WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity but as Trustee of ARLP Securitization Trust, Series 2014-2, Plaintiff - Appellee
ANGEL ROB; KCEVIN ROB, Defendants - Appellants
from the United States District Court for the Western
District of Texas
SMITH, BARKSDALE, and HIGGINSON, Circuit Judges.
STEPHEN A. HIGGINSON, CIRCUIT JUDGE
and Angel Rob defaulted on a home equity loan. The Robs'
lender, Wilmington Trust, sued for a judgment permitting
foreclosure. The district court granted summary judgment in
Wilmington Trust's favor. The Robs appeal, arguing that
Wilmington Trust is not entitled to foreclosure because the
company failed to prove that it provided adequate notice of
intent to accelerate. Agreeing, we reverse the summary
judgment and render a judgment of dismissal.
26, 2007, appellant Kcevin Rob executed a note in the
principal amount of $113, 600. On the same day, Kcevin and
his wife Angel executed a Texas Home Equity Security
Instrument, which secured payment of the note with a lien on
the Robs' home in Austin, Texas. In 2014, following a
series of assignments, Wilmington Trust, as trustee for ARLP
Securitization Trust, Series 2014-2, came into possession of
the Robs' loan.
time Wilmington Trust acquired it, the Robs' loan had a
tumultuous history. The Robs stopped making payments on the
loan in March 2011. On April 15, 2011, one of Wilmington
Trust's predecessors mailed Kcevin a notice of default
and intent to accelerate. On June 22, 2011, Kcevin was sent a
notice of acceleration. On March 6, 2012, the predecessor
sent a second notice of default and intent to accelerate,
followed by a second notice of acceleration on May 22, 2013.
On November 3, 2014, Wilmington Trust, having taken
assignment of the loan, sent the Robs a "NOTICE OF
RESCISSION OF ACCELERATION." That document stated that
the lender "hereby rescinds Acceleration of the debt and
maturity of the Note" and that the "Note and
Security Instrument are now in effect in accordance with
their original terms and conditions, as though no
acceleration took place."
25, 2015, Wilmington Trust sued the Robs in the Western
District of Texas seeking a judgment for foreclosure or,
alternatively, a judgment of equitable subrogation. In August
2015, Wilmington Trust filed an Amended Complaint, which
alleged that the total debt owed on the note was $159,
949.07. The Amended Complaint also stated that Wilmington
Trust "accelerates the maturity of the debt and provides
notice of this acceleration through the service of this
August 26, 2016, Wilmington Trust moved for summary judgment.
The district court granted Wilmington Trust's motion, and
entered judgment permitting Wilmington Trust to foreclose on
the Robs' home. This appeal followed.
review a grant of summary judgment de novo, applying the same
standard as the district court. Auguster v. Vermilion
Parish Sch. Bd., 249 F.3d 400, 402 (5th Cir. 2001).
"Where, as here, the proper resolution of the case turns
on the interpretation of Texas law, we are bound to apply
Texas law as interpreted by the state's highest
court." Boren v. U.S. Nat. Bank Ass'n, 807
F.3d 99, 104-05 (5th Cir. 2015) (quoting Am. Int'l
Specialty Lines Ins. Co. v. Rentech Steel LLC, 620 F.3d
558, 564 (5th Cir. 2010)). On issues the Texas Supreme Court
has not yet decided, "we must make an 'Erie
guess' as to how the Court would resolve [the]
issue." Id. (quoting Am. Int'l
Specialty Lines Ins. Co., 620 F.3d at 564).
a holder has accelerated a note is a fact question."
Holy Cross Church of God in Christ v. Wolf, 44
S.W.3d 562, 568 (Tex. 2001). Wilmington Trust's lien
includes an optional acceleration clause, under which the
"Lender at its option may require immediate payment in
full of all sums secured by this Security Instrument . . .
." In its First Amended Complaint, Wilmington Trust
alleges that it has accelerated the Robs' debt, that the
Robs are in default of the full $159, 949.07 owed under the
note, and that Wilmington Trust should therefore be permitted
courts disfavor acceleration because it imposes a severe
burden on the mortgagor." Schuhardt Consulting
Profit Sharing Plan v. Double Knobs Mountain Ranch,
Inc., 468 S.W.3d 557, 569 (Tex. App.-San Antonio 2014,
pet. denied); see also Mastin v. Mastin, 70 S.W.3d
148, 154 (Tex. App.-San Antonio 2001, no pet.)
("Acceleration is a harsh remedy with draconian
consequences for the debtor and Texas courts look with
disfavor upon the exercise of this power because great
inequity may result."). Further, a lender may lose the
right to accelerate if its conduct is "inconsistent or
inequitable." William J. Schnabel Revocable Living
Tr. v. Loredo, No. 13-13-00297, 2014 WL ...