     Case: 15-11028      Document: 00513572559         Page: 1    Date Filed: 06/29/2016




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                          United States Court of Appeals
                                                                                   Fifth Circuit

                                                                                 FILED
                                    No. 15-11028                             June 29, 2016
                                  Summary Calendar
                                                                            Lyle W. Cayce
                                                                                 Clerk
LAURA LEE MASTRONARDI, formerly known as Laura Lee Sawyer;
BRENTON JAMES MASTRONARDI,

              Plaintiffs - Appellants

v.

WELLS FARGO BANK, NATIONAL ASSOCIATION; HECTOR ESTRADA;
MEGAN MARIN,

              Defendants - Appellees


                   Appeal from the United States District Court
                        for the Northern District of Texas
                              USDC No. 4:15-CV-452


Before HIGGINBOTHAM, ELROD, and SOUTHWICK, Circuit Judges.
PER CURIAM: *
       The    district   court    dismissed     Laura     Lee    and    Brenton          James
Mastronardi’s breach of contract,             conspiracy, fraud, and fraudulent
inducement claims against Wells Fargo Bank and two bank employees. We
AFFIRM.




       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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: 15-11028   Document: 00513572559    Page: 2   Date Filed: 06/29/2016



                                No. 15-11028
                FACTS AND PROCEDURAL BACKGROUND
      In 2012, Laura Lee and Brenton James Mastronardi defaulted on the
loan on their home in Fort Worth, Texas. Wells Fargo Bank, the mortgagee,
enrolled the Mastronardis in a forbearance plan to reduce their monthly
payments for one year. The Mastronardis alleged that Wells Fargo agreed to
modify their loan when the plan ended but later reneged. The Mastronardis
further alleged that the denial of their loan modification application was the
result of a conspiracy between Wells Fargo and two of its employees, Hector
Estrada and Megan Marin, to lose and refuse to process the documentation
necessary to complete the transaction. After Wells Fargo began the foreclosure
process, the Mastronardis filed this lawsuit in Texas state court alleging
breach of contract, conspiracy, fraud, and fraudulent inducement claims
against Wells Fargo, Estrada, and Marin (collectively, “the defendants”).
      The defendants removed the case on diversity grounds under 28 U.S.C.
§ 1332. They argued that Wells Fargo’s principal place of business is South
Dakota, and Estrada’s and Marin’s Texas domiciles should be disregarded
because the employees were “nominal parties . . . improperly joined.” The
Mastronardis countered that they stated viable fraud and conspiracy claims
against Estrada and Marin and moved to remand. The district court held
Estrada and Marin were improperly joined, dismissed the claims against them,
and denied the motion to remand. The district court later dismissed the claims
against Wells Fargo with prejudice pursuant to Federal Rule of Civil Procedure
41(b) for failure to prosecute. The Mastronardis timely appealed.


                                DISCUSSION
I.    Fraudulent Joinder
      The Mastronardis first contend the district court erred in analyzing the
sufficiency of their fraud and conspiracy claims against Estrada and Marin
                                      2
      Case: 15-11028     Document: 00513572559        Page: 3    Date Filed: 06/29/2016



                                     No. 15-11028
under the equivalent of the federal pleading standard instead of Texas’s more
lenient “notice” pleading standard. The district court concluded that a recent
amendment to the Texas Rules of Civil Procedure made the state’s “failure-to-
state-a-claim rule . . . substantially the same as the federal rule . . . .” The
Mastronardis concede on appeal that their complaint “may not ‘meet . . . federal
pleading requirements . . . .’”
       Under the fraudulent joinder doctrine, a district court may dismiss a
nondiverse defendant who is made a party in order to defeat federal
jurisdiction. Flagg v. Stryker Corp., 819 F.3d 132, 136–37 (5th Cir. 2016) (en
banc). One of the ways a defendant may establish improper joinder is by
showing “there is no possibility of recovery by the plaintiff against [a
nondiverse] defendant, . . . mean[ing] that there is no reasonable basis for the
district court to predict that the plaintiff might be able to recover against [a
nondiverse] defendant.” 1 Smallwood v. Ill. Cent. R.R., 385 F.3d 568, 573 (5th
Cir. 2004) (en banc). Wells Fargo argues that the federal pleading standard
applies when a court considers whether a defendant is fraudulently joined.
The Mastronardis’ claims against Estrada and Marin are insufficiently pled
under either the federal standard or the revised Texas standard, which now
tracks the federal standard. See TEX. R. CIV. P. 91a.1; Wooley v. Schaffer, 447
S.W.3d 71, 75–76 (Tex. App.—Houston [14th Dist.] 2014, pet. denied).


II.    Rule 41(b) Dismissal
       The Mastronardis next argue that the district court abused its discretion




       1 The Mastronardis also argue that the defendants did not “clearly and convincingly
prove[]” that Estrada and Marin were improperly joined. This argument was not presented
to the district court and is therefore waived. See Texas Commercial Energy v. TXU Energy,
Inc., 413 F.3d 503, 510 (5th Cir. 2005).
                                            3
      Case: 15-11028     Document: 00513572559         Page: 4    Date Filed: 06/29/2016



                                      No. 15-11028
in dismissing their claims against Wells Fargo with prejudice 2 for failure to
prosecute. See FED. R. CIV. P. 41(b). “A dismissal with prejudice is an extreme
sanction . . . .” Berry v. CIGNA/RSI-CIGNA, 975 F.2d 1188, 1191 (5th Cir.
1992) (quotation marks omitted). We will affirm a Rule 41(b) dismissal with-
prejudice for failure to prosecute where “(1) there is a clear record of delay or
contumacious conduct by the plaintiff, and (2) the . . . record shows that the
district court employed lesser sanctions that proved to be futile.” Id. (footnote
omitted). Affirmance also usually requires the existence of “at least one of
three aggravating factors” including delay caused by the plaintiff (not counsel),
“delay caused by intentional conduct[,]” or “actual prejudice to the defendant.”
Id.
       Here, after dismissing the claims against Estrada and Marin, the district
court ordered the Mastronardis to file an amended complaint alleging claims
against Wells Fargo “consistent with federal pleading requirements . . . .” The
Mastronardis requested a three-day extension, which was granted, but failed
to file an amended complaint. The district court ordered the Mastronardis to
“show cause by an appropriate written filing . . . why their claims in this action
should not be dismissed . . . .” The show cause order warned the Mastronardis
that failure to comply “may result in the imposition of sanctions,” including
dismissal. The Mastronardis again failed to file.
       The Mastronardis admit their violation of the court’s orders was
“inexcusable.”     They contend, however, that with-prejudice dismissal was
unwarranted because there was no inordinate delay in the case, nothing in the
record indicates their conduct was “willful and deliberate,” and the district



       2The final judgment does not state whether the lawsuit is dismissed with prejudice.
A Rule 41(b) dismissal for failure to prosecute, however, “is a complete adjudication on the
merits, and thus with prejudice” unless the order states otherwise. Edwards v. City of
Houston, 78 F.3d 983, 994 (5th Cir. 1996).
                                             4
    Case: 15-11028     Document: 00513572559       Page: 5   Date Filed: 06/29/2016



                                  No. 15-11028
court failed to consider imposing a lesser sanction.
      While there is no evidence of intentional conduct in the record, the
Mastronardis and their counsel offered no explanation in their motion for
reconsideration for their failure to follow the district court’s orders. They also
do not provide any explanation on appeal except that their conduct was caused
by the “inadvertence” of their attorney. We have held that there was no abuse
of discretion in a Rule 41(b) dismissal with prejudice when a plaintiff provided
no explanation for his inaction on a case. Dillon v. Diamond Offshore Mgmt.
Co., No. 02-40064, 2002 WL 1940080, at *1 (5th Cir. July 23, 2002).               A
plaintiff’s failure to give a meaningful explanation for failure to comply with a
court order to file an amended complaint by a certain date may by itself justify
a dismissal. Here, though, the district court first imposed a lesser penalty
through a show-cause order, warning the Mastronardis that failure to respond
to that order could result in dismissal. See Callip v. Harris Cnty. Child Welfare
Dep’t, 757 F.2d 1513, 1521 (5th Cir. 1985) (providing that an “explicit
warning[]” is a lesser sanction than dismissal).
      On these facts, the district court did not abuse its discretion in
dismissing the Mastronardis’ case with prejudice.
      AFFIRMED.




                                        5
