     Case: 14-20019      Document: 00512805760         Page: 1    Date Filed: 10/16/2014




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT

                                                                         United States Court of Appeals
                                                                                  Fifth Circuit
                                    No. 14-20019                                FILED
                                  Summary Calendar                       October 16, 2014
                                                                           Lyle W. Cayce
                                                                                Clerk
ROGER LAW,

                                                 Plaintiff-Appellant

v.

OCWEN LOAN SERVICING, L.L.C.,

                                                 Defendant-Appellee



                   Appeal from the United States District Court
                        for the Southern District of Texas
                             USDC No. 4:13-CV-2172


Before REAVLEY, DENNIS, and SOUTHWICK, Circuit Judges.
PER CURIAM: *
       Roger Law appeals the dismissal of his claims arising out of a foreclosure
on his property. He also argues that he should have been allowed to amend
his complaint in lieu of its dismissal. We AFFIRM the dismissal, thereby
denying Law’s request for a remand and leave to amend.



       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
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                                         No. 14-20019

                  FACTS AND PROCEDURAL BACKGROUND
       In September 2005, Roger Law purchased property located in Missouri
City, Texas for $284,800. He financed the purchase through a promissory note
made payable to AAMES Funding Corporation. As security for the note, Law
executed a purchase money deed of trust encumbering the property. The deed
of trust provided that, should Law fail to make payments on the note when
due, the servicer could enforce the deed of trust by selling the property in
accordance with the law and the provisions set out in the deed of trust.
       After Ocwen Loan Servicing, L.L.C. became the servicer of Law’s note in
2010, Law contacted Ocwen to request a loan modification because he was
having difficulty making his monthly payments. In January 2011, Ocwen sent
Law a modification agreement that Ocwen had not signed. Acceptance was
conditioned upon Law’s faxing a signed copy of the agreement to Ocwen and
making a down payment by February 3, 2011. Law signed the agreement on
February 7, and faxed it to Ocwen on February 9. He made the down payment
on February 8.
       In April 2012, Law brought suit against Ocwen after it initiated
foreclosure proceedings. Law asserted causes of action for violations of the
Texas Property Code, breach of contract, violations of the Real Estate
Settlement Procedures Act (“RESPA”), and negligence. 1                   He obtained a
temporary restraining order against Ocwen in May 2012. In August 2013,
Ocwen moved to dismiss the claims under Rule 12(b)(6). The district court
granted the motion in December 2013. Law timely appealed to this court,
arguing that his pleadings were sufficient to survive dismissal and, in the
alternative, that he should be granted leave to amend his complaint.


       1Law also claimed violations of the Texas Debt Collection Practices Act and requested
injunctive relief. He does not contest the dismissal of these claims on appeal.
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                                     DISCUSSION
       We review a dismissal under Rule 12(b)(6) de novo, “accepting all well-
pleaded facts as true and viewing those facts in the light most favorable to the
plaintiff.” Stokes v. Gann, 498 F.3d 483, 484 (5th Cir. 2007). A pleading must
contain “a short and plain statement of the claim showing that the pleader is
entitled to relief.” FED. R. CIV. P. 8(a)(2). This does not require “‘detailed
factual allegations,’ but it demands more than an unadorned, the-defendant-
unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A pleading will
be judged insufficient if it offers “a formulaic recitation of the elements of a
cause of action” or “a naked assertion” without “further factual enhancement.”
Twombly, 550 U.S. at 555, 557. 2
I.     Texas Property Code § 51.002
       Law argues that Ocwen violated the Texas Property Code’s notice
provisions regarding foreclosure. Those provisions require a mortgagee to: (1)
notify the mortgagor of a default and afford him 20 days to cure and (2) notify
the mortgagor at least 21 days before a foreclosure sale. TEX. PROP. CODE §
51.002(b)(3), (d).
       Law asserts that foreclosure was “premature” because he “raised issues
regarding the executed modification agreement and escalations in his escrow
account . . . .” The Property Code’s notice requirements, however, make no
mention of a mortgagee’s duty to forestall foreclosure so long as the mortgagor


       2 On appeal, Law asserts various legal theories and factual allegations in support of
his claims that were not expressed in his complaint. We decline to consider them. Review of
a Rule 12(b)(6) dismissal is, by its very nature, limited to the allegations and theories set
forth in the complaint that the district court had before it when granting the motion to
dismiss. Moreover, this approach accords with our general practice of not considering issues
raised for the first time on appeal. See Celanese Corp. v. Martin K. Eby Const. Co., 620 F.3d
529, 531 (5th Cir. 2010).
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seeks a modification. We also see no basis for reading such requirements into
the Property Code.
        The Property Code provides debtors an opportunity to cure a default
after receiving notice. Law does not allege that Ocwen failed to provide proper
notices, that his loan was not in default, or that he attempted to cure his
default. Consequently, Law has not alleged facts demonstrating that he is
entitled to relief under the Texas Property Code.
II.     Breach of Contract
        Law asserts numerous grounds for breach of contract. These include
Ocwen’s alleged failure to honor the loan modification proposal and its alleged
failure to comply with United States Department of Housing and Urban
Development (“HUD”) and Home Affordable Modification Program (“HAMP”)
regulations. We examine each of these claims.
      a. Loan Modification Agreement
        To prove breach, a party must first demonstrate the existence of a valid
contract. Mullins v. TestAmerica, Inc., 564 F.3d 386, 418 (5th Cir. 2009) (citing
Aguiar v. Segal, 167 S.W.3d 443, 450 (Tex. App.—Houston [14th Dist.] 2005,
pet. denied)). It follows that, to prove breach of a modified contract, a party
must first demonstrate the existence of a valid modification. In his complaint,
Law maintains that Ocwen breached the February 2011 loan modification
agreement. For two reasons, we conclude that the loan modification agreement
was ineffective. Ocwen therefore could not have breached the agreement.
        First, to accept Ocwen’s loan modification proposal, Law was required to
comply with all conditions placed upon the time and manner of acceptance. See
Padilla v. LaFrance, 907 S.W.2d 454, 460 (Tex. 1995).          Those conditions
included Law’s signing and faxing the agreement to Ocwen and making a down
payment by February 3, 2011. Law, however, did not sign the agreement until

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February 7, and he did not fax the agreement to Ocwen until February 9.
Furthermore, he did not send the required payment until February 8. Because
Law failed to meet these conditions, we conclude that he never accepted
Ocwen’s offer to modify the loan.
      Second, the agreement did not satisfy the Texas Statute of Frauds, which
requires that certain contracts be: (1) reduced to writing and (2) signed by the
party to be bound by the agreement. TEX. BUS. & COM. CODE § 26.01(a). It is
undisputed that Ocwen did not sign the proposed modification agreement.
Thus, the only question is whether the modification agreement was subject to
the Statute of Frauds. In Texas, an agreement materially altering a contract
must satisfy the Statute of Frauds when the underlying contract was subject
to the Statute of Frauds. See Hondo Oil & Gas Co. v. Tex. Crude Operator,
Inc., 970 F.2d 1433, 1438 (5th Cir. 1992); Garcia v. Karam, 276 S.W.2d 255,
257 (Tex. 1955). In Texas, loan agreements for sums exceeding $50,000 must
satisfy the Statute of Frauds. TEX. BUS. & COM. CODE § 26.02(b). Thus,
because the loan agreement between Law and Ocwen for $284,000 was
required to satisfy the Statute of Frauds, so too was the proposed modification
agreement. Because the loan modification proposal failed to do so, it was not
a valid contract upon which a claim of a breach can be based.
   b. HUD and HAMP Regulations
      We have previously held that the HUD Handbook does not afford a
private cause of action. Roberts v. Cameron-Brown Co., 556 F.2d 356, 360-61
(5th Cir. 1977). This circuit has not precedentially resolved whether there is a
private cause of action under the HAMP regulations. We have held in an
unpublished opinion that there is not. Pennington v. HSBC Bank USA, N.A.,
493 F. App’x 548, 552 (5th Cir. 2012) (citing Miller v. Chase Home Fin., LLC,
677 F.3d 1113, 1116 (11th Cir. 2012)). We need not answer that question here,

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because Law has not presented any argument to suggest that there is a private
right of action.
        Thus, in order to bring suit for violations of HUD or HAMP regulations,
Law must show that the regulations were incorporated into the deed of trust.
Law points to no language in the deed of trust that incorporates HAMP. With
regard to the HUD regulations, Law’s complaint states that “the Note and
Deed of Trust expressly provide that the acceleration and foreclosure on
plaintiff[’s] loan are subject to limitation through regulations promulgated by
the HUD Secretary.”        The only possible source of this contention is the
statement in the deed of trust that its provisions “shall not limit the
applicability of federal law to this Deed of Trust.” This language does not
mention the HUD regulations, much less “expressly” incorporate them, as the
complaint states. A deed of trust’s mere mention that federal law applies can
hardly be construed as affording a private cause of action under statutes that
do not provide one. As a result, Law could not assert claims for violations of
the HUD and HAMP regulations.
III.    Real Estate Settlement Procedures Act
        Law claims that Ocwen failed to provide him with notice that it had
acquired his loan from AAMES Funding Corporation.               Under RESPA, a
“transferee servicer to whom the servicing of any federally related mortgage
loan is assigned, sold, or transferred shall notify the borrower of any such
assignment, sale, or transfer.” 12 U.S.C. § 2605(c)(1). In order to recover for a
violation, a borrower must show “actual damages to the borrower as a result of
the [servicer’s] failure” to comply with RESPA. § 2605(f)(1).
        Law’s complaint, in addition to alleging a failure by Ocwen to give notice,
alleges that Law sustained harm because “this is his homestead and he will
lose all of the money previously invested in the property . . . .” Law does not,

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however, allege facts demonstrating that these damages were the result of
Ocwen’s failure to provide him with the required notice. He does not allege,
for example, that as a result of Ocwen’s failure to provide notice, he mistakenly
continued sending his payments to AAMES Funding Corporation rather than
sending them to Ocwen, resulting in foreclosure by Ocwen. Indeed, this did
not occur. Because Law alleged no facts upon which his injuries could be
viewed as resulting from Ocwen’s failure to provide him with notice under
RESPA, we conclude that the district court correctly dismissed his claim.
IV.    Negligence
       Law contends that Ocwen negligently breached various duties that it
owed to Law, including the duty to provide notice of a transfer, the duty to
manage its loans properly, the duty to provide proper notices prior to
foreclosure, and the duty to protect a mortgagor’s rights when he applies for a
loan modification.     For two reasons, we conclude that dismissal of Law’s
negligence claims was appropriate.
       First, the duties Law mentions appear to arise from the statutes upon
which he bases his other claims. More specifically, the duty to provide notice
of a transfer derives from RESPA; the duty to manage loans properly derives
from HUD regulations; the duty to provide proper notices before foreclosing
derives from the Texas Property Code; and the duty to protect a mortgagor’s
rights when he applies for a loan modification derives from the HAMP
regulations. Perhaps for this reason, Law begins his negligence claim by
reiterating his contention that the deed of trust incorporated the HUD
regulations, spends the bulk of his argument discussing perceived RESPA
violations, and never mentions specific provisions in the deed of trust or
common-law principles giving rise to the duties he claims Ocwen violated.
Therefore, because Ocwen’s negligence claims are, in essence, reiterations of

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his statutory claims, our grounds for affirming the district court as to the
statutory claims apply equally here.
      Second, even if we were to assume that the duties Law mentions arise
from the deed of trust, his negligence claims are barred by the economic loss
rule. Under this doctrine, “a claim sounds in contract when the only injury is
economic loss to the subject of the contract itself.” 1/2 Price Checks Cashed v.
United Auto. Ins. Co., 344 S.W.3d 378, 387 (Tex. 2011). In applying the rule,
courts consider whether the defendant’s conduct “would give rise to liability
independent of the fact that a contract exists between the parties.” Sw. Bell
Tel. Co. v. DeLanney, 809 S.W.2d 493, 494 (Tex. 1991). When no independent
basis for liability exists, the rule applies. Id. In this case, Law’s complaint
asserts no basis for the duties Ocwen owed to Law other than the deed of trust
and various statutes, the latter of which we have already addressed. Because
Law has not alleged non-economic damages resulting independently of the
deed of trust, the economic loss doctrine bars Law’s negligence claims.
V.    Leave to Amend
      As an alternative position, Law requests leave to amend his complaint
and also contends that the district court should have construed the new factual
allegations set forth in his response to Ocwen’s Rule 12(b)(6) motion as a
request for leave to amend. Under Rule 15(a), a court should “freely give leave
[to amend a complaint] when justice so requires.” FED. R. CIV. P. 15(a)(2).
Nevertheless, a party must “expressly request” leave to amend. United States
ex rel. Willard v. Humana Health Plan of Tex. Inc., 336 F.3d 375, 387 (5th Cir.
2003). “A party who neglects to ask the district court for leave to amend cannot
expect to receive such dispensation from the court of appeals.” Id. Although
this request need not be contained in a formal motion, “[a] bare request in an
opposition to a motion to dismiss – without any indication of the particular

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grounds on which the amendment is sought – does not constitute a motion
within the contemplation of Rule 15(a).” Id. (quotations and citation omitted).
      In Willard, we held the following language in a plaintiff’s response to a
Rule 12(b)(6) motion insufficient to constitute a request for leave to amend:
“[T]he only relief possibly available to [the defendant] at this stage of the case
is that [the plaintiff] replead.” Id. (quotations omitted). We have also held, in
an unpublished opinion, that a district court’s sua sponte discussion of whether
to allow a defendant to amend his complaint did not constitute a request by
the defendant for leave to amend. McClaine v. Boeing Co., 544 F. App’x 474,
478 (5th Cir. 2013).
      Law’s response to Ocwen’s motion to dismiss, while containing new
factual allegations, contained no language that might be construed as a request
for leave to amend his complaint, let alone express language requesting leave
and indicating the particular grounds on which the amendment was sought.
Moreover, the district judge did not discuss granting Law leave to amend at
any point. In short, there is nothing in the record that would allow us to
conclude that Law requested leave to amend his complaint prior to this appeal.
      Law cites several of our cases for the proposition that a claim raised for
the first time in response to a dispositive motion should be treated as a request
for leave to amend. See Stover v. Hattiesburg Pub. Sch. Dist., 549 F.3d 985,
989 n.2 (5th Cir. 2008); Sherman v. Hallbauer, 455 F.2d 1236, 1242 (5th Cir.
1972); Riley v. Sch. Bd. Union Parish, 379 F. App’x 335, 341 (5th Cir. 2010).
These cases, however, did not involve defendants who sought to raise new
factual allegations in response to motions to dismiss, as did Willard and
McClaine.   See Willard, 336 F.3d at 387; McClaine, 544 F. App’x at 478.
Instead, they involved defendants who sought to raise new claims in response
to motions for summary judgment. See Stover, 549 F.3d at 989 n.2; Sherman,

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455 F.2d at 1242; Riley, 379 F. App’x at 341. Because we are faced with the
former situation and not the latter, the cases cited by Law are inapposite.
Accordingly, we conclude that Law did not request leave to amend his
complaint at the district court and is not entitled to such relief from this court. 3
      AFFIRMED.




      3  Because we find that Law’s response to Ocwen’s Rule 12(b)(6) motion did not
constitute a request for leave to amend his petition, we do not consider whether an
amendment containing the additional factual allegations would be “futile” and thus within
the district court’s discretion to deny. See Rio Grande Royalty Co. v. Energy Transfer
Partners, L.P., 620 F.3d 465, 468 (5th Cir. 2010).
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