Bell v. loanDepot.com, LLC
ORDER denying 16 Motion for Judgment on the Pleadings (Written Opinion) Signed by Senior Judge David S. Doty on 8/14/2017. (DLO)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 17-822(DSD/SER)
Terry L. Bell,
John H. Goolsby, Esq. and Goolsby Law Office, LLC, 475
Cleveland Avenue N, Suite 212, St. Paul, MN 55104, counsel for
Rory Mattson, Esq. and Hinshaw & Culbertson LLP, 333 South
Seventh Street, Suite 2000, Minneapolis, MN 55402, counsel for
This matter is before the court upon the motion for judgment
on the pleadings by defendant loanDepot.com, LLC.
Based on a
review of the file, record, and proceedings herein, and for the
following reasons, the court denies the motion.
This credit dispute arises out of plaintiff Terry Bell’s
alleged loan application with loanDepot.
Bell alleges that before
August 21, 2013, he “applied for a mortgage loan from loanDepot.”
Compl. ¶ 4.
According to Bell, on August 21, 2013, loanDepot sent
him an “Adverse Action Notification” denying the loan application
because of poor credit performance with loanDepot.
Id. ¶¶ 6-8.
Bell denies having had a previous loan relationship with loanDepot,
however, and contends that the information in the notification was
unidentified “false information” on his credit report unrelated to
prevented him from determining whether that “false information” was
affecting his credit and, specifically, his ability to secure a
loan from loanDepot.
Id. ¶¶ 12-16.
Bell claims that this
uncertainty “compounded and exacerbated” his “distress and alarm”
over his inability to remove the “false information” from his
Id. ¶ 17.
He also claims that he has suffered
Id. ¶ 18.
On February 24, 2017, Bell commenced the instant action in
Hennepin County District Court alleging violations of the Equal
Mortgage Originator and Servicer Licensing Act (RMOSLA). loanDepot
timely removed to this court and now moves for judgment on the
Bell again applied for a mortgage loan with loanDepot in
September 2013, but later withdrew the application. Answer ¶ 5;
id. Ex. A.
The September application has no bearing on this
Standard of Review
The same standard of review applies to motions under Federal
Rules of Civil Procedure 12(c) and 12(b)(6). Ashley Cnty., Ark. v.
Pfizer, Inc., 552 F.3d 659, 665 (8th Cir. 2009).
Thus, to survive
a motion for judgment on the pleadings, “a complaint must contain
sufficient factual matter, accepted as true, to state a claim to
relief that is plausible on its face.”
Braden v. Wal–Mart Stores,
Inc., 588 F.3d 585, 594 (8th Cir. 2009) (citation and internal
quotation marks omitted).
“A claim has facial plausibility when
the plaintiff [has pleaded] factual content that allows the court
to draw the reasonable inference that the defendant is liable for
the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
Although a complaint need not contain detailed factual
allegations, it must raise a right to relief above the speculative
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).
“[L]abels and conclusions or a formulaic recitation of the elements
of a cause of action” are not sufficient to state a claim.
556 U.S. at 678 (citation and internal quotation marks omitted).
Counts I and II of Bell’s complaint allege violations of the
ECOA and corresponding Regulation B, which establish procedural
requirements that creditors must follow in notifying applicants
when certain action is taken on credit applications. See 15 U.S.C.
§ 1691(d); 12 C.F.R. § 1002.9(a).
Under the ECOA, “within thirty
days ... after receipt of a completed application for credit, a
15 U.S.C. § 1691(d)(1).
If the applicant is denied
credit, he is “entitled to a statement of reasons for such action
from the creditor.”
Id. § 1691(d)(2); see also 12 C.F.R. §
“A statement of reasons meets the requirements of [the
ECOA] only if it contains the specific reasons for the adverse
loanDepot argues that the ECOA claims must be dismissed
because Bell “never submitted any mortgage application documents to
loanDepot in August 2013” and loanDepot was therefore not required
to provide any notification to Bell.
Def.’s Supp. Mem. at 1.
Bell alleges otherwise and also alleges that loanDepot failed to
provide the specific reason for its denial, as required.
Compl. ¶¶ 4-10.
The court cannot resolve such factual disputes on
a Rule 12 motion.
Bell has pleaded the requisite elements of his
claim under ECOA and Regulation B.2
As a result, the motion is
denied as to those claims.
The court is utterly unpersuaded by loanDepot’s argument
that Bell has not properly alleged that he “requested” a loan.
Indeed, Bell alleges that he “applied for a mortgage loan from
Compl. ¶ 4.
The semantic distinction loanDepot
attempts to draw between the words “request” and “apply” is
unavailing, both factually and legally.
III. RMOSLA Claim
Count III of the complaint alleges that loanDepot violated the
RMOSLA by inaccurately stating that it declined his August 2013
mortgage loan application because of poor credit performance with
Compl. ¶ 32.
The RMOSLA prohibits any “person acting
as a residential mortgage originator or servicer” from “mak[ing] or
caus[ing] to be made, directly or indirectly, any false, deceptive,
or misleading statement or representation in connection with a
residential loan transaction including, without limitation, a
regarding the borrower’s ability to qualify for any mortgage
Minn. Stat. § 58.13, subdiv. 1(a)(9).
injured by such a violation has a private right of action and may
punitive damages, as well as costs and reasonable attorney’s fees.
Minn. Stat. § 58.18, subdiv. 1.3
loanDepot argues that Bell has failed to properly plead this
claim because he has not suffered any monetary damages.
breadth of the remedies allowed under the statute and its function
as a consumer protection act, the court declines to dismiss on that
basis at this time.
Although the court is skeptical of the nature
and intensity of any emotional distress Bell may have experienced
Given the rights conferred by § 58.18, the court rejects
loanDepot’s argument that Bell was required to bring his claim
under the private attorney general statute, Minn. Stat. § 8.31.
as a result of the circumstances as pleaded, he has sufficiently
asserted cognizable damages for purposes of this motion.
The court is also unpersuaded by loanDepot’s argument that
Bell was required to plead detrimental reliance.
to no cases requiring a showing of detrimental reliance under these
Bell has properly pleaded causation, which is
sufficient for present purposes.
Bell has also properly pleaded
his claim under Rule 9(b), by setting forth the “who, what, when,
where, and how” of the alleged misrepresentation. United States ex
rel. Joshi v. St. Luke’s Hosp., Inc., 441 F.3d 552, 556 (8th Cir.
As a result, dismissal is also not warranted on the RMOSLA
Accordingly, based on the above, IT IS HEREBY ORDERED that the
motion for judgment on the pleadings [ECF No. 16] is denied.
Dated: August 14, 2017
s/David S. Doty
David S. Doty, Judge
United States District Court
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