BITTERROOT HOLDINGS, L.L.C., Plaintiff-Appellant v. MTGLQ INVESTORS, L.P., Defendant-Appellee.
No. 15-51116
United States Court of Appeals, Fifth Circuit.
May 13, 2016.
648 F. App‘x 414
Summary Calendar.
We therefore AFFIRM the judgment of the district court.
Jeremy Jason Overbey, Esq., James Garth Fennegan, Esq. Settlepou, Dallas, TX, Lauren E. Hayes, Akerman, L.L.P., Dallas, TX, for Defendant-Appellee.
Before KING, CLEMENT, and OWEN, Circuit Judges.
PER CURIAM:*
Plaintiff-Appellant Bitterroot Holdings, L.L.C., filed suit in state court against Defendant-Appellee MTGLQ Investors, L.P., seeking declaratory and injunctive relief to prevent MTGLQ from foreclosing upon a property in San Antonio, Texas. Following removal to federal court, both parties filed motions for summary judgment, with Bitterroot arguing that any foreclosure action by MTGLQ was time barred under Texas law and MTGLQ arguing that its foreclosure action was timely and that it held title to the property in question. The district court denied Bitterroot‘s motion for summary judgment but granted MTGLQ‘s motion. Bitterroot now appeals. For the following reasons, we AFFIRM the judgment of the district court.
I. FACTUAL AND PROCEDURAL BACKGROUND
The instant appeal arises from a dispute over the parties’ right to title and their security interests in a property in San Antonio, Texas. On November 12, 2005, John Harvey executed a Texas Home Equity Note (Note) in the amount of $94,320.00 payable to American Equity Mortgage, Inc., (AME) and executed a Texas Home Equity Security Instrument (Deed of Trust) granting AME a security interest in a property located in San Antonio as part of the loan made to Harvey. The Note included an acceleration clause whereby the holder of the Note could require immediate payment of the principal of the Note and all interest on the Note in the event that Harvey defaulted on payments required by the Note and Deed of Trust. Under the Deed of Trust, the noteholder could foreclose on the property in the event of default by Harvey pursuant to the holder‘s security interest in the property. Thereafter, a nominee for AME assigned the Note and the Deed of Trust to Citimortgage, Inc. (Citimortgage).
On October 26, 2007, Citimortgage informed Harvey that he was in default on his loan and needed to pay $1,976.38 in order to cure the default. Citimortgage then sent another Notice of Default on November 3, 2008, informing Harvey that failure to cure the default would result in acceleration of the loan. Finally, on February 20, 2009, Citimortgage sent Harvey a Notice of Acceleration informing him that Citimortgage had elected to accelerate the maturity of the debt. Citimortgage subsequently filed an application for foreclosure of the property guaranteed as a security interest under the Deed of Trust but later successfully moved to have
In a matter unrelated to MTGLQ‘s security interest, the property was sold in 2011 to DTND Sierra Investments, LLC (DTND), at a homeowner‘s association foreclosure sale resulting from Harvey‘s failure to pay the homeowner‘s association assessments and dues. DTND later assigned its interest in the property to Plaintiff-Appellant Bitterroot Holdings, LLC (Bitterroot). Following the sale, MTGLQ‘s counsel sent another Notice of Default and Notice of Acceleration to Harvey stating that MTGLQ had decided to accelerate the maturity of Harvey‘s debt. MTGLQ then filed its own application for foreclosure of the property in the 166th Judicial District Court of Bexar County, Texas, on June 24, 2013. And on November 8, 2013, that court ruled that MTGLQ could proceed with a foreclosure sale of the property based on its rights under the Note and the Deed of Trust.
Seeking to enjoin the foreclosure sale, Bitterroot filed the instant action in the 73rd Judicial District Court of Bexar County on August 1, 2014. MTGLQ then removed the action to the United States District Court for the Western District of Texas on October 2, 2014, asserting diversity jurisdiction under
Both parties moved for summary judgment on July 6, 2015. In its motion for summary judgment against Bitterroot, MTGLQ asserted its right to foreclose and that it had superior title to Bitterroot. MTGLQ also argued that its foreclosure action was timely filed within the relevant limitations period because it brought the action within four years of accelerating the loan in 2012 and that any previous acceleration attempts were immaterial to the limitations period because they were abandoned. MTGLQ attached a number of exhibits to its motion, including the affidavit of a senior loan analyst, Howard R. Handville, who recounted the history of the Note and the Deed of Trust leading up to Bitterroot‘s suit. Bitterroot, for its part, moved for partial summary judgment against MTGLQ. In its motion, Bitterroot argued that MTGLQ was barred from bringing the foreclosure action. Bitterroot claimed that the four-year limitation period to bring a foreclosure action had run because there had been an acceleration of the Note in 2008, and Citimortgage and MTGLQ had failed to abandon the acceleration. In the alternative, Bitterroot argued that Harvey had relied upon the 2008 acceleration notice and that his reliance precluded Citimortgage or MTGLQ from abandoning the acceleration. Bitterroot later filed its opposition to MTGLQ‘s motion for summary judgment, contending that the Handville affidavit could not be considered by the court because Handville had not been identified as a witness in MTGLQ‘s Rule 26 disclosures.
On October 23, 2015, the district court entered final judgment denying Bitterroot‘s motion for partial summary judgment and granting MTGLQ‘s motion for summary judgment. With respect to the
II. STANDARD OF REVIEW
We review a grant of summary judgment de novo, applying the same standard as the district court. Rogers v. Bromac Title Servs., L.L.C., 755 F.3d 347, 350 (5th Cir. 2014). Summary judgment is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
III. STATUTE OF LIMITATIONS
On appeal, Bitterroot primarily argues that the district court erred because MTGLQ‘s right to foreclose was barred by the statute of limitations.2 Texas law provides that “[a] sale of a real property under a power of sale in a mortgage or deed of trust that creates a real property lien must be made not later than four years after the day the cause of action accrues.”
The district court found that, while Citimortgage had previously twice accelerated the Note upon default in 2008 and 2010, both notices of acceleration had been abandoned when Citimortgage dismissed its foreclosure actions in state court.3 As a result, the limitations period on MTGLQ‘s foreclosure action began when it accelerated the Note in 2012, and its action was filed within the four-year limitations period. Bitterroot does not contest the district court‘s holding with respect to abandonment but argues instead that abandonment could not have reset the limitations period because Harvey had detrimentally relied on the initial acceleration by Citimortgage. According to Bitterroot, the district court erred when it concluded that there was no detrimental reliance exception to abandonment of acceleration under Texas law.
However, we need not determine whether or not the district court erred in this respect because it correctly found that, assuming that there was a detrimental reliance exception to abandonment, Harvey failed to show detrimental reliance. See Bramblett v. Comm‘r, 960 F.2d 526, 530 (5th Cir. 1992) (“This court can affirm a lower court‘s decision if there are any grounds in the record to support the judgment.“); cf. Boren v. U.S. Nat‘l Bank Ass‘n, 807 F.3d 99, 105 (5th Cir. 2015) (“As an initial matter, Texas’ intermediate appellate courts are in agreement that the holder of a note may unilaterally abandon acceleration after its exercise, so long[] as the borrower neither objects to abandonment nor has detrimentally relied on the acceleration.“). In order to show detrimental reliance under Texas law, a party “must show that he materially changed his position in reliance” on another party‘s promise or representation. Sandel v. ATP Oil & Gas Corp., 243 S.W.3d 749, 753 (Tex. App.—Houston [14th Dist.] 2007, no pet.). In support of its detrimental reliance argument, Bitterroot alleged—through Harvey‘s own affidavit—that, as a result of the original acceleration, Harvey decided not to pay off debt he owed to a homeowner‘s association, decided not to get loan modification assistance, and moved out of his home.
As the district court correctly concluded, the evidence adduced by Bitterroot was insufficient to show a dispute of material fact that Harvey relied on the Citimortgage acceleration to his detriment. Harvey‘s decision not to pay off a debt following the original acceleration was not a material change in his position because he was in debt before and after the accelera-
IV. BITTERROOT‘S OBJECTION TO THE HANDVILLE AFFIDAVIT
Separately, Bitterroot argues that the district court should not have allowed MTGLQ to introduce the Handville Affidavit as evidence because MTGLQ failed to include Handville as a witness in its Rule 26 initial disclosures. A party is generally “not allowed to use information or [a] witness to supply evidence on a motion, at a hearing, or at a trial” where that party “fails to provide information or identify a witness [in its initial disclosures] as required by Rule 26(a) or (e).”
The district court did not abuse its discretion in permitting the Handville affidavit to be introduced. As the district court recognized, the affidavit was important to the case, as it authenticated many of the claims at issue in the case and traced the history of the Note and the Deed of Trust. There was also no surprise in introducing the affidavit because, while the affidavit had not been included in MTGLQ‘s Rule 26 disclosures, the affidavit had previously been used without objection by MTGLQ in a motion opposing remand. Moreover, the district court recognized that the failure to disclose the affidavit was not deliberate, but rather due to the fact that the court‘s own scheduling order did not make clear the deadline for the Rule 26 disclosures. We cannot conclude based on these detailed findings that the district court abused its discretion when it admitted the affidavit into evidence.
V. CONCLUSION
For the foregoing reasons, we AFFIRM the district court‘s judgment.
John DEUTSH, Plaintiff-Appellant v. RICHARD WATSON INSURANCE AGENCY, INCORPORATED, Defendant-Appellee.
No. 15-51168
United States Court of Appeals, Fifth Circuit.
May 13, 2016.
Summary Calendar.
Omar Weaver Rosales, Rosales Law Firm, L.L.C., Austin, TX, for Plaintiff-Appellant.