Olaoye v. Wells Fargo Bank, NA
Filing
16
ORDER granting 9 Motion to Dismiss. 9 Motion to Dismiss filed by Wells Fargo Bank, NA terminated. (Ordered by Judge Terry R Means on 4/2/2012) (wrb)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
FORT WORTH DIVISION
KOLADE OLAOYE
§
§
§
§
§
VS.
WELLS FARGO BANK, NA
CIVIL ACTION NO. 4:11-CV-772-Y
ORDER GRANTING MOTION TO DISMISS
Before the Court is the Motion to Dismiss (doc. 9) filed by
defendant Wells Fargo Bank, N.A. (“Wells Fargo”).
After review,
the Court will grant the motion.
I.
Background
In December 2001, plaintiff Kolade Olaoye obtained a mortgage
loan from World Savings Bank, FSB (“World Savings Bank”). The loan
is evidenced by a promissory note, and the note is secured by a
deed of trust.
Savings
Bank
(“Wachovia”).
(Def.’s App. 1, 7.)
changed
its
name
(Id. at 24, 26-29.)
merged into Wells Fargo.1
In December 2007, World
to
Wachovia
Mortgage,
FSB
In November 2009, Wachovia
(Id. at 24, 30.)
On February 1, 2011, after Olaoye apparently defaulted on the
loan, Wells Fargo initiated non-judicial foreclosure proceedings
and purchased the mortgaged property at the resulting foreclosure
sale.
Shortly thereafter, Wells Fargo filed a forcible-detainer
action against Olaoye in a Texas state court.
1
The Court may take judicial notice of facts such as these, which are
matters of public record. See Norris v. Hearst Trust, 500 F.3d 454, 461 n.9 (5th
Cir. 2007)
Olaoye, in turn, filed the instant lawsuit in the 236th
Judicial District Court, Tarrant County, Texas.
In his original
petition, Olaoye alleges that “the Note and Deed of Trust were not
lawfully and timely indorsed, transferred, and assigned to [Wells
Fargo]” and that Wells Fargo “was not authorized to collect the
Note and enforce the Deed of Trust.”
(Pl.’s Pet. 3.)
Olaoye
further alleges that, as a result, Bank of America “did not have
the standing or legal right to declare a default in payment of the
Note, accelerate the maturity of the Note, or foreclose on the
Property.”
(Id.)
According to Olaoye, “the Note and the security
interest embodied in the Deed of Trust were split and separated,”
after which “the Note became unsecured, the party holding the Deed
of Trust could not and did not experience a default, and the
security interest in the Property was forfeited.” (Id.)
Based on
these allegations, Olaoye asserts claims for (1) trespass to try
title, (2) suit to quiet title, (3) wrongful foreclosure,2 and (4)
violations of the Texas Debt Collection Practices Act (“TDCPA”).
Olaoye
seeks
damages,
a
declaratory
judgment,
and
injunctive
relief.
Wells Fargo removed the case to this Court on October 28,
2011.
By the instant motion, Wells Fargo seeks dismissal of
2
Olaoye actually entitles this cause of action “Request to Set Aside
Substitute Trustee’s Non-Judicial Foreclosure Sale, and to Cancel Substitute
Trustee’s Deed.” (Pl.’s Pet. 4.) The Court will treat the claim as one for
wrongful foreclosure because Olaoye is challenging the lawfulness of the February
2011 foreclosure proceedings and because Olaoye has not identified any other
cognizable legal basis for bringing the claim.
2
Olaoye’s claims under Federal Rule of Civil Procedure 12(b)(6).
II.
Legal Standard
A.
Rule 12(b)(6)
Federal
Rule
of
Civil
Procedure
12(b)(6)
authorizes
the
dismissal of a complaint that fails “to state a claim upon which
relief can be granted.”
Fed. R. Civ. P. 12(b)(6).
This rule must
be interpreted in conjunction with Rule 8(a), which sets forth the
requirements for pleading a claim for relief in federal court. See
Fed. R. Civ. P. 8(a).
Rule 8(a) calls for “a short and plain
statement of the claim showing that the pleader is entitled to
relief.”
Fed. R. Civ. P. 8(a)(2); see Swierkiewicz v. Sorema N.A.,
534 U.S. 506, 508 (2002) (holding that Rule 8(a)’s simplified
pleading standard applies to most civil actions).
The Court must
accept as true all well-pleaded, non-conclusory allegations in the
complaint and liberally construe the complaint in favor of the
plaintiff.
Kaiser Aluminum & Chem. Sales, Inc. v. Avondale
Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir. 1982).
The plaintiff must, however, plead specific facts, not mere
conclusory allegations, to avoid dismissal.
LaPlace, 954 F.2d 278, 281 (5th Cir. 1992).
Guidry v. Bank of
Indeed, the plaintiff
must plead “enough facts to state a claim to relief that is
plausible on its face,” and his “[f]actual allegations must be
enough to raise a right to relief above the speculative level, on
3
the assumption that all the allegations in the complaint are true
(even if doubtful in fact).”
Bell Atl. Corp. v. Twombly, 550 U.S.
544, 547, 555 (2007) (citations omitted).
The Court need not
credit bare conclusory allegations or “a formulaic recitation of
the elements of a cause of action.”
Id. at 555.
Rather, “[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, 129 S. Ct. 1937, 1949 (2009).
“Generally, a court ruling on a motion to dismiss may rely on
only
the
complaint
and
its
proper
attachments.
A
court
is
permitted, however, to rely on documents incorporated into the
complaint by reference, and matters of which a court may take
judicial notice.”
Dorsey v. Portfolio Equities, Inc., 540 F.3d
333, 338 (5th Cir. 2008) (citations omitted) (internal quotation
marks
omitted).
“A
written
document
that
is
attached
to
a
complaint as an exhibit is considered part of the complaint and may
be considered in a 12(b)(6) dismissal proceeding.”
Ferrer v.
Chevron Corp., 484 F.3d 776, (5th Cir. 2007) (footnote omitted).
In addition, a “court may consider documents attached to a motion
to dismiss that ‘are referred to in the plaintiff’s complaint and
are central to the plaintiff’s claim.’”
Sullivan v. Leor Energy,
LLC, 600 F.3d 542, 546 (5th Cir. 2010) (quoting Scanlan v. Tex. A&M
Univ., 343 F.3d 533, 536 (5th Cir. 2003)).
4
B.
Rule 12(c)
Wells
Fargo’s
motion
to
dismiss
is
technically
untimely
because it was filed after Wells Fargo filed its answer.
However,
a court may treat an untimely Rule 12(b)(6) motion as a Rule 12(c)
motion for judgment on the pleadings for failure to state a claim.
See Jones v. Greninger, 188 F.3d 322, 324 (5th Cir. 1999). Because
Wells Fargo asserted “failure to state a claim” as a defense in its
answer
and
therefore
preserved
that
defense,
the
Court
will
construe Wells Fargo’s Rule 12(b)(6) motion as one filed under Rule
12(c). The standards for deciding the two types of motions are the
same.
See Mayne v. Omega Protein, Inc., 370 F. App’x 510, 514 (5th
Cir. 2010); Great Plains Trust Co. v. Morgan Stanley Dean Witter &
Co., 313 F.3d 305, 313 n.8 (5th Cir. 2002).
III. Analysis
A.
Wrongful Foreclosure
Olaoye alleges that Wells Fargo lacked the authority to
enforce the terms of the note and deed of trust and to initiate the
February 2011 foreclosure sale.
According to Olaoye, the note and
deed of trust were not “lawfully and timely indorsed, transferred,
and assigned” to Bank of America, but rather were “split and
separated.”
(Pl.’s Pet. 3.)
Thus, Olaoye’s wrongful-foreclosure
claim is predicated on a theory that Wells Fargo never received a
valid assignment of the note and deed of trust.
5
But any authority that Wells Fargo may have had to foreclose
on the property would not have originated from an assignment.
Wells Fargo is the successor to World Savings Bank, who was the
original lender on the loan, the original payee on the note, and
the original beneficiary of the deed of trust. Consequently, Wells
Fargo’s authorization to foreclose on the mortgage property came by
virtue of its status as the successor-in-interest to Olaoye’s loan.
Olaoye’s argument that the note and deed of trust were split and
were never assigned to Wells Fargo is inapposite.3
Moreover, Olaoye’s wrongful-foreclosure claim suffers from two
other fatal defects.
First, Olaoye has not alleged that he
tendered the full amount due under the note.
To the contrary, the
sum of his allegations implies that he defaulted on the loan.
Accordingly, he cannot obtain equitable relief setting aside the
February 2011 foreclosure sale.
See Fillion v. David Silvers Co.,
709 S.W.2d 240, 246 (Tex. App.--Houston [14th Dist.] 1986, writ
ref’d n.r.e.).
Second, Olaoye has not alleged that he lost
possession of the mortgage property.
“In Texas, recovery of
damages for wrongful foreclosure is premised upon one’s lack of
possession of real property[;] therefore individuals never losing
possession of the property cannot recover damages on a theory of
3
Moreover, even assuming that the note and deed of trust had been split
and that Wells Fargo lacked possession of the note in February 2011, this would
not necessarily mean that Wells Fargo lacked the authority to enforce the deed
of trust and foreclose on the property. See DeFranceschi v. Wells Fargo Bank,
N.A., No. 4:10–CV–455–Y, 2011 WL 3875338, at *4 (N.D. Tex. Aug. 31, 2011) (slip
opinion); Eskridge v. Fed. Home Loan Mortg. Corp., No. W–10–CA–285, 2011 WL
2163989, at *5 (W.D. Tex. Feb. 24, 2011).
6
wrongful foreclosure.”
White v. BAC Home Loans Serving, LP, No.
3:09-CV-2484-G, 2010 WL 4352711, at *5 (N.D. Tex. Nov. 2, 2010)
(Fish, J.) (citations omitted)(internal quotation marks omitted).
In light of this, the Court concludes that Olaoye has failed to
state a claim for wrongful foreclosure.
But even assuming Olaoye has alleged facts sufficient to state
a claim for wrongful foreclosure, that claim nevertheless fails
because it is preempted by the Home Owners’ Loan Act (“HOLA”).
Under HOLA and its accompanying regulations, a state-law claim is
preempted if it purports to impose requirements on a federal
savings bank regarding “[p]rocessing, origination, servicing, sale
or purchase of, or investment or participation in, mortgages.”4
12
C.F.R. § 560.2(b)(10) (West 2012); see also Stefan v. Wachovia, No.
C 09-2252 SBA, 2009 WL 4730904, at *2-3 (N.D. Cal. Dec. 7, 2009)
(dismissing plaintiff’s claim for wrongful foreclosure under a
California statute as preempted by HOLA).
Olaoye’s wrongful-
foreclosure claim does purport to impose such requirements and,
thus, is preempted by HOLA.
B.
Trespass to Try Title and Suit to Quiet Title
Olaoye also asserts claims for trespass to try title and for
suit to quiet title.
“The Texas Property Code provides that ‘a
4
“[A]lthough Wells Fargo itself is not subject to HOLA and [the Office
of Thrift Supervision (“OTS”)] regulations, HOLA nonetheless applies to this
action because Plaintiff's loan originated with a federal savings bank and was
therefore subject to the requirements set forth in HOLA and OTS regulations.”
Khan v. World Savings Bank, FSB, No. 10-CV-04305-LHK, 2011 WL 133030, at *2 (N.D.
Cal. Jan. 14, 2011) (citations omitted).
7
trespass to try title action is the method of determining title to
lands, tenements, or other real property.’” Martin v. Amerman, 133
S.W.3d 262, 264 (Tex. 2004) (citing Tex. Prop. Code Ann. § 22.001
(West 2012)).
“A suit to quiet title--also known as a suit to
remove cloud from title--is an equitable action that clears a valid
title against a defendant’s invalid claim to the property.”
James
v. Wells Fargo Bank, N.A., No. 3:11–CV–2228–B, 2012 WL 778510, at
*2 (N.D. Tex. Mar. 12, 2012) (Boyle, J.) (citations omitted).
“To prevail in a trespass-to-try-title action, a plaintiff
must usually (1) prove a regular chain of conveyances from the
sovereign, (2) establish superior title out of a common source, (3)
prove title by limitations, or (4) prove title by prior possession
coupled with proof that possession was not abandoned.” Martin, 133
S.W.2d at 265 (citation omitted).
“To prevail in a suit to quiet
title action, a plaintiff must show ‘(1) an interest in a specific
property, (2) title to the property is affected by a claim by the
defendant, and (3) the claim, although facially valid, is invalid
or unenforceable.’” James, 2012 WL 778510, at *2 (quoting Bell v.
Bank of Am. Home Loan Servicing, No. 4:11–cv–02085, 2012 WL 568755,
at *6 (S.D. Tex. Feb. 21, 2012)).
In both types of actions, the
plaintiff “must prove and recover on the strength of his own title,
not the weakness of his adversary’s title.”
Fricks v. Hancock, 45
S.W.3d 322, 327 (Tex. App.--Corpus Christi 2001, no pet.)(citations
omitted).
8
Olaoye’s petition contains no facts indicating that he has
superior title to the mortgage property.
Indeed, although he
alleges in conclusory fashion that he “is and remains the legal and
equitable owner of the [p]roperty,” he acknowledges that the
property was sold at a foreclosure sale in February 2011.
And as
noted above, his theory as to why the foreclosure sale should be
voided fails because Wells Fargo is the successor-in-interest to
his mortgage loan and, thus, had the authority to enforce the note
and deed of trust.
Because the allegations in Olaoye’s petition,
along with the facts of which the Court has taken judicial notice,
do not establish that Olaoye has superior title to the mortgage
property, his claims for trespass to try title and suit to quiet
title should be dismissed.
Furthermore, because Olaoye’s trespass-to-try-title and suitto-quiet-title claims are based on his challenges to the February
2011 foreclosure sale and Wells Fargo’s authority to enforce the
note and deed of trust, those claims are preempted by HOLA.
See 12
C.F.R. § 560.2(b)(4),(10); see also DeLeon v. Wells Fargo Bank,
N.A., 729 F. Supp. 2d 1119, 1128 (N.D. Cal. 2010) (dismissing
plaintiffs’ claims seeking “to cancel the deed resulting from the
trustee’s sale” on the ground that those claims were “premised on
[plaintiffs’] claims of wrongful foreclosure and defective notice,
which [were] preempted by HOLA”).
C.
TDCPA
9
Olaoye
alleges
that
Wells
Fargo’s
“acts,
omissions,
and
conduct” violated the TDCPA, including section 392.304 of the Texas
Finance Code, because Wells Fargo “misrepresented the character,
extent, or amount” of Olaoye’s debt.
(Pl.’s Pet. 6.)
The TDCPA
“makes unlawful, a variety of conduct by debt collectors, including
‘misrepresenting the character, extent, or amount of a consumer
debt.’”
§
James, 2012 WL 778510, at *4 (quoting Tex. Fin. Code. Ann.
392.304
(West
2012)).
“For
a
statement
to
constitute
a
misrepresentation under the [TDCPA], [the defendant] must have made
a false or misleading assertion.”
Narvaez v. Wilshire Credit
Corp., 757 F. Supp. 2d 621, 632 (N.D. Tex. 2010) (Lynn, J.)
(citation omitted).
Olaoye fails to allege any non-conclusory facts to support his
TDCPA claim.
For example, Olaoye does not allege that Wells Fargo
is a “debt collector” within the meaning of that statute.
See Hill
v. Wells Fargo Bank, NA, No. 4:ll–CV–644–A, 2011 WL 5869730, at *5
(N.D. Tex. Nov. 17, 2011) (McBryde, J.).
Because the Court does
“not accept as true ‘threadbare recitals of the elements of a cause
of action, supported by mere conclusory statements,’” Olaoye’s
TDCPA allegations fall short of stating a claim.
City of Clinton,
Ark. v. Pilgrim’s Pride Corp., 632 F.3d 148, 153 (5th Cir. 2010)
(quoting Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009)).
In any event, although the specifics of Olaoye’s TDCPA claim
are unclear, it appears that the claim is preempted by HOLA.
10
See
12 C.F.R. § 560.2(b)(4),(5), & (10) (“[T]he types of state laws
preempted
by
paragraph
(a)
of
this
section
include,
without
limitation, state laws purporting to impose requirements regarding
. . . (4) The terms of credit . . . , balance, payments due, or
term to maturity of the loan . . . ; (5) Loan-related fees,
including
without
limitation,
initial
charges,
late
charges,
prepayment penalties, servicing fees, and overlimit fees; . . .
[and] (10) Processing, origination, servicing, sale or purchase of,
or investment or participation in, mortgages.”).
IV.
Conclusion
Based on the foregoing, the Court concludes that Olaoye has
failed to state a claim upon which relief may be granted.5
Accordingly, Wells Fargo’s motion is GRANTED.
All claims in the
above-styled and -numbered cause are DISMISSED WITH PREJUDICE.6
SIGNED April 2, 2012.
____________________________
5
Because Olaoye has failed to state a claim upon which relief may be
granted, he is not entitled to injunctive or declaratory relief.
See Excel
Marketing Solutions, Inc. v. Direct Fin. Solutions, LLC, No. 3:11-CV-0109-D, 2011
WL 1833022, at *4 (N.D. Tex. May 13, 2011) (Fitzwater, C.J.) (“Injunctive relief
is an equitable remedy, not an independent cause of action.” (citation omitted));
Wells Fargo Bank, N.A. v. Am. Gen. Life Ins. Co., 670 F. Supp. 2d 555, 565 (N.D.
Tex. 2009) (noting that the “Declaratory Judgment Act is remedial only”); Juliff
Gardens, L.L.C. v. Tex. Comm’n on Envtl. Quality, 131 S.W.3d 271, 277 (Tex. App.-Austin 2004, no pet.) (“[A] declaratory judgment is not an independent cause of
action, but a remedy for a cause of action already within the court’s
jurisdiction.” (citation omitted)).
6
The Court will not grant Olaoye leave to amend his complaint because his
claims are preempted by HOLA and because the judicially noticed facts in this
case indicate that allowing Olaoye to replead would be futile.
11
TERRY R. MEANS
UNITED STATES DISTRICT JUDGE
12
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?