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Devdara, L.L.C. v. Wells Fargo Bank, N.A.

United States District Court, S.D. Texas, Houston Division

June 9, 2017

DEVDARA, L.L.C., A TEXAS LIMITED LIABILITY COMPANY, Plaintiff,
v.
WELLS FARGO BANK, N.A., Defendant.

          ORDER

          VANESSA D. GILMORE UNITED STATES DISTRICT JUDGE.

         Pending before the Court is Defendant's Motion for Summary Judgment and Brief in Support. (Instrument No. 32).

         I.

         A.

         Plaintiff Devdara, L.L.C., a Texas Limited Liability Company, ("Plaintiff) seeks declaratory judgment that the statute of limitations bars Defendant Wells Fargo, N.A. ("Defendant") from foreclosing on property located at 2114 Enchanted Park Lane, Katy, Texas 77450 (the "Property"), because more than four years has passed since the underlying loan was accelerated. Plaintiff also requests that the Court void Defendant's deed of trust and seeks a determination regarding who is entitled to payment if the deed of trust is not void. Defendant asserts that the there is no evidence that the underlying loan was accelerated. In addition, Defendant posits that summary judgment evidence clearly establishes that it unequivocally abandoned any purported acceleration by sending a subsequent notice of default requesting payment on less than the full amount of the loan and therefore the limitations to foreclose have not expired and Defendant is entitled to summary judgment.

         B.

         Plaintiff is a Texas limited liability company. Based on publicly filed records, Nanik Bhagia ("Bhagia") is Plaintiffs sole member. (Instrument No. 1 at 3). Bhagia is a natural person and Texas citizen. Id. Defendant is a national banking association organized under federal law. Under its articles of association, Defendant's main office is located in South Dakota. Therefore, Defendant is a citizen of South Dakota for diversity purposes. Id. at 4.

         The Property was originally purchased by husband and wife, Lemorris Grover and Wan Grover (the "Grovers"). On April 27, 2004, in connection with the purchase of the Property, the Grovers executed a promissory note ("Note") in the principal amount of $85, 495.00 made payable to World Savings Bank, FSB ("World Savings"). (Instrument No. 32-1). On that same day, the Grovers executed a deed of trust (the "Deed of Trust") that granted a security interest in the Property to secure repayment of the Note (the Note and Deed of Trust, are collectively referred to herein as the "Grover Loan"). (Instrument No. 32-2). The Note is due and payable on May 15, 2034 (the "Maturity Date"). (Instrument No. 32-1 at 2).

         On or about December 31, 2007, World Savings changed its name to Wachovia Mortgage, FSB ('Wachovia"), and on or about November 1, 2009, Wachovia converted to a national bank and subsequently merged into Wells Fargo Bank, N.A. (Instrument No. 32 at 2; Instrument No. 32-1 at 3). Wells Fargo is the successor-by-merger to World Savings and Wachovia. Id.

         On July 18, 2011, Defendant sent correspondence to the Grovers by certified mail notifying them, among other things, that the Grover Loan was in default for failure to make payments due and that the Maturity Date of the Note would be accelerated if the default was not timely cured (the "July 2011 Notice of Default"). (Instrument No. 32-1 at 29).

         On October 4, 2011, via a Deed Under "Fourth" Writ of Execution, Plaintiff acquired the Property at a Constable's Sale conducted by the Harris County Constable.[1] (Instrument No. 22 at 4; Instrument No. 32-2 at 2). However, pursuant to the Deed Under "Fourth" Writ of Execution, Plaintiff only received the right, title, interest, and claim that the Grovers had in the Property. (Instrument No. 32-2 at 3). Therefore, Plaintiff acquired the Property subject to Defendant's lien on the Property. Id. ; Tex. Civ. Prac. & Rem. Code. § 34.05 (Vernon 1986).

         On October 24, 2011, the Grovers received from Defendant a Notice of Substitute Trustee's Sale ("Notice of Sale") informing them that the Property was scheduled for a December 6, 2001 foreclosure sale. (Instrument No. 19-1). However, the December 6, 2011 scheduled foreclosure sale of the Property was never consummated. (Instrument No. 32 at 3; Instrument No 32-1 at 3).

         On January 22, 2015, Defendant sent correspondence to the Grovers by certified mail notifying them, among other things, that the Grover Loan was in default for failure to make payments due and that the Maturity Date would be accelerated if the default was not timely cured (the "January 2015 Notice of Default").

         In its Amended Complaint, Plaintiff alleges that the loan originally taken out by the Grovers was accelerated as late as November 2011 and possibly earlier. (Instrument No. 19 at 2). Plaintiff notes that the Notice of Sale scheduled a Substitute Trustee's Sale of the Property under the Deed of Trust to be held on December 6, 2011. (Instrument No. 22 at 4). Plaintiff posits that the Notice of Sale is evidence that the Grover Loan was in default, and that the Grover Loan had been accelerated as of October 24, 2011. Plaintiff notes that under Texas law, a deed of trust must be enforced within four years from the date of maturity of the note or the deed of trust is barred by the statute of limitations and is void. Tex. Civ. Prac. & Rem. Code § 16.035. Plaintiff reasons that because the Grover Loan was accelerated as of October 24, 2011, pursuant to §16.035 of the Texas Civil ...


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