Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca5-13-51025/USCOURTS-ca5-13-51025-0/pdf.json

Parties Involved:
AH4R I TX, L.L.C.
Appellee
Andrea C. Guajardo
Appellant
JP Morgan Chase Bank National Association
Appellee
JP Morgan Chase Bank, N.A.
Appellee
Juanita Zepeda
Appellant

Document Text:

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 13-51025

ANDREA C. GUAJARDO; JUANITA ZEPEDA, 

 Plaintiffs – Appellants,

v.

JP MORGAN CHASE BANK, N.A.; JP MORGAN CHASE BANK 

NATIONAL ASSOCIATION, Successor by Merger to Chase Home Finance, 

L.L.C.; AH4R I TX, L.L.C., 

 Defendants – Appellees.

Appeal from the United States District Court

for the Western District of Texas

USDC No. 5:13-CV-588

Before DAVIS and ELROD, Circuit Judges.*

PER CURIAM:**

We sua sponte withdraw the prior panel opinion, Guajardo v. JP Morgan 

Chase Bank, N.A., No. 13-51025, 2015 WL 136403 (5th Cir. Jan. 12, 2015), and 

substitute the following:

* This opinion is being entered by a quorum of this court pursuant to 28 U.S.C. Section 

46(d).

** 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.

United States Court of Appeals

Fifth Circuit

FILED

March 10, 2015

Lyle W. Cayce

Clerk

 

Case: 13-51025 Document: 00512964518 Page: 1 Date Filed: 03/10/2015
No. 13-51025

In this case we address whether the district court erred in dismissing, 

pursuant to Fed. R. Civ. P. 12(b)(6), Plaintiffs’ claims relating to the foreclosure 

of their home. Because Plaintiffs failed to state any valid claim for relief, we 

AFFIRM.

I.

According to the Third Amended Complaint,1 Plaintiffs, Andrea C. 

Guajardo and Juanita Zepeda, purchased a home in San Antonio, Bexar 

County, Texas (Property). JP Morgan Chase Bank, N.A. (JPMC) loaned the 

purchase money to Plaintiffs in exchange for a mortgage note which was 

secured by a deed of trust on the Property. Later, Plaintiffs could no longer 

make their payments on the mortgage. They notified JPMC of their situation, 

and filed an application for a loan modification. JPMC told them on four 

occasions that it would review their application and respond before “any nonjudicial foreclosure action would be taken.” Plaintiffs never heard back from 

JPMC. JPMC foreclosed on the Property and AH4R I TX, L.L.C. (AH4R) 

purchased it at the non-judicial foreclosure sale. Plaintiffs claim that, because 

they did not discover the foreclosure until after JPMC completed the sale, they

lost the opportunity to prevent foreclosure.

Plaintiffs sued Defendants in Texas state court based on various causes 

of action, including breach of contract and wrongful foreclosure. Defendants 

removed the case to federal court based on diversity jurisdiction. The parties 

went through multiple rounds of pleadings during which Plaintiffs tried to 

correct defects identified in JPMC’s motions to dismiss.

1 Because this appeal addresses the sufficiency of Plaintiffs’ complaint, we must accept 

as true the facts pleaded in the complaint, view them in the light most favorable to Plaintiffs, 

and draw all reasonable inferences in favor of Plaintiffs. Morgan v. Swanson, 659 F.3d 359, 

396 (5th Cir. 2011) (en banc).

2

 

Case: 13-51025 Document: 00512964518 Page: 2 Date Filed: 03/10/2015
No. 13-51025

Plaintiffs’ First Amended Complaint alleged causes of action for breach 

of contract, misrepresentation, wrongful foreclosure, violation of the Texas 

Deceptive Trade Practices Act (DTPA), and declaratory judgment. JPMC 

moved to dismiss Plaintiffs’ claims pursuant to 12(b)(6), arguing that Plaintiffs 

asserted these causes of action without providing facts sufficient to state a 

claim that was plausible on its face.

Plaintiffs responded by requesting leave to file their Second Amended 

Complaint, which was identical to the First Amended Complaint except for the 

addition of “promissory estoppel and constructive fraud” to the list of claims. 

The district court granted Plaintiffs’ request for leave and accepted the Second 

Amended Complaint, but also simultaneously granted, in part, JPMC’s motion 

to dismiss “because the [second] amended complaint [did] not address the 

issues in the Defendant’s motion to dismiss.” The district court dismissed 

Plaintiffs’ breach of contract claim on the ground that the Second Amended 

Complaint “only allege[s] generally that Chase breached unspecified contract 

provisions by failing to comply with unspecified requirements of [Tex. Bus. & 

Com. Code Ann. §] 51.002.”

JPMC then filed a motion to dismiss the remaining claims in Plaintiffs’ 

Second Amended Complaint. Plaintiffs obtained leave to file a Third Amended 

Complaint. In their Third Amended Complaint, Plaintiffs added allegations 

relating to their fraud claim and specified the notice procedures in § 51.002 

that JPMC allegedly violated. The district court granted JPMC’s motion to 

dismiss under Fed. R. Civ. P. 12(b)(6) for failure to state a claim because the 

“third amended complaint does not address the defects in the Plaintiffs’ second 

amended complaint.” Plaintiffs appealed.

3

Case: 13-51025 Document: 00512964518 Page: 3 Date Filed: 03/10/2015
No. 13-51025

II.

We review a district court’s 12(b)(6) dismissal de novo, applying the same 

standard that the district court applied. Gen. Elec. Capital Corp. v. Posey, 415 

F.3d 391, 395 (5th Cir. 2005). We may affirm the district court’s dismissal “on 

any grounds supported by the record.” City of Clinton v. Pilgrim’s Pride Corp., 

632 F.3d 148, 153 (5th Cir. 2010). When ruling on a motion to dismiss, we 

must accept as true a plaintiff’s factual allegations. Bell Atl. Corp. v. Twombly, 

550 U.S. 544, 555 (2007). To overcome a motion to dismiss, a plaintiff must 

plead facts sufficient to state a “legally cognizable claim that is plausible” on 

its face. Lone Star Fund V (U.S.), L.P., v. Barclay’s Bank PLC, 594 F.3d 383, 

387 (5th Cir. 2010). “When there are well-pleaded factual allegations, a court 

should assume their veracity and then determine whether they plausibly give 

rise to an entitlement to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). 

The federal pleadings standard requires a “short and plain statement of the 

claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8; Id. at 

677–78. The standard does not require detailed factual allegations, but where 

a complaint lacks allegations that can plausibly support the required elements 

of claim, it should be dismissed. Blackburn v. City of Marshall, 42 F.3d 925, 

931 (5th Cir. 1995). 

III.

Plaintiffs’ Third Amended Complaint includes the following claims: 

breach of contract,2 wrongful foreclosure, negligent misrepresentation, fraud, 

promissory estoppel, constructive fraud, violation of the DTPA, declaratory 

2 The district court dismissed, with prejudice, Plaintiffs’ breach of contract claim based 

on the allegations in the Second Amended Complaint. As explained below, our analysis of 

this particular claim turns on the allegations in the Second Amended Complaint.

4

 

Case: 13-51025 Document: 00512964518 Page: 4 Date Filed: 03/10/2015
No. 13-51025

judgment, and trespass to try title. The district court dismissed all claims. For 

the reasons discussed in detail below, we affirm the district court’s judgment.

A.

“[T]he essential elements of a breach of contract action are: (1) the 

existence of a valid contract; (2) performance or tendered performance by the 

plaintiff; (3) breach of the contract by the defendant; and (4) damages 

sustained by the plaintiff as a result of the breach.” Smith Int’l, Inc. v. Egle 

Group, LLC, 490 F.3d 380, 387 (5th Cir. 2007) (citing Valero Mktg. & Supply 

Co. v. Kalama Int’l, 51 S.W.3d 345, 351 (Tex. App.—Houston [1st Dist.] 2001, 

no pet.)). In their Second Amended Complaint, Plaintiffs alleged that they 

entered into a mortgage agreement with JPMC and executed a deed of trust in 

favor of JPMC. They generally claimed that JPMC breached the terms of the 

mortgage agreement and deed of trust but did not specify which provisions or

obligations. Plaintiffs also claimed that JPMC breached the mortgage 

agreement and deed of trust by violating Tex. Prop. Code Ann. § 51.002, which 

these documents allegedly incorporated by reference. However, Plaintiffs did 

not identify which provision of the mortgage agreement or deed of trust 

incorporated this obligation or the manner in which JPMC violated § 51.002.

The district court dismissed the breach of contract claim in the Second 

Amended Complaint because Plaintiffs “only allege generally that [JPMC] 

breached unspecified contract provisions by failing to comply with unspecified 

requirements of § 51.002.” We agree.3 Plaintiffs failed to allege the manner in 

3 Furthermore, to the extent that Plaintiffs allege that JPMC breached any agreement

(or modification) formed by JPMC’s alleged oral promise, such a claim is barred by the statute 

of frauds. See Tex. Bus. & Com. Code Ann. § 26.02(a)(2) (requiring a writing for loan 

agreements involving loans of $50,000 or more); see also Martins v. BAC Home Loans 

Servicing, L.P., 722 F.3d 249, 256 (5th Cir. 2013) (holding that the statute of frauds applies 

to oral modifications to loan agreements). JPMC’s alleged promise to delay foreclosure was 

never reduced to writing.

5

 

Case: 13-51025 Document: 00512964518 Page: 5 Date Filed: 03/10/2015
No. 13-51025

which JPMC breached the mortgage agreement or “identify which provision of 

the deed of trust [JPMC] allegedly breached.” Williams v. Wells Fargo Bank, 

N.A., 560 F. App’x 233, 238 (5th Cir. 2014) (dismissing a breach of contract 

claim on this basis). Plaintiffs’ complaint contains only a general allegation 

and lacks the “further factual enhancement” needed to state a plausible breach 

of contract claim and put JPMC on notice as to the nature of the claim. See 

Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 557); see also Twombly, 550 

U.S. at 555 (“Factual allegations must be enough to raise a right to relief above 

the speculative level.”).

The fact that the district court gave Plaintiffs’ leave to file their Third 

Amended Complaint, in which Plaintiffs again included their breach of 

contract claim, has no effect on the district court’s earlier dismissal order. “As 

a general proposition, dismissal of a complaint for failure to state a claim 

operates as an adjudication on the merits absent the court's specification to the 

contrary, and is therefore with prejudice.” Williams v. Dallas Cnty. Comm'rs, 

689 F.2d 1212, 1215 (5th Cir. 1982); see, e.g., Fernandez-Montes v. Allied Pilots 

Ass'n, 987 F.2d 278, 288 n.8 (5th Cir. 1993) (“[I]t is well established that a 

dismissal is presumed to be with prejudice unless the order explicitly states 

otherwise.”); Hines v. Delta Air Lines, Inc., 461 F.2d 576, 579 n.12 (5th Cir. 

1972) (citing the presumption in Fed. R. Civ. P. 41(b) that an involuntary 

dismissal is presumed to be an adjudication on the merits). Even ignoring this 

general presumption, the district court specifically indicated in its second 

dismissal order that its earlier dismissal was with prejudice. In the second 

dismissal order, the district court explained that “[o]n September 12, 2013, the 

Court entered an order dismissing the Plaintiffs’ breach of contract claim with 

prejudice. [JPMC] has filed a motion to dismiss the remaining claims, arguing 

that they also fail as a matter of law.” Based on the general presumption and 

6

Case: 13-51025 Document: 00512964518 Page: 6 Date Filed: 03/10/2015
No. 13-51025

the district court’s description of its own order, we look to the Second Amended 

Complaint in analyzing Plaintiffs’ claim for breach of contract and agree with 

the district court that their allegations are inadequate.

B.

Under Texas law, a claim for wrongful foreclosure generally requires: (1) 

“a defect in the foreclosure sale proceedings;” (2) “a grossly inadequate selling 

price;” and (3) “a causal connection between the defect and grossly inadequate 

selling price.” Miller v. BAC Home Loans Servicing, L.P., 726 F.3d 717, 726 

(5th Cir. 2013) (citing Sauceda v. GMAC Mortg. Corp., 268 S.W.3d 135, 139 

(Tex. App.—Corpus Christi 2008, no pet.)). In their Third Amended 

Complaint, Plaintiffs allege that JPMC failed to comply with the notice 

procedures required for a foreclosure sale,4 that, as a result, they lost the 

opportunity to obtain cash or to find a buyer for the Property before JPMC 

foreclosed, and that the Property sold for a grossly inadequate selling price. 

The district court dismissed the claim for failure to adequately allege a grossly 

inadequate selling price.

We agree with the district court that Plaintiffs’ wrongful foreclosure 

claim should be dismissed, but for a different reason—Plaintiff’s abandoned 

the claim on appeal. In challenging the district court’s dismissal, Plaintiffs did 

not argue that their wrongful foreclosure claim should survive because they 

adequately pleaded a grossly inadequate sales price. See Thompson v. 

Deutsche Bank Nat. Trust Co., 775 F.3d 298, 304 (5th Cir. 2014) (citing 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.”)). They only argued 

4 Tex. Prop. Code Ann. § 51.002(b) requires the creditor to serve each debtor of record 

with written notice of a foreclosure sale at least twenty-one days in advance.

7

 

Case: 13-51025 Document: 00512964518 Page: 7 Date Filed: 03/10/2015
No. 13-51025

that the claim should survive because they need not plead that element at all. 

However, our precedent requires this element in all but a specific category of 

cases that does not include the instant case. See Miller, 726 F.3d at 727

(discussing an exception where a plaintiff alleges that the mortgagee 

“deliberately ‘chilled’ the bidding at the foreclosure sale”).

C.

Plaintiffs alleged that JPMC misrepresented that it would review and 

respond to their application for a loan modification before foreclosing on the 

Property. Relying on this allegation, Plaintiffs claim negligent 

misrepresentation, fraud, and constructive fraud. The district court dismissed 

all three claims because they rest on a misrepresentation regarding future 

conduct, not existing fact. We affirm as to all three claims.

1.

A claim for negligent misrepresentation requires Plaintiffs to show that: 

(1) JPMC, in the course of its business, supplied to Plaintiffs false information 

for guidance in a business transaction; (2) JPMC did not exercise reasonable 

care or competence in obtaining or communicating the information; (3) 

Plaintiffs justifiably relied on the information; and (4) JPMC’s negligent 

misrepresentation proximately caused Plaintiffs to suffer pecuniary loss. See 

First Nat’l Bank of Durant v. Trans Terra Corp. Int’l, 142 F.3d 802, 809 (5th 

Cir. 1998) (citing Fed. Land Bank Ass'n of Tyler v. Sloane, 825 S.W.2d 439, 442 

(Tex. 1991)). However, “the misrepresentation at issue must be one of existing 

fact.” BCY Water Supply Corp. v. Residential Inv., Inc., 170 S.W.3d 596, 603 

(Tex. App.—Tyler 2005, pet. denied) (emphasis added). A misrepresentation 

regarding future conduct cannot support the claim. See Clardy Mfg. Co. v. 

Marine Midland Bus. Loans Inc., 88 F.3d 347, 357 (5th Cir. 1996) (citing 

8

Case: 13-51025 Document: 00512964518 Page: 8 Date Filed: 03/10/2015
No. 13-51025

Airborne Freight Corp., Inc. v. C.R. Lee Enterprises, 847 S.W.2d 289, 298 (Tex. 

App.—El Paso 1992, writ denied)).

For example, in BCY a water supply company’s employee represented 

that there would be no problem getting water service for a certain piece of 

property that the plaintiff planned to purchase. 170 S.W.3d at 599. In Maddox 

v. Vantage Energy, LLC, an oil and gas company promised to give individual 

land owners an opportunity to accept a pre-existing deal it had with a landowners association. 361 S.W.3d 752, 761 (Tex. App.—Fort Worth 2012, pet. 

denied). In both of these cases, the Texas Court of Appeals held that the 

plaintiffs’ negligent misrepresentation claims failed as a matter of law because 

any alleged misrepresentation regarded future conduct, not an existing fact. 

Our court, following Texas law, has done the same. Verdin v. Fed. Nat’l Mortg. 

Ass'n, 540 F. App'x 253, 255 (5th Cir. 2013) (holding that a mortgagee telling 

a mortgagor “not to worry about the foreclosure” is a promise of future conduct 

and is “not actionable under Texas law.”).

Similarly, Plaintiffs in this case allege that JPMC promised to delay 

foreclosure until it considered and responded to Plaintiffs’ application for a 

loan modification. As the district court correctly noted, this is no more than a 

promise of future conduct and, therefore, Plaintiffs have failed to state a claim 

for negligent misrepresentation.

2.

A valid claim for fraud requires Plaintiffs to show that: (1) JPMC made 

a representation to them in the course of business; (2) the representation was 

false; (3) JPMC knew the representation was false or made the representation 

recklessly; (4) JPMC intended for the Plaintiffs to rely on the representation; 

(5) Plaintiffs did rely on the representation; and (6) Plaintiffs suffered injury 

as a result. E.g., Massey v. EMC Mortg. Corp., 546 F. App’x 477, 481 (5th Cir. 

9

Case: 13-51025 Document: 00512964518 Page: 9 Date Filed: 03/10/2015
No. 13-51025

2013); Clardy, 88 F.3d at 359 (5th Cir. 1996); see also In re First Merit Bank, 

N.A., 52 S.W.3d 749, 758 (Tex. 2001).

Like the negligent misrepresentation claims, the district court dismissed 

Plaintiffs’ fraud claim for failure to allege a misrepresentation of existing fact. 

Fraud claims based on promises of future conduct may proceed, but they 

require further allegations. See Clardy, 88 F.3d at 360 (noting that promises 

of future conduct can support a fraud claim “‘only when made with the

intention, design and purpose of deceiving’”) (quoting Airborne Freight, 847 

S.W.2d at 294). In addition to the above elements, a plaintiff must also 

establish that the defendant intended not to perform at the time it made the 

promise at issue. See Schindler v. Austwell Farmers Coop., 841 S.W.2d 853, 

854 (Tex. 1992). While the Federal Rules of Civil Procedure require a plaintiff 

to plead with specificity the circumstances constituting fraud, “conditions of a 

person’s mind” may be alleged generally. Fed. R. Civ. P. 9(b); Flaherty & 

Crumrine Preferred Income Fund, Inc. v. TXU Corp., 565 F.3d 200, 206 (5th 

Cir. 2009). In describing the circumstances of the fraud, a plaintiff must set 

out the allegedly fraudulent statements, when and where the statements were 

made, and why they were fraudulent. See Flaherty, 565 F.3d at 206 

(interpreting Rule 9(b) to require these allegations). However, “[f]ailure to 

perform, standing alone, is no evidence of the[] intent not to perform when the 

promise was made.” Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 435 (Tex. 

1986); see, e.g., Clardy, 88 F.3d at 360 (ruling against a plaintiff on a motion 

for summary judgment).

In their Third Amended Complaint, Plaintiffs alleged that a 

representative from JPMC orally promised them by phone (on four occasions, 

the latest being in August 2012) that their “application would be reviewed and 

told the Plaintiffs that they would receive an answer and respond to the 

10

Case: 13-51025 Document: 00512964518 Page: 10 Date Filed: 03/10/2015
No. 13-51025

Plaintiffs before any non-judicial foreclosure action would be taken.” Plaintiffs 

further alleged that JPMC expected that Plaintiffs’ would rely upon this 

promise and knew that such reliance would lead to injury. However, Plaintiffs 

did not specifically allege that JPMC did not intend to perform the promise at 

the time it was made, much less the facts necessary to generally support such 

an allegation. See Clardy, 88 F.3d at 360; see also Pollett v. Aurora Loan 

Services, 455 F. App’x 413, 415 (5th Cir. 2011) (affirming the dismissal of a 

debtor’s fraud claim against a lender for failure to plead the claim with 

specificity). Accordingly, the district court did not err in dismissing Plaintiffs’ 

fraud claim.

3.

Plaintiffs also alleged constructive fraud. The district court, again, 

dismissed the claim for failure to allege misrepresentation of an existing fact. 

We affirm, but for alternative reasons.

Constructive fraud is the breach of a legal or equitable duty that the law 

declares fraudulent because it violates a fiduciary relationship.5 Hubbard v. 

Shankle, 138 S.W.3d 474, 483 (Tex. App.—Fort Worth 2004, pet. denied). It 

differs from the normal fraud claim in that it does not require the intent to 

defraud. Id. It centers on conduct that, at the very least, tends to deceive and 

5 A fiduciary relationship is not required in all constructive fraud cases. See Vickery 

v. Vickery, 999 S.W.2d 342, 377 (Tex. 1999) (“Constructive fraud is most frequently found in 

a breach of a fiduciary or confidential relationship.”) (emphasis added); see also In re Soza, 

542 F.3d 1060, 1076 (5th Cir. 2008) (surveying Texas cases involving constructive fraud 

claims). However, in cases lacking a fiduciary relationship, the constructive fraud claim is 

supported by particularly egregious facts. See, e.g., Klein v. Sporting Goods, Inc., 772 S.W.2d 

173, 174 (Tex. App.—Houston [14th Dist.] 1989, writ denied) (involving a store owner of an 

insolvent company who incorporated a second company to buy the assets of the first and avoid 

paying unsecured creditors). Here, Plaintiffs allege nothing more than unfulfilled statements 

made during negotiations between a debtor and lender. These facts are not egregious enough 

to eliminate the need to establish the existence of a fiduciary duty.

11

 

Case: 13-51025 Document: 00512964518 Page: 11 Date Filed: 03/10/2015
No. 13-51025

thus breaches a legal or equitable duty that the law considers important. In 

re Soza, 542 F.3d 1060, 1072 (5th Cir. 2008). The fiduciary duty “may arise 

from a moral, social, domestic or purely personal relationship of trust and 

confidence,” but that relationship must exist before and apart from the 

agreement that forms the basis of the suit. Id. Moreover, “a fiduciary 

relationship is an extraordinary one and will not be created lightly.” Manon v. 

Solis, 142 S.W.3d 380, 390 (Tex. App.—Houston [14th Dist.] 2004, pet. denied). 

“Mere subjective trust, without more, does not indicate that the person places 

confidence in another in the sense demanded by a fiduciary relationship, 

especially in the context of arm's length dealing.” Id. “[T]he relationship 

between a borrower and its lender generally does not create a fiduciary duty 

or impose a duty of good faith and fair dealing.” Baskin v. Mortgage & Trust, 

Inc., 837 S.W.2d 743, 747 (Tex. App.—Houston [14th Dist.] 1992, writ denied).

Plaintiffs failed to allege the existence of a fiduciary relationship, much 

less any facts that would support the existence of a fiduciary relationship. 

They allege no facts showing a relationship that pre-existed the loan or that 

JPMC formed a relationship of trust and confidence as opposed to one created 

for an arm’s length transaction. See Castillo v. First City Bancorporation of 

Texas, Inc., 43 F.3d 953, 960 (5th Cir. 1994) (holding that a broker-client 

relationship with antagonistic interests does not create fiduciary duties). 

Forming a debtor-lender relationship does not create fiduciary duties. See 

Baskin, 837 S.W.2d at 747. Therefore, we agree with the district court’s 

dismissal of the constructive fraud claim.

D.

Plaintiffs seek a reliance remedy against JPMC based on the doctrine of 

promissory estoppel. A cause of action for promissory estoppel requires: (1) a 

promise by the defendant; (2) foreseeable and actual reliance on the promise 

12

Case: 13-51025 Document: 00512964518 Page: 12 Date Filed: 03/10/2015
No. 13-51025

by the plaintiff to his detriment; and (3) that enforcement of the promise be

necessary to avoid an injustice. See “Moore” Burger, Inc. v. Phillips Petroleum 

Co., 492 S.W.2d 934, 937 (Tex. 1972); Ford v. City State Bank of Palacios, 44 

S.W.3d 121, 139 (Tex. App.—Corpus Christi 2001, no pet.). “To support a 

finding of promissory estoppel, the asserted promise must be sufficiently 

specific and definite that it would be reasonable and justified for the promisee 

to rely upon it as a commitment to future action.” Comiskey v. FH Partners, 

LLC, 373 S.W.3d 620, 635 (Tex. App.—Houston [14th Dist.] 2012, pet. denied)

(internal quotation marks omitted). One federal court applying Texas law has

held “that a promise that [a plaintiff’s] loan modification was ‘under 

consideration’ would not trigger the promissory estoppel doctrine.” Stolts v. 

Wells Fargo Bank, NA, No. 1:13-CV-19, 2014 WL 3545464, at *3 n.4 (S.D. Tex. 

Jan. 16, 2014) (citing Addicks Servs., Inc. v. GGP–Bridgeland, LP, 596 F.3d 

286, 300 (5th Cir. 2010)). According to the Third Amended Complaint, JPMC 

promised not only that it would consider Plaintiffs’ application, but that “there 

would be no non-judicial foreclosure until the loan modification process was 

completed and they were given a response and answer.” This additional 

representation makes JPMC’s promise sufficiently definite to support a 

plausible claim for promissory estoppel.

However, following our precedent, where a defendant has a valid, 

affirmative defense made plain on the face of the pleadings, the district court 

may dismiss on this basis. See Kansa Reins. Co. v. Cong. Mortg. Corp. of Tex., 

20 F.3d 1362, 1366 (5th Cir. 1994) (citation omitted) (“[W]hen a successful 

affirmative defense appears on the face of the pleadings, dismissal under Rule 

12(b)(6) may be appropriate.”). Where a contract claim (as here) is barred by 

13

Case: 13-51025 Document: 00512964518 Page: 13 Date Filed: 03/10/2015
No. 13-51025

the statute of frauds,6 an alternative claim of promissory estoppel requires the 

plaintiff to show not only that the defendant made a promise upon which he 

relied, but also “that the [defendant] promised to sign a written document 

complying with the statute of frauds.” Martins, 722 F.3d at 256–57 (citing 

Carpenter v. Phelps, 391 S.W.3d 143 (Tex.App.—Houston [1st Dist.] 2011, no 

pet.); Ford v. City State Bank of Palacios, 44 S.W.3d 121, 139 (Tex.App.—

Corpus Christi 2001, no pet.); Beta Drilling, Inc. v. Durkee, 821 S.W.2d 739, 

741 (Tex.App.—Houston 1992, writ denied)).

Plaintiffs failed to allege this additional promise. The complaint alleges

that JPMC orally promised it would consider Plaintiffs’ application before 

foreclosing, but never alleges that JPMC said it would put that promise in 

writing. Accordingly, because JPMC raised its statute of frauds defense in its 

motion to dismiss, the district court did not err in dismissing Plaintiffs’ 

promissory estoppel claim.

E.

Plaintiffs also allege that JPMC violated the DTPA. The district court 

dismissed this claim on the basis that Plaintiffs are not “consumers” within the 

meaning of the Act and thus have no basis for a DTPA claim.

6 Promises or commitments to loan money or delay repayment of money as to a loan 

agreement exceeding $50,000 in value are not enforceable unless they comply with the 

statute of frauds. Tex. Bus. & Com. Code Ann. § 26.02(a)(2); see also Martins, 722 F.3d at 

256 (holding that the statute of frauds also applies to oral modifications to loan agreements). 

Moreover, any agreement that, by its own terms, cannot be performed within one year from 

the date it is made must also comply with the statute of frauds. Tex. Bus. & Com. Code Ann. 

§ 26.01(a); see also Baisden v. I'm Ready Productions, Inc., 693 F.3d 491, 503 (5th Cir. 2012) 

(citing Abatement Inc. v. Williams, 324 S.W.3d 858, 860 (Tex.App.—Houston [14th Dist.] 

2010, pet. denied). Where the agreement is for a loan, “[t]he possibility of prepayment within 

one year alone is not enough to take the loan agreement out of [the] statute of frauds.” 

Schuhart v. Chase Home Fin., L.L.C., No. C-05-385, 2006 WL 1897263, at *2 (S.D. Tex. July 

10, 2006) (citing Mann v. NCNB Texas Nat. Bank, 854 S.W.2d 664, 668 (Tex. App.—Dallas 

1992, no writ)). The loan at issue here, under either basis, is subject to the statute of frauds.

14

 

Case: 13-51025 Document: 00512964518 Page: 14 Date Filed: 03/10/2015
No. 13-51025

To succeed on a DTPA claim, Plaintiffs must show: (1) they are 

consumers who sought or acquired, by purchase or lease, goods or services from 

JPMC; (2) JPMC can be sued under the DTPA; (3) JPMC committed an act in 

violation of the DTPA; and (4) JPMC’s purported action was a producing cause 

of Plaintiffs’ damages. See Tex. Bus. & Com. Code Ann. §§ 17.41–.63; see also

In re Frazin, 732 F.3d 313, 323 (5th Cir. 2013); Doe v. Boys Clubs of Greater 

Dallas, Inc., 907 S.W.2d 472, 478 (Tex. 1995). 

The DTPA provides a private cause of action only for “consumers,” 

meaning those who purchase a good or service. See Brittan Commc’ns Int’l 

Corp. v. Sw. Bell Tel. Co., 313 F.3d 899, 907 (5th Cir. 2002); see also Riverside 

Nat’l Bank v. Lewis, 603 S.W.2d 169, 173 (Tex. 1980) (citing Tex. Bus. & Com. 

Code Ann. § 17.45(4)). “Generally, a person cannot qualify as a consumer if 

the underlying transaction is a pure loan because money is considered neither 

a good nor a service.” Fix v. Flagstar Bank, FSB, 242 S.W.3d 147, 160 (Tex. 

App.—Fort Worth 2007, pet. denied) (citing Riverside, 603 S.W.2d at 173–74).

We have dismissed DTPA claims based on nearly identical facts. In 

Miller, the plaintiffs based their claim on their lender’s promises and conduct 

during attempts to modify their original purchase-money mortgage. 726 F.3d 

at 725. We held that since the claim rested on promises and conduct related 

to a loan modification, not the original loan used to purchase the plaintiffs’ 

house, the complaint was based on a “pure loan transaction” and the plaintiffs 

did not qualify as consumers. Id. (citing Ford, 44 S.W.3d at 133); see also Ayers 

v. Aurora Loan Servs., LLC, 787 F. Supp. 2d 451, 455 (E.D. Tex. 2011) (“[A] 

modification of an existing loan . . . is analogous to refinancing services. 

Refinancing is simply an extension of credit that does not qualify Plaintiff as a 

consumer.”). Miller is directly on point and the district court did not err in 

dismissing this claim.

15

Case: 13-51025 Document: 00512964518 Page: 15 Date Filed: 03/10/2015
No. 13-51025

F.

The district court dismissed Plaintiffs’ remaining claims for declaratory 

judgment and trespass to try title on the ground that “[a]ll of Plaintiffs’ 

substantive claims fail as a matter of law. Because their actions for declaratory 

judgment and in trespass to try title are based on those claims, they also fail 

as a matter of law.” We agree.

Under federal statute, federal courts have authority to grant declaratory 

relief so long as a justiciable controversy exists as to the rights of the parties 

and a declaration is capable of resolving the controversy. 28 U.S.C. § 2201; see 

Bauer v. Texas, 341 F.3d 352, 357–58 (5th Cir. 2003) (holding that the test for 

an “actual controversy” is nearly identical to the test for Article III standing). 

As discussed above, Plaintiffs have failed to state any other valid claim for 

relief. Because a declaratory judgment is “remedial in nature,” where all of a 

plaintiff’s causes of action are dismissed, a related declaratory judgment claim 

should also be dismissed. See, e.g., Williams v. Wells Fargo Bank, N.A., 560 F. 

App’x 233, 243 (5th Cir. 2014).

Similarly, a trespass to try title claim requires a plaintiff to prove a basis 

for his right to title. Martin v. Amerman, 133 S.W.3d 262, 265 (Tex. 2004). 

Here, any purported right of Plaintiffs to title in the Property is based on the 

failed claims already discussed above, so this claim should also be dismissed. 

See, e.g., Singha v. BAC Home Loans Servicing, L.P., 564 F. App’x 65, 72 (5th 

Cir. 2014); Williams, 560 F. App’x at 242–43.

IV.

For the foregoing reasons, we AFFIRM.

16

Case: 13-51025 Document: 00512964518 Page: 16 Date Filed: 03/10/2015