United States District Court, S.D. Texas, Houston Division
MEMORANDUM OPINION AND ORDER
LAKE, UNITED STATES DISTRICT JUDGE
before the court is Defendant's Motion to Dismiss and
Brief in Support ("Motion to Dismiss") (Docket
Entry No. 23). Although the motion was filed on April 11,
2017, Plaintiffs, Roger Law and Lucindra Law, have not
responded to it. For the reasons explained below, Ocwen Loan
Servicing's ("Ocwen") Motion to Dismiss will be
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 counsel,
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 allegedly
represented again 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 moved to amend their Original
Petition to allege a claim for common law fraud and to seek
additional remedies, which the court granted in part and
denied in part.Ocwen now moves to dismiss for failure to
state a claim.
Standard of Review
12(b)(6) motion tests the formal sufficiency of the pleadings
and is "appropriate when a defendant attacks the
complaint because it fails to state a legally cognizable
claim." Ramming v. United States, 281 F.3d 158,
161 (5th Cir. 2001), cert. denied sub nom. Cloud v.
United States, 122 S.Ct. 2665 (2002). To defeat a motion
to dismiss, a plaintiff must plead "enough facts to
state a claim to relief that is plausible on its face."
Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1974
(2007). The court generally is not to look beyond the
pleadings in deciding a motion to dismiss. Spivey v.
Robertson, 197 F.3d 772, 774 (5th Cir. 1999).
"Pleadings" for purposes of a Rule 12(b)(6) motion
include the complaint, its attachments, and documents that
are referred to in the complaint and central to the
plaintiff's claims. Collins v. Morgan Stanley Dean
Witter, 224 F.3d 496, 498-99 (5th Cir. 2000). The court
does not "strain to find inferences favorable to the
plaintiffs" or "accept conclusory allegations,
unwarranted deductions, or legal conclusions."
Southland Securities Corp. v. INSpire Ins. Solutions,
Inc., 365 F.3d 353, 361 (5th Cir. 2004) (internal
quotation marks and citations omitted). "[C]ourts are
required to dismiss, pursuant to [Rule 12(b) (6)], claims
based on invalid legal theories, even though they may be
otherwise well-pleaded." Flynn v. State Farm Fire
and Casualty Insurance Co. (Texas), 605 F.Supp.2d 811,
820 (W.D. Tex. 2009) (citing Neitzke v. Williams,
109 S.Ct. 1827, 1832 (1989)).
preliminary matter, it is not clear from Plaintiffs'
pleadings exactly which alleged misrepresentations were made
by whom. Plaintiffs allege that "attorneys
from MWZM, upon Ocwen's instruction, presented
sworn evidence and represented to the Court that U.S. Bank
owned the property in question." Plaintiffs then allege that
counsel from MWZM were "the Bank's
lawyers."Elsewhere in the pleadings Plaintiffs
allege that "Defendants Ocwen and MWZM in the course of
the foreclosure action and subsequent eviction proceeding
made [sic] and represented to the Plaintiffs and to the
courts that they were in fact the party in interest
respectively when in fact they no longer owned the
property." For the purposes of Defendant's 12(b)
(6) motion, and for the benefit of Plaintiffs, the court will
assume that the alleged misrepresentations are ultimately
attributable to Ocwen. But Plaintiffs are far from clear on
misrepresentation cases typically arise from representations
or evaluations made in a transactional context. See
McCamish, Martin, Brown & Loeffler v. F.E. Appling
Interests, 991 S.W.2d 787, 793 (Tex. 1999).
The elements of a cause of action for the breach of this duty
are: (1) the representation is made by a defendant in the
course of his business, or in a transaction in which he has a
pecuniary interest; (2) the defendant supplies "false
information" for the guidance of others in their
business; (3) the defendant did not exercise reasonable care
or competence in obtaining or communicating the information;