Sanders v. HSBC Bank USA, NA

Filing 30

ORDER granting 27 Motion for Summary Judgment. Plaintiff's request for injunctive relief is DENIED. Plaintiff's request for attorney's fees is also DENIED. Signed by District Judge Robert W. Schroeder, III on 12/18/2017. (rlf)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
TYLER DIVISION
SHALONDA SANDERS,
Plaintiff,
v.
HSBC
BANK
ASSOCIATION,

USA,

NATIONAL

Defendant.

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CIVIL ACTION NO. 6:16-CV-01031-RWS

ORDER
Before the Court is Defendant HSBC Bank USA’s (“Defendant”) Motion for Summary
Judgment. Docket No. 27. Plaintiff has not filed a response. For the reasons below, the Motion
for Summary Judgment is GRANTED.
BACKGROUND
This is a wrongful foreclosure case. Borrower Rolanda M. Forney (“Borrower”) executed
an Adjustable Rate Note and a Home Equity Note, both in favor of Fieldstone Mortgage Company,
in the amounts of $101,571.00 and $25,392.00 on November 12, 2004. Docket No. 27-2. The
notes relate to the property located at 20071 Meadow View Lane, Flint, Texas 75762. Id. at 1.
Plaintiff also executed a Deed of Trust, securing the obligations under the notes by placing a first
lien on the property. Docket No. 27-3.
By September 2012, Borrower had defaulted on the loan. Docket No. 27-5. After
Borrower passed away in February 2013, her sister, Shalonda Sanders (“Plaintiff”), paid
$74,075.43 in June 2013 to reinstate the loan that had been in default. Docket No. 27-7 at 8.

Plaintiff later made a second payment of $2,015.88 in July 2013. Docket Nos. 27-7 at 8 and 2712 at 2. After this second payment, Plaintiff admits she never made another payment on the loan.
Docket No. 27-12 at 2. Thus, in August 2013, the loan was back in default. Docket No. 27-8 at
1. The property was finally sold at a foreclosure sale to Defendant for $124,925.48 on December
1, 2015. Docket No. 27-10 at 1.
Plaintiff then filed a Complaint in the 241st Judicial District Court of Smith County, Texas
alleging wrongful foreclosure by Defendant of the property. Docket No. 4. Defendant then
removed the action to this Court under 28 U.S.C. §§ 1441 and1446. Docket No. 1. Plaintiff seeks
an injunction, damages and attorney’s fees. Id. at 7–8.
LEGAL STANDARD
Summary judgment is proper if “if the movant shows that there is no genuine dispute as to
any material fact and that the movant is entitled to judgment as a matter of law. Fed. R. Civ. P.
56(a). A dispute about a material fact is genuine if “the evidence is such that a reasonable jury
could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248 (1986). When the movant for summary judgment demonstrates the absence of a genuine
dispute over any material fact, the burden to show that there is a genuine issue for trial shifts to the
non-movant. Celotex Corp. v. Catrett, 477 U.S. 317, 323–24 (1986). In determining whether a
genuine issue for trial exists, a court views all inferences drawn from the factual record in the light
most favorable to the non-moving party. Matsushita Elec. Indus. v. Zenith Radio, 475 U.S. 574,
587 (1986).
Under Texas law, a wrongful foreclosure claim requires: (1) a defect in the foreclosure
proceedings; (2) a grossly inadequate selling price; and (3) a causal connection between the two.
Martins v. BAC Home Loans Servicing, L.P., 722 F.3d 249, 256 (5th Cir. 2013); Barcenas v. Fed.

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Home Loan Mortg. Corp., 2013 WL 286250, at *5 (S.D. Tex. Jan. 24, 2013) (citing Sauceda v.
GMAC Mortg. Corp., 268 S.W.3d 135, 139 (Tex. App.—Corpus Christi 2008, no pet.)).
“Moreover there must be evidence of an irregularity that ‘must have caused or contributed to cause
the property to be sold for a grossly inadequate price.’ ” Barcenas, 2013 WL 286250 at *5 (quoting
In re Keener, 268 B.R. 912, 921 (Bankr. N.D. Tex. 2001). “Under Texas law a grossly inadequate
price would have to be ‘consideration so far short of the real value of the property as to shock a
correct mind, and thereby raise a presumption that fraud attended the purchase.’ ” Barcenas, 2013
WL 286250 at *5 (quoting Richardson v. Wells Fargo Bank, N.A., 873 F. Supp. 2d 800, 813 (N.D.
Tex. 2012), aff’d, 538 F. App’x 391 (5th Cir. 2013)).
ANALYSIS
In its motion for summary judgment, Defendant argues there is no genuine dispute as to
any material fact concerning the three elements of a wrongful foreclosure claim. Docket No. 27.
First, Defendant argues there was no defect in the foreclosure proceedings. Id. at 7. Second,
Defendant claims the selling price was not grossly inadequate. Id. at 7–8. Third, Defendant argues
there was no causal connection between any defect and a grossly inadequate selling price. Id. at
8. Plaintiff did not respond with any legal arguments to the motion. Rather, Plaintiff submitted a
“controverting affidavit” more than a week after the response was due. Docket No. 29. The
affidavit recounts Plaintiff’s understanding of the facts, including that she made two payments of
$74,075.43 and $2,015.88 in 2013. Id. at 2.
There is no genuine dispute as to any material fact concerning any defect in the foreclosure
proceedings. The parties agree that Plaintiff made two payments in 2013 totaling $76,091.31.
Docket No. 27-7 at 8. Yet Plaintiff admits the total amount due on the loan was actually
$101,086.54. Docket No. 27-12 at 6. Plaintiff never made another payment on the loan after the

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two payments in 2013. Docket Nos. 27-7 at 8 and 27-12 at 2. The loan subsequently went into
default. Docket No. 27-8 at 1. On November 4, 2015, Defendant exercised its right under the loan
to appoint a substitute trustee over the property upon default. Docket No. 27-9. As a result, the
property was sold on December 1, 2015 at a foreclosure sale. Docket No. 27-10. Plaintiff has not
shown a genuine dispute as to any material fact concerning the foreclosure proceeding.
There is also no genuine dispute as to any material fact regarding a grossly inadequate
selling price. “The weight of Texas authority rejects a determination of gross inadequacy where
. . . property sells for over 60% of fair market value.” Fed. Deposit Ins. Corp. v. Blanton, 918 F.2d
524, 531 (5th Cir. 1990). Here, the property sold for $124,925.48. Docket No. 27-10 at 1.
According to the Smith County Appraisal District, the fair market value of the property in 2015
was $154,521.00. Docket No. 27-11. Thus, the property sold for about 80% of its fair market
value. Therefore, no genuine dispute as to any material fact exists regarding the adequacy of the
selling price.
Finally, no genuine dispute as to any material fact exists regarding the third element of a
wrongful foreclosure claim. The third element requires a causal connection between the first two
elements. 722 F.3d at 256. Since the uncontroverted evidence has established there was neither a
defect in the foreclosure proceeding nor a grossly inadequate selling price, the third element cannot
be met. Thus, no genuine dispute as to any material fact exists regarding the causal connection.
CONCLUSION
Accordingly, the uncontroverted evidence in the record establishes there is no genuine
dispute of material fact as to any of the three elements of a wrongful foreclosure claim.
Defendant’s Motion for Summary Judgment is hereby GRANTED.

Plaintiff’s request for

injunctive relief is DENIED. Plaintiff’s request for attorney’s fees is also DENIED.

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SIGNED this 18th day of December, 2017.

____________________________________
ROBERT W. SCHROEDER III
UNITED STATES DISTRICT JUDGE

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