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Verdin v. Federal National Mortgage Association

United States Court of Appeals, Fifth Circuit

August 15, 2013

ADRIAN VERDIN, Plaintiff-Appellant,
v.
FEDERAL NATIONAL MORTGAGE ASSOCIATION; WELLS FARGO BANK, N.A., Defendants-Appellees.

Appeal from the United States District Court for the Eastern District of Texas USDC No. 4:10-CV-590

Before ELROD and HIGGINSON, Circuit Judges, and MARTINEZ, District Judge. [*]

PER CURIAM: [**]

Wells Fargo Bank, N.A. ("Wells Fargo") foreclosed on Adrian Verdin's home and sold it to the Federal National Mortgage Association ("Fannie Mae"). Verdin sued Wells Fargo and Fannie Mae ("Defendants") alleging various state-law causes of action. The district court granted Defendants' Rule 12(b)(6) motion on Verdin's negligent-misrepresentation and gross-negligence claims and granted Defendants' motion for summary judgment on Verdin's remaining claims. We AFFIRM.

I.

Wells Fargo extended Verdin a loan for the purchase of a Plano, Texas residence (the "Property"). The loan was evidenced by a fixed-rate note (the "Note") and secured by a deed of trust (jointly referred to as the "Loan Agreement"). Verdin defaulted on the Note when he did not make the required payments for March and April of 2010. Wells Fargo mailed Verdin notice of his default, but he neither cured his default nor made the May and June payments. Wells Fargo accelerated the Note and scheduled a foreclosure sale on August 3, 2010. In early July, Wells Fargo informed Verdin that he could reinstate the Note by paying $21, 371, the total amount due and owing at that time.

On July 27, exactly one-week prior to the scheduled foreclosure sale, Verdin called Wells Fargo to discuss his options. Verdin alleges that during this conversation, he requested the amount needed to reinstate the Note and explained that he found a potential buyer willing to purchase the Property. According to Verdin, Wells Fargo responded by telling him "not to worry about the foreclosure" and to submit a request for postponement of the foreclosure sale. Wells Fargo received Verdin's request for postponement on July 30. In it, Verdin requested that Wells Fargo "stop the foreclosure procedures so that [he could] pursue the sale of the [Property]." On August 2, Verdin called Wells Fargo to inquire about the status of the foreclosure sale. Wells Fargo told him that the sale had not been postponed.

Approximately forty minutes before the scheduled foreclosure sale on August 3, Verdin called Wells Fargo to ask if the foreclosure sale had been postponed. Wells Fargo informed Verdin that, to postpone the sale, he must produce proof of payoff funds totaling exactly $22, 179.68, the current amount due and owing on the Note. Verdin did not produce the required proof of payoff funds, and Wells Fargo sold the Property to Fannie Mae.

Verdin sued Defendants in Texas state court, and Defendants removed the case to the United States District Court for the Eastern District of Texas. The district court dismissed Verdin's negligent-misrepresentation and gross-negligence[1] claims under Federal Rule of Civil Procedure 12(b)(6). The district court also granted Defendants' motion for summary judgment on Verdin's claims for breach of contract, anticipatory breach of contract, unreasonable collection efforts, violations of the Texas Debt Collection Act ("TDCA"), quiet title, and trespass to try title. Verdin timely filed a notice of appeal.

II.

We review de novo the district court's order granting Defendants' Rule 12(b)(6) motion on Verdin's negligent-misrepresentation claim. Torch Liquidating Trust ex rel. Bridge Assocs. L.L.C. v. Stockstill, 561 F.3d 377, 384 (5th Cir. 2009) (citation omitted). To prove a negligent-misrepresentation claim in Texas, Verdin must establish, inter alia, that Defendants supplied him with "false information" and that he suffered pecuniary loss in reliance on that information. Horizon Shipbuilding, Inc. v. BLyn II Holding, L.L.C., 324 S.W.3d 840, 850 (Tex. App.—Houston [14th Dist.] 2010, no pet.) (citation omitted). Here, Verdin failed to plead facts establishing either element.

Under Texas law, "the misrepresentation at issue must be one of existing fact." BCY Water Supply Corp. v. Residential Invs., Inc., 170 S.W.3d 596, 603 (Tex. App.—Tyler 2005, pet. denied). "A promise to do or refrain from doing an act in the future is not actionable." Id.; see also Scherer v. Angell, 253 S.W.3d 777, 781 (Tex. App.—Amarillo 2007, no pet.). Wells Fargo's only allegedly false representation—that Verdin should submit a request for postponement and "not worry about the foreclosure"—relates to a promise to do something in the future. This representation is not one of existing fact and is not actionable under Texas law.

Even if Defendants supplied Verdin with false information, Texas requires pecuniary loss independent from the loan agreement to support a negligent-misrepresentation claim. D.S.A., Inc. v. Hillsboro Indep. Sch. Dist., 973 S.W.2d 662, 663–64 (Tex. 1998) (citation omitted). Mental anguish does not qualify as pecuniary loss. Fed. Land Bank Ass'n of Tyler v. Sloane, 825 S.W.2d 439, 442–43 (Tex. 1991). Here, Verdin has merely alleged losses relating to the Loan ...


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