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LACY v. WILSHIRE CREDIT CORPORATION

http://www.leagle.com/unsecure/page.htm?shortname=infdco20090520884

LACY v. WILSHIRE CREDIT CORPORATION

CLARENCE DEAN LACY, Plaintiff,
v.
WILSHIRE CREDIT CORPORATION, Defendant.

Civil Action No. H-08-3389.

United States District Court, S.D. Texas, Houston Division.

May 19, 2009.

MEMORANDUM AND ORDER

NANCY F. ATLAS, District Judge.

This case is before the Court on the Motion for Summary Judgment (“Motion”) [Doc. # 16] filed by Defendant Wilshire Credit Corporation (“Wilshire”).[ 1 ] Plaintiff Clarence Dean Lacy filed a Response [Doc. # 18] in opposition to Defendant’s Motion. Defendant neither filed a Reply nor requested additional time to do so. Having reviewed the full record and applied governing legal authorities, the Court denies Defendant’s Motion.

I. BACKGROUND

Plaintiff purchased a tract of property in College Station, Texas, in 1993. In connection with the purchase, Plaintiff executed a promissory note and deed of trust. Eventually, the servicing of the loan was transferred to Defendant.

Plaintiff fell behind on his loan payments during a family emergency. After the emergency was resolved, Plaintiff contacted Wilshire to ask how much he needed to pay to bring the note current. Plaintiff alleges, supported by his own affidavit, that Wilshire’s employee told him that the note was current. See Plaintiff’s Affidavit, Exh. A to Response, ¶ 6. At that point, Plaintiff believed that his father had made the payments on his behalf during the period of emergency. See id. Defendant claims, supported by its evidence, that its employee told Plaintiff that the loan was on hold and that there was “no tad (total amount due)” and told him to call again the following week. See Affidavit of Danny Tye, Exh. A to Defendant’s Motion, ¶ 9.

Plaintiff alleges that in October 2007, he discovered that a Non-Judicial Foreclosure Sale was held for his property in August 2007. The property was sold for $81,541.17. Plaintiff asserts that he would have brought the loan current had he known that it was delinquent and would, thereby, have avoided the foreclosure and sale.

On September 30, 2008, Plaintiff filed this lawsuit in Texas state court alleging negligent misrepresentation and fraud by Wilshire. On November 12, 2008, Defendant filed a timely Notice of Removal, removing the lawsuit to this Court. The Court conducted the initial pretrial and scheduling conference on January 26, 2009, establishing October 26, 2009, as the deadline for the parties to complete discovery. On April 9, 2009, Defendant filed its Motion for Summary Judgment. Defendant argues that the summary judgment evidence establishes conclusively that Wilshire never represented to Plaintiff that the loan was current and that there was no fraud. The Motion is now ripe for decision.

II. STANDARD FOR SUMMARY JUDGMENT

Summary judgment is proper only if the pleadings, depositions, answers to interrogatories, and admissions on file, together with any affidavits filed in support of the motion, show that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c). The moving party bears the burden of demonstrating that there is no evidence to support the nonmoving party’s case. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986); Nat’l Union Fire Ins. Co. v. Puget Plastics Corp., 532 F.3d 398, 401 (5th Cir. 2008). If the moving party meets this initial burden, the burden shifts to the nonmovant to set forth specific facts showing the existence of a genuine issue for trial. See Hines v. Henson, 293 F. App’x 261, 262 (5th Cir. 2008) (citing Pegram v. Honeywell, Inc., 361 F.3d 272, 278 (5th Cir. 2004)). The Court construes all facts and considers all evidence in the light most favorable to the nonmoving party. Nat’l Union, 532 F.3d at 401.

III. ANALYSIS

Plaintiff asserts claims against Wilshire for negligent misrepresentation and fraud, and Wilshire seeks summary judgment on each of these claims.

“Negligent misrepresentation requires proof that: (1) the defendant in the course of his business or a transaction in which he had an interest; (2) supplied false information for the guidance of others; (3) without exercising reasonable care or competence in communicating the information; (4) the plaintiff justifiably relied on the information; (5) proximately causing the plaintiff’s injury.” Kastner v. Jenkens & Gilchrist, P.C., 231 S.W.3d 571, 577 (Tex. App. — Dallas 2007, no pet.); see also In Re Stonebridge Techs., Inc., 430 F.3d 260, 267 n.4 (5th Cir. 2005). Plaintiff has presented evidence that Wilshire in the course of its business misrepresented to Plaintiff that his loan was current, that Plaintiff justifiably relied on that information in not making additional payments at that time, and that Plaintiff was injured as a result of the misrepresentation because his property was sold at foreclosure. See Plaintiff’s Affidavit, ¶¶ 6-8, 11. Plaintiff’s evidence raises a genuine issue of material fact precluding summary judgment on the negligent misrepresentation claim.

Under Texas law, the elements of a fraud cause of action are: (1) a material representation was made; (2) it was false when made; (3) the speaker either knew it was false, or made it without knowledge of its truth; (4) the speaker made it with the intent that it should be acted upon; (5) the party acted in reliance; and (6) the party was injured as a result. Herrmann Holdings Ltd. v. Lucent Techs. Inc., 302 F.3d 552, 563 n.3 (5th 2002) (citing Formosa Plastics Corp. USA v. Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41, 47 (Tex. 1998)). Plaintiff has presented evidence that Wilshire represented to him that his loan was current, that the representation was incorrect, that the Wilshire employee who made the representation either knew it was incorrect or did not know whether it was correct, that the Wilshire employee knew that Plaintiff would act on the information he provided, and that Plaintiff in fact relied on the information by not making additional payments on the loan at that time. See Plaintiff’s Affidavit, ¶¶ 6-8, 11. Plaintiff has also presented evidence that he was injured as a result of his reliance on the misrepresentation because the property was sold at foreclosure. Plaintiff’s evidence raises a genuine issue of material fact as to the fraud claim. As a result, summary judgment is inappropriate and must be denied.

IV. CONCLUSION AND ORDER

Plaintiff has presented evidence that raises a genuine issue of material fact as to his fraud and negligent misrepresentation claims. Accordingly, it is hereby

ORDERED that Defendant’s Motion for Summary Judgment [Doc. # 16] is DENIED. It is further

ORDERED that Plaintiff’s Motion to Strike Defendant’s Summary Judgment Evidence [Doc. # 19] and Motion for Continuance [Doc. # 20] are DENIED AS MOOT.

1. Also pending are Plaintiff’s Motion to Strike Defendant’s Summary Judgment Evidence [Doc. # 19] and Motion for Continuance [Doc. # 20] seeking additional time to respond to Defendant’s Motion for Summary Judgment. Defendant filed a Response [Doc. # 21] opposing Plaintiff’s Motion for a Continuance. Because the Court has not considered any evidence that is not properly considered for summary judgment purposes, and because Plaintiff filed a full and timely response to Defendant’s Motion for Summary Judgment, each of Plaintiff’s motions are denied as moot.

 

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January 7, 2010 Posted by | Forclosure Lawsuits, Foreclosure Filings - General, Wilshire Credit Corporation | Leave a comment

SEC charges 3 officers of Subprime Lender New Century Financial Corporation with Fraud

New Century Fiancial Corp officers charged w fraudU.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21327 / December 7, 2009

SECURITIES AND EXCHANGE COMMISSION v. BRAD A. MORRICE et al., Civil Action No. SACV09-01426 JVS (C.D. Cal.) SEC CHARGES FORMER OFFICERS OF SUBPRIME LENDER NEW CENTURY WITH FRAUD The

Securities and Exchange Commission today charged three former top officers of New Century Financial Corporation with securities fraud for misleading investors as New Century’s subprime mortgage business was collapsing in 2006. At the time of the fraud, New Century was one of the largest subprime lenders in the nation. The SEC’s complaint names as defendants: Former CEO and co-founder Brad A. Morrice of Laguna Beach, Calif. Former CFO Patti M. Dodge of Irvine, Calif. Former Controller David N. Kenneally of Rossmoor, Calif.

(The complete Complaint is available on the SEC site.)

December 8, 2009 Posted by | Foreclosure Filings - General, News | Leave a comment

Fremont Investment and Loan’s docket report 1:09-0cv-00900

FREMONT DOCKET CARROLL CASE

Docket Report for Carroll, et al. v. Fremont Investment & Loan.

 

November 25, 2009 Posted by | Foreclosure Filings - General, Fremont Investment & Loan | Leave a comment

Fremont Investment and Loan Motion To Dismiss

FREMONT’S MOTION TO DISMISS

Robert Carroll, et al. v. Fremont Investment & Loan

November 25, 2009 Posted by | Foreclosure Filings - General, Fremont Investment & Loan | Leave a comment

Commonwealth v. Fremont Investment and Loan (Dec. 9, 2008)

November 10, 2009 Posted by | Foreclosure Filings - General | 1 Comment

FDIC Issues Cease and Desist Order Against Fremont Investment & Loan, Brea, California, and its Parents

FDIC’s press release regarding the Cease & Desist Order:

http://www.fdic.gov/news/news/press/2007/pr07022.html

The actual Cease & Desist Order:

http://www.fdic.gov/bank/individual/enforcement/2007-03-00.pdf

November 5, 2009 Posted by | Foreclosure Filings - General, Fremont Investment & Loan | Leave a comment

Fremont Investment & Loan forced by FDIC to ‘cease & desist”

Our orginator was Fremont Investment & Loan in Dec. 2006 shortly before this ‘cease & desist.” They transferred my loan to Wilshire Credit Corp., a shady mortgage servicing company.  They proceeded to foreclose on our home in January 2009. 
We signed fraudulent closing papers with Fremont – a lender that was forced by FDIC to “cease & desist” its lending! I had an audit done and found violations.
Oh, I requested the “Note” from Wilshire and they apparently don’t have it – which appears means they weren’t in the position to foreclose.

Who do I sue the originator (Fremont Investment & Loan) or mortgage servicing company (Whilshire)?

November 4, 2009 Posted by | Foreclosure Filings - General, Fremont Investment & Loan | 1 Comment

FDIC Issues Cease & Desist Order Against Fremont Investment & Loan

http://www.nyforeclosureinformation.com/?p=27 FDIC Issues Cease and Desist Order Against Fremont Investment & Loan

Date March 8, 2007

On March 8, 2007 the Federal Deposit Insurance Corporation (FDIC) issued a cease and desist order against Fremont Investment & Loan, Brea, California (”Bank”), and its parent corporations, Fremont General Corporation and Fremont General Credit Corporation. The FDIC found that the bank was operating without effective risk management policies and procedures in place in relation to its subprime mortgage and commercial real estate lending operations. The FDIC determined, among other things, that the bank had been operating without adequate subprime mortgage loan underwriting criteria, and that it was marketing and extending subprime mortgage loans in a way that substantially increased the likelihood of borrower default or other loss to the bank.

The order sets forth a variety of corrective actions to be undertaken. The order requires that the bank adopt a five-year strategic plan for its business. The order also requires that the bank, within 90 days, adopt a subprime mortgage lending policy with provisions designed to correct its lending practices, including that it underwrite future subprime loans with an analysis of the borrower’s ability to repay at the fully indexed rate and provide borrowers with clear information about the benefits and risks of the products. The order also requires the bank within 90 days to describe efforts it will make to restructure loans in distress consistent with the marketability of such loans and with sound principles of underwriting. In addition, the order requires the bank to fully comply with all consumer protection laws. The order also requires the bank to correct its commercial real estate lending practices.

Source of post: FDIC press release.

October 19, 2009 Posted by | Foreclosure Filings - General, Fremont Investment & Loan | Leave a comment