Kormanik v. The Bank of New York Mellon, No. 4:2018cv03709 - Document 19 (S.D. Tex. 2019)
Court Description: MEMORANDUM OPINION AND ORDER granting 14 MOTION for Summary Judgment On All Claims, Counterclaims and Third Party Claims and Brief in Support. (Signed by Judge Sim Lake) Parties notified.(gclair, 4)
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Kormanik v. The Bank of New York Mellon Doc. 19 United States District Court Southern District of Texas IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTR ICT OF TEXA S HOUSTON DIVISION ENTERED July 03, 2019 David J. Bradley, Clerk RONALD J . KORMANIK , Plaintiff, V. CIVIL ACTION NO . H-18-3709 THE BANK OF NEW YORK MELLON AS TRUSTEE FOR CWABS, INC . ASSET-BACKED CERTIFICATES SER IES 200 5-1 7 , Defendant . MEMORAHDUM OPINION AND ORDER Plaintiff Ronald Kormanik (uplaintiff'') sued defendant The Bank of New York Mellon as Trustee for CWABS, Inc . A sset-Backed Certificates Series 2005-17 (the nTrustee'') in the 215th District Court of Harris County, Texas (the uState Court'o , alleging that Trustee improperly attemp ting to foreclose his real property located at 1122 Barkston Drive, Katy, Texas 77450 (the Mproperty/o x The Trustee timely removed the action on October 2018.2 Pending before the court is Defendant 's Motion for Summary lThe Property is more particularly described in the subject Texas Security Instrument recorded in the real property records of Harris County, Texas, in Instrument Number Y853735 (the uSecurity Instrument'') as: Lot Twenty (20), in Block Five (5), of NOTTINGHAM COUNTRY, SECTION NINE (9), a subdivision in Harris County, Texas, according to the map or plat thereof recorded in Volume 289, Page 13 of the Map Records of Harris County , Texas . 2see Defendant's Notice of Removal (nNotice of Removal'o , Docket Entry No . 1 , p . 1 . Dockets.Justia.com Judgment on al1 Claims, Counterclaim s and Third Party Claims and Brief in Support (the uTrustee's MSJ'' or the nTrustee's Motion for Summary Judgment'') (Docket Entry No . For the reasons exp lained below , the Trustee 's Motion for Summary Judgment will be granted . 1. On October Factual and Procedural Backqround 2005, Plaintiff executed a $149,688.00 Texas Home Equity Note (the ''Note'') in favor his original lender, Countrywide Home Loans, Inc. (the ''Original Lender'o x The Note was secured by the Security Instrument z4 which established a first lien on the Property x During the closing Plaintiff also signed a Texas Home Equity Affidavit and Agreement (the uAffidavit'o x Plaintiff defaulted on the Loan in July of 2014 and remains defaultx Notice of Default was sent to Plaintiff and his wife, Carol Kormanik (uMrs. Kormanik'o , via certified mail on August 15, 3see N ote , Exhibit 1-A to Declaration of Select Portfolio Servicing , Inc . (USPS Declaration'r), Docket Entry No . 14-1, pp. 4-6. 4The Note and the Security collectively herein as the %'Loan .'' Instrument ssee Security Instrument, Exhib it Docket Entry No . 14-1 , pp . 7, 16-17 . are referred to Declaration , 6see Affidavit, Exhibit l-C to SPS Declaration , Docket Entry 14-1, pp . 23-26. Vsee SPS Declaration , Exhibit 1 to Trustee's MSJ , Docket Entry No. 14-1, p. 2 î 7 (''The Loan Records reflect that Borrower fell behind on his payment ob ligations under the Loan and is past due for the July 1, 2014 payment and a1l subsequent payments.''). 2014 .8 On September 2014 , Mortgage Electronic Registration Systems, Inc. I''MERS''I as nominee for the Original Lender assigned the Security Instrument to the Trustee and recorded the assignment in the Harris County real property records .g A second notice default was sent to Plaintiff via certified mail on January 4, 2018 .10 Notice of acceleration was sent to Plaintiff via certified mail on February 7, 2018.11 select Portfolio Servicing, InC. ('ASPS'') the current duly authorized mortgage servicer for the Loan .l2 Plaintiff filed this action in the State Court on October 2018.13 The Trustee timely removed on October 9, 2018 .14 On November 30, 2018, the Trustee filed a counterclaim seeking an order of foreclosure and a declaration of its right to foreclose x s 8see Notice of Default and Intent to Accelerate (August 15, 2014J, Exhibit l-D to SPS Declaration, Docket Entry No. 14-1, p. 30. gsee A ssignment of Deed of Trust , Declaration , Docket Entry No . 14 -1 , p . 38 . Exhib it 1-E to SPS losee Notice of Default and Intent to Accelerate (January 4, 20181, Exhibit l-F to SPS Declaration, Docket Entry No . 14-1, p . 42. llsee Notice of Acceleration of Loan Maturity (uNotice of Acceleration''), Exhibit l-G to SPS Declaration, Docket Entry No . 14-1, p . 45 . l2see Limited Power of Attorney , Exhibit Declaration , Docket Entry No . 14 -1 , p . 53 . 1-H to SPS l3see Plaintiff's Original Petition (upetition'o , Exhibit C-l to Notice of Removal, Docket Entry No . 1-4 , p . 1 . l4see Notice of Removal, Docket Entry No . l5see Defendant's Original Counterclaims Authorizing Foreclosure , Docket Entry No . 7 . for Judgment On the same date , the Trustee filed its third party claim against Mrs . Korman ik seeking an order authorizing foreclosure because Mrs . Kormanik is a necessary party to any request for foreclosure x 6 Mrs . Kormanik filed an answer on January 2019.17 The Trustee filed its Motion for Summary Judgment on February 2019 .18 Plaintiff moved to for an extension of time respond Trustee 's Motion for Summary Judgment on February the 2019 .19 The court granted Plaintiff 's motion and ordered Plaintiff to respond to the Trustee 's Motion for Summary Judgment by March Plaintiff did not file a response . 2019 .20 For the reasons exp lained below , the Trustee 's Motion for Summary Judgment will be granted . II . Summary Judgment Standard Summary judgment is appropriate if the movant establishes that there is no genu ine dispute about any material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). l6see Defendant's Original Third Party Comp laint for Judgment Authorizing Foreclosure , Docket Entry No . 8 7 Trustee 's MSJ, Docket Entry No . l4 , p . 2 . l7see Answer of Carol Kormanik to Third Party Comp laint, Docket Entry No . lO. lBsee Trustee 's MSJ , Docket Entry No . 14 . l9see Plaintiff, Ronald J . Kormanik 's Unopposed Motion to Extend Motion Docket Date and to Respond to Defendant's Motion for Summary Judgment , Docket Entry No . 17 . 20See Order Granting Plaintiff, Ronald J . Kormanik 's Unopposed Motion to Extend Motion Docket Date and to Respond to Defendant's Motion for Summary Judgment, Docket Entry No . 18 . Disputes about material facts are genuine uif the ev idence is such that a reasonable jury could return a verdict for the nonmoving party .'' Anderson v . Liberty Lobby , Inc w 2505, 2510 (1986) The moving party is entitled to judgment as a matter of law if uthe nonmov ing party has failed to make a sufficient showing on an essential element her case w ith respect to which she has the burden of proof .'' Celotex Corp . v . Catrett , 106 S . 2548, 2552 (1986). A party moving for summary judgment nmust 'demonstrate absence of a genuine issue of material factz' but need not neqate the elements of the nonmovant 's case .'' Little v . Licuid Air Corp w F.3d 1069, 1075 (5th 1994) (en banc) (per curiam) (quoting Celotex, 1O6 S . Ct. at 2553). uIf the moving party fails to meet this initial burden , the motion must be denied , regardless of the nonmovant 's response .'' Id . If the moving party meets this burden , Rule 56(c) requires the nonmovant to go beyond the pleadings and show by affidavits, depositions , answers to interrogatories , admissions on file, or other adm issible evidence that specific facts exist over which there is a genuine issue for trial . Id . The nonmovant umust do more than simply show that there is some metaphysical doubt as to the material facts .'' Matsushita Electric Industrial Co ., Ltd . v . Zenith Radio Corp w 1O6 S . Ct . 1348 , 1356 (1986). In reviewing the evidence ''the court must draw a1l reasonable inferences favor of the nonmoving party , and may not make credibility determinations or weigh the ev idence .'' Sanderson Plumbinq Products, Incw Reeves v . 2097, (2000). The court resolves factual controversies in favor of the nonmovant, ubut only when there is an actual controversy , that is , when 50th parties have submitted evidence of contradictory facts .'' Little , F .3d at 1075 . 111 . Analv sis Pursuant to the local rules of this district, ufailure respond to a motion will be taken as a representation of no opposition .'' Local Rules of the United States District Court for the Southern District of Texas LR 7.4 . Because Plaintiff failed to respond to the Trustee 's Motion for Summary Judgment, the court will treat the Motion as though it unopposed by Plaintiff. The court will nevertheless consider the Trustee 's Motion for Summary Judgment on the merits . his Petition , Plaintiff seeks a declaration that the Trustee lacks standing to foreclose on the Property x l The Trustee argues that Plaintiff 's declaratory relief claim lacks merit and that Trustee is entitled an order authorizing to foreclose on the Property x z 2lSee Petition , Exhibit 1-4 , pp . 4-5. to Notice of Removal, Docket Entry 22See Trustee 's MSJ , Docket Entry No . l4, pp . A. Plaintiff 's Claim for Declaration of the Trustee's Lack of Standing to Foreclose uUnder Texas Property Code 55 51 .002 , 51 .0025 , the mortgagee or mortgage servicer may foreclose upon'' real property secured by a security instrument when a borrower defaults . Deutsche Bank National Trust Co ., 614 See Flowers v . App 'x 2015). While a mortgagee can be the original holder of a security instrument this case, the Original Lender), a mortgagee can also be the most recent assignee of record of a security interest . Tex . Prop . Code 5 51.0001(4) The Tru stee the most recent assignee of record of the Security Instrument and holder of the Note , and is therefore the current mortgagee on the Loan . A s the mortgagee , the Trustee has all the rights in the Property that the Original Lender held at the time of the assignment , including the right to foreclose in the event that Plaintiff defau lts .23 In his Petition , Plaintiff alleges that the Tru stee lacks standing to foreclose on the Property because the assignment of the Original Lender's interest in the Loan to the Trustee was improper .z4 Plaintiff alleges that he was never given proper notice of the assignment .zs ''EU)nder Texas law, facially valid assignments 23see Security Instrument , Exhib it 1-B to SPS Declaration , Docket Entry No. 14-1, p . 17 (granting the Original Lender a power of sale). 24see Petition , Exhibit C-1 to Notice of Removal , Docket Entry 1-4 , pp . 4-5. 25Id . at 4 . cannot be challenged for want of authority except by the defrauded assignor .'' Reinaqel v . Deutsche Bank National Tru st Co ., 735 F .3d 220, 228 (5th Cir. 2013). Plaintiff, as the borrower on the Loan, therefore has no standing challenge MERS 'S assignment of the Orig inal Lender's interest to the Trustee . assignment of the Security In strument Furthermore , the the Trustee was recorded in the Harris County real property records, provid ing Plaintiff with notice of the assignment . Pla intiff is therefore not entitled to a declaration that the Trustee lacks standing to foreclose , and the Trustee 's Motion for Summary Judgment on Plaintiff's claim for declaratory relief will be granted . B. The Trustee 's Request for an Order of Foreclosure The Trustee argues that it is entitled to summary judgment on its counterclaim and third party claim seeking an order authorizing foreclosure and a declaration of its right Property .z6 foreclose on the uUnder Texas law , lenders have a substantive right to elect judicial nonjudicial foreclosure in the event of a default .'' Douglas v . NCNB Texas National Bank, 979 F .2d 1128, 1130 (5th 1992) 'lTo foreclose under a security instrument Texas with a power following : sale , the lender must demonstrate the a debt exists; (2) the debt is secured by a lien created under Article plaintiff E isq 5O(a)(6) of the Texas Constitution; default under the 26See Tru stee 's M SJ , Docket Entry No . note pp . and security instrument; (4) plaintiff gl received acceleration i'' and notice of plaintiff is not a member default and the National Guard or United States Military and has not applied for relief under the Soldier 's and Sailor's Relief Act of 1940 . Tex . Prop . Code Ann. 5 51.002 (West 2016) Amaro v. Bear Stearns Residential Mortqaqe corporation , civil 1:15-CV -74, WL 6775504 , at (s.D. Tex . March 31, 2016). The Trustee has established that a debt exists and that the debt is a secured lien created under Article 16, 5 5O(a)(6) of the Texas Constitution x ? The Tru stee has also established that Plaintiff and Mrs . Kormanik are in default .28 The Texas Property Code requ ires the mortgage serv icer to serve a debtor default with a written notice by certified mail stating that the Note is in defau lt and prov iding at least twenty days to cure the deficiency . Tex . Prop . Code Ann . 5 5l.O02 (d). Notices of default were sent to Plaintiff and Mrs . Kormanik on August 2018 .29 Notice Acceleration was 2014 , and January sent to Plaintiff and 2RSee Note, Exhib it 1-A to SPS Declaration , Docket Entry No . 14-1, p . 4 ; Security Instrument, Exhibit 1-B to SPS Declaration , Docket Entry No . 14 -1 , p . 7 . 28see SPS Declaration , Exhibit 1 to Trustee 's MSJ , Docket Entry No. 14-1, p . 27 Notice of Default and Intent to Accelerate (August 15, 2014), Exhibit l-D to SPS Declaration, p . 3O; Notice of Default and Intent to Accelerate Elanuary 4, 20182, Exhibit 1-F to SPS Declaration, Docket Entry No . 14-1, p . 42 . dispute that the Loan is in default . Plaintiff does not 29see Notice of Default and Intent to Accelerate (August 15, 2014), Exhibit 1-D to SPS Declaration, p . 3O; Notice of Default and (continued .- ) Mrs . Kormanik on February 7 , 2018 .30 The Trustee therefore complied with the Texas Property Code 's notice requirements , and the Kormaniks were given sufficient time to cure the default . Neither Plaintiff nor Mrs . Kormanik allege that they are members of the military . Because the Trustee has presented sufficient evidence to satisfy the requirements for an order of foreclosure under the Texas Property Code, the Trustee's request for a judgment authorizing foreclosure will be granted . The Trustee is therefore entitled to summary judgment on its counterclaim against Plaintiff and on its third party claim against Mrs . Kormanik . IV . Conclusion and Order For the reasons exp lained above , no genuine issues of fact remain w ith respect Petition. the allegations The Trustee entitled to summary judgment on Plaintiff's claim for declaratory relief . presented sufficient evidence that authorizing foreclosure . summary judgment on Plaintiff 's Original The Trustee has also entitled to a judgment The Trustee is therefore entitled to counterclaim against Plaintiff and its third party claim against Mrs . Kormanik . M l- .continued) Intent to Accelerate (January 4, 20182, Exhibit l-F to SPS Declaration , Docket Entry No . 14 -1, p . 42 . 3Osee Notice of Acceleration , Exh ibit l-G to SPS Declaration , Docket Entry No . 14-1, p . 45 . Defendant's Motion for Summary Judgment on all Counterclaims and Third Party Claims (Docket Entry No . GRANTED . The Trustee's proposed Claims, is Final Judgment and Order of Foreclosure (Docket Entry No . 14-3) will be entered . SIGNED at Houston , Texas , on this the 3rd day of July , 2019 . f SIM LAKE UNITED STATES DISTRICT JUDGE
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