Elmore v. McCammon

• Decision Date: 18 July 1986
• Docket Number: Civ. A. No. H-85-5711.
• Citation: Elmore v. McCammon, 640 F.Supp. 905 (S.D. Tex. 1986)
• Parties: James D. ELMORE, Sr. v. Mark L. McCAMMON, Special Agent Rodriguez and Other Unknown Agents, Ronald Scott, Bracewell & Patterson and Other Unknown Agents, Marcella Perry, Heights Savings Association and One or More Unknown Banks and Unknown Agents; and John and Jane Does (1 to 25).
• Court: U.S. District Court — Southern District of Texas

640 F. Supp. 905

James D. ELMORE, Sr. v.Mark L. McCAMMON, Special Agent Rodriguez and Other Unknown Agents, Ronald Scott, Bracewell & Patterson and Other Unknown Agents, Marcella Perry, Heights Savings Association and One or More Unknown Banks and Unknown Agents; and John and Jane Does (1 to 25).

Civ. A. No. H-85-5711.

United States District Court, S.D. Texas, Houston Division.

July 18, 1986.

James D. Elmore, Sr., pro se.

Mark E. Lowes and Tracie J. Renfroe, Bracewell & Patterson, Houston, Tex., and Christopher S. Cole, Tax Div., Dept. of Justice, Dallas, Tex., for defendants.

MEMORANDUM AND ORDER

DeANDA, District Judge.

Plaintiff, a pro se litigant, has filed suit against numerous Defendants alleging improprieties in the foreclosure sale and enforcement of tax liens on a piece of real property in Montgomery County, Texas.The law of this circuit requires the Court to give extreme deferrence to a pro se litigant and search the record for any legitimate claims the Plaintiff may have.See, e.g., Patterson v. Patterson,767 F.2d 916(5th Cir.1985);Green v. McKaskle,788 F.2d 1116(5th Cir.1986).In keeping with this rule, the Court has endeavored to pierce the pleadings and investigate the factual basis for Plaintiff's claims by converting Defendants' motions to dismiss into motions for summary judgment.Having reviewed the pleadings and the record, the Court has determined that Plaintiff's claims are completely frivolous and that Defendants are entitled to summary judgment or dismissal as to each claim, as well as sanctions against Plaintiff under Federal Rule of Civil Procedure 11.

There are only two issues properly before the Court.First, Plaintiff claims that his bid of $23.00 in silver at a foreclosure sale pursuant to a deed of trust, to which he was not a party, entitles him to ownership of over six acres of property in Montgomery County, Texas.Second, Plaintiff claims that Internal Revenue Service employees exceeded the scope of their authority in connection with a foreclosure of the same property pursuant to a federal tax lien.Having found no genuine issues of material fact relating to these two issues, the Court grants summary judgment in favor of Defendants.In addition, after construing the complaint in Plaintiff's favor, the Court dismisses Plaintiff's remaining allegations for lack of subject matter jurisdiction or failure to state a cause of action.

This litigation arises from an August 6, 1985 foreclosure sale of certain Montgomery County, Texas real property.Sale was pursuant to a deed of trust signed by Danford P. Vella, who was the record owner of the property at that time but who is not a party to this lawsuit.Plaintiff Elmore bid $23.00 in silver at the sale and claims lawful ownership as a result of his bid.Plaintiff alleges that Defendants' actions, both in connection with the sale of the property and following the sale of the property, wrongfully deprived him of his rights.Plaintiff seeks declaratory relief, injunctive relief and compensatory and punitive damages.

At the March 12, 1986 conference, the Court dismissed Plaintiff's complaint filed pursuant to 42 U.S.C. § 1981 but granted him leave to amend his complaint by March 28, 1986.

During the same conference, the Court converted Defendants' motions to dismiss into motions for summary judgment in order to allow both sides to fully develop the factual assertions behind the pleadings.Fed.R.Civ.P. 12(b);Northeast Georgia Radiological Ass'n. v. Tidwell,670 F.2d 507, 511 n. 7(5th Cir.1982)citing 5 C. Wright & A. Miller;Federal Practice & Procedure§ 1366(1969)and 10C. Wright, A. Miller & M. Kane, Federal Practice & Procedure§ 2713(1983).¹

Summary judgment is proper when there are no genuine issues of material fact.Fed.R.Civ.P. 56(c).As a result of this Court's converting the pending motions to dismiss into motions for summary judgment, the burden on Defendants has changed.As proponents of the motions, Defendants must convince the Court that judgment in their favor is proper as a matter of law.The Court, in turn, must resolve all doubts in favor of Plaintiff.See generally10A C. Wright, A. Miller & M. Kane, Federal Practice and Procedure§ 2725(1983).The Court concludes that all Defendants have met their burdens on the summary judgment issues.

The first issue for summary judgment concerns Plaintiff's alleged purchase at the August 6, 1985 sale.Plaintiff claims that Substitute Trustee Casey wrongfully entered a bid in the form of a credit in favor of the mortgagee, Heights Savings Association.The bid was for the total amount of indebtedness due Heights from the mortgagor Danford P. Vella.Affidavits of Defendants Perry and Heights, as well as Plaintiff's Exhibits 1, 3 and 4, refer to Vella's deed of trust as authorizing the sale.

In Texas, both statutory notice provisions and contract principles govern foreclosure sales pursuant to deeds of trust.Beyond the minimum statutory notice provisions, Tex.Prop.Code § 51.002(Vernon 1984), contract principles mandate strict conformity to the deed of trust.²Slaughter v. Qualls,139 Tex. 340, 162 S.W.2d 671, 675(1942);Chapa v. Herbster,653 S.W.2d 594, 602(Tex.App. — Tyler 1983, no writ).

Consistent with traditional contract principles, Texas case law restricts standing to attack a foreclosure sale pursuant to a deed of trust to the mortgagor or those whose property interests or rights are affected by the sale.American Savings & Loan Ass'n v. Musick,531 S.W.2d 581, 586(Tex.1976);Grimes v. Owens,539 S.W.2d 387, 390(Tex.Civ.App.—Tyler1976, writ ref'd n.r.e.).

Based on Defendants' affidavits, the Court finds no property interest in Plaintiff prior to the substitute trustee's sale.Plaintiff, however, alleges that he purchased the property lawfully and thereby acquired a property interest.This is Plaintiff's attempt to satisfy the requirement that a party's rights must be affected in order to contest a deed of trust foreclosure sale.Plaintiff's assertions lack merit, however, and fail to raise genuine issues of material fact for several reasons.

First, Plaintiff asserts that his $23.00 bid in silver coin overrides the credit entered by the substitute trustee in favor of Heights.It is settled law in Texas that a credit so entered is the equivalent of cash.Blum v. Rogers,71 Tex. 668, 679, 9 S.W. 595, 597(1888).Further, even those parties whose standing to contest the sale is protected may not complain when a credit bid is entered in favor of a mortgagee in spite of a deed of trust provision requiring a "cash" sale.SeeMcClure v. Casa Claire Apartments, Ltd.,560 S.W.2d 457, 461(Tex.Civ.App.—Beaumont 1977, no writ)(Holder of the deed of trust cannot attack a credit bid by the mortgagee);Habitat, Inc. v. McKanna,523 S.W.2d 787, 789-90(Tex.Civ.App.—Eastland 1975, no writ)(Holder of a junior lien was denied standing to complain).Since parties with ascertainable property interests in the foreclosed property may not complain of a credit entered in lieu of cash, Plaintiff may not assert priority over a $24,538.46 credit based on a $23.00 bid in silver coin so as to claim ownership to over six acres of real estate.

Plaintiff's next assertion is that as an artificial entity, Heights Savings Association cannot possess real property; this is incorrect as a matter of law, and therefore raises no issues of fact.Tex.Rev.Civ.Stat. Ann. art. 852a § 5.04(VernonSupp.1986).

While continuing to note that Plaintiff is not a proper party to contest the sale, the Court nonetheless finds that Plaintiff raises no issue of material fact by his allegation of improper self-dealing by Heights.Plaintiff apparently bases his assertion on the fact that the substitute trustee entered the bid on Heights' behalf.Since Texas law consistently upholds the mortgagee's power to bid at a deed of trust sale, whether directly or through a substitute trustee, the Court finds that the fact that the substitute trustee entered a bid in favor of the mortgagee is immaterial as a matter of law.American Savings & Loan Ass'n v. Musick,531 S.W.2d 581(Tex.1976);Tarrant Savings Ass'n v. Lucky Homes, Inc.,390 S.W.2d 473(Tex.1964).

The Court thus grants summary judgment in favor of Defendants Scott, Perry and Heights Savings Association on the issue of Plaintiff's claims of ownership of the Montgomery County property in question.

The second issue for summary judgment involves Plaintiff's assertions that I.R.S. employees McCammon and Rodriguez exceeded the bounds of their authority in attempting to enforce a federal tax lien on the Montgomery County property.McCammon and Rodriguez offered extensive affidavit and documentary proof relating to both the general course and scope of their duties and their particular involvement with the tax lien foreclosure at issue in this litigation.

First, Plaintiff's allegations that the I.R.S. employees deprived him of his property and committed trespass by enforcing the lien necessarily fail to raise factual issues since the Court has determined that Plaintiff acquired no interest in the Montgomery County property on August 8, 1985.

Plaintiff's remaining allegations that the I.R.S. employees disregarded constitutional mandates fail as well to raise genuine issues of material fact.Plaintiff failed to refute the I.R.S. Defendants' overwhelming summary judgment evidence concerning the scope and exercise of their authority in connection with the sale.Plaintiff has failed as well to refute the I.R.S. Defendants' proof of operation within the course and scope of their statutory authority.See26 U.S.C. § 6335(1982);Treas. Reg. § 301.6335-1(b)(2);Internal Revenue Manual¶ 5361.3.See alsoDefendants' McCammon and Rodriguez Exhibit B.Therefore, the Court finds as a matter of law that Defendants McCammon and Rodriguez were acting within the course and scope of their I.R.S. employment and lawful authority in connection with the attempted...