United States District Court, S.D. Texas, Corpus Christi Division
ORDER ON MOTIONS FOR SUMMARY JUDGMENT
GONZALES RAMOS UNITED STATES DISTRICT JUDGE.
Windsor Mortgage Holdings Limited, LLC (Windsor) filed this
action against Defendants Brenda S. Pyron and Dennis L. Pyron
(the Pyrons) seeking to recover on a defaulted home equity
loan through foreclosure of the lien securing the debt.
Windsor has filed its motion for summary judgment (D.E. 25)
seeking to eliminate the Pyrons' affirmative defenses and
to prove up the note, Windsor's status as holder, the
Pyrons' default, the liquidated amount owed, and the
right to foreclose. The Pyrons have filed their motion for
summary judgment (D.E. 26) seeking to bar Windsor's claim
on the basis of limitations and claiming that Windsor has no
evidence to establish the amount due. For the reasons set out
below, the Court GRANTS IN PART AND DENIES IN PART
Windsor's motion (D.E. 25) and DENIES the Pyrons'
motion (D.E. 26) in its entirety.
than the calculation of the amount owed and the Pyrons'
actual receipt of correspondence, the facts are largely
undisputed. Objections to certain evidence will be addressed
in the Discussion section.
Pyrons executed a note in the original principal amount of
$20, 000, payable to GMAC Mortgage, LLC d/b/a DiTech (GMAC),
on or about November 16, 2005. D.E. 25-1, pp. 9-12. GMAC
endorsed the note in blank and Windsor is now owner as
bearer, with physical possession of the note. On the same
date of the note's execution, and to secure its
repayment, the Pyrons signed a Closed End Deed of Trust
granting GMAC a lien on their residence at 210 Santa Monica
Street, Portland, Texas. D.E. 25-1, pp. 14-20. Through a
series of assignments, Windsor is now the beneficiary of the
Deed of Trust, with the right to enforce it according to its
terms. D.E. 25-1, pp. 22-38.
making payments through June 1, 2011, the Pyrons defaulted on
their obligation to make any further payments on the note. On
three occasions (January 4, 2010, May 7, 2010, and October 6,
2011), the Pyrons were sent letters giving them notice of
default and intent to accelerate the indebtedness. D.E. 25-1,
pp. 48-55. On December 1, 2011, attorneys representing
GMAC's interests sent the Pyrons a notice of acceleration
demanding payment of the full amount due, plus interest and
fees in the total amount of $35, 483.64. D.E. 25-1, pp.
about January 30, 2012, the Pyrons hired the Litvin Law Firm,
PC to represent their interests. D.E. 25-1, p. 72 (Cease and
Desist Notice). On February 10, 2012, GMAC gave notice to
both the Litvin Law Firm and to the Pyrons that it would,
thereafter, communicate regarding the Pyrons' account
only with that law firm. The communications would include
telephone calls, emails, and all written correspondence,
including the Pyrons' monthly account statements. This
recognition that the Pyrons were represented by counsel would
continue unless or until they notified GMAC in writing that
the representation had terminated. D.E. 25-1, pp. 70-71.
Pyrons did not pay the accelerated amount due. On August 27,
2012, GMAC filed a petition for judicial foreclosure in the
36th Judicial District Court of San Patricio County, Texas
under Cause No. S-12-5757CV-A. D.E. 25-1, p. 133. However, on
January 11, 2013, GMAC filed a nonsuit without prejudice,
terminating the judicial foreclosure action. D.E. 25-1, p.
67. Immediately thereafter, it sent a monthly statement,
dated January 15, 2013, to the Pyrons through the Litvin Law
Firm. D.E. 25-1, pp. 74-76. That statement reflected that the
total amount due was $9, 003.32, as of the due date of July
1, 2011-when the Pyrons ceased making payments.
statements followed, dated February 15, 2013, March 15, 2013,
April 15, 2013, May 15, 2013, June 17, 2013, September 16,
2013, October 15, 2013, and November 15, 2013. D.E. 25-1, pp.
79-117. Each claimed a greater amount due than the last. But
to cure the default and bring the account current, they all
demanded less than the total principal balance listed and
substantially less than the full accelerated balance of the
note would have been. Starting on December 16, 2013, similar
notices were sent to the Pyrons by way of the Litvin Law Firm
by Ocwen Loan Servicing, LLC. D.E. 25-1, pp. 119-23
(including statement of January 15, 2014). Throughout this
time, the Litvin Law Firm continued to represent the Pyrons.
D.E. 25-1, p. 138.
November 10, 2016, Windsor's attorneys sent notice of
default and intent to accelerate to the Pyrons at their own
residence address. D.E. 25-1, pp. 57-58. The amount owed to
cure default was listed as $17, 634.65. On December 13, 2016,
Windsor's counsel sent to the Pyrons' residence
address a notice of acceleration of loan maturity, reflecting
that all unpaid principal and accrued interest was due and
directing the Pyrons to contact the firm for the total
amount. D.E. 25-1, p. 128. On May 18, 2017, Windsor filed
this action. D.E. 1.
Pyron admitted in his deposition that the Pyrons have made no
payments on this debt since the loan went into default in
2011. D.E. 25-1, p. 139. In his summary judgment affidavit,
however, Dennis Pyron claims that he made attempts to resolve
this matter, modify the loan, and make payments, but that
Windsor and its predecessors in interest refused those
efforts. D.E. 26, p. 5. He further claims that he did not
receive any statements or correspondence after the December
1, 2011 acceleration. The Pyrons' current attorney, Lynda
S. Ladymon, testified that she occasionally inquired of the
Pyrons' previous counsel if they had any correspondence
on the account and they indicated that they had not received
any communications from Windsor's predecessors in
interest. D.E. 29-3.
now claims that the Pyrons owe $75, 538.05 as of January 30,
2018, and that the debt continues to accrue interest. D.E.
25-1, pp. 130-31. That calculation reflects $35, 173.70 in
principal, $21, 884.27 in interest, $8, 082.03 in property
taxes, and $10, 398.05 in attorney's fees and expenses.
Standard of Review
judgment is proper if there is no genuine issue as to any
material fact and the moving party is entitled to judgment as
a matter of law. Fed.R.Civ.P. 56(c). A genuine issue exists
“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). The
Court must examine “whether the evidence presents a
sufficient disagreement to require submission to a jury or
whether it is so one-sided that one party must prevail as a
matter of law.” Id. at 251-52. In making this
determination, the Court must consider the record as a whole
by reviewing all pleadings, depositions, affidavits, and
admissions on file, and drawing all justifiable inferences in
favor of the party opposing the motion. Caboni v. Gen.
Motors Corp., 278 F.3d 448, 451 (5th Cir. 2002).
Court may not weigh the evidence or evaluate the credibility
of witnesses. Id. Furthermore, “affidavits
shall be made on personal knowledge, shall set forth such
facts as would be admissible in evidence, and shall show
affirmatively that the affiant is competent to testify to the
matters stated therein.” Fed.R.Civ.P. 56(e); see
also Cormier v. Pennzoil Exploration & Prod. Co.,
969 F.2d 1559, 1561 (5th Cir. 1992) (per curiam) (refusing to
consider affidavits that relied on hearsay statements);
Martin v. John W. Stone Oil Distrib., Inc., 819 F.2d
547, 549 (5th Cir. 1987) (per curiam) (stating that courts
cannot consider hearsay evidence in affidavits and
depositions). Unauthenticated and unverified documents do not
constitute proper summary judgment evidence. King v.
Dogan, 31 F.3d 344, 346 (5th Cir. 1994) (per curiam).
moving party bears the initial burden of showing the absence
of a genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). If the moving party
demonstrates an absence of evidence supporting the nonmoving
party's case, then the burden shifts to the nonmoving
party to come forward with specific facts showing that a
genuine issue for trial does exist. Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587
(1986). To sustain this burden, the nonmoving party cannot
rest on the mere allegations of the pleadings. Fed.R.Civ.P.
56(e); Anderson, 477 U.S. at 248. “After the
nonmovant has been given an opportunity to raise a genuine
factual issue, if no reasonable juror could find for the
nonmovant, summary judgment will be granted.”
Caboni, 278 F.3d at 451.
evidence must be evaluated under the summary judgment
standard to determine whether the moving party has shown the
absence of a genuine issue of material fact. “[T]he
substantive law will identify which facts are material. Only
disputes over facts that might affect the outcome of the suit
under the governing law will properly preclude the entry of
summary judgment.” Anderson, 477 U.S. at 248.
Narrowing of Issues
Pyrons pled the following as affirmative defenses:
limitations; failure to mitigate damages; illegality; no
damages; unconscionability; unclean hands; violation of the
Texas Constitution; and lack of subject matter jurisdiction.
D.E. 16. The Court previously rejected the jurisdictional
issue finding that the amount in controversy requirement for
diversity jurisdiction has been met. D.E. 15. Limitations and
damages are addressed below. Windsor challenged the remaining
defenses in its motion. D.E. 25. The Pyrons did not respond
to Windsor's arguments challenging the remaining defenses
but rather stated, “Defendant [sic] has asserted
numerous other defenses which it will not pursue.” D.E.
29, p. 2. For that reason, the Court GRANTS IN PART
Windsor's motion (D.E. 25) and DISMISSES the Pyrons's
defenses based upon: failure to mitigate damages; illegality;
unconscionability; unclean hands; and violation of the Texas
The Limitations Defense
parties do not dispute that a four-year statute of
limitations applies to an action seeking to collect a debt by
foreclosure of a lien on real property. Tex. Civ. Prac. &
Rem. Code § 16.035(b). Neither is there any disagreement
that the cause of action accrues when the holder of the note
accelerates the debt. See e.g., Holy Cross Church of God
in Christ v. Wolf, 44 S.W.3d 562, 566 (Tex. 2001).
Pyrons rely on the fact that Windsor's predecessor in
interest accelerated the indebtedness on the note by letter
dated December 1, 2011. Given that this action was not filed
until May 18, 2017 (more than five years after the debt was
accelerated), it is barred by limitations absent some other
intervening factor. Windsor asserts that an intervening
factor was its predecessor's abandonment or rescission of
the December 1, 2011 acceleration before the expiration of
four years from that date. Thus, Windsor claims that
limitations did not begin to run until the second
acceleration of indebtedness on December 13, 2016. In that
event, the 2017 filing would be well within the four-year
mortgage was not assigned to Windsor until September 26,
2016. D.E. 25-1, pp. 36-38. Thus, the Court must determine
whether the undisputed facts set out above demonstrate that
Windsor's predecessors in interest took the necessary
action to abandon the December 1, 2011 acceleration within
four years of that date. Windsor argues that it did so by (a)
nonsuiting the prior foreclosure action and (b) sending
monthly statements seeking to collect only the overdue
amounts of monthly payments and associated charges, which
were less than the full amount of principal and interest that
would have been due and owing if the note were still
accelerated. The Pyrons argue that the nonsuit was nothing
more than a failure to seek a remedy, the monthly statements
were insufficient to abandon the acceleration, and they never
actually received any monthly statements of any kind after
the 2011 acceleration and before the expiration of
Abandonment of ...