United States District Court, N.D. Texas, Fort Worth Division
JOHN R. DEVOSS and MICHELLE A. DEVOSS, Plaintiffs,
JPMORGAN CHASE BANK, N.A. and BANK OF AMERICA, N.A., Defendants.
FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE
UNITED STATES MAGISTRATE JUDGE
RAY, JR. UNITED STATES MAGISTRATE JUDGE
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.
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).
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).
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).
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
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.
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).
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).
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).
Plaintiffs did not properly support their breach ...