Wilder v. Mortgage
| Decision Date | 10 February 2017 |
| Docket Number | No. 3:15-CV-4013-N (BF),3:15-CV-4013-N (BF) |
| Parties | BRYAN W. WILDER, Plaintiff, v. OGDEN RAGLAND MORTGAGE, et al., Defendants. |
| Court | U.S. District Court — Northern District of Texas |
This case has been referred to the United States Magistrate Judge for pretrial management. Before the Court are Mortgage Electronic Registration Systems, Inc.'s ("Defendant") Motion to Dismiss [ECF No. 20], and Bryan W. Wilder's ("Plaintiff") Opposition to Defendant's Motion to Dismiss ("Opposition") and Motion to Strike Defendants' Motion and Defenses1 ("Motion to Strike") [ECF No. 28]. For the following reasons, the undersigned respectfully recommends that the District Court GRANT Defendant's Motion to Dismiss [ECF No. 20] and DENY Plaintiff's Motion to Strike [ECF No. 28].
On February 24, 2004, Plaintiff executed a Texas Home Equity Note (the "Note") in the amount of $320,000.00 payable to Ogden Ragland Mortgage ("Ogden"). Compl. 7, ECF No. 2. Plaintiff also executed a Deed of Trust which created a lien on Plaintiff's home located at 1317 Cedar Hill Avenue, Dallas, Texas 75208. Compl. 7, ECF No. 2; Ex. B, ECF No. 2 at 32. On January 30, 2013, Defendant, as a nominee for Ogden, executed an assignment of the loan to JP Morgan Chase Bank, N.A. ("JP Morgan"). Def.'s Br. 1, ECF No. 21; Ex. 1, ECF No. 21-1. JP Morganthereafter assigned the loan to Caliber Home Loans, Inc. ("Caliber"). Def.'s Br. 2, ECF No. 21; Ex. 2, ECF No. 21-2. Plaintiff failed to make 24 regular monthly payments on his home equity loan. Appl., ECF No. 2 at 65. Therefore, Caliber filed an Application for an Expedited Order Under Rule 736 on a Home Equity Loan in the C-68th Judicial District Court of Dallas County, Texas on November 3, 2015. Appl., ECF No. 2 at 64-67.
Plaintiff filed the instant action in the Northern District of Texas on December 18, 2015. Compl., ECF No. 2. In the Complaint, Plaintiff alleges that the defendants violated the Truth in Lending Act ("TILA"), 15 U.S.C. § 1635 et seq., by failing to disclose the identity of the true lender and hiding the fact that Ogden was "paid to pose as the 'lender' when in fact [] Ogden failed to fund the promised loan and as such did not consummate the transaction." Compl. 7, ECF No. 2. Plaintiff seeks rescission under 15 U.S.C. §§ 1635 and 1638(a)(1), and 12 C.F.R. § 226.23. Compl. 12-19, ECF No. 2. Plaintiff also argues that the loan was never consummated due to the failure to disclose. Compl. 19-22, ECF No. 2. Plaintiff further alleges that the defendants are subject to criminal liability under 15 U.S.C. § 1611 for filing false pleadings in state court and seeks restitution under 12 C.F.R. § 1026.23(d)(2). Compl. 22 & 25, ECF No. 2.
A court may dismiss a complaint under Federal Rule of Civil Procedure ("Rule") 12(b)(6) if the complaint, when viewed in a light most favorable to the plaintiff, fails to state a valid claim for relief. See Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000). In considering a Rule 12(b)(6) motion to dismiss, the court takes as true all facts pleaded in the complaint, even if they are doubtful in fact. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A court, at this juncture, does not evaluate a plaintiff's likelihood of success, but only determineswhether a plaintiff has stated a legally cognizable claim. Lone Star Fund V (U.S.), L.P. v. Barclays Bank, P.L.C., 594 F.3d 383, 387 (5th Cir. 2010) (citing Ashcroft v. Iqbal, 556 U.S. 662 (2009)). In resolving a Rule 12(b)(6) controversy, the Court may examine: (1) the complaint and documents attached to the complaint; (2) documents attached to the motion to dismiss to which the plaintiff refers and are central to the plaintiff's claims; and (3) matters of public record. See Herrera v. Wells Fargo Bank, N.A., Civ. Action No. H-13-68, 2013 WL 961511, at *2 (S.D. Tex. Mar. 12, 2013) (citing Lone Star Fund V (U.S.), L.P., 594 F.3d at 387; Collins, 224 F.3d at 498-99; Cinel v. Connick, 15 F.3d 1338, 1341, 1343 n.6 (5th Cir. 1994); United States ex rel. Willard v. Humana Health Plan of Tex., Inc., 336 F.3d 375, 379 (5th Cir. 2003); Funk v. Stryker Corp., 631 F.3d 777, 780 (5th Cir. 2011)).
Although the Court liberally construes the briefs of pro se litigants, Plaintiff's pro se status "does not exempt [him] from compliance with relevant rules of procedural and substantive law." Birl v. Estelle, 660 F.2d 592, 593 (5th Cir. 1981) (citing Faretta v. California, 422 U.S. 806, 834 n.46 (1975)). "One who proceeds pro se with full knowledge and understanding of the risks involved acquires no greater rights than a litigant represented by a lawyer . . . unless a liberal construction of properly filed pleadings be considered an enhanced right."Id. (citing United States v. Pinkey, 548 F.2d 305, 311 (10th Cir. 1977); Haines v. Kerner, 404 U.S. 519, 520 (1972)). "Rather, such a litigant acquiesces in and subjects himself to the established rules of practice and procedure." Id. (citing Pinkey, 548 F.2d at 311; Larkin v. United Ass'n of Plumbers & Pipefitters, 338 F.2d 335, 336 (1st Cir. 1964); United States v. Fowler, 605 F.2d 181, 183 (5th Cir. 1979)).
"A district court generally must afford a pro se complainant an opportunity to amend before dismissing for failure to state a claim." Steele v. Brown, No. 3:16-CV-1116-N (BN), 2016 WL2855584, at *2 (N.D. Tex. Apr. 27, 2016) (citing Gregory v. McKennon, 430 F. App'x 306, 308 (5th Cir. 2011); Bazrowx v. Scott, 136 F.3d 1053, 1054 (5th Cir. 1998)). "Courts therefore typically allow pro se plaintiffs to amend their complaints when the action is to be dismissed pursuant to court order." Fantroy v. First Fin. Bank, N.A., No. 3:12-CV-82-N (BH), 2012 WL 6764551, at *10 (N.D. Tex. Dec. 10, 2012) (citing Robinette v. Merrill Lynch, Pierce, Fenner, & Smith, Inc., No. 3:96-CV-2923-D, No. 3:97-CV-353-D, 2004 WL 789870, at *2 (N.D. Tex. Apr. 12, 2004); Sims v. Tester, No. 3:00-CV-863-D, 2001 WL 627600, at *2 (N.D. Tex. Feb. 13, 2001)). "Pro se litigants may also amend their complaint in response to a recommended dismissal." Id. (citing Swanson v. Aegis Commc'ns Grp., Inc., No. 3:09-CV-41-D, 2010 WL 26459, at *1 (N.D. Tex. Jan. 5, 2010); Scott v. Byrnes, No. 3:07-CV-1975-D, 2008 WL 398314, at *1 (N.D. Tex. Feb. 13, 2008)). Nevertheless, "a court may appropriately dismiss an action with prejudice without giving an opportunity to amend if it finds that the plaintiff has alleged his best case" or that such "amendment is futile." Id. (citing Jones v. Greninger, 188 F.3d 322, 327 (5th Cir. 1999); Foman v. Davis, 371 U.S. 178, 182 (1962); Wimm v. Jack Eckerd Corp., 3 F.3d 137, 139 (5th Cir. 1993)).
"The purpose of the TILA is to protect the consumer from inaccurate and unfair credit practices, and 'to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit.'" Fairley v. Turan-Foley Imports, Inc., 65 F.3d 475, 479 (5th Cir. 1995) (citing 15 U.S.C. § 1601(a)). Regulation Z was promulgated to implement TILA. Id. (citing 12 C.F.R. § 226.1(a)). "A creditor is required by Regulation Z to make certain disclosures to the consumer, 'clearly andconspicuously in writing, in a form that the consumer may keep.'" Id. (citing 12 C.F.R. § 226.17(a)(1)). "Regulation Z sets out certain guidelines for creditors to follow when disclosing the amount financed, the finance charge, and the annual percentage rate to the consumer and demands that these disclosures be accurate." Id. (citing 12 C.F.R. §§ 226.18, 226.22). In order "[t]o promote the Act's purpose of protecting consumers, [the Fifth Circuit] has made clear that creditors must comply strictly with the mandates of the TILA and Regulation Z." Id. "Strict compliance does not necessarily mean punctilious compliance if, with minor deviations from the language described in the Act, there is still a substantial, clear disclosure of the fact or information demanded by the applicable statute or regulation." Id. (citing Smith v. Chapman, 614 F.2d 968, 971 (5th Cir. 1980)).
TILA provides that in the case of any consumer credit transaction in which a security interest will be retained on any property used as the consumer's principal dwelling, the consumer shall have the right to rescind the transaction until midnight of the third business day following the consummation of the transaction or delivery of the material disclosure and rescission forms, whichever is later. . . . If the creditor fails to deliver the forms, or fails to provide the required information, then the consumer's right of rescission extends for three years after the date of consummation of the transaction.
Taylor v. Domestic Remodeling, Inc., 97 F.3d 96, 98 (5th Cir. 1996) (citing 15 U.S.C. § 1635(a) & (f)); see also Turner v. Nationstar Mortg. L.L.C., No. 3:14-CV-1704-L (BN), 2015 WL 9918693, at *8 (N.D. Tex. Nov. 13, 2015) ("In certain credit transactions involving a lien on the borrower's principal dwelling, the borrower has 'the right to rescind the transaction until midnight of the third business day following [its] consummation.'"(citing 15 U.S.C. § 1635(a); 12 C.F.R. § 226.23(a)). However, "TILA expressly provides that the right of rescission does not apply to residential mortgage transactions." Id. (citing 15 U.S.C. § 1635(e)(1); Gipson v. Deutsche Bank Nat'l Trust Co., No. 3:13-CV-4820-L, 2015 WL 2069583, at *10 (N.D. Tex. May 4, 2015)). "A residential mortgagetransaction is 'a transaction in which a mortgage [or] deed of trust . . . is created or retained against the consumer's dwelling to finance the acquisition or initial construction of such dwelling.'" Id. (citing 15 U.S.C. § 1602(w); Gipson, 2015 WL 2069583, at *10).
Plaintiff's first three causes of action seek rescission under 15 U.S.C. §§ 1635 and 1638(a)(1), and 12 ...
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