Trevino v. HSBC Mortg. Servs., Inc. (In re Trevino)
| Decision Date | 19 June 2015 |
| Docket Number | ADVERSARY NO. 13–07031,CASE NO: 10–70594 |
| Parties | In re: Jose Sr. Trevino, Teresa Trevino, Debtor(s) Teresa Trevino, et al, Plaintiff(s) v. HSBC Mortgage Services, Inc., et al, Defendant(s) |
| Court | United States Bankruptcy Courts. Fifth Circuit. U.S. Bankruptcy Court — Southern District of Texas |
Karen L. Kellett, Armstrong Kellett Bartholow P.C., Theodore O. Bartholow, Dallas, TX, for Plaintiff.
Robert Bernard Bruner, Norton Rose Fulbright US LLP, Houston, TX, Glenn E. Glover, Bradley Arant Boult Cummings, LLP, Birmingham, AL, Melissa S. Hayward, Franklin Hayward LLP, Michael Peter Parmerlee, Franklin Skierski Hayward LLP, Dallas, TX, for Defendant.
Defendants, U.S. Bank Trust, N.A., Caliber Home Loans, Inc., and HSBC Mortgage Services, Inc. have filed motions to dismiss Jose and Teresa Trevino's complaint for failure to state a claim upon which relief may be granted. (Case No. 13–07031; ECF Nos. 79 and 80). The motions are granted in part and denied in part. The following claims are dismissed:
The motions to dismiss are denied with respect to all other claims.
On August 25, 2010, Jose and Teresa Trevino filed a Chapter 13 bankruptcy petition. (Case No. 10–70594, ECF No. 1). On December 30, 2013, the Trevinos initiated this adversary proceeding against Defendants HSBC Mortgage Services, Inc. (“HSBC”), U.S. Bank Trust, N.A. (“U.S.Bank”), and Caliber Home Loans, Inc. (“Caliber”). (Case No. 13–07031, ECF No. 1).
On February 3, 2014, U.S. Bank and Caliber filed a motion to dismiss Plaintiffs' suit. (ECF No. 13). On March 19, 2014, Plaintiffs filed a response to the motion to dismiss. (ECF No. 22). A scheduling conference was held on April 21, 2014. At the hearing, the Court asked the movants to file a brief in support for their argument that a transferee of a loan in bankruptcy can be a holder in due course. (ECF No. 28 at 12–14). The movants submitted a brief on May 5, 2014. (ECF. No. 29). Plaintiffs filed a reply brief on May 19, 2014. (ECF. No. 32). On August 18, 2014, HSBC filed a motion for judgment on the pleadings. (ECF No. 38).
On August 26, 2014, the Court held a hearing on Defendants' motions and allowed the Trevinos until October 15, 2014 to file an amended complaint. After timely filing the amended complaint, the Trevinos filed a motion for leave to file a second amended complaint on November 4, 2014. (ECF No. 59). On February 27, 2015, the Court held a hearing on the motion to amend and ordered that several claims be stricken from the complaint. The Court granted the Trevinos until March 13, 2015 to file a compliant second amended complaint. The Trevinos filed the second amended complaint March 12, 2015. (ECF No. 78). On April 1, 2015, HSBC filed a motion to dismiss. (ECF No. 79). U.S. Bank and Caliber filed a joint motion to dismiss on the same day. (ECF No. 80).
The Trevinos assert the following claims against U.S. Bank and Caliber: (i) a claim objection for a claim for payment of 2010 real estate taxes; (ii) violations of the Fair Debt Collection Practices Act; (iii) the common law tort of unreasonable debt collection; (iv) violations of the Texas Debt Collection Act; (v) breach of contract; (vi) abuse of process; and (vii) claim objections. (ECF No. 78).
The Trevinos assert the following claims against HSBC: (i) abuse of process; (ii) violations of the automatic stay; (iii) relief pursuant to Fed. R. Bankr.P. 3001 ; (iv) claim objections; (v) violations of the FDCPA; (vi) violations of the Texas Debt Collection Act; (vii) unreasonable debt collection; (viii) breach of contract; and (ix) negligence and gross negligence.
The Trevinos have requested injunctive relief, declaratory relief, sanctions, and actual and punitive damages.
On February 21, 2005, the Trevinos executed a note, secured by a mortgage against their home, payable to Crevecor Mortgage, Inc. The Trevinos contend the mortgage was transferred to HSBC on July 10, 2009. (ECF No. 78 at 6). HSBC alleges the mortgage was transferred on March 31, 2005. (ECF No. 79–3). The Trevinos filed a chapter 13 petition and a Uniform Plan and Motion for Valuation of Collateral on August 25, 2010. The plan was confirmed on November 18, 2010. (Case No. 10–70594; ECF No. 34). The chapter 13 plan provided that the regular monthly mortgage payment would be paid by the Trustee to HSBC. (ECF No. 78 at 6). The plan also provided that the trustee would pay HSBC the arrearages on the note totaling $14,521.19 throughout the lifetime of the plan. Id.
Notably, the plan did not provide for the payment of real estate taxes. The Edinburg Independent School District, South Texas Independent School District, South Texas College, and Hidalgo County filed various proofs of claim totaling $1,878.76 in unpaid 2010 real estate taxes. Id. at 7. HSBC filed its own proof of claim on December 20, 2010, listing arrearages, fees, and other charges of $19,685.50. Id. The Trevinos allege that HSBC did not provide sufficient documentation of its claim for pre-petition fees and charges.
On January 24, 2011, the Trustee filed her notice of intent to pay the claims. (ECF No. 78–1 at 113). The notice showed that the Trustee would make monthly mortgage payments to HSBC as well as pay the $19,685.50 in arrearages and other charges. Id. The notice also showed that the Trustee would pay the ad valorem tax claims of Edinburg CISD, South Texas ISD, South Texas College, and Hidalgo County.1 Id. at 114. This was an error by the Trustee. The confirmed plan did not provide for payment of the ad valorem tax claims. According to the Trustee's record of payments, the Trustee began paying the tax claims on April 21, 2011. Id. at 126.
On April 13, 2011, the Property Tax Department of HSBC mailed a letter to the Trevinos claiming that their 2010 property taxes to Hidalgo County were severely delinquent and requesting proof of payment. Id. at 173. The letter requested proof of payment in the form of a canceled check, tax payment receipt, or a copy of a confirmed chapter 13 plan. It went on to state:
On May 17, 2011, the Trevinos allege that HSBC made a request for permission to pay 2010 property taxes to Hidalgo County in the amount of $2,057.80 and for $641.59 to Edinburg City. HSBC sent the funds to the Hidalgo County Tax Office on June 1, 2011. On June 9, 2011, HSBC sent an almost identical letter to the Trevinos informing them that their Edinburg City property taxes for 2010 were seriously delinquent and requested proof of payment. Id. at 176. Another letter followed on July 13, 2011. Id. at 154. HSBC then advanced an additional $777.01 to Edinburg City on August 10, 2011. As of that date, HSBC had advanced a total of $3,476.40 on behalf of the Trevinos to taxing authorities.
After having learned of HSBC's tax payments, Cindy Boudloche, the chapter 13 Trustee, sent a letter to HSBC informing it that Id. at 153. The letter asked HSBC to carefully review the Trevinos' chapter 13 plan.
Starting in October of 2011, Hidalgo County began refunding to HSBC the property tax payments. As of October 2012, HSBC had been refunded the entire $3,476.40 in 2010 property taxes. Despite having received a full refund for the 2010 taxes, on April 16, 2013, HSBC again requested from the county permission to pay the 2010 taxes. HSBC disbursed $4,450.15 to Hidalgo County on April 22, 2013.2 Hidalgo County then refunded $2,960.66 to HSBC through two checks dated June 24, 2013 and June 27, 2013.
On July 24, 2013, pursuant to Federal Rule of Bankruptcy Procedure 3002.1(c), HSBC filed a Notice of Post–Petition Mortgage Fees, Expenses and Charges as a supplement to its prior proof of claim. (ECF No. 78 at 12). The notice indicates that on April 22, 2013, HSBC paid $2,933.83 for 2010 real property taxes, and $1,516.32 for 2012 real property taxes on the Trevinos' principal residence. (Case No. 10–70594, ECF No. 82). HSBC admits that the Rule 3002.1(c) notice erroneously included funds that had twice been refunded by Hidalgo County. (ECF No. 79 at 7).
The Trustee began reimbursing HSBC pursuant to its 3002.1(c) notice on October 24, 2013. (ECF No. 78 at 13). On September 21, 2013, the Trustee filed a motion to dismiss the Trevinos' bankruptcy case on the grounds that the bankruptcy plan was no longer feasible given HSBC's 3002.1(c) notice. Id. The Trevinos subsequently amended their Chapter 13 plan to account for the supplemental HSBC claims, and the Trustee withdrew her motion to dismiss. (Case No. 10–70594, ECF No. 106 and ECF No. 107).
On November 18, 2013, U.S. Bank Trust, N.A. and Caliber Home Loans, Inc. filed a transfer of claim with the Court, providing notification that HSBC transferred the Trevino Mortgage to U.S. Bank and Caliber. (Case No. 10–70594, ECF No. 90). As a result, the Trustee began making the required payments to movan...
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