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Bromfield v. Hsbc Bank Nevada

United States District Court, Ninth Circuit

January 13, 2014

DAMION BROMFIELD, Plaintiff,
v.
HSBC BANK NEVADA and PORTFOLIO RECOVERY ASSOCIATES, LLC, Defendants.

Damion Bromfield, Portland, OR, Plaintiff pro se.

Marissa A. Bender, Bishop, White, Marshall & Weibel, P.S., Seattle, WA, Attorneys for Defendant HSBC Bank Nevada, NA.

OPINION AND ORDER

MICHAEL H. SIMON, District Judge.

Plaintiff Damion Bromfield filed a pro se complaint in forma pauperis on March 18, 2013. Dkt. 2. Plaintiff's complaint asserts claims against Defendant HSBC Bank Nevada ("HSBC") and Portfolio Recovery Associates, LLC ("PRA"). Both Defendants moved to dismiss all of Plaintiff's claims for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Dkts. 16, 20. The Court granted these motions and dismissed the case without prejudice. Dkt. 26. Plaintiff filed his First Amended Complaint on August 28, 2013. Dkt. 28. Pursuant to a stipulation between Plaintiff and PRA, PRA was dismissed as a defendant in this action. HSBC filed a second motion to dismiss (Dkt. 32), seeking to dismiss all of Plaintiff's claims alleged in the First Amended Complaint. For the reasons discussed below, HSBC's motion is granted in part and denied in part.

STANDARDS

A motion to dismiss for failure to state a claim may be granted only when there is no cognizable legal theory to support the claim or when the complaint lacks sufficient factual allegations to state a facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint's factual allegations, the court must accept as true all well-pleaded material facts alleged in the complaint and construe them in the light most favorable to the non-moving party. Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012); Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). To be entitled to a presumption of truth, allegations in a complaint "may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively." Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir 2011). All reasonable inferences from the factual allegations must be drawn in favor of the plaintiff. Newcal Indus. v. Ikon Office Solution, 513 F.3d 1038, 1043 n.2 (9th Cir. 2008). The court need not, however, credit the plaintiff's legal conclusions that are couched as factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009).

A complaint must contain sufficient factual allegations to "plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation." Baca, 652 F.3d at 1216. "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." Iqbal, 556 U.S. at 663 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)).

A court must liberally construe the filings of a pro se plaintiff and afford the plaintiff the benefit of the doubt. Hebbe v. Pliler, 627 F.3d 338, 342 (9th Cir. 2010). Under Federal Rule of Civil Procedure 8(a)(2), however, every complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." This standard "does not require detailed factual allegations, '" but does demand "more than an unadorned, the defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). "A pleading that offers labels and conclusions' or a formulaic recitation of the elements of a cause of action will not do.'" Id. (quoting Twombly, 550 U.S. at 555).

PLAINTIFF'S ALLEGATIONS[1]

In his First Amended Complaint, Plaintiff fails to allege when, or even that, he obtained a credit card from HSBC. The Court infers the fact that Plaintiff obtained a credit card from HSBC based on the other allegations in the First Amended Complaint. Plaintiff similarly fails to allege in his First Amended Complaint when Plaintiff's credit card was allegedly lost or stolen, although in his memorandum in opposition to HSBC's motion to dismiss, he states that he believes it was approximately December 2010.

The specific allegations of the First Amended Complaint are that Plaintiff properly notified HSBC of the fact that Plaintiff's credit card had been stolen. Am. Compl. ¶ 1. Plaintiff reported the card was lost or stolen pursuant to the procedures he had been provided by HSBC, including those listed on HSBC's web site, by calling a toll-free telephone number. Id. ¶¶ 2, 3, 8, 19. HSBC does not have a procedure under which credit card holders can report lost or stolen cards in writing. Id. ¶11. If HSBC would have had an option to report a lost or stolen card in writing, Plaintiff would have complied with that procedure. Id. ¶ 15.

HSBC took "no action whatsoever" in response to Plaintiff's report of the lost or stolen card. Id. ¶ 9. HSBC failed properly to investigate Plaintiff's report and failed to deactivate Plaintiff's credit card after he reported it had been lost or stolen. Id. ¶ 32. At the time the card was lost or stolen, Plaintiff had a balance of approximately $2, 000 and after the card was lost or stolen, the balance grew to approximately $4, 200. Id. ¶¶ 4, 5. Until his credit card was lost or stolen, Plaintiff had paid his monthly bills and had not defaulted on any amounts owed to HSBC. Id. ¶ 22.

HSBC did not send any information to Plaintiff after he reported that his credit card had been lost or stolen, but then attempted to collect from Plaintiff the full balance owed on the card, including the unauthorized charges. Id. ¶¶ 1, 8, 10, 12, 21. Plaintiff informed HSBC that the charges imputed to him were inaccurate. Id. ¶ 23. Plaintiff also informed PRA that the charges were disputed. Id. ¶ 25. HSBC debited from Plaintiff's bank account amounts to reimburse HSBC for the unauthorized charges made using Plaintiff's credit card. Id. ¶ 7.

DISCUSSION

Construing the Amended Complaint liberally, the Court views Plaintiff as asserting both statutory and common law claims. Plaintiff asserts claims against HSBC under the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601, et seq. (as amended by the Fair Credit Billing Act of 1974) and the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681, et seq. Specifically, Plaintiff asserts claims under 15 U.S.C. §§ 1643, 1666, 1666a, and § 1681s-2(b). Plaintiff also asserts state law claims for breach of contract, breach of fiduciary duty, conversion, "false advertising, " and violation of Oregon's Unlawful Debt Collection Practices Act ("UDCPA"). Each of Plaintiff's claims is addressed, in turn, below.[2]

A. Federal Statutory Claims

1. TILA

a. TILA provision regarding consumer credit card holder liability for ...


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