No: 11-0555

FILED IN THE SUPREME COURT OF TEXAS 11 October 19 P2:36 BLAKE. A. HAWTHORNE CLERK

In The Supreme Court Of Texas

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., AS NOMINEE FOR GREENPOINT FUNDING,
Petitioner

v. NANCY GROVES,
Respondent

On Appeal from Cause No. 14-10-00090-CV Fourteenth Court of Appeals Houston, Texas

PETITION FOR REVIEW

AKERMAN SENTERFITT, LLP Michael J. McKleroy, Jr. SBN: 2400095 C. Charles Townsend SBN: 24028053 Elizabeth A. Mazzarella SBN: 24069320 2001 Ross Avenue, Suite 2550 Dallas, Texas 75201 Telephone: 214.720.4300 Facsimile: 214.981.9339 ATTORNEYS FOR PETITIONER

IDENTITY OF PARTIES & COUNSEL

PETITIONER: Mortgage Electronic Registration Systems, Inc., as nominee for GreenPoint Funding ("MERS") COUNSEL FOR PETITIONER/APPELLANT/DEFENDANT: Michael J. McKleroy, Jr. C. Charles Townsend Elizabeth A. Mazzarella 2001 Ross Avenue, Suite 2550 Dallas, Texas 75201 Tel: (214) 720.4300 Fax: (214) 981-9339 RESPONDENT: Nancy Groves COUNSEL FOR RESPONDENT/APPELLEE/PLAINTIFF: G.P. Matherne Attorney at Law PO Box 547 Spring, TX 77383 Tel: (713) 827-1702 Fax: (281) 353-2651

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TABLE OF CONTENTS

IDENTITY OF PARTIES & COUNSEL ................................................................................................ i TABLE OF CONTENTS ..................................................................................................................... ii TABLE OF AUTHORITIES ............................................................................................................... iii STATEMENT OF THE CASE .............................................................................................................. v STATEMENT OF JURISDICTION ...................................................................................................... vi ISSUES PRESENTED ....................................................................................................................... vii STATEMENT OF THE FACTS ............................................................................................................ 1 SUMMARY OF THE ARGUMENT ...................................................................................................... 2 ARGUMENTS & AUTHORITIES ....................................................................................................... 4 A. B. The Panel Incorrectly Allowed Groves to Void The Voluntary Lien .......................... 4 The Panel's Opinion Conflicts With This Court's Opinion In Martin v. Amerman and Highlights the Conflicts Between the Courts of Appeal ............................................................................................................................ 6 Because Groves Failed To Plead A Cause Of Action Not Invalid On Its Face, The Default Judgment Is Not Supported By Pleadings And Reversal Is Necessary ....................................................................................................... 9

C.

PRAYER ......................................................................................................................................... 12 APPENDIX .................................................................................................................................. A-1 EXHIBIT A - PLAINTIFF'S ORIGINAL PETITION ................................................................... A-2 EXHIBIT B - FINAL DEFAULT JUDGMENT ............................................................................ A-6 EXHIBIT C - MEMORANDUM OPINION & JUDGMENT .........................................................A-10

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TABLE OF AUTHORITIES

CASES Acker v. Texas Water Comm'n, 790 S.W.2d 299 (Tex. 1990) ...................................................... 11 Arrington v. McDaniel, 14 S.W.2d 1009 (Tex. Comm'n App. 1929, judgm't adopted) ................ 4 Bonham St. Bank v. Beadle, 907 S.W.2d 465 (Tex. 1995) ............................................................. 5 Broyles v. Chase Home Fin., No. 3:10-CV-2256-G, 2011 WL 1428904 (N.D. Tex. Apr. 13, 2011)......................................................................................................... 11 Cameron v. Terrell & Grant, Inc., 618 S.W.2d 535 (Tex. 1981) ................................................. 11 Cecil v. Hydorn, 725 S.W.2d 781 (Tex. App.San Antonio 1987, no writ)............................... 12 Centurion Planning Corp. v. Seabrook Venture II, 176 S.W.3d 498 (Tex. App.Houston [1st Dist.] 2004, no pet.) .............................................. 11 Cearley v. Cearley, 331 S.W.2d 510 (Tex. Civ. App.Dallas 1960, no writ) ............................. 4 First Dallas Petroleum, Inc. v. Hawkins, 727 S.W.2d 640 (Tex. App.Dallas 1987, no writ) ............................................................................................. 9 Florey v. Estate of McConnell, 212 S.W3d 439 (Tex. App.Austin 2006, pet. denied).................................................................................. vi, 8 Gordon v. W. Houston Trees, Ltd., Case No. 01-09-00269-CV, 2011 WL 1598790 (Tex. App.Houston [1st Dist.] Apr. 28, 2011, no pet.) ......................................................... 10 Hornbuckle v. Countrywide Home Loans, Inc., No. 02-09-00330-CV, 2011 WL 1901975, at (Tex. App.Fort Worth May 19, 2011, no pet.).................................. 10 Jackson v. Biotectronics, Inc., 937 S.W.2d 38 (Tex. App.Houston [14th Dist.] 1996, no writ) ...................................................................... 9 Jordan v. Bustamonte, 158 S.W.3d 29 (Tex. App.Houston [14th Dist.] 2005, pet denied) ............................................................ 6, 7 Kennesaw Life & Acc. Ins. Co. v. Goss, 694 S.W.2d 115 (Tex. App.Houston [14th Dist.] 1985, writ ref'd n.r.e.) .......................................................... 7 Martin v. Amerman, 133 S.W.3d 262 (Tex. 2004) .......................................................... vi, vii, 2, 6 Perez v. Briercroft Serv. Corp., 809 S.W.2d 216 (Tex. 1991) ...................................................... 4 Poag v. Flories, 317 S.W.3d 820 (Tex. App.Fort Worth 2010, pet. denied)........................... vi, 8 Stein v. Chase Home Fin., LLC, No. 09-1995, 2010 WL 47366828, (D. Minn. Aug. 13, 2010, adopted, 2010 WL 4736233 (D. Minn. Nov. 16, 2010) ................. 10 Stoner v. Thompson, 578 S.W.2d 679 (Tex. 1979)......................................................................... 9 Teon Mgmt., LLC v. Turquoise Bay Corp., No. 11-10-050-CV, 2011 WL 1326325 (Tex. App.Eastland 2011, no pet.) ..................................................................................... vi, 8

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Tex. Indus., Inc. v. Vaughan, 919 S.W.2d 798 (Tex. App.Houston [14th Dist.] 1996, writ denied) ............................................................... 4 World Sav. Bank v. Alaniz, No. 01-06-00549-CV, 2007 WL 1018416 (Tex. App.Houston [1st Dist.] April 5, 2007, no pet.).......................................................... 12 Wortham v. Dow Chem. Co., 179 S.W.3d 189 (Tex. App.Houston [14th Dist.] 2005, no pet.) ...................................................................... 4 STATUTES TEX. CIV. PRAC. & REM. CODE 37.006(a) ................................................................................ 4, 5 TEX. GOV'T CODE 22.001(a)(2)................................................................................................... vi TEX. GOV'T CODE 22.001(a)(6)................................................................................................... vi TEX. PROP. CODE 51.0001(3) ................................................................................................ 11 TEX. PROP. CODE 51.0001(4) ................................................................................................ 11 TEX. PROP. CODE 51.0025..................................................................................................... 11 TEX. R. CIV. P. 47 ....................................................................................................................... 4 TEX. R. APP. P. 56.1(a)(2) ...........................................................................................................vi TEX. R. APP. P. 56.1(a)(5) ........................................................................................................... vi TEX. R. APP. P. 56.1(a)(6) ........................................................................................................... vi

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STATEMENT OF THE CASE Nancy Groves ("Groves") brought a "show-me-the-note" suit to have the mortgage lien against her property, voluntarily executed by her, declared invalid. Based solely upon the allegation that, because MERS1 did not possess the original promissory note, Groves claimed the deed of trust was therefore "invalid and of no force or effect." Groves brought this claim under the Texas Uniform Declaratory Judgment Act ("TDJA"). Groves filed this suit in the 334th District Court of Harris County, Texas, the Honorable Sharon McCally presiding. Groves filed a no-answer motion for default judgment against

MERS. The trial court granted Groves's motion and entered a Final Default Judgment in favor of Groves on September 24, 2009. The trial court's declaratory judgment voided the deed of trust and removed it from Groves's property. Less than six months later, MERS filed a restricted appeal of the default judgment to the Fourteenth Court of Appeals. On April 12, 2011, the panel of Justices Brown, Boyce, and Jamison issued an opinion, authored by Justice Boyce, affirming the judgment of the trial court. The citation for the Court of Appeals is 14-10-00090-CV and 2011 WL 1364070. MERS filed a motion for rehearing or, in the alternative, reconsideration en banc, which was subsequently denied.

As nominee for the lender GreenPoint Funding.

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STATEMENT OF JURISDICTION The Supreme Court has jurisdiction over this appeal because the Court of Appeals committed an error of law of such importance to the state's jurisprudence, it should be corrected. See TEX. GOV'T CODE 22.001(a)(6); TEX. R. APP. P. 56.1(a)(5), (6). Specifically, the Court of Appeals committed three errors of law in affirming a no-answer default judgment declaring MERS' lien invalid (1) brought under the TDJA; (2) upon such allegations which, it taken as true, require the existence of persons whose interest's would be affected by the declaration, but were not joined; and (3) based upon the erroneous legal theory that possession of the original note affects the enforceability of the deed of trust. The Court of Appeals' decision now opens the door for "show-me-the-note" challenges to do more than merely delay enforcement of a deed of trust, but to extinguish that right altogether. As such, the Court of Appeals committed an error of law of such importance to the state's jurisprudence that it should be corrected. The Supreme Court also has jurisdiction over this appeal because the Court of Appeals did, in fact, grant Groves relief under the TDJA, a determination which conflicts with this Court's decision in Martin v. Amerman, 133 S.W.3d 262 (Tex. 2004), as well as the Court of Appeals decision in Jordan v. Bustamonte, 158 S.W.3d 29 (Tex. App.Houston [14th Dist.] 2005, pet denied) and at least 3 other courts of appeal.2 See TEX. GOV'T CODE 22.001(a)(2); TEX. R. APP. P. 56.1(a)(2). As the Court of Appeals itself recognized, the "court of appeals are split on whether exclusivity of relief under the Texas Property Code applies to all suits characterized as suits to quiet title." This Court should grant review to resolve this issue.

See, e.g., Florey v. Estate of McConnell, 212 S.W.3d 439, 448-49 (Tex. App.Austin 2006, pet. denied) ("Assuming . . . [the TDJA] is unavailable in suits to quiet title that are equivalent to trespass-to-try title actions."); Poag v. Flories, 317 S.W.3d 820, 828-29 (Tex. App.Fort Worth 2010, pet. denied) (TDJA cannot be used to invalidate lien); Teon Mgmt., LLC v. Turquoise Bay Corp., No. 11-10-050-CV, 2011 WL 1326325, *5-6 (Tex. App.Eastland 2011, no pet.) (TDJA cannot be used in suit to quiet title claims).
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ISSUES PRESENTED ISSUE 1: Did the trial court lack subject-matter jurisdiction to enter a no-answer default judgment when the face of the pleading shows Groves did not join all parties whose interests will be affected by the requested declaratory relief? ISSUE 2: Can the TDJA be used to adjudicate title in light of this Court's holding in Martin v. Amerman that the trespass-to-try-title statute is the method for determining title to real property? ISSUE 3: Can a deed of trust securing repayment of a promissory note be wholly invalidated by "show-me-the-note" allegations where the Texas Property Code does not require possession of the original note to even enforce the deed of trust?

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STATEMENT OF THE FACTS The Court of Appeals opinion correctly states the nature of the case. The court, however, omitted some facts relied on by MERS. On May 8, 2003, Groves voluntarily signed a Deed of Trust granting MERS a security interest in the property that is the subject of this suit. (CR 3). Six years later, Groves filed an action in the 334th District Court of Harris County, Texas seeking a judgment "declaring that the [] Deed of Trust is invalid and unenforceable." (CR 4). Other than to assert "Defendant nor the Lender's assigns is not the holder of the original Real Estate Lien note that is secured by the Deed of Trust," Groves gives no other reason in support of her conclusion the Deed of Trust is "invalid and of no force and effect." (CR 3). MERS did not file an answer. On July 6, 2009, Groves filed a motion for default judgment, (CR 5-12), which she later amended. (CR 13-18). On September 25, 2009, the trial court granted Groves's motion, and entered a no-answer default judgment declaring "the Deed of Trust . . . is void and of no force or effect" and ordering it "removed from the title to the property made the subject of this litigation." (CR 20). MERS filed a notice of restricted appeal on January 28, 2010. (CR 23). On April 12, 2011, the Fourteenth Court of Appeals issued a Memorandum Opinion affirming the trial court's no-answer default judgment. See Appendix Ex. C. MERS filed a Motion for Rehearing or, in the Alternative, Reconsideration En Banc on May 19, 2011, which was overruled on June 2, 2011.

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SUMMARY OF THE ARGUMENT This Court should grant review because the Court of Appeals's opinion gives unprecedented and undeserved credence to "show-me-the-note" allegations. In the typical

"show-me-the-note" suit, a plaintiff generally alleges that, because the named defendant is not in possession of the note, that defendant may not foreclose the lien securing repayment of said noteitself a unsupportable legal proposition. In this case, Groves made the same general allegation regarding lack of possession of the note and, based solely upon this allegation, sought, and was granted, a declaration invalidating the Deed of Trust. If permitted to stand, the Court of Appeals decision opens the door to similar, baseless challenges. But such suits are objectionable not merely because they pose a nuisance to lienholders across Texas; but because they are legally unsupportable. Based upon the precedent set by the Court of Appeals, any person wishing to rid himself of a lien, voluntarily granted, against his or her property, can now do so by simply suing anyone and alleging that, because the person sued is not in possession of the note secured by the lien, the lien is unenforceable. Meanwhile, the party who does possess the note and, according to the "show-me-the-note" theory, is the only party having authority to enforce the lien, would not be joined and provided the opportunity to defend its lien. This is illogical. But more importantly, the trial court could not have granted such relief because it lacked the jurisdiction to do so. In this case, Groves pleaded for relief only under the TDJA. It is MERS's contention that this itself was improper; that, consistent with this Court's opinion in Martin v. Amerman, a trespass to try title action is the exclusive remedy to determining title to real property. But even under the less-exacting standards of the TDJA, Groves was, at the very least, required to join any party whose interest would be affected by the declaration. By

affirmative alleging MERS did not possess the note, Groves necessarily admitted the existence of

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a party who did. And without joining that party, the trial court lacked jurisdiction to enter any judgment which would have affected that party's lien. Finally, MERS contends the trial court erred in granting Groves any relief based upon her "show-me-the-note" allegations.

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ARGUMENTS & AUTHORITIES A. THE PANEL INCORRECTLY ALLOWED GROVES TO VOID THE VOLUNTARY LIEN. First and foremost, this Court should grant review to rectify the precedent set by the Court of Appeals's opinion. The trial court's no-answer default judgment should not have been affirmed because that court lacked jurisdiction to void the Deed of Trust based upon Groves's pleadings which showed, on their face, the existence of a party or parties who have or claim any interest that would be affected by the requested declaration, but who were not joined. Because Groves only joined the party who she alleged did not have the authority to enforce the Deed of Trust, but not a party she claims did, the trial court was without jurisdiction to invalidate this latter party's interest. Groves sought relief pursuant to the TDJA,3 and "[w]hen declaratory relief is sought, all persons who have or claim any interest that would be affected by the declaration must be made parties"a declaration cannot prejudice the rights of a person not a party to the proceeding. TEX. CIV. PRAC. & REM. CODE 37.006(a) (emphasis added). A declaratory judgment is appropriate only when there is an existing justiciable controversy about the rights and status of the parties, and the declaration would resolve the controversy. Bonham St. Bank v. Beadle, 907 S.W.2d 465, 467 (Tex. 1995) (emphasis added).
3

One interesting feature of the Court of Appeals's decision is its refusal to recognize the trial court could only have granted the no-answer default judgment based upon her request for declaratory relief, noting Groves generally requested "other and further relief to which [she] may be justly entitled" and "[t]he trial court's judgment does not indicate that it granted her request to 'quiet title' exclusively under the Declaratory Judgment Act." See Groves, at 8. This reasoning is contrary to settled case law. "The purpose of pleadings is to give the parties fair notice of claims, defenses, and relief sought." Wortham v. Dow Chem. Co., 179 S.W.3d 189, 198 (Tex. App.Houston [14th Dist.] 2005, no pet.) (citing TEX. R. CIV. P. 47; Perez v. Briercroft Serv. Corp., 809 S.W.2d 216, 218 (Tex. 1991)). "Construing a general prayer for relief as subsuming any equitable or legal doctrine simply by including those terms in the prayer, would not serve the purpose of our pleading rules." Id. (citing Tex. Indus., Inc. v. Vaughan, 919 S.W.2d 798, 803 (Tex. App.Houston [14th Dist.] 1996, writ denied) (rejecting argument that general prayer for "such other relief . . . to which plaintiff may be entitled" adequately apprised party of damages that would be sought in light of particular damages requested in pleadings); Cearley v. Cearley, 331 S.W.2d 510, 512 (Tex. Civ. App.Dallas 1960, no writ)) (emphasis added); see also Arrington v. McDaniel, 14 S.W.2d 1009, 1011-12 ((Tex. Comm'n App. 1929, judgm't adopted) ("prayer, for 'other and further relief to which they may be entitled at law or in equity,' cannot enlarge the recovery to embrace a cause of action not within the pleadings.").
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In this case, Groves's own pleadings affirmatively show she failed to join all of the parties who will be affected by the requested declaratory relief. That is, Groves's theory to invalidate the Deed of Trust is that, because MERS, allegedly, does not have possession of the original note secured by the Deed of Trust, then the Deed of Trust is invalid. Put another way, the underlying premise of Groves's claims is that, as long as the note existsand Groves does not allege the note does not exist, only the party who is in possession of its original may enforce the Deed of Trust securing it.4 Yet, according to Groves's own pleadings, the party she suedMERSwas not that party; that party, according to Groves's own pleadings, has not been sued. In other words, the most relief Groves should have been able to obtain against MERS was a judgment that MERS could not enforce the Deed of Trust. Only by joining the party in possession of the original notewhich Groves affirmatively pleads is not MERScould Groves have invoked the trial court's jurisdiction to declare the Deed of Trust itself invalid. See TEX. CIV. PRAC. & REM. CODE 37.006(a). The Court of Appeals's decision to permit such an obvious jurisdictional defect must be reversed. Upon remand, Groves must be required to join all parties whose interests will affected by her requested relief before judgment may be granted, if at all. To require anything less is not only contrary to the express language set forth in the TDJA, but sets the bar incredibly low for a borrower to invalidate their mortgage, or any other lien against their property, even where the lien was voluntarily granted and the borrower has no dispute as to its validity. Such a decision has the potential to make Texas a destination for more of these "show-me-the-note" suits, which

As will be argued with more particularity below, MERS's possession, or lack thereof, of the underlying promissory note is not only irrelevant to the validity of the Deed of Trust itself, it is irrelevant to MERS's authority to enforce the Deed of Trust. Thus, error was apparent on the face of Groves's pleadings and the no-answer default judgment should be reversed.
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heretofore have merely served as a nuisance to lenders and give unrealistic hope to borrowers, by not only adding legitimacy to such claims, but raising the stakes on the type of relief available. Because the trial court's granting of a no-answer default judgment based on the allegations made by Groves, and the Court of Appeals's affirmation of that judgment, represents such a clear error of law, this Court should grant this petition for review. B. THE PANEL'S OPINION CONFLICTS WITH THIS COURT'S OPINION IN MARTIN V. AMERMAN AND HIGHLIGHTS THE CONFLICTS BETWEEN THE COURTS OF APPEAL. In addition to the foregoing, the Court of Appeals's decision cannot be reconciled with this Court's prior opinion in Martin v. Amerman, 133 S.W.3d 262 (Tex. 2004), which required claims such as those brought by Groves to be brought under chapter 22 of the Texas Property Code. As is evident by the Court of Appeals's conflict with Martin, with a previous opinion from its own court, as well as its conflict with other court of appeals opinions, this Court should grant review to resolve these inconsistencies. In the Court of Appeals's opinion, the court attempted to distinguish between claim involving "title to and possession of real property," as opposed to "the validity of other 'clouds' on an undisputed owner's title to real property" and determined the former was "in the nature of a trespass to try title action," but the latter was not. See Groves, at 6-7. In other words, the Court of Appeals developed a class of quiet title claims which, according to it, were not required to comply with the trespass to try title statutes. In doing so, the Court of Appeals's opinion conflicts with this Court's holding in Martin, the Court of Appeals's own decision in Jordan v. Bustamonte and several other court of appeals' opinions which, it freely conceded, were "split on whether exclusivity of relief under the Texas Property Code applies to all suits characterized as suits to quiet title." Groves, at 7.

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In Martin, this Court noted that the legislature intentionally wrote the trespass-to-try title statute with the exclusive language that it was "the method of determining title to . . . real property." Martin, 133 S.W.3d at 267 (emphasis in original). While Martin involved a

boundary dispute, the Court appreciated that the TDJA and the trespass-to-try title statutes "differ significantly in both their proof elements and the relief they afford." Martin, 133 S.W.3d at 265. The TDJA "is an efficient vehicle for parties to seek a declaration of rights under certain circumstances, while trespass-to-try-title actions involve detailed pleading and proof requirements." Id. And courts have followed this rationale in determining that suits to quiet

title cannot be brought under the TDJA. For instance, the Fourteenth Court's own holding in Jordan v. Bustamonte, 158 S.W.3d 29, 35 (Tex. App.Houston [14th Dist.] 2005, pet. denied), followed Martin, creating a direct contrast to the panel's decision below. See also Kennesaw Life & Acc. Ins. Co. v. Goss, 694 S.W.2d 115, 118 (Tex. App.Houston [14th Dist.] 1985, writ ref'd n.r.e.) ("While the [Declaratory Judgments] Act specifically provides a procedural method for the construction or validity of deeds by those whose rights are affected by such instruments, the substantive rights of the parties are governed by the Trespass to Try Title statutes."). In Jordan, Bustamonte filed suit against Jordan and the State of Texas "seeking, among other relief, the removal of the cloud on his title to [] 29 acres created by a lien previously filed by the State for unpaid taxes." Id. The court held that "[w]hile the Declaratory Judgment Act provides a procedural method for the construction or validity of deeds by those whose rights are affected by such instruments, the substantive rights of the parties are governed by the trespass to try title statutes." Id. (citing Kennesaw Life, 694 S.W.2d at 117-19). "Therefore," the Court of Appeals concluded, "a

declaratory judgment action cannot be used to adjudicate title and a trespass to try title action

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because section 22.01 is the exclusive remedy by which to do so." Id. In other words, the Court of Appeals concluded that, where a property ownerBustamontechallenges the validity of a lien against his or her propertythe State of Texas's"a declaratory judgment action cannot be used to adjudicate title and a trespass to try title action because section 22.01 is the exclusive remedy by which to do so." Id. Yet, Groves's claim is, in substance, virtually indistinguishable to the claim asserted by Bustamonte, the only difference being Groves voluntarily granted the lien against her property and gave no substantive reason for its alleged invalidity (other than the unmeritorious reason discussed below). The Court of Appeal's opinion creates further conflict between it and its sister courts. In Poag v. Flories, 317 S.W.3d 820 (Tex. App.Fort Worth 2010, pet. denied), the Second Court of Appeals held that the TDJA cannot be used to invalidate lien, or to recover attorney's fees in accomplishing such. There, because Poag sought clear title to his property, that court held "the essence of the suit is in trespass to try title", and relief under the TDJA was improper. Id. at 829; see also Teon Mgmt., LLC v. Turquoise Bay Corp., No. 11-10-050-CV, 2011 WL 1326325, *5-6 (Tex. App.Eastland 2011, no pet.) (TDJA cannot be used in suit to quiet title claims); Florey v. Estate of McConnell, 212 S.W3d 439, 448-49 (Tex. App.Austin 2006, pet. denied) (the court "assum[ed] without deciding that the TDJA is unavailable in suits to quiet title that are equivalent to trespass-to-try title actions."). Apparently, Martin has failed to quell confusion regarding the applicability of the trespass to try title statutes. Despite Martin's clear language requiring such suits comply with the trespass to try title statutes, various courts, the Court of Appeals below included, have felt less compelled to adhere to Martin depending upon the facts of the case. The result, however, is an

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inconsistent application which cannot be readily predicted by litigants or trial courts and this Court should grant review and provide future guidance. C. BECAUSE GROVES FAILED TO PLEAD A CAUSE OF ACTION NOT INVALID ON ITS FACE, THE DEFAULT JUDGMENT IS NOT SUPPORTED BY PLEADINGS AND REVERSAL IS NECESSARY. Finally, regardless of the whether the trial court granted relief under the trespass to try title statutes, the TDJA or some other, unidentified theory, the trial court erred in granting any no-answer default relief not supported by Groves's pleadings. A no-answer default judgment can only be granted if: (1) the plaintiff files a petition that states a cause of action; (2) the petition invokes the trial court's jurisdiction; (3) the petition gives fair notice to the defendant; and (4) the petition does not disclose any invalidity of the claim on its face. Jackson v. Biotectronics, Inc., 937 S.W.2d 38, 42 (Tex. App.Houston [14th Dist.] 1996, no writ); see also Stoner v. Thompson, 578 S.W.2d 679, 684 (Tex. 1979). An appellate court is required to examine the pleadings to determine whether the plaintiff has sufficiently pleaded a cause of action to support the judgment because if no liability exists against the defaulting defendant as a matter of law, then the fact that he has defaulted by failing to file an answer cannot create liability. See First Dallas Petroleum, Inc. v. Hawkins, 727 S.W.2d 640, 645 (Tex. App.Dallas 1987, no writ). In other words, a plaintiff is not entitled to a default judgment simply because the defendant failed to file an answer; the plaintiff's pleading must affirmatively demonstrate he or she is entitled to the relief sought. Here, Groves not only failed to plead a cause of action, but, even if the court determines Groves did plead a cause of action, she then revealed the invalidity of her claim in her own pleading. As set forth above, MERS contends Groves was required to comply with the trespass to try title statutes. Given "[t]he strict pleading and proof requirements applicable to trespass-to-

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try-title actions [which] have sometimes produced harsh results," see Martin, 133 S.W.3d at 265, the trial court could not have granted Groves the no-answer default judgment based upon her pleadings. But even if this Court were to determine the Court of Appeals was correct in holding Groves to some lesser standard, she must still plead some cognizable basis the Deed of Trust was invalid. See e.g., Gordon v. W. Houston Trees, Ltd., Case No. 01-09-00269-CV, 2011 WL 1598790 (Tex. App.Houston [1st Dist.] Apr. 28, 2011, no pet.) (under similar theory advanced by the Court of Appeals, held claimant's "suit to quiet title depends on its establishing that the claim asserted by Gordon (1) constitutes a hindrance having the appearance of a better right to title than its own, that (2) appears to be valid on its face, and that (3) for reasons not apparent on its face, is not valid."). Thus, even under the Court of Appeal's decision, it was not sufficient for Groves to merely plead "[t]he Deed of Trust . . . although appearing valid on its face, is in fact invalid and of no force and effect;" she was required to plead why the Deed of Trust was invalid. Here, the only reason given by Groves is found in the very next sentence, wherein she pleads the Deed of Trust is invalid because MERS is not in possession of the original note (secured by the Deed of Trust). This "show-me-the-note" theory is contrary to Texas law. The Fort Worth Court of Appeals recently approved the observation that: "In 2009, a foreclosure defense colloquially termed 'show me the note' began circulating through courts across the county. Advocates of this theory believe 'that only the holder of an original wet-ink signature note has the lawful power to initiate a non judicial foreclosure.' Courts have routinely rejected the defense on the ground that foreclosure statutes simply do no require production of the original note at any point during the proceedings." Hornbuckle v. Countrywide Home Loans, Inc., No. 02-09-00330-CV, 2011 WL 1901975, at *4 (Tex. App.Fort Worth May 19, 2011, no pet.) (quoting Stein v. Chase Home Fin., LLC, No. 09-1995, 2010 WL 47366828, at *3 (D. Minn. Aug. 13, 2010, adopted, 2010 WL 4736233 (D. Minn. Nov. 16, 2010).

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While this observation was made by a federal court sitting in Minnesota, it is just as appropriate under Texas law. Under Texas law, the right to enforce a deed of trust exists in either a "mortgagee" or "mortgage servicer." See TEX. PROP. CODE 51.0025 ("A mortgage servicer may administer the foreclosure of property under Section 51.002 on behalf of a mortgagee if . . ."); 51.0001(4) (defining "mortgagee" as the "grantee, beneficiary, owner or holder of a security instrument, a book entry system or, if the security interest has been assigned of record, the last person to whom the security interest has been assigned of record."); 51.0001(3) (defining "mortgage servicer"). Notably, there is no requirement that a person who otherwise qualifies as a mortgagee or mortgage servicer also hold (or even own) the note. See e.g., Broyles v. Chase Home Fin. LLC, No. 3:10-cv-2256, 2011 WL 1428904 at *3 (N.D. Tex. Apr. 13, 2011) (noting Texas Property Code "contemplates that someone other than the holder of the original note . . . may lawfully foreclose on the security interest."). Certainly, there is nothing in the express language of chapter 51 requiring a "mortgagee" or "mortgage servicer" also hold the promissory note. Presumably, if the Texas legislature had intended to do so, it could easily have included language imposing such a requirement. But it did not do so. And because it did not do so, it is presumed the omission was intentional. See e.g., Cameron v. Terrell & Grant, Inc., 618 S.W.2d 535, 540 (Tex. 1981) ("It is a rule of statutory construction that every word of a statute must be presumed to have been used for a purpose...[l]ikewise, every word excluded from a statute must also be presumed to have been excluded for a purpose."); see also Centurion Planning Corp. v. Seabrook Venture II, 176 S.W.3d 498, 505 (Tex. App.Houston [1st Dist.] 2004, no pet.); see also Acker v. Texas Water Comm'n, 790 S.W.2d 299, 301 (Tex. 1990) (courts must also presume

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that the Texas legislature enacted law with complete knowledge of the prior law, including any case law). Thus, for Groves to simply allege MERS cannot enforce the Deed of Trust because it does not possess the underlying note does not state a claim; and certainly, this same allegation cannot support a no-answer default judgment invalidating the Deed of Trust itself. Because this is all Groves does here, her pleadings are akin to alleging MERS breached a contract and then, in the very next sentence, allege MERS was not a party to the contract breached. Under such pleadings, the trial court could not enter a no-evidence default judgment for such a breach. See, e.g., Cecil v. Hydorn, 725 S.W.2d 781 (Tex. App.San Antonio 1987, no writ) (although plaintiff alleged existence of contract and breach by defendant, attachment to petition affirmatively showed no agreement existed between plaintiff and defendant, and default judgment on breach of contract claim reversed); see also World Sav. Bank v. Alaniz, No. 01-0600549-CV, 2007 WL 1018416 (Tex. App.Houston [1st Dist.] April 5, 2007, no pet.) (default judgment for statutory fraud invalid on its face when petition revealed no contract for sale or purchase of land existed between plaintiff and defendant). Therefore, because Groves's

allegations do not support the relief sought, and the invalidity of this claim was apparent on the face of the record, the case should be reversed and remanded. PRAYER WHEREFORE, premises considered, MERS respectfully requests the Court to grant this petition for review, request briefs from the parties, set this case for oral argument and, after argument, sustain MERS's issues presented for review, reverse the judgment of the Fourteenth Court of Appeals and remand to the trial court for further proceedings.

PAGE 12 of 13

Dated: October 17, 2011

Respectfully Submitted,

/s/ Michael J. McKleroy, Jr. Michael J. McKleroy, Jr. SBN: 24000095 C. Charles Townsend SBN: 24028053 Elizabeth A. Mazzarella SBN: 24069320 AKERMAN SENTERFITT, LLP 2001 Ross Avenue, Suite 2550 Dallas, Texas 75201 Telephone: 214.720.4300 Facsimile: 214.981.9339 ATTORNEY FOR PETITIONER MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. AS NOMINEE FOR GREENPOINT FUNDING

CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing instrument was served on October 17, 2011, as follows:

G. P. Matherne Attorney at Law PO Box 547 Spring, TX 77383 Attorney for Nancy Groves VIA CERTIFIED MAIL RECEIPT NO. 7196 9008 9111 2157 5882

/s/ Michael J. McKleroy, Jr. Michael J. McKleroy, Jr.

PAGE 13 of 13

No: 11-0555

In The Supreme Court Of Texas

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., AS NOMINEE FOR GREENPOINT FUNDING,
Petitioner

v. NANCY GROVES,
Respondent

On Appeal from Cause No. 14-10-00090-CV Fourteenth Court of Appeals Houston, Texas

APPENDIX TO PETITION FOR REVIEW

PLAINTIFF'S ORIGINAL PETITION ........................................................................................ A FINAL DEFAULT JUDGMENT ................................................................................................. B MEMORANDUM OPINION & JUDGMENT .............................................................................. C

APPENDIX PAGE 1

EXHIBIT A

Appendix Exhibit Page 2

S
2009-nine
NANCY GROVES Vs. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC AS NOMINEE FOR GREENSPOINT MORTGAGE FUNDING

- 112

.5..
..(

IN THE DISTRICT coTs*oF .

4, .0 '.6

HARRIS COUNTY, TEXA*4' ,/ jdy0/041,.... ef

.,:. i..: . ..., 7

/-x-T

JUDICIAL DISTRICT

PLAINTIFFS' ORIGINAL PETITION Nancy Groves, Plaintiff, petitions the court pursuant to the Declaratory Judgment Act, Chapter 37 of the Civil Practice and Remedies Code, for a declaration of the invalidity of certain documents and claim held by the Defendant, Mortgage Electronic Registration Systems, Inc as nominee for Greenspoint Mortgage Funding in order to quiet title to the property in which the Plaintiff has an interest, and for cause of action shows: 1. Discovery. This lawsuit is governed by Level 2 discovery limitations

as set forth in TEX. R. Civ. P. 190.3. 2. Parties and Service Instructions. The Plaintiff is Nancy Groves an

individual who resides in Harris County, Texas. The Defendant, Mortgage Electronic Registration Systems, Inc., nominee for Greenspoint Mortgage Funding, a foreign corporation organized and existing under the laws of the State of Delaware whose home office-address is 3300 South West 34th Avenue Suite 101 Ocala, Florida 34474-7448 may be served with process by serving Ms. Hope Andrade Office of the Secretary of State, Statutory Documents Section-Citations Unit PO Box 12079 Austin, Texas 78711-2079 as its agent for service because Defendant engages in business in Texas but does not maintain a regular place of business in Texas or a designated agent for service of process, and this suit arose from Defendant's business in Texas.

Page 1 of 3

: 00002 Appendix Exhibit Page 3

Plaintiff's Interest in Property. The plaintiff is the owner of a certain 3. tract of land located in Harris County, Texas, as shown in the Assessment Lien Deed recorded under document number V230924 in the official Public records of Tarrant County, Texas and more particularly described as Lot Thirteen (13), in Block Two (2), of Summerwood, Section 4, Seven Oaks Village, an addition in Harris County, Texas, according to the map or plat thereof recorded in Film Code No. 388062 of the Map Records of Harris County, Texas . Defendant's claim as cloud on title. On May 8, 2003, Defendant, 4. Mortgage Electronic Registration Systems as nominee for Greenspoint Mortgage Funding has accepted and caused to be recorded a certain Deed of Trust signed by Nancy Groves a single person, as grantor purporting to create a lien for security purposes on Plaintiff's property as described in paragraph 3 above. The deed of trust was filed of record under Clerks File number W706940 refiled under W656426 and modified under X5602686 in the real property records of Harris County, Texas. 5. Invalidity of Defendant's Claim. The Deed of Trust under which the Defendant or the Lender or Lender's assigns asserts an interest that interferes with Plaintiffs title, although appearing valid on its face, is in fact invalid and of no force or effect. The Plaintiff will show that Defendant nor the Lender's assigns is not the holder of the original Real Estate Lien note that is secured by the Deed of Trust.
,

6. Attorneys' fees. Plaintiff has retained the attorney whose name is subscribed to this petition to represent the Plaintiff in this action and has agreed to pay the firm a reasonable fee for the necessary services. An award of attorney's fees to the Plaintiff would be equitable and just and authorized by Section 37.009 of the Civil Practice and Remedies code.

Page 2 of 3

Appendix Exhibit Page 4


7.

Reauest for relief.

Plaintiffs request that Defendant be cited according to law to appear and answer and that Plaintiff have judgment as follows:

(a) Declaring that the Deed of Deed of Trust is invalid and unenforceable, ordering it removed from the title to the property made the subject of this litigation and quieting title in the Plaintiff. Awarding the Plaintiff judgment against the Defendant for attorney's fees and costs of suit, together with such other and further relief to which Plaintiff may be justly entitled. Respectfully Submitted (b)

O. P. Ma erne
PO Box 547 Spring, Texas 77383-0547 TBA 13186300 .(713) 827-1702 (281) 353-2651 FAX

Page 3 of 3

00004 Appendix Exhibit Page 5

EXHIBIT B

Appendix Exhibit Page 6

NO.2009-29112 NANCY GROVES Vs. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC AS NOMINEE FOR GREENSPOINT MORTGAGE FUNDING IN THE DISTRICT COURT OF HARRIS COUNTY, TEXAS

334'h JUDICIAL DISTRICT

FINAL DEFAULT JUDGMENT On July 6, Plaintiff, Nancy Groves, moved for default judgment after Defendant failed to file an answer in this case. The court considered Plaintiff's motion without a hearing. The court determined it had jurisdiction over the subject matter and the parties in these proceedings. After considering the pleadings, the papers on file in this case, and the evidence Plaintiff presented on liability, the court grants Plaintiff's motion for default Judg nti

tr0rea 3t ll

The Court hereby RENDERS judgment for Plaintiff. Sep now4 nw 2 2009 The Court finds the following: 13:1'
I.

Defendant was served with citation and a co Original Petition on May 20, 2009.

py

ferai

The citation and proof of service were on file with this court for at least ten days before the judgment was rendered. 3 The deadline for Defendant to file an answer was June 15,
Certified Document Number: 4346 1161 - Pag 1 o 2 e f

2009. This date is the Monday next following 20 days after Defendant was served with citation and a copy of Plaintiff's petition. However, Defendant did not file an answer or any other pleading constituting an answer. Defendant's last known address is 3300 S.W. 34th Ave Ste 101 Ocala, Fl 34474-4438. Defendant is not a member of the United States Military.

Appendix Exhibit Page 7

Plaintiff has not requested Damages and has waived its claim for attorney's fees.

Therefore, the court Orders and Adjudges, that plaintiff, Nancy Groves is the owner of a certain tract of land located in Harris County, Texas described as Lot Thirteen (13), in Block Two (2), of Summerwood, Section 4, Seven Oaks Village, an addition in Harris County, Texas, according to the map or plat thereof recorded in Film Code No. 388062 of the Map Records of Harris County, Texas . The court further Orders and Adjudges that the Deed of Trust filed for record under clerks file number W706940 re-filed under W656426 and modified under X502686 in the real property records of Harris County, Texas is void and of no force or effect. The court further orders the deed of trust filed for record under clerks file number W706940 re-filed under W656426 and modified under X502686 is removed from the title to the property made the subject of this litigation. This judgment is final, disposes of all claims and all parties and is appeal able. The court orders Defendant pay costs to Plaintiff. The court orders execution to issue for this judgment.
Certified Document Num 43461161 - Pag 2 o 2 ber: e f

16 -Di

0. P. Math/me Attorney for Plaintiff

Appendix Exhibit Page 8

I, Loren Jackson, District Clerk of Harris County, Texas certify that this is a true and correct copy of the original record filed and or recorded in my office, electronically or hard copy, as it appears on this date Witness my official hand and seal of office this January 21, 2010 Certified Document Number: 43461161 Total Pages: 2

LOREN JACKSON, DISTRICT CLERK HARRIS COUNTY, TEXAS

In accordance with Texas Government Code 406.013 electronically transmitted authenticated documents are valid. If there is a question regarding the validity of this document and or seal please e-mail support@hcdistrictclerk.com

Appendix Exhibit Page 9

EXHIBIT C

Appendix Exhibit Page 10

Affirmed and Memorandum Opinion filed April 12, 2011.

In The

ifirrurteentll (Court of Appeals

NO. 14-10-00090-CV MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., AS NOMINEE FOR GREENSPOINT FUNDING, Appellant V. NANCY GROVES, Appellee On Appeal from the 334th District Court Harris County, Texas Trial Court Cause No. 2009-29112 MEMORANDUM OPINION
Nancy Groves sued Mortgage Electronic Registration Systems, Inc. (MFRS), as nominee for Greenspoint Funding, to invalidate a deed of trust securing MERS's alleged lien on Groves's property. The trial court entered a default judgment against MERS, which then filed this restricted appeal. We affirm.

Appendix Exhibit Page 11

BACKGROUND Groves filed her original petition against MERS on May 8, 2009. She alleged that she owns a certain tract of land subject to a lien secured by a deed of trust "accepted and recorded" by MERS. She further alleged that the deed of trust is invalid and asked the trial court to remove it and quiet title in Groves. MERS was served with process but failed to file an answer, and Groves filed a motion for default judgment. The trial court signed a default judgment against MERS stating that (1) Groves owns the property in question; (2) the deed of trust is "void and of no force or effect;" and (3) the deed of trust be removed from the property title. MERS filed a timely notice of restricted appeal, arguing that (1) "Groves failed to properly state a cause of action and such failure is plain on the face of Groves's petition;" and (2) "no justiciable controversy is alleged in Groves's petition." ANALYSIS A restricted appeal is available when (1) it is filed within six months after the trial court signed the judgment; (2) by a party to the suit; (3) who, either in person or through counsel, did not participate at trial and did not timely file any post-judgment motions or requests for findings of fact and conclusions of law; and (4) error is apparent from the face of the record. Tex. R. App. P. 26.1(c), 30; Alexander v. Lynda's Boutique, 134 S.W.3d 845, 848 (Tex. 2004). The face of the record consists of all papers on file in the appeal. Osteen v. Osteen, 38 S.W.3d 809, 813 (Tex. App.Houston [14th Dist.] 2001, no pet.). MERS, a party to this suit, did not participate in the trial court and did not file any post-judgment motion or request for findings of fact or conclusions of law. MERS filed its notice of restricted appeal on January 26, 2010, less than six months after the trial court signed the default judgment on September 25, 2009. Accordingly, the only issue in this restricted appeal is whether error is plain on the record's face. See Tex. R. App. P. 26.1(c), 30; Alexander, 134 S.W.3d at 848. 2

Appendix Exhibit Page 12

I.

Groves's Pleadings

MERS argues in its first issue that error is plain on the record's face because Groves's pleading does not properly raise a claim for which the trial court could grant relief. According to MERS, Groves's pleading does not raise a viable claim because Groves (1) failed to base her claim on the superiority of her own title to the property; and (2) requested only declaratory relief under the Declaratory Judgment Act. Groves stated in her petition: Nancy Groves, Plaintiff, petitions the court pursuant to the Declaratory Judgment Act . . . for a declaration of the invalidity of certain documents and claim held by the Defendant, [MERS], in order to quiet title to the property in which Plaintiff has an interest, and for cause of action shows:

3. Plaintiffs Interest in Property. The plaintiff is the owner of a certain tract of land located in Harris County, Texas, as shown in the Assessment Lien Deed recorded under document number V230924 in the official Public records of Tarrant County, Texas, and more particularly described as Lot Thirteen (13), in Block Two (2), of Summerwood, Section 4, Seven Oaks Village, an addition in Harris County, Texas, according to the map or plat thereof recorded in Film Code No. 388 of the Map Records of Harris, County, Texas.

5. Invalidity of Defendant's Claim. The Deed of Trust under which the Defendant or the Lender or Lender's assigns asserts an interest that interferes with Plaintiffs title, although appearing valid on its face, is in fact invalid and of no force or effect. The Plaintiff will show that Defendant nor the Lender's assigns is not the holder of the original Real Estate Lien note that is secured by the Deed of Trust. Groves also requested "other and further relief for which Plaintiff may be justly entitled" based on allegations that (1) she owns the property in question; (2) MERS accepted and recorded a deed of trust securing an alleged lien on the property; and (3) the deed of trust "is in fact invalid and of no force or effect."

Appendix Exhibit Page 13

The trial court's judgment states: [T]he court Orders and Adjudges, that [Groves] is the owner of [the property]. The court further Orders and Adjudges that the Deed of Trust filed is void and has no force or effect. The court further orders the deed of trust removed from the title to the property made the subject of this litigation. A. Strength of Title

MERS first argues that the judgment was in error because Groves pleaded "a quiet title (or trespass-to-try-title) claim" but did not "base her claim solely on the strength of her own title." MERS argues that suits to quiet title must be based on the strength of the claimant's own title, rather than the weakness of the adverse claimant's title. See, e.g., Fricks v. Hancock, 45 S.W.3d 322, 327 (Tex. App.Corpus Christi 2001, no pet.). Resolution of this contention requires consideration of the different types of claims that have been characterized as suits to quiet title. The case law is not entirely consistent on this issue. A suit to quiet title is equitable in nature, and the principal issue in such suits is 'the existence of a cloud on the title that equity will remove.'" Florey v. Estate of McConnell, 212 S.W.3d 439, 448 (Tex. App.Austin 2006, pet. denied) (quoting Bell v. Ott, 606 S.W.2d 942, 952 (Tex. Civ. App.Waco 1980, writ ref d n.r.e.)). A "cloud" on legal title includes any deed, contract, judgment lien or other instrument, not void on its face, that purports to convey an interest in or makes any charge upon the land of the true owner, the invalidity of which would require proof. Wright v. Matthews, 26 S.W.3d 575, 578 (Tex. App.Beaumont 2000, pet. denied). A suit to quiet title "`enable[s] the holder of the feeblest equity to remove from his way to legal title any unlawful hindrance having the appearance of better right.'" Florey, 212 S.W.3d at 448 (quoting Thomson v. Locke, 1 S.W.112, 115 (Tex. 1886)). Courts have used the term "suit to quiet title" to refer to legal disputes regarding (1) title to and possession of real property; and (2) the validity of other "clouds" on an 4

Appendix Exhibit Page 14

undisputed owner's title to real property. Compare Alkas v. United Say. Ass'n of Tex., Inc., 672 S.W.2d 852, 855-56 (Tex. App.Corpus Christi 1984, writ ref'd n.r.e.) (suit to adjudicate ownership of property to determine whether creditors of original owner retained interest in property purportedly conveyed to new owner was action "to quiet title"), with Sw. Guar. Trust Co. v. Hardy Rd. 13.4 Joint Venture, 981 S.W.2d 951, 95657 (Tex. App.Houston [1st Dist.] 1998, pet. denied) (undisputed property owner's action to invalidate lien and deed of trust securing lien constituted suit "to quiet title"); see also Florey, 212 S.W.3d at 449 (distinguishing between "suits to quiet title that are equivalent to trespass-to-try-title actions" and suits to quiet title involving interests that only "indirectly impact" title to and possession of real property).1 The first type of claim, which involves title to and possession of real property, is essentially "the equivalent to [a] trespass-to-try-title action[]." See Florey, 212 S.W.3d at 449; see also Sani v. Powell, 153 S.W.3d 736, 746 (Tex. App.Dallas 2005, pet. denied) (quiet title claim involving allegedly invalid tax sale of property characterized as trespass to try title action). "A trespass to try title action is the method of determining title to lands, tenements, or other real property." Tex. Prop. Code Ann. 22.001 (Vernon 2000). A trespass to try title action "is typically used to clear problems in chains of title or to recover possession of land unlawfully withheld from a rightful owner." See Martin v. Amerman, 133 S.W.3d 262, 265 (Tex. 2004), superseded by statute, Tex. Civ. Prac. & Rem. Code Ann. 37.004 (Vernon 2008) (reversing Martin's holding that relief under the Declaratory Judgment Act was unavailable for boundary dispute). It is the exclusive remedy by which to resolve competing claims to property. Jordan v. Bustamante, 158 S.W.3d 29, 34 (Tex. App.Houston [14th Dist.] 2005, pet. denied). Courts require claimants bringing this type of "suit to quiet title" to base their claims on the strength of their own title. See Kennedy Con., Inc. v. Forman, 316 S.W.3d 129, 135 (Tex. App.
Other decisions have stated that a suit to quiet title is distinct from a trespass to try title action. See, e.g., Longoria v. Lasater, 292 S.W.3d 156, 165 n.7 (Tex. App.San Antonio 2009, pet. denied); Fricks v. Hancock, 45 S.W.3d 322, 327 (Tex. App.Corpus Christi 2001, no pet.); McCammon v. Ischy, No. 03-06-00707-CV, 2010 WL 1930149, at *7 (Tex. App.Austin May 12, 2010, pet. denied) (mem. op.).

Appendix Exhibit Page 15

Houston [14th Dist.] 2010, no pet.); Alkas, 672 S.W.2d at 857. To recover, a claimant must establish a prima facie right of title by proving one of the following: (1) a regular chain of conveyances from the sovereign; (2) a superior title out of a common source; (3) title by limitations; or (4) prior possession, which has not been abandoned. Kennedy Con., Inc., 316 S.W.3d at 135. The second type of claim, which involves other "clouds" on an undisputed owner's title to real property, challenges an adverse interest that impacts title and possession only indirectly. See Florey, 212 S.W.3d at 449; see also Max Duncan Family Inv., Ltd. v. NTFN Inc., 267 S.W.3d 447, 453-54 (Tex. App.Dallas 2008, pet. denied) (undisputed property owner's suit to invalidate promissory note and lien securing note "involve[d] more than just title and possession of real property"); Cadle Co. v. Ortiz, 227 S.W.3d 831, 837-38 (Tex. App.Corpus Christi 2007, pet. denied) (undisputed property owner's post-foreclosure suit to invalidate mechanic's lien distinguished from trespass to try title action); Sw. Guar. Trust Co., 981 S.W.2d at 957 (undisputed property owner's action to declare lien invalid was "really one to quiet title"). A claim is sufficiently adverse if its assertion would cast a cloud on the owner's enjoyment of the property. See Katz v. Rodriguez, 563 S.W.2d 627, 629 (Tex. Civ. App.Corpus Christi 1977, writ ref' d n.r.e.). To remove such a cloud, a plaintiff must "allege right, title, or ownership in herself with sufficient certainty to enable the court to see she has a right of ownership that will warrant judicial interference." Wright, 26 S.W.3d at 578. MERS does not dispute that Groves holds title to the property subject to the deed of trust; Groves does not dispute that the deed of trust securing the lien belongs to MERS. Groves's claim that the deed is invalid does not directly implicate any issues to be resolved by a trespass to try title suit. See Tex. Prop. Code Ann. 22.001 (Vernon 2000) ("A trespass to try title action is the method of determining title to lands, tenements, or other real property."); Martin, 133 S.W.3d at 265 (trespass to try title statute is "typically used to clear problems in chains of title or to recover possession of land unlawfully withheld from a rightful owner"); see also Deutsche Bank Nat'l Trust Co. v. Stockdick 6

Appendix Exhibit Page 16

Land Co., No. 14-09-00617-CV, 2011 WL 321742, at *10 (Tex. App.Houston [14th Dist.] Feb. 3, 2011, no pet.) ("If the Bank succeeds in its arguments . . . then the Property is subject to the Bank's lien. If not, then the Property is not subject to the lien. In any event, title to the Property or to the liens is not in question . . . . [The Bank] is not required to pursue a trespass-to-try-title action."). Therefore, Groves's claim is not in the nature of a trespass to try title action and she was not required to base her claim upon the strength of her own title. Groves alleged in her pleading that she owns the property by virtue of her recorded deed. This satisfies the requirement that she "allege right, title, or ownership in herself with sufficient certainty to enable the court to see she has a right of ownership that will warrant judicial interference" in the issue of the deed of trust's validity. Wright, 26 S.W.3d 575.2Therefore, Groves's pleadings do not establish error on the face of the record. B. Relief under Declaratory Judgment Act

MERS alternatively argues that "the trespass-to-try-title statutes [are] Groves's sole remedy" and complains that Groves "did not raise a cause of action under those statutes" because she requested only declaratory relief under the Declaratory Judgment Act. MERS bases its argument on Martin v. Amerman, 133 S.W.3d at 267-68. The holding in Martin rested upon the court's characterization of section 22.001 of the Texas Property Code as the exclusive remedy for trespass to try title actions. See id. We need not decide whether Martin precludes Groves's request for declaratory relief under the Declaratory Judgment Act in this case.3Groves requested relief under

2Even assuming for argument's sake that Groves's suit is properly characterized as a trespass to try title suit, the rule that a claimant in such an action must base her claim on the superiority of her own title concerns Groves's burden of proof. See Kennedy Con., Inc., 316 S.W.3d at 135 ("To recover [in trespass to try title action], Forman must establish a prima facie right of title by proving [strength of Forman's own title by one of four ways].") (emphasis added). Any alleged error relating to this issue would be one of proof and is not apparent from Groves's petition or on the face of this record. See Tex. R. App. P. 26.1(c), 30; Alexander, 134 S.W.3d at 848. 3

Although Martin addressed exclusivity of relief under the Texas Property Code for trespass to

Appendix Exhibit Page 17

the Declaratory Judgment Act, as well as "other and further relief to which [she] may be justly entitled." The trial court's judgment does not indicate that it granted her request to "quiet title" exclusively under the Declaratory Judgment Act. Accordingly, no error appears on the face of this record. See Tex. R. App. P. 26.1(c), 30; Alexander, 134 S.W.3d at 848. We overrule MERS's first issue. II. Justiciable Controversy MERS argues in its second issue that the trial court lacked jurisdiction over the action because Groves "failed to allege a justiciable controversy under the Declaratory Judgment Act." A justiciable controversy between the parties must exist at every stage of the legal proceedings. Williams v. Lara, 52 S.W.3d 171, 184 (Tex. 2001). We cannot decide moot controversies. Nat'l Collegiate Athletic Ass'n v. Jones, 1 S.W.3d 83, 86 (Tex. 1999). "In order to maintain a suit to quiet title, there must be an assertion by the defendant of a claim to some interest adverse to plaintiff's title; and the claim must be one that, if enforced, would interfere with the plaintiff's enjoyment of the property." Mauro v. Lavlies, 386 S.W.2d 825, 826-27 (Tex. Civ. App.Beaumont 1964, no writ) (internal quotation omitted) (no justiciable controversy existed because the judgments defendants obtained against plaintiffs asserted no claims against plaintiffs' property and defendants made no attempt to create a lien upon property or to have property sold to satisfy judgments). Groves alleged in her petition that MERS's deed of trust "purported to create a lien for security purposes on Plaintiff's property as described." This alleged lien
try title claims, courts of appeals are split on whether exclusivity of relief under the Texas Property Code applies to all suits characterized as suits to quiet title. Compare Sw. Guar. Trust Co., 981 S.W.2d at 957 (action to quiet title brought to invalidate lien on property was governed exclusively by trespass to try title statute), with Florey, 212 S.W.3d at 449 (Martin does not preclude relief under the Declaratory Judgment Act for actions to quiet title that only indirectly impact title and possession and therefore are not not equivalent to trespass to try title actions).

Appendix Exhibit Page 18

constitutes an adverse interest to Groves's title, which, if enforced, would interfere with her enjoyment of the property. See id. Therefore, a justiciable controversy existed, and the trial court had subject matter jurisdiction over the case. See Williams, 52 S.W.3d at 184; Mauro, 386 S.W.2d at 826-27.4 We overrule MERS's second issue. CONCLUSION Having overruled both of MERS's issues on appeal, we affirm the trial court's judgment.

/s/

William J. Boyce Justice

Panel consists of Justices Brown, Boyce, and Jamison.

MERS also argues: "All Groves alleged is MERS lacked an enforceable security interest in the property at the time she filed her petition because MERS was not then holder of the original note secured by the deed of trust. . . . [T]his one fact shows Groves's action is based entirely on facts subject to change" and therefore fails to manifest the "ripening seeds of a controversy" between Groves and MERS. MERS argues that a justiciable controversy does not exist because it "may or may not be required to hold the original note" to enforce the security interest and could "acquire noteholder status through assignment" if so required. This argument goes to the merits of Groves's argument for invalidating the deed of trust and does not affect whether a controversy existed as to the validity of the deed of trust. 9

Appendix Exhibit Page 19

April 12, 2011

JUDGMENT

Nourterntil Court of Appeals

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., AS NOMINEE FOR GREENSPOINT FUNDING, Appellant NO. 14-10-00090-CV V. NANCY GROVES, Appellee

This cause, an appeal from the judgment in favor of appellee, Nancy Groves, signed September 25, 2009, was heard on the transcript of the record. We have inspected the record and find no error in the judgment. We order the judgment of the court below
AFFIRMED.

We order appellant, Mortgage Electronic Registration Systems, Inc., as nominee for Greenspoint Funding, to pay all costs incurred in this appeal. We further order this decision certified below for observance.

Appendix Exhibit Page 20