Hurd v. Bac Home Loans Servicing, LP
880 F. Supp. 2d 747
N.D. Tex.2012Background
- Foreclosure action on real property in Balch Springs, Texas; plaintiff Emma Hurd filed suit originally against BAC Home Loans Servicing, LP; case removed by defendant Bank of America, N.A. to federal court; BOA/BAC allegedly promised loan modifications but communications were inconsistent; foreclosure occurred June 7, 2011 resulting in substitute trustee’s deed; plaintiff alleges multiple misrepresentations, improper notices, and failure to provide modification paperwork; defendant moves to dismiss under Rule 12(b)(6) with documents attached and public records noticed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract viability | Hurd pleads breach of note, deed, modification, and promise to modify | Defendant lacked clear, specific contract breach and cited lack of known holder/servicer | Breach of contract claims plausible; proceed to discovery on some theories |
| Promissory estoppel viability | Promissory estoppel exceptions to statute of frauds apply based on oral promises to modify | No written agreement at time of promise; estoppel not applicable | Promissory estoppel claim should be dismissed with prejudice |
| Negligent misrepresentation and economic loss | Defendant made false representations about modification; damages beyond contract | Economic loss rule bars tort claims tied to contract | Not barred at this stage; negligent misrepresentation survives for plaintiff to prove independent damages |
| DTPA viability | Borrower status as consumer under DTPA; misrepresentations caused damages | Borrower not a consumer for loan goods/services; DTPA claim should fail | DTPA claim dismissed with prejudice |
| Wrongful foreclosure claim validity | Procedural defects caused an inadequate sale price or improper notices | Insufficient showing of grossly inadequate price or causal link | Wrongful foreclosure claim dismissed for failure to state a claim |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading must show plausible claim beyond mere legal conclusion)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plaintiffs must plead plausible facts, not mere speculation)
- Nazareth Int’l, Inc. v. J.C. Penney Corp., Inc., 287 S.W.3d 452 (Tex. App. Dallas 2009) (duty to correct misrepresentation; economic loss doctrine nuances)
- Formosa Plastics Corp. USA v. Presidio Eng’rs and Contractors, Inc., 960 S.W.2d 41 (Tex. 1998) (economic loss doctrine and fraud distinctions in Texas)
- Sloane v. Federal Land Bank Ass’n, 825 S.W.2d 439 (Tex. 1991) (economic loss rule applicability to torts arising from contract)
- Spivey v. Robertson, 197 F.3d 772 (5th Cir. 1999) (12(b)(6) standard—consider pleadings and attachments; judicial notice allowed)