Consequently, Horton and DHI owed no fiduciary duty to Plaintiff. See e.g., Priester v. JP Morgan Chase Bank, N.A., 708 F.3d 667, 677 (5th Cir. 2013), cert. denied, 134 S.Ct. 196 (2013); Balch v. JP Morgan Chase Bank, NA, 3:14-CV-3666-M, 2015 WL 1592386, at *6 (N.D. Tex. Apr. 8, 2015); Choe v. Bank of Am., No. 3:13-cv-120-D, 2013 WL 3196571, at *6 (N.D. Tex. June 25, 2013) (noting that "[u]nder Texas law, there is no special relationship between a mortgagee and a mortgagor that gives rise to a duty of care.") (citations omitted). Plaintiffs have alleged no facts establishing a "special relationship" that could give rise to a fiduciary duty.
Since Rule 9(b) provides that "[m]alice, intent, knowledge, and other conditions of a person's mind may be alleged generally," the sufficiency of these allegations do not turn on the applicability of Rule 9(b). In Balch v. JP Morgan Chase Bank, NA, No. 3:14-cv-3666-M-BN, 2015 WL 1592386, at *4 (N.D. Tex. April 8, 2015), the Court concluded that the plaintiff "fail[ed] to allege a misstatement of fact or a promise made with no intent to perform." The Court reasoned that, although intent "may be inferred from the party's subsequent acts after the representation is made ... Plaintiff's allegation that Defendant broke the alleged promise, alone, cannot support the inference that Defendant made the promise with no intent to keep it."
See Castillo, 2017 WL 2374441, at *6 (“Plaintiffs do not meet their summary judgement burden to provide evidence showing no genuine issue of material fact that their damages were produced and caused by Defendant's alleged failure to comply with the notice provisions.”) (citing Balch v. JP Morgan Chase Bank, N.A., No. 3:14-CV-3666-M, 2015 WL 1592386, at *3 (N.D. Tex. Apr. 8, 2015) (explaining that “[p]otential foreclosure is an insufficient basis for compensatory damages”)).
The statute of frauds, however, does not bar a fraud claim to the extent a party seeks reliance or out-of-pocket damages because such damages are not part of the benefit of the alleged bargain between the parties. Balch v. JP Morgan Chase Bank, NA, 3:14-CV-3666-M, 2015 WL 1592386, at *4 (N.D. Tex. Apr. 8, 2015); Haase, 62 S.W.3d at 799-800.
Texas law is in accord. See Balch v. JP Morgan Chase Bank, NA, No. 3:14-CV-3666-M, 2015 WL 1592386, at *3 (N.D. Tex. Apr. 8, 2015) ("Damages are an essential element to a breach of contract claim.") (citing Smith Int'l, Inc. v. Egle Grp., LLC, 490 F.3d 380, 387 (5th Cir. 2007)). According to its terms, Illinois law governs the License Agreement.
When the evidence is viewed in a light most favorable to the non-movant, Plaintiffs do not meet their summary judgement burden to provide evidence showing no genuine issue of material fact that their damages were produced and caused by Defendant's alleged failure to comply with the notice provisions. Balch v. JP Morgan Chase Bank, N.A., No. 3:14-CV-3666-M, 2015 WL 1592386, at *3 (N.D. Tex. Apr. 8, 2015) (explaining that "[p]otential foreclosure is an insufficient basis for compensatory damages"); see also Johnson v. Bank of America, N.A., No. H-13-2029, 2014 WL 4923970, at *8 (S.D. Tex. Sept. 30, 2014) (finding on summary judgment that plaintiffs did not prove any damages as a result of defects of the notice of default because no foreclosure sale had taken place and the plaintiffs had retained possession of the property). Plaintiffs have also not shown entitlement to attorney's fees because attorney's fees are typically not considered damages under Texas law.
However, "[p]otential foreclosure is an insufficient basis for compensatory damages." Balch v. JP Morgan Chase Bank, N.A., No. 3:14-cv-3666-M, 2015 WL 1592386, at *3 (N.D. Tex. Apr. 8, 2015). Additionally, this damage allegation is raised for the first time in their response and is therefore not part of the pleadings to be considered for purposes of the motion for judgment.