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Cheneau v. Bank of America, N.A.

United States District Court, E.D. Louisiana

December 23, 2014

QUINTINA CHENEAU
v.
BANK OF AMERICA NA, et al., SECTION:

ORDER

NANNETTE JOLIVETTE BROWN, District Judge.

Before the Court is Defendant Crouch & Ramey, LLP's ("C&R") "Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6) and 57."[1] Having considered the motion, the memoranda, the record, and the applicable law, the Court will deny the motion without prejudice, allowing Cheneau ten days to amend her complaint. However, conclusory allegations unsupported by fact will not be sufficient. If Cheneau fails to amend, or sufficiently amend, her complaint within ten days, then C&R may renew its motion and further briefing may not be necessary.

I. Background

On or about July 25, 2005, Cheneau and her husband Cornell Platt purchased a home located at 6 Lake Bernand Court, Harvey, Louisiana 70058, and entered into a $243, 000.00 mortgage with Primary Residential Mortgage, Inc.[2] That mortgage was later assigned to Defendant Bank of America on November 1, 2011.[3] Cheneau asserts that "sometime prior to the assignment... Plaintiff allegedly defaulted on the loan."[4] Based on the default, on March 18, 2013, Bank of America initiated foreclosure proceedings in the 24th Judicial District Court for the Parish of Jefferson, Louisiana (the "state court") by filing a "Petition for Mortgage Foreclosure by Executory Process Without Appraisal, "[5] and on March 26, 2013, the state court issued a "Writ of Seizure and Sale."[6] On May 1, 2013, Cheneau filed a "Motion to Vacate Executory Order Without Appraisal for Mortgage Foreclosure Due to Lack of Subject Matter Jurisdiction, "[7] and on May 20, 2013, Cheneau filed a "Petition for Preliminary Injunction and Temporary Restraining Order, " both with the state court.[8] In June 2013, Cheneau filed for bankruptcy in the United States Bankruptcy Court for the Northern District of Georgia, and the foreclosure proceedings in Jefferson Parish were automatically stayed.[9] After the bankruptcy case was dismissed, the foreclosure proceedings resumed in November 2013.[10]

On February 20, 2014, Cheneau filed suit in the above-captioned matter, naming Bank of America as well as C&R, Bank of America's counsel in the state court proceedings, as Defendants.[11] In her amended complaint, filed on March 7, 2014, Cheneau generally asserts that Defendants did not follow the default procedures specified in the mortgage, and she brings five causes of action.[12] First, she seeks a declaratory judgment finding

... that Defendant BANA [Bank of America] and Defendant Crouch, did not provide Plaintiff with notice of default stating the right to assert in the foreclosure proceeding the non-existence of a default or any other defense of Borrower to acceleration and foreclosure as available under Applicable Law, ' (ii) that, consequently Defendant BANA and Defendant Crouch did not comply with Security Deed under Section 22 of the Non-Uniform Covenants and its clear and unambiguous language contained in the parties' contract; (iii) that Defendant BANA and Defendant Crouch's compliance with the Security Deed under Section 22 of the Non-Uniform Covenants were conditions precedent to Defendant BANA and Defendant Crouch's commencement of foreclosure proceedings; and (iv) that Defendant BANA and Defendant Crouch breached this obligation and prematurely commenced foreclosure proceedings against the Plaintiff.[13]

Second, Cheneau brings a claim for breach of contract, alleging that Defendants breached the mortgage agreement by failing to provide notice of default prior to initiating foreclosure proceedings.[14] Next, Cheneau asserts a claim for negligence, averring that Defendants "acted in bad faith, reflected by [their] arbitrary, reckless and intentional conduct evincing gross indifference or intentional disregard for the Plaintiff's interest by failing to advise Plaintiffs of the right to assert in the foreclosure proceeding the non-existence of a default or any other defenses of Borrower to acceleration and foreclosure as available under Applicable Law."[15] Fourth, Cheneau contends that Defendants have violated the Fair Debt Collection Practices Act ("FDCPA") by "threaten[ing] to execute foreclosure by initiating and pursuing an executory process against the Plaintiff without having met all the preconditions to acceleration and foreclosure" set forth in the mortgage.[16] Finally, Cheneau claims that Defendants have violated the Truth in Lending Act ("TILA") by failing "to identify the owner or assignee of Plaintiff's loan within 10 business days following receipt of Plaintiff's January 27, 2014 QWR [Qualified Written Request]."[17]

On March 18, 2014, C&R filed the pending "Motion to Dismiss for Failure to State a Claim."[18] Cheneau filed a memorandum in opposition on April 30, 2014, [19] and C&R filed a reply memorandum on May 15, 2014.[20]

II. Parties' Arguments

A. C&R's Arguments in Support

C&R contends that dismissal is appropriate because (1) C&R has at all relevant times acted as Bank of America's litigation counsel and, therefore, is not a property party to the litigation; (2) the Court should exercise its discretion to decline jurisdiction over claims previously pending in state court, and (3) Cheneau's claims are insufficient and rely on conclusory and contradictory factual allegations.[21] First, C&R argues that it is not a proper party to this litigation because under Louisiana law, an attorney cannot be held liable for pursuing litigation or for actions taken during the ordinary course of representation of a client in pursuit of a foreclosure action.[22] According to C&R, the actions upon which Cheneau's claims against C&R are based arise solely from the pursuit of the foreclosure action against Cheneau.[23]

Next, C&R contends that the Court should decline to exercise its discretionary jurisdiction over Cheneau's declaratory judgment action claim because it is duplicative of Cheneau's breach of contract claim.[24] C&R argues that each factor set forth by the Fifth Circuit in St. Paul Ins. Co. v. Trejo [25] to guide a district court's decision whether to dismiss a declaratory judgment action is met in this case.[26] Specifically, C&R avers that where, as here, the federal declaratory judgment raises only issues of state law, and a state case involving the same state law issues is pending, the court should exercise its discretion to dismiss the federal suit.[27] C&R additionally argues that Cheneau filed her declaratory claim for the purpose of "procedural fencing" because:

Plaintiff has never sought to remove the Original Lawsuit, and since the claims on which Plaintiff seeks a declaratory judgment are directly in controversy in the Original Lawsuit, Plaintiff has misused the declaratory judgment act in attempting to accomplish not only a backdoor removal to federal court, but also to shoehorn a state claim into federal jurisdiction.[28]

According to C&R, considerations of fairness and economy favor dismissal of the declaratory judgment claim because the Original Lawsuit is currently pending in the 24th Judicial District Court of Jefferson Parish, Louisiana, and to allow Cheneau to maintain this action would provide her with "two bites at the ...


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