United States District Court, S.D. Texas, Houston Division
MEMORANDUM AND ORDER
ROSENTHAL CHIEF UNITED STATES DISTRICT JUDGE.
March 2019, Jennifer Ouabderhm sued The Money Source, Inc., a
mortgage servicer, over a foreclosure dispute, asserting
fraud, negligent misrepresentation, violations of the deed of
trust and the Texas Property Code, and wrongful possession of
collateral. The Money Source has moved for summary judgment,
arguing that Daniel Bush, Ouabderhm's husband and
coborrower, is a necessary party who must be joined under
Federal Rule of Civil Procedure 19, and that there is no
record evidence supporting Ouabderhm's claims. Ouabderhm
responded, and The Money Source replied.
review of the pleadings; the motion, response, and reply; the
record evidence; and the applicable law, the court denies,
without prejudice, The Money Source's summary judgment
motion. (Docket Entry No. 14). Ouabderhm must file an amended
complaint adding Bush as a party by August 23,
2019. The Money Source must file any subsequent
motion for summary judgment by September 13,
2019, Ouabderhm and Bush must respond by
October 4, 2019, and The Money Source may
reply by October 11, 2019. The reasons for
these rulings are explained in detail below.
August 2016, Ouabderhm and Daniel Bush obtained a loan from
Houstonian Mortgage Group, Inc. to buy a home in Willis,
Texas. (Docket Entry No. 14-1 at 8). Their promissory note
required them to pay $972.90 on the first day of each month
for 30 years, beginning on October 1, 2016. (Id.).
The note was secured by a deed of trust that Ouabderhm and
Bush also signed in August 2016. (Docket Entry No. 1 at 13).
The Money Source began servicing Ouabderhm's and
Bush's mortgage in October 2016. (Docket Entry No. 14-1
and Bush failed to make their loan payments for October and
November 2016. (Id. at 3). In December 2016,
Ouabderhm asked The Money Source for mortgage assistance,
claiming that Bush had lost his job and that they did not
have enough income to pay the monthly amount under the note.
(Id.). The Money Source granted Ouabderhm and Bush a
temporary forbearance in February 2017, which required them
to pay $612.43 each month from March to August 2017. (Docket
Entry No. 14-1 at 12-16). Ouabderhm and Bush made the reduced
payments, but the mortgage remained in default. (Docket Entry
No. 14 at 4-5).
September 6, 2017, The Money Source sent Ouabderhm and Bush
notice by certified mail that they remained in default, the
company intended to accelerate the loan, and that if
Ouabderhm and Bush did not cure the default, The Money Source
would foreclose on the property. (Docket Entry No.
14-1 at 19-21). Ouabderhm and Bush applied for another
forbearance on September 13, 2017, which The Money Source
granted in October 2017. (Id. at 25). Under the
second forbearance, Ouabderhm and Bush were not required to
make a mortgage payment until February 1, 2018. (Id.
March 21, 2018, Ouabderhm applied for an extension of the
second forbearance. (Docket Entry No. 15-1 at 22). The Money
Source denied the request on April 3, 2018, explaining that
the “application does not meet program
guidelines.” (Docket Entry No. 14-1 at 30). On April
27, The Money Source sent Ouabderhm and Bush a letter
notifying them that they were “in default” and
that it had “initat[ed] foreclosure proceedings to seek
resolution of the loan balance.” (Docket Entry No. 15-4
at 5). On June 11, 2018, The Money Source's substitute
trustee filed a notice of trustee's sale scheduling the
foreclosure of Ouabderhm's and Bush's property on
August 7, 2018. (Docket Entry No. 14-2 at 24). On June 28,
2018, The Money Source denied Ouabderhm's application for
loss-mitigation assistance because it did not have enough
documentation of Ouabderhm's and Bush's income.
(Docket Entry No. 14-1 at 33).
August 7, 2018, The Money Source's substitute trustee
foreclosed on Ouabderhm's and Bush's home. (Docket
Entry No. 14 at 7). On March 8, 2019, The Money Source, the
foreclosing beneficiary and purchaser at the sale, obtained a
state-court judgment that Ouabderhm and Bush were no longer
entitled to possess the home. (Docket Entry No. 4-1 at 19).
The judgment required Ouabderhm and Bush to post a $1, 000
bond to file an appeal. (Id.).
of posting the bond and appealing the judgment, Ouabderhm
sued The Money Source in state court on the same day the
judgment was entered, alleging fraud, negligent
misrepresentation, “[non]compliance with Texas Sale
Procedures, ” and wrongful possession of collateral.
(Docket Entry No. 1 at 10-11). The Money Source timely
removed. (Docket Entry No. 1). In April 2019, Ouabderhm
applied for a temporary restraining order to enjoin the
state-court judgment. (Docket Entry No. 4). The court denied
the temporary restraining order application and directed the
parties to exchange the loan documents and communications
between Ouabderhm and The Money Source. (Docket Entry No. 9).
The Money Source moved for summary judgment in June 2017,
arguing that Bush is a necessary party who must be joined
under Rule 19, and that there is no record evidence
supporting Ouabderhm's claims. (Docket Entry No. 14).
Ouabderhm responded, and The Money Source replied. (Docket
Entry Nos. 15, 16).
The Legal Standards
judgment is appropriate only when ‘the movant shows
that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of
law.'” Shepherd on Behalf of Estate of Shepherd
v. City of Shreveport, 920 F.3d 278, 282-83 (5th Cir.
2019) (quoting Fed.R.Civ.P. 56(a)). “A material fact is
one that might affect the outcome of the suit under governing
law, ” and “a fact issue is genuine if the
evidence is such that a reasonable jury could return a
verdict for the non-moving party.” Renwick v. PNK
Lake Charles, L.L.C., 901 F.3d 605, 611 (5th Cir. 2018)
(quotations and citations omitted). The moving party
“always bears the initial responsibility of informing
the district court of the basis for its motion, ” and
identifying the record evidence “which it believes
demonstrate[s] 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) (alteration omitted)
(quoting Nola Spice Designs, L.L.C. v. Haydel Enters.,
Inc., 783 F.3d 527, 536 (5th Cir. 2015)). The moving
party must demonstrate the absence of a genuine issue of
material fact, but it need not negate the elements of the
nonmovant's case. Austin v. Kroger Tex., L.P.,
864 F.3d 326, 335 (5th Cir. 2017). “If the moving party
fails to meet [its] initial burden, the motion must be