Dennis v. Ocwen Loan Servicing LLC

Filing 36

Memorandum Opinion and Order Granted 29 Motion for Summary Judgment filed by Ocwen Loan Servicing LLC. All of Plaintiff's claims areDISMISSED with prejudice. (Ordered by Magistrate Judge Irma Carrillo Ramirez on 10/18/2017) (ndt) Modified date on 10/18/2017 (ndt).

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
DEBORAH M. DENNIS,
Plaintiff,
v.
OCWEN LOAN SERVICING LLC,
Defendant.

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Civil Action No. 3:16-CV-836-BH
Consent

MEMORANDUM OPINION AND ORDER
By consent of the parties, this case was transferred for the conduct of all further proceedings
and entry of judgment by order of reassignment dated April 19, 2016 (doc. 9). Based on the relevant
filings, evidence, and applicable law, Defendants’ Motion for Summary Judgment, filed August 16,
2017 (doc. 29), is GRANTED.
I. BACKGROUND
This case involves the attempted foreclosure of real property located at 1150 Hemlock Drive,
Desoto, Texas 75115 (the Property). (doc. 1-1 at 44.)1 On December 12, 2003, Deborah M. Dennis
(Plaintiff) individually executed a Note for a loan in the principal amount of $53,600.00 to the order
of Homecoming Financial Network, Inc. (Homecoming) as lender. (doc. 31-1 at 9-12.) The Note
was endorsed to Bank of New York Mellon Trust Company (BONY), who is the current owner and
holder of the Note. (Id. at 12.) Plaintiff and her husband, W. T. Dennis, Jr., contemporaneously
executed a Deed of Trust that granted a security interest in the Property to Homecoming to secure
repayment under the Note. (Id. at 14-29.) Under the terms of the Note and Deed of Trust, Plaintiff
would be in default if she failed to timely pay the full amount of each required monthly payment and

1

Citations to the record refer to the CM/ECF system page number at the top of each page rather than the
page numbers at the bottom of each filing.

also subject to acceleration of the loan and foreclosure proceedings on the Property. (Id. at 10, 26.)
On December 18, 2015, Homecoming’s nominee, the Mortgage Electronic Registration Systems,
Inc. (MERS), executed a Corporate Assignment of Deed of Trust (Assignment) that assigned the
Deed of Trust to BONY. (Id. at 15-16, 31-32.) BONY uses Ocwen Loan Servicing, LLC
(Defendant) to service the mortgage on its behalf. (Id. at 36-41.)
Beginning August 1, 2011, Plaintiff failed to submit her required monthly payments and was
held in default by BONY. (See id. at 36.)2 On October 6, 2015, Defendant sent Plaintiff a Notice
of Default as required under the Note and Deed of Trust. (Id. at 36-47.) This notice explained that
Plaintiff was in default for failure to make required payments, and that the maturity date of the Note
and Deed of Trust would be accelerated if the default was not timely cured. (See id.) On December
11, 2015, Plaintiff sent a letter to Defendant disputing the amount of the debt due to BONY under
the mortgage documents. (Id. at 55.) On January 8, 2016, Defendant responded to Plaintiff’s letter
by validating the debt and including a copy of Defendant’s payment reconciliation. (Id. at 64-67.)
Three days later, Defendant sent a copy of the Note and the full payment history showing the
deficiency under the mortgage documents to Plaintiff. (Id. at 69-76.)
On February 2, 2016, BONY’s foreclosure vendor sent Plaintiff a Notice of Acceleration and
Maturity explaining that she had failed to cure the default, and the maturity date under the loan
documents had been accelerated as a result. (Id. at 80-82.) Also included was a Notice of Substitute
Trustee Sale that was scheduled to occur on March 1, 2016. (Id. at 82-83.) On February 18, 2016,
Plaintiff sent Defendant a letter proposing either a loan modification or a short sale of the property
in lieu of foreclosure proceedings. (Id. at 85-86.) Defendant responded by sending Plaintiff a loan
2
The Property was a part of the estate in Plaintiff’s voluntary Chapter 11 bankruptcy case, which was
terminated on March 2, 2015. See In Re. Dennis, No. 10-33891-hdh11 (Bankr. N.D. Tex. Mar. 2, 2015.)

2

modification application.

(Id. at 88-111.) On February 29, 2016, Defendant sent Plaintiff

correspondence informing her that she failed to submit a completed loan modification application
by the 7th business day prior to the foreclosure sale, and as a result, her modification request was
denied, and the foreclosure sale would continue as scheduled. (Id. at 116-119.)
On February 25, 2016, Plaintiff filed suit and an application for temporary restraining order
in the 44th District Court of Dallas County, Texas. (doc. 1-1 at 43-58.) Later that same day,
Plaintiff filed her first amended petition. The temporary restraining order was granted the following
day, and the foreclosure sale was canceled. (Id. at 2-3.) Defendant subsequently removed the action
to federal court, asserting federal question jurisdiction under 28 U.S.C. § 1331 on March 24, 2016.
(doc. 1.) Plaintiff’s first amended petition asserts claims under a breach of contract theory, the Fair
Debt Collection Practices Act (FDCPA), the Texas Property Code, the Texas Business & Commerce
Code, the Texas Finance Code, and the Dodd–Frank Wall Street Reform and Consumer Protection
Act (Dodd-Frank Act). (doc. 1-1 at 43-58.) She seeks damages, exemplary damages, attorney’s fees,
court costs, injunctive relief, and a declaratory judgment. (Id. at 54, 57.)
Defendant now moves for summary judgment. (docs. 29-31.)
II. SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate when the pleadings and evidence on file show that no
genuine issue exists as to any material fact and that the moving party is entitled to judgment as a
matter of law. Fed. R. Civ. P. 56(a). “[T]he substantive law will identify which facts are material.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine issue of material fact exists
“if the evidence is such that a reasonable jury could return a verdict for the non-moving party.” Id.
The movant makes a showing that there is no genuine issue of material fact by informing the court

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of the basis of its motion and by identifying the portions of the record that reveal there are no
genuine material fact issues. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The moving party
can also meet its summary judgment burden by “pointing out to the district court that there is an
absence of evidence to support the nonmoving party’s case.” Id. at 325 (internal quotation omitted).
Once the movant makes this showing, the non-movant must then direct the court’s attention
to evidence in the record sufficient to establish that there is a genuine issue of material fact for trial.
Id. at 324. To carry this burden, the non-movant “must do more than simply show that there is some
metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio
Corp., 475 U.S. 574, 586 (1986). The non-movant must show that the evidence is sufficient to
support a resolution of the factual issue in her favor. Anderson, 477 U.S. at 249. The nonmovant’s
burden cannot be satisfied by conclusory allegations, unsubstantiated assertions, or a mere scintilla
of evidence. Douglass v. United Servs. Auto. Ass’n, 65 F.3d 452, 459 (5th Cir. 1995), revised on
other grounds, 79 F.3d 1415 (5th Cir. 1995) (en banc).
“The parties may satisfy their respective burdens by ‘citing to particular parts of materials
in the record, including depositions, documents, electronically stored information, affidavits or
declarations, stipulations . . . admissions, interrogatory answers, or other materials.’” Rooters v.
State Farm Lloyds, 428 F. App’x 441, 445 (5th Cir. 2011) (citing Fed. R. Civ. P. 56(c)(1)). While
all of the evidence must be viewed in a light most favorable to the motion’s opponent, Anderson,
477 U.S. at 255 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59 (1970)), neither
conclusory allegations nor unsubstantiated assertions satisfy the non-movant’s summary judgment
burden, Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc); Topalian v.
Ehrman, 954 F.2d 1125, 1131 (5th Cir. 1992). Summary judgment in favor of the movant is proper

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if, after adequate time for discovery, the motion’s opponent fails to establish the existence of an
element essential to his case and as to which he will bear the burden of proof at trial. Celotex, 477
U.S. at 322-23.3
III. CLAIMS UNDER TEXAS STATUTES
Defendant first seeks summary judgment on Plaintiff’s claims for violations of Texas statutes
because they are all based upon the “show-me-the-note” theory that “fail[s] under well-established
Texas law.” (doc. 30 at 12-13.) It also argues that her request for declaratory judgment should be
denied because it is “derivative of her show-me-the-note theory.” (Id. at 12.)
A.

Texas Property Code and Texas Business & Commerce Code
Plaintiff’s first amended petition asserts a “Texas Property Code Violation” and a “Texas

Business & Commerce Code Violation” without identifying the particular provisions that Defendant
allegedly violated. (See doc. 1-1 at 51.) She argues that Defendant cannot foreclose on the Property
because it is not the “Holder in Due Course” or “Holder of the Note” as it failed to “prove the
legitimacy of the Note” and to “produce the Original Note with all allonges, transfers and
assignments affixed thereto.” (Id.)
Chapter 51 of the Texas Property Code governs the procedure for enforcing the “power of
sale conferred by a deed of trust or other contract lien.” Tex. Prop. Code § 51.002. Under the Code,
both “a mortgagee and [a] mortgage servicer may administer a deed of trust foreclosure without
production of the original note.” Crear v. JP Morgan Chase Bank, N.A., No. 10–10875, 2011 WL
1129574, at *1, n.1 (5th Cir. Mar. 28, 2011) (citing id. at §§ 51.0002, 51.0025). A “mortgagee” is

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Rule 56 imposes no obligation “to sift through the record in search of evidence to support a party’s
opposition to summary judgment.” Adams v. Travelers Indem. Co., 465 F.3d 156, 164 (5th Cir. 2006) (quoting
Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998)).

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“the grantee, beneficiary, owner, or holder of a security instrument”; “a book entry system”; or “if
the security interest has been assigned of record, the last person to whom the security interest has
been assigned of record.” Tex. Prop. Code § 51.0001(4)(A)-(C). A “mortgage servicer” is “the last
person to whom a mortgagor has been instructed by the current mortgagee to send payments for the
debt secured by a security instrument” and may be the mortgagee itself. Id. at § 51.0001(3). The
mortgagee need not produce the original note because its authority to foreclose is determined solely
by its relationship to the deed of trust. See Martins v. BAC Home Loans Servicing, L.P., 722 F.3d
249, 255 (5th Cir. 2013) (explaining that possession of the note is not a prerequisite to foreclosure
since a “deed of trust gives the lender as well as the beneficiary [of the deed of trust] the right to
invoke the power of sale, even though it would not be possible for both to hold the note”) (internal
quotations omitted).
“Texas courts have refused to conflate foreclosure with enforcement of a promissory note.”
Reardean v. CitiMortgage, Inc., No. A–11–CA–420–SS, 2011 WL 3268307, at *3 (W.D. Tex. July
25, 2011). Under Texas law, promissory notes and deeds of trust are distinct obligations that afford
lenders distinct remedies upon default, “the note against the borrower and the lien against the real
property.” Bierwirth v. BAC Home Loans Servicing, L.P., No. 03–11–00644–CV, 2012 WL
3793190, at *3 (Tex. App.–Austin Aug.30, 2012, no pet.). When the lender seeks a personal
judgment against the borrower, it “must typically demonstrate that it is the holder4 of the note by
producing the original wet-ink instrument.” Millet v. JP Morgan Chase, N.A., No.
SA–11–CV–1031–XR, 2012 WL 1029497, at *3 (W.D. Tex. Mar. 26, 2012). By contrast,

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The Texas Uniform Commercial Code (UCC) governs the procedure for establishing “holder” status. See
Tex. Bus. & Com. Code §§ 3.201, 3.203, and 3.204 (providing the requirements for the negotiation, transfer, and
endorsement of negotiable instruments).

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“[f]oreclosure is an independent action against the collateral” that “enforces the deed of trust, not
the underlying note.” Reardean, 2011 WL 3268307, at *3. Advocates of the “show-me-the-note”
theory “believe that only the holder of the original wet-ink signature note has the lawful power to
initiate a non-judicial foreclosure.” Wells v. BAC Home Loan Servicing, L.P., No. W–10–CA–00350,
2011 WL 2163987, at * 2 (W.D. Tex. Apr. 26, 2011) (internal quotations omitted). The Fifth Circuit
has “unequivocally rejected the ‘show-me-the-note theory.’” Van Duzer v. U.S. Bank Nat. Ass’n,
582 F. App’x 279, 282 (5th Cir. 2014) (citing Martins, 722 F.3d at 255).
Here, Defendant has provided a copy of the Note endorsed to BONY and a copy of the
Corporate Assignment of Deed of Trust executed by MERS that assigned the Deed of Trust to
BONY. (doc. 31-1 at 9-12, 15-16, 31-32.) It also provided a copy of its letter to Plaintiff dated
October 6, 2015, identifying itself as BONY’s loan servicer and noting the proper “payment
remittance information.” (Id. at 36-40.) This evidence shows that Defendant may properly foreclose
under the Texas Property Code and Texas Business & Commerce Code, so it has met its summary
judgment burden to show no genuine issue of material fact on these claims.
The burden now shifts to Plaintiff to show a genuine issue of fact as to her claims under the
Texas Property Code and Texas Business & Commerce Code. She responds that she “has not made
an argument or claim pleading the ‘show-me-the-note’ argument” as the basis for relief. (doc. 34 at
3.) She does not, however, identify any other basis for her claims or show how her allegations that
Defendant cannot foreclose because it failed to “produce the Original Note” do not implicate the
“show-me-the-note” theory. (Id.) She also does not point to any evidence and only alleges that she
“requested the history of the transfer and authorizing documents.” (Id.) Plaintiff has failed to meet
her summary judgment burden.

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B.

Texas Finance Code
Plaintiff’s first amended petition also asserts a claim under §§ 392.301-404 of the Texas

Finance Code, which is commonly identified as the Texas Debt Collection Practices Act (TDCPA).
(doc. 1-1 at 51-52.) It contends that Defendant’s attempted foreclosure was “fraudulent, deceptive,
and/or [involved] misleading representations” under the TDCPA because Defendant “provided no
evidence that they are in fact Holder in Due Course and Holder of the Note.” (Id. at 51-52.) It also
alleges that Defendant’s failure to provide evidence as to its “status as Holder in Due Course”
violated §§ 392.303, 392.304, & 392.301(8) of the TDCPA. See Tex. Fin. Code §§ 392.303(a) (“In
debt collection, a debt collector may not use unfair or unconscionable means . . .”), 392.304(a) (“[A]
debt collector may not use a fraudulent, deceptive, or misleading representation . . .”), 392.301(a)(8)
(“In debt collection, a debt collector may not use threats, coercion, or attempts to coerce that employ
. . . threat[s] to take an action prohibited by law.).
“The TDCPA prohibits debt collectors from using various forms of threatening, coercive,
harassing or abusive conduct to collect debts from consumers.” Merryman v. JP Morgan Chase &
Co., No. 3:12–CV–2156-M, 2012 WL 5409735, at *4 (N.D. Tex. Oct. 12, 2012). A claimant must
show: (1) the debt is a consumer debt; (2) the defendant is a debt collector, as defined under the
TDCPA; (3) the defendant committed a wrongful act in violation of the TDCPA; (4) the wrongful
act was committed against the plaintiff; and (5) the plaintiff was injured as a result of the defendant’s
wrongful act. Tex. Fin. Code §§ 392.001–392.404. The TDCPA defines a “debt collector,” in
relevant part, as “a person who directly or indirectly engages in debt collection.” Id. § 392.001(6).
“Debt collection” is defined as “an action, conduct, or practice in collecting, or in soliciting for
collection, consumer debts that are due or alleged to be due a creditor.” Id. § 392.001(5). This can

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include “actions taken in foreclosing real property.” See Sanghera v. Wells Fargo Bank, N.A., No.
3:10–CV–2414–B, 2012 WL 555155, at *7 (N.D. Tex. Feb. 21, 2012) (citation omitted).
As noted, Defendant provides evidence that shows it is the proper mortgage servicer under
the Deed of Trust and directly counters the claim that it cannot foreclose because it is not a “holder
in due course.” (docs. 30 at 13, 31-1 at 9-12, 15-16, 31-32, 36-40.) It shows that its attempted
foreclosure was proper and not based upon fraud, deception, threats, unfair means, or misleading
representations actionable under the TDCPA, so it has met its summary judgment burden.
The burden now shifts to Plaintiff to show a genuine issue of fact. Her summary judgment
response does not refute Defendant’s evidence; it makes new factual assertions to support her
TDCPA claim and asserts a new claim under the Texas Deceptive Trade Practices Act (DTPA).
(doc. 34 at 2-6.)5 It does not address the “holder in due course” argument in her first amended
petition; it bases Defendant’s alleged liability under the TDCPA on its “refus[al] to provide accurate
accountings and . . . [how it] proceeded under the threat of foreclosure while also misrepresenting
to Plaintiff that [she] could utilize the loan modification process [which] caused exorbitant collection
and attorney fees to be placed on the loan . . . without explanation of the fees.” (Id. at 4.) She also
asserts a new claim under the DTPA based upon the same factual allegations.6 (Id. at 5-6.)
As a general rule, “[a] claim which is not raised in the complaint, but, rather is raised only
in response to a motion for summary judgment is not properly before the court.” Cutrera v. Bd. of
5

Plaintiff initially filed this suit pro se, but counsel subsequently entered an appearance on her behalf and
filed a response to Defendant’s summary judgment motion. (docs. 33, 34.) He did not file or seek leave to file an
amended complaint after entering his appearance.
6

The TDCPA provides: “A violation of this chapter is a deceptive trade practice under [Tex. Bus. Com.
Code § 17.50(h)], and is actionable under that subchapter.” Tex. Fin. Code § 392.404(a). In turn, § 17.50(h) of the
DTPA grants a private right of action to a claimant seeking to recover under the TDCPA. Garcia v. Jenkins/Babb
LLP, No. 3:11–CV–3171–N–BH, 2013 WL 3789830, at *12 (N.D. Tex. July 22, 2013) (citation omitted); see also
Tex. Bus. & Com. Code § 17.50(h).

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Supervisors of La. State Univ., 429 F.3d 108, 113 (5th Cir. 2005). This is because a properly pleaded
complaint must give fair notice of what the claim is and the grounds upon which it is based.
DeFrancheschi v. BAC Home Loans Servicing, L.P., 477 F. App’x 200, 204 (5th Cir. 2012). Trial
courts “do not abuse their discretion when they disregard claims or theories of liability not present
in the complaint and raised first in a motion opposing summary judgment.” Id. Because Plaintiff
did not allege either the new theories of liability on her TDCPA claim or her new claim under the
DTPA in her first amended petition, the Court is not required to consider it.7 Defendant is entitled
to summary judgment on Plaintiff’s claims under the Texas Finance Code.
C.

Declaratory Judgment
Plaintiff also appears to seek declaratory relief under the Texas Declaratory Judgments Act,

codified in §§ 37.001–37.011 of the Texas Civil Practice & Remedies Code. (See doc. 1-1 at 54.)
“The Texas act is a procedural, rather than substantive, provision, and would generally not apply to
a removed action such as this one.” Brock v. Fed. Nat’l Mortg. Ass’n, 2012 WL 620550, at *5 (N.D.
Tex. Feb. 24, 2012) (citing Utica Lloyd’s of Tex. v. Mitchell, 138 F.3d 208, 210 (5th Cir. 1998)). In
light of the removal from state court, however, the action may be construed as one brought under
the federal Declaratory Judgment Act (DJA), 28 U.S.C. §§ 2201, 2202. See Bell v. Bank of America
Home Loan Servicing LP, 2012 WL 568755, at *8 (S.D. Tex. Feb. 21, 2012) (holding that “[w]hen
a declaratory judgment action is filed in state court and is subsequently removed to federal court,
it is converted to one brought under the federal Declaratory Judgment Act”).
The DJA provides that “[i]n a case of actual controversy within its jurisdiction, . . . any court
7

Even if Plaintiff’s first amended petition did include her new theories of liability under the TDCPA and
the new claim under the DTPA, she still fails to meet her summary burden to show a genuine issue of fact because
she points only to conclusory and unsubstantiated assertions on Defendant’s mortgage servicing that are insufficient
summary judgment evidence. See Little, 37 F.3d at 1075.

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of the United States, upon the filing of an appropriate pleading, may declare the rights and other
legal relations of any interested party seeking such declaration, whether or not further relief is or
could be sought.” 28 U.S.C. § 2201. The federal DJA “does not create a substantive cause of action”
and “is merely a vehicle that allows a party to obtain an early adjudication of an actual controversy
arising under other substantive law.” Metropcs Wireless, Inc. v. VirginMobile USA, L.P., 2009 WL
3075205, at *19 (N.D. Tex. Sept. 25, 2009) (citations and internal quotation marks omitted). The
Act is an authorization and not a command, and allows federal courts broad, but not unfettered,
discretion to grant or refuse declaratory judgment. Id.
Here, Plaintiff seeks a declaration that “Defendant must produce the one and only Original
Promissory Note signed by the Plaintiff . . . prior to proceeding with any foreclosure proceedings.”
(doc. 1-1 at 54.) Because this declaration is based on the “show-me-the-note” theory, her request for
declaratory judgment is denied. See Lombardi v. Bank of America, No. 3:13-CV-1464-O, 2014 WL
988541, at *22 (N.D. Tex. Mar. 13, 2014) (denying declaratory judgment when the requested
declaration was “based on [the plaintiff’s] invalid ‘split-the-note’ and ‘show-me-the-note’ theories”).
IV. CONTRACT CLAIMS
Defendant next moves for summary judgment on Plaintiff’s claims that it breached the Deed
of Trust, the loan modification application, and the Note and therefore waived its right to accelerate
and foreclose on the Property.8 (doc. 30 at 13-17.)
Under Texas law, the elements of a breach of contract claim are: “(1) the existence of a valid
contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the
8

The first amended petition titles this section as “Breach of Contract and Anticipatory Breach of Contract,”
but its factual allegations and arguments only implicate a breach of contract theory and Defendant’s “[l]oss of the
right to accelerate [and foreclose]” due to its breach. (doc. 1-1 at 49.) All of Plaintiff’s breach of contract claims are
addressed together.

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defendant; and (4) damages sustained by the Plaintiff as a result of the breach.” Smith Int’l., Inc. v.
Egle Grp., LLC, 490 F.3d 380, 387 (5th Cir. 2007) (citation omitted). “A breach occurs when a party
fails or refuses to do something he has promised to do.” Dorsett v. Cross, 106 S.W.3d 213, 217 (Tex.
App.–Houston [1st Dist.] 2003, pet. denied).
A.

Deed of Trust
Defendant argues that it is entitled to summary judgment on Plaintiff’s claim that it failed

to provide notice under the terms of the Deed of Trust and Tex. Prop. Code § 51.002 because its
evidence shows that it provided her with notice of default and right to cure. (doc. 30 at 16-17.)
The Deed of Trust states that the “Lender shall give notice to Borrower prior to acceleration
following Borrower’s breach of any covenant or agreement in this [Deed of Trust] . . . The notice
shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30
days from the date the notice is given to Borrower, by which default must be cured; and (d) that
failure to cure the default on or before the date specified in the notice will result in acceleration of
the sums secured by this [Deed of Trust] and sale of the Property.” (doc. 31-1 at 26.) Similarly,
Texas Property Code § 51.002 requires the mortgage servicer to provide the debtor with notice of
default and to give the debtor an opportunity to cure the default within a minimum of 20 days before
notice of sale can be given. See Tex. Prop. Code § 51.002(d).
Here, Defendant points to a Notice of Default that it sent to Plaintiff on October 6, 2015.
(doc. 31-1 at 36-47.) This Notice stated that she was in default for failing to make the required
payments, identified the total amount of the past due payments, explained that the past due amount
must be submitted on or before November 12, 2015, and stated that failure to make her account
current would result in acceleration and potential foreclosure on the Property. (Id. at 36-37.) The

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Notice also identified her right to reinstate the loan and provided contact information for financial
counseling services. (Id. at 40.) Defendant next points to the Notice of Acceleration of Maturity on
the mortgage that was sent to Plaintiff on February 2, 2016, nearly four months after the Notice of
Default had been sent. (Id. at 80-83.) This evidence demonstrates that it complied with the notice
requirements under both the Deed of Trust and Tex. Prop. Code § 51.002, so it has met its summary
judgment burden on this claim.
The burden now shifts to Plaintiff to identify evidence raising a genuine issue of material fact
regarding whether Defendant failed to provide her with the requisite notices upon default. Her
summary judgment response does not contest the evidence showing that she properly received notice
as required under the Deed of Trust and Tex. Prop. Code § 51.002. (doc. 34 at 3-6.) It instead
changes the basis for her contract claims and alleges that she “makes her breach of contracts claims
pursuant to the Texas Finance Code among other statutes.” (Id. at 3.) Plaintiff argues that Defendant
breached the relevant contracts because its “conduct in this matter constitutes unreasonable
collection practices” under the TDCPA and the DTPA. (Id. at 3.) Though her first amended petition
asserts separate underlying facts for her contract claims and her TDCPA claims, she now combines
all of these claims in her summary judgment response and bases them on facts that were not
previously identified. (See docs. 1-1 at 48-52, 34 at 3-6.) Because Plaintiff did not allege this new
theory of liability for breach of contract in her first amended petition, it is not properly before the
Court and will not be considered.9 See DeFrancheschi, 477 F. App’x at 204 (Trial courts “do not

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Even if her new “breach of contract claims pursuant to the Texas Finance Code” were considered,
Plaintiff still fails to meet her summary judgment burden because she does not identify a specific provision in any
contract that was allegedly breached, and instead makes only conclusory and unsubstantiated statements based upon
Defendant’s alleged violations of the TDCPA. See Innova Hospital San Antonio, L.P. v. Blue Cross and Blue Shield
of Georgia, Inc., 995 F. Supp. 2d 587, 602 (N.D. Tex. 2014) (explaining that “a plaintiff must identify a specific
provision of the contract that was allegedly breached” to avoid dismissal); see Motten v. Chase Home Finance, 831

13

abuse their discretion when they disregard claims or theories of liability not present in the complaint
and raised first in a motion opposing summary judgment.”); see also Cutrera, 429 F.3d at 113 (“A
claim which is not raised in the complaint, but, rather is raised only in response to a motion for
summary judgment is not properly before the court.”) Plaintiff has failed to meet her summary
judgment burden on this claim.
B.

Loan Modification Application
Defendant argues that it is entitled to summary judgment on Plaintiff’s claim for breach of

the loan modification application because she does not point to any evidence that a valid and written
loan modification contract existed as required under the Statute of Frauds. (doc. 30 at 14-15.)
Plaintiff’s first amended petition asserts that “Defendant offered and Plaintiff accepted a loan
modification review. Plaintiff spoke to Defendant . . . [and] told Plaintiff that she qualified for a loan
modification but that she had to send in financial information . . . [where] Plaintiff complied and
Defendant acknowledged receipt of application.” (doc. 1-1 at 48.) She argues that “Defendant’s
promises constituted a unilateral contract which was breached by Defendant when they posted
Plaintiff’s Property for foreclosure sale.” (Id.)
The existence of a valid contract is an “essential element[] in a breach of contract claim”
under Texas law. Bridgmon v. Array Sys. Corp., 325 F.3d 572, 577 (5th Cir. 2003) (citation
omitted). To show the existence of a contract, a plaintiff must establish, inter alia, an offer, “an
acceptance in strict compliance with the terms of the offer,” and a meeting of the minds. Southern
v. Goetting, 353 S.W.3d 295, 299 (Tex. App. –El Paso 2011, reh’g denied). Under Texas law, a

F. Supp. 2d 988, 1003 (S.D. Tex. 2011) (dismissing a breach of contract claim on a foreclosure action because
plaintiffs “fail[ed] to provide the loan documents that were breached and to indicate which provisions were
breached”).

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“loan agreement in which the amount involved in the loan agreement exceeds $50,000 in value is
not enforceable unless the agreement is in writing and signed by the party to be bound or by that
party’s authorized representative.” Tex. Bus. & Com. Code § 26.02(b). The term “loan agreement”
includes any agreement or promise where a financial institution “loans or delays repayment of or
agrees to loan or delay repayment of money, goods, or another thing of value or to otherwise extend
credit or make a financial accommodation.” Id. at § 26.02(a)(2); see Gordon v. JPMorgan Chase
Bank, N.A., 505 F. App’x 361 (5th Cir. 2013). This means that an agreement for a loan modification
under a mortgage agreement exceeding $50,000.00 is subject to the Texas Statute of Frauds and
must be in signed writing to be enforceable. See Tex. Bus. & Com. Code § 26.02(a), (b); see Milton
v. U.S. Bank Nat. Ass’n, 508 F. App’x 326, 328 (5th Cir. 2013) (collecting cases).
Defendant argues that there is no evidence of a signed writing memorializing the loan
modification and points to evidence of the Notice that it sent to Plaintiff on February 18, 2016,
which stated that her request for a loan modification could not be evaluated unless she submitted a
fully completed loan modification application and supporting documentation by February 23, 2016.
(doc. 31-1 at 88-111.) It also points to evidence of the Notice that it sent her on February 29, 2016,
which stated that she was “not eligible for a loan modification at this time” because it was “unable
to evaluate [her] application [since it] was not completed by the 7th business day prior to the
foreclosure sale and all due dates for the items requested have expired.” (Id. at 116-19.) Defendant
has met its burden to show a complete failure of proof on the existence of a contract in signed
writing on Plaintiff’s loan modification.
The burden now shifts to Plaintiff to identify evidence in the record raising a genuine issue
of material fact as to the existence of a valid contract on her loan modification. She does not point

15

to any evidence in her summary judgment response and instead asserts that her “breach of contract
. . . is a question of the adequacy of servicing the loan, and is not merely conditioned upon the
arguments set forth by Defendant with regard to the Statute of Frauds.” (doc. 34 at 4.) She does not
provide any additional argument or authority as to why the Statute of Frauds does not apply to her
alleged “unilateral contract” with Defendant for loan modification. Because she fails to point to
evidence on the existence of a valid and written contract for loan modification, she has failed to meet
her summary judgment burden to show evidence of a necessary element of her claim. See Gordon,
505 F. App’x at 361 (holding that loan modification efforts, without either a written contract or a
promise to sign a written contract, are insufficient to meet the requirements of the Statute of Frauds
and unenforceable).
C.

Note
Defendant argues that it is entitled to summary judgment on Plaintiff’s claim for breach of

the “implied duty of good faith and fair dealing” because that duty was not a part of the Note. (doc.
30 at 15-16.)
Plaintiff’s first amended petition alleges that Defendant owed her a duty of good faith and
fair dealing under the Note because this duty “is included in the performance of every contract.”
(doc. 1-1 at 48.) It claims that Defendant breached this duty when it “deliberately accelerated the
Note” after it “purposely delayed and misled Plaintiff [while servicing the mortgage] to a point of
foreclosure.” (Id. at 48-49.) Plaintiff further alleges in her summary judgment response that
Defendant breached the duty of good faith and fair dealing by its “failure to provide accurate
statements due to discrepancies in the insurance, failure to disclose lender paid mortgage insurance,
placing the property into foreclosure while purportedly reviewing a loan modification, manipulating

16

Plaintiff into filing for a short sale and providing a September 23, 2017 deadline to provide
documents yet filing for summary judgment, [and] inaccurate escrow accounting.” (doc. 34 at 4-5.)
Under Texas law, “there is no general duty of good faith and fair dealing in ordinary,
arms-length commercial transactions in Texas.” Marketic v. U.S. Bank National Association, 436
F. Supp. 2d 842, 855 (N.D. Tex. 2006). Such a duty can arise when it is “created by express
language in a contract,” however, or when “a special relationship of trust and confidence exists
between parties to [a] contract.” Lovell v. W. Nat’l Life Ins. Co., 754 S.W.2d 298, 302 (Tex.
App.–Amarillo 1988, writ denied). Though there are a limited number of circumstances where a
plaintiff has “assert[ed] a special relationship . . . that [justifies imposing a] duty of good faith and
fair dealing,” Texas courts have consistently held that the mortgagor-mortgagee relationship is not
a special relationship that generally gives rise to a fiduciary duty. Fed. Deposit Ins. Corp. v.
Coleman, 795 S.W.2d 706, 709-10 (Tex. 1990) (“The relationship of mortgagor and mortgagee
ordinarily does not involve a duty of good faith.”) (citing English v. Fischer, 660 S.W.2d 621, 622
(Tex. 1983)). The same is also true of a loan servicer and mortgagee. See Williams v. Fed. Nat.
Mortg. Ass’n, No. 2:11-CV-157-J, 2012 WL 443986 at *3 (N.D. Tex. Feb. 13, 2012) (citation
omitted). This is because “‘[g]enerally, the relationship between a borrower and a lender [or loan
servicer] is an arm’s length business relationship in which both parties are looking out for their own
interests.’” Id. (quoting McKinney Ltd. v. Credit Suisse First Boston Mortg. Capital, 192 S.W.3d
20, 36 (Tex. Civ. App.–Houston [14th Dist.] 2005, pet. denied)).
Here, Defendant argues that there is no evidence in the record that it owed Plaintiff a duty
of good faith and fair dealing because the loan was an arms-length business transaction that did not
include express language creating this duty. (doc. 30 at 15.) It points to a lack of evidence showing

17

the existence of a “special relationship” during its servicing of the mortgage. (Id. at 16.) Where, as
here, the non-movant bears the burden of proof, the movant’s burden may be discharged by pointing
out a complete lack of evidence to support the non-movant’s case. Celotex, 477 U.S. at 325.
Defendant has therefore met its summary judgment burden by showing a complete lack of evidence
establishing that it owed Plaintiff the duty of good faith and fair dealing.
The burden now shifts to Plaintiff to identify evidence in the record raising a genuine issue
of material fact as to the existence of Defendant’s duty of good faith and fair dealing to her. Plaintiff
submits her own affidavit describing her “special relationship” with Defendant. (doc. 34 at 88-90.)
It states that she “worked with [Defendant] after initially entering into an arrangement with GMAC
Finance and thereafter with [it] to acquire the Property years ago” and explains how she “developed
a trust for [Defendant] as a lender in that [they] have a long-standing relationship, and [she has]
placed [her] trust and confidence in [Defendant] as a bank, with [her] personal information.” (Id. at
89.) The affidavit states that Defendant “knows, or has reason to know that [she] placed [her] trust
and confidence in [Defendant] relying on them to counsel and inform [her] regarding the best way
to ensure that [she] can continue to enjoy the Property.” (Id.) Plaintiff argues that it shows the
existence of her “special relationship” with Defendant because they had multiple contracts, she
“placed her trust and confidence” in Defendant, and it has an “unequal bargaining position” in that
it can purchase lender-paid insurance and deny her loan modifications. (Id. at 7-9.)
Even when viewed in the most favorable light, Plaintiff’s evidence contains only conclusory
and vague assertions about her “trust and confidence” in Defendant with little factual support. See
Littlefield v. Forney Indep. Sch. Dist., 268 F.3d 275, 282 (5th Cir. 2001) (requiring a non-moving
party to “go beyond the pleadings and designate specific facts showing that there is a genuine issue

18

of material fact for trial.”). Plaintiff’s assertions that her reliance on Defendant was justified is also
unsubstantiated in light of the fact that she simultaneously states that she experienced many
problems and errors with Defendant’s servicing of the loan “for years.” (doc. 34 at 88-89.) Though
Plaintiff’s evidence does show Defendant in a more dominant bargaining position, this is typical of
“the relationships that develop daily and ordinarily in myriad similar banking situations,” and
Plaintiff’s evidence instead shows that she “was simply an established and valued customer.”10
Nationsbank v. Perry Bros. Inc., 68 F.3d 466 (5th Cir. 1995) (unpublished) (finding no “special
relationship” between a borrower and lender even though the borrower “depended upon [the lender]
for its critical financing requirements, and often shared its business-related confidence with [the
lender]”); see Sullivan v. Bank of America, N.A., No. 3:14-CV-3186-G, 2014 WL 6977093, at *5
(N.D. Tex. Dec. 10, 2014) (finding no special relationship between a mortgagor and mortgagee even
though there was an “imbalance in bargaining power” because the plaintiff “fail[ed] to substantiate
her conclusory statement[s]”). Plaintiff has failed to meet her summary judgment burden, and
Defendant is entitled to summary judgment on her contract claims.
V. FDCPA
Defendant next moves for summary judgment on Plaintiff’s claim under § 809 of the FDCPA
for its alleged failure to provide notice on a debt because the evidence shows that it fully complied
with this requirement. (doc. 30 at 17-19.)

10

Plaintiff’s summary judgment response relies upon and highlights the similarities in this case to a
decision finding a “special relationship” between a mortgagor and mortgagee. (doc. 34 at 7-8) (citing F.D.I.C. v.
Perry Bros., 854 F. Supp. 1248, 1259 (E.D. Tex. 1994)). That case was expressly reversed by the Fifth Circuit on
appeal, however, because “characterizing [that] particular relationship between [the mortgagor and mortgagee] as
“special,” such as to impose the duty of good faith and fair dealing, would deprive this narrow doctrine of Texas law
of any meaningful limitation and thus would invite precisely the abuse that prompted the Texas Supreme Court’s
earlier-quoted expression of concern.” Nationsbank, 68 F.3d at 466.

19

In order to state a FDCPA claim, a plaintiff must allege facts sufficient to show that “(1) [the
plaintiff has] been the object of collection activity arising from a consumer debt; (2) the defendant
is a debt collector defined by the FDCPA; and (3) the defendant has engaged in an act or omission
prohibited by the FDCPA.” Hunsinger v. SKO Brenner Am., Inc., No. 3:13-CV-988-D, 2013 WL
3949023, at *2 (N.D. Tex. Aug. 1, 2013). The FDCPA defines a debt collector as “any person . . .
in any business the principal purpose of which is the collection of any debts, or who regularly
collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due
another.” 15 U.S.C. § 1692a(6).
Under § 809 of the FDCPA, a debt collector must send a written notice to the debtor
containing the following information:
(1) the amount of the debt; (2) the name of the creditor to whom the debt is owed;
(3) a statement that unless the consumer, within thirty days after receipt of the notice,
disputes the validity of the debt, or any portion thereof, the debt will be assumed to
be valid by the debt collector; (4) a statement that if the consumer notifies the debt
collector in writing within the thirty-day period that the debt, or any portion thereof,
is disputed, the debt collector will obtain verification of the debt or a copy of a
judgment against the consumer and a copy of such verification or judgment will be
mailed to the consumer by the debt collector; and (5) a statement that, upon the
consumer’s written request within the thirty-day period, the debt collector will
provide the consumer with the name and address of the original creditor, if different
from the current creditor. 15 U.S.C. § 1692g.
To show compliance with the FDCPA, Defendant points to a Notice of Default that it mailed
to Plaintiff on October 6, 2015. (doc. 31-1 at 36-47.) It stated that Plaintiff was in default for failing
to make the required payments, included the total amount of the past due payments, identified the
creditor under the mortgage, and stated that failure to make her account current would result in
acceleration and potential foreclosure on the Property. (Id. at 36-37.) It also stated that unless
Plaintiff disputed the validity of the debt within thirty days after receipt of the notice, it would be

20

assumed to be valid by the debt collector, and that she would obtain verification of the debt and a
copy of the verification if she notified Defendant in writing within the thirty-day period. (Id. at 36.)
Defendant next points to the Notice it sent her on November 28, 2015, which again included all the
above information, as well as the updated amount of the unpaid debt under the mortgage documents.
(Id. at 50-51.) This evidence shows that Defendant complied with § 809 of the FDCPA by providing
Plaintiff with proper notice of the debt. It has met its summary judgment burden.
The burden now shifts to Plaintiff to show a genuine issue of material fact regarding whether
Defendant failed to provide proper notice under the FDCPA. Her summary judgment response does
not contest Defendant’s evidence that she received the two notices with the requisite information.
(doc. 34 at 3.) It also does not address her FDCPA claim or attempt to point to any evidence
showing a fact issue on this claim, so she fails to meet her summary judgment burden. Defendant
is entitled to summary judgment on Plaintiff’s FDCPA claim.
VI. DODD-FRANK ACT
Defendant seeks summary judgment on Plaintiff’s claims under the Dodd-Frank Act11 for
“dual tracking,” failing to provide a decision on her loan modification application, and failing to
cancel a “force-placed hazard insurance policy” on the Property. (doc. 30 at 20-23.)
A.

Loan Modification Application
Defendant first argues that it is entitled to summary judgment on Plaintiff’s claims of “dual

tracking” and its alleged failure to issue a decision on her loan modification application because she
failed to submit a completed loan modification application within the required statutory time frame.
(doc. 30 at 19-20.)

11

Pub. L. No. 111–203, 124 Stat. 1376 (2010).

21

Dual tracking is the term for situations in which a lender actively pursues foreclosure while
simultaneously considering the borrower for loss mitigation options. See 12 C.F.R. § 1024.41.
Section 1024.41(g) prohibits dual tracking, and § 1024.41(a) expressly provides for a private right
of action if the lender violates the provision. Id.; see also Wentzell v. JPMorgan Chase Bank, Nat.
Ass’n, 627 F. App’x 314, 318 n.4 (5th Cir. 2015). Section 1024.41(g) applies only when “a servicer
receives a complete loss mitigation application more than 37 days before a foreclosure sale.” 12
C.F.R. § 1024.41(c).
Here, Defendant points to the Notice of Substitute Trustee Sale it sent to Plaintiff that
identified the date of foreclosure sale as March 1, 2016. (doc. 31-1 at 79-83.) It also points to the
Notice that it sent her on February 18, 2016, which explained that her loan modification application
was incomplete and missing required documents, and to a Notice that it sent her on February 29,
2016, which stated that her application for loan modification was denied because she had failed to
submit a completed application by the due date. (Id. at 88-117.) Its summary judgment evidence
shows that it formally denied her loan modification application, and that the “dual-tracking”
provisions did not apply because Plaintiff failed to submit a complete loss mitigation application
more than 37 days before a foreclosure sale. Defendant has met its summary judgment burden.
The burden now shifts to Plaintiff to show a genuine issue of material fact regarding whether
she submitted a complete application to Defendant within the statutory time frame. She does not
even allege that she submitted a complete application to Defendant, only that it “refused to allow
[her] to avail herself of the loan modification process.” (doc. 34 at 6.) She has pointed to no evidence
that Defendant received a complete loss mitigation application more than 37 days before any
foreclosure sale. See Gresham v. Wells Fargo Bank, N.A., 642 F. App’x 355, 358-59 (5th Cir. 2016)

22

(affirming dismissal of a “dual tracking” claim where the plaintiff failed to allege any factual content
that he submitted a complete loss mitigation application more than 37 days before the foreclosure
sale). Plaintiff has failed to meet her summary judgment burden on this claim.
B.

Force-Placed Insurance
Defendant also argues that it is entitled to summary judgment on Plaintiff’s claim that it

improperly obtained a force-placed hazard insurance policy on the Property because there is no
evidence that she provided proof of her own hazard insurance policy.12 (doc. 30 at 21-23.)
The term “force-placed insurance” is defined as “hazard insurance coverage obtained by a
servicer of a federally related mortgage when the borrower has failed to maintain or renew hazard
insurance on such property as required of the borrower under the terms of the mortgage.” 12 U.S.C.
§ 2605(k)(2). A “servicer of a federally related mortgage shall not . . . obtain force-placed hazard
insurance unless there is a reasonable basis to believe the borrower has failed to comply with the
loan contract’s requirements to maintain property insurance” and “[a]ll charges, apart from charges
subject to State regulation as the business of insurance, related to force-placed insurance imposed
on the borrower by or through the servicer shall be bona fide and reasonable.” Id. at § 2605(k)(1)(m). If, after obtaining force-placed hazard insurance, the loan servicer receives “confirmation of
a borrower’s existing insurance coverage,” then the servicer must terminate the force-placed
insurance policy within 15 days and “refund to the consumer all force-placed insurance premiums
paid by the borrower during any period during which the borrower’s insurance coverage and the
force-placed insurance coverage were each in effect.” 12 U.S.C. § 2605(l)(3).

12

The relevant statutes on the requirements for servicing “force-placed” insurance policies are found in the
Real Estate Settlement Procedures Act (RESPA). See 12 U.S.C. § 2605.

23

Here, Defendant points to Plaintiff’s first amended petition and the record to show a lack of
factual assertions and evidence that she provided it notice of an existing hazard insurance policy,
or that it failed to return any insurance premiums after receiving notice. (doc. 30 at 22-23.) Because
Defendant has shown a complete lack of evidence as to an essential element of Plaintiff’s claim for
failure to remove lender-placed hazard insurance, it has met its summary judgment burden.
The burden now shifts to Plaintiff to show evidence of a genuine issue of fact as to whether
she provided sufficient notice to Defendant under 12 U.S.C. § 2605(l). Her summary judgment
response claims that she “always maintained insurance” on the Property and includes a copy of the
insurance policy for the 2016-2017 term. (doc. 34 at 4-5, 18-87.) She does not respond to or contest
Defendant’s assertion that she never provided notice of an existing personal hazard insurance policy
on the Property. She also fails to identify the specific period during which her insurance coverage
and the force-placed insurance coverage were both in effect. She therefore fails to meet her
summary judgment burden on this claim. See Vela v. City of Houston, 276 F.3d 659, 666 (5th Cir.
2001) (“[I]f the non-movant fails to present sufficient facts to support an essential element of his
claim, summary judgment is appropriate”). Defendant is therefore entitled to summary judgment on
Plaintiff’s claims under the Dodd-Frank Act.13
VII. CONCLUSION
Defendant’s motion for summary judgment is GRANTED, and all of Plaintiff’s claims are
DISMISSED with prejudice.

13

Because none of her claims can withstand summary judgment, Plaintiff’s request for injunctive relief is
similarly denied. See Jones v. Bank of New York Mellon, No. H–13–2414, 2015 WL 300495, at *12 (N.D. Tex. Jan.
22, 2015) (finding claim for injunctive relief should be denied because the plaintiff’s underlying claims were
dismissed); see also Nelson v. Wells Fargo Home Mortg., No. 3:10–CV–1771, 2012 WL 6928579, at *6 (N.D. Tex.
Nov. 5, 2012), adopted by 2013 WL 271537 (N.D. Tex. Jan. 22, 2013) (finding request for injunctive relief fails as a
matter of law where the plaintiff failed to demonstrate any well-founded causes of action against the defendant).

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SO ORDERED on this 17th day of October 2017.

___________________________________
IRMA CARRILLO RAMIREZ
UNITED STATES MAGISTRATE JUDGE

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