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Schweiger v. USAA Federal Savings Bank

United States District Court, W.D. Texas, San Antonio Division

December 8, 2017




         Before the Court is Defendant USAA Federal Savings Bank's Motion to Dismiss for failure to state a claim for relief pursuant to Rule 12(b)(6) (docket no. 8). For the reasons explained below, Defendant's motion is GRANTED in part, DENIED in part, and deemed MOOT in part.


         The dispute concerns an alleged settlement agreement (the "Agreement") between Plaintiff Nico Schweiger ("Plaintiff), Plaintiffs debt relief company ("NDR"), Defendant USAA Federal Savings Bank ("USAA"), and USAA's debt collector, Defendant Alltran Financial, LP ("Alltran"). The alleged Agreement, which was sent from Alltran to NDR on October 11, 2016, states:

[USAA] has agreed to accept the offer of 12 payment(s) totaling $4, 112.00 as settlement for monies owing on [Plaintiffs] above referenced account. Please make [NDR's] or [Plaintiffs] check or money order payable to [USAA]. The terms of the agreement are:
[Chart listing required payment dates and corresponding payment amounts]

         This settlement offer is void if the agreed payments are not made as stated above. Docket no. 1-2. Following entry of the Agreement, Plaintiff alleges that he timely made the first two requisite settlement payments by placing the funds in a trust account for Defendants' withdrawal and processing. Docket no. 1 ¶¶ 13-15. However, Plaintiff alleges that the payments were never withdrawn or processed from the account. Id. Plaintiff further alleges that Defendants notified Plaintiff that the account had been recalled and that the Agreement would not be honored. Id. ¶¶ 16-17.

         Plaintiff filed this action on July 20, 2017 alleging Defendants breached the Agreement regarding the repayment of Plaintiffs debt. Docket no. 1. Plaintiff asserts claims for (i) violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1962, (ii) breach of contract, (iii) breach of the implied covenant of good faith and fair dealing, and (iv) violations of the Texas Fair Debt Collection Practices Act ("TDCPA"), Tex. Fin. Code Ann. § 392, et seq.

         Defendant USAA has moved to dismiss each of Plaintiffs claims pursuant to Fed.R.Civ.P. 12(b)(6), arguing in part, that the Agreement was "void" because Plaintiff did not make his payments by check or money order as stated in the Agreement. Docket no. 8 at 1, 4-5.


         Under Federal Rule of Civil Procedure 8(a), a complaint is considered well pled if it contains "a short and plain statement of the claim showing that the pleader is entitled to relief. Fed.R.Civ.P. 8(a) is considered in conjunction with Fed.R.Civ.P. 12(b)(6), which provides that a complaint may be dismissed if it "fails to state a claim upon which relief can be granted". Courts apply these rules through the two-part process outlined by the Supreme Court in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009).

         Dismissal is appropriate under Fed. R Civ. P. 12(b)(6) if, assuming the truth of all facts alleged in the complaint, it fails to state a "claim to relief that is plausible on its face". Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting BellAtl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In order to state a plausible claim to relief, the complaint must include "allegations respecting all the material elements necessary to sustain recovery under some viable legal theory". Twombly, 550 U.S. at 562 (quoting Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (7th Cir. 1984)). Those allegations may be "either direct or inferential". Id. In applying Rule 12(b)(6), the Court must distinguish between pleadings of fact, which are presumed as true, and statements of legal conclusion, which are not entitled to the presumption of truth. Iqbal, 556 U.S. at 679. "A plaintiffs 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 (quoting Papasan v. Allain, 478 U.S. 265 (1986)). Throughout the Rule 12(b)(6) analysis, "[t]he complaint must be liberally construed, with all reasonable inferences drawn in the light most favorable to the plaintiff." Morgan v. Swanson, 659 F.3d 359, 370 n.17 (5th Cir. 2011) (en banc) (quoting Woodard v. Andrus, 419 F.3d 348, 351 (5th Cir. 2005)). As a general rule, the Court is limited to considering the contents of the pleadings and the attachments thereto when analyzing a motion to dismiss under Rule 12(b)(6). Fed.R.Civ.P. 12(b)(6); Villarreal v. Wells Fargo Bank, N.A., 814 F.3d 763, 766 (5th Cir. 2016).


         Defendant USAA moves to dismiss each of the four counts in Plaintiffs Complaint. The Court will address each count in turn.

         I. Choice of Law

         As a threshold matter, the Court must decide the substantive law that will be applied to the analysis of Plaintiff s breach of contract and implied covenant of good faith and fair dealing claims.[1] The parties did not brief the choice-of-law issue, however, USAA cited Texas substantive law in its motion to dismiss. Plaintiff did not cite the legal authority of any state in his response.

         A court exercising jurisdiction supplemental to its federal question jurisdiction (under 28 U.S.C. § 1367) applies the choice of law rules of the forum state. Kira, Inc. v. All Star Maint., A-03-CA-950 LY, 2006 WL 2193006, at *5 (W.D. Tex. July 31, 2006); In re Combustion, Inc., 960 F.Supp. 1056, 1059 (W.D. La. 1997). When determining which state's contract law to apply in the absence of a valid choice-of-law provision, Texas courts use the "most significant relationship" choice-of-law analysis outlined in the Restatement (Second) of Conflict of Laws. R.R. Mgmt. Co., L.L.C v. CFSLa. Midstream Co., 428 F.3d 214, 222 (5th Cir. 2005); Kira, Inc., 2006 WL 2193006, at *5; Nunez v. Hunter Fan Co., 920 F.Supp. 716, 718 (S.D. Tex. 1996). Factors used to determine the law that applies include: (a) the place of contracting; (b) the place of negotiation of the contract; (c) the place of performance; (d) the location of the subject matter of the contract; and (e) the domicile, residence, nationality, place of incorporation, and place of business of the parties. Nunez, 920 F.Supp. at 718-19 (citing Restatement (Second) of Conflict of Laws § 188). The factors are "to be evaluated according to their relative importance with respect to the particular issue". Id; see also Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 421 (Tex. 1984) (stating that "the number of contacts with a particular state is not determinative" and "[s]ome contacts are more important than others").

         Here, the Agreement contains no choice-of-law provision. USAA and Alltran have their principal places of business in Texas, whereas Plaintiff is a California resident. Docket no. 1 ¶¶ 3-5. Plaintiffs debt relief company has a New York address (see docket no. 1-2), and Plaintiffs trust account, from which payments were attempted, appears to be managed from Oklahoma (see docket no. 1-2). The record does not reflect the place of negotiation of the Agreement or the location where Plaintiff incurred his debt. However, the Agreement calls for performance to be made via payments to USAA, presumably to its principal place of business in Texas. Accordingly, after evaluating the contacts according to their ...

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