Simmons v. The Bank of New York Mellon et al, No. 4:2012cv02901 - Document 27 (S.D. Tex. 2013)
Court Description: MEMORANDUM OPINION AND ORDER granting 21 MOTION for Judgment. (Signed by Judge Sim Lake) Parties notified. (aboyd)
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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION STEVEN SIMMONS, Plaintiff, THE BANK OF NEW YORK MELLON, f/k/a The Bank of New York, as Trustee; JOHN LYNCH d/b/a AVT Title; and THE BANK OF AMERICA, INC., Defendants. § § § § § § § § § § § § § CIVIL ACTION NO. H-12-2901 MEMORANDUM OPINION AND ORDER Pending before the court is Defendantsf Motion for Judgment on the Pleadings (Docket Entry No. 21) as to Plaintiff's First Amended Original Petition (Docket Entry No. 9) . For the reasons explained below, the pending motion will be granted, and this action will be dismissed. I. Factual AlleCfations and Procedural Backqround Plaintiff alleges that on December 10, 2004, he purchased a tract of real property in Harris County, Texas, financed by a promissory note secured by a deed of trust.' Plaintiff alleges 'plaintiff's First Amended Original Petition (Docket Entry No. 9), pp. 2-3, ¶ ¶ 2-3 (incorporating by reference the Adjustable Rate Note, Exhibit A, and Deed of Trust, Exhibit B, to Plaintiff's Original Petition attached to Notice of Removal, Docket Entry No. 1-3). t h a t s u b s t i t u t e t r u s t e e J o h n Lynch d / b / a AVT i n s t r u c t i o n s f r o m t h e Bank o f N e w York M e l l o n , Title, "acting on [gave] n o t i c e t h a t t h e p r o p e r t y [was] t o b e s o l d b y t h e s u b s t i t u t e T r u s t e e p u r s u a n t t o t h e powers c o n t a i n e d i n t h e d e e d o f t r u s t . " * On S e p t e m b e r 11, 2012, p l a i n t i f f f i l e d h i s O r i g i n a l P e t i t i o n i n s t a t e c o u r t a g a i n s t d e f e n d a n t s , The Bank o f N e w York M e l l o n , a s T r u s t e e f o r t h e C e r t i f i c a t e h o l d e r s o f CWABS, C e r t i f i c a t e s , S e r i e s 2005-1 T i t l e ("Lynch"), The Bank o f , seeking Inc., an ("Bank of injunction i n c o r r e c t l y named a s (collectively, America") to Asset-Backed J o h n Lynch d / b / a AVT a n d Bank o f A m e r i c a , N . A . , America, "Defendants"), ("BNY M e l l o n " ) Inc., prevent the sale of property, a d e c l a r a t i o n t h a t t h e deed of t r u s t s e c u r i n g p l a i n t i f f ' s m o r t g a g e on t h e p r o p e r t y i s i n v a l i d a n d u n e n f o r c e a b l e , damages a n d attorney's fees.3 plaintiff's On S e p t e m b e r 7 , 2012, d e f e n d a n t s t i m e l y removed a c t i o n from s t a t e t o f e d e r a l c o u r t . 4 On O c t o b e r 4 , 2012, Lynch f i l e d D e f e n d a n t J o h n Lynchr s M o t i o n t o D i s m i s s P u r s u a n t t o Federal Rule o f C i v i l Procedure 1 2 ( b ) ( 6 ) and B r i e f i n Support (Docket E n t r y Plaintiff's No. 5) . On October 18, 2012, plaintiff filed F i r s t Amended O r i g i n a l P e t i t i o n ( D o c k e t E n t r y No. 9), and P l a i n t i f f ' s Motion t o Remand a n d B r i e f i n Support Thereof ( D o c k e t E n t r y No. 11). 3 ~ l a i n t if f s O r i g i n a l P e t i t i o n ( " O r i g i n a l P e t i t i o n " ) , E x . B-2 ' t o N o t i c e o f Removal, Docket E n t r y No. 1 - 3 , p . 3, ¶ ¶ 2-3. 4 ~ o t i c e f Removal, Docket E n t r y No. 1. o Plaintiff's First Amended Original Petition asserts a claim for usury against all the defendants, and a claim for violation of Texas Finance Code Chapter 392, Texas Fair Debt Collection Practices Act, against newly-named defendant Mackie Wolf Zientz Mann, P.C. ("Mackie Wolf"), substitute trustee. the law firm representing & the In his Motion to Remand plaintiff argued that the addition of Texas resident Mackie Wolf as a defendant destroyed diversity juri~diction.~ January 4, 2013, the court entered a On Memorandum Opinion and Order dismiss, denied plaintiff's that granted Lynch's motion to attempt to join Mackie Wolf as a defendant, and denied Plaintiff's Motion to Remand.6 In the pending motion Defendants assert that because the court has dismissed defendant Mackie Wolf, the only defendant against whom plaintiff asserted his claim for violation of the Texas Fair Debt Collection Practices Act, the only remaining cause of action is plaintiff's claim for usury against the remaining defendants, BNY Mellon and Bank of America.' Plaintiff has not disputed defendants' assertion that his claim for usury is the only claim remaining in this action. On January 14, 2013, defendants filed their Motion for Judgment on the Pleadings asserting that the lain in tiff's Motion to Remand, Docket Entry No. 11, ¶ 2. 6~emorandum Opinion and Order, Docket Entry No. 20. '~efendants' Motion for Judgment on the Pleadings, Docket Entry No. 21, p. 4, ¶ 7. plaintiff's only remaining claim for usury is barred by limitations and by judicial estoppel. Standard of Review 11. Citing Federal Rule of Civil Procedure 12(c), the two remaining defendants seek judgment on the pleadings arguing that the plaintiff's only remaining claim for usury is barred by the statute of limitations and by the doctrine of judicial estoppel. "A motion brought pursuant to Fed. R. Civ. P. 12(c) is designed to dispose of cases where the material facts are not in dispute and a judgment on the merits can be rendered by looking to the substance of the pleadings and any judicially noticed facts." Hebert Abstract C. v. Touchstone Properties, 914 F.2d 74, 76 (5th Cir. 1990) (per curiam). Such a motion is useful when all material allegations of facts are admitted in the pleadings questions of law remain. and only I . The motion should be granted only if d there is no issue of material fact and if the pleadings show that the moving party is entitled to judgment as a matter of law. Greenberq v. General Mills Financial Group, Inc., 478 F.2d 254, 256 (5th Cir. 1973). A motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) is subject to the same standard as a motion to dismiss under Rule 12 (b)(6). Great Lakes Dredge & See In re Dock Co.. LLC, 624 F.3d 201, 209 (5th Cir. 2010); Guidrv v. American Public Life Insurance Co., 512 F.3d 177, 180 (5th Cir. 2007). The court must accept the factual allegations of the complaint as true, view them in a light most favorable to the plaintiffs, and plaintiffsf favor. draw all reasonable inferences in the Rammins v. United States, 281 F.3d 158, 161 (5th Cir. 2001), cert. denied sub nom Cloud v. United States, 122 S. Ct. 2665 (2002). When considering a Rule 12 (b)(6) motion to dismiss courts are generally able to look only to "the complaint, any documents attached to the complaint, and any documents attached to the motion to dismiss that are central to the claim and referenced by the complaint." Lone Star Fund V (U.S. ) , L.P. v. Barclavs Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010) . However, "it is clearly proper in deciding a 12 (b)(6) motion to take judicial notice of matters of public record." Norris v. Hearst Trust, 500 F.3d 454, 461 n.9 (5th Cir. 2007) (citing Cine1 v. Connick, 15 F.3d 1338, 1343 n. 6 (5th Cir. 1994)) 111. . Plaintiff's Usurv Claims Are Barred by Limitations Citing Texas Finance Code § 305.006 and Asuilar v. Anderson, 855 S.W.2d 799, 810-11 (Tex. App. defendants argue limitations. that - plaintiff's El Paso 1993, writ denied), usury claim is barred Defendants explain that Texas law provides than an action for usury "must be brought within four years after the date on which the usurious interest was contracted for, charged or received." Thus the four year statute of limitations began to run on Plaintiff's claim on December 10, 2004, the date Plaintiff claims he executed the Note and Deed of T r u ~ t . ~ by A defense based on limitations may properly be raised by motion for judgment on the pleadings pursuant to Fed. R. Civ. P . 12 (c) when the defense is apparent on the face of the complaint. See Brown v. Walraven, 9 F.3d 1546 (5th Cir. 1993) (per curiam) (Table) (Rule 12 (c) motion); Ramminq, 281 F.3d at 161 (Rule 12(b) (6) motion). Plaintiff responds that his Usury claim for damages arose because of the acceleration [of] the Note that is secured by a lien on his homestead. The defendants accelerated this note by Notice dated August 29, 2012, and made demand for an amount that included this usurious interest, wrongful late charges, attorneyfs fees. Thereafter, Defendants mailed Plaintiff a "Notice of Rescission of Acceleration of Loan Maturity," a copy of which is attached hereto as Exhibit "A" and incorporated herein by reference. The original acceleration notice constituted a CHARGING of usurious interest when they threatened to foreclose their lien on Plaintiff's homestead. Plaintiff's cause of action for damages accrued on the date of Acceleration and demand for payment in excess of the highest amount allowable by law.' Despite plaintiff's statement to the contrary, the "Notice of Rescission of Acceleration of Loan Maturity" is not attached to plaintiff's response. Moreover, plaintiff has neither requested an evidentiary hearing nor objected to the propriety of deciding whether his claim for usury is barred by limitations on the basis of a motion on the pleadings. In Texas a cause of action for usury "must be brought within four years after the date on which the usurious interest was 'plaintiff's Response to Defendantsf Motion for Judgment on the Pleadings, Docket Entry No. 24, pp. 1-2, ¶ ¶ 1-2. contracted § 305.006. for, charged, or received." I n a p p l y i n g t h e s t a t u t e of Texas Finance limitations, Code a cause of a c t i o n a c c r u e s when a s e t of f a c t s come i n t o e x i s t e n c e t h a t g i v e a claimant a r i g h t t o seek a remedy i n t h e c o u r t s . Weaver, 550 S.W.2d 1 8 , 1 9 (Tex. 1 9 7 7 ) . Robinson v . The q u e s t i o n of when a cause of a c t i o n a c c r u e s i s a q u e s t i o n of law f o r t h e c o u r t . Moreno v . S t e r l i n q Druq, 787 S.W.2d 348, 351 (Tex. 1 9 9 0 ) . P l a i n t i f f ' s usury claim i s based on t h e f o l l o w i n g a l l e g a t i o n s : Defendant has c o n t r a c t e d f o r , c h a r g e [ d ] and r e c e i v e d i n t e r e s t i n e x c e s s of t h e amount a u t h o r i z e d by law. These charges c o l l e c t e d a t c l o s i n g and during the l i f e of the note, when measured a g a i n s t t h e t r u e p r i n c i p a l of t h e l o a n , a r e i n e x c e s s of t h e amount allowed by law.'' I n s u p p o r t of h i s c l a i m s p l a i n t i f f a l l e g e s t h e f o l l o w i n g f a c t s : Delta Bay B u i l d e r s , LLC, i s a r e a l e s t a t e development company that purchased the subject property at f o r e c l o s u r e s a l e on t h e f i r s t Tuesday of June, 2004, and became the fee simple owner of s a i d property. Improvements were made u n t i l t h e p r o p e r t y became l i v a b l e , even though t h e r e was work t o be done b e f o r e t h e p r o j e c t was completed. P l a i n t i f f bought t h e p r o p e r t y from Delta A t r u e and c o r r e c t Bay B u i l d e r s on December 1 0 , 2 0 0 4 . copy of t h e c l o s i n g s t a t e m e n t i s a t t a c h e d h e r e t o a s E x h i b i t "C" and i n c o r p o r a t e d h e r e i n by r e f e r e n c e . A s a f u r t h e r c o n d i t i o n f o r making t h e l o a n , defendants r e q u i r e d p l a i n t i f f t o pay t h e s e a d d i t i o n a l sums t o d e f e n d a n t s a s a f e e . This fee was paid t o defendants by deducting from the f a c e value o f the promissory note s o t h a t the n e t amount a c t u a l l y advanced t o p l a i n t i f f t o acquire the property was less than was advanced. This f e e c o n s t i t u t e s i n t e r e s t i n t h a t i t r e s u l t e d i n no s p e c i a l s e r v i c e s t h a t were rendered t o P l a i n t i f f by d e f e n d a n t s and was t h e r e f o r e a charge f o r t h e use, l o p l a i n t i f f ,s F i r s t Amended O r i g i n a l P e t i t i o n , No. 9 , pp. 6-7, ¶ 11 (emphasis a d d e d ) . -7- Docket Entry P l a i n t i f f paid the forbearance or detention of money. following mortgage fees a t c l o s i n g : Loan origination Underwriting Admin Processing Proceeds Split Total $22,995 Plaintiff has paid additional charges and been charged for addition[al] costs of insurance, late fees and attorney's fees. These additional fees were not shown on the Good Faith Estimate required by law, and constitute interest charged to Plaintiff, in addition to the interest charge[d] under the note on a per annum basis. These amounts are in excess on the maximum amount allowable by law. These amounts violate the Texas usury laws . . . 11 Plaintiff's First Amended Original Petition alleges that on the date of closing, i.e., December 10, 2004, plaintiff paid mortgage fees totaling $22,995.00, which he alleges constitute usurious interest. Because plaintiff filed this action on September 11, 2012, a date that is more than four years after the date of closing on which plaintiff alleges he paid the mortgage fees alleged to constitute usurious interest, plaintiff's usury claim based on the mortgage fees that he allegedly paid on the date Asuilar v. Anderson, 855 of closing is barred by limitations. S.W.2d 799, 810-11 (Tex. App. - El Paso 1993, writ denied) (dismissing usury claim brought more than four years after debtors made their first payment under promissory note at issue, and declining to extend discovery rule exception to usury claim). Plaintiff also alleges that he "has paid additional charges and been charged for addition[al] costs of insurance, late fees and attorneyrs fees."I2 Although Plaintiff's First Amended Original Petition contains no facts supporting these allegations, in response to the pending motion for judgment, plaintiff argues that his usury claim for damages arose because of the acceleration [of] the Note [ , . . . and that his] cause of action for damages accrued on the date of Acceleration and demand for payment in excess of the highest amount allowable by law.13 Defendants argue that plaintiff's claim for usury is, nevertheless, subject to dismissal because the argument asserted in plaintiff's response to Defendants' motion for judgment is directly contradicted by plaintiff's pleadings where he stated, Defendant has contracted for, charge[d] and received interest in excess of the amount authorized by law. These charges collected at closing and during the life of the note, when measured against the true principal of the loan, are in excess of the amount allowed by law.14 Defendants argue that "Plaintiff now asserts a different argument for the sole purpose of escaping the application of the statute's limitations, much as Plaintiff attempted to add a non-diverse defendant for the sole purpose of defeating diversity jurisdiction."I5 13plaintiffr Response to Defendants' Motion for Judgment on s the Pleadings, Docket Entry No. 24, pp. 1-2, ¶ ¶ 1-2. 14plaintiffrs First Amended Original Petition, Docket Entry No. 9, pp. 6-7, ¶ 11. 15~efendants' Reply to Plaintiff's Response to Defendants' Motion for Judgment on the Pleadings, Docket Entry No. 26, pp. 2-3, ¶ 4. Plaintiff has filed his pleadings pro se and, normally, "[a] document filed pro se is 'to be liberally construed,"' Erickson v. Pardus, 127 S.Ct. 2197, 2200 (2007) (quoting Estelle v. Gamble, 97 S.Ct. 285, 292 (1976) ) , and "a pro se complaint, however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers." I . Here, however, the website for d the State Bar of Texas reflects that the plaintiff, although not currently eligible to practice law, is a law school graduate who from November of 1979 to at least October of 2003 was licensed to practice law in Texas.16 Thus, plaintiff's pleadings are not entitled to the liberal construction normally accorded to pro se pleadings. Moreover, despite having had two opportunities to plead his usury claim, only in response to Defendantsf motion for judgment on the pleadings has plaintiff attempted to assert facts capable of supporting a claim for usury based on costs and fees demanded when defendants accelerated the plaintiff's loan. Moreover, despite plaintifffs failure to plead such facts in his First Amended Original Petition, plaintiff has neither sought leave to amend nor explained why he failed to allege such facts. Under these circumstances the court is not persuaded that plaintiff 1 6 ~ h eState Bar of Texas maintains a website, "The Texas Attorney Profile," that provides basic information about attorneys licensed to practice in Texas. The information is provided as a public service by the State Bar of Texas. See Tex. Gov't Code Ann. § 81.115. The website, www.Texasbar.com, was last checked on January 25, 2013. should be allowed to amend his complaint a third time to assert a usury claim based on demands for costs and fees made when the note was accelerated. Accordingly, the court concludes that defendants are entitled to judgment on the pleadings with regard to the claim for usury asserted in Plaintiff' s First Amended Original Petition. IV. For the Conclusion and Order reasons explained above, Defendants' Motion for Judgment on the Pleadings (Docket Entry No. 21) is GRANTED. SIGNED at Houston, Texas, on this 29th day of January, 2013. UNITED STATES DISTRICT JUDGE
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