605 F. App'x 272
5th Cir.2015Background
- In 2007 Jacob Woullard executed a $219,663 note secured by a deed of trust to JP Morgan Chase; he died in 2009 and Nita Page became administratrix of his estate.
- Page communicated with Chase before and after Woullard’s death about assuming the loan and seeking a loan modification; the account was placed in the name “The Estate of Jacob Woullard.”
- The estate fell behind on payments; an alleged escrow shortage arose after Chase paid increased taxes, and Chase notified the estate that the monthly payment would be raised to recoup the shortage; a $1,597 payment was placed into suspense when offered.
- Foreclosure notices were issued (foreclosure scheduled May 7, 2013); the estate sued May 3, 2013 alleging breach/anticipatory breach of contract, TDCA violations, negligent misrepresentation, and unjust enrichment; the district court dismissed several claims and the estate appealed.
- On appeal the estate challenged dismissal of (1) breach of contract (governing-law clause and waiver), (2) Texas Debt Collection Act claims, and (3) negligent misrepresentation; the Fifth Circuit affirmed dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach based on deed-of-trust governing-law clause | Paragraph 16 makes any violation of federal/state law a breach of the deed of trust | Paragraph 16 merely identifies governing law and does not convert all statutory violations into contract breaches; estate failed to identify which laws were violated or damages | Dismissed — clause does not automatically create breach claims and plaintiff failed to plead required elements |
| Waiver of right to accelerate/foreclose by accepting payments | Chase waived foreclosure rights by accepting a $1,597 payment (and/or representing modified payment) | Anti-waiver provisions in the note/deed and absence of clear intent to relinquish rights preclude waiver; isolated conduct insufficient | Dismissed — no plausible allegation of intentional relinquishment and anti-waiver clause is persuasive |
| TDCA violations (unauthorized charges, deceptive practices, wrongful foreclosure) | Chase imposed unauthorized charges, deceived about modification eligibility, foreclosed while disputing amounts | Complaint alleged only unauthorized charges and admitted default; plaintiff didn’t plead the other alleged deceptive acts in the complaint | Dismissed — TDCA claims limited to unauthorized charges; plaintiff failed to plead those charges were not authorized by loan documents |
| Negligent misrepresentation (misstatements about modification/assumption) | Chase misrepresented account status and modification process; plaintiff relied and suffered pecuniary loss | Allegations of specific promises were not pled in the complaint; alleged statements would be promises of future action, not existing facts; economic-loss rule bars recovery | Dismissed — complaint failed to identify concrete false statements of existing fact and claims concern future promises |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (facial plausibility standard for pleadings)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading standards — labels and conclusions insufficient)
- In re Katrina Canal Breaches Litig., 495 F.3d 191 (5th Cir. 2007) (standard of review for 12(b)(6))
- Doss v. Homecomings Fin. Network, Inc., 210 S.W.3d 706 (Tex. App. 2006) (elements of breach of contract under Texas law)
- Henning v. OneWest Bank FSB, 405 S.W.3d 950 (Tex. App. 2013) (elements of negligent misrepresentation under Texas law)