Henry v. Chase Home Fin. LLC
| Decision Date | 06 December 2011 |
| Docket Number | CIVIL ACTION NO. H-11-0668 |
| Parties | TRANESSIA HENRY, Plaintiff, v. CHASE HOME FINANCE, LLC, et al., Defendants. |
| Court | U.S. District Court — Southern District of Texas |
This is a suit challenging a mortgage foreclosure. After receiving notice that her home would be sold at a foreclosure sale, the plaintiff, Tranessia Henry, sued Chase Home Finance, LLC ("Chase"), the entity that sent the foreclosure notice, and Barrett Daffin Frappier Turner & Engel, LLP ("BDFTE"), the law firm Chase retained to foreclose on the property. The complaint asserted causes of action for quiet title, wrongful attempted foreclosure, violations of the Fair Debt Collection Practices Act ("FDCPA"), and declaratory relief. The defendants have filed motions to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that the complaint fails to state viable claims against them. In the alternative, the defendants moved for a more definite statement under Rule 12(e). Based on the pleadings; the motions, response, and reply; and the relevant law, this court grants in part and denies in part Chase's motion to dismiss, and grants BDFTE's motion to dismiss. No later than December 15, 2011, the parties must file a proposed scheduling and docket control order that includes a date for filing a motion for summary judgment on the remaining claims.
The reasons for these rulings are explained below.
Henry owns the property located at 1031 N. Teal Estates Circle in Fresno, Texas. (Compl. ¶ 14). On February 10, 2011, she received a notice of substitute trustee sale informing her that her home would be sold at a foreclosure sale on March 1. (Id. ¶¶ 1, 20). The notice was sent by BDFTE, Chase's foreclosure counsel, and listed Chase as the mortgagee and mortgage servicer of the plaintiff's mortgage loan. (Id. ¶¶ 20, 23, 25). Henry alleges that Chase is neither the mortgagee nor the mortgage servicer of her mortgage loan and "is not owner or holder or assignee of any mortgage or promissory note encumbering" her property. (Id. ¶¶ 24, 26, 29). The complaint does not allege the entity Henry believes holds or services the mortgage.
On February 25, Henry sued Chase and BDFTE in federal court, asserting causes of action for quiet title, unlawful foreclosure attempt, FDCPA violations, and declaratory relief. In the first cause of action, Henry alleges that she has "superior and legal title" to her property. (Id. ¶ 33). She further alleges that Chase "claims the right to sell" her property even though Chase "is not named in any Mortgage, Deed of Trust or Assignment recorded in the county records" and "is not the owner or holder of any promissory note encumbering" her property. (Id. ¶¶ 35-37). Henry seeks an order "quieting title to the Property in Plaintiff as of the date the Complaint . . . was filed." (Id. ¶ 39). In the second cause of action, Henry alleges that the defendants "falsely represented" that Chase is the mortgagee "and therefore had a right to foreclose," "scheduled a wrongful sale for March 1, 2011," and "failed to give notice of the sale[] at least 21 days before the date of the sale." (Id. ¶¶ 43-45). Henry seeks "an injunction to stop the wrongful foreclosure attempt, and damages." (Id. ¶ 46). In the third cause of action, Henry alleges that the defendants violated the FDCPA by falselyrepresenting in the notice of foreclosure that Chase has a right to foreclose. (Id. ¶ 55). In the fourth cause of action, Henry seeks a declaratory judgment that the defendants have violated her rights under federal and state laws and that the defendants have no right to foreclose on her property. (Id. ¶ 60).
Both defendants have filed motions to dismiss under Rule 12(b)(6). Chase argues that the quiet title claims fails because under Texas law, mortgagees and mortgage servicers may foreclose on mortgaged property without having to produce the original promissory note; that Texas law does not recognize a cause of action for wrongful attempted foreclosure; that it is not a "debt collector" under the FDCPA; and that no declaratory relief can be awarded absent a viable claim. (Docket Entry No. 5). BDFTE argues that the complaint fails to state claims against it because the allegations are directed solely to Chase. (Docket Entry No. 6, at 3-4). BDFTE also argues that Texas law does not recognize a cause of action for wrongful attempted foreclosure; that it is not a "debt collector" under the FDCPA; and that non-judicial foreclosure is not debt collection under the FDCPA. (Id., at 4-7). In the alternative, both defendants have moved for a more definite statement under Rule 12(e). Henry has responded to both motions, (Docket Entry No. 13), and Chase has replied, (Docket Entry No. 15). The arguments for and against dismissal are analyzed in detail below.
Rule 12(b)(6) allows dismissal if a plaintiff fails "to state a claim upon which relief can be granted." FED. R. CIV. P. 12(b) (6). In Bell Atlantic Corporation v. Twombly, 550 U.S. 544, 555, (2007), the Supreme Court confirmed that Rule 12(b)(6) must be read in conjunction with Rule 8(a), which requires "a short and plain statement of the claim showing that the pleader is entitled torelief." FED. R. CIV. P. 8(a)(2). Twombly abrogated the Supreme Court's prior statement in Conley v. Gibson, 355 U.S. 41, 45-46 (1957), that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." See Twombly, 550 U.S. at 562-63. To withstand a Rule 12(b)(6) motion, a complaint must contain "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. In Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009), the Supreme Court elaborated on the pleading standards discussed in Twombly. The Court explained that "the pleading standard Rule 8 announces does not require 'detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Iqbal, 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 555). Iqbal explained that "[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." Id. (citing Twombly, 550 U.S. at 556). The Iqbal Court noted that "[t]he 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. (citing 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). The Court concluded that "Rule 8 does not empower respondent to plead the bare elements of his cause of action, affix the label 'general allegation,' and expect his complaint to survive a motion to dismiss." Id.
To withstand a Rule 12(b)(6) motion, a "complaint must allege 'more than labels and conclusions,'" and "'a formulaic recitation of the elements of a cause of action will not do.'" Norris v. Hearst Trust, 500 F.3d 454, 464 (5th Cir. 2007) (quoting Twombly, 550 U.S. at 555); see alsoIqbal, 129 S.Ct. at 1949 (quoting Twombly, 550 U.S. at 555). "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Iqbal, 129 S. Ct. at 1949 (alteration in original) (quoting Twombly, 550 U.S. at 557). Dark v. Potter, 293 F. App'x 254, 258 (5th Cir. 2008) (unpublished) (per curiam) (quoting Twombly, 550 U.S. at 556 n.3). "To survive a Rule 12(b)(6) motion to dismiss, a complaint 'does not need detailed factual allegations,' but must provide the plaintiff's grounds for entitlement to relief—including factual allegations that when assumed to be true 'raise a right to relief above the speculative level.'" Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir. 2007) (footnote omitted) (quoting Twombly, 550 U.S. at 555). "Conversely, 'when the allegations in a complaint, however true, could not raise a claim of entitlement to relief, this basic deficiency should . . . be exposed at the point of minimum expenditure of time and money by the parties and the court.'" Cuvillier, 503 F.3d at 401 (quoting Twombly, 550 U.S. at 558).
When a plaintiff's complaint fails to state a claim, the court should generally give the plaintiff at least one chance to amend the complaint under Rule 15(a) before dismissing the action with prejudice. See Great Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 329 (5th Cir. 2002) (); see also United States ex rel. Adrian v. Regents of the Univ. of Cal., 363 F.3d 398, 403 (5th Cir.2004) . However, a plaintiff should be denied leave to amend a complaint if the court determines that "the proposed change clearly is frivolous or advances a claim or defense that is legally insufficient on its face." 6 CHARLES A. WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL PRACTICE AND PROCEDURE §...
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