Nunez et al v. CitiMortgage, Inc.
ORDER GRANTING 5 Motion to Dismiss. IT IS FINALLY ORDERED that all of Plaintiffs Eduardo Nunez and Maricela Nunez's claims against Defendant CitiMortgage, Inc., successor by merger to ABN AMRO Mortgage Group, Inc., are DISMISSED WITH PREJUDICE as time-barred. Signed by Judge Sam Sparks. (jk)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
2OIMAR-3 PM 2:21
EDUARDO NUNEZ; MARICELA NUNEZ,
Case No. A-14-CA-89-SS
CITIMORTGAGE, INC., SUCCESSOR BY
MERGER TO ABN AMRO MORTGAGE
BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause, and
specifically Defendant CitiMortgage, Inc., successor by merger to ABN AMRO Mortgage Group,
Inc.'s Motion to Dismiss [#5], Plaintiffs Eduardo Nunez and MaricelaNunez'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.
This lawsuit appears to be an effort by Plaintiffs Eduardo Nunez and Maricela Nunez to stop
a foreclosure sale initiated by Defendant CitiMortgage, Inc. (CMI). On December 15, 2006,
Plaintiffs took out a home equity loan on their home located at 214 Hazeltine Drive, Lakeway, Texas
78734 in Travis County. On January 7, 2014, Plaintiffs filed this lawsuit in state court alleging the
loan violates article XVI, section 50(a)(6) of the Texas Constitution. Specifically, Plaintiffs claim
the lender, ABN AMRO Mortgage Group (AAMG), was required to get licensed by the Office of
Consumer Credit Commissioner. By issuing a loan without a license, Plaintiffs argue AAMG
automatically forfeited all principal and interest, and without a debt, there can be no lien. Therefore,
Plaintiffs contend, there was neither a debt nor a valid lien to transfer to AAMG's successor, CMI,
and without a debt and an enforceable lien, CMI cannot conduct a valid foreclosure sale of the
Property. Based on this argument, Plaintiffs assert the following claims: (1) quiet title; (2) common
law fraud; (3) statutory fraud; (4) violations of the Texas Debt Collection Act; (5) violations of
Texas Civil Practice & Remedies Code
12.002; (6) an accounting; (7) declaratory judgment; and
(8) injunctive relief.
CMI removed the case to this Court on January 29, 2014, and filed a motion to dismiss on
February 5, 2014. Plaintiffs responded, CMI replied, and the Court now addresses the motion.
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 1 2(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
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 v. Iqbal, 556
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 plaintiffs 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 1 2(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).
"A statute of limitations may support dismissal under Rule 12(b)(6) where it is evident from
the plaintiffs pleadings that the action is barred and the pleadings fail to raise some basis for tolling
or the like." Jones v. Alcoa, Inc., 339 F.3d 359, 366 (5th Cir. 2003). A court may dismiss a claim
pursuant to Rule 12(b)(6) when the plaintiff cannot recover on a cause of action because the statute
of limitations has expired. Jones v. Bock, 549 U.S. 199, 215 (2007) ("If the allegations.
relief is barred by the applicable statute of limitations, the complaint is subject to dismissal for
failure to state a claim
Statute of Limitations
Plaintiffs allege numerous violations of article XVI, section 50(a)(6) of the Texas
Constitution. Plaintiffs' claims, though, are barred by the applicable statutes of limitations. Section
50(a)(6) claimsincluding suits to quiet title based on alleged 50(a)(6)
violationsare subject to
a four-year statute
of limitations. Priester v. JP Morgan Chase Bank, N.A., 708 F.3d 667, 674-76
(5th Cir. 2013); see also Williams
Wachovia Mortg. Corp., 407 S.W.3d 391, 393 (Tex.
App.-Dallas 2013, pet. filed) (upholding dismissal of quiet title claim based on a time-barred
section 50(a)(6) claim); Schanzle
832170, at *4 (Tex.
JPMC Specialty Mortg. LLC, No. 03-09-00639--CV, 2011 WL
11, 2011, no pet.); Rivera v. Countrywide Home Loans, Inc.,
262 S.W.3d 834, 839 (Tex. App.-Dallas 2008, no
applicable to a fraud claim is four years. See Exxon Corp.
194, 216 (Tex. 2011); TEx. Civ. PRAC.
Likewise, the statute of limitations
Emerald Oil & Gas Co., 348 S.W.3d
& REM. CODE § 16.004(a)(4).
Where a claim is based on an alleged violation of section 50(a)(6), the limitations period
begins to run when the loan closes because that is when the legal injury occurs. Priester, 708 F.3d
at 675-76. If a borrower fails to file suit challenging the validity of a home equity lien prior to the
passage of limitations, the lien becomes valid. Id. at 678 ("Once the period of limitations has passed,
the lien is no longer voidable and is valid."). Plaintiffs' loan closed on December 15, 2006. See Not.
of Removal [#1-2], Ex.
(Orig. Pet.), ¶ 8. Because Plaintiffs did not file this suit until January 7,
2014, over seven years after the alleged injury, all claims are barred as a matter of law by the fouryear statute of limitations applicable to section 50(a)(6) and fraud claims. Id.; see also Sigaran
USBankNat'lAss'n, No. H-12-3588, 2013 WL 2368336, at *7 (S.D. Tex. May 29, 2013) (citing
Priester in its dismissal of plaintiffs' claim under section 50(a)(6)(P)).
1See also Walker v. CitiMortgage, Inc., No. H- 13-03111, 2014 WL 67245, at *4 (S.D. Tex. Jan. 8, 2014)
("Thus, the period of limitations relating to the creation of allegedly unconstitutional liens is four years from the date
the loan closes."); Cypert v. USBC Bank USA Nat 'I Ass 'n, No. 3:1 3-CV- I 032-D, 2013 WL 5822339, at *2 (N.D.
Tex. Oct. 30, 2013); Prutzman v. Wells Fargo Bank, NA., No. H-l2-3565, 2013 WL 4063309, at *24 (S.D. Tex.
Aug. 12, 2013) (applying four-year statute of limitations in accordance withPriester); Ausmus v. Deutsche Bank
Trust Coinp. Nat'l Ass 'n, No. 3: 13-CV-148, 2013 WL 3938515, at *24 (S.D. Tex. Jul. 29, 2013) (same);
McDonough v. JPMorgan Chase Bank, NA., No. 3:12-CV-189, 2013 WL 1966930, at *2 (S.D. Tex. May 13,
Plaintiffs devote the majority of their response to arguing the Fifth Circuit's decision in
Priester was incorrect, factually distinguishable, or both. None of Plaintiffs' arguments regarding
their interpretaion of Priester or the wisdom of Priester overcomes the court's clear holding in
Priester: a four-year statute of limitations applies to claims under article XVI, section 50(a)(6) of the
Texas Constitution. This Court is bound by the Fifth Circuit's interpretation of Texas law.
Plaintiffs' Other Claims
All of Plaintiffs' other claims are premised on the alleged violations of article XVI, section
50(a)(6) of the Texas Constitution.
For instance, Plaintiffs' quiet title action is based on the
argument "[t]he note, being made by a lender that was not licensed by the OCCC, was void ab
initio." Orig. Pet., ¶ 19. Similarly, Plaintiffs' statutory and common law fraud claims are premised
on the contention, "Defendant AAMG misrepresented a past or existing
factthat it was licensed
to provide mortgages in Texas." Id., ¶28. As described above, however, the alleged constitutional
violations are time-barred. Therefore, all of these claims must be dismissed.
Plaintiffs' claims under the Texas Constitutionand their causes of action which are
premised on these claimsare barred by limitations. Therefore, all of these claims are dismissed
with prejudice and without leave to amend because amendment would be futile.
IT IS ORDERED that Defendant CitiMortgage, Inc., successor by merger to ABN
AMRO Mortgage Group, Inc.'s Motion to Dismiss [#5] is GRANTED;
IT IS FINALLY ORDERED that all of Plaintiffs Eduardo Nunez and Maricela
Nunez's claims against Defendant CitiMortgage, Inc., successor by merger to ABN AMRO
Mortgage Group, Inc., are DISMISSED WITH PREJUDICE as time-barred.
SIGNED this the
AI S P
UNITED STATES DISTRICT JUDGE
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