United States District Court, N.D. Texas, Fort Worth Division
FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE
UNITED STATES MAGISTRATE JUDGE
RAY, JR. UNITED STATES MAGISTRATE JUDGE
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.
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).
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.).
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.).
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
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).
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).
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).
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.
Plaintiff's challenge of the Assignment from GN to Chase
is without merit.
Plaintiff lacks standing to assert that the Assignment is
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, ...