Florence Anyafulu v. Equicredit Corp. of America
664 F. App'x 410
| 5th Cir. | 2016Background
- In 1997 Florence Anyafulu executed a note and deed of trust on a Houston residence; she signed a loan modification in 2010 increasing the principal balance.
- The loan changed hands; Select Portfolio Servicing became servicer and notified Anyafulu of default and an amount to cure in 2014.
- Defendants elected to accelerate the loan and initiated foreclosure proceedings after default remained.
- Anyafulu sued in Texas state court (Oct. 2014) to enjoin foreclosure, asserting breach of contract, fraud/fraudulent misrepresentation, breach of good faith and fair dealing, DTPA violations, and seeking an accounting; case removed to federal court.
- The district court granted summary judgment for Defendants, finding (1) no evidence of contract breach, (2) fraud claims barred by the economic loss rule, (3) no duty of good faith in debtor-creditor relation, (4) no DTPA standing, and (5) no basis for an accounting.
- On appeal the Fifth Circuit affirmed, emphasizing plaintiff’s lack of documentary evidence and that alleged harms were contractual and therefore barred as tort claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract | Anyafulu: Defendants breached loan/Deed terms (e.g., failed to give 21 days’ written notice; improperly accelerated) | Defendants: No documentary proof of breach; plaintiff remained in default; notice provided and property unsold | Affirmed for Defendants — plaintiff provided no evidence of breach; allegations are unsubstantiated. |
| Fraud / fraudulent misrepresentation | Anyafulu: Promises (oral/written) that property was "safe" during modification; Select letter said no sale within 30 days, then foreclosure proceeded | Defendants: Conduct arises from the loan agreement; economic loss rule bars tort recovery for contract-based economic losses | Affirmed for Defendants — fraud claims barred by economic loss rule; claims sound in contract. |
| Breach of good faith & fair dealing | (argued below) lender’s conduct breached duty of good faith | Defendants: No duty of good faith arises in ordinary debtor-creditor relationship | District court dismissal not contested on appeal; appellate brief waived this issue. |
| DTPA standing & accounting | (argued below) sought relief under DTPA and accounting | Defendants: Plaintiff lacks consumer standing under DTPA; no legal basis for accounting absent viable claim | District court dismissal not contested on appeal; appellate brief waived these issues. |
Key Cases Cited
- Hagen v. Aetna Ins. Co., 808 F.3d 1022 (5th Cir.) (summary judgment standard review)
- Brown v. City of Houston, 337 F.3d 539 (5th Cir.) (unsubstantiated assertions insufficient to defeat summary judgment)
- Smith Int’l, Inc. v. Egle Grp., LLC, 490 F.3d 380 (5th Cir.) (elements of breach of contract in Texas)
- Shakeri v. ADT Sec. Servs., Inc., 816 F.3d 283 (5th Cir.) (economic loss rule precludes tort recovery for contract-based economic losses)
- Sw. Bell Tel. Co. v. DeLanney, 809 S.W.2d 493 (Tex.) (economic loss rule: injury limited to contractual expectancy sounds in contract)