Ocwen Loan Servicing, LLC v. Heiberg et al

Filing 106

MEMORANDUM ADOPTING REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE for 103 Report and Recommendations. It is, therefore, ORDERED that Plaintiff Ocwen Loan Servicing, LLC's Motion for Summary Judgment (Dkt. 89 ) is hereby GRANTED. Plaintiff shall file its requested form of final judgment within five (5) days of entry of this Memorandum Adopting. Signed by District Judge Amos L. Mazzant, III on 6/17/2020. (baf, )

United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION

OCWEN LOAN SERVICING, LLC
v.
CLAY B. HEIBERG, IN HIS CAPACITY
AS EXECUTOR OF THE ESTATE OF
GREGORY L. COLLINS, ET. AL.

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Civil Action No. 4:17-CV-690
(Judge Mazzant/Judge Nowak)

MEMORANDUM ADOPTING REPORT AND
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
Came on for consideration the report of the United States Magistrate Judge in this action,
this matter having been heretofore referred to the Magistrate Judge pursuant to 28 U.S.C. § 636.
On May 11, 2020, the report of the Magistrate Judge (Dkt. #103) was entered containing proposed
findings of fact and recommendations that Plaintiff Ocwen Loan Servicing, LLC’s Motion for
Summary Judgment (Dkt. #89) be granted, and that final judgment be entered in favor of Plaintiff
and against Defendants.

Having received the report of the Magistrate Judge, having

considered Defendant Suzanne M. Stanton’s Objections (Dkt. #104), Plaintiff’s Response
(Dkt. #105), and having conducted a de novo review, the Court is of the opinion that the
Magistrate Judge’s report should be adopted.
RELEVANT BACKGROUND
Plaintiff Ocwen filed the instant suit on September 28, 2017, in the Eastern District of
Texas seeking to enforce a mortgage lien interest in the real property located at 1501 Sussex Drive,
Plano, Collin County, Texas 75075 (the “Property”) against Defendants Clay B. Heiberg, in his
capacity as executor of the estate of Gregory L. Collins, and Suzanne M. Stanton, individually
(Dkt. #1). Prior to his death, the Property was owned by Gregory Lee Collins (hereinafter

“Decedent”); and following his death in 2013, the Loan went into default as Decedent’s estate
failed to make the September 1, 2014 payment on the Note and each payment thereafter (Dkts. #1;
#89-1). After sending a notice of default and intent to accelerate, Ocwen accelerated the maturity
of the Loan by filing the instant suit (Dkt. #1). By and through the instant suit, Ocwen seeks an
order permitting enforcement of its lien and foreclosure of the Property under the security
instrument and § 51.002 of the Texas Property Code (Dkts. #1; #89). Defendant Heiberg, in his
capacity as the executor of the estate of Decedent, and Defendant Stanton, in her alleged capacity
as the common-law spouse of the Decedent, filed competing probate actions relating to the
Property (Dkt. #1). The Court has previously considered, and rejected, the applicability of the
probate exception to this case (Dkts. #37; #45). Ocwen and Defendant Heiberg have resolved all
disputes between themselves and previously requested the Court enter a partial agreed judgment
related to Ocwen’s claim for foreclosure against Defendant Heiberg (Dkt. #67). The Court denied
such request pending the disposition of the instant Motion for Summary Judgment (Dkt. #99). On
May 11, 2020, the Magistrate Judge recommended Ocwen’s Motion for Summary Judgment be
granted (Dkt. #103), and that the Court find Ocwen is a proper plaintiff, Ocwen is entitled to
enforce the Loan, the Loan is in default, Owen is entitled to a declaration that the lien against the
Property shall be enforced by a judgment allowing it to proceed with foreclosure pursuant to Texas
Property Code § 51.002, and Ocwen is further entitled to attorney’s fees as established by
subsequent motion practice. On May 26, 2020, Defendant Stanton filed a document titled “In
Response to Your 2nd Summary Judgment Dated 5/11/20 Suzanne M. Stanton Recuses Judge
Christine Nowak and Judge Amos Mazzant” (Dkt. #104). Although titled “in response” to the
Magistrate Judge’s report, Defendant Stanton does not address any of the findings contained
therein, and instead asserts this Court has taken jurisdiction over the case fraudulently, committed

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judicial misconduct, and that the Magistrate Judge and the undersigned have been recused
(Dkt. #104). On May 29, 2020, Ocwen filed a response to Defendant Stanton’s Objections,
arguing they are “unintelligible and fail[] to address any of the findings in the Report and
Recommendation” (Dkt. #105 at p. 2).
OBJECTIONS TO REPORT AND RECOMMENDATION
A party who files timely written objections to a magistrate judge’s report and
recommendation is entitled to a de novo review of those findings or recommendations to which
the party specifically objects. 28 U.S.C. § 636(b)(1)(C); Fed. R. Civ. P. 72(b)(2)-(3). Defendant
Stanton’s Objections largely reiterate her discontent with the competing probate proceedings.
Defendant Stanton does not object to any of the Magistrate Judge’s substantive findings, including
that Ocwen is entitled to enforce the Loan, that the Loan is in default, or that Ocwen is entitled to
proceed with foreclosure. As such, the Court is of the opinion that the findings and conclusions of
the Magistrate Judge are correct and the undersigned hereby adopts the Magistrate Judge’s report
as the findings and conclusions of the Court. Notwithstanding, because Plaintiff appears to contest
the Court’s diversity jurisdiction, the Court addresses same herein.
The Court has Diversity of Citizenship Jurisdiction
Defendant Stanton claims “[t]his [C]ourt took Federal Jurisdiction fraudulently”
(Dkt. #104 at p. 1). Defendant Stanton quotes 28 U.S.C. § 1332(c)(2) which states in relevant part
“the legal representative of the estate of a decedent shall be deemed to be a citizen only of the same
State as the decedent . . . .” “Complete diversity ‘requires [only] that all persons on one side of
the controversy be citizens of different states than all persons on the other side.’” Xome Settlement
Servs., LLC v. Certain Underwriters at Lloyd’s, London, 384 F. Supp. 3d 697, 699 (E.D. Tex.
2019) (quoting Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1079 (5th Cir. 2008)). Plaintiff

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alleges its state citizenship (U.S. Virgin Islands) is different from Defendant Heiberg (Tennessee)
and Defendant Stanton (Texas) and the amount in controversy exceeds $75,000.00 (Dkt. #1).
Complete diversity exists. Even if Defendant Heiberg was deemed a citizen of the State of Texas
(which is what Plaintiff seemingly argues), complete diversity would still exist.
Stanton also cites to 28 U.S.C. § 1332(c)(1) and avers “Ocwen is a contractor for USAA
Insurance who insures [the Property] which is in the ‘Collins Trust’” (Dkt. #104 at p. 4). Section
1332(c)(1), states:
[A] corporation shall be deemed to be a citizen of every State and foreign state by
which it has been incorporated and of the State or foreign state where it has its
principal place of business, except that in any direct action against the insurer of a
policy or contract of liability insurance, whether incorporated or unincorporated, to
which action the insured is not joined as a party-defendant, such insurer shall be
deemed a citizen of—
(A) every State and foreign state of which the insured is a citizen;
(B) every State and foreign state by which the insurer has been
incorporated; and
(C) the State or foreign state where the insurer has its principal place of
business; and . . . .
28 U.S.C. § 1332(c)(1). As acknowledged in Stanton’s Objections, USAA Casualty Insurance
Company is merely the insurer of the Property; USAA Casualty Insurance Company is not a party
to the instant action and its citizenship as a non-party insurer has no bearing whatsoever on
diversity jurisdiction. Moreover, as detailed in the Magistrate Judge’s report, USAA Federal
Savings Bank originated the Loan; however, its security interest in the Property was subsequently
assigned:
The Note was specially indorsed from USAA to Ally Bank, from Ally to GMAC
Mortgage, Inc., and from GMAC to Fannie Mae [Dkt. 89-2 at 7]. Fannie Mae then
indorsed the note in blank [Dkt. 89-2 at 2]. Fannie Mae is the current owner and

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holder of the Note [Dkt. 89-1 at 4]. [Plaintiff] is in possession of the original Note
on behalf of Fannie Mae and also is the current servicer of the Loan [Dkt. 89-1
at 4].
(Dkt. #103 at p. 2). The Court has subject matter jurisdiction over the instant cause. Defendant
Stanton’s Objection is overruled.
Recusal Request
To the extent Defendant Stanton again seeks recusal of the Magistrate Judge and/or the
undersigned through her Objections, she has not demonstrated that recusal and/or disqualification
is appropriate. Defendant Stanton has not identified in her Objections a single ground for the
recusal of the undersigned or the Magistrate Judge, and the Court has already addressed Stanton’s
previous request for recusal at length (Dkt. #102). Further, the findings and conclusions contained
in the Magistrate Judge’s report and the other rulings issued by the Court in this case, without
more, are not a sufficient basis to justify recusal. Defendant Stanton’s Objection is overruled.
CONCLUSION
Having considered Defendant Stanton’s Objections (Dkt. #104), Plaintiff Ocwen’s
Response (Dkt. #105) and having conducted a de novo review, the Court adopts the Magistrate
Judge’s report (Dkt. #103) as the findings and conclusions of the Court.
It is, therefore, ORDERED that Plaintiff Ocwen Loan Servicing, LLC’s Motion for
Summary Judgment (Dkt. #89) is hereby GRANTED.
Plaintiff shall file its requested form of final judgment within five (5) days of entry of this
Memorandum Adopting.
IT IS SO ORDERED.

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SIGNED this 17th day of June, 2020.

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AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE

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