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Mitchell v. Ocwen Loan Servicing, LLC

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

October 31, 2019

STEVE MITCHELL et al., Plaintiffs,
OCWEN LOAN SERVICING, LLC et al., Defendants.



         Before the Court is Defendants Ocwen Loan Servicing, LLC's (“Ocwen”) and Wells Fargo Bank, N.A., as Trustee for Option One Mortgage Loan Trust 2001-A, Asset-Backed Certificates, Series 2001-A's (“Wells Fargo”) Rule 12(b)(6) Motion to Dismiss for Failure to State a Claim (ECF No. 10), filed July 15, 2019; Plaintiffs Steve Mitchell's and Patti Mitchell's Response (ECF No. 16); and Defendants' Reply (ECF No. 18). Having considered the Motion, briefing, and the applicable law, the Court finds that Defendants' Motion to Dismiss should be and is hereby GRANTED.

         I. BACKGROUND[1]

         On or about March 6, 2001, Plaintiffs purchased certain property commonly referred to as 6354 Montego Court, Fort Worth, Texas 76116 (“Property”). Orig. Pet. at ¶¶ 3-4, ECF No. 1-3. In connection with the purchase, Plaintiff Steve Mitchell, signed a promissory note in the amount of $208, 000, in favor of Option One Mortgage Corporation, and Steve and his wife, Plaintiff Patti Mitchell, signed a Deed of Trust naming Option One Mortgage Corporation as the Lender and beneficiary.[2] Id. at ¶ 4. The Property is Plaintiffs' homestead. Id.

         Plaintiffs allege that Wells Fargo represented that it had purchased Plaintiffs' Loan in 2010, but that such a representation is not supported by an examination of the Tarrant County public records. Id. Thus, Plaintiffs assert that because Wells Fargo purportedly lacks authority over their Loan, Ocwen's authority as Wells Fargo's mortgage servicer is likewise unfounded. Id.

         But as Plaintiffs acknowledge in their Original Petition, this is not the first lawsuit between them and Defendants. Orig. Pet. at ¶ 4(G); MTD at ¶ 5, ECF No. 10. On or about August 3, 2015, Plaintiffs previously filed a lawsuit against the same Defendants in Texas state court (“First Lawsuit”). MTD at Ex. 1. The First Lawsuit was removed to this Court. See Steve Mitchell and Patti Mitchell v. Ocwen Loan Servicing, LLC and Wells Fargo Bank, N.A., as Trustee for Option One Mortgage Loan Trust 2001-A Asset-Backed Certificates, Series 2001-A, No. 4:15-CV-006680-O.[3] In the First Lawsuit, the Court granted Defendants' Motion to Dismiss in part (MTD Ex. 2) and then granted Defendants' Motion for Summary Judgment before entering a Modified Final Judgment against Plaintiffs. See MTD Ex. 3. The Modified Final Judgment recited in part that “Wells Fargo is the current legal owner and holder of the Note and mortgagee of the Deed of Trust pursuant to a series of assignments recorded as document numbers D211014736 and D215140917 in the official public records of Tarrant County, Texas.” MTD Ex. 3 at 2. The Modified Final Judgment further provided that “due to the event of default on the Note, Wells Fargo, or its successors or assigns, may enforce its Deed of Trust against the Property through non-judicial foreclosure of the Property as provided in the [Deed of Trust] and section 51.002 of the Texas Property Code.” MTD Ex. 3 at 3.

         Plaintiffs appealed the Modified Final Judgment to the Fifth Circuit Court of Appeals, but the appeal was dismissed on August 10, 2018 for want of prosecution (MTD, Ex. 4). See Mitchell v. Ocwen Loan Servicing, L.L.C., No. 18-10380.

         Plaintiffs filed the instant lawsuit on September 4, 2018. Orig. Pet. Plaintiffs allege that the enforcement of the lien is barred by Wells Fargo's failure to comply with section 505.004 of the Texas Estates Code and section 9.001 of the Texas Business and Commerce Code, and Plaintiffs sought declaratory judgment that any substitute trustee's deed resulting from a September 4, 2018 substitute trustee's sale is void. Id. at ¶ 5. Defendants removed the case to this Court on October 4, 2018. ECF No. 1.

         On July 15, 2019, Defendants filed a Rule 12(b)(6) Motion to Dismiss (ECF No. 10), seeking dismissal primarily on the basis of res judicata. Plaintiffs filed a Response (ECF No. 16) and Defendants filed a Reply (ECF No. 18). The Motion to Dismiss is now ripe for the Court's consideration.


         A. Rule 12(b)(6)

         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 ...

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