Acceleration

Gumbo5 Orders Certified Jerky from the Texas Supreme Court to Glaze a Wall St. Flavored Opinion

Judge Jim Ho for the 5th sends two certified questions to the Supreme Court about rescission: to allow clock to restart a home foreclosure

Appellees Brief, TX Supreme Court

No. 23-0525

(Sep 14, 2023)

“The Fifth Circuit’s Erie guess in Rob is immaterial to the analysis.” – Durell, Locke Lord

Moore v. Wells Fargo Bank,

No. 22-20138

(5th Cir. July 7, 2023)

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

USDC No. 4:20-CV-3299

Before Graves, Ho, and Duncan, Circuit Judges. Per Curiam:*

Texas law imposes a four-year limitations period on real property liens. Tex. Civ. Prac. & Rem. Code § 16.035.

Where a note or deed of trust secured by a real property lien contains an optional acceleration clause, the lender must bring a foreclosure suit within four years of exercising its right to accelerate.

See Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 566–67 (Tex. 2001).

The lender can also rescind the acceleration before the limitations period expires, which restores the deed to its original condition “as if no acceleration had occurred.” Tex. Civ. Prac. & Rem. Code § 16.038(a).

The lender may then accelerate the maturity date of the loan again in the future. See id. § 16.038(d).

But what happens if a lender tries to simultaneously rescind a prior acceleration and re-accelerate? Is that valid? If not, are both the rescission and the re-acceleration void? Or just the re-acceleration? Section 16.038 does not say.

We believe this dispute presents pure questions of law that “should be answered by the only court that can issue a precedential ruling that will benefit all future litigants, whether in state or federal court.”

JCB, Inc. v. Horsburgh & Scott Co., 912 F.3d 238, 239 (5th Cir. 2018).

Accordingly, we certify two questions to the Supreme Court of Texas.

I.

On May 27, 2004, Plaintiffs Linda Moore and Thomas Moore obtained a $170,700 loan—secured by their property in Sugar Land, Texas— from Option One Mortgage Corporation.

Option One assigned the loan to Wells Fargo. PHH Mortgage Corporation services the loan.

The deed of trust that memorialized this transaction contained an optional acceleration clause, which gave Wells Fargo and PHH (the “Lenders”) the right to demand full repayment of the loan if the Moores fell behind in their monthly payments.

The Moores indeed fell behind on their monthly payments.

They agreed to a loan workout plan with Wells Fargo, but they again fell behind.

This led to a Loan Modification Agreement. The Moores still failed to make their payments. So PHH sent them a notice of default in October 2015, requesting a delinquent amount of $6,988.05.

This letter also expressed the Lenders’ intent to accelerate the loan.

On February 2, 2016, the Lenders sent the Moores a notice of acceleration.

The parties agree that the four-year limitations period to foreclose under § 16.035 began to accrue on this date.

After sending the initial notice of acceleration, the Lenders sent similar notices on October 6, 2016, November 2, 2016, January 13, 2017, March 8, 2017, and March 5, 2019.

Each notice included language expressly rescinding prior acceleration notices:

“The Servicer hereby rescinds all prior acceleration notices.”

And each notice purported to re-accelerate the maturity date of the loan.

On August 12, 2020, the Moores filed suit in state court for a declaratory judgment that the four-year limitations period had run on Wells Fargo’s ability to foreclose.

The Lenders removed to federal court and moved for summary judgment, which the district court granted.

The district court held that the Lenders had abandoned their February 2016 acceleration of the loan by sending multiple notices requesting less than the full balance of the loan, and that they otherwise rescinded the acceleration under § 16.038.

II.

The parties disagree on whether the Lenders timely rescinded the February 2016 acceleration.

A lienholder can rescind a prior acceleration by sending a “written notice” of rescission to the borrower’s “last known address” by “first class or certified mail.”

Tex. Civ. Prac. & Rem. Code § 16.038(b)–(c).

Rescission “does not affect a lienholder’s right to accelerate the maturity date of the debt in the future nor does it waive past defaults.”

Id. § 16.038(d).

The Lenders argue that they satisfied § 16.038’s requirements for rescission by sending multiple written notices of rescission to the Moores.

The Moores argue that § 16.038 doesn’t apply because the Lenders impermissibly attempted to simultaneously rescind the acceleration and re- accelerate the loan.

The Moores point to a holding from this court that “re-notice is required after acceleration is rescinded.”

Wilmington Trust v. Rob, 891 F.3d 174, 177 (5th Cir. 2018).

As with initial acceleration, re-acceleration requires first a notice of intent to accelerate, followed by a notice of acceleration.

See id. at 176–77.

Thus, the Moores argue, a lender can’t rescind and re- accelerate simultaneously because Texas law “imposes notice requirements before acceleration.”

Id. at 176 (emphasis added).

But Wilmington Trust—which was not a statute of limitations case— does not control.

It only concerned re-acceleration, not rescission.

This case, by contrast, is about whether the Lenders properly and timely rescinded their initial acceleration, since that would have reset the applicable limitations period. So although the Lenders’ re-acceleration of the loan is likely void under Wilmington Trust—since simultaneous rescission and re- acceleration by definition lacks a re-notice of intent to accelerate—that case doesn’t tell us whether the Lenders’ rescission of the initial acceleration is also void.

But even so, Wilmington Trust casts into doubt whether the Lenders effectively rescinded.

There’s no way to tell if the Lenders intended to rescind the initial acceleration without being able to also re-accelerate at the same time.

Arguably, rescission was merely a necessary antecedent to the Lenders’ primary goal of re-acceleration.

By contrast, a Texas intermediate appellate court recently blessed simultaneous rescission and re-acceleration.

See PHH Mortgage Corp. v. Aston, No. 01-21-00057-CV, 2022 WL 3363196 (Tex. App.—Houston [1st Dist.] Aug. 16, 2022, pet. denied).

And it addressed and rejected the same arguments that the Moores presented to this court.

See id. at *4–5.

So under Aston, the Lenders properly rescinded and re-accelerated. But under Wilmington Trust, the Lenders could not have re-accelerated and arguably did not rescind the initial acceleration.

Certification is advisable here.

As the Aston court acknowledged, “Section 16.038 is silent as to whether any time must pass between a rescission and a re-acceleration.”

2022 WL 3363196, at *4.

And the parties do not point to any meaningful authority besides Aston and Wilmington Trust.

III.

We hereby certify the following questions of law to the Supreme Court of Texas:

(1)      May a lender simultaneously rescind a prior acceleration and re-accelerate a loan under Tex. Civ. Prac. & Rem. Code § 16.038?

(2)             If a lender cannot simultaneously rescind a prior acceleration and re-accelerate a loan, does such an attempt void only the re-acceleration, or both the re-acceleration and the rescission?

We disclaim any intention or desire that the Supreme Court of Texas confine its reply to the precise form or scope of the question certified.

* This opinion is not designated for publication. See 5th Cir. R. 47.5.

Moore v. Wells Fargo Bank, National Association

(4:20-cv-03299)

District Court, S.D. Texas

SEP 23, 2020 | REPUBLISHED BY LIT: JUL 7, 2023

The final orders by Judge Sim Lake of Houston Federal Court, the parties and counsel in the lower court case referenced in the 5th Cir. Opinion. The Moore’s recorded recission deed was filed in 2013.

U.S. District Court
SOUTHERN DISTRICT OF TEXAS (Houston)
CIVIL DOCKET FOR CASE #: 4:20-cv-03299

Moore et al v. Wells Fargo Bank, National Association et al
Assigned to: Judge Sim Lake

Case in other court:  458th Judicial District, Fort Bend County, TX, 20-DCV-275751

Cause: 28:1332 Diversity-(Citizenship)

Date Filed: 09/23/2020
Date Terminated: 02/09/2022
Jury Demand: Plaintiff
Nature of Suit: 290 Real Property: Other
Jurisdiction: Diversity
Plaintiff
Linda Moore represented by Jeffrey Craig Jackson
Jeffrey Jackson & Associates, PLLC
2500 E TC Jester Blvd.
Suite 285
Houston, TX 77008
713-861-8833
Fax: 713-682-8866
Email: jeff@jjacksonllp.com
LEAD ATTORNEY
ATTORNEY TO BE NOTICED
Plaintiff
Thomas Moore, Jr. represented by Jeffrey Craig Jackson
(See above for address)
ATTORNEY TO BE NOTICED
V.
Defendant
Wells Fargo Bank, National Association
as Trustee for MASTR Asset Backed Securities Trust 2004-OPT2, Mortgage Pass-Through Certificates, Series 2004 OPT2
represented by Robert T Mowrey
Locke Lord LLP
2200 Ross Ave
Ste 2800
Dallas, TX 75201-6776
214-740-8000
Fax: 214-740-8800
Email: rmowrey@lockelord.com
LEAD ATTORNEY
ATTORNEY TO BE NOTICEDDaniel Glenn Durell
Locke Lord LLP
600 Congress Ave
Ste 2200
Austin, TX 78701
512-305-4700
Email: daniel.durell@lockelord.com
ATTORNEY TO BE NOTICEDKurt Lance Krolikowski
Locke Lord LLP
600 Travis
JPMorgan Chase Tower
Suite 2800
Houston, TX 77002
713-226-1595
Fax: 713-223-3717
Email: kkrolikowski@lockelord.com
ATTORNEY TO BE NOTICED
Defendant
PHH Mortgage Corporation represented by Robert T Mowrey
(See above for address)
LEAD ATTORNEY
ATTORNEY TO BE NOTICEDDaniel Glenn Durell
(See above for address)
ATTORNEY TO BE NOTICEDKurt Lance Krolikowski
(See above for address)
ATTORNEY TO BE NOTICED

 

Date Filed # Docket Text
09/23/2020 1 NOTICE OF REMOVAL from Fort Bend County District Court, case number 20-DCV-275751 (Filing fee $ 400 receipt number 0541-25246708) filed by PHH Mortgage Corporation, Wells Fargo Bank, National Association, as Trustee for MASTR Asset Backed Securities Trust 2004-OPT2, Mortgage Pass-Through Certificates, Series 2004 OPT2. (Attachments: # 1 Exhibit A – Index of All Matters, # 2 Exhibit B – Civil Cover Sheet, # 3 Exhibit C – List of All Counsel, # 4 Exhibit D – State Court File, # 5 Exhibit E – Fort Bend CAD property information)(Durell, Daniel) (Entered: 09/23/2020)
09/23/2020 2 CERTIFICATE OF INTERESTED PARTIES by PHH Mortgage Corporation, Wells Fargo Bank, National Association, as Trustee for MASTR Asset Backed Securities Trust 2004-OPT2, Mortgage Pass-Through Certificates, Series 2004 OPT2, filed.(Durell, Daniel) (Entered: 09/23/2020)
09/23/2020 3 NOTICE of Appearance by Jeffrey C. Jackson on behalf of Linda Moore, Thomas Moore, Jr., filed. (Jackson, Jeffrey) (Entered: 09/23/2020)
09/25/2020 4 Lis Pendens by Linda Moore, Thomas Moore, Jr., filed.(Jackson, Jeffrey) (Entered: 09/25/2020)
09/28/2020 5 ORDER for Initial Pretrial and Scheduling Conference and Order to Disclose Interested Persons. Initial Conference set for 10/23/2020 at 02:00 PM in Courtroom 9B before Judge Sim Lake. (Signed by Judge Sim Lake) Parties notified. (aboyd, 4) (Entered: 09/28/2020)
09/28/2020 6 CERTIFICATE OF INTERESTED PARTIES by Linda Moore, Thomas Moore, Jr., filed.(Jackson, Jeffrey) (Entered: 09/28/2020)
10/13/2020 7 JOINT DISCOVERY/CASE MANAGEMENT PLAN by PHH Mortgage Corporation, Wells Fargo Bank, National Association, filed.(Durell, Daniel) (Entered: 10/13/2020)
10/14/2020 8 NOTICE OF CANCELLATION. The Initial Conference set for 10/23/2020 at 2:00 PM is cancelled, filed. (aboyd, 4) (Entered: 10/14/2020)
10/14/2020 9 DOCKET CONTROL ORDER. Amended Pleadings due by 1/15/2021. Joinder of Parties due by 1/15/2021. Pltf Expert Report due by 3/5/2021. Deft Expert Report due by 5/7/2021. Discovery due by 8/6/2021. Non-Dispositive Motion Filing due by 9/3/2021. Joint Pretrial Order due by 10/1/2021. Docket Call set for 10/8/2021 at 03:00 PM in Courtroom 9B before Judge Sim Lake. (Signed by Judge Sim Lake) Parties notified. (aboyd, 4) (Entered: 10/14/2020)
03/01/2021 10 NOTICE of Service of Plaintiffs’ Rule 26(a)(2) Expert Witness Designation by Linda Moore, Thomas Moore, Jr., filed. (Jackson, Jeffrey) (Entered: 03/01/2021)
04/29/2021 11 Subpoena to Testify at a Deposition in a Civil Action as to April King by Linda Moore, Thomas Moore, Jr., filed.(Jackson, Jeffrey) (Entered: 04/29/2021)
04/29/2021 12 Subpoena to Testify at a Deposition in a Civil Action as to Linda Bayless by Linda Moore, Thomas Moore, Jr., filed.(Jackson, Jeffrey) (Entered: 04/29/2021)
09/22/2021 13 Joint MOTION for Continuance by PHH Mortgage Corporation, Wells Fargo Bank, National Association, filed. Motion Docket Date 10/13/2021. (Attachments: # 1 Amended Docket Control Order)(Durell, Daniel) (Entered: 09/22/2021)
09/23/2021 14 ORDER – Granting 13 Joint MOTION for Continuance. ORDERED that the following paragraphs of the 9 Docket Control Order shall bemodified and revised as follows: Pretrial Motions/Motions in Limine due by 12/2/2021., Joint Pretrial Order due by 1/7/2022…*** Docket Call RESET for 1/14/2022 at 03:00 PM in Courtroom 9B before Judge Sim Lake. (Signed by Judge Sim Lake) Parties notified.(sanderson, 4) (Entered: 09/23/2021)
10/12/2021 15 MOTION for Summary Judgment by PHH Mortgage Corporation, Wells Fargo Bank, National Association, filed. Motion Docket Date 11/2/2021. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C)(Durell, Daniel) (Entered: 10/12/2021)
11/02/2021 16 RESPONSE in Opposition to 15 MOTION for Summary Judgment , filed by Linda Moore, Thomas Moore, Jr.. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Exhibit 14, # 15 Exhibit 15, # 16 Exhibit 16, # 17 Exhibit 17, # 18 Exhibit 18, # 19 Exhibit 19, # 20 Exhibit 20, # 21 Exhibit 21)(Jackson, Jeffrey) (Entered: 11/02/2021)
11/09/2021 17 REPLY in Support of 15 MOTION for Summary Judgment , filed by PHH Mortgage Corporation, Wells Fargo Bank, National Association. (Attachments: # 1 Exhibit A)(Durell, Daniel) (Entered: 11/09/2021)
11/10/2021 18 Unopposed MOTION for Leave to File Plaintiffs’ Sur-Reply in Opposition to Defendants’ Motion for Summary Judgment by Linda Moore, Thomas Moore, Jr., filed. Motion Docket Date 12/1/2021. (Attachments: # 1 Proposed Order Granting Plaintiffs’ Motion for Leave to File Sur-Reply)(Jackson, Jeffrey) (Entered: 11/10/2021)
11/10/2021 19 SURREPLY to 15 MOTION for Summary Judgment , filed by Linda Moore, Thomas Moore, Jr.. (Jackson, Jeffrey) (Entered: 11/10/2021)
11/12/2021 20 ORDER granting 18 Motion for Leave to File Sur-Reply.(Signed by Judge Sim Lake) Parties notified.(jdav, 4) (Entered: 11/12/2021)
11/30/2021 21 Joint MOTION to Stay Deadlines and Docket Call Pending Ruling on Motion for Summary Judgment by PHH Mortgage Corporation, Wells Fargo Bank, National Association, filed. Motion Docket Date 12/21/2021. (Attachments: # 1 Proposed Order)(Durell, Daniel) (Entered: 11/30/2021)
11/30/2021 22 ORDER – Granting 21 Joint MOTION to Stay Deadlines and Docket Call Pending Ruling on Motion for Summary Judgment. ORDERED that all proceedings in this case are hereby STAYED, pending further order of this Court. It is further ORDERED that the 14 Amended Docket Control Order is hereby suspended, pending further Order of this Court…*** Docket Call RESET for 1/14/2022 at 03:00 PM is CANCELLED ***..*** STAYED flag set. (Signed by Judge Sim Lake) Parties notified.(sanderson, 4) (Entered: 11/30/2021)
02/09/2022 23 MEMORANDUM OPINION AND ORDER – For the reasons explained, the court concludes that there are no issues of material fact with respect to any of Plaintiffs’ claims. Accordingly, Defendants’ 15 MOTION for Summary Judgment is GRANTED…*** STAYED flag cleared.(Signed by Judge Sim Lake) Parties notified.(sanderson, 4) (Entered: 02/09/2022)
02/09/2022 24 FINAL JUDGMENT – In accordance with the court’s Memorandum Opinion and Order granting Defendants’ Motion for Summary Judgment, this action is DISMISSED WITH PREJUDICE. Costs will be taxed against Plaintiffs…*** Case terminated on 2/9/22. (Signed by Judge Sim Lake) Parties notified.(sanderson, 4) (Entered: 02/09/2022)
03/11/2022 25 NOTICE OF APPEAL to US Court of Appeals for the Fifth Circuit re: 24 Final Judgment, by Linda Moore, Thomas Moore, Jr. (Filing fee $ 505, receipt number ATXSDC-27872127), filed. (Jackson, Jeffrey) (Entered: 03/11/2022)
03/14/2022 26 Clerks Notice of Filing of an Appeal. The following Notice of Appeal and related motions are pending in the District Court: 25 Notice of Appeal. Fee status: Paid, filed. (Attachments: # 1 NOA) (scastillo, 1) (Entered: 03/14/2022)
03/23/2022 27 DKT13 TRANSCRIPT ORDER REQUEST by Jeffrey C. Jackson. Transcript is unnecessary for appeal purposes This order form relates to the following: 25 Notice of Appeal, filed. (Jackson, Jeffrey) (Entered: 03/23/2022)

 


 

PACER Service Center
Transaction Receipt
07/11/2023 17:49:55

Deutsche Bank’s Legal Team Loses All Power in Attempt to Foreclose on Electrician Dennis Kirchner’s Home

After the 5th Circuit Shorts Out the Appeal in a July 2018 Opinion, the First Legal Attempt to Foreclose in Late 2021 is Abandoned.

Homeowner Faces Wolves Non Judicial Foreclosure after 7 Bankruptcies: But it’s Still Time-Barred

Deutsche Bank’s Judgment from Harris County District Court in 2017 has expired, even tolling the 7 intervening bankruptcies by Mastroperros.

Homeowner Strikes Back: Counters Wolves Predatory Legal Scheme to Protract Litigation Until Death

Discover Josef Lamell’s battle against predatory legal tactics: at age 74, he stands against a scheme which has seen many meet untimely ends.

Gumbo5 Orders Certified Jerky from the Texas Supreme Court to Glaze a Wall St. Flavored Opinion
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

To Top