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Poole v. AXA Equitable Life Insurance Co.

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

September 4, 2019

KAREN POOLE, Plaintiff,
v.
AXA EQUITABLE LIFE INSURANCE COMPANY, AXA EQUITABLE AGRIFINANCE, LLC, and BRAD COTTRELL, Individually, Defendants.

          FINDINGS, CONCLUSIONS, AND RECOMMENDATION TO GRANT DEFENDANTS' MOTION TO DISMISS

          LEE ANN RENO, UNITED STATES MAGISTRATE JUDGE

         Before the Court is Defendant AXA Equitable Life Insurance Company (“AXA Life Insurance”) and Defendant AXA Equitable AgriFinance, LLC's (“AXA AgriFinance”) (collectively, “Lender Defendants”) Motion to Dismiss. (ECF 7). Plaintiff Karen Poole (“Poole”) filed a response (ECF 13), to which the Lender Defendants replied (ECF 16). For the reasons explained below, the Court recommends that the Motion to Dismiss be GRANTED.

         I. BACKGROUND

         On December 31, 2018, Poole filed her Original Petition in the 69th Judicial District Court of Dallam County, Texas. (ECF 1-3 at 7-12). Poole's Original Petition brings claims of slander of title, fraud/misrepresentation, negligence, conversion, aiding and abetting breaches of fiduciary duties, and tortious interference with contracts against the Lender Defendants and Brad Cottrell (“Cottrell”). (Id.). The Lender Defendants' Motion to Dismiss does not seek dismissal of Poole's claims against Cottrell.

         Poole's Original Petition states Entrania Springs Limited Partnership (“Entrania Springs”) is “a Texas Limited Partnership whose main asset consists of ranch/farm land [-i.e., the Entrania Springs property-] primarily located in Dallam County.” (Id. at 8). Poole-a limited partner of Entrania Springs-owns “99% of Entrania Springs.” (Id.). Poole IV, Inc. (“Poole IV”)-the general partner of Entrania Springs-owns “[t]he remaining 1% of Entrania Springs.” (Id.). Poole-a director of Poole IV-also owns “50% of Poole IV.” (Id.). Consequently, Poole allegedly owns a total of “99.5% of Entrania Springs.” (Id.).

         In 2017, Defendant AXA Life Insurance allegedly loaned $9, 900, 000.00 to Poole IV “without [Poole's] knowledge [or] consent.” (Id.). Defendant AXA Life Insurance used the Entrania Springs property as “collateral” to secure the loan through a lien. (Id.). Defendant AXA AgriFinance is the servicer of the loan, and Cottrell is the “local AXA [AgriFinance] agent who worked with Poole IV to acquire the loan.” (Id.). The Lender Defendants allegedly knew that “[Poole] owned 99.5% of Entrania Springs” and “[Poole] had not consented to the loan or to using [the] Entrania Springs [property] as collateral for the loan.” (Id. at 9). The Lender Defendants allegedly “conspired with the ½% owners of Entrania Springs to make the loan and use [Poole's] interests [in the Entrania Springs property] as collateral.” (Id.). Poole also claims the Lender Defendants made the secured loan without her knowledge or consent. (Id.). “No partner of Entrania Springs-including the general partner, Poole IV-had the authority to pledge [the] Entrania Springs [property] as collateral to any loan without [Poole's] authority.” (Id.).

         Among other things, Poole claims that “[Defendant] Cottrell, and the AXA entities he represents, made material statements that were false, and those statements resulted in the $9, 900, 000.00 encumbrance on [Poole's interests in the] Entrania Springs property” and “[t]he statements were made knowing that they were false and to induce action on the false statements.” (Id. 9). Poole further alleges that each and every Defendant knew that “the borrowers on the $9, 900, 000.00 loan at issue did not have the authority to encumber the Entrania Springs real property, ” that “the board of directors of Poole IV and the partners in Entrania Springs . . . owed [Poole] fiduciary duties, ” and that “making the loan-[and] thereby encumbering the Entrania Springs real property-was to the detriment of [Poole] and a breach of fiduciary duties owing to [Poole]” because “[Poole] did not consent to the loan.” (Id. at 10-11). On February 4, 2019, Defendant AXA Life Insurance removed the case to this Court, pursuant to 28 U.S.C. §§ 1332, 1441, on the basis of diversity of citizenship. (ECF 1). Defendant AXA Life Insurance subsequently filed an Amended Notice of Removal. (ECF 29).

         On February 11, 2019, the Lender Defendants filed their Motion to Dismiss and brief in support. (ECF 7-8). The Lender Defendants argue Poole's claims should be dismissed because (1) Poole's claims are barred by collateral estoppel and res judicata due to a previous state court suit[1], and (2) Poole's Original Petition cannot satisfy the Federal Rule of Civil Procedure 12(b)(6) standard because the petition fails to state a claim upon which relief can be granted.

         II. STANDARD OF REVIEW

         Rule 12(b)(6) provides that a defendant may file a motion to dismiss a complaint for “failure to state a claim upon which relief can be granted.” In deciding a Rule 12(b)(6) motion to dismiss, the Court “accepts ‘all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.'” In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007) (quoting Martin K. Eby Constr. Co. v. Dallas Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004)). “However, ‘conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss.'” Ruiz v. Brennan, 851 F.3d 464, n.5 (5th Cir. 2017) (quoting Jones v. Alcoa, Inc., 339 F.3d 359, 362 (5th Cir. 2003)).

         “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “The plausibility standard is not akin to a ‘probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 555-56, “Factual allegations must be enough to raise a right to relief above the speculative level . . .”). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]'-‘that the pleader is entitled to relief.'” Iqbal, 556 U.S. at 679 (quoting Fed.R.Civ.P. 8(a)(2)). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. at 678.

         III. ANALYSIS

         1. SLANDER OF TITLE

         “‘Slander of title' consists of a ‘false and malicious statement made in disparagement of a person's title to property which causes special damages.'” Allen-Pieroni v. Pieroni, 535 S.W.3d 887, 887 (Tex. 2017) (quoting Marrs & Smith P'ship v. D.K. Boyd Oil & Gas Co., 223 S.W.3d 1, 20 (Tex. App.-El Paso 2005, pet. denied)). In order to state a claim for slander of title under Texas law, a plaintiff must allege six elements:

(1) the uttering and publishing of disparaging words;
(2) that are false;
(3) that were malicious;
(4) that special damages were sustained thereby;
(5) that the claimant possessed an estate or interest in the property disparaged; and
(6) loss of a specific sale as a result of the slander.

Henley v. JP Morgan Chase Bank, No. 3:10-CV-1344-P, 2010 WL 11619016, at *2 (N.D. Tex. Dec. 22, 2010) (quoting Hillwood Enters., L.P. v. Intel Corp., No. 4:08CV112, 2010 WL 652821, at *2 (E.D. Tex. Feb. 23, 2010)).

         Poole's Original Petition alleges the Lender Defendants communicated to a third person an untrue statement disparaging her title to the Entrania Springs property, the communication caused her to suffer actual damages, and the Lender Defendants' lien on her title to the Entrania Springs property constitutes a slander of title. However, Poole's slander of title claim is insufficiently pleaded because the Original Petition lacks any allegation that the Lender Defendants maliciously communicated a disparaging false statement to another, that Poole thereby suffered special damages, or ...


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