Van Duzer et al v. US Bank National Association et al, No. 4:2013cv01398 - Document 22 (S.D. Tex. 2014)

Court Description: MEMORANDUM OPINION AND ORDER granting 12 Defendants' Motion for Judgment on the Pleadings. (Signed by Judge Sim Lake) Parties notified. (aboyd, 4)

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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION CHARLES B. VAN DUZER and CANDACE B. VAN DUZER, § § § § § Plaintiffs, v. § § U. S. BANK NATIONAL ASSOCIATION, Individually and as TRUSTEE FOR RASC 2006-KS5; MERSCORP HOLDINGS, INC.; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; and UNKNOWN CLAIMANTS, § § § § § § § § Defendants. CIVIL ACTION NO. H-13-1398 MEMORANDUM OPINION AND ORDER Plaintiffs Charles B. (collectively, "Plaintiffs defendants U. S. ll ("MERS II ) ) Van Duzer brought this pro se action against Bank National Association, Trustee for RASC 2006-KS5 ("Merscorp"), Van Duzer and Candace B. Merscorp Holdings, Inc. and Mortgage Electronic Registration Systems, Inc. (collectively, ("US Bank Individually and as "Defendants related to the origination, ll ll ) ) , alleging causes of action subsequent assignment, foreclosure of a home equity loan. and attempted Pending before the court is Defendants' Motion for Judgment on the Pleadings and Incorporated Brief in Support Thereof ("Defendants' 12 (c) Motion No. 12). ll ) (Docket Entry For the reasons explained below, Defendants' 12(c) Motion will be granted. I. On February 21, equity loan ("Homecomings") from 1 2006, Background Plaintiffs obtained a Homecomings Financial $556,000 home Network, Inc. The loan was evidenced by a Note 2 and secured by a first lien on Plaintiffs' property. 3 MERS was identified as "the beneficiary under [the] Security Instrument."4 GMAC Mortgage LLC ("GMAC") was the loan servicer. 5 A. Plaintiffs' Bankruptcy In July of 2007 MERS, as nominee for Homecomings, sought a judicial foreclosure on Plaintiffs' property under the terms of the Securi ty Instrument. 6 On August 30, 2007, Plaintiffs filed a Chapter 13 bankruptcy petition in the United States Bankruptcy Court for the Southern District of Texas. 7 On November 29, 2007, Plaintiffs' Chapter 13 Plan was confirmed by the bankruptcy court. 8 lTexas Home Equity Adjustable Rate Note ("Note"), Exhibit 2 to Defendants' 12(c) Motion, Docket Entry No. 12-1. 2Id. 3Texas Home Equi ty Security Instrument ("Securi ty Instrument"), Exhibit 1 to Defendants' 12(c) Motion, Docket Entry No. 12-1. 5Complaint, Docket Entry No. I, p. 4 ~ 10. 6Id. ~ 12i Defendants' 12(c) Motion, Docket Entry No. 12, p. 2 ~ 3. 7Complaint, Docket Entry No. I, p. 5 ~ 13. 80 r der Confirming Chapter 13 Plan and Valuing Collateral Pursuant to 11 U.S.C. § 506, Exhibit 6 to Defendants' 12(c) Motion, Docket Entry No. 12-2. -2- On January 25, 2008, Plaintiffs sought to convert their bankruptcy from a Chapter 13 proceeding to a Chapter 7 proceeding. 9 On February 19, 2008, Plaintiffs moved to strike Homecomings' proof of claim, arguing that Homecomings was not the owner of the Note and Security Instrument. 10 On March 13, 2008, Plaintiffs filed a motion for leave to sell the property at issue in this case. 11 Concluding the that the property was exempt, bankruptcy court entered an order on March 31, 2008, authorizing Plaintiffs to sell the property. 12 The order required "all liens [to] be paid at closing, in accordance with state law" and stated that the property "may not be sold unless the liens are paid at closing."13 bankruptcy court determined that its order mooted motion to strike Homecomings' proof of claim.14 The Plaintiffs' Plaintiffs received a Chapter 7 discharge on July 9, 2008. 15 9Debtors Notice of Conversion, and Obj ection to Trustee's Motion to Dismiss, Exhibit 8 to Defendants' 12(c) Motion, Docket Entry No. 12-2. I°Motion to Strike Proof of Claim and Amended Proof of Claim Filed by Homecomings Financial, LLC, Exhibit 10 to Defendants' 12(c) Motion, Docket Entry No. 12-2. 11Motion for Leave to Sell Real Property, Defendants' 12(c) Motion, Docket Entry No. 12-2. Exhibit 11 to l20rder Approving Sale of Homestead, Exhibit 12 to Defendants' 12(c) Motion, Docket Entry No. 12-2. l3Id. 15Discharge of Debtors, Exhibit 13 to Defendants' 12 (c) Motion, Docket Entry No. 12-2. -3- On January 12, 2009, GMAC filed a motion to lift the automatic stay with regard to the property. 16 On February 12, 2009, the bankruptcy court denied the motion as moot because Plaintiffs were "granted a bankruptcy discharge" and "[u]pon the granting of their discharge, the automatic stay against exempt property terminated. "17 Plaintiffs appealed the bankruptcy courts' Order on February 17, 2009. 18 The Order was affirmed by the district court on October 28, 2009. 19 B. The Prior Lawsuit Plaintiffs filed suit against Homecomings, Residential Funding Company, LLC MERS, (collectively, GMAC, "the and 2010 Defendants") on January 29, 2010, to prevent a judicial foreclosure on the property. 20 United States February 16, The 2010 Defendants removed the case to the Court 2010. 21 for the Southern Plaintiffs District of their First filed Texas on Amended 16Motion for Entry of Agreed Order Granting Relief from Automatic Stay [and Co-Debtor Stay] Regarding Exempt Property, Exhibit 14 to Defendants' 12(c) Motion, Docket Entry No. 12-3. 170rder, Exhibit 16 to Defendants' 12(c) Motion, Docket Entry No. 12-3. 18Notice of Docketing an Appeal under Bankruptcy Rule 8007 (b) , Exhibit 17 to Defendants' 12(c) Motion, Docket Entry No. 12-3. 19In re Van Duzer, No. H-09-457 (S.D. Tex. Oct. 28, 2009), Exhibit 20 to Defendants' 12(c) Motion, Docket Entry No. 12-3. 2°Complaint, Docket Entry No. I, p. 6 ~~ 18-19; Plaintiff's Original Petition, Exhibit 21 to Defendants' 12(c) Motion, Docket Entry No. 12-3. 21Complaint, Docket Entry No.1, p. 7 Motion, Docket Entry No. 12, p. 6 ~ 23. -4- ~ 19; Defendants' 12(c) Petition/Complaint in federal court on June 2010. 22 16, September 27, 2010, the lawsuit was remanded to state court. 23 On On October 20, 2011, the 2010 Defendants filed a motion for summary judgment in state court.24 The state court granted the motion for summary judgment on December 8, 2011. 25 C. The Current Lawsuit The Note and Security Instrument were assigned to US Bank on June 12, 2012. 26 foreclosure May 14, under 2013, On April the terms Plaintiffs 3, 2013, of filed the this US Bank sought Security suit a judicial Instrument. 27 against On Defendants. 28 Defendants filed their Answer on June 3, 2013. 29 22Plaintiffs' First Amended Petition/Complaint, Exhibit 22 to Defendants' 12(c) Motion, Docket Entry No. 12-3. 23Van Duzer v. Homecomings Fin., L.L.C., WL 3824630 (S.D. Tex. Sept. 27, 2010). No. H-10-490, 2010 24Defendants' 12(c) Motion, Docket Entry No. 12, p. 7 ~ 27; Defendants Homecomings Financial, L.L.C.'s, Residential Funding Company LLC's and GMAC Mortgage, LLC's Motion for Summary Judgment ("2010 Defendants' Motion for Summary Judgment"), Exhibit 23 to Defendants' 12(c) Motion, Docket Entry No. 12-3. 250rder, Exhibit 24 to Defendants' 12(c) Motion, Docket Entry No. 12-3. 26Assignment of Deed of Trust ("Assignment"), Defendants' 12(c) Motion, Docket Entry No. 12-1. Exhibit 3 to 27Application for Expedited Foreclosure Proceeding Pursuant to Rule 736 of the Texas Rules of Civil Procedure ("April 3, 2013, Judicial Foreclosure Application"), Exhibit 25 to Defendants' 12 (c) Motion, Docket Entry Nos. 12-3, 12-4, 12-5. 28Complaint, Docket Entry No.1. 29Answer to Plaintiffs' Complaint, Docket Entry No.3. -5- Defendants' Plaintiffs filed 12(c) a September 3, 2013. 31 2013. 32 Motion motion was for filed leave to on August conduct 16, 2013. 30 discovery on Defendants filed a response on September 9, The court denied Plaintiffs' motion on September 10, 2013. 33 Plaintiffs filed their Response to Defendants' 12(c) Motion on September 12, 2013. 35 2013. 34 Defendants filed a reply on September 19, On September 25, 2013, Plaintiffs filed their Supplemental Response to Defendants' 12(c) Motion. 36 II. A. Applicable Law Motion for Judgment on the Pleadings A motion brought pursuant to Federal Rule of Civil Procedure 12(c) should be granted if 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. Greenberg v. General Mills Fun Group, Inc., 30Defendants' 12(c) Motion, Docket Entry No. 12. 31Motion to Seek Leave to Conduct Discovery Regarding the Defenses Asserted by the Defendants in their Motion for Judgment on the Pleadings, Docket Entry No. 14. 32Defendants' Opposition to Plaintiffs' Motion to Seek Leave to Conduct Discovery, Docket Entry No. 16. 330r der, Docket Entry No. 17. 34Response to Defendants Motion for Judgment on the Pleadings, Docket Entry No. 18. 35Defendants' Reply Brief in Further Support of their Motion for Judgment on the Pleadings, Docket Entry No. 19. 36Plaintiffs Supplemental Response to Defendants Motion for Judgment on the Pleadings, Docket Entry No. 20. -6- 478 F.2d 254, 256 (5th Cir. 1973). A motion for judgment on the pleadings is subject to the same standard as a motion to dismiss for failure to state a claim. Co. LLC, 624 F.3d 201, 209 See In re Great Lakes Dredge & Dock (5th Cir. 2010) i Guidry v. American Public Life Insurance Co., 512 F.3d 177, 180 (5th Cir. 2007) v. Greninger, 188 F.3d 322, 324 (5th Cir. 1999) i Jones (per curiam) . The court must accept the factual allegations of the complaint as true, view them in a light most favorable to the plaintiffs, and draw all reasonable inferences in the plaintiffs' favor. v. United States, 281 F.3d 158, 161 (5th Cir. 2001)i Ramming Jones, 188 F.3d at 324. "When a federal court reviews the sufficiency of a complaint, before the reception of any evidence either by affidavit or admissions, its task is necessarily a limited one. The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Swierkiewicz v. Sorema N.A., Scheuer v. Rhodes, 94 S. 122 S. Ct. Ct. 1683, 992, 1686 997 (2002) (1974)). (quoting To avoid dismissal a plaintiff must allege "\enough facts to state a claim to relief that is plausible on its face.'" 528 F.3d 413, 418 Twombly, "more 127 S. than accusation." an (5th Cir. 2008) Ct. 1955, 1974 unadorned, Doe v. MySpace, Inc., (quoting Bell Atlantic Corp. v. (2007)). Plausibility requires the-defendant-unlawfully-harmed-me Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that -7- the defendant is liable for the misconduct alleged." a pleads complaint facts defendant's liability, possibility and it 127 S. omitted) . court The Ct. at 1966) will the of entitlement of "not "Where consistent merely short stops plausibility (quoting Twombly, are that Id. to with line a between relief." Id. (internal quotation marks accept as true conclusory allegations, unwarranted factual inferences, or legal conclusions." Gentilello Rege, v. "[D]ismissal is proper 627 if F.3d the 540, 544 complaint (5th lacks 2010) . Cir. an allegation regarding a required element necessary to obtain relief." Torch Liquidating Trust ex reI. Bridge Assocs. L.L.C. v. Stockstill, 561 F.3d 377, 384 (5th Cir. 2009). When considering a motion to dismiss courts are generally "limited to the complaint, any documents attached to the complaint, and any documents attached to the motion to dismiss central to the claim and referenced by the complaint." that Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC, 594 F.3d 383, 387 Cir. 2010) are (5th (citing Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498-99 (5th Cir. 2000)); see also C.H., II ex reI. L.H. v. Rankin Cnty. Sch. Dist., 415 F. App'x 541, 545 (5th Cir. 2011) ("A district court may look to the pleadings and any documents attached thereto." ); Witter Fifth & cf. Co., Plains Trust 313 F.3d 305, Circuit's district Great 313 jurisprudence Co. v. (5th Cir. regarding Morgan Stanley Dean 2002) "the (surveying the documents court may properly consider in deciding a -8- Rule that a 12 (c) In addition r motion") . the court may take judicial notice of matters of public record r including pleadings filed in state court. See Joseph v. Bach & Wasserman, L.L,C' r 487 F. Apprx 173 Cir. 2012) r 178 (5th (" [T] he court may take judicial notice of matters of public record. Here r the document referenced is a pleading filed with a Louisiana state district court r and it is a matter of public record." (citation omitted) F.3d 777 (5th Cir. 2011») 461 n.9 (5th Cir. 12 (b) (6) motion record. ") i to 2007) i Stryker Corp. r 631 Norris v. Hearst Trust r 500 F.3d 454 r ("[I]t is clearly proper in deciding a take judicial Hebert Abstract Ltd., 914 F.2d 74, 76 (citing Funk v. Co., notice Inc. (5th Cir. 1990) v. of matters Touchstone of public Properties, ("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."). When a party presents "matters outside the pleadings" with a motion to dismiss r the court has discretion to either accept or exclude the evidence for purposes of the motion to dismiss. McBurney v. Cuccinelli r 616 F.3d 393 r 410 (4th Cir. 2010) true of practice under Rule 12(b) (6) within the district courtrs r See ("'As is it is well-settled that it is discretion whether to accept extra-pleading matter on a motion for judgment on the pleadings and treat it as one for summary judgment or to reject it and maintain the character of the motion as one under Rule 12(c) .'" -9- (quoting 5C Charles A. Procedure R. 1371 (3d ed. 2010))) § South Utilities, ("Rule & Arthur Wright 12 (b) Inc., gives a or 847 Miller, F.2d to Practice and Isguith ex reI. Isguith v. Middle i district not Federal 186, 194 court accept n.3 (5th Cir. 'complete any 1988) discretion material determine whether pleadings that motion." (quoting 5C Charles A Wright & Arthur R. Miller, Federal is offered in conjunction with a Practice and Procedure § 1366 However, (1969))) beyond to Rule the 12 (b) (6) "[ i] f matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56" and "[a] 11 parties must be given a reasonable opportunity to present all the material that is pertinent to the motion." Fed. R. Civ. P. 12(d) Plaintiffs April 3, Complaint. 37 2013, have attached Judicial a copy Foreclosure of defendant US Banks' Application to their Included with the application are copies of the Note,38 Securi ty Instrument, 39 and Assignment. 40 These documents were also 37April 3, 2013, Judicial Foreclosure Application, to Complaint, Docket Entry No. 1-2. Exhibit B 38Note, attached to April 3, 2013, Judicial Foreclosure Application, Exhibit B to Complaint, Docket Entry No. 1-2. 39Securi ty Instrument, attached to April 3, 2013, Judicial Foreclosure Application, Exhibit B to Complaint, Docket Entry Nos. 1-2, 1-3. 4°Assignment, attached to April 3, 2013, Judicial Foreclosure Application, Exhibit B to Complaint, Docket Entry No. 1-3. -10- attached to Defendants' 12(c) Motion.41 referenced in Plaintiffs' claims, Complaint Because these documents are and central to Plaintiffs' the court concludes that they can be considered without converting the motion to dismiss to a motion for summary judgment. Also attached to Defendants' 12 (c) Motion are copies of the pleadings and related orders in Plaintiffs' bankruptcy proceeding42 and the following documents from Plaintiffs' prior lawsuit against the (2) 2010 Defendants: Plaintiffs' (1 ) Plaintiff's Original First Amended Petition/Complaint, 44 Petition,43 (3) the 2010 Defendants' Motion for Summary Judgment, 45 and (4) the state court's Order granting the 2010 Defendants' Motion for Summary Judgment. 46 Because these documents are matters of public record of which the court may take judicial notice, the court concludes that they can 41Note, Exhibit 2 to Defendants' 12 (c) Motion, Docket Entry No. 12-1; Security Instrument, Exhibit 1 to Defendants' 12 (c) Motion, Docket Entry No. 12-1; Assignment, Exhibit 3 to Defendants' 12 (c) Motion, Docket Entry No. 12-1; April 3, 2013, Judicial Foreclosure Application, Exhibit 25 to Defendants' 12(c) Motion, Docket Entry Nos. 12-3, 12-4, 12-5. 42Exhibits 4-20 Nos. 12-2, 12-3. to Defendants' 43Plaintiff's Original Petition, 12(c) Motion, Docket Entry No. 12-3. 12 (c) Motion, Exhibit 21 Docket Entry to Defendants' 44Plaintiffs' First Amended Petition/Complaint, Exhibit 22 to Defendants' 12(c) Motion, Docket Entry No. 12-3. 45 2010 Defendants' Motion for Summary Judgment, Exhibit 23 to Defendants' 12(c) Motion, Docket Entry No. 12-3. 460rder, Exhibit 24 to Defendants' 12(c) Motion, Docket Entry No. 12-3. -11- be considered without converting the motion to dismiss to a motion for summary judgment. B. Res Judicata "A federal court asked to give res judicata effect to a state court judgment must apply the res judicata principles of the law of the state whose decision is set up as a bar to further litigation. H E.D. Sys. Corp. v. Sw. Bell Tel. Co., 674 F.2d 453, 457 (5th Cir. 1982); see also Norris, 500 F.3d at 460-61 (" [T]he preclusive effect of prior state court proceedings on federal proceedings is determined by the treatment those state court proceedings would receive in the courts of the state -- here, Texas -- in which those prior proceedings were held. (5th Cir. 1982) Rollins v. Dwyer, 666 F.2d 141, 144 H ); ("A state court judgment commands the same res judicata effect from the federal court as it would have in the court that rendered it, without regard to whether the state court applied state or federal law. H). Therefore, the court must look to Texas law to determine the preclusive effect of the state courts' decision in the Plaintiffs' prior lawsuit. In Texas, "[r] es judicata precludes relitigation of claims that have been finally adjudicated, or that arise out of the same subject matter and that could have been litigated in the prior action. 1996) H Amstadt v. u.s. Brass Corp., 919 S.W.2d 644, 652 (Tex. (citing Barr v. Resolution Trust Corp., 837 S.W.2d 627, 628 (Tex. 1992)). It is an affirmative defense. -12- Tex. R. Civ. P. 94; zurita v. Lombana, 322 S.W.3d 463, 474 (Tex. App.-Houston [14th Dist.] 2010, pet. denied); Serrano v. First Prestons Mgmt. Corp., 346 S.W.3d 648, 650 (Tex. App.-El Paso 2009, no pet.). claiming the defense must prove ~(1) The party a prior final judgment on the merits by a court of competent jurisdiction; parties or those in privity with themi and (2) identity of the (3) a second action based on the same claims that were raised or could have been raised in the first action." Citizens Ins. Co. of Am. v. Daccach, S.W.3d 430, 449 (Tex. 2007) "Under the 217 (citing Amstadt, 919 S.W.2d at 652) transactional approach followed in Texas, a subsequent suit is barred if it arises out of the same subject matter as the prior suit, and that subject matter could have been litigated in the prior suit." 631) . Id. (citing Barr, 837 S.W.2d at "A determination of what constitutes the subject matter of a suit necessarily requires an examination of the factual basis of the claim or claims in the prior litigation." 630. ~It Barr, 837 S.W.2d at requires an analysis of the factual matters that make up the gist of the complaint, without regard to the form of action." Id. This determination should be made "pragmatically I \ giving weight to such considerations as whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a trial unit conforms to the parties' expectations or business understanding or usage.'" Daccach, 217 S.W.3d at 449 (quoting Barr, 837 S.W.2d at 631). "Any cause of action which arises out of those same facts should, -13- if practicable, be litigated in the same lawsuit." Barr, 837 S.W.2d at 630. C. Pleading Fraud Claims Federal Rule of Civil Procedure level of pleading for fraud claims. 9 (b) imposes a heightened A party bringing a fraud claim "must state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). The plaintiff must therefore "'specify the statements contended to be fraudulent, identify the speaker, state when and where the statements were made, and explain why the statements were fraudulent.'" Sullivan v. LLC, (quoting ABC Arbitrage v. 600 F.3d 542, 551 (5th Cir. 2010) Leor Energy, Tchuruk, 291 F.3d 336, 350 (5th Cir. 2002)). III. Applicability of Res Judicata Although it is an affirmative defense, "[d]ismissal . on res judicata grounds may be appropriate when the elements of res judicata are apparent on the face of the pleadings." Dean v. Mississippi Bd. of Bar Admissions, 394 F. App'x 172, 175 (5th Cir. 2010); see also Kansa Reinsurance Co., Ltd. v. Congo Mortgage Corp. of Texas, 20 F.3d 1362, 1366 (5th Cir. 1994) ("[W]hen a successful affirmative defense appears on the face of the pleadings, dismissal under Rule 12(b) (6) may be appropriate."); Co., 794 F.2d 967, 970 (5th Cir. 1986) Clark v. Amoco Prod. ("Although dismissal under Rule 12(b) (6) is ordinarily determined by whether the facts alleged in the complaint, if true, give rise to a cause of action, a claim -14- -.-._-_._--_._------- may also be dismissed if a successful affirmative defense appears clearly on the face of the pleadings."); Kaiser Aluminum & Chern. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir. 1982) "[A] complaint that shows relief to be barred by an affirmative defense, such as the statute of limitations, dismissed for failure to state a cause of action.") v. Hodgkins, 305 F. App'x 224, 227 (5th Cir. 2008) may be But see Hall ('" [G]enerally a res judicata contention cannot be brought in a motion to dismiss; it must be pleaded as Masters Educ. Servs., an affirmative defense.'" Inc. v. Singh, 428 F.3d 559, (quoting Test 570 n.2 (5th Cir.2005))). A pragmatic consideration of the Plaintiffs' prior lawsuit reveals that the factual basis for that suit involved the events surrounding the initial lending transaction between Plaintiffs and Homecomings. Specifically, Plaintiffs challenged the role of MERS as and "nominee" "beneficiary" under the Security Instrument, 47 Homecomings' role as lender in the initial lending transaction,48 the validity and enforceability of the Security Instrument and resulting lien on the property,49 the representations of the 2010 Defendants pertaining to the initial lending transaction, 50 and the right of the 47Plaintiffs' First Amended Petition/Complaint, Exhibit 22 to Defendants' 12(c) Motion, Docket Entry No. 12-3, pp. 3-5 ~~ 9-12, pp. 11-12 ~~ 33-35. 48Id. at 5 ~ 12. 49Id. at 4 ~ 10, 6 ~ 17, 7 ~ 2l. sord. at 5 ~ 13, 7 ~ 18, 8-9 ~~ 21-28, 11-12 ~~ 32-35. -15- 2010 Defendants to foreclose. 51 Under Texas law any claims arising out of the same subject matter are barred by the doctrine of res judicata in this court. S.W.2d at 652. Daccach, 217 S.W.3d at 449; Amstadt, 919 Accordingly, to the extent that any of Plaintiffs' claims are based on the circumstances and events surrounding the initial lending transaction, as described above, they are barred and subject to dismissal. IV. Dean, 394 F. App'x at 175. Defendants' Standing to Foreclose Throughout their Complaint Plaintiffs raise several challenges to Defendants' standing Security Instrument. 52 that any of to As explained in Plaintiffs r circumstances surrounding including MERS' foreclose claims the are under § the terms of the III above r to the extent based initial on the lending events transaction r and Homecomings' roles in that transaction r are barred by the doctrine of res judicata. and However r they several of Plaintiffs' allegations regarding Defendants' standing to foreclose are based on the validity of the subsequent assignment of the Security Instrument from MERS r as nominee for Homecomings r to US Bank on June 12, 2012. 53 SlId. at 6 ~ 17, 7 ~~ 19-21, 9 ~~ 27-28. S2S ee , e. g. r Complaint, Docket Entry No.1, p. 4 ~ 12, 15-16 ~~ 50-51r pp. 26-27 ~~ 92-95 r p. 39 ~ 144, pp. 43-44 ~~ 159-60 r p. 46 ~ 169 r pp. 48-50 ~~ 175-86 r pp. 58-61 ~~ 214-27, pp. 73-74 ~~ 266-69 r p. 91 ~ 332, pp. 92-93 ~~ 336-45 r pp. 112-13 ~~ 428-34, pp. 118-19 ~~ 455-59. pp. 53See id. at 4-5 ~ 12r 15-16 ~ 50 r 26 ~ 92r 43-44 ~~ 158-62 r 46 ~~ 167-69 r 58-61 ~~ 214-27, 91 ~ 332r 92 ~~ 336-37 r 118-19 ~~ 455-59. -16- -----------_._-- ----- A. Plaintiffs' Allegations Plaintiffs allegedly appear lack to standing advance to five reasons (1) foreclose: why Defendants Defendants do not possess the original Note,54 (2) The Note was rendered unsecured by the bifurcation of the Note and the Security Instrument,55 (3) the inclusion of the Note in a securitized trust rendered the Security Instrument unenforceable, 56 (4) the Assignment was a forgery, 57 and (5) MERS did not have authority to execute the Assignment. 58 Plaintiffs' contention that Defendants must produce the original Note in order to foreclose has no merit under Texas law. 59 See Martins v. BAC Home Loans Servicing, L.P., (5th Cir. 2013) 722 F.3d 249, 254 (rejecting the "show-me-the-note" theory and noting that "[n]umerous federal district courts have . . . concluded that Texas recognizes assignment of mortgages through MERS and its equivalents as valid and enforceable without production of the original, signed note"). Furthermore, Plaintiffs' arguments that Defendants lack standing to foreclose because they are not the 54See id. at 8 ~ 26, 9 ~ 34, 59-60 ~~ 219-20, 94 ~ 352. ~ 55S ee id. at 60 ~ 91 56See id. 406. ~ 221, 62 ~ at 46 ~~ 167-69, 231, 27 ~ 62 ~ 231, 95. 104-05 ~~ 389-90, 57 See id. at 43-44 ~~ 158-62, 58-61 ~~ 214-27, 332, 118-19 ~~ 455-59. 5BSee ~~ 214-27, id. at 4-5 ~ 12, 27 ~ 95, 42-43 92 ~~ 336-37, 118-19 ~~ 455-59. 59See id. at 9 ~ 34, 59-60 ~~ 219-25, 79 -17- ~ ~~ 29l. 107 61 ~~ 226-27, 154-55,58-61 holder in due course 60 of the Note, and that bifurcation of the Note and Security Instrument rendered the Note unsecured,61 have no merit because, under Texas law, different from the "the beneficiary of the holder of the note" and lien can be ,,\ [t] he foreclose need not possess the note itself.'" party to Wiley v. Deutsche Bank Nat. Trust Co., No. 12-51039, 2013 WL 4779686, at *2 (5th Cir. Sept. 6, 2013) (quoting Martins, 722 F.3d at 255). "So long as it is a beneficiary named in the deed of trust or an assign, that party may exercise its authority even if it does not hold the note itself." Id. Plaintiffs' argument that inclusion of their mortgage in a securitized trust renders the Security Instrument unenforceable is also unavailing. securitization unenforceable. Courts of a 3 3 562 8 5 , cases) Felder v. WL 6805843, at mortgage renders See Marban v. 2 0 13 WL i routinely *10 at *17 (N . D . (S.D. Plaintiff's arguments that the Tex. No. July 3, Loans, Tex. Dec. arguments Security PNC Mortgage, Countrywide Home *15, reject 20, Instrument 3:12-CV-3952-M, 2013) No. that (collecting H-13-0282, 2013) 2013 (rejecting securitization rendered his Deed of Trust unenforceable) . Plaintiffs' conclusory allegations suggesting that the Assignment was a forgery are insufficient to "allow[] the court to 60See id. at 8 61See id. at 60 ~ 26, 9 ~ ~ 221, 62 34, 59 ~ ~ 219, 94 231, 27 -18- ~ 95. ~ 352. draw the reasonable inference that the defendant is liable for the misconduct alleged. produced a Iqbal, 129 S. Ct. at 1949. u The parties have facially valid assignment signed by Robert Lyons as Assistant Secretary for MERS, solely as nominee for Homecomings. 62 The Assignment was Montgomery County, recorded in the Official Texas, on June 22, Public Records of 2012. 63 Because \\ [r] eal Property records often contain transfers taking place many years in Texas the past [, ] 'view [s] with suspicion and distrust attempts to discredit certificates of acknowledgment,' under which the transfer is presumptively valid and contradicting evidence 'must be clear, controversy. ' No. U 12-20623, (quoting (Tex. Ruiz cogent, Morlock, 2013 v. and convincing beyond reasonable L.L.C. v. JP Morgan Chase Bank, N.A., WL 2422778, at *2 2013) Stewart App.-Tyler 2006, Mineral pet. (5th Cir. Corp., denied)). 202 June 4, S.W.3d 242,248 Plaintiffs assert that "[t]he Pre-Foreclosure Mortgage Assignment was drafted by a lawyer at the law firm filing the Third Foreclosure action. On information and belief the Assignment was signed by an employee of that law firm and the signature notarized by an employee of the law firm. u64 Plaintiffs have not explained the 62Assignment, Exhibit 3 to Defendants' Entry No. 12-1, p. 32. basis 12 (c) for Motion, their Docket 63Id. 7 ~ 64Complaint, Docket Entry No.1, p. 92 23. -19- ~ 336; see also id. at "information and belief," nor have they explained how the signer's employment situation instance. See Hill v. Bank of New York Mellon, No. W-12-CA-083, 2012 WL 6924545, at *6 would invalidate the Assignment (W.D. Tex. May 16, 2012) in this ("Plaintiff does not explain why being a member of a firm disqualifies [the signer] from also being a corporate representative for MERS. There is, therefore, no basis for her claim that the assignment was invalid due to the signature . ") . Their conclusory allegation, devoid of further factual enhancement, is insufficient to challenge the presumptively valid mortgage assignment. See Morlock, 2013 WL 2422778, at *2. Plaintiffs' argument that MERS lacked authority to execute the Assignment fails as a matter of law. The Fifth Circuit has held that MERS "qualifies as a mortgagee" under Texas law. F.3d at 255. Martins, 722 "Courts in the Fifth Circuit have repeatedly upheld MERS' assignment of mortgages to other entities." Khan v. Wells Fargo Bank, N.A., No. H-12-1116, 2014 WL 200492, at *9 (S.D. Tex. Jan. 1 7, 2 0 14) . MERS is expressly named as a beneficiary and "nominee for Lender and Lender's successors and assigns" Security Instrument. 55 in the Therefore, Plaintiffs' argument that MERS lacked authority to execute the Assignment fails as a matter of law. 65Security Instrument, Exhibit 1 to Defendants' 12(c) Motion, Docket Entry No. 12-1, p. 3. -20- B. Plaintiffs' Standing to Challenge the Assignment Plaintiffs lack standing to challenge the validity of the Assignment. 220, See Reinagel v. Deutsche Bank Nat. Trust Co., 735 F.3d (5th Cir. 228 In Reinagel the plaintiff-homeowners 2013). sought declaratory and injunctive relief on the basis that the assignee of their mortgage lacked standing to foreclose. 222-25. rd. at The Fifth Circuit analyzed the effect of two mortgage assignments challenged by the plaintiff-homeowners, noting that "the first instrument assigned only the deed of trust, whereas the second instrument assigned both the deed of trust and 'the certain note(s) described therein.'" Id. at 225. The court ultimately held that the second assignment was valid against the plaintiffs and "reaffirm [ed] that under Texas law, facially valid assignments cannot be challenged for want of authority except by the defrauded assignor." Here, Id. at 228. the facially valid Assignment, like the second instrument in Reinagel, assigns both the Security Instrument and the "note or notes therein described or referred to." 66 225. See id. at Although Plaintiffs would have standing to "defend 'on any ground which renders the assignment void,'" their challenge based on the signer's Assignment, alleged lack of authority would render the "like any other unauthorized contract, not void, but merely voidable at the election of the defrauded principal." 66Assignment, Entry No. 12-1. Exhibit 3 to Defendants' -21- 12 (c) Motion, Id. Docket Thus, the signer's alleged lack of authority, true, does not furnish Plaintiffs with a basis to challenge the assignment. In even accepted as See id. addition, Plaintiffs lack standing to challenge the assignment as a violation of the terms of any applicable Pooling and Servicing Agreement ("PSA") Based on the foregoing, 2012, Assignment is the court will presume that the June 12, valid standing to foreclose. v. See Reinagel, 735 F.3d at 228. .67 and that Defendants therefore had See Morlock, 2013 WL 2422778, at *2. Plaintiffs' Alleged Causes of Action In their Complaint, Plaintiffs allege fifteen causes of action in addition to seeking declaratory and injunctive relief. 68 Plaintiffs are proceeding pro se, pleadings liberally. (2007) the court has construed their See Erickson v. Pardus, 127 S. Ct. 2197, 2200 ("A document filed pro se is and 'a pro se complaint to less lawyers. stringent S. Ct. 285 I 292 I 'to be liberally construed,' however inartfully pleaded l must be held standards (citations III Because than omitted) ( 1976) ) ) . formal (quoting pleadings Estelle v. drafted by Gamble I 97 For the reasons explained below l the court concludes that Defendants I 12(c) Motion should be granted as to all of Plaintiffs l alleged causes of action. p. 36 67Complaintl Docket Entry No. 11 p. 13 ~~ 131-32. 68Id. at 71-124. -22- ~ 441 p. 32 ~~ 115-16 1 A. Count I: Violation of 18 U.S.C. § 1962(c)-(d) Plaintiffs allege that Defendants violated Influenced and Corrupt Organizations Act ("RICO"). 69 the Racketeer "RICO creates a civil cause of action for' [a]ny person injured in his business or property by reason of a violation of section 1962.'11 Protective Life Ins. (quoting 18 U.S.C. § Co., 353 1964(c)). any subsection In 18 U.S.C. § F.3d 405, 407 (5th Brown v. Cir. 2003) "To state a civil RICO claim under 1962, 'there must be: (1) a person who engages in (2) a pattern of racketeering activity (3) connected to the acquisition, enterprise.'" establishment, conduct, or control of an Jackson v. NAACP, No. 12-20399, 2013 WL 5530576, at *3 (5th Cir. Oct. 8, 2013) (quoting Brown v. Protective Life Ins. Co., 353 F.3d405, 407 (5thCir. 2003)). 1. Alleged Violations of 18 U.S.C. Plaintiffs have § "alleged violations 1962(c) of § 1962 (c) ,70 which prohibits any person employed by or associated with any enterprise from participating in or conducting the affairs of that enterprise through a pattern of racketeering activity." Id. (quoting St. Paul Mercury Ins. Co. v. Williams, 224 F.3d 425, 445 (5th Cir. 2000)) (internal quotation marks omitted). "'A pattern of racketeering activity requires two or more predicate acts and a demonstration that the racketeering predicates are related and amount to or pose 69Id. at 71-78. 7°Id. at 71-77. -23- a threat of continued criminal activity.'" Brown, 353 F.3d at 407 (quoting St. Paul Mercury, 224 F.3d at 441) . "The predicate acts can be either state or federal crimes, but must be criminal acts." Choice v. Deutsche Bank Nat. Trust Co., No. WL 4506146, at *2 (S.D. Tex. Aug. 22, 2013) H-13-1519, 2013 (citing St. Germain v. Howard, 556 F.3d 261, 263 (5th Cir. 2009)). The predicate acts complained of by plaintiffs are "mail or wire fraud." 7l See 18 U. S . C. 1341, 1343. §§ "To state a claim for mail or wire fraud to support a RICO violation under § 1343, a plaintiff must establish three elements; § 1341 or '(1) a scheme or artifice to defraud or to obtain money or property by means of false pretenses, representations, or promises; (2) a use of the interstate mails or wires for the purpose of executing the scheme; and (3) a specific intent to defraud either by [d]evising, participating in, or abetting the scheme.'" Vanderbilt Mortgage & Fin., 841 (S.D. Tex. 2010) Inc., 2007 WL 275476, Inc. v. Flores, 746 F. Supp. 2d 819, (quoting Hewlett-Packard Co. v. at *3 Byd:Sign, (E.D. Tex. Jan. 25, 2007)). Plaintiffs identify three "predicate acts" of Defendants that they. contend constitute instances of mail or wire fraud: (1) " [b]ringing suit on behalf of entities which were not the real parties in interest and which had no standing to sue [through] the use of the MERS 7lId. at 72 ~~ artifice," (2) 259-61. -24- [a]ctively concealing the plaintiffs' lack of foreclosure," and standing (3) in their standard complaints for fraudulent affidavits and "drafting . filing [the] fraudulent and forged affidavits documents and as to loan ownership. 72 11 As explained in standing to foreclose under Texas law. § IV above, Defendants had Evidence of that standing has been produced in the form of a facially valid Assignment, and Plaintiffs have not made any factual allegations that would impugn the validity of the Assignment beyond their conclusory allegations of forgery and lack of authority of the individual who signed the Assignment. 73 Accordingly, as explained in § IV above, the court will presume that the Assignment is valid. Plaintiffs allege that "[a] separate count of Mail Fraud took place each and every time Promissory Note Assignment, a fraudulent pleading, Affidavit, mortgage or mortgage assignment was sent by or on behalf of a Defendant through the use of the US mail." 74 However, Plaintiffs do not provide any factual allegations that would allow the court to draw the reasonable inference that any particular pleading, mortgage, or mortgage 72Id. at 73 ~ affidavit, assignment is fraudulent. Plaintiffs' 266. at 7 ~ 23, 43-44 ~~ 158-62, 58-61 91 ~ 332, 92 ~ 336, 118-19 ~~ 455-59. 73See id. ~~ 226-27, promissory note assignment, ~~ 214-27, 61 74Id. at 72 ~ 260. Plaintiffs also allege that II [b] y sending the fraudulent affidavits, assignments and pleadings to the clerks of court, judges, attorneys, and defendants in foreclosure cases[, t]hese Defendants intentionally participated in a scheme to defraud others, including the Plaintiffs." rd. ~ 261. -25- conclusory allegations are not sufficient to "allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S. Ct. at 1949. Plaintiffs also make several allegations concerning the role of MERS in recording and assigning mortgages. 75 The court has already concluded in § III above that any claims based on the role of MERS in the initial lending transaction between Plaintiffs and Homecomings judicata. are barred in In addition, this court the the doctrine of the court has already concluded in above that the Assignment is valid, execute by Assignment, and that res § IV that MERS had authority to Plaintiffs lack standing to relate to challenge the Assignment. All of Plaintiffs' other factual allegations unidentified mortgages involving unknown individuals who are not parties to this litigation. 76 Plaintiffs have not explained how they were injured by these putative predicate acts. S.P.R.L. v. Imrex Co., Inc., 105 S. Ct. ("Conducting an enterprise that affects obviously not in. itself a violation of commission of the predicate offenses. 3275, See Sedima, 3285 (1985) interstate commerce is § 1962/ nor is mere [T]he plaintiff only has standing if, and can only recover to the extent that/ he has been injured in 75Id. at 75-76 his ~~ business or property 276-77. 76See id. at 39-70, 71-75 ~~ 260-72. -26- by the conduct constituting the violation."). Plaintiffs do not allege that they have made their payments in accordance with the Note.?? of the court's conclusions in § In light IV above, Plaintiffs' allegations are insufficient to state a claim for a RICO violation under 18 U.S.C. 2. § 1962 (c) . Alleged Violations of 18 U.S.C. § 1962(d) In order to show a RICO conspiracy under Section 1962(d), a plaintiff must show '(1) that two or more people agreed to commit a substantive RICO offense and (2) that [the defendant] knew of and agreed to the overall objective of the RICO offense.'" BAC Home Loans Servicing, LP v. Texas Realty Holdings, LLC, 901 F. Supp. 2d 884, 920 (S.D. Tex. 2012) (quoting Chaney v. Dreyfus Servo Corp., 595 F.3d 219, 239 (5th Cir. 2010)). "In other words, there must be evidence that a conspirator knew of the conspiracy and acted in furtherance thereof." Id. (citing Salinas v. United States, 118 S. Ct. 4 6 9, 4 7 7 - 7 8 ( 1 997) ) . Plaintiffs violate 18 U.S.C. allege § that "Defendants conspired together to 1962[d]" by "agree [ing] upon the same criminal 77Plaintiffs allege that "Defendant seeks to enforce loan documents for which it has already been paid in full." Complaint, Docket Entry No.1, p. 15 ~ 49; see also id. at 60 ~ 222, 76 ~ 280, 114 , 440. Plaintiffs appear to argue that their Note was extinguished by one or all of the following: (1) derivative contracts and credit default swaps allegedly entered into by the Lender, (2) Government bailout subsidies provided to mortgage lenders, or (3) insurance purchased by the securitized trust. See id. at 15 '48,37-38'138,46-47 ,,173-75, 62-63 ~ 231,85 ~ 311, 113 , 434. However, Plaintiffs provide no authority, and the court is not aware of any, to suggest that any of these items would extinguish Plaintiffs' obligations under the Note. -27- objective to wit: foreclosures. "78 the theft of real property through illegal The court has already concluded in Defendants had standing to foreclose. § IV above that Although Plaintiffs have provided a lengthy factual background of the MERS system to support their claims, all of their factual allegations relate to unidentified mortgages involving unknown individuals who are not parties to this litigation. 79 Plaintiffs' allegations are also not specific enough to allow the court to draw the reasonable inference that any particular act of Defendants is fraudulent, and thus fail to meet the requirements of Rule 9(b). Co. Liquidating Trust, 155 F.3d See Rolo v. City Investing 644, 659 (3d Cir. 1998). Plaintiffs have cited no authority, and the court is not aware of any, to suggest that the MERS system constitutes a criminal conspiracy to steal real property through illegal foreclosures. Indeed, Texas law specifically foreclosures as a mortgagee. allows for MERS to conduct See Farkas v. GMAC Mortgage, L.L.C., 737 F.3d 338, 342 (5th Cir. 2013) ("Our holding in Martins permits MERS and its assigns to bring foreclosure actions under the Texas Property Code." conclusory (citing Martins, 722 F.3d at 255)). allegations that Defendants "typically" Plaintiffs' engage in fraudulent conduct, without any factual enhancement beyond their 78Complaint, Docket Entry No. I, p. 77 ~ 283. 79See id. at 39-70. -28- -------_ ... _.-. __... _--- unsupported allegations of a broad conspiracy public,BO are insufficient to state a claim under B. Count II: plaintiffs to § defraud the 1962(d). Conspiracy allege that Defendants conspired to "fil[e] foreclosure[s] under false pretenses" and to file "fraudulent and forged Mortgage Assignment [s] . "Bl "Under Texas law, (1) of a claim for civil conspiracy are: (2) an objective to be accomplished; the elements two or more persons; (3) a meeting of the minds on the objective; (4) one or more unlawful overt acts; and (5) damages as a proximate result of the conduct. II Dallas Cnty., Tex. v. MERSCORP, Inc., No. 3:11-CV-2733-0, 2013 WL 5903300, at *10 (N.D. Tex. Nov. 4, 2013) Cir. 2005). (citing Murray v. Earle, 405 F. 3d 279, 293 (5th "Civil conspiracy is a 'derivative tort' contingent on defendant's participation in some underlying tort." Id. Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex. 1996)). "To succeed on a conspiracy claim, a plaintiff must prove either (citing 'that the defendants conspired to accomplish an unlawful purpose or used unlawful means to accomplish a lawful purpose. '" BAC Home Loans Servicing, LP v. Texas Realty Holdings, LLC, 901 F. Supp. 2d 884, 917 (S.D. Tex. 2012) (citing Murray, 405 F.3d at 293). It appears that the bulk of plaintiffs' factual allegations with regard to their conspiracy claim involve either the original BOS ee generally id. at 51-71. B1Id. at 78 ~ 290; see also id. at 88 -29- ~ 322. lending transaction or subsequent assignment of their mortgage. 82 As noted in § III above, any claims related to the original lending transaction are barred by the doctrine of res judicata. in IV above, § As noted the court has concluded that the June 12, Assignment is valid. 2012, All other factual allegations in plaintiffs' Complaint are vague and conclusory allegations of supposed "dark influences" affecting parties and transactions that are neither identified nor involved in this litigation. 83 Such allegations are insufficient to "allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S. Ct. at 1949. Furthermore, because the court concludes that Plaintiffs have failed to state a plausible cause of action against Defendants based on any other theory of recovery advanced in their Complaint, Plaintiffs' claims for conspiracy must fail as a matter of law. See Dallas Cnty., 2013 WL 590330, at *10 ("As no underlying claim remains upon which to base this derivative tort, the Court enters judgment as a matter of law ln favor of Defendants as to Plaintiff's civil conspiracy claim."); Huml v. Mortgage Electronic Registration Sys., Inc., No. EP-12-CV-00146-DCG, 2012 WL 5984821, at *6 (W.D. complaint Tex. involve Oct. 25, failing 2012) to ("[T]he conduct alleged in the record 82See id. at 78-89. 83Id. at 80 ~ 296. -30- subsequent transfers of interest in real property, designating MERS as beneficiary in the deeds of trust, \ robosigned' documents to facilitate These allegations of misconduct form the basis of foreclosures. Plaintiffs' and using claims for fraudulent misrepresentation and unjust enrichment, which as have been seen do not state a valid claim upon which relief can be granted. claim must also fail, claim, it depends Accordingly, Plaintiffs' conspiracy because \ conspiracy is not a on participation in some stand-alone underlying tort.' If (quoting Berry v. Indianapolis Life Ins. Co., 600 F. Supp. 2d 805, 814 C. (N.D. Tex. 2009))). Count III: 1. Common Law Fraud and Injurious Falsehood Fraud To prevail on a fraud claim under Texas law a plaintiff must prove that (1) the defendant made a material representation that was false; (2) the defendant knew the representation was false or made it recklessly as a positive assertion without any knowledge of its truth; act upon (3) the the defendant intended to induce the plaintiff to representation; (4) the plaintiff actually and justifiably relied upon the representation; and (5) the plaintiff thereby suffered an injury. Ernst & Young, L.L.P. v. Pacific Mut. Life. Ins. Co., 51 S.W.2d 573, 577 (Tex. 2001). to base their fraud claim on their allegation that "forged and publicly filed 84 Plaintiffs appear I d . at 9 0 ~ \ false' 33 0 . -31- Defendants mortgage assignments .,,84 The court has already concluded in IV above that the June 12, 2012, § Assignment is presumptively valid and that Plaintiffs have failed to impugn its validity. With regard to Plaintiffs' factual allegations concerning "property owners and Judges across Texas," such allegations fail to meet the heightened pleading requirements of Rule 9(b) and are insufficient to allow the court to draw the reasonable inference that Defendants are liable for the misconduct alleged. 85 4986-G, See Martinez-Bey v. 2013 WL 3054000, at Bank of Am .. *10 (N.D. N.A., Tex. No. June 3:12-CV- 18, 2013) ("Plaintiff argues, in essence, that Defendants misrepresented [the Bank's] authority to foreclose on the Property by falsely representing that it was the holder in due course of the note and had title to the Property. Although he lays out the 'what,' he does not state the 'when, where, or how' of his claim." (citing Benchmark Electronics. Inc. v. J.M. Huber Corp., 343 F.3d 719, 724 (5th Cir. 2003)) Accordingly, Plaintiffs' fraud claims will be dismissed. 2. Injurious Falsehood In Texas the tort of "injurious falsehood" name "business disparagement." Co. , 749 S. W. 2d 762, 766 is known by the See Hurlbut v. Gulf Atl. Life Ins. (Tex. 1987) (noting that " [t] he Restatement identifies the tort [of business disparagement] by the name 'injurious falsehood'" (citing Restatement (Second) of Torts 85Id. -32- § 623A, comment a (1977))) i see also Graham Land & Cattle Co. v. Indep. Bankers Bank, 205 S.W.3d 21, 30 2006, no pet.) ("The Texas Supreme (Tex. App.-Corpus Christi Court has relied on the Restatement (Second) of Torts to explain and develop the common law cause of action for business disparagement, a claim known outside Texas as 'inj urious falsehood.'" (citing Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167,170 (Tex. 2003))). "A claim for business slander or disparagement is appropriate when a plaintiff alleges interference Newsom v. Brod, with commercial 89 S.W.3d 732, Dist.] 2002, no pet.) or 734-35 economic (Tex. relations." App.-Houston [1st (citing Hurlbut, 749 S.W.2d at 766). "The general elements of a claim for business disparagement are publication by the defendant of the disparaging words, falsity, malice, lack of privilege, and special damages." Co. of Am. 2000 ) v. Fin. Review Servs., Inc., Prudential Ins. 29 S.W.3d 74, 82 (Tex. "An action for injurious falsehood or business disparage- ment is similar in many respects to an action for defamation." Newsom, 89 S.W.3d at 735 (citing Hurlbut, 749 S.W.2d at 767). However, "[m] ore stringent requirements have always been imposed on the 'plaintiff seeking to recover for injurious falsehood in three important respects defendant and proof falsi ty of of damage.'" the statement, Hurlbut, (quoting Restatement (Second) of Torts § Wi th regard to the damages element, 749 fault of the S.W.2d at 766 623A, comment g (1977)). "pecuniary loss to the plaintiff must always be proved to establish a cause of action for -33- business disparagement." loss rd. at 766. "Pecuniary loss refers to that has been realized or liquidated, specific loss of Newsom, sales." Hurlbut, 749 S.W.2d at 767. as in the case of 89 S.W.3d at 735; see also "Furthermore, the communication must play a substantial part in inducing others not to deal with the plaintiff with the result that special damage, in the form of the loss of trade or other dealings, is established." Hurlbut, 749 S.W.2d at 767. Plaintiffs have not alleged any lost sales or other dealings as a result of any statements allegedly published by Defendants. 86 Cf. Allied Capital Corp. v. Cravens, 67 S.W.3d 486, 488-89, 492-93 (Tex. App.-Corpus plaintiffs pet.) (concluding that claim for business had stated a advertisement of a breakdown Christi 2002, no disparagement when foreclosure sale of their property caused a in negotiations with potential buyers and lessees). Therefore, Plaintiffs have failed to plead an essential element of their cause of action, and dismissal is proper. See Stockstill, 561 F.3d at 384. Moreover, Plaintiffs' claims for injurious falsehood appear to be based entirely on their contention that \\[t]he Mortgage Assignments were published false statements" and that "Defendants knew the foreclosures and declaratory judgments were filed with false statements as to the Defendants' standing to file suit and 86See id. at 90-91. -34- status as Mortgagee. is valid and uS ? As explained in Defendants have IV above, the Assignment § standing to foreclose. Thus, Plaintiffs' claims have no merit. D. Count IV: 1. Slander/Defamation of Title and Quiet Title Slander of Title (1) the uttering A slander of title action in Texas requires: and publishing of disparaging words, (4) special damages, (2) falsity, (3) (5) possession of an estate or interest in the property disparaged, and (6) the loss of a specific sale. v. Jennings, ref'd) . malice, 755 S.W.2d 874, 879 (Tex. Williams App.-Houston 1988, writ Plaintiffs allege that "MERS was illegally and fraudu- lently listed in the public record as a Mortgagee. explained in Texas law. § IV above, uss However, as MERS "qualifies as a mortgagee" under Martins, 722 F.3d at 255. the validity of the June 12, 2012, Plaintiffs also challenge Assignment recorded in the Official Public Records of Montgomery County, Texas. 89 has already concluded that the Assignment is valid. The court Therefore, Plaintiffs' claims for slander of title have no merit. Furthermore, specific sale. Plaintiffs Accordingly, have not alleged Plaintiffs' the loss of a claims for slander of title are subj ect to dismissal because "the complaint lacks an 8?Id. at 91 ~ 332. BBld. at 92 ~ 336. B9Id. -35- allegation relief." regarding a required element necessary to obtain Stockstill, 561 F.3d 377. 2. Quiet Title A suit to quiet title under Texas law requires a plaintiff to (1) prove: a valid equitable interest in a specific property, (2) title to the property is affected by a claim by the defendant, and (3) although facially valid, defendant's claim is invalid or unenforceable. Bryant v. Bank of America, N.A., No. 4:ll-CV-448, 2012 WL 2681361, at *16 (E.D. Tex. June 6, 2012) Duvall, 815 S. W. 2d 285, denied)) . 293 n. 2 (citing Sadler v. (Tex. App. -Texarkana 1991, pet. A plaintiff in a suit to quiet title "must prove and recover on the strength of his own title, not the weakness of his adversary's title." Fricks v. Hancock, 45 S.W.3d 322, 327 App.-Corpus Christi 2001, no pet.). (Tex. "The effect of a suit to quiet title is to declare invalid or ineffective the defendant's claim to title." Gordon v. West Houston Trees, Ltd., 352 S.W.3d 32, 42 (Tex. App.-Houston [1st Dist.] 2011, no pet.). Plaintiffs' claims for quiet title appear to be based entirely on the enforceability of the Security Instrument and Assignment. 9o The court has already concluded in § III above that any challenge to the validity of the Security Instrument is barred in this court by the doctrine of res already concluded in 90Id. at 94-95 ~~ § judicata. In addition, IV above that 347-54. -36- the court has the Assignment is valid. Accordingly, Plaintiffs' quiet-title claims must fail as a matter of law. E. Count V: Fraud by Misrepresentation In Texas the elements of fraud by misrepresentation are: (1) the defendant made a representation to the plaintiff; representation was material; (3) the representation was (2) the false; (4) when the defendant made the representation, the defendant knew it was false or made the representation recklessly and without knowledge of its truth; (5) the defendant made the representation with the intent that the plaintiff act on it; (6) the plaintiff relied on the representation; and (7) the representation caused the Martinez-Bey, 2013 WL 3054000, at *10 plaintiff injury. (citing Shandong Yinguang Chern. Indus. Joint Stock Co., Ltd. v. Potter, 607 F.3d 1029, deceptive 1032-33 acts of (5th Cir. the 2010)). original Plaintiffs allege Lender(s) and MERS as "[t]he to the inducement of the borrower to enter the transaction and as to a multitude of misrepresentations in the execution of such" as the basis for their claims for fraud by misrepresentation. 91 allegations appear surrounding the initial § III above, explained in to involve the lending events transaction. and These circumstances Accordingly, as they are res judicata in this court. Furthermore, Plaintiffs' allegations fail to meet the heightened pleading requirements 91Id. at 95 ~ of Rule 9(b). 356. -37- See id. Therefore, Plaintiffs' claims for fraud by misrepresentation are subject to dismissal. F. Count VI: Fraud by Omission and Inducement "When the plaintiff alleges fraud by omission, Texas have consistently held that fraud by '[c]ourts in nondisclosure or concealment requires proof of all of the elements of fraud by affirmative misrepresentation, including fraudulent intent, with the exception that the misrepresentation element can be proven by the nondisclosure or concealment of a material fact in light of a Hines v. Wells Fargo Bank, N.A., No. H-13- duty to disclose.'ff 00167, 2013 WL 5786473, at *6 (S.D. Tex. Oct. 28, 2013) (quoting United Teacher Assocs. Ins. Co. v. Union Labor Life Ins. Co., 414 F.3d 558, 567 (5th Cir. 2005)). "A defendant IS failure to disclose information will support a claim for fraud only where the defendant has a duty to disclose." Bradford v. Vento, Shandong, 48 S.W.3d 749, 755 607 F.3d at 1035 (Tex. 2001)). (citing "A duty to disclose arises between parties in a confidential or fiduciary relationship or between non-fiduciaries when later that his misleading.'" previous affirmative 'one party learns statement Hines, 2013 WL 5786473, at *6 was false or (quoting Union Pac. Resources Grp., Inc. v. Rhone-Poulenc, Inc., 247 F.3d 574,586 (5th Cir.2001)). Plaintiffs have not alleged relationship with Defendants, a confidential or fiduciary nor have they identified with the -38- particularity required by Rule 9(b) any affirmative statement later discovered to be false or misleading. that Instead, Plaintiffs allege "[t] he Lender conspired to fraudulently conceal the Lender' at closing, converted into an Vehicle."~ 'True and the Note may have been securitized and investment vehicle within a Special Purpose Plaintiffs contend that the alleged failure to disclose the securitization of their Note "induced the Plaintiffs to enter into a loan with unknown allegations appear surrounding the initial § III above, explained in Plaintiffs' claims to for and involve unrevealed the lending entities."93 events and transaction. Such circumstances Accordingly, as they are res judicata in this court. fraud by omission and inducement are therefore subject to dismissal. G. Count VII: Conspiracy to Commit Operation, and Use of MERS System "To establish a civil conspiracy Fraud by to the commit Creation, fraud, the plaintiff must establish (1) a combination of two or more persons; (2) seeking to accomplish an unlawful purpose or a lawful purpose by unlawful means; course of action; (3) having a meeting of minds on the object or (4) who commit one or more unlawful, overt acts; (5) proximately resulting in damages. Townsend v. Barrett Daffin Frappier Turner & Engel, LLP, No. 09-12-00564-CV, 2013 WL 5874607, 92Id. at 96 ~ 358. 93rd. -39- at *4 Co. (Tex. App.-Beaumont Oct. 31, 2013, pet. filed) of N. Am. v. Morris, 981 S.W.2d 667, 675 (citing Ins. (Tex. 1998)). Plaintiffs make several allegations regarding the role of MERS in originating, recording, securitizing, and foreclosing on mortgages that they contend support a claim for conspiracy to commit fraud. 94 Plaintiffs' arguments involve allegations involving the split-thenote theory, the pooling of mortgages in securitized trusts, and the alleged lack of standing of MERS-related entities to initiate foreclosure proceedings. 95 As explained in III above, § to the extent that Plaintiffs' claims rely on the events and circumstances surrounding the initial lending transaction, judicata. they are barred by the doctrine of res Furthermore, the court has already addressed Plaintiffs' arguments as they pertain to the validity of the June 12, 2012, Assignment and Accordingly, concluded to the extent that that the Assignment Plaintiffs' is valid. claims depend upon challenging the Assignment, they have no merit. In addition, Plaintiffs have not explained how use of the MERS system caused them any damages. Plaintiffs allege that they "have suffered injuries which include mental anguish, emotional distress, embarrassment, credit rating. humiliation, However, 1196 94Id. at 96-109 ~~ loss of ~ decreased Plaintiffs do not explain how any of 360-410. 95See id. 96Id. at 109 reputation and a 411. -40- these damages were proximately caused by Defendants' Plaintiffs do not allege that they have paid their MERS system. Note. use of the Instead, they challenge Defendants' standing to foreclose and argue that they are not obligated to repay the Note because of the securitization of their loan and the government's bailout of the mortgage inference industry. 97 that "the Such allegations creation, operation, proximately caused Plaintiffs any damages. fail to support and use of an MERS" Accordingly, Plaintiffs have failed to state a claim for conspiracy to commit fraud. Count VIII: Conspiracy to Commit Wrongful Foreclosure by the Creation, Operation, and Use of the MERS System H. Plaintiffs allege that Defendants "did knowingly and willfully conspire and agree among themselves to engage in a conspiracy to promote, encourage, facilitate and actively engage in and benefit from wrongful foreclosures perpetrated on Plaintiffs." 98 conspiracy is participation a 'derivative in some tort' underlying contingent tort." on Dallas "Civil defendant's Cnty., 2013 WL 5903300, at *10 (citing Tilton, 925 S.W.2d at 681 (Tex. 1996)). Here, Plaintiffs foreclosure. 99 allege "In Texas, that the 99Id. at 110 ~ ~ is wrongful \ (1) a defect in the foreclosure 97See id. at 15 ~ 48, 37-38 ~ 138, 231, 85 ~ 311, 113 ~ 434. 98Id. at 109-10 tort to prevail on a wrongful foreclosure claim a plaintiff must establish: ~ underlying 414. 415. -41- 46-47 ~~ 173-75, 62-63 sale proceedings; (2) a grossly inadequate selling price; and (3) a causal connection between the defect and the grossly inadequate Colbert v. Fed. Nat. Mortgage Ass'n, No. H-12- selling price.'" 2827, 2013 WL 505343, Sauceda v. at GMAC Mortg. *4 (S.D. Corp., 268 Tex. Feb. 8, S.W.3d 135, 2013) 139 (quoting (Tex. App.- Corpus Christi 2008, no pet.)) Plaintiffs have not made any factual allegations concerning See id. defects in any foreclosure sale proceedings. Instead, Plaintiffs argue that Defendants conspired to initiate foreclosure proceedings without standing to do so. 100 concluded in Accordingly, The court has already IV above that Defendants have standing to foreclose. § Plaintiffs' claim that "use of the MERS artifice" allowed Defendants to "[b]ring[] suit on behalf of entities [that] were not the real parties in interest, and [that] had no standing to sue" has no merit .101 Without any factual allegations sufficient to give rise to an inference that a foreclosure would be wrongful, Plaintiffs' claim that Defendants conspired to commit wrongful foreclosure must fail as a matter of law. See Dallas Cnty., 2013 WL 590330, at *10; Huml, 2012 WL 5984821, at *6. I. Count IX: Unjust Enrichment Plaintiffs allege that will unjustly enrich 100Id. at 111-13 101Id. at 112 ~ ~~ "Defendants' deceptive scheme Defendants to the ~ 433. 420-34. 428; see also id. at 113 -42- detriment of Plaintiffs [] payments by from Plaintiffs' causing the mortgage properties payments[] through illegal respect to unjust enrichment[,] claim is matter, unavailable as here." 103 is the to Defendants where a case with contract the i monetary the sale of "With foreclosures." 102 Texas law is clear that such a addresses foreclosure WL 5513987, at *2 (5th Cir. Oct. 7, 2013) at *2 and/or Frazier v. Wells Fargo Bank, N.A., 299 S.W.3d 98, 102 (Tex. 2009)) receive the process No. disputed at 13-40316, issue 2013 (citing Miga v. Jensen, see also Baxter, 2013 WL 5356894, ("There can be no recovery based on [restitution or unjust enrichment] when the same subject matter is covered by an express 102rd. at 115 ~ 443. 103The court notes that several Texas courts of appeals have held that unjust enrichment is not an independent cause of action under Texas law. See Richardson Hosp. Auth. v. Duru, 387 S.W.3d 109, 114 (Tex. App.-Dallas 2012, no pet.) ("This Court has held that unjust enrichment is not an independent cause of action.") i Foley v. Daniel, 346 S.W.3d 687, 690 (Tex. App.-El Paso 2009, no pet.) ("Unjust enrichment[] is not an independent cause of action ."); Casstevens v. Smith, 269 S.W.3d 222, 229 (Tex. App.-Texarkana 2008, pet. denied) ("Unjust enrichment, itself, is not an independent cause of action. ."); Mowbray v. Avery, 76 S.W.3d 663, 679-80 (Tex. App.-Corpus Christi 2002, pet. denied) ("[U]njust enrichment is not a distinct independent cause of action but simply a theory of recovery.") i LaChance v. Hollenbeck, 695 S.W.2d 618, 620 (Tex. App.-Austin 1985, writ ref'd n.r.e.) ("Unjust enrichment. . does not provide an independent basis for a cause of action.") i see also Baxter v. PNC Bank Nat. Ass'n, No. 12-51181, 2013 WL 5356894, at *3 n.2 (5th Cir. Sept. 26, 2013) ("Texas courts have not recognized a claim for unjust enrichment as an independent cause of action, but have recognized that a lawsuit for restitution or a lawsuit seeking the imposition of a constructive trust may be raised on the theory of unjust enrichment." (citing Mowbray, 76 S.W.3d at 679-80)). But see Pepi Corp. v. Galliford, 254 S.W.3d 457, 460 (Tex. App.-Houston [1st Dist. 2007, pet. denied) ("Unjust enrichment is an independent cause of action.")). -43- contract.H); Katz v. 2934, JP Morgan Chase Bank Nat. Ass'n, 2013 WL 6709178, at *3 (S.D. Tex. Dec. 18, No. 2013) H-13("Here, [Plaintiff's] mortgage is covered by the Deed of Trust, which is a contract between [Plaintiff] (the mortgagor) and [Defendant] Thus, mortgagee by assignment) . a claim upon which relief can be (the [Plaintiff] fails to state granted as to his unjust enrichment claim. H); Casstevens, 269 S.W.3d at 229 ("The doctrine [of unjust enrichment] applies the principles of restitution to disputes where there is no actual contract, based on the equitable principle that one who receives benefits that would be unjust for him or her to retain ought to make restitution. H) Because the Note and Security Instrument govern the rights and obligations of the parties, including issues related to payment and foreclosure, Plaintiffs cannot maintain a cause of action against Defendants for unjust enrichment. J. Count X: Forgery Plaintiffs allege that Defendants forged the June 12, 2012, Assignment. 104 that "[t]he Signature' The factual basis for their claim is their assertion forgery under on Texas's the Assignment Uniform was Commercial an Code, 'Unauthorized meaning 'a signature without actual, impl ied, or apparent authority.' 105 As H l04Complaint, Docket Entry No.1, p. 118 ~~ 455, 457-58; see also id. at 117 ~ 452. 105Id. at 118 ~ 455. -44- explained in validity of signature. tiffs' § IV above, Plaintiffs lack standing to challenge the the Assignment In addition, arguments on the basis of an unauthorized the court has already considered Plain- regarding the allegedly forged Assignment and concluded that Plaintiffs have failed to plead facts "convincing beyond reasonable controversy" to suggest that the June 12, 2012, Assignment was a forgery. Morlock, 2013 WL 2422778, at *2. Although Plaintiffs have not cited any authority, they appear to recite the elements of forgery under a criminal statute to argue that Defendants are § 170.10 (McKinney) i "guilty of forgery. ,,106 Tex. Penal Code Ann. See N. Y. 32.21 (West). § Penal Law However, "[i]n order for a private right of action to exist under a criminal statute, there must be \ a statutory basis for inferring that a civil cause of action of some sort Prindle v. Lewis, No. 3:10-CV-1217-8-8K, (N.D. Tex. Oct. 8, 2010) (1975) ) . lay in favor of someone.'" 2010 WL 4628077, at *2 (quoting Cort v. Ash, 95 S. Ct. 2080, 2088 Plaintiffs have not provided any statutory basis for inferring that they are entitled to bring a private cause of action on the basis of any criminal statute. Thus, any attempt by Plaintiffs to assert a cause of action under a criminal statute fails as a matter of law. See Mathis v. DCR Mortgage III Sub, 1, LLC, No. A-13-CA-192-SS, 2013 WL 3389452, at *5 (W.D. Tex. July 8, 2013) (" [Plaintiff's] 106Id. at 117 ~ Amended Complaint 454. -45- labels forgery, in violation of the Texas Penal Code, as its third cause of action. Of course, 'the Texas Penal Code does not create a private cause of action. "' (quoting Hamilton v. Pechacek, 319 S.W.3d 801, 813 (Tex. App.-Fort Worth 2010, no pet.))). K. Count XI: Laches Plaintiffs allege that "Defendants through their dilatory tactics have failed to timely prosecute a foreclosure action . . As a result of these [delays] Defendants prosecuting any attempt to foreclose asserting laches unreasonable must delay show by the two ."107 are party from now "To prevail, the party (1 ) elements: other barred in there an legal asserting was or equitable rights, and (2) the party asserting laches made a good faith change in position to his detriment because of the delay." Brewer v. Nationsbank of Texas, N.A., App.-Corpus Christi 2000, no pet.) i 28 S.W.3d 801, 804 (Tex. see also City of Fort Worth v. Johnson, 388 S.w.2d 400, 403 (Tex. 1964). Plaintiffs have pleaded no facts indicating that they made a change in position to their detriment because of any delay by Defendants foreclosure action. complaint lacks an in prosecuting a Accordingly, dismissal is proper because "the allegation necessary to obtain relief." regarding a required element Stockstill, 561 F.3d at 384. Furthermore, under Texas law "laches is a defense and not a cause of action. l07Id. at 119 Prappas v. II ~~ Meyerland Cmty. 461-62. -46- Imp. Ass'n, 795 S.W.2d 794, 800 (Tex. App.-Houston [14th Dist.] 1990, writ denied) see also Tex. R. Civ. P. 94. i The appropriate juncture for raising a laches claim would have been in the state foreclosure proceeding. See Prappas, raising a 795 S.W.2d at 800 ("The appropriate juncture for would have been at the time laches claim . [the But it turns laches on its head related action was filed.] to transform the doctrine into a basis for bringing this derivative lawsuit.") . L. Action Under the Federal Truth in Lending Act Count XII: ("TlLA") Plaintiffs' allegations with regard to Count XII appear to be copied directly from lawsui t . 108 As Plaintiffs' claims their pleadings explained are in III § based on in the above, the to events prior the and state-court extent that circumstances surrounding the initial lending transaction, such claims are barred by the doctrine of res judicata. Because Plaintiffs do not plead any facts that are not related to the initial lending transaction with regard to any alleged TILA violations, Count XII is barred by res judicata in its entirety.109 Furthermore, it is apparent from the face of the Complaint that Plaintiffs' TILA cause of action is barred by the statute of 108Compare Complaint, Docket Entry No. I, pp. 119-21 ~~ 464-72, with Plaintiffs' First Amended Petition/Complaint, Exhibit 22 to Defendants' 12(c) Motion, Docket Entry No. 12-3, pp. 8-10 ~~ 21-29. l09Plaintiffs allege various deficiencies with regard to the timing and content of the disclosure statement in connection with the closing of the initial loan transaction. Complaint, Docket Entry No. I, pp. 120-21 ~ 467. -47- ---------_._----_._---- limitations. See Kansa, 20 F.3d at 1366; Clark, 794 F.2d at 970; Kaiser Aluminum, 677 F.2d at "The 1050. general statute of limitations for damages claims under the TlLA is one year after the violation. Williams II v. Countrywide F. Supp. 2d 176, 186 (S.D. Tex. 2007) Home Loans, (citing 15 U.S.C. Inc., 504 1640(e)), § aff'd, 269 F. App'x 523 (5th Cir. 2008) "'The violation "occurs" when Nondisclosure the transaction is consummated. is not a continuing violation for purposes of the statute of limitations. '" Moor v. Travelers Ins. Co., 784 F.2d 632, 633 (5th Cir. 1986) (quoting In re Smith, 737 F.2d 1549, 1552 (11th Cir. 1984)). "The credit transaction is consummated when 'a contractual relationship is created between [a creditor and consumer].' II Williams, 504 F. Supp. at 186 (quoting Bourgeois v. Haynes Construction Co., 728 F.2d 719, 720 (5th Cir. 1984)). consummated on February 21, May 14, 2013, Plaintiffs' more than TILA claims are Here, the credit transaction was 2006. 110 seven This suit was brought on years later .111 barred by the Therefore, applicable one-year statute of limitations. M. Count XIII: Infliction of Emotional Distress Plaintiffs' allegations with regard to Count XIII appear to be copied directly from their pleadings in the prior state-court l1°Note, Exhibit 2 to Defendants' 12(c) Motion, Docket Entry No. 12-1, p. Ii Security Instrument, Exhibit 1 to Defendants' 12(c) Motion, Docket Entry No. 12-1, p. 1. 111Complaint, Docket Entry No.1. -48- lawsui t . 112 As explained Plaintiffs' claims are in III § based on above, the to events the and extent that circumstances surrounding the initial lending transaction, such claims are barred by the doctrine of res judicata. Plaintiffs do not point to any specific factual allegations to support their claim that Plaintiffs constitutes alternative "Defendants [' J the tort of conduct with regard to outrage" or "[iJn the . the tort of intentional infliction of emotional distress and/or reckless disregard for the infliction of emotional distress." 113 Instead, Plaintiffs argue that "all of the conduct of the Defendants" gives rise to the tort causes of action alleged. 1M "To recover damages for intentional infliction of emotional distress, a plaintiff must establish that: intentionally or extreme and outrageous; plaintiff (2) recklessly; emotional (3) the (1) the defendant acted defendant's conduct was the defendant's actions caused the distress; and (4) the resulting emotional 112Compare Complaint, Docket Entry No. I, p. 122 ~~ 474-75, with Plaintiffs' First Amended Petition/Complaint, Exhibit 22 to Defendants' 12(c) Motion, Docket Entry No. 12-3, p. 10 ~~ 30-31. 113Complaint, Docket Entry No. I, p. 122 ~~ 474-75. Though Plaintiffs couch their claims in the alternative, they have cited no authority, and the court is aware of none, to suggest that Texas courts recognize a separate cause of action for "outrage" that is distinct from a cause of action for intentional infliction of emotional distress. See Black's Law Dictionary 814 (7th ed. 1999) (defining "intentional infliction of emotional distress" and noting that the tort is "[a]lso termed (in some states) outrage"). Accordingly, the court construes Plaintiffs' allegations solely as a claim for intentional infliction of emotional distress. 114Complaint, Docket Entry No. I, p. 122 -49- ~~ 474-75. distress was severe. H Hoffmann-La Roche Inc. v. Zeltwanger, 144 (citing Standard Fruit & Vegetable Co. S.W.3d 438, 445 (Tex. 2004) v. Johnson, 985 62, S.W.2d 65 (Tex. "Extreme 1998)) and outrageous conduct is conduct 'so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, civilized community. "' 619, 621 (Tex. Id. and utterly intolerable in a (quoting Twyman v. Twyman, 855 S.W.2d Furthermore, 1993)). "[i]t is for the court to determine, in the first instance, whether a defendant's conduct was extreme and outrageous. differ, "But when reasonable minds may H it is for the jury, determine was sufficiently extreme and outrageous to result in liability.H Id. review allegations of about in the particular Plaintiffs' which case, Complaint reasonable the to conduct A whether, subject to the court's control, reveals minds could no factual differ in determining whether Defendants' conduct was extreme or outrageous. Furthermore, Plaintiffs have pleaded no facts indicating that they suffered severe emotional distress. failed to plead a plausible Accordingly, Plaintiffs have cause of action for intentional infliction of emotional distress under Texas law. N. Count XIV: Breach of Fiduciary Duty or Quasi-Fiduciary Duty Plaintiffs' allegations with regard to Count XIV appear to be copied verbatim from their pleadings -50- in the prior state-court lawsuit. 115 Plaintiffs allege that Defendants "had and have an ongoing duty to report truthful information on documents that they recorded in the records of Montgomery County, Texas and to act in conformity with the laws of the State of Texas and federal laws relating to mortgage servicing, explained in § based on the and they did not do so. ,,116 As III above, to the extent that Plaintiffs' claims are events and circumstances surrounding the initial lending transaction, such claims are barred by the doctrine of res judicata. 117 The court has already concluded in § IV above that the Assignment is facially valid and that MERS had authority to execute it. Accordingly, Plaintiffs' conclusory allegations that Defend- ants did not "report truthful information on documents that they recorded in the records of Montgomery County, Texas" or "act in conformity with the laws of the State of Texas and federal laws relating to mortgage servicing" have no merit. 118 Furthermore, 115Compare Complaint, Docket Entry No. I, p. 122 ~ 477, with Plaintiffs' First Amended Petition/Complaint, Exhibit 22 to Defendants' 12(c) Motion, Docket Entry No. 12-3, p. 11 ~ 32. 116Complaint, Docket Entry No. I, p. 122 ~ 477. 117The court construes Plaintiffs' allegations regarding Defendants' alleged duty to provide "Plaintiffs with fair and honest disclosure of all facts that might be presumed to influence them with regard to its actions, including those facts favorable to a creditor and adverse to Plaintiffs' interest as it relates to the Security Agreement" to be based entirely on the events giving rise to the initial loan transaction and foreclosure that was the subject of the state-court lawsuit. See Complaint, Docket Entry No. I, p. 122 ~ 477. Accordingly, Plaintiffs' claims based on these facts are barred by the doctrine of res judicata. 118Complaint, Docket Entry No. I, p. 122 -51- ~ 477. Plaintiffs have not alleged the existence of a between themselves and Defendants, duty was breached. Plaintiffs' See Williams, nor have they specified what 504 F. Supp. at 192-93. "complaint lacks an allegation regarding a element necessary to obtain relief." O. fiduciary duty Thus, required Stockstill, 561 F.3d at 384. Count XV: Violations of the Real Estate Settlement Procedures Act ("RESPA") Plaintiffs' allegations with regard to Count XV appear to be copied directly lawsuit. 119 from As noted in their pleadings § III in the prior state-court above, to the extent that Plaintiffs' claims are based on the events and circumstances surrounding the initial lending transaction, such claims are barred by the doctrine of res judicata. 120 119Compare Complaint, Docket Entry No.1, p. 123 ~~ 479-81, with Plaintiffs' First Amended Complaint, Exhibit 22 to Defendants' 12(c) Motion, Docket Entry No. 12-3, pp. 11-12 ~~ 33-35. As noted by Defendants, Plaintiffs' allegations are directed at "Defendants Homecomings, MERS and GMAC" and references an assignment to "RFC." Defendants' 12(c) Motion, Docket Entry No. 12, p. 17; Complaint, Docket Entry No.1, p. 123 ~~ 479-81. Of the parties named by Plaintiffs, only MERS is a party in the current action. 12°The court construes Plaintiffs' allegations regarding Defendants' alleged duty to provide "Plaintiffs with fair and honest disclosure of all facts that might be presumed to influence them with regard to its actions, including those facts favorable to a creditor and adverse to Plaintiffs' interest as it relates to the Security Agreement" to be based entirely on the events giving rise to the initial lending transaction and foreclosure action that was the subject of the prior state-court lawsuit. See Complaint, Docket Entry No.1, p. 122 ~ 477. Accordingly, Plaintiffs' claims based on these facts are barred by the doctrine of res judicata. -52- Plaintiffs allege that they "were not provided with timely and truthful information regarding the ownership and/or servicing of their loan" effectuated because by any improperly "transfers" constituted were "shams 'officers' purportedly of defendant MERS," resulting in "necessarily false information contained in any 'notice' sent regarding transfers of ownership and/or servicing of the loan."121 The court has already concluded in § IV above that MERS had authority to assign the Security Instrument and that Plaintiffs have failed to plead facts sufficient to impugn the Assignment's presumptive validity. Accordingly, Plaintiffs' claim that Defendants violated RESPA by providing "false information" regarding the transfer of ownership or servicing rights has no merit. 122 VI. Conclusions and Order For the reasons explained above, the court concludes that Plaintiffs have failed to state a plausible claim for relief under 121Complaint, Docket Entry No.1, p. 123 ~~ 479-80. 122Because the court has concluded that Plaintiffs have failed to state a plausible cause of action against Defendants under any substantive law, no basis remains for the declaratory and injunctive relief requested in their Complaint. See Morlock, L.L.C. v. JPMorgan Chase Bank, N.A., No. H-13-0734, 2013 WL 5781240, at *10-*14 (S.D. Tex. Oct. 25, 2013) i Morlock, L.L.C. v. JP Morgan Chase Bank, N.A., No. H-12-1448, 2012 WL 3187918, at *7 (S.D. Tex. Aug. 2, 2012), aff'd, No. 12-20623, 2013 WL 2422778 (5th Cir. June 4, 2013). Accordingly, Plaintiffs' request for declaratory and injunctive relief will be dismissed. -53- any cause of action advanced in their Complaint. Motion for Judgment on the Pleadings Defendants' (Docket Entry No. 12) is therefore GRANTED. SIGNED at Houston, Texas, on this 31st day of January, 2014. 7 SIM LAKE UNITED STATES DISTRICT JUDGE -54-

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