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Patton v. JPMorgan Chase Bank, National Association

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

May 7, 2018



          Lee H. Rosenthal, Chief United States District Judge

         Kelly Ann Patton and Christi Lee Patton sued on behalf of their mother, Patricia Ann Patton, to prevent JP Morgan Chase from foreclosing on Patricia Patton's house. The defendants moved for summary judgment, (Docket Entry No. 34), and the plaintiffs did not respond. The motion for summary judgment is granted and final judgment is entered by separate order, for the reasons analyzed below.

         I. Background

         The material facts are undisputed. In October 2001, Richard and Patricia Patton bought property in Houston, Texas. Richard Patton applied for and obtained a Veterans Affairs mortgage loan from Home Trust Company. The Pattons made monthly payments on the mortgage until May 2004, when Richard Patton died. Shortly after the will was probated, Patricia Patton became the sole owner of the property. In 2005, Chase became the holder and servicer of the mortgage loan on the property.

         Patricia Patton contacted Chase to discuss modifying the loan because of her limited income. Chase declined to modify her loan terms or her monthly payments. When she fell behind in the payments, Chase accelerated the loan in December 2004 and posted the property for foreclosure sale in January 2005. Patricia Patton has made no payments on the mortgage since January 2005. She has lived on the property throughout that period.

         Patricia Patton filed for Chapter 7 bankruptcy protection and received a discharge in April 2005. Her mortgage loan was unaffected. Chase issued a “default and acceleration warning notice” in September 2008, giving her the option to pay the past due amount or face acceleration of the loan. In April 2011, Chase sent a written notice rescinding an earlier acceleration. In August 2011, Chase issued another default and acceleration warning notice, giving Patricia Patton the same option to pay the past due amount or face acceleration of the loan. She did not make any payments. Chase posted the property for foreclosure sale in November 2012. Patricia Patton filed for Chapter 13 bankruptcy protection, which was confirmed in February 2013.

         In December 2015, Patricia Patton was suffering from dementia. In March 2016, her daughter, Kelly Patton became involved to try to prevent the foreclosure. Between October and December 2016, Kelly Patton contacted Chase to seek a loan modification on her mother's behalf. Kelly Patton alleges that in December 2016, a Chase representative told her in a phone call that her mother qualified for a loan modification. Shortly after that, Chase sent a letter to Kelly and Patricia Patton that Patricia Patton might qualify for a loan assumption and modification program. They sent in the required documents to apply. In February 2017, Chase denied the application because it “service[d] the mortgage on behalf of an investor or group of investors that hasn't approved a loan assumption and modification under this program.” (Docket Entry No. 27-11 at 2). Kelly Patton contacted the Veterans Affairs Administration and learned that Patricia Patton would have to cure the loan default before the assumption or modification request could be considered. They did not cure the default or make any payment. In May 2017, Chase advised the Pattons that the property would be posted for foreclosure sale on July 4, 2017. Kelly Patton requested a loan modification or other assistance from Chase in June 2017, without making any payment. Chase did not reply.

         The plaintiffs sued in Texas state court. Chase timely removed on the basis of diversity of citizenship. (Docket Entry No. 1). The court granted Chase's motion to dismiss in November 2017, but granted the plaintiffs leave to amend to add a claim for declaratory judgment. (Docket Entry No. 25). The Pattons amended their complaint, and Chase moved for summary judgment. (Docket Entry Nos. 27, 34). The plaintiffs filed two motions for extensions of time to respond to the motion based on settlement negotiations. (Docket Entry Nos. 36, 38). The last extension ended on March 21, 2018. In a status report, the parties explain that they are continuing to discuss settlement, but that the “Plaintiffs are not compelled to spend the time and expense to respond” to the motion for summary judgment. (Docket Entry No. 40). They have not done so, and have not reported a settlement.

         The only issue is whether Chase's prior loan accelerations, which were not followed by foreclosure within four years, bar its ability to foreclose now.

         II. The Legal Standard

         “Summary judgment is appropriate only if ‘there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.'” Vann v. City of Southaven, Miss., 884 F.3d 307, 309 (5th Cir. 2018) (citations omitted); see also 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.'” Burrell v. Prudential Ins. Co. of Am., 820 F.3d 132, 136 (5th Cir. 2016) (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.'” Brandon v. Sage Corp., 808 F.3d 266, 269-70 (5th Cir. 2015) (quoting 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 . . . that there is an issue of material fact warranting trial.'” Kim v. Hospira, Inc., 709 Fed. App'x 287, 288 (5th Cir. 2018) (quoting Nola Spice Designs, L.L.C. v. Haydel Enters., Inc., 783 F.3d 527, 536 (5th Cir. 2015)). While 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. Austin v. Kroger Tex., L.P., 864 F.3d 326, 335 (5th Cir. 2017) (quoting Little v. Liquid Air Corp., 37 F.3d 1069, 1076 n.16 (5th Cir. 1994)). A fact is material if “its resolution could affect the outcome of the actions.” Aly v. City of Lake Jackson, 605 Fed. App'x 260, 262 (5th Cir. 2015) (citing Burrell v. Dr. Pepper/Seven UP Bottling Grp., Inc., 482 F.3d 408, 411 (5th Cir. 2007)). “If the moving party fails to meet [its] initial burden, the motion [for summary judgment] must be denied, regardless of the nonmovant's response.” Pioneer Exploration, LLC v. Steadfast Ins. Co., 767 F.3d 503 (5th Cir. 2014).

         “When the moving party has met its Rule 56(c) burden, the nonmoving party cannot survive a summary judgment motion by resting on the mere allegations of its pleadings.” Bailey v. E. Baton Rouge Par. Prison, 663 Fed. App'x 328, 331 (5th Cir. 2016) (quoting Duffie v. United States, 600 F.3d 362, 371 (5th Cir. 2010)). The nonmovant must identify specific evidence in the record and articulate how that evidence supports that party's claim. Willis v. Cleco Corp., 749 F.3d 314, 317 (5th Cir. 2014). “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.'” Jurach v. Safety Vision, LLC, 642 Fed. App'x 313, 317 (5th Cir. 2016) (quoting Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005)). In deciding a summary judgment motion, the court draws all reasonable inferences in the light most favorable to the nonmoving party. Darden v. City of Fort Worth, 866 F.3d 698, 702 (5th Cir. 2017).

         III. ...

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