James et al v. Wells Fargo Bank, N.A.
Filing
19
MEMORANDUM OPINION AND ORDER denying 17 Opposed MOTION to Alter Judgment (Signed by Judge Sim Lake) Parties notified.(aboyd, 4)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
PERRY ALAN JAMES and
MARY LYNN JAMES,
§
§
§
§
§
§
§
§
§
§
Plaintiffs,
v.
WELLS FARGO BANK, N.A.,
Defendant.
CIVIL ACTION NO. H-14-0449
MEMORANDUM OPINION AND ORDER
Plaintiffs Perry Alan James and Mary Lynn James ("Plaintiffs")
brought
this
action
("Wells
Fargo")
against
alleging
defendant
causes
foreclosure of their home mortgage.
of
Wells
action
Fargo
Bank,
related
to
N .A.
the
Pending before the court is
Plaintiffs Perry Alan James and Mary Lynn James' Opposed Motion to
Alter or Amend the Judgment
Entry No.
17).
("Motion to Alter or Amend")
(Docket
In opposition to Plaintiffs' motion, Wells Fargo
has filed Defendant's Response in Opposition to Plaintiff's Motion
to Alter or Amend the Judgment
Entry No. 18).
("Defendant's Response")
(Docket
For the reasons explained below, Plaintiffs' Motion
to Alter or Amend will be denied.
I.
On February 6,
Wells
Fargo
in
2014,
the
Background
Plaintiffs brought this action against
284th
Judicial
District
Court
of
Montgomery
County,
No. 14-02-01392-CV. 1
On March 18,
Rule 12 (b) (6)
2014,
3
Texas,
where
it
was
filed
under
Cause
Wells Fargo removed the action to this court. 2
Wells Fargo filed a motion to dismiss under
On April 3, 2014,
Plaintiffs filed a motion for
extension of time to file a response to Wells Fargo's motion to
dismiss,4 which the court granted. s
On April 22, 2014, Plaintiffs
filed a second motion for extension of time to file a response,6
which the court granted. 7
lPlaintiffs' Original Petition, Exhibit B-2 to Defendant Wells
Fargo Bank, N.A.'s Notice of Removal Under 28 U.S.C. § 1441
("Notice of Removal"), Docket Entry No. 1-4; see also Register of
Actions, Exhibit B-1 to Notice of Removal, Docket Entry No. 1-3.
Page citations are to the pagination imprinted by the federal
court's electronic filing system at the top and right of the
document.
2Notice of Removal, Docket Entry NO.1.
3Defendant's Motion to Dismiss Pursuant to Rule 12{b) (6) and
Brief in Support ("Motion to Dismiss"), Docket Entry NO.6.
4Plaintiffs' Unopposed Motion to Extend Time to File a Response
to Defendant's Motion to Dismiss Pursuant to Rule 12(b) (6)
Docket
Entry No.7.
I
50 r der on Plaintiffs' Unopposed Motion to Extend Time to File
a
Response
to Defendant's Motion to Dismiss
Pursuant
to
Rule 12(b) (6), Docket Entry No.8.
6Plaintiffs' Second Unopposed Motion to Extend Time to File a
Response to Defendant's Motion to Dismiss Pursuant to Rule 12(b) (6),
Docket Entry No.9.
70 r der on Plaintiffs' Second Unopposed Motion to Extend Time
to File a Response to Defendant's Motion to Dismiss Pursuant to
Rule 12(b) (6), Docket Entry No. 10.
-2-
On April 28,
2014,
Plaintiffs filed a motion to substitute
counsel,S which the court granted on April 29, 2014. 9
filed
their
response
April 30, 2014. 10
to
Wells
Fargo's
Motion
to
Plaintiffs
Dismiss
on
Wells Fargo filed a reply on May 7, 2014.11
On
May 21, 2014, the court granted Wells Fargo's Motion to Dismiss and
dismissed the case with prejudice .12
On June 3, 2014, Plaintiffs filed the pending Motion to Alter
or Amend. 13
Plaintiffs allege that they intended to file a motion
for leave to file an amended complaint before the court entered
final
judgment,
pointing
to
the
following
language
in
their
Opposition to Wells Fargo's Motion to Dismiss:
Contemporaneously with the filing of this brief in
support of the opposition to Defendant's Motion to
Dismiss, Plaintiffs have filed a Motion for Leave to File
an Amended Complaint which supplements the previous
petition. Should th[e] Court grant the motion for leave,
Defendant's Motion to Dismiss would be rendered moot. 14
sUnopposed Motion for Substitution of Counsel, Docket Entry
No. 11.
90 r der
Substituting
Counsel
for
Plaintiffs,
Docket
Entry
No. 12.
l°Plaintiffs Perry Alan James and Mary Lynn James' Opposition
to Motion to Dismiss ("Plaintiffs' Opposition"), Docket Entry
No. 13.
11Defendant's Reply to Plaintiff's Response
Motion to Dismiss ("Reply"), Docket Entry No. 14.
12Memorandum Opinion and Order,
Judgment, Docket Entry No. 16.
to Defendant' s
Docket Entry No.
15 i
Final
13Motion to Alter or Amend, Docket Entry No. 17.
14Plaintiffs' Opposition, Docket Entry No. 13, p. 3
to Alter or Amend, Docket Entry No. 17, p. 3 ~ 14.
~
8; Motion
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_.-----_..._-----===",,==
Plaintiffs
Although
did
not
file
contemporaneously with their Opposition,
failure
to
do
so
should be
leave
for
motion
a
they contend that their
excused because
their
substituted
counsel did not receive notice of "the orders or other pleadings
filed in this action. ,,15
their
attorney
did
substituting counsel,
not
Specifically,
receive
Plaintiffs contend that
notice
of
Wells Fargo's Reply,
the
court's
order
or the entry of the
court's memorandum opinion and final judgment. 16
Plaintiffs request
that the court allow them to file an amended complaint, which they
have attached to their Motion to Alter or Amend. 17
On June 11,
2014, Wells Fargo filed a response to Plaintiffs' Motion to Alter
or Amend. 18
II.
Standard of Review
Generally, a court is not required to grant a motion to alter
or amend a
(1)
(2)
clearly
judgment
under Rule
establishes
a
59 (e)
manifest
unless
error
presents newly discovered evidence,
intervening change in the controlling law.
or
the
of
(3)
moving party
law
or
fact,
demonstrates an
Schiller v. Physicians
l5Motion to Alter or Amend, Docket Entry No. 17, p. 1
~
2.
l6Id. at 3 ~ 12 i Affidavit of James Nathan Overstreet,
Exhibit B to Motion to Alter or Amend, Docket Entry No. 17-2, p. 1.
l7Plaintiffs Perry Alan James and Mary Lynn James' First
Amended Complaint for Wrongful Foreclosure, Breach of Contract,
Fraud and For Declaratory Judgment ("First Amended Complaint"),
Exhibit A to Motion to Alter or Amend, Docket Entry No. 17-1.
l8Defendant's Response, Docket Entry No. 18.
-4-
Resource Group Inc., 342 F.3d 563, 567-68 (5th Cir. 2003)
(citing
Rosenzweig v. Azurix Corp., 332 F.3d 854, 863-64 (5th Cir. 2003)
i
In re Benjamin Moore & Co., 318 F.3d 626, 629 (5th Cir. 2002)).
A
motion under Rule 59(e)
could,
and should,
"'cannot be used to raise arguments which
have been made before the judgment issued.'"
Id. at 567 (quoting Rosenzweig, 332 F.3d at 863-64).
If the party moving under Rule 59(e) requests that the court
vacate its judgment in order to give it an opportunity to amend its
complaint, the trial court's discretion may be more constrained.
See Rosenzweig,
332
F. 3d at
864.
In such a
situation,
'''the
disposition of the plaintiff's motion to vacate under rule 59(e)
should be governed by the
same
considerations
exercise of discretion under rule 15 (a) .'
II
controlling the
Id.
at 864
(quoting
Dussouy v. Gulf Coast Inv. Corp., 660 F.2d 594, 597 n.1 (5th Cir.
1981) ) .
Rule 15 (a)
give [n]
provides that
. . when justice so requires.
This standard, however,
district
leave to amend should be "freely
court
1I
Fed. R. Civ. P. 15(a) (2).
"is tempered by the necessary power of a
to manage
a
case."
Schiller,
342
F. 3d at
566
(citing Shivangi v. Dean Witter Reynolds, Inc., 825 F.2d 885, 891
(5th Cir. 1987)).
"undue delay,
movant,
A court may deny leave to amend in the event of
bad faith or dilatory motive on the part of the
repeated
failure
to
cure
deficiencies
by
amendments
previously allowed, undue prejudice to the opposing party .
[or]
futility of amendment.
1I
.,
Foman v. Davis, 83 S. Ct. 227, 230
-5-
------------,-~----.
(1962) i accord Schiller, 342 F.3d at 566i Rosenzweig, 332 F.3d at
864.
Moreover, the court may deny a Rule 59(e) motion requesting
another opportunity to amend a complaint if the proposed amended
complaint
is
unavailable
"not based on newly discovered evidence that was
prior
to
the
district
court's
judgment
II
Schiller, 342 F.3d at 569 (citing Vielma v. Eureka Co., 218 F.3d
458, 468 (5th Cir. 2000)).
III.
Analysis
Plaintiffs argue that they "are entitled to have the judgment
altered or amended given that
leave was
amended complaint and the clerk of
requested
to
file
an
[the] court failed to provide
[their attorney] notices of the orders or other pleadings filed in
this action." 19
In their Opposition to wells Fargo's Motion to
Dismiss, Plaintiffs alleged that they had contemporaneously filed
a motion for leave to amend their complaint. 20
However, Plaintiffs
in fact did not file a motion for leave contemporaneously with
their Opposition.
Had Plaintiffs timely filed a motion for leave,
the court certainly would have considered it.
Plaintiffs had ample opportunity to file a motion for leave.
Indeed, the court did not rule on Wells Fargo's Motion to Dismiss
until
three
weeks
after
Plaintiffs
filed
their
Opposition.
Plaintiffs acknowledge that the court "did not need to consider a
19Motion to Alter or Amend, Docket Entry No. 17, p. 1
2°Plaintiffs' Opposition, Docket Entry No. 13, p. 3
~
~
2.
8.
-6-
._--_ _----_._------------ ._--...
perfunctory request for leave to amend without informing the court
of the substance of its proposed amendment or furnishing the court
with a proposed amended complaint.
1121
Plaintiffs' Opposition merely
indicated that Plaintiffs had "filed a Motion for Leave to File an
Amended Complaint which supplements the previous petition" 22 and did
not
explain
how
an
amendment
would
state
a
Indeed,
claim.
Plaintiffs acknowledge that they did not even file the referenced
mot ion for leave. 23
Plaintiffs
argue
that
their
failure
to
timely
file
their
motion for leave and proposed amended complaint should be excused
because their attorney did not receive notice of the court's order
substituting counsel,
court's
memorandum
the filing of Wells Fargo's Reply,
opinion
and
entry
of
final
or the
judgment.24
Plaintiffs allege that their attorney "only learned about the entry
of the final dismissal of this cause when attempting to file the
Motion for Leave to File an Amended Complaint on the evening of
June 2,
2014." 25
However,
as noted above,
Plaintiffs had ample
21Motion to Alter or Amend, Docket Entry No. 17, p. 4
22Plaintiffs' Opposition, Docket Entry No. 13, p. 3
~
23Motion to Alter or Amend, Docket Entry No. 17, p. 3
~~
~
17.
8.
13-14.
24Id. at 2-3 ~~ 11-14, 5 ~ 18; see also Affidavit of
James Nathan Overstreet, Exhibit B to Motion to Alter or Amend,
Docket Entry No. 17-2.
25Motion to Al ter or Amend, Docket Entry No. 17, p. 3 ~ 13; see
also Affidavit of James Nathan Overstreet, Exhibit B to Motion to
Alter or Amend, Docket Entry No. 17-2.
-7-
opportunity to file a motion for leave before the court ruled on
Wells Fargo's Motion to Dismiss, and they do not explain how their
lack of notice prevented them from doing so.
Fargo's Motion to Dismiss was fully briefed.
Moreover,
Wells
Plaintiffs filed an
opposition to the motion and nothing in the federal or local rules
entitled plaintiffs to file a sur-reply.
In addition, Plaintiffs' proposed First Amended Complaint does
not allege any "newly discovered evidence that was unavailable
prior to the district court's judgment.
at 569 (citing Vielma, 218 F.3d at 468).
"
Schiller, 342 F.3d
Plaintiffs re-urge their
claims for statutory fraud, common-law fraud, and their "action to
set aside the foreclosure sale. ,,26
As the court explained in its
Memorandum Opinion and Order, the statutory basis for Plaintiffs'
fraud claims does not apply to the facts of this case. 27
Although
Plaintiffs provide further factual enhancement to support their
common-law fraud claims, it does not appear that any of these facts
were unavailable prior to the court's judgment.
Schiller, 342 F.3d
at 569.
Plaintiffs do introduce new arguments to support their "action
to set aside the foreclosure," which are based on the so-called
split-the-note theory and the role of MERS in the assignment and
26Compare First Amended Complaint, Exhibit A to Motion to Al ter
or Amend, Docket Entry No. 17-1, pp. 16-18 ~~ 65-74, pp. 19-21
~~ 76-80, with Plaintiffs' Original Petition, Exhibit B-2 to Notice
of Removal, Docket Entry No. 1-4, pp. 3-4.
27Memorandum Opinion and Order, Docket Entry No. 15, pp. 9-10.
-8-
securitization
of
their
mortgage. 28
This
court
has
already
considered and rejected identical arguments in other cases.
See
Van Duzer v. U.S. Bank Nat. Ass'n, No. H-13-1398, 2014 WL 357878,
at
*6-8
Loans,
Dec.
No.
(S.D.
No.
20,
Jan.
H-13-0282,
2013)
H-13-0734,
2013).
Tex.
i
31,
2013
Morlock,
2014)
WL
i
Felder v.
6805843,
at
Countrywide Home
*15-19
(S.D.
L.L.C.
v.
JPMorgan Chase Bank,
2013 WL 5781240,
at
*11-13
(S.D.
Tex.
Tex.
N.A.,
Oct.
25,
Furthermore, the court dismissed Plaintiffs' "action to set
aside the foreclosure" because Plaintiffs failed to plead that they
had
tendered
Plaintiffs'
the
outstanding
balance
on
proposed First Amended Complaint
their
mortgage. 29
likewise fails
to
allege that Plaintiffs have tendered the outstanding balance on
their mortgage.
It would therefore be futile to allow the filing
of Plaintiffs' First Amended Complaint as to this issue.
Plaintiffs also allege
two new causes of action in their
proposed First Amended Complaint.
First, Plaintiffs allege a cause
of action for breach of contract. 30
However,
the court already
construed Plaintiffs' allegations concerning improper notice as a
claim for breach of contract and rejected such claim in its prior
Memorandum Opinion and Order. 31
To the extent that
Plaintiffs
28First Amended Complaint, Exhibit A to Motion to Alter or
Amend, Docket Entry No. 17-1, pp. 16-18 ~~ 65-74.
29Memorandum Opinion and Order, Docket Entry No. 15, pp. 20-21.
30First Amended Complaint, Exhibit A to Motion to Alter or
Amend, Docket Entry No. 17-1, pp. 14-15 ~~ 61-64.
31Memorandum Opinion and Order, Docket Entry No. 15, pp. 17-18.
-9-
allege additional
contract,
facts
to support
they have not
their claims
alleged that
any of
unavailable prior to the court's judgment.
for breach of
those
facts
were
See Schiller, 342 F.3d
at 569 ("Because the [proposed amended complaint] was not based on
newly
discovered
evidence
that
was
unavailable
prior
to
the
district court's judgment, we find that the district court did not
abuse
its
discretion
in
denying
[the
plaintiff's]
Rule
59(e)
motion. /I) •
Plaintiffs also assert that they intend to allege a cause of
action for "wrongful lockout n under
§
93.002 of the Texas Property
Code. 32 However, § 93.002 "applies only to the relationship between
landlords and tenants of commercial rental property./1
Code Ann.
§
93.001
(West)
properly construed under
§
92.0081
(West)
1556170,
recognizing a
at
§
92.0081.
allegations may be more
See Tex.
Prop.
Code Ann.
(governing exclusion of a residential tenant).
But see Ezennia v.
WL
Plaintiffs'
Tex. Prop.
*8
Wells Fargo Bank,
(S.D.
Tex.
Apr.
N.A.,
No.
H-10-5004,
2012
27,
2012)
( "Texas
cases
claim for wrongful eviction generally involve an
eviction of a tenant by a landlord./1 (citing McKenzie v. Carte, 385
S.W.2d 520, 528 (Tex. App.-Corpus Christi 1965, writ ref'd n.r.e.)
i
In re ACM-Tex, Inc., 430 B.R. 371, 417 (Bankr. W.D. Tex. 2010))),
appeal dism'd, No. 12-20787 (5th Cir. May 21, 2013)
i
Martinez-Bey
32First Amended Complaint, Exhibit A to Motion to Alter or
Amend, Docket Entry No. 17-1, p. 19 ~ 75.
-10-
v. Bank of Am.! N.A., No. 3:12-CV-4986-G BH, 2013 WL 3054000, at
*12 (N.D. Tex. June 18, 2013)
(dismissing a plaintiff's claim for
wrongful eviction in part because "the contract that he purportedly
. was a purchase contract and not a lease").
signed .
However,
Plaintiffs acknowledge that the factual basis for their "wrongful
lockout" cause of action was known to them prior to the court's
judgment. 33
a
Indeed, Plaintiffs' Original Petition alleged that "at
time when no
delinquency existed on the
loan
[Wells
Fargo]
without cause or justification locked the Plaintiffs out of the
property many months before the
[foreclosure]
sale." 34
The court
noted in its Memorandum Opinion and Order that Plaintiffs had "not
alleged
any
independent
allegations.,,35
them,
cause
of
action
related
to
these
Because the relevant facts were already known to
Plaintiffs could have filed their proposed First Amended
Complaint in response to Wells Fargo's Motion to Dismiss or at any
time during the
before
the
three weeks after they filed
court's
ruling.
Accordingly,
their Opposition
"plaintiffs
did
not
exercise diligence" and, therefore, should not be allowed to amend
their complaint now.
Rosenzweig, 332 F.3d at 865.
33Motion to Alter or Amend, Docket Entry No. 17, p. 6
~
11.
340riginal Petition, Exhibit B-2 to Notice of Removal, Docket
Entry No. 1-4, p. 3.
35Memorandum Opinion and Order,
n. 38.
-11-
Docket Entry No.
15, p.
14
IV.
Order
For the reasons explained above, Plaintiffs Perry Alan James
and Mary Lynn James' Opposed Motion to Alter or Amend the Judgment
(Docket Entry No. 17) is DENIED.
SIGNED at Houston, Texas, on this the 2nd day of July, 2014.
UNITED STATES DISTRICT JUDGE
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