Court Opinion

ID: 4186006
Source: CourtListenerOpinion
Date Created: 2017-07-13 18:01:07.312262+00
Date Added: 2024-06-11T07:46:37.679620
License: Public Domain

Case: 17-50090      Document: 00514070928         Page: 1    Date Filed: 07/13/2017

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

                                                                                   FILED
                                    No. 17-50090                               July 13, 2017
                                  Summary Calendar
                                                                              Lyle W. Cayce
                                                                                   Clerk
WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual
capacity but as Trustee of ARLP Securitization Trust,

              Plaintiff - Appellee

v.

GLORIA BLIZZARD,

              Defendant - Appellant

                   Appeal from the United States District Court
                        for the Western District of Texas
                             USDC No. 1:15-CV-236

Before KING, DENNIS, and COSTA, Circuit Judges.
PER CURIAM:*
       Defendant–Appellant Gloria Blizzard appeals the district court’s grant
of summary judgment in favor of Plaintiff–Appellee Wilmington Trust,
National Association 1 (Wilmington Trust), allowing foreclosure on her

       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
       1 Wilmington Trust appears not in its individual capacity but as Trustee of ARLP
Securitization Trust.
    Case: 17-50090    Document: 00514070928    Page: 2   Date Filed: 07/13/2017

                                No. 17-50090
homestead. On February 7, 2007, Roy Blizzard, then-husband of Gloria, signed
a Texas Home Equity Adjustable Rate Note (the Note) for $196,000.00. Gloria
did not sign the Note. To secure the Note, both Gloria and Roy signed a Texas
Home Equity Security Interest (the Deed of Trust) granting the lender a lien
on their property in Cedar Park, Texas. Subsequently, Roy defaulted on the
Note and entered into a Modification Agreement with HomEq Servicing
(HomEq), the entity then servicing the Note. The Modification Agreement
modified the Note, reducing the interest rate and the monthly payment
amount. Both Roy’s and Gloria’s signatures appear on the Modification
Agreement, but Gloria claims her signature was forged. Roy later defaulted on
the Note (as modified), and on July 19, 2010, HomEq sent two notices of default
and acceleration to an address in Austin, Texas—rather than the Cedar Park
address—with one notice directed to Gloria and one to Roy.
      Eventually, Wilmington Trust became the Note’s holder and the Deed of
Trust’s beneficiary. On March 24, 2015, Wilmington Trust initiated this suit,
seeking a judgment allowing it to foreclose on the Blizzards’ Cedar Park
property. After Roy failed to respond to the suit, the district court entered a
default judgment against him. Wilmington Trust then moved for summary
judgment against Gloria, which the district court granted. Gloria timely
appeals.
      This court reviews de novo the district court’s grant of summary
judgment, “viewing all evidence in the light most favorable to the nonmoving
party and drawing all reasonable inferences in that party’s favor.” In re
Katrina Canal Breaches Litig., 495 F.3d 191, 205–06 (5th Cir. 2007). Summary
judgment is proper when “the movant 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). “A genuine issue of material fact exists ‘if the
evidence is such that a reasonable jury could return a verdict for the non-
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                                       No. 17-50090
moving party.’” In re Katrina, 495 F.3d at 206 (quoting Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986)).
       Gloria first argues that summary judgment was improper because she
did not sign the Note or the Modification Agreement (her signature on the
latter being a forgery), and thus, Wilmington Trust does not have a valid lien
on the Cedar Park property—Gloria’s homestead. Under the Texas
Constitution, a homestead lien must be voluntary. The Constitution states:
       (a) The homestead of a family, or of a single adult person, shall be,
       and is hereby protected from forced sale, for the payment of all
       debts except for: . . . (6) an extension of credit that: (A) is secured
       by a voluntary lien on the homestead created under a written
       agreement with the consent of each owner and each owner’s spouse.
Tex. Const. art. XVI, § 50(a)(6)(A) (emphases added). A lien is voluntary if “[a]n
owner or an owner’s spouse who is not a maker of the note . . . consent[s] to the
lien by signing a written consent to the mortgage instrument.” 7 Tex. Admin.
Code § 153.2(2); see also Puig v. Citibank, N.A., No. 3:11–CV–0270, 2012 WL
1835721, at *8 (N.D. Tex. May 21, 2012) (holding that § 50(a)(5)(A)’s
requirements were “satisfied when Mr. Puig (owner) and Mrs. Puig (owner's
spouse who is not a maker of the note) sign[ed] the deed of trust”), aff’d, 514 F.
App’x 483 (5th Cir. 2013) (per curiam).
       Here, Gloria voluntarily consented to the lien by signing the Deed of
Trust. 2 Therefore, the lien satisfies § 50(a)(6)(A)’s requirements, regardless of
whether Gloria signed the Note. See Tex. Admin. Code § 153.2(2); see also Puig,
2012 WL 1835721, at *8. Thus, there is no genuine issue of material fact as to
whether the lien was valid and enforceable under the Texas Constitution.

       2 In fact, the Deed of Trust states: “[A]ny person who signs this Security Instrument,
but does not execute the Note . . . agrees that this Security Instrument establishes a voluntary
lien on the homestead and constitutes the written agreement evidencing the consent of each
owner and each owner’s spouse . . .”
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                                     No. 17-50090
      Gloria next argues that summary judgment was improper because the
Modification Agreement was void due to forgery of her signature. In order for
§ 50(a)(6)(A) to apply to a restructuring of a home equity loan, the
restructuring must involve “a new extension of credit.” Sims v. Carrington
Mortg. Servs., L.L.C., 440 S.W.3d 10, 15 (Tex. 2014). As the Texas Supreme
Court has explained:
      [T]he restructuring of a home equity loan that . . . involves
      capitalization of past-due amounts owed under the terms of the
      initial loan and a lowering of the interest rate and the amount of
      installment payments, but does not involve the satisfaction or
      replacement of the original note, an advancement of new funds, or
      an increase in the obligations created by the original note, is not a
      new extension of credit that must meet the requirements of Section
      50.
Id. at 17. Here, the Modification Agreement decreased the Note’s interest rate
and monthly payment amount; but it did not satisfy or replace the Note,
advance new funds, or increase the obligations created by the Note. Thus, there
was no requirement that the Modification Agreement comply with
§ 50(a)(6)(A)’s requirements, including the spousal consent requirement.
Because Gloria’s consent to the Modification Agreement was not required, the
alleged forgery of her signature was immaterial, and thus did not preclude
summary judgment.
      Gloria finally argues that summary judgment was improper because
Wilmington Trust provided inadequate notice of default by sending the notice
to the Austin address rather than the Cedar Park address. 3 Under Texas law,
“the mortgage servicer of the debt shall serve a debtor in default under a deed
of trust or other contract lien on real property used as the debtor's residence

      3  Gloria also argues that Wilmington Trust provided inadequate notice because it
referenced a default under the Modification Agreement, which was void due to forgery of her
signature. Because we conclude that Gloria has failed to establish that the Modification
Agreement was void, as discussed supra, we reject this argument.
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                                  No. 17-50090
with written notice by certified mail stating that the debtor is in default under
the deed of trust or other contract lien and giving the debtor at least 20 days
to cure the default before notice of sale can be given under Subsection (b).” Tex.
Prop. Code Ann. § 51.002(d) (emphasis added). “Service of a notice . . . is
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.” Id. §
51.002(e) (emphasis added). Under these provisions, only constructive notice—
rather than actual notice—is required. See, e.g., Robinson v. Wells Fargo Bank,
N.A., 576 F. App’x 358, 361 (5th Cir. 2014) (per curiam) (citing WTFO, Inc. v.
Braithwaite, 899 S.W.2d 709, 720 (Tex. App.—Dallas 1995, no writ)). Black’s
Law Dictionary defines “constructive notice” as “notice presumed by law to
have been acquired by a person and thus imputed to that person.” Constructive
Notice, BLACK’S LAW DICTIONARY (10th ed. 2014).
      In Robinson v. Wells Fargo Bank, N.A., the deed of trust stated: “Notice
to any one Borrower shall constitute notice to all Borrowers unless Applicable
Law expressly requires otherwise.” Robinson, 576 F. App’x at 361. Based on
that provision, this court found that the plaintiff received constructive notice
because her husband admitted that he received a notice sent to their shared
address. Id.
      Here, the Deed of Trust has an identical provision to the one in Robinson.
Roy did not dispute that he received the notices. And although Roy and Gloria
did not share the Austin address where HomEq sent the notices, the Deed of
Trust states: “The notice address shall be the [Cedar Park address] unless
Borrower has designated a substitute notice address by notice to the Lender. .
. . There may be only one designated notice address under this Security
Instrument at any one time.” HomEq’s foreclosure specialist’s affidavit stated,
and the notices in the record support, that he sent the notices by certified mail

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                                No. 17-50090
to Roy’s last known address—the Austin address, a point that Gloria does not
dispute.
     Therefore, Gloria received constructive notice. Before Wilmington Trust
acquired the Note and Deed of Trust, HomEq sent two notices—one specifically
directed at Gloria—by certified mail to the last known address. Thus,
Wilmington Trust satisfied its notice obligations under Texas law.
     The judgment of the district court is AFFIRMED.

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