Gutierrez v. SN Servicing Corporation, et al.

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
PERLA G. GUTIERREZ,
Plaintiff,
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v. 	CIVIL ACTION NO. 4:25-cv-1555
SN SERVICING CORPORATION
AND U.S. BANK TRUST NA., AS
TRUSTEE FOR BUNGALOW
SERIES IV TRUST,
Defendants.
MEMORANDUM AND RECOMMENDATION
Pending before the Court1 is Defendants’ SN Servicing Corporation and
U.S. Bank Trust NA., as Trustee for Bungalow Series IV Trust (“U.S. Bank”)
(collectively, “Defendants”) Motion to Dismiss (ECF No. 7). Based on a review
of the motion, arguments, and relevant law, the Court RECOMMENDS the
Defendants’ Motion to Dismiss (id.) be GRANTED.
I. 	Background
According to Plaintiff Perla A. Gutierrez’s (“Plaintiff”) Original Petition,
she purchased the property at issue on March 4, 2004. 	(ECF No. 1 at 15).
Plaintiff alleges her property was posted for foreclosure sale to occur on April
1 This case was referred to the Undersigned for all purposes pursuant to 28 U.S.C.
§ 636(b)(1)(A) and (B) and Federal Rule of Civil Procedure 72. (ECF No. 4).
United States District Court
Southern District of Texas
ENTERED
January 09, 2026
Nathan Ochsner, Clerk
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1, 2025. (Id.). Plaintiff was surprised because she was not aware of the default
and did not receive notice from Defendants regarding the scheduled foreclosure
sale. (Id. at 15–16).
On March 31, 2025, Plaintiff sued Defendants for breach of contract and
alleged violations of Texas Property Code Section 5.065 in the 125th District
Court 	of 	Harris 	County, 	Texas, 	as 	Case 	No. 	2025-21451, 	to 	prevent 	a
foreclosure sale of the property. 	(See id. at 16–21). 	On April 4, 2025,
Defendants removed the case to this Court. 	(See id. at 1). 	After removal,
Defendants filed the instant Motion to Dismiss for Failure to State a Claim.
(ECF No. 7). Plaintiff did not file a response.
II. 	Legal Standard
Federal Rule of Civil Procedure (“Rule”) 12(b)(6) provides for dismissal
of an action for “failure to state a claim upon which relief can be granted.” FED.
R. C IV . P. 12(b)(6). 	When considering a motion to dismiss, a court should
construe the allegations in the complaint favorably to the pleader and accept
as true all well-pleaded facts. Sullivan v. Leor Energy, LLC, 600 F.3d 542, 546
(5th Cir. 2010). 	In the Fifth Circuit, motions to dismiss under Rule 12(b)(6)
are viewed with disfavor and rarely granted. 	Lormand v. U.S. Unwired, Inc.,
565 F.3d 228, 232 (5th Cir. 2009). To survive dismissal, a complaint must plead
“enough facts to state a claim to relief that is plausible on its face.” 	Bell Atl.
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Corp. v. Twombly, 550 U.S. 544, 570 (2007). 	“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).
However, a court is not bound to accept legal conclusions couched as
factual allegations. Papasan v. Allain, 478 U.S. 265, 286 (1986). Although all
reasonable inferences will be resolved in favor of a plaintiff, a plaintiff must
plead “specific facts, not mere conclusory allegations.” 	Tuchman v. DSC
Commc’ns Corp., 14 F.3d 1061, 1067 (5th Cir. 1994); see also Firefighters’ Ret.
Sys. v. Grant Thornton, L.L.P., 894 F.3d 665, 669 (5th Cir. 2018) (“Although a
complaint does not need detailed factual allegations, the allegations must be
enough to raise a right to relief above the speculative level . . . .”) (internal
quotations omitted)). “‘Threadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice.’” 	Firefighters’ Ret.
Sys., 894 F.3d at 669 (quoting Iqbal, 556 U.S. at 678). 	“The court is not
required to conjure up unpled allegations or construe elaborately arcane
scripts to save a complaint.” Santerre v. Agip Petroleum Co., Inc., 45 F. Supp.
2d 558, 568 (S.D. Tex. 1999) (internal quotations omitted).
To determine whether to grant a Rule 12(b)(6) motion, a court may only
look to allegations in a complaint to determine their sufficiency. 	Id.; Atwater
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Partners of Tex. LLC v. AT & T, Inc., No. 2:10-cv-175, 2011 WL 1004880, at *1
(E.D. Tex. Mar. 18, 2011). 	“A court may, however, also consider matters
outside the four corners of a complaint if they are incorporated by reference,
items 	subject 	to 	judicial 	notice, 	matters 	of 	public 	record, 	orders, 	items
appearing in the record of a case, and exhibits attached to a complaint whose
authenticity is unquestioned.” Joubert on Behalf of Joubert v. City of Houston,
No. 4:22-cv-3750, 2024 WL 1560015, at *2 (S.D. Tex. Apr. 10, 2024).
III. 	Discussion
Defendants move to dismiss Plaintiff’s Original Petition for failure to
state a claim upon which relief can be granted. (ECF No. 7). Plaintiff did not
respond to Defendants’ motion. Pursuant to Local Rule 7.4, failure to respond
is taken 	as 	a representation of no opposition. 	S.D. TEX . LOCAL R. 7.4.
Regardless of Plaintiff’s failure to respond to the motion to dismiss, the Court
will consider the merits of Defendants’ motion before the Court. See Gonzalez
v. Mongo, No. 24-cv-5145, 2025 WL 2174763, at *2 (S.D. Tex. July 31, 2025);
Chilton v. Texas S. Univ., No. 4:24-cv-1646, 2024 WL 4282092, at *1 (S.D. Tex.
Sept. 24, 2024) (“[W]here a party does not respond to a motion to dismiss, such
failure does not permit the Court to enter a ‘default’ dismissal.”).
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a. 	Breach of Contract
The essential elements of a breach of contract claim in Texas are: “(1) the
existence of a valid contract; (2) performance or tendered performance by the
plaintiff; 	(3) 	breach 	of 	the 	contract 	by 	the 	defendant; 	and 	(4) 	damages
sustained by the plaintiff as a result of the breach.” 	Mullins v. TestAmerica,
Inc., 564 F.3d 386, 418 (5th Cir. 2009) (cleaned up).
As to the first prong, it does not appear that Plaintiff disputes that U.S.
Bank is the holder and beneficiary of the Note and Deed of Trust. (ECF No. 1
at 15).
As to the second prong, Plaintiff states she was not aware of a default.
(Id.). 	Defendants argue Plaintiff effectively admits that she defaulted. 	(ECF
No. 7 at 6). 	Even if the Court agreed and found that that this concession is
fatal to her breach of contract claim at this juncture, “there are some instances
in 	which 	a 	borrower’s 	default 	on 	a 	loan 	does 	not 	preclude 	them 	from
maintaining a breach of contract action against their lender.” 	Harvey v.
Velocity Com. Cap. Loan Tr., No. 20-cv-2129, 2021 WL 828621, at *2 (N.D. Tex.
Feb. 17, 2021), report and recommendation adopted, No. 20-cv-2129, 2021 WL
826416 (N.D. Tex. Mar. 4, 2021); see also Williams v. Wells Fargo Bank, N.A.,
884 F.3d 239, 245 (5th Cir. 2018) (“If performance of the terms of a deed of
trust governing the parties’ rights and obligations in the event of default can
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always be excused by pointing to the debtor’s default under the terms of the
note, the notice terms have no meaning. 	Such a reading is inconsistent with
the intent of the parties and with Texas law.”).
As to the third prong, Plaintiff alleges Defendants did not notify Plaintiff
of a default, that “[d]uring the course of the past few months, Defendants have
refused to accept payments from . . . Plaintiff,” and that Plaintiff disputes how
some of her payments have been attributed to the loan. (ECF No. 1 at 15–16).
However, Plaintiff did not identify the provisions in the Note or Deed of Trust
that was allegedly breached by Defendants. 	See Mitchell v. Prestige Default
Servs. LLC, No. 3:23-cv-2534, 2024 WL 3237170, at *3 (N.D. Tex. June 6, 2024),
report and recommendation adopted, No. 3:23-cv-2534, 2024 WL 3239934 (N.D.
Tex. June 28, 2024).
Finally, as to the fourth prong, Plaintiff fails to plead with specificity
that she suffered actual damages as a result of Defendants’ actions. 	See
Langen v. Sanchez Oil & Gas Corp., No. 4:18-cv-2840, 2019 WL 1674348, at
*3–4 (S.D. Tex. Apr. 17, 2019) (“District courts in the Fifth Circuit frequently
dismiss contract claims for failure to plead actual damages with specificity.”)
(collecting cases). 	Here, Plaintiff states she “is entitled to recover its [sic]
actual damages from Defendants for which Plaintiff pleads in an amount which
does not exceed the jurisdictional limits of this Court.” (ECF No. 1 at 19). This
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statement is inadequate to plead actual monetary damages. See Langen, 2019
WL 1674348, at *4. 	Plaintiff does not specifically allege that she suffered
actual damages from Defendants’ actions. See CQ, Inc. v. TXU Min. Co., L.P.,
565 F.3d 268, 278 (5th Cir. 2009) (explaining that “‘[a] party may not recover
damages for breach of contract if those damages are remote, contingent,
speculative, or conjectural.’” (quoting City of Dallas v. Villages of Forest Hills,
L.P., Phase I, 931 S.W.2d 601, 605 (Tex. App.—Dallas 1996, no writ))).
As such, the Court recommends Defendants’ motion to dismiss should be
granted with regard to Plaintiff’s breach of contract claim.
b. Texas Property Code § 5.065
Plaintiff asserts Defendants violated Texas Property Code § 5.065 by
failing to give proper notices of default and acceleration of the debt. (See ECF
No. 1 at 17–18). Even if Plaintiff's allegations were true, she could not state a
claim under § 5.065 because that section of the statute applies to “contracts for
deed.” 	See T EX . PROP . C ODE § 5.065 (providing that “a purchaser in default
under an executory contract for the conveyance of real property may avoid the
enforcement of a remedy described by Section 5.064 by complying with the
terms of the contract on or before the 30th day after the date notice is given
under that section.” (emphasis added)); Santarose v. Deutsche Bank Nat’l Tr.
Co., No. 4:19-cv-567, 2020 WL 13669040, at *3 n.2 (S.D. Tex. Apr. 7, 2020)
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(holding a loan agreement is not a contract for deed covered by § 5.065 and
noting that “contract for deed, unlike a typical secured transaction involving a
deed of trust, is a financing arrangement that allows the seller to maintain
title to the property until the buyer has paid for the property in full.” (quoting
Morton v. Nguyen, 412 S.W.3d 506, 509–10 (Tex. 2013))). 	As such, Plaintiff's
claim for violation of Texas Property Code § 5.065 should be dismissed. 	See
Black v. NewRez LLC, No. 4:24-cv-0028, 2024 WL 1775343, at *3 (S.D. Tex.
Apr. 2, 2024).
c. 	Accounting
Plaintiff 	also 	asserts 	a 	claim 	for 	accounting. 	(ECF 	No. 	1 	at 	18).
Defendants argue the Court should find that an accounting is an equitable
remedy and not an independent cause of action. (ECF No. 7 at 8 (citing Henry
v. CitiMortgage, Inc., No. 4:11-cv-83, 2011 WL 2261166, at *8 (E.D. Tex. May
10, 2011), report and recommendation adopted, No. 4:11-cv-83, 2011 WL
2214007 (E.D. Tex. June 7, 2011))). 	However, Defendants acknowledge that
some courts treat a request for an accounting as a standalone cause of action.
(Id. (citing Saenz v. JP Morgan Chase Bank, N.A., No. 7:13-cv-156, 2013 WL
3280214, at *5 (S.D. Tex. June 27, 2013))).
Even if the Court treated Plaintiff’s request for an accounting as a
standalone cause of action, “[a]n equitable accounting is proper when the facts
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and accounts presented are so complex that adequate relief may not be
obtained at law.” Hutchings v. Chevron U.S.A., Inc., 862 S.W.2d 752, 762 (Tex.
App.—El Paso 1993, writ denied). 	Here, Plaintiff’s Complaint “does not
include allegations that even suggest that the facts and accounts presented are
so complex that adequate relief may not be obtained at law.” Saenz, 2013 WL
3280214, at *5. 	As such, Plaintiff’s request for an accounting should be
dismissed. See id.
d. Breach of Cooperation
In Texas, “[a] duty to cooperate is implied in every contract in which
cooperation is necessary for performance of the contract.” 	Case Corp. v. Hi-
Class Bus. Sys. of Am., Inc., 184 S.W.3d 760, 770 (Tex. App.—Dallas 2005, pet.
denied). “The duty to cooperate is a ‘promise that a party will not do anything
to prevent or delay the other party from performing the contract.’” 	Dick v.
Colorado Hous. Enterprises, L.L.C., 780 F. App’x 121, 124 (5th Cir. 2019)
(quoting Texas Nat. Bank v. Sandia Mortg. Corp., 872 F.2d 692, 698 (5th Cir.
1989)).
Here, 	Plaintiff 	alleges 	Defendant 	breached 	the 	duty 	of 	cooperation
because “Defendants failed to respond to Plaintiff’s requests for an updated
payoff until it was too late for the parties to reach an agreement on the
delinquent balance.” 	(ECF No. 1 at 19). 	Plaintiff also states she “requested
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the continuation of the loan, despite a dispute over the amount of money due
and owing to Defendant” and that she “notified Defendant of the dispute in
writing.” (Id. at 16).
“[Alt]hough a ‘duty to cooperate is implied in every contract in which
cooperation is necessary for performance of the contract,’ there is not any
‘precedential authority to support the existence of an implied covenant to
provide a payoff amount in a transaction involving a promissory note and deed
of trust.’” Dick, 780 F. App’x at 124 (quoting Graves v. Logan, 404 S.W.3d 582,
585-86 (Tex. App.—Houston [1st Dist.] 2010, no pet.)). 	Further, merely
asserting 	that 	Defendants 	failed 	to 	respond 	to 	Plaintiff’s 	request 	for 	an
updated payoff “does not amount to an allegation that Defendant hindered,
prevented, or interfered with Plaintiff’s ability to perform her duties under the
contract.” Mass v. Wells Fargo Bank, N.A., No. 21-cv-2962, 2022 WL 61161, at
*5 (S.D. Tex. Jan. 6, 2022) (holding that merely asserting that the defendant
“‘did not respond [ ] with the information needed to properly perform the
obligations of the Loan’ . . . does not amount to an allegation that Defendant
hindered, prevented, or interfered with Plaintiff's ability to perform her duties
under the contract”).
Plaintiff has not alleged facts that establish Defendants breached the
duty to cooperate. 	See Lahijani v. U.S. Bank Tr. Nat’l Ass’n as Tr. for LSF9
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Master Participation Tr., No. 25-cv-5366, 2025 WL 3653757, at *3 (S.D. Tex.
Dec. 17, 2025). 	As such, Plaintiff’s breach of duty of cooperation claim should
be dismissed.
e. 	Injunctive Relief
Defendants also argue Plaintiff is not entitled to obtain any injunctive
relief. (ECF No. 7 at 11–12).
Injunctions are a form of relief that must be based on a valid underlying
cause of action. 	See Hellas Constr., Inc. v. Beynon Sports Surfaces, Inc., No.
19-cv-377, 2019 WL 4254307, at *4 (W.D. Tex. Sept. 6, 2019), report and
recommendation adopted, No. 1:19-cv-377, 2019 WL 11553742 (W.D. Tex. Oct.
21, 2019) (holding a plaintiff “must establish a substantive underlying claim
in order for the Court to award declaratory or injunctive relief” (internal
quotations omitted)). 	Thus, because Plaintiff fails to establish a substantive
underlying 	claim, 	her 	claim 	for 	injunctive 	relief 	should 	be 	dismissed.
Similarly, dismissal of Plaintiff’s underlying claims requires dismissal of her
attorney’s fees claim. 	See Rohrmoos Venture v. UTSW DVA Healthcare, LLP,
578 S.W.3d 469, 484 (Tex. 2019) (holding that to recover attorney’s fees under
section 38.001, a party must prevail on a cause of action for which fees are
recoverable and recover damages).
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f. 	Leave to Amend
Under Rule 15(a) (2), “[t]he court should freely give leave [to amend]
when 	justice 	so 	requires.” 	“Although 	leave 	to 	amend 	should 	not 	be
automatically granted, ‘[a] district court must possess a substantial reason to
deny a request for leave to amend[.]’” Tucker Energy Servs., USA, Inc. v. Ricoh
Americas Corp., No. 4:12-cv-0417, 2012 WL 2403513, at *1 (S.D. Tex. June 25,
2012) (quoting Jones v. Robinson Prop. Group, L.P., 427 F.3d 987, 994 (5th Cir.
2005)). “[A] movant [seeking to cure a defective pleading] must give the court
at least some notice of what his or her amendments would be and how those
amendments would cure the initial complaint’s defects.” D.L. Markham DDS,
MSD, Inc. 401(K) Plan v. Variable Annuity Life Ins. Co., 88 F.4th 602, 613–14
(5th Cir. 2023).
Plaintiff has not responded to Defendants’ Motion to Dismiss and has
not requested leave to amend. 	Plaintiff has not provided notice of any
amendments she could make to cure the pleading deficiencies explained in
Defendants’ Motion to Dismiss. 	As such, the Court recommends leave to
amend 	should 	not 	be 	granted, 	and 	the 	Court’s 	dismissal 	of 	Plaintiff’s
Complaint should be with prejudice. See Lahijani, 2025 WL 3653757, at *4.
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IV. 	Conclusion
Based on the foregoing, the Court RECOMMENDS Defendants’ Motion
to Dismiss (ECF No. 7) be GRANTED.
The Clerk shall send copies of this Memorandum and Recommendation
to the respective parties who have fourteen days from the receipt thereof to file
written objections thereto pursuant to Federal Rule of Civil Procedure 72(b)
and General Order 2002-13. Failure to file written objections within the time
period mentioned shall bar an aggrieved party from attacking the factual
findings and legal conclusions on appeal.
SIGNED in Houston, Texas on January 9, 2026.
______________________________
Richard W. Bennett
United States Magistrate Judge
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