Alston v. Branch Banking & Trust Co.

YVONNE R. ALSTON, Plaintiff, v. BRANCH BANKING & TRUST COMPANY, et al., Defendants.

Case No.: GJH-15-3100

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND Southern Division

August 26, 2016

MEMORANDUM OPINION

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 § 13-101 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 filed 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 Loc. R. 105.6 (D. Md.). For the reasons that follow, BB&T's 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. BACKGROUND²

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 ¶ 10. 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 Plaintiff's 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 Plaintiff's 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 Plaintiff's 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 Plaintiff's 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 file, 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 Plaintiff's 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 Plaintiff's 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 verily 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 17 letter to BB&T and asserted that, because BB&T had retainedher 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 Plaintiff's settlement offer and returning Plaintiff's check. Id. ¶ 35. Equifax never responded to Plaintiff's 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 Plaintiff's 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]...