Opinion
5:23-CV-629-M
03-28-2024
GEORGE SLOCUM, Plaintiff, v. BMW FINANCIAL SERVICES, Defendant.
MEMORANDUM AND RECOMMENDATION
ROBERT B. JONES, UNITED STATES MAGISTRATE JUDGE
This matter comes before the court on Defendant BMW Financial Services NA, LLC's motion to dismiss for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6). [DE-5]. Plaintiff, proceeding pro se, filed a response, and the matter is ripe for determination. For the reasons that follow, it is recommended that Defendant's motion to dismiss be allowed.
I. Background
Plaintiffs allegations are somewhat convoluted but, construing his pleading liberally as the court is required to do, it appears that Plaintiff applied for a $127,850 loan from BMW Financial Services in order to purchase a BMW 17 but was denied credit. Compl. [DE-1] at 2-3. Plaintiff alleges that under the Federal Reserve Act, Sections 1-2, his loan “application is the advancement for whatever amount I apply for as long as it is accompanied with a tender,” that access to credit is his right not a privilege, and that he cannot be denied credit based on his credit score under the Equal Credit Opportunity Act and the Truth in Lending Act. Id. at 2. Plaintiff asserts the court's jurisdiction is based on breach of contract and asks for $127,850 to be applied to his account for the BMW 17 and for health, life, and accident insurance to be included. Id. at 2-3. Along with his complaint, Plaintiff filed the following documents: a copy of the Federal Reserve Act § 16 ¶¶ 1-2, [DE-1-1]; several letters from BMW Financial Services in response to letters from Plaintiff regarding his credit application and subsequent requests to apply $127,850 to his account, [DE-1-2]; texts between a representative of BMW and Plaintiff regarding his credit application, [DE-1-3]; a letter from Plaintiff to Customer Correspondence asserting his right to credit, [DE-1-4]; three certified mail receipts, [DE-1-5]; three letters from Plaintiff directing BMW Financial Services to apply $127,850 to his account, [DE-1-6]; a document from the FDIC Consumer Compliance Examination Manual - March 2022, regarding the Equal Credit Opportunity Act, [DE-1-7]; an unexecuted document titled Durable Power of Attorney, [DE-1-8]; and a form Civil Cover Sheet indicating Plaintiff is asserting claims under the Equal Credit Opportunity Act, the Federal Reserve Act, and the Truth in Lending Act, [DE-1-9].
“[C]ourts must consider the complaint in its entirety, as well as other sources courts ordinarily examine when ruling on Rule 12(b)(6) motions to dismiss, in particular, documents incorporated into the complaint by reference, and matters of which a court may take judicial notice.” Tellabs, Inc. v. Makar Issues & Rights, Ltd., 551 U.S. 308, 322 (2007). The court “may also consider documents attached to the complaint, see Fed.R.Civ.P. 10(c), as well as those attached to the motion to dismiss, so long as they are integral to the complaint and authentic.” Phillips v. Pitt Cty. Mem'l Hosp., 572 F.3d 176, 180 (4th Cir. 2009); see also Phillips v. LCOIntern., Inc., 190 F.3d 609, 618 (4th Cir. 1999) (considering a statement attached to a motion to dismiss where “it was integral to and explicitly relied on in the complaint and because the plaintiffs do not challenge its authenticity.”). Exhibits that may be incorporated within the pleadings under Rule 10(c) include documents such as affidavits, letters, contracts, and loan documentation. See Eagle Nation v. Market Force, Inc., 180 F.Supp.2d 752, 754 (E.D. N.C. 2001).
Defendant filed a motion to dismiss, pursuant to Fed.R.Civ.P. 12(b)(6), for failure to state a claim. [DE-5], Plaintiff opposes dismissal of his complaint. [DE-11].
II. Discussion
Defendant contends that Plaintiff has failed to allege any violation of the Equal Credit Opportunity Act, the Federal Reserve Act, or the Truth in Lending Act. Def.'s Mem. [DE-6] at 48. Plaintiff asserts that the denial letters in response to his credit application did not specifically state the reason for denial, “the bank is to extend [him his] own credits,” and denying him access to his credit is a direct attack on the constitution. Pl.'s Resp. [DE-11],
A motion to dismiss under Rule 12(b)(6) tests the complaint's legal and factual sufficiency. See Ashcroft v. Iqbal, 556 U.S. 662, 677-80 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 554-63 (2007); Coleman v. Md. Court of Appeals, 626 F.3d 187, 190 (4th Cir. 2010), aff'd, 566 U.S. 30 (2012); Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008). To withstand a Rule 12(b)(6) motion, a pleading “must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678 (quotation omitted); see Twombly, 550 U.S. at 570; Giarratano, 521 F.3d at 302. In considering the motion, the court must construe the facts and reasonable inferences “in the light most favorable to the [nonmoving party].” Massey v. Ojaniit, 759 F.3d 343, 352 (4th Cir. 2014). A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief[.]” Fed.R.Civ.P. 8(a)(2). This is necessary “in order to ‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests[.]'” Twombly, 550 U.S. at 555 (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint need not contain detailed factual allegations, but the plaintiff must allege more than labels and conclusions. Id. A court need not accept as true a complaint's legal conclusions, “unwarranted inferences, unreasonable conclusions, or arguments.” Giarratano, 521 F.3d at 302; see Iqbal, 556 U.S. at 678-79. Rather, a plaintiffs allegations must “nudge[] [his] claims,” Twombly, 550 U.S. at 570, beyond the realm of “mere possibility” into “plausibility,” Iqbal, 556 U.S. at 678-79.
Pleadings drafted by a pro se litigant are held to a less stringent standard than those drafted by attorneys. See Haines v. Kerner, 404 U.S. 519, 520 (1972). The court is charged with liberally construing a pleading filed by a pro se litigant to allow for the development of a potentially meritorious claim. See id.', Estelle v. Gamble, 429 U.S. 97, 106 (1976); Noble v. Barnett, 24 F.3d 582, 587 n.6 (4th Cir. 1994). However, the principles requiring generous construction of pro se complaints are not without limits, and the district courts are not required “to conjure up questions never squarely presented to them.” Beaudett v. City of Hampton, 775 F.2d 1274, 1278 (4th Cir. 1985); see Laber v. Harvey, 438 F.3d 404, 413 n.3 (4th Cir. 2006) (enbanc) (holding that a “liberal interpretation” of a complaint does not warrant a “complete rewriting”); Brockv. Carroll, 107 F.3d 241,243 n.3 (4th Cir. 1997).
A. The Equal Credit Opportunity Act
Plaintiff alleges that Defendant's denial of his credit application violated the Equal Credit Opportunity Act (“ECOA”) because the ECOA does not provide for a denial of credit based on credit score. Compl. [DE-1] at 2.
The ECOA makes it unlawful “for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction” (1) based on race, color, religion, national origin, sex or marital status, or age; (2) based on the applicant's income being derived from a public assistance program; or (3) because the applicant in good faith exercised a right under the ECOA. 15 U.S.C. § 1691(a). Plaintiffs complaint and the accompanying documents contain no facts that would support a finding that he was denied credit for a purpose prohibited by the ECOA.
“To state an ECOA claim, a plaintiff must plead a prohibited reason for denying a credit application.” Wright v. SunTrust Bank, No. 1:08CV568 (JCC), 2008 WL 3106884, at *3 (E.D. Va. Aug. 4, 2008) (citing Arikat v. JP Morgan Chase & Co., 430 F.Supp.2d 1013, 1025 (N.D. Cal. 2006) (dismissing an ECOA claim where plaintiffs' complaint contained no factual allegations that they were discriminated against based on any of the reasons enumerated in 15 U.S.C. § 1691); Hanlin v. Ohio Builders & Remodelers, Inc., 196 F.Supp.2d 572, 580 (S.D. Ohio 2001) (dismissing ECOA claim where plaintiffs failed to allege that they engaged in any activity protected under ECOA or that an adverse action was taken on account of a protected activity)).
Plaintiff does not allege that he was denied credit based on a prohibited purpose such as his race or because he exercised a right under the ECOA. Furthermore, Plaintiffs theory that Defendant's denial of his credit application because of his credit score violated the ECOA is not supported by the statute itself or the case law. See Blevins v. Navy Fed. Credit Union, No. 2:23-CV-02674-KJM-CKD PS, 2024 WL 1219019, at *2 (E.D. Cal. Mar. 21, 2024) (finding “messages from the Navy Federal Credit Union indicating that his credit application was denied because plaintiff did not qualify for approval based on a low credit score” belied the existence of an ECOA claim); Evan v. Wells Fargo HomeMortg., Inc., No. 2:18-CV-01963-MMD-CWH, 2019 WL 1472102, at *3 (D. Nev. Apr. 3, 2019) (dismissing ECOA claim where “Plaintiffs' own allegations show that Wells Fargo denied the Mortgage Application because of Ms. Evan's credit score at the time of the Mortgage Application, not because of Plaintiffs' protected status.”). Accordingly, Plaintiff has failed to state an ECOA claim under 15 U.S.C. § 1691(a).
In response to the motion to dismiss, Plaintiff contends that Defendant's letters in response to his application for credit do not specifically state the reason for denial. Pl.'s Resp. [DE-11], The ECOA requires that creditors notify applicants concerning the creditor's approval of, counteroffer to, or adverse action taken on a credit application within thirty days of receiving the completed application. Id. § 1691(d). The ECOA specifies that this obligation may be satisfied by: “(A) providing statements of reasons in writing as a matter of course to applicants against whom adverse action is taken; or (B) giving written notification of adverse action which discloses (i) the applicant's right to a statement of reasons within thirty days after receipt by the creditor of a request made within sixty days after such notification, and (ii) the identity of the person or office from which such statement may be obtained.” Id. § 1691(d)(2).
Plaintiff attached to his complaint the letter from Defendant regarding the action taken on Plaintiff's credit application. [DE-1-2] at 3. The letter states that the application was not approved and that Plaintiff could obtain a statement of reasons why the application was not approved by requesting one in writing, as provided for in § 1691(d)(2)(B). Defendant was not required to provide specific reasons in the initial denial notice, and Defendant complied with the ECOA's notice obligations under § 1691 (d)(2)(B). Accordingly, Plaintiff has failed to state an ECOA claim under 15 U.S.C. § 1691(d).
B. The Federal Reserve Act
Plaintiff alleges that “[a]ccording to the federal reserve my application is the advancement for whatever amount I apply for as long as it is accompanied with a tender,” that he sent his tender on three separate occasions, and that there is no way he can be denied credit. Compl. [DE-1] at 2; [DE-11 ] (citing Federal Reserve Act § 16).
Plaintiff previously sought to assert in two other actions materially indistinguishable claims under the Federal Reserve Act § 16, and the court found that the Federal Reserve Act did not create a private cause of action under federal law. See Slocum v. Zen Realty, No. 5:23-CV-550-FL, 2024 WL 666329, at *1 (E.D. N.C. Feb. 16, 2024); Slocum v. Value Max Fin. Co. S-Corp., No. 5:23-CV-694-D, 2024 WL 556975, at *2 (E.D. N.C. Feb. 12, 2024). Accordingly, Plaintiff has failed to state a claim under the Federal Reserve Act.
C. The Truth in Lending Act
Plaintiff alleges that under the Truth in Lending Act (“TILA”), 15 U.S.C. § 1602, he is guaranteed a right to credit. Compl. [DE-1] at 2; [DE-11], TILA defines credit as “the right granted by a creditor to a debtor to defer payment of debt or to incur debt and defer its payment.” See Curtis v. Propel Prop. Tax Funding, LLC, 915 F.3d 234, 242 (4th Cir. 2019) (quoting 15 U.S.C. § 1602). Nothing in TILA guarantees an absolute right to credit, and Plaintiffs conclusory allegation to the contrary need not be accepted as true. See Giarratano, 521 F.3d at 302; see Iqbal, 556 U.S. at 678-79. Furthermore, the court previously found that Plaintiffs vague references to TILA and other federal statutes, like those made in this case, were insufficient to plausibly allege how the statutes create his cause of action. See Value Max, 2024 WL 556975, at *2. Accordingly, Plaintiff has failed to state a claim under TILA.
III. Conclusion
For the reasons stated herein, it is recommended that Defendant's motion to dismiss for failure to state a claim be allowed.
IT IS DIRECTED that a copy of this Memorandum and Recommendation be served on the parties. You shall have until April 11, 2024 to file written objections to the Memorandum and Recommendation. The presiding district judge must conduct his or her own review (that is, make a de novo determination) of those portions of the Memorandum and Recommendation to which objection is properly made and may accept, reject, or modify the determinations in the Memorandum and Recommendation; receive further evidence; or return the matter to the magistrate judge with instructions. See, e.g., 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b)(3); Local Civ. R. 1.1 (permitting modification of deadlines specified in local rules), 72.4(b), E.D. N.C.
If a party does not file written objections to the Memorandum and Recommendation by the foregoing deadline, the party will be giving up the right to review of the Memorandum and Recommendation by the presiding district judge as described above, and the presiding district judge may enter an order or judgment based on the Memorandum and Recommendation without such review. In addition, the party's failure to file written objections by the foregoing deadline will bar the party from appealing to the Court of Appeals from an order or judgment of the presiding district judge based on the Memorandum and Recommendation. See Wright v. Collins, 766 F.2d 841, 846-17 (4th Cir. 1985).