Adrian Verdin v. Federal Natl Mortgage Assoc, et a ( 2013 )


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  •      Case: 12-40895         Document: 00512343097          Page: 1    Date Filed: 08/15/2013
    IN THE UNITED STATES COURT OF APPEALS
    FOR THE FIFTH CIRCUIT  United States Court of Appeals
    Fifth Circuit
    FILED
    August 15, 2013
    No. 12-40895
    Lyle W. Cayce
    Clerk
    ADRIAN VERDIN,
    Plaintiff—Appellant,
    v.
    FEDERAL NATIONAL MORTGAGE ASSOCIATION; WELLS FARGO BANK,
    N.A.,
    Defendants—Appellees.
    Appeal from the United States District Court
    for the Eastern District of Texas
    USDC No. 4:10-CV-590
    Before ELROD and HIGGINSON, Circuit Judges, and MARTINEZ, District
    Judge.*
    PER CURIAM:**
    Wells Fargo Bank, N.A. (“Wells Fargo”) foreclosed on Adrian Verdin’s
    home and sold it to the Federal National Mortgage Association (“Fannie Mae”).
    Verdin sued Wells Fargo and Fannie Mae (“Defendants”) alleging various state-
    law causes of action. The district court granted Defendants’ Rule 12(b)(6) motion
    *
    District Judge of the Western District of Texas, sitting by designation.
    **
    Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
    be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
    R. 47.5.4.
    Case: 12-40895     Document: 00512343097     Page: 2   Date Filed: 08/15/2013
    No. 12-40895
    on Verdin’s negligent-misrepresentation and gross-negligence claims and
    granted Defendants’ motion for summary judgment on Verdin’s remaining
    claims. We AFFIRM.
    I.
    Wells Fargo extended Verdin a loan for the purchase of a Plano, Texas
    residence (the “Property”). The loan was evidenced by a fixed-rate note (the
    “Note”) and secured by a deed of trust (jointly referred to as the “Loan
    Agreement”). Verdin defaulted on the Note when he did not make the required
    payments for March and April of 2010. Wells Fargo mailed Verdin notice of his
    default, but he neither cured his default nor made the May and June payments.
    Wells Fargo accelerated the Note and scheduled a foreclosure sale on August 3,
    2010. In early July, Wells Fargo informed Verdin that he could reinstate the
    Note by paying $21,371, the total amount due and owing at that time.
    On July 27, exactly one-week prior to the scheduled foreclosure sale,
    Verdin called Wells Fargo to discuss his options. Verdin alleges that during this
    conversation, he requested the amount needed to reinstate the Note and
    explained that he found a potential buyer willing to purchase the Property.
    According to Verdin, Wells Fargo responded by telling him “not to worry about
    the foreclosure” and to submit a request for postponement of the foreclosure sale.
    Wells Fargo received Verdin’s request for postponement on July 30. In it, Verdin
    requested that Wells Fargo “stop the foreclosure procedures so that [he could]
    pursue the sale of the [Property].” On August 2, Verdin called Wells Fargo to
    inquire about the status of the foreclosure sale. Wells Fargo told him that the
    sale had not been postponed.
    2
    Case: 12-40895         Document: 00512343097        Page: 3    Date Filed: 08/15/2013
    No. 12-40895
    Approximately forty minutes before the scheduled foreclosure sale on
    August 3, Verdin called Wells Fargo to ask if the foreclosure sale had been
    postponed. Wells Fargo informed Verdin that, to postpone the sale, he must
    produce proof of payoff funds totaling exactly $22,179.68, the current amount
    due and owing on the Note. Verdin did not produce the required proof of payoff
    funds, and Wells Fargo sold the Property to Fannie Mae.
    Verdin sued Defendants in Texas state court, and Defendants removed the
    case to the United States District Court for the Eastern District of Texas. The
    district court dismissed Verdin’s negligent-misrepresentation and gross-
    negligence1 claims under Federal Rule of Civil Procedure 12(b)(6). The district
    court also granted Defendants’ motion for summary judgment on Verdin’s claims
    for breach of contract, anticipatory breach of contract, unreasonable collection
    efforts, violations of the Texas Debt Collection Act (“TDCA”), quiet title, and
    trespass to try title. Verdin timely filed a notice of appeal.
    II.
    We review de novo the district court’s order granting Defendants’ Rule
    12(b)(6) motion on Verdin’s negligent-misrepresentation claim.                     Torch
    Liquidating Trust ex rel. Bridge Assocs. L.L.C. v. Stockstill, 
    561 F.3d 377
    , 384
    (5th Cir. 2009) (citation omitted). To prove a negligent-misrepresentation claim
    in Texas, Verdin must establish, inter alia, that Defendants supplied him with
    “false information” and that he suffered pecuniary loss in reliance on that
    information. Horizon Shipbuilding, Inc. v. BLyn II Holding, L.L.C., 
    324 S.W.3d 840
    , 850 (Tex. App.—Houston [14th Dist.] 2010, no pet.) (citation omitted).
    Here, Verdin failed to plead facts establishing either element.
    1
    Verdin did not pursue his gross-negligence claim on appeal.
    3
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    Under Texas law, “the misrepresentation at issue must be one of existing
    fact.” BCY Water Supply Corp. v. Residential Invs., Inc., 
    170 S.W.3d 596
    , 603
    (Tex. App.—Tyler 2005, pet. denied). “A promise to do or refrain from doing an
    act in the future is not actionable.” Id.; see also Scherer v. Angell, 
    253 S.W.3d 777
    , 781 (Tex. App.—Amarillo 2007, no pet.). Wells Fargo’s only allegedly false
    representation—that Verdin should submit a request for postponement and “not
    worry about the foreclosure”—relates to a promise to do something in the future.
    This representation is not one of existing fact and is not actionable under Texas
    law.
    Even if Defendants supplied Verdin with false information, Texas requires
    pecuniary loss independent from the loan agreement to support a
    negligent-misrepresentation claim. D.S.A., Inc. v. Hillsboro Indep. Sch. Dist.,
    
    973 S.W.2d 662
    , 663–64 (Tex. 1998) (citation omitted). Mental anguish does not
    qualify as pecuniary loss. Fed. Land Bank Ass’n of Tyler v. Sloane, 
    825 S.W.2d 439
    , 442–43 (Tex. 1991). Here, Verdin has merely alleged losses relating to the
    Loan Agreement and mental anguish. Therefore, the district court did not err
    by dismissing Verdin’s negligent-misrepresentation claim.
    III.
    The district court granted Defendant’s motion for summary judgment on
    Verdin’s remaining claims. We review a grant of summary judgment de novo,
    applying the same standard as the district court and viewing the evidence in the
    light most favorable to the nonmoving party. Amerisure Ins. Co. v. Navigators
    Ins. Co., 
    611 F.3d 299
    , 304 (5th Cir. 2010). We address each of Verdin’s
    remaining claims in turn.
    4
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    No. 12-40895
    Verdin alleges Wells Fargo breached the Loan Agreement by (1) failing to
    provide Verdin an updated amount to reinstate the Note, and (2) pursuing
    foreclosure of the Property after waiving its right to foreclose. To begin, the
    Loan Agreement does not require Wells Fargo to provide updates on the exact
    payment amount required to reinstate the Note;2 therefore, Verdin’s claim fails
    on that ground. Next, to waive its contractual right to foreclose, Wells Fargo
    must have either intended to relinquish its right or intentionally engaged in
    conduct inconsistent with that right. Ulico Cas. Co. v. Allied Pilots Ass’n, 
    262 S.W.3d 773
    , 778 (Tex. 2008). Waiver by implication only occurs when conclusive
    evidence shows the party unequivocally manifests its intention to no longer
    assert its right. G.H. Bass & Co. v. Dalsan Props.–Abilene, 
    885 S.W.2d 572
    , 577
    (Tex. App.—Dallas 1994, no writ) (“[I]t is the burden of the party who is to
    benefit by a showing of waiver to produce conclusive evidence that the opposite
    party [unequivocally] manifested its intent to no longer assert its claim. This is
    a particularly onerous burden.” (internal quotation marks and citation omitted)).
    Although Wells Fargo’s alleged statement that Verdin should not “worry about
    the foreclosure” is inconsistent with its right to foreclose, it falls short of being
    an unequivocal manifestation of Wells Fargo’s intent to forego that right.
    Verdin also alleges that Wells Fargo anticipatorily breached the Loan
    Agreement. To prevail on this claim, Verdin must prove “(1) an absolute
    repudiation of [an] obligation; (2) a lack of a just excuse for the repudiation; and
    (3) damage to the non-repudiating party.” Gonzalez v. Denning, 
    394 F.3d 388
    ,
    2
    The Loan Agreement requires Wells Fargo to provide the borrower notice “of the right
    to reinstate after acceleration” and allows the borrower to reinstate the Note “at any time prior
    to . . . five days before sale of the Property,” but does not impose any contractual obligation on
    Wells Fargo to calculate the reinstatement figure for the borrower.
    5
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    No. 12-40895
    394 (5th Cir. 2004). Here, Verdin is unable to demonstrate that Wells Fargo
    made an absolute repudiation of an obligation because providing mixed signals
    of an intent to foreclose—i.e., suggesting that it would consider a postponement
    and not to worry about a foreclosure—does not rise to an absolute declaration of
    intent to abandon an obligation. See, e.g., Narvaez v. Wilshire Credit Corp., 
    757 F. Supp. 2d 621
    , 632 (N.D. Tex. 2010) (concluding that a bank’s conflicting
    messages regarding the status of a loan “[fell] short of the positive and
    unconditional repudiation necessary to maintain a cause of action for
    anticipatory breach”).3
    Verdin next alleges Wells Fargo used unreasonable collection efforts to
    collect on its debt. Although the elements of such a claim are not clearly defined
    and may vary from case to case under Texas law, all plaintiffs must show that
    the defendant’s conduct “was willful, wanton, malicious, and intended to inflict
    mental anguish and bodily harm.” EMC Mortg. Corp. v. Jones, 
    252 S.W.3d 857
    ,
    868 (Tex. App.—Dallas 2008, no pet.) (citation omitted). Simply put, the record
    does not contain any facts that would support a finding that Wells Fargo’s
    actions constituted “a course of harassment that was willful, wanton, malicious,
    and intended to inflict mental anguish and bodily harm.” 
    Id.
    Verdin also maintains that Wells Fargo violated § 392.304(a)(19)
    § 392.304(a)(8), § 392.303(a)(2), and § 392.301(a)(8) of the TDCA. Section
    392.304(a)(19) is a catch-all provision that prohibits a debt collector from “using
    any other false representation or deceptive means to collect a debt.” Tex. Fin.
    3
    Because each of Verdin’s breach-of-contract claims fails, there is no basis to conclude
    that the foreclosure sale is void. Accordingly, Verdin is unable to establish that he has
    superior title to the Property and, therefore, his suit to quiet title and trespass-to-try-title
    actions also fail.
    6
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    No. 12-40895
    Code § 392.304(a)(19). “To violate the TDCA using a misrepresentation, ‘the
    debt collector must have made an affirmative statement that was false or
    misleading.’” Kruse v. Bank of N. Y. Mellon, — F.Supp.2d —, 
    2013 WL 1294088
    ,
    at *2 (N.D. Tex. Apr. 1, 2013) (quoting Hassell v. Bank of Am., N.A., Civ. A. H-
    12-1530, 
    2013 WL 211154
    , at *4 (S.D. Tex. Jan. 18, 2013)). Here, even assuming
    Wells Fargo told Verdin “not to worry about the foreclosure,” Verdin does not
    allege that Wells Fargo made an affirmative statement that it would forgo
    foreclosure. Accordingly, the district court did not err in concluding that Wells
    Fargo’s statement “not to worry about the foreclosure” did not constitute a
    violation of § 392.304(a)(19). Moreover, “‘[r]efusing to provide a payoff quote is
    not an affirmative misrepresentation of the amount of debt.’” Hassell, 
    2013 WL 211154
    , at *4 (quoting Nolasco v. CitiMortgage, Inc., Civ. A. No. H-12-1875, 
    2012 WL 3648414
    , at *6 (S.D. Tex. Aug. 23, 2012)). Accordingly, Verdin’s claims
    under both §§ 392.304(a)(8) and (19) fail.
    Verdin’s claim under § 392.303(a)(2) also fails because the Loan
    Agreement expressly authorizes Wells Fargo to demand fees and charges in the
    event of a default. Finally, Verdin’s claim under § 392.301(a)(8) fails because the
    Loan Agreement vested Wells Fargo’s right to accelerate and foreclose upon
    Verdin’s nonperformance. Moreover, the TDCA does not prohibit a creditor from
    “exercising or threatening to exercise a statutory or contractual right of seizure,
    repossession, or sale that does not require court proceedings.” Tex. Fin. Code
    § 392.301(b)(3).4
    IV.
    For the foregoing reasons, the district court’s orders granting Defendant’s
    motions to dismiss and for summary judgment are AFFIRMED.
    4
    Verdin’s request for an accounting and for declaratory judgment both fail because the
    district court properly disposed of his underlying substantive claims.
    7