Lourdes Alcala v. Deutsche Bank Natl Trust

Case: 16-20609 Document: 00513941948 Page: 1 Date Filed: 04/06/2017

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fif h Circuit
No. 16-20609 FILED
Summary Calendar April 6, 2017
Lyle W. Cayce
LOURDES C. ALCALA; ROLAND ALCALA,
Clerk

Plaintiffs - Appellants

v.

DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee for Long
Beach Mortgage Loan Trust 2006-5,

Defendant - Appellee

Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:15-CV-3627

Before KING, DENNIS, and COSTA, Circuit Judges.
PER CURIAM:*
In April 2006, Plaintiffs–Appellants Lourdes and Roland Alcala executed
a $216,000 Texas Home Equity Note to Long Beach Mortgage Company in
connection with real property located in Cypress, Texas. The Note was secured
by a Texas Home Equity Security Instrument (the Deed of Trust) granting
Long Beach a lien on the Cypress property. On March 5, 2009, JPMorgan

* 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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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No. 16-20609
Chase Bank, N.A., as successor in interest to Long Beach, assigned the Note
and the Deed of Trust to Defendant–Appellee Deutsche Bank National Trust
Company, as Trustee for Long Beach Mortgage Loan Trust 2006-5. On March
19, 2009, Deutsche filed an application for expedited foreclosure of the Note in
state court, stating that the Alcalas had been in default on the Note since
November 1, 2008. See Tex. R. Civ. P. 736. The application also stated that
the Note had been accelerated (the 2009 acceleration); the Alcalas had been
given notice of the acceleration; and “all unpaid principal, accrued interest and
other charges allowed under the terms of the Note and the [Deed of Trust] are
now due.” The application was dismissed in 2010 for want of prosecution.
On September 11, 2012, Deutsche sent a notice of default to each of the
Alcalas (the 2012 notice of default), 1 giving them a 35-day period to cure the
default by paying $92,008.10 in past due payments on the Note, which was less
than the full balance of the loan. The notice stated that if they failed to cure
the default within that period, their loan would be accelerated; the entire loan
balance, rather than just the past-due amount, would become due; and
foreclosure proceedings would be initiated. Having received no payment, on
January 8, 2013, Deutsche sent a notice of acceleration to the Alcalas. On
March 4, 2015, Deutsche filed another application for foreclosure on the
Cypress property in state court.
The Alcalas filed the instant suit on December 8, 2015, in state court,
seeking, in relevant part, a declaratory judgment that Deutsche’s foreclosure
action was barred by the statute of limitations. Deutsche filed an answer
denying all claims and asserting several affirmative defense, and then removed
the case to federal court on the basis of diversity jurisdiction. After removal,

1 By this time, the Alcalas had divorced. Pursuant to their divorce decree, Lourdes
transferred, via quitclaim deed, her interest in the Cypress property to Roland.
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No. 16-20609
Deutsche filed a counterclaim seeking authorization to foreclose on the Cypress
property and a declaration of its right to do so. Deutsche then moved for
summary judgment, arguing that foreclosure was not barred by any statute of
limitations and that it was entitled to foreclose on the Cypress property. The
district court granted summary judgment for Deutsche on the basis that its
foreclosure action was timely and dismissed the Alcalas’s claims with
prejudice. It later issued a final judgment authorizing Deutsche to foreclose
on the Cypress property. The Alcalas timely appealed.
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.” Fed. R. Civ. P. 56(a). “A genuine
dispute as to a material fact exists ‘if the evidence is such that a reasonable
jury could return a verdict for the nonmoving party.’” Rogers, 755 F.3d at 350
(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).
On appeal, the Alcalas reurge their argument that Deutsche’s
foreclosure is barred by the statute of limitations because it was filed on March
4, 2015, more than four years after the 2009 acceleration. Under Texas law,
an action for foreclosure of a real property lien must be brought within four
years of when the cause of action accrues. Tex. Civ. Prac. & Rem. Code
§ 16.035(a). After the four-year limitation period expires, the real property lien
becomes void and thus may no longer be foreclosed upon. Id. § 16.035(d).
Where, as here, the note secured by the real property lien is payable in
installments, “the four-year limitations period does not begin to run until the
maturity date of the last . . . installment.” Id. § 16.035(e). However, if the note
contains an option to accelerate payment upon default, “the action accrues . . .

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No. 16-20609
when the holder actually exercises its option to accelerate.” Holy Cross Church
of God in Christ v. Wolf, 44 S.W.3d 562, 566 (Tex. 2001).
To effectively accelerate payment of a note, the noteholder must provide
(1) notice of intent to accelerate and (2) notice of acceleration. Id.; see also
Ogden v. Gibraltar Sav. Ass’n, 640 S.W.2d 232, 233 (Tex. 1982). After the
requisite notice of intent is provided, notice of acceleration may take the form
of the filing of an expedited application for foreclosure. See, e.g., Burney v.
Citigroup Glob. Mkts. Realty Corp., 244 S.W.3d 900, 903–04 (Tex. App.—Dallas
2008, no pet.). But a noteholder may unilaterally abandon acceleration after
its exercise “by requesting payment on less than the full amount of the loan.”
Boren v. U.S. Nat’l Bank Ass’n, 807 F.3d 99, 105 (5th Cir. 2015) (quoting
Leonard v. Ocwen Loan Servicing, L.L.C., 616 F. App’x 677, 680 (5th Cir. 2015)
(per curiam)). “Abandonment of acceleration has the effect of restoring . . . the
note’s original maturity date,” and thus resetting maturity of the last
installment as the accrual date for the purpose of the statute of limitations.
Khan v. GBAK Props., Inc., 371 S.W.3d 347, 353 (Tex. App.—Houston [1st
Dist.] 2012, no pet.).
The question on appeal is thus whether Deutsche effectively abandoned
its 2009 acceleration by sending the 2012 notice of default, thereby resetting
the four-year statute of limitations. Recently, in Boren v. United States
National Bank Association, we addressed what was required for a lender to
effectively unilaterally abandon an acceleration. In Boren, the lender, in
pertinent part, sent the borrowers a notice of acceleration without taking
further action and then, a year later, sent a notice of default informing the
borrowers of the total past due amount on their loan and stating that failure
to pay this amount, which was less than the full balance of the loan, would
result in acceleration. 807 F.3d at 103–04, 106. We concluded that such
conduct “unequivocally manifested an intent to abandon the previous
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acceleration and provided the [borrowers] with an opportunity to avoid
foreclosure if they cured their arrearage.” Id. at 106. This abandonment reset
the statute of limitations and the foreclosure claim did not accrue until the
borrowers defaulted by failing to cure. Id.
Similarly, here Deutsche first accelerated the Note in 2009 by filing in
state court an application for expedited foreclosure of the note. See Burney,
244 S.W.3d at 903–04 (permitting a notice of acceleration to take the form of
the filing of an expedited application for foreclosure). On September 11, 2012,
Deutsche sent a notice of default giving the Alcalas 35 days to cure by paying
the past due amount on the Note and stating that failure to do so would result
in the entire loan balance becoming due, the loan being accelerated, and
foreclosure proceedings being initiated. Just like the notice in Boren,
Deutsche’s 2012 notice of default manifested an unequivocal intent to abandon
its 2009 acceleration by indicating that the Alcalas could avoid foreclosure by
paying within a given period the past due amount on the loan, which was less
than the full balance on the loan. Accordingly, the 2012 notice of default
effectively abandoned the 2009 acceleration and reset the statute of limitations
on Deutsche’s foreclosure cause of action.
The Alcalas claim that Deutsche could not unilaterally abandon the 2009
acceleration because they objected to abandonment. See Boren, 807 F.3d at
105 (stating that objection to abandonment by the borrower serves to prevent
the lender from unilaterally abandoning its acceleration). But the only
evidence that the Alcalas offer of their objection to abandonment is the instant
suit, which was not filed until December 2015, long after Deutsche had
abandoned its 2009 acceleration and initiated a new acceleration. 2 They offer

2The Alcalas argue “[a]lternatively” that there is “disputed evidence or insufficient
evidence” to show that they did not object to abandonment, but fail to identify the evidence
in dispute and do not offer any evidence showing they did object. Offering merely
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No. 16-20609
no evidence that they objected to the 2012 notice of default, which served as
notice of Deutsche’s intent to abandon the 2009 acceleration. Nor do they cite
any authority for the proposition that a suit brought years after the
acceleration has been abandoned can constitute objection serving to prevent
abandonment. Indeed, in the past, we have not treated the borrower’s filing of
a suit for declaratory judgment after the lender had already abandoned
acceleration as such. See Boren, 807 F.3d at 103, 106; Leonard, 616 F. App’x
at 678, 680. Accordingly, we reject the Alcalas’s objection argument.
In sum, Deutsche’s cause of action for foreclosure did not accrue until it
sent the January 8, 2013 notice of acceleration and thus the foreclosure suit,
filed March 4, 2015, is not time barred. The district court did not err in
granting Deutsche summary judgment. The judgment of the district court is,
therefore, AFFIRMED.

“conclusional allegations, unsupported assertions, or presentation of only a scintilla of
evidence” such as this cannot thwart summary judgment. McFaul v. Valenzuela, 684 F.3d
564, 571 (5th Cir. 2012).
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