Wicker, Jr. v. Seterus, Inc et al
ORDER GRANTING 5 Motion to Dismiss for Failure to State a Claim Signed by Judge Kathleen Cardone. (mn)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
EL PASO DIVISION
THOMAS GEORGE WICKER, JR.,
SETERUS, INC., et al.,
On this day, the Court considered Defendant Seterus, Inc.’s (“Seterus”) Motion to
Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6) (“Motion”), ECF No. 5. For the
reasons set forth below, the Motion is GRANTED.
This suit arises from a fifteen-year loan agreement secured by Plaintiff’s home, which is
located at 6533 Calle Bonita Lane in El Paso, Texas (“Calle Bonita Property”). See Pl.’s Orig.
Pet. & App. for Temp. Restraining Order (“Complaint”) 2, ECF No. 1-1.1 The instant case is the
third case that Plaintiff has filed relating to the attempted foreclosure of the Calle Bonita
Property, in connection with this same loan agreement. See Wicker v. Bank of Am., N.A. (Wicker
I), No. EP-14-CV-91-PRM, 2014 WL 10186157 (W.D. Tex. Aug. 27, 2014); Wicker v. Bank of
Am., N.A. (Wicker II), No. EP-15-CV-00015-FM, 2015 WL 632096 (W.D. Tex. Feb. 13, 2015).2
Plaintiff refers to this agreement as the “mortgage,” and Seterus refers to the agreement as the “mortgage loan” or
“loan agreement.” See, e.g., Compl. 2; Mot. 3-4. The Court elects to use the term “loan agreement,” but notes that
all of these terms—“mortgage,” “mortgage loan,” and “loan agreement”—refer to the same loan agreement secured
by the Calle Bonita Property. See Compl. 2.
Generally, “[i]n considering a motion to dismiss for failure to state a claim, a district court must limit itself to the
contents of the pleadings, including attachments thereto.” Collins v. Morgan Stanley Dean Witter, 224 F.3d 496,
498 (5th Cir. 2000) (citing Fed. R. Civ. P. 12(b)(6)). However, “[i]n deciding a 12(b)(6) motion to dismiss, a court
may permissibly refer to matters of public record,” Cinel v. Connick, 15 F.3d 1338, 1343 n.6 (5th Cir. 1994)
(citations omitted), including court documents from prior related proceedings, Price v. U.S. Bank, N.A., No. 3:14CV-3554-N-BK, 2015 WL 1505695, at *2 (N.D. Tex. Mar. 30, 2015) (“The Court may take notice of the judicial
Sometime in late 2013, Plaintiff missed several payments on the loan agreement. See
Compl. 2. Plaintiff alleges that Bank of America, the loan servicer at the time, “then
miscalculated the amount due on the mortgage attempting to force Plaintiff to pay significantly
more than was owed.” Id. Plaintiff claims that “Bank of America also miscalculated the amount
allegedly due on escrow,” and that, in doing so, Bank of America was “attempting to force
Plaintiff to pay far more than [was] owed.” Id. at 2-3.
On February 28, 2014, Plaintiff and Rocio Padilla Wicker (“Rocio”) filed a lawsuit in the
243rd District Court of El Paso County, Texas—Wicker I—in anticipation of the foreclosure of
the Calle Bonita Property as a result of Plaintiff’s missed payments. See Wicker I, 2014 WL
10186157, at *1.3 Plaintiff and Rocio named Bank of America as a defendant in Wicker I, and
Bank of America subsequently removed the case to federal court. See id. In the Wicker I
lawsuit, Plaintiff and Rocio alleged that Bank of America “breached the contract ‘by improperly
calculating the amount due on the note, improperly imposing and calculating escrow, improperly
accelerating the Loan, and improperly posting the home for foreclosure based upon incorrect
amounts due.’” Id. at *2. Plaintiff and Rocio also brought a Real Estate Settlement Procedures
Act (“RESPA”) claim, alleging that Bank of America “collect[ed] or attempt[ed] to collect
escrow amounts far in excess of those permitted by the law,” and a Texas Deceptive Trade
Practices Consumer Protection Act (“DTPA”) claim, alleging that Bank of America
“represent[ed] that the mortgage services had characteristics, uses or benefits that they did not.”
Id. (quoting Wicker I Compl. 4). On August 27, 2014, another judge of this Court dismissed
record in prior related proceedings.”). Because the opinions and records in the prior cases are matters of public
record, the Court may consider these documents in deciding the 12(b)(6) motion. See Cinel, 15 F.3d at 1343 n.6;
Price, 2015 WL 1505695, at *2.
Plaintiff and Rocio also named Beverly Mitrisin and Charles Thomas Nations as defendants in Wicker I; however,
Mitrisin and Nations were dismissed when Plaintiff and Rocio filed their First Amended Complaint. See Wicker II,
No. EP-15-CV-00015-FM, 2015 WL 632096, at *1 (W.D. Tex. Feb. 13, 2015).
Plaintiff and Rocio’s claims for failure to state a claim upon which relief could be granted. See
id. at *5. The court dismissed the breach of contract and DTPA claims without prejudice and the
RESPA claim with prejudice. See id.
According to Plaintiff’s Complaint in the instant case, in August of 2014—around the
time that the federal district court dismissed the claims in Wicker I—the parties came to an
agreement in which Plaintiff would pay “the amounts past due for the mortgage and the past
taxes.” See Compl. 3; Wicker I, 2014 WL 10186157, at *5. However, Plaintiff explains that,
despite this agreement, there was still a “‘dispute’ [regarding] the amount of the attorney’s fees
and whether Bank of America was permitted to impose force placed escrow.” See Compl. 3.
On December 30, 2014, Plaintiff and Rocio again filed a lawsuit—Wicker II—in the
243rd District Court of El Paso County, Texas, in anticipation of the foreclosure of the Calle
Bonita Property in which they “assert[ed] a breach of contract claim and request[ed] a temporary
restraining order against Bank of America.” See Wicker II, 2015 WL 632096, at *1. In addition
to naming Bank of America as a defendant, Plaintiff and Rocio also named Beverly Mitrisin and
Charles Thomas Nations as defendants. Id. As in Wicker I, Bank of America removed the case
to federal court. See id. at *2.
On February 13, 2015, the Wicker II court found that it had diversity jurisdiction over the
case, despite the fact that Plaintiff, Rocio, Mitrisin, and Nations were all Texas citizens4 and
despite Plaintiff’s allegation that the amount in controversy was under $75,000.00. See id. at *3.
The Wicker II court held that Mitrisin and Nations were “wrongfully joined” because Plaintiff
and Rocio “failed to state any claims against Mitrisin and Nations,” and because Mitrisin and
The Wicker II court noted that “[t]he pleading listed Mitrisin and Nations as located in Texas,” and assumed that
Mitrisin and Nations were Texas citizens. See Wicker II, 2015 WL 632096, at *1, *1 n.6.
Nations were “not parties necessary to provide [Plaintiff and Rocio] with any relief.” Id. The
Wicker II court further held that, “[b]ecause Plaintiffs are seeking to prevent foreclosure on the
[Calle Bonita] Property, the amount in controversy [wa]s equal to the [Calle Bonita] Property’s
value,” and thus the amount in controversy exceeded $75,000.00. Id. Accordingly, the Wicker II
court found that it had diversity jurisdiction over the suit between Plaintiff and Rocio, Texas
citizens, and Bank of America, a non-Texas citizen. See id. Ultimately the court dismissed
Plaintiff and Rocio’s claims for failure to state a claim pursuant to Rule 12(b)(6), explaining that
Plaintiff and Rocio could not maintain a breach of contract claim when they had defaulted on the
loan agreement. See id.
In dismissing Plaintiff and Rocio’s claims, the Court noted that:
Although a Rule 12(b)(6) dismissal is usually without prejudice to refile, some situations
call for finality. “At some point a court must decide that a plaintiff has had fair
opportunity to make his case; if, after that time, a cause of action has not been
established, the court should finally dismiss the suit.”
Id. (quoting Jacquez v. Procunier, 801 F.2d 789, 792 (5th Cir. 1986)).
The Wicker II court found that a dismissal with prejudice was particularly appropriate under the
facts of the case, because, “[b]efore commencing this cause of action, Plaintiffs asserted their
breach of contract claim in multiple pleadings.” Id. at *4. Thus, “[i]n the interest of finality and
in light of multiple prior opportunities to correct the defect [in their pleadings],” the court
dismissed Plaintiff and Rocio’s claims with prejudice. Id.
At the time of both prior lawsuits, the loan was serviced by Bank of America. See id. at
*1; Compl. 2. However, in April of 2015, Bank of America transferred the mortgage to
Seterus—Defendant in the instant case. Compl. 3. Plaintiff asserts that, on May 22, 2015,
“Plaintiff wrote Seterus a letter reiterating Plaintiff’s agreement to pay the past due amounts in
full[,] . . . question[ing] two charges[,] and request[ing] clarification of these charges.” Id.
Plaintiff states that “Seterus twice informed Plaintiff that it needed additional time to respond.”
On August 21, 2015, “Plaintiff sent a follow up letter to Seterus and its attorneys,” in
which “Plaintiff tendered Seterus $67,909.30” in order to “bring the note current and reimburse
Seterus for the past real estate taxes.” Id. Plaintiff explains that, in this letter, he “also offered
to pay $4,000 for attorneys’ fees,” but that he “indicat[ed to Seterus] that amounts in excess were
neither reasonable nor necessary given Plaintiff’s agreement to get current at least as early as
August of 2014.” Id. In the letter, Plaintiff asserts that he also “agreed to go to binding
arbitration for the remaining amount of the claimed attorneys’ fees.” Id. Plaintiff states that
Seterus never responded to this letter. Id. Ultimately, according to Plaintiff, Seterus
“accelerate[d] the mortgage and post[ed] the property for foreclosure,” although Plaintiff does
not indicate when this occurred. See id. at 4.
Plaintiff brought the instant lawsuit against Seterus on October 27, 2015, in the 327th
District Court of El Paso County, Texas, and Seterus removed the case to federal court on
November 12, 2015. See Notice of Removal 1, ECF No. 1. On December 3, 2015, Seterus filed
its Motion, asking the Court to dismiss all claims against it as barred by res judicata or collateral
estoppel, and because Plaintiff “failed to state a claim upon which relief may be granted.” See
A motion to dismiss pursuant to Rule 12(b)(6) challenges a complaint on the basis that it
fails to state a claim upon which relief may be granted. Fed. R. Civ. P. 12(b)(6). In ruling on a
Rule 12(b)(6) motion, the court must accept well-pleaded facts as true and view them in a light
most favorable to the plaintiff. Calhoun v. Hargrove, 312 F.3d 730, 733 (5th Cir. 2002); Collins
v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000). Though a complaint need
not contain “detailed factual allegations,” a plaintiff’s complaint must allege “enough facts to
state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555, 570 (2007); see also Colony Ins. Co. v. Peachtree Constr., Ltd., 647 F.3d 248, 252 (5th Cir.
2011). “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).
“[A] plaintiff’s obligation to provide the grounds of his entitlement to relief requires
more than labels and conclusions, and a formulaic recitation of the elements of a cause of action
will not do.” Twombly, 550 U.S. at 555; see also Colony Ins. Co., 647 F.3d at 252. Ultimately,
the “[f]actual allegations [in the complaint] must be enough to raise a right to relief above the
speculative level.” Twombly, 550 U.S. at 555 (internal citation omitted); see also Colony Ins.
Co., 647 F.3d at 252 (“Factual allegations must be sufficient to raise a non-speculative right to
relief.”). Nevertheless, “a well-pleaded complaint may proceed even if it strikes a savvy judge
that actual proof of those facts is improbable, and ‘that a recovery is very remote and unlikely.’”
Twombly, 550 U.S. at 556 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).5
Plaintiff, a licensed attorney, is representing himself in this case. See Compl. 6. Although generally courts must
construe pro se pleadings liberally and hold them “to less stringent standards than formal pleadings drafted by
lawyers,” see Erickson v. Pardus, 551 U.S. 89, 94 (2007), a number of courts have declined to construe pro se
pleadings liberally when the pro se litigant is an attorney. See U.S. ex rel. Holmes v. Northrop Grumman Corp., No.
15-60414, --- Fed. App’x ----, 2016 WL 1138264, at *4 (5th Cir. Mar. 23, 2016); Holtz v. Rockefeller & Co., 258
F.3d 62, 82 n.4 (2d Cir. 2001); Smith v. Plati, 258 F.3d 1167, 1174 (10th Cir. 2001); Powell v. Galveston Indep. Sch.
Dist., No. CIV.A. G-06-415, 2006 WL 2239097, at *1 n.3 (S.D. Tex. Aug. 1, 2006). Likewise, the Court declines to
construe the pleadings liberally in this case where the Plaintiff, though representing himself, is a licensed attorney.
See U.S. ex rel. Holmes, 2016 WL 1138264, at *4. Further, even if the Court construed Plaintiff’s Complaint
liberally, he would still not prevail, as explained below.
In the Complaint, Plaintiff asserts a breach of contract claim, a claim for declaratory
judgment, and a permanent injunction “enjoining non-judicial foreclosure.” See Compl. 4-6. In
Plaintiff’s breach of contract claim, he alleges that Seterus “improperly calculat[ed] the amount
due on the note and post[ed] the home for foreclosure based upon an amount not actually due,”
explaining that, “[s]pecifically, the attorneys’ fees sought were neither reasonable nor
necessary.” See id. at 4. In Plaintiff’s claim for declaratory judgment, he seeks a declaration
from the Court that “Seterus is not entitled to force placed escrow” because “escrow was waived
by years of conduct along with specific representations made in order to induce the mortgage.”
See id. Finally, Plaintiff seeks a permanent injunction enjoining foreclosure on the Calle Bonita
Property because “Seterus improperly posted the [Calle Bonita Property] for foreclosure.” See
Seterus argues that the claims for breach of contract and declaratory judgment are barred
by res judicata, based upon the dismissal of Plaintiff’s claims with prejudice in Wicker II. See
Mot. 7-10. Seterus further argues that, as a result of this bar, Plaintiff’s request for injunctive
relief should be dismissed “because it is not supported by a viable cause of action.” See id. at
Applicability of res judicata at the pleading stage
Before turning to the substance of Defendant’s Motion, the Court first considers the
propriety of raising a res judicata argument in a motion to dismiss. Although “generally a res
judicata contention cannot be brought in a motion to dismiss” because it “must be pleaded as an
affirmative defense,” see Test Masters Educ. Servs., Inc. v. Singh, 428 F.3d 559, 570 n.2 (5th
Cir. 2005), “[d]ismissal under Rule 12(b)(6) on res judicata grounds may be appropriate when
the elements of res judicata are apparent on the face of the pleadings.” Dean v. Miss. Bd. of Bar
Admissions, 394 F. App’x 172, 175 (5th Cir. 2010); see also Meyers v. Textron, Inc., 540 F.
App’x 408, 410 (5th Cir. 2013) (“[R]es judicata may be properly raised on a motion to dismiss
when ‘the facts are admitted or not controverted or are conclusively established.’” (quoting
Clifton v. Warnaco, Inc., 53 F.3d 1280, 1995 WL 295863, at *6 n.13 (5th Cir. 1995))). In
addition, dismissal under Rule 12(b)(6) is proper if the elements of res judicata are apparent
“based on the facts pleaded and judicially noticed.” See Hall v. Hodgkins, 305 F. App’x 224,
227-28 (5th Cir. 2008) (“If, based on the facts pleaded and judicially noticed, a successful
affirmative defense appears, then dismissal under Rule 12(b)(6) is proper.”).
In this case, as set out below, the Court resolves the issue of res judicata by relying only
on the facts pleaded in Plaintiff’s Complaint and the judicially noticed record in the prior
lawsuits. Therefore, because the elements of res judicata are apparent “based on the facts
pleaded and judicially noticed,” the Court finds that it is appropriate to review Seterus’s res
judicata defense in the context of the Motion to Dismiss. See Hall, 305 F. App’x at 229
(“Because [plaintiff’s] own pleadings and the judicially noticed, publicly available documents all
reveal that res judicata’s four requirements are satisfied, the district court properly granted
defendants’ Rule 12(b)(6) motion to dismiss.”).6
Res judicata bars Plaintiff’s claims
Res judicata is an affirmative defense based on the principle “that controversies once
decided shall remain in repose.” See Comer v. Murphy Oil USA, Inc., 718 F.3d 460, 466 (5th
Cir. 2013) (quoting Iselin v. Meng, 307 F.2d 455, 457 (5th Cir. 1962)); Test Masters, 428 F.3d at
Moreover, in Test Masters Education Services, Inc. v. Singh, 428 F.3d 559 (5th Cir. 2005), the Fifth Circuit
reviewed the district court’s dismissal of the plaintiff’s claims under the 12(b)(6) standard because the plaintiff “did
not challenge [the defendant’s] ability to argue res judicata in a motion to dismiss rather than in [its] response or a
motion for summary judgment.” Id. at 570 n.2. Likewise, in this case Plaintiff has not challenged Seterus’s ability
to argue res judicata in a motion to dismiss. See generally Resp.
570 n.2. Res judicata “does not depend upon whether or not the prior judgment was right.” See
Comer, 718 F.3d at 466 (quoting Iselin, 307 F.2d at 457). The “rule of res judicata encompasses
two separate but linked preclusive doctrines: (1) true res judicata or claim preclusion and (2)
collateral estoppel or issue preclusion.” Comer, 718 F.3d at 466 (quoting Test Masters, 428 F.3d
at 571). “The preclusive effect of a federal-court judgment is determined by federal common
law.” Taylor v. Sturgell, 553 U.S. 880, 891 (2008); Ellis v. Amex Life Ins. Co., 211 F.3d 935,
937 (5th Cir. 2000).
Under federal law, true res judicata—also referred to as claim preclusion—“has four
elements: (1) the parties are identical or in privity; (2) the judgment in the prior action was
rendered by a court of competent jurisdiction; (3) the prior action was concluded by a final
judgment on the merits; and (4) the same claim or cause of action was involved in both actions.”
Comer, 718 F.3d at 467 (quoting Test Masters, 428 F.3d at 571). If all four elements are met, the
court must then determine if “the previously unlitigated claims could or should have been
asserted in the prior proceeding.” In re Paige, 610 F.3d 865, 870 (5th Cir. 2010) (quoting D–1
Enters., Inc. v. Commercial State Bank, 864 F.2d 36, 38 (5th Cir. 1989)). Because res judicata is
an affirmative defense, the defendant bears the burden of proving this defense. See Taylor, 553
U.S. at 907; Torello, 2013 WL 3289526, at *5 (“[T]he burden of proving claim preclusion ‘rests
on the party claiming the benefit of the doctrine.’”).
The Court now looks to the facts of Wicker II to determine if the four elements of res
judicata are satisfied in this case.
Parties are identical or in privity
Although Seterus was not a party to Wicker II, Seterus nonetheless contends that the first
element of res judicata—privity—is met because Bank of America was a party to Wicker II and
because Seterus “succeeded Bank of America in the servicing of his loan.” See Mot. 7. Plaintiff
does not address the element of privity in his Response. See generally Resp. to Mot. (“Resp.”).
“A non-party defendant can assert res judicata so long as it is in ‘privity’ with the named
defendant.” Russell v. SunAmerica Sec., Inc., 962 F.2d 1169, 1173 (5th Cir. 1992); Torello,
2013 WL 3289526, at *6. “[P]rivity exists in just three, narrowly-defined circumstances:
(1) where the non-party is the successor in interest to a party’s interest in property; (2) where the
non-party controlled the prior litigation; and (3) where the non-party’s interests were adequately
represented by a party to the original suit.” Meza v. Gen. Battery Corp., 908 F.2d 1262, 1266
(5th Cir. 1990). Specifically, “privity exists between preceding and succeeding owners of
property,” and “assignees and servicing agents of a loan are in privity with an original mortgage
company.” See Ernest v. CitiMortgage, Inc., No. SA:13-CV-802-DAE, 2014 WL 294544, at *4
(W.D. Tex. Jan. 22, 2014); see also Taylor, 553 U.S. at 894 (explaining that “nonparty
preclusion may be justified based on a variety of pre-existing ‘substantive legal relationship[s]’
between the person to be bound and a party to the judgment,” including “preceding and
succeeding owners of property”).
The Court finds that Seterus is in privity with Bank of America. In the Complaint,
Plaintiff explains that “[i]n April of 2015, Bank of America transferred the mortgage to Seterus,”
and that, shortly after this transfer, Plaintiff contacted Seterus regarding repayment of “the past
due amounts” on the mortgage. See Compl. 3. Thus, under the facts alleged by Plaintiff, Seterus
is in privity with Bank of America because Seterus was the successor in interest to Bank of
America’s interest in the Calle Bonita Property. See Meza, 908 F.2d at 1266 (“[P]rivity
exists . . . where the non-party is the successor in interest to a party’s interest in property.”);
Ernest, 2014 WL 294544, at *4; McMahan v. First Union Nat’l Bank, No. C.A.SA-01-0782 FB
NN, 2003 WL 1606084, at *1-2 (W.D. Tex. Mar. 7, 2003), report and recommendation adopted
sub nom. McMahan v. First Union Nat’l Bank, No. CIV.A. SA-01-CA782FB, 2003 WL
21339370 (W.D. Tex. June 10, 2003) (finding, in a case involving the validity of a mortgage
loan, that the original lender and the bank “to whom the mortgage loan was later assigned” were
“clearly in privity”). Accordingly, because privity exists between Bank of America and Seterus,
the first element of res judicata is satisfied. See McMahan, 2003 WL 1606084, at *1-2.
Court of competent jurisdiction
Next, Seterus asserts that the judgment in the prior action—the dismissal with prejudice
in Wicker II—was rendered by a court of competent jurisdiction because the district court “had
subject matter jurisdiction based on diversity jurisdiction as the only non-diverse parties [in
Wicker II] were improperly joined.” See Mot. 7. As with the element of privity, Plaintiff does
not address whether the judgment was rendered in a court of competent jurisdiction. See
The district court had diversity jurisdiction in Wicker II because the plaintiffs were both
Texas citizens, the remaining defendant—Bank of America—was a non-Texas citizen, and the
amount in controversy was over $75,000.00. See Wicker II, 2015 WL 632096, at *3; see also 28
U.S.C. § 1332(a)-(b). Because the district court in Wicker II had diversity jurisdiction, the prior
judgment—the dismissal of Plaintiff’s claims with prejudice—was rendered in a court of
competent jurisdiction. See Torello, 2013 WL 3289526, at *6 (holding that the prior judgment
was rendered in a court of competent jurisdiction where the court rendering the prior judgment
had jurisdiction because “defendants properly removed [the prior] action to [federal court] based
on diversity jurisdiction”); Anderson v. Bank of Am., Civil Action No. 2:09CV183DCB-JMR,
2009 WL 3647516, at *4 (S.D. Miss. Nov. 3, 2009) (finding “the prior district court was a court
of competent jurisdiction for res judicata purposes,” because prior defendant was “non-resident
of Mississippi,” prior plaintiff “was a resident of Mississippi,” and “[t]he amount in controversy
exceeded the minimum jurisdiction amount for the district court”). Accordingly, the second
element of res judicata is satisfied.
Final judgment on the merits
In Wicker II, the district court dismissed Plaintiff’s breach of contract claim with
prejudice for failure to state a claim under Rule 12(b)(6). See Wicker II, 2015 WL 632096, at
*3-4. Seterus argues that this prior judgment meets the third element of res judicata—a final
judgment on the merits—because “[t]he final judgment in [Wicker II] was entered ‘with
prejudice,’ thereby completely disposing of all of Plaintiff’s claims.” See Mot. 8. As with the
prior elements, Plaintiff does not address whether a prior court entered a final judgment on the
merits. See generally Resp.
“It is well established that Rule 12(b)(6) dismissals are made on the merits.” Stevens v.
Bank of Am., N.A., 587 F. App’x 130, 133 (5th Cir. 2014); see Federated Dep’t Stores, Inc. v.
Moitie, 452 U.S. 394, 399 n.3 (1981). In addition, “[g]enerally, a federal court’s dismissal with
prejudice is a final judgment on the merits for res judicata purposes.” Stevens, 587 F. App’x at
133; see Oreck Direct, LLC v. Dyson, Inc., 560 F.3d 398, 401 (5th Cir. 2009). Because the
Wicker II court’s 12(b)(6) dismissal with prejudice was a final judgment on the merits, the third
element of res judicata is satisfied. See Stevens, 587 F. App’x at 133.
Same claim or cause of action
Finally, Seterus argues that the fourth and final element of res judicata—whether the
same claim or cause of action was involved in both actions—is met because Plaintiff’s breach of
contract claim “is based on the same alleged accounting issues asserted in the prior suit,” and
because Plaintiff’s declaratory judgment claim regarding escrow is “based on conduct allegedly
taking place over several years, rather than during the time period between the Prior Suit and the
filing of this Action.” See Mot. 9-10.
In his Response, Plaintiff argues that his claim for breach of contract is not barred by res
judicata because this claim only involves attorney’s fees which “were never at issue” in the prior
action because the attorney’s fees “were neither raised by the Plaintiff nor sought by [Bank of
America].” See Resp. 6. Plaintiff also argues that his claim for declaratory judgment regarding
the imposition of escrow is not barred by res judicata because, although Wicker II “did involve
the issue of the imposition of force placed escrow,” Wicker II “did not, however, involve the
issue of future forced placed escrow.” Id.
To determine whether both suits involve the same claim or cause of action, courts in the
Fifth Circuit use the “transactional test.” See In re Paige, 610 F.3d at 872; Test Masters, 428
F.3d at 571. “Under the transactional test, a prior judgment’s preclusive effect extends to all
rights of the plaintiff with respect to all or any part of the transaction, or series of connected
transactions, out of which the original action arose.” Test Masters, 428 F.3d at 571; In re Paige,
610 F.3d at 872. “The critical issue under this determination is whether the two actions under
consideration are based on ‘the same nucleus of operative facts,’ rather than the type of relief
requested, substantive theories advanced, or types of rights asserted.” In re Paige, 610 F.3d at
872 (internal citations and quotation marks omitted) (quoting In re Intelogic Trace, Inc., 200
F.3d 382, 386 (5th Cir. 2000); United States v. Davenport, 484 F.3d 321, 326 (5th Cir. 2007)).
Indeed, “[a] judgment on the merits operates as a bar to the later suit, even though a different
legal theory of recovery is advanced in the second suit.” Hall v. United States, Civil Action No.
6:06-CV-528, 2008 WL 276397, at *5 (E.D. Tex. Jan. 30, 2008).
The Court finds that the fourth and final element of res judicata is met because this suit is
based on the same nucleus of operative facts as Wicker II. In both Wicker II and the instant case,
Plaintiff brings claims based solely on the breach of the loan agreement. See Pl.’s Original Pet.
and App. For Temp. Restraining Order (“Wicker II Complaint”) at 3, Notice of Removal, Wicker
II, EP-15-CV-00015-FM (W.D. Tex. Jan. 21, 2015), ECF No. 1-1; Compl. 4.
In Wicker II, the district court dismissed Plaintiff’s claims stemming from the loan
agreement, finding that Plaintiff had failed to state a claim for breach of contract because “a
party to a contract who is himself in default cannot maintain a suit for its breach.” Wicker II,
2015 WL 632096, at *3 (quoting Dobbins v. Redden, 785 S.W.2d 377, 378 (Tex. 1990) (per
curiam)). Therefore, the operative facts in Wicker II all involved the loan agreement—
specifically, whether Plaintiff was in default on the loan agreement, thus preventing him from
bringing a breach of contract claim regarding this agreement. See id.
Likewise, in the instant case, the operative facts involve the very same breach of the same
loan agreement that was at issue in Wicker II, as well as Plaintiff’s default on that loan
agreement. See Compl. 4; Wicker II, 2015 WL 632096, at *3. Thus, the two cases involve a
common nucleus of operative facts; indeed, the two suits involve identical operative facts.
Accordingly, the instant suit involves the same claim or cause of action as Wicker II. See In re
Paige, 610 F.3d at 872; Davis v. Chase Home Fin., LLC, No. 3:12-CV-456-HTW-LRA, 2014
WL 936474, at *5 (S.D. Miss. Mar. 10, 2014), aff’d sub nom. Davis v. Chase Home Fin., L.L.C.,
597 F. App’x 249 (5th Cir. 2015) (finding that the fourth element of res judicata was satisfied
where, “[i]n both actions, Plaintiffs sought relief from foreclosure proceedings involving the real
property,” and “[b]oth cases [we]re founded upon Plaintiffs’ allegations that the Defendants
breached both the loan modification agreements”); Anderson, 2009 WL 3647516, at *5 (finding
that the fourth element of res judicata was satisfied where “[b]oth the underlying action and [the
prior action we]re based on the same mortgage loan”); see also McMahan, 2003 WL 1606084, at
*2 (finding that, “[c]learly, res judicata prevents” relitigation of the claims, where “both lawsuits
involve the [same] home equity loan agreement”).
Specifically, Plaintiff’s claim for breach of contract is based on the same loan agreement
and the same alleged miscalculation as the breach of contract claim in Wicker II. See Compl. 2,
4; Wicker II Compl. 2-3. Further, although Plaintiff attempts to reframe his escrow claim as a
declaratory judgment claim, Plaintiff’s new declaratory judgment claim regarding “future force
placed escrow” claim is based on the same loan agreement, and same breach, as his breach of
contract claim regarding “force placed escrow” in Wicker II. See Compl. 2, 4; Wicker II Compl.
2-3. Finally, Plaintiff’s request for injunctive relief enjoining foreclosure in this case is also
based on the same loan agreement and breach as his request for injunctive relief enjoining
foreclosure in Wicker II. See Compl. 2, 4; Wicker II Compl. 2-3.
In an attempt to distinguish the cases, Plaintiff argues that attorney’s fees “were never at
issue” in Wicker II because attorney’s fees “were neither raised by the Plaintiff nor sought by
[Bank of America],” in that proceeding. See Resp. 6.7 However, under the transactional test, the
Court looks to whether both cases involved the same nucleus of operative facts, not whether
Plaintiff has alleged the same legal theories or types of relief as in the prior litigation. See In re
Paige, 610 F.3d at 872; Warren v. Mortg. Elec. Registration Sys., Inc., 616 F. App’x 735, 738
In the Response, Plaintiff asserts that “[t]here was no claim for attorney’s fees made by Bank of America before or
after the lawsuit was dismissed.” See Resp. 6. To the extent that this allegation is inconsistent with the facts
pleaded by Plaintiff in the Complaint, the Court does not consider this allegation. See Hayes v. Whitman, 264 F.3d
1017, 1025 (10th Cir. 2001) (“While it might be appropriate for a court to consider additional facts or legal theories
asserted in a response brief to a motion to dismiss if they were consistent with the facts and theories advanced in the
complaint, a court may not consider allegations or theories that are inconsistent with those pleaded in the
complaint.” (citations omitted)); Lee v. Quarterman, No. CIV. A. C-07-476, 2008 WL 1696879, at *4 (S.D. Tex.
Apr. 9, 2008).
(5th Cir. 2015) (rejecting plaintiff’s argument “that the fourth element [of res judicata] is not
satisfied because [plaintiff] has raised legal claims that were not raised in the two prior suits,”
because “[r]aising new claims . . . does not allow [plaintiff] to avoid the preclusive effects of the
prior judgments,” where the current and prior cases are based on the same nucleus of operative
facts); Lee v. Thornburg Mortg. Home Loans Inc., No. 14-CV-00602 NC, 2014 WL 4953966, at
*5 (N.D. Cal. Sept. 29, 2014) (finding plaintiff’s claims were barred by res judicata “despite the
fact that the present case utilizes some additional legal theories,” where two prior cases and the
current case all sought to prevent foreclosure on the same property). Under the transactional test,
the issue of attorney’s fees is part of the same claim or cause of action as at issue in Wicker II
because, as explained above, both Wicker II and the instant suit involve the same loan agreement
and breach, and, thus, the same nucleus of operative facts.
Further, other federal courts of appeal have specifically found that attorney’s fees are part
of the same claim or cause of action as the underlying substantive claim. See, e.g., Rooney v.
United States, 694 F.2d 582, 584, 584 n.4 (9th Cir. 1982) (explaining that “a claim for attorney’s
fees incurred in the prosecution of a substantive claim is part of the same cause of action as that
underlying the substantive claim”); Aetna Cas. & Sur. Co. v. Giesow, 412 F.2d 468, 470 (2d Cir.
1969) (explaining that, in a breach of contract case, a claim for attorney’s fees and the breach of
contract claim “are so inexorably interconnected as to make th[em] a single claim,” because
“plaintiff would not be entitled to [attorney’s] fees if there was no breach”). In addition, some
courts have found that attorney’s fees should be barred by res judicata in future cases, regardless
of whether they were actually raised in the prior case. See, e.g., Dryvit Sys., Inc. v. Great Lakes
Exteriors, Inc., 96 F. App’x 310, 310-11 (6th Cir. 2004) (finding a claim for attorney’s fees,
“pursuant to a ‘prevailing party’ clause” in the parties’ contract, to be barred by res judicata
when this claim was not brought in the prior suit for breach of contract); Rooney v, 694 F.2d at
584, 584 n.4 (explaining that a claim for attorney’s fees from the prosecution of a substantive
claim would be barred by res judicata even if a request for attorney’s fees had not been made in
the prior action regarding the substantive claim).
Accordingly, because the issue of attorney’s fees is part of the same claim or cause of
action as the breach of contract claim in Wicker II, the fourth element of res judicata is met,
despite the fact that neither Plaintiff nor Bank of America chose to raise the issue of attorney’s
fees in Wicker II. See Warren, 616 F. App’x at 738.
The claims were or should have been raised in the prior action
Now that the Court has found that all four elements of res judicata are met, the Court
must next determine if “the previously unlitigated claims could or should have been asserted in
the prior proceeding.” See In re Paige, 610 F.3d at 870 (quoting D–1 Enters., Inc., 864 F.2d at
38); Test Masters, 428 F.3d at 571 (explaining that “res judicata bars the litigation of claims
that either have been litigated or should have been raised in an earlier suit”). This “inquiry
centers on whether and to what extent Plaintiff had actual or imputed awareness of the nowpresented claims . . . and whether Plaintiff could have asserted them in the previous action.”
Ernest, 2014 WL 294544, at *3.
As explained above, Plaintiff has already litigated and lost his breach of contract claim
regarding the alleged miscalculation of the amount due on his loan agreement as well as his
claim regarding escrow. See Wicker II, 2015 WL 632096, at *4. Further, Plaintiff already
litigated and was denied his request for a permanent injunction based on these claims. See id.
(explaining that “the dismissal of Plaintiffs’ breach of contract claim fully resolves this case” and
ordering the Clerk to close the case); see also Wicker II Compl. 5 (explaining that Plaintiff and
Rocio seek a “permanent injunction enjoining non-judicial foreclosure”). Thus, these claims are
patently foreclosed. The only remaining claim that is possibly “unlitigated” is Plaintiff’s claim
regarding attorney’s fees.
However, in arguing that the claim regarding attorney’s fees should not be barred by res
judicata, Plaintiff merely argues that attorney’s fees “were never at issue” in Wicker II. See
Resp. 6. Plaintiff does not argue that he was unaware of this claim at the time of Wicker II, or
that he could not have presented this claim in the Wicker II litigation. See generally id. Indeed,
on the face of the Complaint, Plaintiff indicates that he was aware of the issue of attorney’s fees
as early as August of 2014, four months prior to the commencement of Wicker II on December
30, 2014. See Compl. 3 (explaining that in August of 2014, there was a “dispute” between the
Bank of America and Plaintiff, “concern[ing] the amount of the attorney’s fees”); Wicker II,
2015 WL 632096, at *1. Because Plaintiff was aware of a dispute regarding attorney’s fees
during the Wicker II litigation, Plaintiff could have brought this claim to the Wicker II court.
And, because the instant dispute arises from the same breach of the same loan agreement as the
one at issue in the Wicker II litigation, res judicata bars the claim in the instant case. See
Warren, 616 F. App’x at 738 (explaining that “new claims” brought by the plaintiff “arise from
the same nucleus of operative facts and thus could have, and should have, been asserted in the
prior suits”); Ernest, 2014 WL 294544, at *6 (“The Court finds that Plaintiff should have
asserted all of the Third Petition’s claims in the Original Petition because all of the claims are
predicated on the same nucleus of operative facts.”); see also Dryvit Sys., 96 F. App’x at 310-11
(holding that a claim for attorney’s fees was barred by res judicata even when it was not brought
in the prior breach of contract suit); Rooney v, 694 F.2d at 584, 584 n.4 (holding that a claim for
attorney’s fees would be barred by res judicata even if the request was not raised in the prior
Because all four elements of res judicata are met and because Plaintiff either did or could
have brought all of his claims in the Wicker II litigation, Plaintiff’s claims for breach of contract
and declaratory judgment, as well as his request for injunctive relief, are barred by res judicata.
See Anderson, 2009 WL 3647516, at *5 (“This claim was previously available to [plaintiff];
thus, res judicata applies.”); see also McMahan, 2003 WL 1606084, at *2 (“The fact that
plaintiffs have raised an additional challenge to the loan—that defendants charged excessive
closing costs—does not destroy res judicata, where plaintiffs could have raised this challenge in
the earlier suit.”).
Leave to Amend
Although Plaintiff has not requested leave to amend his Complaint, the Court considers
whether to grant such leave, because generally, when a court dismisses one or more of a
plaintiff’s claims pursuant to Rule 12(b)(6), the court should give the plaintiff an opportunity to
amend the complaint. See Hart v. Bayer Corp., 199 F.3d 239, 247 n.6 (5th Cir. 2000). However,
“a district court may refuse leave to amend if the filing of the amended complaint would be
futile, i.e., ‘if the complaint as amended would be subject to dismissal.’” Varela v. Gonzales,
773 F.3d 704, 707 (5th Cir. 2014) (quoting Ackerson v. Bean Dredging LLC, 589 F.3d 196, 208
(5th Cir. 2009)). Specifically, “[c]laims barred by res judicata are futile.” See Green v. Buckley
Madole, P.C., No. 3:14-CV-3742-N-BN, 2015 WL 1505703, at *4 (N.D. Tex. Mar. 30, 2015);
see also Donnelly v. JPMorgan Chase Bank, N.A., No. CIV.A. H-15-1671, 2015 WL 6701922, at
*1 (S.D. Tex. Nov. 3, 2015) (finding that amendment would be futile where “new claims are
based on the same nucleus of operative facts as the earlier case . . . and would thus be barred by
res judicata”). Because Plaintiff’s claims are barred by res judicata, leave to amend would be
futile. See Green, 2015 WL 1505703, at *4-5. Accordingly, the Court declines to grant Plaintiff
leave to amend the Complaint.
For the reasons set forth above, the Seterus’s Motion to Dismiss, ECF No. 5, is
GRANTED. Accordingly, Plaintiff’s claims are DISMISSED.
SIGNED this 5th day of May, 2016.
UNITED STATES DISTRICT JUDGE
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