Young v. Deutsche Bank National Trust Company, as Trustee for Soundview Home Loan Trust 2006-OPT2, Asset-Backed Certificates, Series 2006-OPT2, No. 4:2014cv01449 - Document 8 (S.D. Tex. 2014)
Court Description: MEMORANDUM AND ORDER Granting 6 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM (Signed by Judge Ewing Werlein, Jr) Parties notified.(gkelner, 4)
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Young v. Deutsche Bank National Trust Company, as Trustee for So...ed Certificates, Series 2006-OPT2 Doc. 8 IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION MARSHA A. YOUNG, Plaintiff, v. DEUTSCHE BANK NATIONAL TRUST COMPANY, Defendant. § § § § § § § § § § CIVIL ACTION NO. H-14-1449 MEMORANDUM & ORDER Pending is Defendant's Fed. Dismiss Plaintiff's First R. Amended Civ. P. 12(b) (6) Complaint After carefully considering the motion, Motion to (Document response, No.6). and applicable law, the Court concludes as follows. I. Plaintiff Marsha A. Background Young ("Plaintiff") and her husband purchased a home at 378 Kingscourt Drive, Houston, Texas 77015 (the "Property") on or about February 27, 2006. 1 Plaintiff executed a Note and Deed of Trust on the Property, which were subsequently transferred to Defendant Deutsche Bank National Trust Company ("Defendant"), with Ocwen Loan Servicing, LLC ("Ocwen") acting as the loan servicer.2 1 Document No. 1-4 at 18 of 26 (1st Am. Pet.). Dockets.Justia.com Plaintiff alleges difficulties and, that she began to experience financial in an effort to remedy the situation, entered into debt restructuring negotiations with Defendant to modify the terms and conditions of the Note. 3 Plaintiff alleges that she was offered a loan modification and that during the next several months she obtained and submitted financial Ocwen's requests. 4 sentatives documents in response to Plaintiff further alleges that Ocwen's repre- informed her "that she was not allowed to make any mortgage payments while in loan modification status, II and "that [Defendant] would not take any action to foreclose on the Property while in loan modification status. 115 Plaintiff alleges that "Ocwen's representatives promised to confirm these agreements in writing; however, confirmation. 116 confirmation 3 of the Plaintiff never received written Plaintiff alleges that while she was waiting for the loan modification, believing that the Document No. 1-4 at 18 of 26. 5 Id. at 18 of 26 to 19 of 26. Although her First Amended Petition is ambiguous on the point, Plaintiff does not dispute that she ultimately defaulted after Defendant allegedly told her to stop making payments. See Document No.7 at 1 (Plaintiff's Response) ("Plaintiff claims that [Defendant], while not in writing, induced her to default on her mortgage. ") . 6 Document No. 1-4 at 19 of 26. 2 discrepancy had been resolved, she was served with an Original Petition for Forcible Detainer filed by Defendant. 7 Plaintiff filed suit in state court against Defendant, alleging that Defendant wrongly conducted a foreclosure sale of the Property on January 7, 2014, in which Defendant sold the Property to itself. 8 contract, Plaintiff alleges causes of action for breach of and promissory estoppel. 9 common law fraud, Defendant timely removed the case and now moves to dismiss Plaintiff's First Amended Petition. 10 II. Legal Standard Rule 12 (b) (6) provides for dismissal of an action for "failure to state a claim upon which relief can be granted." P. 12 (b) (6) . FED. R. Crv. When a district court reviews the sufficiency of a complaint before it receives any evidence either by affidavit or admission, its task is inevitably a limited one. See Scheuer v. Rhodes, 94 S. Ct. 1683, 1686 (1974), abrogated on other grounds by Harlow v. Fitzgerald, 102 S. Ct. 2727 (1982). whether the plaintiff ultimately will prevail, The issue is not but whether the plaintiff is entitled to offer evidence to support the claims. 7 Id. s Id. 9 Id. at 19 of 26 to 20 of 26. 10 Document No.6. 3 Id. In considering a motion to dismiss under Rule 12(b) (6), the district court must construe the allegations in the complaint favorably to the pleader and must accept as true all well-pleaded facts 117 in the F.3d complaint. 242, 247 Lowrey v. See (5th Cir. Tex. To 1997). A&M Uni v . survive Sys . , dismissal, a complaint must plead "enough facts to state a claim to relief that is plausible on its face." 1955, 1974 (2007). Bell Atl. Corp. v. Twombly, 127 S. Ct. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference misconduct alleged." (2009) . While a allegations . . that the defendant Ashcroft v. complaint "does not liable 129 S. Iqbal, is Ct. need for 1937, detailed the 1949 factual [the] allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true fact) .11 Twombly, 127 S. Ct. at 1964-65 (even if doubtful in (citations and internal footnote omitted) . III. A. Analysis Breach of Contract Plaintiff alleges that Defendant's actions constitute a breach of contract because: "A. There exists a valid, enforceable contract between [Plaintiff] and [Defendant] ; B. [Plaintiff] has standing to sue for breach of contract; C. [Plaintiff] 4 performed, tendered performance, or was excused from performing his [sic] contractual obligations; D. [Defendant] breached the breach of contract by [Defendant] contract; and E. caused [Plaintiff's] The injury.Hll This is merely "a formulaic recitation H of elements of a breach of contract claim. U See Twombly, 127 S. Ct. at 1965. Although Plaintiff additionally alleges that Defendant's foreclosure sale of the Property was "in violation of the agreement between the parties and without proper and timely notice to the Plaintiff as required by the Note and Deed of Trust as well as the Texas Property Code,H she does not provide copies of either the Note or the Deed of Trust and does not identify any particular requirement therein which she alleges Defendant breached. 13 Furthermore, Plaintiff cannot establish the necessary element of performance because Plaintiff breached obligations by defaulting on her payments. her contractual Plaintiff contends that "[Defendant] cannot assert that [Plaintiff] is in default under the original loan because it was 11 [Defendant's] representations that Document No. 1-4 at 19 of 26. 12 Under Texas law, "[t] he essential elements of a breach of contract action are: (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the breach. Smith Int'l, Inc. v. Egle Grp., LLC, 490 F.3d 380, 387 (5th Cir. 2007) (quoting Valero Mktg. & Supply Co. v. Kalama Int'l, L.L.C., 51 S.W.3d 345, 351 (Tex. App.-Houston [1st Dist.] 2001)). H 13 Document No. 1-4 at 19 of 26. 5 induced the default. Frauds normally Plaintiff acknowledges that the Statute of 1114 precludes enforcement of the kind of oral representations on which she allegedly relied, but argues that her performance may still be excused based on those representations. 15 In considering motions factual allegations, to dismiss this Court based on strikingly similar has recently and See Martinez v. rej ected this precise argument. repeatedly CitiMortgage, Inc., CIV.A. H-13-0727, 2013 WL 2322999, at *2 (S.D. Tex. May 28, 2013) (Atlas, J.) (dismissing breach of contract claim because "allowing a borrower to avoid foreclosure by arguing that he was induced to default based on an oral promise not to foreclose during loan modification negotiations 'would allow Plaintiff to circumvent the statute of frauds by essentially enforcing an unenforceable modification agreement.'II) (citing Montalvo v. Bank of Am. Corp., SA-10-CV-360-XR, 2013 WL 870088, at *8 (W.D. Tex. Mar. 7, 2013) Serna v. U.S. Bank, N.A., CIV.A. H-13-2559 (S.D. Tex. Jan. 9, 2014) (Werlein, J.) 1 (same) 2014 WL 108732 1 i at *2 Plaintiff1s breach of contract claim is therefore dismissed. 14 Document No.6 at 2. Plaintiff's First Amended Petition actually alleges that it was representatives of Ocwen, not Defendant, whose communications induced her default, but Ocwen, as the mortgage servicer was allegedly acting as Defendant's agent, so the distinction is immaterial. See Document No. 1-4 at 18 of 26. l 15 Document No. 6 at 2. 6 B. Common Law Fraud Plaintiff alleges that: The actions committed by Ocwen constitute common law fraud because Ocwen made false and material misrepresentations to [Plaintiff] when informing [Plaintiff] that she was not allowed to make any mortgage payments while in loan modification status and that [Defendant] would not take any action to foreclose on his [sic] Property while in loan modification status and Ocwen was acting as [Defendant's] agent. Ocwen knew that the representations were false or made these representations recklessly, as a positive assertion, and without knowledge of its truth. In addition, Ocwen made these representations with the intent that [Plaintiff] act on them and [Plaintiff] relied on these representations which caused [Plaintiff's] injury.16 "To state a claim of fraud by misrepresentation under Texas law, a plaintiff must sufficiently allege (2) a misrepresentation that the speaker knew to be false or made recklessly (3) with the intention (4) (1) to induce the plaintiff's actual and justifiable reliance Grande Royalty Co., Inc. v. F.3d 465, 468 (5th Cir. 2010) reliance, (5) followed causing injury." Energy Transfer Partners, L.P., by Rio 620 (citing Ernst & Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 577 (Tex. 2001». Fraud claims are subject to the heightened pleading requirements of Rule 9(b), which requires that "a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind 16 Document No. 1-4 at 20 of 26. 7 may be alleged generally.H 9 (b) FED. R. P. "Although Rule 9 (b) . expressly allows scienter to be averred generally, allegations that defendants possess satisfy Rule 9(b) fraudulent simple intent will not The plaintiffs must set forth specific facts supporting an inference of fraud. H Inc., CIV. Dorsey v. Portfolio Equities, (citations and internal 540 F.3d 333, 339 (5th Cir. 2008) quotation marks omitted) (emphasis in original). Plaintiff alleges no specific facts supporting an inference of fraudulent intent, but instead merely alleges that Defendant knowingly or recklessly made alleged false insufficient to statements. state a These claim for conclusory fraud. allegations See Serna, are 2014 WL 108732, at *4 (dismissing fraud claim based on identical conclusory allegation of fraudulent intent). Furthermore, Plaintiff's fraud claim is barred by the economic loss rule. (Tex. 1991) See Sw. Bell Tel. Co. v. DeLanney, 809 S.W.2d 493, 495 ("When the injury is only the economic loss to the subject of a contract itself the action sounds in contract alone. H) (citation omitted) Mem'l i Eurocopter Deutschland, Hermann GMBH, 524 F.3d 676, ("Under Texas's economic loss rule, when plaintiffs have Healthcare suffered only 678 Inc. Sys. (5th Cir. v. 2008) . no duty in tort exists economic losses. H) (citing Hou-Tex, Inc. v. Landmark Graphics, 26 S.W.3d 103, 107 (Tex. App.Houston [1st Dist.] 2000)) G-12-292, 2013 WL i 140093, Gonzales v. Bank of Am., N.A., CIV.A. at *2 8 (S.D. Tex. Jan. 10, 2013) (Froeschner, economic (dismissing M.J.) loss rule where homeowners' \\ [p] laintiffs fraud have not claim under alleged any independent injury outside the economic losses caused by BOA's alleged breach of the Plaintiff's contract"). fraud claim is therefore dismissed. C. Promissory Estoppel Plaintiff alleges that \\ [t] he actions committed by [Defendant] constitute promissory estoppel promise to [Plaintiff] because: A. made a B. [Plaintiff] reasonably and substantially relied on the promise to her detriment; C. was foreseeable by [Defendant] [Defendant]; and D. [Plaintiff's] reliance Injustice can be avoided only by enforcing [Defendant's] promise.,,17 Under the statute of frauds, an agreement regarding the transfer of real property or modification of a loan must be in writing to be valid. 722 F.3d 249, 256 (5th Cir. 2013) 26.02(b) and (b) (4)). does not Martins v. BAC Home Loans Servicing, L.P., (citing TEX. Bus. & COM. CODE §§ Plaintiff argues that the statute of frauds bar her promissory estoppel claim because her First Amended Petition alleges that after telling Plaintiff not to make further payments and that Defendant would not foreclose on the 17 Document No. 1-4 at 20 of 26. 9 Property, "Ocwen's representatives promised to confirm these agreements in writing."18 "Promissory estoppel may overcome the statute-of-frauds requirement in Texas, but 'there must have been a promise to sign a written contract which had been prepared and which would satisfy the requirements of the (citations omitted). statute of Id. frauds.'" at 256-57 This requires an "agreement that had already been prepared or whose wording had been agreed upon that would satisfy the statute of frauds." Williams v. N.A., 560 F. App'x 233, 239 (5th Cir. 2014) Wells Fargo Bank, (citing 1001 McKinney Ltd. v. Credit Suisse First Boston Mortg. Capital, 192 S.W.3d 20, 29 (Tex. App. -Houston [14th Dist.] 2005)) (internal quotation marks omitted); see also George-Baunchand v. Wells Fargo Home Mortgage, Inc., CIV.A. H-10-3828, 2011 WL 6250785, at *7 (S.D. Tex. Dec. 14, 2011) not (Rosenthal, J.) sufficient. ("A promise to prepare a written contract is The defendant must have promised to sign particular agreement which was in writing at the time.") Beta Drilling, App. -Houston Inc. [14th v. Durkee, Dist.] 821 1992) ) . S.W.2d Because 739, (citing (Tex. 741 Plaintiff a has not alleged that Defendant promised to sign a document which already existed in writing Plaintiff's H-14-104, claim. 2014 WL at See the time, Uddin v. 1614351, at *2 the statute of HSBC Bank USA, (S.D. Tex. frauds N .A., Apr. 21, 18 Document NO.7 at 3-4; Document No. 1-4 at 19 of 26. 10 bars CIV.A. 2014) (Rosenthal, J.) ("Because the agreement that [defendant] allegedly breached was not in writing when the oral promise was made, the promissory-estoppel exception to the statute of frauds does not apply. is therefore ORDERED that Defendant's Fed. R. Civ. P. 12(b) (6) Motion to 11) • Plaintiff's promissory estoppel claim dismissed. IV. Order For the foregoing reasons, it is Dismiss Plaintiff's First Amended Complaint (Document No.6) is GRANTED and Plaintiff's claims are DISMISSED with prejudice. The Clerk will enter this Order, providing a correct copy to all parties of record. SIGNED at Houston, Texas, on this September, 2014. ~I WERLEIN, JR. TES DISTRICT JUDGE 11
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