Ollie v. Waypoint Homes, Inc.

Filing 24

ORDER by Judge Yvonne Gonzalez Rogers Denying in part 17 Motion to Dismiss; Providing Plaintiff an Opportunity to Amend. The Court VACATES the hearing set for September 16, 2014. (fs, COURT STAFF) (Filed on 9/15/2014)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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LATARRA OLLIE, et al.,
Plaintiffs,

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v.

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United States District Court
Northern District of California

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Case No.: 14-CV-1996 YGR
ORDER DENYING IN PART DEFENDANT’S
MOTION TO DISMISS; PROVIDING PLAINTIFF
AN OPPORTUNITY TO AMEND

WAYPOINT HOMES, INC.,
Defendant.

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Now before the Court is Defendant Waypoint Homes’ Motion to Dismiss the complaint of
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Plaintiff Latarra Ollie, in which Plaintiff alleges that Defendant violated the Equal Credit
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Opportunity Act (“ECOA”) by failing to comply with the procedural protections due applicants in
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credit transactions.1

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A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the claims alleged in
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the complaint. Ileto v. Glock, Inc., 349 F.3d 1191, 1199–1200 (9th Cir. 2003). “Dismissal can be
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based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a
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cognizable legal theory.” Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). All
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allegations of material fact are taken as true and construed in the light most favorable to the
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plaintiff. Johnson v. Lucent Techs., Inc., 653 F.3d 1000, 1010 (9th Cir. 2011). To survive a motion
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to dismiss, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to
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Pursuant to Federal Rule of Civil Procedure 78(b) and Civil Local Rule 7-1(b), the Court finds
this motion suitable for resolution without oral argument. Accordingly, the Court VACATES the
hearing set for September 16, 2014.

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relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.

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Corp. v. Twombly, 550 U.S. 544, 557 (2007)).

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The core of the motion turns on the parties’ dispute over whether the transaction at issue

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here, as alleged in the complaint, constitutes a “credit transaction” that falls under the ECOA. The

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Court concludes that Plaintiff has met her burden in this regard at this juncture. See Brothers v.

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First Leasing, 724 F.2d 789 (9th Cir. 1984). Moreover, on the face of Defendant’s own letter, it

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appears that Defendant concedes independently that its actions against Plaintiff qualify as “credit

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transactions” and that it is therefore obligated to comply with the ECOA. (Letter of Denial from

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Defendant to Plaintiff, Exhibit A to Complaint, Dkt. No. 4.)

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Second, Defendant disputes whether Plaintiff has alleged adequately that harm resulted

United States District Court
Northern District of California

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from Defendant’s failure to comply with its obligations under the ECOA. The Court finds that she

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has. Damages stemming from an ECOA violation may include out-of-pocket monetary losses,

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injury to credit reputation, and mental anguish, humiliation or embarrassment. Anderson v. United

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Finance Co., 666 F.2d 1274, 1277 (9th Cir. 1982.) Plaintiff alleges that she was injured in the form

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of humiliation and embarrassment by the deprivation of information relating to her denied

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application for a residential lease upon Defendants’ running of a credit report. The Court finds

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Plaintiff’s allegation plausible and related to Defendant’s failure to comply with the ECOA.

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Third, Defendant disputes whether Plaintiff is entitled to request punitive damages for

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violations of the ECOA. She is. 15 U.S.C. § 1691e(b). For a violation of the ECOA, a plaintiff

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may be entitled to actual, compensatory and punitive damages, along with equitable relief and

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recovery for costs and attorney fees. Id. Punitive damages are not compulsory; an aggrieved party

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may be entitled to punitive damages “pursuant to section 1691e(b) if (1) the creditor wantonly,

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maliciously or oppressively discriminates against an applicant, or (2) the creditor acts in reckless

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disregard of the requirements of the law, even though there was no specific intention to

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discriminate on unlawful grounds.” Anderson, 666 F.2d at 1278 (internal quotations omitted).

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Here, Plaintiff has alleged that even though Defendant holds itself out as beholden to the ECOA, it

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nonetheless disregards the procedural protections due to applicants thereunder as a matter,

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seemingly, of course. Defendant argues the facts differ and that Defendant did not meet the

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standard for punitive damages (see Reply at 6-7), but that question is not suitable for resolution on

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a motion to dismiss. Plaintiff has sufficiently alleged that Defendant’s conduct raises a plausible

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claim for punitive damages under the statute.

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Fourth, Defendant argues that Plaintiff has not stated a claim for injunctive relief because

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she has not showed a threat of being harmed again by Defendant’s allegedly unlawful conduct. The

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Court finds this argument persuasive. An “[e]quitable remedy is unavailable absent a showing of

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irreparable injury, a requirement that cannot be met where there is no showing of any real or

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immediate threat that the plaintiff will be wronged again.” Murfitt v. Bank of Am. NA, EDCV 13-

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01182 JGB, 2013 WL 7098636, *8 (C.D. Cal. Oct. 22, 2013) (citing City of Los Angeles v. Lyons,
461 U.S. 95, 111 (1983) (emphasis supplied)). Although Plaintiff has posited that Defendants have

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United States District Court
Northern District of California

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perpetrated, essentially, a pattern and practice of holding themselves out as ECOA-covered and

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failing to comply with the ECOA, the complaint lacks any allegation that can support a finding that

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there is any immediate threat that Plaintiff continues to be or will be wronged again, or any basis

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for the Court’s finding that this requirement is met. Accordingly, Defendant’s motion on this

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ground is granted with leave to amend.

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Finally, the Court notes that in Plaintiff’s opposition to the motion, she indicates that she

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does not seek actual damages for herself, and that this representation is at variance with a statement

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in her complaint. Accordingly, Plaintiff shall have leave to amend her complaint to reflect

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accurately which damages she seeks.

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For the reasons stated above, Defendant’s Motion to Dismiss is DENIED in part. Plaintiff
shall have 30 days from the date of this Order to file an amended complaint.

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IT IS SO ORDERED.

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Date: September 15, 2014

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_______________________________________
YVONNE GONZALEZ ROGERS
UNITED STATES DISTRICT COURT JUDGE

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