Turner v. NewRez LLC et al

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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
CHARLA TURNER,
Plaintiff,
v.
NEWREZ LLC d/b/a
SHELLPOINT MORTGAGE
SERVICING, et al.,
Defendants.
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Case No. 3:25-cv-01835-X-BT
FINDINGS, CONCLUSIONS, AND RECOMMENDATION
OF THE UNITED STATES MAGISTRATE JUDGE
Before the Court in this civil action arising out of an alleged wrongful
foreclosure is Plaintiff Charla Turner’s Motion to Remand to State Court (ECF No.
6) and Defendants’ Motion to Dismiss (ECF No. 10). For the reasons stated, the
District 	Judge 	should 	DENY 	Plaintiff’s 	Motion 	to 	Remand 	and 	GRANT
Defendant’s Motion to Dismiss.
Background
Procedural Background
Plaintiff Charla Turner, a Texas citizen, sued Defendants NewRez LLC d/b/a
Shellpoint Mortgage Servicing (NewRez), Specialized Loan Servicing LLC, Wells
Fargo Bank NA (Wells Fargo), and Kelly Porter (collectively, the “Defendants”) in
Texas state court. See Defs.’ Not. of Removal, Ex. A (ECF No. 1-2). In her state court
petition, Plaintiff asserts claims of wrongful foreclosure, violation of due process,
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and quiet title. Id. at 5, ¶¶ 19–21. Plaintiff also seeks injunctive relief to prevent
Defendants from foreclosing on certain real property located on Woodberry Drive
in Forney, Texas (the “Woodberry Property”). Id. at 3–4, ¶¶ 8–11; id. at 5, ¶ 22.
Defendants timely removed the case to this Court based on diversity jurisdiction.
See Defs.’ Not. of Removal (ECF No. 1).
Factual Background
In 2006, Plaintiff and her then-husband1 obtained a loan and executed a
deed of trust on the Woodberry Property that secured payment of the loan. See
Defs.’ Mot. to Dismiss, Ex. A (ECF No. 10-1) (deed of trust). The original
mortgagor, Option One Mortgage Corporation, assigned the beneficial interest in
the deed of trust to Wells Fargo. Id., Ex. B (ECF No. 10-2) (assignment).
Plaintiff has filed for bankruptcy many times. Pertinent here, Plaintiff filed
for voluntary bankruptcy in June 2020 under Chapter 13 of the United States
Bankruptcy Code. See id., Ex. E (ECF No. 10-5) (providing docket for bankruptcy
proceedings). Plaintiff executed a Chapter 13 plan the next month, agreeing to
surrender the Woodberry Property. Id., Ex. H, at 3–4 (ECF No. 10-8). In this plan,
Plaintiff surrendered the Woodberry Property to satisfy any claims asserted
against her. Id. at 4 (“[T]he surrender of the [Woodberry Property] will provide for
the payment of all or part of a claim . . . in the amount of the value given herein.”).
1 Plaintiff’s husband quitclaimed his interest in the Woodberry Property to Plaintiff
after their divorce. See Defs.’ Mot. to Dismiss, Ex. C (ECF No. 10-3) (quitclaim
deed).
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Later, Specialized Loan Servicing, a loan servicer for Wells Fargo, moved for
relief from the automatic stay on the Woodberry Property. Id., Ex. F (ECF No. 10-
6). On October 1, 2020, the bankruptcy court terminated the stay and explicitly
permitted Specialized Loan Servicing “to exercise any rights granted to it by the
parties’ contract documents with respect to the [Woodberry Property] including,
but 	not 	limited 	to, 	the 	execution 	of 	a 	non-judicial 	foreclosure 	sale 	of 	the
[Woodberry] Property.” Id., Ex. G, at 3 (ECF No. 10-7). The bankruptcy court
confirmed Plaintiff’s Chapter 13 plan on October 7, 2020. Id., Ex. I (ECF No. 10-
9).
Wells Fargo foreclosed on the Woodberry Property on December 3, 2024.
Id., Ex. J, at 3 (ECF No. 10-10). Yet Plaintiff continued to occupy the Woodberry
Property, 	claiming 	that 	Wells 	Fargo’s 	foreclosure 	came 	too 	late 	after 	the
bankruptcy judge lifted the stay. Defs.’ Not. of Removal, Ex. A, at 3–5, ¶¶ 9–18
(ECF No. 1-2). Plaintiff’s conduct has led to eviction proceedings against Plaintiff
and Plaintiff’s present civil suit against Defendants. See Defs.’ Mot. to Dismiss, Exs.
K & L (ECF Nos. 10-11 & 10-12) (state court judgments holding that Wells Fargo is
entitled to possession of the Woodberry Property).
Plaintiff now moves the Court to remand her case to state court because the
Court lacks complete diversity of citizenship due to nondiverse Defendant Porter
who is a “resident” of Texas. See Pl.’s Mot. to Remand at 2, ¶ 3(a) (ECF No. 6). In
response, Defendants argue that Defendant Porter was “fraudulently joined,” and
Plaintiff’s claims are subject to dismissal because the doctrine of judicial estoppel
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bars her claims; she fails to state a prima facie case for her wrongful disclosure,
due process, and quiet title claims; and Plaintiff has no right to any injunctive
relief. Defs.’ Mot. to Dismiss at 4–10 (ECF No. 10); see also Defs.’ Resp. at 1–2
(ECF No. 19). Because remand is inappropriate and Plaintiff’s claims are barred by
the 	doctrine 	of 	judicial 	estoppel, 	the 	Court 	need 	not 	address 	Defendants’
remaining arguments.
Legal Standards
Removal and Remand
“Federal courts are courts of limited jurisdiction. They possess only that
power authorized by Constitution and statute[.]” Kokkonen v. Guardian Life Ins.
Co. of Am., 511 U.S. 375, 377 (1994) (citations omitted). Thus, a court “must
presume” a suit lies outside its limited grant of jurisdiction, and the burden of
establishing jurisdiction lies with the party seeking to invoke the federal forum.
Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001). A defendant seeking
to remove a case to federal court satisfies her burden by showing a basis for federal
jurisdiction and that removal was proper. Manguno v. Prudential Prop. & Cas. Ins.
Co., 276 F.3d 720, 723 (5th Cir. 2002). “If at any time before final judgment it
appears that the district court lacks subject matter jurisdiction [of a removed case],
the case shall be remanded.” 28 U.S.C. § 1447(c); see also Exxon Mobil Corp. v.
Starr Indem. & Liab. Ins. Co., 716 F. App’x 349, 350–51 (5th Cir. 2018) (per
curiam). Moreover, any doubts about removal must be resolved against removal
and in favor of remand. Baylor Univ. Med. Ctr. v. Ark. Blue Cross Blue Shield, 331
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F. Supp. 2d 502, 508 (N.D. Tex. 2004) (quoting Cross v. Bankers Multiple Line
Ins. Co., 810 F. Supp. 748, 750 (N.D. Tex. 1992)).
Improper Joinder2
A federal court has diversity jurisdiction if the amount in controversy
exceeds $75,000 and all parties in the matter are completely diverse. 28 U.S.C.
§ 1332(a); Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). Complete diversity
requires that each plaintiff is completely diverse from each defendant. Caterpillar,
519 U.S. at 68. In other words, complete diversity means “all persons on one side
of the controversy must be citizens of different states than all persons on the other
side.” MidCap Media Fin., L.L.C. v. Pathway Data, Inc., 929 F.3d 310, 313 (5th
Cir. 2019) (cleaned up).
“The improper joinder doctrine constitutes a narrow exception to the rule of
complete diversity.” Cuevas v. BAC Home Loans Servicing, LP, 648 F.3d 242, 249
(5th Cir. 2011) (citing McDonal v. Abbott Labs., 408 F.3d 177, 183 (5th Cir. 2005)).
“To establish improper joinder, the removing party must demonstrate either: ‘(1)
actual fraud in the pleading of jurisdictional facts, or (2) [the] inability of the
plaintiff to establish a cause of action against the non-diverse party in state court.’”
Id. (quoting Smallwood, 385 F.3d at 573).
2 Defendants refer to improper joinder as “fraudulent joinder.” But because the
Fifth Circuit “adopt[ed] the term ‘improper joinder’ as being more consistent with
the statutory language than the term ‘fraudulent joinder,’” the Court uses the Fifth
Circuit’s “preferred” term “[a]lthough there is no substantive difference between
the two[.]” Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 571 n.1 (5th Cir. 2004)
(en banc).
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The 	test 	under 	the 	second 	prong 	is 	“whether 	the 	defendant 	has
demonstrated that there is no possibility of recovery by the plaintiff against an in-
state defendant,” meaning “there is no reasonable basis for the district court to
predict that the plaintiff might be able to recover against an in-state defendant.”
Smallwood, 385 F.3d at 573; accord Int’l Energy Ventures Mgmt., L.L.C. v. United
Energy Grp., Ltd., 818 F.3d 193, 200 (5th Cir. 2016). The “holistic approach to
removal mandates that the existence of even a single valid cause of action against
in-state defendants (despite the pleading of several unavailing claims) requires
remand of the entire case to state court.” Gray ex rel. Rudd v. Beverly Enters.-
Miss., Inc., 390 F.3d 400, 412 (5th Cir. 2004).
To determine whether the defendant has shown the plaintiff’s inability to
recover against the nondiverse defendant, courts conduct “a Rule 12(b)(6)-type
analysis, looking initially at the allegations of the complaint to determine whether,
under state law, the complaint states a claim against the in-state defendant.”
Larroquette v. Cardinal Health 200, Inc., 466 F.3d 373, 376 (5th Cir. 2006) (citing
Smallwood, 385 F.3d at 573). “Ordinarily, if a plaintiff can survive a Rule 12(b)(6)
challenge, there is no improper joinder.” Smallwood, 385 F.3d at 573. The court’s
“Rule 12(b)(6)-type analysis . . . is used to resolve the issue of jurisdiction, not
merits,” however, and when a court finds a party is improperly joined, dismissal
without prejudice is appropriate. Int’l Energy Ventures, 818 F.3d at 210.
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12(b)(6)
Under Rule 12(b)(6), the 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) (internal quotation marks and
citations omitted). To survive a Rule 12(b)(6) motion, therefore, a plaintiff's
complaint must contain sufficient factual matter to state a plausible claim for relief
on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “To be plausible,
the complaint’s ‘[f]actual allegations must be enough to raise a right to relief above
the speculative level.’” In re Great Lakes Dredge & Dock Co. LLC, 624 F.3d 201,
210 (5th Cir. 2010) (quoting Twombly, 550 U.S. at 555). This pleading standard
does not require “‘detailed factual allegations,’” but it does demand more than an
unadorned accusation devoid of factual support. Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Twombly, 550 U.S. at 555). “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.” Id. at
678 (citing Twombly, 550 U.S. at 556). “[A] formulaic recitation of the elements of
a cause of action will not do.” Twombly, 550 U.S. at 555 (citing Papasan v. Allain,
478 U.S. 265, 286 (1986)). “While legal conclusions can provide the framework of
a complaint, they must be supported by factual allegations.” Iqbal, 556 U.S. at 679.
When the facts do not permit the Court to infer more than the mere possibility of
misconduct, the complaint has stopped short of showing that the plaintiff is
plausibly entitled to relief. Id. at 678 (citing Twombly, 550 U.S. at 557).
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Analysis
Plaintiff requests that the Court remand this case because Defendant Porter
is a “resident” of Texas, and therefore, the parties are not completely diverse. Pl.’s
Mot. to Remand at 2, ¶ 3(a) (ECF No. 6). In response, Defendants contend that
Defendant Porter is improperly joined because Plaintiff has no possibility of
recovery against nondiverse Defendant Porter, and therefore she should be
disregarded for purposes of diversity jurisdiction. Defs.’ Resp. at 4–6 (ECF No. 19).
Defendants also separately move to dismiss Plaintiff’s Complaint under the
doctrine of judicial estoppel. Defs.’ Mot. to Dismiss at 4–6 (ECF No. 10). The Court
first addresses Plaintiff’s Motion to Remand.
Preliminary Matters
Before beginning its analysis, the Court takes judicial notice of Plaintiff’s
bankruptcy filings, state court documents, and the Kaufman County Appraisal
District records. In deciding a Rule 12(b)(6) motion, a court may not look beyond
the 	pleadings. 	Spivey 	v. 	Robertson, 	197 	F.3d 	772, 	774 	(5th 	Cir. 	1999).
“[D]ocuments that a defendant attaches to a motion to dismiss are considered part
of the pleadings if they are referred to in the plaintiff’s complaint and are central
to her claim.” Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498–99 (5th
Cir. 2000) (quoting Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429,
431 (7th Cir. 1993)). And “[t]here is nothing improper about the district court
considering the content of briefing that supports or opposes a motion under Rule
12(b)(6) when deciding such a motion.” Turnage v. McConnell Techns., Inc., 671
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F. App’x 307, 309 (5th Cir. 2016) (per curiam). “When matters outside the
pleadings are presented to the court in connection with a motion under Rule
12(b)(6), the motion must be treated as a Rule 56 motion for summary judgment
and appropriate notice given to the parties”; however, the United States Court of
Appeals for the Fifth Circuit has held “that briefs and oral arguments in connection
with the motion . . . are not considered matters outside the pleadings for purposes
of conversion.” Id. (cleaned up).
It is also “clearly proper in deciding a 12(b)(6) motion to take judicial notice
of matters of public record.” Norris v. Hearst Tr., 500 F.3d 454, 461 n.9 (5th Cir.
2007) (citing Cinel v. Connick, 15 F.3d 1338, 1343 n.6 (5th Cir. 1994)). This
includes 	filings 	from 	prior 	litigation, 	including 	bankruptcy 	and 	state 	court
proceedings, and county appraisal records. See Basic Cap. Mgmt., Inc. v. Dynex
Cap., Inc., 976 F.3d 585, 589 (5th Cir. 2020) (holding that a state court record is a
publicly available government filing that can be subject to judicial notice at the
motion to dismiss stage); Daniel v. Ocwen Loan Servicing LLC, 2019 WL 2719286,
at *4 (N.D. Tex. June 13, 2019) (Ray, J.) (taking judicial notice of bankruptcy
filings), appeal dismissed by 2020 WL 4592922 (5th Cir. Apr. 14, 2020); Claudio
D. v. Countrywide KB Home Loans, 2015 WL 5164812, at *5–6 (N.D. Tex. Sept. 1,
2015) (Kinkeade, J.) (same); Johnson v. Deutsche Bank Nat’l Trust Co., 2013 WL
3810715, at *5 (N.D. Tex. July 23, 2013) (Lindsay, J.) (same); Pinkerton v. Wal-
Mart Stores, Inc., 2020 WL 4339051, at *2 (N.D. Tex. July 28, 2020) (Kinkeade,
J.) (taking judicial notice of appraisal district records for property at issue). Thus,
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the Court takes judicial notice of the filings in the related state court proceedings,
see Defs.’ Mot. to Dismiss, Exs. K & L (ECF Nos. 10-11 & 10-12); Plaintiff’s
bankruptcy proceeding styled In re Charla Monique Harris-Agers, Case No. 20-
31620-mvl13, in the United States Bankruptcy Court for the Northern District of
Texas, Dallas Division; and the Kaufman County Central Appraisal District
records, see Mot. to Dismiss, Ex. M (ECF No. 10-13).
Plaintiff’s Motion to Remand
Defendants allege that nondiverse Defendant Porter is improperly joined
and therefore should be disregarded for purposes of diversity jurisdiction, because
“Plaintiff has no possibility of success on the merits against Ms. Porter.” Defs.’ Opp.
to Mot. to Remand at 4 (ECF No. 19). In her Complaint and Response to
Defendants’ Motion to Dismiss, Plaintiff makes the following allegations against
Porter:
i. 	“Porter 	or 	her 	representatives 	attempted 	to 	contact 	Plaintiff 	on 	two
occasions asking for permission to inspect the roof—indicating uncertainty
in possession and title status.” Defs.’ Not. of Removal, Ex. A, at 4, ¶ 15 (ECF
No. 1-2).
ii. 	“[E]mail 	communications 	showing 	that 	Defendant 	Kelly 	Anne 	Porter
attempted to reach [Plaintiff] directly.” Id. at 5, ¶ 18.
iii. 	In support of her Complaint, she attaches her own declaration, stating that
Porter “requested permission to have [Plaintiff’s] roof inspected.” Id., Supp.
Decl. of Charla Turner, at 23.
iv. 	“Plaintiff’s insurance company stopped a pending roof claim, stating the
property was now REO-owned and that Kelly Anne Porter was listed as the
new owner.” Resp. to Defs.’ Mot. to Dismiss at 4 (ECF No. 18).
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v. 	“A notice-to-vacate was physically posted on the front door. The posting was
linked to Porter’s known role and confirmed through a voicemail received
from her number.” Id.
vi. 	“Plaintiff received a text message from the roofing company, confirming
they were instructed to access the property for inspection on behalf of
[Porter].” Id.
vii. 	“Plaintiff recalls sending an email informing Porter that a bankruptcy case
was active at the time of her attempted possession and that no lawful
transfer had occurred. Plaintiff is actively retrieving a copy of this email for
the court.” Id. at 5.
Plaintiff does not elaborate on these allegations or connect these allegations
to any of her causes of action. And Defendants provided evidence proving that
Porter is not the owner of the Woodberry Property. See Mot. to Dismiss, Ex. M, at
2 (ECF No. 10-13) (attaching Kaufman County Appraisal District records for the
Woodberry Property). Rather, Wells Fargo owns the Woodberry Property and
Wells Fargo initiated foreclosure and eviction proceedings against Plaintiff. See id.,
Exs. K & L (ECF Nos. 10-11 & 10-12) (state court judgments finding in favor of Wells
Fargo).
Plaintiff fails to allege any specific facts connecting Porter to any cause of
action, let alone specific allegations of wrongdoing. See Guidry v. Bank of LaPlace,
954 F.2d 278, 281 (5th Cir. 1992) (“[I]n order to avoid dismissal for failure to state
a claim, a plaintiff must plead specific facts, not mere conclusory allegations.”)
(cleaned up); Phillips v. HSBC Mort. Servs., 2013 WL 12124324, at *1 (N.D. Tex.
June 13, 2013) (Means, J.) (dismissing plaintiff’s complaint because she failed “to
specifically allege any facts in support of the particular [claims] [p]laintiff has
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made against the . . . defendants”). “[E]ven the most sympathetic reading of
plaintiff’s pleadings uncover no theory and no facts that would subject [Porter] to
liability.” Jacquez v. Procunier, 801 F.2d 789, 791–92 (5th Cir. 1986).
As Plaintiff has no possibility of recovering against nondiverse Defendant
Porter, the District Judge should DENY Plaintiff’s Motion to Remand to State
Court.
Defendants’ Motion to Dismiss
Defendants contend that Plaintiff’s claims are subject to dismissal because
the doctrine of judicial estoppel bars her claims;3 she fails to state a prima facie
case for her wrongful disclosure, due process, and quiet title claims; and Plaintiff
is not entitled to any injunctive relief. Defs.’ Mot. to Dismiss at 4–10 (ECF No. 10).
Plaintiff does not substantively respond to Defendants’ arguments, and she does
not address Defendants’ assertion of judicial estoppel.
“Judicial estoppel is a common law doctrine that prevents a party from
assuming inconsistent positions in litigation.” Firefighters’ Ret. Sys. v. Grant
3 “Judicial estoppel is an affirmative defense.” Abreu v. Zale Corp., 2013 WL
1949845, at *1 (N.D. Tex. May 13, 2013) (Fitzwater, J.). Dismissal under Rule
12(b)(6) is normally inappropriate on an affirmative defense; however, “[i]f, 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, 305 F.
App’x 224, 227–28 (5th Cir. 2008) (per curiam). Here, the elements of judicial
estoppel appear on the face of Plaintiff’s Complaint and in court filings subject to
judicial 	notice. 	Therefore, 	judicial 	estoppel 	may 	be 	properly 	considered 	for
Defendants’ 	motion 	to 	dismiss. 	See 	Claudio 	D., 	2015 	WL 	5164812, 	at 	*8
(considering judicial estoppel on motion to dismiss); Daniel, 2019 WL 2719286, at
*3 (same).
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Thornton, LLP, 894 F.3d 665, 670 (5th Cir. 2018) (quoting In re Superior
Crewboats, Inc., 374 F.3d 330, 334 (5th Cir. 2004)). In the bankruptcy context,
“judicial estoppel must be applied in such a way as to deter dishonest debtors,
whose failure to fully and honestly disclose all their assets undermines the integrity
of the bankruptcy system, while protecting the rights of creditors to an equitable
distribution of the assets of the debtor’s estate.” Reed v. City of Arlington, 650 F.3d
571, 574 (5th Cir. 2011) (en banc).
Judicial estoppel requires: “(1) the party against whom judicial estoppel is
sought has asserted a legal position which is plainly inconsistent with a prior
position; (2) a court accepted the prior position; and (3) the party did not act
inadvertently.” Id. The Fifth Circuit has held that “[j]udicial estoppel is particularly
appropriate where . . . a party fails to disclose an asset to a bankruptcy court, but
then pursues a claim in a separate tribunal based on that undisclosed asset.”
Jethroe v. Omnova Sols., Inc., 412 F.3d 598, 600 (5th Cir. 2005).
1. 	Inconsistent Positions
Plaintiff’s inconsistent position relates to whether Defendants have a right
to foreclose on the Woodberry Property. “[T]he Bankruptcy Code and Rules
impose upon bankruptcy debtors an express, affirmative duty to disclose all assets,
including contingent and unliquidated claims.” In re Superior Crewboats, 374
F.3d at 335 (emphasis removed) (quoting In re Coastal Plains, Inc., 179 F.3d 197,
207–08 	(5th 	Cir. 	1999)). 	The 	duty 	of 	disclosure 	continues 	throughout 	the
bankruptcy proceeding and even after the debtor is discharged and the bankruptcy
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case is closed. Id.; see also E.E.O.C. v. Rock-Tenn Servs. Co., 901 F. Supp. 2d 810,
830 (N.D. Tex. 2012) (citing In re Coastal Plains, Inc., 179 F.3d at 207–08). Thus,
“if a litigant fails to disclose a pending or potential claim during a bankruptcy
proceeding and later attempts to pursue that claim in a court of law, then element
one of the test for judicial estoppel is met.” Claudio D., 2015 WL 5164812, at *9
(quoting Thompson v. Sanderson Farms, Inc., 2006 WL 7089989, at *3 (S.D.
Miss. May 31, 2006)).
Here, 	Plaintiff 	expressly 	surrendered 	the 	Woodberry 	Property 	in 	the
Chapter 13 plan but now challenges Wells Fargo’s ability to foreclose. Plaintiff
claims that Defendants cannot enforce the Deed of Trust because Wells Fargo
moved to foreclose on the property four years after the bankruptcy court lifted the
stay of the bankruptcy proceedings. Defs.’ Not. of Removal, Ex. A, at 3–4, ¶ 9 (ECF
No. 1-2). However, Plaintiff did not amend her Chapter 13 plan to include
Plaintiff’s claim that foreclosure was barred by the applicable statute of limitations,
which the Bankruptcy Code and Rules require her to do. And Plaintiff’s position in
this proceeding—that Wells Fargo cannot foreclose on the property—directly
contradicts 	her 	surrender 	of 	the 	Woodberry 	Property 	in 	the 	bankruptcy
proceeding. See Defs.’ Mot. to Dismiss, Ex. H, at 3–4 (ECF No. 10-8) (listing the
Woodberry Property as collateral to be surrendered); Daniel, 2019 WL 2719286,
at *4 (“More glaring, however, is Plaintiffs’ representation to the bankruptcy court
that . . . they surrendered [the property] to Defendants. Plaintiffs’ action in this
case 	challenging 	Defendants’ 	foreclosure 	is 	the 	exact 	opposite 	of 	that
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representation, 	and 	they 	should 	not 	be 	allowed 	to 	make 	such 	a 	claim.”);
Richardson v. CitiMortgage, Inc., 2010 WL 4818556, at *4–5 (E.D. Tex. Nov. 22,
2010) (“[Plaintiff] represented that it was his intention to surrender the property
to CitiMorgage. . . . The Plaintiffs’ position in this lawsuit is the opposite of the
representations they made to the Bankruptcy Court, and they should not be
allowed to advance such positions. They should not be allowed to ‘play fast and
loose’ with the courts in order to avoid foreclosure.”).
Therefore, the first element of judicial estoppel is satisfied because Plaintiff’s
position in this case is in direct contravention of the representations she made to
the bankruptcy court.
2. Reliance on Plaintiff’s Inconsistent Position
As to the second element, the bankruptcy court accepted and relied on
Plaintiff’s inconsistent position when it confirmed the Chapter 13 plan, lifted the
automatic stay, and discharged her bankruptcy case. “Courts have consistently
held that a bankruptcy court accepts a debtor’s position when it relies on her asset
schedules and confirms her bankruptcy plan. This reliance need not be explicit; the
court assumes reliance on the debtor’s schedules when the bankruptcy court
confirms the debtor’s plan.” Abreu, 2013 WL 1949845, at *3 (citing Jethroe, 412
F.3d at 600).
The 	Chapter 	13 	plan 	expressly 	stated 	that 	Plaintiff 	surrendered 	the
Woodberry Property to satisfy Defendants’ claims, and the bankruptcy court
accepted that plan. Defs.’ Mot. to Dismiss, Ex. H, at 3–4 (ECF No. 10-8). Further,
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the bankruptcy court impliedly relied on Plaintiff’s position when it discharged the
bankruptcy case and lifted the automatic stay so that Defendants could foreclose
on it. Daniel, 2019 WL 2719286, at *4 (collecting cases); Johnson, 2013 WL
3810715, at *9 (“[T]he bankruptcy court necessarily reviewed, and relied to some
extent, on Plaintiff’s . . . schedules before confirming her bankruptcy plan and
discharging her debts.”). Therefore, the second element of judicial estoppel is met
because the bankruptcy court confirmed the Chapter 13 plan, lifted the automatic
stay, and discharged Plaintiff’s bankruptcy case.
3. Lack of Inadvertence
Finally, the Court determines that Plaintiff’s inconsistent positions are not
inadvertent. In bankruptcy cases, “[t]he debtor’s failure to satisfy [her] statutory
disclosure duty is ‘inadvertent’ only when, in general, the debtor either lacks
knowledge of the undisclosed claims or has no motive for their concealment.” Love
v. Tyson Foods, Inc., 677 F.3d 258, 262 (5th Cir. 2012) (quoting In re Coastal
Plains, Inc., 179 F.3d at 210). And a “lack of awareness of a statutory disclosure
duty for legal claims is not relevant.” In re Flugence, 738 F.3d 126, 130–31 (5th Cir.
2013) (cleaned up).
Here, Plaintiff knew about the claim, as she explicitly surrendered the
Woodberry Property in the bankruptcy proceeding. Daniel, 2019 WL 2719286, at
*4 (“Here, Plaintiffs cannot claim they lacked knowledge of the claim that the Deed
of Trust was unenforceable due to the passage of time. Plaintiffs surrendered the
Property to Defendants, and in accordance with the Plan, the automatic stay was
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terminated as to the Property thereby permitting Defendants to initiate foreclosure
proceedings.”).
As to Plaintiff’s motivation, the Fifth Circuit has stated that “the motivation
sub-element is almost always met if a debtor fails to disclose a claim or possible
claim to the bankruptcy court. Motivation in this context is self-evident because of
[the] potential financial benefit resulting from the nondisclosure.” Love, 677 F.3d
at 262 (quoting Thompson, 2006 WL 7089989, at *12–13). In this suit, Plaintiff
seeks to prevent foreclosure of the Woodberry Property. However, this claim
contradicts her surrender of the Woodberry Property in the Chapter 13 plan, and
Plaintiff failed to disclose to the bankruptcy court the claims she is pursuing or
amend her Chapter 13 plan regarding the Woodberry Property. See Claudio D.,
2015 WL 5164812, at *12 (finding that plaintiffs had motivation for concealment
because they would “reap a windfall” if they prevailed in a suit after the bankruptcy
court discharged their debts and “obtained relief without having accounted for it
in their bankruptcy case”). Accordingly, the Court finds that Plaintiff’s inconsistent
positions were not inadvertent.
As all three elements of judicial estoppel are met, Plaintiff’s claims against
the Defendants are barred by the doctrine of judicial estoppel. Accordingly, the
District Judge should GRANT Defendants’ Motion to Dismiss.
Opportunity to Amend
The Fifth Circuit is inclined to give pro se plaintiffs several opportunities to
state a claim upon which relief can be granted. See Hitt v. City of Pasadena, 561
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F.2d 606, 608 (5th Cir. 1977) (per curiam); Scott v. Byrnes, 2008 WL 398314, at
*1 (N.D. Tex. Feb. 13, 2008) (Fitzwater, J.); Sims v. Tester, 2001 WL 627600, at *2
(N.D. Tex. Feb. 13, 2001) (Fitzwater, J.). Courts therefore typically allow pro se
plaintiffs to amend their complaints when the action is to be dismissed pursuant
to a court order. See Robinette v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 2004
WL 789870, at *2 (N.D. Tex. Apr. 12, 2004) (Fitzwater, J.). A pro se plaintiff may
also obtain leave to amend a complaint in response to a recommended dismissal.
See Swanson v. Aegis Commc’ns Grp., Inc., 2010 WL 26459, at *1 (N.D. Tex. Jan.
5, 2010) (Fitzwater, J.).
But leave to amend is not automatic and may be refused where it would be
futile. See Morgan v. Chapman, 969 F.3d 238, 248 (5th Cir. 2020) (citing Smith
v. EMC Corp., 393 F.3d 590, 595 (5th Cir. 2004)). “The court may deny leave to
amend . . . if the defects are incurable or the plaintiff[ ] ha[s] already alleged [her]
best case.” Pierce v. Hearne Indep. Sch. Dist., 600 F. App’x 194, 200 (5th Cir. 2015)
(per curiam) (citing Great Plains Tr. Co. v. Morgan Stanley Dean Witter & Co.,
313 F.3d 305, 329 (5th Cir. 2002) and Bazrowx v. Scott, 136 F.3d 1053, 1054 (5th
Cir. 1998) (per curiam)).
As Plaintiff’s claims are barred by the doctrine of judicial estoppel, the
District Judge should not give Plaintiff any further opportunities to amend her
Complaint because it would be futile. See Hill v. Estate of Hill, 594 F. Supp. 3d 741,
766 (N.D. Tex. 2022) (“[I]n light of the court’s determination that Plaintiffs are
estopped from bringing their claims, either under a theory of judicial estoppel or
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quasi-judicial estoppel, any amendment would be futile.”); In re Highland Cap.
Mgmt., L.P., 2024 WL 4139647, at *8 (N.D. Tex. Sept. 10, 2024) (Boyle, J.)
(affirming bankruptcy court’s denial of leave to amend because plaintiff’s claims
were barred by the doctrine of judicial estoppel).
Recommendation
For the reasons stated above, the District Judge should DENY Plaintiff’s
Motion to Remand (ECF No. 6) and GRANT Defendants’ Motion to Dismiss (ECF
No. 10). The District Judge should DISMISS Plaintiff’s action with prejudice.
SO RECOMMENDED.
February 13, 2026.
REBECCA RUTHERFORD
UNITED STATES MAGISTRATE JUDGE
INSTRUCTIONS FOR SERVICE AND
NOTICE OF RIGHT TO APPEAL/OBJECT
A copy of this report and recommendation will be served on all parties in the
manner provided by law. Any party who objects to any part of this report and
recommendation must file specific written objections within 14 days after being
served with a copy. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b). To be specific,
an objection must identify the specific finding or recommendation to which
objection is made, state the basis for the objection, and specify the place in the
magistrate judge’s report and recommendation where the disputed determination
is found. An objection that merely incorporates by reference or refers to the
briefing before the magistrate judge is not specific. Failure to file specific written
objections will bar the aggrieved party from appealing the factual findings and legal
conclusions of the magistrate judge that are accepted or adopted by the district
judge, except upon grounds of plain error. See Douglass v. United Servs. Auto.
Ass’n, 79 F.3d 1415, 1417 (5th Cir. 1996).
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