Pelletier v. InterBank

UNITED STATES DISTRICT COURT May 21, 2020

SOUTHERN DISTRICT OF TEXAS David J. Bradley, Clerk

VICTORIA DIVISION

GAETAN PELLETIER, §

§

Plaintiff, §

VS. § CIVIL ACTION NO. 6:19-CV-0089

§

INTERBANK §

and §

REAL ESTATE HOLDINGS LLC §

and §

PATRICK R. LLOYD, et al, §

§

Defendants. §

MEMORANDUM OPINION AND ORDER

I. INTRODUCTION

Pending before the Court are the defendants’, InterBank, Inc. (“InterBank”),

motion to dismiss and memorandum in support (Dkt. Nos. 23 & 34), Tony Levatino

(“Levatino”), motion to dismiss and memorandum in support (Dkt. Nos. 35 & 42), Real

Estate Holdings, LLC (“REH”), motion to dismiss and memorandum in support (Dkt.

Nos. 37 & 43), Patrick R. Lloyd (“Lloyd”) and Thomas I. Higier (“Higier”), motion to

dismiss and brief in support (Dkt. Nos. 39 & 46)1 and Deana Tillotson (“Tillotson”),2

1Lloyd and Higier also move to dismiss the plaintiff’s claims against them on the basis of attorney immunity,

arguing that the plaintiff sued them as attorneys for InterBank and/or as substitute trustees. A dismissal on this basis

is also warranted. See Iqbal v. Bank of Am., 559 Fed. App’x 363, 365 (5th Cir. 2014) (finding law firm qualified for

attorney immunity because it was retained to assist in the foreclosure and the actions complained of by the plaintiffs

were in the scope of its representation); see also Van Hauen v. Wells Fargo Bank, N.A., No. 4:12–CV–344, 2012

WL 4092590, at *1-3 (E.D. Tex. Aug. 16, 2012), report adopted, 2012 WL 4092516 (E.D. Tex. Sept.12, 2012)

(finding defendant attorney was immune from suit where its only role in the facts supporting plaintiff’s allegations is

that it was acting as the substitute trustee and legal counsel for a scheduled foreclosure sale).

(collectively, the “defendants”) motions to dismiss pursuant to Rules 12(b)(1), 12(b)(5)

and 12(b)(6) and alternative motions for a more definite statement pursuant to Rule 12(e)

and for judgment on the pleadings pursuant to Rule 12(c)3 (Dkt. No. 44). The plaintiff,

Gaetan Pelletier (the “plaintiff”), proceeding pro se, has filed responses in opposition to

the defendants’ motions. (Dkt. Nos. 31, 41 & 45). After having carefully considered the

motions, responses, replies and the applicable law, the Court determines that each of the

motions to dismiss should be GRANTED on the basis stated hereafter.

II. FACTUAL BACKGROUND

This case concerns the plaintiff’s challenge to the November 5, 2019, foreclosure

sale of a 172-unit hotel and restaurant in Cuero, Dewitt County, Texas, commonly

referred to as the TexInn (the “Property”). The plaintiff, a California resident, is the

principal and owner of Pelletier Management and Consulting, LLC (“PMC”). InterBank

extended three loans to PMC, as borrower, for construction of the Property on February

25, 2015, April 12, 2016 and March 31, 2017, in the amounts of $2,000,000.00 (“Note

1”), $500,000.00 (“Note 2”) and $1,000,000.00 (“Note 3”), respectively (collectively, the

2 As an alternative ground for dismissal, Tillotson moves to dismiss the plaintiff’s claims against her pursuant to

Fed. R. Civ. P. 12(b)(5) for insufficient service of process because she was not personally served with a copy of the

complaint. She also avers that the proof of service filed by the plaintiff contains false information. (See Dkt. No. 44

at 8 – 9). Since the attempted service was untimely and invalid, and proper service under the circumstances would

be futile, a dismissal pursuant to Fed. R. Civ. P. 12(b)(5) would also be appropriate. See Kreimerman v. Casa

Veerkamp, S.A. de C.V., 22 F.3d 634, 645 (5th Cir.), cert. denied, 513 U.S. 1016, 115 S. Ct. 577, 130 L.Ed.2d 492

(1994) (“A district court . . . has broad discretion to dismiss an action for ineffective service of process.”); see also

Int’l Transactions, Ltd. v. Embotelladora Agral Regionmontana SA de CV, 277 F. Supp.2d 654, 665 (N.D. Tex.

2002) (quoting Umbenhauer v. Woog, 969 F.2d 25, 30 (3d Cir. 1992)) (“Upon determining that process has not been

properly served on a defendant, district courts possess broad discretion to either dismiss the plaintiff’s complaint for

failure to effect service or simply quash service of process.” ).

3 InterBank, Levatino and REH move to dismiss the plaintiff’s complaint pursuant to Rules 12(b)(1) and 12(b)(6)

and assert alternative motions for a more definite statement pursuant to Fed. R. Civ. P. 12(e) and for judgment on

the pleadings pursuant to Fed. R. Civ. P. 12(c).

“Notes”). Simultaneous with the execution of the Notes, PMC, as grantor, executed

corresponding Deeds of Trust granting security interests in the Property to InterBank.

The Deeds of Trust securing Notes 1, 2 and 3 were recorded in the real property records

of Dewitt County, Texas on March 5, 2015 (“Deed of Trust 1”), April 26, 2016 (“Deed of

Trust 2”), and April 7, 2017 (“Deed of Trust 3”), respectively.

The plaintiff maintains, as lessor, that prior to the closings of the loans, he

executed a Ground Lease with PMC as lessee. The Ground Lease, however, was not

recorded in the real property records of Dewitt County, Texas until April 12, 2018, after

the Deeds of Trust were already recorded.

PMC subsequently defaulted on the loans due to its failure to make payments

when due under the Notes. On June 1, 2018, InterBank and PMC entered into a

Forbearance Agreement, which granted PMC a one-year period to complete the first

phase of the hotel, along with relief from debt service payments on the loans. The

Forbearance Agreement also provided PMC with an option to obtain permanent

financing, provided that the permanent loan would be secured by a priority mortgage on

PMC’s Ohio property. Further, the Forbearance Agreement contained certain releases

whereby PMC and the plaintiff, as guarantor, specifically agreed to “indemnify and hold

harmless [InterBank] against any claim, action or cause of action . . . in connection with

any of the representations and warranties [made therein].” On June 7, 2019, the Notes,

Deeds of Trust, and Forbearance Agreement were assigned by InterBank to REH.

On June 25, 2019, REH and PMC entered into the Modification of Forbearance

Agreement which granted PMC an additional sixty days to complete the first phase of

construction of the hotel, through August 26, 2019. By July 31, 2019, PMC had

substantially completed the first phase of the hotel and obtained a Certificate of

Occupancy from the City of Cuero. No permanent financing agreement, however, was

ever consummated since the parties were unable to agree on the final requirements and

conditions necessary to secure such financing. In the absence of such an agreement,

PMC defaulted.

Following the issuance of the requisite notices, a non-judicial foreclosure sale of

the Property was held on November 5, 2019, with REH taking possession of the Property

as the highest bidder. Subsequently, the plaintiff commenced the instant action against

the defendants contesting foreclosure of the Property, asserting a litany of claims,

including claims for breach of contract, negligence, gross negligence, fraud, fraudulent

inducement, fraud by nondisclosure, tortious interference with existing contract, duress

and economic duress and seeking a declaration that the Forbearance Agreement is void

and invalid.

The defendants now move to dismiss the plaintiff’s claims on various grounds.

III. STANDARDS OF REVIEW

A. Standard Under Rule 12(b)(1)

Federal Rule of Civil Procedure 12(b)(1) permits the dismissal of an action for the

lack of subject matter jurisdiction. Fed. R. Civ. P. 12(b)(1). “If [a federal] court

determines at any time that it lacks subject-matter jurisdiction, [it] must dismiss the

action.” Fed. R. Civ. P. 12(h)(3); see also Berkshire Fashions, Inc. v. M.V. Hakusan II,

954 F.2d 874, 880 n.3 (3rd Cir. 1992) (citing Rubin v. Buckman, 727 F.2d 71, 72 (3d Cir.

1984)) (reasoning that “[t]he distinction between a Rule 12(h)(3) motion and a Rule

12(b)(1) motion is simply that the former may be asserted at any time and need not be

responsive to any pleading of the other party.”) Since federal courts are considered

courts of limited jurisdiction, absent jurisdiction conferred by statute, they lack the power

to adjudicate claims. See, e.g., Stockman v. Fed. Election Comm’n, 138 F.3d 144, 151

(5th Cir. 1998) (citing Veldhoen v. United States Coast Guard, 35 F.3d 222, 225 (5th Cir.

1994). Therefore, the party seeking to invoke the jurisdiction of a federal court carries

“the burden of proving subject matter jurisdiction by a preponderance of the evidence.”

Vantage Trailers, Inc. v. Beall Corp., 567 F.3d 745, 748 (5th Cir. 2009) (citing New

Orleans & Gulf Coast Ry. Co. v. Barrois, 533 F.3d 321, 327 (5th Cir. 2008); see also

Stockman, 138 F.3d at 151.

When evaluating jurisdiction, “a [federal] court is free to weigh the evidence and

satisfy itself as to the existence of its power to hear the case.” MDPhysicians & Assoc.,

Inc. v. State Bd. of Ins., 957 F.2d 178, 181 (5th Cir. 1992) (citing Williamson v. Tucker,

645 F.2d 404, 413 (5th Cir. 1981)); see also Vantage Trailers, 567 F.3d at 748 (reasoning

that “[i]n evaluating jurisdiction, the district court must resolve disputed facts without

giving a presumption of truthfulness to the plaintiff’s allegations.”) In making its ruling,

the court may rely on any of the following: “(1) the complaint alone, (2) the complaint

supplemented by undisputed facts evidenced in the record, or (3) the complaint

supplemented by undisputed facts plus the court’s resolution of disputed facts.”

MDPhysicians, 957 F.2d at 181 n.2 (citing Williamson, 645 F.2d at 413).

B. Standard Under Rule 12(b)(6)

Federal Rule of Civil Procedure 12(b)(6) authorizes a defendant to move to

dismiss for “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P.

12(b)(6). Under the demanding strictures of a Rule 12(b)(6) motion, “[t]he plaintiff’s

complaint is to be construed in a light most favorable to the plaintiff, and the allegations

contained therein are to be taken as true.” Oppenheimer v. Prudential Sec., Inc., 94 F.3d

189, 194 (5th Cir. 1996) (citing Mitchell v. McBryde, 944 F.2d 229, 230 (5th Cir. 1991)).

Dismissal is appropriate only if, the “[f]actual allegations [are not] enough to raise a right

to relief above the speculative level, on the assumption that all the allegations in the

complaint are true (even if doubtful in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. 544,

555, 127 S. Ct. 1955, 1965, 167 L. Ed.2d 929 (2007). Moreover, in light of Federal Rule

of Civil Procedure 8(a)(2), “[s]pecific facts are not necessary; the [factual allegations]

need only ‘give the defendant fair notice of what the . . . claim is and the grounds upon

which it rests.” Erickson v. Pardus, 551 U.S. 89, 93, 127 S. Ct. 2197, 2200, 167 L. Ed.2d

1081 (2007) (per curiam) (quoting Twombly, 550 U.S. at 555, 127 S. Ct. at 1964). Even

so, “a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’

requires more than labels and conclusions, and a formulaic recitation of the elements of a

cause of action will not do.” Twombly, 550 U.S. at 555, 127 S. Ct. at 1964 - 65 (citing

Papasan v. Allain, 478 U.S. 265, 286, 106 S. Ct. 2932, 92 L. Ed.2d 209 (1986)).

In Ashcroft v. Iqbal, the Supreme Court expounded upon the Twombly standard,

reasoning that “[t]o survive a motion to dismiss, a complaint must 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, 129 S. Ct. 1937, 1949, 173 L. Ed.2d 868 (2009) (quoting

Twombly, 550 U.S. at 570, 127 S. Ct. at 1974). “A claim has facial plausibility when the

plaintiff pleads factual content that allows the court to draw the reasonable inference that

the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678, 129 S. Ct. at

1949 (citing Twombly, 550 U.S. at 556, 127 S. Ct. at 1955). “But where the well-pleaded

facts do not permit the court to infer more than the mere possibility of misconduct, the

complaint has alleged-but it has not ‘show [n]’-‘that the pleader is entitled to relief.’”

Iqbal, 556 U.S. at 679, 129 S. Ct. at 1950 (quoting Fed. R. Civ. P. 8(a)(2)).

Nevertheless, when considering a 12(b)(6) motion to dismiss, the Court’s task is

limited to deciding whether the plaintiff is entitled to offer evidence in support of his or

her claims, not whether the plaintiff will eventually prevail. Twombly, 550 U.S. at 563,

127 S. Ct. at 1969 n.8 (citing Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S. Ct. 1683, 40 L.

Ed.2d 90 (1974)); see also Jones v. Greninger, 188 F.3d 322, 324 (5th Cir. 1999). In this

regard, its review is limited to the allegations in the complaint and to those documents

attached to a defendant’s motion to dismiss to the extent that those documents are

referred to in the complaint and are central to the claims. Causey v. Sewell Cadillac-

Chevrolet, Inc., 394 F.3d 285, 288 (5th Cir. 2004). The Court may also, however, “take

judicial notice of documents in the public record . . . , and may consider such documents

in determining a motion to dismiss.” R2 Invs. LDC v. Phillips, 401 F.3d 638, 640 n. 2

(5th Cir. 2005) (citing Lovelace v. Software Spectrum Inc., 78 F.3d 1015, 1017 - 18 (5th

Cir. 1996). “Such documents should be considered only for the purpose of determining

what statements [they] contain, not to prove the truth of [their] contents.” Lovelace, 78

F.3d at 1018 (internal citation omitted). “If, based on the facts pleaded and judicially

noticed, a successful affirmative defense appears, then dismissal under Rule 12(b)(6) is

proper.” Hall v. Hodgkins, No. 08-40516, 2008 WL 5352000, *3 (5th Cir. Dec. 23,

2008) (citing Kansa Reinsurance Co., Ltd. v. Cong. Mortg. Corp. of Tex., 20 F.3d 1362,

1366 (5th Cir. 1994)).

IV. ANALYSIS AND DISCUSSION

A. The Defendants’ Motions to Dismiss for Lack of Standing

As a threshold matter, the defendants collectively challenge, pursuant to their Rule

12(b)(1) motion, the plaintiff’s standing to assert the claims alleged in the underlying

action. See Fed. R. Civ. P. 12(b)(1). Specifically, the defendants assert that because the

plaintiff is neither a party to the Notes, Deeds of Trust or Forbearance Agreements nor an

intended third-party beneficiary of any of the operative documents at issue, he lacks

standing to bring this lawsuit. “If a plaintiff lacks standing to bring a claim, the Court

lacks subject matter jurisdiction over the claim and dismissal under Federal Rule of Civil

Procedure 12(b)(1) is appropriate.” In re Enron Corp. Sec., Derivative & ERISA Litig.,

279 F.R.D. 395, 403 (S.D. Tex. 2011) (citations omitted).

To this end, “a plaintiff generally must assert his legal rights and interests, and

cannot rest his claim to relief on the legal rights or interests of third parties.” Superior

MRI Servs., Inc. v. All. Healthcare Servs., Inc., 778 F.3d 502, 504 (5th Cir. 2015)

(quoting United States v. Johnson, 632 F.3d 912, 919 - 20 (5th Cir. 2011)). Therefore,

when a defendant challenges ownership of legal rights held by a plaintiff and submits

evidence to debunk the plaintiff’s claim, the plaintiff must prove by a preponderance of

the evidence that he, in fact owns an interest in the legal claims. Superior MRI Servs.,

Inc., 778 F.3d at 504. In this regard, the plaintiff has failed and subjects his lawsuit to

dismissal. Id.

Here, the plaintiff disclaims ownership interest in PMC and, thereby, concedes

that he is not the borrower on any of the loan documents. Instead, he argues that his

third-party beneficiary standing is derived from the guaranty agreement and related

documents. In Texas, in order “[t]o have standing to enforce a contract, one must be a

party thereto.” Lakiesha v. Bank of New York Mellon, No. 3:15-CV-0901-B, 2015 WL

5934439, at *3 (N.D. Tex. Oct. 9, 2015) (internal citations omitted). In other words, “a

third party cannot enforce a contract if the third party benefits only incidentally from it.’”

Id. (citing Duque v. Wells Fargo, N.A., 462 S.W.3d 542, 547 (Tex. App.—Houston [1st

Dist.] 2015, no pet.) (quoting City of Houston v. Williams, 353 S.W.3d 128, 145 (Tex.

2011)). Rather, to have standing to enforce a contract, a third party must demonstrate

that it is an intended beneficiary under the parties’ agreement. See First Bank v. Brumitt,

519 S.W.3d 95, 102 (Tex. 2017). The Court holds that the plaintiff is not a party to the

contract.

To establish that he is a third-party beneficiary, the plaintiff must prove that “the

contracting parties intended to secure a benefit to that third party and entered into the

contract directly for the third party’s benefit.” Id. (citing Stine v. Stewart, 80 S.W.3d 586,

589 (Tex. 2002) (internal quotation marks omitted). “[T]he fact that a person is directly

affected by the [first and second] parties’ conduct, or that he may have a substantial

interest in a contract’s enforcement, does not make him a third-party beneficiary.”

Lakiesha, 2015 WL 5934439, at *8 (internal citations omitted).

It is undisputed that the Notes, Deeds of Trust and/or Forbearance Agreements are

unambiguous and do not clearly express an intent to confer upon the plaintiff third-party

beneficiary status. Although the plaintiff executed the loan documents in his capacity as

chief executive manager of PMC, he was not a party to the parties’ agreements and,

therefore, lacks standing to enforce or complain about any alleged misconduct relating to

them. See Lakiesha, 2015 WL 5934439, at *8 (holding that the plaintiff lacked standing

to enforce rights under the subject note executed by her husband because she was not a

party to the note, despite having executed the deed of trust). The Court concludes that the

plaintiff lacks standing.

B. The Defendants’ Motions to Dismiss for Failure to State a Claim.

Even assuming the plaintiff has standing, the plaintiff’s Second Amended

Complaint is dismissed for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6).

1. The Plaintiff’s Claim for Breach of Contract

With regard to his breach of contract claim, the plaintiff alleges that he had a

“valid and enforceable [Forbearance Agreement] with InterBank to provide a permanent

long-term loan on his property and for InterBank to pay off the SBA loan.” (Dkt. No. 20

at ¶ 50). The plaintiff further asserts that he is the proper party to sue for breach of

contract because he is the owner of the building, which constitutes his personal property.

(Id. at ¶ 51). To prevail on a breach of contract claim under Texas law, proof of the

following essential elements is required: “(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.” Mullins

v. TestAmerica, Inc., 564 F.3d 386, 418 (5th Cir. 2009) (quoting Aguiar v. Segal, 167

S.W.3d 443, 450 (Tex. App.-Houston [14th Dist.] 2005, pet. denied)).

Indeed, the Notes, Deeds of Trust, Forbearance Agreement and Modification of

Forbearance Agreement identify InterBank, and upon assignment, REH, as the Lender,

and PMC, as the borrower. Though the plaintiff signed the Forbearance Agreements as

guarantor and manager of PMC, as an individual, he is not empowered to seek

affirmative relief in his own behalf. See Hart v. First Fed. Sav. & Loan Ass’n, 727

S.W.2d 723, 725 (Tex. App.—Austin 1987, no writ) (individual guarantor not entitled to

seek affirmative recovery based on principal debtor corporation’s statutory cause of

action where cause of action is not assigned to guarantor). Accordingly, the defendants

are entitled to a dismissal of the plaintiff’s breach of contract claim.4

2. The Plaintiff’s Tort Claims Generally

With regard to his negligence claims, the plaintiff asserts that the defendants

“owed a duty of care to perform according to the terms of the [Forbearance Agreement]”

and “breached their duties as reasonable prudent business people” by negligently

handling the loan transactions and/or by omitting or providing bad information and bad

4 In the absence of an existing contract, the plaintiff’s tortious interference with an existing contract claim fails. See

Fluorine On Call, Ltd. v. Fluorogas Ltd., 380 F.3d 849, 864 (5th Cir. 2004) (recognizing that under Texas law, the

elements of a tortious interference with a contract claim are: “(1) the existence of a contract subject to interference;

(2) a willful and intentional act of interference; (3) such act was a proximate cause of damage; and (4) actual

damage or loss occurred.”)

documents at the inception and throughout the loan process. (Dkt. No. 20 at 23 - 28).

The plaintiff asserts similar allegations in support of his claims for fraud. (Id. at 29 - 37).

Texas law disfavors contorting breach of contract claims into tort claims.

Quintanilla v. K-Bin, Inc., 993 F. Supp. 560, 563 (S.D. Tex. 1998) (internal citation

omitted); Heller Fin., Inc. v. Grammco Computer Sales, Inc., 71 F.3d 518, 527 (5th Cir.

1996) (“As a general rule, the failure to perform the terms of a contract is a breach of

contract, not a tort.”) (internal citations omitted). The “economic loss rule” provides that

“mere nonfeasance under a contract creates liability only for breach of contract” and “tort

damages are generally not recoverable unless the plaintiff suffers an injury that is

independent and separate from the economic losses recoverable under a breach of

contract claim.” Medistar Twelve Oaks Partners, Ltd. v. Am. Econ. Ins. Co., No. H-09-

3828, 2010 WL 1996596, at *7 (S.D. Tex. May 17, 2010) (quoting Crawford v. Ace Sign,

Inc., 917 S.W.2d 12, 13 (Tex. 1996) (other citations omitted)).

The plaintiff’s negligence5 and fraud6 claims are simply repackaged contract

claims because the sole potential basis for the plaintiff’s suit is to recover economic

5 “Under Texas law, the elements of a negligence claim are (1) a legal duty on the part of the defendant; (2) breach

of that duty; and (3) damages proximately resulting from that breach.” Lane v. Haliburton, 529 F.3d 548, 565 (5th

Cir. 2008) (quoting Sport Supply Grp., Inc. v. Columb. Cas. Co., 335 F.3d 453, 466 (5th Cir. 2003)). “[N]o special

relationship [exists] between a mortgagor and mortgagee.” Collier v. Wells Fargo Home Mortg., No. 7:04–CV–

086-K, 2006 WL 1464170 at *8 (N.D. Tex. May 26, 2006) (citing UMLIC VP LLC v. T & M Sales and Envtl. Sys.,

Inc., 176 S.W.3d 595, 612 (Tex. App.-Corpus Christi 2005, pet. denied)). “Absent a ‘special relationship,’ any duty

to act in good faith is contractual in nature and its breach does not amount to an independent tort.” UMLIC, 176

S.W.3d at 612 (citations omitted). Accordingly, there is no duty of care that would support a claim of negligence by

the plaintiff against the defendants because any duty to act in good faith is solely premised upon the Notes, Deeds of

Trust and/or Forbearance Agreements.

losses. Id. There are no pleadings that evinces an independent and separate claim for

damages beyond the economic losses. Id.

3. The Plaintiff’s Claims for Duress and Economic Duress

The plaintiff further asserts that he has suffered “duress and economic duress” due

to “threats, bad acts, fraud and deception” and that his “free agency [was destroyed and]

left him at the Lender’s mercy, without a present means for protection.” (Dkt. No. 20 at ¶

109.). Under Texas law, economic duress includes: (1) a threat to do something which a

party threatening has no legal right to do; (2) an illegal exaction or instance of fraud or

deception; and (3) imminent restraint sufficient to destroy free agency without means or

protection. King v. Bishop, 879 S.W.2d 222, 223 – 24 (Tex. App.---Houston [14th Dist.],

May 19, 1994). Once again, the plaintiff’s allegations are insufficient to state a claim

beyond a claim for economic losses. Thus, the defendants are entitled to a dismissal of

the plaintiff’s claim for economic duress.

4. The Plaintiff’s Claim for Declaratory Relief

6 “To prevail on a fraud claim under Texas law, a plaintiff must prove that (1) the defendant made a material

representation that was false; (2) the defendant knew the representation was false or made it recklessly as a positive

assertion without any knowledge of its truth; (3) the defendant intended to induce the plaintiff to act upon the

representation; (4) the plaintiff actually and justifiably relied upon the representation; and (5) the plaintiff thereby

suffered an injury.” Felder v. Countrywide Home Loans, No. H-13-0282, 2013 WL 6805843, *19 - 20 (S.D. Tex.

Dec. 20, 2013) (citing Ernst & Young, L.L.P. v. Pacific Mut. Life. Ins. Co., 51 S.W.2d 573, 577 (Tex. 2001)).

Further, “Rule 9(b) requires that plaintiffs plead enough facts to illustrate ‘the ‘who, what, when, where, and how’ of

the alleged fraud.’” Carroll v. Fort James Corp., 470 F.3d 1171, 1174 (5th Cir. 2005) (citing Williams v. Bell

Helicopter Textron, Inc., 417 F.3d 450, 453 (5th Cir. 2005) (quoting United States ex rel. Thompson v.

Columbia/HCA Healthcare Corp., 125 F.3d 899, 903 (5th Cir. 1997)). Here, the plaintiff’s fraud claim also fails for

lack of specificity. Indeed, the plaintiff has not only failed to plead the “time, place, and contents of the false

representations” but he has also failed to provide the identity of the individuals making these misrepresentations or

supplying the bad information. Shushany v. Allwaste, Inc., 992 F.2d 517, 520 (5th Cir. 1993) (citing Tel–Phonic

Services, Inc. v. TBS Int'l, Inc., 975 F.2d 1134, 1139 (5th Cir. 1992) (“At a minimum, Rule 9(b) requires allegations

of the particulars of time, place, and contents of the false representations, as well as the identity of the person

making the misrepresentation and what he obtained thereby.”)).

Lastly, the plaintiff seeks a declaration from this Court that the Forbearance

Agreements are null and void and, therefore, the parties should be returned to “their

status quo position” prior to the Agreements. (See Dkt. No. 20 at 41 — 42.). Declaratory

relief, however, is a form of relief grounded on underlying claims. See Sid Richardson

Carbon & Gasoline Co. v. Interenergy Res., Ltd., 99 F.3d 746, 752 n. 3 (5th Cir. 1996)

(reasoning that declaratory relief is a procedural device and does not establish any

substantive rights or causes of action). Because there is no viable underlying claim,

declaratory relief is not a basis for relief. Therefore, the plaintiffs substantive claims for

relief fail, the plaintiff's claim for declaratory relief is dismissed.

V. CONCLUSION

Based on the foregoing, the defendants’ motions to dismiss are GRANTED. All

other relief not expressly granted is hereby DENIED.

It is so Ordered.

SIGNED on this 20" day of May, 2020.

KennethM.Hoyt ——sts—CS~—S

United States District Judge

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