Law et al v. Ocwen Loan Servicing, LLC et al
MEMORANDUM OPINION AND ORDER granting 23 MOTION to Dismiss (Plaintiffs' Response due by 6/9/2017.) (Signed by Judge Sim Lake) Parties notified. (aboyd, 4)
United States District Court
Southern District of Texas
May 26, 2017
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
ROGER LAW and LUCINDRA LAW,
OCWEN LOAN SERVICING, LLC,
David J. Bradley, Clerk
CIVIL ACTION NO. H-16-2675
MEMORANDUM OPINION AND ORDER
Pending before the court is Defendant's Motion to Dismiss and
("Motion to Dismiss")
Roger Law and Lucindra Law,
have not responded to it.
reasons explained below, Ocwen Loan Servicing's ( "Ocwen") Motion to
Dismiss will be granted.
Factual and Procedural Background
Plaintiffs Roger Law and Lucindra Law ("Plaintiffs")
Woodlake Lane, Missouri City, Texas ("the Property") . 1
initial lender sold their loan to U.S. Bank N.A., as Trustee for
the Registered Holders of MASTR Asset Backed Securities Trust 2006AM1,
Mortgage Pass-Through Certificates,
Plaintiffs' Original Petition, Factual Background, Exhibit D-1
to Notice of Removal, Docket Entry No. 1-4, pp. 6-8.
Their loan was
then serviced by defendant Ocwen Loan
( "Ocwen" or "Defendant") .
Bank purchased the Property in a
On December 3,
On October 13, 2014, U.S. Bank filed suit to evict Plaintiffs.
On October 27, 2014, Ocwen sold the Property to a third party.
Mackie Wolf Zientz & Mann,
PC ("MWZM"), allegedly represented to
the court that U.S. Bank still owned the Property.
ruled in favor of U.S.
The trial court
U.S. Bank allegedly represented again that it owned the Property.
Plaintiffs were evicted in March of 2015.
Plaintiffs filed suit against Ocwen and MWZM 2 in the 434th
Judicial District Court of Fort Bend, Texas, asserting claims of
negligence and statutory fraud arising from the statements made in
Defendant Ocwen timely removed the case to this
to amend their Original
The attorneys have since been dismissed. See Order Granting
Mackie Wolf Zientz & Mann, PC' s Motion to Dismiss Pursuant to
Federal Rule of Civil Procedure 12(b) (6), Docket Entry No. 8.
Notice of Removal, Docket Entry No. 1.
which the court granted in part and denied in part. 4
Ocwen now moves to dismiss for failure to state a claim.
A Rule 12(b) (6)
Standard of Review
motion tests the formal sufficiency of the
complaint because it fails to state a legally cognizable claim."
Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001), cert.
denied sub nom. Cloud v. United States, 122 S. Ct. 2665 (2002).
defeat a motion to dismiss, a plaintiff must plead "enough facts to
state a claim to relief that is plausible on its face."
Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1974 (2007).
generally is not to look beyond the pleadings in deciding a motion
197 F.3d 772,
"Pleadings" for purposes of a Rule 12(b) (6) motion include
the complaint, its attachments, and documents that are referred to
in the complaint and central to the plaintiff's claims.
Morgan Stanley Dean Witter, 224 F.3d 496, 498-99 (5th Cir. 2000).
The court does not
"strain to find inferences favorable to the
Plaintiffs' Motion for Leave to Amend Pleadings ("Motion to
Amend"), Docket Entry No. 13; Plaintiffs' Amended Original Petition
("Amended Petition") , Docket Entry No. 14, pp. 13-14.
Plaintiffs have not filed an amended complaint that conforms with
the court's earlier opinion (Docket Entry No. 20), the court will
refer to Docket Entry No. 14 as Plaintiffs' live pleading with the
exception of the claim for common-law fraud.
deductions, or legal conclusions."
Southland Securities Corp. v.
365 F.3d 353,
(internal quotation marks and citations omitted) .
"[C] ourts are
required to dismiss, pursuant to [Rule 12(b) (6)], claims based on
invalid legal theories,
even though they may be otherwise well-
State Farm Fire and Casualty Insurance Co.
(Texas), 605 F. Supp. 2d 811, 820 (W.D. Tex. 2009)
v. Williams, 109 S. Ct. 1827, 1832 (1989)).
As a preliminary matter,
it is not clear from Plaintiffs'
pleadings exactly which alleged misrepresentations were made by
Plaintiffs allege that "attorneys from MWZM, upon Ocwen's
instruction, presented sworn evidence and represented to the Court
that U.S. Bank owned the property in question." 6
Elsewhere in the pleadings Plaintiffs allege that "Defendants Ocwen
and MWZM in the course of the foreclosure action and subsequent
The court notes that both parties' briefing leaves much to be
Plaintiffs' drafting and formatting render portions of
their Amended Complaint virtually incoherent.
Ocwen's Motion to
Plaintiffs' negligence claims and addresses a nonexistent breachof-contract claim while failing to address Plaintiffs' statutory
Plaintiffs' Amended Complaint,
5.4 (emphasis added).
Docket Entry No.
eviction proceeding made
and represented to the Plaintiffs
and to the courts that they were in fact the party in interest
respectively when in fact they no longer owned the property. " 8
the purposes of Defendant's 12(b) (6) motion, and for the benefit of
Plaintiffs are far from clear on this point.
representations or evaluations made in a transactional context.
See McCamish, Martin, Brown & Loeffler v. F.E. Appling Interests,
991 S.W.2d 787, 793 (Tex. 1999)
The elements of a cause of action for the breach of this
duty are: (1) the representation is made by a defendant
in the course of his business, or in a transaction in
which he has a pecuniary interest; ( 2) the defendant
supplies "false information" for the guidance of others
in their business; ( 3) the defendant did not exercise
communicating the information; and ( 4) the plaintiff
suffers pecuniary loss by justifiably relying on the
Federal Land Bank Association of Tyler v. Sloane, 825 S.W.2d 439,
442 (Tex. 1991)
pled by Plaintiffs
to support a
The allegedly false representations
were not made in the course of Ocwen's business as a loan servicer.
Id. at 9,
The representations were made by an adverse party in the
context of litigation.
"Generally, courts have acknowledged that
a third party's reliance on an attorney's representation is not
justified when the representation takes place in an adversarial
991 S.W.2d at
applies to representations made directly by adverse parties.
Statutory Fraud 9
that Ocwen' s
Texas Civil Practice and Remedies Code
12.002, which provides
liability for fraudulent claims against real property.
statutory fraud claim fails as a matter of law.
To state a claim under Section 12.002, a plaintiff must
plead facts showing that the defendant
presented, or used a document with knowledge that it was
a fraudulent lien or claim against real or personal
property or an interest in real or personal property, ( 2)
intended that the document be given legal effect, and (3)
intended to cause the plaintiff physical injury,
financial injury, or mental anguish.
Ferguson v. Bank of New York Mellon Corp., 802 F.3d 777, 783
Plaintiffs acknowledge that U.S.
Bank purchased the Property at a non-judicial foreclosure sale. 10
As noted in footnote 6, supra, Ocwen's Motion to Dismiss does
not address Plaintiffs' statutory fraud claim. The court, finding
Plaintiffs' claim for statutory fraud fails as a matter of law,
addresses it sua sponte. Ocwen's counsel is warned, however, that
the court will not do its research in the future.
Docket Entry No.
eviction suit had been filed. 11
Although the court could find no
Texas cases addressing the effect of
initiating an eviction proceeding, sellers may, as a general rule,
maintain an eviction proceeding under those circumstances.
A.L.R.2d 1170 (Originally published in 1956)
premises during the pendency of a
forcible detainer or similar
summary possessory action seems .
. not to deprive the original
landowner of the right to maintain the action.").
property to a third party or that it misrepresented its ownership
status to the court, Plaintiffs fail to plead that Ocwen, or any
misrepresentations to the state court with the intent to cause
Plaintiffs injury or mental anguish.
Conclusion and Order
For the reasons discussed above,
Plaintiffs have failed to
state a claim for negligent misrepresentation.
to Dismiss and Brief in Support (Docket Entry No. 23) is therefore
Because Ocwen failed to address Plaintiffs'
the court evaluated that claim sua sponte.
district court may dismiss a claim on its own motion as long as the
procedure employed is fair."
Davoodi v. Austin Independent School
District, 755 F.3d 307, 310 (5th Cir. 2014) (citations and internal
quotation marks omitted).
nrd. at 3,
Plaintiffs have already been given one
opportunity to amend their pleadings and have failed to respond to
substituting counsel since January 20, 2017.
This opinion serves
as fair notice to Plaintiffs of the court's intent to dismiss this
action with prejudice unless Plaintiffs respond with argument or
authority contrary to the court's sua sponte analysis of their
statutory fraud claim by June 9, 2017.
SIGNED at Houston, Texas, on this
UNITED STATES DISTRICT JUDGE
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