919 F. Supp. 2d 852
S.D. Tex.2013Background
- Tekelia Gossett purchased a home in 2008 and executed a promissory note and deed of trust to Wells Fargo Bank.
- Gossett alleges she sought a loan modification beginning in 2009 and entered a HAMP trial modification on March 1, 2010.
- Wells Fargo allegedly provided oral confirmation of a modification and accepted payments through late 2010, but did not send written confirmation of the modification.
- Foreclosure proceedings were initiated in 2010 after notices of default and acceleration were issued; the property was sold at foreclosure on December 7, 2010, to FHLC (now owning the property).
- Plaintiffs were later evicted via forcible entry and detainer; they filed suit alleging lack of proper notice and multiple statutory/consumer-protection claims.
- Defendants moved for summary judgment on all claims, arguing proper notices were sent and the modification was not enforceable as a matter of law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Wells Fargo timely sent required notices and foreclosed properly | Gossett asserts improper notices violated §51.002 and Deed of Trust terms. | Wells Fargo timely mailed notices and fulfilled notice requirements under statute and deed. | Yes; summary judgment for defendants on breach of contract and foreclosure claims. |
| Whether there was a legally enforceable loan modification | Gossett relied on an oral modification and modification-related promises. | No written modification existed; statute of frauds bars oral modifications for real estate loans. | Yes; no enforceable oral modification; modification not enforceable. |
| Whether DTPA claim fails for lack of consumer status | Gossett is a consumer seeking to modify a loan under DTPA. | Gossett is not a consumer; lending money/loan modification is not a good/service for DTPA purposes. | Plaintiffs not consumers; DTPA claim dismissed. |
| Whether TDCA claim survives absence of written evidence of modification | Defendants engaged in unfair/deceptive collection/foreclosure conduct. | TDCA claim lacks support; no written forbearance/ modification evidence exists; notices proper. | TDCA claim dismissed. |
| Whether negligent infliction of emotional distress is cognizable here | Gossett alleges distress from wrongful foreclosure and discovery responses. | Texas does not recognize NIED in this context; claims fail as a matter of law. | NIED claim dismissed. |
Key Cases Cited
- Univ. Savings Ass'n v. Springwoods Shopping Ctr., 644 S.W.2d 705 (Tex. 1982) (strict notice compliance required for lawful foreclosure)
- Onwuteaka v. Cohen, 846 S.W.2d 889 (Tex.App.-Houston [1st Dist.] 1993) (notice under §51.002 is constructive; actual receipt not necessary)
- SP Terrace, L.P. v. Meritage Homes of Texas, LLC, 334 S.W.3d 275 (Tex.App.-Houston [1st Dist.] 2010) (statute of frauds governs real estate contracts and must be in writing)
- American Garment Properties, Inc. v. C.B. Richard Ellis-El Paso, LLC, 155 S.W.3d 431 (Tex.App.-El Paso 2004) (modification materiality and written modifications under statute of frauds)
- Brown v. Bank of Galveston, Nat. Ass’n, 930 S.W.2d 140 (Tex.App.-Houston [14th Dist.] 1996) (DTPA consumer status requires goods/services aspect)
- Riverside Nat’l Bank v. Lewis, 603 S.W.2d 169 (Tex. 1980) (loan-related claims; consumer protection limits)
- White v. Mellon Mortg. Co., 995 S.W.2d 795 (Tex.App.-Tyler 1999) (service/loan-modification activity evaluated for DTPA purposes)
- Dracopoulas v. Rachal, 411 S.W.2d 719 (Tex. 1967) (statute of frauds and contract modification principles)