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Cederberg v. NW Priority Cu

United States District Court, D. Oregon, Portland Division

March 27, 2018



          Ann Aiken United States District Judge

         Defendants, Northwest Priority Credit Union ("NWPCU"), Brad Abrams, and Sarah Muffenbier, move to dismiss plaintiffs Regina Cederberg and Beau Cederberg's first amended complaint ("FAC"). (doc. 11). For tbe reasons discussed below, defendants' Motion is GRANTED IN PART, and DENIED IN PART.


         The facts are drawn from plaintiffs' FAC; they are accepted as true and construed in the light most favorable to plaintiffs for purposes of this motion. Skilstaf, Inc. v. CVS Caremark Corp., 669 F.3d 1005, 1014 (9th Cir, 2012). Plaintiffs are a married couple who were pregnant in August 2015, when Ms. Cederberg first contacted defendant seeking a loan to purchase a home in Warrenton, Oregon. Ms. Cederberg discussed the loan process with NWPCU loan officer Brad Abrams. She informed him that she was pregnant and would soon be on maternity leave. Ms. Cederberg alleges that Abrams told her that if she took maternity leave her income from her employment would not be considered as a part of her loan application until she had been back at work for 30 days.[1]

         When Ms. Cederberg's next contacted Abrams, she alleges that she informed "him that refusing to allow her to apply for [a] loan because she was on maternity leave was a violation of the law." FAC. at ¶ 14. Abrams then sent Ms. Cederberg a loan application and a list of documents that would be required by a lender.

         Following this interaction, defendant Sarah Muffenbier took over Ms. Cederberg's case and ultimately processed her application. NWPCU submitted Ms. Cederberg's application for approval, but the application was allegedly denied based on Ms. Cederberg's insufficient credit scores. Muffenbier informed plaintiff that she needed a score of 620 to qualify for the loan. Plaintiff alleges that the report upon which Muffenbier relied was not directly from any credit reporting bureau. Rather, NWPCU obtained a credit report from a service that pulls reports from all three credit reporting agencies ("CRAs") and compiles them into one report. Def. Mot. Dismiss at 3. Muffenbier relayed that Ms. Cederberg's score from all three CRAs was below the 620 score required for loan for which Ms. Cederberg was applying.

         Ms, Cederberg alleges that she disputed that her credit score was too low and provided credit reports to Muffenbeir that were directly from the two of the credit reporting bureaus. These reports purportedly showed that Ms. Cederberg had a credit score over 620. Muffenbier informed Ms. Cederberg that she had to use the scores provided by her broker when reviewing Ms. Cederberg's loan application. Ms. Cederberg's application was ultimately denied on or about October 2, 2015. Plaintiffs were ultimately pre-approved for a home loan from another lender following the final denial by defendant.

         On September 29, 2017, plaintiffs filed a complaint before this Court alleging: (1) violations of the Fair Housing Act, Title VIII of the Civil Rights Act, 42 U.S.C. § 3061, 3067 ("FHA"); (2) violations of Oregon's Unlawful Discrimination in Real Property Transactions Act, O.R.S. 659A.42l ("UDRPTA"); and (3) negligence. On December 8, 2017, with leave from the Court, plaintiffs filed their FAC, clarifying their discrimination claims and removing their negligence claim. On December 22, 2017, NWPCU filed the present motion to dismiss, with prejudice, pursuant Fed R. Civ. P. 12(b)(6).


         Under Rule 12(b)(6), a complaint must contain sufficient factual allegations, which, if assumed to be true, "state a claim for relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is plausible on its face if the factual allegations in the complaint allow a court to reasonably infer the defendant's liability based on the alleged conduct. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "The court must accept as true the allegations in the complaint and construe them in favor of the plaintiff." Din v. Kerry, 718 F.3d 856, 859 (9th Cir. 2013). The factual allegations in the complaint must present more than "the mere possibility of misconduct, " Id. at 679, and more than a "formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555.


         Defendants argue that the FAC is conclusory and lacks factual support and that plaintiffs are unable to establish the requisite elements of their claims. Additionally, defendants assert that Beau Cederberg's claim should be dismissed on the grounds that he is not a member of a protected class and that he had no interaction with defendants, I address each argument in turn.

         I. § 3605 FHA Claim

         Under the FHA, it is "unlawful for any person or other entity whose business includes engaging in residential real estate-related transactions to discriminate against any person in making available such a transaction, or in the terms or conditions of such a transaction, because of race, color, religion, sex, handicap, familial status, or national origin." 42 U.S.C. § 3605. Thus, to state a claim under the FHA, "the plaintiffs must plead that (1) they were a member of a protected class; (2) they attempted to engage in a 'real estate-related transaction5 with [the defendants], and met all relevant qualifications for doing so; (3) [the defendants] refused to transact business with the plaintiffs despite their qualifications; and (4) the defendants continued to engage in that type of transaction with other parties with ...

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