Windsor Mortgage Holdings Limited, LLC v. Pyron et al
ORDER denying 11 Motion to Dismiss.(Signed by Judge Nelva Gonzales Ramos) Parties notified.(sylopez, 2)
United States District Court
Southern District of Texas
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
CORPUS CHRISTI DIVISION
WINDSOR MORTGAGE HOLDINGS
BRENDA S PYRON, et al,
September 27, 2017
David J. Bradley, Clerk
§ CIVIL ACTION NO. 2:17-CV-170
ORDER DENYING MOTION TO DISMISS
Plaintiff Windsor Mortgage Holdings Limited, LLC (Windsor) filed this action
against Defendants Brenda and Dennis Pyron (jointly Pyrons) to collect a debt secured by
a home equity lien on the Pyron residence. Before the Court is “Defendants’ Amended
Motion to Dismiss Complaint for Lack of Subject Matter Jurisdiction and for Failure to
State a Claim” (D.E. 11). For the reasons set out below, the motion is DENIED.
A. The Court Has Subject Matter Jurisdiction
When a Rule 12(b)(1) motion is filed together with other Rule 12 motions, the
court should address the jurisdictional attack before addressing any attack on the merits.
Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001), cert. denied sub nom.,
Cloud v. United States, 536 U.S. 960 (2002). Federal Rule of Civil Procedure 12(b)(1)
requires dismissal for lack of subject matter jurisdiction if the Court lacks statutory or
constitutional power to adjudicate the case. Home Builders Ass'n of Miss., Inc. v. City of
Madison, 143 F.3d 1006, 1010 (5th Cir. 1998).
The burden of proof is on the party asserting jurisdiction—Windsor, here.
Ramming, 281 F.3d at 161. In examining a Rule 12(b)(1) motion, the district court is
empowered to consider matters of fact that may be in dispute. “Lack of subject matter
jurisdiction may be found in any one of three instances: (1) the complaint alone; (2) the
complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint
supplemented by undisputed facts plus the court's resolution of disputed facts.” Id.
(citing Barrera-Montenegro v. United States, 74 F.3d 657, 659 (5th Cir. 1996)).
Windsor filed this action claiming diversity jurisdiction under 28 U.S.C. § 1332.
It thus has the burden to demonstrate that there is diversity of citizenship between the
parties and the amount in controversy exceeds $75,000, exclusive of interest and costs.
Id. The parties do not dispute diverse citizenship, leaving the amount in controversy as
the only jurisdictional issue.
The Pyrons acknowledge that, ordinarily, mortgage cases involve a property
owner as plaintiff, seeking to enjoin a foreclosure. In that procedural posture, the amount
in controversy is the full value of the property, even if the loan amount in default is
significantly less. See e.g., Farkas v. GMAC Mortgage, L.L.C., 737 F.3d 338, 341 (5th
Cir. 2013). To the contrary, however, the Pyrons argue that when the lender is the
plaintiff, seeking to foreclose a lien on a property only to recover a debt, it is the amount
of the debt—not the value of the property—that governs the jurisdictional question.
Farmer’s Bank of Alexandria v. Hoof, 32 U.S. 167, 170 (1833); Sapphire Beach Resort &
Marina Condo. Ass'n Revocable Tr. v. Martin, No. CIV. 2007-13, 2008 WL 2074111, at
*3 (D.V.I. May 13, 2008).
Windsor does not dispute the Pyrons’ briefing. Instead, it argues that it has met
the test the Pyrons advance. In particular, the jurisdictional statement recites that the
amount of the debt, including attorney’s fees, exceeds the amount of $75,000, regardless
of the value of the property. Windsor alleges “The total debt owed of $67,713.31 plus
reasonable attorney’s fees through trial exceeds $75,000.” First Amended Complaint,
D.E. 7, ¶ 4. Attorney’s fees are included in the calculation and even half the amount
claimed ($10,000) still puts the amount in controversy over the threshold amount. See
Graham v. Henegar, 640 F.2d 732, 736 (5th Cir. 1981) (contractually authorized
attorney’s fees as damages are included in the amount in controversy).
The Pyrons’ challenge to Windsor’s pleading of the amount in controversy is
based on three exhibits. First, the Pyrons attach a copy of documents filed in a prior state
court foreclosure action that GMAC Mortgage, LLC brought on August 27, 2012, against
the Pyrons on the same note. They ask the Court to treat this material as a judicial
“Normally, factual assertions in pleadings and pretrial orders are considered to be
judicial admissions conclusively binding on the party who made them.”
ARCO/Polymers, Inc., 720 F.2d 1391, 1396 (5th Cir. 1983). Yet the Pyrons have offered
nothing to demonstrate how a pleading filed by GMAC constitutes a factual assertion by
Furthermore, “[J]udicial admissions are not conclusive and binding in a
separate case from the one in which the admissions were made.” Universal Am. Barge
Corp. v. J-Chem, Inc., 946 F.2d 1131, 1142 (5th Cir. 1991). The Pyrons have not
demonstrated that their first exhibit (D.E. 11-1) is admissible evidence.
Second, the Pyrons offer an amortization schedule derived from an apparent
They make no argument as to how this schedule is
There is no evidence regarding the reliability of the source and no
information regarding what data was input in order to generate the amortization schedule.
The Pyrons have not demonstrated that their second exhibit (D.E. 11-2) is admissible
Third, the Pyrons offer an undated copy of Windsor’s application for a foreclosure
order against the Pyrons in another state court action, reciting a payoff amount calculated
as of January 31, 2017. D.E. 11-3. They request the Court to take judicial notice of the
facts pled. Judicial notice is proper if the fact is “generally known” or “can be accurately
and readily determined from sources whose accuracy cannot reasonably be questioned.”
Fed. R. Evid. 201(b). Windsor’s calculation of the amount due is not such a fact. If the
Pyrons intended to offer the exhibit as a judicial admission, it is inadmissible as the
pleading derives from a separate proceedings. See Universal Am. Barge, supra. The
Pyrons have not demonstrated that their third exhibit (D.E. 11-3) is admissible evidence.
In addition to their exhibits, the Pyrons expound upon other reasons that
Windsor’s explanation of its amount in controversy cannot be true.
Each of those
reasons—the amount of late charges, lack of an escrow provision in the note, notices
required before taxes are paid, the use of a private property tax company rather than the
tax assessor, the amount of property taxes incurred—represent facts not in evidence and
subject to dispute. As such, they do not defeat Windsor’s jurisdictional allegations in this
case but rather go to the merits.
Windsor’s pleading explains why the Pyrons’ representation of the amount owed
on the note is incorrect: (a) a previous payoff amount of $53,188.26 is outdated; (b)
additional interest, fees, and expenses, including property taxes and foreclosure fees have
accrued; and (c) attorney’s fees are estimated to exceed $20,000 due to the Pyrons’ track
record of disputing the debt and refusing to pay. Id., ¶¶ 4-5. The amounts that Windsor
claims to be in controversy are supported by the Declaration of Bob Lewandowski (D.E.
14-1), which is in admissible form and sets out each category, totaling $67,713.31. The
Pyrons do not dispute that attorney’s fees in this case could amount to $20,000 as alleged
or at least rise to a level sufficient to render an amount in controversy over $75,000.
The Court finds that, on its face, the First Amended Complaint alleges an amount
in controversy in excess of $75,000. Alternatively, the Court considers the evidence of
record and finds that the amount in controversy exceeds $75,000, including reasonable
attorney’s fees and excluding interest and costs. Consequently, Windsor has satisfied its
burden to demonstrate the jurisdictional facts necessary to invoke the Court’s diversity
jurisdiction. The Court DENIES the Pyrons’ Rule 12(b)(1) motion.
B. Windsor Has Stated a Viable Claim
The Pyrons also seek dismissal under Rule 12(b)(6), claiming that Windsor has
not “established” its right to recover. At the Rule 12(b)(6) stage, Windsor need only
plead a plausible right to recover. Ashcroft v. Iqbal, 556 U.S. 662 (2009); Bell Atlantic
Corp. v. Twombly, 550 U.S. 544 (2007). The Pyrons have not identified any element of
Windsor’s claim that is not adequately pled.
After reviewing the First Amended
Complaint (D.E. 7), the Court is satisfied that Windsor has pled a claim upon which relief
may be granted. The Court DENIES the Pyrons’ Rule 12(b)(6) motion.
For the reasons set out above, the Court DENIES “Defendants’ Amended Motion
to Dismiss Complaint for Lack of Subject Matter Jurisdiction and for Failure to State a
Claim” (D.E. 11).
ORDERED this 26th day of September, 2017.
NELVA GONZALES RAMOS
UNITED STATES DISTRICT JUDGE
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