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Brady v. Wells Fargo Bank

United States District Court, D. Nevada

August 25, 2014



WILLIAM G. COBB, Magistrate Judge.

Before the court are Plaintiffs' Application to Proceed in Forma Pauperis (Doc. # 1)[1] and pro se Complaint (Doc. # 1-1).


A person may be granted permission to proceed in forma pauperis if the person "submits an affidavit that includes a statement of all assets such [person] possesses [and] that the person is unable to pay such fees or give security therefor. Such affidavit shall state the nature of the action, defense or appeal and affiant's belief that the person is entitled to redress." 28 U.S.C. § 1915; Lopez v. Smith, 203 F.3d 1122, 1129 (9th Cir. 2000) (en banc) (stating that this provision applies to all actions filed in forma pauperis, not just prisoner actions).

In addition, the Local Rules of Practice for the District of Nevada provide: "Any person, who is unable to prepay the fees in a civil case, may apply to the Court for authority to proceed in forma pauperis. The application shall be made on the form provided by the Court and shall include a financial affidavit disclosing the applicant's income, assets, expenses, and liabilities." LSR 1-1.

"[T]he supporting affidavits [must] state the facts as to [the] affiant's poverty with some particularity, definiteness and certainty.'" U.S. v. McQuade, 647 F.2d 938, 940 (9th Cir. 1981) (quoting Jefferson v. United States, 277 F.2d 823, 725 (9th Cir. 1960)). A litigant need not "be absolutely destitute to enjoy the benefits of the statute." Adkins v. E.I. Du Pont De Nemours & Co., 335 U.S. 331, 339 (1948).

The court has reviewed Plaintiffs' application and it appears they are unable to pay the filing fee; therefore, their application to proceed in forma pauperis (Doc. # 1) is granted.


A. Standard

28 U.S.C. § 1915 provides: "the court shall dismiss the case at any time if the court determines that...the action or appeal (i) is frivolous or malicious; (ii) fails to state a claim upon which relief may be granted; or (iii) seeks monetary relief against a defendant who is immune from such relief. 28 U.S.C. § 1915(e)(2)(B)(i)-(iii). This provision applies to all actions filed in forma pauperis, whether or not the plaintiff is incarcerated. See Lopez v. Smith, 203 F.3d 1122, 1129 (9th Cir. 2000) (en banc); see also Calhoun v. Stahl, 254 F.3d 845 (9th Cir. 2001) (per curiam).

Dismissal of a complaint for failure to state a claim upon which relief may be granted is provided for in Federal Rule of Civil Procedure 12(b)(6), and this court applies the same standard under Section 1915(e)(2)(B) when reviewing the adequacy of the complaint or amended complaint. See Resnick v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000) (citation omitted). Review under 12(b)(6) is essentially a ruling on a question of law. See Chappel v. Lab. Corp. of America, 232 F.3d 719, 723 (9th Cir. 2000).

In reviewing the complaint under this standard, the court must accept as true the allegations of the complaint, Hosp. Bldg. Co. v. Trustees of Rex Hosp., 425 U.S. 738, 740 (1976), construe the pleadings in the light most favorable to plaintiff, and resolve all doubts in the plaintiff's favor, Jenkins v. McKeithen, 395 U.S. 411, 421 (1969). Allegations in pro se complaints are held to less stringent standards than formal pleadings drafted by lawyers, and must be liberally construed. See Hughes v. Rowe, 449 U.S. 5, 9 (1980); Haines v. Kerner, 404 U.S. 519, 520-21 (1972) ( per curiam ); Hamilton v. Brown, 630 F.3d 889, 893 (9th Cir. 2011).

A complaint must contain more than a "formulaic recitation of the elements of a cause of action, " it must contain factual allegations sufficient to "raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). "The pleading must contain something more...than...a statement of facts that merely creates a suspicion [of] a legally cognizable right of action." Id. (quoting 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, at 235-36 (3d ed. 2004)). At a minimum, a plaintiff should state "enough facts to state a claim to relief that is plausible on its face." Id. at 570; see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

A dismissal should not be without leave to amend unless it is clear from the face of the complaint that the action is frivolous and could not be amended to state a federal claim, or the district court lacks subject matter jurisdiction over the action. See Cato v. United States, 70 F.3d 1103, 1106 (9th Cir. 1995) (dismissed as frivolous); O'Loughlin v. Doe, 920 F.2d 614, 616 (9th Cir. 1990).

B. Plaintiffs' Complaint

1. General Allegations

Plaintiffs bring this action against defendants Wells Fargo Bank, N.A., Wells Fargo Home Mortgage, and Wells Fargo & Company (collectively, Wells Fargo), asserting violations of the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681, and the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692. (Doc. # 1-1.) They also assert state law tort claims for invasion of privacy and negligent hiring and supervision. ( Id. )

Plaintiffs assert that they bring this action regarding Wells Fargo's continued attempts to collect an alleged debt from Plaintiffs that Wells Fargo claims it is owed. (Doc. # 1-1 at 2 ¶ 5.) They contend that on June 26, 2014, they received a "dunning notice" from Wells Fargo's servicer which makes various claims by Wells Fargo regarding an alleged loan. ( Id. ¶6.) This notice is attached as Exhibit A to the complaint. (Doc. # 1-1 at 9-12.) Plaintiffs contend that on June 30, 2014 and July 20, 2014, Plaintiffs served a Notice for Validation of Debt pursuant to the FDCPA, which required Wells Fargo, the "debt collectors" to validate/verify the alleged debt pursuant to 15 U.S.C. § 1692g. ( Id. at 2 ¶ 7.)

Plaintiffs claim that they received a response through Wells Fargo's servicer on July 23, 2014, that included a copy of an alleged Adjustable Rate Mortgage Note executed with World Savings Bank, FSB; however, the documentation did not identify Wells Fargo and Wells Fargo did not otherwise validate that Plaintiffs owe any debt to Wells Fargo. ( Id. ¶ 8.)

Plaintiffs aver that on August 19, 2014, they obtained a consumer credit report from consumer credit reporting agencies Equifax and Transunion, and discovered that Wells Fargo was reporting the alleged debt to the consumer credit reporting agencies. ( Id. ¶ 9.) They claim to have suffered economic harm as a result of the erroneous credit reporting and failure to validate the debt. ( Id. ¶ 10.)

Plaintiffs also include the following allegation: "The above detailed conduct by the Defendant(s) has more to do with their deceptive and illegal acts in their attempt to collect the alleged debt, as opposed to any legitimacy of their alleged debt. The FDCPA, FCRA, relates to the Defendant(s) even if they were collecting a legitimate debt." ( Id. ¶ 11.)

2. FCRA Claim

a. Allegations

Plaintiffs claim that Wells Fargo is a "credit furnisher" as that term is defined by the FCRA, and that the FCRA, and specifically 15 U.S.C. § 1681s-2(a), prohibits furnishers from reporting inaccurate or erroneous information about consumers, and places an affirmative duty on furnishers to correct and update information they know, or reasonably should know is inaccurate. ( Id. at 3 ¶ 15.) The FCRA further requires furnishers to flag or otherwise provide notice to credit reporting agencies of any dispute by a consumer related to his or her credit information or history. ( Id. ) 15 U.S.C. § 1681s-2(b) imposes additional obligations on credit furnishers which are triggered once a credit reporting agency (CRA) notifies the furnisher it has received a notice of dispute from a consumer under 15 U.S.C. § 1681s-2(a)(2). ( Id. ¶ 16.) The CRA is required to forward a consumer dispute verification form to the furnisher, and the furnisher is then required to verify the credit information and investigate its accuracy. ( Id. ) The furnisher is likewise required to: (a) conduct an investigation regarding the disputed information; (b) review all relevant information provided by the CRA; (c) report the results of the investigation back to the CRA; (d) if the investigation finds the existing information is incomplete or inaccurate, to report ...

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