Celtic Bank Corp. v. Jacobs et al

Filing 74

ORDER GRANTING 65 Motion to Dismiss for Failure to State a Claim; GRANTING 65 Motion to Dismiss for Lack of Jurisdiction; GRANTING 69 Motion to Compel. Counter-Plaintiffs and Counter-Defendant terminated: Jacobs Stone Products, Inc., Celtic Bank Corp. and Tony L. Jacobs, Jr. Signed by Judge Sam Sparks. (jk)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION

20130C131

APtO:13

CLERK J$
FC1 COURT
WESTE1 OiRC1 OF TEXAS
pv

CELTIC BANK CORP.,

EPuT

Plaintiff,

Case No. A-13-CA-040-SS

-vs-

TONY L. JACOBS, JR. and JACOBS STONE
PRODS., INC.,
Defendants.

ORDER
BE IT REMEMBERED on the 17th of October, 2013, the Court held a hearing in the abovestyled cause, and the parties appeared by and through counsel. Before the Court are Plaintiff Celtic

Bank Corp.'s Motion to Dismiss Counterclaims [#65], Defendants Tony L. Jacobs, Jr., and Jacobs
Stone Products, Inc.'s Response [#66], and Celtic Bank's Replies [##67, 68]; and Celtic Bank's

Opposed Motion to Compel [#69], Defendants' Response [#71], and Celtic Bank's Reply [#72].
Having reviewed the documents, the arguments ofthe parties at the hearing, the governing law, and
the file as a whole, the Court now enters the following opinion and orders.

Background
This case concerns the parties' respective rights to a stone quarry and stone processing
facility purchased at a foreclosure sale by Celtic Bank. Defendants currently occupy the property and

operate a stone quarrying business, and claim a right to possession of the property based on leases
made between Defendant Tony Jacobs, Jr., and his parents and their company. This Court previously

dismissed Defendants' counterclaim under the Texas Property Code for failure to state a claim.

VI

Order of Mar. 28, 2013 [#37]. Defendants have since amended their answer and asserted new
counterclaims. Celtic Bank now moves to dismiss those new counterclaims, and to compel

production of certain records.
Analysis
I.

Motion to Dismiss

A.

Legal Standard
Federal Rule of Civil Procedure 8(a)(2) requires a complaint to contain "a short and plain

statement of the claim showing that the pleader is entitled to relief."

FED.

R. Civ. P. 8(a)(2). A

motion under Federal Rule of Civil Procedure 12(b)(6) asks a court to dismiss a complaint for
"failure to state a claim upon which relief can be granted." FED. R. Civ. P. 12(b)(6). The plaintiff
must plead sufficient facts to state a claim for relief that is facially plausible. Ashcroft v. Iqbal, 556

U.s. 662, 678 (2009); Bell Ati. Corp.

v.

Twombly, 550 U.S. 544, 570 (2007). "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, 566 U.S. at 678. Although
a plaintiff's factual allegations need not establish that the defendant is probably liable, they must

establish more than a "sheer possibility" that a defendant has acted unlawfully. Id. Determining

plausibility is a "context-specific task," and must be performed in light of a court's "judicial

experience and common sense." Id. at 679.
In deciding a motion to dismiss under Rule 12(b)(6), a court generally accepts as true all

factual allegations contained within the complaint. Leatherman

v.

Tarrant Cnty. Narcotics

Intelligence & Coordination Unit, 507 U.S. 163, 164(1993). However, a court is not bound to accept
legal conclusions couched as factual allegations. Papasan

-2-

v.

Allain, 478 U.S. 265, 286 (1986).

Although all reasonable inferences will be resolved in favor of the plaintiff, the plaintiff must plead
"specific facts, not mere conclusory allegations." Tuchman v. DSC Commc 'ns Corp., 14 F .3 d 1061,
1067 (5th Cir. 1994). In deciding a motion to dismiss, courts may consider the complaint, as well

as other sources such as documents incorporated into the complaint by reference, and matters of

which a court may take judicial notice. Tellabs, Inc.

v.

Makor Issues & Rights, Ltd., 551 U.S. 308,

322 (2007).
B.

Application
Defendants assert three counterclaims: (1) violations ofthe Texas Deceptive Trade Practices

Act (DTPA); (2) tortious interference with contract; and (3) declaratory judgment. None have any
merit.

With respect to Defendants' DTPA claim, Defendants argue Celtic Bank is engaging in
deceptive trade practices by refusing to accept Defendants' offer to purchase the properties at issue
for a price to be determined by an appraiser. Celtic Bank has rejected this offer, instead asking

$800,000 for the property. Defendants' counterclaim is absurd on its face. Celtic Bank has no

obligation to sell the property to Defendants, or to anyone else. Celtic Bank also has no obligation
to sell the property at a price Defendants believe to be fair. Celtic Bank owns the property and may
ask whatever price it wishes, regardless of whether the "fair market value" of the property justifies

the asking price. The law does not guarantee to anyone the right to purchase a desired property at a
price they deem fair, and certainly does not make it a deceptive trade practice to ask too much for
a property.

Even if Defendants' DTPA counterclaim passed the laugh test, it would still fail to state a
claim for multiple reasons. For example, the DTPA by its own terms does not apply "to a cause of
-3-

action arising from a transaction, a project, or a set of transactions relating to the same project,
involving total consideration by the consumer of more than $500,000, other than a cause of action
involving a consumer's residence." TEx. Bus. & C0M. CODE

§

17.49(g). Celtic Bank's allegedly

tortious conduct, asking $800,000 for the non-residential properties, plainly falls within this
exception. Additionally, Defendants cannot take advantage of the DTPA because their post-lawsuit

attempts to buy the property do not amount to a "consumer transaction." See Ortiz v. Collins, 203
S.W.3d 414,425 (Tex.

App.Houston [14th Dist.] 2006, no pet.) ("Negotiations to settle litigation

do not constitute consumer transactions, even when the subject of the litigation involves a good such

as a house. Otherwise, every lawsuit concerning a dispute over the purchase or lease of a good or

service would itself constitute a consumer transaction." (citation omitted)).

Defendants' tortious interference claim argues Celtic Bank interfered with the leases between
Tony Jacobs, Jr., and his parents by forcing Defendants off the property after Celtic Bank purchased

the property at the foreclosure sale. But Defendants admit Celtic Bank's purchase of the property
extinguished any interest the previous owners had in the property. In other words, even if

Defendants' theory of the case is correct and their leases are valid, Celtic Bank merely took the
property subject to those leases and is now the lessor. Celtic Bank could not subsequently tortiously

interefere with its own lease contract. Holloway

v.

Skinner, 898 S.W.2d 793, 796 (Tex. 1995).

Alternatively, even if Celtic Bank did tortiously interfere with the leases, its interference was

justified as a matter of law by its claim to the property. See Prudential Ins. Co. ofAm.

v.

Fin. Review

Servs., Inc., 29 S.W.3d 74, 81 (Tex. 2000) ("Generally,justification is established as a matter of law

when the acts the plaintiff complains of as tortious interference are merely the defendant's exercise

of its own contractual rights.")

El

Finally, Defendants seek a declaratory judgment adjudicating the rights of the respective
parties to the property. This is precisely the relief Celtic Bank already seeks, and the counterclaim

adds nothing new to the lawsuit. It is therefore properly dismissed as nothing more than an attempt
to gain a right to recover attorney's fees for successfully defeating Celtic Bank's affirmative claims.
See HECI Exploration Co.

v.

Clajon Gas Co., 843 S.W.2d 622, 63 8-39 (Tex. App.Austin 1992,

writ denied) (declaratory judgment act may not be invoked to duplicate relief sought in already
pending suit).

II.

Motion to Compel
Celtic Bank also seeks to compel production of various documents from Defendants. As this

Court explained at the hearing, the Court will order production of the following: (1) tax returns for

the years 2007 to 2010, to be produced once this Court has entered either an agreed protective order
or the standard Western District ofTexas protective order; (2) names of Defendants' employees from

2010 through the date this lawsuit was filed; and (3) unredacted copies of the safety forms previously

produced, to be produced once this Court has entered either an agreed protective order or the
standard Western District of Texas protective order. Ifthe parties do not submit an agreed protective

order by November 8, 2013, this Court will enter its standard protective order.

Conclusion
Accordingly,
IT IS ORDERED that Plaintiff Celtic Bank Corp. 's Motion to Dismiss Counterclaims
[#65] is GRANTED;

IT IS FURTHER ORDERED that Defendants Tony L. Jacobs, Jr., and Jacobs Stone
Products, Inc.'s amended counterclaims are DISMISSED WITH PREJUDICE;
-5-

IT IS FINALLY ORDERED that Celtic Bank's Opposed Motion to Compel [#69]
is GRANTED as described in this opinion.

SIGNED this the

day of October 2013.

SAM SPARKS
UNITED STATES DISTRICT JUDGE

040 mtd cc compel ord kkt.frm