STAFFORD v. WILMINGTON TRUST NATIONAL ASSOCIATION AS TRUSTEE FOR MFRA TRUST 2014 SERVICING (2021)

United States Court of Appeals, Fifth Circuit.2021-08-30No. No. 20-11075

Summary · law.co

Holding. The court affirmed the district court's grant of summary judgment for the defendants, rejecting both the Staffords' challenge to the default notice timing and their claim that the acceleration notice was sent to the wrong address.

Paul and Telea Stafford defaulted on their mortgage and sued their lender to prevent foreclosure, claiming two breaches: that a notice of default bore an incorrect default date, and that a notice of acceleration was sent to the wrong address. The district court granted summary judgment for the lender. On appeal, the Staffords' first argument was deemed waived because they had not clearly raised it in the lower court. On the merits, the court found the argument failed anyway because although the lender sent notice in January 2015, the Staffords had originally defaulted in December 2014, made partial payments that reset the contractual due date to April 2015, and never challenged the lender's right to apply those partial payments to the loan rather than cure the December default.

Regarding the second claim, the Staffords contended the lender should have sent the October 2018 acceleration notice to Paul Stafford's current address rather than the mortgaged property where he had not lived since 2013, even though the lender had previously corresponded with him at his new address. The court held that Texas law required service at the borrower's "last known address," which is statutorily defined for residential mortgages as the debtor's residence address unless the debtor provides written notice of a change of address to the servicer. Because no written change of address was provided, the lender's knowledge of the new address had no legal significance.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether a notice of default is ineffective when sent before the accelerated loan's contractual due date
Whether a lender must send mortgage notices to a borrower's current address or to the statutory 'last known address'
Effect of a lender's actual knowledge of a borrower's new address absent written notice of change of address

Procedural posture

The Staffords appealed the district court's grant of summary judgment in favor of the lender and loan servicer.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

After defaulting on their mortgage payments, Paul and Telea Stafford sued their lender in an attempt to stave off a foreclosure. They contend that the lender breached the loan agreement by (1) sending a notice of default that did not correspond to the date of default and (2) failing to send the notice of acceleration to Paul Staffords correct address. The district court granted summary judgment for the defendants.

We affirm.

The Staffords first challenge the timing of the notice of default and the apparent date of default. Before the district court, they raised this argument ambiguously, if at all. Generally, arguments not raised before the district court are waived. State Indus. Prods. Corp. v. Beta Tech., Inc., 575 F.3d 450, 456 (5th Cir. 2009). In any event, the argument fails. The lender sent the notice of default on January 15, 2015. However, the lender later indicated that the loan entered default in April 2015. The Staffords argue that they could not have received notice in January of a default that did not occur until April. The January notice, they contend, was thus ineffective. Though logical on its face, the Staffords’ argument ignores important context. It is undisputed that the Staffords defaulted on the loan in December 2014. They then made partial payments, which the lender applied to the loan. As a result, the contractual due date for the accelerated loan was April 1, 2015. The Staffords dont contest the lenders authority to apply the partial payments to the loan instead of to cure the December 2014 default. And the Staffords provide no support for their contention that they should have received an additional notice of default after April 2015.

The Staffords next argue that the lender sent the notice of acceleration to Paul Stafford at the wrong address, rendering it ineffective. The lender sent the notice of acceleration to the mortgaged property in October 2018. But Paul Stafford had not resided at that address since 2013. And the lender had knowledge of his new address—it sent the January 2015 notice of default to him there. The Staffords therefore argue that the lender should have sent the October 2018 notice of acceleration to his new address, rather than to the address of the mortgaged property where he had not resided for years. Practically, yes. Legally, no. Texas law required the lender to serve Paul Stafford at his “last known address.” Tex. Prop. Code § 51.002(e). And “for a debt secured by the debtors residence,” the “last known address” is statutorily defined as “the debtors residence address unless the debtor provided the mortgage servicer a written change of address before the date the mortgage servicer mailed a notice required by Section 51.002.” Id. § 51.0001(2)(A). There is no evidence in the record that Paul Stafford provided the lender or loan servicer with a written change of address. That they had his new address is of no legal consequence.

AFFIRMED.

FOOTNOTES

FOOTNOTE

. The district court also granted summary judgment for the lender on the lenders counterclaim. By failing to address the counterclaim until their reply brief, the Staffords have waived any challenge to it. Dixon v. Toyota Motor Credit Corp., 794 F.3d 507, 508 (5th Cir. 2015) (“Arguments raised for the first time in a reply brief are waived.”).

Per Curiam:*

FN* 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.