United States District Court, E.D. Louisiana
ORDER AND REASONS
M. AFRICK, UNITED STATES DISTRICT JUDGE
the Court are a motion to dismiss filed by Bank of America
National Association and a motion for judgment on the
pleadings filed by Bank of New York Mellon and Ditech
Financial LLC. For the following reasons, the Court grants
the motions in part.
who are at imminent risk of defaulting or who have already
defaulted on mortgage loans can apply for modification of
their mortgage through the Home Affordable Modification
Program (“HAMP”), a federal mortgage assistance
program. Through HAMP, the United States Treasury Department
offers mortgage loan servicers-such as defendants Bank of
America National Association (“BANA”) and Ditech
Financial LLC (“Ditech”)-incentives to
participate in loan modifications. A “short sale”
or a deed-in-lieu of foreclosure are options available to
certain homeowners through the Home Affordable Foreclosure
Alternatives Program (“HAFA”), a sub-program of
HAMP. See Stephen F.J. Ornstein et. al.,
Eligibility and Foreclosure Alternatives in the
Hamp Home Affordable Refinancing and Foreclosure Alternatives
Programs, 64 Consumer Fin. L.Q. Rep. 415, 416 (2010).
plaintiff Wilmore Whitmore filed this lawsuit relative to the
foreclosure of his home. He claims that he entered into a
valid short sale agreement with BANA under the federal
assistance programs described above and that BANA and the
other defendants breached the short sale agreement. A
“short sale” agreement refers to a transaction
where the mortgagee/lender and other creditors and
lienholders having a recorded interest in the borrower's
property which is in the process of being foreclosed agree to
accept less than the full amount due on the loan. The loan
servicer agrees to hold off or postpone the foreclosure
proceedings in order to give the owner time to sell the
property in the market. The loan servicer then accepts the
net proceeds of the sale as satisfaction in full of the total
amount due on the loan. See Other Making Home
Affordable programs-Home Affordable Foreclosure Alternatives
(HAFA), Real Estate & Mortgage Banking § 7:98.
Whitmore claims the defendants breached his short sale
agreement by foreclosing on his home before the time for
Whitmore to sell his home on the market had expired.
and his wife filed a petition for injunctive relief against
defendant Bank of New York Mellon (“BNY Mellon”)
in state court in 2013 in an attempt to halt the foreclosure
of their home. BNY Mellon is the trustee for the certificate
holders of the note on Whitmore's mortgage. Defendant
Ditech is the current servicer of the mortgage loan and
defendant BANA was the previous servicer of the mortgage
loan. After filing the lawsuit, Whitmore and his wife filed a
motion to dismiss the state court action with prejudice which
was granted by the state court on August 16, 2013. The
defendants now argue, inter alia, that the prior dismissal
with prejudice bars Whitmore's re-assertion of his claims
in this lawsuit. The Court agrees. Nevertheless, it only
grants the defendants' motions in part in order to afford
Whitmore an opportunity to amend his complaint.
all of the defendants seek dismissal on the basis of res
judicata, they filed their motions pursuant to different
Rules of Civil Procedure. As stated above, BANA filed a Rule
12(b)(6) motion and BNY Mellon and Ditech filed a Rule 12(c)
motion. Rule 12(b)(6) permits a defendant to seek a dismissal
of a complaint based on the “failure to state a claim
upon which relief can be granted.” Fed.R.Civ.P.
12(b)(6). Rule 12(c) states that, “[a]fter the
pleadings are closed-but early enough not to delay trial-a
party may move for judgment on the pleadings.”
Fifth Circuit holds that “[t]he standard for dismissal
under Rule 12(c) is the same as that for dismissal for
failure to state a claim under Rule 12(b)(6).”
Johnson v. Johnson, 385 F.3d 503, 529 (5th Cir.
2004). Under either type of motion, the Court must look only
to the pleadings and must accept all well-pled factual
allegations as true. Brittan Commc'ns Int'l Corp.
v. Sw. Bell Tel. Co., 313 F.3d 899, 904 (5th Cir. 2002).
“Pleadings should be construed liberally, and judgment
on the pleadings is appropriate only if there are no disputed
issues of material fact and only questions of law
remain.” Id. “[T]he central issue is
whether, in the light most favorable to the plaintiff, the
complaint states a valid claim for relief.”
Id. (internal quotation marks omitted).
a court ruling on a 12(b)(6) motion may rely on the
complaint, its proper attachments, documents incorporated
into the complaint by reference, and matters of which a court
may take judicial notice.” Phillips v. Home Path
Fin., L.P., No. 15-11290, 2017 WL 629270, at *1 (5th
Cir. Feb. 15, 2017) (internal quotation marks omitted). The
same is true with respect to Rule 12(c) motions. See
Bosarge v. Mississippi Bureau of Narcotics, 796 F.3d
435, 440 (5th Cir. 2015); Hebert Abstract Co. v.
Touchstone Properties, Ltd., 914 F.2d 74, 76 (5th Cir.
determining the preclusive effect of a state court judgment,
federal courts apply the preclusion law of the state that
rendered the earlier judgment. Weaver v. Tex. Capital
Bank N.A., 660 F.3d 900, 906 (5th Cir. 2011). Under
Louisiana law, in order to establish that res judicata bars
an action the defendant must prove that: (1) the judgment is
valid; (2) the judgment is final; (3) the parties are the
same; (4) the cause or causes of action asserted in the
second lawsuit existed at the time of final judgment in the
first litigation; and (5) the cause or causes of action
asserted in the second lawsuit arose out of the transaction
or occurrence that was the subject matter of the first
litigation. Burguieres v. Pollingue, 843 So.2d 1049,
1053 (La. 2003) (citing La. R.S. 13:4231).
first two elements are met. There is no dispute that the
state court judgment was valid and that a dismissal with
prejudice of all claims-even a voluntary one-counts as a
final judgment under Louisiana law. See Buck v. Deutsche
Bank Nat. Trust Co., ...