Wood v. Bank of Am.
| Decision Date | 23 April 2015 |
| Docket Number | CIVIL ACTION NO. 4:14-CV-00073-O |
| Parties | ELAINE WOOD, INDIVIDUALLY v. BANK OF AMERICA, ET AL. |
| Court | U.S. District Court — Northern District of Texas |
Pending before the Court is Defendants Ocwen Loan Servicing, LLC ("Ocwen"); HSBC Bank USA, N.A., as Trustee for Certificate Holders of Deutsche ALT-A Securities Mortgage Loan Trust, Series 2007-1 Mortgage Pass-Through Certificates Series 2007-1 ("HSBC"); and Mortgage Electronic Registration Systems, Inc. ("MERS") (collectively, "Defendants"), Motion for Summary Judgment [doc. 38], filed on October 2, 2014. After reviewing the motion, response, reply, the pleadings and filings in this case, and applicable law, the Court recommends that Defendants' motion be GRANTED.
On May 2, 2007, Plaintiff Elaine Wood ("Plaintiff") executed a $513,000 promissory note, originally payable to GreenPoint Mortgage Funding, Inc. ("GreenPoint").1 (Defendants' Appendix to Brief in Support of Defendants' Motion for Summary Judgment ( ), Ex. Al.) Plaintiff used the loan principal to purchase a single-family residence at 403 Timber Lake Drive, Southlake, Texas (the "Property") by way of a warranty deed, recorded in Tarrant County, Texas. Under the Note, if Plaintiff failed to pay the full amount of each monthly payment on the datedue, she would be in default. (Defs.' App., Ex. Al at 9.) Further, the Note provides that, if Plaintiff is in default, the Note holder can require Plaintiff to pay the full amount of unpaid principal and interest following thirty-days written notice by first class mail or actual delivery of such acceleration and Plaintiff's failure to cure. (Defs.' App., Ex. Al at 9.)
Plaintiff also executed a deed of trust to secure the Note, recorded in Tarrant County, Texas, creating a lien on the property. (Pl.'s Am. Compl., Ex. B at 17-32.) Defendant MERS was listed in the Deed of Trust as a beneficiary and nominee for GreenPoint and GreenPoint's successors and assigns. (Pl.'s Am. Compl., Ex. B at 18-19.) The Deed of Trust requires that all notices be in writing and states that such notices are deemed to have been provided when mailed by first class mail or when actually delivered to the borrower's notice address. (Pl.'s Am. Compl., Ex. B at 26.) Additionally, the Deed of Trust states that, without prior notice to the borrower, it can be sold and that the loan servicer can be changed with notice to the Plaintiff, stating the name and address of the new loan servicer. (Pl.'s Am. Compl., Ex. B at 27-28.) The Deed of Trust also requires the lender to provide notice to the borrower prior to acceleration, following default, specifying: (1) the default, (2) the action required to cure, (3) a date not less than thirty days from the date the notice is given by which the default must be cured, and (4) that failure to cure the default on or before that date will result in acceleration of the sums secured and the sale of the property. (Pl.'s Am. Compl., Ex. B at 29.) Further, the Deed of Trust requires the lender or trustee to give notice of the time, place, and terms of any foreclosure sale, if invoked, by posting and filing the notice at least twenty-one days prior to the sale. (Pl.'s Am. Compl., Ex. B at 29.) Finally, the Deed of Trust states that:
All rights, remedies and duties of the Trustee . . . may be exercised or performed by one or more trustees acting alone or together. Lender, at its option and without cause, may . . . remove or substitute any trustee, add one or more trustees, orappoint a successor trustee to any Trustee without the necessity of any formality other than a designation by the Lender in writing.
(Pl.'s Am. Compl., Ex. B at 29.)
Bank of America, N.A. ("BANA") originally serviced the Note and Deed of Trust under a pooling and servicing agreement. (Defs.' App. at 3.) Beginning February 2010, Plaintiff defaulted on the Note, and BANA sent multiple notices of her default to her by certified mail. (Defs.' App. at 3.) Specifically, on December 13, 2010, BANA sent Plaintiff a letter by certified mail stating:
. . . [BANA] reserves the right to accept or reject a partial payment of the total amount due without waiving any of its rights herein or otherwise. . . .
If the default is not cured on or before January 12, 2011, the mortgage payments will be accelerated with the full amount remaining accelerated and becoming due and payable in full, and foreclosure proceedings will be initiated at that time. As such, the failure to cure the default may result in the foreclosure and sale of your property.
(Defs.' App., Ex. A4 at 42) (emphasis in original.)
On December 27, 2011, GreenPoint, through MERS, assigned the Note and Deed of Trust to HSBC. (Pl.'s Am. Compl. at 3 & Ex. C.) The assignment was recorded in TarrantCounty, Texas. (Pl.'s Am. Compl. at 3 & Ex. C.) Plaintiff failed to cure the default, and on March 28, 2012, BANA, through Recon Trust Company, N.A. ("Recon"), served Plaintiff with a notice of acceleration and foreclosure. (Defs.' App., Ex. A5 at 44.) On April 3, 2012, HSBC, through BANA as loan servicer and attorney-in-fact, executed an appointment of substitute trustee, appointing four individuals and Recon as substitute trustees under the Deed of Trust, which was filed in Tarrant County on April 9, 2012. (Defs.' App. at 4 & Ex. A6 at 45.)
In November 2012, Plaintiff filed for bankruptcy. (Defs.' App., Ex. A7.) In the bankruptcy schedules, Plaintiff listed BANA as a "secured creditor" for the Note and the Deed of Trust as a "first lien" on the property. (Defs.' App., Ex. A8 at 63.) Plaintiff also acknowledged that $512,985 was due under the Note and estimated that her arrearage on the Note was $34,259.81. (Defs.' App., Ex. A8 at 57.) Plaintiff's bankruptcy was discharged on August 27, 2013. (Defs.' App., Ex. A9 at 80.) Thereafter, with Plaintiff still in default, BANA, through Recon, served Plaintiff by certified mail with notice of a substitute trustee's sale, stating that the property would be sold at a foreclosure sale on December 3, 2013. (Defs.' App., Ex. A10 at 82.) Defendants claim that this notice was provided at least twenty-one days before the scheduled foreclosure sale; however, no date appears on this notice.2 (Defs.' App. at 5 & Ex. A10 at 82.)
Two days prior to the scheduled foreclosure sale, the loan servicing rights were transferred from BANA to Ocwen. (Defs.' App. at 5.) Plaintiff was provided advance notice of the servicing transfer in a letter dated November 12, 2013. (Pl's Amend. Compl., Ex. D at 35.) Plaintiff failed to cure the default (Defs.' App. at 5), and the property was sold to HSBC by substitute trustee's deed on December 3, 2013 (Defs.' App. at 5 & Ex. A12 at 85-88). Thetrustee's deed was recorded in Tarrant County3 on December 20, 2013. (Defs.' App. at 5 & Ex. A12 at 88.)
On December 2, 2013, Plaintiff filed a Verified Petition in the 153rd Judicial District Court of Tarrant County, Texas. Plaintiff filed her First Amended Petition on December 20, 2013. On January 7, 2014, the state court entered a Temporary Restraining Order. Defendant BANA removed the action to this Court on February 3, 2014. Thereafter, on February 21, 2014, Defendants filed a motion for Judgment on the Pleadings. In an order dated May 9, 2014, the Court denied Defendants' motion for Judgment on the Pleadings and granted Plaintiff leave to amend her complaint. On June 9, 2014, Plaintiff filed her Second Amended Complaint. In such complaint, Plaintiff alleges that the note is paid in full. (Pl.'s Am. Compl. at 5.) Plaintiff also alleges causes of action against Defendants for: (1) conspiracy to defraud; (2) breach of contract; and (3) misrepresentation. (Pl.'s Am. Compl. at 4-9.) In addition, Plaintiff appears to implicitly allege a claim of wrongful foreclosure as both the title and contents of the complaint describe such action. (Pl.'s Am. Compl. at 1-2) ("This is a suit of Wrongful Foreclosure, Sale, Eviction and Quiet Title . . . .") In their motion for summary judgment, Defendants argue that the Court should grant summary judgment against all of Plaintiff's claims pursuant to Federal Rule of Civil Procedure 56(a)-(c). (Defendants' Motion for Summary Judgment ( ) at 1.)
Summary judgment is proper when the record establishes "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). An issue is "genuine" if "it is real and substantial as opposed to merely formal, pretended, or a sham." Bazan v. Hidalgo Cty., 246 F.3d 481, 489 (5th Cir. 2001). Facts are"material" if they "might affect the outcome of the suit under governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). To determine whether there are any genuine issues of material fact, the Court must first consult the applicable substantive law to ascertain what factual issues are material. Lavespere v. Niagara Mack & Tool Works, Inc., 910 F.2d 167, 178 (5th Cir. 1990), overruled on other grounds, Little v. Liquid Air Corp., 37 F.3d 1069 (5th Cir. 1994). Next, the Court must...
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