Ocwen Loan Servicing LLC v. Berry
Filing
120
MEMORANDUM AND OPINION ORDER granting 94 Motion for Summary Judgment. The Court ORDERS US Bank to file a proposed final judgment by 5/25/2018.SO ORDERED. (Ordered by Judge Jane J. Boyle on 5/21/2018) (epm)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
US BANK TRUST NA,
Plaintiff and Counter Defendant,
v.
ROBERT M. BERRY,
Defendant and Counterclaimant.
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CIVIL ACTION NO. 3:14-CV-3340-B
MEMORANDUM AND OPINION ORDER
Before the Court is Plaintiff/Counter Defendant US Bank Trust NA’s (US Bank) motion for
summary judgment. Doc. 94. For the following reasons, the Court GRANTS the motion.
I.
BACKGROUND1
This is a foreclosure case. On May 29, 2007, Defendant/Counterclaimant Robert Berry
purchased his home by executing a note for $340,000 with an accompanying security instrument.
Doc. 95, Pl.’s Br., 2.2 At closing, Berry executed an equity affidavit and agreement (2007 affidavit)
attesting to the propriety of the loan. Id. In November 2009, Berry defaulted. Id. Berry received a
notice of default asking him to cure, but he did not do so. Id. The maturity of the debt was
accelerated; Berry received notice of that too. Id. at 3–4. So now Berry owes the balance of the loan.
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The Court derives the facts from the summary-judgment briefing and record. Any contested fact
will be so noted.
2
The note and security instrument have traded hands several times over the years. Doc. 95, Pl.’s
Br., 2–3. But is is undisputed that US Bank is the current owner and holder of the note and security
interest with Caliber as the mortgage servicer. Id.
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Id. at 4.
Suit was filed in September 2014. Doc. 1. Since then, this case has been litigated before this
Court, Ocwen Loan Servicing v. Berry, No. 3:14-CV-3340-P, 2016 WL 8943162 (N.D. Tex. Jan. 29,
2016), and the Fifth Circuit, Ocwen Loan Servicing, L.L.C. v. Berry, 852 F.3d 469 (5th Cir. 2017),
which reversed this Court’s decision based on the Texas Supreme Court’s intervening decision in
Wood v. HSBC Bank USA, N.A., 505 S.W.3d 542 (Tex. 2016). This case’s lengthy procedural history
has whittled down the parties’ claims; US Bank asserts in its complaint that it is entitled to judicial
foreclosure. Doc. 108, Pl.’s Second Am. Compl., ¶¶ 14–23. And Berry claims his loan is invalid
because it does not comply with Tex. Const. art. XVI, § 50. Doc. 26, First Am. Answer, 3–4. US
Bank moved for summary judgment on its claim and on Berry’s counterclaim. Its motion is now ripe
for resolution.
II.
LEGAL STANDARD
Courts must grant summary judgment “if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). A dispute “is ‘genuine’ if the evidence is sufficient for a reasonable jury to return a verdict for
the non-moving party.” Burrell v. Dr. Pepper/Seven Up Bottling Grp., 482 F.3d 408, 411 (5th Cir.
2007). And a fact “is ‘material’ if its resolution could affect the outcome of the action.” Id.
The summary-judgment movant bears the burden of proving that no genuine issue of material
fact exists. Latimer v. Smithkline & French Labs., 919 F.2d 301, 303 (5th Cir. 1990). So the movant
must identify “those portions of the pleadings, depositions, answers to interrogatories, and admissions
on file, together with affidavits, if any, which it believes demonstrate the absence of a genuine issue
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of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (internal quotation marks
omitted). Once the movant has produced evidence on an element or claim or alleged the
non-movant has no evidence, the non-movant must “identify specific evidence in the record” and
“articulate the precise manner in which that evidence supports [its] claim” to show that a fact issue
exists. Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998). And although the Court
views evidence in the light most favorable to the non-movant when determining whether a genuine
issue exists, Munoz v. Orr, 200 F.3d 291, 302 (5th Cir. 2000), mere “metaphysical doubt as to
material facts,” “conclusory allegations,” “unsubstantiated assertions,” or a mere “scintilla of
evidence” will not save a non-movant from summary judgment, Little v. Liquid Air Corp., 37 F.3d
1069, 1075 (5th Cir. 1994) (per curiam) (internal citations and quotation marks omitted).
III.
US BANK’S OBJECTION TO BERRY’S 2015 AFFIDAVIT
US Bank asks the Court in its reply to strike Berry’s 2015 affidavit in his summary-judgment
appendix under the sham-affidavit rule because the 2015 affidavit contradicts his 2007 affidavit. Doc.
103, Pl.’s Reply, 1–2.
The sham-affidavit rule “prevents a party from defeating a motion for summary judgment
‘using an affidavit that impeaches, without explanation, sworn testimony.’” Robinson v. Nexion Health
At Terrell, Inc., 671 F. App’x 344 (5th Cir. 2016) (per curiam) (quoting S.W.S. Erectors, Inc. v. Infax,
Inc., 72 F.3d 489, 495 (5th Cir. 1996)). Sham affidavits are not admissible. Keller v. Coastal Bend
Coll., 629 F. App’x 596, 601 n.4 (5th Cir. 2015). The 2007 affidavit is not entirely inconsistent with
the 2015 affidavit, so the Court will not strike the 2015 affidavit in its entirety. But the Court will
strike the conflicting portions of the 2015 affidavit as discussed below.
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IV.
ANALYSIS
US Bank asserts it is entitled to judicial foreclosure because Berry defaulted. Doc. 95, Pl.’s
Br., 14–17. US Bank also seeks summary judgment on Berry’s counterclaim under Tex. Const. art.
XVI, § 50. Id. at 6–13. Berry claims in his response that US Bank cannot obtain a judicial-foreclosure
order because his loan does not comply with Tex. Const. art. XVI, § 50. Doc. 101, Def.’s Resp., 7–12.
US Bank’s request for judicial foreclosure turns on whether Berry’s loan complies with § 50. Wood,
505 S.W.3d at 546–550. Therefore, the Court will first address Berry’s § 50 claim and then decide
whether US Bank is entitled to judicial foreclosure.
A.
Berry’s § 50 Claims3
1.
Section 50(a)(6)(M)(i)
Berry claims his loan is invalid because it does not comply with § 50(a)(6)(M)(i), under
which loans may not be executed until twelve days after submitting a loan application. Berry says
there is no evidence that he submitted his loan application at least twelve days before closing. Doc.
101, Def.’s Resp., 10–11; see also Doc. 32-3, Berry Aff., 2. In its reply, US Bank points to the loan
application itself, which Berry signed on May 11, 2007, eighteen days before closing. Doc. 106, Pl.’s
App, 145; see also Doc. 103, Pl.’s Reply, 3–4. Berry does not contest that he signed the loan
application, but he questions whether he signed it on May 11, 2007. Doc. 32-3, Berry Aff., 2.
The Court agrees with US Bank that there is no genuine dispute that Berry submitted his
loan application more than twelve days before closing. Berry’s loan application itself so indicates, and
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Berry no longer contests whether his loan exceeded eighty percent of his home’s fair market
value and whether the extension of credit was nonrecourse. Doc. 101, Def.’s Resp., 7–8.
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Berry’s affidavit is too conclusory to controvert the date on the loan application. Kariuki v. Tarango,
709 F.3d 495, 505 (5th Cir. 2013) (“[W]ithout more, a vague or conclusory affidavit is insufficient
to create a genuine issue of material fact in the face of conflicting probative evidence.”). So the Court
GRANTS US Bank’s motion for summary judgment with respect to Berry’s § 50(a)(6)(M)(i) claim.
2.
Section 50(g)
Berry next claims that his loan is not valid because it does not comply with § 50(g), which
requires the lender to provide the borrower with certain notices at least twelve days before closing.
Doc. 101, Def.’s Resp., 8–9. Berry says there is no evidence that he received such notice before
closing. Id.; see also Doc. 32-3, Berry Aff., 2. US Bank asks the Court to strike Berry’s 2015 affidavit
insofar as it suggests that he did not receive notice twelve days before closing because it contradicts
his 2007 affidavit in which Berry stated he did. Doc. 103, Pl.’s Reply, 1, 3.
The Court agrees with US Bank that there is no genuine dispute that Berry received notice
under § 50(g) at least twelve days before closing. Berry’s affidavits clearly conflict with one another.
Compare Doc. 96-1, Pl.’s App., 35 (“The Note and Security Instrument have not been signed before
the twelfth (12th) day after . . . the day that the Lender . . . provided the owner with a copy of the
Notice Concerning Extensions of Credit defined by Section 50 (a)(6).”), with Doc. 32-3, Berry Aff.,
2 (“I neither signed nor received any document . . . before . . . May 29, 2007.”). So the Court
STRIKES Berry’s 2015 affidavit under the sham-affidavit rule insofar as he alleges he did not receive
the notice twelve days before closing. Other than that portion of his sham affidavit, Berry has not
produced any evidence disputing that he received notice twelve days before closing. So the Court
GRANTS US Bank’s motion for summary judgment with respect to Berry’s § 50(g) claim.
3.
Section 50(a)(6)(M)(ii)
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Berry next claims that his loan is not valid because it does not comply with § 50(a)(6)(M)(ii),
which states that closing cannot occur until the day after the borrower receives “a final itemized
disclosure of the actual fees, points, interest, costs, and charges that will be charged at closing.” He
says in his 2015 affidavit that he did not receive an itemized list until closing. Doc. 32-3, Berry Aff.,
2. US Bank points out that Berry’s 2007 affidavit indicates that he received such a list on May 11,
2007, eighteen days before closing. Doc. 96-1, Pl.’s App., 140; see also Doc. 95, Pl.’s Br., 10–11.
The Court agrees with US Bank that there is no genuine dispute that Berry received the
itemized list at least a day before closing. Berry’s 2007 affidavit plainly conflicts with his 2015
affidavit with regard to when he received the itemized list. Compare Doc. 96-1, Pl.’s App., 140 (“On
or before May 11, 2007, Borrower received from the Lender . . . a form of HUD-1 Settlement
Statement itemizing the actual fees, points, interest, costs, and charges to be charged at the closing
of this loan.”), with Doc. 32-3, Berry Aff., 2 (“I did not receive an itemized statement of costs and
expenses prior to May 29, 2007.”). So the Court STRIKES Berry’s 2015 affidavit under the shamaffidavit rule insofar as it indicates that he did not receive the itemized list before May 29, 2007.
Without this portion of his sham affidavit, Berry has no evidence controverting his 2007 affidavit,
which indicates that Berry received the itemized list on May 11, 2017. So the Court GRANTS
summary judgment in favor of US Bank on Berry’s § 50(a)(6)(M)(ii) claim.
4.
Section 50(a)(6)(Q)(v)
Berry claims his loan is not valid because it does not comply with § 50(a)(6)(Q)(v), which
requires that borrowers “receive a copy of the final loan application and all executed documents
signed by the owner at closing related to the extension of credit.” Berry asserts that he did not receive
a copy of all the final loan documents. Doc. 32-3, Berry Aff., 2–3. US Bank points to a document
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signed by Berry that says he did. Doc. 96-1, Pl.’s App., 147. The Court agrees with US Bank that
there is no genuine dispute that Berry received copies of the final loan documents. Berry’s bald
assertion that he did not receive copies of these documents is too conclusory to controvert US Bank’s
evidence. Kariuki, 709 F.3d at 505. So the Court GRANTS summary judgment on Berry’s §
50(a)(6)(Q)(v) claim in US Bank’s favor.
5.
Section 50(a)(6)(Q)(iii)
Berry claims that his loan is not valid because it does not comply with § 50(a)(6)(Q)(iii),
which forbids borrowers from “sign[ing] any instrument in which blanks relating to substantive terms
of agreement are left to be filled in.” Berry asserts that someone filled in the blanks on various loan
documents after he signed them. Doc. 101, Def.’s Resp., 12. US Bank points to a document signed
by Berry affirming that the documents he signed at closing did not contain blanks. Doc. 96-1, Pl.’s
App., 147. The Court agrees with US Bank that there is no genuine dispute of material fact that
there were no blanks at closing. Berry’s conclusory statement in his 2015 affidavit that there were
blanks on his documents is not enough to controvert US Bank’s evidence to the contrary. Kariuki,
709 F.3d at 505. So the Court GRANTS summary judgment on Berry’s § 50(a)(6)(Q)(iii) claim in
US Bank’s favor. In sum, none of Berry’s § 50 claims have merit.
B.
Judicial Foreclosure
US Bank says it is entitled to judicial foreclosure because Berry defaulted on his loan. Doc.
95, Pl.’s Br., 14–15. Berry’s only argument in his response is that his loan was invalid because it
violates § 50. Doc. 101, Def.’s Resp., 13.
The Court agrees with US Bank that there is no genuine dispute that it is entitled to judicial
foreclosure. “To foreclose under a security instrument in Texas with a power of sale, the lender must
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demonstrate that: (1) a debt exists; (2) the debt is secured by a lien created under [Tex. Const. art.
XVI, § 50(a)(6)] . . .; (3) plaintiffs are in default under the note and security instrument; and (4)
plaintiffs received notice of default and acceleration.” Huston v. U.S. Bank Nat’l Ass’n, 988 F. Supp.
2d 732, 740 (S.D. Tex. 2013) (citing Tex. Prop. Code § 51.002); see also Bowman v. CitiMortgage,
Inc., No. 3:14-CV-4036-B, 2018 WL 2184398, at *3 (N.D. Tex. May 11, 2018). US Bank has
presented undisputed evidence that Berry took out a loan secured by a lien created under Tex.
Const. art. XVI, § 50(a)(6), Doc. 96-1, Pl.’s App., 8, and Berry admitted he defaulted on that loan
by failing to make mortgage payments, Doc. 101, Def.’s Resp., 6. Furthermore, US Bank has
presented undisputed evidence that the Barry received proper notices of default and acceleration and
Berry does not contest the notices’ propriety. Doc. 96-1, Pl.’s App., 64–74. So US Bank is entitled
to summary judgment on its judicial-foreclosure claim.
V.
CONCLUSION
For the reasons stated, the Court GRANTS US Bank’s motion for summary judgment. Doc.
94. The Court ORDERS US Bank to file a proposed final judgment by May 25, 2018.
SO ORDERED.
SIGNED: May 21, 2018.
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