Hubbard v. Ditech Financial, LLC f/k/a Green Tree Servicing, LLC

Filing 15

OPINION on Dismissal. Debra D. Hubbard will take nothing from Ditech Financial. No claims exists that impedes Ditech's right to foreclose in August or any other month. (Signed by Judge Lynn N Hughes) Parties notified. (ghassan, 4)

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF TEXAS

United States District Court
Southern District of Texas

Debra D. Hubbard,
Plaintiff,
1.Iersus

Ditech Financial, LLC,
Defendant.

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ENTERED
July 03, 2018
David J. Bradley, Clerk

Civil Action H-I7-17

Opinion on Dismissal
I.

Introduction.
A woman borrowed to buy a house. The lender used a loan servicer. The

borrower defaulted and filed for bankruptcy. The lender transferred the loan to
another servicer. The borrower says that she corresponded with the new servicer
and applied for a loan modification. It posted her property for foreclosure. She
sued the servicer to prevent the foreclosure and claimed negligent
misrepresentation and violations of Real Estate Settlement Procedures Act and
the Texas Property Code. The borrower will take nothing.
2.

Background.
Debra D. Hubbard borrowed $5IO,77o.00 from Countrywide Home

Loans, Inc., onJuly I3, 2007. Countrywide used Green Tree Servicing, LLC, to
administer the note. In September 2009, she started missing payments. InJuly
20I 3, the loan servicer and she agreed on a modification. She missed a payment
in December 20I3 and filed for Chapter I3 bankruptcy. While she was paying
through her bankruptcy plan, the servicing transferred to Ditech Financial, LLC.
InJuly 20I6, she voluntarily dismissed her bankruptcy only after the trustee had
moved to dismiss it.
Hubbard corresponded with Ditech because she believed that it did not
accurately record her payments. She also applied for a loan modification.
Hubbard got a debt validation notice in February 20I5, and she says that she

immediately disputed the balance and account history. Ditech corresponded with
Hubbard several times between February

2015

and December

7, 2016,

about

loan modification options. Ditech posted the property for foreclosure. In
December of 2016, Hubbard sued Ditech to block the foreclosure scheduled for
January 3,2017.

3.

Negligent Misrepresentation.
Hubbard did not support her negligent misrepresentation claim. She

pleaded legal conclusions without facts.

I

In Texas, the economic loss rule precludes a negligent misrepresentation
claim when the breached duty complained about is the very same duty owed
under a contract between the parties. 2 Hubbard says Ditech negligently
misrepresented its treatment of her loan modification application by posting the
property for foreclosure. Ditech was not obliged to grant Hubbard's request for
modification. Duties related to the servicing of Hubbard's loan arose only from
promises made in her note. It is called a promissory note for a reason.
Outside of that contract, Ditech owed her no duty at all. 3 Rather,
Hubbard, not Ditech, breached the contract by not paying. Hubbard did not
change her circumstances in reliance on Ditech. Consequently, she does not
have a negligent misrepresentation claim.
4.

RESPA.

Hubbard did not support her RESPA claim. Hubbard's complaint alleges
no specific damages but only declares, quite confidently, that she has indeed
suffered actual damages. 4
Even if Hubbard' s claims were not conclusory, many of them are false by
her own account. For example, one of her exhibits shows that Ditech supplied

Sec BellAtl. Corp. v. Twombly, 550 u.s. 544, 555 (2007); Ashcroft v. Iqbal, 556 u.s. 662, 678
200 9).
(
2 Sec Sw. Bell Tele. Co. v. DeLanney, 809 s.w.2d 493,494 (Tex. I99I).
3 FDIC v. Coleman, 795 s.w.2d 706, 709 (Tex. I990).
4 Sec I2 u.s.c.A. § 2605(D (I)(A).
I

a unique mailing address for qualified written requests on June 7,

2016,

yet her

complaint says it did not. Also, Hubbard sent letters to Ditech by fax rather than
to the designated mailing address. As long as a loan servicer designates an
address, communications sent to another address fail as qualified written
requests even if the loan servicer responds. 5
Hubbard neither claims nor shows any actual damages because Ditech
has not caused her any. Her loss, if any, is self~inflicted.
5.

Texas Properry Code.
Hubbard mistakes the code's requirements. A mortgage servicer must

give a defaulting debtor written notice and at least twenty days to cure the default
before notice offore closure may be given. 6 Hubbard says that she received a debt
validation notice in February

2015,

that she disputed the balance, and that

Ditech posted her property for sale. Nowhere does she allege that Ditech failed
to give her twenty days to cure her default. Over the years, Ditech had given
Hubbard ample opportunity to cure the default or apply to modify the loan and
sent several letters to that effect. Her claim under the code is empty.
6.

Conclusion.

Hubbard defaulted on her loan years before Ditech sought to sell the
house. Ditech supplied her the chance to modify the loan, but she did not accept
the opportunity. Her complaint lacks a discernible basis in fact, and its turbid
speculation only heightens this impression. Hubbard's own exhibits show her
conclusory allegations to be false or at least just that - conclusory. She has not
met the burden for a claim at law.

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Roth v. CitiMortgage Inc., 756 F.3d 178 (2d Cir. 2014).
Tex. Prop. Code Ann. § 51.002 (West 2013).

Debra D. Hubbard will take nothing from Ditech Financial, ue.
No claim exists that impedes Ditech's right to foreclose in August or any
other month.
Signed onJuly ~,

2018,

at Houston, Texas.

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United States DistrictJudge

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