Ouzenne et al v. Deutsche Bank National Trust Company, as Trustee for Soundview Home Loan Trust 2006-3, Asset-Based Certificates, Series 2006-3
MEMORANDUM OPINION AND ORDER DENYING 11 MOTION to Remand, DENYING 16 Response/Motion for continuance and for oral hearing, GRANTING 15 MOTION for Summary Judgment and Brief in Support.(Signed by Judge Gray H Miller) Parties notified.(rkonieczny, 4)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
PAUL J. OUZENNE, et al,
DEUTSCHE BANK NATIONAL TRUST COMPANY, §
AS TRUSTEE FOR SOUNDVIEW HOME LOAN
TRUST 2006-3, ASSET-BACKED CERTIFICATES, §
CIVIL ACTION H-16-2563
MEMORANDUM OPINION AND ORDER
Pending before the court are (1) plaintiffs Paul J. Ouzenne and Patricia A. Ouzenne’s motion
for remand (Dkt. 11), and (2) defendant Deutsche Bank National Trust Company, as Trustee for
Soundview Home Loan Trust 2006-3’s (“Deutsche Bank”) motion for summary judgment (Dkt. 15).
The Ouzennes also filed (3) a motion for a continuance, (4) a request for an oral hearing, (5)
objections to Deutsche Bank’s summary judgment evidence (Dkt. 16), and (6) an objection to
Deutsche Bank’s brief against remand (Dkt. 20 at 4).
The court has considered the motions, responses, objections, evidentiary record, and
applicable law. The court finds that the Ouzennes’ objection to Deutsche Bank’s brief against
remand (Dkt. 20 at 4) is MOOT, and that their motion for remand (Dkt. 11) should be DENIED. The
court also finds that the Ouzennes’ motion for continuance (Dkt. 16) should be DENIED, their
request for an oral hearing (Dkt. 16) should be DENIED, and their objections to Deutsche Bank’s
summary judgment evidence (Dkt. 16) should be OVERRULED. Finally, Deutsche Bank’s motion
for summary judgment (Dkt. 15) should be GRANTED.
This is a dispute over real property located at 3933 King Street, Houston, Texas, 77026 (the
“Property”). Dkt. 15. On January 26, 2006, the Ouzennes obtained a home equity loan from Centex
Home Equity Company LLC (“Centex”). Dkt. 15, Ex. A-1. The Ouzennes signed a Texas Home
Equity Adjustable Rate Note with an original principal amount of $145,600.00, that granted Centex
a security interest in the Property. Dkt. 15, Exs. A-1, C. On January 11, 2012, Centex assigned the
note and the security interest to Deutsche Bank. Dkt. 15, Ex. D. Wells Fargo Bank, N.A. (“Wells
Fargo”) doing business as America’s Servicing Company (“ASC”) is the mortgage servicer. Dkt.
15, Ex. A.
In October 2011, the Ouzennes failed to make their payment and subsequently defaulted on
the mortgage. Dkt. 15, Ex. A-2. On May 22, 2012, ASC sent the Ouzennes a notice of default
(“2012 Notice of Default”) specifying the amount to cure the default and stating that to avoid
acceleration, the amount needed to be paid before June 25, 2012. Dkt. 15, Ex. A-3. On September
19, 2012, Deutsche Bank sent the Ouzennes a notice of acceleration because the Ouzennes failed to
cure their default. Dkt. 15, Ex. B-1. On December 16, 2014, Deutsche Bank subsequently sent the
Ouzennes a second notice of default and intent to accelerate. Dkt. 15, Ex. B-2 (“2014 Notice of
The Ouzennes failed to cure the default. Dkt. 15, Ex. E. On March 18, 2016, Deutsche Bank
filed a Rule 736 Application for foreclosure in the 164th Judicial District Court of Harris County,
Texas. Id. (citing Tex. R. Civ. P. 736). On June 24, 2016, the Ouzennes filed their original petition
in the 234th Judicial District Court of Harris County, Texas, seeking an injunction and declaratory
judgment to prevent Deutsche Bank from foreclosing. Dkt. 1, Ex. D-1. The Ouzennes argued that
Deutsche Bank is not the holder of the note, and that the statute of limitations and res judicata
preclude recovery and bar foreclosure. On July 20, 2016, the action was transferred to the 164th
Judicial District Court of Harris County, Texas. Dkt. 1.
On August 22, 2016, Deutsche Bank removed the case to federal court. Dkt. 1. On
September 21, 2016, the Ouzennes filed a motion to remand. Dkt. 11. Deutsche Bank filed its
response. Dkt. 14. On December 20, 2016, Deutsche Bank filed a motion for summary judgment.
Dkt. 15. On January 10, 2017, the Ouzennes filed their response, a motion for continuance, and a
request for oral hearing. Dkt. 16. Pursuant to the court’s January 23, 2017 order requesting the
parties file any supplemental briefing on the question of diversity jurisdiction (Dkt. 17), each party
filed a supplemental brief. See Dkt. 19 (Deutsche Bank Suppl. Br.); Dkt. 20 (Ouzennes’ Suppl. Br.).
In objection to the selected portions of the Pooling and Servicing Agreement (“PSA”) that
Deutsche Bank cited to in its brief, the Ouzennes requested Deutsche Bank produce the entire PSA.
Dkt. 20 at 4. Following the court’s February 14, 2017 order to produce the PSA, Deutsche Bank
filed the full text of the trust’s PSA. Dkt. 23, Ex. A.
The court will first address the Ouzennes’ motion for remand, then Deutsche Bank’s motion
for summary judgment and the Ouzennes’ objections.
II. MOTION FOR REMAND
A party may remove to federal court “any civil action brought in a State court of which the
district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441 (2012). The party
seeking removal bears the burden of establishing federal jurisdiction. Willy v. Coastal Corp., 855
F.2d 1160, 1164 (5th Cir. 1988). This statutory right to removal is strictly construed because
“removal jurisdiction raises significant federalism concerns.” Id. (citations omitted). “[A]ny doubt
about the propriety of removal must be resolved in favor of remand.” Gasch v. Hartford Accident
& Indem. Co., 491 F.3d 278, 281–82 (5th Cir. 2007). Deutsche Bank claims that the court has
removal jurisdiction based on diversity of citizenship. Dkt. 1 at 3–6. Subject matter jurisdiction
premised on diversity requires (1) complete diversity of citizenship between the parties and (2) an
amount in controversy in excess of $75,000. 28 U.S.C. § 1332 (2012).
Courts have taken a two-step approach to determining the citizenship of a trust for purposes
of diversity: (1) identify whether the trust or the trustee is the real and substantial party to the
controversy, and (2) if the trust is the real party, then determine whether it is a “traditional trust”
where a court looks to the citizenship of the trustee, or whether it is a “business trust”
(unincorporated association) where a court looks to the citizenship of the trust’s members to
determine jurisdiction. Americold Realty Tr. v. Conagra Foods, Inc., 136 S. Ct. 1012, 1016 (2016).
At the outset, the court must determine who is the real and substantial party to the
controversy that is being haled to court—the trust or the trustee. “[A] federal court must disregard
nominal or formal parties and rest jurisdiction only upon the citizenship of real parties to the
controversy.” Corfield v. Dall. Glen Hills LP, 355 F.3d 853, 857 (5th Cir. 2003). The two main
U.S. Supreme Court cases addressing the citizenship of a trust, Americold and Navarro, do not
“limit an entity’s membership to its trustees just because the entity happens to call itself a trust.”
Americold, 136 S. Ct. at 1016; Navarro Savs. Ass’n v. Lee, 446 U.S. 458, 100 S. Ct. 1779 (1980);
see also, e.g., Juarez v. DHI Mortg., Ltd., No. CV H-15-3534, 2016 WL 3906296, at *2 (S.D. Tex.
July 19, 2016) (Miller, J.); Wells Fargo Bank, N.A. v. Transcon. Realty Inv’rs, Inc., No. 3:14-CV3565-BN, 2016 WL 3570648, at *2 (N.D. Tex. July 1, 2016).
If the trustee is suing or is being sued in his or her own name, or if the trust is a traditional
trust, then the Navarro standard applies. 446 U.S. at 458. Trustees that have exclusive authority
over the property (i.e. the declaration of the trust “authorizes the trustees to take legal title to trust
assets, to invest those assets for the benefit of the shareholders, and to sue and be sued in their
capacity as trustees”) may “sue in their own right, without regard to the citizenship of the trust
beneficiaries.” Id. at 464–66. In these instances, the court will look to the citizenship of the trustee
alone to determine jurisdiction.
If the trust is an unincorporated artificial business entity like the trust considered in
Americold, the “shareholders appear to be in the same position as the shareholders of a joint-stock
company or the partners of a limited partnership.” Americold, 136 S. Ct. at 1016. In those cases,
the court looks to the citizenship of all of the trust’s members. Id.
The Ouzennes contend that remand is appropriate because Deutsche Bank’s notice of
removal was untimely and the amount in controversy does not exceed $75,000. Dkt. 11.
1. Notice of Removal
The Ouzennes argue that Deutsche Bank’s removal was untimely because over 30 days have
passed after their petition was filed in state court. Dkt. 11. Deutsche Bank counters that “the 30-day
removal window is triggered by formal service of process on Defendant” and Deutsche Bank had
not been properly served in this suit. Dkts. 8, 14.
Notice of removal must “be filed within 30 days after the receipt by the defendant, through
service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which
such action or proceeding is based, or within 30 days after the service of summons upon the
defendant if such initial pleading has then been filed in court and is not required to be served on the
defendant, whichever period is shorter.” 28 U.S.C. § 1441(b). “[A] defendant’s time to remove is
triggered by simultaneous service of the summons and complaint, or receipt of the complaint,
‘through service or otherwise,’ after and apart from service of the summons, but not by mere receipt
of the complaint unattended by any formal service.” Murphy Bros., Inc. v. Michetti Pipe Stringing,
Inc., 526 U.S. 344, 347–48, 119 S. Ct. 1322 (1999).
On June 24, 2016, the Ouzennes filed their petition in state court. Dkt. 1, Ex. D-1. In the
petition, the Ouzennes admit that the defendant had not been formally served because the parties
have previously appeared in another case. Id. On August 22, 2016, Deutsche Bank filed its notice
of removal, stating that it had not been served and that no citation had been requested or issued. Dkt.
1 at 2; Dkt. 1, Ex. D (state court docket sheet). The court agrees with Deutsche Bank that removal
was timely because Deutsche Bank was never served with formal process. Contrary to the
Ouzennes’ argument, the 30-day window to remove did not begin on the day the Ouzennes
commenced this action. Dkt. 11. While Deutsche Bank was formerly served in another controversy,
the Ouzennes needed to serve Deutsche Bank with formal service of process on this claim for the
30-day window for removal to begin. See § 1446(b). Because Deutsche Bank was not served with
formal process in this suit, the court finds that removal was timely.
2. Amount in Controversy
Next, the Ouzennes argue that the amount in controversy requirement has not been met
because the only damages requested in the state court petition are for attorneys’ fees which are not
expected to reach $75,000. Dkt. 11 at 4. Deutsche Bank argues that the Ouzennes’ petition does not
specify an amount of monetary relief, but seeks injunctive and declaratory relief. Dkt. 14.
Therefore, the amount in controversy should be the value of the entire property as measured by the
current appraised fair market value of the property. Id. at 4. The Ouzennes argue that an unverified
appraised value “cannot unambiguously establish” the amount in controversy. Dkt. 11 at 5.
The amount in controversy is measured from the perspective of the plaintiff. Vraney v. Cnty.
of Pinellas, 250 F.2d 617, 618 (5th Cir. 1958) (per curiam). In an action for declaratory or injunctive
relief, the amount in controversy is the “value of the object of the litigation,” or “the value of the
right to be protected or the extent of the injury to be prevented.” Farkas v. GMAC Mortg., LLC, 737
F.3d 338, 341 (5th Cir. 2013) (per curiam); Leininger v. Leininger, 705 F.2d 727, 729 (5th Cir.
The court considers the fair market value of the property as the amount in controversy and
that Deutsche Bank as met this requirement for establishing subject matter jurisdiction. See
Manrique v. Bank of Am. Corp., No. 1:15-CV-47, 2015 WL 12743608, at *2–3 (S.D. Tex. Oct. 23,
2015) (using fair market value of the property as the amount in controversy where plaintiff sought
injunctive relief against foreclosure); see also Farkas, 737 F.3d at 341 (“Under any reasonable basis
for valuing the properties, whether purchase price, market value, or outstanding principal and
interest, the amount in controversy threshold is exceeded and federal subject-matter jurisdiction
exists.”). Here, Deutsche Bank presents evidence from the Harris County Appraisal District of the
fair market value of the property valued at $187,495.00. Dkt. 1, Ex. E.1 The Ouzennes’ petition
facially requests permanent injunctive relief, which establishes that the entire property is the object
of this litigation. Dkt. 1, Ex. D-1 at 2. Because the Ouzennes are seeking permanent injunctive
relief, the court finds the property’s fair market value satisfies the amount in controversy
In Deutsche Bank’s response to the motion, it cites that the fair market value of the property
is $179,050.00 and not $187,495.00, which is the amount Deutsche Bank listed in its notice of
removal and in the Harris County Appraisal District information. Compare Dkt. 11 at 4 (Def.’s
Resp. to Mot. to Remand) with Dkt. 1 at 6 (Notice of Removal) and Dkt. 1, Ex. E (Harris County
Appraisal District Real Property Account Information). In either case, the minimum amount in
controversy requirement has been met.
3. Complete Diversity of Parties
While the parties do not dispute that complete diversity exists (Dkts. 1, 11), the court may
sua sponte review its jurisdiction. Fed. R. Civ. P. 12(h)(3); see also Ruhrgas AG v. Marathon Oil
Co., 526 U.S. 574, 583, 119 S. Ct. 1563 (1999) (“subject-matter delineations must be policed by the
courts on their own initiative even at the highest level”). In light of the Americold decision, the court
ordered the parties to submit briefings on the question of diversity jurisdiction, and each party filed
supplemental briefing. Dkts. 17, 19, 20; 136 S. Ct. at 1026.
The Ouzennes objected to the portions of the PSA that Deutsche Bank cited to in its briefing
and moved to strike the portions offered by Deutsche Bank if it did not produce the entire PSA.
Dkt. 20 at 4. The court ordered Deutsche Bank to produce the full copy of the PSA (Dkt. 21) and
Deutsche Bank complied (Dkt. 23, Ex. A). Therefore, the Ouzennes’ objection to the PSA cited in
Deutsche Bank’s brief is MOOT.
When evaluating diversity jurisdiction, a court looks to the powers bestowed upon the trustee
to determine whether the trust or the trustee is the real party in interest. Americold, 136 S. Ct. at
1026. The court looks to the trustee’s citizenship rather than the citizenship of the members of the
trust if Deutsche Bank can show that the declaration of the trust “authorizes the trustees to [, for
example,] take legal title to trust assets, to invest those assets for the benefit of the shareholders, and
to sue and be sued in their capacity as trustees.” Navarro, 446 U.S. 462–66.
Deutsche Bank points to the following provisions from the PSA to support its claim that the
trustee is the real party to the controversy:
The Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey in trust to the Trustee without
recourse for the benefit of the Certificateholders all the right, title and interest
of the Depositor.
In connection with such transfer and assignment, the Depositor, does hereby
deliver to, and deposit with, the Trustee (or the Custodian on behalf of the
Trustee), the following documents or instruments with respect to each Initial
Mortgage Loan so transferred and assigned and in accordance with Section 2.08,
deliver or caused to be delivered to the Trustee (or the Custodian on behalf of
the Trustee) with respect to each Subsequent Mortgage Loan, the following
documents or instruments (with respect to each Mortgage Loan, a “Mortgage
Dkt. 19, Ex. A. § 2.01
Except as expressly provided for herein, no Certificateholder shall have any right
to vote or in any manner otherwise control the operation and management of the
Trust, or the obligations of the parties hereto, nor shall anything herein set forth
or contained in the terms of the Certificates be construed so as to constitute the
Certificateholders from time to time as partners or members of an association;
nor shall any Certificateholder be under any liability to any third person by
reason of any action taken by the parties to this Agreement pursuant to any
No Certificateholder shall have any right by virtue of any provision of this
Agreement to institute any suit, action or proceeding in equity or at law upon or
under or with respect to this Agreement, unless such Holder previously shall
have given to the Trustee a written notice of default and of the continuance
thereof, as hereinbefore provided, and unless also the Holders of Certificates
entitled to at least 25% of the Voting Rights shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee for 15 days after its receipt of such
notice, request and offer of indemnity, shall have neglected or refused to institute
any such action, suit or proceeding.
Id. § 11.03.
It is clear from the provisions of the PSA cited by Deutsche Bank in this case that the
trustee has legal title of the trust assets as set out in Navarro.
The PSA also states that
Certificateholders cannot “control the operation and management of the Trust,” and that those
powers are reserved for the trustee. Dkt. 19, Ex. A. § 11.03; see Justice v. Wells Fargo Bank Nat’l
Ass’n, No. 15-20615 (5th Cir. Mar. 22, 2017), slip op. (unpublished opinion) (holding whether “the
trust [otherwise] may depart from conventional forms in other respects has no bearing” on the realand-substantial-control question). While the Certificateholders may vote to override the trustee’s
decision to defend or initiate a lawsuit, such powers are limited to extenuating circumstances that
require the Certificateholders to indemnify the trustee. See May v. New Century Mortg. Corp., No.
4:16-cv-1272, 2016 U.S. Dist. LEXIS 128099, at *14 (S.D. Tex. Sept. 16, 2016) (holding trust was
the real party to the controversy because Certificateholders only had the power to remove the
trustee). Based on the evidence, the court finds that Deutsche Bank has satisfied its burden of
proving by a preponderance of the evidence that it is the real party to the controversy, and therefore
only the trustee’s citizenship is considered when determining subject matter jurisdiction.
As a national bank, Deutsche Bank “is a citizen of the State in which its main office, as
set forth in its articles of association, is located.” Wachovia Bank, N.A. v. Schmidt, 546 U.S. 303,
307, 126 S. Ct. 941 (2006). Deutsche Bank contends that it is a citizen of California, and the
Ouzennes are citizens of Texas. Dkt. 8. Because there is complete diversity between the parties and
the amount in controversy exceeds $75,000, the court concludes that subject matter jurisdiction
exists and that removal was proper. Accordingly, the Ouzennes’ motion for remand is DENIED.
IV. MOTION FOR SUMMARY JUDGMENT
A court shall grant summary judgment when a “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(c). “[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 demonstrating the absence of a genuine issue of material
fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548 (1986). If the party meets its
burden, the burden shifts to the non-moving party to set forth specific facts showing a genuine issue
for trial. Fed. R. Civ. P. 56(e). The court must view the evidence in the light most favorable to the
non-movant and draw all justifiable inferences in favor of the non-movant. Envtl. Conservation Org.
v. City of Dall., Tex., 529 F.3d 519, 524 (5th Cir. 2008).
Deutsche Bank seeks declaratory judgment that it is the holder of the Note and is able to
foreclose on the Property. Dkt. 15 at 13. In response, the Ouzennes argue that Deutsche Bank does
not have standing to foreclose on the property because Deutsche Bank’s summary judgment evidence
does not conclusively show that Deutsche Bank either (1) holds the note2, or (2) has a valid3
assignment of the deed of trust. Dkt. 16. The Ouzennes also argue that the statute of limitations
precludes Deutsche Bank from enforcing the note. Id. The court will first address the Ouzennes’
arguments on standing before addressing the issue of statute of limitations.
1. Original Note
The Ouzennes argued in their complaint that Deutsche Bank did not hold the original note
and therefore lacked standing, but the Ouzennes later concede in their response that the production
of the original note is not necessary to foreclose. Compare Dkt. 1 at 4, with Dkt. 16 at 3 (“The
Plaintiff does not dispute fact that the production of the original note is not necessary to foreclose
pursuant to a deed of trust . . .”). In their response, the Ouzennes moved for a continuance and a
request for oral hearing to inspect the original note. Dkt. 16 at 2. Because the production of the
The Ouzennes’ response alleges that “plaintiff” (Dkt. 16 at 4) does not hold the note, but
the court assumes that the Ouzennes intended to assert that the defendant does not hold the note.
In their response, the Ouzennes allege that the assignment is “vote and invalid,” (Dkt. 16
at 4); However, the court assumes that the Ouzennes intended to allege that the assignment is “void
original note is not necessary, which the Ouzennes conceded, the court finds that a hearing on this
matter is not needed. Accordingly, the Ouzennes’ motion for continuance is DENIED and their
request for oral hearing is DENIED.
2. Lack of Standing
The Ouzennes argue that Wells Fargo, without authority, assigned the deed of trust to
Deutsche Bank. Dkt. 16. Deutsche Bank argues that there is sufficient evidence in the record to
show that it is the holder of the note and therefore it has authority to foreclose on the Property.
Dkt. 15 at 3–4. Deutsche Bank provides the Corporate Assignment of Deed of Trust as evidence that
the Deed of Trust was properly assigned from Centex, the assignor, to Deutsche Bank, the assignee.
Dkt. 15, Ex. D.
The court finds, however, that the Ouzennes have no standing to challenge the assignment
of the deed of trust on the grounds that Wells Fargo lacked authority. Under Texas law, a nonparty
to a transaction lacks standing to claim that an assignment of a deed of trust was executed without
authorization. Reinagel v. Deutsche Bank Nat’l Trust Co., 735 F.3d 220, 226–27 (5th Cir. 2013).
(“[Texas] law is settled that the obligors of a claim . . . may not defend [against an assignee’s effort
to enforce the obligation] on any ground which renders the assignment voidable only”) (citing
Tri-Cities Const., Inc. v. Am. Nat’l. Ins. Co., 523 S.W.2d 426, 430 (Tex. Civ. App.—Houston [1st
Dist.] 1975, no writ); see Morlock, L.L.C. v. Bank of New York, 448 S.W.3d 514, 517 (Tex.
App.—Houston [1st Dist.] 2014, pet. denied) (citing Vazquez v. Deutsche Bank Nat’l Trust Co.,
N.A., 441 S.W.3d 783, 785 (Tex. App.—Houston [1st Dist.] 2014, no pet.)) (“A plaintiff who is not
a party to an assignment lacks standing to challenge the assignment on grounds which render it
merely voidable at the election of one of the parties.”).
Under Texas law, an assignment executed by an unauthorized agent is merely voidable at
the election of the defrauded assignor. Reinagel, 722 F.3d at 706–07. Because the Ouzennes were
not a party to the assignment, the court finds that the Ouzennes lack standing to challenge the
validity of the assignment of the deed of trust from Centex to Deutsche Bank.
3. Invalid Assignment
Even if the Ouzennes did have standing to challenge the assignment of the deed of trust,
the Ouzennes’ substantive claim still fails. The Ouzennes argue that Wells Fargo’s assignment of
the deed of trust was void and invalid. Dkt. 16 (emphasis added). However, Wells Fargo did not
assign the deed of trust as the Ouzennes assert, but rather merely served as attorney in fact for Centex
in Centex’s assignment of the deed of trust to Deutsche Bank. Dkt. 15, Ex. D (Corporate
Assignment of Deed of Trust). Once Deutsche Bank proves that it is the owner of the deed of trust,
as it does here, “it establishe[s] its interest in the property and right to foreclose as a matter of law
regardless of whether it was also a holder or the owner of the note.” See Morlock, 448 S.W.3d at
On January 11, 2012, Centex assigned the deed of trust to Deutsche Bank, and the
assignment was subsequently filed with the County Clerk of Harris County, Texas on January 19,
2012. Dkt. 15, Ex. D. Under Texas law, assignment of a mortgage “explicitly include[s] the power
to foreclose by the deed of trust.” Martins v. Bac Home Loans Servicing, L.P., 722 F.3d 249, 255
(5th Cir. 2013). Viewing the evidence in the light most favorable to the Ouzennes, the court is
unpersuaded by the Ouzennes’ argument that the assignment was void and invalid or that Deutsche
Bank did not have the authority to foreclose.
4. Objections to Deutsche Bank’s Summary Judgment Evidence
The Ouzennes also argue that Deutsche Bank has not provided sufficient summary
judgment evidence to establish that it has standing to foreclose. Dkt. 16. The Ouzennes object to
the Affidavit of Kimberly Ann Mueggenberg because (1) paragraph five of the affidavit is conclusory
when it states that “Wells Fargo is the mortgage servicer” without providing evidential support for
her conclusion, and (2) the affidavit does not state that the original note was provided to Wells Fargo
or how or why Wells Fargo acquired a copy of the note. Dkt. 16 at 3 (citing Dkt. 15, Ex. A
(Mueggenberg Aff.)) The Ouzennes also object to the copy of the Texas Home Equity Security
Instrument (Dkt. 15, Ex. C) because Deutsche Bank’s motion does not provide evidence to show
how or why Wells Fargo acquired an interest in the deed of trust or how it became a “servicer.” Id.
After reviewing the exhibits, the court finds that the corresponding documents are
sufficient to establish that Wells Fargo is the servicer on the loan and support Deutsche Bank’s
motion for summary judgment. See Dkt. 15, Exs. A, C. The property records provided by Deutsche
Bank and referenced in Deutsche Bank’s motion show that Wells Fargo is the mortgage servicer, that
Deutsche Bank holds the deed of trust, and that Deutsche Bank has the authority to foreclose on the
property. Dkt. 15, Exs. A-3, B-1, B-2, D. Therefore, the Ouzennes’ objections to the Mueggenberg
Affidavit and the Texas Home Equity Security Instrument are OVERRULED.
The Ouzennes also dispute Deutsche Bank’s standing to foreclose by arguing that Deutsche
Bank has not established a chain of title sufficient to show that the note or deed of trust were
properly assigned. Dkt. 16 at 2. The court declines to address this argument, however, because the
Ouzennes make a mere one-sentence, conclusory statement without providing additional support.
The court agrees with Deutsche Bank that it holds the note, is a valid assignee, and has standing to
5. Statute of Limitations and Res Judicata
The Ouzennes argue that the statute of limitations and res judicata preclude Deutsche Bank
from enforcing the note. Dkt. 16. Deutsche Bank argues that it is entitled to foreclose on the
Property because Deutsche Bank abandoned its Notice of Acceleration (Dkt. 15, Ex. B-1), which
reset the accrual date of the cause of action. Dkt. 15 at 4–5. Texas law has a four-year statute of
limitations for a foreclosure sale of real property under a deed of trust. Tex. Civ. Prac. & Rem. Code
Ann. § 16.035(b). When the four-year period expires, “the real property lien and power of sale to
enforce the lien become void.” Id. § 16.035(d).
If the deed of trust contains an optional acceleration clause, “the action accrues only when
the holder actually exercises its option to accelerate.” Holy Cross Church of God in Christ v. Wolf,
44 S.W.3d 562, 566 (Tex. 2001) (first citing Hammann v. H.J. McMullen & Co., 62 S.W.2d 59, 61
(Tex. 1933); then citing Curtis v. Speck, 130 S.W.2d 348, 351 (Tex. Civ. App.—Galveston 1939,
writ ref’d)). “Effective acceleration requires two acts: (1) notice of intent to accelerate, and (2)
notice of acceleration.” Id. (first citing Shumway v. Horizon Credit Corp., 801 S.W.2d 890, 892
(Tex. 1991); then citing Ogden v. Gibraltar Sav. Ass’n, 640 S.W.2d 232, 233 (Tex. 1982)).
Parties can abandon acceleration by agreement. Khan v. GBAK Props., Inc., 371 S.W.3d
347, 356 (Tex. App—Houston [1st Dist.] 2012, no pet.). After giving notice of acceleration, a note
holder can abandon acceleration by continuing to accept payments on the loan “without exacting any
remedies available to it upon declared maturity.” Holy Cross, 44 S.W.3d at 566–67. In addition,
a note holder can abandon acceleration unilaterally by sending a notice of rescission. See Leonard
v. Ocwen Loan Servicing, L.L.C., 616 Fed. App’x 677, 679–80 (5th Cir. 2015) (unpublished) (note
holder abandoned acceleration by issuing a new notice of default and providing account statements
for less than the accelerated amount); see also Boren v. U.S. Nat’l Bank Ass’n, 807 F.3d 99, 105–06
(5th Cir. 2015) (affirming Leonard and holding that a notice of default requiring less than the full
amount due under the loan “unequivocally manifested an intent to abandon the previous
acceleration” on the loan). When acceleration is abandoned, the original maturity date is restored.
Holy Cross, 44 S.W.3d. at 567 (citing Denbina v. City of Hurst, 516 S.W.2d 460, 463 (Tex. Civ.
App.—Tyler 1974, no writ).
Here, the mortgage servicer sent the Ouzennes a notice of default on May 22, 2012. Dkt.
15, Ex. A-3 (2012 Notice of Default). Because the Ouzennes failed to cure the default, Deutsche
Bank sent the Ouzennes a notice of acceleration on September 19, 2012. Dkt. 15, Ex. B-1 (“Notice
of Acceleration”). On December 16, 2014, Deutsche Bank subsequently sent the Ouzennes a second
notice of default and intent to accelerate. Dkt. 15, Ex. B-2 (“2014 Notice of Default”). The 2014
Notice of Default did not state that the full amount of the loan was due, but rather it directed the
Ouzennes to inquire further about the amount due and advised the Ouzennes that the failure to pay
would lead to acceleration of the loan. See Dkt. 15, Ex. B-2. Because the 2014 Notice of Default
requested an amount less than the full amount of the loan, the Ouzennes were put on notice of the
abandonment of acceleration, and the 2014 Notice of Default operated as a rescission of the original
Notice of Acceleration. See Alvarado v. U.S. Bank Nat’l Ass’n., No. 15-51017, 2016 WL 3402587,
at *2 (5th Cir. June 20, 2016) (a lender abandons his earlier acceleration by requesting a payment
that is less than the full amount of the loan); Boren, 807 F.3d at 105–06; Leonard, 616 F. App’x at
680. Because the original Notice of Acceleration was abandoned in 2014, and Deutsche Bank
brought the Rule 736 action on March 18, 2016, the court finds that Deutsche Bank brought the
foreclosure claim within the four-year limitations period.
The Ouzennes also argue that res judicata precludes Deutsche Bank from enforcing the
note. Dkt. 16 at 2. However, the court declines to address this because the Ouzennes merely provide
a conclusory statement without support for their argument. The court is not persuaded that the
statute of limitations and res judicata prevent Deutsche Bank from enforcing the note. Accordingly,
viewing the evidence in the light most favorable to the non-movant, the court finds that no genuine
dispute as to material fact exists and Deutsche Bank is entitled to judgment as a matter of law.
Therefore, Deutsche Bank’s motion for summary judgment (Dkt. 15) is GRANTED.
The Ouzennes’ objection to Deutsche Bank’s brief (Dkt. 20 at 4) is MOOT and their
motion for remand (Dkt. 11) is DENIED. The Ouzennes’ motion for continuance (Dkt. 16) is
DENIED and their request for oral hearing (Dkt. 16) is DENIED. The Ouzennes’ objections to
Deutsche Bank’s summary judgment evidence (i.e. the Mueggenberg Affidavit and the Texas Home
Equity Security Instrument) are OVERRULED. Dkt. 16 at 3. Finally, Deutsche Bank’s motion for
summary judgment that it is the holder of the Note and is able to foreclose on the Property (Dkt. 15)
Signed at Houston, Texas on April 24, 2017.
Gray H. Miller
United States District Judge
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