Angel B. Calegon v. 2009 SWE, LLC

Opinion issued September 28, 2017

In The

Court of Appeals
For The

First District of Texas
————————————
NO. 01-16-00596-CV
———————————
ANGEL B. CALEGON, Appellant
V.
2009 SWE, LLC, Appellee

On Appeal from the 215th District Court
Harris County, Texas
Trial Court Case No. 2015-00329

MEMORANDUM OPINION

Appellant, Angel B. Calegon, challenges the trial court’s rendition of

summary judgment in favor of appellee, 2009 SWE, LLC, in her suit against it for

breach of contract, wrongful foreclosure, and declaratory judgment. In three issues,

Calegon contends that the trial court erred in considering certain summary-judgment
evidence and granting 2009 SWE summary judgment on her wrongful foreclosure

claim.1

We affirm.

Background

In her first amended petition, Calegon alleged that in March 2011, she

purchased a tract of land, described as Lot 4 in Block “R” of the Leeland Park

addition to Houston in Harris County, Texas, also known as “3813 Drew Street,

Houston, Texas 77004” from 2009 SWE for $31,000 pursuant to a promissory note

secured by the property. The deed of trust for the property lists 2009 SWE as the

lender and Calegon as the grantor. In the event of Calegon’s default, the deed

permits 2009 SWE to take certain actions, including:

(1) declare the unpaid principal balance and earned
interest immediately due;

(2) direct the trustee, Scott Wizig, to foreclose the lien, in
which case 2009 SWE would cause notice of the
foreclosure sale to be given pursuant to the Texas Property
Code; and

(3) purchase the property at any foreclosure sale by
offering the highest bid and then have the bid credited on
the note.

In November 2014, 2009 SWE sent Calegon a letter notifying her that it was

accelerating the loan because of Calegon’s failure and refusal to cure default. The

1
Calegon does not challenge the trial court’s rendition of summary judgment against
her on her breach of contract claim and declaratory-judgment action.
2
letter included a notice of trustee or substitute trustee’s sale, detailing that the

property was scheduled for foreclosure on December 2, 2014 at 10:00 a.m., or not

more than three hours after that time. In the letter, 2009 SWE demanded that the

“the full unpaid principal balance, together with all accrued but unpaid interest[,] be

paid no later than 9:00 a.m. (Central Standard Time), on the Foreclosure Date” and

that “[a]ll amounts due . . . be paid by cashier’s check or other certified funds.”

The letter lists the recipient’s address as Calegon’s home address, 10907

Southview Street, Houston, Texas 77047. It lists the address of the subject property

as “3813 Drew Street, Houston, Texas 77004.” And it includes certified mail

tracking numbers for both mailings. The letter is dated November 12, 2014, and the

notice of trustee or substitute trustee’s sale is dated November 11, 2014. However,

the certified mail receipt for the mailing bears a stamp reflecting November 10, 2014

as the postmark date. The record also includes a USPS Product and Tracking

Information Sheet that states that the letter was received at the USPS facility on

November 10, 2014.

Calegon further alleged that 2009 SWE breached the terms of the note and

deed of trust by failing to credit all funds against the loan balance, notify her of the

balance due, and provide adequate notice of the foreclosure sale. She also alleged

wrongful foreclosure, asserting that the property was sold at a grossly inadequate

sale price at the foreclosure sale, and she sought a judgment declaring that the

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December 2, 2014 foreclosure sale was void and “quieting the title to the Property

in Plaintiff.”

In her deposition, Calegon confirmed that 10907 Southview was her correct

address; however, she denied ever receiving the letter notifying her of the

foreclosure sale at that address. Indeed, she received the letter at the Drew Street

address on November 28, 2014, the Friday before the foreclosure sale. Calegon did

admit that when she had spoken to account representative David Cerda at 2009 SWE

eight days before, he had informed her that she needed to pay $3,386.39. According

to Calegon, she took $1,900 to 2009 SWE’s office before noon on December 2,

2014, the day of the foreclosure sale. After 2009 SWE informed her that it could

only accept the entire amount due, which was $4,461.06, Calegon returned at around

11:00 a.m. or 12:00 p.m. with a $1,900 cashier’s check and $2,561 in money orders.

However, 2009 SWE informed her that it was too late for her to make the payment.

2009 SWE moved for summary judgment on Calegon’s claims, arguing that

it was entitled to judgment as a matter of law on Calegon’s claim that it had breached

the terms of the note and deed of trust, because it had provided Calegon the requisite

21-days’ notice of the foreclosure sale as evidenced by the postmark date on the

notice letter and the USPS tracking sheet. 2009 SWE attached to its motion an

affidavit from Jose Martinez, who testified that he had prepared the notice of sale

and forwarded it and the accompanying correspondence to Calegon on November

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10, 2014. 2009 SWE also asserted that the undisputed summary-judgment evidence

established that it had notified Calegon of the balance due to cure the default and

avoid foreclosure, and although it had applied to Calegon’s account a $1,000

payment that had not previously been accounted for in November 2014, the account

remained in default.

In her response, Calegon asserted that 2009 SWE’s evidence of the notice of

sale constitutes hearsay and was not properly authenticated; Martinez did not

specifically state that he had deposited the notice in the U.S. mail, postage paid, and

addressed to Calegon’s last known address; and 2009 SWE’s copy of the USPS

tracking sheet constitutes hearsay. Relying on the dates listed on the cover letter and

the notice of trustee’s sale, she further asserted that 2009 SWE failed to provide

evidence of its delivery and a fact issue existed about when the notice was sent.

The trial court granted 2009 SWE partial summary judgment, dismissing

Calegon’s claims that 2009 SWE had failed to (1) provide Calegon adequate notice

of the foreclosure sale, (2) account for all payments made by Calegon towards the

loan on the property, and (3) provide Calegon the amount to cure default. 2009 SWE

subsequently filed a no-evidence summary-judgment motion on Calegon’s

remaining claim that the property was sold at a grossly inadequate sales price at the

foreclosure sale. It asserted that Calegon had failed to present any evidence of

irregularities with the foreclosure sale that caused or contributed to a grossly

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inadequate sales price, which was necessary for her to sustain such a claim. And the

trial court granted 2009 SWE final summary judgment.

Standard of Review

To prevail on a matter-of-law summary-judgment motion, the movant must

establish that no genuine issue of material fact exists and the trial court should grant

judgment as a matter of law. See TEX. R. CIV. P. 166a(c); KPMG Peat Marwick v.

Harrison Cty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). When a

defendant moves for a matter-of-law summary judgment, it must either (1) disprove

at least one essential element of the plaintiff’s cause of action, or (2) plead and

conclusively establish each essential element of an affirmative defense, thereby

defeating the plaintiff’s cause of action. See Cathey v. Booth, 900 S.W.2d 339, 341

(Tex. 1995); Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995); Lujan

v. Navistar Fin. Corp., 433 S.W.3d 699, 704 (Tex. App.—Houston [1st Dist.] 2014,

no pet.). Once the movant meets its burden, the burden shifts to the non-movant to

raise a genuine issue of material fact precluding summary judgment. See Siegler,

899 S.W.2d at 197; Transcon Ins. Co. v. Briggs Equip. Trust, 321 S.W.3d 685, 691

(Tex. App.—Houston [14th Dist.] 2010, no pet.). The evidence raises a genuine

issue of fact if reasonable and fair-minded fact finders could differ in their

conclusions in light of all of the summary-judgment evidence. Goodyear Tire &

Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007).

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 Admissibility of Summary-Judgment Evidence

In her first issue, Calegon argues that the trial court, in granting 2009 SWE

partial summary judgment, erred in considering as summary-judgment evidence

2009 SWE’s notice of sale and related correspondence because they constitute

hearsay, not subject to any exception.

Hearsay means a statement not made by the declarant while testifying at the

current trial or hearing and offered in evidence to prove the truth of the matter

asserted. TEX. R. EVID. 801(d). Hearsay is not admissible except as provided by the

rules of evidence or other rules prescribed by the supreme court or by law. TEX. R.

EVID. 802. “Out-of-court statements are not hearsay if offered for a purpose other

than to prove the truth of the matter asserted.” McCraw v. Maris, 828 S.W.2d 756,

757 (Tex. 1992). When a party offers a statement simply to show that it was made

rather than to show its truth or falsity, the hearsay rule does not bar its admission.

City of Austin v. Hous. Lighting & Power Co., 844 S.W.2d 773, 791 (Tex. App.—

Dallas 1992, writ denied) (citing Pope v. Darcy, 667 S.W.2d 270, 273 (Tex. App.—

Houston [14th Dist.] 1984, writ ref’d n.r.e.)).

Here, 2009 SWE did not offer the letter or notice of sale to establish the truth

of its contents. Rather, 2009 SWE submitted the notice of foreclosure sale and

related correspondence as evidence that it had sent Calegon the requisite notice.

Because the hearsay rule does not bar the admission of evidence for the purpose of

7
establishing notice, we conclude that the trial court did not err in overruling

Calegon’s objections to these documents. See Crofton v. Amoco Chem. Co., No.

14-98-01412-CV, 1999 WL 1122999, at *3 (Tex. App.—Houston [14th Dist.] Dec.

9, 1999, pet. denied) (not designated for publication) (holding newspaper article not

hearsay because not offered for truth of matter asserted but to establish notice);

Krueger v. Gol, 787 S.W.2d 138, 141 (Tex. App.—Houston [14th Dist.] 1990, writ

denied) (concluding trial court did not err in admitting statements in affidavit not

offered for truth of matter asserted therein but rather to show date plaintiff put on

notice of potential malpractice claim).

We overrule Calegon’s first issue.

Wrongful Foreclosure

In her second issue, Calegon argues that the trial court erred in granting 2009

SWE partial summary judgment on her wrongful foreclosure claim because there

were two defects in the foreclosure sale proceedings: (1) 2009 SWE failed to give

her timely notice of the foreclosure sale and (2) it failed to inform her of the balance

due for her to avoid the foreclosure sale. In her third issue, Calegon argues that the

trial court erred in granting 2009 SWE final summary judgment on her wrongful

foreclosure claim because the subject property was sold for a grossly inadequate

price.

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 The elements of a claim for wrongful foreclosure are (1) a defect in the sale

proceedings, (2) a grossly inadequate sale price, and (3) a causal connection between

the defect and the sale price. Lagou v. U.S. Bank Nat’l Ass’n, No. 01-13-00311,

2013 WL 6415490, at *7 (Tex. App.—Houston [1st Dist.] Dec. 5, 2013, no pet.)

(mem. op.) (citing Sauceda v. GMAC Mortg. Corp., 268 S.W.3d 135, 139 (Tex.

App.—Corpus Christi 2008, no pet.)). A defect in foreclosure proceedings may

occur when the statutory foreclosure procedures are not followed. Hardy v. Wells

Fargo Bank, N.A., No. 01-12-00945-CV, 2014 WL 7473762, at *3 (Tex. App.—

Houston [1st Dist.] Dec. 30, 2014, no pet.) (mem. op.).

To lawfully foreclose on real property, a mortgagee or trustee is required to

comply with the notice requirements set forth in the deed of trust and those

prescribed by law. See Univ. Savings Ass’n v. Springwoods Shopping Ctr., 644

S.W.2d 705, 706 (Tex. 1982); Nat’l Commerce Bank v. Stiehl, 866 S.W.2d 706, 708

(Tex. App.—Houston [1st Dist.] 1993, no writ). Notice of a foreclosure sale must

be given at least twenty-one days before the date of the sale. TEX. PROP. CODE ANN.

§ 51.002(b) (Vernon 2014). Moreover, service of the 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. Id. § 51.002(e). The

affidavit of a person knowledgeable of the facts to the effect that service was

completed constitutes prima facie evidence of service. Id.

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Timely Notice of Foreclosure Sale

Calegon first argues that a fact issue exists about whether 2009 SWE sent her

timely notice of the foreclosure sale because the dates on the letter, notice of sale of

trustee, and postmark conflict. She asserts that Martinez’s affidavit testimony does

not unequivocally state that he deposited the notice in the mail, via certified mail,

addressed to her last known address, twenty-one days before the foreclosure sale.

Rather, Martinez stated that he “forwarded” the letter and notice to her on November

10, 2014. Calegon asserts that this is insufficient to establish compliance with the

requisite notice procedures. She also asserts that 2009 SWE’s evidence of notice is

rebutted by the lack of evidence that she received the notice.

The Texas Supreme Court has noted that a postmark constitutes prima facie

evidence of the date of a mailing. See Lofton v. Allstate Ins. Co., 895 S.W.2d 693,

693 (Tex. 1995) (concluding, in absence of postmark or certificate of mailing,

uncontroverted affidavit of attorney may establish date of mailing compliance). And

the Texas Property Code provides that the affidavit of a person with knowledge of

the facts of the completion of service constitutes prima facie evidence of service.

TEX. PROP. CODE ANN. § 51.002(e).

Here, as evidence that it provided Calegon timely notice of the foreclosure

sale, 2009 SWE submitted both the certified mail receipt, bearing the date of mailing,

and the affidavit of account representative Martinez. In his affidavit, Martinez

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testified that he personally forwarded notice of the foreclosure sale to Calegon on

November 10, 2014, specifically stating:

I personally prepared the Notice of Sale and
accompanying correspondence which were forwarded to
Ms. Calegon on November 10, 2014. I forwarded the
documents to both the address of the property and 10907
Southview, Houston, Texas 77047 which was the address
designated by Ms. Calegon to forward communications
(CM/RRR). These documents were forwarded [by] both
certified mail return receipt requested and regular mail.

Martinez explained that although he incorrectly dated the letter accompanying the

foreclosure sale notice as November 12, 2014, he, in fact, forwarded the letter and

notice to Calegon on November 10, 2014. 2009 SWE also submitted the certified

mail receipt for the notice of sale and accompanying letter, postmarked November

10, 2014. The foreclosure sale was held on December 2, 2014. 2009 SWE was

required to give Calegon notice of the foreclosure sale by November 11, 2014,

twenty-one days before the date of the sale. See TEX. PROP. CODE ANN. § 51.002(b).

Thus, 2009 SWE provided prima facie evidence that it timely mailed notice of the

foreclosure sale to Calegon and that the letter accompanying the notice was

incorrectly dated. And Calegon did not provide evidence to rebut the postmark date

or Martinez’s testimony about the date of mailing.

Calegon complains about Martinez’s use of the term “forwarded” in his

affidavit, asserting that it does not constitute clear, positive, and direct evidence that

he deposited the notice and letter in the mail, postage prepaid to Calegon’s address.

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However, the verb “forward” means “to send forward: transmit” and “to send or ship

onward from an intermediate post or station in transit,” such as with mail. Forward,

MERRIAM-WEBSTER’S DICTIONARY (11th ed. 2003). Thus, the term “forwarded,” as

used in the context of Martinez’s affidavit, expressly communicates that he sent or

transmitted the letter and notice as he further clarifies, by “certified mail return

receipt requested and regular mail” to both of the addresses listed.

Calegon next asserts that she did not receive the letter or notice at her home

address.2 2009 SWE correctly responds that “[t]he dispositive inquiry under section

51.002(e), however, it not receipt of notice, but, rather, service of notice.” Adebo v.

Litton Loan Servicing, L.P., No. 01-07-00708-CV, 2008 WL 2209703, at *4 (Tex.

App.—Houston [1st Dist.] May 29, 2008, no pet.) (mem. op.) (citing TEX. PROP.

CODE ANN. § 51.002(e)). Thus, Calegon’s alleged non-receipt of the notice does not

create a fact issue about whether 2009 SWE satisfied the notice requirements of

Texas Property Code section 51.002.

We conclude that Calegon did not raise a fact issue as to whether 2009 SWE

provided timely notice of the foreclosure sale in compliance with the requirements

of the Texas Property Code and the terms of the deed of trust. See id. at *4

2
2009 SWE attached to its summary-judgment motion Calegon’s deposition
testimony in which she confirmed that the addresses listed on the letter
accompanying the notice of foreclosure sale and certified mail receipt were correct.
Thus, it is undisputed that the letter and notice of foreclosure sale were correctly
addressed to both, Calegon’s home address and the address of the subject property.
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(concluding affidavit from foreclosure director stating notice properly sent by

certified mail on date in question and documents supporting testimony constituted

sufficient evidence of date of mailing and denial of receipt of notice failed to create

fact issue); Neiswender v. SLC Constr. LLC, No. 13-11-00669-CV, 2012 WL

3046010, at *2–3 (Tex. App.—Corpus Christi July 26, 2012, pet. denied) (mem. op.)

(concluding conflicting statement in one affidavit about date of mailing did not

overcome presumption established by postmark date or create fact issue about date

of mailing); cf. Zeller v. Univ. Savings Ass’n, 580 S.W.2d 658, 660–61 (Tex. App.—

Houston [14th Dist.] 1979, no pet.) (concluding fact issue existed about date of

mailing where certified mail receipt did not reflect date of deposit of notice and

affidavit failed to state facts establishing affiant’s knowledge of timely service).

Notice of Amount Due to Cure Default

Calegon next asserts that 2009 SWE failed to provide her with the amount due

to cure default before the foreclosure sale. To its summary-judgment motion, 2009

SWE attached the affidavit of its account representative David Cerda. Cerda averred

that on November 20, 2014, twelve days before the foreclosure sale, he informed

Calegon that she needed to pay 2009 SWE $3,386.39 to bring her account current

and cure the default. On November 28, 2014, he advised Calegon of the updated

amount due, which included the addition of the December payment, if she paid after

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November 30, 2014. Moreover, Calegon herself testified that on November 20,

2014, Cerda told her that she “needed to come up with $3,386.39.”

We conclude that Calegon did not raise a fact issue as to whether 2009 SWE

failed to provide her with the amount due to it to avoid foreclosure.

Grossly Inadequate Sales Price

Finally, Calegon asserts that the property was sold for a grossly inadequate

sale price at the foreclosure sale. However, “inadequacy of consideration alone does

not render a foreclosure sale void if the sale was ‘legally and fairly made.’” Benitez

v. Perales, No. 01-00-00211-CV, 2002 WL 1981189, at *5–6 (Tex. App.—Houston

[1st Dist.] Aug. 29, 2002, no pet.) (not designated for publication) (citing Amer. Sav.

& Loan Ass’n v. Musick, 531 S.W.2d 581, 587 (Tex. 1975)); see also Farkas v.

Aurora Loan Servs., L.L.C., No. 05-15-01225-CV, 2017 WL 2334235, at *5 (Tex.

App.—Dallas May 30, 2017, no pet.) (mem. op.) (“[I]nadequacy of price alone is

not sufficient to support a wrongful-foreclosure claim.”). Here, as noted above,

Calegon failed to establish a fact issue in regard to a defect in the sale proceedings,

another essential element of her wrongful-foreclosure claim. Thus, we need not

address her argument that the selling price was grossly inadequate because her

wrongful-foreclosure claim fails as a matter of law. See TEX. R. APP. P. 47.1; see

also Farkas, 2017 WL 2334235, at *5.

We overrule Calegon’s second and third issues.

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 Conclusion

We affirm the judgment of the trial court.

Terry Jennings
Justice

Panel consists of Chief Justice Radack and Justices Jennings and Keyes.

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