Shastry v. U.S. Bank Nat'Lass'N, 3:16-cv-3335-G-BN
| Decision Date | 27 July 2018 |
| Docket Number | No. 3:16-cv-3335-G-BN,3:16-cv-3335-G-BN |
| Parties | MAHESH SHASTRY f/k/a MAHESH GOPALAKRISHNA and SURYAKALAR R. SHASTRY f/k/a SURYAKALA R. HOSANAGRA, Plaintiffs, v. U.S. BANK NATIONAL ASSOCIATION, AS SUCCESSOR TRUSTEE TO WACHOVIA BANK NATIONAL ASSOCIATION AS TRUSTEE FOR WELLS FARGO ASSET SECURITIES CORPORATION, MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2005-AR16, Defendant. |
| Court | U.S. District Court — Northern District of Texas |
This case has been referred to the undersigned United States magistrate judge for pretrial management pursuant to 28 U.S.C. § 636(b) and a standing order of reference from Senior District Judge A. Joe Fish.
Defendant U.S. Bank National Association, as Successor Trustee to Wachovia Bank National Association as Trustee for Wells Fargo Asset Securities Corporation, Mortgage Pass-Through Certificates Series 2005-AR16, ("U.S. Bank") has filed a Motion to Dismiss (the "MTD"). See Dkt. No. 20. Plaintiffs Mahesh Shastry and Suryakalar R. Shastry have filed a response, see Dkt. No. 23, and U.S. Bank has filed a reply, see Dkt. No. 24.
Plaintiffs have filed a Motion for Leave to File Amended Complaint (the "Motion for Leave"). See Dkt. No. 34. U.S. Bank has filed a response, see Dkt. No. 40, and Plaintiffs have filed a reply, see Dkt. No. 41.
For the reasons and to the extent explained below, the Court should grant Defendant U.S. Bank's Motion to Dismiss [Dkt. No. 20] and should deny Plaintiffs Mahesh Shastry and Suryakalar R. Shastry's Motion for Leave to File Amended Complaint [Dkt. No. 34].
On or about November 1, 2003, Plaintiffs purchased real property located in Coppell, Texas (the "Property"). They signed a promissory note (the "Note") to finance the purchase. And Plaintiffs secured the Note through a Deed of Trust pledging their interest in the Property as security (the "Deed of Trust").
Wells Fargo Bank, N.A., Successor by Merger to Wells Fargo Home Mortgage, Inc., ("Wells Fargo") initially held the Note and Deed of Trust (collectively, the "Loan"). But Wells Fargo later assigned the Loan to U.S. Bank (the "Assignment"). See Dkt. No. 21-2 at 3 of 4.
Plaintiffs filed this lawsuit against U.S. Bank in State court on October 19, 2016. In their First Amended Original Petition for Damages, Declaratory and Injunctive Relief (the "Amended Petition"), Plaintiffs bring claims against U.S. Bank for breach of contract, to quiet title, and for injunctive relief. See Dkt. No. 1-7.
First, as to Plaintiffs' breach of contract claim, Plaintiffs allege that U.S. Bank breached the Deed of Trust in two ways: (1) by charging more money than what Plaintiffs owed and (2) by failing to credit sums that Plaintiffs paid over the life of the Loan.
Second, as to their quiet title claim, Plaintiffs allege (1) that the person executing the Assignment had no authority to transfer an interest in the Property to U.S. Bank and (2) that the Assignment was executed after the closing date set forth in the "agreement creating the trust" (which the parties agree is the "Pooling and Servicing Agreement," or the "PSA"). Plaintiffs accordingly ask the Court to enter a declaratory judgment holding that U.S. Bank's claimed lien against the Property is void and holding that the Deed of Trust is void and ineffective.
Third, as to Plaintiffs' claim for injunctive relief, Plaintiffs allege that U.S. Bank is not entitled to foreclose on the Property and should be prohibited from doing so.
In addition to equitable relief, Plaintiffs seek damages, attorney fees, and costs of court.
On November 21, 2016, U.S. Bank filed its Answer to Plaintiffs' Amended Petition in State court. See Dkt. No. 1-14. U.S. Bank then removed the case to federal court.
And, on August 3, 2017, U.S. Bank filed its MTD that is before the Court. See Dkt. No. 20.
In its MTD, U.S. Bank first argues that each of Plaintiffs' claims fail as a matter of law in so far as they are based on the Assignment because Plaintiffs lack standingto challenge the Assignment.
U.S. Bank further argues that Plaintiffs' breach of contract claim fails as a matter of law because Plaintiffs were in prior material breach. And U.S. Bank argues that Plaintiffs inadequately plead the breach and damages element of their breach of contract claim.
U.S. Bank contends that Plaintiffs' quiet title claim should be dismissed because, in addition to lacking standing to challenge the Assignment, Plaintiffs fail to plead facts establishing that Plaintiffs are current on their payments or that they have paid off the Loan.
And U.S. Bank maintains that, "[b]ecause all of Plaintiffs' substantive causes of action fail, their requests for injunctive and declaratory relief must also be dismissed." Dkt. No. 20 at 15 of 17.
In their response, Plaintiffs argue that the MTD is untimely under Federal Rule of Civil Procedure 12 because U.S. Bank filed a responsive pleading to the Amended Petition in State court before filing its MTD here. Plaintiffs assert that, by not presenting them to the State court, U.S. Bank waived its arguments as to the deficient factual allegations supporting Plaintiffs' claims.
Plaintiffs maintain that their defaulting on the Loan does not bar Plaintiffs from bringing their breach of contract claim.
Plaintiffs contend that their quiet title claim should survive U.S. Bank's MTD because Plaintiffs have standing to challenge the Assignment and can maintain their quiet title action on the basis of a void assignment. But Plaintiffs agree that theirallegations as to the PSA and the timing of the Assignment are "problematic," and Plaintiffs withdraw their quiet title claim to the extent it is based on those PSA allegations. Dkt. No. 23 at 6 of 7.
As to U.S. Bank's remaining arguments - including that Plaintiffs' claims for injunctive and declaratory relief should be dismissed - Plaintiffs assert without explanation that "as to the balance of the Motion to Dismiss, it should be denied." Id. at 7 of 7.
After the MTD became ripe, on June 6, 2018, Plaintiffs filed their Motion for Leave that is also pending before the Court. See Dkt. No. 34.
In their Motion for Leave, Plaintiffs seek leave to file their First Amended Complaint, see Dkt. No. 32; see also Dkt. No. 39 (), which Plaintiffs explain "add[s] a claim here for wrongful foreclosure" and "plead[s] more facts in support of their breach of contract claim," Dkt. No. 34 at 3 of 7.
In response to the Motion for Leave, U.S. Bank argues that the Motion for Leave should be denied because "the amendment would cause undue delay and undue prejudice to Defendant." Dkt. No. 41 at 1.
The undersigned concludes that U.S. Bank's MTD should be granted and that Plaintiffs' Motion for Leave should be denied.
In deciding a Federal Rule of Civil Procedure 12(b)(6) motion, the Court must"accept all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff." In re Katrina Canal Breaches Litig., 495 F.3d 191, 205-06 (5th Cir. 2007). To state a claim upon which relief may be granted, the 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 (2007), and must plead those facts with enough specificity "to raise a right to relief above the speculative level." Id. at 555. "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." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "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." Id. "A claim for relief is implausible on its face when 'the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct.'" Harold H. Huggins Realty, Inc. v. FNC, Inc., 634 F.3d 787, 796 (5th Cir. 2011) (quoting Iqbal, 556 U.S. at 679).
While, under Federal Rule of Civil Procedure 8(a)(2), a complaint need not contain detailed factual allegations, a plaintiff must allege more than labels and conclusions, and, while a court must accept all of the plaintiff's allegations as true, it is "not bound to accept as true a legal conclusion couched as a factual allegation." Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). A threadbare or formulaic recitation of the elements of a cause of action, supported by mere conclusory statements, will not suffice. See id. But, "to survive a motion to dismiss" underTwombly and Iqbal, a plaintiff need only "plead facts sufficient to show" that the claims asserted have "substantive plausibility" by stating "simply, concisely, and directly events" that the plaintiff contends entitle him or her to relief. Johnson v. City of Shelby, Miss., 135 S. Ct. 346, 347 (2014) (per curiam) (citing FED. R. CIV. P. 8(a)(2)-(3), (d)(1), (e)); accord N. Cypress Med. Ctr. Operating Co. v. Cigna Healthcare, 781 F.3d 182, 191 (5th Cir. 2015) .
The United States "Supreme Court has made clear that a Rule 12(b)(6) motion turns on the sufficiency of the 'factual allegations' in the complaint." Smith v. Bank of Am., N.A., 615 F. App'x 830, 833 (5th Cir. 2015) (quoting Johnson, 135 S. Ct. at 347), and the Federal Rules of Civil Procedure "do not countenance dismissal of a complaint for imperfect statement of the legal theory supporting the claim asserted," Johnson, 135 S. Ct....
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