Gomez et al v. Wells Fargo Bank, N.A. et al

Filing 5

OPINION re 3 MOTION to Dismiss (Signed by Judge Micaela Alvarez) Parties notified.(BelindaSaenz, 7)

United States District Court
Southern District of Texas

ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
MCALLEN DIVISION
SARAGOZA GOMEZ, et al,
Plaintiffs,
VS.
WELLS FARGO BANK, N.A., et al,
Defendants.

May 02, 2017
David J. Bradley, Clerk

§
§
§
§ CIVIL ACTION NO. 7:17-CV-118
§
§
§
§
OPINION

The Court now considers the motion to dismiss,1 filed by Wells Fargo Bank, N.A.
(“Wells Fargo”) and Mortgage Electronic Registration Systems, Inc. (“MERS”). The motion is
now unopposed, as Saragoza and Anita Gomez (“Plaintiffs”) did not file a response. 2 After duly
considering the record and relevant authorities, the Court GRANTS the motion to dismiss.
I.

Background

In 2006, Plaintiffs received a loan from Fidelity Home Mortgage Corporation3
(“Fidelity”), secured against their property at 3000 Princeton Avenue, McAllen, Texas 78504
(“Property”).4 Subsequently, in 2009, MERS, as nominee of Fidelity,5 assigned the Note and
Deed of Trust to Wells Fargo (“loan assignment”).6 Plaintiffs allege that they made timely
mortgage payments for more than ten years, but “due to unexpected circumstances[,] Plaintiffs
stayed behind on some payments.”7 Plaintiffs further allege that they requested a loan

1

Dkt. No. 3.
L.R. 7.2.
3
As of this date, Fidelity has not been served with service of process.
4
Dkt. No. 3-1, at pp. 4–11.
5
Id. at p. 5.
6
Dkt. No. 3-3, at p. 3.
7
Dkt. No. 1-1, at p. 5.
2

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modification from Wells Fargo, but never heard back from the bank.8 However, Wells Fargo and
MERS attached a 2016 loan modification agreement (“loan modification agreement”) between
Plaintiffs and Wells Fargo.9 Ultimately, in March 2017, Plaintiffs were informed that the
Property was set for foreclosure.10
Plaintiffs allege breach of contract, wrongful foreclosure, and Texas Property Code
causes of action against Wells Fargo, MERS, and Fidelity (“Defendants”) without generally
distinguishing one defendant from the others.11 In certain instances, however, Plaintiffs do refer
to “Defendant Bank.”12 Plaintiffs further request a temporary restraining order to enjoin
Defendants from taking the necessary steps to foreclose on the Property,13 while also arguing
that Defendants have failed to comply with the Home Affordable Refinance Program and the
2012 National Mortgage Settlement.14 Plaintiffs additionally contend that there is “no proof that
Defendants are the correct successors-in-interest.”15 The Court now turns to its analysis of the
instant motion to dismiss.
II.

Legal Standard

The general rule is that “in deciding whether to grant a motion to dismiss, a district court
may not go outside the complaint.”16 However, there is an exception that “a district court may
consider documents attached to the motion to dismiss if they are referred to in the plaintiff’s
complaint and are central to the plaintiff’s claim.”17 Here, there are three documents attached to
the motion to dismiss: (1) the Deed of Trust, (2) the loan modification agreement, and (3) the
8

Id. at pp. 5–6.
Dkt. No. 3-2.
10
Id. at p. 6.
11
Id. at pp. 9–10.
12
See e.g., Dkt. No. 1-1, at pp. 6, 8.
13
Dkt. No. 3-2, at p. 9.
14
Id. at pp. 6–7.
15
Id. at p. 8.
16
Gines v. D.R. Horton, Inc., 699 F.3d 812, 820 (5th Cir. 2012) (internal quotation marks and citation omitted).
17
Id. (citation omitted).
9

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loan assignment.18 Plaintiffs either refer to each of these documents in their pleading or
otherwise indicate the lack of their existence.19 Each document is additionally central to
Plaintiffs’ claims because this suit alleges among other things that: (1) Defendants breached an
agreement with Plaintiffs under the Deed of Trust, (2) Defendants did not work with Plaintiffs to
modify the loan agreement, and (3) Defendants have no standing to foreclose on the Property. As
a result, the court may, and will, consider the attached documents during its analysis of the
motion to dismiss.
To survive a Rule 12(b)(6) motion, the plaintiff must plead “enough facts to state a claim
to relief that is plausible on its face.”20 This does not require detailed factual allegations, but it
does require “more than labels and conclusions” or “a formulaic recitation of the elements of a
cause of action.”21 The Court regards all such well-pleaded facts as true and views them in the
light most favorable to the plaintiff.22 Considered in that manner, factual allegations must raise a
right of relief above the speculative level.23
Pursuant to the Supreme Court precedent set forth in Ashcroft v. Iqbal,24 the Court first
disregards from its analysis any conclusory allegations as not entitled to the assumption of
truth.25 The Court then undertakes the “context-specific” task of determining whether wellpleaded allegations give rise to an entitlement of relief to an extent that is plausible, rather than

18

Dkt Nos. 3-1–3.3.
See Dkt. No. 1-1 at p. 5 (“Plaintiffs, Saragoza Gomez and Anita Gomez, executed a Deed of Trust[.]”); Id. at p. 6
(“Defendants have not assist[ed] Plaintiffs to have their loan modified.”); Id. at p. 8 (“There is also no proof that
Defendant[] [Wells Fargo is] the correct successor[]-in-interest.”).
20
In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007) (quoting Bell v. Atl. Corp. v. Twombly, 550
U.S. 554, 570 (2007)) cert. denied, 552 U.S. 1182 (2008) (internal quotations omitted).
21
Twombly, 550 U.S. at 555.
22
Id.
23
In re Katrina Canal, 495 F.3d at 205 (quoting Twombly, 550 U.S. at 555).
24
556 U.S. 662 (2009).
25
See id. at 678–79.
19

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merely possible or conceivable.26 The “plausibility” standard requires the complaint to state
“enough facts to raise a reasonable expectation that discovery will reveal evidence of the
necessary claims or elements.”27 As the Supreme Court recently clarified, the plausibility
standard concerns the factual allegations of a complaint; the federal pleading rules “do not
countenance dismissal of a complaint for imperfect statement of the legal theory supporting the
claim asserted.”28
III.

Discussion

In reviewing the original petition and the documents attached to the motion to dismiss, it
is clear that Wells Fargo holds the Note and Deed of Trust, and is the particular defendant
seeking foreclosure of the Property. Accordingly, the Court construes the presented causes of
action with this background in mind despite the fact that the petition does not so distinguish. The
Court will now determine whether Plaintiffs survive the Rule 12(b)(6) legal standard for any
cause of action against Defendants.
a.

Breach of Contract

To prevail on a breach of contract claim under Texas law, a plaintiff must demonstrate
“(1) the existence of a valid contract; (2) performance by the plaintiff; (3) breach of the contract
by the defendant; and (4) damages sustained by the plaintiff as a result of the breach.”29
Plaintiffs’ breach of contract claim is that Defendants attempted to foreclose on the Property
without providing notice, and “[a]s a result of such breach of contract, Plaintiffs have been
injured.”30 The Fifth Circuit has explained that “a claim for breach of a note and deed of trust

26

See id. at 679–80.
In re So. Scrap Material Co., 541 F.3d 584, 587 (5th Cir. 2008) (quoting Twombly, 550 U.S. at 556).
28
Johnson v. City of Shelby, Miss., 135 S. Ct. 346, 346–47 (2014).
29
Sport Supply Grp., Inc. v. Columbia Cas. Co., 335 F.3d 453, 465 (5th Cir. 2003).
30
Dkt. No. 1-1, at pp. 9–10.
27

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must identify the specific provision in the contract that was breached.”31 Plaintiffs not only fail to
identify the specific contractual provision that was breached, but they also acknowledge their
failure to perform under the Note by missing payment deadlines.32 Additionally, Plaintiffs do not
specify what damages they suffered and how those damages were caused by a breach of contract.
As a result, Plaintiffs are unable to establish their breach of contract claim.
b.

Wrongful Foreclosure

Plaintiffs argue that the alleged breach of contract constitutes wrongful foreclosure
because “Plaintiffs were never provided with any opportunity, or realistic opportunity to cure the
default, or to make arrangements that are financially within the Plaintiffs’ means to bring the
account to current status.”33 A wrongful foreclosure cause of action has the following elements
under Texas law: “(1) a defect in the foreclosure sale proceedings; (2) a grossly inadequate
selling price; and (3) a causal connection between the defect and the grossly inadequate selling
price.”34 Here, there is no indication that a foreclosure sale has even occurred as Plaintiffs
specifically request a temporary restraining order preventing Defendants from “[t]aking any step
to foreclose for the sale[] of the [P]roperty, if no foreclos[ure] has taken place.” 35 Not only is it
unclear whether any Defendant has foreclosed on the Property, but Plaintiffs fail to make any
argument that the Property was sold for a “grossly inadequate selling price.” Without doing so,
they are unable to satisfy all of the essential elements for a wrongful foreclosure cause of action.

31

Williams v. Wells Fargo Bank, N.A., 560 Fed. Appx. 233, 238 (5th Cir. 2014).
Dkt. No. 1-1, at p. 5 (“Ordinarily, [P]laintiffs would be making their mortgage payments timely; however, due to
unexpected circumstances[,] Plaintiffs stayed behind on some payments.”).
33
Id. at p. 10.
34
Foster v. Deutsche Bank Nat’l Trust Co., 848 F.3d 403, 406 (5th Cir. 2017).
35
Dkt. No. 1-1, at p. 9.
32

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c.

Texas Property Code Violations

Plaintiffs further contend that Defendants failed to “follow[] the Texas Property Code in
the foreclosure of homesteads.”36 Plaintiffs allege that while they have notified Defendants “of
their situation and have made reasonable efforts to reach an agreement with Defendants for the
purpose of salvaging the account and property/homestead[,] . . . Defendants refused to negotiate
or to accept Plaintiffs[’] reasonable proposal to cure the [N]ote.”37 Plaintiffs fail to identify any
particular provision of the Texas Property Code or provide any additional context for this cause
of action. Elsewhere in the petition, Plaintiffs explain that they have made “bonafide efforts and
offers to pay” and requested a loan modification, but Defendants have “not assist[ed] Plaintiffs to
have their loan modified.”38 However, Plaintiffs and Wells Fargo did previously enter into a loan
modification agreement.39 In light of the fact that Wells Fargo modified Plaintiffs’ loan and
because Plaintiffs do not articulate any violated provisions of the Texas Property Code, this
cause of action likewise fails to survive the Rule 12(b)(6) legal standard.
d.

Standing to Foreclose on the Property

Plaintiffs also argue that Defendants lack standing to foreclose on the Property because
they are not the correct successor-in-interest.40 MERS, according to the Deed of Trust, was
granted “the right to foreclose and sell the Property.”41 Thus, it is clear that MERS is authorized
to foreclose. While Wells Fargo was not the bank that entered into the original loan with
Plaintiffs, the associated Note and Deed of Trust was assigned to Wells Fargo via the loan
assignment from MERS.42 The Fifth Circuit has ruled that the assignment of a deed of trust to a
36

Id. at p. 10.
Id.
38
Id.
39
See Dkt. No. 3-2.
40
Dkt. No. 1-1, at pp. 8–9.
41
Dkt. No. 3-1, at p. 5.
42
Dkt. No. 3-3, at p. 3.
37

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third party “confer[s] the new assignee standing to non-judicially foreclose on property
associated with that particular deed of trust.”43 As a result, Wells Fargo and MERS have standing
to foreclose on the Property. The Court disregards Fidelity as it has not been served.
e.

Home Affordable Refinance Program and National Mortgage
Settlement

Plaintiffs also note that Wells Fargo is a participant in the Home Affordable Refinance
Program (“HARP”) and a party to the National Mortgage Settlement (“NMS”). 44 Plaintiffs
contend that Wells Fargo did not assist them with HARP, even though the program was created
“specifically to help homeowners like Plaintiffs[,] who are current[ly] behind on their mortgage
payments and have little to no equity in their homes, refinance their mortgage.” 45 Plaintiffs do
not provide enough facts to suggest Wells Fargo violated HARP, and even if they did, it is
unclear whether there is a private right of action to enforce HARP. Plaintiffs do not provide any
authority indicating such a private right of action, and other courts have found no private right of
action to enforce HARP.46
Similarly, Plaintiffs are unable to state a claim against Wells Fargo for violating the
NMS. Plaintiffs explain that under the NMS, “banks cannot pursue a foreclosure while
simultaneously working with homeowner on a mortgage modification. This is call[ed] ‘dual
tracking[].[’”]47 Plaintiffs further argue that Wells Fargo “must appoint a single point of contact
to help [Plaintiffs] through the loan workout process.”48 Plaintiffs are unable to state a claim on
their NMS allegations. Plaintiffs do not allege that they were parties to that settlement
agreement, and the agreement does not create any rights in third parties. Furthermore, Plaintiffs
43

Reece v. U.S. Bank Nat. Ass’n, 762 F.3d 422, 425 (5th Cir. 2014).
Dkt. No. 1-1, at pp. 6–7.
45
Id. at p. 6.
46
See e.g. Kelsey v. Citigroup Inc., 2013 WL 1249832, at *2 (D. Nev. Mar. 26, 2013); In re Residential Capital,
LLC, 2014 WL 5358762, at * 9 (Bankr. S.D.N.Y. Oct. 20, 2014).
47
Dkt. No. 1-1, at p. 7.
48
Id.
44

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never contend that Wells Fargo was pursuing foreclosure of the Property at the same time it was
actively working on a mortgage modification with Plaintiffs. In fact, Plaintiffs previously
acknowledged that Wells Fargo was not working with them on a mortgage modification:
“Plaintiffs previously requested their appropriate modification loan package from [Wells Fargo],
but Plaintiffs never heard back from [Wells Fargo] until Plaintiffs were made aware that their
home was to be foreclosed[.]”49 Even though the Court acknowledges that Plaintiffs and Wells
Fargo did enter into a loan modification agreement, contrary to Plaintiffs’ contention, there is
nothing in the complaint to suggest that Wells Fargo was ever simultaneously working on a loan
modification and pursuing foreclosure. Again, even if Plaintiffs provided enough facts to suggest
Wells Fargo violated the NMS, it is clear Plaintiffs were not a party to that settlement. Plaintiffs
do not provide any authority indicating a private right of action was created, and other courts
have found no private right of action to enforce a consent decree such as the NMS.50
Plaintiffs additionally make clear that the federal government previously investigated
allegations of “robo-signing,” a process whereby “banks signed off on foreclosures without
thoroughly reviewing the documentation[.]”51 However, nowhere in the complaint do Plaintiffs
specifically allege that Wells Fargo engaged in “robo-signing.” In sum, each claim under HARP
and the NMS fail to state a claim under Rule 12(b)(6).
f.

Temporary Restraining Order

Plaintiffs further request a temporary restraining order to prevent Wells Fargo from:
1.
49

Entering the premises located at [the Property].

Id. at pp. 5–6.
See e.g. Reyes v. Wells Fargo Bank, N.A., 2016 WL 6915269, at *5 (N.D. Tex. Oct. 19, 2016) (finding that
Plaintiff did not have standing to assert a claim for relief under the consent judgment or consent order in a case
where she argued that Wells Fargo violated the National Mortgage Settlement by engaging in “dual tracking”);
Reynolds v. Bank of America, N.A., 2013 WL 1904090, at * 10 (N.D. Tex. May 8, 2013) (noting how “courts that
have addressed this issue have held that mortgagors like Plaintiffs do not have standing to enforce a consent decree
that banks have entered into with the government”).
51
Dkt. No. 1-1, at p. 7.
50

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2.

Forcibly removing Plaintiffs [] and/or [their] family and/or [their] personal
property from the premises located [at the Property.]

3.

Taking any action and/or affirmative steps to remove Plaintiffs and/or
the[ir] family from the premises located [at the Property].

4.

Enforcing any judgment and/or writ o[f] possession with respect [to] the
premises located at [the Property,] [a]nd/or other acts that will tend to
interfere with Plaintiffs’ occupation and/or enjoyment of the premises
located at [the Property], including the foreclosure of said property as
scheduled.

5.

Taking any step to foreclose for the sale[] of the [P]roperty, if no
foreclos[ure] has taken place.52

For the Court to grant the requested injunctive relief, Plaintiffs have the burden of establishing
“[(1)] a substantial likelihood of success on the merits; [(2)] a substantial threat of immediate and
irreparable harm for which it has no adequate remedy at law; [(3)] that greater injury will result
from denying the temporary restraining order than from its being granted; and [(4)] that a
temporary restraining order will not disserve the public interest.”53
As more fully explained above, none of Plaintiffs’ claims survive the Rule 12(b)(6) legal
standard. Accordingly, Plaintiffs are unable to establish the first required element for injunctive
relief, and thus the Court will not issue the temporary restraining order.
IV.

Holding

As noted earlier, while the original petition alleges causes of action against Wells Fargo,
MERS, and Fidelity, the record suggests that Wells Fargo holds the Note and Deed of Trust and
is the particular defendant seeking foreclosure of the Property. Since the Court finds that
Plaintiffs failed to state a claim on any of their causes of action against any Defendant, the Court
finds dismissal of all claims is appropriate. For all the foregoing reasons, the Court GRANTS
52

Id. at p. 9.
Acumen Enterprises, Inc. v. Morgan, 2011 WL 1227781, at *2 (citing Clark v. Prichard, 812 F.2d 991, 993 (5th
Cir. 1987)).
53

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the motion to dismiss as to Wells Fargo, MERS, and Fidelity. All of Plaintiffs’ claims are hereby
DISMISSED WITH PREJUDICE. A separate final judgment will issue.
IT IS SO ORDERED.
DONE at McAllen, Texas, this 1st day of May, 2017.
___________________________________
Micaela Alvarez
United States District Judge

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