Wells Fargo NA of the Deed in
             Lieu or property described therein to Mid Pac Portfolio, LLC has
             taken place at any time.

      In short, CGMRC could relinquish or “quitclaim” any interest it had in the

deed—but CGMRC and Mid Pac could not enter into a collusive “stipulation”

which would bind Appellees—or Texas Courts.

      Why these maneuvers? The answer is that even the weakest claims have

some extortion value where the defendants’ homestead is involved. The Affidavit

of Marcie Schoudt , generated in earlier litigation c. July of 2011, shows what is

going on . At that time, Ms. Schoudt concluded based assessed value upon local

tax rolls for the property in question was about $395,380. CR 645. As noted,

Appellant Mid Pac declined to reveal the amount paid for either the “package”

relating to this property or any other properties. CR 505 , 532 ff, with price

redacted. With arithmetic like that, Mid Pac and similar entities could profit if just

one suit out of many “panned out.”

      One final odor attaches to Mid Pac’s dealings. In February of 2013, Ms.

Welch and Mr. Ashworth received an IRS 1099 form which advised in substance

that they were being credited with $ 268,893.72 in connection with the home in


                                          18
question. See Tab E, CR 549-553. Mid Pac responded with an affidavit of one

April Smith, CR 562-563, which admitted that Mid Pac sent the 1099 and which

attempted to explain it away as an “REO” i.e., “…a term used in the mortgage

lending industry to mean “Real Estate Owned” which is property that has been

acquired by lenders through the foreclosure process which includes a Deed in

Lieu.”

         That statement –which is purely a legal conclusion—misses the point

entirely. The effect of the 1099 was to impose on Appellees a recognize gain of

over $268,000. Mid Pac had written off the note as uncollectible and were

placing on appellees the burden of recognized gain with respect to the IRS.



                                    Reply Issue 1
                  Summary Judgment for Welch and Ashworth was
                    properly granted and Summary Judgment for
                            Mid Pac was properly Denied

                                    Reply Issue 2
             The statements of Paula Welch concerning payment of taxes
                      was proper summary judgment evidence.

                                     Reply Issue 3
                 Summary Judgment was proper because Mid Pac was
                   Collaterally stopped to assert that its predecessor
                     Ever had standing to assert the note or deed.




                                          19
                            Summary of the Arguments

      There was no evidence of any chain of title from the original grantee under

the “deed in lieu” to Mid Pac. The “assignment” which Mid Pac attempted to cure

that defect does not substitute for a conveyance of realty and in any event is

unenforceable as contrary to public policy. Mid Pac is collaterally stopped

particular the fact that its predecessor did not have standing was determined

adversely to CGMRC in Cause No. 06CR0224 in the 122nd District Court,

approximately 5 years before the present suit was filed.   Mid Pac and CGMRC

are in violation of many fundamental principles of property and procedural law,

leading to the grounds which required summary judgment in favor of the Appellees

Welch and Ashworth:

                      ARGUMENTS AND AUTHORITIES
         Under Issue 1—Summary Judgment Was Properly Granted to
      Appellees Welch and Ashworth and Summary Judgment as to Mid Pac
                            Was properly denied.

      Appellees will summarize the arguments made below both in opposition to

Mid Pac’s Motion for Summary Judgment and in support of their own Motion for

Summary Judgment.

      Ground I—Void “Mary Carter” Assignment Unenforceable-- The

“assignment” under which Mid Pac claims is unenforceable because it violates the

considerations invalidating so-called “Mary Carter” Agreements. This suit was a


                                         20
collusive effort between Mid Pac and Citigroup Global Markets Realty Corp.

(“CGMRC”) to revive a claim that was previously rejected by the 122nd District

Court in Galveston County, Texas. (final order of denial, May 8, 2008), CR ***.

The “stipulation” which makes it clear that CGMRC, having failed once in

Galveston County Courts to enforce its deed, simply purported to “assign” the

deed and mortgage package to a straw holder (Mid Pac) in an effort to seek more

favorable justice in another court.

      The “assignment” of claims is prohibited when that assignment skews the

administration of justice. A classic “Mary Carter” agreement exists where a

settling defendant retains a financial stake in the Plaintiff’s recovery and remains a

party at the trial of the case. Elbaor v. Smith, 845 S.W.2d 240, 247 (Tex. 1992).

So called “Mary Carter” agreements are banned because they tend to promote

litigation rather than settling it, and distort the trial process against defendants.

State Farm v. Gandy, 925 S.W.2d 696, 709 (Tex. 1996).

      However, the concept of Mary Carter agreements has grown far beyond the

original mold. In Turoff v. McCaslin, 222 S.W.3d 665 (Tex. App.—Waco 2007) a

“litigation trust” agreement was denied enforcement because it violated public

policy and in particular Mary Carter principles. The Waco Court of Appeals

explained:

             Turoff asks this Court to apply the literal definition established by the
             Supreme Court in Elbaor. But the law on Mary Carter Agreements in
                                            21
             Texas has evolved in include agreements that violate the principles
             laid out in Elbaor even if the precise structure of the agreement does
             not fit the precise pattern of an agreement previously determine[d] to
             be in violation of public policy.

Turoff, supra, 222 S.W.3d at 666, citing cases.

      The Litigation Trust Agreement in Turoff showed that the beneficiaries took

the “largest cut” of any proceeds and thus had a financial stake in the outcome of

the suit filed by Turoff. The agreement required those parties to assist Turoff in

prosecution of the suit, and mutually released claims against one another.

      The “assignment” in the present case attempts to accomplish analogous

improper goals. For a consideration which is unstated—and which Plaintiff Mid-

Pac refuses to disclose -- Mid Pac is attempting to “enforce” the deed while

attempting to allow CGMRC to stand off at a distance—and attempting to enforce

a recent “stipulation” which purports to insulate CGMRC from the consequences

of filing suit for relief which it was denied over 5 years ago in Cause

No.06CV0224, May 8, 2008, CR ***.

                            The “Default Judgment” Ruse

      Despite the claim by Mid-Pac that CGMRC is a defaulting defendant, the

very fact of that “stipulation” constitutes a general appearance in this court for all

purposes. Tex. R. Civ. P. 120; Mays v. Perkins, 927 S.W.2d 222, 225 (Tex. App.-

Houston [1st Dist.] 1996, no writ). A party offers testimony has entered a general


                                           22
appearance. Graebener v. Graebener, 2012 WL 1143590 *2 (Tex. App.—Houston

[1st Dist.] 2012), citing Seals v. Upper Trinity Reg’l Water District, 145 S.W.3d

291, 296-97 (Tex. App.—Fort Worth 2004, pet. dism’d)(examining witnesses or

offering testimony constitutes general appearance); Bradford v. Bradford, 971

S.W.2d 595, 598 (Tex. App.—Dallas 1998, no pet.)(same); Serna v. Webster, 908

S.W.2d 487, 492 (Tex. App.—San Antonio 1995, no writ)(same).

      Ground II—Limitations-- Limitations under TCPRC Secs. 16.035(a);

16.024; 16.004(a)(1) and 16.051 were all asserted in Appellees’ Motion for

Summary Judgment at CR 189. The Court permitted amendment (Tab D, CR 738)

to assert limitations under the five year provision of TCPRC 16.025, as well as

collateral estoppels.

      A “deed” of any kind has to be enforced within 4 years of breach of

surrender of the property. Mid-Pac’s suit is barred by limitations under the three

year statute of limitations found at TCPRC Sec. 16.024; the general four year

statute of limitations found at Texas Civil Practice and Remedies Code Sec.

16.004(a)(1), or the Residual Statute of Limitations found at Texas Civil Practice

and Remedies Code Sec. 16.051. Additionally, an executor contract for the

conveyance of realty must be brought within four years of the date of accrual.

TCPRC Sec. 16.035(a).




                                         23
      Ground III—No Chain of Title from Original Recipient of Deed/TRCP

166a(i). You can’t buy something from somebody if they don’t own it. Mid Pac

claims “assignment” from another entity-- Citigroup Global Markets Realty Corp.

or “CGMRC”—which cannot prove their title back to the original recipient of the

deed. There is no instrument—and hence no evidence under TRCP 166a(i) ,

specifically raised at CR 189, before the court which records title or ownership of

the property, the deed, or indeed the mortgage and note from Citi Bank or any

other entity into CGMRC , and thus CGMRC’s purported “assignment” to Mid Pac

is without substance. Indeed, there appears to be no deed, assignment or other

conveyance from Washington Mutual (“WaMu”) into Citi Bank. Additionally,

there is NO conveyance in the record from the “Citi Group” entity which may have

received a conveyance at some time into the CGMRC entity which purports to

have assigned the deed and cause of action to Mid-Pac.

      Ground IV—Illegality-- The “deed in lieu” was illegal and unenforceable

on at least two counts. First, it was obtained in settlement of a Home Equity Loan

Mortgage in violation of both that Mortgage’s terms and the Texas Constitution,

Art. 16-50A, because the only way a Home Equity Loan can be enforced is

through a judicially supervised foreclosure. See Note, Exhibit 5, Para. 20 (“The

lien evidenced by this security instrument may be foreclosed only by court

order.”), CR ***. There is no evidence, TRCP 166a(i), that any court specifically


                                         24
approved the so-called Compromise Settlement Agreement, or even knew of its

existence or terms.

      Second, at the inception the “loan” underlying the deed of trust was

improperly modified at closing .See Tab C, Affidavit of Paula Welch, Para. 14, CR

221. In effect, Appellees were “shorted” about $8,000 at closing, defeating the

entire purpose of the home equity loan in 199. This constituted “Fraud” in the

extension of home equity credit, mandating a forfeiture of all principle and interest

under the Texas Constitution, art. 16a-50.



                  Argument and Authorities under Reply Issue 2
           The statements of Paula Welch concerning payment of taxes
                    was proper summary judgment evidence.
                                       (


            The Five Year Statute of Limitations and Payment of Taxes

      The five year statute under TCPRC Sec.16.025 was pleaded in Appellees’

Original Answer, CR 52; Discussed at length in Mid Pac’s Motion for Summary

Judgment, CR 129 ff; Appellees Motion to Amend, CR 692, and Defendants’

Response to Mid Pac’s Supplemental response , 4/15/15, CR 725.

      Before the trial court, Appellee Welch submitted and affidavit and

supporting documents demonstrating that she had paid taxes through escrow

accounts containing her money for some of the years in question.            Mid Pac


                                         25
concedes that error was not preserved, yet at pp. 19 and 21 ff. of its Brief

challenges Ms. Welch’s affidavit regarding taxes as being “conclusory” and hence

one that can be challenged on appeal without having made any effort to do so in

the trial court.

       The flaw in Mid Pac’s challenge is a misreading of what “conclusory”

evidence actually is, and what the requirements are—and are not—under Tex. R.

Civ. P. 166a (c). Various courts have often commented on the frequent—and

frequently belated—claims that an affidavit is “conclusory. See, e.g., Johnson v.

Bethesda Lutheran Homes and Services, 935 S.W.2d 235 (Tex. App.—Houston

[1st Dist.] 1996, no writ):

           An oft-repeated objection to summary judgment evidence….is that it
           is conclusory. There is much confusion about what this objection
           means. It does not mean that logical conclusions based on stated
           underlying facts are improper. That type of conclusion is proper in
           both lay and expert testimony. What is objectionable is testimony
           that is nothing more than legal conclusions. Brownlee v. Brownlee,
           665 S.W.2d 111, 112 (Tex. 1984). To allow such testimony is to
           invade the province of the fact finder, which is the sole arbiter of what
           used to be known as “ultimate issues,” or issues that by their legal
           consequences control the disposition of the case…..
935 S.W.2d at 239 (Hedges, J., concurring)(emphasis added).
       The affidavit of Ms. Welch regarding payment of taxes was exactly what the

boldfaced language contemplated, i.e., logical conclusions based on stated

underlying facts.




                                         26
      This case is to be distinguished from situations where bald assertions of

legal conclusions are found to be inadequate for summary judgment or other

purposes, e.g., Rizkallah v. Conner, 952 S.W.2d 580, 588 (Tex. App.—Houston

[1st Dist.] 1997, no writ)(bare conclusions laying blame on car’s condition on

actions by the owner).

      See Rockwall Commons Associates, Ltd. v. MRC Mortgage Grantor Trust,

331 S.W.3d 500 (Tex. App.—El Paso 2010, no pet.). Rockwall first noted that a

complaint that an affidavit is not “clear, positive, direct, etc…” must be made

before the trial court, or is waived. 331 S.W.3d at 507. Here, Mid Pac attempts to

evade that clear principle my mischaracterizing Ms. Welch’s supplementary

affidavit as “conclusory”.

      Rockwall further noted that items such as contracts are admissible because,

“…as contracts, they have legal effect independent of the truth of any statements

contained therein and are not hearsay.” 331 S.W.3d at 511.

      In Rockwall, the trial court had overruled complaints that affidavits were

“conclusory” and the matter was asserted as error. The El Paso Court of Appeals

rejected that challenge, noting first that, “Conclusory statements are not susceptible

to being readily controverted…” 331 S.W.3d at 512. As noted above, Mid Pac

was able to controvert the affidavit of Ms. Welch regarding the source of tax

payments, but made no effort to do so.


                                          27
      Further, in Rockwall the challenged affidavit was accompanied by ample

documentation—just as in the present case. The affidavit was therefore not

“impermissibly conclusory.” 331 S.W.3d at 513.

      Mid Pac ignores Tex. R. Civ. P. 166a(c)(final sentence):

            … A summary judgment may be based on uncontroverted testimonial
            evidence of an interested witness, or an expert witness as to subject
            matter concerning which the trier of fact must be guided solely by the
            opinion of testimony of experts, if the evidence is clear, positive and
            direct, otherwise credible and free from contradictions and
            inconsistencies and could have been readily controverted.

      Mid Pac did not controvert Ms. Welch’s claims—or even to try to do so.

Why not? Exhibit 27 to Defendant’s Motion for Summary judgment, CR *** is a

lengthy document summarizing the agreement of purchase between Mid Pac and

CGMRC, and describing in detail Mid Pac’s access to the underlying papers of the

note and deed of trust. If the funds used to pay taxes were other than those

belonging to Defendants, Mid Pac would have access to that knowledge, or could

discover it if it knew who actually “owned” the deed. Simply put, the affidavit of

Ms. Welch regarding payment of taxes was admissible under TRCP 166a(c),

quoted above, and Mid Pac simply failed to controvert it.




                                        28
      Mid Pac’s argument against application of Sec. 16.025         amounts to an

assertion that the taxes had to be paid directly by Defendants, and that taxes paid

with defendants’ money in escrow somehow do not satisfy the statute.            This

argument cannot be derived from the wording of Sec. 16.025.

      Mid Pac’s argument flies in the face of ordinary commercial practice, as

reflected in the original deed of trust, Defendant’s MSJ Exhibit 5, and literally

millions of others like it. Taxes on encumbered property are invariably paid by

the note holder, using funds of the owner/borrower. Lenders as a class—and their

downstream confederates such as Mid Pac-- would certainly not contend that the

borrower had not paid taxes under this arrangement if title were challenged by a

third party and the lender’s interest had to be defended by application of the five

year statute.

      The only case cited by Appellant in its challenge to Ms. Welch’s

supplementary affidavit on taxes is Brown v. Brown, 145 S.W.3d 745 (Tex. App.—

Dallas 2004, pet. denied). Brown did hold that defects in substance need not be

preserved. However, in that case the appellant was challenging the trial court’s

disallowance of his own expert’s affidavit, which (1) did not attach any supporting

documents, and (2) was excessively vague in alleging professional malpractice

without stating with precision exactly what the accused attorney had done




                                         29
incorrectly. Brown, supra, 145 S.W.3d at 751-52. That was, of course, a classic

example of a truly conclusory and non – probative affidavit.

       Here, however, Ms. Welch’s affidavit attached properly certified records of

the taxing authorities, and was more than specific in stating establishing that the

monies paid could only have come from her escrowed funds.

       Mid Pac claims that no deed is in the record. In fact, the “deed” under which

Appellee Paula Welch has occupied the house was omitted in her affidavit

regarding payment of taxes, CR 665, but was supplemented by an additional

affidavit on March 21, 2014. That second affidavit with attachments was not

included in the original clerk’s record but a supplementation has been requested

under TRAPs 34.5(b)(4) and 34.5(c)(1). For convenience, a copy of that

supplementary affidavit and attachments (deed and order probating will as muniment

of title) are attached to this Brief as Tab C.

       Mid Pac also overlooks that the Deed of Trust attached to its original and

amended pleadings could not ad would not have been entered into had Appellees, or

at least one of them, occupied the house under color of title since at least 1999. If it

were otherwise, the Deed of Trust and associated documents would be even more

worthless.




                                             30
                Arguments and Authorities under Reply Issue 3
         Summary Judgment was proper because Mid Pac was collaterally
           estopped to claim that its predecessor ever had authority to
                           assert the note or the deed


      Mid Pac misapplies TRCP 736.9, which is cited at Mid Pac’s Brief, pp. 19

ff for the proposition that the order of the 122nd District Court in Case No.

06CV0224 has no collateral estoppel effect. First, in the context of TRCP 736, the

“order” referred to is an “order” for foreclosure. The precise basis of the Summary

Judgment motion filed by Defendants’ prior counsel was that Citigroup Global

Markets Realty Corp. (CGMRC) lacked standing. See Defendants’ MSJ Exhibit

14, CR 330. When CGMRC was granted leave to present additional evidence on

the issue of standing and attempted to do so, the 122d District Court adhered to its

earlier ruling to the effect that CGMRC had no standing.

      Mid Pac necessarily claims that it is in privity of title with GCMRC.

However, in the earlier proceeding in the 122nd District Court, 878GCMRC could

not prove standing. That issue was fully and fairly litigated, Sysco Food Services,

Inc. v. Trapnell, 890 S.W.2d 796, 801 (Tex. 1994). A party suing on a note or for

foreclosure of a deed of trust must certainly, as a matter of minimal due diligence,

assure itself that it actually may assert such documents in court.

      Collateral estoppel does not bar litigation of issues arising after the first suit.

However, nothing of probative force happened in the six years since GCMRC


                                          31
suffered a dismissal in the 122nd District Court. No deed from GCMRC to Mid Pac

or any other entity was ever placed into evidence. The “stipulation” on which Mid

Pac relies was not probative of any fact except relinquishment of one entity to any

claim in the property; it did not confer title on Mid Pac directly or indirectly, and

the trial court properly and carefully refused to give such effect to it.

                                      Conclusion

      Mid Pac was either a knave or a fool. If Mid Pac filed suit knowing of the

infirmities described above, it was the former. If it bought the “package” without

even checking for a chain of title or consulting online records to determine any

litigation, the latter. In either case, Mid Pac has only itself to blame for urchasing

worthless paper and may not mitigate its loss by defying Texas’ historic protection

of homesteads.

                                         Prayer

      Appellees Paula Welch and Clyde Ashworth accordingly pray that the

Summary Judgment be in all things affirmed.

                                                              Respectfully submitted,
                                                                 /s/ Mark W. Stevens
                                                                    Mark W. Stevens
                                                                      TBN 19184300
                                                                       PO Box 8118
                                                               Galveston, TX 77553
                                                                       409.765.6306
                                                                   Fax 409.765.6469
                                                  Email: markwandstev@sbcglobal.net
                                                               Counsel for Appellees
                                           32
                             Certificate of Compliance
       The Foregoing instrument contains 6,228words in Times New Roman 14
point font double spaced, with extended quotations in single space.

                                                              /s/ Mark W. Stevens
                                                               Mark W. Stevens

                             Certificate of Service
     A true and correct copy of the foregoing instrument was served via efiling
on Mr. Mike Burns at burnslaw@outlook.com on November 12, 2015.

                                                              /s/ Mark W. Stevens
                                                                 Mark W. Stevens


                                      Exhibits

A     Final Judgment

B     Amended Final Judgment

C     Filing of Deed of Paula Welch

D     Order on Motion to Supplement MSJ

E     Form 1099’s and transmittal envelops




                                         33
A

                                                                         13-CII-0422
                                                                        OCJUFNJ
                                                                        Judgment - Final - Non Jury - OCA
                                                                        1018557                       .



                                                                        111/1111111111111111111111111111111
                                     No. 13CV0422
                                                                       ts ~-2 "' ftl'
     MID PAC PORTFOLIO LLC                       IN THE 40STH DISTRI~~ ~.~

     VS.

     PAULA WELCH,
     CL¥DE ASHWORHT and
     WELLS FARGO BANK, NA                        COURT OF GALVESTON.
     AS TRUSTEE FOR SALOMON
     BROTHERS MORTGAGE
     SECURlTIES Vll, INC. FLOATING
     RATE MORTGAGE PASS
     THROUGH CERTIFICATES
     SERIES 1999-LBI                             COUNTY, TEXAS


                                   FINAL JUDGMENT

           The Court, having considered the Motion for Summary Judgment of Plaintiff
     Mid Pac Portfolio LLC ("Mid Pac") and the Motion and Amended Motion for
     Summary Judgment of Defendants and Counter Plaintiffs Paula Welch and Clyde
     Ashworth (collectively, "Welch and Ashworth") and respective objections thereto,
     rules as follows:

           The Motion for Summary Judgment of Mid Pac Portfolio LLC is hereby
     OVERRULED.

           The Motion for Summary Judgment and Amended Motion for Summary
     Judgment of Welch and Ashworth is GRANTED.

           The Motion of Mid Pac for a Default Judgment as against Citigroup Global
     Markets Realty Corp. is Granted to the extent only that Citigroup Global Markets
     Realty Corp. has at this time no right, title or interest in the Deed in Lieu of
     Foreclosure or the property described therein and further provided that the Court


                                             1
                                                                                            839
t ~ i~ ~<?:Fs", no~\~tf?!reby rule implicitly or otherwise that any effective conveyance by
.      Citigroup Mar~ets Realty Corp. or Wells Fargo NA of the Deed in Lieu or property
    / ... ,describedtherein to Mid Pac Portfolio, LLC has taken place at any time.

              It is therefore Ordered, Adjudged and Decreed that Mid Pac Portfolio LLP
       take nothing from Paula Welch and Clyde Ashworth.

              It is further ordered, adjudged and decreed and declared that the "deed in
        lieu of foreclosure" which was filed of record on March 14, 2003 under Instrument
        Number 2013015526 in the deed records of the County Clerk of Galveston County,
        Texas and describing the property contested, the legal description of which is:

              Lot One Hundred (100) of THAMAN'S FIRST SUBDIVISION in the East
              Y2 of the Mary Austin League, located in Galveston County, Texas according
              to the map or plat thereof recorded in Volume 231, Page 6, in the office of
              the County Clerk of Galveston County, Texas.

        is unenforceable and barred from any further effort to enforce the same by any
        person, firm or entity purporting to have title to the subject property through such
        deed from any source, including but not limited to Mid Pac Portfolio LLC; Wells
        Fargo Bank N.A. as Trustee for Salamon Brothers Mortgage Securities VII, Inc.,
        Floating Rate Mortgage Pass through Certificates Series 1999-LBI; or Citigroup
        Global Markets Realty Corp.
              It is further Ordered, Adjudged and Decreed that Paula Welch and Clyde
        Ashworth     shall have and recover of and      from Mid Pac Portfolio LLC the
        following:
                     A. $   S,I d D'6   00    for attorneys fees before the trial court and
                         through and including the date ofthis Judgment;



                                                  2

                                                                                          840
      B. $ ;). 5{::;0 ss
                      I         In the event a notice of appeal is filed herein
                  I
           and Defendants Welch and Ashworth or either of them ultimately
           prevail on such appeal; and
      C. $    IsYv        .~     In the event that either party shall file a
              q
           petition for review with the Supreme Court of Texas and such
           petition for review is granted and further in the event that Welch
           and Ashworth prevail in such proceeding.
      D.     all taxable costs of court,
      E.     Postjudment interest at the statutory rate of 5.0 percent per
annum on attorneys fees state above from the date of entry herein;
      FOR WHICH SUMS LET EXECUTION ISSUE.
      Any relief not specifically granted herein is DENIED.
      This judgment disposes of all issues and all parties and is a FINAL
AND APPEALABLE WDGMENT.


                                 ,2015. 


                          ~:z
                            ~======::::::::. .:::::::::-..~-
                                              .....

                                              Michelle Slaughter
                                              District Judge




                                    3
                                                                            841
E

                                                                           13-CV-0422
                                                                           DCAMFJ
                                                                           Amended Final Judgment
                                                                           1022767


                                                              III               11~lllllll1llll1ll1llll~1111111
                                     No. 13CV0422
                                                            15 tAPR'11t :PMe\1t
     MID PAC PORTFOLIO LLC                   IN THE 40STH DIST~ 'lb~'
                                                                           ..
     VS.                                                              ~.                                  ~




                                                                                                       ,;t1

     PAULA WELCH,
     CLYDE ASHWORHT and
     WELLS FARGO BANK, NA                        COURT OF GALVESTON.
     AS TRUSTEE FOR SALOMON
     BROTHERS MORTGAGE
     SECURITIES VII, INC. FLOATING
     RATE MORTGAGE PASS
     THROUGH CERTIFICATES
     SERIES 1999-LBI                             COUNTY, TEXAS


                   Af'T\ t'..r\~
                   -
              FINAL JUDGMENT
           The Court, having considered the Motion for Summary Judgment of Plaintiff
     Mid Pac Portfolio LLC ("Mid Pac") and the Motion and Amended Motion for
     Summary Judgment of Defendants and Counter Plaintiffs Paula Welch and Clyde
     Ashworth (collectively, "Welch and Ashworth") and respective objections thereto,
     rules as follows:

           The Motion for Summary Judgment of Mid Pac Portfolio LLC is hereby
     OVERRULED.

           The Motion for Summary Judgment and Amended Motion for Summary
     Judgment of Welch and Ashworth is GRANTED.

           The Motion of Mid Pac for a Default Judgment as against Citigroup Global
     Markets Realty Corp. is Granted to the extent only that Citigroup Global Markets
     Realty Corp. has at this time no right, title or interest in the Deed in Lieu of
     Foreclosure or the property described therein and further provided that the Court


                                             1
                                                                                                  842 

does not thereby rule implicitly or otherwise that any effective conveyance by
Citigroup Markets Realty Corp. or Wells Fargo NA of the Deed in Lieu or property
described therein to Mid Pac Portfolio, LLC has taken place at any time.

      It is therefore Ordered, Adjudged and Decreed that Mid Pac Portfolio LLP
take nothing from Paula Welch and Clyde Ashworth.

      It is further ordered, adjudged and decreed and declared that the "deed in
lieu of foreclosure" which was filed of record on March 14, 2003 under Instrument
Number 2013015526 in the deed records of the County Clerk of Galveston County,
Texas and describing the property contested, the legal description of which is:

      Lot One Hundred (100) of THAMAN'S FIRST SUBDIVISION in the East
      Y2 of the Mary Austin League, located in Galveston County, Texas according
      to the map or plat thereof recorded in Volume 231, Page 6, in the office of
      the County Clerk of Galveston County, Texas.

is unenforceable and barred from any further effort to enforce the same by any
person, firm or entity purporting to have title to the subject property through such
deed from any source, including but not limited to Mid Pac Portfolio LLC; Wells
Fargo Bank N.A. as Trustee for Salamon Brothers Mortgage Securities VII, Inc.,
Floating Rate Mortgage Pass through Certificates Series 1999-LBI; or Citigroup
Global Markets Realty Corp.
      It is further Ordered, Adjudged and Decreed that Paula Welch and Clyde
Ashworth     shall have and recover of and      from Mid Pac Portfolio LLC the
following:
             A. $   5ci06     ~       for attorneys fees before the trial court and
                through and including the date ofthis Judgment;



                                          2
                                                                                  843
      B. $    ;< suo
                f        0;.).         In the event a notice of appeal is filed herein
           and Defendants Welch and Ashworth or either of them ultimately
           prevail on such appeal; and
       C. $     1 5b0~                  In the event that either party shall file a
                 I
           petition for review with the Supreme Court of Texas and such
           petition for review is granted and further in the event that Welch
           and Ashworth prevail in such proceeding.
      D.      all taxable costs of court,
      E.      Postjudment interest at the statutory rate of 5.0 percent per
annum on attorneys fees state above from the date of entry herein;
      FOR WHICH SUMS LET EXECUTION ISSUE.
      Any relief not specifically granted herein is DENIED.
      This judgment disposes of all issues and all parties and is a FINAL
AND APPEALABLE JUDGMENT.


      Signed:    Apr. \          h-(    ,2015.



                                                     Michelle Slaughter
                                                     District Judge




                                           3
                                                                                    844
                                                                      1S-CV-0422
                                                                      DCNOF
                                                                     Notice of Filing
                                                                     824884




                                  No. 13CV0422
                                                                     Illlflllflllllllllllmll
MID PAC PORTFOLIO LLC 


VS. 


PAULA WELCH,
CL YDE ASHWORHT and
WELLS FARGO BANK, NA                           COURT OF GALVESTON.
AS TRUSTEE FOR SALOMON
BROTHERS MORTGAGE
SECURITIES VII, INC. FLOATING
RATE MORTGAGE PASS
THROUGH CERTIFICATES
SERIES 1999-LBI                                COUNTY, TEXAS


                     FILING OF DEED OF PAULA WELCH

      ATTACHED HERETO please find the Deed of Paula Welch to the property
involved in this litigation and the order of muniment of title regarding the property
in question.

       This deed and probate order was inadvertently omitted as Exhibits 1 and 2 to
the affidavit of Paula Welch filed with Defendants' Motion for Summary Judgment
on January 15,2014.




                                                                    ark W. Stevens
                                                                   TBN 19184300
                                                                    P.O. Box 8118
                                                           G~lveston, Texas 77553
                                                                     409.765.6306
                                                                 Fax 409.765.6469
                                               Email: markwandstev@sbcglobaLnet
                                               Counsel for Defendants Paula Welch
                                                              And Clyde Ashworth

                                          1

                                 Certificate of Service
      I certify that a true and correct copy of the foregoing instrument was served
upon Mr. Michael Burns, 8111 LBJ Freeway, Suite 1501, Dallas, Texas 75251 via
fax 214.276.1546 March 21,2014.




                                                          Mark W. Stevens




                                         2
Dale:        January _...:I9~_ 1991

Onolor:      JOHN MBRCHAN'l' fo=aerly known as JOHN HUSSAIN and wife,
             LU ANNE MERCHANT
OI1llllOl'" Mailina Addreu (lacludlna COIIIIty):



OI'lllNCc:     JERRY N. WELCH and wife, PAULA A. WBLCH
OI'llllCC" MaiIiDa AdcIrcJ5 (illelvdioS CIIUnly):


Col!sIderation: 	 TEN AND NO/100 DOLLARS ($10.00) AND OTHER GOOD AND
                  VALUABLE CONSIDBRATION IN ~D PAID BY GRANTEE




                                                    ..........-­
Rc1IcrvIlions from and Elr:epliolls 10 ConllcylIIlCC and WarmlY:


This conveyance is made and accepted subject to the following
matters, to the extent same are in effect at this t1me; any and all
restrictions, covenants, conditions, easements, royalty interest,
mineral reservations or leases, if any, relating to the hereinabove
described property, but only to the extent that they are still in
effect, shown of record in the hereinabove mentioned state and
county, and to all zoning laws, regulations and ordinances of
municipal and/or other governmental authorities, if any, but only to
the extent that they are still in effect relating to the hereinabove
desoribed property•




                                     .   ,   ,


                    ,.~~~:~i~{~0Lil~::;;':/!::~;;~_ 

      Whcn!he COlllell reqllires. singular IlOWI.SIIAd plOlIOUlIIIlnc:lllde!he pilii'll•




                                                          ../'r/'--                 4'~ /7'~ ~ /:p-'
                                                            JOHN MERCHANT




                                                            LU ANNE MERCHANT




     STATEOP~              MASSACHUSETTS
     COUNTYOP
                                                                                                                                                  /',    ,
                                                                                                                                                        ';




                                                                                                                                                        .,i
                                                                                           ::11 ~TE OF TexAS COUNTVOF GALVESTON
                                                                                               I hereby ciIrtIlY that tnlll.-rumenr wlllIIed
     STATEOFTEXAS                                                                          on th. dete end lime IIIIIIOtd 111l'I0I'I by me alld
     COUNTYOP.                                                                             ...duly recordtd In ttteOf11cl1! Public RecoIlS,
                                               .. "'"                                      01 ....' Prope",o' GaIvetIOn 00uIII~ Texu. on
         ThlI illSlr\lmClll wlllCknowkdpd befOAl me OD the                                    ~y~                             .~
                                                                                                            JAHI' 1991



                                                                                           e~~
                                                                                                     I'IW'AIUID IN TIUI LAW OffICEOJ':
                                                                                                      Fuhrhop & Ferris
                                                                                                      William T. Fuhrhop
                                                                                                      P. O. Box 457
                                                                                                      Dickinson, Tx                77539-0457


- - - - - ­_ _ _
               1 ."
                   JERRY NOLAN WELCH,
                   DECEASEO                                               GALVESTON COUNTY, T E X A S
                                         AMENDED ORDER ADMITTING WILL TO PROBATE
                                  AND AUTHORIZING ISSUANCE OF LETTERS TESTAMENTARY
                          On this day came on to be heard the Application for Probate of
                   Will filed by PAULA ANN WELCH, Applicant in the Estate of JERRY NOLAN
                   WELCH, Deceased, Decedent.
                          The Court heard the evidence and reviewed the Will and the other
                   documents filed herein and finds that the allegations contained in the
                   Application are true; that notice and citation have been given in the
                   manner and for the length of time required by law; that Decedent is
                   dead and that four years have not elapsed since the date of Decedent's
                   death; that this Court has jurisdiction and venue of the Decedent's
                   estate; that Decedent left a Will date December 23, 1992, executed
                   with    the    formalities       and    solemnities      and under        the Circumstances
                   required by law to make it a valld Will; that on such date Decedent
                   had attained the age of 18 years and was of sound mind; that such Will
                   was not revoked by Decedent; that no objection to or contest of the
                   probate of such Will has been filed; that all necessary proof required
                   for the probate of such Will has been madej that such Will 1s entitled
                   to probate;        that there are no unpaid debts owed by the Estate of
                   Decedent other than those secured by liens on real estate i and that
                   there is no necessity for administration of such Estate.
                          The    Court    finds     that    PAULA ANN WELCH        is    entitled     to    receive
                   Letters Testamentary and the same are hereby granted to PAULA ANN
                   WELCH without bond, upon the taking of the Oath as required by law,




STATE OF TEXAS                                            CERTIFIED COpy CERTIFICATE
COUNTY OF GAL VESTON

This above is a full, true, and correct photographic copy of the original record now in my lawful custody and possession, as the same is recorded
in the Official Public Records of the Galveston County Probate Court in my office.

I hereby certify on March 21, 2014.
                   01: lJecenoen'C's eS1:at'.e.       -rne proceeolngs nereln snall Oe recorded by

                   the Clerk in the minutes of this Court.
                          SIGNED this             2/~ay           of




                   'Y'p~~irI.#
                       Attorney Pro Se
                       1625 Avenue L
                       Santa Fe, Texas 77510
                       (409) 925-3276




                                                       'fiLED
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                                                   ,. CQUNl';'CcFRII.
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STATE OF TEXAS                                          CERTIFIED COPY CERTIFICATE
COUNTY OF GALVESTON

This above is a full, true, and correct photographic copy of the original record now in my lawful custody and possession, as the same is recorded
in the Official Public Records of the Galveston County Probate Court in my office.

J bereby certify on March 21, 2014,



                                                                                             BY-+_-T-"=~:-:b"-ff1'T9yt:l------ Deputy
                               STATE OF TEXAS             }
                               COUNTY OF GALVESTON}
                                    KNOW ALL HEN BY THESE PRESENTS that I, JERRY NOLAN
                               WELCH, residing in the city of SANTA FE, GALVESTON COUNTY,
                               TEXAS, hereby make and publish; and 1n the contemplation of
                               the certainty of death, do hereby declare this instrument
                               to be my Last Will and Testament, expressly revoking all
                               Wills and Codicils heretofore made by me. I am over the age
                               of eighteen (18). I am of sound mind, having the ability to
                               know and understand the business in which I am engaged, the
                               objects of my bounty and their claims upon me, the general
                               nature and extent of my property, and the effect of the act
                               of making this my Last Will and Testament. It is my wish
                               and intent to make the following provisions for the
                               disposition of my estate upon my demise:

                                                                        I.

                                     I declare that I am married to PAULA ANN WELCH. I have
                                one (1) child, now living, whose name and birth date 1s as
                                follows:
                                JESSICA ANN WELCH                              BORN: FEBRUARY 12, 1986
                                       I have no deceased children.
                                                                       II.

                                    1 give, deVise, and bequeath all of my estate to my
                               wife, PAULA ANN WELCH, provided that she survives me by
                               thirty (30) days. If my wife does not survive me for that
                               period of time, then I give, devise, and bequeath all of my
                               estate to my child, JESSICA ANN WELCH; and if no children or
                               other descendants of mine should aurvive me, then to my
                               heirs at law under the statutes of descent and distribution
                               then in force· in the State of Texas, and in the proportions
                               provided by the statutes.
                                                                       III.

                                    I direct that my funeral consist of a memorial service
                               and that the disposition of my remains be as follows:
                               Cremation
                               No different funeral or other arrangements mal' be maCle or
                               entered into by my heirs.

                                                                       IV.
                                    I appoint my wife, PAULA A. WELCH, to act as
                               Independent Executrix of my will and estate, to act without
                               bond and free from supervision of any court. I authorize my
                               Executrix to sell, convey, lease (including 011, gas, and
                               mineral leases), mortgage, pledge, otherwise dispose of, and
                               contract wi th respect to my estate or any part thereof
                               (IncludIng the borrowing of money for any purpose), for such
                               considerations and upon such terms and cond1tions as she may
                               deem proper, intending hereby to give my Executrix all the
                               powers that a fee simple owner would have over the property
                               comprising my estate.
                                       Should my wife, PAULA A. WELCH not survive me or should
                               fall,     refuse or be unable or unwIlling to serve as




                                                      CERTIFIED COPY CERTIFICATE
STATE OF TEXAS
COUNTY OF GALVESTON

The above is a ful~ true, and correct pbotograpbic copy of tbe original record now in my lawful custody and possession, as tbe same is recorded in
                                                                                            ~   ______   ~_#   _0 __ -   __




                              Alternate Executrix, CYNTHIA SANFORD, who shall act without
                              bond and free of the supervision of any court with all the
                              powers herein granted to my Executrix; and who shall also
                              act as trustee for my chlld, JESSICA ANN WELCH, who is
                              living at my death, who is a minor or under any other legal
                              disability, with all the powers herein granted to my
                              Executrix, as well as those granted to trustees by the Texas
                              Trust Code as now in force or as hereafter amended, devoting
                              all of the income and principal of her share, as well as any
                              other interest thereafter acquired by her hereunder, to her
                              maintenance, support, and education, the same of which is to
                              be dispersed to her Legal Guardian, DAVID HARVEL until she
                              shall attain the age of eighteen (18) years and unt i l any
                              other disability shall be removed; the share of such
                              descendant who may die before attaining the age of eighteen
                              (18) years to pass in equal share!> per stirpes to her
                              descendant, if any, otherwise to my then living descendants
                              in each share per stIrpes.
                                     If my Executrix, PAULA A. WELCH or Alternate Executrix,
                               CYNTHIA SANFORD should not survive me, I hereby appoint
                               DAVI D HARVEL as Executor, who shall act wi thout bond and
                               free of the supel:vision of any court with all the powers
                               herein granted to my Executrix and Alternate Executrix.
                                    I direct that no action shall be taken in any court in
                               the administration of my estate other than the probating and
                               recording of this Will.
                                    No bond or other security shall be required of any
                               Executor or Executrix appointed in this Will.
                                                                          V.
                                    I f any person, whether or not related in any way by
                               blood to me, shall either directly or indirectly attempt to
                               oppose or set aside the probate of this Will or to impair or
                               invalidate any of the provlsions hereof and such person
                               shall establish a right to any part of my estate, I give and
                               bequeath to 5uch person the sum of One Dollar ($1.00) only
                               and no further interest whatsoever in my estate.
                                                                      VI.

                                    My wife, PAULA A. WELCH and I are executing Wills at
                               different time intervals, in which each of us is the primary
                               beneficiary of the Will of the other. These Wills are not
                               executed because of any agreement between my wife and
                               myself. Either Will may be revoked at any time at the sole
                               discretion of the maker thereof. Upon the untimely death of
                               my wife, PAULA A. WELCH, this Will shall become null and
                               void and her will shall take precedence.
                                                                      VII.

                                    If any provision of this Will or of any Codicil thereto
                               Is held to be inoperative, invalid, or 111e9al, it is my
                               intention that all of the remainlng provisions thereof shall
                               continue to be fully operative and effective 50 far as is
                               possible and reasonable.

                                   I herewith affix my si9nature to this Will on this the
                              23rd day of December, 1992 at Santa Fe, Galveston County,
                              Texas In the presence of the undersigned witnesses, who have
                              attested this instrument at my request, and in my presence.


                                                                      J          LAN WELCH, Testator




                                                      CERTIFIED COPY CERTIFICATE
STATE OF TEXAS
COUNTY OF GALVESTON

The above is a full, true, and correct hotogra hie co y of the original record now in my lawful custody and possession. as the same is recorded in
                          On the date above written, JERRY NOLAN WELCH, well known
                      to us declared to us, and in our presence, that this
                      instrument, consisting of 3 pages, is his Last Will and
                      Testament, and that he then signed this instrument in our
                      presence, and at his request, we now sign this Will as
                      witnesses in each other's presence. Further that JERRY
                      NOLAN WELCH,' appeared to us to be of sound mind and lawful
                      age, and under no undue influence.

                      Wi t n e s s ( - , ,\             ,r"


                      V-   Ii    d-// j          ~11,/...-!t L J
                           "
                      Address:     • ~~- / ' /     f                  ' Il
                                                        • -' 7 /:'/1 ,)
                                 /,,':Iv,;o l.<        lie    (7 "V




                      Wi~S:
                      .L~-




                      STA'l'E OF TEXAS
                      COUNTY OF GALVESTON}

                             BEFORE HE, the unde:rs igned author tty, on th is date
                      personally    appeared   JERRY     NOLAN   WELCH,   Testator;
                          -'Dc>N,,!!V;;;;'£R.                                   and
                            WhI_L. __ f.d                         I  the witnesses,
                      respectively, whose' names are subscribed to the annexed or
                      foregoing instrument in their respective capacities, and all
                      of said persons being by me duly sworn, the said JERRY NOLAN
                      WELCH, Testator declared to me and to the said witnesses in
                      my presence that sa1d instrument Is his LAST WILL AND
                      TESTAMENT, and that he had willingly made and executed it as
                      his free act and deed for the purposes therein expressed;
                      and the said witnesses, each on his oath stated to me, in
                      the presence and hearing of the said Testator, that the said
                      Testator had declared to them that said instrument is his
                      LAST WILt AND TESTAMENT, and the he executed same as such
                      and wanted each of them to s19n it as a witness; and upon
                      their oaths each witness stated further that they did slqn
                      the same as witnesses In the presence of the Testator and at
                      his request; that he was at that time eighteen (18) years of
                      age or over, and was of sound mind; and that each of said
                      witnesses was then at least fourteen (14) years of age.
                                                                        H--1.Tl4 nv4t.. av;Ji
                                                                    JE~RY    NOLAN WELCH, TESTATOR
                                                                                                     FrrED




                                                  CERTIFIED COpy CERTIFICATE
STATE OF TEXAS
COUNTY OF GALVESTON
                                                          ~ 4~                                         \}I.!>+<;<--'r ~~ SrAA..b
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                                                                   ~~~ ~""..""" ~ ~ Gorrevr
                                                                 No. 06CV0224-A                                       ~-L 1\ ~v-                                        u..P­
CL YDE ASHWORTH                                                                             IN THE 122ND DISTRICT                                              J3CVO"t~l,
AND PAULA WELCH

v.                                                                                          COURT,GALVESTON                                               1/0\//~ 

AMERIQUEST MORTGAGE
COMPANYFnuALONGBEACH
MORTGAGE                                                                                    COUNTY, TEXAS


                                                      ORDER ON MOTION TO
        =-SUP~P-=L=EME=NT::..,.:...:....=-SUMMAR=:..:.=...:=-=Y,-,,----,,-JUDG==..;=ME,",-=NT:...;..::;....:M=O..:;;.;:TI::.=O:..::...N:"":"=..:..=.r.i?-=F-"'=":'"   Co.)
                                                                                                                                                                      ......
        The Motion of Defendants and Counter Plaintiffs Paula Welch and Clyde
Ashworth to supplement their Motion for Summary Judgment and Responses to
the Motion of Plaintiff Mid Pac is hereby GRANTED.
        It is ORDERED that Defendants' Motion for Summary Judgment and
Responses to the Summary Judgment Motion of Plaintiff Mid Pac shall be deemed
to   have included specific reference to and invocation of Texas Civil Practice &
Remedies Code Sec. 16.025.
        Other Provisions:                      ------~-----------------------




        Signed: March 31, 2014.


                                                                                             Michelle Slaughter
                                                                                             District Judge



                                                                                    3
CORRECTE.O




             549
550
    Acquisition or
 Abandonment of
sa(:tr~~d Property




         551
548
