Tieffert v. Equifax Information Services, LLC. et al
Filing
46
MEMORANDUM OPINION. Signed by District Judge Henry E. Hudson on 12/19/2014. (sbea, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division
MICHELE L. TIEFFERT,
Plaintiff,
Civil Action No. 3:14CV609-HEH
EQUIFAX INFORMATION
SERVICES, LLC, et ai,
Defendants.
MEMORANDUM OPINION
Michele L. Tieffert ("Plaintiff) brought claims under the Fair Credit Reporting
Act, 15 U.S.C. § 1681, etseq., and the Real Estate Settlement Procedures Act, 12 U.S.C. §
2601, et seq., alleging five causes of action against three credit reporting agencies and two
causes of action against two loan servicers. The matter is presently before the Court on a
motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), filed by Defendant
Nationstar Mortgage LLC ("Nationstar"). For the reasons set forth herein, Nationstar's
Motion to Dismiss Plaintiffs Complaint will be granted in part and denied in part.
I.
BACKGROUND
This case arises from a mortgage loan obtained by Plaintiff in 2007 to which
Nationstar thereafter acquired the servicing rights. (Compl. ffif 9-10, ECF No. 1.)
Plaintiff applied for a modification from Nationstar under the Department of Treasury's
Home Affordable Modification Program ("HAMP"), and was approved in November
2012. (Id. at ffll 11, 13.) Plaintiff was placed in a temporary trial period plan during
which time she was to make four consecutive modified payments. (Id. at \ 13.) She was
informed by Nationstar that if she made the payments pursuant to the trial plan, she would
be approved for a final HAMP modification. (Id. at \ 14.) Plaintiff successfully made
the modified payments in the amount Nationstar directed her to pay. (Id. at fflj 15-16.)
Three of the modified payments were made to Nationstar. (Id. at H 16.) On the date the
fourth payment was due, Nationstartransferred the servicing rights of Plaintiffs loan to
SunTrust Mortgage, Inc. ("SunTrust"). (Id. at \ 17.)
Pursuant to her agreement with Nationstar, Plaintiff continued making her modified
payments, including the fourth trial plan payment. (Id. at f 20.) Plaintiff informed
SunTrust of the loan modification agreement with Nationstar. (Id. at *j 21.)
Nevertheless, SunTrust considered Plaintiffs account in default, claiming that she owed
back payments and fees of several thousand dollars, and reported her account as such on
Plaintiffs credit reports. (Id. at ffil 19, 22.) In response, Plaintiff submitted a Qualified
Written Request to Nationstar and SunTrust, disputing the payments considered
delinquent. (Id. at ^ 23.) Plaintiff requested that her account be corrected to delete any
late fees or other expenses, and that Nationstar and SunTrust provide her with certain loan
history documents. (Id. at ^ 24.) Plaintiff also notified the credit reporting agencies by
sending written disputes with supporting documentation that her Nationstar and SunTrust
accounts were—according to Plaintiff—inaccurately reporting as delinquent, as she had
made all of her payments on time in the amount reflected in her loan modification
agreement. (Id. at ^ 26.) In accordance with their standard investigation procedures, the
credit reporting agencies transmitted Plaintiffs disputes to Nationstar and SunTrust. (Id.
at Tf 27.) Both Nationstar and SunTrust verified Plaintiffs accounts as reporting correctly.
(Id. at H29.) This suit followed.
As pertinent here, Count Six of Plaintiffs Complaint alleges that Nationstar
violated section 1681s-2(b) of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §
1681s-2(b), by publishing inaccurate information within Plaintiffs credit file, failing to
fully and properly investigate Plaintiffs disputes, failing to review all relevant information
regarding the same, and failing to correctly report the results of an accurate investigation.
(Compl. U67.) Plaintiff also alleges, in Count Seven of her Complaint, that Nationstar
violated section 2605(e) of the Real Estate Settlement Procedures Act ("RESPA").
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U.S.C. § 2605(e). Specifically, Plaintiff claims that Nationstar violated subsection (2) of
section 2605(e) by failing to (1) make appropriate corrections to Plaintiffs account and
notify her in writing of the corrections; (2) investigate Plaintiffs account and provide her
with a written clarification as to why it believed Plaintiffs account to be correct; and (3)
investigate Plaintiffs account and provide the requested information or provide an
explanation as to why the requested information was unavailable. (Compl. ^ 72.)
Plaintiff also claims that Nationstar violated subsection (3) of section 2605(e) by providing
delinquent information to credit reporting agencies during the sixty-day period following
Nationstar's receipt of Plaintiffs Qualified Written Request. (Id. at U73.) As a result of
Nationstar's conduct, Plaintiff alleges she suffered actual damages. (Id. at ffl| 67, 74.)
Nationstar filed a Motion to Dismiss Plaintiffs Complaint on October 29, 2014
(ECF No. 22). Plaintiff filed a Memorandum in Opposition (ECF No. 31), Nationstar
replied (ECF No. 33), and the parties have waived oral argument (ECF Nos. 34, 35).
Thus, the motion is ripe for disposition.
II.
LEGAL STANDARD
"A motion to dismiss under Rule 12(b)(6) tests the sufficiency of a complaint;
importantly, it does not resolve contests surrounding the facts, the merits of a claim, or the
applicability of defenses." Republican PartyofN.C. v. Martin, 980 F.2d 943, 952 (4th
Cir. 1992) (citation omitted). To survive Rule 12(b)(6) scrutiny, a complaint only need
contain "enough facts to state a claim to relief that is plausible on its face." BellAtl. Corp.
v. Twombly, 550 U.S. 544, 570 (2007); see also Fed. R. Civ. P. 8(a)(2) ("A pleading that
states a claim for relief must contain ... a short and plain statement of the claim showing
that the pleader is entitled to relief"). Mere labels and conclusions declaring that the
plaintiff is entitled to relief are not enough. Twombly, 550 U.S. at 555. Thus, "naked
assertions of wrongdoing necessitate some factual enhancement within the complaint to
cross the line between possibility and plausibility of entitlement to relief." Francis v.
Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009) (internal quotation marks omitted).
A complaint achieves facial plausibility when the facts contained therein support a
reasonable inference that the defendant is liable for the misconduct alleged.
Twombly,
550 U.S. at 556; see also Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). This analysis is
context-specific and requires "the reviewing court to draw on its judicial experience and
common sense." Francis, 588 F.3d at 193. The court must assume all well-pleaded
factual allegations to be true and determine whether, when viewed in the light most
favorable to the plaintiff, they "plausibly give rise to an entitlement to relief." Iqbal, 129
S. Ct. at 1950; see also Mylan Labs, Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993).
Generally, the district court does not consider extrinsic materials when evaluating a
complaint under Rule 12(b)(6). The court may, however, consider "documents
incorporated into the complaint by reference," Tellabs, Inc. v. Makor Issues & Rights, Ltd.,
551 U.S. 308, 322 (2007), as well as documents attached to a motion to dismiss, so long as
they are integral to or explicitly relied upon in the complaint, and the authenticity of such
documents is not disputed. Philips v. Pitt CntyMem. Hosp., 572 F.3d 176, 180 (4th Cir.
2009); Phillips v. LCIInfl, Inc. 190 F.3d 609, 618 (4th Cir. 1999).
HI.
DISCUSSION
At the outset, the Court notes that it will exclude from consideration the exhibits
attached to the parties' briefs submitted in support oftheir respective positions. In support
of its Motion to Dismiss, Nationstar attached the terms of the trial period plan agreed to by
the parties. (Def.'s Mem. Support, Ex. A., ECF No. 23-1.) While Plaintiff does not
dispute the authenticity of Nationstar's exhibit, she contends that the terms of the plan
present an incomplete picture when reviewed in isolation. (PL's Mem. Opp'n at 4-5, ECF
No. 31.) Plaintiff appended to her brief two exhibits which she contends are necessary to
comprehend the trial period plan: (1) Fannie Mae HAMP Servicing Guide Announcement,
and (2) the Consumer Data Industry Association's Mortgage & Home Equity Reporting
Guidelines. (PL's Mem. Opp'n, Ex. 1-2, ECF Nos. 31-1,31-2) Consideration of these
three documents would require the Court to engage in fact-finding that is improper and
unnecessary to resolve a motion under Rule 12(b)(6). The Court will not convert
Nationstar's Motion to Dismiss into a motion for summary judgment, and declines to
consider the exhibits submitted by the parties.
A.
Fair Credit Reporting Act
The FCRA places various requirements on consumer credit reporting agencies,
furnishers of credit information to consumer credit reporting agencies, and users of
consumer credit reports with the goals of ensuring fair and accurate credit reporting,
promoting efficiency in the bankingsystem, and protecting consumerprivacy. Saunders
v. Branch Banking & Trust Co. o/Va., 526 F.3d 142, 147 (4th Cir. 2008) (quoting Safeco
Ins. Co. ofAm. v. Burr, 551 U.S. 47, 52 (2007)). Pursuant to section 1681s-2(b) of the
FCRA, a furnisher, as a supplier ofinformation to credit reporting agencies,1 may be held
liable for failing to conduct a reasonable investigation into a consumer's claim after
receiving notice from a credit reporting agency that the consumer has disputed the
accuracy of the information reported by the furnisher. 15 U.S.C. § 168ls-2(b); see also
Johnson v. MBNA America Bank, N.A., 357 F.3d 426,431 (4th Cir. 2004). A furnisher,
however, cannot be liable under section 1681s-2, unless it has received notice from a credit
reporting agency that a consumer disputes the information reported. After receiving such
notice, the FCRA requires furnishers "to conduct a reasonable investigation of their
records to determine whether the disputed information can be verified." Johnson, 357
F.3d at 431. The furnisher must report the results of the investigation to the credit
reporting agency. 15 U.S.C. § 1681s-2(b)(l)(C). If the investigation reveals that the
disputed information is inaccurate, incomplete, or cannot be verified, the furnisher must
report its findings to all other credit reporting agencies to which it distributed the
1 The FCRA defines a furnisher as one who "regularly and in the ordinary course of
business furnishes information to one or more credit reporting agencies about the person's
transactions or experiences with any consumer." 15 U.S.C. § 1681s-2(a)(2).
information, as well as modify, delete, or permanently block the reporting of that item of
information.
15 U.S.C. § 1681s-2(b)(l)(D)-(E).
To properly plead a claim under section 1681s-2 of the FCRA, a plaintiff must
allege that (1) she notified the credit reporting agency of the disputed information; (2) the
credit reporting agency notified the furnisher of the consumer's dispute; and (3) the
furnisher failed to reasonably investigate the disputed information and take appropriate
action based on its findings. Johnson, 357 F.3d at 431; Taylor v. First Premier Bank, 841
F. Supp. 2d 931, 933 (E.D. Va. Jan. 11,2012). Plaintiffs Complaint satisfies the first and
second elements. Plaintiff alleges that she filed written disputes regarding her allegedly
delinquent mortgage with the credit reporting agencies, and that those agencies notified
Nationstar of her claim.2
With respect to the third element, Plaintiff further alleges that in response to her
disputes, Nationstar verified that Plaintiffs account was reporting correctly. Plaintiff
disagrees with Nationstar's conclusion, and contends that if Nationstar had conducted a
reasonable investigation of her dispute, the inaccuracies in the information Nationstar
provided to the credit reporting agencies about Plaintiffs mortgage loan would have been
discovered. According to Nationstar, dismissal of Plaintiffs FCRA claim is appropriate
because the information it reported to the credit reporting agencies regarding Plaintiffs
mortgage loan was accurate.
Although the accuracy ofthe reported information may weigh in favor ofNationstar
2 The parties do not dispute that Nationstar qualifies as a furnisher under the FCRA. See
15 U.S.C. § 1681s-2(a)(2).
having conducted a reasonable investigation, accuracy is not dispositive of Plaintiff s
FCRA claim.3 The focus of a claim brought under section 1681s-2(b) is whether the
furnisher—here, Nationstar—conducted a reasonable investigation and took appropriate
action based on the results. "[Wjhether a defendant's investigation is reasonable is
usually a factual question reserved for trial." Aviles v. EquifaxInform. Servs., 521 F.
Supp.2d 519, 523 (E.D. Va. 2007). At this stage, Plaintiff has pled facts sufficient to
allege a plausible violation of section 1681s-2(b) of the FCRA by Nationstar.
B.
Real Estate Settlement Procedures Act
Plaintiffs second claim against Nationstar arises from section 2605(e) of the
RESPA, which establishes the duty of loan servicers to respond to borrower inquiries. See
12 U.S.C. § 2605(e). Specifically, these duties are triggered when the servicer "receives a
qualified written request from the borrower." 12 U.S.C. § 2605(e)(1)(A). The RESPA
defines a Qualified Written Request ("QWR") as:
a written correspondence, other than notice on a payment coupon
or other payment medium supplied by the servicer, that... (i)
includes, or otherwise enables the servicer to identify, the name
and account of the borrower; and (ii) includes a statement of the
reasons for the belief of the borrower, to the extent applicable,
that the account is in error or provides sufficient detail to the
servicer regarding other information sought by the borrower.
12 U.S.C. § 2605(e)(1)(B).
After receipt of a QWR, the servicer is required to conduct an investigation into the
changes requested by the borrower, make appropriate corrections to the borrower's
3 The Court takes no position as to the accuracy of the information Nationstar reported to
the credit reporting agencies regarding Plaintiffs mortgage loan. Any finding as to
accuracy would be premature, as discovery is necessary to develop a more fulsome record.
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account, and provide a written explanation or clarification as to the results of the
investigation, which must include the name and telephone number of a representative who
can answer any questions about the account. 12 U.S.C. § 2605(e)(2); see also Fedewa v.
J.P. Morgan Chase Bank, 921 F. Supp. 2d 504, 510 (E.D. Va. 2013). During the sixty-day
period following the servicer's receipt of a QWR, the servicer may not provide to a credit
reporting agency any information relating to that disputed in the QWR.
12 U.S.C. §
2605(e)(3). In addition to showing that the borrower's request meets the definition of a
QWR and that the servicer failed to perform its duties, the plaintiff must show actual
damages and "any additional damages, as the court may allow, in the case of a pattern or
practice of noncompliance with the requirements of [section 2605]." 12 U.S.C. §
2605(f)(1).
To survive Rule 12(b)(6) scrutiny, a plaintiff must allege facts to support that: (1)
the defendant is a loan servicer, (2) the plaintiff sent the defendant a valid QWR, (3) the
defendant failed to adequately respond within the statutory period, and (4) the plaintiff is
entitled to actual or statutory damages. See Bowman v. Vantium Capital, Inc., 2014 U.S.
Dist. LEXIS 3558, at *9-10 (W.D. Va. Jan. 13, 2014). Nationstar argues, inter alia, that
Plaintiffs RESPA claim should be dismissed because she did not plead sufficient facts to
plausibly allege that her correspondence to Nationstar constitutes a valid QWR, triggering
a duty to respond under the RESPA. The Court is inclined to agree.
Although Plaintiff alleges that she submitted a QWR to Nationstar, the Complaint
contains only vague details as to the substantive content of the request. See Fedewa, 921
F. Supp. 2d at 510. Plaintiff alleges only that her correspondence disputed the payments
Nationstar considered delinquent, requested that her account be corrected, and sought
copies of loan history documents. Lacking particular details as to the substance of the
alleged QWR, Plaintiffs allegations are insufficient to indicate whether the form of her
request comported with the requirements of the RESPA. Id.
Plaintiffs Complaint also does not specify when the purported QWR was sent.
Nor does it specify when or if Nationstar received her correspondence. Id.; Caballero v.
Am. Mortg. Network, 2011 U.S. Dist. LEXIS 87210, at *19 (E.D. Va. Aug. 8, 2011).
When Plaintiff sent the QWR and whether Nationstar received the QWR relate to
Nationstar's obligation to respond under RESPA, but not in the manner Nationstar
suggests. Nationstar argues that once it ceased servicing Plaintiffs loan, it was no longer
under any obligation to respond to Plaintiffs QWR. As Plaintiffpoints out, so long as the
QWR is received within one year after Nationstar ceased servicing the loan, it is obligated
to respond. See 12C.F.R. §§ \02435-1024.36; see also Bowman, 2014 U.S. Dist. LEXIS
3558, at *10-11 n.5. Moreover, Nationstar's receipt of the QWR triggers its duty to
respond, and such response must be made within the statutorily prescribed timeframe. 12
U.S.C. § 2605(e)(1)(A).
Plaintiff urges that her failure to include the date on which the QWR was submitted
is not fatal to her claim because when the purported QWR was sent can be inferred from
the allegations in her Complaint. (PL's Mem. Opp'n at 12-13.) In support of her
position, Plaintiff cites this Court's decision in Bourdelais v. JPMorgan Chase Bank, N.A.,
2012 U.S. Dist. LEXIS 158508 (E.D. Va. Nov. 5, 2012). In that case, however, the
complaint more particularly alleged the timeframe within which the plaintiffs QWR was
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sent to the servicer—within two years prior to filing suit. Bourdelais, 2012 U.S. Dist.
LEXIS 158508, at *26. Plaintiffs Complaint does not. Furthermore, the facts alleged in
Bourdelais as to the plaintiffs QWR were more numerous and specific, allowing the Court
to find that the plaintiff plausibly alleged the submission of a valid QWR. Id. at *26-27;
see also Salehi v. Wells Fargo Bank, N.A., 2012 U.S. Dist. LEXIS 80738, at *17-18 (E.D.
Va. June 11, 2012) (finding alleged QWR sufficient to survive motion to dismiss "because
it is a written correspondence that includes information that allows the servicer... to
identify the name and account of Plaintiff and it also details Plaintiffs belief that the
account is in error").
Additionally, as far as this Court can tell, Bourdelais is the only case in this district
in which a court found that the plaintiff adequately pled the submission of a valid QWR
without the purported QWR having been incorporated by reference into the pleadings.
See, e.g., Bowman, 2014 U.S. Dist. LEXIS 3558, at *9-10 (finding plaintiff complied with
QWR requirements upon review of exhibit attached to complaint); Salehi, 2012 U.S. Dist.
LEXIS 80738, at *17-18 (holding letter attached as exhibit to complaint constituted a
QWR sufficient to survive motion to dismiss); cf Luther v. Wells Fargo Bank, 2012 U.S.
Dist. LEXIS 142538 (W.D. Va. Aug. 6, 2012) (holding plaintiffs self-identified QWRs
attached to complaint do not satisfy statutory definition of QWR). To be clear, this Court
does not hold as a general proposition that incorporation of the QWR is required to
adequately plead the submission of a valid QWR. Nevertheless, Plaintiffs bare allegation
that she submitted a QWR, given the sparse details of its contents and failure to attach the
correspondence to her Complaint, is too conclusory, and therefore, insufficient to plead the
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existence of a valid QWR.
IV.
CONCLUSION
For the foregoing reasons, Nationstar's Motion to Dismiss Plaintiffs Complaint
will be denied with respect to Count Six of Plaintiff s Complaint, and granted with respect
to Count Seven. An appropriate Order will accompany this Memorandum Opinion.
Afc*
/s/
Henry E. Hudson
United States District Judge
Date:Xi**-*IfL£0Zy_
Richmond, Virginia
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