Texas Homeowner Survives Motion to Dismiss Against Bank of America
By Daniel Edstrom
DTC Systems, Inc.
Thanks to Deontos for this ruling. Homeowners in Texas survive motion to dismiss in Swim vs. Bank of America et. al.
Excerpt 1:
Defendants represented to Plaintiffs that they would not foreclose during the loan modification process—but they did. Therefore, since Defendants foreclosed during the loan modification process without contacting Plaintiffs to inform them that their trial modification had been rejected, Plaintiffs state a claim for breach of contract.
Excerpt 2:
Section 392.304(a)(19) prohibits a debt collector, in debt collection or obtaining information concerning a consumer, from using a fraudulent, deceptive, or misleading representation or deceptive means to collect a debt or obtain information concerning a consumer. Plaintiffs allege BOA representatives informed Plaintiffs they had provided the required documents and that it would not foreclose during the loan modification process, that BOA and/or BAC repeatedly required documents Plaintiffs already provided, and that BAC foreclosed on the Property during the loan modification process, despite representations that it would not, because Plaintiffs allegedly did not provide documents Plaintiffs claim they provided. The Court finds that such facts state a claim under TDCPA § 392.304(a)(19), and Defendants’ Motion to Dismiss this claim under that section of the TDCPA is thus DENIED.
Excerpt 3:
To recover damages for negligent misrepresentation, Plaintiffs’ damages must be separate from their damages for breach of contract.52 Plaintiffs provide general allegations of damages for the stigma of foreclosure, loss of creditworthiness, mental anguish, and value of time lost in attempting to correct Defendants’ records. However, Plaintiffs do not plead what actual damages they seek, separate from the claims for breach of contract, for the alleged negligent misrepresentation. Plaintiffs have not sufficiently alleged recoverable damages separate from the contract, and therefore that claim is DISMISSED without prejudice.
Excerpt 4:
Plaintiffs’ claim of gross negligence is based on their negligent misrepresentation and unreasonable collection efforts claims. Since Plaintiffs’ claims for negligent misrepresentation and unreasonable collection efforts are being dismissed, Plaintiffs do not state a claim for gross negligence. Therefore, Plaintiffs’ gross negligence claim based on unreasonable collection efforts is DISMISSED with prejudice. Plaintiffs’ gross negligence claim based on negligent misrepresentation is DISMISSED without prejudice.
Excerpt 5:
Furthermore, in a quiet title action, Plaintiffs must prove and recover on the strength of their own title, not the weakness of Freddie Mac’s title. Plaintiffs do not allege facts that would permit them to recover on the strength of their own title, and cannot demonstrate an invalid charge against the title unless they prevail on their remaining contract claim. As discussed above, Plaintiffs cannot prevail on their wrongful foreclosure theory based upon the splitting of the Note and Deed of Trust. Therefore, Plaintiffs’ trespass to try title and quiet title claims are DISMISSED without prejudice. Plaintiffs may replead their trespass to try title and quiet title claims based upon the remaining breach of contract claim.
Excerpt 6:
IV. CONCLUSION
For the reasons stated above, Defendants’ Motion to Dismiss is GRANTED in part and DENIED in part. The Motion to Dismiss is DENIED as to Plaintiffs’ claim under TDCPA § 392.304(a)(19). Plaintiffs’ claims for breach of contract based on Defendants’ waiver and split between the Note and Deed of Trust, anticipatory breach of contract, TDCPA § 392.304(a)(8), DTPA, unreasonable collection efforts, gross negligence based on unreasonable collection efforts, and declaratory judgment are DISMISSED with prejudice. Plaintiffs’ TDCPA claims under sections 392.301(a)(8) and 392.303(a)(2), claims for negligent misrepresentation, quiet title and trespass to try title, and gross negligence based on negligent misrepresentation are DISMISSED without prejudice, subject to repleading within 30 days of the date of this Order. Plaintiffs shall file a clean and redlined version of the Amended Complaint, the latter showing all changes in the Original Petition.
SO ORDERED.
January 20, 2012.
Download ruling here: http://dtc-systems.net/wp-content/uploads/2012/01/Swim_vs_Bank_of_America_et_al.pdf
