Adams v. Wells Fargo Bank, N.A.
MEMORANDUM AND ORDER granting 23 Motion for Judgment on the Pleadings.(Signed by Judge Nancy F Atlas) Parties notified.(TDR, 4)
United States District Court
Southern District of Texas
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
WELLS FARGO BANK, N.A.,
November 08, 2017
David J. Bradley, Clerk
CIVIL ACTION NO. H-17-0265
MEMORANDUM AND ORDER
Defendant Wells Fargo Bank, N.A. (“Wells Fargo”) filed a Motion for
Judgment on the Pleadings [Doc. # 23] on October 3, 2017. After Plaintiff failed to
respond to the Motion, the Court ordered Plaintiff to file any opposition by
November 2, 2017, and cautioned Plaintiff that failure to respond would result in
Defendant’s Motion being granted as unopposed. Plaintiff neither responded to the
Motion as ordered by the Court nor requested additional time to do so. Having
reviewed the full record and the applicable legal authorities, and considering
Plaintiff’s failure to file any opposition, the Court grants the Motion.
On October 15, 2008, Plaintiff George Adams and his wife obtained a mortgage
loan secured by a Deed of Trust on real property in Fort Bend County, Texas. See
Deed of Trust, Exh. A to Motion. On July 15, 2011, the Deed of Trust was assigned
to Wells Fargo. See Assignment, Exh. B to Motion.
Plaintiff admits that he failed to make the required payments on the Loan. After
the loan went into default, a Substitute Trustee was appointed. See Appointment of
Substitute Trustee dated December 13, 2016, Exh. C to Motion. Notice of acceleration
of the loan and of a trustee’s sale scheduled for January 3, 2017, were provided to
Plaintiff and filed in the public record. See Notice of Acceleration and Notice of
Trustee’s Sale, Exh. D to Motion. The foreclosure sale was completed on January 3,
Wells Fargo purchased the property at foreclosure for $176,505.00,
approximately 73.7% of the property’s fair market value.1
Plaintiff filed this lawsuit in Texas state court on January 3, 2017, and
Defendant filed a timely Notice of Removal to federal court. On September 19, 2017,
Plaintiff filed his First Amended Petition asserting two causes of action – a claim for
declaratory judgment and an alleged violation of the federal Truth-in-Lending Act
The property’s assessed fair market value according to the Fort Bend County
appraisal authority was $239,420.00 in 2017. See Fort Bend Central Appraisal
District valuation record, Exh. F to Motion. The Court can take judicial notice of
county appraisal district records. See Statin v. Deutsche Bank Nat’l Trust Co., 599 F.
App’x 545, 547 (5th Cir. Dec. 19, 2014); Hurd v. BAC Home Loan Servicing, LP, 880
F. Supp. 2d 747, 758 (N.D. Tex. 2012); Dunn v. Midland Mortg., 2014 WL 683854,
*2 (S.D. Tex. Feb. 20, 2014) (Miller, J.).
(“TILA”), 15 U.S.C. § 1641(g). Defendant filed the pending Motion for Judgment on
the Pleadings, which is now ripe for decision.
STANDARD FOR JUDGMENT ON THE PLEADINGS
Under Federal Rule of Civil Procedure 12(c), any party may move for judgment
on the pleadings “[a]fter the pleadings are closed – but early enough not to delay
trial.” FED. R. CIV. P. 12(c). A Rule 12(c) motion “is designed to dispose of cases
where the material facts are not in dispute and a judgment on the merits can be
rendered by looking to the substance of the pleadings and any judicially noticed
facts.” Hebert Abstract Co., Inc. v. Touchstone Props., Ltd., 914 F.2d 74, 76 (5th Cir.
1990); United States v. Renda Marine, Inc., 750 F. Supp. 2d 755, 763 (E.D. Tex.
2010), aff’d, 667 F.3d 651 (5th Cir. 2012). Motions for judgment on the pleadings are
governed by the same legal standard as motions to dismiss under Rule 12(b)(6). See
Ackerson v. Bean Dredging LLC, 589 F.3d 196, 209 (5th Cir. 2009).
A motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil
Procedure is viewed with disfavor and is rarely granted. Turner v. Pleasant, 663 F.3d
770, 775 (5th Cir. 2011) (citing Harrington v. State Farm Fire & Cas. Co., 563 F.3d
141, 147 (5th Cir. 2009)). The complaint must be liberally construed in favor of the
plaintiff, and all facts pleaded in the complaint must be taken as true. Harrington, 563
F.3d at 147. The complaint must, however, contain sufficient factual allegations, as
opposed to legal conclusions, to state a claim for relief that is “plausible on its face.”
See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Patrick v. Wal-Mart, Inc., 681 F.3d
614, 617 (5th Cir. 2012). When there are well-pleaded factual allegations, a court
should presume they are true, even if doubtful, and then determine whether they
plausibly give rise to an entitlement to relief. Iqbal, 556 U.S. at 679. Regardless of
how well-pleaded the factual allegations may be, they must demonstrate that the
plaintiff is entitled to relief under a valid legal theory. See Neitzke v. Williams, 490
U.S. 319, 327 (1989); McCormick v. Stalder, 105 F.3d 1059, 1061 (5th Cir. 1997).
Plaintiff alleges that Defendant violated § 1641(g) of the TILA. That section
provides that “not later than 30 days after the date on which a mortgage loan is sold
or otherwise transferred or assigned to a third party, the creditor that is the new owner
or assignee of the debt shall notify the borrower in writing of such transfer.”
15 U.S.C. § 1641(g). Plaintiff’s TILA claim is time-barred. “The general statute of
limitations for damages claims under the TILA is one year after the violation.”
Williams v. Countrywide Home Loans, Inc., 504 F. Supp. 2d 176, 186 (S.D. Tex.
2007), aff’d, 269 F. App’x 523 (5th Cir. 2008); Brewer v. Bank of Am., N.A., 627 F.
App’x 358, 358-59 (5th Cir. Dec. 18, 2015); Johnson v. HomeBridge Fin. Servs., Inc.,
2017 WL 1403300, *3 (S.D. Tex. Apr. 18, 2017) (citing Williams). Because
§ 1641(g) allows a creditor thirty days in which to provide notice to the borrower of
a transfer or assignment, the statute of limitations begins to run when those thirty days
have expired. See Benitez v. Am.’s Wholesale Lender, 2014 WL 3388650, *2 (S.D.
Tex. July 9, 2014). Failure to provide timely disclosure is not a continuing violation.
See Moor v. Travelers Ins. Co., 784 F.2d 632, 633 (5th Cir. 1986).
The Deed of Trust was assigned to Wells Fargo on July 15, 2011, and the thirtyday period for notice expired on August 14, 2011. This suit was not filed until
January 3, 2017, well beyond the one-year statute of limitations. As a result, Plaintiff's
TILA claims are time-barred.
Declaratory Judgment Claim
Plaintiff seeks a declaration that “title to Plaintiff’s Property be quieted in favor
of Plaintiff against Defendant” and argues that he has superior title because the Texas
Business and Commerce Code precludes assignment of a “note,” that he was not given
notice of the assignment to Wells Fargo, and that Wells Fargo has no legal right to
foreclose on the Property. Each of these arguments is contrary to clearly established
Fifth Circuit legal authority.
Plaintiff argues that Article 3 of the Texas Business and Commerce Code
provides that a note can only be “negotiated” and not assigned. The cited sections of
Article 3, however, do not apply to mortgages, which impose a lien on real property.
See TEX. BUS. & COMM. CODE § 3.104, cmt. 2 (“Article 3 is not meant to apply to . .
. the sale or lease of real property”); Tremble v. Wells Fargo Home Mortg., Inc., 478
F. App’x 164, 166 (5th Cir. 2012); Vogel v. Travelers Indem. Co., 966 S.W.2d 748,
753 (Tex. App. – San Antonio 1998, no pet.) (“Because the Deed of Trust places a
lien on real property, it is not governed by the UCC.”). As a result, Plaintiff’s
arguments based on § 3.201 and § 3.203 of the Texas Business and Commerce Code
fail as a matter of law to support his request for declaratory relief.
As discussed above, Plaintiff’s complaints regarding notice of the assignment
of the Deed of Trust to Wells Fargo are untimely. The arguments regarding notice of
the assignment do not support a declaratory judgment in Plaintiff’s favor.
Plaintiff also asserts claims frequently asserted by plaintiffs in foreclosure cases
and referred to by the courts as “split-the-Note” and “show me the Note” claims. The
Fifth Circuit has clearly and unequivocally rejected these claims. See, e.g., Martins
v. BAC Home Loans Servicing, LP. 722 F.3d 249, 254-55 (5th Cir. 2013); Casterline
v. OneWest Bank, FSB, 537 F. App’x 314, 316 (5th Cir. July 3, 2013). These
arguments, therefore, do not as a matter of law support the declaratory judgment claim
in Plaintiff’s First Amended Petition.
Plaintiff has failed to plead a viable claim for the declaratory relief he seeks in
this lawsuit. As a result, Defendant is entitled to judgment on the pleadings on this
CONCLUSION AND ORDER
The record demonstrates that Defendant is entitled to judgment in its favor on
the pleadings, and that Plaintiff is not entitled to recover on either his declaratory
judgment claim or his TILA claim. Accordingly, it is hereby
ORDERED that Defendant’s Motion for Judgment on the Pleadings [Doc.
# 23] is GRANTED, and judgment is entered in favor of Defendant.
The Court will issue a separate final judgment.
SIGNED at Houston, Texas, this 8th day of November, 2017.
NAN Y F. ATLAS
STATES DISTRICT JUDGE
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