Fulcrum Enterprises, LLC v. Bank of America, N.A. et al
Filing
23
MEMORANDUM OPINION AND ORDER granting 16 MOTION for Summary Judgment. (Signed by Judge Sim Lake) Parties notified. (aboyd, 4)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
FULCRUM ENTERPRISES, LLC,
Plaintiff,
v.
BANK OF AMERICA, N.A.,
Successor by Merger to BAC
HOME LOANS SERVICING, LP
f/k/a COUNTRYWIDE HOME LOANS
SERVICING, LPi MORTGAGE
ELECTRONIC REGISTRATION
SYSTEMS, INC.i and FEDERAL
NATIONAL MORTGAGE ASSOCIATION
a/k/a FANNIE MAE,
Defendants.
§
§
§
§
§
§
§
§
§
§
§
§
§
§
§
§
§
CIVIL ACTION NO. H-13-1930
MEMORANDUM OPINION AND ORDER
Plaintiff Fulcrum Enterprises, LLC
action against
defendants
("Fulcrum")
Bank of America,
N .A.,
brought this
successor by
merger to BAC Home Loans Servicing LP f/k/a Countrywide Home Loans
Servicing, LP ("Bank of America"), Mortgage Electronic Registration
Systems, Inc.
("MERS"), and Federal National Mortgage Association
("Fannie Mae")
(collectively "Defendants")
in the 400th Judicial
District Court of Fort Bend County, Texas, where it was filed under
Cause No.
court.
13-DCV-207036.
Defendants removed the action to this
Pending before the court is Defendants' Motion for Summary
Judgment (Docket Entry No. 16).
For the reasons explained below,
Defendants' Motion for Summary Judgment will be granted.
------------
I.
Factual and Procedural Background
On April 10, 2003, Glenn Lewis and Barbara Lewis executed a
Deed
of
Trust
Corporation
note. 1
on
their
("Beazer")
property
on a
to
secure
Beazer
Mortgage
$156,000 purchase money promissory
The Deed of Trust identified Beazer as the Lender and MERS
as "the beneficiary under this Security Instrument" who was "acting
solely
as
assigns.,,2
Brokers
a
nominee
Lender
and
Lender's
successors
and
Beazer assigned the Note and Deed of Trust to American
Conduit
assignment
for
were
the
same
recorded
day.3
The
in
Official
the
Deed
Fort Bend County, Texas, on April 16, 2003. 4
of
Trust
Public
and
Records
the
of
The loan eventually
fell into default in late 2009. 5
lDeed of Trust,
Exhibit 1 to Plaintiff's Response to
Defendants' Motion for Summary Judgment and Memorandum in Support
Thereof ("Response"), Docket Entry No. 19-3, pp. 2-4, 12-13; see
also Note, Exhibit A-1 to Defendants' Motion for Summary Judgment,
Docket Entry No. 16-2.
(Page citations are to the pagination
imprinted at the top of the page by the federal court's electronic
filing system.)
2Deed of Trust, Exhibit 1 to Response, Docket Entry No. 19-3,
p. 2; see also id. at 4.
3Assignment of Lien, Exhibit 2 to Plaintiff's First Amended
Original Complaint Request For a Permanent Injunction and Jury
Demand ("Amended Complaint"), Docket Entry No. 10-2.
4Id. at 3; Deed of Trust, Exhibit 1 to Response, Docket Entry
No. 19-3, p. 15.
5Declaration of Nicole Bensend in Support of Motion for
Summary Judgment, attached to Defendants' Motion for Summary
Judgment, Docket Entry No. 16-1, p. 2 ~ 6. Fulcrum has not argued,
and has produced no evidence to suggest, that the loan did not fall
into default in late 2009.
-2 -
Fulcrum purchased the Lewis's property at a
trustees sale
conducted by the Lake Olympia Civic Association and received a
Trustee's Deed dated June 13,
that the sale was
warranties,
"where-is,
2011. 6
as-is,
The Trustee's Deed stated
with no representations or
taken subject to superior liens,
if any.,,7
Fulcrum
subsequently leased the property to Innocent A. Akani and Ruth C.
Akani on October 2, 2011. 8
The lease was to run from October 17,
2011, to April 30, 2012, and would automatically renew on a month-
to-month basis thereafter. 9
On June 5, 2012, MERS assigned the Note and Deed of Trust to
Bank of America. 10
The assignment was recorded in the Official
Public Records of Fort Bend County, Texas, on June 7, 2012. 11
On
or about March 12, 2013, a notice was posted indicating that the
6Trustee's Deed, Exhibit 3 to Amended Complaint, Docket Entry
No. 10-3.
7Id. at 3.
8Residential Lease, Exhibit 4 to Amended Complaint, Docket
Entry No. 10-4, p. 15.
Fulcrum alleges in its Amended Complaint
and its Response that it leased the property on October 11, 2011.
Amended Complaint, Docket Entry No. 10, p. 8 ~ 26; Response, Docket
Entry No. 19, p. 11 ~ 22.
However, the lease was signed on
October 2, 2011, with a commencement date of October 17, 2011.
Residential Lease, Exhibit 4 to Amended Complaint, Docket Entry
No. 10-4, pp. 2, 15.
The date referenced in Fulcrum's pleadings
does not appear anywhere in the lease attached to the Amended
Complaint. See id. at 2-15.
9Residential Lease,
Entry No. 10-4, p. 2.
Exhibit 4 to Amended Complaint,
Docket
10Assignment of Deed of Trust, Exhibit A- 3 to Defendants'
Motion for Summary Judgment, Docket Entry No. 16-4.
-3-
property would be sold at a substitute trustee's sale on April 2,
2013. 12
On April 2,
$205,953.55. 13
2013,
the property was sold to Fannie Mae for
The Substitute Trustee's Deed identified MERS as the
Original Mortgagee and Bank of America as the Current Mortgagee and
the Mortgage Servicer. 14
On April 29,
2013,
Fannie Mae sent the
Akanis a notice to vacate the property.lS
Fannie
proceedings
Mae
in Justice of
Fort Bend County, Texas.
2013,
initiated
subsequently
the
Peace Court,
forcible
detainer
Precinct No.4,
of
An Eviction Citation was issued on May 7,
commanding the Akanis to appear for trial on May 23, 2013. 16
The Akanis were served with the citation on May 13,
2013. 17
On
12Amended Complaint, Docket Entry No. 10, p. 9 ~ 28; Notice of
Substitute Trustee's Sale, Exhibit 6 to Amended Complaint, Docket
Entry No. 10-6.
13Substitute Trustee's Deed, Exhibit A-4 to Defendants' Motion
for Summary Judgment, Docket Entry No. 16-5.
l4Id.
ISNotice to Vacate,
Entry No. 10-8.
Exhibit 8 to Amended Complaint,
Docket
16Eviction Citation, Exhibit 10 to Amended Complaint, Docket
Entry No. 10-10.
l7Id.
In a letter addressed to Fannie Mae's foreclosure
counsel dated May 22, 2013, Fulcrum's counsel asserted that "[t]he
detainer action.
. scheduled for Thursday May 23, 2013 violates
the Protecting Tenants at Foreclosure Act." May 22, 2013, Letter
from G.P. Matherne to Barrett Daffin Frappier Turner & Engel, LLP,
Exhibit 9 to Amended Complaint, Docket Entry No. 10-9.
Although
the letter does not indicate whether counsel was acting on behalf
(continued ... )
-4-
May 23, 2013, Fannie Mae obtained a Judgment adjudging that it was
"entitled to possession of the premises" and ordering that it "have
restitution, for which let writ issue, of the premises. illS
On June 11,
2013,
Fulcrum brought this action in the 400th
Judicial District Court of Fort Bend County, Texas, where it was
filed under Cause No.
13-DCV-207036. l9
Notice of Removal on July 2, 2013. 20
filed a motion to dismiss. 21
Defendants
filed
their
On July 9, 2013, Defendants
Fulcrum responded on July 29, 2013,
and sought leave to file an amended complaint. 22
In an Order dated
August 13, 2013, the court granted Fulcrum's motion for leave to
file an amended complaint. 23
On September 6, 2013, Fulcrum filed
17 ( ... continued)
of Fulcrum or the Akanis, the Amended Complaint states that counsel
sent the letter on behalf of Fulcrum.
Amended Complaint, Docket
Entry No. 10, p. 10 ~ 32. Fulcrum also states that it attempted to
provide the letter via facsimile but was unable to do so.
Id.
l8Judgment, Exhibit A- 5 to
Judgment, Docket Entry No. 16-6.
Defendants'
Motion
for
Summary
19P1aintiff's Original Petition for Declaratory Judgment,
Application for Temporary Restraining Order & Request
for
Disclosure, Exhibit A to Defendants' Notice of Removal, Docket
Entry No. 1-1, p. 5.
20Defendants' Notice of Removal, Docket Entry NO.1.
2lDefendants' Motion to Dismiss, Docket Entry No.3.
22Plaintiff's Response to Defendants' Motion to Dismiss
Including Its Brief in Support Thereof and Motion for Leave to File
an Amended Complaint, Docket Entry NO.7.
230rder, Docket Entry No.9.
-5-
its
Amended
Complaint. 24
Defendants
filed
an
answer
on
September 23, 2013. 25
Defendants filed the pending Motion for Summary Judgment on
December 23, 2013. 26
On February 21, 2014, noting that Fulcrum had
not filed a response, the court entered an Order requiring Fulcrum
to respond to the pending motion by March 10, 2014.27
its Response on March 10, 2014. 28
Fulcrum filed
Defendants filed their reply on
March 21, 2014. 29
II.
Standard of Review
Summary judgment is appropriate if the movant establishes that
there is no genuine dispute about any material fact and the movant
is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56(a).
Disputes about material facts are genuine Uif the evidence is such
that a reasonable jury could return a verdict for the nonmoving
party.
II
(1986) .
Anderson v. Liberty Lobby,
Inc.,
106 S.
Ct.
2505,
2510
The moving party is entitled to judgment as a matter of
law if Uthe nonmoving party has failed to make a sufficient showing
24Amended Complaint, Docket Entry No. 10.
25Defendants' Answer to Plaintiff's Amended Complaint, Docket
Entry No. 11.
26Defendants' Motion for Summary Judgment, Docket Entry No. 16.
270rder, Docket Entry No. 17.
28Response, Docket Entry No. 19.
29Defendants' Reply to Plaintiff's Summary Judgment Response
( UReply"), Docket Entry No. 20.
-6-
on an essential element of her case with respect to which she has
the burden of proof."
2552
Celotex Corp. v. Catrett, 106 S. Ct. 2548,
(1986).
A party moving for summary judgment "must
'demonstrate the
absence of a genuine issue of material fact,' but need not negate
the elements of the nonmovant' s case."
37 F.3d 1069, 1075 (5th Cir. 1994)
Little v. Liquid Air Corp. ,
(en banc)
(per curiam)
(quoting
"If the moving party fails to meet
Celotex, 106 S. Ct. at 2553).
this initial burden, the motion must be denied, regardless of the
nonmovant's response."
this burden,
Id.
If, however,
the moving party meets
"the nonmovant must go beyond the pleadings"
and
produce evidence that specific facts exist over which there is a
genuine
2553-54)
issue
for
trial.
Id.
(citing Celotex,
106
S.
Ct.
at
The nonmovant "must do more than simply show that there
is some metaphysical doubt as to the material facts."
Matsushita
Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 106 S. Ct. 1348, 1356
(1986) .
In reviewing the evidence "the court must draw all reasonable
inferences in favor of the nonmoving party,
credibility determinations
or weigh
Sanderson Plumbing Prods.,
Inc.,
the
120 S.
and it may not make
evidence."
Ct.
2097,
Reeves v.
2110
(2000).
Factual controversies are to be resolved in favor of the nonmovant,
"but only when there is an actual controversy, that is, when both
parties have submitted evidence of contradictory facts."
37 F.3d at 1075.
-7-
Little,
III.
Analysis
In addition to seeking declaratory and injunctive relief,
Fulcrum alleges four causes of action in its Amended Complaint:
(1) wrongful foreclosure,
(2) violations of
Civil Practice and Remedies Code,
§
12.002 of the Texas
(3) violations of the Protecting
Tenants at Foreclosure Act ("PTFA"), and (4) quiet title. 30
A.
Fulcrum's Claim for Wrongful Foreclosure
"Texas
law requires
foreclosure
claim
foreclosure
sale proceedings,
price
(3)
l
and
a
show
that
that
a
there
(2)
2013)
(1)
a
defect
wrongful
"contractual
the
Waltner v. Aurora Loan Servs. ,
12-50929, 2013 WL 6858124
(5thCir. 2013)).
for
In
a grossly inadequate selling
at *6
1
(5th Cir. Dec. 31,
(citing Miller v. BAC Horne Loans Servicing, L.P.,
717,726
claim
was
wrongful
causal connection between the defect and the
grossly inadequate selling price."
L.L.C., No.
plaintiff bringing a
Fulcrum argues that it may assert a
foreclosure
standing"
by
726 F.3d
the
on
the
party
basis
of
a
lack
of
seeking
to
foreclose. 31
Although Fulcrum acknowledges that under Texas Law MERS may "serve
as an agent and nominee for lenders so that it
[can] oversee and
conduct foreclosures,,,32 it argues that MERS lacked authority to
30Amended Complaint, Docket Entry No. 10, pp. 17-33
31Id. at 17
~
49.
32Id. at 21
~
58.
-8-
~~
47-76.
assign
the
Note
Specifically,
and
Deed
of
Trust
to
Bank
of
America. 33
Fulcrum argues that "there are no situations that
would allow a reasonable deduction that because MERS may have been
Beazer/American Brokers Conduit's nominee, Beazer/American Broker's
Conduit ipso facto had agreed that MERS has a contractual right to
assign its interest in the Lewis Deed of Trust and Note to [Bank of
America] . ,,34
The record contradicts Fulcrum's argument.
The Deed of Trust
specifically states under the heading "TRANSFER OF RIGHTS IN THE
PROPERTY" that" [t] he beneficiary under this Security Instrument is
MERS
(solely as nominee for Lender and Lender's successors and
assigns) and the successors and assigns of MERS.,,35
of Trust,
by acknowledging that MERS may have
Thus, the Deed
"successors and
assigns," implicitly recognizes the authority of MERS to assign its
interests to another party.
Moreover, "'Texas recognizes assign-
ment of mortgages through MERS and its equivalents as valid and
enforceable.'"
No.
13-40061,
Singha
v.
BAC
2014 WL 1492301,
at
Home
*2
Loans
Servicing,
(5th Cir.
Apr.
17,
L.P.,
2014)
(quoting Martins v. BAC Home Loans Servicing, L.P., 722 F.3d 249,
253 (5thCir. 2013)).
33Id. at 22-23 ~~ 59-62.
34Id. at 23 ~ 61.
35Deed of Trust, Exhibit 1 to Response, Docket Entry No. 19-3,
p. 4.
-9-
The Deed of Trust further states that MERS holds "legal title
to the interests granted by Borrower in this Security Instrument"
and that "MERS (as nominee for Lender and Lender's successors and
assigns) has the right:
to exercise any or all of those interests,
including, but not limited to, the right to foreclose and sell the
MERS
Property." 36
America. 37
Cf. id.
deed of trust.
validly
assigned
these
rights
to
Bank
of
("Here, MERS was an original beneficiary of the
MERS,
then, had the right to and did assign its
interest in that instrument to BAC."); Fowler v. U.S. Bank, Nat.
Ass'n, No. H-13-3241,
2014 WL 850527, at *15
(S.D. Tex. Mar.
4,
2014) .
In
addition,
for
opinions of this court,
the
reasons
explained
in
several
prior
Fulcrum lacks standing to challenge the
validity of the assignment based on the assignor's alleged lack of
authority.38
2014
WL
See Van Duzer v. U.S. Bank Nat. Ass'n, No. H-13-1398,
357878,
at
*8
countrywide Home Loans,
(S.D.
No.
Tex.
Jan.
H-13-0282,
31,
2014);
Felder v.
2013 WL 6805843,
at *18
36Id.
37Assignment of Deed of Trust, Exhibit A- 3 to Defendants'
Motion for Summary Judgment, Docket Entry No. 16-4.
38Fulcrum attempts to avoid the reasoning of these opinions and
establish standing by arguing that MERS' alleged lack of authority
renders the assignment void rather than voidable.
This argument
has no merit.
See Jimenez v. Deutsche Bank Nat. Trust Co.,
No. 13-50403, 2014 WL 241893, at *1 (5th Cir. Jan. 23, 2014)
(rejecting the argument that a homeowner has standing to challenge
an allegedly forged assignment executed by an unauthorized agent) ;
see also Singha, 2014 WL 1492301, at *3; Golden, 2014 WL 64459,
at *2; Reinagel, 735 F.3d at 227.
-10-
(S.D. Tex. Dec. 20, 2013); Morlock, L.L.C. v. JPMorgan Chase Bank,
N.A., No. H-13-0734, 2013 WL 5781240, at *13
2013);
(S.D. Tex. Oct. 25,
see also Golden v. Wells Fargo Bank, N.A., No.
2014 WL 644549, at *2 (5th Cir. Feb. 20, 2014)
facially
valid
assignments
cannot
be
("[U]nder Texas law,
challenged
authority except by the defrauded assignor."
13-50158,
by
want
of
(quoting Reinagel v.
Deutsche Bank Nat'l Trust Co., 735 F.3d 220,228 (5th Cir. 2013))).
The summary judgment evidence before the court
includes a
facially valid assignment 39 under which "the transfer is presumptively valid and contradicting evidence 'must be clear, cogent, and
convincing beyond reasonable controversy.'"
Morlock, L.L.C. v. JP
Morgan Chase Bank, N.A., No. 12-20623, 2013 WL 2422778, at *2 (5th
Cir.
June 4,
2013)
(quoting Ruiz v.
Stewart Mineral Corp.,
202
S.W.3d 242, 248 (Tex. App.-Tyler 2006, pet. denied)).
Fulcrum has
failed
meets
to
standard.
produce
Nor has
any
contradictory
evidence
that
Fulcrum produced any evidence of a
inadequate selling price. 40
this
grossly
The court therefore concludes that
39Assignment of Deed of Trust, Exhibit A- 3 to Defendants'
Motion for Summary Judgment, Docket Entry No. 16-4.
4°Defendants have produced a printed report from the Fort Bend
Central Appraisal District's website showing the appraised value of
the property at $180,820.
Fort Bend Appraisal District Property
Detail Sheet, Exhibit B to Notice of Removal, Docket Entry No. 1-3,
p. 2.
The property was sold to Fannie Mae for $205,953.55.
Substitute Trustee's Deed, Exhibit 7 to Amended Complaint, Docket
Entry No. 10-7. This was not grossly inadequate. Cf. Martins, 722
F.3d at 256; Water Dynamics, Ltd. v. HSBC Bank USA, Nat'l Ass'n,
509 F. App'x 367, 369 (5th Cir. 2013).
-11-
Defendants are entitled to judgment as a matter of law on Fulcrum's
claim for wrongful foreclosure.
B.
Fulcrum's Claims Under § 12.002 of the Texas Civil Practice
and Remedies Code
A claim under Section 12.002(a) has three elements:
[T]he defendant (1) made, presented, or used a document
with knowledge that it was a fraudulent lien or claim
against real or personal property or an interest in real
or personal property, (2) intended that the document be
given legal effect, and (3) intended to cause the
plaintiff physical injury, financial injury, or mental
anguish.
Golden, 2014 WL 644549, at *3 (quoting Henning v. OneWest Bank FSB,
405 S.W.3d 950,
964
(Tex. App.-Dallas 2013,
quotation marks omitted).
America violated
Code by
§
no pet.))
(internal
Fulcrum argues that MERS and Bank of
12.002 of the Texas Civil Practice and Remedies
"making [,]
presenting [,]
or using a
document
or other
record with knowledge that the document or other record is
[a]
fraudulent court record or a fraudulent lien or claim against real
property or an interest in real property.H4I
The documents that
Fulcrum alleges to be fraudulent are the Deed of Trust and the
Assignment to Bank of America. 42
Fulcrum's claim as to the Assignment rests on the allegation
that MERS lacked authority to execute the Assignment.
4IAmended Complaint, Docket Entry No.
~
10, p. 24
As explained
~
64,
p. 27
65.
42Id.
pp. 31-33
at
~~
24-28
74-78.
~~
64-65;
Response,
-12-
Docket
Entry
No.
19,
above, MERS had authority under the Deed of Trust to execute the
Assignment, Fulcrum lacks standing to challenge the Assignment on
the basis of any alleged lack of authority, and Fulcrum has failed
to
produce
any
evidence
Accordingly, Fulcrum's
must fail.
§
impugning
the
Assignment's
12.002(a) claims regarding the Assignment
See Johnlewis v. u.S. Bank, Nat. Ass'n, No. H-12-3360,
2013 WL 5304050, at *5 (S.D. Tex. Sept. 20, 2013)
claim under
12.002(a) based
§
~on
Bank,
(quoting Tex. R. Civ. P.
N.A.,
No.
Jan. 28, 2013)
G-11-0243,
(holding that a
the allegation that MERS lacked
authori ty to execute the Assignment"
fact'"
validity.
had
91a.1))
2013
WL
~
\ no basis
in law or
Vickery v. Wells Fargo
i
321662,
at
*9
(S.D.
Tex.
(holding that because the plaintiff lacked standing
to challenge the relevant assignment,
law, maintain a claim for violations of
Practice and Remedies Code")
i
~she
§
cannot, as a matter of
12.002 of the Texas Civil
Williams v. Bank of New York Mellon
Trust Co., N.A., No. H-11-03139, 2012 WL 1425127, at *3 (S.D. Tex.
Apr. 24, 2012)
(holding that a plaintiff' s
~conclusory
of fraud under section 12.002 of the Texas Civil
allegation
Practice and
Remedies Code" failed to state a claim when based on an assignment
that
~was
notarized, filed,
and recorded in the Fort Bend County
Clerk's office, bear [ing] no indicia of fraud").
Fulcrum has likewise failed to present any evidence to impugn
the validity of the Deed of Trust.
Registration Sys.,
(S.D.
Tex.
June
Inc.,
30,
Cf. Kiggundu v. Mortgage Elec.
No.4: 11-1068,
2011)
(~Defendants
-13-
2011 WL 2606359,
have presented
at *7
summary
judgment evidence that the Note and Deed of Trust on the subject
property
are
valid,
and
Plaintiff
Defendants
F. App'x 330
on
presented
no
competent
Summary judgment therefore is granted
evidence to the contrary.
for
has
Plaintiff's
(5th Cir. 2012).
§
12.002
claim."),
aff'd,
469
Moreover, with regard to both the
Assignment and the Deed of Trust Fulcrum has failed to present any
evidence that Defendants intended to cause it any injury.
Golden, 2014 WL 644549, at *3
facts
showing
foreclosure,
that
their
("[Plaintiffs]
property
have not alleged any
would
even absent the assignment
Cf.
not
be
subject
Therefore,
.
to
they
have failed to state a claim under Section 12.002.").
Fulcrum relies heavily on the
reasoning
-=-T-=e:=..x=-::a:::.:s"-----"v.....:.'--_M:...:.=E:.::.R=S::....:C:::..;O=R=P_-'H=o=l-=d=i=n:..;;g~s"'_L.'_-,I~n=c=....=.... ,
WL
3353948
(S.D.
Tex.
July
3,
to
County,
2:12-CV-00131,
No.
2013),
in Nueces
argue
that
a
2013
genuine
dispute of material fact exists regarding the issue of whether the
identification
constitutes
However,
the
a
of
MERS
false
court
as
"beneficiary"
representation
in
Nueces
for
County
in
the
purposes
expre$sly
Deed
of
of
12.002.43
§
found
Trust
that
the
plaintiffs in that case had adequately established the intent-toharm element of a cause of action under § 12.002.
Fulcrum has failed to do so here. 44
43See
~~ 39-63;
Accordingly,
See id. at *8-9.
Defendants are
Amended Complaint, Docket Entry No. 10, pp. 12 -24
Response, Docket Entry No. 19, pp. 22-33 ~~ 56-78.
44Fulcrum argues that Defendants have not produced any evidence
"that negates the existence of a material element of [Fulcrum's]
(continued ... )
-14-
entitled to judgment as a matter of law on Fulcrum's claims under
§
C.
12.002 of the Texas Civil Practice and Remedies Code.
Fulcrum's Claims Under the PTFA
It is unclear from Fulcrum's Response whether it has abandoned
its claims under the PTFA.45
Act of 2009,
See Protecting Tenants at Foreclosure
Pub. L. No. 111-22,
(codified as amended at 12 U.S.C.
§
§
702,123 Stat. 1632,1660-61
5220 note).
Nevertheless, the
court concludes that this claim fails as a matter of law because
the PTFA does not provide Fulcrum with a private right of action.
See Mik v. Fed. Nat'l Mortg. Corp., 743 F.3d 149, 157-60 (6th Cir.
2014); Bey v. PEF Capital Properties, LLC, No. 3:12-CV-2371-L, 2013
WL 2094100,
N.A., No.
at *2 (N.D. Tex. May 15, 2013); Smith v. Bank of Am.,
2:11CV120-MPM-JMV,
2012 WL 4320845,
at *9
(N.D.
Miss.
44 ( ... continued)
claims."
Response, Docket Entry No. 19, pp. 6-7 , 7.
However,
while Defendants "must 'demonstrate the absence of a genuine issue
of material fact,'" they "need not negate the elements of the
nonmovant's case." Little, 37 F.3d at 1075 (quoting Celotex, 106
S. Ct. at 2553).
Fulcrum also argues that "no summary judgment
evidence was submitted by Defendants."
Response, Docket Entry
No. 19, pp. 6-7 , 7; see also id. at 33 , 78.
On the contrary,
Defendants have produced competent summary judgment evidence in
addition to citing relevant evidence already contained in the
record. See Declaration of Nicole Bensend in Support of Motion for
Summary Judgment, attached to Defendants' Motion for Summary
Judgment, Docket Entry No. 16-1, p. 1 , 4; Exhibits A-C to
Defendants' Motion for Summary Judgment, Docket Entry Nos. 16-2 to
16-8.
Not only has Fulcrum failed to impugn the authenticity of
any evidence produced by Defendants, much of the evidence produced
is also attached to Fulcrum's Amended Complaint. See Exhibits 1-10
to Amended Complaint, Docket Entry Nos. 10-1 to 10-10.
45See Response, Docket Entry No. 19, p. 34 , 79.
-15-
Sept.
No.
20,
2012)
i
10-CV-1646 BEN
Oct.
I,
2010)
Zalemba
(BLM),
Patriot
i
WL 5105755, at *1
v.
HSBC
Bank,
USA,
2010 WL 3894577,
Bank
v.
Monroe,
(E.D. Tex. Oct. 27,
2011)
at
No.
i
Nat.
*1-4
Ass'n.,
(S.D.
Cal.
4:11CV626,
2011
Nativi v. Deutsche
Bank Nat. Trust Co., No. 09-06096-PVT, 2010 WL 2179885, at *4 (N.D.
Cal. May 26, 2010).
The proper forum to invoke the PTFA would have
been in the state court forcible detainer proceedings as a defense
to eviction. 46
See Mik, 743 F.3d at 165-66i Blue Mountain Homes,
LCC v. Short, No. 2:13-CV-0913-TLN-KJN, 2013 WL 1966224, at *2-3
(E .D.
Cal.
May
10,
2013)i
Wells
Fargo
Bank
v.
Lapeen,
46Fulcrum contends in its Amended Complaint that "Fannie Mae
wrongfully evicted [its] Tenant thereby causing [it] to lose
revenue."
Amended Complaint, Docket Entry No. 10, p. 2 ~ 4.
Violations of the PTFA can be used to support a claim for wrongful
eviction. See Mik, 743 F.3d at 167-68. However, Fulcrum has not
produced any evidence to suggest that it, rather than Fannie Mae,
was entitled to receive any payments under the lease after Fannie
Mae purchased the property at a valid foreclosure sale.
See
Ezennia v. Wells Fargo Bank, N.A., No. H-10-5004, 2012 WL 1556170,
at *8 (S.D. Tex. Apr. 27, 2012) (identifying the elements of a
wrongful eviction action under Texas law) i Nativi v. Deutsche Bank
Nat'l Trust Co., 167 Cal. Rptr. 3d 173, 193 (Cal. Ct. App. 6th
Dist. 2014) ("[A] subordinate bona fide lease survives foreclosure
for the remainder of the term by operation of the [PTFA] regardless
of the state law to the contrary and, consequently, the bona fide
tenants under that lease and the immediate successor in interest in
the foreclosed property have a landlord-tenant relationship,
al though the lease may be terminated as provided in the Act. ") i cf.
Ford v. Cent. Loan Admin., No. 11-0017-WS-C, 2011 WL 4702912, at
n.12 (S.D. Ala. Oct. 5, 2011) (concluding that an allegation of
wrongful eviction under the PTFA did not support a landlord's
negligence claim against its successor in interest because such a
"contention does not show how [the successor in interest] breached
any duty owed to [the landlord] (as opposed to her tenants, who are
not named plaintiffs)"). Accordingly, to the extent that Fulcrum
has attempted to allege a cause of action for wrongful eviction,
Defendants are entitled to judgment on such claim as a matter of
law.
-16-
No.
C-11-01932-LB,
2011) i
WL
2011 WL 2194117,
at *2-4
Wescom Credit union v. Dudley, No.
4916578,
at
*2
(C.D.
Cal.
Nov.
22,
(N.D.
Cal.
June 6,
10-8203-GAF-SSX,
2010).
2010
Accordingly,
Defendants are entitled to judgment as a matter of law on Fulcrum's
PTFA claims.
D.
Fulcrum's Quiet-Title
Cla~
Fulcrum's quiet-title claim is based on its contention that
the Deed of Trust and subsequent Assignment to Bank of America are
invalid. 47 The court has addressed nearly identical quiet-title
claims in several prior opinions.
See Fowler,
2014 WL 850527,
47Fulcrum also alleges a defect in the foreclosure sale
proceedings by suggesting that Fannie Mae, rather than Bank of
America, was the seller as well as the buyer at the foreclosure
sale. Response, Docket Entry No. 19, pp. 12-13 n.5. Fulcrum has
produced no evidence to support its allegation and acknowledges
that there is no evidence before the court or "in the public
record" that would support it. Id. Fulcrum states that "[g]iven
the court's permission, [it] would like to [support its allegation]
through discovery."
Id.
However,
Fulcrum has had ample
opportunity to conduct discovery both before and after the filing
of Defendants' Motion for Summary Judgment.
The evidence before
the court forecloses any inference in support of Fulcrum's
allegations. Cf. Banks v. Bank of Am., N.A., No. A-13-CA-426-SS,
2014 WL 1342860, at *2 (W.D. Tex. Apr. 3, 2014) ("To the extent
[Plaintiff] challenges the authenticity of the attached copy of the
Note,
he offers nothing other than attorney argument and
speculation to support his claims.
As the Fifth Circuit has
explained, \ [i]n Texas, existence of a note may be established by
[a] photocopy of the promissory note, attached to an affidavit in
which the affiant swears that the photocopy is a true and correct
copy of the original note.'" (quoting Martins, 722 F.3d at 254)).
The court therefore concludes that Fulcrum has failed to establish
a genuine issue of material fact with regard to its allegation that
"the owner of the note at the time of the foreclosure sale was
Fannie Mae and not [Bank of America]."
Response, Docket Entry
No. 19, pp. 12-13 n.5.
-17-
at
*12-13;
Van Duzer,
2014 WL 357878,
at
*13-14;
Felder,
2013
WL 6805843, at *20-21; Morlock, 2013 WL 5781240, at *10-11.
For
the reasons explained in those prior opinions, the court concludes
that Defendants are entitled to judgment as a matter of law on
Fulcrum s quiet-title claim. 48
l
IV.
Conclusions and Order
For the reasons explained above,
the court concludes that
Fulcrum has failed to establish a genuine issue of material fact
for trial with regard to any of its alleged claims for relief.
The
court therefore concludes that, even when drawing all reasonable
inferences in favor of Fulcrum, Defendants are entitled to judgment
as a
matter of
Defendants
I
law on all of Fulcrum's claims.
Motion for Summary Judgment
Accordingly,
(Docket Entry No. 16) is
GRANTED.
SIGNED at Houston, Texas, on this 25th day of April, 2014.
7
SIM LAKE
UNITED STATES DISTRICT JUDGE
48Because the court has concluded that Defendants are entitled
to judgment as a matter of law on all of Fulcrum's substantive
causes of action, no basis remains for the declaratory and
injunctive relief requested in the Amended Complaint. See Morlock,
2013 WL 5781240, at *10-14; Morlock, L.L.C. v. JP Morgan Chase
Bank, N.A., No. H-12-1448, 2012 WL 3187918, at *7 (S.D. Tex.
Aug. 2, 2012), aff'd, No. 12-20623, 2013 WL 2422778 (5th Cir.
June 4, 2013).
Defendants are therefore entitled to summary
judgment on Fulcrum's claims for declaratory and injunctive relief.
-18-
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