Daniels v. PennyMac Loan Services, LLC

UNITED STATES DISTRICT COURT June 07, 2023

SOUTHERN DISTRICT OF TEXAS Nathan Ochsner, Clerk

HOUSTON DIVISION

DAVID LEE DANIELS, III §

§

Plaintiff, §

VS. § CIVIL ACTION NO. 4:22-CV-199

§

PENNYMAC LOAN SERVICES, LLC, et §

al., §

§

Defendants. §

MEMORANDUM OPINION AND ORDER

This is a wrongful foreclosure case in which Plaintiff David Lee Daniels, III

(“Daniels”), proceeding pro se and in forma pauperis, originally sued 13 defendants. The

Court dismissed six of the defendants under Federal Rule of Civil Procedure 12(b)(6). (Dkt.

95). The remaining seven defendants have now filed a total of five motions for summary

judgment, to which Daniels has responded. The Court has considered the briefing, the

record, and the applicable law. All of the pending motions for summary judgment (Dkt.

101; Dkt. 102; Dkt. 103; Dkt. 113; Dkt. 114) are GRANTED.

FACTUAL AND PROCEDURAL BACKGROUND

As the Court discussed in its opinion granting six defendants’ motions to dismiss

under Rule 12(b)(6), this lawsuit involves two distinct matters: (1) a nonjudicial foreclosure

proceeding initiated against Daniels’s home by Defendant Pennymac Loan Services, LLC

(“Pennymac”); and (2) a judicial foreclosure action brought against Daniels in Texas state

court by Cypresswood Lake Community Association, Inc. (“Cypresswood Lake”) on the

basis of unpaid homeowner association (“HOA”) dues. However, no party has requested

severance under Federal Rule of Civil Procedure 21, and the Court has kept the claims

together under this cause number in the interest of judicial economy. The following facts

are established by uncontroverted evidence in the summary judgment record.

—The Pennymac foreclosure

In August of 2016, Daniels took out a mortgage loan1 with Defendant SWBC

Mortgage Corporation (“SWBC”). (Dkt. 114-2; Dkt. 114-7). Daniels executed a note and

a deed of trust; the deed of trust stated that Mortgage Electronic Registration Systems, Inc.

(“MERS”), acting as SWBC’s nominee, was the beneficiary of the deed of trust. (Dkt. 114-

7 at p. 2). The loan was secured by Daniels’s home, which was located at 19922

Cypresswood Square in Spring, Texas. (Dkt. 114-7 at pp. 2–3).

In 2018, Pennymac bought Daniels’s loan. (Dkt. 114-6). Pennymac began servicing

Daniels’s loan in November of 2018; and MERS recorded an assignment of the deed of

trust to Pennymac in the real property records of Harris County, Texas in April of 2019.

(Dkt. 114-6 at p. 3; Dkt. 114-8). Pennymac sent two letters to Daniels in November of 2018

informing Daniels of the sale of the loan and notifying him that he should begin making

loan payments to Pennymac. (Dkt. 113-1 at pp. 24–31, 33–34).

Shortly after Pennymac took over servicing responsibility for Daniels’s loan,

Daniels fell behind on his payments; and Pennymac sent him a notice of default and intent

to accelerate in December of 2018 and another such notice in January of 2019. (Dkt. 113-

1 at pp. 78, 106). In response to the default notices, Daniels made a partial payment to

1 Daniels’s ex-wife took out the loan with him; but she relinquished her interest in the subject

property after she and Daniels divorced, and she is not a party to this action. (Dkt. 101-12).

Pennymac and began, but did not complete, two applications for a loan modification

program. (Dkt. 113-1 at pp. 100, 118, 132). In May of 2019, Pennymac sent Daniels a

notice of acceleration and nonjudicial foreclosure sale. (Dkt. 113-1 at pp. 137–140).

After receiving the foreclosure notice, Daniels submitted a complete application for

a loan modification program. (Dkt. 113-1 at pp. 147–57). In a written statement attached

to the loan modification application and addressed to “Pennymac Modification

Assistance,” Daniels explained that he had been laid off in July of 2018 and again in March

of 2019 but had gotten another job in April of 2019. (Dkt. 113-1 at p. 157). Daniels made

another partial payment to Pennymac in July of 2019, and Pennymac informed him later

that month that his loan modification application had qualified him for a loan modification

trial payment plan. (Dkt. 113-1 at pp. 164, 167).

In order to successfully complete the loan modification trial payment plan, Daniels

was required to make three monthly payments. (Dkt. 113-1 at p. 168). Successful

completion of the trial payment plan would qualify Daniels for a permanent loan

modification plan. (Dkt. 113-1 at pp. 167–68). Daniels sent Pennymac a check for his first

payment, but Pennymac sent a letter to Daniels notifying him that the check bounced. (Dkt.

113-1 at p. 176). After Daniels failed to tender his first payment by the due date, Pennymac

informed Daniels by letter that he did not qualify for a permanent loan modification plan

because he had not made his trial plan payments as required. (Dkt. 113-1 at p. 179).

Pennymac then sent Daniels another notice of acceleration and nonjudicial

foreclosure sale in November of 2021. (Dkt. 113-1 at pp. 184–88). The foreclosure sale

was scheduled for January 4, 2022. (Dkt. 113-1 at pp. 184–88). On January 3, 2022, Daniels

sent Pennymac a United States Postal Service money order in the amount of $1.00 on which

Daniels had handwritten “Accept for value tendered of $274,906.00”:

a SINE ORY AEST BS □□□ eS: OEY A oa Cc var =P □□□ □□

LQ □□ Sefamanber EE ete oy “setae us.potsanttens □□

“27351871020 ets ERE $1.90

Br eg ede, RL Delt and 0000 arson | Peseta

i: Leon □□□ [005829 Secs Accom: for value rendered of 796 □□□

hoon * oe GCE SETS good Feu out □□□□□□□□□

IPENAIVMACL page SE) VEE ES Holle Fin die caurie) © es

thesiee 19, 48 Slat 12 HORI OTE He 31S & Hos 2) WEE 3-30, 3-3Y RCE 3-104 □

Dkt. 113-1 at pp. 196—200.

Daniels apparently believed, or somehow hoped that Pennymac would believe, that

the money order would pay off his loan and stave off foreclosure. In a letter that

accompanied the money order, Daniels wrote, “This document instructs PENNYMAC

LOAN SERVICES as the HOLDER IN DUE COURSE to accept and enforce this

POSTAL MONEY ORDER as a negotiable instrument for value of $274,906.00[.]” (Dkt.

113-1 at p. 199). Daniels further wrote in the letter that his loan was now “paid in full

showing a final balance of ‘0’ (zero)” and that “[t]he auction set to take place on the real

property of 19922 Cypresswood Square, Spring, TX 77373 on 01/04/2022” could “not take

place or proceed” without his consent. (Dkt. 113-1 at p. 199).

Pennymac returned the $1.00 payment and moved forward with the foreclosure sale.

(Dkt. 113-1 at pp. 202, 207). Defendant ZLOS Investment Trust (“ZLOS”) bought

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Daniels’s house at the foreclosure sale. (Dkt. 113-1 at p. 207). Defendant Sam Sorour

(“Sorour”) is a trustee for ZLOS. (Dkt. 103-1 at p. 1).

Daniels refused to vacate the property, and ZLOS filed a forcible detainer action

against him in Texas state court. (Dkt. 103-8; Dkt. 103-9). ZLOS prevailed in its forcible

detainer suit; and the Texas state court awarded possession of the home, along with

$10,000.00 for rent and $2,500.00 for attorney’s fees, to ZLOS. (Dkt. 103-9).

—The HOA lawsuit

In addition to missing mortgage payments, Daniels fell behind on his HOA dues

beginning in 2019. (Dkt. 101-5). Cypresswood Lake sent Daniels a letter in March of 2019

notifying him that his HOA account was in arrears; that “the account w[ould] continue to

accrue interest and administrative cost[s] monthly[;]” and that Cypresswood Lake would

commence collection proceedings if Daniels did not either bring his account current or

make a minimum payment within 30 days. (Dkt. 101-4 at pp. 3–4). The letter included an

itemized account statement. (Dkt. 101-4 at p. 5). There is no response from Daniels in the

record.

Cypresswood Lake retained Defendant Roberts Markel Weinberg Butler Hailey,

P.C. (“RMWBH”) to continue its collection efforts. (Dkt. 101-6 at p. 1). In October of

2019, RMWBH sent Daniels a demand letter stating that Daniels owed Cypresswood Lake

$2,086.90 in delinquent dues and assorted administrative costs. (Dkt. 101-6). The letter

notified Daniels that “further legal action w[ould] be taken” if he did not either pay the

debt or “make other payment arrangements acceptable to [Cypresswood Lake]” within 30

days. (Dkt. 101-6 at pp. 1–2). The letter also stated that Daniels could dispute the debt

within 30 days, in which case RMWBH would mail verification of the debt to Daniels.

(Dkt. 101-6 at p. 1). There is no response from Daniels in the record.

On February 27, 2020, Cypresswood Lake, represented by RMWBH, filed a judicial

foreclosure action against Daniels in Texas state court. (Dkt. 101-7). Cypresswood Lake’s

state-court pleading itemized the dues payments, administrative fees, interest, and

attorney’s fees that Daniels owed. (Dkt. 101-7 at p. 7). Cypresswood Lake moved for

summary judgment. See case number 2020-13172 in the 133rd Judicial District Court of

Harris County, Texas. In opposing Cypresswood Lake’s summary judgment motion,

Daniels filed two lengthy briefs containing incoherent passages like these:

Notice, it is Fact, affiant is aware and has personal knowledge of mistaken identity against

DAVID LEE DANIELS III.

Notice, it is a Fact, affiant is aware that the Court lacks all jurisdiction over the subject

matter and territorial jurisdiction.

Notice, it is a Fact, affiant is aware that the Court can only legislate to exercise like Authority

over all Places purchased by the Consent of the Legislature of the State in which the Same

shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful

Buildings. It is Fact that the affiant and property does not fall under this authority nor

territory.

Notice it is Fact, the affiant has reason to believe and do so believe that “$” has no

legal/lawful definition. Notice it is Fact, affiant is aware that someone without recourse

against another party cannot sue that party and cannot get adequate relief. See Exhibit -C

(Amounts Secured By The Association’s Lien & TOTAL AMOUNT DUE “3,439.92”) See

Exhibit -D (TOTAL AMOUNT DUE “$5,345.70”)

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On the date of October 25th, 2021, David Lee Daniels III, agent for principal DAVID LEE

DANIELS III came before me today present as the affiant, Consumer in Fact being (Non

entity/non debtor) under oath to the most high of creation only and provided the facts listed

herein David Lee Daniels II] Sworn to or Affirmed by and subscribed before me on the 25th

day of, October year 2021.

Dkt. 101-2 at pp. 1, 2, 5, 7; Dkt. 101-3.

Before the Texas state court ruled on Cypresswood Lake’s motion for summary

judgment, Pennymac conducted its foreclosure sale. Considering its lien extinguished by

the foreclosure sale, Cypresswood Lake voluntarily dismissed its judicial foreclosure

action against Daniels. (Dkt. 101-13).

—Daniels’s responses to Defendants’ motions for summary judgment

As the Court noted in a previous opinion in this case, Daniels’s pleadings are often

difficult to follow. Similarly, Daniels’s responses to Defendants’ motions for summary

judgment provide little clarity as to what exactly Daniels’s claims are; and even when those

responses are comprehensible, they are unsupported by citations to evidence in the record.

The Court can see that, as to the Pennymac foreclosure, a central pillar of Daniels’s claims

is his argument that Pennymac lacked the power to foreclose because the assignment of the

deed of trust by MERS to Pennymac was invalid. (Dkt. 116 at p. 4). In Daniels’s estimation,

the assignment’s supposed invalidity nullifies ZLOS’s purchase of Daniels’s home at the

foreclosure sale. (Dkt. 116 at p. 4).

SWEC did not foreclose on Daniels’s home, but Daniels contends that SWBC

“fraudulently issued [him] a Farm Ownership Loan under the Consolidated Farm and Rural

Development Act” and also “violated the Truth in Lending Act” by depriving him of a

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statutory right to rescission and failing to give him notice of the assignment of the deed of

trust to Pennymac. (Dkt. 117 at p. 2). Daniels further contends that SWBC was obligated

to inform him of the securitization of his loan. (Dkt. 117 at p. 4).

With regard to the lawsuit over his HOA dues, Daniels contends that RMWBH and

two of its lawyers, Defendants Noelle Hicks (“Hicks”) and Cliff Davis (“Davis”)

(collectively “the HOA defendants”), violated the federal Fair Debt Collection Practices

Act (“FDCPA”) “by attempting to obtain assessment fees for the HOA without the prior

consent of the consumer given directly to the debt collector or the express permission of a

court of competent jurisdiction.” (Dkt. 104 at p. 4). Daniels also argues that the HOA

defendants’ demand letter violated the FDCPA because it was “unfair” and “not truthful[.]”

(Dkt. 104 at p. 5).

Daniels also contends that the Court must deny four of Defendants’ motions because

“the parties have not engaged in meaningful discovery[.]” (Dkt. 104 at p. 6; Dkt. 105 at p.

6; Dkt. 116 at p. 5). Daniels does not make this argument in his response to SWBC’s

motion. (Dkt. 117).

LEGAL STANDARD

Federal Rule of Civil Procedure 56 mandates the entry of summary judgment, after

adequate time for discovery and upon motion, against a party who fails to make a sufficient

showing of the existence of an element essential to the party’s case and on which that party

will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

In deciding a motion for summary judgment, the Court must determine whether the

pleadings, the discovery and disclosure materials on file, and any affidavits show that there

is no genuine issue as to any material fact and that the movant is entitled to judgment as a

matter of law. Id. at 322–23.

For summary judgment, the initial burden falls on the movant to identify areas

essential to the non-movant’s claim in which there is an absence of a genuine issue of

material fact. Lincoln Gen. Ins. Co. v. Reyna, 401 F.3d 347, 349 (5th Cir. 2005). The

movant, however, need not negate the elements of the non-movant’s case. See Boudreaux

v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005). The movant may meet its burden

by pointing out the absence of evidence supporting the non-movant’s case. Duffy v.

Leading Edge Products, Inc., 44 F.3d 308, 312 (5th Cir. 1995).

If the movant meets its initial burden, the non-movant must go beyond the pleadings

and designate specific facts showing that there is a genuine issue of material fact for trial.

Littlefield v. Forney Indep. Sch. Dist., 268 F.3d 275, 282 (5th Cir. 2001). “An issue is

material if its resolution could affect the outcome of the action. A dispute as to a material

fact is genuine if the evidence is such that a reasonable jury could return a verdict for the

nonmoving party.” DIRECT TV Inc. v. Robson, 420 F.3d 532, 536 (5th Cir. 2006)

(quotation marks and footnote omitted).

In deciding whether a genuine and material fact issue has been created, the facts and

inferences to be drawn from those facts must be reviewed in the light most favorable to the

non-movant. Reaves Brokerage Co. v. Sunbelt Fruit & Vegetable Co., 336 F.3d 410, 412

(5th Cir. 2003). However, factual controversies are resolved in favor of the non-movant

“only when both parties have submitted evidence of contradictory facts.” Alexander v.

Eeds, 392 F.3d 138, 142 (5th Cir. 2004) (citation and quotation marks omitted). The non-

movant’s burden is not met by mere reliance on the allegations or denials in the non-

movant’s pleadings. See Diamond Offshore Co. v. A & B Builders, Inc., 302 F.3d 531, 545

n.13 (5th Cir. 2002). Likewise, “conclusory allegations” or “unsubstantiated assertions” do

not meet the non-movant’s burden. Delta & Pine Land Co. v. Nationwide Agribusiness Ins.

Co., 530 F.3d 395, 399 (5th Cir. 2008). Instead, the non-movant must present specific facts

which show the existence of a genuine issue concerning every essential component of its

case. Am. Eagle Airlines, Inc. v. Air Line Pilots Ass’n, Int’l, 343 F.3d 401, 405 (5th Cir.

2003). In the absence of any proof, the Court will not assume that the non-movant could

or would prove the necessary facts. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.

1994) (en banc). And Rule 56 does not impose upon the Court a duty to sift through the

record in search of evidence to support a party’s opposition to summary judgment;

evidence not referred to in the response to the motion for summary judgment is not properly

before the Court, even if it exists in the summary judgment record. Malacara v. Garber,

353 F.3d 393, 405 (5th Cir. 2003).

Although Daniels is proceeding pro se, “[t]he notice afforded by the Rules of Civil

Procedure and the local rules” is considered “sufficient” to advise pro se parties of their

burden in opposing a summary judgment motion. Martin v. Harrison County Jail, 975 F.2d

192, 193 (5th Cir. 1992).

ANALYSIS

The Court now turns to Daniels’s responses to Defendants’ motions for summary

judgment.

—SWBC

SWBC was Daniels’s original lender. The summary judgment record reflects that

SWBC did not play any role in either the foreclosure on Daniels’s house or the dispute

over Daniels’s HOA assessments. Daniels acknowledges these facts but contends that “the

Real Estate Loan process is void ab initio” because SWBC “fraudulently issued [him] a

Farm Ownership Loan under the Consolidated Farm and Rural Development Act” and also

“violated the Truth in Lending Act” by depriving him of a statutory right to rescission and

failing to give him notice of the assignment of the deed of trust to Pennymac. (Dkt. 117 at

p. 2). Daniels further contends that SWBC was obligated to inform him of the securitization

of his loan. (Dkt. 117 at p. 4). These arguments do not create a triable fact issue regarding

Daniels’s obligation to make his mortgage payments.

i. The nature of Daniels’s loan

First, there is no evidence in the record showing that Daniels’s loan was a farm

ownership loan, and there is evidence to the contrary. The summary judgment record

contains a schedule of pooled mortgages that includes Daniels’s loan. (Dkt. 114-4 at p. 2).

Some of those mortgages are indeed “Rural Development” mortgages—they carry the

designation “RD” on the schedule—but Daniels’s loan is listed as a Federal Housing

Administration mortgage, not a rural development mortgage. (Dkt. 114-4 at p. 2).2 Daniels

does not point to any summary judgment evidence controverting the schedule.

2 The schedule of pooled mortgages in the summary judgment record lists some of the mortgages,

including Daniels’s, that comprise Government National Mortgage Association (“Ginnie Mae”)

In any event, Daniels does not explain how the nature of his loan has anything to do

with his responsibility to make mortgage payments as required by the agreements that he

executed. Daniels’s argument regarding the nature of his loan does not create a genuine

issue of material fact.

ii. The Truth in Lending Act

Daniels next contends that SWBC “violated the Truth in Lending Act” by depriving

him of a statutory right to rescission and failing to give him notice of the assignment of the

deed of trust to Pennymac. (Dkt. 117 at p. 2).

The rescissory rights that Daniels attempts to invoke are set forth in 15 U.S.C. §

1635(a) and 12 C.F.R. § 1026.23. The statute and regulation provide for a three-day period

in which an obligor may rescind certain consumer credit transactions, and they require

creditors to “clearly and conspicuously disclose” that right to rescind to the obligor. See 15

U.S.C. § 1635(a); see also 12 C.F.R. § 1026.23. However, these provisions do not apply to

residential mortgage transactions. See 15 U.S.C. § 1635(e)(1); see also 12 C.F.R. §

1026.23(f)(1). The statute and regulation define the term “residential mortgage transaction”

as:

a transaction in which a mortgage, deed of trust, purchase money security

interest arising under an installment sales contract, or equivalent consensual

security interest is created or retained against the consumer’s dwelling to

finance the acquisition or initial construction of such dwelling.

pool number AV1765MSF. (Dkt. 114-3; Dkt. 144-4). The Court takes judicial notice under Federal

Rule of Evidence 201 of Ginnie Mae’s website, which explains that the “FHA” designation on a

schedule means that a mortgage originated through the Federal Housing Administration’s

insurance program, while the “RD” designation means that a loan originated through the United

States Department of Agriculture’s Rural Development insurance program. See

https://www.ginniemae.gov/products_programs/programs/Pages/single_family_program.aspx.

15 U.S.C. § 1602(x); see also 12 C.F.R. § 1026.2(a)(24).

Daniels’s transaction with SWBC falls squarely within the definition of “residential

mortgage transaction” set out in 15 U.S.C. § 1602(x) and 12 C.F.R. § 1026.2(a)(24).

Accordingly, the right-of-rescission provisions that Daniels attempts to invoke do not

apply.

Similarly, SWBC was not required to give Daniels notice of the assignment of the

deed of trust to Pennymac. The disclosure requirements that Daniels attempts to invoke are

contained in 12 C.F.R. § 226.39(d) and 12 C.F.R. § 1026.39(d). However, in the context

of the assignment of Daniels’s loan, those disclosure requirements only applied to

Pennymac—which, according to uncontroverted evidence in the summary judgment

record, met those requirements by way of a letter sent in November of 2018—and did not

apply to SWBC. (Dkt. 113-1 at pp. 33–34). The regulations specify that their disclosure

requirements do not apply to transferors; rather, the disclosure requirements apply to a

person who “becomes the owner of an existing mortgage loan by acquiring legal title to

the debt obligation, whether through a purchase, assignment or other transfer[.]” 12 C.F.R.

§ 226.39(a)(1); see also 12 C.F.R. § 1026.39(a)(1).

Pennymac, not SWBC, became the owner of Daniels’s debt obligation when the

deed of trust was assigned. Accordingly, while Pennymac was subject to the disclosure

requirements that Daniels now invokes, SWBC was not.

iii. Notice of the securitization

Daniels also contends that SWBC was obligated to inform him of the securitization

of his loan. (Dkt. 117 at p. 4). In its entirety, the argument reads:

Defendants concealed the fact that the Loans were securitized, and by concealing the

securitization, Defendant concealed the fact that the Borrower’s loan changed in character

inasmuch as no single party would hold the Note but rather the Notes would be included in a pool

with other notes, split into tranches, and multiple investors would effectively buy shares of the

income stream from the loans. Defendant offers no evidence to counter this undisputed allegation.

Dkt. 117 at p. 4.

Daniels fails to explain, through citation to law or summary judgment evidence,

why these facts, even if properly characterized as undisputed, are material. See Robson,

420 F.3d at 536 (“An issue is material if its resolution could affect the outcome of the

action.””) (quotation marks omitted). Daniels does not point to a statute, regulation, case,

contractual provision, or piece of summary judgment evidence establishing that SWBC

was required to tell him that his loan was being securitized. Essentially, this argument

appears to be a retread of Daniels’s statement in his pleadings that his “mortgage loan was

no longer considered an enforceable loan instrument once the mortgage was split from the

promissory note, paid, securitized and pooled to many different undisclosed stocks and

bond investors[.]” (Dkt. 57 at p. 8). In an earlier opinion in this case, the Court rejected

Daniels’s contention that securitization of a mortgage renders a subsequent assignment of

that mortgage invalid, noting that the argument “thas been resoundingly rejected by federal

courts across the country.” Berry v. Wells Fargo Bank, N.A., No. 20-30670, 2022 WL

728969, at *5 (Sth Cir. Mar. 10, 2022) (quotation marks omitted); see also Preston v.

Seterus, Inc., 931 F. Supp. 2d 743, 759 (N.D. Tex. 2013) (“Plaintiffs cite no Texas

authority, and the court has found none, to support their contention that the mere

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securitization of a note by transferring it into a trust extinguishes the foreclosure rights of

the assignee of the deed of trust.”). The Court remains unconvinced that Daniels can base

any viable claim on either the securitization of his mortgage or his allegation that the

securitization was not disclosed to him.

Daniels has not pointed to any summary judgment evidence establishing that there

is a triable fact issue on any possible claim against SWBC. The Court will grant SWBC’s

motion for summary judgment.

—Pennymac

Pennymac bought Daniels’s loan from SWBC and, when Daniels failed to make his

mortgage payments as required, conducted a nonjudicial foreclosure.

In responding to Pennymac’s motion, Daniels contends that Pennymac lacked the

power to foreclose because the assignment of the deed of trust by MERS to Pennymac was

invalid. (Dkt. 116 at p. 4). Specifically, Daniels claims in his summary judgment response

that “PennyMac forged a fake and false ‘Assignment of Deed of Trust’ with a robo

signature of a fake and false employee of [MERS,]” rendering the assignment by MERS to

Pennymac void. (Dkt. 116 at p. 4). Daniels’s summary judgment response cites no evidence

supporting this contention; but the “forgery” argument seems to be referring to an

allegation contained in Daniels’s pleadings that Gina Benn (“Benn”), who executed the

assignment of the deed of trust on behalf of MERS, is an employee of Pennymac, not of

MERS. (Dkt. 57 at pp. 28–29; Dkt. 113-1 at p. 36). The basis for Daniels’s allegation is a

purported screenshot of Benn’s LinkedIn profile, which lists Benn’s current position as

senior vice president of Pennymac. (Dkt. 57-1 at p. 51).

Assuming that Benn works for Pennymac, the fact that she executed the assignment

for MERS does not by itself invalidate the assignment. Summary judgment evidence

reflects that Benn could be (or at least was at the time of the assignment) both an employee

of Pennymac and a MERS signing officer, meaning that under the circumstances Benn

could indeed, as an officer of MERS, execute an assignment to Pennymac, her employer.

See, e.g., Antony v. United Midwest Savings Bank, No. 4:15-CV-1062, 2016 WL 914975,

at *3 (S.D. Tex. Mar. 10, 2016), aff’d, 673 Fed. App’x 447 (5th Cir. 2017) (“Flagstar

submitted evidence of its standing to foreclose under the Deed of Trust through a facially

valid assignment from MERS signed by James Abbas, a Flagstar employee and a MERS

signing officer. . . . There is no factual dispute material to determining whether MERS’s

assignment of the Deed of Trust to Flagstar was void. It was not, and Flagstar had standing

to foreclose.”); Ocwen Loan Servicing LLC v. Kroening, No. 10-C-4692, 2011 WL

5130357, at *5 (N.D. Ill. Oct. 28, 2011) (“The Assignment of Mortgage, entered into in

December of 2009, was between MERS, acting as nominee for TBW, and Ocwen. . . . The

assignment was executed for MERS by Scott Anderson. Anderson is an employee of

Ocwen, but was designated by Corporate Resolution as an assistant secretary and vice

president of MERS, and as such had the authority to assign any mortgage naming MERS

as the mortgagee.”). “[T]he mere allegation that [Benn] was not a MERS employee cannot

by itself support a cause of action” because “MERS generally relies on its members to have

someone on their own staff become a MERS officer with the authority to sign documents

on behalf of MERS.” Howard v. JPMorgan Chase NA, No. SA-12-CV-440, 2013 WL

1694659, at *8 (W.D. Tex. Apr. 18, 2013); see also Cervantes v. Countrywide Home

Loans, Inc., 656 F.3d 1034, 1040 (9th Cir. 2011) (“[M]ost of the actions taken in MERS’s

own name are carried out by staff at the companies that sell and buy the beneficial interest

in the loans.”).

Moreover, even if Benn lacked the authority to sign for MERS, her “lack of

authority . . . does not furnish [Daniels] with a basis to challenge the . . . assignment.”

Reinagel v. Deutsche Bank National Trust Co., 735 F.3d 220, 226 (5th Cir. 2013). Under

Texas law, “a contract executed on behalf of a corporation by a person fraudulently

purporting to be a corporate officer is, like any other unauthorized contract, not void, but

merely voidable at the election of the defrauded principal[.]” Id. Here, that “defrauded

principal” would be MERS, or perhaps SWBC, for which MERS was acting as nominee.

It would not be Daniels, who is the obligor. Since “Texas law is settled that the obligors of

a claim may not defend against an assignee’s effort to enforce the obligation on any ground

which renders the assignment voidable only,” Daniels cannot challenge the assignment of

the deed of trust by merely pointing to Benn’s alleged lack of authority to sign for MERS.

Id. (brackets and ellipsis omitted).

Daniels has not pointed to any summary judgment evidence establishing that there

is a triable fact issue on any possible claim against Pennymac. The Court will grant

Pennymac’s motion for summary judgment.

—ZLOS and Sorour

ZLOS, for which Sorour is a trustee, bought Daniels’s house at the foreclosure sale.

Daniels predicates his response to the motion for summary judgment filed by ZLOS

and Sorour3 almost entirely on his argument that the foreclosure sale at which ZLOS bought

Daniels’s home was invalid because the assignment of the deed of trust by MERS to

Pennymac was invalid. (Dkt. 105 at p. 4). The Court has already rejected this argument in

its discussion of Pennymac’s motion for summary judgment.

The one additional contention that Daniels raises in his response to the

ZLOS/Sorour motion is that he “was never notified of the pending auction of the property,

despite Defendants’ representations to the contrary.” (Dkt. 105 at p. 4). In support, Daniels

cites an affidavit sworn out by a woman named Priscilla Duenas (“Duenas”), who was

living in Daniels’s house at the time of the foreclosure sale and testifies in her affidavit that

“Mr. Daniels was never served any documents that the property was being sold or auction

[sic] off.” (Dkt. 105 at pp. 9–10). Duenas further testifies in her affidavit that she told

Sorour that Daniels was never served when Sorour came to Daniels’s house after the

foreclosure sale. (Dkt. 105 at pp. 9–10).

Duenas’s affidavit does not create a genuine issue of material fact on Daniels’s

claims against ZLOS and Sorour. To begin with, Pennymac, not ZLOS, was obligated to

serve notice of the foreclosure sale. Leaving that aside, Duenas’s affidavit provides, at

most, evidence that Daniels did not receive the notice of acceleration and nonjudicial

foreclosure sale that Pennymac mailed to him in November of 2021; and Daniels’s

nonreceipt of that notice is not material because “[t]here is no requirement that [Daniels]

3 ZLOS and Sorour filed one motion for summary judgment but, for some reason, filed it twice.

(Dkt. 102; Dkt. 103).

receive the notice.” Martins v. BAC Home Loans Servicing, L.P., 722 F.3d 249, 256–57

(5th Cir. 2013) (discussing Tex. Prop. Code § 51.002(e)); see also LSR Consulting, LLC v.

Wells Fargo Bank, N.A., 835 F.3d 530, 534 (5th Cir. 2016) (“Texas courts have recognized

that the dispositive inquiry is not receipt of notice, but, rather, service of notice.”)

(quotation marks omitted; emphasis in LSR Consulting); Onwuteaka v. Cohen, 846 S.W.2d

889, 892 (Tex. App.—Houston [1st Dist.] 1993, writ denied) (“The general purpose of

[Section 51.002 of the Texas Property Code] is to provide a minimum level of protection

for the debtor, and it provides for only constructive notice of the foreclosure.”).

The deed of trust provides that “Lender shall mail a copy of the notice [of sale] to

Borrower in the manner prescribed by Applicable Law.” (Dkt. 114-7 at p. 8). The deed of

trust further provides that it is “governed by federal law and the law of the jurisdiction in

which the Property is located.” (Dkt. 114-7 at p. 6). Under Section 51.002 of the Texas

Property Code, service of a notice of a foreclosure sale that is conducted under a power of

sale conferred by a deed of trust “is complete when the notice is sent via certified mail.”

Martins, 722 F.3d at 256; see also Tex. Prop. Code § 51.002(e). Pennymac has included in

the summary judgment record a copy of the notice of acceleration and nonjudicial

foreclosure sale that it mailed to Daniels in November of 2021, along with an affidavit

testifying that the notice was sent by certified mail. (Dkt. 113-1 at pp. 184–89). Pennymac’s

evidence is sufficient to establish proper service. Martins, 722 F.3d at 256 (“BAC satisfied

its burden of proof by presenting evidence of mailing the notice and an affidavit to that

effect.”). And the Fifth Circuit and Texas state courts have repeatedly “held there to be no

genuine dispute as to the sending of notices required under Section 51.002 when the sole

contravening evidence is the homeowner’s affidavit asserting non-receipt.” LSR

Consulting, 835 F.3d at 534–35; see also Douglas v. Wells Fargo Bank, N.A., 992 F.3d

367, 371–72 (5th Cir. 2021). On this record, there is no genuine issue of material fact

regarding whether Pennymac provided notice of the foreclosure sale in accordance with

the deed of trust and Texas law.

Daniels has not pointed to any summary judgment evidence establishing that there

is a triable fact issue on any possible claim against ZLOS and Sorour. The Court will grant

the motion for summary judgment filed by ZLOS and Sorour.

—The HOA defendants

The HOA defendants—RMWBH, Hicks, and Davis—represented Cypresswood

Lake in its attempts to collect delinquent HOA dues from Daniels. The summary judgment

record reflects that the HOA defendants sent a demand letter to Daniels on Cypresswood

Lake’s behalf and then represented Cypresswood Lake in a judicial foreclosure action

against Daniels. In his response to the HOA defendants’ motion for summary judgment,

Daniels contends that the HOA defendants violated the FDCPA “by attempting to obtain

assessment fees for the HOA without the prior consent of the consumer given directly to

the debt collector or the express permission of a court of competent jurisdiction.” (Dkt. 104

at p. 4). Daniels also argues that the HOA defendants’ demand letter violated the FDCPA

because it was “unfair” and “not truthful[.]” (Dkt. 104 at p. 5).

i. The FDCPA’s limitations on communication in connection with debt

collection

In opposing the HOA defendants’ summary judgment motion, Daniels first argues

that the HOA defendants violated the FDCPA “by attempting to obtain assessment fees for

the HOA without the prior consent of the consumer given directly to the debt collector or

the express permission of a court of competent jurisdiction[,]” and he cites to 15 U.S.C. §

1692c(a) for support. (Dkt. 104 at p. 4). However, 15 U.S.C. § 1692c(a) is not as expansive

as Daniels represents it to be. In full, the statute reads:

Without the prior consent of the consumer given directly to the debt collector

or the express permission of a court of competent jurisdiction, a debt

collector may not communicate with a consumer in connection with the

collection of any debt—

(1) at any unusual time or place or a time or place known or which should be

known to be inconvenient to the consumer. In the absence of knowledge

of circumstances to the contrary, a debt collector shall assume that the

convenient time for communicating with a consumer is after 8 o’clock

antemeridian and before 9 o’clock postmeridian, local time at the

consumer’s location;

(2) if the debt collector knows the consumer is represented by an attorney

with respect to such debt and has knowledge of, or can readily ascertain,

such attorney’s name and address, unless the attorney fails to respond

within a reasonable period of time to a communication from the debt

collector or unless the attorney consents to direct communication with the

consumer; or

(3) at the consumer’s place of employment if the debt collector knows or has

reason to know that the consumer’s employer prohibits the consumer

from receiving such communication.

15 U.S.C. § 1692c(a).

Daniels has not presented any evidence showing that the HOA defendants contacted

him at an unusual or inconvenient time or place, contacted him while he was represented

by an attorney, or contacted him at work. The record reflects that the HOA defendants sent

Daniels a demand letter. (Dkt. 101-6). When Daniels failed to respond to the demand letter,

the HOA defendants represented Cypresswood Lake in a judicial foreclosure action against

Daniels. (Dkt. 101-7). The record contains no evidence showing that the HOA defendants

contacted Daniels in any way that violated 15 U.S.C. § 1692c(a).

ii. The demand letter

Daniels next argues that the HOA defendants’ demand letter violated the FDCPA

because it was “unfair” and “not truthful[.]” (Dkt. 104 at p. 5). Daniels does not point to

any evidence in the record and does not specify any deficiencies in the demand letter.

The Court does not find Daniels’s argument persuasive. The HOA defendants’

demand letter, which is included in the record in full, did not suffer from any evident

deficiencies. The letter stated that Daniels owed unpaid HOA dues and other associated

fees and costs to Cypresswood Lake; provided an amount; and informed Daniels that he

could dispute the debt in writing within 30 days, which Daniels failed to do. (Dkt. 101-6).

The letter further stated that the HOA defendants and Cypresswood Lake would take

further legal action, incurring more fees and costs for which Daniels was responsible, if

Daniels failed to either make full payment or make other payment arrangements acceptable

to Cypresswood Lake within 30 days. (Dkt. 101-6 at p. 2). Evidence in the summary

judgment record shows that Daniels paid his HOA dues as required until 2019, when he

missed his annual dues payment; Daniels missed his 2020 payment as well. (Dkt. 101-5;

Dkt. 101-8 at p. 2). The applicable deed restrictions gave Cypresswood Lake the power to

impose dues; the power to collect interest, late fees, and attorney’s fees related to

delinquent dues payments; and the power to foreclose on the homes of people who failed

to pay their dues. (Dkt. 101-1 at pp. 29–37). Daniels does not specify any false

representation made by the HOA defendants’ demand letter, and he does not point to any

evidence in the record showing that any representation made in the demand letter was false.

Daniels has not pointed to any summary judgment evidence establishing that there

is a triable fact issue on any possible claim against the HOA defendants. The Court will

grant the motion for summary judgment filed by the HOA defendants.

—Federal Rule of Civil Procedure 56(d)

Finally, Daniels contends that the Court must deny four of Defendants’ motions

because “the parties have not engaged in meaningful discovery[.]” (Dkt. 104 at p. 6; Dkt.

105 at p. 6; Dkt. 116 at p. 5). Daniels does not make this argument in his response to

SWBC’s motion. (Dkt. 117). The Court construes this argument as a motion under Federal

Rule of Civil Procedure 56(d). The Court will deny Daniels’s Rule 56(d) motion.

Rule 56(d) provides:

If a nonmovant shows by affidavit or declaration that, for specified reasons,

it cannot present facts essential to justify its opposition, the court may: (1)

defer considering the motion or deny it; (2) allow time to obtain affidavits or

declarations or take discovery; or (3) issue any other appropriate order.

Fed. R. Civ. P. 56(d).

To win relief, a Rule 56(d) movant must show: (1) that additional discovery will

create a genuine issue of material fact; and (2) that he or she diligently pursued discovery.

Bailey v. KS Management Services, L.L.C., 35 F.4th 397, 401 (5th Cir. 2022). The Rule

56(d) movant “may not simply rely on vague assertions that discovery will produce needed,

but unspecified, facts.” Smith v. Regional Transit Authority, 827 F.3d 412, 423 (Sth Cir.

2016) (quotation marks omitted).

Daniels’s Rule 56(d) motion relies entirely on his assertion that “the parties have

not engaged in meaningful discovery, which would preclude the entry of summary

judgment in Defendants’ favor.” (Dkt. 104 at p. 6; Dkt. 105 at p. 6; Dkt. 116 at p. 5). This

is nothing more than a “vague assertion . . . that discovery will produce needed, but

unspecified, facts[,]” and it is insufficient to establish entitlement to relief under Rule

56(d). /d. The Court will deny Daniels’s Rule 56(d) motion.

CONCLUSION

For the reasons stated above, the motions for summary judgment filed by

Defendants SWBC Mortgage Corporation; Pennymac Loan Services, LLC; ZLOS

Investment Trust; Sam Sorour; Roberts Markel Weinberg Butler Hailey, P.C.; Noelle

Hicks; and Cliff Davis (Dkt. 101; Dkt. 102; Dkt. 103; Dkt. 113; Dkt. 114) are GRANTED.

The Court will enter a separate final judgment.

SIGNED at Houston, Texas, on June 7, 2023.

GEORGE C. HANKS, JR.

UNITED STATES DISTRICT JUDGE

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