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Henry v. Carrington Mortgage Services, LLC

United States District Court, S.D. Texas, Houston Division

June 14, 2019

ANTWAN HENRY, Plaintiff,



         Plaintiff 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.[1]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 granted.

         I. Factual and Procedural Background

         On June 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.[2] The Note was secured by a Deed of Trust, [3] which granted the Original Lender a lien on the Property with a power of sale.[4] The beneficiary of the Deed of Trust was Mortgage Electronic Registration Systems, Inc. ("MERS").[5] MERS assigned its interest in the Deed of Trust to BONYM on November 4, 2011.[6] Loan servicing was transferred to Green Tree Servicing LLC ("GTS")/ Ditech's predecessor entity, effective September 14, 2014.[7]

         Plaintiff 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.[8] Plaintiff nonsuited the 2014 Action after the court denied his request for a temporary injunction to bar foreclosure.[9] 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.[10] The bankruptcy court dismissed Plaintiff's petition shortly thereafter when Plaintiff failed to comply with the bankruptcy court's orders .[11]

         GTS and Plaintiff entered into a Loan Modification Agreement effective September 1, 2015.[12] In the Loan Modification Agreement, Plaintiff acknowledged that he was in default.[13] The Loan Modification Agreement was recorded in the Harris County Real Property Records.[14] Servicing transferred from GTS's successor entity, Ditech, to Carrington effective August 16, 2017.[15] 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.[16]

         Plaintiff filed his Complaint in this action in the 80th Judicial District Court of Harris County, Texas, on October 15, 2018.[17] 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.[18] Ditech timely removed the action on November 20, 2018.[19] 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.[20] Plaintiff responded to Carrington/BONYM's Motion on December 28, 2018.[21] Ditech filed its Motion on January 22, 2019, also arguing that Plaintiff's claims against it should be dismissed.[22] Plaintiff responded to Ditech's Motion on February 8, 2019.[23]

         II. Standard of Review

         A 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).

         The 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 the claims.

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, the-defendant-unlawfully-harmed-me accusation." 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).

         When 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. 2012).

         III. Analysis

         In two 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.

         A. Quiet Title (First Cause of Action)

         A suit 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) (citation omitted).

         Plaintiff 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]. "[24]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 defrauded assignor.

         Furthermore, 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.

         B. Cancellation of Instrument (Third Cause of Action)

         Plaintiff's 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.[25] 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.[26] 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.

         C. Request for Accounting ...

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