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Crittendon v. Bank of New York Mellon

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

January 18, 2018

ALONZO CRITTENDON, Plaintiff,
v.
THE BANK OF NEW YORK MELLON, Defendant.

          MEMORANDUM OPINION AND ORDER

          George C. Hanks Jr. United States District Judge.

         Plaintiff Alonzo Crittendon filed this lawsuit in the 122nd Judicial District Court of Galveston County, Texas, in an attempt to prevent Defendant, the Bank of New York Mellon, from foreclosing on the property located at 3816 Armand Drive, Dickinson, Texas, 77539.

         The Bank removed the lawsuit to this Court. At the time of removal, the live pleading in the suit was Crittendon's “First Amended Petition, Application for Injunctive Relief, and Request for Disclosures.” Dkt. 1-12. In that pleading, Crittendon alleged that he and his wife purchased the property on November 30, 2005, and the Note and Deed of Trust for the mortgage were subsequently transferred to the Bank. Crittendon alleged that he was assured that, even though he had fallen behind on mortgage payments, the Bank would not foreclose on the property. He contends that the Bank broke that promise and initiated foreclosure proceedings, ultimately selling the property at a foreclosure sale. Crittendon asserts claims for breach of contract, common law fraud, and promissory estoppel.

         The Bank now seeks summary judgment in its favor. Dkt. 26. First, the Bank contends that Crittendon's breach of contract claims are based upon an alleged oral promise and are therefore barred by the statute of frauds. The Bank also argues that Crittendon's “breach of contract claim also fails because Plaintiff failed to specify the provision breached.” Next, the Bank contends that summary judgment should be entered on Crittendon's fraud claim because that claim is barred by the economic loss rule; because there is no evidence that an actionable representation was made or that Crittendon justifiably relied on such a representation to his detriment; and because “Crittendon failed to plead with specificity.” Next, the Bank seeks summary judgment on Crittendon's promissory estoppel claim. And, to the extent that Crittendon asserts a wrongful foreclosure claim, the Bank also seeks summary judgment on that claim. Finally, the Bank seeks summary judgment on Crittendon's claims for injunctive or equitable relief.

         The undisputed summary judgment evidence shows that Crittendon executed an Adjustable Rate Note in the amount of $144, 000 and a Deed of Trust to secure repayment of the Note, his loan was transferred to the Bank, Crittendon failed to make payments as required, and he was in default. Although Crittendon attempted to negotiate a loan modification, there is no evidence to show that he was successful in securing such a modification. Ultimately, the property was sold at a foreclosure sale for $165, 380.75.

         After reviewing the motion, the summary judgment record, the pleadings, and the applicable authorities, the Court hereby GRANTS the motion for summary judgment because there is no genuine dispute of material fact on any of Crittendon's claims against the Bank.

         LEGAL STANDARDS

         Summary judgment is warranted if the movant establishes that there is no genuine dispute as to any material fact and that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). “A genuine dispute of material fact exists when the ‘evidence is such that a reasonable jury could return a verdict for the nonmoving party.'” Nola Spice Designs, LLC v. Haydel Enters., Inc., 783 F.3d 527, 536 (5th Cir. 2015) (quoting Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986)). “The moving party ‘bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.'” Id. (quoting EEOC v. LHC Grp., Inc., 773 F.3d 688, 694 (5th Cir. 2014)); see also Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

         “Where the non-movant bears the burden of proof at trial, the movant may merely point to the absence of evidence and thereby shift to the non-movant the burden of demonstrating by competent summary judgment proof that there is an issue of material fact warranting trial.” Id. (quotation marks omitted); see also Celotex, 477 U.S. at 325. Although the party moving for summary judgment must demonstrate the absence of a genuine issue of material fact, it does not need to negate the elements of the nonmovant's case. Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005). “A fact is ‘material' if its resolution in favor of one party might affect the outcome of the lawsuit under governing law.” Sossamon v. Lone Star State of Texas, 560 F.3d 316, 326 (5th Cir. 2009) (quotation omitted). “If the moving party fails to meet [its] initial burden, the motion [for summary judgment] must be denied, regardless of the nonmovant's response.” United States v. $92, 203.00 in U.S. Currency, 537 F.3d 504, 507 (5th Cir. 2008) (quoting Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc)). “Once the moving party [meets its initial burden], the non-moving party must ‘go beyond the pleadings and by her own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial.'” Nola Spice, 783 F.3d at 536 (quoting EEOC, 773 F.3d at 694). The nonmovant must identify specific evidence in the record and articulate how that evidence supports that party's claim. Baranowski v. Hart, 486 F.3d 112, 119 (5th Cir. 2007). “This burden will not be satisfied by ‘some metaphysical doubt as to the material facts, by conclusory allegations, by unsubstantiated assertions, or by only a scintilla of evidence.'” Boudreaux, 402 F.3d at 540 (quoting Little, 37 F.3d at 1075). In deciding a summary judgment motion, the court draws all reasonable inferences in the light most favorable to the nonmoving party. Connors v. Graves, 538 F.3d 373, 376 (5th Cir. 2008); see also Nola Spice, 783 F.3d at 536.

         ANALYSIS

         A. Breach of Contract

         The Bank is entitled to summary judgment on Crittendon's breach of contract claim. Under Texas law, the elements of a breach of contract claim are: “(1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages to the plaintiff resulting from that breach.” Crose v. Humana Ins. Co., 823 F.3d 344, 347-48 (5th Cir. 2016). However, Texas law is also clear that, “[a] loan agreement in which the amount involved exceeds $50, 000 in value is not enforceable unless the agreement is in writing and signed by the party to be bound or by that party's authorized representative.” Tex. Bus. & Com. Code § 26.02(b); see also Tex. Bus. & Com. Code § 26.01(b)(6) (“an agreement which is not to be performed within one year from the date of making the agreement” must be in writing to be enforceable). The Texas statute of frauds specifically defines a “loan agreement” to include promissory notes and deeds of trust. Id. § 26.02(a)(2).

         Crittendon's breach of contract claim is based on an alleged oral agreement, made after he entered into written the Note and became delinquent under its terms, that the Bank would forebear foreclosure while he pursued a loan modification. As numerous courts have held, “[b]ecause such an oral agreement would have altered the terms of the parties' written loan agreement, which exceeded $50, 000 in value, such an oral agreement is unenforceable under Texas' Statute of Frauds.” See, e.g., Terna v. Wells Fargo Bank, Civil Action No. 4:16-CV-03461, 2017 WL 6513990, at *3 (S.D. Tex. Nov. 20, 2017), report and recommendation adopted Dec. 18, 2017; Matthews v. JPMorgan Chase Bank, N.A., Civil Action No. H-14-2266, 2015 WL 892954, at *2 (S.D. Tex., Mar. 1, 2015) (citing Tex. Bus. & Com. Code § 26.02(b) and finding that an alleged oral promise not to foreclose on a mortgage loan was barred by the statue of frauds because the loan agreement was for more than $50, 000.00); see also Milton v. U.S. Bank Nat. Ass'n, 508 Fed. App'x. 326, 328 (5th Cir. 2013) (collecting cases). Accordingly, summary judgment for the Bank will be entered this claim.

         B. Common ...


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