Mitchell v. Bank of New York Mellon Trust Company, N.A. et al
Filing
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MEMORANDUM ADOPTING REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE for 21 Report and Recommendations re: 16 . Defendants Rule 12(b)(6) Motion to Dismiss Plaintiffs Second Amended Complaint [Dkt. #16] is GRANTED in part and DENIED in part. Plaintiffs second request for declaratory relief that defendants violated Article XVI, Section 50(a)(6)(L)(I) ofthe Texas Constitution is dismissed. Signed by Judge Ron Clark on 7/30/12. (cm, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
LAURIE FOSTER MITCHELL,
Plaintiff,
V.
THE BANK OF NEW YORK MELLON
TRUST COMPANY, NATIONAL
ASSOCIATION, ET AL.,
Defendants
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CASE NO. 4:11-CV-716
Judge Clark/Judge Mazzant
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 because
(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 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
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(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 Constitution.
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
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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. Plaintiff’s
second request for declaratory relief 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.
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Ron Clark, United States District Judge
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