Adair et al v. Deutsche Bank National Trust Company
ORDER GRANTING 20 Motion for Summary Judgment. Signed by Judge Sam Sparks. (dm)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS 215
Case No. A-15-CA-395-SS
DEUTSCHE BANK NATIONAL TRUST
COMPANY f/k/a Bankers Trust Company of
California, N.A. as Trustee for Long Beach
Mortgage Loan Trust 2001-2,
BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause, and
specifically Defendant Deutsche Bank National Trust Company's Motion for Summary Judgment
[#201, to which Plaintiffs have not filed a response. Having reviewed the documents, the governing
law, and the file as a whole, the Court now enters the following opinion and orders.
This is a lawsuit brought by pro se Plaintiffs Muareen L. Adair and John Hertenberger
challenging Deutsche Bank National Trust Company's authority to foreclose on real property located
at 2524 Spring Lane, Austin, Texas 78703 (the Property). Plaintiffs took out a home equity loan on
the Property in May 2001, executing a Texas Home Security Instrument to secure payment on the
In March2014, Plaintiffs began falling behind on their loan payments. On October 15, 2005,
Plaintiffs filed for Chapter 13 bankruptcy. As part of the proceeding, Plaintiffs brought a breach of
contract claim based on the alleged misapplication of payments in 2003, 2004, and 2006. See Mot.
Summ. J. [#20-8] Ex. H-i. The bankruptcy court dismissed these claims with prejudice. See Id. Ex.
H-2 at 2. On January 18, 2007, the bankruptcy case was converted from Chapter 13 to Chapter 7,
and the Plaintiffs were granted a discharge on April 23, 2007. See Id. [#20-7] Exs. G, G-2.
Despite the outcome of the Chapter 7 proceedings, Plaintiffs have apparently remained in
default since as early as August 7, 2007, when the loan was first accelerated. On October 20, 2010,
after failing to reach a modification agreement, JPMorgan Chase, N.A., the mortgage servicer at the
time, sent Plaintiffs a notice of default demanding all missed payments since April 1, 2004, as well
as late fees. See Id. [#20-1] Ex. A-2. Plaintiffs failed to cure the default and the loan was again
accelerated on April 15, 2011. See
[#20-3] Ex. C-i. On October 7, 2011, the Security Instrument
was assigned to Defendant, the current mortgagee of the loan. See Id. [#20-5] Ex. E (Assignment
of Deed of Trust).
On October 30, 2013, Plaintiffs received a new notice of default, threatening to accelerate
the loan if Plaintiffs did not submit a payment of $638,544.25. See Id. [#20-1] Ex. A-4. Having
again failed to cure, Plaintiffs received another notice of acceleration on September 26, 2014,
informing them that the full balance of the
ioan$ 1,292,627.07was due.
Id. [#20-3] Ex. C-2.
On October 30, 2014, Defendant initiated expedited foreclosure proceedings pursuant to
Texas Rule 736. See Id. [#20-6] Ex. F. Rejecting Plaintiffs' argument foreclosure was time-barred,
a court entered judgment in favor of Defendant in the Rule 736 action on April 2, 2015. Id. Ex. F-2.
That same day, Plaintiffs filed their original petition in state court to prevent foreclosure on the
Property. See Notice Removal [#1-3] Ex. A (Orig. Pet.)
17-23. On May 13, 2015, Defendant
removed the case to federal court on the basis of diversity. See
On October 30, 2015, Plaintiffs filed their first amended complaint, the presently operative
pleading. See Am. Compi. [#101. Plaintiffs (1) seek to quiet title in their name on the grounds
Defendant's foreclosure right is time-barred pursuant to Texas Civil Practices and Remedies Code
16.035 and, alternatively, (2) assert a breach of contract claim based on the alleged misapplication
of certain loan payments in 2003, 2004, and 2006. Id.
On March 30, 2016, Defendant filed the instant motion for summary judgment, to which
Plaintiffs have not responded. See Mot. Summ. J. [#20]. The motion is ripe for consideration.
Summary JudgmentLegal Standard
Summary judgment shall be rendered when the pleadings, the discovery and disclosure
materials on file, and any affidavits show that there is no genuine dispute as to any material fact and
that the moving party is entitled to judgment as a matter of law.
FED. R. Civ. P.
56(a); Celotex Corp.
Catrett, 477 U.S. 317, 323-25 (1986); Washburn v. Harvey, 504 F.3d 505, 508 (5th Cir. 2007).
A dispute regarding a material fact is "genuine" if the evidence is such that a reasonable jury could
return a verdict in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242,248
(1986). When ruling on a motion for summaryjudgment, the court is required to view all inferences
drawn from the factual record in the light most favorable to the nonmoving party. Matsushita Elec.
Zenith Radio, 475 U.S. 574, 587 (1986); Washburn, 504 F.3d at 508. Further, a court
"may not make credibility determinations or weigh the evidence" in ruling on a motion for summary
judgment. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000); Anderson, 477
U.S. at 254-55.
Once the moving party has made an initial showing that there is no evidence to support the
nonmoving party's case, the party opposing the motion must come forward with competent summary
judgment evidence of the existence of a genuine fact issue. Matsushita, 475 U.S. at 586. Mere
conclusory allegations are not competent summary judgment evidence, and thus are insufficient to
defeat a motion for summaryjudgment. Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343
(5th Cir. 2007). Unsubstantiated assertions, improbable inferences, and unsupported speculation are
not competent summary judgment evidence. Id. The party opposing summary judgment is required
to identify specific evidence in the record and to articulate the precise manner in which that evidence
supports his claim. Adams
Travelers Indem. Co. of Conn., 465 F.3d 156, 164 (5th Cir. 2006).
Rule 56 does not impose a duty on the court to "sift through the record in search of evidence" to
support the nonmovant's opposition to the motion for summary judgment. Id. "Only disputes over
facts that might affect the outcome of the suit under the governing laws will properly preclude the
entry of summary judgment." Anderson, 477 U.S. at 248. Disputed fact issues that are "irrelevant
and unnecessary" will not be considered by a court in ruling on a summary judgment motion. Id.
If the nonmoving party fails to make a showing sufficient to establish the existence of an element
essential to its case and on which it will bear the burden of proof at trial, summary judgment must
be granted. Celotex, 477 U.S. at 322-23.
As an initial matter, the Court GRANTS Defendant's motion for summary judgment as
unopposed because Plaintiffs have failed to timely respond in any manner. See Local Rule CV7(e)(2). Alternatively, the Court briefly addresses the merits of the motion.
First, Plaintiffs assert a claim to quiet title and seek a declaration the home equity loan is
void, arguing Defendant's right to foreclose is barred by the four-year statute of limitations set forth
in Texas Civil Practices and Remedies Code
16.035. Plaintiffs claim Defendant's right to
foreclose terminated on August 7, 2011, four years after the loan was initially accelerated on August
7, 2007. See Am. Compi. [#10] ¶ 18. This theory has no merit. The October 20, 2010 notice
default, which requested payment of less than the full amount due under the accelerated loan,
operated to abandon the August 7, 2007 acceleration as a matter of law, "restoring the contract to
its original condition, including restoring the note's original maturity date." Khan v. GBAKProps.,
Inc., 371 S.W.3d 347, 356 (Tex. App.Houston [1st Dist.] 2012, no pet.). Consequently, the
limitations period in
16.03 5 ceased running in October 2010, and the holder of the mortgage was
no longer under an obligation to foreclose within the original four-year deadline, which would have
expired on August 7, 2011. See, e.g., Leonard v. Ocwen Loan Servicing, LLC, 616 F. App'x 677,
680 (SthCir. 2015); Borenv. U.S. Nat'l BankAss'n, 807 F.3d99, 105 (SthCir. 2015). This same
logic applies to the April 15, 2011 acceleration, which was abandoned when Plaintiffs received the
October 13, 2013 notice of default requesting payment of less than the full balance of the loan.
Having abandoned the August 2007 and April 2011 accelerations, the summary judgment
evidence establishes Defendant's foreclosure right is not time-barred under
16.03 5. Defendant is
therefore entitled to summary judgment on Plaintiffs' quiet title claim and accompanying request for
West Hous. Trees, Ltd., 352 S.W.3d 32, 38 n.1 (Tex.
App.Houston [1st Dist.] 2011, no pet.) ("When an action for declaratory relief and a suit to quiet
title are based on the same facts and request similar relief, they are both treated as one suit to quiet
Second, Plaintiffs claim Defendant breached the terms of the loan agreement by failing to
properly apply certain payments made in 2003, 2004, and 2006, entitling them to an accounting
before Defendant is permitted to foreclose as well as reasonable attorneys' fees. See Am. Compi.
[#10] ¶IJ 28-30. This claim is also without merit, as Plaintiffs have adduced no evidence establishing
Defendant or any other mortgage servicer misapplied loan payments between 2003 and 2006. Even
if there was such record evidence, each of the alleged breaches occurred at least nine years prior to
the filing of this lawsuit and are therefore barred by the four-year limitations period applicable to
breach-of-contract claims. See TEX. Civ. PRAC. & REM. CODE § 16.004(a); Smith Int'l, Inc.
Grp., LLC, 490 F.3d 380, 386 (5th Cir. 2007). Alternatively, Plaintiffs' breach of contract claims
fail because Texas law prohibits defaulting mortgagors from maintaining an action for breach of
contract. Plaintiffs do not allege, nor have they shown, compliance with their contractual obligations
under the loan. See, e.g., Marsh v. JPMorgan Chase Bank, NA., 888 F. Supp. 2d 805, 815 (W.D.
Tex. 2012); see also Ybarra
Fargo Bank, NA., 757 F. App'x 471, 474 (5th Cir. 2014).
Consequently, summary judgment is due to be granted in favor of Defendant and Plaintiffs are not
entitled to an accounting or attorneys'
Plaintiffs have failed to respond to Defendant's motion for summary judgment and have not
come forward with any competent summary judgment evidence of the existence of a genuine fact
issue. Plaintiffs have failed to establish they are entitled to any relief in law or equity, and Defendant
is therefore entitled to summary judgment on each of Plaintiffs' claims.
Having determined Defendant is entitled to summary judgment on this basis, the Court need not reach the
remaining arguments in support of Defendant's position.
IT IS ORDERED that Defendant Deutsche Bank National Trust Company's Motion
for Summary Judgment [#20] is GRANTED.
SIGNED this the /8
day of May 2016.
UNITED STATES DISTRICT JUDGE
395 msj ord mns.frm
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