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Daniels v. Regions Bank

United States District Court, N.D. Texas, Fort Worth Division

September 27, 2019

RANDLE C. DANIELS, Plaintiff,
v.
REGIONS BANK, d/b/a REGIONS MORTGAGE, Defendant.

          MEMORANDUM OPINION AND ORDER

          MARK T. PITTMAN UNITED STATES DISTRICT JUDGE

         Before the Court is Defendant Regions Bank, d/b/a/ Regions Mortgage’s (Regions) Rule 12(b)(6) Motion to Dismiss for Failure to State a Claim (ECF No. 6), filed May 28, 2019. Having considered the Motion, briefing, and the applicable law, the Court finds that Regions’ Motion to Dismiss should be and is hereby GRANTED.

         I. BACKGROUND[1]

         In 1988, Plaintiff Randle C. Daniels acquired certain property, which is commonly known as 4630 Collinwood Avenue, Fort Worth, Texas 76107 (“Property”), and more particularly described as follows:

Being Lots 21, 22, and 23 in Block 41, Chamberlin Arlington Heights, First Filing, an Addition to the City of Fort Worth, Tarrant County, Texas, According to the Map Thereof Recorded in Volume 63, Page 21, Map Records, Tarrant County, Texas.

See Pl.’s Orig. Pet. at ¶ 3.2, ECF No. 1-1. In June 2000, Plaintiff conveyed an undivided one-half interest in the Property to his mother, Johnnie N. Daniels. Id. Since he first acquired the Property, Plaintiff has used and claimed it as his homestead. Id.

         On May 9, 2008, Johnnie signed a Texas Home Equity Note (“Note”) with a principal amount of $315, 000 payable to Western Mortgage Co., a Texas Corporation. Pl.’s Orig. Pet. at ¶ 3.1, ECF No.1-1. Also on May 9, 2008, Johnnie signed a Texas Home [Equity] Security Instrument (“Security Instrument” or “Deed of Trust”). Id. at ¶ 3.3. Plaintiff’s purported signature also appears on the Security Instrument, and the Security Instrument identifies both Plaintiff and Johnnie as “Borrower[s].” Id. at ¶ 3.4.

         Johnnie died on April 14, 2010, and Plaintiff claimed to be the sole owner of the Property. Id. at ¶ 3.5. However, Troy Lee Daniels disputes this claim and contends that Johnnie’s one-half interest is part of her probate estate. Id.

         On March 14, 2017, Regions filed an Application for Expedited Order pursuant to Texas Rule of Civil Procedure 736 (“736 Application”). Pl.’s Orig. Pet. at ¶ 3.6. Regions named Plaintiff and Troy Lee Daniels as Independent Executor of the Estate of Johnnie N. Daniels, Deceased, as respondents. Id. In the 736 Application, Regions asserted that it was the holder of the Note and Security Instrument. Id. at ¶ 3.7. Plaintiff contends that the Note attached to the 736 Application does not reflect any special indorsement to Regions but instead contains an indorsement in favor of Flagstar Bank, FSB and an allonge with a stamped blank indorsement. Id. Plaintiff also alleges that the 736 Application failed to include a notice of default and opportunity to cure that had been sent to him. Id. at ¶ 3.8. The affidavit attached to Regions’ 736 Application stated that the Note had been in continuous default for at least 47 months. Id.

         Despite the alleged deficiencies in Regions’ 736 Application, the Tarrant County Probate Court No. 2 signed an order granting the 736 Application and allowing an expedited foreclosure. Id. at ¶ 3.11. Although Plaintiff acknowledges that he was personally advised by a Regions representative that the Property was scheduled for foreclosure to take place on May 7, 2019, Plaintiff alleges that he did not receive a written notice of the time or place of the sale. Id. at ¶ 3.12. Plaintiff also states that Regions has refused to provide information about the loan to him and has, “on multiple occasions, wrongfully interfered with his possession of and attempts to sell the [P]roperty.” Id. at ¶ 3.13. Prior to the foreclosure sale, Plaintiff filed the instant lawsuit in Tarrant County Court, which automatically stayed the sale. See Tex. R. Civ. P. 736.11. Id. at ¶ 3.14.

         On May 21, 2019, Regions removed the case to this Court (ECF No. 1) and shortly thereafter filed a Motion to Dismiss. See Def.’s MTD, ECF No. 6. Plaintiff has responded (ECF No. 7) and Regions has replied (ECF No. 10). Thus, the Motion to Dismiss is now ripe for our consideration.

         II. LEGAL STANDARD

         Federal Rule of Civil Procedure 8(a) requires a claim for relief to contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Rule 8 does not require detailed factual allegations, but “it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). If a plaintiff fails to satisfy Rule 8(a), the defendant may file a motion to dismiss the plaintiff’s claims under Federal Rule of Civil Procedure 12(b)(6) for “failure to state a claim upon which relief may be granted.” Fed.R.Civ.P. 12(b)(6).

         To defeat a motion to dismiss pursuant to Rule 12(b)(6), a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. “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.” Iqbal, 556 U.S. at 663 (citing Twombly, 550 U.S. at 556). “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 556). “Where a complaint pleads facts that are ‘merely consistent with’ a defendant’s liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.’” Id. (quoting Twombly, 550 U.S. at 557).

         In reviewing a Rule 12(b)(6) motion, the Court must accept all well-pleaded facts in the complaint as true and view them in the light most favorable to the plaintiff. Sonnier v. State Farm Mut. Auto. Ins. Co., 509 F.3d 673, 675 (5th Cir. 2007). The Court is not bound to accept legal conclusions as true, and only a complaint that states a plausible claim for relief survives a motion to dismiss. Iqbal, 556 U.S. at 678–79. When there are well-pleaded factual allegations, the Court assumes their veracity and then determines whether they plausibly give rise to an entitlement to relief. Id.

         “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.” Randall D. Wolcott, M.D., P.A. v. Sebelius, 635 F.3d 757, 763 (5th Cir. 2011) (citations omitted); see also Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007). A court may also consider documents that a defendant attaches to a motion to dismiss if they are referred to in the plaintiff’s complaint and are central to the plaintiff’s claims. Collins, 224 F.3d at 498–99.

         III. ANALYSIS

         Plaintiff asserts claims in his Original Petition for breach of contract, to quiet title, violations of the Texas Debt Collection Practices Act (“TDCPA”) and Deceptive Trade Practices Act (“DTPA”), and he seeks a declaratory judgment. See Orig. Pet. at ¶¶ 4–8, ECF No. 1-1. Regions’s motion to dismiss seeks dismissal of each claim. See Def.’s MTD, ECF No. 6. The Court examines each claim in turn.

         A. Plaintiff’s Breach-of-Contract Claim

         Under Texas law, an allegation of a breach of a deed of trust is brought as a breach-of-contract claim. See Williams v. Wells Fargo Bank, N.A., 884 F.3d 239, 244 (5th Cir. 2018). To state a claim for breach of a deed of trust contract, a plaintiff must allege (1) the existence of a valid contract; (2) performance by the plaintiff; (3) breach by the defendant; and (4) the plaintiff sustained damages as a result of the breach. See id.; S&S Emergency Training Sols., Inc. v. Elliott, 564 S.W.3d 843, 848 (Tex. 2018) (citing USAA Tex. Lloyds Co. v. Menchaca, 545 S.W.3d 479, 501 n.21 (Tex. 2018)); see also Oliphant Fin., LLC v. Galaviz, 299 S.W.3d 829, 834 (Tex.App.-Dallas 2009, no pet.) (citing Hussong v. Schwan’s Sales Enters., Inc., 896 S.W.2d 320, 326 (Tex.App.-Houston [1st Dist.] 1995, no writ)).

         Plaintiff asserts that Regions breached the Security Instrument by failing to provide a notice of default and opportunity to cure before accelerating (“notice of default”). Orig. Pet. at ¶ 4.1, ECF No. 1-1. Plaintiff’s Original Petition further alleges breaches of the Security Agreement for failure to provide Plaintiff with a notice of the foreclosure sale of the Property and for failure to provide Plaintiff with a notice of acceleration. Id. at ¶ 4.4.

         1. Default for missed payments is not fatal to Plaintiff’s claim.

         Relying on an unpublished opinion from the Fifth Circuit, Defendant first argues that Plaintiff fails to state a claim for breach of contract because Plaintiff does not allege the second element of his breach-of-contract claim-performance by Plaintiff.[2]See Ybarra v. Wells Fargo Bank, N.A., 575 Fed.Appx. 471, 474 (5th Cir. 2014). However, more recently in Williams v. Wells Fargo Bank, N.A., the Fifth Circuit addressed a mortgage loan servicer’s contention that the appellants could not maintain a suit for breach of a deed of trust “because they have not alleged facts supporting their own performance under the contract, and therefore fail[ed] to satisfy the second element of their breach of contract claim as a matter of law.” 884 F.3d at 244. Williams explained that Texas law recognizes several exceptions to the general rule that a party in default cannot maintain a breach of contract claim. Id. at 244–45. Namely, that “a party’s default under a contract will only excuse the other party’s performance of the contract’s terms that are dependent upon the promises that the defaulting party failed to perform.” Id. at 244. In Williams, the Fifth Circuit concluded that the term in the deed of trust that obligated the lender to provide notice of a ...


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