Hill et al v. Wells Fargo Bank, N.A.
Filing
8
MEMORANDUM AND OPINION AND ORDER Court concludes plaintiffs have not alleged any facts that would allow court to draw the reasonable inference that pltfs are entitled to declaratory or injunctive relief or that Wells Fargo is liable to pltfs under an y of the theories of liability alleged in their pleading. As a result, pltfs' pleading fails to state a plausible claim to relief and should be dismissed. Wells Fargo's motion to dismiss is granted. Further orders all claims and causes of action by pltfs against Wells Fargo be dismissed. (Ordered by Judge John McBryde on 11/17/2011) (uls)
U.S. DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
FILED
IN THE UNITED STATES DISTRICT COURTr------------NORTHERN DISTRICT OF TE
FORT WORTH DIVISION
CLERK, U.S. DlSTRICT COURT
CLARENCE HILL, JR. , and
VALERIE FIELDS-HILL,
by ____~~~----__
Deputy
§
§
§
§
Plaintiffs,
§
VS.
NO. 4:11-CV-644-A
§
§
WELLS FARGO BANK, NA,
§
§
Defendant.
§
MEMORANDUM OPINION
and
ORDER
Now pending in the above-captioned action is the motion to
dismiss for failure to state a claim upon which relief may be
granted, filed by defendant, Wells Fargo Bank, NA ("Wells
Fargo"), on September 27, 2011.
Plaintiffs, Clarence Hill, Jr.,
and Valerie Fields-Hill, filed no response to the motion, and the
issues are ripe for consideration.
After having considered such
motion, the pleading by which this action was initiated in state
court, and applicable legal authorities, the court has concluded
that the motion to dismiss should be granted. 1
IThe court has subject matter jurisdiction over plaintiffs' claims against Wells Fargo, NA
("Wells Fargo") by reason of28 U.S.C. §§ 1441 and 1331, because plaintiffs' allegations concerning the
Real Estate Settlement Procedures Act ("RESPA") arise under the laws of the United States. See 12
U.S.C. §§ 2605, et seq. The court has supplemental jurisdiction over all other claims. 28 U.S.C. § 1367.
I.
Background
Plaintiffs initiated this removed action by a pleading filed
in the District Court of Tarrant County, 153rd Judicial District,
on September 6, 2011, against Wells Fargo.
According to
plaintiffs' characterization of their suit, it was "a suit to
enjoin and restrain a foreclosure proceeding scheduled by
Defendant, WELLS FARGO BANK N.A., for Tuesday, September 6, 2011
between 1:00 p.m. -- 4:00 p.m. at the Tarrant County Court House,
Texas."
Pet. at III. 2
In summary, plaintiffs made the following
allegations of fact, some conclusory in nature, in their
pleading:
On February 25, 2000, plaintiffs executed a note to World
Savings in the principal amount of $145,238 for the purchase of
their property in Euless, Texas, secured by a deed of trust
covering the property.
Id. at IV, "
I, 7.
From that date until
June 2009, plaintiffs "performed their payment obligations on a
timely and regular basis per the note to the original mortgage
servicer and subsequently to Wachovia Mortgage and subsequently
Wells Fargo Bank, N.A."
Id."
2.
In October 2008, plaintiffs
2 The court is using Roman numerals in the references to plaintiffs' pleading, which are a part of
the headings in plaintiffs' pleading, because the pleading is not paginated and the paragraphs are not
numbered properly.
2
contacted Wachovia Mortgage ("Wachovia") to request a loan
Id., ~ 4.
modification and received an application.
They
"completed the modification application and returned it to
Id., ~~
Wachovia," but "no response" was received from Wachovia.
4-5.
Plaintiffs instead received correspondence from Wells Fargo
directing them to continue to pay Wachovia.
Id., ~ 5.
"After a
second request on the status of their modification and several
months with no response to this request, Plaintiffs wrote to
[Wells Fargo] requesting that
[Wells Fargo] honor and notify
Plaintiffs of the status of the prior loan modification agreement
in the form of a more detailed 'Qualified written Request'"
pursuant to 12 U.S.C.
2605.
§
Id.,
~
6.
At no point did
plaintiffs ever receive a response from Wachovia, id., ~ 5, or
Wells Fargo, id.,
~
6, stating that their loan modification
application was approved or the qualified written request had
been received, id.,
~
7.
On September 1, 2011, plaintiffs
received notice of the foreclosure sale of their property, five
days before the purported sale.
Id.,
~
8,
Plaintiffs asserted claims against Wells Fargo for breach of
contract, id. at V,
~~
10-13, violations of the Real Estate
Settlement Procedures Act ("RESPA"), id. at IV,
~~ 12,
~~
6-7; id. at V,
14, violations of section 51.002 of the Texas Property
Code, and violations of the Texas Finance Code (referred to as
3
the "Texas Fair Debt Collections Practices Act"), id., "
13-16.
As relief, plaintiffs sought injunctive relief preventing
defendant from foreclosing on plaintiffs' property, and
declaratory rulings that no foreclosure sale of plaintiffs'
property be validated during the pendency of the action and
preventing eviction of plaintiffs from the property.
On September 6, 2011, the state court granted plaintiffs a
temporary restraining order that prevented Wells Fargo from
proceeding with the finalization of the foreclosure of
plaintiffs' property that was scheduled to be conducted on
September 6, 2011.
Wells Fargo removed the action to this court
on September 14, 2011.
In Wells Fargo's motion to dismiss filed
September 27, 2011, it argued, inter alia, that plaintiffs'
pleading failed to state a claim upon which relief can be granted
because plaintiffs merely recited the elements of each cause of
action and asserted legal conclusions, but alleged no facts in
support thereof, and that plaintiffs failed to state a plausible
claim for relief that raises their right to relief above a
speculative level. 3
Mot. at 2.
3Wells Fargo argues in its brief that plaintiffs' state-law claims are preempted by the Home
Owners' Loan Act. The court is not required to analyze that contention in reaching the court's conclusion
that Wells Fargo's motion to dismiss has merit. The court does note that there could be a question as to
whether the state of the pleadings is such that the court could, without impermissibly going outside the
pleadings, base a failure to state a claim ruling on such a preemption contention.
4
II.
Analysis
A.
The Rule 8(a) (2) Pleading Standards
Rule 8(a) (2) of the Federal Rules of Civil Procedure
provides, in a general way, the applicable standard of pleading.
It requires that a complaint contain "a short and plain statement
of the claim showing that the pleader is entitled to relief,"
Fed. R. civ. P. 8(a) (2),
"in order to give the defendant fair
notice of what the claim is and the grounds upon which it rests,"
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)
quotation marks and ellipsis omitted).
(internal
Although a complaint need
not contain detailed factual allegations, the "showing"
contemplated by Rule 8 requires the plaintiff to do more than
simply allege legal conclusions or recite the elements of a cause
of action.
See Twombly, 550 U.S. at 555 & n.3.
Thus, while a
court must accept all of the factual allegations in the complaint
as true, it need not credit bare legal conclusions that are
unsupported by any factual underpinnings.
See Ashcroft v. Iqbal,
556 U.S. 662, 129 S. ct. 1937, 1950 (2009)
("While legal
conclusions can provide the framework of a complaint, they must
be supported by factual allegations.")
Moreover, to survive a motion to dismiss for failure to
state a claim, the facts pleaded must allow the court to infer
5
that the plaintiff's right to relief is plausible.
Ct. at 1950.
Iqbal, 129 S.
To allege a plausible right to relief, the facts
pleaded must suggest liability; allegations that are merely
consistent with unlawful conduct are insufficient.
U.S. at 566-69.
Twombly, 550
"Determining whether a complaint states a
plausible claim for relief . . .
[is] a context-specific task
that requires the reviewing court to draw on its judicial
experience and common sense."
B.
Iqbal, 129 S. Ct. at 1950.
Applying the Standards to the Complaint
Proceeding only on the basis of the information before the
court in plaintiffs' pleading, the court finds that the
allegations fall short of the pleading standards.
Plaintiffs'
complaint fails to meet the standard set forth in Rule 8(a) (2),
as interpreted by the Supreme Court in Twombly and Iqbal.
The
court agrees with defendant that the allegations therein are
nothing more than conclusory assertions that defendant harmed
plaintiffs; the complaint contains inadequate factual allegations
to support the claims or causes of action and is therefore
insufficient to give defendants notice of plaintiffs' claims
against it; and, the court cannot infer from the allegations of
plaintiffs' pleading that plaintiffs have a right to the relief
they seek from Wells Fargo.
6
The court considers plaintiffs' theories of recovery in the
following order: first/ the claims of violations of RESPAi next/
the breach of contract claim; next/ the claim of violations of
the Texas Property Code; and/ finally/ the claim of violations of
the Texas Finance Code.
1.
The RESPA Claims
Plaintiffs alleged that Wells Fargo violated 12 U.S.C.
§
2605(e) because plaintiffs "received no information as required
by the RESPA statute" after they submitted a request that Wells
Fargo "honor and notify Plaintiffs of the status of the prior
loan modification agreement."
Pet. at IV/ ~ 6.
The court concludes that plaintiffs failed to sufficiently
allege that they sent any communication meeting the requirements
of a "qualified written request."
The pleading does not state
that the correspondence sent included information that enabled
Wells Fargo to "identify the name and account of the borrower/"
12 U.S.C.
§
2605(e) (1) (B) (i)/ or that the correspondence either
included "a statement of the reasons for the belief . . . that
the account
[was in error]" or that it provided Wells Fargo with
"sufficient detail" about the "information sought/" id.
§
2605(e) (1) (B) (ii).
Nor is there any allegation of fact in the
pleading from which the court could conclude that plaintiffs
suffered any loss or damage as a result of any failure of Wells
7
mortgage note from a prior servicer."
Pet. at V,
~
10.
Furthermore, plaintiffs alleged that:
Wachovia Mortgage had accepted Plaintiffs[']
modification application when WELLS FARGO BANK, N.A. a
mortgage servicer took over Plaintiffs['] note.
Neither Wachovia or WELLS FARGO BANK, N.A. indicated to
Plaintiffs that the modification application had been
rejected or denied.
The court concludes that plaintiffs cannot state a breach of
contract claim arising from this purported loan modification
application.
By their own allegations, plaintiffs state that
they received no response on the status of their loan
modification application from Wachovia or Wells Fargo.
Id.; see
also id. at IV, ~ 5-7 (stating that plaintiffs received "no
response from Wachovia" about the application and that plaintiffs
"received no information" from Wells Fargo about their qualified
written request).
The court finds nothing in the petition to
support an allegation that the lack of a response from Wachovia
or Wells Fargo on the application resulted in a binding loan
modification agreement.
Accordingly, plaintiffs' allegations
concerning the loan modification application are wholly
conclusory, devoid of any factual support, and do not amount to a
breach of contract claim.
9
As for the other grounds of their breach of contract claim,
plaintiffs alleged that
[Wells Fargo's] action[s] are a breach of contract per
section 13 of the Deed of Trust and are in violation of
this covenant with their dilatory tactics in failing to
respond to Plaintiffs . . . .
[Wells Fargo did] not adher[e] to the terms of
their contract to stop all collection efforts including
foreclosure until all of the Plaintiffs' challenging
the debt (e.g. the servicing of the complaints per the
modification agreement have been resolved and/or
addressed by the Defendant per the R.E.S.P.A. clause of
the contract.
Id., ~~ 11-12.
Plaintiffs' breach of contract claims on these
additional grounds also do not state a claim for relief.
In
order to prevail on their breach of contract claim,
plaintiffs must establish (1) the existence of a valid
contract between plaintiffs and defendant,
(2) the
plaintiffs' performance or tender of performance,
(3) the
defendant's breach of the contract, and (4) the plaintiffs'
damage as a result of the breach.
Hackberry Creek Country
Club, Inc. v. Hackberry Creek Home Owners Ass'n, 205 S.W.3d
46, 55 (Tex. App.--Dallas 2006, pet. denied).
Plaintiffs fail to satisfactorily plead all of these
elements.
with respect to performance, plaintiffs merely
alleged that their timely performance of their payment
10
Pet. at IV, ~ 2.
obligations extended through June 2009.
They have not alleged that this performance continued beyond
that time, or that they were excused from further
performance.
As for breach, the petition made vague
references to a "R.E.S.P.A. clause of the contract" and
"Section 13 of their Deed of Trust," but no supporting
documentation was attached to clarify the requirements of
this clause or section.
As for injury, the petition is
devoid of any facts or allegations to show that plaintiffs
have suffered any injury, much less any monetary loss.
Only
speculative allegations of future damages to their credit
reputation and lost equity in the property are stated, Pet.
at V, ~ 17, and those allegations are simply too speculative
to show either causation or injury, especially given that
the foreclosure has not yet occurred.
Accordingly,
plaintiffs have not pleaded a plausible breach of contract
claim under any of these grounds.
3.
The Texas Property Code Claim
The court now considers plaintiffs' complaints
concerning the notice requirements of the Texas Property
Code.
In their petition, plaintiffs alleged that Wells
Fargo "is in direct contravention of the notice provisions
of the Texas Property Code
§
51.002 as it relates to the
11
Fargo to respond to any written request of plaintiffs.
Thus,
plaintiffs have not sufficiently stated a claim for relief under
§
2605(e) of RESPA.
To the extent that plaintiffs have alleged a violation of
§
2605(c) of RESPA, those allegations also fail to state a claim
for relief.
Plaintiffs cannot prevail on a
§
2605(c) claim
against Wells Fargo because they fail to allege any of the
following:
(1) that the rights to service their loan were
transferred to Wells Fargo;
(2) that Wells Fargo failed to
provide qualifying notice of the transfer within fifteen days
after the effective date of the transfer; or (3) that the alleged
failure to provide qualifying notice of the transfer caused
actual damages. 4
2.
12 U. S. C.
§
2605 (c),
(f).
The Breach of Contract Claim
For their breach of contract claim, plaintiffs alleged that
Wells Fargo "owed them a legal duty per the mortgage contract to
accept any terms and conditions that were modified and/or
change[d] prior to it accepting any transfer to service the
4Plaintiffs alleged that "before their loan is transferred, sold or assigned by World Savings,
Plaintiffs must be given written notice of transfer per Section 6 ofR.E.S.P.A. (12 USC Section 2605)."
Pet. at V, ~ 14. Although plaintiffs referred to "the failure ofWachovia Mortgage, FSB and Defendant,
WELLS FARGO BANK, N.A. transferring their file," id., ~ 15, plaintiffs never actually alleged that
Wells Fargo failed to provide timely notice. Nor did plaintiffs adequately plead actual damages to
qualify for recovery. Accordingly, plaintiffs have failed to allege sufficient facts to state a claim under
§ 2605(e) or under § 2605(c) ofRESPA.
8
posting of the foreclosure."
Id.,
~
15.
This allegation
does not state with particularity any of the deficiencies in
the substance, form, or manner of notice required by the
Property Code.
The court, in looking to section 51.002 of
the Property Code, cannot divine what provision has been
violated--such as the type of notice that was allegedly not
provided, or whether some or all of the information was
omitted in the notices.
The petition does not contain any
factual allegations that would permit the court to determine
whether the deficient notice complained of refers to the
notice that must be posted at the Tarrant County courthouse
door, the notice that must be filed with the Tarrant County
clerk's office twenty-one days before the foreclosure sale
date, or the written notice that must be served on
plaintiffs by certified mail twenty-one days before the
foreclosure sale date.
4.
Tex. Prop. Code
§
51.002(b).
The Texas Finance Code Claim
The court now turns to the claims plaintiffs have
alleged under the Texas Fair Debt Collection Practices Act,
which the court assumes are referring to violations of the
Texas Finance Code.
See Tex. Fin. Code
12
§§
392.001, et seq.
Plaintiffs have alleged that Wells Fargo's posting of
the property for foreclosure was "in direct contravention of
the notice provisions of the Texas Fair Debt Collection
Practices Act" and that "under the Texas Fair Debt
Collections Practices Act [sic], the Plaintiffs have been
prevented from exercising their rights to dispute and
correct any discrepancies prior to acceleration of their
Pet. at IV, ~ 9; id. at V,
mortgage note with Defendant."
~
15.
The petition, however, contains no more detail
specifying exactly which sections of the Finance Code have
been violated, much less any other factual allegations to
support these claims.
Significantly, plaintiffs have failed
to plead that Wells Fargo qualifies as a "debt collector"
under the Finance Code.
392.301.
Tex. Fin. Code
§§
392.001(6),
This omission, the court deems, is ultimately
fatal to plaintiffs' claims arising under the Finance Code.
III.
Conclusion
The court therefore concludes that plaintiffs have not
alleged any facts that would allow the court to draw the
reasonable inference that plaintiffs are entitled to
declaratory or injunctive relief or that Wells Fargo is
liable to plaintiffs under any of the theories of liability
13
alleged in their pleading.
As a result, plaintiffs'
pleading fails to state a plausible claim to relief and
should be dismissed.
For the reasons given above,
The court ORDERS that Wells Fargo's motion to dismiss
be, and is hereby, granted.
The court further ORDERS that all claims and causes of
action asserted by plaintiffs against Wells Fargo be, and
are hereby, dismissed.
SIGNED November
~,
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