Sevilla et al v. Federal National Mortgage Association et al

Filing 31

MEMORANDUM OPINION AND ORDER granting 16 Motion for Summary Judgment. (Ordered by Judge Jane J. Boyle on 2/13/2017) (Judge Jane J. Boyle)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
JORGE LUIS SEVILLA and REYNA
TELLO,

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Plaintiffs,
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v.
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FEDERAL NATIONAL MORTGAGE §
ASSOCIATION; BANK OF AMERICA, §
N.A.; and SETERUS, INC.,
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Defendants.
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CIVIL ACTION NO. 3:15-CV-3594-B

MEMORANDUM OPINION AND ORDER
Before the Court is Defendant Bank of America, N.A.’s (BANA) Motion for Summary
Judgment. Doc. 16. For the reasons set forth below, the Motion is GRANTED.
I.
BACKGROUND1
This case arises out of a dispute regarding the foreclosure of Plaintiffs’ property. On April 5,
2007, Jorge Luis Sevilla and Reyna Tello (collectively Plaintiffs) purchased property located at 2660
Windswept Lane, Mesquite, Texas 75118 (Property). Doc. 1-1, Pls.’ Compl. ¶ 12; Doc. 1-1, Special
Warranty Deed, Ex. A. To make the purchase, Plaintiffs executed a promissory note (Note) with
BANA for an original principal amount of $142,900.00. Doc. 1-1, Pls.’ Compl. ¶ 13. To secure the

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The Court draws its factual account from the allegations contained in Plaintiffs Sevilla and Tello’s Original
Verified Petition and Application for Temporary Restraining Order and Temporary Injunction and Request
for Disclosure. Doc. 1-1 [hereinafter Pls.’ Compl.]. The Court also draws from BANA’s briefing on the
Motion for Summary Judgment before the Court. Any contested facts are noted as such.
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Note, Plaintiffs executed a deed of trust (DOT) to BANA. Doc. 1-1, Pls.’ Compl. ¶ 13; Doc. 1-1,
Deed of Trust, Ex. B.
Plaintiffs allegedly made timely payments on the Note until late 2013, when Plaintiffs
experienced financial hardship. Doc. 1-1, Pls.’ Compl. ¶ 14. At this point in time, BANA no longer
had an interest in the Note or DOT; the Federal National Mortgage Association (Fannie Mae) had
been assigned the interest. Id. ¶ 14. Fannie Mae purchased the Property at a non-judicial foreclosure
sale on July 7, 2015. Id. ¶ 32. Fannie Mae then served Plaintiffs with a Complaint for Forcible
Detainer with a trial date in October 2015. Id. ¶ 34. Plaintiffs filed their Original Petition in state
court several days before the scheduled trial. See generally id. Plaintiffs brought their suit against
BANA, Fannie Mae, the mortgage servicer, Seterus, Inc. (Seterus), and Richard Snoke. Plaintiffs
alleged three causes of action against BANA specifically: (1)wrongful foreclosure; (2) common law
fraud; and (3) filing of a false lien or claim. Doc. 1-1, Pls.’ Compl. ¶¶ 38–48, 57–61. The suit was
timely removed to this Court in November 2015. See Doc. 1, Notice of Removal.
There is a dispute between Plaintiffs and BANA over how Fannie Mae obtained an interest
in the DOT. Plaintiffs reference and attach to their Complaint a Corporation Assignment of Deed
of Trust (Assignment of DOT) whereby Countrywide Home Loans, Inc. (Countrywide) assigned
Plaintiffs’ DOT to Fannie Mae in 2011. Doc. 1-1, Pls.’ Compl. ¶ 16; Doc. 1-1, Assignment of DOT,
Ex. C. Plaintiffs contend that without proof of the original lender, BANA, having never assigned the
DOT to Countrywide, Countrywide could not have had the authority to assign the DOT to Fannie
Mae in 2011. See Doc. 1-1, Pls.’ Compl. ¶ 17. Essentially, Plaintiffs point to a gap in the chain of
assignment. In its Motion, BANA, on the other hand, references a Corrective Assignment of Deed
of Trust (Corrective Assignment of DOT) filed in May 2013 that corrects the Assignor’s name from
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Countrywide to BANA. Doc. 18, App. in Supp. 18 [hereinafter BANA’s App.]. BANA contends,
therefore, that Countrywide was not the entity that assigned the DOT to Fannie Mae, but rather the
DOT was directly assigned from BANA.
BANA filed its Motion for Summary Judgment in July 2016. Doc. 16. Plaintiffs did not file
a Response. As such, the Motion is ripe for the Court’s review.
II.
LEGAL STANDARD
Summary judgment is appropriate “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). Usually, this
requires the movant to 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 of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)
(internal quotation marks omitted). But if the non-movant ultimately bears the burden of proof at
trial, the movant may satisfy its burden just by pointing to the absence of evidence supporting the
non-movant’s case. Id. at 322–23.
If the movant meets that burden, then it falls to the non-movant to “show with significant
probative evidence that there exists a genuine issue of material fact.” Hamilton v. Segue Software Inc.,
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232 F.3d 473, 477 (5th Cir. 2000) (internal quotation marks omitted) (citing Conkling v. Turner, 18
F.3d 1285, 1295 (5th Cir. 1994)). And significant probative evidence is just that: significant. See
Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (per curiam). In other
words,“metaphysical doubt as to material facts,” “conclusory allegations,” “unsubstantiated
assertions,” or a mere “scintilla of evidence” will not do. Id.(internal citations and quotation marks
omitted). Rather, “the non-movant must go beyond the pleadings and present specific facts
indicating a genuine issue for trial.” Bluebonnet Hotel Ventures, L.L.C. v. Wells Fargo Bank, N.A., 754
F.3d 272, 276 (5th Cir. 2014) (citing Celotex, 477 U.S. at 324).
To be sure, 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). But
it need not “sift through the record in search of evidence to support a party’s opposition to summary
judgment.” Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998) (quoting Skotak v.
Tenneco Resins, Inc., 953 F.2d 909, 915–16 & n.7 (5th Cir. 1992)). Simply put, the non-movant must
“identify specific evidence in the record” and “articulate the precise manner in which that evidence
supports [its] claim.” Id. If it cannot, then the court must grant summary judgment. Little, 37 F.3d
at 1076.
Plaintiffs did not respond to BANA’s Motion. Plaintiffs’ lack of a response means that
Plaintiffs have not designated specific facts showing there is a genuine issue for trial and Plaintiffs are,
therefore, relegated to their unsworn pleadings, which are not summary judgment evidence. Bookman
v. Shubzda, 945 F. Supp. 999, 1002 (N.D. Tex. 1996) (citing Solo Serve Corp. v. Westowne Assocs.,
929 F.2d 160, 165 (5th Cir. 1991). Thus, while Plaintiffs’ failure to respond does not permit the
Court to enter a “default” summary judgment, the Court is allowed to accept the evidence presented
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by BANA as undisputed. Eversley v. Mbank Dall., 843 F.2d 172, 174 (5th Cir. 1988); see also Ragas
v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998)(holding that a party opposing summary
judgment is required to identify specific evidence in the record and articulate the precise manner in
which that evidence supports her claim). As such, this Court accepts BANA’s evidentiary assertions
as undisputed. See Ragas, 136 F.3d at 458 (noting the court does not have the duty to sift through
the record in search of evidence to support a party’s opposition to summary judgment); Denmark v.
Cole, 2:02-cv-0295, 2005 WL 3293988, at *3 (N.D. Tex. Nov. 30, 2005) (When a plaintiff fails to
respond, “the Court is permitted to accept the defendants’ evidence as undisputed and may grant
summary judgment to the defendants upon a prima facie showing of entitlement.”).
III.
ANALYSIS
BANA asserts that Plaintiffs do not have standing to challenge the assignment of the DOT
because Plaintiffs are not parties to the assignment.2 Doc. 17, Def.’s Br. in Supp. Mot. Summ. J. 9
[hereinafter BANA’s Br.]. Because all of Plaintiffs’ claims rest on their challenge to the assignment,
BANA argues that all of Plaintiffs’ claims must fail and that the Court should grant its Motion. Id.
The Court agrees with BANA.
Borrowers have limited standing to challenge assignments of their DOTs because they are
not parties to the assignment. Ferguson v. Bank of N.Y. Mellon Corp., 802 F.3d 777, 780 (5th Cir.
2015). Although “‘the law is settled’ in Texas that [a borrower] cannot defend against an assignee’s

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A defendant’s argument that a plaintiff cannot challenge the validity of an assignment to which he was not
a party is a challenge to that plaintiff’s statutory standing, and not his Article III standing. Scott v. Bank of
America, N.A., SA-12-cv-00917-DAE, 2013 WL 1821874, at *4 n.2 (W.D. Tex. Apr. 29, 2013) (citing
Blanchard 1986, Ltd. V. Park Plantation, LLC, 553 F.3d 405, 409 (5th Cir. 2008)).
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efforts to enforce the obligation on a ground that merely renders the assignment voidable at the
election of the assignor, Texas courts follow the majority rule that the [borrower] may defend ‘on any
ground which renders the assignment void.’” Reinagel v. Deutsche Bank Nat. Trust Co., 735 F.3d 220,
225 (5th Cir. 2013) (quoting Tri–Cities Const., Inc. v. Am. Nat. Ins. Col, 523 S.W.2d 426, 430 (Tex.
Civ. App. 1975)). Only void assignments may be challenged by borrowers because a void assignment
would not pass title, and the borrower has an interest “to insure [sic] himself that he will not have
to pay the same claim twice.” Holloway v. Wells Fargo Bank, N.A., 3:12-cv-2184-G-BH, 2013 WL
1187156, at *6 (N.D. Tex. Feb. 26, 2013) (quoting Tri-Cities Const., Inc., 523 S.W.2d at 430).
Examples of challenges that would merely render the assignment voidable would be that
someone without authorization signed a conveyance on behalf of an assignor or an argument over
enforcing specific contractual terms in the assignment agreement. Reinagel, 735 F.3d at 225; Deutsche
Bank Nat’l Trust Co. v. Burke, 117 F. Supp. 3d 953, 959 (S.D. Tex. 2015); Morlock, L.L.C. v. Bank
of N.Y., 448 S.W.3d 514, 517 (Tex. App.—Houston [1st Dist.] 2014, pet. denied). If an assignment
is merely voidable, only the assignor, not the obligor, may bring the cause of action to challenge the
assignment. Burke, 117 F. Supp. 3d at 959. An allegation of forgery, on the other hand, is an
argument that would render the assignment void. Vazquez v. Deutsche Bank Nat’l Trust Co., 441
S.W.3d 783, 787 (Tex. App.—Houston [1st Dist.] 2014, no pet.).
BANA argues that Plaintiffs lack standing to challenge the assignment because they are not
parties to it, and furthermore, their challenge is not one that would render the assignment void. See
Doc. 17, BANA’s Br. 9. Plaintiffs’ challenge—that Countrywide was never granted an interest in the
DOT, so it could not assign it to Fannie Mae—would not render the assignment void, argues BANA,
because it is a false assertion. See id. As discussed above, BANA attaches the Corrective Assignment
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of DOT, which indicates that listing Countrywide as the assignor on the 2011 Assignment of DOT
was a mistake and that the proper assignor was BANA. Doc. 18, BANA’s App. 28. Due to Plaintiffs’
failure to respond to BANA’s Motion, the Court can accept the evidence presented by BANA as
undisputed. See Eversley, 843 F.2d at 174 (5th Cir. 1991). Therefore, it is undisputed that BANA,
and not Countrywide, assigned the DOT to Fannie Mae in 2011. In light of this finding, the Court
will now consider Plaintiffs’ challenge to the assignment and determine if they have standing to
challenge it.
In their Complaint, Plaintiffs attempt to challenge the assignment by calling it “void” and
“fraudulent on its face” because the initial Assignment of DOT listed Countrywide as the assignor,
and Countrywide did not have the authority to assign the DOT to Fannie Mae. Doc. 1-1, Pls.’
Compl. ¶ 17. This kind of challenge would be one to render the assignment void because “Texas
courts routinely allow a homeowner to challenge the chain of assignments by which a party claims
the right to foreclose.” Miller v. Homecomings Financial, LLC, 881 F. Supp. 2d 825, 832 (S.D. Tex.
2012) (collecting cases). The problem, then, is not with Plaintiffs’ type of argument, but with the
substance.
As discussed above, it is already established as undisputed that BANA assigned the DOT to
Fannie Mae, so BANA resolved Plaintiffs’ concern. Plaintiffs’ challenge to Countrywide’s authority,
then, is unfounded. Based on the undisputed summary judgment evidence, Plaintiffs’ argument about
Countrywide would not render the assignment void. Furthermore, the Court cannot construe
Plaintiffs’ argument as also challenging the assignment from BANA to Fannie Mae because in their
Complaint, Plaintiffs state, “To be crystal clear, the only party that had any possible standing or

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authority to convey Plaintiffs’ loan to Defendant Fannie Mae was the original lender, Defendant
Bank of America, N.A.” Doc. 1-1, Pls.’ Compl. ¶ 20.
Plaintiffs also appear to challenge the authority of the Seterus employees acting on Fannie
Mae’s behalf because, Plaintiffs allege, there is no proof they had the lawful authority to execute
instruments on Fannie Mae’s behalf. Id. ¶¶ 21–26. This, however, does not challenge the assignment
itself because Plaintiffs’ arguments focus on the lack of evidence provided them during the loan
servicing process that would have demonstrated Seterus’s relationship with Fannie Mae and its’ had
lawful authority to act on behalf of Fannie Mae. See id. ¶ 24. Indeed, Plaintiffs’ arguments
challenging Seterus’s authority appear to rest on the assumption that Fannie Mae did have interest
in the DOT because written evidence of Fannie Mae granting Seterus authority would have
addressed Plaintiffs’ concerns. Therefore, the Court does not consider this argument as part of
Plaintiffs’ challenge to the assignment.
BANA’s undisputed evidence indicates that BANA assigned the DOT to Fannie Mae.
Plaintiffs do not put forth any other argument in their Complaint that could be construed as a
challenge to the validity of the assignment, and furthermore, they do not dispute BANA’s authority
to assign the DOT. The Court finds, then, that BANA met its burden of establishing that Plaintiffs
lack standing to challenge the assignment. As Plaintiffs did not file a Response, they have presented
no evidence that would create a genuine issue of material fact to the contrary. Therefore, the Court
finds it appropriate to GRANT BANA’s Motion as to the issue of standing. Furthermore, because
each of Plaintiffs’ claims against BANA rests on the theory that the assignment of the DOT was
void, Plaintiffs similarly lack standing to pursue each of the three claims made against BANA:(1)

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wrongful foreclosure;3 (2)common law fraud;4 and (3) filing a false lien or claim.5 Thus, the Court
GRANTS Defendant’s Motion in its entirety.
IV.
CONCLUSION
For the reasons stated above, Defendant BANA’s Motion for Summary Judgment (Doc. 17)
is GRANTED. Accordingly, Plaintiffs’ claims against Defendant BANA are DISMISSED with
prejudice.
SO ORDERED.
FEBRUARY 13, 2017

_________________________________
JANE J. BOYLE
UNITED STATES DISTRICT JUDGE

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Plaintiffs bring a wrongful foreclosure claim against BANA and argue that the foreclosure was wrongful
because Fannie Mae did not have an interest in the DOT because it was wrongfully assigned by Countrywide.
Doc. 1-1, Pls.’ Compl. ¶ 39. Because Plaintiffs’ argument is based on a challenge to the assignment, Plaintiffs
do not have standing to bring their wrongful foreclosure claim against BANA.
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Plaintiffs also bring a claim of common law fraud against BANA. Plaintiffs allege that Defendants’ actions
of recording an assignment that was executed by Countrywide to Fannie Mae, and then Fannie Mae acting
upon that assignment when Plaintiffs stopped making payments, constitutes a false representation of material
fact on which Plaintiffs relied to their detriment. Doc. 1-1, Pls.’ Compl. ¶ 46. Plaintiffs’ argument is based,
again, on the validity of the assignment, and therefore Plaintiffs do not have the standing to challenge it.
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Plaintiffs bring a claim of filing a false lien or claim against BANA in violation of § 12.002 of the Texas Civil
Practice and Remedies Code. Plaintiffs argue that Defendants violated the statute and filed a false lien or
claim when the Assignment of DOT was filed with Countrywide’s name because Countrywide had no
authority to assign the DOT. Doc. 1-1, Pls.’ Compl. ¶ 58. Similar to the other causes of action, Plaintiffs’
claim is based on their challenge to the assignment, and they do not have the standing to challenge it. In
BANA’s Motion, it alternatively argues that even if Plaintiffs did have standing, they could not bring a claim
under this statute because the statute does not cover deeds of trust, and Texas federal courts have held that
an assignment of mortgage does not create a lien or claim. Doc. 17, BANA’s Br. 15. Because the Court has
determined that Plaintiffs do not have standing to challenge the assignment, the Court does not reach
Defendants’ alternative argument.
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