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DeVoss v. JPmorgan Chase Bank, N.A.

United States District Court, N.D. Texas, Fort Worth Division

January 22, 2019




         Before the Court is Defendant JPMorgan Chase Bank, N.A.'s (“Chase”) Motion to Dismiss Plaintiffs' First Amended Complaint (ECF No. 22) and Brief in Support (ECF No. 23) filed on September 17, 2018. United States District Judge Reed O'Connor referred this case to the undersigned for pretrial management on August 20, 2018. (ECF No. 11). After considering the pleadings and applicable law, the undersigned RECOMMENDS that Judge O'Connor GRANT Defendant's Motion to Dismiss (ECF No. 22) and DISMISS Plaintiffs' claims against Chase with prejudice.


         Plaintiffs John R. and Michelle A. DeVoss (“Plaintiffs”) sued Defendants JPMorgan Chase Bank, N.A. (“Chase”) and Bank of America, N.A. in their original state court petition for damages allegedly resulting from breach of contract, violations of the Texas Debt Collection Act (“TDCA”) and Texas Deceptive Trade Practices Act (“DTPA”), and for wrongful foreclosure. (ECF No. 1-1). They also requested injunctive relief to prevent Chase's foreclosure concerning Plaintiffs' property located at 921 Double Springs Lane, Keller, Texas 76248 (the “Property”). (Id.). On July 11, 2018, Chase timely removed the case to this Court on the basis of diversity jurisdiction. (ECF No. 1).

         Chase filed its first motion to dismiss on July 25, 2018. (ECF No. 5). After the Court granted Plaintiffs an extension to respond, they filed a Motion for Leave of Court to File First Amended Original Complaint (“FAC”) on August 22, 2018, (ECF No. 12), which the Court granted on August 31, 2018, (ECF No. 20). Accordingly, Plaintiffs' live pleading is their FAC (ECF No. 21).

         Plaintiffs initially purchased the Property in June 2002. (Id. at3 4). In connection with the purchase, they executed a note in the principal amount of $518, 500 and a deed of trust that granted a security interest in the Property to secure repayment of the note in favor of Chase. (Id.). Sometime in 2012, Plaintiffs fell behind in repaying the loan and then requested a loan modification from Chase. (Id. at 4). Attached to Plaintiffs' FAC is the loan modification agreement entitled “Home Affordable Modification Agreement” (“Modification Agreement”) signed by both Plaintiffs on August 23, 2013 and by Chase on September 6, 2013. (Id. at 13-24). According to the Modification Agreement, the new principal balance, which included all unpaid and deferred interest, fees, escrow advances, but excluded late unpaid late charges, was $619, 948.43. (Id. at 15). Apparently though, issues concerning Plaintiffs' performance under the Modification Agreement arose because Chase sought a nonjudicial foreclosure sale of the Property, and Plaintiffs had requested another loan modification. (Id. at 4).

         Plaintiffs filed the current action, in part, to forestall Chase's foreclosure proceeding. (Id. at 4-5). Plaintiffs were successful in obtaining a temporary restraining order (“TRO”) in the state court, enjoining the foreclosure sale on July 2, 2018. (ECF No. 1-1 at 24-25). As already mentioned, Plaintiffs amended their complaint in response to Chase's first motion to dismiss. In their FAC, Plaintiffs allege facts to support (1) a breach of contract claim for Chase's alleged miscalculation of interest under the Modification Agreement, (2) a violation of Texas Property Code § 51.002 for Chase's alleged failure to provide Plaintiffs with proper notice of the foreclosure sale, (3) a statutory fraud claim for certain misrepresentations allegedly made by Chase before execution of the Modification Agreement, and (4) a violation of the TDCA for Chase allegedly “threatening to take action prohibited by law, namely, to take action . . . for non-judicial foreclosure . . . without providing the requisite notice[.]” (Id. at 5-9). Missing from the FAC are claims for wrongful foreclosure and for violation of the DTPA. Thus, those claims are no longer before the Court. McZeal v. Deutsche Bank Nat'l Tr. Co., 726 Fed.Appx. 968, 971 (5th Cir. 2018) (per curiam) (citing King v. Dogan, 31 F.3d 344, 346 (5th Cir. 1994) (per curiam) (“An amended complaint supersedes the original complaint and renders it of no legal effect unless the amended complaint specifically refers to and adopts or incorporates by reference the earlier pleading.”)).

         Chase filed the instant motion to dismiss Plaintiffs' FAC on September 17, 2018. (ECF No. 22). Plaintiffs timely filed their response with attachments that included the affidavit of Plaintiff John R. DeVoss concerning, among others, Plaintiffs' lack of notice of Chase's nonjudicial foreclosure of the Property and another copy of the Modification Agreement. (ECF No. 26). Chase timely replied. The motion is now ripe for decision.


         Rule 12(b)(6) of the Federal Rules of Civil Procedure permits a party to move for dismissal of a complaint for failure to state a claim upon which relief can be granted. The Rules require that each complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief . . . .” Fed.R.Civ.P. 8(a). A complaint must include sufficient factual allegations “to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In considering a Rule 12(b)(6) motion, courts “take all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff . . . and ask whether the pleadings contain ‘enough facts to state a claim to relief that is plausible on its face.'” Yumilicious Franchise, L.L.C. v. Barrie, 819 F.3d 170, 174 (5th Cir. 2016) (citing Twombly, 550 U.S. at 547). “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). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 555).

         In ruling on a motion to dismiss, a court may consider documents outside the complaint when they are: (1) attached to the motion to dismiss; (2) referenced in the complaint; and (3) central to the plaintiff's claims. In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007). Additionally, a court may take judicial notice of matters of public record without converting a motion to dismiss into a motion for summary judgment. See Randall D. Wolcott, M.D., P.A. v. Sebelius, 635 F.3d 757, 763 (5th Cir. 2011) (“Generally, a court ruling on a 12(b)(6) motion may rely on the complaint, its proper attachments, documents incorporated into the complaint by reference, and matters of which a court may take judicial notice.”) (citation and quotation marks omitted).

         There exists a “well-established policy that the plaintiff be given every opportunity to state a claim.” Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001) (citing Hitt v. City of Pasadena, 561 F.2d 606, 608 (5th Cir. 1977)). It is federal policy to decide cases on the merits rather than technicalities, and thus when possible the Fifth Circuit has recommended that suits be dismissed without prejudice on Rule 12 motions. Great Plains Tr. Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 329 (5th Cir. 2002); Hines v. Wainwright, 539 F.2d 433, 434 (5th Cir. 1976) (vacating and remanding a Rule 12(c) dismissal with instructions to the district court to dismiss without, instead of with, prejudice). As a result, courts generally allow plaintiffs at least one opportunity to amend following a Rule 12 dismissal on the pleadings. Great Plains Tr. Co., 313 F.3d at 329; see In re Online Travel Co. (OTC) Hotel Booking Antitrust Litig., 997 F.Supp.2d 526, 548-49 (N.D. Tex. 2014) (Boyle, J.) (dismissing for failure to state a claim without prejudice, as dismissing with prejudice would be “too harsh a sanction”). Nonetheless, courts may appropriately dismiss an action with prejudice if a court finds that the plaintiff has alleged its best case. Jones v. Greninger, 188 F.3d 322, 327 (5th Cir. 1999).


         I. Plaintiffs did not properly support their breach ...

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