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Maldonado v. Wells Fargo Bank, N.A.

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

November 1, 2017

Ruben Maldonado, Plaintiff,
Wells Fargo Bank, N.A., et al, Defendants.



         Pending before the court is amotion for summary judgment filed by defendants Wells Fargo Bank, National Association ("Wells Fargo") and Ocwen Loan Servicing, L.L.C. (collectively "Defendants"). Dkt. 17. Plaintiff Ruben Maldonado responded in opposition. Dkt. 18. Defendants replied. Dkt. 20. Having reviewed the motion, the response, the reply, the evidentiary record, and the applicable law, the court is of the opinion that the motion for summary judgment should be GRANTED.

         I. Background

         Maldonado seeks to prevent the foreclosure sale of his property, originally scheduled for November 1, 2016. Dkt. 17 at 1; Dkt. 17, Ex. B-2. On July 26, 2007, Maldonado executed an adjustable rate note in favor of Option One Mortgage Corporation ("Note"). Dkt. 18 at 2. The Note, encumbering Maldonado's real property located at 18 Saint Albans Court, Sugar Land, Texas 77479 ("Property"), was in the amount of $319, 920.00. Dkt. 17, Ex. A-l. In connection with this Note, Maldonado also executed a deed of trust securing repayment of the Note, which was subsequently assigned to Wells Fargo. Dkt. 17, Ex. D. Maldonado failed to submit the monthly payment due on December 1, 2010, and Wells Fargo produced a notice to cure the default dated January 15, 2015. Dkt. 17, Exs. A-2, 3. Maldonado failed to cure the default, and a notice of acceleration was prepared, dated October 6, 2016. Dkt. 17, Exs. B-l. Maldonado filed this suit in the 268th Judicial District in Fort Bend County, Texas. Dkt. 1. Defendants timely removed this action to federal court based on diversity jurisdiction (Dkt. 1 at 3), and now move for summary judgment. Dkt. 17. Maldonado has responded, and Defendants have replied. Dkts. 18, 20.

         II. Legal Standard

         A court shall grant summary judgment when a "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] fact is genuinely in dispute only if a reasonable jury could return a verdict for the non-moving party." Fordoche, Inc. v. Texaco, Inc., 463 F.3d 388, 392 (5th Cir. 2006). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548 (1986). If the party meets its burden, the burden shifts to the non-moving party to set forth specific facts showing a genuine issue for trial. Fed.R.Civ.P. 56(e). The court must view the evidence in the light most favorable to the non-movant and draw all justifiable inferences in favor of the non-movant. Envtl. Conservation Org. v. City of Dall., 529 F.3d 519, 524 (5th Cir. 2008). Given that this court sits in diversity jurisdiction over this action, it is undisputed that the substantive law of Texas applies. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817 (1938).

         III. Analysis

         Defendants ask the court to dispose of Maldonado's claims as a matter of law because Maldonado: (1) was in prior material breach of the deed of trust, or in the alternative his claims as to the adequacy of notice of foreclosure sale are not yet ripe for disposition; (2) failed to tender the amount due on the Note and therefore has failed to state a quiet title claim; (3) asserted claims for declaratory and injunctive relief not recognized as causes of action; and (4) failed to state a cause of action that entitles him to attorneys' fees. Dkt. 17 at 4-9. Maldonado contends that: (1) he never received notice of a default, was not informed of a reinstatement amount, and did not receive proper foreclosure notice; (2) his claim to quiet title survives because he is the undisputed owner of the Property as witnessed by a recorded deed; and (3) his claims for declaratory judgment survive because Defendants have failed to prove that he received notice of acceleration.

         A. Breach of Contract Claim

         In order to prevail on abreach of contract claim, a plaintiff must demonstrate: (1) that a valid contract exists; (2) performance or tendered performance; (3) that the defendant has breached the contract; and (4) that the plaintiff sustained damages as a result of the defendant's breach. Mullins v. TestAmerica, Inc., 564 F.3d 386, 418 (5th Cir. 2009); Brown v. Wells Fargo, N.A., No. H-l 3-3228, 2015 WL 926573, at *6 (S.D. Tex. Mar. 4, 2015) (Miller, J.). A party to a contract who has failed to perform his or her obligations is unable to maintain a suit for the breach of said contract. Kaechler v. Bank of Am., N.A., No. H-12-423, 2013 WL 127555, at *3 (S.D. Tex. Jan. 9, 2013) (Ellison, J.). Generally, the second element of the claim cannot be established if a homeowner has defaulted on a mortgage payment. See Brown, 2015 WL 926573, at *3; Owens v. Bank of Am., N.A., No. H-l 1-2552, 2012 WL 912721, at *4 (S.D. Tex. Mar. 16, 2012) (Hoyt, J.) ("[T]he plaintiffs have undisputedly not performed their contractual obligations because they have not stayed current on their mortgage payments.").

         Defendants claim that Maldonado has defaulted on his mortgage. Dkt. 17 at 5. In support of their claim, Defendants attach a detailed transaction history and a notice of default illustrating the breach. Dkt. 17, Exs. A-2, 3. Nowhere in his response does Maldonado refute the fact that he became delinquent on his mortgage payments. Dkt. 18. Maldonado cannot therefore maintain a breach of contract claim based on the Note and deed of trust.

         In his original Petition, Maldonado claims he made efforts to renegotiate his payments so as to make them more affordable, and Defendants refused to cooperate. Dkt. 1-6 at 3. Although Maldonado presents the court with no evidence for these contentions, even if taken as true, they do not alter the fact that Maldonado is in breach of the contract on which he now seeks to sue. See Kaechler, 2013 WL 127555, at *9 ("As explained, ongoing loan modifications do not alter the fact that [the plaintiff] is in breach of the mortgage contract.").

         Maldonado argues that Defendants failed to record the Notice of Substitute Trustee Sale prior to attempting foreclosure on the Property, which violates the terms of the deed of trust and raises an issue of material fact as to the breach of contract claim. Dkt. 18 at 6. This point, likewise, does not change the fact that Maldonado has defaulted on the Note. Further, a defect in the foreclosure sale proceedings is recognized under Texas law as an element of a wrongful foreclosure claim, which a plaintiff can only maintain once a foreclosure sale has occurred. See Martinez v. Am. Serv. Co., No. H-12-2606, 2013 LEXIS 194514, at *8-9 (S.D. Tex. Aug. 21, 2013) (Hittner, J.). It is undisputed that a foreclosure sale has not occurred in this case, and in fact, Maldonado asks the court to prevent foreclosure on the Property. Dkt. 18 at 6. As the foreclosure sale never actually occurred, this claim is not yet ripe for disposition. See Martinez v. Am. Serv., 2013 LEXIS 194514, at *8-9; see also Johnson v. Wells Fargo Bank, N.A., 999 F.Supp.2d 919, 932 (N.D. Tex. 2014). Maldonado's breach of contract claim fails as a matter of law.[1]

         B. Claim to Remove ...

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