Nathalie Sims v. RoundPoint Mtge Servicing Corp

Case: 18-40332 Document: 00514811635 Page: 1 Date Filed: 01/28/2019
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 18-40332 United States Court of Appeals
Fifth Circuit
FILED
January 28, 2019
NATHALIE D. SIMS,
Lyle W. Cayce
Plaintiff - Appellant Clerk
v.
ROUNDPOINT MORTGAGE SERVICING CORPORATION,
Defendant - Appellee
Appeal from the United States District Court
for the Eastern District of Texas
Before HIGGINBOTHAM, GRAVES, and WILLETT, Circuit Judges.
PER CURIAM:*
This case involves a mortgage-foreclosure dispute. Plaintiff-Appellant
Nathalie Sims (“Sims”) appeals the district court’s grant of Defendant-Appellee
RoundPoint Mortgage Servicing Corporation’s (“RoundPoint”) motion for sum-
mary judgment. Specifically, Sims challenges: (1) the district court’s conclusion
that Sims failed to show an issue of material fact in support of her claim for a
declaratory judgment based on the statute of limitations under Texas Civil
Practice and Remedies Code § 16.035(a); and (2) the district court’s finding that
* 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
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Sims failed to present sufficient evidence in support of her Fair Debt Collection
Practices Act (FDCPA) and Texas Debt Collection Practices Act (TDCA) claims
against RoundPoint. For the reasons that follow, we AFFIRM.
I
On August 22, 2003, Sims executed a home equity loan promissory note
(the “Note) to Jacksonville Savings Bank, S.S.B. (“Jacksonville Savings
Bank”). Sims executed a Deed of Trust to Bill W. Taylor as Trustee for Jack-
sonville Savings Bank to secure the Note. The Note was in the amount of
$60,000, payable in monthly installments of $438.56. The Deed of Trust en-
cumbered the real property located at Route 2, P.O. Box 1079, Bullard, Texas
75757 (the “Property”), which is also Sims’ homestead. There are no liens on
the Property other than the one created by the Deed of Trust, now claimed by
RoundPoint.
The Note and the Deed of Trust were made as a home equity loan (the
“Loan”) under Article XVI § 50(a)(6) of the Texas Constitution. Therefore, the
Note is non-recourse as to Sims— she may not be held personally liable for the
amount owed under the Note.
The holder of the Note and the Deed of Trust changed several times. In
December 2003, Jacksonville Savings Bank was acquired by Franklin Bank, a
state-chartered bank with its principal office in Houston, Texas. In November
2008, Franklin Bank was closed by the Texas Department of Savings and Mort-
gage Lending, and the Federal Deposit Insurance Corporation (“FDIC”) was
named receiver for the bank. Consequently, the FDIC began to administer all
of the loans previously held by Franklin Bank, including Sims’ loan. On August
1, 2010, the Note and Deed of Trust were assigned to Multibank 2010-1 SFR
Venture, LLC, and shortly thereafter, RoundPoint acquired rights to become
servicer of the Loan. On April 7, 2010, Sims received notice from RoundPoint
informing her that RoundPoint was the servicer of the Loan, and that future
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payments on the Note should be made to RoundPoint. Sims asserts she never
received verification of ownership nor the proper payment documents from
RoundPoint.
Sims contends that she never received an indication or notification re-
garding missed payments on the Note. Eventually, she was roughly seven
months behind on payments. RoundPoint contacted Sims to discuss her delin-
quency, and she informed RoundPoint that she was unable to make payments
because she was unemployed.
After some correspondence between Sims and RoundPoint regarding the
accounting and verification of the amounts due on the Note, RoundPoint sent
Sims a “Notice of Default and Intent to Accelerate” on August 12, 2010. Round-
Point accelerated the Note on October 26, 2011. RoundPoint applied for an or-
der allowing foreclosure pursuant to Texas Rule of Civil Procedure 736 (“Rule
736”), in the 2nd Judicial District Court of Cherokee County, Texas on Decem-
ber 8, 2011. The state court granted the application by order on February 14,
2012, and foreclosure was set for April 3, 2012.
In response to the court order allowing foreclosure, Sims filed for Chap-
ter 13 bankruptcy on March 27, 2012. During the bankruptcy proceedings,
RoundPoint agreed that the claim on the Note was overstated and an order
was entered in the case reducing the delinquency by $12,345.08. Sims was un-
able to maintain her bankruptcy plan, and on December 18, 2013, her bank-
ruptcy was dismissed due to infeasibility.
Following the dismissal of the bankruptcy, Sims retained counsel in an
attempt to send RoundPoint “Qualified Written Requests” (“QWR”) pursuant
to the Real Estate Settlement Procedures Act (“RESPA”). This started a pro-
cess in which Sims would request information from RoundPoint, then Round-
Point would respond with information it determined to be compliant with
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RESPA, and Sims would threaten to file suit if the purported QWR requests
were not met.
On February 27, 2015, RoundPoint sent Sims notice of default and an
intent to accelerate, seeking less than the total amount owed on the Note. The
notice further informed Sims that the Note might have been reinstated if the
past due amounts were paid. To date, no foreclosure on the Property has taken
place.
On November 1, 2016, Sims sued RoundPoint in the 2nd Judicial District
Court of Cherokee County, Texas, for alleged violations of RESPA, 12 U.S.C. §
2601, et seq. RoundPoint removed the case to federal court. Sims filed an
amended complaint, seeking damages for violations of RESPA, the Fair Debt
Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”), and the Texas
Debt Collection Practices Act, Tex. Fin. Code § 392.001, et seq. (“TDCA”). Sims
also sought a declaration that the lien on the Property is void and unenforcea-
ble pursuant to Tex. Civ. Prac. & Rem. Code § 16.035, and a declaration of the
amount due under the Note. After discovery, RoundPoint moved for summary
judgment.
The Magistrate Judge issued a report and recommendation granting
RoundPoint’s motion. Sims did not file objections to the report and recommen-
dation. Later, the district court entered an order adopting the report and rec-
ommendation and entered final judgment in RoundPoint’s favor. This appeal
followed.
On appeal, Sims argues the Magistrate Judge: (1) reached an incorrect
conclusion that the statute of limitations had not run on RoundPoint’s foreclo-
sure claim, based on an improper application of the law regarding the acceler-
ation and abandonment of foreclosure and an incorrect interpretation of detri-
mental reliance as it applies to acceleration and abandonment; (2) made an
improper interpretation of Sims’ objection to the abandonment and
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acceleration; (3) did not give proper effect to the bankruptcy court’s order de-
termining claims; and (4) erred in finding that Sims did not present sufficient
evidence to survive summary judgment on her FDCPA and TDCA claims.
RoundPoint contends, inter alia, that Sims’ statute of limitations claim fails
because RoundPoint abandoned any prior acceleration when it sent Sims no-
tice of default in February 2015, and Sims has not proffered evidence sufficient
to raise an issue of fact on her remaining claims.
II
We review a district court’s grant of summary judgment de novo. Boren
v. U.S. Nat. Bank Ass’n, 807 F.3d 99, 103–04 (5th Cir. 2015) (citing Young v.
Equifax Credit Info. Servs., Inc., 294 F.3d 631, 635 (5th Cir. 2002)). Summary
judgment is appropriate only “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a). In reviewing summary judgment, we con-
strue all facts and inferences in the light most favorable to the nonmoving
party. Boren, 807 F.3d at 104 (citing Canal Ins. Co. v. Coleman, 625 F.3d 244,
247 (5th Cir. 2010)).
III
A
Under Texas law, a secured lender “must bring suit for . . . the foreclosure
of a real property lien not later than four years after the day the cause of action
accrues.” Tex. Civ. Prac. and Rem. Code § 16.035(a). Where “a note or obliga-
tion [is] payable in installments [and] is secured by a real property lien, the
four-year limitations period does not begin to run until the maturity date of
the last note, obligation, or installment.” EMC Mortg. Corp. v. Window Box
Ass’n, Inc., 264 S.W.3d 331, 335 (Tex. App.—Waco 2008, no pet.). “If a note or
deed of trust secured by real property contains an optional acceleration clause,”
however, the action accrues “when the holder actually exercises its option to
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accelerate.” Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 566
(Tex. 2001). To exercise the option, the holder must send “both a notice of intent
to accelerate and a notice of acceleration.” EMC Mortg. Corp., 264 S.W.3d at
335–36. “Both notices must be ‘clear and unequivocal.’” Id. at 336 (quoting
Wolf, 44 S.W.3d at 566).
Acceleration of a note may be unilaterally abandoned “by requesting pay-
ment on less than the full amount of the loan.” Boren, 807 F.3d at 106 (quoting
Leonard v. Ocwen Loan Servicing, L.L.C., 616 F. App’x. 677, 680 (5th Cir. 2015)
(per curiam)). “‘Abandonment of acceleration has the effect of restoring . . . the
note’s original maturity date,’ and thus resetting maturity of the last install-
ment as the accrual date for the purpose of the statute of limitations.” Alcala
v. Deutsche Bank Nat’l Tr. Co., 684 F. App’x 436, 439 (5th Cir. 2017) (quoting
Khan v. GBAK Props., Inc., 371 S.W.3d 347, 353 (Tex. App.—Houston [1st
Dist.] 2012, no pet.)).
Since this court addressed the issue in Boren v. U.S. National Bank As-
sociation, we have consistently concluded that notice of the kind sent by Round-
Point to Sims in February 2015 constitutes unilateral abandonment of accel-
eration, and thus, a reset of the statute of limitations under Texas law. 807
F.3d at 103–06; see Sexton v. Deutsche Bank Nat’l Tr. Co., 731 F. App’x 302,
306–08 (5th Cir. 2018) (per curiam); Hernandez v. Select Portfolio Servicing,
Inc., 687 F. App’x 371, 373–74 (5th Cir. 2017) (per curiam); Alvarado v. U.S.
Bank Nat’l Ass’n, 652 F. App’x 305, 307 (5th Cir. 2016); Nunnery v. Ocwen Loan
Servicing, L.L.C., 641 F. App’x 430, 433 (5th Cir. 2016) (per curiam). Further,
Texas intermediate appellate courts have followed Boren. See, e.g., Farmehr v.
Deutsche Bank Nat’l Tr. Co., No. 05-17-00563-CV, 2018 WL 2749634, at *4
(Tex. App.—Dallas May 31, 2018, no pet.) (mem. op.); Bracken v. Wells Fargo
Bank, N.A., No. 05-16-01334-CV, 2018 WL 1026268, at *5 (Tex. App.—Dallas
Feb. 23, 2018, no pet.), reh’g denied (Apr. 12, 2018), review denied (July 6,
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2018); NSL Prop. Holdings, LLC v. Nationstar Mortg., LLC, No. 02-16-00397-
CV, 2017 WL 3526354, at *5 (Tex. App.—Fort Worth Aug. 17, 2017, no pet.)
(mem. op., not designated for publication), review denied (Jan. 5, 2018). The
February 2015 notice contained the requisite components to serve as an aban-
donment of acceleration.
However, that does not end the inquiry. According to Texas intermediate
appellate courts, the holder of a note may not unilaterally abandon accelera-
tion if the borrower objects to abandonment or has detrimentally relied on the
acceleration. Boren, 807 F.3d at 105 (citing several Texas appellate court deci-
sions).
Sims argues that, even if the February 2015 notice was an abandonment
of acceleration, RoundPoint could not effectively abandon because Sims detri-
mentally relied on the acceleration by filing the Chapter 13 bankruptcy peti-
tion, creating and confirming a Chapter 13 plan, and objecting to the claim
filed by RoundPoint. Additionally, Sims contends that she objected to Round-
Point’s February 2015 notice in letters dated August 14, 2015 and September
8, 2015, and by filing the present suit.
However, Sims has failed to establish that there was detrimental reli-
ance in this case. In order to show evidence of detrimental reliance, a borrower
must demonstrate that she materially changed her position in reliance on an-
other party’s promise or representation. See Bitterroot Holdings, L.L.C. v.
MTGLQ Inv’rs, L.P., 648 F. App’x 414, 418 (5th Cir. 2016) (per curiam).
Both parties correctly point out that, as acknowledged in Callan v.
Deutsche Bank Tr. Co. Americas, merely filing for bankruptcy is not considered
evidence of detrimental reliance under Texas law. 93 F. Supp. 3d 725, 738 (S.D.
Tex. 2015). Sims is also correct that she did more than initiate the Chapter 13
plan. Similar to Callan, however, the facts of this case do not show that Sims
detrimentally relied on the acceleration. Like Sims, the plaintiff in Callan was
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also in default and subsequently completed a bankruptcy plan. Like Sims, the
Callan plaintiff also lived in the home that was subject to foreclosure. Finally,
just as in Callan, the defendant in this action would have to engage in addi-
tional foreclosure procedures, further extending Sims’ beneficial use of the
Property. This despite Sims receiving notice of her default as early as 2010.
Sims received a benefit, not a detriment, from the acceleration and the
subsequent Chapter 13 bankruptcy filing. Like the Callan court, we conclude
that there is no detrimental reliance under these circumstances. 1
Furthermore, Sims has failed to offer evidence that she objected to the
abandonment of acceleration. First, as the Magistrate Judge correctly noted,
the August and September 2015 letters sent to RoundPoint do not state any
objection to abandonment of the acceleration. The letters request information
regarding the amount due and the ownership of the Note. Such letters sent six
months after notice of abandonment are not objections. Second, Sims’ asser-
tion—that filing suit more than a year after notice of abandonment is sufficient
evidence of her objection—lacks merit. We have routinely declined to treat a
subsequent lawsuit for a declaratory judgment as an objection to
1 Sims suggests that her bankruptcy filing should be considered an alternative method
to finance the mortgage, and therefore, evidence of detrimental reliance. Courts have rejected
the “alternate financing” argument. See HSBC Bank USA, Nat’l Ass’n v. Erickson, No. A-17-
CV-00429-SS, 2018 WL 1128148, at *3 (W.D. Tex. Mar. 1, 2018) (rejecting assertion that
financing to build a second home constituted detrimental reliance); Nationstar Mortg., LLC
v. Landers, No. 12-17-00047-CV, 2018 WL 1737013, at *6 (Tex. App.—Tyler Apr. 11, 2018,
no pet.) (rejecting contention that refinancing a second lien mortgage while in default consti-
tuted detrimental reliance). Further, this court has previously determined that failure to
demonstrate any particular legal or financial consequences incurred as a result of the financ-
ing decision defeats the detrimental reliance argument. Bitterroot, 648 F. App’x at 419. Sims’
Chapter 13 bankruptcy was dismissed without discharge, effectively returning Sims to the
legal and financial position she was in before she filed her bankruptcy case—except for the
benefit she received from preventing the foreclosure by filing bankruptcy. See In re Oparaji,
698 F.3d 231, 238 (5th Cir. 2012) (explaining that dismissal of a bankruptcy case restores the
status quo ante). Sims has not provided case law or evidence to support her “alternative fi-
nancing” detrimental reliance argument. Her argument lacks merit.
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abandonment. See, e.g., Alcala, 684 F. App’x at 440 (citing Boren, 807 F.3d at
103, 106) (declining to consider borrower’s filing of a lawsuit against a lender
as an objection). Based on the facts of this case, we once again decline to treat
the filing of a lawsuit as an objection to abandonment.
Sims has not provided evidence of detrimental reliance on the accelera-
tion, nor has she provided evidence of an objection to the notice of abandon-
ment. The February 2015 notice of default was an abandonment of the prior
acceleration. RoundPoint was entitled to summary judgment on the claim for
declaratory judgment.
B
Sims also appeals the district court’s grant of summary judgment on her
FDCPA and TDCA claims. 2 She, however, has failed to present meritorious
arguments in support of the claims.
Sims purports to challenge the grant of summary judgment on her
FDCPA claim. Nevertheless, Sims merely mentions the FDCPA several times
without providing any citation to the statute or providing specific arguments
in support of the claim. Sims has waived any unraised issues with respect to
her FDCPA claim. 3 See Sama v. Hannigan, 669 F.3d 585, 589 n.5 (5th Cir.
2012) (noting that issues not argued on appeal are waived).
Under Tex. Fin. Code. § 392.304(a)(8), a debt collector may not misrep-
resent “the character, extent, or amount of a consumer debt.” A debt collector’s
statement misstating the amount due to a creditor can be actionable pursuant
2 Sims has neither mentioned nor presented any argument to appeal the grant of sum-
mary judgment on her RESPA claim. Sims has waived any arguments with respect to that
claim. See Sama v. Hannigan, 669 F.3d 585, 589 n.5 (5th Cir. 2012) (noting that issues not
argued on appeal are waived). We affirm the grant of summary judgment on the RESPA
claim.
3 Sims also failed to present argument to support this claim in the district court. Sims
abandoned argument with respect to her FDCPA claim. St. Paul Mercury Ins. Co. v. William-
son, 224 F.3d 425, 445 (5th Cir. 2000) (arguments not raised are deemed abandoned).
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to the TDCA. See, e.g., Johnson v. Wells Fargo Bank, NA, 999 F. Supp. 2d 919,
933 (N.D. Tex. 2014). During the Chapter 13 bankruptcy case, RoundPoint’s
pre-petition proof of claim was reduced by $12,345.08 via agreement. Sims ar-
gues that the Magistrate Judge erred in concluding that RoundPoint’s failure
to reduce the amount owed when attempting to collect on the Note was not a
false or misleading statement. 4 Sims further argues that two letters sent by
RoundPoint stated different default dates and different amounts due on the
Note, and therefore, one of the letters must be false. Both arguments fail.
Regarding the bankruptcy order reducing RoundPoint’s proof of claim,
Sims’ argument fails because the bankruptcy petition was dismissed. See In re
Oparaji, 698 F.3d 231, 238 (5th Cir. 2012) (citation omitted) (“[W]hen a debtor
fails to fulfill their [sic] end of the bargain because of the dismissal of their
case, a resulting finding that their confirmed Chapter 13 plan is terminated
serves to prevent a debtor from obtaining the benefit of those terms in a plan
which are [sic] advantageous to the debtor.”). The dismissal effectively re-
turned the parties to their original position before the petition was filed. Id. To
avert that conclusion, Sims invokes judicial estoppel by arguing that the dis-
trict court failed to treat the order reducing RoundPoint’s proof of claim as a
final order with preclusive effect. Sims’ argument is misplaced. Sims is correct
that the bankruptcy order has preclusive effect in any subsequent judicial pro-
ceedings. See Matter of Baudoin, 981 F.2d 736, 739 (5th Cir. 1993) (citation
omitted) (“An arrangement confirmed by a bankruptcy court has the effect of
a judgment . . . . Any attempt by the parties to relitigate any of the matters
that were raised or could have been raised therein is barred under the doctrine
of res judicata.”); see also In re Mandel, 641 F. App’x 400, 403 (5th Cir. 2016)
4 Sims has not challenged other issues the Magistrate Judge addressed in the report
and recommendation to grant summary judgment on the TDCA claim. Sims has waived ar-
gument regarding those issues.
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(quoting Siegel v. Fed. Home Loan Mortg. Corp., 143 F.3d 525, 529 (9th
Cir.1998)) (“[T]he allowance or disallowance of ‘a claim in bankruptcy is bind-
ing and conclusive on all parties or their privies, and being in the nature of a
final judgment, furnishes a basis for a plea of res judicata’”.). Indeed, Round-
Point could be precluded from taking a position inconsistent with the proof of
claim order in a subsequent court proceeding. However, Sims has failed to pro-
vide case law or evidence that RoundPoint’s subsequent failure to account for
the proof of claim reduction order provides a basis for legal action pursuant to
the TDCA.
Sims’ contention that the two letters sent by RoundPoint provide suffi-
cient evidentiary basis to advance a TDCA claim fails for two reasons. First,
because Sims never argued that the two letters evidenced misleading state-
ments in the district court, she waived any argument she may have had based
on the letters. See St. Paul Mercury Ins. Co. v. Williamson, 224 F.3d 425, 445
(5th Cir. 2000) (arguments not raised are deemed abandoned). Second, the let-
ters alone are not sufficient to survive summary judgment. Sims has offered
no evidence that the letters were meant to provide the same information. See
Berry v. Fed. Nat. Mortg. Ass’n, 609 F. App’x 784, 787 (5th Cir. 2015). In addi-
tion, she has not directed the court to an affirmative statement in the letters
that is false or misleading. Fields v. JP Morgan Chase Bank, 638 F. App’x 310,
313 (5th Cir. 2016) (quoting Verdin v. Fed. Nat’l Mortgage Ass’n, 540 F. App’x
253, 257 (5th Cir. 2013)) (“To violate the TDCA using a misrepresentation, ‘the
debt collector must have made an affirmative statement that was false or mis-
leading.’”).
Sims failed to provide argument in support of her FDCPA claim and
failed to provide sufficient evidence to support her TDCA claim.
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IV
For the reasons stated above, the district court’s grant of summary judg-
ment is AFFIRMED.
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