January 10, 2013
The federal Court of Appeals in Texas affirmed a district court’s dismissal of the plaintiff’s claims in Wigginton v. Bank of New York Mellon, et al., No. 12-10136, (5th Cir. 2012).
Two weeks after two default notices were sent to the plaintiff, a letter reporting a rate adjustment was sent to the plaintiff. The plaintiff argued that the defendant could not foreclose after the change of rate notice was sent because the notice implied the continuation of the note. Specifically, the plaintiff argued that the change of rate notice was effectively a waiver of the default notices because the notice implied that the loan was still on a monthly payment schedule.
The district court stated that the elements of waiver are (1) an existing right, benefit, or advantage; (2) knowledge, actual or constructive, of its existence; and (3) an actual intent to relinquish that right (which can be inferred from conduct). Furthermore, the court stated that waiver is largely a matter of intent, which can be shown by actual renunciation or inference. However, proving a waiver through inference would require a showing that the opposite party has “unequivocally manifested its intent to no longer assert its claim.”
In this case, the district court found that there was no express waiver of the default in the rate of change notice. In addition, although the plaintiff argued that the rate notice indicates that the plaintiff’s loan was still on a monthly payment schedule, she failed to allege facts that would reasonably infer that the defendants unequivocally manifested intent to waive. The court found the claim to be conclusory without supporting evidence. As a result, the district court dismissed the claim because of the pleading deficiency.
The Court of Appeals also disagreed with the plaintiff’s theory of waiver and estoppel and affirmed the district court’s finding.
The Northern District Court case may be found here.