Manno v. BAC Home Loans Servicing, LP
| Decision Date | 26 August 2011 |
| Docket Number | A-11-CA-347 LY |
| Parties | JULIUS J. MANNO v. BAC HOME LOANS SERVICING, LP AND BANK OF AMERICA, N.A. |
| Court | U.S. District Court — Western District of Texas |
Before the Court are: Defendants BAC Home Loans Servicing, LP, and Bank of America, N.A.'s Motion to Dismiss or Alternatively, Motion for More Definite Statement (Clerk's Doc. No. 4) filed May 4, 2011; Plaintiff's Response to Defendants BAC Home Loans Servicing, LP, and Bank of America, N.A.'s Motion to Dismiss or Alternatively, Motion for More Definite Statement (Clerk's Doc. No. 7) filed May 16, 2011; and Defendants' Reply to Plaintiff's Response to Defendants BAC Home Loans Servicing, LP, and Bank of America, N.A.'s Motion to Dismiss or Alternatively, Motion for More Definite Statement (Clerk's Doc. No. 9) filed May 27, 2011. The District Court referred these Motions to the undersigned Magistrate Judge for report and recommendation.
This is a case alleging the wrongful foreclosure of the Plaintiff's home. Julius J. Manno purchased the home in Travis County, Texas, on May 8, 2008. At some point, Plaintiff allowed the loan to go into default and in August of 2009, the loan on the property was referred to the legal counsel for BAC Home Loans Servicing, LP, and Bank of America, N.A. (the "Bank") to initiateforeclosure proceedings. Manno later received notice that the property would be sold at a foreclosure sale on October 6, 2009. To prevent the sale of the property at the foreclosure sale, beginning on September 4, 2009, Manno went to the Bank's location at 2501 South Congress Avenue, Austin, Texas, multiple times in an effort to negotiate with the Bank and get enrolled in a loan workout program. Manno alleges that on September 15, 2009, the Bank's representatives at the South Congress location informed him that he would be given a Loan Reinstatement Agreement ("Agreement") which would be faxed to him the next day. Manno alleges that the Bank's representative told him that the Bank would not foreclose on the property pending a payment of $3,387.80 due on November 9, 2009. Manno alleges that the Bank reconfirmed this agreement several times between September 15, 2009 and October 6, 2009, but the Bank repeatedly failed to send Manno the Agreement paperwork to be signed. On October 6, 2009, the Bank sold the property through a non-judicial foreclosure sale. On November 9, 2009, Manno went to the Bank's South Congress location to make the payment and reinstate the loan. The Bank denied that the Agreement was in effect and refused to take Manno's payment.
On March 23, 2011, Manno filed suit in the 345th District Court, Travis County, Texas, against the Bank. Plaintiff's Original Petition alleged breach of contract, promissory estoppel, negligent misrepresentation, unfair debt collection violations pursuant to Chapter 392 of the Texas Finance Code, violations of the Deceptive Trade Practice Act, and breach of fiduciary duty. On April 28, 2011, the Bank removed this case to federal court. The Bank now moves to dismiss some of Plaintiff's claims, and alternately moves the Court to require Manno to file a more definite statement of his claims.
The Bank moves to dismiss based upon Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim for relief. Rule 12(b)(6) allows for dismissal of an action "for failure to state a claim upon which relief can be granted." While a complaint attacked by a Rule 12(b)(6) motion does not need detailed factual allegations, in order to avoid dismissal, the plaintiff's factual allegations "must be enough to raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007); see also, Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir. 2007). A plaintiff's obligation "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. The Supreme Court recently expounded on the Twombly standard, explaining that a complaint must contain sufficient factual matter to state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, --- U.S. ----, 129 S.Ct. 1937, 1949 (2009). "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. In evaluating a motion to dismiss, the Court must construe the complaint liberally and accept all of the plaintiff's factual allegations in the complaint as true. See In re Katrina Canal Breaches Litigation, 495 F.3d 191, 205 (5th Cir. 2009).
The Bank first argues that Manno has failed to allege specific facts sufficient to support his claims brought pursuant to sections 392.301 and 392.302 of the Texas Finance Code. Section 392.301 of the Texas Finance Code entitled "Threats or Coercion" reads as follows:
Section 392.302 of the Finance Code entitled "Harassment; Abuse" provides that:
Manno alleges that he "has been constantly harassed, threatened, and abused by the [Bank's] attorneys, who are seeking to obtain money from him to satisfy a debt that has already been satisfied." The Bank alleges this is insufficient to sustain a claim pursuant to the Texas Finance Code. The Court disagrees, as Manno has pled facts sufficient to substantiate a right to relief above the speculative level, although he could plead more facts to substantiate these claims. Manno has requested that he be allowed to file an Amended Complaint. See Plaintiff's Response at p. 7. The Federal Rules of Civil Procedure provide that leave to amend "shall be freely given when justice so requires," Fed. R. Civ. P. 15(a), although leave to amend "is by no means automatic," Ashe v. Corley, 992 F.2d 540, 542 (5th Cir. 1993) (internal quotation marks and citation omitted). "[A] district court may refuse leave to amend a complaint if the complaint as amended would be subject to dismissal." Ackerson v. Bean Dredging LLC, 589 F.3d 196, 208 (5th Cir. 2009). Accordingly, Plaintiff's Motion to File an Amended Complaint is GRANTED with regard to his Texas Finance Code claims.
The Bank next claims that Manno has failed to plead facts sufficient to meet the definition of a "consumer" as required to bring a DTPA claim. The Bank asserts that a loan applicant does not qualify as a "consumer" and that borrowing money is not a good or service as required to bring a DTPA claim. Manno responds that his DTPA claims do not relate to a loan application or attempt to seek a loan modification, and that Plaintiff's real property, acquired for his use, forms the basis of his complaint.
In order to establish a claim under the DTPA, a plaintiff must establish that (1) he or she is a consumer, (2) the defendant can be sued under the DTPA, (3) the defendant committed a false,misleading, or deceptive act or practice, and (4) the act or practice was a producing cause of the plaintiff's damages. Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 649 (Tex. 1996). A person qualifies as a consumer under the DTPA by meeting two requirements. First, the person must seek or acquire goods or services by lease or purchase. TEX. BUS. & COM.CODE ANN. § 17.45(4). Second, the goods or services sought or acquired must form the basis of the party's complaint. Melody Home Mfg. Co. v. Barnes, 741 S.W.2d 349, 351-52 (Tex. 1987). Whether a person meets these requirements is a question of law. Johnson v. Walker, 824 S.W.2d 184, 187 (Tex. App. - Fort Worth 1991, writ denied); see also Ortiz v. Collins, 203 S.W.3d 414, 424 (Tex. App. - Houston [14th Dist.] 2006, no pet.). In determining whether a plaintiff is a consumer, the focus is on the plaintiff's relationship to the transaction. Arthur Andersen...
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