United States District Court, S.D. Texas, Houston Division
MEMORANDUM AND RECOMMENDATION
FRANCES H. STACY UNITED STATES MAGISTRATE JUDGE
the Magistrate Judge upon referral from the District Judge
for a memorandum and recommendation is Defendants' Motion
for Summary Judgment (Document No. 13). Having considered the
motion, the response and additional briefing (Document Nos.
16 & 18), Plaintiffs' claims, the summary judgment
evidence, and the applicable law, the Magistrate Judge
RECOMMENDS, for the reasons set forth below that
Defendants' Motion for Summary Judgment (Document No. 13)
a mortgage/foreclosure case, which was filed by Plaintiffs
Ann and Mark Leander ("the Leanders") in state
court on July 20, 2017, against U.S. Bank and Ocwen Loan
Servicing, LLC (collectively "Defendants"), seeking
to prevent foreclosure and render void the home equity loan
on their residence, located at 3207 Cinco Lakes Dr., Katy,
Texas 77450 (referred to hereafter as "the
Property"). The case was timely removed to this Court on
the basis of diversity.
Petition they filed in state court, the Leanders assert
claims against Defendants for: (1) a determination that the
lien on the Property is unenforceable given the expiration of
the statute of limitations; (2) breach of contract; (3)
violations of the Texas Constitution; (4) to remove cloud and
quiet title to the Property; and (5) declaratory relief. In
their Motion for Summary Judgment, Defendants maintain that
summary judgment is warranted on all of the Leanders'
claims because the statute of limitations has not run on
their ability to enforce the lien on the Property, and
because the Leanders' complaints about the origination of
the loan and any defects associated therewith are both
time-barred and refuted by the summary judgment evidence.
Summary Judgment Standard
56(a) provides that "[t]he court shall grant summary
judgment if the movant shows that there is no genuine issue
as to any material fact and that the movant is entitled to
judgment as a matter of law." FED. R. Civ. P. 56(a). The
moving party must initially "demonstrate the absence of
a genuine issue of material fact." Celotex Corp. v.
Catrett, 106 S.Ct. 2548, 2553 (1986). Once the moving
party meets its burden, the burden shifts to the nonmovant,
"who must, by submitting or referring to evidence, set
out specific facts showing that a genuine issue exists"
and that summary judgment should not be granted.
Norwegian Bulk Transport A/S v. International Marine
Terminals Partnership, 520 F.3d 409, 412 (5th
Cir. 2008); see also Morris v. Covan World Wide Moving,
Inc., 144 F.3d 377, 380 (5th Cir. 1998). A party
opposing a properly supported motion for summary judgment may
not rest upon mere allegations or denials in a pleading, and
unsubstantiated assertions that a fact issue exists will not
suffice. Celotex, 106 S.Ct. at 2548. Instead,
"the nonmoving party must set forth specific facts
showing the existence of a 'genuine' issue concerning
every essential component of its case." Morris,
144 F.3d at 380.
Statute of Limitations
their first claim, titled "Statute-of-Limitations Bars
any suit seeking authority to foreclose, " and
"Statute-of-Limitations Bars any Power of Sale, "
the Leanders allege that U.S. Bank "accelerated the debt
on [the] Property in August 2010 when it filed its
Application for Foreclosure. However, U.S. Bank did not file
its most recent application to foreclose until January 2015,
after the four-year statute of limitations [had]
expired." Document No. 1 -4 at 5. Defendants, in their
Motion for Summary Judgment, argue that summary judgment is
warranted on the Leanders' statute of limitations claim
because the acceleration of the debt was abandoned by virtue
of subsequent Notices of Default, which sought less than the
full amount due, and operated to re-set the statute of
16.035 of the Texas Civil Practice and Remedies Code, which
governs foreclosure proceedings on a real property lien,
provides for a four year statute of limitations, as follows:
A 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 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.
note with an optional acceleration clause, a cause of action
accrues under § 16.035 when the "holder actually
exercises its option to accelerate" by providing first a
notice of intent to accelerate and then a notice of
acceleration. Holy Cross Church of God in Christ v.
Wolf, 44 S.W.3d 562, 566 (Tex. 2001). But, "[a]
note holder who exercises its option to accelerate may
'abandon acceleration if the holder continues to accept
payments without exacting any remedies available to it upon
declared maturity.'" Khan v. GBAK Properties,
Inc., 371 S.W.3d 347, 353 (Tex. App.-Houston
[1stDist. 2012, no pet.) (quoting Holy
Cross, 44 S.W.3d at 566-67). Acceleration may also
"be abandoned by agreement or other action of the
parties, " with there being no requirement of a written
agreement. Khan, 371 S.W.3d at 353, 356; see
also Clawson v. GMAC Mortgage, LLC, No. 3:12-CV-00212,
2013 WL 1948128 * 4 (S.D. Tex. May 9, 2013) (Texas law
"does not preclude a note holder from abandoning
acceleration without express agreement from the
borrower."). In addition, abandonment may be unilateral
and far from express. "For example, a lender may abandon
acceleration by sending new notices of default and intent to
accelerate demanding less than the full balance of the
loan." Curry v. Ocwen Loan Servicing, LLC,
Civil Action No. H-15-3089, 2016 WL 3920375 * 5 (S.D. Tex.
July 14, 2015) (Lake, J.) (citing Leonard v. Ocwen Loan
Servicing, Inc., Civ. Action No. H-13-3019, 2014 WL
4161769 at *4-5 (S.D. Tex. Aug. 19, 2014) (Leonard I),
aff'd, Leonard II, 616 Fed.Appx. 677; Boren v.
U.S. Bank Nat'l Assoc, Civ. Action No. H-13-2160,
2014 WL 5486100 at *l-2 (S.D. Tex. Oct. 29, 2014),
aff'd, 807 F.3d 99 (5th Cir. 2015)).
When abandonment of acceleration occurs, "the statute of
limitations period under § 16.035(a) cease[s] to run ...
and a new limitations period  begins." Boren v.
U.S. Nat'l Bank Ass'n, 807 F.3d 99, 106
(5th Cir. 2015).
the summary judgment evidence shows that U.S. Bank, National
Association, as Trustee for Asset Backed Securities
Corporation Home Equity Loan Trust, Series 2005-HE2, filed an
Application for Order of Foreclosure in the 268th
District Court of Fort Bend County, Texas, on August 25,
2010. (Document No. 13-9). On October 4, 2012, before that
state court action was dismissed without prejudice for want
of prosecution, a Notice of Default was sent to the Leanders
advising them that they were in default and setting forth the
amount they would have to pay to bring their loan current
(Document No. 13-1 at 16). Two years later, on November 4,
2014, a subsequent Notice of Default was sent to the Leanders
advising them that the loan was in default and setting forth
the amount they would have to pay to bring the loan current
(Document No. 13-2 at 8). Those two Notices of Default
operated as an abandonment of the prior acceleration of the
Note, an abandonment of the foreclosure proceeding, and a
re-setting the four year statue of limitations under §
16.035 of the Texas Civil Practice and Remedies Code. See
Boren v. U.S. Nat'lBank Ass 'n, 807
F.3d 99, 106 (5th Cir. 2015) ("U.S.
Bank's Second Notice of Default informed the Borens that
the total amount necessary to bring their loan current was
the amount due under the original terms of the Note and that
the bank would accelerate the maturity date of the loan if
the Borens failed to pay this amount. This notice
unequivocally manifested an intent to abandon the previous
acceleration and provided the Borens with an opportunity to
avoid foreclosure if they cured their arrearage. As a result,
the statute of limitations period under § 16.035(a)
ceased to run at that point and a new limitations period did
not begin to accrue until the Borens defaulted again and U.S.
Bank exercised its right to accelerate thereafter.");
Martin v. Federal Nat'lMortgage Ass
'n,814 F.3d 315, 318 (5thCir. 2016)
("As is relevant here, the request for payment of less
than the full obligation - after initially accelerating the
entire obligation - was an unequivocal expression of the
bank's intent to abandon or waive its initial
acceleration."); Alvarado v. U.S. Bank Nat'l
Ass'n,652 Fed.Appx. 305, 307 (5th Cir.
2016) ("Because U.S. Bank sent Alvarado 'account
statements listing less than the full accelerated debt, as
well as notices of default and acceleration, after the
October 2008 acceleration' the district court did not err
in granting summary judgment for U.S. Bank.");
Alcala v. DeutscheBank Nat'l Trust
Co., Civil Action No. H-15-3627, 2016 WL4363403*3
(S.D.Tex. Aug. 15, ...