LWL Construction, LLC v. Countrywide Home Loans, Inc. et al
MEMORANDUM OPINION AND ORDER denying 33 MOTION for Summary Judgment (Signed by Judge Sim Lake) Parties notified. (aboyd, 4)
United States District Court
Southern District of Texas
July 31, 2017
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
LWL CONSTRUCTION, LLC d/b/a
THE LESTER GROUP,
COUNTRYWIDE HOME LOANS, INC.
and DITECH FINANCIAL LLC,
David J. Bradley, Clerk
CIVIL ACTION NO. H-15-3379
MEMORANDUM OPINION AND ORDER
Pending before the court is Plaintiff's Motion for Summary
reasons explained below, the motion for summary judgment will be
This action concerns the validity of a lien on real property
located in Brazos County, Texas.
On September 10, 2015, plaintiff,
LWL Construction, LLC d/b/a The Lester Group ("LWL") purchased a
The Property is
subject to a Deed of Trust (the "Lien") signed by Michael Baker and
Yvonne Baker (the "Borrowers") on March 26, 2004, securing payment
of a note (the "Note") originally given to Spectrum Lending, Inc.
sent a Notice of Acceleration to the Borrowers
Rescission of Acceleration of Loan Maturity in Brazos County. 2
Countrywide then sent to the Borrowers four separate notices of
default requesting payments of amounts less than the full amount
due on the
Note . 3
stated an amount
"reinstate the loan" and to "cure the default." 4
Each notice also
stated that payments "will be" accelerated if the default were not
cured by the date provided. 5
The Borrowers entered into a Loan
Modification Agreement with Countrywide on July 22, 2007. 6
Brazos County/ Texas/ on October 13
seeking a declaratory
judgment that the Lien is invalid and unenforceable.
Ditech Financial LLC ("Ditech") timely removed the action to this
LWL, arguing that the limitations period for enforcement of
Plaintiff Exhibit C,
Entry No. 33-1 pp. 19-21.
attached to Plaintiff's MSJ
Exhibit A-1 to Defendants' Response and Brief in Opposition
Response"), Docket Entry No. 36-1 pp. 3-4.
Exhibi ts A- 2 through A- 5
Entry No. 36-1, pp. 5-12.
Defendants' Exhibit A-6 attached to Defendants/
Docket Entry No. 36-1, pp. 13-14.
the Lien has run, moves for summary judgment on the issue of the
validity of the Lien.
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).
"The movant accomplishes this by informing the court of the basis
for its motion,
and by identifying portions of the record which
highlight the absence of genuine factual
Ehrman, 954 F.2d 1125, 1131 (5th Cir. 1992)
(citing Fed. R. Civ. P.
56 (c)) .
"In order to avoid summary judgment, the nonmovant must
identify specific facts within the record that demonstrate the
existence of a genuine issue of material fact."
Inc. v. TXU
Mining Company, L.P., 565 F.3d 268, 273 (5th Cir. 2009).
In reviewing the evidence "the court must draw all reasonable
inferences in favor of the nonmoving party,
or weigh the
Sanderson Plumbing Products,
and it may not make
Inc., 120 S. Ct. 2097,
The court resolves factual controversies in favor of the nonmovant,
"but only when there is an actual controversy, that is, when both
parties have submitted evidence of contradictory facts."
Hugh Symons Group, plc v. Motorola, Inc., 292 F.3d 466,
(5th Cir. 2002)
(citing Celotex Corp. v. Catrett, 106 S. Ct.
And "[m] ere conclusory allegations are not
competent summary judgment evidence."
Id. (citing Eason v. Thaler,
73 F.3d 1322, 1325 (5th Cir. 1996)).
LWL's Motion for Summary Judgment
Nature of the Suit
declaratory judgment that "Defendants' Claim of Lien is invalid and
In its Motion for Summary Judgment, LWL refers to
its claim for "declaratory relief on its suit to quiet title and
for declaratory judgment from the Court that Defendants' Claim of
Lien is invalid and unenforceable." 8
LWL also cites in its motion
Based upon LWL' s
allegations, the court concludes that the nature of this action is
a suit to quiet title.
litigant's request for declaratory
relief does not alter a suit's underlying nature."
City of El Paso
v. Heinrich, 284 S.W.3d 366, 370 (Tex. 2009).
"The elements of the cause of action to quiet title are that
the plaintiff must show (1)
an interest in a specific property,
Exhibit B-1 to Notice of Removal, Docket Entry No. 1-2, p. 3.
Plaintiff's MSJ, Docket Entry No. 33, p. 2.
Id. at 3-4.
(2) title to the property is affected by a claim by the defendant,
Vernon v. Perrien, 390 S.W.3d 47,
Because LWL's motion focuses on the
third element, the court will direct its analysis to the validity
of the Lien.
"A person must bring suit for the recovery of real property
under a real property lien or the foreclosure of a real property
lien not later than four years after the day the cause of action
expiration of the four-year limitations period, the real property
lien and a power of sale to enforce the real property lien become
The limitations period for a note
actually exercises its option to accelerate."
God in Christ v. Wolf,
44 S.W.3d 562,
Holy Cross Church of
2001); see also
Seigel v. U.S. Bank National Association, 218 F. Supp. 3d 541, 545
(S.D. Tex. 2 016) .
The acceleration of a note can be abandoned "by agreement or
Association, 807 F.3d 99, 104 (5th Cir. 2015)
3 71 S. W. 3d 34 7,
(citing Khan v. GBAK
"Abandonment of acceleration has the
thereby "restoring the note's original maturity date" for purposes
Rescission or waiver of acceleration is effective if made by a
written notice of a rescission or waiver served as provided in
16.038(c) by the lienholder,
the servicer of the debt,
lienholder on each debtor.
But Section 16.038 "does not create an exclusive
A lender may unilaterally abandon acceleration of a
note "by sending notice to the borrower that the lender is no
longer seeking to collect the full balance of the loan and will
permit the borrower to cure its default by providing sufficient
Boren, 807 F.3d at 105.
LWL argues that the Lien is invalid and unenforceable because
Defendants did not serve a writ ten notice of rescission or
Defendants respond that the acceleration was rescinded,
evidenced by the
by the notices
Countrywide sent to the Borrowers seeking payments of less than the
The Fifth Circuit's holding in Boren is directly applicable to
borrowers' note but then sent notice to the borrowers that they
could cure their default by paying a specified amount to bring the
Id. at 105-06.
The notice also stated that the bank
to pay the
acceleration and provided the Berens with an opportunity to avoid
foreclosure if they cured their arrearage,"
thus resetting the
Id. at 106.
Countrywide's notices expressly (1) allowed the Borrowers to
outstanding balance of the loan and (2) warned them that the note
would be accelerated if
the default by a
concludes that the
material fact as to whether the acceleration was abandoned within
the limitations period and, therefore, whether the Lien is valid.
LWL has therefore failed to establish that there is no genuine
dispute about any material fact.
Because the notices of default are sufficient to raise a
genuine issue of material fact as to the validity of the Lien, the
court does not reach Defendants' other arguments.
Conclusion and Order
For the reasons stated above, the court concludes that LWL has
failed to show that it is entitled to judgment as a matter of law
on its quiet title claim.
Plaintiff's Motion for
Summary Judgment (Docket Entry No. 33) is DENIED.
SIGNED at Houston, Texas, on this the 31st day of July, 2017.
UNITED STATES DISTRICT JUDGE
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