Timothy Martin v. Federal National Mtge Assoc
814 F.3d 315
| 5th Cir. | 2016Background
- Martin borrowed $140,000 in July 2004, secured by a note and DOT naming MERS as nominee and Wells Fargo as successor; Wells Fargo acquired the note and DOT.
- DOT included non-waiver provisions restricting liability release or precluding exercise of remedies after forbearance or payments by third parties.
- Martin defaulted with late December 2009 payment; Wells Fargo reportedly advised not be three payments behind to avoid foreclosure.
- Wells Fargo later returned May and June 2011 payments and designated the property for foreclosure sale; foreclosure sale occurred December 4, 2012, with Fannie Mae purchasing the property for $168,011.14.
- Martin filed state-court suits against MERS (2011) and Wells Fargo (2013); then sued Fannie Mae in 2013 after removal, seeking to quiet title based on alleged waiver of foreclosure rights; district court dismissed, and the Fifth Circuit affirmed.
- The court held the DOT’s non-waiver provisions preserved Wells Fargo’s right to accelerate/foreclose, and Martin’s waiver theories failed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether non-waiver provisions apply to quiet-title claim | Martin (plaintiff) argues non-waiver provisions do not apply to reinstating the note | Wells Fargo (defendant) contends non-waiver provisions preserve rights to accelerate/foreclose | Yes; non-waiver provisions apply to the claim |
| Whether Wells Fargo waived its right by accepting partial payments | Martin asserts Wells Fargo abandoned acceleration by accepting partial payments for 16 months | Wells Fargo did not abandon acceleration; accepted payments as contemplated by DOT | No; no waiver/abandonment shown by conduct under DOT |
| Whether delay in foreclosure indicates waiver under Texas/foreign law | Martin relies on cases suggesting abandonment by delay/acceptance of payments | Correlation to DOT’s explicit non-waiver language; no waiver proven | No; delay did not waive rights given DOT |
Key Cases Cited
- Thompson v. Bank of Amer., Nat’l Ass’n, 783 F.3d 1022 (5th Cir. 2015) (twelve postponements did not waive right to foreclose where DOT had non-waiver provisions)
- Boren v. U.S. Nat’l Bank Ass’n, 807 F.3d 99 (5th Cir. 2015) (waiver/abandonment may arise from partial payment after acceleration; timing matters)
- Leonard v. Ocwen Loan Servicing, L.L.C., 616 F. App’x 677 (5th Cir. 2015) (accepting payments after acceleration can indicate abandonment; not decided here)
- Rivera v. Bank of Am., N.A., 607 F. App’x 358 (5th Cir. 2015) (abandonment by accepting payments may affect acceleration)