915 F.3d 987
5th Cir.2019Background
- In 2003 Wease executed a home-equity note on Texas property with a deed of trust; Wells Fargo is beneficiary and Ocwen is servicer.
- The deed of trust included an Escrow Waiver Agreement: borrower to pay taxes when due and supply evidence; lender could revoke waiver and establish an escrow by notice.
- HomeEq (prior servicer) notified Wease in April 2010 that 2009 taxes were delinquent; Wease paid 2009 taxes by June 30, 2010.
- Ocwen became servicer in August 2010 and, without prior notice, paid Wease’s 2010 taxes on December 16, 2010; Wease later paid and was refunded.
- On June 6, 2011 Ocwen sent an escrow disclosure stating an escrow shortage and that monthly payments would increase; Ocwen had not given earlier written notice revoking the waiver.
- Wease defaulted; he sent misaddressed QWRs and sued for breach of contract, equitable relief (unclean hands), RESPA violations, and TDCA violations; district court granted summary judgment to Ocwen and foreclosure counterclaim succeeded; on appeal the Fifth Circuit reversed in part and affirmed in part.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether deed of trust allowed Ocwen to pay non-delinquent 2010 taxes and start escrow | Wease: Ocwen breached by prepaying 2010 taxes and creating escrow without proper trigger/notice | Ocwen: Section 9 allows lender to take reasonable actions to protect its interest; revocation and prepayment permissible | Deed of trust ambiguous on whether lender could prepay future taxes; summary judgment improper — factual question for trial |
| Whether Ocwen provided contractually required notice revoking escrow waiver | Wease: No written notice before Ocwen paid 2010 taxes; June 2011 letter was too late | Ocwen: June 2011 disclosure sufficed to notify borrower of actions taken in December | Court: Ocwen failed to provide required notice before paying taxes; summary judgment on notice was erroneous |
| Whether misaddressed QWRs triggered RESPA duties | Wease: Ocwen’s communications and varying addresses meant QWRs were effective despite misaddressing | Ocwen: It designated an exclusive QWR address; misaddressed letters do not trigger RESPA duties | Court: Affirmed district court — borrower failed to send QWRs to exclusive address; RESPA claim dismissed |
| Whether TDCA claim based on harassing calls survived summary judgment | Wease: He alleged harassing calls and submitted a declaration | Ocwen: Movant showed gaps and argued claims abandoned | Court: Wease abandoned TDCA claim by failing to adequately identify supporting evidence in opposition; summary judgment affirmed |
Key Cases Cited
- Kariuki v. Tarango, 709 F.3d 495 (5th Cir. 2013) (summary-judgment de novo standard)
- Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323 (Tex. 2011) (contract interpretation focuses on parties’ intent as expressed in writing)
- El Paso Field Servs., L.P. v. MasTec N. Am., Inc., 389 S.W.3d 802 (Tex. 2012) (when contract terms are definite, court may interpret as a matter of law)
- Bivens v. Bank of Am., N.A., 868 F.3d 915 (11th Cir. 2017) (QWRs must be sent to servicer’s designated exclusive address to trigger RESPA duties)
- Berneike v. CitiMortgage, Inc., 708 F.3d 1141 (10th Cir. 2013) (communications not sent to designated address do not constitute QWRs)