COLLEEN KOLLAR-KOTELLY, District Judge.
Plaintiff James R. Haynes ("Haynes") brings this action pro se against Defendant Navy Federal Credit Union ("NFCU"), asserting a variety of claims arising out of a home mortgage loan extended to him by NFCU. Currently before the Court is NFCU's [13] Motion to Dismiss the Amended Complaint ("Motion to Dismiss"). Upon consideration of the parties' submissions, the relevant authorities, and the record as a whole, the motion shall be GRANTED-IN-PART and DENIED-IN-PART.
Haynes resides at 5601 16th Street, N.W., Washington, D.C. 20011. See Compl., ECF No. [1], at 1. On or about May 16, 2003, Haynes obtained a home mortgage loan from NFCU, secured against his residence. See Am. Compl., ECF No. [12], at 1. Haynes and NFCU entered into two written agreements relating to the home mortgage loan, a Promissory Note and a Deed of Trust. See Promissory Note, ECF No. [13-1]; Deed of Trust, ECF No. [13-2].
Under the parties' agreements, Haynes was required to make monthly payments to NFCU in the amount of $3,930.24. See Promissory Note § 3.B. In the event Haynes submitted a payment that was "insufficient to bring the Loan current," then NFCU had the option of either "return[ing] the payment" or "accept[ing] the payment." Deed of Trust § 1. If NFCU opted for the latter course, then it was "not obligated to apply such payments" immediately upon acceptance. Id. Rather, NFCU could "hold such unapplied funds until [Haynes] ma[de] payment to bring the Loan current." Id. In the event Haynes did not bring the loan current "within a reasonable period of time," NFCU was then required to "either apply such [unapplied] funds or return them to [Haynes]." Id.
Haynes alleges that, even though he has "continuously made monthly payments," NFCU has "refused, in some cases, to process these payments according to the terms of the contract." Am. Compl. at 1; see also Compl. at 2 ("[P]laintiff has paid all obligations under the promissory note and deed of trust."); Pl.'s Opp'n at 2 ("[P]laintiff has continuously made payments to the defendant and these payments were misplaced, lost, or misapplied."). He claims that NFCU has improperly either "return[ed] payments" to him or "shift[ed] payments into a `suspense account.'" Am. Compl. at 1.
Haynes further alleges that, on or about March 1, 2011, NFCU falsely reported to credit reporting agencies that he was $36,552 behind on his payments and 61-90 days past due. Id. at 2. On April 1, 2011, Haynes notified three national credit reporting agencies that he disputed NFCU's information. Id. Shortly thereafter, the three agencies notified NFCU of the dispute. Id. On April 14, 2011, NFCU reported that its prior information was accurate and that Haynes was still $13,818 behind on his payments and 61-90 days past due. Id.
Haynes commenced this action on March 24, 2011. See Compl. NFCU subsequently appeared and moved to dismiss the original Complaint. See Def.'s Mot. to Dismiss, ECF No. [2]. On May 6, 2011, Haynes filed an opposition. See Pl.'s Mem. of P. & A. in Opp'n to Def.'s Mot. to Dismiss Compl., ECF No. [6]. On May 17, 2011, in light of certain representations made by Haynes in his opposition, the Court directed Haynes to file a notice with the Court indicating whether he intended to amend his Complaint to add further claims or factual allegations. See Order (May 17, 2011), ECF No. [9]. When Haynes responded by stating that he intended
Haynes filed his Amended Complaint on June 17, 2011. On July 5, 2011, NFCU filed the instant Motion to Dismiss. On July 22, 2011, Haynes filed his opposition. On August 1, 2011, NFCU filed its reply. Accordingly, the motion is now fully briefed and ripe for adjudication.
Under the Federal Rules of Civil Procedure, a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief," FED. R. CIV. P. (8)(a), "in order to `give the defendant fair notice of what the... claim is and the grounds upon which it rests.'" Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). Rule 12(b)(6) provides a vehicle for parties to challenge the sufficiency of a complaint on the ground that it "fail[s] to state a claim upon which relief can be granted." FED.R.CIV.P. 12(b)(6). When presented with a motion to dismiss for failure to state a claim, the district court must accept as true the well-pleaded factual allegations contained in the complaint. Atherton v. D.C. Office of Mayor, 567 F.3d 672, 681 (D.C.Cir.2009), cert. denied, ___ U.S. ___, 130 S.Ct. 2064, 176 L.Ed.2d 418 (2010). Although "detailed factual allegations" are not necessary to withstand a Rule 12(b)(6) motion to dismiss, to provide the "grounds" of "entitle[ment] to relief," a plaintiff must furnish "more than labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555, 127 S.Ct. 1955. "Nor does a complaint suffice if it tenders `naked assertion[s]' devoid of `further factual enhancement.'" Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955). Rather, a complaint must contain sufficient factual allegations that, if accepted as true, "state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570, 127 S.Ct. 1955. "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." Iqbal, 129 S.Ct. at 1949. The plaintiff must provide more than just "a sheer possibility that a defendant has acted unlawfully." Id. at 1950. When a complaint's well-pleaded facts do not enable a court, "draw[ing] on its judicial experience and common sense," "to infer more than the mere possibility of misconduct," the complaint has not shown that the pleader is entitled to relief. Id.
While "[a]ll pleadings shall be so construed as to do substantial justice," FED.R.CIV.P. 8(f), a document filed by a party proceeding pro se must be "liberally construed," Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (per curiam) (internal quotation marks omitted). For example, where a pro se party has filed multiple submissions, the district court must generally consider those filings together and as a whole. Richardson v. United States, 193 F.3d 545, 548 (D.C.Cir.1999); see also Sieverding v. U.S. Dep't of Justice, 693 F.Supp.2d 93, 101 n. 2 (D.D.C.2010) (considering factual allegations in pro se plaintiff's prior pleadings
In its [13] Motion to Dismiss, NFCU seeks the dismissal of all six claims asserted by Haynes in his [12] Amended Complaint. The Court addresses each claim in turn.
In Count I, labeled "Breach of Contract," Haynes alleges that, on or about May 23, 2003, "he entered into a mortgage contract with [NFCU]." Am. Compl. at 1. According to Haynes, "[u]nder this contract[,] payment[s] made by [him] were first to be applied to escrow accounts and $3,390.34 [sic] applied to interest and principal." Id. He contends that NFCU "breached this contract by not applying payments as agreed but either shifting payments into a `suspense account' or returning payments to [him]." Id.
To state a claim for breach of contract under District of Columbia law,
Haynes rests his breach of contract claim in part on the allegation that NFCU
Haynes also alleges that NFCU breached the Promissory Note and Deed of Trust by (1) "returning payments to [him]" and (2) "shifting payments into a `suspense account'." Am. Compl. at 1. On its own, neither allegation would be sufficient to support a claim for breach of contract. On the one hand, the Deed of Trust authorizes NFCU to refuse and return payments under certain circumstances. Specifically, NFCU "may return any payment or partial payment if the payment or partial payments are insufficient to bring the Loan current." Deed of Trust § 1. On the other hand, the Deed of Trust authorizes NFCU to hold payments in what Haynes refers to as a "suspense account" under certain circumstances. Specifically, NFCU may elect to "accept any payment or partial payment insufficient to bring the Loan current" and, in such a case, NFCU "is not obligated to apply such payments at the time such payments are accepted" but instead "may hold such unapplied funds until [Haynes] makes payment to bring the Loan current." Id.
In both cases, it is hypothetically possible for NFCU's conduct, as it has been alleged by Haynes, to be consistent with the terms of the parties' agreements. And in both cases, the factual predicate for such a conclusion is the same: Haynes must have been delinquent at the time payments were made. Or, more accurately, the payments Haynes made must have been "insufficient to bring the Loan current." Id. Seizing on this possibility, NFCU faults Haynes for "mak[ing] no allegations... that the funds remitted were sufficient to bring the loan current." Def.'s Mem. at 7; see also Def.'s Reply at 2 ("Plaintiff has not offered any indication that the loan was current at the time
Taking this as true (as the Court must at this stage), Haynes has stated a plausible claim for breach of contract. NFCU does not claim that it had the discretion to return payments or hold them in a "suspense account" unless the payments were insufficient to bring the loan current. Accordingly, the Court shall DENY NFCU's [13] Motion to Dismiss insofar it seeks dismissal of the component of Haynes' breach of contract claim (Count I) that is predicated on his allegations that NFCU improperly (1) returned payments that were sufficient to bring the loan current or (2) shifted payments that were sufficient to bring the loan current into a "suspense account."
In sum, the Court shall GRANT NFCU's [13] Motion to Dismiss insofar as it seeks dismissal of the component of Haynes' breach of contract claim (Count I) that is predicated on an allegation that NFCU failed to apply payments "first to... escrow accounts and [then] ... to interest and principal." Am. Compl. at 1. However, the Court shall DENY NFCU's [13] Motion to Dismiss insofar it seeks dismissal of the component of Haynes' breach of contract claim (Count I) that is predicated on his allegations that NFCU improperly (1) returned payments that were sufficient to bring the loan current or (2) shifted payments that were sufficient to bring the loan current into a "suspense account."
In Count II, labeled "Accounting and Mandatory Injunctive Relief," Haynes seek "an accounting of the funds" he has allegedly remitted to NFCU and "injunctive relief[] prohibit[ing] NFCU from failing to process payments." Am. Compl. at 1. NFCU tenders three arguments for the dismissal of Count II. The Court addresses each in turn.
First, NFCU argues that Haynes' "request for an accounting [is] premature." Def.'s Reply at 2. In particular, NFCU claims that Haynes has failed to comply with the procedural requirements of the Real Estate Settlement Procedures Act ("RESPA"), which requires lenders to respond
Second, NFCU argues that Haynes cannot seek injunctive relief because he has failed to satisfy the four-prong test used by courts in this Circuit when analyzing motions for preliminary injunctive relief. See generally Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290, 297 (D.C.Cir.2006). The argument is without merit for the simple reason that Haynes has not moved for preliminary injunctive relief. If Haynes does seek preliminary injunctive relief at some point in this action, the Court will then inquire whether he has met the four-prong test governing such relief. Until then, NFCU's argument is premature.
Third, and finally, NFCU argues that Haynes cannot seek an injunction "forcing NFCU to accept [Haynes'] payments" because such an order would "run[] contrary to the terms agreed upon by the parties." Def.'s Mem. at 7. This argument presupposes that Haynes payments were "insufficient to bring the Loan current." Deed of Trust § 1. NFCU does not claim that it had the discretion to refuse payments that were sufficient to bring the loan current. At this procedural posture, the Court has no occasion to address the matter further, as there appears to be a dispute as to whether Haynes was current on the loan at the time payments were made.
For the foregoing reasons, the Court shall DENY NFCU's [13] Motion to Dismiss insofar as it seeks dismissal of Count II.
In Count III, labeled "Intentionsl [sic] Infliction of Emotional Distress," Haynes claims that he has suffered emotional distress due to NFCU calling his house "on numerous occasions" and because he is "frightened that [NFCU] will initiate foreclosure proceedings." Am. Compl. at 2. He also contends that NFCU's conduct has been "unseemly and outrageous" because NFCU has allegedly "falsely report[ed] to credit agencies that [he] is in arrears on his loan" and has allegedly "refused to provide [him with] an Interest Statement for the tax year 2010."
Under District of Columbia law,
Haynes has failed to meet this standard. His allegations that NFCU has called his house on "numerous occasions," has "falsely report[ed] to credit agencies that he is in arrears on his loan," has "refused to provide [him with] an Interest Statement," and may at some point in the future "initiate foreclosure proceedings," whether considered together or independently, fall short of pointing to conduct "so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community." Tulin, 994 A.2d at 800; see also Busby v. Capital One, N.A., 772 F.Supp.2d 268, 285-86 (D.D.C.2011) (concluding that plaintiff's allegations that defendant improperly assessed escrow charges and other penalties and "misrepresent[ed]" that it was the holder of a note rather than the loan servicer did not "plausibly rise[] to the level of `atrocious' conduct"); Ihebereme, 730 F.Supp.2d at 54-55 (concluding that plaintiff's allegations that defendant refused to accept mortgage payments, failed to credit mortgage payments in a timely manner, overcharged plaintiff, and discriminated against plaintiff failed to "rise to the level of being atrocious or outrageous"). Accordingly, the Court shall GRANT NFCU's [13] Motion to Dismiss insofar as it seeks dismissal of Count III.
In Count IV, labeled "Intentional Damage to Credit," Haynes alleges that he "was informed by his credit report that [NFCU] had reported to credit agencies on or about March 1, 2011 that [he] was $36,552, 61-90 days past due." Am. Compl. at 2. He further alleges that, after he disputed the report with three national credit agencies, NFCU confirmed its prior report and further reported that Haynes still "owed $13,818 and was 61-90 days late on his account." Id. Implicit in this account is an allegation that NFCU inaccurately reported the magnitude of Haynes' debt and/or the duration of his delinquency.
Under the Fair Credit Reporting Act (the "FCRA"),
The foregoing conclusion is not dispositive of Count IV in its entirety because Haynes' allegations are also consistent with a claim that NFCU violated Section 1681s-2(b) of Title 15, which provides that once a furnisher of information receives notice of "a dispute with regard to the completeness or accuracy of any information provided" from a credit reporting agency, it must conduct an investigation into the completeness and confirm and ensure the accuracy of the information in dispute. 15 U.S.C. § 1681s-2(b)(1). See Am. Compl. at 2 ("Plaintiff wrote a letter on April 1, 2011 to three national credit agencies disputing the claim of NFCU. The agencies informed NFCU of this dispute within five days."); Pl.'s Opp'n at 4 ("[T]he plaintiff notified the reporting agencies, [] the reporting agencies notified the defendant, and, finally, [] the defendant did not correct the false report.").
As NFCU conceded in earlier submissions but conveniently omits from its Motion to Dismiss, the FCRA does provide a private right of action for violations under Section 1681s-2(b). See Def.'s Mem. of P. & A. in Supp. of its Mot. to Dismiss the Compl., ECF No. [2-1], at 12; see also SimmsParris, 652 F.3d at 358; Gorman, 584 F.3d at 1154; Wang v. Asset Acceptance, LLC, No. C 09-4797 SI, 2010 WL 4321565, at *3 (N.D.Cal. Nov. 1, 2010). If the furnisher of information negligently or willfully failed to meet the requirements of Section 1681s-2(b), a consumer may bring suit under Sections 1681n and 1681o. See 15 U.S.C. § 1681n (civil liability for willful noncompliance); id. § 1681o (civil liability for negligent noncompliance).
In sum, the Court shall GRANT NFCU's [13] Motion to Dismiss insofar as it seeks the dismissal of the component of Count IV that is based on an alleged violation of Section 1681s-2(a) of Title 15 and DENY NFCU's [13] Motion to Dismiss insofar as it seeks dismissal of the component of Count IV that is based on an alleged violation of Section 1681s-2(b) of Title 15.
In Count V, labeled "IRS Code Violations or Equity Relief," Haynes alleges that (1) he "did not receive an accurate or correct interest statement from [NFCU] for the tax year 2010" and (2) NFCU is "taking property" from him by "refus[ing] to credit any interest payments for 2011." Am. Compl. at 2-3. He contends that "[t]hese actions are a violation of the IRS code, or in the alternative actionable in equity." Id. at 2.
NFCU argues that there is no private right of action for violations of the pertinent provisions the Internal Revenue Code. See Def.'s Mem. at 10. Haynes admits that he is unable to point to a provision in the Internal Revenue Code or the accompanying regulations requiring a lender to furnish a borrower an interest statement and concedes that Count V should be dismissed to the extent it rests on alleged violations of the Internal Revenue Code and accompanying regulations. See Pl.'s Opp'n at 5-6. Based on this explicit concession, the Court shall GRANT NFCU's [13] Motion to Dismiss insofar as it seeks the dismissal of the component of Count V alleging violations of the Internal Revenue Code and accompanying regulations.
Although he concedes that he has no substantive right under the Internal Revenue Code and accompanying regulations, Haynes nonetheless suggests that he intends to pursue what he refers to as the "equity portion" of Count V. Pl.'s Opp'n at 6. However, a plaintiff seeking to proceed in equity still bears the burden of pleading a plausible cause of action. Travelers Ins. Co. v. 633 Third Assocs., 973 F.2d 82, 87 (2d Cir.1992). In other words, Haynes' mere invocation of the Court's equitable powers does not relieve him from his burden of showing that he has a substantive right to support his claim. Cf. E. Tenn. Natural Gas Co. v. Sage, 361 F.3d 808, 823 (4th Cir.), cert. denied, 543 U.S. 978, 125 S.Ct. 478, 160 L.Ed.2d 355 (2004).
Haynes has failed to discharge this burden. After conceding that he has no substantive right under the Internal Revenue Code and accompanying regulations, Haynes only claims that he "has been deprived of a property right under the Fifth Amendment of the Constitution because an interest statement is property which [he] has a right to use as a tax deduction to offset income in IRS Form 1040." Pl.'s Opp'n at 5. Even assuming, arguendo, that Haynes has identified a cognizable property interest to bring suit for a deprivation of property under the Fifth Amendment of the Constitution, "the party charged with the deprivation must be a person who may fairly be said to be a state actor." Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922, 937, 102 S.Ct. 2744, 73 L.Ed.2d 482 (1982). NFCU is a private entity and cannot fairly be described as a "state actor." As a result, Haynes cannot
To summarize, the Court shall GRANT NFCU's [13] Motion to Dismiss insofar as it seeks the dismissal of Count V in its entirety.
In Count VI, Haynes alleges that NFCU "published defamatory credit information with three (3) national credit agencies stating that [he] did not pay his mortgage according to a contract." Am. Compl. at 3. NFCU argues that this claim is preempted by the FCRA, which provides, in relevant part, that "no consumer may bring any action or proceeding in the nature of defamation ... with respect to the reporting of [credit] information ... except as to false information furnished with malice or willful intent to injure such consumer." 15 U.S.C. § 1681h(e).
The Court has considered the remaining arguments tendered by the parties and has concluded that they are without merit. Accordingly, and for the reasons set forth above, the Court shall GRANT-IN-PART and DENY-IN-PART NFCU's [13] Motion to Dismiss. Specifically, the Court shall GRANT NFCU's Motion to Dismiss with respect to: (a) the component of Count I (Breach of Contract) that is predicated on an allegation that NFCU breached the Promissory Note and Deed of Trust by failing to apply payments first to escrow accounts and then to interest and principal; (b) Count III (Intentional Infliction of Emotional Distress) in its entirety; (c) the component of Count IV (Intentional Damage to Credit) that is based on an alleged violation of Section 1681s-2(a) of Title 15; and (d) Count V (IRS Code Violations or Equity Relief) in its entirety. Meanwhile, the Court shall DENY NFCU's Motion to Dismiss with respect to: (a) the component of Count I (Breach of Contract) that is predicated on allegations that NFCU improperly returned payments that were sufficient to bring the loan current or shifted payments that were sufficient to bring the loan current into a "suspense account"; (b) Count II (Accounting and Mandatory Injunctive Relief) in its entirety; (c) the component of Count IV (Intentional Damage to Credit) that is based on an alleged violation of Section 1681s-2(b) of Title 15; and (d) Count VI (Defamation) in its entirety. An appropriate Order accompanies this Memorandum Opinion.
