Evan v. Wells Fargo Home Mortgage, Inc.

          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.

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