648 F. App'x 414
5th Cir.2016Background
- 2005: John Harvey executed a Texas home-equity Note ($94,320) and Deed of Trust in favor of American Equity Mortgage (assigned to Citimortgage, later to MTGLQ).
- Citimortgage sent notices of default (2007) and acceleration (2008), filed foreclosure applications in 2009 and 2010, then dismissed those applications; MTGLQ acquired the note/deed in 2010 and later accelerated in 2012.
- Separately, homeowner-association foreclosure in 2011 transferred the property to DTND Sierra; DTND assigned to Bitterroot, which then sued to enjoin MTGLQ’s foreclosure.
- Bitterroot sued in state court (2014), MTGLQ removed to federal court; both parties moved for summary judgment—MTGLQ sought a ruling that its foreclosure was timely and it held superior title; Bitterroot argued foreclosure was time-barred due to prior acceleration.
- District court admitted an affidavit of MTGLQ’s loan analyst (Handville) despite a Rule 26 disclosure omission, found no superior title claim by Bitterroot, rejected detrimental-reliance argument, and granted MTGLQ summary judgment; Bitterroot appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MTGLQ's foreclosure was time-barred under Texas §16.035 (effect of prior accelerations) | Bitterroot: earlier accelerations (2008, 2010) were not abandoned, so limitations ran and foreclosure is time-barred | MTGLQ: earlier accelerations were abandoned when foreclosure applications were dismissed; limitations restarted with MTGLQ's 2012 acceleration | Court: abandonment was found; even assuming a detrimental-reliance exception exists, Bitterroot failed to prove material detrimental reliance, so limitations did not bar MTGLQ |
| Whether Harvey detrimentally relied on prior accelerations (would preclude abandonment) | Bitterroot: Harvey changed position (didn't pay HOA debt, didn't seek loan modification, moved out) in reliance on 2008 acceleration | MTGLQ: claimed those acts were not material changes and Harvey was in debt before/after; no evidence of legal/financial harm from moving out | Held: Evidence insufficient to show material detrimental reliance; summary judgment for MTGLQ affirmed |
| Admissibility of Handville affidavit (Rule 26 nondisclosure) | Bitterroot: Handville was not disclosed as a Rule 26 witness; his affidavit should be excluded under Rule 37 | MTGLQ: nondisclosure was harmless/inadvertent; affidavit had been previously used and was important | Held: District court did not abuse discretion — nondisclosure harmless; affidavit admitted |
Key Cases Cited
- Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562 (Tex. 2001) (limitations on a mortgage note accrue only when holder actually accelerates; holder may abandon acceleration)
- Bramblett v. Comm’r, 960 F.2d 526 (5th Cir. 1992) (appellate court may affirm on any ground supported by the record)
- Boren v. U.S. Nat’l Bank Ass’n, 807 F.3d 99 (5th Cir. 2015) (Texas appellate courts recognize unilateral abandonment of acceleration absent borrower objection or detrimental reliance)
- Tex. A&M Research Found. v. Magna Transp., Inc., 338 F.3d 394 (5th Cir. 2003) (factors for allowing undisclosed evidence under Rule 37: importance, prejudice, ability to cure, explanation)
- Sandel v. ATP Oil & Gas Corp., 243 S.W.3d 749 (Tex. App.—Houston [14th Dist.] 2007) (detrimental reliance requires a material change of position in reliance)
- Manes v. Bletsch, 239 S.W. 307 (Tex. Civ. App.—Austin 1922) (payer’s failure to object to revocation of option implies acquiescence)