United States District Court, W.D. Wisconsin
BERNARD P. LENCZNER and LISA D'ALESSIO LENCZNER, Plaintiffs,
WELLS FARGO, N.A., et al, Defendants.
OPINION AND ORDER
WILLIAM M. CONLEY District Judge.
matter is before the court on defendant Wells Fargo's
motion for reconsideration. (Dkt. #17.) Plaintiffs Bernard P.
Lenczner and Lisa D'Alessio Lenczner filed this lawsuit
against defendants “Wells Fargo, N.A., as Trustee for
the Holders of Park Place Securities, Inc., Asset-back Passed
Through Certificate Series 2004, and Does 1-100”
(collectively, “Wells Fargo”), after Wells Fargo
attempted to collect on plaintiffs' defaulted mortgage
and, ultimately, filed a foreclosure action on
plaintiffs' home. Plaintiffs allege that Wells Fargo
violated the Fair Debt Collection Practices Act
(“FDCPA”), the Fair Credit Reporting Act
(“FCRA”) and state law in connection with its
collection efforts and the foreclosure action. Wells Fargo
responded to the suit by filing a motion to dismiss the
complaint, arguing that plaintiffs' claims were barred by
the Rooker-Feldman doctrine, as well as the common
law principles of abstention and/or claim preclusion.
September 9, 2016, this court granted defendants' motion
to dismiss in part, and denied it in part. (Dkt. #16.) The
court concluded that claims 4, 5 and 6 of plaintiffs'
complaint must be dismissed under the Rooker-Feldman
doctrine because those claims were direct challenges to the
state court foreclosure judgment. The court denied the motion
as to claims 1, 2 and 3, however, because those claims did
not merely challenge the state foreclosure judgment, but also
allege injuries preceding and otherwise distinct from the
state foreclosure judgment. Thus, the court concluded that
they were not barred by Rooker-Feldman; nor were
they barred by the abstention or preclusion doctrines.
Wells Fargo's motion for reconsideration, it argues that
the court erred in failing to dismiss claims 1, 2 and 3.
Contrary to the court's interpretation, Wells Fargo
argues that claims 1, 2 and 3 are based entirely on the
theory that Wells Fargo did not own plaintiffs' debt and
did not have the right to collect on the debt or foreclose on
the mortgage. Accordingly, Wells Fargo argues that the court
should have dismissed those claims for the same reason it
dismissed plaintiffs' other claims.
reconsideration, the court agrees with Wells Fargo that
plaintiffs' claims under the FCRA and state law are based
solely on the theory that Wells Fargo did not have the right
to collect on plaintiffs' debt. Therefore, the FCRA and
state law claims will be dismissed. However, the court will
deny the motion with respect to plaintiffs' FDCPA claims
because plaintiffs' complaint contains allegations
supporting those claims that do not depend on a finding that
Wells Fargo lacked the right to collect plaintiffs' debt.
following three claims survived Wells Fargo's motion to
dismiss: (1) Wells Fargo violated the Fair Debt Collection
Practices Act; (2) Wells Fargo violated the Fair Credit
Reporting Act; and (3) Wells Fargo intentionally inflicted
emotional distress on plaintiffs.
Fargo argues that the only factual allegation
underlying these claims is Wells Fargo's alleged
non-ownership of their mortgage loan. The court discusses
each claim below.
Fair Debt Collection Practices Act
Fargo argues that the only basis for plaintiffs' FDCPA
claim is plaintiffs' allegations that Wells Fargo
wrongfully pursued collection of plaintiffs' mortgage by
falsely claiming ownership of the underlying loan, initiating
a foreclosure action and obtaining a foreclosure judgment.
Wells Fargo further argues that plaintiffs' complaint
contains no allegations that Wells Fargo took any prohibited
action before, during or after the foreclosure action that
would support a claim under the FDCPA.
court explained in the previous order, however, plaintiffs
make several allegations regarding actions and injuries that
preceded the state court foreclosure judgment. Specifically,
plaintiffs allege that Wells Fargo: (1) misrepresented the
amount of the debt in its communications in violation of
§ 1692e(2); (2) failed to communicate to credit
reporting agencies that plaintiff had disputed the debt in
violation of § 1692e(8); (3) failed to disclose in its
communications that it was a “debt collector” in
violation of § 1692e(11); (4) falsely stated that it was
the original creditor, in violation of § 1692g; and (5)
failed to provide verification of the debt in violation of
§ 1692g. (See Plts.' Cpt. ¶¶ 39,
40, 45, 47, 49, 59, 62.) Although Wells Fargo no doubt
disputes each of these allegations, they are sufficient to
plead claims under the FDCPA that are distinct from, and not
inextricably intertwined with, the state foreclosure action
or any determination regarding Wells Fargo's ownership of
the debt. Therefore, Wells Fargo's request for
reconsideration of the order denying dismissal of the FDCPA
claims will be denied. The court anticipates that the
remaining claims are straightforward and likely resolvable at
summary judgment based on a review of the actual notices and
communications between Wells Fargo and plaintiffs.
Fair Credit Reporting Act
contrast to plaintiffs' claims under the FDCPA, a closer
review of plaintiffs' FCRA claim confirms that it is
based solely on the theory that Wells Fargo lacked authority
to collect plaintiffs' debt. In particular, although
plaintiffs identify a number of alleged violations of FCRA,
each violation begins the fundamental assumption that Wells
Fargo obtained plaintiffs' credit information without a
“permissible purpose” under FCRA.
FCRA provides that a credit report may be obtained by a
person who “intends to use the information in
connection with a credit transaction involving the consumer
... and ... involving the ... review or collection of an
account of the consumer.” 15 U.S.C. §
1681b(a)(3)(A). In other words, a debt collector's
requesting a consumer's credit report for the purpose of
collecting on an account does not amount to a violation of
FCRA because such use is authorized by statute as a
permissible purpose. See Miller v. Wolpoff &
Abramson, LLP, 309 Fed.Appx 40, 43 (7th Cir. 2009)
(“because [defendant] was obtaining the [credit] report
on behalf of ... the owner of the debt, [defendant] had a
legitimate purpose” under 1681b(3)(A)). Here, it is
clear from plaintiffs' allegations that Wells Fargo
obtained plaintiffs' credit report as part of its efforts
to collect plaintiffs' debt. This is a permissible