     Case: 15-20618   Document: 00514093256     Page: 1   Date Filed: 07/28/2017




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

                                 No. 15-20618                          FILED
                                                                   July 28, 2017
                                                                  Lyle W. Cayce
ASHRAF MAHMOUD; VALERIE JACKSON,                                       Clerk

                  Plaintiffs - Appellants

v.

DE MOSS OWNERS ASSOCIATION, INCORPORATED;
CREATIVE MANAGEMENT COMPANY; FRANK, ELMORE,
LIEVENS, CHESNEY & TURET, L.L.P.; KRISTI A. SLAUGHTER;
KHOSROW ABTAHI,

                  Defendants - Appellees



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


Before JONES, CLEMENT, and HIGGINSON, Circuit Judges.
EDITH H. JONES, Circuit Judge:
      This appeal arises from the 2013 foreclosure sale of appellants Ashraf
Mahmoud and Valerie Jackson’s condominium unit in Houston, Texas. In
2013, Mahmoud and Jackson filed suit against the condo owners association,
the company that manages the day-to-day affairs of the complex, the law firm
hired to collect on delinquent homeowner accounts, and the attorney
responsible for their account.    Appellants alleged common law claims for
breach of contract, wrongful foreclosure, negligent misrepresentation, and
breach of fiduciary duty, and violations of the Federal Debt Collection Practices
Act, Texas Fair Debt Collection Practices Act, and Texas Deceptive Trade
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                                    No. 15-20618
Practices Act. 15 U.S.C. §§ 1692c, e, and f; Tex. Fin. Code Ann. § 392; Tex.
Bus. & Com. Code Ann. § 17. The district court granted summary judgment
on all claims. We affirm.
                                           I
      In 2001, Mahmoud and Jackson purchased condominium unit 806
located at 6606 De Moss Drive, Houston, Texas. The condo is part of De Moss
Condominiums, which is run by the De Moss Owners Association (the
Association) and governed by the Condominium Declaration (the Declaration)
filed in Harris County, Texas in 1981.          Paragraph 5.1 of the Declaration
requires all owners to pay monthly assessments and grants the Association the
power to assess late fees of $5.00 for each late payment, a late fee that was
subsequently increased to $25.00. Common assessments include assessments
based on non-recurring costs for repairs and improvements to the common
areas of the premises. Paragraph 5.9 grants the Association a lien to secure
payment of these assessments. Finally, paragraph 3.10 allows the Association
to charge individual owners for repairs to common elements willfully or
negligently damaged by an owner or his or her guests.
      Creative Management Company (Creative) managed the day-to-day
operations of the condo complex. By letter dated August 24, 2012, Creative
notified Jackson and Mahmoud that their account was delinquent by $1611.80
and gave them one month to make payment. The letter listed dated and
itemized charges, including: a repair from May 2006, a repair from April 2007,
a repair from February 2010, maintenance fees from July and August 2012,
and an August 2012 late penalty. 1 The letter allowed Jackson and Mahmoud


     1 The letter included a breakdown of the balance:
      05/10/2006    09/05 REPAIR                               195.00
      04/09/2007    PLUMBING REPAIR                            346.80
      02/16/2010    ROYAL INVESTMENT SVC                       575.00
      07/01/2012    MAINTENANCE FEES                           220.00
                                           2
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                                  No. 15-20618
30 days from receipt to challenge the validity of the debt or the account would
be turned over to an agent or an attorney to initiate foreclosure proceedings or
to file a lawsuit to recover the total amount due. The Association then turned
the collection over to Appellee Kristi Slaughter of Frank, Elmore, Lievens,
Chesney & Turet, L.L.P. (Appellee FELCT).
      Slaughter sent Mahmoud and Jackson a letter dated October 8, 2012,
identifying the balance on the “Resident Transaction Report” maintained by
Creative as $2,171.80, and informing Mahmoud and Jackson that the debt was
secured by a continuing lien against their condo and failure to pay the total
amount within 30 days would result in a nonjudicial foreclosure on the lien.
Page one of the letter stated that the balance was secured by a continuing lien
against their condominium and that failure to pay the total amount “on or
before the expiration of thirty (30) days from and after the date hereof” would
result in nonjudicial foreclosure. Page two contained a notice, in all-caps,
which included the following warning three times: “UNLESS YOU DISPUTE
THE VALIDITY OF THIS DEBT OR ANY PORTION THEREOF WITHIN
THIRTY (30) DAYS AFTER RECEIVING THIS LETTER, WE WILL ASSUME
THE DEBT IS VALID.” Mahmoud and Jackson never disputed the validity of
the debt before filing this lawsuit.
      Mahmoud and Jackson sent in three checks covering the three most
recent monthly assessments ($750), but not the full amount of the debt owed
($2,171.80). Slaughter responded with two separate letters dated November
12, 2012, advising the owners that their unit would be put up for foreclosure
sale and returning the checks. The charging of attorneys’ fees and assessments
had increased the balance due to $2,796.80. The property was posted for


      08/01/2016   MAINTENANCE FEES                     250.00
      08/16/2012   LATE PENALTY                          25.00
                                                      1,611.80
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                                 No. 15-20618
nonjudicial foreclosure on December 4, 2012. Both letters gave Mahmoud and
Jackson until December 3 to pay the full amount or submit an Association-
approved payment plan proposal.
      On November 17, Mahmoud and Jackson sent a letter again including
three checks for the most recent monthly assessments and requesting a
breakdown of all outstanding fees to set up a payment plan. On November 20,
2012, Slaughter responded with the Resident Transaction Report which
included all charges dating back to January 2006, returned the partial
payment, and reminded them that they needed to establish an approved
payment plan with the Association prior to the foreclosure date. A similar set
of letters was exchanged a week later—Mahmoud and Jackson sending partial
payment on November 27, 2012 and Slaughter returning it on November 28,
2012. Mahmoud acknowledged receiving Slaughter’s November 28 letter and
admitted that he did not contact the Association, Creative, or the Association’s
lawyers about its contents.
      Slaughter, with the Association’s permission, elected to delay the
foreclosure sale and gave Mahmoud and Jackson more time to work out a
payment plan. Her letter of December 10 confirms this forbearance until
January 10, 2013 to make full payment (now increased to $3,321.80) or work
out a payment plan. Once again, Mahmoud and Jackson sent an incomplete
payment ($240), which was rejected, and no payment plan was forthcoming. A
properly noticed foreclosure sale occurred on February 5, 2013. The amount
owed to the Association ($4,861.80) was deducted from the sale price ($18,500)
and the remainder deposited in the FELCT trust account ($13,638.20).
Slaughter held the funds until receipt of a signed release. FELCT paid the
$13,638.20 to Mahmoud and Jackson in February 2014.            The new owner
conveyed the unit back to Mahmoud and Jackson on June 17, 2014 via


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                                 No. 15-20618
warranty deed. Ultimately, Mahmoud and Jackson were never dispossessed
of the condo.
      Mahmoud and Jackson filed suit on multiple common law and statutory
claims and sought partial summary judgment as to liability (not damages) in
January 2015.      In March and April 2015, the Appellees sought summary
judgment as to the claims against them. In September 2015, after hearing oral
arguments, the district court issued a 23-page Memorandum Opinion and
Order and entered judgment in favor of the Appellees. Mahmoud and Jackson
timely appealed.
                                       II
      This court must “review the trial court’s evidentiary rulings under an
abuse of discretion standard.” Curtis v. M&S Petroleum, Inc., 174 F.3d 661,
667 (5th Cir. 1999). Evidentiary rulings, however, are also subject to harmless
error review, “so even if a district court has abused its discretion, we will not
reverse unless the error affected ‘the substantial rights of the parties.’”
Heinsohn v. Carabin & Shaw, P.C., 832 F.3d 224, 233 (5th Cir. 2016) (quoting
Nunez v. Allstate Ins. Co., 604 F.3d 840, 844 (5th Cir. 2010)).
      With the record properly defined, this court then reviews 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). This court may affirm the
district court’s grant of summary judgment on any ground supported by the
record and presented to the district court. Hernandez v. Velasquez, 522 F.3d
556, 560 (5th Cir. 2008).




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                                 No. 15-20618
                                      III
      Mahmoud and Jackson’s evidentiary objection was that the Certificate
of Corporate Resolution regarding the increased late fees was hearsay,
conclusory, and lacked foundation. They moved to strike the exhibit. In their
motion for summary judgment, Mahmoud and Jackson additionally raised five
new objections, all based on lack of foundation. Appellees argued successfully
to the district court that the objections were waived.
      On appeal, Mahmoud and Jackson contend that the district court did not
identify any authority holding that objections to summary judgment evidence
not made the first time the evidence is presented to the court are waived.
Regardless whether the district court abused its discretion, however, any error
was harmless. The issue whether the late fee increase was properly adopted
by the Association is not dispositive of any claims, so it did not affect the
outcome of the litigation and did not affect their substantial rights.       See
Heinsohn, 832 F.3d at 233.
                                       IV
      We consider separately each of the claims asserted by Mahmoud and
Jackson. First, they argue that the district court erred in granting summary
judgment for three different alleged breaches of the Declaration: that the
Condo Defendants charged and demanded excessive late fees, wrongfully
included time-barred debt in the assessment lien, and charged and ultimately
foreclosed upon repair assessments without giving them notice and an
opportunity to be heard. Under Texas law, it is a “strict” and “well established
rule” that “a party to a contract who is himself in default cannot maintain a
suit for its breach.” Dobbins v. Redden, 785 S.W.2d 377, 378 (Tex. 1990)
(quoting Gulf Pipe Line Co. v. Nearen, 135 Tex. 50, 138 S.W.2d 1065, 1068 (Tex.
Comm’n App. 1940)).


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                                  No. 15-20618
      Mahmoud and Jackson were indisputably in default under the contract.
Paragraph 3.11. of the Declaration states: “Each Owner shall comply strictly
with the provisions of this Declaration, the By-Laws and the decisions and
resolutions of the Association adopted pursuant thereto.”         Paragraph 5.9
provides that “[a]ll sums assessed but unpaid by a Unit Owner for its share of
Common Expenses chargeable to its respective Condominium Unit . . . shall
constitute a lien on such Unit” and expressly gives the Association the right to
foreclose on such a lien. Mahmoud and Jackson’s failure to pay their balance
and to make timely payments on their monthly assessments was a material
breach of the Declaration. See E. Friedman & Assoc., Inc. v. ABC Hotel & Rest.
Supply, Inc., 412 S.W.3d 561, 565 (Tex. App. 2013) (“One of the considerations
in determining whether a breach is material is the extent to which the
nonbreaching party will be deprived of the benefit that it could have reasonably
anticipated from full performance.”). Mahmoud and Jackson’s argument that
the Association waived the right to timely payment is incorrect; the
Association’s election to receive untimely payments, for which a late fee was
charged, in no way compromised its contractual rights.           Likewise, their
performance was not prevented or excused by the Association’s allegedly
erroneous statements about their balance due; this argument, as the
Association points out, conflates performance with cure. Summary judgment
on this claim was proper.
                                        V
    Mahmoud and Jackson next assert that because of material disputed fact
issues, their wrongful foreclosure claim should have gone to trial. “A wrongful-
foreclosure claim under Texas law has three elements: (i) a defect in the
foreclosure sale proceedings; (ii) a grossly inadequate selling price; and (iii) a
causal connection between the defect and the grossly inadequate selling price.”
Villarreal v. Wells Fargo Bank, N.A., 814 F.3d 763, 767-68 (5th Cir. 2016)
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                                 No. 15-20618
(quoting Miller v. BAC Home Loans Servicing, L.P., 726 F.3d 717, 726 (5th Cir.
2013). Appellants offer no authority—and we have found none—to support the
conclusion that an inaccurate balance included in a default notice constitutes
a defect in the foreclosure proceedings, they do not allege that the sale price
was grossly inadequate, and they never allege any causal connection between
the defect and the sale price. Therefore, the district court did not err on this
ground for granting summary judgment.
                                      VI
      Although they challenge the adverse summary judgment on their claim
for negligent misrepresentation, Mahmoud and Jackson failed to cite specific
misrepresentations by the Appellees.        A cause of action for negligent
misrepresentation in Texas requires: “(1) the representation is made by a
defendant in the course of his business, or in a transaction in which he has a
pecuniary interest; (2) the defendant supplies ‘false information’ for the
guidance of others in their business, (3) the defendant did not exercise
reasonable care or competence in obtaining or communicating the information,
and (4) the plaintiff suffers pecuniary loss by justifiably relying on the
representation.” Fed. Land Bank Ass’n v. Sloane, 825 S.W.2d 439, 442 (Tex.
1991).
      Both the Attorney and Condo Defendants sought and obtained summary
judgment on these claims.        But, as just noted, it is not clear what
representations Mahmoud and Jackson allege were false or misleading, and
there is no evidence that Mahmoud and Jackson either entered into or
withdrew from any transaction on the basis of any statements made by the
Appellees. See McCamish, Martin, Brown & Loeffler v. F.E. Appling Interests,
991 S.W.2d 787, 791 (Tex. 1999). Again, the district court did not err.




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                                  No. 15-20618
                                       VII
       The most legally plausible arguments asserted by Mahmoud and
Jackson concern the summary judgment awarded in favor of the Attorney
Defendants on the Fair Debt Collection Practices Act (FDCPA) claims.
Specifically, the Appellants contend that the debt collection notices sent by the
Attorney Defendants were defective, 15 U.S.C. § 1692g, and the Attorney
Defendants unlawfully threatened to sue to recover a time-barred debt, see
generally 15 U.S.C. §§ 1692e and f.
      The FDCPA, 15 U.S.C. § 1692 et seq., imposes civil liability on “debt
collector[s]” for certain prohibited debt collection practices. The Act regulates
interactions between consumer debtors and “debt collector[s],” defined to
include any person who “regularly collects . . . debts owed or due or asserted to
be owed or due another.” §§ 1692a(5),(6). Attorneys qualify as debt collectors
for purposes of the FDCPA when they regularly engage in consumer debt
collection, including but not limited to litigation on behalf of a creditor client.
Heintz v. Jenkins, 514 U.S. 291, 299, 115 S. Ct. 1489, 1493 (1995). There is no
serious contention in this case that the Attorney Defendants were not “debt
collectors.” Nor is there any dispute that condominium association fees may
qualify as debts regulated by the FDCPA. § 1692a(5) (debt is defined as “any
obligation or alleged obligation of a consumer to pay money arising out of a
transaction in which the money . . . [is] primarily for personal, family, or
household purposes . . . .”); see Newman v. Boehm, Pearlstein & Bright, Ltd.,
119 F.3d 477, 481-82 (7th Cir. 1997) (homeowners’ assessments are debts
within FDCPA because they “directly benefit each household in the
development”).
                                        A.
      As an initial matter, the Attorney Defendants maintain an overarching
defense that, when they engaged in enforcing the Association’s lien by
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                                  No. 15-20618
nonjudicial foreclosure, their actions were exempt from the FDCPA except for
§ 1692(f)(6), which specifies the circumstances under which a debt collector
may take or threaten nonjudicial foreclosures:
            A debt collector may not use unfair or unconscionable
            means to collect or attempt to collect any debt.
            Without limiting the general application of the
            foregoing, the following conduct is a violation of this
            section: … (6) Taking or threatening to take any
            nonjudicial action to effect dispossession or
            disablement of property if—(A) there is no present
            right to possession of the property claimed as
            collateral through an enforceable security interest;
            (B) there is no present intention to take possession of
            the property; or (C) the property is exempt by law from
            such dispossession or disablement.

This broad proposition was, however, rejected by this court in Kaltenbach v.
Richards, which held that “a party who satisfies § 1692a(6)’s general definition
of a ‘debt collector’ is a debt collector for the purposes of the entire FDCPA even
when enforcing security interests.” 464 F.3d 524, 529 (5th Cir. 2006). This
court did not, however, decide “whether . . . enforcement of the security
interest . . . constituted a ‘communication in connection with the collection of
any debt’ within the meaning of § 1692g,” Id. at n.5, and we need not address
the question in this appeal while addressing each of Mahmoud and Jackson’
claims.
                                        B.
      Addressing first the Appellants’ § 1692g claim, we may assume arguendo
that this provision applied to Slaughter’s demand letters. The FDCPA requires
debt collectors to provide notice that unless the consumer, with thirty days
after receipt of the notice, disputes the validity of the debt, or any portion
thereof, the debt will be assumed to be valid, § 1692g(a)(3), and no collection
activities and communication during the 30-day period may overshadow or be

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                                  No. 15-20618
inconsistent with the disclosure of the consumer’s right to dispute the debt,
§ 1692g(b).    Courts evaluate any potential deception in debt-related
communications under an “unsophisticated” or “least sophisticated” consumer
standard. Taylor v. Perrin, Landry, deLaunay & Durand, 103 F.3d 1232, 1236
(5th Cir. 1997). “That is, in determining whether the defendant’s actions are
deceptive under the FDCPA we must assume that the plaintiff-debtor is
neither shrewd nor experienced in dealing with creditors.” Goswami v. Am.
Collections Enter., Inc., 377 F.3d 488, 495 (5th Cir. 2004).
      A fair interpretation of Slaughter’s demand letter dated October 8, 2012,
pursuant to this stringent standard demonstrates there is no violation of the
30-day rule.     “Courts have generally found contradiction or apparent
contradiction of the printed § 1692g notice where payment is demanded in a
concrete period shorter than the 30-day statutory contest period.” McMurray
v. ProCollect, Inc., 687 F.3d 665, 670 (5th Cir. 2012) (quoting Peter v. GC Servs.
L.P., 310 F.3d 344, 348 (5th Cir. 2002)). We must read the notice in its entirety
and then determine if there is a concrete period shorter than is required. Here,
the letter stated once on page one that Mahmoud and Jackson needed to pay
“on or before the expiration of thirty (30) days from and after the date hereof”
or nonjudicial foreclosure would occur. But three times on page two, the letter
repeated that “[U]NLESS YOU DISPUTE THE VALIDITY OF THIS DEBT
OR ANY PORTION THEREOF WITHIN THIRTY (30) DAYS AFTER
RECEIVING THIS LETTER, WE WILL ASSUME THE DEBT IS VALID.”
This notice does not demand a concrete action period shorter than 30-days from
receipt of the letter when read by the least sophisticated consumer.
      Reinforcing our conclusion, other circuits have clearly held that if “any
confusion created by the ambiguity on the front of the letter dissipates when
read in conjunction with the language on the back,” then there is no violation.
Jacobson v. Healthcare Fin. Servs., Inc., 516 F.3d 85, 93 (2d Cir. 2008) (quoting
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                                  No. 15-20618
McStay v. I.C. Sys., Inc., 308 F.3d 188, 191 (2d Cir.2002)). The district court
did not err in determining that the notice did not violate § 1692g.
                                       C.
      The second set of FDCPA issues raised by Mahmoud and Jackson is that
the Attorney Defendants’ efforts to collect on allegedly partially time-barred
debt violated § 1692e and § 1692f. Concerning § 1692e, they allege violations
through “the false representation of” “the character, amount, or legal status of
any debt,” “[t]he threat to take any action that cannot legally be taken or that
is not intended to be taken,” and “[t]he use of any false representation or
deceptive means to collect or attempt to collect any debt or to obtain
information concerning a consumer.” 15 U.S.C. § 1692e(2)(A), (5), (10). They
claim the Attorney Defendants violated § 1692f by “[t]he collection of any
amount (including any interest, fee, charge, or expense incidental to the
principal obligation) unless such amount is expressly authorized by the
agreement creating the debt or permitted by law.” 15 U.S.C. § 1692f(1).
      Notably, Mahmoud and Jackson did not take advantage of the
verification periods they were offered to challenge any portion of the debt, yet
in their lawsuit they contend that any attempt to foreclose based on $541.80 of
the original $2,171.80 balance was time-barred. The Texas Property Code
clearly states that an association’s lien against a unit owner may include:
“regular and special assessments, dues, fees, charges, interest, late fees, fines,
collection costs, attorney’s fees, and any other amount due to the association
by the unit owner or levied against the unit by the association.” Tex. Prop.
Code § 82.113(a). The Declaration declared that assessments against condo
owners are “covenants running with the land.” Therefore, it is appropriate to
examine the whole debt—repairs, monthly assessments, late fees, collection
fees, and attorneys’ fees—within the context of the Association’s lien.


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        The threshold question is whether any of the debt is time-barred,
specifically the portion that originated with two repairs in 2006 and 2007.
Formal, itemized demand notices on the overall obligation for condo fees were
sent to the owners beginning in August 2012. The parties do not dispute that
Mahmoud and Jackson were in default for their condo payments from and after
about mid-2012, and as to those there is no question of limitation. There is,
however, no Texas case law identifying the statute of limitations that applies
to nonjudicial foreclosure of liens on real property created to ensure the
payment of condominium association fees and assessments. We do not rule on
this novel issue of Texas law but will assume arguendo that limitations barred
recovery of this small portion of the debt. 2


       2  The linchpin of the dissent is the superficial conclusion that under Texas law, a suit
may not be filed to collect a “debt” that accrued more than four years before the instigation
of litigation. Tex. Civ. Prac. & Rem. Code Ann. Sec. 16.004(a)(3). Because a lien at common
law is “simply an incident of, and inseparable from the debt which it secures,” it has been
held that “if limitations prevent collection of the debt, the lien becomes unenforceable.”
Hoarel Sign Co. v. Dominion Equity Corp., 910 S.W.2d 140, 144 (Tex. App. 1995), writ denied
(May 10, 1996). But the dissent’s wading into this uncharted territory is imprudent and
inconclusive. First, the intermingling of the obligations to pay ongoing fees and assessments
with the continuing lien makes this an unique case under Texas law. Condominium
association fees and assessments are governed by a specific section of the Texas Property
Code, Sec. 82.113, which prescribes enforcement by nonjudicial foreclosure according to the
procedures prescribed for real property liens, Tex. Prop. Code Ch. 52. A four-year statute of
limitations governs foreclosures of “real property liens”, but the cause of action for foreclosure
does not accrue on an installment obligation “until the maturity date of the last note,
obligation, or installment.” Tex. Civ. Prac. & Rem. Code Ann. Sec. 16.035(b), (e). It is true
that Sec. 16.035(g)’s definition of “real property lien” does not appear to cover condominium
association fees. The obligation to pay such fees, however, has been described by the Texas
Supreme Court as a covenant running with the land and as creating a contractual lien on the
real property. But cf. Hoarel Sign Co., 910 S.W.2d at 144 (applying common law limitations
because the materialmen’s lien there derived from improvements “that d[id] not become part
of the real estate.)” It is possible that a lacuna exists in Texas’s limitations statutes for these
types of assessments and fees. Cf. Tex .Civ. Prac. & Rem. Code Sec. 16.051 (residual
limitations statute excludes actions for foreclose real property).
         Second, even if a four-year statute applies, exactly when and how limitations began
to run on Mahmoud and Jackson’s obligations is unclear. For instance, it has been held that
no limitations bar prevents suit by a party to an open account where the defendant did not
prescribe and the court accordingly presumes that any payments received should have been
applied to the oldest outstanding obligation. Watson v. Cargill, Inc., Nutrena Div.,
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                                      No. 15-20618
       But this preliminary assumption hardly carries the day for Mahmoud
and Jackson, as they and the dissent would contend. No Fifth Circuit authority
compels the holding that a nonjudicial foreclosure on a partially time-barred
debt can violate FDCPA Sections 1692e or f.                In Castro v. Collecto, Inc.,
634 F.3d 779, 783 (5th Cir. 2011), this court went only so far as to say that
“threatening to sue on time-barred debt may well constitute a violation of the
FDCPA.” Id. (emphasis added). This court’s more recent decision in Daugherty
v. Convergent Outsourcing, Inc., 836 F.3d 507 (5th Cir. 2016) extended Castro
to the extent it overturned a dismissal on the pleadings and held that “a
collection letter that is silent on litigation, but which offers to ‘settle’ a time-
barred debt without acknowledging that such debt is judicially unenforceable,
can be sufficiently deceptive or misleading to violate the FDCPA.”                       Id.
(emphasis added). The court holds merely that seeking collection “can be”
violative, which is a far cry from implying, especially in the face of the
summary judgment materials before us, that every attempt to collect such a
debt infringes FDCPA-created rights.
       Daugherty, moreover, is factually distinguishable for three significant
reasons. First, there was no dispute that plaintiff’s credit card debt had aged
“over the course of many years;” the debt had been sold to a collection agency.
Id.at 509. Here, less than 25% of the debt is allegedly time-barred. Second,
Daugherty was premised on the undisputed assertion that limitations had run



573 S.W.2d 35 (Tex. Civ. App--Waco, 1978); Prowell v. Berry-Barnett Gro. Co., 462 S.W.2d 53
(Tex. Civ. App.--Waco, 1970) (writ refused). It has also been held, in a suit for partition,
where a cotenant makes improvements to or pays expenses for jointly owned property, which
benefit the common ownership, the cotenant may recover them irrespective of statutes of
limitations so long as the cotenancy continued. Tapp v. Tapp, 134 S.W.2d 683 (Tex. Civ.
App.--Texarkana 1939). Finally, it has been held that where a deed of trust authorized the
trustee to pay taxes and insurance, i.e. ongoing costs, on mortgaged property, “the mere fact
that the debt was barred [by limitations] does not . . . make against the deed of trust lien
securing the taxes and insurance subsequently paid.” Burke v. Guilford Mtg. Co., 161 S.W.2d
574, 582 (Tex. Civ. App.--Dallas 1942).
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                                       No. 15-20618
as to the entire debt, whereas the application of limitations as a bar to
nonjudicial foreclosure here (whether on the whole debt or only the allegedly
time-barred portion) is uncertain. Third, Daugherty remarks that the debt
collector’s offer of a discounted “settlement” that invited partial payment,
without disclosing pitfalls like the potential renewal of the entire obligation,
could be misleading to the unsophisticated consumer. Id. at 512-13. Here,
Mahmoud and Jackson were not misled about the amounts they owed, three
quarters of which were not time-barred, nor were they misled about the
potential consequence of nonpayment: nonjudicial foreclosure on their condo.
That they were not misled is confirmed by the subsequent course of events: the
purchaser at foreclosure paid for the condo in an amount fully burdened with
the overdue fees and assessments, those amounts were deducted from the
purchase price, and a rebate was paid to Mahmoud and Jackson.
       For reasons similar to the factual background in Daugherty, the other
circuits’ cases on which the appellants (and dissent) rely exhibit dubious
exercises of collection activity on indisputably and wholly time-barred debt.
Buchanan v. Northland Grp, Inc., 776 F.3d 393, 397 (6th Cir. 2015); McMahon
v. LVNV Funding, LLC, 744 F.3d 1010, 1020 (7th Cir. 2014). But see Huertas
v. Galaxy Asset Mgmt., 641 F.3d 28, 33 (“[i]n the absence of a threat of litigation
or actual litigation, no violation of the FDCPA has occurred when a debt
collector attempts to collect on a potentially time-barred debt that is otherwise
valid,” (quoting Freyermuth v. Credit Bureau Svces., Inc., 248 F.3d 767 (8th
Cir. 2001). 3 Additionally, both cases were decided in appeals from dismissal



       3 We are bound by Daugherty, but I agree with the broader principles expressed in
Huertas, Freyermuth, and in Judge Kethledge’s dissent in Buchanan Grp., 776 F.3d at 400-
02. In nearly every state, the fact that a debt is time-barred from collection by a lawsuit does
not extinguish the obligation. And particularly where a collection letter threatens no legal
action, even an unsophisticated debtor knows enough to throw it away. Using moral suasion
in these matters is not abusive or overbearing.
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                                  No. 15-20618
on the pleadings, and in each one the courts qualified their holdings. Thus,
McMahon states: “We do not hold that it is automatically improper for a debt
collector to seek re-payment of time-barred debts; some people might consider
full debt re-payment a moral obligation, even though the legal remedy for the
debt has been extinguished.” 744 F.3d at 1020. The majority in Buchanan
concede “[n]or does a ‘settlement offer’ with respect to a time-barred debt by
itself amount to a threat of litigation,” 776 F.3d at 397, but “consumers might
still be confused about the enforceability of a debt or the pitfalls of partial
payment.” Id. at 400.
      To repeat once more, this case is unlike the cases that allowed FDCPA
claims to proceed because of (1) its summary judgment posture; (2) the fact
that only a small portion of the debt may have been time-barred; and (3) the
parties’ hot dispute over whether in fact even that small portion was both time-
barred and could not be enforced by nonjudicial foreclosure.             Without
compelling authority, we decline to extend potential FDCPA liability to these
circumstances.
      It is also important to note that nonjudicial foreclosures on real property
are an area traditionally dominated and closely regulated by state law, and
federalism concerns are heightened in fields “which the states have
traditionally occupied.” Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230,
67 S. Ct. 1146 (1947).
      “When one interpretation of an ambiguous federal statute would create
a conflict with state foreclosure law and another plausible interpretation would
not, we must adopt the latter interpretation.” Ho, 840 F.3d at 626. In Ho, the
Ninth Circuit, quoting the Supreme Court, declined to “‘construe federal law
in a manner that interferes with [California's] arrangements for conducting’
non-judicial foreclosures.” Id. (quoting Sheriff, 136 S. Ct. at 1602). To construe
§§ 1692e and f the way Mahmoud and Jackson request would interfere with
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                                  No. 15-20618
Texas’s carefully articulated arrangements for conducting nonjudicial real
property foreclosures by creating causes of action where state law finds no
wrongful foreclosure. Moreover, applying these provisions to the debts owed
by Mahmoud and Jackson makes no sense, inasmuch as the couple received
repeated notices, in compliance with § 1692g as well as state law, and had
multiple opportunities short of nonjudicial foreclosure in which to challenge
the allegedly time-barred portion.
      We do not hold that nonjudicial real property foreclosures in Texas are
wholly exempt from the FDCPA;          under the facts of this case, however,
summary judgment was properly granted on Appellants’ §§ 1692e and f claims
based on the contention that part of the debts they owed were time-barred.
                                       VIII
      Mahmoud and Jackson argue that the district court erred in granting
summary judgment to the Attorney Defendants on their claim under the Texas
Debt Collection Act (TDCA), Tex. Fin. Code Ann. § 392.304(a)(8), asserting
that “the summary judgment proof shows Slaughter’s demands and threat of
foreclosure were based in part on time-barred debt.” They do not identify—nor
have we found—any authority that supports the position that attempts to
collect time-barred debt violate the TDCA. This argument is therefore forfeited
for lack of sufficient briefing. See FED. R. APP. P. 28(a)(8)(A).
      The Texas Deceptive Trade Practices Act (DTPA) provides that “a
consumer” may bring an action for a variety of deceptive business practices
listed under the Act. Tex. Bus. & Com. Code Ann. § 17.50(a). The district court
held that “[t]he payment of monthly maintenance fees to a condominium
association does not constitute a ‘purchase’ under the DTPA, such that a unit
owner, like the plaintiff, would qualify as a consumer.” On appeal, despite the
Texas Supreme Court’s clear and consistent holdings that “[o]nly a ‘consumer’
can maintain a cause of action directly under the DTPA,” Mahmoud and
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                                No. 15-20618
Jackson do not contend that they are consumers within the statute’s meaning.
Crown Life Insurance v. Casteel, 22 S.W.3d 378, 386 (Tex. 2000); Cruz v.
Andrews Restoration, Inc., 364 S.W.3d 817, 822 (Tex. 2012); Melody Home Mfg.
Co. v. Barnes, 741 S.W.2d 349 (Tex. 1987); Flenniken v. Longview Bank and
Trust Co., 661 S.W.2d 705, 706 (Tex. 1983). Therefore, the district court did
not err.
                                      IX
      Mahmoud and Jackson argue that the district court erred in granting
summary judgment on their claim that the Attorney Defendants breached
their fiduciary duty when they refused to deliver the excess foreclosure sale
proceeds without a release.    This claim is meritless.      The existence of a
fiduciary relationship between the plaintiffs and defendants is a prerequisite
to finding a breach of duty. Jones v. Blume, 196 S.W.3d 440, 447 (Tex. App. -
Dallas 2006, pet. denied). Mahmoud and Jackson cannot establish that the
Attorney Defendants owed them a fiduciary duty.           Indeed, this court has
specifically observed that foreclosure trustees do not owe the party subject to
the foreclosure sale a fiduciary duty. Stephenson v. LeBoeuf, 16 S.W.3d 829,
837 (Tex. App. 14th 2000).
                                      X
      Finally, Mahmoud and Jackson sought declaratory relief “to determine
their rights and true obligations under the agreements and statutes governing
their ownership of the Property.” They make assertions about the obligations
created by the Declaration, but there is neither supporting argument nor case
law authority. This argument is forfeited for lack of sufficient briefing. See
FED. R. APP. P. 28(a)(8).
                                     ***
      For the foregoing reasons, we AFFIRM the district court’s judgment.


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                                       No. 15-20618
STEPHEN A. HIGGINSON, Circuit Judge, dissenting in part:
       Concerned about the consequences for Texas property owners, I
respectfully dissent from the majority opinion’s holding that threatening to
nonjudicially foreclose to collect the entirety of a debt that is partially time-
barred cannot violate the FDCPA. The majority opinion emphasizes that this
case is unique because of “its summary judgment posture.” But the majority
opinion affirms summary judgment based on a “hot dispute”—the applicable
statute of limitations, which is a legal question to be decided by the court.
       And the majority opinion incorrectly holds that, as matter of law, FDCPA
claims must fail when “only a small portion of the debt [sought to be collected]
may have been time-barred.” I would hold instead that, consistent with the
text and spirit of the Act, demanding full repayment of a partially time-barred
debt under the threat of foreclosure—implying that the entirety of the debt is
legally enforceable—violates the FDCPA. We should reverse and remand for
further proceedings on Mahmoud and Jackson’s claims under 15 U.S.C.
§§ 1692e and 1692f. 1
       Because the majority opinion presupposes two elements of Mahmoud
and Jackson’s FDCPA claims—whether the Act applies to foreclosure-related
conduct and whether foreclosure on some of the assessments here was time-


       1 As an initial matter, to the best of my review of the record, the Attorney Defendants
never actually moved for summary judgment on Mahmoud and Jackson’s FDCPA claims
under §§ 1692e(2), (5), (10), and 1692f. Mahmoud and Jackson alleged distinct violations of
the Act, specifically §§ 1692e, 1692f, and 1692g, in their amended complaint. In the Attorney
Defendants’ motion for summary judgment, they expressly “limit[ed] their arguments in [the
FDCPA] section of their Motion to the requirements of § 1692g.” The Attorney Defendants
never addressed, and thus never asked for summary judgment on, Mahmoud and Jackson’s
allegations under §§ 1692e and 1692f. If this review of the record is accurate, the district
court erred by “grant[ing] summary judgment sua sponte on grounds not requested by the
moving party” without giving the parties’ notice and a reasonable opportunity to respond.
Baker v. Metro. Life Ins. Co., 364 F.3d 624, 632 (5th Cir. 2004) (citation omitted); see Fed. R.
Civ. P. 56(f)(2).
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                                       No. 15-20618
barred—I begin by analyzing these two issues.
       First, foreclosure-related conduct can be “debt collection” subject to
FDCPA regulation. The majority opinion “assumes arguendo” this point, but
every circuit that has considered the issue has held that foreclosure-related
conduct, particularly demand letters that anticipate foreclosure proceedings,
can constitute debt collection and therefore can—if false, misleading,
deceptive, or unfair—violate the FDCPA. 2
       Second, as I read Texas law, part of the debts the Attorney Defendants
tried to collect here were in fact time-barred from foreclosure. Starting with
the general rules in Texas, a creditor must sue for payment of debt “not later
than four years after the day the cause of action accrues.” Tex. Civ. Prac. &
Rem. Code § 16.004(a)(3). If the debt arose from an installment contract, the
four-year statute of limitations “begins to run against each installment when
it comes due.” Palmer v. Palmer, 831 S.W.2d 479, 480 (Tex. App.—Texarkana
1992, no pet.) (collecting cases). As the Attorney Defendants admit, under
Texas law, “the time period within which one must sue to recover a debt . . . is
also the same period within which one must sue to foreclose upon the lien
[securing that debt].” Hoarel Sign Co. v. Dominion Equity Corp., 910 S.W.2d
140, 144 (Tex. App.—Amarillo 1995, writ denied). In other words, a creditor
has four years from the date an installment comes due to initiate foreclosure.
       Section 16.035 of Texas’s Civil Practice and Remedies Code is a statutory




       2See, e.g., Glazer v. Chase Home Fin., LLC, 704 F.3d 453 (6th Cir. 2013); Reese v. Ellis,
Painter, Ratterree & Adams, LLP, 678 F.3d 1211 (11th Cir. 2012); Gburek v. Litton Loan
Servicing LP, 614 F.3d 380 (7th Cir. 2010); Wilson v. Draper & Goldberg, PLLC, 443 F.3d
373 (4th Cir. 2006); Piper v. Portnoff Law Assocs., Ltd., 396 F.3d 227 (3d Cir. 2005); Romea
v. Heiberger & Assocs., 163 F.3d 111 (2d Cir. 1998); cf. Ho v. ReconTrust Co., 858 F.3d 568
(9th Cir. 2016) (explaining that enforcing a security interest and collecting a debt “are not
mutually exclusive”).
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                                        No. 15-20618
exception to these general rules. See Holy Cross Church of God in Christ v.
Wolf, 44 S.W.3d 562, 566 (Tex. 2001) (“Section 16.0035 modifies the general
rule that a claim accrues and limitations begins to run on each installment
when it becomes due.”). It provides that “[a] sale of real property under a power
of sale in a mortgage or deed of trust that creates a real property lien must be
made not later than four years after the day the cause of action accrues” and
specifies that if the “real property lien” secures an installment contract, the
cause of action does not accrue “until the maturity date of the last note,
obligation, or installment.” Tex. Civ. Prac. & Rem. Code § 16.035(b), (e). But—
as the Attorney Defendants readily admit—this exception, which applies only
to specially defined “real property liens,” does not cover the condo association’s
contractually created assessment lien. So the general limitations period still
applies. 3 Applying the general rule that the time period for foreclosing on a
lien is the same four-year period within which the creditor could have sued to
recover the underlying debt, see Hoarel, 910 S.W.2d at 144, the statute of
limitations for foreclosing to collect the repair assessments levied against
Mahmoud and Jackson in 2006 and 2007 expired in 2010 and 2011, well before
the Attorney Defendants sent their first demand letter on October 8, 2012.
       Nonetheless, the question remains whether threatening to nonjudicially
foreclose on a debtor’s home to collect partially time-barred debts violates the
FDCPA. Mahmoud and Jackson argue that this conduct violates:
    • Section 1692e(2), which prohibits “false[ly] represent[ing] . . . the
      character, amount, or legal status of any debt”;
    • Section 1692e(5), which prohibits “threat[ening] to take any action that


       3 Overlooking the general rules, the Attorney Defendants argue that because condo
association liens don’t meet the statutory definition of “real property liens,” condo association
liens must not be subject to any statute of limitations—a bizarre proposition that the majority
opinion rightfully does not entertain.
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                                     No. 15-20618
        cannot legally be taken”;
    • Section 1692e(10), which prohibits “us[ing] . . . false representation[s] or
      deceptive means to collect or attempt to collect any debt or to obtain
      information concerning a consumer”; and
    • Section 1693f(1), which prohibits “collecti[ng] . . . any amount . . . unless
      such amount is expressly authorized by the agreement creating the debt
      or permitted by law.”
        The majority opinion holds as a matter of law that because “only a small
portion of the debt” the Attorney Defendants collected via foreclosure was time-
barred, their demand letters cannot violate the FDCPA.                     This holding
contravenes the plain language of the FDCPA and misreads existing Fifth
Circuit law.
        The FDCPA plainly prohibits a debt collector’s using “false, deceptive, or
misleading representation[s]” or “unfair or unconscionable means” to collect a
debt.       §§ 16923, 1692f.   There is no authority for the majority opinion’s
proposition that when collection letters are only a little bit false, misleading,
or unfair, debt collectors cannot be statutorily liable. “Small” violations of the
Act are still violations of the Act. See, e.g., Haney v. Portfolio Recovery Assocs.,
LLC, 837 F.3d 918, 932 (8th Cir. 2016) (finding viable FDCPA claims based on
amounts “misstated by $1.29, $1.84, and $0.65” because “there [i]s no de
minimis exception to FDCPA liability based upon low dollar amounts”). 4
        The Act specifically prohibits a debt collector’s “threat[ening] to take any
action that cannot legally be taken.” § 1692e(5) (emphasis added). “Action” is
simply “the process of doing something; [one’s] conduct or behavior.” Action,



        4 The majority opinion’s reluctance to reach this conclusion may stem from a
misimpression that finding an FDCPA violation based on threats to collect partially time-
barred debts would “bar” or somehow undo the foreclosure on the whole debt that has already
taken place. I do not suggest, nor do I read the damages provision of the FDCPA to mean,
that this would be the appropriate result. See § 1692k.
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                                       No. 15-20618
Black’s Law Dictionary (10th ed. 2014). In other words, the FDCPA prohibits
a debt collector from threatening to engage in any process, conduct, or behavior
that the debt collector cannot legally engage in. See generally Huertas v.
Galaxy Asset Mgmt., 641 F.3d 28 (3d Cir. 2011) (“[T]he FDCPA permits a debt
collector to seek voluntary repayment of the time-barred debt so long as the
debt collector does not initiate or threaten legal action in connection with its
debt collection efforts.” (emphasis added)).            State law may create varying
processes (like judicial or nonjudicial foreclosure) that enable creditors to
collect on outstanding debts, and the FDCPA—both written broadly and
intended to be read broadly, see Daugherty, 836 F.3d at 511—prohibits
unlawfully threatening to use any of those processes.
       And in Daugherty v. Convergent Outsourcing, Inc., our court held that “a
collection letter violates the FDCPA,” specifically §§ 1692e(2)(5) and 1692f,
“when its statements could mislead an unsophisticated consumer to believe
that [the consumer’s] time-barred debt is legally enforceable, regardless of
whether litigation is threatened.” 836 F.3d 507, 509 (5th Cir. 2016). In doing
so, we adopted the Sixth Circuit’s analysis in Buchanan v. Northland Group,
in which the court said, “A misrepresentation about the limitations period
amounts to a ‘straightforward’ violation of § 1692e(2)(A).” 776 F.3d 393, 398-
99 (6th Cir. 2015). This makes sense: by implying in any way that a time-
barred debt is legally enforceable, the debt collector misrepresents “the
character . . . or legal status” of the debt, which is a separate example of
prohibited conduct under the Act, § 1692e(2)(A). 5                 And a debt collector’s



       5  If a debt collector falsely represents the character or legal status of a debt in a
demand letter to the debtor, specifically in violation of § 1692e(2)(A), it would seem that the
debt collector has also violated the more general example of prohibited conduct in § 1692e(10):
“[t]he use of any false representation . . . to collect or attempt to collect any debt . . . .”
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                                 No. 15-20618
threatening to foreclose and ultimately foreclosing on someone’s home to collect
a debt certainly implies that the debt is legally enforceable.
      Because the Attorney Defendants threatened nonjudicial foreclosure to
collect the entirety of a partially time-barred debt, in violation of § 1692e(5),
and thus implied that the full amount demanded was legally enforceable, in
violation of §§ 1692e(2)(A), (10) and 1692f, I would remand this case for further
proceedings.




                                       24
