Val-Com Acquisitions Trust et al v. Colonial Savings, FA

Filing 14

MEMORANDUM OPINION AND ORDER granting 12 MOTION to Dismiss... all claims and causes of action asserted by plaintiffs against defendant are hereby dismissed with prejudice. See Order for further specifics. (Ordered by Judge John McBryde on 4/12/2011) (krg)

u.s. DlSTWCT COrRT
NORTHERl" Dl STR leT 0 F TEXAS
r"1

IN THE UNITED STATES DISTRICT OURT
NORTHERN DISTRICT OF TEXAS
FORT WORTH DIVISION

VAL-COM ACQUISITIONS TRUST,
ET AL.,

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\ APR : I 2011

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1.-_ _ _ _ _.-......... - - - - - ,..., .....

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Plaintiffs,

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VS.

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COLONIAL SAVINGS, F.A. ,

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NO. 4:l0-CV-748-A

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Defendant.

MEMORANDUM OPINION
and
ORDER
Before the court for decision is the motion of defendant,
Colonial Savings, F.A., to dismiss the complaint of plaintiffs,
Val-Com Acquisitions Trust ("Val-Com") and Rodney J. Morales
("Morales"), for failure to state a claim upon which relief may
be granted.

Plaintiffs did not respond to the motion.

After

having considered the motion, the complaint, and applicable
authorities, the court has concluded that the motion should be
granted.
1.

Background
This action was initiated on August 2, 2010, by the filing
by plaintiffs of their complaint in the 17th Judicial District
Court of Tarrant County, Texas.

According to the complaint, Morales applied for a loan from
defendant for the purchase or refinancing of a personal residence
located at 5011 Stage West Drive, Arlington, Texas (the
uproperty").

In connection with the loan transaction, he

executed a note in the amount of $73,663.00, payable to
defendant, and a deed of trust on the property naming Colonial
National Mortgage, a division of defendant, as beneficiary.

Both

the note and the deed of trust were executed on March 15, 2004.
On July 30, 2010, Val-Com acquired the property from Morales by
general warranty, subject to the note and deed of trust.

Val-Com

is the authorized agent and/or attorney-in-fact for Morales with
respect to the property.
Plaintiffs allege Uon information and belief, and based on
the performance of a preliminary audit of the loan documents and
closing documents relating to the Note and Deed of Trust," that
defendant violated the provisions of Truth In Lending Act, 15

u.s.c.

§

1601 et seq.

(UTILA"); its implementing regulation,

Regulation Z, 12 C.F.R. Part 226; and the Real Estate Settlement
Procedures Act, 12 U.S.C.

§

2601 et seq.

(URESPA"), by failing to

provide Morales with required disclosure statements and other
disclosures and by failing to comply with other procedures
required by TILA, RESPA, and Regulation Z.
Ex. B at 4-5.
2

Notice of Removal,

Plaintiffs assert causes of action against defendant for the
alleged violations of TILA and RESPA, for fraud ln a real estate
transaction, and for negligent misrepresentation.

They seek

damages, declaratory relief, and a temporary restraining order,
temporary injunction, and permanent injunction preventing
defendant from conducting a non-judicial foreclosure sale of the
property.
II.
Grounds of the Motion
Defendant seeks dismissal of plaintiffs' complaint on the
following grounds:
1.

The complaint fails to meet the standard for pleading

described in Ashcroft v. Iqbal, 556 U.S. ---, 129 S. Ct. 1937
(2009), because it does not allege any facts that would allow the
court to draw the reasonable inference that defendant did
anything wrong;
2.

Plaintiffs' TILA, RESPA, fraud in a real estate

transaction, and negligent misrepresentation claims are barred by
statute of limitations;
3.

Plaintiffs have failed to allege any facts supporting a

violation of either TILA or RESPA;
4.

Plaintiffs are not entitled to declaratory or

injunctive relief because they have no underlying claim;
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5.

The provision of the Texas Business & Commerce Code

that provides a cause of action for fraud in a real estate
transaction does not apply to loan transactions; and
6.

Val-Com does not have standing.
III.
Applicable Motion to Dismiss Principles

The standards for deciding a motion to dismiss for failure
to state a claim are well-settled.

Dismissal is appropriate when

the plaintiff has failed to allege "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), and fails to raise a right to

relief "above the speculative level," id. at 555.

In determining

whether a plaintiff's complaint states a plausible claim to
relief, the court must accept all well-pleaded factual
allegations as true; however, it need not credit bare legal
conclusions or unwarranted deductions of fact.

Id. at 555.

A statute of limitations defense may be properly asserted in
a motion to dismiss for failure to state a claim.

Nationwide Bi-

Weekly Admin., Inc. v. Belo Corp., 512 F.3d 137, 141 (5th Cir.
2007).

The court should grant a motion to dismiss based on a

limitations defense when it is evident from the face of the
plaintiff's pleadings that the action is barred and that no basis

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for tolling exists.

Jones v. Alcoa,

Inc., 339 F.3d 359, 366 (5th

Cir. 2003).
IV.
Analysis
A.

Plaintiffs' TILA, RESPA, Fraud in a Real Estate Transaction,
and Negligent Misrepresentation Claims Are Barred by
Statutes of Limitations
It is evident from the face of plaintiffs' complaint that

plaintiffs' TILA, RESPA, fraud in a real estate transaction, and
negligent misrepresentation claims are barred by statutes of
limitations and that no basis for tolling exists.

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As a result,

the court is dismissing those claims on that ground.
1.

TILA

A claim for violation of TILA must be brought "within one
year from the date of the occurrence of the violation."
U.S.C. § 1640(e).

A violation "occurs" when the relevant

transaction is consummated.
(11th Cir. 1984).

15

In re Smith, 737 F.2d 1549, 1552

Plaintiffs allege that the documents

evidencing the loan transaction between Morales and defendant
were executed on March 15, 2004.

Plaintiffs did not bring their

lIn the complaint, plaintiffs allege in a conclusory way that they are entitled to tolling of
limitations as to all of their claims because Morales did not discover, and could not have discovered, the
factual basis of the claims until after he deeded the property to Val-Com in July 2010. The court need
not credit such conclusory allegations. Plaintiffs have not alleged any facts showing that they are entitled
to tolling. See Moor v. Travelers Ins. Co., 784 F.2d 632, 633 (5th Cir. 1986).

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action until August 2, 2010.

Therefore, their claims for

violations of TILA are barred by limitations.
2.

RESPA

Plaintiffs' claims that defendant violated RESPA are subject
to a one-year or three-year statute of limitations, depending on
which section of RESPA plaintiffs claim defendant violated.
U.S.C.

§

2614.

12

The limitations period begins to run on the date

of the occurrence of the violation, which the Fifth Circuit has
interpreted to mean the date of closing.

Snow v. First Am. Title

Ins. Co., 332 F.3d 356, 359, 361 (5th Cir. 2003).

Plaintiffs'

complaint fails to specify which section of RESPA defendant
violated; however, plaintiffs' claims, brought more than six
years following the date of closing of the loan transaction, are
barred no matter what limitations period applies.
3.

Fraud in a Real Estate Transaction & Negligent
Misrepresentation

Plaintiffs' state law claims for fraud in a real estate
transaction and negligent misrepresentation are also barred.
Such claims are subject to a four-year and two-year statute of
limitations, respectively,
S.W.3d 615, 617

(Tex. 2007)

Ford v. Exxon Mobil Chern. Co., 235
(per curiam)

(fraud in a real estate

transaction); HECI Exploration Co. v. Neel, 982 S.W.2d 881, 885
(Tex. 1998)

(negligent misrepresentation), and, like all of

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plaintiffs' other claims, accrued on the date of closing of the
loan transaction between Morales and defendant.

Because

plaintiffs did not file this action until more than six years
after the date of closing of the loan transaction, they have lost
the right to pursue claims for fraud and negligent
misrepresentation.
B.

Plaintiffs' Requests for Declaratory and Injunctive Relief
Also Fail
Plaintiffs' complaint seeks declaratory relief under the

Texas Uniform Declaratory Judgments Act, Tex. Civ. Prac. & Rem.
Code Ann.

§

37.002 (West 2008).

The Texas act is procedural and

does not apply in a removed action such as this one.

Utica

Lloyd's of Tex. v. Mitchell, 138 F.3d 208, 210 (5th Cir. 1998).
Whether the Texas act or the Federal Declaratory Judgment Act
applies makes no difference because both require an actual case
or controversy between the parties.

For the same reasons given

by the Fifth Circuit in Val-Com Acquisitions Trust v.
CitiMortqaqe, Inc., No. 10-11010, slip op. at 4 (5th Cir. Apr. 7,
2011), and Val-Com Acquisitions Trust v. Chase Home Finance, LLC,
No. 10-11004, slip op. at 2-3

(5th Cir. Apr. 1, 2011), plaintiffs

have not alleged facts indicating there is an actual case or
controversy between them and defendant.

Accordingly, plaintiffs'

request for declaratory relief should be dismissed.

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To obtain injunctive relief plaintiffs must allege and prove
facts showing a substantial likelihood that they will prevail on
the merits of their claims.
Inc., 81 F.3d 597,

DSC Cornrnc'ns Corp. v. DGI Techs.,

600 (5th Cir. 1996).

For the reasons stated

in section IV.A. of this memorandum opinion, plaintiffs have not
alleged any such facts.

Their request for injunctive relief is

dismissed.

*

*

*

*

Although the court is not addressing the other grounds for
dismissal urged by defendant in the motion, a preliminary review
indicates that defendant would be entitled to dismissal of the
action on those grounds as well.
V.
Order
For the reasons given above,
The court ORDERS that defendant's motion to dismiss be, and
1S

hereby, granted, and that all claims and causes of action

asserted by plaintiffs against defendant be, and are hereby,
dismissed with prejudice.
SIGNED April

1L--,

2011.

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