Sheryl Buchanan v. Compass Bank ( 2015 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-14-00034-CV
SHERYL BUCHANAN APPELLANT
V.
COMPASS BANK APPELLEE
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FROM THE 352ND DISTRICT COURT OF TARRANT COUNTY
TRIAL COURT NO. 352-239854-09
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MEMORANDUM OPINION 1
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Appellant Sheryl Buchanan appeals the trial court’s grant of summary
judgment on her claims regarding appellee Compass Bank’s foreclosure on
property located at 4674 Slippery Rock Drive, Fort Worth, Texas. We affirm.
1
See Tex. R. App. P. 47.4.
Background Facts
On November 29, 2006, Buchanan executed two notes in favor of
Compass to purchase the property, secured by a deed of trust. In 2008,
Buchanan began discussions with Compass regarding a loan modification or
other mortgage assistance. Buchanan eventually defaulted, and Compass
accelerated payment of the notes. Buchanan filed this lawsuit in August 2009.
On September 1, 2009, Compass purchased the property at a foreclosure sale.
The same day, but after the foreclosure sale, the trial court granted a temporary
restraining order.
In September 2009, Buchanan and Compass entered into a Rule 11
agreement in which Compass agreed not to file the foreclosure for thirty days so
that Buchanan could again attempt a loan modification. Buchanan claims that
she repeatedly submitted her financial information but that Compass provided
her with wrong fax numbers and did not return her phone calls. After the thirty-
day period, Compass filed the substitute trustee’s deed. In August 2010,
Compass began eviction proceedings against Buchanan.
The protracted legal battle continued through October 2012, when
Compass filed a no-evidence motion for summary judgment on all of Buchanan’s
claims. 2 The trial court granted the motion, and Buchanan appealed.
2
Buchanan sued for breach of contract and anticipatory breach of contract;
violations of the Equal Credit Opportunity Act, the Texas Debt Collection
Practices Act, and the Fair Housing Act; violations of “Texas Insurance Law”;
unreasonable collection efforts; negligence, negligent misrepresentation, and
2
Standard of Review
After an adequate time for discovery, the party without the burden of proof
may, without presenting evidence, move for summary judgment on the ground
that there is no evidence to support an essential element of the nonmovant’s
claim or defense. Tex. R. Civ. P. 166a(i). The motion must specifically state the
elements for which there is no evidence. Id.; Timpte Indus., Inc. v. Gish, 286
S.W.3d 306, 310 (Tex. 2009). The trial court must grant the motion unless the
nonmovant produces summary judgment evidence that raises a genuine issue of
material fact. See Tex. R. Civ. P. 166a(i) & cmt.; Hamilton v. Wilson, 249 S.W.3d
425, 426 (Tex. 2008).
When reviewing a no-evidence summary judgment, we examine the entire
record in the light most favorable to the nonmovant, indulging every reasonable
inference and resolving any doubts against the motion. Sudan v. Sudan, 199
S.W.3d 291, 292 (Tex. 2006). We review a no-evidence summary judgment for
evidence that would enable reasonable and fair-minded jurors to differ in their
conclusions. Hamilton, 249 S.W.3d at 426 (citing City of Keller v. Wilson, 168
S.W.3d 802, 822 (Tex. 2005)). We credit evidence favorable to the nonmovant if
gross negligence; wrongful foreclosure and wrongful eviction; and invasion of
privacy. Buchanan sought an accounting of all transactions on her mortgage
loans and a declaratory judgment that Compass violated the terms of the deed of
trust and the notes. She also sued to quiet title and for trespass to try title.
Compass countersued for breach of contract of the notes and the Rule 11
agreement, unjust enrichment, and trespass. It later nonsuited all of its claims
against Buchanan.
3
reasonable jurors could, and we disregard evidence contrary to the nonmovant
unless reasonable jurors could not. Timpte Indus., 286 S.W.3d at 310 (quoting
Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006)). If the
nonmovant brings forward more than a scintilla of probative evidence that raises
a genuine issue of material fact, then a no-evidence summary judgment is not
proper. Smith v. O’Donnell, 288 S.W.3d 417, 424 (Tex. 2009); King Ranch, Inc.
v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003), cert. denied, 541 U.S. 1030
(2004).
Discussion
Buchanan argues there are genuine issues of material fact that preclude
summary judgment on seven of her causes of action against Compass.
I. Breach of contract
In her first issue, Buchanan argues that Compass breached both the Rule
11 agreement and the deed of trust.
A. Rule 11 agreement
The Rule 11 agreement, as stated by Compass in the trial court and
agreed to by the parties on September 14, 2009, was as follows:
The bank agrees that [it] will give Ms. Buchanan 30 days from
today’s date to provide the . . . information necessary to consider a
loan modification.
. . . In exchange for that[,] the bank will agree not to file the
foreclosure [or] substitute trustee’s deed, nor take any action to evict
Ms. Buchanan from her home[,] and will preserve the status quo
during the 30-day time period.
4
At the end of the 30-day time period[,] the parties will have
decided whether or not a loan modification can be entered into.
. . . If for some reason the parties are not able to enter into a
modification—and no guarantee of modification is made at this point
in time—. . . the bank would then move forward in filing its deed and
take the other actions it’s entitled to under the deed of trust by law.
Buchanan argues, “Compass breached the [Rule 11] agreement by not
specifying to Ms. Buchanan where to send the documents after telling her that
the first fax number was incorrect. Compass breached the Rule 11 agreement
by not considering Ms. Buchanan for a loan modification as promised.”
Buchanan testified that she faxed her information to a number on a
business card that Compass gave to her at the hearing. She testified that a
Compass representative confirmed receipt of some of the information but not all.
Buchanan’s evidence includes a letter she received from Compass dated
October 20, 2009, stating that it reviewed her information and that it was “unable
to arrive at a solution to restructure [her] debt.” Buchanan’s evidence fails to
raise a fact issue regarding whether Compass received her information or
whether it considered her for a loan modification. Instead, the evidence shows
that Compass reviewed her information and denied her request for a
modification.
Buchanan has also not raised a fact issue regarding how any breach of the
Rule 11 agreement by Compass caused her complained-of injuries. See
Prudential Sec., Inc. v. Haugland, 973 S.W.2d 394, 397 (Tex. App.—El Paso
1998, pet. denied) (“The absence of this causal connection between the alleged
5
breach and the alleged damages will preclude recovery.”). There is no evidence
that the denial of her modification request was because Compass did not receive
her information or because it refused to consider any information it had received.
In other words, there is no evidence that Compass would have granted her a
loan modification that would have been acceptable to Buchanan and that would
have prevented her eviction but for the lack of the documents that Buchanan
alleges. 3 We therefore overrule this portion of Buchanan’s first issue.
B. Deed of trust
Buchanan argues that Compass breached the deed of trust because the
delinquency and acceleration notices it sent did not conform to the property code.
Section 51.002(d) of the property code requires that the mortgage servicer must
serve a debtor “with written notice by certified mail stating that the debtor is in
default under the deed of trust or other contract lien and giving the debtor at least
20 days to cure the default before notice of sale can be given.” Tex. Prop. Code
Ann. § 51.002(d) (West 2014). Buchanan claims that the property code requires
that the notices state the exact amount of the delinquency, and because
Compass’s notices did not contain the exact amount, the twenty-day period to
cure was not triggered.
We find no such language in the statute that requires notices to include the
exact amount owed. See Rhodes v. Wells Fargo Bank, N.A., No. 3:10-CV-
3
Buchanan’s deposition testimony was that she was offered a loan
modification in April 2011, and she did not accept it.
6
02347-L, 2012 WL 5363424, at *19 (N.D. Tex. Oct. 31, 2012) (“With regard to
Plaintiffs’ argument that Wells Fargo’s June 2010 notice was defective because it
did not state the amount needed to cure the default, section 51.002 contains no
such requirement, and Plaintiffs have not pointed the court to any authority that
Texas courts have construed section 51.002 to include such a requirement.”),
vacated in part, 3:10-CV-02347-L, 2013 WL 2090307 (N.D. Tex. May 14, 2013);
Rabe v. Wells Fargo Bank, N.A., No. 4:11-CV-787, 2013 WL 5458068, at *7
(E.D. Tex. Sept. 30, 2013) (“There is no applicable statute or regulation that
requires a notice of acceleration to state the amount necessary to cure a
default.”). Buchanan admits to receiving the notices, does not argue they are
otherwise defective, and acknowledged that she never offered to pay the full
amount due. 4 Buchanan has therefore failed to raise a fact issue regarding
whether Compass breached the terms of the deed of trust. We overrule the
remainder of Buchanan’s first issue.
II. Violations of the Texas Debt Collection Act
In her second issue, Buchanan argues that Compass violated sections
392.301(a)(8), 392.303(a)(2), 392.304(a)(8), and 392.304(a)(19) of the Texas
Debt Collection Act (the TDCA). See Tex. Fin. Code Ann. §§ 392.301(a)(8),
.303(a)(2), .304(a)(8), (19) (West 2006).
4
She testified that she had offered to pay “a little over half of what was
delinquent.”
7
Section 392.301(a)(8) prohibits a debt collector from “threatening to take
an action prohibited by law.” Id. § 392.301(a)(8). Buchanan’s argument under
this section rests solely on her claims that Compass breached the Rule 11
agreement and the deed of trust for the same reasons she argued in her first
issue. Because we held that Buchanan did not raise a fact issue that Compass
breached those contracts, we hold that she did not raise a fact issue that
Compass breached this section of the TDCA. We overrule this portion of her
second issue.
Section 392.303(a)(2) prohibits a debt collector from “collecting or
attempting to collect interest or a charge, fee, or expense incidental to the
obligation unless the interest or incidental charge, fee, or expense is expressly
authorized by the agreement creating the obligation or legally chargeable to the
consumer.” Id. § 392.303(a)(2). Buchanan argues that Compass imposed
unauthorized charges, including “Late Charges, Property Inspections, Appraisals,
and Current Attorney Fees.” However, the deed of trust, which Buchanan
attached to her response to Compass’s motion for summary judgment, shows
that Buchanan agreed to pay late charges, “fees for services performed in
connection with Borrower’s default, for the purpose of protecting Lender’s interest
in the Property and rights under this Security Instrument, including, but not
limited to, attorney’s fees, property inspection[,] and valuation fees,” and “all
expenses incurred in pursuing the remedies provided . . . including, but not
limited to, reasonable attorney’s fees and cost of title evidence.” Buchanan does
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not explain how any of the complained-of charged fees (none of which she
specifically identifies) fall outside the obligations that she expressly authorized in
the deed of trust. We therefore overrule this portion of her second issue.
Section 392.304(a)(8) prohibits a debt collector from “misrepresenting the
character, extent, or amount of a consumer debt, or misrepresenting the
consumer debt’s status in a judicial or governmental proceeding.” Id.
§ 392.304(a)(8). Buchanan argues that Compass misrepresented the extent of
her debt “because Compass failed to allow Ms. Buchanan to pay the arrearage
after acceleration and since it failed to give Ms. Buchanan 10 days[’] notice to
identify and cure the delinquency as required by the Deed of Trust.” As we noted
above, there is no evidence that Buchanan ever offered to pay the arrerage. She
testified that she had offered to pay “a little over half of what was delinquent” and
that she had never offered to pay off the full amount of the debt. Buchanan does
not explain how the alleged lack of notice to identify and cure the delinquency
misrepresented the character, extent, or amount of her debt. But even if she had
explained, the two notices that she received and attached to her response both
gave her more than twenty days’ notice of the foreclosure sale. 5 To the extent
that Buchanan’s argument that Compass did not provide her adequate notice is
5
The notices of acceleration, which Buchanan attached to her response to
Compass’s motion, were dated June 15, 2009, and August 10, 2009. The June
15, 2009 letter states that the foreclosure sale was scheduled for July 7, 2009,
twenty-two days after the letter was sent. The August 10, 2009 notice states that
the foreclosure sale would occur on September 1, 2009, also twenty-two days
after the letter was sent.
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based on her claim that Compass was required to state the exact amount due in
its notices of acceleration, we have overruled that argument.
Section 392.304(a)(19) prohibits a debt collector from “using . . . false
representation or deceptive means to collect a debt or obtain information
concerning a consumer.” Id. § 392.304(a)(19). Buchanan argues that Compass
“misrepresented to her that she qualified for a loan modification and that her
monthly payment would be $1,600 with a lower interest rate.”
Buchanan’s evidence of this alleged misrepresentation is her deposition
testimony that David Johnson from Compass Bank told her over the phone that
the bank would be able to modify the terms of her loan. Johnson told her that her
monthly payment would be $1,600 a month, but she was unable to recall any of
the other terms of the agreement or whether she had even been informed of the
other terms. Buchanan also acknowledged that she understood that the
agreement must be in writing and that she had never received any documents
from Compass evincing an agreement with the terms of her loan modification.
The only written notes regarding an agreement are some phone log notes from
Compass showing that Buchanan told the Compass representative that she “can
send $1,600.00 by the 1st of every month” and that “she is working with David
Johnson at the Branch and they already have something settled and it should be
finished by April 1st.” Nothing in the phone log notes shows that Compass had
agreed to the modification terms or had sent Buchanan a written agreement.
10
These representations by Compass related to Buchanan’s loan
modification, not an attempt to collect a debt. See Singha v. BAC Home Loans
Servicing, LP, No. 4:10-CV-692, 2011 WL 7678684, at *7–8 (E.D. Tex. June 1,
2011) (holding that representations relating to loan modifications do not
constitute an attempt to collect a debt). Further, all of the representations were
oral and barred by the statute of frauds. 6 See Tex. Bus. & Comm. Code Ann.
§ 26.02(b) (West 2009) (“A loan agreement in which the amount involved in the
loan agreement exceeds $50,000 in value is not enforceable unless the
agreement is in writing and signed by the party to be bound or by that party’s
authorized representative.”); Foster v. Mut. Sav. Ass’n, 602 S.W.2d 98, 100 (Tex.
Civ. App.—Fort Worth 1980, no writ) (holding that modifications to the amount of
monthly payments and interest rate were material modifications of the loan
agreement and fell within statute of frauds). We therefore overrule the remainder
of Buchanan’s second issue.
6
In her reply brief, Buchanan argues that the “statute of frauds has no
bearing on claims under the TDCA,” Knigge v. Bank of Am. Corp., No. 4:11-CV-
295, 2012 WL 629093, at *4 (E.D. Tex. Feb. 27, 2012) report and
recommendation adopted, 2012 WL 1108337 (E.D. Tex. Mar. 30, 2012) (slip
copy). Knigge appears to be in the minority of cases addressing the applicability
of the statute of frauds to the TDCA. See Kruse v. Bank of New York Mellon,
936 F. Supp. 2d 790, 793 (N.D. Tex. 2013) (noting that only three cases had
addressed the issue, two of which held that the statute of frauds applied). We
have found no cases following Knigge, and it is not controlling here.
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III. Negligent misrepresentation
In her third issue, Buchanan argues that the trial court erred in dismissing
her negligent misrepresentation claim because she “presented evidence that
Compass represented, through the Rule 11 Agreement[,] that it was going to
consider Ms. Buchanan for a loan modification” and because “Compass
represented that it did not receive the information to review Ms. Buchanan for the
loan modification.” Both these negligent misrepresentation claims are premised
wholly on the same grounds as her breach of contract claims. Because we have
already held that there is no evidence to support these claims, we also overrule
this issue.
IV. Invasion of privacy
In her fourth issue, Buchanan argues that the trial court erred by granting
summary judgment on her invasion of privacy claim because “Compass
intentionally intruded into Ms. Buchanan’s home, examining and taking pictures
of her personal property, and then removed her property and placed it near the
street.”
Texas courts have found some acts undertaken during an eviction may
support an invasion of privacy cause of action, but only when the intrusion was
“unreasonable, unjustified, or unwarranted.” Household Credit Servs., Inc. v.
Driscol, 989 S.W.2d 72, 84 (Tex. App.—El Paso 1998, pet. denied) (holding that
phone calls were intrusive when they were made repeatedly, prior to normal
waking hours, after normal retiring hours, and to the debtor’s place of work).
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Buchanan argues that Compass “had no authority and no permission to be on
the property,” presumably because she challenges the legality of the foreclosure.
However, as we explained above and will further explain below, Compass acted
within its contractual rights when it foreclosed on Buchanan’s property,
purchased the property at the foreclosure sale, and evicted Buchanan.
Removing Buchanan’s personal property from the house was therefore not
unreasonable, unjustified, or unwarranted so as to support a claim for invasion of
privacy. We therefore overrule Buchanan’s fourth issue.
V. Wrongful foreclosure
In her fifth issue, Buchanan argues that the trial court erred by granting
summary judgment on her wrongful foreclosure claim. The elements of a
wrongful-foreclosure claim are: (1) a defect in the foreclosure sale proceedings;
(2) a grossly inadequate selling price; and (3) a causal connection between the
defect and the grossly inadequate selling price. Sauceda v. GMAC Mortg. Corp.,
268 S.W.3d 135, 139 (Tex. App.—Corpus Christi 2008, no pet.). Buchanan
argues that the alleged defects in the foreclosure were that “Compass breached
the Deed of Trust contract by failing to give Ms. Buchanan the required 10 days[’]
notice to identify and cure the delinquency as required by the Deed of Trust due
to the fact that Compass did not provide the exact amount to cure” and that
“Compass breached the Rule 11 Agreement by not reviewing her for a loan
modification and instead told her they did not receive her documents.” We have
already overruled these arguments, and we overrule them here. Because
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Buchanan has failed to support the defect element of her wrongful foreclosure
claim, we need not address her argument that the selling price was grossly
inadequate. See Tex. R. App. P. 47.1; Tex. R. Civ. P. 166a(i).
VI. Negligence and gross negligence
In her sixth issue, Buchanan argues that the trial court erred by granting
summary judgment on her negligence and gross negligence claims. The
elements of a negligence claim are: (a) a legal duty owed by one person to
another; (b) a breach of that duty; and (c) damages proximately resulting from
the breach. See Werner v. Colwell, 909 S.W.2d 866, 869 (Tex. 1995). To show
gross negligence, a litigant must show that:
(1) viewed objectively from the actor’s standpoint, the act or
omission complained of must involve an extreme degree of risk,
considering the probability and magnitude of the potential harm to
others; and (2) the actor must have actual, subjective awareness of
the risk involved, but nevertheless proceed in conscious indifference
to the rights, safety, or welfare of others.
Coastal Transp. Co. v. Crown Cent. Petroleum Corp., 136 S.W.3d 227, 231 (Tex.
2004). To establish malice, a claimant must show that a party acted with “a
specific intent . . . to cause substantial injury or harm to the claimant.” Tex. Civ.
Prac. & Rem. Code Ann. § 41.001(7) (West 2008).
Buchanan’s argument on this issue consists of two sentences. She states,
“Compass intentionally intruded into Ms. Buchanan’s home and Compass
carelessly and recklessly removed and placed Ms. Buchanan’s personalty near
the street causing substantial damage to her personalty in the process.” The
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only evidence to which she points are photographs of personal property in the
house and on the driveway. Buchanan does not identify what duty Compass
owed to Buchanan. Presumably, these claims rest on the same underlying
complaint as the rest of her causes of actions: that Compass acted wrongfully in
the foreclosure and eviction proceedings. As we have held that Buchanan has
not identified a wrongful act by Compass, we likewise cannot hold that Compass
breached a duty owed to Buchanan so as to support her negligence claims. We
overrule Buchanan’s sixth issue.
VII. Suit to quiet title and trespass to try title
In her seventh issue, Buchanan argues that the trial court erred by granting
summary judgment on her suit to quiet title and her trespass to try title claims.
Buchanan argues that the foreclosure sale was void and she therefore has
superior title to the property. We have already overruled Buchanan’s arguments
that Compass did not have the right to foreclosure and that there were defects in
the foreclosure sale. Because this issue rests entirely on those arguments, we
overrule it.
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Conclusion
Having overruled Buchanan’s seven issues on appeal, we affirm the trial
court’s judgment.
/s/ Lee Gabriel
LEE GABRIEL
JUSTICE
PANEL: LIVINGSTON, C.J.; WALKER and GABRIEL, JJ.
DELIVERED: January 15, 2015
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