United States District Court, N.D. California
JACK A. DEMAY, et al., Plaintiffs,
WELLS FARGO HOME MORTGAGE, INC., Defendant.
ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND
RE: DKT., 27
HAYWOOD S. GILLIAM, JR. UNITED STATES DISTRICT JUDGE
before the Court is the motion to dismiss filed by Defendant
Wells Fargo Home Mortgage, Inc. Dkt. No. 27. For the reasons
articulated below, the Court GRANTS the motion.
Factual Background 
2006, Plaintiffs Jack and Nancy Demay obtained a mortgage
loan for their home located at 8985 W. Verde Way, in Las
Vegas, Nevada. Dkt. No. 28 (“RJN”), Ex
Plaintiffs then filed for Chapter 13 bankruptcy in November
2009. Dkt. No. 24 (“FAC”) ¶ 17. They
included the mortgage loan for their home on the bankruptcy
schedule. Id. ¶ 18. In lieu of postpetition
payments, Plaintiffs' final modified bankruptcy plan
provided for the “surrender [of] the Property to [Wells
Fargo] in full satisfaction of the debt . . . .”
Id. ¶ 21 (quotation omitted). Plaintiffs also
reserved the right to participate in the Nevada Foreclosure
Mediation Program. Id. ¶ 22. Plaintiffs allege
that they then “performed all obligations required to
carry out the effect of their intent to surrender” the
property to Wells Fargo. Id. ¶ 23. The
bankruptcy court confirmed Plaintiffs' final Chapter 13
plan and entered a discharge order in August 2015 that
discharged Plaintiffs' debts that were not otherwise
subject to statutory exemption. Id.; RJN, Ex. H. The
following month, in September 2015, Wells Fargo obtained
Plaintiffs' consumer credit reports from Equifax. FAC
¶ 29. According to Equifax, Wells Fargo requested the
reports for “Account Review” purposes.
August 17, 2016, Plaintiffs filed this putative class action
against Wells Fargo, alleging that it violated the Fair
Credit Reporting Act (“FCRA” or the
“Act”) by impermissibly obtaining their consumer
credit reports. Dkt. No. 1. Plaintiffs allege that Wells
Fargo impermissibly pulled their credit reports because
Plaintiffs' bankruptcy discharge terminated any
relationship with the bank. FAC ¶¶ 24, 31. On
October 17, 2016, Wells Fargo moved to dismiss the complaint
and strike the class allegations. Dkt. Nos. 17, 18. Rather
than oppose the motion, Plaintiffs amended the complaint.
Dkt. No. 24. Wells Fargo now moves to dismiss the amended
complaint. Dkt. No. 27.
Federal Rule of Civil Procedure 12(b)(6), a defendant may
move to dismiss a complaint for failing to state a claim upon
which relief can be granted. Fed.R.Civ.P. 12(b)(6). To
survive a Rule 12(b)(6) motion, a plaintiff must plead
“enough facts to state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). A plaintiff must
provide more than conclusory statements or “a formulaic
recitation of the elements of a cause of action” for
the court to find a facially plausible claim. Id. at
555. Rather, the complaint must present facts which allow
“the reasonable inference” of a defendant's
liability for the alleged misconduct. Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). In reviewing the
plausibility of a complaint, courts “accept factual
allegations in the complaint as true and construe the
pleadings in the light most favorable to the nonmoving
party.” Manzarek v. St. Paul Fire & Marine Ins.
Co., 519 F.3d 1025, 1031 (9th Cir. 2008).
FCRA aims to “ensure fair and accurate credit
reporting, promote efficiency in the banking system, and
protect consumer privacy.” Safeco Ins. Co. of Am.
v. Burr, 551 U.S. 47, 52 (2007). In service of these
goals, the Act imposes limitations on the use of consumer
credit reports. See generally 15 U.S.C. §§
1681b et seq. Specifically, the FCRA prohibits third
parties from accessing consumer credit reports without a
statutorily authorized (i.e., a
“permissible”) purpose. Id. §
1681b(f)(1). The FCRA provides a private right of action for
both willful and negligent violations. Id.
§§ 1681n, 1681o.
assert a claim against a party for requesting a consumer
credit report without a permissible purpose, a plaintiff must
establish: (1) the defendant obtained a consumer credit
report from a Consumer Reporting Agency, (2) without a
permissible purpose, and (3) the defendant acted willfully or
negligently in requesting the report. See VanDyke v. N
Leasing Sys., Inc., No. CIV.S. 07-1877 FCD GGH PS, 2009
WL 3320464, at *3 (E.D. Cal. 2009).
Wells Fargo does not dispute that it obtained Plaintiffs'
consumer credit report after their bankruptcy discharge, the
Court need only analyze whether Plaintiffs adequately allege
(1) that Wells Fargo acted without a permissible purpose, and
(2) that such action was willful or negligent. The Court
addresses each in turn.