Miami Valley Fair Housing Center, Inc. et al v. Henley Appraisals, LLC et al

Filing 33

DECISION AND ENTRY SUSTAINING IN PART AND OVERRULING IN PART THE MOTION TO DISMISS FILED BY DEFENDANTS U.S. BANCORP, INC., AND U.S. BANK NATIONAL ASSOCIATION (DOC.# 16 ) AND SUSTAINING THE MOTION TO DISMISS FILED BY DEFENDANTS KEVIN D. HENLEY AND HEN LEY APPRAISALS (DOC.# 28 ). Count Two is DISMISSED and all claims against U.S. Bancorp are DISMISSED. Counts One, Three, Four and Six may proceed against Defendant U.S. Bank National Association. Plaintiffs have 30 days from the issuance of this decision to file any motion seeking leave to amend their Complaint should they deem such an amendment necessary and consistent with Fed. R. Civ. P. Rule 11. Signed by Judge Walter H. Rice on 3/11/2025. (bjr)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
CARLOS TURNER, et al.
Plaintiffs,
Case No. 3:23-cv-371

v.
HENLEY APPRAISALS, LLC,
et al.,

JUDGE WALTER H. RICE

Defendants.

DECISION .~.ND ENTRY SUSTAINING !N PART AND OVERRULING IN
PART THE MOTION TO DISMISS FILED BY DEFENDANTS U.S.
BANCORP, INC., AND U.S. BANK NATIONAL ASSOCIATION (DOC.
#16) AND SUSTAINING THE MOTION TO DISMISS FILED BY
DEFENDANTS KEVIN D. HENLEY AND HENLEY APPRAISALS (DOC.
#28)

Plaintiffs Carlos Turner, Diana Davoli Turner (the "Turners"), and the Miami
Valley Fair Housing Center, Inc., (collectively, "Plaintiffs") filed this lawsuit against
Henley Appraisals, LLC, Kevin D. Henley ("Henley"), 1 U.S. Bancorp, Inc., and U.S.
Bank National Association ("U.S. Bank") (collectively, "Defendants"). Doc. 9.
Plaintiffs contend that Defendants discriminated against the Turners by artificially

1

Plaintiffs allege that Kevin D. Henley is the owner of Henley Appraisals, LLC. Doc. #9,
PagelD #224. Unless the Court specifically mentions otherwise, any references to "Henley"
concerns allegations, arguments, or analyze common to both Kevin D. Henley and Henley
Appraisals, LLC.

depreciating the appraisal value of their house . Id. at PagelD #239-40. Plaintiffs are
seeking relief under the Fair Housing Act, the Civil Rights Act of 1866, the Ohio Fair
Housing Act, and the Equal Credit Opportunity Act, as well as under state law
theories of both negligent misrepresentation and negligent hiring, training, and
supervision. Id. at PagelD #244-49.
Pending before the Court are two separate motions, both filed by Defendants.
U.S. Bank filed a Motion to Dismiss for Failure to State a Claim. Doc. #16. Plaintiffs
filed a response in opposition, Doc. #22, and U.S. Bank filed a reply in support of
their motion. Doc. #26. Henley also filed a separate Motion to Dismiss for Failure to
State a Claim. Doc. #26. Likewise, Plaintiffs filed a response to this motion, Doc .
#29, and Henley filed a reply. Doc. #30. Both motions are ripe for review.
For the reasons set forth below, U.S. Bank's Motion to Dismiss, Doc. #16, is
SUSTAINED IN PART and OVERRULED IN PART, and Henley's Motion to Dismiss,
Doc. #28, is SUSTAINED.
I.

Legal Standard

Federal Rule of Civil Procedure 8(a) provides that a complaint must contain "a
short and plain statement of the claim showing that the pleader is entitled to relief."
The complaint must provide the defendant with "fair notice of what the ... claim is
and the grounds upon which it rests." Bell At/. Corp. v. Twombly, 550 U.S. 544,
555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 4 7 ( 1957)) .
2

Federal Rule of Civil Procedure 12(b)(6) allows a party to move for dismissal
of a complaint on the basis that it "fail[s] to state a claim upon which relief can be
granted." The moving party "has the burden of showing that the [opposing party]
has failed to adequately state a claim for relief." DirecTV, Inc. v. Treesh, 487 F.3d
471, 476 (6th Cir. 2007), citing Carver v. Bunch, 946 F.2d 451, 454-55 (6th Cir.
1991 ). The purpose of a Rule 12(b)(6) motion to dismiss "is to allow a defendant to
test whether, as a matter of law, the plaintiff is entitled to legal relief even if
everything alleged in the complaint is true." Mayer v. Mylod, 988 F.2d 635, 638
(6th Cir. 1993). In ruling on the motion, the Court must "construe the complaint in
the light most favorable to the plaintiff, accept its [well-pleaded] allegations as true,
and draw all reasonable inferences in favor of the plaintiff." Treesh, 487 F.3d at
476.
Nevertheless, to survive a Rule 12(b)(6) motion to dismiss, the complaint must
contain "enough facts to state a claim to relief that is plausible on its face."

Twombly, 550 U.S. at 570. Unless the facts alleged show that the plaintiff's claim
crosses "the line from conceivable to plausible, [the] complaint must be dismissed."

Id. Although this standard does not require "detailed factual allegations," it does
require more than "labels and conclusions, and a formulaic recitation of the elements
of a cause of action will not do." Id. at 555. "Rule 8 ... does not unlock the doors
of discovery for a plaintiff armed with nothing more than conclusions." Ashcroft v.
3

Iqbal, 556 U.S. 662, 678-79 (2009). Legal conclusions "must be supported by wellpleaded factual allegations" that "plausibly give rise to an entitlement of relief." Id.
at 679.
To survive to the discovery phase, a plaintiff need only establish that the
pleadings be plausible, not probable. Watson Carpet & Floor Covering, Inc. v.

Mohawk Indus., Inc., 648 F.3d 452, 458 (6th Cir. 2011 }. "Ferreting out the most
likely reason for the defendants' actions is not appropriate at the pleadings stage."

Id.

II.

Procedural and Factual Background

Plaintiffs Diana Davoli Turner and Carlos Turner are a married couple who
reside in a house in Springboro, Ohio. Carlos Turner is a Black, African American
male and Diana Davoli Turner is a Canadian citizen with permanent residency in the
United States. Doc. #9, PagelD #218. Diana Davoli Turner purchased the house in
November 2020, and she, along with Carlos Turner, is a guarantor and mortgagor
on the applicable mortgage covering the property. Id. at PagelD #226.
When the Turner Plaintiffs purchased the property in November 2020, the
house had an unfinished basement which the Turners intended to, and did, renovate
at a cost of $30,000. Id. at Page ID #226-27. Since mortgage rates were generally
low at the time, the Turners began exploring the possibility of refinancing their
existing mortgage. Id. at Page ID #227. They received an appraisal from their lender

4

in March 2022, placing the value of their home at $520,000, but did not lock in the
rate. Id. at Pagel ? #227-28.
When rates began to rise around the country, the Turners explored other
options to refinance the home. One such option was U.S. Bank, which had
advertised opportunities to refinance loans at 4%. Id. at Pagel ? #228. Diana Davoli
Turner began working with U.S. Bank, hoping to "cash out" 2 approximately
$60,000. Id. The Turners' application was denied after a hard credit check, 3 to the
surprise of the couple. Id. Diana Davoli Turner visited a U.S. Bank branch in person
and spoke with an employee named Stephanie. Id. This employee provided a loan
disclosure form for a home equity loan of $55,000 at 5.9% interest and told Diana
Davoli Turner that the approval of the home equity loan would not be an issue. Id.
The resulting application was also denied. Id. at Pagel ? #229.

2

Plaintiffs employ the term "cash out" to describe their plan to refinance the house. Doc.
#9, PagelD #228. In essence, if the Turners were successful in refinancing the house, they
would be able to receive a payment commensurate with the equity they had built both by
paying down the original mortgage and by increasing the value of the house. See Refinancing
a Mortgage: Is it Right for You?, U.S. BANK, https://www.usbank.com/financialiq/manageyour-household/home-ownership/what-is-refinancing-a-mortgage.html (June 17, 2024).
3

A "hard credit check" occurs when lenders check a potential borrower's credit report. This
type of check will typically appear on the credit report itself and multiple credit checks within
a short period of time can negatively affect an individual's credit score. In comparison, a
"soft credit check" occurs when an individual checks their own credit or when a company
prequalifies an individual for a loan, but no application is submitted. Soft credit checks
typically do not affect an individual's credit score . See Ben Luthi, What Is a Hard Inquiry and
How Does It Affect Credit?, Experian (Nov. 8, 2024), https://www.experian.com/blogs/askexperian/what-is-a-hard-inquiry

5

After further communications with the bank, the Turners applied for a
$15,000 home equity loan at a rate of 6.25%. Id. While evaluating the application,
U.S. Bank performed a second hard credit check on the Turners, breaking a promise
made to Diana Davoli-Turner that their credit report would not be further affected by
the process. Id. Ultimately, this $15,000 loan was also denied. Id. The Turners were
given two reasons for the denial: ( 1) denial based on collateral; and (2) denial based
on history of delinquency. Id.
The Turners continued to work with U.S. Bank and reached out to Stephanie's
supervisor, Bruce. Id. at Pagel ? #230. Neither Stephanie nor Bruce could confirm
the existence of an internal company policy, but after conducting research though
the bank's website, the Turners learned that the bank's customary policy was that
they would be willing to loan up to 80% of a home's value through refinancing (an
80% Loan-to-value Ratio or "LtV"). Id. At any rate, U.S. Bank claimed they could
not loan up to an 80% LtV to the Turners because of Diana Davoli Turner's status
as a Canadian citizen. Id. As the Turners continued their application process, U.S.
Bank requested a copy of Diana Davoli Turner's green card as proof of her Permanent
Resident status. Id.
Finally, the Turners were approved for a Home Equity Line of Credit ("HELOC")
in April 2022. Id. As a part of the final approval, U.S. Bank ordered an appraisal of
the house, even though the house had been appraised 27 days earlier by a different
6

lender. Id. at PagelD #230-31. The second appraisal consisted of an external, driveby viewing of the property and was conducted by Residential Equity Specialists. Id.
at PagelD #231. Because the appraisal viewed only the exterior of the house, it did
not consider any efforts the Turners had expended remodeling the interior of the
house. Id. This second appraisal came back at $485,000. Id.
When Diana Davoli-Turner questioned why the interior was not considered in
this appraisal, U.S. Bank determined they would conduct a third appraisal with a
new appraiser who would consider the interior as well. Id. This new appraisal was
completed by Kevin Henley of Henley Appraisals, LLC. Id. at PagelD #232. When
the appraisal was finished, Henley valued the property at $470,000. Id. at PagelD
#233. The Turners, surprised that this appraisal came back lower, asked U.S. Bank
to disregard this third appraisal. Id. U.S. Bank responded by having Henley reconsider
the appraisal, a process in which Henley gathered more information about other
homes in the area. Id. at PagelD #234. Ultimately Henley stood by his appraisal and
U.S. Bank stated that the appraisal would be final. Id. In June 2022, understanding
that they had limited options and seeing that interest rates were continuing to rise,
the Turners accepted a HELOC with a credit limit of $34,363 for a 30-year term and
a variable interest rate. Id.
Believing that they had been unlawfully discriminated against, the Turners
contacted the Miami Valley Fair Housing Center ("MVFHC") which began to

7

investigate the matter. Id. at PagelD #237. MVFHC undertook a "whitewashed"
appraisal, in which the Turners removed all markers of Black or Canadian identity in
the home, including family photographs. Id. at PagelD #237-38. This whitewashed
appraisal, the fourth appraisal on the home in little more than a year, was completed
in May 2023, by an independent appraiser, Clark Davis. Id. at PagelD #238, 347.
This fourth appraisal came back with a valuation of $655,000. Id.
Plaintiffs filed this lawsuit on February 26, 2024, bringing six claims: ( 1)
violation of the Fair Housing Act, 42 U.S.C. § 3601, et seq., brought by all three
Plaintiffs against all Defendants ("Count One"); (2) violation of the Civil Rights Act
of 1866, 42 U.S.C. § § 1981, 1982, and 1988(a), brought by Plaintiff Carlos Turner
against all Defendants ("Count Two"); (3) violation of the Ohio Fair Housing Act,
Ohio Rev. Code § 4112.01, et seq., brought by all Plaintiffs against all Defendants
("Count Three"); (4) violation of the Equal Credit Opportunity Act, 15 U.S.C. § 1691,
et seq., brought by the Turners against U.S. Bank ("Count Four"); (5) Negligent

Misrepresentation, brought by the Turners against Henley ("Count Five"); and (6)
Negligent Hiring, Training, and Supervision, brought by the Turners against all
Defendants ("Count Six"). Doc. #9, PagelD #244-49.

Ill.

Analysis
Under federal law, venue is proper in the district "in which a substantial part

of the events or omissions giving rise to the claim occurred, or a substantial part of
8

property that is the subject of the action is situated ." 28 U.S .C.

§

1391 (b)(2).

Therefore, venue is proper in the Southern District of Ohio as the events are alleged
to have occurred in Springboro, Ohio, a city within the Southern District. To
determine the precise location within the Southern District in which the case properly
belongs, one must turn to the Local Rules.
Unlike the federal venue analysis, venue within the Southern District of Ohio
is based primarily on the residency of the defendants, permitting venue based on
alleged events only if no defendants are residents of the Southern District. S.D. Ohio
Civ. R. 82. 1 (e) (outlining venue determination based on events or omissions "[i]f no
defendant is a resident of this District"). The Amended Complaint provides no
allegations as to the residency of any of the named Defendants. If the Court were
to assume, then, that no Defendants are a resident of the Southern District, only
then would the venue determination hinge on the events described in the Amended
Complaint. However, it appears that the events occurred in Warren County, Ohio.
The Local Rules specify that actions arising from Warren County, Ohio, are to be
served by the Western Division at Cincinnati, rather than Dayton. S.D. Ohio Civ. R.
82.1 (b). But, as neither party has raised this issue, the Court considers the issue
waived under Fed. R. Civ. P. 12(h).
A full analysis of pending claims always requires a court to wade through
complex webs of facts and allegations. This is even more true here where there are
9

multiple claims brought by multiple plaintiffs against multiple defendants. In the
pursuit of efficiency and clarity, it is therefore prudent to untangle this web by
looking at the conduct which lays at the hub of the case before analyzing the
separate claims. These allegations can broadly be separated into two discrete series
of events, both of which will need to be addressed: (1) the appraisal process itself
and the value that it concluded the house was worth; and (2) the decision-making
process that U.S. Bank employed when it determined whether, and how, to extend
an offer to refinance.
Plaintiffs allege that Henley performed the appraisal of the house at the
invitation of U.S. Bank and that U.S. Bank endorsed the appraisal, including any
discriminatory practices that occurred, after learning of the allegations. Doc. #9,
PagelD #241-42. Plaintiffs do not allege, however, that Henley had anything to do
with the decision process that U.S. Bank employed to ultimately determine the
Turners' eligibility to refinance. While Defendants refute many of these allegations,
at this stage the Court must view the facts in the light most favorable to Plaintiffs.
Therefore, to decide the pending motions, the Court will consider both the appraisal
process and the decision-making process to determine whether the claims against
U.S. Bank may proceed, but the Court will only consider the events of the appraisal
process itself in determining whether the claims against Henley may proceed.

10

A.

Conclusory v. Factual Allegations

At this stage in the proceeding, the Court is bound to view the alleged facts
in the light most favorable to Plaintiffs. Even so, this standard does not apply to
conclusory allegations. 16630 Southfield Ltd. P'ship v. Flagstar Bank, F.S.B., 727
F.3d 502, 504 (6th Cir. 2013). However, delineating conclusory allegations from
factual allegations is anything but an easy task. Black's Law Dictionary defines
conclusory as "Expressing a factual inference without stating the underlying facts
on which the inference is based." Conclusory, BLACK'S LAW DICTIONARY (11th ed.
2019). Such a relatively short definition does little to provide clarity to the issue, so
the Court must turn to caselaw to find guidance.
Perhaps the most apparent demonstration of the fact-conclusion pleading
requirement is Bell At/. Corp. v. Twombly, 550 U.S. 544 (2007). In Twombly, the
plaintiff, William Twombly, alleged that four telephone companies had worked
together by agreeing not to compete against each other in violation of federal
antitrust laws. Id. at 551. At first glance, one might argue that he provided the
required factual allegations to get past a motion to dismiss. After all, Mr. Twombly
identified the telephone companies involved and the business practices that he
believed to be in violation of the law. However, the Court determined his allegations
were inadequate conclusory statements. Id. at 556. Noting that Mr. Twombly had
not provided any allegations of express communications between the telephone

11

companies regarding a tacit agreement not to compete, the Court dismissed his
complaint and the allegations that the companies conspired with each other in
violation of the Sherman Antitrust Act. Id. at 564.
The Sixth Circuit has addressed conclusory allegations within the context of
loan discrimination. In 16630 Southfield Ltd. P'ship v. Flagstar Bank, F.S.B., 727
F.3d 502 (6th Cir. 2013), the plaintiff brought discrimination claims in relation to a
loan he had applied for. Id. at 503. The court recognized that plaintiff had alleged
his membership in a protected class, and that his loan application was denied. He
alleged that the denial was on account of the protected class membership. Id. at
505. Despite these allegations, Judge Sutton, writing for the court, discussed how
plaintiff's discrimination claims compared with the obvious alternate explanation:
that the bank determined the loan was a poor business decision. 4 Id. Ultimately, the
court found that dismissal was warranted because the plaintiff failed to plead facts
which would plausibly support the discrimination claim. Id. at 506.
Even with this guidance by higher courts, one must admit that the line
between conclusory allegations and factual allegations can appear murky in certain

4

"Where, as here, the complaint alleges facts that are merely consistent with liability (i.e.,
being [a member of a protected class] and being denied a loan extension) as opposed to
facts that demonstrate discriminatory intent (i.e., disparate impact or direct evidence), the
existence of obvious alternative explanations simply illustrates the unreasonableness of the
inference sought and the implausibility of the claims made." 16630 Southfield Ltd. P'ship
v. Flagstar Bank, F.S.B., 727 F.3d 502, 505 (6th Cir. 2013).

12

scenarios. For many years, scholars have identified difficulties in the factual
allegation pleading standard. See Robert G. Bone, Plausibility Pleading Revisited and

Revised: A Comment on Ashcroft v. Iqbal, 85 NOTRE DAME L. REV. 849, 867 (2010)
(arguing that attempting to draw a difference between factual allegations and
conclusory allegations is nearly impossible); Adam N. Steinman, The Pleading

Problem, 62 STAN. L. REV. 1293, 1318 (2010) (warning of an "endless cascade of
inquiry" that would follow if allegations may not draw conclusions based on other
allegations).
More recent writings have attempted to study the precise meaning of the term
"conclusory" in an attempt to provide helpful guardrails to both judges and
practitioners. See Donald J. Kochan, While Effusive, "Conclusory" is Still Quite

Elusive: The Story of a Word, Iqbal, and a Perplexing Lexical Inquiry of Supreme
Importance, 73 U. PITT. L. REV. 215 (2011) (undertaking a comprehensive study of
the use of "conclusory" in dictionaries and court opinions); Howard M. Erichson,

What is the Difference Between a Conclusion and a Fact?, 41 Cardozo L. Rev. 899
(2020) (attempting to define the conclusion-fact distinction by categorizing cases).
Despite these attempts, the difference remains difficult to define, and many are left
to describe it with the famous quote by Justice Potter Stewart: "I know it when I
see it." Jacobellis v. Ohio, 378 U.S. 184, 197 (Stewart, J., concurring) (1964).

13

Plaintiffs' Amended Complaint contains a number of proper factual allegations .
For example:
61. After extensive discussions, Plaintiff Davoli-Turner texted a U.S.
Bank loan officer named Stephanie. Plaintiff Davoli-Turner also emailed
Stephanie's supervisor named Bruce. These communications were
prompted by a prior verbal conversation with U.S. Bank that they would
be unable to do up to 80% Loan-to-Value Ratio (LtV) because of Plaintiff
Davoli-Turner's status as a Canadian.
63. The MVFHC investigation demonstrated that 80% LtV for loans is
the standard at U.S. Bank so long as you are from the United States,
unlike Plaintiff Davoli-Turner, and not a Black, African-American male,
unlike Plaintiff Turner.
104. Plaintiffs made no significant improvements in their home in the
interim, and although median home prices had increased, the movement
from Defendant Henley's appraisal of $470,000 to the Whitewashed
Appraisal of $655,000 represented a 39.4% increase in value, which
far exceeds the expected value increase on an annual basis in the
Springboro housing market.
Doc. #9, PagelD #230, 239. These allegations specify particular facts that can form
the basis of claims. They are verifiable and therefore able to be refuted by
Defendants with future evidentiary productions. These types of allegations are the
precise allegations which are to be presumed true for the purpose of deciding a
motion to dismiss.
However, the Amended Complaint also contains a significant number of
conclusions based on speculation rather than fact. These allegations implicitly ask
the Court to draw unreasonable inferences to support the stated conclusions. For
example:
14

73. As explained herein, the Henley Defendants' undervaluation of the
Turner Plaintiffs' home reflected Defendant Henley's belief that,
because Plaintiff Turner is Black, and Plaintiff Davoli-Turner is not a
U.S. citizen, but rather from Canada, that they did not belong in
Springboro, a predominantly white city made up primarily of affluent
United States residents.
86. The Henley Defendants intentionally discriminated against the
Turner Plaintiffs in the provision of their appraisal services because of
Plaintiff Turner's race and Plaintiff Davoli-Turner's national origin.
Doc. #9, PagelD #232, 236. These allegations do nothing more than state the
conclusions that Plaintiffs urge the Court to adopt. These conclusions do not receive
the presumption of truth that factual allegations receive and, therefore, must be
disregarded when deciding a motion to dismiss.
B.

The Claims against Henley

Plaintiffs bring five claims against Henley, including violations of the FHA,
OFHA, the Civil Rights Act of 1866, as well as common law claims for negligent
misrepresentation and negligent hiring, training, and supervision.
Plaintiffs allege that Henley's appraisal was unlawfully discriminatory.
Specifically, they allege that Henley knew that they were members of protected
classes because of personal interactions. Doc. #9, PagelD #232, 240. They also
allege that the house contained family photographs and "markers of Black and
Canadian identify" from which Henley would have known that the Turners were

15

members of protected classes. 5 Id. at PagelD #238, 241. They also allege that, with
the knowledge of Plaintiffs' protected status and because of that status, Henley
arbitrarily and unjustifiably performed the appraisal in a manner which concluded in
a valuation unreasonably low. This included intentionally misrepresenting the square
footage of the house, selecting ill-suited comparison homes, and discounting the
recently finished basement. Id. at PagelD #232-33, 239-40.
In his response, Henley challenges the contention that he ever interacted with
the Turners or had any knowledge of their membership in protected classes. Doc.
#28, PagelD #536. He also states that his appraisal was conducted in accordance
with his licensure and experience and adhered to uniform appraisal standards. Id.
Plaintiff Diana Davoli Turner's claims against Henley are reminiscent of the
allegations in Twombly and Flagstar Bank and are similarly insufficient to defeat a
motion to dismiss. Plaintiff alleges that Henley knew that she was Canadian and
discriminated against her because of that. Taking as true that Henley spoke with the
Turners and was aware of their membership in protected classes, Plaintiffs still fail
to plead a claim that Henley discriminated against them with that knowledge.

5

Plaintiffs do not specifically allege that the house contained "markers of Black and
Canadian identity" at the time that Henley appraised the house. Instead, they only allege
that markers were removed prior to the whitewashed appraisal conducted the year after the
Henley appraisal. Doc. #9, PagelD #238. However, it appears plausible to assume that the
house also contained these markers when the Henley appraisal took place.

16

Additionally, while the Henley appraisal resulted in a valuation $185,000 lower than
the one conducted a year later, it was only $15,000 lower than the second appraisal
and $50,000 lower than the first appraisal conducted by a different bank. Although
Plaintiffs conclude that this must mean that the valuation is unreasonable, they lack
sufficient factual allegations to adequately plead this claim .
Plaintiffs here include no such allegations about similarly situated homeowners
who were also appraised by Henley. While there is no requirement that Plaintiffs
must provide allegations that detail disparate impact or direct evidence of the
discrimination, the Court is not required to blindly ignore the obvious alternative
theory: that Henley honestly thought the property was worth the amount that he
appraised it for. See supra note 3. Merely stating that Henley discriminated against
the Turners, is insufficient as a matter of law under Rule 8(a).
Plaintiff Carlos Turner's claims against Henley fare no better. Aside from the
claims brought under the FHA and the OFHA, Carlos Turner also alleges violations
of the Civil Rights Act of 1866. Doc. #9, PagelD #245-46. These claims all share
the same alleged basis as the claims of Diana Davoli Turner. The only difference, in
fact, between the claims is that those by Diana Davoli Turner allege discrimination
based on national origin while the claims brought by Carlos Turner allege
discrimination based on race. In any event, the Amended Complaint similarly lacks

17

sufficient factual allegations to support the conclusory allegations that Carlos Turner
was the recipient of discrimination.
While an advocacy organization such as MVFHC may have standing to pursue
cases alongside or in lieu of named individuals, these claims still require the same
factual, not conclusory, allegations that are required of individuals under Rule 8(a).

See Miami Valley Fair Hous. Ctr. v. Connor Grp., 805 F. Supp. 2d 396, 403 (S.D.
Ohio 2011). As stated above, the Amended Complaint fails to set forth these factual
allegations, and the portions of the complaint stating that MVFHC investigated the
incident do not rectify the pleading inadequacies.
Plaintiffs' common law claims against Henley are also based on the alleged
discriminatory practices. Doc. #9, PagelD #248-49. They allege that Henley claimed
to be providing a nondiscriminatory appraisal and, as the appraisal was in fact
discriminatory, this representation was false. Id. This claim, however, relies on the
allegation that the appraisal is indeed discriminatory. As explained above, Plaintiffs
have failed to make this requisite allegation and thus the claim that Henley
misrepresented his actions must also fail as a matter of law.
Likewise, the claim of negligent hiring, training, and supervision against Henley
depends on the underlying allegations of discrimination. Without the factual
foundation for these allegations, this claim also fails. Therefore, the Motion to

18

Dismiss filed by Henley, Doc. #28, is SUSTAINED and all claims against Henley
Appraisals, LLC and Kevin D. Henley are DISMISSED.
C.

The Claims Against U.S. Bancorp and U.S. Bank National Association

In their motion, U.S. Bank advocates for the dismissal of U.S. Bancorp under
the theory that it is a holding company and is not alleged to have engaged in any
conduct relevant to this lawsuit. See United States v. Bestfoods, 524 U.S. 51, 63
( 1998). Plaintiffs do not address this argument in their responsive briefing and thus
have waived any contrary argument they may have. Given that U.S. Bancorp is the
parent company to U.S. Bank National Association, the party alleged to be involved
in this case, and given that there are no allegations against U.S. Bancorp itself, this
portion of the motion is SUSTAINED. As a result, all claims against U.S. Bancorp are
DISMISSED.
The claims brought against the subsidiary U.S. Bank National Association
(hereafter "U.S. Bank") are not so easily analyzed. Five claims are brought against
U.S. Bank, many of which overlap in significant ways. These involve three claims
brought under anti-discrimination statutes specifically targeted toward housing:
Count One, Count Three, and Count Four. There is another anti-discrimination claim,
Count Two, brought under the Civil Rights Act of 1866 by Carlos Turner only. Finally,
the Turners allege a common law count of negligent hiring, training, and supervision
(Count Six) . The Court will address these categories separately.
19

1.

Discrimination Claims

As described above, Plaintiffs' claims against U.S. Bank follow one of two
broad trajectories. First, they present a theory that U.S. Bank is liable for the
discriminatory appraisal of Henley, given that they ordered the appraisal, and did not
attempt to fix the faults in the process once the Turners reported the errors. Doc.
#9, PagelD #233-34. The second theory is based on U.S. Bank's own decisionmaking process. Under this theory, Plaintiffs contend that U.S. Bank violated the
anti-discrimination statutes when they refused to finalize one of the earlier loan
applications with more favorable terms. Plaintiffs also allege that U.S. Bank has a
policy by which 80% LtV loans for are available for White, American citizens, but
only 60% LtV loans are available for applicants like the Turners who may be racial
minorities or have a foreign national origin. Id. at PagelD #236. They also allege that
U.S. Bank has a policy which does not permit prospective borrowers to appeal the
appraisal when they suspect discrimination played a factor. Id. at PagelD #237.
U.S. Bank provides several responses. They first argue that the loans were
denied for purely nondiscriminatory reasons: that the borrowers had a history of
delinquency on their credit reports. Doc. #16, PagelD #408. U.S. Bank also points
out that it was the bank's own continued effort to work with the Turners that
permitted them to eventually meet the qualification process for any loan. Id. at
PagelD #409. Finally, they dispute the Turners' allegations that no appeal of the
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appraisal was permitted. U.S. Bank points out that, not only is an appeal process
available, but the Turners used that process to require Henley to reconsider his
appraisal. Id. at PagelD #410-11.
Plaintiffs' claims which are based on Henleys actions alone are unsustainable.
As outlined above, the Amended Complaint fails to establish a viable claim against
Henley for the appraisal process. Therefore, any argument that U.S. Bank is liable
for that valuation due to their position as the party who ordered the appraisal also
fails.
However, Plaintiffs' second theory, that U.S. Bank's own process was
discriminatory, may yet provide a well-pleaded claim. Plaintiffs allege that U.S. Bank
has a policy which places an upper limit on the possible value that borrowers may
take out against their home. They also allege that, based on what U.S. Bank's
employees told Diana Davoli Turner, this upper limit is lower for members of certain
protected classes, like national origin or race, than it is for white American citizens.
Doc. #9, PagelD #236. At the motion to dismiss, stage the Court considers these
facts in the light most favorable to Plaintiffs and therefore assumes these allegations
to be true.
U.S. Bank states that its decision was based on the Turners' ability to repay
the loan, given their credit record. Plaintiffs state that the decision was based on a
policy of discrimination and one that does not permit potential borrowers to challenge
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the valuation. The evidence may vindicate U.S. Bank's explanation and rationale, but
it is not the Court's task at this stage to wade into a factual dispute such as this
one. Instead, viewing the facts in the light most favorable to Plaintiffs, the Court
finds that Plaintiffs have stated a valid claim for discrimination on the part of U.S.
Bank. Therefore, Plaintiffs' claims under the FHA, OFHA, and ECOA may continue
against U.S. Bank.

2.

Violation of Civil Rights Act of 1866

Count Two alleges a violation of the Civil Rights Act of 1866 and is brought
by Plaintiff Carlos Turner only. Doc. #9, PagelD #245. This claim, like the claims
brought under the FHA, OFHA, and ECOA, is a claim based on discriminatory
treatment. The difference, however, is that this claim relates only to Carlos Turner's
inability to secure a loan that would have been available to others who were not a
member of a racial minority. In fact, Plaintiffs openly state that this claim does not
depend on the denial of his wife's application, only his own. Doc. #22, PagelD #488.
U.S. Bank's challenges to this claim fall into one of two categories. First, they
argue that Carlos Turner lacks standing to bring a claim because he was not the
applicant. Doc. #16, PagelD #403-04. Second, they bring the same substantive
arguments that the Amended Complaint does not sufficiently allege discrimination
previously analyzed above. Id. at PagelD #404-06. Given that the Court previously

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found that the discrimination allegations were sufficient to proceed at this stage,
these arguments need not be reanalyzed here .
U.S. Bank's challenge to standing, however, does need to be addressed . Any
potential claims of discrimination against Carlos Turner must involve facts, or
allegations of facts, to show that Carlos Turner was personally involved in the loan
application process. U.S. Bank argues that the Amended Complaint lacks sufficient
allegations to link the applications and Carlos Turner. Doc. #16, PagelD #403-04.
While the Amended Complaint is littered with allegations of Diana Davoli Turner's
interactions with U.S. Bank, including the loan applications, appraisals, and
interactions with bank employees, Doc. #9, PagelD #228-30, according to U.S.
Bank, Plaintiffs fail to allege that Carlos Turner ever visited a U.S. Bank branch,
interacted with bank employees, or applied with his wife on any of the loans. Doc.
#16, PagelD #404.
Carlos Turner claims that he did execute paperwork to apply for loan. Doc.
#22, Page ID #487. The Amended Complaint supports this stance and a copy of the
executed HELOC, signed by both Diana Davoli Turner and Carlos Turner is attached
as Exhibit 5 to the Amended Complaint. Doc. #9, PagelD #241, 367.
The Civil Rights Act of 1866 ensures that members of racial minorities may
enjoy the same abilities to enter into contracts, benefit from the protections of laws,
and are able to carry out the same transactions of property as white citizens. 42
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U.S.C. § § 1981, 1982. Therefore, to properly assert a claim under this Act, Carlos
Turner must allege that he was prevented from entering into some sort of transaction
because of discrimination. While the Amended Complaint and Exhibit 5 show that
Carlos Turner was a signatory to the HELOC ultimately executed, it does not
specifically allege that he was a signatory to any of the other loans applied for along
the way.
Carlos Turner argues that he could not be expected to provide evidence of
other loans where he was listed on the application before discovery has been
undertaken. Doc. #22, PagelD #488. Ultimately, however, the failure to even allege
his signature on earlier loan applications, a fact which would be well within his
knowledge even if he cannot access the paperwork at this point, is detrimental.
Without these allegations, the Court cannot draw an inference for Plaintiffs on that
issue and the facts do not support the idea that Carlos Turner was denied a loan at
all, let alone that he was denied because of his race.
Without these necessary allegations, this claim fails. As a result, U.S. Bank's
Motion to Dismiss is SUSTAINED with regard to Count Two of the Amended
Complaint.

3.

Negligent Hiring, Training, and Supervision

Count Six was brought by the Turners against U.S. Bank. Doc. #9, PagelD
#248-49. Under this claim, Plaintiffs allege that U.S. Bank breached a duty of
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reasonable care in the hiring, training, and supervision of employees. Id. Specifically,
Plaintiffs allege that U.S. Bank failed to supervise Henley, as well as several U.S.
Bank employees: Stephanie, Bruce, and other currently unknown employees. Id. at
PagelD #249.
To properly allege a claim for negligent hiring, training, and supervision under
Ohio law, a Plaintiff must plead: (1) the existence of an employment relationship; (2)
the employee's incompetence; (3) the employer's actual or constructive knowledge
of such incompetence; (4) the employee's act or omission causing injuries; and (5)
the employer's negligence in hiring or retaining the employee as the proximate cause
of the plaintiff's injuries. Evans v. Akron Gen. Med. Ctr., 2018-Ohio-3031, 1 26
(Ohio Ct. App. Aug. 1, 2018); Douglas v. Salem Cmty. Hosp., 153 Ohio App.3d
350, 366 (Ohio Ct. App. 2003).
In their motion, U.S. Bank asserts that this claim should be dismissed because
the Amended Complaint offers "bare-bones" conclusions based on "information and
belief" which themselves are insufficient to plead a claim. Doc . # 16, Page ID #414.
In their own defense, Plaintiffs argue that their negligence claim does in fact meet
the federal pleading standard. Doc. #22, PagelD #491. Plaintiffs' Amended
Complaint alleges that Stephanie and Bruce are both employees of U.S. Bank; that
the two named employees lacked training in certain areas or failed to implement their
training; that U.S. Bank knew or should have known of these issues; that these
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issues injured Plaintiffs; and that the failure to train was the proximate cause of the
injuries. Doc. #9, PagelD #230, 234, 235. Taken together, these form a viable basis
to bring a claim for negligent hiring, training, and supervision.
However, Defendant also challenges whether these allegations are truly
factual allegations or whether they are merely conclusions. Doc. #26, PagelD #52324. This distinction makes a difference as a plaintiff's conclusory allegations cannot
support a valid claim; it must be built on factual allegations. Twombly, 550 U.S. at
555. Separating and recognizing the difference between factual allegations and
conclusory allegations can often be difficult. In this case, both U.S. Bank and
Plaintiffs point to the same paragraph in the Amended Complaint to show
contradictory conclusions: either that (a) the allegation is conclusory and therefore
inadequate or (b) the allegations are sufficiently factual and particularized to survive
a motion to dismiss.
Certainly, if the allegation consisted only of "U.S. Bank failed to properly train
and supervise Bruce, Stephanie, and other employees who are unknown at this
time," these allegations would merely be restating the conclusion they hope a jury
may find ultimately decide. Doc. #9, PagelD #235. However, this allegation does
not end there. In fact, the Amended Complaint lays out four specific items that it
alleges the employees were not properly trained on which may have had an effect
here: "( 1) how to analyze and evaluate loan applications; (2) how to process an
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appraisal appeal when discrimination is suspected; (3) how to audit or supervise the
work of a contracted appraiser; and (4) how to underwrite a loan where appraisal
discrimination has been suspected or reported. " 6 Id.
These are not, as U.S. Bank argues, conclusory allegations. These are factual
allegations which may properly sustain a claim. Similarly, Plaintiffs' other allegations
meet the other required factors under Ohio law and these claims may go forward as
they pertain to Bruce, Stephanie, and other employees of U.S. Bank. Therefore, U.S.
Bank's Motion to Dismiss is OVERRULED with respect to Plaintiffs' claim of negligent
hiring, training, and supervision against U.S. Bank.

IV.

Conclusion
For the reasons set forth above, the Motion for Dismiss filed by Defendants

Henley Appraisals, LLC & Kevin Henley is SUSTAINED and all claims against Henley
Appraisals, LLC and Kevin Henley are DISMISSED. Further, the Motion to Dismiss
filed by Defendants U.S. Bancorp & U.S. Bank National Association is SUSTAINED
IN PART and OVERRULED IN PART. Specifically, Count Two is DISMISSED and all

6

These four itemized allegations may appear to be conclusory statements at first
glance. However, these allegations are supported by other factual allegations in the
Amended Complaint. Specially, these items follow logically from the interactions
described with the U.S. Bank employees and would be easily proven or disproven
based on items disclosed in discovery. See Calleen McNamara, Iqbal as Judicial
Rorschach Test, 105 Nw. U. L. Rev. 401, 415 (2011 ).
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claims against U.S. Bancorp are DISMISSED. Counts One, Three, Four, and Six may
proceed against Defendant U.S. Bank National Association.
Plaintiffs have 30 days from the issuance of this decision to file any motion
seeking leave to amend their Complaint should they deem such an amendment
necessary and consistent with Fed. R. Civ. P. Rule 11.

Date: March 11, 2025
WALTER H. RICE
UNITED STATES DISTRICT JUDGE

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