United States District Court, N.D. Texas, Dallas Division
MEMORANDUM OPINION AND ORDER
KINKEADE, UNITED STATES DISTRICT JUDGE.
the Court are: (1) Plaintiffs' Motion for Summary
Judgment (Doc. No. 22); and (2) Defendants' Motion for
Summary Judgment (Doc. No. 38). After careful consideration
of the competing motions, the responses, the replies, the
supporting appendices and the applicable law, the Court
DENIES Plaintiffs' motion and
GRANTS Defendants' motion.
Factual and Procedural Background
case arises from foreclosure proceedings related to the real
property located at 2207 Trinidad Drive, Dallas, Texas 75232
(“the Property”). The Property was purchased in
May 2005 by Marvin Wooten through the signing of a Texas Home
Equity Fixed/Adjustable Rate Note (“the Note”) in
the amount of $99, 200.00. To secure payment on the Note,
both Mr. Wooten and his wife, Esther Wooten (referred to in
Court documents as “Esther Moore”, her newly
married name), signed a Texas Home Equity Security Instrument
(“the Security Instrument”). U.S Bank National
Association (“U.S. Bank”), as Trustee for the
Registered Holders of Citigroup Mortgage Loan Trust,
Asset-Backed Pass-Through Certificates, Series 2005-HE3, then
became the owner and holder of the Note and Security
Interest. After Mr. Wooten passed away in April 2008, his
children transferred their interest in the Property to Ms.
Wooten. Shortly thereafter, Ms. Wooten fell behind on her
mortgage payments, and in March 2010, U.S. Bank's
then-loan servicer, BAC Home Loans Servicing, notified her of
its intent to accelerate the Note (“the March 2010
effort to obtain a court order permitting foreclosure on the
Property, U.S. Bank filed an action in state court, to which
Ms. Wooten ultimately consented when she signed an Agreed
Final Judgment in November 2011. Around January 2012, Ms.
Wooten moved out of the Property and signed a one-year lease
at the Potter's House apartments. Ms. Wooten claims she
took such action in reliance on the March 2010 Acceleration
and Defendants' steadfast pursuit of foreclosure.
November 2012, U.S. Bank's new loan servicer, Select
Portfolio Servicing, Inc. (“SPS”) sent a new
Notice of Default to Ms. Wooten, informing her that she could
cure her default by making a payment of $38, 343.99. The
Notice further stated that if no payment was received by
December 2012, the Note would be re-accelerated. While no
payment was made, receipt of this notice and other requests
for payment from SPS was confirmed by Ms. Wooten's
correspondence to the judge that had presided in the state
court foreclosure proceeding. In March 2015, Ms. Wooten
conveyed her interest in the Property to ScoJo Solutions, LLC
(“ScoJo”) through a Special Warranty Deed
executed in March 2015, as evidenced by the document itself.
One month later, ScoJo transferred its interest in the
Property to Jatera Corporation (“Jatera”).
SPS re-initiated foreclosure proceedings, Jatera filed its
Original Petition against U.S. Bank and SPS (collectively
“Defendants”) in state court, seeking a judgment
declaring that the lien on the Property is void because
Defendants failed to initiate foreclosure proceedings within
the four-year limitations period. Defendants removed the case
to federal court on the basis of diversity jurisdiction.
Thereafter, Jatera filed an amended complaint seeking the
same declaratory relief, but included the assertion that Ms.
Wooten's detrimental reliance on the acceleration
prevented Defendants from attempting to abandon the
acceleration in November 2012. After Ms. Wooten was added as
a plaintiff, she filed a complaint seeking a judgment
declaring Defendants' lien on the Property null and void
and/or quieting title in Jatera's name, also on the
grounds that Defendants failed to foreclose on the Property
within the four-year limitations period. Plaintiffs also seek
actual damages, court costs, and attorney's fees. Both
parties have moved for summary judgment on all claims.
judgment is appropriate “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); Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986). Whether a fact is
“material” is determined by the substantive law
governing the dispute. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). A party moving for
summary judgment has the initial burden of “informing
the district court of the basis for its motion, and
identifying those portions of ‘the pleadings,
depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, ' which it
believes demonstrate the absence of a genuine issue of
material fact.” Celotex, 477 U.S. at 323. Once
the moving party has properly supported its motion for
summary judgment, the burden shifts to the nonmoving party to
“come forward with specific facts showing that there is
a genuine issue for trial.” Matsushita Elec. Indus.
Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587
(1986). “Where the record taken as a whole could not
lead a rational trier of fact to find for the non-moving
party, there is no ‘genuine issue for
trial.'” Id. (citation omitted).
“[U]nsubstantiated assertions, improbable inferences,
and unsupported speculation are not sufficient to defeat a
motion for summary judgment.” Nuwer v. Mariner
Post-Acute Network, 332 F.3d 310, 313 (5th Cir. 2003).
Nevertheless, when ruling on a motion for summary judgment,
the court is required to view all facts and inferences in the
light most favorable to the nonmoving party and resolve all
disputed facts in favor of the nonmoving party.
Matsushita, 475 U.S. at 587.
DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
move for summary judgment on both Ms. Wooten's and
Jatera's claims on the grounds that the statute of
limitations did not expire because U.S. Bank abandoned the
March 2010 Acceleration when it demanded that Ms. Wooten pay
less than the total amount owed in November 2012. Defendants
further argue that under Texas law no detrimental reliance
exception exists to a lender's ability to unilaterally
abandon acceleration, and that even if it did, Ms. Wooten did
not detrimentally rely on the March 2010 Acceleration. As to
Ms. Wooten's claims, Defendants argue summary judgment is
appropriate because: (1) she has no interest in the Property,
and therefore lacks standing; and (2) given her execution of
the Agreed Judgment, she is prevented from bringing her
claims by estoppel based in law, estoppel, and waiver.
Regarding Jatera's claim, Defendants argue summary
judgment is warranted because Jatera took title to the
Property subject to the recorded deed of trust. Additionally,
Defendants claim that Jatera cannot use the detrimental
reliance of another party, in this case Ms. Wooten, to
establish its superior title. Lastly, Defendants argue that
Plaintiffs' request for actual damages and attorneys'
fees fails because attorneys' fees are not permitted
under the federal Declaratory Judgment Act, and
Plaintiffs' claims for declaratory relief to do provide
support for a claim for actual damages.
response, Plaintiffs contend that Texas law prohibits a
lender from unilaterally abandoning acceleration of a note if
the borrower detrimentally relies on the acceleration.
Specifically, because Ms. Wooten detrimentally relied on the
March 2010 Acceleration, Plaintiffs argue that Defendants
were estopped from abandoning the acceleration and required
to foreclose on the Property in March 2014, which they failed
to do. As for Ms. Wooten's claims, Plaintiffs maintain
that she has standing because she “maintains rights to
the property by virtue of the agreement between the
parties.” In support of this argument, Plaintiffs note
that: (1) Ms. Wooten warranted title when she transferred the
Property; and (2) the parties agreed to re-convey the
Property to Ms. Wooten if this lawsuit fails, or pay her
consideration if the lawsuit succeeds. Plaintiffs also argue
that Rule 736.9 of the Texas Rules of Civil Procedure
prevents Defendants from using the Agreed Judgment for
estoppel or waiver purposes. Regarding Jatera's claims,
Plaintiffs argue that because Defendants failed to foreclose
on the Property within the limitations period, the lien was
already invalidated when it was transferred to ScoJo in March
2015. Additionally, Plaintiffs contend that Ms. Wooten
assigned her claims to Jatera, and therefore, Jatera may
assert Ms. Wooten's detrimental reliance as its own.
Plaintiffs concede, however, that attorneys' fees are not
recoverable in this lawsuit.
Ms. Wooten's Claims