George Campbell v. DLJ Mortgage Capital, Inc., et

Case: 15-20131 Document: 00513224626 Page: 1 Date Filed: 10/08/2015

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

No. 15-20131 United States Court of Appeals
Fifth Circuit

FILED
GEORGE W. CAMPBELL, October 8, 2015
Lyle W. Cayce
Plaintiff - Appellant Clerk

v.

DLJ MORTGAGE CAPITAL, INCORPORATED; MORTGAGE
ELECTRONIC REGISTRATION SYSTEMS, INCORPORATED; BRAVO
CREDIT,

Defendants - Appellees

Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:14-CV-2794

Before OWEN, GRAVES, and HIGGINSON, Circuit Judges.
STEPHEN A. HIGGINSON, Circuit Judge:*
George Campbell lost ownership of his home to a mortgage company,
DLJ Mortgage Capital, Inc., through non-judicial foreclosure in Texas state
court. He thereafter sued DLJ, also in state court, seeking to avoid eviction
and to invalidate both the foreclosure and the deeds transferring ownership
to the property. DLJ removed the case to federal court and moved to dismiss

* 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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. 15-20131
Campbell’s complaint for failure to state a claim. The district court granted
the motion. We affirm.
I.
We take the allegations in Campbell’s complaint as true. See Lone Star
Fund V (U.S.), L.P. v. Barclays Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010).
We also consider the documents that Campbell attached to his complaint, and
the documents that DLJ attached to its motion to dismiss that were both
central to and mentioned by the complaint. See id. These documents include
four contracts: a promissory note, a deed of trust, a contract assigning the deed
of trust, and a foreclosure sale deed. To the extent that the contracts conflict
with Campbell’s allegations, the contracts control. See Bosarge v. Mississippi
Bureau of Narcotics, 796 F.3d 435, 440-41 (5th Cir. 2015).
In October 2007, Campbell borrowed roughly half a million dollars to
buy a house in Houston. To receive the loan, Campbell signed two documents
in favor of his lender, Bravo Credit: (1) a note, which set out the terms of the
loan, and (2) a deed of trust, which secured the loan with a lien on Campbell’s
newly purchased house. Campbell’s wife, Julia Browder, also signed the deed
of trust. The deed of trust listed another company, Mortgage Electronic
Registration Systems, Inc. (“MERS”), as “nominee” for Bravo and Bravo’s
“assigns” and as “beneficiary” of the deed of trust.
Sometime thereafter, Campbell fell ill with cancer. Seeking “to reduce
his payments during his illness,” Campbell called his “[l]ender”—the complaint
does not specify just who—to ask for a loan modification or “some type of
arrangement.” The “representatives” with whom he spoke told him “to just stop
making payments.” Campbell took this instruction as “a promise to allow [him]
to stop making payments during his illness” and stopped paying the note.
In late June 2012, MERS, “as nominee for Bravo [and] . . . its assigns,”
assigned the deed of trust to DLJ, which recorded the notarized assignment
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No. 15-20131
the following week. DLJ thereafter applied in Texas state court for an
expedited home-equity foreclosure order, which the state court issued in May
2013. A foreclosure sale followed in September 2013; DLJ bought the house at
the sale. Nine months later, in June 2014, Campbell still hadn’t moved out.
Consequently, DLJ secured an eviction order, which a Harris County deputy
constable served on June 27, 2014.
Campbell then sued DLJ, MERS, and Bravo in state court, asserting ten
state law claims and asking the court to enjoin the eviction and declare DLJ’s
interest in the property invalid. DLJ removed the case to federal court on the
ground of diversity and filed a motion to dismiss, which the district court
granted. The court thereafter entered final judgment dismissing the case—
with prejudice as to DLJ and without as to MERS and Bravo, whom Campbell
had never served. This appeal followed.
II.
We review de novo the district court’s decision to dismiss. Frame v. City
of Arlington, 657 F.3d 215, 222 (5th Cir. 2011) (en banc). Dismissal is proper if
a complaint does not contain “sufficient factual matter, accepted as true, to
state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (citation omitted). We can affirm on any basis supported by the
record. Taylor v. City of Shreveport, 798 F.3d 276, 279 (5th Cir. 2015) (citation
omitted).
III.
Campbell challenges the district court’s dismissal of eight of his claims.
First, he argues that the district court should not have dismissed his claim for
“trespass to try title.” The claim is based on his contention that “MERS lack[ed]
the power” to assign the deed of trust to DLJ and that, as a result, DLJ lacked
the power to foreclose. But Texas law—which the parties agree applies here—
recognizes assignments of deeds of trust by MERS, and, moreover, explicitly
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“permits MERS and its assigns to bring foreclosure actions under the Texas
Property Code.” Farkas v. GMAC Mortgage, L.L.C., 737 F.3d 338, 342 (5th Cir.
2013); see generally Harris Cty. Texas v. MERSCORP Inc., 791 F.3d 545, 549-
50 (5th Cir. 2015) (explaining MERS’s role in the mortgage industry). So this
contention fails. Moreover, the only allegation in Campbell’s complaint that
supports this claim is his assertion that “MERS is not listed nor defined as the
Lender nor its nominee” in the deed of trust. But the deed of trust shows the
opposite: it provides that MERS will “act[] . . . as a nominee” for Bravo and
Bravo’s “assigns” and names “MERS . . . as nominee” and MERS’s “successors
and assigns” as “beneficiary.” Thus, both Texas law and the express terms of
the deed of trust permitted MERS to assign the deed of trust to DLJ. Hence
the district court properly dismissed this claim.
Second, Campbell argues that the district court erred in dismissing his
claim for statutory fraud under the Texas Business and Commercial Code. To
state a claim for statutory fraud, a plaintiff must allege, among other things,
that the defendant made a “false representation” or a “false promise” with the
purpose of “inducing [a] person to enter into a contract.” Tex. Bus. & Com. Code
§ 27.01. Here, Campbell’s statutory fraud claim is based on his allegation that
an unidentified “representative[]” of his “[l]ender” instructed him “to just stop
making payments.” He nowhere alleges that this instruction was made with
the purpose of inducing him to enter a contract. So the district court correctly
dismissed the claim.
Third, Campbell argues that the district court erred in dismissing his
common law fraud claim. To plead fraud, a plaintiff must “state with
particularity” the circumstances of the fraud. Fed. R. Civ. P. 9(b). We have
held that, to satisfy this standard, a plaintiff must, at a minimum, set forth
the “time, place[,] and contents of the false representation,” “the identity of the
person making the misrepresentation,” and what the person making the
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misrepresentation gained by making it. U.S. ex rel. Grubbs v. Kanneganti, 565
F.3d 180, 186 (5th Cir. 2009) (citation omitted). Here, Campbell contends that
DLJ committed fraud by falsely representing that it “had proper standing to
foreclose when [it] clearly did not.” Thus, Campbell’s fraud claim is merely
derivative of his meritless claim that DLJ lacked standing to foreclose. Hence
the district court correctly dismissed the claim.
Fourth, Campbell argues that the district court erred in dismissing his
negligent misrepresentation claim. To support a claim for negligent
misrepresentation under Texas law, “the misrepresentation . . . must be one of
existing fact.” BCY Water Supply Corp. v. Residential Inv., Inc., 170 S.W.3d
596, 603 (Tex. App. 2005). Thus, “a promise to do or refrain from doing an act
in the future” will not support an action for negligent misrepresentation. Id.
Here, Campbell alleges that a “representative[]”—he does not specify who—
told him that he could “just stop making payments.” He characterizes this
statement as “a promise to allow [him] to stop making payments during his
illness.” He alleges no other misrepresentation beside this “promise.” A
promise about the future is not a statement of existing fact. See Guajardo v.
JP Morgan Chase Bank, N.A., 605 F. App'x 240, 245 (5th Cir. 2015). So the
district court properly dismissed this claim as well.
Fifth, Campbell argues that the district court erred in dismissing his
promissory estoppel claim. To state a claim for promissory estoppel under
Texas law, a plaintiff must allege, among other things, that his reliance on the
promise was “reasonable and justified.” Gilmartin v. KVTV-Channel 13, 985
S.W.2d 553, 558 (Tex. App. 1998). Reliance is justified only when the promise
is “definite.” Id. (citation omitted). In contrast, reliance on “only vague
assurances” is unjustified. Id. Here, Campbell’s promissory estoppel claim is
based on the alleged “promise to allow [him] to stop making payments during
his illness.” But Campbell’s complaint fails to make clear who made him the
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No. 15-20131
promise, much less what he was promised would happen (or not happen) if he
stopped paying his mortgage. Thus, he has not alleged that he was promised
anything “definite.” Hence the district court properly dismissed the claim.
Sixth, Campbell argues that the district court erred in dismissing his
breach-of-contract claim. But his complaint merely lists the elements of the
claim, without alleging any facts to support it. On appeal, he contends that,
assuming that he “had a valid contract with . . . DLJ,” then DLJ breached it by
“mov[ing] to wrongfully foreclose.” That means Campbell’s breach-of-contract
claim, like his fraud claim, simply relabels and restates his meritless claim
that DLJ lacked standing to foreclose. So the district court correctly dismissed
the claim.
Seventh, Campbell argues that the district court erred in dismissing his
claim for tortious interference with an existing contract. Under Texas law, to
state a claim for tortious interference with a contract, a plaintiff must allege,
among other things, that the defendant “willfull[y] and intentional[ly]”
interfered with an existing contract to which the plaintiff was a party.
Holloway v. Skinner, 898 S.W.2d 793, 795 (Tex. 1995). In his complaint,
Campbell alleged that DLJ interfered with his contract with Bravo by
“forclos[ing] . . . without . . . standing to do so.” But he abandons that theory—
which would fail anyway, for the reasons shown above—on appeal. He now
contends that DLJ interfered with his contract with Bravo by “failing to record
the appropriate filings.” But he does not specify which filings DLJ supposedly
failed to record, much less how such a failure could have interfered—
intentionally or willfully or otherwise—with any of his contracts. Hence the
district court properly dismissed this claim as well.
Finally, Campbell argues that the district court should not have
dismissed his claim under the Texas Deceptive Trade Practices Act, Tex. Bus.
& Com. Code § 17.41 et seq. To sue under the Act, a plaintiff must establish
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No. 15-20131
that he is a “consumer” as defined by the Act. See Miller v. BAC Home Loans
Servicing, L.P., 726 F.3d 717, 724 (5th Cir. 2013) (citation omitted). To qualify
as a consumer, a person must “seek[] or acquire[]” “goods or services” “by lease
or purchase.” Tex. Bus. & Com. Code § 17.45(4). “Goods” include real property.
Id. § 17.45(1). In addition, the goods or services must form the basis of the
person’s complaint. See Miller, 726 F.3d at 725; Melody Home Mfg. Co. v.
Barnes, 741 S.W.2d 349, 352 (Tex. 1987). As a general rule, “a pure loan
transaction lies outside the [Act] because money is considered to be neither a
good nor a service.” Miller, 726 F.3d at 725 (citation omitted). Here, Campbell
contends that DLJ violated the Act by “making . . . misrepresentations” about
a “possible refinance.” We have previously held that an attempted loan
modification or refinancing “is not sought for the acquisition of a good or
service,” but is, rather, a “pure loan transaction.” Id. That means that
Campbell does not qualify as a consumer and cannot bring a claim under the
Act. Hence the district court correctly dismissed the claim.
The district court’s judgment is affirmed.

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