Shackelford v. Ocwen Loan Servicing, LLC

Filing 8

MEMORANDUM AND ORDER GRANTING MOTION FOR JUDGMENT ON THE PLEADINGS granting 4 Motion for Judgment on the Pleadings.(Signed by Judge Charles Eskridge) Parties notified.(jengonzalez, 4)

Case 4:19-cv-01540 Document 8 Filed on 06/29/20 in TXSD Page 1 of 6
United States District Court
Southern District of Texas

ENTERED
June 29, 2020
David J. Bradley, Clerk

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
ALTHEA
SHACKELFORD,
Plaintiff,
vs.
OCWEN LOAN
SERVICING LLC,
Defendant.

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CIVIL ACTION NO.
4:19-CV-01540

JUDGE CHARLES ESKRIDGE

MEMORANDUM AND ORDER GRANTING
MOTION FOR JUDGMENT ON THE PLEADINGS
The motion by Defendant Ocwen Loan Servicing LLC for
judgment on the pleadings is granted. Dkt 4.
1. Background
This action involves a dispute over the alleged default by
Plaintiff Althea Shackelford on her mortgage loan. The complaint
is not a model of clarity. Shackelford appears to take issue with
the handling by Ocwen of her request for a short sale and
commencement of foreclosure proceedings.
Shackelford obtained a $276,000 loan in April 2007 that she
used to purchase a home in Houston, Texas. Dkt 1-1 at ¶ 4.1.
Shackelford defaulted on this mortgage in December 2009. Id at
¶ 4.2; Dkt 4-1 at ¶ 7. She then inquired with her prior loan
servicer about a loan modification or short sale. Id at ¶ 4.3.
The mortgage was transferred several times over the next
several years, with Ocwen now the current servicer. Id at ¶ 4.4.
In December 2014 Shackelford submitted an “Error Resolution
Notice” to Ocwen. Id at ¶ 4.6. She asserts that she then provided
Ocwen with a complete short-sale package and documentation in

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March 2015 to which she received no response. Id at ¶ 4.7. She
also alleges that she provided Ocwen with additional information
in support of the application, including an update dated
September of 2018. Id at ¶ 4.
Ocwen sent Shackelford a new default notice in July 2018. Id
at ¶ 4.8; id at 70. Shackelford continued to pursue the short-sale
process. She contends that she made further inquiries with
Ocwen’s short-sale department to finalize the request and has
submitted all the required information. Id at ¶¶ 4.9, 4.10. She
claims that acceleration by Ocwen is premature and that Ocwen
failed to provide her with proof of the default. Id at ¶ 4.12.
Shackelford filed suit in state court against Ocwen in
February 2019 for breach of contract, negligence, and violations
of the Real Estate Settlement Procedures Act and the Texas Debt
Collection Practices Act. Ocwen removed the action and then
filed the pending motion for judgment on the pleadings. Dkt 4.
Shackelford failed to respond.
2. Legal standard
Rule 12(c) of the Federal Rules of Civil Procedure provides,
“After the pleadings are closed—but early enough not to delay
trial—a party may move for judgment on the pleadings.” A
motion seeking relief under Rule 12(c) “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.” Great Plains Trust Co v
Morgan Stanley Dean Witter & Co, 313 F3d 305, 312 (5th Cir 2002),
quoting Hebert Abstract Co Inc v Touchstone Properties Limited, 914
F2d 74, 76 (5th Cir 1990).
A reviewing court evaluates a motion for judgment on the
pleadings under Rule 12(c) using the same standard as a motion
to dismiss for failure to state a claim under Rule 12(b)(6). Gentilello
v Rege, 627 F3d 540, 543–44 (5th Cir 2010). Rule 8(a)(2) in that
regard requires a complaint to provide “a short and plain
statement of the claim showing that the pleader is entitled to
relief.” Rule 12(b)(6) allows the defendant to seek dismissal if the
plaintiff fails “to state a claim upon which relief can be granted.”

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Read together, the Supreme Court has held that Rule 8 “does
not require ‘detailed factual allegations,’ but it demands more
than an unadorned, the-defendant-unlawfully-harmed-me
accusation.” Ashcroft v Iqbal, 556 US 662, 678 (2009), quoting Bell
Atlantic Corp v Twombly, 550 US 544, 555 (2007). To survive a Rule
12(b)(6) motion to dismiss, the complaint “must provide the
plaintiff’s grounds for entitlement to relief—including factual
allegations that when assumed to be true ‘raise a right to relief
above the speculative level.’” Cuvillier v Taylor, 503 F3d 397, 401
(5th Cir 2007), quoting Twombly, 550 US at 555.
A complaint must therefore contain enough facts to state a
claim to relief that is plausible on its face. Twombly, 550 US at 570.
A claim has facial plausibility “when the plaintiff pleads factual
content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.” Iqbal, 556
US at 678, citing Twombly, 550 US at 556. This standard on
plausibility is “not akin to a ‘probability requirement,’ but it asks
for more than a sheer possibility that a defendant has acted
unlawfully.” Id at 678, quoting Twombly, 550 US at 556.
Pursuant to Local Rule 7.4, the Court may treat Shackelford’s
failure to respond as a representation of no opposition to the
legal arguments and factual evidence that Ocwen submitted in
support of its motion. See Blanton-Bey v Carrell, 2010 WL 1337740,
*1 (SD Tex), citing Eversley v MBank Dallas, 843 F2d 172, 173–74
(5th Cir 1988).
3. Analysis
As to breach of contract. Shackelford bases her breach of
contract claim on an alleged failure by Ocwen to acknowledge
and respond to her request for an accounting of her loan history,
as well as alleged failure to comply with certain HUD regulations.
“A claim for breach of a note and deed of trust must identify
the specific provisions in the contract that was breached.”
Williams v Wells Fargo Bank, NA, 560 F App’x 233, 238 (5th Cir
2014) (unpublished) (citation omitted). A plaintiff must also
“allege her own performance, because a party to a contract who
is herself in default cannot maintain a suit for its breach.”
Villarreal v Wells Fargo Bank, NA, 814 F3d 763, 767 (5th Cir 2016)

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(quotation marks and citations omitted). And in order to bring
suit for violations of HUD regulations, the plaintiff must show
that the regulations were incorporated into the deed of trust. Law
v Ocwen Loan Servicing, LLC, 587 F App’x 790, 794 (5th Cir 2014)
(unpublished).
The breach of contract claims fail for all of these reasons.
Shackelford doesn’t specify the contractual provision that Ocwen
allegedly breached. She admits that she is in default. And neither
the note nor deed of trust incorporated any HUD regulations.
As to negligence. Negligence under Texas law depends first
upon a legal duty owed by the defendant to the plaintiff.
D. Houston Inc v Love, 92 SW3d 450, 454 (Tex 2002). Texas law
generally does not recognize a legal duty between a mortgagor
and mortgagee. Levels v Merlino, 969 F Supp 2d 704, 717–18 (ND
Tex 2013) (collecting cases). Where such duty does exist, it is
limited to claims for breach of contract and not negligence. Id at
718, citing Milton v US Bank National Association, 508 Fed App’x
326, 329–30 (5th Cir 2013) (unpublished). No duty giving rise to
a negligence claim exists under the circumstances in this case.
As to violations of RESPA. Shackelford alleges that Ocwen
violated various provisions of RESPA by:
Failing to provide her with a specific reason for its
determinations “for each such trial or permanent
loan modification option”;
o Failing to provide her with accurate information
regarding loss-mitigation options and foreclosure;
o Failing to provide a specific reason for its denial of
“all loan workout alternatives”; and
o Improperly moving for foreclosure judgment prior
to providing a specific reason for its denial of all
“loan workout alternatives.”
Dkt 1-1 at ¶ 5.7. She specifically invokes 12 USC § 2614, 12 CFR
§ 1024.35, 12 CFR § 1024.39, and 12 CFR § 1024.41.
o

As a jurisdictional statute, 12 USC § 2614 does not impose
liability. The Fifth Circuit has also held that neither 12 CFR
§ 1024.35 nor 12 CFR § 1024.39 provide for a private right of

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action. See Solis v US Bank NA, 2017 WL 4479957, *3–4
(SD Tex), aff’d, 726 F App’x 221 (5th Cir 2018).
Section 1024.41 establishes procedures for reviewing
applications for loss-mitigation assistance and does provide a
private right of action. Solis, 2017 WL 4479957 at *4. Shackelford
alleges that Ocwen violated these procedures by failing to provide
her with a specific reason for its denial of her loss-mitigation
application and moving forward with foreclosure. But the
requirement to provide a specific reason for denial only extends
to situations where the servicer denies a “complete loss
mitigation application.” 12 CFR § 1024.41(d). An application is
complete when “a servicer has received all information that the
servicer requires from a borrower in evaluating applications for
the loss mitigation options available to the borrower.” 12 CFR
§ 1024.41(b)(1). Shackelford attached to her a petition a shortsale application that she purportedly submitted to Ocwen in
September 2018. Dkt 1-1 at 20. That application on its face is
incomplete as it required Plaintiff to submit two bank statements
that are not included with the application.
A plaintiff must also allege actual damages resulting from a
RESPA violation to survive a motion to dismiss under Rule
12(b)(6). See Avila v JPMorgan Chase Bank, NA, 2015 WL
1648940, *3 (SD Tex). The complaint alleges only that
“Defendant has violated several RESPA procedures causing
Plaintiff to suffer actual damages.” Dkt 1-1 at ¶ 5.8. This
conclusory statement fails to state a plausible claim for relief
under RESPA. Avila, 2015 WL 1648940 at *3.
As to violations of the DCPA. The DCPA prohibits a variety of
conduct during debt collection. See Tex Fin Code §§ 392.301–
304. Plaintiff does not specify a provision under the DCPA that
Ocwen violated. She instead alleges only that she was “harassed
and subjected to emotional duress while [Ocwen] attempted to
collect the debt.” Dkt 1-1 at ¶ 5.9. This conclusory allegation is
insufficient to state a plausible claim for violation of the DCPA.

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4. Conclusion
Ocwen requested dismissal with prejudice in a notice
provided of Shackelford’s failure to respond to its underlying
motion. Dkt 6; see also Dkt 4-5. Shackelford again filed no
opposition. This warrants dismissal of the claims against Ocwen
with prejudice. For example, see Powell v Philip Morris Inc, 2000
WL 33993308, *1 (SD Tex).
The motion by Ocwen for judgment on the pleadings is
GRANTED. Dkt 4.
This action is DISMISSED WITH PREJUDICE.
SO ORDERED.
Signed on June 29, 2020, at Houston, Texas.

Hon. Charles Eskridge
United States District Judge

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