Blair v. Bank of America, N.A.

• Decision Date: 13 March 2012
• Docket Number: Case No. 10-cv-946-SI
• Court: U.S. District Court — District of Oregon
• Parties: WILLIS G. BLAIR, Plaintiff, v. BANK OF AMERICA, N.A., a national banking association; BAC HOME LOANS, a division of BANK OF AMERICA, N.A.; CITIBANK (SOUTH DAKOTA), N.A., a national banking association; SEARS CARD SERVICES, a division of CITIBANK, N.A.; SMITH & GREAVES, LLP, an Oregon Limited Partnership; and NORTHLAND GROUP INC., a Minnesota corporation, Defendants.

WILLIS G. BLAIR, Plaintiff,

v.BANK OF AMERICA, N.A., a national banking association;BAC HOME LOANS, a division of BANK OF AMERICA, N.A.; CITIBANK (SOUTH DAKOTA), N.A.,a national banking association; SEARS CARD SERVICES, a division of CITIBANK, N.A.;SMITH & GREAVES, LLP, an Oregon Limited Partnership; and NORTHLAND GROUP INC.,a Minnesota corporation, Defendants.

Case No. 10-cv-946-SI

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON PORTLAND DIVISION

Dated: March 13, 2012

OPINION AND ORDER

Bonnie Marino-Blair

Attorneys for Plaintiff

John A. Cochran

Attorneys for Plaintiff

Pilar C. French

Dominic G. Colletta

Lane Powell PC

Attorneys for Defendants Bank of America, N.A. and BAC Home Loans, LP

Kathryn P. Salyer

Farleigh Wada Witt

Attorneys for DefendantsCitibank, N.A. and Sears Card Services

Frank H. Lagesen

Cosgrave Vergeer Kester LLP

Attorneys for DefendantSmith & Greaves, LLP

SIMON, District Judge.

In this action, Plaintiff, Willis G. Blair, asserts claims against Bank of America, N.A. ("BofA") and BAC Home Loans ("BAC")(collectively, "the BofA Defendants"); Citibank (South Dakota), N.A. and Sears Card Services (collectively, "the Citibank defendants"); Smith and Greaves, LLP("S&G"); and Northland Group, Inc.("Northland").Plaintiff alleges that his residential mortgages were serviced by the BofA Defendants and that he owed credit card obligations to the Citibank Defendants.Plaintiff alleges that S&G, a law firm, provided collection services on behalf of the Citibank Defendants and that Northland also provided collection services on behalf of the Citibank Defendants.In his First Amended Complaint ("FAC"), Plaintiff alleges disability discrimination; defamation; violation of home mortgage, credit, and debt collection statutes; invasion of privacy; and breach of the implied contractual covenant of good faith and fair dealing.

In response to Plaintiff's original Complaint, all Defendants other than Northland¹ filed motions to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim.(Dkts. 5, 30, 34, and 36.)Before the court ruled on the merits of these motions, Plaintiff sought leave to amend his complaint.(Dkt. 49.)The court granted Plaintiff's motion to amend and denied Defendants' motions to dismiss without prejudice and with leave to renew.(Dkt. 63).Plaintiff then filed his FAC.The Citibank Defendants filed a Motion to Dismiss the FAC (Dkt. 65), followed by an Amended Motion to Dismiss(Dkt. 66).Defendant S&G filed a Motion for Summary Judgment against the FAC (Dkt. 67), and the BofA Defendants filed a Motion to Dismiss the FAC.(Dkt. 70.)

For the reasons stated below: (1) the Citibank Defendants' Motion to Dismiss[65] is DENIED as moot; (2) the Citibank Defendants' Amended Motion to Dismiss[66] is GRANTED IN PART and DENIED IN PART, resulting in the dismissal with prejudice of all claims asserted by Plaintiff against the Citibank Defendants except for defamation and violation of the Oregon Unlawful Debt Collection Practices Act;(3)Defendant S&G's Motion for Summary Judgment[67] is GRANTED; and the BofA Defendants' Motion to Dismiss[70] is GRANTED.In addition, if Defendant Northland has not entered an appearance by April 30, 2012, and if Plaintiff has not moved for default against Northland by that date, the court will dismiss all claims against Northland without prejudice for want of prosecution.

I. PLAINTIFF'S ALLEGATIONS

As alleged by Plaintiff in his FAC, the BofA Defendants acquired from Countrywide the servicing of two mortgage loans for which Plaintiff was the mortgagor.FAC at ¶ 5.5.Plaintiff was also a borrower on Citicard and Sears credit card accounts.Id.at ¶ 5.6.Plaintiff alleges that he suffers from chronic physical disabilities, including seizure disorder, Type I diabetes, and complications of diabetes including neuropathy, eye problems, skin infections, and pneumonia.Id.at ¶ 5.1.

Plaintiff further alleges that the BofA and Citibank Defendants were the recipients of federal funds pursuant to the Emergency Economic Stabilization Act of 2008, 12 U.S.C. §§ 5201 et seq., as amended by the American Recovery and Reinvestment Act of 2009, which together created a federal program under which the United States Treasury invested approximately $245 billion in financial institutions and guaranteed certain of their assets.Id.at ¶ ¶ 5.3, 5.4."By their own assurances to the American public, Congress, the Treasury and the Congressional Oversight Program," the BofA and Citibank Defendants had "a variety of forbearance programs" and "support for credit card holders" allocated from these federal funds, including the Home Affordable Modification Program ("HAMP") designed to help homeowners modify home mortgages.Id.at ¶¶ 6.4, 6.5, 6.10, 6.17, Ex. 3, p. 23.

Plaintiff alleges that between July 2009 and early 2010, he was "unable to work his normal schedule" because of health problems.Id.at ¶ 14.6.From "late 2009 to about July of 2010,"Plaintiff contacted the BofA Defendants and the Citibank Defendants to tell them he was "[a]nticipating reduction in income and increased medical expense," that he was disabled, and that he needed a temporary extension or modification of his loan terms.Id.at ¶ 6.8.Plaintiffclaims that the BofA and Citibank Defendants discriminated against him "on the basis of disability or on the basis of exercising of rights under the Consumer Credit Protection Act" by taking adverse action against him after he"disclosed his disabilities and medical conditions" and that they did so by denying "credit extension" after Plaintiff made a "good faith exercise of rights under the Consumer Credit Protection Act."Id.at ¶¶ 14.7-14.8.

Plaintiff asserts the BofA Defendants and the Citibank Defendants refused Plaintiff's requests to renegotiate or modify the terms of his loans.Id.at ¶¶ 6.8, 6.10, 6.11, 6.12.Plaintiff adds that all Defendants raised the interest rates on his loans, allegedly causing other lenders to increase their interest rates and deny Plaintiff access to capital, thereby further exacerbating his physical disability.Id.¶¶ 6.18, 6.19.Plaintiff also alleges that after he requested participation in Citibank's credit card debt relief programs, those Defendants retaliated against him by assigning his accounts to collection agencies.Id.at ¶ 8.3.

Plaintiff asserts that he was, except for his disabilities, "otherwise qualified" for forbearance, modifications, and participation in the programs because "[p]rior to defendants' actions,"Plaintiff had high credit scores and more than $1.5 million in available credit.Id.at ¶ 6.15.After Plaintiff asked Defendants for inclusion in their forbearance programs, they made defamatory communications about him, including: (1)Defendant BAC "asserted on a speaker phone in a call to Dr. Blair's office that his loan was 'in bankruptcy';"(2) despite receiving notice of a dispute from Plaintiff, BAC failed to reinvestigate and correct the disputed information; (3) the Citibank Defendants failed to investigate a disputed account, despite admitting in July 2010 that the current credit card statement was incorrect because they had reported the accounts "closed by cardholder;"(4)Plaintiff disputed an Experian credit reportentry by BAC that he made a late payment in May 2010, but as of 2010 BofA was still asserting incorrect information; (5) the Citibank Defendants asserted that Dr. Blair was in bankruptcy and transmitted that information to S&G and (6) the Citibank Defendants communicated to Northland on or about July 2010 that Plaintiff would likely attempt to evade service of process.Id.at ¶ 9.2.Plaintiff asserts that these communications were made with the intent to injure him "and/or in retaliation for Dr. Willis G. Blair's assertion that his civil rights were being violated."Id.at ¶ 9.4.Plaintiff adds that the Citibank Defendants and S & G "further impaired [Plaintiff's] credit worthiness by doing frequent, unwarranted credit inquiries," thereby lowering his credit score.Id.at ¶ 10.11.

Based on these allegations, Plaintiff asserts the following twelve: (1) violation of the Americans with Disabilities Act("ADA"), 42 U.S.C. § 12131(Title II) and § 12181(Title III), including retaliation (against BofA and Citibank Defendants); (2) violation of § 504 of the Rehabilitation Act of 1973("Section 504"), 29 U.S.C. § 794, including relaliation (against BofA and Citibank Defendants); (3) defamation (against BofA and Citibank Defendants); (4) violation of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681s-2(a) and (b)(against all Defendants);(5) violation of the Fair Debt Collection Practices Act ("FDCPA", 15 U.S.C. § 1692 et seq.(against all Defendants);(6) violation of the Oregon Unlawful Debt Collection Practices Act ("UDCPA"), Or. Rev. Stat. § 646.639 et seq.(against all Defendants);(7) violation of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601 et seq. and "Regulation Z,"12 C.F.R. §§ 226.6,226.9(against Citibank Defendants);(8) violation of the Equal Credit Opportunity Act ("ECOA"), 15 U.S.C. § 1691(against BofA and Citibank Defendants);(9) violation of the Homeowners Protection Act ("HPA"), 12 U.S.C. § 4902(a)(against BofA Defendants);(10)invasion of privacy (against all Defendants); (11) violation of the 2009 Credit Card Accountability Responsibility and Disclosure Act ("Credit CARD Act")amendments to TILA, 15 U.S.C. § 1637(I)(against Citibank Defendants); and (12) breach of the implied covenant of good faith and fair dealing (against BofA and Citibank Defendants).

II.STANDARDS

A motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted "tests the legal sufficiency of a claim."Conservation Force v. Salazar, 646 F.3d 1240, 1242(9th Cir.2011).Dismissal for failure to state a claim is proper if there is a "lack of a cognizable legal theory or the absence...