Hagood v. Countrywide Home Loans, Inc. et al
ORDER GRANTING 9 Motion to Dismiss. Terminated party Mortgage Electronic Registration Services, Inc. and The Bank of New York Mellon (Trustee for the bankruptcy remote Special Purpose Vehicle CWABS Asset-Backed Certificates 2007-9). Signed by Judge Sam Sparks. (jf)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
COUNTRYWIDE HOME LOANS,
INC., A NATIONAL BANKING
HOME LOANS, INC., A
CORPORATION; CWABS, INC., THE
BANK OF NEW YORK MELLON,
TRUSTEE FOR THE BANKRUPTCY
REMOTE SPECIAL PURPOSE
VEHICLE CWABS ASSET-BACKED
COUNTRYWIDE HOME LOAN
SERVICING, LP, MORTGAGE
SERVICES, INC., DOES 1 THROUGH
BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause,
and specifically Defendants Bank of New York Mellon FKA The Bank of New York, as
for the Certificateholders
of the CWABS, Inc., Asset-Backed Certificates, Series 2007-9
and Mortgage Electronic Registration Systems,
Defendants)'s Motion to Dismiss [#9]. Plaintiff Maurice Hagood did not respond. Having
considered the documents, the case file as a whole, and the applicable law, the Court enters the
following opinion and orders GRANTING the motion to dismiss and dismissing this action in its
This case concerns real property located at 109
Stone Water Drive, Jerrell, Texas 76537
(the Property). See Corrected Notice Removal [#3-1]
Ex. B-i (Pet.) at 2. Plaintiff and his wife,
Connie Hagood, signed a deed
Williamson County, Texas.
of trust on April
19, 2007, later recorded with the County Clerk of
Mot. Dismiss. [#9-1] Ex. A (Deed of Trust).
Home Loans, Inc. (Countrywide) is listed in the Deed of Trust
as the lender of a note to Plaintiff
in the amount of $187,200.00 (the Note), and Mortgage
Electronic Registration Systems, Inc.
(MERS) as Countrywide's "successors and assigns."
Deed of Trust at 2.
On February 28, 2013, MERS assigned all interests in the Deed of
Trust to BNYM.
Mot. Dismiss. [#9-1] Ex. B (Assignment). The Assignment was
recorded with the County Clerk
of Williamson County, Texas on March 1, 2013.
Plaintiff filed this lawsuit in Texas state court on July 3, 2017.
Pet. In his complaint,
Plaintiff asserts the following causes of action against Defendants: (1) lack of
foreclosure; (2) fraud in the concealment; (3) fraud in the inducement; (4)
contract; (5) breach of contract; (6) breach of fiduciary duty; (7) quiet title; (8)
slander of title;
(9) temporary restraining order and injunctive relief and (10) declaratory relief.
Defendants move to dismiss Plaintiff's lawsuit for failure to state a claim.
Federal Rule of Civil Procedure 8(a)(2) requires a complaint to contain "a short and
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
"failure to state a claim upon which relief can be granted."
FED. R. Civ. P.
12(b)(6). To survive a
motion to dismiss, the plaintiff must plead sufficient
facts to state a claim for relief that is
facially plausible. Ashcrofi v. Iqbal, 556 U.S. 662, 678
(2009); Bell Atl. 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 plaintiffs factual
allegations need not
establish that the defendant is probably liable, they must establish more
than a "sheer possibility"
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
Tarrant 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
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
DSC Commc 'ns Corp., 14
F.3d 1061, 1067 (5th Cir. 1994). In deciding a motion to dismiss, courts "must 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.
Makor Issues &
Rights, Ltd., 551 U.S. 308, 322 (2007).
Regarding Deed of Trust
Plaintiff asserts Defendants lack any interest in the Property and the Deed of Trust such
that they have no standing to foreclose on the Property. See Pet. at
Plaintiff challenges the assignment of the Deed of Trust based on various theories, including
fraudulent transfer, no "true sale" of the Note, failure to
negotiate the Note for full value, lack of
authority for MERS to assign interest in the Note, no endorsement
and no assignment of the Note
to BNYM prior to closing
of the Series 2007-9 Trust, and improper structure or operation of the
Series 2007-9 Trust. See Pet. at ¶J 11-24, 4 1-54. Defendants
argue Plaintiff lacks standing to
contest the assignment of the Deed of Trust.
As explained below, the Court finds Plaintiff has failed to state a
facially plausible claim
for challenging Defendants' assignment and interest of the Note. First,
Plaintiff lacks standing to
challenge the assignment of the Note based on any alleged fraud in the
assignment chain. See
Deutsche Bank Nat. Tr. Co., 735 F.3d 220, 228 (5th Cir. 2013). Second, Plaintiff's
challenge of no "true sale" is without legal merit. See Davis
Silver State Fin. Services, CIV.A.
H-13-1432, 2014 WL 713235, at *4 (S.D. Tex. Feb. 20, 2014) (dismissing claims based on
true sales"); Rougeux v. Bank ofAm., NA., A-12-CV-1137 LY, 2013 WL 12131907, at *4
Tex. May 30, 2013), report and recommendation approved sub nom. Rougeux Bank ofAm.,
Rougeux, 2013 WL 12133972 (W.D. Tex. June 24, 2013) (same). Third, negotiation of the
Note for full value is not required to foreclose under Texas law. See Kiggundu v. Mortgage Elec.
Registration Sys. Inc., 469 Fed. Appx. 330, 331(5th Cir. 2012) (finding possession of a note
sufficient to foreclose). Fourth, MERS had authority as Countrywide's "successors and assigns"
under the Deed of Trust to assign the same to BNYM. See Deed of Trust at 2; see also Van
US. Bank Nat. Ass 'n, 582 Fed. Appx. 279, 282 (5th Cir. 2014) ("assignments through
MERS are valid under Texas law"). Finally, Plaintiff has failed to identify any legal basis for
requiring assignment of the Note prior to closing of the Series 2007-9 Trust or a particular
structure and operation of the trust at the time of assignment. To the extent Plaintiff's claims are
based on enforcement of the ternis in the prospectus of the Series 2007-9 Trust, Plaintiff lacks
standing to sue under these terms. See Sigaran v. US. Bank
Nat. Ass 'n, 560 Fed. Appx. 410, 413
(5th Cir. 2014).
In sum, MERS assigned all interest in the Deed of Trust
to BNYM in a duly recorded
assignment. See Assignment. The Deed of Trust signed by Plaintiff
specifically states "[t]he
Note or a partial interest in the Note (together with this Security
Instrument) can be sold one or
more times without prior notice To Borrower," as happened here. See
Deed of Trust at 12.
Plaintiffs claims challenging Defendants' assignment or interest in the Deed of
therefore subject to dismissal under Rule 12(b)(6).
Plaintiffs fraud claims allege Defendants concealed the fact they were not a Federal
Reserve Depository Bank, Defendants concealed a third-party Sponsor Bank with Securitization
Agreements, and Defendants intentionally misrepresented the power of sale provision in the
Deed of Trust. See Pet. at ¶f 55-73.
The elements of fraud under Texas law are (1) a material representation was made; (2)
the representation was false; (3) when the representation was made, the speaker knew it was false
or made it recklessly without any knowledge of the truth and as a positive assertion; (4) the
speaker made the representation with the intent that the other party should act upon it; (5) the
party acted in reliance on the representation; and (6) the party thereby suffered injury. In re
FirstMerit Bank, N.A., 52 S.W.3d 749, 758 (Tex. 2001). Fraud claims must be pleaded with
R. Civ. 9(b).
Plaintiffs fraud claims fail on the pleadings. Although Plaintiff recites and alleges each
element of a fraud claim, the pleading lacks particularity. For example, Plaintiff summarily
contends he acted in reliance of and was injured by Defendants' alleged fraudulent actions.
However, Plaintiff has pleaded no details of how he
relied on any of Defendants' alleged
fraudulent actions in entering the Deed of Trust or how he was
in any way injured as a result of
the Defendants' alleged fraudulent actions. Indeed,
Plaintiff appears to rely on actions
Defendants took after he signed the Deed of Trust, and therefore
undercut any legal basis for a
fraud claim. Accordingly, Plaintiffs' claims of fraud must be
3. Contract Claims
Plaintiff also asserts claims of unconscionable contract and breach of
contract based on
the terms of the Deed of Trust signed on April 19, 2007 and
Defendants' actions in the later
assignment of the Deed of Trust on February 28, 2013. See Pet. at
¶f 82-86. Plaintiff waited
over four years to file this lawsuit.
limitations. See Vee Bar, Ltd.
Thus, Plaintiff's claims are barred by the statute of
N Nat. Gas Co., 4:1 6-CV-0 1 5-DAE, 2016 WL 4006131, at
(W.D. Tex. July 25, 2016) ("Under Texas law, a claim for breach of
contract is "subject to a
four-year statute of limitations"); Linder v. Deutsche Bank Nat'l Tr. Co.,
2015 WL 12743639, at *5 (W.D. Tex. Jan. 6, 2015) (stating a
is also governed by a four-year statute
of unconscionable contract
of limitations). Moreover, Plaintiff has failed to identify
how Defendants breached "paragraph 23 of the Deed of Trust," which
requires release of the
security instrument upon "payment of all sums secured by" the same. See Deed
of Trust at 14.
Thus, dismissal of Plaintiff's contract claims is warranted.
4. Fiduciary Duty Claims
Without providing details, Plaintiff contends Defendants breached their
See Pet. at
87-92. However, "[u]nder Texas law, a mortgage lender or servicer
generally does not owe a fiduciary duty to a borrower." Draper
Nationstar Mortg., LLC, A-
13-CA-1049-SS, 2014 WL 408750, at *7 (W.D. Tex. Jan. 28, 2014). Plaintiff has
allege extraordinary circumstances giving rise to a
fiduciary duty owed to him in this case. See
To the extent Plaintiff relies on fiduciary duties between
Defendants themselves, such claims
also fail because Plaintiff himself was owed no duty.
5. Title Claims
Plaintiff brings two causes of action related to the title of the
Property: a quiet title claim
and claim alleging Defendants slandered title to the
Property. See Pet, at ¶J 93-108. Both
claims fail for the reasons below. First, Plaintiff's quiet title
claim fails because it does not
contest the validity of the Deed of Trust or claim an interest superior
to Defendants, but instead
merely challenges the validity of the assignment of Deed of Trust.
Chase Bank, NA., 541 Fed. Appx. 380, 385 (5th Cir. 2013)
(affirming dismissal of quiet title
claim because plaintiff failed to "prove and recover on the strength of
[her] own title"); see also
Morlock, L.L.C. v.
JP Morgan Chase
Bank, NA., 586 Fed. Appx. 631, 633 (5th Cir. 2013)
of quiet title claim because plaintiff "neither contests the Deed of Trust's
validity nor suggests that its own interest
is superior to the Deed
of Trust."). Second,
Plaintiff does not plead all elements of an action for slander of title. A claim for slander
requires facts establishing the "(1) uttering and publishing of disparaging words;
(2) falsity; (3)
malice; (4) special damages; (5) possession of an estate or interest in the
and (6) the loss of a specific sale." See Rice v. JPMorgan Chase Bank, Nat. Ass;n,
CIV.A. H- 150416, 2015 WL 4112287, at *3 (S.D. Tex. July 7, 2015). Plaintiff's slander
title claim is
premised on Defendants' alleged failure to record instruments, not the uttering or
disparaging and false words. Moreover, Plaintiff has failed to plead malice or special
Accordingly, both of Plaintiff's claims related to the title of the Property have not been
pleaded and should be dismissed.
6. Remaining Claims
Plaintiff seeks injunctive relief in the form of a restraining order by
from prosecuting any continuance of a foreclosure sale pending trial
in this case. See Pet, at ¶
109-114. These requests cannot be properly made in a complaint. See Local
Rule CV-65. Also,
Plaintiff has not pleaded a single viable cause of action and thus his request
for injunctive relief
and a restraining order fails. See Harris County, Tex.
CarMax Auto Superstores Inc., 177 F.3d
306, 320 (5th Cir. 1999) (a party must demonstrate a likelihood of success
on the merits of his or
her claim in order to obtain an injunction or temporary restraining order).
Finally, Plaintiff requests a judicial declaration that he is the equitable owner
Property and Defendants have no interest estate, right, or title in the Property. See Pet. at
¶J 115-118. As explained in this opinion, all of Plaintiff's claims are dismissed and therefore no
justiciable controversy exists for which the Court may grant a declaratory judgment.
Wells Fargo Bank, NA., 560 Fed. Appx. 233, 243 (5th Cir. 2014) (affirming
dismissal of request for declaratory judgment based on dismissal of other causes of action).
Dismissal of all claims is warranted in this case because Plaintiff has failed to plausibly
plead a claim for relief. Given the foregoing analysis, the Court is convinced leave to amend
would be futile. Plaintiff's claims are therefore dismissed with prejudice.
IT IS ORDERED that Defendants' Motion to Dismiss [#9] is GRANTED;
IT IS FINALLY ORDERED that all claims brought by Plaintiff in the above-
styled and numbered cause are DISMISSED WITH PREJUDICE.
SIGNED this the
day of October 2017.
UNITED STATES DISTRICT JUDGE
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