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Alston v. Branch Banking & Trust Co.

United States District Court, D. Maryland, Southern Division

August 26, 2016

YVONNE R. ALSTON, Plaintiff,


          GEORGE J HAZEL, United States District Judge

         In this action, which was removed to this Court from the Circuit Court for Prince George's County. Maryland. Plaintiff Yvonne R. Alston, who is ostensibly proceeding pro se, [1]alleges violations of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq., the Maryland Consumer Debt Collection Act ("MCDCA"). Md. Code Ann.. Com. Law § 14-201 et seq.. and the Maryland Consumer Protection Act ("MCPA"). Md. Code Ann.. Com. Law § 1 3-101 et seq. against Defendants Branch Banking and Trust Company ("BB&T"). Equifax Information Services. LLC ("Equifax"). Experian Information Solutions. Inc. ("Experian"). Trans Union, LLC ("Trans Union"), and Midland Credit Management. Inc. ("Midland") (collectively. "Defendants"). ECF No. 27. Multiple dispositive motions are currently pending before the Court, including two motions to dismiss Plaintiff's Amended Complaint tiled by Experian and BB&T. ECF Nos. 31 & 31. and a motion for judgment on the pleadings filed by TransUnion. ECF No. 44. No hearing is necessary to resolve these motions. See foe. R. 105.6 (D. Md.). For the reasons that follow. BB&Ts Motion to Dismiss. ECF No. 32. is granted, in part, and denied, in part: Experian's Motion to Dismiss. ECF No. 31. is granted: and Trans Union's Motion for Judgment on the Pleadings. ECF No. 49. is granted, in part, and denied, in part.

         I. BACKGROUND[2]

         According to the Amended Complaint. Plaintiff obtained a mortgage refinance loan on her primary residence in June 2013 from Virginia Heritage Bank. ECF No. 27 ¶¶ 8-9. The promissory note (the "'Note'") executed by Plaintiff in exchange for the loan indicated that Plaintiff would make her monthly payments on the loan on the first day of each month, and that if she failed to pay by that date. Plaintiff would be deemed to be in default. ECF No. 32-2 at 2-3. The Note nevertheless further provided that late charges would not be assessed so long as the holder of the Note received any monthly payment by the fifteenth day of each month, Id. at 3.

         At some point. BB&T acquired the loan from Virginia Heritage Bank. ECF No. 27 "110. On May 31. 2014. Plaintiff sent a letter to BB&T requesting a payoff statement and certified copy of the Note. Id. ¶ 11. On June 4. 2014. BB&T sent Plaintiff a payoff statement, a notice of transfer of servicing, and a copy of the Note. Id. ¶ 12. According to Plaintiff, the Note sent in that correspondence "was not certified as a true and accurate copy." Id. ¶ 13.

         On July 15. 2014. Plaintiff advised BB&T that the Note was not certified as a direct copy of the original Note, but Plaintiff did not receive any response to that correspondence, id. ¶¶ 14-15. On August 21. 2014, Plaintiff again complained that BB&T had not sent a certified copy of the Note, and she again requested a payoff statement, but this time asked that such statement not assess interest for the months of July through September 2014. Id. ¶ 16. On September 2.2014. BB&T sent Plaintiff a payoff statement, a certified copy of the Note, and a copy of a letter dated July 24, 2014. which, according to BB&T. was sent in response to Plaintiffs July 15. 2014 letter. Id. ¶ 17. The July 24, 2014 letter from BB&T enclosed a copy of the certified Note, which. unlike the previous copy she had received, was payable to Virginia Heritage Bank and did not include an allonge indorsed in blank or indorsed to BB&T.[3] Id. ¶¶ 19-20. Plaintiff alleges. therefore, that BB&T was not a holder of the certified Note. Id. ¶ 20.

         On December 26, 2014, Plaintiff advised BB&T that she had received two different versions of the Note and requested an opportunity to inspect the original copy. She further argued that BB&T should have ceased assessing interest on her loan after July 2014 due to BB&T's failure to verify that it was the holder of the Note, and that the payments she submitted for the months of July through December 2014 should have been applied to her principal balance only. Id. ¶ 22. Plaintiff also requested a payoff statement that would reflect these demands. Id. BB&T responded to Plaintiffs request on January 2. 2015. but the payoff statement sent included interest assessed for the months of July through December 2014. Id. ¶ 23.

         On December 29. 2014. Plaintiff sent a dispute letter to three consumer reporting agencies ("CRAs"). Equifax. Experian, and Trans Union in which she stated that the balance on her mortgage account was incorrect. According to Plaintiff, rather than a balance of $ 131.809. her report should show a balance of $129, 463.40. Id. ¶ 24. Plaintiff explained in the letter that the "cause of the error stems from BB&T's assessment of interest for the months [of] July | through] December 2014" and that "[n]o interest should have been assessed during that period because [Plaintiff] attempted to pay off the debt but BB&T failed to provide documentation required for [her] to complete the [payoff]." Id. ¶ 25. Plaintiff asked that the CRAs "investigate whether [Plaintiff] attempted to pay the debt in full and whether BB&T provided the necessary documentation" for her to complete the payoff. Id. Plaintiff alleges that "[u]pon information and belief, " Experian and Trans Union forwarded notice of Plaintiffs dispute to BB&T. but Equifax did not. Id. ¶¶ 26. 31.

         Upon receiving notice of her dispute from Experian and TransUnion. Plaintiff alleges that BB&T did not conduct an independent investigation, but rather verified that the information being reported to the CRAs was consistent with the information that BB&T had previously reported, and did not notate that Plaintiffs account was disputed. Id. ¶¶ 32-33. Experian responded to Plaintiff with the results of its investigation of Plaintiff s dispute, but not with a copy of Plaintiff s full consumer tile, on or about January 15. 2015. indicating that its reporting of Plaintiff s account was not changed as a result of Plaintiff s dispute. Id. ¶¶ 27. 67. Plaintiff alleges that Experian did not independently investigate her dispute, and rather "relied on BB&T's conclusions and parroted the results of BB&T"s purported investigation." Id.

         On January 9. 2015. Trans Union responded to Plaintiff with the result of its investigation of Plaintiff s dispute, and. like Experian. continued to report Plaintiffs mortgage balance as $131, 809. Id. ¶ 29. Plaintiff alleges that TransUnion, like Experian. did not independently investigate her dispute and relied on BB&T's purported investigation. Id. Additionally, included along with TransUnion's investigation results was a copy of Plaintiffs credit file, which revealed that Midland, a debt collection and information management company, id, ¶ 4. had obtained a copy of Plaintiff s consumer report from Trans Union on August 22. 2014. id. 30. Plaintiff alleges that she contacted Midland and spoke with an employee who "'acknowledge[d] that Midland did not have a reason to obtain her report." Id., Plaintiff contends that this action on the part of Midland was part of a broader scheme by Midland to pull individuals' consumer reports in order to identify potential creditors to solicit and offer its debt collection services, Id. According to Plaintiff. Trans Union is aware that Midland improperly pulls consumer reports for these purposes and yet has not established any procedures to verify that Midland is obtaining credit reports for permissible purposes. Id.

         On August 17. 2015. Plaintiff mailed a letter to BB&T offering to settle the dispute. Plaintiff offered to waive any legal claims she had against BB&T in exchange for BB&T agreeing to accept $10, 000 in full payment of the debt. Id. ¶ 34. Plaintiff indicated in her letter that the remaining outstanding debt was approximately $129, 000. but that if she were to retain an attorney and pursue her FCRA claim, her damages would exceed the outstanding balance on the Note. ECF No. 32-3 at 2. Plaintiff included with her letter a copy of a draft complaint setting forth her claims, as well as a check for $10, 000 to be drawn from the account of "Metropolitan Legal Team LLC." Id. at 3-8.

         Just over one week later, on August 30. 2015. Plaintiff submitted a dispute with Equifax indicating that her account balance was incorrect. ECF No. 27 ¶ 36. Plaintiff included with her dispute a copy of her August 1 7 letter to BB&T and asserted that, because BB&T had retained her check, it had accepted her payment. Id. But on or about September 4. 2015. Plaintiff received a letter from BB&T which was dated August 27, 2015. declining Plaintiffs settlement offer and returning Plaintiffs check. Id. ¶ 35. Equifax never responded to Plaintiffs August 30 dispute. Id. ¶ 37.

         On October 2, 2015. BB&T mailed Plaintiff a billing statement for a total amount of $1, 910.24. ECF No. 32-5 at 2. The statement indicated that Plaintiff owed a "past due" amount of $1, 005.12. but that $100 of partial payment were being held in suspense, [4] and that no late charges had been assessed. The statement further indicated that Plaintiffs regular monthly payment due was $1, 005.12. and noted that the "billing due date" was November 1. 2015. but that the "current due date" was October 1. 2015. Id. The total amount due was $1.910.24. and indicated that "[i]f payment is received after 11/16/15. $30.76 late fee will be charged." Id.

         Plaintiff interpreted the October 2 billing statement as indicating that she had missed a mortgage payment, which Plaintiff alleges was false. ECF No. 27 *■ 39. Billing records indicate that Plaintiff submitted a payment of $1, 005.12 on October 14. 2015. and that another regular payment in the same amount was made on November 13. 2015. ECF No. 32-4 at 2. Plaintiff alleges that she "was incensed" to learn that "she was being accused of missing a payment. And she feared BB&T was reporting her late to the [consumer) reporting agenc[ies]." ECF No. 27 * 40. Plaintiff then "went [through] all her records to see if she could make sense of why BB&T was claiming there was a past due payment." but she found nothing. Id. Plaintiff then sent a letter to BB&T requesting that it cease attempting to collect $1, 910.24 from her and that it correct its records. Id. Plaintiff further alleges that she "decided to verify whether BB&T was illegally attempting to collect any other undue payments or balances" and "[i]n researching her records she discovered that the outstanding principal balance [on her loan) was not $128, 558.15 as BB&T claimed" but rather that it was $121.643.91. Id. ¶ 41.

         Plaintiff sent dispute letters to the CRAs on November 4. 2015. in which she indicated that the correct balance on her loan was $121, 643.91 and asked that the bureaus investigate the balance and correctly report it. Id. 42. Plaintiff further requested that if the CRAs were not going to report the balance as $121, 643.91. that they include a "statement of dispute'" that would read: "The correct balance of this account is $121.643.91."' Id. Plaintiff alleges that TransUnion. Experian, and Equifax received her dispute on November 7. 9. and 10, 2015. respectively, but that none of them added Plaintiffs requested statement of dispute. Plaintiff further alleges that "[u]pon information and belief" each of the CRAs have furnished Plaintiffs credit report since receiving Plaintiffs November 4. 2015 dispute letter without including Plaintiffs statement of dispute. Id. ¶¶ 43-45.

         Plaintiff initiated this action in state court on September 8. 2015 alleging various claims against BB&T. Equifax. Experian. and TransUnion. ECF No. 2. Trans Union removed the case to this Court on October 13. 2015. ECF No. 1. After Trans Union and BB&T filed motions to dismiss. ECF Nos. 18 & 22, Plaintiff Hied an Amended Complaint on November 19. 2015. adding Midland as a defendant. ECF No. 27. In the Amended Complaint. Plaintiff alleges violations of the FCRA against all Defendants (Counts 1, II. III. IV & V). and violations of the MCDCA and MCPA against BB&T (Counts VI & VII).[5] On December 14. 201 5. the Court directed Plaintiff to submit a completed summons to serve Midland. ECF No. 34. but Plaintiff has not complied with that Order. Experian and BB&T have moved to dismiss Plaintiffs Amended Complaint ECF Nos. 31 & 32. Trans Union and Equifax filed Answers to the Amended Complaint. ECF Nos. 29 & 30, and Trans Union has filed the presently pending Motion for Judgment on the Pleadings, ECF No. 44. All of Defendants" motions are now ripe for review.[6]


         Experian and BB&T have moved to dismiss Plaintiffs Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted. Trans Union, having already filed an Answer to the Amended Complaint, ECF No. 29. has filed a Motion for Judgment on the Pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure. Pursuant to Rule 12(h)(2)(B). a defendant may assert that a complaint "fail[s] to state a claim upon which relief can be granted" in a Rule 12(c) motion. Rule 12(c) allows a party to move for judgment on the pleadings "[a]fter the pleadings are closed" so long as the motion is brought "early enough not to delay trial." Fed.R.Civ.P. 12(c). In considering a Rule 12(c) motion for failure to state a claim, courts apply "the same standard ... as for motions made pursuant to Rule 12(b)(6)." Burbach Broad. Co. of Delaware v. Elkins Radio Corp., 278 F.3d 401. 406 (4th Cir. 2002); see also Goldstein v. F.D.I.C. No. CIV.A. ELI 1-11 -1604. 2014 WL 69882, at *9 (D. Md. Jan. 8. 2014) ("[T]he standard of review with regard to a Rule 12(e) motion is the same as that for a motion under Rule 12(b)(6)."').

         When deciding a motion for failure to state a claim under Rule 12(b)(6) or 12(c). a court "must accept as true all of the factual allegations contained in the complaint." and "draw all reasonable inferences [from those facts] in favor of the plaintiff." E.I. du Pont de Nemows & Co. v. Kolon Indus., Inc., 637 F.3d 435. 440 (4th Cir. 2011) (citations and internal quotation marks omitted). Pursuant to Rule 8(a)(2) of 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)(2). But to survive a motion to dismiss invoking Rule 12(b)(6) or a motion for judgment on the pleadings under Rule 12(c). "a complaint must contain sufficient factual matter, accepted as true, "to slate a claim to relief that is plausible on its face."" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544. 570 (2007)). The factual allegations must be more than "labels and conclusions .... Factual allegations must be enough to raise a right to relief above the speculative level...."' Twombly, 550 U.S. at 555: see also 5 C. Wright & A. Miller. Federal Practice and Procedure § 1216. 235-36 (3d ed. 2004) ("[T]he pleading must contain something more . . . than ... a statement of facts that merely creates a suspicion [of] a legally cognizable right of action'"). A complaint will not survive Rule 12(b)(6) or Rule 12(c) review where it contains "naked assertion[s]"' devoid of "further factual enhancement." Twombly. 550 U.S. at ¶ 557. "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, 556 U.S. at 663. "But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not 'show[n]'-"that the pleader is entitled to relief.'" See Id. at 679 (citing Fed.R.Civ.P. 8(a)(2)). Additionally, although pleadings of self-represented litigants must be liberally construed, see Gordon v. Leeke, 574 F.2d 1147. 1151 (4th Cir. 1978). liberal construction does not give the court license to ignore a clear failure to allege facts that set forth a cognizable claim. See Wetter v. Dep't of Soc. Sen's. Jar City of Bait., 901 F.2d 387. 391 (4th Cir. 1990).


         A. ...

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