Campos et al v. Ocwen Loan Servicing, L.L.C.

Filing 8

ORDER granting 3 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM Pursuant to FRCP 12(b)(6); Plaintiffs claims are DISMISSED with prejudice. (Signed by Judge Ewing Werlein, Jr) Parties notified.(kcarr, 4)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
NORBERTO CAMPOS and NICOLASA
CAMPOS,

§
§
§
§
§
§
§
§
§
§

Plaintiffs,
v.

OCWEN LOAN SERVICING, LLC,
Defendant.

CIVIL ACTION NO. H-13-2062

ORDER
Pending is Defendant Ocwen Loan Servicing,

LLC's Motion to

Dismiss for Failure to State a Claim Pursuant to Federal Rule of
Civil Procedure 12(b) (6)

(Document No.3).

Plaintiffs have filed

no response to the motion, and it is deemed unopposed pursuant to
Local

Rule

7.4.

("Plaintiffs")
77469

("the

Plaintiffs

Norberto

and

reside at 6630 Boss Gaston Road,

Property,,).l

Defendant

Nicolasa
Richmond,

Plaintiffs'

insurer

issued

Plaintiffs and Ocwen for damages
Hurricane

1

Ike. 3

Plaintiffs

a

check

to the

allege

Texas

Ocwen Loan Servicing,

("Ocwen") is the servicer of Plaintiffs' mortgage loan. 2
2013,

Campos

that

payable

LLC

In April

jointly

to

Property sustained in
Ocwen

has

refused

Document No. 1-2, ex. A-3 at 4 of 16 (Orig. Pet.).

to

release

the

check to them. 4

Plaintiffs bring this suit for a

declaratory judgment that the full amount of the check belongs to
them, predicated on their claim that the original loan paperwork
did not correctly describe their lot, that is, that their hurricane
damaged house is situated on a smaller tract adjacent to the lot
described in the mortgage documents,
effectively created on the house. s

and therefore no lien was

Ocwen moves to dismiss on the

grounds of res judicata, arguing that this Court's Final Judgment
in Campos v. u.s. Bank Nat'l Ass'n. et al., Civ. A. No. 4:12-cv02236 (S.D. Tex. Mar. 1, 2013)
~")

(Ellison, J.)

(hereinafter "Campos

bars this action. 6
Res judicata "bars the litigation of claims that either have

been litigated or should have been raised in an earlier suit."
Test Masters Educ. Servs., Inc. v. Singh, 428 F.3d 559, 571 (5th
cir.

2005).

judicata,

For a

claim to be barred on the grounds of

four elements must be satisfied:

(1)

res

the parties are

identical to, or in privity with, those in a prior action;

(2) the

prior judgment was rendered by a court of competent jurisdiction;
(3) the prior action ended with a final judgment on the merits; and
(4)

the same claim or cause of action is involved in both cases.
The

Id.

Fifth Circuit uses a

4

Id.

S

Id. at 5 of 16.

6

transactional

Document No.3.
2

test to determine

whether both suits involve the same cause of action.

Id.

"[I]f

the primary right and duty and the delict or wrong are the same in
each action, the cause of action is the same."
and Inv. Co., 512 F.2d 481, 483
In December 2011,

Hall v. Tower Land

(5th Cir. 1975).

Plaintiffs filed suit against U.S.

National Association ("U.S. Bank"),

Bank

the mortgagee of Plaintiffs'

home loan,7 and Ocwen, asking the Court to "prevent any foreclosure
of liens as held by any assignee of the original Deed of Trust
above described until it is fully decided what property is covered
for the loan and what part the house is located on."8

U.S. Bank

and Ocwen filed a motion to dismiss for failure to state a claim
upon which relief

can be granted. 9

Judge

Ellison granted the

motion on November 13, 2012, but gave Plaintiffs leave to amend. 10
Plaintiffs did not amend, and the Court signed a Final Judgment on
March 1, 2013, dismissing the case with prejudice. 11

7 Document NO.3 at 2.
8 Campos I, Document No. 1- 9, ex. A- 8 .
The Court takes
judicial notice of the pleadings and judgments rendered in Campos
~.
See Jefferson v. Lead Indus. Ass'n, Inc., 106 F.3d 1245, 1250
n.14 (5th Cir. 1997) (the court may take judicial notice of matters
of public record, such as court documents, in considering a Rule
12 (b) (6) motion)
9

Campos I, Document NO.4.

10 Campos I,
Document No. 23; Campos v. U.S. Bank Nat'l Ass'n,
Civ. A. No. 4:12-cv-2236, 2012 WL 5828619 (S.D. Tex. Nov. 13, 2012)
(Ellison, J.).

11

Campos I, Document No. 26.
3

The first element of res judicata is met because Plaintiffs
and Ocwen are the opposing parties in both Campos I and the present
action.

The next two elements were met by reason of this Court,

which had diversity jurisdiction over the parties, entering a final
judgment on the merits. 12

See Hall,

512 F.2d at 483

("[G]ranting

defendant's motion to dismiss for plaintiff's failure to state a
claim upon which relief can be granted operates as an adjudication
on the merits
order

states

."); FED. R. CIV. P. 41(b)
otherwise,

a

adjudication on the merits.")

("Unless the dismissal

dismissal

operates

as

an

Finally, the fourth element is met

because the same claim underlies both actions, namely, that Ocwen
does not have a valid lien on Plaintiffs' house because the house
is

not

situated

within

the

contained in the mortgage. 13

bounds
In the

of

the

legal

former action,

description
Plaintiffs

contended that Ocwen did not have a valid lien due to the erroneous
legal description of the Property and, therefore, Ocwen could not
foreclose on the Property; and in the instant action,

Plaintiffs

again allege that Ocwen does not have a valid lien due to the
erroneous legal description of the Property, and therefore, Ocwen
is not entitled to the insurance proceeds as mortgagee.

While

12
See Campos I , Document No. 23 at 7 - 9 ( finding that the
parties were completely diverse and the amount in controversy was
over $75,000); Campos I, Document No. 26.
13

Campos I, Document No. 1-9, ex. A-8.
4

Plaintiffs

focus on entitlement to the insurance proceeds,

identical underlying claim,
valid lien on Plaintiffs'

namely,
home,

that Ocwen does not have a

is the controlling issue.

Maxwell v. u.s. Bank Nat'l Ass'n,

the

civ. A. No.

265975, at *6 (S.D. Tex. Jan. 4, 2013)

H-12-534,

(Johnson, Mag. J.)

See

2013 WL
(finding

suit barred by res judicata where, "[d]espite alleging an array of
causes

of

action

in

the

three

legal

actions,

Plaintiff

has

steadfastly challenged Defendants and others' rights to foreclose
on his mortgage and sell his real property.").
Masters, 428 F.3d at 571

See

also Test

("Under the transactional test, a prior

judgment's preclusive effect extends to all rights of the plaintiff
with respect to all or any part of the transaction, or series of
connected transactions, out of which the original action arose.").
Accordingly, it is
ORDERED that Defendant Ocwen Loan Servicing, LLC's Motion to
Dismiss for Failure to State a Claim Pursuant to Federal Rule of
civil Procedure 12(b) (6)

(Document No.3) is GRANTED and Plaintiffs

Norberto and Nicolasa Campos's claims are DISMISSED with PREJUDICE.
The Clerk will enter this Order, providing a correct copy to
all counsel of record.
SIGNED in Houston, Texas, this

~Y of

October 2013.

(

WERLEIN,
STATES DISTRICT J
5