Robertson v. Rushmore Loan Management Services, LLC et al

Filing 19

MEMORANDUM AND ORDER GRANTED 15 MOTION for Summary Judgment and Brief in Support (Signed by Judge Nancy F Atlas) Parties notified.(sashabranner, 4)

United States District Court
Southern District of Texas

ENTERED
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
§
§
§
v.
§
§
RUSHMORE LOAN MANAGEMENT §
SERVICES, LLC, et al.,
§
Defendants.
§

November 28, 2018
David J. Bradley, Clerk

DONALD ROBERTSON,
Plaintiff,

CIVIL ACTION NO. H-17-2597

MEMORANDUM AND ORDER
This case is before the Court on the Motion for Summary Judgment (“Motion”)
[Doc. # 15] filed by Defendants Rushmore Loan Management Services LLC
(“Rushmore”) and Wilmington Savings Fund Society (“Wilmington”).1 Plaintiff
Donald Robertson filed a Response [Doc. # 17], and Defendants filed a Reply [Doc.
# 18]. Having reviewed the record and the applicable legal authorities, the Court
grants Defendants’ Motion.
I.

BACKGROUND
On October 1, 2010, Plaintiff obtained a loan for $166,920.00 from Universal

American Mortgage Company, LLC, (the “Loan”), to purchase real property located
in Spring, Texas (the “Property”). Robertson executed a Promissory Note requiring
1

Defendant Bank of America, N.A., was dismissed by Agreed Order [Doc. # 10]
entered May 7, 2018.

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him to make monthly payments. To secure payment of the Loan, Plaintiff and his
wife executed a Deed of Trust. The Deed of Trust was subsequently assigned to Bank
of America, N.A., and ultimately to Defendant Wilmington, who is also the current
owner and holder of the Promissory Note. Rushmore is the current mortgage servicer
with respect to Plaintiff’s Loan.
Plaintiff made “all of the monthly loan payments due under the Loan until
approximately [May] 2011.” See Affidavit of Donald Robertson, Exh. 1 to Response;
Original Petition [Doc. # 1-1], ¶ 12. Plaintiff attempted unsuccessfully to obtain a
loan modification. In 2015 and in 2016, Plaintiff filed Chapter 13 bankruptcy
petitions to avoid foreclosure.
Following dismissal of the second bankruptcy proceeding, Rushmore sent
Plaintiff a Notice of Intent to Accelerate dated May 9, 2017. See Exh. A-4 to Motion.
The cure amount was $84,795.46, which was due by June 13, 2017. See id.
Plaintiff filed this lawsuit on July 31, 2017, in Texas state court, to prevent
foreclosure. Defendants filed a timely Notice of Removal [Doc. # 1]. In his Original
Petition, Plaintiff asserted causes of action for common law fraud, breach of contract,
violation of Regulation X under the Real Estate Settlement Procedures Act
(“RESPA”), and violation of the Texas Debt Collection Act.

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After the close of discovery, Defendants filed their Motion seeking summary
judgment on all four claims asserted by Plaintiff in the Original Petition. In his
Response, Plaintiff addressed only the fraud and Regulation X claims.2 Plaintiff
offered no evidence or legal argument in support of his breach of contract and Texas
Debt Collection Act claims. The Motion for Summary Judgment is now ripe for
decision.
II.

SUMMARY JUDGMENT STANDARD
Rule 56 of the Federal Rules of Civil Procedure provides for the entry of

summary judgment against a plaintiff who fails to make a sufficient showing of the
existence of an element essential to his case and on which he will bear the burden at
trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Curtis v. Anthony, 710
F.3d 587, 594 (5th Cir. 2013); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.
1994) (en banc). Summary judgment “should be rendered if the pleadings, the
discovery and disclosure materials on file, and any affidavits show that there is no
genuine issue as to any material fact and that the movant is entitled to judgment as a

2

In the Original Petition, there are no allegations of fraud or of a violation of
Regulation X asserted against Defendant Wilmington. Because these are the only two
claims that Plaintiff addresses in his Response, Defendant Wilmington is entitled to
summary judgment.

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matter of law.” FED. R. CIV. P. 56(a); Celotex, 477 U.S. at 322-23; Curtis, 710 F.3d
at 594.
For summary judgment, the initial burden falls on the movant to identify areas
essential to the non-movant’s claim in which there is an “absence of a genuine issue
of material fact.” ACE Am. Ins. Co. v. Freeport Welding & Fabricating, Inc., 699
F.3d 832, 839 (5th Cir. 2012). The moving party, however, “need not negate the
elements of the nonmovant’s case.” Coastal Agric. Supply, Inc. v. JP Morgan Chase
Bank, N.A., 759 F.3d 498, 505 (5th Cir. 2014) (quoting Boudreaux v. Swift Transp.
Co., 402 F.3d 536, 540 (5th Cir. 2005)). The moving party may meet its burden by
pointing out “the absence of evidence supporting the nonmoving party’s case.”
Malacara v. Garber, 353 F.3d 393, 404 (5th Cir. 2003) (citing Celotex, 477 U.S. at
323; Stults v. Conoco, Inc., 76 F.3d 651, 656 (5th Cir. 1996)).
If the moving party meets its initial burden, the non-movant must go beyond the
pleadings and designate specific facts showing that there is a genuine issue of material
fact for trial. See Gen. Universal Sys., Inc. v. Lee, 379 F.3d 131, 141 (5th Cir. 2004);
Littlefield v. Forney Indep. Sch. Dist., 268 F.3d 275, 282 (5th Cir. 2001) (internal
citation omitted). “An issue is material if its resolution could affect the outcome of
the action.” Spring Street Partners-IV, L.P. v. Lam, 730 F.3d 427, 435 (5th Cir.
2013). “A dispute as to a material fact is genuine if the evidence is such that a

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reasonable jury could return a verdict for the nonmoving party.” DIRECT TV Inc. v.
Robson, 420 F.3d 532, 536 (5th Cir. 2006) (internal citations omitted).
In deciding whether a genuine and material fact issue has been created, the
court reviews the facts and inferences to be drawn from them in the light most
favorable to the nonmoving party. See Reaves Brokerage Co. v. Sunbelt Fruit &
Vegetable Co., 336 F.3d 410, 412 (5th Cir. 2003). A genuine issue of material fact
exists when the evidence is such that a reasonable jury could return a verdict for the
non-movant. See Tamez v. Manthey, 589 F.3d 764, 769 (5th Cir. 2009) (citing
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). “‘Conclusional
allegations and denials, speculation, improbable inferences, unsubstantiated assertions,
and legalistic argumentation do not adequately substitute for specific facts showing
a genuine issue for trial.’” Pioneer Exploration, L.L.C. v. Steadfast Ins. Co., 767 F.3d
503, 511 (5th Cir. 2014) (quoting Oliver v. Scott, 276 F.3d 736, 744 (5th Cir. 2002));
accord Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395,
399 (5th Cir. 2008). Instead, the nonmoving party must present specific facts which
show “the existence of a genuine issue concerning every essential component of its
case.” Firman v. Life Ins. Co. of N. Am., 684 F.3d 533, 538 (5th Cir. 2012) (citation
and internal quotation marks omitted). In the absence of any proof, the court will not

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assume that the non-movant could or would prove the necessary facts. See Little, 37
F.3d at 1075 (citing Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 888 (1990)).
The Court does not make credibility determinations or weigh any evidence. See
Chaney v. Dreyfus Serv. Corp., 595 F.3d 219, 229 (5th Cir. 2010) (citing Reaves
Brokerage Co., 336 F.3d at 412-13). The Court is not, however, required to accept
the nonmovant’s conclusory allegations, speculation, and unsubstantiated assertions
which are either entirely unsupported, or supported by a mere scintilla of evidence.
Id. (citing Reaves Brokerage, 336 F.3d at 413); accord, Little, 37 F.3d at 1075.
Affidavits cannot preclude summary judgment unless they contain competent and
otherwise admissible evidence. See FED. R. CIV. P. 56(c)(4); Love v. Nat’l Med.
Enters., 230 F.3d 765, 776 (5th Cir. 2000).
III.

ANALYSIS
A.

Breach of Contract and Texas Debt Collection Act Claims

Rushmore argues that the breach of contract claim fails because it is undisputed
that Plaintiff, by defaulting under the terms of the Loan, was in breach prior to any
alleged breach by Rushmore. Defendants argue also that the Texas Debt Collection
Act claim fails because Rushmore provided the required Notice of Default and Intent
to Accelerate on May 9, 2017. See Motion, p. 7 (citing Business Records Affidavit
of Michael Bennett; Exh. A-4). Plaintiff in his Response does not challenge

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Defendants’ Motion regarding the breach of contract and Texas Debt Collection Act
claims. Absent evidence or legal argument in support of these claims, Defendants are
entitled to summary judgment.
B.

Fraud Claim

In his Original Petition, Plaintiff alleges that Rushmore engaged in common law
fraud when it agreed to review and consider Plaintiff’s loan modification request. In
his Response, Plaintiff alleges that Rushmore made a false representation when it
informed Plaintiff on March 5, 2015, that his “Relationship Manager” was Valerie
Villanueva, then informed Plaintiff on March 19, 2015, that his “Relationship
Manager” was Hector Enciso.
To avoid summary judgment on his fraud claim, Plaintiff must present evidence
that (1) a material representation was made; (2) the representation was false; (3) when
the representation was made, the speaker knew it was false or made it recklessly
without any knowledge of the truth and as a positive assertion; (4) the speaker made
the representation with the intent that the other party should act upon it; (5) Plaintiff
acted in reliance on the representation; and (6) thereby suffered injury. See Harris
Cnty. v. MERSCORP Inc., 791 F.3d 545, 558 (5th Cir. 2015) (citing Italian Cowboy
Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 337 (Tex. 2011)).
Under Texas law, a promise of future performance constitutes actionable fraud only

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if “the promise was made with no intention of performing at the time it was made.”
Formosa Plastics, 960 S.W.2d at 48; Hall v. Douglas, 380 S.W.3d 860, 870-71 (Tex.
App. – Dallas 2012, no pet.).
Plaintiff has failed to present evidence that raises a genuine issue of material
fact regarding the false representation element of his fraud claim. To the extent
Plaintiff bases his fraud claim on representations that Rushmore would review and
consider his loan modification request, the allegedly false misrepresentation is
expressly contingent future conduct. See, e.g., Spencer v. Deutsche Bank Nat. Tr. Co.,
2014 WL 7151505, *5 (S.D. Tex. Sept. 17, 2014) (report and recommendation
adopted). The uncontroverted documentary evidence in the record establishes that
Rushmore repeatedly requested additional information from Plaintiff to enable it to
review and consider the loan modification request. Plaintiff has failed to present
evidence that, when Rushmore stated that it would consider his loan modification
request, it intended not to perform.
With reference to the representations regarding Plaintiff’s “Relationship
Manager,” there is no evidence that the representation that Valerie Villanueva was the
Relationship Manager on March 5, 2015, or the representation that Hector Enciso was
the Relationship Manager on March 19, 2015, were false statements at the time they

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were made.3 The evidence in the record demonstrates only that the named individual
changed between March 5 and March 19, and that Plaintiff had difficulty contacting
both individuals.
Plaintiff has failed to present evidence that raises a genuine issue of material
fact that Rushmore made false representations of material fact regarding its review and
consideration of the loan modification request or the identity of the Relationship
Manager assigned to Plaintiff. As a result, Defendants are entitled to summary
judgment on Plaintiff’s fraud claim.
C.

RESPA Regulation X Claim

Plaintiff alleges that Rushmore violated 12 C.F.R. § 1024.41 (“Regulation X”)
by initiating foreclosure proceedings while he had a “complete loss mitigation
application” pending. See Original Complaint, ¶ 50. Regulation X provides for a
private right of action pursuant to section 6(f) of RESPA. See 12 U.S.C. § 1024.41(a).
The documentary evidence in the record establishes that Plaintiff did not have
a “complete loss mitigation application” pending for consideration by Rushmore at
any time. Indeed, Plaintiff admits that Rushmore advised him repeatedly that his loan
modification application was incomplete. See Robertson Aff., ¶ 13, ¶ 15, ¶ 17, ¶ 19,

3

Additionally, Plaintiff has presented no legal or factual basis for the identity of a
Relationship Manager being a material representation under the circumstances of this
case.

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¶ 21. Plaintiff relies on the first page of a letter from Rushmore dated August 5, 2016,
and the first page of a letter from Rushmore dated October 20, 2016.4 On the first
page of each letter, Rushmore acknowledged receipt of Plaintiff’s “home retention
package wherein [he was] seeking homeowner assistance . . ..” See First Page of
Letters, Exhs. A-4 and A-5 to Response. On the second page of these two letters,
which Plaintiff failed to include in his exhibits, Rushmore advised Plaintiff that it had
completed its initial review of the home retention package and that the application was
“considered

incomplete

because

it

is

missing

the

following

required

documentation . . ..” See Second Page of Letters, Exhs. B-11 and B-14 to Reply.
Each letter then listed the documentation that was missing at the time the letter was
sent to Plaintiff. See id. When Plaintiff failed to provide the missing documentation,
Rushmore sent him a letter dated November 9, 2016, advising him that Rushmore was
closing its file because it did not have a completed Home Retention Package to
review. See Letter, Exh. B-15 to Reply. In that letter, Rushmore invited Plaintiff to
contact its office if he wanted his loan “to be reviewed for workout opportunities in
the future.” See id.

4

Plaintiff admits receiving both letters. See Robertson Aff., ¶ 19 (“After receiving this
[August 5, 2016] letter, I, or my wife, then called Rushmore . . ..”); ¶ 21 (“After
receiving the October 20, 2016 letter . . ., I called Rushmore . . ..”).

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Plaintiff has failed to present evidence that raises a genuine issue of material
fact regarding whether Rushmore instituted foreclosure proceedings while he had a
completed loan modification application pending. As a result, Rushmore is entitled
to summary judgment on the Regulation X claim.
IV.

CONCLUSION AND ORDER
Plaintiff does not challenge Defendants’ request for summary judgment on the

breach of contract and Texas Debt Collection Act claims. Plaintiff has failed to
present evidence that raises a genuine issue of material fact on his fraud and his
RESPA Regulation X claims. As a result, it is hereby
ORDERED that Defendants’ Motion for Summary Judgment [Doc. # 15] is
GRANTED. The Court will issue a separate final judgment.
SIGNED at Houston, Texas this 28th day of November, 2018.

NAN Y F. ATLAS
SENIOR UNI
STATES DISTRICT JUDGE

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