Northcutt v. Citimortgage, Inc. et al
Filing
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MEMORANDUM OPINION AND ORDER GRANTING 10 MOTION for Summary Judgment and Consolidated Brief in Support.(Signed by Judge Gray H. Miller) Parties notified.(rkonieczny)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
MICHELLE G. NORTHCUTT ,
Plaintiff,
v.
CITIMORTGAGE , INC. AND
FEDERAL NATIONAL MORTGAGE
ASSOCIATION A/K/A FANNIE MAE
Defendants.
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CIVIL ACTION NO .: H-12-646
MEMORANDUM OPINION & ORDER
Pending before the court is CitiMortgage, Inc.’s (“CMI”) and Federal National Mortgage
Association’s (“Fannie Mae”) motion for summary judgment. Dkt. 10. Upon consideration of the
motion and the applicable law, the motion for summary judgment is GRANTED.
I. BACKGROUND
On March 12, 2008, plaintiff Michelle Northcutt (“Northcutt”) obtained a home equity loan
for $150,200.00 from defendant CitiMortgage, Inc. (“CMI”). Dkt. 11, at 1–4. Northcutt executed
a Texas Home Equity Security Lien on the same date, as a first lien against her residential property.
Id. at 5–23.
In her state court petition, Northcutt alleges she was current on her loan payments through
October 2010. Dkt.1, Ex. A-3 ¶ 9. However, in its motion CMI adduced evidence that Northcutt
made no payments on her loan after April 2010. Dkt. 11, at 81–83 ¶ 8. On April 19, 2010, CMI sent
notice to Northcutt that she was overdue on mortgage payments. Id. at 24. Northcutt alleges that
from October 2010 to June 2011 she attempted to secure a loan modification with CMI, and that to
do so she halted payments on her loan per CMI’s advice. Dkt. 1, Ex. A-3 at ¶¶ 9–15. CMI counters
that on August 4, 2010, it notified Northcutt that she was ineligible for a loan modification.
Dkt. 11, at 82 ¶ 5. On September 20, 2010, CMI sent notice to Northcutt that her home equity loan
was in default. Id. at 25–26. Because Northcutt failed to cure the default, CMI notified her on
November 1, 2010 that the loan balance was accelerated, putting her debt at $135,275.44. Dkt. 11,
at 67– 68, 82 ¶ 5. CMI filed for a Home Equity Foreclosure Order in Harris County court and
obtained a default judgment against Northcutt on May 3, 2011. Id. at 69–70, 71– 73. In preparation
for the foreclosure sale, CMI appointed a substitute trustee for the Deed of Trust. Id. at 74. On July
5, 2011, CMI proceeded with the foreclosure sale. Id. at 79–80. Defendant Fannie Mae purchased
the property, and CMI conveyed the property to them by Substitute Trustee’s Deed. Id. Northcutt
continues to live in the residence. Dkt. 1, Ex. A at ¶¶ 33-35.
Northcutt filed suit in Texas state court on December 2, 2011. Dkt. 1, Ex. A. She brings
claims for breach of contract, negligence, wrongful foreclosure and slander of title. Id. Northcutt
also seeks a declaration that (1) she is the rightful owner of the property; (2) the “alleged foreclosure
sale of the Property to Fannie Mae . . . was ineffective, null and void, or alternatively, voidable and
rescinded . . . .”; and (3) “that the doctrines of estoppel and laches preclude” the defendants from
“taking any action adverse to Northcutt.” Id. at ¶¶ 18–19. Additionally, she seeks a Temporary
Restraining Order and Temporary Injunction preventing the defendants from selling the property or
evicting her from it. Id. at ¶¶ 33–34.
Defendants removed the case to this court on March 1, 2012. Dkt. 1. They filed a motion for
summary judgment on February 15, 2013 Dkt. 10. Although Northcutt participated in mediation
with the defendants and agreed to defendants’ motion for continuance, she has filed nothing else
since removal, including a response to defendants’ motion for summary judgment.
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II. LEGAL STANDARD
Summary judgment is proper if “the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to a judgment as a matter of law.” FED . R. CIV . P. 56(a); see
also Carrizales v. State Farm Lloyds, 518 F.3d 343, 345 (5th Cir. 2008). The mere existence of
some alleged factual dispute between the parties will not defeat an otherwise properly supported
motion for summary judgment; there must be an absence of any genuine issue of material fact.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48, 106 S. Ct. 2505 (1986). An issue is
“material” if its resolution could affect the outcome of the action. Burrell v. Dr. Pepper/Seven Up
Bottling Grp., Inc., 482 F.3d 408, 411 (5th Cir. 2007). “[A]nd a fact is genuinely in dispute only if
a reasonable jury could return a verdict for the non-moving party.” Fordoche, Inc. v. Texaco, Inc.,
463 F.3d 388, 392 (5th Cir. 2006).
The moving party bears the initial burden of informing the court of all evidence
demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S.
317, 323, 106 S. Ct. 2548 (1986). Only when the moving party has discharged this initial burden
does the burden shift to the non-moving party to demonstrate that there is a genuine issue of material
fact. Id. at 322. If the moving party fails to meet this burden, then it is not entitled to a summary
judgment, and no defense to the motion is required. Id . “For any matter on which the non-movant
would bear 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.” Transamerica Ins. Co. v. Avenell , 66
F.3d 715, 718–19 (5th Cir. 1995); see also Celotex, 477 U.S. at 323–25. To prevent summary
judgment, “the non-moving party must come forward with ‘specific facts showing that there is a
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genuine issue for trial.’” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587,
106 S. Ct. 1348 (1986) (quoting former FED . R. CIV . P. 56(e)).
When considering a motion for summary judgment, the court must view the evidence in the
light most favorable to the non-movant and draw all justifiable inferences in favor of the nonmovant. Envl. Conservation Org. v. City of Dallas, Tex., 529 F.3d 519, 524 (5th Cir. 2008). The
court must review all of the evidence in the record, but make no credibility determinations or weigh
any evidence; disregard all evidence favorable to the moving party that the jury is not required to
believe; and give credence to the evidence favoring the non-moving party as well as to the evidence
supporting the moving party that is uncontradicted and un-impeached. Moore v. Willis Ind. Sch.
Dist., 233 F.3d 871, 874 (5th Cir. 2000).
However, the non-movant cannot avoid summary judgment simply by presenting “conclusory
allegations and denials, speculation, improbable inferences, unsubstantiated assertions, and legalistic
argumentation.” TIG Ins. Co. v. Sedgwick James of Wash., 276 F.3d 754, 759 (5th Cir. 2002); Little
v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc). “ To withstand a motion for
summary judgment, a plaintiff must show that there is a genuine issue for trial by presenting
evidence of specific facts.” Bellard v. Gautreaux, 675 F.3d 454, 460 (5th Cir. 2012) (citing Liberty
Lobby, Inc., 477 U.S. at 248–49). By the same token, the moving party will not meet its burden of
proof based on conclusory “bald assertions of ultimate facts.” Gossett v. Du-Ra-Kel Corp., 569 F.2d
869, 872 (5th Cir. 1978); see also Galindo v. Precision Am. Corp., 754 F.2d 1212, 1221 (5th Cir.
1985).
IV. ANALYSIS
A.
Breach of Contract
The essential elements of a breach of contract claim in Texas are: “(1) the existence of a valid
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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)).
In her original state court petition, Northcutt recites the elements of a breach of contract
claim against CMI, but fails to allege a specific contract or breach. Dkt. 1, Ex. A ¶ 21. The two
written agreements at issue are the Note and the Deed of Trust. Northcutt alleges no specific breach
of either. In fact, she admits that she has breached both the Note and the Deed of Trust because she
stopped making payments. Id. at ¶¶ 10-15. In the absence of evidence creating a genuine issue of
fact that defendants breached a contract, Northcutt cannot maintain her breach of contract claim.
B.
Negligence
Northcutt’s claim for negligence suffers similar infirmities. She recites the elements of a
negligence cause of action but fails to include a single factual allegation regarding any of those
elements. Moreover, even if she had proffered some evidence to support a negligence claim, she
could not sustain it as a matter of law. Under Texas law, “[w]hen the injury is only the economic
loss to the subject of a contract itself, the action sounds in contract alone.” Jim Walter Homes, Inc.
v. Reed, 711 S.W.2d 617, 618 (Tex. 1986). Tort damages, thus, are generally not recoverable if the
defendant’s conduct “would give rise to liability only because it breaches the parties’ agreement.”
Sw. Bell Tel. Co. v. DeLanney, 809 S.W.2d 493, 494 (Tex. 1991). Tort damages are, however,
recoverable if the defendant’s conduct “would give rise to liability independent of the fact that a
contract exists between the parties.” Id. Here, CMI’s alleged actions giving rise to Northcutt’s
claims concern the Note and Deed of Trust. Dkt. 1, Ex. A. Because the only relationship between
Northcutt and CMI is contractual, any duty owed to Northcutt by CMI is also contractual, and
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“cannot form the basis of a tort claim.” Kaechler v. Bank of Am., N.A., Civ. No. H-12-423, 2013
WL 127555 at *6 (S.D. Tex. Jan. 9, 2013) (collecting cases). Therefore, Northcutt cannot maintain
her cause of action for negligence.
C.
Wrongful foreclosure
The elements of a wrongful foreclosure claim in Texas are “(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 Mortg. Corp., 268 S.W.3d 135,
139 (Tex. App.—Corpus Christi 2008, no pet.). Northcutt recites the elements of a wrongful
foreclosure action in her petition. Dkt. 1, Ex. A at ¶¶ 24-25. However, she alleges no facts to
support her cause of action. And, she has not disputed CMI’s evidence demonstrating that the
foreclosure sale was properly carried out. Dkt. 11 at 13. Moreover, in her petition, she admits that
she was noticed of the foreclosure sale. Dkt. 1, Ex. A at ¶¶ 15-16.
More importantly, Northcutt is still in possession of the property. Dkt. 11, at 83 ¶ 8. “[A]s
a matter of law Plaintiffs' continued possession of the property precludes their claim for wrongful
foreclosure.” Barcenas v. Fed. Home Loan Mortg. Corp., Civ. No. H-12-2466, 2013 WL 286250
at *7 (S.D. Tex. Jan. 24, 2013) (collecting cases); see also Motten v. Chase Home Fin., 831 F. Supp.
2d 988, 1007 (S.D. Tex. 2011) (explaining that there is no Texas cause of action for attempted
wrongful foreclosure because the theory of recovery in a wrongful foreclosure action is the lost
possession of property). Therefore, Northcutt’s wrongful foreclosure claim fails as a matter of law.
D.
Slander of Title
The elements for a slander of title claim in Texas are “(1) the utterings and publishing of
disparaging words; (2) that they were false; (3) that they were malicious; (4) that special damages
were sustained thereby; (5) that the plaintiff possessed an estate or interest in the property
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disparaged; and (6) the loss of a specific sale.” Casey v. Fed. Home Loan Mortg. Ass’n, Civ. No.
H-11-3830, 2012 WL 1425138 at *5 (S.D. Tex. Apr. 23, 2012). Northcutt’s petition recites these
elements except for the last one—the loss of a specific sale. Dkt. 1, Ex. A at ¶¶ 26–27. In Texas,
it is a long standing rule that “[i]n order to recover in a slander of title suit, the plaintiff must allege
the loss of a specific sale.” A. H. Belo Corp. v. Sanders, 632 S.W.2d 145, 146 (Tex. 1982) (quoting
Shell Oil Co. v. Howth, 138 Tex. 357, 159 S.W.2d 483 (1942)). Moreover, as in her claim for
wrongful foreclosure, Northcutt has failed to allege any facts in support of her claim. Accordingly,
her claim for slander of title fails.
E.
Effect of the Home Affordable Modification Program (“HAMP”)
Northcutt argues that CMI’s handling of the foreclosure sale violates the Home Affordable
Modification Program (“HAMP”). Dkt. 1, Ex. A at ¶ 16. As above Northcutt pleads no further facts
on this issue. “Although the Fifth Circuit has yet to rule on the issue, the majority of courts have
held that HAMP does not create a private right of action in a borrower.” Tran v. BAC Home Loans
Servicing, LP, Civ. No. H-10-3514, 2011 WL 5057099, at *2 (S.D. Tex. Oct. 24, 2011) (collecting
cases). See Miller v. Chase Home Fin., LLC, 677 F.3d 1113, 1116 (11th Cir. 2012). Northcutt may
not maintain a cause of action under HAMP. And, the court notes that even if she could, she has
failed to assert any facts in support of her claim. Accordingly, Northcutt’s claims under HAMP fail.
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V. CONCLUSION
Pending before the court is defendants’ motion for summary judgment. Dkt. 10. Upon
review of the motion and the applicable law, the motion is GRANTED.
It is so ORDERED.
Signed at Houston, Texas on June 27, 2013.
___________________________________
Gray H. Miller
United States District Judge
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