Golden et al v. JPMorgan Chase Bank, N.A.
Filing
13
Memorandum Opinion and Order granting 7 Motion to Dismiss filed by JPMorgan Chase Bank NA: The court ORDERS that defendant's motion to dismiss be, and is hereby, granted, and that all claims and causes of action asserted in the above-captioned action by plaintiffs, Charles Golden and Alissa Golden, against defendant, JPMorgan Chase Bank, N.A., be, and are hereby, dismissed with prejudice. (Ordered by Judge John McBryde on 7/23/2014) (mdf)
IN THE UNITED STATES DISTRICT COURTf
NORTHERN DISTRICT OF
FORT WORTH DIVISION
j
CHARLES GOLDEN, ET AL,
Plaintiffs,
VS.
JPMORGAN CHASE BANK, N.A. ,
Defendant.
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JUl23214
NO. 4:14-CV-333-A
MEMORANDUM OPINION
and
ORDER
Before the court for decision is the motion to dismiss for
failure to state a claim upon which relief could be granted
pursuant to Rule 12(b) (6) of the Federal Rules of Civil
Procedure, filed in the above action by defendant, JPMorgan Chase
Bank, N.A.
response.
Plaintiffs, Charles Golden and Alissa Golden, filed a
Having now considered all of the parties' filings,
plaintiffs' first amended complaint, and the applicable legal
authorities, the court concludes that the motion should be
granted.
1.
Background and Plaintiffs' Pleaded Claims
Plaintiffs initiated this action by filing their original
petition and application for temporary restraining order in the
District Court of Tarrant County, Texas, 236th JUdicial District.
Following removal, the court ordered plaintiffs to file an
amended complaint that complied with the requirements of the
Federal Rules of Civil Procedure, as interpreted by the united
States Supreme Court in Ashcroft v. Iqbal, 556 U.S. 662 (2009),
and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007).
Plaintiffs then filed their first amended complaint, in which
they alleged the following:
On or about February 27, 2008, plaintiffs signed a
promissory note payable to The Lending Partners, Ltd., secured by
a deed of trust, in the amount of $96,239.00, for the purchase of
property in North Richland Hills, Tarrant County, Texas.
Prior
to the date plaintiffs initiated this action, they sought
assistance from defendant in obtaining a loan modification to
reduce their mortgage paYments "in a time of financial
difficulty."
PIs.' First Am. Compl. at 3.
"Defendant agreed
that it would review the loan for a modification under one of
their numerous programs available and instructed Plaintiffs to
submit an application and financial information."
Id. at 3-4.
Plaintiffs submitted the requested information; however,
defendant apparently lost or misplaced the documentation, thus
requiring plaintiffs to reapply for a loan modification and
resubmit their information numerous times.
At the time
plaintiffs initiated this action, defendant had neither approved
2
nor denied the modification, nor had it provided any written
explanation to plaintiffs as to why no approval or denial was
forthcoming.
Because defendant failed to inform plaintiffs of
the approval or denial, plaintiffs were deprived of their right
to appeal defendant's decision, and they did not realize they
"needed to make other plans regarding their loan and residence."
Id. at 4.
Consequently, plaintiffs incurred "additional late
fees, default interest and fees," making it impossible for them
to "catch up" on their mortgage paYments.
Id.
Although the deed
of trust affords plaintiffs an opportunity to reinstate their
loan, defendant denied plaintiffs this right by not informing
them that the loan modification had been denied.
Defendant informed plaintiffs of its intent to foreclose on
their property.
However, the pUblic records of Tarrant County
show no assignment or conveyance of the deed of trust from the
original lender to defendant.
Accordingly, plaintiffs in the
complaint questioned whether defendant had authority to initiate
foreclosure proceedings.
Plaintiffs in the first amended complaint alleged claims and
causes of action against defendant for breach of contract and
anticipatory breach of contract, alleged that defendant violated
the Texas Debt Collection Act ("TDCA"), and challenged
defendant's right to foreclose on the property because there was
3
no public record of an assignment of the deed of trust to
defendant.
Plaintiffs also sought injunctive relief to bar any
transfer of their property.
II.
Standards Applicable to Motion to Dismiss
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.
Id. 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.
(2009)
See Ashcroft v. Igbal, 556 U.S. 662, 679
("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
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state a claim under Rule 12(b) (6), the facts pleaded must allow
the court to infer that the plaintiff's right to relief is
plausible.
Id. at 678.
To allege a plausible right to relief,
the facts pleaded must suggest liability; allegations that are
merely consistent with unlawful conduct are insufficient.
Twombly, 550 U.S. at 566-69.
"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."
Iqbal, 556 U.S. at 679.
The court generally is not to look beyond the pleadings in
deciding a motion to dismiss.
774 (5th Cir. 1999).
Spivey v. Robertson, 197 F.3d 772,
"Pleadings" for purposes of a Rule 12 (b) (6)
motion include the complaint, its attachments, and documents that
are referred to in the complaint and central to the plaintiff's
claims.
Collins v. Morgan Stanley Dean Witter, 224 F.3d 496,
498-99 (5th Cir. 2000).
Additionally, "it is clearly proper in
deciding a 12(b) (6) motion to take judicial notice of matters of
pUblic record."
(5th Cir. 2007).
Norris v. Hearst Trust, 500 F.3d 454, 461 n.9
Because the documents attached to defendant's
motion to dismiss are considered part of the pleadings or are
matters of pUblic record,l the court may consider them in its
IThe documents which are either referred to in the amended complaint or of which defendant asks the
(continued ... )
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resolution of the motion to dismiss.
Id.
III.
Application of Law to Facts
A.
Authority to Foreclose and Violation of TDCA
Although the complaint alleged that the pUblic records
included no record of any assignment of the deed of trust to
defendant from the original lender, it is unclear if plaintiffs
are attempting to assert a claim on that basis.
To the extent
they intended to do so, defendant moves for dismissal of such
claim because the assignment is included in the pUblic records.
Defendant provided a copy of the assigning document, which is
included in the public records of the Tarrant County Clerk, and
of which the court takes jUdicial notice.
In their response, plaintiffs stated that they had no access
to an assignment of record showing any transfer of the property
to defendant, but indicated that upon receipt of such assignment,
they would amend their complaint to dismiss this cause of action
against defendant.
Defendant included a copy of the assignment
in the appendix to its motion to dismiss, a copy of which was
served on plaintiffs.
Inasmuch as plaintiffs have now received a
( ... continued)
court to take judicial notice include the deed of trust, assignment ofthe deed of trust, and the note. The
note is attached as an exhibit to a motion for relief from stay filed by defendant in plaintiffs' bankruptcy
proceeding in case number 09-40315-DML-13, in the bankruptcy court for the Northern District of
Texas.
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copy of the assignment via their copy of defendant's appendix,
the court concludes that plaintiffs have abandoned this claim.
Similarly, defendant sought dismissal of plaintiffs' TDCA
claim because no provision of the statute requires a debt
collector to give thirty days' notice prior to initiating
foreclosure proceedings.
Plaintiffs apparently agree, and
indicated in their response that they will dismiss this claim.
B.
Plaintiffs' Breach of Contract Claims are Dismissed
The basis of plaintiffs' breach of contract claims appears
to be that defendant offered, and plaintiffs accepted, a "loan
modification review."
PIs.
I
First Am. Compl. at 5.
Plaintiffs
contend they submitted the financial information requested by
defendant to determine if they qualified for a loan modification,
and that in so doing, they relied on defendant's representations
and promises.
Such reliance, plaintiffs maintain, constituted a
unilateral contract which defendant breached when the property
was posted for foreclosure sale.
Defendant argues that plaintiffs' breach of contract claim
should be dismissed because it is barred by the statute of
frauds, and because plaintiffs have failed to allege that they
performed or tendered performance under the note and deed of
trust.
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1.
Statute of Frauds
Under Texas law, a loan agreement involving an amount in
excess of $50,000.00 is unenforceable unless the agreement is in
writing and signed by the party to be bound.
Code Ann.
§
26.02(b).
Tex Bus. & Com.
A promise pertaining to the sale of real
estate must also be in writing.
Id. at 26.01(b) (4).
Hence, any
agreement regarding modification of a loan to purchase real
property must be in writing.
Martins v. BAC Home Loans
Servicing. L.P., 722 F.3d 249, 256 (5th Cir. 2013).
Here, plaintiffs pleaded that their original loan,
pertaining to the purchase of real estate, was in the amount of
$96,239.00.
Because the contract purportedly breached by
defendant pertained to modification of this loan, it was subject
to the statute of frauds, and was required to be in writing.
Martins, 722 F.3d at 256 (holding agreement to modify mortgage
note was sUbject to statute of frauds and unenforceable unless in
writing).
Plaintiffs alleged only that defendant agreed to
review their loan for a modification.
The complaint did not
allege that any agreement to modify the loan was ever made, much
less put in writing.
Hence, plaintiffs cannot overcome the
statute of frauds.
In their response, plaintiffs argue that promissory estoppel
may avoid the statute of frauds "when the alleged promise is to
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sign an existing document that satisfies the statute of frauds."
PIs.' Resp. and Br. In Opp'n to Def.'s Mot. to Dismiss PIs.'
Compl. at 5.
Plaintiffs' argument aims at, but misses, the mark.
The Fifth Circuit has held that promissory estoppel can overcome
the statute of frauds where there is "a promise to sign a written
contract which had been prepared and which would satisfy the
requirements of the statute of frauds."
256-57 (citation omitted).
Martins, 722 F.3d at
However, plaintiffs alleged only that
defendant orally agreed to offer them a loan modification review.
Nowhere did plaintiffs allege that defendant promised to sign any
modification document which had been prepared and which would
satisfy the statute of frauds.
Accordingly, plaintiffs' breach
of contract claim fails. 2
2.
Plaintiffs Failed to Tender Performance
Defendant also argues that plaintiffs' breach of contract
claim fails because they failed to allege that they tendered
performance.
Although this argument appears meritorious and
would likely result in dismissal of the breach of contract claim,
2The applicable heading in the first amended complaint states that plaintiffs are asserting claims for
"breach of contract and anticipatory breach of contract." Pis.' First Am. CompI. at 5. The elements of a
claim for anticipatory breach of contract under Texas law are: (1) absolute repudiation of a contractual
obligation; (2) lack of a just excuse for the repudiation; and (3) damage to the non-repudiating party. See
Gonzalez v. Denning, 394 FJd 388, 394 (5th Cir. 2004). No mention is made in the first amended
complaint of any purported repudiation, nor are facts alleged that could be construed as asserting such a
claim. It thus appears that "anticipatory breach of contract" was an erroneous addition to the complaint
and not an intent to assert a cause of action.
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the court need not consider it, as the court has already
dismissed the claim based on the statute of frauds.
C.
Injunctive Relief
Defendant argued for dismissal of plaintiffs' request for
injunctive relief on the ground that, if the court dismisses all
of plaintiffs' other claims and causes of action, nothing remains
to support such a request.
Because plaintiffs have failed to
show a plausible right to relief on any of their claims, they are
not entitled to injunctive relief.
D.
Plaintiffs' Request to Amend Complaint
In the conclusion of their response, plaintiffs ask that
they be permitted to replead, should the court determine any of
their claims are deficient.
Rule LR lO.l(a) of the Local Civil
Rules of the United States District Court for the Northern
District of Texas requires that "each
motion, or other
paper must: (a) contain on its face a title clearly identifying
each included pleading, motion, or other paper; .
"The
response to the motion to dismiss does not comply with this rule.
Nor did plaintiffs in their response inform the court of the
additional facts they could plead to correct the deficiencies in
the first amended complaint, and they did not attach to the
response a proposed second amended complaint.
Under these
circumstances, the court is not permitting plaintiffs to replead.
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Sullivan v. Leor Energy, LLC, 600 F.3d 542, 551 (5th Cir. 2010).
Additionally, the first amended complaint represents
plaintiffs' second pleading in this action.
Plaintiffs filed
their original petition in the state court.
Upon removal, the
court entered an order that described the pleading standards
required by the Federal Rules of Civil Procedure, as interpreted
by Twombly and Igbal, and ordered plaintiffs to file an amended
complaint consistent with those standards.
the first amended complaint.
Plaintiffs then filed
Plaintiffs have thus been provided
ample opportunity to correct any deficiencies in their pleadings
and plead their best case, and the court can see nothing to be
gained by allowing them another bite at the apple.
IV.
Order
Therefore,
The court ORDERS that defendant's motion to dismiss be, and
is hereby, granted, and that all claims and causes of action
asserted in the above-captioned action by plaintiffs, Charles
Golden and Alissa Golden, against defendant, JPMorgan Chase Bank,
N.A., be, and are hereby, dismissed with
SIGNED JUly 23, 2014.
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