     Case: 18-10248   Document: 00514861432     Page: 1   Date Filed: 03/06/2019




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

                                                                        FILED
                                 No. 18-10248                       March 6, 2019
                                                                   Lyle W. Cayce
JATERA CORPORATION; ESTHER RANDLE MOORE,                                Clerk


             Plaintiffs - Appellants

v.

US BANK NATIONAL ASSOCIATION, As Trustee, in Trust for the
Registered Holders of Citigroup Mortgage Loan Trust, Asset-Backed Pass-
Through Certificates, Series 2005-HE3; SELECT PORTFOLIO SERVICING,
INCORPORATED,

             Defendants - Appellees




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


Before SMITH, BARKSDALE, and HO, Circuit Judges.
RHESA HAWKINS BARKSDALE, Circuit Judge:
      At issue in this diversity action is whether Texas law provides a
detrimental-reliance exception to a lender’s right to unilaterally withdraw a
notice of acceleration; and, if so, whether Jatera Corporation and Esther
Randle Moore detrimentally relied on the notice of acceleration by U.S. Bank
National Association (Bank) and Select Portfolio Servicing, Inc. (SPS).
Appellants challenge the district court’s, on cross-motions for summary
judgment, denying Appellants’ motion and granting Appellees’. AFFIRMED.
    Case: 18-10248     Document: 00514861432      Page: 2   Date Filed: 03/06/2019



                                   No. 18-10248
                                        I.
      In 2005, Moore and her husband purchased a house located in Dallas,
Texas (the property), by signing a Texas home equity fixed/adjustable rate note
in the amount of $99,200, secured by a Texas home equity security instrument.
Through a series of transfers and assignments, the Bank became the owner
and holder of the note and security interest.
      After her husband died in April 2008, all interest in the property was
transferred to Moore, who soon defaulted on her mortgage payments. In March
2010, the Bank’s then loan servicer notified Moore of its intent to accelerate
the note (acceleration notice), demanding full payment of the debt
($116,575.80).
      After the Bank filed suit in state court in 2011 to obtain a court order
permitting foreclosure on the property, Moore signed an agreed final judgment
in November 2011, consenting to foreclosure. In January 2012, Moore vacated
the property and signed a one-year lease for an apartment.
      The Bank’s new loan servicer, SPS, sent a new notice of default to Moore
in November 2012, informing her: she could cure her default by making a
payment of $38,343.99; but, if payment was not received by December 2012,
the note would be re-accelerated.
      In March 2015, Moore conveyed her interest in the property to Scojo
Solutions, LLC, through a special warranty deed. One month later, Scojo
transferred its interest in the property to Jatera Corporation.
      After SPS re-initiated the foreclosure proceedings originally pursued by
the Bank, Jatera filed this action against the Bank and SPS in state court,
seeking a judgment declaring the lien on the property void because Appellees
failed to initiate foreclosure proceedings within the four-year statute of
limitations. In response, Appellees removed this action to federal court on the
basis of diversity jurisdiction.
                                        2
    Case: 18-10248       Document: 00514861432   Page: 3   Date Filed: 03/06/2019



                                  No. 18-10248
      In district court, Jatera amended its complaint, asserting that Moore’s
detrimental reliance on the acceleration notice prevented Appellees from
abandoning the acceleration in November 2012.          Moore was joined as a
plaintiff. She filed a complaint seeking a judgment declaring the lien on the
property void, and/or quieting title in Jatera’s name (also on grounds of her
detrimental reliance).
      The parties filed cross-motions for summary judgment on all claims.
Regarding Moore’s claims, the district court held Moore no longer retained an
interest in the property, and, therefore, lacked standing. Concerning Jatera’s
claims, the court noted the uncertainty surrounding the detrimental-reliance
exception under Texas law, but held that, in any event, detrimental reliance
runs to the benefit of the party asserting it, and Jatera had failed to show it
detrimentally relied on the acceleration notice. Accordingly, the court denied
Appellants’ motion and granted Appellees’.
                                       II.
      Appellants contend the district court erred in denying their summary-
judgment motion and in granting Appellees’. Accordingly, Appellants request
judgment’s being rendered in their favor; alternatively, that this case be
remanded to district court.
      The district court’s “grant[] and denial[] of summary judgment [is
reviewed] de novo”. Century Surety Co. v. Seidel, 893 F.3d 328, 332 (5th Cir.
2018) (quotations and citation omitted). 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”. Fed. R. Civ. P. 56(a). “A
genuine dispute of material fact exists if the evidence is such that a reasonable
jury could return a verdict for the nonmoving party.         However, [a] mere
scintilla of evidence will not preclude granting of a motion for summary
judgment.” Bitterroot Holdings, L.L.C. v. MTGLQ Inv’rs, L.P., 648 F. App’x
                                        3
   Case: 18-10248     Document: 00514861432     Page: 4   Date Filed: 03/06/2019



                                 No. 18-10248
414, 417 (5th Cir. 2016) (alteration in original) (internal quotations and
citations omitted).
      “When parties file cross-motions for summary judgment, we review each
party’s motion independently, viewing the evidence and inferences in the light
most favorable to the nonmoving party.” Cooley v. Hous. Auth. of Slidell, 747
F.3d 295, 298 (5th Cir. 2014) (internal quotations and citation omitted).
                                       A.
      Texas substantive law applies to this diversity-jurisdiction case. Erie
R.R. v. Tompkins, 304 U.S. 64, 78–79 (1938). In instances where the State’s
highest court has not spoken on the direct question, federal courts are
required to make an “Erie guess and determine, in [their] best judgment how
[the State’s highest court] would resolve the issue if presented with the same
case”. Temple v. McCall, 720 F.3d 301, 307 (5th Cir. 2013) (first alteration in
original) (internal quotations and citation omitted). In doing so, our court
“defer[s] to intermediate state appellate court decisions, unless convinced by
other persuasive data that the highest court of the state would decide
otherwise”. Mem’l Hermann Healthcare Sys., Inc. v. Eurocopter Deutschland,
GMBH, 524 F.3d 676, 678 (5th Cir. 2008) (internal quotations and citation
omitted).
                                       1.
      Under Texas law, “[a] person must bring suit for . . . the foreclosure of a
real property lien not later than four years after the day the cause of action
accrues”. Tex. Civ. Prac. & Rem. Code Ann. § 16.035(a). If foreclosure does
not occur within this limitations period, “the real property lien and a power of
sale to enforce the . . . lien become void”. Id. § 16.035(d). If the note secured
by the property contains an optional acceleration clause, “the action accrues
only when the holder actually exercises its option to accelerate”. Bitterroot,


                                       4
   Case: 18-10248     Document: 00514861432     Page: 5   Date Filed: 03/06/2019



                                 No. 18-10248
648 F. App’x at 418 (quoting Holy Cross Church of God in Christ v. Wolf, 44
S.W.3d 562, 566 (Tex. 2001)).
      The acceleration may be abandoned, either by the lender’s unilateral
actions or by agreement, thereby suspending the limitations period until the
lender exercises its option to re-accelerate the note. Boren v. U.S. Nat’l Bank
Ass’n, 807 F.3d 99, 106 (5th Cir. 2015); Holy Cross, 44 S.W.3d at 566–67.
“[T]he request for payment of less than the full obligation—after initially
accelerating the entire obligation—[is] an unequivocal expression of the
bank’s intent to abandon or waive its initial acceleration”. Martin v. Fed. Nat’l
Mortg. Ass’n, 814 F.3d 315, 318 (5th Cir. 2016).
      Accordingly, the parties do not dispute the November 2012 notice of
default, which requested less than the full debt, could have constituted an
abandonment of the 2010 acceleration. Instead, Appellants assert the Bank
was estopped from abandoning the 2010 acceleration due to Moore’s
detrimental reliance on it.
                                       2.
      First, the parties dispute whether, under Texas law, a detrimental-
reliance exception exists to a lender’s right to unilaterally withdraw its
exercise of an option to accelerate. No Texas court has ever held detrimental
reliance is an exception.
      Discussion about a detrimental-reliance exception first appeared in
1998 in Swoboda v. Wilshire Credit Corp., in which a Texas intermediate
appellate court stated in dicta: “Even if a creditor exercises the option to
accelerate and makes a declaration to that effect, the election to accelerate can
be revoked or withdrawn at any time, so long as the debtor has not
detrimentally relied on the acceleration”. 975 S.W.2d 770, 776–77 (Tex. App.
1998), disapproved of on other grounds by Holy Cross, 44 S.W.3d 562. For this
detrimental-reliance proposition, the Texas appellate court cited two non-
                                       5
   Case: 18-10248     Document: 00514861432     Page: 6   Date Filed: 03/06/2019



                                 No. 18-10248
Texas cases: In re Adu-Kofi, 94 B.R. 14, 15 (Bankr. D. R.I. 1988); and Golden
v. Ramapo Improvement Corp., 78 A.D.2d 648 (N.Y. App. Div. 1980).
      Since Swoboda, numerous courts have cited this language, also in dicta.
See, e.g., Boren, 807 F.3d at 105; Nunnery v. Ocwen Loan Servicing, L.L.C.,
641 F. App’x 430, 433 (5th Cir. 2016); Justice v. Wells Fargo Bank Nat’l Ass’n,
674 F. App’x 330, 333 (5th Cir. 2016); Nationstar Mortgage, LLC v. Landers,
No. 12-17-00047-CV, 2018 WL 1737013, at *6 (Tex. App. 11 Apr. 2018);
Graham v. LNV Corp., No. 03-16-00235-CV, 2016 WL 6407306, at *3 (Tex.
App. 26 Oct. 2016).
      Recently, however, federal and Texas state courts have expressed
doubts about whether the exception exists.       See, e.g., Graham, 2016 WL
6407306, at *4 & n.3 (“Texas courts have not resolved the question of whether
a note holder can unilaterally rescind acceleration . . . despite the debtor’s
detrimental reliance on the acceleration”.); Bitterroot, No. 5:14-CV-862-DAE,
2015 WL 6442622, at *7 (W.D. Tex. 23 Oct. 2015) (“Given that Swoboda’s
detrimental reliance rule was derived from authority outside of Texas,
however, the Court agrees that it is less than clear that the Texas Supreme
Court would adopt the same rule.”), aff’d 648 F. App’x 414 (5th Cir. 2016).
      Along that line, a very recent unpublished opinion by our court noted:
“According to Texas intermediate appellate courts, the holder of a note may
not unilaterally abandon acceleration if the borrower objects to abandonment
or has detrimentally relied on the acceleration”. Sims v. RoundPoint Mortg.
Servicing Corp., --- F. App’x ---, 2019 WL 360069, at *3 (5th Cir. 28 Jan. 2019)
(per curiam) (citing Boren, 807 F.3d at 105); see also 5th Cir. R. 47.5.4
(unpublished opinions on or after 1 January 1996 are not precedential except
in certain instances not applicable in Sims).
      This opinion did not discuss the uncertainty surrounding the
detrimental-reliance exception, nor did it hold a detrimental-reliance
                                       6
   Case: 18-10248     Document: 00514861432      Page: 7    Date Filed: 03/06/2019



                                  No. 18-10248
exception exists under Texas law. Id. Instead, it joins the line of cases that
have cited this purported exception in dicta. Ultimately, our court held the
filing of bankruptcy, in that case, was not proof of detrimental reliance on the
acceleration notice. Id. at *4.
      More to the issue at hand, the Texas legislature in 2015—almost 20
years after Swoboda was decided—enacted Texas Civil Practice and Remedies
Code § 16.038; subsection (a) states: “If the maturity date of a series of notes
or obligations or a note or obligation payable in installments is accelerated,
and the accelerated maturity date is rescinded or waived . . . before the
limitations period expires, the acceleration is deemed rescinded and waived
and the note, obligation, or series of notes or obligations shall be governed . . .
as if no acceleration had occurred.” This statute provides no exceptions to a
lender’s right to unilaterally withdraw the acceleration.
      “A statute is presumed to have been enacted by the legislature with
complete knowledge of the existing law and with reference to it.” Acker v. Tex.
Water Comm’n, 790 S.W.2d 299, 301 (Tex. 1990) (citation omitted). “Enforcing
the law as written is a court’s safest refuge in matters of statutory
construction, and we should always refrain from rewriting text that
lawmakers chose . . . .” Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433,
443 (Tex. 2009) (citing Simmons v. Arnim, 220 S.W. 66, 70 (1920) (“Courts
must take statutes as they find them.”)).
      The Texas legislature, presumably with knowledge of the case law,
chose not to include in the statute any exception to the lender’s right to
unilaterally withdraw an acceleration notice. Therefore, it is unlikely the
Texas Supreme Court would be willing to read such language into the statute,
especially considering the language ultimately comes from dicta citing
authority from outside of Texas.


                                        7
   Case: 18-10248     Document: 00514861432    Page: 8     Date Filed: 03/06/2019



                                No. 18-10248
       Accordingly, we hold detrimental reliance is not an exception to the
lender’s right to unilaterally withdraw an acceleration notice under Texas
law.
                                      B.
       The other issue on appeal concerned whether, for the claimed exception,
the requisite detrimental reliance existed.    The district court concluded:
Jatera did not suffer such reliance; and Moore no longer retained an interest
in the property, and, therefore, lacked standing.        Jatera asserts Moore’s
purported reliance was assigned to it through the earlier-described special
warranty deed.
       But, as held above, the claimed detrimental-reliance exception does not
exist under Texas law. Therefore, we need not reach whether there was such
reliance, including whether Jatera was assigned Moore’s detrimental-reliance
claim, or whether Moore suffered such reliance.
                                     III.
       For the foregoing reasons, the judgment is AFFIRMED.




                                      8
