United States District Court, S.D. Texas, Houston Division
MEMORANDUM OPINION AND ORDER
LAKE UNITED STATES DISTRICT JUDGE
before the court is Plaintiffs' Motion for Leave to Amend
Pleadings (Docket Entry No. 13) . For the reasons stated
below, the motion will be granted in part and denied in part.
Factual and Procedural Background
Roger Law and Lucindra Law ("Plaintiffs") allege
that on September 29, 2005, they purchased property at 4115
Woodlake Lane, Missouri City, Texas ("the
Property"). Plaintiffs' initial lender sold their
loan to U.S. Bank N.A., as Trustee for the Registered Holders
of MASTR Asset Backed Securities Trust 2006-AM1, Mortgage
Pass-Through Certificates, Series 2006-AM1 ("U.S.
Bank"). Their loan was then serviced by defendant Ocwen
Loan Servicing, LLC ("Ocwen" or
"Defendant"). On December 3, 2013, U.S. Bank
purchased the Property in a non-judicial foreclosure sale.
October 13, 2014, U.S. Bank filed suit to evict Plaintiffs.
On October 27, 2014, Ocwen sold the Property to a third
party. But on October 30, 2014, U.S. Bank's attorneys,
Mackie Wolf Zientz & Mann, PC ("MWZM"),
allegedly represented to the court that U.S. Bank still owned
the Property. The trial court ruled in favor of U.S. Bank.
Plaintiffs appealed. On appeal, U.S. Bank again allegedly
represented that it owned the Property. Plaintiffs were
evicted in March of 2015.
filed suit against Ocwen and MWZM in the 434th Judicial
District Court of Fort Bend, Texas, asserting claims of
negligence and statutory fraud arising from the statements
made in state court. Defendant Ocwen timely removed the case
to this court. Plaintiffs now move to amend their
Original Petition to allege a claim for common law fraud and
to seek additional remedies.
Standard of Review
concerning motions to amend are "entrusted to the sound
discretion of the district court . . . ."
Ouintanilla v. Texas Television Inc., 139 F.3d 494,
499 (5th Cir. 1998) (quoting Wimm v. Jack Eckerd
Corp., 3 F.3d 137, 139 (5th Cir. 1993)). But "[t]he
court should freely give leave when justice so
requires." Fed.R.Civ.P. 15(a) (2) . A district court
must possess a "substantial reason" to deny a
request for leave to amend. Lyn-Lea Travel Corp. v.
American Airlines, Inc., 283 F.3d 282, 286 (5th Cir.
2002) (quoting Jamieson v. Shaw, 772 F.2d 1205, 1208
(5th Cir. 1985)). The Supreme Court has provided five
considerations to determine whether to grant a party leave to
amend a complaint: (1) undue delay, (2) bad faith or dilatory
motive, (3) repeated failure to cure deficiencies by previous
amendments, (4) undue prejudice to the opposing party, and
(5) futility of the amendment. Rosenzweig v. Azurix
Corp., 332 F.3d 854, 864 (5th Cir. 2003) (citing
Foman v. Davis, 83 S.Ct. 227, 230 (1962)). If a
proposed amendment could not survive a Rule 12(b)(6) motion
to dismiss, amendment would be futile. See Briggs v.
Mississippi, 331 F.3d 499, 508 (5th Cir. 2003) (citing
Lewis v. Fresne, 252 F.3d 352, 360 n.7 (5th Cir.
Common Law Fraud Claim
Texas law the elements of a common law fraud claim are:
(1) that a material representation was made; (2) the
representation was false; (3) when the representation was
made, the speaker knew it was false or made it recklessly
without any knowledge of the truth and as a positive
assertion; (4) the speaker made the representation with the
intent that the other party should act upon it; (5) the party
acted in reliance on the representation; and (6) the party
thereby suffered injury.
In re FirstMerit Bank, N.A., 52 S.W.3d 749, 758
(Tex. 2001) (citing Formosa Plastics Corp. v. Presidio
Engineers & Contractors, Inc., 960 S.W.2d 41, 47
(Tex. 1998)). When pleading fraud in a federal complaint,
"a party must state with particularity the circumstances
constituting fraud." Fed.R.Civ.P. 9(b).
proposed Amended Petition fails to support a claim for common
law fraud. Neither Plaintiffs' claim itself, which merely
lists the elements of common law fraud, nor the facts alleged
support an action for fraud. As a preliminary matter the
court notes that Plaintiffs attribute the alleged fraud
variously to U.S. Bank, MWZM, and Ocwen, making more
difficult the ...