Court Opinion

ID: 815674
Source: CourtListenerOpinion
Date Created: 2013-01-19 00:16:52+00
Date Added: 2024-06-11T15:22:24.388805
License: Public Domain

Case: 12-40742       Document: 00512118013         Page: 1     Date Filed: 01/18/2013

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

                                                                            FILED
                                                                         January 18, 2013

                                     No. 12-40742                          Lyle W. Cayce
                                   Summary Calendar                             Clerk

LAWRENCE M. MILTON,

               Plaintiff – Appellant

v.

U.S. BANK NATIONAL ASSOCIATION, as Trustee for the Registered Holders
of GSRPM 2004-1, Mortgage Pass-Through Certificates; OCWEN LOAN
SERVICING, L.L.C.,

               Defendants – Appellees

                   Appeal from the United States District Court
                        for the Eastern District of Texas
                              Case No. 4:10-CV-538

Before SMITH, PRADO, and HIGGINSON, Circuit Judges.
PER CURIAM:*
       Lawrence Milton appeals the district court’s summary judgment in favor
of U.S. Bank National Association (“U.S. Bank”) and Ocwen Loan Servicing,
L.L.C. (“Ocwen”). For the following reasons, 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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: 12-40742     Document: 00512118013     Page: 2   Date Filed: 01/18/2013

                                  No. 12-40742

                               BACKGROUND
        Lawrence Milton purchased property located at 7712 Saragosa Creek Road
in Plano, Texas (the “Property”), with a loan memorialized by a purchase money
note in the amount of $295,000 (the “Note”), which was secured by a deed of
trust on the Property (the “Deed of Trust”). U.S. Bank is the current holder of
the Note and Deed of Trust, and Ocwen is the mortgage servicer for U.S. Bank.
        It is undisputed that, in July 2009, Milton defaulted on his payment
obligations and Ocwen correspondingly sent Milton a Notice of Default, Notice
of Acceleration of Loan Maturity, and Notice of Foreclosure Sale. That fall,
Milton applied for a loan modification through the Home Affordable Modification
Program (“HAMP”). Milton alleges that, on October 2, 2009, Ocwen orally
represented that his home would not be foreclosed upon while his HAMP
application was pending, and that processing would likely take from 60 to 90
days.    By letter dated October 13, 2009—a letter Milton alleges he never
received—Ocwen reported that Milton was not eligible for a HAMP loan
modification because the subject loan “failed the net present value or NPV test
as established by the government rules.” Ocwen separately mailed Milton a
notice informing him that a non-judicial foreclosure sale had been scheduled for
November 3, 2009. Milton alleges that, in response to that letter, he called
Ocwen to confirm that foreclosure would not proceed until his HAMP application
was processed. According to Milton, an Ocwen representative orally confirmed
that the Property would not be foreclosed upon while his application was
pending.
        On November 3, 2009, the Property was sold at a foreclosure sale. Three
days later, Milton received a handwritten notice from Ocwen informing him of
the foreclosure. Milton alleges that over the next few days, he contacted Ocwen
on numerous occasions and was given conflicting information. According to

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                                    No. 12-40742

Milton, some representatives informed him that his HAMP application remained
pending; others informed him that it had been denied. Some told him that the
foreclosure sale had been stopped; others told him that the Property had been
sold and the sale was final.
      On November 23, 2009, Milton filed this wrongful foreclosure action in
Texas state court, and defendants timely removed to federal district court for the
Eastern District of Texas on diversity grounds.              The Second Amended
Complaint, the operative pleading, asserts claims for breach of contract,
promissory    estoppel,    fraud,    negligence,   gross     negligence,   negligent
misrepresentation, and unreasonable collection efforts.          The district court
granted defendants’ joint motion for summary judgment, entered final judgment
in favor of the defendants on all counts, and dismissed the case with prejudice.
Milton timely appealed.
                           STANDARD OF REVIEW
      We review a district court’s summary judgment de novo, applying the same
standard as the district court. Moss v. BMC Software, Inc., 610 F.3d 917, 922
(5th Cir. 2010). Summary judgment is warranted if, viewing all evidence in the
light most favorable to the non-moving party, the record demonstrates that there
is no genuine issue of material fact and that the moving party is entitled to
judgment as a matter of law. Id. (citing FED. R. CIV. P. 56(a)). A fact is material
if it “might affect the outcome of the suit under the governing law,” and a dispute
is genuine if “the evidence is such that a reasonable jury could return a verdict
for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
                                    DISCUSSION
      Plaintiff’s breach of contract claim is premised on Ocwen’s alleged oral
agreement to delay foreclosure until Milton’s HAMP application had been processed.
An agreement to delay foreclosure is subject to the Texas statute of frauds, and,
accordingly, must be in writing to be enforceable. See TEX. BUS. & COM. CODE §

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                                     No. 12-40742

26.02(a), (b); Burnette v. Wells Fargo Bank, N.A., No. 4:0-CV-370, 2010 WL
1026968, at *4–*5 (E.D. Tex. Feb. 16, 2010) (applying Texas law); Deuley v.
Chase Home Fin. LLC, No. H-05-04253, 2006 WL 1155230, at *2 (S.D. Tex. Apr.
26, 2006) (applying Texas law); Krudop v. Bridge City State Bank, No. 09-05-111
CV, 2006 WL 3627078, at *4 (Tex. App.–Beaumont Dec. 14, 2006, pet. denied).
The district court held, and we agree, that because there was no written
agreement to delay foreclosure, plaintiff’s breach of contract claim is barred by
the statute of frauds. Bank of Tex., N.A. v. Gaubert, 286 S.W.3d 546, 556 (Tex.
App.–Dallas, 2009, pet. dism’d w.o.j.).
       The district court did not address plaintiff’s remaining claims for
promissory    estoppel,     fraud,    negligence,   gross     negligence,   negligent
misrepresentation, and unreasonable collection efforts on the basis that they
were inadequately briefed. We take no position on the adequacy of the briefing
below, and hold, for the following reasons, that judgment as a matter of law was
properly entered for the defendants.
       Plaintiff’s promissory estoppel claim is unavailing because plaintiff has
failed to allege or introduce evidence that Ocwen promised to reduce its alleged
oral misrepresentations into writing. See Maginn v. Norwest Mortg. Inc., 919
S.W.2d 164, 168 (Tex. App.–Austin 1996, no writ) (holding that summary
judgment with respect to an estoppel claim is proper when no evidence exists to
establish an oral agreement to reduce an otherwise unenforceable promise to
writing, in satisfaction of the statute of frauds); see also Deuley, 2006 WL
1155230, at *2 (dismissing estoppel claim predicated on mortgage servicer’s
representation that it would accommodate plaintiffs’ request for loan assistance,
on the basis that the mortgage servicer never orally agreed to reduce that
promise to writing).
       Plaintiff’s negligent misrepresentation claim fails because, “under Texas
law,    promises       of   future     action   are    not      actionable     as   a

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                                        No. 12-40742

negligent-misrepresentation tort.” See De Franceschi v. BAC Home Loans
Servicing, L.P., 477 F. App’x 200, 205 (5th Cir. 2012) (citing Scherer v. Angell,
253 S.W.3d 777, 781 (Tex. App.–Amarillo 2007, no pet.)); see also Edwards v.
Ocwen Loan Servicing, LLC, No. 9:10cv89, 2012 WL 844396, at *6 (E.D. Tex.
Mar. 12, 2012) (holding that plaintiff did not state a viable claim for negligent
representation because the alleged misrepresentation—the mortgage servicer
would not foreclose on the property while plaintiff’s loan modification application
was pending—was a promise of future conduct). But see Burnette, 2010 WL
1026968, at *7 (holding that plaintiff stated a viable claim for negligent
misrepresentation in alleging that a mortgage servicer misrepresented that a
“foreclosure sale would not occur while Defendants reviewed [plaintiff’s loan
modification application]”).1
       Plaintiff’s negligence and gross negligence claims fail because, under
Texas law, there is “no special relationship between a mortgagor and mortgagee”
that would give rise to a stand-alone duty of good faith and fair dealing. UMLIC
VP LLC v. T & M Sales & Envtl. Sys., Inc., 176 S.W.3d 595, 612 (Tex.
App.–Corpus Christi, 2005, pet. denied); see also Burnette, 2010 WL 1026968, at
*8 (dismissing plaintiff’s gross negligence claim on that basis).
       Finally, plaintiff’s fraud and unreasonable collection efforts claims are not
supported by evidence sufficient to survive summary judgment. The summary
judgment record is devoid of any evidence, apart from Milton’s unsupported
speculation, that the purported misrepresentations were made knowingly or
with reckless disregard for their falsity, In re FirstMerit Bank, N.A., 52 S.W.3d
749, 758 (Tex. 2001), or were “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.).                 Moreover, his reliance on oral

       1
         To the extent that Burnette is inconsistent with this settled principle of Texas law, we
decline to follow it.

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                                  No. 12-40742

representations by customer service representatives that were contradicted by
the terms of the loan agreement and the notice of foreclosure was not reasonable
as a matter of law. TMI, Inc. v. Brooks, 225 S.W.3d 783, 795 (Tex. App.–Houston
[14th Dist.], 2007, pet. denied). Viewed in the light most favorable to Milton, no
reasonable jury could conclude on the basis of the evidence before it that the
defendants’ actions were fraudulent and their collection efforts were
unreasonable. See Edwards, 2012 WL 844396, at *6–*7 .
      For the foregoing reasons, U.S. Bank and Ocwen are entitled to judgment
as a matter of law. AFFIRMED.

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