Andrea Ybarra v. Wells Fargo Bank, N.A., et

Case: 13-50881 Document: 00512704676 Page: 1 Date Filed: 07/21/2014
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 13-50881
FILED
July 21, 2014
Lyle W. Cayce
ANDREA R. YBARRA; ROY R. YBARRA, Clerk
Plaintiffs – Appellants
v.
WELLS FARGO BANK, N.A.; BANK OF AMERICA, N.A.,
Defendants – Appellees
Appeal from the United States District Court
for the Western District of Texas
USDC No. 5:12-CV-1167
Before JOLLY, SOUTHWICK, and HAYNES, Circuit Judges.
PER CURIAM:*
This appeal involves Roy and Andrea Ybarra’s wrongful foreclosure suit
relating to a promissory note and corresponding deed of trust on property
owned by them in San Antonio, Texas. The Ybarras assert that Wells Fargo
Bank, N.A., acting on behalf of Bank of America, N.A., lacks standing to
foreclose on their property. 1 The Banks moved to dismiss the Ybarras’
complaint under Federal Rule of Civil Procedure 12(b)(6) and the district court
* 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
1 Wells Fargo and Bank of America will be referred to collectively as the “Banks.”
Case: 13-50881 Document: 00512704676 Page: 2 Date Filed: 07/21/2014
No. 13-50881
granted it. After careful review, we hold that they have failed to assert any
claim upon which relief can be granted. Accordingly, we AFFIRM the district
court’s dismissal of the complaint.
I.
In 2002, the Ybarras executed a promissory note in the amount of
$110,888 from CH Mortgage Company, along with a corresponding deed of
trust. In 2010, the note and deed of trust were assigned to The Bank of New
York Mellon as Trustee for CWMBS 2004-R2 through Mortgage Electronic
Registration Systems, Inc. (colloquially known as “MERS”), as part of the
securitization of the home loan. This assignment was signed by a Mr. David
Seybold, as assistant secretary for Assignments for MERS, and was properly
filed in the deed records of Bexar County, Texas. In September 2012, the deed
of trust was again assigned, this time from Bank of New York Mellon to Bank
of America; it was likewise properly filed and signed by a Mr. Norman Yu.
Wells Fargo, according to these assignments, was the loan servicer for the
assignees.
The Ybarras defaulted on the loan, and Wells Fargo initiated a
foreclosure proceeding on the property. In response, the Ybarras filed this suit
to enjoin the foreclosure in Texas state court. The suit was removed to the
United States District Court for the Western District of Texas. The Ybarras
then amended their original complaint (“First Amended Complaint”) and
asserted claims for declaratory judgment, quiet title, violations of Chapter 12
of the Texas Civil Practices and Remedies Code, violations of the UCC, and
breach of contract. The Banks moved to dismiss under Rule 12(b)(6), arguing
that the Ybarras alleged no facts that entitled them to relief. The district court
granted the Banks’ motion and the Ybarras filed this immediate appeal.
2
Case: 13-50881 Document: 00512704676 Page: 3 Date Filed: 07/21/2014
No. 13-50881
II.
We apply de novo review to the dismissal of claims under Rule 12(b)(6).
Dorsey v. Portfolio Equities, Inc., 540 F.3d 333, 338 (5th Cir. 2008). We must
“accept[] all well-pleaded facts as true and view[] those facts in the light most
favorable to the plaintiffs.” Id. We “assume the[] veracity [of pleaded facts]
and then determine whether they plausibly give rise to an entitlement to
relief.” Ashcroft v. Iqbal, 556 U.S. 662, 664 (2009). One principle important to
our review in this appeal is that while “legal conclusions can provide the
complaint’s framework, they must be supported by factual allegations.” Id.
(emphasis added).
We first address the Ybarras’ argument that they properly pleaded a
claim that the Banks lacked standing to foreclose because the signatures on
both the 2010 and 2012 assignments were “forgeries.” In their First Amended
Complaint, the Ybarras alleged that the assignments were “forgeries” and that
the Banks were “strangers” to the mortgage and thus lacked standing to
foreclose on the property. Specifically, with regard to the 2010 assignment, the
Ybarras allege that Seybold’s “signature on the document is a forgery.” They
also make a similar allegation regarding Yu’s signature on the 2012
assignment.
The Ybarras are correct when they point out that an obligor on a loan
“may defend [against an assignee’s efforts to enforce the obligation] ‘on any
ground which renders the assignment void.’” Reinagel v. Deutsche Bank Nat.
Trust Co., 735 F.3d 220, 225 (5th Cir. 2013) (quoting Tri-Cities Const., Inc. v.
Am. Nat. Ins. Co., 523 S.W.2d 426, 430 (Tex. Civ. App. 1975)). And the Ybarras
are also correct when they note that, under Texas law, a deed that is forged is
void. Lighthouse Church of Cloverleaf v. Tex. Bank, 889 S.W.2d 595, 603 (Tex.
App.–Houston 1994). Their fault, however, lies in the strength of the pleading
of this claim. The Ybarras offer absolutely no factual support for their legal
3
Case: 13-50881 Document: 00512704676 Page: 4 Date Filed: 07/21/2014
No. 13-50881
conclusion that the signatures are “forgeries.” All they offer are conclusory
allegations. 2 The Banks argue that the Ybarras’ pleading is to be reviewed
under the more demanding standard of Rule 9 for claims of fraud, while the
Ybarras argue that their pleading passes muster under the lesser standard of
Rule 8. 3 Even if we were to accept the Ybarras’ contention that the lesser
standard of Rule 8 applies, their claim would still fail. As previously
mentioned, they fail to allege a single fact to support their legal conclusion that
the signatures on the 2010 and 2012 assignments are forgeries, nor that they
are otherwise entitled to relief on this claim; thus, the district court did not err
in dismissing this claim. See generally Morlock, L.L.C. v. JP Morgan Chase
Bank, No. 12-20623, 2014 WL 2422778, at *2 (5th Cir. 2013 June 4, 2013)
(noting that “Texas view[s] with suspicion and distrust attempts to discredit
certificates of acknowledgement under which the transfer is presumptively
valid.”).
We next address the Ybarras’ claim that the Banks violated Section
12.002(a) of the Texas Civil Practices and Remedies Code. An “essential
element[] of a Section 12.002 claim is that the defendant used a document or
record despite knowing that it reflected a fraudulent lien or claim against real
property.” Salomon v. Lesay, 369 S.W.3d 540, 549 (Tex. App.–Houston 2012).
The “party asserting a cause of action [under this section of the Act] ha[s] the
burden to prove the elements in the statute.” Id. We have already addressed
the sufficiency of the Ybarras’ allegation that the signatures on the 2010 and
2012 assignments were “forgeries.” The same analysis applies here. The
2 To the extent the Ybarras argue that the signatures are “forgeries” because they
were digitally scanned, the signatures are not forgeries. Reinagel, 735 F.3d at 227 (“Texas
recognizes typed or stamped signatures–and presumably also scanned signatures–so long as
they are rendered by or at the direction of the signer.”).
3 Rule 9 of the Federal Rules of Civil Procedure requires that a party who is pleading
fraud “state with particularity the circumstances constituting fraud or mistake.”
4
Case: 13-50881 Document: 00512704676 Page: 5 Date Filed: 07/21/2014
No. 13-50881
Ybarras have failed to make a plausible allegation that the Banks had
knowledge of a fraudulent lien. They offer no facts to support their legal
conclusion that the signatures were forgeries and, thus, the district court did
not err in dismissing the Ybarras’ Section 12.002 claim under Rule 12(b)(6).
Finally, we address the Ybarras’ breach of contract claim. They allege
that the Banks failed to credit them for insurance payments received from
credit default swaps. An almost identical argument was addressed by this
court in an unpublished case. Golden v. Wells Fargo Bank, N.A., 2014 WL
644549, at *3 (5th Cir. Feb. 20, 2014). The district court, in this case, adopted
our analysis in Golden where we recognized that a party to a contract may not
bring a suit for the contract’s breach if that party, itself, is in default. See
Dobbins v. Redden, 785 S.W.2d 377, 378 (Tex. 1990). This is so because an
essential element of a breach of contract claim under Texas law is that the
“plaintiff performed or tendered performance.” Richter v. Wagner Oil Co., 90
S.W.3d 890, 898 (Tex. App.–San Antonio 2002). Because the Ybarras failed to
plead this element of a breach of contract claim the district court did not err in
dismissing this claim in the Ybarras’ First Amended Complaint. 4
III.
We have addressed the sufficiency of each of the Ybarras’ claims under
Rule 12(b)(6). Accordingly, we hold that the district court did not err and its
judgment dismissing the claims is
AFFIRMED.
4 The Ybarras’ final issue on appeal that an entity seeking to foreclose must prove it
is the owner or holder of the note is foreclosed by this court’s precedent in Martins v. BAC
Home Loan Servicing, L.P., 722 F.3d 249 (5th Cir. 2013).
5