United States District Court, S.D. Texas, Houston Division
Stanley J. Bryant, Plaintiff,
The CIT Group/Consumer Finance, Inc., et al., Defendants.
MEMORANDUM OPINION AND ORDER
H. Miller United States District Judge.
before the court is a motion for summary judgment filed by
Countrywide Home Loans, Inc. n/k/a Bank of America, North
America (“BANA”), and Mortgage Electronic
Registration Systems, Inc. a/k/a MERS (“MERS”)
(collectively, “Defendants”), and a motion to
sever filed by Ditech Financial LLC (“Ditech”)
and The Bank of New York Mellon f/k/a The Bank of New York,
as Trustee for the benefit of the Certificate holders of
CWABS, Inc. Asset-Backed Certificates, Series 2006-BC4
(“BONYM”). Having considered the motions, related
filings, and applicable law, the court is of the opinion that
the motion for summary judgment should be GRANTED IN PART AND
DENIED IN PART, and the motion to sever should be DENIED.
Stanley J. Bryant filed suit to challenge the foreclosure
sale of the real property at 2234 Dawn Shadow Way, Fresno,
Texas 77545 (the “Property”). Dkt. 49 at 2. On
December 20, 2005, he executed a $130, 736 mortgage note
secured by a deed of trust (collectively, the
“Loan”). Dkt. 20 at 3. It conveyed a security
interest in the Property to CIT Group/Consumer Finance, Inc.
(“CIT”), the original lender. Dkt. 20 at 3.
Bryant defaulted on the Loan in 2011, allegedly because he
struggled to pay the bills after experiencing medical
problems. Id. at 4. He received an unequivocal
notice of default and intent to accelerate the Loan from BANA
in September of that year. Dkt. 54 at 2 & Ex. 4. In
November, Recontrust Company, N.A.-acting for BANA, which in
turn was acting for BONYM-sent Bryant a foreclosure sale
notice. Dkt. 20, Ex. 2; Dkt. 54, at 2 & Ex. 4. Bryant
also received five other notices of sale, the most recent of
which is dated April 2016. Dkt. 54 at 2 & Exs. 2-7.
Defendant BANA is listed as the acting mortgage servicer on
some of the notices which were served by a substitute trustee
or trustees. See, e.g., Dkt. 20, Ex. 2. The Property
was sold on April 5, 2016, to BONYM via a credit bid. Dkt.
20, Ex. 8; Dkt. 54 at 4. Bryant contends, however, that he
still holds legal or equitable interest in the house.
See Dkt. 20 at 4, 29.
Bryant's Claims Against BANA and MERS
asserts eleven causes of action involving BANA, MERS, or
both. Bryant first alleges that several
documents in the chain of title-some of which were allegedly
prepared by MERS or BANA-are frauds and forgeries or are
otherwise inadequate, breaking the chain of assignments from
the original lender, CIT, to BONYM. Dkt. 20 at 4-7. Bryant
also argues that Chester Levings, who was acting as assistant
secretary for MERS, did not actually sign the assignment on
file with Fort Bend County Property Records and that it is
void as a forgery. Id. at 5. He similarly maintains
that Melanie Cowan-acting as vice president of BANA, which
was acting as attorney-in-fact for BONYM-did not sign the
substitute trustee document bearing her signature and that
the document is therefore a forgery. Id. at 6. He
also argues that the chain of title was broken because MERS
failed to specify for whom it was acting as
“nominee” on its assignment to BONYM and that,
because MERS was not the owner of the note or deed of trust,
the assignment is void. Id. at 4-6.
second claim is that his Loan was not properly
“securitized into the 2006-BC4 Trust . . . according to
that Trust's Pooling and Servicing Agreement
(“PSA”) and the law of the state under which the
2006-BC4 Trust was created.” Id. at 7. He
argues that the assignment on record with Fort Bend County is
dated “well after the Trust's closing date”
and that other relevant paperwork was improperly filed.
Id. at 11-14.
third claim, which he labels as his first cause of action, is
that BANA and MERS violated section 12.002 of the Texas Civil
Practice and Remedies Code which prohibits
mak[ing], present[ing], or us[ing] a document or other record
with: (1) knowledge that the document or other record is a
fraudulent court record . . . (2) intent that the document or
other record be given the same legal effect as a court record
. . . evidencing a valid lien or claim against real or
personal property or an interest in real or personal
property; and (3) intent to cause another person to suffer .
. . financial injury; or . . . mental anguish or emotional
Tex. Civ. Prac. & Rem. Code § 12.002(a); Dkt. 20, at
20-21. He alleges that BANA and MERS violated this statute by
using fraudulent mortgage assignments and trustee
substitution documents that did not accurately represent
their interest in the Property. Dkt. 20, at 20-22. He also
pleads the discovery rule on this claim, stating that
“his legal injury was inherently un-discoverable due to
Defendants' conduct.” Id. at 22.
he contends that the actions of BANA and MERS regarding the
mortgage assignments violated the following statutes and
accordingly rendered BANA and MERS negligent per se: Texas
Civil Practice & Remedies Code sections 12.002,
41.008(c)(8), 41.008(c)(12); Texas Local Government Code
section 192.007; and Texas Penal Code sections 32.21 and
32.47. Dkt. 20 at 22-24. Bryant also argues that BANA and
MERS were grossly negligent and grossly negligent per se
based on violations of the same statutes. Id. at
24-25. He also pleads the discovery rule on these claims.
Id. at 25.
Bryant brings a money had and received claim against BANA,
contending that it held “money and property that in
equity and good conscience belongs to Plaintiff.”
Id. at 25.
Bryant contends that BANA was unjustly enriched by its
receipt of his payments when BANA “was not the legal
owner and holder of the mortgage loans, mortgage liens,
mortgage Note, or Deeds of Trust.” Id. at 26.
He pleads the discovery rule on this claim as well.
he seeks a declaratory judgment against BANA and MERS
regarding whether they had the authority to foreclose or
ownership interest in the note. Id. at 28-29. He
also seeks a declaration “that Plaintiff is entitled to
the exclusive possession of the property” and that BANA
and MERS have no interest in the Property. Id. at
Bryant brings a quiet title claim against BANA and MERS,
alleging that he has equitable interest in the Property.
Id. He asserts that Defendants' claims to
interest in the Property “constitute clouds on
Plaintiff's rightful title to the Property.”
Id. at 30. He seeks a declaratory judgment that
“no Defendant has or had any interest in the Property
at the time of sale and that Plaintiff is entitled to quiet
and peaceful possession of the Property against all
Defendants now and forever.” Id.
Bryant seeks declaratory relief against BANA and MERS because
the statute of limitations “for any Defendant or their
mortgage servicer to conduct a non-judicial or judicial
foreclosure against the Plaintiff's Property” under
Texas Civil Practice and Remedies Code section 16.035 had
expired, and they took no actions that could be construed as
waiver or abandonment of acceleration of the Loan.
Id. at 30-31.
Bryant asserts that Defendants fraudulently asserted an
interest in the Property or note, made attempts to collect on
the Property with a broken chain of title, and failed to
disclose that they were time-barred from foreclosing on the
Loan. Id. at 31-32. He also pleads the discovery
rule regarding this claim. Id. at 33.
Bryant contends that BANA violated the Texas Debt Collection
Act under Texas Financial Code sections 392.301(a)(8),
392.304(a)(14), and 392.304(a)(19). Id. at 33-34. He
argues that BANA violated these provisions “by
threatening foreclosure and engaging in foreclosure activity
against Plaintiff, attempting to collect the mortgage Note
debt from Plaintiff without legal standing to do so, ”
and “filing . . . forged assignments and attempt[ing]
to foreclose past the limitations period.” Id.
at 34. Bryant alleges that these actions make him eligible
for actual and statutory damages. Id. He also pleads
the discovery rule regarding this claim. Id. Bryant
also requests attorneys' fees and uncapped exemplary
damages. Id. at 35-37.
Motion for Summary Judgment
and MERS now move for summary judgment on all of Bryant's
remaining claims. Dkt. 49 at 1, 4. Addressing Bryant's
securitization challenges, BANA and MERS argue that Bryant
lacks standing to assert violations of the PSA. Dkt. 49 at
5-6. Regarding his claim involving MERS and the chain of
title, they argue that MERS was a beneficiary of the deed of
trust, had the right to assign the deed of trust to BONYM,
and “did not purport to assign the Note in the
Assignment.” Id. at 9.
assert that Bryant's negligence per se, gross negligence,
and gross negligence per se claims fail because (1) they are
time-barred; (2) Texas Local Government Code section 192.007
provides no cause of action and “does not require
recordation of an assignment of a deed of trust;” (3)
assignments are not liens under Texas Civil Practice and
Remedies Code section 12.002; (4) Bryant failed to cite
authority that violations of 12.002 or 192.007 constitute
negligence per se or gross negligence per se; (5) he
“fail[ed] to allege any facts that he belongs to the
class that the statutes were intended to protect and that the
statute is one for which tort liability may be imposed when
violated;” (6) he failed to allege “any
non-conclusory facts that Defendants' conduct caused him
injury;” and (7) he failed to “allege facts
showing Defendants owed him a legal duty.” Dkt. 49 at
18-19. Defendants also argue that Bryant's Penal Code
violation claim fails because the statute provides no private
cause of action. Id. at 19-20.
Bryant's declaratory relief request involving the statute
of limitations, Defendants argue that Bryant's
allegations that the Loan was accelerated and not abandoned
are conclusory. Id. at 27. Addressing the forgery
allegations, BANA and MERS argue that “assignments of
deeds of trust and appointments of substitute trustees are
not liens, ” Bryant failed to allege sufficient facts
to support the fraudulent lien claim, and the claim is
time-barred. Id. at 3, 6-7. Regarding Bryant's
fraudulent lien claim, Defendants argue that the claim is
time-barred, the document assigning the deed of trust is not
a “lien or claim” for purposes of Texas Civil
Practice and Remedies Code section 12.002, Bryant's
allegations are conclusory and lacking the factual support
necessary to establish the elements of this claim under Texas
law, and his claim should be dismissed with prejudice because
he “lacks standing to challenge the Assignment.”
Id. at 11-14. Responding to Bryant's money had
and received claim, BANA asserts that it fails “because
it is based on the flawed assignment challenges” and
“because the Note and Deed of Trust govern the subject
matter of the dispute.” Id. at 20. BANA and
MERS argue that Bryant's unjust enrichment allegations
fail “because Plaintiff does not allege sufficient
facts to support such claims.” Id. at 20-21.
and MERS note that declaratory relief “is remedial in
nature and dependent upon the assertion of viable causes of
action.” Id. at 26. They argue none of
Bryant's causes of action is viable and Bryant failed to
allege in more than a conclusory fashion that Defendants did
not abandon acceleration of the Loan. Id. at 27.
Regarding Bryant's quiet title claim, BANA and MERS argue
this claim fails both because Bryant “cannot
demonstrate that he has superior title to the property”
and because he has admitted that he is in default and failed
to pay the amount he owes on the note. Id. at 4, 11.
BANA and MERS argue “[t]he fraud claim is barred by the
economic loss rule” and that Bryant failed to meet the
pleading standards of Rule 9(b). Id. at 4, 21,
23-24. BANA argues that Bryant's Texas Debt ...