CAP HOLDINGS, INCORPORATED, doing business as Recovery Management International, Plaintiff - Appellant
KATHLEEN A. LORDEN; JUSTIN PRUITT; GARY E. HAISLER; URIKA R. MENDOZA; JUDITH C. RUSHING; JOYCE M. STEPHAN, Defendants - Appellees
Appeal from the United States District Court for the Western District of Texas.
For Cap Holdings, Incorporated, doing business as: Recovery Management International, Plaintiff - Appellant: Bruce K. Thomas, Law Office of Bruce K Thomas, Dallas, TX.
For Kathleen A. Lorden, Defendant - Appellee: Matthew Albert Nowak, Esq., Trial Attorney, Nowak & Stauch, L.L.P., Dallas, TX; Ashley Anne Smith, Fidelity National Law Group, Dallas, TX.
For Justin Pruitt, Defendant - Appellee: Louis Andrew Oliver, Oliver Law Office, Austin, TX; Ashley Anne Smith, Fidelity National Law Group, Dallas, TX.
For Gary E. Haisler, Urika R. Mendoza, Judith C. Rushing, Joyce M. Stephan, Defendants - Appellees: Matthew Albert Nowak, Esq., Trial Attorney, Nowak & Stauch, L.L.P., Dallas, TX; Ashley Anne Smith, Fidelity National Law Group, Dallas, TX.
Before JOLLY, WIENER, and CLEMENT, Circuit Judges.
E. GRADY JOLLY, Circuit Judge:
In 1990, property encumbered by a deed of trust held by the Resolution Trust Company (" RTC" ) was foreclosed upon and sold to a third party in a tax sale, purportedly extinguishing the RTC's lien. Two years ago, Plaintiff CAP Holdings, Inc.--the alleged current holder of the deed of trust--sued the current owners of the property seeking a declaration that the foreclosure and resulting sale were void for violating 12 U.S.C. § 1825(b)(2), which prohibits " property of the" RTC from being foreclosed upon or sold " without the consent of" the RTC. The district court dismissed CAP Holdings's complaint on the ground that the six-year limitations period had expired. Because our precedent dictates that, if the sale was conducted in violation of § 1825(b)(2), then it indeed is entirely void, and because the district court failed to consider whether the sale's being void would render the defendants without standing under Texas law to assert a limitations defense, we VACATE the district court's judgment and REMAND this case for further proceedings.
In 1985, an entity called the Jefferson Group purchased a 94-acre tract of land in Georgetown, Texas (" the Property" ), using a loan from Lincoln Federal Savings & Loan. In exchange for the loan, the Jefferson Group executed a promissory note in favor of Lincoln in the amount of $5.5 million, secured by a deed of trust on the Property. In 1987, the loan matured, apparently unpaid. In mid-1990, Lincoln failed and went into receivership, with the RTC as its receiver. Soon after, the RTC successfully sued the Jefferson Group over the unpaid note in a Florida court, obtaining a money judgment (" the Florida Judgment." ).
In addition to not paying the note, the Jefferson Group, it seems, also did not
pay its property taxes. Accordingly, in October 1990, the Georgetown Independent School District (" the GISD" ) filed a tax-foreclosure suit against the Property, naming as defendants, among others, the Jefferson Group and the RTC. The RTC answered and appeared at trial in the suit but, apparently, did not argue that under § 1825(b)(2) its consent was required for the GISD to foreclose upon its lien. After obtaining a judgment of foreclosure against all defendants, the GISD purchased the Property. Eventually, subsequent purchasers developed and subdivided the Property into a residential subdivision with approximately 400 houses, including those owned by the defendants.
Meanwhile, in 1995, the RTC was dissolved and the FDIC was substituted as its " statutory successor." See, e.g., FDIC v. Barton, 233 F.3d 859, 862 (5th Cir. 2000). Accordingly, the FDIC assumed ownership of the Jefferson Group loan.
In 1996, the FDIC assigned some of its assets to an entity called the Reliant Group, L.P. Among those assets was an asset referred to in the assignment documentation as " Jefferson Group." According to CAP Holdings, the " Jefferson Group" asset included all of the FDIC's interest in the Jefferson Group loan--that is, both the Florida Judgment and the deed of trust. Following a series of subsequent assignments, CAP Holdings acquired the Jefferson Group asset. After doing so, CAP Holdings filed a notice ...