Berlin v. Bank of Am., N.A.

Citation101 F.Supp.3d 1
Decision Date24 April 2015
Docket NumberCivil Action No. 14–1306 JEB
PartiesDonald Marshall Berlin, et al., Plaintiffs, v. Bank of America, N.A., Defendant.
CourtU.S. District Court — District of Columbia

101 F.Supp.3d 1

Donald Marshall Berlin, et al., Plaintiffs,
Bank of America, N.A., Defendant.

Civil Action No. 14–1306 JEB

United States District Court, District of Columbia.

Signed April 24, 2015

101 F.Supp.3d 6

Benjamin R. Prinsen, Kravit, Hovel & Krawczyk, Milwaukee, WI, Steven Michael Oster, Oster Law Firm, Washington, DC, for Plaintiffs.

Thomas R. Lynch, Bradley Arant Boult Cummings LLP, Washington, DC, for Defendant.


JAMES E. BOASBERG, United States District Judge

Plaintiffs Donald and Kimberley Berlin bring this suit alleging that they suffered a nightmarish ordeal when trying to wrap up their affairs with Defendant Bank of America, N.A. According to the Berlins, they had enjoyed a long and positive relationship with the Bank until it closed its Premier Banking Centers for high-net-worth individuals such as themselves. At that point, they were forced into the Bank's regular service channels, and when they sought to wind down their various accounts, the Bank's incompetence or bad faith made doing so nearly impossible. For one thing, Plaintiffs discovered that the Bank had prepared and recorded their loan documents with numerous errors. As they attempted to resolve those issues, the Bank filed wrongful foreclosure actions against their properties and reported negative and inaccurate credit information regarding their accounts. Although Defendant admitted that these actions were taken in error and repeatedly agreed to

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fix its mistakes, it continually failed to do so. Indeed, according to Plaintiffs, BANA still furnishes inaccurate credit information and still has not corrected defects in certain of their loan documents. Their experience was made all the more frustrating by the flood of robo-calls, notices of default, debt-collection notices, and other communications that the Berlins received and that the Bank repeatedly promised would stop but did not. The Berlins' security clearances and Mr. Berlin's professional license were also adversely affected as a direct result of BANA's actions.

Finally at their wits' end, they filed this suit alleging violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq.,and various state-law torts. Defendant now moves to dismiss all seven counts, raising a congeries of different arguments. As a few gain traction, the Court will grant the Motion in part, but deny it in the main.

I. Background

Distilling the central allegations in Plaintiffs' Amended Complaint is no easy task. They filed a 41–page, mostly single-spaced pleading that is often heavy on detail yet light on clarity. The Court understands that the Berlins may be frustrated; assuming that the facts alleged are true—as it must at this stage—they endured an infuriating experience as a result of Bank of America's pure incompetence or bad faith. Future pleadings and briefs must, however, provide a clearer picture of the chronology and arrangements that are central to their claims, and they must more specifically link particular actions to the corresponding counts. With that counsel, the Court will now lay out the key facts insofar as it is able to discern them.

For many years, the Berlins “enjoyed an enduring and profitable relationship” with Bank of America. SeeAm. Compl., ¶ 16. Indeed, Plaintiffs and companies that Mr. Berlin owned “had several millions of dollars in assets, investments, loans, credit cards, and other kinds of accounts at BANA.” Id.The “lending relationship” involved, among other things, “multiple residential home mortgages and multiple home equity lines of credit” for several properties located in D.C. and Virginia. Id.,¶ 17. But the relationship between Plaintiffs and the Bank eventually soured.

According to the Berlins, the “seminal event” took place in April 2009, when BANA closed its Premier Banking Centers. See id.,¶ 1. The PBCs had given the Bank's “high net-worth customers a single point of contact, where all of its customer needs would be met and serviced through a dedicated team of professional bankers.”Id.When BANA terminated the PBCs “[w]ithout notice to the Berlins,” id.,¶ 18, it “forced [them] into its regular service and process channels.” Id.,¶ 19. These “proved wholly inefficient and ineffective” for resolving numerous problems that arose with respect to their loans, and made it “extremely difficult (if not impossible) for [them] to unwind their relationships with BANA and ... move all of their loans and assets to different institutions.” Id.

For instance, in early 2010, they sought to “negotiate the satisfaction” of a loan related to property at 1051 North Stuart Street in Arlington, Virginia. See id.,¶¶ 17, 25. As it turns out, the original loan documents “contained numerous errors.” Id.,¶ 25(a). Plaintiffs thus attempted to remedy the defects with the Bank. In the course of working out a resolution, however, the Bank compounded their problems by “mistakenly and inappropriately [giving] notice of foreclosure and/or fil[ing] a foreclosure action” against the property. Id.,¶ 25(b). While it subsequently withdrew the action, it continued to report negative credit information to consumer-

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reporting agencies (CRAs) about the foreclosure. See id.

The parties nonetheless managed to come to an agreement in late April 2010, under which the Berlins would pay off the loan in full and, in exchange, the Bank would “forgive any and all late fees, costs, and legal fees, remediate any and all negative, derogatory, or adverse information associated with [their] credit as a result of the Bank's misconduct, and remove any reference to the wrongful foreclosure action filed against the property and provide documentation supporting [their] assertion that it was, in fact, wrongly filed.” Id.,¶ 25(c). Of course, like all of the Berlins' dealings with the Bank during this period, finalizing this agreement was not without problems. BANA, for example, was supposed to “send[ ] the final closing figures and executed agreement” at least two days in advance of the scheduled closing date of April 28, 2010. Id.,¶ 25(d). It was reminded of this “in writing” and “on many occasions,” id.,but it did not send the documents in time. See id.,¶ 25(e). The parties, consequently, had to reschedule the closing, and the Berlins had to have their own counsel draw up the final documents. See id.Because of the Bank's lack of follow through, finalizing this agreement was done at considerable “additional time and expense to the Berlins.” Id.,¶ 25(f).

Unfortunately, Plaintiffs' efforts to finalize the deal were also for naught. While they satisfied their half of the bargain to pay off the remainder of the loan, the Bank was in “repeated violation” of the agreement and its “written representations that [it] would correct [their] credit reports.” Id.Any steps that BANA did take to correct the information proved futile. According to Plaintiffs, “Although BANA issued ‘override letters' and ‘final determination letters,’ in an attempt to stop furnishing erroneous and misleading information to the CRAs, the internal BANA credit reporting systems reversed these determinations and continued to furnish inaccurate and misleading negative credit information.” Id.,¶ 25(g). When Plaintiffs informed the CRAs about the inaccurate information, and the CRAs then notified BANA of the disputes, the Bank still “failed to conduct a proper investigation and [it] continued to furnish inaccurate and misleading negative credit information to the CRAs.” Id.In fact, it is the Berlins' belief that BANA continues to convey erroneous credit information to the CRAs about the foreclosure action filed against the Stuart Street property, and that this false information is also still maintained in various databases that obtain information from CRAs.See id.,¶ 25(i).

The headaches only continued with Plaintiffs' attempts to resolve their home-equity lines of credit (HELOCs). The documentation for one such loan, which they had taken out to make legally required renovations on one of their properties, “contained multiple errors.” Id.,¶ 26(a). “During the course of rigorous permit and inspection proceedings” related to the renovations, “D.C. inspectors found that the official documents created by BANA and filed with the Recorder's Office in Washington D.C. all contained incorrect information regarding the address, description, and ownership of the property.” Id.Because of these defects, “officials refused to ‘close out’ the [construction] permits and licenses,” and “the Berlins could not obtain a legal occupancy permit in 2010 and 2011.” Id.

In March 2012, Plaintiffs and BANA representatives discussed the possibility of a settlement agreement under which the Berlins would pay off the notes on their two home-equity loans in exchange for resolving “any pending issues” on the loans.

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Id.,¶ 26(b). The Bank's representatives “accepted this proposal and began drafting and discussing a Global Settlement Agreement” similar to the one the parties negotiated for the Stuart Street loan. Id.Despite the apparent agreement, however, the Bank was extremely unresponsive in its dealings with Plaintiffs. For several months, the Berlins made numerous attempts to “obtain complete, accurate pay off amounts” for these loans but “with rare...

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