• Plaintiffs’ Claims against Mortgage Lender Dismissed for Failure to State a Claim
  • August 2, 2010 | Author: Erik Grohmann
  • Law Firm: Strasburger & Price, LLP - Frisco Office
  • Corcoran v. Saxon Mortg. Servs., 2010 U.S .Dist. LEXIS 51040 (D. Mass. May 24, 2010)

    Facts: Plaintiff brought suit in state court against Saxon Mortgage Services, Inc. (“Saxon”), his mortgage lender, for various violations of state and federal law, including breach of contract, unjust enrichment, negligence, violation of the Truth in Lending Act, breach of fiduciary duty,  predatory lending, fraud and breach of the covenant of good faith and fair dealing. Saxon removed the case to federal court and moved to dismiss all counts.  Plaintiff opposed the motion and also requested leave to file an amended complaint, asserting several additional federal law claims, including a cause of action under the Fair Credit Reporting Act (“FCRA”).  

    • Fraud. Plaintiff alleged that the loan agreement in question was induced by intentional misrepresentations, fraud, and deceit perpetrated by Defendant, and that he relied on false statements made by Defendant regarding a cap on the loan’s interest rate. At a bare minimum, a plaintiff alleging fraud must specify the identity of the person(s) making the representation, the contents of the misrepresentation, and where and when it took place. A plaintiff should also allege the materiality of the misrepresentation, his reliance thereon and the resulting harm. Under Federal Rule of Civil Procedure 9(b), Plaintiff’s allegations of fraud were woefully inadequate. He did not identify with any degree of specificity: 1) the misrepresentations allegedly made by Saxon, 2) the person or persons who made them, 3) when and where they took place, 4) their materiality, 5) his reliance on them, or 6) the resulting harm. Accordingly, because the complaint did not come close to complying with Rule 9(b), Plaintiff’s fraud claim w s dismissed.
    • Furnisher Duties. Plaintiff sought leave to amend to add a claim under §1681s-2(a) of the FCRA, which relates to furnisher duties when providing information to a CRA. Since § 1681s-2(a) creates no private cause of action, Plaintiff’s attempted claim failed.  Accordingly, his Motion for Leave to Amend was denied as the proposed claim would have been futile.