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Baker v. JP Morgan Chase Bank N.A.

United States District Court, M.D. Tennessee, Nashville Division

January 30, 2017

SHERI L. BAKER
v.
JP MORGAN CHASE BANK, N.A.

          Honorable Aleta A. Trauger, District Judge.

          REPORT AND RECOMMENDATION

          BARBARA D. HOLMES United States Magistrate Judge.

         By Order entered February 2016 (Docket Entry No. 2), the Court referred this pro se action to the Magistrate Judge, pursuant to 28 U.S.C. § 636 and Rule 72 of the Federal Rules of Civil Procedure, for entry of a scheduling order, decision on all pretrial, nondispositive motions, and a report and recommendation on any dispositive motions.

         Presently pending before the Court is the motion to dismiss (Docket Entry No. 19) of Defendant JPMorgan Chase Bank, N.A. Plaintiff has filed a response in opposition (Docket Entry No. 22), as well as two motions for leave to amend her complaint. See Docket Entry Nos. 32 and 34. As set out below, the undersigned Magistrate Judge respectfully recommends that: (i) the motion to dismiss (Docket No. 19) be GRANTED IN PART AND DENIED IN PART; (ii) Plaintiff's first motion (Docket Entry No. 32) for leave to amend be DENIED; and, (iii) Plaintiff's second motion (Docket Entry No. 34) for leave to amend be GRANTED

         I. BACKGROUND

         Sheri L. Baker (“Plaintiff”) is a resident of Nashville, Tennessee. In 2012, she was a plaintiff in a prior federal lawsuit, Baker, et al. v. JP Morgan Chase Bank, N.A., et al., M.D. Tenn No. 3:12-1222 (“the 2012 Lawsuit”), in which she and her husband unsuccessfully sued four institutional defendants and one person, claiming that the defendants had conspired to violate Plaintiff's legal rights arising from Plaintiff's residential mortgage and had wrongfully sought to foreclose upon her home. The 2012 Lawsuit asserted claims under the Fair Debt Collection Practices Act, 42 U.S.C. §§ 1982 and 1983, the Fourteenth Amendment, principles of usury and contract law, and the Racketeer Influenced and Corrupt Organizations Act. On June 9, 2014, the 2012 Lawsuit was dismissed upon the motions to dismiss of the defendants in that action.[1] The dismissal of the lawsuit was later upheld upon appeal.[2]

         On February 1, 2016, Plaintiff filed the instant pro se action against JPMorgan Chase Bank, N.A. (“Chase” or “Defendant”), which had also been sued in the 2012 Lawsuit. Plaintiff seeks actual, statutory, and punitive damages based on alleged violation of the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq. (“FCRA”). Plaintiff asserts that she discovered in March 2015 that her credit report contains information about a delinquent mortgage account, Account # 465188098 ****, for which Chase reports that it is the creditor. See Complaint (Docket Entry No. 1) at ¶¶ 12-15. Plaintiff contends that this information is not accurate because: 1) Chase was not the creditor for the loan account, but was merely a “take-out investor;” and, 2) the loan has been paid in full because Plaintiff gifted the promissory note for the loan to the United States Secretary of Treasury pursuant to 31 U.S.C. § 3113(a). Id. at ¶¶ 16 and 20. Plaintiff asserts that she contacted the three major credit reporting agencies to dispute this information, id. at ¶¶ 22 and at Exhibit C, and subsequently received a letter from Equifax, one of the credit reporting agencies, stating that Chase had verified the correctness of the account balance. Id. at ¶ 23, and Exhibit D. Plaintiff also asserts that she contacted Chase directly about the purported inaccurate information but that Chase has failed to correct the information. Id. at ¶¶ 21 and 24. Based upon these allegations, Plaintiff contends that Chase violated 15 U.S.C. § 1681s-2(b) by failing to conduct a reasonable investigation into the accuracy of the disputed information in her credit report. Id. at ¶¶ 33 and 37. She further contends that Chase violated 15 U.S.C. § 1681e(b) and 15 U.S.C. § 1681i(a)(1). Id. at p. 8.

         II. MOTION TO DISMISS AND PLAINTIFFS RESPONSE

         In lieu of an answer, Chase filed the pending motion seeking dismissal of the action under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Chase first argues that this lawsuit is barred by res judicata because Plaintiff's FCRA claims are simply a rehashing of the issues involved in the 2012 Lawsuit. See Defendant's Memorandum in Support (Docket Entry No. 20) at 5-6. Chase next argues that neither 15 U.S.C. § 1681e(b) nor 15 U.S.C. § 1681i(a)(1) impose any duties upon furnishers of information to credit reporting agencies and that Plaintiff's allegations do not support a claim that Chase failed to meet the reasonable investigation duties required by 15 U.S.C. § 1681s-2(b). Id. at 7-10. Chase contends that Plaintiff's own allegations show that Chase verified the disputed information with the credit reporting agency and that what Plaintiff is essentially complaining about is not a violation of the FCRA by Chase, but Chase's refusal to give credence to Plaintiff's assertion that her mortgage loan has been paid in full and that Chase was never a creditor for the loan. Id.

         Plaintiff's response to the motion to dismiss is twofold. First, Plaintiff directly responds to the motion by, 1) disputing that res judicata bars her current FCRA claims, and, 2) arguing that her allegations are sufficient to support her FCRA claims. See Plaintiff's Response (Docket Entry No. 22). Chase has filed a reply to the response challenging Plaintiff's arguments, see Docket Entry No. 25, and Plaintiff has filed a sur-reply. See Docket Entry No. 30. Second, Plaintiff has filed motions for leave to amend her complaint. See Docket Entry Nos. 32 and 34. By the proposed amendments, Plaintiff seeks to amend her original complaint to revise the specific FCRA statutory provision under which she sues Chase. In her first proposed amended complaint, Plaintiff drops her previous FCRA claims for violations of 15 U.S.C. § 1681s-2(b), 15 U.S.C. § 1681e(b), and 15 U.S.C. § 1681i(a)(1), and assert only a claim for a violation of 15 U.S.C. § 1681s-2(8)(E)[3] based on allegations that Chase failed to report to Plaintiff the results of Chase's investigation into the accuracy of the disputed information. See Proposed First Amended Complaint (Docket Entry No. 32-1) at ¶¶ 23-28. In her second proposed amended complaint, Plaintiff maintains the claim set out in her first amended complaint and reasserts a claim under 15 U.S.C. § 1681s-2(b)(1). See Proposed Second Amended Complaint (Docket Entry No. 34-1) at ¶¶ 23-38.

         Chase argues that the proposed amendments are futile because, 1) the new claim for a violation of 15 U.S.C. § 1681s-2(a)(8)(E) is not a legally cognizable claim, and 2) the reasserted claim under 15 U.S.C. § 1681s-2(b)(1) is unsupported by factual allegations that are sufficient to support the claim. See Docket Entry Nos. 33 and 35. Plaintiff has filed a reply in support of her proposed second amended complaint. See Docket Entry No. 36.

         III. STANDARDS OF REVIEW

         For purposes of a motion to dismiss, the Court must take all the factual allegations in the complaint as true. Ashcroft v. Iqbal, 556 U.S. 662, 677, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face. Id. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Id. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief. Id. at 679. A legal conclusion couched as a factual allegation need not be accepted as true on a motion to dismiss, nor are recitations of the elements of a cause of action sufficient. Fritz v. Charter Township of Comstock, 592 F.3d 718, 722 (6th Cir. 2010).

         Plaintiff's motions for leave to amend were filed outside the time that would have permitted her to amend her complaint as a matter of course under Rule 15(a)(1) of the Federal Rules of Civil Procedure, and she has not obtained the opposing party's written consent for the proposed amendments. Accordingly, she must obtain leave of the Court to file an amendment to her complaint. See Rule 15(a)(2). Although Rule 15(a)(2) provides that leave to amend should be freely given “when justice so requires, ” leave to amend may be denied for an “apparent or declared reason, ” Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962), including the futility of the proposed amendment. Kottmyer v. Maas, 436 F.3d 684, 692 (6th Cir. 2006); Miller v. Calhoun Cnty., 408 F.3d 803, 817 (6th Cir. 2005); Thiokol ...


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