## Facts

- Michael and Tracy Allison owned a home in Bridge City, Texas, where they lived with their three children, including one disabled child.
- The Allisons obtained a mortgage loan from Chase Home Finance LLC in 2007.
- In September 2008, Hurricane Ike flooded the property and, according to the Allisons, destroyed their home and business.
- The Allisons alleged they continued making mortgage payments while recovering from the storm, exhausting their savings, but later fell behind on payments in 2009.
- Chase allegedly told the Allisons orally that they could enter a hurricane-victim mortgage-modification program, but only if they first became two months delinquent.
- Relying on that representation, the Allisons alleged they stopped paying for two months and submitted the required modification paperwork.
- Over roughly the next sixteen months, the Allisons alleged Chase repeatedly lost, mishandled, or restarted their paperwork submissions and never completed the modification process.
- During the same period, the Allisons alleged they received foreclosure-related notices but were told those notices were mistakes and that the modification was still in progress.
- Chase later informed the Allisons that the loan had been transferred to J.P. Morgan Chase Bank, N.A.
- The Allisons alleged Chase then pursued an eviction action against them, and they contended Chase lacked authority to do so after transferring the mortgage.
- The Allisons sued Chase Home Finance and J.P. Morgan Chase Bank in Texas state court asserting many Texas contract, tort, and statutory claims and seeking damages and injunctive relief; defendants removed the case to federal court and moved to dismiss under Rule 12(b)(6).

## Issues

1. Whether the Allisons pleaded sufficient nonconclusory facts to state plausible Texas-law claims arising from alleged oral promises and servicing conduct connected to a Hurricane Ike loan-modification process and subsequent foreclosure/eviction activity.
2. Whether the fraud-based theories were pleaded with the particularity required by Federal Rule of Civil Procedure 9(b).
3. Whether the pleadings supported a fiduciary-duty relationship between a mortgage lender/servicer and borrowers under Texas law.
4. Whether the petition adequately alleged the elements of the many additional tort and statutory claims asserted beyond contract/estoppel/misrepresentation/DTPA and nuisance.

## Decision

- Defendants’ Rule 12(b)(6) motion was granted as to all causes of action except: breach of contract, promissory estoppel, negligent misrepresentation, private nuisance, and a Texas Deceptive Trade Practices Act (DTPA) claim.
- Those five claims remained pending.
- All other asserted causes of action were dismissed with prejudice for failure to state a claim.

## Legal Principles

- On a Rule 12(b)(6) motion, the court accepts well-pleaded facts as true but disregards legal conclusions and requires enough factual matter to make the claim plausible on its face.
- In diversity cases, state law supplies the elements of Texas contract, tort, and statutory causes of action, while federal pleading rules govern how those elements must be alleged.
- Claims sounding in fraud must satisfy Rule 9(b) by pleading the “who, what, when, where, and how” of the alleged misrepresentation or concealment.
- Under Texas law, a typical lender/servicer–borrower relationship is an arm’s-length creditor–debtor relationship and does not create fiduciary duties absent special facts showing a relationship of trust beyond the ordinary loan context.
- Promissory estoppel requires allegations of (i) a promise, (ii) foreseeable reliance, and (iii) substantial reliance to the plaintiff’s detriment; negligent misrepresentation requires allegations that false information was supplied for guidance in business, without reasonable care, causing justifiable reliance and pecuniary loss.
- A DTPA claim requires allegations supporting “consumer” status (seeking or acquiring goods or services) and a deceptive, misleading, or unconscionable act tied to those goods or services; at the pleading stage, sufficient factual allegations can allow the claim to proceed even if defendants dispute consumer status or causation.
- Claims such as conversion, theft liability, defamation, malicious prosecution, and similar tort theories require specific factual allegations for each element; conclusory repackaging of a loan-servicing dispute into multiple tort labels is insufficient.

## Conclusion

In this Eastern District of Texas decision on a Rule 12(b)(6) motion, the court held that the Allisons’ Hurricane Ike mortgage-modification allegations plausibly supported only five Texas-law theories—breach of contract, promissory estoppel, negligent misrepresentation, private nuisance, and a DTPA claim—while dismissing the remaining contract, tort, and statutory claims with prejudice due to missing elements, lack of required pleading detail (including Rule 9(b) where applicable), or legal unavailability on the facts alleged.


Allison v. J.P. Morgan Chase Bank, 2012 WL 4633177, 2012 U.S. Dist. LEXIS 142522 (2012)