Logan v. Bank of Am., N.A.

JEANNETTE LOGAN, Plaintiff, v. BANK OF AMERICA, N.A., WILMINGTON SAVINGS FUND SOCIETY, FSB,d/b/a CHRISTIANA TRUST, not in its individual capacity,but solely as trustee for BCAT 2015-14TT, Defendants.

Civil Action No.: 19-cv-11483

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

March 16, 2020

MEMORANDUM AND ORDER

CASPER, J.

I. Introduction

Plaintiff Jeannette Logan ("Logan") has filed this lawsuit against Defendant Bank of America, N.A. ("Bank of America") alleging violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. ("FCRA") and the Massachusetts Credit Reporting Act, Mass. Gen. L. c. 93 §54A ("MCRA") and against Defendant Wilmington Savings Fund Society, FSB, doing business as Christiana Trust, not in its individual capacity, but solely as trustee for BCAT 2015-14TT ("Wilmington"), alleging violations of the Massachusetts Debt Collection Act, 940 CMR 7.00 et seq. ("MDCA"). D. 4 at ¶¶ 58-73. Bank of America and Wilmington have each moved to dismiss the claims against them pursuant to Fed. R. Civ. P. 12(b)(6). D. 10; D. 22. For the reasons stated below, the Court DENIES Bank of America's motion to dismiss, D. 10, as to Claim I and ALLOWS it as to Claim II and ALLOWS Wilmington's motion to dismiss, D. 22.

II. Standard of Review

On a motion to dismiss for failure to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P. 12(b)(6), the Court must determine if the facts alleged "plausibly narrate a claim for relief." Schatz v. Republican State Leadership Comm., 669 F.3d 50, 55 (1st Cir. 2012) (citation omitted). Reading the complaint "as a whole," the Court must conduct a two-step, context-specific inquiry. García-Catalán v. United States, 734 F.3d 100, 103 (1st Cir. 2013). First, the Court must perform a close reading of the claim to distinguish the factual allegations from the conclusory legal allegations contained therein. Id. Factual allegations must be accepted as true, while conclusory legal conclusions are not entitled credit. Id. Second, the Court must determine whether the factual allegations present a "reasonable inference that the defendant is liable for the conduct alleged." Haley v. City of Boston, 657 F.3d 39, 46 (1st Cir. 2011) (citation omitted). In sum, the complaint must provide sufficient factual allegations for the Court to find the claim "plausible on its face." García-Catalán, 734 F.3d at 103 (citation omitted).

The Court will dismiss a pleading that fails to include "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "To avoid dismissal, a complaint must provide 'a short and plain statement of the claim showing that the pleader is entitled to relief.'" García-Catalán, 734 F.3d at 102 (quoting Fed. R. Civ. P. 8(a)(2)). "A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555). "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Id. (quoting Twombly, 550 U.S. at 557) (alteration in original). "In determining whether a [pleading] crosses the plausibility threshold, 'the reviewing court [must] draw on its judicial experience and common sense.'" García-Catalán, 734 F.3d at 103 (alterationin original) (citation omitted). "This context-specific inquiry does not demand 'a high degree of factual specificity.'" Id. (citation omitted).

III. Factual Background

The allegations recounted here are taken from the amended complaint, D. 4, unless otherwise noted, and are accepted as true for the purposes of considering these motions. Logan purchased the residential property in Brockton, Massachusetts at issue here (the "Property") in 1998. D. 4 ¶ 14. Logan refinanced the mortgage on the Property with Fleet National Bank ("Fleet") in or around 2002. D. 4 ¶ 15. At that time, she obtained a first mortgage for $116,000 and a home equity line of credit for $90,000. Id. Bank of America merged with Fleet sometime between 2002 and 2006 and took over Logan's first mortgage and line of credit. D. 4 ¶ 16. On or around September 28, 2006, Bank of America recorded a discharge of the $90,000 line of credit security instrument in Plymouth County, Massachusetts. D. 4 ¶ 17.

Logan executed a new $125,000 line of credit with Bank of America on July 14, 2006, which was recorded on or around October 23, 2006. D. 4 ¶ 18. On or around March 5, 2008, Bank of America modified the security instrument to reflect an increase in Logan's home equity line of credit to $155,000. D. 4 ¶ 19. This modification was recorded on May 1, 2008. Id. On or around August 3, 2012, Logan received a letter from Bank of America stating that Logan's "Home Equity account" was approved for "participation in a principal forgiveness program offered as a result of the Department of Justice and State Attorneys General global settlement with major mortgage servicers" ("Discharge Letter"). D. 4 ¶ 20.

On or about September 16, 2015, Bank of America assigned "all beneficial interest under" the account to Wilmington and then filed an "Assignment of Open-end Mortgage" with the Plymouth County Registry of Deeds on or around October 27, 2015. D. 4 ¶ 21, 23. Logan alleges that "there is a contract and agency relationship" between Wilmington and Bank of America. D. 4¶ 22. On or around September 21, 2015, Bank of America recorded a "Discharge of Mortgage" for the "mortgage from Jeannette Logan . . . to [Bank of America] dated 07/14/2006 recorded on 10/23/2006 with Plymouth County Registry of Deeds." D. 4 ¶ 24. The "Discharge of Mortgage" also acknowledged "satisfaction" of the "[m]odification dated 03/05/2006." Id. As a result of the filing of the notice of the discharge of her 2006 mortgage with Bank of America, Logan ceased making further payments towards the Account. D. 4 ¶ 26. In support of its motion to dismiss, Bank of America claims that the discharge of the 2006 mortgage was "erroneously and inadvertently executed" and that it was "recorded by mistake." D. 11 at 3-4.

In or around December 2017, Logan began to look into obtaining a reverse mortgage, but the lender she consulted with informed her that she did not qualify because there was "negative reporting" for the Bank of America account (the "Account") indicating that the Account was past due, that there were late payments and that a substantial balance was owed. D. 4 ¶ 27. Logan mailed letters to the three credit reporting agencies ("CRAs")-Equifax Information Services, LLC ("Equifax"), Experian Information Solutions, Inc. ("Experian") and Trans Union, LLC ("TransUnion")-disputing the inaccurate reporting of the Account. D. 4 ¶ 29. Logan alleges that these disputes were forwarded to Bank of America. D. 4 ¶ 30. TransUnion and Experian responded to Logan's inquiries indicating that they would continue to report the Account as late, with TransUnion reporting a balance of zero and Experian listing an outstanding balance of $172,711 with $10,145 past due. D. 4 ¶¶ 31-32. Experian told Logan in a phone call that Experian had contacted Bank of America and that the bank had indicated that the account was being reported correctly. D. 4 ¶ 34.

On or around November 6, 2018, Logan sent letters to each of the CRAs enclosing the Discharge Letter from Bank of America and disputing their reporting of the Account as being lateand having an outstanding balance. D. 4 ¶ 38. TransUnion responded that it had removed the Account from Logan's credit report. D. 4 ¶ 39. Equifax and Experian both responded that the prior reporting was correct, continued to report the Account as late and with a past due balance and also reported that foreclosure proceedings had started. D. 4 ¶¶ 40, 41. According to Logan, foreclosure proceedings have never been initiated. D. 4 ¶ 42. Logan further alleges that Bank of America failed to investigate properly her disputes and that it continued to report inaccurate information to the CRAs. D. 4 ¶¶ 45-46. Logan alleges that this has caused her credit score to decrease, has substantially increased her outstanding debt and has prevented her from obtaining new credit or a new mortgage. D. 4 ¶ 48.

As assignee of the Account from Bank of America, Wilmington filed suit against Logan in the Massachusetts Land Court on or around July 11, 2018 seeking to collect the unpaid balance on the Account. D. 4 ¶¶ 49-50. Logan filed a crossclaim against Bank of America in that proceeding alleging violations of 940 C.M.R. § 7.00. D. 4 ¶ 51. The Land Court dismissed the crossclaim without prejudice, finding that it did not have subject matter jurisdiction over claims that were unrelated to title to the Property. D. 4 ¶ 52.

IV. Procedural History

Logan initiated this action against Bank of America on July 8, 2019, D. 1, and filed an amended complaint adding Wilmington as a defendant the next day, D. 4. Bank of America and Wilmington each have moved to dismiss. D. 10; D. 22. The Court heard the parties on the pending motions and took the matters under advisement. D. 27.

V. Discussion

A. Logan's FCRA and MCRA claims (Counts I and II)

1. The FCRA Claim

Logan asserts a claim against Bank of America for violations of the FCRA based upon allegations that Bank of America failed to investigate properly reports of inaccurate information on Logan's credit reports and furnished inaccurate information to the CRAs. See D. 4 ¶¶ 58-62. The FCRA requires that furnishers of information to CRAs, such as Bank of America in this context, "may not provide inaccurate information to consumer reporting agencies[] and also have specific duties in the event of a dispute over furnished information." Chiang v. Verizon New Eng., Inc., 595 F.3d 26, 35 (1st Cir. 2010) (internal citations omitted). Pursuant to the FCRA, when a consumer notifies a CRA of a dispute regarding their credit report and the CRA reports the dispute to the furnisher as...