Lott v. Wells Fargo Bank, N.A.
3:17-cv-01270
| N.D. Tex. | Aug 22, 2018Background
- Andrew Lott filed a state-court action on March 31, 2017 to stop foreclosure of his Garland, Texas property; Wells Fargo removed the case to federal court.
- Lott alleges Wells Fargo failed to provide a reinstatement amount, notice of default, notice of acceleration, and proper notice of a scheduled foreclosure sale.
- Lott asserts breach of contract, quiet title, declaratory and injunctive relief; foreclosure sale did not occur and Lott remains in possession.
- Wells Fargo moved to dismiss under Rule 12(b)(6) arguing failure to plead damages, lack of tender, and that statutory claims are not actionable; the Magistrate Judge recommends granting the motion.
- The recommendation dismisses claims without prejudice but permits Lott 21 days to amend; failure to amend would result in dismissal with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract — failure to give reinstatement/notice | Lott: Wells Fargo breached the Deed of Trust by not providing reinstatement amount and required notices | Wells Fargo: Complaint fails to plead actual damages; dismissal warranted | Court: Dismiss breach claim for failure to plead damages (no foreclosure occurred; possession retained) |
| Breach of contract — prior default bars recovery | Lott: Claims based on notice independent of payment default | Wells Fargo: Lott's own default is a prior material breach that bars relief | Court: Rejected as categorical; default alone does not bar notice-based claim (citing Williams), but dismissal still required for lack of damages |
| Quiet title — challenge to lender’s lien/right to foreclose | Lott: Recorded deed shows superior title; lender’s threatened foreclosure clouds title | Wells Fargo: Lott is in default and has not tendered amounts due; quiet title improper | Court: Dismiss quiet title for failure to allege tender (tender is prerequisite) |
| Declaratory relief / Texas Prop. Code §51.002 / wrongful foreclosure | Lott: Seeks declaration Wells Fargo lacks authority to foreclose for failing to give reinstatement quote and statutory notices | Wells Fargo: §51.002 does not provide private right of action and sale never occurred so claims are moot | Court: Claims based on section 51.002/wrongful foreclosure fail as moot (no sale); no declaratory relief for alleged failure to provide reinstatement quote under the Deed of Trust provision cited |
Key Cases Cited
- In re Katrina Canal Breaches Litig., 495 F.3d 191 (5th Cir. 2007) (Rule 12(b)(6) pleading standard and treatment of attachments)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (legal conclusions must be supported by factual allegations)
- Smith Int’l, Inc. v. Egle Grp., L.L.C., 490 F.3d 380 (5th Cir. 2007) (elements of breach of contract under Texas law discussed)
- Williams v. Wells Fargo Bank, N.A., 884 F.3d 239 (5th Cir. 2018) (lender notice obligations remain meaningful despite borrower default)
- Sauceda v. GMAC Mortg. Corp., 268 S.W.3d 135 (Tex. App.—Corpus Christi 2008) (Texas breach of contract elements)