i think the villareal case takes what the texas supreme court intended to be a general rule and elevates it into an absolute rule when do the exceptions to the rule first get presented to the dish in court but if i look at the time reconsideration i would i think so the reason why these issues got compressed into the tail end post is that the texas supreme court opinion in dobbins and th nonetheless the party certainly the point of certainly raised the issue that there was no material breach in unquestionably the plaintiffs raised the issue that a party says the fault does before the district court at the time of the district court originally denied the defendant's motion for summary judgment and granted our motion for summary judgment the bill reality issue came up for the first time when the defendants raised it what the texas supreme court emphasizes that a party who has substantially performed cannot be in material breach of that contract since bobbins the texas supreme court on multiple occasions most notably since it was right in a motion for reconsideration i guess two questions one what's your best case that the district court was obligated that point to consider the motion for reconsideration and to assuming that he was required to w motion for reconsideration that raised the villareal issue for the first time that the district court then on that issued a completely different result and the effect of the district court district work missed was so late in wells fargo standalone motion for summary judgment so the issue that the district court missed only went to wells fargo specific issues on that contract provisions that specify a remedy for default are enforceable even after a material br three fifty six out west third fifty four but courts both in tennessee gas and gold look was dealt with a situation where the property owners material breach of a construction contract that our exclusive remedy is a wrongful foreclosure kleinman and candidly they've identified no case that says that out in texas cases of help to the contra texas cases of explicitly recognize that a plaintive in our shoes can wells fargo to provide correct addresses which wells fargo knew were to be used for the purposes of foreclosure notice wells fargo provided incorrect addresses it was reasonably foreseeable the wells far those incorrect addresses would proximately cause injury to someone who otherwise might have been able to respond to the foreclosure notice and that caused a property loss  in performing its agreement with fannie mae there's a cause of action then by the way the that's correct specifically in chapman custom homes the texas supreme court ruled that the negligence in the negligent performance of a contract between these two if then proximately causes damages to a non contracting may please the court counsel my name is paul simon and i represent fannie mae during my time today i'm going to discuss the following points first is it the notice of default and notice of the closure were good as a matter of law permitting i want to talk about the tax credits and why the recapture of those tax credits are an improper measure of damages as a matter of the law judge when you raise the issue in a very secure question what's the standard of review for judge harmon's decision to essentially reverse course and grant the motion to reconsider a she i think the standard for her decision to do that is abuse of discretion she had planned every power during that time there was no judgments just self appointed out and i think the judge does two things which are i think significant and fatal to the appellants arguments first it states where the notices of default and foreclosure must be sent and that's to an address on good way effectively changed that notice section thirty one of the trust says if you want to change your address you can do that but the way you do it what about section forty one i think forty three forty three i think it honor i think i think that in a place with section thirty one section forty three says you're going to go by whatever's in your records and i think what you have to do is remember that as courts are required to do one we're looking at two provisions of the same contract in conjunction with section thirty one section thirty one says here's your address if you want to change it provided in writing to the lender if it's if it's the bar or the lender can provide it to a farmer if it's the if it's the lender the borrowers required to change it  writing and imagine the problem that the lender faces if we're going with verbal changes or other forms of change that perhaps there's a legitimate reason why the property manager wants to get some notices and not others that's the problem in this just find it a little order except at forty three years of the be all end all and where the address is to be found well and the problem would be this if we had sent it to the addresses which they now claim are the proper addresses the p o box in the britain or address they could just as easily argue hey we never changed our address in accord to section thirty one why are you sending it there you should have been sending it to the would waitress the lender needs a bright line that says look this is where we're going to send notices of default foreclosure and you read forty three to say it's the most recent address which would be the deed of trust address because the deed of trust the has the actual address unless it's modified in accordance with the trust which forty three says the most recent address according to the lenders record didn't say one particular document it says look at the lenders records what's in there what's the most recent address from the borrower and so if something hasn't been changed in a certain way but the say in substance that if there is a deed of trust that says here is how you're supposed to change the address then that controls over the property code and in kane or the borrower controls of the property code which has a similar notice provision about right the last in here which you said you know over the property which has a similar language about the last address according to lenders records very similar to what forty three says and cares is look at that's what your do trust says that you're supposed to change it in writing then mr  change it in accordance with your deed of trust therefore the notices weren't defective and that's that's essentially what we've got going on here the party claiming that it complied with the deed of trust i think it was their burden to prove cases and this law case that they did in fact comply with chapter thirty per section thirty one as the action court said which we said in our brief is commercially unworkable when we've got in this case for addresses that we had to give notice to the two principles well it wasn't material and they essentially cite their performance for nine years on the loan that they made nine years or ten years of payments on a loan that has nothing to do a substantial performance matador first post cases substantial performances when you basically completed the contract not that you've been doing it for a long time and this case read a three and a half million dollar loan that still had more than three million dollars owed on it at the time of default we know it's a material  fault because of the remedies that the d of trust and provide for they provide for excel aeration without prior notice they provide that there is no cure for a pain to fall and they provide for the remedy of foreclosure and so when appellant says well we substantially performed i don't think substantial performance has any business in this case the lender says i'm giving it three and a half million dollars as a loan and the deal is that the bar was going to pay that back pursuant to a schedule with interest and when it fails to make three or four monthly payments on purpose for the purpose of some internal politics that were going on with the borrower that is a material breach the borrower knew about it and the provide for that just how but i think you brought up the question about independent independent promises in this kind of goes to what we're talking about with section forty three of section thirty one i think where they've got this wrong is that the  promises the dependent promises are borrower says i'll change my address in accordance with section thirty one and then if i do that then the lender has an obligation under section forty three to provide the notice to that address and  three could easily have said i don't spend too much time on this point i'm sure of it but it does seem to me section forty three if that's what it means considerably is it the most recently draft as it was presented section three one but it did say that it said more generally the lenders records and there was a more recent address but but really there are other issues to cover this may not be your winning issues you may need to cover some of the others well i just want to point out what i thought when i started to reference earlier was that borrower is is engaging in here puts the lender in the untenable position of trying to guess where am i supposed to send this to am i supposed to send to this address or to that address i've got four people have to put on notice i've got four addresses for one individual two or three for another individual it shouldn't be that type of guesswork and that's what the action court says the final thing that i'd like to cover is this idea of whether there is a contractual right in this context of a wrongful foreclosure case and i'm not aware of the law and i start this way wells fargo the villa payment whether that's an element of the borrowers claim to prove a breach of contract or whether that's a defense that needs to be played by the defendant if the borrower doesn't make a payment it cannot sue for breach  contract that's what the villareal case held that's what the chile case held and there is another case payne vs wells fargo which is a summary judgment case and judge when you're also on that  all three of these cases two involve the six contacts one a summary judgment say in substance the same thing a failure to make a payment is a material breach and if you're in material breach of your own contract you can't then sue for breach of contract and i think the one thing the judge i want also pointed out is that this is really more of a wrongful foreclosure case if that's what they wanted to do there's a policy point out they can't get there because what they're trying to claim which are these low income housing tax credits as their damages and that's the final point that i'm going to talk about is the loan from having tax rates there is no case that i could find that their policy could find which talk about low income housing tax rates as being a remedy for damages in a wrongful foreclosure type of case whether it's under a bridge contracting wrongful closure heading or any other kind of it would be as a sort of a conceptual i think it does there's there's a new standards how to stop what you're saying there's also another law they lost a tax credit and that's the damages are seeking but they're going to lose them with a proper foreclosure so how does that that's what i'm asking how does that fit in under causation well and not to deflect from your question the big they're not really suing for the tax credits themselves the loss of those they're suing for the recapture of those credits which were used by fannie mae and then repaid by fann purchase those tax credit for reduced price because they're a dollar for dollar credit so everybody kind of won and the borrower sold that stuff or signed that to fannie mae alternately so that's the problem with their recapture argument as damages because it would be like selling real or personal property once you've sold it or signed it to somebody else and nothing becomes damaged or lost or destroyed through that negligence or breach of contract or whatever by somebody else original owner can't come back and say well i get the damages on that thing they were got in their benefit when they sold these tax credits at the beginning of the transaction and as your honor points out there is a competition for them because they're still going to be in default there's also a ready willing and able problem that council didn't address they do in their brief which is because of the acceleration they would have had to come up with a three and a half million dollars or three million dollars plus to pay that accelerated debt if they weren't able to do that the poor closure still would've gone through and i could see to your honor's causation problem is at some point or another they were going to lose this property and it was once they lost the property that they would lose the right to claim those tax rates for example they weren't credits there is no evidence in addition to i think that it's an improper measure of damages the l a h d c there is also no evidence that any tax credit recapture was paid by any  all they said is look there's a million seven approximately of tax credits that we received which we then signed out and we think we can do what we want to internally with those which they can't but there's no evidence that they actually paid them so they're actually asking for damages for something that they didn't suffer a loss that they didn't actually suffer and with that i see my time is up  as causation you could look at it is it too remote to be the thing of a wrongful foreclosure claim there's a lot of reasons that the debtors should not be suing for lost tax credits when there's been a foreclosure there's a lot of ways to go and i think the real reason juggling in the show we cases you're always on the court had no trouble saying there we see no texas case which says failure to strictly comply with the foreclosure requirements in the deed of trust to me the overview for wells fargo was all about legal duty to whom did we owe whatever duties we were in this whole scenario for we were in the service sure we operated for th reason to say we have a duty is the texas property code which deals with foreclosures you could read that for long and the only thing in there about loan servicers doing anything for the borrower is if th that's the only thing in the property code that puts a legal duty on the loans or person period payers so for negligence we own a legal duty the cases said struggle with the contoured theories that were going on in texas forever how do we know which a contract claim or tort calling we can look at is legal duty another analysis is the economic loss rule and we're dealing with porch if all you have here are the same damages against wells fargo for negligence that you have against fein made for breach of the needed trust that's an economic loss he cites to check in case but the chapman cases you have to have personal injury or property amish losing the economic value of your tax credits is not a property d tax credit that's all they're asking for that's a purely economic laws there should be  even on the defendant's brief on this in this appeal nor have the defendants ever made an argument about the remoteness of dams their argument on damages is so laid out from their point of view swiss community did not suffer  and the district court roundly rejected that argument they lost on that argument the district court explained at length that the proper point of on those damages with swiss communities was community as the partnership suffered the damages ultimately the damages may flow to individual partners but under texas law it's the partnership that suffers the damocles counsel for fannie mae begins with another argument that the district court roundly rejected and that's the argument that the defendants properly complied with the notice requirements for foreclosure the simple fact is that section forty three says what it says and there's no question none at all from the evidence that for a period of over ten years both wells fargo and were delivering in notices and bills and statements properly to the plaintiffs at their p o box address where their written words they certainly knew that those had dresses were the most recent addresses for swiss community to argue now that somehow the law hampers the amount or puts them in a difficult position is just contrary to the evidence in the case that shows that they knew exactly where to send notices in did sue over a period of years up to the point where they finally sent a notice of foreclosure to the long pause counsel for again though the defendants didn't make that argument in the district court nor did the district court so far the defendant's argument was purely and simply district court look a villareal says that default standing alone means that the plaintiff can't sue for breach of contract and that's what the district court did not do so counsel for wells fargo argues that the fact that the plaintiffs are seeking the same damage lose on both the original contract claimant and on their to necessarily means that those damages bring the negligence claim within the economic loss rule but simply not true but it's not texas law texas law asks the question of whether the tort damages or independen consequential damages they don't stem from the contract itself that's what makes them potentially recoverable not just on a contract claim but also on that what was being said about tampa was personal injury or property damage not losing money and i'm not saying that's true you have responses that really would have it says no my response is this court has already determined what