Griffith v. Lone Star FLCA

Case: 22-10527 Document: 00516627222 Page: 1 Date Filed: 01/30/2023
United States Court of Appeals
for the Fifth Circuit
United States Court of Appeals
Fifth Circuit
No. 22-10527
Summary Calendar FILED
January 30, 2023
Lyle W. Cayce
In the Matter of Ray Douglas Griffith, Clerk
Debtor,
Ray Douglas Griffith,
Appellant,
versus
Lone Star FLCA; Crystal Matulich,
Appellees.
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 4:21-CV-825
Before Stewart, Duncan, and Wilson, Circuit Judges.
Per Curiam:*
This appeal arises from a property dispute between Ray Griffith and
Lone Star FLCA (“Lone Star”). Because Griffith waived exclusive use of the
*
This opinion is not designated for publication. See 5th Cir. R. 47.5.
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disputed property and Lone Star sent foreclosure notices to Griffith’s last
known address before the foreclosure sale, we AFFIRM.
I. Background
A. Lone Star’s Foreclosure & Sale of the Property
On December 8, 2005, Griffith borrowed $137,500 from Lone Star to
purchase a property in Eastland County, Texas. The deed of trust that he
signed provided:
Unless otherwise required by law, any notice shall be
given by delivering it or mailing it by first class mail to
the appropriate party’s address on page 1 of this
Security Instrument, or to any other address
designated in writing. Notice to one grantor will be
deemed notice to all grantors.
Griffin gave the following address in accordance with this provision: 5112
Geddes Avenue, Ft. Worth, Texas (“the Geddes address”).
Griffith remarried in 2007 and moved into a house with his new wife
at 2916 Sanguinet Street in Fort Worth, Texas (“the Sanguinet address”).
By March 2014, he had officially changed his address in Lone Star’s system
to reflect his move to the Sanguinet address. He made this request orally and
Lone Star memorialized his request via an internal memo. In a 2016 letter, he
communicated his desire to switch to online banking at Lone Star and noted
that he wanted to continue receiving loan statements by mail; he signed the
letter with the Sanguinet address.
Beginning in 2017, Griffith made “sporadic and untimely” payments
to Lone Star, with his final payment coming in November 2018. Shortly
thereafter, Lone Star labeled his account “chronic[ally] delinquent” and sent
him four notices of default and acceleration letters to the Sanguinet address.
These notices were all mailed from May 2018 through March 2019. On April
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3, 2019, Lone Star sent an additional notice of acceleration and informed
Griffith of its intent to foreclose.
Griffith ultimately separated from his wife in 2018 and moved back to
the Geddes address. In 2018, he opened a PO Box in Fort Worth, Texas (“the
PO Box”). He maintained the PO Box for business and personal affairs,
including some correspondence with Lone Star. Following Lone Star’s note
of foreclosure, he sent a text message to Lone Star, explaining that he is no
longer receiving mail at the Sanguinet address. On the same day of his text
exchange with Lone Star, he spoke to one of its representatives and
“specifically requested that his notice address be changed to” the PO Box.
Lone Star memorialized this change of address request through its usual
business processes.
From May 2019 to December 2019, Lone Star sent all correspondence
to Griffith through the PO Box as he requested. This correspondence
included numerous foreclosure notices in June 2019, November 2019, and
December 2019. To avoid foreclosure on his property, Griffith filed for
bankruptcy under Chapter 13, which cancelled Lone Star’s pending
foreclosure sale. He subsequently failed to file necessary documents, so the
bankruptcy court dismissed his case on December 4, 2019. Lone Star
promptly sent additional notices regarding its efforts to sell the property to
the PO Box via first class and certified mail. Lone Star sold the property on
January 7, 2020, to Crystal Matulich.
B. Bankruptcy Court Proceedings
On May 18, 2020, Griffith sued Lone Star and Matulich on multiple
grounds. Only his wrongful foreclosure and breach of contract claims
survived summary judgment. Both claims relied on Griffith’s allegation that
Lone Star’s foreclosure sale was wrongful because “proper notice of the sale
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was not given to” him. In response, Lone Star asserted that Griffith’s claims
were “barred in whole or in part by estoppel and/or waiver.”
Ultimately, the bankruptcy court held in Lone Star’s favor. It relied
on the following as evidence of Griffith’s waiver: (1) he explicitly requested
a change of address to the PO Box; (2) he never raised any concerns about
Lone Star sending notices to the incorrect address; and (3) he had actual
knowledge that Lone Star sent multiple business and legal notices to the PO
Box. Accordingly, the bankruptcy court concluded that Griffith expressly and
impliedly waived the initial loan agreement’s requirement that Lone Star
only send correspondence to the Geddes address. It additionally concluded
that Lone Star complied with Chapter 51 of the Texas Property Code by
sending the foreclosure notice to Griffith’s last known address. Griffith
timely appealed to the district court.
C. District Court Proceedings
In its Memorandum Opinion and Order, the district court weighed the
parties’ arguments and concluded that Griffith did little more than argue that
“his view of the evidence is correct and that the bankruptcy court’s view is
incorrect.” Relying on the clearly erroneous standard of review, it explained
that “because the bankruptcy court’s finding that Mr. Griffith waived his
contractual right is reasonable and supported by the evidence, the [district
court] will not overturn the bankruptcy court.”
The district court also considered Griffith’s arguments that Lone Star
failed to comply with Texas law when it sent foreclosure notices to the PO
Box because that was not his “last known address.” First, Griffith asserted
that his April 2019 texts with a Lone Star representative were a written
request to change his last known address. The district court rejected this
argument because Griffith “verbally and expressly” directed Lone Star to
begin using the PO Box after the April 2019 texts. Second, Griffith argued
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that the bankruptcy notice filed in his bankruptcy petition established the
Geddes address as his last known address. The district court rejected this
argument because it reasoned that the bankruptcy notice “could not be
reasonably construed to be a notice of address change as contemplated by the
Texas Property Code.” Moreover, it held that even it did qualify as notice,
Griffith did not inform Lone Star of his desire to change his address “in a
reasonable manner,” as the parties’ loan agreement and Texas law required.
The district court then affirmed the bankruptcy court in full and issued its
order in favor of Lone Star. Griffith timely appealed.
On appeal, Griffith argues that the district court erred in: (1) adopting
the bankruptcy court’s factual findings regarding his waiver; (2) affirming the
bankruptcy court’s conclusion that he waived his right to receive any notice
of foreclosure at the Geddes address; (3) adopting the bankruptcy court’s
findings regarding his last known address; and (4) affirming the bankruptcy
court’s conclusion regarding his last known address.
II. Standard of Review
“We review the decision of a district court sitting as an appellate court
in a bankruptcy case by applying the same standards of review to the
bankruptcy court’s findings of fact and conclusions of law as applied by the
district court.” In re Matter of Lopez, 897 F.3d 663, 668 (5th Cir. 2018). “We
review a bankruptcy court’s legal conclusions de novo and its findings of fact
for clear error.” Id.“A finding of fact is clearly erroneous when although there is evidence
to support it, the reviewing court on the entire evidence is left with a firm and
definite conviction that a mistake has been committed.” In re Missionary
Baptist Found. of Am., 712 F.2d 206, 209 (5th Cir. 1983). The Supreme Court
has recognized that where “the district court’s account of the evidence is
plausible in light of the record . . . [we] may not reverse it even though
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convinced that had [we] been sitting as the trier of fact, [we] would have
weighed the evidence differently.” Anderson v. City of Bessemer City, 470 U.S.
564, 574 (1985). The Court has similarly held that “[w]here there are two
permissible views of the evidence, the factfinder’s choice between them
cannot be clearly erroneous.” Id.III. Discussion
A. Waiver
Texas law provides that the elements of waiver include: “‘(1) an
existing right, benefit, or advantage held by a party; (2) the party’s actual
knowledge of its existence; and (3) the party’s actual intent to relinquish the
right, or intentional conduct inconsistent with the right.’” Thompson v. Bank
of Am. Nat. Ass’n, 783 F.3d 1022, 1025 (5th Cir. 2015) (quoting Ulico Cas. Co.
v. Allied Pilots Ass’n, 262 S.W.3d 773, 778 (Tex. 2008)). Waiver may also be
evidenced by a party’s conduct if they purposely mislead “the opposite party
into an honest belief that the waiver was intended or assented to.” Alford,
Meroney & Co. v. Rower, 619 S.W.2d 210, 213 (Tex. App.—Amarillo 1981);
see also Tenneco Inv. v. Enter. Prods. Co., 925 S.W.2d 640, 643 (Tex. 1996)
(“Silence or inaction, for so long a period as to show an intention to yield the
known right, is . . . enough to prove waiver.”).
Griffith argues that the bankruptcy court erroneously held that he,
expressly and/or impliedly, waived his right to receive Lone Star’s
foreclosure notice at the Geddes address. He asserts that the bankruptcy
court’s conclusion lacked a sufficient basis in the record, which amounts to
clear error. He also contends that the district court similarly erred in
affirming the bankruptcy court’s conclusions for the same reason. We
disagree.
Here, the district court did not clearly err in adopting the
bankruptcy’s court’s findings of facts and conclusions of law because they
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were plausible in light of the record. Ultimately, Griffith makes the same
request on appeal as he did at the district court: that a reviewing court
construe the evidence in his favor instead of Lone Star’s. Put another way,
he requests a third look at the underlying factual findings in search of a
different result. Indeed, Griffith concedes that he has not appealed any legal
conclusions reached within the bankruptcy and district court opinions. Our
task then, is to discern what facts the district court adopted from the
bankruptcy court and to evaluate whether those facts permit the conclusions
drawn by the district court.
The bankruptcy court benefitted from observing the proceedings
during the initial bench trial and weighing the precise facts that Griffith brings
before this court now. It concluded that Griffith expressly and impliedly
waived usage of the Geddes address for Lone Star’s foreclosure notices. The
district court adopted the bankruptcy court’s findings, satisfied that the
record supported them and that the bankruptcy court did not clearly err.
Specifically, the district court noted that Griffith:
(1) “twice made an express change-of-address request
to Lone Star verbally over the phone”; (2) “verbally
and expressly asked [Lone Star] to send notices to Mr.
Griffith’s [PO Box] rather than to the Geddes
Address”; (3) “received the June 2019 Foreclosure
Sale Notice at the [PO Box] and never raised any
concerns to Lone Star that such notices should be sent
to the Geddes Address instead”; (4) “received the
November 2019 Foreclosure Sale Notice at the [PO
Box] and never raised any concerns to Lone Star that
such notices should be sent to the Geddes Address
instead”; and (5) “never raised any concerns to Lone
Star that [his monthly bank statements] should be sent
to the Geddes Address instead [of his PO Box]).
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The district court also considered and rejected Griffith’s arguments that
Lone Star proffered no facts to support its contention that he had actual
knowledge that Lone Star sent foreclosure correspondence to the PO Box.
On that point, the record indicates that Griffith regularly checked the PO Box
and that Lone Star sent, by certified and first class mail, correspondence to
that address both before and after the foreclosure sale was completed.
As the district court recognized, the record is replete with facts
supporting that Griffith explicitly and impliedly waived exclusive use of the
Geddes address. At best, he creates another plausible take on the evidence—
that, however, is not enough to demonstrate that the bankruptcy or district
courts clearly erred. See Anderson, 470 U.S. at 574. Because these courts did
not clearly err in finding or adopting the facts and conclusions of law that
support Griffith’s express or implicit waiver of the Geddes address, we
affirm. In re Missionary Baptist Found. of Am., 712 F.2d at 209.
B. Griffith’s Last Known Address
Texas Property Code § 51.0021 covers debtors’ changes of address. It
provides that “a debtor shall inform the mortgage servicer of the debt in a
reasonable manner of any change of address of the debtor for purposes of
providing notice to the debtor under [§] 51.002.” Section 51.0001 defines
“last known address” and explains that:
the debtor’s last known address means . . . the
debtor’s last known address as shown by the records
of the mortgage servicer of the security instrument
unless the debtor provided the current mortgage
servicer a written change of address before the date the
mortgage servicer mailed a notice required by [§]
51.002.
In its dealings with Griffith, Lone Star had to “give notice of
sale . . . as required by the applicable law in effect at the time of the proposed
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sale.” In giving notice of the foreclosure sale, Texas law required that Lone
Star direct its notice to Griffith’s “last known address.” Tex. Prop.
Code § 51.002(e). The bankruptcy court determined that Lone Star
complied with Texas law in delivering Griffith’s notice to the PO Box
because the record demonstrated that it was his last known address. The
district court considered and adopted these facts and reached the same
conclusion. Griffith contends that the district court erred in adopting the
bankruptcy court’s findings of fact and conclusions of law regarding his last
known address. We disagree.
In support of his contentions, Griffith maintains the same theories as
he did at the district court: (1) that Bauder v. Alegria, 480 S.W.3d 92, 97 (Tex.
App.—Houston 2015) supports his position that his April 23, 2019 text
message exchange with a Lone Star representative sufficed as notice of a
change to the Geddes address under § 51.0021; and (2) that the bankruptcy
notice in his bankruptcy petition establishes the Geddes address as his last
known address. On the latter point, he argues that even if his April 2019
phone call overrides his text messages from earlier that day, his bankruptcy
notice came long after both events and established the Geddes address as his
last known address.
Here, Griffith’s arguments fail because he misapplies Bauder and the
bankruptcy petition is not a notice of address change under § 51.0021. First,
Griffith relies on a footnote in Bauder to argue that he followed Texas change-
of-address law when he changed to the Geddes address during his April 2019
text with a Lone Star representative. 1 However, as the district court
1
See 480 S.W.3d at 97 n.7 (providing that “if [the debtor] had provided [the lender] a
written change of address before the notices were sent, then the notices should have been
sent to the address provided in writing, even if it differed from [the debtor’s] last known
address as shown by [the lender’s] records”).
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explained, this “footnote supports the proposition that a debtor’s written
instruction overrides any competing information in the mortgage servicer’s
record at the time the written instruction was made. It does not, however,
support the proposition that a written instruction also overrides a subsequent
change of address.” On April 23, 2019, Griffith texted Lone Star at 5:04 a.m.
and requested to use the Geddes address for all correspondence moving
forward. A few hours later, however, he called Lone Star and requested all
correspondence be directed to the PO Box. Lone Star then circulated an
internal memorandum reflecting Griffith’s second request and mailed
relevant documents thereafter accordingly.
Second, Griffith argues that Lone Star had a “duty” to inspect his
2019 bankruptcy notice and update its records to reflect the address on the
notice as his last known address. However, Griffith cites to no authority that
supports his argument. Texas law explains that a debtor’s last known address
comes from two sources: (1) “the debtor’s last known address as shown by
the records of the mortgage servicer,” or (2) the debtor’s subsequent written
request for the mortgage servicer to change the original address. Tex.
Prop. Code § 51.0001. As previously discussed, Lone Star had the PO Box
in its records, so the first option is foreclosed. So, that means that Griffith
argues that the bankruptcy notice qualifies as a written request for Lone Star
to change the original address. That position is untenable. As Texas law
explains, change of address requests must be reasonably communicated and
express in nature. See Tex. Prop. Code §§ 51.0021, 51.0001. The
bankruptcy notice was not sufficient to reasonably communicate his request
for a change of address; nor did it evince Griffith’s intent for Lone Star to
view the document in that light. As the record demonstrates, Griffith
provided the bankruptcy notice to prevent Lone Star from selling the
property. Nothing suggests that he used the bankruptcy notice to alert Lone
Star about a new address. He argues that Lone Star should have made some
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inference regarding his address from the bankruptcy petition, but that
situation is precisely what the Texas Property Code seeks to prevent in
requiring debtors to submit change of address requests in writing. See id.
Because the bankruptcy notice does not qualify as a written change of address
request, we affirm.
IV. Conclusion
For the foregoing reasons, we AFFIRM the judgment of the district
court.
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