Tafacory v. Deutsche Bank ( 2021 )

Case: 21-40289 Document: 00516136259 Page: 1 Date Filed: 12/17/2021
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
December 17, 2021
No. 21-40289
Lyle W. Cayce
Summary Calendar
Clerk
Masoud Michael Tafacory,
Plaintiff—Appellant,
versus
Deutsche Bank National Trust Company, as Trustee, in
Trust for Registered Holders of Long Beach Mortgage
Loan Trust 2006-6, Asset-backed Certificates, Series
2006-6,
Defendant—Appellee.
Appeal from the United States District Court
for the Eastern District of Texas
USDC No. 4:19-CV-886
Before Higginbotham, Higginson, and Duncan, Circuit Judges.
Per Curiam:*
The Texas Constitution provides that a home equity loan may not
exceed eighty percent of the home’s fair market value on the date the loan is
*
Pursuant to 5th Circuit Rule 47.5, the court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5th Circuit Rule 47.5.4.
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No. 21-40289
made. TEX. CONST. art. XVI, § 50(a)(6)(B). If a lender violates this
provision, it forfeits the loan’s principal and interest. Id. § 50(a)(6)(Q)(x).
However, a lender may conclusively rely on a homeowner’s written
acknowledgement of a property’s fair market value when the acknowledged
value matches the property’s appraised value, unless the lender has actual
knowledge that this value is incorrect. Id. § 50(h).
On May 25, 2006, Masoud Michael Tafacory executed a $584,000
home equity loan with Long Beach Mortgage Company. That same day,
Tafacory signed a fair market value acknowledgement stating that his home
had a value of $730,000, which was consistent with both the home’s
appraised value and the Texas Constitution’s requirement that a home equity
loan not exceed eighty percent of a home’s value. Tafacory subsequently
defaulted on the loan.
Deutsche Bank (the “Bank”) was assigned Tafacory’s loan in
December 2017. In October 2019, the Bank informed Tafacory that it had
decided to accelerate the maturity of the debt and to foreclose on the
property. Tafacory responded by filing suit against the Bank in Texas state
court. The Bank removed the case to federal court, filed a counterclaim for
an order authorizing foreclosure, and moved for summary judgment, arguing
that the court should dismiss Tafacory’s claims and enter judgment on its
counterclaim. Tafacory filed a response to the motion. As the district court
explained in its ruling on the motion, the “parties concur that the case turns
on . . . whether the principal of the home equity loan at issue exceeded eighty
percent of the fair market value of [Tafacory’s home], in violation of the
Texas Constitution.”
Tafacory attached to his response an affidavit stating that a fire had
occurred at his home on May 19, 2006, after the home had been appraised
but before the loan had closed, that as a result of this fire his home’s fair
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No. 21-40289
market value had been lower than its appraised value on the date that the loan
had closed, and that Long Beach had known about the fire before the loan had
closed. Tafacory further explained that he subsequently signed the fair
market value acknowledgement stating that his home had a value of $730,000
only because Long Beach representatives had insisted that he sign the closing
documents without reading them.
The district court struck Tafacory’s affidavit under the sham affidavit
doctrine, explaining that Tafacory’s statement that his home had a fair
market value of less than $730,000 “impeach[es] his own sworn, written
statements in 2006.” The court also struck an appraiser’s affidavit that
Tafacory submitted because it relied entirely on the representations that
Tafacory made in his affidavit. The court then granted Deutsche Bank’s
motion for summary judgment in its entirety and dismissed Tafacory’s
claims.
On appeal, Tafacory argues that the district court erred in
disregarding the affidavits of Tafacory and the appraiser. We review a district
court’s decision to strike an affidavit under the sham affidavit doctrine for
abuse of discretion. Winzer v. Kaufman Cty., 916 F.3d 464, 472 (5th Cir.
2019). “Under the sham affidavit doctrine, a district court may refuse to
consider statements made in an affidavit that are ‘so markedly inconsistent’
with a prior statement as to ‘constitute an obvious sham.’” Id. (citation
omitted). Because Tafacory’s statement in his affidavit that his home had a
fair market value of less than $730,000 in 2006 directly contradicts his 2006
fair market value acknowledgement (which he signed post-fire) stating that
his home was worth $730,000, the district court did not abuse its discretion
by striking Tafacory’s affidavit. The district court also did not err by
disregarding the appraiser’s affidavit on the grounds that it relied entirely on
Tafacory’s stricken affidavit. See Jones v. Gulf Coast Rest. Grp., Inc., 8 F.4th
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363, 368 (5th Cir. 2021) (explaining that a summary judgment motion cannot
be defeated through “unsubstantiated assertions” (citation omitted)).
Tafacory does not challenge the district court’s judgment on any other
grounds. Accordingly, the district court’s order granting summary judgment
for Deutsche Bank and dismissing Tafacory’s claims is AFFIRMED.
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