STATEMENT OF THE CASE

A.                Procedural Background.

This appeal marks the fourth time Appellants John Burke and Joanna Burke (“Appellants” or “Burkes”) have been before this Court over their delay of the foreclosure of a deed of trust lien. In the first two appeals, the Court determined that the Burkes’ mortgagee¹ was entitled to proceed with foreclosure. (Burke I² and Burke II³). After losing both Burke I and Burke II to their mortgagee Deutsche Bank, the Burkes brought a third lawsuit, electing to sue their mortgage servicer. (Burke III⁴). Burke III has been fully briefed by the parties and is currently pending before the Court awaiting resolution.

Concurrently with filing of Burke III, the Burkes also filed this lawsuit against the lawyers who were retained to defend the mortgagee and mortgage servicer in Burke 1 – Burke III. Those attorneys are Mark Daniel Hopkins, Shelley Hopkins and the law firm of Hopkins Law, PLLC (“Attorney Appellees”).

This lawsuit against the Attorney Appellees was originally filed by the Burkes in the 55th Judicial District Court of Harris County, Texas on November 13, 2018. (ROA.20- 125)(“Burke IV”).

Attorney Appellees removed the lawsuit to the United States District Court for the Southern District of Texas, Houston Division on the basis of federal question jurisdiction. (ROA.11-136).

Thereafter, the Burkes filed a Motion to Remand based upon their misunderstanding of federal question jurisdiction. (ROA.172-197).

The Burkes’ Motion to Remand was denied by the District Court. (ROA.513-515).

On December 10, 2018, Attorney Appellees filed a Rule 12(b)(6) Motion to Dismiss largely based upon the application of the attorney immunity doctrine. (ROA.145-165). The Burkes requested leave to amend their complaint, and the District Court granted that leave observing “The Burkes have not previously filed any amended complaints.” (ROA.514). The Motion to Dismiss was thereafter denied as moot upon the Burkes’ repleading. (ROA.861).

On March 29, 2019, the Burkes filed their First Amended Complaint, again only asserting claims taking issue with the manner in which the Attorney Appellees represented the mortgagee and mortgage servicer in Burke I – Burke III. (ROA.531- 690).

In response, on April 5, 2019, Attorney Appellees filed their second Rule 12(b)(6) Motion to Dismiss, seeking dismissal of the Burkes’ amended claims. (ROA.691-712).

The Burkes filed their Response to the Motion to Dismiss on April 12, 2019. (ROA.733-790).

The Response cites to William Shakespeare’s musing “The first thing we do, let’s kill all the lawyers.” (ROA.734). The Burkes then further explain that the seek nothing more than,

To correct an injustice and ensure the attorneys’ responsible are held liable for their civil actions as well as their crime[s] of moral turpitude, including a crime against property owned by Plaintiffs, by defrauding them by fraudulent misrepresentations to the Court[s], and other unlawful shameful acts (ROA.736).

The Burkes additionally asked, without citing an explanation or basis, for leave to amend their complaint a second time. (ROA.729-732).

On September 10, 2019, the Magistrate assigned to handle pre-trial matters held a status conference in the case in connection with his case management duties.

Discussion ensued at the status conference, with the Burkes clarifying that this lawsuit was brought because the Burkes, “[D]on’t like the way he [Hopkins] castigated us and lied about us.” (ROA.1245). The Magistrate followed up asking, “Inside the last lawsuit?,” with the Burkes responding “Yeah.” (ROA.1245-1246).

At the conclusion of the status conference, and despite the Attorney Appellees’ 12(b) motion being pending for five months, the Magistrate extended the Burkes the ability to respond to Attorney Appellees’ 12(b) motion until September 30, 2019. (ROA.1251)(ROA.1009).

Thereafter, the Burkes filed a flurry of various motions airing perceived injustices suffered by the Burkes,⁵ before filing their Response to Motion to Dismiss on September 30, 2019. (ROA.1044-1066).

The Magistrate Judge issued his Memorandum and Recommendation on February 24, 2020, recommending that Appellees’ Motion to Dismiss Plaintiffs’ Complaint be granted and the case be dismissed with prejudice. (ROA.1098-1115).

The Burkes filed their Objections to Memorandum and Recommendation on March 9, 2020. (ROA.1116-1153).

The Court adopted the Magistrate’s Memorandum and Recommendation on March 18, 2020. (ROA.1157) and entered a Final Judgment dismissing the Burkes’ lawsuit with prejudice. (ROA.1158).

The Burkes filed their Notice of Appeal on April 15, 2019. (ROA.1215-1218).

B.                Factual Background. 

The underlying facts, as previously analyzed by this Court in Burke I, Burke II, and briefed by Attorney Appellees in Burke III remain unchanged. Simply stated, on May 21, 2007, Joanna Burke executed a $615,000.00 Texas Home Equity Note (the “Note”). (ROA.24-27). The Note is secured by a Texas Home Equity Security Instrument (“Deed of Trust”), which encumbers real property commonly known as 46 Kingwood Greens Drive, Kingwood, Texas 77339 (the “Property”). (ROA.28- 46).

While only Joanna Burke executed the Note, both Joanna Burke and John Burke executed the Deed of Trust as both are in title to the Property.

Despite receiving the benefits of the Note, Joanna Burke stopped making payments on or about January 1, 2010.

As a result of Joanna Burke’s failure to re-pay the Note, this Court determined that the Burkes’ mortgagee (Deutsche Bank) could proceed with the foreclosure of the Deed of Trust. See Deutsche Bank Nat’l Trust Co. v. Burke, 902 F.2d 548 (5th Cir. 2018).

After the conclusion of Burke II, the Burkes’ filings in Burke III and Burke IV have become more personal and caustic⁶ as the Burkes expand their list of perceived wrongdoers. Attorney Appellees, now squarely within the eye of the Burkes’ pro se storm, supposedly did the Burkes harm by:

1. Appearing as appellate counsel for Deutsche Bank in Burke I after the close of evidence [as bounty hunters] to “bully the judge into opening evidence previously unavailable for four years.” Appellants’ Brief, at 14;

2. Intentionally making false representations of material facts and concealing material facts in the civil and appellate action [Burke I and Burke II]. (ROA.532);
3. Improperly, holding/offering/concealing the Burkes’ mortgage loan file provided to Attorney Appellees in connection with their handling of the appellate litigation of Burke I and Burke II; (ROA.560) and
4. Acting as “debt collectors” without first having a surety bond. (ROA.422-423).

As best as Attorney Appellees could glean from the Burkes’ 160 page Amended Complaint, and as observed by the Magistrate Judge, “[T]he Burkes now claim that Defendants’ [Attorney Appellees] conduct during the underlying litigation constituted fraud, civil conspiracy, and unjust enrichment, and that it violated both the Texas Debt Collection Act (“TDCA”) and the Fair Debt Collection Practices Act (“FDCPA”).” (ROA.1100).⁷

Finding that all conduct undertaken by Attorney Appellees was done in Attorney Appellees’ representation of their clients, the Magistrate Judge recommended that all of the Burkes’ claims, save and except their TDCA and FDCPA claims be dismissed with prejudice given that the doctrine of attorney immunity shields attorneys from claims such as those brought by the Burkes. (ROA.1103-1108).

The Magistrate Judge separately analyzed whether any of the factual allegations within the Burkes’ Amended Complaint could serve as a basis for a TDCA or FDCPA claim as attorney immunity “does not apply if a statute expressly abrogates the defense.” (ROA.1108).

As described in the Magistrate’s Report, the Magistrate “scoured the record for any factual statements that might arguably support the Burkes’ statutory claims.”(ROA.1109).

In so doing, the Magistrate listed each factual statement made by the Burkes within their Amended Complaint regarding Attorney Appellees’ conduct. (ROA.1109-1110).

The list consists entirely of items performed routinely by attorneys such as filing notices of appearance, reviewing documents, phoning opposing counsel, filing documents with the court, and advancing legal arguments. Id.

The Magistrate determined that the allegations made by the Burkes do not plausibly give rise to the asserted TDCA or FDCPA violations as the Burkes fail to set forth sufficient facts to show that Attorney Appellees are “debt collectors” and that Attorney Appellees engaged in any conduct prohibited by the TDCA or FDCPA. (ROA.1111-1112).

The Burkes objected to the Magistrate’s Report by simply re-hashing their prior arguments. (ROA.1116-1135).

The District Court then gave due consideration to the entire record and the applicable law and then adopted the Magistrate’s Memorandum and Recommendation as the District Court’s Memorandum and Order. (ROA.1157).

The District Court then entered Final Judgment dismissing all of the Burkes’ claims against the Attorney Appellees. (ROA.1158).

SUMMARY OF THE ARGUMENT

The Burkes want nothing more than to re-litigate what has previously been decided by the Court in Burke I, Burke II and pending in Burke III. The Burkes fixate on imagined wrongdoer after wrongdoer, trying to lay blame on others for their failure to repay their Note as contractually agreed. This litigation reflects that it is now Appellees’ time to respond to the Burkes’ ire.

Federal Question Jurisdiction. The District Court did not err in denying the Burkes’ Motion to Remand. The Burkes’ Complaint clearly invokes federal question jurisdiction pursuant to the “well-pleaded complaint rule.”

The very first paragraph of the Burkes’ Complaint advances claims for violation of the Fair Debt Collection Practices Act, or FDCPA 15 U.S. Code §1692.

Federal question jurisdiction exists “when a federal question is presented on the face of plaintiff’s properly pleaded complaint.” Caterpiller v. Williams, 482 U.S. 386, 392 (1987).

Attorney Immunity. The Burkes filed this lawsuit after losing a hard-fought appeal before the Court regarding the foreclosure of their home by Deutsche Bank National Trust Company. In attempting to rationalize away their loss, the Burkes argue in this current lawsuit that appellate counsel for Deutsche Bank must have lied and cheated before the District Court, and this Court, in order to have won the appeal on behalf of Deutsche Bank. (ROA.532).

Attorney Appellees refuse to dignify the Burkes’ caustic personal attacks. Based on an overriding public policy, an opposing party “does not have a right of recovery, under any cause of action, against another attorney arising from the discharge of his duties in representing a party…”. Taco Bell Corp. v. Cracken, 939 F. Supp. 528, 532 (N.D. Tex. 1996)(emp. in the original).

TDCA and FDCPA Claims.

Attorney immunity has its limits. One such limit is when a statute expressly abrogates the attorney immunity defense. The TDCA and FDCPA do apply to attorneys who regularly engage in consumer-debt collection activity.

However, no facts have been pled by the Burkes showing how the Attorney Appellees’ fit within the definition of a “debt collector” under the Acts nor have the Burkes set out facts showing the Attorney Appellees engaged in any conduct prohibited by the Acts.

The Burkes’ threadbare recitals and conclusory statements were simply insufficient to survive Rule 12(b) dismissal.

STANDARD OF REVIEW

Regarding the District Court’s denial of the Burkes’ Motion to Remand, the Court is to review questions of subject matter jurisdiction de novo, applying the same standard used by the district court. Montez v. Dept. of the Navy, 392 F.3d 147, 149 (5th Cir. 2004) (citing Robinson v. TCI/US West Communications Inc., 117 F.3d 90, 904 (5th Cir. 1997)).

As to federal question jurisdiction, “[t]he removing party bears the burden of showing that federal jurisdiction exists and that removal was proper.” Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002).

Removal based on federal question jurisdiction is proper if the complaint establishes

(1) federal law creates the cause of action, or (2) federal law is a necessary element of one of the well-pleaded claims. Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 808-09 (1988).

 Regarding the District Court’s grant of Attorney Appellees’ 12(b)(6) motion, the Court is to “accept all factual allegations made in the pleading as true and ask whether, under the circumstances asserted, the allegations state a claim sufficient to avoid dismissal.” See, e.g., United States v. Gaubert, 499 U.S. 315, 327 (1991);

“[W]e may uphold … [a Rule 12(b)(6) dismissal] only if it appears that no relief could be granted under any set of facts that could be proved consistent with the allegations.” American Waste &  Pollution  Control  Co.  v.  Browning–Ferris, Inc., 949 F.2d 1384, 1386 (5th Cir.1991).

Moreover, when a successful affirmative defense appears on the face of the pleadings, dismissal under Rule 12(b)(6) may be appropriate. Clark v. Amoco Prod. Co. 794 F.2d 967, 970 (5th Cir. 1986); also see Kansa Reinsurance Co., Ltd. v. Congressional Mortg. Corp. of Texas, 20 F.3d 1362, 1366 (5th Cir. 1994).⁸

However, the lawsuit was not dismissed pursuant to Rule 41(b). The Attorney Appellees filed a Rule 12(b)(6) motion (ROA.691- 712), and it was the Rule 12(b)(6) motion that the Magistrate Judge recommended be granted (ROA.1098-1115).

Further, the District Court adopted the Magistrate Judge’s Recommendation as its own Order (ROA.1157) upon which a Final Judgment was granted. (ROA.1158). The Burkes obviously have confused this appeal with their appeal pending against Ocwen, wherein the lower court dismissed the matter under 41(b).

ARGUMENT AND AUTHORITIES

I.  THE DISTRICT COURT DID NOT ERR IN FINDING THE EXISTENCE OF FEDERAL QUESTION JURISDICTION BASED UPON THE WELL-PLEADED COMPLAINT RULE.

Generally, a federal court has jurisdiction over a case in two circumstances. The first, known as federal question jurisdiction, exists if a case “arises under the Constitution, treaties or laws of the United States.” 28 U.S.C. § 1331.

Removal based on federal question jurisdiction is proper if the complaint establishes (1) federal law creates the cause of action, or (2) federal law is a necessary element of one of the well-pleaded claims. Christianson, 486 U.S. at 808-09.

The District Court did not err when it denied the Burkes’ Motion to Remand given the existence of federal question jurisdiction.⁹

In evaluating its own jurisdiction, the District Court plainly reviewed the allegations of the Burkes’ Complaint. The Complaint, within the very first paragraph, makes clear that the Burkes are seeking redress for Attorney Appellees’ alleged violation of federal statutes, specifically the Fair Debt Collection Practices Act, or FDCPA 15 U.S. Code§ 1692. (ROA.20-21)(ROA.49).

Federal question jurisdiction exists and extends to all cases “arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. In ascertaining if a case “arises under” federal law, the courts are to “look to whether the ‘plaintiff’s well-pleaded complaint raises issues of federal law.’” Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001) (quoting City of Chi. v. Int’l Coll. of Surgeons, 522 U.S. 156, 163 (1997)). In explaining what “arises under” means, the Supreme Court in Merrell Dow Pharmaceuticals Inc. v. Thompson explained,

There is no “single, precise definition” of that concept; rather, the phrase ‘arising under’ masks a welter of issues regarding the interrelation of federal and state authority and the proper management of the federal judicial system. This much, however, is clear. The “vast majority” of cases that come within this grant of jurisdiction are covered by Justice Holmes’ statement that a ‘suit arises under the law that creates the cause of action.’ Thus, the vast majority of cases brought under the general federal-question jurisdiction of the federal courts are those in which federal law creates the cause of action.

Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804 (1986)(internal citations omitted); also see Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1 (1983); American Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 260 (1916); Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 103 (1983) (holding that the Constitution permits federal jurisdiction over any case that “might call for the application of federal law”).

Simply put, the Burkes chose to file suit against Attorney Appellees for the alleged violation of federal statutes, namely the violation of the FDCPA. As federal law has created the Burkes’ cause of action, federal question jurisdiction exists in this case. See, Smitherman v. Bayview Loan Servicing, LLC, 727 Fed. Appx. 787 (5th Cir. 2018)(holding federal question jurisdiction was established based upon plaintiff’s assertion of RESPA claims within his original petition). Had the Burkes sought to avoid federal jurisdiction, they could have asserted only claims arising under state law in their Complaint. The Burkes were the “master of the claim” in that they could have invoked or avoided federal jurisdiction depending on the claims asserted. Caterpillar, Inc. v. Williams, 482 U.S. at 392 (citing Gully v. First Nat. Bank, 299 U.S. 109, 112–113(1936)). Given the foregoing, the District Court did not err in denying the Burkes’ request that the case be remanded to state court.

II. THE DISTRICT COURT DID NOT ERR IN DISMISSING THE VAST MAJORITY OF THE BURKES’ CLAIMS IN RESPONSE TO ATTORNEY APPELLEES’ 12(B)(6) MOTION TO DISMISS BASED ON ATTORNEY IMMUNITY.

As this Court is well aware, Deutsche Bank and the Burkes have been embroiled in contentious litigation over the foreclosure of the Burkes’ Deed of Trust since 2011.

The litigation spawned both Burke I and Burke II, with this Court rendering judgment in favor of Deutsche Bank in Burke II. In granting judgment in favor of Deutsche Bank for judicial foreclosure, this Court stated,

“Given the nearly decade of free living by the Burkes, there is no injustice in allowing that foreclosure to proceed.” Burke, 902 F.3d. at 552.

Unable to put down their sword, the Burkes brought this lawsuit on the heels of Burke II, asserting that the Attorney Appellees defended their clients in such a way as to expose Attorney Appellees to personal liability from the Burkes. Specifically, the Burkes allege,

Hopkins is known as the ‘Bounty Hunter’ … who has yet to lose a foreclosure case in the State of Texas against a homeowner… [which] just doesn’t equate to normal litigation averages. This amended complaint will outline the villainous strategies Hopkins implements to succeed “at all costs” …

*****

Hopkins openly lies, hides evidence, makes defamatory and hearsay remarks about the Burkes and also disrespected and verbally abused the (fmr) Hon. Judge Smith in this Court.” (ROA.583-585).

The Burkes’ attitude toward Attorney Appellees exemplifies the need for the public policy at the core of the attorney immunity doctrine. Put simply, attorneys are shielded from liability associated with the misplaced rage litigants experience when those litigants are unsuccessful when given their day in court.

Based on an overriding public policy, the courts in Texas and the Fifth Circuit have consistently held that an opposing party “does not have a right of recovery, under any cause of action, against another attorney arising from the discharge of his duties in representing a party…” Cracken, 939 F. Supp. at 532 (emp. in the original). Attorneys have an absolute right to “practice their profession, to advise their clients and interpose any defense or supposed defense, without making themselves liable for damages.” Kruegel v. Murphy, 126 S.W. 343 (Tex. Civ. App.— Dallas, 1910, writ ref’d).

To have any other rule or standard would “act as a severe and crippling deterrent to the ends of justice for the reason that a litigant might be denied a full development of his case if his attorney were subject to the threat of liability for defending his client’s position to the best and fullest extent allowed by law, and availing his client of all rights to which he is entitled.” Bradt v. West, 892 S.W.2d 56, 71 (Tex. App.— Houston [1st Dist.] 1994, writ denied).

An attorney enjoys “qualified immunity,” with respect to non-clients, for actions taken in connection with representing a client in adversarial circumstances. See, e.g., Butler v. Lilly, 533 S.W.2d 130, 131-34 (Tex. Civ. App.—Houston [1st Dist.] 1976, writ dism’d); See also, Alpert v. Crain, Caton & James, P.C., 178 S.W.3d 398, 408 (Tex. App.—Houston [1st Dist.] 2005, pet. denied) (affirming trial court’s dismissal of claims against attorney on ground that because of attorney’s immunity from suit, plaintiff failed to allege a claim or plead a cause of action for which relief could be granted).

The purpose of the attorney-immunity defense is to ensure “loyal, faithful, and aggressive representation by attorneys employed as advocates.” Id. (quoting Mitchell v. Chapman, 10 S.W.3d 810, 812 (Tex. App.— Dallas 2000, pet. denied)). Rogers v. Walker, 2017 WL 3298228 (Tex. App.— Beaumont, August 3, 2017).

The Texas Supreme Court’s opinion in Cantey Hanger, LLP v. Byrd confirmed a long line of well-reasoned cases that stand for the proposition that regardless of whether an attorney’s work is merit-filled or defective (or performed in litigation or transactional work), if the work constitutes the performance of legal services on behalf of a client then the lawyer is immune to liability from third parties in connection with such work.¹⁰ Cantey Hanger, LLP v. Byrd, 467 S.W.3d at 483 (Tex. 2015); also see, Rogers v. Walker, No. 09-15-00489-CV, 2017 WL 3298228, at *4 (Tex. App.—Beaumont, Aug. 3, 2017, pet. denied)(“Even conduct that is possibly unethical or wrongful in the context of the underlying suit is not actionable by the non-client when it is part of the discharge of the lawyer’s duties in representing his or her client.”).

This  Court  has  repeatedly echoed the  Texas  Supreme  Court’s  holding in Cantey  Hanger  as  reflected  by  the  Court’s  repeated  affirmance  of  12(b)(6) dismissals of counsel from cases similar to this matter.¹¹ In Troice v. Proskauer Rose, LLP, the Court analyzed whether a law firm’s conduct in representing a client exposed the firm to liability to the client’s adversary. The Court determined that the conduct complained of was, “[T]he kind of conduct in which an attorney engages when discharging his duties to his client.” Troice v. Proskauer Rose, LLP, 816 F.3d 341, 346 (5th Cir. 2016).

The Court went on to provide, “The immunity focuses on the type of conduct, not on whether the conduct was meritorious in the context of the underlying lawsuit.” Id. at 349 (quoting Alpert v. Crain, Caton & James, PC, 178 S.W.3d 398 (Tex. App.—Houston, [1st Dist.] 2005, pet. denied).

In addressing the allegation that liability should flow from legal work performed without merit [ as alleged by the Burkes in this lawsuit], the Court held “That some of it [the work] was allegedly wrongful, or that [the lawyer] allegedly carried out some of his responsibilities in a fraudulent manner, is of no matter.” Id. at 348 (emp. added)(relying on the Texas Supreme Court in Cantey Hanger, LLP, 467 S.W.3d 477.

In its analysis in Troice, the Court focused on whether the conduct complained of was legal in nature. If the work performed by an attorney is legal in nature then the attorney who performed the work is immune from suit by third parties as a result of the work.

The policies underlying the attorney immunity doctrine, as the Texas Supreme Court has explained, suggest that attorney immunity should be an immunity from suit. Cf. Sorey, 849 F.2d at 963. The doctrine “stem[s] from the broad declaration … that ‘attorneys are authorized to practice their profession, to advise their clients and interpose any defense or supposed defense, without making themselves liable for damages.’ ” Cantey Hanger, 467 S.W.3d at 481 (quoting Kruegel v. Murphy, 126 S.W. 343, 345 (Tex. App.—Dallas 1910, writ ref’d)). In other words, the doctrine is “intended to ensure ‘loyal, faithful, and aggressive representation by attorneys employed as advocates.’ ” Id. (quoting Mitchell v. Chapman, 10 S.W.3d 810, 812 (Tex. App.—Dallas 2000, pet. denied)).

Attorney immunity is necessary “to avoid the inevitable conflict that would arise if [an attorney] were ‘forced constantly to balance his own potential exposure against his client’s best interest.’ ” Id. at 483 (quoting Alpert v. Crain, Caton & James, PC, 178 S.W.3d 398, 405 (Tex. App.—Houston [1st Dist.] 2005, pet. denied)).

The Burkes take extreme issue with what they believe to be “fraudulent conduct” on the part of the Attorney Appellees when Attorney Appellees discussed the Burkes’ loan origination file, in open court, when questioned about the origination file by the then magistrate judge after the remand of Burke I.

The Burkes alleged that the loan documents reviewed and/or discussed by Attorney Appellees were altered in some manner.

The Dallas Court of Appeals dealt with this exact type of issue in Santiago v. Mackie Wolf Zientz & Mann. In Santiago, the Dallas Court of Appeals applied the Texas Supreme Court’s opinion in Cantey Hanger, to the factual situation in which a borrower argued that legal counsel for a mortgagee presented the borrower with a fraudulent and altered note when the borrower asked to inspect the note at the attorney’s office.

The Santiago Court observed that the attorneys obtained and presented the borrower with the note in connection with their legal representation of a client and immunity therefor attaches to that conduct. As further provided by the Santiago Court,

Attorney Immunity does not grant attorneys the right to violate ethical rules, but merely limits third-party recovery against attorneys acting within the scope of their representative capacity. Other mechanisms are in place to discourage and remedy [wrongful] conduct, such as sanctions, contempt, and attorney disciplinary proceedings.”

Santiago v. Mackie Wolf Zientz & Mann, P.C., 2017 WL 944027 (Tex. App.—Dallas 2017)(internal citations omitted); relying on Renfroe v. Jones & Assocs., 947 S.W.2d 285, 287 (Tex. App.—Fort Worth 1997, writ denied) (“If an attorney’s conduct violates his professional responsibility, the remedy is public, not private.”).

Attorney Appellees’ representation of Deutsche Bank and Ocwen in litigation, and on appeal, does not expose Hopkins Law, PLLC, Mark Hopkins or Shelley Hopkins to liability to third parties such as the Burkes. As such, the Burkes failed to assert any cause of action against Attorney Appellees upon which the Burkes could conceptually obtained relief. In light of the foregoing the District Court did not err in granting Attorney Appellees’ Rule 12(b)(6) Amended Motion to Dismiss.

III. THE DISTRICT COURT DID NOT ERR IN DISMISSING THE BURKES’ REMAINING CLAIMS FOR TDCPA AND FDCPA VIOLATIONS AFTER THE BURKES TWICE FAILED TO PLEAD SUFFICIENT FACTS TO PLAUSIBLY ALLEGE THAT THE ATTORNEY APPELLEES’ FIT WITHIN THE DEFINITION OF “DEBT COLLECTORS” UNDER THE ACTS AND THAT THE ATTORNEY APPELLEES’ ACTIONS VIOLATED THE ACTS.

To the extent attorneys function in some other capacity than legal counsel on behalf of a client, that other work, beyond providing legal services, can may expose an attorney to potential civil liability. Such is the situation when an attorney functions as a debt collector under the statutory framework of either the Texas Debt Collection Act (“TDCA”) or the federal Fair Debt Collection Practices Act (“FDCPA”).

However, for either Act to apply to an attorney’s conduct, the attorney must fit within the definition of “debt collector” or “third party debt collector” provided for by the Acts. Second, the attorney’s conduct must be violative of the Act at issue. The Burkes brought both TDCA and FDCPA claims against the Attorney Appellees, and in response to Attorney Appellees’ Amended Motion to Dismiss. (ROA.691-711).

In reviewing the merit of Attorney Appellees’ motion, the Magistrate Judge, and District Court in review, applied the “flexible plausibility standard” to the Burkes’ Amended Complaint. To survive a Rule 12(b)(6) motion to dismiss, a complaint must include facts that “raise a right to relief above the speculative level,” and into the “realm of plausible liability.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1965 and 1966 n.5 (2007). Where an “obvious alternative explanation” provides a more likely reason for the complained-of conduct, the plaintiff’s claim does not cross the plausibility threshold. Twombly, 550 U.S. at 567- 69.

Even though the complaint is to be construed liberally and in the light most favorable to the nonmoving party, a plaintiff must plead enough facts to state a claim that is at least plausible on its face. Id. at 1973-74. Although detailed factual allegations are not necessary, a “plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. at 1964-65 (citing Papasan v. Allain, 478 U.S. 265, 286, 106 S. Ct. 2932 (1986)). A complaint must allege enough facts to move past possibility and on to plausibility of “entitlement to relief.” Id. at 1966. This standard is referred to as the “flexible plausibility standard.” See Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937 (2009).

The Burkes were well aware of the deficiencies within their Original Complaint when they elected to file their First Amended Complaint. (ROA.531- 690). Attorney Appellees had previously outlined the deficiencies of the complaint when Attorney Appellees filed their initial motion to dismiss highlighting the Burkes’ TDCA and FDCPA pleading failures. (ROA.158-161).

Despite the given the opportunity to re-plead, the Burkes elected to file an Amended Complaint that discussed their lengthy litigation history relating to their home equity loan. As observed by the Magistrate Judge, “The complaint is riddled with irrelevancies.” (ROA.1100).

TDCA Pleading Failures. The Burkes aver that Attorney Appellees violated the Texas Debt Collection Act, specifically, the Burkes claim that Attorney Defendants violated (1) Tex. Fin. Code § 392.101 by failing to post or maintain a bond with the Texas Secretary of State. (ROA.614).

The Burkes clearly misunderstood the bond requirements provided by the TDCA and their claims failed as they misinterpret the requirements under the TDCA, and that Attorney Appellees are not required to have a surety bond under the TDCA.

To state a claim under the TDCA, a plaintiff must allege that: (1) the debt at issue is a consumer debt; (2) the defendant is a “debt collector” within the meaning of the TDCA; (3) the defendant committed a wrongful act in violation of the TDCA; (4) the wrongful act was committed against the plaintiff; and (5) the plaintiff was injured as result of the defendant’s wrongful act. See Fin. Code §§ 392.001 et. seq.

The Burkes alleged that Attorney Appellees cannot legally represent their clients, Deutsche Bank and Ocwen, in litigation and on appeal because Attorney Defendants failed to post bond required by Tex. Fin. Code §392.101.

However, Section 392.101 is not applicable to Attorney Appellees. By its plain language, the bond requirement under this section applies only to third-party debt collectors. Tex. Fin. Code §392.101. Attorney Appellees, as litigation and appellate counsel, do not meet the definition of a “debt collector” or a “third-party debt collector” under the statute. Tex. Fin. Code §392.001 expressly defines both:

• “debt collector” means a person who directly or indirectly engages in debt collection and includes a person who sells or offers to sell forms represented to be a collection system, device, or schedule intended to be used to collect consumer
• “third party debt collector” means a debt collector, as defined by 15 U.S.C. 1692a(6), but does not include an attorney collecting a debt as an attorney on behalf of and in the name of a client unless the attorney has a nonattorney employees who: (A) are regularly engaged to solicit debts for collection; or (B) regularly make contact with debtors for the purpose of collection or adjustments of debts.

As explained by the Magistrate Judge, the Burkes failed to set forth sufficient facts to show that Attorney Appellees “debt collectors” under the TDCA.¹² The Magistrate specifically found regarding the Burkes’ pleading, “

They do not provide any facts to demonstrate that Defendants’ principal business is collecting debts or that they regularly collect debts or attempt to collect debts for someone else. For the same reasons, Plaintiffs have failed to set forth sufficient facts to show that

Defendants would qualify as “third-party debt collectors” under the TDCA.” (ROA.1112).^{13 14}

FDCPA  Pleading  Failures.  To  state  an  FDCPA  claim,  the  Burkes  were required to plead that: (1) they have been the object of collection activity arising from consumer debt; (2) Attorney Appellees are debt collectors defined by the FDCPA; and (3) Attorney Appellees have engaged in an act or omission prohibited by the FDCPA. See Vick v. NCO Financial Systems, Inc., No. 2:09-CV-114-TJW- CE, 2011 WL 1193027, at *2 (E.D. Tex. Mar. 2011). “Only parties who meet the statutory definition of debt collector are subject to civil liability under the FDCPA.” Bacon v. Sw. Airlines Co., No. Civ. A. 3:97–CV–2211–L, 1999 WL 134569, *2 (N.D. Tex. Mar. 5, 1999). “[A] debt collector does not include the consumer’s creditors, a mortgage servicing company, or an assignee of a debt, as long as the debt was not in default at the time it was assigned.” Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 1985).

The FDCPA prohibits a “debt collector” form using “any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. §1692e. Under the FDCPA, a “debt collector” is a person whose principal business is collecting debts or a person who regularly collects or attempts to collect debts from someone else. 15 U.S.C. §1992a(6). As found by the Magistrate Judge, “The Burkes have not set forth sufficient facts to show that Defendants are “debt collectors” under the FDCPA.” (ROA.1112). As further observed by the Magistrate Judge, “Even if the Burkes had shown that Defendants are “debt collectors,” they have not alleged sufficient facts to show that Defendants engaged in prohibited conduct…”. See, 15 U.S.C. §§1692d-1692j.

Even if Attorney Appellees were subject to limited portions of the FDCPA (See, Obduskey v. McCarthy & Holthus LLP, 139 S.Ct. 1029 (2019)), the Burkes did not allege any conduct on the part of Attorney Defendants that violates §1692f(6) of the FDCPA.

The Burkes’ Amended Complaint centered on Attorney Appellees actions in defending their clients on appeal.

While the Burkes would like to hold Attorney Appellees liable for its representation of its client, submission of argument on the legal impact of the admitted evidence contrasted with the trial court’s errant judgment is simply not conduct violative of the FDCPA.

The Burkes’ allegations center solely upon Attorney Appellees’ actions, taken on behalf of their clients, in Burke I and Burke II.

The Burkes fail to detail exactly how Attorney Appellees have taken action other than zealously represent Deutsche Bank and Ocwen in the long, extended litigation seeking judicial foreclosure of the Property.

The Burkes fail to establish that (1) Attorney Appellees engaged in any business the principal purpose of which [was] the collection of any debts, or (2) that Attorney Appellees regularly collected or attempted to collect debts. See 15 U.S.C. 1692a(6). Attorney Appellees are not debt collectors, the Burkes did not allege fact sufficient to establish claims and therefore, the Burkes’ FDCPA claim therefore fails under the applicable pleading standards and was properly dismissed by the District Court. See Martinez-Bey v. Bank of America, N.A., 2013 WL 3054000 (N.D. Tex. June 18, 2013).

CONCLUSION

The District Court did not err in dismissing the Burkes’ Amended Complaint for failure to state a claim. The District Court also did not commit error in permitting the Burkes to re-plead their case for a third time. Any amendment to the Burkes’ pleadings would have been futile. See SB. Intern., v. Jindal, 2007 WL 2410007, * at 3 (N.D. Tex. Aug. 23, 2007)(citing Foman v. Davis, 371 U.S. 178, 182 (1962)); see also Abruzzo v. PNC Bank, N.A., 2012 WL 3200871, at *3 (N.D. Tex. July 30, 2012) (denying leave to amend with respect to claims that fail as a matter of law). See FinServ Cas. Corp. v. Settlement Funding, LLC, 724 F. Supp. 2d 662, 676 (S.D. Tex. 2010) (dismissing claims against attorneys under Rule 12(b)(6) because the plaintiff “could not replead its claims in a way consistent with the facts in the Original Complaint that would bring the claims against [the attorneys] outside the protection of the qualified immunity doctrine”).

For the foregoing reasons, the District Court’s Final Judgment should not be disturbed on appeal but rather affirmed in respects.

Respectfully submitted,

/s/ Mark D. Hopkins                

Mark D. Hopkins
Texas State Bar No. 00793975

Shelley L. Hopkins
Texas State Bar No. 24036497

HOPKINS LAW, PLLC
3 Lakeway Centre Ct., Suite 110
Austin, Texas 78734
Telephone: (512) 600-4320

mark@hopkinslaxtexas.com

shelley@hopkinslawtexas.com