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Lovess v. Embrace Home Loans, Inc.

United States District Court, D. Maryland

October 20, 2017

CIMON LOVESS, Plaintiff
v.
EMBRACE HOME LOANS, INC., et al., Defendants.

          MEMORANDUM

          James K. Bredar Chief Judge

         Plaintiff Cimon Lovess, proceeding pro se, filed a complaint on May 31, 2017 against twenty-seven Defendants, mostly banks and mortgage lenders, in the Circuit Court of Baltimore County, alleging violations of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681b. (Compl., ECF No. 2.) Two of the Defendants, Discovery Financial Services and Discover Bank (the “Discover Defendants”), removed the case to this Court on August 4. (Notice of Removal, ECF No. 1.) The Discover Defendants then moved to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim on August 11, 2017. (ECF No. 9.) Defendants Bank of America, N.A. (“BANA”) and Paramount Equity Mortgage (“Paramount”) moved to dismiss on the same grounds on August 25 and September 28, respectively.[1] (ECF Nos. 14, 23.) Plaintiff was granted additional time to respond to the Discover Defendants' Motion (see ECF No. 20) but has not responded to the Discover Defendants' Motion, BANA's Motion, or Paramount's motion and therefore all three motions are ripe for decision. It is not necessary to have a hearing to resolve the matter. See Local Rule 105.6 (D. Md. 2016). Plaintiff's claim against the Discover Defendants is not barred by the doctrine of res judicata, but Plaintiff has failed to comply with the requirements of Federal Rule of Civil Procedure 8 and has therefore failed to state a claim upon which relief can be granted. Therefore, Discover Defendants' motion to dismiss, BANA's motion to dismiss, and Paramount's motion to dismiss will be granted by accompanying order.

         I. Background [2]

         In 2015, Plaintiff filed a complaint against nine defendants including Discover Products, Inc. (improperly named in the action as “Discover Financial Services, Inc.”)[3] in the Circuit Court for Baltimore County, alleging inter alia violations of the Fair Credit Reporting Act (“FCRA”). (Compl. in Lovess v. Discover Financial Servs., Inc., et al., Discover Defs.' Mot. Dismiss Ex. A, ECF No. 9-3.) The only claim in that case (“Lovess I”) against Discover Products was that it, along with several other companies, “knowingly and willfully used deception and false pretenses to obtain Plaintiff's consumer report, by falsely representing or certifying that the report was being obtained for a permissible purpose.” (Id. ¶ 29.) Somewhat more specifically, Discover Products allegedly “obtained Plaintiff's credit report on 12/05/2014 [but] Plaintiff did not receive a firm offer of credit from Discover and therefore it did not access Plaintiff's credit report for a permissible purpose.” (Id. ¶ 20.) That case was removed to this court on May 29, 2015, and on July 23, 2015 Plaintiff, by stipulation, dismissed her claims against Discover Products Inc. with prejudice, and the court approved that dismissal with prejudice by paperless order.[4] (See Notice of Removal in Cimon Lovess v. Discover Financial Servs. Inc., Civ. No. 15-1487 (D. Md.) (“Lovess I”), docketed in that matter as ECF No. 1; Stipulation of Dismissal of Pl.'s Claims Against Discover Prods., Inc. in Lovess I, docketed in that matter as ECF No. 46, hereinafter “Stipulation of Dismissal”; Paperless Order approving Stipulation of Dismissal in Lovess I, docketed in that matter as ECF No. 48.)

         The facts of the present case are similar, and few. In 2016 Plaintiff checked her[5]TransUnion and Experian credit reports. (Compl. ¶ 29.) On her Experian report, she noticed “several credit inquiries by entities that [she] had no credit account or business relationship” with. (Id. ¶ 35.) Among these “entities” were “Discover” and “BOA” (presumably referring to Bank of America) and “Paramount.” (Id. ¶ 36.) Plaintiff attempted to contact these organizations to determine why they had inquired as to her credit report but was unable to get an answer. (Id. ¶ 37-38.) Plaintiff asserts, “upon information and belief” that all of the companies that inquired into her credit report, including Discover Defendants, BANA, and Paramount “knew, or should have known, that they were not obtaining Plaintiff's report for a permissible purpose.” (Id. ¶ 43.) Essentially, Plaintiff appears to have arrived at this conclusion of impropriety through deduction: because “[n]one of the defendants offered the Plaintiff preapproved credit or employment” or were potential investors, or creditors of the Plaintiff, or “were completing a mortgage loan application” - all permissible purposes for inquiries under FCRA, see 15 U.S.C. § 1681b(a)(3) - they must have been accessing Plaintiff's credit report for an impermissible purpose. (See Id. ¶42.)

         Due to the Defendants' actions, Plaintiff “has suffered and will continue to suffer considerable harm, ” to wit: mental anguish and emotional distress resulting from the invasion of her privacy, the “risk of additional instances of identity theft, ” and the hassle of determining whether Defendants acted improperly when they accessed her credit report. (Id. ¶ 49.) As a result, Plaintiff requests $100, 000 in actual damages, as well as $200, 000 in punitive damages “for violations of the FCRA” and $30, 000 “or more” in “statutory damages.” (Id. ¶ 50.)

         II. Standing

         Discover Defendants raise the argument that Plaintiff lacks standing to litigate this claim (they bury this argument in a footnote on the final page of their memorandum). In order for a Plaintiff to have standing in Federal Court she “must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016). This question of standing in this case, like Spokeo, “primarily concerns injury in fact.” Id.

         In Spokeo, the plaintiff alleged that the defendant had provided incorrect information about the plaintiff to a third party, in violation of FCRA Section 1681e and 1681b. Id. at 1545. The Plaintiff did not, however, allege any actual injury; only that “Defendant [was] in violation of a statute that grants individuals a private right of action, ” and that plaintiff was “concerned that the inaccuracies in his report will affect his ability to obtain credit, employment, insurance, and the like.” Robins v. Spokeo, Inc., No. CV10-05306 ODW (AGRx), 2011 WL 597867 *1 (C.D. Cal. January 27, 2011) (quotations omitted) (alterations omitted) (emphasis in the original). The Supreme Court held that the plaintiff “cannot satisfy the demands of Article III by alleging a bare procedural violation [and] [a] violation of one of FCRA's procedural requirements may result in no harm.” Spokeo, 136 S.Ct. at 1550. Essentially, the defendant may have produced an inaccurate report about the plaintiff, in violation of FCRA, but plaintiff failed to allege that this inaccuracy caused him any harm, and therefore he did not have standing to sue the defendant. See id.

         This case is very close to Spokeo, but not quite there. Plaintiff is similarly alleging a procedural violation of FCRA and claiming that she is harmed by potential future consequences. But she has also alleged actual damages in the amount of $100, 000 stemming from emotional distress and mental anguish, and therefore this is not a “bare” procedural violation of the type at issue in Spokeo. To be sure, Plaintiff's conclusory allegations as to the amount of damage that she has suffered due to Defendants' allegedly improper credit inquiries are not strong indication of an injury in fact, as they are mostly based on emotional and mental distress and conjecture. But the Court finds that they are sufficient to establish Article III standing, even if the overall conclusory nature of Plaintiff's complaint is not sufficient to withstand the Defendants' motions to dismiss, as will be discussed below.

         III. Standard of Dismissal under Rule 12(b)(6)

         Federal Rule of Civil Procedure 8 requires that a complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” This rule does not require highly technical pleadings or “precise or magical words, ” Stevenson v. City of Seat Pleasant, Md., 743 F.3d 411, 418 (4th Cir. 2014), but it must be enough to put defendants on notice of the nature of the claim that is being brought against them, see Barbee v. Coble, 208 F.R.D. 549, 551 (M.D. N.C. 2002). Thus,

[r]ule 8(a)(2) still requires a “showing, ” rather than a blanket assertion, of entitlement to relief. Without some factual allegation in the complaint, it is hard to see how a claimant could satisfy the requirement of providing not only “fair notice” of the nature of the claim, but also “grounds” on which the claim rests.

Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 555 n.3 (2007). “[V]ague and conclusory allegations are insufficient to satisfy the notice pleading requirements of the Federal Rules of Civil Procedure.” MedImmune, Inc. v. ...


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