Proske v. Barrett Daffin Frappier Truner & Engel, LLP

IN THE UNITED STATES DISTRICT COURT November 06, 2019

FOR THE SOUTHERN DISTRICT OF TEXAS David J. Bradley, Clerk

HOUSTON DIVISION

RICHARD PROSKE and EMILY PROSKE, §

§

Plaintiffs, §

§

VS. § CIVIL ACTION NO. H-19-831

§

BARRETT DAFFIN FRAPPIER §

TRUNER &, ENGEL, LLP and §

WELLS FARGO BANK, N.A, §

§

Defendants. §

MEMORANDUM AND OPINION

In March 2019, Richard Proske and Emily Proske, representing themselves, sued Wells

Fargo Bank, N.A. and Barrett Daffin Frappier Turner & Engel, LLP, alleging wrongful foreclosure

of their home in Cypress, Texas. (Docket Entry No. 1). Wells Fargo and Barrett Daffin moved

for summary judgment, but the Proskes failed to respond, even after the court extended the

response deadline. (Docket Entry Nos. 25, 26, 31, 35, 36). Based on a careful review of the

complaint, the answers, the motions, the record, and the applicable law, the court grants Wells

Fargo’s and Barrett Daffin’s summary judgment motions and enters final judgment by separate

order. The reasons are explained in detail below.

I. Background

In February 2019, the Proskes obtained a $137,244 loan from Advisors Mortgage Group,

LLC, secured by their home in Cypress. (Docket Entry No. 25 at 44, 50). The Proskes executed

a Promissory Note requiring them to pay $779.26 on the first day of each month for 30 years, (Id.

at 44), and a Deed of Trust giving the lender the right to sell the property if the Proskes defaulted.

(Id. at 52). Mortgage Electronic Registration Systems, Inc. was the original beneficiary of the

Deed of Trust. (Id. at 49).

In January 2012, MERS assigned the Deed of Trust to Wells Fargo. (Id. at 65). In August

2012, Wells Fargo granted the Proskes a loan modification, allowing them to pay $715.98 monthly.

(Id. at 67–68). The Proskes then applied to Wells Fargo for loan assistance. (Id. at 3). Wells Fargo

denied their application for lack of necessary documentation. (Id. at 71). The Proskes defaulted.

(Id. at 78, 80).

Wells Fargo appointed Barrett Daffin as substitute trustee to enforce the Deed of Trust.

(Id. at 74). In November 2018, Barrett Daffin sent the Proskes a Notice of Acceleration and a

Notice of Substitute Trustee Sale on Wells Fargo’s behalf. (Id. at 78, 80). The Notice of

Acceleration stated that because the Proskes had defaulted on the loan payments, Wells Fargo had

accelerated the entire debt and scheduled a foreclosure sale of the property for February 5, 2019.

(Id.). Wells Fargo sold the property on that date for $172,000. (Id. at 92). The Harris County

Appraisal District valued the property at $220,5431 as of January 1, 2019. (Id. at 104).

After the foreclosure sale, the Proskes sued Wells Fargo and Barrett Daffin, asserting

Texas-law claims for breach of contract, fraud, slander-of-title, detrimental reliance, and violations

of the Texas Business and Commerce Code, as well as federal claims under the Fair Debt

Collection Practice Act, the Racketeer Influenced and Corrupt Organizations Act, and 42

U.S.C. § 1981. (Docket Entry No. 1). Wells Fargo and Barrett Daffin moved for summary

judgment. (Docket Entry Nos. 25, 26).

1 The estimated land value was $25,082, and the estimated improvement value was $195,461.

II. The Legal Standard for Summary Judgment

“Summary judgment is appropriate only when ‘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.’”

Shepherd on Behalf of Estate of Shepherd v. City of Shreveport, 920 F.3d 278, 282–83 (5th Cir.

2019) (quoting FED. R. CIV. P. 56(a)). “A material fact is one that might affect the outcome of the

suit under governing law,” and “a fact issue is genuine if the evidence is such that a reasonable

jury could return a verdict for the non-moving party.” Renwick v. PNK Lake Charles, L.L.C., 901

F.3d 605, 611 (5th Cir. 2018) (quotations and citations omitted). The moving party “always bears

the initial responsibility of informing the district court of the basis for its motion,” and identifying

the record evidence “which it believes demonstrate[s] the absence of a genuine issue of material

fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

“Where the non-movant bears the burden of proof at trial, ‘the movant may merely point

to the absence of evidence and thereby shift to the non-movant the burden of demonstrating that

there is an issue of material fact warranting trial.’” Kim v. Hospira, Inc., 709 F. App’x 287, 288

(5th Cir. 2018) (alteration omitted) (quoting Nola Spice Designs, L.L.C. v. Haydel Enters., Inc.,

783 F.3d 527, 536 (5th Cir. 2015)). The moving party must demonstrate the absence of a genuine

issue of material fact, but it need not negate the elements of the nonmovant’s case. Austin v.

Kroger Tex., L.P., 864 F.3d 326, 335 (5th Cir. 2017). “If the moving party fails to meet [its] 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) (quoting Kee v. City of Rowlett, 247

F.3d 206, 210 (5th Cir. 2001)).

“When the moving party has met its Rule 56(c) burden, the nonmoving party cannot

survive a summary judgment motion by resting on the mere allegations of its pleadings.” Duffie v.

United States, 600 F.3d 362, 371 (5th Cir. 2010). The nonmovant must identify specific evidence

in the record and articulate “the precise manner in which” that evidence supports that party’s claim.

Willis v. Cleco Corp., 749 F.3d 314, 317 (5th Cir. 2014) (quoting Forsyth v. Barr, 19 F.3d 1527,

1537 (5th Cir. 1994)). “A party cannot defeat summary judgment with conclusory allegations,

unsubstantiated assertions, or only a scintilla of evidence.” Lamb v. Ashford Place Apartments

L.L.C., 914 F.3d 940, 946 (5th Cir. 2019) (quotation omitted). “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). Because the Proskes failed to

respond to Wells Fargo’s and Barrett Daffin’s motions, the issue is “whether the facts presented

by [Wells Fargo and Barrett Daffin] create an appropriate basis to enter summary judgment against

the plaintiff[s].” Id.

III. Analysis2

A. The Breach of Contract and Unconscionability Claims

The Proskes appear to allege that Wells Fargo breached the Promissory Note and the Deed

of Trust by foreclosing. (Docket Entry No. 1 at 3). Under Texas law, the essential elements of a

breach of contract action are: “(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

2 Wells Fargo’s summary judgment evidence includes: (1) Exhibit 1-A: Note dated February 16,

2009; (2) Exhibit 1-B: Deed of Trust dated February 15, 2009; (3) Exhibit 1-C: Corporate Assignment of

Deed of Trust dated January 6, 2012; (4) Exhibit 1-D: Loan Modification Agreement dated August 28,

2012; (5) Exhibit 1-E: Letter to Plaintiffs from Wells Fargo dated June 5, 2017; (6) Exhibit 1-F:

Appointment of Substitute Trustee dated June 28, 2018; (7) Exhibit 1-G: Letter to Richard Proske from

Wells Fargo dated November 26, 2018; (8) Exhibit 1-H: Letter to Emily Proske from Wells Fargo dated

November 26, 2018; (9) Exhibit 1-I: Notice of Substitute Trustee’s Sale; (10) Exhibit 1-J: Substitute

Trustee’s Deed. (Docket Entry No. 25 at 14). Barrett Daffin’s summary judgment evidence includes: (1)

Exhibit A: Affidavit of Connie Vandergriff; (2) Exhibit A-1: Notice of Substitute Trustee’s Sale; (3) Exhibit

A-2: Substitute Trustee’s Deed. (Docket Entry No. 26 at 12).

by the plaintiff as a result of the breach.” Smith Int’l, Inc. v. Egle Grp., LLC, 490 F.3d 380, 387

(5th Cir. 2007) (alteration and quotation omitted).

The undisputed record evidence shows that the Proskes signed the Promissory Note and

the Deed of Trust; they defaulted on the Note; and Wells Fargo sent a Notice of Acceleration and

a Notice of Foreclosure Sale and then foreclosed. (Docket Entry No. 25, Ex. 1-A; 1-B; 1-E).

Because the Proskes defaulted on their mortgage payments before the foreclosure sale, they cannot

recover on a breach of contract claim because of their own failure to perform under the contract.

See Villarreal v. Wells Fargo Bank, N.A., 814 F.3d 763, 767 (5th Cir. 2016); see also Farshchi v.

Wells Fargo Bank, N.A., 2016 WL 2858903, at *4 (S.D. Tex. May 13, 2016) (citing Kaechler v.

Bank of America, N.A., Civ. Action No. H-12-423, 2013 WL 127555, at *3 (S.D. Tex. Jan. 9,

2013)). The Proskes’ allegations do not raise a factual dispute material to determining that Wells

Fargo, as a matter of law, did not breach the contract.

The Proskes also allege that the “contract should be rescinded because the defendant did

not provide full disclosure and because the contract was extremely deceptive and unconscionable.”

(Docket Entry No. 1 at 4). “Texas recognizes both substantive and procedural unconscionability.”

Mattar v. BBVA Compass Bank, N.A., No. 13-16-496-cv, 2018 WL 2440382, at *5 (Tex. App.—

Corpus Christi-Edinburg 2018, no pet.). “Substantive unconscionability refers to the fairness of

the agreement itself, whereas procedural unconscionability refers to the circumstances surrounding

adoption of the agreement.” Id. “The party raising an unconscionability defense must plead and

prove both procedural and substantive unconscionability.” Belanger v. BAC Home Loans

Servicing, L.P., 839 F. Supp. 2d 873, 880 (W.D. Tex. 2011) (citing Ski River Dev., Inc. v. McCalla,

167 S.W.3d 121, 136 (Tex. App.—Waco 2005, pet. denied)). Although the Proskes allege that the

Promissory Note was unfair because the lender did not provide “proper disclosure,” they neither

pointed to nor submitted evidence showing what facts Wells Fargo or the Advisors Mortgage

Group were required, but failed, to disclose, or showing how any failure resulted in

unconscionability. (Docket Entry No. 1 at 4).

In support of their unconscionability claim, the Proskes cite Maxwell v. Fairbanks Capital

Corp. (Docket Entry No. 1 at 4); 281 B.R. 101, 129-30 (Bankr. D. Mass. 2002). The homeowner

in Maxwell alleged that her refinanced mortgage was unconscionable because her 15-year loan

was “flipped” to a five-year loan in under three years, her principal monthly payment increased

while she received no value for refinancing, the monthly payment was 98.5% of her income, and

she was not provided with Truth in Lending Act disclosures. Id. The Maxwell court noted that

“…upon the submission of evidence that disclosures were not made, the burden shifts to the lender

to produce evidence that it or its predecessor provided the requisite disclosures.” Id. at 126. Unlike

homeowner in Maxwell, the Proskes failed to produce or point to any evidence that required

disclosures were not made. Id. There is no factual dispute material to determining that the

Promissory Note here is not unconscionable, as a matter of law. See Prescott v. Wells Fargo Bank,

N.A. (In re Prescott), 2018 Bankr. LEXIS 1206, at *7 (Bankr. S.D. Tex. Apr. 19, 2018); Garcia v.

Universal Mortg. Corp., 2013 WL 1858195, at *10 (N.D. Tex. May 3, 2013); Gengo v. Target

Nat'l Bank, 513 F. Supp. 2d 842, 847-48 (S.D. Tex. 2007).

Summary judgment is granted on the Proskes’ contract breach and unconscionability

claims.

B. Wells Fargo’s Standing to Foreclose

The Proskes also allege that “[t]he Attorney who signed the ‘notice of default’ document

to execute the power of sale clause did not have standing.” (Docket Entry No. 1 at 4). It appears

that the Proskes are challenging the validity of MERS’s assignment of the loan documents to Wells

Fargo, but the argument fails. (Docket Entry No. 1 at 4). To challenge an assignment, the

homeowner must assert a defect that would make the assignment void, not merely voidable.

EverBank, N.A. v. Seedergy Ventures, Inc., 499 S.W.3d 534, 542 (Tex. App.—Houston [14th Dist.]

2016, no pet.). “Under Texas law, . . . any lack of authority would make the assignment voidable,”

not void. Antony v. United Midwest Sav. Bank, No. H-15-1062, 2016 WL 914975, at *3 (S.D.

Tex. Mar. 10, 2016).

The undisputed record evidence shows that MERS, the beneficiary of the Deed of Trust,

had the authority to assign its rights under the Deed of Trust to Wells Fargo. (Docket Entry No.

25 at 49); see Martins v. BAC Home Loans Serv., L.P., 722 F.3d 249, 255 (5th Cir. 2013) (a

mortgagee such as MERS has authority “to grant the mortgage servicer the authority to foreclose”

or “to bring the foreclosure action itself”); Burton v. Nationstart Mortg., LLC, 642 F. App’x 422,

425 (5th Cir. 2016); Blair v. Deutsche Bank Nat’l Tr. Co., 609 F. App’x 767, 769 (5th Cir. 2015).

The record evidence shows that the Proskes signed and agreed to the Note and Deed; they defaulted

and did not cure the default; they received a Notice of Acceleration and Notice of Foreclosure

Sale; and a substitute trustee deed was issued and recorded. The Proskes did not submit or point

to record evidence raising an inference that MERS’s assignment to Wells Fargo was invalid or

void.

The Proskes also argue that Wells Fargo did not have a right to foreclose because it failed

to “register the [Promissory Note or the Deed of Trust] to establish a security interest in the

financial asset,” which they allege was needed to be a secured creditor. (Docket Entry No. 1 at 5).

Wells Fargo submitted uncontroverted evidence showing that the assignment of the Deed of Trust

was registered with the Harris County Clerk. (Docket Entry No. 25 at 65). The Proskes did not

point to a contract provision or other authority requiring Wells Fargo to register the Promissory

Note before scheduling a foreclosure sale based on the borrowers’ default.

There was no factual dispute material to determining that Wells Fargo had standing to

foreclose, as a matter of law. Summary judgment on the Proskes’ claims relating to Wells Fargo’s

right and standing to foreclose is granted.

C. The Fraud Claims

The Proskes asserted a fraudulent-inducement claim. (Docket Entry No. 1 at 5). “Fraud

claims that depend on the existence of an enforceable contract are properly styled as fraudulent

inducement claims, not common law fraud claims.” Bohnsack v. Varco, L.P., 668 F.3d 262, 277

(5th Cir. 2012) (applying Texas law). “[W]ith a fraudulent inducement claim, the elements of

fraud must be established as they relate to an agreement between the parties.” Id. (quoting Haase

v. Glazner, 62 S.W.3d 795, 798 (Tex. 2001)). The fraudulent-inducement claim requires the

Proskes to show that: (1) the lenders made a misrepresentation; (2) the lenders knew the

representation was false and they intended to induce the Proskes to agree to the loan through that

misrepresentation; (3) the Proskes relied on the misrepresentation in agreeing to the loan; and (4)

the reliance led them to suffer injury. Id.

The Proskes also allege fraud by nondisclosure. (Id. at 4). To establish a fraud-by-

nondisclosure claim, a plaintiff must submit or point to record evidence creating factual disputes

material to determining whether: “(1) the defendant failed to disclose facts to the plaintiff; (2) the

defendant had a duty to disclose those facts; (3) the facts were material; (4) the defendant knew

the plaintiff was ignorant of the facts and the plaintiffs did not have an equal opportunity to

discover the facts; (5) the defendant was deliberately silent when it had a duty to speak; (6) by

failing to disclose the facts, the defendant intended to induce the plaintiff to take some action or

retain from acting; (7) the plaintiff relied on the defendant’s nondisclosure; and (8) the plaintiff

was injured as a result of acting without that knowledge.” Horizon Shipbuilding, Inc. v. BLyn II

Holding, LLC, 324 S.W.3d 840, 849–50 (Tex. App.—Houston [14th Dist.] 2010, no pet.).

The Proskes’ fraud allegations are both conclusory and inadequate. They allege that “[t]he

promissory note used to gain the court’s jurisdiction in the wrongful foreclosure is fraudulent, the

document was used in court as a security when it was never registered.” (Docket Entry No. 1 at

5). The Proskes also contend that Wells Fargo and Barrett Daffin “did not provide full disclosure.”

(Id. at 4). The Proskes did not submit or point to record evidence of false statements Wells Fargo

or the Advisors Mortgage Group made; whether the allegedly false statements were material; or

whether the defendants made these statements with the intent to induce them to sign the loan

documents. As discussed above, no allegations or evidence support the fraud-by-nondisclosure

claim. And the claim of an unregistered promissory note neither alleges or provides evidence of

fraud. Because no material factual dispute is present, summary judgment dismissing the Proskes’

fraud claims is granted.

D. The Wrongful Foreclosure Claim

A wrongful foreclosure claim arises from “a defect in the foreclosure sale proceedings”

that causes “a grossly inadequate selling price.” Sauceda v. GMAC Mortg. Corp., 268 S.W.3d

135, 139 (Tex. App.—Corpus Christi 2008, no pet.); BAC Home Loans Serv., LP v. Tex. Realty

Holdings, LLC, 901 F. Supp. 2d 884, 909 (S.D. Tex. 2012). The Proskes have not made factual

allegations or submitted or identified summary judgment evidence showing defects in the

foreclosure sale proceedings. Nor did they submit or point to record evidence showing that the

sale price at foreclosure was grossly inadequate. See Gainesville Oil & Gas Co. v. Farm Credit

Bank of Tex., 847 S.W.2d 655, 663 (Tex. App.—Texarkana 1993, no writ). Instead, the Proskes

argue that the defendants lacked standing to foreclose and that Wells Fargo, “who invoked the

power of sale [,] was not the true beneficiary.” (Docket Entry No. 1 at 6).

If a plaintiff fails to allege that a defendant disposed of their property at a “grossly

inadequate selling price,” then summary judgment on their wrongful-foreclosure claim is proper.

See Ericson v. Resurgent Capital Servs., L.P., 622 F. App’x 342, 345 (5th Cir. 2015) (citing Miller

v. BAC Home Loans Servicing, L.P., 726 F.3d 717, 727 (5th Cir. 2013)); see also Villarreal v.

Wells Fargo Bank, N.A., 814 F.3d 763, 768 (5th Cir. 2016). For the reasons discussed, there is no

factual dispute material to determining that Wells Fargo had standing and the right to foreclose.

Summary judgment on this issue is granted.

E. The RICO Claim

The Proskes appear to allege that Wells Fargo’s foreclosure practice violated the Racketeer

Influenced and Corrupt Organization Act. 18 U.S.C. § 1962. (Docket Entry No. 1 at 5–6). “RICO

creates a civil cause of action for ‘[a]ny person injured in his business or property by reason of a

violation of section 1962.’” Brown v. Protective Life Ins. Co., 353 F.3d 405, 407 (5th Cir. 2003)

(quoting 18 U.S.C. § 1964(c)). “To state a civil RICO claim under any subsection in 18 U.S.C.

§ 1962, ‘there must be: (1) a person who engages in (2) a pattern of racketeering activity (3)

connected to the acquisition, establishment, conduct, or control of an enterprise.’” Jackson v.

NAACP, 546 F. App’x 438, 41–42 (5th Cir. 2013). “A pattern of racketeering activity requires

two or more predicate acts and a demonstration that the racketeering predicates are related and

amount to or pose a threat of continued criminal activity.’” Brown, 33 F.3d at 407.

The Proskes did not allege facts or identify summary judgment evidence showing that

Wells Fargo engaged in a predicate criminal offense that amounted to a pattern of racketeering

activity. Their conclusory allegation that Wells Fargo did not have right to foreclose does not raise

a factual dispute material to determining the lack of a RICO violation, as a matter of law. Summary

judgment is granted dismissing this claim.

F. The Slander-of-Title Claim

The Proskes allege that the defendants impaired their property title by recording certain

documents, including the Notice of Trustee Sale. (Docket Entry No. 1 at 6–7). Under Texas law,

a slander-of-title claim requires a plaintiff to allege: “(1) the uttering and publishing of disparaging

words; (2) falsity; (3) malice; (4) special damages; (5) possession of an estate or interest in the

property disparaged; and (6) the loss of a specific sale.” Van Duzer v. U.S. Bank Nat. Ass’n, 995

F. Supp. 2d 673, 695 (S.D. Tex. 2014) (citing Williams v. Jennings, 755 S.W.2d 874, 879 (Tex.

App.—Houston 1988, writ ref’d); Kallie v. Citi Residential Lending, Inc., No. H-18-4238, 2019

WL 398145, at *3 (S.D. Tex. Jan. 31, 2019).

The Proskes’ claim appears to be based on Wells Fargo’s alleged lack of standing to

foreclose on the Note and sell the property in default. But the undisputed record evidence shows

that the Proskes signed the Deed of Trust and the Promissory Note, giving Wells Fargo the right

to sell the property when they defaulted. Wells Fargo foreclosed and sold the property after the

Proskes defaulted on the loan. (Docket Entry No. 25 at 78–80). Because the Proskes did not raise

a factual dispute that could support a slander-of-title claim, summary judgment dismissing this

claim is granted.

G. The Intentional and Negligent Infliction of Emotional Distress

The Proskes assert that Wells Fargo is liable for negligent and intentional infliction of

emotional distress. Texas does not recognize a “duty not to negligently inflict emotional distress.”

Boyles v. Kerr, 855 S.W.2d 593, 597 (Tex. 1993). Texas requires a plaintiff alleging infliction of

emotional distress to show that (1) the defendant acted intentionally or recklessly; (2) the

defendant’s conduct was extreme and outrageous; (3) the defendant’s actions caused plaintiffs

emotional distress; and (4) the emotional distress was severe. Kroger Tex. Ltd. P’Ship v. Suberu,

216 S.W.3d 788, 796 (Tex. 2006). Conduct is “extreme and outrageous” only if it is “so outrageous

in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be

regarded as atrocious, and utterly intolerable in a civilized community.” Id. (quoting Twyman v.

Twyman, 855 S.W.2d 619, 621 (Tex. 1993)). The record evidence does not support an inference

that the Proskes’ emotional distress was severe or that the defendants’ conduct was “extreme and

outrageous.” See Rodriguez v. Wells Fargo Bank, N.A., No. No. 7:18-cv-109, 2019 WL 528719,

at *7 (S.D. Tex. Feb. 11, 2019); White v. Ameriquest Mortgage, No. H-18-4013, 2019 WL

2297572, at *8 (S.D. Tex. May 30, 2019). Summary judgment is granted on this claim.

H. The Texas Deceptive Trade Practices Act Claim

The Proskes allege that the defendants violated the Texas Deceptive Trade Practices Act.

To establish a DTPA claim, the plaintiffs must show that: “(1) [they are] consumer[s], (2) the

defendant engaged in false, misleading, or deceptive acts, and (3) these acts constituted a

producing cause of the consumer[s]’ damages.” Payne v. Wells Fargo Bank Nat. Ass’n, 637 F.

App’x 833, 837 (5th Cir. 2016) (citing Doe v. Boys Clubs of Greater Dall., Inc., 907 S.W.2d 472,

478 (Tex. 1995)). A mortgagor qualifies as a consumer under the DTPA if “his or her primary

objective in obtaining the loan was to acquire a good or service, and that good or service forms the

basis of the complaint.” Miller v. BAC Home Loans Servicing, L.P., 726 F.3d 717, 725 (5th Cir.

2013). But if loan servicing or loan administration are at issue, mortgagors are not DPTA

consumers. Payne, 637 F. App’x at 837; Woods v. Bank of Am., N.A., No. 3:11-cv-1115, 2012

WL 1344343, at *7 (N.D. Tex. Apr. 17, 2012).

The Proskes’ allegations and evidence show that, as a matter of law, they were not DTPA

consumers as to the challenged actions. See, e.g., Garcia v. Loancare, LLC, No. 3:17-cv-343,

2018 WL 3614813, at *6 (S.D. Tex. June 25, 2018) (“[I]t is well-recognized that loan service

activities are so distinct from the initial real estate purchase that they do not satisfy the ‘goods and

services’ requirement to confer ‘consumer’ status.”); Fowler v. U.S. Bank, N.A., 2 F. Supp. 3d 965,

974 (S.D. Tex. 2014) (“Because the basis of [the plaintiffs’ DTPA] claim is subsequent loan

servicing and foreclosure activities, rather than goods and services acquired in the original loan

transaction, [the plaintiffs] are not consumers under the DTPA with regard to this claim.”). And

there is no record evidence creating a factual dispute material to determining whether Wells Fargo

and Daffin Frappier “engaged in false, misleading, or deceptive acts” that caused the Proskes’

injury. Summary judgment is granted dismissing the Proskes’ DTPA claims.

I. The Fair Debt Collection Practices Act Claim

The Proskes also allege that Wells Fargo and Barrett Daffin Frappier violated the Fair Debt

Collection Practices Act, 15 U.S.C. § 1692 et seq. To survive the summary judgment motion, the

Proskes must point to or submit evidence showing that the defendants were “debt collectors” under

the Act. Mortgage lenders or their assignees are not debt collectors under the Fair Debt Collection

Practices Act, “as long as the debt was not in default at the time it was assigned.”

Preston v. Seterus, Inc., 931 F. Supp. 2d 743, 765 (N.D. Tex. 2013) (quoting Perry v. Stewart Title

Co., 756 F.2d 1197, 1208 (5th Cir. 1985)); see also Montgomery v. Wells Fargo Bank, N.A., 459

F. App’x 424, 428 n.1 (5th Cir. 2012) (citing Williams v. Countrywide Home Loans, Inc., 504 F.

Supp. 2d 176, 190 (S.D. Tex. 2007) aff’d, 269 F. App’x 523 (5th Cir. 2008)). The Proskes failed

to submit or point to any record evidence showing that Wells Fargo was a “debt collector” under

the Fair Debt Collection Practices Act, or that Wells Fargo received the loan assignment after the

Proskes defaulted. Summary judgment is granted dismissing the Fair Debt Collection Practices

Act claim.

J. The Section 1981 Claims

The Proskes argue that the defendants violated their 42 U.S.C. § 1981 rights, because as

corporations, the defendants “cannot sign . . . [or] enter into any contract, with an attorney.”

(Docket Entry No. 1 at 7). The Proskes cite no authority to support their argument, and they did

not allege racial discrimination. Summary judgment is granted on this claim.

K. Barrett Daffin’s Summary Judgment Motion

Barrett Daffin argues that summary judgment is proper because the law firm was “retained

as legal counsel to assist Wells Fargo with the foreclosure of the Property,” and it was immune

from suit arising from conduct undertaken in its capacity as Wells Fargo’s attorney. (Docket Entry

No. 26 at 14).

“[A]ttorneys are generally immune from suits brought under Texas law against them by

their adversaries if the action arises out of duties involved in representing a client.” Rojs v. Wells

Fargo Bank, N.A., 571 F. App’x 274, 278 (5th Cir. 2014) (per curiam). Foreclosure counsel such

as Barrett Daffin generally has immunity in a mortgagor’s action challenging a foreclosure. See,

e.g., Lassberg v. Bank of America, N.A., 660 F. App’x 262, 267 (5th Cir. 2016); Iqbal v. Bank of

America, N.A., 559 F. App’x 363, 365–66 (5th Cir. 2014); Campbell v. Mortg. Elec. Registration

Sys., Inc., No. 03-11-429-cv, 2012 WL 1839357, at *5–*6 (Tex. App.—Austin, May 18, 2012,

pet. Denied). Barrett Daffin is entitled to summary judgment on both immunity grounds and, as

explained above, on the merits of the claims.

IV. Conclusion

Wells Fargo’s and Barrett Daffin’s summary judgment motions, (Docket Entry Nos. 25,

26), are granted. Final judgment is separately entered.

SIGNED on November 6, 2019, at Houston, Texas.

LW Orven lo

Lee H. Rosenthal

Chief United States District Judge

15