United States District Court, S.D. Texas, Houston Division
MEMORANDUM OPINION AND ORDER
LAKE UNITED STATES DISTRICT JUDGE.
Antwan Henry ("Plaintiff") filed suit against
Ditech Financial LLC ("Ditech"), Carrington
Mortgage Services LLC ("Carrington"), and the Bank
of New York Mellon as Trustee for the Certificate Holders of
the CWABS, Inc. Asset-Backed Certificates, Series 2006-5
("BONYM") (collectively "Defendants") in
the 80th Judicial District Court of Harris County, Texas,
alleging that Defendants are improperly attempting to
foreclose on his real property located at 11939 Canyon Valley
Drive, Tomball, Texas 77377 (the "Property").
Ditech timely removed the action to this court.Pending before the
court are Carrington and BONYM's Dismissal Motion
("Carrington/BONYM's Motion") (Docket Entry No.
7) and Defendant Ditech Financial LLC's Motion for
Judgment on the Pleadings ("Ditech's Motion")
(Docket Entry No. 17). For the reasons explained below, both
Carrington/BONYM's Motion and Ditech's Motion will be
Factual and Procedural Background
27, 2005, Plaintiff executed a $167, 200.00 Adjustable Rate
Note (the "Note") with Network Funding, L.P. (the
"Original Lender") to purchase the
Property. The Note was secured by a Deed of Trust,
which granted the Original Lender a lien on the Property with
a power of sale. The beneficiary of the Deed of Trust was
Mortgage Electronic Registration Systems, Inc.
("MERS"). MERS assigned its interest in the Deed of
Trust to BONYM on November 4, 2011. Loan servicing was
transferred to Green Tree Servicing LLC ("GTS")/
Ditech's predecessor entity, effective September 14,
filed suit against BONYM and GTS, among others, in this court
on August 29, 2014 (the "2014 Action"), pleading
claims and allegations similar to those in this
action. Plaintiff nonsuited the 2014 Action after
the court denied his request for a temporary injunction to
bar foreclosure. On January 6, 2015 (the day after the
court denied Plaintiff's motion for a temporary
injunction in the 2014 Action), Plaintiff filed for
bankruptcy protection under Chapter 13 of the Bankruptcy Code
in the Southern District of Texas. The bankruptcy court
dismissed Plaintiff's petition shortly thereafter when
Plaintiff failed to comply with the bankruptcy court's
Plaintiff entered into a Loan Modification Agreement
effective September 1, 2015. In the Loan Modification
Agreement, Plaintiff acknowledged that he was in
default. The Loan Modification Agreement was
recorded in the Harris County Real Property
Records. Servicing transferred from GTS's
successor entity, Ditech, to Carrington effective August 16,
2017. About one year after the Loan
Modification Agreement was executed, Plaintiff filed another
voluntary bankruptcy petition, and his petition was again
dismissed shortly thereafter for Plaintiff's failure to
follow the bankruptcy court's orders.
filed his Complaint in this action in the 80th Judicial
District Court of Harris County, Texas, on October 15,
2018. Plaintiff's Complaint alleges a
number of claims against some or all of Defendants, including
quiet title and violations of the Real Estate Settlement
Procedures Act ("RESPA") and associated claims for
declaratory relief. Ditech timely removed the action on
November 20, 2018. Carrington and BONYM filed their Motion
on December 11, 2018, arguing that the court should dismiss
Plaintiff's claims against them because Plaintiff's
claims lack merit. Plaintiff responded to
Carrington/BONYM's Motion on December 28,
2018. Ditech filed its Motion on January 22,
2019, also arguing that Plaintiff's claims against it
should be dismissed. Plaintiff responded to Ditech's
Motion on February 8, 2019.
Standard of Review
motion brought pursuant to Federal Rule of Civil Procedure
12(c) should be granted if there is no issue of material fact
and if the pleadings show that the moving party is entitled
to judgment as a matter of law. Greenberg v. General
Mills Fun Group. Inc., 478 F.2d 254, 256 (5th Cir.
1973). A motion for judgment on the pleadings is subject to
the same standard as a motion to dismiss for failure to state
a claim. See In re Great Lakes Dredge & Dock Co.,
LLC, 624 F.3d 201, 209 (5th Cir. 2010); Guidry v.
American Public Life Insurance Co., 512 F.3d 177, 180
(5th Cir. 2007); Jones v. Greninger, 188 F.3d 322,
324 (5th Cir. 1999) (per curiam).
court must accept the factual allegations of the complaint as
true, view them in a light most favorable to the plaintiff,
and draw all reasonable inferences in the plaintiff's
favor. Ramming v. United States, 281 F.3d
158, 161 (5th Cir. 2001); Jones, 188 F.3d at 324.
When a federal court reviews the sufficiency of a complaint,
before the reception of any evidence either by affidavit or
admissions, its task is necessarily a limited one. The issue
is not whether a plaintiff will ultimately prevail but
whether the claimant is entitled to offer evidence to support
Swierkiewicz v. Sorema N.A., 122 S.Ct. 992, 997
(2002) (quoting Scheuer v. Rhodes, 94 S.Ct. 1683,
1686 (1974)). To avoid dismissal a plaintiff must allege
"'enough facts to state a claim to relief that is
plausible on its face.'" Doe v. MySpace,
Inc., 528 F.3d 413, 418 (5th Cir. 2008) (quoting
Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1974
(2007)). Plausibility requires "more than an unadorned,
Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009).
"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. "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."
Id. (quoting Twombly, 127 S.Ct. at 1966)
(internal quotation marks omitted). The court will "not
accept as true conclusory allegations, unwarranted factual
inferences, or legal conclusions." Gentilello v.
Reae, 627 F.3d 540, 544 (5th Cir. 2010).
considering a motion to dismiss courts are generally
"limited to the complaint, any documents attached to the
complaint, and any documents attached to the motion to
dismiss that are central to the claim and referenced by the
complaint." Lone Star Fund V (U.S.). L.P. v.
Barclays Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010)
(citing Collins v. Morgan Stanley Dean Witter, 224
F.3d 496, 498-99 (5th Cir. 2000)). In addition, the court may
take judicial notice of matters of public record, including
pleadings filed in state court. See Joseph v. Bach &
Wasserman. L.L.C., 487 Fed.Appx. 173, 178 (5th Cir.
separate motions -- one by Carrington and BONYM and another
by Ditech -- Defendants argue that they are entitled to
judgment on the pleadings because Plaintiff has failed to
plead plausible claims for relief. Because the two motions
address overlapping issues, the court will consider them
together. For the reasons explained below, the claims in
Plaintiff's Complaint fail as a matter of law and
Defendants are entitled to judgment on the pleadings.
Quiet Title (First Cause of Action)
to remove cloud or to quiet title exists "'to enable
the holder of the feeblest equity to remove from his way to
legal title any unlawful hindrance having the appearance of
better right.'" Essex Crane Rental Corp. v.
Carter, 371 S.W.3d 366, 388 (Tex. App. -- Houston [1st
Dist.] 2012, pet. denied) (quoting Bell v. Ott, 606
S.W.2d 942, 952 (Tex. Civ. App. -- Waco 1980, writ ref'd
n.r.e.)) . The plaintiff has the burden of proof to establish
his superior equity and right to relief. Id. To do
so "the plaintiff must show (1) an interest in a
specific property, (2) title to the property is affected by a
claim by the defendant, and (3) the claim, although facially
valid, is invalid or unenforceable." Vernon v.
Perrien, 390 S.W.3d 47, 61-62 (Tex. App. -- El Paso
2012, no pet.) (citation omitted). The plaintiff must recover
on the strength of his own title, not on the weakness of the
defendant's title. Hurd v. BAC Home Loans Servicing,
LP, 880 F.Supp.2d 747, 767 (N.D. Tex. 2012); Ventura
v. Wells Fargo Bank, N.A., Civil Action No.
4:17-075-A, 2017 WL 1194370, at *2 (N.D. Tex. March 30, 2017;
Martin v. Merman, 133 S.W.3d 262, 265 (Tex. 2004)
pleads a quiet title claim against all Defendants alleging
that their claim to the Property is "invalid,
unenforceable and without merit" and that Defendants
"have no estate, title, claim, lien, or interest in the
[Property]. "Plaintiff bases his claim on the weakness
of Defendants' title, rather than the strength of his own
title. Plaintiff also contests the validity MERS's
assignment to BONYM. "[U]nder Texas law, facially valid
assignments cannot be challenged for want of authority except
by the defrauded assignor." Reinaael v. Deutsche
Bank National Trust Co., 735 F.3d 220, 228 (5th Cir.
2013). Plaintiff therefore lacks standing to challenge
MERS's assignment to BONYM, or any other assignment of
the Deed of Trust, because he is the borrower and not the
the documents attached to Carrington/BONYM's Motion show
that the Deed of Trust created a valid lien (of which BONYM
is the beneficiary) that remains on the Property. Ditech is
no longer the mortgage servicer for the Loan and Ditech is
not attempting to enforce the lien. Carrington is the current
mortgage servicer and claims no interest in the Property
independent of its right to enforce the lien on BONYM's
behalf. For these reasons, Plaintiff's quiet title claim
against Defendants fails as a matter of law.
Cancellation of Instrument (Third Cause of Action)
Complaint also alleges a "cancellation of
instrument" claim against Defendants in which Plaintiff
alleges that the Certificate Holders of the CWABS, Inc.
Asset-Backed Certificates, Series 2006-5, of which BONYM is
the Trustee, do not exist. Plaintiff fails to provide any
facts to support this assertion. Public records conclusively
establish that CWABS, Inc. Asset-Backed Certificates, Series
2006-5 does exist. Plaintiff's "cancellation of
instrument" claim does not contain specific allegations
against Carrington or Ditech. For these reasons,
Plaintiff's "cancellation of instrument" claim
fails as a matter of law.
Request for Accounting ...