Andrea Guajardo v. JP Morgan Chase Bank, N.
605 F. App'x 240
5th Cir.2015Background
- Plaintiffs Andrea Guajardo and Juanita Zepeda took a JPMC mortgage on a San Antonio home, fell behind, applied for loan modification, and were orally told on multiple occasions that JPMC would review their application and respond before any non-judicial foreclosure.
- Plaintiffs did not receive a response; JPMC completed a non-judicial foreclosure and AH4R I TX, L.L.C. bought the Property at sale; Plaintiffs discovered the sale after it occurred.
- Plaintiffs sued in Texas state court asserting breach of contract, wrongful foreclosure, negligent misrepresentation, fraud, constructive fraud, promissory estoppel, DTPA violation, declaratory judgment, and trespass to try title; case was removed to federal court.
- District court granted multiple Rule 12(b)(6) dismissals across successive amended complaints; plaintiffs appealed from dismissal of the Third Amended Complaint.
- On appeal the Fifth Circuit reviewed de novo and affirmed dismissal of all claims, finding plaintiffs’ pleadings legally insufficient or barred by defenses apparent on the face of the pleadings (e.g., statute of frauds).
Issues
| Issue | Plaintiffs' Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract — specificity | Mortgage/deed terms and §51.002 notice obligations were breached by JPMC | Pleading fails to identify specific contract provisions or how they were breached | Dismissed — allegations too general; prior dismissal of this claim was with prejudice |
| Wrongful foreclosure — required elements | JPMC failed to follow statutory notice, sale was grossly inadequate, causation | Sale adequacy not plausibly alleged; element required by precedent | Dismissed — claim abandoned on appeal (plaintiffs did not defend adequacy element) |
| Negligent misrepresentation / Fraud / Constructive fraud | Oral promises to delay foreclosure until review justified reliance and support fraud/constructive fraud | Statements were promises about future conduct (not existing facts); no fiduciary duty alleged; fraud not pleaded with requisite intent/specificity | Dismissed — promises of future conduct not actionable as negligent misrep; fraud lacks allegations defendant intended not to perform; constructive fraud fails for lack of fiduciary or egregious facts |
| Promissory estoppel vs. statute of frauds | Reliance on JPMC’s oral promise to delay foreclosure should be enforced | Oral promise to modify/forbear is barred by Texas statute of frauds absent a promise to sign a written agreement | Dismissed — promise not alleged to include commitment to sign writing, so statute of frauds bars estoppel claim |
| DTPA consumer status | JPMC’s conduct in loan-modification process falls within DTPA protections | Loan-modification dealings are part of a "pure loan" transaction; plaintiffs not consumers | Dismissed — plaintiffs are not consumers under DTPA for loan-modification claims |
| Declaratory judgment / Trespass to try title | Ancillary relief flowing from substantive claims | Substantive claims fail, so related remedies cannot stand | Dismissed — remedial claims fail because underlying causes of action were dismissed |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard for pleading)
- Ashcroft v. Iqbal, 556 U.S. 662 (well-pleaded facts must plausibly give entitlement to relief)
- Gen. Elec. Capital Corp. v. Posey, 415 F.3d 391 (standard of review for 12(b)(6) dismissal in Fifth Circuit)
- Miller v. BAC Home Loans Servicing, L.P., 726 F.3d 717 (wrongful-foreclosure elements; treatment of sale-price element)
- Martins v. BAC Home Loans Servicing, L.P., 722 F.3d 249 (statute-of-frauds bar to oral loan modifications and effect on promissory estoppel)
- Kansa Reins. Co. v. Cong. Mortg. Corp. of Tex., 20 F.3d 1362 (12(b)(6) dismissal appropriate when affirmative defense appears on face of pleadings)