Ricardo v. The Bank of New York Mellon et al

Filing 35

OPINION and ORDER OF DISMISSAL granting 6 Motion to Dismiss for Failure to State a Claim; granting 20 Motion for Judgment; granting 24 Motion to Dismiss; denying 31 Motion for Leave to File. Judge Stacy's order granting Plaintiff's motion for leave to amend is VACATED, Ricardo's motion for remand is DENIED. This case is DISMISSED WITH PREJUDICE for failure to state a claim.(Signed by Judge Melinda Harmon) Parties notified.(jdav, 4)

United States District Court
Southern District of Texas

ENTERED
August 09, 2017

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
DAVID RICARDO,
Plaintiff,
vs.
THE BANK OF NEW YORK MELLON,
DITECH FINANCIAL, LLC, BANK OF
AMERICA, N.A., AND KEN LEWIS,
Defendants.

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§
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§
§
§
§
§

David J. Bradley, Clerk

CIVIL ACTION H-16-3238

OPINION AND ORDER OF DISMISSAL
Pending before the Court in the above referenced cause, timely
removed from the 189th Judicial District Court in Harris County,
Texas purportedly on diversity jurisdiction,1 alleging wrongful and
continued dispossession of real property and its rental value,
fraud,

wrongful

foreclosure,

destruction

of

property,

and

conversion of personal property, and seeking to recover attorney

1

As stated in the Notice of Removal, #1 at pp. 4-5, and is
uncontested, Plaintiff David Ricardo is a citizen and resident of
Texas. Defendant the Bank of New York Mellon f/k/a the Bank of
New York as Trustee for the Certificateholders of the CWABS, Inc.
Asset-Backed Certificates, Series 2005-9 (“Mellon”) is a
corporation with its state of incorporation being Delaware and
its principal place of business, New York. Defendant Ditech
Financial LLC f/k/a Green Tree Servicing LLC (“Ditech”) is a
Delaware limited liability company with its citizenship being
that of its members, i.e., Delaware, Minnesota, Maryland and
Florida; Defendant Bank of America, N.A. (“BANA”), a national
banking association, is a citizen of North Carolina where its
main office is located; and Ken Lewis, a nominal party allegedly
fraudulently joined, doing business in Harris County, Texas under
the name of “REMAX Westside, Realtors,” is a citizen and resident
of Texas.
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fees, costs, expenses, and exemplary damages, are the following
motions:
(1) Defendant Bank of America, N.A.’s (“BANA’s”) motion to dismiss
(#6);
(2) Plaintiff David Ricardo’s (“Plaintiff’s” or “Ricardo’s”) motion
for remand (instrument #10) and first amended motion for remand
(#21) on the grounds that Defendant Ken Lewis is an improperly
joined party as a citizen of Texas where this action is brought;
(3) Defendant Ditech Financial LLC f/k/a Green Tree Servicing LLC’S
(“Ditech’s”) motion for judgment on the pleadings (#20);
(4) Defendant the Bank of New York Mellon f/k/a the Bank of New
York as Trustee for the Certificateholders of the CWABS, Inc.
Asset-Backed Certificates, Series 2005-9's

(“Mellon’s”) motion to

dismiss (#24);
(5) Plaintiff’s motion for leave to amend petition (#31); and
(6) Magistrate Judge Frances Stacy’s memoranda and recommendations
(#30 and 33), to which no objections have been filed.
Standard of Review
Rule 12(b)(6)
When a district court reviews a motion to dismiss pursuant to
Fed. R. Civ. P. 12(b)(6), it must construe the complaint in favor
of the plaintiff and take all well-pleaded facts as true. Randall
D. Wolcott, MD, PA v. Sebelius, 635 F.3d 757, 763 (5th Cir. 2011),
citing Gonzalez v. Kay, 577 F.3d 600, 603 (5th Cir. 2009).
-2-

The

plaintiff’s

legal

conclusions

are

not

entitled

to

the

same

assumption. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)(“The tenet
that a court must accept as true all of the allegations contained
in a complaint is inapplicable to legal conclusions.”), citing Bell
Atlantic Corp. v. Twombly, 556 U.S. 662, 678 (2007); Hinojosa v.
U.S. Bureau of Prisons, 506 Fed. Appx. 280, 283 (5th Cir. Jan. 7,
2012).
“While a complaint attacked by a Rule 12(b)(6) motion to
dismiss does not need detailed factual allegations, . . . a
plaintiff’s

obligation

‘entitle[ment]

to

to

relief’

provide

the

requires

‘grounds’

more

than

of

his

labels

and

conclusions, and a formulaic recitation of the elements of a cause
of action will not do . . . .”

Bell Atlantic Corp. v. Twombly, 550

U.S. 544, 555 (2007)(citations omitted). “Factual allegations must
be enough to raise a right to relief above the speculative level.”
Id. at 1965, citing 5 C. Wright & A. Miller, Federal Practice and
Procedure § 1216, pp. 235-236 (3d ed. 2004)(“[T]he pleading must
contain something more . . . than . . .

a statement of facts that

merely creates a suspicion [of] a legally cognizable right of
action”).

“Twombly

jettisoned

the

minimum

notice

pleading

requirement of Conley v. Gibson, 355 U.S. 41 . . . (1957)[“a
complaint should not be dismissed for failure to state a claim
unless it appears beyond doubt that the plaintiff can prove no set
of facts in support of his claim which would entitle him to

-3-

relief”], and instead required that a complaint allege enough facts
to state a claim that is plausible on its face.”

St. Germain v.

Howard,556 F.3d 261, 263 n.2 (5th Cir. 2009), quoting In re Katrina
Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007). “‘A claim
has facial plausibility when the pleaded factual content allows the
court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.’”

Montoya v. FedEx Ground Package

System, Inc., 614 F.3d 145, 148 (5th Cir. 2010), quoting Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009).

The plausibility standard is

not akin to a “probability requirement,” but asks for more than a
“possibility that a defendant has acted unlawfully.”
U.S. at 556.

Twombly, 550

Dismissal is appropriate when the plaintiff fails to

allege “‘enough facts to state a claim to relief that is plausible
on its face’” and therefore fails to “‘raise a right to relief
above the speculative level.’”

Montoya, 614 F.3d at 148, quoting

Twombly, 550 U.S. at 555, 570.
In Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009), the Supreme
Court stated that “only a complaint that states a plausible claim
for relief survives a motion to dismiss,” a determination involving
“a context-specific task that requires the reviewing court to draw
on its judicial experience and common sense.”

“[T]hreadbare

recitals of the elements of a cause of action, supported by mere
conclusory statements do not suffice” under Rule 12(b). Iqbal, 556
U.S. at 678.

The plaintiff must plead specific facts, not merely
-4-

conclusory allegations, to avoid dismissal.

Collins v. Morgan

Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000). “Dismissal
is proper if the complaint lacks an allegation regarding a required
element necessary to obtain relief . . . .“

Rios v. City of Del

Rio, Texas, 444 F.3d 417, 421 (5th Cir. 2006), cert. denied, 549
U.S. 825 (2006).
Dismissal under Rule 12(b)(6) is proper not only where the
plaintiff fails to plead sufficient facts to support a cognizable
legal theory, but also where the plaintiff fails to allege a
cognizable legal theory.

Kjellvander v. Citicorp, 156 F.R.D. 138,

140 (S.D. Tex. 1994), citing Garrett v. Commonwealth Mortgage
Corp., 938 F.2d 591, 594 (5th Cir. 1991).

“A complaint lacks an

‘arguable basis in law’ if it is based on an indisputably meritless
legal theory’ or a violation of a legal interest that does not
exist.”

Ross v. State of Texas, Civ. A. No. H-10-2008, 2011 WL

5978029, at *8 (S.D. Tex. Nov. 29, 2011).
When a plaintiff’s complaint fails to state a claim, the court
should generally give the plaintiff at least one chance to amend
the complaint under Rule 15(a) before dismissing the action with
prejudice.

Great Plains Trust Co v. Morgan Stanley Dean Witter &

Co., 313 F.3d 305, 329 (5th Cir. 2002)(“District courts often afford
plaintiffs at least one opportunity to cure pleading deficiencies
before dismissing a case, unless it is clear that the defects are
incurable

or

the

plaintiffs

advise
-5-

the

court

that

they

are

unwilling

or

unable

to

amend

in

a

manner

that

will

avoid

dismissal.”); United States ex rel. Adrian v. Regents of the Univ.
of Cal., 363 F.3d 398, 403 (5th Cir. 2004)(“Leave to amend should
be freely given, and outright refusal to grant leave to amend
without a justification . . . is considered an abuse of discretion.
[citations omitted]”).

The court should deny leave to amend if it

determines that “the proposed change clearly is frivolous or
advances a claim or defense that is legally insufficient on its
face . . . .”

6 Charles A. Wright, Arthur R. Miller & Mary Kay

Kane, Federal Practice and Proc. § 1487 (2d ed. 1990).
“Rule 12(b) is not a procedure for resolving contests about
the facts or the merits of a case.”

Gallentine v. Housing

Authority of City of Port Arthur, Tex., 919 F. Supp. 2d 787, 794
(E.D. Tex. Jan. 22, 2012), citing 5A Charles A. Wright & Arthur R.
Miller, Federal Practice and Procedure:

Civil 2d § 1356, at 294

(1990).
As noted, on a Rule 12(b)(6) review, although generally the
court may not look beyond the pleadings, the Court may examine the
complaint, documents attached to the complaint, and documents
attached to the motion to dismiss to which the complaint refers and
which are central to the plaintiff’s claim(s), as well as matters
of public record.

Lone Star Fund V (U.S.), L.P. v. Barclays Bank

PLC, 594 F.3d 383, 387 (5th Cir. 2010), citing Collins, 224 F.3d at
498-99; Cinel v. Connick, 15 F.3d 1338, 1341, 1343 n.6 (5th Cir.
-6-

1994).

See also United States ex rel. Willard v. Humana Health

Plan of Tex., Inc., 336 F.3d 375, 379 (5th Cir. 2003)(“the court may
consider . . . matters of which judicial notice may be taken”).
Taking judicial notice of public records directly relevant to the
issue in dispute is proper on a Rule 12(b)(6) review and does not
transform the motion into one for summary judgment.
Stryker Corp., 631 F.3d 777, 780 (5th Cir. 2011).

Funk v.

“A judicially

noticed fact must be one not subject to reasonable dispute in that
it

is

either

(1)

generally

known

within

the

territorial

jurisdiction of the trial court or (2) capable of accurate and
ready determination by resort to sources whose accuracy cannot
reasonably be questioned.”

Fed. R. Evid. 201(b).

“‘[D]ocuments that a defendant attaches to its motion to
dismiss are considered part of the pleadings if they are referred
to in the plaintiff’s complaint and are central to [its] claim.’”
Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498-99 (5th
Cir. 2000), quoting Venture Assocs. Corp. v. Zenith Data Sys.
Corp., 987 F.2d 429, 431 (7th Cir. 1993).

By such attachments the

defendant simply provides additional notice of the basis of the
suit to the plaintiff and aids the Court in determining whether a
claim has been stated.

Id. at 499.

The attachments may also

provide the context from which any quotation or reference in the
motion is drawn to aid the court in correctly construing that
quotation or reference.

In re Enron Corp. Securities, Derivative

-7-

& “ERISA” Litig., No. H-04-0087, 2005 WL 3504860, at 11 n.20 (S.D.
Tex. Dec. 22, 2005). “Where the allegations in the complaint are
contradicted by facts established by documents attached as exhibits
to

the

complaint,

allegations.”

the

court

may

properly

disregard

the

Martinez v. Reno, No. 3:97-CV-0813-P, 1997 WL

786250, at *2 (N.D. Tex. Dec. 15, 1997), citing Nishimatsu Const.
Co. v. Houston Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975).
When conclusory allegations and unwarranted deductions of fact are
contradicted by facts disclosed in the appended exhibit, which is
treated as part of the complaint, the allegations are not admitted
as true.

Carter v. Target Corp., 541 Fed. Appx. 413, 417 (5th Cir.

Oct. 4, 2013), citing Associated Builders, Inc. v. Alabama Power
Co., 505 F.2d 97, 100 (5th Cir. 1974), citing Ward v. Hudnell, 366
F.2d 247 (5th Cir. 1966). See Northern Indiana Gun & Outdoor Shows,
Inc. v. City of South Bend, 163 F.3d 449, (7th Cir. 1996)(“It is a
well settled rule that when a written instrument contradicts
allegations in the complaint to which it is attached, the exhibit
trumps the allegations.”); Roth v. Jennings, 489 F.3d 499, 509 (2d
Cir.

2007)(when

attached

documents

contain

statements

that

contradict the allegations in the complaint, the documents control
and the court need not accept as true the allegations contained in
the complaint.”).
Federal Rule of Civil Procedure 12(c) provides, “After the
pleadings are closed--but early enough not to delay trial--a party
-8-

may move for judgment on the pleadings.” The standard for deciding
a Rule 12(c) motion for judgment on the pleadings is the same as a
Rule 12(b)(6) motion to dismiss.

Guidry v. Am. Public Life Ins.

Co., 512 F.3d 177, 180 (5th Cir. 2007).

The rule is “intended to

dispose of cases where material facts are not in dispute and a
judgment on the merits can be rendered by looking at the substance
of the pleadings and any judicially noticed facts.”

Associated

Machine Tool Technologies v. Doosan Infracore America, Inc., 2017
WL 1409071, at *2 (S.D. Tex. Apr. 19, 2017), citing Great Plains
Trust Co. v. Morgan Stanley Dean Witter, 313 F.3d 305, 313 n.8 (5th
Cir. 2002).
Federal Rule of Civil Procedure 9(b) governs the pleading of
common law fraud claims.

Dorsey v. Portfolio Equities, Inc., 540

F. 3d 333, 338-39 (5th Cir. 2008), citing Abrams v. Baker Hughes,
Inc., 292 F.3d 424, 430 (5th Cir. 2002).
heightened pleading standards:

The Rule provides for

“In alleging fraud or mistake, a

party must state with particularity the circumstances constituting
fraud or mistake.

Malice, intent, knowledge, and other conditions

of a person’s mind may be alleged generally.”
strictly interprets the Rule and requires
fraud

to

specify

the

statements

The Fifth Circuit

“‘a plaintiff pleading

contended

to

be

fraudulent,

identify the speaker, state when and where the statements were
made, and explain why the statements were fraudulent.’”

Dorsey,

540 F.3d at 339, quoting Hermann Holdings, Ltd. v. Lucent Techs.
-9-

Inc., 302 F.3d 552, 564-65 (5th Cir. 2002).

In short, Rule 9(b)

“requires the complaint to set forth ‘the who, what, where, and
how’

of

the

events

at

issue.”

Id.,

quoting

ABC

Arbitrage

Plaintiffs Group v. Tchuruk, 291 F.3d 336, 350 (5th Cir. 2002).
While the second sentence of Rule 9(b) appears to relax the
pleading requirements, it is not enough to merely allege that the
defendant had fraudulent intent.

Id., citing Melder v. Morris, 27

F.3d 1097, 1102 (5th Cur. 1994).

Instead a plaintiff must plead

“specific facts supporting an inference of fraud.” Id., citing id.
“‘Alleged facts are sufficient to support such an inference if they
either (1) show a defendant’s motive to commit securities fraud or
(2) identify circumstances that indicate conscious behavior on the
part of the defendant.’” Id., citing Hermann Holdings, 302 F.3d at
565.

“‘If the facts pleaded in a complaint are peculiarly within

the opposing party’s knowledge, fraud pleadings may be based on
information and belief.

However, this luxury must not be mistaken

for license to base claims of fraud on speculation and conclusory
allegations.’” Id, quoting Tuchman v. DSC Communications Corp., 14
F,3d 1061, 1068 (5th Cir. 1994).
Findings by the Magistrate Judge to which a party specifically
objects must be reviewed de novo under 28 U.S.C. § 636(b)(1)(C).
Findings to which no specific objections are made require that the
Court only to decide whether the memorandum and recommendation is
clearly erroneous or contrary to law.

-10-

Id., citing U.S. v. Wilson,

864 F.2d 1219, 1221 (5th Cir. 1989).

The district court “may

accept, reject, or modify, in whole or in part, the findings or
recommendations made by the magistrate judge.”

28 U.S.C. §

636(b)(1)(C).
Applicable Law
Under 28 U.S.C. § 1441(a)2 any state court action over which
federal courts would have original jurisdiction may be removed from
state to federal court.

Gasch v. Hartford Accident & Indemnity

Co., 491 F.3d 278, 282 (5th Cir. 2007; Guttierrez v. Flores, 543
F.3d

248,

251

(5th

Cir.

2008)(“A

district

court

has

removal

jurisdiction in any case where it has original jurisdiction.”).
The right to remove depends upon the plaintiff’s pleading at
the time of the petition for removal.

Pullman Co. v. Jenkins, 305

U.S. 534, 537-38 (1939); Cavallini v. State Farm Mutual Auto Ins.,
44 F.3d 256, 264 (5th Cir. 1995); Ford v. Property & Cas. Ins. Co.
of Hartford, No. Civ. A. H-09-1731, 2009 WL 4825222, *2 (S.D. Tex.
Dec. 9, 2009).
The removing party bears the burden of showing that subject
matter jurisdiction exists and that removal was proper. Manguno v.
Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002).
2

Title 28 U.S.C. § 1441(a) states, “Except as otherwise
expressly provided by Act of Congress, any civil action brought
in a State court of which the district courts of the United
States have original jurisdiction, may be removed by the
defendant or the defendants, to the district court of the United
States for the district and division embracing the place where
such action is pending.”
-11-

Any doubts are construed against removal because the removal
statute is strictly construed in favor of remand.

Id.

Under 28 U.S.C. §1332, a defendant may remove a case if there
is (1) complete diversity of citizenship and (2) the amount in
controversy is greater than $75,000, exclusive of interest and
costs.

Under

28

U.S.C.

§

1441(b),

when

original

federal

jurisdiction is based on diversity, as claimed by Defendants here,
a defendant may remove a state court civil action only “if none of
the parties in interest properly joined and served as defendants is
a citizen of the State in which such action is brought.”

The

doctrine of improper joinder, or fraudulent joinder,3 prevents
defeat of federal removal jurisdiction premised on diversity by the
presence of an improperly joined, non-diverse defendant. Borden v.
Allstate Ins. Co., 589 F.3d 168, 171 (5th Cir. 2009).

Citizenship

of an improperly joined party is totally disregarded in determining
the court’s subject matter jurisdiction.

Smallwood v. Illinois

Cent. R.R. Co., 385 F.3d 568, 572 (5th Cir. 2003).
Improper joinder may be established by showing (1) actual
fraud in the pleading of jurisdictional facts or (2) an inability
to establish a cause of action against the non-diverse defendant in
state court.

Gasch, 491 F.3d at 281; Smallwood, 385 F.3d at 573.

3

The Fifth Circuit prefers the term “improper joinder” to
“fraudulent joinder” because it is more consistent with the
statutory language in 28 U.S.C. §§ 1141 and 1332. Smallwood v.
Ill. Cent. R. Co., 385 F.3d 568, 571 n.1 and 572-73 (5th Cir.
2004)(en banc), cert. denied, 544 U.S. 992 (2005).
-12-

A party claiming improper joinder based on the second type bears a
heavy burden of showing that there is no possibility of recovery by
the plaintiff against the in-state defendant, i.e., in other words
that there is no reasonable basis for predicting that state law
would allow recovery against the in-state defendant.

Travis v.

Irby, 326 F.3d 644, 649 (5th Cir. 2003); Smallwood, 385 F.3d at 576
(“[T]here is no possibility of recovery by the plaintiff against an
in-state defendant . . . stated differently means that there is no
reasonable basis for the district court to predict that the
plaintiff might be able to recover against an in-state defendant.
To reduce possible confusion, we adopt this phrasing of the
required proof and reject all others, whether the others appear to
describe the same standard or not.”).

A “reasonable basis” means

more than a mere a hypothetical basis.

Griggs v. State Farm

Lloyds, 181 F.3d 694, 701 (5th Cir. 1999)(“whether the plaintiff has
stated a valid state law cause of action depends upon and is tied
to the factual fit between the plaintiffs’ allegations and the
pleaded theory of recovery”).
To determine whether a plaintiff has a “reasonable basis for
recovery under state law, the court may “conduct a Rule 12(b)(6)type analysis.”

Smallwood, 385 F.3d at 573; Anderson v. Georgia

Gulf Lake Charles, 342 Fed. Appx. 911, 915 (5th Cir. 2009).

First

the court should look at the pleadings to determine whether the
allegations state a claim under state law against the in-state

-13-

defendant.

Smallwood, 385 F.3d at 573.

If the “plaintiff has

stated a claim, but has misstated or omitted discrete facts that
would determine the propriety of joinder,” the court may look
beyond the pleadings and consider summary judgment-type evidence.
Georgia Gulf, 342 Fed. Appx. at 915-16.

Discovery should be

restricted and the summary inquiry should be limited to identifying
“discrete

and

undisputed

facts

that

would

bar

a

plaintiff’s

recovery against an in-state defendant; anything more risks ‘moving
the court beyond jurisdiction and into the resolution of the merits
. . . .’”

Id. at 916, quoting Smallwood, 385 F.3d at 573-74.

A

defendant may submit and the court may consider affidavits and
deposition
petition.
Cir. 1990).

transcripts

in

support

of

the

defendant’s

removal

Carriere v. Sears, Roebuck & Co., 893 F.2d 98, 100 (5th
Furthermore, where the reasons for finding that there

is no reasonable basis for recovery against the in-state defendant
would also dispose of all claims against the diverse defendants,
the entire case should be remanded because “there is no improper
joinder; there is only a lawsuit lacking merit.”

Id. at 574.

Moreover, “the existence of even a single valid cause of
action against the in-state defendants (despite the pleading of
several unavailing claims) requires remand of the entire case to
state court.”

Grey v. Beverly Enterprises-Mississippi, Inc., 390

F.3d 400, 412 & n.11 (5th Cir. 2004)(and cases cited therein).
The district court must resolve all contested fact issues and

-14-

ambiguities of state law in favor of the plaintiff and remand.
Gasch, 491 F.3d at 281.

The Fifth Circuit explains, since “‘the

effect of removal is to deprive the state court of an action
properly

before

concerns.’

it,

removal

raises

significant

federalism

The removal statute is therefore to be strictly

construed, and any doubt about the propriety of removal must be
resolved in favor of remand.”

Id. at 281-82, quoting Carpenter v.

Wichita Falls Indep. Sch. Dist., 44 F.3d 362, 365-66 (5th Cir.
1995).

Furthermore, “[i]f at any time before final judgment it

appears that the district court lacks jurisdiction, the case shall
be remanded.”

18 U.S.C. § 1447(c).

In addition to satisfying jurisdictional requirements, a
removing defendant must also satisfy procedural requirements.
Under 28 U.S.C. § 1446(b),4 failure to file for removal within
thirty days of being served with a copy of the pleading or summons
is a procedural defect warranting remand.
F.2d 1518, 1522 (5th Cir. 1991).

In re Shell Oil Co., 932

If at first the case is not

removable, “a notice of removal may be filed within 30 days after
4

Section 1446(b)(1) states in full,

The notice of removal of a civil action or proceeding
shall be filed within 30 days after the receipt by the
defendant, through service or otherwise, of a copy of
the initial pleading setting forth the claim for relief
upon which such action or proceeding is based, or
within 30 days after the service of summons upon the
defendant if such initial pleading has then been filed
in court and is not required to be served on the
defendant, whichever period is shorter.
-15-

receipt by the defendant, through service or otherwise, of an
amended pleading, motion, order or other paper from which it may
first be ascertained that the case is one which is or has become
removable.” 28 U.S.C. § 1446(b)(3).
1446(b)(3)

may

be

discovery

The “other paper” under §

responses,

pleadings,

deposition

transcripts, and attorney communications. Still v. Georgia-Pacific
Corp., 965 F. Supp. 878, 881 (S.D. Miss. 1997)(and cases cited
therein).

Furthermore “the information supporting removal in a

copy of an amended pleading, motion, order or other paper must be
‘unequivocally clear and certain’ to start the time limit running
for a notice of removal under the second paragraph of section
1446(b).”

Bosky v. Kroger Texas, LP, 288 F.3d 208, 211 (5th Cir.

2002).
Furthermore, “all defendants who have been properly joined and
served must join in or consent to the removal of the action.”
U.S.C. § 1446(b)(2)(A).

28

The absence of such joint consent is a

procedural, not a jurisdictional, defect.

Johnson v. Helmerich &

Payne, Inc., 892 F.3d 422, 423 (5th Cir. 2009).

The removal is

procedurally defective if such consent is not timely obtained. Doe
v. Kerwood, 969 F.2d 165, 167-69 (5th Cir. 1992).

Moreover there

must be “some timely written indication” of each served defendant’s
consent.

Getty Oil Corp., a Div. of Texaco, Inc. v. Ins. Co. of N.

America, 841 F.2d 1255, 1262 (5th Cir. 1998).

An exception to the

rule of consent is that nominal or formal parties need not join in

-16-

the removal petition.

In re Beazley, No. 09-20005, 2009 WL

7361370, at *4 (5th Cir. May 4, 2009)(“To establish the non-removing
parties are nominal parties, the removing party must show . . .
that there is no possibility that the plaintiff would be able to
establish a cause of action against the non-removing defendants in
state court.

In determining whether a party is nominal, a court

asks ‘whether in the absence of the [party], the Court can enter a
final judgment consistent with equity and good conscience, e.g.,
one ‘who has possession of the funds which are the subject of
litigation [and] . . . must often be joined purely as a means of
facilitating collection.

The test is not dependent on how the

plaintiff labels its complaint, but rather on the practical effect
of a judgment on a given defendant.”, citing Farias v. Bexar County
Bd. of Trustees for Mental Health Mental Retardation Services, 925
F.2d 866, 871 (5th Cir. 1991)(“To establish that non-removing
parties are nominal parties, ‘the removing party must show . . .
that there is no possibility that the plaintiff would be able to
establish a cause of action against non-removing defendants in
state court.”); Louisiana v. Union Oil Co. of Calif., 458 F.3d 364,
366-67 (5th Cir. 2006).
“A claim of fraudulent joinder must be pleaded with
particularity and supported by clear and convincing evidence.”
Parks v. New York Times Co., 308 F.2d 474, 478 (5th Cir. 1962),
cert. denied, 376 U.S. 949 (1964).

-17-

The elements of common-law fraud in Texas are (1) a material
misrepresentation was made; (2) the representation was false; (3)
when it was made, the speaker knew the misrepresentation was false
or made recklessly without any knowledge of the truth and as a
positive assertion; (4) the speaker made the representation with
the intent that the other party should rely on it; (5) the other
party acted in reliance on the representation; and (6) the other
party thereby suffered injury.

Massey v. EMC Mortgage Corp., 546

Fed. Appx. 477, 481 (5th Cir. Nov. 5, 2013).
Factual Background
On

July

22,

2005,

Khamsene

K.

Luangpakdy

(“Luangpakdy”)

executed a Texas Home Equity Security Instrument (the “Security
Instrument,” Exhibit A) on 7403 Woodnettle Lane, Houston, Texas
(the “Property”) in favor of Mortgage Electronic Registration
Systems, Inc. (“MERS”) as nominee for lender Countrywide Home
Loans, Inc. (“Countrywide”) and its successors and assigns, as
security for a Texas Home Equity Note in the amount of $79,200.00,
executed by Luangpakdy in favor of Countrywide.5

On or around

August

the

24,

2011

MERS

assigned

its

5

interest

in

Security

The Court may take judicial notice of the instruments cited
in this Opinion and Order because they were filed in the Official
Public Records of Harris County, Texas.
See Funk v. Stryker
th
Corp., 631 F.3d 777, 783 (5 Cir. 2011), citing Federal Rule of
Evidence 201. Exhibit A was designated Document No. Y683415,
filed on August 11, 2005.
-18-

Instrument to Mellon (the “First Assignment,” Ex. B).6

On or

around November 28, 2012 the Security Instrument was assigned to
the Bank of New York Mellon Trust Company, N.A., as trustee on
behalf of CWABS Asset-Backed Certificates Trust 2005-9 (“BONY”)(the
“Second Assignment,” Ex. C).7
After foreclosure on the property of Luangpakdy for materially
defaulting

on

the

note

and

failing

to

cure

when

given

the

opportunity, on August 31, 2015 Ditech, as the mortgage servicer
for BONY, filed a Petition for Expedited Foreclosure of a Lien
Securing a Home Equity Loan (the “Foreclosure Petition,” Ex. D, a
matter of public record) in the 157th Judicial District Court for
Harris County.

The court issued an Order Granting Petition to

Proceed with Notice of Sale and Non-Judicial Foreclosure Sale (the
“Foreclosure Order,” Exhibit E, also a matter of public record), in
accordance with the terms of the Note and Security Instrument.
August

2,

trustee’s

2016
sale

BONY
for

purchased

$103,149.08

the

Property

(Exhibit

F,

at

a

On

substitute

publicly

recorded

“Substitute Trustee’s Deed”).8
Plaintiff claims that Jaime Mena (“Mena”) acquired the title
to the “Property” on or about April 25, 2012 through a Deed Under
Order of Sale executed by Constable Precinct #1 Kenneth W. Berry,

6

Instrument No. 20110358575, filed on August 25, 2011.

7

Instrument No. 20120576251, filed on August 25, 2011.

8

Document No. 2016-375909, filed on August 23, 2016.
-19-

which was duly recorded with the Harris County Clerk.

On or about

February 27, 2015 Mena transferred ownership of the Property to
Plaintiff David Ricardo through Deed, which was also recorded with
the Harris County Clerk, and Ricardo remained the owner and
possessor.

Ricardo maintains that at this point Defendants had

notice that Ricardo was the new owner of the Property.
On or about September 5, 2016, Plaintiff allegedly learned
that

Defendants

Plaintiff

of

had

this

unlawfully
real

entered

Property

upon

despite

and

having

dispossessed
actual

and

constructive notice that Plaintiff was the new owner of the real
property.

Defendants refused to recognize Plaintiff’s legal right

to cure Luangpakdy’s default, but instead committed fraud in filing
the Petition for Expedited Foreclosure against Luangpakdy, who they
knew was no longer the owner of the Property, without giving
Plaintiff any notice.

Moreover in the court filings Defendants

failed to advise the court of the Property’s new ownership.
On September 20, 2016, alleging he is the owner and tenant of
the Property of which he was wrongfully dispossessed, Plaintiff
sued Defendants in a Trespass to Try Title Suit in the 189th
Judicial District Court, Harris County, Texas, seeking judgment for
title to and possession of the Property, which was removed by
Defendants to this Court.

The petition alleges that Defendants

used and occupied the premises for at least fifteen days before
Plaintiff filed the suit.

Plaintiff claimed that the rental value

-20-

of the premises during that occupancy was $80.00 per day. Moreover
Defendants allegedly altered and destroyed Plaintiff’s personal
property, valued at $10,000.00.

At the time of the alleged

wrongful occupation, Plaintiff also claims he was rightfully in
possession and had an immediate right to possession of certain
personal properties, including building materials, building tools
and appliances and fixtures, with a fair market value of at least
$8,000. Defendants unlawfully assumed dominion and control over
these items.

Plaintiff has since inspected the Property but could

not find his tools there, and Defendants refused to return them,
causing Defendants a loss in the amount of $8,000.00.

Plaintiff

claims that Defendants’ conversion of Plaintiff’s personal property
was fraudulent and malicious in that it was intended to cause
substantial injury to Plaintiff.
that

he

is

entitled

to

Plaintiff additionally asserts

exemplary

damages

in

the

amount

of

$20,000,000.00.
In contrast, Ditech claims that according to the real property
records, Mena purchased the Property for $1,000.00 at a junior lien
foreclosure sale conducted by Willowood Maintenance Association
(the “HOA”) on November 1, 2017.9

Significantly, the applicable

Declaration of Restrictions10 that created the HOA’s lien states
9

Exhibit G, the “HOA Deed,” filed on June 28, 2012, as
Document No. 20120287600.
10

Ex. H at p. 7, incorporated into the complaint by
reference, and recorded as Number E974266 on December 7, 1976.
-21-

that it was “subordinate and inferior to any liens given to secure
the payment of monies in connection with the purchase of any lot or
improvements, or the construction of improvements on any lot.”

On

February 27, 2015 Mena deeded his interest in the HOA lien to
Plaintiff (the “Plaintiff’s Deed,” Exhibit I) for consideration in
the amount of ten dollars, as memorialized in the Deed filed in the
Public Records.11
Defendants Mellon, Ditech, and BANA removed the instant suit
on November 3, 2016.
BANA’s Motion to Dismiss (#6)
BANA claims that Plaintiff, in an effort to continue residing
on the Property, and despite a valid foreclosure against former
owner Luangpakdy on August 2, 2016, acquired title to the Property
on or about February 27, 2015, pursuant to a deed from Mena.
Defendant responds that Ricardo ignores a first priority lien on
the Property, which was foreclosed upon by the mortgagee of record
after mortgagor Luangpadky’s default and subsequent failure to cure
and the mortgagee’s acceleration of the debt.
More specifically on or around July 22, 2005 Luangpakdy
executed a Texas Home Equity Security Instrument (the “Security
Instrument,” #6, Ex. A) on the Property in favor of Mortgage
Electronic Registration Systems, Inc. (“MERS”), as nominee for
lender
11

Countryside

Home

Loans,

Inc.

(“Countrywide”),

Document No. 20150081655, filed on March 2, 2015.
-22-

and

its

successors and assigns, as security for a Texas Home Equity Note in
the amount of $79,200.00, executed by Luangpakdy in favor of
Countrywide.12

On or around August 24, 2011 MERS assigned its

interest in the Security Instrument to The Bank of New York Mellon
f/k/a The Bank of New York as Trustee for the Certificateholders of
CWMBS, Inc., Asset-Backed Certificates, Series 2005-913 (the “First
Assignment”).

#6, Ex. B.

On or around November 28, 2012 the

Security Instrument was assigned to The Bank of New York Mellon
Trust Company, N.A., as trustee on behalf of CWABS Asset-Backed
Certificates Trust 2005-9 (“BONY”)(the “Second Assignment”).

#6,

Ex. C.
After Luangpakdy defaulted and failed to cure the default,
Ditech, as the mortgage servicer for mortgagee BONY, filed a
Petition for Expedited Foreclosure of a Lien Securing a Home Equity
Loan (the “Foreclosure Petition,” Ex. D) on August 31, 2015 in the
157th Judicial District Court due to a material breach by Luangpakdy
of the Security Instrument and the underlying Note. On February 3,
2016 the court issued an Order Granting Petition to Proceed with
Notice of Sale and Non-Judicial Sale (“the Foreclosure Order,” Ex.
E), stating, “Ditech may proceed with non-judicial foreclosure of
the Property in accordance with the terms of the Note and Security
12

In the Official Public Records of Harris County, Texas,
it was designated as Document No. Y683415 on August 11, 2005.
13

Filed in the Official Public Records of Harris County,
Texas as Document No. Y683415 on August 11, 2005.
-23-

Instrument, and any supplements or amendments thereto, and Texas
Property Code § 51.002 (“Sale of Real Property Under Contract
Lien”).

The Property was sold on August 2, 2016 at a substitute

trustee’s sale and was purchased by BONY for $103,149.08 (Ex. F,
Doc. No. 2016-375909 on August 23, 2016”).
Ricardo then filed the instant lawsuit on September 20, 2016,
claiming that he is the owner and tenant of the Property, of which
he was wrongfully dispossessed on September 5, 2016 after the
August 2, 2016 foreclosure sale.

Ricardo bases his claim on the
Complaint, ¶ 4.14

April 25, 2012 deed from Mena.

Under the

relevant Declaration of Restrictions that created the HOA’s lien,
the HOA’s lien is “subordinate and inferior to any liens given to
secure the payment of monies in connection with the purchase of any
lot or improvements or the construction of improvements on any
lot.”

Ex. H at 7 (Document No. 20120287600 on June 28, 2012).

On

February 27, 2015 Mena deeded his interest in the HOA lien to
Plaintiff (the “Plaintiff’s Deed,” Ex. I).
the

Property

consideration

that
is

Plaintiff

inferior

and

obtained
subordinate

Thus the interest in
from
to

Mena
BONY’s

for

$10

Security

Interest lien on the Property.
BANA further asserts that Plaintiff failed to state a claim
14

As noted, Mena purchased the Property for $1,000.00 at a
junior lien foreclosure sale conducted by Willowood Maintenance
Association (the “HOA”) on November 2, 2011. (Deed under Order of
Sale (“HOA Deed,” Ex. G, Document #20120287600, filed in Public
Records on June 28, 2012).
-24-

for fraud under Rule 9(b) because he alleges no facts in support
and makes no specific allegations of fraudulent conduct by BANA.
It is clear from the pleadings that Plaintiff was not a
borrower with respect to the Property, and he alleges no facts
showing that he had a contractual or other relationship with BANA.
He

has

not

alleged

any

facts

about

a

false

or

material

misrepresentation made to him by BANA with knowledge of its falsity
or with intent that Plaintiff rely on it, nor does Plaintiff claim
that

he

detrimentally

misrepresentation.

relied

on

any

such

false

or

material

Nor was BANA the mortgage servicer, nor the

mortgagee during the relevant time, i.e., before or after the
February 3, 2016 Foreclosure Order.

Instead the Public Records

shows that BONY was the mortgagee, and Ditech was the mortgage
servicer.

Ex. C (Second Assignment); Exhibit E (Judicial Order).

Thus there is no plausibility to Plaintiff’s fraud claim against
BANA.
BANA

also

maintains

that

Plaintiff’s

foreclosure fails as a matter of law.

claim

for

wrongful

In Texas, “a debtor may

recover for wrongful foreclosure when an irregularity in the
foreclosure sale contributes to recovery of an inadequate price of
the property.” Matthews v. JPMorgan Chase Bank, N.A., No. 3:11-CV0972-M, 2011 WL 3347920, at *2 (N.D. Tex. Aug. 1, 2011).

The

plaintiff must allege and ultimately prove “(1) a defect in the
foreclosure sale proceedings; (2) a grossly inadequate selling

-25-

price; and (3) a causal connection between the defect and the
grossly

inadequate

selling

price.”

Hurd

v.

BAC

Home

Loan

Servicing, LP, 880 F. Supp. 2d 747, 766 (N.D. Tex. 2012), citing
Sauceda v. GMAC Mort. Corp., 268 S.W. 3d 135, 139 (Tex. App.-Corpus Christi 2008, no pet.).

BANA asserts that Plaintiff fails

to plead any facts to establish a defect in the foreclosure sale
proceedings, a grossly inadequate selling price, or a causal
connection; therefore he does not plead a plausible claim for
relief.
Furthermore, Plaintiff does not and cannot state a plausible
wrongful foreclosure claim against BANA because BANA was not the
mortgagee or the foreclosing entity.

Instead, as the Second

Assignment and Foreclosure Order evidence, BONY was the mortgagee
of record and Ditech was the mortgage servicer.

Exhibits C and E.

Thus the Court should dismiss the wrongful foreclosure claim
against BANA.
Plaintiff’s claim for wrongful eviction against BANA should
also be dismissed because it also fails as a matter of law.

As in

other claims in Plaintiff’s complaint, he refers to “defendants” in
general and makes no specific allegations against just BANA, nor
against any other singly identified Defendant. Moreover to prevail
on a wrongful eviction claim, Ricardo must show (1) the existence
of an unexpired lease; (2) occupancy of the property in question;
and (3) eviction or dispossession by the landlord; and (4) damages

-26-

attributable to the eviction.

Ezennia v. Well Fargo Bank, N.A.,

No. Civ. A. H-10-5004, 2012 WL 1556170, at *8 (S.D. Tex. Apr. 27,
2012). BANA observes that it is not only uncertain which defendant
Plaintiff is charging with wrongful eviction, but the Public
Records show that BANA has no interest in the Property and it was
neither the mortgagee nor the mortgage servicer on the date of
foreclosure.

Exhibits C, E, and F.

Nor does Ricardo plead any

facts to prove any wrongdoing by BANA, no less facts that would
establish each of the elements of a wrongful eviction claim against
BANA.

Therefore the Court should dismiss the wrongful eviction

claim in its entirety, with prejudice.
BANA further maintains that Plaintiff cannot state a plausible
claim for conversion and that his allegations “are nothing more
than a recast of his insufficiently pleaded claims for wrongful
eviction and/or wrongful foreclosure.”15

Plaintiff again pleads

vaguely, “Defendants unlawfully and without authority assumed
dominion and control over plaintiff’s personal property.”
15

As with

“Conversion is the ‘unauthorized and wrongful assumption
and exercise of domain and control over the personal property of
another, to the exclusion of or inconsistent with the owners’
rights.’” Lawyers Title Co. v. J.G. Cooper Development, Inc.,
424 S.W. 3d 713, 718 (Tex. App.--Dallas 2014, pet. denied). The
elements of conversion under Texas law are “(1) the plaintiff
owned or had possession of the property or entitlement to
possession; (2) the defendant unlawfully and without
authorization, assumed and exercised control over the property to
the exclusion of, or inconsistent with, the plaintiff’s rights as
an owner; (3) the plaintiff demanded return of the property; and
(4) the defendant refused to return the property.” Id. The
plaintiff must also prove he was injured by the conversion. Id.
-27-

Plaintiff’s wrongful foreclosure and wrongful eviction claims,
Ricardo alleges no facts establishing any wrongdoing by BANA, and
again the Public Records demonstrate clearly that BANA was not the
mortgagee nor the mortgage service on the date of the foreclosure.
Exhibits C, E, and F.
Finally BANA contends that Plaintiff is not entitled to “the
declaratory judgment for title to and possession of the real
property which is the subject matter of this suit,” which he seeks
because he has not and cannot state a cognizable claim for relief
against

BANA.

Complaint

at

4.

See

Lindsey

v.

Ocwen

Loan

Servicing, LLP, No. 3:10-CV-967-L, 2011 WL 2550833, at *6 (N.D.
Tex. June 27, 2011)(dismissing claim for declaratory judgment
because “[a]s Plaintiff’s underlying claim for wrongful foreclosure
will be dismissed, there is nothing remaining for the court to
adjudicate in this proceeding, and Plaintiff is not entitled to any
such relief.”).
In sum, BANA requests the Court to grant BANA’s Rule 12(b)(6)
motion in its entirety with prejudice for failure as a matter of
law to state any cognizable claim for relief.
Plaintiff’s Motions to Remand (#10 and 21 (amended))
Defendants contend that this case should be remanded to state
court because Ken Lewis (“Lewis”) is a citizen of Texas, where this
action was brought, and was thus improperly joined, as well as
because Lewis not a real and substantial party with a real interest

-28-

in this litigation. Plaintiff disagrees, notes Defendants bear the
burden of showing that Plaintiff has no possibility of recovering
against Lewis, and insists Defendants have failed to meet that
burden.

Plaintiff claims Defendants have not pointed to even one

fact that would cause anyone to doubt that Plaintiff has the
ability to obtain a judgment against Lewis.

Plaintiff has alleged

that “defendants unlawfully entered and dispossessed the plaintiff
of this real property” and continued to hold it, that they “used
and

occupied

“attempt[ed]

it”
to

“under

sell”

it,

unlawful
that

possession,”

they

“altered

that

and

they

destroyed

plaintiff’s property,” and that they “refused to return plaintiff’s
personal property to plaintiff.”
Plaintiff

then

speculates

#10 at p. 4.
that

discovery

may

prove

the

following: that Lewis changed the locks on the property or ordered
them changed; he listed the property for sale or directed that it
be listed for sale; Lewis invited the general public to enter into
the property to view it and made appointments for them to do so;
Ricardo told Lewis that Ricardo is the owner of the property and
sent Lewis by email a copy of the deed granting ownership of the
property to Ricardo, but Lewis also told Ricardo that neither he
nor

the

personal

properties

inside

the

property

belonged

to

Ricardo; Lewis told Ricardo that Lewis had the right to change the
locks of the property and to open the property and to show the
property to anyone; Lewis told Ricardo that someone wanted Lewis to

-29-

sell the property; Lewis told Ricardo that the locks to the
property had been changed and that Ricardo had no right to go
inside; and Lewis told Ricardo that all Ricardo owned was a lien
that was subordinated to the lenders’ lien.

#10, p. 5.

For a prima facie case in a trespass to try title suit, which
“is a possessory action for recovery of land possessed by a
trespasser,” “there should be present legal right to possession
with such title as renders the possession lawful.”

Standard Oil

Co. of Texas v. Marshall, 265 F.2d 46, 50 (5th Cir. 1959), cert.
denied, 361 U.S. 915 (1959).
“that

he

was

in

possession

A plaintiff must plead and prove
of

the

premises

or

entitled

to

possession thereof. . . . If the plaintiff shows possession, his
own or a predecessor in title, prior to defendant’s possession, and
a regular chain of title connecting himself with such possession.”
Id.

See also Martin v. Amerman, 133 S.W. 3d 262, 265 (Tex.

2004)(“To prevail in a trespass-to-try-title action, a plaintiff
must usually (1) prove a regular chain of conveyances from the
sovereign, (2) establish superior title out of a common source, (3)
prove title by limitations, or (4) prove title by prior possession
coupled with proof that possession was not abandoned.”).
Plaintiffs assert that Defendants have not claimed that there
has been actual fraud in the pleading of jurisdictional facts here.
Furthermore they claim that all the necessary allegations for a
trespass-to-try-title

action

against

-30-

Lewis

are

present

in

Plaintiff’s petition:

possession in ¶ 5; his own or a predecessor

in title in ¶ 4; prior to Defendants’ possession in ¶¶ 4 and 5; and
a regular chain of title connecting himself in such possession in
¶ 4.
Plaintiff conclude that thus the Court should remand this case
and further award Plaintiff court costs, expenses, and attorney’s
fees

because

reasonable.

the

removal

of

this

case

was

not

objectively

American Airlines, Inc. v. Sabre, Inc., 694 F.3d 539,

541 (5th Cir. 2012).
Defendants’ Responses to Plaintiff’s Motions to Remand (#12 and 26)
In their first response, Defendants Mellon, Ditech, and BANA
answer

that

a

theoretical

possibility

Plaintiff’s here, will not bar removal.

of

recovery,

such

as

Badon v. R.J.R. Nabisco,

Inc., 224 F.3d 382, 386 n.4 (5th Cir. 2000); Griggs v. State Farm
Lloyds, 181 F.3d 694, 701 (5th Cir. 1999)(“While the burden of
demonstrating fraudulent joinder is a heavy one, we have never held
that a particular plaintiff might possibly establish liability by
mere hypothetical possibility that such an action could exist.

To

the contrary, whether the plaintiff has established a valid state
law cause of action depends upon and is tied to the factual fit
between the plaintiff’s allegations and the pleaded theory of
recovery.”).

Furthermore,

“when

plaintiffs

make

general

allegations and fail to support them with specific, underlying
facts, they have not established a reasonable basis for the Court
-31-

to predict that relief may be granted.”

Staples v. Merck & Co.,

270 F. Supp. 2d 833, 837 (N.D. Tex 2003), citing Great Plains Trust
co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 329 (5th Cir.
2002).
Despite Plaintiff’s claim that he can recover against Lewis on
a trespass-to-try-title claim, to the degree that Plaintiff’s
allegations against “defendants” is construed to refer to Lewis
particularly, Plaintiff fails to allege that Lewis claimed any
interest in the Property.

Instead, the text messages and emails

that Plaintiff attached to his motion to remand make clear that
Plaintiff considered Lewis to be acting on behalf of the other
Defendants.

#10 at 39 (“But I have ownership please send me the

deed of your client [...] [Y]our client took possession and
destruction of my property”)(emphasis added).

Because there is no

possibility of recovery against Lewis, he was improperly joined as
a defendant and his citizenship should be disregarded.
In their second response, Defendants repeat what they stated
in their Notice of Removal, i.e., Plaintiff neither alleges that
Lewis committed any act or omission

that would support a claim of

damages nor makes any viable allegation that Lewis has any interest
that will be affected by the relief he seeks.

Thus as a nominal or

fraudulently joined party, Lewis’ citizenship will be disregarded
for purposes of diversity jurisdiction and
is not required.

his consent to removal

Brown v. Demco, Inc., 792 F.2d 478, 481 (5th Cir,

-32-

1986); Getty Oil Corp. v. Ins, Co. of North Am., 841 F.2d 1254,
1261 (5th Cir. 1988).
Repeating their arguments in their first response, Defendants
also note that Plaintiff alleges only that Lewis is a realtor with
Re/Max Westside Realtors, makes no specific allegations regarding
Lewis and no explanation of Lewis’ connection to the instant
lawsuit

or

basis

for

naming

him

as

a

defendant,

speculates about what discovery might reveal.

and

merely

Grounds for removal

must be ascertainable from an examination of the four corners of
the initial pleading and not through a defendant’s subjective
knowledge or a duty to investigate further. Mumfrey v. CVS Pharm.,
719 F.3d 392, 399-400 (5th Cir. 2013)(Fifth Circuit rule is that
“the thirty-day clock [for removal] is not triggered unless the
initial pleading ‘affirmatively reveals on its face’ that the
plaintiff’s sought damages exceeding the jurisdictional amount”),
citing Chapman v. Powermatic, Inc., 969 F.2d 160 (5th Cir. 1992).
Ditech’s Rule 12(c) Motion for Judgment on the Pleadings (#20)
Ditech claims that Plaintiff does not and cannot state any
cognizable claim for relief against Ditech and moves under Rule
12(c) for dismissal on the pleadings.
Ditech argues that Plaintiff fails to state a claim for fraud
that meets the heightened pleading requirements of Rule 9(b), but
instead makes vague and conclusory allegations of fraud and malice
and alleges no facts and no specifics as to any fraudulent conduct
-33-

by Ditech. Patently absent from Plaintiff’s pleadings are the who,
what, where, when and how of statements alleged to be fraudulent.
It is clear that Plaintiff was not a borrower regarding the
Property and alleges no facts showing that he had a contractual or
other relationship with Ditech. Plaintiff also fails to allege any
facts regarding any false or material representation made by Ditech
to Plaintiff with knowledge of its falsity, with the intent that
Plaintiff rely on it, nor does Plaintiff allege he detrimentally
relied on such false or material misrepresentation.

Therefore

there is no plausibility to Plaintiff’s fraud claim against Ditech.
Furthermore, contends Ditech, Plaintiff’s wrongful foreclosure
claim fails as a matter of law.

Under Texas law, “a debtor may

recover for wrongful foreclosure when an irregularity in the
foreclosure sale contributes to recovery of an inadequate price of
the property.” Matthews v. JPMorgan Chase Bank, N.A., No. 3:11-CV00972-M, 2011 WL 3347920, at *2 (N.D. Tex. Aug. 1, 2011).

To

recover on such a claim, a plaintiff must not only show a defect in
the foreclosure process, but also an inadequate selling price
resulting from that defect.

Biggers v. BAC Home Loans Servicing,

LP, 767 F. Supp. 2d 725, 729 (N.D. Tex. 2011).

Plaintiff failed to

plead any facts establishing a defect in the foreclosure sale
proceedings, a grossly inadequate selling price nor a causal
connection, so he fails to plead a plausible claim for relief.
Furthermore Plaintiff does not and cannot state a wrongful

-34-

foreclosure

claim

against

Ditech

mortgagee or the foreclosing entity.

because

Ditech

was

not

the

In the Second Assignment the

Foreclosure Order and Substitute Trustee’s Deed establish that BONY
was the mortgagee of record and the foreclosing entity.

#2,

Exhibits C,E, and F.
Plaintiff’s claim of wrongful eviction also fails as a matter
of law. Although Plaintiff speaks only of “Defendants” as a group,
with no specific allegations against Ditech, the public record
makes clear that Ditech was neither the foreclosing entity nor the
purchaser at the foreclosure sale; therefore it is not plausible
that Ditech would attempt to evict Plaintiff.

#20, Exhibit F.

Moreover, Plaintiff fails to plead any facts to establish any
wrongdoing by Ditech, no less facts what would establish each of
the elements required to plead wrongful eviction against Plaintiff
under Ezennia, 20012 WL 1556170, at *8.
Ditech also objects that Plaintiff does not and cannot state
a cognizable claim for conversion against Ditech.

Plaintiff’s

allegations are actually a repetition of his insufficiently pleaded
claims for wrongful eviction and/or wrongful foreclosure.

For a

conversion claim under Texas law, Plaintiff must assert that he
legally possessed the property or was entitled to it, wrongfully
exercised dominion and control over the property and dispossessed
plaintiff, plaintiff demanded return of the property, and defendant
refused to return it.

U.S. v. Boardwalk Motor Sports, Ltd., No.

-35-

4:08-cv-110, 2010 WL 1717994, at *2 (E.D.
Ditech

points

out

that

Plaintiff

Tex. Jan. 29, 2010).
fails

to

plead

facts

demonstrating that Plaintiff or his belongings were removed from
the Property by Ditech, or facts establishing any wrongdoing by
Ditech.

Here, too, the public record shows that Ditech had no

interest in the Property following foreclosure.

#20, Ex. F.

Thus

the conversion claim should be completely dismissed with prejudice.
Finally Ditech, too, insists Plaintiff is not entitled to
declaratory relief because he has not stated a cognizable claim
against Ditech.

Without a viable, underlying claim to support his

request

declaratory

for

a

judgment,

he

is

not

entitled

to

declaratory relief.
Plaintiff has failed to file a response to Ditech’s motion.
Mellon’s Rule 12(b)(6) Motion to Dismiss (#24)
Mellon maintains that Plaintiff also fails to state a claim of
wrongful foreclosure against Mellon as a matter of law:
fails

to

allege

that

there

was

a

defect

in

the

Plaintiff

foreclosure

proceedings or that the Property sold for an inadequate price, and
therefor cannot allege a causal connection between the two.

Also

Texas law clearly requires that to set aside, cancel, and rescind
a foreclosure sale, a borrower must tender the full amount due
under the note.

Lambert v. First Nat’l Bank of Bowie, 993 S.W. 2d

833, 835-36 (Tex. App.--Fort Worth 1999, pet. denied); Fillion v.
David Silvers Co., 709 S.W. 2d 240, 246 (Tex. App.--Houston [14th

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Dist.] 1986, writ ref’d)(“Tender of whatever sum is owed on the
mortgage debt is a condition precedent to the mortgagor’s recovery
of title from a mortgagee who is in possession and claims title
under a void foreclosure sale.”). Plaintiff has failed to meet all
of these requirements.
As discussed by other Defendants in their motions, Plaintiff
has also failed to plead facts that satisfy the elements of a
wrongful eviction claim under Ezennia, 2012 WL 1556170, at *8, to
meet Rule 9(b)’s heightened pleading standards, and the elements of
a claim for conversion under Texas law.
Plaintiff has not filed a response to Mellon’s motion.
Plaintiff’s Motion for Leave to Amend (#31)
Plaintiff’s

motion,

filed

on

March

17,

2017,

references

Federal Rule of Civil Procedure 15(a)(2)(“The court should freely
give leave when justice so requires”) in requesting leave to amend
to “present a few additional facts of which the Court can take
judicial notice as well as jurisprudence and legal arguments which
support

Plaintiff’s

statement

of

claim

statement

of

[rescission]

claim”

and

supported

presented in the first statement of claim.”

by

“one
the

additional
same

facts

He notes the docket

control schedule deadline for fling motions for leave to amend and
to join new parties is not until June 1, 2017.

He also states that

because Defendants placed the Property on expedited sale and
closing, he had insufficient time to file his petition in state

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court.

He also asserts that he has not previously sought to amend

his petition.
BANA, BONY, and Ditech’s Opposition (#34)
Defendants contend that Plaintiff’s proposed “new claims” in
the Proposed Amended Complaint fail for the same reasons as his
original claims:

“they are simply a recast of the claims that

Magistrate Judge Stacy has already addressed and determine should
be dismissed with prejudice because Plaintiff fails to state a
plausible claim for relief.

His new Proposed Amended Complaint

erroneously asserts that as a junior lienholder, Plaintiff was a
necessary party to Ditech’s application for expedited foreclosure
under Rule 736 of the Texas Rules of Civil Procedure (Complaint ¶
8.b)

and

that

Plaintiff

was

entitled

to

rescission

of

the

foreclosure deed and title and possession of the Property (id. at
¶ 15.c).
ones:

His argument fails for the same reason as his earlier

his interest in the Property via the junior HOA lien (#6-9)

conveyed to him by Mena was subject to BONY’s superior lien on the
Property via the Deed of Trust (#6-1).
Magistrate Judge Stacy’s M&Rs (#30 and 33)
Magistrate Judge Stacy recommended in #30 that BANA, BONY, and
Ditech’s motions to dismiss be granted and the claims against these
Defendants dismissed with prejudice basically for the reasons

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stated

by

Defendants.16

Furthermore

the

Magistrate

Judge

16

Although the Court agrees with the Magistrate Judge’s
ultimate results, the Court does not adopt the Magistrate Judge’s
M&R’s only because it disagrees with some of her discussions in
matters that do not affect the outcome. For example, in #30 at
pp. 6-7, she refers to a trespass-to-try-title claim as
equivalent to a quiet-title claim and continues discussing the
latter. The two are not the same, and it is the trespass-to-trytitle claim at issue here. See, e.g., Katz v. Rodriguez, 563
S.W. 2d 627, 629 (Tex. Civ App.--Corpus Christi 1977)(citations
omitted):
A suit to remove cloud from title or suit to quiet
title is different from an action in trespass to try
title. A suit in trespass to try title is statutory
and accords a legal remedy, while a suit to remove
cloud or to quiet title accords an equitable remedy. .
. . Trespass to try title is an action to recover the
possession of land unlawfully withheld from an owner
who has a right of immediate possession. . . . In this
action no other principle is more pervasive than that
which requires the plaintiff to recover on the strength
of his own title; proof that the defendant has no title
is insufficient for recovery. Plaintiff may meet this
burden in one of four ways: 1) he can show title
emanating from the sovereignty of the soil to himself;
or 2) he can show title in himself emanating from a
common source to which the defendant claims; or 3) he
may show title through limitations; or 4) he can show
prior possession antedating defendant’s possession.
A suit to quiet title requires the allegation of
an adverse claim. The gravity of that claim must be
sufficient to place the property owner into a position
that if such claim is asserted, it may cast a cloud
upon his enjoyment of the property. . . . . Although
claimant must base his action on the strength of his
own title, he is not required to trace his title to
either the sovereign or to a common source, as argued
by defendant. . . . It is clear that the claimant must
show an interest of some kind, but it is error that the
claimant must show fee simple or uncontestable interest
to prevail in a suit to remove cloud on title or to
quiet title.
See also Serna v. U.S. Bank, N.A., No. CIV.A. H-13-2559, 2014 WL
108732, at *2 (S.D. Tex. 2014)(“To state a claim for trespass to
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recommended that the Court deny Plaintiff’s motion for leave to
amend even though Rule 15(a) states that leave should be freely
given when justice so requires because Plaintiff did not respond to
Defendants’ motions and “[t]here is no reasonable likelihood that
Plaintiff, if given the opportunity to amend, could state a
plausible claim.”

#30 at p. 12.

Magistrate Judge Stacy’s second M&R (#33) recommended that the
Court deny

Plaintiff’s motion for remand because no party claims

that Plaintiff committed fraud in naming Lewis as a defendant and
Plaintiff failed to make any specific allegations against Lewis
that would support a claim against him.

She specifically notes

that Plaintiff has not stated an actionable claim of trespass to
try title against Lewis, and that Plaintiff’s suggestion that
discovery might reveal something to support a claim is “wholly
speculative.”

In contrast Magistrate Judge Stacy found that

Defendants met their heavy burden to show that Lewis was improperly
joined

for

purposes

of

diversity

jurisdiction

and

that

his

citizenship should be disregarded for the same purpose.

No

objections to the M&Rs were filed.
Court’s Decision
The Court agrees that all three Defendants’ motions to dismiss

try title, the plaintiff must allege, inter alia, that the
defendant unlawfully entered upon and dispossessed him of such
premises, stating the date, and withholds from him the possession
thereof.”)
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under 12(b)(6) or 12(c) should be granted for the reasons set forth
by Defendants and by Magistrate Judge Stacy, whose M&Rs the Court
finds are clearly not erroneous or contrary to law.

Id., citing

U.S. v. Wilson, 864 F.2d 1219, 1221 (5th Cir. 1989).
As for Plaintiff’s motion for leave to amend, even under Rule
15(a) a court has discretion in deciding whether to grant leave to
amend.

Foman v. Davis, 371 U.S. 178, 181 (1962).

Since the

language of Federal Rule of Civil Procedure 15(a) “‘evinces a bias
in favor of granting leave to amend,” the court must find a
“substantial reason” to deny such a request.

Ambulatory Infusion

Therapy Specialists, Inc. v. Aetna Life Ins. Co., Civ. A. No. H-054389, 2006 WL 2521411, *3 (S.D. Tex. Aug. 29, 2006), quoting Smith
v. EMC Corp., 393 F.3d 590, 595 (5th Cir. 2004), and Mayeaux v. La.
Health Serv. & Indem. Co., 376 F.3d 420, 425 (5th Cir. 2004).
Nevertheless

leave

to

amend

“is

not

automatic.”

Matagorda

Ventures, Inc. v. Travelers Lloyds Ins. Co., 203 F. Supp. 2d 704,
718 (S.D. Tex. 2000), citing Dussouy v. Gulf Coast Inv. Corp., 660
F.2d 594, 598 (5th Cir. 1981).

Nevertheless even under the relaxed

standard of Rule 15(a), the court should deny leave to amend if it
determines that “the proposed change clearly is frivolous or
advances a claim or defense that is legally insufficient on its
face . . . .”

6 Charles A. Wright, Arthur R. Miller & Mary Kay

Kane, Federal Practice and Proc. § 1487 (2d ed. 1990).
Once a scheduling order is entered and the deadline for
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amending pleadings is past, however, as was the case here, Rule
16(b) governs instead of Rule 15(a).

The scheduling order (#6) in

this case set a deadline of January 15, 2016 for amended pleadings;
Plaintiffs did not file their motion for leave to amend (#17) until
May 19, 2016. Thus Magistrate Judge Stacy should have applied Rule
16(b) in deciding whether to grant Plaintiffs’ motion for leave to
amend.

Furthermore, “[o]nce a scheduling order deadline to amend

a pleading has expired, the party seeking leave to amend is
effectively asking the court for leave to amend both the scheduling
order and the pleading.”

Escobar v. City of Houston, Civ. A. No.

04-1945, 2007 WL 2003, at *1 (S.D. Tex. Feb. 11, 2007).

In

contrast to Rule 15's “freely given” standard for amendment, Rule
16(b)(4) mandates that “[a] schedule may be modified only for good
cause and with the judge’s consent.”

Good cause requires a “party

seeking relief to show that the deadlines cannot reasonably be met
despite the diligence of the party needing the extension.”
Southwestern Bell Telephone Bell Co. v. City of El Paso, 346 F.3d
541, 546 (5th Cir. 2003).

Plaintiffs not only failed to make such

a showing, but did not even try.

The “good cause” standard

concentrates on the diligence of the party requesting the Court to
modify the schedule. Mobius Risk Group, LLC v. Global Clean Energy
Holdings, Civ. A. No. H-10-1708, 2011 WL 2193294, at *3 (S.D. Tex.
June 6, 2011), citing Parker v. Columbia Pictures Industries, 204
F.3d 326, 340 (2d Cir. 2000)(“[W]e agree with these courts that a

-42-

finding of ‘good cause’ depends on the diligence of the moving
party.”), and

In re Milk Products Antitrust Litig., 195 F.3d 430,

437 (8th Cir. 1999)
applies four factors:

To decide if there is good cause, the court
(1) an explanation for plaintiff’s failure

to move timely for leave to amend; (2) the importance of the
amendment; (3) possible prejudice in permitting the amendment; and
(4) whether a continuance would serve to cure the prejudice

Id.

Here, Plaintiff waited until after the deadline for amending and
gave no explanation.

Furthermore, the proposed amendment attached

to Plaintiff’s motion for leave indicates that granting the motion
and providing a continuance would be futile, as the proposed
complaint is just as conclusory and lacking in facts to support the
elements of the claims as was his Original Petition.
Accordingly, for the reasons stated above, the Court
ORDERS the following:
(1) Judge Stacy’s order granting Plaintiff’s motion for leave to
amend is VACATED;
(2) BANA’s (#6), Ditech’s (#20), and Mellon’s (#24) motions to
dismiss with prejudice are GRANTED for the reasons stated by
Defendants and by Magistrate Judge Stacy in her M&Rs (#30 and 33);
(3)

Ricardo’s motion for remand is DENIED;

(4) Plaintiff’s motion for leave to amend (#31) is DENIED; and
(5) this case is DISMISSED WITH PREJUDICE for failure to state a
claim.

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SIGNED at Houston, Texas, this 9th day of August, 2017.

_____________________________
UNITED STATES DISTRICT JUDGE

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