Humphrey, et al vs. U.S. Bank, N.A., et al
Filing
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OPINION AND ORDER by Judge Gregory K Frizzell ; setting/resetting deadline(s)/hearing(s): ( Miscellaneous Deadline set for 1/25/2012); granting 11 Motion to Dismiss; granting 18 Motion to Dismiss (hbo, Dpty Clk)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OKLAHOMA
JULYA O. HUMPHREY, an individual,
and RICHARD D. HUMPHREY,
an individual,
Plaintiffs,
v.
U.S. BANK, N.A., D/B/A
U.S. BANK HOME MORTGAGE,
a foreign corporation doing business in
the State of Oklahoma, and
CAPITAL ONE SERVICES, LLC,
a foreign limited liability company doing
business in the State of Oklahoma,
Defendants.
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Case No. 11-CV-272-GKF-PJC
OPINION AND ORDER
Before the court are the Motion to Dismiss of defendant Capital One Services, LLC
(“Capital One”) [Dkt. #11] and the Motion to Dismiss of defendant U.S. Bank, N.A. (“U.S.
Bank”) [Dkt. #18]. Both motions seek dismissal of plaintiffs’ petition pursuant to Fed.R.Civ.P.
12(b)(6) for failure to state a claim upon which relief can be granted.
Plaintiffs filed suit in Rogers County, Oklahoma, District Court. Defendants removed
the case to federal court on the basis of diversity jurisdiction pursuant to 28 U.S.C. §§ 1332,
1441 and 1446. Subsequently, both defendants filed the pending motions to dismiss.
I. Allegations of Petition
Plaintiffs’ Petition alleges the Humphreys, husband and wife, had an existing home
mortgage with U.S. Bank prior to the events giving rise to this lawsuit. [Dkt. #2-1, Petition, ¶3].
In November 2009, Richard Humphrey applied online for a refinance offer by U.S. Bank. [Id.,
¶¶4-5]. Shortly thereafter, he received a call from U.S. Bank and, after some discussion, the
bank represented it would quickly refinance the Humphreys’ existing mortgage for $1,200.00.
[Id., ¶5]. Plaintiffs allege “U.S. Bank’s representation of the amount of closing costs required to
close the refinance was false, knowingly deceptive and designed to bait the customer into
committing to refinance with U.S. Bank,” and “[n]ot knowing the wrongful true intentions of
U.S. Bank, Humphrey told U.S. bank they accepted the offer, and in response were told they
would receive paperwork regarding the refinancing shortly.” [Id.].
The paperwork U.S. Bank subsequently sent Humphrey disclosed estimated closing costs
of $2,020.63. Plaintiffs allege the bank’s “representations of the amount of closing costs
required to close the refinance was again false, knowingly deceptive and designed to bait the
customer into committing to refinance with U.S. Bank.” [Id., ¶6]. The estimated costs included
title insurance in the amount of $643.6; a “Line 812 ‘Process Fee’” of $350.00; a “Recording
Service Fee” of $55.00; and an “Attached Addendum Subtotal” of $200.00 (Escrow Service
Fee); [Id.]. The payoff of the existing mortgage was listed as $267,772.00. [Id.] “Humphrey
noticed the $800.00 increase in closing costs ($1,200.00 versus $2,020.63), but still felt it was
worthwhile to refinance,” and “[n]ot knowing the wrongful true intentions of U.S. Bank, but in
reliance upon the amount of closing costs represented by the ‘Good Faith’ estimate paperwork,
Humphrey signed several papers, including papers agreeing to pay for a real estate appraisal.
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[Id., ¶7]. Humphrey’s consent to the transaction was induced in part upon U.S. Bank’s
representation of the total amount of closing costs of $2,020.63.” [Id.].
Humphrey provided U.S. Bank with his Capital One Visa card account information as the
source of payment for the appraisal as part of the transaction. [Id., ¶8]. “Relying upon Capital
One’s promotions (what’s in your wallet), promise and representations (fraud protection/zero
liability), Humphrey acquired this card for remote transactions believing it provided the most
protection.” [Id., ¶9]. U.S. Bank represented it would provide a copy of the appraisal to
Humphrey. [Id., ¶10].
Plaintiffs allege that shortly before the scheduled closing, “Humphrey learned that U.S.
Bank intended to increase the amount of closing costs by more than double,” and “changed the
terms of their agreement to include artificially inflated or bogus charges in an effort to extract
more closing costs from Humphrey.” [Id., ¶11]. In the February 1, 2010 disclosure, “‘Title
Insurance’ had almost doubled in amount to $1,250.00” and “‘Attached Addendum subtotal’
ballooned to $1,425.00.” [Id.]. The disclosure listed for the first time a “Document Signing
Fee” of $800.00, a new “Line 1137 ‘Processing Fee’” of $75.00; a “Wire Fee” of $25.00; the
“Recording Service Fee” had been increased to $75.00; and an “Escrow Service Fee that had
more than doubled, to $450.00. [Id.]. Additionally, the payoff amount on the existing mortgage
had grown to $269,258.19, “despite the fact that Humphrey had made additional timely mortgage
payments, thereby reducing their principal balance.” [Id.].
Plaintiffs allege they “communicated with U.S. Bank in an effort to close the refinance
with closing costs in line with the amount used by U.S. Bank to solicit Humphrey’s signatures in
November 2009, and “told U.S. bank that they felt that they had been misled and deceived by
U.S. Bank,” [Id., ¶12]. “Despite repeated requests to close the refinance loan with closing costs
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that were in line with amounts quoted by U.S. Bank in November 2009, U.S. Bank refused and
ultimately this loan was not closed with U.S. Bank.” [Id., ¶13.].
Humphrey demanded that the $316.00 in fees they had prepaid be immediately returned,
but U.S. Bank responded that fees would not be refunded and advised they were charging
$415.00 on Humphrey’s Capital One credit card provided in November 2009 for the appraisal.
[Id., ¶¶14-15]. “Humphrey responded by telling U.S. Bank that it had not been honest and had
misrepresented their offer to refinance and, therefore, Humphrey would not pay these fees, that
they would have the $316.00 charge reversed if U.S. Bank continued to refuse to refund it and
finally they specifically advised U.S. Bank that it was not authorized to make any charges to
their credit card,” and “Humphrey revoked U.S. Bank’s written authorization to make charges to
the Capital One Visa card.” [Id., ¶15].
Plaintiffs allege, “Notwithstanding the Humphrey revocation of authorization, on
February 22, 2010, U.S. Bank charged $415.00 to Capital One account.” [Id., ¶16]. Humphrey
learned of the charge a few days later and initiated an electronic dispute of the charge. He
received a phone call from Capital One regarding the dispute in which he answered several
Capital One questions. [Id., ¶17]. Initially, Humphrey’s Capital One account was credited for
the U.S. Bank charge. [Id., ¶19]. Plaintiffs allege, “However, U.S. Bank apparently responded
to Capital One’s notice of dispute by providing copies of the documents signed by Humphrey in
November 2009. U.S. Bank, with knowledge of the grounds for Humphrey’s dispute, decided to
resubmit the charge, knowing that it was foreseeable that Capital One would assess the charge
against Humphrey’s account, thereby forcing Humphrey to pay or risk damage to their credit and
be subjected to collections which actually occurred and continue to this date.” [Id.].
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The Petition states, “Humphrey were not aware U.S. Bank resubmitted the charges until
some time in June 2010 when they reviewed their monthly electronic billing statement.
Humphrey were shocked to see the U.S. Bank charge again. Prior to this electronic statement,
Humphrey had not receive any updates via electronic communications concerning the dispute
after their account had been credited months before.” [Id., ¶20]. Further, “During their
relationship with Capital One, it has not been uncommon for Capital One to send
solicitations/promotions/cash advance checks/balance transfer solicitation and monthly
statements to Humphrey using the U.S. Mails. Humphrey routinely disregarded these Capital
One mailings and since they reviewed account statements and made payments online, they had
no expectation Capital One would communicate with them regarding this dispute in anything
other than an electronic format since their dispute was initiated electronically and credit had been
applied electronically.” [Id., ¶21].
Plaintiffs alleged, “Upon seeing the U.S. Bank charge again, Humphrey searched through
recent Capital One mailings and found a letter dated May 17, 2010, demanding information,
documents and a response on or before May 24, which at that point was impossible.” [Id., ¶22].
“Immediately thereafter on June 27, 2010, Humphrey, via the U.S. Mail, initiated another dispute
regarding the U.S. Bank charge.” [Id., ¶23]. “This subsequent dispute was not substantially the
same because Humphrey informed Capital One that U.S. Bank’s authorization to charge
Humphrey’s visa card had been revoked and the authorization withdrawn before U.S. Bank
charged the card. Humphrey also informed Capital One, that despite representations from U.S.
Bank that Humphrey would receive a copy of the appraisal which was the basis of the charge,
Humphrey never received the same.” [Id.]. Plaintiffs allege Capital One never investigated nor
resolved the Humphrey June 27, 2010 billing dispute , and “Capital One has repeatedly
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demanded Humphrey pay the fraudulent charge and has unleashed its debt collectors who have
made countless calls and damaged Humphrey.” [Id., ¶¶24-25]. Plaintiffs allege, “Humphrey
would not have opened nor maintained this Capital One Visa card had they known Capital One
would disregard their claim of fraud by U.S. Bank and seek to collect these wrongful charges
against their account holder, Humphrey.” [Id., ¶26].
Regarding Capital One, plaintiffs allege, “Capital One has misrepresented the features,
advantages and benefits of its fraud protection/zero liability/what’s in your wallet Visa card, has
engaged in deceptive and unfair trade practices in this regard and has billed and sought to collect
sums using Humphrey’s Visa card which were not authorized at the time the Visa card was
charged.” [Id., ¶27].
Regarding U.S. Bank, plaintiffs allege, “U.S. Bank’s refinance tactics were deceptive and
unfair, and “[d]espite numerous requests to U.S. Bank for a copy of the alleged appraisal,
Humphrey never received it” and “Humphrey has no knowledge of an appraiser acting on behalf
of or at the request of U.S. Bank actually entering their home to appraise same.” [Id., ¶¶28-29].
Plaintiffs contend “[t]he Defendants conduct is prohibited by and punishable by 23 OS
§9.1 (Oklahoma’s punitive damages statute).” [Id., ¶31]. They seek damages against both
defendants in excess of $75,000. [Id., at 7-8].
III. Analysis
Defendants contend the First Amended Complaint fails to meet the pleadings
requirements of either Fed.R.Civ.P. 9(b) or Rule 8(a)(2), and should therefore be dismissed
pursuant Rule 12(b)(6).
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A. Applicable Standards
1. Rule 8(a)(2)
Federal Rule of Civil Procedure 8(a)(2) provides that a complaint must contain “a short
and plain statement of the claim showing that the pleader is entitled to relief.” The United States
Supreme Court clarified this standard in Bell Atlantic Corp. v. Twombly, ruling that to withstand
a motion to dismiss a complaint must contain enough allegations of fact “to state a claim to relief
that is plausible on its face.” 550 U.S. 544, 570 (2007). “While a complaint attacked by a Rule
12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to
provide the grounds of his entitle[ment] to relief requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will not do.” Id. at 555 (internal
quotations omitted). On a motion to dismiss, courts “are not bound to accept as true a legal
conclusion couched as a factual allegation.” Id.
Under the Twombly standard, “the complaint must give the court reason to believe that
this plaintiff has a reasonable likelihood of mustering factual support for these claims.” Robbins
v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008), quoting Ridge at Red Hawk, L.L.C. v.
Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007) (emphasis in original). “The burden is on the
plaintiff to frame a complaint with enough factual matter (taken as true) to suggest that he or she
is entitled to relief.” Robbins, 519 F.3d at 1247, citing Twombly, 127 S.Ct. at 1965 (internal
quotations omitted). “Factual allegations must be enough to raise a right to relief above the
speculative level.” Id.
Although the new Twombly standard is “less than pellucid,” the Tenth Circuit Court of
Appeals has interpreted it as a middle ground between “heightened fact pleading,” which is
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expressly rejected, and complaints that are no more than “labels and conclusions,” which courts
should not allow. Robbins, 519 F.3d at 1247, citing Twombly, 127 S.Ct. at 1964, 1965, 1974.
Accepting the allegations as true, they must establish that the plaintiff plausibly, and not just
speculatively, has a claim for relief. Robbins, 519 F.3d at 1247. “This requirement of
plausibility serves not only to weed out claims that do not (in the absence of additional
allegations) have a reasonable prospect of success, but also to inform the defendants of the actual
grounds of the claim against them.” Id. at 1248. The Tenth Circuit Court of Appeals instructed
in Robbins that “the degree of specificity necessary to establish plausibility and fair notice, and
therefore the need to include sufficient factual allegations, depends on context. . . .[and] the type
of case.” Id. (citing Phillips v. County of Allegheny, 515 F.3d 224, 231-32 (3d Cir. 2008)). A
simple negligence action may require significantly less allegations to state a claim under Rule 8
than a case alleging anti-trust violations (as in Twombly) or constitutional violations (as in
Robbins). Id.
2. Rule 9(b) Pleading Requirements
Fed.R.Civ.P. 9(b) provides:
In alleging fraud or mistake, a party must state with particularity the circumstances
constituting fraud or mistake. Malice, intent, knowledge, and other conditions of
a person’s mind may be alleged generally.
Rule 9(b)’s purpose “is to afford defendant fair notice of plaintiff’s claims and the factual ground
upon which [they] are based.” Koch v. Koch Indus., Inc., 203 F.3d 1202, 1236 (10th Cir. 2000)
(internal quotations and citations omitted). The Tenth Circuit “requires a complaint alleging
fraud to set forth the time, place and contents of the false representation, the identity of the party
making the false statements and the consequences thereof.” Id. (internal quotations and citations
omitted). “At a minimum, Rule 9(b) requires that a plaintiff set forth the ‘who, what, when,
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where and how’ of the alleged fraud, and [she] must set forth the time, place, and contents of the
false representation, the identity of the party making the false statements and the consequences
thereof.” U.S. ex rel. Sikkenga v. Regence Bluecross Blueshield of Utah, 472 F.3d 702, 726-27
(10th Cir. 2005). Rule 9(b)’s particularity requirement, however, is not absolute or limitless; a
plaintiff need not go so far as to give the defendant a ‘pretrial memorandum containing all the
evidentiary support for plaintiff’s case.” Schrag v. Dinges, 788 F.Supp. 1543, 1550 (D. Kan.
1992) (citation omitted).
In reviewing a motion to dismiss pursuant to Rule 9(b), the court must confine its
analysis to the text of the complaint, accepting as true all well-pleaded facts as distinguished
from conclusory allegations. Id. at 726. Those facts must be viewed in the light most favorable
to the non-moving party. Id.
A. Claim Against Capital One
Plaintiffs’ Petition fails to satisfy either the Twombly standard for pleading under Rule 8
or the heightened pleading requirement of Rule 9. The Petition lists no causes of action and
references no legal claims other than one for punitive damages. Thus, it is impossible to discern
from the face of the Petition what cause or causes of action plaintiffs assert against Capital One.1
Further, to the extent plaintiffs have attempted to allege fraud against Capital One, they have
failed to set forth any factual allegations concerning the time, place and contents of the false
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Capital One speculates the Petition may attempt to assert claims for fraud, violation of the
Oklahoma Deceptive Trade Practices Act (“ODPA”), 78 O.S. § 51, et seq., the Oklahoma
Consumer Protection Act (“OCPA”), 15 O.S. § 752, et seq., and/or a common law claim for
“intrusion on seclusion” for Capital One’s collection efforts. Capital One correctly notes that
plaintiffs cannot state a claim under the ODPTA, because it protects business competitors rather
than consumers. See Precision Aggregate Products, LLC v. CMI Terex Corp., 2007 WL
3232187, at *6 (W.D. Okla. Oct. 31, 2007). In their response, plaintiffs acknowledge they seek
to state claims for violation of the OCPA, for Intrusion upon Seclusion, for violation of the Fair
Credit Billing Act, 15 U.S.C. §§ 1666-1666j, and its implementing regulations, and for fraud.
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representation, the identity of the party making the false statements and the consequences
thereof. Additionally, the Petition discloses that plaintiffs failed to timely dispute the second
U.S. Bank charge, and plaintiffs fail to articulate any basis for their claim that Capital One had
any obligation to investigate or resolve their belated challenge. Therefore, Capital One’s motion
must be granted.
B. Claim Against U.S. Bank
In their response to U.S. Bank’s motion, plaintiffs contend they have asserted claims for
fraud and/or deceit, “fraudulently causing charges to be incurred on Humphrey’s credit card,”
breach of contract and fraudulent inducement, and negligence. [Dkt. #24].2 However, the
Petition fails to satisfy the pleading requirements of Rule 8, inasmuch as it sets forth no causes of
action or legal claims other than a reference to Oklahoma’s punitive damages statute.
Furthermore, to the extent plaintiffs purport to allege a fraud claim, they have failed to set forth
factual allegations meeting Rule 9’s heightened pleading standards.
III. Conclusion
For the reasons set forth above, both Capital One’s Motion to Dismiss [Dkt. #11] and
U.S. Bank’s Motion to Dismiss [Dkt. # 18] are granted. Plaintiffs are granted leave to file an
amended complaint on or before January 25, 2012.
ENTERED this 5th day of January, 2012.
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Plaintiffs appear to concede they cannot assert a private cause of action for alleged violation of
the Real Estate Settlement Procedures Act of 1974 (“RESPA”), 12 U.S.C. § 2604(c), or the
OCPA.
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