Court Opinion

ID: 1037727
Source: CourtListenerOpinion
Date Created: 2013-08-16 05:11:43.528352+00
Date Added: 2024-06-11T12:46:47.520389
License: Public Domain

Case: 12-40895         Document: 00512343097          Page: 1    Date Filed: 08/15/2013

            IN THE UNITED STATES COURT OF APPEALS
                     FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                     Fifth Circuit

                                                                               FILED
                                                                            August 15, 2013
                                         No. 12-40895
                                                                             Lyle W. Cayce
                                                                                  Clerk
ADRIAN VERDIN,

                                      Plaintiff—Appellant,
v.

FEDERAL NATIONAL MORTGAGE ASSOCIATION; WELLS FARGO BANK,
N.A.,

                                      Defendants—Appellees.

                      Appeal from the United States District Court
                           for the Eastern District of Texas
                                USDC No. 4:10-CV-590

Before ELROD and HIGGINSON, Circuit Judges, and MARTINEZ, District
Judge.*
PER CURIAM:**
       Wells Fargo Bank, N.A. (“Wells Fargo”) foreclosed on Adrian Verdin’s
home and sold it to the Federal National Mortgage Association (“Fannie Mae”).
Verdin sued Wells Fargo and Fannie Mae (“Defendants”) alleging various state-
law causes of action. The district court granted Defendants’ Rule 12(b)(6) motion

       *
           District Judge of the Western District of Texas, sitting by designation.
       **
         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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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.
    Case: 12-40895     Document: 00512343097     Page: 2   Date Filed: 08/15/2013

                                  No. 12-40895

on Verdin’s negligent-misrepresentation and gross-negligence claims and
granted Defendants’ motion for summary judgment on Verdin’s remaining
claims. We AFFIRM.
                                        I.
      Wells Fargo extended Verdin a loan for the purchase of a Plano, Texas
residence (the “Property”). The loan was evidenced by a fixed-rate note (the
“Note”) and secured by a deed of trust (jointly referred to as the “Loan
Agreement”). Verdin defaulted on the Note when he did not make the required
payments for March and April of 2010. Wells Fargo mailed Verdin notice of his
default, but he neither cured his default nor made the May and June payments.
Wells Fargo accelerated the Note and scheduled a foreclosure sale on August 3,
2010. In early July, Wells Fargo informed Verdin that he could reinstate the
Note by paying $21,371, the total amount due and owing at that time.
      On July 27, exactly one-week prior to the scheduled foreclosure sale,
Verdin called Wells Fargo to discuss his options. Verdin alleges that during this
conversation, he requested the amount needed to reinstate the Note and
explained that he found a potential buyer willing to purchase the Property.
According to Verdin, Wells Fargo responded by telling him “not to worry about
the foreclosure” and to submit a request for postponement of the foreclosure sale.
Wells Fargo received Verdin’s request for postponement on July 30. In it, Verdin
requested that Wells Fargo “stop the foreclosure procedures so that [he could]
pursue the sale of the [Property].” On August 2, Verdin called Wells Fargo to
inquire about the status of the foreclosure sale. Wells Fargo told him that the
sale had not been postponed.

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                                       No. 12-40895

      Approximately forty minutes before the scheduled foreclosure sale on
August 3, Verdin called Wells Fargo to ask if the foreclosure sale had been
postponed. Wells Fargo informed Verdin that, to postpone the sale, he must
produce proof of payoff funds totaling exactly $22,179.68, the current amount
due and owing on the Note. Verdin did not produce the required proof of payoff
funds, and Wells Fargo sold the Property to Fannie Mae.
      Verdin sued Defendants in Texas state court, and Defendants removed the
case to the United States District Court for the Eastern District of Texas. The
district court dismissed Verdin’s negligent-misrepresentation and gross-
negligence1 claims under Federal Rule of Civil Procedure 12(b)(6). The district
court also granted Defendants’ motion for summary judgment on Verdin’s claims
for breach of contract, anticipatory breach of contract, unreasonable collection
efforts, violations of the Texas Debt Collection Act (“TDCA”), quiet title, and
trespass to try title. Verdin timely filed a notice of appeal.
                                             II.
      We review de novo the district court’s order granting Defendants’ Rule
12(b)(6) motion on Verdin’s negligent-misrepresentation claim.                     Torch
Liquidating Trust ex rel. Bridge Assocs. L.L.C. v. Stockstill, 561 F.3d 377, 384
(5th Cir. 2009) (citation omitted). To prove a negligent-misrepresentation claim
in Texas, Verdin must establish, inter alia, that Defendants supplied him with
“false information” and that he suffered pecuniary loss in reliance on that
information. Horizon Shipbuilding, Inc. v. BLyn II Holding, L.L.C., 324 S.W.3d
840, 850 (Tex. App.—Houston [14th Dist.] 2010, no pet.) (citation omitted).
Here, Verdin failed to plead facts establishing either element.

      1
          Verdin did not pursue his gross-negligence claim on appeal.

                                              3
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                                  No. 12-40895

        Under Texas law, “the misrepresentation at issue must be one of existing
fact.” BCY Water Supply Corp. v. Residential Invs., Inc., 170 S.W.3d 596, 603
(Tex. App.—Tyler 2005, pet. denied). “A promise to do or refrain from doing an
act in the future is not actionable.” Id.; see also Scherer v. Angell, 253 S.W.3d
777, 781 (Tex. App.—Amarillo 2007, no pet.). Wells Fargo’s only allegedly false
representation—that Verdin should submit a request for postponement and “not
worry about the foreclosure”—relates to a promise to do something in the future.
This representation is not one of existing fact and is not actionable under Texas
law.
        Even if Defendants supplied Verdin with false information, Texas requires
pecuniary loss independent from the loan agreement to support a
negligent-misrepresentation claim. D.S.A., Inc. v. Hillsboro Indep. Sch. Dist.,
973 S.W.2d 662, 663–64 (Tex. 1998) (citation omitted). Mental anguish does not
qualify as pecuniary loss. Fed. Land Bank Ass’n of Tyler v. Sloane, 825 S.W.2d
439, 442–43 (Tex. 1991). Here, Verdin has merely alleged losses relating to the
Loan Agreement and mental anguish. Therefore, the district court did not err
by dismissing Verdin’s negligent-misrepresentation claim.
                                       III.
        The district court granted Defendant’s motion for summary judgment on
Verdin’s remaining claims. We review a grant of summary judgment de novo,
applying the same standard as the district court and viewing the evidence in the
light most favorable to the nonmoving party. Amerisure Ins. Co. v. Navigators
Ins. Co., 611 F.3d 299, 304 (5th Cir. 2010). We address each of Verdin’s
remaining claims in turn.

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                                        No. 12-40895

       Verdin alleges Wells Fargo breached the Loan Agreement by (1) failing to
provide Verdin an updated amount to reinstate the Note, and (2) pursuing
foreclosure of the Property after waiving its right to foreclose. To begin, the
Loan Agreement does not require Wells Fargo to provide updates on the exact
payment amount required to reinstate the Note;2 therefore, Verdin’s claim fails
on that ground. Next, to waive its contractual right to foreclose, Wells Fargo
must have either intended to relinquish its right or intentionally engaged in
conduct inconsistent with that right. Ulico Cas. Co. v. Allied Pilots Ass’n, 262
S.W.3d 773, 778 (Tex. 2008). Waiver by implication only occurs when conclusive
evidence shows the party unequivocally manifests its intention to no longer
assert its right. G.H. Bass & Co. v. Dalsan Props.–Abilene, 885 S.W.2d 572, 577
(Tex. App.—Dallas 1994, no writ) (“[I]t is the burden of the party who is to
benefit by a showing of waiver to produce conclusive evidence that the opposite
party [unequivocally] manifested its intent to no longer assert its claim. This is
a particularly onerous burden.” (internal quotation marks and citation omitted)).
Although Wells Fargo’s alleged statement that Verdin should not “worry about
the foreclosure” is inconsistent with its right to foreclose, it falls short of being
an unequivocal manifestation of Wells Fargo’s intent to forego that right.
       Verdin also alleges that Wells Fargo anticipatorily breached the Loan
Agreement. To prevail on this claim, Verdin must prove “(1) an absolute
repudiation of [an] obligation; (2) a lack of a just excuse for the repudiation; and
(3) damage to the non-repudiating party.” Gonzalez v. Denning, 394 F.3d 388,

       2
            The Loan Agreement requires Wells Fargo to provide the borrower notice “of the right
to reinstate after acceleration” and allows the borrower to reinstate the Note “at any time prior
to . . . five days before sale of the Property,” but does not impose any contractual obligation on
Wells Fargo to calculate the reinstatement figure for the borrower.

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                                       No. 12-40895

394 (5th Cir. 2004). Here, Verdin is unable to demonstrate that Wells Fargo
made an absolute repudiation of an obligation because providing mixed signals
of an intent to foreclose—i.e., suggesting that it would consider a postponement
and not to worry about a foreclosure—does not rise to an absolute declaration of
intent to abandon an obligation. See, e.g., Narvaez v. Wilshire Credit Corp., 757
F. Supp. 2d 621, 632 (N.D. Tex. 2010) (concluding that a bank’s conflicting
messages regarding the status of a loan “[fell] short of the positive and
unconditional repudiation necessary to maintain a cause of action for
anticipatory breach”).3
       Verdin next alleges Wells Fargo used unreasonable collection efforts to
collect on its debt. Although the elements of such a claim are not clearly defined
and may vary from case to case under Texas law, all plaintiffs must show that
the defendant’s conduct “was willful, wanton, malicious, and intended to inflict
mental anguish and bodily harm.” EMC Mortg. Corp. v. Jones, 252 S.W.3d 857,
868 (Tex. App.—Dallas 2008, no pet.) (citation omitted). Simply put, the record
does not contain any facts that would support a finding that Wells Fargo’s
actions constituted “a course of harassment that was willful, wanton, malicious,
and intended to inflict mental anguish and bodily harm.” Id.
       Verdin also maintains that Wells Fargo violated § 392.304(a)(19)
§ 392.304(a)(8), § 392.303(a)(2), and § 392.301(a)(8) of the TDCA. Section
392.304(a)(19) is a catch-all provision that prohibits a debt collector from “using
any other false representation or deceptive means to collect a debt.” Tex. Fin.

       3
        Because each of Verdin’s breach-of-contract claims fails, there is no basis to conclude
that the foreclosure sale is void. Accordingly, Verdin is unable to establish that he has
superior title to the Property and, therefore, his suit to quiet title and trespass-to-try-title
actions also fail.

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                                       No. 12-40895

Code § 392.304(a)(19). “To violate the TDCA using a misrepresentation, ‘the
debt collector must have made an affirmative statement that was false or
misleading.’” Kruse v. Bank of N. Y. Mellon, — F.Supp.2d —, 2013 WL 1294088,
at *2 (N.D. Tex. Apr. 1, 2013) (quoting Hassell v. Bank of Am., N.A., Civ. A. H-
12-1530, 2013 WL 211154, at *4 (S.D. Tex. Jan. 18, 2013)). Here, even assuming
Wells Fargo told Verdin “not to worry about the foreclosure,” Verdin does not
allege that Wells Fargo made an affirmative statement that it would forgo
foreclosure. Accordingly, the district court did not err in concluding that Wells
Fargo’s statement “not to worry about the foreclosure” did not constitute a
violation of § 392.304(a)(19). Moreover, “‘[r]efusing to provide a payoff quote is
not an affirmative misrepresentation of the amount of debt.’” Hassell, 2013 WL
211154, at *4 (quoting Nolasco v. CitiMortgage, Inc., Civ. A. No. H-12-1875, 2012
WL 3648414, at *6 (S.D. Tex. Aug. 23, 2012)). Accordingly, Verdin’s claims
under both §§ 392.304(a)(8) and (19) fail.
       Verdin’s claim under § 392.303(a)(2) also fails because the Loan
Agreement expressly authorizes Wells Fargo to demand fees and charges in the
event of a default. Finally, Verdin’s claim under § 392.301(a)(8) fails because the
Loan Agreement vested Wells Fargo’s right to accelerate and foreclose upon
Verdin’s nonperformance. Moreover, the TDCA does not prohibit a creditor from
“exercising or threatening to exercise a statutory or contractual right of seizure,
repossession, or sale that does not require court proceedings.” Tex. Fin. Code
§ 392.301(b)(3).4
                                             IV.
       For the foregoing reasons, the district court’s orders granting Defendant’s
motions to dismiss and for summary judgment are AFFIRMED.

       4
         Verdin’s request for an accounting and for declaratory judgment both fail because the
district court properly disposed of his underlying substantive claims.

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