Colquitt v. Manufacturers and Traders Trust Company
Filing
16
Opinion and Order: The Court GRANTS Defendants Motion 8 to Dismiss Plaintiffs Second Amended Complaint. The Court DISMISSES with prejudice those portions of Plaintiffs claims that are time-barred by the relevant statutes of limitation as set out in this Opinion and Order. The Court also DISMISSES without prejudice the remainder of Plaintiffs claims that are not time-barred. The Court, however, grants Plaintiff leave to file a Third Amended Complaint no later than October 28, 2015, to cure the defects set out in this Opinion and Order as to the remainder of Plaintiffs claims that are not time-barred. The Court advises Plaintiff that leave to amend is not given to allege new or different claims based on the same facts. Signed on 10/09/2015 by Judge Anna J. Brown. See attached 29 page Opinion and Order for full text. (bb)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
ROSA COLQUITT,
Plaintiff,
v.
MANUFACTURERS AND TRADERS
TRUST COMPANY (a Foreign
Business Corporation) doing
business as M&T BANK,
Defendant.
JACOB D. BRAUNSTEIN
Clarke Balcom, PC
1312 S.W. 16th Avenue
2nd Floor
Portland, OR 97201
(503) 224-5950
Attorneys for Plaintiff
DAVID J. ELKANICH
NELLIE Q. BARNARD
Holland & Knight, LLP
2300 US Bancorp Tower
111 S.W. Fifth Avenue
Portland, OR 97204
(503) 243-2300
Attorneys for Defendant
1 - OPINION AND ORDER
3:15-CV-00807-BR
OPINION AND ORDER
BROWN, Judge.
This matter comes before the Court on Defendant
Manufacturers and Traders Trust Company’s Motion (#8) to Dismiss
Plaintiff’s Second Amended Complaint.
For the reasons that
follow, the Court GRANTS Defendant’s Motion.
BACKGROUND
The following facts are taken from Plaintiff’s Second
Amended Complaint.
In 2006 Plaintiff Rosa Colquitt refinanced her home with a
loan from Defendant with an interest rate of 7.5% “for the life
of the loan.”
Plaintiff alleges Defendant advised her at the
time she entered into the 2006 loan that she would be entitled to
receive a modification of the loan to a lower interest rate if
she made timely payments for two years.
Plaintiff made timely payments on the loan for two years.
Plaintiff subsequently submitted applications for loan
modifications to Defendant seven times between January 2009 and
September 2014, and “for all but one, Defendant denied
[Plaintiff’s] applications.”
Second Am. Compl. at ¶ 17.
The
allegations in Plaintiff’s Second Amended Complaint, however, are
unclear on this point:
In ¶ 16 of her Complaint Plaintiff
asserts she “never received a loan modification”; in ¶ 17,
however, Plaintiff indicates she received a modification; and in
2 - OPINION AND ORDER
¶ 18 Plaintiff alleges her interest rate was temporarily lowered
between April 2010 and April 2013.
In any event, in the parties’
briefs related to Defendant’s Motion they agree Plaintiff
received one loan modification in 2010 that lowered Plaintiff’s
interest rate for three years.
In early 2013 Plaintiff
had a [tele]phone conversation with an M&T Bank
representative about her loan and the status of
her modification. . . . During the discussion,
Defendant's representative asked Plaintiff when
Plaintiff obtained the loan originally. Plaintiff
replied, "2006." The representative then asked
Plaintiff if she was black. Plaintiff replied
that yes, she is black. Defendant's
representative then told Plaintiff that she was
not going to get a modification and that "those
loans" were being sent to foreclosure.
Second Am. Compl. at ¶ 23.
On February 20, 2013, Defendant denied Plaintiff a loan
modification due to "insufficient income,"1 and in July 2013
Defendant denied Plaintiff a loan modification due to “surplus
income.”
At some point Defendant offered Plaintiff a repayment plan
for up to 18 months that had payments nearly $800 per month
higher than those of her original refinance loan.
Plaintiff
“verbally rejected the repayment plan.”
1
It is unclear whether Plaintiff sought a loan modification
to begin after April 2013 when the modification she obtained in
2010 ended or whether Plaintiff sought a modification of the
modified loan.
3 - OPINION AND ORDER
On October 7, 2013, Defendant denied Plaintiff’s application
for loan modification “due to Plaintiff's failure to make all of
the trial period payments under the higher-payment loan repayment
plan.”
On September 4, 2014, Defendant denied Plaintiff's
application for a loan modification and advised Plaintiff that
she “was allowed only one loan modification for the life of the
loan.”
At some point before May 16, 2014, Defendant initiated a
nonjudicial foreclosure on Plaintiff’s property.
The sale was
enjoined in February 2015 when Plaintiff obtained a preliminary
injunction.2
On September 17, 2014, Plaintiff filed an action in
Washington County Circuit Court against Defendant and Northwest
Trustee Services, Inc.
According to the parties the state court
issued a limited judgment on March 26, 2015, as to Northwest
Trustee Services pursuant to a stipulation by Plaintiff and
Northwest Trustee.
On May 1, 2015, Plaintiff filed a second amended complaint
in state court against Defendant asserting claims for unlawful
discrimination in violation of Oregon Revised Statute § 659A.421;
unfair trade practices in violation of Oregon Revised Statute
2
Plaintiff does not identify the court that issued a
preliminary injunction, but this Court infers the injunction was
granted by the Washington County Circuit Court.
4 - OPINION AND ORDER
§ 646.607, et seq.; violation of the Equal Credit Opportunity Act
(ECOA), 15 U.S.C. § 1691; and violation of the Fair Housing Act
(FHA), 42 U.S.C. § 3605.
On June 10, 2015, Defendant filed a Motion to Dismiss
Plaintiff’s Second Amended Complaint on the grounds that portions
of Plaintiff’s claims are barred by the applicable statutes of
limitation and that Plaintiff failed to state claims for relief.
The Court took Defendant’s Motion under advisement on August 10,
2015.
STANDARDS
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.” [Bell Atlantic v.
Twombly, 550 U.S. 554,] 570, 127 S. Ct. 1955. 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. Id. at 556.
. . . 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. Ibid. 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.’” Id. at 557, 127 S. Ct.
1955 (brackets omitted).
Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009).
Atlantic, 550 U.S. at 555-56.
See also Bell
The court must accept as true the
allegations in the complaint and construe them in favor of the
plaintiff.
Din v. Kerry, 718 F.3d 856, 859 (9th Cir. 2013).
5 - OPINION AND ORDER
The pleading standard under Federal Rule of Civil Procedure
8 “does not require ‘detailed factual allegations,’ but it
demands more than an unadorned, the-defendant-unlawfully-harmedme accusation.”
U.S. at 555).
Iqbal, 556 U.S. at 678 (quoting Twombly, 550
See also Fed. R. Civ. P. 8(a)(2).
“A pleading
that offers ‘labels and conclusions’ or ‘a formulaic recitation
of the elements of a cause of action will not do.’”
Twombly, 550 U.S. at 555).
Id. (citing
A complaint also does not suffice if
it tenders “naked assertion[s]” devoid of “further factual
enhancement.”
Id. at 557.
"In ruling on a 12(b)(6) motion, a court may generally
consider only allegations contained in the pleadings, exhibits
attached to the complaint, and matters properly subject to
judicial notice."
Akhtar v. Mesa, 698 F.3d 1202, 1212 (9th Cir.
2012)(citation omitted).
A court, however, "may consider a
writing referenced in a complaint but not explicitly incorporated
therein if the complaint relies on the document and its
authenticity is unquestioned."
Swartz v. KPMG LLP, 476 F.3d 756,
763 (9th Cir. 2007)(citation omitted).
DISCUSSION
As noted, Defendant moves to dismiss all of Plaintiff’s
claims on the grounds that portions of Plaintiff’s claims are
barred by the applicable statutes of limitation and that
6 - OPINION AND ORDER
Plaintiff has failed to state a claim.
I.
Portions of Plaintiff’s claims are barred by the applicable
statutes of limitation.
As noted, Plaintiff brings claims for unlawful
discrimination in violation of Oregon Revised Statute § 659A.421;
unfair trade practices in violation of Oregon Revised Statute
§ 646.607, et seq.; violation of the ECOA; and violation of the
FHA.
Defendant alleges portions of each of these claims are
barred by the applicable statutes of limitations.
A.
Plaintiff’s claims under Oregon Revised Statute
§ 659A.421 and 42 U.S.C. § 3606.
In her First Claim Plaintiff alleges Defendant violated
§ 659A.421(3) when it “discriminated against Plaintiff in making
a transaction available, or in the terms or conditions of the
transaction, because of Plaintiff's race.”3
¶ 27.
Second Am. Compl. at
Similarly, in her Fourth Claim Plaintiff alleges Defendant
violated § 3605 of the FHA “in refusing to give loan terms for
which Plaintiff was qualified and other discriminatory conduct
continuing as late as September 4, 2014.”
¶ 47.
Second Am. Compl. at
It is unclear whether Plaintiff’s claims for violation of
§ 659A.421 and the FHA rest on Defendant’s conduct during the
2006 loan origination, Defendant's conduct related to the
3
The parties agree there is not any Oregon appellate
decision interpreting Oregon Revised Statute § 659A.421(3) and
that this Court, therefore, should look to federal authority
related to the FHA when interpreting this Oregon statute. The
Court agrees.
7 - OPINION AND ORDER
repayment plan that Plaintiff rejected at an unspecified time,
Defendant's conduct related to Plaintiff’s unsuccessful attempts
to obtain loan modifications, or some combination of those
actions.
Defendant contends to the extent that Plaintiff’s
claims relate to the 2006 loan origination or Defendant’s
rejections of Plaintiff’s applications for loan modifications
that occurred prior to September 17, 2012, those portions of
Plaintiff’s claims are time-barred.
Oregon Revised Statute § 659A.875(3) provides:
“A
civil action alleging a violation of ORS . . . 659A.421 must be
commenced not later than two years after the occurrence or the
termination of the unlawful practice.”
provides:
Similarly, the FHA
“An aggrieved person may commence a civil action in an
appropriate United States district court or State court not later
than 2 years after the occurrence or the termination of an
alleged discriminatory housing practice.”
§ 3613(a)(1)(A).
2014.
42 U.S.C.
Plaintiff filed her complaint on September 17,
Any portion of Plaintiff’s claims under § 659A.421 and
§ 3601 that accrued before September 17, 2012, therefore, is
time-barred.
Plaintiff asserts the Court should toll the statutes of
limitations as to her claims under § 659A.421 and § 3605 of the
FHA because the Defendant’s course of conduct from 2006 through
2014 constitutes a continuing violation.
8 - OPINION AND ORDER
In the alternative,
Plaintiff asserts her claims are timely even if the continuingviolation doctrine does not apply because the applicable
limitations period does not begin to run until two years after
termination of the “allegedly discriminatory housing practice,”
which, according to Plaintiff, did not occur until “on or around
September 2014.”
To support her continuing-violation theory Plaintiff
relies on Havens Realty Corp. v. Coleman, 455 U.S. 363 (1982).
In Havens the Supreme Court noted under the FHA, as with other
statutes, “continuing violation[s] of the Fair Housing Act should
be treated differently from one discrete act of discrimination.”
Id. at 381.
The Court noted when “a plaintiff, pursuant to the
Fair Housing Act, challenges not just one incident of conduct
violative of the Act, but an unlawful practice that continues
into the limitations period, the complaint is timely” when “the
last asserted occurrence of that practice” occurs within the
limitations period.
Id.
The Court, however, did not conclude
the continuing-violations doctrine applied to all of the
plaintiffs’ FHA claims.
Plainly the [neighborhood] claims, as currently
alleged, are based not solely on isolated
incidents involving the two respondents, but a
continuing violation manifested in a number of
incidents — including at least one (involving
Coles) that is asserted to have occurred within
the 180-day period. HOME, too, claims injury to
its counseling and referral services not only from
the incidents involving Coleman and Willis, but
also from a continuing policy and practice of
9 - OPINION AND ORDER
unlawful racial steering that extends through the
last alleged incident.
We do not agree with the Court of Appeals,
however, that . . . respondent Coleman . . . may
take advantage of the “continuing violation”
theory. Her tester claim is, in essence, that on
four isolated occasions she received false
information from petitioners in violation of
§ 804(d) [of the FHA].
Id. at 381.
Accordingly, the Supreme Court affirmed the Court of
Appeals
insofar as the judgment reversed the District
Court's dismissal of the claims of Coleman and
Willis as individuals allegedly deprived of the
benefits of interracial association, and the
claims of HOME as an organization allegedly
injured by the racial steering practices of
petitioners
because those were deemed to be continuing pattern and practice
violations.
Id. at 382.
The Court reversed the Court of Appeals
“insofar as it directed that Coleman and Willis may proceed to
trial on their tester claims” because those were based on
discrete events rather than continuing violations.
Id.
Thus,
not all claims for violation of the FHA are continuing
violations.
As the Ninth Circuit has noted when determining
whether the continuing-violation doctrine applies, the court must
“‘identify with care the specific [discriminatory] practice that
is at issue.’”
Garcia v. Brockway, 526 F.3d 456, 461 (9th Cir.
2008)(quoting Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S.
618 (2007)).
Here there are two possible categories of violation:
10 - OPINION AND ORDER
offering the terms of the original loan and failing to provide
Plaintiff with loan modifications.
The former action occurred in
2006 when Plaintiff obtained the original loan from Defendant and
the latter actions allegedly occurred at various times between
2009 and 2014 (even though Plaintiff received a loan modification
in 2010).
In National Railroad Passenger Corp. v. Morgan the
Supreme Court analyzed the continuing-violation doctrine in the
context of a Title VII claim rather than an FHA claim.
101 (2002).
536 U.S.
When deciding housing-discrimination claims under
the FHA, however, the Ninth Circuit has frequently looked to
employment-discrimination claims for guidance.
See, e.g., Cmty.
House, Inc. v. City of Boise, 490 F.3d 1041, 1048 n.3 (9th Cir.
2007); Gamble v. City of Escondido, 104 F.3d 300, 304 (9th Cir.
1997); Pfaff v. U.S. Dep't of Hous. & Urban Dev., 88 F.3d 739,
745 n.1 (9th Cir. 1996).
The Court, therefore, looks to Morgan
for guidance.
When a plaintiff is alleging a disparate-treatment
claim, it is insufficient merely to allege discrimination as the
result of a practice that extends over time and through a series
of related acts when the “practice” remains divisible into a set
of discrete acts, each of which is individually actionable.
Morgan, 536 U.S. at 113-17.
In contrast, the Court noted when
the discriminatory practice consists of acts that are not
11 - OPINION AND ORDER
individually actionable, but rather become actionable based on
the cumulative effects of repeated conduct occurring over a
period of time, the continuing-violation doctrine may apply.
Id.
at 117 (plaintiff could base his hostile work environment claim
on serial violations because “the entire hostile work environment
encompasses a single unlawful employment practice”).
The Supreme
Court, elaborating on Morgan, has held the current effects of a
prior discriminatory practice by themselves are insufficient to
resuscitate prior acts of discrimination.
628.
Ledbetter, 550 U.S. at
Accordingly, if a plaintiff does not timely file charges
for discrete acts of discrimination, subsequent nondiscriminatory
acts that give effect to past discriminatory acts do not result
in new violations.
Although the Ninth Circuit has not explicitly held
Morgan limits the continuing-violation doctrine, it specifically
noted the limiting effect of Ledbetter on the continuingviolation doctrine in Garcia.
In Garcia the Ninth Circuit
addressed the continuing-violation doctrine and the time when an
alleged violation of the FHA terminates for purposes of § 3613.
In Garcia the plaintiffs appealed the district court’s
determination that their FHA design-and-construction claims were
barred by the two-year statute of limitations.
Although the
plaintiffs brought their action more than two years after the
design and construction of their housing units was completed, the
12 - OPINION AND ORDER
plaintiffs asserted their claims were not time-barred under a
continuing-violations theory and/or because under § 3613(a)(1)(A)
an action may be brought two years after a violation is
“terminated.”
According to the plaintiffs, “[w]ith respect to
the design and construction requirements, complaints could be
filed at any time that the building continues to be in
noncompliance, because the discriminatory housing practice failure to design and construct the building in compliance - does
not terminate.”
Garcia, 526 F.3d at 462 (quotation omitted).
The Court rejected the plaintiffs’ argument.
Plaintiffs and HUD confuse a continuing violation
with the continuing effects of a past violation.
“Termination” refers to “the termination of an
alleged discriminatory housing practice.” The
Supreme Court has “stressed the need to identify
with care the specific [discriminatory] practice
that is at issue.” Ledbetter v. Goodyear Tire &
Rubber Co., 550 U.S. 618 (2007). Here, the
practice is “a failure to design and construct,”
which is not an indefinitely continuing practice,
but a discrete instance of discrimination that
terminates at the conclusion of the
design-and-construction phase.
* * *
Put differently, “[a] continuing violation is
occasioned by continual unlawful acts, not by
continual ill effects from an original violation.”
Ward v. Caulk, 650 F.2d 1144, 1147 (9th Cir.
1981). The Supreme Court last term reiterated the
distinction between a continuing violation and
continual effects when it held that “current
effects alone cannot breathe life into prior,
unchanged discrimination; as we held in Evans,
such effects in themselves have ‘no present legal
consequences.’” Ledbetter, 127 S. Ct. at 2169
(quoting United Air Lines, Inc. v. Evans, 431 U.S.
13 - OPINION AND ORDER
553, 558 (1977)). Although the ill effects of a
failure to properly design and construct may
continue to be felt decades after construction is
complete, failing to design and construct is a
single instance of unlawful conduct.
Id. at 461.
Here it is undisputed that the negotiation for and
retention of Plaintiff’s original loan from Defendant concluded
in 2006.
To the extent that Plaintiff’s FHA and § 659A.421
claims are based on the 2006 loan origination and Plaintiff
asserts a violation continued to occur every time Plaintiff made
a payment under the original loan terms, Plaintiff confuses
“continu[ing] unlawful acts [with allegedly] continu[ing] ill
effects from an original violation.”
Plaintiff’s claim is
analogous to the “tester” claim in Havens, the discrete
discrimination claims raised in Morgan, and the building and
construction claims raised in Garcia.
As one court noted,
“[e]ven assuming that the loans violated plaintiffs' rights under
the FHA . . ., it did so directly, and the violation was complete
at the time the loan issued.”
Woodworth v. Bank of Am., Nat.
Ass'n, No. 09–3058–CL, 2011 WL 1540358, at *14 (D. Or. Mar. 23,
2011).
As in Havens, Morgan, Ledbetter, and Garcia, the salient
point is that here the 2006 loan origination was independently
actionable when it was completed in 2006.
Any ongoing effect of
the allegedly violative terms of the 2006 loan origination “was
merely the manifestation of continued ill effects from the
14 - OPINION AND ORDER
original violation which alone had no present legal consequence
and [cannot] resuscitate [Plaintiff’s] claim.”
Woodward, 2011 WL
1540358, at *14 (citing Garcia, 526 F.3d at 462-63).
Plaintiff also relies on Ramirez v. Greenpoint Mortgage
Funding, Inc., 633 F. Supp.2d 922 (N.D. Cal. 2008), to support
her assertion that her claims are not time-barred because she
challenges a “pattern” of misconduct that continued into the
limitations period.
Ramirez, however, involved a disparate-
impact claim relating to a class of consumers while this case
involves a disparate-treatment claim related only to Plaintiff.
See Woodworth, 2011 WL at *14 (“Ramirez involved a disparate
impact claim, not a disparate treatment claim, and is therefore
factually distinguishable from the facts of this case”).
Ramirez, therefore, does not establish Plaintiff’s claims in this
case constitute continuing violations.
In addition, even if the 2006 loan origination was not
a discrete event for purposes of the continuing-violation
analysis, Plaintiff received and accepted a loan modification in
April 2010 that ran through April 2013.
Thus, Defendant’s
actions with regard to the 2006 loan origination were not a
continuous course of conduct from 2006 through September 2014.
To the extent that Plaintiff’s claims under the FHA and
§ 659A.421 rest on denials of Plaintiff’s applications for loan
modification that occurred before September 17, 2012, the
15 - OPINION AND ORDER
analysis is similar.
Each denial of an application for loan
modification was independently actionable when it was completed.
In addition, Plaintiff does not allege with specificity any loanmodification application that Defendant denied before
September 17, 2012.
Although Plaintiff alleges generally that
Defendant denied her applications for modification “seven times
between January 2009 and September 2014” (Second Am. Compl. at
¶ 17), Plaintiff only alleges with specificity the denial of
applications in February 2013, July 2013, October 2013, and
September 2014, none of which are time-barred.
Finally, to the
extent that Plaintiff’s claim rests on Defendant’s conduct
related to the repayment plan that Plaintiff rejected at some
point, that occurred and “terminated” at the time Defendant
offered and Plaintiff rejected the plan.
Accordingly, the Court grants Defendant’s Motion to
Dismiss Plaintiff’s claims for violation of Oregon Revised
Statute § 659A.421 and the FHA to the extent that those claims
involve the 2006 loan origination; Plaintiff’s modification
applications denied before September 17, 2012; and/or the
repayment plan that Plaintiff rejected to the extent that event
occurred before September 17, 2012.
The Court, therefore,
dismisses with prejudice those portions of those claims on the
ground that they are barred by the relevant statutes of
limitations.
16 - OPINION AND ORDER
B.
Plaintiff’s claim under the UTPA.
In her Third Claim Plaintiff alleges Defendant violated
the Oregon UTPA when it (1) “made false and misleading
representations concerning the nature of the transaction or
obligation . . . to Plaintiff when it originally informed
Plaintiff at signing that, if she made timely payments for two
years, she would be entitled to receive a modification with a
lower interest rate” and (2) “denied each of Plaintiff's
applications for loan modification after the initial two year
period.”
Second Am. Compl. at ¶¶ 36, 38.
Oregon Revised Statute § 646.638(6) provides in
pertinent part that an action must be brought under the UTPA
“within one year after the discovery of the unlawful method, act
or practice.”
As noted, Plaintiff filed this action on
September 17, 2014.
According to Defendant, therefore, any
portion of Plaintiff’s UTPA claim based on Defendant’s conduct
before September 17, 2013, is untimely.
Plaintiff, in turn,
asserts all of her Oregon UTPA claim is timely pursuant to the
continuing-violations theory.
Plaintiff does not cite nor could this Court find a
case in which an Oregon court applied the continuing-violation
doctrine to toll the limitations period of the Oregon UTPA.
Assuming without deciding that Oregon courts would permit the
application of the continuing-violation theory in the context of
17 - OPINION AND ORDER
the Oregon UTPA, the Court concludes the continuing-violation
doctrine does not apply to save that portion of Plaintiff’s
Oregon UTPA claim that rests on Defendant’s actions prior to
September 17, 2013.
Accordingly, the Court grants Defendant’s Motion to Dismiss
Plaintiff’s claim for violation of the Oregon UTPA to the extent
that claim involves the 2006 loan origination and/or Plaintiff’s
modification applications that Defendant denied before
September 17, 2013.
The Court, therefore, dismisses with
prejudice that portion of Plaintiff’s UTPA claim on the ground
that it is barred by the relevant statute of limitations.
C.
Plaintiff’s claim under the ECOA.
In her Fifth Claim Plaintiff alleges Defendant violated
the ECOA when it “discriminated against Plaintiff with respect to
a credit transaction because of Plaintiff’s race.”
Compl. at ¶ 50.
Second Am.
Plaintiff does not make clear either in her
Second Amended Complaint nor in her Response to Defendant’s
Motion to Dismiss whether her claim for violation of the ECOA
rests on Defendant’s conduct related to the 2006 loan
origination, the repayment plan that Plaintiff rejected, or
Plaintiff’s unsuccessful attempts to obtain loan modifications,
or some combination of those issues.
Defendant contends to the
extent that Plaintiff’s claims relate to the 2006 loan
origination or Defendant’s rejections of Plaintiff’s applications
18 - OPINION AND ORDER
for loan modifications that occurred prior to September 17, 2009,
those portions of Plaintiff’s claim are time-barred.
Plaintiff,
in turn, asserts all of her ECOA claim is timely under the
continuing-violations theory.
The ECOA currently provides actions brought under that
statute must be commenced within “5 years after the date of
occurrence of the violation.”
15 U.S.C. § 1691e(f).
At the time
of the 2006 loan origination, however, the ECOA contained a twoyear limitations period.
15 U.S.C. § 1691e(f)(2010), amended by
Dodd–Frank Wall Street Reform and Consumer Protection Act
(Dodd–Frank Act), Pub.L. No. 111–203, 124 Stat. 1376 (2010).
Courts have held Congress did not clearly manifest an intent for
the longer limitations period enacted in July 2010 to apply
retroactively, and, therefore, the two-year limitations period
applies to claims that accrued before July 2010.
See, e.g.,
Empire Bank v. Dumond, No. 13–CV–0388–CVE–PJC, 2013 WL 6238605,
at *3 (N.D. Okla. Dec. 3, 2013).
Courts in this district have held the continuing-violation
doctrine applies to actions pursuant to the ECOA when the
parameters for that doctrine are satisfied.
See, e.g.,
Subramaniam v. Beal, No. 3:12–CV–01681–MO, 2013 WL 5462339, at
*10-*11 (D. Or. Sept. 27, 2013); Woodworth, 2011 WL 1540358, at
*12-*13.
Plaintiff does not specify in her Second Amended Complaint
19 - OPINION AND ORDER
nor in her Response to Defendant’s Motion whether her ECOA claim
rests on Defendant’s conduct related to the 2006 loan
origination, the repayment plan that Plaintiff rejected at some
point, or Plaintiff’s various applications for loan
modifications.
As noted, however, Plaintiff asserts all of her
claims should be deemed timely under the continuing-violations
doctrine.
For the same reasons that the Court concluded the
continuing-violations doctrine does not apply to Plaintiff’s
claims under the FHA, the Court concludes it does not apply to
Plaintiff’s claims under the ECOA.
In short, Plaintiff has not
established Defendant’s actions are a continuing-violation rather
than a series of discrete acts, each of which became actionable
at the time they occurred.
The Court, therefore, concludes the
continuing-doctrine does not apply to save those portions of
Plaintiff’s ECOA claim that rest on the 2006 loan origination; on
Defendant’s conduct related to the repayment plan that Plaintiff
rejected to the extent that it occurred before September 17,
2009; or on Defendant’s actions prior to September 17, 2009.
Accordingly, the Court grants Defendant’s Motion to Dismiss
Plaintiff’s claim for violation of the ECOA to the extent that
claim involves the 2006 loan origination; Plaintiff’s
modification applications denied before September 17, 2009;
and/or the repayment plan that Plaintiff rejected to the extent
20 - OPINION AND ORDER
that it occurred before September 17, 2009.
The Court,
therefore, dismisses with prejudice those portions of Plaintiff’s
ECOA claim on the ground that they are barred by the relevant
statute of limitations.
III. Plaintiff fails to state claims for violation of § 659A.421,
the FHA, the UPTA, and the ECOA.
To the extent that Plaintiff’s claims are not time-barred,
Defendant asserts Plaintiff fails to state claims adequately for
violation of § 659A.421(3), the FHA, Oregon UTPA, and the ECOA.
A.
Plaintiff’s claims for violation of § 659A.421(3) and
the FHA.
Oregon Revised Statute § 659A.421(3)(a) provides in
pertinent part:
“A person whose business includes engaging in
residential real estate related transactions may not discriminate
against any person in making a transaction available, or in the
terms or conditions of the transaction, because of race.”
Section 3605(a) of the FHA provides in pertinent part:
“It shall
be unlawful for any person or other entity whose business
includes engaging in residential real estate-related transactions
to discriminate against any person in making available such a
transaction, or in the terms or conditions of such a transaction,
because of race.”
As noted, there is not any Oregon appellate
decision interpreting Oregon Revised Statute § 659A.421(3).
This
Court, therefore, looks to federal authority related to the FHA
and other federal discrimination statutes to interpret
21 - OPINION AND ORDER
§ 659A.421(3)(a).
To state a prima facie claim for disparate treatment
under the FHA and § 659A.421(3), Plaintiff must allege:
(1) [she was] a member of a protected class;
(2) [she] attempted to engage in a “real estaterelated transaction” with [Defendant], and met all
relevant qualifications for doing so;
(3) [Defendant] refused to transact business with
[Plaintiff] despite [her] qualifications; and
(4) [Defendant] continued to engage in that type
of transaction with other parties with similar
qualifications.
Bojorquez v. Wells Fargo Bank, NA, No. 6:12–CV–02077–AA, 2013 WL
6055258, at *6 (D. Or. Nov. 7, 2013)(quotation omitted).
Plaintiff must also plead Defendant refused to transact business
with Plaintiff because of her race.
As noted, Plaintiff alleges in her Second Amended
Complaint that Defendant violated § 659A.421(3) when it
“discriminated against Plaintiff in making a transaction
available, or in the terms or conditions of the transaction,
because of Plaintiff's race.”
Second Am. Compl. at ¶ 27.
Plaintiff alleges Defendant violated § 3605 of the FHA “in
refusing to give loan terms for which Plaintiff was qualified and
other discriminatory conduct continuing as late as September 4,
2014.”
Second Am. Compl. at ¶ 47.
With respect to Defendant’s
actions after the relevant statute of limitations expired
(September 17, 2012), Plaintiff specifically alleges Defendant
denied her applications for loan modifications on February 20,
22 - OPINION AND ORDER
2013; July 15, 2013; October 7, 2013; and September 4, 2014.
Plaintiff appears to assert in her Response that Defendant’s
various reasons for its denials were merely pretextual.
Plaintiff also alleges she had a telephone exchange with
Defendant’s representative in the first half of 2013 in which the
representative asked Plaintiff if she was black and then told her
that she was “not going to get a modification and that those
loans were being sent to foreclosure.”
It is questionable whether Plaintiff’s single
allegation of the telephone conversation in which Defendant’s
representative asked her if she was black is sufficient to allege
that Defendant refused to offer Plaintiff a loan modification
from February 2013 through September 2014 on that basis.
Even if
the Court, however, accepted that allegation as sufficient, the
Court notes Plaintiff’s Second Amended Complaint, viewed in the
light most favorable to Plaintiff, does not contain any
allegation that Plaintiff “met all relevant qualifications” for a
loan modification or that Defendant “continued to engage in that
type of transaction with other parties with similar
qualifications.”
Plaintiff also does not plead any facts to
support an inference that she met all relevant qualifications for
a loan modification or that Defendant continued to engage in
those kinds of transactions with other parties with similar
qualifications.
Plaintiff makes these kinds of allegations
23 - OPINION AND ORDER
related to the 2006 loan origination, but that portion of her
claim is foreclosed as untimely and the allegations related to
that transaction are not repeated as to Plaintiff’s requests for
loan modifications.
Plaintiff also alleges Defendant offered Plaintiff a
repayment plan at some point, but the payments were “almost $800
per month higher than those of her original loan” and Plaintiff,
therefore, rejected Defendant’s offer.
Plaintiff, however, fails
to plead when this offer occurred, that she “met all relevant
qualifications” for a lower repayment interest rate or a lower
payment amount, or that Defendant offered lower repayment rates
or payment amounts to other parties with similar qualifications.
Finally, Plaintiff does not plead any facts to support an
inference that she met all relevant qualifications for a
repayment plan that had either a lower rate or lower payments or
that Defendant continued to engage in that kind of transaction
with other parties with similar qualifications
The Court, therefore, concludes Plaintiff has failed to
state a claim for those portions of her claims for violation of
Oregon Revised Statute § 659A.421(3) and § 3605 of the FHA that
are not barred by the relevant statutes of limitations.
Accordingly, the Court grants Defendant’s Motion to
Dismiss those timely portions of Plaintiff’s claims for violation
of Oregon Revised Statute § 659A.421(3) and § 3605 of the FHA for
24 - OPINION AND ORDER
failure to state a claim.
B.
Plaintiff’s UTPA claim.
The UTPA allows a private right of action for persons
who have suffered an “ascertainable loss of money or property,
real or personal, as a result of another person's willful use or
employment of a method, act or practice declared unlawful under
ORS 646.608.”
Or. Rev. Stat. § 646.638(1).
To state a claim under the UTPA Plaintiff must allege:
(1) a violation of § 646.608(1), (2) causation, (3) damages, and
(4) willfulness by Defendant.
See Fleshman v. Wells Fargo Bank,
N.A., 27 F. Supp. 3d 1127, 1139 (D. Or. 2014).
See also Feitler
v. Animation Celection, Inc., 170 Or. App. 702, 708 (2000).
Plaintiff does not specify in her Second Amended Complaint which
of the 77 possible violations of the UTPA set out in Oregon
Revised Statute § 646.608(1) that Defendant allegedly violated.
This alone makes analysis of Plaintiff’s UTPA claim difficult.
In addition, Plaintiff does not specifically plead willfulness by
Defendant with respect to that portion of her UTPA claim that is
timely (i.e., Defendant’s denial of Plaintiff’s applications for
loan modification that occurred after September 17, 2013, and
Defendant’s offer of a repayment plan with higher payments to the
extent that the offer occurred after September 17, 2013).
“A
willful violation occurs when the person committing the violation
knew or should have known that the conduct of the person was a
25 - OPINION AND ORDER
violation.”
Or. Rev. Stat. § 646.605(10).
Plaintiff points out in her Response that a court in
this district has concluded
factual allegations offered in support of a UTPA
claim must somehow suggest the defendant acted
willfully at the time of the misrepresentation,
perhaps by alleging misconduct so inconsistent
with the defendant's original promise that the
court could reasonably infer the defendant did not
intend to comply with her promises at the time
they were made.
McKie v. Sears Protection Co., No. 10–1531–PK, 2011 WL 1587103,
at *2 (D. Or. Apr. 26, 2011)(emphasis added).
As noted,
Plaintiff alleges Defendant told Plaintiff during the 2006 loan
origination that “if she made timely payments for two years, she
would be entitled to receive a modification with a lower interest
rate.”
Plaintiff alleges she made timely payments for two years
and Defendant denied many of Plaintiff’s applications for loan
modification after the two years expired.
Plaintiff asserts
these facts sufficiently allege misconduct by Defendant that is
“so inconsistent with [Defendant’s] original promise” that an
inference of willfulness is reasonable.
Plaintiff’s argument is unpersuasive because in
addition to these allegations, Plaintiff also alleges in her
Second Amended Complaint that she, in fact, received a loan
modification from Defendant and that her interest rate was
lowered from April 2010 to April 2013.
According to Plaintiff’s
own allegations, therefore, Defendant advised Plaintiff in 2006
26 - OPINION AND ORDER
that she would be eligible for a loan modification with a lower
interest rate if she made timely payments for two years,
Plaintiff made timely payments for two years, and Defendant gave
Plaintiff a loan modification with a lower interest rate.
The
Court cannot reasonably infer from the allegations in Plaintiff’s
Second Amended Complaint that Defendant acted so inconsistently
with its statement to Plaintiff during the 2006 loan modification
that Defendant’s conduct in denying Plaintiff’s other
applications for loan modification or in offering her a second
repayment plan with higher payments was willful conduct within
the meaning of the UTPA.
Accordingly, the Court grants Defendant’s Motion to
Dismiss as to the portion of Plaintiff’s UTPA claim that is
timely for failure to state a claim.
C.
Plaintiff’s ECOA claim.
15 U.S.C. § 1691(a)(1) prohibits a creditor from
discriminating against any applicant “with respect to any aspect
of a credit transaction on the basis of race.”
To state a claim
for violation of the ECOA Plaintiff must allege she “(1) is a
member of a protected class; (2) applied for credit; (3) was
qualified for credit; and (4) was denied credit, despite being
qualified.”
Blair v. Bank of Am., N.A., No. 10–CV–946–SI, 2012
WL 860411, at *12 (D. Or. Mar. 13, 2012)(citation omitted).
Plaintiff’s ECOA claim may not be sustained as to her
27 - OPINION AND ORDER
2006 loan origination because that portion of her claim is
untimely.
With respect to that portion of her ECOA claim related
to Defendant’s denials of her modification applications from
February 2013 through September 2014, Plaintiff fails to allege
she was qualified to receive those modifications or to allege any
facts from which the Court could infer Plaintiff was qualified to
receive those modifications.
The only factual allegations in
Plaintiff’s Second Amended Complaint related to Plaintiff’s
creditworthiness relate to her credit score, income, and
employment at the time of the 2006 loan origination.
Plaintiff’s
Second Amended Complaint does not contain factual allegations
related to any factors that might determine the creditworthiness
of Plaintiff at the time of her modification applications.
In
addition, Plaintiff received a loan modification from April 2010
to April 2013 that reduced the interest rate on her loan.
Accordingly, during that time the Court cannot infer Plaintiff
was denied credit.
The Court, therefore, concludes Plaintiff has
not stated a claim for violation of the ECOA as to that portion
of her ECOA claim that is timely.
Accordingly, the Court grants Defendant’s Motion to
Dismiss that portion of Plaintiff’s ECOA claim that is timely for
failure to state a claim.
28 - OPINION AND ORDER
CONCLUSION
For these reasons, the Court GRANTS Defendant’s Motion (#8)
to Dismiss Plaintiff’s Second Amended Complaint.
The Court
DISMISSES with prejudice those portions of Plaintiff’s claims
that are time-barred by the relevant statutes of limitation as
set out in this Opinion and Order.
The Court also DISMISSES
without prejudice the remainder of Plaintiff’s claims that are
not time-barred.
The Court, however, grants Plaintiff leave to
file a Third Amended Complaint no later than October 28, 2015, to
cure the defects set out in this Opinion and Order as to the
remainder of Plaintiff’s claims that are not time-barred.
The
Court advises Plaintiff that leave to amend is not given to
allege new or different claims based on the same facts.
IT IS SO ORDERED.
DATED this 9th day of October, 2015.
/s/ Anna J. Brown
ANNA J. BROWN
United States District Judge
29 - OPINION AND ORDER
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