United States District Court, S.D. Texas, Houston Division
GRAHAM W. GILLIAM and DIANE W. GILLIAM, Plaintiffs,
JPMORGAN CHASE BANK, N.A., Defendant.
MEMORANDUM OPINION AND ORDER
LAKE UNITED STATES DISTRICT JUDGE.
Graham W. Gilliam ("Mr. Gilliam") and Diane W.
Gilliam ("Ms. Gilliam") (collectively,
"Plaintiffs") filed suit against JPMorgan Chase
Bank, N.A. ("JPMC") alleging that JPMC is
improperly attempting to foreclose on their real property
located at 5530 Tilbury Drive, Houston, Texas 77056 (the
"Property").Plaintiffs allege a number of claims
against JPMC, including quiet title, violations of the Texas
Debt Collection Act ("TDCA"), a violation of the
Texas Property Code, and violations of the Real Estate
Settlement Procedures Act ("RESPA"), among
others. Pending before the court are Defendant
JPMorgan Chase Bank, N.A.'s Motion to Strike or, in the
Alternative, Motion to Dismiss Plaintiffs' Second Amended
Complaint for Failure to State a Claim ("JPMC's
Motion to Strike/Motion to Dismiss") (Docket Entry No.
22); Defendant JPMorgan Chase Bank, N.A.'s Motion for
Summary Judgment ("JPMC's MSJ") (Docket Entry
No. 30); JPMorgan Chase Bank, N.A.'s Motion to Strike or,
Alternatively, Objections to the Affidavit of Diane Werlein
Gilliam ("JPMC's Motion to
Strike/Objections to Gilliam Affidavit") (Docket Entry
No. 35); and Plaintiffs' Motion to Strike Objections and
Answers of Defendant JP Morgan Chase Bank, N.A.
("Plaintiffs' Motion to Strike") (Docket Entry
Factual and Procedural Background
April 23, 2003, Ms. Gilliam executed a $499, 875.00
Adjustable Rate Note (the "Note") with Washington
Mutual Bank, FA (the "Original Lender") to purchase
the Property. The Note was secured by a Deed of
Trust, which granted the Original Lender a lien on the
Property with a power of sale. Upon closing Ms. Gilliam
signed an Escrow Account Notification and Agreement (the
"Escrow Waiver"), in which she agreed that the Loan
would be established as a non-escrow loan and that she would
pay all property taxes directly to the Harris County taxing
authorities and all insurance payments directly to her
obtained servicing rights to the Loan from the Federal
Deposit Insurance Corporation ("FDIC") on September
25, 2008. The Deed of Trust was assigned to JPMC
by the FDIC on the Original Lender's behalf on June 24,
2014. Deutsche Bank National Trust Co. as
Trustee for WAMU 2007-FLEX1 Trust (the "Trustee")
is the current owner of the Loan. JPMC is the servicer
tasked with enforcing the Loan on the Trustee's
Gilliam contacted JPMC in early January of 2014 to inquire
about establishing an escrow account for the Loan and having
JPMC begin paying property taxes on Plaintiffs' behalf,
starting with the 2013 tax bill due later that
month. JPMC sent a letter to Ms. Gilliam on
January 14, 2014, informing her that JPMC created the
requested escrow account. JPMC timely paid
Plaintiffs' 2013 property taxes. On February 6,
2014, JPMC sent Ms. Gilliam an escrow analysis statement
outlining the escrow shortage caused by JPMC's payment of
Plaintiffs' 2013 property taxes . JPMC and Ms.
Gilliam agreed that the monthly payment on the Loan would be
adjusted for 60 months to account for the
shortage. A monthly statement was sent to Ms.
Gilliam confirming that the new amount due each month
beginning March 1, 2014, would be $6, 433.33 ($2, 109.80 in
principal and interest, and escrow of $4, 323.53 to (1)
collect the escrow shortage caused by JPMC s payment of
Plaintiffs' 2013 property taxes and (2) to set aside the
amount due for Plaintiffs' 2014 property taxes)
. JPMC paid Plaintiffs' 2014 and
2015 property taxes in full.
alleges that Plaintiffs defaulted on the Loan in July of
2016. In November of 2016 Plaintiffs
submitted a personal check and a business check to JPMC in
the amounts of $29, 171.12 and $7, 292.78, both of which JPMC
rejected because they were insufficient to bring the Loan
current and were not certified funds. JPMC paid the
Property's 2016 property tax bill of $40, 355.86 on
Plaintiffs' behalf in December of 2016. In March
of 2017 Harris County tax authorities returned $31, 588.99 to
JPMC because Plaintiffs had already paid a portion of their
2016 property taxes. In July of 2017 Ms. Gilliam sent
another personal check to JPMC. JPMC again rejected
Ms. Gilliam's attempted payment because it was not enough
to bring the Loan current and was not certified funds. In
December of 2017 JPMC paid $27, 625.00 in 2017 property taxes
on Plaintiffs' behalf. In February of 2018
Harris County refunded $23, 470.00 to JPMC because Plaintiffs
had already paid a portion of their 2017 property taxes
directly to taxing authorities.
9, 2018, Plaintiffs sent JPMC a qualified written request
notifying JPMC of alleged billing errors and attached another
personal check for $51, 092.41. JPMC received
Plaintiffs' Qualified Written Request on May 14,
2018. JPMC sent letters to Ms. Gilliam on
May 15, 2018, and May 17, 2018, acknowledging its receipt of
Plaintiffs' Qualified Written Request. On June
1, 2018, JPMC returned the check attached to Plaintiffs'
Qualified Written Request because it was insufficient to
bring the Loan current and was not certified
funds. On June 8, 2018, JPMC sent a letter
to Plaintiffs notifying them that additional time was needed
to respond to Plaintiffs' Qualified Written
Request. JPMC responded to Plaintiffs'
Qualified Written Request on June 11, 2018, with a
determination that there was no error. JPMC informed
Plaintiffs that while an escrow analysis performed in May of
2018 showed an overage of $76, 246.49, the overage only
existed in the event that Plaintiffs were current for the
July 2018 payment.Because Plaintiffs defaulted on the
Loan in July of 2016, JPMC informed them that JPMC would not
release any escrow surplus until all past due payments were
collected. The Loan currently remains due for
the July 1, 2016, payment.
August 6, 2018, Plaintiffs filed their original
complaint.Plaintiffs most recently amended
their complaint on November 21, 2018. JPMC paid
Plaintiffs' 2018 property taxes in full on December 19,
2018. JPMC filed its Motion to
Strike/Motion to Dismiss on December 4, 2018. JPMC
filed its MSJ on March 14, 2019. Plaintiffs responded
to JPMC's MSJ on April 4, 2019. JPMC replied to
Plaintiff's Response on April 11, 2019.
Plaintiffs filed their Motion to Strike on April 22,
2019. JPMC responded to Plaintiffs'
Motion to Strike on April 29, 2019. Plaintiffs
replied on May 4, 2019.
JPMC's Motion for Summary Judgment
Summary Judgment Standard
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 nonroving 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 nonroving 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.
assert claims against JPMC for (1) quiet title, (2)
violations of the TDCA, (3) a violation of Texas Property
Code § 5.065, (4) unjust enrichment, (5) conversion, (6)
violations of RESPA, (7) fraud and deceit or negligence, and
(8) breach of contract. Plaintiffs also seek declarations
from the court that their title is superior to that of JPMC
and that JPMC's pre-foreclosure activities are
wrongful. For the reasons explained below,
JPMC is entitled to summary judgment on each of the claims in
Quiet Title (Second Cause of Action)
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)
allege that JPMC's claim to the Property is invalid and
unenforceable. Plaintiffs do not challenge the validity of
the Deed of Trust, only JPMC's right to enforce it.
Plaintiffs contest the validity of the FDIC's assignment
of the Original Lender's interest in the Deed of Trust to
JPMC." [U]nder Texas law, facially
valid assignments cannot be challenged for want of authority
except by the defrauded assignor." Reinagel v.
Deutsche Bank National Trust Co., 735 F.3d 220, 228 (5th
Cir. 2013). Plaintiffs therefore lack standing to challenge
the assignment to JPMC, or any other assignment of the Deed
of Trust, because they are the borrowers and not the
the documents attached to JPMC's MSJ show that the Deed
of Trust created a valid lien (of which the Trustee is the
owner and JPMC is the servicer) that remains on the Property.
JPMC claims no interest in the Loan other than the right to
enforce it on the Trustee's behalf. Plaintiffs present no
evidence demonstrating that the Loan is invalid. JPMC is
therefore entitled to summary judgment on Plaintiffs'
quiet title claim.
Violations of the TDCA (Third Cause of
Complaint alleges that JPMC violated several provisions of
the TDCA by: (1) "[t]hreatening to take action
prohibited by law, specifically seeking to sell the Property
at a foreclosure sale" in violation of § 392. 301
(a) (8) of the TDCA; (2) "[u]sing a fraudulent,
deceptive, or misleading representation that misrepresent(s)
the character, extent, or amount of a consumer debt" in
violation of § 3 92. 3 04(a) (8) of the TDCA; (3)"
[m] is representing the status and nature of the services
rendered by the debt collector" in violation of §
392.304(a) (14) of the TDCA; and (4)" [u] sing other
false representations or deceptive means to collect a
debt" in violation of § 392. 304 (a) (19) of the
TDCA. For the reasons explained below,
Plaintiffs have failed to present sufficient evidence to
raise a genuine issue of material fact with respect to their
TDCA claims. JPMC will therefore be granted summary judgment
on Plaintiffs' cause of action for violations of the
Violation of § 392.301(a) (8)
392.301(a) (8) prohibits a debt collector from
"threatening to take an action prohibited by law."
Tex. Fin. Code § 392.301(a)(8). Section 392.301 (a) does
not prevent a debt collector from "exercising or
threatening to exercise a statutory or contractual right of
seizure, repossession, or sale that does not require court
proceedings." Id. § 392 .301 (b) (3) . As
long as a debt collector has a contractual right to foreclose
and the loan is in default, the debt collector does not
violate § 392.301(a) by initiating foreclosure
proceedings regardless of whether pre-foreclosure notice
requirements were met. Rucker v. Bank of America,
N.A., 806 F.3d 828, 831 (5th Cir. 2015).
allege that JPMC's actions in proceeding with foreclosure
violate the TDCA because JPMC lacks authority to
foreclose. JPMC has standing to foreclose
because JPMC, as the last assignee of record of the Deed of
Trust,  is a mortgagee on the Loan.
See Tex. Prop. Code § 51.0001(4). The Deed of
Trust has a power of sale provision allowing nonjudicial
foreclosure. JPMC has presented uncontradicted
evidence that Plaintiffs are in default. JPMC's actions
are therefore not in violation of § 392.301(a) (8) of
the TDCA because JPMC has a contractual right to institute
nonjudicial foreclosure proceedings under the Deed of Trust
and Plaintiffs are in default.
Violation of § 392.304(a)(8)
392.304(a)(8) of the TDCA prohibits a debt collector from
"misrepresenting the character, extent, or amount of a
consumer debt . ..." Tex. Fin. Code § 392. 304(a)
(8) . Plaintiffs allege that JPMC "made significant
misrepresentations about the status of the loan, the owner of
the loan, and its alleged services . . . .''
 JPMC is the last assignee of record
and the mortgagee on the Loan. JPMC has the right to enforce
the Deed of Trust. There is no evidence that JPMC made any of
the misrepresentations alleged by Plaintiffs. Plaintiffs have
therefore failed to raise a genuine issue of material fact
with respect to whether JPMC violated § 392.304(a) (8).
Violation of § 392. 304 (a) (14)
392.304(a) (14) of the TDCA prohibits a debt collector from
"representing falsely the status or nature of the
services rendered by the debt collector or the debt
collector's business." Tex. Fin. Code §
392.304(a) (14). There is no evidence that JPMC
misrepresented the services it performs for the Loan.
Plaintiffs have therefore failed to raise a genuine dispute
of material fact regarding JPMC's alleged violation of
§ 392. 304(a)(14).
Violation of § 392. 304 (a) (19)
392.304 (a) (19) is a catch-all provision that prohibits a
debt collector from using any false representation or
deceptive means to collect a debt not specifically
articulated elsewhere in the statute. Tex. Fin. Code §
392. 304 (a) (19); Williams v. Wells Fargo Bank,
N.A., 560 Fed.Appx. 233, 240-41 (5th Cir. 2014).
"To violate the TDCA using a misrepresentation, the debt
collector must have made an affirmative statement
that was false or misleading." Kruse v. Bank of New
York Mellon, 936 F.Supp.2d 790, 792 (N.D. Tex. 2013)
(emphasis in the original) (internal quotation marks and
citations omitted); see also Williams, 560 Fed.Appx.
allege that JPMC made misrepresentations to Plaintiffs
falling under § 392.304's catch-all provision.
Plaintiffs have failed to present evidence identifying a
specific, affirmative statement by JPMC that was false or
misleading. JPMC is a mortgagee under Texas law and has the
authority to foreclose under the Deed of Trust. Plaintiffs
present no evidence that JPMC is not the mortgagee. There is
no evidence that the amount due on the Loan alleged by JPMC
is incorrect. Plaintiffs have failed to raise a genuine
dispute of material fact regarding JPMC s alleged violation
of § 392. 304 (a) (19).
Violation of Texas Property Code § 5.065 (Fourth
Cause of Action)
5.065 is part of chapter 5, subchapter D of the Texas
Property Code, which governs "executory contracts for
conveyance." See Tex. Prop. Code §§
5.061-85. "Subchapter D was enacted to protect
purchasers who execute a contract for deed." Weaks
v. White, 479 S.W.3d 432, 439 (Tex. App. --
Tyler 2015, pet. Denied). "A contract for deed, unlike a
typical secured transaction involving a deed of trust, is a
financing arrangement that allows the seller to maintain
title to the property until the buyer has paid for the
property in full." Morton v. Nguyen, 412 S.W.3d
506, 509-10 (Tex. 2013) .
allege that JPMC violated § 5.065 of the Texas Property
Code by failing to send Plaintiffs notices of default and
intent to accelerate required by§
51.002(d). Section 5.065 of the Texas Property
Code does not apply to the Loan. When the Loan was executed,
title to the Property was conveyed to Ms. Gilliam by a
general warranty deed. Because the Original Lender did
not retain title to the Property until after Plaintiffs made
all required payments on the Loan, there was no executory
contract. Accordingly, JPMC is entitled to summary judgment
on Plaintiffs' claim that JPMC violated Texas Property
Code § 5.065.
Unjust Enrichment (Fifth Cause of Action)
courts recognize an independent cause of action for unjust
enrichment. See Pepi Corp. v. Galliford, 254 S.W.3d
457, 460 (Tex. App. -- Houston [1st Dist.] 2007, pet. denied)
(citing HECI Exploration Co. v. Neel, 982 S.W.2d
881, 891 (Tex. 1998)). "Unjust enrichment occurs when a
person has wrongfully secured a benefit or has passively
received one which it would be unconscionable to
retain." Eun Bok Lee v. Ho Chang Lee, 411
S.W.3d 95, 111 (Tex. App. -- Houston [1st Dist.] 2013, no
pet.). "When a person has been unjustly enriched by the
receipt of benefits in a manner not governed by contract, the
law implies a contractual obligation upon that person to
restore the benefits to the plaintiff." Id. A
cause of action for "unjust enrichment is unavailable
when a valid, express contract governing the subject matter
of the dispute exists." See id. at 112 (citing
Fortune Production Co. v. Conoco, Inc., 52 S.W.3d
671, 683-84 (Tex. 2000)).
base their unjust enrichment claim on JPMC's alleged lack
of authority to collect payments on the Loan.Plaintiffs
do not contest the validity of the Note or the Deed of Trust.
A cause of action for unjust enrichment is not available to
Plaintiffs because valid contracts (i.e., the Note and the
Deed of Trust) govern their rights and obligations under the
Loan. Plaintiffs present no evidence that JPMC lacks
authority to collect payments on the Loan. JPMC is therefore
entitled to summary judgment on Plaintiffs' unjust
Conversion Sixth Cause of Action)
succeed on a conversion claim under Texas law, the plaintiff
must prove that' (1) he legally possessed the property or
was entitled to it; (2) the defendant wrongfully exercised
dominion and control over the property, excluding the
plaintiff; (3) the plaintiff demanded the property's
return; and (4) the defendant refused.'" United
States v. Boardwalk Motor Sports, Ltd., 692
F.3d 378, 381 (5th Cir. 2012) (citing Arthur W.
Tifford, PA v. Tandem Energy Corp., 562 F.3d
699, 705 (5th Cir. 2009)). "Conversion claims for money
must meet additional requirements." Id.
"Actions for conversion of money are available in Texas
only where money is (1) delivered for safekeeping; (2)
intended to be kept segregated; (3) substantially in the form
in which it is ...