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Tusen v. M&T Bank

United States District Court, D. Minnesota

October 31, 2017

Gregg A. Tusen, Plaintiff,
M&T Bank, Trans Union, LLC, and FD Holdings, LLC Defendants.


          Paul A. Magnuson, United States District Court Judge

         This matter is before the Court on Defendant M&T Bank's (“M&T”) Motion to Dismiss. For the following reasons, the Motion is granted in part and denied in part.


         In November 2012, Plaintiff Gregg A. Tusen filed for Chapter 13 bankruptcy. (4th Am. Compl. (Docket No. 54) ¶ 11.)[1] His bankruptcy petition included real property with an estimated value of $65, 000, secured by a $103, 225 mortgage with Bank of America. (Id. ¶ 12.) His bankruptcy plan also included a $1, 560 delinquency owed to Bank of America. (Id. ¶ 13.) During the bankruptcy proceedings, Bank of America filed a Notice of Postpetition Mortgage Fees, Expenses, and Charges, seeking $150. (Id. ¶ 14.) On July 25, 2013, M&T notified Tusen by letter that it was now servicing his mortgage on behalf of Bank of America. (Id. ¶ 15.) There is no dispute that Tusen voluntarily made his mortgage payments during the bankruptcy proceedings. (Id. ¶ 18.) However, M&T reported “no data” on these payments to credit reporting agencies because of the bankruptcy stay. (Id. ¶ 26.) Tusen received his Chapter 13 discharge on December 22, 2015. (Id. ¶¶ 17-18.)

         On January 4, 2016, M&T sent Tusen a mortgage statement that sought $650 as a “recoverable corporate advance, ” in addition to his regular $688.85 mortgage payment. (Id. ¶ 19.) Tusen disputed the extra charge and requested additional information. (Id. ¶¶ 20, 22.) M&T clarified that $500 of the $650 “recoverable corporate advance” was for attorney's fees, and the remaining $150 was for a bankruptcy filing in connection with the Notice of Postpetition Mortgage Fees, Expenses, and Charges originally filed by Bank of America. (Id. ¶ 21, Ex. 2.) M&T then withdrew its $500 demand for attorney's fees because it concluded that the amount was not recoverable from Tusen. (Id. ¶ 24.) M&T continues to seek $150 related to Bank of America's notice, and although he disputes that he owes this amount, Tusen conceded at oral argument that his claims relate only to the $500 demand for attorney's fees. (Id. ¶¶ 21, 24.)

         After receiving the bankruptcy discharge, Tusen attempted to refinance his mortgage to lower his monthly mortgage payments. (Id. ¶ 25.) He requested a credit report from Defendant FD Holdings, LLC, which reported that he was delinquent on mortgage payments between August 2014 and February 2015. (Id. ¶ 28.) The next day, he requested a credit report from Defendant Trans Union, LLC, which reported “no data” during the same time period. (Id. ¶ 30.) It appears that both credit reporting agencies interpreted M&T report of “no data” as delinquent payments. (Id. ¶¶ 30-31.)

         Tusen then mailed disputes to FD Holdings and Trans Union, challenging the “no data” reporting. (Id. ¶ 32.) M&T responded to Tusen's disputes twice; the second time M&T stated that, after careful review, it had determined that Tusen's “account is reporting accurately in accordance with the bankruptcy laws and guidelines.” (Id. ¶¶ 33, 35.) About three months later, Tusen again mailed disputes to FD Holdings and Trans Union, which included bank statements showing on-time mortgage payments. (Id. ¶ 36.) Instead of updating his payment history to “ok” as requested, Trans Union updated Tusen's payment history to show “x, ” meaning no data, from September 2013 to December 2015. (Id. ¶ 38.) On September 13, 2016, Tusen received his credit report from a different credit reporting agency reporting that he was current on all mortgage payments, and he successfully refinanced his mortgage. (Id. ¶¶ 40-41.)

         Tusen's three-count Fourth Amended Complaint includes the following allegations against M&T. The first count alleges that M&T violated the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §§ 1692e, 1692f, by attempting to collect a fee to which M&T was not entitled and communicating that he was delinquent on mortgage payments to credit reporting agencies. (Id. ¶¶ 42-47.) The second count claims that M&T violated the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681n, 1681o, 1681s-2(b), by reporting misleading and inaccurate information to credit reporting agencies. (Id. ¶¶ 48-53.) The third count alleges that M&T's actions also violate the Minnesota Deceptive Trade Practices Act (“MDTPA”), Minn. Stat. § 325D.44. (Id. ¶¶ 62-65.) M&T moves for dismissal of the Fourth Amended Complaint pursuant to Fed.R.Civ.P. 12(b)(6).


         When evaluating a motion to dismiss under Rule 12(b)(6), the Court assumes the allegations in the Fourth Amended Complaint to be true and construes all reasonable inferences from those facts in the light most favorable to the non-moving party. Morton v. Becker, 793 F.2d 185, 187 (8th Cir. 1986). The Court need not accept as true wholly conclusory allegations, Hanten v. Sch. Dist. of Riverview Gardens, 183 F.3d 799, 805 (8th Cir. 1999), or legal conclusions that the plaintiff draws from the facts pled. Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir. 1990).

         A complaint must contain “enough facts to state a claim to relief that is plausible on its face” to survive a motion to dismiss. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Although a complaint need not contain “detailed factual allegations, ” it must contain facts with enough specificity “to raise a right to relief above the speculative level.” Id. at 555. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, ” will not pass muster under Twombly. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). This standard “calls for enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of [the claim].” Twombly, 550 U.S. at 556.

         A. FDCPA Claim

         The FDCPA prohibits debt collectors from using a “false, deceptive, or misleading representation” or “unfair or unconscionable means” in the collection of any debt. 15 U.S.C. §§ 1692e, 1692f. Tusen claims that M&T violated the FDCPA “by attempting to collect a fee from [him] that it was not entitled and by communicating with credit reporting agencies that [he] was delinquent paying his mortgage.” (4th Am. Compl. ¶ 47.) M&T moves to dismiss this claim, arguing that it is not a debt collector.

         A debt collector is any person (1) “who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts” or (2) “who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692a(6). A person who satisfies either definition triggers the statutory definition under the FDCPA. The Fourth Amended Complaint alleges only that M&T is a debt collector because “[a]t the time Bank of America transferred its mortgage servicing rights to M&T, [Tusen] ...

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