United States District Court, E.D. Texas, Tyler Division
W. SCHROEDER III UNITED STATES DISTRICT JUDGE.
the Court is Defendant HSBC Bank USA's
(“Defendant”) Motion for Summary Judgment. Docket
No. 27. Plaintiff has not filed a response. For the reasons
below, the Motion for Summary Judgment is
a wrongful foreclosure case. Borrower Rolanda M. Forney
(“Borrower”) executed an Adjustable Rate Note and
a Home Equity Note, both in favor of Fieldstone Mortgage
Company, in the amounts of $101, 571.00 and $25, 392.00 on
November 12, 2004. Docket No. 27-2. The notes relate to the
property located at 20071 Meadow View Lane, Flint, Texas
75762. Id. at 1. Plaintiff also executed a Deed of
Trust, securing the obligations under the notes by placing a
first lien on the property. Docket No. 27-3.
September 2012, Borrower had defaulted on the loan. Docket
No. 27-5. After Borrower passed away in February 2013, her
sister, Shalonda Sanders (“Plaintiff”), paid $74,
075.43 in June 2013 to reinstate the loan that had been in
default. Docket No. 27-7 at 8. Plaintiff later made a second
payment of $2, 015.88 in July 2013. Docket Nos. 27-7 at 8 and
27-12 at 2. After this second payment, Plaintiff admits she
never made another payment on the loan. Docket No. 27-12 at
2. Thus, in August 2013, the loan was back in default. Docket
No. 27-8 at 1. The property was finally sold at a foreclosure
sale to Defendant for $124, 925.48 on December 1, 2015.
Docket No. 27-10 at 1.
then filed a Complaint in the 241st Judicial
District Court of Smith County, Texas alleging wrongful
foreclosure by Defendant of the property. Docket No. 4.
Defendant then removed the action to this Court under 28
U.S.C. §§ 1441 and 1446. Docket No. 1. Plaintiff
seeks an injunction, damages and attorney's fees.
Id. at 7-8.
judgment is proper if “if the movant shows that there
is no genuine dispute as to any material fact and that the
movant is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(a). A dispute about a material fact is
genuine if “the evidence is such that a reasonable jury
could return a verdict for the nonmoving party.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). When the movant for summary judgment demonstrates the
absence of a genuine dispute over any material fact, the
burden to show that there is a genuine issue for trial shifts
to the non-movant. Celotex Corp. v. Catrett, 477
U.S. 317, 323-24 (1986). In determining whether a genuine
issue for trial exists, a court views all inferences drawn
from the factual record in the light most favorable to the
non-moving party. Matsushita Elec. Indus. v. Zenith
Radio, 475 U.S. 574, 587 (1986).
Texas law, a wrongful foreclosure claim requires: (1) a
defect in the foreclosure proceedings; (2) a grossly
inadequate selling price; and (3) a causal connection between
the two. Martins v. BAC Home Loans Servicing, L.P.,
722 F.3d 249, 256 (5th Cir. 2013); Barcenas v. Fed. Home
Loan Mortg. Corp., 2013 WL 286250, at *5 (S.D. Tex. Jan.
24, 2013) (citing Sauceda v. GMAC Mortg. Corp., 268
S.W.3d 135, 139 (Tex. App.-Corpus Christi 2008, no pet.)).
“Moreover there must be evidence of an irregularity
that ‘must have caused or contributed to cause the
property to be sold for a grossly inadequate price.'
” Barcenas, 2013 WL 286250 at *5 (quoting
In re Keener, 268 B.R. 912, 921 (Bankr. N.D. Tex.
2001). “Under Texas law a grossly inadequate price
would have to be ‘consideration so far short of the
real value of the property as to shock a correct mind, and
thereby raise a presumption that fraud attended the
purchase.' ” Barcenas, 2013 WL 286250 at
*5 (quoting Richardson v. Wells Fargo Bank, N.A.,
873 F.Supp.2d 800, 813 (N.D. Tex. 2012), aff'd, 538 F.
App'x 391 (5th Cir. 2013)).
motion for summary judgment, Defendant argues there is no
genuine dispute as to any material fact concerning the three
elements of a wrongful foreclosure claim. Docket No. 27.
First, Defendant argues there was no defect in the
foreclosure proceedings. Id. at 7. Second, Defendant
claims the selling price was not grossly inadequate.
Id. at 7-8. Third, Defendant argues there was no
causal connection between any defect and a grossly inadequate
selling price. Id. at 8. Plaintiff did not respond
with any legal arguments to the motion. Rather, Plaintiff
submitted a “controverting affidavit” more than a
week after the response was due. Docket No. 29. The affidavit
recounts Plaintiff's understanding of the facts,
including that she made two payments of $74, 075.43 and $2,
015.88 in 2013. Id. at 2.
is no genuine dispute as to any material fact concerning any
defect in the foreclosure proceedings. The parties agree that
Plaintiff made two payments in 2013 totaling $76, 091.31.
Docket No. 27-7 at 8. Yet Plaintiff admits the total amount
due on the loan was actually $101, 086.54. Docket No. 27-12
at 6. Plaintiff never made another payment on the loan after
the two payments in 2013. Docket Nos. 27-7 at 8 and 27-12 at
2. The loan subsequently went into default. Docket No. 27-8
at 1. On November 4, 2015, Defendant exercised its right
under the loan to appoint a substitute trustee over the
property upon default. Docket No. 27-9. As a result, the
property was sold on December 1, 2015 at a foreclosure sale.
Docket No. 27-10. Plaintiff has not shown a genuine dispute
as to any material fact concerning the foreclosure
is also no genuine dispute as to any material fact regarding
a grossly inadequate selling price. “The weight of
Texas authority rejects a determination of gross inadequacy
where . . . property sells for over 60% of fair market
value.” Fed. Deposit Ins. Corp. v. Blanton,
918 F.2d 524, 531 (5th Cir. 1990). Here, the property sold
for $124, 925.48. Docket No. 27-10 at 1. According to the
Smith County Appraisal District, the fair market value of the
property in 2015 was $154, 521.00. Docket No. 27-11. Thus,
the property sold for about 80% of its fair market value.
Therefore, no genuine dispute as to any material fact exists
regarding the adequacy of the selling price.
no genuine dispute as to any material fact exists regarding
the third element of a wrongful foreclosure claim. The third
element requires a causal connection between the first two
elements. 722 F.3d at 256. Since the uncontroverted evidence
has established there was neither a defect in the foreclosure
proceeding nor a grossly inadequate selling price, the third