Court Opinion

ID: 2768994
Source: CourtListenerOpinion
Date Created: 2015-01-12 19:01:10.357796+00
Date Added: 2024-06-11T11:23:39.927885
License: Public Domain

Case: 13-51025       Document: 00512897504         Page: 1     Date Filed: 01/12/2015

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT

                                       No. 13-51025
                                                                          United States Court of Appeals
                                                                                   Fifth Circuit

                                                                                 FILED
ANDREA C. GUAJARDO; JUANITA ZEPEDA,                                        January 12, 2015
                                                                            Lyle W. Cayce
               Plaintiffs – Appellants,                                          Clerk

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, DeMOSS, and ELROD, Circuit Judges.
PER CURIAM:*
       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. We AFFIRM in part, REVERSE in part, and REMAND to the
district court for further proceedings consistent with this opinion.

       * Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5th Cir.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.
     Case: 13-51025       Document: 00512897504          Page: 2     Date Filed: 01/12/2015

                                       No. 13-51025

                                               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 non-
judicial 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.
       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

       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: 00512897504     Page: 3   Date Filed: 01/12/2015

                                 No. 13-51025

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.
                                        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

                                        3
     Case: 13-51025       Document: 00512897504          Page: 4     Date Filed: 01/12/2015

                                       No. 13-51025

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
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
as to the breach of contract, negligent misrepresentation, constructive fraud,

       2The district court dismissed, with prejudice, Plaintiffs’ breach of contract claim based
on the allegations in the Second Amended Complaint. As explained below, we ignore the
breach of contract claim in the Third Amended Complaint and our analysis of this particular
claim turns on the allegations in the Second Amended Complaint.

                                               4
     Case: 13-51025       Document: 00512897504         Page: 5     Date Filed: 01/12/2015

                                       No. 13-51025

and DTPA claims, and reverse as to the claims for wrongful foreclosure, fraud,
promissory estoppel, declaratory judgment, and trespass to try title.
                                             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

       3Furthermore, 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

                                              5
     Case: 13-51025      Document: 00512897504        Page: 6    Date Filed: 01/12/2015

                                     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

to oral modifications to loan agreements). JPMC’s alleged promise to delay foreclosure was
never reduced to writing.

                                            6
     Case: 13-51025       Document: 00512897504         Page: 7    Date Filed: 01/12/2015

                                      No. 13-51025

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
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 and that, as a result, they lost the
opportunity to obtain cash or to find a buyer for the Property before JPMC
foreclosed. Plaintiffs also specifically allege that the Property sold for a grossly
inadequate sales price. Nevertheless the district court dismissed the claim for
not alleging “a grossly inadequate selling price.”
       Because Plaintiffs’ wrongful foreclosure claim alleges a grossly
inadequate selling price, as well as the other required elements, the district
court erred in dismissing this claim.

       4Tex. 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: 00512897504        Page: 8   Date Filed: 01/12/2015

                                 No. 13-51025

                                       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 the negligent misrepresentation and
constructive fraud claims, but reverse as to the fraud claim.
                                       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
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

                                       8
    Case: 13-51025    Document: 00512897504       Page: 9   Date Filed: 01/12/2015

                                   No. 13-51025

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 land-
owners 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.
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).

                                        9
    Case: 13-51025     Document: 00512897504     Page: 10   Date Filed: 01/12/2015

                                  No. 13-51025

      Like the negligent misrepresentation claims, the district court dismissed
Plaintiffs’ fraud claim for failure to allege a misrepresentation of existing fact.
This was error.      Fraud claims based on promises of future conduct may
proceed, but they require additional 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). To succeed, a plaintiff must establish that the
defendant intended not to perform at the time he 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).
      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
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.                Plaintiffs
sufficiently pleaded the circumstances of the fraud and JPMC’s intent, and this
claim should survive the motion to dismiss.

                                        10
    Case: 13-51025       Document: 00512897504          Page: 11     Date Filed: 01/12/2015

                                       No. 13-51025

                                              3.
       Plaintiffs also alleged constructive fraud.            The district court, again,
dismissed the claim for failure to allege misrepresentation of an existing fact.
We affirm the dismissal 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
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,

       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: 00512897504      Page: 12   Date Filed: 01/12/2015

                                 No. 13-51025

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
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)

                                       12
   Case: 13-51025     Document: 00512897504      Page: 13   Date Filed: 01/12/2015

                                 No. 13-51025

(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.
                                       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.
      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.

                                       13
   Case: 13-51025     Document: 00512897504      Page: 14   Date Filed: 01/12/2015

                                  No. 13-51025

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 v. BAC Home Loans Servicing, L.P., the plaintiffs based their claim on
their lender’s promises and conduct during attempts to modify their original
purchase-money mortgage. 726 F.3d 717, 725 (5th Cir. 2013). 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.
                                       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 disagree.
      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

                                       14
    Case: 13-51025     Document: 00512897504      Page: 15    Date Filed: 01/12/2015

                                   No. 13-51025

an “actual controversy” is nearly identical to the test for Article III standing).
Furthermore, “[t]he existence of another adequate remedy does not preclude a
declaratory judgment that is otherwise appropriate.” Fed. R. Civ. P. 57.
      The district court dismissed Plaintiffs’ request for a declaratory
judgment because it had already dismissed all of Plaintiffs’ substantive claims
which, presumably, were the only basis for creating a genuine controversy.
Because some of Plaintiffs’ claims survive JPMC’s motion for summary
judgment, the district court’s reason for denying their request for declaratory
relief no longer supports its order. Plaintiffs’ declaratory judgment action
should go forward with the other claims.
      An action for trespass to try title is “the method for determining title to
lands, tenements, or other real property and the exclusive remedy for resolving
competing claims to property.” Parker v. Hunegnaw, 364 S.W.3d 398, 401 (Tex.
App.—Houston [14th Dist.] 2012, no pet.) (citing Tex. Prop. Code Ann. §
22.001). To succeed, a plaintiff must establish the superiority of his title and
cannot prevail merely on the weakness of the defendant’s title. Martin v.
Amerman, 133 S.W.3d 262, 265 (Tex. 2004). Because Plaintiffs have alleged a
valid claim for wrongful foreclosure, fraud, and promissory estoppel, each of
which substantiate a superior claim to title (taking all of Plaintiffs’ allegations
as true), and request return of title as one form of relief, the district court erred
in dismissing Plaintiffs’ action for trespass to try title.

                                        IV.

                                         15
   Case: 13-51025   Document: 00512897504    Page: 16   Date Filed: 01/12/2015

                              No. 13-51025

     For the foregoing reasons, we AFFIRM in part, REVERSE in part, and
REMAND to the district court for further proceedings consistent with this
opinion.

                                   16