Felder v. The Bank of New York Mellon f/k/a The Bank of New York, as Trustee for The Certificateholders, CWABS, Inc., Asset Backed Certificates, Series 2007-2 et al, No. 4:2013cv00282 - Document 29 (S.D. Tex. 2013)

Court Description: MEMORANDUM OPINION AND ORDER granting 23 MOTION for Summary Judgment , denying 14 First MOTION to Remand, granting 27 MOTION to Amend. (Signed by Judge Sim Lake) Parties notified. (aboyd, 4)

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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION LARRY FELDER, § § § § § Plaintiff, v. COUNTRYWIDE HOME LOANS, BANK OF AMERI CA LOAN SERVICING, LP, AMERICA WHOLESALE LENDER, BAC HOME SERVICING LP, THE BANK OF NEW YORK MELLON, and WEST & ASSOCIATES LLP, AS SUBSTITUTE TRUSTEE, Defendants. § § § § § § § § § § § CIVIL ACTION NO. H-13-0282 MEMORANDUM OPINION AND ORDER Plaintiff Larry Felder brought this action against defendants Countrywide Home ("Countrywide") i Loans Inc. d/b/a America's Wholesale Lender Bank of America, N. A., successor by merger to BAC Home Loans Servicing LP ("Bank of America") i The Bank of New York Mellon, as Trustee for the Certificateholders, CWABS, Inc., Asset Backed Certificates, Series 2007-2 "Lender Defendants") i ("BONY Mellon") and West & Associates, LLP (collectively, ("West") in the 151st Judicial District Court of Harris County, Texas, where it was filed under Cause No. 2011-38427. to this court.l BONY Mellon removed the action Pending before the court are Plaintiff's Motion to lDefendants Countrywide, Bank of America, and West consented to the removal. Consent to Removal, Exhibit C to Notice of Removal, Docket Entry No. 1-5. Remand Cause Remand") of Action Under (Docket Entry No. U. S. C. 28 14) § 1447 (c) ("Motion to Lender Defendants I Summary Judgment (Docket Entry No. 23) I Motion and Plaintiffls Motion for I Leave to File First Amended Complaint ("Motion to Amend") Entry No. 27). (Docket For the reasons explained below l Felderls Motion to Remand will be denied and Lender Defendants I l Felderls Motion to Amend will be granted l Motion for Summary Judgment will be granted. I . A. for Background Factual Allegations In January of 2007 Felder financed the purchase of a home with a mortgage loan. 2 Felder executed a $225 600 Adjustable Rate Note 1 in favor of Americals Wholesale Lender 3 and secured the Note with a Deed of Trust on the property. 4 Lender as America s Wholesale I Electronic Registration Systems The Deed of Trust identified the Lender and stated that Mortgage ("MERS") was "acting solely as a nominee for Lender and Lenderls successors and assigns" and was "a 2Plaintiff l s Amended Original Petition l Application for Temporary Restraining Order and Request for Temporary Injunction ("Amended Original Petition") Exhibit A to Notice of Removal Docket Entry No. 1-1 p. 35 ~ 15; Lender Defendants l Motion for Summary Judgment l Docket Entry No. 23 p. 9 ~ 3; Plaintiffls First Amended Complaint attached to Motion to Amend Docket Entry No. 27-21 p. 5 ~ 15. (Page citations are to the pagination imprinted at the top of the page by the federal courtls electronic filing system.) I I 1 1 I I 3Adjustable Rate Note Exhibit B to Plaintiffls First Amended Complaint attached to Motion to Amend Docket Entry No. 27-10. l I I 4Deed of Trustl Exhibit L to Complaint Docket Entry No. 27-20. I -2- Plaintiffls First Amended beneficiary under this Security Instrument. ,,5 Felder's mortgage was assigned to BONY Mellon in August of 2010. 6 Between 2007 and 2010 Felder received numerous notices that he was in default 7 and was offered at least three loan modifications. B Felder's payment history and the effect of each proposed loan modification are discussed in further detail in § IV.B.1 below. West was appointed as Substitute Trustee in July of 2010. 9 West sent Felder a Notice of Acceleration and Sale on May 16, 2011. 10 BONY Mellon purchased the property at the substitute trustee's sale on June 7, 2011, for $229,500. 11 SId. at 2. 6Assignment of Mortgage, Exhibit A- 5 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-6. 7Notices of Default, Exhibit A-6 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-7. BOctober 23, 2008, Correspondence from Countrywide to Felder Re: Loan Modification ("October 2008 Loan Modification Correspondence"), Exhibit C to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-11; April 3, 2009, Correspondence from Countrywide to Felder Re: Proposed Loan Modification ("April 2009 Loan Modification Correspondence"), Exhibit D to Amended Original Petition (Exhibit A to Notice of Removal), Docket Entry No. 1-2, pp. 7-10; November 16, 2009, Correspondence from Bank of America to Felder Re: Loan Modification ("November 2009 Loan Modification Correspondence"), Exhibit A-5 to Plaintiff's First Amended Complaint, Docket Entry No. 27-8. 9Appointment of Substitute Trustee, Exhibit A-12 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-13. lONotice of Acceleration and Sale, Exhibit I to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-17; Notice of Acceleration and Sale, Exhibit A-13 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-14. llSubstitute Trustee's Deed, Exhibit K to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry (continued ... ) -3- B. Procedural History Felder filed his First Original Petition in the 151st Judicial District Court of Harris County, Texas, on June 28, 2011, naming Countrywide, Bank of America, and West as defendants. 12 The state court dismissed Felder's suit for want of prosecution on May 16, 2012. 13 Felder filed a June 10, 2012.14 Motion to Reinstate Case on Docket on The state court granted the motion on July 31, 2012. 15 On August 24, 2012, Felder filed his Amended Petition. 16 On November 28, 2012, Countrywide and Bank of America filed a special continued) No. 27-19; Substitute Trustee's Deed, Exhibit A-14 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-15. 11 ( ¢ ¢ ¢ 12Plaintiff's First Original Petition, Exhibit A to Notice of Removal, Docket Entry No. 1-3, p. 94; Plaintiff's First Original Petition, Exhibit A to Lender Defendants' Opposition to Plaintiff's Motion to Remand, Docket Entry No. 26-1. 13Final Order of Dismissal, Exhibit A to Notice of Removal, Docket Entry No. 1-3, p. 60; Final Order of Dismissal, Exhibit B to Lender Defendants' Opposition to Plaintiff's Motion to Remand, Docket Entry No. 26-2. 14Motion to Reinstate Case on Docket, Exhibit A to Notice of Removal, Docket Entry No. 1-3, p. 48. p. 150rder, Exhibit A to Notice of Removal, Docket Entry No. 1-3, 46. 16Plaintiff's Amended Petition, Exhibit A to Notice of Removal, Docket Entry No. 1-3, p. 39. -4- exception1 7 and their Original Answer. 18 The state court sustained the Special Exception on December 17, 2012. 19 On January Petition. 20 petitions, 7, Felder 2013, In addition to Felder named the BONY filed his defendants Mellon as Amended named a Original in his prior defendant.21 On January 11, 2013, the state court issued a temporary restraining order against all defendants restraining them from "selling real property which is the subject matter of this lawsuit as well as from taking any legal action to evict the Plaintiff and any other occupants from the aforementioned property or enforce a writ of possession regarding the aforementioned property. "22 The Lender Defendants were served with Felder's Amended Original Petition on 17Defendant's Special Exception to Plaintiff's Second Amended Petition ("Special Exception"), Exhibit A to Notice of Removal, Docket Entry No. 1-3, p. 15i Special Exception, Exhibit D to Lender Defendants' Opposition to Plaintiff's Motion to Remand, Docket Entry No. 26-4. 180riginal Answer of Defendants Countrywide Home Loans and BAC Home Servicing LP, Exhibit A to Notice of Removal, Docket Entry No. 1-3, p. 13. 190rder Sustaining Defendants' Special Exceptions, Exhibit A to Notice of Removal, Docket Entry No. 1-3, p. 11i Order Sustaining Defendants' Special Exceptions, Exhibit E to Lender Defendants' Opposition to Plaintiff's Motion to Remand, Docket Entry No. 26-5. 2°Amended Original Petition, Exhibit A to Notice of Removal, Docket Entry No. 1-1, p. 35. 21Id. 22Temporary Restraining Order and Order Setting Hearing for Temporary Injunction, Exhibit A to Notice of Removal, Docket Entry No. 1-1, p. 16. -5- January 22, 2013. 23 On January 31, 2013, West filed its Answer and Verified Denial. 24 BONY Mellon filed its Notice of Removal on February 5, 2013. 25 On February 27, Denial. 26 2013, Felder filed a response to West's Verified On March 7, 2013, Felder filed his Motion to Remand. 27 A settlement conference was held before the magistrate judge on June 24, 2013. 28 On August 22, 2013, the Lender Defendants filed their Motion for Summary Judgment. 29 October 23, 2013. 30 Felder filed his Response on The Lender Defendants filed their Reply on October 29, 2013. 31 23Services, No. I-I, p. 4. Exhibit A to Notice of Removal, Docket Entry 24Defendant West & Associates, LLP' s Answer and Verified Denial ("Verified Denial"), Supplemental to Document I, Exhibit A Part 3, Docket Entry NO.2. 25Notice of Removal, Docket Entry No.1. 26Plaintiff's First Supplemental Petition Responding to Original Answers and Verified Denials Pursuant to Texas Property Code § 51.007 of Defendant West & Associates, LLP ("First Supplemental Petition"), Docket Entry Nos. 9-10. 27Motion to Remand, Docket Entry No. 14. 28Minute Entry for Proceedings Held Before Magistrate Judge Nancy K. Johnson, Docket Entry No. 22. 29Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23. 30Plaintiff's Memorandum in Response to Lender Defendant's Motion for Summary Judgment Pursuant to Fed. R. Ci v. P. 56 (A) ("Felder's Response"), Docket Entry No. 24. 31Bank of America's Reply, Docket Entry No. 25. -6- On November 11, 2013, the Lender Defendants Opposition to Plaintiff's Motion to Remand. 32 Felder filed his Motion to Amend. 33 filed their On December 3, 2013, The Lender Defendants filed their Opposition to Plaintiff's Motion to Amend on December 4, 2013. 34 II. In his Motion Felder's Motion to Remand to Remand, Felder argues appropriate in this case for three reasons: Notice of Removal was not timely filed; that remand is BONY Mellon's (1) (2) complete diversity is lacking; and (3) the amount in controversy is less than $75,000. 35 For the reasons explained below, Felder's Motion to Remand will be denied. A. BONY Mellon's Notice of Removal Was Timely Filed Felder argues that removal was improper because BONY Mellon filed its Notice of Removal more than thirty days after Bank of America and Countrywide were served with process in the state court proceedings. 36 Felder cites Brown v. Demco, 32Lender Defendants' Opposition Remand, Docket Entry No. 26. to Inc., 792 F.2d 478, Plaintiff's Motion to 33Motion to Amend, Docket Entry No. 27. 34Lender Defendants' Opposition to Plaintiff's Motion to Amend, Docket Entry No. 28. ~~ 35Motion to Remand, 17-19. 36Id. at 7 ~~ Docket Entry No. 20-21. -7- 14, p. 3 ~ 8, pp. 6-7 481-82 (5th Cir. 1986), for the proposition that "the failure of the first-served defendant to file a notice of removal within 30 days of service prevents all later-served defendants from removing the action. ,,37 However, as noted by the Lender Defendants, Congress adopted the last-served-defendant rule for all actions commenced on or after January 6, 2012. 38 Federal Courts Jurisdiction and Venue Clarification Act of 2011, Pub. Stat. 758, 760, 764-65 L. No. 112-63 (amending 28 U.S.C. § 103, §§ 1446) i 205, 125 Benavides v. Sun Loan P'ship No.3, Ltd., No. 2:13-CV-00084, 2013 WL 2458625, at *2-*4 (S.D. Tex. June 6, 2013). Under Texas law the addition of a new party commences a new action against that party. See Benavides, 2013 WL 2458625, at *4 ("[S]uit is 'commenced' at the time the original pleading is first filed in a court of competent jurisdiction unless there are special circumstances that prevent the relation-back, such as the addition of a new party. Under those circumstances, the new pleading commences a new action as to that new defendant.") . version of § The amended 1446 provides that "[e]ach defendant shall have 30 days after receipt by or service on that defendant of the initial pleading or summons U.S.C. § 1446(b) (2) (B). 37Id. at 7 ~ to file the notice of removal." 28 Furthermore, "[i]f defendants are served 21. 38Lender Defendants' Opposition to Remand, Docket Entry No. 26, p. 6 ~ 22. -8- Plaintiff's Motion to at different times, and a later-served defendant files a notice of removal, any earlier-served defendant may consent to the removal even though that earlier-served initiate or consent to removal." defendant Id. § did not previously 1446 (b) (2) (C) . Felder first named BONY Mellon as a defendant in his Amended Original Petition filed on January 7, 2013. 39 BONY Mellon received service of process on January 22, 2013. 40 Notice of Removal on February 5, 2013,41 within thirty days of BONY Mellon filed its service, and all earlier-served defendants consented to removal. 42 Accordingly, BONY Mellon's Notice of Removal was timely filed. B. West was Improperly Joined BONY Mellon argues that complete diversity exists because West was improperly joined. 43 Denial pursuant February 27, to 2013, On January 31, 2013, West filed a Verified Texas Property Code § 51.007(a) .44 On Felder filed his First Supplemental Petition 39Amended Original Petition, Exhibit A to Notice of Removal, Docket Entry No. I-I, p. 35. 4°Services, No. I-I, p. 4. Exhibit A to Notice of Removal, Docket Entry 41Notice of Removal, Docket Entry No.1. 42Consent to Removal, Exhibit C to Notice of Removal, Docket Entry No. 1-5. 43Notice of Removal, Docket Entry No. I, pp. 3-4 44Verified Denial, Supplemental Part 3, Docket Entry No.2. -9- ------_._---.------_. to Document I, ~~ 5-10. Exhibit A responding § to West's Verified Denial. 45 See Under the Texas Property Code, 51. 007 (b) . Tex. Prop. Code "[i]f a respondent files a timely verified response to the trustee's verified denial, the matter shall be set for hearing" and "[t]he court shall dismiss the trustee from the suit or proceeding without prejudice if the court determines that the trustee is not a necessary party." § 51.007(d). Because BONY Mellon does not rely on 51.007 for its § claim of improper joinder, however, a hearing is unnecessary. Hearn v. Deutsche Bank Nat. 6079460, at *3 (N.D. Tex. Trust Co., Nov. 18, 3:13-CV-2417-B, 2013) Id. See 2013 WL ("The Court need not decide this verified denial issue in order to rule on Defendants' claims of Defendants improper joinder, are dismissed not however, under because § even 51.007 (c), if there Trustee is no reasonable basis for predicting that Hearn will be able to recover against Trustee Defendants." (citing Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004) (en banc)). For the reasons explained below, Felder has failed to allege a plausible cause of action against West and West, is therefore improperly joined. 1. Applicable Law "Under 28 U.S.C. § 1441(a) any state court civil action over which the federal courts would have original jurisdiction may be removed from state to federal court." Gasch v. Hartford Accident Indem. Co., 491 F.3d 278, 281 (5th Cir. 2007). & Federal courts have 45First Supplemental Petition, Docket Entry Nos. 9-10. -10- --------------- ""--_.__._--_._-------- original jurisdiction over "all civil actions where the matter in controversy exceeds the interest and costs, States." 28 U.S.C. sum or value of 1332 (a) (1). § be from diverse the exclusive of citizens of different and is between complete diversity -- that is, must $75,000, Diversity jurisdiction requires the citizenship of each plaintiff citizenship of Caterpillar Inc. v. Lewis, 117 S. Ct. 467, 472 each defendant. (1996). Removal jurisdiction depends on the plaintiff's state court pleadings at the time of removal. S. Ct. 347, 349 (1939) Co., 44 F.3d 256, 264 i Pullman Co. v. Jenkins, 59 Cavallini v. State Farm Mutual Auto Ins. The doctrine of improper (5th Cir. 1995) joinder ensures that the presence of an improperly joined, nondiverse defendant does not defeat premised on diversity. federal removal jurisdiction Borden v. Allstate, 589 F.3d 168, 171 (5th The court may ignore an improperly joined , non-diverse Cir. 2009) defendant in determining subject matter jurisdiction. Smallwood, 385 F.3d at 572. A removing party attempting to prove improper joinder carries a heavy burden. Witter, Great Plains Trust Co. v. 313 F.3d 305, 312 (5th Cir. 2002). Morgan Stanley Dean To establish that a non-diverse defendant has been improperly joined in order to defeat diversity "' (1) jurisdiction actual fraud the removing party in the pleading of must prove jurisdictional either facts or (2) an inability of the plaintiff to establish a cause of action against the non-diverse party in state court.'" -11- Smallwood, 385 F.3d at 573 (quoting Travis v. Irby, 326 F.3d 644, 646-47 (5th Cir. 2003)). Only the second method is at issue in this case. Under this second type of improper joinder the court must determine "whether the defendant has demonstrated that there is no possibility of recovery by the plaintiff against an in-state [or non-diverse] defendant, which stated differently means that there is no reasonable basis for the district court to predict that the plaintiff might be able to recover against an in-state diverse] defendant." Smallwood, 385 F.3d at 573. [or non- A "reasonable basis" requires more than a theoretical possibility of recovery. Ross v. Citifinancial, Inc., 344 F.3d 458, 462 (5th Cir. 2003). Whether the plaintiff has alleged a valid cause of action "depends upon plaintiff [' s] Griggs v. is tied to the factual fit between allegations and the pleaded theory of State Farm Lloyds, Accordingly, defeat and 181 F.3d 694, 701 the recovery." (5th Cir. 1999). a defendant can establish diversity -- and thereby remand by showing that the plaintiff's state court petition fails to allege "specific actionable conduct" sufficient to support a cause of action against a non-diverse defendant. Id. A mere formulaic recitation of the elements of a cause of action asserted against a non-diverse defendant is not sufficient under this standard. Moore v. State Farm Mut. Auto. Ins. Co., No. H-12-1539, 2012 WL 3929930, at *4 (S.D. Tex. Sept. 6, 2012). In deciding whether a party was improperly joined unchallenged factual allegations are taken into account -12- --------- all in the light most favorable to the plaintiff, Smallwood, 385 F.3d at 575; and all contested factual issues and ambiguities of state law are resolved in favor of the plaintiff. Gasch, 491 F.3d at 281. The existence of a single valid cause of action against a non-diverse defendant requires remand of the entire case to state court. Gray v. Beverly Enterprises-Mississippi, (5th Inc., 390 F.3d 400, 412 Cir. 2004). 2. Analysis The Lender Defendants argue that Felder cannot recover against West because Felder sued West "solely in [its] capacity substitute trustee under the deed of trust, and therefore, is not a necessary party. 1/46 alleges at least six as [West] Felder's Amended Original Petition substantive declaratory and injunctive relief. 47 causes of However, action and seeks the only factual allegations made against West have to do with its alleged failure to provide proper notice prior to the substitute trustee's sale as required by the Deed of Trust and the Texas Property Code. 48 A trustee's breach of its duties under the Deed of Trust and the Texas Property Code, while not an independent tort under Texas 46Notice of Removal, Docket Entry No. I, p. 4 ~ 9; see also Lender Defendants' Opposition to Plaintiff's Motion to Remand, Docket Entry No. 26, pp. 12-15 ~~ 39-46. 47Amended Original Petition, Exhibit A to Notice of Removal, Docket Entry No. I-I, p. 35; see also Motion to Remand, Docket Entry No. 14, p. 2 ~ 3. 48Amended Original Petition, Exhibit A to Notice of Removal, Docket Entry No. I-I, pp. 40-41 ~~ 26, 31. -13- law, may be stated as a claim for wrongful foreclosure. Marsh v. Wells Fargo Bank, N.A., 760 F. Supp. 2d 701, 708 (N.D. Tex. 2011). However, "trustees are not liable \ for any good faith error resulting from reliance on any information in law or fact provided by the mortgagor or mortgagee or their respective attorney, agent, or representative or other third party.'" Bank, Feb. NA, 17, No. 4:11-CV-832, 2012) (quoting 2012 Tex. WL 844520, Prop. Code addressing the good faith element of generally held that 51.007 (f) § Wegener v. Wells Fargo § at (E.D. Tex. 51.007(f)). § *3 In 51.007(f), imposes a courts have substantive pleading requirement on a plaintiff seeking to recover against a substitute trustee. See, e.g., Leal v. Bank of New York Mellon, No. C-12-265, 2012 WL 5465978, provisions of for § § dismissing at *5 (S.D. Tex. Oct. 22, 2012) ("Unlike the 51.007(a)-(e), which provide a procedural mechanism claims against trustees where appropriate, 51.007 (f) imposes a substantive pleading requirement. in order to satisfy § Therefore, 51.007(f), a plaintiff must allege bad faith on the part of a substitute trustee named in the action." (internal citations omitted)). Even a generous reading of Felder's Amended Original Petition does not reveal any factual would suggest bad faith on the part of West. Felder Supplemental supplements Petition. 49 his claims However, against because allegations that See id. West in his First "federal courts base decisions about subject matter jurisdiction after removal on the 49First Supplemental Petition, Docket Entry Nos. 9-10. -14- plaintiff's complaint as it existed at the time that the defendant filed the removal petition," determination Kidd v. Southwest Airlines, Co., 891 F.2d 540, 546 (5th see also Cavallini, of the Original removal. i a Amended is 1990) to Felder's Petition Cir. relevant only 44 F.3d at 264 propriety (" [A] of complaint amended post-removal cannot divest a federal court of jurisdiction" (citing Pullman, 59 S. Ct. at 348-49)). considered Felder's First Nonetheless, the court has Supplemental Petition insofar as it clarifies the basis on which Felder seeks to hold West liable in his Amended Original Petition. Felder argues that West had a duty to "act with absolute impartiali1::Y and . . . fairness to all concerned," but he pleads no facts that would give rise to an inference of bad faith. 50 In addition to his allegations that West failed to provide proper notice in accordance with the Deed of Trust and the Texas Property Code, Felder argues that West is an "indispensable" party because the state court enj oined i t " in the midst of an impending foreclosure" and that a finding of improper joinder would allow West to "post again for a subsequent sale or forcible detainer.,,51 However, Felder offers no authority, and the court is aware of none, suggesting that West could take any adverse action against Felder on behalf of the Lender Defendants Defendants were enjoined from taking themselves. 50Id. at 7 51Id. ~ ~ 20. 19. -15- that the Lender See Marsh, 760 F. Supp. 2d at 709. Accordingly, the court concludes that Felder has failed to state a plausible cause of action against West and that West was therefore improperly joined. C. The Amount in Controversy Exceeds $75,000 Felder argues that the amount in controversy does not exceed $75, 000 because he has negative equity in the property and is seeking solely to enforce his right of possession. 52 The Lender Defendants argue that the amount in controversy should be measured by the value of the property. 53 1. Applicable Law Removal jurisdiction depends on the plaintiff's state court pleadings at the time of removal. Cavallini, 44 F.3d at 264. Pullman Co., 59 S. Ct. at 349; "When the plaintiff's complaint does not allege a specific amount of damages, the removing defendant must prove by a preponderance of the evidence that the amount in controversy exceeds [the jurisdictional amount]." Boeing Co., 11 F.3d 55, 58 (5th Cir. 1993). may meet its burden in two ways. proper if 'it is facially The removing defendant Garcia v. Koch Oil Co. of Texas Inc., 351 F. 3d 636, 639 (5th Cir. 2 003). be De Aguilar v. "First, jurisdiction will apparent' from complaint that their 'claims are likely above the plaintiffs' [$75, 000] .'" 52Motion to Remand, Docket Entry No. 14, pp. 12-14 53Lender Defendants' Opposition to Plaintiff's Remand, Docket Entry No. 26, pp. 11-12 ~~ 36-38. -16- ~~ Id. 37-39. Motion to (quoting Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995)). However, "[i]f the value of the claims is not apparent, then the defendants 'may support federal jurisdiction by setting forth the [either] facts in the removal petition [or] by affidavit -- that support a finding of the requisite amount." (quoting Allen, 63 established, a by F.3d at 1335) preponderance, Once that "[t] he federal Id. defendant has jurisdiction is '[i]t must appear to a.legal certainty that the warranted [, ] claim is really for less than the jurisdictional amount to justify dismissal.'" Cir. 1995) De Aguilar v. Boeing Co., 47 F.3d 1404, 1412 (5th (quoting St. Paul Mercury Indem. Co. v. Red Cab Co., 58 S. Ct. 586,590 (1938)). 2. Analysis In his Amended Original Petition Felder alleges at least six substantive causes of action in addition to seeking declaratory and injunctive relief. 54 relief, "In actions seeking declaratory or injunctive it is well established that the amount in controversy is measured by the value of the object of the litigation." Hunt v. Washington State Apple Adver. Comm'n, 97 S. Ct. 2434, 2443 (1977). "To put it another way, the amount in controversy, in an action for declaratory or injunctive relief, is the value of the right to be protected or the extent of the injury to be prevented." Leininger 54Amended Original Petition, Exhibit A to Notice of Removal, Docket Entry No. 1-1, p. 35; see also Motion to Remand, Docket Entry No. 14, p. 2 ~ 3. -17- v. Leininger, 705 F.2d 727, 729 (5th Cir. Accordingly, 1983). whether the amount in controversy in this case exceeds $75,000 depends upon the "value of the right to be protected or the extent of the injury to be prevented" by the relief requested in Felder's Amended Original Petition. Id. "The amount in controversy is measured from the perspective of the plaintiff." Burr v. JPMorgan Chase Bank, N.A., No. 4:11-CV- 03519,2012 WL 1016121, at *2 Garcia, 351 F.3d at 640 n.4)). amount in (S.D. Tex. Mar. controversy when Plaintiff's complaint possession."s5 is 23, 2012) (citing Felder argues that "there is no injunctive to relief preserve [is] sought Plaintiff's and right of However, in each of the cases that Felder cites to support his argument the plaintiff had brought a forcible detainer action to evict a non-paying occupant. Trust Co. v. Kramer, No. (D. Ariz. Mar. 31, 2010) No. 3-08-CV-0630-K, i See Deutsche Bank Nat. CV-10-265-PHX-DGC, 2010 WL 1278867 Bank of New York Trust Co. N.A. v. aIds, 2008 WL 2246942 (N.D. Tex. May 30, 2008) i JPMorgan Chase Bank, N.A. v. Coleman, No. G-06-688, 2007 WL 655629 (S.D. Tex. Feb. 27, 2007). non-paying occupant, possession he is and Here, Felder alleges that he is the he is seeking much more seeking the entire bundle of than mere rights that constitute ownership of property. In his "Defendants Amended have Original jointly and Petition severally Felder conspired to ~ 38. 55Motion to Remand, Docket Entry No. 14, p. 13 -18- alleges that deprive [Felder] of [his] Homestead." 56 right, title, and interest He seeks declaratory relief in and to the "[s] etting aside the foreclosure" and" [i] njunctive relief against Defendants (temporary and permanent) prohibiting interference with title or occupancy of the Homestead.,,57 [his] Therefore, possession, from Felder's perspective, the rights to be protected are his rights as owner of the property. See, e.g., Martinez v. BAC Home Loans Servicing, LP, 777 F. Supp. 2d 1039, 1049 (W.D. Tex. 2010) bundle of enforce or property rights protect that through [the this ("At least one of the plaintiff] litigation peacefully possess and enjoy his home. . . . is is seeking to right to his From [the plaintiff's] perspective, then, it is the whole title and its 'bundle of rights' at issue." (quoting No. 3:08-CV-695-WKW, Mapp v. Deutsche 2009 WL 3664118, Bank at *3 Nat. Trust (M.D. Ala. Oct. Co., 28, 2009))). Felder's ownership interest in the property is most accurately reflected by the property's fair market value. See Farkas v. GMAC Mortgage, L.L.C., No. 12-20668, 2013 WL 6231114, at *2 Dec. 2, 2013) (5th Cir. ("In actions enjoining a lender from transferring property and preserving an individual's ownership interest, it is the property itself that is the object of the litigation; the value 56Amended Original Petition, Exhibit A to Notice of Removal, Docket Entry No. 1-1, p. 42 ~ 33. 57Id. at 47 ~~ 62-64. -19- of that property Nationstar Mortg. 2009) represents LLC v. the Knox, amount in controversy."); 351 F. App'x 844, 848 (5th Cir. ("' [W]hen the validity of a contract or a right to property is called into question in its entirety, the value of the property controls the amount Professional Ins. in Corp., controversy.'" 296 F.2d 545, (quoting 547-48 Waller (5th Cir. v. 1961)); Morlock, L.L.C. v. JPMorgan Chase Bank, N.A., No. H-13-0734, 2013 WL 5781240, at *6 (S.D. ownership interest in exclusive possession, Tex. the is Property's fair market [Plaintiff] could expect Oct. 25, Property, most value, to 2013) including accurately as (" [Plaintiff]'s that receive if reflected is it its the sold right of by the amount its that ownership interest on the open market."); Martinez, 777 F. Supp. 2d at 1051 (holding that when a "plaintiff seeks both a preliminary and permanent injunction to prevent the defendant from foreclosing on his home the fair market value of his home is the proper measure of the amount in controversy"); M£pQ, 2009 WL 3664118, at *3 ("Ownership, title and possession, thus, are not only the objects of this lawsuit, but similarly represent the value of the rights sought foreclosure. to be protected by an injunction enjoining the In monetary terms, these benefits, objects and rights are best measured by the value of the home citations omitted)). -20- itself." (internal It is undisputed that the fair market value of the property exceeds $75,000. 58 Indeed, Felder asserts in his Amended Original Petition that "the fair market value of the [] property is in excess Accordingly, of $250,000.00.,,59 protected" by Felder's action "the value of the right to be for declaratory and injunctive relief, and thus the amount in controversy, exceeds $75,000; and removal was proper. III. Felder December 3, Leininger, 705 F.2d at 729. Felder's Motion for Leave to Amend moved 2013, to file in order his First "to address Amended Complaint on issues and allegations pointed out in this Court and in the previous state court petition at the time of removal. ,,60 Felder's Motion to Amend asserts that his First Amended Complaint "removes allegations and claims based on the Home streamlines Affordable allegations, specificity of facts against Defendants.,,61 Modification in some and evidence Program cases, as to and the ( "RAMP" ) offers and additional remaining claims Thus, Felder has represented that his First Amended Complaint neither asserts any new claims nor pleads any new 58Id. at 38 , 7; Harris County Appraisal District Real Property Account Information, Exhibit B to Notice of Removal, Docket Entry No. 1-4. 59Amended Original Petition, Exhibit A to Notice of Removal, Docket Entry No.1-I, p. 38 , 7. 6°Motion to Amend, Docket Entry No. 27, p. 1. 61Id. -21- .-----.,-- - - - - theory of recovery not already addressed in his Amended Original Petition. The Lender Defendants argue in their Opposition to Plaintiff's Motion to Amend that Felder has "attempt [ed] to avoid summary judgment by moving to amend his petition some ten months after removal and over three months after Lender Defendants filed their motion for summary judgment.,,62 The Lender Defendants argue that "Felder's proposed amended petition does not break any new legal ground, but merely seeks to cloud the water with -- among other things -- new unsubstantiated allegations concerning his payment history, securitization and un-related litigation involving Lender Defendants. ,,63 A party may amend its pleading once as a matter of course within twenty-one days or twenty-one days after service of a motion under Rule 12(b), whichever is earlier. Fed. R. Civ. P. 15(a). of serving it In all other cases a party may only amend its pleadings with the written consent of the opposing party or with the court's leave. Fed. R. Civ. P. 15 (a) (2) . Court s "freely give leave [to amend] when justice so requires." Civ. P. 15(a) (2). shoul d Fed. R. However, "[w]hether such an amendment should be granted is within the district judge's discretion." S.A. P.A. v. United States, 911 F.2d 1146, 1150 Overseas Inns (5th Cir. 1990). 62Lender Defendants' Opposition to Plaintiff's Motion to Amend, Docket Entry No. 28, p. 1 ~ 1. 63Id. -22- - ------- ------------ "In exercising its discretion, the district court may consider such factors as 'undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc." 1150-51 (quoting Foman v. Davis, 83 S. Ct. 227, 230 Id. at (1962)). The Lender Defendants are concerned that "requiring them to reassert new summary "duplication of effort judgment [and] argument" would result in a would also be a waste of judicial resources" because " [a]nother dispositive motion would likely rely on the same summary facts judgment and legal mot ion. ,,64 analysis employed However, the in the pending parties agree that Felder's First Amended Complaint does not assert any new claims or plead a theory of recovery not Amended Original Petition. 65 already addressed in Felder's Indeed, the Lender Defendants argue that Felder's "claims cannot survive summary judgment for all of the reasons stated in Lender Defendants' pending motion for summary judgment. ,,66 In light of the foregoing, Felder's Motion to Amend will be granted, and the court will analyze the Lender Defendants' 64Id. at 4 ~ 7. 65See Motion to Amend, Docket Entry No. 27, p. 1; Lender Defendants' Opposition to Plaintiff's Motion to Amend, Docket Entry No. 28, p. 1 ~ 1, p. 4 ~~ 7-10. 66Lender Defendants' Opposition to Plaintiff's Motion to Amend, Docket Entry No. 28, p. 4 ~ 9; see also id. at 1 ~ 1 ("[Felder's] proposed amended petition fails to raise any claims that would survive the pending motion for summary judgment.") . -23- pending Motion for Summary Judgment in the context of Felder's First Amended Complaint. IV. The Lender Defendants' Motion for Summary Judgment Felder's First Amended Complaint alleges six substantive causes of action in addition to seeking declaratory and injunctive relief. Felder formulates his substantive causes of action as claims based on (1) breach of contract, alleged lack of standing to foreclose, (2) the Lender Defendants' (3) fraud, (4) interference with existing contract, (5) quiet title, and (6) slander of title. 67 The Lender Defendants have moved for summary judgment on all of Felder's claims. 68 67As noted in § III above, Felder has abandoned any claim based on HAMP. Motion to Amend, Docket Entry No. 27, p. 1. In addition, Felder repleads the factual allegations in his claims for wrongful foreclosure due to improper notice as claims for breach of contract and recasts his claims for wrongful foreclosure due to fraud as a common-law fraud claim. Compare Amended Original Petition, Exhibit A to Notice of Removal, Docket Entry No. I-I, pp. 44-45 ~~ 44-46, with Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-2, pp. 27-30 ~~ 87-98, pp. 32-33 ~~ 111-19. As noted in § III above, the court will analyze the Lender Defendants' Motion for Summary Judgment in the context of Felder's First Amended Complaint. 68Felder has objected to the Lender Defendants' Exhibits A-I through A-12 on the basis that "they are hearsay and have not been properly authenticated." Felder's Response, Docket Entry No. 24, p. 3 ~ 6. Felder argues that Jane Cashel's affidavit is insufficient to authenticate the documents because "Ms. Cashel fails to describe herself as a custodian of records." Id. However, as noted by the Lender Defendants, such business records may be authenticated "by the testimony of the custodian or another qualified witness." Fed. R. Evid. 803. The Lender Defendants argue that Cashel is a qualified witness. Bank of America's Reply, Docket Entry No. 25, pp. 5-6 ~~ 12-15. "A qualified witness is one (continued ... ) -24- A. Standard of Review Summary judgment is appropriate if the movant establishes that there is no genuine dispute about any material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). Disputes about material facts are genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 106 S. Ct. 2505, 2510 (1986) . The moving party is entitled to judgment as a matter of law if "the nonmoving party has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof." 2552 Celotex Corp. v. Catrett, 106 S. Ct. 2548, (1986). continued) who can explain the system of record keeping and vouch that the requirements of Rule 803(6) are met; the witness need not have personal knowledge of the record keeping practice or the circumstances under which the obj ected to records were kept." United States v. Box, 50 F.3d 345, 356 (5th Cir. 1995) (citing United States v. Iredia, 866 F.2d 114, 119-20 (5th Cir. 1989)). Cashel's affidavit describes Bank of America's system of record keeping and vouches that the requirements of Rule 803(6) are met. Declaration of Jane Cashel, Exhibit A to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-1, pp. 1- 3 ~~ 1- 3, p. 5 ~ 9. Accordingly, Cashel is a qualified witness, and Felder's obj ection to Lender Defendants' Exhibits A-I through A-12 is DENIED. Felder's other objections based on Cashel's "fail [ure] to prove herself up as a custodian of records for Bank of America" and her "interpretation of documents, which have not been properly authenticated" are also DENIED. Felder's Response, Docket Entry No. 24, pp. 3-4 ~~ 7-8. The Lender Defendants have objected to Exhibits C and E of Felder's Response. Bank of America's Reply, Docket Entry No. 25, p. 11 ~ 27. Because the court does not rely on either exhibit in reaching its conclusions, the Lender Defendants' objections are DENIED AS MOOT. 68 ( ¢ ¢ ¢ -25- A party moving for summary judgment "must \ demonstrate the absence of a genuine issue of material fact,' but need not negate the elements of the nonmovant' s case." 37 F.3d 1069, 1075 (5th Cir. 1994) Little v. Liquid Air Corp. , (en banc) (per curiam) (quoting "If the moving party fails to meet Celotex, 106 S. Ct. at 2553). this initial burden, the motion must be denied, regardless of the nonmovant's response." this burden, Id. If, however, the moving party meets "the nonmovant must go beyond the pleadings" and produce evidence that specific facts exist over which there is a genuine 2553-54) issue for trial. Id. (citing Celotex, 106 S. Ct. at The nonmovant "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., 106 S. Ct. 1348, 1356 (1986) . In reviewing the evidence "the court must draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence." Sanderson Plumbing Prods., Inc., Ct. 120 S. 2097, Reeves v. 2110 (2000). Factual controversies are to be resolved in favor of the nonmovant, "but only when there is an actual controversy, that is, when both parties have submitted evidence of contradictory facts." Little, 37 F.3d at 1075. B. Felder's Claims for Breach of Contract Felder advances two arguments in support of his breach of contract claims. First, Felder argues that the Lender Defendants -26- "fail [ed] to follow Plaintiff's Deed of Trust requirements for acceleration of note, notice of default notice of foreclosure sale."69 cure remedies and for Second, Felder argues "that there was a contract between the parties under HAMP and BAC 70 breached the contract . . by refusing to accept further monthly payments and instead elected to foreclose on Plaintiff's Homestead on June 7, 2011."71 The Lender Defendants argue that Felder cannot maintain a cause of action for breach of contract because he was in default.72 Felder argues in his Response that the "Lender Defendant's mischaracterization of Plaintiff's mortgage defaults at inception in 2007 and erroneous payment records, which led to perpetual addon of fees is a breach of Plaintiff's contract and is a direct cause of Plaintiff's initial default which was never cured or 69Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-2, p. 27 ~ 87. 70BAC Home Loans Servicing LP. BAC was the mortgage servicer for Felder's mortgage at the time of foreclosure. See, e. g. , May 17, 2010, Notice of Default, Exhibit A-7 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-8; Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-2, pp. 30-31 ~~ 101-102. Defendant Bank of America is the successor by merger to BAC Home Loans Servicing LP. Lender Defendants' Corporate Disclosure Statement and Certificate of Interested Parties, Docket Entry No.4. 71Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-2, pp. 29-30 ~ 95. 72Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23, pp. 21-22 ~~ 33-34. -27- corrected. If 73 The Lender Defendants argue in their Reply that regardless of whether Felder was in default in 2007, he "did not make his April 1, 2009 payment until May 13, 2010, and has not made a payment since. 74 If 1. Factual Allegations Felder argues that he did not breach his obligations under either the original Note or subsequent loan modifications. 75 The court has reviewed the relevant evidence produced by the parties pertaining to Felder's payment history and modifications to the parties' obligations under the original Note. transaction history reports payment history.76 chart 2007 and 2009 to evidence his The Lender Defendants have produced a similar detailing payments account for Felder has produced and between January of adjustments 2007 to Felder's and December of mortgage 2012.77 payment entry in the produced reports contains two dates: Each the date the payment was received and the scheduled monthly payment to which 73Felder's Response, Docket Entry No. 24, p. 11 ~ 26. 74Bank of America's Reply, Docket Entry No. 25, p. 9 75Felder's Response, pp. 10-11 ~~ 23-26. Docket Entry No. 24, pp. ~ 2-3 20. ~ 3; 76Acti ve Loan Mortgage Interest Statement, Exhibit A-1 to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-4, p. 2; Active Loan Mortgage Interest Statement, Exhibit A-4 to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-7. 77Loan History Statement, Exhibit A-3 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-4. -28- it was applied. 78 The Lender Defendants argue that Felder defaulted on the original Note in 2007 and on a subsequent loan modification in 2009. 79 (a) The Felder's Alleged Default In 2007 Lender Defendants allege that Felder "immediately defaulted on The Loan[] by failing to make his first two payments when due.,,80 any Felder argues that he did not default in 2007 and that appearance that he was in default is due to the Lender Defendants' faulty recordkeeping and the Lender Defendants' failure to draft his account when his payment was due. 81 The Note states that Felder "will make [his] monthly payment on the first day of each month beginning on March 01, 2007" and that his "initial monthly payments will be in the amount of $2,222.32.,,82 u.s. Felder has produced evidence that he was enrolled in 78Id.; Active Loan Mortgage Interest Statement, Exhibit A-I to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-4, p. 2; Active Loan Mortgage Interest Statement, Exhibit A-4 to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-7. 79Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23, pp. 21-22 ~~ 33-35, p. 28 ~ 1.b, p. 29 ~ I.e; Bank of America's Reply, Docket Entry No. 25, pp. 1-2 ~ I, pp. 8-10 ~~ 19-22. 8°Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23, p. 21 ~ 34. 81Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-2, p. 6 ~ 18; Felder's Response, Docket Entry No. 24, pp. 10-11 ~ 25. 82Adjustable Rate Note, Exhibit B to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-10, p. 1. -29- ----------,-----" Countrywide's PayPlan/24 February 15, 2007. 83 automated payment service prior to Felder alleges that BAC drafted his personal bank account in February of 2007, prior to the date that his first payment was due under the Note. 84 In fact, the evidence produced by both parties appears to indicate that Felder made two payments prior to his March 1, 2007, due date. 85 The first, entirely to interest. 86 was applied entirely $900.38 on January 22, 2007, was applied The second, $1,111.16 on February 22, 2007, to principal. 87 It appears that neither payment was applied against Felder's upcoming March 1 scheduled payment, but instead applied to February 2007. 88 produced any evidence to explain the Neither party has significance of these payments. 89 83February 15, 2007, Correspondence from Countrywide to Felder, Exhibit A-2 to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-5. 84Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-2, pp. 5-6 ~ 16. 85Active Loan Mortgage Interest Statement, Exhibit A-1 to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-4, p. 2; Loan History Statement, Exhibit A-3 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-4, p. 2. 86Id. 89For instance, neither party has explained why the payments were drafted prior to the March 1, 2007, due date; why the total of the two payments ($2,011.54) does not equal a full monthly payment; (continued ... ) -30- ----_.. _._._-----_._------------- On April 2, 2007, Felder received a Notice of Default declaring that he had failed to make his March 1 and April 1 scheduled monthly payments and that he could cure his default by paying $4,555.76 before May 2, "asked BAC for an internal 2007. 90 Felder alleges that he investigation" of the matter and "continu [ed] to make his $2,222.32 monthly mortgage payment. ,,91 The evidence produced by both parties indicates that Felder made a $2,333.44 payment on April 2, 2007, which included a $111.12 late fee. 92 The payment was applied to March 2007 rather than April 2007. 93 Similarly, Felder made payments of $2,222.32 at the end of April, May, and June of 2007. 94 Each payment was applied to the prior month rather than the upcoming month. 95 In addition to these 89 ( ... continued) why the allocation of principal and interest is inconsistent with other regular payment entries; or why the payments were applied to February 2007 rather than against Felder's upcoming scheduled monthly payment. 90Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23, p. 21 ~ 34; April 2, 2007, Notice of Default, Exhibit A-6 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-7. 91Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-2, p. 6 ~ 19. 92Acti ve Loan Mortgage Interest Statement, Exhibit A-I to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-4, p. 2; Loan History Statement, Exhibit A-3 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-4, p. 2. 94Id. -31- payments, Felder made seven more payments during 2007 and received three more Notices of Default. 96 (b) Felder's October 2008 Loan Modification In the affidavit attached to his Response Felder admits that " [i] n 2008, I became unemployed and Countrywide changed my payments to $2,841.41.,,97 a The parties have produced the first two pages of five-page letter stating that Felder was approved for a loan modification and that "[i]n order for the modification to be valid, the enclosed documents need to be signed and returned." 98 page of the letter states that Felder's The first "new modified monthly payment will be $2,841.42, effective with [his] November 1, 2008 96Acti ve Loan Mortgage Interest Statement, Exhibit A-I to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-4, p. 2; Loan History Statement, Exhibit A-3 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-4, pp. 2-3; August 2, 2007, Notice of Default, Exhibit A-6 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-7, p. 3; September 4, 2007, Notice of Default, Exhibit A-6 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-7, p. 5; October 3, 2007, Notice of Default, Exhibit A-6 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-7, p. 7. 97Affidavit of Larry D. Felder, Exhibit A to Felder's Response, Docket Entry No. 24-1, p. 2 ~ 4; see also Affidavit of Larry D. Felder, Exhibit M to Amended Original Petition (Exhibit A to Notice of Removal), Docket Entry No. 1-3, p. 2 ~ 3 ("I requested a loan modification to remedy debt, due to a medical hardship resulting economic decline in my finances and a dramatically increased mortgage payment.") . 980ctober 2008 Loan Modification Correspondence, Exhibit C to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-11; October 2008 Loan Modification Correspondence, Exhibit A-9 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-10, p. 1; October 2008 Loan Modification Correspondence, Exhibit C to Amended Original Petition (Exhibit A to Notice of Removal), Docket Entry No. 1-2, p. 1. -32- payment" and that a total of $23,332.27, including $14,205.78 of interest, $185 of fees, and $8,941.49 of Escrow, would "be added to [Felder's] current principal balance." 99 The letter also states that "[t]his Agreement will bring your loan current; however, you are still required to pay back the entire unpaid principal by the maturi ty date for your loan." 100 The second page of the letter states: The following documents have been enclosed: Modification Agreement-Must be signed in the presence of a Notary. The notary acknowledgment must be in recordable form. All parties who own an interest in the property must sign the modification agreement as their name appears. 101 There is no indication that any other documentation, such as proof of income, was required. 102 Neither agreement. 103 party has However, produced a copy of the modification the evidence produced indicates that both 99rd. loord. 1010c tober 2008 Loan Modification Correspondence, Exhibit A-9 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-10, p. 2; October 2008 Loan Modification Correspondence, Exhibit C to Amended Original Petition (Exhibit A to Notice of Removal), Docket Entry No. 1-2, p. 2. 102S ee id. 103The parties have also failed to produce the last three pages of the October 2008 Loan Modification Correspondence. Although the Lender Defendants include three additional pages in Exhibit A-9 to their Motion for Summary Judgment, they are actually excerpts of a letter dated April 3, 2009. Compare October 2008 Loan Modification Correspondence, Exhibit A- 9 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-10, with April 2009 Loan Modification Correspondence, Exhibit D to Amended Original Petition (Exhibit A to Notice of Removal), Docket Entry No. 1-2, p. 7. -33- parties conformed to the agreement as represented in the On November 28, 2008, Felder made his October 23, 2008, letter. first $2,841.42 payment. 104 On December 17, 2008, $9,126.49 was added to Felder's principal balance, $8,941.49 was subtracted from his Escrow balance, Total. ,,105 and $185 was subtracted from his "Unapplied A "PRINCIPAL ADJUST [MENT]" was also made on December 17, 2008, that increased Felder's principal balance by $14,205.78 -exactly the amount of interest to be capitalized when the loan modification took effect per the October 23, 2008, letter. 106 On January 7, 2009, Felder made a payment of $2,842. 107 On January 16, 2009, Felder received a Notice of Default stating that he owed $12,074.10 in "Monthly Charges" as of November 1, 2008. 108 This figure appears to represent exactly three monthly payments of $4,024.70. Although neither party has explained how Felder's 104Loan History Statement, Exhibit A-3 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-4, p. 4. 105rd. 106rd. ; October 2008 Loan Modification Correspondence, Exhibit C to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-11; October 2008 Loan Modification Correspondence, Exhibit A-9 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-10, p. 1; October 23, 2008, Loan Modification Correspondence, Exhibit C to Amended Original Petition (Exhibit A to Notice of Removal), Docket Entry No. 1-2, p. 1. l07Loan History Statement, Exhibit A-3 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-4, p. 4. 108January 16, 2009, Notice of Default, Exhibit A-6 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-7, p. 13. -34- ---------.. _-_.__ . -_._---_._------------- monthly payment was calculated during this time period, a review of the evidence produced by both parties reveals that the Lender Defendants considered Felder's scheduled monthly payment amount to be $4,024.70. Between November of 2008 and October of Q009 each of Felder's payments was applied to "Partial Balance" or "Unapplied Total until they reached an amount in excess of $4,024.70, at which time an adjustment was made to apply the funds to principal, interest, and escrow. 109 The January 16, $5,868.42 in his 2009, "Partial Notice of Default credits Felder for Payment Balance, ,,110 which primarily consisted of Felder's payments on November 28, 2008, and January 7, 2009. 111 After accounting for additional charges, the Notice of 109Acti ve Loan Mortgage Interest Statement, Exhibit A-4 to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-7, p. 2; Loan History Statement, Exhibit A-3 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-4, pp. 4-5. The treatment of each of Felder's payments as partial payments would continue for the remaining life of the loan. Loan History Statement, Exhibit A-3 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-4, pp. 4-6. In pleading his fraud claim in his First Amended Complaint, Felder alleges for the first time that he "sent in erratic large monthly mortgage payments to Lender Defendant in reliance that such actions would rectify the delinquent status Countrywide and BAC represented was required to regain a current status or avoid foreclosure." First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-2, p. 26 ~ 82. However, the evidence produced does not support an allegation of "erratic large monthly" payments. See Loan History Statement, Exhibit A-3 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-4. l10January 16, 2009, Notice of Default, Exhibit A-6 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-7, p. 13. l11See Active Loan Mortgage Interest Statement, Exhibit A-4 to Plaintiff's First Amended Complaint, Docket Entry No. 27-7, p. 2; (cont inued ... ) -35- Defaul t stated that Felder could cure his $6,819.48 "on or before February 15, 2009."112 default by paying On January 20, 2009, a $5,646.18 accounting entry adjusted Felder's "Unapplied Total" to reflect a regular payment of $4,024.70 that was applied to November of 2008. 113 (c) Subsequent Proposed Loan Modifications Felder was 2009. 114 offered another Loan Modification of Felder has produced a letter stating that the proposed modification would "reduce [his] interest rate to 6%" and "result in a new payment amount of $1,476.26.,,115 the in April modification would "take effect continue until April 30, 2010.,,116 May The letter states that 1, 2009 and [would] In addition, the letter states that" [a] ccepting the enclosed modification also resolves your past 111 ( ... continued) Loan History Statement, Exhibit A-3 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-4, pp. 4-5. 112January 16, 2009, Notice of Default, Exhibit A-6 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-7, p. 13. 113Acti ve Loan Mortgage Interest Statement, Exhibit A-4 to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-7, p. 2; Loan History Statement, Exhibit A-3 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-4, p. 4. 114April 2009 Loan Modification Correspondence, Exhibit D to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-12; April 2009 Loan Modification Correspondence, Exhibit D to Amended Original Petition (Exhibit A to Notice of Removal), Docket Entry No. 1-2, p. 7. 115Id. 116Id. -36- ---------------------------- --- ---- --- ----------- due amount of $12,293.15 as of March 30, 2009,"117 and that "this modification will bring your loan current."11S The letter states that in order to accept the modification Felder must both "[s] ign enclosed modification document in the presence of a notary" and "include income information applicable to notarized and [his] loan-modification specifically states date that verification of your income. the situation with The agreement. "119 "this offer [his] is signed and letter also contingent upon Even if you sign and return the loan modification documents; this modification will not take effect if we are not able to verify your income." 120 Both parties have produced a copy of the Loan Modification Agreement that was signed by Felder on March 12, 2010. 121 But 117Id. 11SApril 2009 Loan Modification Correspondence, Exhibit D to Amended Original Petition (Exhibit A to Notice of Removal), Docket Entry No. 1-2, p. 9. 119Id. at 8; Exhibit A- 9 to Lender Defendants' Summary Judgment, Docket Entry No. 23-10, p. 5. Motion for 12°April 2009 Loan Modification Correspondence, Exhibit D to Amended Original Petition (Exhibit A to Notice of Removal), Docket Entry No. 1-2, p. 3; October 2008 Loan Modification Correspondence, Exhibi t A- 9 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-10, p. 4. 121Loan Modification Agreement, Exhibit A-3 to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-6; Loan Modification Agreement, Exhibit A-II to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-12; Loan Modification Agreement, Exhibit A-3 to Felder's Response, (continued ... ) -37- neither party has produced a copy of the April 2009 Modification Agreement signed by Felder before the May 3, Loan 2009, deadline 122 or a copy signed by the Lender Defendants. The Lender Defendants did not make any adjustments to Felder's account in Felder, however, 2009. 124 accordance with the proposed loan modification. 123 began making payments of $1,476.26 in June of Felder continued making monthly payments of $1,476.26 through March of 2010. 125 121 ( ... cont inued) Docket Entry No. 24-4. Felder allegedly provided this copy to the Lender Defendants in April and June of 2010 as a replacement for the copy that the Lender Defendants allegedly misplaced. See Fax Transmittal, Exhibit E to Amended Original Petition (Exhibit A to Notice of Removal), Docket Entry No. 1-2, p. 15i April 21, 2010, Correspondence Re: Offer of Modification, Exhibit H to Amended Original Petition (Exhibit A to Notice of Removal), Docket Entry No. 1-2, p. 23. 122April 2009 Loan Modification Correspondence, Exhibit D to Amended Original Petition (Exhibit A to Notice of Removal), Docket Entry No. 1-2, p. 2i October 2008 Loan Modification Correspondence, Exhibi t A- 9 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-10, p. 5. 123See Active Loan Mortgage Interest Statement, Exhibit A-4 to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-7, p. 2; Loan History Statement, Exhibit A-3 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-4, p. 5. 124Id. 125Acti ve Loan Mortgage Interest Statement, Exhibit A-4 to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-7, p. 2; Loan History Statement, Exhibit A-3 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-4, pp. 5-6. -38- Felder was offered another Loan Modification in November of 2009. 126 Felder was denied the modification after failing to make the payments required during the trial period .127 2. Felder has failed to raise a genuine issue of material fact for trial as to whether he was in default when the Lender Defendants foreclosed. ~The elements of a breach of contract claim under Texas law are: (1) the existence of a valid contracti tendered performance by the plaintiffi (2) performance or (3) breach of the contract by the defendanti and (4) damages to the plaintiff resulting from the breach." Lewis v. Bank of Am. NA, 343 F.3d 540, 544-45 (5th Cir.2003) (citing Palmer v. Espey Huston & Assocs., 84 S.W.3d 345, 353 App.-Corpus Christi 2002, (Tex. pet. denied)) The Lender Defendants argue that Felder cannot maintain a cause of action for breach of contract because he was in default. 128 Felder 2010,,,129 ~did not citing make his April an entry in 1, the They allege that 2009 payment until Loan History May 13, Statement dated 126November 2009 Loan Modification Correspondence, Exhibit A-5 to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-8i November 2009 Loan Modification Correspondence, Exhibit A-10 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-11. 127April 26, 2010, Correspondence from Bank of America to Felder Re: Trial Plan Default, Exhibit A-6 to Felder's Response, Docket Entry No. 24-7. 128Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23, pp. 20-21 ~~ 33-34. 129Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23, p. 28 ~ 1.bi Bank of America's Reply, Docket Entry No. 25 p. 9 ~ 20. -39- ----------------------- - May 13, 2010, representing a $4,033.83 payment applied to April of 2009.130 clear Although the entry is labeled "REGULAR PAYMENT," it is based Felder's on actual the cancelled payments were checks produced recorded using by the Felder label that "MISC. POSTING" and applied to "Partial Balance" or "Unapplied Total.,,131 However, despite making payments in accordance with the April 2009 proposed loan modification, Felder has not produced any evidence to suggest that he was ever approved for the modification. The only copy of the proposed Loan Modification Agreement that either party has produced was signed by Felder in March of 2010. 132 l3OLoan History Statement, Exhibit A-3 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-4, p. 6. 131See Cancelled Checks, Exhibit G to Felder's First Amended Complaint, Docket Entry No. 27-15; Active Loan Mortgage Interest Statement, Exhibit A-4 to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-7, p. 2; Loan History Statement, Exhibit A-3 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-4, pp. 5-6. 132Loan Modification Agreement, Exhibit A-3 to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-6; Loan Modification Agreement, Exhibit A-II to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-12; Loan Modification Agreement, Exhibit A-3 to Felder's Response, Docket Entry No. 24-4. Jane Cashel's affidavit states that "Felder did not sign and return the loan modification agreement until March 12, 2010." Declaration of Jane Cashel, Exhibit A to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-1, p. 6 ~ 14. However, this assertion is belied by the records produced with Cashel' s affidavit. The Account Status Listing produced by the Lender Defendants indicates that Felder's application was reviewed on April 14, 2009, and May 11, 2009, and denied because Felder "failed to remit required proof of income documentation." Account Status Listing, Exhibit A-4 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-5, (continued ... ) -40- The letter accompanying the proposed modification makes clear that the modification was conditional upon verification of income. l33 that remi t Felder's The evidence produced by the Lender Defendants indicates Felder's application was denied because Felder "failed to required proof of income documentation. ,,134 Felder has not produced a statute of payments of frauds to document establish $l,476.26. l35 Furthermore, that would comply with the that he was See BACM 2001-1 entitled to make San Felipe Rd. Ltd. P'ship v. Trafalgar Holdings I, Ltd., 218 S.W.3d 137, 144-48 (Tex. App.-Houston [14th Dist.] 2007, pet. denied). In light of the foregoing, and drawing all inferences in a light most favorable to Felder, the court concludes that Felder has failed to produce sufficient evidence to establish that a genuine issue of material fact exists as to whether he was in default when the Lender Defendants foreclosed on the property. Accordingly, 132 ( ... continued) pp. 7-8. This information is also reproduced in the HomeSaver Workout Notes produced by the Lender Defendants. HomeSaver Workout Notes, Exhibit A-8 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-9, pp. 5-6. l33April 2009 Loan Modification Correspondence, Exhibit D to Amended Original Petition (Exhibit A to Notice of Removal), Docket Entry No. 1-2, pp. 8-9; Exhibit A-9 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-10, pp. 4-5. 134Account Status Listing, Exhibit A-4 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-5, pp. 7-8; HomeSaver Workout Notes, Exhibit A-8 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-9, pp. 5-6. 135Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23, pp. 24-25 ~~ 41-44. -41- ... _--------- summary judgment is appropriate with regard to Felder's claim that the Lender Defendants "breached the contract . accept further monthly payments and . by refusing to instead elected to foreclose. ,,136 3. Felder has failed to raise a qenuine issue of material fact for trial as to whether the Lender Defendants failed to provide proper notice prior to foreclosure. Felder alleges that the Lender Defendants did not provide the notice required by the Deed of Trust thirty days prior to the May 16, 2011, Notice of Acceleration and Sale.137 The relevant portion of the Deed of Trust states: 22. Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument (but not prior to acceleration under Section 18 unless Applicable Law provides otherwise). The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice will result in acceleration of the sums secured by this Security Instrument and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Securi ty Instrument without further demand and may invoke the power of sale and any other remedies permitted by Applicable Law. Lender shall be entitled to collect all 136Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-2, pp. 29-30 ~ 95. 137Id. at 27-29 No. 24 p. 19 ~ 50. ~~ 87-92; Felder's -42- Response, Docket Entry expenses incurred in pursuing the remedies provided in this Section 22, including, but not limited to, reasonable attorneys' fees and costs of title evidence. For the purposes of this Section 22, the term "Lender" includes any holder of the Note who is entitled to receive payments under the Note. l38 The Lender Defendants have produced a Notice of Default in compliance with the Deed of Trust dated May 17, 2010. 139 Felder required to appears to provide such a acceleration. 140 argue However, that notice the Lender Defendants exactly thirty days were before the Deed of Trust specifically states that the Lender Defendants must provide Felder with "not less than 30 days" to cure his default before accelerating the loan. 141 The May 17, 2010, Notice of Default specifies that Felder may cure the default by paying $52,747.57 "on or before June 16, 2010."142 The Lender Defendants did not accelerate the loan until nearly a year later on May 16, 2011. 143 138Deed of Trust, Exhibit L to First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-20, p. 13 ~ 22; Deed of Trust, Exhibit A-2 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-3, p. 16 ~ 22. 139May 17, 2010, Notice of Default, Exhibit A-7 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-8. 14°Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-2, p. 9 ~ 32. 141Deed of Trust, Exhibit L to First Amended Complaint, Docket Entry No. 27-20, p. 13 ~ 22; Deed of Trust, Exhibit A-2 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-3, p. 16 ~ 22. 142May 17, 2010, Notice of Default, Exhibit A-7 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-8. 143Notice of Acceleration and Sale, Exhibit A-13 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-14. -43- Felder also argues that he was entitled to two Notices of Default -- one at least thirty days prior to acceleration pursuant to the Deed of Trust, and one at least twenty days acceleration under the Texas Property Code. 144 prior to Felder has cited no authority, and the court is aware of none, to suggest that a single notice is not obligations. sufficient to satisfy the Lender Defendants' The court therefore concludes that Felder has failed to establish that a genuine issue of material fact exists as to whether the Lender Defendants provided him with proper notice prior to the foreclosure sale. Accordingly, summary judgment is appropriate on Felder's claims regarding the Lender Defendants' alleged failure to properly notice. C. The Lender Defendants Had Standing to Foreclose Felder appears to advance three Defendants lacked standing to foreclose: arguments why the Lender (1) the securitization of his mortgage rendered his Note unsecured and the Deed of Trust unenforceable; (2) the August 30, 2010, assignment to BONY Mellon was void; and (3) BAC was not a mortgagee entitled to foreclose under the Deed of Trust. 145 The Lender Defendants argue that they 144Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-2, pp. 12-13 ~ 43; Felder's Response, Docket Entry No. 24, p. 20 ~ 52. 145Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-2, pp . 1 0 -11 ~ ~ 3 7 - 3 9 , pp . 14 - 2 7 ~ ~ 4 7 - 85 , pp . 3 0 - 3 2 ~ ~ 99 -1 0 9 ; Felder's Response, Docket Entry No. 24, pp. 12-18 ~~ 27-47. -44- ---,--------------- - "have standing to foreclose as both the holder of the note and as mortgage servicer. ,,146 The securitization of Felder's mortgage did not affect the Lender Defendants' standing to foreclose. 1. Felder advances several arguments as to why the securitization process rendered the Note and Deed of Trust unenforceable. Felder's arguments rely heavily on the effect of the Pooling and Servicing Agreement ("PSA") governing the CWABS Asset-Backed Certificates Trust ("CWABS") in relation to Texas Real Property Law. (a) The CWABS PSA does not affect the enforceability of Felder's Deed of Trust. Felder alleges that his "mortgage loan was bifurcated into three parts": the Note, the Deed of Trust, and "the loan payment obligations sold or stripped out of the original mortgage loan," which Felder terms "the Intangible Obligations .,,147 that "the Obligation) income is or stream was from owned [his] by loan various (Certificateholders of the CWABS Trust) described by the Prospectus" 2007-2 and that Felder alleges payments classes (Intangible of investors in a unified manner as "[e] ach class of the CWL trust owns a different partial interest in the Felder's Intangible Obligation. ,,148 146Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23, p. 13 ~ 15. 147Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-2, p. 15 ~ 50. 148Id. , 49. -45- Felder argues that the assignment of his intangible payment obligations to various classes of the CWABS trust rendered the Note and Deed of Trust unenforceable because "[a] true sale of Note and the Deed of Trust to all and each of the potential multiple owners of the certificates must be compliant with the local laws of jurisdiction and such division is a legal impossibility" because such a "transfer lacks supporting tangible law . to the Note and Deed of Trust can only be as the rights to one party. ,,149 Felder's argument is misplaced because, as he acknowledges, the PSA is not an assignment of the Note or Deed of Trust. The PSA requires the parties selling mortgages to CWABS to deliver the "Mortgage File" either prior to or within thirty days of the trust's closing date. 150 The Mortgage File includes the original promissory note, the deed of trust, and "a duly executed assignment of the [Deed of Trust] to [CWABS], by [BONY Mellon], as trustee. ,,151 At most, the PSA reflects a promise to assign the Note and Deed of Trust. Felder acknowledges this fact, asserting that "[t]he initial and subsequent certificate transactions involving divided intangible payment stream of the Intangible Obligation do 149Id. at 16 ~ 52. 150pSA, Exhibit E to Plaintiff's First Amended Petition, Docket Entry No. 27-13, pp. 67-74. 151Id. i see also Prospectus Supplement, Exhibit M to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-21, pp. 44-45. An assignment is not even required for mortgages that are part of the MERS system to be in compliance with the PSA. Id. -46- not transfer the rights to the Tangible Note or the Deed of Trust to the owners of the intangible payment stream. Accordingly, at 1/152 the time of securi ti zation there was no assignment "of Note and the Deed of trust to all and each of the potential multiple owners of the certificates [that] must be compliant with the local laws of jurisdiction. 1/153 Therefore, Felder's argument that his Deed of Trust is unenforceable under the terms of the PSA has no merit. (b) Felder's claims based on the "split-the-notel/ theory fail as a matter of law. Felder also argues that the Lender Defendants assigned the Intangible Obligation to CWABS prior to assigning the Note or Deed of Trust, and that this process renders the Note and Deed of Trust unsecured and compliant unenforceable. 154 with laws of Felder negotiation, alleges transfer of that "[t] 0 be ownership and rights to enforce the Tangible Note secured by a Deed of Trust require that a true sale of Note and the Deed of Trust be executed prior to the instruments. stripping 1/155 of partial interest In the tangible Felder cites no authority for this conclusion. 156 He elaborates on his claim by arguing that 152Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-2, p. 16 ~ 52. 153Id. at 16 ~ 52. 154Id. at 17 ~ 56. 155Id. a t 16 tT 1 . 1 52 156Id. -47- A properly recorded assignment of the Deed of Trust memorializes the Note's negotiation, but does not cause the Note's transfer. For a Note to change ownership and remain secured through the Deed of Trust each and every transfer of the Note, by indorsement or negotiation, must be performed with a parallel assignment to remain as a secured party of record. If a Note is indorsed and negotiated to one party while the Deed of Trust is assigned to another party, a separation between the Ownership of the Note evidencing the Tangible Obligation and the Ownership of the Conditions which secure the Intangible Obligation to Real Property occurs and such is a legal impossibility. As such bifurcation is impossible, there is no lawful mechanism to allow for a security securing a Note to follow an Intangible Payment Stream to allow an Intangible owner to be a party perfected of record to the Note. 157 To the "splitting" extent or that Felder "bifurcating" the relies Note on from the the theory Deed of that Trust renders either unenforceable, his claims have no merit under Texas law. The "split-the-note" theory posits that "the 'transfer of [the] deed of trust . . . "splits" the note from the deed of trust, thus rendering both null.'" No. 12-51039, Wiley v. Deutsche Bank Nat. Trust Co., 2013 WL 4779686, at *1 (5th Cir. Sept. 6, 2013) (quoting Martins v. BAC Home Loans Servicing, L.P., 722 F.3d 249, 254 (5thCir. 2013)) "In order to foreclose, the theory goes, a party must hold both the note and the deed of trust. Martins, 722 F.3d at 254). II Id. (quoting However, "Texas courts have explained on multiple occasions that a note and a deed of trust constitute separate actions." Id. at *2. "It is so well settled as not to be controverted that the right to recover a personal judgment for a debt secured by a lien on land and the right to have a foreclosure 157Id. at 17 , 56. -48- of lien are severable, and a plaintiff may elect to seek a personal judgment without foreclosing the lien, and even without a waiver of the lien." Martins, 722 F.3d at 255 (quoting Carter v. Gray, 81 S.W.2d 647, 648 (Tex. Comm'n App. 1935)). "The duality of the lien and the note means that the beneficiary of the lien can be different from the holder of the note." Wiley, 2013 WL 4779686, at *2. need not possess the note itself.' "'The party to foreclose So long as it is a beneficiary named in the deed of trust or an assign, that party may exercise its authority even if it does not hold the note itself." (internal citations omitted) (quoting Martins, Id. 722 F.3d at 255). Thus, "the split the note theory is . . . inapplicable under Texas law where the foreclosing party is a has been properly assigned." 255) at Id. [mortgagee] and the mortgage (quoting Martins, (internal quotation marks omitted) 255 ("A deed of trust ' gives i the 722 F.3d at see also Martins, 722 F.3d lender as well as the beneficiary the right to invoke the power of sale,' even though it would not be possible for both to hold the note." (quoting Robeson v. Mortgage Elec. Registration Sys., Inc., No. 02-10-00227-CV, 2012 WL 42965, at *6 (Tex. App.-Fort Worth Jan. 5, 2012, pet. denied))). Felder's argument that securitization of his mortgage required that "a true sale of Note and the Deed of Trust be executed prior to the stripping of partial interest in the tangible instruments" is also unavailing. 158 158Id. at 16 ~ Felder alleges that 52. -49- [m]ultiple classes of the CWL 2007-2 Trust are/were the owners of the Felder Intangible Obligation, however, according to Texas State Law, multiple classes of the CWL 2007-2 Trust can only be entitled to enforce the Felder Deed of Trust if multiple classes of the CWL 2007-2 Trust were transferred the rights to the Felder Deed of Trust by way of assignments pursuant to Recordation/Assignment Statutes. 159 However, as Felder acknowledges, certificate transactions "[t]he involving initial divided and subsequent intangible payment stream of the Intangible Obligation do not transfer the rights to the Tangible Note intangible or payment the Deed of stream. ,,160 Trust to the Furthermore, authority for his contention that owners Felder of cites the no "multiple classes of the CWL 2007-2 Trust [are] entitled to enforce the Felder Deed of Trust."161 Courts routinely reject arguments that securitization of a mortgage renders the Deed of Trust unenforceable. See Marban Mortgage, No. 3:12-CV-3952-M, 2013 WL 3356285, at *10 July 3, 2013) v. PNC (collecting cases) . 2. (N.D. Tex. . Felder has failed to raise a qenuine issue of material fact as to the validity of the August 30, 2010, assignment. Felder argues that the Lender Defendants lacked standing to foreclose because the August 30, 2010, assignment was void. 162 159rd. at 18 ~ 59 i see also id. at 2 0 ~ 62 (" In contradiction to law, the Felder Deed of Trust must have been duly assigned to multiple classes of the CWL 2007-2 Trust for multiple classes of the CWL 2007-2 Trust to be entitled to enforce the Felder Deed of Trust.") . l6°rd. at 16 ~ 52. 161Id. at 20 ~ 62; see also id. at 18 ~ 59. 162Id. at 18-24 ~~ 58-72. -50- Felder advances three arguments as to why the August 30, assignment to BONY Mellon was void: 2010, (1) the assignment was forged, (2) the signer lacked authority to execute the assignment, and (3) the assignment violated the terms of the PSA. because he has not produced any evidence Felder's claims fail to suggest that the assignment was void, and he does not have standing to challenge the assignment. (a) Felder has produced no evidence to suggest that the August 30, 2010, assignment to BONY Mellon was void. The Lender Defendants have presented evidence of standing to foreclose through a facially valid assignment, which was signed by Craig Hooley for BAC, as Servicer, on behalf of MERS acting solely as nominee for America's Wholesale Lender .163 recorded in Harris County, Texas, The assignment was on September 28, 2010. 164 See Morlock, L.L.C. v. JP Morgan Chase Bank, N.A., No. 12-20623, 2013 WL 2422778, at *2 (5th Cir. June 4, 2013) evidence of this standing [to foreclose] (" [Lender] presents through a facially valid assignment, which was signed by MERS's assistant secretary with a proper corporate acknowledgment and recorded in the county clerk's 163Assignment of Mortgage, Exhibit A- 5 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-6. The Lender Defendants also argue that Felder lacks standing to challenge the assignment of his mortgage. Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23, p. 2 ~ 2, pp. 6-7 ~~ 16-18, p. 19 ~ 46. 164Assignment of Mortgage, Exhibit A- 5 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-6. -51- Because office."). transfers taking 'view [s] with certificates "[r]eal property place many years suspicion of and in the distrust acknowledgment,' records under often contain Texas past [, ] attempts which the presumptively valid and contradicting evidence to discredit transfer 'must be is clear, controversy.' " Id. (quoting Ruiz v. Stewart Mineral Corp., 202 S.W.3d 242, 248 (Tex. cogent, and convincing beyond reasonable App.-Tyler 2006, pet. denied)). Felder fails standard. to plead any facts remotely approaching this Felder alleges that the "Lender Defendants have failed to provide legal, verifiable proof of assignment and ownership to The Bank of New York Mellon West & Associate LLP typed up, Substitute Trustee, filed after Plaintiff's . besides the void document that having conducted homestead. ,,165 a defective "This 'naked notarized and foreclosure assertion [] sale of devoid of further factual enhancement' fails to state a plausible claim for relief." Id. (citing Iqbal, (b) 129 S. Ct. at 1949). Felder lacks standing to challenge the assignment. Felder alleges "that the assignment of the Deed of Trust is due to the lack of capacity and authority of the acting Defendants" and "request [s] aside. ,,166 a declaration that the void assignments be set However, Felder lacks standing to challenge the validity 165Felder's Response, Docket Entry No. 24, p. 15 ~ 40. 166Id. a t 7 t1 11 16 ¢ -52- of the August 30, 2010, assignment on the basis of the assignor's alleged lack of authority. See Reinagel, 735 F.3d at 228. In Reinagel the plaintiff-homeowners sought declaratory and injunctive relief on the basis that the assignee of their mortgage lacked standing to foreclose. The Fifth Circuit Id. at 222-25. analyzed the effect of two mortgage assignments challenged by the plaintiff-homeowners, noting that "the first instrument assigned only the deed of trust, whereas the second instrument assigned both the deed of trust and 'the certain note(s) Id. at 225. described therein.'" The court ultimately held that the second assignment was valid against the plaintiffs and "reaffirm [ed] that under Texas law, facially valid assignments cannot be challenged for want of authority except by the defrauded assignor." the Here, facially instrument in Reinagel, valid Id. at 228. like assignment, the second assigns both the Deed of Trust and the "note or notes therein described or referred to." 167 See id. at 225 ("[T]he second instrument also expressly transferred "the certain note(s) described [in the deed of trust] ."). have standing to "defend 'on any Although Felder would ground which renders the assignment void,'" his challenge based on the signer's alleged lack of authority would unauthorized contract, election of the render [] the assignment, not void, defrauded "like any other but merely voidable at the principal." Id. at 226 (quoting 167Assignment of Mortgage, Exhibit A- 5 to Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23-6. -53- ----.--.------ - .. _---_._--_ _-._._---.. Tri-Cities Const.! Inc. v. Am. Nat. Ins. Co., 523 S.W.2d 426, 430 (Tex. Civ. App.-Houston [1st Dist.] Thus, 1975, no writ)). the signer's alleged lack of authority, even accepted as true, does not furnish Felder with a basis to challenge the assignment. The same principle applies to Felder's claims Id. that assignment was void because it was in violation of the PSA. the Felder argues that when his Deed of Trust was assigned on August 30, 2010, "the CWABS 2007-2 was closed per its substantiates and supports PSA agreement which also Plaintiff's allegations that the purported recordation of the assignment of Mortgagee beneficiary interest under Plaintiff's Deed of Trust to [BONY Mellon] was void and an impossibility. 11168 Felder alleges that the trust New York asset-backed trust and that New York law applies .169 is a See Green v. Bank of Am. N.A., No. H-13-1092, 2013 WL 3937070, at *3 (S.D. Tex. July 30, 2013) ("[Plaintiff] alleges that the trust is a New York asset-backed trust. New York law applies.") . "Under New York law 'every sale, conveyance or other act of the trustee in contravention of the trust, except as authorized by this article and by any other provision of law, (quoting N.Y. Est. Powers & Trusts Law § is void.'11 7-2.4). Id. However, " [c] ourts applying New York law have treated actions by trustees as voidable. II rd. (citing Mooney v. Madden, 597 N.Y.S.2d 775, 776 168Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-2, pp. 20-21 ~ 64. 169Id. at 22 ~ 68 i see also Prospectus Supplement, Exhibit M to Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-21, pp. 4, 68. -54- (N.Y. App. Div. 1993)); see also Sigaran v. No. H-12-3588, 2013 WL 2368336, at *3 u.s. Bank Nat. Ass'n, (S.D. Tex. May 29, 2013) ("Despite New York law's use of the term 'void,' courts applying New York law have treated ultra vires actions by trustees as voidable and capable of ratification."); Calderon v. Bank of Am. N.A., 941 cases) 170 F. Supp. 2d 753, 766 (W.D. Tex. 2013) (collecting In addition, the Fifth Circuit has "found that borrowers lacked standing to challenge the transfer of a note in violation of the terms of the PSA." Farkas, Reinagel, 735 F.3d at 228). 2013 WL 6231114, at *3 (citing Accordingly, because assignments made after the trust's closing date are voidable, rather than void, Felder cannot challenge the assignments of his mortgage. Green, 2013 WL 3937070, at *3. 3. BAC had standing to foreclose as mortgage servicer. Felder "claims that Defendant AWL l71 and BAC have no standing to foreclose on the Note and under the Deed of Trust bec'ause 17°Felder cites Wells Fargo Bank, N.A. v. Erobobo, 972 N.Y.S.2d 147 (N.Y. Sup. Ct. 2013) for the proposition that an assignment to a trust after the closing date is void rather than voidable. Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27 - 2, p. 2 2 ~ 68. The court finds Erobobo' s reasoning unpersuasive. See Halacy v. Wells Fargo Bank, N.A., No. 12-11447-TSH, 2013 WL 6152351, at *3 (D. Mass. Nov. 21, 2013) ("Erobobo has been criticized and multiple federal courts, including in this District, have held that under New York law, an assignment of a mortgage into a trust in violation of the terms of the PSA is voidable, not void."). Neither is the court persuaded by any of the other cases Felder cites in support of this proposition. See Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-2, p. 22 ~ 68. 171America's Wholesale Lender is the d/b/a of defendant Countrywide. Lender Defendants' Corporate Disclosure Statement and Certificate of Interested Parties, Docket Entry No.4, p. 1. -55- Defendant BAC is not the owner of the Note and the Deed of Trust for which i [t] The Lender Defendants intends to foreclose. ,,172 argue that BAC had standing to foreclose as the mortgage servicer under Texas Law. 173 "The Texas Property Code provides that a 'mortgage servicer' " may administer a foreclosure on behalf of a mortgagee Martins, 722 F.3d at 255 (quoting Tex. Prop. Code § 51.0025) The Fifth Circuit has held that MERS "qualifies as a mortgagee" under Texas A law. beneficiary, (citing owner, Tex. Prop. mortgagee also or holder of a Code "the grantee, security instrument." 51.0001 (4)). § includes "In either event, Id. the mortgage servicer need not hold or own the note and yet would be authorized to administer a foreclosure." Accordingly, Felder's argument that BAC lacked standing to foreclose because it did not own the Note and Deed of Trust has no merit. D. Felder's Fraud Claims To prevail on a fraud claim under Texas law a plaintiff must prove that (1) the defendant made a material representation that was false; (2) the defendant knew the representation was false or made it recklessly as a positive assertion without any knowledge of its truth; (3) the defendant intended to induce the plaintiff to 172Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-2, p. 30 ~ 100. 173Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23, p. 15 ~ 19. -56- act upon the representation; (4) the plaintiff actually and justifiably relied upon the representation; and (5) the plaintiff thereby suffered an injury. Ernst & Young, L.L.P. v. Pacific Mut. Life. Ins. Co., 51 S.W.2d 573, 577 Civil Procedure 9(b) (Tex. 2001). Federal Rule of imposes a heightened level of pleading for A party bringing a fraud claim "must state with fraud claims. particularity the circumstances constituting fraud or mistake. Fed. R. Civ. P. 9(b). II The plaintiff must therefore "'specify the statements contended to be fraudulent, identify the speaker, state when and where the statements were made, and explain why the statements were fraudulent.'" Sullivan v. Leor Energy, LLC, 600 F.3d 542, 551 (quoting ABC Arbitrage v. Tchuruk, (5th Cir. 2010) 291 F.3d 336, 350 (5th Cir. 2002)). The most detail that Felder provides with regard to his fraud claims is his allegation that Lender Defendant Bank of America[] misrepresented and erroneously communicated to Plaintiff that his mortgage loan was immediately delinquent and in default in 2007 after his settlement and closing, erroneous [ly] and intentionally misrepresented by telephone and mail, Plaintiff's accounting of payment history, incomplete and inaccurate mortgage statement documents and accounting of late fees, and conducted a fraudulent and illegal foreclosure of Plaintiffs homestead. 174 The Lender Defendants argue that these allegations are insufficient to establish a genuine issue of material fact with regard to 174Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry no. 27-2, p. 33 ~ 116. -57- Felder's fraud claims. 175 The court agrees. Felder has not specified any statement contended to be fraudulent or explained why it was fraudulent. Accordingly, summary judgment is appropriate on Felder's fraud claims. E. Fe1der's C1aims for Interference with Existing Contract Felder argues that u[t]here existed a contract (Deed of Trust) that is subject to interference between Plaintiff and the original lender that is not BAC.; America's Wholesale Lender is the original Mortgagee, with MERS acting as a nominee and beneficiary" and that U[t]here is a willful and intentional act of interference by BAC, BONY MELLON and Substitute Trustee by foreclosing on Plaintiff's Homestead without proper documented (void) assignment" of the Note, Deed of Trust, or umortgagee beneficiary interest." 176 Defendants argue that they had standing to The Lender foreclose and that Felder has failed to produce any evidence that would support a claim of tortious interference. 177 uA tortious interference cause of action is established if the plaintiff proves: interference; (2) (1) the existence of a contract subj ect to a willful and intentional act of interference; 175Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23, pp. 22-23 ~~ 36-37. 176Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-2, pp. 33-34 ~ 121(a), (b). 177Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23, pp. 26-27 ~~ 47-48. -58- (3) the act was a proximate cause of the plaintiff's damages; and (4) actual damage or loss McDade & Co., § Friendswood Dev. resulted./I 926 S.w.2d 280, 282 (Tex. 1996). Co. v. As explained in IV.C above, the Lender Defendants had standing to foreclose on Felder's property. Felder's claim that the Lender Defendants interfered with his Deed of Trust by foreclosing thus has no merit. Accordingly, summary judgment is appropriate on Felder's claims for interference with existing contract. F. Felder's Quiet-Title Claims A suit to quiet title, also known as a suit to remove cloud from title, is an equitable action to clarify ownership by removing invalid claims. Ford v. Exxon Mobil Chemical Co., 235 S.W.3d 615, 618 (per curiam). (Tex. 2007) "A cloud on title exists when an outstanding claim or encumbrance is shown, which on its face, valid, would property./I affect or impair the title of Hahn v. Love, 321 S.W.3d 517, 531 [1st Dist.] 2009, pet. denied). the owner of if the (Tex. App.-Houston "Any deed, contract, judgment or other instrument not void on its face that purports to convey any interest in or make any charge upon the land of a true owner, the invalidity of which would require proof, is a cloud upon the legal title of the owner./I Wright v. Matthews, 26 S.W.3d 575, 578 (Tex. App.-Beaumont 2000, pet. denied). A plaintiff in a suit to quiet title "must prove and recover on the strength of his own title, not the weakness of his adversary's title. /I Fricks v. Hancock, S.W.3d 322, 327 (Tex. App.-Corpus Christi 2001, no pet.). -59- 45 A suit to quiet title under Texas law requires a plaintiff to (1) prove: a valid equitable interest in a specific property, (2) title to the property is affected by a claim by the defendant, and (3) although facially valid, defendant's claim is invalid or unenforceable. Bryant v. Bank of America, N.A., No. 4:ll-CV-448, 2012 WL 2681361, at *16 (E.D. Tex. June 6,2012) Duvall, 815 S.W.2d 285, denied)) . 293 n.2 "The effect of a (citing Sadler v. (Tex. App.-Texarkana 1991, pet. suit to quiet title is to declare invalid or ineffective the defendant's claim to title." Gordon v. West Houston Trees, Ltd., 352 S.W.3d 32, 42 (Tex. App.-Houston [1st Dist.] 2011, no pet.). The Lender Defendants argue that "Felder's quiet-title claim is simply a repeated challenge to Lender Defendants' foreclose based on allegedly fraudulent assignments.,,178 right to Although Felder asserts that his quiet-title "claim is based solely on the strength of his own superior Homestead title," all of his arguments pertain to whether the Deed of Trust is unenforceable due to either a defective securitization or a defective assignment .179 has already concluded in enforceable. § Accordingly, The court IV.C above that the Deed of Trust is summary judgment is appropriate on Felder's quiet-title claims. 178Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23, p. 26 ~ 46. 179Plaintiff's First Amended Complaint, attached to Motion to Amend, Docket Entry No. 27-2, pp. 35-36 ~~ 128-33. -60- G. Felder's Claims for Slander of Title (1) the uttering A slander of title action in Texas requires: and publishing of (4) special damages, disparaging words, (2) falsity, (3) (5) possession of an estate or interest in the property disparaged, and (6) the loss of a specific sale. v. Jennings, In ref'd) . interference malice, 755 S.W.2d 874, arguing his 879 claims for App.-Houston 1988, breach contract, existing with (Tex. Williams of Felder contract alleges writ and that "Defendants' actions constitute a slander of Plaintiff's title to the subject property."180 based entirely on his Felder's claims for slander of title are allegations that the Lender Defendants foreclosed either without standing or in breach of the Deed of Trust. 18l The court has already determined that Felder has failed to raise a genuine issue of these issues. m~terial Accordingly, fact for trial with regard to summary judgment is appropriate on Felder's claims for slander of title .182 I8°Id. at 28 ~ 90, 29 ~ 94i see also ide at 34 ~ 121. I8IIn addition to the Lender Defendants' arguments addressed above, the Lender Defendants assert that "Felder's claims have no merit and his lawsuit should be dismissed because. . his other claims arising from the foreclosure and sale of the property lack evidentiary proof or are barred by the economic loss rule and statute of Frauds. Lender Defendants' Motion for Summary Judgment, Docket Entry No. 23, p. 9 ~ 2, p. 30 ~ 3. II I82Because the court has concluded that no genuine issue of material fact exists as to any of Felder's substantive causes of action, no basis remains for the declaratory and injunctive relief requested in Felder's First Amended Complaint. See Morlock, L.L.C., 2013 WL 5781240, at *10-*14i Morlock, L.L.C. v. JP Morgan (continued ... ) -61- v. Conclusions and Order For the reasons explained in § II above the court concludes 1 that BONY Mellon/s Notice of Removal was timely filed was improperly joined $75 / 000. that West l and that the amount in controversy exceeds l AccordinglYI Plaintiff/s Motion to Remand Cause of Action Under 28 U.S.C. 1447(c) § (Docket Entry No. 14) is DENIED. For the reasons explained in § III above 1 Plaintiff/s Motion for Leave to File First Amended Complaint (Docket Entry No. 27) is GRANTED. For the reasons explained in § IV above 1 the court concludes that Felder has failed to raise a genuine issue of material fact for trial with regard to any of his alleged claims for relief. court therefore concludes that inferences in favor of Felder to judgment Accordingly 1 as a matter even when drawing all reasonable the Lender Defendants are entitled l of Lender Defendants l The law 1 on all of Felder s l claims. Motion for Summary Judgment (Docket Entry No. 23) is GRANTED. SIGNED at Houston l Texas l on this 20th day of December l 2013. UNITED STATES DISTRICT JUDGE cont inued) Chase Bank, N.A.I No. H-12-1448 1 2012 WL 3187918 1 at *7 (S.D. Tex. Aug. 21 2012) 1 aff/d No. 12-20623 1 2013 WL 2422778 (5th Cir. June 41 2013). Defendants are therefore entitled to summary judgment on Felder1s claims for declaratory and injunctive relief. 182 ( ¢ ¢ ¢ l -62-

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