Court Opinion

ID: 4162891
Source: CourtListenerOpinion
Date Created: 2017-04-25 00:03:53.548965+00
Date Added: 2024-06-11T14:37:52.823067
License: Public Domain

Case: 16-41308      Document: 00513965803         Page: 1    Date Filed: 04/24/2017

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                         United States Court of Appeals
                                                                                  Fifth Circuit
                                    No. 16-41308                                FILED
                                  Summary Calendar                          April 24, 2017
                                                                           Lyle W. Cayce
                                                                                Clerk
LIVIER HERNANDEZ,

                                                 Plaintiff - Appellant
v.

SELECT PORTFOLIO SERVICING, INCORPORATED,

                                                 Defendant - Appellee

                  Appeals from the United States District Court
                       for the Southern District of Texas
                             USDC No. 7:14-CV-976

Before BENAVIDES, DENNIS, and PRADO, Circuit Judges.
PER CURIAM:*
       This appeal is from a summary judgment in favor of the mortgage loan
servicer in a foreclosure case. The principal issue is whether the acceleration
of the note was abandoned, causing the statute of limitations to cease to run.
Finding no error, we AFFIRM.

       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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: 16-41308    Document: 00513965803     Page: 2   Date Filed: 04/24/2017

                                 No. 16-41308
      I.    BACKGROUND and PROCEDURAL HISTORY
      In 2004, Plaintiff-Appellant Livier Hernandez (“Hernandez”) signed a
promissory note for $242,400 and a deed of trust establishing a lien on her
residence. In 2008, Hernandez stopped making payments on the note. On
August 7, 2008, Hernandez was sent a letter notifying her of her default and
the mortgagee’s intention to accelerate the debt and to initiate foreclosure
proceedings. The letter also provided that the amount of debt was $244,875.94.
It is undisputed that no payments have been made on the note after the notice
of acceleration on August 7, 2008.
      Two years later, on August 19, 2010, a letter was sent notifying
Hernandez that she could cure the default by paying $68,682.57 on or before
September 18, 2010. The letter further notified Hernandez that if the default
was not timely cured, the “mortgage payments will be accelerated with the
full amount remaining accelerated and becoming due and payable in full, and
foreclosure proceedings will be initiated at that time.” (emphasis in original).
Additionally, the letter provided that if Hernandez was unable to cure the
default, she had other options that could potentially prevent a foreclosure sale
of her property. The options included: (1) paying half the amount due for the
cure and seeking assistance through BAC Home Loans Servicing; (2) seeking
to lower the monthly payments through a modification of the loan by reducing
the interest rate; and (3) avoiding a foreclosure sale by deeding the property
directly to the noteholder.
      Another two years later, on October 4, 2012, a letter was sent to
Hernandez stating that “[p]er your request, we have enclosed information
concerning the reinstatement of this loan.” It provided that the reinstatement
calculation was $135,575.87 and was due by October 17, 2012.
      On January 1, 2014, Defendant-Appellee Select Portfolio Servicing, Inc.
(“SPS”), acting as the mortgage loan servicer, sent Hernandez a letter stating
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                                  No. 16-41308
that Hernandez could cure the default by paying $174,996.67 within 30 days.
The letter also provided that if SPS did not receive the cure amount or “some
loss mitigation alternative to foreclosure has not started, the Noteholder will
accelerate all payments owing on your Note and require that you pay all
payments owing and sums secured by the security Instrument in full.”
      On November 4, 2014, SPS sent Hernandez a letter notifying her that
her default was not cured and thus, the loan was accelerated, leaving the entire
balance of the loan due and payable in full. Also included was a copy of the
notice of the trustee’s sale advising the foreclosure sale of the property would
take place on December 2, 2014.
      On December 1, the day before the scheduled foreclosure sale,
Hernandez filed suit in state court in Hidaldgo County, Texas. In her petition,
Hernandez claimed that: (1) the four-year statute of limitations had run on the
debt; and (2) SPS and “its predecessors have by their past conduct waived the
right to insist upon timely payment and have waived the right to accelerate
based upon late payments.” Hernandez successfully obtained a temporary
restraining order commanding SPS to desist and refrain from conducting the
foreclosure sale.
      SPS then removed the suit to federal district court based on diversity
jurisdiction. Both SPS and Hernandez filed motions for summary judgment.
On November 6, 2015, the district court held a status conference. Ruling from
the bench, the district court granted SPS’s motion for summary judgment,
stating that the acceleration had been abandoned. The court inquired what
issues were left, and counsel stated that the court’s ruling disposed of all the
issues. The court responded that it would “deny Judgment.” After further
inquiry, the court learned that Hernandez still lived in the home and that it
had not been foreclosed. The court suggested that the parties “try to work

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                                      No. 16-41308
something out to see if somebody will come up and pay for it or refinance it.”
The court set a status conference for January 7, 2016.
         At the January 7th status conference, the court inquired whether the
parties had reached a settlement, and counsel informed the court that they had
been unable to reach an agreement. The court stated that it had previously
granted the motion for summary judgment and “so I’ll go ahead and sign the
Order.” Hernandez filed a motion for reconsideration, which the district court
denied.        On September 6, 2016, the district court entered judgment.
Hernandez timely filed notice of appeal.
         II.    ANALYSIS
         This Court reviews a “grant of summary judgment de novo, applying the
same standard as the district court.” QBE Ins. Corp. v. Brown & Mitchell, Inc.,
591 F.3d 439, 442 (5th Cir. 2009). The moving party is entitled to summary
judgment if it “shows that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.” FED. R. CIV. P.
56(a).
         Hernandez’s principal argument on appeal is that the district court erred
in ruling that because SPS and its predecessors had abandoned its acceleration
of the note, the statute of limitations had ceased to run. As explained below,
her argument is precluded by our published opinion in Boren v. U.S. Nat’l Bank
Ass’n., 807 F.3d 99 (5th Cir. 2015). 1
         In Texas, a mortgagee must file suit with respect to the foreclosure of a
real property lien no later than four years after the day that the cause of action

1 Hernandez also argues that the district court erred in granting SPS’s motion for summary
judgment because SPS did not file a response to Hernandez’s motion for summary judgment.
As explained below, the undisputed facts support the district court’s grant of summary
judgment. In any event, a party’s alleged failure to respond is not a proper ground to grant
summary judgment. See John v. La. (Bd. Of Trustees for State Colleges and Universities),
757 F.2d 698, 709 (5th Cir. 1985).
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accrues. Boren, 807 F.3d at 104 (TEX. CIV. PRAC. & REM. CODE § 16.035(a)).
Because the instant note contains an optional acceleration clause, the “action
accrues when the holder actually exercises its option to accelerate.”         Id.
(internal quotation marks and citation omitted). To properly accelerate the
loan, the note holder must give notice of intent to accelerate and notice of
acceleration. Id. These notices must be “clear and unequivocal.” Id. (internal
quotation marks and citation omitted). Here, the note was accelerated on
August 7, 2008.
      However, after a lender accelerates a note, the acceleration “can be
abandoned ‘by agreement or other action of the parties.’” Id. (quoting Khan v.
GBAK Props., 371 S.W.3d 347, 353 (Tex. Ct. App. 2012)). SPS argued, and the
district court agreed, that the actions of SPS and its predecessors abandoned
the acceleration. More specifically, SPS and its predecessors sent notices to
Hernandez on at least three occasions between 2010 and 2014, offering to allow
Hernandez to cure her default with a partial payment of the loan. The letters
containing those notices were dated August 19, 2010, October 4, 2012, and
January 1, 2014.
      This Court, applying Texas law, has held that a “lender may unilaterally
abandon acceleration of a note, thereby restoring the note to its original
condition.” Id. at 105. Like the instant case, in Boren, the bank sent notice to
the borrower that the lender was no longer attempting to collect the entire
balance of the loan and would allow the borrower to cure its default by
providing a specified amount to bring the note current under its original terms.
Id. at 105–06. The notice also provided that the bank would accelerate the
loan if the Borens failed to pay the specified amount. Id. We held that this
“notice unequivocally manifested an intent to abandon the previous
acceleration and provided the Borens with an opportunity to avoid foreclosure
if they cured their arrearage.” Id. at 106. Because the acceleration had been
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                                   No. 16-41308
abandoned, “the statute of limitations period under § 16.035(a) ceased to run
at that point and a new limitations period did not begin to accrue until the
Borens defaulted again and [the bank] exercised its right to accelerate
thereafter.” Id.
      Here, the notices sent to Hernandez expressly (1) allowed her to cure her
default with a specified sum less than the full balance of the loan and
(2) notified her that if she failed to cure the default by a specified date, the full
amount of the note would be accelerated. Applying Boren, we must conclude
that the instant notices “unequivocally manifested an intent to abandon the
previous acceleration” and allowed Hernandez an opportunity to avoid
foreclosure by curing the default. Id.
      Accordingly, although the note at issue was accelerated on August 7,
2008, the acceleration was unequivocally abandoned two years later by the
notice dated August 19, 2010. As such, the four-year statute of limitations
ceased to run when the acceleration was abandoned on August 19, 2010.
Boren, 803 F.3d at 106. On November 4, 2014, SPS once again accelerated the
note and also sent notice of a foreclosure sale date. See Martin v. Fed. Nat’l
Mortg. Ass’n, 814 F.3d 315, 318 (5th Cir. 2016) (explaining that the statute of
limitations begins to run from the most recent acceleration and not from any
earlier accelerations the lender had abandoned). The instant litigation ensued
within a month of that notice. Thus, this lawsuit was filed well within the four-
year statute of limitations. Boren, 807 F.3d at 104 (TEX. CIV. PRAC. & REM.
CODE § 16.035(a)).
      For the above reasons, the district court’s judgment is AFFIRMED.

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