Gaviola et al v. JP Morgan Chase Bank, N.A. et al

Filing 16

MEMORANDUM OPINION AND ORDER granting 7 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM AND BRIEF IN SUPPORT. (Signed by Judge Sim Lake) Parties notified.(gclair, 4)

United States District Court
Southern District of Texas

ENTERED
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

June 23, 2016
David J. Bradley, Clerk

RENE GAVIOLA and MARIEVIC
GAVIOLA ,

Plaintiffs,
CIVIL ACTION NO . H -16-0725

V.
N

JP MORGAN CHASE BANK , N . . and
A
WELL S FARG O BA NK NA T IONA L
ASSOCIATION , AS TRUSTEE FOR
CARRINGTON MORTGAGE LOAN TRUST ,
SERIES 20O7-FRE1, ASSET-BACKED
PASS-THROUGH CERTIFICATES,
Defendants .

MEMORANDUM OPINION AND ORDER

Plaintiffs Rene Gaviola and Marievic Gaviola (nplaintiffs' or
'
the 'Gaviolas/ filed this action against defendants JpMorgan Chase
'
')

Bank, N. . (uchase' and Wells Fargo Bank National Association, as
A
'l
Trustee for Carrington Mortgage Loan Trust, Series 2OO7-FRE1,

Asset-Backed Pass-Through Certificates C'
Wells Fargo') (
' together,
u
Defendants'
')
County , Texas x

the 270th Judicial District Court
The case was transferred

Harris

the 295th Judicial

District Court of Harris County , Texas, and Defendants removed

l
see Plaintiff's Original Petition (npetition'), Exhibit A-3
'
to Defendants ' Notice of Removal, Docket Entry No . 1-1 , p . 9 .

to this court .z Pending before the court is Defendants' Motion

Dismiss Amended Comp laint for Failure to State a Cla im and Brief in

Support (u
Motion

Dismiss') (
'
Docket Entry

the

reasons stated below , the Motion to Dism iss will be granted , and

this action will be dismissed with prejudice.
1.

Factual Alleqations and Procedural Backqround

Plaintiffs allege the following facts . On November l6, 2006 ,

Plaintiffs obtained a home equ ity loan on their home located at

12223 Vista Bay Lane, Houston, Texas, 77041 (
the 'Property' x
'
o

EMC

Mortgage Corporation ('EMC' serviced the mortgage at the time, but
'
')
Chase transferred the residential loan servicing rights
on April

itself

usince 2008 Plaintiffs were p lagued by EMC'S

failure to post payments and credits

the account , including

's
escrow amounts, in a timely and accurate manner .'

The mortgage

was allegedly in ntechnical default' as early as September
'

for unpaid escrow advances .6

2008,

February and March of 2011 ,

2See Transfer Order , Exhib it A -5 to Defendants' Notice of
Removal , Docket Entry No . 1-1, p . 34 ; Defendants' Notice of
Removal , Docket Entry No . 1 .

3
See First Amended Complaint (n
Amended Complaint' , Docket
o

Entry No. 5, p. 2 $ 7.
Asee id .; Consent Order, In the Matter of JpMorqan Chase & Co .

and EMC Mortqaqe Corroration

(uconsent Order'
'), Exhibit 1 to

Amended Comp laint , Docket Entry No . 5-1, p . 3 .
ssee Amended Complaint , Docket Entry

5, p .

6
see id. (
citing Chase Detailed Transaction History, Exhibit
(
continued - .)

$227,615.
42 each x

Plaintiffs made two payments

There was no

indication that EMC applied those payments to the debt .8

Chase

became the mortgage servicer after the account was allegedly

arrears, which Plaintiffs assert qualifies Chase as a third-party
debt

collector .g

EMC

and

Chase

b0th

purchased

force-placed

insurance for the Property even though Plaintiffs had adequate

insurance x o

Chase has refused to audit Plaintiffs ' account

co r rect e rror s .ll

On June 2O, 2013, Wells Fargo filed a Rule 736 Application for

Foreclosure in the 295th Judicial District Court of Harris County ,

Texas x z

Plaintiffs never

received

serv ice

the Rule

Application , and there is no proof that the required citations were

placed for postal delivery x 3

The court signed a default order

Et- .
continued)
2 to Amended Complaint, Docket Entry No .

lsee id. at 3 $ 8.
o
H see id .

lId. j 9; see also Application for Court Order Allowing
2
Foreclosure of a Lien Securing a Home Equity Loan Under Texas

Constitution Article XVI, Section 5O( (
a) 6), in Cause No. 2013-36693
(uForeclosure Application'), Exhibit A to Motion to Dismiss, Docket
'
Entry No . 7-1 .
l
3see Amended Complaint , Docket Entry No . 5 , p .

allowing foreclosure on September l8 , 2013 .1
4

Unaware of Wells

Fargo's default judgment, Plaintiffs unsuccessfully attempted to
resolve the alleged arrearage severa l times by phone x s

Chase

responded to Plaintiffs ' written request ufor accurate information
regarding the statu s of the mortgage payments and amounts allegedly
owed'
'

a letter dated November

2015.1
6

Chase's response

îcontained false and misleading information which m isrepresented
'
the amount owed .' ? Plaintiffs received a letter dated February 8,
'l
2016, from Buckley Madole , P .C ., stating that the Property would be
sold at a foreclosure sale on Tuesday , March 1, 2016 .1
5
Plaintiffs filed the Petition on February

2016, and the

First Amended Complaint on April 14, 2016, after Defendants removed

the case to this court x g Plaintiffs assert claims for violation
the Fair Debt Collection Practices Act and the Texas Debt
Collection Act .2
O

l4Id

z zu. j
s
!
l .
6Id

See also November 1l , 2015 , Letter from Chase to Rene
Gaviola C'
Letter'
zl, Exhibit B to Motion to Dismiss, Docket Entry
No . 7-2, pp . 1-3 .

l7
see Amended Complaintz Docket Entry No . 5,

! lO.

18 .
yd

l9
see Petition , Exhib it A -3 to Defendants ' Notice of Removal,
Docket Entry No . 1-1, p . 9; Amended Comp laint , Docket Entry No . 5.
zo
see

$$ 11-14.

Amended Complaint, Docket Entry No .

pp . 3-4

II .

Standard of Review

Under Rule 8 of the Federal Rules of Civil Procedure , a
pleading must contain

short and plain statement of

claim

showing that the pleader is entitled to relief .' Fed . R . Civ .
'

8( 2).
a)(

Rule 12( 6) motion tests the formal sufficiency of
b)(

the pleadings and is nappropriate when a defendant attacks the
complaint because it fails

state a legally cognizable claim .'
'

Ramming v . United States, 28l F . 158, 16l (
3d
5th Cir . 2001), cert.
denied sub nom . Cloud v . United States,

2665 (
2002)

The court must accept the factual allegations of the comp laint as
true , view them in a light most favorable to the plaintiff, and

draw a1l reasonable inferences in the plaintiff 's favor .
defeat a motion

dismiss pursuant

Id .

Rule 12 (
b)(6), a

plaintiff must p lead uenough facts to state a claim to relief that

is p lausible on its face .'
'

S.

1955, 1974 (
2007)

Bell Atlantic Corp . v . Twomblv ,

hA claim has facial plausibility when
'

the p laintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liab le for the
misconduct alleged .'
'

Ashcroft v . Igbal,

1937, 1949

(
2009) (
citing Twombly, l27 S. Ct. at 1965).

'The plausibility
'

standard is not akin to a 'probability requirementz'
for more than a sheer possibility that

unlawfully .' Id . (
'
quoùing Twombly,
complaint

pleads

defendant 's

facts

liability ,

that

are

'stops

it asks

defendant has acted

Ct. at 1965). n
Where a
'merely
short

consistent
the

line

with '

a

between

possibility and p lau sibility of entitlement to relief .''
'

Id .

(
quoting Twombly, l27 S. Ct . at 1966).
When considering a motion to dismiss, courts are ulim ited to
the complaint, any documents attached to the comp laint , and any
documents attached to the motion to dism iss that are central to the

claim and referenced by the complaint.' Lone Star Fund V ( .
'
U S.),

L.
P. v . Barclays Bank PLC,

F.
3d 383,

(5th

2010).

Documents attached to a motion to dism iss are considered part of

the pleadings if they are referred to in the p laintiffs' complaint
and

are central to their claim .

Causey v . Sewell Cadillac-

Chevrolet, Inc w 394 F.3d 285, 288 (
5th Cir . 2004) (
citing Collins
v . Morgan Stanley Dean Witter, 224 F .
3d 496, 498-99 (5th

2000))

The court may also consider ldocuments incorporated into
l

the complaint by reference , and matters

which a court may take

judicial notice.' Funk v. Stryker Corpw
'

F.
3d

2011) (
quoting Tellabs, Inc . v . Makor Issues & Rights, Ltd w
2499, 2509 (
2007)); see also Lovelace v . Software
Spectrum , Inc w

F .3d 1015, 1017-18

1996).

Under Federal Rule of Ev idence 2O1 ( )
b

' tlhe court may
'E

judicially notice a fact that is not subject to reasonable dispute
because

can be accurately and readily determ ined from

sources whose accuracy cannot reasonably be questioned .'
'

State

court documents are the proper subject of judicial notice. See 33O
Cedron Trust v . Citimortgage , Inc w

XR, 2015 WL 1566058, at

Action No . SA -14-CV -933-

( . . Tex . April
W D
-

6-

2015) (
taking

matter of

judicial notice of state court documents uthat are
a motion

public record' attached
'

dism iss and notice of

removal by the defendant bank in a mortgage foreclosure case);
Joseph v . Bach & Wasserman , L .L .C ., 487 F . App 'x

178 n . (
2 5th

2012) (
unpublished) (
taking judicial notice of nthe document
referenced' because
'

district court

ua p leading filed with a Lou isiana

is a matter

state

public record.' (
' citations

omittedl); Morlock, L. .
L C. v . JpMorgan Chase Bank, N . .,
A
Action No . H-13-0734, 2013 WL 5781240, at

( D . Tex . Oct.
S.

2013).

Defendants ask that the Court take judicial notice of:
Foreclosure Application (
Exhibit A to Motion
Entry No. 7-1)7 and

the

D ism iss, Docket

the Letter (
Exhibit B to Motion to Dismiss,

Docket Entry No . 7-2)

A

state court document

a

related

proceeding is a matter of public record and the proper subject of
judicial notice.

The court takes judicial notice

Foreclosure Application .zl Because the Letter is referenced in the
Amended Comp laint , partially attached thereto , and central to one
of Plaintiffs ' claims , the court may also consider 1: .2
2

z plaintiffs do not object.
l
22
The Chase Detailed Transaction History is included with the
Letter , and one page of it is attached to the Amended Complaint as
Exhibit 2 , Docket Entry No . 5-2 . Compare Letter, Exhibit B to

Motion to Dismiss, Docket Entry No. 7-2, p . 66 (
the page Plaintiffs
attached to the Amended Complaint).

111.

A.

Analysis

Fair Debt Collection Practices Act

Count One alleges that

nE
chaseq violated the FDCPA by

misrepresenting the amount and character

debt.

U.
S.C. 5

1692e ( A-B).
2)(

the alleged mortgage

Specifically,

(
Chase)

misrepresented the amounts of principal, escrow , interest, and fees

'z
owed under the terms of the mortgage .' 3 The Fair Debt Collection

Practices Act (BFDCPA' , 15 U . . 5 1692e ( (
Q
S C.
2) A)- (
B), provides:
A debt collector may not use any false , deceptive, or
misleading representation or means in connection with the
collection of any debt . Without limiting the general
application of the foregoing , the following conduct is a
violation of this section :
The false representation of--

( ) the character, amount, or legal status of any
A
debt; or

( any services rendered or compensation which may
B)
be lawfu lly received by any debt collector for the
collection of a debt .
Defendants argue that Plaintiffs have failed to allege any
misconduct by Defendants

non -conclusory manner .2 Plaintiffs
4

respond that

MAmended Complaint, Docket Entry No. 5, pp. 3-4 f 12. Count
One is labeled nTexas Civ il Practice & Remedies Code Section
12 .002 .' 'A person may not make , present, or u se a document or
' '

other record with : ( knowledge that the document or other record
1)
is a fraudulent court record or a fraudulent lien or claim against
real or personal property or an interest in real or personal

property .' Tex . Civ . Prac. & Rem . Code 5 l2.OO2 ( 1).
'
a)(
24
see Motion to Dismiss, Docket Entry No .

pp . 3-4 .

E
chase) made misleading statements and misrepresentations
regarding the amount of money actually paid and owed by

Plaintiffs as shown in the Chase Detailed Transaction E
)
History (
Doc . 7-2, p . 50-66). The mere fact that (
Chase)
insists its records are correct does make it so at this
point in litigation .
It is certainly p lausib le that

E
chase) made errors in its application of funds paid by
Plaintiffs .
Dismissal at this time would deprive
Plaintiffs of the opportunity to provq the claim in the
Court . For the foregoing reasons Defendant 's motion to
dism iss must be denied .2
5
Plaintiffs attach one page of the Chase Detailed Transaction
History

for their loan

Amended Comp laint, but do not

indicate what false or m isleading information is contained therein

or in any other correspondence w ith Chase .2
6

their Response ,

Plaintiffs cite multiple pages of the Chase Detailed Transaction
History , attached

full to the Motion to Dism iss, but fail to

offer any indication of how the information in

incorrect .

Plaintiffs cite Rob inson v . BA C Home Loan Servicinq, LP , Civ .

Action No . H-lO-S168, 2011 WL 2490601, at *2 ( . Tex . June
S D.
2011), 7 where
2

the

plaintiff

alleged

violations of

multiple

z
splaintiffs' Response in Opposition to Defendants ' Motion to
Dismiss Amended Complaint for Failure to State a Claim and Brief in

Support (nplaintiffs' Response' , Docket Entry No . 1O, p . 2
o
(
citations omitted). This is the entirety of Plaintiffs' response
with respect to th is argument by Chase .
2
6see Amended Comp laint , Docket Entry No . 5, p. 3 ! 1O; Chase
Detailed Transaction History , Exhibit 2 to Amen ded complaint #
Docket Entry No . 5-2 .
2
7see Plaintiffs ' Response , Docket Entry No . 10, p . 2 .
Plaintiffs cite page 5 , wh ich discusses state law claims , without
exp lanation .

subsections

1692e based on a lqtter that the plaintiff alleged

represented

uaccounting

misrepresentation .'
'

Id .

fraud'
'

and

a

'material
'

The letter was from a law firm

acting on behalf of defendant BAC Home Loan Serv icing , LP and
stated that the firm had been retained by BAC , that the firm had

commenced a foreclosure action against the plaintiff's home and
that the letter was an attempt to collect a purported debt owed to
BAC .

Id . at

The letter further notified the p laintiff that

her home would be sold if she did not take action

rectify the

delinquency . Id . The p laintiff alleged in her comp laint that the
letter failed

state the amount owed , the creditor

whom the

money was owed , and the legal authority upon which BAC 'S
firm 's action to sell her home was based .

Id .

the

The defendant law

firm moved to dism iss the FDCPA claim s on the grounds that it was
not a third-party debt collector . Id . at *3 . The court found that

the law firm was a debt collector, and uaccordingly, Plaintiff U
pleaded a cause of action under the FDCPA that is ' lau sible on its
p

face./' Id . (
'
citing Igbal, 129 S. Ct. at 1949).
Plaintiffs' Amended Complaint is distinguishable because it is
conclusory , while the Robinson plaintiff alleged facts to support
her FDCPA claims .

Plaintiffs' Amended Complaint on ly states that

Chase 's Letter ucontained false and m isleading information which
misrepresented the amount owed' and that 'Chase m isrepresented the
'
'
amounts

principal, escrow , interest, and fees owed under the

terms

the mortgage .'28
'

A lthough Plaintiffs do

have

satisfy their ultimate burden of proof in pleading , and Ru le 8 does
not require 'detailed factual allegations,'
'
'
an

unadorned ,

udemands more than

the-defendant-unlawfully -harmed -me

Icbal, 129 S.

at 1949 (
citations omitted)

accusation .'
'

complaint does

not suffice uif it tenders '
naked assertion l
sl' devoid of '
further
factual enhancement.'' Id . (
'
quoting Twombly,
A lthough
complaint

the

court

are

assumes

true ,

that

factual

pleading

that

S.

at 1966).

allegations
offers

in

the

labels

and

conclu sions or a formulaic recitation of the elements of a cause of

action will not do.' See id . (
'
citations and quotations omitted).
The

Amended

Complaint 's

allegations

fall

short

the

plausibility standard . For example , in Janos v . Wells Fargo Bank ,

N . ., Civ . Action No. H-11-3953, 2013 WL 1789304,
A

( . . Tex .
S D

Apr. 26, 2013), the plaintiff alleged the following

support his

FDCPA claim s : ' We11s Fargo is a debt collector under the terms of
''

the E
FDCPAI,'

'
Wells Fargo misrepresented the amount of the

consumer debt allegedly owed by g
plaintiffq

by failing to

give appropriate credit for payments made on the same day ,' and
'Wells Fargo communicated credit information which it knew to
be false .''
'

The plaintiff also alleged that nWells Fargo ,

connection with a forbearance agreement

z8
$ l2. Amended Complaint , Docket Entry No

'failed to give

.

p. 3 $ lO; pp. 3-4

credit for

forbearance payments made on the same day ,' and

'
misapplied payments made by E
plaintiffq by using money for fees
and costs assessed on

mortgage loan , then to outstanding

principal , accrued interest, and escrow costs.'' Id . Wells Fargo ,
'
the defendant , argued that plaintiff failed to plead any facts in

support of his FDCPA claims. Id. at *2. u
Wells Fargo focuse E on
d)
E
plaintiff's)

failure

'
specify

how

or

when

Wells

Fargo

misrepresented anything ' or 'how , when , or to whom Wells Fargo
communicated credit information which it knew to be false .''
'

Id .

The court noted that 'the pleading deficiencies outlined by Wells
'
Fargo .

support Wells Fargo 's argument that E
plaintiff) has not

stated plausible claims within the meaning of Twomblv and Igbal.
Id 29

Here

also ,

Plaintiffs

have

not

identified

any

misrepresentation by Chase and have not pleaded factual allegations
that would allow the court
Chase engaged in m isconduct .

draw the reasonable inference that
See Igbal, 129 S . Ct . at 1949.30

2The court held that nE
9
iqn addition to the pleading
deficiencies . .
E
plaintiff's)
.
claims also fail under
Twombly and Igbal's plausibility requirement because Wells Fargo,
as the mortgage servicer , cannot be considered a 'debt collector'
under the FDCPA
.' Janos , 2013 WL 1789304 , at *2 .
'

Mplaintiffs' other allegations (
not mentioned in their
Response) include that they made two payments to EMC (
before Chase
began servicing the mortgage) that EMC did not properly apply to

their account. See Amended Complaint, Docket Entry No. 5, p. 2 $
8.

Defendants respond that uPlaintiffs blatantly misrepresented

facts to the Court .

. (
because) E
tqhe Chase Detailed Transaction

h istory p la inly shows that the February payment was returned and
the March payment was applied on March lO, 2011 .'
' Motion to

(
continued.- )

Defendants also argue that Chase is not a debt collector under

the FDCPA because
enacted

is the mortgage servicer x l

The FDCPA 'was
'

eliminate abusive debt collection practices by debt

collectors, to insure that those debt collectors who refrain from

using abusive debt collection practices are not competitively

disadvantaged , and to promote consistent State action to protect
consumers against debt collection abuses .''
'

Taylor v . Perrin ,

Landrv, deLaunav & Durand, 1O3 F.
3d 1232, 1234 (
5th
(
quoting 15 U . .
S C.

l692 (
e)).

1997)

udebt collector' is uany person
'

who uses any instrumentality of interstate commerce or the mails in
any business the principal purpose

which is the collection of

any debts, or who regularly collects or attempts

collect,

directly or indirectly , debts owed or due or asserted to be owed or

due another.' 15 U . . 5 1692a (
'
S C.
6). However, uE
tlhe legislative
history of section 1692a (
6) indicates conclusively that a debt
collector does not include the consumer 's creditors, a mortgage

M l.- continued)
Dismiss, Docket Entry No. 7, p . 4 (
citing Letter, Exhibit B to
Motion to Dismiss, Docket Entry No . 7-2 , pp . 61-65 , Reference Nos .

286-319).

Plaintiffs also allege that n(
b1oth EMC and (
Chasel

purchased force-placed insurance for the property even

Gaviolas had obtained adequate insurance.

audit the Gav iolas ' account to correct errors .'
'

Complaint, Docket Entry No. 5, p. 3 ! 8.

though

(
Chaseq has refused to
See Amended

However, the Letter

states that Chase has not purchased lender-p laced insurance for
this loan . See Letter , Exhibit B to Motion to Dismiss , Docket
Entry No . 7-2, p . 2 . Plaintiffs do not address th is in their
Response .

3 see Motion to D ismiss, Docket Entry No .
l

servicing company , or an assignee of a debt, as long as the debt
was not in default at the time it was assigned .' Perrv v . Stewart
'

Title Co., 756 F.2d 1197, 1208 (
5th Cir . 1985) (
citation omitted);
see also Montqomerv v . Wells Fargo Bank , N .A ., 459

428

App 'x 424 ,

(
5th Cir . 2012)7 18 U .
S.C. 5 1692a (
4) ('The term '
l
creditor'

means any person who offers or extends credit creating a debt or to
whom a debt is owed ,

such term does not include any person to

the extent that he receives an assignment or transfer of a debt in
defau lt solely for the purpose of facilitating collection of such

debt for another .').
/
Plaintiffs argue that Chase
began

serv icing the mortgage

a debt collector because it
2011, after the loan was in

utechnical default' in January of 2009 for unpaid escrow advances .Bz
'

Defendants point out that uE
alccording
Texas Rule of Civil Procedure
loan was

default as

the pleadings in the

foreclosure suit , Plaintiffs'

the June

2012 payment, long after

'3
Plaintiffs allege E
chase) became the serv icer .' 3

In the context

of this 12 ( (6) motion to dismiss, however, the court will accept
b)

3see Plaintiffs' Response, Docket Entry No . 1O, p . 3 (
2
citing
Letter, Exhibit B to Motion to Dism iss, Docket Entry No . 7-2 , p .

92); Amended Complai
nt, Docket Entr No. 5, p. 2 $ 8 (
y
allegi that
ng
the loan was nallegedly in technical default as early as September
1, 2008,' and citing Chase Detailed Transaction History , Exhibit 2
'

to Amended Complaint, Docket Entry No. 5-2).
33
see Motion to Dismiss , Docket Entry No . 7, p . 5 ; Foreclosure
Application , Exhibit A to Motion to D ismiss, Docket Entry No . 7-1,

p. 3 $ 8.

Plaintiffs ' allegations as true and read them

mean that the

loan , in utechnical default' in 2009, was still in default in April
'

2011, when Chase began servicing the loan .34
Some courts have read Perry to mean that a mortgage serv icing

company is a udebt collector'
'

the deed of trust was assigned to

it after the plaintiff defau lted . See Omrazeti v . Aurora Bank FSB,

Action No. SA :12-CV-0O730-DAE, 2013 WL 3242520, at

( . .
W D

Tex . June 25, 2013) (
citing Reynolds v . Bank of America, N . ., Civ .
A
Action No . 3:l2-CV-142O-L, 2013 WL 1904090, at *5 ( . . Tex . May 8,
N D
2013); Miller v . BAC Home Loans Servicinq, LP, Civ . Action No.

6:11CV22, 2012 WL 1206510, at

( D . Tex . Mar.
E.

2012)7 Bridqe

v. Ocwen Federal Bank, FSB, 681 F. 355, 359 (
3d
6th Cir. 2012)).
Regardless of whether Chase qualifies as a debt collector,
Plaintiffs have failed

state a claim under

FDCPA .

See

Omrazeti, 2013 WL 3242520, at *l8 (ug
plaintiff/sq vague allegation
that Defendants '
demand E
ed) the wrong amount' is not sufficient to
support the conclusion that Defendants comm itted a wrongful act,
especially in the absence of any facts supporting that allegation

(
such as the amount allegedly demanded, the correct amount owed,
the date of the alleged demand, or the method of the demandl.' .
o

Mchase also argues that the Chase Detailed Transaction History
shows that the first payment that Plaintiffs made after April 1,
2011, was applied as the April 1, 2011 payment , indicating that the
loan was not in defau lt when Chase became the mortgage servicer .
See Defendants ' Reply Brief in Support of Their Motion to Dismiss

Amended Complaint For Failure to State a Claim
Reply'
'), Docket Entry No. 13, p . 3.

(uDefendants'

See also Gip son v . Deutsche Bank National Trust Co .,

Action

No . 3:l3-CV-482O-L, 2015 WL 2069583, at *8 ( . . Tex . May 4, 2015).
N D
Therefore , the court concludes that Count One should be dism issed
for failure to state a claim .
B.

Texas Debt Collection Act

Count Two alleges that u
Wells Fargo l violated the Texas
q
Finance Code by hiring E
chaseq, an independent debt collector known
repeatedly or continuously engage in acts or practices that are
prohibited by this chapter .

Texas Finance Code 5 392 .306 .' 5
'3

Chapter 392 of the Texas Finance Code , the Texas Debt Collection

Act IA
'TDCA/ l 'h
'I
prohibits debt collectors from making fraudulent,
decep tive , or misleading representations concerning the character ,
extent , or amount of a consumer debt' or 'from using any other

false representation or deceptive means to collect a debt or obtain
information concerning a consumer ./' Reece v . U .S . Bank National
'

Association , Civ . Action No . 4 :13-cv-982-O , 2014 WL 301022, at *4

( . . Tex . Jan . 28, 2014) (
N D
citation omitted); see also Tex. Fin.
Code Ann.

392.
304 (
a).

Section 392.
306 provides that

creditor may not use an independent debt collector if the creditor
has actual knowledge that the independent debt collector repeatedly

or continuously engages in acts or practices that are prohibited by
this chapter .'
'

Defendants argue that Plaintiffs fail to allege

3see Amended Complaint, Docket Entry No. 5, p. 4 $ 14 (
5
this
is the entirety of Count Two , besides the statement : 'Plaintiffs
'

re-alleges E
sic) the preceding paragraphs.' Id. $ 13).
'
-

16 -

facts suggesting that Wells Fargo had actual knowledge that Chase
repeatedly or continuously engaged in acts or practices prohibited

by the TDCA . 6 Plaintiffs respond that ' t)he facts of said abuses
3
'g
and violations are readily availab le to Wells Fargo and the public
the form

the Federal Reserve Consent Order .'37
'

The p lain language of the statute requires that the defendant
have actual knowledge of the debt collector 's prohib ited acts or
practices .

See Tex . Fin . Code Ann . 5 392 .306 .

Count Two merely

states uWells Fargo violated the Texas Finance Code by hiring

E
chase), an independent debt collector known
continuously engage

repeatedly or

acts or practices that are prohibited by

this chapter .' 8 The Amended Complaint is nearly devoid of factual
'3
allegations regarding Wells Fargo .

states that Wells Fargo

filed a Rule 736 foreclosure app lication , that Plaintiffs never
received service of the app lication , and that a default order

3 see Motion to Dismiss , Docket Entry No .
6

pp . 5-6.

3see Plaintiffs' Response, Docket Entry No. 1O, p .
7

(
citing

Consent Order, Exhib it l to Amended Comp laint, Docket Entry No . 5-

1).

Plaintiffs' entire response to Chase's argument states:

hDefendant's motion inv ites 'a formulaic recitation of the elements
of a cause of action .' Bell . Atl . Corp . v . Twombly , 55O U .S . 544,

555 (
2007) E
). Plaintiffs claim Wells Fargo had the requisite
knowledge of E
chase'sq history of third party debt collection law

violations and abuses. Doc. # 5, ! 14. The facts of said abuses
and violations are readily available to Wells Fargo and the pub lic

in the form of the Federal Reserve Consent Order.
1) .' Id .
'

BAmended Complaint, Docket Entry No.
8

(
citing Exhibit

4 $ l4.

allowing foreclosure was signed on September 18, 2013 .3 However,
9
it does not state Wells Fargo 's relation to the loan , the Property ,
or Chase, besides indirectly alleging in Count Two that Wells Fargo

hired Chase .
The threadbare allegation that Chase is nknown to repeatedly

or continuously engage in acts or practices that are prohibited by
this chapter' cannot support a claim . See Thomas v . Miramar Lakes
'
Homeowners A ssociation ,

Action No . 4 :13-CV -1479, 2014 WL

3897809, at *5-6 ( . . Tex . Aug .
S D

2014)

support her (
5

392.306) claim, (
plaintiff's) amended complaint offers nothing more
than a threadbare recitation of the statute .

She does not offer

any facts showing that E
defendantq had h
actual knowledgez' or any
knowledge,

that

(
the

hired

debt

collectorq

%
repeatedly

or

continuously ' engaged in conduct prohibited by the TDCA . As such ,

(
plaintiff) has failed to state a claim for relief under this
section and her claim is dismissed .' ; Reece, 2014 WL 301022, at *4
o
(nplaintiff contends Barrett '
has been sanctioned multiple times in
the state of Texas for its violation of debt collection practices.
Defendant U .S . Bank has v iolated Texas law .'
attached three exhibits

Plaintiff

his First Amended Complaint , which

report various sanctions against Barrett .
however , do not refer to the TDCA .

The three documents ,

Additionally , Plaintiff does

not plead any facts showing Defendants had 'actual knowledge that

3Id. at
9

$ 9.

the independent debt collector repeatedly or continuously engages
in acts or practices that are prohibited by this chapter .' Lastly ,
Plaintiff does not plead any actual damages suffered as a result of
Defendants' alleged violation of the TDCA . Accordingly , the Court

finds that Plaintiff fails state a claim under

392.
306).')
'

(
citations omitted); see also Woods v . Keiffer, No . 4:13-CV-957- ,
A
2014 WL 572505,

( . . Tex .
N D

2014). 0
4

For these

reasons, Plaintiffs have failed to state a claim upon which relief
can be granted , and the TDCA claim will be dismissed .
IV .

Conclusions and Order

For the reasons discussed above , Plaintiffs have not stated

any

claims upon which

Complaint .

relief can

be granted

the Amended

Defendants' Motion to D ismiss Amended Complaint for

Failure to State a Claim (
Docket Entry No.

is therefore GRANTED,

and this action will be dismissed with prejudice.

SIGNED at Houston , Texas , on this 23rd day of June , 2016 .

e

A
S IM LA KE
U N IT ED STA T ES D ISTR ICT JUDG E

do
Defendants point out that the Consent Order was signed on
April l3 , 2011, and Chase became the mortgage servicer on April 1 ,
2011 . See Defendants ' Reply , Docket Entry No . 13, p . 4 . The
Amended Comp laint gives no indication of when Wells Fargo hired
Chase .
-

19-