United States District Court, S.D. Texas, Houston Division
JOSEPH M. WHITE, and REBECCA D. WHITE, Plaintiffs,
AMERIQUEST MORTGAGE, et al., Defendants.
MEMORANDUM AND OPINION
Rosenthal Chief United States District Judge.
October 2018, Joseph White and Rebecca White, representing
themselves, sued Ameriquest Mortgage Company; Wells Fargo
Bank, N.A.; Structured Asset Mortgage Investments II Inc.;
JPMorgan Chase Bank, N.A.; Issuing Entity Trust Bear Stearns
ALT-A Trust 2005-5; and other unnamed defendants over a
foreclosure dispute. Seeking injunctive and declaratory
relief, damages, and to quiet title, the Whites allege
wrongful foreclosure; unjust enrichment; violations of the
Fair Debt Collection Practices Act and Pennsylvania's
Fair Credit Extension Uniformity Act; slander of title; fraud
in the concealment and fraud in the inducement; contract
breach, rescission, and unconscionability; intentional and
negligent infliction of emotional distress; and a RICO
violation. The defendants have moved for summary judgment and
to dismiss, submitting documents related to the mortgage,
default, and foreclosure. The Whites have not responded or
requested more time to do so.
careful review of the complaint, the motion, the record
evidence, and the applicable law, the court grants the
defendants' motion for summary judgment. (Docket Entry
No. 16). An order of final judgment is separately entered.
reasons are explained in detail below.
March 2005, the Whites obtained a $136, 000 home-mortgage
loan from Ameriquest Mortgage Company. (Docket Entry No. 16-1
at 1). Their promissory note required them to make payments
on the first day of each month for 30 years beginning on May
1, 2005. (Id.). The Whites were required to pay
$859.62 each month until April 1, 2010, when the loan's
interest rate became adjustable. (Id. at 1-2). From
then, the interest rate was based on the London Inter-Bank
Offered Rate index, meaning that the interest rate and the
amount owed by the Whites each month were subject to change.
(Id. at 2). The note provided that the interest rate
would be recalculated every six months, and that the Whites
would be in default if they did “not pay the full
amount of each monthly payment” when due. (Id.
at 2-3). A default meant that the defendants could send the
Whites notice that they had to pay the overdue amount within
30 days, or their entire loan balance would become
immediately due. (Id. at 3).
Whites' deed of trust also required them to make timely
payments under the note. (Docket Entry No. 16-2 at 4). If the
Whites missed payments and did not repay the overdue amounts,
even after receiving notice and time to do so, the deed
allowed the defendants to demand “immediate
payment” of the full loan balance. (Id. at
13). After giving the Whites notice and an opportunity to
reinstate the loan, the defendants had the right to sell the
Whites' home if they failed to pay the amount due.
(Id. at 14).
deed stated that Ameriquest, the trustee, could add or
appoint successor trustees “at its option” and
“without the necessity of any formality other than a
[written] designation” by Ameriquest. (Id. at
15). Ameriquest assigned the deed to JPMorgan, and JPMorgan
later assigned the deed to Bank of New York Mellon.
(See Docket Entry Nos. 16-3, 16-4). Under the second
assignment, Bank of New York Mellon became JPMorgan's
successor in interest and trustee for Structured Asset
Mortgage Investments II Inc., Bear Sterns ALT-A Trust, and
Mortgage Pass-Through Certificates, Series 2005-5. (Docket
Entry No. 16-4 at 1). The assignments were recorded in the
official public records of Harris County. (Docket Entry No.
16 at 16).
Whites stopped making loan payments in January 2018. (Docket
Entry No. 16-6 at 2- 3). In February 2018, Specialized Loan
Servicing LLC, the loan servicer, sent the Whites written
notice that they were in default and owed $1, 672.61, giving
them 33 days to cure. (Docket Entry No. 16-7 at 1). The
notice reminded the Whites that failing to make the necessary
payment by the deadline could result in the full loan balance
becoming due and the sale of their home. (Id.).
Whites did not cure the default. (Docket Entry No. 16-6 at
2-3). In August 2018, Bank of New York Mellon accelerated the
loan and petitioned the 164th Judicial District Court of
Harris County for an expedited foreclosure order. (Docket
Entry No. 16-8). In December 2018, the court entered a
default order permitting Bank of New York Mellon to foreclose
on the Whites' home. (Docket Entry No. 16-9). On January
10, 2019, Bank of New York Mellon served the Whites written
notice that a foreclosure sale was scheduled for February 5,
2019. (Docket Entry No. 16 at 6-7; Docket Entry No. 16-11 at
1). Bank of New York Mellon posted notice of the scheduled
sale on January 14, 2019. (Docket Entry No. 16-10).
Whites sued the defendants in this court in October 2018,
asking for a temporary restraining order, permanent and
preliminary injunctions, and declaratory relief. (Docket
Entry Nos. 1, 2). The court declined to hold ex
parte hearings and directed the Whites to serve the
defendants. (Docket Entry Nos. 4, 11). Bank of New York
Mellon received a summons on January 22, 2019, just two weeks
before the foreclosure sale. (Docket Entry No. 16 at 7).
Because the Whites challenged the foreclosure in federal
court, the sale was automatically stayed under Texas Rule of
Civil Procedure 736.11. (Id.).
defendants have moved for summary judgment and to dismiss for
failure to state a claim, arguing that the record shows that
the Whites defaulted; received proper notice of the default
and of the foreclosure sale; and did not cure the default.
The defendants also argue that the Whites lack standing to
challenge the deed assignments; their quiet-title and
slander-of-title claims lacks merit; no misrepresentations
were made to the Whites as to the loan, default, assignment,
or foreclosure sale; and that the Whites, not the defendants,
breached the note and deed.
The Legal Standards A. Rule 12(b)(6)
12(b)(6) allows dismissal if a plaintiff fails “to
state a claim upon which relief can be granted.”
Fed.R.Civ.P. 12(b)(6). A complaint must contain “enough
facts to state a claim to relief that is plausible on its
face.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007). Rule 8 “does not require
‘detailed factual allegations,' but it demands more
than an unadorned, the-defendant-unlawfully-harmed-me
accusation.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Twombly, 550 U.S. 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.” Id. (citing
Twombly, 550 U.S. at 556). “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. (quoting Twombly, 550 U.S. at 556).
withstand a Rule 12(b)(6) motion, [a] complaint must allege
‘more than labels and conclusions, '” and
“a formulaic recitation of the elements of a cause of
action will not do.” Norris v. Hearst Tr., 500
F.3d 454, 464 (5th Cir. 2007) (quoting Twombly, 550
U.S. at 555). “Nor does a complaint suffice if it
tenders ‘naked assertion[s]' devoid of
‘further factual enhancement.'”
Iqbal, 556 U.S. at 678 (alteration in original)
(quoting Twombly, 550 U.S. at 557). “[A]
complaint ‘does not need detailed factual
allegations,' but 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.'”
Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir.
2007) (quoting Twombly, 550 U.S. at 555).
“Conversely, when the allegations in a complaint,
however true, could not raise a claim of entitlement to
relief, this basic deficiency should be exposed at the point
of minimum expenditure of time and money by the parties and
the court.” Id. (quotation and alteration
omitted) (quoting Twombly, 550 U.S. at 558).
complaint fails to state a claim, the court should generally
give the plaintiff a chance to amend under Rule 15(a) before
dismissing the action with prejudice, unless it is clear that
to do so would be futile. See Carroll v. Fort James
Corp., 470 F.3d 1171, 1175 (5th Cir. 2006) (Rule 15(a)
“evinces a bias in favor of granting leave to
amend”); Great Plains Tr. Co. v. Morgan Stanley
Dean Witter & Co., 313 F.3d 305, 329 (5th Cir. 2002)
(“[D]istrict courts often afford plaintiffs at least
one opportunity to cure pleading deficiencies before
dismissing a case, unless it is clear that the defects are
incurable or the plaintiffs advise the court that they are
unwilling or unable to amend in a manner that will avoid
dismissal.”). A court has discretion to deny a motion
to amend for futility if the amended complaint would fail to
state a plausible claim. Villarreal v. Wells Fargo Bank,
N.A., 814 F.3d 763, 766 (5th Cir. 2016).
Rule 9(b), in “alleging fraud or mistake, a party must
state with particularity the circumstances constituting fraud
or mistake.” Fed.R.Civ.P. 9(b). “At a minimum,
Rule 9(b) requires that a plaintiff set forth the ‘who,
what, when, where, and how' of the alleged fraud.”
United States ex rel. Thompson v. Columbia/HCA Healthcare
Corp., 125 F.3d 899, 903 (5th Cir. 1997) (citing
Williams v. WMX Techs., Inc., 112 F.3d 175, 179 (5th
Cir. 1997)). The pleader must “specify the statements
contended to be fraudulent, identify the speaker, state when
and where the statements were made, and explain why the
statements were fraudulent.” Williams, 112
F.3d at 177. A claim that a fraud allegation is not made with
particularity is properly raised by a Rule 12(b)(6) motion to
dismiss. United States ex rel. Grubbs v. Kanneganti,
565 F.3d 180, 185 n.8 (5th Cir. 2009).
judgment is appropriate only when ‘the movant shows
that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of
law.'” Shepherd on Behalf of Estate of Shepherd
v. City of Shreveport, 920 F.3d 278, 282-83 (5th Cir.
2019) (quoting Fed.R.Civ.P. 56(a)). “A material fact is
one that might affect the outcome of the suit under governing
law, ” and “a fact issue is genuine if the
evidence is such that a reasonable jury could return a
verdict for the non-moving party.” Renwick v. PNK
Lake Charles, L.L.C., 901 F.3d 605, 611 (5th Cir. 2018)
(quotations and citations omitted). The moving party
“always bears the initial responsibility of informing
the district court of the basis ...