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Gill v. PNC Bank, National Association

United States District Court, D. Maryland

February 11, 2015

PRUDENCE GILL, Plaintiff,
v.
PNC BANK, NATIONAL ASSOCIATION, SALLIE MAE, INC., and UNIVERSITY OF MARYLAND, Defendants.

MEMORANDUM OPINION

THEODORE D. CHUANG, District Judge.

This common-law fraud and negligence action is before the court on Defendant University of Maryland's Motion to Dismiss. ECF No. 31. Having reviewed the pleadings, the Court finds no hearing necessary. See Local Rule 105.6 (D. Md. 2014). For the following reasons, the Motion is GRANTED, and all claims against the University of Maryland are DISMISSED.

BACKGROUND

For purposes of a motion to dismiss, the Court accepts as true the well-pled, nonconclusory factual allegations in a plaintiff's complaint. See Kearns v. United States, 585 F.3d 187, 192 (4th Cir. 2009) (articulating this standard for Fed R. Civ. P. 12(b)(1) motions); Aziz v. Alcolac, Inc., 658 F.3d 388, 390 (4th Cir. 2011) (articulating this standard for Fed R. Civ. P. 12(b)(6) motions).

Plaintiff Prudence Gill ("Gill") is a former University of Maryland ("the University") student whose mother passed away in July 2012.[1] Am. Compl. ¶¶ 9, 22. While going through her mother's belongings, Gill discovered that her mother had taken out student loans, opened at least one hank account, and opened several credit card accounts, all in Gill's name and without Gill's knowledge. Id. ¶ 10. As relevant to this case, Gill discovered that her mother had taken out about $140.000 in student loans from Sallie Mae in Gill's name. Id. ¶ 19. Gill, who attended the University on a cheerleading scholarship, did not apply for those loans, did not sign the underlying loan applications, never presented any photo identification to the University or Sallie Mae in connection with these applications, and was never contacted about the applications by the University or Sallie Mae. Id. ¶¶ 24-26, 31-33. Sallie Mae approved the loans and disbursed the funds to the University. Id. ¶ 28. The University in turn disbursed the funds to Gill's mother. Id. Gill never received any portion of the $140, 000 in loan money. Id. ¶ 30. Instead. Gill's mother deposited the loan proceeds into a bank account at PNC Bank that she opened in Gill's name. Id. ¶ 13, 27. Gill learned of the account only after her mother's death. Id. ¶ 13. Gill did not sign any documents authorizing the opening of the account, and PNC Bank opened the account without ever asking Gill's mother for photo identification or otherwise verifying her identity. Id. ¶¶ 14-18.

At some point, the loans became delinquent, and Sallie Mae informed the credit reporting agencies of that delinquency. Id. ¶¶ 81, 83. Sallie Mae sent that negative information to the credit agencies without any prior notice to Gill. Id. ¶ 83. When Gill discovered the negative information, she filed a dispute with Sallie Mae about the delinquency reports, but Sallie Mae refused to retract or amend the information. Id. ¶ 81. Gill then filed a fraud report with Sallie Mae, but Sallie Mae refused to investigate her claim. ¶ 82. The continued delinquency information on Gill's credit report has had a negative impact on her credit score and her opportunity to obtain credit lines or lower interest rates on existing lines of credit. Id. ¶ 84.

On March 7, 2014, Gill filed a Complaint in this Court, which she amended on May 22, 2014.[2] ECF Nos. 1 & 19. Gill pleads six causes of action: (1) fraud against all defendants, (2) negligence against all defendants, (3) a civil conspiracy between PNC Bank and Sallie Mae, (4) a civil conspiracy between PNC Bank and the University, (5) violation of Uniform Commercial Code ("UCC") § 3-406 by all defendants, and (6) violation of the Fair Credit. Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq., by Sallie Mae. Gill asserts that this Court has subject-matter jurisdiction over this case under 28 U.S.C. § 1332, which, in relevant part, gives federal district courts original jurisdiction over civil actions between citizens of different states where the amount in controversy exceeds $75, 000. As to this basis. Gill asserts that she resides in Maryland, that PNC Bank is headquartered in Pennsylvania, that Sallie Mae is headquartered in Virginia, and that the University is located in Maryland. Am. Compl. ¶¶ 4-7. Gill also claims that the amount in controversy exceeds $75.000. Id. ¶ 2.

On June 13, 2014, the University filed a Motion to Dismiss and a Memorandum in Support of that Motion. ECF Nos. 31 & 31-1. In the Memorandum, the University contends that this Court lacks subject-matter jurisdiction over Gill's claims against the University, that the University is immune to suit under the Eleventh Amendment, and that Gill fails to state a claim against the University upon which relief can be granted. Mem. at 2. More specifically, as to subject-matter jurisdiction, the University explains that it is an instrumentality of the state of Maryland, and as a state entity "cannot be a party to a diversity action" brought by a citizen. Mem. at 4. The University acknowledges that this Court does have federal-question jurisdiction, see 28 U.S.C. § 1331, over Gill's FCRA claim against Sallie Mae, but argues that there is no supplemental jurisdiction pursuant to 28 U.S.C. § 1367 over Gill's non-federal claims because Sallie Mae's reporting of Gill's payment history on the student loans involves facts "far removed from" the claims about the origination of the loans. Mem, at 5-6. As to its Eleventh Amendment immunity, the University asserts that Maryland has waived its sovereign immunity to suit in a tort action only if the action is tiled in a Maryland state court. Mem. at 6.

On June 27, 2014, Sallie Mae[3] filed a Response to the University's Motion addressing only the University's subject-matter jurisdiction argument. ECF No. 39. Noting that this Court has federal-question jurisdiction over Gill's FCRA claim (alleged against only Sallie Mae), Sallie Mae contends that this Court can exercise supplemental jurisdiction over the non-federal claims pursuant to 28 U.S.C. § 1367(a) because they are part of the same "case or controversy" as the FCRA claim. Sallie Mae Resp. at 3.

On June 30, 2014, Gill filed her Response to the University's Motion, ECF No. 40, in which she insists that the University is "an indispensable party to this action" and reiterates Sallie Mae's argument that this Court has supplemental jurisdiction over her non-federal question claims because her "state claims are intertwined with the federal harm to [her]." Gill Resp. at 3, 4. As to the University's Eleventh Amendment immunity argument, Gill notes that in conversations with counsel from the Maryland Attorney General's Office about amending the complaint to add the University as a party, counsel indicated that the University was "open to... assist in the resolution of this matter." Id. at 3. Gill interprets those conversations as "representations that [the University] was not going to invoke immunity, " and concludes that the University therefore "should not be allowed" to raise that defense. Id. at 5.

On July 10. 2014, the University filed its Reply to Gill's Response in which it reiterates the arguments regarding subject-matter jurisdiction set forth in its Motion to Dismiss. ECF No. 42. As to Gill's contention that the University indicated it was not going to invoke immunity, the University first contests Gill's representation, then notes that a state's immunity can he abrogated only by federal or state statute, and therefore is not something that can be invoked at the University's discretion. Reply at 3 n.1.

On August 22, 2014, Sallie Mae filed its Answer to Gill's Complaint. ECF No. 48. Sallie Mae denies all of Gill's allegations and pleads multiple affirmative defenses,

DISCUSSION

I. Subject-Matter ...


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