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Olanipekun v. JPMorgan Chase Bank, N.A.

United States District Court, N.D. Texas, Fort Worth Division

July 10, 2019




         Before the Court is Defendant JPMorgan Chase Bank, N.A.'s (“Chase”) Motion to Dismiss Plaintiff's Amended Complaint (ECF No. 7), Brief in Support (ECF No. 8), and Appendix in Support (ECF No. 9), filed January 24, 2019; Plaintiff's Response (ECF No. 13) filed February 25, 2019; and Chase's Reply (ECF No. 14) filed March 11, 2019. United States District Judge Reed O'Connor referred this case to the undersigned for pretrial management on December 18, 2018. (ECF No. 4). After considering the pleadings and applicable legal authorites, the undersigned RECOMMENDS that Judge O'Connor GRANT Defendant's Motion to Dismiss and DISMISS Plaintiff's claims WITHOUT PREJUDICE, and allow Plaintiff an opportunity to file a second amended complaint within the fourteen days allotted for objections to this recommendation. If, however, Plaintiff files a second amended complaint within the prescribed time period, the Motion should be DENIED as moot, and the action should be allowed to proceed on the amended complaint.


         Plaintiff Louis Olanipekun (“Plaintiff”) sued Defendant Chase in his original state court petition for damages allegedly resulting from violations of the Texas Debt Collection Act (“TDCA”), violations of the Texas Property Code, and in the alternative, breach of contract. (ECF No. 1-1). He also requested damages, a declaratory judgment to void the Deed of Trust, injunctive relief, and a Temporary Restraining Order (“TRO”) to restrain Chase's foreclosure concerning the property located at 2932 Barberini Drive, Grand Prairie, Texas 75052 (the “Property”). (Id.). The TRO was granted on December 3, 2018. (Id. at 28). On December 11, 2018, Chase timely removed the case to this Court on the basis of diversity jurisdiction. (ECF No. 1).

         After the Court ordered Plaintiff to replead, he filed a First Amended Complaint (“FAC”) on January 10, 2019. (ECF No. 6). Plaintiff's FAC contains similar causes of action and requested exemplary damages. (Id.).

         Plaintiff initially purchased the Property on or about July 28, 2000. (Id. at 3). In connection with the purchase, he executed a note and a Deed of Trust that granted a security interest in the Property to secure repayment of the note in favor of GN Mortgage Corporation (“GN”). (Id.). The Deed of Trust was recorded in the Real Property Record of Tarrant County, Texas under instrument number D200174024 on August 7, 2000. (Id. at 4). The Deed of Trust was assigned from GN to Chase Manhattan Mortgage Corporation on September 5, 2000, but the assignment referred to a different instrument number D2000317844. (Id.). A records search using this instrument number yielded no results. (Id.). Chase appointed a substitute trustee on September 21, 2018, who filed a Notice of Substitute Trustee Sale on September 20, 2018, scheduling the Property for sale on December 4, 2018. (Id.).

         Chase filed the instant Motion to Dismiss Plaintiff's FAC on January 24, 2019. (ECF No. 7). Plaintiff timely filed his response, and Chase timely replied. The motion is now ripe for decision.


         Rule 12(b)(6) of the Federal Rules of Civil Procedure permits a party to move for dismissal of a complaint for failure to state a claim upon which relief can be granted. The Rules require that each complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief . . . .” Fed.R.Civ.P. 8(a). A complaint must include sufficient factual allegations “to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In considering a Rule 12(b)(6) motion, courts “take all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff . . . and ask whether the pleadings contain ‘enough facts to state a claim to relief that is plausible on its face.'” Yumilicious Franchise, L.L.C. v. Barrie, 819 F.3d 170, 174 (5th Cir. 2016) (citing Twombly, 550 U.S. at 547). “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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 555).

         In ruling on a motion to dismiss, a court may consider documents outside the complaint when they are: (1) attached to the motion to dismiss; (2) referenced in the complaint; and (3) central to the plaintiff's claims. In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007). Additionally, a court may take judicial notice of matters of public record without converting a motion to dismiss into a motion for summary judgment. See Randall D. Wolcott, M.D., P.A. v. Sebelius, 635 F.3d 757, 763 (5th Cir. 2011) (“Generally, a court ruling on a 12(b)(6) motion may rely on the complaint, its proper attachments, documents incorporated into the complaint by reference, and matters of which a court may take judicial notice.”) (citation and quotation marks omitted).

         There exists a “well-established policy that the plaintiff be given every opportunity to state a claim.” Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001) (citing Hitt v. City of Pasadena, 561 F.2d 606, 608 (5th Cir. 1977)). It is federal policy to decide cases on the merits rather than technicalities, and thus when possible the Fifth Circuit has recommended that suits be dismissed without prejudice on Rule 12 motions. Great Plains Tr. Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 329 (5th Cir. 2002); Hines v. Wainwright, 539 F.2d 433, 434 (5th Cir. 1976) (vacating and remanding a Rule 12(c) dismissal with instructions to the district court to dismiss without, instead of with, prejudice). As a result, courts generally allow plaintiffs at least one opportunity to amend following a Rule 12 dismissal on the pleadings. Great Plains Tr. Co., 313 F.3d at 329; see In re Online Travel Co. (OTC) Hotel Booking Antitrust Litig., 997 F.Supp.2d 526, 548-49 (N.D. Tex. 2014) (Boyle, J.) (dismissing for failure to state a claim without prejudice, as dismissing with prejudice would be “too harsh a sanction”). Nonetheless, courts may appropriately dismiss an action with prejudice if a court finds that the plaintiff has alleged its best case. Jones v. Greninger, 188 F.3d 322, 327 (5th Cir. 1999).


         Plaintiff's premise for asserting this lawsuit is the allegedly defective assignment from GN to Chase and Chase's subsequent failure to abide by the notice requirements under Chapter 51 of the Texas Property Code and the Deed of Trust. (ECF No. 6). As explained more fully below, Plaintiff's contentions are without legal support. Accordingly, the case should be dismissed for failure to state a claim.

         I. Plaintiff's challenge of the Assignment from GN to Chase is without merit.

         A. Plaintiff lacks standing to assert that the Assignment is voidable.

         The Fifth Circuit has made clear that an “obligor cannot defend against an assignee's efforts to enforce the obligation on a ground that merely renders the assignment voidable, ” but “may defend on any ground which renders the assignment void.” Reinagel v. Deutsche Bank Nat. Tr. Co., 735 F.3d 220, 225 (5th Cir. 2013) (internal quotation marks omitted) (emphasis original). Plaintiff alleges that because the assignment of the Deed of Trust from GN to Chase (the “Assignment”) refers to an incorrect instrument number, it is void. Therefore, Chase lacked authority to foreclose on the Deed of Trust. (ECF No. 6 at 4). Chase does not contest that the Assignment referred to an erroneous instrument number. Instead, Chase argues that the Assignment includes sufficient information to identify with reasonable certainty the interest conveyed. (ECF No. 8 at 10-12). The undersigned construes Plaintiff's attack on the Assignment under the statute of frauds, Tex. Bus. & Com. Code Ann. § 26.01(b)(4) (West 2015), which, if true, would make the assignment voidable and not void. Miller v. Homecomings Fin., LLC, 881 F.Supp.2d 825, ...

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