Crittendon v. The Bank of New York Mellon
Filing
28
MEMORANDUM OPINION AND ORDER granting 26 MOTION for Summary Judgment , terminating at moot 17 MOTION to Dismiss (Signed by Judge George C Hanks, Jr) Parties notified.(dperez, 3)
United States District Court
Southern District of Texas
ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
GALVESTON DIVISION
ALONZO CRITTENDON,
Plaintiff,
VS.
THE BANK OF NEW YORK MELLON,
Defendant.
§
§
§
§
§
§
§
§
January 18, 2018
David J. Bradley, Clerk
CIVIL ACTION NO. 3:16-CV-325
MEMORANDUM OPINION AND ORDER
Plaintiff Alonzo Crittendon filed this lawsuit in the 122nd Judicial District Court of
Galveston County, Texas, in an attempt to prevent Defendant, the Bank of New York
Mellon, from foreclosing on the property located at 3816 Armand Drive, Dickinson,
Texas, 77539.
The Bank removed the lawsuit to this Court. At the time of removal, the live
pleading in the suit was Crittendon’s “First Amended Petition, Application for Injunctive
Relief, and Request for Disclosures.” Dkt. 1-12. In that pleading, Crittendon alleged that
he and his wife purchased the property on November 30, 2005, and the Note and Deed of
Trust for the mortgage were subsequently transferred to the Bank. Crittendon alleged that
he was assured that, even though he had fallen behind on mortgage payments, the Bank
would not foreclose on the property. He contends that the Bank broke that promise and
initiated foreclosure proceedings, ultimately selling the property at a foreclosure sale.
Crittendon asserts claims for breach of contract, common law fraud, and promissory
estoppel.
1/9
The Bank now seeks summary judgment in its favor. Dkt. 26. First, the Bank
contends that Crittendon’s breach of contract claims are based upon an alleged oral
promise and are therefore barred by the statute of frauds. The Bank also argues that
Crittendon’s “breach of contract claim also fails because Plaintiff failed to specify the
provision breached.” Next, the Bank contends that summary judgment should be entered
on Crittendon’s fraud claim because that claim is barred by the economic loss rule;
because there is no evidence that an actionable representation was made or that
Crittendon justifiably relied on such a representation to his detriment; and because
“Crittendon failed to plead with specificity.” Next, the Bank seeks summary judgment on
Crittendon’s promissory estoppel claim. And, to the extent that Crittendon asserts a
wrongful foreclosure claim, the Bank also seeks summary judgment on that claim.
Finally, the Bank seeks summary judgment on Crittendon’s claims for injunctive or
equitable relief.
The undisputed summary judgment evidence shows that Crittendon executed an
Adjustable Rate Note in the amount of $144,000 and a Deed of Trust to secure repayment
of the Note, his loan was transferred to the Bank, Crittendon failed to make payments as
required, and he was in default. Although Crittendon attempted to negotiate a loan
modification, there is no evidence to show that he was successful in securing such a
modification. Ultimately, the property was sold at a foreclosure sale for $165,380.75.
After reviewing the motion, the summary judgment record, the pleadings, and the
applicable authorities, the Court hereby GRANTS the motion for summary judgment
2/9
because there is no genuine dispute of material fact on any of Crittendon’s claims against
the Bank.
LEGAL STANDARDS
Summary judgment is warranted if the movant establishes that there is no genuine
dispute as to any material fact and that it is entitled to judgment as a matter of law. FED.
R. CIV. P. 56(a). “A genuine dispute of material fact exists when the ‘evidence is such
that a reasonable jury could return a verdict for the nonmoving party.’” Nola Spice
Designs, LLC v. Haydel Enters., Inc.,783 F.3d 527, 536 (5th Cir. 2015) (quoting
Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986)). “The moving party ‘bears the
initial responsibility of informing the district court of the basis for its motion, and
identifying those portions of [the record] which it believes demonstrate the absence of a
genuine issue of material fact.’” Id. (quoting EEOC v. LHC Grp., Inc., 773 F.3d 688, 694
(5th Cir. 2014)); see also Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
“Where the non-movant bears the burden of proof at trial, the movant may merely
point to the absence of evidence and thereby shift to the non-movant the burden of
demonstrating by competent summary judgment proof that there is an issue of material
fact warranting trial.” Id. (quotation marks omitted); see also Celotex, 477 U.S. at 325.
Although the party moving for summary judgment must demonstrate the absence of a
genuine issue of material fact, it does not need to negate the elements of the nonmovant’s
case. Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005). “A fact is
‘material’ if its resolution in favor of one party might affect the outcome of the lawsuit
under governing law.” Sossamon v. Lone Star State of Texas, 560 F.3d 316, 326 (5th Cir.
3/9
2009) (quotation omitted). “If the moving party fails to meet [its] initial burden, the
motion [for summary judgment] must be denied, regardless of the nonmovant’s
response.” United States v. $92,203.00 in U.S. Currency, 537 F.3d 504, 507 (5th Cir.
2008) (quoting Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc)).
“Once the moving party [meets its initial burden], the non-moving party must ‘go beyond
the pleadings and by her own affidavits, or by the depositions, answers to interrogatories,
and admissions on file, designate specific facts showing that there is a genuine issue for
trial.’” Nola Spice, 783 F.3d at 536 (quoting EEOC, 773 F.3d at 694). The nonmovant
must identify specific evidence in the record and articulate how that evidence supports
that party’s claim. Baranowski v. Hart, 486 F.3d 112, 119 (5th Cir. 2007). “This burden
will not be satisfied by ‘some metaphysical doubt as to the material facts, by conclusory
allegations, by unsubstantiated assertions, or by only a scintilla of evidence.’”
Boudreaux, 402 F.3d at 540 (quoting Little, 37 F.3d at 1075). In deciding a summary
judgment motion, the court draws all reasonable inferences in the light most favorable to
the nonmoving party. Connors v. Graves, 538 F.3d 373, 376 (5th Cir. 2008); see also
Nola Spice, 783 F.3d at 536.
ANALYSIS
A. Breach of Contract
The Bank is entitled to summary judgment on Crittendon’s breach of contract
claim. 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 defendant; and (4) damages to the plaintiff resulting from that
4/9
breach.” Crose v. Humana Ins. Co., 823 F.3d 344, 347–48 (5th Cir. 2016). However,
Texas law is also clear that, “[a] loan agreement in which the amount involved 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); see also TEX. BUS. & COM. CODE § 26.01(b)(6) (“an agreement which is not
to be performed within one year from the date of making the agreement” must be in
writing to be enforceable). The Texas statute of frauds specifically defines a “loan
agreement” to include promissory notes and deeds of trust. Id. § 26.02(a)(2).
Crittendon’s breach of contract claim is based on an alleged oral agreement, made
after he entered into written the Note and became delinquent under its terms, that the
Bank would forebear foreclosure while he pursued a loan modification. As numerous
courts have held, “[b]ecause such an oral agreement would have altered the terms of the
parties’ written loan agreement, which exceeded $50,000 in value, such an oral
agreement is unenforceable under Texas’ Statute of Frauds.” See, e.g., Terna v. Wells
Fargo Bank, Civil Action No. 4:16-CV-03461, 2017 WL 6513990, at *3 (S.D. Tex. Nov.
20, 2017), report and recommendation adopted Dec. 18, 2017; Matthews v. JPMorgan
Chase Bank, N.A., Civil Action No. H–14–2266, 2015 WL 892954, at *2 (S.D. Tex.,
Mar. 1, 2015) (citing TEX. BUS. & COM. CODE § 26.02(b) and finding that an alleged oral
promise not to foreclose on a mortgage loan was barred by the statue of frauds because
the loan agreement was for more than $50,000.00); see also Milton v. U.S. Bank Nat.
Ass’n, 508 Fed. App’x. 326, 328 (5th Cir. 2013) (collecting cases). Accordingly,
summary judgment for the Bank will be entered this claim.
5/9
B. Common Law Fraud Claim
To prevail on a fraud claim under Texas law, a plaintiff must prove that (1) the
defendant made a material representation that was false; (2) the defendant knew the
representation was false or made it recklessly as a positive assertion without any
knowledge of its truth; (3) the defendant intended to induce the plaintiff to act upon the
representation; (4) the plaintiff actually and justifiably relied upon the representation; and
(5) the plaintiff thereby suffered an injury. Ernst & Young, L.L.P. v. Pacific Mut. Life,
Ins. Co., 51 S.W.3d 573, 577 (Tex. 2001); see also Formosa Plastics Corp. v. Presidio
Engineers and Contractors, Inc., 960 S.W.2d 41, 47 (Tex. 1998) (“A fraud cause of
action requires ‘a material misrepresentation, which was false, and which was either
known to be false when made or was asserted without knowledge of its truth, which was
intended to be acted upon, which was relied upon, and which caused injury.’”). Here,
Crittendon’s fraud claim appears to be based upon his allegation that he received an oral
promise that the Bank would not foreclose upon his home while he pursued a loan
modification.
As the Bank points out, Federal Rule of Civil Procedure 9(b) imposes a heightened
level of pleading for fraud claims, requiring a party alleging common law fraud to plead
the surrounding circumstances with particularity. FED. R. CIV. P. 9(b); see Tuchman v.
DSC Comm’n Corp., 14 F.3d 1061, 1067 (5th Cir. 1994), cert. denied, 522 U.S. 966
(1997). In the Fifth Circuit, this requires the plaintiff to include allegations of “the
particulars of time, place, and contents of the false representations, as well as the identity
of the person making the misrepresentation and what that person obtained thereby.”
6/9
Tuchman, 14 F.3d at 1068. Crittendon has not met this threshold. His complaint falls
woefully short of explaining the “who, what, when, and how” of the alleged fraudulent
statements. Further, there is no evidence in the summary judgment record to support his
fraud claims. Even taking all evidence in his favor, the Court finds that Crittendon has
failed to present enough evidence to raise a genuine issue of material fact on any element
of his fraud claim, and the Bank is therefore entitled to summary judgment on this claim.1
C. Promissory Estoppel
Crittendon’s petition states that he wishes to assert a claim for “promissory
estoppel” because the Bank of New York made him a promise; he reasonably and
substantially relied on that promise to his detriment; his reliance on the promise was
foreseeable by the Bank; and “injustice can be avoided only by enforcing [the Bank’s]
promise.”
Under Texas law, an affirmative claim or cause of action for “promissory
estoppel” requires the following elements: (1) a promise; (2) foreseeability by the
promisor of reliance on the promise; and (3) substantial reliance by the promisee to its
detriment. Walker v. Walker, Cause No. 14-16-00357-CV, 2017 WL 1181359, at *7
(Tex. App.—Houston [14th Dist.] Mar. 30, 2017, no pet.) (citing Boales v. Brighton
Builders, Inc., 29 S.W.3d 159, 166 (Tex. App.–Houston [14th Dist.] 2000, pet. denied)
(cleaned up); see also Collins. v. Walker, 341 S.W.3d 570, 573–74 (Tex. App.–Houston
1
Alternatively, the Court finds that Crittendon’s fraud claims are barred by the economic loss
rule. The economic loss rule precludes recovery in tort when the loss complained of is the
subject matter of a contract between the parties. See, e.g., Sw. Bell Tel. Co. v. DeLanney, 809
S.W.2d 493, 494 (Tex. 1991).
7/9
[14th Dist.] 2011, no pet.) (claim applies where enforcing the promise is necessary to
avoid injustice). As above, there is no evidence in the summary judgment record to raise
a genuine dispute of material fact on any of the necessary elements of Crittendon’s claim
for affirmative promissory estoppel under Texas law, and summary judgment is
appropriate for the Bank on this claim.
D. Wrongful Foreclosure
Under Texas law, a plaintiff asserting a claim for wrongful foreclosure must
ordinarily 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. Miller v. BAC Home Loans Servicing, L.P., 726 F.3d 717, 726 (5th Cir.
2013) (quotation marks and citation omitted); Taylor v. Ditech Financial, LLC, Civil
Action No. H–16–2465, 2017 WL 2362493, at *5 (S.D. Tex., May 31, 2017) (same).
Crittendon has not identified any defects in the foreclosure sale proceedings, nor has he
alleged that the Property was sold at a grossly inadequate price. The Court also finds that
there is no evidence in the summary judgment record to raise a genuine dispute of
material fact as to whether there was a causal connection between any identified defect
and a grossly inadequate selling price. Summary judgment is appropriate for the Bank on
this claim as well.
E. Injunctive and Equitable Relief
Finally, as to Crittendon’s request for injunctive or equitable relief, the Court also
grants summary judgment for the Bank. As stated above, Crittendon has not brought forth
any evidence or otherwise raised a genuine dispute of material fact as to his entitlement
8/9
to legal or equitable relief. See Howard v. AMH ROMAN TWO TX, LLC, Case No. 4:15CV-526, 2016 WL 3392417, at *5 (E.D. Tex., May 11, 2016) (“A request for equitable or
injunctive relief must be premised upon the existence of a viable underlying legal claim.
Here, Plaintiff's claims for legal relief have failed. Thus, his claims for equitable and
injunctive relief also fail.”) (collecting cases); Hanna v. RFC Deutsche Bank Nat. Trust
Co., 2012 WL 1969948, at *5 (N.D. Tex. 2012) (same).
CONCLUSION
Accordingly, the Court finds that there is no genuine dispute on any of
Crittendon’s claims against the Bank, and summary judgment should be entered in the
Bank’s favor.
All other pending motions are DENIED as moot.
Final judgment shall be entered separately.
SIGNED at Galveston, Texas, this 18th day of January, 2018.
___________________________________
George C. Hanks Jr.
United States District Judge
9/9
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?