United States District Court, S.D. Texas, Houston Division
MEMORANDUM OPINION A ORDER
LAKE, UNITED STATES DISTRICT JUDGE.
Catheryn Longino ("Plaintiff") sued defendants
Select Portfolio Servicing, Inc. ("SPS"); U.S.
Bank, N.A., As Trustee for Securitized Trust Home Equity
Asset Trust 2006-2 Trust (the "Trustee"); and
Mortgage Electronic Registration Systems, Inc.
("MERS") (collectively, "Defendants")
alleging that Defendants are improperly attempting to
foreclose on her real property located at 3373 Ozark Street,
Houston, Texas 77021 (the "Property")
. Pending before the court is
Defendants' Motion for Summary Judgment on All Claims and
Counterclaims and Brief in Support ("Defendants'
MSJ") (Docket Entry No. 22). For the reasons explained
below, Defendants' MSJ will be granted.
Factual and Procedural Background
September 7, 2005, Plaintiff executed a $214, 400.00 Texas
Home Equity Note (the "Note") in favor of her
original lender, Home Loan Corporation d/b/a Expanded
Mortgage Credit (the "Original Lender")
. The Note was secured by the Security
Instrument,  which established a first lien on the
Property.  During the closing Plaintiff signed a
Texas Home Equity Affidavit and Agreement (the
"Affidavit") . Plaintiff also signed a Texas Home
Equity Fair Market Value Acknowledgment ("FMV
Acknowledgment"), in which she acknowledged that the
value of the Property upon closing was $268,
000.00. The Original Lender ordered an
appraisal prior to closing that confirmed that the fair
market value of the Property was $268, 000.00. On February
22, 2010, the Loan was assigned to the Trustee by MERS as
nominee of the Original Lender. On that same date
Plaintiff and the Trustee executed a Home Affordable
Modification Agreement ("Loan Modification
Agreement"). SPS is the current Mortgage Servicer
and Attorney-in-Fact for the Trustee .
Trustee and SPS allege that Plaintiff defaulted on the Loan
and that all payments since July 1, 2012, are past due.
sent a Notice of Default to Plaintiff via certified mail on
April 3, 2014 .A Notice of Acceleration was mailed to
Plaintiff via certified mail on February 5, 2018. The amount due
under the Loan as of March 2, 2019, was $369, 486.11, and per
diem interest continues to accrue in the amount of $16.66 per
day from March 2, 2019, until the amount due on the Loan is
March 9, 2018, the Trustee filed suit in the 133rd District
Court of Harris County, Texas, to initiate the foreclosure
process. The Trustee's lawsuit was dismissed in
accordance with the Texas Rules of Civil Procedure when
Plaintiff filed this action in the 334th District Court of
Harris County, Texas. On April 10, 2018, the action was
transferred to the 133rd District Court.Defendants timely
removed the action on May 3, 2018. Defendants filed their MSJ
on February 22, 2019, arguing that the court should grant
summary judgment for Defendants because no genuine issues of
material fact remain with respect to the claims in
Plaintiff's Amended Complaint. Plaintiff filed a response
contesting Defendants' MSJ on March 29, 2019, and
attached a number of documents as evidence. Defendants filed a
reply and a Motion to Strike Plaintiff's Summary Judgment
Evidence on April 4, 2019.
Standard of Review
judgment is appropriate if the movant establishes that there
is no genuine dispute about any material fact and the movant
is entitled to judgment as a matter of law. Fed.R.Civ.P.
56(a). Disputes about material facts are genuine "if the
evidence is such that a reasonable jury could return a
verdict for the nonmoving party." Anderson v.
Liberty Lobby, Inc., 106 S.Ct. 2505, 2510 (1986) . The
moving party is entitled to judgment as a matter of law if
"the nonmoving party has failed to make a sufficient
showing on an essential element of her case with respect to
which she has the burden of proof." Celotex Corp. v.
Catrett, 106 S.Ct. 2548, 2552 (1986).
moving for summary judgment "must 'demonstrate the
absence of a genuine issue of material fact,' but need
not negate the elements of the nonmovant's
case." Little v. Liquid Air Corp., 37 F.3d
1069, 1075 (5th Cir. 1994) (en bane) (per curiam) (quoting
Celotex, 106 S.Ct. at 2553). "If the moving
party fails to meet this initial burden, the motion must be
denied, regardless of the nonmovant's response."
Id. If the moving party meets this burden, Rule
56(c) requires the nonmovant to go beyond the pleadings and
show by affidavits, depositions, answers to interrogatories,
admissions on file, or other admissible evidence that
specific facts exist over which there is a genuine issue for
trial. Id. The nonmovant "must do more than
simply show that there is some metaphysical doubt as to the
material facts." Matsushita Electric Industrial Co.,
Ltd. v. Zenith Radio Corp., 106 S.Ct. 1348, 1356 (1986).
reviewing the evidence "the court must draw all
reasonable inferences in favor of the nonmoving party, and it
may not make credibility determinations or weigh the
evidence." Reeves v. Sanderson Plumbing
Products, Inc., 120 S.Ct. 2097, 2110 (2000). The court
resolves factual controversies in favor of the nonmovant,
"but only when there is an actual controversy, that is,
when both parties have submitted evidence of contradictory
facts." Little, 37 F.3d at 1075.
pleads claims against (1) the Trustee and SPS for breach of
contract and (2) the Trustee, SPS, and MERS for quiet
Plaintiff also seeks declarations (1) that SPS and the
Trustee failed to cure their violation of Article 16, §
50(a) (6) (B) of the Texas Constitution and (2) that SPS, the
Trustee, and MERS lack standing to foreclose on the
Breach of Contract
Texas Constitution allows homeowners to voluntarily encumber
their homesteads with a lien in return for an extension of
credit. See Tex. Const. art. XVI § 50(a) (6).
The Texas Constitution imposes various requirements on such
home equity loans. See id. § 50 (a) (6) (A)-
(Q). For example, the amount of a home equity loan may not
exceed eighty percent of the fair market value of the
homestead to which it is attached (the "80% Rule").
See id. § 50 (a) (6) (B).
claims that the Trustee and SPS breached the terms of the
Loan by failing to cure a violation of the Texas
Constitution. She alleges that the Loan violates the 80%
Rule because the amount financed through the Loan was more
than 80 % of the value of the Property at the time the Loan
was executed.At closing, Plaintiff signed the FMV
Acknowledgment, in which she acknowledged that the fair
market value of the Property upon closing was $268, 000.00.
An appraisal of the Property stated that the value of the
Property was $268, 000.00.  The Loan was for $214,
400.00, which is exactly 80% of $268, 000.00.
may conclusively rely on a written acknowledgment by the
property owner as to the fair market value of the homestead
when it matches the value estimate in an appraisal prepared
in accordance with state requirements for an extension of
credit." Gonzalez v. U.S. Bank National Association
as Trustee for RASC 2004KS12, By and Through its
servicer-in-fact GMAC Mortgage, L.L.C., 548 Fed.Appx.
118, 119 (5th Cir. 2013) (citing Tex. Const. art. XVI §
SO(h)). Both the appraisal and the FMV Acknowledgment signed
by Plaintiff recognize that the value of the Property upon
closing was $268, 000.00. Because the Loan was not for more
than 80% of the fair market value of the Property, it
complied with Article 16 § 50 (a) (6) (B) of the Texas
Constitution. Plaintiff has failed to present any evidence to
corroborate her assertion that the Loan violates the 80%
Rule. No. genuine issues of material fact therefore remain
with respect to Plaintiff's breach of contract claim
against SPS and the Trustee. SPS and the Trustee are entitled
to summary judgment on Plaintiff's breach of contract
claim and Plaintiff's corresponding claim for a
declaration that SPS and the Trustee violated the Texas
to remove cloud or to quiet title exists "'to enable
the holder of the feeblest equity to remove from his way to
legal title any unlawful hindrance having the appearance of
better right.'" Essex Crane Rental Corp. v.
Carter, 371 S.W.3d 366, 388 (Tex. App. -- Houston [1st
Dist.] 2012, pet. denied) (quoting Bell v. Ott, 606
S.W.2d 942, 952 (Tex. Civ. App. -- Waco 1980, writ ref'd
n.r.e.)) . The plaintiff has the burden of proof to establish
his superior equity and right to relief. Id. To do
so "the plaintiff must show (1) an interest in a
specific property, (2) title to the property is affected by a
claim by the defendant, and (3) the claim, although facially
valid, is invalid or unenforceable." Vernon v.
Perrien, 390 S.W.3d 47, 61-62 (Tex. App. -- El Paso
2012, no pet.) (citation omitted). The plaintiff must recover
on the strength of his own title, not on the weakness of the
defendant's title. Hurd v. BAC Home Loans Servicing,
LP, 880 F.Supp.2d 747, 767 (N.D. Tex. 2012); Ventura
v. Wells Fargo Bank, N.A., Civil Action No. 4:17-075-A,
2017 WL 1194370, at *2 (N.D. Tex. March 30, 2017; Martin
v. Amerman, 133 S.W.3d 262, 265 (Tex. 2004) (citation
asserts a quiet title claim against SPS, the Trustee, and
MERS. Plaintiff alleges that "a controversy exists
whether [the Trustee], SPS, and MERS are the current valid
holders or owners (or agents of the current holder or owner)
of the underlying note or the current valid assignees of the
[Security Instrument] (or agents of the current valid
assignee of the [Security Instrument]) with standing to
foreclose under Texas law." Plaintiff argues that
the Trustee and SPS lack standing to foreclose on the
Property and that the Trustee's lien on the property is
mortgagee can be the original holder of a security interest,
a mortgagee can also be the most recent assignee of record of
a security interest. Tex. Prop. Code § 51.0001(4). The
Trustee is the most recent assignee of record of the Security
Instrument and holder of the Note, and is therefore the
current mortgagee on the Loan. As the mortgagee, the
Trustee has all the rights in the Property that the Original