Florence Anyafulu v. Equicredit Corp. of America

Case: 16-20180 Document: 00513778168 Page: 1 Date Filed: 11/30/2016
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 16-20180 FILED
Summary Calendar November 30, 2016
Lyle W. Cayce
Clerk
FLORENCE ANYAFULU,
Plaintiff - Appellant
v.
EQUICREDIT CORPORATION OF AMERICA; SELECT PORTFOLIO
SERVICING, INCORPORATED,
Defendants - Appellees
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:14-CV-2901
Before STEWART, Chief Judge, and CLEMENT and SOUTHWICK, Circuit
Judges.
PER CURIAM:*
Plaintiff-Appellant home-owner filed suit against Defendants-Appellees
seeking to enjoin foreclosure proceedings on her residential property. The
district court granted summary judgment in favor of Defendants-Appellees and
dismissed Plaintiff-Appellant’s claims. We affirm.
* 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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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No. 16-20180
I. Facts & Procedural History
In 1997, Plaintiff-Appellant Florence Anyafulu executed a promissory
note (the “Note”) in the amount of $80,750, and a deed of trust (the “Deed”) in
favor of EquiCredit Corporation of Texas, to secure a residential property (the
“Property”) located on Duchamp Drive in Houston, Texas. In October of 2010,
after expressing concern over her ability to pay her monthly loan installments,
Anyafulu agreed to sign a loan modification agreement. The modification
agreement provided an increased monthly payment amount to reflect a new
principle balance of $94,580.06, to account for unpaid interest, taxes, insurance
premiums, and other expenses relating to the original Note.
In 2012, EquiCredit Corporation of Texas assigned the Note to the
current lender, Defendant-Appellee EquiCredit Corporation of America.
Defendant-Appellee Select Portfolio Servicing, Inc. (“Select”) then became the
mortgage servicer for the loan. In June 2014, Select sent Anyafulu a notice of
default stating that she had failed to make the requisite loan payments and as
a result, she would be required to pay $57,020.92 to cure the default. When
the debt remained outstanding a few months later, Select retained a debt
collection firm who notified Anyafulu that, due to her continued failure to cure
the default on the loan, Defendants-Appellees had elected to accelerate the
maturity of the debt and initiate foreclosure sale proceedings on the Property.
Then on October 6, 2014, Anyafulu filed suit in Texas state court seeking
to enjoin the foreclosure proceedings and asserting claims against Defendants-
Appellees for breach of contract, fraud and fraudulent misrepresentation,
breach of good faith and fair dealing, violations of the Deceptive Trade
Practices Act (“DTPA”), and requesting an accounting. Defendants-Appellees
removed the case to federal district court and moved to dismiss the suit. On
June 3, 2015, the district court denied Defendants-Appellees’ motion to dismiss
and ordered Anyafulu to amend her complaint. After Anyafulu filed her first
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amended complaint on June 24, 2015, Defendants-Appellees moved for
summary judgment and for judgment on the pleadings. The district court
granted Defendants-Appellees’ motion for summary judgment and dismissed
Anyafulu’s suit in its entirety.
In its order, the district court reasoned that Defendants-Appellees were
entitled to summary judgment on the breach of contract claim because
Anyafulu failed to present any type of evidence documenting that Defendants-
Appellees breached the terms of the loan. The district court then determined
that Anyafulu’s fraud and fraudulent misrepresentation claims were barred by
the economic loss rule. It further held that her claims asserting breach of good
faith and fair dealing failed because there was no duty of good faith and fair
dealing imposed on the lender in a debtor-creditor relationship. Finally,
because Anyafulu lacked standing as a consumer under the DTPA, she was
barred from obtaining relief under the Act. Additionally, because she could not
point to a legal theory or claim, or a contractual provision, entitling her to an
accounting, the district court denied her request for one.
This appeal ensued.
II. Standard of Review
“We review a district court’s grant of summary judgment de novo,
applying the same standards as the district court.” Hagen v. Aetna Ins. Co.,
808 F.3d 1022, 1026 (5th Cir. 2015) (citation omitted). Summary judgment is
appropriate if the record evidence shows that there is no genuine issue of
material fact and that the moving party is entitled to judgment as a matter of
law. Robinson v. Orient Marine Co., 505 F.3d 364, 366 (5th Cir. 2007); Fed. R.
Civ. P. 56(a). “Unsubstantiated assertions, improbable inferences, and
unsupported speculation are not sufficient to defeat a motion for summary
judgment.” See Brown v. City of Houston, 337 F.3d 539, 541 (5th Cir. 2003)
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(citation omitted). “[R]easonable inferences are to be drawn in favor of the non-
moving party.” Robinson, 505 F.3d at 366 (citation omitted).
III. Discussion
On appeal, Anyafulu first argues that the district court erred in
dismissing her breach of contract claim against Defendants-Appellees.
According to the district court’s written order, “Anyafulu has not attached any
evidence to her responses even documenting increases in payment that she
alleges violates the loan’s terms.” Anyafulu claims that the district court’s
observation is in error and she points to an attachment to her first amended
complaint where the Deed is detailed. Therein, the terms indicate that she is
entitled to 21 days’ notice in writing prior to the sale of the Property. She
claims that Defendants-Appellees’ failure to give her the requisite notice is at
least one example of their breach of the terms of the contract that she provided
in the proceedings below sufficient to defeat summary judgment.
“In Texas, the essential elements of a breach of contract action are: (1)
the existence of a valid contract; (2) performance or tendered performance by
the plaintiff; (3) breach of the contract by the defendant; and (4) damages
sustained by the plaintiff as a result of the breach.” Smith Int’l, Inc. v. Egle
Grp., LLC, 490 F.3d 380, 387 (5th Cir. 2007) (alterations and internal
quotation marks omitted).
Although Anyafulu claimed that her default on the loan payments was
excused by Defendants-Appellees’ own breach of the terms of the Note,
presumably by accelerating the terms of the Note and instituting foreclosure
proceedings, she failed to present any documentary evidence supporting these
claims. Though she alleges that she did not receive the requisite 21 days’
written notice prior to the sale of the Property, the record reflects that she did
receive notice of the anticipated sale in September 2014, and the Property, to
date, remains unsold. Aside from the language in the Deed concerning the
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requisite notice, which does not reveal a contractual breach by Defendants-
Appellees, Anyafulu has provided no other evidence to support her breach of
contract claims. Consequently, Anyafulu’s allegations that Defendants-
Appellees breached the contract are no more than “unsubstantiated assertions”
and thus insufficient “to defeat a motion for summary judgment.” Brown, 337
F.3d at 541. We therefore hold that the district court did not err in dismissing
Anyafulu’s breach of contract claims.
Anyafulu also argues on appeal that the district court erred in dismissing
her claims against Defendants-Appellees for fraud and fraudulent
representation. She claims that Defendants-Appellees promised her orally and
in writing that as long as they were engaging in the modification process of the
terms of the loan, her property “was safe.” She points to a letter sent by Select
in September 2014 indicating that no foreclosure sale would be conducted
within a 30-day period. She advances that this was a fraudulent
misrepresentation because approximately two weeks later, when she remained
in default on her loan payments, Defendants-Appellees accelerated the terms
of the loan and began planning foreclosure proceedings.
As the district court correctly recognized, “Texas courts follow the
economic loss rule which generally precludes recovery in tort for economic
losses resulting from a party’s failure to perform under a contract when the
harm consists only of the economic loss of a contractual expectancy.” See
Shakeri v. ADT Sec. Servs., Inc., 816 F.3d 283, 292 (5th Cir. 2016) (alterations
and internal quotation marks omitted). Here, Anyafulu’s fraudulent
misrepresentation claim rests on her allegation that Defendants-Appellees
modified the terms of the loan by indicating that they would not accelerate or
initiate foreclosure proceedings while she was undergoing the loan
modification process. As the district court correctly reasoned, Anyafulu’s
claims involving Defendants-Appellees’ alleged modification of the terms of
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loan “sound[] only in contract.” See Sw. Bell Tel. Co. v. DeLanney, 809 S.W.2d
493, 494–95 (Tex. 1991) (“When the injury is only the economic loss to the
subject [matter] of a contract itself the action sounds in contract alone.”). This
is because liability would only arise if Defendants-Appellees’ conduct
constituted breach 1 of the parties’ loan agreement. Shakeri, 816 F.3d at 292.
Thus, the district court properly concluded that her fraudulent
misrepresentation claims are barred by the economic loss rule because the
alleged loss complained of is the subject matter of the loan agreement, or
contract, between the parties. DeLanney, 809 S.W.2d at 494–95. Accordingly,
the district court did not err in dismissing Anyafulu’s claims for fraud and
fraudulent misrepresentation. 2
IV. Conclusion
For the aforementioned reasons, we affirm the district court’s summary
judgment in favor of Defendants-Appellees.
1 Nothing in this opinion should be construed as a conclusion that Defendants-
Appellees breached the terms of the parties’ loan agreement.
2 Anyafulu does not include in her appellate brief any arguments relating to the
district court’s dismissal of her claims against Defendants-Appellees for breach of good faith
and fair dealing, its dismissal of her claims pursuant to the Deceptive Trade Practices Act,
or its denial of her request for an accounting. Accordingly, she has waived her right to appeal
those issues. See United States v. Thibodeaux, 211 F.3d 910, 912 (5th Cir. 2000) (“It has long
been the rule in this circuit that any issues not briefed on appeal are waived.”).
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