Case: 14-51156      Document: 00513701218         Page: 1    Date Filed: 10/03/2016




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                              United States Court of Appeals
                                                                                       Fifth Circuit

                                      No. 14-51156                                   FILED
                                                                               October 3, 2016
                                                                                Lyle W. Cayce
TERESA GAROFOLO,                                                                     Clerk

                                                 Plaintiff - Appellant

v.

OCWEN LOAN SERVICING, L.L.C.,

                                                 Defendant - Appellee


                   Appeal from the United States District Court
                        for the Western District of Texas
                             USDC No. 1:14-CV-745


Before HIGGINBOTHAM, DENNIS, and HAYNES, Circuit Judges.
PER CURIAM:*
       Teresa Garofolo (“Garofolo”) appealed the district court’s dismissal of her
claims against Ocwen Loan Servicing, L.L.C., (“Ocwen”) for violating Article
XVI, § 50(a)(6)(Q)(vii), of the Texas Constitution and for breach of contract to
this court. Because the case raised an important issue of Texas constitutional
law as to which there is no controlling Texas Supreme Court authority, and
the authority from the intermediate state appellate courts provided
insufficient guidance, we certified the relevant questions to the Texas Supreme



       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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                                 No. 14-51156
Court. Garofolo v. Ocwen Loan Servicing, L.L.C., 626 F. App’x 59, 65-66 (5th
Cir. 2015); see TEX. CONST. art. V, § 3-c(a); TEX. R. APP. P. 58.1. The questions
were as follows:
      1. Does a lender or holder violate Article XVI, Section
         50(a)(6)(Q)(vii) of the Texas Constitution, becoming liable for
         forfeiture of principal and interest, when the loan agreement
         incorporates the protections of Section 50(a)(6)(Q)(vii), but the
         lender or holder fails to return the cancelled note and release of
         lien upon full payment of the note and within 60 days after the
         borrower informs the lender or holder of the failure to comply?
      2. If the answer to Question 1 is “no,” then, in the absence of actual
         damages, does a lender or holder become liable for forfeiture of
         principal and interest under a breach of contract theory when
         the loan agreement incorporates the protections of Section
         50(a)(6)(Q)(vii), but the lender or holder, although filing a
         release of lien in the deed records, fails to return the cancelled
         note and release of lien upon full payment of the note and
         within 60 days after the borrower informs the lender or holder
         of the failure to comply?

The Texas Supreme Court answered both questions “no.” Garofolo
v. Ocwen Loan Servicing, L.L.C., No. 15-0437, 2016 Tex. LEXIS 391, at *2 (May
20, 2016). As a result of the answer to question 1, we AFFIRM the district
court’s dismissal of the constitutional claim. With respect to the breach of
contract claim, the Texas Supreme Court concluded that forfeiture was not an
available remedy.
      “In Texas, the elements of a claim for breach of contract are: (1) a valid
contract between the plaintiff and the defendant, (2) performance or tender of
performance by the plaintiff, (3) breach by the defendant, and (4) damage to
the plaintiff as a result of the breach.” Lawyers Title Ins. Corp. v. Doubletree
Partners, L.P., 

, 858 (5th Cir. 2014) (citation and internal
quotation marks omitted). The district court observed, and Garofolo concedes,
that she does not allege any actual damages such that she cannot satisfy one

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                                 No. 14-51156
of the elements of the breach of contract claim. See Intercontinental Grp. P’ship
v. KB Home Lone Star L.P., 

, 655 n.26 (Tex. 2009) (“[M]oney
damages are essential in contract claims seeking money damages (though not
for contract claims seeking something else).”). To the extent that Garofolo
claims to be seeking liquidated damages in the form of total forfeiture, she
failed to allege any of the elements necessary for a valid liquidated damages
claim. Flores v. Millennium Interests, Inc., 

, 431 (Tex. 2005)
(noting that “‘liquidated damages’ ordinarily refers to an acceptable measure
of damages that parties stipulate in advance will be assessed in the event of a
contract breach”); Phillips v. Phillips, 

, 788 (Tex. 1991)
(explaining that whether a party is entitled to liquidated damages is dependent
on whether “(1) . . . the harm caused by the breach is incapable or difficult of
estimation, and (2) . . . the amount of liquidated damages called for is a
reasonable forecast of just compensation”). She did not seek any remedy other
than forfeiture. As such, we AFFIRM the dismissal of the breach of contract
claim.
AFFIRMED.




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