Wells Fargo Bank, N.A. v. David Martin Jr.

NOTICE OF MOTION AND MOTION to Dismiss Cross-Complaint

C.D. Cal.April 6, 2017

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 Case No. 2:17-cv-02484-DMG-MRW Notice of Motion and Motion to Dismiss Cross-Complaint COURTNEY C. WENRICK (State Bar No. 286380) ccw@severson.com SEVERSON & WERSON A Professional Corporation The Atrium 19100 Von Karman Avenue, Suite 700 Irvine, California 92612 Telephone: (949) 442-7110 Facsimile: (949) 442-7118 MARK D. LONERGAN (State Bar No. 143622) mdl@severson.com REBECCA S. SAELAO (State Bar No. 222731) rss@severson.com SEVERSON & WERSON A Professional Corporation One Embarcadero Center, Suite 2600 San Francisco, California 94111 Telephone: (415) 398-3344 Facsimile: (415) 956-0439 Attorneys for Cross-Defendant WELLS FARGO BANK, N.A. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA — WESTERN DIVISION WELLS FARGO BANK, N.A., Plaintiff, vs. DAVID MARTIN JR, an individual, Defendant. Case No. 2:17-cv-02484-DMG-MRW Hon. Dolly M. Gee Ctrm. 8C, 8th Floor WELLS FARGO BANK, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS CROSS- COMPLAINANT DAVID MARTIN JR.’S CROSS-COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF Date: May 19, 2017 Time: 9:30 a.m. Crtrm.: 8C Action Filed: October 24, 2016 X-C Filed: February 27, 2017 Removal Date: Trial Date: None Set DAVID MARTIN JR, Cross-Complainant, vs. WELLS FARGO BANK, N.A., Cross-Defendant. Case 2:17-cv-02484-DMG-MRW Document 9 Filed 04/06/17 Page 1 of 9 Page ID #:121 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 i Case No. 2:17-cv-02484-DMG-MRW Table of Contents TABLE OF CONTENTS Page I. INTRODUCTION ................................................................................................1 II. STATEMENT OF FACTS...................................................................................1 III. LEGAL STANDARD ..........................................................................................1 IV. ARGUMENT ........................................................................................................2 A. Cross-Complainant’s FCRA Claims Fail As A Matter of Law...............2 1. There is No Private Right of Action For an Alleged Violation of 15 U.S.C. § 1681s-2(a) ..............................................3 2. Cross-Complainant Fails to Allege that a Credit Reporting Agency Notified Wells Fargo of the Disputed Credit Information.......................................................................................4 3. Cross-Complainant has not Alleged Sufficient Facts Relating to His Disputes to Experian and Equifax and Does Not Allege Any Facts to Support A Finding of Unreasonable Investigation.............................................................5 B. Cross-Complainant’s Negligence and Defamation Claims are Preempted by the FCRA............................................................................7 C. Cross-Complainant’s Has Failed to State Claims For Defamation and Negligence .........................................................................................13 1. Cross-Complainant Failed to Plead the Required Elements for a Cause of Action for Defamation ..........................................13 2. Cross-Complainant Has Failed to State a Claim for Negligence .....................................................................................16 D. Cross-Complainant is not Entitled to Injunctive Relief or Restitution.................................................................................................17 V. CONCLUSION ...................................................................................................18 Case 2:17-cv-02484-DMG-MRW Document 9 Filed 04/06/17 Page 2 of 9 Page ID #:122 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 ii Case No. 2:17-cv-02484-DMG-MRW Table of Authorities TABLE OF AUTHORITIES Page(s) Cases Abbot v. Experian Info. Sols., Inc., 179 F. Supp. 3d 940 (N.D. Cal. 2016) ..................................................................5, 6 Balistreri v. Pacifica Police Dep't., 901 F.2d 696 (9th Cir. 1990) .....................................................................................2 Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) ...............................................................................................1, 2 Biggs v. Experian Info. Sols., Inc., No. 5:16-CV-01507-EJD, 2016 WL 5235043 (N.D. Cal. Sept. 22, 2016) ...........................................................................................................................3 Browndorf v. TD Bank, N.A., No. SACV12-0223 DOC ...........................................................................................4 Buraye v. Equifax, 625 F. Supp. 2d 894 (C.D. Cal. Jun. 6, 2008) ..........................................................9 Church of Scientology of Cal. v. Flynn, 744 F.2d 694 (9th Cir. 1984) .....................................................................................2 Cisneros v. Trans Union, LLC, 293 F. Supp. 2d 1167 (D. Haw. 2003) ..........................................................12 Clegg v. Cult Awareness Network, 18 F.3d 752 (9th Cir. 1994) ...................................................................................2, 6 Davis v. Maryland Bank, No. 00–4191, 2002 WL 32713429 (N.D. Cal. June 19, 2002)................................8 Drew v. Equifax Information Services, LLC, 690 F.3d at 1106.........................................................................................................4 El-Aheidab v. Citibank (S. Dakota), N.A., No. C-11-5359 EMC, 2012 WL 506473 (N.D. Cal. Feb. 15, 2012)...............11, 12 Erie R.R. v. Tompkins, 304 U.S. 64 (1938) .....................................................................................................9 Case 2:17-cv-02484-DMG-MRW Document 9 Filed 04/06/17 Page 3 of 9 Page ID #:123 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 iii Case No. 2:17-cv-02484-DMG-MRW Table of Authorities Francis v. Dun & Bradstreet, Inc., 3 Cal. App. 4th 535 (1992) ......................................................................................15 Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147 (9th Cir. 2009) ......................................................................... passim Grigoryan v. Bank of Am. Corp., No. ED CV 12-01219 MMM, 2012 WL 10423215 (C.D. Cal. Dec. 31, 2012) .....................................................................................................................9 Haddock v. Countrywide Bank, NA, No. CV146452PSGFFMX, 2015 WL 9257316 (C.D. Cal. Oct. 27, 2015) ...........................................................................................................................9 Jackson v. Ryder Truck Rental, 16 Cal. App. 4th 1830 (1993) ..................................................................................16 Johnson v. JP Morgan Chase Bank DBA Chase Manhattan, 536 F. Supp. 2d 1207 (E.D. Cal. 2008).....................................................................9 Kinner v. World Say. & Loan Assoc., 57 Cal. App. 3d 724 (1976) .....................................................................................16 MacLeod v. Tribune Publ'g Co., 52 Cal. 2d 536 (1959) ..............................................................................................14 Macpherson v. JPMorgan Chase Bank, N.A., 665 F.3d 45 (2d Cir. 2011) ........................................................................................9 Mann v. Wells Fargo Bank, No. C 12-03014 DMR, 2012 WL 3727369 (N.D. Cal. Aug. 27, 2012) .........................................................................................................................12 McGarry v. Univ. of San Diego, 154 Cal. App. 4th 97 (2007) ....................................................................................13 Mehta v. Konica Bus. Machines USA Inc., 243 F.3d 548 (9th Cir. 2000) ...................................................................................15 Miller v. Bank of Am., Nat. Ass'n, 858 F. Supp. 2d 1118 (S.D. Cal. 2012).............................................................10, 11 Nelson v. Chase Manhattan Mortg. Corp., 282 F.3d 1057 (9th Cir. 2002) ...............................................................................4, 5 Case 2:17-cv-02484-DMG-MRW Document 9 Filed 04/06/17 Page 4 of 9 Page ID #:124 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 iv Case No. 2:17-cv-02484-DMG-MRW Table of Authorities Nymark v. Heart Fed. Savings & Loan Assn., 231 Cal. App. 3d 1089 (1991) .................................................................................16 O'Connor v. JP Morgan Chase, No. 4:14-CV-00178-KAW, 2014 WL 2216011 (N.D. Cal. May 29, 2014) ...........................................................................................................................4 Okun v. Superior Court, 29 Cal. 3d 442 (1981) ..............................................................................................13 Padayachi v. Indymac Bank, No C 09-5545 JF (PVT), 2010 WL 1460309 (N.D. Cal. Apr. 9, 2010) .........................................................................................................................17 Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480 (9th Cir. 1995) .....................................................................................2 Pavlovsky v. Board of Trade, 171 Cal. App. 2d 110 (1959) ...................................................................................14 Pham v. Bank of Am., N.A., No. C10-02613 HRL, 2010 WL 3184263 (N.D. Cal. Aug. 11, 2010)..................15 Purcell v. Bank of America, 659 F.3d 622 (7th Cir. 2011) ...............................................................................9, 11 Reagan v. Am. Home Mortg. Servicing Inc., No. C 11-00704 WHA, 2011 WL 2149100 (N.D. Cal. May 31, 2011) ...........................................................................................................................6 Roemer v. Retail Credit Co., 44 Cal. App. 3d 926 (1975) .....................................................................................14 Roybal v. Equifax, 405 F. Supp. 2d 1177 (E.D. Cal. 2005).................................................................4, 8 Ruiz v. Cent. Mortg. Co., No. CV1408627MMMSSX, 2015 WL 12683873 (C.D. Cal. Apr. 2, 2015) .........................................................................................................................17 Santos v. Countrywide Home Loans, No. CIV.20902642WBS DAD, 2009 WL 3756337 (E.D. Cal. Nov. 6, 2009) .....................................................................................................................17 Case 2:17-cv-02484-DMG-MRW Document 9 Filed 04/06/17 Page 5 of 9 Page ID #:125 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 v Case No. 2:17-cv-02484-DMG-MRW Table of Authorities Schneider v. Bank of Am. N.A., 2:11–CV–2953 LKK DAD, 2012 WL 761975 (E.D. Cal. Mar. 6, 2012) ...........................................................................................................................4 Schreiber v. Siemons, 07–2467, 2007 WL 2344885 (N.D. Cal. Aug. 14, 2007) (“the majority of district courts in the Ninth Circuit have held that the FCRA preempts state statutory and common law causes of action which fall within the conduct proscribed under § 1681 s–2(a),” quoting Pacheco v. Citibank, 07–1276, 2007 WL 1241934, *2 (N.D. Cal. Apr. 27, 2007)) ...................................................................................................7 Shah v. Capital One Bank (USA), N.A., No. CV1205566SJOJCX, 2012 WL 12884640 (C.D. Cal. Nov. 7, 2012) ...........................................................................................................................4 Shell Oil Co. v. Richter, 52 Cal. App. 2d 164 (1942) .....................................................................................17 Silicon Knights, Inc. v. Crystal Dynamics, Inc., 983 F. Supp. 1303 (N.D. Cal. 1997) .......................................................................13 Smith v. Maldonado, 72 Cal. App. 4th 637 (1999) ..............................................................................13, 14 Steinmetz v. Gen. Elec. Co., No. 08 CV 1635 JM (AJB), 2009 WL 3461133 (S.D. Cal. Oct. 22, 2009) .........................................................................................................................15 Subhani v. JPMorgan Chase Bank, Nat. Ass'n, No. C 12-01857 WHA, 2012 WL 1980416 (N.D. Cal. June 1, 2012) ...................................................................................................................... 10, 14, 16 Sui v. Southside Towing, No. SACV 10-01973 JAK, 2011 WL 2940990 (C.D. Cal. July 18, 2011) ...........................................................................................................................6 Trout v. BMW of N. America, No. 2:04CV01466-BES-LRL, 2007 WL 602230 (D. Nev. Feb. 20, 2007) .........................................................................................................................10 Wagner v. Benson, 101 Cal. App. 3d 27 (1980) .....................................................................................16 Case 2:17-cv-02484-DMG-MRW Document 9 Filed 04/06/17 Page 6 of 9 Page ID #:126 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 vi Case No. 2:17-cv-02484-DMG-MRW Table of Authorities Weseman v. Wells Fargo Home Mortg., Inc., No. CV 06-1338 ST, 2008 WL 542961 (D. Or. Feb. 22, 2008)......................10, 11 Woods v. Protection One Alarm Monitoring, Inc., 628 F. Supp. 1173 (E.D. Cal. 2007)....................................................... 7, 12, 14, 15 Statutes 15 U.S.C. § 1681h(e) ...............................................................................................10, 11 15 U.S.C. § 1681n..........................................................................................................17 15 U.S.C. §§ 1681n, 1681o .........................................................................................3, 4 15 U.S.C. § 1681o..........................................................................................................17 15 U.S.C. § 1681s–2............................................................................................. 2, 8, 10 15 U.S.C. § 1681s–2(b) ...................................................................................... 2, 3, 4, 5 15 U.S.C. § 1681s–2(b)(1) ..........................................................................................5, 6 15 U.S.C. § 1681s–2(b)(1)(A)–(E).................................................................................3 15 U.S.C. § 1681s–2(c) ...................................................................................................3 15 U.S.C. § 1681s–2(d) ...................................................................................................3 15 U.S.C. § 1681s-2(1)..................................................................................................10 15 U.S.C. § 1681s-2(b)................................................................................................4, 5 15 U.S.C § 1681s-2(c) and (d) ......................................................................................12 15 U.S.C. § 1681t(b)......................................................................................................11 15 U.S.C. § 1681t(b)(1)(F).................................................................................... passim Cal. Civ. Code § 45a......................................................................................................13 Cal. Civ. Code § 47(c) ...................................................................................................14 Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq. ("FCRA")....................... passim Case 2:17-cv-02484-DMG-MRW Document 9 Filed 04/06/17 Page 7 of 9 Page ID #:127 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 vii Case No. 2:17-cv-02484-DMG-MRW Table of Authorities Other Authorities Rule 12(b)(6) of the Federal Rules of Civil Procedure .................................................1 Case 2:17-cv-02484-DMG-MRW Document 9 Filed 04/06/17 Page 8 of 9 Page ID #:128 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 viii Case No. 2:17-cv-02484-DMG-MRW Notice of Motion and Motion to Dismiss Cross-Complaint TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on May 19, 2017 at 9:30 a.m., or as soon thereafter as the matter may be heard, in Courtroom 8C, of the above-entitled Court, located at 350 West 1st Street, Los Angeles, CA, 90012, cross-defendant Wells Fargo Bank, N.A. (“Wells Fargo”) will and hereby does move for an order dismissing Wells Fargo from the cross-complaint (“Complaint”) filed by cross- complainant David Martin Jr. (“Cross-Complainant”). This motion is made pursuant to Rule 12(b)(6) and is based on the grounds that the Complaint and each of its causes of action fails to state a claim against Wells Fargo upon which relief may be granted under Rule 12(b)(6) of the Federal Rules of Civil Procedure. This motion is based on this notice of motion and motion, the memorandum of points and authorities filed herewith, the Complaint, Cross-Complaint and all other pleadings and records on file in this action, and upon such other argument as the Court may consider at the hearing on this motion. This motion is made following the conference of counsel required by Local Rule 7-3. Counsel for Wells Fargo sent Cross-Complainant a letter via overnight mail in an attempt to meet and confer on March 30, 2017. Cross-Complainant never responded. DATED: April 6, 2017 SEVERSON & WERSON A Professional Corporation By: /s/ Courtney C. Wenrick Courtney C. Wenrick Attorneys for Cross-Defendant WELLS FARGO BANK, N.A. Case 2:17-cv-02484-DMG-MRW Document 9 Filed 04/06/17 Page 9 of 9 Page ID #:129 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 1 Case No. 2:17-cv-02484-DMG-MRW Memorandum of Points and Authorities MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION David Martin Jr. (“Cross-Complainant”) filed a cross-complaint against Wells Fargo Bank, N.A. (“Wells Fargo”) alleging that Wells Fargo violated the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681 et seq. Cross-Complainant has also asserted causes of action against Wells Fargo for defamation and negligence. Specifically, Cross-Complainant alleges that Wells Fargo reported derogatory remarks on his credit report. All of Cross-Complainant’s causes of action fail because he has filed to plead the requisite elements of such a claim. Additionally, Cross-Complainant’s causes of action for negligence and emotional distress are preempted by the FCRA and must be dismissed with prejudice. For these and additional reasons, further discussed below, Wells Fargo respectfully requests that the Court grant the instant motion without leave to amend. II. STATEMENT OF FACTS Cross-Complainant alleges that he discovered derogatory reporting on his credit file on June 21, 2016. Cross-Complaint at ¶ 7. Cross-Complainant further alleges that he disputed the derogatory remarks with Experian and Equifax on June 21, 2016. Id. at ¶¶ 8-9. Cross-Complainant also contends that he sent a second dispute to Experian and Equifax on July 21, 2016 and a third dispute to Experian and Equifax on August 30, 2016. Id. at ¶¶ 13-14 and 19-20. Cross-Complainant alleges that delinquencies Wells Fargo reported were false. Id. at ¶ 23. III. LEGAL STANDARD To survive a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007); id. at 554–56, 562–63 (stating that the 12(b)(6) standard that dismissal is warranted if plaintiff can prove no set of facts in support of his claims that would Case 2:17-cv-02484-DMG-MRW Document 9-1 Filed 04/06/17 Page 1 of 18 Page ID #:130 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 2 Case No. 2:17-cv-02484-DMG-MRW Memorandum of Points and Authorities entitle him to relief “has been questioned, criticized, and explained away long enough,” and that having “earned its retirement,” it “is best forgotten as an incomplete, negative gloss on an accepted pleading standard”). Thus, the facts pleaded in the complaint must amount to “more than labels and conclusions” or a “formulaic recitation of the elements of a cause of action.” Id. at 555. Instead, the “[f]actual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Id. (citation omitted). Dismissal may be based either on the lack of cognizable legal theories or the lack of pleading sufficient facts to support cognizable legal theories. Balistreri v. Pacifica Police Dep't., 901 F.2d 696, 699 (9th Cir. 1990). The cross-complaint’s factual allegations are accepted as true. Church of Scientology of Cal. v. Flynn, 744 F.2d 694, 696 (9th Cir. 1984). The court construes the pleading in the light most favorable to cross-complainant and resolves all doubts in cross-complainant’s favor. Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). However, “the court is not required to accept legal conclusions cast in the form of factual allegations if those conclusions cannot reasonably be drawn from the facts alleged.” Clegg v. Cult Awareness Network, 18 F.3d 752, 754– 55 (9th Cir. 1994). Nor need the court accept unreasonable inferences, or unwarranted deductions of fact. Sprewell, supra, at 988. IV. ARGUMENT A. Cross-Complainant’s FCRA Claims Fail As A Matter of Law Cross- Complainant alleges that Wells Fargo violated Section 1681s–2, which sets forth two main duties relating to the “responsibilities of furnishers of information to consumer reporting agencies.” 15 U.S.C. § 1681s–2. Section 1681s– 2(a) deals with the duty “to provide accurate information.” Id. § 1681s–2(a). Meanwhile, Section 1681s–2(b) applies only after a furnisher receives information Case 2:17-cv-02484-DMG-MRW Document 9-1 Filed 04/06/17 Page 2 of 18 Page ID #:131 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 3 Case No. 2:17-cv-02484-DMG-MRW Memorandum of Points and Authorities of a dispute from a consumer reporting agency and imposes certain affirmative duties on furnishers. Id. § 1681s–2(b). To state a claim for violation of the FCRA against a furnisher of credit information such as Wells Fargo, Cross-Claimant must allege that after receiving notice of a dispute from credit reporting agencies (“CRAs”), the furnisher failed to conduct a reasonable investigation. Specifically, Cross-Claimant must allege: “(1) he found an inaccuracy in his credit report; (2) he notified a credit reporting agency; (3) the credit reporting agency notified the furnisher of the information about the dispute; and (4) the furnisher failed to investigate the inaccuracies or otherwise failed to comply with the requirements of 15 U.S.C. § 1681s–2(b)(1)(A)–(E).” Biggs v. Experian Info. Sols., Inc., No. 5:16-CV-01507-EJD, 2016 WL 5235043, at *1 (N.D. Cal. Sept. 22, 2016). 1. There is No Private Right of Action For an Alleged Violation of 15 U.S.C. § 1681s-2(a) To the extent Cross-Complainant alleges that Wells Fargo violated Section 1681s–2(a), that claim should be dismissed with prejudice because there is no private right of action for a violation of Section 1681s–2(a) against a furnisher of information to CRAs, such as Wells Fargo. See 15 U.S.C. § 1681s–2(c) (stating that “sections 1681n and 1681o of this title,” which impose civil liability for willful or negligent failure to comply with the FCRA, “do not apply to any violation of [Section 1681s–2(a) ]”); Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1154 (9th Cir. 2009) (“[Section] 1681s–2 limits this private right of action to claims arising under [Section 1681s–2(b) ]…Duties imposed on furnishers under [Section 1681s–2(a) ] are enforceable only by federal or state agencies.”) Further, subsection (d) of § 1681s-2, provides that subsection (a) “shall be enforced exclusively under section 1681s of this title by the Federal agencies and officials and the State officials identified in that section.” 15 U.S.C. § 1681s–2(d). Case 2:17-cv-02484-DMG-MRW Document 9-1 Filed 04/06/17 Page 3 of 18 Page ID #:132 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 4 Case No. 2:17-cv-02484-DMG-MRW Memorandum of Points and Authorities Wells Fargo is a furnisher under the FCRA. 15 U.S.C. § 1681s-2; Shah v. Capital One Bank (USA), N.A., No. CV1205566SJOJCX, 2012 WL 12884640, at *3 (C.D. Cal. Nov. 7, 2012). Accordingly, Cross-Complainant’s claim under § 1681s– 2(a) should be dismissed with prejudice, as the lack of a private right of action makes any further amendment futile. O'Connor v. JP Morgan Chase, No. 4:14-CV- 00178-KAW, 2014 WL 2216011, at *5 (N.D. Cal. May 29, 2014); Shah, 2012 WL 12884640 at *3. 2. Cross-Complainant Fails to Allege that a Credit Reporting Agency Notified Wells Fargo of the Disputed Credit Information The only FCRA section that provides for a private right of action against a furnisher of information to CRAs, such as Wells Fargo, is section 1681s-2(b). See 15 U.S.C. §§ 1681n, 1681o; Gorman, 584 F.3d at 1162; Nelson v. Chase Manhattan Mortg. Corp., 282 F.3d 1057, 1059–60 (9th Cir. 2002). The duties of a furnisher to investigate a dispute under section 1681s–2(b) are not triggered unless a CRA informs the furnisher that the consumer has disputed the debt. Gorman, 584 F.3d at 1154; see also Drew v. Equifax Information Services, LLC, 690 F.3d at 1106. It is not enough for the consumer himself or herself to inform the furnisher of the dispute directly. Id.; see also Roybal v. Equifax, 405 F. Supp. 2d 1177, 1180 (E.D. Cal. 2005) (“The furnisher's duty to investigate, however, does not arise unless it receives notice of the dispute from the CRAs directly.”) Here, Cross-Complainant does not allege that either Experian or Equifax informed Wells Fargo of his disputes. Accordingly, the Cross-Complaint should be dismissed for this reason alone. Browndorf v. TD Bank, N.A., No. SACV12-0223 DOC JPRX, 2012 WL 2919470, at *5 (C.D. Cal. July 17, 2012) (dismissing plaintiff’s FCRA claim because he failed to allege that the credit reporting agencies notified the Creditor Defendants of any inaccuracies or disputes with Plaintiff's credit information); Schneider v. Bank of Am. N.A., 2:11–CV–2953 LKK DAD, 2012 WL 761975, at *8-9 (E.D. Cal. Mar. 6, 2012) (holding that the plaintiff failed Case 2:17-cv-02484-DMG-MRW Document 9-1 Filed 04/06/17 Page 4 of 18 Page ID #:133 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 5 Case No. 2:17-cv-02484-DMG-MRW Memorandum of Points and Authorities to sufficiently allege facts for a cause of action for violation of the FCRA because he did not establish that a credit reporting agency ever contacted the defendant furnisher to examine a dispute in the accuracy of the plaintiff's credit information). 3. Cross-Complainant has not Alleged Sufficient Facts Relating to His Disputes to Experian and Equifax and Does Not Allege Any Facts to Support A Finding of Unreasonable Investigation Next, the Cross-Complaint fails to allege that Wells Fargo violated its statutory duty under the FCRA to investigate the disputed credit information. This failure is yet another reason why Cross-Complainant’s FCRA claim should be dismissed. 15 U.S.C. § 1681s-2(b). Section 1681s–2(b) instructs that once a furnisher is put on notice of a dispute by a credit reporting CRA, “the furnisher of the disputed information, has four duties: to conduct an ‘investigation with respect to the disputed information;’ to review all relevant information provided by the CRA; to report the results of its investigation to the CRA; and if the investigation finds the information is incomplete or inaccurate to report those results ‘to all [nationwide] consumer reporting agencies to which the person furnished the information.’” Nelson, 282 F.3d at 1059 (quoting 15 U.S.C. § 1681s–2(b)). Further, Cross-Complainant must allege facts sufficient to demonstrate that the dispute was sufficient to trigger an investigation of credit reporting and that the investigation was unreasonable. Gorman, 584 F.3d at 1160; see also Abbot v. Experian Info. Sols., Inc., 179 F. Supp. 3d 940 (N.D. Cal. 2016). Here, Cross-Complainant has not alleged that Wells Fargo failed to investigate the alleged inaccurate reporting. Additionally, Cross-Complainant has failed to alleged the content of such disputes beyond that the disputes were regarding “derogatory remarks.” Cross-Complaint at ¶¶ 8-9, 13-14, and 19-20. Although the FCRA requires a furnisher to “conduct an investigation with respect to the disputed information” after the furnisher receives notice of a dispute from a consumer reporting agency, 15 U.S.C. § 1681s–2(b)(1), and the Ninth Circuit Case 2:17-cv-02484-DMG-MRW Document 9-1 Filed 04/06/17 Page 5 of 18 Page ID #:134 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 6 Case No. 2:17-cv-02484-DMG-MRW Memorandum of Points and Authorities has imposed a reasonableness requirement on such an investigation, “[a]n investigation is not necessarily unreasonable because it results in a substantive conclusion unfavorable to the consumer, even if that conclusion turns out to be inaccurate.” Gorman, 584 F.3d at 1157, 1161. Whether an investigation is reasonable “depends in large part on the allegations provided to the furnisher by the credit reporting agency.” Id. at 1160; see also Abbot, 179 F. Supp. 3d at 945. The reasonableness of any investigation is judged “in light of what [a creditor] learned about the nature of the dispute from the description in the CRA's notice of dispute.” Sui v. Southside Towing, No. SACV 10-01973 JAK, 2011 WL 2940990, at *6 (C.D. Cal. July 18, 2011); Gorman, 584 F.3d at 1158-59 (“holding that vague or incomplete notices of disputes did not trigger a furnisher's obligation to investigate a particular transaction.”) Here, the Cross-Complaint’s mere reference to the “duties as a furnisher of credit information pursuant to the FCRA, 15 U.S.C. § 1681s-2(a) and (b)” does not suffice to state a cause of action. Reagan v. Am. Home Mortg. Servicing Inc., No. C 11-00704 WHA, 2011 WL 2149100, at *2 (N.D. Cal. May 31, 2011) (allegations that defendant did not “conduct an appropriate investigation ... review all relevant information ... report the results to the credit reporting agencies ... [and] modify, delete or permanently block the reporting of the inaccurate information” were a recitation of § 1681s–2(b)(1), and legal conclusions, not factual allegations needed to support a claim under this section); and see Clegg v. Cult Awareness Network, 18 F.3d 752, 754–55 (9th Cir. 1994) (court not required to accept legal conclusions in the form of factual allegations to support a motion to dismiss.) Here, Cross-Complainant’s disputes—as summarized in his Cross- Complaint—were not sufficient to trigger an investigation because it did not identify a concrete dispute of information furnished by Wells Fargo. See Gorman, 584 F.3d at 1158-59 (“disputes present/previous Account Status History” and “fraudulent changes” were not sufficient to trigger an investigation.) Cross-Complainant does Case 2:17-cv-02484-DMG-MRW Document 9-1 Filed 04/06/17 Page 6 of 18 Page ID #:135 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 7 Case No. 2:17-cv-02484-DMG-MRW Memorandum of Points and Authorities not specify a specific account at issue or why the derogatory information was allegedly inaccurate or misleading. Further, Cross-Complainant does not specify what parts of his credit report were “derogatory.” Without specifics Wells Fargo is not able to guess whether Cross-Complainant has an issue with the account status, the balance, any or the 24-months of payment history reported, or another item on the credit report. It is therefore unclear what kind of investigation would have been required of Wells Fargo upon receiving a dispute that an unspecified account was reporting “derogatory remarks.” Wells Fargo posits that the content of Cross- Complainant’s disputes, as plead in the Cross-Complaint, are on its face insufficient to trigger an obligation to investigate. Even if there were an obligation to investigate triggered by the contents of the dispute letter, Cross-Complainant fails to allege any facts to suggest that the investigation was not reasonable in light of the incomplete and vague notice contents. There are no facts plead that Wells Fargo received notice of Cross- Complainant’s disputes, let alone that an investigation done was unreasonable. Since Cross-Complaint’s disputes were inadequate to trigger an obligation to investigate in the first place, and since Cross-Complainant alleges no facts in support of Wells Fargo having failed to conduct a reasonable investigation, his FCRA claim should be dismissed with prejudice. B. Cross-Complainant’s Negligence and Defamation Claims are Preempted by the FCRA The majority of courts in the Ninth Circuit have ruled that 15 U.S.C. § 1681t(b)(1)(F) totally preempts all “state statutory and common law causes of action which fall within the conduct proscribed under § 1681 s–2.” Woods v. Protection One Alarm Monitoring, Inc., 628 F. Supp. 1173, 1183 (E.D. Cal. 2007); see also Schreiber v. Siemons, 07–2467, 2007 WL 2344885, *3 n. 8 (N.D. Cal. Aug. 14, 2007) (“the majority of district courts in the Ninth Circuit have held that the FCRA preempts state statutory and common law causes of action which fall within the Case 2:17-cv-02484-DMG-MRW Document 9-1 Filed 04/06/17 Page 7 of 18 Page ID #:136 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 8 Case No. 2:17-cv-02484-DMG-MRW Memorandum of Points and Authorities conduct proscribed under § 1681 s–2(a),” quoting Pacheco v. Citibank, 07–1276, 2007 WL 1241934, *2 (N.D. Cal. Apr. 27, 2007)); Roybal, 405 F. Supp. 2d at 1181 (“Because Plaintiffs’ State Claims are based on alleged injury arising purely from the reporting of credit information by a furnisher of credit, they are completely preempted [by the FCRA]. Several courts that have analyzed this preemption clause concur” (citations and footnote omitted)); Davis v. Maryland Bank, No. 00–4191, 2002 WL 32713429, *13 (N.D. Cal. June 19, 2002) (holding that § 1681t(b)(1)(F) preempts all state claims falling within the coverage of § 1681s–2, including those involving malicious and willful tortious conduct). The Davis Court reasoned: “‘The plain language of section 1681t(b)(1)(F) clearly eliminated all state causes of action against furnishers of information, not just ones that stem from statutes that relate specifically to credit reporting. To allow causes of action under state statutes that do not specifically refer to credit reporting, but to bar those that do, would defy the Congressional rationale for the elimination of state causes of action.’” Davis, 2002 WL 32713429 at *13 (quoting Jaramillo v. Experian Information Solutions, Inc., 155 F. Supp. 2d 356, 362 (E.D. Pa. 2001)). The Davis Court further observed that: “the legislative history demonstrates that Congress enacted section 1681t(b)(1)(F) in order to create a uniform scheme governing the disclosure of credit information. See Kodrick v. Ferguson, 54 F.Supp.2d 768, 794 (N.D. Ill. 1999) (discussing legislative history of FCRA's preemption provisions). Allowing common law tort claims which implicate the same subject matter as section 1681s–2(1) would undermine Congress' intention to create a uniform system of protection for consumers.” Id.; see also Roybal, 405 F. Supp. 2d at 1181. While the Ninth Circuit has yet to rule on the total preemption approach, two other circuit courts have adopted it, ruling that Section 1681t(b)(1)(F) preempts both state statutory and common law causes of action in their entirety insofar as they are predicated on conduct that arises out of reports furnished to credit agencies. See Case 2:17-cv-02484-DMG-MRW Document 9-1 Filed 04/06/17 Page 8 of 18 Page ID #:137 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 9 Case No. 2:17-cv-02484-DMG-MRW Memorandum of Points and Authorities Purcell v. Bank of America, 659 F.3d 622, 624–25 (7th Cir. 2011); Macpherson v. JPMorgan Chase Bank, N.A., 665 F.3d 45, 48 (2d Cir. 2011). Both courts of appeal, relying on Erie R.R. v. Tompkins, 304 U.S. 64 (1938), reasoned that Congress' use of the word “laws” in Section 1681t(b)(1)(F) “comprises all sources of legal rules,” noting that “[m]any modern decisions about preemption follow Erie and hold that a federal statute preempts state common law to the same extent as it preempts state statutory law.” Purcell, 659 F.3d at 624–26. Additionally, Courts in the Central District of California have routinely applied the total preemption approach in analyzing where state law and common law claims are preempted by the FCRA. See, e.g. Buraye v. Equifax, 625 F. Supp. 2d 894, 900 (C.D. Cal. Jun. 6, 2008) (apply the “total preemption” approach and concluding that plaintiff’s “state law negligence and defamation claims are preempted by the FCRA”); Grigoryan v. Bank of Am. Corp., No. ED CV 12-01219 MMM, 2012 WL 10423215, at *10. *12 (C.D. Cal. Dec. 31, 2012) (applying the “total preemption” approach to find defamation claim preempted by FCRA and dismissing it with prejudice); Haddock v. Countrywide Bank, NA, No. CV146452PSGFFMX, 2015 WL 9257316, at *21-22 (C.D. Cal. Oct. 27, 2015) (dismissing plaintiff’s misrepresentation cause of action under the “total preemption” approach). Here, Cross-Complainant’s claims for negligence and defamation are entirely based on alleged false reporting by Wells Fargo to Experian and Equifax. Cross- Complaint at ¶¶ 23 and 26. Because Cross-Complainant’s Negligence and Defamation claims are based on credit reporting under 15 U.S.C. § 1681s-2, they are preempted by of the FCRA. Buraye, 625 F. Supp. 2d at 900-001 (concluding that plaintiff’s “state law negligence and defamation claims are preempted by the FCRA”…because the “allegations in [the] complaint clearly implicate the subject matter of § 1681s-2.”); Johnson v. JP Morgan Chase Bank DBA Chase Manhattan, 536 F. Supp. 2d 1207, 1215 (E.D. Cal. 2008) (“15 U.S.C. § 1681t(b)(1)(F) preempts Case 2:17-cv-02484-DMG-MRW Document 9-1 Filed 04/06/17 Page 9 of 18 Page ID #:138 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 10 Case No. 2:17-cv-02484-DMG-MRW Memorandum of Points and Authorities Ms. Johnson’s defamation claim based on allegations that Unifund reported information to a credit reporting agency”); Miller v. Bank of Am., Nat. Ass'n, 858 F. Supp. 2d 1118, 1126-27 (S.D. Cal. 2012) (dismissing plaintiff’s negligence claim without leave to amend because it was preempted under section 1681t(v)(1)(F) because it was within the purview of section 1681s–2 as the allegations involve duties and responsibilities required of furnishers of credit information.) The conduct prohibited by furnishers of information pursuant to § 1681s2-(1) includes the reporting of information with actual knowledge of errors and reporting of information after notice and confirmation of errors. 15 U.S.C. § 1681s-2(1). In summary, furnishers of information cannot provide inaccurate information, but if they do, any state statutory and common law causes of action brought as a result of this conduct are preempted by the FCRA. Trout v. BMW of N. America, No. 2:04CV01466-BES-LRL, 2007 WL 602230, at *2 (D. Nev. Feb. 20, 2007). There are some courts in the 9th Circuit that have applied what is known as the “statutory approach” rather than the total preemption approach under section 1681t(b)(1)(F). See, e.g. Weseman v. Wells Fargo Home Mortg., Inc., No. CV 06- 1338 ST, 2008 WL 542961, at *4 (D. Or. Feb. 22, 2008). Under the “statutory approach,” § 1681t(b)(1)(F) preempts only statutory state law claims against credit information furnishers and § 1681h(e) preempts only common law claims. Subhani v. JPMorgan Chase Bank, Nat. Ass'n, No. C 12-01857 WHA, 2012 WL 1980416, at *4 (N.D. Cal. June 1, 2012) (citations omitted). Section 1681h(e) provides: Except as provided in sections 1681n and 1681o of this title, 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, any user of information, or any person who furnishes information to a consumer reporting agency, based on information 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 for 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 willful intent to injure such consumer.” Case 2:17-cv-02484-DMG-MRW Document 9-1 Filed 04/06/17 Page 10 of 18 Page ID #:139 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 11 Case No. 2:17-cv-02484-DMG-MRW Memorandum of Points and Authorities 15 U.S.C. § 1681h(e). However, even courts applying this approach, recognize that a “negligence claim, by its very name, can never be intentional. In contrast, a ‘willful’ act under the FCRA is ‘done knowingly or intentionally, or is recklessly committed with a conscious disregard for the rights of others.’” Weseman, 2008 WL 542961, at *5 (D. Or. Feb. 22, 2008) (quoting Harris v. Equifax Credit Info. Serv., Inc., 2003 WL 23962280, *2 (D Or 2003)). Further, the “statutory approach” does not properly interpret the interplay between sections 1681t(b)(1)(F) and 1681h(e). Contrary to what the statutory approach suggests, reading section 1681t(b)(1)(F) to preempt all statutory and common law causes of action against furnishers based on conduct governed by § 1681 s–2 is not inconsistent with § 1681h(e) and does not render this section superfluous. El-Aheidab v. Citibank (S. Dakota), N.A., No. C-11-5359 EMC, 2012 WL 506473, at *8 (N.D. Cal. Feb. 15, 2012) (citing Purcell, 659 F.3d at 625). “Section 1681h(e) applies to a range of conduct covered by the Act that is not specifically preempted by § 1681t(b).” El-Aheidab, 2012 WL 506473 at *8. Section 1681t(b) only preempts certain conduct, including conduct relating to the responsibilities of furnishers under section 1681s-2, which is at issue here. 15 U.S.C. § 1681t(b). However, section 1681t(b) does not mention other provisions of the FCRA, including §§ 1681d, 1681e, 1681h, 1681k, and 1681l, which would still be subject to § 1681h(e)'s more limited preemption clause. El-Aheidab, 2012 WL 506473 at *8; Purcell, 659 F.3d at 625. Accordingly, interpreting § 1681t(b) to preempt both statutory and common law claims relating to the responsibilities of furnishers under section 1681s-2 would not create an irreconcilable conflict with § 1681h(e). Id. Courts in the Ninth Circuit have followed this analysis. Miller v. Bank of Am., Nat. Ass'n, 858 F. Supp. 2d 1118, 1126–27 (S.D. Cal. 2012) (applying the reasoning Case 2:17-cv-02484-DMG-MRW Document 9-1 Filed 04/06/17 Page 11 of 18 Page ID #:140 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 12 Case No. 2:17-cv-02484-DMG-MRW Memorandum of Points and Authorities of El-Aheidab and dismissing plaintiff’s negligence claims with prejudice because, even though they contained allegations of willful conduct, there were within the purview of section 1681s-2, and were therefore preempted by section 1681t(b)(1)(F)); Mann v. Wells Fargo Bank, No. C 12-03014 DMR, 2012 WL 3727369, at *4 (N.D. Cal. Aug. 27, 2012) (finding the rationale in El–Aheidab persuasive and holding that plaintiffs' common law tort claims, including negligence and defamation, were preempted by section 1681t(b)(1)(F)). Finally, Cross-Complainant’s causes of action for negligence and defamation are barred for yet another reason. Here, Cross-Complainant’s allegations for negligence and defamation are premised on alleged false credit reporting. Cross- Complaint at ¶¶ 23-24 and 26-27. As discussed above, conduct that falls within the purview of § 1681s–2(a), which shall be enforced exclusively by Federal agencies and officials and State officials, and not by consumers. 15 U.S.C § 1681s-2(c) and (d). Thus, Cross-Complainant’s negligence and defamation claims against Wells Fargo for failing to report accurate information can only be brought by government agencies and officials in accordance with § 1681s–2(a). Cisneros v. Trans Union, LLC, 293 F. Supp. 2d 1167, 1176–77 (D. Haw. 2003) (dismissing plaintiff’s negligence and defamation claims against furnishers because allegations for reporting or furnishing false or inaccurate information can only be pursued by governmental agencies or officials);Woods, 628 F. Supp. 2d at 1186 (finding that the FCRA preempts plaintiffs’ defamation claim and granting summary judgment because plaintiffs cannot maintain a private right of action for defamation for violation of the duties set out in § 1681s-2(a)). Thus, the limitation set out in 1681s- 2 applies, and Cross-Complainant cannot maintain a private cause of action for defamation and negligence against Wells Fargo for violation of the duties set out in § 1681s-2(a) and these claims should be dismissed. Accordingly, Cross-Complainant’s defamation and negligence claims should be dismissed without leave to amend because they are preempted by the FCRA. Case 2:17-cv-02484-DMG-MRW Document 9-1 Filed 04/06/17 Page 12 of 18 Page ID #:141 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 13 Case No. 2:17-cv-02484-DMG-MRW Memorandum of Points and Authorities C. Cross-Complainant’s Has Failed to State Claims For Defamation and Negligence While Cross-Complainant’s claims for Defamation and Negligence are preempted by the FCRA, they also fail for the independent reason that Cross- Complainant has failed to plead facts sufficient to state a claim for relief that is plausible on its face under either theory. 1. Cross-Complainant Failed to Plead the Required Elements for a Cause of Action for Defamation To survive a motion to dismiss on a defamation claim, Cross-Complainant must allege that Wells Fargo: (1) intentionally published a statement of fact; (2) that is false; (3) unprivileged; and (4) has a natural tendency to injure (libel per se) or causes special damages. Smith v. Maldonado, 72 Cal. App. 4th 637, 645–46 (1999). To satisfy the pleading requirements for an actionable defamation claim, Cross- Complainant must offer more than conclusory, non-descriptive phrases. Instead, Cross-Complainant “must allege facts sufficient to support a claim that the defendant was acting with reckless disregard for the truth.” McGarry v. Univ. of San Diego, 154 Cal. App. 4th 97, 114 (2007). In addition, while Cross-Complainant need not plead the allegedly defamatory statement verbatim, the specifics and the substance of the allegedly defamatory statement must be identified. See Okun v. Superior Court, 29 Cal. 3d 442, 458 (1981) (citations omitted); Silicon Knights, Inc. v. Crystal Dynamics, Inc., 983 F. Supp. 1303, 1314 (N.D. Cal. 1997). Cross-Complainant’s allegations are too conclusory to survive a motion to dismiss. With regard specifically to the fourth element outlined above, which deals with the defamatory or harmful nature of the statements, Cross-Complainant has completely missed the mark. “Defamatory language not libelous on its face is not actionable unless the plaintiff alleges and proves that he has suffered special damage as a result thereof.” Cal. Civ. Code § 45a. Thus, unless a statement is defamatory per se, Cross-Complainant must plead special damages. Cross-Complainant alleges in conclusory fashion that Wells Fargo alleged credit reporting was “defamation and Case 2:17-cv-02484-DMG-MRW Document 9-1 Filed 04/06/17 Page 13 of 18 Page ID #:142 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 14 Case No. 2:17-cv-02484-DMG-MRW Memorandum of Points and Authorities defamation per se.” Cross-Complaint at ¶ 27. But, as here, where the statements that are the subject of a defamation action are of ambiguous meaning, or are innocent on their face and defamatory only in the light of extrinsic circumstances, Cross- Complainant must plead and prove that as used, the words had a particular meaning, or “innuendo,” that makes them defamatory. Maldonado, 72 Cal. App. 4th at 645– 46. This includes the requirement that in an instance of ambiguous language—that is, where the language is susceptible to either a defamatory or innocent interpretation—Cross-Complainant must also allege the extrinsic circumstances which show that the third party, in this case the CRAs, reasonably understood the statements in its derogatory sense. Id. Whether a statement is reasonably susceptible to a defamatory interpretation is a question of law for the court. MacLeod v. Tribune Publ'g Co., 52 Cal. 2d 536, 546 (1959). Contrary to Cross-Complainant’s allegation in his Cross-Complaint, the “mere allegation of not paying debts is not defamatory per se.” Woods, 628 F. Supp. 2d at 1188 (citing Gautier v. Gen. Tel. Co., 234 Cal. App. 2d 302, 309 (1965)). The statements allegedly published by Wells Fargo, stating a delinquency in payment and that Cross-Complainant’s account was in collections do not qualify as defamation per se. See, e.g., Subhani, 2012 WL 1980416, at *9. In this situation, Cross-Complainant was also required to plead special damages, which he failed to do. Id.1 Moreover, Cross-Complainant has failed to plead that Wells Fargo acted with the requisite malice.2 Malice in defamation cases means actual or express malice. 1 Here, Cross-Complainant only pleads that he is entitled to “compensatory, special, consequential and punitive damages.” Cross-Complaint at ¶ 27. 2 Wells Fargo’s communications to CRAs is a privileged communication under Cal. Civ. Code § 47(c) and are therefore not actionable if made without malice. Roemer, 3 Cal. App. 3d at 370-71 (applying it to mercantile agencies); Pavlovsky v. Board of (footnote continued) Case 2:17-cv-02484-DMG-MRW Document 9-1 Filed 04/06/17 Page 14 of 18 Page ID #:143 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 15 Case No. 2:17-cv-02484-DMG-MRW Memorandum of Points and Authorities Woods, 628 F. Supp. 2d at 1188 (citing Roemer v. Retail Credit Co., 44 Cal. App. 3d 926, 936 (1975)). While Cross-Complainant alleges that Wells Fargo acted “with knowledge of the falsity of its statements…that Cross-Plaintiff was past due on the alleged Wells account and that the Wells account was in collection statues,” and that these “statements were made with a conscious disregard for the rights” of Cross- Complainant, these general and conclusory statements do not support a claim that defendant acted with “a state of mind arising from hatred or ill will toward” Cross- Complainant or “the state of mind demonstrated by a showing that the defendant lacked reasonable grounds for belief in the truth of the publication.” Id; see also Steinmetz v. Gen. Elec. Co., No. 08 CV 1635 JM (AJB), 2009 WL 3461133, at *5 (S.D. Cal. Oct. 22, 2009) (allegations that defendants acted “knowingly” and “with malice,” were “general and conclusory statements [that] do not support a claim that defendants acted with ‘a state of mind arising from hatred or ill will toward the plaintiff’ or with a reckless disregard for plaintiff's rights” (citations omitted)); Pham v. Bank of Am., N.A., No. C10-02613 HRL, 2010 WL 3184263, at *5 (N.D. Cal. Aug. 11, 2010) (alleging that defendants acted “willfully” and “with actual malice and/or reckless disregard for the consequences of their actions,” were general and conclusory statements); Mehta v. Konica Bus. Machines USA Inc., 243 F.3d 548 (9th Cir. 2000) (district court properly granted summary judgment on Mehta's defamation claim because Mehta presented only conclusory allegations of malice unsupported by factual data). Cross-Complainant has not alleged any facts that Wells Fargo doubted that the debt was owed or that it believed Cross-Complainant had a meritorious dispute. Under these circumstances, Cross-Complainant has failed to show that Wells Fargo acted with malice. Francis v. Dun & Bradstreet, Inc., 3 Cal. App. 4th 535, 539-40 Trade, 171 Cal. App. 2d 110, 113-14 (1959) (applying it to credit reports of mercantile agencies that collect information and sell it for a profit). Case 2:17-cv-02484-DMG-MRW Document 9-1 Filed 04/06/17 Page 15 of 18 Page ID #:144 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 16 Case No. 2:17-cv-02484-DMG-MRW Memorandum of Points and Authorities (1992) (holding that a defamation claim cannot be sustained for truthful information in a credit report, even if the information reported supports misleading inferences); Gorman, 584 F.3d at 1169 (if the “creditor has a good faith reason for believing that the debt is in fact owed, reporting the debt without reporting the dispute does not convey ‘false’ information ‘with malice or willful intent to injure the consumer.’”) Because Cross-Complainant has failed to plead all the required elements, his claim for defamation should be dismissed. See, e.g. Subhani, 2012 WL 1980416, at *7, *9 (finding that allegations that defendant “allowed and continues to allow credit reporting agencies to report that [he] currently owes money to [defendant] and is delinquent in not paying this alleged debt” were insufficient to plead a cause of action for defamation.) 2. Cross-Complainant Has Failed to State a Claim for Negligence To state a claim for negligence Cross-Complainant must allege (1) a legal duty to use due care; (2) a breach of that duty; and (3) the breach as the proximate or legal cause of the resulting injury. Jackson v. Ryder Truck Rental, 16 Cal. App. 4th 1830, 1837 (1993). Cross-Complainant fails to properly allege any legal duty on the part of Wells Fargo and his cause of action for negligence therefore fails. “[A]s a general rule, a financial institution owes no duty of care to a borrower when the institution's involvement in the loan transaction does not exceed the scope of its conventional role as a mere lender of money.” Nymark v. Heart Fed. Savings & Loan Assn., 231 Cal. App. 3d 1089, 1096 (1991); see also Kinner v. World Say. & Loan Assoc., 57 Cal. App. 3d 724, 732 (1976) (no duty owed to borrower to ensure adequacy of construction loan); Wagner v. Benson, 101 Cal. App. 3d 27, 35 (1980) (no duty of care owed by lender to borrower where lender is not involved extensively in borrower's business). Here, Cross-Complainant has not alleged that Wells Fargo’s involvement with Cross-Complainant exceeded the scope of its “conventional role” as a creditor. In the absence of a clear legal duty, Cross- Complainant’s cause of action for negligence fails. Case 2:17-cv-02484-DMG-MRW Document 9-1 Filed 04/06/17 Page 16 of 18 Page ID #:145 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 17 Case No. 2:17-cv-02484-DMG-MRW Memorandum of Points and Authorities D. Cross-Complainant is not Entitled to Injunctive Relief or Restitution On the cover of the Cross-Complaint, Cross-Complainant indicated that he seeks a permanent injunction, restitution and other equitable relief. Cross- Complainant’s demands for injunctive relief and restitution fail because there is no viable substantive basis for such relief. These forms of relief are viable only where independent claims supporting such relief are viable. See, e.g., Padayachi v. Indymac Bank, No C 09-5545 JF (PVT), 2010 WL 1460309, at *2 (N.D. Cal. Apr. 9, 2010) (one “may not maintain a claim for declaratory relief unless one of his other claims survives the motion to dismiss”); Santos v. Countrywide Home Loans, No. CIV.20902642WBS DAD, 2009 WL 3756337, at *5 (E.D. Cal. Nov. 6, 2009) (“Declaratory and injunctive relief are not independent claims, rather they are forms of relief”); Shell Oil Co. v. Richter, 52 Cal. App. 2d 164, 168 (1942) (“Injunctive relief is a remedy and not, in itself, a cause of action, and a cause of action must exist before injunctive relief may be granted.”) As set forth above, each of Plaintiff’s claims fails to state a claim. Moreover, causes of action for violation of the FCRA, negligence and defamation do not support restitution or injunctive damages. 15 U.S.C. § 1681n; 15 U.S.C. § 1681o. Here, because Cross-Complainant has failed to state a claim for any of his causes of action and, even if he succeeded in stating a claim, none of his alleged claim entitles him to restitution or injunctive damages, Cross-Complaint’s request for this relief should be dismissed. See, e.g. Ruiz v. Cent. Mortg. Co., No. CV1408627MMMSSX, 2015 WL 12683873, at *9 (C.D. Cal. Apr. 2, 2015). / / / / / / / / / / / / / / / / / / Case 2:17-cv-02484-DMG-MRW Document 9-1 Filed 04/06/17 Page 17 of 18 Page ID #:146 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 18 Case No. 2:17-cv-02484-DMG-MRW Memorandum of Points and Authorities V. CONCLUSION Based on the foregoing, Wells Fargo respectfully requests that this Court dismiss the Cross-Complaint without leave to amend. DATED: April 6, 2017 SEVERSON & WERSON A Professional Corporation By: /s/ Courtney C. Wenrick Courtney C. Wenrick Attorneys for Cross-Defendant WELLS FARGO BANK, N.A. Case 2:17-cv-02484-DMG-MRW Document 9-1 Filed 04/06/17 Page 18 of 18 Page ID #:147 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10626186.1 Case No. 2:17-cv-02484-DMG-MRW [Proposed] Order Granting Motion to Dismiss with Prejudice. COURTNEY C. WENRICK (State Bar No. 286380) ccw@severson.com SEVERSON & WERSON A Professional Corporation The Atrium 19100 Von Karman Avenue, Suite 700 Irvine, California 92612 Telephone: (949) 442-7110 Facsimile: (949) 442-7118 MARK D. LONERGAN (State Bar No. 143622) mdl@severson.com REBECCA S. SAELAO (State Bar No. 222731) rss@severson.com SEVERSON & WERSON A Professional Corporation One Embarcadero Center, Suite 2600 San Francisco, California 94111 Telephone: (415) 398-3344 Facsimile: (415) 956-0439 Attorneys for Cross-Defendant WELLS FARGO BANK, N.A. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA — WESTERN DIVISION WELLS FARGO BANK, N.A., Plaintiff, vs. DAVID MARTIN JR, an individual, Defendant. Case No. 2:17-cv-02484-DMG-MRW Hon. Dolly M. Gee Ctrm. 8C, 8th Floor [PROPOSED] ORDER GRANTING WELLS FARGO BANK N.A.’S MOTION TO DISMISS WITH PREJUDICE. Date: May 19, 2017 Time: 9:30 a.m. Crtrm.: 8C Action Filed: October 24, 2016 X-C Filed: February 27, 2017 Removal Date: March 30, 2017 Trial Date: None Set DAVID MARTIN JR, Cross-Complainant, vs. WELLS FARGO BANK, N.A., Cross-Defendant. Case 2:17-cv-02484-DMG-MRW Document 9-2 Filed 04/06/17 Page 1 of 2 Page ID #:148 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10626186.1 Case No. 2:17-cv-02484-DMG-MRW [Proposed] Order Granting Motion to Dismiss with Prejudice. [PROPOSED] ORDER Defendant Wells Fargo Bank, N.A. (“Wells Fargo”) has moved this Court to dismiss cross-complainant David Martin Jr.’s (“Cross-Complainant”) cross- complaint (“Cross-Complaint”) in this action pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. The Court, having considered the briefs and other documents in support of and in opposition to the motion and being full advised in this matter finds as follows: IT IS HEREBY ORDERED that Wells Fargo’s motion to dismiss is GRANTED. The Cross-Complaint in this case is dismissed with prejudice. IT IS SO ORDERED. DATED: _________________, 2017 Hon. Dolly M. Gee Case 2:17-cv-02484-DMG-MRW Document 9-2 Filed 04/06/17 Page 2 of 2 Page ID #:149 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07685.1820/10591814.1 Case No. 2:17-cv-02484-DMG-MRW Proof of Service PROOF OF SERVICE Wells Fargo Bank, N.A. v. Martin USDC Central District Case No. TBD At the time of service, I was over 18 years of age and not a party to this action. I am employed in the County of Orange, State of California. My business address is The Atrium, 19100 Von Karman Avenue, Suite 700, Irvine, CA 92612. On April 6, 2017, I served true copies of the following document(s): WELLS FARGO BANK, N.A.’S NOTICE OF MOTION AND MOTION TO DISMISS CROSS-COMPLAINANT DAVID MARTIN JR.’S CROSS-COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF on the interested parties in this action as follows: David Martin Jr. 1021 S. Albany St. #18 Los Angeles, CA 90015 Defendant/Cross-Complainant In Pro Per Telephone: (310) 593-1834 mardoeonline@gmail.com BY CM/ECF NOTICE OF ELECTRONIC FILING: I electronically filed the document(s) with the Clerk of the Court by using the CM/ECF system. Participants in the case who are registered CM/ECF users will be served by the CM/ECF system. Participants in the case who are not registered CM/ECF users will be served by mail or by other means permitted by the court rules. I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. I declare that I am employed in the office of a member of the bar of this Court at whose direction the service was made. Executed on April 6, 2017, at Irvine, California. Taylor P. Hankins Case 2:17-cv-02484-DMG-MRW Document 9-3 Filed 04/06/17 Page 1 of 1 Page ID #:150