US Bank National Association v. Richardson et al

Filing 53

Memorandum Opinion and Order Grants 34 Motion for Summary Judgment filed by US Bank National Association. Plaintiff shall so notify the court by March 22, 2019 whether it wishes to proceed with the claim. (Ordered by Judge Sam A Lindsay on 3/11/2019) (svc)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
U.S. BANK NATIONAL ASSOCIATION,
AS TRUSTEE FOR THE REGISTERED
HOLDERS OF AEGIS ASSET BACKED
SECURITIES TRUST MORTGAGE
PASS-THROUGH CERTIFICATES,
SERIES 2005-4,
Plaintiff,
v.
JOHN H. RICHARDSON AND
LINDA RICHARDSON,
Defendants.

§
§
§
§
§
§
§
§
§
§
§
§
§
§
§

Civil Action No. 3:17-CV-2271-L

Memorandum Opinion and Order
Before the court is the Motion for Summary Judgment (Doc. 34), filed August 1, 2018, by
Plaintiff U.S. Bank National Association, as Trustee for the Registered Holders of AEGIS Asset
Backed Securities Trust Mortgage Pass-Through Certificates, Series 2005-4 (“Plaintiff” or “U.S.
Bank”). Plaintiff seeks a summary judgment in its favor, authorizing it to foreclose on Defendant
John H. Richardson’s and Linda Richardson’s (“Defendants”) property. After considering the
motion, response, reply, competent summary judgment evidence, and applicable law, the court
grants Plaintiff’s Motion for Summary Judgment (Doc. 34).
I.

Factual and Procedural Background
This lawsuit arises out of U.S. Bank’s repeated efforts to foreclose on Defendants’ property

located at 7007 Spanky Branch Court, Dallas, Texas 75248 (the “Property”). On June 23, 2005,

Memorandum Opinion and Order – Page 1

Defendants executed a Texas Home Equity Note (the “Note”) for $1,280,000 at a 6.950% yearly
interest rate payable to Aegis Funding Corporation (“Aegis”). Concurrently with the Note,
Defendants executed a Texas Home Equity Security Instrument (the “Security Instrument” and
together with the Note, the “Loan Agreement”), conveying an interest in the Property to secure
payment of the Note. U.S. Bank maintains that it is the current owner and holder of the Note and
beneficiary of the Security Instrument. Ocwen Loan Servicing, LLC (“Ocwen”) services the Loan
Agreement for Plaintiff. The Loan Agreement’s terms require Defendants to pay the Note’s principal
and interest, as well as any fees and charges, when due. The Loan Agreement also provides that, if
Defendants fail to make payments on the Note as they become due, or fail to comply with any
condition of the Security Instrument, the lender may sell the Property to enforce the Security
Instrument.
Plaintiff contends that Defendants failed to make payments on the Note and to comply with
all of the Security Instrument’s conditions. Plaintiff further maintains that it sent notice of default
to Defendants as required by Texas Property Code § 51.002(d), but Defendants failed to cure the
default. Plaintiff contends that, because Defendants did not cure the default, Plaintiff notified
Defendants that the Note’s maturity date had been accelerated, making all unpaid principal and
accrued interest due and payable. Plaintiff asserts that it filed this action to avoid Defendants’
pattern of delay and litigation tactics that have prevented Plaintiff from exercising its right to
foreclose on the property since March 20, 2013.
On August 14, 2018, the court granted Plaintiff’s motion to dismiss under Federal Rule of
Civil Procedure 12(b)(6) and dismissed with prejudice all counterclaims asserted by Defendants and
overruled Defendants’ related objections. Plaintiff moved for summary judgment on its foreclosure

Memorandum Opinion and Order – Page 2

claim on August 1, 2018. Before briefing on the summary judgment motion was complete,
Defendants filed an amended pleading and Motion to Add Indispensable Parties on August 31, 2019,
which the court denied as untimely and for failure to establish good cause on March 11, 2019. The
court also noted that this pleading was filed in violation of the court’s August 14, 2019 order, which
stated that Defendants would not be allowed to amend their pleadings because they had not sought
leave to amend their pleadings and, in any event, doing so would have been futile.
In its Motion for Summary Judgment (“Motion”), Plaintiff contends that it is entitled to
summary judgment on its judicial foreclosure claim and requests that the court enter an order
allowing it to foreclose on the Property. Thereafter, Defendants filed a response to the Motion to
which Plaintiff replied. While Plaintiff asserts two claims in its Complaint—one for judicial
foreclosure, which the court construes as one for declaratory judgment, and one for equitable
subrogation—it has only moved for summary judgment on its judicial foreclosure claim.
Accordingly, the court does not address Plaintiff’s equitable subrogation claim.
II.

Motion for Summary Judgment Standard
Summary judgment shall be granted when the record shows that there is no genuine dispute

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); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986); Ragas v. Tennessee Gas
Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998). A dispute regarding a material fact is “genuine”
if the evidence is such that a reasonable jury could return a verdict in favor of the nonmoving party.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When ruling on a motion for summary
judgment, the court is required to view all facts and inferences in the light most favorable to the
nonmoving party and resolve all disputed facts in favor of the nonmoving party. Boudreaux v. Swift

Memorandum Opinion and Order – Page 3

Transp. Co., Inc., 402 F.3d 536, 540 (5th Cir. 2005). Further, a court “may not make credibility
determinations or weigh the evidence” in ruling on a motion for summary judgment. Reeves v.
Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000); Anderson, 477 U.S. at 254-55.
Once the moving party has made an initial showing that there is no evidence to support the
nonmoving party’s case, the party opposing the motion must come forward with competent summary
judgment evidence of the existence of a genuine dispute of material fact. Matsushita Elec. Indus.
Co. v. Zenith Radio, 475 U.S. 574, 586 (1986). On the other hand, “if the movant bears the burden
of proof on an issue, either because he is the plaintiff or as a defendant he is asserting an affirmative
defense, he must establish beyond peradventure all of the essential elements of the claim or defense
to warrant judgment in his favor.” Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986)
(emphasis in original). “[When] the record taken as a whole could not lead a rational trier of fact
to find for the nonmoving party, there is no ‘genuine [dispute] for trial.’” Matsushita, 475 U.S. at
587. (citation omitted). Mere conclusory allegations are not competent summary judgment
evidence, and thus are insufficient to defeat a motion for summary judgment. Eason v. Thaler, 73
F.3d 1322, 1325 (5th Cir. 1996).

Unsubstantiated assertions, improbable inferences, and

unsupported speculation are not competent summary judgment evidence. See Forsyth v. Barr, 19
F.3d 1527, 1533 (5th Cir. 1994).
The party opposing summary judgment is required to identify specific evidence in the record
and to articulate the precise manner in which that evidence supports his or her claim. Ragas, 136
F.3d at 458. Rule 56 does not impose a duty on the court to “sift through the record in search of
evidence” to support the nonmovant’s opposition to the motion for summary judgment. Id.; see also
Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915-16 & n.7 (5th Cir. 1992). “Only disputes over

Memorandum Opinion and Order – Page 4

facts that might affect the outcome of the suit under the governing laws will properly preclude the
entry of summary judgment.” Anderson, 477 U.S. at 248. Disputed fact issues that are “irrelevant
and unnecessary” will not be considered by a court in ruling on a summary judgment motion. Id.
If the nonmoving party fails to make a showing sufficient to establish the existence of an element
essential to its case and on which it will bear the burden of proof at trial, summary judgment must
be granted. Celotex, 477 U.S. at 322-23.
III.

Analysis
Plaintiff is entitled to summary judgment on its judicial foreclosure claim because no genuine

dispute of material fact exists whether Defendants defaulted on the Loan Agreement and whether
Plaintiff completed all preconditions necessary to obtain an order permitting foreclosure. A lender
seeking to foreclose on property in Texas under a security instrument with a power of sale must
establish that “(1) a debt exists; (2) the debt is secured by a lien created under Art. 16, § 50(a)(6) of
the Texas Constitution; (3) [the borrowers] are in default under the note and security instrument; and
(4) [the borrowers] received notice of default and acceleration.” Huston v. U.S. Bank Nat’l Ass’n,
988 F. Supp. 2d 732, 740 (S.D. Tex. 2013) (citing Tex. Prop. Code 51.002.); see also Tex. Const.
art. XVI, § 50(a)(6)(D) (“The homestead of a family, or of a single adult person, shall be, and is
hereby protected from forced sale, for the payment of all debts except for an extension of credit that
is secured by a lien that may be foreclosed upon only by a court order.”); Tex. Prop. Code §
51.002(d) (“[T]he mortgage servicer of the debt shall serve a debtor in default under a deed of trust
or other contract lien on real property used as the debtor’s residence with written notice by certified
mail stating that the debtor is in default . . . and giving the debtor at least 20 days to cure the default
before notice of sale can be given.”).

Memorandum Opinion and Order – Page 5

The summary judgment evidence establishes that, pursuant to a valid agreement between the
parties, a debt exists secured by a proper lien; and that Defendants are in default or breach of the
agreement. Forming a valid contract under Texas law requires: “(1) an offer, (2) acceptance in strict
compliance with the terms of the offer, (3) a meeting of the minds, (4) each party’s consent to the
terms, and (5) execution and delivery of the contract with the intent that it be mutual and binding.”
Sharifi v. Steen Auto., LLC, 370 S.W.3d 126, 140-41 (Tex. App.—Dallas 2012, no pet.) (citation
omitted) (citing Cessna Aircraft Co. v. Aircraft Network, L.L.C., 213 S.W.3d 455, 465 (Tex.
App.—Dallas 2006, pet. denied)). Once a valid contract is formed, to assert a claim for its breach
under Texas law, a plaintiff must establish “‘(1) the existence of a valid contract; (2) performance
or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4)
damages sustained by the plaintiff as a result of the breach.’” Mullins v. TestAmerica, Inc., 564 F.3d
386, 418 (5th Cir. 2009) (quoting Aguiar v. Segal, 167 S.W.3d 443, 450 (Tex. App.—Houston [14th
Dist.] 2005, pet. denied)).
On June 23, 2005, Defendants executed a Texas Home Equity Note payable to Aegis for
$1,280,0000 plus interest, in exchange for the extension of credit they received. Pl.’s App. 3, 7-11
(Doc. 36-1). Concurrently, Defendants executed a Texas Home Equity Security Instrument creating
a lien on the Property to secure payment of the Note, and, in doing so, Defendants agreed to a release
the lender’s obligations under Texas Constitution, article XVI, § 50(a)(6). Id. at 3, 13-34.
Defendants’ signatures on the Note indicate that they executed that contract and consented to its
terms. Id. at 25. On December 11, 2012, Mortgage Electronic Registration Systems, Inc. (“MERS”),
the Deed of Trust’s original beneficiary, assigned the Deed of Trust to U.S. Bank, the current owner
and holder of the Note, as well as the beneficiary of the Deed of Trust. Id. at 3-4, 36. Defendants

Memorandum Opinion and Order – Page 6

do not offer any evidence that rebuts the validity of the Loan Agreement. Accordingly, the court
determines that a valid contract exists between the parties establishing Defendants’ debt, which is
secured by a lien under Texas Constitution, article XVI, § 50(a)(6).
Under the Note’s terms, Defendants agreed to make monthly payments, but they have not
done so since August 1, 2012. Id. at 4, 8, 38-40. Because Defendants are delinquent in their
payments, they are in default per the Note’s terms. Id. at 8-9. Defendants’ breach has caused U.S.
Bank monetary injury amounting to more than five years of missed payments. See id. at 4.
Defendants do not offer any evidence controverting Plaintiff’s evidence or their default on the Loan
Agreement. Thus, it is undisputed that Defendants are in default under the Note and Security
Instrument.
Finally, to be entitled to judicial foreclosure, Plaintiff must have given Defendants notice of
default, with at least 20 days to cure their default, and notice of acceleration. The summary judgment
evidence establishes that Plaintiff completed these requirements. On September 5, 2012, U.S. Bank
through Ocwen, its mortgage servicer, sent written notice of default via certified mail to Defendants
at the address of the Property. Pl.’s App. 4, 42-44. In that notice, Ocwen informed Defendants that
they were in default and required to pay $32,403.62 within 30 days to become current on the loan.
Id. The notice further informed Defendants that, if they failed to timely cure their default, their debt
would be accelerated. Id. Defendants did not cure their default, and on September 19, 2015,
Plaintiff, through its counsel, sent Defendants written notice of acceleration by certified mail,
indicating that their debt had been accelerated, and that the Note’s full balance was due. Id. at 4,
47-51. As of July 20, 2018, Defendants had not made any payments on the loan and owed
$1,685,888.86. Id. at 4, 53.

Memorandum Opinion and Order – Page 7

Defendants do not offer evidence that rebuts Plaintiff’s evidence that it provided notices of
default and acceleration. They, instead, assert that Plaintiff is not entitled to summary judgment
because it failed to send a new notice of default and acceleration with the filing of this lawsuit in
2017. Specifically, Defendants object to Plaintiff’s inclusion of Exhibits A-5, the notice of default
dated September 5, 2012, and A-6, the notice of acceleration dated September 19, 2015, in its
appendix. Id.; Pl.’s App. 41, 45. Texas law, however, only requires the foreclosing party to provide
the defaulting party notice of default (with 20 days to cure) and notice of acceleration prior to
judicial foreclosure one time. Huston, 988 F. Supp. 2d at 740. There is no requirement that the
foreclosing party reissue notice before filing a lawsuit to secure a judgment of foreclosure or every
time it files suit based on the same defaulting event. Based on the summary judgment evidence, the
court determines that Plaintiff provided Defendants with proper notice of default and acceleration.
Defendants’ other arguments are similarly without merit. Defendants first contend that
foreclosure is improper because Ocwen, the mortgage servicer, is not a party to the lawsuit. As
evidence that “Ocwen should be the plaintiff on behalf of USBank,” Defendants attach a “Limited
Power of Attorney,” whereby U.S. Bank grants Ocwen the power to conduct certain legal actions on
its behalf in connection with Ocwen’s servicing of loans held by U.S. Bank. Defs.’ Br. 2-3; Defs.’
Ex. 1 (Doc. 43-1).
The terms of the Limited Power of Attorney, however, do not divest U.S. Bank of the power
to bring a lawsuit on its own behalf. See Defs.’ Ex. 1. Accordingly, Ocwen’s participation in this
lawsuit is not required for foreclosure by U.S. Bank to be proper. Defendants also attach a copy of
the Transfer of Lien, whereby MERS transferred the lien to U.S. Bank. Defendants contend that this
document further evidences that Ocwen is a necessary party to this lawsuit, as it indicates that U.S.

Memorandum Opinion and Order – Page 8

Bank’s address is “c/o Owen.” Defs.’ Ex. 2 (Doc. 43-2). Contrary to Defendants’ belief, the Transfer
of Lien does not establish that U.S. Bank is an improper plaintiff; rather, it establishes that U.S. Bank
is the lienholder and, thus, affirms that U.S. Bank is a proper plaintiff. Additionally, other courts
that have addressed the issue of whether the mortgage servicer was a necessary party have
determined that the mortgage servicer was only a nominal party whose presence was not necessary
and whose absence would not prevent the courts from entering a final judgment. Powell v.
Nationstar Mortg. LLC, 2017 WL 191261, at *2 (E.D. Tex., Jan. 18, 2017) (citing Schmelzer v.
Nationstar Mortg., LLC, No. 4:16-CV-389, 2016 WL 4368735, *1 (E.D. Tex. August 16, 2016)).
Defendants’ argument that foreclosure is improper because Ocwen must be joined as a party,
therefore, fails.
Moreover, even if Ocwen were an indispensable party, the court has the discretion to bar any
motion as untimely, at this late juncture, to add Ocwen as a party or defense by Defendants based
on this argument to defeat summary judgment. Defendants had ample opportunity to move for and
raise the indispensable party issue before expiration of the January 29, 2018 pleading amendment
and joinder deadline and before it received an unfavorable ruling on their counterclaims. Defendants,
instead, waited until after Defendants moved for summary judgment on its judicial foreclosure claim.
Defendants provide no explanation for their delay in raising this issue, and their decision to delay
until after they received an unfavorable ruling and after Defendants moved for summary judgment
before raising the issue is an “offensive use” of Federal Rule of Civil Procedure 19. Judwin Props.,
Inc. v. U.S. Fire Ins. Co., 973 F.2d 432, 434-35 (5th Cir. 1992).
Defendants next contend that summary judgment is not appropriate because their loan was
illegally serviced in that the individuals servicing the loan “were and are not licensed to service loans

Memorandum Opinion and Order – Page 9

in the State of Texas corporately or individually.” Defs.’ Br. 3. Defendants’ illegal servicing
counterclaim or defense was previously dismissed with prejudice by the court. Order (Doc. 38).
Moreover, even assuming that this summary judgment argument or defense by Defendants differs
from the counterclaim or defense previously dismissed, it is not properly before the court because
Defendants raised it for the first time in their response to Plaintiff’s Motion and were not granted
leave to amend their pleadings. See Cutrera v. Bd. of Supervisors of La. State Univ., 429 F.3d 108,
113 (5th Cir. 2005) (citing Fisher v. Metro. Life Ins. Co., 895 F.2d 1073, 1078 (5th Cir. 1990) (“A
claim which is not raised in the complaint [here, answer] but, rather, is raised only in response to a
motion for summary judgment is not properly before the court.”). Accordingly, the court does not
consider Defendants’ argument regarding illegal servicing.
Finally, Defendants contend that Plaintiff is not entitled to summary judgment because its
summary judgment brief includes a typographical error that misstates the loan amount. Defs.’ Br.
2. Though Plaintiff’s misstatement, that Defendants executed a note “in the amount of $264,000.00
payable for $1,280,000.00,” may have caused some minor confusion, it does not create a genuine
dispute of material fact precluding summary judgment, as the Note indicates the correct loan amount.
Pl.’s Br. 4; Pl.’s App. 7. In sum, Defendants have not come forward with any evidence or argument
that is sufficient to rebut Plaintiff’s evidence of Defendants’ default and its satisfaction of the
prerequisites for judicial foreclosure. Because no genuine dispute of facts exists as to Plaintiff’s
entitlement to foreclose judicially on the Property, Plaintiff is entitled to summary judgment and an
order declaring its rights in this regard.

Memorandum Opinion and Order – Page 10

IV.

Conclusion
For the reasons stated, the court determines that no genuine dispute of material fact exists

regarding Plaintiff’s entitlement to foreclose judicially on the Property. Accordingly, the court
grants Plaintiff’s Motion for Summary Judgment (Doc. 34) and declares that Defendants have
defaulted on the Note; that Plaintiff, as current owner of the Note and mortgagee of the Security
Instrument, holds a first-lien security interest in the Property; that the Security Instrument secures
the Note’s outstanding balance, prejudgment interest, postjudgment interest at 6.950%, and costs of
court, and that Plaintiff’s are entitled to recover the outstanding balance, prejudgment interest,
postjudgment interest at 6.950%, and all allowable costs of court under the Note; that Plaintiff is
entitled to proceed with foreclosure of the Property; and that all foreclosure notices may be mailed
to Defendants at the address of the Property.
As Plaintiff’s claim for equitable subrogration remains, the court will delay entry of judgment
until after Plaintiff notifies the court whether it wishes to proceed with this claim. Plaintiff shall so
notify the court by March 22, 2019. Plaintiff notes in its summary judgment motion that it intends
to file a subsequent motion to seek an award of attorney’s fees, but not as an award of money
damages. Accordingly, any request by Plaintiff to recover attorney’s fees will be addressed by the
court postjudgment pursuant to Federal Rule of Civil Procedure 54(d)(2) and must be supported by
proper documentation.
It is so ordered this 11th day of March, 2019.

_________________________________
Sam A. Lindsay
United States District Judge

Memorandum Opinion and Order – Page 11