Bittick v. JPMorgan Chase Bank, NA

DONALD BITTICK, Plaintiff,

v.JPMORGAN CHASE BANK, NA, ET AL., Defendants.

NO. 4:11-GV-812-A

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS FORT WORTH DIVISION

SIGNED: April 18, 2012

MEMORANDUM OPINIONandORDER

Now pending in the above-captioned action is the motion to dismiss for failure to state a claim, filed by defendant JPMorgan Chase Bank, N.A. ("Chase") on December 23, 2011. Plaintiff, Donald Bittick, filed no response to the motion, and the issues are ripe for consideration. After having considered such motion, the amended pleading filed by plaintiff, and applicable legal authorities, the court has concluded that the motion to dismiss should be granted.¹

I.Background

Plaintiff instituted this action by a pleading in the District Court of Tarrant County, Texas, 415th Judicial District, on July 29, 2011, against defendants Home Loan Mortgage Corporation d/b/a Expanded Mortgage Credit and Imperial Mortgage Corporation ("Imperial"), as Cause No. CV-11-1145. Plaintiff filed an amended petition on October 31, 2011, naming as defendants Imperial and JPMorgan Chase Bank, NA f/k/a Home Loan Corporation d/b/a Expanded Mortgage Credit.

Chase, as successor servicer to EMC Mortgage LLC f/k/a EMC Mortgage Corporation ("EMC"), removed the action to this court on November 16, 2011. Chase filed its first motion to dismiss on November 23, 2011. The court, by order of December 2, 2011, denied Chase's motion and further ordered plaintiff to file an amended complaint that complied with the requirements of Rule 8(a), Rule 10(a), and if applicable, Rule 9 of the Federal Rules of Civil Procedure.

Plaintiff filed an amended complaint ("Complaint") on December 12, 2011. The Complaint appears to allege only two defendants, Chase and Imperial (collectively, "defendants"). Section I of the Complaint, titled "PARTIES," includes Chase andImperial but not EMC.² Additionally, plaintiff names Chase and EMC as a single defendant in the caption of the Complaint.³

To date, only Chase has been served with citation in the state court. Chase filed a motion to dismiss the Complaint for failure to state a claim on December 23, 2011.

In the Complaint, plaintiff alleges claims for predatory lending, common-law fraud, fraud in the inducement, fraud by nondisclosure, civil conspiracy to commit common-law fraud and fraud in the inducement, procedural and substantive unconscionability, and violations of the Real Estate Settlement Procedures Act ("RESPA") and the Truth in Lending Act ("TILA"). Plaintiff sought judgment for economic, special, and exemplary damages, pre- and post-judgment interest, attorney's fees and costs, and declaratory relief.

In summary, plaintiff made the following allegations in the Complaint:

In 2004, plaintiff moved into the property at 202 Lake Hollow Drive, Weatherford, Texas, under a rental agreement. Compl. at 2. Between the end of 2005 and early 2006, plaintiff began efforts to purchase the property, and consulted with a realtor recommended by the owner. Id. Plaintiff also consulted with the broker recommended by the realtor. Id. at 2-3. This first broker denied plaintiff's application and suggested that plaintiff use "Imperial, a broker who worked in conjunction with, and was approved by Defendant EMC." Id. at 3. The first broker "who gathered all of Plaintiff's initial paperwork for the loan application sent it to Defendant Imperial." Id. Plaintiff did not see any of the paperwork after it was released from the original broker into Imperial's possession. Id.

Because plaintiff could not pay the amount to close the sale, he informed Imperial that he could not purchase the property. Id. An unidentified Imperial representative "offered to loan the Plaintiff approximately $1,000 toward the down-payment and subsequently roll that amount into the loan so that Defendants could eventually be paid back." Id.

As to the loan application, plaintiff complains that Imperial did not verify plaintiff's stated income and did notrely upon plaintiff's true income in determining his qualification for the approved loan. Id. at 3-4. "Imperial used Plaintiff's 'stated income' as it was provided to them by the original loan broker rather than obtaining and ascertaining an accurate income amount from Plaintiff" to ensure that he was qualified for the approved loan amount. Id. at 3. The loan application "reflects that Plaintiff made $5,000 per month through self employment income." Id. Plaintiff "maintains he represented the true income to Defendant Imperial, but this was unlikely the income on which the loan was based[,] as the loan amount and interest rates were not compatible with Plaintiff's income and repayment capabilities." Id. Furthermore, this "stated income figure was never verified by Defendant Imperial." Id. It is not clear whether plaintiff's "true income" is $5,000 or another figure.

Plaintiff also complains that federally mandated disclosures were not provided to him in advance of closing.⁴ " [A]s best asPlaintiff recalls, he was never provided with any of the other required disclosures including but not limited to the Truth-In Lending Act (TILA), Real Estate Settlement Procedures Act (RESPA), etc either at or three (3) days after the initial loan application when he signed the Form 1003." Id. at 3-4. "It was not until the day of closing that Plaintiff received some of these disclosures"; by then, "it was too late to fully review the documentation and understand the implications of the loan." Id. at 4.

The loan became effective "[o]n or about June 21, 2006," when "Plaintiff signed the loan agreement with his wife, Wendy Bittick, who signed as a non-purchasing spouse." Id. As to the loan interest rate, plaintiff alleges that the interest rate onthe "loan was not based on the stated income amount that Plaintiff provided to the initial loan broker."⁵ Id. at 4.

Between the end of 2009 and beginning of 2010, plaintiff "got off track with payments and was forced to apply for a temporary loan modification with Defendant in May 2010." Id. Instead "of accelerating Plaintiffs' note, Defendant EMC agreed to a temporary loan modification in May 2010." Id. Under the agreement, EMC "agreed to a temporary modification of a reduction of the interest to only 5.5%," and that "the difference between the previous rate and the current temporary rate [would] be tacked onto the back of the note." Id. at 4.

At present, plaintiff remains "under the temporary loan modification, but will inevitably be subjected . . . to the initial, unfair interest rates once the temporary" period ends. Id. Plaintiff did not learn of "many of the actions taken by Defendants [sic] Imperial and by approval, Defendant EMC," until he consulted with an attorney.⁶ Id. at 4. He eventuallyrealized that "many things that transpired in his loan transaction were hallmarks of predatory lending practices." Id. Defendant has not been making payments, because he "is hesitant and uncertain about continuing to pay the loan under its current terms." Id. at 5. Instead, he "is escrowing the necessary funds." Id.

After plaintiff filed the Complaint, Chase filed a motion to dismiss the Complaint. Plaintiff did not file a response. The court now turns to the applicable standard for pleading, and applies the standard to the Complaint.

II.Analysis

A. The Rule 8(a)(2) Pleading Standards

Rule 8(a)(2) of the Federal Rules of Civil Procedure provides, in a general way, the applicable standard of pleading. It requires that a complaint contain "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), "in order to give the defendant fair notice of what the claim is and the grounds upon which it rests," Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks and ellipsis omitted). Although a complaint neednot contain detailed factual allegations, the "showing" contemplated by Rule 8 requires the plaintiff to do more than simply allege legal conclusions or recite the elements of a cause of action. See Twombly, 550 U.S. at 555 & n.3. Thus, while a court must accept all of the factual allegations in the complaint as true, it need not credit bare legal conclusions that are unsupported by any factual underpinnings. See Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1950 (2009) ("While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations.").

Moreover, to survive a motion to dismiss for failure to state a claim, the facts pleaded must allow the court to infer that the plaintiff's right to relief is plausible. Iqbal, 129 S. Ct. at 1950. To allege a plausible right to relief, the facts pleaded must suggest liability; allegations that are merely consistent with unlawful conduct are insufficient. Twombly, 550 U.S. at 566-69. "Determining whether a complaint states a plausible claim for relief . . . [is] a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 129 S. Ct. at 1950.

"A statute of limitations may support dismissal under Rule 12(b)(6) where it is evident from the plaintiff's pleadings that the action is barred and the pleadings fail to raise some basisfor tolling or the like." Jones v. Alcoa, Inc., 339 F.3d 359, 366 (5th cir. 2003). If the allegations show that relief is barred by the applicable statute of limitations, the complaint is subject to dismissal for failure to state a claim. Jones v. Bock, 549 U.S. 199, 215 (2007).

B. Claims Against Imperial

The court may dismiss an action sua sponte where it is apparent from the pleadings that plaintiff has failed to state a claim for relief. Federal courts possess the inherent power "to manage their own affairs so as to achieve the orderly and expeditious disposition of cases." Link v. Wabash R.R. Co., 370 U.S. 626, 630-31 (1962). Within this power is the authority to control their dockets, prevent undue delays in the disposition of pending cases, and...