Hassell, Sr. v. U. S. Bank, National Association et al
Filing
23
MEMORANDUM AND ORDER granting 16 MOTION to Dismiss 12 Amended Complaint/Counterclaim/Crossclaim etc.; denying as moot 9 MOTION to Dismiss Plaintiff's Original Petition. (Signed by Judge Ewing Werlein, Jr) Parties notified.(kcarr, )
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
BILLY HASSELL, SR.,
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Plaintiff,
v.
BANK OF AMERICA, N.A., U.S.
BANK, N.A., AS TRUSTEE FOR
THE HOLDERS OF THE SPECIALTY
UNDERWRITING AND RESIDENTIAL
FINANCE TRUST, MORTGAGE LOAN
ASSET-BACKED CERTIFICATES,
SERIES 2006-3, and MACKIE,
WOLF, ZIENTZ & MANN, P.C.,
Defendants.
CIVIL ACTION NO. H-12-1530
MEMORANDUM AND ORDER
Pending is Defendants’ Motion to Dismiss Plaintiff’s First
Amended Complaint (Document No. 16).1
the
motion,
concludes
response,
that
the
reply,
Motion
and
should
After carefully considering
applicable
be
granted
law,
and
the
Court
Plaintiff’s
complaint should be dismissed.
I.
Background
Billy Hassell, Sr. (“Plaintiff”) filed this action after the
foreclosure and sale his home located at 24914 Mason Trail Drive,
1
Defendants’ Motion to Dismiss Plaintiff’s First Amended
Complaint supercedes Defendants’ Motion to Dismiss Plaintiff’s
Original Petition (Document No. 9), which is therefore DENIED as
moot.
Katy, Texas (“the Property”).2
He purchased the Property in 2006,
executing at that time a purchase money promissory note secured by
a Deed of Trust (“Mortgage”) on the Property in favor of Wilmington
Finance, Inc.3
Defendant U.S. Bank (“USB”) is the current holder
of the Note, and Defendant Bank of America, N.A., through its
entities BAC Loan Servicing, L.P. and BAC, (collectively “BAC”)
acts as the mortgagee servicer for the loan.4
After Plaintiff experienced financial reversals in 2009, he
“was unable to afford his mortgage payments.”5
By letter dated May
3, 2011, BAC notified Plaintiff that he was in “serious default” on
his loan and that he had until June 2, 2011 to cure by tendering
“good funds.”6
On or around June 7, 2011, Plaintiff received
2
Document No. 12 ¶ 6 (First Am. Complt.).
3
Document No. 16, ex. A at 1 (Deed of Trust).
4
See Document No. 12 ¶ 4.
5
Id. ¶ 6.
6
Document No. 16, ex. D at 3 of 6 (May 3, 2011 Notice of
Default).
Although Plaintiff does not attach to his complaint
either the Deed of Trust or the May 3, 2011 letter from BAC, he
refers to an undated “notice of default” and relies on the terms of
the Deed of Trust in his complaint.
See Document No. 12 ¶ 6
(“After receiving a notice of default with several options to cure
. . . .”); id. ¶ 8.
In his opposition to the instant motion,
Plaintiff argues that “even though Defendant supplied Plaintiff
with notices regarding the default, Plaintiff clearly alleged in
his complaint that despite these notices, Defendants cut him
off. . . .” Document No. 17 at 7 (emphasis added). Defendants
have exhibited the May 3, 2011 Notice of Default, which declares
Plaintiff’s loan in serious default, states Plaintiff’s right to
cure within 30 days (by June 2, 2011) by payment of $141,486.36,
plus additional sums accrued by the payment date; and, as pled by
2
another letter from BAC stating that “we want to help you find a
solution to
avoid
foreclosure”7
and
that
Plaintiff
had
until
July 7, 2011 “to contact BAC by telephone or else foreclosure could
occur.”8
The letter further stated that if Plaintiff wanted to be
considered for the cure options BAC outlined in the letter, he was
to send certain documents requested in the letter by June 21,
2011.9
Plaintiff claims that he called BAC before the deadline and
further
alleges
that
he
timely
submitted
the
paperwork
for
consideration under the Home Affordable Foreclosure Alternatives
Plaintiff, the Notice goes on to describe “various options that may
be available” from BAC to prevent a foreclosure sale. The Court
may consider documents referred to by Plaintiff in his complaint
which are central to his claim. See Collins v. Morgan Stanley Dean
Witter, 224 F.3d 496, 498-99 (5th Cir. 2000) (noting that a court
may look to documents attached to the pleadings in considering a
motion to dismiss, and further that “‘[d]ocuments that a defendant
attaches to a motion to dismiss are considered part of the
pleadings if they are referred to in the plaintiff’s complaint and
are central to her claim’” (quoting Venture Assocs. Corp. v. Zenith
Data Sys. Corp., 987 F.2d 429, 431 (7th Cir. 1993))); see also
CHARLES ALAN WRIGHT ET AL ., 5A FEDERAL PRACTICE AND PROCEDURE § 1327 at 43839 (3d ed. 2004)
(“[W]hen [a] plaintiff fails to introduce a
pertinent document as part of her pleading . . . [a] defendant may
introduce the document as an exhibit to a motion attacking the
sufficiency of the pleading; that certainly will be true if the
plaintiff has referred to the item in the complaint and it is
central to the affirmative case.”). Because both the May 3, 2011
Notice and the Deed of Trust are central to Plaintiff’s claim and
are referenced in the complaint, the Court considers them in the
analysis of Defendants’ motion.
7
Document No. 13 at 1 (June 7, 2011 letter).
8
Document No. 12 ¶ 10.
9
Document No. 13 at 2.
3
(HAFA)10 program for a HAFA short sale or, alternatively, a HAFA
Deed in Lieu of Foreclosure.11 BAC informed Plaintiff on August 11,
2011 that he was not eligible for either HAFA program because he
had not submitted all of the documents that it had requested.12
Thereafter Plaintiff “was assigned to an account representative at
BAC, who began assisting him in his collection and submission of
the appropriate documents for a modification of his loan [under
HAMP],” and who provided Plaintiff with extensions of the time so
that he could submit the requested paperwork.13
By October 18, 2011, however, BAC sent a notice to Plaintiff
informing him that it had initiated foreclosure proceedings.14
On
December 8, 2011, Notice of Substitute Trustee Sale was posted,
setting the date of sale for the property for January 3, 2012.15
10
HAFA is a sub-program of the Home Affordable Modification
Program (HAMP) that offers the options of a short-sale or a deedin-lieu of foreclosure to homeowners who can no longer afford their
mortgage payments. Nolasco v. CitiMortgage, Inc., Civ. A. No. H12-1875, 2012 WL 3648414, at *2 n.3 (S.D. Tex. Aug. 23, 2012)
(Miller, J.).
11
Id. ¶ 11; see also Document No. 13 (June 7, 2011 Letter
attached to Am. Complt.). The June 7, 2011 Letter also contained
information on how to apply for a loan modification under the Home
Affordable Modification Program (HAMP). See Document No. 13 at 2.
12
Document No. 12 ¶ 11.
13
Id. ¶ 12.
14
Id. ¶ 13.
15
Id.
4
This sale was postponed and posted again for February 7, 2012.16
Despite
alleged
assurances
from
BAC
representatives
that
the
February sale would also be postponed while BAC and Plaintiff
worked
on
a
loan
modification,
the
Property
was
sold
at
a
foreclosure sale on February 7, 2012.17
Plaintiff describes his claims against Defendants USB and
BAC (collectively, “Defendants”18) as: (1) breach of contract;
(2) defenses to acceleration and sale; (3) violation of Texas Debt
Collection
Act
(“TDCA”);
(4)
suit
to
quiet
title;
and
(5) declaratory judgment.
II.
Legal Standard
Rule 12(b)(6) provides for dismissal of an action for “failure
to state a claim upon which relief can be granted.”
12(b)(6).
FED . R. CIV . P.
When a district court reviews the sufficiency of a
complaint before it receives any evidence either by affidavit or
admission, its task is inevitably a limited one.
Rhodes, 94 S. Ct. 1683, 1686 (1974).
See Scheuer v.
The issue is not whether the
plaintiff ultimately will prevail, but whether the plaintiff is
entitled to offer evidence to support the claims.
16
Id. ¶ 15-16.
17
Id.
Id. ¶ 16.
18
Plaintiff’s Original Petition named three defendants, USB,
BAC, and Mackie, Wolf, Zientz, & Mann, P.C. Document No. 1, ex. 1.
On June 27, 2012, he voluntarily dismissed Mackie, Wolf, Zientz, &
Mann, P.C. (Document No. 10).
5
In considering a motion to dismiss under Rule 12(b)(6), the
district court must construe the allegations in the complaint
favorably to the pleader and must accept as true all well-pleaded
facts in the complaint.
See Lowrey v. Tex. A&M Univ. Sys.,
117 F.3d 242, 247 (5th Cir. 1997).
To survive dismissal, a
complaint must plead “enough facts to state a claim to relief that
is plausible on its face.”
1955, 1974 (2007).
Bell Atl. Corp. v. Twombly, 127 S. Ct.
“A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw the
reasonable
inference
misconduct alleged.”
(2009).
While
a
that
the
defendant
is
liable
for
the
Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949
complaint
“does
not
need
detailed
factual
allegations . . . [the] allegations must be enough to raise a right
to relief above the speculative level, on the assumption that all
the allegations in the complaint are true (even if doubtful in
fact).”
Twombly, 127 S. Ct. at 1964-65.
III.
A.
Discussion
Breach of Contract
The elements for a breach of contract under Texas law are as
follows: “(1) the existence of a valid contract; (2) performance or
tendered performance by the plaintiff; (3) breach of the contract
by the defendant; and (4) damages sustained by the plaintiff as a
result of the breach.”
Smith Int’l, Inc. v. Egle Group, LLC, 490
6
F.3d 380, 387 (5th Cir. 2007) (quoting Valero Mktg. & Supply Co. v.
Kalama Int’l, L.L.C., 51 S.W.3d 345, 351 (Tex. App.–-Houston [1st
Dist.] 2001, no pet.)).
Plaintiff alleges that Defendants breached the Deed of Trust
by not giving to Plaintiff the required notice of default, the
specific action that Plaintiff could take to remedy the default,
and a period of 30 days to complete the remedial action.
of
Trust
clause
that
Plaintiff
contends
was
breached
The Deed
is
the
following:
22. Acceleration; Remedies. Lender shall give notice to
Borrower prior to acceleration following Borrower’s
breach of any covenant or agreement in this Security
Instrument . . . . The notice shall specify: (a) the
default; (b) the action required to cure the default;
(c) a date, not less than 30 days from the date the
notice is given to Borrower, by which the default must be
cured; and (d) that failure to cure the default on or
before the date specified in the notice will result in
acceleration of the sums secured by this Security
Instrument and sale of the Property.
Document No. 16, ex. A ¶ 22.
Plaintiff points to the June 7, 2011 letter attached to his
amended complaint as an insufficient notice of default, etc., to
comply with the Deed of Trust.
Defendants in their motion,
however, exhibit Defendants’ previous Notice of Default letter sent
to Plaintiff dated May 3, 2011, which, as observed above, is
properly considered.19
19
In accordance with the Deed of Trust
See supra note 6.
7
proviso, BAC sent the May 3, 2011 letter by certified mail, and
Plaintiff signed the Domestic Return Receipt showing that he
received it on May 6, 2011.20
The May 3, 2011 letter unequivocally
stated that Plaintiff was in “serious default because the required
payments have not been made,” that the total amount required to
reinstate the loan was as of that date $141,486.36, that Plaintiff
had the right to cure the default by paying the foregoing sum, plus
other payments and charges that may by then have accrued, and that
Plaintiff had until June 2, 2011 to cure the default, which was a
full 30 days after the date of the Notice.
Plaintiff acknowledges
in his amended complaint that it was not until February 7, 2012
that
Defendants
foreclosed
on
the
property.21
Defendants’
subsequent forbearance for over seven months--during which time
Defendants’ unsuccessfully tried to accommodate Plaintiff through
HAMP programs and the like--does not operate as a waiver of their
right to foreclose, as the Deed of Trust expressly states: “Any
forbearance by Lender in exercising any right or remedy including,
without limitation, Lender’s acceptance of payments from third
persons . . . shall not be a waiver of or preclude the exercise of
any right or remedy.”22
Plaintiff thus fails to plead facts
sufficient to state a plausible claim that Defendants breached
20
Document No. 16, ex. D at 6 of 6.
21
Document No. 12 ¶ 15.
22
Document No. 16, ex. A ¶ 12 (emphasis added).
8
clause 22, the acceleration and remedies clause of the Deed of
Trust.
Plaintiff in the alternative pleads that Defendants breached
the Deed of Trust by conducting the foreclosure sale on February 7,
2012, because Defendants had told Plaintiff that the “posted sale
would also be extended to allow him to submit more documents by
that date.”23
Under Texas law, “a contract for the sale of real estate” must
be in writing.
TEX . BUS . & COM . CODE § 26.01(b)(4); Nguyen v. Yovan,
317 S.W.3d 261, 267 (Tex. App.--Houston [1st Dist.] 2009, pet.
denied)
(citation
omitted).
“Any
oral
agreement
allowing
a
homeowner to make payments and submit an application for a loan
modification to prevent the lender’s acceleration and foreclosure
of the property is barred by the statute of frauds.”
Torres v.
Bank of America, N.A., C.A. No. C-12-057, 2012 WL 4718368, at *4
(S.D. Tex. Sept. 10, 2012) (Owsley, Mag. J.) (citation omitted).
Again,
Plaintiff
plausible
breach
does
of
not
state
contract
facts
claim
sufficient
upon
which
to
relief
state
a
can
be
granted.
Plaintiff in his submissions essentially asks the Court to
recognize a claim that depends upon expansion of the Deed of Trust
to
require
that
the
Lender
not
foreclose
until
all
possible
alternative options have been exhausted, but the Deed of Trust does
23
Document No. 12 ¶ 21.
9
not require such and a breach of contract claim must allege
a breach of the contract as written.
See Brooks v. Ocwen Loan
Servicing, LLC, Civ. A. No. H-12-1410, 2012 WL 3069937, at *5 (S.D.
Tex. July 27, 2012) (Lake, J.) (declining to expand the Deed of
Trust to require the lender to “provide opportunity for [plaintiff]
‘to pursue the range of foreclosure alternatives’”); see also
Nolasco v. CitiMortgage, Inc., Civ. A. No. H-12-1875, 2012 WL
3648414, at *4 (S.D. Tex. Aug. 23, 2012) (Miller, J.) (“[T]he deed
of
trust
and
Texas
law
do
not
require
defendants
[plaintiff] with a list of cure options . . . .
provide
There is nothing
in the deed of trust or note granting [plaintiff], following her
default,
the
right
to
any
consideration . . . .”).
loan
modification,
let
alone
HAMP
Accordingly, Plaintiff’s breach of
contract claim will be dismissed.
B.
Defenses to Acceleration and Sale
Plaintiff claims that the doctrine of quasi-estoppel applies
as a defense to acceleration and sale.
a
party
from
asserting,
to
“Quasi-estoppel precludes
another’s
disadvantage,
inconsistent with a position previously taken.”
a
right
Lopez v. Munoz,
Hockema & Reed, L.L.P., 22 S.W.3d 857, 864 (Tex. 2000). “The
doctrine applies when it would be unconscionable to allow a person
to
maintain
a
position
inconsistent
with
one
acquiesced, or from which he accepted a benefit.”
10
to
Id.
which
he
Plaintiff
argues
that
Defendants
told
him
“that
the
foreclosure sale would not occur while he was working with [them]
to find a solution.”24
Plaintiff claims that Defendants led him to
believe that they “would work with him” to try to avoid foreclosure
and that if he had known that Defendants would not honor their
agreement he “would have sought chapter 13 bankruptcy in order to
retain his home.”25
Quasi-estoppel “is a defensive theory” and “does not create a
contract right that does not otherwise exist.”
Madeley, 626 S.W.2d 726, 734 (Tex. 1981).
Sun Oil Co. v.
As discussed above,
Plaintiff was not entitled to a loan modification or forbearance in
the contract, and oral promises for real estate transactions are
barred by the statute of frauds.
Plaintiff states no claim upon
which relief may be granted based on a quasi-estoppel theory.
C.
Texas Debt Collection Act
Plaintiff
alleges
that
Defendants
violated
sections
392.301(a)(8) and 392.304(a)(8) of the Texas Finance Code.26
24
Document No. 12 ¶ 38(b).
25
Id. ¶ 38(d).
26
Document No. 12 ¶¶ 24-27; Document No. 17 ¶ 16.
11
1.
Section 392.301(a)(8)
Plaintiff alleges that BAC and USB violated § 392.301(a)(8) of
the TDCA “when it threatened to take action to foreclose on the
property
without
considering
[Plaintiff]
for
HAMP
or
another
alternative action to cure, and when it threatened foreclosure
before it took the steps required in the deed of trust that gave
them the right to foreclose.”27
As fully discussed above, after
carefully considering the facts alleged in Plaintiff’s amended
complaint and the documents that are central to Plaintiff’s breach
of contract claims, it is clear that Defendants complied with the
Deed of Trust and were entitled to sell the mortgaged property at
foreclosure.
There is no violation under the TDCA for threatening
to do something a party has a legal right to do.
See TEX . FIN . CODE
§ 392.301(b)(3) (the TDCA does not prevent a debt collector from
“exercising or threatening to exercise a statutory or contractual
right of seizure, repossession, or sale that does not require court
proceedings”). Thus, Plaintiff has not alleged facts sufficient on
their
face
to
state
a
plausible
claim
of
violation upon which relief can be granted.
27
Document No. 12 ¶ 25.
12
a
§
392.301(a)(8)
2.
Section 392.304(a)(8)
Plaintiff
also
alleges
that
Defendants
violated
§ 392.304(a)(8), which makes it unlawful to “misrepresent the
character, extent, or amount of a consumer debt.”28
To violate the
TDCA using a misrepresentation, “the debt collector must have made
an affirmative statement that was false or misleading.”
Burr v.
JPMorgan Chase Bank, N.A., No. 4:11-CV–03519, 2012 WL 1059043, at
*7 (S.D. Tex. Mar. 28, 2012) (Hanks, Mag. J.) (emphasis added)
(quoting Bellaish v. Chase Home Fin., LLC, No. H–10–2791, 2011 WL
4902958, at *2 (S.D. Tex. Oct. 14, 2011) (Atlas, J.)).
does
not
allege
that
Defendants
made
an
Plaintiff
affirmative
misrepresentation about the amount of the debt and asserts only
that Defendants failed to provide a payoff quote.
“Refusing to
provide a payoff quote is not an affirmative misrepresentation of
the amount of debt.”
WL 1059043, at *7.
Nolasco, 2012 WL 3648414, at *6; Burr, 2012
Accordingly, Plaintiff does not state a claim
for which relief may be granted under §§ 392.304(a)(8).
D.
Suit to Quiet Title
In a suit to quiet title, Plaintiff must prove that he has a
right of ownership and that the adverse claim is a cloud on the
title that equity will remove.
28
Hahn v. Love, 321 S.W.3d 517, 531
TEX . FIN . CODE § 392.304(a)(8).
13
(Tex. App.--Houston [1st Dist.] 2009, pet. denied).
Plaintiff
“must allege right, title, or ownership in himself or herself with
sufficient certainty to enable the court to see he or she has a
right
of
ownership
that
will
warrant
judicial
interference.”
Wright v. Matthews, 26 S.W.3d 575, 578 (Tex. App.--Beaumont 2000,
pet. denied).
In sum, Plaintiff must recover on the strength of
his own title, not on the weakness of his adversary’s title.
Fricks v. Hancock, 45 S.W.3d 322, 327 (Tex. App.--Corpus Christi
2001, no pet.).
The facts pled by Plaintiff together with the documents
referred to that are central to Plaintiff’s claims demonstrate that
Plaintiff executed the Deed of Trust to secure payment of a
purchase money note, that Plaintiff fell into serious default, and
that Defendants sold the mortgaged property at foreclosure pursuant
to the Deed of Trust.
support
a
plausible
Plaintiff has not asserted facts that
claim
to
his
having
superior
title.
Accordingly, Plaintiff’s quiet title action will be dismissed.
E.
Declaratory Action
Plaintiff seeks a declaration that “the acceleration of the
note and referral to foreclosure was done in contravention of the
Security Agreement’s terms, and therefore should be decelerated and
any
reference
to
foreclosure
14
be
removed
from
all
credit
repositories.”29
This is Plaintiff’s failed breach of contract
claim recast as a declaratory judgment and, accordingly, it too
fails to state a claim upon which relief can be granted.
F.
Leave to Amend
Plaintiff has not filed a motion for leave to amend, but
summarily
requests
“additional
There
is
no
“leave
clarification
proposed
to
of
file
an
amended
Plaintiff’s
amendment
or
other
claims
complaint”
is
proffer
if
required.”
as
to
what
additional facts, if any, Plaintiff could plead to “clarify,” much
less to cure, the defects that are fatal to Plaintiff’s amended
complaint.
“‘[A] bare request in an opposition to a motion to
dismiss--without any indication of the particular grounds on which
the amendment is sought, cf. Fed. R. Civ. P. 7(b)--does not
constitute a motion within the contemplation of Rule 15(a).’” U.S.
ex rel. Willard v. Humana Health Plan of Texas Inc., 336 F.3d 375,
387 (5th Cir. 2003) (quoting Confederate Mem’l Ass’n, Inc. v.
Hines, 995 F.2d 295, 299 (D.C. Cir. 1993)).
Moreover, Plaintiff already has filed an amended complaint,
the one under consideration, which Plaintiff filed in response to
Defendant’s previous Rule 12(b)(6) motion to dismiss Plaintiff’s
original complaint.
Thus, Plaintiff has had full opportunity on
two occasions to plead a cause of action upon which relief can be
29
Document No. 12 ¶ 42.
15
granted.
There is no reason to believe that Plaintiff can improve
on
he
what
has
twice
unsuccessfully
attempted,
nor
should
Defendants bear the burden of having to file a third motion to
dismiss.
futile.
Accordingly, Plaintiff’s request to replead is denied as
Foman v. Davis, 83 S. Ct. 227, 230 (1962).
IV.
Order
For the foregoing reasons, it is
ORDERED that Defendants’ Motion to Dismiss Plaintiff’s First
Amended Complaint (Document No. 16) is GRANTED, and Plaintiff Billy
Hassell, Sr.’s claims against Defendants Bank of America, N.A. and
U.S. Bank, N.A. are DISMISSED with PREJUDICE.
The Clerk shall notify all parties and provide them with a
signed copy of this Order.
SIGNED at Houston, Texas, on this 18th day of January, 2013.
____________________________________
EWING WERLEIN, JR.
UNITED STATES DISTRICT JUDGE
16
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