WELLS FARGO BANK 2006 2006 v. LEATH

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Court of Appeals of Texas,Dallas.

WELLS FARGO BANK, N.A., as Trustee for Option One Mortgage Loan Trust 2006–1 Asset–Backed Certificates, Series 2006–1, Appellant v. Lonzie LEATH, Appellee.

No. 05–11–01425–CV.

Decided: March 21, 2014

Before Justices MOSELEY, O'NEILL, and BROWN. Daron Janis, William Scott Hastings, Robert T. Mowrey, Robert L. Negrin, Mary M. Speidel, for Wells Fargo Bank, N.A., as Trustee for Option One Mortgage Loan Trust 2006–1 Asset–Backed Certificates, Series 2006–1. Wendel A. Withrow, for Lonzie Leath.

SUPPLEMENTAL OPINION ON REHEARING

We issue this supplemental opinion to clarify our decision to deny the motion for rehearing.

Appellant Wells Fargo Bank, N.A., as Trustee for Option One Mortgage Loan Trust 2006–1 Asset–Backed Certificates, Series 2006–1 filed a motion for rehearing in which it contends our opinion, issued on January 6, 2014, creates confusion regarding when notice of a violation is sufficient to trigger the right to cure under section 50(a)(6)(Q)(x) of the Texas Constitution. See Tex. Const. art. XVI, § 50(a)(6)(Q)(x). In its motion, Wells Fargo also expresses “concern” that our opinion may lead to “unnecessary confusion and litigation regarding the proper application of the fair market value rules” relating to home equity loans under the Texas Constitution.

Wells Fargo asserts for the first time in its motion that it had the right to rely on the presumption created by article XVI, section 50(h) of the Texas Constitution regarding the fair market value of Leath's property. See Tex. Const. art. XVI, § 50(h) (providing that “lender or assignee for value may conclusively rely on the written acknowledgment as to the fair market value of the homestead property” if two requirements are met). It states that it filed the motion to “call the Court's attention” to section 50(h) as “additional legal authority that should control in the Court's decision.” Wells Fargo acknowledges, however, that section 50(h) “was not cited by the parties in their prior briefing.” Wells Fargo also did not present argument in its prior briefing related to section 50(h)'s two requirements. Yet it claims on rehearing that “the facts are undisputed that the requirement[s] for protection under Section 50(h) were satisfied at closing.”

Generally, we do not base our rulings on arguments raised for the first time on rehearing. See OAIC Commercial Assets, L.L.C. v. Stonegate Vill., L.P., 234 S.W.3d 726, 747 (Tex.App.-Dallas 2007, pet. denied) (op. on reh'g) (“A motion for rehearing does not afford a party an opportunity to raise new issues after the case has been briefed, argued, and decided on other grounds, unless the error is fundamental.”); see also Coastal Liquids Transp., L.P. v. Harris Cnty. Appraisal Dist., 46 S.W.3d 880, 885 (Tex.2001) (issue raised for first time on rehearing is waived). The issue of whether application of section 50(h) of the Texas Constitution to the facts of this case compels a finding that the loan is constitutional is not before us and, therefore, we will not address it. Accordingly, we deny Wells Fargo's motion for rehearing.

OPINION DISSENTING FROM THE DENIAL OF APPELLANT'S MOTION FOR REHEARING EN BANC

I respectfully dissent from the Court's denial of appellant's motion for rehearing en banc.

I disagree with the panel's conclusion that appellee gave appellant adequate notice of appellant's alleged failure to comply with the constitution. The purpose of the notice provision is to give the lender enough detail about the alleged defect so that the lender can take advantage of the 60–day cure period. See Curry v. Bank of Am., N.A., 232 S.W.3d 345, 353 (Tex.App.-Dallas 2007, pet. denied). In this case, appellee notified appellant through a pleading of appellee's contention that the mortgage in question violated the constitution because the loan amount exceeded 80% of the actual fair market value of the property at the time of closing. Appellee gave appellant no other details. The information appellee provided was too conclusory to inform appellant what it needed to do to cure the alleged defect. Thus, appellant could not have cured the alleged defect without additional information—presumably from appellee, who might or might not have cooperated with appellant to resolve the issue. We should not construe the notice provision in such a way that makes the lender's ability to cure within sixty days contingent on the debtor's cooperation.

An analogy may be drawn to the recovery of attorneys' fees under Chapter 38 of the Texas Civil Practice and Remedies Code. To recover attorneys' fees, the claimant must have presented its claim to the opposing party and given the opposing party thirty days to make payment. Tex. Civ. Prac. & Rem.Code Ann. § 38.002 (West 2008). Cases decided under that statute illustrate that the presentment of the claim must be specific enough to inform the opposing party of what it must do to discharge the claim. See W.G. Tufts & Son v. Herider Farms, Inc., 485 S.W.2d 300, 303–04 (Tex.Civ.App.-Tyler 1972, writ ref'd n.r.e.) (no presentment when claimant merely told defendant that claimant was holding defendant responsible for death of claimant's cattle and was looking to defendant to pay for them); see also Sunbeam Envtl. Servs., Inc. v. Tex. Workers' Comp. Ins. Facility, 71 S.W.3d 846, 851 (Tex.App.-Austin 2002, no pet.) (sending of invoices constituted adequate presentment of claim). By the same logic, in this case I would hold that appellee's general pleading regarding the loan-to-value ratio did not suffice as notice to Wells Fargo and did not trigger the running of the sixty-day cure period.

I would grant rehearing en banc. Because the Court does not, I respectfully dissent.

Opinion by Justice BROWN.

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