Thomas et al v. Nationstar Mortgage, LLC et al
Filing
18
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANTS' 6 MOTION TO DISMISS AS TO THE FDCPA, HMDA, AND FCRA CLAIMS AND GRANTING WITH LEAVE TO AMEND DEFENDANTS' MOTION TO DISMISS AS TO THE ECOA AND FHA CLAIMS. The plaintiffs are DIRECTED to file any amended complaint, as to the ECOA and FCA claims only, within twenty-one (21) days from the date of the entry of this order. Signed by Senior Judge Frederick P. Stamp, Jr. on 2/20/18. (lmm)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
ANTHONY R. THOMAS and
ERICA D. THOMAS,
Plaintiffs,
v.
Civil Action No. 5:17CV120
(STAMP)
NATIONSTAR MORTGAGE, LLC,
FORTRESS INVESTMENT GROUP,
and JOHN DOE,
Defendants.
MEMORANDUM OPINION AND ORDER
GRANTING DEFENDANTS’ MOTION TO DISMISS AS
TO THE FDCPA, HMDA, AND FCRA CLAIMS
AND GRANTING WITH LEAVE TO AMEND DEFENDANTS’
MOTION TO DISMISS AS TO THE ECOA AND FHA CLAIMS
I.
Background
Defendants Fortress Investment Group and Nationstar Mortgage,
LLC (“Nationstar”) removed this civil action to this Court from the
Circuit Court of Wetzel County, West Virginia.
The plaintiffs,
Anthony R. Thomas and Erica D. Thomas, commenced the civil action
in state court seeking to recover damages arising out of the
defendants’
alleged
violations
of
the
Fair
Debt
Collections
Practice Act (the “FDCPA”), the Home Mortgage Disclosures Act (the
“HMDA”), the Equal Credit Opportunity Act (the “ECOA”), and the
Fair Housing Act (the “FHA”).
The plaintiffs also seem to allege
a violation of the Fair Credit Reporting Act (the “FCRA”).
The
complaint names a third defendant, John Doe, to include “any parent
corporations and/or subsidiaries of the Defendant of which the
Plaintiffs are unaware.”
The facts alleged in the complaint can be summarized as
follows: The plaintiffs sold their home, at which time they owed
$53,281.25 to defendant Nationstar pursuant to a promissory note by
which they borrowed funds to purchase the home.
After the sale,
the plaintiffs paid the amount owed to Nationstar in the form of a
check drawn on a trust account.
Nationstar would not accept the
check, indicating that it required a certified check, cashier’s
check, or money order.
The defendants would not return the check
drawn on the trust account to the plaintiffs in exchange for an
acceptable form of payment.
As a result, the defendants have
reported to major credit bureaus that the plaintiffs are in default
of their loan obligation.
The defendants have filed a motion to dismiss.
In the motion
to dismiss, the defendants argue (1) that the plaintiffs’ complaint
fails to meet the pleading standard of Federal Rule of Civil
Procedure 8 and (2) that, even if the plaintiffs’ complaint was
sufficient under Rule 8, the individual counts as stated fail as a
matter of law.
The defendants’ motion to dismiss is now fully
briefed and ripe for decision.
For the following reasons, the
motion to dismiss is granted as to the FDCPA, HMDA, and FCRA claims
and granted with leave to amend as to the ECOA and FHA claims.
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II.
Applicable Law
In assessing a motion to dismiss for failure to state a claim
under Rule 12(b)(6), a court must accept all well-pled facts
contained in the complaint as true.
Nemet Chevrolet, Ltd v.
Consumeraffairs.com, Inc, 591 F.3d 250, 255 (4th Cir. 2009).
However, “legal conclusions, elements of a cause of action, and
bare assertions devoid of further factual enhancement fail to
constitute well-pled facts for Rule 12(b)(6) purposes.”
Id.
(citing Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009)).
This
Court
also
declines
to
consider
“unwarranted
unreasonable conclusions, or arguments.”
inferences,
Wahi v. Charleston Area
Med. Ctr., Inc., 562 F.3d 599, 615 n.26 (4th Cir. 2009).
The purpose of a motion under Rule 12(b)(6) is to test the
formal sufficiency of the statement of the claim for relief; it is
not a procedure for resolving a contest about the facts or the
merits of the case.
5B Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure § 1356 (3d ed. 1998).
The Rule
12(b)(6) motion also must be distinguished from a motion for
summary judgment under Federal Rule of Civil Procedure 56, which
goes to the merits of the claim and is designed to test whether
there is a genuine issue of material fact.
Id.
For purposes of
the motion to dismiss, the complaint is construed in the light most
favorable to the party making the claim and essentially the court’s
inquiry
is
directed
to
whether
3
the
allegations
constitute
a
statement of a claim under Federal Rule of Civil Procedure 8(a).
Id. § 1357.
A complaint should be dismissed “if it does not allege ‘enough
facts to state a claim to relief that is plausible on is face.’”
Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
“Facial
plausibility is established once the factual content of a complaint
‘allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.’” Nemet Chevrolet,
591 F.3d at 256 (quoting Iqbal, 129 S. Ct. at 1949).
Detailed
factual allegations are not required, but the facts alleged must be
sufficient “to raise a right to relief above the speculative
level.”
Twombly, 550 U.S. at 555.
III.
A.
Discussion
The FDCPA
The defendants argue that the plaintiffs’ claims under the
FDCPA
fail
because
the
claims
are
barred
by
the
statute
of
limitations. Even if not barred by the statute of limitations, the
defendants contend that the FDCPA claims are insufficient as a
matter of law because the plaintiffs do not allege that either
defendant is a “debt collector as defined by the FDCPA” or that
either defendant “engaged in an act or omission prohibited by the
FDCPA.”
ECF No. 7 at 7.
The plaintiffs respond that the FDCPA
4
claims are not barred by the statute of limitations because the
alleged violations are still ongoing.
To state a claim under the FDCPA, 15 U.S.C. §§ 1692-1692p, “a
plaintiff must show: (1) the plaintiff has been the object of
collection activity arising from consumer debt, (2) the defendant
is a debt collector as defined by the FDCPA, and (3) the defendant
has engaged in an act or omission prohibited by the FDCPA.”
Patrick v. Teays Valley Trs., LLC, No. 3:12-CV-39, 2012 WL 5993163,
at *10 (N.D. W. Va. Nov. 30, 2012) (citing Wilson v. Draper &
Goldberg, P.L.L.C., 443 F.3d 373, 377-79 (4th Cir. 2006)).
More
importantly in the present case, “the statute of limitations
relating to violations of the FDCPA is one year.” Heinemann v. Jim
Walter Homes, Inc., 47 F. Supp. 2d 716, 722 (N.D. W. Va. 1998)
(citing 15 U.S.C. § 1692k(d)).
Here, the allegations in the plaintiffs’ complaint reference
events that occurred on September 24, 2015.
Thus, the plaintiffs
had until September 24, 2016 to bring their FDCPA claims. However,
the
plaintiffs
did
not
file
this
suit
until
June
29,
2017.
Although the plaintiffs contend that the statute of limitations
does not bar their FDCPA claims because the alleged violations were
ongoing,
this
Court
finds
violations” argument fails.
that
the
plaintiff’s
“continuing
Additionally, this Court notes that
the plaintiffs did not allege in their complaint that the alleged
violations are ongoing.
Rather, the plaintiffs allege that the
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alleged violations are ongoing for the first time in their response
to the defendants’ motion to dismiss.
“Generally,
an
action
under
the
FDCPA
communication violating the FDCPA is sent.’
accrues
‘when
a
Lovegrove v. Ocwen
Loan Servicing, LLC, No. 7:14-CV-00329, 2015 WL 5042913, at *15
(W.D. Va. Aug. 26, 2015) (quoting Akalwadi v. Risk Mgmt. Alts.,
Inc., 336 F. Supp. 2d 492, 501 (D. Md. 2004)).
restart
the
communications
statute
is
of
limitations
consistent
with
the
for
“Declining to
related
statutory
subsequent
text,
Fourth
Circuit precedent, and even legislative history, which suggests
that the purpose of the FDCPA is to be effectuated ‘without
imposing unnecessary restrictions on ethical debt collectors.’”
Bey v. Shapiro Brown & Alt, LLP, 997 F. Supp. 2d 310, 317 (D. Md.
2014) (quoting S. Rep. No. 95-382, at 1-2 (1977)).
Accordingly, this Court is not persuaded by the plaintiffs’
ongoing violation argument and must grant the defendants’ motion to
dismiss as to the FDCPA claims.
B.
The HMDA
The defendants argue that the HMDA claim fails because the
plaintiffs are not an administrative agency and “the HMDA does not
create a private right of action.”
ECF No. 7 at 8.
The United
States District Court for the Southern District of New York has
addressed the defendants’ argument as follows:
The Home Mortgage Disclosure Act, 12 U.S.C. §§ 2801 et
seq., provides for the maintenance of records and public
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disclosure
by
depository
institutions,
including
materials relating to mortgage loans.
See 12 U.S.C.
§ 2803. The HMDA does not give individual plaintiffs a
private right of action.
See 12 C.F.R. § 203.6
(providing for administrative enforcement of HMDA);
Swartz v. City Mortgage Inc., 911 F. Supp. 2d 916, 935
(D. Haw. 2012) (“[T]he HMDA only provides for
administrative enforcement.”); Wellman v. First Franklin
Home Loan Servs., No. 09 Civ. 1257 JM (NLS), 2009 WL
2423961, at *2 (S.D. Cal. Aug. 4, 2009); Swanson v. Citi,
706 F. Supp. 2d 854, 862–63 (N.D. Ill. 2009), rev’d on
other grounds, 614 F.3d 400 (7th Cir. 2010).
[The
plaintiff] therefore cannot bring a claim for a violation
of HMDA. That claim is thus dismissed with prejudice.
Lee v. E*Trade Fin. Corp., No. 12 Civ. 6543(PAE), 2013 WL 4016220,
at *5 (S.D.N.Y. Aug. 6. 2013).
This Court agrees that the HMDA
does not provide a private cause of action.
Accordingly, this
Court finds that the defendants’ motion to dismiss must be granted
as to the HMDA claim.
C.
The ECOA
The defendants argue that the ECOA claims are insufficient as
a matter of law because the complaint “is void of allegations
related
to
credit
decisions,
purported
discrimination,
their
membership of a protected class, or any discriminatory factors.”
ECF No. 7 at 8.
The plaintiffs argue that their allegations put
the defendants on notice of the ECOA claims with sufficient clarity
to allow the defendants to frame their responsive pleading.
“[The] ECOA establishes that it is ‘unlawful for any creditor
to discriminate against any applicant . . . on the basis of race.’”
Wise v. Vilsack, 496 F. App’x 283, 285 (4th Cir. 2012) (citing 15
U.S.C. § 1691(a)(1)).
To establish a prima facie case under the
7
ECOA, the plaintiffs must set forth the following four elements:
(1) that they are members of a protected class; (2) that they
applied for and were qualified for an extension of credit; (3) that
their application for credit was rejected by the defendants despite
their qualifications; and (4) that the defendants continued to
extend credit to others of similar credit stature outside of the
protected class.
Id.
In the present case, the plaintiffs’ complaint does not set
forth any of the required elements for a prima facie case under the
ECOA. Accordingly, the defendants’ motion to dismiss is granted as
to the ECOA claims, but with leave for the plaintiffs to amend
their ECOA claims to set forth a prima facie case within twenty-one
days from the date of the entry of this order.
D.
The FHA
The defendants argue that the FHA claims fail as a matter of
law because the complaint is “void of allegations related to the
sale or rental of housing, purported discrimination, Plaintiffs’
alleged handicap or any other discriminatory factors.”
at 9.
ECF No. 7
Like with the ECOA claims, the plaintiffs argue that their
allegations put the defendants on notice of the FHA claims with
sufficient
clarity
to
allow
the
defendants
to
frame
their
responsive pleading.
“The FHA, enacted pursuant to United States policy to provide
for ‘fair housing throughout the United States,’ 42 U.S.C. § 3601,
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makes it unlawful, inter alia, to discriminate in the sale or
rental of housing or otherwise to make housing unavailable to a
buyer or renter because of that buyer’s or renter’s handicap or the
handicap of certain persons associated with the buyer or renter.”
Bryant Woods Inn, Inc. v. Howard Cty., Md., 124 F.3d 597, 602-03
(4th Cir. 1997) (citing 42 U.S.C. § 3604(f)).
“To prove a prima
facie case of discrimination under the FHA, the [plaintiffs must]
demonstrate that the housing action or practice being challenged
was
either
motivated
by
discriminatory impact.”
a
discriminatory
purpose
or
had
a
Greengael, LC v. Bd. of Supervisors of
Culpeper Cty., Va., 313 F. App’x 577, 581 (4th Cir. 2008) (citing
Betsey v. Turtle Creek Assocs., 736 F.2d 983, 986 (4th Cir. 1984)).
Like with the ECOA claims, the plaintiffs’ complaint does not
set forth the required elements for a prima facie case under the
FHA.
Specifically,
challenged
purpose
actions
or
had
a
the
were
plaintiffs
either
do
not
motivated
discriminatory
impact.
by
allege
a
that
the
discriminatory
Accordingly,
the
defendants’ motion to dismiss is granted as to the FHA claims, but
with leave for the plaintiffs to amend their FHA claims to set
forth a prima facie case within twenty-one days from the date of
the entry of this order.
E.
The FCRA
The defendants argue that, to the extent the plaintiffs
attempt to state a claim under the FCRA, the allegations fail as a
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matter of law because there is no private right of action for
furnishing inaccurate information to a credit reporting agency and
because the plaintiffs do not allege that they disputed the alleged
credit reporting to a consumer reporting agency.
The United States District Court for the Southern District of
West Virginia has described the FCRA as follows:
The FCRA imposes various obligations on three types of
entities: consumer reporting agencies (CRAs), users of
consumer credit reports, and entities that furnish debt
information to CRAs, or ‘furnishers.’” Evans [v. Trans
Union, LLC], [No. 2:10-CV-00945], 2011 WL 672061, at *3
[(S.D. W. Va. Feb. 14, 2011)] (citing 15 U.S.C.
§§ 1681–1681 x). Generally, the FCRA imposes two sets of
duties upon furnishers. See 15 U.S.C. § 1681s–2(a) and
(b). First, Section 1681 s–2(a) imposes a duty upon the
furnisher to provide accurate information.
15 U.S.C.
§ 1681s–2(a).
Second, upon receiving a dispute of
inaccuracy from a credit reporting agency, Section
1681s–2(b) imposes a duty upon the furnisher to conduct
a reasonable investigation, report the results of that
investigation to the credit reporting agency, and modify
or delete any inaccurate information. 15 U.S.C.
§ 1681s–2(a) and (b) . . . .
Smith v. Am. Exp., No. 1:13-3014, 2014 WL 4388259, at *6 (S.D. W.
Va. Sept. 4, 2014).
In the present case, any alleged violation of the FCRA would
presumably fall under the duty imposed by § 1681s-2(a).
Section
1681s-2(b) would not apply because the plaintiffs do not allege
that they disputed the credit reporting to a credit reporting
agency.
See id. (“Courts have consistently held that for the duty
imposed
by
§
1681s-2(b)
to
be
triggered,
the
furnisher
of
information must have received notice of the dispute from a
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consumer reporting agency, not from a consumer.” (quoting Peasley
v. Verizon Wireless (VAW) LLC, 364 F. Supp. 2d 1198, 1200 (S.D.
Cal.
2005))).
However,
any
alleged
violation
falling
under
§ 1681s-2(a) must also fail because “there is no private right of
action
under
Section
1681s-2(a)
for
information to a credit reporting agency.”
furnishing
inaccurate
Id. (citing Carney v.
Experian Info. Sols., Inc., 57 F. Supp. 2d 496, 502 (W.D. Tenn.
1999)).
Accordingly, this Court finds that the defendants’ motion to
dismiss must be granted as to the FCRA claim.
IV.
Conclusion
For the reasons set forth above, the defendants’ motion to
dismiss the complaint (ECF No. 6) is GRANTED as to the FDCPA, HMDA,
and FCRA claims and GRANTED WITH LEAVE TO AMEND as to the ECOA and
FHA claims.
The plaintiffs are DIRECTED to file any amended
complaint, as to the ECOA and FCA claims only, within twenty-one
(21) days from the date of the entry of this order
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein.
DATED:
February 20, 2018
/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE
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