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De La Cruz v. Bank of New York

United States District Court, W.D. Texas, Austin Division

June 15, 2018

DAN SERGIO DE LA CRUZ, Plaintiff,
v.
THE BANK OF NEW YORK, AS TRUSTEE OF THE CERTIFICATEHOLDERS CWABS, INC., ASSET-BACKED CERTIFICATES SERIES 2005-9; AND DITECH FINANCIAL LLC, Defendants.

          ORDER

          SAM SPARKS SENIOR UNITED STATES DISTRICT JUDGE

         BE IT REMEMBERED on this day the Court reviewed the file in the above-styled case, and specifically Plaintiff Dan Sergio De La Cruz's Motion for Final Summary Judgment [#46], Plaintiffs Supplemental Authority [#47], Defendant The Bank of New York Mellon as Trustee of the Certificateholders CWABS, Inc., Asset-Backed Certificates Series 2005-9 (BONY)'s Response [#48] in opposition, Plaintiffs Reply [#49] in support, BONY's Supplemental Response [#50] in opposition, Plaintiffs Sur-Reply [#51] in support, and BONY's Amended Response [#52][1] in opposition. Having reviewed the documents, the governing law, and the file as a whole, the Court now enters the following opinion and orders.

         Background

         This is a residential foreclosure case. Plaintiff purchased the home at 12713 Bright Sky Overlook, Austin, Texas 78732 (the Property), as evidenced by the warranty deed recorded with the County Clerk of Travis County, Texas. See PL Mot. Summ. J. [#46-1] Ex. A (Warranty Deed). In July 2005, Plaintiff received a home equity loan in the amount of $325, 400.00 from Loan America, Inc. to refinance a previous loan on the Property. See Resp. [#48-1] Ex. A-l (Note). The Note was secured by the Property. Id. Ex. A-2 (Security Instrument). The Note was assigned to BONY on August 17, 2006. Id. Ex. A-3 (Assignment).

         Plaintiff defaulted on his loan in early 2006. See PI. Mot. Summ. J. [#46] at 4. A notice of default and intent to accelerate was mailed to Cruz on June 1, 2006. See Resp. [#48-2] Ex. B-1 (2006 Default and Intent to Accelerate Notice). BONY sent a notice of acceleration on August 25, 2006. See Resp. [#48-2] Ex. B-2 (2006 Acceleration Notice). Less than a month later, BONY filed an application for expedited foreclosure under Texas Rule of Civil Procedure 736. See PL Mot. Summ. J. [#46-4] Ex. D (2006 Foreclosure Application). The state court granted BONY's application on February 21, 2007, permitting a non-judicial foreclosure sale. See Resp. [#48-2] Ex. B-3 (First Foreclosure Order).

         Before the First Foreclosure Order issued, on October 27, 2006, BONY offered Plaintiff a repayment plan to bring his loan up to date. See PL Mot. Summ. J. [#46-18] Ex. R (2006 Repayment Plan Agreement). The 2006 Repayment Plan Agreement explicitly states "[i]f we previously notified you that your Loan is (or will be) accelerated and/or due in full, it remains accelerated and/or due in full." Id. It is unclear Plaintiff agreed to the Repayment Plan Agreement. See Id. (unsigned). BONY accepted loan payments from Plaintiff in November 2006 and April 2007. See Resp. [#48-2] Ex. A-4 (Payment History); Resp. [#48] at 12.

         Following more missed payments, BONY sent another notice of acceleration on July 11, 2007, and soon thereafter filed another application for expedited foreclosure on August 1, 2007. See Resp. [#48-2] Ex. B-5 (2007 Acceleration Notice); PL Mot. Summ. J. [#46-7] Ex. G (2007 Foreclosure Application). The state court granted BONY's application on January 10, 2008, permitting a non-judicial foreclosure sale. See PI. Mot. Summ. J. [#46-8] Ex. H (Second Foreclosure Order). BONY did not proceed with the foreclosure sale.

         BONY mailed Plaintiff a payoff demand statement on May 6, 2008, reflecting the total amount to release the lien on the Property. See PI. Mot. Summ. J. [#46-17] Ex. Q (2008 Payoff Demand). In addition, BONY sent a reinstatement quote on December 17, 2010, indicating Plaintiff could bring his loan current by paying past due payments and fees. See Resp. [#48-2] Ex. B-7 (2010 Reinstatement Quote).

         On January 14, 2011, BONY sent Plaintiff another notice of default and intent to accelerate. See Resp. [#48-2] Ex. B-8 (2011 Default and Intent to Accelerate Notice). BONY followed up with a notice of acceleration on February 15, 2011. See Resp. [#48-2] Ex. B-9 (2011 Acceleration Notice). BONY did not proceed with foreclosure before mailing another reinstatement quote to Plaintiff on March 23, 2012. See Resp. [#48-2] Ex. B-10 (2012 Reinstatement Quote).

         BONY filed yet another application for expedited foreclosure on February 24, 2016. See Resp. [#48-2] Ex. B-ll (2016 Foreclosure Application). The state court granted BONY's application on November 29, 2016, permitting a non-judicial foreclosure sale. See Resp. [#48-2] Ex. B-12 (Third Foreclosure Order).

         On February 1, 2017, Plaintiff filed this lawsuit in the 419 Judicial District Court of Travis County, Texas. See Notice Removal [#1] at 1. BONY removed the case to this Court based on diversity jurisdiction. Id. at 3-6. Plaintiff seeks to quiet title on the Property and also requests a declaratory judgment that the statute of limitations expired on BONY's power to foreclose. See Third Am. Compl. [#43] at ¶¶ 29-39. BONY filed a counterclaim for judicial foreclosure of the Property on March 28, 2017. See Counterclaim [#17] at ¶¶ 10-14.

         Plaintiff now moves for summary judgment on its affirmative claim as well as BONY's counterclaim and affirmative defenses. See PI. Mot. Summ. J. [#47]. The motion is fully briefed and ripe for consideration.

         Analysis

         I. Summary Judgment-Legal Standard

          Summary judgment shall be rendered when the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine dispute as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986); Washburn v. Harvey, 504 F.3d 505, 508 (5th Cir. 2007). A dispute regarding a material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When ruling on a motion for summary judgment, the court is required to view all inferences drawn from the factual record in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986); Washburn, 504 F.3d at 508. Further, a court "may not make credibility determinations or weigh the evidence" in ruling on a motion for summary judgment. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000); Anderson, 477 U.S. at 254-55.

         Once the moving party has made an initial showing that there is no evidence to support the nonmoving party's case, the party opposing the motion must come forward with competent summary judgment evidence of the existence of a genuine fact issue. Matsushita, 475 U.S. at 586. Mere conclusory allegations are not competent summary judgment evidence, and thus are insufficient to defeat a motion for summary judgment. Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir. 2007). Unsubstantiated assertions, improbable inferences, and unsupported speculation are not competent summary judgment evidence. Id. The party opposing summary judgment is required to identify specific evidence in the record and to articulate the precise manner in which that evidence supports his claim. Adams v. Travelers Indent. Co. of Conn., 465 F.3d 156, 164 (5th Cir. 2006). Rule 56 does not impose a duty on the court to "sift through the record in search of evidence" to support the nonmovant's opposition to the motion for summary judgment. Id.

         "Only disputes over facts that might affect the outcome of the suit under the governing laws will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248. Disputed fact issues that are "irrelevant and unnecessary" will not be considered by a court in ruling on a summary judgment motion. Id. If the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to its case and on which ...


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