Davis v. Seterus, Inc.
ORDER GRANTING 4 Motion to Dismiss without prejudice. Signed by Judge David A. Ezra. (rg)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION
ORDER GRANTING MOTION TO DISMISS
Before the Court is a Motion to Dismiss for Failure to State a Claim
filed by Seterus, Inc (“Seterus” or “Defendant”). (Dkt. # 4.) Pursuant to Local
Rule CV-7(h), the Court finds this matter suitable for disposition without a
hearing. After careful consideration and upon reviewing the memorandum filed,1
the Court, for the reasons that follow, GRANTS Defendant’s Motion to Dismiss.
Plaintiff Dixie Davis (“Plaintiff”) alleges she owns property located at
350 Brettonwood Drive, San Antonio, Texas 78217 (“the Property”). (“Pet.,” Dkt.
# 1-1, Ex. B-2 ¶ 1) Plaintiff further alleges that the Property was scheduled for
foreclosure sale on September 6, 2016. (Id.) To acquire the Property, Plaintiff
Dixie Davis, who is represented by counsel, did not file a Response to the Motion
alleges that she executed a Deed of Trust and a debt instrument in the amount of
$34,000, on January 21, 2000, in favor of the original lender. (Id. ¶¶ 2, 13.)
However, Plaintiff alleges that the Deed of Trust was not fully executed because
the original lender never signed it. (Id. ¶ 3.) Plaintiff further alleges that the debt
instrument was not a loan, but instead a check she signed to finance the
transaction. (Id. ¶ 4.)
Plaintiff contends that Seterus, the mortgagee, demanded payment on
the debt instrument. (Id.
) As a result, Plaintiff alleges that she has
administratively sought the production of documents from Seterus. (Id. ¶ 5.)
Specifically, she claims she sought documentation pertaining to the chain of
custody of her debt instrument, which party had authority under the debt
instrument to foreclose, and a sworn accounting. (Pet. ¶ 5.)
On September 2, 2016, Plaintiff filed suit against Seterus in the 57th
Judicial District Court of Bexar County, Texas. (Id.) In her Petition, she asserts a
claim for a violation of the Texas Debt Collection Practices Act (“TDCPA”) “by
proceeding with collection activities before substantially validating the debt it
seeks to collect, proving its claim to the debt it seeks to collect, and establishing
the amount of its claim to alleged debt through production of a sworn accounting.”
(Id. ¶ 25.) Seterus also seeks a declaratory order “regarding the rights, duties,
interests, claims, and amounts of claims pertaining to the alleged debt.” (Id. ¶ 27.)
On September 19, 2016, Seterus timely filed a Notice of Removal,
invoking the Court’s diversity jurisdiction pursuant to 28 U.S.C. § 1332. (Dkt.
# 1.) On October 3, 2016, Seterus filed the instant Motion to Dismiss. (Dkt. # 4.)
Pursuant to Local Rule, Plaintiff had fourteen days to respond, but she did not.
Federal Rule of Civil Procedure 8(a) requires that a pleading include a
“short and plain statement of the claim showing that the pleader is entitled to
relief.” Fed. R. Civ. P. 8(a). If a plaintiff fails to satisfy Rule 8(a), the opposing
party may file a motion to dismiss the claims pursuant to Federal Rule of Civil
Procedure 12(b)(6) for “failure to state a claim upon which relief can be granted.”
Fed. R. Civ. P. 12(b)(6). In analyzing a motion to dismiss for failure to state a
claim, the court “accept[s] ‘all well pleaded facts as true, viewing them in the light
most favorable to the plaintiff.’” United States ex rel. Vavra v. Kellogg Brown &
Root, Inc., 727 F.3d 343, 346 (5th Cir. 2013) (quoting In re Katrina Canal
Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007)).
To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead
“enough facts to state a claim to relief that is plausible on its face.” 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.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Although “detailed factual
allegations” are not necessary, a plaintiff must provide “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. The statements in the complaint must be
sufficiently detailed to “give the defendant fair notice of what the . . . claim is and
the grounds upon which it rests.” Id.
Plaintiff asserts a claim for a violation of the TDCPA. However,
Plaintiff fails to identify the statutory provision under which she brings her claim.
Failure to cite a specific statute fails to put Defendant on notice about the legal
nature of her claim. This is true because if a plaintiff brings a claim based on a
specific statute, it logically follows that a plaintiff must plead the statute on which
the claim is based. Otherwise, the Court cannot make an independent
determination whether the alleged facts state a claim under the relevant statutory
provision. Accordingly, Plaintiff fails to satisfy Rule 8 of the Federal Rules of
To the extent that Plaintiff’s claim is based on the “show-me-the-note
theory,” her claim fails as a matter of law. Texas courts have “roundly rejected the
‘show-me-the-note’ theory and dismissed claims relying upon it because
foreclosure statutes simply do not require possession or production of the original
note.” Bierwirth v. BAC Home Loans Servicing, L.P., No. 03-11-00644-CV, 2012
WL 3793190, at *3 (Tex. App. 2012); see also Martins v. BAC Home Loans
Servicing, L.P., 722 F.3d 249, 255 (5th Cir. 2013) (observing that the “weight of
Texas authority” suggests “a mortgage servicer need not hold or own the note and
yet would be authorized to administer a foreclosure”); Tex. Prop. Code
§ 51.002(a)-(h) (setting forth a list of foreclosure requirements that does not
include note possession).
To the extent Plaintiff alleges that Seterus lacks authority to foreclose,
her claim fails. Plaintiff has alleged that Seterus is the mortgagee. (Pet. ¶ 18.) The
Texas Property Code grants either a “mortgagee” or a “mortgage servicer”
standing to foreclose. Tex. Prop. Code § 51.0025; Preston v. Seterus, Inc.,
931 F. Supp. 2d 743, 757 (N.D. Tex. 2013); Morlock, LLC v. Bank of New York,
448 S.W.3d 514, 518 (Tex. App. 2014) (“[A] deed of trust may be enforced by the
mortgagee, regardless of whether the mortgagee also holds the note.”).
Accordingly, Plaintiff’s claim that Seterus lacks the authority as mortgagee to
foreclose fails as a matter of law.
Next, Plaintiff appears to assert a claim for an accounting. Some
courts have held that an accounting is strictly an equitable remedy and thus not a
separate cause of action, while others “have treated an action for an accounting as a
suit in equity as well as a remedy.” Donnelly v. JP Morgan Chase, No. H-13-1379,
2014 WL 429246, at *3 (S.D. Tex. Feb. 4, 2014). Regardless of “[w]hether an
accounting is only an equitable remedy or also an independent cause of action, it is
appropriate only when the facts and accounts presented are so complex that
adequate relief may not be obtained at law.” Id. Plaintiff has alleged no facts that
make her accounts complex, and thus an accounting is not necessary. As a result,
Plaintiff’s accounting claim is denied.
Finally, assuming that Plaintiff seeks declaratory relief under the
Federal Declaratory Judgment Act, the Court cannot grant relief. 28 U.S.C. §§
2201–2202. The Federal Declaratory Judgment Act is “an enabling act, which
confers discretion on the courts rather than an absolute right on the litigant.”
Sherwin-Williams Co. v. Holmes Cnty., 343 F.3d 383, 389 (5th Cir. 2003)
(quoting Wilton v. Seven Falls Co., 515 U.S. 277, 287 (1995)). As an enabling act,
“the operation of the Declaratory Judgment Act is procedural only.” Lowe v.
Ingalls Shipbuilding, A Div. of Litton Sys., Inc., 723 F.2d 1173, 1179 (5th Cir.
1984) (quoting Skelly Oil Co. v. Phillips Petrol. Co., 339 U.S. 667, 671 (1960)).
The Supreme Court has explained, “the Declaratory Judgment Act is not an
independent source of federal jurisdiction; the availability of such relief
presupposes the existence of a judicially remediable right.” Schilling v. Rogers,
363 U.S. 666, 677 (1960). Accordingly, to invoke relief under the Federal
Declaratory Judgment Act a plaintiff must have an underlying and viable cause of
action. See Reid v. Aransas Cnty., 805 F. Supp. 2d 322, 339 (S.D. Tex. 2011)
(holding that a plaintiff cannot use the Federal Declaratory Judgment Act upon
failure to state the existence of a judicially remediable right). Here, since Plaintiff
has failed to state a claim, her request for declaratory judgment must fail. See e.g.,
Kingman Holdings, LLC v. Everbank, No. 5:13-cv-1127-DAE, 2014 WL 1491257,
at *5 (W.D. Tex. Apr. 14, 2014).
For the reasons explained, the Court GRANTS the Motion to
Dismiss. (Dkt. # 4.) The Court ORDERS this case DISMISSED WITHOUT
IT IS SO ORDERED.
DATE: San Antonio, Texas, October 25, 2016.
DAVID ALAN EZRA
UNITED STATES DISTRICT JUDGE
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