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Flores v. Pennymac Loan Services LLC

United States District Court, N.D. Texas, Dallas Division

September 4, 2019

STEPHANIE FLORES, Plaintiff,
v.
PENNYMAC LOAN SERVICES, LLC, Defendant.

          FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

          REBECCA RUTHERFORD UNITED STATES MAGISTRATE JUDGE

         Before the Court in this civil action is Defendant's Motion for Summary Judgment (ECF No. 11). For the following reasons, the District Court should GRANT the Motion and DISMISS Plaintiffs claims with prejudice.

         Background

         This action arises out of Defendant PennyMac Loan Services, LLC's (PennyMac) attempted foreclosure of Plaintiff Stephanie Flores's real property located in Grand Prairie, Texas (the "Property").Flores obtained a mortgage loan (the "Loan") from Acopia, LLC on September 27, 2013. Pl.'s Original Pet. 3 (ECF No. 1-5); Def.'s App. 10-12 (ECF No. 13). In connection with the Loan, Flores executed a Note (the "Note") in favor of Acopia, LLC and a Deed of Trust (the "Deed of Trust") securing repayment of the Note with the Property. Pl.'s Original Pet. 3; Def.'s App. 106-19. PennyMac began servicing the Loan on November 1, 2013. Def.'s App. 14-19. Then, on November 4, 2013, PennyMac notified Flores that the Loan had been sold to PennyMac on October 9, 2013, and that PennyMac also serviced the Loan. Id. 20. On January 4, 2016, Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for Acopia, LLC, assigned the Deed of Trust to PennyMac. Pl.'s Original Pet. 2-3; Def.'s App. 121-28.

         Flores made periodic payments on the Loan from 2013 to 2017. Def.'s App. 6-7. Flores failed to submit her monthly payment due July 1, 2017, which PennyMac contends remains due. Id. 22-60; Def.'s Br. Support 10 (ECF No. 12). On June 22, 2017, PennyMac sent Flores a notice of default specifying the amount to cure the default and further cautioning that to avoid acceleration Flores must pay the amount by July 27, 2017. Def.'s App. 68-82. Flores was unable to cure her default by July 27, 2017, id. 5-8, 22-60, so PennyMac accelerated the Note and provided Flores notice of acceleration on January 31, 2018. Id. 87-90.

         After PennyMac initiated foreclosure proceedings against the Property, Flores filed an Original Petition and Application for Temporary Restraining Order in County Court at Law No. 3 of Dallas County, Texas, alleging PennyMac lacks the capacity to foreclose on the Property. Pl.'s Original Pet. Flores also alleges PennyMac failed to adequately service her mortgage loan and failed to offer her a loan modification. Id. Based on these allegations, Flores brings causes of action against PennyMac for violations of the Texas Debt Collection Act (TDCA), violations of the Texas Property Code, and breach of contract. Plaintiff also seeks a declaratory judgment to void any substitute trustee's deed affecting the Property and an injunction to prevent foreclosure, as well as damages and attorney's fees. The state court issued a temporary restraining order (TRO) preventing the foreclosure sale. TRO at 2-5 (ECF No. 1-9).

         Thereafter, PennyMac filed an answer (ECF No. 1-10) in state court and then removed the case to this Court on the basis of diversity jurisdiction. Removal Notice (ECF No. 1). PennyMac filed the pending Motion for Summary Judgment on February 19, 2019, in which it argues it is legally entitled to foreclose on the Property because it is the holder of the Note secured by the Deed of Trust encumbering the Property and because it is both the "mortgagee" and the "mortgage servicer" as defined in the Texas Property Code. Def.'s Br. Support. PennyMac further argues that Flores's claims for violations of the TDCA and the Texas Property Code and for breach of contract fail as a matter of law. Id. Flores filed a response (ECF No. 16), and PennyMac filed a reply (ECF No. 18). The Motion is fully briefed and ripe for adjudication.

         Legal Standard

         Summary judgment is appropriate when the pleadings and evidence on file show that no genuine issue exists as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). "[T]he substantive law will identify which facts are material." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine issue of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Id. The movant makes a showing that there is no genuine issue of material fact by informing the court of the basis of its motion and by identifying the portions of the record which reveal there are no genuine material fact issues. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The pleadings, discovery and disclosure materials on file, and affidavits, if any, must demonstrate that no genuine issue of material fact exists. Fed.R.Civ.P. 56(c).

         Once the movant makes this showing, the non-movant must then direct the court's attention to evidence in the record sufficient to establish that there is a genuine issue of material fact for trial. Celotex, 477 U.S. at 324. To carry this burden, the non-movant "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (citations omitted). Instead, the non-movant must show that the evidence is sufficient to support a resolution of the factual issue in his favor. Anderson, 477 U.S. at 249 (citation omitted).

         While all of the evidence must be viewed in a light most favorable to the non-movant, id. at 255 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59 (1970)), neither conclusory allegations nor unsubstantiated assertions satisfy the non-movant's summary-judgment burden. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (per curiam) (en banc) (citations omitted); Topalian v. Ehrman, 954 F.2d 1125, 1131 (5th Cir. 1992). Summary judgment in favor of the movant is proper if, after adequate time for discovery, the motion's opponent fails to establish the existence of an element essential to his case on which he will bear the burden of proof at trial. Celotex, 477 U.S. at 322-23.

         Courts have no obligation under Fed.R.Civ.P. 56 "to sift through the record in search of evidence to support a party's opposition to summary judgment." Adams v. Travelers Indem. Co., 465 F.3d 156, 164 (5th Cir. 2006) (quoting Ragas v. Term. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998)). Instead, a party opposing summary judgment must "identify specific evidence in the record" that supports challenged claims and "articulate the precise manner in which that evidence supports [a challenged] claim." Ragas, 136 F.3d at 458 (citing Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir. 1994)).

         Analysis

         Capacity-Based ...


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