Opinion
6:21-CV-01292-ADA-JCM
08-17-2023
JAMES RAY COMPTON, Plaintiff, v. DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR MORGAN STANLEY DEAN WITTER CAPITAL I INC. TRUST 2003-NC2, MORTGAGE PASS THROUGH CERTIFICATES, SERIES 2003-NC2 Defendant.
REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
JEFFREY C. MANSKE, UNITED STATES MAGISTRATE JUDGE
TO: THE HONORABLE ALAN D ALBRIGHT, UNITED STATES DISTRICT JUDGE
This Report and Recommendation is submitted to the Court pursuant to 28 U.S.C. § 636(b)(1)(C), Fed.R.Civ.P. 72(b), and Rules 1(f) and 4(b) of Appendix C of the Local Rules of the United States District Court for the Western District of Texas, Local Rules for the Assignment of Duties to United States Magistrate Judges. Before the Court is Defendant Deutsche Bank National Trust Company's, as Trustee for Morgan Stanley Dean Witter Capital I Trust 2003-NC2, Motion for Summary Judgment (ECF No. 9). For the reasons described below, the Court RECOMMENDS that Defendant's Motion be GRANTED.
I. BACKGROUND
Plaintiff made a claim for quiet title and a claim for a violation of Article 16 of the Texas Constitution after Defendant, Plaintiff's lender, mailed Plaintiff a Notice of Acceleration and Notice of Trustee's Sale and Appointment of Trustee (“Notice of Acceleration and Trustee's Sale”) and filed and posted Notice of Acceleration and Trustee's Sale. Def.'s Mot. at 4 citing Ex. B at 2-3; Ex. B-5 at 2; Ex. B-6. To date, Defendant has not conducted a foreclosure sale of the Property. Id. citing Ex. A at 3. Defendant is the holder of the Texas Home Equity Note (the “Note”) and the assignee of the Texas Home Security Instrument (the “Security Instrument”). Id. at 3 citing Ex. A at 2; Ex. A-1; Ex. A-6.
Plaintiff alleges that he did not receive notice of his default under the Loan or notice of the foreclosure sale of his Property. Id. at 4-5; Def.'s Notice of Removal (ECF No. 1) citing Ex. A at 5. Defendant sent Plaintiff a Notice of Default via certified mail, return receipt requested to the Property on November 4, 2020. Id. at 3 citing Ex. A at 3; Ex. A-9. Defendant also sent Plaintiff a Notice of Acceleration and Trustee's Sale via certified mail, return receipt requested to the Property on August 19, 2021. Id. at 4 citing Ex. B at 3; Ex. B-6.
Plaintiff also claims the Loan violates the Texas Constitution because the original principal balance exceeded 80% of the fair market value of the Property at the time the Loan was made. Id. at 5; Def.'s Notice of Removal citing Ex. A at 5. When signing the Home Equity Affidavit on October 11, 2002, Plaintiff stated, under oath, that the Loan complied with the Texas Constitution and that the original principal balance did not exceed 80% of the fair market value of the Property. Id. at 2 citing Ex. A at 3; Ex. A-4 at 4. Additionally, when executing the Loan Modification Agreement (“Modification”), Plaintiff reaffirmed that the “Loan Documents are composed of duty valid, binding agreements, enforceable in accordance with their terms.” Id. at 2 citing Ex. A at 3; Ex. A-8 at 4.
Defendant moved for summary judgment on June 9, 2023. Def.'s Mot. Plaintiff's deadline to respond to Defendant's Motion expired on June 26, 2023. Local R. for W.D. Tex. CV-7(D)(2). Plaintiff has not filed a response to Defendant's Motion or a motion requesting leave to file an untimely response. Accordingly, the movant's assertions of fact are considered undisputed. Fed.R.Civ.P. 56(e)(2). Since the Defendant's assertions of fact are undisputed, there is no genuine issue of material fact, and the Court may consider whether Defendant is entitled to judgment as a matter of law.
II. LEGAL STANDARD
Summary judgment is appropriate “if the 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(a). A dispute is not genuine if the trier of fact could not, after an examination of the record, find for the nonmoving party. Matsushita Elec. Indus., Co. v. Zenith Radio Corp., 475 U.S. 574, 578 (1986). The moving party bears the burden of showing that no genuine dispute of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). That said, the moving party can satisfy its burden either by producing evidence negating a material fact or pointing out the absence of evidence supporting a material element of the nonmovant's claim. Duplantis v. Shell Offshore, Inc., 948 F.2d 187, 190 (5th Cir. 1991). Throughout this analysis, the Court must view the evidence and all factual inferences in a light most favorable to the party opposing summary judgment. Tolan v. Cotton, 134 S.Ct. 1861, 1866 (2014).
III. ANALYSIS
Defendant argues that it is entitled to judgment as a matter of law on Plaintiff's quiet title claim based on evidence that Defendant provided Plaintiff with all requisite notices, was contractually entitled to foreclose on the Property, and lawfully posted the Notice of Acceleration and Trustee's Sale. Def.'s Mot. at 7. The Security Instrument provides that “[i]t is the express intention of Lender and Borrower that Lender shall have a fully enforceable lien on the Property. It is also the express intention of the Lender and Borrower that Lender's default remedies shall include the most expeditious means of foreclosure available by law.” Ex. A-2 at 14.
Section 51.002 of the Texas Property Code requires the mortgagee to serve the debtor with a notice of default and a notice of sale before foreclosure. TEX. PROP. CODE § 51.002(b), (d); Rodriguez v. Ocwen Loan Servicing, LLC, 306 F App'x 854, 855-56 (5th Cir. 2009). On or about November 4, 2022, Defendant sent Plaintiff a Notice of Default which provided Plaintiff an opportunity to cure his default. Ex. A-9. After Plaintiff failed to cure his default, Defendant filed an Application for an Expedited Order under Rule 736 on February 9, 2021, in the 220thDistrict Court of Hamilton County, Texas. Ex. B at 3; Ex. B-1. After Plaintiff failed to respond or make an appearance, Defendant filed a Motion for Default Order Allowing Foreclosure on March 24, 2021. Ex. B at 3; Ex. B-3. The court granted a Default Order Allowing Foreclosure on March 25, 2021. Ex. B at 3; Ex. B-4. On August 19, 2021, Defendant sent the Notice of Acceleration and Notice of Trustee's Sale to Plaintiff and provided details regarding the date, location, and time of the foreclosure sale. Ex. B at 4; Ex. B-6 at 4, 6, 10, 12, 16, 18. Accordingly, Defendant provided proper notice.
Defendant must also prove that Plaintiff received the notice. “A matter is admitted unless, within 30 days after being served, the party to whom the request is directed serves on the requesting party a written answer or objection addressed to the matter and signed by the party or its attorney.” Fed.R.Civ.P. 36(a). Additionally, “service by certified mail is complete ‘when the notice is deposited in the United States mail'; receipt of the notice by the debtor is not required.” Rodriguez v. U.S. Bank, N.A., Civ. No. SA-12-CV-345-XR, 2013 U.S. Dist. LEXIS 84929, at *28 (citing TEX PROP. CODE § 51.002(e), Lambert v. First Nat'l Bank of Bowie, 993 S.W.2d 833, 835 (Tex. App.-Fort Worth 1999, pet. denied). Plaintiff did not provide a written answer or objection within thirty days. Def.'s Notice of Non-Opp. at 2, Ex. A. Here, Defendant provided evidence that it deposited both the Notice of Default and Notice of Acceleration and Notice of Trustee's Sale in the mail. Ex. A-9; Ex. B at 4; Ex. B-6 at 4, 6, 10, 12, 16, 18. Therefore, Plaintiff is deemed to have admitted that he received the Notice of Default and Notice of Acceleration and Notice of Trustee's Sale. Ex. C-1 at 29-31. Accordingly, Defendant is entitled to judgment as a matter of law on Plaintiff's quiet title claim.
Defendant also argues that it is entitled to judgment as a matter of law on Plaintiff's claim for a violation of Article 16 of the Texas Constitution based on Plaintiff's previous acknowledgment that the Loan fully complied with the Texas Constitution. Def.'s Mot. at 9. Plaintiff previously affirmed under oath that the original amount of the Loan did not exceed 80% of the fair market value of the Property. Ex. A at 3; Ex. A-4 at 4; Ex. A-5.
A “plaintiff may not manufacture a genuine issue of material fact by submitting an affidavit that impeaches prior testimony without explanation.” Doe ex. rel. Doe v. Dallas Indep. Sch. Dist., 220 F.3d 380, 386 (5th Cir. 2000). Additionally, “a nonmoving party may not manufacture a dispute of fact merely to defeat a motion for summary judgment.” Id.; Axxiom Mfg., Inc. v. McCoy Inv., Inc., 846 F.Supp.2d 732, 749 (S.D. Tex. 2012). For an affidavit that contradicts prior testimony to prevail, it must provide “sufficiently persuasive reasons” for the change in testimony. Axxiom, 846 F. Supp, 2d at 750 (quoting EBC, Inc. v. Clark Bldg. Sys., Inc., 618 F.3d 253, 270 (3d Cir. 2010). A Texas court has applied the sham affidavit rule to a case where the Plaintiff previously affirmed in a sworn Texas Home Equity Affidavit and Agreement “that the Loan did not exceed 80% of the Property's market value” and failed to provide persuasive sufficient reasons for the contradiction. Sivertson v. Citibank, N.A. as Tr. for Registered Holders of WAMU Asset-Backed Certificates WAMU Series 2007-HE2 Tr., No. 4:18-CV-169-ALM-CAN, 2019 WL 2519222, at *1, 5 (E.D. Tex. Apr. 22, 2019), R. & R. adopted sub nom. Sivertson v. Citibank, N.A. as Tr. for Registered Holders of WAMU Asset-Backed Certificates WAMU Series No. 2007-HE2 Tr., No. 4:18-CV-169, 2019 WL 5091991 (E.D. Tex. Oct. 11, 2019).
Plaintiff previously executed three documents which contradict his claim that the Loan violates Article 16 of the Texas Constitution. First, on October 11, 2002, Plaintiff agreed in the Home Equity Affidavit that the “Extension of Credit. . . does not exceed eighty percent (80%) of the fair market value of the Property on the date the Extension of Credit is made.” Ex. A-4 at 4, 6. Second, Plaintiff agreed on the same date in the Fair Market Value Affidavit that “on the date of closing that the fair market value is $38,000.” Ex. A-5. The exact amount of the Note, $30,400, is 80% of $38,000. Ex. A-1; Def.'s Mot. at 10. Third, Plaintiff agreed on June 4, 2020, in the Modification that the “the Loan Documents are composed of duly valid, binding agreements, enforceable in accordance with their terms and hereby reaffirmed.” Ex. A-8 at 5.
Plaintiff failed to provide any reasons, let alone any persuasive ones, for his contradictory allegations. Plaintiff reaffirmed the fair market value of the Property on the date he obtained the Loan and that the Loan complied with the Texas Constitution. Ex. C-1 at 28-29, 31. Therefore, Defendant is entitled to summary judgment on Plaintiff's Texas constitutional violation claim.
IV. CONCLUSION
For the reasons outlined above, the undersigned RECOMMENDS that the Defendant's Motion for Summary Judgment (ECF No. 9) be GRANTED and that final Judgment be entered in favor of Defendant consistent with this Recommendation.
V. OBJECTIONS
The parties may wish to file objections to this Report and Recommendation. Parties filing objections must specifically identify those findings or recommendations to which they object. The District Court need not consider frivolous, conclusive, or general objections. See Battle v. U.S. Parole Comm'n, 834 F.2d 419, 421 (5th Cir. 1987).
A party's failure to file written objections to the proposed findings and recommendations contained in this Report within fourteen (14) days after the party is served with a copy of the Report shall bar that party from de novo review by the District Court of the proposed findings and recommendations in the Report. See 28 U.S.C. § 636(b)(1)(C); Thomas v Arn, 474 U.S. 140, 150-53 (1985); Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415 (5th Cir. 1996) (en banc). Except upon grounds of plain error, failing to object shall further bar the party from appellate review of unobjected-to proposed factual findings and legal conclusions accepted by the District Court. See 28 U.S.C. § 636(b)(1)(C); Thomas, 474 U.S. at 150-53; Douglass, 79 F.3d at 1415.