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Trevino v. Deutsche Bank National Trust Co.

United States District Court, W.D. Texas, San Antonio Division

July 26, 2019

JOHNNY Z TREVINO, Plaintiff,
v.
DEUTSCHE BANK NATIONAL TRUST COMPANY, DEBORAH MARTIN, SUBSTITUTE TRUSTEE; Defendants.

          REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

          ELIZABETH S. ("BETSY") CHESTNEY UNITED STATES MAGISTRATE JUDGE.

         To the Honorable United States District Judge David A. Ezra:

         This Report and Recommendation concerns Defendant's Motion for Summary Judgment [#18] and Third-Party Plaintiff's Request for Default Judgment Against Third-Party Defendant [#21]. The motions were referred to the undersigned for a report and recommendation on July 10, 2019, and the undersigned has authority to enter this recommendation pursuant to 28 U.S.C. § 636(b)(1)(B).

         Defendant's motion for summary judgment was filed on June 21, 2019 and served electronically on Plaintiff through his counsel. According to this Court's Local Rules, Plaintiff's response to Defendant's motion was due within 14 days of the motion's filing, on or before July 5, 2019. See Loc. R. CV-7(e) (responses to dispositive motions due within 14 days of motion's filing). To date, Plaintiff has not filed a response to the motion. Pursuant to Local Rule CV-7(e), if there is no response filed within the time period prescribed by the rules, the court may grant the motion as unopposed. However, because it is a dispositive motion, the undersigned will nevertheless evaluate its merits.

         Nor has Third-Party Defendant Eva Trevino filed an answer to the Third-Party Complaint filed by Defendant. Eva Trevino was served with the Third-Party Complaint by publication. Now Defendant's motion for default judgment is pending before the Court. In light of Plaintiff Johnny Trevino's and Third-Party Defendant Eva Trevino's failure to respond and for the reasons set forth below, the undersigned recommends the motions be granted.

         I. Procedural Background

         The record reflects that Plaintiff Johnny Trevino originally filed this action in state court in Bexar County on August 6, 2018 against Defendants Deutsche Bank (“Deutsche Bank”) and Substitute Trustee Deborah Martin, contesting foreclosure proceedings as to property located at 221 Lovett Avenue, San Antonio, Texas 78211. (Orig. Pet. [#1-4].) Mr. Trevino alleges that he defaulted on his mortgage loan and Defendants breached the note and deed of trust by refusing to negotiate with him or to allow him to cure his default, by failing to send proper and timely notice of default, and by accelerating his loan and proceeding with foreclosure in violation of the Texas Property Code. Mr. Trevino's Petition asserts a claim of breach of contract against Defendants and alleges that Defendants waived their right to accelerate and foreclose on the loan by repeatedly accepting late payments.

         Deutsche Bank removed the Petition to this Court on August 29, 2018 on the basis of diversity jurisdiction, alleging that the Substitute Trustee was improperly joined and her citizenship should not be considered for purposes of evaluating diversity [#1]. Removal was not contested, and the Bank filed a Counterclaim against Mr. Trevino [#7] and a Third-Party Complaint against his wife, Eva Trevino, also a party to the loan and deed of trust at tissue, for an order authorizing judicial foreclosure [#9]. After attempting to serve and locate Ms. Trevino unsuccessfully, Deutsche Bank moved for an order authorizing alternative service through publication. Although the Court at first denied the motion and ordered further diligence in attempting to locate Ms. Trevino, the Court ultimately ordered service by publication [#16].

         The Third-Party Complaint was published weekly in the Hart Beat, a newspaper of general circulation published in the City of San Antonio, for four weeks from May 10, 2019 to May 31, 2019 [#17-1]. After Ms. Trevino failed to respond to the Third-Party Complaint, Deutsche Bank moved for a Clerk's Entry of Default, which was granted and entered on July 2, 2019 [#20]. Deutsche Bank has now moved for summary judgment on all causes of action asserted by Mr. Trevino, as well as on Deutsche Bank's counterclaim seeking a judgment authorizing foreclosure against Mr. Trevino. Deutsche Bank has also moved for a final default judgment against Ms. Trevino on its Third-Party Complaint.

         II. Summary Judgment Record

         The summary judgment record establishes that on or about October 27, 2004, Mr. Trevino and his spouse, Eva Trevino, executed a $57, 600.00 Texas Home Equity Note in favor of Long Beach Mortgage Company, the original lender, and its assigns. (Note [#18-1] at 4-8.) On the same date, the Trevinos executed a Texas Home Equity Security Instrument, i.e., a Deed of Trust, that was recorded in the real property records of Bexar County, Texas as Document Number 20040252586 establishing a first-year lien on real property located at 221 Lovett Avenue, San Antonio, Texas 78211. (Deed of Trust [#18-1] at 9-20.) The note and deed of trust are collectively referred to herein as “the loan.”

         On August 25, 2008, the Trevinos executed a loan modification agreement with a new monthly payment of principal and interest in the amount of $457.14 beginning October 1, 2008. (Loan Modification Agreement [#18-1] at 21-26.) On October 5, 2010, JPMorgan Chase Bank National Association, as successor in interest to Long Beach, assigned the Deed of Trust to Deutsche Bank by an assignment recorded in the real property records of Bexar County, Texas as Document Number 20100183036. (Assignment [#18-1] at 27.)

         The Trevinos defaulted on their loan payments, and on November 15, 2017, Select Portfolio Services, acting as mortgage loan service for Deutsche Bank, sent a notice of default to the Trevinos at their last known address (221 Lovett Avenue) by certified mail informing them that the payment required to cure the default to date was $6, 278.64. (Notice of Default [#18-1] at 31-34.) Then, on January 25, 2018, the law firm retained by Select Portfolio Servicing sent a notice of acceleration by certified mail to the last known address of the Trevinos (221 Lovett Avenue), informing them that Deutsche Bank was initiating foreclosure proceedings due to the failure to cure the default on the loan at issue. (Notice of Acceleration [#18-1] at 35-39.) On March 20, 2019, Select Portfolio Servicing sent the Trevinos a letter informing them that the total amount required to cure the default and reinstate the loan was $23, 747.21 and the final payoff amount on the loan was $72, 725.26. (Reinstatement Ltr. [#18-1] at 55-61.)

         III. ...


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