Wright v. Specialized Loan Servicing, LLC

• Decision Date: 26 February 2015
• Docket Number: Case No.: 1:15-cv-0287 - --- -JLT
• Court: U.S. District Court — Eastern District of California
• Parties: LYNNE L. WRIGHT, Plaintiff, v. SPECIALIZED LOAN SERVICING, LLC, Defendant.

LYNNE L. WRIGHT, Plaintiff, v. SPECIALIZED LOAN SERVICING, LLC, Defendant.

Case No.: 1:15-cv-0287 - --- -JLT

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA

February 26, 2015

ORDER DISMISSING PLAINTIFF'S COMPLAINT WITH LEAVE TO AMEND

ORDER TERMINATING DEFENDANT'S MOTION TO DISMISS AS MOOT

(Doc. 6)

Plaintiff Lynne Wright initiated this action against Defendant Specialized Loan Servicing, LLC by filing a complaint in the Central District of California on December 3, 2014. (Doc. 1.) Plaintiff asserts that Defendant has made false reports regarding a debt to three credit reporting agencies and has used unlawful methods to attempt to collect this debt. Because Plaintiff has not alleged facts sufficient to support her claims, her complaint is DISMISSED with leave to amend.

I. Pleading Requirements

General rules for pleading complaints are governed by the Federal Rules of Civil Procedure. A complaint must include a statement affirming the court's jurisdiction, "a short and plain statement of the claim showing the pleader is entitled to relief; and . . . a demand for the relief sought, which may include relief in the alternative or different types of relief." Fed. R. Civ. P. 8(a). The Federal Rules adopt a flexible pleading policy, and pro se pleadings are held to "less stringent standards" than those drafted by attorneys. Haines v. Kerner, 404 U.S. 519, 521-21 (1972).

A complaint must state the elements of the plaintiff's claim in a plain and succinct manner. Jones v. Cmty Redevelopment Agency, 733 F.2d 646, 649 (9th Cir. 1984). The purpose of a complaint is to give the defendant fair notice of the claims against him, and the grounds upon which the complaint stands. Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002). The Supreme Court noted,

Rule 8 does not require detailed factual allegations, but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation. A pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do. Nor does a complaint suffice if it tenders naked assertions devoid of further factual enhancement.

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks and citations omitted). Conclusory and vague allegations do not support a cause of action. Ivey v. Board of Regents, 673 F.2d 266, 268 (9th Cir. 1982). The Court clarified further,

[A] complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." [Citation]. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. [Citation]. The plausibility standard is not akin to a "probability requirement," but it asks for more than a sheer possibility that a defendant has acted unlawfully. [Citation]. Where a complaint pleads facts that are "merely consistent with" a defendant's liability, it "stops short of the line between possibility and plausibility of 'entitlement to relief.'

Iqbal, 556 U.S. at 678 (citations omitted). If factual allegations are well-pled, a court should assume their truth and determine whether the facts would make the plaintiff entitled to relief; conclusions in the pleading are not entitled to the same assumption of truth. Id.

The Court has a duty to dismiss a case at any time it determines an action fails to state a claim, "notwithstanding any filing fee that may have been paid." 28 U.S.C. § 1915e(2). Accordingly, a court "may act on its own initiative to note the inadequacy of a complaint and dismiss it for failure to state a claim." See Wong v. Bell, 642 F.2d 359, 361 (9th Cir. 1981) (citing 5 C. Wright & A. Miller, Federal Practice and Procedure, § 1357 at 593 (1963)). However, the Court may grant leave to amend a complaint to the extent deficiencies of the complaint can be cured by an amendment. Lopez v. Smith, 203 F.3d 1122, 1127-28 (9th Cir. 2000) (en banc).

II. Plaintiff's Allegations

Plaintiff alleges Defendant is attempting to collect an alleged debt, of which Plaintiff lacks knowledge. (Doc. 1.) Plaintiff reports that she was on the website of Ticor Title, on March 15, 2014,when she found Defendant "had filed a notice of default." (Id. at 2.) According to Plaintiff, she served a "Notice of Validation of Debt pursuant to 15 USC §1692" on July 24, 2014, to require Defendant "to validate/verify their alleged debt." (Id.) Plaintiff reports that Defendant is "a stranger to the Plaintiff," because she had no contractual relationship with Defendant and she "never applied for credit or services with the defendant." (Id. at 8.)¹

In addition, Plaintiff obtained her consumer credit reports from Equifax, Experian, and Transunion on July 28, 2104, which all indicated that Defendant had reported the debt to the credit reporting agencies. (Doc. 1 at 3.) Plaintiff asserts she "immediately filed disputes with the three credit reporting agencies pursuant to 15 U.S.C. § 1681." (Id.) Plaintiff asserts Defendant "failed to maintain, and failed to follow, reasonable procedures to assure [the] maximum possible accuracy of Plaintiff's credit report." (Id. at 5.) Accordingly, Plaintiff alleges Defendant is liable for violations of the Fair Credit Reporting Act and the Fair Debt Collections Practices Act. In addition, Plaintiff alleges Defendant is liable for an invasion of privacy and negligence. (See id. at 4-12.)

III. Discussion and Analysis

A. First Cause of Action: Violation of the Fair Credit Reporting Act ("FCRA")

The FCRA was enacted "to ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy." Safeco Ins. Co. of Ant. v. Burr, 551 U.S. 47, 52 (2007). The FCRA sought to make "'consumer reporting agencies exercise their grave responsibilities [in assembling and evaluating consumers' credit, and disseminating information about consumers' credit] with fairness, impartiality, and a respect for the consumer's right to privacy.'" Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1153 (9th Cir. 2009) (quoting 15 U.S.C. § 1681(a)(4), modifications in the original). Accordingly, the FCRA imposes duties on the credit furnishers, whichare the sources that provide information to credit reporting agencies, to ensure accurate credit reporting. See id.

Two categories of responsibilities are placed upon credit furnishers in the FCRA, as set forth in 15 U.S.C. §1681s-2. Subsection (a) outlines a furnisher's duty to provide accurate information to credit reporting agencies. See 15 U.S.C. § 1681s-2(a). Subsection (b) outlines a furnisher's duty to investigate after receiving notice of a dispute regarding credit-related information from a credit reporting agency. See 15 U.S.C. § 1681s-2(b). "The FCRA expressly creates a private right of action for willful or negligent noncompliance with its requirements." Gorman, 584 F.3d at 1154 (citing 15 U.S.C. § 1681(n)-(o); Nelson v. Chase Manhattan Mortgage Corp., 282 F.3d 1057, 1059 (9th Cir. 2002)). However, the FCRA "limits this private right of action to claims arising under subsection (b)." Id. (citing 15 U.S.C. § 1681s-2(c)).

Here, Plaintiff alleges that Defendant is a furnisher under the FCRA, and that Defendant "failed to conduct a proper and lawful investigation" related to her credit. (Doc. 1 at 6.) However, Plaintiff fails to allege that any credit reporting agency notified Defendant of the disputed credit. Without such notice from a credit reporting agency—not Plaintiff—no duty to investigate was triggered under the FRCA. See 15 U.S.C. § 1681s2(b); Ewing v. Wells Fargo Bank, 2012 WL 4514055 at *4 (D. Ariz. Oct. 2, 2012) (dismissing a plaintiff's FCRA claim for failure to allege that the reporting agency sent notice of the plaintiff's consumer dispute to the defendant). As a result, Plaintiff fails to state a cognizable claim for a violation of the FCRA, and her claim is DISMISSED with leave to amend.

B. Second Cause of Action: Invasion of Privacy

As an initial matter, it is not clear whether Plaintiff intends to state a claim for a violation of her privacy rights under California law, or under the Constitution of the United States. See Ignat v. Yum! Brands, Inc., 214 Cal. App. 4th 808, 820 (2013) ("alleging a violation of a person's common-law right to privacy is not the equivalent of alleging a violation of the constitutional right to privacy"). Because Plaintiff has not alleged a constitutional violation, the Court will treat her claims as arising under common law. See id (where the plaintiff did not specifically allege a constitutional violation, the court evaluated her claim as arising under common law).

To state a cognizable claim for the invasion of privacy, Plaintiff must allege "(1) publicdisclosure (2) of a private fact (3) which would be offensive and objectionable to the reasonable person and (4) which is not of legitimate public concern." Shulman v. Group W Productions, Inc., 18 Cal. 4th 200, 215 (1998). "The right to privacy is violated only by public disclosure to the public in general, or to a large number of persons, as distinguished from an individual or a few persons." Friddle v. Epstein, 16 Cal. App. 4th 1649, 1659 (1993).

Here, Plaintiff does not specifically allege Defendant publically disclosed any private information. Rather, Plaintiff asserts she "has a right to discovery, to determine where Defendant obtained her personal, private information," including her social security number, "and how that information is being used." (Doc. 1 at 8.) Because the Court is unable to infer that Defendant, in fact, used any private information or disclosed it to a third party, this is insufficient to state a claim for an invasion of privacy. Therefore, Plaintiff's second cause of action is DISMISSED with leave to amend.

C. Third Cause of Action: Negligence

In general, to state a cognizable claim for negligence, Plaintiff "must establish four required...