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Burns v. Jpmorgan Chase Bank National Association

United States District Court, Fifth Circuit

November 14, 2013

KEVIN BURNS, Plaintiff,
v.
JPMORGAN CHASE BANK NATIONAL ASSOCIATION, et al., Defendants.

FINDINGS, CONCLUSIONS, AND RECOMMENDATION

IRMA CARRILLO RAMIREZ, Magistrate Judge.

Pursuant to the Standing Order of Reference dated March 7, 2013, this case has been referred for pretrial management. Before the Court are Defendants' Motion to Dismiss Plaintiff's Complaint, filed March 27, 2013 (doc. 9), BDFTE Defendants' Motion to Dismiss, filed April 11, 2013 (doc. 12), and Defendant Envoy Mortgage, Ltd.'s Motion to Dismiss, filed April 16, 2013 (doc. 15). Based on the relevant filings and applicable law, the motions should be DENIED.

I. BACKGROUND

This action involves the foreclosure of real property located at 243 Barnes Bridge Road, Sunnyvale, Texas 75182 (the Property). (Compl. (doc. 3) at 4, 21.)[1] On March 6, 2013, Kevin Burns (Plaintiff) filed this pro se action against JPMorgan Chase Bank, N.A., successor by merger to Chase Home Finance, LLC (JPMC);[2] Federal National Mortgage Association (Fannie Mae); Mortgage Electronic Registration Systems, Inc. (MERS); Stephen C. Porter; Georgia Ann Bradley; Matt Lindsey; Barrett, Daffin, Frappier, Turner & Engel, LLP (Barrett Daffin), Dana Gompers, and Envoy Mortgage Ltd. (Envoy)[3] (collectively, Defendants). ( Id. at 1.)

On September 26, 2008, Plaintiff obtained a home mortgage from Envoy and signed a promissory note and a deed of trust securing the note in its favor. ( Id. at 4.) Both the note and deed of trust identified Envoy as "Lender." ( Id. at 4, 21, 25.) The deed of trust named MERS, the nominee for Lender and its successors and assigns, as its beneficiary. ( Id. at 25.) It also granted MERS the right to exercise all of the interests Plaintiff granted Lender, including foreclosing and selling the Property upon default and releasing and canceling the deed of trust. ( Id. at 26-27.)

MERS assigned the deed of trust to JPMC on February 10, 2011. ( Id. at 4, 38.) The assignment document was signed by Porter, an "assistant secretary" of MERS and an attorney at Barrett Daffin (the secretary). ( Id. at 38.) The assignment was recorded with the Dallas County Clerk's office. ( Id. ) A few days later, the secretary appointed a substitute trustee on behalf of JPMC. ( Id. at 4, 45.) The appointment was also recorded with the County Clerk. ( Id. at 45.)

Plaintiff apparently defaulted, and on July 3, 2012, the substitute trustee sold the Property to Fannie Mae at a foreclosure sale. ( Id. at 47.) Plaintiff challenges the validity of the foreclosure sale and disputes the secretary's authority to appoint a substitute trustee. ( Id. at 5.) He also contends that neither MERS nor the secretary had the right to assign the deed of trust, and the assignment was therefore "fraudulent." ( Id. ) Because MERS apparently assigned the deed of trust separately from the promissory note and "had no ownership interest" in it, Plaintiff claims the assignment was ineffective and JPMC did not acquire any rights under the deed of trust. ( Id. ) It could therefore not declare a default, accelerate the debt, or foreclose on the Property. ( Id. )

The complaint lists claims for wrongful foreclosure, fraud, suit to quiet title, and violations of the Texas Business & Commerce Code and the Texas Finance Code, also known as the Texas Debt Collection Practices Act (TDCPA). ( Id. at 10-17.) The claims are premised on numerous allegations, including that an unspecified "Defendant" is not the note's holder or an authorized representative of the holder, and that it made fraudulent, deceptive, and misleading representations. ( See id. at 10-11.) Plaintiff also contends that Envoy and JPMC did not "disclose the material terms" of MERS's assignment. ( Id. at 16.) He argues that these Defendants violated the Real Estate Settlement Practices Act (RESPA) and other federal consumer protection statutes by failing to provide him with notice of the assignment. ( Id. ) Among other things, he seeks declaratory judgment, actual, special, and punitive damages, and costs of suit. ( Id. at 17-19.)

On March 27, 2013, JPMC and Fannie Mae moved to dismiss the complaint for lack of subject matter jurisdiction. (doc. 9.) In April, the other defendants (except MERS and Gompers, who has not appeared) also moved to dismiss, adopting and "incorporating by reference" JPMC's and Fannie Mae's motion to dismiss. (docs. 12; 15.) MERS joined JPMC's and Fannie Mae's motion on July 25, 2013. (doc. 24.) With a timely-filed response (doc. 22) and reply (doc. 23), the motions are now ripe for recommendation.

II. RULE 12(b)(1) MOTIONS TO DISMISS

Defendants move to dismiss the complaint under Rule 12(b)(1) for lack of subject matter jurisdiction. (docs. 9; 12; 15.)

A motion to dismiss under Rule 12(b)(1) challenges a court's subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). Such a motion "may be raised by a party, or a by a court on its own initiative at any stage in the litigation, even after trial and the entry of judgment." Arbaugh v. Y&H Corp., 546 U.S. 500, 506-07 (2006). The Court must dismiss the action if it determines that it lacks jurisdiction over the subject matter. Fed.R.Civ.P. 12(h)(3); Stockman v. Fed. Election Comm'n, 138 F.3d 144, 151 (5th Cir. 1998). The dismissal "is not a determination of the merits, " however, and "it does not prevent the plaintiff from pursuing a claim in a court that does have proper jurisdiction." Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001).

A. Rule 12(b)(1) Standard

"Federal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute, which is not to be expanded by judicial decree." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (citations omitted). They "must presume that a suit lies outside this limited jurisdiction, and the burden of establishing federal jurisdiction rests on ...


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