United States District Court, N.D. Texas, Fort Worth Division
ROY E. TOLLIVER, JR., Plaintiff,
BANK OF NEW YORK MELLON FKA BANK OF NEW YORK, AS TRUSTEE FOR THE CERTIFICATE HOLDERS OF CWABS INC., ASSET BACKED CERTIFICATES, SERIES 2007-3, Defendant.
FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE
UNITED STATES MAGISTRATE JUDGE
RAY, JR. UNITED STATES MAGISTRATE JUDGE
the Court are the Motion to Dismiss (ECF No. 8) with Brief
and Appendix in Support (ECF Nos. 9-10) filed February 11,
2019 by Defendant Bank of New York Mellon fka The Bank of New
York, as Trustee for the certificate holders of CWABS Inc.,
asset backed certificates, series 2007-3
(“BoNYM”); Plaintiff's Motion for Leave to
Amend and Supplement Complaint and for Joinder of Additional
Parties (ECF No. 18) filed March 18, 2019 and combined Reply
to BoNYM's Motion to Dismiss and Brief in Support of
Plaintiff's Motion for Leave to Amend (ECF No. 21) filed
March 23, 2019; and BoNYM's Response to Plaintiff's
Motion for Leave to Amend (ECF No. 25) with Brief and
Appendix in Support (ECF Nos. 26-27) filed April 1, 2019;
BoNYM's Reply in Support of Motion to Dismiss (ECF. No.
28) filed April 2, 2019; and Plaintiff's Reply in support
of his Motion for Leave to Amend (ECF No. 30) filed April 15,
2019. This case was automatically referred by United States
District Judge Reed O'Connor to the undersigned for
pretrial management pursuant to Special Order 3-251 on
December 10, 2018. (See ECF No. 3). After
considering the pleadings and applicable legal authorities,
the undersigned RECOMMENDS that Judge
O'Connor GRANT Defendant's Motion to
Dismiss (ECF No. 8) and DISMISS WITH
PREJUDICE Plaintiff's claims.
Roy E. Tolliver, Jr. (“Tolliver”) sued Defendant
BoNYM in his original state court petition for quiet title,
fraud, breach of contract, violations of the Texas Debt
Collection Act (“TDCA”), action for declaratory
relief, trespass to try title, for wrongful foreclosure, and
for violation of the Texas Deceptive Trade Practices Act
(“DTPA”), all concerning BoNYM's actions
related to the property located at 2509 Featherstone Court,
Arlington, Texas 76001 (the “Property”). (ECF No.
1-2). He sought declaratory and various injunctive relief,
actual, statutory, and punitive damages, and attorney fees.
(Id.). On December 10, 2018, BoNYM timely removed
the case to this Court on the basis of diversity
jurisdiction. (ECF No. 1).
fully described below, Tolliver's Second Amended
Complaint (“SAC”) (ECF No. 18-1) is the live
pleading in this case. Accordingly, the following
allegations, taken as true, are derived from Tolliver's
SAC and attachments referred to by the SAC and that are
central to the case. Tolliver alleges he and his spouse,
Sheryl Dickerson, purchased the Property in January 2007.
(Id. at 5). Tolliver and Ms. Dickerson were
informally married on October 25, 2005. (Id. at 4).
On January 24, 2007, Tolliver and Ms. Dickerson signed a
Declaration and Registration of Informal Marriage, which was
filed with the County Clerk of Tarrant County. (ECF No. 18-2
at 5). In the declaration, Tolliver and Ms. Dickerson stated
their informal marriage began on October 25, 2005.
connection with the purchase, a Note in the principal amount
of $441, 000.00 and a Deed of Trust that granted a security
interest in the Property to secure repayment of the Note was
executed. Both the Note and the Deed of Trust (together, the
“Loan”) are attached to the SAC and referred to
by Tolliver in the SAC. (ECF No. 18-2 at 7-9, 16-31).
Tolliver alleges the Note and Deed of Trust were executed by
a “fictitious entity, ” America's Wholesale
Lender (“AWL”). (ECF No. 18-1 at 10). The Deed of
Trust, dated January 30, 2007, states the Borrower is Ms.
Dickerson, who is described as a single person, and the
Lender is America's Wholesale Lender. (ECF No. 18-2 at
16). The Deed of Trust and Note are only executed by Ms.
Dickerson. (Id. at 9, 30). The Deed of Trust was
recorded February 2, 2007 in the Real Property Records of
Tarrant County, Texas as Instrument Number D207039416.
(Id. at 40).
Loan was modified on April 23, 2010 by Ms. Dickerson and BAC
Home Servicing, L.P. (“BAC”). (ECF No. 18-1 at
6). Tolliver attached the loan modification agreement to the
SAC. (ECF No. 18-2 at 54-59). The Home Affordable
Modification Agreement referred to by Tolliver states the
loan will become effective on May 1, 2010. (Id. at
55). The modification agreement was signed by Ms. Dickerson
on April 23, 2010 and by Mortgage Electronic Registration
Systems, Inc. (“MERS”), as nominee for BAC, on
May 10, 2010. (Id. at 59). Tolliver was not a
signatory to the modification agreement.
also attached to the SAC a second loan modification
agreement. (ECF No. 18-2 at 62-67). Ms. Dickerson and Bank of
America, N.A. (“BANA”) executed the agreement.
(Id.). This modification agreement reamortized the
principal due under the Note, which was $410,
378.87(Id. at 63). The first new payment under the
reamortization agreement was due on May 1, 2016.
(Id.). Although Ms. Dickerson (Ms. Tolliver at the
time) signed the reamortization agreement March 31, 2016,
BANA did not sign the modification agreement until August 2,
2016. (Id. at 66-67).
MERS, as beneficiary, held the Deed of Trust as nominee for
AWL, the Lender. (Id. at 17). On August 17, 2017,
MERS, as nominee for AWL and its successors and assigns,
assigned the Deed of Trust to BoNYM, and the assignment was
recorded on August 21, 2017 in the Real Property Records of
Tarrant County, Texas as Instrument Number D217192643. (ECF
No. 18-1 at 20; ECF No. 18-2 at 269-270) (the
“Assignment”). The Assignment also is attached to
the SAC and referred to by Tolliver. Thereafter, BANA, as
servicer, executed on behalf of BoNYM an Appointment of
Substitute Trustee on November 1, 2017, removing the original
trustee and appointing new trustees. (Id. at 6; ECF
No. 18-2 at 71-72). On November 21, 2017, the 231st Judicial
District Court of Tarrant County, Texas appointed a receiver
for the Property to forestall foreclosure during pendency of
divorce proceedings mentioned below. (Id. at 7; ECF
No. 18-2 at). Tolliver alleges that BoNYM first initiated
foreclosure proceedings on December 5, 2017 and continued to
do so through 2018, citing to Exhibit 9. (Id.).
Exhibit 9 contains a Residential Contract for the Property
that shows the Receiver as the Seller with a closing date of
October 31, 2018. (ECF No. 18-2 at 77). A Notice of
Substitute Trustee Sale shows a foreclosure sale of the
Property scheduled on February 2, 2018. (Id. at
Ms. Dickerson moved out of the Property and filed for divorce
in May 2017. (ECF No. 18-1 at 6). Tolliver and Ms. Dickerson
entered into a Rule 11 Agreement awarding the Property to
Tolliver, which was read into the record in their divorce
proceedings on December 18, 2018. (Id.; ECF No. 18-2
at 96-126). Ms. Dickerson executed a Special Warranty Deed
conveying the Property to Tolliver on March 9, 2018.
(Id. at 7; ECF No. 18-2 at 128-131). The Special
Warranty Deed states as consideration for its conveyance to
Tolliver that he assumes the unpaid interest and principal
under the note and agrees to indemnify and hold Ms. Dickerson
harmless from payment of the note and performance under the
Deed of Trust. (ECF No. 18-2 at 128). On April 18, 2018,
Tolliver executed a Deed of Trust to Secure Assumption to
affect the assumption of the Deed of Trust. (Id. at
7; ECF No. 18-2 at 133-140). However, BoNYM is not a
signatory to the assumption agreement. (ECF No. 18-2 at 138).
Tolliver fell behind on his obligation to pay the Note
because he initiated another loan modification process with
BANA. (ECF No. 18-1 at 21). Initially, BANA refused to
discuss a loan modification with Tolliver because he was not
authorized. (Id.). Ms. Dickerson signed a
third-party authorization on July 31, 2017. (Id.;
ECF No. 18-2 at 276). Tolliver alleges he completed all of
the loan modification documents and submitted them to BANA on
May 4, 2018. (Id.; ECF No. 18-2 at 278-280).
describes at length about his woes in executing a new loan
modification with BANA and eventually NewRez LLC fka New Penn
Financial, LLC dba Shellpoint Mortgage Servicing
(“Shellpoint”). On May 11, 2018, an unnamed BANA
representative told him his loan modification had been
approved and to expect a loan modification package. (ECF No.
18-1 at 21). However, he never received the package.
(Id.). Instead, on May 21, 2018, he was notified by
BAC that a new loan servicer, Shellpoint, was appointed.
(Id.). Tolliver recalls an exchange between him and
an undisclosed Shellpoint representative on May 23, 2018. The
Shellpoint representative told Tolliver that Ms. Dickerson
and the receiver stated he would not be getting a loan
modification, but that he would still assume the Note.
(Id.). Tolliver informed the Shellpoint
representative that the statement was not true.
(Id.). The same representative told Tolliver that
Shellpoint had not received the records concerning the Loan
from BANA and that it could take thirty days to be
transferred to Shellpoint. (Id.).
SAC describes numerous discussions and communications with
Shellpoint representatives and specialists between June 15,
2018 and August 9, 2018, all concerning the loan modification
application. (See generally Id. at 22-24). On August
9, 2018, Shellpoint informed Tolliver his email address was
not authorized on the account. (Id. at 24). Tolliver
alleges that BoNYM and Shellpoint knew he was authorized,
citing to a letter signed by Ms. Dickerson and dated May 31,
2018. (Id. at 24; ECF No. 18-2 at 321). The letter
is directed to Shellpoint and appears to refer to Tolliver
and Ms. Dickerson's divorce proceedings. (ECF No. 18-2 at
321). However, the letter does not refer to any authorized
email address. (Id.). Tolliver continued his efforts
to communicate with Shellpoint, but each time, Shellpoint
refused to discuss the loan because he was not authorized on
the account. (ECF No. 18-1 at 25). On September 10, 2018,
Tolliver emailed BoNYM's counsel concerning his
authorization and any alleged revocation of authorization by
Ms. Dickerson. (Id.). BoNYM's counsel responded,
stating Tolliver could not be considered for an assumption
and modification of the note because the state court placed
the Property in receivership, ordered it to be sold, and
denied him the option of retaining the Property through a
refinance or modification. (Id. at 26; ECF No. 18-2
at 327-28). Counsel also provided a reason for BoNYM's
refusal to modify the loan referring to Tolliver's
failure to submit a complete loan modification application.
also makes allegations attacking (1) the Deed of Trust's
execution and Assignment to BoNYM, arguing AWL did not exist
at the time the Note and Deed of Trust were executed; (2) the
negotiation of the note, arguing its endorsement was not
proper; and (3) the securitization and pooling of the Note.
(ECF No. 18-1 at 7-20). However, most of the SAC contains
recitation to case law, describes the merger of Countrywide
Home Loans, Inc. (“Countrywide”) into BANA, and
describes the mortgage securitization process. (Id.
at 4-5, 10-20). Tolliver also alleges that BoNYM has been
dual-tracking his loan by foreclosing on the Property while
he attempted to modify and assume the Note. (Id. at
filed the current action, in part, to forestall BoNYM's
foreclosure proceeding. (ECF No. 1-2 at 9). He was successful
in obtaining a temporary restraining order
(“TRO”) in the state court, enjoining the
foreclosure sale on December 10, 2018. (ECF No. 1-8 at 3).
Tolliver amended his petition in response to the Court's
Order to Replead on January 24, 2019. In the first amended
complaint (“FAC”), Tolliver added two new claims
for violation of 12 C.F.R § 1024.41, and civil
conspiracy. (ECF No. 7 at 10, 12).
filed the instant motion to dismiss the FAC on February 11,
2019. (ECF No. 8). After the Court granted Tolliver an
extension, he filed a Motion for Leave to Amend and
Supplement Complaint and for Joinder of Additional
Defendants, on March 18, 2019, with a proposed Second Amended
Complaint (“SAC”) attached. (ECF No. 18). In the
SAC he added a claim under 24 C.F.R. § 203.604, and
contrary to BoNYM's assertion, the SAC did not abandon
his wrongful foreclosure claim. (ECF No. 18-2 at 33-34).
Additionally, Tolliver seeks joinder of CWABS, Inc.; CWABS
Asset Backed Certificates Trust 2007-3; NewRez LLC fka New
Penn Financial, LLC dba Shellpoint Mortgage Servicing; Bank
of America, N.A., successor by merger to BAC, Countrywide,
and AWL as necessary parties to the suit. (ECF No. 18).
March 21, 2019, Tolliver filed a response brief to
BoNYM's Motion to Dismiss, which supports his motion for
leave to amend and objects to BoNYM's use of documents
outside of the pleadings. (ECF No. 21). The parties timely
filed their replies. The motions are now ripe for decision.
Federal Rule of Civil Procedure 15(a)
15(a)(1) of the Federal Rules of Civil Procedure provides: A
party may amend its pleading once as a matter of course
(A) 21 days after serving it, or
(B) if the pleading is one to which a responsive pleading is
required, 21 days after service of a responsive pleading or
21 days after service of a motion under Rule 12(b), (e), or
(f), whichever is earlier.
Fed. R. Civ. P. 15(a)(1). Rule 15(a) favors of amendment and
requires that leave be granted “freely.”
Chitimacha Tribe of La. v. Harry L. Laws Co., Inc.,
690 F.2d 1157, 1162 (5th Cir. 1982). A court's discretion
to grant leave is severely limited by the bias of Rule 15(a)
favoring amendment. Dussouy v. Gulf Coast Investment
Corp., 660 F.2d 594, 598 (5th Cir. 1981). Leave to amend
“should not be denied ‘unless there is a
substantial reason to do so.'” Jacobsen v.
Osbourne, 133 F.3d 315, 318 (5th Cir. 1998) (quoting
Leffall v. Dallas Indep. Sch. Dist., 28 F.3d 521,
524 (5th Cir. 1994)). A reason is substantial if the proposed
amendment would cause undue delay or prejudice to the
non-movant, if it is motivated by bad faith or dilatory
motives, if there have been repeated failures to cure
deficiencies with prior amendment, or if the amendment is
futile. Foman v. Davis, 371 U.S. 178, 182
(1962); see also Martin's Herend Imports, Inc. v.
Diamond & Gem Trading, 195 F.3d 765, 770
(5th Cir. 1999); Wimm v. Jack Eckerd Corp., 3 F.3d
137, 139 (5th Cir. 1993). In the Rule 15 context, an
amendment is futile if it “would fail to state a claim
for relief upon which relief could be granted.”
Stripling v. Jordan Production Co., LLC, 234 F.3d
863, 873 (5th Cir. 2000). And, if the proposed amendment is
futile, a district court may deny leave to amend even when a
plaintiff is entitled to amend as a matter of course.
United States v. Gonzalez, 592 F.3d 675, 681 (5th
Cir. 2009) (citations omitted).
Federal Rule of Civil Procedure 12(b)(6)
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).
analyzing Tolliver's claims, the undersigned must discuss
whether he should be allowed to amend his complaint as a
matter of course.
Proposed Second Amended Complaint
contends that because Tolliver has already amended his
complaint once, he may only amend his complaint with its
written consent or leave of court. (ECF No. 26 at 7).
Tolliver did not respond to the argument.
BoNYM removed the case to this Court and consistent with the
undersigned's practice of requiring litigants in removed
cases to replead to comply with the federal pleading
standard, the Court entered an order requiring the parties to
replead. (ECF No. 5). Tolliver eventually complied with the
order on January 24, 2019 after being granted an extension.
(ECF No. 7). Ordinarily, a party may amend a pleading only
once as a matter of course. See Fed. R. Civ. P.
15(a). Because Tolliver repleaded in response to the
Court's Order to replead and not in response to a motion
to dismiss or the undersigned's recommendation discussing
deficiencies in his petition, the undersigned will not view
Toliver's FAC as a pleading amended as a matter of
course. Accordingly, Tolliver still had an opportunity to
replead in response to BoNYM's motion to dismiss as a
matter of course under Rule 15(a)(1).
filed its Motion to Dismiss on February 11, 2019. (ECF No.
8). Consistent with Rule 15(a)(1)(B), Tolliver had until
March 4, 2019 to file an amended complaint as a matter of
course. Tolliver received two extension of his response
deadline, the last of which was unopposed by BoNYM, setting
his new deadline to March 18, 2019. (ECF Nos. 13, 16).