Caldwell-Blow v. Wells Fargo Bank, N.A. (In the Matter of Caldwell-Blow)

Case Type:
Consumer
Case Status:
Affirmed
Citation:
16-40997 (5th Circuit, Apr 25,2017) Not Published
Tag(s):
Ruling:
Despite mortgage lender's initial notice of acceleration in 2007, lender's subsequent actions--including a 2012 lawsuit in state court, 2013 proof of claim in bankruptcy, and ultimate foreclosure--were not barred under Texas Civil Practice and Remedies Code, section 16.035(a)'s four-year limitation. Lender's intervening "Rescission Letter" from 2009 effectively abandoned all prior notices of acceleration, thus restarting the four-year limitation clock.
Procedural context:
Debtor/borrower filed bankruptcy in 2012, before the state district court could sign final judgment in favor of Wells Fargo, authorizing the lender to foreclose on the debtor's property. In the bankruptcy case, Wells Fargo filed a secured proof of claim, which prompted the debtor to commence an adversary complaint to object to the claim and underlying lien under a theory that Wells Fargo was barred by the statute of limitations under Texas Civil Practice and Remedies Code 16.035(a).
Facts:
Debtor first obtained a home mortgage loan, serviced by Wells Fargo, in 2006. She defaulted in 2007. Wells Fargo gave its first notice of default and acceleration in 2007, and twice more in May and December 2008. The debtor obtained a TRO in state court to prevent foreclosure. During the course of the state court TRO action, Wells Fargo agreed to extend the TRO in exchange for the debtor making monthly installments through the court registry. Thereafter, in October 2009, Wells Fargo sent the debtor a Notice of Rescission of Acceleration of Loan Maturity, which expressly rescinded all prior notices of acceleration and allowed the debtor to continue making ordinary monthly payments under the note. Over the course of the next 3 years, the debtor negotiated with Wells Fargo for a loan modification but failed to remain current on the existing loan. Thus, in April 2012, Wells Fargo filed a counterclaim in the pending state court action and sought judicial or non-judicial foreclosure. The state court indicated that it would grant Wells Fargo's motion for summary judgment, but the debtor filed bankruptcy before the state court could sign the final order. In bankruptcy--now, 2013--Wells Fargo filed a secured proof of claim, but the debtor objected on the basis that the mortgage lien was barred by the four-year statute of limitations, which allegedly began to run in 2007 when Wells Fargo gave its first notice of acceleration. The bankruptcy court ruled in favor of Wells Fargo, and the district court affirmed.
Judge(s):
Per curiam (Higginbotham, Prado and Haynes)

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