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Causay v. Wells Fargo Bank, N.A.

United States District Court, N.D. Illinois, Eastern Division

December 12, 2016

TAWANDA R. CAUSAY, Plaintiff,
v.
WELLS FARGO BANK, N.A. and EQUIFAX INFORMATION SERVICES, LLC, Defendants.

          MEMORANDUM OPINION AND ORDER

          John Robert Blakey, United States District Judge

         Plaintiff Tawanda R. Causay (“Plaintiff”) alleges that Defendant Wells Fargo Bank, N.A. (“Wells Fargo” or “Defendant”) violated the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681, et seq., by failing to correct false information it furnished to credit reporting agencies. Compl. [1]. Plaintiff also raises state law claims of defamation and breach of contract. Id.

         On September 19, 2016, Defendant filed a motion to dismiss Plaintiff's defamation claim (Count I) pursuant Federal Rule of Civil Procedure 12(b)(6), as well as a motion to strike a portion of Plaintiff's breach of contract claim (Count IV) pursuant to Rule 12(f), on the grounds that Plaintiff's state law claims are preempted by the FCRA. Def.'s Mot. Dismiss & Strike [20]. For the reasons explained below, Defendant's motion is granted as to Count I and denied as to Count IV.

         I. Background

         A. The Deed in Lieu of Foreclosure

         Plaintiff's Complaint sets forth the following relevant facts, which the Court accepts as true for the purposes of Defendant's motions. On April 12, 2007, Plaintiff executed a mortgage for her Chicago condominium. Compl. [1] ¶ 20. On September 10, 2010, the mortgage was assigned to Defendant. Id. ¶¶ 10, 21. On November 16, 2012, Plaintiff and Defendant entered into an agreement entitled “Deed in Lieu of Foreclosure” (“Deed in Lieu”), which, according to Plaintiff, consisted “of a set of promises.” Id. ¶¶ 22-23, Ex. 1. Specifically, in exchange for conveying her interest in the property to Defendant, Defendant agreed to pay Plaintiff $121, 181.40 and “forever forebear taking any action whatsoever to collect” against Plaintiff on the obligations “secured by the mortgage/deed of trust.” Id. ¶¶ 24, 26 (quoting Compl. [1] Ex. 1) (emphasis removed). As additional consideration, Wells Fargo waived “its right to bring an action” against Plaintiff “based on the promissory note secured by the mortgage” and agreed “not to name” Plaintiff “as a party to a foreclosure action.” Id. ¶ 25, Ex. 1.

         B. Wells Fargo's Collection Attempts and Credit Furnishing

         Plaintiff contends that Wells Fargo repeatedly breached the Deed in Lieu by attempting to collect on the “nonexistent mortgage” after she conveyed her interest in the property to the Bank. Id. ¶¶ 84-85. Plaintiff alleges that, over a three-year period, Wells Fargo attempted to collect on the loan by sending form collection letters and placing telephone calls to Plaintiff. Id. ¶¶ 30-33, 38.

         On multiple occasions during this time period, Plaintiff informed Defendant that the Deed in Lieu had been executed. Id. ¶ 34. For example, on November 23, 2014, Plaintiff informed Defendant that she no longer owned the property and requested that Defendant cease all communication. Id. ¶ 45. On December 5, 2014, Defendant sent Plaintiff a letter confirming her request. Id. ¶ 46, Ex. 2. Defendant's confirmation, however, also stated that Defendant was “in the process of moving forward with the foreclosure referral and process.” Id. ¶¶ 46-47, Ex. 2. Moreover, despite Plaintiff's request, Defendant continued to send collection letters and make collection calls. Id. ¶¶ 32-33, 56.

         In addition to contacting Plaintiff, Defendant also falsely reported to credit reporting agencies that Plaintiff's mortgage account was in default. Id. ¶¶ 29, 48. In April 2014, Plaintiff disputed the inaccuracy with Equifax Information Services, LLC (“Equifax”)-the other named defendant in this suit-and indicated that she was no longer liable for the mortgage account. Id. ¶ 35. Although Equifax informed Defendant of the dispute, Defendant continued to report to credit reporting agencies that the loan on Plaintiff's property was in default. Id. ¶¶ 36, 39. On February 3, 2015, Plaintiff's credit report still listed the non-existent Wells Fargo mortgage as delinquent. Id. ¶ 49.

         C. The Present Litigation

         On July 20, 2016, Plaintiff filed a five-count class action complaint in this Court. Compl. [1]. Plaintiff brings state law claims for defamation (Count I) and breach of contract (Count IV), [1] and asserts violations of two federal statutes, the FCRA (Counts II and III) and Telephone Consumer Protection Act, 47 U.S.C. § 227 (Count V). Id. Defendant's motions relate only to Plaintiff's state law claims.

         In Count I, Plaintiff alleges that, on multiple occasions, Defendant “published misrepresentations” about the status of her mortgage account to various credit reporting agencies, including TransUnion, Equifax, and Experian, and “through these entities to all of Plaintiff's potential lenders.” Id. ¶ 63. Plaintiff contends that these misrepresentations constituted “defamations” made “with legal malice and a willful intent to injure Plaintiff by placing derogatory credit information on her credit reports as punishment for what Defendant believed was a failure to pay.” Id. ¶ 64. In Count IV, Plaintiff alleges that Defendant breached the Deed in Lieu by continuing collection attempts against Plaintiff and incorrectly reporting to credit reporting agencies that her account was delinquent. Id. ¶¶ 84-86.

         Defendant argues that Plaintiff's state law claims are preempted by the FCRA to the extent they are based upon Defendant's credit furnishing activities. Def.'s Mem. Supp. Mot. Dismiss & Strike [21] 1. Accordingly, Defendant asserts that this Court should dismiss Plaintiff's defamation claim and strike the portion of Plaintiff's breach of contract claim that is based on Wells Fargo's alleged improper reporting. Id.

         II. ...


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