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Pillow v. U S Bank National Association

United States District Court, N.D. Texas, Dallas Division

June 13, 2019




         Before the Court for recommendation is Defendant's Motion to Dismiss, filed September 14, 2018. (doc. 27.) Based upon the relevant filings and applicable law, the motion should be GRANTED.

         I. BACKGROUND

         This case involves the attempted foreclosure of real property located at 215 Deer Field Court, Cedar Hill, Texas, 75104 (the Property).[2] (doc. 1-4 at 3.)[3] On August 29, 2003, Gilecia Pillow (Wife) executed a Note in favor of KB Home Mortgage Company, an Illinois Corporation (KB Home) for a loan in the principal amount of $166, 388.00. (Id.) Wife contemporaneously executed a Deed of Trust that granted a security interest in the Property to KB Home to secure repayment under the Note. (docs. 1-4 at 3; 29 at 4-13.) Under the terms of the Deed of Trust, Wife and her husband, Tony Pillow, Jr. (Plaintiffs), would be in default if they failed to timely pay the full amount of each required monthly payment, and subject to acceleration of the loan and foreclosure proceedings on the Property. (doc. 29 at 8-10.) The Deed of Trust identified Mortgage Electronic Registration Systems, Inc. (MERS) as beneficiary, “[s]olely as nominee for [KB Home] . . . and [its] successors and assigns.” (Id. at 4.) On July 12, 2011, MERS executed an Assignment of Deed of Trust to U.S. Bank, as Trustee for GSMPS Mortgage Loan Trust 2006-RP1 (Defendant), which was later filed and recorded in the property records of Dallas County, Texas, on July 14, 2011. (Id. at 15-17.) On July 17, 2015, Plaintiffs executed a Loan Modification Agreement with Defendant that modified the amount of each monthly payment due under the Note and Deed of Trust, which was subsequently filed and recorded in the Dallas County property records. (Id. at 19-26.)

         After Plaintiffs “were unable to pay the mortgage for a few months, ” they were held in default by Defendant under the Deed of Trust, and the Property was scheduled for foreclosure sale on June 6, 2017, by a Notice of Substitute Trustee's Sale. (docs. 1-4 at 3; 29 at 28-29.) The day before the foreclosure sale, Plaintiffs filed suit in the 116th District Court of Dallas County, Texas, asserting claims for quiet title, fraud, breach of contract, violation of the Texas Debt Collection Practices Act (TDCPA), trespass to try title, and wrongful foreclosure. (See doc. 1-4.) The 116th District Court issued a Temporary Restraining Order (TRO) enjoining the sale of the Property for fourteen days, (see doc. 1-7), and the foreclosure sale was cancelled, (see docs. 1-12; 29 at 31-41).

         On July 24, 2017, Defendant removed this action to federal court asserting diversity jurisdiction under 28 U.S.C. § 1332. (doc. 1 at 1-2.) It moved to dismiss this action for failure to state a claim on February 16, 2018. (doc. 11.) On July 18, 2018, it was recommended that the motion to dismiss be granted, but that Plaintiffs be afforded the opportunity to file a proper motion for leave to amend their complaint within the fourteen-day objection period, or a deadline otherwise set by the Court. (doc. 21 at 20.) If Plaintiffs timely filed a proper motion for leave to amend their complaint that was granted, then Defendant's motion to dismiss should be denied as moot, and the case should be allowed to proceed on the amended complaint. (Id.)

         On August 2, 2018, Plaintiffs filed a motion for leave to amend that was granted, and Defendant's motion to dismiss was accordingly denied as moot. (docs. 22, 25.) Plaintiffs' amended complaint was filed on September 5, 2018. (doc. 26.) It alleges that prior to the foreclosure sale, Plaintiffs did not receive “the twenty-day notice of default [and] intent to accelerate as required by State and Federal Law, ”or the “in person consultation required under Federal Law.” (Id. at 3.) It also claims that Defendant did not “follow[] [the] notice requirements in the Deed of Trust, ” and never provided Plaintiffs with “a notice of default and/or acceleration of the note.” (Id.) Plaintiffs assert a claim for breach of contract and for violation of the Texas Debt Collection Practices Act (TDCPA) contained in Chapter 392 of the Texas Finance Code. (Id. at 3-4.) They seek rescission of the trustee's sale or, in the alternative, “actual damages for the lost equity and the mental distress” resulting from the “improper” or “potential” sale of their property. (Id. at 4.) Plaintiffs also seek statutory, actual, compensatory, and punitive damages, reasonable and necessary attorney's fees, court costs, pre- and post-judgment interest, and all other relief to which they may be justly entitled.[3](Id. at 5.)

         On September 14, 2018, Defendant moved to dismiss Plaintiffs' amended complaint, (doc. 27), but Plaintiffs did not respond. This motion is now ripe for recommendation.[4]


         Defendant moves to dismiss Plaintiffs' amended complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. (doc. 27.)

         A. Legal Standard

         Rule 12(b)(6) allows motions to dismiss for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). Under the 12(b)(6) standard, a court cannot look beyond the face of the pleadings. Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996); see also Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir. 1999), cert. denied, 530 U.S. 1229 (2000).

         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). The court must accept those well-pleaded facts as true and view them in the light most favorable to the plaintiff. Baker, 75 F.3d at 196. “[A] well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of [the alleged] facts is improbable, and ‘that a recovery is very remote and unlikely.'” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007) (citation omitted). Nevertheless, a plaintiff must provide “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action's elements will not do.” Id. at 555; accord Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (emphasizing that “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions”). The alleged facts must “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. In short, a complaint fails to state a claim upon which relief may be granted when it fails to plead “enough facts to state a claim to relief that is plausible on its face.” Id. at 570.

A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw reasonable inference that the defendant is liable for the misconduct alleged. 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. Where a complaint pleads facts that are “merely consistent with” a defendant's liability, it “stops short of the line between possibility and plausibility of ‘entitlement to relief.'”

Iqbal, 556 U.S. at 678 (citations omitted). When plaintiffs “have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed.” Twombly, 550 U.S. at 570; accord Iqbal, 556 U.S. at 683.

         As noted, a court cannot look beyond the pleadings in deciding a Rule 12(b)(6) motion. Spivey, 197 F.3d at 774; Baker, 75 F.3d at 196. When a party presents “matters outside the pleadings, ” a court has “complete discretion” to either accept or exclude the evidence for purposes of determining the motion. Isquith ex rel. Isquith v. Middle S. Utils., Inc., 847 F.2d 186, 193 n.3 (5th Cir. 1988); accord Gen. Retail Servs., Inc. v. Wireless Toyz Franchise, LLC, 255 Fed.Appx. 775, 783 (5th Cir. 2007). However, “[i]f . . . matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary ...

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