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Gomez v. Select Portfolio Servicing, Inc.

United States District Court, Fifth Circuit

January 7, 2014

JUAN GOMEZ, et al, Plaintiffs,
v.
SELECT PORTFOLIO SERVICING, INC., et al, Defendants.

ORDER

MICAELA ALVAREZ, District Judge.

Pending before the Court is the motion to dismiss for failure to state a claim ("Motion to Dismiss") filed by Defendant JPMorgan Chase Bank, National Association ("Defendant").[1] Plaintiffs Juan and Martha Gomez have not filed a response in opposition. After considering the motion, record, and relevant authorities, the Court GRANTS the motion to dismiss.

I. BACKGROUND

Defendant is the holder of a note executed by Plaintiffs, as well as a deed of trust securing the property located at 831 Larry Street, Donna, Hidalgo County, Texas.

On October 18, 2013, Plaintiffs filed their original petition in state court, asserting claims related to the note and deed of trust.[2] Specifically, the petition includes claims for fraud, constructive fraud, negligent misrepresentation, and violations of the Texas Deceptive Trade Practices-Consumer Protection Act ("DTPA").[3]

Defendant removed the action on November 6, 2013, and filed the instant motion to dismiss shortly thereafter.[4] In the twenty-one days provided by the local rules for responses to opposed filings, [5] Plaintiffs have filed neither a response in opposition nor a request for leave to amend.

II. LEGAL STANDARD

Before a party has answered a complaint, the proper mechanism for removing a claim from the Court's consideration is a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6);[6] as Defendant filed the motion to dismiss prior to filing its answer, it properly seeks dismissal under this rule. At the motion to dismiss stage, the Court limits its inquiry "to the facts stated in the complaint and the documents either attached to or incorporated in the complaint."[7] "To survive a 12(b) motion to dismiss the plaintiff must plead enough facts to state a claim to relief that is plausible on its face.'"[8] This does not require detailed factual allegations, but it does require "more than labels and conclusions" or "a formulaic recitation of the elements of a cause of action."[9] The Court regards all such well-pleaded facts as true and views them in the light most favorable to the plaintiff.[10] Considered in that manner, factual allegations must raise a right of relief above the speculative level.[11]

Pursuant to the Supreme Court precedent set forth in Ashcroft v. Iqbal , [12] the Court first disregards from its analysis any conclusory allegations as not entitled to the assumption of truth.[13] The Court then undertakes the "context-specific" task of determining whether well-pleaded allegations give rise to an entitlement of relief to an extent that is plausible, rather than merely possible or conceivable.[14] The "plausibility" standard requires the complaint to state "enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary claims or elements."[15]

This Court's jurisdiction is invoked on the basis of diversity of citizenship.[16] This Court, Erie -bound, must adhere to grounds of relief authorized by the state law of Texas.[17] Absent a decision by a state's highest tribunal, the decisions by Texas courts of appeals are controlling "unless [the Court] is convinced by other persuasive data that the highest court of the state would decide otherwise."[18]

III. ANALYSIS

In the motion to dismiss, Defendant generally challenges the sufficiency of Plaintiffs' allegations as to all claims, before additionally challenging the allegational sufficiency as to each individual claim. All of Plaintiffs' claims are based on allegations that Defendant temporarily refused to accept payments due to an accounting error and that, upon Defendant's correction of the error and willingness to accept payments, Plaintiffs "were behind several months in their payments" and did not make the necessary payments.[19] Although the Court acknowledges Defendant's position that no viable claim is readily apparent from those general allegations, the Court nevertheless continues by considering the insufficiency as to each specific claim.

A. Claim under Deceptive Trade Practices-Consumer Protection Act ("DTPA")

Plaintiffs bring a claim for violations of the DTPA, based on allegations that Defendant made a material misrepresentation.[20] However, as noted by Defendant, the DTPA incorporates a threshold standing inquiry: claims under the statute may only be asserted by a "consumer, "[21] defined as one who asserts an acquired good or service as the basis of the complaint.[22] This statutory definition requires the Court to identify the object of the transaction, which Plaintiffs allege as simply the loan agreement comprising the note and deed of trust.[23] However, Texas courts have repeatedly held that "a person cannot qualify as a consumer if the underlying transaction is a pure loan because money is considered neither a good nor ...


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