Hometrader LLC Removed to Judge Ellison’s Federal Court Who’s Counsel is Bandit Houston Lawyer Clay Vilt

DEFENDANT U.S. BANK NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY BUT SOLELY AS TRUSTEE FOR RMTP TRUST, SERIES 2021 BKM- TT-V REPLY TO PLAINTFF’S RESPONSE TO DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

U.S. Bank National Association not in its individual capacity but solely as Trustee for RMTP Trust, Series 2021 BKM-TT-V, (“US Bank” or “Defendant”), herein designated by Plaintiff as U.S. Bank. N.A., respectfully files this Reply to Plaintiff’s Response to Defendant’s Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6).

In support hereof, Defendant shows this Court as follows:

SUMMARY OF THE REPLY

1.                        Defendant filed a Motion to Dismiss under Rule 12(b)(6) on the basis that Plaintiff Hometrader, L.L.C. fails to state a claim upon which relief can be granted.

Plaintiff, the holder of a subordinate interest in the real property that is the subject of this suit, has failed to plead facts the demonstrate it is entitled to the relief sought under Texas law.

Further, Plaintiff, in its Response to Defendant’s Motion to Dismiss, further fails to address any of the legal issues and standards set forth in the Motion to Dismiss.

Consequently, the Court, based on the pleadings, should dismiss this case with prejudice and therefore permit Defendant to proceed with exercising its right to enforce the power of sale in the underlying Deed of Trust.

ARGUMENT

A.       Defendant’s Reply to Overview of Plaintiff’s Claims.

2.      Contrary to Plaintiff’s claims, Defendant has never asserted that Plaintiff is not the present record owner of the subject property.

3.      Plaintiff’s acquisition of the subject property came with various legal impediments and realties that Plaintiff continues to blindly ignore.

4.      Defendant has never attempted to collect payments on the underlying debt from Plaintiff or in any way suggest that Plaintiff has any financial or legal obligation to pay the debt.

5.      The Court should note that Plaintiff’s obligation to pay the balance on the underlying debt arises only because Plaintiff voluntarily chose to acquire the property and in turn to exercise the equitable right of redemption.

6.      Plaintiff, rather than Defendant, took the actions that triggered the duty to pay on the underlying debt.

7.      Plaintiff can cite no authority that shows it is entitled to receive any notice with respect to the foreclosure sale.

8.      Texas Property Code Section 51.002 requires notice be sent to the debtor.

Plaintiff admits it is not the debtor.

Therefore, under the statute and the caselaw cited in the Motion to Dismiss, Plaintiff is entitled to no notice with respect to any aspect or state of the loan servicing including the notice of sale.

B.     Defendant’s Reply to Plaintiff’s claims for alleged violation of Texas Property Code Section 51.

9.      For the reasons, outlined in the Section A, Plaintiff was not entitled to receive any information on the loan on which it was not a signatory including any notices for the foreclosure sale.

10.  Plaintiff cannot establish contractual privity with Defendant and has not assumed the borrower’s role with respect to any aspect of the servicing associated with the underlying note.

11.  Further, for the reasons outlined in the Motion to Dismiss, in Texas there is no cause of action for alleged violations of Texas Property Code Section 51.002.

C.     Defendant’s Reply to Plaintiff’s claim for Nuisance.

12.    Plaintiff’s claim for nuisance is at best a red herring and at worst inane.

13.   Plaintiff ignores the fact that Defendant has a superior interest in the subject property.

14.    Plaintiff also stealthily avoids discussing how it continues to impermissibly obstruct Defendant’s contractual right to exercise the power of sale in the Deed of Trust.

15.  Plaintiff’s laundry list of actions allegedly constituting interference with its property interest is wholly untethered from the recognized law in Texas as it pertains to the rights and relationship of junior and senior interests in and to real property.

16.  Plaintiff voluntarily purchased the subject property at an HOA foreclosure sale and took subject to Defendant’s lien and all associated actions related to the default of payments for the underlying loan.

17.  Plaintiff fails to identify any act taken by Defendant that is not authorized under Texas law and the loan documents, and how Plaintiff has standing to prevent Defendant, a first perfected lienholder, from exercising its rights as a secured creditor, in and to the subject property.

18.  Plaintiff further fails to affirmatively state Defendant had no right to notice the foreclosure sale.

19.  Plaintiff could have and still can truncate the unwanted inquires and solicitations alleged in its Response by simply paying off the underlying note instead of trying to work a deal to minimize the effects of its own dubious business decisions pertaining to the subject property.

D.   Plaintiff’s Response to the Motion to Dismiss wholly fails to address any of the legal arguments raised in the Motion.

20.                    Plaintiff’s Response presents no new arguments or authorities that would show that the Court should not dismiss this case.

21.                  The Response in large part is nothing but a regurgitation of the matters set forth in the Petition.

22.    Plaintiff’s Response does not address the legal arguments raised in Defendant’s Motion to Dismiss.

23.    Plaintiff’s failure to address the issues raised in the Motion to Dismiss demonstrates Plaintiff simply has plead no viable cause of action against Defendant.

24.      Plaintiff has wholly failed to establish contractual privity that would entitle it to receive any notices with respect to the servicing of the loan.

25.  Plaintiff has further failed to demonstrate that it has complied with the requirements for exercising the right of equitable redemption by paying off the underlying loan even though Defendant has already provided Plaintiff with the amount required to pay off the underlying loan.

26.    Plaintiff’s amended pleading remains fatally defective as no viable cause of action has been articulated.

27.    Having failed to plead a viable cause of action, Plaintiff has no legal basis for obtaining injunctive relief.

CONCLUSION

Defendant therefore respectfully asks this Court to dismiss with prejudice all Plaintiff’s causes of action asserted against it for failure to state a claim which relief may be granted.

Defendants further ask for all other relief in law or equity to which it is justly entitled.

Date: August 7, 2023

Respectfully submitted,

Ghidotti | Berger LLP

/s/ Anthony S. Schroeder
Anthony S. Schroeder, Esq.
State Bar No.16801
Addison Road, Ste. 350
Addison, Texas 75001
Tel: (305) 501-2808
Fax: (954) 780-5578
Email: aschroeder@ghidottiberger.com

ATTORNEY FOR DEFENDANT

CERTIFICATE OF SERVICE

I certify that on August 7, 2023, I served the foregoing document by electronic mail and U.S. first class mail to Plaintiff’s attorney of record Robert C. Vilt.

/s/ Anthony S. Schroeder

Anthony s. Schroeder

PLAINTIFF’S RESPONSE TO DEFENDANT’S AMENDED MOTION TO DISMISS

Hometrader, LLC, Plaintiff herein, hereby files it’s Response to Defendant’s Amended Motion to Dismiss and respectfully shows the Court as follows:

FACTUAL BACKGROUND

1.                  The subject matter of this lawsuit is the real property and the improvements thereon located at 300 Country Crossing Circle, Magnolia, Texas 77354 (the “Property”).

2.                  Hometrader, LLC (“Plaintiff”) purchased the Property on August 5, 2022 at 12:42pm through a Constable’s Sale by virtue of an Order of Sale out of the District Court of Montgomery County, Texas for the 284th Judicial District in Cause No. 20-10-12491-CV.

A true and correct copy of the Constables Deed is attached hereto as Exhibit “1” and incorporated herein for all purposes.

3.                  At that point in time, Plaintiff became the owner of the Property.

Accordingly, Plaintiff contacted Rushmore Loan Management Services (“Rushmore”) attempting to obtain a mortgage loan payoff quote but to no avail.

Instead, Rushmore posted the Property for foreclosure sale to occur on December 06, 2022.

4.                  Therefore, Plaintiff filed Cause No. 22-11-15935; Hometrader, LLC v. U.S. Bank, N.A.; In the 284th Judicial District Court of Montgomery County, Texas.

This Court an Ex-Parte Temporary Restraining Order on November 29, 2022 which enabled Plaintiff to obtain a Payoff Statement dated December 06, 2022.

A true and correct copy of the Payoff Statement is attached hereto as Exhibit “2” and incorporated herein for all purposes.

5.                  With the Payoff Statement in hand, Plaintiff filed the appropriate Notice of Non-Suit on December 07, 2022 and the Court signed the related Order Granting Notice of Non-Suit on December 08, 2022 – that lawsuit was dismissed without prejudice.

6.                  Plaintiff soon realized that the Payoff Statement was inaccurate but believed that all was well and in good faith, through it’s legal counsel, proceeded to negotiate the payoff of the mortgage loan – Plaintiff was mistaken.

As reflected in the email stream between both parties’ legal counsel, Plaintiff informed Defendant that the loan balance was greater than the fair market value of the Property ($297,780 v. $225,000).

A true and correct copy of the related email stream is attached hereto as Exhibit “4” and incorporated herein for all purposes.

7.                  In order to assert its position, Rushmore took the strong-arm approach of instilling its will on Plaintiff by once again posting the Property for foreclosure sale to occur on April 4, 2023 without providing notice to Plaintiff – irrespective of the fact that Defendant knew as a result of the prior litigation that Plaintiff was the new owner of the Property.

A true and correct copy of the Notice of Substitute Trustee Sale, which was provided to Plaintiff by the undersigned legal counsel, is attached hereto as Exhibit “5” and incorporated herein for all purposes.

8.                  Accordingly, Plaintiff alleges that Defendant was about to wrongfully sell its Property at a foreclosure sale on April 04, 2023 without providing the required notices in violation of Texas Property Code and in violation of Plaintiff’s due process rights as reflected in the Affidavit of Anh Truong which is attached hereto as Exhibit “6” and incorporated herein for all purposes.

PROCEDURAL BACKGROUND

9.                  Plaintiff filed Cause No. 23-03-04579 in the 284th Judicial District Court of Montgomery County, Texas; Hometrader, LLC v. U.S. Bank, N.A. (the “State Case”) contesting the pending foreclosure sale of it’s Property by Defendant and alleging causes of action against Defendant for Declaratory Judgment, Violation of Texas Property Code Section 51, and Nuisance.

10.              Defendant removed the State Court case to Federal Court on April 17, 2023.

Defendant filed its Motion to Dismiss on June 13, 2023 to which Plaintiff responds at this time.

OVERVIEW OF PLAINTIFF’S CLAIMS:

DECLARATORY JUDGMENT:

10.              Contrary to Defendant’s assertion, Defendant had actual knowledge that Plaintiff was the owner of record of the Property when it posted the Property for foreclosure sale to occur on April 04, 2023.

Defendant can’t hide behind the fact that Plaintiff is not financially obligated on the underlying mortgage loan promissory note to skirt around its notice obligations under the Texas Property Code – Defendant is required to provide a notice of a pending foreclosure sale to all owners of record listed in the real property records for the county in which the subject property is located ~ Defendant failed to do so when it ignored its obligation to send a foreclose sale notice to Plaintiff.

Accordingly, Plaintiff’s claim for a declaratory judgment that Defendant violated the Texas Property Code Section 51 stands on its merits.

VIOLATION OF TEXAS PROPERTY CODE SECTION 51:

11.              Likewise, as stated above, Defendant had actual knowledge that Plaintiff was the owner of record of the Property when it posted the Property for foreclosure sale to occur on April 04, 2023.

As such, Defendant was required to provide a notice of a pending foreclosure sale to Plaintiff ~ Defendant failed to do so.

Accordingly, Plaintiff’s claim that Defendant violated the Texas Property Code Section 51 stands on its merits.

NUISANCE:

12.              Defendant does not dispute that Plaintiff has a private interest in the Property; nevertheless, Defendant persists in ignoring Plaintiff’s ownership interest in the Property.

In doing so, Defendant has created and maintained a condition that substantially interferes with Plaintiff’s interest in the use and enjoyment of the Property by posting the Property for foreclosure sale however and whenever it wants without providing notice to Plaintiff thereby causing a chaotic environment at the Property from unsolicited inquiries from prospective buyers, foreclosure specialists, and unscrupulous con artists.

This condition caused and continues to cause injury to Plaintiff which resulted and continues to result in Plaintiff’s ongoing damages.

Accordingly, Plaintiff’s claim for nuisance against Defendant stands on its merits.

STANDARD OF REVIEW

13.            Motions to Dismiss under Fed. R. Civ. P. 12(b)(6) are disfavored and rarely granted.

Sosa v. Coleman, 646 F.2d 991, 993 (5th Cir. 1981).

The complaint must be liberally construed in favor of the Plaintiff.

Campbell v. Wells Fargo Bank, 781 F.2d 440, 442 (5th Cir. 1986).

“A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.”

Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)).

CONCLUSION

14.              All of the essential elements of Plaintiff’s causes of action for Declaratory Judgment, Breach of Common Law Tort of Unreasonable Collection Efforts, Violation of Texas Property Code Section 51, and Breach of Duty of Cooperation have been proven by Plaintiff’s evidence and all of Defendant’s arguments have been nullified.

Therefore, the Court should deny Defendant’s Motion to Dismiss and allow this case to proceed to a trial on the merits.

PRAYER

WHEREFORE, PREMISES CONSIDERED, Plaintiff respectfully requests that the Court DENY Defendant’s Motion to Dismiss and for such other and further relief, both general and special, at law or in equity, to which Plaintiff may be entitled.

Respectfully submitted, VILT LAW, P.C.

By: /s/ Robert C. Vilt

ROBERT C. VILT
Texas Bar Number 00788586
Federal Bar Number 20296
5177 Richmond Avenue, Suite 1142
Houston, Texas 77056
Telephone:       713.840.7570
Facsimile:        713.877.1827

ATTORNEYS FOR PLAINTIFF

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing was served on all counsel of record and pro se parties via the court’s electronic filing service on the 22nd day of July, 2023.

Chase A. Berger Ghidotti | Berger LLP
16801 Addison Road, Suite 350
Addison, Texas 75001

/s/ Robert C. Vilt
ROBERT C. VILT

U.S. District Court
SOUTHERN DISTRICT OF TEXAS (Houston)
CIVIL DOCKET FOR CASE #: 4:23-cv-01420

Dismiss for Failure to State a Claim

Dismiss for Failure to State a Claim

ORDER for Initial Pretrial and Scheduling Conference and Order to Disclose Interested Persons. Initial Conference set for 8/11/2023 at 11:15 AM in Courtroom 3A Houston before Judge Keith P Ellison.