It’s All About Bandit Austin Lawyer Shelley Hopkins and the BDF Law Partnership in 2023

COMES NOW Intervenor All About Property, LLC (“AAP” or “Intervenor”), and files this Response to Plaintiff MidFirst Bank’s (“MidFirst”) Motion to Strike AAP’s Petition in Intervention and First Supplement to its Original Petition in Intervention (the “Motion to Strike”), and in support thereof would respectfully show the Court as follows:

I.   INTRODUCTION

MidFirst seeks to prevent AAP—the current record owner of the property at issue—from participating in this lawsuit that directly affects AAP’s property rights.

MidFirst argues that AAP lacks a justiciable interest, that AAP’s claims are barred by res judicata, and that AAP’s intervention would complicate the case.

MidFirst further asserts that the outcome of this case will have no effect on AAP’s property interests.

MidFirst’s arguments are without merit.

AAP has a direct and substantial interest in this lawsuit, which will determine the validity of MidFirst’s claimed lien and its right to foreclose on the property owned by AAP.

AAP’s intervention is necessary to protect its property rights, and the intervention is proper under Texas law.

Additionally, res judicata does not bar AAP’s claims because there has been no final judgment on the merits, as the prior federal court judgment is currently on appeal.

Moreover, the issues in this case are not identical to those in the prior federal case.

For these reasons, as more fully explained below,

AAP respectfully requests that the Court deny MidFirst’s Motion to Strike.

II.   BACKGROUND AND FACTS

AAP is the current undisputed record owner of the real property located at 14618 Tab Lane, Houston, Texas 77070 (the “Property”).

As detailed in the petition and supporting exhibits, AAP acquired the Property at a constable’s execution sale on November 2, 2021, following an HOA foreclosure.

AAP holds a Constable’s Execution Deed, recorded in the Harris County Property Records.

MidFirst claims a lien interest in the Property under a Deed of Trust executed by the prior owners, Christopher M. Blair and Karin L. Blair (the “Blairs”), to secure a mortgage loan.

On April 28, 2022, Plaintiff filed an action against Midfirst which was quickly removed to federal court.

Plaintiff’s claims against MidFirst were that they did not have the legal standing to foreclose due to invalid assignments of the subject residential mortgage loan.

AAP also asserted claims of quiet title and alternatively, the equitable right of redemption.

Later, on January 17, 2023, MidFirst filed this lawsuit against the heirs of Christopher Blair, seeking to enforce its alleged lien and to foreclose on the Property.

This is the same lien that AAP was alleging in federal court that MidFirst has no standing under. AAP was not named as a party in MidFirst’s petition against the Blairs, despite being the record owner of the Property.

On March 27, 2023, AAP filed its Petition in Intervention in this state court case, asserting its interest in the Property and raising claims and defenses regarding MidFirst’s purported lien.

Meanwhile, in the Federal case, AAP moved for abstention due to the state court case being filed, and Midfirst moved for summary judgment.

A summary judgment was granted for Midfirst and AAP’s motion for abstention was denied on February 8, 2024.

AAP appealed to the 5th Circuit, and the appeal has not been decided.

The latest event was AAP’s reply brief was filed earlier this month on September 6, 2024.

Now, MidFirst has moved to strike AAP’s intervention in the state court case, arguing that AAP lacks a justiciable interest, that its claims are barred by res judicata, and that its intervention would complicate the case.

However, AAP has a direct and substantial interest in this lawsuit, which will determine the validity of MidFirst’s claimed lien and its right to foreclose on the Property owned by AAP.

III.  ARGUMENTS AND AUTHORITIES

A.  AAP Has a Justiciable Interest in This Lawsuit

Under Texas law, a person or entity may intervene in a lawsuit if it could have brought the same action, or any part thereof, in its own name, or if it would be able to defeat recovery, in whole or in part, if the action had been brought against it.

In re Union Carbide Corp., 273 S.W.3d 152, 154–55 (Tex. 2008); Tex. R. Civ. P. 60.

A justiciable interest is a direct and substantial interest in the subject matter of the litigation such that the intervenor will either gain or lose by the judgment.

Law Offices of Windle Turley, P.C. v. Ghiasinejad, 109 S.W.3d 68, 70 (Tex. App.—Fort Worth 2003, no pet.).

The purpose of intervention is to avoid a multiplicity of suits by resolving related claims in one proceeding.

Guar. Fed. Sav. Bank v. Horseshoe Operating Co., 793 S.W.2d 652, 657 (Tex. 1990).

Here, AAP has a direct and substantial interest in the subject matter of this lawsuit.

As the current record owner of the Property, AAP’s ownership rights will be directly affected by the outcome of this case.

If MidFirst is permitted to foreclose on the Property, AAP stands to lose its ownership interest.

AAP is entitled to protect its property rights and to challenge the validity of MidFirst’s claimed lien and its right to foreclose.

“[W]hen the third party has a property interest, whether legal or equitable, that will be affected by [a foreclosure] sale, the third party has standing to challenge such a sale to the extent that its rights will be affected by the sale.”

Morlock, L.L.C. v. Nationstar Mortg., L.L.C., 447 S.W.3d 42, 45 (Tex. App.—Houston [14th Dist.] 2014, pet. denied).

Moreover, AAP could have brought the same action in its own name, and in fact has previously brought an action against MidFirst regarding the same property and issues.

Therefore, AAP has a justiciable interest in this lawsuit and is entitled to intervene. See id.

B.  AAP’s Intervention Is Proper and Necessary

While the trial court has some discretion to strike a petition in intervention, such discretion is abused when the intervenor meets the test for intervention and striking the intervention would prejudice the intervenor’s rights.

See In re Union Carbide Corp., 273 S.W.3d at 155; Guar. Fed. Sav. Bank, 793 S.W.2d at 657.

The test for intervention requires that:

(1) the intervenor could have brought the same action, or any part thereof, in its own name, or, if the action had been brought against it, it would be able to defeat recovery, in whole or in part;

(2) the intervention will not complicate the case by an excessive multiplication of the issues;

and

(3) the intervention is essential to effectively protect the intervenor’s interest.

See Guar. Fed. Sav. Bank, 793 S.W.2d at 657. AAP meets all these criteria:

1.               As discussed above, AAP could have brought (and has brought) the same action in its own name.

2.                      AAP’s intervention will not complicate the case unduly or cause an excessive multiplication of the issues. The issues raised by AAP are directly related to the existing claims and defenses in this case, and AAP’s participation will promote judicial economy by resolving all related claims in a single proceeding.

3.                   AAP’s intervention is essential to effectively protect its interests. As the current owner of the Property,

AAP’s property rights are directly at stake in this lawsuit.

If AAP is not allowed to participate, it will be unable to protect its ownership interest and challenge the validity of MidFirst’s claimed lien and right to foreclose.

“In general, an action to foreclose on a lien is an ‘in rem’ proceeding, and only those individuals or entities having a current interest in the property subject to foreclosure are necessary parties to a foreclosure suit.

Hibernia Energy III, LLC v. Ferae Naturae, LLC, —S.W.3d —, 2022 WL 17819744, at *7 (Tex. – App. El Paso 2022, no pet.) (citing Pereira v. Gulf Elec. Co., 343 S.W.2d 334, 336 (Tex. App.–Waco 1960, writ ref’d n.r.e.)

(while a former owner of property may be a proper party in a suit to foreclose a lien, the former owner is not a necessary party in an “in rem” proceeding);

Hartfield v. Greber, 207 S.W. 85, 86 (Tex. [Comm’n Op.] 1918)

(“It is a well- settled rule of the common law that, in a suit to foreclose a mortgage, it is not necessary to make the debtor a party to the suit, where he has parted with his interest in the property, unless a personal judgment is sought against him.”)

Furthermore, under the Texas Declaratory Judgments Act, when declaratory relief is sought, all persons who have or claim any interest that would be affected by the declaration must be made parties.

Tex. Civ. Prac. & Rem. Code § 37.006(a).

MidFirst is seeking declaratory relief in this case regarding the validity and enforceability of its lien.

As the record owner of the Property, AAP is a necessary party to this action.

C.  Res Judicata Does Not Bar AAP’s Claims

MidFirst argues that AAP’s claims are barred by res judicata due to a prior federal court judgment involving the same parties and issues.

This argument fails because there is no final judgment on the merits, as the federal court judgment is currently on appeal, and the issues in this case are not identical to those in the prior case.

Under Texas law, the doctrine of res judicata, or claim preclusion, prevents the relitigation of claims that have been finally adjudicated or that arise out of the same subject matter and could have been litigated in a prior action. To establish res judicata, the following elements must be proven:

1.              A prior final judgment on the merits by a court of competent jurisdiction;

2.              Identity of parties or those in privity with them; and

3.              A second action based on the same claims as were raised or could have been raised in the first action.

See Citizens Ins. Co. of Am. v. Daccach, 217 S.W.3d 430, 449 (Tex. 2007).

In this case, the federal court judgment is not final because it is currently on appeal to the United States Court of Appeals for the Fifth Circuit.

Under Texas law, a judgment is not considered final for purposes of res judicata until it is final on appeal.

See Scurlock Oil Co. v. Smithwick, 724 S.W.2d 1, 6 (Tex. 1986)

(“[A] judgment is not final so long as appellate proceedings are pending.”);

see also Mower v. Boyer, 811 S.W.2d 560, 562 (Tex. 1991).

Therefore, res judicata does not apply because there is no final judgment on the merits.

Moreover, the issues in this case are not identical to those in the prior federal case.

In the federal case, AAP asserted claims against MidFirst challenging its standing to foreclose. In this state court case, MidFirst is seeking to foreclose on the Property by enforcing its alleged lien against the heirs of Christopher Blair, without including AAP—the current owner of the Property—as a party. AAP’s intervention raises defenses and claims necessary to protect its property rights in response to MidFirst’s claims.

Additionally, under Texas law, res judicata does not bar defenses that could not have been raised in the prior action, or that are necessary to protect a party’s property rights in a subsequent action.

See Texas Beef Cattle Co. v. Green, 921 S.W.2d 203, 211 (Tex. 1996).

D.  The Outcome of This Case Will Directly Affect AAP’s Property Interests

MidFirst asserts that the results of this case will have no effect on AAP’s property interests.

This assertion is incorrect.

MidFirst is seeking to enforce its claimed lien and to foreclose on the Property.

Such foreclosure would divest AAP of its ownership interest in the Property.

AAP has a constitutional right to protect its property from wrongful foreclosure.

See Tex. Const. art. I, § 19 (due course of law).

Denying AAP the opportunity to participate in this case would deprive AAP of due process and the ability to protect its property rights.

Therefore, the outcome of this case will directly and substantially affect AAP’s property interests, and AAP must be allowed to participate in this lawsuit to protect those interests.

IV. CONCLUSION AND PRAYER

For the foregoing reasons, AAP respectfully requests that the Court deny MidFirst Bank’s Motion to Strike AAP’s Petition in Intervention and First Supplement to its Original Petition in Intervention, and allow AAP to participate in this case as an intervenor.

WHEREFORE, PREMISES CONSIDERED, Intervenor All About Property, LLC prays that the Court deny MidFirst Bank’s Motion to Strike, allow AAP’s intervention in this case, and grant such other and further relief to which AAP may be justly entitled.

Respectfully submitted,

JEFFREY JACKSON & ASSOCIATES, PLLC

By: /s/ Jeffrey C. Jackson

Jeffrey C. Jackson
State Bar No. 24065485
2500 E. TC Jester Blvd., Suite 285
Houston, Texas 77008
Tel: (713) 861-8833
Fax: (713) 682-8866
Email: jeff@jjacksonllp.com

ATTORNEY FOR INTERVENOR ALL ABOUT PROPERTY, LLC

TO THE HONORABLE JUDGE OF SAID COURT:

NOW COMES Plaintiff MidFirst Bank (hereinafter “Plaintiff” or “MidFirst”) and files this its Motion to Strike All About Property, LLC’s (“AAP” or “Intervenor”) Petition in Intervention (“Intervention”) and AAP’s First Supplement to its Original Petition in Intervention (“Supplement”) and in support thereof respectfully shows the Court as follows:

I.    INTRODUCTION & BACKGROUND

1.                  On January 17, 2023, MidFirst filed this lawsuit against Defendants Karin Leslie Blair and Kacey Mikelle Blair (collectively “Defendants”) as the heirs of Christopher Michael Blair (“Decedent’), who was an obligor on a loan agreement secured by the Property made the subject of this suit.

Decedent and Karin Blair were obligors on the Note and Deed of Trust secured by the Property.

See MidFirst’s Original Petition. Decedent passed away on June 2, 2021 and no probate proceeding has been opened for his Estate. Id.

2.                  MidFirst filed this suit in order to obtain judgment rescinding the vendor’s lien retained in the warranty deed to Decedent and Karin Blair, to enforce a statutory in rem lien as to the Property and for judgment allowing the foreclosure to proceed against the Property.

3.                  Shortly after Decedent’s death, on August 16, 2021, the Hunters Valley Homeowners Association’s obtained an order allowing foreclosure pursuant to Tex. R. Civ. P. 736 due to unpaid homeowner’s association dues.

On November 21, 2021, attempted Intervenor All About Property, LLC (“AAP”) purchased the Property at constable sale.

4.                  Prior to learning of Decedent’s death, MidFirst posted the Property for the May 2022 foreclosure sale.

AAP then filed suit to stop the foreclosure sale, asserting the identical claims it asserts in its Intervention.

See Intervention and Exhibit A – AAP’s Original Petition (“2022 Lawsuit”).

Thereafter, MidFirst removed AAP’s suit to federal court, Case No. 4:22-cv-01684.

5.                  AAP does not deny the existence of separate lawsuit essentially challenging MidFirst’s authority to foreclose under the deed of trust.

See AAP’s Intervention at ¶ 9.

However, AAP fails to advise this Court that MidFirst was granted summary judgment in the 2022 Lawsuit, thereby dismissing AAP’s claims with prejudice.

See Exhibit B – Order of February 8, 2024 (granting final judgment).

6.                  In the judgment, the Southern District of Texas specifically addresses all of AAP’s claims, finding none have merit, including its argument that MidFirst lacks standing to foreclose, asserting claim for quiet title, declaratory judgment that AAP owns the Property and that AAP is entitled to equitable redemption. Id.

Further, the Southern District declined to abstain from asserting jurisdiction during the pendency of this state court lawsuit (as AAP requested) stating,

“AAP was not even a party until it sought to be. Further this lawsuit was first filed. AAP cannot avoid this lawsuit by voluntarily joining an unrelated state court case.”

Id.

7.                  AAP then appealed to the United States Court of Appeals for the Fifth Circuit, on appeal focusing solely on the Court’s failure to abstain and its equitable redemption claim.

8.                  All issues that AAP attempts to assert herein through its Intervention have already been ruled on by a competent court of law and AAP’s collateral attack on MidFirst’s judgment by way of “intervention” is impermissible.

9.                  As evidenced by the pleadings on file, this matter concerns the loan agreement and the interests of the Decedent’s heirs as it relates to the lien and foreclosure.

While AAP may have an ownership interest in the Property, that interest is and always has been subject to MidFirst’s lien.

AAP is not a party to the loan agreement and has no right to re-litigate its claims in this case or block MidFirst’s foreclosure.

As has always been the case, AAP can simply payoff the outstanding balance of MidFirst’s lien in order to prevent the foreclosure.

Therefore, MidFirst respectfully requests the Court strike AAP’s Petition in Intervention and Supplement.

II.     ARGUMENT & AUTHORITIES

A.                The Standard for Intervention.

10.              Pursuant to the Texas Rules of Civil Procedure, “[a]ny party may intervene by filing a pleading, subject to being stricken out by the court for sufficient cause on the motion of any party.”

Tex. R. Civ. P. 60.

Once a motion to strike has been filed, the burden shifts to the intervenor to show a justiciable interest in the lawsuit.

In re Union Carbide Corp., 273 S.W.3d 152, 155 (Tex. 2008); Guniganti v. Kalvakuntla, 346 S.W.3d 242, 247 (Tex. App.—Houston [14th Dist.] 2011, no pet.).

11.              However, if the intervenor somehow meets its burden to show a justiciable interest, the intervenor must still persuade the court that intervention is proper.

“Even if a party has a justiciable interest, and thus a right to intervene in a lawsuit, the trial court still has broad discretion to determine whether the plea in intervention should be struck.”

Guaranty Federal Savings Bank v. Horseshoe Operating Co., 793 S.W.2d 652, 657 (Tex. 1990); see also J. Fuentes Colleyville, L.P. v. A.S., 501 S.W.3d 239, 243 (Tex. App. 2016).

12.              Under the analysis set out by the Texas Supreme Court, a petition in intervention is only permissible where:

(1) the intervenor “could have brought the same action, or any part thereof, in his own name, or, if the action had been brought against him, he would be able to defeat recovery, or some part thereof,”

(2) the intervention would not “complicate the case by an excessive multiplication of the issues,”

and

(3) the intervention “is almost essential to effectively protect the intervenor’s interest.” Id.

(citing Inter–Continental Corp. v. Moody, 411 S.W.2d 578, 589 (Tex. App. 1966) and Texas Supply Center, Inc. v. Daon Corp., 641 S.W.2d 335, 337 (Tex. App. 1982)).

In contrast, the absence any of these factors provides “independent grounds” for striking an intervention.

Morvant v. Dallas Airmotive, Inc., No. 02-19-00049-CV, 2020 WL 241424, at *4 (Tex. App. Jan. 16, 2020).

B.                 AAP Lacks Justiciable Interest.

13.              The Court should strike AAP’s Petition in Intervention and First Supplement to its Original Petition in Intervention because AAP lacks justiciable interest.

To establish a justiciable interest, intervenor must establish a present legal or equitable interest in the subject matter that makes it proper for it to participate in the proceeding.

Jabri v. Alsayyed, 145 S.W.3d 660, 672 (Tex. App.—Houston [14th Dist.] 2004, no pet.).

An intervenor does not have a justiciable interest in the lawsuit where its interest would be adequately protected by a separate suit.

Jabri v. Alsayyed, 145 S.W.3d 660, 672 (Tex. App. 2004).

14.              AAP does not have a justiciable interest in this matter as this case relates to the interests of Karin Leslie Blair and Kacey Mikelle Blair and any interest they have in the Property obtained through the death of Decedent and the loan agreement.

AAP is not a party to this loan agreement and has had its opportunity to file a separate suit, asserting the same claims.

C.                AAP’s Intervention is Barred by Res Judicata.

15.              Even if the Court determines that AAP has a justiciable interest in the case, AAP’s intervention is not proper as its claims are barred by res judicata.

16.              Res judicata precludes the re-litigation of claims that have been finally adjudicated, or that arise out of the same subject matter and that could have been litigated in the prior action.

Barr v. Resolution Trust Corp., 837 S.W.2d 627, 628 (Tex. 1992); Igal v. Brightstar Info. Tech. Grp., Inc., 250 S.W.3d 78, 86 (Tex. 2008).

It requires proof of the following elements:

(1) a prior final judgment on the merits by a court of competent jurisdiction;

(2) identity of parties or those in privity with them;

and

(3) a second action based on the same claims as were raised or could have been raised in the first action. See Texas Water Rights Comm’n v. Crow Iron Works, 582 S.W.2d 768, 771-72 (Tex. 1979).

17.              AAP has had ample opportunity to litigate its claims against MidFirst and its arguments regarding the loan agreement and lost in the 2022 Lawsuit.

A final judgment on the merits by a court of competent jurisdiction exists in the 2022 Lawsuit.

See Exhibit B. The parties are identical to that suit. Id. Finally, all of AAP’s claims asserted in its Intervention were asserted in the 2022 Lawsuit. Id.

D.                The Results of This Case Have No Effect on AAP’s Property Interests.

18.              Additionally, Court should strike AAP’s Intervention and Supplement because the results of this cause will have no effect on AAP’s interest in the Property.

MidFirst filed suit against Defendants seeking for the court to rescind the vendor’s lien, enforce a statutory probate lien and grant judgment for foreclosure.

The judgment alone does not impact AAP’s title. AAP’s title to the Property is, and has always been, subject to the payment of MidFirst’s lien.

AAP can payoff the lien at any time prior to foreclosure of the Property.

For the reasons stated herein, this Court should strike AAP’s Petition in Intervention and AAP’s First Supplement to its Original Petition in Intervention.

III.    CONCLUSION

WHEREFORE, PREMISES CONSIDERED, Plaintiff MidFirst Bank requests that the Court strike All About Property, LLC’s Petition in Intervention and First Supplement to its Original Petition in Intervention, and grant MidFirst all such other and further relief to which it may show itself to be justly entitled.

Respectfully submitted,

By:   /s/ Shelley L. Hopkins

Shelley L. Hopkins State Bar No. 24036497

BARRETT DAFFIN FRAPPIER TURNER & ENGEL, LLP – Of Counsel
2802 Flintrock Trace, Suite B103 Austin, Texas 78738
(512) 600-4320
ShelleyH@bdfgroup.com
shelley@hopkinslawtexas.com

Robert D. Forster, II
State Bar No. 24048470

BARRETT DAFFIN FRAPPIER TURNER & ENGEL, LLP
4004 Belt Line Road, Ste. 100
Addison, Texas 75001
(972) 386-5040

RobertFO@bdfgroup.com

Attorneys for Plaintiff