Shumate et al v. Gateway Mortgage

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
Marquet Shumate and
Zoisa Shumate,
Plaintiffs,
v.
Gateway Mortgage, a Division of
Gateway First Bank,
Defendant.
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Civil Action H-25-2170
MEMORANDUM AND RECOMMENDATION
TO DENY PLAINTIFFS’ MOTIONS TO REMAND AND
TO GRANT DEFENDANT’S MOTION TO DISMISS
This case has been referred to the undersigned magistrate
judge pursuant to 28 U.S.C. § 636(b)(1). ECF No. 5. Pending before
the court are Plaintiffs’ Motions to Remand, ECF Nos. 6 and 9, and
Defendant’s Motion to Dismiss, ECF No. 7. The court recommends
that 	Plaintiffs’ 	Motions 	to 	Remand, 	ECF 	Nos. 6 and 9, 	be
DENIED, and Defendant’s Motion to Dismiss, ECF No. 7, be
GRANTED.
1. Background
In August 2022, Marquet and Zoisa Shumate (Plaintiffs)
obtained a home mortgage loan, which encumbered the Plaintiffs’
property in Montgomery County, Texas. ECF No. 7 at 17. The loan
was memorialized through a Promissory Note (Note) and Deed of
Trust. Id. at 17–19, 23–39. Shortly after initiation of the loan, the
lender 	executed 	an 	allonge, 	which 	named 	Gateway 	Mortgage
Group, a Division of Gateway First Bank (Gateway), as payee on
the Note. Id. at 20. The loan documents, including the allonge,
were recorded in Montgomery County. Id. at 21.
United States District Court
Southern District of Texas
ENTERED
January 29, 2026
Nathan Ochsner, Clerk
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Eventually, Plaintiffs defaulted on their loan obligations,
and Gateway initiated the foreclosure process. ECF No. 1-1 at 38.
A foreclosure sale was set for May 6, 2025. Id. Plaintiffs state that
they “submitted [to Gateway] one or more applications for loss
mitigation or loan modification” prior to the scheduled foreclosure,
pursuant to the Real Estate Settlement Procedures Act (RESPA)
provision 	for 	Mortgage 	Loan 	Servicing, 	12 	U.S.C. 	§ 2605, 	as
implemented 	through 	12 	C.F.R. 	§ 1024.41 	(Regulation 	X). 	Id.
Plaintiffs allege that Gateway failed to notify them of receipt of
their applications, and that Gateway failed to timely process their
applications. Id.
Seeking to enjoin the foreclosure sale, on May 1, 2025,
Plaintiffs filed this lawsuit against Gateway in the 457th District
Court of Montgomery County, Texas. ECF No. 1-1 at 5, 38. The
next day, Plaintiffs filed two amended pleadings, which are titled
“Verified 	Original 	Petition 	and 	Application 	for 	[TRO]” 	and
“Verified Amended Complaint and Related Pleadings.” Id. at 29–
31, 	37–40. 	The 	two 	amended 	pleadings 	were 	simultaneously
filed—at 	12:52 P.M.—by 	the 	Montgomery 	County 	Court. 	Id.
Because of this, and because the contents of the two amended
pleadings are not contradictory, the court reads the two amended
pleadings together as a single document, which it refers to as
Plaintiffs’ “Amended Petition.”
Before turning to Plaintiff’s allegations, the court addresses
two 	preliminary 	matters. 	Under 	the 	Texas 	Rules 	of 	Civil
Procedure, 	an 	amended 	complaint 	supersedes 	all 	previous
complaints, absent objection to the complaint by a party. Tex. R.
Civ. P. 65. Causes of action not contained in amended pleadings
are effectively dismissed at the time the amended pleading is filed.
FKM P’ship, Ltd. v. Bd. of Regents of Univ. of Hous., 255 S.W.3d
616, 633 (Tex. 2008). Generally, “[w]hen a party’s name is omitted
from an amended pleading, he is as effectively dismissed as where
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a formal order of 	dismissal is 	entered.” 	Randolph 	v. 	Walker,
29 	S.W.3d 	271, 	274 	(Tex. 	App.—Houston 	[14th 	Dist.] 	2000,
pet. denied). However, federal courts must “liberally construe[] pro
se pleadings.” Erickson v. Pardus, 551 U.S. 89, 94 (2007).
It is clear that Plaintiffs intended to replace their first
petition with their Amended Petition. Thus, the court construes
the 	Amended 	Petition 	as 	the 	live 	pleading 	in 	the 	case.
Additionally, although Zoisa Shumate’s name is omitted entirely
from the Amended Petition, declaring her dismissed from this
lawsuit would not be consistent with a liberal construction of
Plaintiffs’ pleadings. It is clear, based on all the filings in this case,
that 	Marquet 	Shumate 	and 	Zoisa 	Shumate 	both 	intend 	to
prosecute this case. Accordingly, the court construes the Amended
Petition as though both Marquet Shumate and Zosia Shumate
were named as Plaintiffs therein.
Plaintiffs’ Amended Petition asserts three causes of action
against Gateway, for which Plaintiffs seek injunctive relief and
monetary damages. ECF No. 1-1 at 38–39. First, Plaintiffs allege
that Gateway violated Texas Property Code § 51.002 because it did
not comply with its notice requirements for default and foreclosure
sale. Id. Second, Plaintiffs allege that Gateway committed the
Texas-law tort of wrongful foreclosure. Id. Third, Plaintiffs allege
that Gateway violated federal law under Regulation X, by failing
to 	acknowledge 	receipt 	of 	their 	applications 	for 	loss 	or 	loan
mitigation and then failing to make a timely determination on
their applications. Id.
On May 2, 2025, the state court granted Plaintiffs’ request
for a temporary restraining order (TRO). ECF No. 1-1 at 45–46.
The TRO restrained Gateway from “[c]onducting, posting notice of,
or proceeding with any foreclosure sale” of the Plaintiffs’ property
for 14 days. Id. It also set a hearing before the state court on
Plaintiffs’ application for preliminary injunction. Id.
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On May 13, 2025, one day prior to the state court’s scheduled
hearing, Gateway removed the case to federal court. ECF No. 1.
Gateway asserted that the action was removable on the basis of
both federal question jurisdiction and diversity jurisdiction. Id.
at 3. In two identical Motions to Remand, Plaintiffs challenge
Gateway’s removal. ECF Nos. 6, 9. Plaintiffs argue that the court
lacks subject matter jurisdiction over this matter. Id.
On May 22, 2025, Gateway filed a Motion to Dismiss all of
Plaintiffs’ claims under Federal Rules of Civil Procedure 12(b)(6).
ECF No. 7. Plaintiffs did not respond. Accordingly, Gateway’s
Motion to Dismiss is considered unopposed. See S.D. Tex. L.R. 7.4
(stating 	that 	failure 	to 	respond 	to 	a 	motion 	is 	“taken 	as 	a
representation of no opposition”). At the same time, however, the
court will not grant a dispositive motion merely because it is
unopposed. See Ramsey v. Signal Delivery Serv., Inc., 631 F.2d
1210, 1214 (5th Cir. 1980) (reversing the district court’s decision
to grant defendants’ motions to dismiss merely because they were
unopposed). Instead, the court considers the Motion on its merits.
The court first turns to Plaintiffs’ Motions to Remand.
2. Plaintiffs’ Motions to Remand
Gateway removed this case on the basis of federal question
jurisdiction (28 U.S.C. § 1331) and diversity jurisdiction (28 U.S.C.
§ 1332). ECF No. 	1 at 3. Plaintiffs filed identical Motions to
Remand, in which they assert that the court lacks subject matter
jurisdiction. ECF Nos. 6, 9.
Under 28 U.S.C. § 1441(a), a defendant may remove an
action to federal court if the federal district court possesses subject
matter jurisdiction over the action. Manguno v. Prudential Prop.
& Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002). The party
asserting jurisdiction has the burden to prove the court’s subject
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matter jurisdiction. Alfonso v. United States, 752 F.3d 622, 625
(5th Cir. 2014).
A. Federal Question Jurisdiction
In its Notice of Removal, Gateway asserts that Plaintiffs’
claims for alleged violations of RESPA establish federal question
jurisdiction under 28 U.S.C. § 1331. ECF No. 1 at 3. Plaintiffs
argue 	that 	their 	claims 	do 	not 	give 	rise 	to 	federal 	question
jurisdiction. ECF No. 9 at 4. They argue that “[t]he fundamentals
of [their] lawsuit are all based on State causes of action . . . which
cannot be brought at the Federal level.” Id. at 2.
Generally, disputes arising out of mortgage foreclosures are
governed by state law. Eng. v. Freedom Mortg. Corp., No. 24-2120,
2024 WL 4327460, at *4 (S.D. Tex. Sep. 3, 2024) (collecting cases).
However, “a complaint that asserts the plaintiff’s right to recovery
based on federal law” establishes subject matter jurisdiction under
28 U.S.C. § 1331. La. Indep. Pharmacies Ass’n v. Express Scripts,
Inc., 41 F.4th 473, 478 (5th Cir. 2022). The court will apply the
“well-pleaded complaint” rule in evaluating jurisdiction. That is,
“[a] federal question exists only in those cases in which a well-
pleaded complaint establishes either that federal law creates the
cause of action or that the plaintiff’s right to relief necessarily
depends 	on 	resolution 	of 	a 	substantial 	question 	of 	federal
law.” Singh v. Duane Morris LLP, 538 F.3d 334, 337–38 (5th Cir.
2008) (citation and internal quotation marks omitted).
Plaintiffs’ Amended Petition identifies a cause of action
created by federal law. ECF No. 1-1 at 38–39. Plaintiffs allege that
Gateway violated Regulation X by failing to provide Plaintiffs with
notice of receipt of their applications for loss or loan mitigation. Id.
They also allege that Gateway violated Regulation X by failing to
make a timely determination on their applications. Id. Because
Plaintiffs assert that Gateway violated Regulation X—a cause of
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action created by federal law—the court has original jurisdiction
under 28 U.S.C. § 1331.
Federal 	courts 	may 	choose 	to 	exercise 	supplemental
jurisdiction over a plaintiff’s state law claims “that are so related”
to 	the 	claims 	that 	give 	rise 	to 	the 	federal 	court’s 	original
jurisdiction “that they form part of the same case or controversy.”
28 U.S.C. § 1367. Here, the same set of facts gives rise to all of
Plaintiffs’ claims. Accordingly, the court—satisfied that it has
original jurisdiction under 28 U.S.C. § 1331—has supplemental
jurisdiction over Plaintiffs’ state law claims.
While 28 U.S.C. § 1331 and § 1367 justify the courts’ exercise
of jurisdiction, the court will also address Plaintiffs’ argument that
the court lacks diversity jurisdiction.
B. Diversity Jurisdiction
In its Notice of Removal, Gateway asserts that the court has
original jurisdiction pursuant to 28 U.S.C. § 1332. Under 28 U.S.C.
§ 1332, federal district courts have subject matter jurisdiction over
“civil actions ‘between . . . citizens of different States’ where the
amount in controversy exceeds $75,000.” Lincoln Prop. Co. v.
Roche, 546 U.S. 81, 89 (2005) (quoting 28 U.S.C. § 1332(a)(1)).
The 	citizenship 	requirement 	in 	28 	U.S.C. 	§ 1332(a)(1)
requires complete diversity of citizenship between the parties.
Lincoln Prop. Co., 546 U.S. at 89. The citizenship of individual
persons “is determined by domicile, which requires residency plus
an intent to make the place of residency one’s permanent home.”
SXSW, L.L.C. v. Fed. Ins. Co., 83 F.4th 405, 407 (5th Cir. 2023).
A business organized as a “corporation is ‘a citizen of every State
and foreign state by which it has been incorporated and of the
State or foreign state where it has its principal place of business.’”
MidCap Media Fin., L.L.C. v. Pathway Data, Inc., 929 F.3d 310,
314 (5th Cir. 2019) (quoting 28 U.S.C. § 1332(c)(1)). “State banks,
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usually 	chartered 	as 	corporate 	bodies 	by 	a 	particular 	State,
ordinarily 	fit 	comfortably 	within 	this 	prescription.” 	Wachovia
Bank v. Schmidt, 546 U.S. 303, 306 (2006).
Plaintiffs are domiciled in Montgomery County, Texas, so
they are citizens of Texas for the purposes of diversity jurisdiction.
ECF 	No. 	1-1 	at 	5, 	37. 	Gateway 	is 	a 	state-chartered 	bank
incorporated in Oklahoma. ECF No. 1 at 4. Its principal place of
business is in Oklahoma. Id. Therefore, Gateway is considered a
citizen of Oklahoma. Because Plaintiffs are citizens of Texas, and
Gateway is a citizen of Oklahoma, there is complete diversity of
citizenship between the parties.
The amount in controversy is ordinarily determined based
on “the sum demanded in good faith in the initial pleading.” 28
U.S.C. § 1446(c)(2). “In actions seeking declaratory or injunctive
relief, it is well established that the amount in controversy is
measured by the value of the object in litigation.” Hunt v. Wash.
State Apple Advert. Comm’n, 432 U.S. 333, 347 (1977). When the
“right to property is called into question in its entirety, the value
of the property controls the amount in controversy.” Waller v. Pro.
Ins. Corp., 296 F.2d 545, 547–48 (5th Cir. 1961).
Plaintiffs seek injunctive relief to prevent Gateway from
foreclosing on the property. Gateway attached the Montgomery
Central Appraisal District’s valuation of the property to its Notice
of Removal. ECF No. 1-2. The net appraised property value is
$349,037. Id. This amount, which exceeds the $75,000 threshold in
28 U.S.C. § 1332, controls the amount in controversy.
Because there is complete diversity of citizenship between
the parties and the amount in controversy exceeds $75,000, the
court has original jurisdiction under 28 U.S.C. § 1332.
For these reasons, the court recommends that Plaintiffs’
Motions to Remand, ECF Nos. 6 and 9, be DENIED.
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3. Gateway’s Motion to Dismiss
The 	court 	next 	considers 	Gateway’s 	Motion 	to 	Dismiss
Plaintiffs’ claims under Federal Rules of Civil Procedure 12(b)(6).
ECF 	No. 	7. 	Rule 	12(b)(6) 	authorizes 	the 	court 	to 	dismiss 	a
complaint for “failure to state a claim upon which relief can be
granted.” 	Fed. 	R. 	Civ. 	P. 	12(b)(6). 	Generally, 	the 	court 	is
constrained to the “four corners of the complaint” to determine
whether the plaintiff has stated a claim. Morgan v. Swanson,
659 F.3d 359, 401 (5th Cir. 2011); see also Loofbourrow v. Comm’r,
208 F. Supp. 2d 698, 708 (S.D. Tex. 2002) (“[T]he court may not
look beyond the four corners of the plaintiff’s pleadings.”).
Under 	Rule 	12(b)(6), 	the 	court 	determines 	whether 	the
plaintiff’s complaint contains “enough facts to state a claim to
relief that is plausible on its face.” Bell Atl. 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.” Calogero v. Shows, Cali & Walsh, L.L.P.,
970 F.3d 	576, 	580 	(5th 	Cir. 	2020) 	(quoting 	Ashcroft 	v. 	Iqbal,
556 U.S. 662, 678 (2009)). “The plausibility standard is not akin to
a ‘probability requirement,’ but it asks for more than a sheer
possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S.
at 678. Ultimately, the “[f]actual allegations [in the complaint]
must be enough to raise a right to relief above the speculative
level.” Twombly, 550 U.S. at 555 (internal citation omitted).
Courts accept “all well-pleaded facts as true” and “view[]
them in the light most favorable to the plaintiff.” Allen v. Walmart
Stores, L.L.C., 907 F.3d 170, 177 (5th Cir. 2018) (quoting Jones v.
Greninger, 188 F.3d 322, 324 (5th Cir. 1999)). “A plaintiff need only
plausibly allege facts going to the ultimate elements of the claim
to survive a motion to dismiss.” Cicalese v. Univ. Tex. Med. Branch,
924 F.3d 762, 768 (5th Cir. 2019). “Factual allegations must be
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enough to raise a right to relief above the speculative level . . . on
the assumption that all allegations in the complaint are true (even
if doubtful in fact).” Twombly, 550 U.S. at 555. “[A] well-pleaded
complaint may proceed even if it strikes a savvy judge that actual
proof of those facts is improbable[.]” Id. at 556.
Only statements of fact are to be taken as true. “Threadbare
recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678.
Conclusory allegations are “disentitled . . . to the presumption of
truth.” Iqbal, 566 U.S. at 681. Thus, the court, in reviewing the
plaintiff’s complaint, may neither “accept conclusory allegations”
nor 	“strain 	to 	find 	inferences 	favorable 	to 	the 	plaintiffs.”
Southland Sec. Corp. v. INSpire Ins. Sols., Inc., 365 F.3d 353, 361
(5th Cir. 2004).
In considering a motion to dismiss, the court must limit itself
to: (1) the facts in the complaint; (2) documents attached to the
complaint; and (3) matters of which the court may take judicial
notice. Walker v. Beaumont Indep. Sch. Dist., 938 F.3d 724, 735
(5th 	Cir. 	2019). 	The 	court 	has 	discretion 	to 	consider 	“any
documents 	attached 	to 	the 	complaint[] 	and 	any 	documents
attached to the motion to dismiss that are central to the claim and
referenced by the complaint.” Lone Star Fund V (U.S.), L.P. v.
Barclays Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010). Such
documents are considered part of the pleadings. See Causey v.
Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285, 288 (5th Cir. 2004).
Under the two-step inquiry outlined in Iqbal, the court first
identifies and disregards conclusory allegations. 556 U.S. at 664.
Legal conclusions, or “threadbare recitals of the elements of a
cause of action, supported by mere conclusory statements” are not
entitled the assumption of truth. Id. at 678. Neither “unsupported
conclusions . . . of 	mixed 	fact 	and 	law” 	nor 	“unwarranted
deductions” are acceptable. Southland, 365 F.3d at 361; Stanton v.
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United States, 434 F.2d 1273, 1276 (5th Cir. 1970). Second, the
court “consider[s] the factual allegations in [the complaint] to
determine if they plausibly suggest an entitlement to relief.” Iqbal,
556 U.S. at 664. The court may not “strain to find inferences
favorable to the plaintiffs.” Southland, 365 F.3d at 361.
A. Violation of Texas Property Code § 51.002
Plaintiffs assert that Gateway violated two subsections of
Texas Property Code § 51.002—subsection (d) and subsection (b).
ECF 	No. 	1-1 	at 	39. 	Plaintiffs 	allege 	that 	Gateway 	violated
§ 51.002(d) by failing to serve them “with a written 20-day notice
of default by certified mail.” Id. Plaintiffs also allege that Gateway
violated § 51.002(b) by failing to give them “at least 21 days’ notice
of the foreclosure sale by posting, filing, and certified mailing . . . .”
Id. They argue that because Gateway violated these provisions,
Gateway’s acceleration of their loan and scheduled foreclosure sale
are invalid. Id.
Gateway argues that Plaintiffs’ claim under § 51.002 fails as
a matter of law because the statute does not create a private right
of action. ECF No. 7 at 5. This is true. Carey v. Fargo, No. 15-1666,
2016 WL 4246997, at *3 (S.D. Tex. Aug. 11, 2016) (citing Ashton v.
BAC Home Loans Servicing, L.P., No. 13-810, 2013 WL 3807756,
at *4 (S.D. Tex. July 19, 2013)). “[C]ourts have construed claims
for violation of section 51.002 as claims for wrongful foreclosure,”
on which a plaintiff may be entitled to recover damages. See Carey,
2016 WL 4246997, at *3 (collecting cases). The court considers
Plaintiffs’ wrongful foreclosure claim in the next section.
Because Texas Property Code § 51.002 does not create a
private right action, the court recommends that Gateway’s Motion
to Dismiss, ECF No. 7, be GRANTED as to Plaintiffs’ claim for
violation of Texas Property Code § 51.002.
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B. Wrongful Foreclosure
Plaintiffs’ second cause of action is for wrongful foreclosure.
ECF No. 1-1 at 39. Under Texas law, to state a claim for wrongful
foreclosure, a plaintiff must plead: (1) that there was “a defect in
the foreclosure sale proceedings;” (2) that the property was sold at
a 	“grossly 	inadequate 	price;” 	and 	(3) that 	there 	is 	“a 	causal
connection between the defect and the grossly inadequate selling
price.” Carey, 2016 WL 4246997, at *3 (citation omitted).
Plaintiffs plead that there was a defect in the foreclosure
sale proceedings—i.e., they were not given notice. However, they
do 	not 	allege 	that 	the 	property 	was 	actually 	sold 	through
foreclosure. Accordingly, Plaintiffs did not plead that the property
was sold at a grossly inadequate price or that the lack of notice
caused the property to sell at a grossly inadequate price. Because
Plaintiffs did not plead the required elements, they cannot recover
on a claim for wrongful foreclosure.
Under the heading of their “wrongful foreclosure” claim,
Plaintiffs also assert that the assignment of the loan to Gateway
was defective and that Gateway lacks standing to foreclose. ECF
No. 1-1 at 38. Plaintiffs allege that Gateway lacks possession of a
properly 	endorsed 	Promissory Note. 	Id. 	at 39. For 	these two
reasons, 	Plaintiffs 	argue, 	Gateway 	cannot 	enforce 	the 	debt
through foreclosure. Id.
In other wrongful-foreclosure cases, the Fifth Circuit has
rejected the theories that underlie Plaintiffs’ arguments. See, e.g.,
Martins v. BAC Home Loans Servicing, L.P., 722 F.3d 249, (5th
Cir. 2013). Like Plaintiffs argue here, the homeowners in Martins
argued 	that 	the 	servicer 	could 	not 	foreclose 	on 	their 	home
mortgage loan because (1) the assignment was defective, and (2)
even if it was a valid assignment of the mortgage, the servicer was
only assigned the mortgage, and not the promissory note. Id.
at 253. 	The 	court 	explained 	that 	the 	homeowners’ 	arguments
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“merged, in part, two common theories on which mortgagees in
wrongful-foreclosure cases in Texas and elsewhere often attempt
to rely[,] . . . the ‘show-me-the-note’ theory’” and “the ‘split-the-
note’ theory.” Id. “The [‘show-me-the-note’] theory posits that to
foreclose, a party must produce the original note bearing a ‘wet ink
signature.’” Id. The [‘split-the-note’] theory is that the foreclosing
“party must hold both the note and the deed of trust.” Id. at 254.
The court in Martins rejected both theories. It held that in Texas,
“[t]he original, signed note need not be produced in order to
foreclose.” Id. Additionally, it held that “where the foreclosing
party is a mortgage servicer, and the mortgage has been properly
assigned[, t]he party to foreclose need not possess the note itself.”
Id. at 255.
Gateway asserts that the recorded assignment is valid. ECF
No. 7 at 7. In support, Gateway attached to its Motion copies of the
loan 	documents, 	including 	the 	Note, 	Deed 	of 	Trust, 	and 	the
allonge, as well as proof that the documents were recorded in
Montgomery County, where the property is located. Because of this
documentation, and because Plaintiffs’ arguments lack support
entirely, the court rejects Plaintiffs’ arguments as to defective
assignment and standing. As a matter of law, Plaintiffs do not have
a cause of action that these arguments would support.
For these reasons, the court recommends that Gateway’s
Motion to Dismiss, ECF No. 7, be GRANTED as to Plaintiffs’
claim for wrongful foreclosure.
C. Violation of RESPA Regulation X
Plaintiffs allege that Gateway violated Regulation X by
failing to acknowledge receipt of their applications for loss or loan
mitigation within 5 days and failing to make a timely decision on
their applications. ECF No. 1-1 at 38–40. Plaintiffs request relief
in the form of actual and statutory damages under RESPA. ECF
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No. 1-1 at 40. Gateway argues that Plaintiffs have not met their
pleading burden because they failed to plead facts showing either
(1) that they suffered actual damages, or (2) that they are entitled
to statutory damages. ECF No. 7 at 9–10.
RESPA allows borrowers to recover “actual damages to the
borrower as a result of the [servicer’s] failure” to comply with the
law. 12 U.S.C. § 2605(f)(1)(A), (f)(3). “[T]o survive a motion to
dismiss 	under 	Rule 	12(b)(6)[,] 	a 	plaintiff 	must 	allege 	actual
damages resulting from a violation of § 2605.” Avila v. JPMorgan
Chase 	Bank, 	N.A., 	No. 	H-14-3502, 	2015 	WL 	1648940, 	at 	*3
(S.D. Tex. Apr. 13, 2015) (citing 12 U.S.C. § 2605(f)(1)(A)). In other
words, a plaintiff must plead facts sufficient “to establish a causal
link 	between 	the 	financing 	institution’s 	violation 	and 	their
injuries.” Wilson v. Deutsche Bank Tr. Co. Ams., 2020 WL 3452298,
at 	*7 	(N.D. 	Tex. 	June 	24. 	2020) 	(citing 	Law 	v. 	Ocwen 	Loan
Servicing, L.L.C., 587 F. App’x 790, 795 (5th Cir. 2014) (“Because
[the borrower] alleged no facts upon which his injuries could be
viewed as resulting from [the lender’s] failure to provide him with
notice under RESPA, we conclude that the district court correctly
dismissed his claim.”)). Conclusory allegations of actual damages
are not sufficient. Thomas v. Ocwen Fin. Corp., No. 19-685, 2020
WL 13413468, at *3 (S.D. Tex. Feb. 27, 2020) (citing Avila, 2015
WL 1648940, at *3 (“Plaintiffs’ Original Petition makes only the
conclusory allegation that ‘Defendant has violated several RESPA
procedures causing Plaintiff to suffer actual damages.’ Plaintiffs
have failed to state a plausible claim for relief under RESPA.”)).
Plaintiffs do not sufficiently allege that they suffered actual
damages as a result of Gateway’s alleged failures to comply with
RESPA’s 	notice 	requirements. 	Plaintiffs 	make 	a 	conclusory
assertion 	that 	Gateway’s 	conduct 	“caused 	[them] 	harm 	by
depriving [them] of available options and protections under federal
law.” ECF No. 1-1 at 39. However, Plaintiffs do not specify what
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“options and protections” would have been available to them had
Gateway complied with the law. Additionally, Plaintiffs assert that
Gateway’s 	RESPA 	violations 	“rendered 	the 	foreclosure 	effort
wrongful.” ECF No. 1-1 at 39. But they do not allege that Gateway
has sold the property through foreclosure, and they do not assert
Gateway’s alleged violations have caused them to incur costs that
they otherwise would not. Plaintiffs’ pleading merely contains
conclusory assertions, which are insufficient to state a claim for a
violation of RESPA.
For these reasons, the court recommends that Gateway’s
Motion to Dismiss, ECF No. 7, be GRANTED as to Plaintiffs’
claim for Gateway’s alleged violation of RESPA.
D. Leave to Amend is Denied
“Dismissing an action after giving the plaintiff only one
opportunity to state his case is ordinarily unjustified.” Davoodi v.
Austin Indep. Sch. Dist., 755 F.3d 307, 310 (5th Cir. 2014) (quoting
Jacquez v. Procunier, 801 F.2d 789, 792 (5th Cir. 1986)). If the
plaintiff seeks leave to amend, she “must give the court at least
some notice of what . . . her amendments would be and how those
amendments would cure the initial complaint’s defects.” Scott v.
U.S. Bank Nat’l Ass’n, 16 F.4th 1204, 1209 (5th Cir. 2021) (citation
omitted). The court may deny leave “[i]f the plaintiff does not
provide a copy of the amended complaint [or] explain how the
defects could be cured[.]” Id. (citation omitted). The court may also
deny leave to amend when amendment would be futile or when the
plaintiff chooses to stand on her complaint and argues that it
satisfies 	the 	pleading 	requirements. 	See 	Khoury 	v. 	Thota,
No. 20-20578, 2021 WL 3919248, at *4 (5th Cir. Sep. 1, 2021)
(affirming the district court’s denial of leave to amend when the
plaintiff 	chose 	to 	stand 	on 	his 	complaint 	and 	argued 	that 	it
satisfied the pleading requirements); Wimm v. Jack Eckerd Corp.,
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3 F.3d 137, 139 (5th Cir. 1993) (discussing futility of amendment
as justification for denying leave to amend).
Here, 	Plaintiffs 	have 	neither 	requested 	to 	amend 	nor
proposed amendments to their Amended Petition. They did not
respond to Gateway’s Motion to Dismiss. The court has no reason
to believe that Plaintiffs could amend their petition to remedy its
defects. Amendment would be futile. Therefore, any request for
leave to amend is denied.
4. Conclusion
Because the court concludes that it has jurisdiction over this
matter under 28 U.S.C. § 1331 and § 1332, the court recommends
that Plaintiffs’ Motions to Remand, ECF No. 6 and 9, be DENIED.
Additionally, because Plaintiffs have failed to state a claim
against Gateway, the court recommends that Gateway’s Motion to
Dismiss Under Rule 12(b)(6), ECF No. 7, be GRANTED, and that
all of Plaintiffs’ claims against Gateway be dismissed without
prejudice.
The 	parties 	have 	fourteen 	days 	from 	service 	of 	this
Memorandum and Recommendation to file written objections. 28
U.S.C. 	§ 636(b)(1); 	Fed. 	R. 	Civ. 	P. 	72. 	Failure 	to 	timely 	file
objections will preclude appellate review of factual findings or legal
conclusions, except for plain error. See Thomas v. Arn, 474 U.S.
140, 147–49 (1985); Rodriguez v. Bowen, 857 F.2d 275, 276–77 (5th
Cir. 1988).
Signed at Houston, Texas, on January 28, 2026.
______________________________________
Peter Bray
United States Magistrate Judge
Case 4:25-cv-02170 Document 20 Filed 01/28/26 in TXSD Page 15 of 15