Carry v. McCalla Raymer Leibert Pierce LLC et al

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
MICHAEL G. CARRY,
Plaintiff,
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v. 	CIVIL ACTION NO. 4:25-cv-1590
MCCALLA RAYMER LEIBERT
PIERCE LLC, AND
SHELLPOINT MORTGAGE
SERVICING
Defendants.
MEMORANDUM AND RECOMMENDATION
Pending before the Court1 is Defendant NewRez LLC d/b/a Shellpoint
Mortgage Servicing’s (“Shellpoint”) Motion for Judgment on the Pleadings
(ECF No. 13). Based on a review of the motion, arguments, and relevant law,
the Court RECOMMENDS Shellpoint’s motion (id.) be GRANTED.
I. 	Background
On April 7, 2025, Plaintiff Michael Carry (“Plaintiff”) filed his pro se
Complaint, which is titled “Demand for 3.5 Million in Sanction for Mortgage
Fraud Pursuant to Rule 11.” 	(ECF No. 1). 	Although difficult to decipher,
Plaintiff appears to challenge the foreclosure of his property. 	(Id. at 1, 7–8).
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
March 27, 2026
Nathan Ochsner, Clerk
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Plaintiff generally complains of an alleged lack of consideration for a “credit”
loan; foreclosure counsel’s lack of personal knowledge and evidence of a breach
of contract; a “defective affidavit” in the foreclosure proceedings; attorneys
being prohibited from testifying; “fraud and deception” on the court in the
foreclosure proceedings; and a lack of a “proper pre-filing investigation” prior
to the commencement of the foreclosure action. (Id. at 1–8). Plaintiff does not
request a specific form of relief, but he seems to demand sanctions for the
alleged fraud. (Id. at 7–8).
On July 9, 2025, the Court entered a Scheduling Order, setting the
deadline for amended pleadings for December 1, 2025, and the deadline for
discovery on February 20, 2026. (ECF No. 10).
On January 1, 2026, Shellpoint filed the instant Motion for Judgment on
the Pleadings pursuant to Federal Rule of Civil Procedure (“Rule”) 12(c). (ECF
No. 13). Plaintiff did not file a response.
II. 	Legal Standard
“After the pleadings are closed—but early enough not to delay trial—a
party may move for judgment on the pleadings.” 	FED. R. C IV. P. 12(c). 	“A
motion for judgment on the pleadings under Rule 12(c) is subject to the same
standard as a motion to dismiss under Rule 12(b)(6).” 	Doe v. MySpace, Inc.,
528 F.3d 413, 418 (5th Cir. 2008).
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Rule 12(b)(6) allows defendants to move to dismiss a complaint for
“failure to state a claim upon which relief can be granted.” 	F ED. R. C IV. P.
12(b)(6). “To survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, ‘to state a claim to relief that is plausible on
its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting 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.’” 	York v.
Welch, No. 20-cv-40580, 2024 WL 775179, at *2 (5th Cir. Feb. 26, 2024)
(quoting Iqbal, 556 U.S. at 678). 	“‘Threadbare recitals of the elements of a
cause of action, supported by mere conclusory statements, do not suffice.’” Id.
(quoting Iqbal, 556 U.S. at 678). In assessing the sufficiency of the complaint,
review is limited “to the complaint, 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); see Edmiston v. Borrego,
75 F.4th 551, 557–58 (5th Cir. 2023) (citing Collins v. Morgan Stanley Dean
Witter, 224 F.3d 496, 498 (5th Cir. 2000) (citing F ED. R. C IV. P. 12(b)(6))).
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III. 	Discussion
Plaintiff’s Complaint does not assert specific causes of action. (See ECF
No. 1). 	However, Shellpoint acknowledges the following underlying facts. 	In
2007, Plaintiff financed the purchase of a property in Baytown, Texas by
obtaining a $139,000 loan secured by a deed of trust. (ECF No. 13 at 1–2). The
Bank of New York Mellon fka The Bank of New York is the last assignee of
record, and Shellpoint is the loan servicer of the loan. (Id. at 2). Plaintiff fell
behind on loan payments, so in August 2024, Shellpoint posted the property
for an October 1, 2024 foreclosure sale. (Id.). Plaintiff did not cure the default
by October 1, so the sale went forward and AAG Properties Inc. purchased the
property and became the record owner. 	(Id.). 	After the foreclosure sale,
Plaintiff initiated this lawsuit. 	(Id.). 	Shellpoint requests the Court take
judicial notice of public records supporting the same. (Id. at 2, 4; see also ECF
No. 13-1).
Shellpoint moves to dismiss Plaintiff’s Complaint with prejudice. (Id. at
1, 8). 	Shellpoint argues Plaintiff (1) has no viable claim based on lack of
consideration, (2) does not meet Rule 9(b)’s heightened pleading standard for
a fraud claim, (3) cannot assert a private right of action for a Rule 11 violation,
and (4) is not entitled to declaratory relief. (Id. at 5–8).
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Plaintiff did not respond to Shellpoint’s motion. Pursuant to Local Rule
7.4, failure to respond is taken as a representation of no opposition. S.D. T EX.
L OCAL R. 7.4. 	The Court construes all pro se filings liberally. 	See Erickson v.
Pardus, 551 U.S. 89, 94 (2007). 	Regardless of Plaintiff’s failure to respond to
the motion, the Court will consider the merits of Shellpoint’s 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. Tex. S. Univ., No. 4:24-cv-1646, 2024 WL
4282092, at *1 (S.D. Tex. Sep. 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.”).
a. Lack of Consideration
“Under common law, as long as something of real and legally cognizable
value is given in exchange for a promise to pay under a promissory note, the
note is supported by adequate consideration.” Suttles v. Thomas Bearden Co.,
152 S.W.3d 607, 614 (Tex. App.—Houston [1st Dist.] 2004, no pet.) (citation
omitted). 	“A negotiable instrument is presumed to be given for valuable
consideration. 	Consideration for a promissory note is the money loaned.”
Golden Dipt Co. v. Santopadre, No. 94-cv-3109, 1995 WL 354840, at *2 (E.D.
La. June 12, 1995) (citation omitted). “There is a presumption of consideration
for an executed mortgage or deed of trust.” 	54A Am. Jur. 2d Mortgages § 15
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(2026); see also Lawler v. Lomas & Nettleton Fin. Corp., 583 S.W.2d 810, 812
(Tex. App.—Dallas 1979, no writ)) (finding detriment to mortgagee constituted
adequate and valid consideration for deed of trust obligation and liens); Morris
v. Nixon, 42 U.S. 118, 119 (1843) (“Where a loan is an inducement for the
execution of a deed which is absolute on the face of it, though the loan is not
recited as the consideration of the deed, or as any part of it, if the lender or
grantee in the deed treats it substantially as the consideration, or a part of it,
equity will declare the deed to be a security for money loaned.”).
Here, Plaintiff’s argument that his loan agreement lacked consideration
and is therefore void fails because Shellpoint’s predecessor-in-interest loaned
Plaintiff $139,000 to purchase the property at issue in exchange for his promise
to repay the loan. 	Seaforth v. Loancare, LLC, No. 5:24-cv-00576, 2024 WL
4906781, at *3 (W.D. Tex. Nov. 14, 2024), report and recommendation adopted,
No. 24-cv-00576, 2024 WL 4906759 (W.D. Tex. Nov. 26, 2024) (rejecting
plaintiffs’ allegations that their original loan agreement lacked consideration
because they received no value in exchange for their promissory note, where
lender transmitted purchasing funds for the property to the outgoing owners,
in exchange for the plaintiffs’ promise to repay such funds in the future).
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b. Fraud
Viewing the allegations in a light most favorable to Plaintiff and taking
into consideration his pro se status, the Court construes Plaintiff’s allegations
of 	a 	“defective 	affidavit” 	and 	“fraud 	and 	deception” 	in 	the 	foreclosure
proceedings as a claim of common law fraud. 	See Foxx v. My Vintage Baby,
Inc., No. 4:12-cv-593, 2014 WL 7272667, at *3 (E.D. Tex. Dec. 22, 2014), aff’d,
624 F. App’x 318 (5th Cir. 2015) (“Viewing the allegations in a light most
favorable to Plaintiff and taking into consideration his pro se status, the Court
thus construes Plaintiff’s . . . ‘general fraud and misrepresentation’ claim as a
claim of common law fraud.”).
To assert a claim of fraud under Texas law, a plaintiff must allege that:
(1) a material representation was made; (2) the representation was false; (3)
when the representation was made, the speaker knew it was false or made it
recklessly without any knowledge of the truth and as a positive assertion; (4)
the speaker made the representation with the intent that the other party
should act upon it; (5) the party acted in reliance on the representation; and
(6) the party thereby suffered injury. 	See Flaherty & Crumrine Preferred
Income Fund, Inc. v. TXU Corp., 565 F.3d 200, 212 (5th Cir. 2009) (citing Ernst
& Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 577 (Tex. 2001)).
Further, to state a claim for fraud or mistake in federal court, a plaintiff must
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state with particularity the circumstances constituting fraud or mistake. F ED.
R. C IV. P. 9(b). “At a minimum, Rule 9(b) requires that a plaintiff set forth the
‘who, what, when, where, and how’ of the alleged fraud.” U.S. ex rel. Thompson
v. Columbia/HCA Healthcare Corp., 125 F.3d 899, 903 (5th Cir. 1997).
Here, Plaintiff states that the foreclosure attorneys filed a “defective”
affidavit and complaint— “listing a third-party lender as the plaintiff when the
attorneys are the true plaintiff illegally acting as third-party debt collectors”—
and that the underlying promissory note is “fraudulent.” 	(ECF No. 1 at 2–3).
“[A]rticulating the elements of fraud with particularity requires a plaintiff to
specify the statements contended to be fraudulent, identify the speaker, state
when and where the statements were made, and explain why the statements
were fraudulent.” 	Williams v. WMX Techs., Inc., 112 F.3d 175, 177 (5th Cir.
1997). 	Put simply, Plaintiff fails to allege “the who, what, when, where, and
how” as required under Rule 9(b). 	See Burch v. JPMorgan Chase Bank, N.A.,
No. 3:19-cv-645, 2019 WL 4919018, at *8 (N.D. Tex. Sep. 3, 2019), report and
recommendation adopted, No. 3:19-cv-645, 2019 WL 4918100 (N.D. Tex. Oct.
4, 2019) (internal quotations omitted). 	Because Plaintiff fails to meet the
heightened pleading requirement of Rule 9(b), the Court recommends his fraud
claim be dismissed. 	See Melder v. Morris, 27 F.3d 1097, 1102 (5th Cir. 1994)
(“The plaintiffs must set forth specific facts supporting an inference of fraud.”)
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(emphasis in original); see also Smith v. Texas Cap. Loans, LLC, No. 4:24-cv-
2757, 	2025 	WL 	1914784, 	at 	*7 	(S.D. 	Tex. 	May 	20, 	2025), 	report 	and
recommendation adopted, No. 4:24-cv-02757, 2025 WL 1793152 (S.D. Tex.
June 	30, 	2025) 	(recommending 	pro 	se 	plaintiff’s 	fraud 	claims 	involving
mortgage loan and foreclosure process be dismissed for failure to meet the
heightened pleading requirement of Rule 9(b)).
c. 	Rule 11 Violation
Shellpoint also argues Plaintiff cannot assert a private right of action for
a Rule 11 violation, and even if he could, “he has not pleaded facts supporting
a finding of a Rule 11 violation.” (ECF No. 13 at 6). The Court agrees.
“[Rule] 11 grants a court discretion to discipline parties and counsel for
conducting litigation in bad faith or in a frivolous and abusive fashion. 	Rule
11 is a procedural tool that under the Rules Enabling Act can not[sic] ‘abridge,
enlarge or modify any substantive right.’” 	Cohen v. Lupo, 927 F.2d 363, 365
(8th Cir. 1991) (citing 28 U.S.C. § 2072). “Rule 11 sanctions must be sought by
motion in a pending case; there can be no independent cause of action
instituted for Rule 11 sanctions.” 	Id. (citing Port Drum Co. v. Umphrey, 852
F.2d 148, 151 (5th Cir. 1988)).
Because Plaintiff’s allegations do not support a violation of Rule 11 and
there is no private right of action under Rule 11, any cause of action based on
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a Rule 11 violation necessarily fails as a matter of law. 	See Abor v. Frazier,
No. 3:24-cv-522, 2024 WL 1258897, at *1, 3 (N.D. Tex. Mar. 7, 2024), report
and recommendation adopted, No. 3:24-cv-522, 2024 WL 1257280 (N.D. Tex.
Mar. 25, 2024) (noting there is no private right of action under Rule 11 where
pro se plaintiffs appeared to assert claims against an attorney and law firm
involved in a foreclosure proceeding against them); Simpson v. Robertson,
Anschutz, Schneid, Crane & Partners, PLLC, No. 3:23-cv-2464, 2023 WL
9065089, at *1, 3 (N.D. Tex. Nov. 8, 2023), report and recommendation adopted,
No. 3:23-cv-2464, 2024 WL 41565 (N.D. Tex. Jan. 2, 2024) (noting the same
and recommending dismissing pro se complaint titled “Demand for 3.5 Million
in Sanction for Mortgage Fraud Pursuant to Rule 11”).
d. Declaratory Relief
Finally, Shellpoint argues that, to the extent Plaintiff seeks “a factual or
legal determination of his rights as they relate to the property[,] [a]ny requests
for declaratory or injunctive relief should be moot by the executed foreclosure
sale.” 	(ECF No. 13 at 7). 	Additionally, Shellpoint contends Plaintiff has not
alleged any basis for seeking a declaration to set aside the foreclosure. (Id.).
Declarations and injunctions are forms 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. Sep. 6, 2019),
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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, any claim for declaratory or injunctive relief
should be dismissed. 	See Gutierrez v. SN Servicing Corp., No. 4:25-cv-1555,
2026 WL 230516, at *4 (S.D. Tex. Jan. 9, 2026), report and recommendation
adopted, 	No. 	4:25-cv-01555, 	2026 	WL 	228025 	(S.D. 	Tex. 	Jan. 	28, 	2026)
(recommending plaintiff’s claim for injunctive relief be denied in suit to prevent
foreclosure action because she failed to establish a substantive underlying
claim); Smith, 2025 WL 1914784, at *8 (“Because the Court recommends
dismissal of all of Plaintiff's claims, and Plaintiff has no other underlying
causes of action, the Court recommends Plaintiff’s claim under the Texas
Declaratory Judgment Act should be dismissed.”).2
e. 	Leave to Amend
Because Plaintiff is proceeding pro se, his failure to meet the specific
pleading requirements should not automatically result in dismissal of the
complaint with prejudice to re-filing. 	Hart v. Bayer Corp., 199 F.3d 239, 247
2 “[T] to the extent that this lawsuit was filed to challenge the results of state court
litigation that has concluded, such that no appeal was pending when [Plaintiff] filed this case
in federal court, the Rooker-Feldman doctrine prevents the Court’s jurisdiction ‘to modify or
reverse’ a state court proceeding.” Simpson, 2023 WL 9065089, at *4 (citations omitted).
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n.6 (5th Cir. 2000). While pro se plaintiffs generally should be afforded at least
one opportunity to amend, exceptions exist when, for example, “the defect is
simply incurable or the plaintiff has failed to plead with particularity after
being afforded repeated opportunities to do so.” 	Id. 	Additionally, the Court
need not grant leave to amend, even to a pro se plaintiff, “if the plaintiff has
already pleaded his ‘best case.’” Brewster v. Dretke, 587 F.3d 764, 768 (5th Cir.
2009).
Here, Plaintiff has neither responded to Shellpoint’s motion nor sought
leave to amend his Complaint. Given his silence, it is unclear whether Plaintiff
has pleaded his best case. 	See Bishop v. Bennett, No. 3:24-cv-126, 2024 WL
5330028, at *3 (S.D. Miss. Dec. 20, 2024), report and recommendation adopted,
No. 3:24-cv-126, 2025 WL 209164 (S.D. Miss. Jan. 15, 2025) (comparing cases).
Out of an abundance of caution, given Plaintiff’s pro se status, the Court
recommends 	Plaintiff 	be 	allowed 	fourteen 	days 	from 	the 	entry 	of 	this
Memorandum and Recommendation to file a motion seeking leave to amend
his Complaint. If Plaintiff fails to seek leave to amend within that time period,
the Court recommends Shellpoint’s Motion for Judgment on the Pleadings be
granted and Plaintiff’s claims be dismissed with prejudice. See id. at *3–4.
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IV. 	Conclusion
Based on the foregoing, the Court RECOMMENDS Plaintiff’s claims be
DISMISSED unless he timely files a motion seeking leave to amend his
Complaint within fourteen days of this Memorandum and Recommendation.
If Plaintiff fails to timely move for leave to amend, the Court RECOMMENDS
Shellpoint’s 	Motion 	for 	Judgment 	on 	the 	Pleadings 	(ECF 	No. 	13) 	be
GRANTED and Plaintiff’s claims be DISMISSED WITH PREJUDICE.
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 March 27, 2026.
______________________________
Richard W. Bennett
United States Magistrate Judge
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