Lovess v. Embrace Home Loans, Inc. et al
MEMORANDUM. Signed by Chief Judge James K. Bredar on 10/20/2017. (c/m 10/20/17 bmhs, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
EMBRACE HOME LOANS, INC., et al.,
CIVIL NO. JKB-17-2212
Plaintiff Cimon Lovess, proceeding pro se, filed a complaint on May 31, 2017 against
twenty-seven Defendants, mostly banks and mortgage lenders, in the Circuit Court of Baltimore
County, alleging violations of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681b.
(Compl., ECF No. 2.) Two of the Defendants, Discovery Financial Services and Discover Bank
(the “Discover Defendants”), removed the case to this Court on August 4. (Notice of Removal,
ECF No. 1.) The Discover Defendants then moved to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6) for failure to state a claim on August 11, 2017. (ECF No. 9.) Defendants
Bank of America, N.A. (“BANA”) and Paramount Equity Mortgage (“Paramount”) moved to
dismiss on the same grounds on August 25 and September 28, respectively.1 (ECF Nos. 14, 23.)
Plaintiff was granted additional time to respond to the Discover Defendants‟ Motion (see ECF
No. 20) but has not responded to the Discover Defendants‟ Motion, BANA‟s Motion, or
BANA was also a defendant in another action initiated by Ms. Lovess, Lovess v. Loandepot.com, LLC,
Civ. No. 17-2186 (D. Md.). The caption on BANA‟s motion suggests that its motion to dismiss is directed towards
both the instant case, Civ. No. 17-2212, and the other case, Civ. No. 17-2186. Lovess v. Loandepot.com, LLC, Civ.
No. 17-2186, was dismissed without prejudice by order of the Court on September 25, 2017, due to Plaintiff‟s
failure to prosecute. Paramount‟s motion will be construed as a motion to dismiss, and any additional facts provided
by Paramount beyond those in the Plaintiff‟s complaint are disregarded.
Paramount‟s motion and therefore all three motions are ripe for decision. It is not necessary to
have a hearing to resolve the matter. See Local Rule 105.6 (D. Md. 2016). Plaintiff‟s claim
against the Discover Defendants is not barred by the doctrine of res judicata, but Plaintiff has
failed to comply with the requirements of Federal Rule of Civil Procedure 8 and has therefore
failed to state a claim upon which relief can be granted. Therefore, Discover Defendants‟ motion
to dismiss, BANA‟s motion to dismiss, and Paramount‟s motion to dismiss will be granted by
In 2015, Plaintiff filed a complaint against nine defendants including Discover Products,
Inc. (improperly named in the action as “Discover Financial Services, Inc.”)3 in the Circuit Court
for Baltimore County, alleging inter alia violations of the Fair Credit Reporting Act (“FCRA”).
(Compl. in Lovess v. Discover Financial Servs., Inc., et al., Discover Defs.‟ Mot. Dismiss Ex. A,
ECF No. 9-3.) The only claim in that case (“Lovess I”) against Discover Products was that it,
along with several other companies, “knowingly and willfully used deception and false pretenses
to obtain Plaintiff‟s consumer report, by falsely representing or certifying that the report was
being obtained for a permissible purpose.” (Id. ¶ 29.) Somewhat more specifically, Discover
Products allegedly “obtained Plaintiff‟s credit report on 12/05/2014 [but] Plaintiff did not receive
a firm offer of credit from Discover and therefore it did not access Plaintiff‟s credit report for a
permissible purpose.” (Id. ¶ 20.) That case was removed to this court on May 29, 2015, and on
July 23, 2015 Plaintiff, by stipulation, dismissed her claims against Discover Products Inc. with
As this memorandum is evaluating a motion to dismiss, the facts are recited here as alleged by Plaintiff,
see Ibarra v. United States, 120 F.3d 472, 474 (4th Cir. 1997), or are taken from official public records, see
Witthohn v. Federal Ins. Co., 164 F. App‟x 395, 396 (4th Cir. 2006).
(See Stipulation of Dismissal of Plaintiff‟s Claims Against Discover Products Inc. in Cimon Lovess v.
Discover Financial Services, Inc., Civ. No. 15-1487 (D. Md.), docketed in that matter as ECF No. 46.)
prejudice, and the court approved that dismissal with prejudice by paperless order.4 (See Notice
of Removal in Cimon Lovess v. Discover Financial Servs. Inc., Civ. No. 15-1487 (D. Md.)
(“Lovess I”), docketed in that matter as ECF No. 1; Stipulation of Dismissal of Pl.‟s Claims
Against Discover Prods., Inc. in Lovess I, docketed in that matter as ECF No. 46, hereinafter
“Stipulation of Dismissal”; Paperless Order approving Stipulation of Dismissal in Lovess I,
docketed in that matter as ECF No. 48.)
The facts of the present case are similar, and few.
In 2016 Plaintiff checked her5
TransUnion and Experian credit reports. (Compl. ¶ 29.) On her Experian report, she noticed
“several credit inquiries by entities that [she] had no credit account or business relationship”
with. (Id. ¶ 35.) Among these “entities” were “Discover” and “BOA” (presumably referring to
Bank of America) and “Paramount.”
(Id. ¶ 36.)
Plaintiff attempted to contact these
organizations to determine why they had inquired as to her credit report but was unable to get an
answer. (Id. ¶ 37-38.) Plaintiff asserts, “upon information and belief” that all of the companies
that inquired into her credit report, including Discover Defendants, BANA, and Paramount
“knew, or should have known, that they were not obtaining Plaintiff‟s report for a permissible
(Id. ¶ 43.)
Essentially, Plaintiff appears to have arrived at this conclusion of
impropriety through deduction:
because “[n]one of the defendants offered the Plaintiff
preapproved credit or employment” or were potential investors, or creditors of the Plaintiff, or
The Discover Defendants point the Court in the direction of an October 26, 2015 Stipulation of Dismissal,
in which Plaintiff dismissed Credit One Financial with prejudice in Lovess I, and asserts that this is evidence that the
Discover Defendants were dismissed in Lovess I. (See Discover Defs.‟ Mot. Dismiss Mem. Supp. 2 ECF No. 9-1
(citing Stipulation of Dismissal of Defendant Credit One Financial, Discover Defs.‟ Mot. Dismiss Ex. B, ECF No. 94).) The Court is unaware why Credit One Financial‟s dismissal would serve as a dismissal of the Discover
Defendants in that case.
Plaintiff‟s gender is unclear from the filings. Plaintiff mostly refers to herself as “Plaintiff” in the
complaint. In paragraph 47 of the complaint Plaintiff states that Plaintiff has suffered “mental anguish and
emotional distress from the ongoing invasion of his privacy and the possibility of future unauthorized inquiries into
her personal financial information.” (emphasis added). The final paragraph of the complaint states, in part “Plaintiff
reserves his right to request legal fees in the event she retains an attorney.” (emphasis added). This memorandum
refers to Plaintiff with feminine pronouns.
“were completing a mortgage loan application” – all permissible purposes for inquiries under
FCRA, see 15 U.S.C. § 1681b(a)(3) – they must have been accessing Plaintiff‟s credit report for
an impermissible purpose. (See id. ¶42.)
Due to the Defendants‟ actions, Plaintiff “has suffered and will continue to suffer
considerable harm,” to wit: mental anguish and emotional distress resulting from the invasion of
her privacy, the “risk of additional instances of identity theft,” and the hassle of determining
whether Defendants acted improperly when they accessed her credit report. (Id. ¶ 49.) As a
result, Plaintiff requests $100,000 in actual damages, as well as $200,000 in punitive damages
“for violations of the FCRA” and $30,000 “or more” in “statutory damages.” (Id. ¶ 50.)
Discover Defendants raise the argument that Plaintiff lacks standing to litigate this claim
(they bury this argument in a footnote on the final page of their memorandum). In order for a
Plaintiff to have standing in Federal Court she “must have (1) suffered an injury in fact, (2) that
is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed
by a favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016). This
question of standing in this case, like Spokeo, “primarily concerns injury in fact.” Id.
In Spokeo, the plaintiff alleged that the defendant had provided incorrect information
about the plaintiff to a third party, in violation of FCRA Section 1681e and 1681b. Id. at 1545.
The Plaintiff did not, however, allege any actual injury; only that “Defendant [was] in violation
of a statute that grants individuals a private right of action,” and that plaintiff was “concerned
that the inaccuracies in his report will affect his ability to obtain credit, employment, insurance,
and the like.” Robins v. Spokeo, Inc., No. CV10-05306 ODW (AGRx), 2011 WL 597867 *1
(C.D. Cal. January 27, 2011) (quotations omitted) (alterations omitted) (emphasis in the
original). The Supreme Court held that the plaintiff “cannot satisfy the demands of Article III by
alleging a bare procedural violation [and] [a] violation of one of FCRA‟s procedural
requirements may result in no harm.” Spokeo, 136 S. Ct. at 1550. Essentially, the defendant
may have produced an inaccurate report about the plaintiff, in violation of FCRA, but plaintiff
failed to allege that this inaccuracy caused him any harm, and therefore he did not have standing
to sue the defendant. See id.
This case is very close to Spokeo, but not quite there. Plaintiff is similarly alleging a
procedural violation of FCRA and claiming that she is harmed by potential future consequences.
But she has also alleged actual damages in the amount of $100,000 stemming from emotional
distress and mental anguish, and therefore this is not a “bare” procedural violation of the type at
issue in Spokeo. To be sure, Plaintiff‟s conclusory allegations as to the amount of damage that
she has suffered due to Defendants‟ allegedly improper credit inquiries are not strong indication
of an injury in fact, as they are mostly based on emotional and mental distress and conjecture.
But the Court finds that they are sufficient to establish Article III standing, even if the overall
conclusory nature of Plaintiff‟s complaint is not sufficient to withstand the Defendants‟ motions
to dismiss, as will be discussed below.
Standard of Dismissal under Rule 12(b)(6)
Federal Rule of Civil Procedure 8 requires that a complaint must contain a “short and
plain statement of the claim showing that the pleader is entitled to relief.” This rule does not
require highly technical pleadings or “precise or magical words,” Stevenson v. City of Seat
Pleasant, Md., 743 F.3d 411, 418 (4th Cir. 2014), but it must be enough to put defendants on
notice of the nature of the claim that is being brought against them, see Barbee v. Coble, 208
F.R.D. 549, 551 (M.D.N.C. 2002). Thus,
[r]ule 8(a)(2) still requires a “showing,” rather than a blanket assertion, of
entitlement to relief. Without some factual allegation in the complaint, it is hard
to see how a claimant could satisfy the requirement of providing not only “fair
notice” of the nature of the claim, but also “grounds” on which the claim rests.
Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 555 n.3 (2007).
“[V]ague and conclusory
allegations are insufficient to satisfy the notice pleading requirements of the Federal Rules of
Civil Procedure.” MedImmune, Inc. v. Centocor, Inc., 271 F. Supp. 2d 762, 771 (D. Md. 2003).
Furthermore, a complaint must contain “sufficient factual matter, accepted as true, to
„state a claim to relief that is plausible on its face.‟” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Facial plausibility exists
“when the plaintiff pleads factual content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. An inference of
a mere possibility of misconduct is not sufficient to support a plausible claim. Id. at 679. As the
Twombly opinion stated, “Factual allegations must be enough to raise a right to relief above the
speculative level.” 550 U.S. at 555. “A pleading that offers „labels and conclusions‟ or „a
formulaic recitation of the elements of a cause of action will not do.‟ . . . Nor does a complaint
suffice if it tenders „naked assertion[s]‟ devoid of „further factual enhancement.‟” Iqbal, 556
U.S. at 678 (quoting Twombly, 550 U.S. at 555, 557). Although when considering a motion to
dismiss a court must accept as true all factual allegations in the complaint, this principle does not
apply to legal conclusions couched as factual allegations. Twombly, 550 U.S. at 555.
a. Res Judicata
The Discover Defendants first assert that this action is barred against them under the
doctrine of res judicata because they were defendants in Lovess I and were dismissed with
prejudice. Generally speaking, res judicata “bars the relitigation of claims that were raised or
could have been raised in the prior litigation.” Pittston Co. v. U.S., 199 F.3d 694, 704 (4th Cir.
1999). Specifically, “it bars such claims only when three elements are satisfied:
1) the prior judgment was final and on the merits, and rendered by a court of
competent jurisdiction in accordance with the requirements of due process; 2) the
parties are identical, or in privity, in the two actions; and, 3) the claims in the
second matter are based upon the same cause of action involved in the earlier
Id. (quotation and citation omitted). The first requirement is clearly satisfied here. A stipulation
of dismissal with prejudice “constitutes a final judgment on the merits for the purposes of res
judicata.” Sullivan v. Easco Corp, 662 F. Supp. 1396, 1408 (D. Md. 1987).
The second requirement is less clearly satisfied.
In this action, the “Discover
Defendants” are Discover Financial Services and Discover Bank.
Neither was clearly a
defendant in Ms. Lovess‟s lawsuit in 2015. That lawsuit did name “Discover Financial Services,
Inc.” as a defendant. However, in the Stipulation of Dismissal of Ms. Lovess‟s claims against
“Discover Financial Services, Inc.,” “Discover Financial Services, Inc.” noted that it was in fact
“Discover Products Inc.” that had been sued, and Discover Products Inc. had been “incorrectly
named and sued as „Discover Financial Services, Inc.‟”
(See Stipulation of Dismissal.)
“Discover Bank” was neither named as a party in Ms. Lovess‟s 2015 lawsuit, nor mentioned in
the Stipulation of Dismissal. Discover Financial Services and Discover Bank may very well be
in privity with Discover Products Inc., but counsel for the Discover Defendants has not provided
the Court with any information as to whether that is the case, and instead simply asserted that
“both Discover Defendants and Plaintiff were parties in Lovess I,” an assertion that, as far as the
Court can tell, is not entirely accurate. (Discover Defs. Mot. Dismiss Mem. Supp. 5.) Discover
Bank was decidedly not a party in Lovess I. Defendant Discover Financial Services, Inc. either
was a party in Lovess I, in which case Defendant‟s counsel in that matter incorrectly noted to the
court that it should have been named “Discover Products Inc.,” or Discover Financial Services,
Inc. was not a party in Lovess I, in which case Defendant‟s current counsel is incorrect in noting
to the Court that it was a party in Lovess I. Which “Discover” entity did what, when, is all very
confusing, but it is not necessary for the Court to sort it all out. That is because, even if
Defendant Discover Financial Services, Inc. was a party in Lovess I, or both Discover
Defendants were in privity with Discover Products Inc., the claims in this matter are not clearly
“based on the same cause of action involved in the earlier proceeding.” Pittston Co., 199 F.3d at
Whether or not claims are “based on the same cause of action” can be a thorny inquiry.
See Pittston, 199 F.3d at 704 (“No simple test exists to determine whether causes of action are
identical for claim preclusion purposes.”). Generally speaking, the two claims must arise from a
“common nucleus of operative fact.” See id. (quoting Restatement (Second) of Judgments § 24
cmt. b. (1982)). Importantly, res judicata “bars a plaintiff from asserting claims that were
already litigated or could have been litigated in a prior suit.” Turner v. Eastern Savings Bank,
FSB, Civ. No. 09-2637, 2010 WL 1409858 *3 (D. Md. 2010) (emphasis added). If a claim could
not have been brought when the Plaintiff brought her first action, then that claim cannot be part
of the “common nucleus of operative fact” underlying that first action and cannot be barred now
by res judicata.
In Lovess I, the Plaintiff alleged that Discover Financial Services, Inc. (or, perhaps,
Discover Products, Inc.) had “obtained Plaintiff‟s credit report on 12/05/2014.” In the present
action, Plaintiff claims that she obtained her Experian credit report sometime in 2016 and on that
report she noticed that both the Discover Defendants had inquired as to her credit. Plaintiff does
not provide any further information as to when either Discover Defendant made these allegedly
improper inquiries. If these inquiries were made in 2016, then this action would not be barred by
res judicata, as there is no way Plaintiff could have brought claims in 2015 based on improper
credit inquiries performed in 2016. If these inquiries were, however, the same inquiries made by
“Discover Financial Services, Inc.” in 2014 that gave rise to Lovess I but happened to also appear
on her 2016 Experian credit report, then this action would be barred by res judicata.
The Court will assume that the Plaintiff is referring to different credit inquiries in the
instant action than in Lovess I and therefore this action is not barred against either of the
Discover Defendants under the doctrine of res judicata. Pleadings are to be “construed so as to
do justice” and not construed strictly against the pleader. Fed. R. Civ. P. 8(e); see also Charles
A. Wright & Arthur R. Miller, 5 Fed. Prac. and Proc. Civ. § 1286 (3d ed.). In fact, as this is a
motion to dismiss, all inferences should be drawn in favor of the Plaintiff. Sun Dun, Inc. of
Washington v. Coca-Cola Co., 740 F. Supp. 381, 385 (D. Md. 1990). Therefore, the Court will
not construe this ambiguity against the Plaintiff, will instead infer that she is referring to credit
inquiries performed in 2016 and not just appearing on her 2016 Experian report, and will find
that this claim is not barred by res judicata. However, the ambiguity and lack of detail in
Plaintiff‟s complaint that almost led to the Court finding in the alternative on this issue will
prove too much for Plaintiff to survive the Defendants‟ motions to dismiss under Rule 12(b)(6).
b. Rule 8 and 12(b)(6)
Rule 8 requires a short and plain statement of the claim, but this claim must at least be
enough to provide notice to defendants what the nature of that claim is such that they can
properly respond. Plaintiff‟s complaint essentially lumps all of the (twenty-seven) Defendants
together, alleging that they inquired into her credit report and did so with an improper purpose,
but it provides nothing specific, and nothing particular to any Defendant.
As the above
discussion of res judicata demonstrates, Plaintiff‟s complaint does not even clearly establish
when any of the credit inquiries were made, let alone when any particular inquiry was made by
any particular Defendant. Plaintiff may not have exact information about when these inquiries
were made, but she does not even allege a particular year; only that she noticed the inquiries in
Nor does Plaintiff allege any particular purpose for these credit inquiries with regard to
any specific Defendant. (See Compl. ¶ 44 (alleging, “upon information and belief” that all of the
Defendants obtained Plaintiff‟s credit report for “one or more of the following reasons” and then
listing various improper reasons, including “some other impermissible purpose.”)
simply alleges that (at some point in time) all of the Defendants made a credit inquiry and that
they did not do so for various legitimate purposes, and all of the Defendants must therefore have
made these inquiries for improper purposes.
These allegations, which do not distinguish
between any Defendants (except as to whether Plaintiff learned of their inquiries through
TransUnion or Experian), do not explain when any of the alleged impropriety occurred, and
assume an improper purpose for the Defendants‟ inquiries but do not actually allege one, are
insufficient to put the Discover Defendants, BANA, or Paramount on notice. Instead the
complaint simply states legal conclusions. (See, e.g., id. ¶ 50 (“The Defendants violations [sic]
were not only negligent but also willful within the meaning of 15 U.S.C. § 1681n(a).”) That is
insufficient under Rule 8 and the Defendants‟ motions to dismiss under Rule 12(b)(6) will be
The Court has inferred that these inquiries were made in 2016 because, in deciding on the Discover
Defendants‟ argument that Plaintiff‟s claim is barred by res judicata, the Court makes all inferences in Plaintiff‟s
favor, but that does not mean that her complaint sufficiently put Defendants on notice as to when these inquiries
Construing Plaintiff‟s claim generously and making all inferences in her favor, the Court
finds that Plaintiff‟s claim is not barred against the Discover Defendants under the doctrine of
res judicata. Nevertheless, Plaintiff‟s complaint does not meet the requirements of Rule 8 and
does not state a claim upon which relief can be granted under Rule 12(b)(6). Therefore, the
Discover Defendants‟, BANA‟s, and Paramount‟s motions to dismiss will be granted by
DATED this 20th day of October, 2017
BY THE COURT:
James K. Bredar
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