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Schumacher v. Wells Fargo Bank, N.A.

United States District Court, W.D. Texas, Austin Division

September 20, 2017

PAT SCHUMACHER, Plaintiff,
v.
WELLS FARGO BANK, N.A., Defendant.

          ORDER

          SAM SPARKS UNITED STATES DISTRICT JUDGE.

         BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause, and specifically Defendant Wells Fargo Bank, N.A. (Wells Fargo)'s Motion to Dismiss [#5], Plaintiff Pat Schumacher (Plaintiff)'s Motion to Cure a Defective Pleading [#11], Wells Fargo's Response [#13] in opposition, Plaintiffs Request for Review [#12], and Wells Fargo's Response [#14] in opposition.[1] Having considered the aforementioned documents, the case file as a whole, and the applicable law, the Court enters the following opinion and order.

         Background

         This case concerns real property located at 7701 Old Lockhart Highway, Buda, Texas, 78610 (the Property). Notice of Filing Suppl. [#4-1] Ex. A (State Court File) at 4-6. Plaintiff purchased the Property in 2002 with a $117, 000.00 note (Note) to Mortgage Outlet, Inc. d/b/a the Money Outlet (Money Outlet) and executed a Deed of Trust in favor of Money Outlet (Deed of Trust) as security for the Note (collectively, the Mortgage). Id. at 4.

         In October 2015, the Property suffered damage from a thunderstorm. Id. Plaintiff contends "[d]espite [Plaintiff] having paid for force-placed insurance, the Property was not repaired by Wells Fargo or the insurance company."[2] Id. Because the Property was only partially inhabitable, Plaintiff stopped making payments on the Mortgage. Id. at 4-5. Plaintiff alleges Wells Fargo is now attempting to foreclose on the Property. Id. at 5.

         On April 26, 2017, Plaintiff filed the current lawsuit against Wells Fargo in Texas state court. Id. at 3. Wells Fargo subsequently removed the case to this Court. Notice Removal [#1]. Plaintiff asserts a single cause of action: breach of contract. State Court File at 5. In particular, Plaintiff claims she "had a valid contract with the insurance company which was provided by Wells Fargo" and "Wells Fargo breached the insurance contract by not paying for the covered damage." Id. In response to Plaintiffs allegations and before this case was removed, the state court issued an ex parte temporary restraining order preventing foreclosure on May 1, 2017. Id. at 10.

         Before filing this suit, Plaintiff previously filed another lawsuit in Texas state court concerning the Mortgage (Lawsuit I), attempting to prevent foreclosure on the Property. See Mot. Dismiss [#5-1] (Lawsuit I R.). In Lawsuit I, Plaintiff sued Wells Fargo, alleging Wells Fargo breached "the insurance contract by not paying for the covered damage" to the Property, which occurred as a result of a thunderstorm in October 2015. Id. at 2-3. Following Plaintiffs notice of nonsuit in Lawsuit I, the state court dismissed Lawsuit I with prejudice on August 5, 2016. Id. at 7.

         Presently, Wells Fargo moves to dismiss this case for failure to state a claim in light of the result in Lawsuit I. Wells Fargo argues res judicata bars re-litigation of Plaintiffs claims. In response, Plaintiff seeks to supplement her complaint. See Mot. Cure [#11]. Plaintiff also asks this Court to modify the state court order dismissing Lawsuit I with prejudice. See Req. Review [#12].

         Analysis

         I. Legal Standard

         Federal Rule of Civil Procedure 8(a)(2) requires a complaint to 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 motion under Federal Rule of Civil Procedure 12(b)(6) asks a court to dismiss a complaint for "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). To survive a motion to dismiss, the plaintiff must plead sufficient facts to state a claim for relief that is facially plausible. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atl. Corp. v. Twombly, 550U.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." Iqbal, 566 U.S. at 678. Although a plaintiffs factual allegations need not establish that the defendant is probably liable, they must establish more than a "sheer possibility" a defendant has acted unlawfully. Id. Determining plausibility is a "context-specific task, " and must be performed in light of a court's "judicial experience and common sense." Id. at 679.

         In deciding a motion to dismiss under Rule 12(b)(6), a court generally accepts as true all factual allegations contained within the complaint. Leatherman v. Tarrant Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 164 (1993). However, a court is not bound to accept legal conclusions couched as factual allegations. Papasan v. Allain, 478 U.S. 265, 286 (1986). Although all reasonable inferences will be resolved in favor of the plaintiff, the plaintiff must plead "specific facts, not mere conclusory allegations." Tuchman v. DSC Commc'ns Corp., 14F.3d 1061, 1067 (5th Cir. 1994). In deciding a motion to dismiss, courts "must consider" the complaint, as well as other sources such as documents incorporated into the complaint by reference and matters of which a court may take judicial notice. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007).

         II. Application

         "Under res judicata, a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action." Oreck Direct, LLC v. Dyson, Inc., 560 F.3d 398, 401 (5th Cir. 2009) (quoting Allen v. McCurry,449 U.S. 90, 94 (1980)). Four elements must be met for a claim to be barred by res judicata: "(1) the parties must be identical in the two actions; (2) the prior judgment must have been rendered by a court of competent jurisdiction; (3) there must be a final judgment on the merits; and (4) the same claim or cause of action must be involved in both cases." Id. (quoting In re Ark-La-Tex Timber Co.,482 F.3d 319, 330 (5th Cir. 2007)). Because res judicata is an affirmative defense, ...


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