Williams v. Countrywide Home Loans, Inc.
| Decision Date | 18 July 2007 |
| Docket Number | Civil Action No. H-06-2874. |
| Citation | 504 F.Supp.2d 176 |
| Parties | Wayne E. WILLIAMS, Plaintiff, v. COUNTRYWIDE HOME LOANS, INC., Banker's Trust of Calif., Deutsche Bank National Trust Co., Secretary of Veterans Affairs, Defendants. |
| Court | U.S. District Court — Southern District of Texas |
Wayne E. Williams, Houston, TX, pro se.
Calvin Don Clayton, Courtney Nicole Kano, Robert T. Mowrey, Locke Liddell Sapp L.L.P., Dallas, TX, Christopher Price Mebane, Derrick Bryan Carson, Locke Liddell and Sapp, Houston, TX, for Defendants.
The plaintiff, Wayne Williams ("Williams"), sued the defendants, Countrywide Home Loans Inc. ("Countrywide"), Banker's Trust of California ("Banker's Trust"), Deutsche Bank National Trust Company ("Deutsche Bank") (together, the "lender defendants"), and the Secretary of Veterans Affairs. Williams alleges that the lender defendants violated federal and state statutes governing mortgage documents, breached the mortgage lending contract, violated the automatic stay that was triggered when Williams filed for bankruptcy, and committed other offenses related to his mortgage loan. Williams alleges that both the Note and Deed of Trust on his home are invalid and that the lender defendants wrongfully foreclosed on that home.
The lender defendants have moved for summary judgment on Williams's claims. (Docket Entry No. 6). The motion is based on the statute of limitations and on Williams's failure to prove an essential element of each claim. Williams has responded (Docket Entry No. 11) and the lender defendants have replied (Docket Entry No. 12).
Based on the motion, the response, and the reply; the pleadings; the parties' submissions; and the applicable law, this court grants the lender defendants' motion for summary judgment on all claims and enters final judgment by separate order. The reasons are explained in detail below.
On July 25, 1995, Williams signed a Deed of Trust Note with the Secretary of Veterans Affairs and a Deed of Trust securing payment on the Note with real property located on Claridge Drive, Houston, Texas. The Note amount was $83,566.00. Countrywide was the servicer for the mortgage loan.
On September 19, 1995, Williams received a letter from Countrywide stating that the loan was being transferred. The letter stated:
Your home loan is in the process of being transferred to Countrywide ... The effective date of your transfer is Sept. 30, 1995. Beginning Oct. 1, 1995, your payments should be mailed to Countrywide.
(Docket Entry No. 1, Ex. C-2). The Note and Deed of Trust were transferred to Banker's Trust, which acted as trustee for "Lender Mortgage Trust 1995-3." Deutsche Bank purchased Banker's Trust in 1999 and became its successor-in-interest.
Williams defaulted on his monthly payments to Countrywide. In early 2003, Countrywide moved to foreclose on Williams's property. Williams filed for bankruptcy in January 2003, December 2003, May 2004, and June 2005. The first three bankruptcies were dismissed because Williams did not make the confirmation payments to the trustee. During the third bankruptcy, the court entered an order stating that "in the event Debtor's case is dismissed and Debtor or Co-Debtor files another petition for an order of relief under Title 11, then the automatic stay of 11 U.S.C. §§ 362 and 1301 shall not apply to [Countrywide] and [the Property] described above." (Docket Entry No. 6 at 5).
The bankruptcy court dismissed Williams's third bankruptcy case in February 2005. Williams filed a fourth bankruptcy petition on June 1, 2005. Countrywide reposted the property for sale on June 7, 2005. Countrywide and Williams reached an agreement under which the sale was rescinded. The bankruptcy court entered an agreed order that conditioned the automatic stay on Williams continuing to make mortgage payments. Williams defaulted. The property was sold to Deutsche Bank in a foreclosure sale on April 4, 2006.
Williams filed this suit in state court in April 2006. Countrywide was served with process on August 8, 2006. (Docket Entry No. 1). Banker's Trust and Deutsche Bank timely joined Countrywide in removing the case based on federal question jurisdiction. The Secretary of Veterans Affairs and John Does 1-10 were not served.
Williams alleges that the lender defendants violated the Truth-in-Lending Act ("TILA"), 15 U.S.C. §§ 1601 et seq. Williams alleges that he hired a professional consumer advocate to analyze the loan documents. The consumer advocate found that the lender defendants failed to make certain required disclosures. (Docket Entry No.1, Ex. C-1 at 8). Williams alleges that the lender defendants did not inform him of his right to rescind the contract and failed to provide him with the required three-day cooling-off period. Williams also alleges that the lender defendants violated the Fair Debt Collection Practices Act, 15 U.S.C. § 192(g)(a)(1)-(5); the Real Estate Settlement Procedures Act, 12 U.S.C. § 2605(b)(2)(B); the UCC, TEX. BUS. & COM.CODE §§ 9.101 et seq; breached their fiduciary duty; violated the Equal Credit Opportunity Act, 12 C.F.R § 202.14(a); breached the mortgage loan contract; violated the automatic bankruptcy stay; violated the Texas Deceptive Trade Practices Act, TEX. Bus. & COM.CODE § 17.46; and committed acts that were "unfair." Williams seeks damages, relief from the foreclosure, and other equitable relief. The lender defendants have moved for summary judgment on all claims.
Summary judgment is appropriate if no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. FED. R. Civ. P. 56. The movant bears the burden of identifying those portions of the record it believes demonstrate the absence of a genuine issue of material fact. Lincoln Gen. Ins. Co. v. Reyna, 401 F.3d 347, 349 (5th Cir. 2005) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)).
If the burden of proof lies with the nonmoving party, the movant may either (1) submit evidentiary documents that negate the existence of some material element of the opponent's claim or defense, or (2) if the crucial issue is one on which the opponent will bear the ultimate burden of proof at trial, demonstrate that the evidence in the record insufficiently supports the essential element or claim. Celotex, 477 U.S. at 330, 106 S.Ct. 2548. While the party moving for summary judgment must demonstrate the absence of a genuine issue of material fact, it does not need to negate the elements of the nonmovant's case. Boudreaux v. Swift Transp. Co., Inc., 402 F.3d 536, 540 (5th Cir.2005). "An issue is material if its resolution could affect the outcome of the action." DIRECTV, Inc. v. Robson, 420 F.3d 532, 536 (5th Cir.2005) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). If the moving party fails to meet its initial burden, the motion for summary judgment must be denied, regardless of the nonmovant's response. Baton Rouge Oil & Chem. Workers Union v. ExxonMobil Corp., 289 F.3d 373, 375 (5th Cir.2002).
When the moving party has met its Rule 56(c) burden, the nonmoving party cannot survive a summary judgment motion by resting on the mere allegations of its pleadings. The nonmovant must identify specific evidence in the record and articulate the manner in which that evidence supports that party's claim. Johnson v. Deep E. Texas Reg'l Narcotics Trafficking Task Force, 379 F.3d 293, 305 (5th Cir. 2004). This burden is not satisfied by "some metaphysical doubt as to the material facts, conclusory allegations, unsubstantiated assertions, or only a scintilla of evidence." Little v. Liquid Air Corp., 37 F.3d 1069, 1076 (5th Cir.1994).
In deciding a summary judgment motion, the court draws all reasonable inferences in the light most favorable to the nonmoving party. Anderson, 477 U.S. at 255, 106 S.Ct. 2505. "Rule 56 mandates the entry of summary judgment, after adequate time for discovery, and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322, 106 S.Ct. 2548.
The TILA is a federal consumer protection statute that provides consumers with a cause of action against creditors that fail to make required disclosures. 15 .U.S.C. §§ 1601 et seq.; 12 C.F.R. § 226 ("Regulation Z"). The purpose of the TILA is to 12 C.F.R. § 226.1(b). Regulation Z applies to each individual or business that offers or extends credit when four conditions are met:
(i) credit is offered or extended to consumers;
(ii) offering or extension of Credit is done regularly;
(iii) credit is subject to a finance charge or is payable by a written agreement in more than 4 installments; and
(iv) credit is primarily for personal, family, or household purposes.
The TILA applies in this case. Williams meets the requirements of a "consumer"1 and the lender defendants meet the definition of a "creditor."2 The lender defendants offered Williams credit; the lender defendants regularly offer or extend credit (Countrywide is a loan servicer); the credit was subject to a finance charge and payable in more than four installments; and the credit was used primarily...
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