Opinion issued February 28, 2013
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-11-00800-CV
———————————
ABUDU KADIRI ALLI, Appellant
V.
WACHOVIA BANK, N.A. AS TRUSTEE, SUCCESSOR BY MERGER TO
FIRST UNION NATIONAL BANK, AS INDENTURE TRUSTEE,
BAYVIEW LOAN SERVICING, LLC AND INTERBAY FUNDING, LLC,
Appellees
On Appeal from the 55th District Court
Harris County, Texas
Trial Court Case No. 2008-70936
MEMORANDUM OPINION
Abudu Kadiri Alli appeals from a take-nothing judgment rendered after a
bench trial on his claims against Wachovia Bank, N.A. as Trustee, Successor by
Merger to First Union National Bank, as Indenture Trustee, Bayview Loan
Servicing, LLC, and Interbay Funding, LLC. 1 We affirm the judgment.
Background
Alli owned a parcel of land on South Post Oak Road in Houston. To raise
capital for his automotive business operating on the same property, Alli obtained a
loan from Interbay in late 2001. He executed a promissory note for a principal
amount of $187,200 and a deed of trust pledging the property as collateral. The
deed of trust provides that notices of default and foreclosure should be sent to a
designated address on Ashford Lakes in Sugar Land. Alli subsequently changed
the notice address to the address for the property itself.
Alli made payments on the note through March 2007 but thereafter made no
further payments. A couple of months later, Bayview, which was responsible for
servicing the loan, sent notices of default to the address for the property and to the
address on Ashford Lakes. Around that time, Alli contacted Bayview about the
possibility of obtaining a discounted payoff. Initially, Alli engaged a financial-
workout professional, Roger Dill, to represent him in reaching a payoff agreement.
1
The defendants’ amended answer identifies the defendant parties as
“Wachovia Bank, N.A., as Trustee, Successor by Merger to First Union
National Bank, as Indenture Trustee, Bayview Loan Servicing, LLC
formerly Interbay Funding, LLC, (incorrectly sued as Bayview Loan
Servicing, LLC and Interbay Funding, LLC) . . . .” The amended answer also
states that “Bayview Loan Servicing LLC, formerly Interbay Funding LLC,
is the servicer of the Note for the benefit of Wachovia Bank, N.A. successor
by merger with First Union National Bank, as Trustee . . . .”
2
Dill corresponded with Bayview and informed Alli that he would prepare a lump
sum payoff offer.
By September, Alli had terminated Dill and engaged a Texas-licensed
attorney, Tekenari (“Tex”) Wariboko. One of Alli’s motivations for engaging
Wariboko was that he was preparing to take an extended trip to Nigeria and wanted
to ensure that someone was handling the payoff matter with Bayview. David
Cortes, a Bayview asset manager assigned to the loan account, required Alli to
transmit an authorization letter indicating Wariboko’s authority. Cortes instructed
how such a letter should be worded. Alli drafted the required authorization letter,
which stated in relevant part:
RELEASE OF INFORMATION
RE: LOAN # 200010471
Dear Mr. Cortes:
I hereby authorize the release of any and all information pertaining to
the above referenced loan to Tex A. Wariboko, Esq., Attorney at Law,
the law firm of Wariboko & Associates, P.C. Mr. Wariboko may be
reached at 713-772-[####] [Fax # (713) 981-[####])].
After receiving the authorization letter, Cortes spoke telephonically with Wariboko
about the possibility of a discounted payoff. Cortes faxed to Wariboko a financial
request letter detailing the information that Bayview needed before considering a
payoff offer.
3
In January 2008, Wariboko called Cortes to inform him that a payoff offer
was forthcoming. He then sent a letter addressed to Cortes proposing a discounted
payoff amount of $50,000. Through further calls with Bayview in February,
Wariboko learned that Cortes was no longer handling the loan account. Neither
Wariboko nor Alli ever received a response from Bayview regarding the payoff
offer.
In February, Bayview sent notices of acceleration and non-judicial
foreclosure to the address on Ashford Lakes (as listed in the deed of trust) and to
the address for the property on South Post Oak Road (as Alli had previously
designated). The notices indicated that the property would be foreclosed upon on
March 4. No notices were sent to Wariboko, and Bayview did not otherwise inform
him of the impending foreclosure. IB Property Holdings, LLC—which has the
same address as Bayview and Interbay—purchased the property at the foreclosure
sale on March 4 and subsequently conveyed title to Wachovia.
Alli sued Wachovia, Bayview, and Interbay for breach of contract,
promissory estoppel, and negligent misrepresentation. In addition to monetary
damages, he requested the imposition of a constructive trust on the property. The
defendants responded with a general denial, affirmative defenses, special
exceptions, and a counterclaim for the deficiency on the loan and other damages.
Alli, as counter-defendant, filed a general denial and other affirmative defenses.
4
During the bench trial, both sides presented evidence concerning Alli’s
claims; the counterclaims, however, were not pursued. The court rendered
judgment that Alli take nothing by his claims. Alli filed a request for findings of
fact and conclusions of law, which the court denied as untimely. He subsequently
filed a motion for new trial, which was overruled by operation of law. Alli timely
filed a notice of appeal.
Standard of Review
In a nonjury trial, when no findings of fact or conclusions of law are filed,
we imply that the trial court made all necessary findings to support its judgment.
Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex. 1992); Lopez v.
Hansen, 947 S.W.2d 587, 589 (Tex. App.—Houston [1st Dist.] 1997, no writ). The
implied findings may be challenged for both legal and factual sufficiency. Whaley
v. Cent. Church of Christ of Pearland, 227 S.W.3d 228, 231 (Tex. App.—Houston
[1st Dist.] 2007, no pet.) (citing BMC Software Belg., N.V. v. Marchand, 83
S.W.3d 789, 795 (Tex. 2002)).
Alli does not specify in his appellate brief whether he challenges the court’s
findings for legal or factual sufficiency. Throughout his brief on each of his issues,
he characterizes the evidence as “undisputed” and facts in his favor as having been
“conclusively established” or “established as a matter of law.” Accordingly, we
construe Alli’s three issues as making legal sufficiency challenges. See Regal Fin.
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Co., Ltd. v. Tex Star Motors, Inc., 355 S.W.3d 595, 603 (Tex. 2010) (noting that
evidence is legally insufficient when it “conclusively establishes the opposite of
the vital fact”) (quoting Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706,
711 (Tex. 1997)).
“An appellate court will apply the same standard of review to sufficiency
challenges of implied findings as is applied in the review of jury findings.” Ryan v.
Abdel-Salam, 39 S.W.3d 332, 335 (Tex. App.—Houston [1st Dist.] 2001, pet.
denied). In a legal sufficiency review, all the evidence is considered in the light
most favorable to the judgment rendered. Regal Fin. Co., 355 S.W.3d at 603. “For
evidence to conclusively establish the opposite of a vital fact, the evidence must be
the type that could not lead reasonable people to different conclusions.” Id. (citing
City of Keller v. Wilson, 168 S.W.3d 802, 815–16 (Tex. 2005)). “If more than a
scintilla of evidence supports the challenged finding, the no-evidence challenge
fails.” Haggar Clothing Co. v. Hernandez, 164 S.W.3d 386, 388 (Tex. 2005) (per
curiam).
Analysis
Alli raises three issues on appeal. First, he argues that the evidence at trial
conclusively established that Bayview had breached the deed of trust by failing to
provide proper pre-foreclosure notice to his agent, Wariboko. Alli contends that the
authorization letter and the subsequent course of conduct between Wariboko and
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Bayview resulted in a contractual obligation to send such notice to Wariboko.
Second, Alli argues that the evidence at trial conclusively established that Bayview
waived any right to rely on the notice provisions in the deed of trust by
acknowledging and dealing with Wariboko, and therefore the trial court erred in
impliedly denying relief on this basis. Third, Alli argues that the evidence
conclusively established that Bayview was estopped from denying its promise to
deal with Wariboko as Alli’s agent, and therefore the trial court erred in impliedly
denying his claim for promissory estoppel.
For the reasons detailed below, we disagree with Alli’s arguments. The
record does not reflect any evidence that Bayview was obligated or had otherwise
promised to send notices of foreclosure to Wariboko.
1. Neither the authorization letter nor the communications between
Wariboko and Bayview conclusively established a contractual
obligation
Alli, as the plaintiff, has the burden to prove that the defendants breached a
contractual obligation to provide notice to Wariboko. See SLT Dealer Group, Ltd.
v. AmeriCredit Fin. Servs., Inc., 336 S.W.3d 822, 828 (Tex. App.—Houston [1st
Dist.] 2011, no pet.). The key pieces of evidence for Alli’s breach of contract claim
are the authorization letter and the course of conduct between Wariboko and
Bayview. According to Alli, these facts conclusively demonstrate Bayview’s
recognition of Wariboko’s agency. However, we conclude that these facts do not
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conclusively establish a contractual duty to provide notice of foreclosure to
Wariboko.
A. Authorization letter
The operative language in the authorization letter states that Alli
“authorize[s] the release of any and all information pertaining to the above
referenced loan to Tex A. Wariboko . . . .” 2 Alli contends that the authorization
letter represents a modification of the deed of trust’s notice provision. However,
even if the authorization letter was intended to modify the deed of trust, we
conclude that it fails as a contractual modification for want of consideration. “A
modification must satisfy the elements of a contract: a meeting of the minds
supported by consideration.” Hathaway v. Gen. Mills, Inc., 711 S.W.2d 227, 228
(Tex. 1986); see also Walden v. Affiliated Computer Servs., Inc., 97 S.W.3d 303,
314 (Tex. App.—Houston [14th Dist.] 2003, pet. denied). Consideration is defined
as “either a benefit to the promisor or a loss or detriment to the promisee.” N.
Natural Gas Co. v. Conoco, Inc., 986 S.W.2d 603, 607 (Tex. 1998) (quoting
Receiver for Citizen’s Nat’l Assurance Co. v. Hatley, 852 S.W.2d 68, 71 (Tex.
2
Although Alli does not argue otherwise, we note that this document plainly
does not meet the requirements of an integrated contract. “In order to be
legally binding, a contract must be sufficiently definite in its terms so that a
court can understand what the promisor undertook.” T.O. Stanley Boot Co.,
Inc. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992). The lack of terms
in the authorization letter makes it impossible to determine what obligations,
if any, the parties undertook, and thus it fails as a contract.
8
App.—Austin 1993, no writ)). Alli has not identified, and the record does not
reflect, the consideration exchanged with respect to the authorization letter.
Accordingly, the authorization letter fails as a modification of the deed of trust.
B. Course of conduct between Wariboko and Bayview
Alli contends that “Bayview was aware of and acknowledged the agency
relationship between Mr. Alli and Mr. Wariboko and dealt repeatedly with Mr.
Wariboko in his capacity as Mr. Alli’s agent, including accepting correspondence
from him, sending him confidential information about the Note, requesting
financial information from him, and sending him a proposed payoff amount for the
loan.” Alli characterizes these circumstances as an “agreement to deal with Mr.
Wariboko” that Bayview breached.
The record is replete with testimony that Cortes, as Bayview’s agent,
discussed the possibility of a discounted payoff with Wariboko. That said, there is
no testimony or other evidence indicating that Bayview stated to or agreed with
anyone that it would provide notice of foreclosure to Wariboko. Cortes testified
that the topic of his communications with Wariboko was the discounted payoff, not
foreclosure proceedings. He specifically testified that neither Alli nor Wariboko
ever requested that notices of foreclosure be sent to Wariboko. Although Wariboko
testified that he was hired in part to receive notices of foreclosure, that testimony
only addresses his understanding with his client, Alli, not an agreement with
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Bayview. Wariboko also testified that “it was clear to [Cortes] that everything was
going to be sent to me,” but he did not testify as to any specific agreement by
Bayview that notices of foreclosure would be sent to him. Without any such
evidence, Alli did not conclusively prove that Bayview had a contractual
obligation to provide notice of foreclosure to Wariboko.
In summary, the trial court might have impliedly found that Alli failed to
prove that the defendants were under a contractual obligation to provide notice of
foreclosure to Wariboko. Alli, having the burden of proof on this question, did not
produce evidence at trial conclusively demonstrating such an obligation. Therefore,
we overrule Alli’s first issue.
2. The evidence did not conclusively establish waiver of the deed of trust’s
notice provisions
Alli argues that “[t]he evidence that supported [his] claim for breach of
contract also conclusively established that Bayview waived any right to rely
strictly on the Deed of Trust and Note for its notice requirements by accepting and
dealing with Mr. Wariboko as Alli’s agent.” We interpret this argument to mean
that Bayview waived the deed of trust’s strictures concerning how a change of
address should be effectuated and how to provide proper notice of foreclosure. We
disagree with this argument because, in the same way that the evidence did not
conclusively establish a contractual obligation to convey notices of foreclosure to
10
Wariboko, the evidence did not conclusively establish Bayview’s waiver of the
notice provisions.
“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.” Ulico Cas. Co. v. Allied Pilots Ass’n, 262 S.W.3d 773, 778 (Tex. 2008).
“Waiver is ordinarily a question of fact.” Tenneco Inc. v. Enter. Prods. Co., 925
S.W.2d 640, 643 (Tex. 1996). “Where the facts and circumstances are admitted or
clearly established, however, the question becomes one of law.” Id.
There was no evidence presented at trial that Bayview actually intended to
waive the notice provisions. See Ulico, 262 S.W.3d at 778. As to whether Bayview
undertook “intentional conduct inconsistent with” the notice provisions, see id., the
fact that Bayview communicated with and released some information to Wariboko
in connection with payoff discussions is not inconsistent with the strictures of the
notice of foreclosure provisions. Cf. Enchilada’s Nw., Inc. v. L & S Rental Props.,
320 S.W.3d 359, 364 (Tex. App.—El Paso 2010, no pet.) (concluding that lessor’s
heated remark to lessee that he should move out was not inconsistent with lease’s
notice provision requiring 180 days’ notice before termination). Accordingly, the
evidence did not conclusively establish any waiver, and we overrule Alli’s second
issue.
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3. The evidence did not conclusively establish a promise to provide notice
of foreclosure to Wariboko
Alli argues that the “undisputed evidence” established promissory estoppel
because Bayview promised to deal with Wariboko regarding Alli’s account. He
contends that Bayview “agreed to provide any and all information to Mr.
Wariboko, and then communicated with Mr. Wariboko about the Note, provided
him with confidential information including a payoff amount, and subsequently
notified him that the foreclosure sale had occurred.” The record, however, does not
conclusively establish that Bayview promised to send notices of foreclosure to
Wariboko.
The elements of promissory estoppel are (1) a promise, (2) foreseeability of
reliance thereon by the promisor, and (3) substantial reliance by the promisee to his
detriment. English v. Fischer, 660 S.W.2d 521, 524 (Tex. 1983); Beverick v. Koch
Power, Inc., 186 S.W.3d 145, 152 (Tex. App.—Houston [1st Dist.] 2005, pet.
denied). “Promissory estoppel does not apply to a promise covered by a valid
contract between the parties; it does apply, however, to a promise outside the
contract.” Barnett v. Coppell N. Tex. Court, Ltd., 123 S.W.3d 804, 825 (Tex.
App.—Dallas 2003, pet. denied); see also Subaru of Am., Inc. v. David McDavid
Nissan, Inc., 84 S.W.3d 212, 226 (Tex. 2002) (noting that “the promissory-
estoppel doctrine presumes no contract exists”). The promise must be one “which
the promisor should reasonably expect to induce action or forbearance of a definite
12
and substantial character on the part of the promisee.” CRSS Inc. v. Runion, 992
S.W.2d 1, 6 (Tex. App.—Houston [1st Dist.] 1995, pet. denied) (quoting “Moore”
Burger, Inc. v. Phillips Petroleum Co., 492 S.W.2d 934, 937 (Tex. 1972) (quoting
RESTATEMENT OF CONTRACTS § 90 (1932))). As a corollary, the promise “must be
more than mere speculation concerning future events, a statement of hope, or an
expression of opinion, expectation, or assumption.” Comiskey v. FH Partners,
LLC, 373 S.W.3d 620, 635 (Tex. App.—Houston [14th Dist.] 2012, pet. denied).
There is no testimony or other evidence in the record that anyone promised
to Alli or Wariboko that notice of foreclosure would be sent to Wariboko. The
authorization letter is no proof because, first, it contains no promise and, second, it
represents the words of the alleged promisee rather than those of the alleged
promisor. Moreover, no one at trial testified as to any promise made concerning
notices of foreclosure that could be “reasonably expect[ed] to induce action or
forbearance of a definite and substantial character.” CRSS, 992 S.W.2d at 6.
Consequently, we overrule Alli’s third issue.
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Conclusion
We affirm the court’s judgment.
Harvey Brown
Justice
Panel consists of Chief Justice Radack and Justices Higley and Brown.
14