Mortgage v. Flores

• Decision Date: 20 October 2010
• Docket Number: Civil Action No. C–09–312.
• Citation: 747 F.Supp.2d 794
• Parties: VANDERBILT MORTGAGE AND FINANCE, INC., Plaintiff,v.Cesar FLORES, et al, Defendants.
• Court: U.S. District Court — Southern District of Texas

747 F.Supp.2d 794

VANDERBILT MORTGAGE AND FINANCE, INC., Plaintiff,

v.Cesar FLORES, et al, Defendants.

Civil Action No. C–09–312.

United States District Court, S.D. Texas, Corpus Christi Division.

Oct. 20, 2010.

Jorge C. Rangel, Jaime Santiago Rangel, Rangel Law Firm PC, James W. Upton, Kenneth Clifford Littlefield, Upton Mickits & Heymann, LLP, Corpus Christi, TX, Cristina Espinoza Rodriguez, Stephen G. Tipps, Baker Botts, Jennifer Anne Powis, Senior Regional Representative, Houston, TX, Edward S. Sledge, IV, Thomas W. Thagard, III, Maynard Cooper et al., Birmingham, AL, Patton G. Lochridge, McGinnis Lochridge et al., Austin, TX, for Plaintiff.Baldemar F. Gutierrez, Attorney at Law, J. Javier Gutierrez, The Gutierrez Law Firm, Inc., Alice, TX, for Defendants.

ORDER

JANIS GRAHAM JACK, District Judge.

On this day came to be considered (1) Intervenors Maria and Arturo Trevino's Motion for Partial Summary Judgment (D.E. 124); (2) Intervention–Defendants Vanderbilt Mortgage and Finance, Inc. and CMH Homes' Motion for Summary Judgment (D.E. 145); (3) Intervention–Defendant Kevin Clayton's Motion for Summary Judgment (D.E. 146); and (4) Intervention–Defendant Clayton Homes, Inc.'s Motion for Summary Judgment (D.E. 147). For the reasons explained below, the Intervenors' Motion for Partial Summary Judgment (D.E. 124) is DENIED. Intervention–Defendants Vanderbilt, CMH Homes and Clayton Homes Inc.'s Motions for Summary Judgment, (D.E. 145, 147) are DENIED IN PART and GRANTED IN PART. Intervention–Defendant Kevin Clayton's Motion for Summary Judgment (D.E. 146) is GRANTED.

I. Jurisdiction

This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1331, federal question, because Intervenors Maria and Arturo Trevino brought claims under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961–1968 (“RICO”), and Intervention–Defendant CMH Homes, Inc. properly removed the case to this Court pursuant to 28 U.S.C. § 1441. (D.E. 34.)

II. Background

The general factual and procedural background of this case is laid out in the Court's August 25, 2010 Orders on Intervention–Defendants' previous motions to dismiss. (D.E. 148, 149.) The facts on which the parties base their motions for summary judgment are as follows:

Intervention–Defendant CMH Homes, the retail arm of Intervention–Defendant Clayton Homes, Inc., operates a network of manufactured home retail centers across the United States. CMH offers its customers the opportunity to purchase a manufactured home via a “land in lieu” transaction.¹ CMH advertised these “land in lieu” transactions to customers with poor credit as an easier way to purchase a manufactured home. (D.E. 124, Exhibit A, p. 111–114.) ² Intervention–Defendant Vanderbilt Finance and Mortgage, Inc. (“Vanderbilt”), the financing arm of Clayton Homes, Inc., provided the financing for these transactions.

Around January 5, 2002, Counter–Plaintiffs Cesar Flores and Alvin E. King purchased a manufactured home from CMH Homes in Corpus Christi in a “land in lieu” transaction. Upon signing their purchasing documents, they confirmed that two vacant lots located in Jim Wells County (Lots 34 and 35) and owned by the Trevinos would serve as additional security for their obligation to make payments on the manufactured home. (D.E. 144, p. 4) ³ The main documents involved were the Retail Installment Contract (“the Contract”) governing the sale of the home to Flores and King; the Deed of Trust (“DOT”), creating the security interest in the Trevino's property in favor of Vanderbilt; and the Builder's and Mechanic's Lien (“BML”), creating the security interest in favor of CMH. On January 7, 2002, these documents were filed with the Jim Wells County clerk, purporting to place liens on the Trevino's property.

The DOT and the BML both contain the purported signatures of Maria and Arturo Trevino and were apparently notarized by Public Notary Benjamin Frazier. (D.E. 144, Ex. 13(DOT), 14(BML).) However, the Intervenors allege that they did not voluntarily pledge their property to secure the purchase of Flores and King's manufactured home. Rather, they contend they were not present when the lien documents were signed, that their signatures were forged, and that their signatures were then falsely notarized by CMH employees. (D.E. 124, p. 4; D.E. 98, p. 4; D.E. 144, Ex. 12 (Maria Trevino deposition), p. 38–39; Ex. 25 (Arturo Trevino deposition), p. 89.)

The Intervention–Defendants dispute the allegations that the Trevinos' signatures on the lien documents were forged. They claim the signatures on the DOT and BML are the genuine signatures of Maria and Arturo Trevino and that no forgery took place. They contend that the Trevinos participated voluntarily in the transaction placing liens on their property. (D.E. 144, p. 5.) As to the Intervenors' contention that their signatures on these lien documents were falsely notarized by CMH employees, the Intervention–Defendants do not altogether deny these allegations and have produced no evidence to suggest they are untrue. Rather, Intervention–Defendants state that, in 2004, CMH's management in Tennessee learned of “potential irregularities” in the use of notary stamps at the Corpus Christi store (referred to as “Lot 214”) through multiple lawsuits from plaintiffs represented by the Trevinos' current lawyer. (D.E. 144, p. 6.) In response to these lawsuits, Vanderbilt and CMH took “immediate action,” distributing formal, company-wide notary guidelines to their employees. (D.E. 144, p. 6.) Ultimately, Paul Nichols, President of Vanderbilt, and David Booth, President of CMH, decided to release the liens on all land pledged in lieu of cash down payments in all transactions at Lot 214. (D.E. 144, p. 6.) Neither home owners nor property owners were informed that the liens had been released.⁴ In addition, the Intervenors present evidence that after filing these releases, Vanderbilt re-purchased from investors all loans based on sales made at the Corpus Christi store. (D.E. 156, Ex. L (Glucksberg deposition), p. 102–104) (Q: “[I]t's your understanding, based on talking to [David Jordan, the corporate representative of CMH and Vanderbilt who signed the lien releases,] that all of the loans that originated out of store 214 were repurchased out of the pools?” A: “Those that are the land in lieu related loans, yes.”)

Based on these events, Maria and Arturo Trevino brought the following claims against Vanderbilt, CMH Homes, Clayton Homes, Inc., and Kevin T. Clayton (collectively, the “Intervention–Defendants”): (1) fraudulent liens under Tex. Civ. Prac. & Rem.Code § 12.002(2); declaratory judgment that Flores and King's debt under the Contract was “paid in full”; (3) common law unfair debt collection; (4) Texas Debt Collection Act (“TDCA”); (5) money had and received; (6) common law fraud; (7) civil conspiracy; (8) and RICO. (D.E. 98, p. 19–33.) They also requested damages based on mental anguish. (D.E. 98, p. 20, 21.)

The Intervenors now move for Partial Summary Judgment on their fraudulent lien claim, asking the Court to find as a matter of law that the Intervention–Defendants filed fraudulent liens on the Trevinos' property in violation of Tex. Civ. Prac. & Rem.Code §§ 12.002 et seq. (D.E. 124.) The Intervention–Defendants also move for Summary Judgment on all of the Intervenors' claims. (D.E. 145).

III. DiscussionA. Summary Judgment

Under Federal Rule of Civil Procedure 56, summary judgment is appropriate if the “pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c)(2). The substantive law identifies which facts are material. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Ellison v. Software Spectrum, Inc., 85 F.3d 187, 189 (5th Cir.1996). A dispute about a material fact is genuine only “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248, 106 S.Ct. 2505; Judwin Props., Inc. v. U.S. Fire Ins. Co., 973 F.2d 432, 435 (5th Cir.1992).

On summary judgment, “[t]he moving party has the burden of proving there is no genuine issue of material fact and that it is entitled to a judgment as a matter of law.” Rivera v. Houston Indep. Sch. Dist., 349 F.3d 244, 246 (5th Cir.2003); see also Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the moving party meets this burden, “the non-moving party must show that summary judgment is inappropriate by setting forth specific facts showing the existence of a genuine issue concerning every essential component of its case.” Rivera, 349 F.3d at 247. The nonmovant “may not rely merely on allegations or denials in its own pleading; rather, its response must ... set out specific facts showing a genuine issue for trial.” Fed.R.Civ.P. 56(e)(2); see also First Nat'l Bank of Arizona v. Cities Serv. Co., 391 U.S. 253, 270, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968). The nonmovant's burden “is not satisfied with some metaphysical doubt as to the material facts, by conclusory allegations, by unsubstantiated assertions, or by only a scintilla of evidence.” Willis v. Roche Biomedical Labs., Inc., 61 F.3d 313, 315 (5th Cir.1995); see also Brown v. Houston, 337 F.3d 539, 541 (5th Cir.2003) (stating that “improbable inferences and unsupported speculation are not sufficient to [avoid] summary judgment”). Summary judgment is not appropriate unless, viewing the evidence in the light most favorable to the non-moving party, no reasonable jury could return a verdict for that party. Rubinstein v. Adm'rs of the Tulane Educ. Fund, 218 F.3d 392, 399 (5th Cir.2000).

The Intervenors request partial summary judgment on their fraudulent lien claim pursuant to Federal Rule of Civil Procedure 56(d)(2). (D.E. 124.) Rule 56(d) provides:...