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Bell v. Loandepot.Com, LLC

United States District Court, D. Minnesota

August 14, 2017

Terry L. Bell, Plaintiff,
v., LLC, Defendant.

          John H. Goolsby, Esq. and Goolsby Law Office, LLC, 475 Cleveland Avenue N, Suite 212, St. Paul, MN 55104, counsel for plaintiff.

          Rory Mattson, Esq. and Hinshaw & Culbertson LLP, 333 South Seventh Street, Suite 2000, Minneapolis, MN 55402, counsel for defendant.


          David S. Doty, Judge United States District Court

         This matter is before the court upon the motion for judgment on the pleadings by defendant, LLC. Based on a review of the file, record, and proceedings herein, and for the following reasons, the court denies the motion.


         This credit dispute arises out of plaintiff Terry Bell's alleged loan application with loanDepot. Bell alleges that before August 21, 2013, he “applied for a mortgage loan from loanDepot.” Compl. ¶ 4. According to Bell, on August 21, 2013, loanDepot sent him an “Adverse Action Notification” denying the loan application because of poor credit performance with loanDepot. Id. ¶¶ 6-8. Bell denies having had a previous loan relationship with loanDepot, however, and contends that the information in the notification was false. Id. ¶¶ 5, 9-10. At the time, Bell was aware of unidentified “false information” on his credit report unrelated to loanDepot. Id. ¶ 11. He alleges that loan Depot's false explanation for the denial of his mortgage loan application prevented him from determining whether that “false information” was affecting his credit and, specifically, his ability to secure a loan from loanDepot. Id. ¶¶ 12-16. Bell claims that this uncertainty “compounded and exacerbated” his “distress and alarm” over his inability to remove the “false information” from his credit report. Id. ¶ 17. He also claims that he has suffered actual damages due to the “deprivation” of information and documentation.[1] Id. ¶ 18.

         On February 24, 2017, Bell commenced the instant action in Hennepin County District Court alleging violations of the Equal Credit Opportunity Act (ECOA) and the Minnesota Residential Mortgage Originator and Servicer Licensing Act (RMOSLA). loanDepot timely removed to this court and now moves for judgment on the pleadings.


         I. Standard of Review

         The same standard of review applies to motions under Federal Rules of Civil Procedure 12(c) and 12(b)(6). Ashley Cnty., Ark. v. Pfizer, Inc., 552 F.3d 659, 665 (8th Cir. 2009). Thus, to survive a motion for judgment on the pleadings, “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 594 (8th Cir. 2009) (citation and internal quotation marks omitted). “A claim has facial plausibility when the plaintiff [has pleaded] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Although a complaint need not contain detailed factual allegations, it must raise a right to relief above the speculative level. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). “[L]abels and conclusions or a formulaic recitation of the elements of a cause of action” are not sufficient to state a claim. Iqbal, 556 U.S. at 678 (citation and internal quotation marks omitted).

         II. ECOA Claims

         Counts I and II of Bell's complaint allege violations of the ECOA and corresponding Regulation B, which establish procedural requirements that creditors must follow in notifying applicants when certain action is taken on credit applications. See 15 U.S.C.§ 1691(d); 12 C.F.R. § 1002.9(a). Under the ECOA, “within thirty days ... after receipt of a completed application for credit, a creditor shall notify the applicant of its action on the application.” 15 U.S.C. § 1691(d)(1). If the applicant is denied credit, he is “entitled to a statement of reasons for such action from the creditor.” Id. § 1691(d)(2); see also 12 C.F.R. § 1002.9(a). “A statement of reasons meets the requirements of [the ECOA] only if it contains the specific reasons for the adverse action taken.” 15 U.S.C. § 1691(d)(3); see also 12 C.F.R. § 1002.9(a)(2)(i).

         loanDepot argues that the ECOA claims must be dismissed because Bell “never submitted any mortgage application documents to loanDepot in August 2013” and loanDepot was therefore not required to provide any notification to Bell. Def.'s Supp. Mem. at 1. But Bell alleges otherwise and also alleges that loanDepot failed to provide the specific reason for its denial, as required. See Compl. ¶¶ 4-10. The court cannot resolve such factual disputes on a Rule 12 motion. Bell has pleaded the requisite elements of his claim under ECOA and Regulation B.[2] As a result, the motion is denied as to those claims.

         III. ...

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