Loida Vera v. Bank of America, N.A.

Case: 13-10231 Document: 00512650405 Page: 1 Date Filed: 06/03/2014
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 13-10231
FILED
June 3, 2014
Lyle W. Cayce
LOIDA VERA; RAMON PEREZ, Clerk
Plaintiffs-Appellants
v.
BANK OF AMERICA, N.A.; THE BANK OF NEW YORK MELLON, formerly
known as Bank of New York, as Trustee for the Benefit of the Certificate
Holders of the CWABS, Incorporated, Asset-Backed Certificates, Series
2004-6,
Defendants-Appellees
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:12-CV-3940
Before KING, HAYNES, and GRAVES, Circuit Judges.
PER CURIAM: *
Loida Vera and Ramon Perez (collectively, “Plaintiffs”) appeal the
district court’s dismissal of their breach of contract and declaratory judgment
claims against Bank of America, N.A. (“Bank of America”) and The Bank of
New York Mellon, f/k/a The Bank of New York, as Trustee for the Benefit of
the Certificate Holders of the CWABS, Inc., Asset-Backed Certificates, Series
* 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
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No. 13-10231
2004-6 (“Bank of New York,” and, collectively with Bank of America,
“Defendants”). We AFFIRM.
I. Background
In 2004, Plaintiffs purchased a home located in Dallas, Texas (the
“Property”). To finance the purchase, Plaintiffs signed both a promissory note
(the “Note”) in the amount of $98,800 payable to Countrywide Home Loans,
Inc. d/b/a America’s Wholesale Lender and also a deed of trust (the “Deed”) to
secure the Note. Thereafter, Bank of America served as the mortgage servicer
on the Note. Later, the Deed was assigned to Bank of New York. In 2011,
Plaintiffs defaulted on the Note by failing to make timely mortgage payments.
Bank of America foreclosed on the Property, and Bank of New York filed an
eviction action in Texas state court.
Plaintiffs then filed the instant action in Texas state court. Defendants
removed the action to federal court and moved to dismiss the complaint. After
Plaintiffs failed to respond to the motion to dismiss, the district court dismissed
the action without prejudice and ordered Plaintiffs to file an amended
complaint. Plaintiffs subsequently filed an amended complaint in which they
asserted claims for breach of contract, wrongful foreclosure, declaratory
judgment, suit to quiet title, and tortious interference with contract.
Defendants again moved to dismiss, and Plaintiffs again failed to respond. The
district court granted the motion and entered final judgment in favor of
Defendants. Plaintiffs timely appealed.
II. Standard of Review
We review a district court’s grant of a motion to dismiss de novo,
accepting all well-pleaded facts as true and viewing those facts in the light
most favorable to the plaintiff. See Randall D. Wolcott, M.D., P.A. v. Sebelius,
635 F.3d 757, 763 (5th Cir. 2011). Dismissal is appropriate where the plaintiff
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fails to allege enough facts to state a claim to relief that is plausible on its face
and thus does not “raise a right to relief above the speculative level.” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555 (2007). A claim has facial plausibility
when the pleaded factual content “allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009).
III. Discussion
Plaintiffs appeal the district court’s dismissal of their state-law breach
of contract and declaratory judgment claims. 1 Plaintiffs raise several grounds
in arguing that the district court erred in dismissing these claims. Reversal is
inappropriate if the district court’s judgment is supported by the record on an
asserted ground, even if it differs from the one relied upon by the district court.
Wolcott, 635 F.3d at 763 (citation omitted).
Defendants argue that Plaintiffs waived any right to challenge the
district court’s ruling by failing to respond to the motion to dismiss. “[A]s a
general rule a court of appeals will not consider an argument not made below
and since the appellant made no arguments below, then the appellant can
make no argument on appeal.” Walker v. S. Cent. Bell Tel. Co., 904 F.2d 275,
276 n.1 (5th Cir. 1990), superseded by statute on other grounds, CBOCS West,
Inc. v. Humphries, 553 U.S. 442 (2008); see also Miller v. Nationwide Life Ins.
Co., 391 F.3d 698, 701 (5th Cir. 2004) (“We have frequently said that we are a
court of errors, and that a district court cannot have erred as to arguments not
presented to it.”); Savers Fed. Sav. & Loan Ass’n v. Reetz, 888 F.2d 1497, 1501
1 Plaintiffs did not address their claims for wrongful foreclosure, suit to quiet title, or
tortious interference with contract in their brief on appeal and have therefore waived any
challenges to the dismissal of these claims. See Cinel v. Connick, 15 F.3d 1338, 1345 (5th
Cir. 1994) (“An appellant abandons all issues not raised and argued in its initial brief on
appeal.”) (emphasis omitted); Piney Woods Country Life Sch. v. Shell Oil Co., 905 F.2d 840,
854 (5th Cir. 1990).
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(5th Cir. 1989). Nonetheless, while we will not consider arguments advanced
by Plaintiffs for the first time on appeal, we still must consider whether the
district court correctly concluded that Plaintiffs had “failed to state a claim on
which relief can be granted.” See Walker, 904 F.2d at 276 n.1.
With respect to the breach of contract claims, Plaintiffs allege that
Defendants breached the terms of the Deed by failing to provide Plaintiffs with
certain information on a regular basis regarding their escrow account in
compliance with the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601,
et seq. (“RESPA”). 2 However, Plaintiffs conceded in the amended complaint
that they also defaulted on their obligations in January 2011 by failing to make
timely mortgage payments. 3 Under Texas law, “a party to a contract who is
himself in default cannot maintain a suit for its breach.” Dobbins v. Redden,
785 S.W.2d 377, 378 (Tex. 1990) (quotations and citation omitted); see also
Sport Supply Group, Inc. v. Columbia Cas. Co., 335 F.3d 453, 465 (5th Cir.
2003) (holding that, “[u]nder Texas Law, the elements of a breach of contract
claim” include “performance by the plaintiff”) (emphasis added). Although
Plaintiffs allege that Defendants breached the terms of the Deed first by failing
to comply with RESPA, Plaintiffs’ subsequent non-performance is not excused
because they continued for years after Defendants’ alleged noncompliance to
2 Apparently in order to avoid the shorter statute of limitations for lawsuits asserting
RESPA violations, Plaintiffs couched their case as one for breach of contract based upon the
Deed’s assertions that the lender would comply with RESPA.
3 Plaintiffs maintain that their failure to make timely mortgage payments constituted
a default on the Note, but not on the Deed. However, the Deed expressly provided that
Plaintiffs agreed to “pay when due the principal of, and interest on, the debt evidenced by the
Note . . . .” Therefore, Plaintiffs’ default on the Note constituted a default on the Deed.
Plaintiffs attached a copy of the Deed to the amended complaint and we can therefore
consider it in reviewing the district court’s grant of Defendants’ motion to dismiss. See
Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000) (“In considering a
motion to dismiss for failure to state a claim, a district court must limit itself to the contents
of the pleadings, including attachments thereto.”).
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reside in the Property and to make mortgage payments on the Note. See Long
Trusts v. Griffin, 222 S.W.3d 412, 415 (Tex. 2006) (holding that a party “who
elects to treat a contract as continuing deprives himself of any excuse for
ceasing performance on his own part.”) (quotations and citation omitted).
Because Plaintiffs defaulted on their obligations under the Deed and their
default was not excused, they cannot maintain a breach of contract action
against Defendants. See Dobbins, 785 S.W.2d at 378.
Plaintiffs’ 4 claim for declaratory judgment was brought under the Texas
Declaratory Judgments Act, TEX. CIV. PRAC. & REM. CODE § 37.001, et seq.
(“TDJA”). However, the TDJA is a procedural, and not a substantive, provision
and therefore does not apply to actions in federal court. See Utica Lloyd’s of
Tex. v. Mitchell, 138 F.3d 208, 210 (5th Cir. 1998). As a result, Plaintiffs cannot
maintain their declaratory judgment action against Defendants. 5
We therefore conclude that the district court did not err in finding that
Plaintiffs have failed to state a claim on which relief can be granted. See FED.
R. CIV. P. 12(b)(6).
AFFIRMED.
4 The amended complaint styles the request for declaratory judgment as one made by
“plaintiffs,” however, the specific relief is mentioned only as to “Plaintiff Vera.”
5Even if Plaintiffs had brought their claim under the Federal Declaratory Judgment
Act, 28 U.S.C. § 2201, et seq., it would nevertheless fail. Their request for declaratory relief
seeks a declaration that Bank of America was “the first breacher,” an allegation addressed
above. It also seeks a “declaration as to [Plaintiff Vera’s] present loan balance.” Plaintiffs
provide no briefing on this point, so it is waived. Cinel, 15 F.3d at 1345.
5