     Case: 15-50515       Document: 00513312316          Page: 1     Date Filed: 12/17/2015




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

                                                                                   FILED
                                                                             December 17, 2015
                                     No. 15-50515
                                   Summary Calendar                             Lyle W. Cayce
                                                                                     Clerk




RONALD W. LAWRENCE, JR.; JENNIFER J. LAWRENCE,

                                                   Plaintiffs–Appellants,

versus

FEDERAL HOME LOAN MORTGAGE CORPORATION;
MERSCORP, INCORPORATED; WELLS FARGO BANK, N.A.;
WELLS FARGO HOME MORTGAGE,

                                                   Defendants–Appellees.




                    Appeal from the United States District Court
                         for the Western District of Texas




Before REAVLEY, SMITH, and HAYNES, Circuit Judges.
JERRY E. SMITH, Circuit Judge:

       Ronald and Jennifer Lawrence appeal a summary judgment in favor of
Wells Fargo Home Mortgage and Wells Fargo Bank, N.A., 1 in litigation


       1 We refer collectively to these entities as “Wells Fargo.” The Lawrences name other
entities merely as necessary parties to effect a transfer of the property back to the Lawrences,
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                                       No. 15-50515
stemming from the Lawrences’ default on a home mortgage. On appeal, the
Lawrences assert only claims for common-law fraud and fraudulent induce-
ment, which the district court denied for insufficient evidence of damages.
There being no error, we affirm.

                                              I.
       In 2008, the Lawrences bought a house with a mortgage secured by a
deed of trust. Wells Fargo became their mortgage servicer and discussed alter-
native repayment options with them when, as early as November 2010, the
Lawrences anticipated problems making scheduled payments. The Lawrences
defaulted in January 2011 despite the negotiations with Wells Fargo—making
no payments through April 2011. Wells Fargo then accelerated the mortgage
and planned a foreclosure sale.

       Beginning in November 2010, the Lawrences submitted applications to
Wells Fargo for a mortgage modification pursuant to the Home Affordable
Modification Program (“HAMP”). 2              Wells Fargo denied the applications,
explaining that the Lawrences’ loan was a “Texas Cash Out” Loan and thus
ineligible for HAMP modification. 3 Their correspondence did, however, result
in a repayment plan dated April 29, 2011, under which the Lawrences’ monthly


though they assert no substantive claims against those parties.
       2HAMP, which stems from the Emergency Economic Stabilization Act and is codified
at 12 U.S.C. §§ 5219, 1715z–23, authorizes the Department of the Treasury to incentivize
mortgage servicers to modify existing mortgages and avoid default.
       3  A “Texas Cash Out” Loan is a home equity loan governed by Article XVI, Section
50(a)(6) of the Texas Constitution, which, according to Wells Fargo, prohibits modification of
an existing loan and instead requires the origination of an entirely new loan. The accuracy
of that contention is irrelevant, because Wells Fargo concedes it made such a representation,
so we need not address it.
       Wells Fargo also denied some of the applications because the proposed modifications
would not be affordable to the Lawrences or because the Lawrences had provided incomplete
documentation. Throughout their negotiations, however, Wells Fargo continued to represent
that the mortgage would be ineligible for HAMP modification.
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                                No. 15-50515
payment increased by forty percent—though their total obligation remained
the same. The Lawrences made a single payment before defaulting in June.

      After that default, Wells Fargo reinitiated foreclosure proceedings but
continued to discuss potential repayment options with the Lawrences. Wells
Fargo rescheduled the foreclosure sale four times to accommodate the negotia-
tions but never offered or accepted a HAMP modification, because it main-
tained that the mortgage was ineligible. That was until November 4, 2011,
when Wells Fargo indicated that the mortgage was eligible for HAMP modi-
fication, provided the Lawrences with information about applying for a HAMP
modification, and urged them to submit the required information on a timely
basis to avoid the foreclosure sale scheduled for December 6. The Lawrences
applied on November 14, but the application remained incomplete until Wells
Fargo received another round of documents from the Lawrences on Decem-
ber 2. Though it had rescheduled the foreclosure sale on four occasions, Wells
Fargo informed the Lawrences that it could not review fully the HAMP applica-
tion before the December 6 sale, which would proceed as planned.

                                      II.
      After remaining in the house for nearly two years without making any
payments, the Lawrences in September 2013 sued in Texas state court under
a variety of theories. The defendants removed to federal court and moved for
summary judgment, which the magistrate judge (“MJ”) recommended be
granted except for the common-law fraud and fraudulent-inducement claims
against Wells Fargo. The MJ concluded that the Lawrences had raised a
genuine issue as to whether the misrepresentations as to any HAMP eligibility
denied them the opportunity to sell the house or induced them to enter into the
April 2011 repayment agreement. In the same recommendation, however, the
MJ denied the Lawrences’ one-line request for a continuance on the summary

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                                      No. 15-50515
judgment motion to allow more discovery, because they had requested the
continuance after the discovery deadline and had failed to offer any evidence
as to what discovery had been completed or remained to be done. Wells Fargo
objected to the MJ’s recommendation on the ground that damages were too
speculative; the Lawrences filed no objections.

      The district court rejected the recommendation on the fraud and
fraudulent-inducement claims. Noting that the Lawrences had withdrawn any
claim for mental-anguish damages, the court concluded there was insufficient
evidence of damages to survive summary judgement.

                                           III.
      We review a summary judgment de novo. Wilcox v. Wild Well Control,
Inc., 794 F.3d 531, 535 (5th Cir. 2015). Summary judgment is required “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.” FED. R. CIV. P. 56(a). A
non-movant will not avoid summary judgment by presenting “speculation,
improbable inferences, or unsubstantiated assertions.” Likens v. Hartford Life
& Accident Ins. Co., 688 F.3d 197, 202 (5th Cir. 2012).

                                            IV.
      Texas law governs the Lawrences’ claims for common-law fraud and
fraudulent inducement. Under Texas law, the elements of fraud are
   (1) that a material representation was made; (2) the representation was
   false; (3) when the representation was made, the speaker knew it was
   false or made it recklessly without any knowledge of the truth and as a
   positive assertion; (4) the speaker made the representation with the
   intent that the other party should act upon it; (5) the party acted in
   reliance on the representation; and (6) the party thereby suffered
   injury.[4]


      4   Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 337
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                                    No. 15-50515
       The Lawrences claim they offered sufficient evidence of damages to sur-
vive summary judgment. 5 First, they posit that the district court ignored evi-
dence of their out-of-pocket damages incurred in corresponding with Wells
Fargo regarding a HAMP modification—such as lost time and postage.
Although such expenses may be damages, the Lawrences offered no evidence
that they actually incurred them or information about the amounts. Mere
assertion of injury, unsupported by evidence, is insufficient to survive sum-
mary judgment. Likens, 688 F.3d at 202.

       Second, the Lawrences contend that the district court ignored evidence
that Wells Fargo’s misrepresentations denied them the opportunity to sell
their house and avoid incurring further arrears or damage to their credit. But
the Lawrences offered no evidence that they had planned to sell the house,
when they would have sold it, or for how much. Without some evidence that
Wells Fargo’s misrepresentations denied them the chance actually to sell, the
Lawrences’ claim that they would have sold are “speculation” that is not
enough to oppose summary judgment. Id.

       Third, the Lawrences maintain that the arrears that accumulated on the
mortgage are themselves damages. Wells Fargo’s misrepresentations, they
argue, strung them along and caused their missed payments to accumulate,
thereby increasing the monthly payments under the repayment agreement.
Though that agreement did increase the Lawrences’ monthly payments, it did
not alter their total obligation under the otherwise valid mortgage; their
monthly payments may have increased, but the Lawrences may not claim the




(Tex. 2011).
       5Wells Fargo claims the Lawrences did not rely on the misrepresentations; the Law-
rences address those arguments in their brief. We affirm on the damages issue and thus
need not address reliance.
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                                       No. 15-50515
arrears as damages or injury, because those amounts were already owed under
the original mortgage. 6

       Finally, the Lawrences aver that they suffered damages measured by the
difference between their payments under the original mortgage and the lower
payments after a HAMP modification. That measure is too speculative for
recovery. The Lawrences offered no evidence that they were entitled to a mod-
ification, that Wells Fargo would have offered them one, that they would have
accepted the hypothetical offer, or what their modified payments would have
been. Absent such evidence, damages measured by the difference between the
existing mortgage obligation and such an obligation following a HAMP modifi-
cation are too speculative to be recovered. Id.

       Thus, the Lawrences’ claimed damages are either categorically not dam-
ages, too speculative, or unsubstantiated assertions. They failed to give proof
to support an element of their fraud claims, so the district court committed no
error in granting summary judgment.

                                              V.
       The Lawrences assert, in passing, that to oppose summary judgment,
they should have received a continuance, under Federal Rule of Civil Proce-
dure 56(d), for extended discovery and an opportunity to amend their plead-
ings. The MJ denied a continuance, and the Lawrences failed to object to the
MJ’s recommendations. Thus, we review this claim only for plain error. 7




       6See In re Swift, 129 F.3d 792, 799 (5th Cir. 1997) (noting a “taxpayer is not injured
by being forced to pay his back taxes [because those] taxes were already owed to the IRS”).
       7 United States ex rel. Steury v. Cardinal Health, Inc., 735 F.3d 202, 205 n.2 (5th Cir.
2013) (“[P]lain error review applies when a party did not object to a [MJ’s] findings of fact,
conclusions of law, or recommendation to the district court, so long as the party was served
with notice of the consequences of failing to object.”).
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                                   No. 15-50515
      To prevail under plain-error review, an appellant must show (1) error
(2) that is plain and (3) that affects substantial rights.        United States v.
Escalante-Reyes, 689 F.3d 415, 419 (5th Cir. 2012) (en banc). Even if those
three prongs are satisfied, we have the discretion to remedy the error but only
if (4) it seriously affects the fairness, integrity, or public reputation of judicial
proceedings. Id. Even assuming the denial was an obvious error that affected
substantial rights, the denial would not satisfy the fourth prong, because the
Lawrences filed only a one-line request for a continuance without any sup-
porting evidence regarding the need for additional discovery or why existing
discovery had been incomplete. There was no error, let alone plain error, in
denying the continuance.

      AFFIRMED.




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