Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_15-cv-00085/USCOURTS-cand-3_15-cv-00085-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 15:1681 Fair Credit Reporting Act

---

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

United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ARNOLDO CASILLAS,

Plaintiff,

v.

MTC FINANCIAL, INC, et al.,

Defendants.

Case No. 15-cv-00085-JD 

ORDER GRANTING MOTIONS TO 

DISMISS

Re: Dkt. Nos. 14, 19

In this action for breach of contract and related claims over a mortgage, defendants Bank 

of America, N.A. (“Bank of America”) and MTC Financial, Inc. dba Trustee Corps (“Trustee 

Corps”) move to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6). The 

Court grants both motions and dismisses plaintiff’s one remaining federal claim -- a Fair Credit 

Reporting Act (“FCRA”) claim -- with leave to amend. The Court declines to exercise 

supplemental jurisdiction over the state law claims until Casillas successfully alleges an FCRA 

claim.

BACKGROUND

In 2007, plaintiff Arnoldo Casillas obtained a $400,000 mortgage loan from Bank of 

America. Dkt. No. 1, Compl., Ex. 3 at 2. The loan was secured by real property in Newark, 

California under a deed of trust, which identifies Mr. Casillas and Irma V. Jasso as the borrowers, 

Bank of America as the lender and beneficiary, and PRLAP, Inc. as the trustee. Id., Ex. 2. On 

October 7, 2010, Bank of America’s agent, Quality Loan Service Corporation (“QLS”), recorded a 

Notice of Default. RJN, Ex. A. The following day, the interest on the loan was transferred to 

BAC Home Loans Servicing, LP, (“BAC”) which, following a merger, eventually became

defendant Bank of America. RJN, Ex. B. In November 2010, QLS was substituted as trustee 

Case 3:15-cv-00085-JD Document 40 Filed 05/05/15 Page 1 of 5
2

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

United States District Court

Northern District of California

under the deed of trust. RJN, Ex. C. QLS recorded a Notice of Trustee’s Sale on January 12, 

2011, and subsequent notices on April 10, 2012 and August 21, 2013. RJN, Exs. D, E, F. On 

August 20, 2014, Trustee Corps was substituted as trustee under the deed of trust. RJN, Ex. G. 

Trustee Corps then recorded a notice of default on August 25, 2014 and a Notice of Trustee’s Sale 

on December 4, 2014. RJN, Ex. H, I. Nowhere in the complaint does Casillas allege the property 

has been sold. 

Casillas alleges that Bank of America and Trustee Corps recorded fraudulent foreclosure 

notices, lack standing to initiate foreclosure, breached the dead of trust and damaged plaintiff’s 

credit. The complaint purports to state claims for (1) violation of the FCRA; (2) breach of 

contract; (3) fraud; (4) violation of the California Homeowner Bill of Rights; and (5) violation of 

the Equal Credit Opportunity Act (“ECOA”). Dkt. No. 1 at 15-27. Both defendants move to 

dismiss all five of plaintiff’s causes of actions, and Casillas has voluntarily dismissed his ECOA 

claim. Dkt. No. 22 at 1. That claim is therefore dismissed, and the Court now turns to the

remaining four claims. 

LEGAL STANDARD

A Rule 12(b)(6) motion to dismiss “can be based on the lack of a cognizable legal theory 

or the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica 

Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990) (citation omitted). To avoid dismissal, the 

plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. 

Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the pleaded 

factual content 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 at 556). In 

evaluating a motion to dismiss, the Court must assume that the plaintiff’s allegations are true and 

must draw all reasonable inferences in his or her favor. Usher v. City of Los Angeles, 828 F.2d 

556, 561 (9th Cir. 1987). However, the Court need not “accept as true allegations that are merely 

conclusory, unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Sec. 

Litig., 536 F.3d 1049, 1055 (9th Cir. 2008). 

Case 3:15-cv-00085-JD Document 40 Filed 05/05/15 Page 2 of 5
3

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

United States District Court

Northern District of California

When the Court dismisses a complaint, it “should grant leave to amend even if no request 

to amend the pleading was made, unless it determines that the pleading could not possibly be 

cured by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) 

(internal quotation marks and citation omitted).

DISCUSSION

Casillas brings a claim against both defendants alleging he is “entitled to recover 

damages...for negligent non-compliance with the Fair Credit Reporting Act [(“FCRA”)] pursuant 

to 15 U.S.C. § 1681(n)(a)(2).” Dkt. No. 1 ¶ 66. The purpose of the FCRA is to protect consumers 

by imposing a set of duties upon consumer reporting agencies (“CRAs”). Gorman v. Wolpoff & 

Abramson, LLP, 584 F.3d 1147, 1153 (9th Cir. 2009). The statute’s goal is to ensure that CRAs 

behave in a fair and impartial way while assembling, evaluating, and disseminating information 

regarding consumers’ credit. Gorman, 584 F.3d at 1153. Casillas claims that both Bank of 

America and Trustee Corps violated their duty to conduct a reasonable investigation into his 

claims that the information on his credit report was incorrect. Id. ¶¶ 66-68. According to 

Casillas, he sent a letter to the defendants alerting them of the false information. Id. ¶¶ 66-67. 

Casillas seems to base his FCRA claim on two distinct sections of the FCRA, 15 U.S.C. § 

1681i(a) and § 1681s-2(b). Turning first to § 1681i(a), this section provides, in relevant part:

[I]f the completeness or accuracy of any item of information 

contained in a consumer’s file at a consumer reporting agency is 

disputed...the agency shall, free of charge, conduct a reasonable 

investigation to determine whether the disputed information is 

inaccurate.

15 U.S.C. § 1681i(a). By its express terms, this section limits the duty to conduct a reasonable 

investigation to CRAs. See Mendaros v. JPMorgan Chase Bank, N.A., No. 14-CV-01260-JST, 

2014 WL 3373447, at *6 (N.D. Cal. July 9, 2014). The statute defines a CRA as “any person 

which...regularly engages...in the practice of assembling or evaluating consumer credit 

information or other information on consumers for the purpose of furnishing consumer reports to 

third parties[.]” 15 U.S.C. § 1681 a(f). 

The complaint is devoid of any facts giving rise to the inference that either defendant is a 

CRA. In fact, the complaint suggests otherwise, specifically distinguishing the defendants from a

Case 3:15-cv-00085-JD Document 40 Filed 05/05/15 Page 3 of 5
4

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

United States District Court

Northern District of California

CRA. See, e.g. Dkt. No. 1 ¶ 66 (“Plaintiff sent written notice [to] Defendants and to all three (3) 

CRA’s1). The complaint contains no allegations that either Bank of America or Trustee Corps’s 

role in the events giving rise to Casillas’s claim gave defendants authority to perform any actions 

constituting the reporting of plaintiff’s credit. Moreover, no facts suggest that either defendant 

engaged in any practice pertaining to the reporting of any consumer credit information. The Court 

is skeptical that this deficiency can be cured, but Casillas will have one opportunity to amend. 

Section 1681s-2 serves a different function. It imposes certain duties on “furnishers,” the 

sources that provide credit information to CRAs. Gorman, 584 F.3d at 1153. One duty is, upon 

notice from the CRA that the consumer disputes information previously provided by the furnisher, 

to conduct an investigation with respect to the disputed information and take steps to ensure that 

any errors are corrected. See 15 U.S.C. § 1681s-2. This duty arises “only after the furnisher 

receives notice of dispute from a CRA; notice of a dispute received directly from the consumer 

does not trigger furnishers’ duties under subsection (b).” Gorman, 584 F.3d at 1154 (citation 

omitted). 

Plaintiff’s complaint fails to state a claim under § 1681s-2. No factual allegations suggest 

that either defendant has furnished any information to a CRA. Plaintiff’s allegation that 

“defendants” are “provider[s] of information” is wholly conclusory and without any factual 

support at all. Dkt. No. 1 ¶ 66. And Casillas alleges that he personally notified the defendants that 

“false information was being used.” Id. Notice of a dispute from a consumer, like Casillas, does 

not trigger the duty to investigate. See Gorman, 584 F.3d at 1154. Nothing in the complaint 

indicates that any CRA sent notice of plaintiff’s disputes to Bank of America or Trustee Corps. 

Plaintiff’s Section 1681s-2 claim against defendants is therefore dismissed with leave to amend. 

Plaintiff raises several state law causes of action. A district court may decline to exercise 

supplemental jurisdiction if it has dismissed all claims over which it has original jurisdiction. 28 

U.S.C. § 1367(c)(3). Here, plaintiff has voluntarily dismissed one federal claim and the Court has 

dismissed the other, and therefore declines to exercise supplemental jurisdiction over plaintiff’s 

 1 Casillas refers to “three [] CRA’s,” but never identifies the identities of these agencies. If he 

amends, he should address this deficiency, as well. Dkt. No. 1 ¶ 66. 

Case 3:15-cv-00085-JD Document 40 Filed 05/05/15 Page 4 of 5
5

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

United States District Court

Northern District of California

remaining state law claims. The state law claims are dismissed without prejudice, and the Court 

will revisit this issue if Casillas chooses to amend the FCRA claim. 

CONCLUSION

Defendants’ motions to dismiss are granted. Plaintiff may try to reallege the FCRA claim 

within 10 days of entry of this order, along with any pertinent state law claims that have already 

been pleaded. If the plaintiff chooses to amend, the Court advises him to state which allegations 

are being alleged against each defendant with more specificity and clarity. 

The plaintiff indicated in the parties’ joint case management statement that he will seek 

leave to amend to include Irma V. Jasso as a necessary party in this case. Dkt. No. 37 at 10. If 

plaintiff files an amended complaint, Ms. Vasso should be joined at that time. Casillas may not 

add any other new claims or parties to the complaint. 

IT IS SO ORDERED.

Dated: May 5, 2015 

________________________

JAMES DONATO

United States District Judge

Case 3:15-cv-00085-JD Document 40 Filed 05/05/15 Page 5 of 5