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John v. JPMorgan Chase Bank, N.A.

United States District Court, S.D. Texas, Galveston Division

June 20, 2017

ALEX JOHN JR., Plaintiffs,
v.
JPMORGAN CHASE BANK, N.A., Defendant.

          MEMORANDUM OPINION AND ORDER

          George C. Hanks, Jr. United States District Judge.

         Before the Court is Defendant JPMorgan Chase Bank, N.A.'s Motion to Dismiss Plaintiffs' First Amended Complaint. Dkt. 17. Based on the pleadings; the motion, response, and reply; the applicable law; and the arguments of counsel, the motion to dismiss is granted. The reasons for the ruling are explained below.

         Background

         Alex John, Jr. and Diana H. Mahannah John (together, "John") are owners of the real property and improvements located at 3019 Sea Pines Place, League City, Texas 77573 (the "Property"). In 2007, John executed a Home Equity Loan, Promissory Note, and Homestead Lien (together, the "Lien") with lender JPMorgan Chase Bank, N.A. ("Chase"). John alleges that after encountering financial difficulties, he entered into debt restructuring negotiations with Chase. According to John, Chase offered a loan modification in March 2016 that required John to submit multiple documents. John alleges that in the course of this modification agreement, Chase: (1) verbally instructed him to cease making mortgage payments; and (2) promised to take no foreclosure action while in loan modification status.

         John then received notice of foreclosure sale. In response, he contacted Chase and requested written proof that the sale had been canceled pursuant to the loan modification. According to John, a Chase representative promised to follow up on this request and failed to do so. John sued Chase in the 10th Judicial District Court of Galveston County, Texas. John's Petition for wrongful foreclosure asserted the following causes of action: (1) anticipatory breach of contract; (2) common law fraud; and (3) promissory estoppel. The court entered a Temporary Restraining Order and Order Setting Hearing for Temporary Injunction.

         Prior to the temporary injunction hearing, Chase timely removed the case to this Court. John filed a First Amended Complaint that asserted the same causes of action contained in the state court petition. Dkt. 11. Chase filed the instant motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Dkt. 17. John filed a Response. Dkt. 22. Chase filed a Reply. Dkt. 23.

         Standard of Review

         Pursuant to Rule 8 of the Federal Rules of Civil Procedure, a pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). A Rule 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, 536 U.S. 960 (2002).

         To defeat a motion to dismiss pursuant to Rule 12(b)(6), a plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Bell Ail. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). The court must accept the factual allegations of the complaint as true, view them in a light most favorable to the plaintiff, and draw all reasonable inferences in the plaintiffs favor. See Ramming, 281 F.3d at 161.

         Rule 12(b)(6) motions to dismiss are "viewed with disfavor and [are] rarely granted." Arnett v. Aetna Life Ins. Co., No. CV H-15-2723, 2016 WL 6883203, at *2 (S.D. Tex. Apr. 14, 2016) (citing Turner v. Pleasant, 663 F.3d 770, 775 (5th Cir. 2011)). A complaint need not address every potential affirmative defense to survive a motion to dismiss. Am. Surgical Assistants, Inc. v. Great W. Healthcare of Texas, Inc., No. CIV.A.H-09-0646, 2010 WL 565283, at *2 (S.D. Tex. Feb. 17, 2010) (citing Hall v. Hodgkins, 305 F.App'x 224, 228 n.l (5th Cir.2008)). However, "[a]n exception to this rule may apply if the plaintiff has alleged facts plainly indicating that an affirmative defense does apply." Id. Further, "where facts alleged in Plaintiffs pleadings make clear that a claim is barred, dismissal under Rule 12(b) may be granted." In re Dynegy, Inc. Securities Litigation, 339 F.Supp.2d 804, 819 (S.D. Tex. 2004).

         Discussion

         A. Anticipatory Repudiation, Common Law Fraud Claims

Chase argues that the statute of frauds bars John's anticipatory repudiation and common law fraud claims. John argues that the loan modification agreement is separate from the Lien and therefore the statute of frauds does not apply. According to John:

[The loan modification agreement] is a totally separate agreement wherein Plaintiffs agreed to put forth the time and effort to prepare and submit a loan modification application, along with the supporting documents, and continue to exert the time and effort necessary in order to comply with Defendant's requests for further information (an affirmative act) in exchange for Defendant declining to take certain action (a negative act). This constitutes a separate stand-alone agreement in which there was a ...

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