United States District Court, N.D. Texas, Dallas Division
BARBARA A. ADAMS, Plaintiff,
U.S. BANK, N.A. and GUILD MORTGAGE CO., Defendants.
FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE
UNITED STATES MAGISTRATE JUDGE
L. HORAN UNITED STATES MAGISTRATE JUDGE
case has been referred to the undersigned United States
magistrate judge for pretrial management under 28 U.S.C.
§ 636(b) and a standing order of reference from United
States District Judge Jane J. Boyle. See Dkt. No.
U.S. Bank National Association (“U.S. Bank”) has
filed a Motion to Dismiss. See Dkt. No. 55.
Plaintiff Barbara Adams filed a response, see Dkt.
No. 58, and Defendant U.S. Bank filed a reply, see
Dkt. No. 59.
reasons and to the extent explained below, the Court should
grant Defendant U.S. Bank's Motion to Dismiss [Dkt. No.
undersigned discussed much of the relevant background in the
Findings, Conclusions, and Recommendation dated December 4,
2017, which recommended granting U.S. Bank's previous
motion to dismiss, see Dkt. No. 46, and will repeat
only the pertinent facts here.
about October 4, 2012, Ms. Adams purchased a home in Desoto,
Texas (the “Property”). She signed a promissory
note (the “Note”) to finance the purchase. And
she secured the Note through a Deed of Trust pledging her
interest in the Property as security (the “Deed of
Mortgage Company (“Guild”) initially held the
Note and Deed of Trust (collectively, the
“Loan”). But Guild either assigned the Loan to
U.S. Bank or selected U.S. Bank as the mortgage servicer.
Adams filed this lawsuit against U.S. Bank and other
defendants on August 1, 2016, claiming that U.S. Bank
violated the Texas Property Code (the “Property
Code”), violated the Texas Debt Collection Act (the
“TDCA”), and breached the Deed of Trust contract.
August 3, 2017, U.S. Bank filed a motion to dismiss Ms.
Adams's State Court Petition. See Dkt. No. 34.
The undersigned recommended granting the motion, see
Dkt. No. 46, and, on January 3, 2018, the Court dismissed Ms.
Adams's Property Code claims with prejudice but allowed
Ms. Adams twenty-one days in which to replead her TDCA and
breach of contract claims and requests for equitable relief,
see Dkt. No. 50.
January 24, 2018, Ms. Adams filed her Second Amended
Complaint, which restates almost the exact claims against
U.S. Bank under the TDCA and for breach of contract.
See Dkt. No. 53.
Adams contends in her Second Amended Complaint that U.S. Bank
violated the TDCA when it (1) threatened to foreclose
despite, having violated the Property Code, being prohibited
from doing so; (2) used deceptive practices and made
misrepresentations to Ms. Adams in servicing the Loan; (3)
demanded payment from Ms. Adams over what the Loan permitted;
and (4) wrongfully posted invalid notices of trustee sales.
Ms. Adams maintains that U.S. Bank's alleged statutory
violations above constitute a breach of the Deed of Trust
these bases - as well as the other allegations that she
proffers against other defendants - Ms. Adams seeks
injunctive relief to preclude the foreclosure sale of the
Property, declaratory relief, monetary damages, and other
forms of relief.
January 26, 2018, U.S. Bank filed the Motion to Dismiss Ms.
Adams's Second Amended Complaint (the “Second
MTD”) that is now before the Court. See Dkt.
No. 55. In its Second MTD, U.S. Bank contends that all of Ms.
Adams's claims against it should be dismissed for many of
the same reasons advanced in U.S. Bank's previous motion
Ms. Adams's TDCA claims, U.S. Bank contends that Ms.
Adams's Second Amended Complaint states insufficient
facts to properly plead her claims and that Ms. Adams has not
suffered any actual damages as required to state a claim
under the TDCA.
Bank argues that Ms. Adams's breach of contract claim
fails because Ms. Adams has not adequately pleaded that (1)
Ms. Adams performed under the Deed of Trust; (2) U.S. Bank
breached the Deed of Trust; and (3) Ms. Adams suffered
damages caused by U.S. Bank's alleged breach.
U.S. Bank asserts that, because Ms. Adams's underlying
TDCA and breach of contract claims fail, Ms. Adams cannot
maintain her requests for declaratory and injunctive relief.
deciding a Federal Rule of Civil Procedure 12(b)(6) motion,
the Court must “accept all well-pleaded facts as true,
viewing them in the light most favorable to the
plaintiff.” In re Katrina Canal Breaches
Litig., 495 F.3d 191, 205-06 (5th Cir. 2007). To state a
claim upon which relief may be granted, the plaintiff must
plead “enough facts to state a claim to relief that is
plausible on its face, ” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007), and must plead those
facts with enough specificity “to raise a right to
relief above the speculative level.” Id. at
555. “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). “The plausibility
standard is not akin to a ‘probability requirement,
' but it asks for more than a sheer possibility that a
defendant has acted unlawfully.” Id. “A
claim for relief is implausible on its face when ‘the
well-pleaded facts do not permit the court to infer more than
the mere possibility of misconduct.'” Harold H.
Huggins Realty, Inc. v. FNC, Inc., 634 F.3d 787, 796
(5th Cir. 2011) (quoting Iqbal, 556 U.S. at 679).
under Federal Rule of Civil Procedure 8(a)(2), a complaint
need not contain detailed factual allegations, a plaintiff
must allege more than labels and conclusions, and, while a
court must accept all of the plaintiff's allegations as
true, it is “not bound to accept as true a legal
conclusion couched as a factual allegation.”
Iqbal, 556 U.S. at 678 (quoting Twombly,
550 U.S. at 555). A threadbare or formulaic recitation of the
elements of a cause of action, supported by mere conclusory
statements, will not suffice. See id. But, “to
survive a motion to dismiss” under Twombly and
Iqbal, a plaintiff need only “plead facts
sufficient to show” that the claims asserted have
“substantive plausibility” by stating
“simply, concisely, and directly events” that the
plaintiff contends entitle him or her to relief. Johnson
v. City of Shelby, Miss., 135 S.Ct. 346, 347 (2014) (per
curiam) (citing Fed.R.Civ.P. 8(a)(2)-(3), (d)(1), (e));
accord N. Cypress Med. Ctr. Operating Co. v. Cigna
Healthcare, 781 F.3d 182, 191 (5th Cir. 2015) (“To
survive a Rule 12(b)(6) motion to dismiss, the complaint does
not need detailed factual allegations, but it must provide
the plaintiff's grounds for entitlement to relief -
including factual allegations that, when assumed to be true,
raise a right to relief above the speculative level.”
(footnote and internal quotation marks omitted)).
United States “Supreme Court has made clear that a Rule
12(b)(6) motion turns on the sufficiency of the
‘factual allegations' in the complaint.”
Smith v. Bank of Am., N.A., 615 Fed.Appx. 830, 833
(5th Cir. 2015) (quoting Johnson, 135 S.Ct. at 347),
and the Federal Rules of Civil Procedure “do not
countenance dismissal of a complaint for imperfect statement
of the legal theory supporting the claim asserted, ”
Johnson, 135 S.Ct. at 346.
cannot look beyond the pleadings in deciding a Rule 12(b)(6)
motion. Spivey v. Robertson, 197 F.3d 772, 774 (5th
Cir. 1999). Pleadings in the Rule 12(b)(6) context include
attachments to the complaint. In re Katrina Canal
Breaches Litig., 495 F.3d at 205. Documents
“attache[d] to a motion to dismiss are considered to be
part of the pleadings, if they are referred to in the
plaintiff's complaint and are central to her
claim.” Collins v. Morgan Stanley Dean Witter,
224 F.3d 496, 498-99 (5th Cir. 2000) (quoting Venture
Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429,
431 (7th Cir. 1993)). “Although the [United States
Court of Appeals for the] Fifth Circuit has not articulated a
test for determining when a document is central to a
plaintiff's claims, the case law suggests that documents
are central when they are necessary to establish an element
of one of the plaintiff's claims. Thus, when a
plaintiff's claim is based on the terms of a contract,
the documents constituting the contract are central to the
plaintiff's claim.” Kaye v. Lone Star Fund V
(U.S.), L.P., 453 B.R. 645, 662 (N.D. Tex. 2011). But,
“if a document referenced in the plaintiff's
complaint is merely evidence of an element of the
plaintiff's claim, then the court may not incorporate it
into the complaint.” Id.
addition, “it is clearly proper in deciding a 12(b)(6)
motion to take judicial notice of matters of public
record.” Norris v. Hearst Trust, 500 F.3d 454,
461 n.9 (5th Cir. 2007); accord Tellabs, Inc. v. Makor
Issues & Rights, Ltd., 551 U.S. 308, 322 (2008)
(directing courts to “consider the complaint in its
entirety, as well as other sources courts ordinarily examine
when ruling on Rule 12(b)(6) motions to dismiss, in
particular, documents incorporated into the complaint by
reference, and matters of which a court may take judicial
notice”). And “[t]here is nothing improper about
the district court considering the content of briefing that
supports or opposes a motion under Rule 12(b)(6) when
deciding such a motion” - although “[w]hen
matters outside the pleadings are presented to the court in
connection with a motion under Rule 12(b)(6), the motion must
be treated as a Rule 56 motion for summary judgment and
appropriate notice given to the parties.” Turnage
v. McConnell Techns., Inc., 671 Fed.Appx. 307, 309 (5th
Cir. Dec. 12, 2016). The Fifth Circuit has held “that
briefs and oral arguments in connection with the motion ...
are not considered matters outside the pleadings for purposes
of conversion.” Id. (internal quotation marks
and citations omitted).
Bank argues that all of Ms. Adams's claims against it
should be dismissed. For the reasons explained below, the
undersigned concludes that Ms. Adams has failed to state a
claim under the TDCA, for breach of contract, and for
declaratory and injunctive relief and that Ms. Adams's
claims against U.S. Bank should be dismissed. The undersigned
will address U.S. Bank's arguments in turn and, in doing
so, because U.S. Bank attached the Deed of Trust to its
Second MTD and the Deed of Trust is central to Ms.
Adams's claims, will consider the Deed of Trust as part
of the pleadings. See Dkt. No. 56-1.
Ms. Adams's breach of contract claim should be
Adams does not adequately plead the damages element of her
breach of contract claim.
Second Amended Complaint, Ms. Adams alleges that U.S. Bank
breached the Deed of Trust because, by allegedly failing to
give proper foreclosure notice under the Property Code, U.S.
Bank breached the express terms of the Deed of Trust
contract. The undersigned previously considered Ms.
Adams's nearly identical breach of contract claim pleaded
in her State Court Petition, see Dkt. No. 46, and
repeats the pertinent analysis here.
succeed on a breach of contract claim under Texas law, a
plaintiff must show “(1) the existence of a valid
contract; (2) performance or tendered performance by the
plaintiff; (3) breach of contract by the defendant; and (4)
damages sustained by the plaintiff as a result of the
breach.” Sport Supply Grp., Inc. v. Columbia Cas.
Co., 335 F.3d 453, 465 (5th Cir. 2003); accord
Richardson v. Wells Fargo Bank, N.A., 873 F.Supp.2d 800,
809 (N.D. Tex. 2012). U.S. Bank maintains that Ms. Adams has
not pleaded facts to satisfy the performance, breach, and
damages elements of her breach of contract claim.
U.S. Bank argues that, because Ms. Adams defaulted on the
Loan, she cannot establish the performance element of her
breach of contract claim. But, in the time that has passed
since the undersigned considered U.S. Bank's previous
motion to dismiss in which U.S. Bank made an identical
argument, the Fifth Circuit has held that a borrower's
obligation to make monthly payments is independent of a
lender's obligations in the event of default. See
Williams v. Wells Fargo Bank, N.A., 884 F.3d 239, 245
(5th Cir. 2018) (reasoning that “[i]f performance of
the terms of a deed of trust governing the parties'
rights and obligations in the event of default can always be
excused by pointing to the debtor's default under the
terms of the note, the notice terms have no meaning”).
And, because, here, Ms. Adams alleges that U.S. Bank violated
the Deed of Trust by failing to uphold its post-default
notice obligations under the Deed of Trust, see Dkt.
No. 53 at 9-10 of 17, Ms. Adams's defaulting on the Loan,
alone, does not preclude her breach of contract claim.
U.S. Bank argues that Ms. Adams cannot establish the breach
element of her claim because neither the Deed of Trust nor
Texas law requires Ms. Adams to receive any notices for such
notices to be effective.
to Ms. Adams's Second Amended Complaint, “Defendant
[U.S. Bank], by violating the Texas Property Code, breached
the express terms of the Deed of Trust contract, which
contract requires compliance with all applicable law.”
Dkt. No. 53 at ¶ 31; see also Dkt. No. 56-1 at
¶ 18 (“Lender ...