Callan v. Deutsche Bank Trust Co. Ams.
| Decision Date | 27 March 2014 |
| Docket Number | Civil Action No. 4:13–CV–247. |
| Citation | 11 F.Supp.3d 761 |
| Parties | Elizabeth CALLAN, Plaintiff, v. DEUTSCHE BANK TRUST COMPANY AMERICAS, as Trustee for the Certificateholders of Dover, Mortgage Capital 2005–A Corporation, Grantor Trust Certificate, Series 2005–A, Defendant. |
| Court | U.S. District Court — Southern District of Texas |
Ira D. Joffe, Attorney at Law, Bellaire, TX, for Plaintiff.
Steven A. Leyh, Leyh, Payne & Mallia, PLLC, Houston, TX, for Defendant.
Pending before the Court in the above referenced foreclosure action is (1) a Motion for Summary Judgment filed by Defendant Deutsche Bank National Trust Company Americas, as Trustee for the Certificateholders of Dover Mortgage Capital 2005–A Corporation, Grantor Trust Certificate Series 2005–A (“Defendant”/ “Deutsche”) (Doc. 6);1 (2) an Opposed Motion for Leave to File an Amended Complaint filed by Plaintiff Elizabeth Callan (“Plaintiff”/ “Callan”) (Doc. 11); and (3) a Cross–Motion for Summary Judgment filed by Callan (Doc. 12). On January 27, 2014, United States Magistrate Judge Frances Stacy issued a Memorandum and Recommendation (M & R) (Doc. 20) recommending that Defendant's motion for summary judgment be granted and Plaintiff's motion for leave to file an amended complaint and cross-motion for summary judgment be denied. Plaintiff filed objections to the M & R (Doc. 21) and Defendant filed a response thereto (Doc. 22). For the reasons explained below, after conducting a de novo review of Plaintiffs' objections, the Court declines to adopt the Magistrate Judge's M & R, grants Plaintiff's motion for leave to file an amendment complaint, denies Defendant's motion for summary judgment, and grants Plaintiff's cross-motion for summary judgment.
The facts in this case are undisputed. In August 2004, Callan obtained a home equity loan (the “Loan”) from Deutsche's predecessor in interest, Bank of America, which was secured by her property at 4818 Bayou Vista Drive, Houston, Texas 77091 (“the Property”). Original Pet. ¶¶ 4, 11 (Doc. 1–3); Note (Doc. 12–1 p. 10–12); Deed of Trust (Doc. 12–1 p. 13–19). Plaintiff failed to remit her monthly payment due August 2006, and the Loan has been in arrears since that date. Doc. 1–3 ¶ 23; Notice of Default (Doc. 12–1 p. 23).
On November 6, 2007, Deutsche sent Callan notice that it had elected to accelerate the maturity of the Loan. 2007 Notice of Acceleration (Doc. 12–1 p. 25–26). Deutsche sent a second formal notice of acceleration on July 8, 2008. 2008 Notice of Acceleration (Doc. 12–1 p. 27–28). On July 24, 2008, Deutsche filed an application for expedited non-judicial foreclosure in the 295th District Court of Harris County, Texas, Cause No. 2008–44989. Doc. 1–3 ¶ 12; Verified Tex. Rule Civ. P. 736 Appl. for Home Equity Foreclosure Order (Doc. 12–1 p. 1–9). For reasons not explained in the record, Deutsche filed a motion to dismiss the application which was granted on November 5, 2008. Doc. 1–3 ¶ 18.
Deutsche filed a second application for expedited non-judicial foreclosure in the same court on February 4, 2009, Cause No. 2009–07482. Doc. 1–3 ¶ 19. The court granted the application on April 13, 2009, thereby giving Deutsche authority foreclose the Property. Again, for reasons that are not explained in the record, Defendant did not proceed with the foreclosure. On August 2, 2010, Callan filed for Chapter 13 bankruptcy. Doc. 11–1 ¶ 19. The proceeding was dismissed two months and 16 days later on October 18, 2010. Id.; Order of Dismissal (Doc. 6–4).
On November 3, 2011, Deutsche sent Callan a notice of rescission of acceleration of Loan maturity stating:
Mortgagee under the Deed of Trust referenced below hereby rescinds the notice of acceleration dated December 17, 2008 and all prior notices of acceleration. Mortgagee further agrees that Borrower may continue to pay the indebtedness due Mortgagee pursuant to the terms of the debt secured by the Deed of Trust.
Notice of Rescission (Doc. 15–1). On August 27, 2012, Defendant filed a third application for expedited non-judicial foreclosure, Cause No. 2012–49290, which was granted.2 Doc. 1–3 ¶ 19.
On January 2, 2013, Callan filed suit in Texas state court for a declaratory judgment that more than four years had elapsed since the Deutsche's cause of action accrued and that the lien and power of sale had expired. Id. ¶ 10. She also requested costs and attorney's fees under § 37.009 of the Texas Civil Practice and Remedies Code. Id. ¶ 33–35. Defendant timely removed the case to this Court on the basis of diversity jurisdiction. Notice of Removal (Doc. 1).
Deutsche filed its motion for summary judgment on April 23, 2013, prior to the initial conference. At the initial conference on May 7, 2013, Callan requested and was granted an extension of time to respond to Deutsche's motion and leave to file an amended complaint. Callan filed both her amended complaint and response on May 30, 2013. She seeks to amend her complaint in order to correct the accrual date for the calculation of the statute of limitations on the lien at issue. Pl.'s Mot. for Leave to File Am. Compl. (Doc. 11). In her Original Petition, Callan erroneously calculated the statute of limitations using the date of her default as the date of accrual. Doc. 1–3 ¶ 25. As discussed infra, the accrual date in this case is the date of acceleration, not the date of default. Callan's amended complaint correctly calculates the statute of limitations on Deutsche's lien using the date of acceleration, November 6, 2007, as the date of accrual. Doc. 11–1 ¶ 10. Defendant does not dispute that November 6, 2007 is the date of acceleration. Plaintiff's amended complaint does not allege new or different facts or raise new theories of recovery. Plaintiff does, however, seek to add an additional claim for quiet title based on the same theory that Deutsche's lien is expired. Doc. 11. Deutsche argues, without any reasoning or analysis of the amended complaint, that granting Plaintiff leave to amend her complaint will delay the resolution of the pending lawsuit and prejudice Deutsche's motion for summary judgment. Doc. 14 ¶ 1.
“[T]he grant or denial of an opportunity to amend is within the discretion of the District Court.”Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962). There is generally a presumption in favor of granting leave to amend and a motion for leave to amend should not be denied unless there is undue delay, bad faith, or dilatory motive on the part of the movant; repeated failure to cure deficiencies; or undue prejudice to the opposing party. U.S. ex rel Willard v. Humana Health Plan of Tex. Inc., 336 F.3d 375, 386 (5th Cir.2003). Attempts to raise new theories of recovery by amendment where the opposing party has filed a motion for summary judgment will be closely scrutinized. Parish v. Frazier, 195 F.3d 761, 764 (5th Cir.1999).
Here, the Court finds that Callan has good reason to amend her complaint. The amended complaint correctly applies the law to the facts and does not raise new facts or theories. Allowing amendment will not affect Deutsche's pending motion for summary judgment. Deutsche has not alleged any bad faith or dilatory motive on the part of Callan, and the Court finds that there is none. Accordingly, Callan's motion for leave to file an amended complaint is granted. The Court will consider the amended complaint in ruling on the pending cross-motions for summary judgment.
Summary judgment is proper if the evidence, viewed in the light most favorable to the nonmoving party, shows that there is no genuine dispute of material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56 ; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). A dispute of material fact is “genuine” if the evidence would allow a reasonable jury to find in favor of the non-movant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The substantive law governing the claims determines the elements essential to the outcome of the case and thus determines which facts are material. Id. Where the nonmovant bears the burden of proof at trial, the movant need only point to the absence of evidence supporting an essential element of the nonmovant's case; the movant does not have to support its motion with evidence negating that case. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994). If the movant succeeds, the nonmovant can defeat the motion for summary judgment only by identifying specific evidence of a genuine issue of material fact. Anderson, 477 U.S. at 248–49, 106 S.Ct. 2505.
The issue of whether a suit is time-barred is properly resolved at the summary judgment stage so long as there is no genuine issue of material fact in dispute. See Newby v. Enron Corp., 542 F.3d 463, 468 (5th Cir.2008). Under Texas law, “a sale of real property under a power of sale in a mortgage or deed of trust that creates a real property lien must be made not later than four years after the day the cause of action accrues,” and “on the expiration of the four-year limitations period, the real property lien and a power of sale to enforce the lien becomes void.” Tex. Civ. Prac. & Rem. § 16.035(b), (d). Ordinarily, the cause of action does not begin to accrue until “the maturity date of the last note, obligation, or installment.” Id. § 16.035(e). Where the note or deed of trust contains an optional acceleration clause, however, as in this case, the cause of action accrues “only when the holder actually exercises its option to accelerate.” Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 567 (Tex.2001) (citing Hammann v. H.J. McMullen & Co., 122 Tex. 476, 62 S.W.2d 59, 61 (1933) ; Curtis v. Speck, 130 S.W.2d 348, 351 (Tex.App.-Galveston...
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Callan v. Deutsche Bank Trust Co., Civil Action No. 4:13–CV–247.
...11 F.Supp.3d 761Elizabeth CALLAN, Plaintiff,v.DEUTSCHE BANK TRUST COMPANY AMERICAS, as Trustee for the Certificateholders of Dover, Mortgage Capital 2005–A Corporation, Grantor Trust Certificate, Series 2005–A, Defendant.Civil Action No. 4:13–CV–247.United States District Court, S.D. Texas,......