Muehlenhaupt v. PHH Mortgage Corporation

CourtDistrict Court, N.D. Texas
DecidedAugust 26, 2025
Docket3:24-cv-03210
StatusUnknown

This text of Muehlenhaupt v. PHH Mortgage Corporation (Muehlenhaupt v. PHH Mortgage Corporation) is published on Counsel Stack Legal Research, covering District Court, N.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Muehlenhaupt v. PHH Mortgage Corporation, (N.D. Tex. 2025).

Opinion

IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

PETE MUEHLENHAUPT, § § Plaintiff, § § v. § Civil Action No. 3:24-CV-3210-N § PHH MORTGAGE CORPORATION, § et al., § § Defendants. §

MEMORANDUM OPINION & ORDER

This Order addresses Defendant PHH Mortgage Corporation’s (“PHH”) motion to dismiss [3]. For the following reasons, the Court grants Defendant’s motion and grants Plaintiff leave to amend his Complaint. I. ORIGINS OF THE MOTION This case arises out of a foreclosure following Plaintiff Pete Muehlenhaupt’s default on his mortgage loan. Pl.’s Pet. ¶¶ 16, 35–38 [1-D]. 1 PHH is a mortgage company. Id. ¶ 3. Muehlenhaupt and PHH entered a mortgage contract when Muehlenhaupt purchased the property at issue in this case. Id. ¶ 33. Muehlenhaupt defaulted on his mortgage because he failed to keep up with the required monthly payments under the note and deed of trust. Id. ¶ 35. Muehlenhaupt alleges that PHH told him that if he paid $17,398.25 before the foreclosure sale, PHH would reinstate the note and cancel the foreclosure sale.

1 For the purposes of this motion, the Court accepts the truth of all well-pleaded facts in Plaintiff’s petition, originally filed in state court. Id. ¶ 36. Muehlenhaupt paid $19,700.00 to PHH on November 1, 2024. Id. ¶ 37. Nevertheless, on November 5, 2024, PHH proceeded with the foreclosure and sold the property. Id. ¶ 38. Muehlenhaupt brought suit in state court to quiet title and for

declaratory judgment that he is the sole and rightful owner of the property. Id. ¶¶ 13, 22. He also brings claims under the Texas Deceptive Trade Practices Act (“DTPA”) and for breach of contract, fraud, and negligent misrepresentation. Id. ¶¶ 23–25; 33–48. PHH removed this case to federal court. Def.’s Removal 1. PHH now brings this motion to dismiss for failure to state a claim.2

II. TIMELINESS OF THE MOTION As a threshold matter, Muehlenhaupt argues that PHH is untimely. PHH filed the motion after a co-Defendant, AVT Title Services, LLC (“AVT”), filed an Answer to Muehlenhaupt’s original petition. According to Muehlenhaupt this violates Rule 12’s command that a party raising a defense under Rule 12(b) file before responsive pleading.

This is incorrect as a matter of law. Rather, under Rule 12(b), a party must raise a defense for failure to state a claim “before pleading if a responsive pleading is allowed” for that party. See FED. R. CIV. P. (12)(b). Thus, because PHH has not responded and AVT’s Answer has no effect in this analysis, the motion is timely.

III. RULE 12(B)(6) STANDARD When deciding a Rule 12(b)(6) motion to dismiss, a court must determine whether the plaintiff has asserted a legally sufficient claim for relief. Blackburn v. City of Marshall,

2 Muehlenhaupt presumably pled expecting the more lenient state pleading standard, but now is being measured against the stricter federal standard. 42 F.3d 925, 931 (5th Cir. 1995). A viable complaint must include “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). To meet this “facial plausibility” standard, a plaintiff must “plead[]

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). A court generally accepts well-pleaded facts as true and construes the complaint in the light most favorable to the plaintiff. Gines v. D.R. Horton, Inc., 699 F.3d 812, 816 (5th Cir. 2012). But a plaintiff must provide “more than labels and conclusions, and a formulaic recitation

of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (internal citations omitted). “Factual allegations must be enough to raise a right to relief above the speculative level . . . on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Id. (internal citations omitted). In ruling on a Rule 12(b)(6) motion, a court generally limits its review to the face

of the pleadings, accepting as true all well-pleaded facts and viewing them in the light most favorable to the plaintiff. See Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir. 1999). However, a court may also consider documents outside of the pleadings if they fall within certain limited categories. First, a “court is permitted . . . to rely on ‘documents incorporated into the complaint by reference, and matters of which a court may take judicial

notice.’” Dorsey v. Portfolio Equities, Inc., 540 F.3d 333, 338 (5th Cir. 2008) (quoting Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007)). Second, a “written document that is attached to a complaint as an exhibit is considered part of the complaint and may be considered in a 12(b)(6) dismissal proceeding.” Ferrer v. Chevron Corp., 484 F.3d 776, 780 (5th Cir. 2007). Third, a “court may consider documents attached to a motion to dismiss that ‘are referred to in the plaintiff’s complaint and are central to the plaintiff’s claim.’” Sullivan v. Leor Energy, LLC, 600 F.3d 542, 546 (5th Cir. 2010)

(quoting Scanlan v. Tex. A&M Univ., 343 F.3d 533, 536 (5th Cir. 2003)). Finally, in “deciding a 12(b)(6) motion to dismiss, a court may permissibly refer to matters of public record.” Cinel v. Connick, 15 F.3d 1338, 1343 n.6 (5th Cir. 1994) (citation omitted); see also, e.g., Funk v. Stryker Corp., 631 F.3d 777, 783 (5th Cir. 2011) (stating, in upholding district court’s dismissal pursuant to Rule 12(b)(6), that the “district court took appropriate

judicial notice of publicly-available documents and transcripts produced by the [Food and Drug Administration], which were matters of public record directly relevant to the issue at hand”). IV. THE COURT GRANTS MUEHLENHAUPT ADDITIONAL TIME TO SERVE PHH Muehlenhaupt Did Not Effect Valid Service of Process on PHH. PHH first moves to dismiss for insufficient service of process under Rule 12(b)(4) and (5) of the Federal Rules of Civil Procedure on the ground that Muehlenhaupt did not

properly serve PHH with process in accordance with Rule 4. Because Muehlenhaupt did not effect valid service of process on PHH, the Court grants Muehlenhaupt additional time to serve PHH. A federal court lacks personal jurisdiction over a defendant unless the defendant has received service of process in accordance with Rule 4. See Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 350–51 (1999) (explaining that service

of process is prerequisite to a court’s exercise of jurisdiction); Pavlov v. Parsons, 574 F. Supp. 393, 399 (S.D. Tex.

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551 U.S. 308 (Supreme Court, 2007)
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