IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 15-20774

LSR CONSULTING, LLC,

 as Assignee of Vinay K. Karna and Mridula L. Karna, 

 Plaintiff–Appellant,

versus

WELLS FARGO BANK, N.A., 

 Defendant–Appellee.

Appeal from the United States District Court 

for the Southern District of Texas

USDC No. 4:14-CV-1337

Before KING, SMITH, and COSTA, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

LSR Consulting, LLC (“LSR”), appeals a summary judgment denying its 

wrongful-foreclosure claims and awarding attorneys’ fees to Wells Fargo Bank, 

N.A. (“Wells Fargo”). Finding no error, we affirm.

United States Court of Appeals

Fifth Circuit

FILED

August 31, 2016

Lyle W. Cayce

Clerk

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I.

In 2006, Mridula Lal Karna and Viday Karna bought real property on

Wichita Street (the “Wichita Property”) and Cleburne Street (the “Cleburne 

Property”) in Houston. The original mortgagee of the Wichita Property was 

Wells Fargo; the original mortgagee of the Cleburne Property was First 

National Bank of Arizona and/or Mortgage Electronic Registration Systems, 

Inc., as its nominee. Wells Fargo was the mortgage servicer for both loans.

The Karnas defaulted, and in 2010 Wells Fargo foreclosed. Before the 

foreclosures, the Karnas, through counsel, requested that Wells Fargo verify 

the debt as to both properties under the Fair Debt Collections Practices Act 

(“FDCPA”), 15 U.S.C. § 1692g. Wells Fargo responded but, according to LSR,

failed to provide accurate and required information.

In 2014, the Karnas assigned their alleged claims against Wells Fargo to 

their wholly owned company, LSR, agreeing to pay LSR the first $2,000 of any 

funds it collected from Wells Fargo and permitting LSR to retain the funds 

necessary to reimburse it for collection expenses, including attorneys’ fees. 

Shortly thereafter, LSR sued in state court, and Wells Fargo removed. Wells 

Fargo and the district court read LSR’s complaint as asserting causes of action

for wrongful foreclosure and violation of the FDCPA.1 After discovery and 

motion practice, the court granted summary judgment to Wells Fargo and 

awarded it attorneys’ fees, both of which LSR appeals.2

 

1 As noted below, LSR contends, for the first time in its reply brief, that it never

claimed violation of § 1692g, even though it alleged a violation of that section in its original 

complaint: “Although the Karnas specifically requested debt verification pursuant to 

15 U.S.C. § 1692g, Wells Fargo failed to provide it.”

2 LSR does not appeal the summary judgment on the FDCPA claims.

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II.

Wells Fargo is entitled to summary judgment on the wrongful-foreclosure claim because LSR cannot establish an essential element. Under Texas 

law, a party alleging wrongful foreclosure must prove a defect in the 

foreclosure-sale proceedings.3 Texas requires strict compliance with a deed of 

trust,4 including notice conditions,5 and LSR maintains that Wells Fargo did 

not notify the Karnas of its intent to accelerate the maturity of the indebtedness before acceleration and foreclosure as required by the deeds of trust.6

The district court concluded that the summary judgment evidence

refutes the Karnas’ allegations of lack of notice.

[T]he evidence in the record shows that Defendant served Plaintiff with 

Notices of Default and Intent to Foreclose for the Cleburne Property via 

certified mail on August 6, 2009, September 20, 2009, and November 14, 2009. Likewise, the evidence in the record shows that Defendant served Plaintiff with Notices of Default and Intent to Foreclose on 

the Wichita Property via certified mail on October 18, 2009 and 

 

3 Charter Nat’l Bank-Houston v. Stevens, 781 S.W.2d 368, 371 (Tex. App.—Houston 

[14th Dist.] 1989, writ denied).

4 Univ. Sav. Ass’n v. Springwoods Shopping Ctr., 644 S.W.2d 705, 706 (Tex. 1982) 

(“Texas courts have consistently held that the terms set out in a deed of trust must be strictly 

followed.”).

5 Hous. First Am. Sav. v. Musick, 650 S.W.2d 764, 768 (Tex. 1983) (“Compliance with 

the notice condition contained in the deed of trust and as prescribed by law is a prerequisite 

to the right of the trustee to make the sale.”).

6 Deeds of Trust ¶ 22:

Lender shall give notice to Borrower prior to acceleration following Borrower’s 

breach of any covenant or agreement in this Security Instrument (but not prior to 

acceleration under Section 18 unless Applicable Law provides otherwise). The notice 

shall specify: (a) the default; (b) the action required to cure the default; (c) a date, 

not less than 30 days from the date the notice is given to Borrower, by which the 

default must be cured; and (d) that failure to cure the default on or before the date 

specified in the notice will result in acceleration of the sums secured by this Security 

Instrument and sale of the Property. The notice shall further inform Borrower of 

the right to reinstate after acceleration and the right to bring a court action to assert 

the non-existence of a default or any other defense of Borrower to acceleration and 

sale.

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November 15, 2009. Additionally, the record contains prima facie evidence of Defendant’s service via the affidavit of Matthew Cunningham 

of National Default Exchange, LP on May 4, 2010 for the Wichita Property, and the affidavit of Mikey Wilkinson of Brice, Vander Linder & 

Wernick, P.C. on May 6, 2010 for the Cleburne Property. As such, the 

Court finds no genuine issue of material fact as to whether Defendant 

served Plaintiff with the required Notices of Default and Intent to Foreclose documents prior to accelerating Plaintiff’s indebtedness and proceeding with a foreclosure sale.

LSR Consulting, LLC v. Wells Fargo Bank, N.A. (S.D. Tex. Aug. 20, 2015) (citations omitted).

LSR, however, disputes the admissibility of the evidence that the district 

court relied on in concluding that Wells Fargo notified the Karnas of its intent 

to accelerate. The Notices of Default and Intent to Foreclose (the “notices”), 

LSR maintains, are inadmissible because they are not self-authenticating and 

were not authenticated by any witness testimony attached to the motions for 

summary judgment.7 They are also irrelevant, because what matters is whether the notices were sent, and there is allegedly no summary judgment evidence 

that they were. LSR regards the declarations authenticating the notices as 

inadmissible because, contrary to Local Rule 7.7 and the trial court’s Rule 4.K, 

they were not filed with or attached to the motions for summary judgment.8 

 

7 Wells Fargo apparently intended, but failed, to attach declarations authenticating 

the notices to its motions for summary judgment, which were filed on March 10 and 18, 2015, 

respectively. On March 26, 2015, Wells Fargo filed declarations by Michael Burns and Becky 

Howell. Burns’s declaration purported to authenticate the notices for the Cleburne Property; 

Howell’s declaration purported to authenticate certain documents related to the Wichita 

Property but not the notices. On April 16, 2015, Wells Fargo filed declarations by Andrea 

Kruse authenticating the notices for both properties. LSR urged that all of those declarations

were inadmissible. In deciding the motions for summary judgment, the district court relied 

on the declarations by Burns and Howell but not the late-filed declarations by Kruse.

8 S.D. Tex. Civ. R. 7.7 (“If a motion or response requires consideration of facts not 

appearing of record, proof by affidavit or other documentary evidence must be filed with the 

motion or response.”); Rule 4.K (“All exhibits (contract, leases, affidavits, etc.) referred to in 

briefs must be attached to the brief.”).

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And it urges the inadmissibility of the affidavits by Cunningham and Wilkinson because their statements regarding notice were conclusional and based on 

information and belief rather than personal knowledge.

LSR’s objections are without merit. First, it is not dispositive whether 

the notices in their current form are admissible in evidence. At the summary 

judgment stage, materials cited to support or dispute a fact need only be capable of being “presented in a form that would be admissible in evidence.” FED.

R. CIV. P. 56(c)(2). The various declarations filed by Wells Fargo demonstrate

that the notices can be presented in a form admissible in evidence. So the 

district court properly considered the notices.

Second, the court did not err in relying on the affidavits by Cunningham 

and Wilkinson. Although LSR objects that the affidavits were not based on 

personal knowledge, they contain sufficiently specific statements for the district court to infer that the affiants had personal knowledge of the facts attested therein. LSR also objects that the affidavits’ statements about the 

mailing of the notices “have a conclusory character” and that “bald assertions 

of ultimate facts are ordinarily insufficient to support summary judgment.”

Gossett v. Du-Ra-Kel Corp., 569 F.2d 869, 872 (5th Cir. 1978) (emphasis added).

Even if true, LSR’s averments do not suffice to disqualify the affidavits, 

because the affidavits’ statements do not stand alone. Wells Fargo provided 

supporting documentation.

Third, we reject LSR’s assertion that the Karnas’ testimony of nonreceipt of the notices creates a fact issue requiring trial. Paragraph fifteen of 

the deeds of trust requires only constructive notice: “Any notice to Borrower 

in connection with [the deeds of trust] shall be deemed to have been given to 

Borrower when mailed by first class mail . . . .” That paragraph is thus akin 

to Section 51.002(e) of the Texas Property Code, which defines service of 

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certain foreclosure-related notices to be “complete when the notice is deposited 

in the United States mail, postage prepaid and addressed to the debtor at the 

debtor’s last known address.”

In interpreting Section 51.002(e), Texas courts have recognized that the 

dispositive inquiry “is not receipt of notice, but, rather, service of notice.”9 For 

that reason, they have held there to be no genuine dispute as to the sending of 

notices required under Section 51.002 when the sole contravening evidence is 

the homeowner’s affidavit asserting non-receipt. Adebo, 2008 WL 2209703, 

at *4. LSR points out that in Sauceda v. GMAC Mortgage Corp., 268 S.W.3d 

135, 140 (Tex. App.—Corpus Christi 2008, no pet.), the court held that the 

homeowner’s testimony of non-receipt created a fact issue as to whether he was 

served with the statutorily required notice.10 Unlike here and in Adebo, however, in Sauceda the mortgage servicer provided no supporting documentation 

showing that it had served notice.11

Applying the reasoning in Adebo to the notice and service provisions 

under the instant deeds of trust, we can only conclude that the Karnas’ self-

 

9 Adebo v. Litton Loan Servicing, L.P., 2008 WL 2209703, at *4 (Tex. App.—Houston 

[1st Dist.] 2008, no pet.) (mem. op.); see also WMC Mortg. Corp. v. Moss, 2011 WL 2089777,

at *7 (Tex. App.—Houston [1st Dist.] 2011, no pet.) (“The purpose of notice under Section 

51.002 is to provide a minimum level of protection to the debtor, and actual receipt of the 

notice is not necessary.”); Onuwuteaka v. Cohen, 846 S.W.2d 889, 892 (Tex. App.—Houston 

[1st Dist.] 1993, writ denied) (“The general purpose of [Section 51.002] is to provide a minimum level of protection for the debtor, and it provides for only constructive notice of the foreclosure.” (emphasis added)).

10 In addition, LSR cites Coleman v. Wells Fargo Bank, No. 09-03-598 CV, 2004 WL 

2750240 (Tex. App.—Beaumont 2004, no pet.) (per curiam) (mem. op.), holding that by filing 

two affidavits averring non-receipt of the notice required by Section 51.002(d), the homeowner had raised a question of material fact defeating summary judgment. The Coleman

court, however, ignored Section 51.002(e). So it is not directly relevant.

11 The record in Saucedo contained two notices sent by the mortgage servicer and 

received by the homeowner, but those notices failed to comply with all the statutory requirements or the notice requirements in the deed of trust.

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serving protestations of non-receipt of notice do not create a genuine dispute 

as to whether Wells Fargo mailed notices of intent to accelerate. We thus 

affirm summary judgment on the wrongful-foreclosure claims.

III.

Under the FDCPA, a court may award the defendant attorneys’ fees 

upon “a finding by the court that an action under this section was brought in 

bad faith and for the purpose of harassment.” 15 U.S.C. § 1692k(a)(3). The 

district court made the requisite factual finding. But LSR contends that, as a 

matter of law, the evidence is insufficient to support that finding.

The court did not abuse its discretion in finding that LSR brought its 

FDCPA claim in bad faith and for the purpose of harassment.12 The provision 

that LSR alleges Wells Fargo violated applies only to debt collectors. But the 

plain language of the FDCPA makes clear that a debt collector does not include 

entities such as Wells Fargo, which do not have as their principal purpose “the 

collection of any debts” and which do not “regularly collect[] or attempt[] to 

collect, directly or indirectly, debts owed or due or asserted to be owed or due 

another.” 15 U.S.C. § 1692a(6). “The legislative history . . . indicates conclusively that a debt collector does not include . . . a mortgage servicing company 

. . . .”13 LSR sued Wells Fargo just days before the four-year statute of limitations was set to expire with respect to the properties and has also sued 

numerous other lenders in connection with four other properties under the 

same theory, likewise just days before the running of limitations. LSR, 

moreover, is merely the assignee of claims with regard to the properties. The 

 

12 See Perry v. Stewart Title Co., 756 F.2d 1197, 1211 (5th Cir.), modified on other 

grounds, 761 F.2d 237 (5th Cir. 1985) (reviewing § 1692k(a)(3) attorneys’ fee determination 

for an abuse of discretion). 

13 Id. at 1208.

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original holders of the claims are LSR’s principals, the Karnas, who, it could 

be inferred, assigned their claim solely to limit their personal liability, should 

Wells Fargo refuse to settle. Under these circumstances, there is no abuse of 

discretion in imposing attorneys’ fees.

In its reply brief, LSR says that Wells Fargo is not entitled to attorneys’ 

fees under § 1692k because it never asserted a claim against Wells Fargo under 

the FDCPA. Because LSR failed to raise that argument in its initial brief on 

appeal, it has been waived. See Flex Frac Logistics, L.L.C. v. N.L.R.B., 746 

F.3d 205, 208 (5th Cir. 2014).

AFFIRMED.

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