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Hudson v. Citimortgage, Inc.

United States District Court, Fifth Circuit

November 6, 2013



DAVID L. HORAN, Magistrate Judge.

This action has been referred to the United States magistrate judge for pretrial management pursuant to 28 U.S.C. § 636(b) and a standing order of reference from the District Court. See Dkt. No. 2. Defendant Citimortgage, Inc. ("Defendant") filed a Motion for Summary Judgment ("Motion") [Dkt. No. 9], seeking judgment in its favor on all claims. For the reasons stated herein, Defendant's Motion should be granted.


This is an action brought by Plaintiff Vernita Hudson ("Plaintiff"), concerning the foreclosure of real property located in Lancaster, Texas (the "Property"). On May 30, 2007, Plaintiff executed a promissory note (the "Note") in the principal amount of $78, 000.00, payable to Fieldstone Mortgage Company ("Fieldstone"). See Dkt. No. 9-2 at 6-9. To secure the Note, Hudson also executed a Deed of Trust on May 30, 2007 ("Deed of Trust"), secured by the Property, and naming Mortgage Electronic Registration System, Inc. ("MERS") as the beneficiary under the Deed of Trust. See id. at 10-28. The Deed of Trust granted broad rights to MERS to act for Fieldstone and its assigns:

Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender's successors and assigns) has the right: to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property; and to take any action required of Lender including, but not limited to, releasing and canceling this Security Instrument.

Id. at 12-13. On May 8, 2009, MERS assigned the Note and Deed of Trust to Defendant (the "Assignment"), and the Assignment was recorded with the Dallas County Clerk on June 10, 2009. See Dkt. No. 9-2 at 3 (¶ 5), 28-30.

Plaintiff failed to make the required payments in accordance with the terms set out by the Note and Deed of Trust and was delinquent for the September 2008 payment and every payment thereafter. See id. at 3 (¶ 6). On March 16, 2009, Defendant notified Plaintiff that the loan was in default and explained how to cure the default. See id. at 9-2 at 32-33. Plaintiff failed to remit the amount needed to cure the default and bring the loan current. See id. at 3 (¶ 8).

On May 20, 2009, Defendant accelerated the Note and notified Plaintiff, via a Notice of Acceleration, of its intent to seek an expedited order of foreclosure. See id. at 36-37. Defendant obtained an Order on March 31, 2010 that allowed the Property to be sold. See id. at 38-39. In February 2011, Defendant issued a Notice of Substitute Trustee Sale, stating that the sale would be held on March 1, 2011. See id. at 41. Defendant purchased the Property at the foreclosure sale for $38, 400.00. See id. at 43.

On August 8, 2012, Plaintiff brought the instant action in the 68th Judicial District Court, Dallas County, Texas, asserting claims that Defendant (1) lacked the authority to foreclose on the Property and (2) wrongfully foreclosed on the Property. See Dkt. No. 1-1 at 6-7. Defendant timely removed the case to federal court on the basis of diversity jurisdiction, see Dkt. No. 1, and then filed this Motion, see Dkt. No. 9. Defendant argues that Plaintiff lacks standing to challenge the foreclosure and that there is no evidence, let alone a genuine issue of material fact, that Defendant lacked authority to foreclose and wrongfully foreclosed on the Property. See Dkt. No. 9. Plaintiff filed a response in opposition to Defendant's Motion asserting that Plaintiff does have standing to assert her causes of action and that Defendant lacked authority to foreclose on the Property, and as a result, Defendant wrongfully foreclosed on the Property. Defendant then filed a reply in support of its Motion. See Dkt. No. 15.

Legal Standards

Under Fed.R.Civ.P. 56, summary judgment is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV.P. 56(a). A factual "issue is material if its resolution could affect the outcome of the action." Weeks Marine, Inc. v. Fireman's Fund Ins. Co., 340 F.3d 233, 235 (5th Cir. 2003). "A factual dispute is genuine, ' if the evidence is such that a reasonable [trier of fact] could return a verdict for the nonmoving party." Crowe v. Henry, 115 F.3d 294, 296 (5th Cir. 1997).

If the moving party seeks summary judgment as to his opponent's claims or defenses, "[t]he moving party bears the initial burden of identifying those portions of the pleadings and discovery in the record that it believes demonstrate the absence of a genuine issue of material fact, but is not required to negate elements of the nonmoving party's case." Lynch Props., Inc. v. Potomac Ins. Co., 140 F.3d 622, 625 (5th Cir. 1998). "Once the moving party meets this burden, the nonmoving party must set forth" - and submit evidence of - "specific facts showing a genuine issue for trial and not rest upon the allegations or denials contained in its pleadings." Id.; Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994) (en banc).

The Court is required to view all facts and draw all reasonable inferences in the light most favorable to the nonmoving party and resolve all disputed factual controversies in favor of the nonmoving party - but only if both parties have introduced evidence showing that an actual controversy exists. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Boudreaux v. Swift Transp. Co., Inc., 402 F.3d 536, 540 (5th Cir. 2005); Lynch Props., 140 F.3d at 625. "Unsubstantiated assertions, improbable inferences, and unsupported speculation are not sufficient to defeat a motion for summary judgment, " Brown v. City of Houston, 337 F.3d 539, 541 (5th Cir. 2003), and neither will "only a scintilla of evidence" meet the nonmovant's burden, Little, 37 F.3d at 1075. Rather, the non-moving party must "set forth specific facts showing the existence of a genuine' issue concerning every essential component of its case." Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998). If, "after the nonmovant has been given an opportunity to raise a genuine factual issue, " "the record, taken as a whole, could not lead a rational trier of fact to find for the non-moving party, then there is no genuine issue for trial." DIRECTV, Inc. v. Minor, 420 F.3d 546, 549 (5th Cir. 2005); Steadman v. Texas Rangers, 179 F.3d 360, 366 (5th Cir. 1999). The Court will not assume "in the absence of any proof... that the nonmoving party could or would prove the necessary facts" and will grant summary judgment "in any case where critical evidence is so weak or tenuous on an essential fact that it could not support a judgment in favor of the nonmovant." Little, 37 F.3d at 1075. "Rule 56 does not impose upon the district court a duty ...

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