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Ronnie Miller v. Bank of America

March 14, 2012

RONNIE MILLER,
PLAINTIFF,
v.
BANK OF AMERICA, NATIONAL ASSOCIATION;
BAC HOME LOANS SERVICING, L.P.; EXPERIAN SERVICES CORPORATION; EQUIFAX INC.; TRANSUNION CORPORATION; AND DOES 1 THROUGH 20, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Hon. Michael M. Anello United States District Judge

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS [Doc. No. 12]

On November 14, 2011, Defendant Bank of America, N.A., as successor by merger to BAC Home Loans Servicing, L.P., ("BAC" or "Defendant") filed a motion to dismiss Plaintiff Ronnie Miller's first amended complaint ("FAC") for failure to state a claim upon which relief can be granted. [Doc. No. 12-1.]*fn1 Plaintiff filed an opposition to Defendant's motion to dismiss [Doc. No. 17], and Defendant filed a reply [Doc. No. 19]. On January 13, 2012, the Court deemed the matter suitable for decision on the papers and without oral argument pursuant to Civil Local Rule 7.1(d)(1). [Doc. No. 20.] For the reasons set forth below, the Court GRANTS Defendant's motion to dismiss.

BACKGROUND

This action arises from events related to Plaintiff's short sale of real property located at 2436 Adirondack Row #2, San Diego, California 92139 (the "Property"), which resulted in Defendant BAC reporting inaccurate information on Plaintiff's credit report. [FAC, Doc. No. 1, Exh. A. ¶11.]*fn2

Plaintiff originally purchased the Property in December 1991 for $73,950 through lender United Savings Association of Texas. [Id.]*fn3 On or about December 8, 2005, Plaintiff refinanced the Property through First Magnus Financial Corporation, obtaining a loan in the amount of $240,000. [Id. ¶12.] Ultimately, Plaintiff decided to sell the Property and sold it for $118,437 via a short sale on November 18, 2008. [Id. ¶16.] Plaintiff alleges at the time of the short sale he was informed that this type of transaction would reflect less negatively on his credit report than a foreclosure. [Id. ¶17.] According to Plaintiff, he was also told that although the short sale would leave a negative mark on his credit report, he would be able to refinance his primary residence two years after the short sale. [Id.]

In or around February 2010, Plaintiff checked his credit report in anticipation of refinancing his primary residence later that year and learned for the first time that Defendant incorrectly reported the short sale of the Property as a foreclosure. [Id. ¶18.] Plaintiff contacted Defendant regarding the inaccuracy and received two letters in response, dated April 19, 2010 [Doc. No. 1, Exh. 1] and April 26, 2010 [Id. Exh. 2], each stating his request for credit correction was approved and formal requests were sent to the credit reporting agencies, Equifax Credit Information Services, Experian Services Corporation, TransUnion Corporation, and Innovis Data Solutions. [FAC ¶19.] Thereafter, Plaintiff called Defendant on June 7, July 2, July 14, July 16, July 17, July 19, and August 2, 2010, to check the status of the correction. [Id. ¶¶22, 25-26, 29.] During each call, Plaintiff was assured the request for a credit correction had been sent to the credit reporting agencies. [Id.]

On October 26, 2010, Plaintiff and his loan officer ran a credit report to determine Plaintiff's eligibility to refinance the loan on his primary residence. [Id. ¶32.] The report showed two 30-day late payments and a foreclosure on the Property. [Id. ¶33.] Plaintiff alleges these negative marks on his credit report made him ineligible to refinance his primary residence loan. [Id. ¶36.] Accordingly, Plaintiff notified Equifax, TransUnion, and Experian on November 9, 2010 about Defendant BAC's negative and inaccurate reporting. [Id. ¶40.] All three agencies replied that the credit report on the Property did not show any late payments. [Id. ¶¶41-43.] Plaintiff therefore alleges the credit reporting agencies are "fraudulently giving out misinformation to the lenders so as to allow the lenders to deny credit and/or to allow the lenders to offer higher interest rates for consumers." [Id. ¶45.] Plaintiff also asserts Defendant BAC continues to willfully and inaccurately report Plaintiff's credit history with respect to the Property. [Id. ¶44.]

Plaintiff filed this action in the Superior Court of California, San Diego Judicial District, Central Division on September 23, 2011. [Doc. No. 1 ¶1.] Plaintiff's FAC alleges seven causes of action for: (1) Violation of the Consumer Credit Reporting Agencies Act, Cal. Civ. Code §1785.25(a); (2) Violation of the Consumer Credit Reporting Agencies Act, Cal. Civ. Code §1785.14(b); (3) Violation of Consumer Credit Reporting Agencies Act, Cal. Civ. Code §1785.16; (4) Negligence; (5) Intentional infliction of emotional distress; (6) Negligent infliction of emotional distress; and (7) Violation of California's Unfair Competition Law, Cal. Bus. & Prof. Code §§17200 et seq. On November 7, 2011, Defendant Equifax Inc. removed the complaint to this Court based on federal question jurisdiction because Plaintiff's Unfair Competition Law claim is premised on violations of federal law. [Id.] On November 14, 2011, Defendant BAC filed a motion to dismiss Plaintiff's entire FAC under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted.

LEGAL STANDARD

A Rule 12(b)(6) motion to dismiss tests the sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal marks and citations omitted).

In reviewing a motion to dismiss under Rule 12(b)(6), the court must assume the truth of all factual allegations and must construe them in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-8 (9th Cir. 1996). Legal conclusions need not be taken as true merely because they are cast in the form of factual allegations. Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987); W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981). Similarly, "conclusory allegations of law and unwarranted inferences are not sufficient to defeat a motion to dismiss." Pareto v. Fed. Deposit Ins. Corp., 139 F.3d 696, 699 (9th Cir. 1998).

When a claim is dismissed for failure to state a claim, leave to amend should be granted "unless the court determines the allegation of other facts consistent with the challenged pleadings could not possibly cure the deficiency." DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992) (quoting Schrieber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986)). In other words, a court may grant a motion to dismiss and dismiss the claim with prejudice where amendment would be futile. Reddy v. Litton Indus., 912 F.2d 291, 296 (9th Cir. 1990).

DISCUSSION

I. CALIFORNIA'S UNFAIR ...


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