UPS Next-Day Delivery Satisfies Certified Mail Requirement for Foreclosure Notices Under Contract and Texas Property Code
Read the Court's Opinion (PDF)
Judge Bill Whitehill
In Revere Tactical Opportunities Fund IV v. Lee-Wen, the Business Court of Texas held that a lender's notices of intent to foreclose sent by email and UPS next-day delivery satisfied both deed of trust and Texas Property Code § 51.002(b)(3) requirements for certified mail. The court concluded that contractual provisions permitting notice by commercial delivery service for same-day or next-day delivery deemed such notices proper, and that Texas law permits alternative service methods that do not delay the notice time that certified mail would provide.
Court Staff Summary
A lender’s notices of intent to foreclose sent by email and UPS next-day delivery satisfied deed of trust and Texas Property Code §51.002(b)(3)’s requirements that such notices be sent by certified mail because (1) the contracts provide that all notices required or permitted to be given shall be considered proper if given by delivery to an independent, third-party commercial delivery service for same day or next-day delivery service and (2) Texas law permits alternative service methods that do not delay the notice time that certified mail would provide. Notice to a debtor’s designated agent is notice to the debtor. Because notice was sufficient, partial summary judgment against debtor’s wrongful foreclosure claims, based on debtor supposed failure to give timely notice of its allegations (a condition precedent to suing) is mooted by the court’s prior determination in lender’s favor regarding the sufficiency of its written notice.
Background
Revere Tactical Opportunities Fund IV, LP and Revere Tactical Opportunities REIT, LLC (collectively, Revere) made a loan to Westside Flats Owner LLC secured by two real properties. When Westside defaulted, Revere sent notices of intent to sell the properties at foreclosure sales by email and UPS next-day delivery rather than by certified mail as specified in the deeds of trust and required by Texas Property Code § 51.002(b)(3). Westside and CG Sunset Land, LLC challenged the foreclosure, arguing that Revere's failure to use certified mail rendered the foreclosure wrongful. The parties did not dispute that the debtor received the notices no later than when certified mail would have delivered them.
The Court's Holdings
The court granted Revere's Rule 166(g) motion for determination of legal matters, concluding as a matter of law that Revere's UPS notices sufficed for two reasons. First, the contracts provide that all notices required or permitted to be given shall be considered proper if given by delivery to an independent, third-party commercial delivery service for same day or next-day delivery service. Second, Texas law permits alternative service methods that do not delay the notice time that certified mail would provide.
The court also addressed whether notice to a debtor's designated agent constitutes notice to the debtor. Based on the record, the court concluded as a matter of law that the lender's notice to the debtor's designated notice agent was sufficient.
Finally, Revere sought partial summary judgment against the debtor's wrongful foreclosure claims on the ground that the debtor failed to give timely notice of its allegations—a condition precedent to suing. The court concluded that this motion was mooted by the court's prior determination in Revere's favor regarding the sufficiency of its written notice.