     Case: 17-50540      Document: 00514387123         Page: 1    Date Filed: 03/14/2018




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

                                    No. 17-50540
                                                                                Fifth Circuit

                                                                              FILED
                                  Summary Calendar                      March 14, 2018
                                                                         Lyle W. Cayce
VARNEL L. DIGGS,                                                              Clerk


              Plaintiff - Appellant

v.

DITECH FINANCIAL, L.L.C.,

              Defendant - Appellee




                   Appeal from the United States District Court
                        for the Western District of Texas
                             USDC No. 1:16-CV-828


Before HIGGINBOTHAM, JONES, and SMITH, Circuit Judges.
PER CURIAM:*
       Appellant Varnel L. Diggs brought this quiet title action to remove a lien
on his property owned by Appellee Ditech Financial, LLC (Ditech).                                 On
recommendation of the magistrate judge, the district court granted summary
judgment to Ditech. For the reasons given below, 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
 Case: 17-50540      Document: 00514387123     Page: 2   Date Filed: 03/14/2018



                                No. 17-50540
I.      Background
     In 2007, Diggs executed a Home Equity Note with USAA Federal
Savings Bank, which was secured by a Deed of Trust. The Deed of Trust
was assigned to GMAC Mortgage, LLC (GMAC). The magistrate judge
found that Diggs hadn’t made payments on the loan since November 2010.
The Deed of Trust was accelerated in April 2011 and assigned to Green Tree
Servicing, LLC (Green Tree) in February 2013.        Green Tree sent Diggs a
notice of default in June 2013. This notice allowed Diggs to cure the default
by paying less than the full amount of the loan and stated that the loan
would be accelerated if Diggs failed to cure. Green Tree later changed its
name to Ditech.
     Diggs brought a quiet title action against Ditech in state court in 2016,
arguing the lien was invalid because Ditech had failed to foreclose within
four years of the acceleration. Diggs procured a default judgement and
Ditech moved for a new trial and removed to federal court. The district
court granted the motion for new trial and both parties moved for summary
judgment.
     Before the magistrate judge, Ditech argued summary judgment should
be granted because the notice of default abandoned the acceleration. Diggs
responded that (1) the notice of default was not sufficient to abandon the
acceleration, (2) he never received the notice, (3) the notice was falsified,
and (4) Ditech had committed fraud on the court by falsifying the notice.
The magistrate judge held that the notice of default was sufficient to
abandon the acceleration because it was “nearly identical” to the notice in
Boren v. U.S. Nat’l Bank Ass’n, 807 F.3d 99 (5th Cir. 2015). In Boren, this
court held that the notice at issue was sufficient to abandon acceleration.
Id. at 103, 106.


                                     2
 Case: 17-50540     Document: 00514387123      Page: 3   Date Filed: 03/14/2018



                               No. 17-50540
   Next, the magistrate judge addressed Diggs’s arguments regarding
service of the notice. The court held that Texas law does not require actual
receipt of the notice. The court pointed to the Texas Property Code, which
states that
   “[s]ervice of a notice under this section 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. The affidavit of a person knowledgeable of the facts to the
   effect that service was completed is prima facie evidence of
   service.”

TEX. PROP. CODE § 51.002(e). Diggs argued the notice of default was not
received because Ditech did not include the “green card with a signature”
from the certified mail receipt. Ditech had provided the paid mailing label
and an affidavit from a Ditech representative. The magistrate judge held
that under Texas law Ditech had succeeded in making a prima facie case,
and that Diggs had failed to rebut Ditech’s evidence.
   Diggs argued that the notice and mailing label were falsified because
(1) Ditech sent him a letter that gave various dates of communications but
did not include the notice of default; and (2) Diggs did not reply to the notice
of default disputing the debt. The magistrate judge found these arguments
unpersuasive. As for the letter, the court noted that Diggs was “previously
provided debt validation information for the referenced account.” Diggs also
argued the affidavit submitted by Ditech was inadmissible hearsay and
failed to specify if the employee worked at Ditech at the time of the notice.
The court stated this was not required because the affiant’s position made
him competent “to testify to his review of the business records regarding
Diggs’s account.” Therefore, the affidavit established the notice of default
as a business record. Because the court concluded that Diggs had not shown



                                     3
 Case: 17-50540      Document: 00514387123     Page: 4   Date Filed: 03/14/2018



                                No. 17-50540
the mailing label or notice of default was falsified, it rejected Diggs’s
argument of fraud on the court.
      Diggs also asserted that the lien was invalid due to laches. The court
held that this was inappropriate because laches is a defense to an action,
not a basis for an action. The court held the same for Diggs’s assertion of
unclean hands.
      The district court adopted the magistrate judge’s report and
recommendation and entered judgment for Ditech. Diggs has appealed.
II.     Standard of Review
      We review grants of summary judgement de novo. Bridges v. Empire
Scaffold, LLC, 875 F.3d 222, 225 (5th Cir. 2017). A court should grant
summary judgment “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.
III.    Analysis
      Diggs argues that the magistrate judge erred in several respects. After
reviewing the magistrate and district court’s opinions, the briefs, and
pertinent portions of the record, we conclude that the lower courts did not
commit reversible error. Therefore, we AFFIRM the judgment of the
district court.




                                     4
