Ganter v. Independent Bank

Filing 63

MEMORANDUM OPINION AND ORDER OF UNITED STATES MAGISTRATE JUDGE - GRANTING IN PART AND DENYING IN PART 33 MOTION for Judgment on the Pleadings filed by Independent Bank. Signed by Magistrate Judge Don D. Bush on 11/14/2014. (baf, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
CHRISTOPHER GANTER
Plaintiff

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vs.
INDEPENDENT BANK
Defendant.

Case No. 4:13cv510

MEMORANDUM OPINION AND ORDER OF
UNITED STATES MAGISTRATE JUDGE
Now before the Court is Defendant’s Motion for Partial Judgment on the Pleadings (Dkt. 33).
As set forth below, it is GRANTED in part and DENIED in part.
Plaintiff Christopher Ganter and Defendant entered into a Global Compromise Settlement
Agreement and Mutual General Release (the “Settlement Agreement”) on November 12, 2012,
which provided that Defendant would release its lien upon 1828 Wonderlight Lane, Dallas, Texas
(the “Property”) and execute all documents necessary to facilitate the release of said lien. When
Plaintiff sold the Property on or about June 7, 2013, Defendant withheld $21,104.71 for a property
tax lien. Plaintiff argues that such actions were a breach of the Settlement Agreement and violated
the Fair Credit Reporting Act.
Plaintiff Christopher Ganter asserts the following two claims: breach of contract and
violations of the Fair Credit Reporting Act, 15 U.S.C. §1681.1 Defendant asserts a counterclaim,
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The parties in this matter were realigned in this case after removal. See Dkt. 16. No
amended pleadings were filed after realignment. Therefore, Plaintiff’s live claims are asserted in
Christopher Ganter’s Second Amended Answer and Counterclaim. See Dkt. 13. They are again
set forth in the parties’ Joint Conference Report, filed in accordance with Rule 26(f). See Dkt.
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arguing that Plaintiff wrongfully obtained an injunction in state court prior to removal.
Defendant’s Motion for Partial2 Judgment on the Pleadings (Dkt. 33) asks the Court to
dismiss Plaintiff’s Fair Credit Reporting Act and breach of contract claims. Plaintiff has filed a
response in opposition. Although Plaintiff’s response misconstrues the Court’s standard of review
in a motion for judgment on the pleadings, the Court addresses the parties arguments below.
STANDARD FOR MOTION FOR JUDGMENT ON THE PLEADINGS
Defendant brings its motion for judgment on the pleadings under Federal Rule of Civil
Procedure 12(c). The standard for deciding a Rule 12(c) motion for judgment on the pleadings is
the same as a Rule 12(b)(6) motion to dismiss. Guidry v. American Public Life Ins. Co., 512 F.3d
177, 180 (5th Cir. 2007). In examining a motion for judgment on the pleadings, therefore, the court
must accept as true all well-pleaded facts contained in the plaintiff’s complaint and view them in the
light most favorable to the plaintiff. Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996).
A claim will survive if it “may be supported by showing any set of facts consistent with the
allegations in the complaint.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 563, 127 S. Ct. 1955,
1969, 167 L. Ed.2d 929 (2007). In other words, a claim may not be dismissed based solely on a
court’s supposition that the pleader is unlikely “to find evidentiary support for his allegations or
prove his claim to the satisfaction of the factfinder.” Id. at 563 n.8.

14.
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Defendant’s motion seeks dismissal of all of Plaintiff’s claims; however, Defendant’s
motion does not address its counterclaim, making its motion only a motion for partial judgment.
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Although detailed factual allegations are not required, a plaintiff must provide the grounds
of his entitlement to relief beyond mere “labels and conclusions,” and “a formulaic recitation of the
elements of a cause of action will not do.” Id. at 555. The complaint must be factually suggestive,
so as to “raise a right to relief above the speculative level” and into the “realm of plausible liability.”
Id. at 555, 557 n.5. “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.’” Ashcroft v. Iqbal,
556 U.S. 662, 129 S. Ct. 1937, 1949, 173 L. Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570,
127 S. Ct. 1955). For a claim to have facial plausibility, a plaintiff must plead facts that allow the
court to draw the reasonable inference that the defendant is liable for the alleged misconduct.
Gonzalez v. Kay, 577 F.3d 600, 603 (5th Cir. 2009). Therefore, “where the well-pleaded facts do
not permit the court to infer more than the mere possibility of misconduct, the complaint has
alleged – but it has not shown – that the pleader is entitled to relief.” Id. (internal quotations
omitted).
ANALYSIS
Plaintiff’s pleadings allege that Defendant violated the Fair Credit Reporting Act by
submitting information about him that it knew to be untrue and inaccurate and by submitting
negative information without providing him notice in writing. Dkt. 13 at ¶¶30, 31; Dkt. 14 at p. 3.
Defendant argues that Plaintiff’s complaint does not contain sufficient factual matter, even if
accepted as true, to state a claim under the Fair Credit Reporting Act. The Court agrees.
Section 1681n, the section of the Fair Credit Reporting Act relied upon by Plaintiff in his
pleadings, sets forth the civil liability and damages available for willful noncompliance with the Fair

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Credit Reporting Act’s requirements. See 15 U.S.C. § 1681n. The subsection does not establish the
reporting requirements placed on creditors. Therefore, no claim can be stated against Defendant
under that section.
As noted by Defendant in its motion, however, Subsection 1681s-2 of the Act sets forth the
responsibilities of furnishers of information to consumer reporting agencies. Although Plaintiff’s
allegations could fall within this subsection, Plaintiff’s pleadings fail to cite to it. Plaintiff has
further not sought leave to amend his pleadings after such deficiency was identified by Defendant.
The Court notes that this alone may be grounds for dismissal of the claim. Nonetheless, although
the provision is not cited, the Court will address whether Plaintiff has stated facts that would state
a claim under Subsection 1681s-2.
As to Plaintiff’s claim that Defendant “submitted information about Mr. Ganter that it knew
to be untrue and inaccurate,” Dkt. 13 at ¶30, Section 1681s-2(a) provides that “[a] person shall not
furnish any information relating to a consumer to any consumer reporting agency if the person knows
or has reasonable cause to believe that the information is inaccurate.” 15 U.S.C. §1681-s2(a)(1)(A).
As to Plaintiff’s claim that Defendant “submitted the negative information without providing Mr.
Ganter notice in writing,” Dkt. 13 at ¶31, Section 1681s-2(a)(7) provides that if a financial institution
furnishes negative information to a consumer reporting agency “the financial institution shall provide
a notice of such furnishing of negative information, in writing, to the customer.” 15 U.S.C. §1681s2(a)(7).
Thus, if properly pleaded at all, Plaintiff’s claims under the Fair Credit Reporting Act, arise
under Section 1681s-2(a). Defendant argues that, according to Subsection 1681s-2(c), Section

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1681n’s provisions regarding civil liability and damages available for willful noncompliance with
the Fair Credit Reporting Act do not apply to any violations of Section 1681s-2(a); instead any such
violations, according to Subsection 1681s-2(d), shall be enforced by Federal agencies and state
officials. The Court agrees. See 15 U.S.C. §§ 1681s-2(c), (d). Young v. Equifax Credit Information
Services, Inc., 294 F.3d 631, 639 (5th Cir. 2002) (Section 1681s–2(c) provides exception to civil
liability when allegation is failure to comply with Section 1681s–2(a) and Section 1681s–2(d)
provides that enforcement of Section 1681s–2(a) shall be by government officials). It has already
been held in this District that “[a] violation of any of the duties described in section 1681s–2(a) does
not give rise to a private right of action.” Ray v. Wells Fargo Bank, N.A., 2012 WL 602212, 3 (E.D.
Tex. 2012) (Report and Recommendation of United States Magistrate Judge adopted by the District
Judge, 2012 WL 602208). Therefore, Plaintiff’s allegations do not give rise to a private right of
action and Plaintiff cannot state a claim under 15 U.S.C. §1681s-2(a).
As to any private right of action Plaintiff may have under the Fair Credit Reporting Act, the
Court also agrees with Defendant that no facts are alleged in Plaintiff’s live pleadings that would
state that he provided any notice of dispute of the negative information such that the duties of
furnishers of information set forth in Section 1681s-2(b) would be implicated. See generally Young,
294 F.3d at 640 (receipt of notice of a dispute from a consumer reporting agency is required to
trigger furnisher’s duties under Section 1681s–2(b)).
Defendant’s motion for judgment on the pleadings is GRANTED as to Plaintiff’s claims
under the Fair Credit Reporting Act, and those claims are dismissed.

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Next, the Court turns to Plaintiff’s breach of contract claim. In order to establish a breach
of contract claim, Plaintiff must plead facts showing: (1) the existence of a valid contract; (2)
performance or tender of performance by Plaintiff; (3) breach by Defendant; and (4) damages
resulting from the breach. Cadillac Bar West End Real Estate v. Landry’s Restaurants, Inc., 399
S.W.3d 703, 705 (Tex. App. – Dallas 2013, pet. denied) (citing Petras v. Criswell, 248 S.W.3d 471,
477 (Tex. App. – Dallas 2008, no pet.)).
Here, Plaintiff alleges that the parties entered into the Settlement Agreement; that he made
payments in accordance with the Loan Modification Agreement which flowed from the Settlement
Agreement; that Defendant breached the Settlement Agreement by: (i) charging off and reporting
on Plaintiff’s credit loans that were expressly forgiven and (ii) collecting approximately $21,000
from the sale of the Wonderlight property for a loan that the Bank forgave; and that Plaintiff has
suffered damages as a result. Dkt. 13 at ¶¶ 7-24. Defendant argues that Plaintiff’s pleadings do not
identify any provision of the settlement agreement which prohibits the Bank from charging off
Plaintiff’s loans or from reporting his loans as charged off to credit reporting agencies. Plaintiff
alleges that Paragraph 5.06 of the Settlement Agreement provided that Defendant would “release its
lien on 1828 Wonderlight (Loan #1828) (“Wonderlight Property”), [Independent Bank] will forgive
all of Mr. Ganter’s outstanding guarantees and loan obligations that are not expressly extended under
this Agreement.” Dkt. 13 at ¶8.
The Court finds that Plaintiff has pleaded enough facts to “raise a right to relief above the
speculative level” and into the “realm of plausible liability” as to a breach of the Settlement
Agreement. Twombly, 550 U.S. at 555, 557 n.5. Defendant’s challenges to the breach of contract

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action are best reserved for summary judgment or trial. The motion for judgment on the pleadings
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is DENIED as to Plaintiff’s breach of contract claim and any accompanying request for attorney’s
fees.
SO ORDERED.
SIGNED this 14th day of November, 2014.
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____________________________________
DON D. BUSH
UNITED STATES MAGISTRATE JUDGE

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