Michael Green, Trustee for 2016 Wolf Trust v. Bank of America, N.A.
MEMORANDUM OPINION AND ORDER granting in part, denying in part 4 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM . ( Initial Conference reset for 5/19/2017 at 02:00 PM in Courtroom 9B before Judge Sim Lake)(Signed by Judge Sim Lake) Parties notified.(gclair, 4)
United States District Court
Southern District of Texas
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN D ISTRICT OF TEXAS
April 20, 2017
David J. Bradley, Clerk
MICHAEL GREEN, Trustee for the
2016 WOLF TRUST ,
CIV IL A CTION NO . H-17-0772
BANK OF AMERICA , N . .,
MEMOPANPUM OPIN ION AND ORDER
Pending before the court is Defendant Bank of America, N . .'S
UBANA') Motion to Dismiss Plaintiff's Complaint with Incorporated
Memorandum of Law (nMotion to Dismigs') (
' Docket Entry No . 4)
the reasons stated below , the motion will be granted
denied in part .
Factual and Procedural Backqround
In 2008 Edgar and Maria Cortes (u
Borrowers' obtained a loan
secured by a deed of trust on real estate located at 6822 Liberty
Creek Trail, Houston, Texas, 77049 (uthe Property' x
The deed of
trust was later assigned to BANA , successor by merger to BAC Home
Factual allegations are taken from Plaintiff's Verified First
Amended Original Petition to Qu iet Title for Declaratory and
Injunctive Relief, TRO, and Request for Disclosure (Bpetition' ,
Exhibit A to Notice of Removal, Docket Entry No . 1, pp . 6-7 and
uncontested allegations from Defendant 's Motion to Dismiss , Docket
Entry No . 4, pp . 5-9 .
Loan Servicing , LP FKA Countrywide Home Loans Servicing .
Property is subject to restrictions and covenants that permitted
the Liberty Lakes (
Houston) Homeowners' Association, Inc. ('HOA'
to assess a lien for unpaid HOA assessments .
In February of 2015
the HOA prevailed in a suit against Borrowers and foreclosed its
lien against the Property .
The 2016 Wolf Trust CA
the Trust' purchased the Property
subject to Defendant's existing senior lien at a Constable's Sale
in May of 2016 . Defendant filed a Notice of Substitute Trustee's
Sale with the Harris County Clerk on January
was schedu led for March
Plaintiff filed this action in
Judicial District Court, Harris
County , Texas, on
2017, seeking to enjoin Defendant from foreclosing.
Plaintiff also claimed an equitable right of redemption and sued
for qu iet title . Plaintiff alleges that the Trust seeks to pay off
Plaintiff's attempts to commun icate . Defendant timely removed the
action and now moves to dism iss for failure to state a claim upon
which relief can be granted under Federal Rule of Civil Procedure
II . App licable Law
A Rule 12( 6) motion tests the formal sufficiency of the
comp laint because it fails to state a legally cognizab le claim .'
Ramminq v . United States, 281 F . 158, 161 (
5th Cir. 2001), cert .
denied sub nom . Cloud v . United States, 122 S .
The court must accept the factual a llegations of the comp laint as
true and view them in the light most favorable to the plaintiff.
citing Oppenheimer v . Prudential Securities Inc., 94 F . 189,
5th Cir. 1996)). To defeat a motion to dismiss, a plaintiff
uenough facts to state a claim to relief that is
plausible on its face .'
Twomb ly ,
does not 'strain to find inferences favorable to the p laintiffs' or
uaccept conclusory allegations, unwarranted deductions , or legal
conclusions .' Southland Securities Corp . v . INspire Ins . Solutions,
Incw 365 F. 353, 36l (
5th Cir. 2004) (
internal quotation marks
and citations omitted). ul
clourts are required to dismiss, pursuant
Ru1e 12( (
b) 6)2, claims based on invalid legal theories, even
though they may be otherwise well-pleaded .'
Flynn v . State Farm
Fire and Casualty Insurance Co . (
Texas), 605 F. Supp . 2d 811, 82O
( . . Tex . 2009) (
citing Neitzke v. Williams, 1O9 S. Ct. 1827, 1832
111 . Ar plication
state a claim
equitable right of
redemption, a plaintiff must show it: ( has an equitable or legal
right to the property ; ( based on which it would suffer a loss
from foreclosure ; and
'is lready , able or willing to redeem the
controversy by pay ing off the amount of valid and
subsisting liens to which the properties (
are) subject.'' Scott v.
Schneider Estate Trust, 783 S. . 26, 28 (
Tex . App .
no writ) (
quoting Houston v . Shear, 210 S . . 976, 981 ( . Civ.
-Austin 1919, writ dism 'd
uThe party w ishing to redeem
must also be w illing to pay amounts expended by the mortgagee in
association with the default .' Id .
demonstrate that the Trust would suffer a loss from foreclosure or
that Plaintiff is ready , able , or willing to pay off the amount of
the existing lien and other amounts owed to Defendant
to the default and foreclosure attemptsx
Defendant further argues
that Plaintiff Mdoes not assert that (
the Trustl has tendered the
amount owed on the Note , which is a 'necessary prerequisite to the
recovery of title
Plaintiff has plead sufficient facts to state a claim for its
redemption that is p lausible on its face .
Plaintiff alleges that the Trust possessqs a legal interest in the
Property as a result of purchasing the Property at the Constable's
It is plausible that , based upon that interest, Plaintiff
would suffer a loss in the event of a foreclosure sale .
Defendant's Motion to Dismiss , Docket Entry No .
3 . at 13-14 (
citing Kinqman Holdings, LLC v . BAC Home Loans
Servicing , LP, Civil Action No . 4 :1O-cv -698 , 2011 WL 1882269, at *4
( D . Tex. Apr. 2l, 2011).
to contact Defendant
willingness to pay off Defendant 's existing lien .
Defendant argues that dism issal is warranted becau se Plaintiff
tender the amount owed , which
prerequisite for the recovery of title .l
Although the cases on
which Defendant relies correctly identify tender of the amount owed
as a l
hlcondition precedent ' to recovery of title /' tender is not
required in order to state a legally cognizable claim .5
court were to adopt BANA 'S reasoning , defendants could defeat
at the pleading
withholding payoff in formation from p laintiffs .
Plaintiff's factual allegations are su fficient to survive a
motion to dismiss .
If the Trust is to prevail on its claim ,
must eventually tender the amount owed .
But in order to do so ,
Defendant must first provide that amount to the Trust .
A suit to remove cloud or to quiet title seeks an
Defendant Bank of America , N .A .'S Reply Brief in Support of
Motion to Dismiss Plaintiff's Complaint ('Reply' Docket Entry No .
9, pp . 4-5 (
citing two virtually identical holdings: Kingman
Holdinqs , LLC v . BAC Home Loans Serv icing , LP , 2011 WL 1882269, at
*4 ,and Kingman Holdings, LLC v . CitiMortqaqe Inc w Civil Action No .
4:10-cv-619z 2011 WL 1883829, at *4 ( D . Tex . Apr . 21, 2011) (nthe
Kingman Holdinq cases' ).
The magistrate judge in the Kinqman Holdinq cases cited
several Texas cases on which the court relied in recommending
But none of the cited cases were resolved at the
p leading stage based solely upon failure to tender the amount owed .
equitable remedy .
Katz v . Rodriquez, 563 S. .
W 2d 627, 629 (
Civ . App .
-corpus Christi 1977, writ ref'd n . e .)
an interest in a specific property , ( title to the
property is affected by a claim by the defendant , and
claim , although
facially valid , is invalid
or unenforceable .
Vernon v. Perrien, 39O S. . 47, 61-62 (
Tex . App .
-El Paso 2012, no
citation omitted). Defendant argues that Plaintiff's quiet
title claim fails as a matter of law because Plaintiff purchased
the Property subject to a valid superior and senior 1ien. Because
Defendant 's claim , Plaintiff's quiet title claim will be dismissed .
Plaintiff seeks injunctive relief
foreclosing on the Property pursuant
Substitute Trustee's Salex
prevent Defendant from
Defendant 's Notice of
Plaintiff alleges that the notice was
defective due to Defendant 's failure to prov ide a street address
for the substitute tru stees , as required by statute .
argues that this claim is moot because the date of the proposed
sale has passed x
The court agrees, and Plaintiff's claim for
Defendant's Motion to D ism iss, Docket Entry No . 4, pp . 10-12 .
Exhibit A to Plaintiff 's Verified First Amended Original
Petition to Quiet Title E,) for Declaratory and Injunctive Relief,
TRO, and Request for Disclosure, Exhibit A to Notice of Removal ,
Docket Entry No . 1-1 , pp . 13-14 .
Defendant's Reply , Docket Entry No . 9, pp . 2-3 .
injunctive relief will be denied as moot. If Defendant seeks to
move forward w ith
foreclosure proceedings while this case
pending, Plaintiff may again seek injunctive relief.
IV . Conckupions and Orders
For the reasons explained above , the court concludes that
Plaintiff has plead a
legally cognizab le claim
Plaintiff 's quiet
is DISMISSED with
prejudice. Plaintiff's claim for injunctive relief is DISMISSED as
Defendant's Motion to Dismiss (
Docket Entry No.
therefore GRANTED in part and DENIED in part .
For the reasons stated above , Defendant is ORDERED to provide
Defendant's valid and subsisting lien and any amounts Defendant
default by April 28, 2017 .
respond to the offer by May
conference is RESCHEDULED for May 19, 2017, at 2 :00 p . .
SIGNED at Houston , Texas , on this 20th day of April, 2017 .
UNITED STATES DISTRICT JUDGE
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