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Sissom v. Countrywide Home Loans, Inc.

United States District Court, W.D. Texas

December 30, 2019

SUSAN SISSOM, Plaintiff
v.
COUNTRYWIDE HOME LOANS, INC. D/B/A AMERICA'S WHOLESALE LENDER, THE BANK OF NEW YORK MELLON FKA THE BANK OF NEW YORK AS TRUSTEE FOR THE CERTIFICATE HOLDS CWALT, INC., SERIES 18 CB. AND G. TOMMY BASTIAN, AND MALCOM CISNEROS/TRUSTEE CORPS, Defendants

          REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

          SUSAN HIGHTOWER, UNITED STATES MAGISTRATE JUDGE

         TO: THE HONORABLE ROBERT PITMAN UNITED STATES DISTRICT JUDGE

         Before this Court are Defendants Countrywide Home Loans, Inc. d/b/a America's Wholesale Lender (“Countrywide”) and The Bank of New York Mellon f/k/a The Bank of New York, as Trustee for the Certificate Holder CWALT, Inc., Series 18 CB's (“BoNY”) Motion to Dismiss, filed October 4, 2019 (Dkt. No. 4); Plaintiff's Motion to Remand, filed on October 21, 2019 (Dkt. No. 7); Defendants Malcom Cisneros, a Law Corporation (“MCLC”), and MTC Financial, Inc., d/b/a Trustee Corps' (misnamed by Plaintiff as “Malcolm Cisneros/Trustee Corps”) (“Trustee Corps”) Motion for Dismissal Without Prejudice Pursuant to Texas Property Code § 51.007, filed on October 30, 2019 (Dkt. No. 10); and the various Response Briefs.

         On December 2 and 17, 2019, 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.

         I. BACKGROUND

         This is Susan Sissom's (“Plaintiff”) third lawsuit to prevent the foreclosure of her property located at 106 Eight Oaks Drive, Bastrop, Texas 78602 (the “Property”).

         On April 18, 2006, Plaintiff executed a note (the “Note”) in favor of America's Wholesale Lender (“AWL”) in exchange for a loan for the Property in the principal amount of $241, 792.00 (the “Loan”). Dkt. No. 4-1. The Note was secured by a deed of trust on the Property, in favor of Mortgage Electronic Registration Systems, Inc. (“MERS”), as nominee for AWL and its successors and assigns. Dkt. No. 4-2 (the “Deed of Trust”).

         Plaintiff modified her Loan first in 2010, with BAC Home Loans Servicing, LP, and again in 2012, with Bank of America, NA. On July 18, 2011, MERS assigned the Deed of Trust to BoNY. In February 16, 2013, Resurgent Mortgage Servicing began servicing the Loan. After Plaintiff defaulted on her Loan payments, she was notified that her Property would be foreclosed on and sold on May 2, 2017.

         On May 1, 2017, Plaintiff filed two simultaneous lawsuits in Bastrop County District Court to challenge the foreclosure. Plaintiff filed the first lawsuit against Countrywide, BoNY, and MERS, seeking to enjoin the foreclosure sale of her Property based on her allegations that Defendants Countrywide, BoNY, and MERS failed to send proper notices under Texas Property Code § 51.002, failed to provide her notice of her right to rescind the Loan under the Truth in Lending Act, and failed to inform her of a decision on her loss mitigation application in violation of the Real Estate Settlement Procedures Act (“RESPA”). See Sissom v. Countrywide Home Loans, Inc., Cause No. 524-21 (21st Dist. Ct., Bastrop County, Tex. May 1, 2017) (“Lawsuit I”). Plaintiff also sought a declaratory judgment and a temporary restraining order to stop the foreclosure.

         Defendants Countrywide, BoNY, and MERS removed Lawsuit I to federal court, where it was assigned to the Honorable Robert Pitman under No. 1:17-CV-449-RP. The same defendants then filed a Motion for Judgment on the Pleadings, arguing that Plaintiff's claims were barred as a matter of law and otherwise failed to state a plausible claim for relief. See 1:17-CV-449 at Dkt. No. 7. While Plaintiff failed to file a response to the Motion, she did file multiple frivolous motions with the Court. In its Order addressing the Motion, the District Court noted that due to Plaintiff's failure to file a response and her “contumacious conduct, ” the Court could grant the motion as unopposed. See id., Dkt. No. 18 at p. 2. Despite Plaintiff's “stubborn resistance to the Court's authority” and “willful refusal to comply with the Court's rules, ” the District Court declined to dismiss the case with prejudice without first providing her with the opportunity to amend her complaint since she was proceeding pro se. Id. at p. 3. Thus, the District court ordered Plaintiff to “either obtain Defendants' consent or seek the Court's leave to amend her complaint on or before January 5, 2018.Id.

         On December 26, 2017, Plaintiff filed a Motion for Leave to Amend Complaint and attached her proposed amended complaint, which failed to allege any causes of action. Instead, Plaintiff's proposed amended complaint contained rambling allegations, such as that Countrywide engaged in fraudulent activity and that BoNY did not possess the Note on the Property. The District Court found that Plaintiff's proposed amended complaint “fails to identify a cause of action, ” and therefore “would not survive a motion to dismiss.” Id., Dkt. No. 21 at p. 1-2. Accordingly, the Court denied Plaintiff leave to amend and dismissed Lawsuit I “WITH PREJUDICE.” Id. at p. 2. Plaintiff appealed the Court's Order, and on June 5, 2019, the Fifth Circuit affirmed. Id. at Dkt. No. 25.

         In her second lawsuit to stop the foreclosure, Plaintiff sued BoNY, alleging that BoNY violated RESPA by failing to send her a rejection letter to her loan modification application. See Sissom v. The Bank of New York Mellon, Cause No. 423-4966 (423rd Dist. Ct., Bastrop County, Tex. May 1, 2017) (“Lawsuit II”). Plaintiff also sought a temporary restraining order to stop the foreclosure. Four days after BoNY removed the case to federal court, [1] the parties filed a Joint Stipulation of Dismissal notifying the Court that Plaintiff was dismissing all of her claims against BoNY under Federal Rule of Civil Procedure 41(a)(1)(A)(ii). Id. at Dkt. No. 5. On May 18, 2017, the District Court entered a Final Judgment dismissing the case without prejudice. Id. at Dkt. No. 6.

         On August 27, 2019, Plaintiff filed the instant lawsuit in state court, her third, to stop the foreclosure of the Property. See Sissom v. Countrywide Home Loans, Inc., No. 1051-21 (21st Dist. Ct., Bastrop County, Tex. Aug. 27, 2019). Plaintiff named as defendants Countrywide, BoNY, G. Tommy Bastian, a Texas attorney who was allegedly named as a trustee on the Deed of Trust, and Malcom Cisneros/Trustee Corps, [2] a California law firm (collectively, “Defendants”). As in Lawsuit I, Plaintiff's Complaint fails to identify any causes of action. Instead, Plaintiff's Complaint lists 38 “Statements of Fact” and 31 “Questions of Law.” Dkt. No. 1-2 at p. 11. While not entirely clear, Plaintiff appears to be rehashing her previous allegations that the Note and Deed of Trust were not properly transferred to the Defendants. Plaintiff alleges that because Defendants do not “hold the original Note, ” they lack the authority to foreclose on the Property. Id.

         On September 27, 2019, Defendants Countrywide and BoNY removed this case to federal court on the basis of diversity jurisdiction under 28 U.S.C. § 1332(a). In the Notice of Removal, Countrywide and BoNY argue that Bastian was fraudulently joined to defeat diversity jurisdiction, and argue that Plaintiff cannot demonstrate any right to recover against him in this case. Defendants Countrywide and BoNY also filed the instant Motion to Dismiss, arguing that Plaintiff's Complaint should be dismissed for failure to state a claim under Federal Rules of Civil Procedure Rule 8(a) and 12(b)(6). Defendants Countrywide and BoNY further argue that even if Plaintiff had alleged any causes of action in her Complaint, they would be barred by res judicata.

         On October 21, 2019, Plaintiff filed a Motion to Remand, arguing that Bastian is a necessary party in this lawsuit, and, therefore, Defendants improperly removed this case from state court.

         On October 30, 2019, Defendants MCLC and Trustee Corps filed their own Motion to Dismiss, arguing they are entitled to dismissal under § 51.007(d) of the Texas Property Code because they are unnecessary parties.

         II. LEGAL STANDARDS

         Rule 8(a)(2) of the Federal Rules of Civil Procedure governs the requirements for pleadings that state a claim for relief, requiring that a pleading contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” The standard for the adequacy of complaints under Rule 8(a)(2) is the “plausibility” standard found in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and its progeny. Under this standard, “factual allegations must be enough to raise a right to relief above the speculative level . . . on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Id. at 555-56. If a pleading contains only “labels and conclusions” and “a formulaic recitation of the elements of a cause of action, ” the pleading does not meet the standards of Rule 8(a)(2). Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted).

         Federal 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, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). “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. 2010).

         III. ANALYSIS

         A. Defendants MCLC and Trustee Corps' Motion to Dismiss

         Defendants MCLC and Trustee Corps argue they are unnecessary parties because they were named in this case solely as substitute trustees under the Deed of Trust, and therefore are entitled to dismissal under ...


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