Arvest Bank v. MIDWAY MOTORS/ASBURY, LLC et al
ORDER AND OPINION GRANTING PLAINTIFF'S MOTION TO DISMISS DEFENDANTS' AFFIRMATIVE DEFENSES AND COUNTERCLAIMS UNDER THE EQUAL CREDIT OPPORTUNITY ACT, 8 . Signed on 9/19/16 by District Judge Ortrie D. Smith. (Matthes Mitra, Renea)
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
MIDWAY MOTORS/ASBURY, LLC,
GAYLE DIETZ, and RAELENE
Case No. 16-00797-CV-W-ODS
ORDER AND OPINION GRANTING PLAINTIFF’S MOTION TO DISMISS
DEFENDANTS’ AFFIRMATIVE DEFENSES AND COUNTERCLAIMS
UNDER THE EQUAL CREDIT OPPORTUNITY ACT
Pending is Plaintiff Arvest Bank’s Motion to Dismiss Defendants’ Affirmative
Defenses and Counterclaims. Doc. #8. Arvest Bank’s motion is granted.
According to the Complaint, in exchange for loans, Defendant Midway
Motors/Asbury, LLC (“Midway”) executed and delivered to Arvest Bank a promissory
note and an SBA Note wherein Midway promised to repay the loans. Doc. #1, ¶¶ 6, 8.
To ensure repayment of the notes, Defendants Gayle Dietz (“Gayle”) and Raelene Dietz
(“Raelene”) executed personal guaranties. Id., ¶¶ 7, 9.
For default in payment and performance of Midway’s obligations under the SBA
note, the trustee under a deed of trust securing the SBA Note foreclosed on real
property in Jasper County, Missouri. Id., ¶ 13. Arvest Bank has demanded full payment
of the balance remaining on the SBA note, but according to Arvest Bank, Defendants
have refused to pay the debt. Id., ¶¶ 14-16. Arvest Bank filed this lawsuit alleging
claims of breach of promissory note against Midway, and breach of guaranties against
Gayle and Raelene. Id., ¶¶ 17-35.
In their Answer, Defendants alleged affirmative defenses and counterclaims
against Arvest Bank claiming, among other things, the guaranties executed by Gayle
and Raelene violated the Equal Credit Opportunity Act (“ECOA”), 12 C.F.R. § 1002 et
seq., in that Midway discriminated against the marital status of the company’s members
and their spouses. Doc. #6, ¶¶ 28, 37, 42-50. Arvest Bank moves to dismiss
Defendants’ affirmative defenses and counterclaims under the ECOA because
Defendants failed to state a claim upon which relief may be granted in that Defendants
lack standing or the affirmative defenses and counterclaims are barred by the state of
In their affirmative defenses and counterclaims, Defendants contend Arvest Bank
violated the ECOA. Arvest Bank argues Gayle and Raelene do not have standing to
bring defenses or claims under the ECOA, and therefore, those affirmative defenses
and counterclaims should be dismissed.
Standing is one of several doctrines that reflects and enforces the fundamental
limitations on the judiciary’s role by insuring a party has a sufficient stake in the
outcome to warrant his, her, or its invocation of the federal courts’ jurisdiction.
Summers v. Earth Island Inst., 555 U.S. 488, 493 (2009). “[S]tanding is a jurisdictional
prerequisite that must be resolved before reaching the merits of a suit.” City of Clarkson
Valley v. Mineta, 495 F.3d 567, 569 (8th Cir. 2007) (citation omitted). When considering
a motion to dismiss for want of standing, this Court must accept as true all material
allegations of the complaint, and must construe the complaint in favor of the
complaining party. Clayton v. White Hall Sch. Dist., 778 F.2d 457, 458 (8th Cir. 1985)
(citation omitted). For a party to have standing, she must establish “she has suffered an
injury in fact that is concrete and particularized and actual or imminent, not conjectural
or hypothetical.” Sabri v. Whittier Alliance, 2016 WL 4409350, at *2 (8th Cir. Aug. 19,
2016) (citations and internal quotations omitted).
Unfortunately, both parties addressed the standing argument under the standard
for failure to state a claim and did not address the factors this Court must consider when
examining a motion to dismiss for want of standing. Accordingly, the Court is unable to
determine whether Gayle and Raelene have standing to bring their ECOA affirmative
defenses and counterclaims.
B. Failure to State A Claim
Arvest Bank also contends Gayle and Raelene fail to state a claim upon which
relief may be granted. The liberal pleading standard created by the Federal Rules of
Civil Procedure requires “a short and plain statement of the claim showing that the
pleader is entitled to relief.” Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam)
(quoting Fed. R. Civ. P. 8(a)(2)). “Specific facts are not necessary; the statement need
only ‘give the defendant fair notice of what the…claim is and the grounds upon which it
rests.’” Id. (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In ruling on a
motion to dismiss, the Court “must accept as true all of the complaint’s factual
allegations and view them in the light most favorable to the Plaintiff[ ].” Stodghill v.
Wellston Sch. Dist., 512 F.3d 472, 476 (8th Cir. 2008).
To survive a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to state a claim to relief that is plausible on its
face. A claim has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged. 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. Where a complaint
pleads facts that are merely consistent with a defendant's liability, it stops
short of the line between possibility and plausibility of entitlement to relief.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
In keeping with these principles a court considering a motion to dismiss
can choose to begin by identifying pleadings that, because they are no
more than conclusions, are not entitled to the assumption of truth. While
legal conclusions can provide the framework of a complaint, they must be
supported by factual allegations. When there are well-pleaded factual
allegations, a court should assume their veracity and then determine
whether they plausibly give rise to an entitlement to relief.
Id. at 679. A claim is facially plausible if it allows the reasonable inference that the
defendant is liable for the conduct alleged. See Horras v. Am. Capital Strategies, Ltd.,
729 F.3d 798, 801 (8th Cir. 2013); Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 594
(8th Cir. 2009).
“The ECOA makes it ‘unlawful for any creditor to discriminate against any
applicant, with respect to any aspect of a credit transaction…on the basis of…marital
status.” Hawkins v. Cmty. Bank of Raymore, 761 F.3d 937, 940 (8th Cir. 2014) (quoting
15 U.S.C. § 1691(a)), aff’d by an equally divided court, 136 S. Ct. 1072 (2016).
“Applicant” is defined as “any person who applies to a creditor directly for an extension,
renewal, or continuation of credit, or applies to a creditor indirectly by use of an existing
credit plan for an amount exceeding a previously established credit limit.” Id. (quoting
15 U.S.C. § 1691a(b)). Examining this definition, the Eighth Circuit concluded “a person
does not qualify as an applicant under the statute solely by virtue of executing a
guaranty to secure the debt of another.” Id. at 941. The Eighth Circuit further found “a
guarantor is not protected from marital-status discrimination by the ECOA.” Id. at 942.
Here, Gayle and Raelene are guarantors of the loans executed by Midway. Doc.
#1, ¶¶ 7, 9; Doc. #6, ¶¶ 7, 9. Gayle and Raelene, in their affirmative defenses,
specifically refer to their guaranties, and do not refer to applications. Doc. #6, ¶¶ 28(b),
28(e), 28(f), 37(b)-(c), 44-45, 47-48. Gayle and Raelene have not alleged they were
applicants or should be treated as applicants. As such, they have not set forth a
plausible claim under the ECOA. Therefore, Arvest Bank’s motion to dismiss Gayle’s
and Raelene’s affirmative defenses and counterclaims under the ECOA is granted.
Because the Court is granting Arvest Bank’s motion to dismiss on these grounds, it is
unnecessary for the Court to consider Arvest Bank’s argument that Gayle’s and
Raelene’s affirmative defenses and counterclaims are time-barred.
For the foregoing reasons, Arvest Bank’s motion to dismiss is granted.
IT IS SO ORDERED.
/s/ Ortrie D. Smith
ORTRIE D. SMITH, SENIOR JUDGE
UNITED STATES DISTRICT COURT
DATE: September 19, 2016
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?