Gomez et al v. Niemann & Heyer, LLP
ORDER DENYING 60 Motion to Dismiss New Claims Added in Plaintiffs' Amended Complaint. Signed by Judge Robert Pitman. (ml)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
MICHAEL A. GOMEZ and
NORA A. GOMEZ, on behalf of
themselves and all others
NIEMANN & HEYER, L.L.P., et al.,
Before the Court is Defendant Niemann & Heyer, L.L.P.’s Motion for Dismissal of New
Claims Added in Plaintiffs’ Amended Complaint, filed August 4, 2016. (Dkt. 60). For the following
reasons, the Court DENIES Defendant’s Motion.
The factual background of this case is sufficiently laid out in the Court’s Order on
Defendant’s prior motion to dismiss. (Dkt. 42). Accordingly, it will not be repeated here.
Since the Court’s prior Order, Plaintiffs filed an amended complaint which asserts three new
claims against Defendant: usury, violations of the Texas Deceptive Trade Practices Act (“DTPA”),
and unjust enrichment. (See Dkt. 55). On August, 4, 2016, Defendant filed the instant motion
seeking dismissal of Plaintiffs’ usury and DTPA claims. (Dkt. 60).
When evaluating a motion to dismiss for failure to state a claim under Rule 12(b)(6) the
complaint must be liberally construed in favor of the plaintiff and all facts pleaded therein must be
taken as true. Leatherman v. Tarrant Cnty. Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 164
(1993); Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996). Although Federal Rule of Civil Procedure 8
mandates only that a pleading contain a “short and plain statement of the claim showing that the
pleader is entitled to relief,” this standard demands more than unadorned accusations, “labels and
conclusions,” “a formulaic recitation of the elements of a cause of action,” or “naked assertion[s]”
devoid of “further factual enhancement.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Rather,
a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is
plausible on its face. Id. at 570. “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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
The court must initially identify pleadings that are no more than legal conclusions not
entitled to the assumption of truth, then assume the veracity of well-pleaded factual allegations and
determine whether those allegations plausibly give rise to an entitlement to relief. If not, the
complaint has alleged—but it has not show[n]—that the pleader is entitled to relief. Iqbal, 556 U.S.
at 679 (quoting Fed. R. Civ. P. 8(a)(2)). Throughout this process, the court “must consider the
complaint in its entirety, as well as other sources courts ordinarily examine when ruling on Rule
12(b)(6) motions to dismiss, in particular, 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).
The elements of a usury claim are (1) a loan of money; (2) an absolute obligation to repay the
principal; and (3) the exaction of a greater compensation than allowed by law for the use of the
money by the borrower. First Bank v. Tony’s Tortilla Factory, Inc., 877 S.W.2d 285, 287 (Tex. 1994).
Stated differently, “[u]sury must be founded on an overcharge by a lender for the use, forbearance,
or detention of the lender’s money[.]” Garcia v. Texas Cable Partners, L.P., 114 S.W.3d 561, 564 (Tex.
App. 2003). Plaintiffs argue, and Defendant does not dispute, that usury claims can be asserted
against creditors as well as any person who charges or receives an unlawful amount of interest. (Pl.’s
Opp., Dkt. 71, at 3 n.1) (citing Tex. Fin. Code §§ 349.001(a), 349.002(a)).
Plaintiffs base their usury charge on Defendant’s $200 fee for payment plans. Plaintiffs argue
that the $200 charge is “in part to forbear from executing on Plaintiffs’ debt” because it is “so
radically in excess of the actual costs of the administrative service allegedly provided by Defendant.”
(Pl.’s Opp., Dkt. 7, at 3). The claim would thus be “founded on an overcharge” for the forbearance
of money. Garcia, 114 S.W.3d 561, 564.
There is ample support for the proposition that administrative fees may be considered
interest despite being styled as “service charges,” as Plaintiffs allege is the case here. See First Bank,
877 S.W.2d at 287. “A court may look past the label of the fee to determine if a fee is a service
charge or interest.” Id. “Interest is compensation for the use, forbearance, or detention of money.”
Id. On the other hand “[f]ees which are an additional charge supported by a distinctly separate and
additional consideration . . . are not interest and thus do not violate the usury laws.” Id. Whether a
fee is a service charge or interest is a “question of fact for the jury when there is any dispute in the
evidence as to whether a fee is actually for an additional consideration . . . or is merely a device to
conceal usury.” Id.
In its Motion, Defendant argues that “[t]he fee charged for the payment plan does not
satisfy” the requirements for a usury claim. (Def.’s Mot., Dkt. 60, at 3). Defendant explains that the
$200 fee is not interest because it “[is] charged for the cost of administering the plan and thus ‘was
for consideration for other than the lending of money’” and therefore cannot support a usury claim.
(Def.’s Reply, Dkt. 72, at 1–2) (citing First Bank, 877 S.W.2d at 288).
But where, as here, the purpose of the payment is in dispute, a question of fact arises. First
Bank, 877 S.W.2d at 287. Accordingly, the question is more appropriately resolved on a motion for
summary judgment or motion for directed verdict, as it was in nearly all of Defendant’s cited cases.
See First Bank, 877 S.W.2d 285 (directed verdict); Garcia, 114 S.W.3d 561 (summary judgment);
Domizio v. Progressive Cnty. Mut. Ins. Co., 54 S.W.3d 867 (Tex. App. 2001) (summary judgment). The
sole cited case that resolved the issue on a motion to dismiss did so because the plaintiffs in that
case did not allege “that Defendants received any compensation for the use, forbearance, or
detention of money.” Rivera v. AT&T Corp., 141 F. Supp. 2d 719, 723 (S.D. Tex. 2001). Plaintiffs
have done so here. (First. Am. Compl., Dkt. 55, ¶ 91). 1
To state a claim under the DTPA, the Plaintiffs must show that they are consumers, that
Defendant engaged in a false, misleading, deceptive, or unconscionable act, and that the act caused
damages. Great Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 327 (5th Cir. 2002);
Tex. Bus. & Com. Code § 17.50. In order to establish consumer standing, Plaintiffs must show that
(1) they sought or acquired goods or services by purchase or lease, and (2) those goods or services
form the basis of the basis of their complaint. Foster v. U.S. Bank Nat’l Ass’n, No. 1:13-cv-630, 2015
WL 11110598, at *4 (E.D. Tex. Apr. 8, 2015).
The Court recognizes that Plaintiffs characterize the $200 fee as a payment for “the service of
administering a payment plan” when arguing in support of their DTPA claim, which appears to be
inconsistent with their usury claim. However, a party “may plead inconsistent claims and facts in
support of alternative theories of recovery.” Westcott Holdings, Inc. v. Monitor Liability Managers, Inc.,
No. H-06-1746, 2006 WL 3041606, at *3 (S.D. Tex. Oct. 24, 2006) (citing Fed. R. Civ. Proc. 8(e)).
Plaintiffs argue that they have sufficiently pleaded a cause of action under the DTPA. First,
Plaintiffs assert that they are consumers because they have purchased a service, here the
administration of a payment plan, which forms the basis of their complaint. (First Am. Compl.
¶ 103). Second, Plaintiffs allege that the fees Defendant charges for the payment plan are
unconscionable and illegal. (Id. ¶ 107); see also Tex. Prop. Code § 209.0062. More specifically,
Plaintiffs allege that Defendant’s actions are unconscionable because they charged the excessive fees
under the threat of foreclosure proceedings. (First Am. Compl. ¶ 67). Finally, Plaintiffs allege that
Defendant’s conduct caused them injury because Plaintiffs “were misled into paying Defendant
funds that were not owed and/or illegal administrative fees, and unreasonable attorneys’ fees.” (Id.
Defendant, on the other hand, argues that Plaintiffs “have not and cannot state a claim
under the DTPA because in the transaction in question they did not seek any goods or services and
thus do not have the required consumer standing.” (Def.’s Mot., Dkt. 60, at 4). According to
Defendant, Plaintiffs only sought a modification of an existing debt, “which does not qualify as a
good or service.” (Id.). Defendant cites a number of cases in support of its assertion, but they are all
distinguishable. Each cited case involves the collection of a debt, but none deals with the present
situation in which an individual pays money to a debt collector in exchange for that collector’s
administration of a payment plan. See, e.g., Miller v. BAC Home Loans Servicing, L.P., 726 F.3d 717 (5th
Cir. 2013) (affirming the dismissal of a DTPA claim based on a lender’s failure to modify plaintiffs’
The Defendant’s arguments therefore do not convince the Court that Plaintiffs DTPA
allegations are insufficient as a matter of law.
For the reasons stated above, the Court DENIES Defendant’s Motion for Dismissal of
New Claims Added in Plaintiffs’ Amended Complaint.
SIGNED on October 7, 2016.
UNITED STATES DISTRICT JUDGE
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