United States District Court, S.D. Texas, Houston Division
MEMORANDUM OPINION AND ORDER
LAKE, UNITED STATES DISTRICT JUDGE
before the court is Plaintiff's Motion for Summary
Judgment ("Plaintiff's MSJ") (Docket Entry No.
33). For the reasons explained below, the motion for summary
judgment will be denied.
action concerns the validity of a lien on real property
located in Brazos County, Texas. On September 10, 2015,
plaintiff, LWL Construction, LLC d/b/a The Lester Group
("LWL") purchased a property located at 1414 Elkton
Court, College Station, Brazos County, Texas 77845 (the
"Property"). The Property is subject to a Deed of
Trust (the "Lien") signed by Michael Baker and
Yvonne Baker (the "Borrowers") on March 26, 2004,
securing payment of a note (the "Note") originally
given to Spectrum Lending, Inc. On February 28, 2005,
defendant Countrywide Home Loans, Inc.
("Countrywide") sent a Notice of Acceleration to
the Borrowers through its counsel. On May 13, 2005, Countrywide
filed a Rescission of Acceleration of Loan Maturity in Brazos
County.Countrywide then sent to the Borrowers four
separate notices of default requesting payments of amounts
less than the full amount due on the Note. Each notice
stated an amount necessary to "reinstate the loan"
and to "cure the default." Each notice also stated that
payments "will be" accelerated if the default were
not cured by the date provided. The Borrowers entered into a Loan
Modification Agreement with Countrywide on July 22,
2007. LWL filed suit in the 85th Judicial
District Court of Brazos County, Texas, on October 13, 2015,
seeking a declaratory judgment that the Lien is invalid and
unenforceable. Defendant Ditech Financial LLC
("Ditech") timely removed the action to this court.
LWL, arguing that the limitations period for enforcement of
the Lien has run, moves for summary judgment on the issue of
the validity of the Lien.
Standard of Review
judgment is appropriate if the movant establishes that there
is no genuine dispute about any material fact and the movant
is entitled to judgment as a matter of law. Fed.R.Civ.P.
56(a). "The movant accomplishes this by informing the
court of the basis for its motion, and by identifying
portions of the record which highlight the absence of genuine
factual issues." Topalian v. Ehrman, 954 F.2d
1125, 1131 (5th Cir. 1992) (citing Fed.R.Civ.P. 56(c)).
"In order to avoid summary judgment, the nonmovant must
identify specific facts within the record that demonstrate
the existence of a genuine issue of material fact."
CO, Inc. v. TXU Mining Company, L.P., 565 F.3d 268,
273 (5th Cir. 2009).
reviewing the evidence "the court must draw all
reasonable inferences in favor of the nonmoving party, and it
may not make credibility determinations or weigh the
evidence." Reeves v. Sanderson Plumbing Products,
Inc., 120 S.Ct. 2097, 2110 (2000) . The court resolves
factual controversies in favor of the nonmovant, "but
only when there is an actual controversy, that is, when both
parties have submitted evidence of contradictory facts."
Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th
Cir. 1994). "Unsubstantiated assertions are not
competent summary judgment evidence." Hugh Symons
Group, pic v. Motorola, Inc., 292 F.3d 466, 468 (5th
Cir. 2002) (citing Celotex Corp. v. Catrett, 106
S.Ct. 2548, 2553 (1986)). And " [in] ere conclusory
allegations are not competent summary judgment
evidence." Id. (citing Eason v.
Thaler, 73 F.3d 1322, 1325 (5th Cir. 1996)).
LWL's Motion for Summary
Nature of the Suit
Plaintiff's Original Petition, which remains the live
pleading in this action, LWL asserts a cause of action for
declaratory judgment that "Defendants' Claim of Lien
is invalid and unenforceable." In its Motion for Summary
Judgment, LWL refers to its claim for "declaratory
relief on its suit to quiet title and for declaratory
judgment from the Court that Defendants' Claim of Lien is
invalid and unenforceable." LWL also cites in its motion the
elements of an action to quiet title. Based upon LWL's
allegations, the court concludes that the nature of this
action is a suit to quiet title. "[A] litigant's
request for declaratory relief does not alter a suit's
underlying nature." City of El Paso v.
Heinrich, 284 S.W.3d 366, 370 (Tex. 2009).
elements of the cause of action to quiet title are that the
plaintiff must show (1) an interest in a specific property,
(2) title to the property is affected by a claim by the
defendant, and (3) the claim, although facially valid, is
invalid or unenforceable." Vernon v. Perrien,
390 S.W.3d 47, 61 (Tex. App. 2012) (citation omitted).
Because LWL's motion focuses on the third element, the
court will direct its analysis to the validity of the Lien.
person must bring suit for the recovery of real property
under a real property lien or the foreclosure of a real
property lien not later than four years after the day the
cause of action accrues." Tex. Civ. Prac. & Rem.
Code § 16.035(a). "On the expiration of the
four-year limitations period, the real property lien and a
power of sale to enforce the real property lien become
void." Id. at § 16.035(d). The limitations
period for a note containing an optional acceleration clause
does not run automatically upon default but "accrues
only when the holder actually exercises its option to
accelerate." Holy Cross Church of God in Christ v.
Wolf, 44 S.W.3d 562, 566 (Tex. 2001); see also
Seicrel v. U.S. Bank National Association, 218 F.Supp.3d
541, 545 (S.D. Tex. 2016).
acceleration of a note can be abandoned "by agreement or
other action of the parties." Boren v. U.S. National
Bank Association, 807 F.3d 99, 104 (5th Cir. 2015)
(citing Khan v. GBAK Properties, Inc., 371 S.W.3d
347, 353 (Tex. App.--Houston [1st Dist.] 2012, no pet.)).
"Abandonment of acceleration has the effect of restoring
the contract to its original condition, " thereby
"restoring the note's original maturity date"
for purposes of accrual. Khan, 371 S.W.3d at 353
(citations omitted). Rescission or waiver of acceleration is
effective if made by a written notice of a rescission or
waiver served as provided in § 16.038(c) by the
lienholder, the servicer of the debt, or an attorney
representing the lienholder on each debtor. Id. at
§ 16.038(b). But Section 16.038 "does not create an
exclusive method for waiver and rescission of
acceleration." Id. at § 16.038(e). A
lender may unilaterally abandon acceleration of a note
"by sending notice to the borrower that the lender ...