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Daniel and Emily Orozco v. Experian Information Solutions

July 6, 2012

DANIEL AND EMILY OROZCO, PLAINTIFFS,
v.
EXPERIAN INFORMATION SOLUTIONS, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge

MEMORANDUM AND ORDER

Before the Court is Defendant Seterus Inc.'s ("Seterus") Motion to Dismiss Plaintiffs' Complaint (ECF No. 12) ("MTD").*fn1

For the reasons that follow, Seterus's Motion to Dismiss is GRANTED with leave to amend. Additionally, the Court sua sponte DISMISSES, with leave to amend, Plaintiffs' claims against Defendants Experian Information Systems, Inc. ("Experian"), Equifax Information Services, LLC ("Equifax"), and Transunion, LLC ("Transunion") for failure to state a claim.

BACKGROUND*fn2

Plaintiffs David and Emily Orozco allege that in May of 2007, IBM Lender Business Process Services, Inc., predecessor in interest to Seterus, made a mortgage loan secured by a deed of trust (hereinafter the "Mortgage") to them to purchase certain real property located at 3214 Hopland Street, West Sacramento, California. (Compl. ¶ 15.) Thereafter, Seterus serviced the Mortgage. (Id. ¶ 16.)

In May of 2011, Seterus approved a short sale for the Property through a settlement agreement. (Id. ¶ 19.) Plaintiffs state that Seterus accepted a discounted payoff of $218,503.65 from the sale of the property through the settlement agreement and, in June 2011, the sale of the property was completed. (Id. ¶¶ 20-21.)

Thereafter, Plaintiffs allege that all three of the major credit reporting agencies; Defendants Experian, Equifax and Transunion (collectively the "CRAs"), have included inaccurate information from Plaintiffs' former creditor, Seterus, regarding the Mortgage. (Id. ¶ 22.)

Specifically, Plaintiffs contend that: (1) the account reflects a foreclosure status when the property was not foreclosed upon;

(2) the loan origination date is inaccurate; (3) the terms of the loan are inaccurate; and (4) the payment status is incorrect and reflects the account is past due. (Id. ¶ 23.) Plaintiffs do not provide any details regarding any of these contentions.

On November 7, 2011, Plaintiffs allegedly sent letters to all three CRAs notifying them of the erroneous information regarding their former Mortgage and requesting the agencies verify and delete the erroneous information from their file. (Id. at ¶ 24-25.) Plaintiffs state they also sent a letter to Seterus. (Id. ¶ 26.)

On December 15, 2011, Plaintiffs state they sent a letter to Seterus requesting the identity of all parties with an interest in the Mortgage and an accounting of all payments and credits, among other information, in order to verify the information Seterus was reporting to the CRAs. The letter stated that it was a "qualified written request" ("QWR") being made pursuant to the Real Estate Settlement Procedures Act ("RESPA") and the Truth in Lending Act ("TILA"). (Id. ¶ 30.)

On January 31, 2012, Seterus sent Plaintiffs a one-page letter confirming it received Plaintiffs' December 15, 2011, letter on January 10, 2012, to Plaintiff. In that letter, Seterus confirmed that the loan was settled on June 7, 2011, and declined to provide any further information regarding the loan or to submit a change to the credit reporting agencies.

Plaintiffs assert that, at the time they filed their Complaint in April 2012, they had not received any further response to their letter from Seterus.*fn3 (Id. ¶ 30.)

On April 12, 2012, Plaintiffs filed their Complaint in this Court on the basis of federal question jurisdiction. All Defendants have been served. Plaintiffs raise three causes of action; the first two are directed at the CRA defendants and are for (1) failure to establish or to follow reasonable procedures to assure accuracy in the preparation of Plaintiffs' credit report and credit files in violation of 15 U.S.C. ยง 1681e(b); and (2) failing to conduct a reinvestigation and correct Plaintiffs' credit files; failing to forward relevant information to the Creditors; failing to maintain reasonable procedures with which to filter and verify disputed information in Plaintiffs' credit file; and by relying upon verification from a source each CRA has reason to know is unreliable in violation of 15 ...


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