United States District Court, W.D. Texas, Austin Division
REPORT AND RECOMMENDATION OF THE UNITED STATES
HIGHTOWER, UNITED STATES MAGISTRATE JUDGE
THE HONORABLE LEE YEAKEL UNITED STATES DISTRICT
this Court is Defendant's Motion for Judgment on the
Pleadings filed July 11, 2019 (Dkt. No. 9). Plaintiff did not
file a Response. On July 18, 2019, the District Court
referred the above motion to the undersigned Magistrate Judge
for Report and Recommendation pursuant to 28 U.S.C. §
636(b)(1), Federal Rule of Civil Procedure 72 and Rule 1 of
Appendix C of the Local Rules of the United States District
Court for the Western District of Texas (“Local
March 4, 2019, Rosilyn Mercer Mills (“Plaintiff”)
filed “Plaintiff's Original Petition and
Application for Temporary Restraining Order and Temporary
Injunction” against Select Portfolio Servicing, Inc.
(“Defendant”), a mortgage loan servicer, in the
200th Judicial District Court of Travis County, Texas.
See Mills v. Select Portfolio Servicing, Inc.,
D-1-GN-19-001092 (200th Dist. Ct. Travis County, Tex. Mar. 4,
2019). Plaintiff's lawsuit seeks a temporary injunction
to stop the foreclosure sale of her property located at 8308
Bridgetown Drive, Austin, Texas 78753
(“Property”). Plaintiff also asserts a claim for
negligent misrepresentation, alleging that Defendant's
representatives made misrepresentations concerning the loan
modification process and the ability to receive a
modification of her debt. Plaintiff also seeks damages in the
form of monetary relief and attorney's fees.
March 27, 2019, Defendant removed this lawsuit to federal
court on the basis of diversity jurisdiction pursuant to 28
U.S.C. §§ 1332, 1441. On July 11, 2019, Defendant
filed the instant Motion for Judgment on the Pleadings under
Federal Rule of Civil Procedure 12(c), arguing that (1)
Plaintiff's single claim of negligent misrepresentation
fails as a matter of law, and (2) the case is moot because
subject lien on the Property has been released and therefore
there is no longer an active controversy between the parties.
standard for Rule 12(c) motions for judgment on the pleadings
is identical to the standard for Rule 12(b)(6) motions to
dismiss for failure to state a claim.” Waller v.
Hanlon, 922 F.3d 590, 599 (5th Cir. 2019) (citing
Doe v. MySpace, Inc., 528 F.3d 413, 418 (5th Cir.
Rule of Civil Procedure 12(b)(6) allows a party to move to
dismiss an action for failure to state a claim upon which
relief can be granted. In deciding a Rule 12(b)(6) motion to
dismiss for failure to state a claim, the court
“accepts all well-pleaded facts as true, viewing them
in the light most favorable to the [nonmovant].” In
re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th
Cir. 2007) (internal quotation marks omitted). The Supreme
Court has explained that a complaint must contain sufficient
factual matter “to state a claim to relief that is
plausible on its face.” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). “A claim has
facial plausibility when the [nonmovant] pleads factual
content that allows the court to draw the reasonable
inference that the [movant] is liable for the misconduct
alleged.” Ashcroft, 556 U.S. at 678.
“While a complaint attacked by a Rule 12(b)(6) motion
to dismiss does not need detailed factual allegations, a
plaintiff's obligation to provide the grounds of his
entitle[ment] to relief requires more than labels and
conclusions, and a formulaic recitation of the elements of a
cause of action will not do.” Twombly, 550
U.S. at 555 (internal quotations and citations omitted).
“Factual allegations must be enough to raise a right to
relief above the speculative level.” Id. The
court's review is 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.
noted above, Plaintiff has failed to respond to
Defendant's Rule 12(c) Motion. Pursuant to Local Rule
CV-7(e), if there is no response filed within the time period
prescribed by the rules, the court may grant the motion as
unopposed. See Local Court Rule CV-7(e)(2)
(responses to dispositive motions due within 14 days of
motion's filing). However, the Court will address the
merits of the Motion because dismissing a case other than on
the merits of the claims is disfavored.
lawsuit asserts a single claim for negligent
misrepresentation against Defendant. Plaintiff alleges that
Defendant's representatives made misrepresentations
regarding the loan modification process and the ability to
receive such a modification.
negligent misrepresentation claim is barred by the economic
loss rule. The economic loss rule “generally precludes
recovery in tort for economic losses resulting from the
failure of a party to perform under a contract.”
Yumilicious Franchise, L.L.C. v. Barrie, 819 F.3d
170, 178 (5th Cir. 2016) (quoting Lamar Homes, Inc. v.
Mid-Continent Cas. Co., 242 S.W.3d 1, 12-13 (Tex.
2007)). “In operation, the rule restricts contracting
parties to contractual remedies for those economic losses
associated with the relationship, even when the breach might
reasonably be viewed as a consequence of a contracting
party's negligence.” Id. at 12-13. The
doctrine applies unless the “duty allegedly breached is
independent of the contractual undertaking and the harm
suffered is not merely the economic loss of a contractual
benefit.” Chapman Custom Homes, Inc. v. Dallas
Plumbing Co., 445 S.W.3d 716, 718 (Tex. 2014).
negligent misrepresentation claim is based on Defendant's
representations regarding the loan agreement between the
parties. Plaintiff has failed to allege any independently
recoverable injury outside of economic loss associated with
the loan agreement with Defendant. See Yumilicious,
819 F.3d at 178 (holding that economic loss rule applied
where plaintiff's fraud and negligent misrepresentation
claims were tied directly to the franchise agreement and
arose solely from the contractual relationship between the
parties); Tyler v. Ocwen Loan Servicing, 2015 WL
5326195, at *2 (N.D. Tex. July 30, 2015), report and
recommendation adopted, 2015 WL 5398478 (N.D. Tex. Sept.
14, 2015) (holding that economic loss rule applied to
plaintiff's fraud claims where claims were based, in
part, on “misleading information in response to her
loan modification application”); Miller v.
CitiMortgage, Inc., 970 F.Supp.2d 568, 587 ...