United States District Court, N.D. Texas, Dallas Division
REWA C. HALTON, Plaintiff,
SELECT PORTFOLIO SERVICING, INC., MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., and DOE INSURANCE COMPANY, Defendants.
FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE
UNITED STATES MAGISTRATE JUDGE
the Court in this pro se civil action is Defendants
Select Portfolio Servicing, Inc. and Mortgage Electronic
Registration Systems, Inc.'s Rule 12(b)(6) Motion to
Dismiss for Failure to State a Claim (ECF No. 9). For the
reasons stated, the motion should be GRANTED.
lawsuit arises out of the foreclosure of residential property
located in Dallas, Texas (the “Property”).
Pl.'s Compl. 2 (ECF No. 3). On September 22, 2005,
Plaintiff Rewa C. Halton (“Halton”) and her
husband Rodney G. Halton obtained a mortgage loan (the
“Loan”) from Long Beach Mortgage Company
(“Long Beach”) for the Property. Defs.' Mot.
8. In connection with the Loan, the Haltons executed a
promissory note (the “Note”) and a deed of trust
(the “Deed of Trust”) in favor of Long
Beach. Thereafter, Long Beach assigned the Deed
of Trust to Deutsche Bank National Trust Company, as Trustee,
in trust for registered Holders of Long Beach Mortgage Loan
Trust 2006-WL2, Asset-Backed Certificates, Series
April 4, 2018, Halton filed this lawsuit to stop foreclosure
proceedings initiated against the Property. As best the Court
understands her complaint, Halton alleges that any default on
the Loan was the result of poor recordkeeping or other
wrongdoing by Defendants Select Portfolio Servicing, Inc.
(“SPS”)-the current mortgage servicer-and
Mortgage Electronic Registration Systems, Inc.
(“MERS”), as well as “Doe Insurance
Company” and 1-20 “Doe Defendants.”
See Pl.'s Compl. She further appears to allege
that Doe Insurance Company and the other Doe Defendants
wrongfully profited from an insurance policy purportedly in
place to compensate them if Halton defaulted on the Loan.
Id. 3-4. Additionally, she maintains that if some
entity was compensated for her default, the Property is not
subject to foreclosure. Id. Lastly, she alleges her
obligations under the Loan were extinguished. Id.
Her complaint asserts claims for: (1) negligence; (2)
fraudulent misrepresentation, deceit, and concealment by
deceptive account maintenance and fraudulent intent causing
foreclosure; (3) breach of two written contracts; (4) unjust
enrichment (by conversion) and restitution; and (5) trespass
to try title and quiet title. In addition to damages,
Plaintiff seeks declaratory and injunctive relief, an
accounting, and attorneys' fees.
filed their Rule 12(b)(6) motion on May 11, 2018, arguing
that Halton failed to state a claim for any alleged cause of
action. Halton failed to respond to the motion, so the Court
considers Defendants' motion without the benefit of a
survive Defendants' Rule 12(b)(6) motion to dismiss,
Halton's complaint “must contain sufficient factual
matter, accepted as true, ‘to state a claim to relief
that is plausible on its face.'” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
Halton's factual allegations must “‘raise
[her] right to relief above the speculative level,
'” but they do not need to be detailed. Lee v.
Verizon Commc'ns, Inc., 837 F.3d 523, 533 (5th Cir.
2016) (citing Rosenblatt v. United Way of Greater
Hous., 607 F.3d 413, 417 (5th Cir. 2010)). Halton's
claims have facial plausibility if she “pleads factual
content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Iqbal, 556 U.S. at 678 (citing
Twombly, 550 U.S. at 556).
Court must “accept all well-pleaded facts as true and
construe the complaint in the light most favorable to
[Halton].” In re Great Lakes Dredge & Dock Co.
LLC, 624 F.3d 201, 210 (5th Cir. 2010) (citing Doe
v. MySpace, Inc., 528 F.3d 413, 418 (5th Cir. 2008)).
However, the Court does not accept as true
“‘conclusory allegations, unwarranted factual
inferences, or legal conclusions.'” Ferrer v.
Chevron Corp., 484 F.3d 776, 780 (5th Cir. 2007)
(quoting Plotkin v. IP Axess Inc., 407 F.3d 690, 696
(5th Cir. 2005)).
it is well-established that “pro se complaints are held
to less stringent standards than formal pleadings drafted by
lawyers.” Miller v. Stanmore, 636 F.2d 986,
988 (5th Cir. Unit A Feb. 1981) (citing Haines v.
Kerner, 404 U.S. 519, 520 (1972) (per curiam)). However,
regardless of whether the plaintiff is proceeding pro
se or is represented by counsel, pleadings must show
specific, well-pleaded facts, not mere conclusory
allegations, to avoid dismissal. Guidry v. Bank of
LaPlace, 954 F.2d 278, 281 (5th Cir. 1992) (citing
Elliott v. Foufas, 867 F.2d 877, 881 (5th Cir.
first alleges that Defendants were negligent in servicing the
Loan by failing to keep an accurate accounting of, or
properly credit, her payments and by preparing and filing
false and inaccurate documents. Pl.'s Compl. 4-5, ¶
17-18. Defendants argue that these allegations fail to state
a claim as a matter of law because (1) Plaintiff's claim
for negligence is barred by the economic loss rule, and (2)
Defendants owed no tort duty to Halton. Defs.' Mot. 11,
Texas law, the elements of a negligence claim are: (1) a
legal duty owed by one person to another; (2) breach of that
duty; and (3) damages proximately caused by the breach.
Lane v. Halliburton, 529 F.3d 548, 565 (5th Cir.
2008) (citing Sport Supply Group, Inc. v. Columbia Cas.
Co., 335 F.3d 453, 466 (5th Cir. 2003)); see also
Nabors Drilling, USA, Inc. v. Escoto, 288 S.W.3d 401,
404 (Tex. 2009) (quoting D. Houston, Inc. v. Love,
92 S.W.3d 450, 454 (Tex. 2002)). However, “there is no
special relationship between a mortgagor and a mortgagee, or
between a servicer and a borrower, that would impose an
independent common law duty on Defendant[s].”
Miller v. CitiMortgage, Inc., 970 F.Supp.2d 568, 585
(N.D. Tex. 2013) (citing Thigpen v. Locke,
363 S.W.2d 247, 253 (Tex. 1962); UMLIC VP LLC v. T &
M Sales & Envtl. Sys., Inc., 176 S.W.3d 595, 613-15
(Tex. App.-Corpus Christi 2005, pet. denied); Fraley v.
BAC Home Loans Servicing, LP, 2012 WL 779130, at *8
(N.D. Tex. Jan. 10, 2012), adopted by 2012 WL 779654
(N.D. Tex. Mar. 9, 2012); see also Riley v. Wells Fargo
Bank, N.A., 2014 WL 129397, at *8 (S.D. Tex. Jan. 8,
2014) (citations omitted) (“In the mortgage context,
there is, as a matter of law, no such legal duty that would
give rise to a negligence claim.”). Although Halton
states that Defendants “had a duty to exercise
reasonable care and skill to maintain proper and accurate
loan records, ” and that they owed her a “duty of
care and skill . . . in the servicing of [her] loan, ”
she has failed to plead Defendants owed her any legal duty
recognized under Texas law. Pl.'s Compl. 4-5, ¶
17-18. Even accepting as true any nonconclusory facts alleged
in her complaint, Halton cannot state a negligence claim
because she cannot plead Defendants owed her a tort duty.
Accordingly, her claim for negligence should be dismissed.
Halton cannot plead that Defendants owed her a legal duty,
the Court pretermits consideration of Defendants'