Case: 13-10362       Document: 00512401337         Page: 1     Date Filed: 10/09/2013




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                    Fifth Circuit

                                                                            FILED
                                                                          October 9, 2013
                                     No. 13-10362
                                   Summary Calendar                        Lyle W. Cayce
                                                                                Clerk

JOHN D. THORNTON; ROBYN THORNTON,

                                                  Plaintiffs - Appellants,
v.

GMAC MORTGAGE, L.L.C.,

                                                  Defendant - Appellee.



               Appeal from the United States District Court for the
                           Northern District of Texas
                                 3:12-CV-880


Before HIGGINBOTHAM, DENNIS, and GRAVES, Circuit Judges.
PER CURIAM:*
       John and Robyn Thornton brought an action against GMAC Mortgage in
Texas state court, seeking a declaration that GMAC’s lien on their home is
invalid and that GMAC has forfeited all interest and principal due under the
loan it made to the Thorntons. The Thorntons allege that the lien, which secures
a $81,600 loan, is invalid due to noncompliance with Article XVI, Section 50(a)(6)
of the Texas Constitution. Specifically, the Thorntons allege that the amount of
the loan exceeded eighty percent of their home’s fair market value. GMAC

       *
         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
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                                       No. 13-10362

removed the case to federal court and moved for summary judgment. The
district court granted GMAC’s motion and entered judgment in its favor,
concluding that the Thorntons had produced no competent evidence showing
that the loan exceeded eighty percent of the home’s value. The Thorntons now
appeal.
      Subject to certain exceptions, the Texas Constitution prohibits the sale of
a family’s homestead to satisfy debts. TEX. CONST. art. XVI, § 50(a). One
exception is for home equity mortgages that meet certain requirements,
including the requirement that the loan not exceed eighty percent of the fair
market value of the home at the time the loan is made. 

If the
requirements are not met, the lien is invalid and the principal and interest are
forfeited. 

The lender and the owner of the homestead must
“sign a written acknowledgement as to the fair market value of the homestead
property on the date the extension of credit is made.” 

The
lender “may conclusively rely on the written acknowledgement as to the fair
market value of the homestead property” if the value is based on an appraisal
or evaluation that meets certain criteria and if the lender “does not have actual
knowledge at the time of the payment of value or advance of funds . . . that the
fair market value stated in the written acknowledgement [is] incorrect.” 

      In 2007 the Thorntons took out a $81,600 loan, backed by a lien on their
home, from GMAC’s predecessor in interest.                     The parties signed an
acknowledgement stating that the fair market value of the home was $102,000,
based on an appraisal conducted by Scott Craft.1                  However, despite this
acknowledgement, the Thorntons now argue that the actual fair market value
of their home was $80,160, the value determined by the Dallas Central


      1
          The loan amount, $81,600, is exactly eighty percent of $102,000.

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                                  No. 13-10362

Appraisal District in 2007 for tax purposes. The Thorntons further argue that
because GMAC was aware of the value determined by the appraisal district,
GMAC could not rely upon the value stated in the written acknowledgement
because it had actual knowledge that this value was incorrect. The Thorntons
also point to a 2012 affidavit by John Thornton stating that, in his opinion, the
fair market value of the home was $80,160 in 2007.
      “[U]nder Texas law, tax valuations are legally insufficient evidence of fair-
market value.” United States v. Curtis, 

, 718 (5th Cir. 2011) (citing
Dallas Cnty. Bail Bond Bd. v. Black, 

, 249 (Tex.App.—Dallas
1992, no writ)); see also Poswalk v. GMAC Mortg., L.L.C., 519 F. App’x 884 (5th
Cir. 2013). Furthermore, John Thornton’s 2012 opinion of his home’s value in
2007 does not show that GMAC had actual knowledge that the value based on
the Craft appraisal was incorrect.       Because the Thorntons produced no
competent evidence showing that GMAC had actual knowledge that the
$102,000 value reflected in the written acknowledgement was incorrect, GMAC
may conclusively rely on this value to show that it did not violate section
50(a)(6).   The district court’s judgment in favor of GMAC is therefore
AFFIRMED.




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