JANIS GRAHAM JACK, District Judge.
On this day came on to be considered Defendants/Counter-Plaintiffs Cesar Flores and Alvin E. King's Motion for Partial Summary Judgment on the issue of whether their debt has been "paid in full" (D.E. 125); and Plaintiff/Counter-Defendant Vanderbilt Finance and Mortgage Inc.'s Motion for Summary Judgment as to Flores and King's Counterclaims (D.E. 143). For the reasons stated herein, Defendants/Counter-Plaintiffs' Motion for Partial Summary Judgment (D.E. 125) is DENIED. Plaintiff/Counter-Defendant Vanderbilt's Motion for Summary Judgment (D.E. 143) is also DENIED.
This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1331, federal question, because Intervenors Maria and Arturo Trevino brought claims under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961-1968 ("RICO"), and Intervention-Defendant CMH Homes, Inc. properly removed this case to this Court pursuant to 28 U.S.C. § 1441. (D.E. 34.)
The factual and procedural background relevant to the current summary judgment motions are as follows:
Defendants/Counter-Plaintiffs Cesar Flores and Alvin E. King entered into a Retail Installment Contract (the "Contract") with Intervention-Defendant CMH Homes for the purchase of a manufactured home. Plaintiff/Counter-Defendant Vanderbilt Finance and Mortgage, Inc. ("Vanderbilt") provided the financing for the Contract. When they signed the Contract at the Corpus Christi store of CMH Homes on January 5, 2002, Flores and King opted to finance the entire $40,815.19 purchase price, obligating themselves to make a total of $73,641.60 in payments. (D.E. 142, p. 4; Ex. 1; Ex. 2, (Flores Deposition), p. 49.) The debt was secured by two vacant lots in Jim Wells County, Texas owned by Intervenors Maria and Arturo Trevino, the sister and brother-in-law of Flores. (D.E. 142, Ex. 1.) A Deed of Trust ("DOT") and a Mechanic's and Builder's Lien ("BML"), filed in the records of Jim Wells County on January 11, 2002, created security interests in the Trevinos' property. Specifically, the DOT created a security interest in favor of Vanderbilt; the BML created a security interest in favor of CMH Homes. According to Vanderbilt, CMH Homes immediately assigned the Contract to Vanderbilt, and Vanderbilt paid CMH Homes $40,815.19 as consideration for the assignment on January 16, 2002. (D.E. 142, Ex. 1, p. 4; Ex. 8 (Krupac Decl. ¶ 3.))
The Counter-Plaintiffs now contend that many of the property owners whose property secured these debts did not voluntarily pledge their property to secure the purchases of manufactured homes. Rather, they contend, CMH employees at the Corpus Christi store of CMH Homes (referred
In 2005 CMH and Vanderbilt released the liens created by BML's and DOT's for nearly 400 parcels of land, including the Trevinos' property. (D.E. 142, p. 4.) The Builder's and Mechanic's Lien Release ("BML Release") provides, in relevant part:
(D.E. 125, Ex. H.) (emphasis added). The Deed of Trust Release ("DOT Release") provides:
(D.E. 125, Ex. I (emphasis added)). Notably, the DOT release does not contain the phrase that Vanderbilt has been "paid in full."
Flores and King, meanwhile, continued to live in their manufactured home until King moved out in the spring of 2009; Flores continued to live there until recently, when he moved in with his mother. (D.E. 145, p. 4.) Flores and King made 84 payments on their Contract until they defaulted. Payments in the amount of $25,000 were made after the BML and DOT releases were filed. (D.E. 143, p. 14; Ex. 20, at Interrog. No. 5.)
On August 4, 2009, Vanderbilt brought suit to foreclose on Flores and King's home. On September 18, 2009, Flores and King counter-sued, bringing the following causes of action: (1) common law unfair debt collection; (2) Texas Debt Collection Practices Act ("TDCA"); (3) fraud; (4); and claims under RICO. (D.E. 1, Ex. B.) Maria and Arturo Trevino subsequently intervened in the lawsuit, bringing similar causes of action and joining additional Intervention-Defendants, CMH Homes, Clayton Homes, Inc., Kevin T. Clayton, John Wells, and Benjamin Frazier (collectively, the "Intervention-Defendants.") (D.E. 11, Ex. C; D.E. 98.)
The Counter-Plaintiffs now move for partial summary judgment on the specific issue of whether their debt to Vanderbilt under the Contract for their manufactured home has been "paid in full." They contend that Vanderbilt released their debt in October 2005 when it executed releases of the attendant liens placed on the Trevinos' property, and that they were subsequently forced to make payments on a debt they no longer owed. (D.E. 125.) There is no dispute that the underlying debt has not actually been paid. Flores and King admit that they have made only 84 payments of the 144 payments they owed on the Contract. (D.E. 142, Ex. 14 (David Barton Decl.), ¶ 4; D.E. 142, Ex. 2 (Flores Depo.), p. 67-68.) However, the Counter-Plaintiffs argue that the "paid in full" phrase in the BML Release has the effect of "releasing both the forged lien and deed of trust on the Trevinos' real property in Jim Wells County, and also releasing the debt purportedly secured by the forged real estate documents originally owed by Mr. Flores and Mr. King as "paid in full."" (D.E. 125, p. 4.) They assert that the summary judgment evidence "conclusively establishes that Clayton Homes intended to release, and did in fact, release the debt owed by Mr. Flores and Mr. King as `paid in full,' as of October 8, 2005." (D.E. 125, p. 4.)
Vanderbilt disputes this characterization of the intentions behind the Releases and of the Releases' legal effect based on a number of theories which the Court addresses more specifically below. (D.E. 142, p. 2-3.) Vanderbilt has moved for summary judgment on all the Counter-Plaintiffs' claims which include (1) common law unfair debt collection; (2) Texas Debt Collection Practices Act ("TDCA"); (3) fraud; and (4) RICO. (D.E. 143.)
Under Federal Rule of Civil Procedure 56, summary judgment is appropriate if 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." Fed.R.Civ.P. 56(c)(2). The substantive law identifies which facts are material. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Ellison v. Software Spectrum, Inc., 85 F.3d 187, 189 (5th Cir.1996). A dispute about a material fact is genuine only "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248, 106 S.Ct. 2505; Judwin Props., Inc. v. U.S. Fire Ins. Co., 973 F.2d 432, 435 (5th Cir. 1992).
On summary judgment, "[t]he moving party has the burden of proving there is no genuine issue of material fact and that it is entitled to a judgment as a matter of law." Rivera v. Houston Indep. Sch. ist., 349 F.3d 244, 246 (5th Cir.2003); see also Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the moving party meets this burden, "the non-moving party must show that summary judgment is inappropriate by setting forth specific facts showing the existence of a genuine issue concerning every essential component of its case." Rivera, 349 F.3d at 247. The nonmovant "may not rely merely on allegations or denials in its own pleading; rather, its response must... set out specific facts showing a genuine
In this case, Defendants/Counter Plaintiffs Flores and King request partial summary judgment on the single issue of whether their debt was paid in full, pursuant to Federal Rule of Civil Procedure 56(d). (D.E. 125.) Under Rule 56(d)(2), "[a]n interlocutory summary judgment may be rendered on liability alone, even if there is a genuine issue on the amount of damages." Fed.R.Civ.P. 56(d)(2). "A partial summary judgment order in accordance with Rule 56(d) is not a final judgment but is merely a pre-trial adjudication that certain issues are established for trial of the case." F.D.I.C. v. Massingill, 24 F.3d 768, 774 (5th Cir.1994); see Preston Exploration Co. v. Chesapeake Energy Corp., 716 F.Supp.2d 656, 2010 WL 2357876, at *1 n. 1 (S.D.Tex. June 11, 2010) (citing Massingill). "Rule 56(d) empowers the Court to determine what material facts are not genuinely at issue, where summary judgment is not rendered on the whole action, so as to clarify the triable issues that remain." Barrington Group Ltd., Inc. v. Classic Cruise Holdings S. De R.L., 2010 WL 184307, at *4 (N.D.Tex. Jan. 15, 2010) (internal quotation marks omitted).
The threshold issue underlying both the Counter-Plaintiffs' Motion for Partial Summary Judgment and all the claims at issue in Vanderbilt's Motion for Summary Judgment—and the primary issue before the Court—is whether Vanderbilt and CMH Homes released Flores and King's underlying debt on the Contract when they filed the BML Release and DOT Release in the fall of 2005, despite the fact that Flores and King's debt was never fully paid. To answer this question, the Court first addresses the alleged assignment of the Contract to Vanderbilt, then considers the operative language in the releases.
As an initial matter, the Court must determine which party in this action was entitled to release the debt owed on the Counter-Plaintiffs' Contract. Vanderbilt contends that CMH assigned all rights to collect the debt owed under the Contract to Vanderbilt immediately after the transaction occurred, and that, as such, only Vanderbilt had the right to release this debt. (D.E. 142, p. 9.) The Intervenors dispute that any assignment occurred. (D.E. 162, p. 2.) As discussed below, the Court finds that issues of fact remain as to whether an effective assignment to Vanderbilt occurred.
"An assignment generally transfers some right or interest from one person to another. In Texas, the right to receive payment for a debt is generally assignable." Skipper v. Chase Manhattan Bank USA, N.A., 2006 WL 668581, at *1 (Tex.App.-Beaumont Mar. 16, 2006) (citing Cloughly v. NBC Bank-Seguin, N.A., 773 S.W.2d 652, 655 (Tex.App.-San Antonio 1989)). "Generally, `after a debtor receives notice of a valid assignment, payment made by the debtor to the assignor or to any person other than the assignee is made at the debtor's peril and does not discharge the debtor from liability to the assignee.'" Holloway-Houston, Inc. v. Gulf Coast Bank & Trust Co., 224 S.W.3d 353, 361 (Tex.App. Houston 1st Dist.2006) (quoting Buffalo Pipeline Co. v. Bell, 694 S.W.2d 592, 596 (Tex.App.Corpus Christi 1985)); see also Tex. Bus. & Com.Code § 9.406 ("After receipt of the notification, the account debtor may discharge its obligation by paying the assignee and may not discharge the obligation by paying the assignor.").
Here, there is enough evidence of an assignment to Vanderbilt to establish a question of fact. The Contract states that Vanderbilt "hereby assigns within contract and all Seller's right, title and interest in it, and its collateral to Vanderbilt," the Assignee. (D.E. 142, Ex. 1, p. 5.)
In order for the assignment to become effective, Flores and King must have
On the other hand, the Intervenors have presented evidence suggesting that the Contract was never effectively assigned to Vanderbilt. The record is clear that the primary purpose of securing the debts created by CMH Homes' retail installment contracts with liens on real property was to ensure that payments on the underlying contractual debt were made by customers with poor credit. Yet CMH Homes retained its security interest in the Trevinos' property (the BML)—which was ostensibly intended to secure the underlying debt on Flores and King's Contract—until long after the alleged assignment of the Contract to Vanderbilt occurred. Nearly four years passed between the time of the alleged assignment in January 2002 and the filing of the BML Release in October 2005. It is unclear why CMH would retain its security interest in the Trevinos' property for so long if the underlying debt had truly been assigned to Vanderbilt.
In addition, neither party disputes that Vanderbilt and CMH worked together in filing the Releases of these security interests. Vanderbilt's and CMH Homes' management jointly made the decision to release the liens. (D.E. 142, p. 5 ("Booth [President of CMH] and Nichols [President of Vanderbilt] decided to release the liens[.]"); D.E. 144, p. 6 ("Mr. Booth and Paul Nichols ... assessed how to best protect the interests of their customers and of the landowners.").) The BML and the DOT Releases were both signed by the same corporate officer, David Jordan. (D.E. 157, Ex. S (Jordan Deposition), p. 85-86.) Jordan is listed on CMH's BML Release as "Asst. Secretary for CMH Homes, Inc." and on Vanderbilt's DOT Release as "Asst. Secretary for Vanderbilt Mortgage and Finance, Inc." (D.E. 125, Ex. H (BML Release), Ex I (DOT Release).) The DOT Release and the BML Release both contain the "CMH Homes, Inc." letterhead. (D.E. 125, Ex. I (DOT Release); Ex. H (BML Release).) This evidence—showing CMH retained its liens on the Trevinos' and other individuals' property even after the alleged assignment occurred and was jointly involved in signing the mass lien releases—is inconsistent with an assignment of the Contract to Vanderbilt. Rather, it suggests CMH considered itself as still having an interest in the underlying contractual debt that these liens were intended to secure.
In conclusion, the Court finds that, although Vanderbilt presents some evidence that CMH assigned the Contract to Vanderbilt, issues of fact remain as to whether an effective assignment occurred. As such, issues of fact remain as to whether Vanderbilt or CMH was entitled to release
Mechanic's liens "are creatures of both the Texas Constitution and the Texas Legislature ... The requirements for the fixing and perfection of a statutory mechanic's lien are set forth in Chapter 53 of the Texas Property Code." In re Kleibrink, 346 B.R. 734, 757-58 (Bkrtcy. N.D.Tex.2006) (internal citations and quotation marks omitted). Tex. Prop.Code § 53.152 provides the minimal requirements for releasing a mechanic's lien.
"[A] release ... is an absolute bar to any right of action on the released matter." Addicks Servs., 596 F.3d at 297-298 (quoting Dresser Indus. v. Page Petroleum, 853 S.W.2d 505, 508 (Tex.1993)). In order to establish the affirmative defense of release, the party asserting release is required to prove the elements of a contract. In the Interest of J.P., 296 S.W.3d 830, 835 (Tex.App.Fort Worth 2009) (citing Vera v. N. Star Dodge Sales, Inc., 989 S.W.2d 13, 17 (Tex.App.San Antonio 1998)).
Consistent with the general principles outlined above, both the BML and the DOT at issue in this action recognize that complete release of the liens is proper upon full payment of the underlying debt.
The Court disagrees with Vanderbilt's characterization of Texas law. Defendants are correct that, in general, even when a release has been executed, "the underlying indebtedness is not released where the debt is not paid in the manner recited by the release and the note is never paid in full." See 30 Tex. Jr.3d Deeds of Trust and Mortgages § 123 (citing Evans, 766 S.W.2d 356). However, Texas courts have established that "minimal consideration can be sufficient to support the release of a larger indebtedness where the intent to release is shown [.]" Evans, 766 S.W.2d at 357 (emphasis added). Courts in such cases may examine parol evidence to determine whether the drafter of the release actually intended to release the underlying note. Id. (citing Lanier v. Faust, 81 Tex. 186, 16 S.W. 994 (1891); Keel v. Hoggard, 590 S.W.2d 939 (Tex.Civ.App.-Waco 1979, no writ)). Two cases involving similar circumstances to the present action are illustrative of this rule.
In First State Bank of Amarillo v. Jones, a bank executed a release of a deed of trust creating an interest in a debtor's land when only part of the underlying note had actually been paid. 107 Tex. at 627, 183 S.W. 874. The Texas Supreme Court held that even though there was a valid release document, the release did not effectively extinguish the debt because the evidence conclusively demonstrated that the defendants had not actually intended to release the debt. Id. at 631, 183 S.W. 874.
The court applied the same rule in Evans, 766 S.W.2d at 357. The facts before the court were almost directly analogous to the case at bar. The plaintiff was owed a debt by defendant and also held a lien on defendant's property. Plaintiff subsequently executed a release of the lien on the property, even though the underlying debt had not been fully paid. When the plaintiff sued to collect on the remaining balance due, the defendant argued that the balance due on the note had been released when plaintiff released the lien on the property. Id. at 356. But the court rejected the defendant's argument that the situation was controlled by the four corners of the lease unambiguously releasing the debt. The court explained:
Id. (emphasis added). In sum, the court found that, because the debt had not actually been paid in full, the release's recitation that full payment had been received did not resolve the issue of whether the release of the lien had the effect of extinguishing defendant's full debt. Rather, defendant was required to show, through parol evidence or otherwise, that plaintiff "intended to release the indebtedness despite [plaintiff's] failure to pay the note." Id. If defendant could make this showing, then the full debt would be released. However, because defendant failed to do so, the release effectively extinguished the lien on defendant's property, but the underlying debt remained intact. Id.
Both First State Bank of Amarillo and Evans stand for the proposition that, when a release categorically recites that the underlying indebtedness was paid
With these principles established, the Court now must determine whether to grant summary judgment for either party on the issue of whether Counter-Plaintiffs Flores and King's debt has been paid in full. Counter-Plaintiffs argue CMH Homes' BML Release and Vanderbilt's DOT Release unambiguously released the underlying debt owed on their Contract when they were executed on October 8, 2005 and properly filed with the County Clerk on October 14, 2005. (D.E. 125, p. 7.) However, the existence of properly executed and filed releases alone will not resolve the issue on summary judgment because the underlying debt has not yet been paid. Rather, the Court must determine whether the evidence establishes that Vanderbilt and CMH intended to release this debt. Evans, 766 S.W.2d at 357; First State Bank, 107 Tex. at 631, 183 S.W. 874. Parol evidence is admissible, and in fact necessary, to elucidate their intentions in drafting the releases. Evans, 766 S.W.2d at 357 (citing Keel, 590 S.W.2d 939 (Tex.Civ.App.-Waco 1979, no writ.)) As the party arguing for release, the Counter-Plaintiffs bear the burden of demonstrating intent to release their debt. In the Interest of J.P., 296 S.W.3d at 835.
The Counter-Plaintiffs argue the summary judgment evidence "conclusively establishes" Vanderbilt's and CMH's intent to release the debt. (D.E. 125, p. 4.) According to their version of events, Vanderbilt and CMH discovered around 2005 that their employees committed fraud in the execution of the underlying Retail Installment Contract and the documents placing liens on real property (the DOT and the BML). After discovery of this fraud, Vanderbilt and CMH filed documents releasing all the mechanics' liens and deeds of trust executed at the Corpus Christi store, as well as the underlying debt on all Retail Installment Contracts associated with those mechanic's liens and deeds of trust. (D.E. 125, p. 4.)
The BML Release refers to the Builder's and Mechanic's Lien executed on the Trevinos' property and states that "for a valuable consideration in hand paid, the said, CMH Homes, Inc. does hereby release the lien of said Mechanic's Lien Contract and has been paid in full." (D.E. 125, Ex. 14) (emphasis added). The Counter-Plaintiffs urge this Court to interpret this language as unambiguously releasing their debt as a matter of law. (D.E. 125, p. 7.) However, as explained above, the "paid in full" recitation in the BML Release is not, on its own, sufficient to conclusively demonstrate that the underlying debt was released when it was, in fact, not paid in full. Evans, 766 S.W.2d at 357; First State Bank, 107 Tex. at 631, 183 S.W. 874.
Vanderbilt argues that, given the assignment of the debt, CMH's intent to release the debt (if any) is "irrelevant," as only Vanderbilt could release the debt. (D.E. 142, p. 13.) That is, the "paid in full" language in the BML should have no bearing on whether the debts were released. The Court disagrees. As explained above, issues of fact remain as to whether an effective assignment to Vanderbilt occurred. Moreover, even if an effective assignment to Vanderbilt did occur, the language of the BML Release would not be "irrelevant." Although it would not be legally operative with respect to the underlying debt, CMH's BML Release would still be relevant to the extent that it elucidates Vanderbilt's intentions in filing the DOT Release. CMH's intentions would be particularly relevant given that, by all accounts, CMH and Vanderbilt worked together in filing the Releases. The fact that the BML Release was executed by CMH Homes, not Vanderbilt, would simply make the BML Release a slightly less conclusive source of evidence from which to infer an intent by Vanderbilt to release the underlying debt.
Nevertheless, the Court must examine all the evidence available on summary judgment to determine whether such an intent, or lack thereof, is established from the "paid in full" language in the BML Release. Vanderbilt has presented an alternative possible explanation for why the BML Release states that CMH has been paid in full. Vanderbilt argues that "paid in full" refers only to CMH's being paid in full by Vanderbilt when CMH assigned the debt to Vanderbilt in 2002 in exchange for consideration. (D.E. 142, p. 9; Ex. 8 (Amber Krupacs Decl.), p. 1.) As said, issues of fact remain as to whether this assignment even occurred. In any case, Vanderbilt's explanation that "paid in full" references only CMH's receipt of payment from Vanderbilt lacks credibility in light of the fact that the BML Release was executed long after CMH had assigned Flores and King's debt to Vanderbilt. If the assignment occurred in January 2002, it is not clear why CMH would have waited until October 2005 to file its BML Release and acknowledge that it had been "paid in full" by Vanderbilt. Moreover, the Counter-Plaintiffs' explanation—that Vanderbilt and CMH decided to release the debts of their customers in the wake of allegations of fraud by CMH employees in executing the transactions—is equally credible. Further inquiry is required in order to determine CMH's precise intentions in drafting a BML stating that CMH was "paid in full."
The DOT Release executed by Vanderbilt provides: "for a valuable consideration
The DOT Release does not "unambiguously" release only the liens on the Trevinos' property; rather, the language of the Release could also be interpreted to release Flores and King's underlying debt. While it does not contain the "paid in full" recital, the DOT Release states that "for valuable consideration in hand paid," Vanderbilt releases "the lien of said deed of trust and/or mortgage." (D.E. 125, Ex. I) (emphasis added). Vanderbilt objects that the term "mortgage" does not refer to the debt itself, but refers only to the instrument, the deed of trust, creating Vanderbilt's security interest in the Trevinos' property. (D.E. 142, p. 11). But "mortgage" can refer (among other things) to any of the following: a "lien against property that is granted to secure an obligation (such as a debt) and that is extinguished upon payment or performance according to stipulated terms"; "[a]n instrument (such as a deed or contract) specifying the terms of such a transaction"; or, "the loan on which such a transaction is based." BLACK'S LAW DICTIONARY 1101-1102 (9th ed. 2009). Moreover, as explained, minimal consideration can in some circumstances support a release even when the whole debt has not been paid. Evans, 766 S.W.2d at 357. Flores and King have made 84 of the 144 payments owed on their debt. (D.E. 142, Ex. 2 (Flores Depo.), p. 67-68.) As such, it simply is not clear from the face of the document what has been released in exchange for "valuable consideration in hand paid": the lien on the Trevino's property, or the mortgage on Flores and King's home.
Under Texas law, "if [a] contract is subject to two or more reasonable interpretations after applying the pertinent rules of construction, the contract is ambiguous, creating a fact issue on the parties' intent." J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex.2003). More importantly, as explained above, even if the Court were to interpret these contractual terms as unambiguously indicating a release of the underlying debt on Flores and King's home, the bare recital of a release would be insufficient to establish a discharge of the underlying debt in its entirety given that the debt was not actually fully paid, absent facts demonstrating Vanderbilt's or CMH's intent to do so. Evans, 766 S.W.2d at 357. In either case, the summary judgment evidence surrounding the 2005 releases must be examined to further elucidate Vanderbilt's or CMH's intentions in drafting the DOT Release.
The Court finds the summary judgment evidence does not conclusively support that Vanderbilt or CMH intended a release of the underlying debt in executing the Releases. As an initial matter, declarations submitted by Vanderbilt flatly reject the contention that either Vanderbilt or CMH intended to release manufactured home purchasers' underlying indebtedness when they released the liens. Mr. Nichols, Vanderbilt's President, states: "[t]he only intended purpose of the releases was to release any and all security interests existing on the land parcels.... Moreover, neither Vanderbilt nor CMH ever intended to cancel
Moreover, Vanderbilt presents additional evidence supporting lack of intent. Vanderbilt contends that if it had intended to release the home owners' debts, certain procedures would have been followed. Specifically, Vanderbilt contends that when a customer pays a debt in full, its standard practice is to stamp the Contract as "paid," and return it to the customer. Internal Revenue Services regulations also require Vanderbilt to notify the customer and the IRS when a debt is partially forgiven as a partially forgiven debt is considered income to the borrower. In this case, Vanderbilt did not follow this procedure. Flores and King present no evidence that they received any notice of cancellation of indebtedness. Rather, the only change to Flores and King's account after the filing of the release was a notation that the debt no longer involved land. (D.E. 142, p. 6-7.)
Vanderbilt also contends that, in order to perfect a release of Flores and King's debt on their manufactured home, it would have been required under Texas law to follow statutory procedures for removing Vanderbilt's security interest in the home—specifically, Vanderbilt would have been required to file certain forms with the Texas Manufactured Housing Division of the Texas Department of Housing and Community Affairs (TDHCA), pursuant to the Manufactured Housing Standards Act (MHSA). (D.E. 142, p. 19) (citing Tex. Occ.Code. § 12.01.207(c)). Vanderbilt contends that because Vanderbilt did not do so in this case, there could be no release, and Vanderbilt retains the right to collect on its debt and foreclose on Flores and King's home.
The Court disagrees with Vanderbilt's argument that its failure to file releases with the Manufactures Housing Division necessarily means the debt, and Vanderbilt's right to foreclose, still exists. Although the Counter-Plaintiffs' manufactured home is subject to the procedural requirements of the MHSA, see Tex. Occ. Code § 1201.207(c), the relevant transactions—the DOT and the BML Releases— involved real property and were subject to the general rules respecting releases of mechanic's liens and deeds of trust discussed above. See Tex. Prop.Code § 53.152(a) (delineating minimal obligation of contractor to release a lien upon receipt of consideration). Vanderbilt filed releases with the County in accordance with the requirements for releasing mechanic's liens or deeds of trust on real property. If these releases were valid contracts, then they are binding upon the parties subject to them. See In re J.P., 296 S.W.3d at 835 ("A release is a contract subject to the rules of contract construction.") Thus, Texas law procedures for releasing a lien on a manufactured home are not controlling on the issue of whether the releases discharged Flores and King's debt on their home. Rather, as explained above, the issue remains whether, in filing the releases of the liens on the Trevinos' property, Vanderbilt also intended to release the
Nevertheless, the fact that Vanderbilt did not go through the procedures required by the TDHCA and the MHSA is still relevant to the issue of Vanderbilt's and CMH's intentions in filing the releases. The Court finds that the inconsistency in Vanderbilt's procedures, combined with the statements of Vanderbilt and CMH management that no release of the debt was intended, preclude a finding on summary judgment that Vanderbilt or CMH intended to release Flores and King's debt in executing the Releases. See Hershey v. Energy Transfer Ptnrs., L.P., 610 F.3d 239, 249 (5th Cir.2010) (quoting In re Soybean Futures Litig., 892 F.Supp. 1025, 1058 (N.D.Ill.1995)) ("`[A]s a general matter... questions of intent are inappropriate for resolution on summary judgment[.]'")
On the other hand, Counter-Plaintiffs have produced some contrasting evidence tending to establish Vanderbilt and CMH did intend to release the underlying debt by filing the DOT and BML Releases. While this evidence is insufficient to establish their intent as a matter of law, it is sufficient to raise a genuine issue of material fact as to Vanderbilt's and CMH's intentions. The Counter-Plaintiffs primarily rely upon the testimony of Mr. Booth, who testified on behalf of CMH Homes with respect to Vanderbilt's and CMH's decision to file the releases in the fall of 2005. (D.E. 125, Ex. G, p. 9.) Booth's deposition does not directly indicate an intention on the part of Vanderbilt or CMH to release the debt. But it does suggest that neither CMH's nor Vanderbilt's intentions in the filing the releases were entirely clear, even to the companies' management. Indeed, Booth repeatedly stated that he simply did not know why the decision was made to file the releases. For example:
(D.E. 142, Ex. G, p. 122: 20-25, 123: 1-3). Moreover, at one point, Mr. Booth referred to the decision to execute releases as the "decision to release the loan," rather than the "lien." (D.E. 125, Ex. G, p. 9:21-25).
Mr. Booth's ambiguous statements in his deposition do not suffice to establish Vanderbilt's or CMH's prior intent to release the Counter-Plaintiff's debt, particularly in the context of other statements refuting any such intent to do so. But the ambiguity of Mr. Booth's responses is in stark contrast to the situation in First State Bank of Amarillo, where various bank officials, including the president of the bank who signed the release, unambiguously testified that the release of the full debt had been a mistake and that only a partial release was intended. "No person testified to the contrary. No one testified to the existence of any circumstance tending to show that it was not a mistake." First
The Counter-Plaintiffs have also presented certain internal documents from CMH Homes that contribute to this ambiguity. They have discovered that CMH Homes issued "Land Release Checklists" for their customers. In some of these Checklists, CMH employees checked the box, "YES," next to the question, "is the account paid in full?" (D.E. 125, Ex. N, Ex. O.) When asked about one of these Land Release Checklists, Mr. Booth stated that he had never seen the document before and was not aware of the process under which it had been executed. (D.E. 125, Ex. G (Booth Decl.), p. 139: 14-16.) When asked whether the document "indicates the account has been paid in full," Mr. Booth responded: "I know what it says, but I don't know if that's what it means." (D.E. 125, p. 139: 25, 140: 1.) Neither the "paid in full" language on these Checklists nor the actions of the CMH employees who executed them unambiguously demonstrate an intent to release the underlying debt. But at the same time, CMH's management is not entirely clear as to why the Land Checklist Releases were executed or as to what the "paid in full" language meant. There remain factual questions to be resolved by a fact-finder.
Because issues of fact remain as to the "paid in full" issue, the Court denies both motions for summary judgment on this issue.
Having determined that issues of fact remain with respect to the threshold issue of whether the Counter-Plaintiffs' debt has been discharged, the Court now turns to Vanderbilt's Motion for Summary Judgment on the remainder of Flores and King's claims, beginning with their claim for unfair debt collection.
Under Texas law, "[u]nreasonable collection is an intentional tort." EMC Mortg. Corp. v. Jones, 252 S.W.3d 857, 868 (Tex.App.Dallas 2008). "Although the elements are not clearly defined and the conduct deemed to constitute an unreasonable collection effort varies from case to case[,]" id. (citing, e.g., Pullins v. Credit Exchange of Dallas, Inc., 538 S.W.2d 681, 683 (Tex.Civ.App.-Waco 1976, no writ); Household Credit Servs., Inc. v. Driscol, 989 S.W.2d 72, 81 n. 3 (Tex.App.-El Paso 1998, writ denied)), "[o]ne of the more precise legal descriptions delineates the conduct giving rise to the tort as `efforts that amount to a course of harassment that was willful, wanton, malicious, and intended to inflict mental anguish and bodily harm.'" Id. (quoting Montgomery Ward & Co. v. Brewer, 416 S.W.2d 837, 844 (Tex.Civ.App.-Waco 1967, writ ref'd n.r.e.)).
Counter-Plaintiffs contend Vanderbilt engaged in unfair debt collection by continuing to collect on their debt even after it was discharged, and that in doing so Vanderbilt affected their credit rating. Vanderbilt made over 600 phone calls to Counter-Plaintiffs after the alleged discharge in October 2005. Flores and King's credit reports establish their credit suffered due
Vanderbilt contends summary judgment on this claim is warranted for two reasons. First, Counter-Plaintiffs' claim is reliant on their claim that Vanderbilt discharged their debt in filing the October 2005 releases of the Deed of Trust and Builder's and Mechanic's Lien, and the summary judgment evidence shows this was not the case. (D.E. 143, p. 7-10.) Second, Vanderbilt contends Counter-Plaintiffs cannot demonstrate that its actions in collecting on the alleged debt constituted a course of harassment intended to cause mental anguish and bodily harm. (D.E. 143, p. 11.)
The Court disagrees that summary judgment is warranted. As explained above, issues of fact remain as to whether Vanderbilt and CMH fully discharged Flores and King's debt. Vanderbilt is correct that, if there were no evidence of a discharge, Vanderbilt's efforts would not be likely to qualify as "unreasonable" debt collection. See Steele v. Green Tree Servicing, LLC, 2010 WL 3565415, at *6, 2010 U.S. Dist. LEXIS 92756, *19 (N.D.Tex. Sept. 7, 2010) (finding defendant's debt collection efforts in foreclosing on plaintiffs home not unreasonable because "a reasonable fact-finder could only find that the [plaintiffs] were in default and the plaintiffs presented no other evidence of unreasonable collection tactics."); Mitchell v. Chase Home Fin. LLC, 2008 U.S. Dist. LEXIS 17040, 2008 WL 623395, *6 (N.D.Tex. Mar. 4, 2008) (holding that defendants' collection efforts were not unreasonable where plaintiffs were in fact in default on their loan).
Texas courts, however, have found debt collection efforts to be tortious when lenders continued in their attempts to collect on a debt when they knew it had been discharged. For example, in Pullins v. Credit Exchange of Dallas, Inc., the jury found defendant's debt collection practices to constitute "unreasonable collection efforts" when defendant's employees continued to call plaintiff and send him "demand notices" even after the plaintiff told the collector his insurance should already have paid his debt and that his attorney was taking care of it. 538 S.W.2d 681, 682-83 (Tex.Civ.App.Waco 1976) The court stated: "[w]e think all defendant's collection efforts after the date of payment by [plaintiff's] attorney to have been unreasonable. In fact after [plaintiff] advised defendant's employee the bill had been paid, defendant did not even contact [plaintiff] to determine whether the bill was in fact paid, and at least 4 collection contacts were made by defendant after such bill was in fact paid." Id. at 683. (citing Signature Indorsement Co. v. Wilson, 392 S.W.2d 484; Moore v. Savage, 362 S.W.2d 298 (Tex.1962)).
On the other hand, when defendants' collection efforts following full payment of a debt constitute mere negligence, courts have found the evidence insufficient to support a cause for tortious debt collection. In Montgomery Ward & Co. v. Brewer, the court reversed a jury's award of damages to plaintiffs, a husband and wife who had sued a merchandizing company alleging tortious unfair debt collection, even though the company's employees had continued collection efforts after plaintiffs' account had been paid in full. 416 S.W.2d 837 (Tex.Civ.App.Waco 1967). The court found that, despite plaintiffs' multiple letters informing the company that their debt had been paid, "[t]here [was] nothing in the record to indicate that the employees in the Credit Department who handled the account of [plaintiff] knew him; they had no malice or ill will toward him; certainly had no intention of doing him any harm, and their mistakes are free from being willful, wanton and malicious, and were not intended to inflict mental anguish or bodily
In this case, Vanderbilt's employees made over 600 phone calls to Flores and their family members and King after the alleged discharge occurred. (D.E. 157, Ex. H.) They also visited Flores and King's home to request payment. (D.E. 143, p. 12.) Whether these acts could legally constitute tortious debt collection depends on whether Vanderbilt or its employees knew Flores and King's debt had been discharged and continued the collect the debt anyway with a malicious intent. Montgomery, 416 S.W.2d at 844. As explained, issues of fact remain as to whether the debt was discharged. Whether, in light of a discharge, Vanderbilt's collection efforts amounted to "a course of harassment that was willful, wanton, malicious, and intended to inflict mental anguish and bodily harm'" is also a question appropriate for review by a fact-finder. EMC Mortg. Corp., 252 S.W.3d at 868 (quoting Id.).
The Texas Debt Collection Practices Act ("TDCA") prohibits various forms of threatening, coercive, harassing or abusive conduct by debt collectors, see Tex. Fin. Code. §§ 392.301-392.306, including fraudulent, deceptive, or misleading representations (§ 392.304), such as "misrepresenting the character, extent, or amount of a consumer debt." § 392.304(8) (emphasis added). Vanderbilt qualifies as a "debt collector" under the TDCA because it is directly engaged in debt collection. § 392.001. Flores and King are "consumers" because they undertook a "consumer debt," defined as "an obligation, or an alleged obligation, primarily for personal, family, or household purposes and arising from a transaction or alleged transaction." § 392.001(2).
Vanderbilt contends summary judgment is appropriate on the Counter-Plaintiffs' TDCA claim because they have failed to show their debt was discharged, and have presented no other evidence that Vanderbilt engaged in prohibited forms of debt collection other than that Vanderbilt was never entitled to collect any debt at all. (D.E. 143, p. 11-12.) However, the TDCA explicitly provides that it is a violation of the act to misrepresent the amount of the debt owed. § 392.304(8). As explained above, there remains an issue of fact as to whether Vanderbilt and CMH discharged Counter-Plaintiffs' debt. The Counter-Plaintiffs have pointed to sufficient evidence to permit a reasonable trier of fact to find Vanderbilt discharged their debt and continued to represent it was owed. See Steele v. Green Tree Servicing, LLC, 2010 WL 3565415, *6, 2010 U.S. Dist. LEXIS 92756, * 18 (N.D.Tex. Sept. 7, 2010) (summary judgment for defendant on TDCA claim granted when the plaintiffs "pointed to no evidence that would permit a reasonable trier of fact to find that [defendants'] statement of their balance was incorrect.") As such, summary judgment on the Counter-Plaintiffs' TDCA claims is also inappropriate.
To establish common law fraud under Texas law, a plaintiff "bears the burden to prove the existence of the following: `[1] a material misrepresentation, [2] which was false, and [3] which was either known to be false when made or was asserted without knowledge of the truth, [4] which was intended to be acted upon, [5] which was relied upon, and [6] which caused injury.'" Johnson & Johnson
The Counter-Plaintiffs contend they have established all the elements of common law fraud. They contend that Vanderbilt (1) materially misrepresented to Flores and King the amount of the debt due under their Contract, (2) that Vanderbilt knew the debt had been released, (3) that Vanderbilt intended to mislead Flores and King into believing they were still liable for their debt, (4) that Flores and King relied on these representations by continuing to pay their debt, (5) and suffered damages as a consequence when they paid $25,000 to Vanderbilt after the debt had been allegedly released in October 2005. (D.E. 11, Ex. B, ¶ 9.01; D.E. 157, p. 19; Ex.)
Vanderbilt objects that Counter-Plaintiffs have not met their burden on summary judgment because they have failed to show they were not in fact liable for their debt. As such, Vanderbilt made no misrepresentation to them that their debt was due. (D.E. 143, p. 13.) However, the Court finds summary judgment is inappropriate on this claim as well. As explained above, whether the debt was discharged remains a point of contention suitable for determination by a finder of fact. Thus, it cannot be decided at this stage whether Vanderbilt misrepresented the amount of debt owed by continuing to enforce and collect upon the debt without telling Flores and King that the debt had been released. Flores and King would necessarily have relied upon Vanderbilt's representations during these collection efforts in continuing to make payments on the debt because, Vanderbilt conceded, Flores and King had no knowledge that the releases had been filed. (D.E. 143, p. 13.) Summary judgment on the Counter-Plaintiffs' fraud claim is thus inappropriate, given that issues of fact remain as to whether they owed a debt to Vanderbilt after the released were filed in October 2005.
Counter-Plaintiffs have alleged violation of RICO, 18 U.S.C. §§ 1962(c). (D.E. 1, Ex. B, p. 7-9.)
RICO provides an exhaustive definition of "racketeering activity," listing numerous activities that constitute "predicate acts" that will support liability of a defendant under RICO. 18 U.S.C. § 1961(1) ("`racketeering activity' means . . . ."); Johnson v. Hoffa, 196 Fed.Appx. 88, 90 n. 3 (3d Cir. 2006) ("18 U.S.C. § 1961(1) catalogues an exhaustive list of `racketeering activities' RICO encompasses.") Counter-Plaintiffs allege multiple violations in support of their RICO "racketeering activity" allegations, including: 18 U.S.C. § 1028 (fraudulent identification documents), 1341 (mail fraud), 1343 (wire fraud), 1344 (bank fraud), 1956 (money laundering), and securities fraud. (D.E. 1, Ex. B, p. 7-8.) As explained in this Court's August 25, 2010 Order on the Intervention-Defendants' Motions to Dismiss nearly identical claims made by the Intervenors, (D.E. 148, D.E. 149), the only predicate acts that are supported by the allegations in the complaint are mail and wire fraud as well as money laundering.
To state a claim for mail or wire fraud to support a RICO violation under § 1341 or § 1343, a plaintiff must establish three elements: "(1) a scheme or artifice to defraud or to obtain money or property by means of false pretenses, representations, or promises; (2) a use of the interstate mails or wires for the purpose of executing the scheme; and (3) a specific intent to defraud either by revising, participating in, or abetting the scheme." Hewlett-Packard Co. v. Byd:Sign, Inc., 2007 WL 275476, at *3 (E.D.Tex. Jan. 25, 2007). The Counter-Plaintiffs allege that Vanderbilt, CMH Homes and their employees used the interstate mail or wires in the course of filing the allegedly forged and falsely notarized BML and DOT with the County, and in the course of secretly filing releases of these documents, which allegedly discharged their debt under the Retail Installment Contract. (D.E. 1, Ex. B, p. 7-8.) They contend this constituted a scheme to defraud or obtain money from them because it enabled Vanderbilt to discharge their obligation in order to conceal employee misconduct in execution of the Contract, and yet still collect on a debt that was not legally owed, thus appeasing investors who had purchased the debt created by the Contract. (D.E. 157, p. 21-22, 13-14.) Vanderbilt responds that this theory is flawed because at all times Flores and King were legally obligated to make payments on the Contract, and because there is insufficient evidence of specific intent to defraud. (D.E. 143, p. 17; D.E. 173, p. 13.)
The outcome of these disputes depends on various issues of fact—specifically on whether the documents filed with the County were forged and fraudulent; on whether the debt was or was not released; and on whether the various individuals involved in releasing the debt, such as Vanderbilt's president Peter Nichols, intended that the releases would result in profits to Vanderbilt under the Counter-Plaintiff's
To establish the substantive offense of money laundering under 18 U.S.C. § 1956(a)(1)(A)(i), it must be shown that the defendant "(1) knowingly conducted a financial transaction; (2) which involved the proceeds of an unlawful activity; and (3) with the intent to promote or further unlawful activity." U.S. v. Dovalina, 262 F.3d 472, 475 (5th Cir.2001). "To satisfy the promotion element of a money laundering conviction, [plaintiff] must show that a defendant conducted the financial transaction in question with the specific intent of promoting the specified unlawful activity. Payment to co-conspirators for their participation in the conspiracy for the purpose of continuing the unlawful activity amounts to `promoting the carrying on of the unlawful activity.'" U.S. v. Lozano, 158 Fed.Appx. 632, 639 (5th Cir. 2005) (citing U.S. v. Valuck, 286 F.3d 221, 226 (5th Cir.2002); U.S. v. Wilson, 249 F.3d 366, 378 (5th Cir.2001)) (emphasis added). The term "specified unlawful activity" includes all offenses listed in Section 1961(1), including mail and wire fraud. 18 U.S.C. § 1956(c)(7)(A).
Vanderbilt contends that Counter-Plaintiffs' money laundering claim under 18 U.S.C. § 1956 fails because the evidence does not support that Vanderbilt illegally obtained proceeds or used any funds to promote fraudulent activity with specific intent. (D.E. 173, p. 14.) The Court finds, however, that the evidence is sufficient to preclude summary judgment on the issue of whether Vanderbilt engaged in money laundering as a RICO predicate. The Counter-Plaintiffs allege that Vanderbilt and its associates, CMH Homes, Clayton Homes, Inc., and Kevin Clayton, engaged in money laundering by generating funds based on the illegal conduct described above—namely, filing forged and fraudulent documents and secret releases with intent to defraud Counter-Plaintiffs—and by "paying many of the co-conspirators huge bonuses" with proceeds from these funds in order to further their profit-generating activities. (D.E. 1, Ex. B, p. 8; D.E. 157 p. 22). Vanderbilt indisputably makes profits in the course of its financing business. (DE 156, Ex. A, (Clayton Homes' 10-K Report)). As said above, issues of fact remain as to whether Vanderbilt's profits were obtained as a consequence of a violation of § 1341 (mail fraud) or § 1343 (wire fraud). Issues of fact also remain as to whether Vanderbilt paid its employees bonuses in order to promote these allegedly illegal activities.
Vanderbilt contends Counter-Plaintiffs lack standing to sue under RICO because they have not suffered out-of-pocket expenses proximately caused by Vanderbilt's alleged RICO violations. (D.E. 143, p. 13-14, 16-17.) However, Counter-Plaintiffs do contend they have suffered out-of-pocket expenses as a result of Vanderbilt's alleged RICO violations. They have paid $25,757.97 in payments on their home after the alleged release of
"For purposes of § 1962(c) . . . the plaintiff must demonstrate not only that the enterprise is distinct from the series of predicate acts constituting racketeering activity, but also that the RICO `person' who commits the predicate acts is distinct from the enterprise. It is not enough to establish that a defendant corporation through its agents committed the predicate acts in the conduct of its own business." Whelan v. Winchester Production Co., 319 F.3d 225, 229 (5th Cir.2003) (internal citations omitted); see also Abraham v. Singh, 480 F.3d 351, 357 (5th Cir. 2007). "Although a defendant may not be both a [RICO] person and an enterprise, a defendant may be both a person and a part of an enterprise. In such a case, the individual defendant is distinct from the organizational entity." St. Paul Mercury Ins. Co. v. Williamson, 224 F.3d 425, 447 (5th Cir.2000).
For example, in Abraham, the Fifth Circuit found that allegations identifying a company president as the RICO person distinct from the RICO enterprise, his company, were sufficient for purposes of Section 1962(c). 480 F.3d at 357. The Court explained: "[i]n this case, plaintiffs have identified Chandler [the company president] as the RICO person and Falcon Steel [the corporation] as the RICO enterprise. This allegation is sufficient to demonstrate that the RICO person, an individual employee of the corporation, is distinct from the RICO enterprise, the corporation itself." Id.
In this case, Counter-Plaintiffs contend Vanderbilt constitutes an "enterprise" for purposes of 18 U.S.C. § 1961(4). In the alternative, Counter-Plaintiffs contend that Vanderbilt formed an "association in fact" with its own employees and with other entities—namely, CMH Homes, Clayton Homes, Inc., and Kevin T. Clayton—and that this association constitutes an "enterprise" under Section 1962(c). (D.E. 1, Ex. B, p. 7.) Vanderbilt argues that Counter-Plaintiffs have failed to distinguish the RICO enterprise from Vanderbilt, the sole counterclaim defendant, and that there can be no "association in fact" between officers or employees of a corporation that forms an enterprise distinct from the corporation. (D.E. 143, p. 15.) The Court disagrees.
It does not matter that Counter-Plaintiffs name only Vanderbilt as a defendant, so long as they have sufficiently demonstrated that a RICO "enterprise" or "association in fact" enterprise exists. See In re MasterCard Int'l Inc., 132 F.Supp.2d 468, 491 (E.D.La.2001) (holding that plaintiffs sufficiently alleged a RICO enterprise when plaintiffs named as defendants two banks, while describing the enterprise as
To summarize, the Court finds the evidence on record is sufficient to preclude summary judgment on the Counter-Plaintiff's claims under RICO, 18 U.S.C.1962(c), based on the predicate acts of mail and wire fraud and money laundering.
The Counter-Plaintiffs seek mental anguish damages based on the distress Flores and King allegedly suffered when they were "continuously harassed" in the course of Vanderbilt's debt collection efforts, including over 600 collection calls to them after their debt had allegedly been paid in full. (D.E. 1, Ex. B, p. 4-5.) Vanderbilt objects that Flores and King have presented no evidence to support their allegation of mental anguish and that, as such, their claim for mental anguish damages fail as a matter of law. (D.E. 143, p. 19-22.) Alternatively, Vanderbilt seeks an order pursuant to Fed.R.Civ.P. 56(d)(1) that mental anguish damages are "not genuinely at issue," given the facts on record. (D.E. 145, p. 20, n. 9.) See Fed.R.Civ.P. 56(d)(1).
Mental anguish "is more than mere disappointment, anger, resentment, or embarrassment." Thornton v. State Farm Lloyds, 2005 U.S. Dist. LEXIS 6542, *18-19 (S.D.Tex. Mar. 18, 2005) (Parkway Co. v. Woodruff, 901 S.W.2d 434, 444, 38 Tex. Sup.Ct. J.828 (Tex.1995)). As a general matter, "damages for mental anguish must be supported by either `direct evidence of the nature, duration, and severity of [plaintiffs'] anguish, thus establishing a substantial disruption in the plaintiffs' daily routine,' or other evidence of `a high degree of mental pain and distress that is more than mere worry, anxiety, vexation, embarrassment, or anger.'" Dinn v. Hooking Bull Boatyard, Inc., 2009 WL 2161676, *8, 2009 U.S. Dist. LEXIS 60702, 25-26 (S.D.Tex. July 16, 2009) (citing Burlington Coat Factory Warehouse of El Paso, Inc. v. Flores, 951 S.W.2d 542, 548 (Tex.App.-El Paso 1997, no writ) (quoting Parkway Co. v. Woodruff, 901 S.W.2d 434, 444 (Tex.1995))).
In addition, Texas courts have recognized a more lenient standard of proof may apply to claims for mental anguish in unfair debt collection cases. See Campbell v. Beneficial Finance Co., 616 S.W.2d 373, 375 (Tex.Civ.App.Texarkana 1981). One court stated that unfair debt collection cases constitute a special class of tort that "expressly give a right of action for oppression, harassment or abuse resulting from certain prohibited practices," and that the injury may often be "essentially mental and subjective" or involve "an unpermitted and intentional invasion of a personal right." Ledisco Financial Services, Inc. v. Viracola, 533 S.W.2d 951, 957 (Tex.Civ.App.1976, no pet.)
Given that issues of fact remain as to the unreasonableness of Vanderbilt's efforts to collect on their debt, the Court cannot rule on the credibility of Flores and King's statements regarding their resulting mental anguish on summary judgment. "Juries are to decide `the credibility of the witnesses and the weight to give their testimony[.]'" In the Interest of M.J., 2010 WL 3042438, *3, 2010 Tex.App. LEXIS 6272, 7-8 (Tex.App. Beaumont Aug. 5, 2010) (quoting City of Keller v. Wilson, 168 S.W.3d 802, 819 (Tex.2005)).
For the reasons stated herein, Defendants/Counter-Plaintiffs' Motion for Partial Summary Judgment (D.E. 125) is DENIED. Plaintiff/Counter-Defendant Vanderbilt's Motion for Summary Judgment (D.E. 143) is also DENIED.
107 Tex. at 631.