Sivertson v. Citibank, N.A., Civil Action No. 4:18-CV-169

Citation390 F.Supp.3d 769
Decision Date20 March 2019
Docket NumberCivil Action No. 4:18-CV-169
CourtU.S. District Court — Eastern District of Texas



Came on for consideration the report of the United States Magistrate Judge in this action, this matter having been heretofore referred to the Magistrate Judge pursuant to 28 U.S.C. § 636. On February 14, 2019, the report of the Magistrate Judge (Dkt. #77) was entered containing proposed findings of fact and recommendations that Defendant's Motion to Dismiss Plaintiff's Fourth Amended Complaint with Jury Demand be granted. Having received the report of the Magistrate Judge, having considered Plaintiff's Objections (Dkt. #89), Defendant's Response (Dkt. #91), and having conducted a de novo review, the Court is of the opinion that the Magistrate Judge's report should be adopted.


The underlying facts of this case have been set forth previously; as such, the Court sets forth only those facts pertinent to Plaintiff's Objections.

Plaintiff purchased the real property located at 4008 Saharah Court, Carrollton, Texas 75010 (the "Property") in April 2004, at which time, the value of the Property was purportedly $ 700,000.00. Plaintiff obtained a home equity loan for $ 400,000.00 in mid-2005, and obtained a second home equity loan for $ 1,000,000.00 on December 21, 2006 (the "Loan") (Dkts. #43 at p. 9; #50-1). According to Plaintiff, Citibank fraudulently obtained the appraisal that enabled the Loan to be made, and specifically asserts that "Citibank wanted to loan $ 1,000,000.00 against the [Property]. To support that loan amount, Citibank needed to have the [Property] appraised at a fair-market value of $ 1,250,000 or more (being... above the [Property's] actual fair market value)" (Dkt. #43 at p. 6). The Loan was secured by Plaintiff's execution of a "Texas Home Equity Security Instrument" (the "Security Instrument") in favor of lender Washington Mutual Bank1 (Dkt. #50-1). Under the Security Instrument, Plaintiff was also required to execute a sworn Texas Home Equity Affidavit and Agreement regarding the Property's fair market value ("Affidavit") (Dkt. #50-2), wherein Plaintiff attested that "[t]he extension of Credit is of a principal amount that... does not exceed eighty percent (80%) of the fair market value of the Property on the date the Extension of Credit is made" (Dkt. #50-2).

Plaintiff filed bankruptcy on November 14, 2007, and was discharged on February 22, 2008 (Dkt. #50-3). After the discharge, Plaintiff alleges that he submitted multiple loan modification applications to Defendant between 2008 and 2018 and that Defendant agreed in writing to modify the Loan (Dkt. #43 at pp. 12–15). It is undisputed that Plaintiff has failed to make his monthly mortgage payments and is currently in default under the terms of the Loan.

On June 24, 2013, Defendant filed an application to foreclose Plaintiff's Loan under Texas Rule of Civil Procedure 736 (the "Foreclosure Action"). In re Order for Foreclosure Concerning 4008 Saharah Court, Carrollton, Texas 75010 , No. 2013-70828-431 in the 431st Judicial District Court for Denton County, Texas. Plaintiff, represented by the same counsel, brought suit against Defendant on November 6, 2013, in the 431st Judicial District Court of Denton County, seeking to contest Defendant's right to foreclose, quiet title to the Property, and raise claims for declaratory relief, breach of contract, permanent injunctive relief, and damages; on November 27, 2013, the case was removed to the Eastern District of Texas ("First Lawsuit"). Sivertson v. Citibank N.A., as Trustee for WAMU Asset-Backed Certificates, WAMU Series Number 2007-HE2 , Cause No. 4:13-cv-710 (ECF #1). As a result, the Foreclosure Action was stayed. As the Report pointed out, Plaintiff's complaint in the First Lawsuit is virtually identical to his live complaint in the instant second lawsuit. "In both suits, Plaintiff alleges that: (1) he submitted a significant number of loan modification packages which Defendant accepted but then refused to modify the Loan; and (2) Defendant violated the Texas constitution by making a home equity loan to [Plaintiff] which exceeded 80% of the fair market value of the [Property] " (Dkt. #77 at pp. 3–4) (quoting Cause No. 4:13-cv-710 (ECF #20)). The Court granted Defendant's Motion to Dismiss Second Amended Complaint and dismissed Plaintiff's First Lawsuit on March 31, 2015. Cause No. 4:13-cv-710 (ECF #36, #37).

Some three years later, Plaintiff brought the instant suit on January 19, 2018, against Defendant in the 16th Judicial District Court, Denton County, Texas, Cause No. 18-0574-16 (Dkt. #3). The case was subsequently removed to the Eastern District of Texas (Dkt. #1). Plaintiff filed his Amended Complaint subsequent to removal (Dkt. #9); Defendant thereafter filed a motion to dismiss Plaintiff's claims (Dkt. #14). Plaintiff then filed a further amended complaint, his Second Amended Complaint (Dkt. #23), which Defendant again moved to dismiss (Dkt. #27). Plaintiff moved to file his Third Amended Complaint, thereby mooting the pending dismissal motion (Dkt. #33). On August 3, 2018, Plaintiff filed his Fourth Amended Complaint, the live pleading (Dkt. #43).

By and through his Fourth Amended Complaint, Plaintiff seeks actual and exemplary damages, as well as his attorney's fees and costs, and raises claims for: (1) quiet title; (2) declaratory relief; (3) breach of contract; (4) promissory estoppel; (5) common law fraud; (6) negligent misrepresentation; (7) negligence; (8) gross negligence; (9) a contest of the right to foreclose; and (10) permanent injunctive relief (Dkt. #43). Plaintiff also alleges spoliation and various tolling doctrines (Dkt. #43 at p. 40).

On August 24, 2018, Defendant filed its Motion to Dismiss Plaintiff's Fourth Amended Complaint with Jury Demand, seeking dismissal of all of Plaintiff's claims pursuant to Federal Rule of Civil Procedure 12(b)(6) (Dkt. #50). After receiving several extensions of time (Dkts. #54; #56), Plaintiff responded to the Motion to Dismiss on October 6, 2018 (Dkt. #58). On October 12, 2018, Defendant filed a Reply (Dkt. #59). On October 19, 2018, Plaintiff filed his Sur-Reply (Dkt. #60). The Magistrate Judge entered a Report and Recommendation on February 14, 2019, recommending that Defendant's Motion to Dismiss be granted, and Plaintiff's claims be dismissed (Dkt. #77). On February 21, 2019, the Court granted Plaintiff an extension of time to file objections to March 7, 2019 (Dkt. #81), and on March 8, 2019, the Court again extended Plaintiff's deadline to object to March 14, 2019 (Dkt. #86). On March 15, 2019, without explanation for his untimeliness even after numerous extensions, Plaintiff filed his Objections to the Report and Recommendation (Dkt. #89). On March 18, 2019, Defendant filed a Response (Dkt. #91).


A party who files timely written objections to a magistrate judge's report and recommendation is entitled to a de novo review of those findings or recommendations to which the party specifically objects. 28 U.S.C. § 636(b)(1)(C) ; Fed. R. Civ. P. 72(b)(2)-(3).

As an initial matter, the Court notes that even after two extensions of his deadline to object to the Report, Plaintiff still failed to file his Objections on time. As a result, the Court is not bound to consider his arguments; Plaintiff is not entitled to a de novo review. Madenwald v. JPMorgan Chase Bank, N.A. , 4:13-CV-136, 2014 WL 12576776, at *1 (E.D. Tex. July 18, 2014) ("The objections were filed late and will not be considered by the court."); Chao v. Dars of Texas , 4:15CV169, 2015 WL 6522818, at *1 (E.D. Tex. Oct. 27, 2015) ("Because the objections were received after [the deadline to object], Plaintiff is barred from de novo review by the Court."); Penley v. Sandoval , CIV.A. 4:04CV24, 2005 WL 3970822, at *2 (E.D. Tex. Mar. 8, 2005), aff'd sub nom. Penley v. Collin County, Tex. , 446 F.3d 572 (5th Cir. 2006) ("plaintiff's objections were untimely. Thus, plaintiff is not entitled to de novo review of the objections in relation to the pleadings and the applicable law.") (citing Douglass v. United Services Automobile Association , 79 F.3d 1415, 1417 (5th Cir. 1996) (en banc); 28 U.S.C. § 636(b)(1) ; and Fed. R. Civ. P. 72(b) ). Furthermore, Plaintiff's 19-page Objection is well over the page limit of 8 pages set forth in Local Rule CV-72(c). Notwithstanding this fact, the Court has considered Plaintiff's arguments and find the same to be without merit, as discussed infra.

The Report found that Plaintiff's claims should be dismissed under Rule 12(b)(6) because: (1) each of Plaintiff's claims, except for his claim to quiet title,2 are barred by the applicable statute of limitations; and (2) "[e]ven assuming that Plaintiff's aforementioned claims were not time-barred, such claims must nonetheless be dismissed under Rule 12(b)(6) for failure to state a claim" (Dkt. #77 at p. 11). Plaintiff clarifies in his Objections that "[t]o simplify this case, [Plaintiff] limits the Objections to the Findings and Recommendations relating to [Plaintiff's] Suit to Quiet Title, Contest of the Foreclosure, Declaratory Relief, and Claim for Injunctive Relief" (Dkt. #89 at p. 5). Accordingly, the Court adopts the Report's recommendations as to Plaintiff's claims for breach of contract, promissory estoppel, common law fraud, negligent misrepresentation, negligence, and gross negligence, finding that such claims should be dismissed with prejudice pursuant to Rule 12(b)(6). Furthermore, the Court finds that Plaintiff's claims are not precluded from dismissal by virtue of his assertion of any tolling doctrines or the "spoliation inference rule."

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