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Austin v. Specialized Loan Servicing LLC

United States District Court, S.D. Texas, Galveston Division

August 28, 2019

JAMES R. AUSTIN, et al., Plaintiffs,
v.
SPECIALIZED LOAN SERVICING LLC, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          GEORGE C. HANKS, JR. UNITED STATES DISTRICT JUDGE.

         Plaintiffs, James Austin and Debra Garcia-Austin ("the Austins"), initially sued the defendants in Texas state court when the defendants attempted to foreclose on an allegedly invalid home equity note. In that action, the Austins alleged that the home equity note was invalid because the defendants violated 18 provisions of the Texas Constitution while making and servicing the loan. The case was removed to this Court, and the Austins now allege only a single violation of the Texas Constitution (Dkt. 12).

         The defendants moved for summary judgment. The Court has already granted the defendants' motion (Dkt. 21) and now provides its reasons below.

         BACKGROUND

         In April of 2007, the Austins took out a home equity loan and executed a home equity note and a deed of trust (Dkt. 1-3). The Austins defaulted on the loan, and as a result the defendants accelerated the note and scheduled a foreclosure sale of the Austins' home for February 6, 2018 (Dkt. 1-3). In order to prevent the foreclosure, the Austins filed this lawsuit in Texas state court on February 2, 2018 (Dkt. 1-3). In their state-court petition, the Austins alleged that the defendants, while making and servicing the loan, had committed 18 different violations of the homestead-protection provisions contained in Article XVI, Section 50(a)(6) of the Texas Constitution (Dkt. 1-3 at pp. 5-6). Those alleged constitutional violations formed the basis for the Austins' causes of action for breach of contract, the quiet title remedy, declaratory relief, and injunctive relief (Dkt. 1-3 at pp. 6-10).

         The defendants removed the case to this Court, invoking this Court's diversity jurisdiction (Dkt. 1 at pp. 3-5). See 28 U.S.C. § 1332. After removing the case, the defendants filed a pre-motion conference letter under Section 6 of this Court's procedures in which they argued that summary judgment was appropriate because the Austins' breach of contract claim was time-barred and the Austins had no evidence of any violation of the Texas Constitution (Dkt. 9). After the subsequent pre-motion conference, the Austins abandoned 17 of their allegations of constitutional violations, leaving a single alleged constitutional violation-specifically, an alleged failure by the defendants to provide certain documents at closing as required by Article XVI, Section 50(a)(6)(Q)(v) of the Texas Constitution-as the only foundation for the Austins' claims for breach of contract, the quiet title remedy, declaratory relief, and injunctive relief (Dkt. 12).

         The defendants moved for summary judgment, reiterating their prior assertions that the Austins' breach of contract claim was time-barred and that the Austins had no evidence of any violation of the Texas Constitution (Dkt. 13). The Austins responded (Dkt. 15), and the defendants filed a reply brief (Dkt. 16). The Court granted the defendants' motion from the bench and now gives its reasons.

         SUMMARY JUDGMENTS

         Federal Rule of Civil Procedure 56 mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a sufficient showing of the existence of an element essential to the party's case and on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In deciding a motion for summary judgment, the Court must determine whether the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. Id. at 322-23.

         For summary judgment, the initial burden falls on the movant to identify areas essential to the non-movant's claim in which there is an absence of a genuine issue of material fact. Lincoln Gen. Ins. Co. v. Reyna, 401 F.3d 347, 349 (5th Cir. 2005). The movant, however, need not negate the elements of the non-movant's case. See Boudreaux v. Swift Tramp. Co., 402 F.3d 536, 540 (5th Cir. 2005). The movant may meet its burden by pointing out the absence of evidence supporting the non-movant's case. Duffy v. Leading Edge Products, Inc., 44 F.3d 308, 312 (5th Cir. 1995).

         If the movant meets its initial burden, the non-mo vant must go beyond the pleadings and designate specific facts showing that there is a genuine issue of material fact for trial. Littlefield v. Forney Indep. Sch. Dist., 268 F.3d 275, 282 (5th Cir. 2001). "An issue is material if its resolution could affect the outcome of the action. A dispute as to a material fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." DIRECT TV Inc. v. Robson, 420 F.3d 532, 536 (5th Cir. 2006) (citations omitted).

         In deciding whether a genuine and material fact issue has been created, the facts and inferences to be drawn from those facts must be reviewed in the light most favorable to the non-movant. Reaves Brokerage Co. v. Sunbelt Fruit & Vegetable Co., 336 F.3d 410, 412 (5th Cir. 2003). However, factual controversies are resolved in favor of the non-movant "only when both parties have submitted evidence of contradictory facts." Alexander v. Eeds, 392 F.3d 138, 142 (5th Cir. 2004) (citation and quotation marks omitted). The non-movant's burden is not met by mere reliance on the allegations or denials in the non-movant's pleadings. See Diamond Offshore Co. v. A &B Builders, Inc., 302 F.3d 531, 545 n.13 (5th Cir. 2002). Likewise, "conclusory allegations" or "unsubstantiated assertions" do not meet the non-movant's burden. Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 399 (5th Cir. 2008). Instead, the non-movant must present specific facts which show the existence of a genuine issue concerning every essential component of its case. Am. Eagle Airlines, Inc. v. Air Line Pilots Ass'n, Int'l, 343 F.3d 401, 405 (5th Cir. 2003). In the absence of any proof, the Court will not assume that the non-movant could or would prove the necessary facts. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc).

         Affidavits cannot preclude summary judgment unless they contain competent and otherwise admissible evidence. See Love v. Nat'l Medical Enterprises, 230 F.3d 765, 776 (5th Cir. 2000); Hunter-Reed v. City of Houston, 244 F.Supp.2d 733, 745 (S.D. Tex. 2003). A party's self-serving and unsupported statement in an affidavit will not defeat summary judgment where the evidence in the record is to the contrary. Smith v. Southwestern Bell Tel. Co., 456 Fed.Appx. 489, 492 (5th Cir. 2012) ("[W]e have repeatedly held that self-serving statements, without more, will not defeat a motion for summary judgment, particularly one supported by plentiful contrary evidence."); United States v. Lawrence, 276 F.3d 193, 197 (5th Cir. 2001); In re Hinsley, 201 F.3d 638, 643 (5th Cir. 2000); see also Scott v. Harris, 550 U.S. 372, 380 (2007) ("When opposing parties tell two different stories, one of which is blatantly contradicted by the record, so that no reasonable jury could believe it, a court should not adopt that version of the facts for purposes of ruling on a motion for summary judgment.").

         Finally, Rule 56 does not impose upon the Court a duty to sift through the record in search of evidence to support a party's opposition to summary judgment; evidence not referred to in the response to the motion for summary judgment is not properly before the Court, even if it exists in the ...


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