     Case: 18-10867      Document: 00514914797         Page: 1    Date Filed: 04/12/2019




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT


                                      No. 18-10867                 United States Court of Appeals
                                                                            Fifth Circuit

                                                                          FILED
                                                                      April 12, 2019
BRUCE W. BOWMAN, III; PAMELA J. BOWMAN,
                                                                     Lyle W. Cayce
              Plaintiffs–Appellants                                       Clerk


v.

CITIMORTGAGE, INCORPORATED.

              Defendant–Appellee




                   Appeal from the United States District Court
                        for the Northern District of Texas
                             USDC No. 3:14-CV-4036




Before JOLLY, COSTA, and ENGELHARDT, Circuit Judges.
PER CURIAM:*
       This case arises from a foreclosure by CitiMortgage on the Bowmans’
home. The district court granted CitiMortgage’s motion to dismiss for failure
to state a claim and dismissed the Bowmans’ Fourth Amended Complaint with
prejudice, denying their motion for leave to amend. The district court also
granted CitiMortgage’s motion for summary judgment on the judicial

       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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. 18-10867

foreclosure claim. We agree with the district court’s analysis and therefore
AFFIRM.
                                      I.
      In February 2007, the Bowmans executed a $975,000 Texas Home
Equity Note. They also executed a security instrument that allowed
CitiMortgage to accelerate the note and to foreclose if the Bowmans defaulted.
CitiMortgage has been the servicer of the loan since 2007. In October 2010, the
Bowmans defaulted on the loan. CitiMortgage sent notice of default as well as
demand for cure and then initiated foreclosure proceedings. The Bowmans
requested hardship assistance and had many conversations with CitiMortgage
about possibly modifying the loan, but it was never modified. The Bowmans
filed the instant case in October 2014 after CitiMortgage again initiated
foreclosure proceedings.
      The Bowmans originally sued in state court for negligence, intentional
and negligent misrepresentation, and breach of fiduciary duty. CitiMortgage
removed the case to federal court on diversity jurisdiction grounds.
CitiMortgage then moved to dismiss under Federal Rule of Civil Procedure
12(b)(6). The Bowmans filed the First Amended Complaint, adding several new
claims and rendering that motion moot. CitiMortgage filed a counterclaim for
judicial foreclosure and then moved for summary judgment. CitiMortgage
moved to dismiss all the claims in the First Amended Complaint, which the
district court granted, without prejudice. The district court directed the
Bowmans to replead and also required them to submit a synopsis explaining
how the new complaint overcame the grounds for dismissal laid out by the
district court.
      The Bowmans filed the Second Amended Complaint but did not address
the deficiencies in the First Amended Complaint. They added a new cause of


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action under the Texas Debt Collection Act (TDCA). Tex. Fin. Code §§392.301–
392.404. Additionally, the synopsis did not actually address the reasons the
new complaint supposedly overcame the grounds for dismissal and instead
addressed a case the Bowmans asserted was relevant to their new TDCA
claims. The district court dismissed the Second Amended Complaint under
Federal Rule of Civil Procedure 41(b) because the Bowmans ignored the court’s
directions. The Bowmans sought leave to amend and submitted the Third
Amended Complaint.
      The district court granted leave to amend but confined the amendment
to the TDCA claims. Because the Third Amended Complaint included other
claims, the Bowmans filed a Fourth Amended Complaint, which is the
operative complaint. The district court directed CitiMortgage to move for
summary judgment rather than to dismiss for failure to state a claim.
Therefore, CitiMortgage moved for summary judgment. However, after
reviewing the motion, the district court entered an electronic order that the
claims would be more appropriately resolved under Rule 12(b)(6). The district
court stated that CitiMortgage had already challenged the claims in their
summary judgment briefing, and gave the Bowmans a chance to explain “why
their TDCA claim should not be dismissed.” The Bowmans responded but did
not fully address the arguments that the court highlighted. CitiMortgage then
replied. CitiMortgage also moved for summary judgment on its counterclaim
of judicial foreclosure.
      The district court dismissed the Fourth Amended Complaint with
prejudice for failure to state a claim and granted summary judgment on
CitiMortgage’s counterclaim for judicial foreclosure.




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                                                  II.
                                                  A.
        This court reviews de novo a district court’s dismissal under Rule
12(b)(6) for failure to state a claim. Carroll v. Fort James Corp., 470 F.3d 1171,
1173–74 (5th Cir. 2006). When reviewing a Rule 12(b)(6) motion to dismiss,
“[t]he court accepts all well-pleaded facts as true, viewing them in the light
most favorable to the plaintiff.” In re Katrina Canal Breaches Litig., 495 F.3d
191, 205 (5th Cir. 2007). A plaintiff must file a complaint that “state[s] a claim
to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007). Plausibility must be more than a mere “possibility that a defendant
has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
        In their Fourth Amended Complaint, the Bowmans make claims under
the TDCA without citing the appropriate sections of the statute for each claim.
CitiMortgage raised this issue, and the Bowmans responded that they provided
enough information for CitiMortgage to figure out which provisions it violated.
As the district court reasoned, this is insufficient to provide fair notice to the
defendant under Federal Rule of Civil Procedure 8(a). The district court
referenced multiple cases regarding the TDCA and the need to connect factual
allegations to specific provisions. 1 Despite multiple chances to clarify their
TDCA claims, the Bowmans failed to do so. Instead they asserted that they
should not be required to clarify the provisions that apply. The Bowmans did


1 See Massaquoi v. LoanCare, LLC, No. 4:17-CV-00478-O-BP, 2017 WL 4326691, at *2 (N.D. Tex. Sept.
13, 2017) (“[V]aguely referring to sections or provisions of the Texas Debt Collection Act is not a
sufficient pleading to overcome dismissal under Rule 12(b)(6).”); O’Neill v. CitiMortgage, Inc., No. 413-
CV-656-O, 2014 WL 1199338, at *4 (N.D. Tex. Mar. 24, 2014) (dismissing TDCA claim because the
plaintiffs “failed to identify a specific provision of the TDCA that Defendant allegedly violated”);
Aguirre v. Nationstar Mortg. LLC, No. CIV.A. H-13-3199, 2014 WL 125957, at *3 (S.D. Tex. Jan. 13,
2014) (same); Birdow v. Allen, No. A-13-CV-709-LY, 2013 WL 4511639, at *3 (W.D. Tex. Aug. 23, 2013)
(same); Platero v. Bank of Am., N.A., No. 3:11-CV-3421-M, 2012WL 2368465, at *3 (N.D. Tex. May 25,
2012) (same); cf. Kan v. OneWest Bank, FSB, 823 F. Supp. 2d 464, 471 (W.D. Tex. 2011) (finding that
attorney brought TDCA claim in bad faith because at “no point [did the plaintiff] make any effort to
connect his factual allegations to a specific section of the [TDCA]”).
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give several examples of which provisions they were referencing but failed to
tie each factual allegation to a provision of the law. The district court found
that “the Bowmans’ examples do not give CitiMortgage much more notice than
it had before because it is still unclear what TDCA sections the Bowmans are
relying on.” The district court noted that other courts sometimes “parse
through TDCA claims themselves or allow amendments,” but declined to do so
because of the multiple chances to amend that the Bowmans had already
received.
      Denial of leave to amend is reviewed for abuse of discretion. Carroll, 470
F.3d at 1173–74. Abuse of discretion is a deferential standard of review and
“[t]he district court properly exercises its discretion under Rule 15(a)(2) when
it denies leave to amend for a substantial reason, such as undue delay,
repeated failures to cure deficiencies, undue prejudice, or futility.” U.S. ex rel.
Spicer v. Westbrook, 751 F.3d 354, 367 (5th Cir. 2014). The district court gave
the Bowmans multiple chances to amend their complaint, as well as other
opportunities to address deficiencies. Then dismissal for futility and failure to
cure deficiencies was not an abuse of discretion.
                                        B.
      This court reviews the district court’s grant of a motion for summary
judgment de novo. Data Specialties, Inc. v. Transcon. Ins. Co., 125 F.3d 909,
911 (5th Cir. 1997). Summary judgment is appropriate when “the movant
shows that there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a). In order “[t]o
foreclose under a security instrument in Texas with a power of sale, the lender
must demonstrate that: (1) a debt exists; (2) the debt is secured by a lien
created under Art. 16, § 50(a)(6) of the Texas Constitution; (3) plaintiffs are in
default under the note and security instrument; and (4) plaintiffs received


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notice of default and acceleration.” Huston v. U.S. Bank Nat. Ass'n, 988 F.
Supp. 2d 732, 740 (S.D. Tex. 2013), aff'd, 583 F. App'x. 306 (5th Cir. 2014); Tex.
Prop. Code § 51.002. The Bowmans do not contest any of the elements but
argue that there is a genuine dispute of material fact about CitiMortgage’s
authority to foreclose.
      First, we address an evidentiary challenge. The Bowmans challenge the
affidavits that the district court considered. The people who offered the
declarations and affidavits at issue are Linda R. Dominguez, an assistant
officer in legal support at CitiMortgage, and Becky Howell, the executive vice
president for BDF Holdings, LP (an affiliated service provider for
CitiMortgage’s foreclosure counsel).
      Federal Rule of Civil Procedure 56(c)(4) states that “[a]n affidavit or
declaration used to support or oppose a motion must be made on personal
knowledge.” This court has “repeatedly held that an affidavit does not meet
this requirement simply because the affiant states that her conclusions are
based on personal knowledge. Rather, the affiant must provide the district
court with sufficient information to allow the latter to conclude that the
affiant's assertions are indeed based on such knowledge.” Meadaa v. K.A.P.
Enters., L.L.C., 756 F.3d 875, 881 (5th Cir. 2014). Personal knowledge can be
“demonstrated by showing that the facts stated reasonably fall within the
sphere of responsibility of the affiant as a corporate employee.” DIRECTV, Inc.
v. Budden, 420 F.3d 521, 530 (5th Cir. 2005). Personal knowledge can be
“reasonably inferred.” Id.
      The Bowmans assert that neither Dominguez nor Howell demonstrated
personal knowledge. As the district court reasoned, Dominguez and Howell not
only attested that their conclusions were based on personal knowledge, they
also stated that they had knowledge of the relevant documents through their


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work, and additionally, their knowledge can be inferred from their positions.
This court agrees with the reasoning of the district court.
      As noted above, the only substantive argument that the Bowmans make
to defeat summary judgment is that there is an issue of material fact as to
whether CitiMortgage has the authority to foreclose. They argue that
CitiMortgage would have to be the holder of the note in order to foreclose,
relying on Martins v. BAC Home Loans Servicing, L.P. for this assertion. 722
F.3d 249, 254–55 (5th Cir. 2013). That case actually stands for the opposite
conclusion, holding that a “‘mortgage servicer’ may administer a foreclosure on
behalf of a mortgagee if ‘the mortgage servicer and the mortgagee have entered
into an agreement granting the current mortgage servicer authority to service
the mortgage,’ proper notice is given, and notice discloses that the mortgage
servicer represents the mortgagee.” Id. at 255 (quoting Tex. Prop. Code §
51.0025.). The Bowmans admitted in the pleadings and in their appellate brief
that CitiMortgage was their mortgage servicer (“CitiMortgage, the undisputed
servicer on the Bowmans’ loan”). The Bowmans attempt to now challenge that
fact, but as a judicial admission, their previous statements are “conclusively
binding.” White v. ARCO/Polymers, Inc., 720 F.2d 1391, 1396 (5th Cir. 1983).
The Bowmans also argue that CitiMortgage did not produce a servicing
agreement that would prove it has permission to foreclose. However, the
Property Code does not have a specific requirement that a servicing agreement
be produced. Additionally, CitiMortgage is indeed the mortgage servicer, as
admitted by both parties and as evidenced by the letter notifying the Bowmans
that CitiMortgage was the servicer. Moreover, the case law makes it clear that
a mortgage servicer has authority to foreclose. See Flowers v. Deutsche Bank
Nat’l Tr. Co., 614 F. App’x. 214, 216 (5th Cir. 2015) (“Under Texas Property




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Code §§ 51.002, 51.0025, the mortgagee or mortgage servicer may foreclose
upon the property.”).
                                           III.
      For the aforementioned reasons, we concur with the reasoning of the
district court and AFFIRM.




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