Riley v. CitiFinancial Servicing LLC
Filing
41
MEMORANDUM OPINION AND ORDER: Defendant's 26 motion for summary judgment is GRANTED, all of Plaintiff's claims are DISMISSED with prejudice, and Defendant's counterclaim for foreclosure and attorneys' fees is GRANTED. (Ordered by Magistrate Judge Irma Carrillo Ramirez on 4/20/2018) (axm)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
ROSE RILEY,
Plaintiff,
§
§
§
§
§
§
§
v.
CITIMORTGAGE, INC.,
Defendant.
Civil Action No. 3:16-CV-2970-BH
Consent Case
MEMORANDUM OPINION AND ORDER
By consent of the parties and order of transfer dated March 29, 2018, this matter has been
transferred for the conduct of all further proceedings and the entry of judgment. Before the Court
is Defendant and Counter-Plaintiff CitiMortgage, Inc.’s Motion for Summary Judgment, filed
January 18, 2018 (doc. 26). Based on the relevant filings, evidence, and applicable law, the motion
for summary judgment is GRANTED.
I. BACKGROUND
This case involves the attempted foreclosure of real property located at 1422 Bradford Place,
Mesquite, Texas, 75149 (the Property).1 (doc. 1-4 at 2.)2 On December 8, 2004, Rose Riley
(Plaintiff) and Randy Riley (Randy) executed a Note and Security Agreement (Note) in favor of
CitiFinancial, Inc., for a loan in the principal amount of $90,260.18. (Id. at 10-12.) Plaintiff and
Randy contemporaneously executed a Deed of Trust Secured by Homestead (Deed of Trust) that
granted a security interest in the Property to CitiFinancial, Inc. to secure repayment under the Note.
1
The Property is also identified as:
LOT NINETEEN (19) IN BLOCK D OF CASTLERIDGE ADDITIONS, PHASE TWO, SECTION
TWO, AN ADDITION TO THE CITY OF MESQUITE, TEXAS, ACCORDING TO THE REVISED
MAP RECORDED IN VOL. 84105, PAGE 4757, OF THE MAP RECORDS OF DALLAS
COUNTY, TEXAS. (doc. 1-4 at 14.)
2
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.
(Id. at 14-17.) Under the terms of the Note and Deed of Trust, Plaintiff and Randy would be in
default if they failed to timely pay the full amount of each required monthly payment and subject
to acceleration of the loan and foreclosure proceedings on the Property. (Id. at 11-12, 15-17.) On
October 21, 2013, Randy executed a Quitclaim Deed conveying all of his rights, title, and interest
in and to the Property to Plaintiff in accordance with the terms of their divorce proceedings. (doc.
28-8 at 1-4.) On December 20, 2013, CitiFinancial, Inc. executed a Corporate Assignment of Deed
of Trust to CitiFinancial Servicing, LLC, a Delaware Limited Liability Company (CitiFinancial).
(doc. 28-3 at 1-3.)
Beginning November 15, 2014, Plaintiff failed to submit the required monthly payments
under the Note and Deed of Trust and was held in default by CitiFinancial. (See doc. 28-1 at 24-46.)
On April 30, 2015, CitiFinancial provided her with written notice of the default on the Note, an
opportunity to cure the default, and notice that it intended to accelerate the Note and declare all
outstanding principal and accrued by unpaid interest to be immediately due and payable if she failed
to cure the default. (Id. at 13-17.) On December 3, 2015, its foreclosure counsel provided Plaintiff
with a Notice of Acceleration noting its decision to accelerate all amounts due and owing under the
Note. (doc. 28-4 at 4-9.) On January 11, 2016, CitiFinancial filed an Application for Home Equity
Foreclosure Order under Rule 736 of the Texas Rules of Civil Procedure in state court, seeking an
order for foreclosure of its lien against the Property, which was granted on June 24, 2016. (doc. 28-6
at 1-3.)
On August 29, 2016, CitiFinancial’s foreclosure counsel provided Plaintiff with notice that
the foreclosure sale was scheduled for October 4, 2016. (doc. 28-4 at 11-30.) On September 12,
2016, Plaintiff’s counsel contacted CitiFinancial by telephone and orally requested that it provide
2
a reinstatement quote for the mortgage loan. (doc. 28-1 at 18-19.) CitiFinancial issued a letter the
following day, advising Plaintiff and her counsel that the amount needed to reinstate the Loan was
$15,745.89 (Reinstatement Request). (Id. at 20-23.) Approximately two weeks later, Plaintiff filed
this current suit against CitiFinancial, alleging that the requested Reinstatement Request waived
acceleration of the Note such that the current foreclosure on the Property is “invalid.” (doc. 1-4.) She
seeks a declaratory judgment that Defendant “does not have the power of sale pursuant to the Deed
of Trust,” a permanent injunction preventing Defendant from foreclosing, attorney’s fees, and
damages under the Texas Declaratory Judgment Act. (Id. at 4-6.) On October 24, 2016, CitiFinancial
removed this action to federal court asserting diversity jurisdiction under 28 U.S.C. § 1332. (doc.
1 at 1-2.) After removing this suit, CitiFinancial executed an Assignment of Deed of Trust Secured
by Homestead in favor of CitiMortgage, Inc. (Defendant), and it concurrently assigned the Note to
Defendant in an Allonge to the Note. (docs. 28-9 at 1-4, 28-10 at 1-2.) On December 8, 2017,
CitiFinancial was dismissed and substituted by Defendant as the proper party after it had been
assigned the Note and Deed of Trust. (docs. 19, 20, 21.) Defendant asserts a counterclaim for
foreclosure and attorney’s fees incurred in the defense and counterclaim in this suit. (doc. 5 at 6-8.)
On January 18, 2018, Defendant filed a motion for summary judgment on both Plaintiff’s
claim and its own counterclaim for foreclosure. (docs. 26, 27, 28.) With a timely filed response and
reply, the motion is ripe for determination. (docs. 30, 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.”
3
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
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. “If the [nonmoving
party’s] theory is . . . senseless [where] no reasonable jury could find in its favor, [then] summary
judgment should be granted.” Lottinger v. Shell Oil Co., 143 F. Supp. 2d 743, 751 (S.D. Tex. 2001)
(quoting Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451, 468-69 (1992)).
“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
4
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). There is also “no genuine issue as to any material
fact [if] a complete failure of proof concerning an essential element of the nonmoving party’s case
necessarily renders all other facts immaterial.” Celotex, 477 U.S. at 323. Summary judgment in favor
of the movant is proper 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. PLAINTIFF’S CLAIM
Defendant argues that it is entitled to summary judgment on Plaintiff’s claim for declaratory
judgment because she fails to provide any evidence that it abandoned acceleration under the loan
documents in foreclosing on the Property. (doc. 27 at 11-15.)
Plaintiff’s suit is brought solely under the Texas Declaratory Judgment Act (TDJA), and it
is premised upon her contention that Defendant “abandoned” its acceleration and waived foreclosure
by issuing a reinstatement quote. (See doc. 1-4.) Federal “courts cannot award relief pursuant to the
[TDJA] because declaratory judgment is procedural, not substantive, and federal courts apply their
own procedural rules.” Falk v. Wells Fargo Bank, No. 3:09-CV-678-B, 2011 WL 3702666, at *4
(N.D. Tex. Aug. 19, 2011) (citing Utica Lloyd’s v. Mitchell, 138 F.3d 208, 210 (5th Cir. 1988)
(internal quotation marks omitted). Because this action was removed from state court, “the action
may be construed as one brought under the federal Declaratory Judgment Act,” which allows a
3
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)).
5
federal court to declare the rights and legal relations of an interest party. Hurd v. BAC Home Loans
Servicing, LP, 880 F. Supp. 2d 747, 769 (N.D. Tex. 2012).
Under Texas law and Fifth Circuit precedent, an earlier acceleration of foreclosure on real
property is waived when the lender “put[s] the debtor on notice of its abandonment . . . by requesting
payment on less than the full amount of the loan.” Boren v. United States Nat’l Bank Ass’n, 807 F.3d
99, 105 (5th Cir. 2015). The abandonment of a prior acceleration must meet the traditional
requirements of waiver under Texas law, including: “(1) an existing right, benefit, or advantage held
by a party; (2) the party’s actual knowledge of its existence; and (3) the party’s actual intent to
relinquish the right, or intentional conduct inconsistent with the right.” Id. (quoting Thompson v.
Bank of America Nat’l Ass’n, 783 F.3d 1022, 1025 (5th Cir. 2015)); Ulico Cas. Co. v. Allied Pilots
Ass’n, 262 S.W.3d 773, 778 (Tex. 2008)). Abandonment and waiver is “a question of law when the
facts that are relevant to a party’s relinquishment of an existing right are undisputed.” Id. at 106
(citing G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 511 (Tex. 2015)). Because
the only question raised by Plaintiff’s petition is one of law, “summary judgment is appropriate” in
this case. Sheline v. Dun & Bradstreet Corp., 948 F.2d 174, 176 (5th Cir. 1991) (“[S]ummary
judgment is appropriate where the only issue before the court is a pure question of law.”).
To meet its summary judgment burden, Defendant points to the Note, Deed of Trust, the
Notice of Default, the Notice of Acceleration, and the state court order authorizing foreclosure under
Rule 736 of the Texas Rules of Civil Procedure to show that it properly foreclosed upon the
Property. (doc. 27 at 11-15.) It further points to the reinstatement quote contained in the
Reinstatement Request, which was sent after the notice of acceleration and states “[p]er your request
for a reinstatement quote on 9/12/2016, please find the enclosed reinstatement quote.” (doc. 29-6
6
at 2-5.) The Reinstatement Request further explains that it was “subject to certain conditions;” if
Plaintiff failed to pay the reinstatement amount, the mortgage would remain an accelerated loan, and
it could “continue with foreclosure proceedings.” (Id. at 4.) This language is not inconsistent with
the prior acceleration of the mortgage loan, and it does not evidence intent to waive or withdraw
either the acceleration or the right to foreclose. See Nasheed v. Ocwen Loan Servicing, LLC, No.
3:16-CV-1575-L, 2016 WL 4039165, at *2–3 (N.D. Tex. July 28, 2016) (finding that a mortgage
account statement that was sent after a notice of acceleration and included a reinstatement amount
was “insufficient as a matter of law to support a finding of waiver or abandonment under Texas law”
because the “express language” in the statement made it clear that the defendants “did not intend to
waive their acceleration rights”). Defendant has met its summary judgment burden to show a failure
of proof to substantiate the element of its “actual intent to relinquish the right, or intentional conduct
inconsistent with the right” that is required to show abandonment or waiver of acceleration.
The burden now shifts to Plaintiff to show a genuine issue of material fact for trial regarding
Defendant’s “abandonment” of its acceleration. She does not object to any of Defendant’s summary
judgment evidence, and she instead points solely to the Reinstatement Request to contend that this
“request for payment of less than the full obligation . . . was an unequivocal expression of the bank’s
intent to abandon or waive its initial acceleration” and that the “original maturity date has been
restored.” (doc. 29 at 3.) As support, she cites to several cases based upon the ruling in Leonard v.
Ocwen Loan Servicing, L.L.C., 616 F. App’x 677 (5th Cir. 2015), which held that a lender waives
its earlier acceleration when it “put[s] the debtor on notice of its abandonment . . . by requesting
payment on less than the full amount of the loan.” (doc. 29 at 2-3) (citing Cline v. Deutsche Bank
Nat’l Trust Co., No. 3:14-CV-1565-D, 2015 WL 4041791 (N.D. Tex. July 2, 2015); Boren v. US
7
Nat’l Bank Ass’n, 807 F.3d 99 (5th Cir. 2015); Meachum v. Bank of N.Y. Mellon Trust Co. N.A., 636
F. App’x 210 (5th Cir. 2016)). In Leonard, the creditor sent a notice of acceleration to the debtor on
March 27, 2009, and after the creditor was succeeded by a new servicer of the note, the new servicer
sent several monthly account statements and a second notice of acceleration on September 8, 2010.
See 616 F. App’x at 678. The Fifth Circuit held that, under these facts, the additional account
summaries requesting past due payments combined with the second notice of acceleration
constituted an abandonment of the first acceleration. Id. The cases relying on Leonard had similar
fact patterns where the creditor accelerated the note, but then it unilaterally sent a second notice of
acceleration or intent to accelerate as if the first acceleration had not occurred. See Boren, 807 F.3d
at 106 (holding that a second notice of default and acceleration “unequivocally manifested an intent
to abandon the previous acceleration”); Meachum, 636 F. App’x at *212-13 (holding that a second
notice of default and intent to accelerate “represented an abandonment of the [original]
acceleration”); Cline, 2015 WL 4041791, at *5 (finding that the defendant’s acceptance of three
payments on the mortgage note in less than the full accelerated amount combined with a second
notice of default and acceleration “put plaintiffs on notice that [the creditor] was no longer seeking
to collect the full balance of the Note and had abandoned the January 2009 acceleration”).
Unlike the creditors in that line of cases, the creditor here sent Plaintiff only one notice of
intent to accelerate, one notice of acceleration, and in response to a request from Plaintiff’s counsel,
a Reinstatement Request expressly stating that it had not waived acceleration and would continue
to foreclose unless the loan was reinstated. (See doc. 28-1 at 20-23.) This requested reinstatement
quote does not show that Defendant intentionally abandoned or acted inconsistently with its prior
acceleration of Plaintiff’s total obligation due under the Note and Deed of Trust. She cites no case
8
law holding that sending a reinstatement quote in response to a specific request from Plaintiff’s own
counsel can constitute abandonment of acceleration, and she fails to provide any evidence showing
that she met or agreed to the conditions of reinstatement. Plaintiff has failed to sustain her burden,
and Defendant is entitled to summary judgment. See Nasheed, 2016 WL 4039165, at *2-3 (finding
that the plaintiff’s abandonment argument failed as a matter of law based upon the “express
language” in a mortgage account statement sent subsequent to a notice of acceleration). Defendant
is entitled to dismissal of this declaratory judgment action with prejudice.4
IV. DEFENDANT’S COUNTERCLAIM
Defendant next moves for summary judgment on its counterclaim for foreclosure on the
Property and attorneys’ fees.
A.
Foreclosure
Defendant argues that it is entitled to an order that authorizes a foreclosure on the Property
under § 51.002 of the Texas Property Code and grants a judicial foreclosure sale consistent with 28
U.S.C. §§ 2001-20025 and Rule 309 of the Texas Rules of Civil Procedure.6 (doc. 27 at 15-19.)
4
Because Plaintiff’s request for a permanent injunction, attorney’s fees, and damages are based solely upon
the same theory of recovery, these requests are similarly dismissed.
5
28 U.S.C. §§ 2001-2002 details the procedural and notice requirements for a “sale of realty” under “any
order or decree of any court of the United States.”
6
Rule 309 states:
Judgments for the foreclosure of mortgages and other liens shall be that the plaintiff recover his debt,
damages and costs, with a foreclosure of the plaintiff's lien on the property subject thereto, and, except
in judgments against executors, administrators and guardians, that an order of sale shall issue to any
sheriff or any constable within the State of Texas, directing him to seize and sell the same as under
execution, in satisfaction of the judgment; and, if the property cannot be found, or if the proceeds of
such sale be insufficient to satisfy the judgment, then to take the money or any balance thereof
remaining unpaid, out of any other property of the defendant, as in case of ordinary executions. Tex.
R. Civ. P. 309
9
To show entitlement to an order authorizing foreclosure on a home equity loan in Texas,
Defendant must demonstrate that: (1) a debt exists; (2) the debt is secured by a lien created under
Article 16, Section 50(a)(6) of the Texas Constitution; (3) Plaintiff is in default under the Note and
Deed of Trust; and (4) Plaintiff has been properly served with notice of default and notice of
acceleration. See Christiana Trust v. Jacob, No. 7:15-CV-033-DAE, 2016 WL 4468274, at *2 (W.D.
Tex. Aug. 23, 2016) (citing Tex. Prop. Code § 51.002; Huston v. U.S. Bank Nat’l Ass’n, 988 F.
Supp. 2d 732, 740 (S.D. Tex. 2013), aff’d, 583 F. App’x 306 (5th Cir. 2014)). A foreclosure sale
may be instituted either by a judgment of the court establishing the debt and fixing the lien, or by
a valid exercise of a power contained in a deed of trust. Bonilla v. Roberson, 918 S.W.2d 17, 21
(Tex. App.–Corpus Christi 1996, no writ) (citation omitted).
Here, Defendant proffers the Note, Deed of Trust, the assignment, the payment history, the
notice of default, the notice of acceleration, and the amounts currently due under the loan as
summary judgment evidence. (See docs. 28-1, 28-2, 28-3, 28-4, 28-6.) These exhibits establish that
the Note and Deed of Trust constitute a valid agreement between the two parties for a debt secured
by a lien created in the Deed of Trust under Article 16, Section 50(a)(6) of the Texas Constitution,
and that Plaintiff’s failure to make monthly payments as required by these instruments would result
in a breach of the loan.7 (See doc. 28-1.) Plaintiff does not dispute that she failed to make required
monthly payments beginning November 15, 2014, she properly received a notice of default on April
30, 2015, and a notice of acceleration on December 3, 2015, and she failed to cure the default after
7
The summary judgment evidence also establishes that Defendant is a “mortgage servicer” under Texas
Property Code § 51.0001 that may administer a foreclosure sale of real property under Texas Property Code § 51.002.
Tex. Prop. Code § 51.0025, 51.0001(3), 51.0001(4)(a)-(c).
10
receiving these notices.8 (docs. 28-1 at 13-17, 28-4 at 4-9.) Defendant has also established that as
of January 18, 2018, the unpaid principal balance on the loan is $74,436.07, the accrued interest is
$11,331.28, the previously deferred interest is $13,803.00, and the escrow advances total
$39,730.28. (doc. 28-9 at 2-3.) The evidence further shows that additional interest continues to
accrue on the outstanding principal balance through and after January 31, 2018, at a rate of $10.19
a day for each day the loan remains unpaid. (Id. at 3.) Defendant has met its summary judgment
burden to show no genuine issue exists as to any material fact on its counterclaim for foreclosure.
The burden now shifts to Plaintiff to identify evidence in the record raising a genuine issue
of material fact that Defendant is not entitled to a foreclosure order on the Property. She does not
object to Defendant’s evidence, and she only reiterates her argument that Defendant has
“abandoned” its acceleration and waived foreclosure. (See doc. 29.) As discussed, the summary
judgment evidence does not show any issue of material fact that Defendant abandoned or waived
its acceleration or right to foreclose. Plaintiff has failed to meet her summary judgment burden to
show a genuine issue of material fact on at least one element of Defendant’s counterclaim for
foreclosure, and Defendant is accordingly entitled to judgment as a matter of law on its
counterclaim.
B.
Attorneys’ Fees
As a part of its foreclosure counterclaim, Defendant seeks recovery of its “reasonable and
necessary attorneys’ fees incurred in pursuit of its right to foreclose” in accordance with the Note
8
The Texas Property Code requires a mortgage servicer to serve a debtor in default with written notice by
certified mail stating that the note is in default and providing at least twenty days to cure before any notice of sale
can be given. See Tex. Prop. Code § 51.002(d). Service is complete when the notice is deposited in the United States
mail, postage prepaid and addressed to the debtor at the debtor’s last known address. Id. at § 51.002(e).
11
and Deed of Trust.9 (doc. 27 at 19-20.)
Texas law is applicable to the award of attorneys’ fees in diversity cases like this one. See
Mathis v. Exxon Corp., 302 F.3d 448, 461 (5th Cir. 2002). Under Texas law, attorneys’ fees may be
recovered pursuant to mortgage contracts. See Richardson v. Wells Fargo Bank, N.A., 740 F.3d
1035, 1040 (5th Cir. 2014) (analyzing Texas law, court determined that motions for attorneys’ fees
provided by mortgage contracts are permissible); see also Payne v. Wells Fargo Bank, N.A.,
3:12–CV–5219–M–BF, 2015 WL 1402321, at *6 (N.D. Tex. Mar. 26, 2015) (citing Dallas Cent.
Appraisal Dist. v. Seven Inv. Co., 835 S.W.2d 75, 77 (Tex. 1992)) (awarding attorneys’ fees
pursuant to deed of trust).
Here, the Deed of Trust and Note expressly permit the recovery of “all reasonable costs and
expenses of collection,” including “reasonable attorney’s fees assessed by a court” if Plaintiff
defaults on the Note and the “debt is referred for collection to an attorney.” (doc. 21-1 at 6.) Because
it is permitted in the relevant loan documents, Defendant is entitled to its reasonable attorneys’ fees
for pursuing its foreclosure counterclaim under the Note and Deed of Trust. See TFHSP, LLC Series
10147 v. U.S. Bank Nat’l Ass’n, No. 3:14-CV-2589-M-BN, 2016 WL 2856006, at *4 (N.D. Tex.
Apr. 18, 2016), adopted by 2016 WL 2853565 (N.D. Tex. May 13, 2016) (concluding that the
mortgage creditor was entitled to recover its reasonable attorneys’ fees when provided under the
Note and Deed of Trust).
9
Defendant alternatively seeks attorneys’ fees under § 38.001(8) of the Texas Civil Practices & Remedies Code,
which allows the recovery of reasonable attorneys’ fees from an individual or corporation “if the claim is for . . . an oral
or written contract.” It does not show or explain how this provision is applicable to this declaratory action, in which
neither party alleges a breach of contract. See U.S. Bank Nat’l Ass’n for Residential Asset Sec. Corp., Home Equity
Mortg. Asset-Backed Pass-Through Certificates, Series 2007-KS2 v. McCormick, No. 3:17-CV-1704-L, 2018 WL
1210555, at *3 (N.D. Tex. Mar. 8, 2018) (finding that the mortgage creditor could not recover attorneys’ fees under §
38.001 because it was “not applicable to this declaratory judgment action,” but it could recover under the loan documents
because they “provide[d] a sufficient contractual basis for awarding attorney’s fees”).
12
“This Court uses the ‘lodestar’ method to calculate attorney’s fees.” Id. (citation omitted)
(applying lodestar method to calculate reasonable attorneys’ fees under a mortgage contract). The
lodestar is calculated by multiplying the number of hours that an attorney reasonably spent on the
case by an appropriate hourly rate, which is the market rate in the community for this work. See
Smith & Fuller, P.A. v. Cooper Tire & Rubber Co., 685 F.3d 486, 490 (5th Cir. 2012). The parties
seeking reimbursement of attorneys’ fees bear the burden of establishing the number of hours
expended through the presentation of adequately recorded time records as evidence. See Watkins v.
Fordice, 7 F.3d 453, 457 (5th Cir. 1993). A court should use this time as a benchmark and then
exclude any time that is excessive, duplicative, unnecessary, or inadequately documented. See id.
The hours remaining are those reasonably expended. There is a strong presumption of the
reasonableness of the lodestar amount. See Perdue v. Kenny A., 559 U.S. 542, 552 (2010). Because
the lodestar is presumed to be reasonable, it should be modified only in exceptional cases. See
Watkins, 7 F.3d at 457.
Here, Defendant supports the requested fees with an affidavit from its supervising counsel,
explaining the total amount of time rendered in connection with seeking a foreclosure of the
Property and the total amount due for attorneys’ fees. (doc. 28-7.) It explains that two different
attorneys and one paralegal worked on this suit, and specifically that:
[Defendant’s counsel] charges a discounted hourly rate of $240.00 for Leslie
Johnson’s (Johnson’s) work in this case, a discounted hourly rate of $225.00 for
Garrett Martin’s (Martin’s) work in this case, and a discounted hourly rate of
$110.00 for Allison Jurecko’s (Jurecko’s) work in this case. Based on these records,
Leslie Johnson has devoted a total of 27.3 hours of work to this case for a value of
$6,552.00; Garrett Martin has devoted a total of 33.2 hours to this case for a value
of $7,897.50; and Allison Jurecko has devoted a total of 17 hours to this case for a
value of $1,870.00. I have allocated 30% of this time spent by Leslie Johnson and
Allison Jurecko on this matter to the foreclosure counterclaims asserted by
CitiMortgage against Plaintiff in this case. I have allocated 15% of this time spent
13
by Garrett Martin on this matter to the foreclosure counterclaims asserted by
CitiMortgage against Plaintiff in this case. None of the time which I have spent on
this case pertains to those claims. Therefore, out of the total fees billed and to-be
billed, the sum of $3,711.23 represents the total amount of . . . attorneys’ fees
incurred by CitiMortgage in connection with its counterclaims for foreclosure of its
lien against the Property securing the loan at issue.
(Id. at 2-3.) It further states that based upon the affiant’s knowledge and experience, these hourly
rates are reasonable and consistent with rates charged by comparable firms in Texas and by
Defendant’s counsel in similar matters. (Id.) Defendant also submitted the attorneys’ time sheets and
billings invoices to establish the number of hours that its counsel worked on the counterclaim. (Id.
at 4-27.)
The affidavit states that Martin worked 33.2 hours at a rate of $225.00 per hour for a total
bill of $7,897.50, (id.), but the actual total is $7,470.00.10 The attached time sheets also show that
Martin worked a total of 34.9 hours,11 while the affidavit states that he “devoted a total of 33.2 hours
to this case.” (Id. at 4-27.) When the number of hours from the time sheets (34.9 hours) is multiplied
by Martin’s “discounted hourly rate of $225.00,” the total amount of attorney’s fees for Martin is
$7,852.50. The amount determined by the time sheets, and not the amount incorrectly identified in
the affidavit, will be used to determine the amount of attorneys’ fees recoverable here.
In her summary judgment response, Plaintiff fails to address Defendant’s request for
attorneys’ fees, and she does not argue that the number of hours or average rate is unreasonable. (See
docs. 29-30.) Regardless of her failure to respond, it is apparent that the rates charged by
Defendant’s counsel are consistent with the prevailing rates in Dallas County and within the market
10
When 33.2 is multiplied by 225, the resulting amount is 7,470 and not 7,897.5.
11
The time sheets show Martin on separate occasions billed for 11.9 hours, 4.4 hours, 0.9 hours, 10.10
hours, 2 hours, 3.7 hours, and 1.9 hours on this suit. (doc. 28-7 at 6, 18, 19, 21, 23, 25, 27.) The total amount would
be 34.9 hours.
14
rate for attorneys handling this type of litigation in the Dallas area. See TFHSP, LLC Series 10147,
2016 WL 2856006, at *4; see also Vanliner Ins. Co. v. DerMargosian, No. 3:12–CV–5074–D, 2014
WL 1632181, at *2 (N.D. Tex. Apr. 24, 2014) (noting that a court is an expert on the reasonableness
of attorneys’ fees).
When the total amounts are reduced consistent with the percentages stated in the affidavit,
the appropriate lodestar is calculated as 8.19 hours for Johnson at $240.00 an hour ($1,965.60),
5.235 hours for Martin at $225.00 an hour ($1,177.88), and 5.1 hours for Jureko at $110.00 an hour
($561.00), for a total of $3,704.48. Because this is not an exceptional case or circumstance, this
lodestar amount is presumed to be reasonable and will not be modified. See Watkins, 7 F.3d at 457
(explaining that the lodestar should be modified only in exceptional cases); see also Milligan v.
CitiMortgage, Inc., No. 6:14-CV-00594, 2015 WL 11181560, at *2 (E.D. Tex. June 3, 2015)
(finding that $11,990.80 was a “reasonable and necessary [amount of] attorney fees incurred by [the
defendant] in connection with its counterclaim to foreclose”). Defendant is entitled to $3,704.48 for
reasonable attorneys’ fees as allowed under the Note and Deed of Trust.
V. CONCLUSION
Defendant’s motion for summary judgment is GRANTED, all of Plaintiff’s claims are
DISMISSED with prejudice, and Defendant’s counterclaim for foreclosure and attorneys’ fees is
GRANTED. By separate judgment, Defendant will be authorized to foreclose on its lien on the real
property located at 1422 Bradford Place, Mesquite, Texas, 75149 in accordance with the Note, Deed
of Trust, and § 51.002 of the Texas Property Code.
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SO ORDERED on this 20th day of April 2018.
___________________________________
IRMA CARRILLO RAMIREZ
UNITED STATES MAGISTRATE JUDGE
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