Mitchell v. Bank of New York Mellon Trust Company, N.A. et al
MEMORANDUM ADOPTING REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE - GRANTING IN PART AND DENYING IN PART 16 Motion to Dismiss, filed by GMAC Mortgage, LLC, 21 Report and Recommendations. Signed by Judge Ron Clark on 7/30/2012. (baf, )
**NOT FOR PRINTED PUBLICATION**
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
LAURIE FOSTER MITCHELL,
THE BANK OF NEW YORK MELLON
TRUST COMPANY, NATIONAL
ASSOCIATION, ET AL.,
CIVIL ACTION No. 4-11-CV-716
JUDGE RON CLARK
MEMORANDUM ADOPTING REPORT AND RECOMMENDATION OF THE UNITED
STATES MAGISTRATE JUDGE
Came on for consideration the report of the United States Magistrate Judge in this action,
this matter having been heretofore referred to the United States Magistrate Judge pursuant to 28
U.S.C. § 636. On March 29, 2012, the report of the Magistrate Judge was entered containing
proposed findings of fact and recommendations that Defendants’ Rule 12(b)(6) Motion to
Dismiss Plaintiff’s Second Amended Complaint [Doc. #16] be granted in part and denied in part.
The Magistrate Judge recommended that plaintiff’s declaratory judgment claim under the
Texas Constitution that defendants do not hold a valid lien on plaintiff’s homestead because
defendants violated Section 50(a)(6)(L)(I) of the Texas Constitution should be dismissed
(a) there was no formal loan modification by defendants, and (b) no extension of credit by
defendants allowing partial payments by plaintiff for a period of time.
Plaintiff first objects to a statement the Magistrate Judge made in the portion of the
Report and Recommendation that was favorable to Plaintiff and partially denied Defendants’
12(b)(6) motion. Presumably Plaintiff could have expounded on her objection to the ruling
in her favor to convince the court that the entire case should be dismissed. However, the
objection is not relevant to the issue at hand: was the Magistrate Judge correct in
recommending dismissal of of the part of Plaintiff’s request for a declaratory judgment that
was based on constitutional grounds? That objection is denied.
Plaintiff also objects, asserting that the Magistrate Judge’s recommendation that
plaintiff’s Texas Constitutional claim should be dismissed should not be adopted by the Court
because (a) no formal loan modification is required for a violation of Section 50(a)(6)(L)(I) of
the Texas Constitution, and (b) no extension of credit by defendants allowing partial payments
for a period of time is required for a violation of Section 50(a)(6)(L)(I) of the Texas
Plaintiff's argument that the defendants violated Section 50(a)(6)(L)(I) is premised upon
her allegation that “in 2009 and 2010, GMACM … agreed to accept and in fact accepted
periodic installments from plaintiff of $875, less than monthly, in amounts which were not
substantially equal to the successive periodic installments due under the Texas Home Equity
Note of $1,426.44.”
The Magistrate Judge properly concluded that “Plaintiff fails to allege facts that would
support a plausible violation of Section 50(a)(6)(L)(I).” Plaintiff urges that “[a]ll that is required
for a violation of Section 50(a)(6)(L)(I) is a change in the agreed installment payments which
would not have been permissible when the loan originated.” Plaintiff cites no authority to
support this reading of Section 50(a)(6)(L)(I). A review of section 50(a)(6) illustrates that it only
applies to “extensions of credit.” Because Plaintiff does not allege that the original loan violated
Section 50(a)(6)(L)(I), the only possible “extension of credit” upon which her Section
50(a)(6)(L)(I) claim could stand would be a formal permanent loan modification. Plaintiff
alleges no facts showing that her loan was actually modified, and the Magistrate Judge properly
recommended dismissal of her claim.
Plaintiff also objects to the Magistrate Judge’s reliance upon Pennington v. HSBC Bank
USA,N.A., No. A–10–CA–785 LY, 2011 WL 6739609 (W.D. Tex. Dec. 22, 2011). The
Magistrate Judge relied upon the text of the Texas Constitution and found that Pennington was
persuasive authority. The Court finds no error.
Having received the report of the United States Magistrate Judge, and considering the
objections thereto filed by Plaintiff [Doc. #24], as well as defendants' response to Plaintiff's
objections [Doc. #26], this Court is of the opinion that the findings and conclusions of the
Magistrate Judge are correct and adopts the Magistrate Judge’s report as the findings and
conclusions of the Court.
It is, therefore, ORDERED that Defendants’ Rule 12(b)(6) Motion to Dismiss Plaintiff’s
Second Amended Complaint [Dkt. #16] is GRANTED in part and DENIED in part. The second
part of Plaintiff's request for declaratory relief, seeking a declaration that defendants violated
Article XVI, Section 50(a)(6)(L) (I) of the Texas Constitution is dismissed.
So ORDERED and SIGNED this 30 day of July, 2012.
Ron Clark, United States District Judge
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