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Foster v. Deutsche Bank National Trust Co.

United States Court of Appeals, Fifth Circuit

February 8, 2017


         Appeal from the United States District Court for the Northern District of Texas

          Before JOLLY, SMITH and GRAVES, Circuit Judges.

          PER CURIAM.

         This appeal concerns an attempted mortgage foreclosure sale of property located in Grand Prairie, Texas, by Deutsche Bank National Trust Company ("Deutsche Bank"), Ocwen Loan Servicing, LLC ("Ocwen"), and Power Default Services ("Power Default"). Regina Foster appeals the district court's denial of her motion for remand based on its finding that Power Default, a non-diverse defendant and substitute trustee for the attempted foreclosure, was improperly joined in the proceeding because the foreclosure did not take place. Foster also appeals the district court's grant of summary judgment in favor of the defendants-appellees. Finding no error, we AFFIRM.


         In September 2004, Regina Foster's then-husband, Carlos Foster, executed a promissory note to finance the purchase of a house in Grand Prairie, Texas. Regina Foster was not listed as an obligor on the promissory note. She is, however, listed as a co-borrower with Carlos on a deed of trust, which was executed on the same day as the promissory note. Regina later filed for divorce. During the divorce proceedings, the state court issued a temporary order awarding exclusive use of the Grand Prairie property to Regina.

         Carlos defaulted on the loan and, after receiving notification, failed to cure the default. In 2014, Power Default sent a Notice of Acceleration and Notice of Substitute Trustee Sale to the Grand Prairie home address, where Regina received the notices. The trustee sale notice listed Ocwen as the mortgage servicer and Deutsche Bank as the mortgagee. Power Default was the substitute trustee. The foreclosure sale was scheduled for May 6, 2014.

         On May 5, 2014, Regina Foster filed her original petition in the Judicial District Court in Tarrant County, Texas, alleging wrongful foreclosure and requesting a temporary restraining order and injunctive relief and, in the alternative, a reformation of the deed of trust. She also alleged that she did not receive proper notice of the foreclosure sale and that she was not given an opportunity to cure the default. The state court then issued a temporary restraining order, putting a halt to the foreclosure sale. Ocwen did not pursue the foreclosure sale on May 6, 2014. Defendants Deutsche Bank and Ocwen removed the case to federal court on the basis of diversity jurisdiction, notwithstanding Power Default's involvement as a non-diverse defendant. In their Notice of Removal, Deutsche Bank and Ocwen argued that Power Default was improperly joined for the sole purpose of defeating diversity. The federal district court concluded that removal was proper and dismissed all claims against Power Default with prejudice.[1]

         Then, in February 2016, the district court granted summary judgment in favor of defendants Deutsche Bank and Ocwen and dismissed with prejudice the claims in Foster's second amended petition, including: a claim of attempt to wrongfully foreclose on the property, a claim that the defendants violated Texas Property Code § 51.002(b), [2] a claim that the deed of trust failed to create a valid lien upon the property, a request for permanent injunctive relief, and a request for reformation of the deed of trust.

         The district court observed that it was undisputed that no foreclosure sale had taken place and that Foster still resided on the property. Because no foreclosure occurred, the district court rejected Foster's claims for attempted wrongful foreclosure and violation of § 51.002(b). Further, the court found that the reasons Foster provided to support her invalid lien claim-that her name was misspelled as "Reeba Nqchael Howell Foster" on the deed of trust and that the document number was incorrectly given as Dallas County Document

          No. 3088999 on the Notice of Substitute Trustee Sale-did not support a finding "that these discrepancies have caused her any confusion or harm." Because Foster's substantive claims failed on the merits, the district court denied her request for a permanent injunction. Foster's request for reformation of the deed of trust was likewise denied because she failed to demonstrate why such reformation was necessary.

         Foster then filed a Motion for Reconsideration and, in the alternative, urged the district court to refer her case to the bankruptcy court. The court reasoned that Foster's legal claims arose after she filed for Chapter 7 bankruptcy in 2012 and therefore were not part of the bankruptcy estate; thus, there was no basis on which to refer the case to the bankruptcy court. The district court denied both requests. Foster timely appealed.


         We review a district court's denial of a motion to remand de novo, applying the same standard as the district court. Allen v. R&H Oil & Gas Co., 63 F.3d 1326, 1336 (5th Cir. 1995). Grants or denials of summary judgment likewise receive de novo review. LeMaire v. Louisiana Dep't of Transp. & Dev., 480 F.3d 383, 386 (5th Cir. 2007). Summary judgment is appropriate when "there is no genuine dispute as to any ...

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