Seeberger v. Bank of Am., N.A.
| Decision Date | 16 December 2015 |
| Docket Number | EP-14-CV-366-KC |
| Parties | RICK J. SEEBERGER AND SUSAN C. SEEBERGER, Plaintiffs, v. BANK OF AMERICA, N.A., BAC HOME LOANS SERVICING, LP, PRLAP, INC., BANK OF AMERICA CORPORATION, VENTURES TRUST 2013 I.H.R., AND BSI FINANCIAL SERVICES, INC., Defendants, VENTURES TRUST 2013 I.H.R., Counter-Plaintiff, v. RICK J. SEEBERGER AND SUSAN C. SEEBERGER, Counter-Defendants. |
| Court | U.S. District Court — Western District of Texas |
On this day, the Court considered Defendants' Motion to Dismiss the Second Amended Complaint and Brief in Support ("Motion to Dismiss"), ECF No. 84, Plaintiffs' Motion for Judgment or to Rule on Plaintiffs' Motion for Reconsideration ("Motion for Judgment"), ECF No. 101, Plaintiffs' Motion for Partial Summary Judgment ("New Motion for Partial Summary Judgment"), ECF No. 112, Defendants' Motions to Strike Plaintiffs' Motion for Partial Summary Judgment (collectively, "Motions to Strike"), ECF No. 114 and ECF No. 117, and Plaintiffs' Reply and Objection to Defendants' Motions to Strike ("Reply and Objection"), ECF No. 118. For the reasons set forth herein, Defendants' Motion to Dismiss is GRANTED, Plaintiffs' Motion for Judgment is DENIED, Plaintiffs' New Motion for Partial Summary Judgment is DENIED as moot, Defendants' Motions to Strike are DENIED as moot, and Plaintiffs' Reply and Objection is DENIED as moot.
This case arises from events surrounding various loans secured against a homestead property located at 6767 Gato Road, El Paso, Texas 79932 (the "Property"). See Second Am. Compl. ("SAC") ¶ 12, ECF No. 51. Plaintiffs Rick and Susan Seeberger ("Plaintiffs") filed their original complaint ("Complaint") in this Court on October 1, 2014. See Compl., ECF No. 1. In their Complaint, Plaintiffs alleged that Defendants Bank of America, N.A. ("BANA") and BAC Home Loans Servicing, LP ("BAC") committed violations of the federal Truth in Lending Act ("TILA"), 15 U.S.C. § 1601 et seq., breached their duties of good faith and fair dealing, and committed common law fraud in relation to two notes secured against Plaintiffs' real property.1 See Compl. 24-26.
Plaintiffs later filed a First Amended Complaint ("FAC"), adding PRLAP, Inc. ("PRLAP") and Bank of America Corporation ("BOA") to the case as Defendants and asserting additional causes of action against all Defendants for violations of the federal Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., and the Texas Fair Debt Collection Practices Act ("TDCA"), Tex. Fin. Code section 392.001 et seq. See FAC ¶¶ 1, 31-32, ECF No. 10. Plaintiffs filed a Second Amended Complaint ("SAC"), which became the active complaint in the case on March 6, 2015. See SAC. The SAC added as Defendants Ventures Trust 2013 I.H.R. ("Ventures") and BSI Financial Services, Inc. ("BSI"), and ultimately alleged violations of TILA, TDCA, FDCPA, and Texas contract law, as well as breach of the duty of good faith and fair dealing, and common law fraud. See SAC 5, 10, 15, 18, 20. Defendants BANA, BAC, PRLAP, and BOA filed a Motion to Dismiss the SAC on June 30, 2015. See Mot. to Dismiss.
The SAC is disjointed and convoluted, however the Court has been able to discern the following facts relevant to its resolution of the instant Motion to Dismiss:2
On December 29, 2003, Plaintiffs obtained a Texas Home Equity loan in the amount of $261,418.00 ("First Loan"), and executed an accompanying note ("First Note") that was secured by a Homestead Lien Contract and Deed of Trust naming BANA as the lender and PRLAP as thetrustee. See FAC ¶ 16.3 That same day, Plaintiffs obtained another Texas Home Equity loan in the amount of $278,261.27 ("Second Loan"), and executed an accompanying note ("Second Note") that was secured by a Deed of Trust naming BANA as the lender and PRLAP as the trustee. Id. ¶ 17.
Plaintiffs ordered a Property Securitization Analysis Report ("Securitization Report"), which indicated that on or about January 29, 2004, BOA split the First Note from its Homestead Lien Contract and Deed of Trust, and the Second Note from its Deed of Trust. SAC ¶ 18(a)(ii). The Securitization Report also indicated that "BOA . . . either sold, transferred, assigned and securitized" the First and Second Notes. Id.; FAC ¶ 19.
On January 29, 2004, BOA also refinanced Plaintiffs' First and Second Notes. See FAC ¶ 22(a). The First Note was refinanced in the amount of $319,000.00 and the Second Note was refinanced in the amount of $263,385.16. Id. ¶ 20. According to Plaintiffs, the Mortgage Electronic Registration Systems (MERS) showed that BANA's branch personnel "handled the documents" in connection with the First and Second Note refinancing or renewal, without notifying Plaintiffs of the securitization of the Notes. SAC ¶ 35(b).
PRLAP knew "that residential mortgage-backed securities . . . trusts held [a] substantial number of sub-standard loans." Id. Moreover, according to Plaintiffs, "PRLAP failed to invoke [its] rights in order to force loan originators and bond issuers to buy back these [residential mortgage-backed securities]." Id.
In late 2005, BOA transferred Plaintiffs' accounts to BOA's "Premier Banking Division." Id. ¶ 36(b). On or about November 2, 2005, the Vice President of the Premier Banking Division in El Paso, Texas, informed Plaintiffs that their accounts were being transferred because they "had been loyal and quality customers." Id.
In late 2005, Plaintiffs applied to refinance the Property so they could "complete construction on additional office facilities on the property and . . . expand business operations." FAC ¶¶ 22-22(a). The First and Second Notes were to be refinanced under this plan (the "Gato Loan"). Id. ¶ 22(a).
The Premier Banking Division led "Plaintiffs to believe the [Gato Loan] was a 'for sure' deal." Id. ¶ 25. However, "[t]he [Gato Loan] was never funded and BOA did not fulfill its commitment to refinance the [First and Second] Notes as promised." Id. ¶ 24. BOA never explained its reasons for not funding the Gato Loan. Id. ¶ 25.
According to Plaintiffs, BOA's failure to fund the Gato Loan contributed to "catastrophic financial losses for Plaintiffs, delays in construction, and extreme inconvenience for employees who could not work in suitable facilities." Id. ¶ 24.
In June 2006, Plaintiffs "took advantage of an offer from BOA referred to as the 'Budget Fitter Program.'" Id. ¶ 28. Plaintiffs state that under this offer, BOA encouraged and permitted them "to skip one payment on each of their mortgage accounts," whereupon the skipped payment would "be added to the end of the mortgage term." Id.; SAC ¶ 95. Plaintiffs state that "[t]o the best of [their] knowledge, they complied with [the program] and were led to believe these payments would be added to the end of the loan term." FAC ¶ 28. Plaintiffs took advantage ofthe offer to use the Budget Fitter Program "in lieu of tendering payments for the month of June 2006." SAC ¶ 30(b).
Plaintiffs assert, however, that BOA "never posted the transactions correctly to the [Plaintiffs'] accounts," which resulted in "BOA show[ing] Plaintiffs one month behind in each of their mortgage accounts." FAC ¶ 28. This caused Plaintiffs to be subject to late fees and additional charges for over six months. Id. Subsequently, Defendants "threatened to foreclose." Id. ¶ 95.
On January 24, 2007, Plaintiffs filed for Chapter 11 bankruptcy. Id. ¶ 29. During Plaintiffs' Chapter 11 bankruptcy proceeding, their lawyer "attempted multiple times to reach a settlement with BOA concerning the administrative error, associated late fees and penalties assessed by Defendants." Id. ¶ 31. Plaintiffs' lawyer was unable to reach an agreement with BOA regarding the mortgage arrearages. Id.
In their proposed Chapter 11 Plan of Reorganization, Plaintiffs "requested the arrearages be added to the end of the loans as was called for in the [Budget Fitter Program]," but did not reach an agreement with BOA. Id. Plaintiffs' proposed Chapter 11 Plan of Reorganization "provided that the Plaintiffs would get/stay current with BOA with a waiver of penalties and interest," however the Bankruptcy Court did not confirm the Plan of Reorganization. Id. ¶¶ 33-34.
On the same day Plaintiffs filed for bankruptcy, BOA also informed Plaintiffs that they were in arrears one month on the accounts associated with the First Note and Second Note, due to Defendants' administrative errors. Id. ¶ 29.
On April 22, 2008, Plaintiffs converted their Chapter 11 bankruptcy to a Chapter 7 bankruptcy. Id. ¶ 35. At that time, "BOA showed Plaintiffs in arrears on their mortgages" in the amount of $3,058.40 for the First Note and $2,686.58 for the Second Note. Id. ¶ 35(a). Plaintiffs state that "if BOA had handled the administrative process related to the [Budget Fitter Program] properly, Plaintiffs would not have been in arrears and late fees and penalties would not have been assessed." Id.
Plaintiffs further state that "Defendants failed to provide an adequate reaffirmation agreement to Plaintiffs" during their Chapter 7 bankruptcy. SAC ¶ 27.
Plaintiffs allege that throughout their bankruptcy proceedings and until June 2008, they made timely payments to BOA. FAC ¶ 36. On June 5, 2008, BOA accepted a $2,686.58 payment for the Second Note. Id. However, Plaintiffs allege that on or about June 19, 2008, "BANA's branch teller personnel" at a BANA location in El Paso, Texas, "ceased accepting payments tendered by Plaintiffs made in a timely manner," SAC ¶ 19, informing Plaintiff Susan Seeberger that Plaintiffs' "mortgage accounts had been closed and payments would no longer be accepted," FAC ¶ 36. According to Plaintiffs' Credit Bureau Reports, their mortgage accounts were closed in August 2008. SAC ¶ 19. From then on, BOA refused to accept payments for the First or Second...
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