1 

## NO. 12

- 20

- 00022

- CV

IN THE COUR T OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT
TYLER, TEXAS

TERESA GRAHAM , APPELLANT

V.
DITECH FINANCIAL, LLC , AURORA CAMPOS, JONATHAN HARR ISON, MARKCOS PINEDA, RAMIRO CUEVAS, PATRICK ZWIERS, KRISTOPHER HOLUB, RANDY DANIEL, CINDY DANIEL, JIM O'BRYANT, SHARON ST. P IERRE, ROBERT LAMONT, SHERYL LAMONT, HARRIETT FLETCHER, DAVID SIMS AND SHAWN SCHILLER , APPELLEE S §

§

§ APPEAL FROM THE 173 RD

JUDI CIAL D ISTRICT COURT

HENDERSON COUNTY, TEXAS

MEMORANDUM OPINION
Tere sa Graham appeals from a summary judgment granted in favo r of Ditech Financial
L L C , Aurora Campos, Jonath an Harr ison, Markcos Pineda, Ramiro Cuevas, Patrick Zwi ers, Kristopher Holub, Randy Daniel, Cindy D a ni el, Jim O ’ Bryant, Sharo n St. Pierre, Robert
L a mont, Sheryl Lamont, Harriett Fletcher, D a vid Sims, and Shawn Schiller (collectively Ditech)

. In two issues, she contends she was not given proper pre

- foreclosure notice and the trial court erred in failing to determine the amount of the remainin g mortgage bal ance . We a ffirm.

B ACKGROUND In 2004, Graham purchased a house, executing a note in the amount of $63,000, secured by a deed of trust . Beginning January 201 4, Graham stopped making her monthly payments on
the note. The house was destr oyed b y f ire in July 2015. Dit ech, the current h older of t he note,2 sent Graham a notice of default by certified mail, dated October 20, 2015 , giving her thirty days
to cure the default, a nd warning that otherwise the lo an would be accelerat ed with full pa yment due. In April 2016, Grah am ’ s insurance company, Te xas Farm Bureau, sent a ch eck to Ditech for $40,603, the amount it believed to be the pay

- off amount. Ditech did not ap ply the insurance
funds to Grah am ’ s account. On June 15, 2016, Ditech sent Gra ham a notice of acceleration of her loan advising her th a t a foreclosure sale would take place on August 2, 2016. This sale did

not occur

. On August 7 , 2017, Ditech sent a sec ond notice of acceleration advising her that the
foreclosure sale would be held on Se ptember 5, 2017. In resp onse, Graham filed suit to enjoin
the sale. She asserted a cause of action for breach of contract, alleging that Ditech failed to provi de the not ice required by the deed of trust

. Because Ditech fai l ed to credit her account with the insurance proceeds , G raham requested a declarat ory jud gment stating the remaining loan
balance , if any.
Ditech moved for s ummary judgment asserting that it complied wi th all n otice requirem ents and that it app lied all payments it received to the note. After a hea ring, the trial court granted t he moti on , ordered that Grah am take nothing , and dismissed her claims.

S UMMARY J UDGMENT In her first issue, Graham asserts the trial court erred in granting summary judgment for
Ditech because she ra ised a fact is sue as to whethe r she receive d the required notice . She argues
that , although Ditech sent a notice of default and intent to accelerate in October 2015 , Ditech
abandoned the foreclosure process as evidenced by its failure to conduct the sched uled August
20 16 foreclosure sa le. Therefore, Graham con tends, the 2015 notice of defa ult and intent to
accelerate cannot act as notice with respect to the second notice of acce lerati on and foreclosure
which Ditech sent in 2017

. She asse r t s that Ditech w a s required to send a new notic e of default
and intent to accele rate be fore the 2017 notice of accel eration and foreclosure

. Standard of Review
We review the trial court ’ s de cision to grant summary judgment de novo. Tex. Mun. Power Agency v. Pub. Util. C omm ’ n , 253 S.W .3d 184, 192 (Tex . 2007). The movan t for

t raditio nal summary judgment has the bu rden of showing that there is no genuine issue of material fact concerning one or more es sential elements of the plaintiff ’ s claims and that it is entitled to ju dgment as a ma tter of law. T E X

. R. C IV

. P. 166a (c) ; M .D. Anders on Hosp. and3 Tumor Inst. v . Willrich , 28 S.W.3d 22, 23 (Tex. 2000) (per curia m)

. Once the movant has established a righ t to summary judgment, the nonmovant has the burden to respond to the mo ti o n and pres e nt to the trial court any issu es that would preclude sum m ary ju dgment

. Id

. Review of a summary j udgment requires t he evidence be viewed in the light most favorable to t he

nonmovant. Shell Oil Co. v. Writt , 464 S.W.3d 650, 654 (Tex. 2015). In reviewing the record ,

we indulge every r easonable inference in fav or of t he nonmovant and r e solve any doubts in favor
of the non movant. Id

. A nalysis Graham ’ s breac h of contract cl aim is based on an alleged violation of paragraph 22 of the
Deed of Trus t. C omplain i n g of the lengthy time period b etween the or iginal planne d for e closure

pro cess of October 2015 and the second schedul ed fore closure sale of September 2017 , Graham argues t hat Ditech was required to sen d a second notice of default and intent t o accelerate.
The Deed of Trust requi r es al l notices in connection wi th the security instrument be in writing. Further, it provides that any notice to Borrower “ shall be deemed to ha ve been giv en to Borrower when mailed by first c l a ss mail or when actual ly delivered t o B orrower ’ s notice
address if sent by other means. ” Re garding accelerat ion, the Deed of Trust provide s as follows:

22. Acceleration; Remedies. Lender s hall give notic e to Bor r ower prior to acceleration following Borrower ’ s breach of any co venant or a g r e ement in this Security Instrum ent . . . . The notice sha ll 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 cu red; and (d) t hat failure to cure the defaul t on or before the date sp ecified in the notice will result in acceleration of the sums secured by this Security Instrument and sale of the Pr operty . . . . If the default is not cured on or before the date specif ied in the

no t ice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further de mand and may invoke the power of sale a n d any ot her remedies permitted by Applicable Law. If Lender invokes the power of sal e , Lender or Trustee shall give notice of the time, place and terms of sale by posting and filing the notice at least 21 days prior to sale as provided by Applica ble Law.

As summary judgment evidence, Dit ech presented a copy of the 2015 notic e of default

e xplaining that Graham was in default for failure to submit monthly payments due Janua ry 2014
thr ough Oc tober 2015, giving her thirty days to cure the default, and warni ng her that if she fails to cure within thirty days “ the maturity o f the l oan is accele r ated and full payment of all amounts
due under the loan agreement is required without further notice from [Ditech]. ” Ditech also4 submitted an affidavit of a Ditech emp l o yee , Francisco Fontes, attesting to the fact that Graham was provided wi th a notice o f default and an opportuni ty to cure her default on October 20, 2015 , sent by certifie d ma il

. Fontes stated that Graham did not cure her default an d a notice of
acceler ation was sent to her on August 7, 2017. An exhibit to the affidavit show s that, as of August 21, 2017, the tota l amount needed to pay off the note was $62,681.76. I t also shows that , of that total, the unpaid principal balance owed was $40,603.
The inte rpretation of a deed of trust is governed by the same rules applied to con tracts.
Fin. Freedom S enior Funding Corp. v. Horrocks , 294 S.W.3d 7 49, 753 (Tex. App.

― Houston [14 th Dist.] 2009, no pet.). In constr u ing a written contract, the primary concern of the court is

t o ascertain the true intentions of the parties as expressed in the instrum ent

. Va lence Operating
Co. v. Dor sett , 164 S. W.3d 656, 662 (Tex. 2005). Contract terms are given their plain, ordinary , and generally accepted meanings unless the contract itself shows them to be used in a technical
or different sen se. Id

. The essentia l elemen ts of a breac h of contract claim are (1) the existen ce of a vali d contract; (2) performance or tendered performance by t he plaintiff; (3) breach of the

c ontract by the defendant; and (4) damages sustained as a result of the breach. S ee B & W Suppl y, Inc. v. Beckman , 305 S.W.3d 10, 16 (Tex. App.

― Houston [1 st Dist.] 2009, pet. denied).
The D eed of Trust required written notice of default “ pr ior to acceleration. ” It does not specify how far in ad vance of accel eration is acceptable or identify a tim e that i s too far in
advance. The D e ed of Trust provides that the notice will specify a date b y which Graham must

cure the default, and if she does not do so by that date, Dit ech may require immediate payme nt in
full “ without further demand , ” and may invo ke its r emedy of foreclosure. The Deed of Trust did not require Ditech to send another notice of de fault. See Stoker v. Select Portfolio Servicing,
Inc. , No. 3:19

- cv
- 00909

- N

- BT, 2020 WL 1427036, at *4 (N.D. Tex. Mar

. 5, 2020 )

. The record

s hows that the notice of default was sent in co mpliance with th e terms of the Deed of T rust

. Accordingly, Ditech me t its burden to prove entitlement to judgment as a matter of law on Graham ’ s breach of contract claim

. See Willrich , 28 S.W.3d at 23.
Graha m contends that Ditech ’ s actions were inconsist ent with foreclo sure , indi cating that
it abandoned the foreclosure process that it began in 2015. She b ases this a rgument on the fact that Ditech did not follow through with the foreclosure sale scheduled for August 2016 an d, although it acknowledged rece ipt of the insur ance payme nt, it continu ed to charge her inter est5 and other fees and send her statements

. Abandonment, she contends, required Ditech to send her
a new notice of default and intent to foreclose. Thus, Graham contends th ere is a n issue of

m aterial fact as to whe ther Ditech compli ed with the notice provisions of the Deed of Trust.
A note holder who exercises its option to accelerate may later abandon acceleration and

re turn the contract to its ori ginal terms

. See Khan v. GBAK Props., Inc. , 3 71 S.W.3d 347 , 3 53 (Tex. A pp. ― Houston [1 st Dist.] 20 12, no pet.)

. The holder may provide notice to the borrower
that expressly states it is abandoning the acc eleration. See T EX

. C IV

. P RAC

. & R EM

. C ODE A NN

. § 16.038 (West S upp. 2020 ). In the absence of a n express notice of rescission of acceleration, the lender may show abandonment of acceleration by conduct. Pitts v. Bank of New Yo rk
Mellon Trust Co. , 583 S.W.3d 258, 262 (Tex. App.

― Dallas 2018, no pet.) (op. on reh ’ g)

. T he
issue o f abandonment of accel eration is base d o n tradition al principl es of wai ver. See i d ; Denbina v. City of Hurst , 516 S.W.2d 460, 463 (Tex. Civ. App.

― Tyler 1974, no writ). The elements of waiver are (1) an existing right, benefit , or advantag e held by a party; (2) the party ’ s actual knowledge o f its existence; and (3) the party ’ s actual intent to relinquish the right, or
intentional conduct inconsi stent with this right. See Denbina , 5 16 S.W. 2 d at 463. Waiver can occur either expressl y, through a c le ar repudiat ion of the right , or impliedly. Se e G.T. Leach
Bu ilders, LLC v. Sapphire V.P., L.P. , 458 S.W.3d 502, 511 (Tex. 2015).
The October 20, 2015 notice of default explained that Graham could cure the default by payi ng $12,053.16 withi n thir ty days and, if she did so, she could continue with the contract a s thou gh she did not default

. It went on to explain that if she did not cure the de fault within thirty days, Ditech “ may exercise any or all of [its] remedies pr ovided by law and in [ Graham ’ s] Note , ” including “ foreclosure on the real property s ecuring the loan

. ” A March 2, 2017 letter from
Ditech ’ s representative, Sterling Claims Management , to Texas Farm Bureau acknowledged

rec eipt of the check for $40,603, stating that amount repre sents the unpa id principal balance of
the l oan. The let ter ex plained that $40 ,603 is not the total debt

. The total amount due as of that
date was $60,952.66 , which inclu des additional fu nds due and owing

. The August 7, 2017 notice of maturity and accele ration decla re d “ the entire balance o f the loan due and payabl e in ful l. ”
Dit ech presented records contain ing the payoff calculation, and on August 21, 2017 it was $62,681.76. The notice of default, letter regarding the insu rance proceeds , and notice of
acceleration c ontain la nguage evidencing an existi ng right, Di tech ’ s knowledge of that right, and
an intent to retain th e right to accelerate. See Denbina , 5 16 S.W. 2 d at 4 6 3

. The evidence6 conclusively es tablished that Ditech did not intend to abandon acc eleration, and it did not engage in any condu ct inconsistent w ith its right to a ccelerate the note ’ s maturity date. Graham did not raise a fact issue regarding abandonment of acce leration. See Willrich , 28 S.W.3d at 23. We
overrule Graham ’ s first issue.

D ECLARATORY J UDGMENT In her second issue, Gr aham conte nds th e trial court erred in failing to consider her request for declaratory judgment to determine the amount , if any, of the remaining mortgage
balance

. She complains that she was never given credit for the April 2016 payment made on her
behalf by Texas Farm B ureau. Once credit ed with that payment, her argument continues, the

amount owed , if an y, will be only a small fraction of what Ditech is claiming. A person interested under a written contract , whose rig hts a re affected , may have
determine d any question o f construction or validity arising under the instrument and ob tain a
declaration of ri ghts, status, or other legal relations thereunder. T EX

. C IV

. P RAC

. & R EM

. C ODE A

NN

. § 37.004 (West 2020 ). A declaratory j udgment is appropriate only if a justiciable

co ntroversy exists concerning the rights and status of the parties and the contr oversy will be resolved by the declaration sought. See Bonham State Bank v. Beadle , 907 S.W.2d 465, 467 (Tex. 1995). The court ma y refuse to render or enter a declaratory judgm ent or decree if the judgment or decree would not terminate the uncertainty or controversy giving rise to the proceeding. T EX

. C IV

. P RAC

. & R EM

. C ODE A NN

. § 37.008. The entry of a declaratory j udgment

res ts within the sound discretion of the trial court. See Wheelbarger v. Landing Council of Co

Owners , 471 S.W.3d 875, 894 (Tex. App.

― Houston [1 st Dist.] 2015, pet. denied). The controversy giving rise to this lawsuit involved Ditech ’ s authority to foreclose.
Graham sued Ditech to stop the foreclosure sale based on her argument that she di d not receive proper notice

. The amount she ow es on the note , if any, is not relevant to the question of whether Ditech is entitled to proceed with the foreclosure. In other words , there is not a current

contro versy in volving the amount owed. See Beadle , 907 S.W.2d at 467. Moreover, the amount , if any, that Graham will owe is speculative at this point. T here is

a st atutory scheme anticipating litigation to determine the amount owed, to be instituted after the
foreclosure sale. See T EX

. P ROP

. C ODE A NN

. § 51.003 (West 2014)

.7 T he D eed of T rust provid es that , i f the lender acquires the property under Section 22 or otherwise, Graham must assign to the lender her rights t o any insurance proceeds in an amount not to exceed the amounts unpaid under the note. Thus, Ditech has a contractual right t o apply

t he insurance proceeds to the amount of the note. This right is applied in conjunction with a foreclosure sale, if pursued by the lender.
A foreclosure under a deed of trust has th e effect of reducing the indebtedness owed by the mortgagor by the amount pa id for the property at foreclosure. See Peacock Hospitality, Inc.
v. Ass ’ n Cas

. Ins. Co. , 419 S.W.3d 649, 653 (Tex. App.

― San Antonio 2013, no pet.). If the foreclosure fully satisfies the mortgage debt , the mortgagee no longer h as a right to any of the
i nsurance proceeds paid for a pre

- foreclosure loss. Id . If a deficiency remains following the foreclosure, the mortgagee retains a right, but only to the amount of the insur ance proceeds necessary to satisfy the deficiency. Id

. After the foreclosure sal e, if Ditech does not receive an

amount s ufficient to satisfy t he debt, Ditech may sue Graham for a deficiency judgment. See
T EX

. P ROP

. C ODE A NN

. § 51.003(a)

. During the deficiency suit, the am ount of the de fic iency , if

any, will be determined. See T EX

. P ROP

. C ODE A NN

. § 51.003; PlainsCapital Bank v. Mart in , 459 S.W.3d 550, 555 (Tex. 2015) ; see also Moayedi v. Interstate 35/Chisam Rd., L.P. , 438 S.W.3d 1, 4 (Tex. 2014) ( The deficiency judgme nt is based on “ the amount of the note, interest
and attorney ’ s fees, less the amount received at the tru stee sale and other legitimate credits. ” ).
I t is currently only speculation that the foreclo sure sale would result in an amount
in sufficient to cover the defi ciency. It is only after the foreclosu re sale , and aft er the insurance proceeds are appropriately ap plied, that the court can determine the amount Graham owes. Courts may not make declarati ons on matters based on speculative, h y pothetical , or contingent
situations. See Limon v. State , 947 S.W .2d 620, 624 (T ex. App.

― Austin 1997, no writ ). The
trial court did not abuse its discretion in d ismiss ing Graham ’ s claim for a decla ratory judgment.
We ov errule Graham ’ s second issue.

D ISPOSITION Having overruled both of Graham ’ s issues, we affirm the trial court ’ s judgment.

J AMES T. W ORTHEN Chief Justice8 Opinion delivered Mar ch 31 , 2021. Panel cons isted of Worthen , C.J., Ho yl e , J., and Neeley, J

.9 

## COURT OF APPEALS

TWELFTH COURT OF A PPEALS DIS TRICT OF TEXAS

JUDGMENT

MAR CH 31 , 2021

NO. 12

- 20

- 00022

- CV

TERESA GRAHAM , Appell ant V. DITECH FINANC IAL, LLC , AUROR A CAMPOS, J O NATHAN HAR RISON, MAR KCOS PINEDA, RAMIRO CUEVAS, PATRICK ZWIERS, KRISTOPHER HOLUB, RANDY DANIEL, CINDY DANIEL, JIM O'BRYANT, SHARON ST. PIERRE, ROBERT LAMONT, SHERYL LAMONT, HARRIETT FLETCHER, DAVID SIMS AND S HAWN SCHILLER , Appel lee s

Appeal fro m the 173r d D istric t C ourt of H enderson County, Texas (Tr.Ct.No. CV17

- 0420

- 173 )

THIS CAUSE came to be heard on t he appe l late record and briefs filed here in, and the same being considered, it is the opin ion of this court that there was no error in the judgment. It is therefore ORDERED, ADJUDGED and DECREED that the judgment of the court below be in all things affirmed , and t hat all costs of this appeal are hereby adjudged against the appellant, TERESA GRAHA M , for which exe cution may issue, and that th is decision be certified to the court below for obser va n ce. James T. Worthen , Chief Justice

. Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J

.