Carrington v. Bank of America, N.A., 4:12-cv-01542

Plaintiffs allege 2003 subprime Texas Home Equity loan was predatory and misrepresented, causing inflated payments and pursuit of foreclosure.
The case was removed from state court to the SDTX on federal-question grounds (RESPA, TILA) with supplemental jurisdiction over state-law claims.
Plaintiffs filed First Amended Petition asserting new causes of action under DTPA, TDCA, negligence, bad faith, reinstatement breach, and contract duties; Original Petition was superseded.
Defendant moved to dismiss the First Amended Petition; Plaintiffs moved to remand, arguing loss of federal questions post-amendment and lack of complete diversity.
The court held post-removal amendments can retain jurisdiction if diversity remains; ultimately denied remand and granted dismissal of the First Amended Petition.
Court found Plaintiffs’ DTPA and negligence claims fail as a matter of law, rejected TDCA claims, and held the oral modification/reinstatement theories barred by the statute of frauds and the economic loss rule; leave to amend was denied as futile.

Issue	Plaintiff's Argument	Defendant's Argument	Held
DTPA consumer status	Carrington argues they are consumers.	BANA contends they are not consumers under the DTPA.	Not consumers; DTPA claim dismissed.
DTPA viability of misrepresentation/negligence claims	Carrington asserts deceptive practices and misrepresentations by BANA regarding modification.	BANA argues economic loss rule and lack of duty bar claims; servicing not a ‘good or service.’	Claims fail under the economic loss rule and lack of actionable duty; dismissed.
TDCA claim viability	Carrington alleges deceptive debt collection practices in modification process.	TDCA claims fail because alleged charges were authorized by the loan documents; not debt collection under the statute.	TDCA claim failure; no statutory violation shown.
Statute ofFrauds and oral modification	Promissory estoppel or oral reinstatement could modify the loan terms.	Oral modification to a loan over $50,000 unenforceable under Tex. Bus. & Com. Code § 26.02.	Oral modification/anticipated promissory estoppel barred; statute of frauds applies; claims fail.
Leave to amend	Plaintiffs should be allowed to amend to state new theories or facts.	Amendment would be futile as claims fail as a matter of law.	Court denied leave to amend; amendments would be futile.

Twombly, 550 U.S. 544 (2007) (pleading must plead plausible claims, not mere recitations)
Gibbs, 383 U.S. 715 (1966) (pendent jurisdiction is discretionary; economy and fairness considerations guide retention)
La Sara Grain Co. v. First Nat'l Bank of Mercedes, 673 S.W.2d 169 (Tex. 1980) (consumer status linked to object of transaction; borrowing alone not a consumer)
First State Bank v. Keilman, 851 S.W.2d 914 (Tex. App.—Austin 1993) (consumer status requires purchase or lease of goods/services; lending alone not enough)
Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256 (5th Cir. 1995) (jurisdictional and pleading principles in federal courts; post-removal amendments)
Brookshire Bros. Holding, Inc. v. Dayco Prods., Inc., 554 F.3d 595 (5th Cir. 2009) (factors for declining supplemental jurisdiction; economy and comity considerations)
Leininger v. Leininger, 705 F.2d 727 (5th Cir. 1983) (amount in controversy/relevance of property value in jurisdictional analysis)