United States District Court, W.D. Texas, San Antonio Division
KATHERINE M. CONNER A/K/A KATHERINE M. SCHMIDT, Plaintiff,
LAKEVIEW LOAN SERVICING, LLC, and LOANCARE, LLC, Defendants.
ORDER ON MOTION TO DISMISS
RODRIGUEZ UNITED STATES DISTRICT JUDGE
date, the Court considered Defendants' Motion to Dismiss
(docket no. 5), Plaintiff's response (docket no. 7), and
Defendants' reply (docket no. 8). After careful
consideration, Defendants' motion is GRANTED WITH LEAVE
April 30, 2015, Plaintiff Katherine M. Conner purchased the
property at 115 Sky Hawk Lane, Floresville, Texas, 78114.
Docket no. 1-3 at 94. She alleges she entered into a mortgage
financing agreement with Directions Equity, LLC, which
required repayment of a $247, 296.00 loan. Id.
Defendant Lakeview Loan Servicing, LLC, is the noteholder and
Defendant Loancare, LLC, is the mortgage servicer.
Id. Defendants allegedly noticed a foreclosure for
December 4, 2018. This Notice of Acceleration and Notice of
Non-Judicial Foreclosure Sale was sent on October 15, 2018,
and returned to sender on November 15, 2018. Id. The
foreclosure sale was completed, and Plaintiff alleges she did
not receive notice until she was served with an eviction
citation. Id. at 94-95.
February 26, 2019, Plaintiff filed her petition in the
District Court of Wilson County, Texas. Docket no. 1-3.
Defendants removed to this Court on April 5. Docket no. 1.
Plaintiff originally named Directions Equity as a defendant,
which would have destroyed diversity of citizenship.
Defendants argued Directions Equity was improperly joined,
and the Court ordered Plaintiff to show cause why Directions
Equity should not be dismissed. Docket no. 15. In response,
Plaintiff voluntarily dismissed Directions Equity on June 4.
Thus, this Court has jurisdiction, as the parties are
completely diverse (Plaintiff is a Texas citizen, Lakeview is
a citizen of Delaware and Florida, and Loancare is a citizen
of Delaware, Florida, Wisconsin, Massachusetts, New
Hampshire, and New York) and the amount in controversy
requirement is met. On April 12, 2019, Defendants filed the
Motion to Dismiss now before the Court. Docket no. 5.
survive a 12(b)(6) motion to dismiss, “a 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)). A claim for relief must contain: (1)
“a short and plain statement of the grounds for the
court's jurisdiction”; (2) “a short and plain
statement of the claim showing that the pleader is entitled
to the relief”; and (3) “a demand for the relief
sought.” Fed.R.Civ.P. 8(a). In considering a motion to
dismiss under Rule 12(b)(6), all factual allegations from the
complaint should be taken as true, and the facts are to be
construed favorably to the plaintiff. Fernandez-Montez v.
Allied Pilots Assoc., 987 F.2d 278, 284 (5th Cir. 1993).
To survive a 12(b)(6) motion, a complaint must contain
“more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not
do.” Twombly, 550 U.S. at 555.
brings claims for breach of contract, negligent
misrepresentation, statutory fraud/fraud in real estate,
wrongful foreclosure, tortious interference with a contract,
and violation of the Texas Deceptive Trade Practices Act.
Docket no. 1-3.
Breach of Contract
Texas law, a breach-of-contract claim requires: (1) the
existence of a valid contract; (2) performance or tendered
performance by the plaintiff; (3) that the defendant breached
the contract; 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).
claims Defendants breached the Deed of Trust in three ways.
First, Plaintiff claims Defendants breached by not informing
her of the Deed of Trust's assignment. Docket no. 1-3 at
100. However, “a claim for breach of a note and deed of
trust must identify the specific provision in the contract
that was breached, ” Williams v. Wells Fargo Bank,
N.A., 560 Fed.Appx. 233, 238 (5th Cir. 2014), and once
that specific provision is identified, plaintiff must state
how it was breached by alleging enough facts to state a
plausible breach-of-contract claim, Guajardo v. JP Morgan
Chase Bank, N.A., 605 Fed.Appx. 240, 244 (5th Cir.
2015). Here, no provision in the Deed of Trust requires that
Defendants inform Plaintiff that the Deed of Trust was
Plaintiff claims Defendants breached Paragraph 18 of the Deed
of Trust, which requires that the Lender, if intending to
foreclose, “shall give notice of the time, place and
terms of sale by posting and recording the notice at least 21
days prior to sale as provided by applicable law” and
“shall mail a copy of the notice of sale to Borrower in
the manner prescribed by applicable law.” Docket no.
1-3 at 112. Section 51.002 of the Texas property code, which
governs real property sales under deeds of trust, is the
“applicable law.” Under this section, notice of a
foreclosure sale “must be given at least 21 days before
the date of the sale by . . . . serving written notice of the
sale by certified mail on each debtor, ” Tex. Prop.
Code. § 51.002(b), but “service of a notice under
this section by certified mail is complete when the notice is
deposited in the United States mail, postage prepaid and
addressed to the debtor at the debtor's last known
address, ” Id. § 51.002(e). Thus, under
Texas law, actual receipt of a foreclosure notice is not
required. See Santiago v. Bank of New ...