Eason et al v. Deutsche Bank National Trust Company et al
Filing
10
MEMORANDUM AND OPINION entered GRANTING 9 MOTION for Summary Judgment . Final judgment entered by separate order. (Signed by Chief Judge Lee H Rosenthal) Parties notified.(leddins, 4)
United States District Court
Southern District of Texas
ENTERED
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
VALTON EASON and
TERESA EASON,
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Plaintiffs,
v.
DEUTSCHE BANK NATIONAL TRUST
COMPANY and OCWEN LOAN
SERVICING, LLC
Defendants.
June 25, 2018
David J. Bradley, Clerk
CIVIL ACTION NO. H-18-717
MEMORANDUM AND OPINION GRANTING THE DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT
Deutsche Bank National Trust Company and Ocwen Loan Servicing, LLC, jointly move
for summary judgment, arguing that the statute of limitations on their right to foreclose on the
plaintiffs’ property has not expired and that all other requirements for foreclosure are met,
precluding the homeowners’ claims. (Docket Entry No. 9). For the reasons stated below, the
motion is granted and this case is dismissed with prejudice. Final judgment is entered by
separate order.
I.
Background
In September 2005, Teresa Eason, at the time Teresa McGrew, financed a home purchase
in Houston, Texas by signing an Adjustable Rate Note for $132,000 payable to Decision One
Mortgage Company, LLC. (Docket Entry No. 9-1 at 7). The same day, Teresa Eason and her
husband, Valton Eason, signed a Deed of Trust granting a security interest in the property to
secure repayment on the Note. (Docket Entry No. 9-1 at 12). In June 2011, the Note transferred
1
to the current holder, Deutsche Bank. (Docket Entry No. 9-1 at 44). Ocwen currently services
the loan. (Docket Entry No. 9-1 at 32).
After the Easons failed to make their monthly mortgage payments and defaulted on the
mortgage loan, the property was sold at a foreclosure sale in August 2011. (Docket Entry No. 91 at 48). That sale was rescinded on June 11, 2013. (Docket Entry No. 9-1 at 57–58). The
rescission of the sale restored title to the Easons. Two years later, in June 2015, Ocwen, on
behalf of Deutsche Bank, sent the Easons a new Notice of Default and Intent to Accelerate,
notifying them that they were behind in their mortgage payments and were in default. (Docket
Entry No. 9-1 at 32). The notice provided the Easons the opportunity to cure the default by
paying the full amount due, $83,174.89, within 30 days. (Id.). The notice warned that failing to
pay the amount due within 30 days would result in acceleration of the Note’s maturity date,
making the full principal plus accrued interest immediately due and payable. ( Id.). The Easons
did not pay.
In September 2015, Ocwen sent another notice on behalf of Deutsche Bank, notifying the
Easons that the maturity date had been accelerated and the full unpaid principal, plus interest,
was due and payable effective immediately. (Docket Entry No. 9-1 at 35). The notice stated that
the property would be listed at a foreclosure sale on October 6, 2015. (Id.).
The Easons sued in state court for an injunction preventing the foreclosure in November
2017, alleging that the four-year statute of limitations to foreclose on the property had expired
because the loan had been accelerated in 2011, six years before, but Deutsche Bank had not
foreclosed at that time. The Easons also sought damages. (Docket Entry No. 1). Deutsche Bank
timely removed. At the initial pretrial conference in this court in April 2018, the court ordered
the parties to exchange relevant documents, allowed one deposition for each party, and set a
deadline for any motion to dismiss or motion for summary judgment. (Docket Entry No. 8). The
Easons neither provided documents to the defendants nor filed a motion. Deutsche Bank and
Ocwen provided their documents and moved for summary judgment. (Docket Entry No. 9). The
Easons did not respond.
II.
The Legal Standard
“Summary judgment is appropriate only if ‘there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.’” Vann v. City of Southaven,
Miss., 884 F.3d 307, 309 (5th Cir. 2018) (citations omitted); see also FED. R. CIV. P. 56(a). “A
genuine dispute of material fact exists when the ‘evidence is such that a reasonable jury could
return a verdict for the nonmoving party.’” Burrell v. Prudential Ins. Co. of Am., 820 F.3d 132,
136 (5th Cir. 2016) (quoting Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986)). “The
moving party ‘bears the initial responsibility of informing the district court of the basis for its
motion, and identifying those portions of [the record] which it believes demonstrate the absence
of a genuine issue of material fact.’” Brandon v. Sage Corp., 808 F.3d 266, 269–70 (5th Cir.
2015) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)).
“Where the non-movant bears 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 . . .
that there is an issue of material fact warranting trial.’” Kim v. Hospira, Inc., 709 Fed. App’x
287, 288 (5th Cir. 2018) (quoting Nola Spice Designs, L.L.C. v. Haydel Enters., Inc., 783 F.3d
527, 536 (5th Cir. 2015)). While the party moving for summary judgment must demonstrate the
absence of a genuine issue of material fact, it does not need to negate the elements of the
nonmovant’s case. Austin v. Kroger Tex., L.P., 864 F.3d 326, 335 (5th Cir. 2017) (quoting Little
v. Liquid Air Corp., 37 F.3d 1069, 1076 n.16 (5th Cir. 1994)). A fact is material if “its resolution
could affect the outcome of the actions.” Aly v. City of Lake Jackson, 605 Fed. App’x 260, 262
(5th Cir. 2015) (citing Burrell v. Dr. Pepper/Seven UP Bottling Grp., Inc., 482 F.3d 408, 411
(5th Cir. 2007)). “If the moving party fails to meet [its] initial burden, the motion [for summary
judgment] must be denied, regardless of the nonmovant’s response.” Pioneer Exploration, LLC
v. Steadfast Ins. Co., 767 F.3d 503 (5th Cir. 2014).
“When the moving party has met its Rule 56(c) burden, the nonmoving party cannot
survive a summary judgment motion by resting on the mere allegations of its pleadings.” Bailey
v. E. Baton Rouge Par. Prison, 663 Fed. App’x 328, 331 (5th Cir. 2016) (quoting Duffie v.
United States, 600 F.3d 362, 371 (5th Cir. 2010)). The nonmovant must identify specific
evidence in the record and articulate how that evidence supports that party’s claim. Willis v.
Cleco Corp., 749 F.3d 314, 317 (5th Cir. 2014). “This burden will not be satisfied by ‘some
metaphysical doubt as to the material facts, by conclusory allegations, by unsubstantiated
assertions, or by only a scintilla of evidence.’” Jurach v. Safety Vision, LLC, 642 Fed. App’x
313, 317 (5th Cir. 2016) (quoting Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir.
2005)). In deciding a summary judgment motion, the court draws all reasonable inferences in
the light most favorable to the nonmoving party. Darden v. City of Fort Worth, 866 F.3d 698,
702 (5th Cir. 2017).
III.
Analysis
The parties agree that the limitations period is four years from the day the claim
accrues. TEX. CIV. PRAC. & REM. CODE § 16.035(a). Generally, the limitations period does not
begin to run until the maturity date of a loan. Holy Cross Church of God in Christ v. Wolf, 44
S.W.3d 562, 566 (Tex. 2001). When a loan contains an optional acceleration clause, the claim
accrues when the noteholder exercises its option to accelerate. Id. Acceleration requires a clear
and unequivocal notice of intent to accelerate and of acceleration. Id. Deutsche Bank and
Ocwen accelerated the loan and sent the Easons notice in 2011. The dispute is whether a
rescission of that acceleration prevented the four-year limitations period from expiring in 2015.
“The acceleration of a note can be abandoned ‘by agreement or other action of the
parties.’” Boren v. U.S. Nat’l Bank Ass’n, 807 F.3d 99, 104 (5th Cir. 2015) (citing Khan v.
GBAK Props., 371 S.W.3d 347, 353 (Tex. App.—Houston [1st Dist.] 2012, no
pet.)). “Abandonment of acceleration has the effect of restoring the contract to its original
conditions,
thereby
restoring
the
note’s
original
maturity
date
for
purposes
of
accrual.” Id. (quoting Khan, 371 S.W.3d at 353). Texas law frames abandonment of a prior
acceleration in waiver terms. Id. at 105. “A lender waives its earlier acceleration when it ‘put[s]
the debtor on notice of its abandonment . . . by requesting payment on less than the full amount
of the loan.’” Id. at 106 (quoting Leonard v. Ocwen Loan Servicing, L.L.C., 616 Fed. App’x 677
(5th Cir. 2015)) (a second notice of default informing the plaintiffs that the total payment
required to bring their loan current was the past-due amount manifested an unequivocal intent to
abandon the prior acceleration). “A plain example of waiver is where the lender ‘put[s] the
debtor on notice of its abandonment . . . by requesting payment on less than the full amount of
the loan.’” DeFranceschi v. Seterus, Inc., No. 17-11151, 2018 U.S. App. LEXIS 10633, at *5
(5th Cir. Apr. 26, 2018) (quoting Boren, 807 F.3d at 106) (a notice of default and a request for
payment of less than the full loan amount was “precisely the kind of action
which Boren recognized as abandonment”). That action restores the loan to its original condition
and maturity date for purposes of accrual. See Seigel v. U.S. Bank Nat’l Ass’n, 218 F. Supp. 3d
541, 546 (S.D. Tex. 2016) (notice of default and intent to accelerate abandoned prior acceleration
and reset the statute of limitations).
The parties agree that the loan was originally accelerated on August 2, 2011, when the
property was posted for a foreclosure sale. (Docket Entry No. 1-2 at 6; Docket Entry No. 9 at
7). The record evidence shows that Ocwen, on behalf of Deutsche Bank, sent a notice of default
to both Valton Eason and Teresa Eason on June 8, 2015, within four years from the August 2,
2011 notice and before limitations expired. (Docket Entry No. 9-1 at 29, 32–33). The 2015
notice informed the Easons that they were delinquent in their payments and gave them the
opportunity to cure the default by paying the total past-due amount of $83,174.89. (Docket
Entry No. 9-1 at 32–33). The notice also warned that failing to do so would result in an
acceleration of the loan, making the full principal amount and all accrued interest due
immediately. By requesting payment of less than the full amount of the loan, Deutsche Bank and
Ocwen abandoned the prior 2011 acceleration and reset the four-year statute of limitations. The
new four-year limitations period has not yet expired and the defendants are not precluded from
foreclosing on that basis.
Deutsche Bank and Ocwen also seek summary judgment that the Easons’ other grounds
for injunctive relief fail, as a matter of law. Injunctive relief under Texas law is a type of
equitable remedy, not a stand-alone cause of action. See Sam v. Wells Fargo Bank, N.A., No.
4:15-cv-03194, 2016 U.S. Dist. LEXIS 188835, at *31 (S.D. Tex. July 15, 2016) (citing Cook v.
Wells Fargo Bank, N.A., No. 3:10-CV-0592-D, 2010 U.S. Dist. LEXIS 69239 (N.D. Tex. July
12, 2010); Brown v. Ke-Ping Xie, 260 S.W.3d 118, 122 (Tex. App.—Houston [1st Dist] 2008, no
pet.)). “To sustain a claim for injunctive relief, a plaintiff must first plead a viable underlying
cause of action.” Id. (quoting McLaughlin v. Wells Fargo Bank, N.A., No. 4:12-cv-02658, 2013
U.S. Dist. LEXIS 131602, at *14 (S.D. Tex. Sept. 13, 2013) (quoting Butnaru v. Ford Motor
Co., 84 S.W.3d 198, 204 (Tex. 2002)).
The undisputed record evidence shows that the Easons cannot as a matter of law establish
their claims for wrongful foreclosure. Their claims for injunctive relief also fail. The same is
true for the Easons’ claim for attorneys’ fees. See Velasquez v. Wells Fargo Bank, NA, No.
5:13-CV-196, 2014 U.S. Dist. LEXIS 64206, at *15 (S.D. Tex. May 9, 2014) (“To recover
attorneys’ fees, Plaintiffs must prevail on a cause of action for which attorneys’ fees are
recoverable.” (citing Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997))).
IV.
Conclusion
The defendants’ motion for summary judgment, (Docket Entry No. 9), is granted. Final
judgment is entered separately.
SIGNED on June 25, 2018, at Houston, Texas.
_______________________________________
Lee H. Rosenthal
Chief United States District Judge
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