Narvaez v. Wilshire Credit Corp..

• Decision Date: 29 December 2010
• Docket Number: No. 3:10–cv–179–M.,3:10–cv–179–M.
• Citation: 757 F.Supp.2d 621
• Parties: Gerardo NARVAEZ, Jr., Plaintiff,v.WILSHIRE CREDIT CORPORATION, and U.S. Bank, National Association, as Successor Trustee to Bank of America, National Association, as Successor by merger to LaSalle Bank, N.A., as Trustee for the MLMI Trust Series 2006–WMC2, Defendants.
• Court: U.S. District Court — Northern District of Texas

757 F.Supp.2d 621

Gerardo NARVAEZ, Jr., Plaintiff,

v.WILSHIRE CREDIT CORPORATION, and U.S. Bank, National Association, as Successor Trustee to Bank of America, National Association, as Successor by merger to LaSalle Bank, N.A., as Trustee for the MLMI Trust Series 2006–WMC2, Defendants.

No. 3:10–cv–179–M.

United States District Court, N.D. Texas, Dallas Division.

Dec. 29, 2010.

Jack B. Peacock, Jr., Cindy K. Shanklin, Dolores G. Gagnon, Gagnon, Peacock & Shanklin, P.C., Dallas, TX, for Plaintiff.Mark D. Cronenwett, Lindsay L. Stansberry, Tracye M. McGaughy, Higier Allen & Lautin P.C., Addison, TX, for Defendants.

MEMORANDUM OPINION AND ORDER

BARBARA M. LYNN, District Judge.

Before the Court is Defendants' Motion for Summary Judgment [Docket Entry # 18]. For the reasons stated below, the Motion is GRANTED in part and DENIED in part.

Factual ¹ and Procedural Background

This case involves a dispute between Plaintiff Gerardo Narvaez, Jr. and the current servicer and owner of the note and deed of trust on his house. In January 2006, Plaintiff purchased a home in Dallas, Texas, executing a promissory note and deed of trust. The note was payable to WMC Mortgage Corp., but the deed of trust named as beneficiary Mortgage Electronic Registration Systems, Inc. (“MERS”), as WMC's nominee. In May 2008, the note and deed of trust were assigned to LaSalle Bank, N.A. Through a series of transactions irrelevant to this Opinion, U.S. Bank, N.A., became the owner and holder of the note. The loan is serviced by Wilshire Credit Corporation.

In 2008, Defendants ² began charging Plaintiff for “force-placed” insurance, which is insurance coverage lenders place on a property when the owner fails to maintain homeowner's insurance. Plaintiff claims he had his own homeowner's insurance policy when he was charged for the force-placed coverage, and that, therefore, he was charged by mistake. Plaintiff further avers that he called Defendants to dispute the force-placed insurance charges, and that Defendants eventually removed some charges, but did not sufficiently credit Plaintiff's account for others. Throughout the period he was being charged for the insurance, Plaintiff made his regular mortgage payments, deducting the amount for the force-placed insurance charges.

In July 2009, Plaintiff fell behind on his loan payments. This was apparently due, at least in part, to a violent attack that occurred at Plaintiff's home on July 1, 2009, during which Plaintiff was attacked and shot at by three armed intruders, two of whom Plaintiff shot and killed before fleeing his home to avoid being shot by others of the assailants. Afraid to return to his home, Plaintiff stayed elsewhere until September 2009, and informed Defendants of a new mailing address. Plaintiff has not been current on his payments since June 2009.

On September 29, 2009, Defendants sent Plaintiff a notice of default and intent to accelerate, stating a balance due of $7,850.11. Plaintiff claims that in September and October of 2009, he had several phone conversations with Defendants' representatives, during which Plaintiff offered to make additional payments to eventually become current on his loan. Plaintiff claims Defendants refused to accept these payments and told Plaintiff his only option was a loan modification. Plaintiff claims he received a loan modification application from Defendants, which he completed and submitted, but never received a response. In October 2009, Plaintiff sent a payment for less than the amount due, and Defendants returned it. Plaintiff claims that after his payment was returned, he called Defendants and asked for the amount he needed to pay to cure the default, but that Defendants refused to provide that information.

On November 4, 2009, a notice of acceleration of loan maturity and a notice of foreclosure sale was sent to Plaintiff. However, on November 20, 2009, Defendants rescinded the acceleration of the loan so Plaintiff could cure the default. He did not do so. On December 11, 2009, Defendants again sent a notice of acceleration of loan maturity and a notice of foreclosure sale to Plaintiff, but Defendants once again rescinded the acceleration so that Plaintiff would have another opportunity to cure the default. Again, he did not do so.

On December 30, 2009, Plaintiff filed an Original Petition and Application for Temporary Restraining Order in state court in Dallas County, and on the same day, the court issued a TRO enjoining Defendants from conducting a foreclosure sale or otherwise dispossessing Plaintiff of his interest in his house. In the Original Petition, Plaintiff alleged claims for wrongful foreclosure, breach of contract, negligent misrepresentation, violations of the Real Estate Settlement Practices Act (“RESPA”) and the Texas Debt Collection Act (“TDCA”), slander of title, and unreasonable collection efforts. Plaintiff sought declaratory judgment, an accounting, and actual and exemplary damages. Plaintiff has since withdrawn his claims for wrongful foreclosure, RESPA violations, and slander of title. On January 21, 2010, Defendants removed the case to this Court. Defendants now seek summary judgment on all Plaintiff's claims.³

Legal Standard

Summary judgment is proper when “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).⁴ If a reasonable jury could return a verdict for the non-moving party, then there is a genuine issue of material fact. Gates v. Tex. Dep't of Protective & Regulatory Servs., 537 F.3d 404, 417 (5th Cir.2008) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). The moving party bears the initial burden of identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Lynch Props., Inc. v. Potomac Ins. Co., 140 F.3d 622, 625 (5th Cir.1998). Once the movant carries its initial burden, the burden shifts to the nonmovant to show that summary judgment is inappropriate, by designating specific facts beyond the pleadings that prove the existence of a genuine issue of material fact. See Fed.R.Civ.P. 56(e)(2); Anderson, 477 U.S. at 250, 106 S.Ct. 2505; Fields v. City of S. Houston, 922 F.2d 1183, 1187 (5th Cir.1991). In determining whether genuine issues of material fact exist, “factual controversies are construed in the light most favorable to the nonmovant, but only if both parties have introduced evidence showing that a controversy exists.” Lynch Props., 140 F.3d at 625 (citation omitted).

Discussion

A. Procedural and Evidentiary Issues

Defendants object to several of the claims addressed by Plaintiff in his Response to Defendants' Motion for Summary Judgment.⁵ Simultaneously with his Response, Plaintiff moved to amend his pleadings, asserting for the first time (1) a claim that Defendants lack standing to foreclose on Plaintiff's house because MERS lacked the authority to assign the note to U.S. Bank's predecessor in interest, LaSalle; (2) a claim that Defendants mistakenly charged Plaintiff for force-placed insurance; (3) a claim under § 392.304(a)(19) of the TDCA; and (4) a claim for gross negligence. In his Response, Plaintiff relies on these claims and theories in arguing that genuine issues of material fact exist. In a Memorandum Opinion and Order dated December 28, 2010, 2010 WL 5452115, the Court denied Plaintiff's Motion for Leave to File His Amended Complaint, and thus Plaintiff's Original Petition is his only pleading before the Court. Defendants object to Plaintiff's raising these new claims and theories for the first time in his Response.

Although it is well established in the Fifth Circuit that “a claim that is not raised in the complaint, but, rather, is raised only in response to a motion for summary judgment is not properly before the Court,” Cutrera v. Bd. of Supervisors, 429 F.3d 108, 113 (5th Cir.2005); accord Becker v. Nat'l Educ. Training Grp., No. 3:01–cv–1187–M, 2002 WL 31255021, at *6 (N.D.Tex. Oct. 7, 2002) (Lynn, J.), the Fifth Circuit has also held that “[t]he formal issues framed by the pleadings are not determinative on a motion for summary judgment and evidentiary matter may be developed, showing that the party moved against has presented genuine issues of material fact.” Eastland v. Tenn. Valley Auth., 553 F.2d 364, 370 (5th Cir.1977); see Marsh v. Austin–Fort Worth Coca–Cola Bottling Co., 744 F.2d 1077, 1079 n. 4 (5th Cir.1984) (per curiam) (stating in dicta that “ ‘[t]he formal issues framed by the pleadings are not controlling on a motion for summary judgment; the court must consider the issues presented by the other material offered by the parties on the motion to determine whether the Rule 56 request should be granted’ ” (quoting 10A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2721, at 43 (1983))).⁶ Thus, any new claims raised in Plaintiff's Response are not properly before the Court and cannot create a genuine issue of material fact precluding summary judgment. However, evidentiary material that further develops the allegations in Plaintiff's Original Petition is properly before the Court and is considered in determining whether triable issues of fact exist.

Plaintiff's arguments as to gross negligence and § 392.304(a)(19) of the TDCA present new causes of action and are not properly before the Court. Neither of these claims is mentioned in Plaintiff's Original Petition, and neither of them further develops claims that were originally pleaded. Therefore, the Defendants' objection to these claims is SUSTAINED, and Plaintiff will not be permitted to pursue these claims, so the Court need not consider them in deciding Defendants' Motion for Summary Judgment.

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