Case: 13-50812      Document: 00512652362         Page: 1    Date Filed: 06/04/2014




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

                                                                               FILED
                                    No. 13-50812                            June 4, 2014
                                  Summary Calendar
                                                                          Lyle W. Cayce
                                                                               Clerk
JEFFERY STEVENS; GLORIA STEVENS,

                                                 Plaintiffs-Appellants
v.

DEUTSCHE BANK NATIONAL TRUST COMPANY; AMERICA’S
SERVICING COMPANY,

                                                 Defendants-Appellees




                   Appeal from the United States District Court
                        for the Western District of Texas
                             USDC No. 5:12-CV-1177


Before REAVLEY, JONES, and PRADO, Circuit Judges.
PER CURIAM:*
       Plaintiffs-Appellants Jeffery and Gloria Stevens (the “Stevenses”)
dispute the authority of Defendants-Appellees Deutsche Bank National Trust
Company (“Deutsche Bank”) and America’s Servicing Company (“ACS”) to
foreclose on their home. The Stevenses base their challenge on alleged flaws




       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
    Case: 13-50812    Document: 00512652362       Page: 2   Date Filed: 06/04/2014



                                 No. 13-50812
in an assignment transferring their home-equity loan to Deutsche Bank. The
district court granted Defendants-Appellees’ motion to dismiss. We AFFIRM.
                                       I.
      In April 2004, the Stevenses purchased property located at 5801 Spring
Village, San Antonio, Texas. In November 2006, the Stevenses took out a
home-equity loan for the amount of $132,000.         The Stevenses executed a
security instrument naming the New Century Mortgage Company (“New
Century”) as lender and Mortgage Electronic Registration Systems, Inc.
(“MERS”) as beneficiary “acting solely as a nominee for Lender and Lender’s
successors and assigns.” The Stevenses also executed a note, which was placed
in a trust named HIS Asset Securitization Trust 2007-NCI (the “Trust”).
Under the Pooling and Servicing Agreement (PSA), mortgages could not
transfer out of the Trust after April 30, 2007.
      In 2007, New Century went bankrupt.           Around July 2008, ACS, a
mortgage servicer, notified the Stevenses that they should make future loan
payments to ACS, allegedly without revealing that the actual mortgagee was
Wells Fargo Bank, N.A. (“Wells Fargo”).      The Stevenses fell behind on their
loan with Wells Fargo, and entered into a forbearance agreement in April 2010.
Around January 2011, MERS, acting as nominee for New Century, transferred
the note and deed of trust to Deutsche Bank. The Stevenses brought suit in
Texas state court, contesting Deutsche Bank’s authority to foreclose on the
Spring Village property.     After removal, Defendants-Appellees moved to
dismiss for failure to state a claim. The district court granted the motion, and
dismissed the case. This appeal follows.
                                       II.
      On appeal, the Stevenses argue that the assignment was void because it
violated the PSA and because New Century’s bankruptcy vitiated MERS’s
right to act on its behalf. The Stevenses also dispute the district court’s
                                        2
      Case: 13-50812    Document: 00512652362        Page: 3    Date Filed: 06/04/2014



                                    No. 13-50812
dismissal of their claims under Section 12.002(a) of the Texas Civil Practice
and Remedies Code and for breach of contract. We address each argument in
turn.
        As a non-party to the assignment agreement, the Stevenses cannot
challenge the Deutsche Bank’s enforcement of the agreement unless the
assignment is void. Reinagel v. Deutsche Bank Nat’l Trust Co., 

,
225 (5th Cir. 2013). 1 Here, however, the flaws alleged by the Stevenses render
the assignment voidable, not void. 

(holding that an assignment that
violates a PSA renders the assignment voidable); 11 U.S.C. § 549(a)(1)(B)
(providing that trustee “may avoid” post-petition bankruptcy transfers). Thus,
the Stevenses do not have standing to challenge the assignment.
        The Stevenses’ claim under Section 12.002(a) requires, inter alia, an
allegation that Defendants-Appellees intended to cause the Stevenses physical
injury, financial injury, or mental anguish. Golden v. Wells Fargo Bank, N.A.,
No. 13-50158, 

, at *3 (5th Cir. Feb. 20, 2014) (per curiam). The
Stevenses allege only that Deutsche Bank used the assigning document “for
the express purpose of closing an [sic] link in the chain of title so that [it] could
proceed to foreclose.” As this Court previously held:
        [Deutsche Bank]’s use of the assignment for business purposes
        hardly equates to an argument that it intended to inflict financial
        injury or mental anguish. The [Stevenses] have not alleged any
        facts showing that their property would not be subject to
        foreclosure, even absent the assignment of the deed of trust to
        [Deutsche Bank].

fail to state a claim under


        1The Stevenses attempt to circumvent Reinagel by arguing that that a transfer in
violation of a PSA is void under New York law. Because Plaintiffs-Appellants never
contended, however, that New York law governed this issue in their pleadings or in
opposition to Defendants-Appellees’ motion to dismiss, this argument is waived. See
Chambliss v. Massanari, 

, 523 (5th Cir. 2001).

                                           3
    Case: 13-50812     Document: 00512652362      Page: 4   Date Filed: 06/04/2014



                                  No. 13-50812
Section 12.002(a).
      Finally, the Stevenses claim breach of contact based on alleged credit
swaps and insurance proceed payments. The Stevenses do not allege, however,
that they performed their loan obligations, nor do they dispute that they are
in default. In Texas, performance or tendered performance by the plaintiff is
an essential element of a breach of contract claim, and a party in default cannot
sue for breach of contact. 

For both of these reasons, the district court
correctly dismissed the breach of contract claim as a matter of law.
                                                                    AFFIRMED.




                                        4