Saucedo v. Rouhana et al
Filing
18
MEMORANDUM OPINION AND ORDER granting 7 , 8 MOTIONS TO DISMISS FOR FAILURE TO STATE A CLAIM. (Signed by Judge Kenneth M. Hoyt) Parties notified.(chorace)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
ARMANDO SAUCEDO,
Plaintiff,
vs.
ALAIN ROUHANA, et al.,
Defendants.
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CIVIL ACTION NO. 4:14-cv-2401
MEMORANDUM OPINION AND ORDER
I.
INTRODUCTION
Pending before the Court are the defendants, Alain Rouhana (“Rouhana”), and JPMorgan
Chase Bank, N.A. (“JPMC”) (Rouhana and JPMC, collectively the “defendants”), separatelyfiled motions to dismiss the plaintiff’s First Amended Complaint for failure to state a claim.
(Dkt. Nos. 7 & 8, respectively). The plaintiff, Armando Saucedo (the “plaintiff”), has filed a
belated response in opposition to the motions. (Dkt. No. 12). After having carefully considered
the motions, response, the pleadings, and the applicable law, the Court determines that the
defendants’ motions to dismiss should be GRANTED.
II.
FACTUAL BACKGROUND
This case concerns the plaintiff’s challenge to the July 1, 2014 foreclosure sale of the
property located at 30703 Coco Street, Cypress, Texas 77433. On or about September 24, 2008,
the plaintiff executed a Note payable to Freedom Mortgage Corporation. (Dkt. No. 1, Ex. 1; see
also Dkt. No. 6, ¶ 5). Simultaneously with the execution of the Note, the plaintiff executed a
Texas Home Equity Security Instrument (“Security Instrument”) encumbering the real property
located at 30703 Coco Street, Cypress, Texas 77433 (the “property”). (Id.) The Note and
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Security Instrument were subsequently assigned to JPMC, with JPMC acting as mortgage
servicer. (Dkt. No. 6, ¶ 6.).
Subsequently, the plaintiff began to experience financial difficulties and contacted JPMC
in an attempt to obtain a loan modification so as to avoid defaulting on his mortgage payments.
The plaintiff alleges that, during this time, he was advised by JPMC’s representatives that: (1)
JPMC would not take any action to foreclose on his property while the loan was in modification
status; and (2) an agreement memorializing the parties’ terms was being drafted
contemporaneously with the parties’ conversation. (See Dkt. No. 6, ¶ 8.) He also alleges that
JPMC even postponed a foreclosure sale in compliance with the parties’ agreement. (Id.) On
July 1, 2014, JPMC foreclosed on the property with Rouhana purchasing the property at the sale.
The plaintiff asserts that while awaiting confirmation of the loan modification agreement with
JPMC, he was served with a petition for forcible detainer by Rouhana. (Id. at ¶ 9.)
Consequently, on August 14, 2014, the plaintiff filed suit against JPMC and Rouhana in
the 215th Judicial District Court of Harris County, Texas to contest foreclosure of the property,
asserting claims for breach of contract, fraud, promissory estoppel, and attorneys’ fees. Rouhana
timely removed the case to this Court, which has subject matter jurisdiction pursuant to 28
U.S.C. § 1332.1 The defendants now move to dismiss the plaintiff’s claims for failure to state a
claim.
III.
STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(6) authorizes a defendant to move to dismiss for
“failure to state a claim upon which relief may be granted.” Fed. R. Civ. P. 12(b)(6). Under the
demanding strictures of a Rule 12(b)(6) motion, “[t]he plaintiff's complaint is to be construed in
a light most favorable to the plaintiff, and the allegations contained therein are to be taken as
1
The fair market value of the subject real property is estimated at $164,277.88. (See Dkt. No. 1)
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true.” Oppenheimer v. Prudential Sec., Inc., 94 F.3d 189, 194 (5th Cir. 1996) (citing Mitchell v.
McBryde, 944 F.2d 229, 230 (5th Cir. 1991)). Dismissal is appropriate only if, the “[f]actual
allegations [are not] 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).” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 1965, 167 L. Ed.2d 929 (2007).
Moreover, in light of Federal Rule of Civil Procedure 8(a)(2), “[s]pecific facts are not necessary;
the [factual allegations] need only ‘give the defendant fair notice of what the . . . claim is and the
grounds upon which it rests.” Erickson v. Pardus, 551 U.S. 89, 93, 127 S. Ct. 2197, 2200, 167
L. Ed.2d 1081 (2007) (per curiam) (quoting Twombly, 550 U.S. at 555, 127 S. Ct. at 1964).
Even so, “a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires
more than labels and conclusions, and a formulaic recitation of the elements of a cause of action
will not do.” Twombly, 550 U.S. at 555, 127 S. Ct. at 1964 - 65 (citing Papasan v. Allain, 478
U.S. 265, 286, 106 S. Ct. 2932, 92 L. Ed.2d 209 (1986)).
In Ashcroft v. Iqbal, the Supreme Court expounded upon the Twombly standard,
reasoning that “[t]o survive a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v.
Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949, 173 L. Ed.2d 868 (2009) (quoting Twombly, 550
U.S. at 570, 127 S. Ct. at 1974). “A claim has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Iqbal, 556 U.S. at 678, 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at
556, 127 S. Ct. at 1955). “But where the well-pleaded facts do not permit the court to infer more
than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show [n]’-‘that
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the pleader is entitled to relief.’” Iqbal, 556 U.S. at 679, 129 S. Ct. at 1950 (quoting Fed. R. Civ.
P. 8(a)(2)).
Nevertheless, when considering a 12(b)(6) motion to dismiss, the Court’s task is limited
to deciding whether the plaintiff is entitled to offer evidence in support of his or her claims, not
whether the plaintiff will eventually prevail. Twombly, 550 U.S. at 563, 127 S. Ct. at 1969 n.8
(citing Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S. Ct. 1683, 40 L. Ed.2d 90 (1974)); see also
Jones v. Greninger, 188 F.3d 322, 324 (5th Cir. 1999). In this regard, its review is limited to the
allegations in the complaint and to those documents attached to a defendant’s motion to dismiss
to the extent that those documents are referred to in the complaint and are central to the claims.
Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285, 288 (5th Cir. 2004). The Court may
also, however, “take judicial notice of documents in the public record . . . , and may consider
such documents in determining a motion to dismiss.” R2 Invs. LDC v. Phillips, 401 F.3d 638,
640 n. 2 (5th Cir. 2005) (citing Lovelace v. Software Spectrum Inc., 78 F.3d 1015, 1017 - 18 (5th
Cir. 1996). “Such documents should be considered only for the purpose of determining what
statements [they] contain, not to prove the truth of [their] contents.” Lovelace, 78 F.3d at 1018
(internal citation omitted). “If, based on the facts pleaded and judicially noticed, a successful
affirmative defense appears, then dismissal under Rule 12(b)(6) is proper.” Hall v. Hodgkins,
No. 08-40516, 2008 WL 5352000, *3 (5th Cir. Dec. 23, 2008) (citing Kansa Reinsurance Co.,
Ltd. v. Cong. Mortg. Corp. of Tex., 20 F.3d 1362, 1366 (5th Cir. 1994)).
IV.
ANALYSIS AND DISCUSSION
A.
The Plaintiff’s Breach of Contract Claim
The essential elements of a breach of contract claim under Texas law are: “(1) the
existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3)
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breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of
the breach.” Mullins v. TestAmerica, Inc., 564 F.3d 386, 418 (5th Cir. 2009) (quoting Aguiar v.
Segal, 167 S.W.3d 443, 450 (Tex. App.-Houston [14th Dist.] 2005, pet. denied)).
In his First Amended Complaint, the plaintiff alleges that JPMC breached an oral
agreement not to foreclose on the property while his loan was being considered for
modification.2 Nevertheless, the plaintiff has failed to set forth facts sufficient to support the
existence of a valid oral contract with JPMC. Additionally, even assuming the existence of a
valid oral agreement between the parties, the statute of frauds applies to preclude its
enforcement.
Under Texas law “[a] loan agreement in which the amount involved . . . exceeds $50,000
in value is not enforceable unless the agreement is in writing and signed by the party to be bound
or by that party’s authorized representative.” See Tex. Bus. & Comm. Code § 26.02(a)(2) & (b).
The term “‘[l]oan agreement’ means one or more promises, promissory notes, agreements,
undertakings, security agreements, deeds of trust . . . or any combination of those actions or
documents, pursuant to which a financial institution loans or delays repayment of or agrees to
loan or delay repayment . . . .” Tex. Bus. & Com. Code § 26.02(a)(2).
“When a modification encompasses or relates to a matter that must be in writing, the
modification is unenforceable unless it is also in writing.” Deuley v. Chase Home Fin. LLC, No.
H-05-04253, 2006 WL 1155230 at *2 (S.D. Tex. April 26, 2006) (citing Garcia v. Karam, 276
S.W.2d 255, 257 (Tex. 1955)). Accordingly, since the Note and Security Instrument in this case
2
In his response to the defendants’ motion to dismiss, the plaintiff also attempts to assert an estoppel-by-waiver
exception to the statute of frauds. Specifically, the plaintiff contends that he “is not strictly seeking to enforce the
oral agreement to modify the loan [but] . . . he is also asserting a more limited claim that [JPMC] cannot assert that
he is in default under the original loan because it was [JPMC]’s representations that induced the default.” (Dkt. No.
12 at 1). Notwithstanding the fact that this argument is not properly before the Court, the Court, nevertheless,
remains unpersuaded by the plaintiff’s argument in this regard and finds it unavailing. See Ndukwe v. HSBC Bank
USA, N.A., Civil Action No. H-14-400, 2014 WL 1653088, *5 (S.D. Tex. April 24, 2014) (reasoning that the oral
promises alleged by the plaintiff do not waive the statute of frauds’ requirement).
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constitute a loan agreement and are for $150,000, they are subject to the statute of frauds.
Likewise, because the plaintiff’s alleged oral loan modification relates to the Note and Security
Instrument, it must also be in writing in order to comply with the statute of frauds. Therefore,
the defendants are entitled to a dismissal of the plaintiff’s breach of contract claim as it is barred
by the statute of frauds.
B.
The Plaintiff’s Fraud Claim
“To prevail on a fraud claim under Texas law a plaintiff must prove that (1) the
defendant made a material representation that was false; (2) the defendant knew the
representation was false or made it recklessly as a positive assertion without any knowledge of
its truth; (3) the defendant intended to induce the plaintiff to act upon the representation; (4) the
plaintiff actually and justifiably relied upon the representation; and (5) the plaintiff thereby
suffered an injury.” Felder v. Countrywide Home Loans, No. H-13-0282, 2013 WL 6805843,
*19 - 20 (S.D. Tex. Dec. 20, 2013) (citing Ernst & Young, L.L.P. v. Pacific Mut. Life. Ins. Co.,
51 S.W.2d 573, 577 (Tex. 2001)). Further, “Rule 9(b) requires that plaintiffs plead enough facts
to illustrate ‘the ‘who, what, when, where, and how’ of the alleged fraud.’” Carroll v. Fort
James Corp., 470 F.3d 1171, 1174 (5th Cir. 2005) (citing Williams v. Bell Helicopter Textron,
Inc., 417 F.3d 450, 453 (5th Cir. 2005) (quoting United States ex rel. Thompson v.
Columbia/HCA Healthcare Corp., 125 F.3d 899, 903 (5th Cir. 1997)).
In his First Amended Complaint, the plaintiff asserts that JPMC made false
representations to him when informing him that it would not take any action to foreclose on the
property while they researched and resolved his situation. These vague allegations, without
more, fail to satisfy the particularity requirements mandated by Rule 9(b) for fraud claims.
Simply put, vague references to JPMC’s representatives and statements that they purportedly
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made subsequent to any oral agreement will not suffice. Indeed, the plaintiff has not only failed
to plead the “time, place, and contents of the false representations” but he has also failed to
provide the identity of the individuals making these misrepresentations. Shushany v. Allwaste,
Inc., 992 F.2d 517, 520 (5th Cir. 1993) (citing Tel–Phonic Services, Inc. v. TBS Int'l, Inc., 975
F.2d 1134, 1139 (5th Cir. 1992) (“At a minimum, Rule 9(b) requires allegations of the
particulars of time, place, and contents of the false representations, as well as the identity of the
person making the misrepresentation and what he obtained thereby.”)). Thus, the defendants are
entitled to a dismissal of the plaintiff’s fraud claim for failure to state a claim.
C.
The Plaintiff’s Promissory Estoppel Claim
Generally, “[t]he elements of a promissory-estoppel claim are (1) a promise; (2)
foreseeability of reliance by the promisor; (3) actual, substantial, and reasonable reliance by the
promisee to its detriment; and (4) injustice that can be avoided only by enforcement of the
promise.” Ellen v. F.H. Partners, LLC, No. 03-09-00310-CV, 2010 WL 4909973, at *4 (Tex.
App. –Austin Dec. 1, 2010, no pet.) (citing In re Weekley Homes, L.P., 180 S.W.3d 127, 133
(Tex. 2005)). “For promissory estoppel to create an exception to the statute of frauds [however],
there must have been a promise to sign a written agreement that had been prepared and that
would satisfy the requirement of the statute of frauds.” 1001 McKinney Ltd. v. Credit Suisse
First Boston Mortg. Capital, 192 S.W.3d 20, 29 (Tex. App.-Houston [14th Dist.] 2005, pet.
denied) (citing Nagle v. Nagle, 633 S.W.2d 796, 800 (Tex. 1982)); see also Williams v. Wells
Fargo Bank, N.A., No. 13–10233, 2014 WL 1044304 (5th Cir. Mar. 19, 2014) (internal citations
and quotations omitted) (“The claim that Wells Fargo said the Williamses had been approved for
a modification . . . does not include an allegation that there was a modification agreement that
had already been prepared or whose wording had been agreed upon that would satisfy the statute
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of frauds.”). In other words, “[p]romissory estoppel sufficient to remove a contract from the
statute of frauds requires that the promisor agree to sign a document that had already been
prepared or ‘whose wording had been agreed upon’ that would satisfy the statute of frauds.”
1001 McKinney Ltd., 192 S.W.3d at 29 (citing Southmark Corp. v. Life Investors, Inc., 851 F.2d
763, 769 (5th Cir. 1988)).
Here, the promissory-estoppel exception to the statute of frauds does not apply as the
plaintiff has only alleged the existence of an oral agreement and has failed to allege that JPMC
agreed or promised to sign an existing agreement related to a loan modification sufficient to
satisfy the statute of frauds. See George–Baunchand v. Wells Fargo Home Mortg., Inc., No. H10–3828, 2011 WL 6250785, at *7 (S.D. Tex. Dec. 14, 2011) (quoting Beta Drilling, Inc. v.
Durkee, 821 S.W.2d 739, 741 (Tex. App.-Houston [14th Dist.] 1992, writ denied) (“A promise to
prepare a written contract is not sufficient.
The defendant must have promised to sign a
particular agreement which was in writing at the time.”). Thus, the Court concludes that the
defendants are entitled to a dismissal of the plaintiff’s promissory estoppel claim.
D.
The Plaintiff’s Claim for Attorney’s Fees
“As a general rule, attorney’s fees are not recoverable in Texas unless provided for by
contract or by statute.” Lopez v. Los Cielos Homeowners Ass’n, Inc., No. 11–11–00102–CV,
2013 WL 1636433, at *2 (Tex. App.-Eastland Apr. 11, 2013, no pet.) (citing Dallas Cent.
Appraisal Dist. v. Seven Inv. Co., 835 S.W.2d 75, 77 (Tex. 1992)). The Texas Civil Practice &
Remedies Code “provides that reasonable attorney’s fees may be recovered in certain types of
suits, such as suits on a sworn account or a written contract.” Id. (citing Tex. Civ. Prac. & Rem.
Code § 38.001). In order to recover attorney’s fees pursuant to § 38.001, “a party must (1)
prevail on a cause of action for which attorney’s fees are recoverable, and (2) recover damages.”
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Bennigan’s Franchising Co., LLC v. Team Irish, Inc., No. 3:11–CV–0364–D, 2011 WL
3903068, at *3 (N. D. Tex. Sept. 6, 2011) (internal citation omitted). Because the plaintiff has
failed to allege a viable cause of action, his request for attorney’s fees is also denied. Id.
V.
CONCLUSION
Based on the foregoing analysis and discussion, the defendants’ motions to dismiss are
GRANTED. Further, since under the facts of this case, any amendment would be futile, the
dismissal is with prejudice and without leave to amend.
It is so ORDERED.
SIGNED on this 4th day of August, 2015.
___________________________________
Kenneth M. Hoyt
United States District Judge
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