Arthur Massey v. EMC Mortgage Corporation
546 F. App'x 477
5th Cir.2013Background
- Masseys purchased their home in 2004 with EMC as loan servicer and later obtained a prior modification.
- In 2009 EMC offered a Home Affordable Modification Program (HAMP) trial, with a three-month trial payment plan.
- EMC later denied a modification in August 2009, citing that the hardship was not permanent and other requirements, while continuing to engage in modification discussions.
- Masseys made trial payments; EMC sent notices of default on the second loan while requesting income documentation for eligibility.
- In 2010 EMC indicated a feasible modified payment for the first loan but later claimed missing documents, expiring the TPP, and proposed a new modification that Masseys declined due to affordability.
- Masseys filed suit alleging TF DCPA violations, common-law fraud, statutory fraud, negligent misrepresentation, and unreasonable collection; district court dismissed, and dismissal affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| TFDCPA misrepresentation | Massey claims EMC misled about debt and modification eligibility. | EMC argues no affirmative misrepresentation of debt amount or status. | TFDCPA claim fails; no misrepresentation of debt amount identified. |
| Common-law fraud | Massey asserts false statements and intent to induce reliance on modification. | Fraud claims lack specificity required by Rule 9(b). | Dismissed for failure to plead with particularity under Rule 9(b). |
| Statutory fraud under Texas Business & Commerce Code §27.01 | Fraud in loan modification transactions entitles damages. | §27.01 applies to real estate transactions; loan mod not within scope. | Dismissed; statute not applicable to loan transactions. |
| Negligent misrepresentation | Promises of future modification actions were actionable. | Future-action promises are not actionable under Texas negligent misrepresentation. | Dismissed; not actionable. |
| Unreasonable collection practices | Masseys allege wilful, malicious collection conduct related to mod attempts. | Activities were not sufficiently outrageous or harassing to constitute unlawful collection. | Dismissed; allegations insufficient; injunctive relief properly denied. |
Key Cases Cited
- Herrmann Holdings Ltd. v. Lucent Techs., Inc., 302 F.3d 552 (5th Cir. 2002) (strict Rule 9(b) pleading requires specific fraudulent statements)
- Grubbs v. Kanneganti, 565 F.3d 180 (5th Cir. 2009) (distinguishes common-law fraud from False Claims Act pleading)
- De Franceschi v. BAC Home Loans Servicing, L.P., 477 F. App’x 200 (5th Cir. 2012) (negligent misrepresentation; promise of future conduct not actionable)
- Thomas v. EMC Mortg. Corp., 499 F. App’x 337 (5th Cir. 2012) (influence of modification discussions on claims; appellate alignment)
- Brinkmann v. Dallas Cnty. Deputy Sheriff Abner, 813 F.2d 748 (5th Cir. 1987) (fal holing of Texas law on failure-to-brief and waiver doctrine)
- United States ex rel. Hebert v. Dizney, 295 F. App’x 717 (5th Cir. 2008) (Rule 9(b) pleading standards in fraud actions)