Wenner v. Bank of America, Na, Civil Action No. 08-2269-CM.
| Decision Date | 12 June 2009 |
| Docket Number | Civil Action No. 08-2269-CM. |
| Citation | 637 F.Supp.2d 944 |
| Parties | Bruce R. WENNER and Frances C. Wenner, Plaintiffs, v. BANK OF AMERICA, NA, Defendant. |
| Court | U.S. District Court — District of Kansas |
Amy Sweeny Davis, Fred L. Slough, Slough, Connealy, Irwin & Madden LLC, Kansas City, MO, for Plaintiffs.
Toby Jon Crouse, Foulston Siefkin LLP, Overland Park, KS, for Defendant.
Plaintiffs Bruce and Frances Wenner, husband and wife, bring this action against their bank, Bank of America, NA, ("BOA"). This case is before the court on three motions: (1) plaintiffs' motion to amend their complaint to add a claim under the Kansas Consumer Protection Act ("KCPA") (Doc. 32); (2) plaintiffs' motion to amend their complaint to add BOA's credit card division, FIA Card Services, N.A. ("FIA") as a party (Doc. 42); and (3) defendant BOA's motion to dismiss (Doc. 52). For the following reasons, the court grants plaintiffs' motions to amend, and grants in part and denies in part defendant's motion to dismiss.
According to plaintiffs' second amended complaint, plaintiffs had a checking account with BOA, which they set up to automatically make a monthly electronic transfer of $2564.63 to Chase Home Finance ("Chase") for their mortgage payment. BOA's electronic bill pay service ensured protection of its customers in the case of unauthorized transfers, and provided overdraft coverage through cash advances charged to plaintiffs' BOA credit card.1
On or about December 16, 2005, plaintiffs closed the checking account, presumably terminating the automatic bill-pay. Because they closed the checking account, they made their December 2005 mortgage payment to Chase from a different checking account they held with Capitol Federal Savings.
On or about December 28, 2005, a $2,600.00 charge appeared on plaintiffs' BOA credit card, apparently to cover a transfer from their closed BOA bank account. Plaintiffs became aware of the unauthorized transfer and charge, and contacted an employee at their local BOA branch bank. Plaintiffs signed paperwork to reconfirm that their account was closed, and were directed to contact BOA's credit card division. The credit card division directed plaintiffs back to the banking division, which again insisted the credit card division needed to resolve the problem. On January 26, 2006, plaintiffs sent a letter to BOA's credit card division disputing the December 2005 charge.
On January 28, 2006, another $2,600.00 charge appeared on plaintiffs' credit card for plaintiffs' January 2006 mortgage payment to Chase. On February, 26, 2006, plaintiffs sent a letter to the credit card division disputing both the December 2005 and January 2006 charges. The banking division referred plaintiffs to the credit card division, and vice versa. BOA did not conduct investigations or offer reports regarding the contested charges. BOA failed to respond to plaintiffs' repeated demands to remove the unauthorized charges, and instead made repeated collection calls, sent delinquency notices, and threatened to refer the account to a collection agency.
On February 12, 2007, plaintiffs sent a letter to BOA's Chief Executive Officer, describing their situation and BOA's failure to correct mistakes relating to their account. A BOA representative suggested plaintiffs provide proof that Chase had not received the unauthorized payments posted to plaintiffs' account. On March 26, 2007, plaintiffs provided their December 2005 and January 2006 statements from both Chase and Capitol Federal, under the belief that these documents established that the unauthorized payments had not actually been made to Chase.
Plaintiffs allege that BOA, in concert with FIA, reported negative information to one or more of the three major credit reporting agencies (CRAs)—Experian, Trans Union, and Equifax—regarding plaintiffs' credit card account without also reporting that plaintiffs disputed the debt. Plaintiffs informed the CRAs of the dispute and requested investigations of the negative reports. Plaintiffs assert that the CRAs contacted BOA's banking and/or credit card division to verify the reports, but BOA and/or FIA failed to conduct a reasonable investigation in response to the credit reporting agencies' inquiries. FIA sold or assigned the disputed debt to Asset Management Professionals ("AMP"), a debt collection agency. Plaintiffs do not allege dates or a time frame related to any of this conduct.
Additionally, after this action commenced, plaintiffs discovered that Chase had received the unauthorized payments from BOA in addition to plaintiffs' payments from their Capitol Federal account. Plaintiffs arranged for the payments to be returned to BOA.
Plaintiffs filed this action against BOA on June 11, 2008, originally alleging a violation of the Federal Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. ("FCRA"); and common-law defamation. (Doc. 1.)
The court entered a scheduling order on October 1, 2008 (Doc. 12), setting a deadline of December 1, 2008 for amending the pleadings or joining parties.
On December 1, 2008, plaintiffs filed (1) a motion for extension of time to add parties (Doc. 31); and (2) a motion for leave to amend their complaint (Doc. 32), alleging some of their factual allegations were incorrect or incomplete in light of discovery, and seeking to add a claim under the Kansas Consumer Protection Act ("KCPA").
The court granted defendant BOA an extension of time to respond to plaintiffs' motions until January 15, 2009. (Doc. 39.)
On December 17, plaintiffs filed a motion for leave to file a second amended complaint, seeking to add FIA as a party. (Doc. 42.)
Defendants2 sought an extension of time to respond to plaintiffs' second motion to amend, indicating their desire to file a consolidated response to plaintiffs' motions on January 15, 2009, and seeking leave to file that response under seal. (Doc. 43.)
The court granted defendants until January 15, 2009 to file a consolidated response to plaintiffs' motions to amend. (Doc. 44.)
On January 15, 2009, defendants filed a motion to dismiss under seal. (Doc. 52.) The memorandum of law in support of this dispositive motion also contains defendants' responses to plaintiffs' motions to amend. Discovery has been stayed pending resolution of the outstanding motions. All responses and replies having now been filed, the court is ready to rule on the pending motions.
Rule 15 of the Federal Rules of Civil Procedure governs the procedure for amending pleadings. Where, as here, responsive pleadings have been served, a party may amend only by leave of court, and such leave shall be freely given when justice so requires. Fed.R.Civ.P. 15(a). The decision is entrusted to this court's discretion. Hall v. Witteman, No. 07-4128-SAC, 2008 WL 2949567, at *4 (D.Kan. July 30, 3008) (citing Stewart v. Brd. of Comm'rs for Shawnee County, Kan., 216 F.R.D. 662, 664 (D.Kan.2003)). Refusing leave to amend is generally only justified upon a showing of undue delay, undue prejudice to the opposing party, bad faith, or futility of amendment. Id.
In accord with Local Rule 15. 1, plaintiffs' first motion to amend concisely states their intent to correct or clarify factual inaccuracies and to add a claim under the KCPA. Plaintiffs' second motion to amend concisely states that they wish to join FIA as a defendant to the current litigation. Plaintiffs attached proposed amended complaints to each motion.
The court finds that plaintiffs should be given leave to amend their complaint. The scheduling order entered on October 1, 2008, set a deadline of December 1, 2008 for amending the pleadings or joining parties. Plaintiffs filed their motion to add a claim within this deadline. And plaintiffs sought and received an extension of the deadline for adding parties. (Docs. 31, 56.) Further extension of this deadline was given at defendants' request. Contrary to defendants' arguments, the court finds that plaintiffs need not further establish good cause under Federal Rule of Civil Procedure 16. The motions do not exhibit undue delay, and granting the motions will not cause undue prejudice. Indeed, due to defendants' combination of responsive pleadings with a dispositive motion, allowing plaintiffs to amend will not require defendants to file a revised motion to dismiss, which it conditioned on both the original and the proposed amended complaints.
Defendants nevertheless allege that amendment would be futile because the FCRA and defamation claims against BOA and FIA fail as a matter of law; the proposed state law claims are preempted by the FCRA; one of the FCRA claims is not actionable; and the KCPA claims fail to state a claim as a matter of law.
A court may deny a proposed amendment on the basis of futility if the "amendment would not withstand a motion to dismiss or otherwise fails to state a claim upon which relief may be granted." Stewart, 216 F.R.D. at 664 (citing Ketchum v. Cruz, 961 F.2d 916, 920 (10th Cir.1992); Schepp v. Fremont County, Wyo., 900 F.2d 1448, 1451 (10th Cir.1990)). To this end, defendant BOA filed a motion to dismiss, asserting arguments on its own behalf and on behalf of FIA.
To survive a motion to dismiss under Rule 12(b)(6), a complaint—or non-futile amendment—must present factual allegations that "raise a right to relief above the speculative level" and must contain "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1965, 167 L.Ed.2d 929 (2007). The allegations must be enough that, if assumed to be true, the plaintiff plausibly, not merely speculatively, has a claim for relief. Robbins v. Oklahoma, 519 F.3d 1242, 1247-48 (10th Cir.2008). In ruling on a motion to dismiss for failure to state a claim und...
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