DHI Holdings LP Contend Deutsche Bank’s Out of Time On A Couple of HOA Foreclosed Homes

I.                   PLAINTIFF LACKS CAPACITY TO MAINTAIN THIS LAWSUIT

In its motion for summary judgment, Defendants argued that Plaintiff lacks capacity to maintain this lawsuit because it forfeited its right to do business in Texas.

In its opposition, Plaintiff does not dispute that it forfeited its right to do business.

Instead, Plaintiff argues that owning property in Texas gives Plaintiff “legal standing to contest the validity of a deed of trust.

. . .” [Dkt. 19, p. 25 (citations omitted).]

Therefore, Plaintiff argues, it “does not have to register to do business in Texas to maintain this lawsuit since the lawsuit arises out of Plaintiff’s ownership of the Property.”

Id. (citations omitted).

“Plaintiff’s argument confuses the concepts of standing and capacity.”

Hofrock v. Fed. Nat’l Mortg. Ass’n, No. A-13-CV-1013 LY, 2014 WL 12586366, at *5 (W.D. Tex. Mar. 18, 2014), report and recommendation approved, No. A-13-CV-1013-LY, 2014 WL 12586757 (W.D. Tex. May 9, 2014).

As a threshold matter, Plaintiff ignores the statute upon which Defendants rely.

Tex. Bus. Orgs. Code Ann. § 153.309(a)(1) provides that when a limited partnership’s right to do business in Texas is forfeited, the entity “may not maintain an action, suit, or proceeding in a court of this state.”

In contrast, the statute permits forfeited limited partnerships to defend “an action, suit, or proceeding in a court of this state.”

Tex. Bus. Orgs. Code Ann. § 153.309(b)(2).

The statute is unambiguous, as are the authorities interpreting it.

See, e.g., Manning v. Enbridge Pipelines (E. Texas) L.P., 345 S.W.3d 718, 723 (Tex. App.—Beaumont 2001, pet. denied)

(“If its right to transact business in the state is forfeited, a limited partnership ‘may not maintain an action, suit, or proceeding in a court of this state [.]”), quoting Tex. Bus. Orgs. Code Ann. § 153.309(a)(1).

Plaintiff cites to Tex. Bus. Orgs. Code Ann. § 9.251(15) for the proposition that “owning, without more, real or personal property in this state” does not constitute doing business in Texas.

[Dkt. 19, p. 21.]

That statute is of no help to Plaintiff because it only defines what “transacting business” means; it does not define who has the capacity to sue in Texas.

Although owning real property in Texas may not constitute transacting business, Tex. Bus. Orgs. Code Ann. § 153.309(a)(1) unequivocally states that a limited partnership that has forfeited its right to transact business in Texas – which Plaintiff undisputedly has – “may not maintain an action, suit, or proceeding in a court of this state.”

The authorities cited in Plaintiff’s opposition are of no help to Plaintiff either.

In Hofrock, the plaintiff-borrower challenged a state court foreclosure order on the basis that the original lender had forfeited its corporate status in Texas.

In rejecting the plaintiff’s lack-of-capacity argument, the Hofrock court noted that the foreclosing entity had acquired its interest from a registered entity, not the forfeited entity.

Id. at *6.

The Hofrock court was not called on to address whether Tex. Bus. Orgs. Code Ann. § 153.309(a)(1) prohibits a forfeited limited partnership from maintaining a lawsuit.

Likewise, the court in Morlock, L.L.C. v. Nationstar Mortg., L.L.C., was not called on to address whether the plaintiff, a limited liability company, had capacity to sue under Tex. Bus. Orgs. Code Ann. § 153.309(a)(1).

Indeed, the forfeiture issue was not even discussed.

Rather, the Morlock court addressed whether the plaintiff had standing to sue.

447 S.W.3d 42, 45 (Tex. App. 2014).

Finally, Plaintiff erroneously argues that Defendants waived the forfeiture argument because they did raise the issue in a verified motion to abate or plea in abatement and instead raised the issue “for the first time” in their summary judgment motion.

[Dkt. 19, p. 19]

As a preliminary matter, Defendants have raised the issue of Plaintiff’s forfeited status multiple times before moving for summary judgment.

First, defense counsel raised the issue with Plaintiff’s counsel during a phone call on April 3, 2024 in the context of discussing Defendants anticipated removal of the action from state court to this Court.

Next, Defendants specifically denied that Plaintiff has capacity to sue in their answer to the complaint.

[Dkt. 4, ¶ 1 (“Defendants deny that Plaintiff has capacity to bring suit against Defendants. A review of the Texas Secretary of State’s website indicates that Plaintiff forfeited its right to transact business in Texas on or about February 23, 2024 and therefore cannot maintain this suit. See Tex. Bus. Org. Code § 153.309.”)]

Defendants again noted Plaintiff’s forfeited status in their opposition to Plaintiff’s motion for a temporary restraining order.

[Dkt. 14, p. 5]

Thus, Defendants’ motion for summary judgment is the fourth time (in 3 months) that Defendants have pointed out that Plaintiff forfeited its capacity to maintain this lawsuit.

Further, federal courts in Texas do not require a defendant to raise the capacity defense via a motion to abate or plea in abatement.

See Rust v. Bank of Am., N.A., No. A-13-CA-078-SS, 2013 WL 12098739, at *2 (W.D. Tex. Sept. 13, 2013), aff’d, 573 F. App’x 343 (5th Cir. 2014)

(addressing lack-of-capacity argument at the summary judgment stage).

In any event, the record is clear that Defendants raised the forfeiture issue early and often in this case.

Plaintiff has had many opportunities to cure its forfeiture, but has failed to do so.

Accordingly, Defendants are entitled to summary judgment because Plaintiff does not have capacity to maintain this lawsuit.

II.                DEFENDANTS UNEQUIVOCALLY ABANDONED ACCELERATION OF THE LOAN

It is undisputed that, following the December 29, 2017 Notice of Acceleration, Defendants sent monthly billing statements to the Borrower which expressly gave Borrower the opportunity to cure his default without requiring him to pay the full accelerated balance. Specifically, each monthly statement issued from and after February 18, 2018:

(1) stated the reinstatement amount;

(2) advised that payment of the reinstatement amount would reinstate the Loan as of the date thereof;

and

(3) requested the Borrower to make payment.

Thus, Defendants unequivocally expressed their intent to withdraw or revoke their option to accelerate payment by demanding only the accrued monthly payments.

Ocwen Loan Servicing, L.L.C. v. REOAM, L.L.C., 755 F. App’x 354, 359 (5th Cir. 2018) (“REOAM”)

(explaining that a lender’s notice to a borrower in monthly statements that the loan can be brought current by payment of amount in arrears rather than the full accelerated amount is sufficient to constitute abandonment).

As in REOAM, Defendants also made it clear to the Borrower that they had abandoned or waived the previous acceleration of the debt by giving the Borrower the opportunity to bring the Loan current by paying only the past due amounts owed under the terms of the Note and Deed of Trust, not the full accelerated principal balance.

As a result, with the sending of the February 19, 2018 monthly statement, and each successive monthly statement, the Note was restored to its original terms because Defendants abandoned the acceleration by merely seeking the amounts owed under the Loan at that time.

Id. 755 F. App’x at 356–57

(“In other words, if the noteholder informs the borrower that the loan can be brought current by payment of the amount due under the original terms of the loan rather than the full accelerated amount, such notice is sufficient to ‘unequivocally manifest[ ] an intent to abandon the previous acceleration” meaning that the limitations period triggered by the acceleration ceases to run.’”),

quoting Boren v. U.S. Nat’t Bank Ass’n, 807 F.3d 99, 105 (5th Cir. 2015);

accord Clawson v. Ocwen Loan Servicing, LLC, No. 3:18-CV-00080, 2019 WL 1141526, at *3 (S.D. Tex. Feb. 21, 2019).

Cf. Swoboda v. Ocwen Loan Servicing, LLC, 579 S.W.3d 628, 635 (Tex. App. 2019)

(denying lender’s summary judgment motion because the “nothing in the statement actually requests a payment from [the borrower], which is the basis of the Fifth Circuit’s rule.”).

Further, it is undisputed that after Plaintiff obtained a TRO in the 2018 lawsuit, Defendants serviced the loan in its usual course of business and with the intent to abandon the acceleration at least until the lawsuit was resolved.

See SLS Declaration at ¶16, Exhibit 1-G.

In addition to sending monthly statements offering to allow the Borrower to reinstate the Loan, Defendants sent

multiple letters to the Borrower inviting Borrower to explore loss mitigation options, e.g. a repayment plan. The escrow disclosure statements and interest rate change notices likewise corroborate Defendants’ position that they abandoned acceleration of the Loan and resumed servicing the Loan in the ordinary course after Plaintiff filed its first lawsuit in January 2018. In contrast, Plaintiff offers zero evidence that Defendants treated the Loan as accelerated after Plaintiff filed its initial lawsuit in January 2018, up until Defendants issued a new notice of acceleration in October 2023. See Langlois v. US Bank NA as Tr. for Credit Suisse First Bos. Mortg. Sec. Corp Home Equity Asset Tr. 2006-6, Home Equity Pass-Through Certificates, Series 2006-6, No. 3:20-CV-02867-S-BT, 2022 WL 585152, at *3 (N.D. Tex. Feb. 1, 2022), report and recommendation adopted, No. 3:20-CV-2867-S-BT, 2022 WL 581820 (N.D. Tex. Feb. 24, 2022)

(granting summary judgment for lender and noting plaintiff’s failure to offer any evidence to counter lender’s evidence that prior acceleration had been abandoned and new acceleration had taken place outside of four-year limitations period).

Because Defendants abandoned acceleration, the statute of limitations ceased to run following the December 29, 2017 Notice of Acceleration.

Therefore, Plaintiff’s contention that the lien is void due to the expiration of the statute of limitations is without merit. Defendants are entitled to summary judgment on Plaintiff’s claims.

June 25, 2024                                                              Respectfully submitted,

DUANE MORRIS LLP
/s/ Cameron J. Asby

Cameron J. Asby
Texas Bar No. 24078160
Federal ID. 2742509
CJAsby@duanemorris.com

1300 Post Oak Blvd., Suite 1500
Houston, TX 77056-3166
Tel.:     (713) 402-3900
Fax:     (713) 402-3901

ATTORNEY FOR DEFENDANTS

CERTIFICATE OF SERVICE

I hereby certify that service of a true and correct copy of the foregoing document was served on counsel of record via ECF on this 25th day of June 2024.

/s/ Cameron J. Asby

Cameron J. Asby

MINUTE ENTRY ORDER re: Status / Scheduling Conference held 5/3/24:

At the hearing the following rulings were made: By Defendants’ agreement, the foreclosure sale scheduled for May 7, 2024, is CANCELLED, and Defendants will not schedule another foreclosure sale until the court has ruled on the parties’ upcoming summary judgment motions.

For the following schedule, all motions and briefing must be filed by 3 p.m. on the date ordered.

Days refer to calendar days – not business days.

Plaintiff will serve its written discovery requests by May 10, 2024.

Defendants’ discovery responses will be served by fourteen (14) days thereafter.

Since this is an expedited case, the court expects the parties to answer and produce documents and not to file objections.

Defendants’ summary judgment motion will be filed within fourteen (14) days after they serve their discovery responses.

Plaintiff’s response to Defendants’ summary judgment motion and cross motion for summary judgment will be filed within fourteen (14) days after Defendants’ summary judgment motion.

All replies will be due seven (7) days thereafter.

The May 24, 2024, initial conference is CANCELLED.

Appearances: Jeffrey Craig Jackson-f/Pltf. Cameron J Asby-f/Deft. (Ct Reporter: G. Dye).

(Signed by Judge Sim Lake) Parties notified. (sra4) (Entered: 05/03/2024)

DEFENDANTS’ OPPOSITION TO PLAINTIFF’S APPLICATION FOR PRELIMINARY INJUNCTION

Defendants Deutsche Bank National Trust Company, as Trustee for Morgan Stanley ABS Capital I Inc. Trust 2006-HE3, Mortgage Pass-Through Certificates, Series 2006-HE3 and Specialized Loan Servicing LLC (“Defendants”) respond in opposition to Plaintiff’s Application for Emergency Ex Parte Temporary Restraining Order and Request for Hearing on Preliminary Injunction

(Dkt. 9) (“Plaintiff’s Application”).

The Court had previously scheduled a hearing on Plaintiff’s Application for May 3, 2024 at 11:30 a.m. but now will hold a status conference at that time.

I.                   INTRODUCTION

Plaintiff DHI Holdings, LP’s claim that Texas’ four-year statute of limitations bars Defendants’ from foreclosing a deed of trust on real property is unlikely to succeed on the merits.

The instant lawsuit represents Plaintiff’s latest ill-conceived effort to avoid foreclosure.

After having one unsuccessful bite at the apple in a prior lawsuit, DHI Holdings now seeks another.

However, just as Defendants were able to show in the prior lawsuit, Defendants are again able to show that the most recent acceleration of the loan was abandoned (in no small part due to Defendants having to defend DHI Holdings’ prior lawsuit).

A more fundamental problem with DHI Holdings’ renewed effort to stall foreclosure is that DHI Holdings lacks capacity to maintain this lawsuit.

DHI Holdings forfeited its corporate status in Texas in February 2024, and has not reinstated it.

Consequently, DHI Holdings lacks capacity to pursue its claims.

II.                FACTUAL BACKGROUND

On December 19, 2005, Dion Fleming (“Borrower”) obtained a $128,475 loan from WMC Mortgage Corp. (“Lender”) that is evidenced by an Adjustable Rate Note (“Note”).

See SLS Declaration at ¶7, Exhibit 1-A, a true and correct copy of the Adjustable Rate Note obtained on December 19, 2005.

To secure repayment of the Note, Borrower and Guayana I. Colwell (Borrower’s spouse), granted Mortgage Electronic Registration Systems, Inc. (“MERS”), acting solely as nominee for Lender, a Deed of Trust on the real property located at 11315 Harbour Lake Court, Humble, TX 77396 (the “Property”).

See SLS Declaration at ¶8, Exhibit 1-B, a true and accurate copy of the Deed of Trust.

Effective August 24, 2006, MERS assigned the Deed of Trust to Deutsche Bank National Trust Company, as Trustee for Morgan Stanley ABS Capital Inc. Trust 2006-HE3 (“Deutsche Bank”).

See SLS Declaration at ¶9, Exhibit 1-C, a true and accurate copy of the Assignment of Deed of Trust.

Deutsche Bank owns the Note and is the record holder of the Deed of Trust.

On October 4, 2016, the Property was sold at a foreclosure sale conducted by the homeowner’s association to recover unpaid assessments.

See TRO Motion, ¶ 16. Plaintiff purchased the Property for $13,000, subject to the Deed of Trust. See id.

SLS began servicing Borrower’s loan for Deutsche Bank in February 2017.

On March 24, 2017, SLS sent Borrower a notice of default and notice of intent to accelerate.

See SLS Declaration at ¶11, Exhibit 1-D, a true and accurate copy of the March 24, 2017 Notice of Default.

On December 29, 2017, SLS’s foreclosure counsel sent Borrower a notice of acceleration.

See SLS Declaration at ¶12, Exhibit 1-E, a true and accurate copy of the Notice of Acceleration.

On December 28, 2017, SLS’s foreclosure counsel issued a Notice of Substitute Trustee’s Sale indicating that the Property would be sold at foreclosure on February 6, 2018.

See SLS Declaration at ¶13, Exhibit 1-F, a true and accurate copy of the Notice of Substitute Trustee’s Sale.

On January 31, 2018, DHI Holdings filed a lawsuit against SLS, Deutsche Bank and others in Harris County District Court.

On February 2, 2018, the District Court issued a temporary restraining order barring SLS and Deutsche Bank from proceeding with the foreclosure sale scheduled for February 6, 2018.

See Asby Declaration at ¶4, Exhibit 2, February 2, 2018 Order entered by the Harris District Court in a prior lawsuit between the parties.

On November 12, 2019, DHI Holdings and Defendants, through counsel, filed a Rule 11 Agreement pursuant to which DHI Holdings agreed that summary judgment on its statute of limitations defense to Defendants’ foreclosure would enter against DHI Holdings and in favor of Defendants.

See Asby Declaration at ¶5, Exhibit 3, Rule 11 Agreement dated November 12, 2019.

On November 13, 2019, the District Court entered an Agreed Final Summary Judgment in accordance with the Rule 11 Agreement.

See Asby Declaration at ¶6, Exhibit 4, Agreed Final Summary Judgment.

DHI Holdings appealed the Agreed Final Summary Judgment to the Fourteenth Court of Appeals.

On November 2, 2021, the Court of Appeals affirmed the District Court’s judgment.

See Asby Declaration at ¶7, Exhibit 5, Court of Appeals’ Judgment entered in the appeal of the judgment in the prior lawsuit.

After the TRO entered on February 2, 2018, SLS sent monthly mortgage statements to Borrower indicating that Borrower could reinstate the loan by paying an amount that was significantly less than the accelerated balance.

See SLS Declaration at ¶16, Exhibit 1-G, a true and accurate copy of the February 1, 2018 mortgage statement.

In addition, SLS sent Borrower correspondence inviting Borrower to contact SLS to discuss loss mitigation options including a repayment plan and loan modification agreement.

On October 27, 2023, SLS’s foreclosure counsel sent Borrower a notice of default and notice of intent to accelerate.

See SLS Declaration at ¶22, Exhibit 1-I, a true and correct copy of the October 27, 2023 Notice of Default.

Defendants thereafter accelerated the loan balance and scheduled a foreclosure sale for March 5, 2024.

DHI Holdings commenced the instant lawsuit by filing a petition and application for temporary restraining order and temporary injunction in Harris County District Court on February 29, 2024.

On March 1, 2024, the District Court entered an ex parte temporary restraining order.

Defendants removed the lawsuit to this court on April 5, 2024.

III.             LEGAL STANDARDS

To be entitled to a preliminary injunction, the applicant must show

(1) a substantial likelihood that he will prevail on the merits,

(2) a substantial threat that he will suffer irreparable injury if the injunction is not granted,

(3) his threatened injury outweighs the threatened harm to the party whom he seeks to enjoin,

and

(4) granting the preliminary injunction will not disserve the public interest.

Bluefield Water Ass’n, Inc. v. City of Starkville, Miss. 577 F.3d 250, 252-53 (5th Cir. 2009).

The Fifth Circuit has “cautioned repeatedly that a preliminary injunction is an extraordinary remedy which should not be granted unless the party seeking it has ‘clearly carried the burden of persuasion’ on all four requirements.”

Id., citing Lake Charles Diesel, Inc. v. Gen. Motors Corp., 328 F.3d 192, 195–96 (5th Cir. 2003).

See also Winter v. Nat’l Res. Def. Council, Inc., 555 U.S. 7, 24 (2008)

(“A preliminary injunction is an extraordinary remedy never awarded as of right.”).

IV.             ARGUMENT

A.                DHI Holdings Lacks Capacity to Bring Suit Against Defendants.

The “capacity to sue and legal existence are prerequisite to a party’s ability to bring and maintain a lawsuit.” Northpoint Tech., Ltd v. Directv, Inc, No. 1-09-CV-506 JRN, 2010 WL 11444098, at *2 (W.D. Tex. Oct. 25, 2010), report and recommendation adopted in part sub nom.

Northpoint Tech., Ltd. v. DirecTV Grp., Inc., No. 09-CV-506-JRN, 2010 WL 11444157 (W.D. Tex. Dec. 13, 2010), citing Maxwell v. Henry, 815 F. Supp. 213, 215 (S.D. Tex. 1993) and Roby v. Corp. of Lloyd’s, 796 F. Supp. 103, 110 (S.D.N.Y. 1992).

When a limited partnership’s right to do business in Texas is forfeited, the entity “may not maintain an action, suit, or proceeding in a court of this state.”

Tex. Bus. Orgs. Code Ann. § 153.309(a)(1); Manning v. Enbridge Pipelines (E. Texas) L.P., 345 S.W.3d 718, 723 (Tex. App.—Beaumont 2001, pet. denied).

Here, DHI Holdings has forfeited its right to do business in Texas.

See Asby Declaration at ¶3, Exhibit 1, April 30, 2024 Franchise Tax Account.

Accordingly, DHI Holdings lacks capacity to maintain this action.

Tex. Bus. Orgs. Code Ann. § 153.309(a)(1); Manning, 345 S.W.3d at 723.

B.                 DHI Holdings Cannot Establish a Likelihood of Success on the Merits.

DHI Holdings contends that Defendants cannot foreclose because the four-year statute of limitations for non-judicial foreclosure has already run.

TRO Motion, ¶¶ 22 -28.

Specifically, DHI Holdings contends that Defendants were required to complete the non-judicial foreclosure within four years of either the notice of sale Defendants issued in February 2017 or the notice of acceleration Defendants issued in December 2017.

Id., ¶¶ 26-27.

DHI Holdings’ argument fails because Defendants abandoned the prior acceleration of the loan.

A sale of real property subject to a Deed of Trust lien must be made not later than four (4) years after the day the cause of action accrues.

Tex. Civ. Prac. & Rem. Code § 16.035(b);

Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 567 (Tex. 2001).

When a Note is payable in “installments and is secured by a real property lien, the four-year limitations period does not begin to run until the maturity date of the last note, obligation, or installment.”

Boren v. U.S. Nat’/ Bank Ass’n, 807 F.3d 99, 104 (5th Cir. 2015), citing EMC Mortg. Corp. v. Window Box Ass’n, Inc., 264 S.W.3d 331, 335 (Tex. App.—Waco 2008, no pet.).

If the Note contains an optional acceleration clause, the cause of action accrues “when the holder actually exercises its option to accelerate.”

Holy Cross, 44 S.W.3d at 566. Acceleration requires both a “Notice of Intent to Accelerate” and a “Notice of Acceleration.” Id.

Both notices must be “clear and unequivocal.”

Id., citing Humway v. Horizon Credit Corp., 801 S.W.2d 890, 892 (Tex. 1991).

It is well-established that a holder may abandon acceleration.

Holy Cross, 44 S.W.3d at 566-67; DeFranceschi v. Seterus, lncorp., 731 Fed.Appx. 309, 311 (2018).

If the acceleration of the note is abandoned by the holder before the limitations period expires, the contract is returned to its original condition, thereby “restoring the note’s original maturity date” for purposes of accrual.

Boren, 807 F.3d at 104, quoting Khan v. GBAK Properties, Inc., 371 S.W.3d 347, 353 (Tex. App.—Houston [1st Dist.] 2012, no pet.); see also Ocwen Loan Serv. v. REOAM, L.L.C., No. 18-40278, 2018 WL 5930610 at *2 (5th Cir. Nov. 13, 2018).

Therefore, if the holder abandons acceleration, it is no longer required to foreclose within the four-year limitations period.

Ocwen Loan Serv., 2018 WL 5930610 at *2.

Acceleration of a Note’s maturity may be abandoned by agreement or other actions of the parties.

Holy Cross, 44 S.W.3d at 566-67, citing San Antonio Real-Estate, Bldg. & Loan Ass ‘n v. Stewart, 61 S.W. 386, 388 (Tex. 1901).

An example of “other actions” that can constitute abandonment of acceleration is “where the holder continues to accept payments without exacting any remedies available to it upon declared maturity.”

Residential Credit Solutions, Inc. v. Burg, No. 01-05-00067-CV, 2016 WL 3162205, at *3 (Tex. App.—Houston [1st Dist.] June 2, 2016, no pet.);

see also Graham v. LNV Corp., No. 03-16–00235–CV, 2016 WL 6407306, at •3 (Tex. App.—Austin Oct. 26, 2016, pet. denied) (mem. op.)

(citing cases holding that abandonment may be unilateral “so long as the borrower neither detrimentally relied on the acceleration nor objected to the abandonment of the acceleration”).

In Boren, the Court held a holder may abandon acceleration when it “put[ s] the debtor on notice of its abandonment . . . by requesting payment on less than the full amount of the loan.”

807 F.3d at 105, citing Leonard v. Ocwen Loan Servicing, l.L.C., 616 Fed.Appx. 677, 680 (5th Cir. 2015) (per curium) (unpublished)).

The holder in Boren sent a second notice of default, which informed the borrowers that in order to cure the default, the borrowers needed to pay the amount due under the original terms of the Note and “that the bank would accelerate the maturity date of the loan if the Borens failed to pay this amount.”

Id. at 106.

The Boren court held that the second notice of default “unequivocally manifested an intent to abandon the previous acceleration and provided the Borens with an opportunity to avoid foreclosure if they cured their arrearage.”

Id.

Thus, the statute of limitations ceased to run at the point of the second notice of default.

Id.

Here, Defendants do not dispute that the loan was accelerated as of December 29, 2017 when Defendants’ foreclosure counsel issued the Notice of Acceleration.

However, Defendants abandoned the December 2017 acceleration of the loan following DHI Holdings’ commencement of a lawsuit in January 2018 wherein DHI Holdings asserted (unsuccessfully) the same statute of limitations defense to foreclosure.

Shortly following DHI Holdings’ commencement of the prior lawsuit, and after DHI Holdings obtained a temporary restraining order, SLS sent monthly mortgage statements to the Borrower that indicated the amount Borrower needed to pay to reinstate the loan.

The reinstatement statement amounts in the mortgage statements were significantly less than the accelerated balance, which was also set forth in the mortgage statements.

The mortgage statements advised that “[f]ailure to bring your loan current may result in fees and foreclosure – the loss of your home.”

The mortgage statements also included a detachable payment coupon to enclose with a reinstatement check.

The coupon noted that the reinstatement payment must be paid via certified funds.

The mortgage statements thus “unequivocally manifested [Defendants’] intent to abandon the previous acceleration and provided [Borrower] with an opportunity to avoid foreclosure if [he] cured [the] arrearage.”

Boren, 807 F.3d at 106;

PHH Mortg. Corp. v. Aston as Tr. for Polo Meadow Tr., No. 01-21-00057-CV, 2022 WL 3363196, at *6 (Tex. App.—Houston [1st Dist.] Aug. 16, 2022, pet. denied)

(“Other courts, however, have found similar language to be an unequivocal manifestation of the intent to abandon a prior acceleration.”).

In addition, SLS sent Borrower a letter in June 2018, wherein SLS invited Borrower to contact SLS to discuss loss mitigation options including a repayment plan or a loan modification.

See SLS Declaration at ¶18, Exhibit 1-H, a true and accurate copy of the June 28, 2018 letter.

Once again, Defendants unambiguously conveyed to Borrower that he could pay less than the accelerated balance of the loan to avoid foreclosure.

Finally, in October 2023, Defendants’ foreclosure counsel sent Borrower a new Notice of Default and Intent to Accelerate. Like Boren, the new Notice of Default advised Borrower of Defendants’ “intent to accelerate the maturity of the Loan, declare the entire balance of the Loan due and payable without further demand, and proceed to foreclose and sell the Property under the terms of the Deed of Trust at a non-judicial foreclosure sale” if the default was not cured.

Such language shows Defendants’ unequivocal intent to abandon the prior acceleration and provided Borrower with yet another opportunity to avoid foreclosure.

Because Defendants abandoned acceleration, the statute of limitations ceased to run following the December 29, 2017 Notice of Acceleration.

Therefore, DHI Holdings’ contention that the lien is void due to the expiration of the statute of limitations is without merit.

V.                CONCLUSION

For the foregoing reasons, Defendants respectfully request that this Court deny Plaintiff’s Application for Temporary Restraining Order and Preliminary Injunction.

May 2, 2024                                                                Respectfully submitted,

DUANE MORRIS LLP

/s/ Cameron J. Asby

Cameron J. Asby
Texas Bar No. 24078160
CJAsby@duanemorris.com

1300 Post Oak Blvd., Suite 1500
Houston, TX 77056-3166
Tel.:     (713) 402-3900
Fax:     (713) 402-3901

ATTORNEY FOR DEFENDANTS

CERTIFICATE OF SERVICE

I hereby certify that service of a true and correct copy of the foregoing document was served on counsel of record via ECF on this 2nd day of May 2024.

/s/ Cameron J. Asby

Cameron J. Asby

U.S. District Court
SOUTHERN DISTRICT OF TEXAS (Houston)
CIVIL DOCKET FOR CASE #: 4:24-cv-01270

About This Property

(713) 459-9741 – Clean family house move in ready – This is a fabulous house, perfect for a family or young professionals. quiet neighborhood near beltway eight. Near shopping centers and Bush International airport. Check out our website for more properties and to fill out your application http://www.dhiholdingslp.com/ click on vacancies 🙂 For showings Contact Alex Lizblaria 713-459-9741 (RLNE3371250) Pet policies – Small Dogs Allowed, Cats Allowed.

11315 Harbour Lake Ct is a house located in Harris County and the 77396 ZIP Code. This area is served by the Humble Independent attendance zone.
Location
Property Address: 11315 Harbour Lake Ct, Humble,TX77396