Berdine v. CitiMortgage, Inc.
Filing
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MEMORANDUM OPINION and ORDER: 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 plaintiff, Keith D. Berdine, against defendant, CitiMortgage, Inc., be, and are hereby, dismissed with prejudice. (Ordered by Judge John McBryde on 8/4/2014) (srs)
IN THE UNITED STATES DISTRICT
NORTHERN DISTRICT OF TE~~,~<>
FORT WORTH DIVISION
KEITH D. BERDINE,
Plaintiff,
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VS.
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CITIMORTGAGE, INC.,
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NO. 4:14-CV-409-A
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Defendant.
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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, CitiMortgage,
Inc.
Plaintiff, Keith D. Berdine, filed a response.
Having now
considered all of the parties' filings, plaintiff's first amended
complaint, and the applicable legal authorities, the court
concludes that the motion should be granted.
I.
Background and Plaintiff's Pleaded Claims
Plaintiff initiated this action by filing his original
petition and application for temporary restraining order in the
District Court of Tarrant County, Texas, 352nd Judicial District.
Following removal, the court ordered plaintiff 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).
Plaintiff then
filed his first amended complaint, in which he alleged the
following:
On or about July 27, 2010, plaintiff signed a promissory
note payable to Mortgage Research Center, LLC, secured by a deed
of trust, in the amount of $235,524.00, for the purchase of
property in Lakeside, Tarrant County, Texas.
Prior to the date
plaintiff initiated this action, he sought assistance from
defendant in obtaining a loan modification to reduce his mortgage
paYments.
"Defendant agreed that it would review the loan for a
modification under one of their numerous programs available and
instructed Plaintiff to submit an application and financial
information."
Pl. 's First Am. Compl. at 4.
Plaintiff submitted the requested information; however,
defendant has yet to inform plaintiff if the modification request
has been approved or denied.
Had defendant denied the request,
plaintiff could have appealed.
However, because defendant failed
to respond, plaintiff had no opportunity to appeal, nor did he
know he needed to appeal or "make other plans regarding his loan
and residence."
Id. at 5.
Consequently, plaintiff incurred
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"additional late fees, default interest and fees," making it
impossible for plaintiff to "catch up" on his mortgage payments.
Id.
Although the deed of trust affords plaintiff an opportunity
to reinstate his loan, defendant denied plaintiff this right by
not informing him that the loan modification had been denied.
Defendant informed plaintiff of its intent to foreclose on
his 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, plaintiff in the
complaint questioned whether defendant had authority to initiate
foreclosure proceedings.
Plaintiff in the first amended complaint alleged claims and
causes of action against defendant for breach of contract,
alleged that defendant violated section 51.002 of the Texas
Property Code, and challenged defendant's right to foreclose on
the property because there was no pUblic record of an assignment
of the deed of trust to defendant.
Plaintiff also sought
injunctive relief to bar any transfer of his property to
defendant.
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.
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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. Iqbal, 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
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
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[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 document in the appendix submitted
with the motion to dismiss is considered part of the pleadings
and is a matter of public record,l the court may consider it in
its resolution of the motion to dismiss.
Id.
III.
Application of Law to Facts
A.
Authority to Foreclose and Violation of Texas Property Code
Although the complaint alleged that the public records
included no record of any assignment of the deed of trust to
'Defendant's appendix included a copy of the assignment of the deed of trust from the original lender
to defendant. The assignment is referred to, and relied on, in the amended complaint, and is also a public
record.
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defendant from the original lender, it is unclear if plaintiff
was attempting to assert a claim on that basis.
To the extent he
intended to do so, defendant moved for dismissal of such claim
because the assignment is recorded 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 his response, plaintiff stated that he had no access to
an assignment of record showing any transfer of the property to
defendant, but indicated that upon receipt of such assignment, he
would amend his 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
plaintiff.
Inasmuch as plaintiff has now received a copy of the
assignment via his copy of defendant's appendix, the court
concludes that plaintiff has abandoned this claim.
Similarly, defendant sought dismissal of plaintiff's claim
under the Texas Property Code on the ground that no violation of
the statute has occurred because defendant has not foreclosed.
Plaintiff apparently agrees, and indicated in his response that
he would dismiss this claim.
B.
Plaintiff's Breach of Contract Claim is Dismissed
The basis of plaintiff's breach of contract claim appears to
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be that defendant offered, and plaintiff accepted, a "loan
modification review."
Pl. 's First Am. Compl. at 6.
Plaintiff
contended he submitted the financial information requested by
defendant to determine if he qualified for a loan modification,
and that in so doing, he relied on defendant's representations
and promises.
Such reliance, plaintiff maintained, constituted a
unilateral contract which defendant breached when the property
was posted for foreclosure sale.
Plaintiff further alleged that
defendant breached the deed of trust because it never afforded
him the opportunity to cure and reinstate his note.
Defendant argued that plaintiff's breach of contract claim
should be dismissed because it is barred by the statute of
frauds, and because plaintiff has failed to allege that he
performed or tendered performance under the note and deed of
trust.
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.
rd. 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
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Servicing, L.P., 722 F.3d 249, 256 (5th Cir. 2013).
Here, plaintiff pleaded that his original loan, pertaining
to the purchase of real estate, was in the amount of $235,524,
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) .
Plaintiff alleged only that defendant agreed to review the 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, plaintiff cannot overcome the statute of frauds.
In his response, plaintiff argued that promissory estoppel
may avoid the statute of frauds "when the alleged promise is to
sign an existing document that satisfies the statute of frauds."
Pl. 's Resp. and Br. In Opp'n to Def.'s Mot. to Dismiss at 5
(quoting Bank of Texas, N.A. v. Gaubert, 286 S.W.3d 546, 553
(Tex. App.--Dallas 2009, pet. dism'd w.o.j.)).
Although
plaintiff has correctly quoted language from the cited case, he
failed to conduct the proper analysis.
The Fifth Circuit, and
the cases cited by plaintiff in his response, have held that
promissory estoppel can overcome the statute of frauds only where
there is "a promise to sign a written contract which had been
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prepared and which would satisfy the requirements of the statute
of frauds."
Martins, 722 F.3d at 256-57 (citation omitted) .
Here, plaintiff alleged only that defendant orally agreed to
offer him a loan modification review.
Nowhere did plaintiff
allege that defendant promised to sign any modification document
which had been prepared and which would satisfy the statute of
frauds.
2.
Accordingly, plaintiff's breach of contract claim fails.
Plaintiff Failed to Tender Performance
Defendant also argued that plaintiff's breach of contract
claim should be dismissed because he failed to allege that he
tendered performance.
Although this argument appears meritorious
and would likely result in dismissal of the breach of contract
Claim, the court need not consider it, as the court has already
dismissed the claim based on the statute of frauds. 2
C.
Injunctive Relief
Defendant argued for dismissal of plaintiff's request for
injunctive relief on the ground that, if the court dismisses all
of plaintiff's other claims and causes of action, nothing remains
to support such a request.
Because plaintiff failed to show a
2Defendant considered the first amended complaint as attempting to assert a claim of fraud, and
argued that the same should be dismissed, inasmuch as tort claims cannot be used to recover for breach
of an unenforceable promise barred by the statute of frauds. The court does not read the first amended
complaint as asserting a fraud claim, and plaintiff did not address this argument in his response.
Nevertheless, to the extent plaintiff may have attempted to assert such a claim, the court concludes that
dismissal would be warranted, for the reasons set forth in defendant's motion.
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plausible right to relief on any of his claims, he is not
entitled to injunctive relief.
D.
Plaintiff's Request to Amend Complaint
In the conclusion of his response, plaintiff asked that he
be permitted to replead, should the court determine any of his
claims are deficient.
Rule LR 10.1(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 did not comply with this rule.
Nor did
plaintiff in his response inform the court of the additional
facts he could plead to correct the deficiencies in the first
amended complaint, and he did not attach to the response a
proposed second amended complaint.
Under these circumstances,
the court is not permitting plaintiff to replead.
Sullivan v.
Leor Energy, LLC, 600 F.3d 542, 551 (5th Cir. 2010).
Additionally, the first amended complaint represents
plaintiff's second pleading in this action.
original petition in the state court.
Plaintiff filed his
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 Iqbal, and ordered plaintiff to file an amended
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complaint consistent with those standards.
the first amended complaint.
Plaintiff then filed
Plaintiff has thus been provided
ample opportunity to correct any deficiencies in his pleadings
and plead his best case, and the court can see nothing to be
gained by allowing him 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 plaintiff, Keith D.
Berdine, against defendant, CitiMortgage, Inc., be, and are
hereby, dismissed with prejudice.
SIGNED August 4, 2014.
aO)IN McBRY E /
q6.ited States
{
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