Mitchel v. Select Portfolio Servicing, Inc., et al

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
FORT WORTH DIVISION
ERIC V. MITCHEL, 	§
§
Plaintiff, 	§
§
v. 	§ 	Civil Action No. 4:25-cv-00432-O-BP
§
NEXERA HOLDINGS LLC, et al., 	§
§
Defendants. 	§
FINDINGS, CONCLUSIONS, AND RECOMMENDATION
OF THE UNITED STATES MAGISTRATE JUDGE
This is a suit for fraudulent inducement, material misrepresentation, violations of the Texas
Deceptive Trade Practices-Consumer Protection Act (“DTPA”), and deprivation of civil rights that
Plaintiff Eric Mitchel (“Mitchel”) brought pro se. ECF No. 1. Before the Court is the Motion to
Dismiss that Planet Home Lending LLC (“Planet”) filed on December 15, 2025 (ECF No. 42).
After reviewing the pleadings and applicable legal authorities, the undersigned RECOMMENDS
that Chief United States District Judge Reed O’Connor GRANT the Motion to Dismiss (ECF No.
42) and DISMISS Mitchel’s claims against Planet.
I. 	BACKGROUND
Mitchel’s claims arise from his purchase of a home in February 2025. ECF No. 1. Mitchel
initiated this action on April 21, 2025 against several defendants including two lenders, a loan
servicer, the seller, and the real estate broker involved in the transaction. Id. at 2-3. He claims that
Defendants 	made 	false 	representations, 	inadequate 	disclosures, 	contradictions, 	and
mischaracterizations. Id. at 4-6. Mitchel alleges these actions amounted to fraud and deceptive
conduct and violated several of his rights. Id. at 6. He requests that the Court cancel the deed of
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trust as void, enjoin Defendants from enforcing their security interests, and award him damages
and fees. Id. at 7.
Mitchel’s complaint alleges that he received a “Notice of Servicing Transfer” indicating
Nexera Holdings, LLC (“Nexera”) transferred the loan to Planet on February 6, 2025, one day
prior to the February 7, 2025 closing. Id. at 4. He contends that Planet “later represented that it did
not receive the transfer until February 14, 2025, confirming a break in the chain of servicing
custody and indicating no servicer had clear authority to act between February 7, and 14, 2025.”
Id. at 5.
II. 	LEGAL STANDARDS
A. 	Federal Rule of Civil Procedure 12(b)(6)
Federal Rule of Civil Procedure 12(b)(6) permits dismissal of complaints that fail to state
a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). To state a viable claim for relief,
a complaint must include sufficient factual allegations “to raise a right to relief above the
speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In considering a Rule
12(b)(6) motion, courts must “take all well-pleaded facts as true, viewing them in the light most
favorable to the plaintiff ... and ask whether the pleadings contain ‘enough facts to state a claim to
relief that is plausible on its face.’” Yumilicious Franchise, LLC v. Barrie, 819 F.3d 170, 174 (5th
Cir. 2016) (citing Twombly, 550 U.S. at 547).
“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.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In ruling on a motion to dismiss, a court may consider
documents outside the complaint when they are: (1) attached to the motion to dismiss; (2)
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referenced in the complaint; and (3) central to the plaintiff’s claims. In re Katrina Canal Breaches
Litig., 495 F.3d 191, 205 (5th Cir. 2007).
B. 	Pro se parties
The Court subjects a pro se party's pleadings to less rigid analysis than those of a party
represented by counsel. “[A] pro se complaint, ‘however inartfully pleaded,’ must be held to ‘less
stringent standards than formal pleadings drafted by lawyers.’” Estelle v. Gamble, 429 U.S. 97,
106 (1976). However, “even a liberally-construed pro se . . . complaint must set forth facts giving
rise to a claim on which relief may be granted.” Levitt v. Univ. of Tex. at El Paso, 847 F.2d 221,
224 (5th Cir. 1988) (citing Bounds v. Smith, 430 U.S. 817, 825-26 (1977)). Thus, a court inquires
“whether within the universe of theoretically provable facts there exists a set which can support a
cause of action under [the] complaint, indulgently read.” Covington v. Cole, 528 F.2d 1365, 1370
(5th Cir. 1976). However, “conclusory allegations or legal conclusions masquerading as factual
conclusions will not suffice to state a claim for relief.” Masika Brown Ray v. Anthony Boone et al.,
No. 24-40169, 2024 WL 4372692, *1 (5th Cir. 2024) (citing Coleman v. Lincoln Par. Det. Ctr.,
858 F.3d 307, 309 (5th Cir. 2017)).
C. 	Dismissal with or without leave to amend
There exists a “well-established policy that the plaintiff be given every opportunity to state
a claim.” Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001) (citing Hitt v. City of
Pasadena, 561 F.2d 606, 608 (5th Cir. 1977)). It is federal policy to decide cases on the merits
rather than technicalities and thus, when possible, the Fifth Circuit has recommended that suits be
dismissed without prejudice on Rule 12 motions. Great Plains Tr. Co. v. Morgan Stanley Dean
Witter & Co., 313 F.3d 305, 329 (5th Cir. 2002); Hines v. Wainwright, 539 F.2d 433, 434 (5th Cir.
1976) (vacating and remanding a Rule 12(c) dismissal with instructions to the district court to
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dismiss without, instead of with, prejudice). As a result, courts generally allow plaintiffs at least
one opportunity to amend following a Rule 12 dismissal on the pleadings. Great Plains Tr. Co.,
313 F.3d at 329; see In re Online Travel Co. (OTC) Hotel Booking Antitrust Litig., 997 F. Supp.
2d 526, 548-49 (N.D. Tex. 2014) (Boyle, J.) (dismissing for failure to state a claim without
prejudice, as dismissing with prejudice would be “too harsh a sanction”).
However, courts may appropriately dismiss an action with prejudice if the court finds that
the plaintiff has alleged his best case. Jones v. Greninger, 188 F.3d 322, 327 (5th Cir. 1999). If the
court “outline[s] in [its] opinion the deficiencies” of a plaintiff’s pleading and “plaintiff
nevertheless cannot . . . amend to satisfy [the relevant pleading standard,] the court can then dismiss
the complaint with the assurance that the plaintiff has been shown all the deference he is due.”
Sims v. Tester, No. 3:00-cv-0863-D, 2001 WL 627600, at *2-3 (N.D. Tex. Feb. 13, 2001) (quoting
Barber v. G.H. Rodgers, No. 3-84-1750-D (N.D. Tex. Sept. 13, 1988)).
III. 	ANALYSIS
A. 	Mitchel does not plead fraud with particularity under Rule 9(b).
Mitchel’s complaint does not assert any specific facts to support a fraud claim against
Planet. He asserts that submission of the notice of transfer servicing document between Nexera to
Planet occurred one day prior to Plaintiff’s signature on the loan documents. ECF No. 1 at 5-6. He
contends that this premature transfer undermines the integrity of the loan process and demonstrates
a lack of transparency, further supporting his claims of fraud and deceptive conduct. Id. at 6.
Mitchel also argues that this invalid transfer constitutes fraudulent inducement. ECF No. 1 at 7.
However, Mitchel asserts no facts to suggest that Planet defrauded him.
The elements of common law fraud under Texas law are that: (1) a defendant made a false
material representation to the plaintiff with knowledge of the statement's falsity or a reckless
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disregard as to its truth, (2) the defendant intended the plaintiff to rely on the statement, (3) the
plaintiff relied on the statement, and (4) the statement caused damage to the plaintiff. See Formosa
Plastics Corp. USA v. Presidio Eng'rs & Contractors, Inc., 960 S.W.2d 41, 47 (Tex. 1998). A
claim for common law fraud must meet the heightened pleading standard required by Federal Rule
of Civil Procedure 9(b). Fed. R. Civ. P. 9(b) (“In alleging fraud or mistake, a party must state with
particularity the circumstances constituting fraud or mistake.”); see also Biliouris v. Sundance
Res., Inc., 559 F. Supp. 2d 733, 736 (N.D. Tex. 2008) (applying Rule 9(b)’s heightened pleading
standard to claims for common-law fraud, statutory fraud, and negligent misrepresentation). “A
dismissal for failure to state fraud with particularity as required by Rule 9(b) is a dismissal on the
pleadings for failure to state a claim,” and so the Court “must accept the complaint’s well-pleaded
factual allegations as true.” Shushany v. Allwaste, Inc., 992 F.2d 517, 520 (5th Cir. 1993)
“At a minimum, Rule 9(b) requires allegations of the particulars of time, place, and
contents of 	the false representations, 	as well as the identity of the person 	making the
misrepresentation and what he obtained thereby.” Benchmark Elecs., Inc. v. J.M. Huber Corp.,
343 F.3d 719, 724 (5th Cir. 2003) (quotation omitted). “Put simply, Rule 9(b) requires the who,
what, when, where, and how to be laid out.” Id. (quotation omitted).
The Fifth Circuit has further explained that “[a]lthough Rule 9(b) expressly allows scienter
to be ‘averred generally’, simple allegations that defendants possess fraudulent intent will not
satisfy Rule 9(b)” and that “[t]he plaintiffs must set forth specific facts supporting an inference of
fraud.” Dorsey v. Portfolio Equities, Inc., 540 F.3d 333, 339 (5th Cir. 2008) (internal quotation
marks and citations omitted). “Facts that show a defendant’s motive to commit the fraud may
sometimes provide a factual background adequate for an inference of fraudulent intent.” United
States ex rel. Willard v. Humana Health Plan of Texas, 336 F.3d 375, 384 (5th Cir. 2003).
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Mitchel’s complaint is devoid of any facts to support his fraud claims. Mitchel does not
show whether Planet made any statements to him, how he relied upon them, or if the statement
caused him damages. Therefore, Mitchel has not met his burden to show that he has alleged a fraud
claim against Planet upon which the Court can grant relief.
B. 	Mitchel does not plead a proper DTPA claim.
“There are three elements to a DTPA claim: ‘(1) the plaintiff is a consumer; (2) the
defendant engaged in false, misleading, or deceptive acts; and (3) these acts constituted a
producing cause of the consumer’s damages.’” In re Frazin, 732 F.3d 313, 323 (5th Cir. 2013)
(citing Hugh Symons Grp., plc v. Motorola, Inc., 292 F.3d 466, 468 (5th Cir. 2002)).
Mitchel’s complaint does not assert facts to support a DTPA claim against Planet. While
he asserts that Planet’s statements constituted “deceptive practices in violation of the DTPA,” he
does not plead facts to show how or why this is the case. ECF No. 1 at 7. Undeterred, Mitchel
seeks cancellation of his mortgage without providing any legal basis for such a remedy. Id. at 6.
Even liberally construing Mitchel’s complaint and taking all well-pleaded facts as true and
viewed in the light most favorable to him, Mitchel’s pleading does not “raise a right to relief above
the speculative level.” Bell Atl. Corp., 550 U.S. at 555. He does not provide adequate facts to show
that any of the alleged bad acts were false, misleading, or deceptive. As a result, dismissal under
Rule 12(b)(6) is appropriate because Mitchel has not stated a claim upon which relief may be
granted for violation of the DTPA.
C. 	Mitchel is not entitled to declaratory judgment nor cancellation of the loan.
Mitchel requests that the Court invalidate his mortgage instrument, cancel the deed of trust,
and enjoin the Defendants from enforcing the security interest. ECF No. 1 at 7. He cites no legal
authority that would entitle him to such relief. “Declaratory judgment and injunctive relief are
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forms of relief based on underlying claims.” Johnson v. Wells Fargo Bank, NA, 999 F. Supp. 2d
919, 935 (N.D. Tex. 2014). As a result, when a Plaintiff’s claims cannot withstand dismissal,
“requests for declaratory and injunctive relief” also “cannot survive.” Id. Mitchel’s claims against
Planet for fraud and DTPA violations are insufficient to survive dismissal because Mitchel has not
provided a plausible factual basis for the relief he requests. As a result, the declaratory judgement
and injunctive relief he seeks to cancel the loan and enjoin Defendants “cannot survive” and
therefore should also be dismissed. Id.
D. 	The Court should dismiss Mitchel’s claims against Planet with leave to amend.
Following a Rule 12 motion to dismiss, courts usually allow plaintiffs at least one
opportunity to amend, unless “it is clear that the defects are incurable . . . .” Great Plains Tr. Co.,
313 F.3d at 329. In determining whether to allow an amendment of the pleadings, the Court
considers: undue delay in the proceedings, undue prejudice to the opposing parties, timeliness of
the amendment, and futility of the amendment. See Foman v. Davis, 371 U.S. 178, 182 (1962);
Chitimacha Tribe of La. v. Harry L. Laws Co., Inc., 690 F.2d 1157, 1163 (5th Cir. 1982). “At some
point, a court must decide that a plaintiff has had fair opportunity to make [his] case; if, after that
time, a cause of action has not been established, the court should finally dismiss the suit.” Jacquez
v. Procunier, 801 F.2d 789, 792-93 (5th Cir. 1986); Schiller v. Physicians Res. Group Inc., 342
F.3d 563 (5th Cir. 2003).
While Mitchel’s claims are legally unsupportable, the undersigned cannot conclude that he
has pleaded his best case. He has not had an opportunity to cure the deficiencies in his complaint,
and further amendment may cure these deficiencies. Chief Judge O’Connor should not dismiss
Mitchel’s claims against Planet if he amends his complaint to address the legal deficiencies noted
in these findings, conclusion, and recommendation within the fourteen-day period permitted for
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objections to these findings, conclusions, and recommendation or such other time that Chief Judge
O’Connor sets.
Should Mitchel seek leave to amend his complaint, he must comply with the requirements
of Federal Rules of Civil Procedure 8, 10(b), and 15(a) and Local Civil Rule 7.1. Fed. R. Civ. P.
8(a), 10(b), 15(a); Local Civil Rule 7.1. Any amended complaint will supersede (take the place of)
Plaintiff’s original Complaint (ECF No. 1). Consequently, Mitchel must state all claims and list
all defendants in any amended complaint filed. A form complaint for use in a civil case is available
online at http://www.uscourts.gov/forms/pro-se-forms/complaint-civil-case. Mitchel may also
review the Local Civil Rules of the Court at https://www.txnd.uscourts.gov/civil-rules.
IV. 	CONCLUSION
Mitchel has not pleaded sufficient facts to state a claim against Planet. However, the Court
should grant him leave to file an amended complaint that addresses the legal issues raised in
Planet’s Motion to Dismiss and these findings, conclusions, and recommendation, if Mitchel is
able to do so. Accordingly, the undersigned RECOMMENDS that Chief Judge O’Connor
GRANT the Motion to Dismiss (ECF No. 42) and DISMISS Mitchel’s claims against Defendant
Planet, with leave to file an amended complaint on or before February 19, 2026, or such other
date that Chief Judge O’Connor may set.
It is so ORDERED on February 5, 2026.
______________________________________
Hal R. Ray, Jr.
UNITED STATES MAGISTRATE JUDGE
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