A New Development on the Robo-Litigation Front: From Judicial Notice to Judicial Awareness of Facts Missing From the Record: A Sua Sponte Solution to Sloppy Paperwork Submitted by Creditors Suing on Consumer Debt

Abstract

In Wells Fargo Bank, N.A. v. Germany, a couple of Texas attorneys last year caught the beleaguered bank and its Texas collection law firm off guard by pursuing an appeal from a judgment it had just procured against one of the thousands of customers it takes to court each year.

Consistent with its mass-litigation modus operandi, the summary judgment had been obtained with minimal effort and skimpy documentation: A boilerplate cardmember agreement and two billing statements; — three exhibits that the Bank’s affidavit-signer had not looked at carefully, if at all.

With benefit of counsel, the recently-adjudicated debtor raised three issues concerning Wells Fargo’s summary judgment proof on appeal: (1) The Bank’s affiant identified the account as a “CORE PLATINUM” account, which did not match the attached boilerplate cardmember agreement; (2) the affiant asserted that the account balance had been accelerated, referring to the last billing statement, which reflected that it had NOT been accelerated; and (3) the only two account statements that were attached to the Bank’s affidavit had non-matching account numbers printed on them.

Having examined each of the three discrepancies raised as grounds for reversal, the Court then declared them to be nonexistent. Rather than finding the incongruities legally “immaterial” or “trivial” as the Bank had urged in its appellee’s brief, the Court summed up its de novo review by concluding without qualification that “Wells Fargo produced uncontroverted evidence, free from any contradictions or inconsistencies” and affirmed. See Germany v. Wells Fargo Bank, N.A. (Tex.App. – Houston [14th Dist.] Feb. 7, 2019, pet. filed).

How did the appellate Court make the discrepancies disappear on appeal?

In a fashion that should raises eyebrows: The Court extemporized its own theory of the case and tapped legal authority for facts recited in them, rather than citing those cases for legal propositions, as has been the normal practice more than any practicing Texas attorney’s lifetime.

Formal "FINDINGS OF FACTS" are required in lieu of jury answers in appeals following bench trials. They have no place in the summary judgment context and none were requested or filed in Germany v. Wells Fargo, a summary judgment case.

The appellate court nevertheless saw fit to import “Findings of Facts” from another Wells Fargo collection case to support the proposition that Wells Fargo has a Platinum line of credit cards, a case in which — incidentally — the defendant was found not to be liable.

It went on to cite a criminal case from a federal district court in Pennsylvania for the proposition that creditors sometimes change account numbers for good reason. Far-fetched; not just metaphorically. To be sure, it is not implausible that a new account number might be assigned to an existing account, but such case-specific facts would have to come from the Bank’s summary judgment affidavit or other competent evidence. That was not true here.

Having law clerks scour Westlaw for suitable facts to supplement a creditor’s defective summary judgment submission on appeal — and reconcile discrepancies — adds an entirely new angle to judicial notice, not to mention judicial activism. It goes far beyond what Judge Posner did in Rowe v. Gibson, 798 F.3d 622 (7th Cir. 2015), an opinion in a pro se prisoner appeal that stimulated considerable debate about the proper scope of judicial notice.

Here, the Houston appeals court didn’t seek to ameliorate access-to-justice problems encountered by lawyer-less litigants, however. Instead, the Court went out of its way to help a major bank avoid the consequences of its business practice of seeking judgments against pro se debt suit defendants with minimal documentation and poor quality control in affidavit production, knowing full well based on thousands or prior collection cases that their litigation practices will rarely be challenged.

Practicing Texas attorneys willing and able to represent consumers are severely constrained in their ability to exercise their First Amendment rights when it comes to critiquing sub-par judicial work product, not to mention labeling it junk jurisprudence, even when the label would perfectly suit the subject matter: JUNK DEBT. Doing so has consequence, and they are typically not salubrious for the pocket book.

This heavily-footnoted engagement with the Fourteenth Court of Appeal's resolution of Wells Fargo v. Germany is meant to fill the void left by the practicing bar’s silence; - silence that is understandably motivated by the imperative of professional self-preservation in an environment where appellate judges cannot be trusted to follow established substantive, procedural, and evidentiary law, but are known to wield the power to mete out adverse decisions to punish appellate practitioners who dare to “impugn the integrity of the court” however fictional.

Keywords: Consumer Debt Collection, Robosigning, Judicial Behavior, Judicial Ethics, Litigation, Texas Law

JEL Classification: K41, K35, K12, K10