Hunter v. Navy Federal Credit Union et al

Filing 31

MEMORANDUM OPINION AND ORDER denying 25 Motion to Dismiss for Failure to State a Claim filed by Navy Federal Credit Union; and denying 28 MOTION for Leave to File Supplemental Affidavit in Opposition to Defendant's Motion to Dismiss Second Amended Complaint filed by Henry Lee Hunter. (Ordered by Senior Judge Sidney A Fitzwater on 11/26/2024) (Senior Judge Sidney A Fitzwater)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
HENRY LEE HUNTER,
Plaintiff,
VS.
NAVY FEDERAL CREDIT UNION,
Defendant.

§
§
§
§
§
§
§
§
§

Civil Action No. 3:24-CV-0788-D

MEMORANDUM OPINION
AND ORDER
Pro se plaintiff Henry Lee Hunter (“Hunter”) sues defendant Navy Federal Credit
Union (“NFCU”) for breach of contract. NFCU moves to dismiss under Fed. R. Civ. P.
12(b)(6) for failure to state a claim on which relief can be granted. For the reasons that
follow, the court denies the motion.
I
The relevant background facts of this case are largely set out in two prior
memorandum opinions and orders and need not be repeated at length for purposes of
deciding NFCU’s motion to dismiss.1 After the court granted NFCU’s motion to dismiss
Hunter’s first amended complaint, Hunter, with the court’s permission, filed a second
amended complaint asserting a common-law breach of contract claim against NFCU. The
second amended complaint is Hunter’s operative pleading. NFCU now moves to dismiss
1

Hunter v. Navy Fed. Credit Union, 2024 WL 3094610, at *1-2 (N.D. Tex. June 20,
2024) (Fitzwater, J.); Hunter v. Navy Fed. Credit Union, 2024 WL 4244543, at *1-2 (N.D.
Tex. Sept. 19, 2024) (Fitzwater, J.).

under Rule 12(b)(6) for failure to state a claim on which relief can be granted. The court is
deciding the motion on the briefs, without oral argument.
II
“In deciding a Rule 12(b)(6) motion to dismiss, the court evaluates the sufficiency of
[the plaintiff’s] complaint by ‘accept[ing] all well-pleaded facts as true, viewing them in the
light most favorable to the plaintiff.’” Bramlett v. Med. Protective Co. of Fort Wayne, Ind.,
855 F.Supp.2d 615, 618 (N.D. Tex. 2012) (Fitzwater, C.J.) (second alteration in original)
(internal quotation marks omitted) (quoting In re Katrina Canal Breaches Litig., 495 F.3d
191, 205 (5th Cir. 2007)).2 To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must
plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
“The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than
a sheer possibility that a defendant has acted unlawfully.” Id.; see also Twombly, 550 U.S.
at 555 (“Factual allegations must be enough to raise a right to relief above the speculative
level[.]”). “[W]here the well-pleaded facts do not permit the court to infer more than the
mere possibility of misconduct, the complaint has alleged—but it has not ‘shown’—‘that the
pleader is entitled to relief.’” Iqbal, 556 U.S. at 679 (alteration omitted) (quoting Rule

2

Because the court is evaluating the adequacy of Hunter’s second amended complaint,
his November 20, 2024 motion for leave to file a supplemental affidavit is denied.
-2-

8(a)(2)). “Threadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Id. at 678.
To plead a breach of contract claim under Texas law a plaintiff must plausibly allege:
“(1) the existence of a valid contract; (2) performance or tendered performance by the
plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the
plaintiff as a result of the breach.” Smith Int’l, Inc. v. Egle Grp., LLC, 490 F.3d 380, 387 (5th
Cir. 2007).
III
Although only borderline adequate, Hunter’s allegations, taken as true and liberally
construed, are sufficient to plausibly plead common-law breach of contract under Texas law.
Hunter alleges the existence of several valid contracts. He “provided the initial
consideration necessary to open an account in [his] name . . . by applying for membership
at [NFCU.]” 2d Am. Compl. ¶ 54. His “application for membership was accepted . . .
contractually binding [NFCU] by the Membership Agreement[.]” Id. ¶ 55. NFCU “opened
accounts in [Hunter’s] name . . . and began providing financial services to [him], thereby
agreeing to be bound by the terms and conditions, including the rights and obligations
outlined in the . . . Credit Card and Membership Agreement.” Id. ¶ 57. “The credit card
accounts ending in 9616 and 9123 are covered by the terms found in the . . . Credit Card
Application Disclosure, . . . Credit Card Agreement, . . . Security Interest Specific for Credit
Cards Disclosure, . . . Important Disclosures, NFCU Membership Application and . . .
Membership Agreement.” Id. ¶ 63. And “[b]y accepting the credit card offered by [NFCU,
-3-

Hunter] entered into a legally binding agreement.” Id. ¶ 64.
Hunter further alleges that, although he tendered performance, NFCU breached its
contracts with him. He tendered payment of his account balance, but NFCU refused to
process his payment; and he tendered to NFCU collateral as security for his credit account,
but NFCU failed to apply the proceeds of this collateral to his account balance. And NFCU
breached its contractual duties to: “confirm [Hunter’s] status as the Beneficial Owner, Agent
and Authorized Representatives for all accounts in [his] name[,]” id. ¶ 152; respond to
Hunter’s “valid tender of payment when properly presented[,]” id. ¶ 153; “apply the setoff
against [Hunter’s] credit card accounts[,]” id. ¶ 154; and exercise good faith and fair dealing
in responding to Hunter’s dispute resolution efforts.
Finally, Hunter alleges that he sustained damages as a result of NFCU’s breach. In
particular, he suffered “financial losses, including . . . [l]oss of credit availability, [i]mpact
on [his] business and personal financial standing[, and] [o]ut-of-pocket expenses[.]” Id. ¶¶
218-19.
Although these allegations are only borderline adequate, the court concludes that,
taken as true and liberally construed, they are sufficient to enable the court to draw the
reasonable inference that NFCU breached a contract with Hunter. See, e.g., Hunter v. Navy
Fed. Credit Union, 2024 WL 3094610, at *6 (N.D. Tex. June 20, 2024) (Fitzwater, J.)
(declining to dismiss “borderline” breach of contract claim at motion to dismiss stage); TM
Boyce Feed & Grain, LLC v. nVenia, LLC, 2024 WL 4031501, at *10 (N.D. Tex. Sept. 3,
2024) (Boyle, J.) (same).
-4-

IV
In NFCU’s brief, it again raises the concern that Hunter may be employing generative
artificial intelligence to draft his documents. NFCU complains that Hunter’s second
amended complaint does not contain the notation required by N.D. Tex. Civ. R. 7.2(f)(1)
regarding “Use of Generative Artificial Intelligence,” and it “requests that if [Hunter] is
employing generative A.I., that [he] be required to comply with the Local Rules, be
counseled on the dangers of using generative A.I., and be counseled on this Court’s
requirements of candor to the tribunal.” D. Mot. Dis. (ECF No. 25) at 7 n.1.
At the outset, the court notes that Rule 7.2(f)(1) does not apply to Hunter’s second
amended complaint; it applies to briefs. So Hunter did not violate Rule 7.2(f)(1) when he
failed to disclose the use, if any, of generative artificial intelligence in preparing his second
amended complaint.
That said, the court calls to Hunter’s attention the provisions of Rule 7.2(f) that do
apply to briefs. If he is using generative artificial intelligence to prepare a brief, he must
disclose this fact in the manner that Rule 7.2(f)(1) requires.
The court declines at this time to counsel Hunter on the dangers of using generative
artificial intelligence or on this court’s requirements of candor to the tribunal, without
prejudice to doing so if the circumstances later warrant such counseling or other relief.
*

*

*

For the reasons explained, the court denies NFCU’s October 17, 2024 motion to
dismiss. Hunter’s November 20, 2024 motion for leave to file a supplemental affidavit is
-5-

also denied.
SO ORDERED.
November 26, 2024.

_________________________________
SIDNEY A. FITZWATER
SENIOR JUDGE

-6-