Henderson v. Wells Fargo Bank, N.A.

• Decision Date: 30 September 2013
• Docket Number: Civil Action No. 3:12–CV–3935–L.
• Parties: James R. HENDERSON, Plaintiff, v. WELLS FARGO BANK, N.A., Defendant.
• Court: U.S. District Court — Northern District of Texas

974 F.Supp.2d 993

James R. HENDERSON, Plaintiff,

v.WELLS FARGO BANK, N.A., Defendant.

Civil Action No. 3:12–CV–3935–L.

United States District Court,

N.D. Texas,

Dallas Division.

Sept. 30, 2013.

Leslie J. Burgoyne, Law Office of Leslie J. Burgoyne, Hurst, TX, for Plaintiff.

Robert T. Mowrey, Jason L. Sanders, Locke Lord LLP, Jennifer Lynette Kinney, Locke Lord Bissell & Liddell LLP, Dallas, TX, for Defendant.

MEMORANDUM OPINION AND ORDER

SAM A. LINDSAY, District Judge.

Before the court is Defendant Wells Fargo Bank, N.A.'s Motion to Dismiss Plaintiff's First Amended Complaint (Doc. 17), filed January 17, 2013. On April 23, 2013, the motion was referred to United States Magistrate Judge Paul D. Stickney for findings and recommendation (Doc. 29). The court vacates the order of reference (Doc. 29). After carefully considering the motion, briefing, pleadings, and applicable law, the court concludes that all of the claims asserted, except for Plaintiff's contract and wrongful debt collection claims, fail as a matter of law. The court therefore grants in part and denies in part Defendant Wells Fargo Bank, N.A.'s Motion to Dismiss Plaintiff's First Amended Complaint (Doc. 17) and dismisses with prejudice all of Plaintiff's claims except his contract and wrongful debt collection claims that pertain to the allegedly improper placement of insurance on his escrow account and related charges for such insurance before Plaintiff filed for bankruptcy in September 2009. The court also denies Wells Fargo's motion to dismiss Plaintiff's request for an accounting as premature.

I. Procedural and Factual Background

This is a mortgage foreclosure case that was originally brought by Plaintiff James R. Henderson (“Henderson” or “Plaintiff”) on September 27, 2012, in the 14th-A District Court, Dallas County, Texas, against Defendant Wells Fargo Bank, N.A. (“Wells Fargo” or “Defendant”). On September 30, 2012, Wells Fargo removed the case to federal court based on diversity and federal question jurisdiction. In his First Amended Complaint (“Complaint”), Henderson alleges claims for breach of contract, negligence, fraud, and negligent misrepresentation. He also asserts claims, based on alleged violations of the Texas Debt Collection Practices Act (“TDCPA”), the Texas Deceptive Trade Practices Act (“DTPA”), the Residential Settlement and Procedures Act (“RESPA”), and the False Claims Act (“FCA”). Henderson seeks an accounting, economic damages, punitive or treble damages for mental anguish, attorney's fees, costs of court, and any other relief to which he may be entitled. Defendant moved to dismiss all of Plaintiff's claims pursuant to Federal Rule of Civil Procedure 12(b)(6) and, in support of its motion, submitted copies of the original promissory note (“Note”) and deed of trust (“Deed”) referred to in Plaintiff's Complaint.

The property (“Property”) at issue is located at 6903 Robin Willow, Dallas, Texas, 75248, which was purchased by Henderson in March 1978. In January 2003, Henderson obtained a home equity loan in the amount of $187,500 from World Savings Bank (“WSB”). Henderson alleges, on information and belief, that WSB subsequently merged with “Wachovia Bank,” which in turn merged with Wells Fargo. Pursuant to the Note executed by Henderson, he was required to make monthly payments of principal and interest in the amount of $1,228.62. Henderson alleges that the Note and Deed do not require escrow taxes and insurance. Pl.'s Compl. 3, ¶ 7.

Starting in 2008 and 2009, Henderson experienced financial difficulties but continued to make monthly mortgage payments in the original amount due under the Note. In March and June 2009, Wells Fargo requested Henderson to provide proof of insurance for the Property. Both times, Henderson responded by providing a copy of the insurance policy for the Property.

On September 1, 2009, Wells Fargo sent Henderson an “Annual Escrow Account Disclosure Statement,” notifying him that his payment would increase from $1,228 to $1,630 because Wells Fargo had made $4,481.75 in escrow advances for property insurance. Pl.'s Compl. 4. Henderson disputed the establishment and requirement of an escrow account and placement of insurance on the escrow account, provided a copy of the insurance policy that he had obtained for the Property, and requested Wells Fargo to remove the property insurance amount from his escrow account. He nevertheless continued paying the original mortgage payment of $1,228 each month.

On November 11, 2009, Henderson filed for Chapter 7 bankruptcy protection. One week later, Wells Fargo notified Henderson that his monthly payment was going to increase to $2,859.42, and that he owed a total of $14,920.28 for escrow advances made by Wells Fargo. Henderson believed that amount claimed to be owed by Wells Fargo was an error. He therefore contacted Wells Fargo regarding the perceived error and was directed to Wells Fargo's bankruptcy department, which was unable to answer his questions about the escrow account and amount due. Henderson was unable to pay the increased monthly amount but continued to make monthly payments of the original amount under the Note, plus an unspecified additional sum each month.

From 2009 to 2012, when the instant litigation was commenced, Henderson disputed the escrow amounts claimed to be due and owing for insurance and property taxes, and contacted Wells Fargo numerous times by telephone and in writing. He also spoke personally with a Wells Fargo branch manager, who was unable to resolve the issue with his escrow account. Henderson alleges that Wells Fargo repeatedly acknowledged his requests for information and told him that it would look into the issue and get back to him. According to Henderson, however, Wells Fargo was never able to resolve the discrepancy in his escrow account to his satisfaction. Henderson alleges that Wells Fargo provided information regarding his account that included amounts due and charges for “tax penalties,” but that these amounts and charges conflicted with prior figures provided by Wells Fargo, as well as Dallas County property tax records and the 1099 tax form that he received from Wells Fargo. Pl.'s Compl. 8.

In May 2010, and again on September 29, 2010, and October 4, 2010, Henderson attempted unsuccessfully to apply for two different types of loan modifications. Wells Fargo denied having any record of the first application and did not acknowledge the second request by Henderson for a loan modification. On May 27, 2010, Wells Fargo sent Henderson a “Notice of Intent to Foreclose” and letter, stating that it had not received payments for the prior three months or only partial payments. Henderson believed that this statement of his account was inaccurate because he had made three prior payments of $1,630, and the payments had cleared his bank account. On June 28, 2010, Wells Fargo notified Henderson that he was in default and needed to pay $9,626.94 to reinstate the loan. Henderson again disputed the amount owed by telephone and in writing.

Henderson alleges that on July 25, 2010, he mailed a check to Wells Fargo in an unspecified amount for his “monthly mortgage payment” and another letter disputing the escrow amounts and the manner in which his payments were being applied. Pl.'s Compl. 9, ¶ 32. On July 30, 2010, Wells Fargo returned the check, stating that the funds were insufficient to reinstate the loan. Henderson immediately responded in writing to no avail.

On October 11, 2010, Wells Fargo accelerated the amount due under the Note and initiated a judicial foreclosure proceeding in state court. On February 3, 2011, Henderson again resorted to bankruptcy, this time under Chapter 13 of the bankruptcy code, but he ultimately dismissed the bankruptcy proceeding on April 6, 2012, and filed the instant action against Wells Fargo. For the reasons herein discussed, the court concludes that Wells Fargo's motion to dismiss should be granted in part and denied in part.

II. Rule 12(b)(6)—Failure to State a Claim

To defeat a motion to dismiss filed pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); Reliable Consultants, Inc. v. Earle, 517 F.3d 738, 742 (5th Cir.2008); Guidry v. American Pub. Life Ins. Co., 512 F.3d 177, 180 (5th Cir.2007). A claim meets the plausibility test “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. 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.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal citations omitted). While a complaint need not contain detailed factual allegations, it must set forth “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, 127 S.Ct. 1955 (citation omitted). The “[f]actual allegations of [a complaint] 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. (quotation marks, citations, and footnote omitted). When the allegations of the pleading do not allow the court to infer more than the mere possibility of wrongdoing, they fall short of showing that the pleader is entitled to relief. Iqbal, 556 U.S. at 679, 129 S.Ct. 1937.

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 Mutual Auto. Ins. Co., 509 F.3d 673, 675 (5th Cir.2007); Martin K. Eby Constr. Co. v. Dallas Area Rapid Transit, 369 F.3d...