Summary
holding that the dispositive inquiry under section 51.002(e) of the property code is not receipt of notice, but, rather, service of notice
Summary of this case from Sauceda v. GMAC Mortgage Corp.Opinion
No. 01-07-00708-CV
Opinion issued May 29, 2008.
On Appeal from the 189th District Court Harris County, Texas, Trial Court Cause No. 2006-46427.
Panel consists of Chief Justice RADACK and Justices KEYES and HIGLEY.
MEMORANDUM OPINION
Appellant, Adekunle Adebo, challenges a traditional summary judgment rendered in favor of appellee, Litton Loan Servicing, L.P. (Litton) against Adebo's claim of wrongful foreclosure. In his single issue, Adebo argues that the trial court erred by rendering summary judgment because Litton did not demonstrate to the trial court that Adebo had been provided an opportunity to cure his default before the foreclosure. Adebo contends that section 51.002 of the Property Code requires that showing. See Tex. Prop. Code Ann. § 51.002 (Vernon Supp. 2007). We affirm.
Background
Adebo is the former owner of real property located at 12251 Sandpiper Drive, Houston in Harris County (the property). Adebo purchased the property in March 2001, having executed a $22,500.00 promissory note in favor of Litton's predecessor-in-interest. The note was secured by a deed of trust on the property, which required a monthly payment of approximately $233.41. Litton is the current mortgage-servicing company for Adebo's loan. It is undisputed that Adebo rented the property and did not use it as his residence.
Litton is agent for the mortagee, Deutsche Bank National Trust Company as Trustee. The original mortgagee was Casa Mortgage, Inc.
Adebo had been in default on his monthly payments since January 2006 when Litton notified him by letter on March 20, 2006 that (1) he was in default, (2) Litton intended to accelerate the note, and (3) he had 45 days to cure his default. The default amount then was $524.00. Adebo did not cure the default. On April 13, 2006, Litton sent Adebo a statement indicating that $1,710 was due to be paid by May 1, 2006. Adebo did not cure the default. By correspondence dated May 25, 2006, Litton served Adebo with notice, by certified mail, of its intent to accelerate the loan, based on his default, that the amount due as of that date was $25,925.90, and that on acceleration, the note would be referred for foreclosure by substitute trustee's sale on or after July 4, 2006. Adebo sent a Litton a check dated June 1, 2006 in the amount of $700, but Litton returned it to Adebo by a letter dated June 7, 2006, in which Litton reported that the remittance was insufficient to pay the full amount due and that the loan was in the process of foreclosure.
The increase in the balance from March 2006 to April 2006 derives from Litton's having paid property taxes on the property. The trial court ruled that this payment was proper; Adebo has not challenged that ruling on appeal.
Adebo had missed seven payments when the loan was foreclosed at a substitute trustee's sale on July 4, 2006 and purchased by the current mortgagee. When the new owner sought to evict Adebo and his tenants, Adebo filed a petition on July 31, 2006, claiming that Litton had foreclosed on the property without serving him "proper notice" and without affording him "an opportunity to pay the amounts allegedly owed." Adebo sought a temporary restraining order and a temporary injunction to prevent the eviction, which the trial court denied, and also sought to enjoin Litton from selling the property "to another person." Adebo's sworn pleadings allege wrongful foreclosure. In addition, he challenged Litton's "unilateral decision" and authority to pay property taxes on the property and thereby increase the amount necessary to pay off the balance. Adebo's sworn pleadings acknowledge that he resides at a different address than the property address.
Litton answered by general denial on December 27, 2006 and filed a motion for traditional summary judgment on February 28, 2007. Adebo filed his late response with leave of court on July 19, 2007, and the trial court rendered summary judgment in favor of Litton on July 19, 2007. The trial court's order specifies that (1) the July 6, 2006 foreclosure sale "was in all respects valid" and (2) Litton properly paid taxes on the property pursuant to the terms of the deed of trust.
Adebo challenges only the first basis of the trial court's ruling.
Standard of Review
We review summary judgments de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). In reviewing a summary judgment, we must indulge every reasonable inference in favor of the nonmovant, take all evidence favorable to the nonmovant as true, and resolve any doubts in favor of the nonmovant. Id. A defendant who moves for traditional summary judgment on the plaintiff's claims must conclusively disprove at least one element of each of the plaintiff's causes of action. Little v. Tex. Dep't of Criminal Justice, 148 S.W.3d 374, 381 (Tex. 2004).
Discussion
In his single issue on appeal, Adebo contends that the summary judgment must be reversed because "there is no evidence in the record that [Litton] ever gave proper notice" of the substitute trustee's sale of the property and therefore failed to comply with section 51.002(b) of the Property Code.
A. Litton's Motion on Notice of Foreclosure and Adebo's Response
In moving for summary judgment on Adebo's wrongful-foreclosure claim, Litton demonstrated that Adebo was seven months in default on his loan obligation before the July 4, 2006 foreclosure sale, and that Litton had given proper notice of the sale.
To support the latter contention, Litton relied first on the business-records affidavit of its vice-president, who stated that Adebo had been provided notice on March 20, 2006, by certified mail, of his default, Litton's intent to accelerate, and his 45-day opportunity to cure, lest the matter be referred for foreclosure, which would take place in approximately 60 days. Notice was sent to Adebo at the property and at his residence address. Litton also provided the business-records affidavit of the foreclosure director of the foreclosing agency to which Litton had referred the matter of Adebo's loan. The director stated in her affidavit and demonstrated, through supporting documentation, that on May 25, 2006 Adebo had been provided notice, by certified mail sent both to the property and to Adebo's residence, that the note had been accelerated and that a substitute trustee sale would take place, at the earliest, at 10 a.m. on July 4, 2006.
Responding to Litton's motion on the issue of notice, Adebo provided his own affidavit in which he denied that he had ever received notice of the foreclosure sale. Adebo argued that a jury should determine whether Litton's conduct was lawful, given that he did not receive a response to his June 21, 2006 telecopier transmission requesting the amount of "pay off balance" due on his loan.
B. Compliance with Notice under Section 51.002 of the Property Code
The controlling statute is section 51.002 of the Property Code, which governs foreclosure sales of real property under contract lien. See Tex. Prop. Code Ann. § 51.002. Subsection (b) of section 51.002 provides that notice of the sale must be given at least 21 days before the date of the sale by all three of the following means:
(1) posting at the courthouse door of each county in which the property is located a written notice designating the county in which the property will be sold;
(2) filing in the office of the county clerk of each county in which the property is located a copy of the notice posted under Subdivision (1); and
(3) serving written notice of the sale by certified mail on each debtor who, according to the records of the mortgage servicer of the debt, is obligated to pay the debt.
Tex. Prop. Code Ann. § 51.002(b)(1)-(3) (emphasis added). Regarding notice to the debtor, subsection (d) further specifies that,
(d) Notwithstanding any agreement to the contrary, the mortgage servicer of the debt shall serve a debtor in default under a deed of trust or other contract lien on real property used as the debtor's residence with written notice by certified mail stating that the debtor is in default under the deed of trust or other contract lien and giving the debtor at least 20 days to cure the default before notice of sale can be given under Subsection (b). The entire calendar day on which the notice required by this subsection is given, regardless of the time of day at which the notice is given, is included in computing the 20-day notice period required by this subsection, and the entire calendar day on which notice of sale is given under Subsection (b) is excluded in computing the 20-day notice period.
Tex. Prop. Code Ann. § 51.002(d) (emphasis added).
Adebo concedes in his pleadings that the property is not his residence. Accordingly, section 51.002(d) does not apply. Litton nonetheless complied with section 51.002(d) through the affidavit of its vice-president, who stated that Adebo had been provided certified-mail notice on March 20, 2006 that he was in default, that Litton intended to accelerate, and that he had 45-days cure his default, at the risk of foreclosure, which would take place in approximately 60 days. Having been sent on March 20, 2006 and having provided a 45-day opportunity to cure, Litton's notice exceeded the requirements of section 51.002(d).
Adebo nonetheless insists that he raised a triable issue of fact concerning Litton's compliance with subsection 51.002(b) because he denied ever receiving "any official foreclosure notices" from Litton. As subsection (e) of section 51.002 provides, however,
(e) Service of a notice under this section by certified mail is complete when the notice is deposited in the United States mail, postage prepaid and addressed to the debtor at the debtor's last known address. The affidavit of a person knowledgeable of the facts to the effect that service was completed is prima facie evidence of service.
Tex. Prop. Code Ann. § 51.002(e) (emphasis added). Litton provided the "prima facie evidence" referred to in this statute through the affidavits of its vice-president and the foreclosure director of the foreclosing agency, both of whom averred compliance with the certified mail required to accomplish service, both at the property and at Adebo's address.
To raise a triable issue of fact to defeat Litton's summary-judgment showing of compliance with the notice requirements of section 51.002, Adebo had to present some evidence, more than a scintilla of evidence, i.e., legally sufficient evidence, to raise an issue of fact to defeat Litton's prima facie case on the notice element. Walker v. Harris, 924 S.W.2d 375, 377 (Tex. 1996); Haight v. Savoy Apartments, 814 S.W.2d 849, 851 ((Tex.App.-Houston [1st Dist.] 1991, writ denied); see also City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex. 2005) ("[T]he test for legal sufficiency should be the same for summary judgments, directed verdicts, judgments notwithstanding the verdict, and appellate no-evidence review."). The "final test" for legal sufficiency "must always be whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review." City of Keller, 168 S.W.3d at 827.
As the supreme court reaffirmed in City of Keller, evidence is legally insufficient when (1) there is a complete absence of a vital fact; (2) rules of law or evidence preclude according weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a scintilla; or (4) the evidence conclusively establishes the opposite of the vital fact. See City of Keller, 168 S.W.3d at 810.
In this case, Adebo contends that he has raised an issue for a jury's determination, based on his having denied ever receiving "any official foreclosure notices" from Litton regarding foreclosure. The dispositive inquiry under section 51.002(e), however, is not receipt of notice, but, rather, service of notice. See Tex. Prop. Code Ann. § 51.002(e) (stating that " Service of a notice under this section by certified mail is complete when the notice is deposited in the United States mail, postage prepaid and addressed to the debtor at the debtor's last known address.")
To defeat Litton's summary-judgment showing of compliance with the notice provisions section 51.002, therefore, Adebo had to defeat Litton's evidence that its notices had been deposited in the mail, by certified mail, postage prepaid, and addressed to Adebo, as stated in the affidavits of Litton's vice-president and the foreclosure director of the foreclosing agency. But Adebo did not defeat that showing. By operation of "the rule of law" of effective service stated in section 51.002(e), we are precluded, as was the trial court, from giving effect, i.e., "according any weight" to the only evidence that Adebo "offered to prove [the] vital fact" that Litton did not comply with section 51.002. See City of Keller, 168 S.W.3d at 810.
We overrule Adebo's issue on appeal.
Conclusion
We affirm the judgment of the trial court.