Motten v. Chase Home Finance
2011 U.S. Dist. LEXIS 69383
S.D. Tex.2011Background
- Plaintiffs Motten and Evans owe a mortgage on their homestead at 10002 Williams Field Drive; Chase Home Finance LLC serviced the loan.
- Defendant CHF moved to dismiss or for a more definite statement; Plaintiffs sought to stop a foreclosure and obtain injunctions against eviction.
- This action was removed from state court and involves claims of wrongful foreclosure and various RESPA-related theories.
- Plaintiffs seek to invalidate the foreclosure sale and halt eviction by Wilmington Trust Company, trustee.
- Court analyzes pleading standards under Twombly/Iqbal and considers public-record and attached-documents on a Rule 12(b)(6) review.
- Court grants leave to amend once more, but § orders that the proposed amended petition be stricken and sets a three-week deadline for an amended complaint.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are the original pleadings plausible to state a claim? | Motten/ Evans contend wrongful foreclosure and related claims are viable. | CHF/JPMC argue the petition lacks plausible facts and legal theory. | Original petition insufficient; amendment warranted and allowed. |
| Do RESPA claims exist that support relief? | Plaintiffs allege RESPA violations based on QWR responses and loss mitigation delays. | Defendants argue RESPA lacks private action for many asserted theories and claims are conclusory. | RESPA claims are not plausibly pled; amendment futile for RESPA-based relief. |
| Are promissory estoppel, breach of contract, and breach of good faith and fair dealing cognizable here? | Plaintiffs plead promises by lenders outside or inside contracts and seek related damages. | These claims are vague, conclusory, or barred by lack of independent duty in mortgagor/mortgagee context. | Promissory estoppel outside contract may apply; but within contract or lacking independent duty, claims are not cognizable. |
| Is there a preemption issue that affects usury/finance claims under DIDMCA? | Plaintiffs allege usury and related violations; seek relief under state law claims. | DIDMCA preempts state usury limits for federally related residential loans. | DIDMCA preemption applicable; states must defer to federal standards on usury for these loans. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard; avoid conclusory pleadings)
- Twombly, 550 U.S. 544 (U.S. 2007) (pleading must state plausible claims, not mere hypotheses)
- Great Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305 (5th Cir. 2002) (leave to amend usually allowed unless clearly futile)
- Sauceda v. GMAC Mortgage Corp., 268 S.W.3d 135 (Tex.App.-Corpus Christi 2008) (wrongful foreclosure requires proof of defect and causation to inadequate sale price)
- In re Katrina Canal Breaches Litig., 495 F.3d 191 (5th Cir. 2007) (context-specific plausibility; plead necessary facts)
- Rios v. City of Del Rio, Texas, 444 F.3d 417 (5th Cir. 2006) (Rule 12(b)(6) dismissal standards in Fifth Circuit)
- Lovelace v. Software Spectrum, Inc., 78 F.3d 1015 (5th Cir. 1996) (Rule 9(b) particularity in fraud claims)