Troy Chavez v. Wells Fargo Bank, N.A. , 578 F. App'x 345 ( 2014 )

Case: 13-11325 Document: 00512732796 Page: 1 Date Filed: 08/13/2014
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 13-11325 United States Court of Appeals
Summary Calendar Fifth Circuit
FILED
August 13, 2014
TROY CHAVEZ, Lyle W. Cayce
Clerk
Plaintiff - Appellant
v.
WELLS FARGO BANK, N.A.,
Defendant - Appellee
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 4:11-CV-864
Before KING, JOLLY, and HAYNES, Circuit Judges.
PER CURIAM:*
Plaintiff Troy Chavez (“Chavez”) appeals the dismissal of numerous
claims asserted against Wells Fargo Bank (“Wells Fargo”) relating to the
threatened foreclosure of his home. We AFFIRM.
Background
We recite the background facts here, accepting Chavez’s version as true.
Chavez purchased the property at issue and executed a note payable to
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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America’s Wholesale Lender Corporation. He obtained a refinancing loan from
World Savings Bank (“WSB”), which executed a promissory note and deed of
trust securing the payment of the loan. WSB assigned the promissory note and
deed of trust to Wells Fargo.
After experiencing financial difficulties, Chavez contacted Wells Fargo
to discuss a loan modification. A Wells Fargo representative encouraged him
to apply for the Home Affordable Modification Program (“HAMP”). According
to Chavez, the representative instructed him to cease making payments on the
loan during the loan modification process, assuring him that Wells Fargo
would not foreclose on the property while his application was being reviewed.
Chavez submitted the necessary financial documents to Wells Fargo.
However, he later received multiple letters from Wells Fargo informing him
that he had not submitted the necessary documents. Each time he contacted
Wells Fargo, Chavez was told that it had all the necessary financial
information, that he should not worry about qualifying, and that Wells Fargo
would not foreclose during the process.
After approximately one year under review for HAMP, Wells Fargo sent
Chavez a letter explaining that he did not qualify because he failed to submit
the requested documents. Chavez contacted Wells Fargo, and he was once
again told that the bank had all the necessary documents and that his
application was under review. Once again, Chavez received a letter instructing
him to submit additional forms, which he completed and faxed to Wells Fargo.
Less than a month later, Chavez received a letter from Wells Fargo
informing him that he did not qualify for HAMP because his loan did not meet
the “imminent default criteria.” The letter instructed Chavez to contact Wells
Fargo to discuss why he failed to qualify and discuss alternative loss-
mitigation options. When Chavez called Wells Fargo, he was told that he could
either pay $80,000 or apply for another loan modification. When he attempted
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to apply for a loan modification, Chavez learned that Wells Fargo had
scheduled a foreclosure sale on his home.
Chavez once again spoke to a Wells Fargo representative who assured
him that the foreclosure would be cancelled since Chavez was still in the
modification process. Chavez alleges that every time he contacted Wells Fargo
to check the status of his application, he was told not to make payments on the
loan. Wells Fargo subsequently scheduled a foreclosure sale and added
multiple charges and late fees to Chavez’s account. As of the filing of this suit,
though, Wells Fargo had not foreclosed on Chavez’s house.
Chavez filed this suit in Texas state court seeking a temporary
restraining order. Wells Fargo removed the case to federal court. In his second
amended complaint, Chavez alleged breach of contract, anticipatory breach of
contract, unreasonable collection efforts, violations of the Texas Debt
Collection Act, and negligent misrepresentation. The district court granted
Wells Fargo’s motion to dismiss for failure to state a claim on all claims.
Chavez appeals only the dismissal of his claims for breach of contract, violation
of the Texas Debt Collection Act, and negligent misrepresentation. 1
Discussion
“We review de novo the district court’s grant of a motion to dismiss for
failure to state a claim under Rule 12(b)(6).” Leal v. McHugh, 731 F.3d 405,
410 (5th Cir. 2013). We construe the facts in the light most favorable to the
nonmoving party. Id. Dismissal is appropriate only if the complaint fails to
plead “enough facts to state a claim of relief that is plausible on its face.” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
1 Chavez waives his claims of anticipatory breach of contract and unreasonable
collection efforts, as well as his arguments that declaratory relief and an accounting are
viable causes of action here, because he did not raise them in his initial brief on appeal. Cinel
v. Connick, 15 F.3d 1338, 1345 (5th Cir. 1994).
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Chavez alleges that the district court erred in dismissing his claim for
breach of contract. On appeal, he offers a new theory to support this claim.
Chavez argues that Wells Fargo breached the deed of trust by failing to give
proper notice as required by the “specific notice requirements in the deed of
trust.” However, Chavez’s second amended complaint based the breach of
contract claim on a theory that Wells Fargo waived its right to foreclose. 2 As
a general rule, we will not consider a new theory or issue that was “not properly
before the district court.” Dunbar v. Seger-Thomschitz, 615 F.3d 574, 576 (5th
Cir. 2010); see also City of Waco, Tex. v. Bridges, 710 F.2d 220, 227 (5th Cir.
1983). Because Chavez did not make this argument to the district court as a
basis for his breach of contract claim against Wells Fargo, we will not consider
it now. 3
Chavez next alleges that the district court erred in dismissing his claims
that Wells Fargo violated sections 392.304(a)(8), 392.304(a)(19), and
392.301(a)(8) of the Texas Finance Code. Section 392.304(a)(8) prohibits the
use of “fraudulent, deceptive, or misleading representation” by a debt collector,
including “misrepresenting the character, extent, or amount of a consumer
debt.” Section 392.304(a)(19) prohibits the use of “any other false
representation or deceptive means to collect a debt or obtain information
concerning a consumer.” Chavez alleges that Wells Fargo violated these
Since Chavez has failed to brief the issue of waiver on appeal, we consider the
2
question waived. See Cinel, 15 F.3d at 1345. Even if we considered it, the deed of trust
contained a non-waiver provision. Further, as of the date of briefing – more than two years
after the foreclosure notice – Wells Fargo had not yet foreclosed. Chavez’s second amended
complaint filed in January of 2013 continued to reference the December 2011 foreclosure
notice as the imminent harm despite the fact that the foreclosure did not occur as noticed (or
thereafter).
3Even if we considered this argument, it is worth noting that Chavez’s second
amended complaint included an admission that he received notice of Wells Fargo’s intention
to foreclose.
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provisions by misleading him to believe that he qualified for and would be
approved for a loan modification, despite knowing that he was not eligible for
a loan modification. We do not condone Wells Fargo’s conduct as alleged, but
terrible customer service is not automatically the equivalent of “deceptive
means.” We have previously held that statements regarding loan
modifications do not concern the “character, extent, or amount of a consumer
debt” under section 392.304(a)(8). Miller v. BAC Home Loans Servicing, L.P.,
726 F.3d 717, 723 (5th Cir. 2013). Therefore, the district court properly
dismissed this claim.
To maintain a claim under section 392.304(a)(19), Chavez would need to
allege that Wells Fargo made an “affirmative statement” that was false or
misleading. Verdin v. Fed. Nat’l Mortg. Ass’n, 540 F. App’x 253, 257 (5th Cir.
2013) (citation and internal quotation marks omitted) (unpublished).
However, Chavez does not allege that Wells Fargo ever affirmatively
represented that he qualified for the modification program. Here, even
assuming that Wells Fargo told Chavez “not to worry” about whether he
qualified, this is not an affirmative statement. See id. Therefore, the district
court did not err in dismissing Chavez’s claim that Wells Fargo violated section
392.304(a)(19) of the Texas Finance Code.
Chavez argues that Wells Fargo was prohibited from asserting its right
to accelerate and foreclose on his property under the deed of trust and the
Texas Property Code and that its threats to do so violated section 392.301(a)(8)
of the Texas Finance Code, which prohibits the “use of threats, coercion, or
attempts to coerce” by a debt collector that threatens to “take an action
prohibited by law.” This is a new theory on appeal. In Chavez’s second
amended complaint, he argued that Wells Fargo’s efforts to foreclose were
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prohibited because they did not own or hold the note. 4 We therefore decline to
consider this argument on appeal. See Dunbar, 615 F.3d at 576.
Finally, Chavez alleges that the district court erred in dismissing his
claim for negligent misrepresentation. In Texas, the elements necessary to
establish this claim include, inter alia, that the defendant supplies “false
information” for the guidance of others in their business. Fed. Land Bank
Ass’n of Tyler v. Sloane, 825 S.W.2d 439, 442 (Tex. 1991). In general, “promises
of future action are not actionable as a negligent-misrepresentation tort.” De
Franceschi v. BAC Home Loans Servicing, L.P., 477 F. App’x 200, 205 (5th Cir.
2012) (unpublished); see also Scherer v. Angell, 253 S.W.3d 777, 781 (Tex. App.-
Amarillo 2007, no pet.). In his second amended complaint, Chavez argues that
Wells Fargo made negligent misrepresentations that it would not foreclose on
Chavez during the loan modification process and that he should not make
payments during the process. However, “representations regarding future
loan modifications and foreclosure constitute promises of future action rather
than representations of existing fact.” Thomas v. EMC Mortg. Corp., 499 F.
App’x 337, 342 (5th Cir. 2012) (unpublished) (citation and internal quotation
marks omitted). Furthermore, Chavez has not alleged that the statement that
he should not make payments during the loan modification process was false.
Therefore, the district court properly dismissed Chavez’s claim for negligent
misrepresentation.
AFFIRMED.
4 Since Chavez has failed to brief the issue of whether Wells Fargo’s breach stems
from not owning or holding the note, we consider the question waived. See Cinel, 15 F.3d at
1345. Regardless, Chavez’s claim would fail because ownership of the note is not necessary
in Texas in order for foreclosure to occur under the deed of trust. Martins v. BAC Home Loans
Servicing, L.P., 722 F.3d 249, 255 (5th Cir. 2013).
6