Wilkinson v. Wells Fargo Bank, N.A. et al
Filing
6
ORDER GRANTING 4 Motion to Dismiss. IT IS FINALLY ORDERED that Plaintiff Loretta Wilkinson's claims against Defendants Wells Fargo Bank, N.A.; Mortgage Electronic Registration Systems; Home Financing Unlimited, Inc.; Mission Mortgage of Texas, Inc.; and Buckley Madole, P.C. are DISMISSED WITH PREJUDICE. Signed by Judge Sam Sparks. (jk)
F/
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
AY
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,
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LORETTA WILKINSON,
Plaintiff,
Case No. A-15-CA-249-SS
-vs-
FARGO BANK, N.A.; HOME
FINANCING UNLIMITED, INC.; MISSION
MORTGAGE OF TEXAS, INC.; MORTGAGE
ELECTRONIC REGISTRATION SYSTEMS,
INC.; and BUCKLEY MADOLE, P.C.,
WELLS
Defendant.
ORDER
BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause, and
specifically Defendants Wells Fargo Bank, N.A. (Wells Fargo) and Mortgage Electronic Registration
Systems (MERS)'s Motion to Dismiss [#4], to which Plaintiff Loretta Wilkinson has not responded.
Having reviewed the documents, the relevant law, and the file as a whole, the Court now enters the
following opinion and order GRANTING the motion.
Background
This is a pro se lawsuit filed by Plaintiff Loretta Wilkinson to challenge the foreclosure sale
of the property located at 1003 Blackman Court, Hutto, Texas 78634 (the Property). This is not the
Court's first encounter with Wilkinson regarding the Property. On July 30, 2013, Wilkinson filed
an action against Wells Fargo in the 98th Judicial District Court of Travis County, Texas to
challenge the foreclosure sale of the Property, and Wells Fargo removed the case to this Court on
April 18, 2014.
See Wilkinson
v.
Wells Fargo Bank,
N.A., No. l:13-CV-332-SS (W.D. Tex. 2014)
I
(First Lawsuit).
On June 13, 2014, the Court granted Wells Fargo's motion to dismiss after
Wilkinson failed to respond and gave her twenty days to file an amended complaint. See Order of
June 13, 2014 [#9], First Lawsuit. Wilkinson did not file an amended complaint, and the Court
dismissed the case. See Order of July 7, 2014 [#10], First Lawsuit.
In November 2014, Wilkinson filed for Chapter 13 bankruptcy in an effort to keep her home,
and on February 9, 2015, Wilkinson appealed the bankruptcy order lifting the automatic stay and
allowing Wells Fargo to proceed with foreclosure on the Property. See In re Wilkinson, No. 1:1 5-cv11 3-SS
(W.D. Tex. 2015) (Bankruptcy Appeal). After Wilkinson failed to file her brief in
compliance with the briefing schedule, the Court gave her extra time.
See Order of
Mar. 18, 2015 [#3], Bankruptcy Appeal. Wilkinson still failed to make any filing, and the Court
dismissed the appeal for want of prosecution. See Order of Mar. 26, 2015 [#4], Bankruptcy Appeal.
On March 6, 2015, Wilkinson filed the instant action in the 277th Judicial District Court of
Williamson County, Texas against Defendants Wells Fargo, Home Financing Unlimited, Inc. (Home
Financing), Mission Mortgage of Texas, Inc. (Mission Mortgage), MERS, and Buckley Madole,
P.C.' to once again attempt to delay foreclosure proceedings on the Property. See Notice Removal
[#1-1] Ex. A (Orig. Pet.).
The case stems from a promissory note executed in the amount of $236,505 (the Note) on
or about January 5, 2009, by Wilkinson and her husband, Milton D. Wilkinson (now deceased) to
purchase the Property. See id. ¶ 11. Wilkinson also executed a deed of trust (the Deed of Trust)
securing payment on the Note with the Property. Id. ¶ 12; Mot. Dismiss [#4-1] Ex. A (Deed of
Wilkinson incorrectly lists "Buckley Adole, P.C." as the defendant.
-2-
Trust). Together, the Note and the Deed of Trust comprise the Loan. The original lender was Home
Financing dlb/a Mission Mortgage.
The Deed of Trust names MERS as beneficiary and nominee for Mission Mortgage. Deed
of Trust at 2. The Deed of Trust expressly provides MERS, as nominee for Mission Mortgage, "has
the right: to exercise any of those interests, including, but not limited to, the right to foreclose and
sell the Property; and to take any action required by the Lender.
.
.
." Id. at 4. MERS, acting as
nominee for Mission Mortgage, assigned the Deed of Trust to Wells Fargo on February 16, 2012.
See
Orig. Pet. ¶f 15, 30; Mot. Dismiss [#4-2] Ex. B (Assignment of Deed of Trust).
Wilkinson ultimately defaulted on her payment obligations under the Loan, and the Property
was sold at a foreclosure sale.
See
Orig. Pet. ¶ 14 (stating Wilkinson's last loan payment was made
in October 2010); Mot. Dismiss [#4-3] Ex. C (Substitute Trustee's Deed).
In her Original Petition, Wilkinson challenges Wells Fargo's standing to foreclose on the
basis: (1) Wells Fargo has not produced the original note; (2) MERS was not authorized to assign
the promissory note and deed of trust to Wells Fargo; and (3) Wilkinson was entitled to a loan
modification. She asserts a variety of causes of action, and seeks injunctive relief, damages, and
attorney's fees.
See
Orig. Pet. ¶J 25-65.
On March31, 2015, Defendants Wells Fargo and MERS removed the case to this Court.
See
Notice Removal [#1]. On April 2, 2015, Defendants Wells Fargo and MERS moved to dismiss
Wilkinson's claims pursuant to Federal Rule of Civil Procedure 12(b)(6).
See
Mot. Dismiss [#4].
Analysis
As an initial matter, the Court establishes it has jurisdiction in the case. Defendants Wells
Fargo and MERS removed the case on the basis of complete diversity between Plaintiff and all
-3-
properly joined defendants. See Notice Removal [#1] ¶ 9. Defendants Home Financing, Mission
Mortgage, and Buckley Madole are all apparently citizens of Texas (as is Wilkinson), but the Court
disregards these defendants' citizenship for purposes of determining diversity jurisdiction for two
reasons. First, according to the state court record attached to the Notice of Removal and the Court's
docket sheet since removal, Defendants Home Financing, Mission Mortgage, and Buckley Madole
have not been served. They have not made an appearance nor have they submitted any filings.
Wells Fargo and MERS appear to be the only Defendants (and perhaps the only parties) actually
litigating this case. Second, the Court finds Home Financing, Mission Mortgage, and Buckley
Madole were each improperly joined in this lawsuit. A removing party may establish improper
joinder by showing that the plaintiff is unable to establish a cause of action against the non-diverse
defendant under state law. See Larroquette v. Cardinal Health 200, Inc., 466 F .3 d 373,376(5th Cir.
2006) (citing Smaliwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004)). As Defendants
Wells Fargo and MERS effectively argue in their Notice of Removal, Wilkinson has not alleged facts
that would give rise to a viable claim against Home Financing, Mission Mortgage, or Buckley
Madole. Notice Removal [#1] ¶J 13-20. Therefore, these defendants were improperly joined,
complete diversity exists, and the Court has jurisdiction.
I.
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"
FED.
R. Civ. P. 8(a)(2). A
motion under Federal Rule of Civil Procedure 1 2(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). 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
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 v. Iqbal, 556
U.s. 662, 678 (2009); Bell At!. 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, 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.
II.
v.
Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007).
Application
First, the Court notes Wilkinson has failed to respond to the motion to dismiss, and therefore
the Court grants the motion as unopposed. See Local Rule CV-7(e)(2). Nevertheless, the Court
briefly addresses the merits of the motion. After reviewing Wilkinson's legal arguments, they are
simply not supported by the case law. Her claims are based on rejected legal theories, and as a result,
she fails to state claims upon which relief can be granted.
-5-
A.
Wilkinson's Argument Concerning the Note
Wilkinson's core argument is Wells Fargo lacked the authority to foreclose because the Note
was not properly assigned. See Orig. Pet. ¶ 25 ("Only a 'holder in due course' has any authority,
express or implied to make an effective assignment of a Note."). Wilkinson contends "Wells Fargo
should be required to produce the original [Note]." Id. ¶ 46.
To the extent Wilkinson's arguments concern who was the holder of the Note and who can
enforce the Note, these assertions miss the mark. Wells Fargo carried 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 v. BAC Home Loans Servicing, L.P., 722 F.3d 249, 253-56
(5th Cir. 2013). "[F]oreclosure statutes simply do not require possession or production of the
original note" in order to non-judicially foreclose pursuant to a deed of trust." Id. at 253.
In addition, Wilkinson'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 oftrust. Texas
law allows a mortgage servicer to administer the foreclosure of property on behalf of a 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.
§
51.0001 (4)(B).
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
assigns." Id.
§
51.0001(1). Notably absent in these repeated references to security instruments is
any mention of an associated promissory note.
Wilkinson'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.
B.
Wilkinson's Argument Concerning Assignment of the Deed of Trust
Wilkinson's second core argument, which overlaps with the first, concerns MERS's alleged
lack of authority to assign the Deed of Trust. According to Wilkinson, since MERS had no
contractual authority under the Deed of Trust to assign the Deed of Trust to Wells Fargo, any actions
taken by Wells Fargo under the Deed of Trust, i.e., the foreclosure, are void.
Wilkinson is incorrect. The Fifth Circuit and Texas state courts have confirmed MERS can
assign the Deed of Trust and MERS's assignee can nonjudicially foreclose. See, e.g., Rojas v. Wells
Fargo Bank, NA., No. 13-50884, 2014 WL 2547770, at *3(5th Cir. June 6, 2014) ("We have
repeatedly rejected similar attempts to challenge an assignee's standing to foreclose under an
assignment from MERS."); Bierworth v. BAC Home Loans Servicing, L.P.,No. 03-1 1-006444-CV,
2012 WL 3793190, at *5 (Tex.
App.Austin Aug. 30, 2012, no pet.) ("When MERS executed the
assignment to BAC, BAC obtained all of MERS's rights and interests in the deed of trust
(originating from the Lender, Countrywide), including the 'right to foreclose and sell the
Property."). Here, MERS, as nominee for Mission Mortgage, assigned the Deed of Trust to Wells
Fargo, and Wells Fargo foreclosed pursuant to the Deed of Trust. The Deed of Trust grants MERS
the authority to execute such an assignment. Therefore, Wilkinson's arguments regarding MERS 'S
supposed lack of authority to assign the Deed of Trust are unfounded.
Wilkinson's Argument Concerning Loan Modification
C.
Third, Wilkinson states that although she "provided all documentation requested [by Wells
Fargo], no modification or any other type of forbearance was ever granted.
.
.
." Orig. Pet. ¶ 18.
Wilkinson indicates her belief she should have received a loan modification through the Home
Affordable Modification Program (HAMP) or otherwise. Id. ¶J 33-35. Wilkinson, however, cannot
point to any provision of the Loan entitling her to a loan modification, and district courts consistently
do not recognize a right to a loan modification. See, e.g., Wright v. Wells Fargo Bank, NA., No. A-
12-CV-753 LY, 2013 WL 7212006, at *11 (W.D. Tex. Sept. 27, 2013); Calvino v. Conseco Fin.
Servicing Corp.,No. A-12-CA-577-SS, 2013 WL4677742, at *7 (W.D. Tex. Aug.30, 2013) (citing
Cade
v.
BAG Home Loans Servicing, No. H-10-4224, 2011 WL 2470733, at *2 & n.2 (S.D. Tex.
June 20, 2011) (collecting authorities)); Hassell
v.
Bank of Am., NA., No. H-12-1530, 2013 WL
211154, at *3 (S.D. Tex. Jan. 18, 2013); Nolasco v. CitiMortgage, Inc., No. H-12-1875, 2012 WL
3648414, at *4 (S.D. Tex. Aug. 23, 2012). As such, Wilkinson's claims concerning whether she
should have received a loan modification cannot support a cause of action.
Conclusion
In sum, Wilkinson's legal claims are not supported by case law. Consequently, because those
legal arguments underpin her causes of action, those causes of action fail, and the Court must
GRANT the motion to dismiss. Additionally, because this is Wilkinson's third lawsuit regarding
the Property filed with this Court and because she has failed to prosecute all three of the cases, the
Court dismisses her case WITH PREJUDICE.
Accordingly,
IT IS ORDERED that Defendants Wells Fargo Bank, N.A. and Mortgage Electronic
Registration Systems' Motion to Dismiss [#5] is GRANTED; and
IT IS FINALLY ORDERED that Plaintiff Loretta Wilkinson's claims against
Defendants Wells Fargo Bank, N.A.; Mortgage Electronic Registration Systems; Home
Financing Unlimited, Inc.; Mission Mortgage of Texas, Inc.; and Buckley Madole, P.C. are
DISMISSED WITH PREJUDICE.
SIGNED this the
//day of May 2015.
UNITED STATES DISTRICT JUDGE
249
mtci ord jtw.frm
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