Pruitt et al v. The Bank of New York Mellon
ORDER granting 14 Motion for Summary Judgment; accepting in part and rejecting in part 19 Findings and Recommendations on Case and sustaining Defendant's objections to Findings and Recommendations. (Ordered by Judge Sam A Lindsay on 1/3/2017) (chmb)
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
STEVE PRUITT AND DEBRA PRUITT,
THE BANK OF NEW YORK MELLON
FKA THE BANK OF NEW YORK AS
TRUSTEE FOR THE CERTIFICATE
HOLDERS OF CWMBS, INC., CHL
TRUST 2004-20, MORTGAGE PASSTHROUGH CERTIFICATES SERIES
Civil Action No. 3:15-CV-2359-L
Before the court is Defendant The Bank of New York Mellon’s Motion for Summary
Judgment (Doc. 14), filed August 31, 2016. On November 30, 2016, United States Magistrate Judge
David L. Horan entered the Findings, Conclusions and Recommendation of the United States
Magistrate Judge (“Report”), recommending that the court grant the summary judgment motion and
dismiss with prejudice Plaintiff Steve Pruitt’s breach of contract claim and Plaintiffs’ claims for
common law fraud and breach of the duty to deal in good faith, but deny the motion with respect to
Plaintiff Debra Pruitt’s contract claim.
Defendant objected to the Report on December 14, 2016. In its objections, Defendant
contends that Debra Pruitt lacks standing to bring a contract claim against it; that she failed to state
a valid claim for breach of contract; that she presented no facts to support a breach of the deed; and
Order – Page 1
that her contract claim is barred by Plaintiffs’ prior breach. Plaintiffs did respond to Defendant’s
objections or summary judgment motion.
After considering the motion, Defendant’s briefs and evidence, Plaintiffs’ verified pleadings,
record in this case, applicable law, and Report, and having conducted a de novo review of that
portion of the Report to which objections were made, the court determines that the findings and
conclusions of the magistrate judge with respect to Plaintiff Steve Pruitt’s breach of contract claim
and Plaintiffs’ claims for common law fraud and breach of the duty to deal in good faith are correct,
and accepts them as those of the court. The court rejects the findings and conclusions of the
magistrate judge with respect to Plaintiff Debra Pruitt’s contract claim and sustains Defendant’s
objection regarding this claim, as the court determines that Plaintiffs’ pleadings, while verified, are
insufficient to raise a genuine dispute of material fact as to whether they performed as required under
the Note and Deed of Trust.
In Texas, performance or tendered performance by the plaintiff is an essential element of a
breach of contract claim. Mullins v. TestAmerica, Inc., 564 F.3d 386, 418 (5th Cir. 2009) (listing
elements). Moreover, “a party to a contract who is himself in default cannot maintain a suit for its
breach.” Dobbins v. Redden, 785 S.W.2d 377, 378 (Tex. 1990) (quoting Gulf Pipe Line Co. v.
Nearen, 135 Tex. 50, 138 S.W.2d 1065, 1068 (Tex. Comm’n App. 1940)). In its summary judgment
motion, Defendant contends that Plaintiffs cannot establish any elements of their contract claim.
With respect to the element of performance, Defendant asserts that Plaintiffs cannot establish their
own performance under the contract because they have not made any payments on their loan since
October 2013, and their contract claim is barred by their own prior material breach of the contract
in failing to pay their mortgage. Def.’s Mot. 7-8.
Order – Page 2
The magistrate judge determined that Plaintiffs’ performance in making mortgage payments
was excused because they allege that Defendant informed them not to make any payments while the
loan modification negotiations were pending. The magistrate judge is correct that, under Texas law,
when one party’s wrongful interference prevents the other party’s performance of a contract, not only
is the other party’s performance excused, but the interfering party has committed a breach of contract
for which the other party may recover damages sustained from the breach. See Report 15 (citing
Longview Const. & Dev., Inc. v. Loggins Const. Co., 523 S.W.2d 771, 779 (Tex. Civ. App.—Tyler
1975, writ dism’d by agr.). The magistrate judge’s findings in this regard, however, incorrectly
assume that Plaintiffs were current on their mortgage payments and had not defaulted on their loan
before they started the loan modification process and were told not to make any payment during this
process. Such an assumption is not supported by the summary judgment record.
In support of its summary judgment motion, Defendant presented competent summary
judgment evidence that Plaintiffs were in default because they failed to make any monthly payments
after October 2013. See Def.’s App. 1, 2, 36. Plaintiffs, therefore, had the burden to come forward
with evidence to establish that they had not defaulted under and breached the Note and Deed of Trust
prior to seeking a loan modification. Plaintiffs did not respond to the summary judgment motion or
come forward with any evidence in response to the motion. The magistrate judge correctly applied
the no-response summary judgment standard and considered Plaintiffs’ verified pleadings as
evidence. Plaintiffs’ verified pleadings, however, are insufficient to raise a genuine dispute of
material fact because Plaintiffs do not allege that they were current on their mortgage payments when
they began the loan modification process, and they acknowledge that they sought a loan modification
because they were experiencing financial difficulties.
Order – Page 3
In this regard, Plaintiffs allege that, in an effort to remedy their financial situation, they
entered into debt restructuring negotiations with Defendant to modify the terms of their Note.
Plaintiffs further allege in their Original Petition, dated June 29, 2015, that they submitted financial
documents as part of these negotiations “[o]ver the last several months.” Pl.’s Orig. Pet. 2. Other
than this oblique passing reference, Plaintiffs do not specifically state when they began debt
restructuring negotiations with Defendant. As no date is alleged, the court, at most, can only
reasonably infer from Plaintiffs’ pleadings that they entered debt restructuring negotiations with
Defendant sometime in mid 2014 to early 2015, several months before they filed their Original
Petition. In light of Defendant’s evidence that Plaintiffs defaulted in late 2013, Plaintiffs’ allegations
that they entered debt restructuring negotiations with Defendant approximately one year later is
insufficient to establish or raise a genuine dispute of material fact as to whether Defendant’s alleged
breach with respect to any loan modification occurred before Plaintiffs’ breach in late 2013, when
they stopped making monthly mortgage payments in accordance with the Note and Deed of Trust.
Accordingly, no genuine dispute of material fact exists with respect to this element of Plaintiffs’
contract claim, and Defendant is entitled to judgment as a matter of law on this claim.1
As no genuine dispute of material fact exists with respect to any of the claims asserted by
Plaintiffs, the court grants Defendant The Bank of New York Mellon’s Motion for Summary
Judgment (Doc. 14) and dismisses with prejudice all claims asserted by Plaintiffs in this action.2
The magistrate judge determined that Steve Pruitt was judicially estopped from pursuing a contract claim based
on the Note and Deed of Trust because he failed to disclose any claim asserted in this lawsuit as an asset in a bankruptcy
case initiated by him. Plaintiffs’ contract claim also fails with respect to both Plaintiffs for the reasons herein explained.
In addition to the claims brought in this case, Plaintiff’s Original Petition includes a request for a temporary
restraining order (“TRO”) to prevent Defendant from selling the property at issue in a foreclosure sale and evicting them
from the property. Defendant asserts in its summary judgment motion that Plaintiffs’ request for injunctive relief is moot
because, after expiration of the TRO entered by the state court, the case was removed to federal court, and Plaintiffs were
evicted from the property. The record supports Defendant’s assertion in this regard, Plaintiffs did not renew their request
Order – Page 4
The court, as required by Rule 58 of the Federal Rules of Civil Procedure, will issue judgment by
It is so ordered this 3rd day of January, 2017.
Sam A. Lindsay
United States District Judge
for injunctive relief after the case was removed. Moreover, as the court has determined that Defendant is entitled to
judgment on Plaintiffs’ claims, Plaintiffs cannot satisfy all elements necessary for injunctive relief in federal court. The
court, therefore, denies Plaintiffs’ request for injunctive relief.
Order – Page 5
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