Wilmington Savings Fund Society v. King-Johnson

IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

WILMINGTON SAVINGS FUND §

SOCIETY, FSB, not in its individual §

capacity but solely as owner trustee of §

CSMC 2020 RPL2 Trust, §

§

Plaintiff, §

§

V. § No. 3:23-cv-237-BN

§

SONJA RENEE KING-JOHNSON, §

DAVID HAROLD JOHNSON, III, §

DESIREE L. RENEE JOHNSON, §

§

Defendants. §

MEMORANDUM OPINION AND ORDER

Plaintiff Wilmington Savings Fund Society, FSB, not in its Individual capacity

but solely as Owner Trustee for CSMC 2020 RPL2 Trust (“WSFS”) has filed a Motion

for Final Summary Judgment. See Dkt. No. 45.

Defendants Sonja Renee King-Johnson, David Harold Johnson, III, and

Desiree L. Renee Johnson (“the Johnsons”) did not file a response.

For the reasons outlined below, the Court grants WSFS’s Motion for Final

Summary Judgment [Dkt. No. 45].

Background

This case concerns the loan servicing and attempted foreclosure of the

defendants’ property at 16133 Prairie Meadow Lane, Forney, Texas 75216 (the

“Property”). David Harold Johnson, Jr. and Sonja Renee King-Johnson (“the

borrowers”) executed a note payable to the Long Beach Mortgage Company on July

29, 2005. See Dkt. No. 47-1 at 14. The original principal of the note was $133,376.00

with an interest rate of 7.510% per annum. See id. The borrowers signed the deed of

trust July 29, 2005. See Dkt. No. 47-1 at 25. The deed of trust gave Long Beach

Mortgage Company a security interest in the property. See id.

Federal Deposit Insurance Corporation, as Receiver of Washington Mutual

Bank, Successor in Interest to Long Beach Mortgage Company assigned and

transferred the Deed of Trust to JP Morgan Chase Bank, National Association, (“JP

Morgan”) in 2013. See id. at 28. JP Morgan then assigned the Deed of Trust to U.S.

Bank Trust, N.A., as Trustee for LSF0 Master Participation Trust in 2014. See id. at

30-31. U.S. Bank Trust assigned the Deed of Trust to DLJ Mortgage Capital, Inc. in

2020. See id. at 36-37. DLJ Mortgage Capital, Inc. assigned the Deed of Trust to

Wilmington Savings Fund Society, FSB, not in its individual capacity but solely as

owner Trustee of CSMC 2020-RPL2 Trust in 2022. See id. at 40. Select Portfolio

Servicing Inc. (“Select Portfolio”) is the servicer of the loan for WFS. See id. at 2.

The loan agreement required the borrowers to “pay when due principal and

interest on the debt evidence by the Note….” See Dkt. No. 46 at 10. WSFS alleges the

borrowers defaulted on the loan on March 1, 2022, by not making payments, and all

payments from March 1, 2022, onward are currently due. See id. at 11.

Select Portfolio Servicing, Inc., sent a notice of default on March 22, 2022,

informing David Harold Johnson, Jr. and Sonja King-Johnson that the loan was in

default and would be accelerated if not cured. See Dkt. No. 47-1 at 64-66. Counsel for

WSFS sent a notice of acceleration to the borrowers on July 20, 2022. See id. at 108.

On February 1, 2023, WSFS filed this suit in federal court to ensure foreclosure

on the Property. See Dkt. No. 1. Defendants filed an answer on March 13, 2023. See

Dkt. No. 14. On November 9, 2023, WSFS filed a motion for summary judgment,

asking the Court to allow it to proceed with foreclosure and enter a judgment allowing

WSFS to collect the outstanding balance of the note, prejudgment interest, post-

judgment interest, and costs of court. See Dkt. No. 36 at 14. The Court denied the

motion without prejudice. See Dkt. No. 42.

WSFS then filed this Motion for Final Summary Judgment with additional

information. See Dkt. No. 45. Defendants did not file a response.

Legal Standards

Under Federal Rule of Civil Procedure 56, summary judgment is proper “if the

movant shows that there is no genuine dispute as to any material fact and the movant

is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a). A factual “issue is

material if its resolution could affect the outcome of the action.” Weeks Marine, Inc.

v. Fireman’s Fund Ins. Co., 340 F.3d 233, 235 (5th Cir. 2003). “A factual dispute is

‘genuine,’ if the evidence is such that a reasonable [trier of fact] could return a verdict

for the nonmoving party.” Crowe v. Henry, 115 F.3d 294, 296 (5th Cir. 1997).

If the moving party seeks summary judgment as to his opponent’s claims or

defenses, “[t]he moving party bears the initial burden of identifying those portions of

the pleadings and discovery in the record that it believes demonstrate the absence of

a genuine issue of material fact, but is not required to negate elements of the

nonmoving party’s case.” Lynch Props., Inc. v. Potomac Ins. Co., 140 F.3d 622, 625

(5th Cir. 1998). “A party asserting that a fact cannot be or is genuinely disputed must

support the assertion by: (A) citing to particular parts of materials in the record,

including depositions, documents, electronically stored information, affidavits or

declarations, stipulations (including those made for purposes of the motion only),

admissions, interrogatory answers, or other materials; or (B) showing that the

materials cited do not establish the absence or presence of a genuine dispute, or that

an adverse party cannot produce admissible evidence to support the fact.” FED. R.

CIV. P. 56(c)(1). “Summary judgment must be granted against a party who fails to

make a showing sufficient to establish the existence of an element essential to that

party’s case, and on which it will bear the burden of proof at trial. If the moving party

fails to meet this initial burden, the motion must be denied, regardless of the

nonmovant’s response.” Pioneer Expl., L.L.C. v. Steadfast Ins. Co., 767 F.3d 503, 511

(5th Cir. 2014) (internal quotation marks and footnote omitted).

“Once the moving party meets this burden, the nonmoving party must set

forth” – and submit evidence of – “specific facts showing a genuine issue for trial and

not rest upon the allegations or denials contained in its pleadings.” Lynch Props., 140

F.3d at 625; Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc);

accord Pioneer Expl., 767 F.3d at 511 (“[T]he nonmovant cannot rely on the

allegations in the pleadings alone” but rather “must go beyond the pleadings and

designate specific facts showing that there is a genuine issue for trial.” (internal

quotation marks and footnotes omitted)).

The Court is required to consider all evidence and view all facts and draw all

reasonable inferences in the light most favorable to the nonmoving party and resolve

all disputed factual controversies in favor of the nonmoving party – but only if the

summary judgment evidence shows that an actual controversy exists. See Anderson

v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Pioneer Expl., 767 F.3d at 511;

Boudreaux v. Swift Transp. Co., Inc., 402 F.3d 536, 540 (5th Cir. 2005); Lynch Props.,

140 F.3d at 625. “The evidence of the nonmovant is to be believed, and all justifiable

inferences are to be drawn in [her] favor. While the court must disregard evidence

favorable to the moving party that the jury is not required to believe, it gives credence

to evidence supporting the moving party that is uncontradicted and unimpeached if

that evidence comes from disinterested witnesses.” Porter v. Houma Terrebonne

Hous. Auth. Bd. of Comm’rs, 810 F.3d 940, 942-43 (5th Cir. 2015) (internal quotation

marks and footnotes omitted). And “[u]nsubstantiated assertions, improbable

inferences, and unsupported speculation are not sufficient to defeat a motion for

summary judgment,” Brown v. City of Houston, 337 F.3d 539, 541 (5th Cir. 2003), and

neither will “only a scintilla of evidence” meet the nonmovant’s burden, Little, 37 F.3d

at 1075; accord Pioneer Expl., 767 F.3d at 511 (“Conclusional allegations and denials,

speculation, improbable inferences, unsubstantiated assertions, and legalistic

argumentation do not adequately substitute for specific facts showing a genuine issue

for trial.” (internal quotation marks and footnote omitted)). “[W]hen the moving party

has carried its burden under Rule 56(c), its opponent must do more than simply show

that there is some metaphysical doubt as to the material facts.” Scott v. Harris, 550

U.S. 372, 380 (2007) (internal quotation marks omitted).

Rather, the non-moving party must “set forth specific facts showing the

existence of a ‘genuine’ issue concerning every essential component of its case.” Morris

v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998). “If a party fails

to properly support an assertion of fact or fails to properly address another party’s

assertion of fact as required by Rule 56(c), the court may: (1) give an opportunity to

properly support or address the fact; (2) consider the fact undisputed for purposes of

the motion; (3) grant summary judgment if the motion and supporting materials –

including the facts considered undisputed – show that the movant is entitled to it; or

(4) issue any other appropriate order.” FED. R. CIV. P. 56(e).

And “[o]nly disputes over facts that might affect the outcome of the suit under

the governing law will properly preclude the entry of summary judgment.” Pioneer

Expl., 767 F.3d at 511 (internal quotation marks and footnote omitted). “[T]he mere

existence of some alleged factual dispute between the parties will not defeat an

otherwise properly supported motion for summary judgment; the requirement is that

there be no genuine issue of material fact.” Scott, 550 U.S. at 380 (internal quotation

marks and emphasis omitted). And, “[w]hen opposing parties tell two different

stories, one of which is blatantly contradicted by the record, so that no reasonable

jury could believe it, a court should not adopt that version of the facts for purposes of

ruling on a motion for summary judgment.” Id.

“After the nonmovant has been given an opportunity to raise a genuine factual

issue, if no reasonable juror could find for the nonmovant, summary judgment will be

granted.” DIRECTV, Inc. v. Minor, 420 F.3d 546, 549 (5th Cir. 2005) (footnote and

internal quotation marks omitted). “Where the record taken as a whole could not lead

a rational trier of fact to find for the nonmoving party, there is no genuine issue for

trial.” Scott, 550 U.S. at 380 (internal quotation marks omitted).

The Court will not assume “in the absence of any proof ... that the nonmoving

party could or would prove the necessary facts” and will grant summary judgment “in

any case where critical evidence is so weak or tenuous on an essential fact that it

could not support a judgment in favor of the nonmovant.” Little, 37 F.3d at 1075.

“Rule 56 does not impose upon the district court a duty to sift through the record in

search of evidence to support a party’s opposition to summary judgment,” and “[a]

failure on the part of the nonmoving party to offer proof concerning an essential

element of its case necessarily renders all other facts immaterial and mandates a

finding that no genuine issue of fact exists.” Adams v. Travelers Indem. Co. of Conn.,

465 F.3d 156, 164 (5th Cir. 2006) (internal quotation marks omitted).

If, on the other hand, “the movant bears the burden of proof on an issue, either

because he is the plaintiff or as a defendant he is asserting an affirmative defense, he

must establish beyond peradventure all of the essential elements of the claim or

defense to warrant judgment in his favor.” Fontenot v. Upjohn Co.,780 F.2d 1190,

1194 (5th Cir. 1986). The “beyond peradventure” standard imposes a “heavy” burden.

Cont’l Cas. Co. v. St. Paul Fire & Marine Ins. Co., No. 3:04-cv-1866-D, 2007 WL

2403656, at *10 (N.D. Tex. Aug. 23, 2007). The moving party must demonstrate that

there are no genuine and material fact disputes and that the party is entitled to

summary judgment as a matter of law. See, e.g., Martin v. Alamo Cmty. Coll. Dist.,

353 F.3d 409, 412 (5th Cir. 2003). On such a motion, the Court will, again, “draw all

reasonable inferences in favor of the non-moving party.” Chaplin v. NationsCredit

Corp., 307 F.3d 368, 372 (5th Cir. 2002).

Analysis

I. Effect of Failing to File a Response to a Motion for Summary Judgment

When a non-moving party files a response to a motion for summary judgment

and fails to include an argument about a claim, defense, or theory that the motion

seeks to have the Court dismiss with prejudice, the Court may determine that the

nonmoving party has abandoned the unaddressed claim, defense, or theory. See

Harris v. City of Schertz, 27 F.4th 1120, 1123 (5th Cir. 2022); Vela v. City of Houston,

276 F.3d 659, 678-79 (5th Cir. 2001); Hargrave v. Fibreboard Corp., 710 F.2d 1154,

1163-64 (5th Cir. 1983); accord Maynard v. PayPal, Inc., No. 3:18-cv-259-D, 2019 WL

3552432, at *3 (N.D. Tex. Aug. 5, 2019) (“A party may abandon its claim when it fails

to pursue the claim beyond the complaint. See, e.g., Black v. N. Panola Sch. Dist., 461

F.3d 584, 588 n.1 (5th Cir. 2006); Vela v. City of Houston, 276 F.3d 659, 678-79 (5th

Cir. 2001); Hargrave v. Fibreboard Corp., 710 F.2d 1154, 1163-64 (5th Cir. 1983).”).

In the published decisions in this line of Fifth Circuit cases supporting a

district court’s authority for finding claims or theories abandoned, the nonmoving

party filed a response to the motion for summary judgment. See Harris, 27 F.4th at

1122-23; Vela, 276 F.3d at 678-79; Scales v. Slater, 181 F.3d 703, 708 n.5 (5th Cir.

1999); Vaughner v. Pulito, 804 F.2d 873, 878 n.2 (5th Cir. 1986); Batterton v. Tex.

Gen. Land Off., 783 F.2d 1220, 1224-25 (5th Cir. 1986); Hargrave, 710 F.2d at 1163-

64.

But, when a nonmoving party does not file any response to a motion for

summary judgment, the “failure to respond does not permit the court to enter a

‘default’ summary judgment.” Boyd v. Fam. Dollar Stores of Texas, LLC, No. 3:22-cv-

1368-D, 2023 WL 4141052, at *1 (N.D. Tex. June 22, 2023).

As the United States Court of Appeals for the Fifth Circuit has explained,

[a] motion for summary judgment cannot be granted simply because

there is no opposition, even if failure to oppose violated a local rule. John

v. La. (Bd. of Trustees for State Colleges & Universities), 757 F.2d 698,

709 (5th Cir.1985). The movant has the burden of establishing the

absence of a genuine issue of material fact and, unless he has done so,

the court may not grant the motion, regardless of whether any response

was filed. Id. at 708. Therefore, if the district judge's decision was to

grant summary judgment solely because of a default, such decision

constituted reversible error.

Hibernia Nat. Bank v. Administracion Cent. Sociedad Anonima, 776 F.2d 1277, 1279

(5th Cir. 1985); accord Hetzel v. Bethlehem Steel Corp., 50 F.3d 360, 362 & n.3 (5th

Cir. 1995) (explaining that the district “court granted Appellee’s motion for summary

judgment on alternative grounds,” including, “[f]irst, in accordance with the local

rule, the court granted the motion as unopposed,” and that “[w]e have previously

disapproved of granting summary judgment on this basis” but that, “because the

district court addressed the merits of the motion as an alternative holding, we need

not reverse”).

The rationale underlying these two lines of authority appears to be that the

nonmovant must – at least by affirmatively filing a response – take some action to be

considered to have abandoned a claim, theory, or defense. And, by dismissing claims

under Federal Rule of Civil Procedure 56 based on only a nonmovant’s lack of action

at all (that is, not filing a response), a district court would be improperly dismissing

with prejudice without the findings or factual support required under either Rule 56

or Federal Rule of Civil Procedure 41(b) for such a dismissal. See Hibernia, 776 F.2d

at 1279; John, 757 F.2d at 707-10.

And, even if these two lines of authority cannot be reconciled with this bright-

line distinction, “[t]he rule in this circuit is that where two previous holdings or lines

of precedent conflict the earlier opinion controls and is the binding precedent in this

circuit (absent an intervening holding to the contrary by the Supreme Court or this

court en banc).” Rios v. City of Del Rio, Tex., 444 F.3d 417, 425 n.8 (5th Cir. 2006);

accord United States v. Sanchez-Pena, 336 F.3d 431, 444 n.62 (5th Cir. 2003) (“When

faced with conflicting panel opinions, the earlier controls our decision.” (cleaned up)).

This suggests that the published decisions cited and relied on in John, 757 F.2d at

707-10, which appear to predate any decisions setting forth the abandonment

doctrine, would – at least where a nonmovant has not filed any response to a motion

for summary judgment – control.

Under these governing authorities, the Court cannot grant Plaintiff’s Motion

for Summary Judgment [Dkt. No. 45] solely because the Defendants failed to file a

response in opposition to the motion.

But, under Rule 56 and the governing law,

“[a] summary judgment nonmovant who does not respond to the motion

is relegated to her unsworn pleadings, which do not constitute summary

judgment evidence,” Bookman v. Shubzda, 945 F. Supp. 999, 1002 (N.D.

Tex. 1996) (Fitzwater, J.) (citing Solo Serve Corp. v. Westowne Assocs.,

929 F.2d 160, 165 (5th Cir. 1991)). Moreover,

[i]f a party fails ... to properly address another party’s

assertion of fact as required by Rule 56(c), the court may ...

(2) consider the fact undisputed for purposes of the motion

[and] (3) grant summary judgment if the motion and

supporting materials – including the facts considered

undisputed – show that the movant is – entitled to it[.]

FED. R. CIV. P. 56(e)(2), (3).

Boyd, 2023 WL 4141052, at *1.

Here, the pleadings are not verified, and so the Defendants have presented no

summary judgment evidence. And “a court may grant an unopposed summary

judgment motion if the undisputed facts show that the movant is entitled to judgment

as a matter of law.” Bryan v. Cano, No. 22-50035, 2022 WL 16756388, at *4 (5th Cir.

Nov. 8, 2022) (cleaned up); accord Bustos v. Martini Club Inc., 599 F.3d 458, 468-69

(5th Cir. 2010) (although “a district court may not grant a motion for summary

judgment merely because it is unopposed,” “[t]he defendants submitted competent

summary judgment evidence showing that there were no genuine issues of fact for

trial,” and the plaintiff “did not respond to the motion for summary judgment in the

district court and therefore failed to carry his burden of showing that material factual

issues existed” and so “cannot now assert that the district court’s reliance on

defendants’ uncontested evidence was improper” (cleaned up)); Williams v. Sake

Hibachi Sushi & Bar, Inc., No. 3:18-cv-517-D, 2020 WL 3317096, at *6 (N.D. Tex.

June 18, 2020) (“As stated above, although the court is not permitted to enter a

‘default’ summary judgment, the court is allowed to accept the evidence adduced by

plaintiffs as undisputed and may grant summary judgment if the motion and

supporting materials show plaintiffs are entitled to it.”).

II. WSFS is entitled to summary judgment on the foreclosure claim.

WSFS asserts a cause of action of “non-judicial foreclosure.” Dkt. No. 22 at 9.

While some courts have found that this is not a viable claim, “a majority of courts …

appear to cut in favor of reading a breach of contract claim into a judicial foreclosure

claim, where only the latter is pleaded.” Ocwen Loan Servicing, LLC v. Kingman

Holdings, LLC, No. 3:18-cv-1197-S, 2019 WL 3802167, at *5 (N.D. Tex. May 31, 2019).

While WSFS does not plead a breach of contract claim in the complaint, it does

mention that the note is a contract and addresses a breach of contract claim in its

Motion for Final Summary Judgment in the section on attorney’s fees. See Dkt. No.

46 at 14, 21.

And, so, the Court will treat the request for non-judicial foreclosure as

containing a breach of contract claim.

A. WSFS meets elements required for non-judicial foreclosure.

“In Texas, to foreclose under a security instrument with a power of sale, the

lender is required to show that: (1) a debt exists; (2) the debt is secured by a lien

created under Texas law; (3) the borrower is in default under the note and security

instrument; and (4) the borrower has been properly served with notice of default and

acceleration.” Dkt. No. 46 at 13; see Singleton v. U. S. Bank Nat’l Ass’n, No. 4:15-cv-

100-A, 2016 WL 1611378, at *7 (N.D. Tex. Apr. 20, 2016) (citation omitted).

WSFS has shown a debt exists. Under the terms of the original loan agreement,

the borrowers were required to make payments each month. See Dkt. No. 47-1 at 14.

The parties entered into a loan modification agreement “dated December 8, 2008,

effective December 1, 2008, which operated to modify the principal balance and

interest rate.” See id. at 43. The parties entered into another loan modification

agreement on March 1, 2019, which again modified the principal balance and interest

rate. See id. at Ex. A-8.

The borrowers executed the Texas Deed of Trust (“Security Instrument”),

granting Long Beach Mortgage Company a lien on the Property to secure the debt.

See id. at 21.

There is a default on the loan. WSFS provides documents showing that

payment is due for March 1, 2022. See id. at 74, 79. In the Notice of Default,

Defendants explained that Defendants needed to make a payment of $4,799.38 by

April 24, 2022, to cure the default. See id. at 64. Defendants made a final payment

April 29, 2022, of $1,383.19, but this did not cure the default. See id. at 69.

WSFS also provides a payoff statement good through January 28, 2024, that

states 233,398.64 is due, showing there is a default. See id. at 110.

The summary judgment evidence shows that WSFS gave the borrowers the

requisite notice.

WSFS provided the borrowers with a Notice of Default dated March 22, 2022,

which stated there was a default, the amount to cure the default, and that if the

borrowers did not cure the default by the cure date, the “Noteholder will accelerate

all payments owing on your Note” which may result in Defendants losing their home.

See id. at 65.

“Under Texas law, a lender may not foreclose on a debt without providing both

a notice of intent to accelerate and a notice of acceleration.” Colbert v. Wells Fargo

Bank, N.A., 850 F. App’x 870, 875 (5th Cir. 2021) (citing Ogden v. Gibraltar Sav.

Ass’n, 640 S.W.2d 232, 234 (Tex. 1982)). And,

[t]o meet the fourth element pertaining to acceleration, Plaintiff must show it

provided Defendant with clear and unequivocal notice of intent to accelerate

and notice of acceleration. Holy Cross Church of God in Christ v. Wolf, 44

S.W.3d 562, 566 (Tex. 2001); see Huston, 988 F. Supp. 2d at 741. “Unless a

lender provides both forms of notice, it may not foreclose.” Wilmington Tr.,

Nat'l Ass'n v. Rob, 891 F.3d 174, 177 (5th Cir. 2018).

Deutsche Bank Nat'l Tr. Co. v. Anthony, No. 4:19-CV-688, 2021 WL 8016157, at *3

(S.D. Tex. Feb. 22, 2021).

The Notice of Default qualifies as a Notice of Intent to Accelerate, since it states

clearly and unequivocally the “Noteholder will accelerate all payments owing on your

Note” if the default is not cured. Dkt. No. 47-1 at 65.

On July 20, 2022, counsel for WSFS notified the borrowers that the maturity

of the debt was now accelerated. See id. at 108.

And so, WSFS has met the elements for judicial foreclosure.

B. WSFS has met the elements for a breach of contract claim.

Under Texas law, to succeed on a breach of contract claim, the plaintiff must

show “(1) the existence of a valid contract; (2) performance or tendered performance

by the plaintiff; (3) breach of the contract by the defendant; and (4) damages

sustained by the plaintiff as a result of the breach.” See Smith Intern., Inc. v. Egle

Group, LLC, 490 F.3d 380, 387 (5th Cir. 2007). The note is a “written contract

between the signatories.” Dkt. No. 46 at 14; see also Express Working Cap., LLC v.

One World Cuisine Grp., LLC, No. 3:15-cv-3792-S, 2018 WL 4214349, at *4 (N.D. Tex.

Aug. 16, 2018).

There is no dispute that the Loan Agreement is a valid contract nor that WFSF

fulfilled its requirements under its terms and the Texas Property Code. See Dkt. No.

46 at 14. WFSF, “through its predecessor, performed under the terms of the Note by

lending the reference 133,376.00.” See id.

The Deed of Trust stated that if the borrowers did not “pay the full amount of

each monthly payment on the date it is due, [they] will be in default.” See Dkt. No.

47-1 at 16. As discussed previously, the Defendants did not pay their monthly

payments, resulting in default. See id. at 110.

WSFS has adequately shown quantifiable damages by including the payment

history of the borrowers and showing the balance owed on the loan. See Dkt. No. 47-

1 at Ex. A10-12; U.S. Bank Nat’l Ass’n as Tr. for Citigroup Mortg. Loan Tr., Inc. 2006-

NC2, Asset Backed Pass Through Certificates Series 2006-NC2 v. Borunda, No. EP-

15-cv-109-PRM, 2016 WL 11578522, at *4 (W.D. Tex. Apr. 18, 2016) (finding the

plaintiff had not shown damages with a reasonable degree of certainty necessary for

breach of contract when they did not include any records of the defendants’ payment

history or records showing there was a specific and certain balance owing on the loan).

WSFS shows that as of January 28, 2024, Defendants owed $233,498.64. See Dkt. No.

47-1 at 110.

And, so, the Defendants breached the contract.

C. WSFS is entitled to a declaration that WSFS has a statutory probate

lien against the Property.

WSFS claims, and the defendants do not dispute, that borrower David Harold

Johnson, Jr. passed away on July 26, 2020, leaving his wife Sonja Renee King-

Johnson as co-borrower and children Desiree L. Renee Johnson and David Harold

Johnson III as heirs. See Dkt. No. 46 at 12; Dkt. No. 14 at 1-2. “No probate was opened

for administration of Decedent’s estate.” Dkt. No. 46 at 12. WSFS claims it has a

statutory probate lien under Texas Estates Code sections 101.001 and 101.051, which

provide that ‘“all of the person’s estate that is devised by the will vests immediately

in the devisees,’ and ‘the estate of a person who dies intestate vests immediately in

the person’s heirs at law’” subject to Section 101.051. Dkt. No. 46 at 20; TEX. ESTATES

CODE §§ 101.001(a)(1), (b).

Under Section 101.051(b), “[a] decedent's estate vests in accordance with

Section 101.001(b) subject to the payment of, and is still liable for: (1) the debts of the

decedent, except as exempted by law[.]” TEX. ESTATES CODE §§ 101.051(b)(1).

WSFS seeks to foreclose its lien and asserts that all the Property, encumbered

by the debt, vested in Defendants as “no probate was ever opened for [David

Johnson’s] estate.” Dkt. No. 22 at 7; see Dkt. No. 46 at 18-19.

“The remedy of one holding an unpaid claim against the estate is to enforce a

statutory lien against the property in the hands of the heirs, devisees, or legatees who

receive estate property.” Ocwen Loan Servicing, LLC v. Deane, No. 4:15-CV-00682-O-

BP, 2017 WL 6816499, at *3 (N.D. Tex. Dec. 1, 2017) (cleaned up).

As discussed in previous sections, WSFS has shown that there was a debt,

secured by the lien, on the Property. See Dkt. No. 46 at 16. And WSFS has alleged

that defendants are Johnson’s heirs. And so, the Court will grant WSFS’s request for

a declaration of its statutory probate lien.

III. WSFS is entitled to proceed with foreclosure as the proper party to enforce

the remedies afforded to the Lender.

WSFS is the proper party to enforce the remedies afforded to the Lender under

the terms of the Loan Agreement.

Under the Texas Property Code, a party has standing to initiate a

nonjudicial foreclosure sale if the party is a mortgagee. See TEX. PROP. CODE

§§ 51.002, 51.0025. A mortgagee includes the grantee, beneficiary, owner, or

holder of a security instrument, such as a deed of trust, or “if the security

interest has been assigned of record, the last person to whom the security

interest has been assigned of record.” Id. § 51.0001(4), (6).

Even if a party does not have a recorded interest in a security

instrument, the party may still have standing to foreclose if the party is the

holder or owner of a note secured by the instrument. This rule derives from the

common law maxim, now codified in Texas, that “the mortgage follows the

note.” See TEX. BUS. & COM. CODE § 9.203(g) (“The attachment of a security

*539 interest in a right to payment or performance secured by a security

interest or other lien on personal or real property is also attachment of a

security interest in the security interest, mortgage, or other lien.”); Campbell

v. Mortg. Elec. Registration Sys., Inc., No. 03–11–00429–CV, 2012 WL

1839357, at *4 (Tex. App. – Austin May 18, 2012, pet. denied) (mem.op.).

EverBank, N.A. v. Seedergy Ventures, Inc., 499 S.W.3d 534, 538 (Tex. App. – Houston

[14th Dist.] 2016, no pet.); TEX. PROP. CODE §§ 51.002, 51.0025.

WSFS qualifies as a “mortgagee” under Chapter 51 of the Texas Property Code.

See TEX. PROP. CODE § 51.0025; see Dkt. No. 46 at 19. WSFS was the last assigned

entity of record of the Deed of Trust. See Dkt. No. 47-1 at 40. And so, WSFS can

properly bring this claim.

IV. WSFS is entitled to reasonable attorneys’ fees.

The Court grants WSFS its reasonable attorneys’ fees in accordance with the

Note, the Deed of Trust, and Section 38.001 of the Texas Civil Practice and Remedies

Code.

“Under Texas law, a party is permitted to recover attorney's fees only if they

are authorized by contract or by statute.” Bank One, Texas, N.A. v. Taylor, 970 F.2d

16, 35 (5th Cir. 1992). Section 38.001 permits reasonable attorneys’ fees if the claim

is for an oral or written contract. See TEX. CIV. PRAC. & REM. CODE § 38.001(8). The

Deed of Trust states that “Lender shall be entitled to collect all expenses incurred in

pursuing the remedies provided in paragraph 21 [acceleration, sale of the property],

including, but not limited to, reasonable attorneys’ fees of 15% of the sums due under

the Note described above or the amount allowable under applicable sate law and costs

of title evidence.” Dkt. No. 46 at 24.

WSFS has not provided any documentation to support its request for attorneys’

fees, so the Court cannot determine what amount of fees would be reasonable. The

Court orders Wells Fargo to file a separate application for attorneys’ fees, no later

than 14 days after entry of a judgment in this case, that establishes the amount of

the reasonable and necessary attorneys’ fees and costs that it has incurred, with

supporting evidence, based on an acceptable method for calculating attorneys’ fees

under the Deed of Trust and the Note at issue in this case.

Because there are no material issues of fact and WSFS has shown beyond

peradventure that every essential element of their claim is met, the Court will grant

WSFS’s Motion for Final Summary Judgment.

Conclusion

The Court GRANTS Plaintiff’s Motion for Final Summary Judgment [Dkt. No.

45] and orders WSFS to proceed with foreclosure. The Court will award WSFS its

attorneys’ fees to be determined by subsequent motion practice as an additional

obligation on the Note only.

SO ORDERED.

DATED: August 30, 2024

DAVIDL.HORAN —

UNITED STATES MAGISTRATE JUDGE

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