Colquitt v. Manufacturers and Traders Trust Company

Filing 25

Opinion and Order. The Court GRANTS Defendants Motion 20 to Dismiss Plaintiffs Third Amended Complaint and DISMISSES this matter with prejudice. Signed on 04/01/2016 by Judge Anna J. Brown. See attached 16 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
[phone]
Attorneys for Plaintiff
DAVID J. ELKANICH
NELLIE Q. BARNARD
Holland & Knight, LLP
2300 US Bancorp Tower
111 S.W. Fifth Avenue
Portland, OR 97204
[phone]
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 (#20) to Dismiss
Plaintiff’s Third Amended Complaint.

For the reasons that

follow, the Court GRANTS Defendant’s Motion and DISMISSES this
matter with prejudice.

BACKGROUND
The following facts are taken from Plaintiff’s Third Amended
Complaint and the parties’ filings related to Defendants’ Motion
to Dismiss.
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 “permanent loan modification with a lower interest
rate” if she made timely payments for two years.
Plaintiff made timely payments on the loan for two years.
Plaintiff subsequently “repeatedly attempted to obtain a
permanent loan modification from Defendant that contain[ed] terms
consistent with the parties’ agreement.”
¶ 15.

Third Am. Compl. at

At some point before April 2010 Plaintiff received a loan

modification from Defendant, and her interest rate was

2 - OPINION AND ORDER

temporarily lowered between April 2010 and April 2013.1
In September 2012 and May 2013 Plaintiff submitted to
Defendant applications for permanent loan modifications.
Defendant denied both applications.
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.
Third Am. Compl. at ¶ 30.
On July 15, 2013, Defendant offered Plaintiff a repayment
plan for up to 18 months that set payments at nearly $800 per
month higher than those of her original refinance loan.
Plaintiff “verbally rejected the repayment plan.”
On October 7, 2013, Defendant denied Plaintiff’s application
for loan modification “due to Plaintiff's failure to make all of
the required payments under a trial payment period.”

1

Although Plaintiff omitted the allegations related to this
loan modification from her Third Amended Complaint, Plaintiff did
not object when Defendant made reference to those allegations in
its Motion to Dismiss. In addition, in the parties’ briefs
related to Defendant’s Motion to Dismiss Plaintiff’s Second
Amended Complaint the parties agreed Defendant gave Plaintiff a
loan modification in 2010 that lowered Plaintiff’s interest rate
for three years.
3 - OPINION AND ORDER

On April 4, 2014, Plaintiff received a letter from Defendant
“inviting Plaintiff to apply for a permanent loan modification.”
Plaintiff applied for a permanent loan modification in response
to Defendant’s letter.
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 despite . . . never having given Plaintiff a loan
modification.”

Third Am. Compl. at ¶ 36.2

On May 16, 2014, Northwest Trustee Services, “the
foreclosure trustee for Defendant,” initiated a nonjudicial
foreclosure on Plaintiff’s property.

The sale was enjoined in

February 2015 when Plaintiff obtained a preliminary injunction.3
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

2

As noted, the parties agreed in the context of Defendant’s
Motion to Dismiss Plaintiff’s Second Amended Complaint that
Defendant provided Plaintiff with a temporary loan modification
in 2010. The Court, viewing this allegation in the light most
favorable to Plaintiff, interprets this allegation as an
assertion that Defendant never gave Plaintiff a permanent loan
modification.
3

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

Northwest Trustee.
On May 1, 2015, Plaintiff filed a second amended complaint
in state court against only Defendant asserting 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 Equal Credit
Opportunity Act (ECOA), 15 U.S.C. § 1691; and violation of the
Fair Housing Act (FHA), 42 U.S.C. § 3605.
On May 11, 2015, Defendant removed the matter to this Court
on the basis of federal-question jurisdiction.
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.
On October 9, 2015, the Court issued an Opinion and Order in
which it granted Defendant’s Motion to Dismiss Plaintiff’s Second
Amended Complaint.

Specifically, the Court dismissed the

following claims with prejudice as untimely:

(1) Plaintiff’s

claims for violation of Oregon Revised Statute § 659A.421 and the
FHA to the extent that those claims involved the 2006 loan
origination and Plaintiff’s modification applications denied
before September 17, 2012; (2) Plaintiff’s claim for violation of
the Oregon UTPA to the extent that claim involved the 2006 loan
origination and/or Plaintiff’s modification applications that

5 - OPINION AND ORDER

Defendant denied before September 17, 2013; and (3) Plaintiff’s
claim for violation of the ECOA to the extent that claim involved
the 2006 loan origination and Plaintiff’s modification
applications denied before September 17, 2009.

The Court

dismissed the remainder of Plaintiff’s claims for failure to
state a claim and granted Plaintiff leave to file a Third Amended
Complaint to cure the deficiencies in those claims set out in the
Court’s Opinion and Order.
On November 18, 2015, Plaintiff filed a Third Amended
Complaint.
On December 14, 2015, Defendant filed a Motion to Dismiss
Plaintiff’s Third Amended Complaint.

The Court took Defendant’s

Motion under advisement on January 21, 2016.

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).
6 - OPINION AND ORDER

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).

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).

7 - OPINION AND ORDER

DISCUSSION
As noted, Defendant moves to dismiss all of Plaintiff’s
claims on the ground that Plaintiff fails to state claims for
violation of § 659A.421(3), the FHA, Oregon UTPA, and the ECOA.
I.

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.”

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
§ 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
8 - OPINION AND ORDER

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.

Id.

As noted, in her Second Amended Complaint Plaintiff alleged
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 alleged in her Second

Amended Complaint that Defendant violated § 3605 of the FHA when
it refused “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.

Plaintiff also alleged 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.”
In its October 9, 2015, Opinion and Order the Court noted it
was questionable whether Plaintiff’s single allegation of the
telephone conversation in which Defendant’s representative asked
9 - OPINION AND ORDER

her if she was black was sufficient to support Plaintiff’s claim
that Defendant refused to offer Plaintiff a loan modification
from February 2013 through September 2014 on that basis.

The

Court concluded, however, that even if it accepted that
allegation as sufficient, Plaintiff’s Second Amended Complaint,
viewed in the light most favorable to Plaintiff, did 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.”

The Court notes Plaintiff made those kinds of

allegations related to the 2006 loan origination, but that
portion of her claim was foreclosed as untimely and the
allegations related to that transaction were not repeated as to
Plaintiff’s requests for subsequent loan modifications.
Moreover, with respect to the offer by Defendant for a repayment
plan that has payments “almost $800 per month higher than those
of her original loan,” the Court noted Plaintiff failed to plead
that she “met all relevant qualifications” for a lower repayment
interest rate or a lower payment amount or that Defendant offered
lower repayment interest rates or payment amounts to other
parties with similar qualifications.
In her Third Amended Complaint Plaintiff does not include
any additional factual allegations relating to her qualifications
for a loan modification or to Defendant’s conduct in those kinds

10 - OPINION AND ORDER

of transactions with other parties with similar qualifications to
give rise to an inference that Defendant denied her loan
modifications on the basis of her race.

Moreover, the question

remains as to whether Plaintiff’s single allegation of the
telephone conversation in which Defendant’s representative asked
her if she was black is sufficient to support Plaintiff’s claim
that Defendant refused to offer Plaintiff a loan modification
from February 2013 through September 2014 on that basis.

Even if

that allegation was sufficient, however, Plaintiff still fails to
support her allegations sufficiently as to her qualifications for
a loan modification during the relevant period.

Although

Plaintiff alleges “on information and belief” that she was
qualified for a loan modification, Plaintiff does not allege
sufficient facts for the Court to infer without speculating that
she qualified for such a loan modification; for example,
Plaintiff does not allege any facts regarding her debt level, her
income, the amount of her loan payments, or other financial
information at the time of her various applications for loan
modifications.

The Court, therefore, cannot infer Plaintiff was

qualified for a loan modification or that people with
qualifications similar to Plaintiff received loan modifications.
Accordingly, the Court concludes Plaintiff has failed to state
claims for violation of Oregon Revised Statute § 659A.421(3) and
§ 3605 of the FHA.

11 - OPINION AND ORDER

Accordingly, the Court grants Defendant’s Motion to Dismiss
Plaintiff’s claims for violation of Oregon Revised Statute
§ 659A.421(3) and § 3605 of the FHA.

Because Plaintiff

previously was given the opportunity to replead her claims with
sufficiency and has failed to do so, the Court declines to permit
Plaintiff to replead these claims again and dismisses them with
prejudice.
II.

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).

In

its October 9, 2015, Opinion and Order the Court noted Plaintiff
failed to identify which of the 77 possible sections of
§ 646.608(1) that Defendant allegedly violated and failed to
specifically plead willfulness by Defendant.

The Court noted

“[a] willful violation occurs when the person committing the
violation knew or should have known that the conduct of the

12 - OPINION AND ORDER

person was a violation.”

Or. Rev. Stat. § 646.605(10).

In her Third Amended Complaint Plaintiff alleges Defendant
failed to deal with her in good faith in violation of Oregon
Revised Statute § 646.608(1)(u), which provides:

“A person

engages in an unlawful practice if in the course of the person's
business . . . the person . . . [e]ngages in any other unfair or
deceptive conduct in trade or commerce.”

Although Plaintiff

alleges Defendant “willfully made false and misleading
representations concerning credit availability and the nature of
the transaction when it denied each of Plaintiff’s applications
for loan modification,” she fails to allege any specific facts as
to how Defendant failed to deal with her in good faith.
Plaintiff also does not identify with any specificity what
statements made by Defendant were false and misleading.

In

addition, Plaintiff does not include any allegations from which
the Court could infer Defendant “knew or should have known [its
conduct] was a violation” of the UTPA.
Finally, Plaintiff does not allege sufficient facts to
support the element of causation, which requires a plaintiff to
plead “sufficient detail to put Defendant on notice of the causal
relationship between a particular alleged unfair business
practice and the ascertainable loss and damages incurred as a
result of that particular conduct.”

Fleshman v. Wells Fargo

Bank, N.A., 27 F. Supp. 3d 1127, 1141 (D. Or. 2014).

13 - OPINION AND ORDER

Accordingly, the Court grants Defendant’s Motion to
Dismiss Plaintiff’s UTPA claim.

Because Plaintiff previously was

given the opportunity to replead her UTPA claim with sufficiency
and has failed to do so, the Court declines to permit Plaintiff
to replead that claim again and dismisses it with prejudice.
III.

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).
In is October 9, 2015, Opinion and Order the Court concluded
Plaintiff failed to allege in her Second Amended Complaint that
she was qualified to receive loan modifications from February
2013 through September 2014 or to allege any facts from which the
Court could infer Plaintiff was qualified to receive such
modifications.

The only factual allegations in Plaintiff’s

Second Amended Complaint related to Plaintiff’s creditworthiness
based on her credit score, income, and employment at the time of
the 2006 loan origination.

Plaintiff’s Second Amended Complaint,

however, did not contain any factual allegations related to

14 - OPINION AND ORDER

factors that might establish Plaintiff’s the creditworthiness at
the time of her modification applications.

As noted, Plaintiff

received a loan modification from April 2010 to April 2013 that
temporarily reduced the interest rate on her loan.

Accordingly,

the Court cannot infer Plaintiff was denied credit during that
time.
In her Third Amended Complaint Plaintiff still fails to make
any factual allegations as to factors that might establish the
creditworthiness of Plaintiff at the time of her modification
applications as set out above.

For the reasons noted earlier,

the Court concludes Plaintiff’s bare assertion that she was
qualified “on information and belief” is insufficient to state a
claim under the ECOA.

Moreover, Plaintiff has not alleged facts

as to the financial information that she provided to Defendant
such as income, debt level, credit score, or other information
relevant to her creditworthiness at the time of her loanmodification applications.

The Court, therefore, concludes

Plaintiff has not stated a claim for violation of the ECOA.
Accordingly, the Court grants Defendant’s Motion to Dismiss
Plaintiff’s ECOA claim.

Because Plaintiff previously was given

the opportunity to replead her ECOA claim with sufficiency and
has failed to do so, the Court declines to permit Plaintiff to
replead that claim again and dismisses it with prejudice.

15 - OPINION AND ORDER

CONCLUSION
For these reasons, the Court GRANTS Defendant’s Motion (#20)
to Dismiss Plaintiff’s Third Amended Complaint and DISMISSES this
matter with prejudice.
IT IS SO ORDERED.
DATED this 1st day of April, 2016.

/s/ Anna J. Brown
ANNA J. BROWN
United States District Judge

16 - OPINION AND ORDER