Floyd et al v. Wells Fargo Home Mortgage Company

Filing 28

ORDER granting in part and denying in part 15 Motion to Dismiss Case. Signed by Judge Carl Barbier. (gec, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

FLOYD, ET AL.

CIVIL ACTION

VERSUS

NO: 11-2713

WELLS FARGO HOME MORTGAGE
CO.

SECTION: "J” (5)

ORDER AND REASONS
Before the Court are Defendant Wells Fargo Home Mortgage
Co.’s (“Wells Fargo”) Motion to Dismiss (Rec. Doc. 15),
Plaintiffs Marion and Cheryl Floyd’s opposition to same (Rec.
Doc. 17), Wells Fargo’s Reply (Rec. Doc. 23), the Floyds’ Surreply (Rec. Doc. 26), and Wells Fargo’s Opposition to the Floyds’
Sur-reply (Rec. Doc. 27).

Having considered the motion and legal

memoranda, the record, and the applicable law, the Court finds
that Wells Fargo’s Motion to Dismiss (Rec. Doc. 15) should be
GRANTED IN PART and DENIED IN PART.

PROCEDURAL HISTORY AND BACKGROUND FACTS
This lawsuit presents various contract and tort claims for

1

alleged improper accounting practices that allegedly have
resulted in financial harm to the plaintiffs in the form of high
interest rates, unfavorable credit reporting, high monthly
mortgage payments, and related financial injury.

Plaintiffs Mr.

and Mrs. Floyd allege that their bank, Defendant Wells Fargo,
erred in its accounting for two separate transactions.

The

Floyds allege that based on these two transactions, Wells Fargo
has increased their monthly mortgage note, has sent collection
notices, and has harassed them through its collection procedures.
The instant case was filed on October 31, 2011, but Plaintiffs
back in 2007 filed a lawsuit (the “2007 Action”) that in its
factual allegations appears nearly identical to the instant one.
The glaring difference in the complaints filed in 2007 and in
2011 is that the former contains—and the latter does not
contain—claims under the Fair Debt Collection Practices Act and
the Louisiana Unfair Trade Practices Act.

See Rec. Doc. 1-1, at

6-7 (attachment of 2007 complaint as exhibit to filing of 2011
complaint).

Without giving any written reasons and after hearing

oral argument on a motion to dismiss, Judge Porteous dismissed
the 2007 Action with prejudice as to federal claims but without
prejudice as to state law claims.
Doc. 38.

2

Civil Action No. 07-2917, Rec.

The complaint in the instant lawsuit alleges the following
facts.

Plaintiffs mistakenly made two mortgage payments instead

of one on November 15, 2006.

Upon discovering the double

payment, Mr. Floyd notified Defendant’s Customer Service
Department, who advised that a refund of one of the payments
would be made within five days.

The refund did not appear, so

Mr. Floyd called Defendant, who advised that the funds had been
credited to Plaintiffs’ account.

When Mr. Floyd asked which

account, Defendant’s representative repeated an account number
that did not match Plaintiffs’ account number.

The

representative stated that he would research the issue and take
the steps necessary to correct the problem.

By the end of

November, Plaintiffs’ account still had not been credited for the
mistaken double payment.

Mr. Floyd called to ask Defendant’s

Customer Service Department whether the overpayment could be
applied to the December 2006 payment obligation.
representative responded negatively.

The

Eventually, Plaintiffs

received reimbursement on December 15, 2006 through a credit to
their account.

Plaintiffs continued to make regular monthly

payments.
In February 2007, Defendant’s Collection Department called
the Floyds, seeking reimbursement for the alleged payment made to

3

Plaintiffs in November 2006, though Plaintiffs repeatedly told
Defendant that their checking account never reflected the alleged
reimbursement for the duplicate mortgage payment.

These events

constitute the first transaction (“Transaction One”).

Thus,

stated directly and by implication, Transaction One entails
factual allegations that (1) Plaintiffs mistakenly made a double
payment, (2) Defendant apparently credited the wrong account in
attempting to reimburse Plaintiffs for their double payment, (3)
Defendant then correctly credited Plaintiffs’ account, and (4)
Defendant mistakenly sought to collect from Plaintiffs the
payment that it actually made to the wrong account.

The second

alleged transaction (“Transaction Two”) is that in February 2007,
Defendant’s Collection Department called to inform Plaintiffs
that their January 2007 payment was never honored by the drawee
bank.
The complaint alleges that subsequent to Transactions One
and Two, a series of events transpired that caused Plaintiffs the
injuries sued upon.

It alleges that continuing from January

2007, Defendant sought reimbursement for the extra credit it
believed that it made in Transaction One and reimbursement for
the alleged dishonored check that is the subject of Transaction
Two.

Plaintiffs allege that Defendant’s Collection Department

4

made numerous threatening phone calls to attempt to collect the
reimbursements, as early as 8:30 a.m. Monday through Saturday.
They state that Defendant forwarded collection
notices—essentially stating that their account was placed into
arrears.

They aver that they called Defendant’s Customer Service

Department and spoke to numerous representatives to seek relief
from the non-stop telephone calls.
ever corrected the problem.

Plaintiffs claim that no one

They allege a “continuing

violation”:
19. To date, Defendants conduct has not halted.
Plaintiffs continue to suffer due to the fact that
Defendant will not correct its error. This continuing
violation occurs as Plaintiffs suffer economic loss
when they have to pay higher payments each month since
Defendant’s error.
20. Then, Plaintiffs suffer when Defendant continues to
report negative payment history which hinders
Plaintiffs’ ability to refinance their existing
mortgage at a lower rate.
21. Plaintiffs continue to suffer when they are stuck
in a mortgage rate which is more than two times higher
than the current existing rates.
Rec. Doc. 1, at 4.

The complaint brings causes of action in

tort, for breach of contract, for defamation, for intentional
infliction of emotional distress, and for declaratory and
injunctive relief.

Wells Fargo filed the instant motion to

dismiss on December 29, 2011.
5

THE PARTIES’ ARGUMENTS
Wells Fargo argues that the Floyds’ tort claims, claim for
nonpecuniary contract damages, and claims for injunctive and
declaratory relief should be dismissed.
the tort claims are facially prescribed.

First, it argues that
Prescription would have

begun to accrue from the date the two transactions were allegedly
mishandled, which was no later than February 2007.

While

prescription was interrupted by the commencement of the 2007
Action, it commenced anew upon dismissal of said action on
September 5, 2007.

See Civil Action No. 07-2917, Rec. Doc. 38

(September 5, 2007 order dismissing case).

Thus, Defendant

argues that any tort claims were prescribed no later than
September 5, 2008.

Further, it argues that Plaintiffs’ argument

concerning the “continuing tort” exception to prescription is
unavailing.

Namely, Plaintiffs’ allegation that they continue to

suffer injury and Defendant continues to report negative payment
history to credit reporting agencies does not invoke the
exception because only continual acts—not continuing injury—delay
the accrual of prescription.

Additionally, Defendant argues that

the fact that its alleged conduct “has not halted” because it
“will not correct its error” is insufficient as a matter of law
to invoke the continuing tort exception.

6

Rec. Doc. 15-1, at 7.

Second, Defendant argues that Plaintiffs have not pled a
plausible and legally valid tort claim.

It argues that the

defamation and intentional infliction of emotional distress
(“IIED”) claims fail.

As to the cause of action for defamation,

Plaintiffs have not alleged facts supporting the elements of such
a claim:

the allegedly defamatory words, the fact of

publication, falsity, malice, or a causal nexus to any actual and
actionable injury.

As to the cause of action for IIED, the facts

pled do not support a facially plausible claim under Louisiana
law.

Third, Wells Fargo argues that the Floyds may not recover

nonpecuniary damages in contract because the mortgage contract
was not by its nature intended to gratify a nonpecuniary interest
and because the facts pled do not support a conclusion that Wells
Fargo intended to aggrieve Plaintiffs’ feelings.

Fourth,

Defendant argues that equitable relief is not warranted or
available.

Namely, the claim for an injunction must be dismissed

because Plaintiffs have not alleged irreparable injury and
because they cannot demonstrate a substantial likelihood of
success on the merits; and the claim for declaratory relief
should be dismissed based on similar reasoning.
Defendant characterizes the present suit as Plaintiffs’
attempt to re-urge claims already litigated in the 2007 Action.

7

Defendant adverts that in the 2007 Action, the Floyds filed a
total of four complaints (including three amending ones).
Therefore, Defendant argues that at least as to the defamation
claim, Plaintiffs’ continued inability to come forward with basic
facts warrants dismissal with prejudice.1

Notably, Defendant

does not seek dismissal of the breach of contract claim.2
In opposition to the motion to dismiss, the Floyds, in
setting forth the Rule 12(b)(6) standard, implicitly argue that
their complaint contains enough factual matter to raise a
reasonable expectation that discovery will reveal evidence
supporting the elements of their claims.

They argue that their

complaint clearly describes facts supporting an invocation of the
continuing tort exception to prescription:

Defendant continues

to publish knowingly false, defamatory, and financially harmful
information to third parties, and this negatively impacts
Plaintiffs’ creditworthiness and financial health.

They also are

forced to pay higher mortgage interest rates each month and
undergo financial scrutiny at least twice per year, every year.
1
It pithily states, “All things must eventually come to an end - even
in litigation.” Rec. Doc. 15-1, at 12.
2

Further, unlike in the present case, Defendant in the 2007 Action had
argued that the 2007 complaint’s claim for breach of contract failed to state
a claim upon which relief can be granted. Civil Action No. 07-2917, Rec. Doc.
15-1, at 13-14 (arguing that the 2007 Action complaint had failed to specify
the contract alleged to be breached and had failed to provide the facts
constituting the breach).

8

As to the defamation claim, Plaintiffs argue that it meets all
the elements under Louisiana law:

Defendant has falsely,

intentionally, and continuously published to various third-party
financial and credit organizations that Plaintiffs were late in
making payments, when Defendant knew its own error was the cause
of mis-applied payments; and this has damaged Plaintiffs’ credit
and regard in the community.

Notably, Plaintiffs do not address

arguments concerning the IIED claim, any claim for contractual
nonpecuniary damages, or the claim for equitable relief.
Plaintiffs ask that they “be allowed an opportunity to conduct
discovery in which they believe will reveal evidence of each
element of their claim.”

Rec. Doc. 17, at 5.

In reply, Wells Fargo argues that Plaintiffs’ defamation
claim is preempted under the Fair Credit Reporting Act (“FCRA”).
It argues that the FCRA preempts all state law claims against
furnishers of information to consumer reporting agencies.

It

asserts that it is such a furnisher of information and that the
state law tort claims against it based on any allegedly tortious
incorrect reporting of the Floyds’ payment history are preempted.
It also argues that any possible FCRA claims were already
dismissed with prejudice in the 2007 Action, would be prescribed
by the FCRA’s statutory limitation provision, could not be

9

pressed forward in a private civil suit because of lack of
standing, and are legally insufficient because of the complaint’s
lack of specificity concerning such claims.

In their sur-reply,

the Floyds argue for a liberal construction of their complaint,
argue that the FCRA is not necessarily preemptive of a defamation
claim, and request time to amend their complaint if the Court
deems it necessary.

In a “sur-sur-reply,” Wells Fargo further

argues in support of its assertion that all state law defamation
claims against a furnisher of information are preempted by the
FCRA.

DISCUSSION
A.

Legal Standard
Under the Federal Rules of Civil Procedure, a complaint must

contain “a short and plain statement of the claim showing that
the pleader is entitled to relief.”

FED. R. CIV. P. 8(a)(2).

The

complaint must “give the defendant fair notice of what the claim
is and the grounds upon which it rests.”
Broudo, 544 U.S. 336, 346 (2005).
simple, concise, and direct.”

Dura Pharm., Inc. v.

The allegations “must be

FED. R. CIV. P. 8(d)(1).

To survive a Rule 12(b)(6) motion to dismiss, the plaintiff
must plead enough facts “to state a claim to relief that is

10

plausible on its face.”

Ashcroft v. Iqbal, __U.S.__, 129 S. Ct.

1937, 1949 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 547 (2007)).

A claim is facially plausible when the

plaintiff pleads facts that allow the court to “draw the
reasonable inference that the defendant is liable for the
misconduct alleged.”

Iqbal, 129 S.Ct. at 1949.

A court must

accept all well-pleaded facts as true and must draw all
reasonable inferences in favor of the plaintiff.

Lormand v. U.S.

Unwired, Inc., 565 F.3d 228, 232-33 (5th Cir. 2009); Baker v.
Putnal, 75 F.3d 190, 196 (5th Cir. 1996).

The court is not,

however, bound to accept as true legal conclusions couched as
factual allegations.
B.

Iqbal, 129 S. Ct. at 1949-50.

Prescription of Tort Claims
Tort claims under Louisiana law are subject to a liberative

prescription of one year.

LA. CIV. CODE art. 3492.3

The one-year

period for filing suit “commences to run from the day injury or
damage is sustained.”

Id.

Transactions One and Two, the

subsequent harassing calls, and the placing of Plaintiffs’
account in arrears by March 2007 are alleged to have caused
financial and personal injuries.

3

These injuries would be

Liberative prescription is a mode of barring of actions as a result of
inaction for a period of time. LA. CIV. CODE art. 3447.

11

sufficient to begin the accrual of the one-year prescriptive
period.

Of course, the 2007 Action interrupted the prescriptive

period, giving Plaintiffs another year in which to sue.4

This

period commenced on September 5, 2007—the date of the case’s
dismissal—and ended on September 5, 2008.

Therefore, as to the

conduct preceding the 2007 Action, suit is barred by liberative
prescription unless Plaintiffs can prove that some exception
applies.5
Plaintiffs’ complaint contains a separate section entitled
“CONTINUING VIOLATION,” in which they allege that they continue
to suffer because Defendant will not correct its error and
because Plaintiffs continue to suffer economic loss each month
from higher payments and a high mortgage rate.
4.

Rec. Doc. 1, at

These allegations do not invoke the “continuing tort”

doctrine.

The fact that an injury continues is not what counts,

but rather that a defendant continues to act tortiously.

See

Crump v. Sabine River Authority, 737 So. 2d 720, 728 (La. 1999)
4

Prescription is “interrupted” when suit is filed in a court of
competent jurisdiction and venue. LA. CIV. CODE art. 3462. “If prescription
is interrupted, the time that has run is not counted. Prescription commences
to run anew from the last day of interruption.” LA. CIV. CODE art. 3466.
5
“Under Louisiana law, when a defendant raising the exception of
prescription shows that the petition is prescribed on its face, the plaintiff
bears the burden of proving the prescriptive period has been suspended,
interrupted or renounced.” Wilhike v. Polk, 999 So. 2d 83, 85 (La. App. 4th
Cir. 2008).

12

(“A continuing tort is occasioned by unlawful acts, not the
continuation of the ill effects of an original, wrongful act.”).
Thus, the fact of continuing economic loss from Transactions One
and Two does not suspend the running of prescription.
Additionally, the allegation that “Defendant will not correct its
error,” Rec. Doc. 1, at 4, does not invoke the continuing tort
exception.

See Crump, 737 So. 2d at 729 (stating that the breach

of the duty to right a wrong cannot be a continuing wrong that
suspends the running of prescription).
Still, the complaint can be read as alleging recent tortious
conduct that is not barred by prescription, or as alternatively
invoking the continuing tort exception as to conduct that has
continued since 2007.

This is the alleged reporting by Defendant

of negative payment history.

See Rec. Doc. 1, at 4 (“To date,

Defendant[’]s conduct has not halted. . . . Plaintiffs suffer
when Defendant continues to report negative payment history . . .
.”) (emphasis added).

Thus, the Court holds that tort claims

pertaining to the continuous reporting of negative payment
history are not prescribed, but that other alleged tortious
conduct may not be sued upon because any claim based upon such
conduct is prescribed.

13

C.

Defamation Claim
Under Louisiana law, a successful cause of action for

defamation requires the existence of the following four elements:
(1) a false and defamatory statement concerning another; (2) an
unprivileged publication to a third party; (3) fault (negligence
or greater) on the part of the publisher; and (4) resulting
injury.

Costello v. Hardy, 864 So. 2d 129, 139 (La. 2004).

The

Court finds that Plaintiffs have pled facts which, taken as true,
establish a prima facie case of defamation to warrant denial of
Defendant’s request for dismissal.

First, although not

enumerating specific words, Plaintiffs allege false and
defamatory statements.

Rec. Doc. 1, at 4-5 (alleging that

Defendant reports negative payment history and records that are
erroneous).

Second, Plaintiffs allege that the statements were

published by Wells Fargo.

Id. at 5 (alleging that Defendant

publishes negative, incorrect payment records to third parties).
Third, Plaintiffs establish specific facts that, taken as true,
establish fault on Wells Fargo’s part.

Id. at 4-5 (alleging that

the publication resulted from a list of wrongful and illegal
practices used by Defendant).6

Fourth, Plaintiffs have alleged

6

Defendant makes much of the fact that Plaintiff has not alleged
malice. True, the Fifth Circuit in Hardy v. Hartford Insurance Co. listed
malice as an element of defamation under Louisiana law. 236 F.3d 287, 292
(5th Cir. 2001) (citing Cangelosi v. Schwegmann Bros. Giant Super Markets, 390

14

resulting injury.

Id. at 5 (seeking damages for financial

hardship resulting from negative publication of payment history).
Although Defendant argues that the defamation claim is not
factually pled so as to be facially plausible, the Court finds
the contrary is true based on the allegations of publication to
third parties of material that Plaintiffs allege to be erroneous
and injurious to both their reputation and their ability to
obtain credit and refinance their mortgage.
However, Defendant argues that to the extent the defamation
claim is based upon alleged publication to credit reporting
agencies, the claim is preempted by the Fair Credit Reporting
Act.

The FCRA is comprehensive legislation designed to regulate

the consumer reporting industry.

Ross v. F.D.I.C., 625 F.3d 808,

812 (4th Cir. 2010), cert. denied, 131 S. Ct. 2991 (2011).

Among

other things, the Act regulates information provided to consumer
reporting agencies (“CRAs”) by “furnishers of information.”

See

15 U.S.C. § 1681s-2(a)(1)(A) (imposing duty on “furnishers of

So. 2d 196, 198 (La. 1980)). However, the Louisiana Supreme Court,
recognizing the listing in Cangelosi of a malice element, explained that
“[t]he fault requirement is often set forth in the jurisprudence as malice.”
Costello, 864 So. 2d at 139 (citing Cangelosi, 390 So. 2d at 198). Thus,
Plaintiff’s allegations of fault are sufficient. Further, malice may be
alleged generally. FED. R. CIV. P. 9(b). Plaintiffs could be granted leave to
amend their complaint if arguendo a specific allegation of malice was
required.

15

information” to provide accurate information to CRAs).

One

section of the FCRA addresses the Act’s relationship to state
laws, and it provides, in pertinent part:

“No requirement or

prohibition may be imposed under the laws of any State . . . with
respect to any subject matter regulated under . . . section
1681s-2 of this title, relating to the responsibilities of
persons who furnish information to consumer reporting agencies .
. . .”

15 U.S.C. § 1681t(b)(1)(F).

Thus, Section 1681t(b)(1)(F)

appears to have a preemptive effect on state law in actions
against furnishers of information to a CRA—such as a bank like
Wells Fargo—where the conduct is subject to Section 1681s-2.
Section 1681s-2 pertains to the duties of furnishers of
information.

They have statutorily enumerated duties to provide

accurate information.

See 15 U.S.C. § 1681s-2(a).

To the extent

the Floyds’ defamation claim complains of inaccurate information
furnished by Wells Fargo to CRAs, seemingly the claim would
invoke Section 1681s-2 and, therefore, the preemptive rule of
Section 1681t(b)(1)(F).

Plaintiffs complain of “incorrect

payment records” published to third parties.

Rec. Doc. 1, at 5.

To the extent these third parties are CRAs, Plaintiffs have at
least alleged that Wells Fargo as a “furnisher of information”
has violated a duty to provide accurate information, which is

16

regulated under Section 1681s-2 and thus appears to be subject to
the FCRA’s preemptive provision in Section 1681t(b)(1)(F).

See

Macpherson v. JPMorgan Chase Bank, N.A., --- F.3d ----, 2011 WL
6450777, at *1 (2d Cir. 2011) (interpreting Section
1681t(b)(1)(F) to preempt state defamation law); Ayers v. Aurora
Loan Servs., LLC, 787 F. Supp. 2d 451, 457 (E.D. Tex. May 27,
2011) (where state law claim was based on allegation that
defendant furnished inaccurate information to a CRA, the FCRA
preempted the claim).
unsettled.

However, the law in this area is

Some courts have found that Section 1681t(b)(1)(F)

does not necessarily preempt a state law defamation claim.

See,

e.g., Carlson v. Trans Union, LLC, 259 F. Supp. 2d 517, 522 (N.D.
Tex. 2003).

Additionally, some courts interpret that section not

to apply to non-statutory state law.

See, e.g., id. at 521;

Manno v. Amer. Gen. Fin. Co., 439 F. Supp. 2d 418, 425 (E.D. Pa.
July 12, 2006).7
All of this is further complicated by the preexistence of
Section 1681h(e), which provides that “no consumer may bring any
action . . . in the nature of defamation . . . with respect to
the reporting of information against any . . . person who

7

Of course, arguably such a holding might not make a difference under
Louisiana defamation law, which is based in the general statutory rule
defining a tort. See LA. CIV. CODE art. 2315.

17

furnishes information to a consumer reporting agency” based on
information disclosed pursuant to Sections 1681g, 1681h, or
1681m, “except as to false information furnished with malice or
willful intent to injure such consumer.”

15 U.S.C. § 1681h(e).

Thus, while Section 1681t(b)(1)(F) appears to preempt all state
law claims, Section 1681h(e) appears to permit a defamation
action in situations involving malice or willful intent to
injure.8

Courts have taken three approaches in reconciling these

sections:

(1) Section 1681t(b)(1)(F) subsumes Section 1681h(e);

(2) Section 1681t(b)(1)(F) applies to state statutory regulation
and Section 1681h(e) applies to state tort actions; and (3)
Section 1681t(b)(1)(F) “should only be used to preempt state
actions premised upon a credit furnisher’s conduct occurring
after the furnisher receives notice of a dispute.”

Bank One,

N.A. v. Colley, 294 F. Supp. 2d 864, 868-69 (M.D. La. Nov. 5,
2003).

The Fifth Circuit in Young v. Equifax Credit Information

8

The Court notes Defendant’s argument that Section 1681h(e) does not
apply to furnishers of information, and thus cannot be a carve-out from the
preemptive effect of Section 1681t(b)(1)(F). Defendant acknowledges that the
Fifth Circuit has never addressed the applicability of Section 1681h(e) to a
furnisher of information and cites to the federal circuit decisions that have
addressed the issue. The Court, however, notes that Section 1681h(e)
explicitly provides for a cause of action against furnishers of information,
at least in some circumstances. See 15 U.S.C. § 1681h(e) (providing that no
consumer can bring an action for defamation “with respect to the reporting of
information against any consumer reporting agency, any user of information, or
any person who furnishes information to a consumer reporting agency” pursuant
to certain sections, unless certain conditions are met).

18

Services, Inc., 294 F.3d 631, 638 (5th Cir. 2002) stated that the
FCRA preempts state law defamation claims unless the plaintiff
proves malice or willful intent—which may suggest the second or
third approach.9

Thus, under the third approach to reconciling

Sections 1681t(b)(1)(F) and 1681h(e), if the conduct complained
of occurred prior to the furnisher of information receiving
notice of a dispute,10 and if the plaintiff proves the
defendant’s requisite mental state, his defamation claim may not
be preempted.
With the general factual allegations pled, it is impossible
for the Court to perceive the exact theory,11 and therefore
whether there is any preemption under Section 1681t(b)(1)(F).
Thus, dismissal of the defamation claim would be inappropriate.
9

The Fifth Circuit did not cite Section 1681t(b)(1)(F), so perhaps this
is even a fourth approach. It is definitely not the first approach because it
does not acknowledge Section 1681t(b)(1)(F) and therefore does not assert that
Section 1681t(b)(1)(F) subsumes Section 1681h(e). It may be the second
approach because it applies Section 1681h(e) to a tort action. It also may be
the third approach, though the court did not acknowledge the existence of
Section 1681t(b)(1)(F). The Court assumes the third approach for present
purposes—a more difficult interpretation for Plaintiffs to prevail—to
demonstrate that whatever Section 1681t(b)(1)(F) means, it should not result
in dismissal of the defamation claim at this stage.
10

See 15 U.S.C. § 1681s-2(b) (imposing certain duties upon furnishers
of information when they receive notice of a dispute regarding the
completeness or accuracy of any information provided to a CRA).
11

Namely, the following factual holes would need to be filled in to
answer the preemption question: To whom were the reports made? Was malice or
willful intent involved? Did the alleged reporting occur before or after
Wells Fargo allegedly received statutorily prescribed notice of a dispute
regarding the completeness or accuracy of information provided to a CRA? See
15 U.S.C. § 1681s-2(b)(1).

19

Although Defendant also argues that any FCRA claim would be res
judicata, the Court notes that the order dismissing the 2007
Action’s federal claims with prejudice did not address FCRA
claims, which were not alleged in the 2007 complaint.

Also,

although Defendant argues that any FCRA claim based on conduct
known by Plaintiffs and older than two years is prescribed under
the FCRA’s time limitation provision,12 as previously stated, the
complaint can be read as alleging continuing conduct that
occurred within the past 2 years.

Further, Defendant is correct

that there is no private right of action under Section 1681sSteed v. EverHome Mortg. Co., 308 F. App’x 364, 370 (11th

2(a).

Cir. 2009); Huertas v. Galaxy Asset Mgmt., 641 F.3d 28, 34 (3d
Cir. 2011).

However, looking at the complaint, it is unclear

whether the Floyds’ defamation claim would invoke that or a
different FCRA section.

See Young, 294 F.3d at 639 (noting that

Section 1681s-2(b), which imposes a duty on furnishers of
information to investigate and report disputed information after
receiving notice of a dispute, may provide a private right of
action, and that “[t]he plain language of the FCRA thus appears
to impose civil liability on ‘any person’ violating a FCRA duty
12

See 15 U.S.C. § 1681p (“An action to enforce any liability under this
subchapter may be brought . . . not later than the earlier of . . . 2 years
after the date of discovery by the plaintiff of the violation . . . or . . . 5
years after the date on which the violation . . . occurs.”).

20

unless some exception applies.”).

Plain and simple, Plaintiffs

have stated a claim under state defamation law.

Even though

there is possible preemption under the FCRA, because the exact
legal theory sued upon is unclear at this stage, it is
inappropriate to dismiss the defamation claim pursuant to the
FCRA.
D.

IIED Claim
Plaintiffs in their opposition do not oppose Defendant’s

request for dismissal of their IIED claim.
the IIED claim fails as a matter of law.

The Court finds that

Under Louisiana law, a

claim for IIED requires a showing that “(1) the conduct of the
defendant was extreme and outrageous; (2) the emotional distress
suffered by the plaintiff was severe; and (3) the defendant
desired to inflict severe emotional distress and knew that severe
emotional distress would be substantially certain to result from
the conduct.”

Murungi v. Tex Guaranteed, 693 F. Supp. 2d 597,

607 (E.D. La. Feb. 18, 2010), aff’d, 402 F. App’x 849 (5th Cir.
2010) (citing White v. Monsanto, 585 So. 2d 1205, 1209 (La.
1991)).

The most “severe” conduct alleged in the complaint is a

barrage of threatening phone calls at various times of the day
throughout the week.

This Court recognized in Murungi that

numerous harassing and embarrassing phone calls containing

21

obnoxious statements by the defendant were not enough to state an
IIED claim under Louisiana law.

Id. at 607-08.

Likewise, the

instant conduct of threatening phone calls and aggressive
collection practices fails to state an IIED claim.

It is not of

the requisite outrageous character and extremity in degree that
would “go beyond all possible bounds of decency.”

Id. at 608.

The IIED claim must be dismissed.
E.

Claim for Contractual Nonpecuniary Damages
Plaintiffs in their opposition do not oppose Defendant’s

request for dismissal of any claim for contractual nonpecuniary
damages.

The Court finds that to the extent the complaint brings

any such claim, it should be dismissed.

There are two methods

for recovery of nonpecuniary contractual damages under Louisiana
law:

(1) proof that the contract by its nature was intended to

“gratify a nonpecuniary interest” or (2) proof that the obligor
intended through his breach of contract to “aggrieve the feelings
of” the obligee.

LA. CIV. CODE art. 1998.

Plaintiffs have not

pled facts stating a claim under either theory.

As Defendant

adverts, the only contract even alluded to in the complaint would
be whatever agreement(s) governed Plaintiffs’ loan and mortgage
with Wells Fargo.

The Court agrees with Defendant that a

mortgage or loan contract does not by its nature satisfy a

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nonpecuniary interest.

See Morris v. Deluxe Check Printers,

Inc., 395 So. 2d 927, 930 (La. App. 2d Cir. 1981) (rejecting the
plaintiffs’ contention that their contract to purchase checks
satisfied an intellectual interest due to their desire to
maintain a relationship with a bank and to maintain good credit
standing).

Additionally, even if the complaint can be read as

alleging Defendant’s intentional breach of contract, the
complaint does not allege that Defendant intended to aggrieve
Plaintiffs’ feelings.

See Davis v. Allstate Ins. Co., 2009 WL

122761, at *7 (E.D. La. Jan. 15, 2009) (where the plaintiff did
not allege that the defendant intended to aggrieve or hurt her
feelings, she did not state a claim for relief under article
1998); Pinero v. Jackson Hewitt Tax Serv., Inc., 594 F. Supp. 2d
710, 718 (E.D. La. Jan. 7, 2009) (same result where plaintiff did
not allege that the motivating factor behind the breach of
contract was a desire to aggrieve the plaintiff’s feelings).

To

the extent the complaint brings a claim for contractual
nonpecuniary damages, it must be dismissed.
F.

Claim for Injunctive and Declaratory Relief
Plaintiffs in their opposition do not oppose Defendant’s

request for dismissal of their claim for injunctive and
declaratory relief from Defendant’s allegedly illegal conduct.

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However, the Court finds that Plaintiffs have pled sufficient
facts to avoid dismissal of their claim for equitable relief.
The Defendant argues that because Plaintiffs have not alleged
irreparable harm, injunctive relief may not be granted.

However,

“irreparable injury is not an independent requirement for
obtaining a permanent injunction; it is only one basis for
showing the inadequacy of the legal remedy.”
ARTHUR R. MILLER, & MARY KAY KANE, FEDERAL PRACTICE
at 94 (2d ed. 1995) (emphasis added).

CHARLES ALAN WRIGHT,
AND

PROCEDURE, § 2944,

Plaintiffs allege that

Wells Fargo refuses to stop its continuous negative financial
reporting.

Merely giving Plaintiffs damages would not adequately

remedy this alleged continuous wrongdoing.

Indeed, there is the

threat of future conduct based on Plaintiffs’ allegations.

CONCLUSION
In summary of the above and foregoing, the Court rules as
follows:
•

Tort claims based on conduct other than continuous reporting
to third parties are dismissed with prejudice as prescribed.

•

Claims for IIED and contractual nonpecuniary damages are
dismissed with prejudice.

•

Other claims [including tort claims based on continuous
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reporting (including defamation), breach of contract, and
claims for injunctive and declaratory relief] remain.
For the foregoing reasons, IT IS ORDERED that Wells Fargo’s
Motion to Dismiss (Rec. Doc. 15) is hereby GRANTED IN PART and
DENIED IN PART, as set forth above.
New Orleans, Louisiana, this 31st day of January, 2012.

____________________________
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE

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