Livier Hernandez v. Select Portfolio Svc, Inc.
687 F. App'x 371
| 5th Cir. | 2017Background
- In 2004 Hernandez executed a promissory note and deed of trust; she defaulted in 2008 and received a notice of acceleration on August 7, 2008.
- No payments were made after the August 7, 2008 acceleration notice.
- Between 2010 and 2014, servicers (and predecessors) sent multiple letters offering Hernandez an opportunity to cure with partial payments (Aug. 19, 2010; Oct. 4, 2012; Jan. 1, 2014), each stating the full balance would be accelerated if she failed to cure.
- On Nov. 4, 2014 the servicer notified Hernandez the default was not cured and accelerated the loan, listing a trustee sale for Dec. 2, 2014. Hernandez sued on Dec. 1, 2014 claiming the statute of limitations had run and that defendants had waived acceleration.
- District court granted summary judgment for the servicer (ruling prior acceleration had been abandoned), denied Hernandez’s reconsideration, entered judgment, and Hernandez appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether lender’s prior acceleration was abandoned so that the statute of limitations stopped running | Hernandez: acceleration remained in effect from Aug. 7, 2008 and limitations ran | SPS: subsequent cure-offer letters unequivocally manifested intent to abandon prior acceleration and restored note to original status | Court: held acceleration was abandoned by Aug. 19, 2010; statute of limitations ceased to run until lender re-accelerated in 2014 |
| Whether suit was timely under Tex. Civ. Prac. & Rem. Code § 16.035 | Hernandez: action accrued at 2008 acceleration, so suit in 2014 was time-barred | SPS: accrual paused when acceleration abandoned; new accrual occurred at Nov. 4, 2014 acceleration, suit filed within 4 years | Court: suit was timely because the actionable accrual followed the 2014 re-acceleration |
| Whether district court erred procedurally in granting summary judgment without responding party’s filing | Hernandez: district court erred because SPS did not respond to her summary-judgment motion | SPS: undisputed facts supported judgment; failure to respond is not basis for granting summary judgment | Court: rejected procedural objection — merits supported summary judgment |
Key Cases Cited
- Boren v. U.S. Nat’l Bank Ass’n, 807 F.3d 99 (5th Cir. 2015) (lender may unilaterally abandon acceleration by offering a cure amount less than full balance; abandonment stops limitations accrual)
- Martin v. Fed. Nat’l Mortg. Ass’n, 814 F.3d 315 (5th Cir. 2016) (statute of limitations begins to run from the most recent valid acceleration, not earlier abandoned accelerations)
- QBE Ins. Corp. v. Brown & Mitchell, Inc., 591 F.3d 439 (5th Cir. 2009) (standard of review for summary judgment is de novo)
- John v. La. (Bd. of Trustees for State Colleges and Universities), 757 F.2d 698 (5th Cir. 1985) (failure to respond is not, by itself, a proper ground to grant summary judgment)