Siens v. Trian, LLC

ANDREW C. SIENS, an individual, TERRI SIENS, an individual Plaintiffs, v. TRIAN, LLC, et al. Defendants.

A-11-CV-075-AWA

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS AUSTIN DIVISION

SIGNED: May 13, 2014

ORDER

Before the Court are: Plaintiffs' First Amended Complaint (Dkt. No. 12); Defendants' Motion for Judgment on the Pleadings, or in the Alternative, Motion for Summary Judgment (Dkt. No. 61) filed February 28, 2014; Plaintiffs Andrew and Terri Siens' Response (Dkt. No. 63) filed March 20, 2014; and Defendants' Reply (Dkt. No. 64) filed March 27, 2014. This case is currently set for trial on June 2, 2014.

I. Background

Plaintiffs Andrew and Terri Siens (the "Siens") sue remaining defendants, Nationstar Mortgage, Carolyn A. Taylor, Mortgage Electronic Registration Systems, Inc., and Federal National Mortgage Association, alleging that each played a role in the wrongful foreclosure on their property located at 19218 Lockwood Road, Manor, Texas 78653 ("Subject Property").

The Siens entered into a loan repayment and security agreement on July 14, 2006, with Trian., LLC. First Amended Complaint at p. 7. The agreement required the Siens to repay a loan to Trian in the amount of $250,000.00. Id. The 30-year note was secured by the Subject Property. Id. The note was assigned to Skyline. Id. at p. 8. The Siens attempted to modify the loan to lower the payments. Id.

Nationstar purchased the loan. Id. Plaintiffs thereafter contacted Nationstar and discussed qualification for the Home Affordability Modification Program ("HAMP"). Id. The Siens were set up for three initial payments of $1,566.67. Id. The Siens made these payments. In September of 2010 the Siens received a letter from Nationstar dated September 28, 2010, returning a payment as insufficient and stating "at this time, we are continuing with our collection efforts." The Siens were informed there was nothing Nationstar could do to halt the collection process. On October 1, 2010, the Siens received a notice of acceleration and notice of substitute trustee's sale. Exhibit A to Complaint. The Siens submitted another HAMP application to Nationstar. On October 28, 2010, the Siens received a letter from Nationstar stating that their information would be reviewed, and that during this evaluation period "your home will not be referred to foreclosure or be sold at a foreclosure sale if the foreclosure process has already been initiated." Exhibit E to Complaint. The Subject Property was sold at a foreclosure sale on November 2, 2010, to Federal National Mortgage Association ("FNMA"). The Siens received a letter on November 17, 2010, from Nationstar informing them that they did not meet the requirements of HAMP. Exhibit F to Complaint. On November 22, 2010, the Siens received a Notice to Vacate Premises giving them three days to vacate the Subject Property. Exhibit H to Complaint. The Siens filed this suit on January 24, 2011. Also on January 24, 2011, Defendants filed an eviction action, cause No. 061798 in the Justice of the Peace Court, Precinct 1, Place 1, Travis County, Texas, which the Siens removed to federal court on February 14, 2011. Subsequently Defendants filed two additional forcible detainer actions.

The Siens request a temporary restraining order stopping any eviction and also seek injunctive relief. They bring the following causes of action: (1) violation of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601, et seq.; (2) violations of the Real Estate Settlement Procedures Act("RESPA"), 12 U.S.C. §§ 2601-2617; (3) contractual breach of duty of good faith and fair dealing; (4) violations of the Texas Deceptive Trade Practices Act, TEXAS BUS. & COM. CODE § 17.44; (5) recission of their loan; (6) Texas statutory fraud; (7) breach of fiduciary duty; (8) unconscionability; (9) predatory lending; (10) quiet title; (11) tortious interference with existing contract; (12) malicious civil prosecution; and (13) declaratory relief.¹

II. Standard of Review

Defendants move for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c), and alternatively move for summary judgment to the extent the Court cannot grant judgment on the pleadings. Federal Rule of Civil Procedure 12(c) provides that "[a]fter the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings." "The central issue is whether, in the light most favorable to the plaintiff, the complaint states a valid claim for relief." Hughes v. Tobacco Inst., Inc., 278 F.3d 417, 420 (5th Cir. 2001) (citing St. Paul Mercury Ins. Co. v. Williamson, 224 F.3d 425, 440 n.8 (5th Cir. 2000)). "Pleadings should be construed liberally, and judgment on the pleadings is appropriate only if there are no disputed issues of fact and only questions of law remain." Great Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 312 (5th Cir. 2002) (quoting Hughes, 278 F.3d at 420). The standard applied under Rule 12(c) is the same as that applied under Rule 12(b)(6). Ackerson v. Bean Dredging, LLC, 589 F.3d 196, 209 (5th Cir. 2009); Guidry v. American Public Life Ins. Co., 512 F.3d 177, 180 (5th Cir. 2007).

When evaluating a motion to dismiss for failure to state a claim under Rule 12(b)(6) the complaint must be liberally construed in favor of the plaintiff and all facts pleaded therein must betaken as true. Leatherman v. Tarrant Cnty. Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 164 (1993); Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996). Although Rule 8 mandates only that a pleading contain a "short and plain statement of the claim showing that the pleader is entitled to relief," this standard demands more than unadorned accusations, "labels and conclusions," "a formulaic recitation of the elements of a cause of action," or "naked assertion[s]" devoid of "further factual enhancement." Bell Atl. v. Twombly, 550 U.S. 544, 555-57 (2007). Rather, a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." Id., 550 U.S. at 570. The Supreme Court has made clear this plausibility standard is not simply a "probability requirement," but imposes a standard higher than "a sheer possibility that a defendant has acted unlawfully." Ashcroft v. Iqbal, 456 U.S. 662, 678 (2009). The standard is properly guided by "[t]wo working principles." Id. First, although "a court must accept as true all of the allegations contained in a complaint," that tenet is inapplicable to legal conclusions and "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id., 556 U.S. at 678. Second, "[d]etermining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id., 556 U.S. at 679. Thus, in considering a motion to dismiss, the court must initially identify pleadings that are no more than legal conclusions not entitled to the assumption of truth, then assume the veracity of well-pleaded factual allegations and determine whether those allegations plausibly give rise to an entitlement to relief. If not, "the complaint has alleged-but it has not 'show[n]'-'that the pleader is entitled to relief.'" Id., 556 U.S. at 679 (quoting FED. R. CIV. P.8(a)(2)).

Summary judgment is appropriate if the moving party can show that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "A factual dispute is 'genuine' where a reasonable party would return a verdict for the non-moving party." Chiu v. Plano Indep. Sch. Dist., 339 F.3d 273, 282 (5th Cir. 2003) (citation omitted). In considering a summary judgment motion, courts view the evidence in the light most favorable to the non-moving party. United Fire & Cas. Co. v. Hixson Bros., Inc., 453 F.3d 283, 285 (5th Cir. 2006). However, "[u]nsubstantiated assertions, improbable inferences, and unsupported speculation are not sufficient to defeat a motion for summary judgment." Brown v. City of Houston, 337 F.3d 539, 541 (5th Cir. 2003).

III. Analysis

A. The Siens' Standing Argument

In their Motion, Defendants present reasons that each discrete claim should be dismissed. In their Response, the Siens fail to address any of Defendants' arguments, fail to submit any evidence responsive to those arguments, and instead argue that foreclosure on the Subject Property was wrongful and therefore void. Nowhere in the First Amended Complaint do the Siens assert a wrongful foreclosure action. Nonetheless, they argue that the Defendants lack standing to collect on the debt because the Defendants cannot demonstrate that they have any pecuniary interest in the property or any injury as it applies to the Note. Response at ¶ 15. The Siens assert that Defendants were never the holders, owners, or possessors of the Note and as such cannot foreclose on the Subject Property. The Siens similarly challenge the chain of title and allege that a required transfer as denoted in the Pooling and Service Agreement did not take place, rendering the Power of Sale Clause in the Deed of Trust null and void.

The Siens' argument that Defendants must be the owner and holder of the Note in order to foreclose is inconsistent with Fifth Circuit authority. See Farkas v. GMAC Mortg., L.L.C., 737 F.3d 338, 342 (5th Cir. 2013); Martins v. BAC Home Loan Servicing, L.P., 722 F.3d 249, 255 (5th Cir. 2013). The Siens cite no legal authority and present no evidence to support their standing argument. Defendants are thus entitled to judgment on this claim.

B. Remaining Individual Claims

Although the Siens' standing arguments are the only defense they offer to the Defendants' motion, the Court also concludes that each of their individual claims fail as a matter of law.

1. TILA

Defendants assert that the Siens' Truth in Lending Act claim is barred by...