Bank of N.Y. Mellon v. Osborn
| Docket Number | Civil Action 3:22-CV-0656-G-BH |
| Decision Date | 05 June 2023 |
| Parties | BANK OF NEW YORK MELLON AS TRUSTEE FOR CWABS, INC. ASSET-BACKED CERTIFICATES, SERIES 2005-4, Plaintiff, v. CHARLES RAY OSBORN and BRIEANNE OSBORN, Defendants. |
| Court | U.S. District Court — Northern District of Texas |
FINDINGS, CONCLUSIONS, AND RECOMMENDATION REFERRED TO U.S. MAGISTRATE JUDGE [1]
Based on the relevant filings, evidence, and applicable law Plaintiff's Motion for Summary Judgment, filed September 26, 2022 (doc. 21), should be GRANTED.
The Bank of New York Mellon as Trustee for CWABS, Inc. Asset-backed Certificates, Series 2005-4 (Plaintiff) seeks foreclosure on real property located at 730 Becky Lane Waxahachie, Texas 75165 (the Property). (doc. 1 at 3.)[2] On April 13, 2005, Charles Ray Osborn (Borrower) executed a Texas Home Equity Note (Note), in favor of America's Wholesale Lender (Lender), for a loan in the principal amount of $492,000.00. (doc. 23-2.) The Note is endorsed in blank by Lender and currently held by Plaintiff. (docs. 23-1 at 1; 23-2 at 3.) Borrower and Brieanne Osborn (Spouse) (collectively Defendants) contemporaneously executed a Texas Home Equity Security Instrument (Deed of Trust) that granted a security interest in the Property to Lender to secure repayment under the Note. (doc. 23-3.) The Deed of Trust named Mortgage Electronic Registration Systems, Inc. (MERS) as the nominee for Lender and its successors and assigns and as the beneficiary of the Deed of Trust. (Id. at 1.) Under the terms of the Note and Deed of Trust, Borrower would be in default if he failed to timely pay the full amount of each required monthly payment and subject to acceleration of the loan and foreclosure proceedings on the Property. (docs. 23-2 at 2; 23-3 at 2-3.)
On February 16, 2012, MERS executed an Assignment of Deed of Trust (Assignment) assigning the Deed of Trust to Plaintiff. (doc. 23-5.) Select Portfolio Servicing, Inc. (Servicer) is the mortgage servicer and attorney-in-fact for Plaintiff. (docs. 23-1 at 1; 23-8.)
At some point in time between late-2014 and 2015, Plaintiff accelerated the maturity date of the Note due to Borrower's failure to submit the monthly payments required under the Note and Deed of Trust. (doc. 26 at 15.) On July 10, 2015, it obtained an order allowing foreclosure under Rule 736 of the Texas Rules of Civil Procedure against Borrower in state court (2015 Foreclosure Action). (Id. at 3-5.) On August 12, 2015, Borrower filed a petition contesting Plaintiff's right to foreclose, which effectively abated the order allowing foreclosure. See Osborn v. The Bank of New York Mellon, No. 3:16-CV-308-G (N.D. Tex. Feb. 3, 2016), doc. 1-2. The state action was removed to federal court, and a judgment dismissing the lawsuit was entered on February 6, 2018. (Id., docs. 19-20.)
In the interim, on September 18, 2017, Servicer sent Borrower a Notice of Default, explaining that he was in default for failure to make required payments, and that the maturity date of the Note and Deed of Trust would be accelerated if the default was not cured on or before October 18, 2017. (doc. 23-6.) On June 29, 2018, Plaintiff's foreclosure counsel sent Borrower a Notice of Acceleration, explaining that he had failed to cure the default, and that the maturity date under Note had been accelerated as a result. (doc. 23-7.)
On March 21, 2022, Plaintiff filed this foreclosure action against Defendants; it seeks a judgment allowing it to proceed with foreclosure in accordance with the Note and Deed of Trust and Texas Property Code § 51.002, or alternatively, a judgment for judicial foreclosure. (See doc. 1.) It alleges that Borrower defaulted on his payment obligations under the Note and Deed of Trust, that he failed to cure such defaults despite its demands, and that the maturity date of the Note had been accelerated, making all unpaid principal and accrued interest due and payable. (Id. at 4.) It also seeks an award of attorney's fees as allowed under the Note, Deed of Trust, and Chapter 38 of the Texas Civil Practices and Remedies Code. (Id. at 5.) On April 28, 2022, Plaintiff filed Spouse's “Disclaimer of Interest”, in which she disclaimed any interest she had in the Property and referenced a divorce decree memorializing her divorce from Borrower that divested her of any interest in the Property. (See doc. 9.)
On September 26, 2022, Plaintiff moved for summary on its claim for judgment authorizing foreclosure. (doc. 21.) Borrower responded on October 12, 2022, and Plaintiff replied on October 21, 2022. (docs. 25, 27.)
Summary judgment is appropriate when the pleadings and evidence on file show that no genuine issue exists 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). “[T]he substantive law will identify which facts are material.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine issue of material fact exists “if the evidence is such that a reasonable jury could return a verdict for the non-moving party.” Id.
The movant makes a showing that there is no genuine issue of material fact by informing the court of the basis of its motion and by identifying the portions of the record that reveal there are no genuine material fact issues. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the movant bears the burden of proof on an issue, it must “establish beyond peradventure all of the essential elements of the claim or defense.” Guzman v. Allstate Assurance Co., 18 F.4th 157, 160 (5th Cir. 2021) (quoting Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986)) (emphasis original). The moving party can also meet its summary judgment burden by “pointing out to the district court that there is an absence of evidence to support the nonmoving party's case.” Celotex Corp., 477 U.S. at 325 (quotations omitted). There is “no genuine issue as to any material fact [where] a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial.” Id. at 323.
Once the movant meets its summary judgment burden, the non-movant must then direct the court's attention to evidence in the record sufficient to establish that there is a genuine issue of material fact for trial. Id. at 324. It must go beyond its pleadings and designate specific facts to show there is a genuine issue for trial. Id.; Anderson, 477 U.S. at 249.[3] Rule 56 imposes no obligation “to sift through the record in search of evidence to support a party's opposition to summary judgment.” Adams v. Travelers Indem. Co., 465 F.3d 156, 164 (5th Cir. 2006) (quoting Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998)). Parties must “identify specific evidence in the record” supporting challenged claims and “articulate the precise manner in which that evidence supports [those] claim[s].” Ragas, 136 F.3d at 458 (citing Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir. 1994)). While all of the evidence must be viewed in a light most favorable to the motion's opponent, Anderson, 477 U.S. at 255 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59 (1970)), neither conclusory allegations nor unsubstantiated assertions satisfy the non-movant's summary judgment burden. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc); Topalian v. Ehrman, 954 F.2d 1125, 1131 (5th Cir. 1992). Summary judgment in favor of the movant is proper if, after adequate time for discovery, the motion's opponent fails to establish the existence of an element essential to its case and as to which it will bear the burden of proof at trial. Celotex, 477 U.S. at 322-23.s
Plaintiff argues that it is entitled to summary judgment on its request for judgment authorizing foreclosure and a declaration of its right to foreclose on the Property because all of the requirements to foreclose on Borrower's home equity loan have been established by the summary judgment evidence. (doc. 22 at 10.)
To show entitlement to an order authorizing foreclosure on a home equity loan in Texas,[4] a party must demonstrate that: (1) a debt exists; (2) the debt is secured by a lien created under Article 16, Section 50(a)(6) of the Texas Constitution; (3) a default occurred under the relevant loan documents; and (4) proper service of a notice of default and a notice of acceleration has been effectuated. See Bowman v. CitiMortgage, Inc., 768 Fed.Appx. 220, 223 (5th Cir. 2019) (citing Tex. Prop. Code § 51.002; Huston v. U.S. Bank Nat'l Ass'n, 988 F.Supp.2d 732, 740 (S.D. Tex. 2013), aff'd by 583 Fed.Appx. 306 (5th Cir. 2014)).
Here Plaintiff proffers the Note, Deed of Trust, Assignment, Notice of Default, Notice of Acceleration, and the payoff calculation as summary judgment evidence. It also provides a declaration from Servicer's Document Control Officer, authenticating the loan documents. (See doc. 23-1.) This evidence shows that a debt in the amount of $492,000.00, bearing interest at the rate of 7.75% per annum, exists under the Note (doc. 23-2), and that this debt is secured by a lien on the Property created in the Deed of Trust under Article 16, Section 50(a)(6) of the Texas Constitution (doc. 23-3). It also shows that Plaintiff is the current owner and holder of the Note and the beneficiary of the Deed of Trust. (doc. 23-5.) Plaintiff's summary judgment evidence shows that there is a default under the Note and Deed of Trust because the required monthly payments beginning June 1, 2017, are owed and remain unpaid. (doc. 23-1 at 2.) It also shows that Plaintiff properly complied with the notice requirements contained within the Note and Deed of...
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