Burns v. Bank of America, 03 Civ. 1685 (RMB)(JCF) (S.D.N.Y. 11/18/2003)
| Decision Date | 18 November 2003 |
| Docket Number | 03 Civ. 1685 (RMB)(JCF). |
| Parties | KEVIN E. BURNS, BARBARA R. BURNS, and RENEE A. DEFINE, Plaintiffs, v. BANK OF AMERICA, ITS AFFILIATES, SUBSIDIARIES, and AGENTS, including but not limited to BA MORTGAGE, Defendants. |
| Court | U.S. District Court — Southern District of New York |
The pro se plaintiffs bring this action against the defendant, Bank of America, N.A. ("Bank of America"),1 alleging violations of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq., the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601 et seq., and a variety of Minnesota state laws. The allegations relate to a mortgage loan issued to the plaintiffs by Bank of America's predecessor-in-interest.
Bank of America has moved to dismiss the Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim or, in the alternative, for an order granting summary judgment pursuant to Rule 56. The plaintiffs have opposed the motion and filed a cross-motion for summary judgment and a request for sanctions under Rule 11 of the Federal Rules of Civil Procedure. For the reasons that follow, I recommend that the defendant's motion be granted, the plaintiffs' motion denied, and the Complaint dismissed. With respect to the state law claims, I recommend that the plaintiffs be granted leave to amend their Complaint to allege a sufficient basis for diversity jurisdiction.
In or about October 1988, the plaintiffs received a mortgage loan secured by a lien on their property at 13684 Harmony Way in Dakota County, Minnesota. Following a series of disputes over nonpayment, the defendant initiated non-judicial foreclosure proceedings, which resulted in the sale of the property to a third party in December 2002.
In the Complaint, the plaintiffs allege that, on three separate occasions from about September 2001 to May 2002, they disputed an unspecified "trade line" that was reported to various credit bureaus by Bank of America with regard to the plaintiffs. (Complaint ("Compl.") at 3). On June 7, 2002, Douglas Norton, Bank of America's Executive Relations Officer, agreed to delete the disputed "trade line," and Bank of America subsequently contacted the Equifax, Trans Union, and Experian credit reporting services to order the deletion. (Compl. at 3). However, in mid-July 2002, another Bank of America employee named "Diane" directed CSC Credit Services, Inc. ("CSC") to continue reporting the trade line. (Compl. at 4). The plaintiffs allege that CSC reported the trade line seven times, and that the plaintiffs were subsequently denied credit as a result of the report. (Compl. at 4-5).
Additionally, the plaintiffs allege that on October 4, 2002 Fisher Pratt, an agent of the defendant, forcibly entered the plaintiffs' property at 13684 Harmony Way, disabling the deadbolt lock and security system, dismantling and disabling the watersoftener system, and "ransacking the residence." (Compl. at 6). They also allege that from October 30, 2002, to the date of the Complaint, the defendant: (1) repeatedly contacted the plaintiffs at inconvenient times without the consent of plaintiffs' counsel, (2) disclosed the nature of the parties' debt dispute to third parties, such as the plaintiffs' neighbors and others in their "residential and professional communities," (3) failed to notify the plaintiffs of their right to dispute and receive written verification of the debt, and (4) directed abusive rhetoric and threats of legal action towards the plaintiffs. (Compl. at 6-7). The plaintiffs allege that these actions constituted unlawful debt collection activities.
Finally, the plaintiffs allege that Bank of America failed to disclose, in relation to the mortgage loan at issue, "applicable finance charges, `service' charges, charges for unauthorized `tiein' sales of financial products, and escrow account debits and charges." (Compl. at 8). They also allege that Bank of America failed to disclose the assignment and/or transfer of its security interest from its predecessors-in-interest. (Compl. at 8).
In considering a motion to dismiss pursuant to Rule 12(b) of the Federal Rules of Civil Procedure, the court must accept as true all factual allegations in the complaint and must draw all inferences in favor of the plaintiff. Leatherman v. Tarrant County Narcotics Intelligence and Coordination Unit, 507 U.S. 163, 164 (1993); York v. Association of the Bar of the City of New York, 286 F.3d 122, 125 (2d Cir. 2002); Hernandez v. Coughlin, 18 F.3d 133, 136 (2d Cir. 1994). Accordingly, the complaint may not be dismissed "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957) (footnote omitted). These principles are even more strictly applied where the plaintiff is proceeding pro se. Haines v. Kerner, 404 U.S. 519, 520 (1972); McPherson v. Coombe, 174 F.3d 276, 280 (2d Cir. 1999).
The FCRA was enacted "to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit . . . in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information." 15 U.S.C. § 1681(b). The FCRA "places distinct obligations on three types of entities: consumer reporting agencies, users of consumer reports, and furnishers of information to consumer reporting agencies." Redhead v. Winston & Winston P.C., No. 01 Civ. 11475, 2002 WL 31106934, at *3 (S.D.N.Y. Sept. 20, 2002).
Furnishers of information are subject to two duties under the FCRA. Section 1681s-2(a) of the FCRA, concerning the duty to report accurate information, provides in relevant part: "[a] person shall not furnish information relating to a consumer . . . if the person knows or consciously avoids knowing that the information is inaccurate." 15 U.S.C. § 1681s-2(a)(1)(A). A person is also prohibited from furnishing information if "(i) the person has been notified by the consumer . . . that specific information is inaccurate; and (ii) the information is, in fact, inaccurate." 15 U.S.C. § 1681s-2(a)(1)(B).
By contrast, section 1681s-2(b) of the FCRA, concerning the duty to investigate reports of inaccurate information, provides in part: "[a]fter receiving notice pursuant to section 1681i(a)(2) of this title of a dispute with regard to the completeness or accuracy of any information . . . the person shall (A) conduct an investigation with respect to the disputed information; (B) review all relevant information provided by the consumer reporting agency pursuant to 1681i(a)(2) of this title; (C) report the results of the investigation to the consumer reporting agency; and (D) if the investigation finds that the information is incomplete or inaccurate, report those results to all other consumer reporting agencies to which the person furnished the information." 15 U.S.C. § 1681s-2(b)(1). This section requires that the furnisher of information receive notice from a consumer reporting agency before the duty to investigate is triggered. See Redhead, 2002 WL 31106934, at *5 (citing Young v. Equifax Credit Information Services, Inc., 294 F.3d 631, 639 (5th Cir. 2002)); see also 15 U.S.C. § 1681i(a)(2).
While the Complaint does not specify which type of entity Bank of America would constitute under the FCRA, the plaintiffs' allegations make clear that their claims relate to the accuracy of information that Bank of America provided to a specific credit reporting agency: CSC Credit Services, Inc. The Complaint therefore alleges violations of the defendant's duties as a "furnisher of information" and in particular, the duty to provide accurate information under § 1681s-2(a) of the FCRA.2
However, the FCRA provides no private right of action for alleged violations of § 1681s-2(a). See 15 U.S.C. § 1681s-2(d) ("Subsection (a) of this section shall be enforced exclusively . . . by the Federal agencies and officials and the State officials identified in that section."); Nelson v. Chase Manhattan Mortgage Corp., 282 F.3d 1057, 1059 (9th Cir. 2002); Redhead, 2002 WL 31106934, at *4; McMillan v. Experian Information Services, Inc., 119 F. Supp. 2d 84, 88 (D. Conn. 2000). As the plaintiffs lack standing to bring a claim under 15 U.S.C. § 1681s-2(a), this portion of the Complaint must be dismissed for failure to state a claim pursuant to Rule 12(b)(6).
The FDCPA seeks "to eliminate abusive debt collection practices by debt collectors," 15 U.S.C. § 1692(e), and to that end prohibits particular actions by debt collectors, such as improper communications with the consumer, see 15 U.S.C. § 1692c; harassing or oppressive behavior, including the use of violence to harm the property of another, see 15 U.S.C. § 1692d; false or misleading representations, including threats of legal actions that cannot be taken and the failure to communicate to others that the debt is disputed, see 15 U.S.C. § 1692e; and the use of unfair or unconscionable means of debt collection, see 15 U.S.C. § 1692f. The FDCPA also requires a debt collector to provide written notice of the debt and the consumer's right to dispute it. See 15 U.S.C. § 1692g(a).
Section 1692a of the FDCPA defines a "debt collector" as any person who uses interstate commerce "in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or...
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