Turner et al v. Green Tree Servicing

Filing 17

MEMORANDUM ORDER regarding 8 MOTION to Dismiss filed by the Defendant, Ditech Financial L L C. IT IS ORDERED all claims relating to a contract to divide an estate are DISMISSED WITH PREJUDICE; all claims seeking only to enjoin the foreclosure and sale of the Plaintiffs' former property at 163 Bayou Loop, Saline, LA, are DISMISSED WITH PREJUDICE; all claims seeking damages for the Defendant's alleged breach of the terms of the promissory note and mortgage on the aforementioned proper ty, failure to service that loan, and harassing phone calls are DISMISSED WITHOUT PREJUDICE; and IT IS FURTHER ORDERED Plaintiffs are granted leave to amend their complaint by 10/10/2016. Signed by Judge Elizabeth E Foote on 8/26/2016. (crt,Putch, A)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
SHREVEPORT DIVISION
DENNIS TURNER AND BLANCHE
TURNER

CIVIL ACTION NO. 15-2508

VERSUS

JUDGE ELIZABETH E. FOOTE

DITECH FINANCIAL, LLC, ET AL

MAG. JUDGE MARK HORNSBY

MEMORANDUM ORDER

Before the Court is a Motion To Dismiss, filed by the Defendant, Ditech Financial,
LLC (“Ditech”). [Record Document 8]. In its motion and accompanying memoranda,
Ditech seeks dismissal of all of the Plaintiffs’ claims pursuant Federal Rule of Civil
Procedure 12(b)(6). For the reasons announced below, the Court GRANTS Ditech’s
motion.
I.

Factual & Procedural Background
The Plaintiffs, Dennis and Blanche Turner (“the Turners”), filed this suit pro se in

state court, asserting multiple claims for damages and an injunction precluding Ditech from
foreclosing and selling their home in Bienville Parish, Louisiana. Record Document 1-2.
Ditech, who was the assignee to the mortgage on the Turners’ home, had previously
instituted foreclosure proceedings on the home by filing a petition for executory process
in the 2nd Judicial District Court of Louisiana. Record Document 16-1.

After timely

removing the Turners’ suit, Ditech moved to dismiss the Turners’ claims pursuant to Rule
12(b)(6). Record Document 8.
Not long thereafter, the state court issued a writ of seizure and sale pertaining to
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the Turners’ property. Record Document 16-2, p. 3. In response, the Turners in this
action filed what this Court construed as a motion for a temporary restraining order
(“TRO”) of the sheriff’s sale of their home. Record Documents 10 and 11. The Court
denied the TRO, holding that the Anti-Injunction Act, 28 U.S.C. § 2283 (2012), precluded
the Court from issuing an order staying the executory proceeding in which the writ was
issued. Record Document 12. After the Court’s ruling, Ditech purchased the Turners’
home through a sheriff’s sale. Record Document 16-3, p. 2.
II.

Standard
To survive a challenge under Rule 12(b)(6), “a complaint must contain sufficient

factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007)). Courts are required to accept the plaintiff’s “well-pleaded” facts as true
and construe the complaint in a light favorable to that plaintiff. In re Great Lakes Dredge
& Dock Co., 624 F.3d 201, 210 (5th Cir. 2010) (citations omitted). Nonetheless, courts are
not required to accept the veracity of legal conclusions framed as factual allegations.
Iqbal, 556 U.S. at 678 (reasoning that under Rule 8, it is not sufficient to merely recite a
cause of action’s elements with supporting conclusory statements). Overall, determining
when a complaint states a plausible claim is a context-specific task, requiring courts to rely
on judicial experience and common sense to assess when a complaint crosses the line from
conceivable to plausible. Id. at 678-80.
A claim is facially plausible when a plaintiff pleads factual content that permits the
court to reasonably infer a defendant is liable for the alleged misconduct. Iqbal, 556 U.S.

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at 678-79. This plausibility standard is not a probability requirement, “but it asks for more
than a sheer possibility that a defendant has acted unlawfully.” Id. “Where a complaint
pleads facts that are ‘merely consistent with’ a defendant's liability, it ‘stops short of the
line between possibility and plausibility of ‘entitlement to relief.’” Id. (quoting Twombly,
550 U.S. at 557).
III.

Discussion
Ditech argues first and foremost that the Turners’ complaint is impermissibly vague

under Twombly. There is some merit to this contention. Part of the Turners’ complaint
is a typed, form complaint asserting claims based on the breach of a contract to divide the
proceeds of an unknown estate between the Turners and Ditech. Record Document 1-2,
pp. 2-6. Based on this alleged breach of contract, this portion of the complaint also asserts
claims for a breach of an implied covenant of good faith and fair dealing, promissory
estoppel, and intentional infliction of emotional distress. Record Document 1-2, pp. 4-5.
Given the empty blanks in the form complaint, the incongruous and far-fetched fact
pattern, and the lack of specificity, the Turners have failed to plead facts in this part of the
complaint that would permit the Court “to reasonably infer a defendant is liable for the
alleged misconduct.” Iqbal, 556 U.S. at 678-79. Accordingly, pursuant to Rule 12(b)(6),
the Court dismisses all of the Turners’ claims relating to a contract to divide an estate,
including claims for breach of contract, implied breach of contract, breach of an implied
covenant of good faith and fair dealing, promissory estoppel, and intentional infliction of
emotional distress.
The rest of the complaint fairs better under Twombly. In these portions of the

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complaint, the Turners intelligibly allege that (1) Ditech did not properly service the
promissory note secured by the mortgage, (2) the Turners timely and fully paid all monthly
payments due under the note, and (3) Ditech harassed the Turners with phone calls telling
them that it had seized their home. Record Document 1-2, pp. 7-9. Here the Turners
have alleged specific facts concerning Ditech’s conduct that could give rise to a cause of
action. Accordingly, the Court declines to dismiss the claims contained within the second
part of the Turners’ complaint under Twombly.
The Court now turns to the relief that the Turners seek through these foreclosurerelated claims. Part of the relief sought in the complaint is an injunction halting the
foreclosure and sale of their home. Record Document 1-2, p. 9. Ditech argues that any
claim seeking this relief is moot because the sheriff’s sale of their home has already
occurred. As the Fifth Circuit has stated, “it [is] beyond dispute that a request for
injunctive relief generally becomes moot upon the happening of the event sought to be
enjoined.” Harris v. City of Houston, 151 F.3d 186, 189 (5th Cir. 1998). Further, because
moot claims are nonjusticiable cases or controversies under Article II, § 2, of the U.S.
Constitution, the Court lacks subject matter jurisdiction over them. See, e.g., Genesis
Healthcare Corp. v. Symczyk, 133 S. Ct. 1523, 1528 (2013). This Court has already
determined that the Anti-Injunction Act prevented it from enjoining the state executory
proceeding through which Ditech has sought to foreclose and sell the Turners’ home.
Moreover, the Turners’ home was in fact sold at a sheriff’s sale by a deed executed on
March 18, 2016. Consequently, pursuant to Rule 12(b)(1), the Court dismisses as moot
all claims seeking to enjoin the foreclosure and sale of the Turners’ home.

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In addition to injunctive relief, the complaint also seeks monetary damages. But
of the five paragraphs in the complaint variously seeking $200,000 and $500,000 in
damages, all appear tied to the estate-related claims that the Court has dismissed under
Twombly. Three paragraphs explicitly relate to causes of action that the Court has already
dismissed under Twombly. And while the other two damage paragraphs are not explicitly
linked to any particular claims, they are part of the same form complaint that relates
exclusively to estate-related claims. Consequently, it does not appear that the Turners are
seeking damages for their claims surrounding the foreclosure and sale of their home
according to the complaint as presently drafted.

Nevertheless, because “a pro se

complaint, however inartfully pleaded, must be held to less stringent standards than formal
pleadings drafted by lawyers,” Erickson v. Pardus, 551 U.S. 89, 94 (2007), the Court
dismisses the Turners’ foreclosure-related claims without prejudice and with the right for
the Turners to amend their complaint within 45 days of this Memorandum Order.1

Ditech also argues that the Turners’ claims should be dismissed because
Louisiana law does not permit a party to attack the foreclosure and sale of a property
after the sale has already occurred and when the homeowner has not sought a
suspensive appeal or injunction of the executory preceding foreclosing on the property.
Record Document 16, pp. 5-6. This argument is unpersuasive because it overlooks the
exception to the rule on which it relies. As the Louisiana Fifth Circuit Court of Appeal
noted in American Thrift & Finance Plan Inc. v. Richardson, “The general rule is that
defenses and procedural objections to a proceeding by executory process may be
asserted only (1) through an injunction to arrest the seizure and sale, or (2) by a
suspensive appeal from the order directing the issuance of a writ of seizure and sale, or
both.” 07-640, p. 6 (La. App. 5 Cir. 1/22/08), 977 So. 2d 105, 108 (citation omitted).
But Louisiana courts “have recognized an exception to the above general rule[:] a
mortgagor who has failed to enjoin the sale of property by executory process, or who
did not take a suspensive appeal from the order directing the issuance of the writ of
seizure and sale, may institute and maintain a direct action to annul the sale on certain
limited grounds, provided that the property was adjudicated to and remains in the
hands of the foreclosing creditor.” Id. Such limited circumstances include an allegation
1

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IV.

Conclusion
For the reasons assigned above, IT IS ORDERED that the Defendant's motion to

dismiss, Record Document 8, is hereby GRANTED;
IT IS FURTHER ORDERED that all claims by the Plaintiffs against the Defendant
relating to a contract to divide an estate are DISMISSED WITH PREJUDICE;
IT IS FURTHER ORDERED that all claims by the Plaintiffs against the Defendant
seeking only to enjoin the foreclosure and sale of the Plaintiffs’ former property at 163
Bayou Loop, Saline, Louisiana, are DISMISSED WITH PREJUDICE;
IT IS FURTHER ORDERED that all claims by the Plaintiffs against the Defendant
seeking damages for the Defendant’s alleged breach of the terms of the promissory note
and mortgage on the aforementioned property, failure to service that loan, and harassing
phone calls are DISMISSED WITHOUT PREJUDICE; and
IT IS FURTHER ORDERED that the Plaintiffs are granted leave to amend their
complaint by October 10, 2016, in order to specify whether they seek damages for the
foreclosure-related claims identified and dismissed in the previous paragraph. If the
Turners decline to file an amended complaint by October 10, 2016, the Court without

“that there were defects in the proceedings which are substantive in character and
which strike at the foundation of the executory proceeding.” Id. (citation omitted).
The Turners have alleged substantive defects in the foreclosure of their former home
because they allege that Ditech breached the promissory note subject to the mortgage
by foreclosing despite the Turners’ full and prompt payment of their monthly note.
Record Document 1-2, p. 7. And the record indicates that Ditech, having bought the
Turners’ home at sheriff’s sale, is the present owner of that property. Record
Document 16-3, p. 2. Thus, Louisiana law may offer the Turners a cause of action for
their foreclosure-related claims.
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further notice will issue a judgment dismissing all claims in this suit with prejudice and will
direct the clerk of court to close this case.

THUS DONE AND SIGNED in Shreveport, Louisiana, this 26th day of August,

2016.

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