OATES v. WELLS FARGO BANK, N.A.

Filing 14

MEMORANDUM AND ORDER THAT DEFENDANT'S MOTION TO DISMISS IS GRANTED IN PART AND DENIED IN PART; ETC.. SIGNED BY HONORABLE EDUARDO C. ROBRENO ON 7/31/12. 8/2/12 ENTERED AND E-MAILED.(jl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
THOMAS A. OATES, JR.,

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Plaintiff,
v.
WELLS FARGO BANK, N.A.,
Defendant.

CIVIL ACTION
NO. 12-1177

M E M O R A N D U M
EDUARDO C. ROBRENO, J.

JULY 31, 2012

Thomas A. Oates, Jr. (“Plaintiff”) brings this civil
action against Wells Fargo Bank, N.A. (“Defendant”), for
violations of the Fair Credit Reporting Act (“FCRA”), the Fair
Debt Collection Practices Act (“FDCPA”), and Pennsylvania law.
Defendant removed from the Court of Common Pleas for Chester
County, Pennsylvania, and moved to dismiss Plaintiff’s Complaint
pursuant to Federal Rule of Civil Procedure 12(b)(1) and (6).
For the reasons that follow, the Court will grant in part and
deny in part the Motion to Dismiss.

I.

BACKGROUND
Because the facts of this case occur in the foreground

of a complex regulatory scheme involving a national flood

insurance program, a discussion of the facts follows an
explanation of that statutory and regulatory scheme.

A.

National Flood Insurance Act of 1968 and Subsequent
Amendments
Congress enacted the National Flood Insurance Act of

1968 (“NFIA”) to share the risk of flood losses by establishing
a national flood insurance program. See 42 U.S.C. § 4001(a)
(2006). Congress amended the NFIA to require property owners
assisted by federal programs or federally insured institutions
to obtain flood insurance if the subject property is located in
a special flood hazard area (“SFHA”).1 See Flood Disaster
Protection Act of 1973 (“FDPA”) § 102, 42 U.S.C. § 4012a (2006).
And Congress further amended the NFIA to require lenders to
notify purchasers of property, in writing, within a reasonable
time before signing the purchase agreement, that the property is
located in a SFHA.2 National Flood Insurance Reform Act of 1994
1

A SFHA is “the land in the flood plain within a
community having at least a one percent chance of flooding in
any given year as designated by the Director of [the Federal
Emergency Management Agency].” 12 C.F.R. § 339.1(k) (2011).
2

Such written notification must include a warning that
the property is within a SFHA, a description of the flood
insurance purchase requirements under the FDPA, a statement that
flood insurance coverage may be purchased under the national
flood insurance program or through a private insurer, and a
statement whether federal disaster relief assistance is
available in the event of damage to the property caused by a
flood. See 42 U.S.C. § 4104a(3) (2006); 12 C.F.R. § 339.9(b)
(2011).
2

(“Reform Act”) § 527, 42 U.S.C. § 4104a(a)(1); 12 C.F.R. §
339.9(a).
If the lender determines at any time during the term
of a loan that the property securing the loan is either not
covered by flood insurance or is covered inadequately, the
lender must notify the borrower that the borrower should obtain
insurance at the borrower’s expense. 42 U.S.C. § 4012a(e)(1); 12
C.F.R. § 339.7. If the borrower fails to purchase flood
insurance coverage within forty-five days after the lender
provides notice, the lender must purchase flood insurance on
behalf of the borrower and may charge the borrower any
associated costs of premiums and fees. 42 U.S.C. § 4012a(e)(2);
12 C.F.R. § 339.7. Lenders may rely on a third party to
determine whether a property falls within a SFHA but “only to
the extent that such person guarantees the accuracy of the
information.” 42 U.S.C. § 4104b(d) (2006). Finally, the borrower
and lender may jointly request the Administrator of the Federal
Emergency Management Agency (“Director”) to review whether a
property is located in a SFHA. Id. § 4012a(e)(3).
A federal agency may assess a civil penalty against a
lender demonstrating a pattern or practice of failing to provide
notice or purchase flood insurance coverage as required. Id. §
4012a(f)(2)(B). And the Reform Act protects lenders, in certain

3

circumstances, from liability under state law when the lender
purchases flood insurance on behalf of a borrower:
Notwithstanding any State or local law, for purposes
of this subsection, any regulated lending institution
that purchases flood insurance or renews a contract
for flood insurance on behalf of or as an agent of a
borrower of a loan for which flood insurance is
required shall be considered to have complied with the
regulations issued under subsection (b) of this
section.
Id. § 4012a(f)(6).

B.

Facts
On June 29, 2007, Defendant loaned Plaintiff $241,500.

Compl. ¶¶ 4-5, ECF No. 1. The loan was secured by a mortgage on
real property and improvements located at 1019 Kimberton Road,
West Pikeland Township, Pennsylvania (“the Property”).3 Id. By
the time of closing on June 27, 2007, Defendant obtained a flood
zone certification that the Property was not located within a
SFHA. Id. ¶ 8. Plaintiff commenced making monthly payments on
the loan. Id. ¶ 9.
On August 9, 2007, Defendant obtained a second flood
zone certification that the Property was located in a SFHA. Id.
¶¶ 11-12. Accordingly, Defendant advised Plaintiff that the
Property was in a SFHA and that Plaintiff must obtain flood
insurance on the Property. Id. ¶ 13.
3

Plaintiff attached a Note memorializing the loan and
the Mortgage to the Complaint. Compl. Ex. A.
4

Defendant acquired flood insurance on the Property and
assessed the premiums paid to the monthly loan payments. Id. ¶¶
14, 36. Plaintiff refused to pay the additional flood insurance
premiums because he believed the second flood zone certification
to be in error.4 Id. ¶ 15.
In 2008, however, Defendant reported to certain credit
reporting agencies that Plaintiff was in default or late in
making payments on the loan. Id. ¶ 18. And on August 2, 2010,
Defendant initiated a mortgage foreclosure action against
Plaintiff because the loan was in default. Id. ¶ 19-20. Both
actions were the result of the additional insurance premium
charges Defendant assessed, which, Plaintiff contends, were
erroneous. Id. ¶ 17-34. Plaintiff continued to make monthly
payments on the loan less any premiums assessed for the flood
insurance policy.5 Id. ¶ 36.
Plaintiff suffered damages in the form of costs for
obtaining a surveyor and providing information to Defendant that
the Property was not in a SFHA, unreimbursed and improperly
4

Defendant advised Plaintiff that, to correct the
alleged error regarding the second flood zone certification,
Plaintiff must secure a surveyor to issue a letter of map
amendment (“LOMA”) to the Federal Emergency Management Agency
(“FEMA”). Compl. ¶ 88. Plaintiff secured a surveyor, who issued
a report on December 21, 2009. Id. ¶ 89.
5

To resolve the foreclosure, Plaintiff applied for and
received a loan modification, which was approved in June 2011.
Compl. ¶ 92.
5

assessed flood insurance premiums, attorney’s fees and costs,
and lost profits relating to Plaintiff’s business, Tom Oates
Automotive Center, arising from Plaintiff’s inability to obtain
financing because of alleged inaccuracies in Plaintiff’s credit
report. Id. ¶¶ 32-37.

II.

PROCEDURAL HISTORY
On August 2, 2011, Plaintiff commenced this action

against Defendant in the Court of Common Pleas of Chester
County, Pennsylvania. Plaintiff alleges the following six
counts: violation of the FCRA (Count I); violation of the FDCPA
(Count II); libel (Count III); negligence (Count IV); breach of
contract (Count V); and breach of warranty of good faith (Count
VI).
On March 6, 2012, Defendant removed to the U.S.
District Court for the Eastern District of Pennsylvania invoking
the Court’s federal-question and diversity jurisdiction.6 See 28
U.S.C. §§ 1331, 1332(a), 1441(b).
On March 13, 2012, Defendant moved to dismiss the
Complaint in its entirety. Mot. to Dismiss 1, ECF No. 5.
Plaintiff responded. Pl.’s Resp. 1, ECF No. 6. On July 27, 2012,
6

Plaintiff is an individual and citizen of
Pennsylvania. Compl. ¶ 2. Defendant is a corporation and citizen
of South Carolina, with a principal place of business in South
Carolina. Id. ¶ 3.
6

the Court held a hearing on the Motion. The Motion is now ripe
for disposition.

III. LEGAL STANDARD
A party may move to dismiss a complaint for failure to
state a claim upon which relief can be granted. Fed. R. Civ. P.
12(b)(6). When considering such a motion, the Court must “accept
as true all allegations in the complaint and all reasonable
inferences that can be drawn therefrom, and view them in the
light most favorable to the non-moving party.” DeBenedictis v.
Merrill Lynch & Co., 492 F.3d 209, 215 (3d Cir. 2007) (internal
quotation marks omitted). To withstand a motion to dismiss, the
complaint’s “[f]actual allegations must be enough to raise a
right to relief above the speculative level.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). This “requires more than
labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do.” Id. Although a
plaintiff is entitled to all reasonable inferences from the
facts alleged, a plaintiff’s legal conclusions are not entitled
to deference and the Court is “not bound to accept as true a
legal conclusion couched as a factual allegation.” Papasan v.
Allain, 478 U.S. 265, 286 (1986).
The pleadings must contain sufficient factual
allegations so as to state a facially plausible claim for
7

relief. See, e.g., Gelman v. State Farm Mut. Auto. Ins. Co., 583
F.3d 187, 190 (3d Cir. 2009). “‘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. (quoting Ashcroft v. Iqbal,
556 U.S. 662, 677 (2009)). In deciding a Rule 12(b)(6) motion,
the Court limits its inquiry to the facts alleged in the
complaint and its attachments, matters of public record, and
undisputedly authentic documents if the complainant’s claims are
based upon these documents. See Jordan v. Fox, Rothschild,
O’Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir. 1994); Pension
Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d
1192, 1196 (3d Cir. 1993).

IV.

DISCUSSION
Defendant moves to dismiss all claims in the Complaint

for failure to state a claim upon which relief can be granted.
Defendant moves to dismiss Plaintiff’s demand for lost profits
for lack of jurisdiction. For the reasons provided, the Court
will grant in part and deny in part the Motion to Dismiss.

A.

Flood Disaster Protection Act Preemption
First, Defendant argues that the FDPA preempts

Plaintiff’s state and federal claims. The Third Circuit has not
8

addressed whether there is an express or implied right of action
for violations of the flood zone determination and notification
requirements of the FDPA. Congress did not expressly confer a
private right of action in the FDPA. And courts that have
considered the issue have concluded that no private right of
action exists. See, e.g., Lukosus v. First Tenn. Bank Nat’l
Ass’n, 89 F. App’x 412, 412 (4th Cir. 2004) (per curiam).
None of Plaintiff’s claims is for a violation of the
FDPA; therefore, whether FDPA confers a private right of action
is not principally at issue here. Rather, Defendant contends
that Plaintiff cannot bring a state cause of action based on a
violation of the FDPA. The Pennsylvania courts have not ruled on
this issue. And federal and state courts generally refuse to
allow a private common law cause of action based on violations
of the FDPA. See Ford v. First Am. Flood Data Servs., No. 06453, 2006 WL 2921432, at *3 (M.D.N.C. Oct. 11, 2006) (reporting
cases). Plaintiff has not pointed to a single case in which a
court has allowed a common law claim based on a violation of the
FDPA. Rather, Plaintiff attempts to distinguish the authorities
to which Defendant cites. And Plaintiff makes no argument in
attempt to predict whether Pennsylvania would allow a cause of
action based on a violation of the FDPA. Therefore, the Court

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will dismiss Plaintiff’s common law claims to the extent they
are based on violations of the FDPA.7
Defendant further argues that Plaintiff cannot bring a
claim under the FCRA for a violation of the FDPA. As explained
in more detail below, Plaintiff claims Defendant violated the
FCRA by failing to investigate allegedly inaccurate information
furnished to certain credit reporting agencies. Plaintiff
contends Defendant failed to investigate a dispute Plaintiff
made in accordance with the FCRA. Plaintiff alleges, and
Defendant’s agent allegedly agreed, that certain reported credit
information relating to payment on the Note and Mortgage is
inaccurate because Defendant improperly assessed flood insurance
coverage premiums against Plaintiff that Plaintiff refused to
pay, thereby causing him to default on the Note. Although
Plaintiff’s FCRA claim relates to the FDPA, Plaintiff’s FCRA
claim is not based on a violation of the FDPA.8 Therefore, the
Court will deny the Motion with respect to Plaintiff’s FCRA
claim.
7

To the extent Plaintiff’s libel and negligence claims
are based on Defendant’s alleged failure to investigate
allegedly inaccurate information Defendant furnished to credit
reporting agencies and to the extent Plaintiff’s breach-ofcontract claim is based on the breach of the terms of the Note
and Mortgage, the Court will go on to consider Defendant’s
remaining arguments for dismissal.
8

In other words, Plaintiff does not, for example, claim
Defendant breached a duty owed by virtue of the FDPA.
10

B.

Count I: Fair Credit Reporting Act
Plaintiff alleges Defendant willfully and negligently

violated the FCRA by failing to investigate allegedly inaccurate
information and reporting allegedly inaccurate information to
credit reporting agencies. The FCRA “protect[s] consumers from
the transmission of inaccurate information about them, and . . .
establish[es] credit reporting practices that utilize accurate,
relevant, and current information in a confidential and
responsible manner.” Cortex v. Trans Union, L.L.C., 617 F.3d
688, 706 (3d Cir. 2010) (internal quotation marks omitted).
Among the duties imposed on furnishers of information to
consumer reporting agencies, the FCRA requires a furnisher of
information, in certain circumstances, to investigate the
completeness and accuracy of information furnished. See 15
U.S.C. § 1681s-2(b) (2006). The FCRA provides a private cause of
action for the willful and negligent violations of the FCRA. See
id. §§ 1681n, 1681o; see also Simmsparris v. Countrywide Fin.
Corp., 652 F.3d 355, 358 (3d Cir. 2011) (“This leaves 15 U.S.C.
§ 1681s-2(b) as the only section that can be enforced by a
private citizen seeking to recover damages caused by a furnisher
of information.”). And a furnisher is only liable for failing to
conduct a reasonable investigation after a consumer alerts the
credit reporting agency of disputed information and the agency
informs the furnisher of the dispute. See 15 U.S.C. §
11

1681i(a)(2) (2006); see also Simmsparris, 652 F.3d at 359 (“[A]
private citizen wishing to bring an action against a furnisher
must first file a dispute with the consumer reporting agency,
which then must notify the furnisher of information that a
dispute exists. Only after this notification can the furnisher
face any liability to a private individual.”).
Defendant moves to dismiss because Plaintiff failed to
allege he filed a dispute with a credit reporting agency and
that the agency notified Defendant of the dispute. This is not a
fair reading of the Complaint. In fact, Plaintiff alleges that
on August 22, 2009, he filed a dispute with Defendant and credit
reporting agencies. Compl. ¶ 26. Plaintiff further alleges that
“[u]pon information and belief, the Consumer Reporting Agencies
initiated inquiry into [Plaintiff’s] credit history by informing
[Defendant] that [Plaintiff] disputed the accuracy of the report
that he was delinquent on his Loan payments.” Id. ¶ 27.
Furthermore, Plaintiff alleges that the consumer reporting
agencies notified Defendant of the dispute and that Defendant
failed to reasonably investigate the dispute. Id. ¶¶ 46-47.
Thus, Plaintiff alleged sufficient facts that he followed FCRA
notice procedures.
Defendant further argues that Plaintiff fails to
allege facts to support a claim that Defendant failed to
investigate his dispute but instead “merely alleges his theory
12

and the legal conclusion that [Defendant] ‘recklessly
disregarded its obligations to investigate disputed information
under FCRA.’” Mem. in Supp. of Mot. to Dismiss 13 (quoting
Compl. ¶ 51). This also is not a fair reading of the Complaint.
Plaintiff alleges that he notified Defendant of the allegedly
erroneous report in December 2009, that Defendant’s
representative “verbally advised” him that it would make the
requested corrections, that Defendant continued to make
inaccurate reports even after reversal of the second SFHA
determination, and that Defendant failed to make any corrections
at least until August 2011.9 Compl. ¶¶ 26-29, 34. Therefore,
Plaintiff alleged facts that support a facially plausible claim
under the FCRA.
Finally, Defendant argues that any investigation it
would have taken into the allegedly inaccurate reports would
have been futile because Plaintiff failed to seek a reversal of
the second SFHA determination for two years. This argument is
immaterial because Plaintiff alleges Defendant continued to
violate the FCRA by furnishing inaccurate reports after reversal
9

In response, Plaintiff asserts that he is in
possession of a letter from Defendant dated December 15, 2009,
that purportedly acknowledges Plaintiff’s property does not
require flood insurance coverage. Pl.’s Resp. 11 n.3. Plaintiff
did not allege possession of the letter in the Complaint nor did
he attach it to the Complaint. Therefore, the Court will not
consider it at this stage in the proceedings. See Jordan, 20
F.3d at 1261.
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of the second SFHA determination in December 2009. Therefore,
the Court will deny the Motion with respect to Count I.

C.

Count II: Fair Debt Collection Practices Act
Defendant moves to dismiss Count II because Plaintiff

fails to allege facts that would demonstrate Defendant is a
“debt collector” under the FDCPA. See 15 U.S.C. § 1692k(a)
(2006) (establishing civil liability against debt collector for
violation of FDCPA). Plaintiff agrees that Defendant is not a
debt collector as defined under the FDCPA and withdraws Count
II. Pl.’s Resp. 18-19. Therefore, the Court will grant the
Motion with respect to Count II.

D.

Counts III & IV: Libel and Negligence
Defendant moves to dismiss Plaintiff’s libel and

negligence claims because the FCRA preempts those claims. The
FCRA establishes civil liability for certain violations of the
FCRA. See, e.g., 15 U.S.C. § 1681n (establishing civil liability
for willful noncompliance with FCRA); id. § 1681o (establishing
civil liability for negligent noncompliance with FCRA). The FCRA
also limits when a plaintiff may bring certain state law claims:
Except as provided in sections 1681n and 1681o of this
title, no consumer may bring any action or proceeding
in the nature of defamation, invasion of privacy, or
negligence
with
respect
to
the
reporting
of
information against any consumer reporting agency, any
user of information, or any person who furnishes
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information to a consumer reporting agency, based on
information disclosed pursuant to section 1681g,
1681h, or 1681m of this title, or based on information
disclosed by a user of a consumer report to or for a
consumer against whom the user has taken adverse
action, based in whole or in part on the report except
as to false information furnished with malice or
willful intent to injure such consumer.
15 U.S.C. § 1681h(e) (2006).
Defendant argues Plaintiff fails to allege facts that,
if proven, would establish Defendant acted with malice or
willful intent to injure, and, therefore, the FCRA preempts the
libel and negligence claims.
With respect to his libel claim, Plaintiff responds
that the FCRA does not preempt the claim because Plaintiff
alleged a facially plausible claim that Defendant acted with
malice or willful intent to injure Plaintiff. Specifically,
Plaintiff alleges Defendant was aware since December 2009 of the
allegedly inaccurate credit reports but, nevertheless, continued
to make inaccurate reports. Plaintiff alleges Defendant’s
personnel acknowledged the mistake but failed to correct it.
“Malice . . . may be alleged generally.” Fed. R. Civ.
P. 9(b). Plaintiff alleges Defendant intentionally reported
inaccurate information despite its knowledge that the Property
is not in a SFHA and, as such, flood insurance coverage is not
required. Therefore, the Court will deny the Motion to Dismiss
with respect to Count III. See Haynes v. Navy Fed. Credit Union,

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825 F. Supp. 2d 285, 297-98 (D.D.C. 2011) (finding defamation
claim not preempted by FCRA when plaintiff alleged, inter alia,
defendant knew delinquent mortgage payment reports were false).
With respect to his negligence claim under Count IV,
Plaintiff responds that the claim survives because § 1681o
provides liability for the negligent violation of the FCRA.10
Pl.’s Resp. 15-16. Although Plaintiff is correct, he stated a
claim for the negligent violation of the FCRA in Count I. Compl.
¶¶ 42, 52. Therefore, the Court will grant the Motion with
respect to Count IV.11

E.

Count V: Breach of Contract
Defendant moves to dismiss Plaintiff’s breach-of-

contract claim because Plaintiff did not identify a breach of

10

Plaintiff does not argue that his negligence claim
survives FCRA preemption, as he did with regard to his libel
claim, because Defendant acted with malice or willful intent to
injure. Therefore, the Court does not reach Defendant’s argument
that the Court must dismiss Plaintiff’s negligence claim
because, by definition, a plaintiff cannot allege “willful
negligence.” Mem. in Supp. of Mot. to Dismiss 15 (citing Shannon
v. Equifax Info. Servs., 764 F. Supp. 2d 714, 728 (E.D. Pa.
2011) (“By definition, a plaintiff cannot allege willful
negligence. Therefore, the only negligence action that Plaintiff
can pursue is a negligence action under the FCRA.”)).
11

Defendant also moves to dismiss Count IV under the
gist-of-the-action doctrine and the economic-loss doctrine
because Plaintiff’s claim is predicated on the terms of the Note
and Mortgage, and, therefore, Defendant’s duties are grounded in
contract. The Court need not reach these arguments because the
FCRA preempts Plaintiff’s negligence claim.
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any terms of the Mortgage. Under Pennsylvania law, a plaintiff
asserting a claim for the breach of contract must establish “(1)
the existence of a contract, including its essential terms, (2)
a breach of a duty imposed by the contract, and (3) resultant
damages.” Pennsy Supply, Inc. v. Am. Ash Recycling Corp., 895
A.2d 595, 600 (Pa. Super. Ct. 2006) (internal quotation marks
omitted). Defendant argues that the Mortgage does not require it
to challenge or investigate the SFHA determination, that
pursuant to the Mortgage Defendant may require Plaintiff to
escrow flood insurance premiums, that Plaintiff agreed to
maintain flood insurance on the Property, and that Defendant may
institute foreclosure proceedings.
Plaintiff responds that dismissal of the breach-ofcontract claim would be improper at this stage in the
proceedings. Plaintiff notes that Defendant’s assessment of
“sham” flood insurance premiums violates the term of the
Mortgage to “estimate the amount of Funds due on the basis of
current data and reasonable estimates of expenditures of future
Escrow Items or otherwise in accordance with Applicable Law.”
Mortgage ¶ 3. Plaintiff argues that Defendant’s assessment of
premiums after Plaintiff secured private flood insurance forced
Plaintiff to pay twice for flood insurance coverage, in
violation of the Mortgage. Furthermore, Plaintiff asserts
Defendant instituted foreclosure proceedings based on the
17

failure to pay premiums that Defendant allegedly admits were
unnecessary. Plaintiff contends that Defendant’s actions
constitute a breach of the implied covenant of good faith and
fair dealing.
At this stage in the proceedings, whether Defendant
breached either the Note or Mortgage is unclear. Plaintiff has
at least stated a facially plausible claim for breach of
contract. See Gelman, 583 F.3d at 190. Therefore, the Court will
deny the Motion with respect to Count V.

F.

Count VI: Breach of Warranty
Plaintiff alleges “[Defendant] warrants its contracts

to be fair, reasonable, and negotiated in good faith.” Compl. ¶
101. Defendant moves to dismiss Plaintiff’s breach-of-warranty
claim because it is not a cognizable claim. Indeed, Pennsylvania
does not recognize an independent cause of action for the breach
of the implied duty of good faith and fair dealing. See
Northview Motors, Inc. v. Chrysler Motors Corp., 227 F.3d 78,
91-92 (3d Cir. 2000) (“[A] party is not entitled to maintain an
implied duty of good faith claim where the allegations of bad
faith are identical to a claim for relief under an established
cause of action.” (internal quotation marks omitted)).
Plaintiff agrees that Pennsylvania does not recognize
an independent claim for breach of the implied covenant of good
18

faith and fair dealing. Rather, Plaintiff argues Defendant
breached “express warranties” in the Mortgage. Pl.’s Resp. 25. A
claim for breach of “express warranties” is a claim for breach
of contract. The Court may consider the implied duty of good
faith in interpreting the terms of the Note and Mortgage. See
Northview Motors, 227 F.3d at 91 (“Courts have utilized the good
faith duty as an interpretive tool to determine the parties’
justifiable expectations in the context of a breach of contract
action, but that duty is not divorced from the specific clauses
of the contract and cannot be used to override an express
contractual term.”). Therefore, the Court will grant the Motion
with respect to Count VI.

G.

Demand for Lost Profits
Plaintiff demands lost profits relating to Tom Oates

Automotive Center caused by allegedly inaccurate credit reports.
Plaintiff alleges he is owner and sole proprietor of Tom Oates
Automotive Center. Compl. ¶ 23. Defendant attached a certificate
of incorporation for an entity named, “Tom Oates Chevrolet,
Inc.,” and documents indicating Tom Oates Chevrolet, Inc., owns
the fictitious name, “Tom Oates Automotive.” See Mot. to Dismiss
Ex. D. Defendant argues that the corporate entity suffered the
harm alleged, not Plaintiff, and, therefore, Plaintiff lacks
standing to demand damages for lost profits. See Sierra Club v.
19

Morton, 405 U.S. 727, 734-35 (1972) (holding Article III
requires that plaintiff personally suffered injury); Official
Comm. of Unsecured Creditors v. R.F. Lafferty & Co., 267 F.3d
340, 348 (3d Cir. 2001) (distinguishing injury to corporate body
from injury to shareholder under Pennsylvania law).
Plaintiff admits that he is not the sole proprietor of
“Tom Oates Automotive,” but is, in fact, the president and sole
shareholder of Tom Oates Chevrolet, Inc. Pl.’s Resp. 27
Accordingly, Plaintiff requests leave to amend the Complaint to
drop the demand for lost profits and, instead, add a demand for
lost wages and bonuses. Id. Therefore, the Court will grant
Defendant’s Motion with respect to Plaintiff’s demand for lost
profits with leave to amend the Complaint with respect to this
demand within seven days of entry of this Memorandum and
accompanying Order.

V.

CONCLUSION
For the foregoing reasons, the Court will grant in

part and deny in part the Motion to Dismiss. The Court will
grant the Motion with respect to Counts II (FDCPA), IV
(negligence), and VI (warranty of good faith), and to the extent
Plaintiff’s common law claims are based on alleged violations of
the FDPA. The Court will dismiss those counts. Furthermore, the
Court will grant the Motion with respect to Plaintiff’s demand
20

for lost profits and will dismiss Plaintiff’s demand with leave
to amend the Complaint within seven days of entry of this
Memorandum and accompanying Order. The Court will deny the
Motion with respect to Counts I (FCRA), III (libel), and V
(breach of contract). An appropriate order will follow.

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