Moya Vargas v. Martin, et al
MEMORANDUM OPINION granting 14 MOTION for Summary Judgment . Per Fed. R. Civ. P. 58(a), the Court will issue a final judgment in this case in a separate document. (Signed by Judge Andrew S Hanen) Parties notified.(mperez, 1)
United States District Court
Southern District of Texas
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HECTOR ADRIAN MOYA VARGAS,
JULIE MARTIN, et al,
July 06, 2017
David J. Bradley, Clerk
CIVIL ACTION NO. 1:16-CV-172
I. Procedural and Factual Background
The matter before the Court in this diversity action is Defendant’s Motion for Summary
Judgment. [Doc. No. 14]. This lawsuit concerns the real property known as 1274 Alta Mesa
Blvd, Brownsville, Texas 78526 (“Property”) located in Cameron County, Texas. The Plaintiff
claims to be the owner of the property after purchasing the property from a third-party in 2015.
At the time this suit was filed, Plaintiff pleaded that the property had been his residential
homestead since May 11, 2015. The Defendants are Bank of America, N.A. (“BOA”) and Julie
Martin (“Martin”) in her capacity as substitute trustee.
Defendant BOA alleges that non-parties to the suit (“Borrowers”) obtained a loan to
purchase the Property on August 27, 2002 by virtue of a promissory note in the original amount
of $61,509 secured by a Deed of Trust recorded on September 9, 2002. [Ex. A‒3; Ex. A‒4].
The Borrowers defaulted on their loan, and BOA sent the Borrowers a Notice of Default and
Intent to Accelerate on September 15, 2015, threatening to initiate foreclosure proceedings if the
borrowers did not cure their default before October 25, 2015. [Ex. A‒5]. After the Borrowers
defaulted on their loan, BOA sent the Borrowers a Notice of Foreclosure Sale on June 9, 2016,
notifying the Borrowers that the Property would be sold at a foreclosure sale scheduled for July
5, 2016. [Ex. A‒6]. On July 4, 2016, BOA sent the Borrowers a Notice of Recession of
Acceleration of Loan Maturity rescinding the acceleration of the debt and maturity of the note.
[Ex. A‒7]. Thus, the foreclosure sale was cancelled and has not been subsequently held.
The Plaintiff subsequently filed this lawsuit against Defendant BOA and Defendant
Martin on June 29, 2016 in Texas state court, alleging a wrongful foreclosure claim, an action to
quiet title, and a request for injunctive relief. Per 28 U.S.C. § 1441, Defendant BOA removed
this lawsuit from state court on diversity grounds.
II. Legal Standard
Summary judgment is warranted “if the movant shows that there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). “The movant bears the burden of identifying those portions of the record it believes
demonstrate the absence of a genuine issue of material fact.” Triple Tee Golf, Inc. v. Nike, Inc.,
485 F.3d 253, 261 (5th Cir. 2007) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322–25
(1986)). Once a movant submits a properly supported motion, the burden shifts to the nonmovant to show that the court should not grant the motion. Celotex Corp., 477 U.S. at 321–25.
The non-movant then must provide specific facts showing that there is a genuine dispute.
Id. at 324; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). A
dispute about a material fact is genuine if “the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
The court must draw all reasonable inferences in the light most favorable to the
nonmoving party in deciding a summary judgment motion. Id. at 255. The key question on
summary judgment is whether a hypothetical, reasonable factfinder could find in favor of the
nonmoving party. Id. at 248.
1. Whether Subject Matter Jurisdiction is Proper
Federal courts are duty-bound to examine the basis of subject matter jurisdiction. Union
Planters Bank Nat. Ass’n v. Salih, 369 F.3d 457, 460 (5th Cir. 2004). Jurisdiction is a threshold
matter, and without jurisdiction the court cannot proceed in any cause. Steel Co. v. Citizens for a
Better Env’t, 523 U.S. 83, 94 (1998) (citing Ex parte McCardle, 74 U.S. 506, 514 (1868)). The
Plaintiff has pleaded that he is a Texas resident and that the amount in controversy exceeds
$75,000. Bank of America is a national banking association with its main office in North
Carolina and is therefore a citizen of North Carolina. See Wachovia v. Schmidt, 546 U.S.
303,318 (2006) (holding that pursuant to 28 U.S.C. § 1348, a national bank is a citizen of the
state in which its main office is located). Defendant Martin is a resident of Texas.
Defendant BOA removed this matter from state court based upon diversity between it and
the Plaintiff. Defendant BOA argues that Defendant Martin is improperly joined. A “district
court is prohibited by statute from exercising jurisdiction over a suit in which any party, by
assignment or otherwise, has been improperly or collusively joined to manufacture federal
diversity jurisdiction.” Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004)
(emphasis deleted). Improper joinder occurs when the plaintiff is unable to establish a cause of
action against the non-diverse defendant. Id. The court may conduct a 12(b)(6)-type analysis to
determine whether the complaint states a claim under state law against the in-state defendant. Id.
The court must be satisfied that there is “no reasonable basis . . . to predict that the plaintiff
might be able to recover against an in-state defendant.” Id. The citizenship of a defendant who
is improperly joined need not be considered when determining whether there is complete
diversity. Cook v. Wells Fargo Bank, N.A., 3:10-CV-0592-D, 2010 WL 2772445, at *4 (N.D.
Tex. July 12, 2010).
In the instant case, the Plaintiff makes no claims against Defendant Martin, nor does
Plaintiff allege any facts that suggest that any claim is being asserted against Defendant Martin.
Furthermore, under Texas law, a trustee under a deed of trust is not a necessary party in a suit to
prevent a foreclosure. See Tex. Prop. Code § 51.007. There is no reasonable basis for predicting
that Plaintiff might be able to recover against this in-state defendant. Defendant Martin is
improperly joined. Finally, Plaintiff has not even responded to this argument or filed a motion to
remand. In essence, Plaintiff has conceded that Defendant BOA’s position on this argument is
Therefore, Defendant Martin’s Texas citizenship need not be considered when
determining whether there is complete diversity. Further, Defendant Martin is hereby dismissed
from this case.
2. Wrongful Foreclosure Claim
Plaintiff asserts that Defendant BOA wrongfully foreclosed on his property because
Defendant BOA failed to provide notice of default, intent to accelerate, or notice of foreclosure
before foreclosing on the party. Under Texas law, a plaintiff asserting wrongful foreclosure must
show (1) a defect in the foreclosure sale proceedings, (2) a grossly inadequate selling price, and
(3) a causal connection between the defect and the grossly inadequate selling price. Sauceda v.
GMAC Mortgage Corp., 268 S.W.3d 135, 139 (Tex.App.—Corpus Christi 2008, no pet.)
(citing Charter Nat’l Bank–Houston v. Stevens, 781 S.W.2d 368, 371 (Tex.App.—Houston [14th
Dist.] 1989, writ denied)).
In an action for wrongful foreclosure, a mortgagor may elect to recover damages equal to
the difference between the value of the property at foreclosure and the remaining balance due on
the outstanding debt. Peterson v. Black, 980 S.W.2d 818, 823 (Tex. App.—San Antonio 1998,
no pet.) (citing Farrell v. Hunt, 714 S.W.2d 298 (Tex.1986)). Recovery for wrongful foreclosure
“is conditioned on the disturbance of the mortgagor’s possession.” Peterson v. Black, 980
S.W.2d 818, 823 (Tex. App.—San Antonio 1998, no pet.). “Where the mortgagor’s possession
is undisturbed, he has suffered no compensable damage.” Id. For this reason, federal courts
applying Texas law have concluded that a plaintiff may not bring a wrongful foreclosure claim if
the individual never lost possession of the property. See, e.g., Smith v. J.P. Morgan Chase Bank
N/A, CIV.A. H-10-3730, 2010 WL 4622209, at *2 (S.D. Tex. Nov. 4, 2010).
Defendant BOA argues that there is no evidence that Plaintiff lost possession of the
property. The Plaintiff’s summary judgment evidence consists solely of his sworn affidavit. The
Plaintiff avers that since May 11, 2015, his property continues to be his residential homestead.
[Vargas Aff. 2]. Defendant BOA provides evidence that shows the Plaintiff’s property was
never foreclosed upon as the foreclosure sale was cancelled. [See Def.’s Ex. A‒7]. The Plaintiff
provides no competent summary judgment evidence to create an issue of material fact as to
whether he lost possession of his property. Defendant BOA’s Motion is therefore granted as to
Plaintiff’s state law wrongful foreclosure claim.
3. Action to Quiet Title
A suit to quiet title is an action in which a plaintiff petitions the court to remove a cloud
in the plaintiff’s title created by an allegedly invalid claim. To prevail in a quiet title action, the
Plaintiff must show: “(1) an interest in a specific property, (2) title to the property is affected by
a claim by the defendant, and (3) the claim, although facially valid, is invalid or unenforceable.”
Bell v. Bank of Am. Home Loan Servicing LP, No. 4:11-CV-02085, 2012 WL 568755, at *7
(S.D. Tex. Feb. 21, 2012) (citing U.S. Nat’l Bank Ass’n v. Johnson, No. 01-10-00837-CV, 2011
WL 6938507, at *3 (Tex. App.—Houston [1st Dist.] Dec. 30, 2011)).
A plaintiff “must allege right, title, or ownership in [themselves] with sufficient certainty
to enable the court to see he or she has a right of ownership that will warrant judicial
interference.” Turner v. AmericaHomeKey, Inc., No. 12-10277, 2013 WL 657772 (5th Cir. Feb.
22, 2013) (citing Wright v. Matthews, 26 S.W.3d 575, 578 (Tex. App.— Beaumont 2000, pet.
denied)). Under Texas law, “an instrument that is properly recorded in the proper county is
notice to all persons of the existence of the instrument.” Realty Portfolio v. Hamilton, 125 F.3d
292, 299 (5th Cir. 1997) (citing Tex. Prop. Code § 13.002). Thus, a hypothetical purchaser of a
property would have notice of a properly recorded deed of trust and would purchase the property
subject to the deed of trust. Inwood N. Homeowners’ Ass’n, Inc. v. Harris, 736 S.W.2d 632, 635
(Tex. 1987). A plaintiff must recover on the strength of his own title, not on the weakness of his
adversary’s. Humble Oil & Ref. Co. v. Sun Oil Co., 191 F.2d 705, 715 (5th Cir. 1951).
Defendant BOA holds a lien on Plaintiff’s property by virtue of a Deed of Trust assigned
to Defendant BOA and recorded in the Official Public Records of Cameron County on
September 9, 2009. [Ex. A‒3; Ex. A‒4]. The Plaintiff’s avers that he purchased the property in
question from the record owner free and clear of any encumbrances.
[Vargas Aff. 4].
Nevertheless, the Plaintiff admits that he did not do a title search to determine the record owner
of the property or to determine the existence of any encumbrance before purchasing the property.
[Pl.’s Interrog. Resp. at 13‒14]. Plaintiff did not obtain a title insurance policy. [Id.] A title
search would have revealed the existing BOA encumbrance on the property. The Plaintiff does
not challenge the validity of Defendant BOA’s lien, or point to any recording defect. Thus, per
Celotex, after considering the Plaintiff’s summary judgment evidence, the Court rules that the
Plaintiff has not shown any dispute of material fact as to whether he may assert a title superior to
that claimed by Defendant.1
4. Injunctive Relief
The Plaintiff also seeks a preliminary injunction to prevent foreclosure on the property.
A party seeking a temporary injunction must show (1) a substantial likelihood of success on the
merits, (2) a substantial threat that the movant will suffer irreparable injury if the injunction is
denied, (3) that said injury outweighs any damage the injunction will cause the opposing party,
and (4) that the injunction will not disserve the public interest. Hoover v. Morales, 164 F.3d 221,
224 (5th Cir.1998). The Plaintiff has not shown that he is likely to succeed on the merits of
either his wrongful foreclosure claim or his claim to quiet title. Furthermore, Defendant BOA
cancelled the foreclosure sale on or about July 4, 2016. [Ex. A‒7]. Accordingly, the Court
grants Defendant BOA’s Motion with respect to Plaintiff’s request for injunctive relief.
The Plaintiff claims that the property in question is his homestead. Plaintiff’s assertion has no effect on an existing
encumbrance on the property. It is a “longstanding principal” under Texas law that an encumbrance existing against
property cannot be effected by the subsequent impression of the homestead exception on the land. Inwood N.
Homeowners’ Ass’n, Inc. v. Harris, 736 S.W.2d 632, 635 (Tex. 1987).
Defendant Martin was improperly joined and she is dismissed. The Plaintiff has not met
his burden to show a dispute of material fact exists for his wrongful foreclosure claim and action
to quiet title against Defendant BOA. Furthermore, Plaintiff has not shown that he has a
substantial likelihood of succeeding on the merits of his claims to warrant injunctive relief. Per
Celotex, the Court hereby grants Defendant BOA’s Motion for Summary Judgment [Doc. No.
14] in full. Per Fed. R. Civ. P. 58(a), the Court will issue a final judgment in this case in a
Signed this 6th day of July, 2017.
Andrew S. Hanen
United States District Judge
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