United States District Court, W.D. Texas, Austin Division
U.S. BANK N. A., as Trustee, on behalf of the Holders of J.P. Morgan Mortgage Acquisition Trust 2006-WMC4 Asset Backed Pass-Through Certificates, Series 2006-WMC4, Plaintiff
BRENDA A. MORRIS and SCOTT A. MORRIS, Defendants
HONORABLE LEE YEAKEL UNITED STATES DISTRICT JUDGE
REPORT AND RECOMMENDATION OF THE UNITED STATES
HIGHTOWER UNITED STATES MAGISTRATE JUDGE
this Court is a Motion to Dismiss filed by Defendants Brenda
A. Morris and Scott A. Morris (Dkt. No. 13) and Plaintiff
U.S. Bank's Response (Dkt. No. 14). Defendants did not
file a reply. The District Court referred the above motions
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.
March 26, 2016, U.S. Bank N.A., as trustee, on behalf of the
holders of the J.P. Morgan Mortgage Acquisition Trust
2006-WMC4 Asset Backed Pass-Through Certificates, Series
2006-WMC4 (“U.S. Bank”) filed this action against
Defendants Brenda A. Morris and Scott A. Morris
(“Defendants”) seeking judicial and non-judicial
foreclosure of the real property located at 11801 Bell
Avenue, Austin, Texas 78759 (the “Property”).
(Am. Complaint, Dkt. No. 11). Defendant Scott Morris
purchased the Property by warranty deed with vendor's
lien in 2002. (Id. ¶ 9). In 2006, Defendants
executed a Home Equity Note and Security Instrument
(together, “the Loan Agreement”). (Id.
¶¶ 10-11). U.S. Bank alleges it is the successor in
interest to WMC Mortgage Corporation, the original holder of
the Note and the Security Instrument. (Id.
¶¶ 11-13). U.S. Bank alleges that Defendants have
defaulted on the Loan Agreement by conveying the property to
a third party without the lender's prior written consent
(id. ¶¶ 14, 16), failing to make payments
under the Note (id. ¶¶ 15, 17), and
violating other covenants and conditions of the Security
Instrument (id. ¶ 17). U.S. Bank alleges that
Defendants have failed to make any payments since August 1,
parties have litigated their dispute in a series of cases
before this Court and the Travis County District Court. U.S.
Bank filed its first Application for Home Equity Foreclosure
Order in the 345th District Court of Travis County, Texas,
under Cause No. D-1-GN-07-003494. (Id. ¶ 20).
U.S. Bank “nonsuited” the case by dismissing its
claims on February 15, 2008. (Id.). After a second
notice of acceleration on March 18, 2008, U.S. Bank filed a
second Application for Home Equity Foreclosure Order in the
201st District Court of Travis County, Texas, under Cause No.
D-1-GN-08-001076. (Id. ¶ 21). U.S. Bank
requested a nonsuit in that case on May 20, 2009.
(Id. ¶ 22). U.S. Bank subsequently filed a
third and fourth Application for Home Equity Foreclosure
Order in Travis County Court. (Id. ¶¶
23-28). The 353rd District Court entered a Home
Equity Foreclosure Order granting non-judicial foreclosure on
July 10, 2015. (Id. ¶ 29). Defendants then
challenged the foreclosure in an affirmative suit against
U.S. Bank. (Id. ¶ 30). U.S. Bank removed that
case to this Court, which dismissed the case without
prejudice on January 22, 2016. (Id. ¶ 30
(citing Morris et al v. Select Portfolio Servicing Inc.
et al., No. 1:15-cv-2028-RP (W.D. Tex. Nov. 11, 2015)
(dismissing case after plaintiffs' counsel failed to cure
lack of admission to the Western District of Texas))).
Defendants filed a second affirmative case in Travis County
court on December 5, 2016. (Id. ¶ 32). After
removal, this Court granted summary judgment in favor of U.S.
Bank on January 26, 2018. (Id. ¶¶ 32-33
(citing Morris et al v. Select Portfolio Servicing Inc.
et al., No. 1:16-cv-1315-RP (W.D. Tex. Dec. 16, 2016)
(Order Granting Summ. J., Dkt. 40))). U.S. Bank mailed its
fifth notice of default to Defendants on March 29, 2018,
notice of acceleration on April 30, 2018, and its fifth
Application for Home Equity Foreclosure Order under Cause No.
D-1-GN-18-006996 in the 53rd District Court of Travis County
on November 21, 2018. (Id. ¶¶ 35-36). U.S.
Bank nonsuited that case. (Id. ¶
Bank filed this action on March 26, 2019. (Id.
¶ 37; see also Complaint, Dkt. 1). It alleges
that Defendants “have failed to cure the default since
demand.” (Id. ¶ 38). U.S. Bank seeks an
order for non-judicial foreclosure by public auction pursuant
to the terms of the Loan Agreement and the Texas Property
Code § 51.002. (Id. ¶ 40). Alternatively,
U.S. Bank seeks a judgment for judicial foreclosure and an
order of sale pursuant to Rule 309 of the Texas Rules of
Civil Procedure. (Id. ¶ 43-44). On May 24,
2019, Defendants filed the instant Motion to Dismiss under
Rule 12(b)(1). (Dkt. No. 13). The Court now turns to the
Defendants cite only Rule 12(b)(1) in their motion to
dismiss, two of their arguments raise grounds for dismissal
under Rule 12(b)(6). (See Dkt. No. 13, at 1; 9-11).
The Court includes both legal standards here and explains
this reasoning further in Part III.
Rule of Civil Procedure 12(b)(1) allows a party to assert
lack of subject matter jurisdiction as a defense to suit.
Fed.R.Civ.P. 12(b)(1). Federal district courts are courts of
limited jurisdiction and may only exercise such jurisdiction
as is expressly conferred by the Constitution and federal
statutes. Kokkonen v. Guardian Life Ins. Co. of Am.,
511 U.S. 375, 377 (1994). A federal court properly dismisses
a case for lack of subject matter jurisdiction when it lacks
the statutory or constitutional power to adjudicate the case.
Home Builders Ass'n of Miss., Inc. v. City of
Madison, 143 F.3d 1006, 1010 (5th Cir. 1998). In ruling
on a Rule 12(b)(1) motion, the court may consider any one of
the following: (1) the complaint alone; (2) the complaint
plus undisputed facts evidenced in the record; or (3) the
complaint, undisputed facts, and the court's resolution
of disputed facts. Lane v. Halliburton, 529 F.3d
548, 557 (5th Cir. 2008). “The burden of proof for a
Rule 12(b)(1) motion to dismiss is on the party asserting
jurisdiction.” Ramming v. United States, 281
F.3d 158, 161 (5th Cir. 2001). “Accordingly, the
plaintiff constantly bears the burden of proof that
jurisdiction does in fact exist.” Id.
Rule of Civil Procedure 12(b)(6) allows a party to move to
dismiss an action for failure to state a claim on 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.” Ironshore
Europe DAC v. Schiff Hardin, L.L.P., 912 F.3d 759, 763
(5th Cir. 2019) (quoting Lone Star Fund V (U.S.), L.P. v.
Barclays Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010)).
“A statute of limitations may support dismissal under
Rule 12(b)(6) where it is evident from the plaintiff's
pleadings that the action is barred and the pleadings fail to
raise some basis for tolling or the like.” Jones v.
Alcoa, Inc., 339 F.3d 359, 366 (5th Cir. 2003).