United States District Court, S.D. Texas, Houston Division
FRANK B. GREENWAY, and MARIE G. GREENWAY, Plaintiffs,
MORTGAGE RESEARCH CENTER, LLC, et al., Defendants.
MEMORANDUM AND OPINION
Rosenthal Chief United States District Judge.
B. Greenway and Marie G. Greenway, representing themselves,
sued Mortgage Research Center, LLC; the Government National
Mortgage Association; Wells Fargo Bank; Robert Wilkie, the
Secretary of the United States Department of Veterans
Affairs; The Money Source, Inc.; and Mortgage Electronic
Registration Systems, Inc. (collectively, the
“Lenders”). The Greenways challenge the
nonjudicial foreclosure sale of their home, which occurred in
May 2018. They seek a declaration that the Lenders lack
standing to foreclose, based on claims that include wrongful
foreclosure, fraudulent inducement, breach of contract, void
contract, breach of fiduciary duty, and quiet title. The
Lenders have moved for summary judgment, submitting documents
relating to the mortgage, default, and foreclosure. The
Greenways have not responded or requested more time to do so,
though their response deadline has long past.
careful review of the motion, record evidence, and applicable
law, the court grants summary judgment for the Lenders. Final
judgment is separately entered. The reasons are explained in
September 2015, the Greenways obtained a $155, 778 home
mortgage loan from the Mortgage Research Center to purchase a
home in Bryan, Texas. (Docket Entry No. 21 at 7). The United
States Department of Veteran's Affairs guaranteed the
loan. (Id. at 22-23). When a home purchaser obtains
a home-mortgage loan, the purchaser ordinarily signs a
promissory note, agreeing to repay the loan amount to the
lender, and a deed of trust, giving the lender certain rights
in the home, including to sell the home if the purchaser
fails to make loan payments.
Greenways' Promissory Note required them to make $732.53
payments on the first day of each month for 30 years.
(Id. at 7). The Note stated that the Greenways would
default if they did not pay “the full amount of each
monthly payment” when due. (Id. at 8). A
default meant that the Lenders could send the Greenways
notice that they had to make the missed payment within 30
days, or their entire loan balance would become immediately
Greenways' Deed of Trust required them to make timely
payments under the Note. (Id. at 13). If the
Greenways missed payments and did not repay them, even after
receiving notice and time to do so, the Deed permitted the
Lenders to demand “immediate payment” of the full
loan balance. (Id. at 18-20). The Lenders had the
right to sell the Greenways' home if they failed to pay
the loan balance, after providing an opportunity to reinstate
the loan and giving proper notice of the sale.
(Id.). The Deed named the Mortgage Electronic
Registration Systems, known as MERS, as the beneficiary.
(Id. at 12).
Greenways failed to make their loan payments for July and
August 2017. (Id. at 4). In September 2017, The
Money Source, the loan servicer, sent the Greenways written
notice that they were in default and owed $3, 149.44, giving
them 35 days to cure the default. (Id. at 4, 26).
notice reminded the Greenways that failing to cure the
default by the deadline could result in the full loan balance
becoming due and the sale of their home. (Id. at
Greenways did not pay any amount to cure the default.
(Id. at 4). In December 2017, MERS assigned the Deed
to The Money Source. (Id. at 29). The assignment was
recorded in the Official Public Records of Brazos County,
Texas. (Id.). The Money Source then appointed
substitute trustees to sell the Greenways' home.
(Id. at 32, 34). In March 2018, the substitute
trustees sent the Greenways written notice that a nonjudicial
foreclosure sale was scheduled for May 1, 2018. (Id.
foreclosure sale, The Money Source purchased the
Greenways' property for $162, 684.39. (Id.
39-40). The substitute trustees issued a substitute-trustee
deed to The Money Source on May 7. (Id.). The
substitute-trustee deed was recorded in the Brazos County
Official Public Records. (Id. at 45).
loan guarantor, the Department of Veterans Affairs was the
successor in interest to The Money Source. (Docket Entry No.
3-2 at 15); see 38 C.F.R. §§
36.4323-36.4324. In June 2018, the Department sought a
judgment of possession from the Brazos County Justice of the
Peace. (Id.). In July 2018, the Justice of the Peace
entered a judgment of possession for the Department after the
Greenways failed to appear. (Id. at 8). The
Greenways appealed the judgment to the County Court of Brazos
County. (Id. at 9). In August, the Brazos County
Court entered a final judgment of possession for the
Department, with “such writs and processes as may be
necessary in the enforcement and collection of this
judgment.” (Docket Entry No. 3-5).
August, after the final judgment of possession was issued,
the Greenways sued in Brazos County District Court, seeking a
temporary restraining order and a preliminary injunction
against the foreclosure sale (which had already happened),
transfer of ownership, and eviction. (Docket Entry No. 1-1 at
12-43). They also sought a declaratory judgment that the
Lenders had lacked authority to foreclose.
Department removed, opposed the requested relief, and moved
to dismiss. (Docket Entry Nos. 1, 3). The court denied the
request for a temporary restraining order or preliminary
injunction, finding an insufficient basis for a likelihood of
success on the merits and the court granted the
Department's motion to dismiss. (Docket Entry No. 5 at
Lenders then moved for judgment on the pleadings, and the
Greenways moved for leave to file a supplemental complaint
and to compel the Lenders to produce certain documents.
(Docket Entry Nos. 15-17). The court converted the
Lenders' motion into one for summary judgment, directed
the Lenders to submit certain documents with the motion for
summary judgment, and denied the Greenways' motion to
compel. (Docket Entry No. 19). The court gave the Lenders
until March 1, 2019, to file a supplemental brief and the
additional documents. (Id. at 3). The Greenways were
to respond to the summary-judgment motion no later than March
Lenders moved for summary judgment, arguing that the
undisputed record evidence shows that the Greenways
defaulted; received proper notice of the default and received
proper notice of the foreclosure sale; did not cure; the
Greenways lacked standing to challenge MERS's assignment
to The Money Source; The Money Source had standing to
foreclose; the Greenways had no property interest to support
their quiet-title claim; the Note and Deed were neither
unconscionable nor a breach of the Note or Deed; no
misrepresentations were made to the Greenways as to the loan,
default, assignment, or foreclosure sale; and the Greenways
were not owed fiduciary duties. (Docket Entry No. 20 at
10-20). The Lenders submitted a number of documents,
including the Note; Deed; default notice; assignment;
substitute-trustee appointment; foreclosure-sale notice;
substitute-trustee deed; affidavit confirming notice of
foreclosure sale; and state-court documents. (Docket Entry
Nos. 3-1-3-5; 21). The Greenways have not responded or
requested more time to do so.
Lenders' arguments and submissions are considered in
The Legal Standard
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)
(quotation 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 Savant v. APM Terminals, 776 F.3d
285, 288 (5th Cir. 2014)). The moving party “always
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.” Celotex Corp. v. Catrett, 477 U.S. 317,
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.Appx. 287, 288 (5th Cir. 2018) (quoting
Nola Spice Designs, LLC 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). A fact is
material if “its resolution could affect the outcome of
the action.” Aly v. City of Lake Jackson, 605
Fed.Appx. 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 summary-judgment motion] must be
denied, regardless of the nonmovant's response.”
Pioneer Expl., LLC v. Steadfast Ins. Co., 767 F.3d
503, 511 (5th Cir. 2014) (quoting Kee v. City of Rowlett,
Tex., 247 F.3d 206, 210 (5th Cir. 2001)).
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.” 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.Appx. 313, 317 (5th Cir.
2016) (quoting Boudreaux v. Swift Transp. Co., 402
F.3d 536, 540 (5th Cir. 2005)). In ...