United States District Court, S.D. Texas, Houston Division
Rohollah R. Seddiq, Plaintiff,
Federal National Mortgage Association, Defendant.
H. MILLER UNITED STATES DISTRICT JUDGE.
before the court is the defendant Federal National Mortgage
Association's (“Fannie Mae”) motion to
dismiss (Dkt. 5) a suit filed by plaintiff Rohollah Seddiq.
Having considered the motion, responses, reply, and
applicable law, the court finds that Fannie Mae's motion
to dismiss should be GRANTED IN PART and DENIED IN PART.
case relates to the refinancing of a property located at
23102 North Waterlily Drive, Richmond, Fort Bend County,
Texas 77406 (the “Property”). Dkt. 1, Ex. 1 at 9.
On September 20, 2017, Seddiq filed suit against Fannie Mae
in the 268th Judicial District Court in Fort Bend County,
Texas. Dkt. 1 at 1. Seddiq asserts that he executed a Texas
Home Equity Note and a Home Equity Security Agreement
(“Deed of Trust” or “DOT”) on August
29, 2012, with Nations Reliable Lending, L.L.C.
(“Lender”). Id. Ex. 1 at 9. Further,
Seddiq asserts that he has complied with his obligations
under the DOT and that he is current on his mortgage
payments. Id. The DOT specifies that the parties
expressly intend to conform to Article XVI, Section
50(a)(6)(E) of the Texas Constitution. Id.
to Seddiq's original complaint, Lender, and Fannie Mae as
Lender's successor in interest, violated Section
50(a)(6)(E) by charging Seddiq more than the constitutional
limit on home equity loan fees-3 percent of the loan
principle. Dkt. 1, Ex. 1 at 10. Seddiq alleges he was
required to pay $5, 231.39. Dkt. 1, Ex. 1 at 10. Fannie Mae
asserts Seddiq was only required to pay $2, 893.74. Dkt. 5 at
6. Seddiq claims that he sent a Notice to Cure the violations
to Fannie Mae on April 20, 2016, and that as of the filing
date Fannie Mae had failed to cure the violations.
Id. Seddiq also alleges that Fannie Mae breached its
contract by breaching its obligations under the DOT.
Id. at 11. Seddiq requests remedies of quiet title,
declaratory judgment, a permanent injunction, and
attorney's fees. Id. at 13-16.
November 10, 2016, Fannie Mae removed the case to this court
on the basis of diversity jurisdiction under 28 U.S.C. §
1332. Dkt. 1. On November 17, 2016, Fannie Mae filed a motion
to dismiss. Dkt. 5. On December 8, 2016, Seddiq filed a
response to Fannie Mae's motion. Dkt. 13. On December 14,
2016, Seddiq filed a supplemental response. Dkt. 15. On
December 23, 2016, Fannie Mae filed its reply. Dkt. 16.
Rule of Civil Procedure 8(a)(2) requires only ‘a short
and plain statement of the claim showing that the pleader is
entitled to relief.'” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555127 S.Ct. 1955 (2007) (quoting
Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99
(1957)). In considering a Rule 12(b)(6) motion to dismiss a
complaint, courts generally must accept the factual
allegations contained in the complaint as true. Kaiser
Aluminum & Chem. Sales, Inc. v. Avondale Shipyards,
Inc., 677 F.2d 1045, 1050 (5th Cir. 1982). The court
does not look beyond the face of the pleadings in determining
whether the plaintiff has stated a claim under Rule 12(b)(6).
Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir.
complaint attacked by a Rule 12(b)(6) motion to dismiss does
not need detailed factual allegations, [but] a
plaintiff's obligation to provide the ‘grounds'
of his ‘entitle[ment] to relief' requires more than
labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do.”
Twombly, 550 U.S. at 555 (citations omitted). The
“[f]actual allegations must be enough to raise a right
to relief above the speculative level.” Id.
The supporting facts must be plausible-enough to raise a
reasonable expectation that discovery will reveal further
supporting evidence. Id. at 556.
Mae seeks dismissal of Seddiq's claims for constitutional
violations and breach of contract in addition to Seddiq's
requests for quiet title, declaratory judgment, injunctive
relief, and attorney's fees. Dkt. 5. The court will
address the causes of action and the requests for relief in
The Three Percent Rule
contends that Fannie Mae violated the Texas Constitution by
charging fees exceeding the three percent cap. Dkt. 1, Ex. 1
at 10. Under the Texas Constitution a home equity loan must:
not require the owner or owner's spouse to pay, in
addition to any interest, fees to any person that are
necessary to originate, evaluate, maintain, record, insure,
or service the extension of credit that exceed, in the
aggregate, three percent ...