Factor et al v. JPMorgan Chase Bank, N.A.
Filing
27
MEMORANDUM AND ORDER granting 23 MOTION for Summary Judgment. (Signed by Judge Gregg Costa) Parties notified.(arrivera, 3)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
GALVESTON DIVISION
JERRY FACTOR, et al,
Plaintiffs,
VS.
JPMORGAN CHASE BANK, N.A.,
Defendant.
§
§
§
§
§
§
§
§
CIVIL ACTION NO. 3:13-CV-266
MEMORANDUM AND ORDER
Plaintiffs Jerry and Jacqueline Factor seek to prevent Defendant JP Morgan
Chase from foreclosing on their home in Pearland, Texas. The Factors filed suit
against lien holder JPMorgan Chase Bank, N.A. seeking an injunction, damages,
and declaratory judgment. Defendants seek summary judgment on the remaining
claims, which raise issues under the Truth in Lending Act (TILA) the Real Estate
Settlement Procedures Act (RESPA), and the Texas statute of limitations for
foreclosure actions. After reviewing the relevant evidence and arguments, the
Court GRANTS the Defendant’s Motion for Summary Judgment
I. BACKGROUND
On April 10, 2006, the Factors executed a promissory note in favor of
LoanAmerica Home Mortgage, Inc. Docket Entry Nos. 11-1, 11-2. On January
1/7
13, 2009, Defendant’s predecessor, Chase Home Finance LLC, acquired the
mortgage lien. The Factors allege that Chase failed to give them proper notice of
its ownership as a new creditor and that Chase accelerated the mortgage thereby
starting the four-year statute of limitations for foreclosure ending in March 2013.
But Chase sent the Factors a notice of acceleration on the lien on January 23,
2009, which also included notice that Chase was the lien’s assignee. Docket Entry
No. 23 at 5. Chase sent additional notices of acceleration and detailed information
about the loan on June 2, 2009. Chase claims that it rescinded the acceleration,
however, on October 9,, 2009 by sending a notice to the Factors’ home address.
The Factors inquired about the loan at some point prior to June 14, 2013, and
Chase responded with information about the loan and several documents pertaining
to a prior request for verification of debt. Although Chase has not foreclosed and
the Factors still live in the mortgaged property, they filed suit to prevent Chase
from foreclosing in the future.
Now Defendants move for summary judgment on the basis that the statute of
limitations period for recovery of real property has not expired, and that the
evidence cannot support a claim under TILA or RESPA. In a phone call to the
Court, Plaintiffs voluntarily declined to respond to the motion for summary
judgment.
2/7
II. STANDARD OF REVIEW
When a party moves for summary judgment, the reviewing court shall grant
the motion “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). All reasonable doubts on questions of fact must be resolved in favor of the
party opposing summary judgment. See Evans v. City of Houston, 246 F.3d 344,
348 (5th Cir. 2001) (citation omitted).
A court may not grant summary judgment simply because a nonmovant fails
to respond, but the court may decide the merits of the case based on a defendant’s
motion and supporting evidence. See Parish v. Werner Co., 2006 WL 734418, at
*1 (S.D. Tex. Mar. 20, 2006); Eversley v. MBank Dallas, 843 F.2d 172, 173–74
(5th Cir. 1988) (affirming the district court’s acceptance of the facts in the
defendant's motion for summary judgment as undisputed when the non-movant
failed to submit a response).
III. ANALYSIS
Plaintiffs remaining claims are as follows: (1) Chase violated TILA when it
failed to notify the Factors of the mortgage lien transfer within 30 days; (2) Chase
violated RESPA when it failed to acknowledge Plaintiffs’ Qualified Written
Request (QWR) within five days of receipt; and (3) the four-year statute of
3/7
limitations on foreclosure has expired because Chase’s acceleration of the
mortgage was in March 2009.
A. TILA Claim
The Factors allege that Chase failed to give them proper notice of its
ownership of the mortgage as a new creditor, which violates TILA. When a
mortgage loan is sold or assigned to a third party, the creditor that is the new
assignee of the debt shall notify the borrower in writing of such transfer “not later
than 30 days after the date on which a mortgage loan is sold.” 15 U.S.C. §
1641(g)(1).
Chase raises a number of defenses to the TILA claim, the most simple of
which is that it complied with the 30-day requirement. Ten days after Chase
acquired the lien on January 13, 2009, it sent a letter via certified mail to the
Factors, informing them of Chase’s status as the new Mortgagee. See Docket
Entry No. 23-1 at 5–9. Chase thus is entitled to summary judgment on the TILA
claim.
B. RESPA Claim
The Factors also allege that Chase violated RESPA by failing to
acknowledge a QWR pertaining to the mortgage within the required time limit.
RESPA requires a mortgagee to “provide a written response acknowledging receipt
of the correspondence within 5 days.” 12 U.S.C. § 2605.
4/7
Proving
the
wisdom
and
professionalism
of
Plaintiffs’
counsel’s
acknowledgement that he had no basis for opposing summary judgment, Chase
once again submits evidence rejecting the factual basis for the claim.
That
documentation indicates that Chase received a QWR on June 11, 2013, and sent a
letter acknowledging receipt of the inquiry on June 14, 2013. Docket Entry No. 15 at 48–49. Chase therefore is also entitled to summary judgment on the RESPA
claim.
C. Statute of Limitations
Under Texas law, a suit for foreclosure of real property must be brought
within four years after the day the cause of action accrues. Tex. Civ. Prac. & Rem.
Code § 16.035(a). The Factors seek a declaration that Chase’s mortgage lien is
invalid due to its failure to foreclose the mortgage within four years of March
2009, which is when Chase first sent the acceleration notice to them. Docket Entry
No. 11 ¶15.
Chase provides unrefuted evidence that it rescinded the acceleration of the
mortgage on October 12, 2009. Docket Entry No. 23-1 at 14–17. This Court has
previously held that filing a notice of rescission serves as an effective
abandonment to the acceleration of the mortgage note and deed of trust, restoring
the note to its original terms. See Clawson v. GMAC Mortg., LLC, 2013 WL
1948128, at *4 (S.D. Tex. 2013). If another acceleration notice is sent after the
5/7
rescission, the limitations clock starts anew. Id. And under Texas law, the creditor
retains the ability to abandon acceleration and does not need the borrower’s
consent. See Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 566–67
(Tex. 2001) (noting holder’s ability to abandon acceleration by continuing to
accept payments without exacting available remedies); Santibanez v. Saxon Mortg.
Inc., 2012 WL 3639814, *2(Tex. App.—Eastland 2012, no pet.) (“The parties can
abandon acceleration and restore the contract to its original terms by agreement or
action.” (citations omitted)); Khan v. GBAK Props., Inc., 371 S.W.3d 347, 356
(Tex. App.-Houston [1st Dist.] 2012, no pet.) (“It has been the law of Texas at
least since 1901 that the parties can abandon acceleration and restore the contract
to its original terms by the parties’ agreement or actions.” (citing San Antonio
Real-Estate, Bldg. & Loan Ass’n v. Stewart, 61 S.W. 386, 388 (Tex. 1901))).
As there is no genuine issue of material fact as to whether Chase properly
rescinded its acceleration of the Factors’ mortgage, the statute of limitations does
not invalidate Chase’s ability to foreclose.
IV. CONCLUSION
For these reasons, the Court GRANTS Defendant’s Motion for Summary
Judgment (Docket Entry No. 23) and the Factors’ claims are DISMISSED WITH
PREJUDICE.
6/7
SIGNED this 28th day of July, 2014.
___________________________________
Gregg Costa
United States Circuit Judge*
*
Sitting by designation.
7/7
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?