Weston v. Wells Fargo Bank, N.A.
ORDER GRANTING 5 Motion to Dismiss; all of Plaintiff Richard Weston's claims against Defendant Wells Fargo Bank, N.A., are DISMISSED WITHOUT PREJUDICE; Plaintiff Richard Weston shall have 20 days to file an amended complaint, if any, or this case will be closed. Signed by Judge Sam Sparks. (kkc)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
Case No. A-14-CA-51-SS
WELLS FARGO BANK, N.A.,
BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause, and
specifically Defendant Wells Fargo Bank, N.A. ' s Motion to Dismiss [#5], Plaintiff Richard Weston's
Response [#6], and Defendant's Reply [#7]. Having reviewed the documents, the relevant law, and
the file as a whole, the Court now enters the following opinion and orders.
Plaintiff Richard Weston filed this lawsuit in an effort to oppose the foreclosure by
Defendant Wells Fargo Bank, N.A. (Wells Fargo), on the property located at 2408 Turtle Mountain
Bend, Austin, Travis County, Texas 78748 (the Property). On September 25, 2009, Weston executed
a Note and Deed of Trust (collectively, the Loan) in connection with the purchase of the Property.
The Deed of Trust lists MERS as nominee for the Lender with the 'right to exercise any or all of
those interests [granted by Borrower] including, but not limited to, the right to foreclose and sell the
Property; and to take any action required of Lender." Def.'s Mot. to Dismiss [#5-1], Ex. A (Deed
of Trust), at 2-4. On May 5, 2011, MERS, as nominee for the original Lender, assigned the Deed
of Trust to Wells Fargo (the Assignment).
[#5-2], Ex. B (Assignment of Deed of Trust).
Weston defaulted on the Loan. Weston alleges he sought a Loan modification under the
HAMP program, but Wells Fargo denied his application. Wells Fargo appointed a substitute trustee
and posted a notice of foreclosure sale to occur in January 2014. Weston, though, filed this lawsuit
challenging the foreclosure and alleges MERS had no authority to assign the Deed of Trust to Wells
Fargo. Further, Weston contends the Assignment, if valid, did not provide Wells Fargo the authority
to nonjudicially foreclose on the Property. Weston asserts claims for: (1) declaratory judgment, (2)
quiet title, (3) tortious interference with contract, (4) violation of the Texas Debt Collection Act, (5)
violation of the Texas Civil Practice & Remedies Code, section 12.002, (6) an accounting, and (7)
On February 4,2014, Wells Fargo filed this motion to dismiss, Weston responded, and Wells
Fargo replied. The Court now addresses the motion to dismiss.
Rule 12(b)(6)Legal Standard
Federal Rule of Civil Procedure 8(a)(2) requires a complaint contain "a short and plain
statement of the claim showing that the pleader is entitled to relief"
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."
R. Civ. P. 12(b)(6). In deciding a
motion to dismiss under I 2(b)(6), a court generally accepts as true all factual allegations contained
within the complaint. Leatherman v. Tarrant Cnly. 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 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.3d 1061, 1067 (5th Cir. 1994). The plaintiff
must plead sufficient facts to state a claim for relief that is facially plausible. Ashcroft
U.s. 662, 678 (2009); Bell Atl. Corp.
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, 556 U.s. at 678. Although
a plaintifrs factual allegations need not establish 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," that must be performed in light
of a court's "judicial experience and
common sense." Id. at 679. In deciding a motion to dismiss, courts may consider the complaint,
as well as other sources courts ordinarily examine when ruling on Rule 12(b)(6) motions to dismiss,
such as documents incorporated into the complaint by reference, and matters of which a court may
take judicial notice. Tellabs, Inc.
Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007).
After reviewing Weston's legal arguments, they are simply not supported by the case law.
All of Weston's claims are dependent upon either who was the holder of the Note or challenges to
the assignments. Because the holder of the Note is not relevant and because Weston cannot bring
such a challenge to the Assignment, his individual causes of action fail to state claims.
Weston's Argument Concerning the Note
Weston argues the original promissory note was made payable to Primelending, and "no
other defendant was party to the promissory note nor authorized to collect on such note." Not. of
Removal [#1-1], Ex. A (Orig. Pet.), ¶ 5-6. Furthermore, Weston contends, "[t]he note has not been
assigned ever by information and belief," and "[a]s the note has never been assigned, no debt passed.
Any attempt at foreclosure by anyone other than the original note holder is void." Id., ¶ 23.
Weston's arguments concerning who was the holder of the Note and who can enforce the
Note miss the mark. Wells Fargo is attempting to carry out non-judicial foreclosure proceedings
under the Deed of Trust, and the Deed of Trust is the relevant instrument in this case, not the Note.
The parties' relationship to the Deed of Trust is the relevant inquiry when determining the authority
to foreclose. See Martins
BAC Home Loans Servicing, L.P., 722 F.3d 249, 253-56 (5th Cir.
In addition, Weston's contention the holder of the note is the only individual with standing
to foreclose flies in the face of the Texas statutes governing foreclosure under a deed of trust. Texas
law allows a mortgage servicer to administer the foreclosure ofproperty on behalf ofa mortgageea
term which is, with one exception, defined solely in terms of ownership of, or a beneficial interest
in, a deed of trust. See TEx. PROP. CODE
51.0001(4), 51 .0025. The single exception is "a book
entry system," such as MERS, which is also a mortgagee under Texas law. See id.
However, even this is not truly an exception, as "book entry system" is itself defined as "a national
book entry system for registering a beneficial interest in a security instrument that acts as a nominee
for the grantee, beneficiary, owner, or holder of the security instrument and its successors and
1.0001(1). Notably absent in these repeated references to security instruments is
any mention of an associated promissory note.
Weston's arguments focusing on the holder of the note are misplaced, and they do not
undermine Wells Fargo's ability to carry out a foreclosure under the Deed of Trust.
Weston's Arguments Concerning Assignment of the Deed of Trust
Weston challenges MERS's authority to assign the Deed of Trust to Wells Fargo. According
to Weston, MERS had no contractual authority under the Deed of Trust to assign the Deed of Trust
to Wells Fargo. Therefore, any actions taken by Wells Fargo under the Deed of Trust, i.e. the
initiation of foreclosure proceedings, are void.
Weston is incorrect. The Deed of Trust gives the "Lender" authority to appoint a substitute
trustee and to invoke the power of sale by non-judicial foreclosure. While Weston is correct the
Deed of Trust defines "Lender" as "Primelending" and any holder of the Note who is entitled to
receive payments thereunder, the Deed of Trust further provides its covenants and agreements "shall
and benefit the successors and assigns of Lender." Deed of Trust, ¶ 13. Accordingly, when
MERS assigned the Deed of Trust to Wells Fargo, Wells Fargo had the authority to appoint a
substitute trustee and to invoke the power of sale by non-judicial foreclosure.
Although Weston argues MERS did not have the authority to assign the Deed of Trust to
Wells Fargo, he is incorrect. The Deed of Trust states MERS "has the right to exercise any or all of
those interests [granted by Borrower in the Deed of Trusti, including, but not limited to, the right to
foreclose and sell the Property; and to take any action required of Lender." Id. at 4. Therefore,
MERS had the authority to assign to Wells Fargo the Deed of Trust and its rights of "Lender,"
including the appointment of a substitute trustee and the power of sale by nonjudicial foreclosure.
See id., ¶ 22, 24.
The Texas Third Court of Appeals has confirmed MERS can assign the Deed of Trust and
MERS's assignee can nonjudicially foreclose. See Bierworth
No. 03-1l-006444-CV, 2012 WL 3793190 (Tex.
BAC Home Loans Servicing, L.P
Aug. 30, 2012, no pet.).
Bierworth, the plaintiff claimed MERS lacked legal authority to assign the note, the assignment from
MERS to BAC bifurcated the note from the deed of trust, making the deed of trust null and void, and
BAC was not a holder in due course with a right to foreclose. Id. at
The deed of trust gave the
"Lender" the right to foreclose and sell the property, and MERS, as nominee, had the right to
exercise any interests granted to the Lender. Id. MERS assigned the deed of trust to BAC, and the
Court concluded the Lender's rights include the right of assignment, and therefore BAC, as MERS's
assignee, "was entitled to pursue nonjudicial foreclosure under the terms of the deed of trust." Id.
In addition, the Fifth Circuit has recently addressed very similar arguments regarding
challenges to assignments and rejected them. See Reinagel
Deutsche Bank Nat'l Trust Co., 735
F.3d 220 (5th Cir. 2013). In short, the assignment was between MERS and Wells Fargo, not
Weston, and to the extent any of Weston's allegations as to fraudulent assignment are true, they
merely make the assignment voidable, not void. Consequently, he cannot challenge this assignment.
In Reinagel, the Fifth Circuit confirmed: "Though 'the law is settled' in Texas that an obligor cannot
defend against an assignee's efforts to enforce the obligation on a ground that merely renders the
assignment voidable at the election of the assignor, Texas courts follow the majority rule that the
obligor may defend 'on any ground which renders the assignment void." Id. at 225 (citations
omitted). In other words, an obligor cannot defend against an assignee's efforts to enforce the
obligation on a ground which merely renders the assignment voidable at the election of the assignor.
In the instant case, the only parties to the assignment were MERS and Wells Fargo. And
Weston's assertions, if true, would only make the assignment voidable, not void. See
Therefore, Weston cannot challenge the assignment at issue in this case.
id. at 227.
Weston's Arguments Concerning the National Mortgage Settlement
Weston asserts Wells Fargo committed "dual-tracking" in violation of the "National
Mortgage Settlement." Orig. Pet., ¶ 15. As an initial matter, not one of Weston's claims is actually
based on this factual assertion. Nevertheless, any claim he did bring based on this assertion would
Weston is referring to the "Settlement Term Sheet" attached as Exhibit A to the "Consent
Judgment" between Wells Fargo, on the one hand, and the United States, forty-nine States, and the
District of Columbia, on the other hand. See generally Cause No. 1:12-cv-00361-RMC, Docs. 14
& 14-i (D.D.C. Apr. 4, 2012). As a matter of law, however, no private right
by the Consent Judgment. See Reynolds
of action was created
Bank of Am., N.A., No. 3:12-CV-1420-L, 2013 WL
1904090, at * 10 (N.D. Tex. May 8, 2013); Owens v. Bank ofAm., NA., No. H-i 1-2552, 2012 WL
912721, at *3 (S.D. Tex. Mar. 16, 2012). In addition, the Enforcement Terms of the Consent
Judgment provide for enforcement only by a party to the Consent Judgment or a monitoring
committee. See Cause No. 1:i2-cv-0036i-RMC, Doc. 14-i, Ex. E ¶ J.2 (D.D.C. Apr. 4,2012).
Weston is neither and therefore cannot enforce the terms of the Consent Judgment. See Shatteen v.
JP Morgan Chase Bank, N.A., 519 F. App'x 320, 321 (5th Cir. 2013) (unpublished) ("[Plaintiff] has
no standing to enforce consent decrees to which she is not a party.")
Weston's Arguments Concerning the HAMP Guidelines
Weston also asserts Wells Fargo's denial of his application for a Loan modification violated
the requirements of the Home Affordability Modification Program (HAMP). See Orig. Pet.,
¶ 15-18. As an initial matter, not one of Weston's claims is actually based on this factual assertion.
Nevertheless, any claim he did bring based on this assertion would fail.
HAMP does not create an express or implied private cause of action for borrowers against
mortgagors or loan servicers. See Miller v. Chase Home Fin., L.L. C., 677 F.3d 1113, 1116-17 (11th
Cir. 2012). Therefore, Weston cannot assert any claims against Wells Fargo based on whether it
complied with HAMP. See Kew
Bank ofAm., NA., No. H-i 1-2824, 2012 WL 5832354, at *5
(S.D. Tex. Nov. 16, 2012) ("The law is clear that there is no private cause of action under HAMP.").
As discussed above, Weston's legal arguments are not supported by case law. Consequently,
his causes of action fail, and he is not entitled to any of his requested relief.
IT IS ORDERED that Defendant Wells Fargo Bank, N.A.'s Motion to Dismiss [#5]
IT IS FURTHER ORDERED that all of Plaintiff Richard Weston's claims against
Defendant Wells Fargo Bank, N.A., are DISMISSED WITHOUT PREJUDICE;
IT IS FINALLY ORDERED that Plaintiff Richard Weston shall have TWENTY (20)
days to file an amended complaint, if any, or this case will be closed.
SIGNED this the 2
day of February 2014.
UNITED STATES DISTRICT JUDGE
05! mtd ordjtw.frm
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