United States District Court, D. Nevada
GEORGE A. EVAN, et al., Plaintiff,
v.
WELLS FARGO HOME MORTGAGE, INC., et al., Defendants.
ORDER
MIRANDA M. DU UNITED STATES DISTRICT JUDGE.
I.
SUMMARY
Pro
se Plaintiffs George A. Evan and Christine Evan sued
Defendants Wells Fargo Bank, N.A.[1] (“Wells Fargo”),
CoreLogic Credco, LLC[2] (“CoreLogic”), Trans Union
LLC[3]
(“Transunion”), and Equifax Information Services
LLC[4]
(“Equifax”) because Wells Fargo rejected their
joint application for a mortgage loan-Ms. Evan's credit
score was too low. (ECF No. 1.) Plaintiffs allege violations
of the Equal Credit Opportunity Act, 15 U.S.C. § 1691,
et seq. (“ECOA”), the Fair Credit
Reporting Act, 15 U.S.C. § 1681, et seq.
(“FCRA”), and Wells Fargo's purported common
law duties. (Id.) Before the Court are Transunion,
CoreLogic, and Wells Fargo's motions to dismiss
Plaintiffs claims against them for failure to state a claim
under Federal Rule of Civil Procedure 12(b)(6).[5] (ECF Nos. 9, 10,
18.) Because the Court agrees with Defendants-for various
reasons, as explained below-the Court will grant their
motions to dismiss, mostly with prejudice, but will grant
Plaintiffs leave to amend their FCRA claim against Transunion
and CoreLogic. As further discussed infra in Section
IV.B, the Court will deny several other pending motions as
moot.
II.
BACKGROUND
The
facts described herein are adapted from Plaintiffs Complaint.
Plaintiffs jointly applied for a home mortgage loan from
Wells Fargo in 2016. (ECF No. 1 at 1.) Wells Fargo denied
their application (“the Mortgage Application”)
because Wells Fargo requires that both applicants have a
credit score of 680 or higher, measured using the middle
score provided by the three major credit reporting agencies,
and Mrs. Evan's middle score was 678. (Id. at
2.) Plaintiffs were otherwise qualified for the mortgage loan
they sought. (Id. at 1.) Mrs. Evan's score was
only 678 because she formally disputed an approximately $85
dollar charge from Diner's Club. (Id. at 2.)
Plaintiffs wrote to Wells Fargo, telling them they had filed
a consumer statement with the credit reporting agencies about
the dispute, and had filed a lawsuit against Diner's Club
over it. (Id.)
Nonetheless,
Wells Fargo denied Plaintiffs' Mortgage Application.
(Id. at 3.) Plaintiffs appealed Wells Fargo's
decision by writing two additional letters explaining their
situation. (Id.) Wells Fargo extended the date by
which it would give Plaintiffs a final answer on their appeal
of the Mortgage Application several times. (Id. at
4.) In early 2017, Wells Fargo sent Plaintiffs a letter
affirming its denial of the Mortgage Application.
(Id.)
In June
of 2017, Plaintiffs settled their lawsuit against Diner's
Club, which resulted in “the payment of a substantial
cash settlement by Diners Club to the plaintiffs, and with
the permanent removal from plaintiff Christine Evan's
credit record of the negative reference” that caused
Wells Fargo to deny their mortgage application. (Id.
at 3.) After that negative reference was removed, Mrs. Evans
credit score “was immediately adjusted to approximately
835.” (Id.)
Plaintiffs
further allege that CoreLogic, Transunion, and Equifax failed
to properly report Ms. Evan's disputed $85 charge from
Diner's Club, specifically by inappropriately reporting
it as a “serious delinquency, ” and
inappropriately calculating Ms. Evan's credit score as if
it were based on a delinquency. (Id. at 5.)
III.
LEGAL STANDARD
A court
may dismiss a plaintiff's complaint for “failure to
state a claim upon which relief can be granted.”
Fed.R.Civ.P. 12(b)(6). A properly pled complaint must provide
“a short and plain statement of the claim showing that
the pleader is entitled to relief.” Fed.R.Civ.P.
8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 555 (2007). While Rule 8 does not require detailed
factual allegations, it demands more than “labels and
conclusions” or a “formulaic recitation of the
elements of a cause of action.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (citing
Twombly, 550 U.S. at 555.) “Factual
allegations must be enough to rise above the speculative
level.” Twombly, 550 U.S. at 555. Thus, to
survive a motion to dismiss, a complaint must contain
sufficient factual matter to “state a claim to relief
that is plausible on its face.” Iqbal, 556
U.S. at 678 (internal citation omitted).
In
Iqbal, the Supreme Court clarified the two-step
approach district courts are to apply when considering
motions to dismiss. First, a district court must accept as
true all well-pled factual allegations in the complaint;
however, legal conclusions are not entitled to the assumption
of truth. See id. at 678-79. Mere recitals of the
elements of a cause of action, supported only by conclusory
statements, do not suffice. See id. at 678. Second,
a district court must consider whether the factual
allegations in the complaint allege a plausible claim for
relief. See Id. at 679. A claim is facially
plausible when the plaintiff's complaint alleges facts
that allow a court to draw a reasonable inference that the
defendant is liable for the alleged misconduct. See
Id. at 678. Where the complaint does not permit the
court to infer more than the mere possibility of misconduct,
the complaint has “alleged-but it has not show[n]-that
the pleader is entitled to relief.” Id. at 679
(internal quotation marks omitted). That is insufficient. A
complaint must contain either direct or inferential
allegations concerning “all the material elements
necessary to sustain recovery under some viable
legal theory.” Twombly, 550 U.S. at 562
(quoting Car Carriers, Inc. v. Ford Motor Co., 745
F.2d 1101, 1106 (7th Cir. 1989) (emphasis in original)). When
the claims in a complaint have not crossed the line from
conceivable to plausible, the complaint must be dismissed.
See Twombly, 550 U.S. at 570.
Where
the Court grants one or more motions to dismiss, it must then
decide whether to grant leave to amend. The Court should
“freely give” leave to amend when there is no
“undue delay, bad faith[, ] dilatory motive on the part
of the movant, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the
opposing party by virtue of ... the amendment, [or] futility
of the amendment.” Fed.R.Civ.P. 15(a); see also
Foman v. Davis, 371 U.S. 178, 182 (1962). Generally,
leave to amend is only denied when it is clear that the
deficiencies of the complaint cannot be cured by amendment.
See DeSoto v. Yellow Freight Sys., Inc., 957 F.2d
655, 658 (9th Cir. 1992).
IV.
DISCUSSION
A.
Motions to Dismiss
Wells
Fargo, Transunion, and CoreLogic all generally argue that
Plaintiffs' Complaint must be dismissed for failing to
comply with Fed.R.Civ.P. 8 as interpreted by the Supreme
Court in Iqbal and Twombly. (ECF Nos. 9,
10, 18.) They argue Plaintiffs' Complaint lacks any
facially plausible claims, as it fails to state facts
sufficient to support any of Plaintiffs' apparent claims
for relief. The Court will thus address all three motions
together. But Defendants also make more specific arguments in
favor of dismissal tied to Plaintiffs' particular claims
as asserted against each of them. The Court will therefore
map its analysis below to the three claims Plaintiffs appear
to assert in their Complaint. While the Court acknowledges
Plaintiffs appear to have been inconvenienced here, it agrees
with Defendants that Plaintiffs have failed to state a claim
with respect to any of their claims, and thus will grant
Defendants' motions to dismiss.
1.
ECOA Claim
Plaintiffs
allege that all Defendants violated their rights under the
ECOA. The Court groups its ECOA analysis by Defendant because
their arguments, and Plaintiffs' allegations against
them, differ with respect to Plaintiffs' ECOA claim.
a.
...