Court Opinion

ID: 8353236
Source: CourtListenerOpinion
Date Created: 2022-10-18 00:00:21.328042+00
Date Added: 2024-06-11T16:45:52.311366
License: Public Domain

Case: 22-40125     Document: 00516510950         Page: 1     Date Filed: 10/17/2022

              United States Court of Appeals
                   for the Fifth Circuit                              United States Court of Appeals
                                                                               Fifth Circuit

                                                                             FILED
                                                                       October 17, 2022
                                  No. 22-40125                          Lyle W. Cayce
                                Summary Calendar                             Clerk

   Reynaldo Cisneros,

                                                           Plaintiff—Appellant,

                                       versus

   Franklin Credit Management Corporation,

                                                           Defendant—Appellee.

                  Appeal from the United States District Court
                      for the Southern District of Texas
                            USDC No. 1:21-CV-106

   Before Stewart, Duncan, and Wilson, Circuit Judges.
   Per Curiam:*
          In this appeal arising out of a foreclosure dispute, the district court
   granted summary judgment in favor of the loan servicer, Franklin Credit
   Management Corporation (“Franklin”), on grounds that sufficient notice

          *
            Pursuant to 5th Circuit Rule 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   opinion should not be published and is not precedent except under the limited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 Circuit Rule 47.5.4.
Case: 22-40125     Document: 00516510950           Page: 2   Date Filed: 10/17/2022

                                    No. 22-40125

   was given, and the foreclosure action was properly conducted. For the
   following reasons, we AFFIRM.
               I. FACTUAL & PROCEDURAL BACKGROUND
          On August 12, 2005, Reynaldo Cisneros (“Cisneros”) executed a
   purchase money note (“Note”) in the amount of $31,000 payable to
   Mortgage      Investment     Lending       Associates,    Inc.   (“MILA”).
   Contemporaneously with the Note, Cisneros executed a purchase money
   security document (“Security Instrument”) in the amount of $124,000 in
   favor of MILA. The two documents together comprised the loan agreement
   between the parties (the “Loan Agreement”) that pertained to real property
   located at 1963 Royal Oak Drive in Brownsville, Texas (“Royal Oak”).
          On February 28, 2006, MILA assigned and transferred the Loan
   Agreement to Franklin. Franklin then assigned and transferred the Loan
   Agreement to Wilmington Savings Fund Society (“Wilmington”) but
   continued to act as the loan servicer for Wilmington. Relevant here, the Loan
   Agreement provided that notice must be given to Cisneros prior to
   acceleration in the event of a default on the loan. The terms further stated
   that the notice must contain “(a) the default; (b) the action required to cure
   the default; (c) a date, not less than 21 days from the date notice was given,
   to cure the default; and (d) that failure to cure the default on or before the
   specified date will result in acceleration of the remaining balance under the
   loan agreement and sale of [Royal Oak].” Additionally, the terms stated that
   “any notice will be considered given to Cisneros when it is mailed by first-
   class mail or when actually delivered to the [Royal Oak] address if given by
   another means.” Franklin was required to “give notice to the [Royal Oak]
   address unless [Cisneros] provide[d] a different address.” The terms also
   provided that Cisneros must “notify Franklin promptly of any change of

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   address” and “there will only be one address for notice under the loan
   agreement.”
          Cisneros failed to make his monthly mortgage payments. On
   September 1, 2020, Franklin sent correspondence to Cisneros at the Royal
   Oak address notifying him that he was in default and that the loan balance
   would be accelerated under the terms of the agreement. The notice indicated
   that Cisneros would be required to pay $3,343.61 by October 6, 2020, to cure
   the default and warned that failure to pay would result in acceleration of the
   loan and the sale of Royal Oak.
          After Cisneros failed to cure the default, Franklin sent him a notice of
   acceleration (“Notice”) on November 4, 2020. The Notice advised Cisneros
   that “the entire unpaid principal balance of the note, all accrued interest, and
   all other sums lawfully owing on the note or under the deed of trust are now
   due and payable and demand is made for the immediate payment in full of all
   such sums.” The Notice indicated that the foreclosure would take effect on
   December 1, 2020.
          On November 5, 2020, a notice of trustee’s sale was filed. Then on
   December 1, 2020, Franklin initiated the foreclosure sale and Royal Oak was
   sold to Eric Williams (“Williams”). On June 25, 2021, Cisneros filed suit
   against Franklin and Williams in the 197th District Court in Cameron
   County, Texas. On July 16, 2021, Franklin removed the case to federal court
   and filed a counterclaim for a declaratory judgment that it had properly
   conducted the foreclosure proceedings on Cisneros’ home.
          On July 21, 2021, pursuant to 28 U.S.C. § 1746, Franklin filed a
   declaration from its legal counsel in the district court record which stated that
   “the notice of default was sent to Cisneros by certified mail and regular U.S.
   mail to [Royal Oak], his last known property address of record.” On July 27,
   2021, Franklin moved for summary judgment on grounds that it had

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   “complied with all notice requirements before foreclosing” on the Royal Oak
   property. On August 10, 2021, Cisneros filed a response in opposition to
   Franklin’s summary judgment motion contending that Franklin was unable
   to prove that notice was properly delivered and alleging that the certified mail
   receipt was forged.
           On November 8, 2021, the district court dismissed Cisneros’ claims
   against Williams and referred the summary judgment motion to the
   magistrate judge (“MJ”) for report and recommendation. The MJ
   recommended that the district court grant summary judgment in favor of
   Franklin. Cisneros did not object. The district court adopted the magistrate
   judge’s report and recommendation rendered summary judgment in favor of
   Franklin. Cisneros filed this appeal.
                          II. STANDARD OF REVIEW
           We conduct a de novo review of a district court’s grant of summary
   judgment. Sanders v. Christwood, 970 F.3d 558, 561 (5th Cir. 2020).
   “Summary judgment is proper ‘if 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.’” Id. (citing FED. R. CIV. P. 56(a)). “A panel may affirm
   summary judgment on any ground supported by the record, even if it is
   different from that relied on by the district court.” Reed v. Neopost USA, Inc.,
   701 F.3d 434, 438 (5th Cir. 2012) (internal quotation marks and citation
   omitted).
                                III. DISCUSSION
           Cisneros argues that the district court erred in granting summary
   judgment in favor of Franklin because (1) he did not receive proper notice
   under the terms of the Loan Agreement and (2) Franklin violated his due
   process rights during the foreclosure proceedings. We address each issue in
   turn.

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          A. Notice
          The Texas Property Code provides that “service of a notice . . . by
   certified mail 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.” See TEX. PROP. CODE ANN. 51.002(e). Section 51.002(e) states
   that the purpose of the notice is “to provide a minimum level of protection
   to the debtor, and actual receipt of the notice is not necessary.” WMC Mortg.
   Corp. v. Moss, No. 01-10-00948-CV, 2011 WL 2089777, at *7 (Tex. App. May
   19, 2011). This court has acknowledged that “[t]he affidavit of a person
   knowledgeable of the facts to the effect that service was completed is prima
   facie evidence of service.” Martins v. BAC Home Loan Servicing, L.P., 722
   F.3d 249, 256 (5th Cir. 2013).
          Under Texas law, only constructive notice is required. Rodriguez v.
   Ocwen Loan Servicing, LLC, 306 F. App’x 854, 856 (5th Cir. 2009). This
   court has held that “the dispositive inquiry is not receipt of notice, but rather
   service of notice.” Douglas v. Wells Fargo Bank, N.A., 992 F.3d 367, 372 (5th
   Cir. 2021) (internal quotations and citation omitted) (emphasis in
   original). Moreover, we have clarified that “self-serving protestations of
   non-receipt of notice do not create a genuine dispute as to whether a
   mortgage lender mailed notices of intent to accelerate.” LSR Consulting v.
   Wells Fargo Bank, N.A., 835 F.3d 530, 535 (5th Cir. 2016).
          Cisneros argues that a genuine factual dispute exists herein because
   Franklin has “no supporting documentation showing that it had served
   notice.” He contends that the postal tracking return notification “is not his
   signature and [does not serve] as a clear indication of [his] delivery address.”
   We disagree.
          Franklin complied with applicable Texas law by providing proper
   notice of default via certified mail with a return receipt that warned Cisneros

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   if he did not cure the default by October 6, 2020, the terms of the Loan
   Agreement would be accelerated, and a foreclosure sale would take place. See
   TEX. PROP. CODE ANN. 51.002(e). This notice included all material
   information Cisneros would need to cure the default, so it was also in
   compliance with the terms of the Loan Agreement. Franklin further provided
   ample supporting documentation in the form of declaration from its counsel
   which stated that the notice of default had been sent to Cisneros via certified
   mail at the proper address. See Martins, 722 F.3d at 256. As noted, Cisneros’
   “self-serving protestations of non-receipt” do not create a genuine factual
   dispute as to whether Franklin mailed notice of its intent to accelerate. LSR
   Consulting, 835 F.3d at 535. Accordingly, we hold that Franklin satisfied its
   notice obligations prior to initiating the foreclosure sale.
          B. Due Process
          Cisneros next argues that his due process rights were violated because
   he did not receive actual receipt of notice of the foreclosure sale. Because
   Cisneros raises this argument for the first time on appeal, however, he has
   forfeited it and we decline to address it herein. See Chevron USA, Inc. v. Aker
   Maritime, Inc., 689 F.3d 497, 503 (5th Cir. 2012) (“Arguments not raised in
   district court will not be considered absent ‘extraordinary circumstances.’”).
   Assuming arguendo Cisneros had not forfeited this argument, we would
   nevertheless reject it. As we have already held supra, the record indicates that
   Franklin complied with the applicable notice requirements under both Texas
   law and the terms of the Loan Agreement prior to commencing foreclosure
   proceedings on the Royal Oak property. See TEX. PROP. CODE ANN.
   51.002(e); Martins, 722 F.3d at 256; Douglas, 992 F.3d at 372.
                                IV. CONCLUSION
          For the foregoing reasons, we AFFIRM the district court’s summary
   judgment in favor of Franklin.

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