Murphy v. HSBC Bank U.S. for the Wells Fargo Asset Sec. Corp.

• Decision Date: 30 January 2017
• Docket Number: CIVIL ACTION NO. H-12-3278
• Parties: PATRICK O'BRIEN MURPHY a/k/a O'BRIEN MURPHY AND BEVERLY MURPHY, Plaintiffs, v. HSBC BANK USA AS TRUSTEE FOR THE WELLS FARGO ASSET SECURITIES CORPORATION HOME EQUITY ASSET-BACKED CERTIFICATES, SERIES 2006-1, Defendant.
• Court: U.S. District Court — Southern District of Texas

PATRICK O'BRIEN MURPHY a/k/a

O'BRIEN MURPHY AND BEVERLY MURPHY, Plaintiffs, v. HSBC BANK USA AS TRUSTEE FOR THE

WELLS FARGO ASSET SECURITIES CORPORATION HOME EQUITY ASSET-BACKED CERTIFICATES,

SERIES 2006-1, Defendant.

CIVIL ACTION NO. H-12-3278

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

January 30, 2017

OPINION AND ORDER

Pending before the Court in the above referenced suit to quiet title and for declaratory judgment, removed from the 270th District Court of Harris County, Texas on diversity jurisdiction, and challenging (1) the validity of the assignment of Plaintiffs Patrick O'Brien Murphy and Beverly Murphy's ("Plaintiffs'" or the "Murphys'") mortgage note to HSBC Bank USA as Trustee for the Wells Fargo Asset Securities Corporation Home Equity Asset-Backed Certificates, Series 2006-1 by Wells Fargo Bank, N.A. ("HSBC") and/or the securitization of the loan and (2) HSBC's standing to foreclose, are the following matters:

(a) Defendant HSBC's first motion for partial summary judgment (instrument #40);

(b) Plaintiffs' related motion to continue to conduct discovery (#42);

(c) HSBC's second motion for partial summary judgment (#65);

(d) United States Magistrate Judge Frances Stacy's memoranda and recommendations (#46 recommending granting of HSBC's first motion for partial summary judgment and denying Plaintiffs' motion to continue to conduct discovery) and #83 (recommending granting of HSBC's second motion for partial summary judgment);

(e) Plaintiffs' objections to the memoranda and recommendations (#46 and 83, respectively); and

(f) HSBC's motion to strike (#74) Plaintiffs' motion to compel (#66).

As a housekeeping matter, the Court finds HSBC's motion to strike (#74) to be moot as United States Magistrate Judge Frances Stacy ruled on the motion to compel (#77) on July 12, 2016.

Standards of Review

I. Motion for Summary Judgment

Summary judgment under Federal Rule of Civil Procedure 56(c) is appropriate when, viewing the evidence in the light most favorable to the nonmovant, the court determines that "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact and that the moving party isentitled to judgment as a matter of law." A dispute of material fact is "genuine" if the evidence would allow a reasonable jury to find in favor of the nonmovant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

Where the nonmovant bears the burden of proof at trial, the movant must offer evidence that undermines the nonmovant's claim or point out the absence of evidence supporting essential elements of the nonmovant's claim; the movant may, but does not have to, negate the elements of the nonmovant's case to prevail on summary judgment." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Lujan v. National Wildlife Federation, 497 U.S. 871, 885 (1990); Edwards v. Your Credit, Inc., 148 F.3d 427, 431 (5^th Cir. 1998). "A complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial." Celotex, 477 U.S. at 323.

If the movant meets its burden and points out an absence of evidence to prove an essential element of the nonmovant's case on which the nonmovant bears the burden of proof at trial, the nonmovant must then present competent summary judgment evidence to support the essential elements of its claim and to demonstrate that there is a genuine issue of material fact for trial. National Ass'n of Gov't Employees v. City Pub. Serv. Board, 40 F.3d 698, 712 (5^th Cir. 1994). "[A] complete failure of proof concerning an essential element of the nonmoving party's case renders all otherfacts immaterial." Celotex, 477 U.S. at 323. The nonmovant may not rely merely on allegations, denials in a pleading or unsubstantiated assertions that a fact issue exists, but must set forth specific facts showing the existence of a genuine issue of material fact concerning every element of its cause(s) of action. Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5^th Cir. 1998).

Conclusory allegations unsupported by evidence will not preclude summary judgment. National Ass'n of Gov't Employees v. City Pub. Serv. Board, 40 F.3d at 713; Eason v. Thaler, 73 F.3d 1322, 1325 (5^th Cir. 1996). "'[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment . . . .'" State Farm Life Ins. Co. v. Gutterman, 896 F.2d 116, 118 (5^th Cir. 1990), quoting Anderson v. Liberty Lobby, Inc.. 477 U.S. 242, 247-48 (1986). "Nor is the 'mere scintilla of evidence' sufficient; 'there must be evidence on which the jury could reasonably find for the plaintiff.'" Id., quoting Liberty Lobby, 477 U.S. at 252. The Fifth Circuit requires the nonmovant to submit "'significant probative evidence.'" Id., quoting In re Municipal Bond Reporting Antitrust Litig., 672 F.2d 436, 440 (5^th Cir. 1978), and citing Fischbach & Moore, Inc. v. Cajun Electric Power Co-Op., 799 F.2d 194, 197 (5^th Cir. 1986). "If the evidence is merely colorable, or is not significantly probative, summary judgment may begranted." Thomas v. Barton Lodge II, Ltd., 174 F.3d 636, 644 (5^th Cir. 1999), citing Celotex, 477 U.S. at 322, and Liberty Lobby, 477 U.S. at 249-50.

Allegations in a plaintiff's complaint are not evidence. Wallace v. Texas Tech Univ., 80 F.3d 1042, 1047 (5^th Cir. 1996)("[P]leadings are not summary judgment evidence."); Johnston v. City of Houston, Tex., 14 F.3d 1056, 1060 (5^th Cir. 1995)(for the party opposing the motion for summary judgment, "only evidence--not argument, not facts in the complaint--will satisfy' the burden."), citing Solo Serve Corp. v. Westown Assoc., 929 F.2d 160, 164 (5^th Cir. 1991). The nonmovant must "go beyond the pleadings and by [his] own affidavits, or by depositions, answers to interrogatories and admissions on file, designate specific facts showing that there is a genuine issue of material fact for trial." Giles v. General Elec. Co., 245 F.3d 474, 493 (5^th Cir. 2001), citing Celotex, 477 U.S. at 324.

The court must consider all evidence and draw all inferences from the factual record in the light most favorable to the nonmovant. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986); National Ass'n of Gov't Employees v. City Pub. Serv. Board, 40 F.3d at 712-13. The Court may not make credibility determinations. Deville v. Marcantel, 567 F.3d 156, 164 (5^th Cir. 2009), citing Turner v. Baylor Richardson Medical Center, 476 F.3d 337, 343 (5^th Cir. 2007).

II. Magistrate Judge's Memorandum and Recommendation

Title 28 U.S.C. § 636(b)(1) provides,

(A) A judge may designate a magistrate judge to hear and determine any pretrial matter pending before the court, except a motion for injunctive relief, for judgment on the pleadings, for summary judgment, to dismiss or quash an indictment or information made by the defendant, to suppress evidence in a criminal case, to dismiss or to permit maintenance of a class action, to dismiss for failure to state a claim upon which relief can be granted, and to involuntarily dismiss an action. A judge of the court may reconsider any pretrial matter under this subparagraph (A) where it has been shown that the magistrate judge's order is clearly erroneous or contrary to law.

(B) a judge may also designate a magistrate judge to conduct hearings including evidentiary hearings, and to submit to a judge of the court proposed findings of fact and recommendations for the disposition, by a judge of the court, of any motion excepted in subparagraph (A), of applications for posttrial relief made by individuals convicted of criminal offenses and of prisoner petitions challenging conditions of confinement.

Similarly, nondispositive matters may be referred to the magistrate judge under Rule 73(a), and dispositive under Rule 72(b).

Objections to the Magistrate Judge's memorandum and recommendation must specifically identify the findings or recommendations for which the party seeks reconsideration. Byars v. Stephens, No. 5:13-CV-189-DAE, 2014 WL 1668488, at *2 (Apr. 14, 2014), citing Thomas v. Arn, 474 U.S. 140, 151 (1985). The court does not have to consider "'[frivolous, conclusive, or general objections.'" Id., citing Battle v. U.S. Parole Comm'n, 834 F.2d 419, 421 (5^th Cir. 1987). A determination by the Magistrate Judge to which the party specifically objects regarding a dispositivematter must be reviewed de novo under 28 U.S.C. § 636(b)(1)(c). The Magistrate Judges's decision about a nondispositive matter is reviewed under a "clearly erroneous or contrary to law" standard. 28 U.S. C. § 636(b)(1)(A); Fed. R. Civ. P. 72(a)("The district judge . . . must . . . modify or set aside any part of the order that is clearly erroneous or is contrary to law."). The reviewing district court may determine that a factual finding is "clearly erroneous" when it is "left with the definite and firm conviction that a mistake has been committed." U.S. v. Stevens, 487 F.3d 232, 240 (5^th Cir. 2007). Findings to which no specific objections are made require that the Court only to decide whether the memorandum and recommendation is clearly erroneous or contrary to law. U.S. v. Wilson, 864 F.2d 1219, 1221 (5^th Cir. 1989). Under this deferential standard of review the court must affirm the magistrate judge's description unless it finds that based on all the evidence it is "left with a definite and firm conviction that a mistake has been committed." Baylor Health Care Sys. v. Equitable Plan Services, Inc., 955 F. Supp. 2d 678, 689 (N.D. Tex. 2013). quoting U.S. v. Gypsum Co., 333 U.S. 364, 395 (1948)The district court "may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge." 28 U.S.C. § 636(b)(1)(C).

The district court may review and reconsider any pretrial matter decided by the magistrate judge "where it...