Preston v. Seterus, Inc.
| Decision Date | 15 March 2013 |
| Docket Number | Civil Action No. 3:12–CV–2395–L. |
| Court | U.S. District Court — Northern District of Texas |
| Parties | Craig B. and Annamarie PRESTON, Plaintiffs, v. SETERUS, INC.; Fannie Mae (Federal National Mortgage Association); McCarthy, Holthus & Ackerman, LLP; Mortgage Electronic Registration Systems, Inc.; Merscorp, Inc.; and CTX Mortgage Company, LLC, Defendants. |
OPINION TEXT STARTS HERE
Craig B. Preston, Irving, TX, pro se.
Annamarie Preston, Irving, TX, pro se.
Mark D. Cronenwett, Lindsay L. Stansberry, Mackie Wolf Zientz & Mann PC, Dallas, TX, Adrian L. Guerra–Paz, Higier Allen & Lautin, P.C., Addison, TX, for Defendants.
Before the court is Defendants' Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6) (“Motion to Dismiss”), filed July 24, 2012. After carefully considering the motion, briefing, pleadings, and applicable law, the court grants in part and denies in part Defendants' Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6) (Doc. 6).
This is a mortgage foreclosure case that was originally brought by Plaintiffs Craig B. Preston and Annamarie Preston (“Plaintiffs”) on July 3, 2012, in the 134th District Court, Dallas County, Texas, against Defendants Seterus, Inc. (“Seterus”); Federal National Mortgage Association (“Fannie Mae”); McCarthy, Holthus & Ackerman, LLP (the “McCarthy law firm”); Mortgage Electronic Registration Systems, Inc. (“MERS”); MERSCORP, Inc. (“MERSCORP”); and CTX Mortgage Company, LLC (“CTX”) (collectively, “Defendants”).
In July 2007, Plaintiffs bought a home located at 671 Senda, # 47, Irving, Texas, 75039 (the “Property”). To finance the purchase of the Property, Plaintiffs signed a promissory note (“Note”) in the amount of $287,939 with CTX as the lender. The Note was secured by a deed of trust (“Deed of Trust”) on the Property that lists MERS as the nominee and beneficiary.1 According to Plaintiffs, the Note changed hands a number of times as a result of assignments by MERS or others. Plaintiffs allege that the Note was sold to a Wall Street trust, which resulted in the securitization 2 or conversion of the Note to a mortgage-backed security as part of a securitized trust that Plaintiffs refer to as a “Real Estate Mortgage Investment Conduit” or “the REMIC.” Pls.' Compl. 6. Plaintiffs allege that the REMIC subsequently assigned the Note to Fannie Mae, and when the Note was assigned to Fannie Mae, it “passed through MERS.” Id. 15. Plaintiffs brought this action in state court after Defendants initiated foreclosure proceedings on the Property. It is unclear from Plaintiffs' Original Complaint [sic] (“Complaint”) in state court, however, which of the Defendants initiated the foreclosure proceedings or when the foreclosure took place. Likewise, although Plaintiffs allege that their mortgage was transferred a number of times, little or no details regarding the alleged assignments and assignees are included in the Complaint.
In their Complaint, Plaintiffs assert claims against all Defendants for wrongful foreclosure; alleged violations of section 12.002 of the Texas Civil Practices and Remedies Code; unjust enrichment; negligent and fraudulent misrepresentation; slander of title and suit to quiet title; negligent supervision; and violations of the Federal Debt Collection Practices Act (“FDCPA”) and the Residential Settlement and Procedures Act (“RESPA”). At the heart of most of Plaintiffs' claims is their contention that Defendants lacked legal authority to transfer or assign the Note and Deed of Trust and foreclose on the Property. Plaintiffs dispute whether MERS had legal authority to make any assignments under the Note and Deed or Trust and contend that even if the initial transfer by MERS was valid, subsequent assignments were invalid because the securitization of the Note caused the Note and Deed of Trust to become split or separated or, alternatively, the initial assignment was to a nonmember of MERS.3
Plaintiffs seek relief in the form of a temporary restraining order to prevent foreclosure on the Property and Plaintiffs' eviction from the Property; a declaratory judgment under Texas law stating that the foreclosure sale is null and void and unenforceable; actual and statutory damages under the FDCPA; costs of court; rescission of the foreclosure, mortgage and Note in the form of a clear title; damages for alleged unfair and deceptive practices; return of all payments by Plaintiffs under the Note, including the down payment; and prejudgment and postjudgment interest.
On July 17, 2012, Defendants removed the case to federal court on the basis of federal question jurisdiction. On July 24, 2012, Defendants moved to dismiss all of Plaintiffs' claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Before considering the Motion to Dismiss, the court conducted two hearings regarding Plaintiffs' requests for a temporary restraining order (“TRO”). The court denied Plaintiffs' requests for a TRO on August 22, 2012, and September 5, 2012, 2012 WL 3848122, after determining that they could not meet all of the requirements for injunctive relief and had an adequate remedy available to them under the Texas Rules of Civil Procedure as to the eviction proceeding pending at that time in the Justice Court in Grand Prairie, Texas.
On November 2, 2012, forty-five days after Defendants filed their reply brief in support of the Motion to Dismiss, Plaintiffs each filed affidavits to which an assignment of Plaintiffs' mortgage from MERS to Fannie Mae and other documents were attached. The evidence was not accompanied by a motion or anything indicating Plaintiffs' reasons for filing the evidence. No objections to the affidavits or documents were asserted by Defendants; however, for the reasons herein explained, the court does not consider Plaintiffs' November 2, 2012 submission in deciding the Motion to Dismiss.
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 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 464, 467 (5th Cir.2004); Baker v. Putnal, 75 F.3d 190, 196 (5th Cir.1996). In ruling on such a motion, the court cannot look beyond the pleadings. Id.;Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir.1999), cert. denied,530 U.S. 1229, 120 S.Ct. 2659, 147 L.Ed.2d 274 (2000). The pleadings include the complaint and any documents attached to it. Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498–99 (5th Cir.2000). Likewise, “ ‘[d]ocuments that a defendant attaches to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff's complaint and are central to [the plaintiff's] claims.’ ” Id. (quoting Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir.1993)).
The ultimate question in a Rule 12(b)(6) motion is whether the complaint states a valid claim when it is viewed in the light most favorable to the plaintiff. Great Plains Trust Co. v. Morgan Stanley Dean Witter, 313 F.3d 305, 312 (5th Cir.2002). While well-pleaded facts of a complaint are to be accepted as true, legal conclusions are not “entitled to the assumption of truth.” Iqbal, 556 U.S. at 679, 129 S.Ct. 1937 (citation omitted). Further, a court is not to strain to find inferences favorable to the plaintiff and is not to accept conclusory allegations, unwarranted deductions, or legal conclusions. R2 Invs. LDC v. Phillips, 401 F.3d 638, 642 (5th Cir.2005) (citations omitted). The court does not evaluate the plaintiff's likelihood of success; instead, it only determines whether the plaintiff has pleaded a legally cognizable claim. United States ex rel. Riley v. St. Luke's Episcopal Hosp., 355 F.3d 370, 376 (5th Cir.2004). Stated another way, when a court deals with a Rule 12(b)(6) motion, its task is to test the sufficiency of the allegations contained in the pleadings to determine whether they are adequate enough to state a claim upon which relief can be granted. Mann v. Adams Realty Co., 556 F.2d 288, 293 (5th Cir.1977); Doe v. Hillsboro Indep....
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... ... does not involve the purchase or lease of goods or services, [Plaintiff does] not qualify as [a] consumer[ ] for purposes of the DTPA.” Preston v. Seterus, Inc., 931 F.Supp.2d 743, 768 (N.D.Tex.2013). Accordingly, Plaintiff is not a consumer under the DTPA. See Walker, 970 F.2d at 123; ... ...