Shumate et al v. Gateway Mortgage

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Case 4:25-cv-02170 Document 24 Filed 03/11/26 in TXSD Pagelof3

United States District Court
Southem District of Texas

ENTERED
March 11, 2026
Nathan Ochsner, Clerk

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION
MARQUET SHUMATE, et al., §
Plaintiffs,
VS. CIVIL ACTION NO. 4:25-CV-02170
GATEWAY MORTGAGE,
Defendant.

ORDER

Before the Court are United States Magistrate Judge Peter Bray’s Memorandum and
Recommendation (Doc. #20), Plaintiffs Marquet and Zoisa Shumate’s (collectively, “Plaintiffs”)
Objections (Doc. #21), Defendant Gateway Mortgage’s Objections (Doc. #22), and Defendant’s
Response in Opposition to Plaintiff's Objections (Doc. #23). The Magistrate Judge’s findings and
conclusions are reviewed de novo, Fed. R. Civ. P. 72(b); 28 U.S.C. § 636(b}(1); United States v.
Wilson, 864 F.2d 1219, 1221 (Sth Cir. 1989). Having reviewed the parties’ arguments and the
applicable legal authority, the Court adopts in part and declines to adopt in part the Memorandum
and Recommendation.

In this case, Plaintiffs defaulted on their mortgage loan, prompting Defendant to foreclose
on Plaintiff's home. Doc, #20 at 1-2. Seeking to enjoin the foreclosure sale, Plaintiffs filed this
lawsuit in the 457th District Court of Montgomery County, Texas, alleging that Defendant violated
the Texas Property Code, committed wrongful foreclosure, and violated the Real Estate Settlement
Procedures Act. Doc. #1, Ex. 1. Defendant then removed the case to this Court based on federal

question jurisdiction and diversity jurisdiction. Doc. #1, Accordingly, Plaintiffs filed two identical

AUTHENTICATED
U.S. GOVERNMENT
INFORMATION

GPO

Case 4:25-cv-02170 Document 24 Filed 03/11/26 in TXSD Page 2of3

Motions to Remand, arguing the Court lacks subject matter jurisdiction over this matter. Doc. #6;
Doc. #9. Defendant filed its Motion to Dismiss pursuant to Federal Rule of Civil Procedure
12(b)(6), to which Plaintiffs did not respond. Doc, #7. In his Memorandum and Recommendation,
Magistrate Judge Bray recommends the Court deny the Motions to Remand, grant the Motion to
Dismiss, and deny Plaintiffs leave to amend.

Plaintiffs object to Magistrate Judge Bray’s finding that allowing Plaintiffs to amend their
complaint would be futile. Doc. #21. In their Objection, Plaintiffs offer additional facts they assert
will overcome the “futility” of amendment and also attempt to offer new causes of action. Jd.
However, Plaintiffs neither responded to Defendant’s Motion to Dismiss, nor previously requested
leave to amend, See Abraham vy. C/C PHH Mortg, Servs., No. 4:19-cv-4158, 2020 WL 826640, at
*3 (S.D. Tex. Jan. 29, 2020) (denying leave to amend where “Plaintiff failed to respond to
Defendant’s Motion to Dismiss and [did] not [seek] leave to amend”), report and recommendation
adopted, No. 4:19-cv-4158, 2020 WL 824104 (S.D. Tex. Feb. 19, 2020). Furthermore, the facts
Plaintiffs present in their Objection would not overcome the pleading defects addressed in
Magistrate Judge Bray’s Memorandum and Recommendation. Therefore, Piaintiffs’ objections
are overruled.

Defendant objects to Magistrate Judge Bray’s recommendation that this case be dismissed
without prejudice, which appears to have been a typographical error, Doc, #22, The
recommendation should have been to dismiss the case with prejudice, as Magistrate Judge Bray
made a determination on the merits of Plaintiffs’ claims and concluded that amendment would be
futile. See Goins v. Clear Creek Indep. Sch. Dist., No. H-24-3248, 2024 WL 5238663, at *9 (S.D.
Tex. Dec, 26, 2024) (dismissing claims with prejudice because amendment would be futile). As

such, Defendant’s Objection is granted.

Case 4:25-cv-02170 Document 24 Filed 03/11/26 in TXSD Page 3of3

In conclusion, the Court adopts in part and declines to adopt in part the Memorandum and
Recommendation (Doc, #20), Plaintiffs’ Motions to Remand (Doc. #6; Doc. #9) are hereby
DENIED. Furthermore, Defendant’s Motion to Dismiss (Doc. #7) is hereby GRANTED and
Plaintiffs claims are DISMISSED WITH PREJUDICE. The Court will enter a separate final
judgment.

tis so ORDERED.

MAR 1 1 2026 /

Date The Honorable Alfrel , Bemett
United States District Budge