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Constance v. Interstate Intrinsic Value Fund A LLC

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

November 12, 2019

Charles Constance and Marion Constance, Plaintiffs,
v.
Interstate Intrinsic Value Fund A LLC, Defendant.

          MEMORANDUM OPINION

          RENEE HARRIS TOLIVER JUDGE

         Now before the Court is Defendant's Motion for Summary Judgment. Doc. 15. For the reasons that follow, the motion is GRANTED.

         I. PROCEDURAL HISTORY

         In November 2018, Plaintiffs filed their complaint in this action, seeking to avoid the foreclosure sale of their home (the “Property”) by Defendant. Doc. 1-2 at 3-4. They aver that when they purchased the Property, they took out two loans from the same lender: one for 80 percent of the purchase price (the “Primary Mortgage”) and one for 20 percent of the purchase price (the “Junior Mortgage”). Doc. 1-2 at 3-4. In 2005, Plaintiffs entered into a loan modification agreement (“the LMA”), which they allegedly believed consolidated the Junior and Primary Mortgages. Doc. 1-2 at 4. From 2005 to 2013, Plaintiffs received no communication regarding the Junior Mortgage. Doc. 1-2 at 4.

         In 2013, Defendant, the lienholder of the Junior Mortgage, began sending Plaintiffs mortgage statements and ultimately attempted to foreclose on the Property due to their default. Doc. 1-2 at 4-5. Plaintiffs then initiated this civil action for (1) breach of contract; (2) violation of the Real Estate Settlement Procedures Act; (3) violation of the Truth in Lending Act; (4) “estoppel”; and (5) declaratory and injunctive relief. Doc. 1-2 at 5-9. Defendant removed the case to this Court based on federal question jurisdiction and, in due course, filed the instant summary judgment motion. Doc. 1 at 2-3; Doc. 15.

         II. APPLICABLE LAW

         Summary judgment shall be granted when the record shows that there is no genuine dispute as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986). A dispute regarding a material fact is “genuine if the evidence is such that a reasonable jury could return a verdict in favor of the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When ruling on a motion for summary judgment, the court is required to view all facts and inferences in the light most favorable to the nonmoving party and resolve all disputed facts in favor of the nonmoving party. Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005).

         Once the moving party has made an initial showing that there is no evidence to support the nonmoving party's case, the party opposing the motion must come forward with competent summary judgment evidence showing the existence of a genuine dispute of material fact. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 586 (1986). Nevertheless, a party's conclusory and self-serving statements are insufficient to defeat summary judgment. Koerner v. CMR Const. & Roofing, LLC, 910 F.3d 221, 227 (5th Cir. 2018) (holding that “[s]elf-serving allegations are not the type of significant probative evidence required to defeat summary judgment, ” and “a vague or conclusory affidavit [without more] is insufficient to create a genuine issue of material fact in the face of conflicting probative evidence.”) (citation omitted) (alterations in original).

         III. FACTUAL SUPPORT FOR SUMMARY JUDGMENT MOTION

         Defendant has submitted documents in support of its motion which demonstrate the following undisputed facts; (1) Plaintiffs acquired title to the Property in December 2001 by virtue of an “80/20” mortgage lien, both liens with the same lender; (2) both Plaintiffs are parties to the Primary Mortgage in the original amount of $101, 600.00, Doc. 16-1 at 2-3 (Warranty Deed with Vendor's Lien); (3) only Charles Constance (“Mr. Constance”) executed the note for the Junior Mortgage (the “Note”) in the amount of $25, 400.00, Doc. 16-2 at 2-3 (Note); (4) both Plaintiffs, however, signed a Purchase Money Deed of Trust (“DOT”) to secure repayment of the Note and were designated as “Borrowers” on the signature page of the document, Doc. 16-3 at 2-7; and (5) between 2012 and 2017, Mr. Constance filed for Chapter 13 bankruptcy three times, see Doc. 15, Exs. A-L.

         In July 2013, Defendant became the holder of the Note and beneficiary of the DOT through a chain of assignments. Doc. 16-4 at 2-7 (Assignments). Since May 2016, the Note has been in default due to the lack of timely payments. Doc. 16 at 2 (Decl. of Defendant's Representative). In November 2017, Defendant notified Plaintiffs of the default and ultimately accelerated the amount due when they failed to remit the cure amount of $54, 547.97. Doc. 16 at 2; Doc. 16-5 at 2 (Notice of Default); Doc. 16-6 at 3 (Notice of Acceleration).

         In support of their response to Defendant's motion, Plaintiffs have submitted the LMA. Doc. 17-2 at 39-41. In their sworn declarations, they attest that they reasonably believed the Junior Mortgage “no longer existed” after the loan was modified because they received no communication about it from 2005 until Defendant contacted them in 2013. Doc. 17-2 at 5 (Decl. of Marion Constance (“Ms. Constance”)); Doc. 17-2 at 10 (Decl. of Charles Constance). Plaintiffs also aver that until Defendant raised the issue in this case, they were not aware that Mr. Constance's bankruptcy counsel had ever indicated during those proceedings that the Junior Mortgage was still valid. Doc. 17-2 at 5 (Decl. of Marion Constance); Doc. 17-2 at 10-11 (Decl. of Charles Constance).

         IV. ARGUMENT AND ANALYSIS [1]

         The gist of Plaintiffs' claims is that Defendant cannot foreclose because they did not know the Junior Mortgage was still in effect since they received no communication about it from 2005 until 2013. Doc. 1-2 at 4, 6-8. Defendant asserts that Plaintiffs' claims are barred by the judicial admissions Mr. Constance made during his ...


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