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Stacy v. JPMorgan Chase Bank, N.A.

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

July 19, 2019

BRETT STACY, Plaintiff,
v.
JPMORGAN CHASE BANK, N.A., Defendant.

          FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

          DAVID L. HORAN UNITED STATES MAGISTRATE JUDGE.

         This case has been referred to the undersigned United States magistrate judge for pretrial management under 28 U.S.C. § 636(b) and a standing order of reference from United States Chief District Judge Barbara M.G. Lynn. See Dkt. No. 4.

         Defendant JPMorgan Chase Bank, N.A. has filed a motion to dismiss. See Dkt. No. 5 (Motion to Dismiss Under Rule 12(b)(6)). Plaintiff Brett Stacy has filed a response, see Dkt. No. 15, and JPMC has filed a reply, see Dkt. No. 16.

         For the following reasons, the undersigned recommends that the motion to dismiss should be denied.

         Background

         Plaintiff purchased property located at 3209 Cornell Avenue in Dallas, Texas, on October 11, 2007. See Dkt. No. 1-1 at 26-27 (General Warranty Deed with Vendor's Lien). To finance the purchase, Plaintiff executed two notes, secured by two separate deeds of trust, both payable to Washington Mutual Bank, F. A. The first note was in the amount of $1, 320, 000 and was secured by a deed of trust. See Id. at 28-32, 33-47. The second note was in the amount of $165, 000 and was secured by a second deed of trust. Plaintiff borrowed a total amount of $1, 485, 000 to finance his purchase of the property.

         Both loans were transferred to JPMC, which obtained rights as the mortgagee on Plaintiff's first and second mortgages.

         Plaintiff fell behind on his first mortgage in April 2018. Plaintiff cured the default on June 25, 2018.

         Shortly thereafter, Plaintiff fell behind on his first mortgage again, and he contacted JPMC for mortgage assistance.

         In October 2018, Plaintiff received a Request for Mortgage Assistance form (“loss mitigation application”). Plaintiff filled out the form and had his accountant prepare a profit and loss statement for the entire year. Plaintiff returned the completed application to JPMC and was told he would receive a response in thirty days.

         On October 29, 2018, JPMC informed Plaintiff that it needed additional information because the application was not signed or dated and the profit and loss statement was not clear and complete. See Id. at 48-49. JPMC requested that Plaintiff submit a new loss mitigation application and profit and loss statement by November 28, 2018. See Id. Plaintiff called JPMC to inquire about the letter. He was told that the application was signed, but not dated. He was also told that the profit and loss statement needed to be for the most current three months only, not an entire year. And he was told that he had to reapply and submit a new loss mitigation application and profit and loss statement.

         Plaintiff was unable to get another appointment with his accountant to prepare another profit and loss statement due to the holidays and end-of-year tax consulting. In November 2018, Plaintiff contacted JPMC to inquire whether it would provide him with the financial information he had previously submitted to assist him in “refilling out” the loss mitigation application, but JMPC refused to do so.

         In December 2018, Plaintiff spoke with several different JPMC customer care representatives regarding mortgage assistance. He was told that, as long as he kept making payments on the second mortgage and working on his mortgage assistance package for the first mortgage, JPMC would not foreclose on the property. Therefore, Plaintiff continued payments on his second mortgage while gathering the necessary information he needed to resubmit another loss mitigation application.

         On January 8, 2019, JPMC provided Plaintiff with Notice of Acceleration. The Trustee's Sale was set for February 5, 2019. See Id. at 50-51 (Notice of Acceleration), 52-53 (Notice of Substitute Trustee Sale).

         On January 17, 2019, Plaintiff's mortgage assistance account manager, Albert Omorege, informed Plaintiff that his property was set for foreclosure and that, if Plaintiff wanted to stop the foreclosure, Plaintiff needed to resubmit the loss mitigation application. Plaintiff told Mr. Omorege about the problem that he had with the accountant and that he did not have some of the financial information needed to complete the application, and Mr. Omorege provided Plaintiff with the information that Plaintiff had requested from JPMC in November.

         On January 29, 2019, Plaintiff resubmitted a loss mitigation application and profit and loss statement for the last three months.

         On January 31, 2019, Plaintiff filed a Verified Original Petition, Application for Temporary Restraining Order, and Request for Disclosure in County Court at Law No. 3 of Dallas County, Texas. See Id. at 8-53 (Brett Stacy v. JPMorgan Chase Bank, N.A.. No. CC-19-707-C) (the “Petition”). Plaintiff asserts claims for violations of the Real Estate Settlement Procedures Act (“RESPA”) and the Texas Debt Collection Act (“TDCA”). Plaintiff also seeks injunctive relief under the TDCA.

         JPMC removed the case to this Court on February 21, 2019, see Dkt. No. 1-1, and filed its motion to dismiss on February 27, 2019, see Dkt. No. 5.

         JPMC asserts that Plaintiff has failed to state a claim for violations of the RESPA or the TDCA because both of those claims are founded on allegations that JPMC mailed a notice of foreclosure and did not properly respond to Plaintiff's loss mitigation application. The property has not been foreclosed.

         JPMC argues that the Petition fails to state a claim for violation of the RESPA on which relief can be granted because most of those claims are founded on Plaintiff's false, conclusory allegation that he submitted a complete loss mitigation application to JPMC on some unspecified date in October 2018. JPMC further argues that Plaintiff's specific allegations conclusively show that the application was incomplete. JPMC further argues that Plaintiff's remaining RESPA claims fail because nothing in the RESPA requires a servicer to evaluate an incomplete application for loss mitigation options. See Dkt. No. 6.

         JPMC argues that the Petition fails to state a claim for violation of the TDCA on which relief can be granted because the sole basis for the TDCA claim is Plaintiff's erroneous contention that JPMC violated a section of the RESPA. See id.

         JPMC argues that the Petition fails to state a claim on which relief can be granted for injunctive relief because Plaintiff cannot show a likelihood of ultimate success on ...


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