Filed: Jun. 06, 2014
Latest Update: Mar. 02, 2020
Summary: Case: 13-50884 Document: 00512655241 Page: 1 Date Filed: 06/06/2014 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals Fifth Circuit No. 13-50884 FILED Summary Calendar June 6, 2014 Lyle W. Cayce Clerk SHANNAN D. ROJAS, Plaintiff - Appellant v. WELLS FARGO BANK, N.A.; HOME LOAN CORPORATION; HSBC BANK, USA, NATIONAL ASSOCIATION; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INCORPORATED; MERSCORP, INCORPORATED; WENDY ALEXANDER, Trustee; BARRETT FRAPIER DAFFIN T
Summary: Case: 13-50884 Document: 00512655241 Page: 1 Date Filed: 06/06/2014 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals Fifth Circuit No. 13-50884 FILED Summary Calendar June 6, 2014 Lyle W. Cayce Clerk SHANNAN D. ROJAS, Plaintiff - Appellant v. WELLS FARGO BANK, N.A.; HOME LOAN CORPORATION; HSBC BANK, USA, NATIONAL ASSOCIATION; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INCORPORATED; MERSCORP, INCORPORATED; WENDY ALEXANDER, Trustee; BARRETT FRAPIER DAFFIN TU..
More
Case: 13-50884 Document: 00512655241 Page: 1 Date Filed: 06/06/2014
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 13-50884 FILED
Summary Calendar June 6, 2014
Lyle W. Cayce
Clerk
SHANNAN D. ROJAS,
Plaintiff - Appellant
v.
WELLS FARGO BANK, N.A.; HOME LOAN CORPORATION; HSBC BANK,
USA, NATIONAL ASSOCIATION; MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INCORPORATED; MERSCORP,
INCORPORATED; WENDY ALEXANDER, Trustee; BARRETT FRAPIER
DAFFIN TURNER & ENGEL, L.L.P.,
Defendants - Appellees
Appeal from the United States District Court
for the Western District of Texas
USDC No. 1:13-CV-291
Before WIENER, OWEN, and HAYNES, Circuit Judges.
PER CURIAM:*
Plaintiff Shannan D. Rojas (“Rojas”) appeals the dismissal of numerous
claims asserted against Wells Fargo Bank (“Wells Fargo”), Home Loan
Corporation (“HLC”), HSBC Bank (“HSBC”), Mortgage Electronic Registration
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
Case: 13-50884 Document: 00512655241 Page: 2 Date Filed: 06/06/2014
No. 13-50884
Systems (“MERS”), Wendy Alexander (“Alexander”), and Barrett Daffin
Frapier Turner and Engel, L.L.P. (“BDFTE”) (collectively, “the Defendants”),
relating to foreclosure on her home. We AFFIRM.
I. Background
Rojas obtained a loan from HLC to purchase the property at issue. She
executed a Note and a Deed of Trust, which conveyed to the beneficiary the
power to sell the property in the event of default. The Deed of Trust listed
MERS as a “beneficiary” and “nominee” for HLC, the original lender. MERS
assigned the Deed of Trust to HSBC. When Rojas defaulted, HSBC, through
its servicer Wells Fargo, appointed a substitute trustee, Alexander, who, along
with its counsel, BDFTE, attempted to foreclose on the property.
Rojas sued in Texas state court, asserting several causes of action: (1)
quiet title; (2) breach of contract; (3) violation of Chapter 12 of the Texas Civil
Practice and Remedies Code; (4) violation of the Texas Property Code’s notice
provisions; (5) violation of the Texas Debt Collection Act (“TDCA”); 1 and (6)
violation of the Texas Deceptive Trade Practices Act (“DTPA”). The
Defendants removed the action to Federal Court and filed a motion to dismiss
under Federal Rule of Civil Procedure 12(b)(6). After Rojas moved for remand
to state court, the district court granted the Defendants’ motion and denied
Rojas’s motion. Rojas timely appealed, arguing that the district court lacked
subject matter jurisdiction because three of the defendants were not diverse.
Rojas also argued that the district court erred in granting the Rule 12(b)(6)
motion because it improperly held that: (1) MERS was entitled to transfer the
Deed of Trust; (2) the assignment and appointment of Alexander as a
1 Rojas does not appeal the district court’s grant of the Defendants’ motion to dismiss
on the alleged violation of the TDCA. Arguments not raised in Rojas’s opening brief on appeal
are waived, and thus we decline to consider it. See Tex. Democratic Party v. Benkiser, 459
F.3d 582, 594 (5th Cir. 2006).
2
Case: 13-50884 Document: 00512655241 Page: 3 Date Filed: 06/06/2014
No. 13-50884
substitute trustee did not violate Chapter 12 of the Texas Civil Practice and
Remedies Code; (3) Local Government Code § 192.007 is not a prerequisite to
the effectiveness of assignments; and (4) Rojas has no claim under the DTPA
because she is not a “consumer.”
II. Discussion
A. Denial of Motion to Remand
We review the denial of a motion to remand de novo. Clayton v.
ConocoPhillips Co., 722 F.3d 279, 290 (5th Cir. 2013). Because the suit does
not involve a federal question, the claim can only be removed to federal court
if the matter exceeds $75,000, the parties are diverse, and none of the “properly
joined . . . defendants is a citizen of the State in which such action is brought.”
28 U.S.C. § 1441(b)(2) (emphasis added); 28 U.S.C. § 1332(a); see also 28 U.S.C.
§ 1441(a). It is undisputed that Rojas and three of the named defendants—
HLC, Alexander, and BDFTE—are citizens of Texas. However, the Defendants
argue that HLC, Alexander, and BDFTE were not properly joined, and
therefore, the properly joined parties are diverse. 2 See Smallwood v. Ill. Cent.
R.R. Co.,
385 F.3d 568, 572–73 (5th Cir. 2004). Improper joinder can be shown
by demonstrating “the inability of the plaintiff to establish a cause of action
against the non-diverse party in state court.”
Id. at 573. As a result, we must
perform a Rule 12(b)(6)-style review.
Id.
Rojas attempts to insert HLC through her claims of quiet title and
fraudulent activity under Section 12.002 of the Texas Civil Practice and
Remedies Code. Rojas’s quiet title claim against HLC is insufficient because a
plaintiff must show, inter alia, that the property is adversely affected by a
claim by the defendant. Vernon v. Perrien,
390 S.W.3d 47, 61 (Tex. 2012). HLC
2 The parties do not dispute that Wells Fargo, HSBC, and MERS are diverse
defendants.
3
Case: 13-50884 Document: 00512655241 Page: 4 Date Filed: 06/06/2014
No. 13-50884
has not asserted an adverse claim on Rojas’s property, and Rojas has failed to
allege any asserted claim other than her notion that the transfer of interests
in the Note by HLC should be considered an adverse interest. HLC merely
originated the loan, and its assignment through MERS ended its involvement
with the mortgage, so HLC has no adverse claim against the property. See id.
Further, Rojas merely asserts conclusional statements that HLC committed
fraud under section 12.002. See generally Bell Atl. Corp. v. Twombly,
550 U.S.
544, 555–59 (2007) (conclusional statements are not sufficient to withstand a
motion to dismiss). As such, there is no reasonable basis for recovery, and HLC
was improperly joined. See
Smallwood 385 F.3d at 572–73.
Rojas attempts to join Alexander and BDFTE by claiming they are liable
under the Texas Civil Practice and Remedies Code Section 12.002 when they
attempted to foreclose on the property on behalf of Wells Fargo. Alexander
was improperly joined because the Texas Property Code creates a qualified
immunity for mortgage trustees who make good faith errors. See § 51.007(f)
(West 2007). 3 Rojas does not provide any allegations that Alexander was
acting in bad faith, and therefore has no reasonable basis for recovery. See,
e.g., R&L Inv. Prop., LLC v. Green, No. 3:12-CV-4171-O, 2014 WL 1807618, at
*8 (N.D. Tex. May 6, 2014) (“[C]ourts have generally held that Section 51.007(f)
imposes a substantive pleading element on a plaintiff that requires a plaintiff
to allege bad faith on the part of the trustee.”); Williams v. Wells Fargo Bank,
No. 4:13-cv-825,
2014 WL 1024003, at *5 (S.D. Tex. Mar. 13, 2014). There are
no factual statements supporting the conclusion that Alexander was not acting
in good faith when she acted at the request of Wells Fargo. Therefore, there is
no reasonable basis for recovery asserted, and Alexander was improperly
3A trustee “shall not be liable for any good faith error resulting from reliance on any
information in law or fact provided by the . . . mortgagee or their respective attorney, agent,
or representative. . . .”
4
Case: 13-50884 Document: 00512655241 Page: 5 Date Filed: 06/06/2014
No. 13-50884
joined. See generally Smallwood, 385 F.3d at 572–73;
Twombly, 550 U.S. at
555–59.
Finally, BDFTE was improperly joined because attorneys are generally
immune from suits brought under Texas law against them by their adversaries
if the action arises out of the duties involved in representing a client. See
Chapman Children’s Trust v. Porter & Hedges, L.L.P., 32 S.W.3d 429, 440–41
(Tex. App.—Houston [14th Dist.] 2000, pet. denied); Bradt v. West,
892 S.W.2d
56, 71–72 (Tex. App.—Houston [1st Dist.] 1994, writ denied). We have
previously held that BDFTE has immunity for its acts as foreclosure counsel.
See Iqbal v. Bank of America, N.A., No. 13-50218,
2014 WL 1017101, at *2 (5th
Cir. Mar. 18, 2014) (unpublished). 4 Finally, Rojas failed to allege any
fraudulent, knowingly fraudulent, or wrongful action on the part of BDFTE in
its acts as foreclosure counsel beyond mere legal conclusions, and therefore,
there is no reasonable basis for recovery. See generally
Twombly, 550 U.S. at
555–59.
Because the district court properly found that HLC, Alexander, and
BDFTE were improperly joined, it did not err in dismissing them, and complete
diversity existed between the remaining parties. See, e.g., Smallwood, 385
F.3d at 572–73. Therefore, the district court did not err in denying Rojas’s
motion to remand.
B. Grant of the Defendants’ Rule 12(b)(6) Motions
We review de novo the district court’s grant of a Rule 12(b)(6) motion to
dismiss for failure to state a claim, and we construe the facts in the light most
favorable to the nonmoving party. Leal v. McHugh, 731 F.3d 405, 410 (5th Cir.
4Although Iqbal is not controlling precedent, we cite it for its persuasive authority
and factual similarity. See Ballard v. Burton, 444 F.3d 391, 401 n.7 (5th Cir. 2006) (citing
5TH CIR. R. 47.5.4).
5
Case: 13-50884 Document: 00512655241 Page: 6 Date Filed: 06/06/2014
No. 13-50884
2013). Dismissal is appropriate only if the complaint fails to plead “enough
facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S.
at 570.
Rojas’s quiet title and breach of contract claims are premised on the
argument that, consistent with the Deed of Trust, the Defendants must show
that they have authority to foreclose on the property, and that the authority to
foreclose is limited to the holder of the Note. 5 We have repeatedly rejected
similar attempts to challenge an assignee’s standing to foreclose under an
assignment from MERS. See, e.g., Farkas v. GMAC Mortg., L.L.C., 737 F.3d
338, 342 (5th Cir. 2013) (“MERS and its assigns [are permitted] to bring
foreclosure actions under the Texas Property Code.”);
Martins, 722 F.3d at
253–56 (holding that the assignee of a deed of trust holds the power to
foreclose). Rojas does not deny that MERS is listed as a nominee for HLC—
the original lender—and its successors and assigns, and a beneficiary with the
ability to foreclose; therefore, there is no question that MERS, and its
assignees, had the authority to foreclose on the property. See TEX. PROP. CODE
§ 51.0001(4)(A) (West 2007) (defining a mortgagee as “the grantee, beneficiary,
owner, or holder of a security instrument”); see also
Farkas, 737 F.3d at 342
(holding that MERS’s assignee is an “appropriate party to initiate non-judicial
foreclosure actions” under Section 51.0001(4)).
Rojas next argues that HSBC violated Section 12 of the Texas Civil
Practice and Remedies Code by appointing a substitute trustee before the Deed
of Trust was properly assigned. Section 12.002 requires, inter alia, that the
5 Rojas claims that she is not asserting the “split-the-note” theory, which was rejected
in Martins v. BAC Home Loans Servicing, L.P., 722 F.3d 249, 253–55 (5th Cir. 2013), but
rather a “show me the authority to foreclose” theory. Rojas’s claim is that the assignment of
the Deed of Trust on the alleged fraudulent authority of MERS rendered the Deed of Trust
and its power of sale void with respect to HSBC and its servicers, which is essentially the
“split-the-note” theory by another name, and is inapplicable under Texas law. See
id. at 255.
6
Case: 13-50884 Document: 00512655241 Page: 7 Date Filed: 06/06/2014
No. 13-50884
plaintiff plead that the defendant knowingly made, presented, or used a
document creating a “fraudulent lien or claim” against real property with the
intent to cause physical injury, financial injury, or mental anguish. Assuming,
without deciding, that a document assigning a deed of trust constitutes a “lien
or claim” under Section 12.002, 6 Rojas’s claim fails because she did not
adequately plead the statute’s “injury” element. 7 Rather, to the extent that
Rojas’s complaint merely parrots the language of § 12.002, her statements are
legal conclusions, not allegations of fact, and therefore insufficient to state a
plausible claim for relief. See Twombly, 550 U.S. at 555–57 (holding that a
plaintiff must do more than recite the formulaic elements of a cause of action).
Rojas’s next claim is that the Defendants’ failure to record every transfer
of the Deed of Trust violates the notice provisions contained in Texas Local
Government Code section 192.007. However, we have previously noted that
this provision is “best read as a procedural directive to county clerks, not as a
prerequisite to the validity of assignments.” Reinagel v. Deutsche Bank Nat’l
Trust Co., 735 F.3d 220, 228 n.27 (5th Cir. 2013). Therefore, the district court
properly dismissed this claim.
6 Neither this court nor any Texas appellate court has determined whether a
document assigning a deed of trust constitutes a “lien or claim” under Section 12.002, and
there is currently a split among the federal district courts that have considered the issue. A
majority have held that a document assigning a deed of trust does not qualify as a “lien or
claim” under Section 12.002. See, e.g., Perdomo v. Fed. Nat’l Mortg. Ass’n, No. 3:11-CV-734-
M, 2013 WL 1123629, at *5 (N.D. Tex. Mar. 18, 2013) (unpublished). Some courts, however,
have concluded that the text of the statute prohibits not only the creation of fraudulent liens
or claims against real property, “but also claims against an interest in real . . . property.”
Howard v. JP Morgan Chase NA, No. SA-12-CV-00440-DAE,
2013 WL 1694659, at *12 (W.D.
Tex. Apr. 18, 2013) (unpublished) (citation and internal quotation marks omitted). We need
not decide the issue here.
7 Although the district court granted the motion to dismiss on the basis that a deed of
trust is not a “lien or claim,” we may affirm a district court’s Rule 12(b)(6) dismissal on any
grounds supported by the record. Hosein v. Gonzales, 452 F.3d 401, 403 (5th Cir. 2006).
7
Case: 13-50884 Document: 00512655241 Page: 8 Date Filed: 06/06/2014
No. 13-50884
Finally, Rojas’s DTPA claim was properly dismissed because we have
previously held that a mortgagor only qualifies as a consumer under the DTPA
if her “primary objective in obtaining the loan was to acquire a good or service,
and that good or service forms the basis of the complaint.” Miller v. BAC Home
Loans Servicing, L.P., 726 F.3d 717, 725 (5th Cir. 2013). Rojas is not a
consumer under this definition because the basis of her claim is the subsequent
loan servicing and foreclosure activities, rather than the goods or services
acquired in the original transaction. See
id.
AFFIRMED.
8
