United States District Court, S.D. Texas, Houston Division
ORDER ENTERING DEFAULT JUDGMENT AND AWARDING
ROSENTHAL CHIEF UNITED STATES DISTRICT JUDGE.
Fargo Bank, N.A. sued Rhonda J. Pantalion, alleging that
Pantalion defaulted on her home-mortgage loan and that it is
entitled to foreclose. Pantalion was properly served but did
not appear, answer, assert a defense, or give any indication
that she intended to do so. Wells Fargo has moved for default
judgment and attorney's fees, arguing that the complaint
states a plausible claim and that both Texas law and the
home-mortgage loan authorize attorney's fees for a
foreclosure action. (Docket Entry Nos. 8, 17-18). The court
enters default judgment and awards Wells Fargo attorney's
fees against the property after a foreclosure sale. Final
judgment is separately entered. The reasons are explained in
2004, Pantalion obtained a $104, 250 home-mortgage loan from
Olympus Mortgage Company to purchase a home in Katy, Texas.
(Docket Entry No. 1 at 4). Pantalion signed a Promissory
Note, agreeing to repay the loan amount in monthly payments
of $768.59, and a Security Agreement that gave Olympus a
security interest in the home. (Id.). The Note and
Security Agreement were recorded in the Harris County Public
Note stated that if Pantalion “did not pay the full
amount of each monthly payment on the date it is due, [she]
will be in default.” (Id. at 4). If Pantalion
defaulted, Wells Fargo could inform Pantalion in writing that
if she did not pay the amount due within 30 days, her loan
would be accelerated, requiring her to immediately pay the
full loan balance. (Id. at 4, 20). The Note and
Security Agreement required all notices to be in writing and
sent by first class mail. (Id. at 4, 17). To
foreclose on Pantalion's home, Wells Fargo requires a
court order. (Id. at 20).
negotiated and endorsed the Note to Ameriquest Mortgage
Company, without recourse. (Docket Entry No. 18-1 at 35);
see First Nat'l Acceptance Co. v. Dixon, 154
S.W.3d 218, 222 (Tex. App.-Beaumont 2004, no pet.)
(“Negotiation is transfer of possession of an
instrument by a person other than the issuer to a person who
thereby becomes its holder.”). In August 2004,
Ameriquest assigned the Note to “WELLS FARGO BANK
NATIONAL ASSOCIATION AS TRUSTEE.” (Docket Entry No.
18-1 at 37-38). The assignment was recorded in the Harris
County Public Records. (Id.). Then, in February
2008, Wells Fargo Bank National Association as Trustee
assigned the Note to “WELLS FARGO BANK, N.A. AS TRUSTEE
UNDER POOLING AND SERVICING AGREEMENT DATED AS OF OCTOBER 1,
2004 ASSET-BACKED PASS-THROUGH CERTIFICAES SERIES
2004-MHQ1.” (Id. at 40- 42). This assignment,
too, was recorded in the Harris County Public Records.
did not pay her mortgage on May 1, 2018, as required by the
Note, and has not made a payment since. (Id. at 4).
In July 2018, Ocwen Loan Servicing, LLC, the loan servicer
for Wells Fargo, sent Pantalion a Notice of Default by
certified mail, informing her that she was in default and
owed $2, 954.97. (Docket Entry No. 1-1 at 30-31). The Notice
stated that Pantalion had until August 12, 2018, to cure the
default, and that a failure to cure would lead to the
loan's acceleration and, if she could not pay the
loan's full balance, a foreclosure sale. (Id.).
The Notice stated that after acceleration, but before
foreclosure, Pantalion could attempt to reinstate the loan,
“depending on the terms of the note and mortgage, any
payments received and/or any relevant prior court
order.” (Id. at 31).
did not cure the default. In September 2018, a law firm sent
Pantalion a Notice of Acceleration by certified mail, stating
that Wells Fargo had accelerated her loan and that she owed
$93, 046.57. (Id. at 35). The Notice stated that
Pantalion had 30 days to “dispute the validity of the
debt.” (Id.). Pantalion did not do so, and she
has not attempted to pay any part of the loan balance.
November 2018, Wells Fargo sued Pantalion seeking a
declaration that she was in default and permission to
foreclose under the Security Agreement and Texas Property
Code § 51.002. (Docket Entry No. 1 at 5). Wells Fargo
also requested attorney's fees. (Id.). Attached
to the complaint were the Note, the Security Agreement,
Notice of Default, and Notice of Acceleration. (Docket Entry
Johnson, a process server, served Rhonda Pantalion in person
with the summons and complaint, and informed her of those
documents' contents, on December 21, 2018, at 2:38 p.m.
(Docket Entry No. 6 at 3). The summons stated that if
Pantalion failed to respond within 21 days of being served,
“judgment by default will be entered” for
“the relief demanded in the complaint.”
(Id. at 1). Pantalion did not appear, answer, file a
Rule 12(b) motion, or request more time to do so. Wells Fargo
moved for entry of default and default judgment. (Docket
Entry No. 8). The court entered default but declined to enter
default judgment, ordering Wells Fargo to “submit the
proof of service of the default-judgment motion, the
loan's assignment to the mortgage-back[ed] securities
trust, and evidence of reasonable attorney's fees.”
(Docket Entry No. 9 at 6).
Fargo has supplemented the record with submitting an
affidavit from its counsel; proof that the default judgment
motion was sent to Pantalion by certified mail; the loan
assignments; and evidence of the reasonable attorney's
fees. (Docket Entry No. 18). Wells Fargo argues that
Pantalion's failure to appear, answer, or move under Rule
12(b) supports a default judgment, and that the complaint
states a plausible claim. (Id. at 1-2; Docket Entry
No. 8 at 3-6). Wells Fargo has also moved for $7, 087.66 in
attorney's fees, submitting an affidavit and invoices in
support. (Docket Entry No. 17). Wells Fargo's motions are
The Legal Standard
court has entered default against Pantalion. (Docket Entry
No. 9). After default is entered, a plaintiff may seek
default judgment under Federal Rule of Civil Procedure 55(b).
See N.Y. Life Ins. Co. v. Brown, 84 F.3d 137, 141
(5th Cir. 1996). The plaintiff must submit evidence
supporting that the defendant has been properly served with
the summons, complaint, and the default judgment motion.
James Avery Craftsman, Inc. v. Sam Moon Trading Enters.,
Ltd., No. 16-CV-463, 2018 WL 4688778, at * 3 (W.D. Tex.
July 5, 2018); Hazim v. Schiel & Denver Book
Grp., No. H-12-1286, 2013 WL 2152109, at *1 (S.D. Tex.
May 16, 2013); S.D. Tex. Local R. 5.5 (a default judgment
motion “must be served on the defendant-respondent by
certified mail (return receipt requested)”). Absent
proper service, a district court lacks personal jurisdiction,
and any default judgment would be void. Recreational
Props., Inc. v. Sw. Mortg. Serv. Corp., 804 F.2d 311,
314 (5th Cir. 1986).
“party is not entitled to a default judgment as a
matter of right.” Lewis v. Lynn, 236 F.3d 766,
767 (5th Cir. 2001) (per curiam) (quoting Ganther v.
Ingle, 75 F.3d 207, 212 (5th Cir. 1996)).
“Defaults are ‘generally disfavored.'”
Koerner v. CMR Constr. & Roofing, L.L.C., 910
F.3d 221, 225 (5th Cir. 2018) (quoting Mason &
Hanger-Silas Mason Co. v. Metal Trades Council ofAmarillo & Vicinity, AFL-CIO, 726 F.2d 166, 168
(5th Cir. 1984)). The Fifth Circuit favors “resolving
cases on their merits.” Sindhi v. Raina, 905
F.3d 327, 331 (5th Cir. 2018) (quotation omitted).
“This policy, however is ‘counterbalanced by
considerations of social goals, justice and expediency, a
weighing process that lies largely within the domain of the
trial judge's discretion.'” Rogers v.
Hartford Life & Accident Ins. Co., 167 F.3d 933, 936
(5th Cir. 1999) (alterations omitted) (quoting Pelican
Prod. Corp. v. Marino, 893 F.2d 1143, 1146 (10th Cir.
1990)). The court may enter default judgment where “the
adversary process has been ...