Cisneros v. Franklin Credit Mgmt Corp ( 2022 )

Case: 22-40125 Document: 00516510950 Page: 1 Date Filed: 10/17/2022
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
October 17, 2022
No. 22-40125 Lyle W. Cayce
Summary Calendar Clerk
Reynaldo Cisneros,
Plaintiff—Appellant,
versus
Franklin Credit Management Corporation,
Defendant—Appellee.
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 1:21-CV-106
Before Stewart, Duncan, and Wilson, Circuit Judges.
Per Curiam:*
In this appeal arising out of a foreclosure dispute, the district court
granted summary judgment in favor of the loan servicer, Franklin Credit
Management Corporation (“Franklin”), on grounds that sufficient notice
*
Pursuant to 5th Circuit Rule 47.5, the court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5th Circuit Rule 47.5.4.
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No. 22-40125
was given, and the foreclosure action was properly conducted. For the
following reasons, we AFFIRM.
I. FACTUAL & PROCEDURAL BACKGROUND
On August 12, 2005, Reynaldo Cisneros (“Cisneros”) executed a
purchase money note (“Note”) in the amount of $31,000 payable to
Mortgage Investment Lending Associates, Inc. (“MILA”).
Contemporaneously with the Note, Cisneros executed a purchase money
security document (“Security Instrument”) in the amount of $124,000 in
favor of MILA. The two documents together comprised the loan agreement
between the parties (the “Loan Agreement”) that pertained to real property
located at 1963 Royal Oak Drive in Brownsville, Texas (“Royal Oak”).
On February 28, 2006, MILA assigned and transferred the Loan
Agreement to Franklin. Franklin then assigned and transferred the Loan
Agreement to Wilmington Savings Fund Society (“Wilmington”) but
continued to act as the loan servicer for Wilmington. Relevant here, the Loan
Agreement provided that notice must be given to Cisneros prior to
acceleration in the event of a default on the loan. The terms further stated
that the notice must contain “(a) the default; (b) the action required to cure
the default; (c) a date, not less than 21 days from the date notice was given,
to cure the default; and (d) that failure to cure the default on or before the
specified date will result in acceleration of the remaining balance under the
loan agreement and sale of [Royal Oak].” Additionally, the terms stated that
“any notice will be considered given to Cisneros when it is mailed by first-
class mail or when actually delivered to the [Royal Oak] address if given by
another means.” Franklin was required to “give notice to the [Royal Oak]
address unless [Cisneros] provide[d] a different address.” The terms also
provided that Cisneros must “notify Franklin promptly of any change of
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address” and “there will only be one address for notice under the loan
agreement.”
Cisneros failed to make his monthly mortgage payments. On
September 1, 2020, Franklin sent correspondence to Cisneros at the Royal
Oak address notifying him that he was in default and that the loan balance
would be accelerated under the terms of the agreement. The notice indicated
that Cisneros would be required to pay $3,343.61 by October 6, 2020, to cure
the default and warned that failure to pay would result in acceleration of the
loan and the sale of Royal Oak.
After Cisneros failed to cure the default, Franklin sent him a notice of
acceleration (“Notice”) on November 4, 2020. The Notice advised Cisneros
that “the entire unpaid principal balance of the note, all accrued interest, and
all other sums lawfully owing on the note or under the deed of trust are now
due and payable and demand is made for the immediate payment in full of all
such sums.” The Notice indicated that the foreclosure would take effect on
December 1, 2020.
On November 5, 2020, a notice of trustee’s sale was filed. Then on
December 1, 2020, Franklin initiated the foreclosure sale and Royal Oak was
sold to Eric Williams (“Williams”). On June 25, 2021, Cisneros filed suit
against Franklin and Williams in the 197th District Court in Cameron
County, Texas. On July 16, 2021, Franklin removed the case to federal court
and filed a counterclaim for a declaratory judgment that it had properly
conducted the foreclosure proceedings on Cisneros’ home.
On July 21, 2021, pursuant to 28 U.S.C. § 1746, Franklin filed a
declaration from its legal counsel in the district court record which stated that
“the notice of default was sent to Cisneros by certified mail and regular U.S.
mail to [Royal Oak], his last known property address of record.” On July 27,
2021, Franklin moved for summary judgment on grounds that it had
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“complied with all notice requirements before foreclosing” on the Royal Oak
property. On August 10, 2021, Cisneros filed a response in opposition to
Franklin’s summary judgment motion contending that Franklin was unable
to prove that notice was properly delivered and alleging that the certified mail
receipt was forged.
On November 8, 2021, the district court dismissed Cisneros’ claims
against Williams and referred the summary judgment motion to the
magistrate judge (“MJ”) for report and recommendation. The MJ
recommended that the district court grant summary judgment in favor of
Franklin. Cisneros did not object. The district court adopted the magistrate
judge’s report and recommendation rendered summary judgment in favor of
Franklin. Cisneros filed this appeal.
II. STANDARD OF REVIEW
We conduct a de novo review of a district court’s grant of summary
judgment. Sanders v. Christwood, 970 F.3d 558, 561 (5th Cir. 2020).
“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.’” Id. (citing FED. R. CIV. P. 56(a)). “A panel may affirm
summary judgment on any ground supported by the record, even if it is
different from that relied on by the district court.” Reed v. Neopost USA, Inc.,
701 F.3d 434, 438 (5th Cir. 2012) (internal quotation marks and citation
omitted).
III. DISCUSSION
Cisneros argues that the district court erred in granting summary
judgment in favor of Franklin because (1) he did not receive proper notice
under the terms of the Loan Agreement and (2) Franklin violated his due
process rights during the foreclosure proceedings. We address each issue in
turn.
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A. Notice
The Texas Property Code provides that “service of a notice . . . 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.” See TEX. PROP. CODE ANN. 51.002(e). Section 51.002(e) states
that the purpose of the notice is “to provide a minimum level of protection
to the debtor, and actual receipt of the notice is not necessary.” WMC Mortg.
Corp. v. Moss, No. 01-10-00948-CV, 2011 WL 2089777, at *7 (Tex. App. May
19, 2011). This court has acknowledged that “[t]he affidavit of a person
knowledgeable of the facts to the effect that service was completed is prima
facie evidence of service.” Martins v. BAC Home Loan Servicing, L.P., 722
F.3d 249, 256 (5th Cir. 2013).
Under Texas law, only constructive notice is required. Rodriguez v.
Ocwen Loan Servicing, LLC, 306 F. App’x 854, 856 (5th Cir. 2009). This
court has held that “the dispositive inquiry is not receipt of notice, but rather
service of notice.” Douglas v. Wells Fargo Bank, N.A., 992 F.3d 367, 372 (5th
Cir. 2021) (internal quotations and citation omitted) (emphasis in
original). Moreover, we have clarified that “self-serving protestations of
non-receipt of notice do not create a genuine dispute as to whether a
mortgage lender mailed notices of intent to accelerate.” LSR Consulting v.
Wells Fargo Bank, N.A., 835 F.3d 530, 535 (5th Cir. 2016).
Cisneros argues that a genuine factual dispute exists herein because
Franklin has “no supporting documentation showing that it had served
notice.” He contends that the postal tracking return notification “is not his
signature and [does not serve] as a clear indication of [his] delivery address.”
We disagree.
Franklin complied with applicable Texas law by providing proper
notice of default via certified mail with a return receipt that warned Cisneros
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if he did not cure the default by October 6, 2020, the terms of the Loan
Agreement would be accelerated, and a foreclosure sale would take place. See
TEX. PROP. CODE ANN. 51.002(e). This notice included all material
information Cisneros would need to cure the default, so it was also in
compliance with the terms of the Loan Agreement. Franklin further provided
ample supporting documentation in the form of declaration from its counsel
which stated that the notice of default had been sent to Cisneros via certified
mail at the proper address. See Martins, 722 F.3d at 256. As noted, Cisneros’
“self-serving protestations of non-receipt” do not create a genuine factual
dispute as to whether Franklin mailed notice of its intent to accelerate. LSR
Consulting, 835 F.3d at 535. Accordingly, we hold that Franklin satisfied its
notice obligations prior to initiating the foreclosure sale.
B. Due Process
Cisneros next argues that his due process rights were violated because
he did not receive actual receipt of notice of the foreclosure sale. Because
Cisneros raises this argument for the first time on appeal, however, he has
forfeited it and we decline to address it herein. See Chevron USA, Inc. v. Aker
Maritime, Inc., 689 F.3d 497, 503 (5th Cir. 2012) (“Arguments not raised in
district court will not be considered absent ‘extraordinary circumstances.’”).
Assuming arguendo Cisneros had not forfeited this argument, we would
nevertheless reject it. As we have already held supra, the record indicates that
Franklin complied with the applicable notice requirements under both Texas
law and the terms of the Loan Agreement prior to commencing foreclosure
proceedings on the Royal Oak property. See TEX. PROP. CODE ANN.
51.002(e); Martins, 722 F.3d at 256; Douglas, 992 F.3d at 372.
IV. CONCLUSION
For the foregoing reasons, we AFFIRM the district court’s summary
judgment in favor of Franklin.
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