LIT UPDATE AND COMMENTARY
FEB 12, 2024
ORDER OF DISMISSAL WITH PREJUDICE ENTERED 21 MONTHS AGO:
On May 5, 2022, SDTX.
The lone wolf and Midfirst Mortgage have never set a foreclosure auction to this day.
MEMORANDUM OPINION AND ORDER
The Townsends own real property in Spring, Texas. Midland Mortgage is either the owner and holder of a promissory note secured by a deed of trust against the property, or the authorized mortgage servicer for the holder of the note and deed of trust.
Midland Mortgage posted the property for foreclosure sale on January 4, 2022.
The Townsends allege that Midland Mortgage has not properly accounted for all payments made, or has posted charges not authorized by law.
The Townsends allege that they are refinancing their mortgage and that Midland will be paid in full.
The Townsends seek injunctive and declaratory relief to stop the foreclosure sale that was scheduled for January 4, 2022.
Midland moved to dismiss, arguing that the Townsends have not stated a cause of action based on the alleged accounting or other errors.
The Townsends did not respond to the motion to dismiss.
The motion to dismiss, (Docket Entry No. 5), is granted, without prejudice.
The Townsends may amend no later than April 30, 2022.
Failure to do so will lead to dismissal with prejudice.
The reasons for this ruling are stated below.
I. The Legal Standard
Rule 12(b)(6) allows dismissal if a plaintiff fails “to state a claim upon which relief can be granted.”
Fed. R. Civ. P. 12(b)(6).
Rule 12(b)(6) must be read in conjunction with Rule 8(a), which requires “a short and plain statement of the claim showing that the pleader is entitled to relief.”
Fed. R. Civ. P. 8(a)(2).
A complaint must contain “enough facts to state a claim to relief that is plausible on its face.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
Rule 8 “does not require ‘detailed factual allegations,’ but it demands more than an unadorned, the-defendant- unlawfully-harmed-me accusation.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. 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.”
Id. (citing Twombly, 550 U.S. at 556).
“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. (quoting Twombly, 550 U.S. at 556).
To withstand a Rule 12(b)(6) motion, a complaint must include “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.”
Lincoln v. Turner, 874 F.3d 833, 839 (5th Cir. 2017) (quoting Twombly, 550 U.S. at 555).
“Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’”
Iqbal, 556 U.S. at 678 (alteration in original) (quoting Twombly, 550 U.S. at 557).
“A complaint ‘does not need detailed factual allegations,’ but the facts alleged ‘must be enough to raise a right to relief above the speculative level.’”
Cicalese v. Univ. Tex. Med. Branch, 924 F.3d 762, 765 (5th Cir. 2019) (quoting Twombly, 550 U.S. at 555).
“Conversely, when the allegations in a complaint, however true, could not raise a claim of entitlement to relief, this basic deficiency should be exposed at the point of minimum expenditure of time and money by the parties and the court.”
Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir. 2007) (alterations omitted) (quoting Twombly, 550 U.S. at 558).
A court reviewing a motion to dismiss under Rule 12(b)(6) may consider
“(1) the facts set forth in the complaint,
(2) documents attached to the complaint,
and
(3) matters of which judicial notice may be taken under Federal Rule of Evidence 201.”
Inclusive Cmtys. Project, Inc. v. Lincoln Prop. Co., 920 F.3d 890, 900 (5th Cir. 2019).
The Fifth Circuit has explained that, although it has “recognized the power of district courts to ‘adopt local rules requiring parties who oppose motions to file statements of opposition,’” it has not “approved the automatic grant, upon failure to comply with such rules, of motions that are dispositive of the litigation.”
Johnson v. Pettiford, 442 F.3d 917, 918 (5th Cir. 2006) (quoting John v. Louisiana, 757 F.2d 698, 709 (5th Cir. 1985)).
A motion to dismiss under Rule 12(b)(6) is a dispositive motion so the Court will consider the merits of the motion.
II. Analysis
The Townsends allege that “[u]pon … information and belief, Plaintiffs reasonably believe that Defendant has not properly accounted for all payments made or, alternatively, has posted charges or expenses that are authorized by law.”
(Docket Entry No.1-1 at 6).
The Townsends do not further describe the accounting errors.
The Townsends sue for a declaratory judgment under Texas Civil Practice and Remedies Code § 37.004, which provides that “a person interested under a . . . written contract . . . may have determined any question of construction or validity arising under the . . . contract . . . and obtain a declaration of rights, status, or other legal relations thereunder.”
Tex. Prac. & Rem. Code § 37.004.
A declaration under this statute “is more precisely a type of remedy that may be obtained with respect to a cause of action or other substantive right.”
Craig v. Tejas Promotions, LLC, 550 S.W.3d 287, 297–98 (Tex. App.—Austin 2018, pet. denied).
The statute does not provide a cause of action or a substantive right.
Id.
The Townsends have not alleged a cause of action.
The general allegation of accounting errors does not state a theory of liability or a violation of rights under the note or deed.
A general assertion of “wrongful charges” is insufficient to state a claim for unfair debt collection practices.
Williams v. Wells Fargo Bank, N.A., 560 F. App’x 233, 240 (5th Cir. 2014).
And the Townsends have not pointed to any provision of the note or deed that was breached.
Williams v. Wells Fargo Bank, N.A., 560 Fed.App’x. 233, 238 (5th Cir. 2014)
(“It has been held that a claim for breach of a note and deed of trust must identify the specific provision in the contract that was breached.”).
The complaint does not state a claim for relief.
The claim for injunctive relief is probably moot because the alleged foreclosure sale was scheduled for January 4, 2022, but the parties have not told the court that the sale occurred.
Even if the claim is not moot, without a plausible theory of relief, the Townsends cannot show a substantial likelihood of success on the merits.
See Anderson v. Jackson, 556 F.3d 351, 360 (5th Cir. 2009) (detailing the elements of injunctive relief).
The claim for injunctive relief fails as well.
III. Conclusion
The motion to dismiss, (Docket Entry No. 5), is granted.
The Townsends may amend no later than April 30, 2022.
Failure to do so will lead to dismissal with prejudice.
SIGNED on March 29, 2022, at Houston, Texas.
Lee H. Rosenthal
Chief United States District Judge
Townsend v. Midland Mortgage
(4:22-cv-00250)
District Court, S.D. Texas
JAN 25, 2022 | REPUBLISHED BY LIT: JAN 26, 2022
Update: Feb 1, 2022
The lone wolf files his premature motion to dismiss, a week after removal.
DEFENDANT’S MOTION TO DISMISS PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 12(b)(6) AND BRIEF IN SUPPORT
Defendant Midland Mortgage (“Midland” or “Defendant”), files this its Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6) and Brief in Support and shows as follows:
I. SUMMARY
1. Plaintiffs James and Leslie Townend (collectively “Plaintiffs”) filed this action on December 29, 2021 in response to Defendant’s pursuit of a foreclosure of the real property known as 46 Barley Hall, Spring, Texas 77382 (the “Property”).
(See Petition at ⁋8.)
This action was originally filed in the 284th Judicial District Court of Montgomery County, Texas, and was removed to this Court on January 25, 2022.
[ECF No. 1].
2. Plaintiffs in their Original Petition generally contest Defendant’s accounting of the payments and charges on Plaintiffs’ mortgage loan.
(Id. at ¶ 10.).
Plaintiffs seek a declaratory judgment for the amounts owed on the loan.
(Id. at ¶20). Further, Plaintiffs also seek injunctive relief enjoining Defendant from proceeding with foreclosure.
(Id. at ¶12).
3. Plaintiffs have failed to state a claim upon which relief can be granted. Plaintiffs’ general complaint about the accounting of the loan does not support any cause of action and, because Plaintiffs fail to state a claim, injunctive relief is unwarranted.
Through this Motion, Defendant seeks a final judgment dismissing Plaintiffs’ claims with prejudice.
II. STANDARD UNDER RULE 12(b)(6)
4. Under the Rule 12(b)(6) standard, pleadings must show specific, well-pleaded facts, and not mere conclusory allegations to avoid dismissal.
Guidry v. Bank of LaPlace, 954 F.2d 278, 281 (5th Cir. 1992).
The court must accept those well-pleaded facts as true and view them in the light most favorable to the plaintiff.
Id.
Although “detailed factual allegations” are not necessary, a plaintiff must provide “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.”
(Id. at 555.)
“Conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss.”
Fernandez-Montes v. Allied Pilots Ass’n, 987 F.2d 278, 284 (5th Cir. 1993).
In other words, “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.”
Ashcroft v. Iqbal, 556 U.S. 662, 667, (2009).
The alleged facts must “raise a right to relief above the speculative level.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2006).
In short, a complaint fails to state a claim upon which relief may be granted when it fails to plead “enough facts to state a claim to relief that is plausible on its face.”
Id. at 570.
5. Gone are the days when a plaintiff could survive a motion to dismiss with mere labels and conclusions, formulaically reciting the elements of a cause of action.
In this case, Plaintiffs’ allegations fall woefully short of demonstrating a plausible entitlement to relief, and the action should be dismissed.
III. ARGUMENT AND AUTHORITIES
A. Plaintiffs not entitled to declaratory judgment.
6. For their claim for declaratory judgment, Plaintiffs plead that “[u]pon … information and belief, Plaintiffs’ reasonably believe that Defendant has not properly accounted for all payments made or, alternatively, has posted charges or expenses that are authorized by law.”.
(Petition at ¶10)
7. Such a general claim of alleged errors in the accounting of a mortgage loan will not support a cause of action.
See Williams v. Wells Fargo Bank, N.A., 560 F. App’x 233, 240 (5th Cir. 2014)
(holding that a “general assertion of ‘wrongful charges” is insufficient to state a claim under Texas Debt Collection Act);
Elizardo v. Ditech Fin. LLC Mortg. Servicer, No. 5:20-cv-00077- OLG, 2020 U.S. Dist. LEXIS 260208 *3 (W.D. Tex. March 19, 2020)
(general allegation that “there are impediments to the sale and accounting relating to the amounts owed or reinstatement amounts” did not support a claim for breach of the subject mortgage loan agreement);
Smallwood v. Bank of Am., No. 3:11-cv-1283-D, 2012 U.S. Dist. LEXIS 1428, *9-10 (N.D. Tex. Jan. 6, 2012)
(general claim that defendant violated Texas Debt Collection by demanding improper amounts owed on mortgage loan did not state a claim).
For a plaintiff to meet its burden to plead a claim related to alleged improper loan account, the plaintiff must provide sufficient notice of what the alleged error or errors were.
See Burke v. JPMC Specialty Mortgage, LLC, No. 4:19-CV-00492- SDJ-CAN, 2020 U.S. Dist. LEXIS 103758, *29 (E.D. Tex. Apr. 24, 2020).
As Plaintiffs here offer no specifics to support their general allegation of errors in the loan accounting, they have failed to state a claim for declaratory relief.
B. Plaintiffs not entitled to injunctive relief.
8. Plaintiffs seeks to enjoin Defendant from foreclosing and selling the Property.
(See Petition at ¶12).
A request for injunctive relief may only be granted if the plaintiff has a probable right of recovery on his or her other claims.
To obtain injunctive relief, a plaintiff-movant must show:
(1) a substantial likelihood of success on the merits of the movant’s claims;
(2) a substantial threat that movant will suffer irreparable injury if the injunction is not granted;
(3) the threatened injury to the movant outweighs any harm that the other party might suffer if the injunction is entered;
and
(4) an injunction will not disserve the public interest.”
Calderon v. Bank of Am. N.A., 941 F. Supp. 2d 753, 770 (W.D. Tex. 2013)
(citing Anderson v. Jackson, 556 F.3d 351, 360 (5th Cir. 2009)).
Because Plaintiffs failed to plead a viable cause of action against Defendant, as set forth above, they are not entitled to an injunction as requested.
WHEREFORE, PREMISES CONSIDERED, Defendant respectfully prays that the Court dismiss Plaintiffs’ claims with prejudice and grant Defendant all other relief to which it may be entitled.
Respectfully submitted,
By: /s/ Mark D. Cronenwett
MARK D. CRONENWETT
Attorney in Charge
Texas Bar No. 00787303
Southern District Bar No. 21340
mcronenwett@mwzmlaw.com
MACKIE WOLF ZIENTZ & MANN, P.C.
14160 North Dallas Parkway, Suite 900
Dallas, Texas 75254
Telephone: (214) 635-2650
Attorneys for Defendant
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing document has been served via ECF notification on February 1, 2022 on the following counsel of record:
Jacob Hyde
Jacob.hyde.law@gmail.com
Hyde Law, PLLC
7 Switchbud Place, Ste. 192-275
The Woodlands, Texas 77380
Counsel for Plaintiffs
/s/ Mark D. Cronenwett
MARK D. CRONENWETT
New foreclosure case. SD Tex. has stopped allocatin’ judges to cases, we’ll wait and see who gets the blind draw here…bookmark for updates.
Only one mill lawyer – unless, of course, the foreclosure mill is now on a fixed fee basis in 2022.
NOTICE OF REMOVAL
Pursuant to 28 U.S.C. § 1446(a), Defendant Midland Mortgage (“Midland” or “Defendant”), files this Notice of Removal of this action from the 284th Judicial District Court of Montgomery County, Texas (the “Notice”), and respectfully shows as follows:
INTRODUCTION
1. On December 29, 2021 Plaintiffs James Townsend and Leslie Townsend (“Plaintiffs”), filed their Plaintiffs’ Original Petition and Application for Temporary Restraining Order and Temporary Injunction (the “Petition”) bearing Cause No. 21-12-17634 in the 284th Judicial District Court of Montgomery County, Texas, and styled James Townsend and Leslie Townsend v. Midland Mortgage (the “State Court Action”). A true and correct copy of the Docket Sheet from the State Court Action is attached hereto as Exhibit A. In accordance with 28
U.S.C. § 1446(a), copies of all process, pleadings, and orders served in the State Court Action, are attached hereto within the contents of Exhibit B.
2. The allegations in the Petition relate to a deed of trust and foreclosure proceedings on the real property and improvements located at 46 Barley Hall Street, Spring, TX 77382 (the “Property”).
Plaintiffs make a vague assertion that Defendant failed properly apply all payments made with respect to the subject loan. (See Petition at ¶10.) Plaintiffs seek a declaratory judgment regarding the accounting of the loan. (Id. at ¶20.) Further, Plaintiffs request injunctive relief that prohibits the foreclosure sale of the Property. (Id. at ¶18.)
3. This Notice of Removal is timely because thirty (30) days have not expired since the State Court Action was filed, making removal proper in accordance with 28 U.S.C. Section 1446(b).
4. This action is removable to federal court pursuant to 28 U.S.C. Section 1441 because it could have been filed originally in this Court pursuant diversity jurisdiction conferred by 28 U.S.C. Section 1332.
BASIS FOR REMOVAL – DIVERSITY JURISDICTION
5. Removal of the State Court Action to this Court is proper pursuant to 28 U.S.C. §§ 1332, 1441(a) and (b) because the parties are diverse and the amount in controversy is well in excess of $75,000.00 exclusive of interest, costs, and attorneys’ fees.
A. There is complete diversity.
6. Plaintiffs are individuals and citizens of the state of Texas. (See Petition at ¶1.)
7. Defendant Midland Mortgage is a division of MidFirst Bank, which is a federally chartered savings association. A national banking association is considered a citizen of the state in which it is located. 28 U.S.C. § 1348. Its location is determined by the state of its main office, as established in the bank’s articles of association. Wachovia Bank, NA v. Schmidt, 546 U.S. 303, 318 (2006). MidFirst Bank is, and at all times relevant to this action was, a national association bank with its main office located in Oklahoma City, Oklahoma. Thus, Defendant is a citizen of Oklahoma, and no other state, for purposes of diversity jurisdiction.
8. Because Plaintiffs and Defendant do not share a state citizenship, there is diversity of citizenship.
B. The amount in controversy exceeds $75,000.00.
9. The amount in controversy exceeds the sum or value of $75,000.00. In the Fifth Circuit, when injunctive relief is sought, the amount in controversy is measured by the value of the object of the litigation, and the value of that right is measured by the losses that will follow. Webb v. Investacorp, Inc. 89 F.3d 252, 256 (5th Cir. 1996). Stated differently, “the amount in controversy, in an action for declaratory and injunctive relief, is the value of the right to be protected or the extent of the injury to be prevented.” Leininger v. Leininger, 705 F.2d 727, 729 (5th Cir. 1983); see also Lamar v. Chase Home Finance, LLC, 2008 WL 4057301 (N.D. Miss. 2008) (finding amount in controversy requirement was satisfied where plaintiff sought to set aside foreclosure sale and home appraised for $83,000.00, plus unspecified amount of monetary damages); Bank of America National Trust and Sav. Assoc. v. Reeves, 1995 WL 96617, *1 (E.D. La. 1995) (court held that the amount in controversy was met in action seeking to enjoin foreclosure on property because the suit “puts at issue the entire value of the property on which they attempt to enjoin defendants from foreclosing.”).
10. “Reasonable bases for valuing properties include ‘purchase price, market value, or outstanding principal and interest.’ This court considers market value to be the preferred method.” McPherson v. Bank of Am., N.A., No. H-16-3498, 2016 U.S. Dist. LEXIS 180115, at *6 (S.D. Tex. Dec. 30, 2016) (citations omitted). A defendant who attaches to a notice of removal the local appraisal district’s summary showing the market value of the property exceeds $75,000.00 meets the burden of establishing that diversity jurisdiction exits. See id. at *6; see also Govea v. JPMorgan Chase Bank, N.A., No. H-10-3482, 2010 U.S. Dist. LEXIS 130940, at *11 (S.D. Tex. Dec. 10, 2010); Funke v. Deutsche Bank Nat’l Tr. Co., Civil Action No. 5:14- CV-307, 2014 U.S. Dist. LEXIS 104438, at *5–6 (W.D. Tex. July 31, 2014); Johnson v. Wells Fargo Bank, N.A., No. 4:12CV768, 2013 U.S. Dist. LEXIS 41583, at *7 (E.D. Tex. Feb. 22, 2013).
Here, Plaintiffs request, inter alia, an injunction prohibiting Defendant from foreclosing on the loan and selling the Property. (See Petition at Prayer.) The Montgomery County Appraisal District shows a total assessed value of the Property at $447,000.00. (Exhibits C, C-1.)
11. Defendant categorically denies Plaintiffs are entitled to an award of damages in any amount, but Plaintiffs’ requests for injunctive relief and attorney fees far exceeds $75,000.00, exclusive of interest and costs. For the reasons stated above, there can be no dispute that Plaintiffs seek in excess of the minimum amount in controversy.
VENUE
11. Venue for removal is proper in this district and division, the United States District Court for the Southern District of Texas, Houston Division, under 28 U.S.C. § 1441(a) because this district and division embrace the 284h Judicial District Court of Montgomery County, Texas, the forum in which the removed action was pending.
NOTICE
12. Pursuant to 28 U.S.C. § 1446(d), a copy of this Notice is being filed with the Clerk of Court for the 284th Judicial District Court of Montgomery County, Texas.
13. The contents of Exhibit B constitute the entire file of Cause No. 21-12-17634 in the 284th Judicial District Court of Montgomery County, Texas.
CONCLUSION
For the reasons described above, Defendant respectfully requests that this Court take jurisdiction over this matter and proceed as if it had been originally filed herein.
Respectfully submitted,
By: /s/ Mark D. Cronenwett
MARK D. CRONENWETT
Attorney in Charge
Texas Bar No. 00787303
Southern District Bar No. 21340
mcronenwett@mwzmlaw.com
MACKIE WOLF ZIENTZ & MANN, P.C.
14160 North Dallas Parkway, Suite 900
Dallas, Texas 75254
Telephone: (214) 635-2650
Attorneys for Defendant
List of all Counsel of Record
For Plaintiffs:
Jacob Hyde
Texas Bar No. 24074464
Jacob.hyde.law@gmail.com
Hyde Law, PLLC
7 Switchbud Place,Ste. 192-275
The Woodlands, Texas 77380
Tel. (512) 992-8591
Fax. (512) 532-7227
For Defendant:
Mark D. Cronenwett
Texas Bar No. 00787303
Mackie Wolf Zientz & Mann, P.C.
14160 North Dallas Parkway, Suite 900
Dallas, TX 75254
(214) 635-2650 Telephone
(214) 635-2686 Facsimile
mcronenwett@mwzmlaw.com
U.S. District Court
SOUTHERN DISTRICT OF TEXAS (Houston)
CIVIL DOCKET FOR CASE #: 4:22-cv-00250
Create an Alert for This Case on RECAP
Townsend et al v. Midland Mortgage Assigned to: Cause: 28:1332 Diversity-Breach of Contract |
Date Filed: 01/25/2022 Jury Demand: None Nature of Suit: 290 Real Property: Other Jurisdiction: Diversity |
Plaintiff | ||
James Townsend | represented by | James Townsend PRO SE |
Plaintiff | ||
Leslie Townsend | represented by | Leslie Townsend PRO SE |
V. | ||
Defendant | ||
Midland Mortgage | represented by | Mark Douglas Cronenwett Mackie Wolf Zientz & Mann, P.C. 14160 N. Dallas Parkway, Ste. 900 Dallas, TX 75254 214-635-2650 Fax: 214-635-2686 Email: mcronenwett@mwzmlaw.com ATTORNEY TO BE NOTICED |
Date Filed | # | Docket Text |
---|---|---|
01/25/2022 | 1 | NOTICE OF REMOVAL from Montgomery County, Texas, 284th Judicial District, case number 21-12-17634 (Filing fee $ 402 receipt number 0541-27652037) filed by Midland Mortgage. (Attachments: # 1 Exhibit, # 2 Civil Cover Sheet)(Cronenwett, Mark) (Entered: 01/25/2022) |
01/25/2022 | 2 | CERTIFICATE OF INTERESTED PARTIES by Midland Mortgage, filed.(Cronenwett, Mark) (Entered: 01/25/2022) |
Biography
Jacob Hyde grew up in Los Angeles California, but moved to Texas just as soon as he could. He spent about 10 years in Austin and now lives in The Woodlands, Texas. Jacob assists his wife, on occasion, with her French Bulldog breeding program. Jacob enjoys playing sports, more specifically soccer and golf. Jacob loves being around his 2 young boys and enjoys every minute of their development to hopefully become productive members of society.
Jacob practiced criminal law for roughly 10 years, allowing him to get litigation experience. Jacob’s law degree and Texas Real Estate License, have given him a keen understanding of the buying/selling of real estate. This has also given him insight on how to best help homeowners and buyers in this wild real estate market.
Thus, Mr. Hyde has transformed his practice from “helping people out of the big house to helping people stay in their big house”!!
Education
- Texas Southern University Thurgood Marshall School of Law, Houston, Texas
- Juris Doctorate – 2010
- California State University, Fresno, California
- B.S., Bachelor of Science
- Major: Criminology
Bar Admissions
- Texas, 2010
- California, 2011
- U.S. Court of Appeals 5th Circuit
- U.S. District Court Western District of Texas
- U.S. District Court Northern District of Texas
- U.S. District Court Southern District of Texas
- U.S. District Court Eastern District of Texas
Past Positions
- Fresno County District Attorney’s Office, Intern
- Texas Supreme Court, Intern, 2009 to 2009
Professional Associations
- American Bar Association’s Criminal Justice and Young Lawyers sections, Member
- Texas Young Lawyers Association, Member
Current Employment Position
- Managing Partner