Allbrandt et al v. Bank of America N.A.
ORDER granting 17 Motion to Dismiss. Specifically, it is ORDERED that Plaintiffs' Claims are DISMISSED WITHOUT PREJUDICE. If Plaintiffs wish to proceed with their claims in this action, they must file within thirty (30) days from the date of this order an amended complaint that complies with the pleading requirements of Fed. R. Civ. P. 9(b) and 12(b)(6) as discussed in this order. By Judge Christine M. Arguello on 03/12/2015. (athom, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Christine M. Arguello
Civil Action No. 14-cv-01977-CMA-KMT
KRISTIANE K. ALLBRANDT, and
SHAWN W. ALLBRANDT
BANK OF AMERICA, N.A.,
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS
This matter is before the Court on Defendant Bank of America’s Motion to
Dismiss Pursuant to Fed. R. Civ. P. 9(b) & (g) and Fed. R. Civ. P. 12(b)(6) (Doc. # 17),
filed on August 27, 2014. For the reasons discussed below, Defendant’s motion is
Plaintiffs Kristiane K. Allbrandt and Shawn W. Allbrandt formerly owned and
resided in a home in Pierce, Colorado. Plaintiffs purchased their home in September of
1999 and refinanced with Hometown Mortgage in 2003. Sometime thereafter, the loan
servicing was transferred to Countrywide, and then to Defendant. (Doc. # 16 at 1-2.)
Unless otherwise noted, the following facts are allegations from Plaintiffs’ Amended Complaint
(Doc. # 16) and are deemed true for purposes of the instant motion.
In January 2010, Plaintiffs filed Chapter 7 Bankruptcy. Between that time and
December 2012, they continued to make mortgage payments for their home, but
Defendant failed to credit the payments. In February 2010, Defendant offered to “fix”
the mortgage by doing a loan modification. Defendant told Plaintiffs that it would accept
payments only after the modification process was completed. Between February 2010
and April 2013, Plaintiffs completed seven home loan modification applications. From
February 2010 to September 2013, there were more than 200 telephone calls, many of
which were recorded by Ms. Allbrandt, in which Defendant misrepresented that it was
processing the loan documents. Defendant would also misrepresent that the
application was incomplete or that it had misplaced or lost information. During this time,
Defendant also misled Plaintiffs about the status of the foreclosure of their home by
saying that the home was not in foreclosure while moving ahead with the foreclosure.
(Id. at 2-3.)
Plaintiffs allege that they contacted the Office of the CEO and President, which
Defendant “holds out” to customers as a way to reach persons with actual power to
clear up problems, including loan modification issues. However, the Office of the CEO
and President “does not exist.” Instead, Defendant hires outside contractors to hold
themselves out as the Office of the CEO and President and few, if any, of these offices
have any actual contact with Defendant’s CEO and President. (Id. at 3-4.)
Following the foreclosure sale of Plaintiffs’ home on June 5, 2013, Ms. Allbrandt
recorded various phone calls with Defendant’s employees in which they misinformed
her about the status of the foreclosure and Plaintiffs’ requested loan modification. Ms.
Allbrandt also attempted to contact the Office of the CEO and President to resolve
problems related to the foreclosure and loan modification. (Id. at 4-8.)
In addition to allegations related to the foreclosure of their home, Plaintiffs allege
facts from a separate lawsuit in the United States District of Massachusetts, in which
former employees aver that Defendant “employed a common strategy of delaying [loan
modification] applications” and told customers documents had not been received, when,
in fact, they had. (Id. at 9.) One employee averred that Defendant encouraged its
employees to maximize fees by “fostering and extending delay of the [loan modification]
process by any means they could—this included lying to customers.” (Doc. # 16 at 10.)
Another employee stated that, based on her observations, Defendant “was trying to
prevent as many homeowners as possible from obtaining permanent . . . loan
modifications while leading the public and the government to believe that it was making
efforts to comply with [the Department of Treasury's Making Home Affordable
Modification Program (“HAMP”)]. (Id. at 11.)
On August 13, 2014, Plaintiffs filed an Amended Complaint, alleging Defendant
(1) engaged in fraudulent misrepresentation; (2) violated the Colorado Consumer
Protection Act (“CCPA”); (3) violated the Real Estate Settlement and Procedures Act
(“RESPA”); 2 and (4) violated the Equal Credit Opportunity Act (“ECOA”). (Doc. # 16 at
14-17.) Defendant moves to dismiss all claims. (Doc. # 17.)
Plaintiffs have agreed to withdraw this claim. (Doc. # 18 at 3.) Therefore, the Court dismisses
the claim without prejudice.
II. STANDARD OF REVIEW
Defendant brings the instant motion to dismiss pursuant to Fed. R. Civ. P.
12(b)(6) for failure to state a claim upon which relief can be granted. The purpose of
such a motion is to “test the sufficiency of the allegations within the four corners of the
complaint.” Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir. 1994). The “question
is whether, if the allegations are true, it is plausible and not merely possible that the
plaintiff is entitled to relief under the relevant law.” Christy Sports, LLC v. Deer Valley
Resort Co., Ltd., 555 F.3d 1188, 1192 (10th Cir. 2009). A complaint will survive a Rule
12(b)(6) motion only if it contains “enough facts to state a claim to relief that is plausible
on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “The plausibility
standard is not akin to a probability requirement, but it asks for more than a sheer
possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quotation marks and citation omitted).
In reviewing a Rule 12(b)(6) motion, a court must accept all the well-pleaded
allegations of the complaint as true and construe them in the light most favorable to
the plaintiff. Williams v. Meese, 926 F.2d 994, 997 (10th Cir. 1991). Nevertheless,
a complaint does not “suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual
enhancement.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557). The court’s
function “is not to weigh potential evidence that the parties might present at trial, but to
assess whether the plaintiff’s complaint alone is legally sufficient to state a claim for
which relief may be granted.” Miller v. Glanz, 948 F.2d 1562, 1565 (10th Cir. 1991).
When claims sound in fraud, Fed. R. Civ. P. 9(b) further requires that Plaintiffs
“state with particularity the circumstances constituting fraud . . . .” The Tenth Circuit has
interpreted Rule 9(b) as requiring plaintiffs to “set forth the time, place, and contents of
the false representation, the identity of the party making the false statements and the
consequences thereof.” Tal v. Hogan, 453 F.3d 1244, 1263 (10th Cir. 2006). However,
the Federal Rules of Civil Procedure
do not require a factual basis for every allegation. Nor must every
allegation, taken in isolation, contain all the necessary information.
Rather, to avoid dismissal under Rules 9(b) and 8(a), plaintiffs need
only show that, taken as a whole, a complaint entitles them to relief.
U.S. ex rel. Lemmon v. Envirocare of Utah, Inc., 614 F.3d 1163, 1173 (10th Cir. 2010).
CLAIM ONE: FRAUDULENT MISREPRESENTATION
Plaintiffs allege Defendant fraudulently misrepresented the status of their loan
modification and foreclosure and the existence of an Office of the President and CEO
available to resolve issues and make decisions with regard to loan modifications.
To establish fraud, the plaintiff must show that the defendants made a
false representation of a material fact, knowing that representation to be
false; that the person to whom the representation was made was ignorant
of the falsity; that the representation was made with the intention that it be
acted upon; and, that the reliance resulted in damage to the plaintiff.
Tatten v. Bank of Am. Corp., 562 F. App'x 718, 721 (10th Cir. 2014) (order and
judgment) (citing Coors v. Sec. Life of Denver Ins. Co., 112 P.3d 59, 66 (Colo. 2005)).
Plaintiffs allege that there were “over 200 telephone calls” during which
Defendant misrepresented the status of their loan modification and foreclosure. (Doc. #
16 at 3.) Plaintiffs further allege that “by falsely encouraging [Plaintiffs] to apply for an
unavailable loan modification for over three years, [Defendant] deprived [them] of the
opportunity to save their [h]ome.” (Id. at 13.)
Defendant moves to dismiss this claim, pursuant to Rule 9(b), because Plaintiffs
have not “set forth the time, place, and contents of the false representation, the identity
of the party making the false statements and the consequences thereof.” Tal, 453 F.3d
at 1263. Defendant is correct. The only phone calls for which Plaintiffs allege a specific
date, speaker, and content took place after the foreclosure sale of their home on June
5, 2013, and even in these instances, Plaintiffs fail to indicate how these postforeclosure statements resulted in damage to them. 3 See id.
With respect to their claim that Defendant made fraudulent misrepresentations
that resulted in their “inability to save their home,” in order to comply with Rule 9(b),
Plaintiffs must specifically “set forth the time, place, and contents of the false
representation, the identity of the party making the false statements and the
consequences thereof.” 4 See id. Furthermore, these false representations must have
been made prior to the time at which the home went into foreclosure. See Tatten, 562
Plaintiffs allege in their response, “And of course, [Plaintiffs] were also damaged by having to
gather documents and fill out paperwork over and over again for a loan modification that
[Defendant] never intended to offer them.” (Id. at 13-14.) However, this allegation does not
appear in the Amended Complaint. See Mobley, 40 F.3d at 340.
Although Plaintiffs allege that Defendant’s false statements “put them further and deeper into
debt” (Doc. # 16 at 13-14), without further factual detail, this vague and conclusory statement is
not sufficient to save this claim.
F. App'x at 721 (reliance on the misrepresentation must result in damage to the
Plaintiffs also allege that Defendant “holds out” the Office of the CEO and
President as a way to reach persons with actual power to clear up loan modification
issues, but that the office is primarily run by independent contractors without any real
power. (Doc. # 16 at 3-4.) Again, Plaintiffs fail to plead the time, place, and identity of
the speakers who made a misrepresentation, and how they were damaged by relying
on those alleged misrepresentations. 5 See Tal, 453 F.3d at 1263.
Furthermore, the Court agrees that Plaintiffs have failed to state a claim pursuant
to Fed. R. Civ. P. 12(b)(6) for any false misrepresentations about the status of
foreclosure after July 11, 2013. “It is long-settled law that if a party claiming fraud has
access to information that was equally available to both parties and would have led to
the true facts, that party has no right to rely on a false representation.” Vinton v. Virzi,
2012 CO 10, ¶ 17, 269 P.3d 1242, 1247. The confirmation deed reflecting the Weld
County Public Trustee’s sale of Plaintiffs’ home was recorded with the Weld County
Clerk on July 11, 2013. (Doc. # 17-7.)6 This official record was equally accessible to
Plaintiffs as of that date. Therefore, Plaintiffs cannot state a claim for fraudulent
misrepresentation for alleged false statements regarding their home’s foreclosure status
and sale after July 11, 2013.
Plaintiffs do allege some specific conversations but, in those communications, Defendant
disclosed that the Office of the CEO and President was not the actual office of its CEO and
President—in other words, those conversations, according to Plaintiff, were truthful. Therefore,
Plaintiffs have inadequately pleaded a claim for fraudulent misrepresentation.
Plaintiffs do not dispute the authenticity of this exhibit.
CLAIM TWO: CCPA CLAIM
Plaintiffs assert that Defendant violated the Colorado Consumer Protection Act
(“CCPA”), Colo. Rev. Stat. § 6-1-105, by engaging in deceptive trade practices. (Doc. #
16 at 15.) To bring a private cause of action under the CCPA, Plaintiffs must allege:
(1) that the defendant engaged in an unfair or deceptive trade practice;
(2) that the challenged practice occurred in the course of the defendant’s
business, vocation, or occupation; (3) that it significantly impacts the
public as actual or potential consumers of the defendant’s goods,
services, or property; (4) that the plaintiffs suffered injury in fact to a legally
protected interest; and (5) that the challenged practice caused the
Rhino Linings USA, Inc. v. Rocky Mountain Rhino Lining, Inc., 62 P.3d 142, 146-47
(Colo. 2003) (citation omitted). Defendant contends that the claim fails because
Plaintiffs fail to sufficiently allege a public impact or that certain misrepresentations
caused their injury. (Doc. # 17 at 8.) 7
Public Impact Element
To sufficiently plead public impact, the challenged trade practice must be shown
to have significantly impacted the public. Rhino Linings, 62 P.3d at 146-47. The three
factors a court analyzes to determine whether such a pleading is sufficient are: “(1) the
number of consumers directly affected by the challenged practice, (2) the relative
sophistication and bargaining power of the consumers affected by the challenged
CCPA claims also must be pleaded with particularity pursuant to Fed. R. Civ. P. 9(b). Gates
Corp. v. Dorman Prods., Inc., No. 09-cv-02058, 2009 WL 5126556, at *5 (D. Colo. Dec. 18,
2009) (unpublished); Duran v. Clover Club Foods Co., 616 F. Supp. 790, 793 (D. Colo. 1985).
While “claims under the Act are not precisely actions for fraud . . . allegations of deceptive trade
practices under the Act are subject to Rule 9(b)’s requirement of particularity.” Duran, 616 F.
Supp. at 793. However, such particularity “only requires identification of the circumstances
constituting fraud.” Id. (internal quotation marks and citations omitted).
practice, and (3) evidence that the challenged practice has previously impacted other
consumers or has the significant potential to do so in the future.” Id. at 149 (citing
Martinez v. Lewis, 969 P.2d 213, 222 (Colo. 1998)).
Plaintiffs allege that Defendant “was engaged in a widespread pattern of
behavior calculated to deceive them and thousands of other consumers throughout
Colorado and the United States.” (Doc. # 16 at 13.) In addition, Plaintiffs included
portions of affidavits from former employees stating that Defendant had a policy of
delaying processing loan modification agreements and misinforming customers that
their applications were incomplete. (Id. at 9-13.)
First, Defendant argues that “almost all of the alleged misrepresentations made
to Plaintiffs appear to have been made in private conversations with [Defendant]
personnel.” (Doc. # 17 at 8.) However, by alleging that Defendant engaged in a
widespread practice, Plaintiffs sufficiently allege that the practice had an effect on
consumers generally and, therefore, does not allege “a purely private wrong.” U.S.
Welding, Inc. v. Burroughs Corp., 615 F. Supp. 554, 555 (D. Colo. 1985).
Next, Defendant contends that Plaintiffs’ allegations are insufficient because
“none of the quoted affiant testimony establishes that the alleged misrepresentations
were even communicated to anyone in Colorado . . . .” (Doc. # 17 at 8.) Plaintiffs
respond that Defendant’s “loan modification practices were also the subject of a lawsuit
brought by attorney generals of all the states, including the Attorney General of
Colorado.” (Doc. # 18 at 7.) Again, Plaintiffs have failed to plead this fact in their
Amended Complaint and the Court will not consider it. See Mobley, 40 F.3d at 340.
Moreover, Plaintiffs have not alleged any facts related to the number of consumers
directly affected by the challenged practice or the relative sophistication and bargaining
power of the consumers affected by the challenged practice. See Rhino Linings, 62
P.3d at 146-47. Plaintiffs must address these requirements to properly state a claim.
Defendant also contends that Plaintiffs do not sufficiently allege that their injuries
flow “from the conduct described by the affiants.” (Doc. # 17 at 8.) However, Defendant
appears to conflate the public injury requirement with the requirement that the
challenged practice caused the plaintiffs’ injury. Plaintiffs claim that Defendant’s
misrepresentations caused them to lose their house and offer the affiant’s statements to
show that the practice was widespread, not that the affiant’s statements caused
Nonetheless, the Court agrees that Plaintiffs have not adequately pleaded that
they suffered an injury because Defendant held out the Office of the CEO and President
with respect to their CCPA claim. Relatedly, for claims premised on omissions, the
Plaintiffs must sufficiently identify “the particular information that should have been
disclosed, the reason the information should have been disclosed, the person who
should have disclosed it, and the approximate time or circumstances in which the
information should have been disclosed.” Martinez v. Nash Finch Co., 886 F. Supp. 2d
1212, 1216 (D. Colo. 2012) (citing S.E.C. v. Nacchio, 438 F.Supp.2d 1266, 1277 (D.
Colo. 2006)). Plaintiffs have failed to allege facts related to these requirements.
Therefore, they have failed to state a CCPA claim.
CLAIM THREE: ECOA
In their Amended Complaint, Plaintiffs allege Defendant violated the Equal Credit
Opportunity Act (“ECOA”) by “failing to provide any notice of action taken on each of
[their] seven loan modification applications.” (Doc. # 16 at 16.) Defendant contends
this claim fails as a matter of law, arguing that because Plaintiffs were in default when
they submitted their applications for loan modification, Defendant was not required to
provide notice. Plaintiffs do not dispute that they were in default when they submitted
their loan modification applications and concede that Subsection 1691(d)(2) does not
apply to loans in default, but argue that their claim is made pursuant to Subsection
1691(d)(1), which provides a separate cause of action.
Subsections 1691(d)(1) and (d)(2) of the ECOA provide, in pertinent part:
Within thirty days . . . after receipt of a completed application for
credit, a creditor shall notify the applicant of its action on the application.
Each applicant against whom adverse action is taken shall be
entitled to a statement of reasons for such action from the creditor. A
creditor satisfies this obligation by—
(A) providing statements of reasons in writing as a matter of
course to applicants against whom adverse action is taken; or
(B) giving written notification of adverse action which discloses (i)
the applicant's right to a statement of reasons within thirty days
after receipt by the creditor of a request made within sixty days
after such notification, and (ii) the identity of the person or
office from which such statement may be obtained. Such
statement may be given orally if the written notification advises
the applicant of his right to have the statement of reasons
confirmed in writing on written request.
15 U.S.C. § 1691(d)(1)-(2).
The Tenth Circuit has not decided whether Subsections 1691(d)(1) and (d)(2)
impose separate obligations on creditors. Assuming arguendo that Subsection (d)(1)
provides a separate cause of action, 8 Plaintiffs fail to state a claim.
Plaintiffs make vague claims that they “completed and sent to [Defendant] the
first of what would be seven home loan modification applications between February of
2010 and April of 2013,” and those applications “had all of the documentation required,”
but that that Defendant “fail[ed] to provide any notice of action taken on each of
[Plaintiff’s] seven loan modifications.” (Doc. # 16 at 3, 16.)
The problem with Plaintiffs’ ECOA claim is twofold. First, they fail to allege the
dates on which they submitted completed applications, 9 making it impossible for the
Court to determine whether Defendant failed to provide notice of its actions within thirty
days. Second, Plaintiffs allege facts that are wholly inconsistent with their general
See, e.g., Offiah v. Bank of America, N.A., CIV.A. DKC 13-2261, 2014 WL 4295020, at *7 (D.
Md. Aug. 29, 2014); Piotrowski v. Wells Fargo Bank, N.A., No. CIV.A. DKC 11-3758, 2013 WL
247549, at *7 (D. Md. Jan. 22, 2013); Ortega v. Wells Fargo Bank, N.A., No. 3:11cv01734, 2012
WL 275055, at *4 (N.D. Ohio Jan. 31, 2012); Coulibaly v. J.P. Morgan Chase Bank, N.A., No.
DKC 10–3517, 2011 WL 3476994, at *16 (D. Md. Aug. 8, 2011).
“[A]n application in connection with which a creditor has received all the information that the
creditor regularly obtains and considers in evaluating applications for the amount and type of
credit requested (including, but not limited to, credit reports, any additional information
requested from the applicant, and any approvals or reports by governmental agencies or other
persons that are necessary to guarantee, insure, or provide security for the credit or collateral).
The creditor shall exercise reasonable diligence in obtaining such information.” 12 C.F.R. §
assertion that Defendant failed to provide any notice of action on each of their seven
loan modifications. Inconsistent allegations, by definition, are not well pleaded and this
Court need not accept them as true. See McKinley Med., LLC v. Medmarc Cas. Ins.
Co., No., 2012 WL 987821, *5 (D. Colo. Mar. 23, 2012) (a court “need not accept factual
claims that are internally inconsistent.”); Bryner v. Utah, No. 208–CV–463–CW–SA,
2010 WL 1253974 at *5 (D. Utah Mar. 24, 2010) (“The court need not accept as true
factual allegations that are contradicted by other factual allegations within the same
For example, Plaintiffs specifically state that during phone calls on July 30, 2013
and August 15, 2013, 10 Defendant informed them that the application was denied. (Id.
at 4-5.) Moreover, Plaintiffs’ Amended Complaint is replete with allegations that during
myriad phone calls between the parties, Defendant informed Plaintiffs that their
application was incomplete. (Id. at 3, 5.) Under 12 C.F.R. § 202.9(c), a creditor may
orally inform an applicant of the need for additional information. Accordingly, as stated,
Plaintiffs’ allegations imply that Defendant complied with its notice requirements, though
the Court cannot determine from the Amended Complaint whether Defendant’s
notifications were timely.
Plaintiffs’ use of “shotgun pleadings” does little to clarify these inconsistencies.
This Court has strongly criticized such use of “shotgun pleading,” by which a party
pleads several counts or causes of action, each of which incorporates by reference the
Plaintiffs’ Amended Complaint alleges that these conversations took place in 2014; however,
because the complaint was filed August 13, 2014, the year appears to be 2013, not 2014.
entirety of its predecessors. Int'l Acad. of Bus. & Fin. Mgmt., Ltd. v. Mentz, No. 12-CV00463-CMA-BNB, 2013 WL 212640, at *7 (D. Colo. Jan. 18, 2013) (citing Jacobs v.
Credit Suisse First Boston, No. 11–cv–00042, 2011 WL 4537007, at *6 (D. Colo. Sept.
30, 2011) (unpublished) (finding “shotgun pleading” to be a “defect” contributing to an
award of sanctions)). As this Court noted, “the shotgun pleader foists off one of the
pleading lawyer's critical tasks—sifting a mountain of facts down to a handful of those
that are relevant to a given claim—onto the reader.” Id. Courts roundly decry shotgun
pleading as a subject of “great dismay,” “intolerable,” and “in a very real sense . . . [an]
obstruction of justice.” Strategic Income Fund, L.L.C. v. Spear, Leeds & Kellogg Corp.,
305 F.3d 1293, 1295–96 n. 9, 10 (11th Cir. 2002). The Court will not act as counsel for
Plaintiffs and attempt to determine which facts support their ECOA claim.
If this claim is reasserted in any amended complaint, Plaintiffs must specifically
allege the dates they submitted complete applications, the dates and content of
conversations with Defendant about the status of those applications, and whether
Defendant failed to provide any notice of its action on the application within thirty days
of receipt. See 15 U.S.C. § 1691(d)(1). Because Plaintiffs have conceded that 15
U.S.C. § 1691e(f)’s five year statute of limitations bars damages for any alleged failure
to respond to loan applications filed prior to July 21, 2010 (Doc. # 18 at 9), they should
not reassert claims related to loan applications filed prior to July 21, 2010. If Plaintiffs
amend their complaint, they are on notice that the Court will review it holistically and if
the allegations supporting other claims, i.e., fraudulent misrepresentation or violations of
the CCPA, belie their ECOA claims, this claim will not survive another motion to
Based on the foregoing, Defendant Bank of America’s Motion to Dismiss
Pursuant to Fed. R. Civ. P. 9(b) & (g) and Fed. R. Civ. P. 12(b)(6) (Doc. # 17) is
GRANTED. Specifically, it is ORDERED that Plaintiffs’ Claims are DISMISSED
WITHOUT PREJUDICE. It is
FURTHER ORDERED if that Plaintiffs wish to proceed with their claims in this
action, they must file within thirty (30) days from the date of this order an amended
complaint that complies with the pleading requirements of Fed. R. Civ. P. 9(b) and
12(b)(6) as discussed in this order.
12 , 2015
BY THE COURT:
CHRISTINE M. ARGUELLO
United States District Judge
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