Kalar et al v. Bank of America Home Loans et al

MOTION to Dismiss for Failure to State a Claim

D.N.H.September 8, 2016

{K0649496.1} UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE ) KENNETH A. KALAR and JANET M. KALAR, ) Plaintiffs, ) ) v. ) Case No. 1:16-cv-00149-LM ) BANK OF AMERICA HOME LOANS and ) CARRINGTON MORTGAGE SERVICES, ) Defendants. ) ) MOTION OF DEFENDANTS CARRINGTON MORTGAGE SERVICES, LLC AND BANK OF AMERI CA, N.A. TO DISMISS PLAINTIFFS’ AMENDED COMPLAINT WITH PREJU DICE Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, Defendants Carrington Mortgage Services, LLC (“Carrington”) and Bank of America, N.A., in its own capacity and as successor by July 1, 2011 de jure merger with BAC Home Loans Servicing, LP (“Bank of America”) (both, collectively, “Defendants”),1 hereby move to dismiss the Amended Complaint of pr se Plaintiffs Kenneth A. Kalar and Janet M. Kalar (“Plaintiffs” or the “Kalars”) with prejudice. In support of dismissal, Defendants state as follows: 1. The Kalars fail to state a claim against Bank of America upon which relief may be granted as a matter of law. The Kalars’ one claim against Bank of America - for breach of an implied covenant of good faith and fair dealing, arising out of Bank of America’s transfer of servicing rights to a second mortgage on the Kalars’ residential property in 2011 - fails because, among other reasons, the challenged service transfe was expressly permitted by the applicable mortgage loan documents. As a matter of New Hampshire law, the implied covenant cannot be used to negate or infringe rights and obligations expressly permitted by 1 Misnamed as “Carrington Mortgage Services” and “Bank of America Home Loans”, respectively. Case 1:16-cv-00149-LM Document 16 Filed 09/08/16 Page 1 of 4 {K0649496.1} 2 contract, even assuming that the mortgage at issue constituted an enforceable contract between Plaintiffs and Bank of America and that Plaintiffs have standing to challenge the service transfer. 2. In addition, the Kalars allege no discretionary conduct by Bank of America which operated to defeat the Kalars’ reasonable expectations under, or deprive them of the benefit of, the applicable mortgage agreement. Plaintiffs’ implied covenant claim also fails because the Kalars received the full benefit of the mortgage agreement at issue at loan inception in the form of the mortgage loan they received, and acknowledged receiving, years prior to the challenged service transfer. 3. Plaintiffs further fail to plausibly allege in the Amended Complaint that the service transfer caused them any harm, nor do Plaintiffs appear to seek any relief from Bank of America in the Amended Complaint as a result of the service transfer. Altogether, the Kalars’ implied covenant claim against Bank of America must be dismis ed pursuant to Rule 12(b)(6). 4. Likewise, the Kalars’ one claim against Carrington - for “defamation” arising out of Carrington’s furnishing of allegedly inaccurate credit information regarding the Kalars to consumer reporting agencies - remains expressly preempt d by the federal Fair Credit Reporting Act as previously ruled by this Court, notwithstanding the new label Plaintiffs have given their claim. 5. In addition, even if the FCRA could permit a defamation claim asserting malice or willful intent to injure to survive dismissal, the Kalars’ defamation claim still fails because no such facts are plausibly alleged in the Amended Complaint. Even when liberally construed, the amended pleading confirms that the mortgage lien held by Carrington was released by it shortly after the Kalar’s Chapter 13 proceedings concluded, and that Carrington responded to Case 1:16-cv-00149-LM Document 16 Filed 09/08/16 Page 2 of 4 {K0649496.1} 3 the Kalars’ concerns and rectified the alleged inaccurate credit issue within, at most, four months after being initially contacted by Plaintiffs. The Kalars’ only new factual assertions in the Amended Complaint, consisting of allegations f rude and frustrating customer service interactions, cannot support a defamation claim because, even if taken as true, those interactions were not alleged to have been published to any third parties. 6. Because the Amended Complaint fails to state any claim for which relief can be granted, the Court should enter judgment of dismissal pursuant to Fed. R. Civ. P. 12(b)(6) with prejudice. In further support of dismissal, the Defendants rely upon their Memorandum of Law, filed simultaneously herewith. Given the dispositive nature of this motion, the Defendants have not sought Plaintiffs’ assent to this motion. See Local Rule 7.1(c). For the foregoing reasons, the Defendants respectfully request this Honorable Court to: A. Dismiss the Amended Complaint with prejudice in its entirety; and, B. Grant such other relief for Defendants as the Court may deem just and proper. Respectfully submitted, CARRINGTON MORTGAGE SERVICES, LLC, AND BANK OF AMERICA, N.A., By their attorneys, /s/ William P. Breen, Jr. William P. Breen, Jr., NH Bar ID # 16929 Christian B.W. Stephens, admitted pro hac vice ECKERT SEAMANS CHERIN & MELLOTT, LLC Two International Place, 16th Floor Boston, MA 02110 (617) 342-6800 (617) 342-6899 (facsimile) wbreen@eckertseamans.com cstephens@eckertseamans.com Dated: September 8, 2016 Case 1:16-cv-00149-LM Document 16 Filed 09/08/16 Page 3 of 4 {K0649496.1} 4 CERTIFICATE OF SERVICE I hereby certify that this document(s) filed through the ECF system will be sent electronically to the registered participants as identified on the Notice of Electronic Filing (NEF) and paper copies will be sent to those parties which are as non-registered participants, including specifically by U.S. mail, postage prepaid and Federal Express, to: Kenneth A. Kalar, pro se Janet M. Kalar, pro se 20 Dudley Drive Middleton, NH 03887 Date: September 8, 2016 /s/ William P. Breen, Jr. William P. Breen, Jr. Case 1:16-cv-00149-LM Document 16 Filed 09/08/16 Page 4 of 4 {K0648457.1} UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE ) KENNETH A. KALAR and JANET M. KALAR, ) Plaintiffs, ) ) v. ) Case No. 1:16-cv-00149-LM ) BANK OF AMERICA HOME LOANS and ) CARRINGTON MORTGAGE SERVICES, ) Defendants. ) ) MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS’ MOTION TO DISMISS PLAINTIFFS’ AMENDED COMPLAINT WITH PREJUDICE I. INTRODUCTION Defendants Carrington Mortgage Services, LLC (“Carrington”) and Bank of America, N.A., in its own capacity and as successor by July 1, 2011 de jure merger with BAC Home Loans Servicing, LP (“Bank of America”) (both, collectively, “Defendants”),1 respectfully submit this Memorandum of Law in support of their Motion to Dism s the Amended Complaint of pro se Plaintiffs Kenneth A. Kalar and Janet M. Kalar (“Plaintiffs” or the “Kalars”) with prejudice. The Kalars’ new implied covenant claim against Bank of America arising out of the transfer of servicing responsibilities for their mortgage is unsupported by any plausible factual allegations, applicable law, and the contract(s) upon which such claim purports to rest and must be dismissed. Likewise, the Kalars’ restyled claim against Carrington for defamation arising out of allegedly incorrect credit reporting by Carrington remains expr ssly preempted by the Fair Credit Reporting Act as previously ruled by this Court, notwithstanding the new label Plaintiffs have given their claim. Because the Amended Complaint fails to state any claim for which relief can be granted, the Court should enter judgment of dismissal pursuant to Fed.R. Civ. P. 12(b)(6) with prejudice. 1 Misnamed as “Carrington Mortgage Services” and “Bank of America Home Loans”, respectively. Case 1:16-cv-00149-LM Document 16-1 Filed 09/08/16 Page 1 of 21 {K0648457.1} 2 II. PROCEDURAL BACKGROUND On June 27, 2016, this Court entered an Order (the “Dismissal Order”) dismissing Plaintiffs’ original complaint against Bank of America and Carrington (the “First Complaint”) pursuant to Fed. R. Civ. P. 12(b)(6) without prejudice. See Am. Compl., at 12; Dismissal Order (Doc. 12).3 The Dismissal Order afforded Plaintiffs nearly two months, or “until August 26, 2016, to file and properly serve an amended complaint” that stated a plausible claim(s). Dismissal Order, at 8-9 (emphasis in original). On August 22, 2016, Plaintiffs filed the Amended Complaint. See Am. Compl. (Doc. 13). On August 25, 2016, Plaintiffs caused copies of the Amended Complaint and Summonses to be delivered to the office of counsel for Defendants, (Docs. 15, 15-1), but did not properly serve the Complaint.4 III. FACTUAL ALLEGATIONS The facts underlying the Amended Complaint mainly echo the facts asserted by Plaintiffs in the First Complaint, which were summarized in the Court’s Dismissal Order.5 In general, the Kalars’ 2 Plaintiffs’ amended pleading fails to comply with Fed. R. Civ. P. 10(b) (requiring, inter alia, that a party “state its claims or defenses in numbered paragraphs”). Because Plaintiffs did not use numbered paragr phs in their amended pleading, Defendants refer to specific pages of the Amended Complaint herein (e.g., “Am. Compl., at 2”). 3 Plaintiffs’ First Complaint (Doc. 1-1) was filed in state superior court and removed to this Court by Defendants on April 14, 2016 (Doc. 1). Defendants i corporate by reference herein the Dismissal Order in its entirety as it constitutes the law of this case. E.g., Naser Jewelers, Inc. v. City of Concord, N.H., 538 F.3d 17, 20 (1st Cir. 2008) (under the law of the case doctrine, “when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case.”) (quoting Ariz. v. Cal., 460 U.S. 605, 618 (1983)). 4 Plaintiffs did not request that Defendants waive service of process (Defendants did not), nor did Plaintiffs inquire whether counsel was authorized to accept service of process on behalf of both Defendants (counsel is not). Plaintiffs’ failure to properly serve the amended pleading alone warrants dismissal with prejudice pursuant to the express terms of the Dismissal Order. See Dismissal Order, at 9 (“Failure to file and properly serve an amended complaint within this time frame [on or before August 26, 2016] will result in the dismissal of the Kalar’s claims against defendants with prejudice.” (underscore added)). However, the Court need not reach the issue of the insufficiency of service of process (and, thus, lack of personal jurisdiction over the Defendants) because dismissal with prejudice is warranted for the other dispositive reasons set forth herein. A legal ruling with respect to the merits of Plaintiffs’ substantive claims will also promote judicial economy and best preserve the parties’ esources. 5 The Court may properly consider the First Complaint nd the numerous exhibits filed with the First Complaint for purposes of this motion. The Amended Complaint specifically refers to the First Complaint and also repeatedly refers to various exhibits to the First Complaint and/or facts reflected in such exhibits. See, e.g., Am. Compl., at 1 (specifically referencing the First Complaint), 2 (referencing Bankruptcy Court filings attached to the First Complaint), 3 (referencing an April 22, 2014 letter regarding the release of the second mortgage which was Case 1:16-cv-00149-LM Document 16-1 Filed 09/08/16 Page 2 of 21 {K0648457.1} 3 claims against both Defendants relate to a “second mortgage” (the “Second Mortgage”) on their residential property located in Middleton, New Hampshire that was ultimately avoided and discharged in bankruptcy. E.g., Am. Compl., at 1, 2. The Second Mortgage secured a loan of $57,500 provided by Countrywide Home Loans, Inc. (“Countrywide”) to the Kalars on May 4, 2006, on which same day the Second Mortgage was also execut d. See Second Mortgage, a true and accurate copy of which is attached as Exhibit A , at 1.6 The loan extended by Countrywide to the Kalars was also “evidenced by [a promissory] note dat May 04, 2006” (the “Note”), id., at 2, a true and accurate copy of which is attached hereto as Exhibit B .7 On October 13, 2010, the Kalars instituted a voluntary Chapter 13 Bankruptcy proceeding in the United States Bankruptcy Court for the District of New Hampshire, Am. Compl., at 2, which matter was docketed as In re Kenneth and Janet Kalar, Bk. No. 10-14397-JMD (Bankr. D.N.H. 2010).8 As summarized by this Court in the Dismissal Order, the relevant proceedings in that action occurred as follows: On January 18, 2011, the bankruptcy court granted the Kalars’ motion to deem the second mortgage unsecured. In the order granting the Kalars’ motion, the court stated that attached to the First Complaint), 4 (referencing allegations regarding subsequent loans that were asserted in the First Complaint and exhibits thereto), 5 (referencing a February 1, 2016 letter from CMS that was attached as an exhibit to the First Complaint). See Fed. R. Civ. P. 10(c). Indeed, familiarity with the allegations stated in the First Complaint is integral to even a general understanding of the facts and claims that Plaintiffs attempt to plead in their Amended Complaint, which is nearly incomprehensible wh n read in isolation. 6 The Second Mortgage was recorded on May 9, 2006 in the Strafford County Registry of Deeds, at Book 3370, Page 0132. See Ex. A. The Second Mortgage as r corded is a public record. In considering a motion under Rule 12(b)(6), the Court may consider the mortgage itself, documents referenced in or attached to the Complaint, matters of public record, and other matters susceptibl to judicial notice. See Wilson v. HSBC Mortg. Servs., Inc., 744 F.3d 1, 7 (1st Cir. 2014). The Court properly considered the Second Mortgage in its prior ruling in this action. See Dismissal Order, at 2 n.1. 7 The Second Mortgage referenced in the Amended Complaint, and upon which the claims in the Amended Complaint are dependent, itself repeatedly and explicitly references the Note. See, e.g., Second Mortgage, Ex. A, at ¶¶1, 2, 3, 7, 11, 13, 14, 18. Because the Note - th authenticity of which cannot be challenged by Plaintiffs, who themselves executed it - effectively merges into the pleadings, the Court may review it in deciding this motion to dismiss under Rule 12(b)(6). See Trans-Spec Truck Serv. v. Caterpillar Inc., 524 F.3d 315, 321 (1st Cir. 2008). 8 The Court should again take judicial notice of the bankruptcy docket and papers on file with the bankruptcy court, as it did in its prior ruling in this case. See Dismissal Order, at 2-3. The Bankruptcy Court records are matters of public record and contain facts not subject to reasonable dispute because they can be accurately and readily determined from a source whose accuracy cannot reasonably be questioned. See, e.g., Wilson, 744 F.3d at 1; Fed. R. Evid. 201(b). Case 1:16-cv-00149-LM Document 16-1 Filed 09/08/16 Page 3 of 21 {K0648457.1} 4 the second mortgage would be deemed void in its entirety upon the Kalars’ completion of their Chapter 13 plan and the court’s issuance of a discharge under 11 U.S.C. § 1328(a). *** The Kalars completed their Chapter 13 plan and were granted a discharge by the bankruptcy court on November 5, 2013. The bankruptcy case was closed on January 14, 2014. Dismissal Order, at 2-3. See also Am. Compl., at 12 (generally alleging such facts); First Compl., ¶¶1, 2 and Ex.’s 2-5 (generally alleging such facts nd attaching bankruptcy filings and orders). In the Amended Complaint, the Kalars articulate ondistinct theory of liability against each of the Defendants generally related to the discharge of the Second Mortgage in late 2013 following the Kalars’ completion of their Chapter 13 plan.9 Specifically, Plaintiffs now assert a claim for breach of the implied covenant of good faith and fair dealing against Bank of America, and a claim for defamation against Carrington. See, e.g., Am. Compl., at 2 (“Therefore, this complaint is two- fold: against Bank of Americ[a] Home Loans under Good Faith and Fair Dealing; and Carrington Mortgage Services under Defamation of Character/Libel.”), 4 (similarly noting the two separate theories of liability being asserted against the Defendants in the Amended Complaint). The separate factual allegations underlying both of the Kalars’ claims are summarized in turn below.10 9 The Kalars’ First Complaint asserted no specific theory of liability against either defendant. Dismsal Order, at 6; see also generally First Compl. 10 Certain other portions of the Amended Complaint also generally assert, without any supporting factual detail, that Defendants violated various laws. See Am. Compl., at 3-4, 4 (“Both companies have violated he FAIR CREDIT AND REPORTING ACT, section 623. Both companies have knowingly reported misleading and false information to the CRA’s regarding the Plaintiffs’ account. Both companies have also violated Federal Bankruptcy Codes §362 and §1301 ….” (capitalization in original)). The court must disregard these assertions for purposes of this motion to dismiss because they constitute barelegal conclusions unsupported by any plausible factual allegations. This Court has already rejected Plaintiffs’ attempt to assert a private right of action f r alleged violations of the FCRA, and ruled that the FCRA “preempts any state law claims [by Plaintiffs] based on such allegations.” See Dismissal Order, at 7 n.3 (and authorities cited). Case 1:16-cv-00149-LM Document 16-1 Filed 09/08/16 Page 4 of 21 {K0648457.1} 5 A. Plaintiffs’ Implied Covenant Claim Against Bank of America. In the Amended Complaint, the Kalars contend that Bank of America breached an implied covenant of good faith and fair dealing implicit in the Second Mortgage, which Plaintiffs allege was a “contract” between Plaintiffs and Bank of America, by selling the Second Mortgage to Carrington in September 2011. See Am. Compl., at 1 (“Bank of America … and Plaintiffs had a contract that was a second mortgage…. Bank of America … sold that account to Carrington Mortgage Services. This violated Good Faith and Fair Dealing ….”), 2 (same, also alleging date of “sale”). In addition, the Kalars quote an unnamed source and imply - but do not actually allege - that Bank of America failed to deal with the Kalars “‘… honestly, and in good faith, so as to not destroy the right of the other party or parties to receive the benefit of the contract’.” Id., at 2 (quoting unnamed source). The Amended Complaint contains no other factual alleg tions in support of the Kalars’ implied covenant claim against Bank of America. See g nerally id. The Kalars later allege they “never received” letters from Bank of America and Carrington regarding the transfer of the Second Mortgage. Id., at 2-3.11 Plaintiffs also cryptically assert that “[s]elling this account [the Second Mortgage] to Carrington Mortgage Services allowed Bank of America Home Loans to be compensated for their loss and destroy the Plaintiffs’ ability to secure credit post Chapter 13, at reasonable costs to the Plaintiffs.” Id., at 2. It is unclear how either of these factual allegations relate, if at all, to Plaintiffs’ implied covenant claim. The Amended Complaint also does not articulate any relief Plaintiffs seek from Bank of America as a result of the implied covenant claim. See id., at 5 11 Bank of America was the servicer for the Second Mortgage until October 1, 2011, on which date the Second Mortgage was service transferred from Bank of America to Carrington and Carrington became the servicer of the Second Mortgage. The two letters sent by Bank of America and Carrington in 2011 advising the Kalars of the service transfer of the Second Mortgage were produced with Defendants’ prior motion to dismiss papers. (Docs. 5-3, 8-1). The Court may review these letters because they are specifically referenced in the Amended Complaint. See Am. Compl., 2-3 (specifically identifying both letters and merely alleging, at 3, that Plaintiffs “never rceived” them). As was the case with the First Complaint, Plaintiffs appear to misapprehend Defendants’ roles as servicers with respect to the Second Mortgage. See, e.g., First Compl., ¶¶4 (referring to the 2011 service transfer as a transaction in which the Second Mortgage was “transferred/sold … to another lender”), 19 (same). Case 1:16-cv-00149-LM Document 16-1 Filed 09/08/16 Page 5 of 21 {K0648457.1} 6 (requesting only monetary damages stemming from factual allegations concerning credit reporting issues that are inapplicable to Bank of America).12 B. Plaintiffs’ Defamation Claim Against Carrington. In response to this Court’s prior ruling that no private right of action exists under the Fair Credit Reporting Act (“FCRA”) for inaccurate credit reporting, see Dismissal Order, at 7 & n.3 (and authorities cited), Plaintiffs admit that they have re-labelled their claim against Carrington, which is based solely upon allegations of inaccurate credit porting, as a claim for defamation. See, e.g., Am. Compl., at 4 (“According to this Honorable Court’s Order of June 27, 2016 false reporting may not give the Plaintiffs a right to ‘private action’ for the false reports (page 7 footnote 3), however, th character and financial damages it has caused the Plaintiffs is inexcusable and claimable under the “Defamation” law ….”), 4 (same assertion later on same page). Tellingly, elsewhere in the Amended Complaint, the Kalars specifically assert that Carrington “violated the FAIR CREDIT REPORTING ACT, section 623 [15 U.S.C. §1681s-2]” notwithstanding the Court’s prior ruling. Id., at 3-4, 4. Plaintiffs’ allegations against Carrington in the Amended Complaint are the same allegations concerning allegedly inaccurate credit reporting by Carrington following the discharge of the Second Mortgage as were alleged in the First Complaint and were dismissed by this Court. See, e.g., Am. Compl., at 2 (“Due to false information reported/stated to the Credit Reporting Agencies (CRA’s) by Carrington Mortgage Services, for 46 consecutive months, and the resulting financial harm the Plaintiffs are claiming Defamation of Character/Libel.”). Succinctly, Plaintiffs again allege that 12 The Kalars admitted in their prior opposition papers in this action that “… what [Bank of America] reported [to the credit reporting agencies] was correct. They were absolutely correct.” See Pls.’ Obj. to Mot. To Dismiss, (Doc. 6) at 3, ¶8(B). Plaintiffs plead no factual allegations in the Amended Complaint concer ing any alleged incorrect credit reporting by Bank of America to the extent they are attempting to make such a claim. Plaintiffs’ assertion that “[b]oth companies have violated the FAIR CREDIT AND REPORTING ACT, section 623. … [by] knowingly report[ing] misleading and false information to the CRA’s regarding the Plaintiff’s account” is a legal conclusion unsupported by any specific factual allegations against Bank of America. Am. Compl., at 3-4, 4. Any such claim by Plaintiffs is also preempted by the FCRA, as previously ruled by the Court and discus ed herein. Case 1:16-cv-00149-LM Document 16-1 Filed 09/08/16 Page 6 of 21 {K0648457.1} 7 Carrington discharged the Second Mortgage on April 22, 2014 following the conclusion of the Kalar’s Chapter 13 case, but that Carrington continued to falsely report to the credit reporting agencies that the Kalars were delinquent on the Second Mortgage thereafter. See id., at 3; see also id., at 4 (suggesting that Carrington falsely r ported credit information “to ‘get even’ with the Plaintiffs for the discharged account.”). Around October, 2015, “Plaintiff/Janet Kalar discovered this issue on her credit report”, and thereafter attempted to, and ultimately did, notify Defendants regarding the alleged error. See id. By letter dated February 1, 2016, approximately “four months after Plaintiff/Janet Kalar discovered the issue”, Carrington confirmed that “[t]he CRA’s [had been] notified” by Carrington “not only [to] correct the error[] but [also] to remove any mention of the report [concerning the Second Mortgage] from [the Kalars’] credit files.” See id., at 5.13 Plaintiffs allege that the inaccurate credit reporting caused them “loan denials, higher interest rates, humiliation with one lending institution” and other emotional and financial harm. See id., at 4, 5. Plaintiffs demand $230,000 from Carrington, generally reflecting the time spent by Janet Kalar attempting to address the credit reporting issue with Defendants directly. See id., at 5. 13 Carrington’s letter dated February 1, 2016 was attached as Exhibit 12 to the First Complaint and maybe properly reviewed as it is specifically referenced in the Amended Complaint. See Am. Compl., at 5. The February 1, 2016 letter indicates that, in response to the Kalars’ concerns, Carrington reviewed its records, provided written assurance that the Kalars were “no longer personally li ble for this account [the Second Mortgage]” and confirmation that Carrington’s account “has been closed as of … April 2014.” First Compl., Ex. 12. Carrington also advised the Kalars that it had notified the credit reporting agencies “to delete the tradeline repo ted under Carrington” and provided a copy of Carrington’s requ st to the credit agencies to the Kalars. Id. In the First Complaint, the Kalars conceded that by February 4, 2016, all references to Carrington and any reported payments or balance allegedly owed by the Kalars on the Second Mortgage had been deleted and removed from their crdit reports. First Compl., ¶11 (“That on or about February 4, 2016 … Experian not only corrected [Plaintiffs’ credit reports], they completely removed all reference to CARRINGTON MORTGAGE SERVICE [sic].” (capitalization in original)). A copy of Janet Kalar’s corrected credit report dated February 4, 2016 was also attached to the First Complaint. See First Compl., Ex. 15. In the Amended Complaint, the Kalars again appear to concede - as they must - that Carrington resolved the credit reporting issue in response to their concerns. See Am. Compl., at 5. Altogether, the Kalars’ written correspondence with Carrington (which was attached to the First Complaint, and to which the Kalars generally refer in their Amended Complaint) indicates that Carrington first received written notice from the Kalars of the alleged credit reporting issue at some point in January, 2016 and that the issue was completely resolved by February 1 or, at the latest, February 4, 2016. Case 1:16-cv-00149-LM Document 16-1 Filed 09/08/16 Page 7 of 21 {K0648457.1} 8 Altogether, the only new factual allegations in the Amended Complaint against Carrington consist of claims that Janet Kalar was kept on hold, ignored, and/or insulted by customer service representatives who Ms. Kalar contacted to discuss the credit reporting issue, which the Kalars contend occurred on a “nearly daily basis” for approximately four months. See id., at 3, 5.14 The Kalars do not allege that these allegedly rude comments or interactions were published by Carrington to any third party, or actully caused the Kalars any harm or damages. Cf. Am. Compl., at 2 (quoting unnamed source for lega proposition that an actionable defamation claim requires that false statements be “published to other parties”). IV. ARGUMENT Plaintiffs fail to establish a cognizable claim for recovery against Defendants on the two new claims asserted in the Amended Complaint and, thus, dismissal is warranted pursuant to Fed. R. Civ. P. 12(b)(6). 14 Though outside of the scope of review at the motion to dismiss stage, Carrington vehemently denies Plaintiffs’ allegations that Ms. Kalar was insulted, degraded or otherwise subjected to any “verbal abuse” at any time, let alone on a “daily basis”. Cf. Am. Compl., at 3, 5 (making such assertions). Tellingly, Plaintiffs’ new assertions regarding daily verbal abuse and other offensive conduct were entirely absent from - and, ieed conflict with - Plaintiffs’ contemporaneous writings as well as Plaintiffs’ prior filings in this action, all of which generally reflected Ms. Kalar’s alleged inability to contact ny representatives of the Defendants to discuss the credit reporting issue and/or her frustration with allegedly not being provided with any response by Defendants to her all ged inquiries. See, e.g., First Compl., Ex. 7 (letter authored by Plaintiffs on or around December 4, 2015 containing no allegations of verbal abuse and which states “[w]e got no information from [Bank of America in response to Plaintiffs’ inquiries] other than to contact this address, your dispute center.”); First Compl., Ex. 9 (letter authored by Plaintiffs dated January 4, 2016 to Carrington containing no allegations of verbal abuse and which only states that “[u]pon speaking with one of your Customer Service Reps. [sic] I was told that a dispute letter that I sent to your Anaheim (street address) never reached you, so now I’m faxing[.] The attached letter to your cohort, Bank of America, will explain my complaint.”); First Complaint, Ex. 10 (letter authored by Plaintiffs dated Janu ry 25, 2016 to Carrington containing no allegations of verbal abuse and which states that “[w]e are now approaching 60 days [from the alleged transmission of Plaintiffs’ letter of December 4, 2015 to Defendants] with no respone from either of you.” (emphasis added)); First Compl., ¶¶6-8 (generally alleging that telephone calls made by Plaintiffs to Defendants were unsuccessful and that pre-suit communications between Plaintiffs and Defendants almost exclusively occurred by way of letters and facsimiles sent by Plaintiffs); Pls.’ Opp. To Mot. To Dismis, (Doc. 6), at p. 2, ¶8 (asserting no allegations of verbal abuse and, rather, claiming that “[i]t took four (4) months of continuous telephone calls and two written requests to each of [Defendants’] companies, with the threat of legal action to even receive a response.” (emphasis added)). Case 1:16-cv-00149-LM Document 16-1 Filed 09/08/16 Page 8 of 21 {K0648457.1} 9 1. Standard of Review. Federal Rule of Civil Procedure 8(a)(2) requires that a complaint include a “short and plain statement of the claim showing that the pleader is entitled to relief.” A complaint must allege facts that, when taken as true, “raise a right to relief above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). This standard “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. A plaintiff’s factual allegations contained in a complaint must be specific enough to cross “the line from conceivable to plausible.” Id. at 570. “Aclaim 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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), citing Twombly, 550 U.S. at 556. “Where a complaint pleads facts that are ‘merely consistent with’ defendant’s liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.’” Id., quoting Twombly, 550 U.S. at 557. A complaint that states “threadbare recitals of the elements of a cause of action, supported by mere conclusory statements” does not survive dismissal. Id. at 678. A court may disregard “bald ssertions, unsupportable conclusions, and opprobrious epithets.” In re Citigroup, Inc., 535 F.3d 45, 52 (1st Cir. 2008). While a Court is obliged to construe pro se pleadings liberally, “pro se status does not insulate a party from complying with procedural and substantive law. Even under a liberal construction, the complaint must adequately allege the elements of a claim with the requisite supporting facts.” Martin v. Wells Fargo Bank, N.A., No. 15-cv-447-LM, 2016 WL 224103, at *1 (D.N.H. Jan. 19, 2016) (quoting Chiras v. Assoc. Credit Servs., Inc., Case No. 12-cv-10871- TSH, 2012 WL 3025093, at *1 n.1 (D.Mass. 2012) ((quoting Ahmed v. Rosenblatt, 118 F.3d 886, 890 (1st Cir. 1997) (internal citation and quotati n marks omitted))). Case 1:16-cv-00149-LM Document 16-1 Filed 09/08/16 Page 9 of 21 {K0648457.1} 10 2. Plaintiffs’ claim against Bank of America for breach of an implied covenant fails to state a plausible claim for relief and must be dismissed. The Kalars’ new claim that Bank of America breached the covenant of good faith and fair dealing implied in the Second Mortgage by conveying the Second Mortgage to Carrington in 2011 is entirely unsupported by any plausible factual allegtions and must be dismissed. Even assuming that the Second Mortgage constituted an enforceable contract between the Kalars and Bank of America15 and that the Kalars have standing to challenge the service transfer to Carrington in 2011,16 the Kalars fail to plead any conduct by Bank of America that deprived the Kalars of any benefit of, or destroyed any right of the Kalars under, the Second Mortgage. In the context of the Kalars’ residential loan agreement at issue here (comprised of both the Second M rtgage and the Note), the benefit of the “contract” to the Kalars was the agreement of the lender to lend them the sum of $57,500. See Second Mortgage, Ex. A, at 2; Note, Ex. B, at 1, ¶1. Plaintiffs do not, and cannot allege that the loan that formed the basis for the Second Mortgage was not extended to and received by them in 2006. To the contrary, the Kalars had received everything that they were due under the loan agreement in 2006 at loan inception in the form of the $57,500 mortgage loan which they specifically acknowledged receiving at that time. See id. Accordingly, Bank of America had no discretion in the 15 Plaintiffs’ allegation that the Second Mortgage was “a contract” between Bank of America and Plaintiffs is a legal conclusion masked as fact. See Am. Compl., at 1. The Second Mortgage, by its terms, named Plaintiffs as mortgagors/borrowers and MERS as mortgagee and nominee for Countrywide, the lender. See Second Mortgage, Ex. A, at 1. Plaintiffs’ claims in the Amended Complaint against Bank of America appear to relate to Bank of America’s capacity as servicer of the Second Mortgage, nd nowhere in the Amended Complaint do Plaintiffs allege that Bank of America was the holder of the Second Mortgage. “A mortgage servicer that is not a party to the mortgage contract owes no implied covenant to the mortgagor.” Mudge v. Bank of Am., 13-421-JD, 2015 WL 1387476, at *5 (D.N.H. 2015); accord Moore v. Mortg. Elec. Reg. Sys., Inc., 848 F.Supp.2d 107, 127 (D.N.H. 2012) (mortgage servicers who “were not themselves parties to the mortgage (or any of the other loan documents) … cannot be held liable for breach of any implied covenant included in that contract.” (and authorities cited)). 16 “New Hampshire law recognizes the general rule that [one] cannot interpose defects or objections [to an assignment] which merely render the assignment voidable at the election of the assignor or those standing in his shoes.” Woodstock Soapstone Co., Inc. v. Carleton, 133 N.H. 809, 817 (1991); see also Culhane v. Aurora Loan Servs. of Nebraska, 708 F.3d 282, 291 (1st Cir. 2013) (“[A] mortgagor does not have standing to challeng shortcomings in an assignment that render it merely voidable at the election of one party but otherwise effective to pass legal title.”). Case 1:16-cv-00149-LM Document 16-1 Filed 09/08/16 Page 10 of 21 {K0648457.1} 11 performance of the loan agreement17 in September, 2011 when the alleged sale occurred because the Kalars had already obtained the benefit of full performance by the lender years earlier. See Pruden v. CitiMortgage, Inc., No. 12-452-LM, 2014 WL 2142155, at *7 (D.N.H. 2014) (dismissing implied covenant claim on such grounds and noting that “[u]nder the note and mortgage, [the lender’s] only promised performance was to lend [the borrower/mortgagor] a sum of money, and the agreement does not appear to have conferred any discretion up[the lender/mortgagee] with regard to its performance of that obligation.”). In addition, because the Kalars had initiated a Chapter 13 bankruptcy proceeding in October, 2010, they were not making any payments related to the Second Mortgage either before or after the service transfer in 2011. See Am. Compl., 2. Thus, the service transfer caused Plaintiffs no financial harm, let aone the deprivation of any benefit of the Second Mortgage. As such, the Amended Complaint fails to tate a plausible claim for breach of the implied covenant under New Hampshire law. Even more fundamentally, it is settled that actions taken in compliance with the terms of a contract, including a mortgage, cannot serve as the basis for a claim for breach of an implied covenant. See, e.g., Dionne v. Fed. Nat’l Mortg. Ass’n, No. 15-056-LM, 2016 WL 3264344, at *12 (D.N.H. 2016) (defendant’s foreclosure in accordance with the terms of a mortgage cannot serve as the basis for a claim for breach of the implied covenant of good faith and fair dealing); Simmons v. Wells Fargo Bank, N.A., No. 14-333-LM, 2015 WL 4759441, at *5 (D.N.H. 2015) (same). Here, the Second Mortgage (and Note) expressly and repeatdly contemplates and permits - and does not 17 The New Hampshire Supreme Court has recognized thr e distinct categories of contract cases in which the implied covenant of good faith and fair dealing is implicated: “those dealing with standards of conduct in contract formation, with termination of at-will employment contracts, and with limits on discretion in contractual performance.” Centronics Corp. v. Genicom Corp., 132 N.H. 133, 143 (1989). Though the Amended Complaint does not address the issue, only the third category could possibly be implicated here. In such cases, th implied covenant restricts a party’s exercise of discretion in performing the contract when “the agreement ostensibly allow[s] to or confer[s] upon the defendant a degre of discretion in performance tantamount to a power to deprive the plaintiff of a substantial proportion of the agreement's value.” Id. at 144. Case 1:16-cv-00149-LM Document 16-1 Filed 09/08/16 Page 11 of 21 {K0648457.1} 12 prohibit - the sale, assignment, transfer or other conveyance of the Second Mortgage. See, e.g., Second Mortgage, Ex. A, at 1 (referencing Lender’s “nominee” and “Lender’s successors and assigns”), 2 (referencing the conveyance of the Second Mortgage to MERS, as nominee for Lender, and Lender’s successors and assigns, and to the succ s ors and assigns of MERS), ¶11 (providing that the successors and assigns of the Lender are bound y the terms of the Second Mortgage); see also Note, Ex. B, at ¶1 (acknowledging “I understand that the Lender may transfer this Note.”). Because the transfer of the servicing of the Second Mortgage which occurred in 2011 was expressly contemplated and permitted by the Second Mortgage, such event cannot give rise to a claim for breach of an implied covenant. Dionne, supra. See also Serra v. Quantum Servicing, Corp., 747 F.3d 37, 40 (1st Cir. 2014) (reaffirming principal that MERS, as mortgagee of record, possesses the ability to assign a mortgage and transfer legal title (and cases cited)). In the Amended Complaint, the Kalars fail to identify any contractual provision prohibiting the sale, transfer or assignment of the Second Mortgage. Plaintiffs fail to allege that any breach of contract even occurred. The Kalars cannot use their implied covenant claim to re-write the terms of the Second Mortgage to include restrictions not present in the parties’ agreement. See Mills v. Nashua Fed. Savings & Loan Ass’n, 121 N.H. 722, 726 (1981) (“… [P]arties generally are bound by the terms of an agreement freely and openly entered into, and courts cannot make better agreements than the parties themselves have entered into or rewrite contracts merely because they might operate harshly or inequitably.”) (discussing residential mortgage instrument). As was the case in their First Complaint, the Kalars simply “do not explain how the act of transferring service responsibilities on their mortgage, prior to the bankruptcy court’s discharge of the mortgage, could give rise to a cause of action.” Dismissal Order, at 6.18 Because Plaintiffs fail to 18 This Court rejected the Kalars’ prior suggestion hat the 2011 service transfer amounted to debt collection activity in violation of the bankruptcy automatic stay. See Dismissal Order, at 6 n.2. The Kalars also fail to Case 1:16-cv-00149-LM Document 16-1 Filed 09/08/16 Page 12 of 21 {K0648457.1} 13 set forth a plausible claim for breach of an implied covenant based on the 2011 service transfer, such claim must be dismissed pursuant to Fed. R. Civ. P. 12(b)(6). 2. Plaintiffs’ defamation claim against Carrington based on credit reporting activity is preempted by the FCRA, and must be dismissed. In the Amended Complaint, the Kalars assert the same llegations against Carrington as they did in their First Complaint, and which were alre dy held to be insufficient and were dismissed by this Court. Specifically, the Kalars gain seek to hold Carrington liable for furnishing allegedly inaccurate credit information t credit reporting agencies following the discharge of the Second Mortgage. See, e.g., Am. Co pl., at 2 (“Due to false information reported/stated to the Credit Reporting Agencies (CRA’s) by Carrington Mortgage Services, for 46 consecutive months, and the resulting financial harm the Plaintiffs are claiming Defamation of Character/Libel.”), 4 (asserting that Carrington “violated the FAIR CREDIT REPORTING ACT, section 623…. [by] knowingly report[ing] misleading and false information to the CRA’s regarding the Plaintiffs’ account.”). Indeed, the Kalars admit that they have simply re-labelled their claim against Carrington as a claim for defamation in response to this Court’s Dismissal Order. See, e.g., Am. Compl., at 4 (“According to this Honorable Court’s Order of June 27, 2016 false reporting may not give the Plaintiffs a right to ‘private action’ for the false reports (page 7 footnote 3), however, the character and financial damages it has caused the Plaintiffs is inexcusable and claimable under the ‘Defamation’ law ….”), 4. The Kalars’ new claim for defamation must be dismissed. Plaintiffs fail to assert a plausible defamation claim against Carrington for which relief can be granted because, as this articulate in the Amended Complaint how they were damaged in any way by the 2011 service transfer. Plaintiffs further fail to request any relief from Bank of America as a result of their implied covenant claim. See Am. Compl., at 5 (requesting monetary damages related only to alleged improper credit reporting). Cf. Fed. R. Civ. P. 8(a)(3) (a pleading must contain, inter alia, “a demand for the relief sought”). Case 1:16-cv-00149-LM Document 16-1 Filed 09/08/16 Page 13 of 21 {K0648457.1} 14 Court previously ruled, the Fair Credit Reporting Act “preempts any state law claims” based on allegations of “[i]nnacurate credit reporting activity”. See Dismissal Order, at 7 n.3 (citing 15 U.S.C. §1681t(b)(1)(F)).19 The federal Fair Credit Reporting Act (“FCRA”) broadly and completely preempts any purported state, common law or private right of action for alleged noncompliance with its credit reporting requirements, including the Kalars’ new state law claim for defamation. Section 1681t(b)(1)(F) of the FRCA - the specific preemption provision cited by this Court in the Dismissal Order, see Dismissal Order, at 7 n.3, and which is entitled “Relation to State laws” - broadly provides that: (b) No requirement or prohibition may be imposed un er the laws of any State- (1) with respect to any subject matter regulated un er- *** (F) section 1681s-2 of this title, relating to the responsibilities of persons who furnish information to consumer reporting agencies …. 15 U.S.C. §1681t(b)(1)(F).20 Section 1681s-2 of the FCRA, in turn, regulates the duty of a furnisher of information to report accurate information to a credit reporting agency and correct inaccurate information when 19 In relevant part, this Court ruled that: Inaccurate credit reporting activity is prohibited by the Fair Credit Reporting Act (“FCRA”), see 15 U.S.C. § 1681s-2(a), but it does not give rise to a private right of action, see Chiang v. Verizon New Eng. Ic., 595 F.3d 26, 35 (1st Cir. 2010); see also 15 U.S.C. § 1681s-2(c)-(d). The FCRA also preempts any state law claims based on those allegations. See 15 U.S.C. § 1681t(b)(1)(F). Dismissal Order, at 7 n.3. In addition, the Court stated that “[t]he complaint also alleges that Carrington improperly reported that the Kalars had missed payments on the second mortgage even after the mortgage was discharged through bankruptcy. It is unclear, however, how the act of inaccurately reporting missed payments to a credit agency, without more, can give rise to a private right of action.” Id., at 7. 20 Supreme Court precedent makes clear that this statutory preemption applies not only to positive, statutory laws of a state but also a state’s common law. See Cipollone v. Liggett Group, Inc., 505 U.S. 504, 521 (1992) (“The phrase ‘[n]o requirement or prohibition’ sweeps broadly and suggests no distinction between positive enactments and common law; to the contrary, those words easily encompass obligations that take the form of common-law rules.”). Case 1:16-cv-00149-LM Document 16-1 Filed 09/08/16 Page 14 of 21 {K0648457.1} 15 it is determined to exist through a direct consumer dispute (as was the case here) or otherwise. Specifically, among other provisions, Section 1681s-2 prohibits the “furnish[ing of] any information relating to a consumer to any consumer reporting agency [that] the person knows or has reasonable cause to believe … is inaccurate”, 15 U.S.C. §1681s-2(a)(1)(A); establishes a duty of information furnishers to promptly notify the consumer reporting agencies of any incorrect or inaccurate information, id., §1681s-2(a)(2); and establishes the general process by which a consumer can dispute the accuracy of information provided by an information furnisher directly with the information furnisher, and the information furnisher’s duties to respond to such a direct dispute by a consumer, see id., §1681s-2(a)(8) A). The FCRA also expressly provides that Section 1681s-2’s requirement that furnishers provide accurate information to consumer credit reporting agencies shall be enforced “exclusively . . . by the Federal agencies and officials and the State officials identified in section 1681s of this title.” 15 U.S.C. §1681s-2(c)-(d). As a whole, the FCRA reflects an effort by Congress to comprehensively regulate and promote fair and impartial consumer credit reporting in order to pr mote efficiency in the banking system through state and federal agency - not private - enforcement. See 15 U.S.C. §1681(a). Here, because the Kalars’ claim for defamation is solely based on allegations that inaccurate information was reported by Carrington to credit reporting agencies - the precise issue regulated under 15 U.S.C. §1681s-2 - such cause of action is expressly and completely preempted by Section 1681(t)(b)(1)(F) of the FCRA. Significantly, the Kalars twice plead in their Amended Complaint that their claim against Carrington arises from conduct that is regulated by 15 U.S.C. §1681s-2: specifically, the Kalars assert that Carrington “violated the FAIR CREDIT AND REPORTING ACT, section 623” - i.e., 15 U.S.C. §1681s-2 - by “knowingly report[ing] misleading and false information to the CRA’s regarding the Plaintiff’s Case 1:16-cv-00149-LM Document 16-1 Filed 09/08/16 Page 15 of 21 {K0648457.1} 16 account” Am. Compl., at 3-4, 4 (capitalization in original). Plaintiffs’ own admission and recognition in their amended pleading that their claim against Carrington arises from conduct regulated by 15 U.S.C. §1681s-2 confirms that their claim against Carrington - irrespective of the new label Plaintiffs have assigned it - is preempted under the FCRA and must be dismissed. This is both federal law, 15 U.S.C. §1681t(b)(1)(F), as well as the law of this case, see Dismissal Order, at 7 n.3. Accord, e.g., Henry v. Fleet Boston, No. 02-395-JD, 2003 WL 22401247, at *2 (D.N.H. 2003) (holding FCRA preempted state law claims for defamation and negligent infliction of emotional distress); Gibbs v. SLM Corp., 336 F.Supp.2d 1, 11 (D.Mass. 2004) (holding that a claim based on the provision of inaccurate information by a creditor to a credit reporting agency “must be dismissed as there is no private right of action”), aff’d, No. 05-1057, 2005 WL 5493113 (1st Cir. 2005). One earlier ruling within this district (upon whic Plaintiffs may have relied) suggested that a defamation claim may not be completely preempt d by the FCRA where a plaintiff plausibly alleges that a defendant furnished a false credit report “with malice or willful intent to injure [a] consumer,” based upon another FCRA preemption provision set forth in 15 U.S.C. §1681h(e).21 See Goldsmith v. HSW Fin. Recovery, Inc., 757 F.Supp.2d 95, 100 (2010) (Mem. Op.). Significantly, however, the Goldsmith decision neither addressed the broader, later- enacted preemption provision contained within 15 U.S.C §1681t(b)(1)(F) nor the interplay 21 In full, Section 1681h(e) of the FCRA provides: (e) Limitation of liability Except as provided in sections 1681n and 1681o of this ti le, no consumer may bring any action or proceeding in the nature of defamation, invasion of privacy, or negligence with respect to the reporting of information against any consumer reporting agency, an user of information, or any person who furnishes information to a consumer reporting agency, based on inf rmation disclosed pursuant to section 1681g, 1681h, or 1681m of this title, or based on information disclosed by a user of a consumer report to or f r a consumer against whom the user has taken adverse action, based in whole or in part on the report except as to false information furnished with malice or willfu intent to injure such consumer. Case 1:16-cv-00149-LM Document 16-1 Filed 09/08/16 Page 16 of 21 {K0648457.1} 17 between the FCRA’s two preemption provisions found in 15 U.S.C. §1681t(b)(1)(F) and §1681h(e) and the legal issue of complete preemption asserted by Defendants in this action. See id. (noting that the parties had not even cited §1681h(e) in their motion papers).22 No other judge in this district - nor the First Circuit - has ddressed the appropriate analysis and interpretation of the two FCRA preemption statutes. See Henry, supra, 2003 WL 22401247, at *2 (noting this fact). As an initial matter, however, Section 1681h(e) by its terms does not apply to this dispute. Section 1681h(e) requires plaintiffs to sh w that their action is “based on information disclosed pursuant to section 1681g, 1681h, or 1681m … or based on information disclosed by a user of a consumer report to or for a consumer against whom the user has taken adverse action, based in whole or in part on the report.” 15 U.S.C. §1681h(e). Sections 1681g and 1681h of the FCRA apply only to credit reporting agencies. See 15 U.S.C. §§1681g, 1681h. Carrington is not a credit reporting agency. See 15 U.S.C. §1681a(f). Section 1681m applies only to users of consumer reports. 15 U.S.C. §1681m. Carrington is not a user of consumer reports vis-à-vis the Kalars. The final §1681h(e) category for actions “based on information disclosed by a user of a consumer report to or for a consumer against whom the user has taken adverse action, based in whole or in part on the report” does not apply because Carrington neither used the Kalars’ consumer report(s) nor took adverse action based on inf rmation in the Kalars’ report or 22 Goldsmith (2010) also preceded the federal appellate cases cited herein that have analyzed both preem tion provisions and determined that 15 U.S.C. §1681t(b)(1)(F) completely preempts any state law claims notwithstanding allegations of malice or willful intent to injure. It is also factually distinguishable, see, e.g., Goldsmith, 757 F.Supp.2d at 97 (claim involving repeated telephone calls and threats by debt collector in addition to alleged false credit report) and, in any event, is not binding authority on this court. See, e.g., McGinley v. Houst n, 361 F.3d 1328, 1331 (11th Cir. 2004) (“The general rule is that a district judge’s decision neither binds another district judge nor binds him, although a judge ought to give great weight to his own prior decisions.”); In re Oxford Health Plans, Inc., 191 F.R.D. 369, 377 (S.D.N.Y. 2000) (“Principles of stare decisis do not require this Court to give any deference to decisions of another district judge.”); Mosel Vitelic Corp. v. Micron Tech., Inc., 162 F.Supp.2d 307, 311 (D. Del. 2000) (“[W]hile the opinion of one distr ct judge may be found to be persuasive, it is not binding on another district judge (even if that judge happens to sit in the same district).”). Case 1:16-cv-00149-LM Document 16-1 Filed 09/08/16 Page 17 of 21 {K0648457.1} 18 information disclosed by a user. 15 U.S.C. §1681h(e). Thus, the Kalars’ alleged defamation claim does not fall within the ambit of Section 168h(e). See Ross v. FDIC, 625 F.3d 808, 814 (4th Cir. 2010) (observing that Section 1681h(e)’s xceptions to preemption do not to apply to furnishers of information). Moreover, the two federal appellate courts that have squarely addressed the relationship between the FCRA’s two preemption provisions found in Section 1681t(b)(1)(F) and 1681h(e) have concluded that Section 1681(t)(b)(1)(F) completely preempts any state or common law cause of action, even where malicious or willful inte t to injure is pled and notwithstanding the statutory language of Section 1681h(e). See Macpherson v. JPMorgan Chase Bank, 665 F.3d 45, 47-48 (2d Cir. 2011) (per curium), cert. denied, 132 S.Ct. 2113, 182 L. Ed. 2d 870 (2012) (endorsing Seventh Circuit’s reasoning in Purcell and holding consumer’s state common law claims against bank for defamation and intentional i fliction of emotional distress by purported willful and malicious furnishing of false information to consumer credit reporting agency preempted by FCRA); Purcell v. Bank of Am., 659 F.3d 622, 624-25 (7th Cir. 2011).23 See also Dabney v. Total Relocation Servs., LLC, No. A-3794-11T1, 2013 WL 68727, at *5 (N.J. Super. Ct. App. Div. Jan. 8, 2013), cert. denied, 214 N.J. 113 (2013), cert. denied, 134 S.Ct. 825 (2013) (holding that Section 1681t(b)(1)(F) of the FCRA entirely preempted defamation 23 The Seventh Circuit reasoned in Purcell, 659 F.3d at 625: “… [W]e do not perceive any inconsistency between the two statutes. Section 1681h(e) preempts some state claims that could arise out of reports to credit agencies; § 1681t(b)(1)(F) preempts more of these claims. Section 1681h(e) does not create a right to recover for wilfully false reports; it just says that a particular paragraph does not preempt claims of that stripe. Section 1681h(e) was enacted in 1970. Twenty- six years later, in 1996, Congress added § 1681t(b)( ) F) to the United States Code. The same legislation also added § 1681s-2. The extra federal remedy in § 1681s-2 was accompanied by extra preemption in § 1681t(b)(1)(F), in order to implement the new plan under which reporting to credit agencies would be supervised by state and federal administrative agencies rather than judges. Reading the earlier statute, § 1681h(e), to defeat the later-enacted system in § 1681s-2 and § 1681t(b)(1)(F), would contradict fundamental norms of statutory interpretation. Case 1:16-cv-00149-LM Document 16-1 Filed 09/08/16 Page 18 of 21 {K0648457.1} 19 cause of action, and observing that “[l]ately… a sufficient crystallization of consensus has emerged in several federal courts of appeal that … § 1681t(b)(1)(F) trumps § 1681h(e).”); Himmelstein v. Comcast of the Dist., LLC, 931 F.Supp.2d 48 (D.D.C. 2013) (FCRA preempts all related state-law actions against furnishers of credit information, even willful violations of state common law). Because the FCRA preempts any state law cause of acti n asserted by the Kalars - as this Court has already ruled - their claim of defamation must be dismissed. 3. Even if were not preempted by the FCRA, the Kalrs’ defamation claim fails to state a plausible claim for relief and so must be dismissed. Finally, even if Section 1681h(e) of the FCRA could permit a defamation claim asserting malicious intent to survive dismissal, the Kalars’ defamation claim still fails because no such facts are alleged in the Amended Complaint and the facts asserted do not plausibly suggest that any action for defamation lies. The Amended Complaint does not allege any “malice” or “willful intent to injure” by Carrington (nor could Plaintiffs prove it existed). See generally Am. Compl. Moreover, even when liberally construed, the amended pleading confirms that the Second Mortgage lien was released by Carrington after the Kalar’s Chapter 13 proceedings concluded, see id., at 3, and that Carrington responded to the Kalars’ concerns and rectified the alleged inaccurate credit issue within, at most, “four months”24 after being initially contacted by Plaintiffs, see id., at 5. The only publication of false information by Carrington alleged in the Amended Complaint is its furnishing of alleged inaccurate credit information to the credit reporting agencies (something that the FCRA itself recognizes may and does occur). The Kalars’ new assertions regarding “rude” and “degrad[ing]” comments by customer service 24 But see supra note 12 (noting that prior documentation filed by Plaintiffs indicates that the credit issue was completely resolved by Carrington within one month of it receiving written correspondence from the Kalars). Case 1:16-cv-00149-LM Document 16-1 Filed 09/08/16 Page 19 of 21 {K0648457.1} 20 representatives, even if taken true, cannot support a defamation claim because the Kalars do not allege that any such communications were published to any third parties. See generally Am. Compl. The balance of the Amended Complaint consists of vague and conclusory allegations of nefarious intent and motivation by Carrington which are speculative, unsupported by any factual allegations, objectively illogical and do not “plausibly suggest an entitlement to relief.” Iqbal, 556 U.S. at 681; Dillon v. Select Portfolio Servicing, No. 07-70-SM, 2008 WL 227229, at *7 (D.N.H. 2008) (dismissing defamation claim related o the furnishing of derogatory statements to credit reporting agencies under FCRA where amended pleading did not allege that defendants acted with malice or intent to injure). The Amended Complaint simply does not permit the reasonable inference that Carrington acted with malice or intent injure in reporting any information regarding the Kalars and must be dismised. Fed. R. Civ. P. 12(b)(6). 4. Dismissal with prejudice is warranted. Finally, the Court should dismiss the Complaint with prejudice because it is clear from all of the Kalars’ numerous, various filings that no facts exist which could support a viable claim against either of the Defendants, all pertinent facts regarding the Second Mortgage having been alleged and, now, re-alleged. Plaintiffs have already been permitted an opportunity to re-plead their claims, and permitting any further re-pleading or amendment at this juncture would be futile, require and drain further precious judicial resources, and further unnecessarily increase Defendants’ costs and expenses. See Fed. R. Civ. P. 1 (civil rules should be construed, administered and employed to secure the just, speedy and inexpensive determination of every action). Case 1:16-cv-00149-LM Document 16-1 Filed 09/08/16 Page 20 of 21 {K0648457.1} 21 V. CONCLUSION WHEREFORE, for the foregoing reasons, Defendants respectfully request that this Honorable Court: A. Dismiss Plaintiffs’ Amended Complaint with prejudice in its entirety; and, B. Grant such other relief for Defendants as the Court deems just and proper. Respectfully submitted, CARRINGTON MORTGAGE SERVICES, LLC, AND BANK OF AMERICA, N.A., By their attorneys, /s/ William P. Breen, Jr. William P. Breen, Jr., NH Bar ID # 16929 Christian B.W. Stephens, admitted pro hac vice ECKERT SEAMANS CHERIN & MELLOTT, LLC Two International Place, 16th Floor Boston, MA 02110 (617) 342-6800 (617) 342-6899 (facsimile) wbreen@eckertseamans.com cstephens@eckertseamans.com Dated: September 8, 2016 CERTIFICATE OF SERVICE I hereby certify that this document(s) filed through the ECF system will be sent electronically to the registered participants as identified on the Notice of Electronic Filing (NEF) and paper copies will be sent to those parties which are as non-registered participants, including specifically by U.S. mail, postage prepaid and Federal Express, to: Kenneth A. Kalar, pro se Janet M. Kalar, pro se 20 Dudley Drive Middleton, NH 03887 Date: September 8, 2016 /s/ William P. Breen, Jr. William P. Breen, Jr. Case 1:16-cv-00149-LM Document 16-1 Filed 09/08/16 Page 21 of 21 EXHIBIT A Case 1:16-cv-00149-LM Document 16-2 Filed 09/08/16 Page 1 of 9 Case 1:16-cv-00149-LM Document 16-2 Filed 09/08/16 Page 2 of 9 Case 1:16-cv-00149-LM Document 16-2 Filed 09/08/16 Page 3 of 9 Case 1:16-cv-00149-LM Document 16-2 Filed 09/08/16 Page 4 of 9 Case 1:16-cv-00149-LM Document 16-2 Filed 09/08/16 Page 5 of 9 Case 1:16-cv-00149-LM Document 16-2 Filed 09/08/16 Page 6 of 9 Case 1:16-cv-00149-LM Document 16-2 Filed 09/08/16 Page 7 of 9 Case 1:16-cv-00149-LM Document 16-2 Filed 09/08/16 Page 8 of 9 Case 1:16-cv-00149-LM Document 16-2 Filed 09/08/16 Page 9 of 9 EXHIBIT B Case 1:16-cv-00149-LM Document 16-3 Filed 09/08/16 Page 1 of 3 Case 1:16-cv-00149-LM Document 16-3 Filed 09/08/16 Page 2 of 3 Case 1:16-cv-00149-LM Document 16-3 Filed 09/08/16 Page 3 of 3