     Case: 13-20639      Document: 00512856290         Page: 1    Date Filed: 12/03/2014




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT


                                    No. 13-20639                         United States Court of Appeals
                                  Summary Calendar                                Fifth Circuit

                                                                                FILED
                                                                         December 3, 2014
CHARLES AUSTIN WHITTIER, III; YVETTE E. WHITTIER, Lyle W. Cayce
                                                                                   Clerk
                                                 Plaintiffs – Appellants
v.

OCWEN LOAN SERVICING, L.L.C.; DEUTSCHE BANK NATIONAL
TRUST COMPANY; MERSCORP, INCORPORATED,

                                                 Defendants – Appellees




                   Appeal from the United States District Court
                        for the Southern District of Texas
                             USDC No. 4:12-cv-03095




Before REAVLEY, DENNIS, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
       Charles and Yvette Whittier brought suit raising federal and state law
claims against the bank and loan servicing companies that were involved in
the foreclosure on their property. The district court granted the defendants’
motion for summary judgment. 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
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                                        No. 13-20639
                        FACTS AND PROCEDURAL HISTORY
      In September 2004, the Whittiers obtained a $264,000 loan from
Fremont Investment & Loan to purchase property in Houston, Texas. To
obtain the loan, the Whittiers executed an adjustable rate note made payable
to Fremont. Fremont’s Senior Vice President indorsed 1 the note in blank. The
Whittiers also executed a deed of trust which identified the Whittiers as the
borrowers and Fremont as the lender. The deed of trust further identified
MERS as a nominee for Fremont and its successor and assigns and as a
beneficiary under the instrument.
      Fremont assigned its servicing obligations to Litton Loan Servicing in
March 2005.         In 2007, the Whittiers and Litton agreed to convert their
adjustable rate mortgage to a fixed rate mortgage. In November 2011, Litton
transferred the loan servicing rights to Ocwen Loan Servicing.
      In 2012, MERS assigned the deed of trust to Deutsche Bank. After the
Whittiers defaulted, Deutsche Bank accelerated the note and foreclosed. In
July 2012, the Whittiers filed suit against the defendants in Texas state court
to halt the foreclosure proceedings. The defendants removed the case to the
United States District Court for the Southern District of Texas based on federal
question and diversity jurisdiction. Following removal, the Whittiers filed an
amended complaint, seeking declaratory relief and asserting causes of action
for violations of the Texas Debt Collection Act (“TDCA”), the Real Estate
Settlement Procedures Act (“RESPA”), and the Texas Deceptive Trade
Practices Act (“DTPA”); breach of contract; negligent misrepresentation; and
promissory estoppel. Both parties filed motions for summary judgment. The
district court granted the defendants’ motion on all claims. The Whittiers now
appeal.


      1   We use the spelling “indorse” and “indorsement” to be consistent with Texas statutes.
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                                 DISCUSSION
      This court reviews a grant of summary judgment de novo, applying the
same standard as the district court. Haverda v. Hays Cnty., 723 F.3d 586, 591
(5th Cir. 2013). Summary judgment is appropriate “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). There is a genuine
dispute of material fact “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). In making this determination, this court must “consider
evidence in the record in the light most favorable to the non-moving party and
draw all reasonable inferences in favor of that party.”       Bluebonnet Hotel
Ventures, L.L.C. v. Wells Fargo Bank, N.A., 754 F.3d 272, 276 (5th Cir. 2014)
(citation omitted).
      On appeal, the Whitters raise a substantial number of issues. We have
grouped them in order to respond in a focused way to what is relevant in
deciding the appeal.


I. Declaratory Judgment and the TDCA
      The Whittiers’ primary argument is that neither Deutsche Bank nor
Ocwen is the current assignee, owner, or holder of the note or deed of trust and,
therefore, neither has the right to foreclose on the property. The district court
rejected this claim and denied the Whittiers’ motion for declaratory relief.
      The district court determined that Deutsche Bank was entitled to enforce
the note because it had possession of the original note, bearing a blank
indorsement. We agree. Under Texas law, a bank in possession of a note
indorsed in blank is entitled to collect on it. The Texas statutory definition of
“holder” includes someone who is in possession of a note payable to bearer. See
TEX. BUS. & COM. CODE ANN. § 1.201(b)(21). “When indorsed in blank, an
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instrument becomes payable to bearer” – in this case, Deutsche Bank. Id. at §
3.205(b). This court reached the same conclusion using a similar analysis in a
non-precedential opinion. See Kiggundu v. Mortg. Elec. Registration Sys. Inc.,
469 F. App’x 330, 331 (5th Cir. 2012).
      The Whittiers now argue that the note is not enforceable because it is
not an original. This argument has no merit. First, there is no evidence that
the note presented to the district court was not the original. Second, the
original note is not required as evidence under Texas law. “[E]xistence of a
note may be established by [a] photocopy of the promissory note, attached to
an affidavit in which the affiant swears that the photocopy is a true and correct
copy of the original note.” Martins v. BAC Home Loans Servicing, L.P., 722
F.3d 249, 254 (5th Cir. 2013) (quotations and citation omitted). Here, a copy
of the note was attached to the defendants’ motion for summary judgment
along with an affidavit in which an Ocwen employee attested that all
documents were “the original or exact duplicates of the original.” Accordingly,
the defendants had possession of the note and were entitled to foreclose.
      The Whittiers next challenge the actual indorsement. They claim that
the indorsement is improper because it was photocopied onto the note instead
of stamped in ink.    This argument is flawed for two reasons.        First, the
Whittiers present no evidence to support this argument. Second, even if the
indorsement was produced by photocopying, it would still be valid. See TEX.
BUS & COM. CODE ANN. § 1.201 cmt. 37 (noting that a symbol may be printed,
stamped, or written). The Whittiers also claim that the indorsement is not a
valid blank indorsement because it was not expressly made payable to “bearer”
or the “order of bearer.” Such words are not required to create a valid blank
indorsement. TEX. BUS & COM. CODE ANN. § 3.205(b). Accordingly, the note
contained a valid blank indorsement under Texas law.


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      The Whittiers further claim that the district court erred in holding that
the defendants were also entitled to foreclose pursuant to the deed of trust.
There is no need for us to discuss this alternative basis for the court’s decision.
We also need not address the Whittiers’ TDCA claim. The claim is based
entirely on the contention that Ocwen was not entitled to act on Deutsche
Bank’s behalf because the bank was not the “true mortgagee” of the debt. We
have already held that Deutsche Bank is the holder of the note and thus the
“true mortgagee.” The TDCA claim fails.


II. RESPA
      The Whittiers claim that the district court erred in granting the
defendants summary judgment on their RESPA claim. RESPA requires a loan
servicer to respond appropriately to a borrower’s qualified written request by
certain deadlines. See 12 U.S.C. § 2605(e). To recover, a claimant must show
that actual damages resulted from a RESPA violation. § 2605(e), (f).
      The parties do not dispute that the Whittiers sent Ocwen a qualified
written request for account information. Ocwen responded to the request, but
the font size made the response largely illegible. The district court did not
reach the question of whether this illegible response constituted a failure to
respond in a timely manner.          Instead, the court determined that the
defendants were entitled to summary judgment because the Whittiers failed to
show any actual damages resulting from the response. The court rejected the
Whittiers’ argument that harm to their credit rating and the expenses of
litigation constitute actual damages.
      On appeal, the Whittiers argue that the district court should not have
reached the question of damages. Rather, they submit that the court should
have used its authority under Federal Rule of Civil Procedure 42(b) to bifurcate
the issues of liability and damages. This argument is baseless. The Whittiers
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present no law to suggest that bifurcation of a RESPA claim is mandatory. The
rule merely provides that a court may order separate trials “[f]or convenience,
to avoid prejudice, or to expedite and economize . . . .” FED. R. CIV. P. 42(b).
We see no error in the district court’s procedural approach.
      The Whittiers further argue that the district court incorrectly relied on
another district court’s opinion to support its holding that the attorney’s fees
and expenses of litigation they incurred cannot, as a matter of law, satisfy the
actual damages requirement of a RESPA claim.            See Steele v. Quantum
Servicing Corp., No. 3:12-CV-2897-L, 2013 WL 3196544 (N.D. Tex. June 25,
2013). The Steele court reached that conclusion because it found no authority
to support the proposition that litigation fees and expenses are actual damages
under RESPA. Id. at *8. We agree with the result, as RESPA allows for fees
and expenses in addition to actual damages. See 12 U.S.C. § 2605(f).


III. Breach of Contract and Negligent Misrepresentation
      In their breach of contract claim, the Whittiers allege Litton sent them
a letter in 2011 promising a loan modification. The district court held that the
claim was barred by the Statute of Frauds.
      Under Texas law, a loan agreement involving an amount in excess of
$50,000 is not enforceable unless it is in writing and signed by the party to be
bound. TEX. BUS. & COM. CODE ANN. § 26.02(b). It is undisputed that the
Whittiers’ loan modification is subject to this provision. The parties do dispute,
however, whether the letter satisfies the Statute of Frauds.
      The 2011 letter contains none of the terms of the alleged modification.
Instead, the letter informs the Whittiers of the necessary steps that must be
taken to qualify for a loan modification.        It does not specify the actual
modifications, if any, that would be made to the note and deed of trust.


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Accordingly, the alleged modification fails to satisfy the Statute of Frauds and
the Whittiers’ breach of contract claim is thereby barred.
      The Whittiers’ negligent misrepresentation claim necessarily also fails.
A negligent misrepresentation claim “may not be used to circumvent the
Statute of Frauds.” Lam v. Nguyen, 335 S.W.3d 786, 790 (Tex. App.—Dallas
2011). “[A]n indirect attempt to recover for the breach of an unenforceable
promise is barred by the Statute of Frauds.”         Id. (citation omitted).   The
Whittiers seek damages for an alleged negligent misrepresentation relating to
the unenforceable 2011 letter. Allowing the Whittiers to pursue this claim
would circumvent the Statute of Frauds.


IV. Promissory Estoppel
      The district court also rejected the Whittiers’ claim for promissory
estoppel. The claim is based on Ocwen’s alleged failure to grant a modification
in 2011. As this court has previously noted in an unpublished opinion that we
find persuasive, to succeed on a promissory estoppel claim, a plaintiff must
introduce evidence demonstrating that a defendant promised to reduce a
modification to a writing that would comply with the Statute of Frauds. Milton
v. U.S. Bank Nat. Ass’n, 508 F. App’x 326, 329 (5th Cir. 2013) (citation omitted).
The Whittiers have failed to satisfy this burden.


V. DTPA
      The Whittiers also raised a DTPA claim. They have waived review of
this issue on appeal. “Failure to provide any legal or factual analysis of an
issue results in waiver.” Am. States Ins. Co. v. Bailey, 133 F.3d 363, 372 (5th
Cir. 1998) (citation omitted). While the Whittiers identify the DTPA in their
list of issues on appeal, they fail to provide any factual or legal analysis of the
issue and it is therefore waived.
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VI. Counterclaims
      The Whittiers’ final issue relates to the district court’s grant of summary
judgment to the defendants on their counterclaims. They argue the district
court erred for two reasons. The first argument is merely a recitation of their
previous contention that the defendants were not proper holders of the note.
      The second argument suggests that the defendants’ counterclaims were
not properly pled. The Whittiers argue that the defendants failed to repeat
their counterclaims in their answer to the first amended complaint.         The
district court held that this argument was waived because the Whittiers
responded to the counterclaims in an answer. Technical defects in presenting
affirmative defenses may be waived by a plaintiff’s response to the defense.
Bradberry v. Jefferson Cnty, Tex., 732 F.3d 540, 553 (5th Cir. 2013). We
conclude that any procedural error was waived here.
      AFFIRMED.




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