Gary Leonard v. Ocwen Loan Servicing, L.L.C
616 F. App'x 677
| 5th Cir. | 2015Background
- In 2006 the Leonards obtained a mortgage secured by their home; they defaulted by missing payments starting October 1, 2008.
- Saxon (the original servicer) sent a Notice of Acceleration on March 27, 2009 but took no further steps toward foreclosure.
- Ocwen succeeded Saxon as servicer in April 2010, sent periodic account statements and an August 4, 2010 letter offering cure of only the past-due payments, then sent a Notice of Acceleration on September 8, 2010 and applied for a foreclosure order on September 29, 2010.
- The Leonards sued in Texas state court in 2013 seeking a declaration that the 2009 acceleration had not been abandoned and that any foreclosure attempt was time-barred after March 27, 2013 (four years from the 2009 Notice); appellees removed and counterclaimed for foreclosure.
- The district court granted summary judgment for Ocwen and Deutsche Bank, holding that Ocwen’s post-2009 conduct unilaterally abandoned Saxon’s 2009 acceleration, restoring the note’s original maturity and defeating the Leonards’ statute-of-limitations defense.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Texas law permits a lender to unilaterally abandon an acceleration | Leonards: lender cannot unilaterally abandon acceleration by conduct; abandonment requires mutual action | Appellees: a lender/servicer can unilaterally abandon acceleration by its actions | Court: Texas law allows unilateral abandonment by lender/servicer |
| Whether Ocwen’s post-2009 conduct abandoned Saxon’s 2009 acceleration | Leonards: Ocwen’s statements and later conduct did not negate the 2009 acceleration; foreclosure was time-barred after 3/27/2013 | Appellees: Ocwen’s account statements, August 4, 2010 cure offer, and subsequent behavior evidenced abandonment of the 2009 acceleration | Court: Ocwen’s conduct unilaterally abandoned the 2009 acceleration, restoring original maturity and negating the limitations-bar defense |
| Effect on foreclosure and monetary relief (limitations/equitable subrogation) | Leonards: expiration of limitations barred foreclosure and any monetary relief | Appellees: abandonment restored maturity so foreclosure and remedies remained available | Court: because abandonment occurred, limitations defense fails and foreclosure relief permitted |
Key Cases Cited
- Young v. Equifax Credit Info. Servs., Inc., 294 F.3d 631 (5th Cir. 2002) (summary-judgment standard and de novo review of grant of summary judgment)
- Haire v. Bd. of Supervisors of La. State Univ. Agric. & Mech. Coll., 719 F.3d 356 (5th Cir. 2013) (summary-judgment standards)
- Khan v. GBAK Props., Inc., 371 S.W.3d 347 (Tex. App.—Houston [1st Dist.] 2012) (party actions can abandon acceleration and restore original maturity)
- San Antonio Real-Estate, Bldg. & Loan Ass’n v. Stewart, 61 S.W. 386 (Tex. 1901) (historic authority recognizing abandonment of acceleration by action)
- Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562 (Tex. 2001) (lender/servicer conduct may constitute unilateral abandonment of acceleration)