Bashore v. Bank of America
| Decision Date | 27 February 2012 |
| Docket Number | Case No. 4:11cv93 |
| Court | U.S. District Court — Eastern District of Texas |
| Parties | MATTHEW GREGORY BASHORE, II and ANGELA CHRISTINE BASHORE v. BANK OF AMERICA, COUNTRYWIDE HOME LOANS, INC., MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., BARRETT DAFFIN FRAPPIER TURNER & ENGEL, LLP, NATIONAL DEFAULT EXCHANGE, LP, LITTON LOAN SERVICING, DYCK-O'NEAL, INC., TRAVELERS CASUALTY & SURETY COMPANY OF AMERICA, EXPERIAN INFORMATION SOLUTIONS, INC., COMPUTER SCIENCES CORPORATION and TRANSUNION CORPORATION |
Now before the Court are Defendant Litton Loan Servicing, LP's Amended Motion to Dismiss (Dkt. 76), Dyck O'Neal, Inc. And Travelers Casualty & Surety Company's Motion to Dismiss Plaintiffs First Amended Complaint Under FRCP 12(b)(6) (Dkt. 77), Defendant Mortgage Electronic Registration Systems, Inc.'s Motion to Dismiss Plaintiffs' First Amended Complaint (Dkt. 91), Defendants Bank of America Corporation and Countrywide Home Loans, Inc.'s Motion to Dismiss Plaintiffs' First Amended Complaint (Dkt. 92), and Defendants Barrett Daffin Frappier Turner & Engel, LLP's and National Default Exchange, LP's Motion to Dismiss Plaintiffs' First Amended Complaint (Dkt. 116).As set forth below, the Court finds that the motions should be GRANTED in part and DENIED in part.
This lawsuit arises out of two mortgage loans that were obtained by Plaintiffs Matthew Gregory Bashore, II and Angela Christine Bashore from America's Wholesale Lender. "America's Wholesale Lender" is an assumed name, or "d/b/a," of Countrywide Home Loans, Inc. ("CW/BOA").
On February 27, 2006, Plaintiffs executed a Deed of Trust granting MERS, as nominee for America's Wholesale Lender ("AWL"), a first lien security interest in the property located at 10145 Sanden Drive, McKinney, Texas 75070 (the "Property"). The Deed of Trust secured a promissory note executed by Plaintiffs on the same date promising to repay the original principal amount of $173,330.40, plus interest. On the same date, Plaintiffs executed a Purchase Money Security Document (Second Lien) granting MERS, as nominee of AWL, a second lien against the Property. The Purchase Money Security Document (Second Lien) secures a promissory note executed by Plaintiffs promising to repay the original principal amount of $43,332.60, plus interest. In both the Deed of Trust and the Purchase Money Security Document, it was expressly agreed "MERS is a beneficiary under this Security Instrument." On November 6, 2007, the Property was sold at a foreclosure sale.
Plaintiffs filed this action pro se on February 24, 2011. After several defendants filed motions to dismiss their claims, Plaintiffs sought leave to amended their complaint, which the Courtgranted. See Dkt. 79. Plaintiffs amended their complaint, and, after a scheduling conference before the Court, the case was stayed to allow the Court to address the claims raised by Plaintiffs' First Amended Complaint. See Dkt. 115.
In their amended complaint, Plaintiffs assert various claims and causes of action against numerous defendants who have, in one way or another, been connected with one or both of the loans at issue. Plaintiffs first generally allege that the mortgage documents are invalid and do not represent a valid obligation or encumbrance, that the documents were improperly bifurcated, that the foreclosure sale was invalid, and that the alleged deficiency balance is false and inaccurately reported on their credit history. These claims are asserted against CW/BOA, MERS, Litton, Barrett Daffin, Dyck O'Neal, Experian and Transunion.
Plaintiffs then allege the following specific causes of action: fraud (against Defendant MERS and Dyck O'Neal), violations of the Texas Deceptive Trade Practices Act ("DTPA") (against Defendants CW/BOA, Litton and Dyck O'Neal), violations of Texas Debt Collection Act ("TDCA") (against Defendants CW/BOA, Litton and Dyck O'Neal), violations of the Fair Credit Reporting Act ("FCRA") (against Defendants CW/BOA, Litton and Dyck O'Neal).
Plaintiffs assert no specific cause of action against Defendant Travelers but allege that Travelers is liable for Defendant Dyck-O'Neal's purported TDCA violations pursuant to a $10,000 surety bond. Dkt. 70 at ¶56.
Defendants CW/BOA, MERS, Litton, Barrett Daffin, Dyck O'Neal, and Travelers have now all filed motions to dismiss Plaintiffs' claims against them pursuant to Rule 12(b)(6). Sinceamending their complaint, Plaintiffs have dismissed their claims against Transunion and Experian (see Dkts. 86, 89, 110 and 111).
Rule 12(b)(6) of the Federal Rules of Civil Procedure provides that a party may move for dismissal of an action for failure to state a claim upon which relief can be granted. FED. R. CIV. P. 12(b)(6). The Court must accept as true all well-pleaded facts contained in the plaintiff's complaint and view them in the light most favorable to the plaintiff. Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996). A claim will survive an attack under Rule 12(b)(6) if it "may be supported by showing any set of facts consistent with the allegations in the complaint." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 563, 127 S. Ct. 1955, 1969, 167 L. Ed.2d 929 (2007). In other words, a claim may not be dismissed based solely on a court's supposition that the pleader is unlikely "to find evidentiary support for his allegations or prove his claim to the satisfaction of the factfinder." Id. at 563 n.8.
Although detailed factual allegations are not required, a plaintiff must provide the grounds of his entitlement to relief beyond mere "labels and conclusions," and "a formulaic recitation of the elements of a cause of action will not do." Id. at 555. The complaint must be factually suggestive, so as to "raise a right to relief above the speculative level" and into the "realm of plausible liability." Id. at 555, 557 n.5. "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, 129 S. Ct. 1937, 1949, 173 L. Ed.2d 868 (2009), (quoting Twombly, 550 U.S. at 570, 127 S. Ct. 1955)). For a claim to have facial plausibility, a plaintiff must plead facts that allow thecourt to draw the reasonable inference that the defendant is liable for the alleged misconduct. Gonzalez v. Kay, 577 F.3d 600, 603 (5th Cir. 2009). Therefore, "where 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 shown - that the pleader is entitled to relief." Id. (internal quotations omitted).
The Court first addresses Plaintiffs' allegation that the mortgage documents are invalid and do not represent a valid obligation or encumbrance.
First, Plaintiffs claim that they entered into the mortgage agreement with America's Wholesale Lender ("AWL") and that it was not disclosed to them that AWL was an assumed name for Countrywide. Plaintiffs claim that had they known this they would have "reconsidered their acceptance of the Mortgage Documents." Dkt. 70 at ¶ 14. A review of the record here indicates that Countrywide Home Loans, Inc. filed an assumed name certificate for America's Wholesale Lender three years before Plaintiffs signed the mortgage documents here. See Dkt. 88-1.1 The Court finds that such filing was sufficient under Texas law. See Tex. Bus. & Com. Code § 71.101. The fact that Plaintiffs may have later had the benefit of hindsight does not state a claim here that wouldinvalidate their obligations under the mortgage documents.
Next, Plaintiffs allege that both the Deed of Trust and Purchase Money Security Document are invalid because the designation of MERS in these documents, but not in the promissory notes which they secure, "bifurcates" the notes and the liens rendering them nullities. Plaintiffs further allege that, even if the Deed of Trust were valid, the foreclosure was invalid because "MERS was not legally or contractually authorized to enforce the power of sale" and not "legally authorized to appoint a substitute trustee to conduct the foreclosure sale." Dkt. 70 at ¶25. Plaintiffs also argue that the sale was invalid because the substitute trustee was not an employee of MERS.
Plaintiffs' arguments are not supported by the governing law in this Circuit.
The Deed of Trust here provides:
Dkt. 70-1 at 3. Further, the Purchase Security Document (Second Lien) identifies MERS as a beneficiary acting as a nominee. Dkt. 70-1 at 18.
Plaintiff has argued that MERS' assignment of the mortgage was invalid. Under the Texas Property Code, a mortgagee may authorize a mortgage servicer to service a mortgage and conducta foreclosure sale. See TEX. PROP. CODE. ANN. § 51.0025. Here, the mortgage documents attached by Plaintiffs to their amended complaint have identified MERS as the beneficiary and the nominee for the original lender and its successors and assigns. Thus, MERS is a mortgagee under the Texas Property Code. See TEX.PROP.CODE ANN. § 51.0001(4). Allen v. Chase Home Finance, LLC, 2011 WL 2683192, 3 (E.D. Tex. 2011). Various opinions within the Fifth Circuit have rejected Plaintiff...
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