Hawthorne v. Rushmore Loan Management Services LLC
This text of Hawthorne v. Rushmore Loan Management Services LLC (Hawthorne v. Rushmore Loan Management Services LLC) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
ERICA N. HAWTHORNE,
Plaintiff, Civil Action No. 20-393 (RDM) v.
RUSHMORE LOAN MANAGEMENT SERVICES, LLC,
Defendant.
MEMORANDUM OPINION AND ORDER
Plaintiff Erica Hawthorne, the record owner and borrower for a property in the District of
Columbia, brings claims for breach of contract, negligence, negligent misrepresentation,
intentional infliction of emotional distress, defamation, and violations of the D.C. Consumer
Protection Procedures Act, the Fair Credit Reports Act, and the Fair Debt Collection Practices
Act against the entity that serviced her mortgage, Defendant Rushmore Loan Management
Services, LLC (“Rushmore”). Rushmore timely removed this action from D.C. Superior Court
and has now moved to dismiss all of Plaintiff’s claims pursuant to Federal Rule of Civil
Procedure 12(b)(6). Dkt. 7. For the reasons set forth below, the Court will GRANT in part and
DENY in part Rushmore’s motion.
I. BACKGROUND
A. Factual Background
For purposes of resolving Rushmore’s motion to dismiss, the Court must consider the
complaint as a whole, accepting the factual allegations therein as true, and may also consider
materials attached to or incorporated by reference into the complaint. See Tellabs, Inc. v. Makor Issues & Rts., Ltd., 551 U.S. 308, 322 (2007); Banneker Ventures, LLC v. Graham, 798 F.3d
1119, 1133 (D.C. Cir. 2015). The doctrines of incorporation by reference and attachment have
their limits, however. For one, documents typically are incorporated into the pleadings only if
they are “central to” the pleadings, Slovinec v. Georgetown Univ., 268 F. Supp. 3d 55, 59
(D.D.C. 2017) (quoting Strumsky v. Washington Post Co., 842 F. Supp. 2d 215, 217–18 (D.D.C.
2012)), or if they are “extensively referenced and relied upon” in the pleadings, 5A Charles Alan
Wright & Arthur R. Miller, Federal Practice & Procedure § 1327 (4th ed. 2021). Moreover, if a
party contests the authenticity of documents referenced in or attached to the complaint, see
Slovinec, 268 F. Supp. 3d at 59, consideration of these records may convert the motion to dismiss
into a motion for summary judgment, see Fed. R. Civ. P. 12(d); cf. Banneker Ventures, LLC, 798
F.3d at 1133 (noting that “[a] district court may consider a document that a complaint
specifically references [and that is integral to the complaint] without converting the motion into
one for summary judgment”). Here, Plaintiff’s complaint references and relies upon certain loan
records, and neither party disputes the accuracy or authenticity of any of those records, or argues
that consideration of those records requires conversion of the pending motion into a motion for
summary judgment, see Fed. R. Civ. P. 12(d). The Court will, accordingly, rely on these
unopposed materials for purposes of resolving the pending motion.
Plaintiff, who is now a New Jersey resident, “is the record owner and borrower” of a
property located in the District of Columbia, for which she obtained a mortgage loan of
$256,267.00 on November 30, 2007, from Real Estate Mortgage Network, Inc. Dkt. 1-1 at 2–3
(Compl. ¶¶ 2–4); Dkt. 7-2 at 2–8 (Ex. A). Plaintiff fell behind on her mortgage in 2015 as a
result of “out-of-pocket medical expenses and [her] student loan transitioning out of
2 forbearance.” Dkt. 1-1 at 3 (Compl. ¶ 5). The next year, Rushmore, a limited liability company
based in Delaware, assumed responsibility for servicing her mortgage loan. Id. (Compl. ¶¶ 3, 6).
1. Trial Modification Agreement
“In or about October 2016,” Plaintiff “began the loss mitigation application process” with
Rushmore, for which she received an “assigned point of contact”—Shari Jabri-Gingras, an
employee of Rushmore. Id. (Compl. ¶¶ 7–8). On December 1, 2016, Rushmore notified
Plaintiff by email that she was approved for a loan modification, id. at 4 (Compl. ¶ 10), and on
January 26, 2017, again by email, it informed her that the offer letter had been sent out, id.
(Compl. ¶ 11). The offer stipulated a trial modification, allowing modified payments between
March 2017 and August 2017. Id. Plaintiff accepted and returned the offer letter shortly after
she received it. Id.; Dkt. 7-4 at 2–6 (Ex. C).
Despite her participation in the trial modification, Plaintiff began to receive notices of
foreclosure. The first such notice that Rushmore’s foreclosure counsel sent to Plaintiff was dated
March 9, 2017. Dkt. 1-1 at 4 (Compl. ¶ 12). Plaintiff contacted “Rushmore to express her
concern” and stated that “she felt like she was ‘going to have a heart attack’” because of the
stress of possible foreclosure. Id. (Compl. ¶ 13). When Plaintiff contacted Rushmore’s
foreclosure counsel on March 23, 2017, “to notify them that she was on an active trial
modification,” counsel explained “that Rushmore was delayed in communicating that
information to them and that [counsel] would ask the court to continue the [foreclosure] case[,]
since [Plaintiff] was in good standing with the modification.” Id. (Compl. ¶ 14). Rushmore’s
foreclosure counsel further confirmed that Rushmore “would not ask the court to foreclose and
that once a permanent modification was received, the case would be dismissed.” Id. On July 17,
2017, Rushmore informed Plaintiff that her application for final modification had been submitted
3 for review (a process that generally takes 3–4 weeks) and that “once [the documents] were
returned, it would take” another four weeks“for the system changes” to take effect, after which
Plaintiff could make payments online. Id. at 5 (Compl. ¶ 16).
During this same period, Plaintiff learned that Rushmore was reporting on her loan to
credit agencies in a way that negatively affected her credit score. Plaintiff contacted Rushmore
on May 16, 2017, “to inquire about” this “negative credit reporting,” but it is unclear if she
received any response. Id. (Compl. ¶ 15). Then, on September 17, 2017, Plaintiff informed
Rushmore “that she [had] received an email from TransUnion indicating that the tradeline”—that
is, the record of activity for a credit account—“for her loan was reported as having been
foreclosed and that her payment due for September 2017 was $20,000.00.” Id. (Compl. ¶ 17).
Two days later, Plaintiff contacted Rushmore in response to correspondence she had received
from the company “stating that [she] was in default and should pursue a modification.” Id.
(Compl. ¶ 18). Plaintiff told Rushmore that she “was confused and caught off guard” by this
notice. Id. Around the same time, Plaintiff received a mailing indicating that she qualified for a
loan modification. Id. (Compl. ¶ 19). Shortly thereafter, on October 2, 2017, Jabri-Gingras
notified Plaintiff that her new point of contact with Rushmore would be Fred Taggert, who
would contact her. Id. (Compl. ¶¶ 19–20).
Taggert did not contact Plaintiff in the next few days, so on October 5, 2017, Plaintiff
asked Jabri-Gingras for Taggert’s direct number or to provide Taggert with Plaintiff’s contact
information. Id. at 6 (Compl. ¶ 22).
Free access — add to your briefcase to read the full text and ask questions with AI
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
ERICA N. HAWTHORNE,
Plaintiff, Civil Action No. 20-393 (RDM) v.
RUSHMORE LOAN MANAGEMENT SERVICES, LLC,
Defendant.
MEMORANDUM OPINION AND ORDER
Plaintiff Erica Hawthorne, the record owner and borrower for a property in the District of
Columbia, brings claims for breach of contract, negligence, negligent misrepresentation,
intentional infliction of emotional distress, defamation, and violations of the D.C. Consumer
Protection Procedures Act, the Fair Credit Reports Act, and the Fair Debt Collection Practices
Act against the entity that serviced her mortgage, Defendant Rushmore Loan Management
Services, LLC (“Rushmore”). Rushmore timely removed this action from D.C. Superior Court
and has now moved to dismiss all of Plaintiff’s claims pursuant to Federal Rule of Civil
Procedure 12(b)(6). Dkt. 7. For the reasons set forth below, the Court will GRANT in part and
DENY in part Rushmore’s motion.
I. BACKGROUND
A. Factual Background
For purposes of resolving Rushmore’s motion to dismiss, the Court must consider the
complaint as a whole, accepting the factual allegations therein as true, and may also consider
materials attached to or incorporated by reference into the complaint. See Tellabs, Inc. v. Makor Issues & Rts., Ltd., 551 U.S. 308, 322 (2007); Banneker Ventures, LLC v. Graham, 798 F.3d
1119, 1133 (D.C. Cir. 2015). The doctrines of incorporation by reference and attachment have
their limits, however. For one, documents typically are incorporated into the pleadings only if
they are “central to” the pleadings, Slovinec v. Georgetown Univ., 268 F. Supp. 3d 55, 59
(D.D.C. 2017) (quoting Strumsky v. Washington Post Co., 842 F. Supp. 2d 215, 217–18 (D.D.C.
2012)), or if they are “extensively referenced and relied upon” in the pleadings, 5A Charles Alan
Wright & Arthur R. Miller, Federal Practice & Procedure § 1327 (4th ed. 2021). Moreover, if a
party contests the authenticity of documents referenced in or attached to the complaint, see
Slovinec, 268 F. Supp. 3d at 59, consideration of these records may convert the motion to dismiss
into a motion for summary judgment, see Fed. R. Civ. P. 12(d); cf. Banneker Ventures, LLC, 798
F.3d at 1133 (noting that “[a] district court may consider a document that a complaint
specifically references [and that is integral to the complaint] without converting the motion into
one for summary judgment”). Here, Plaintiff’s complaint references and relies upon certain loan
records, and neither party disputes the accuracy or authenticity of any of those records, or argues
that consideration of those records requires conversion of the pending motion into a motion for
summary judgment, see Fed. R. Civ. P. 12(d). The Court will, accordingly, rely on these
unopposed materials for purposes of resolving the pending motion.
Plaintiff, who is now a New Jersey resident, “is the record owner and borrower” of a
property located in the District of Columbia, for which she obtained a mortgage loan of
$256,267.00 on November 30, 2007, from Real Estate Mortgage Network, Inc. Dkt. 1-1 at 2–3
(Compl. ¶¶ 2–4); Dkt. 7-2 at 2–8 (Ex. A). Plaintiff fell behind on her mortgage in 2015 as a
result of “out-of-pocket medical expenses and [her] student loan transitioning out of
2 forbearance.” Dkt. 1-1 at 3 (Compl. ¶ 5). The next year, Rushmore, a limited liability company
based in Delaware, assumed responsibility for servicing her mortgage loan. Id. (Compl. ¶¶ 3, 6).
1. Trial Modification Agreement
“In or about October 2016,” Plaintiff “began the loss mitigation application process” with
Rushmore, for which she received an “assigned point of contact”—Shari Jabri-Gingras, an
employee of Rushmore. Id. (Compl. ¶¶ 7–8). On December 1, 2016, Rushmore notified
Plaintiff by email that she was approved for a loan modification, id. at 4 (Compl. ¶ 10), and on
January 26, 2017, again by email, it informed her that the offer letter had been sent out, id.
(Compl. ¶ 11). The offer stipulated a trial modification, allowing modified payments between
March 2017 and August 2017. Id. Plaintiff accepted and returned the offer letter shortly after
she received it. Id.; Dkt. 7-4 at 2–6 (Ex. C).
Despite her participation in the trial modification, Plaintiff began to receive notices of
foreclosure. The first such notice that Rushmore’s foreclosure counsel sent to Plaintiff was dated
March 9, 2017. Dkt. 1-1 at 4 (Compl. ¶ 12). Plaintiff contacted “Rushmore to express her
concern” and stated that “she felt like she was ‘going to have a heart attack’” because of the
stress of possible foreclosure. Id. (Compl. ¶ 13). When Plaintiff contacted Rushmore’s
foreclosure counsel on March 23, 2017, “to notify them that she was on an active trial
modification,” counsel explained “that Rushmore was delayed in communicating that
information to them and that [counsel] would ask the court to continue the [foreclosure] case[,]
since [Plaintiff] was in good standing with the modification.” Id. (Compl. ¶ 14). Rushmore’s
foreclosure counsel further confirmed that Rushmore “would not ask the court to foreclose and
that once a permanent modification was received, the case would be dismissed.” Id. On July 17,
2017, Rushmore informed Plaintiff that her application for final modification had been submitted
3 for review (a process that generally takes 3–4 weeks) and that “once [the documents] were
returned, it would take” another four weeks“for the system changes” to take effect, after which
Plaintiff could make payments online. Id. at 5 (Compl. ¶ 16).
During this same period, Plaintiff learned that Rushmore was reporting on her loan to
credit agencies in a way that negatively affected her credit score. Plaintiff contacted Rushmore
on May 16, 2017, “to inquire about” this “negative credit reporting,” but it is unclear if she
received any response. Id. (Compl. ¶ 15). Then, on September 17, 2017, Plaintiff informed
Rushmore “that she [had] received an email from TransUnion indicating that the tradeline”—that
is, the record of activity for a credit account—“for her loan was reported as having been
foreclosed and that her payment due for September 2017 was $20,000.00.” Id. (Compl. ¶ 17).
Two days later, Plaintiff contacted Rushmore in response to correspondence she had received
from the company “stating that [she] was in default and should pursue a modification.” Id.
(Compl. ¶ 18). Plaintiff told Rushmore that she “was confused and caught off guard” by this
notice. Id. Around the same time, Plaintiff received a mailing indicating that she qualified for a
loan modification. Id. (Compl. ¶ 19). Shortly thereafter, on October 2, 2017, Jabri-Gingras
notified Plaintiff that her new point of contact with Rushmore would be Fred Taggert, who
would contact her. Id. (Compl. ¶¶ 19–20).
Taggert did not contact Plaintiff in the next few days, so on October 5, 2017, Plaintiff
asked Jabri-Gingras for Taggert’s direct number or to provide Taggert with Plaintiff’s contact
information. Id. at 6 (Compl. ¶ 22). Plaintiff explained to Jabri-Gingras that she had questions
about documents related to her final modification, which she had to return to Rushmore by
October 18, 2017. Id. Between October 11, 2017 and October 23, 2017, Plaintiff attempted to
contact Taggert repeatedly “by phone and email to no avail.” Id. (Compl. ¶ 23). She informed
4 Rushmore “that she was incredibly frustrated” about this lack of contact and about Rushmore’s
failure to deliver paperwork that she was supposed to have received two weeks earlier. Id.
“Specifically, [Plaintiff] informed . . . Rushmore that no one seemed to know what her modified
monthly payment would be and that she wanted to get a specific number so that the modification
could be finalized.” Id. (Compl. ¶ 24). She also noted that Rushmore had demanded different
payment amounts “in different pieces of correspondence,” had reported her credit line as
“foreclosed,” and had told her to “ignore the foreclosure reporting and court notices.” Id.
(Compl. ¶¶ 25–26).
Taggert eventually contacted Plaintiff on October 23, 2017, to inform her that Rushmore
was redrafting her final modification document “but that the processors could not give him a
time table for completion.” Id. at 6–7 (Compl. ¶ 27). In the meantime, he told Plaintiff “that she
could continue to make the trial payment of $2,290.00 until” the final modification was
completed. Id. at 7 (Compl. ¶ 27).
2. Final Modification Agreement
Plaintiff eventually received the final modification agreement on October 31, 2017. Id.
(Compl. ¶ 28). That document set forth an agreement between Plaintiff, as the “Borrower,” and
the “Owner, by and through Rushmore . . . as current servicer and agent . . . (‘Lender’).” Dkt. 7-
5 at 5 (Ex. D).1 Among other things, the final modification agreement provided that Plaintiff’s
new principal balance was $299,060.28; that $9,260.28 of this amount would be “deferred;” and
that her “[m]onthly payments of principal and interest” would be $1,421.48. Id. at 5–6 (Ex. D).
1 Although this agreement is attached to Plaintiff’s complaint, Dkt. 1-1 at 25–27 (Ex. 1), the Court refers to the more legible copy attached to Rushmore’s motion to dismiss, see McGary v. Ravindra, No. 19-3249, 2020 WL 4335613, at *1 n.1 (D.D.C. July 28, 2020).
5 In addition, a letter from Rushmore that accompanied the modification agreement specified “that
there [was] a shortage of funds in [Plaintiff’s] escrow account in the amount of $1,891.70,”
which was amortized over a five year period and included in Plaintiff’s “estimated escrow”
payment of $977.36 per month, leading to a total, estimated monthly payment amount of
$2,398.84.” Dkt. 7-5 at 2-3 (Ex. D).2 Rushmore further explained in the accompanying letter
that, if Plaintiff’s “taxes, insurance premiums[,] and/or assessment amounts change[d],” her
monthly escrow payment would also change. Id. at 2 (Ex. D). Finally, the modification
agreement specified that “[a]ll covenants, agreements, stipulations, and conditions in the
[original note and security instrument] shall be and remain in full force and effect, except as”
modified by the agreement, “and [that] none of [Plaintiff’s] obligations or liabilities under the
[original note and security instrument] shall be diminished or released.” Id. at 6–7 (Ex. D).
In Plaintiff’s view, the final modification agreement introduced a couple of key changes
to Plaintiff’s loan. First, “a mandatory escrow account was created as part of the modification”
agreement, although Plaintiff’s “property taxes and hazard insurance premiums were not
originally escrowed into the loan payment.” Dkt. 1-1 at 7 (Compl. ¶ 29). Second, “the
documents showed a higher payment amount” per month than what Plaintiff had been paying
under the trial modification agreement, and it was unclear whether she was required to make up
the difference in payment amounts for the period after the trial modification agreement expired
2 Although Plaintiff attaches the final modification agreement to her complaint, she does not attach the offer letter that accompanied it. She does, however, rely on the offer letter in her complaint. Dkt. 1-1 at 7 (Compl. ¶ 28) (noting that “Rushmore forwarded the final modification agreement to” her on October 31, 2017, with terms including an escrow shortage of $1,891.70). Because Plaintiff’s negligence claim is premised, in part, on the allegation that the escrow requirement was improperly added to her loan, see Dkt. 1-1 at 13 (Compl. ¶¶ 67–68), and because she alleges that the escrow account was added in the final modification agreement, the Court will treat the October 31, 2017, letter as incorporated by reference in the complaint, see Banneker Ventures, LLC, 798 F.3d at 1133. 6 and the final modification agreement took effect. Id. (Compl. ¶ 30). Because the letter
accompanying the final modification agreement asserted that the higher payment amount took
effect on September 1, 2017, Dkt. 7-5 at 2 (Ex. D), Plaintiff asked Taggert if she needed to “send
the payment difference for September and October,” Dkt. 1-1 at 7 (Compl. ¶ 30). Plaintiff again
sought clarification from Taggert on this point on November 15, 2017, id. (Compl. ¶ 31), and
again on November 30, 2017, id. at 8 (Compl. ¶ 32). Finally, On December 6, 2017, Taggert
informed Plaintiff that “he [had] calculated the difference in the September, October and
November payments as . . . $326.52.” Id. (Compl. ¶ 33). Then, on December 21, 2017,
“Rushmore forwarded to [Plaintiff] a copy of the final modification agreement reflecting
signatures from both her and . . . Rushmore.” Id. (Compl. ¶ 34). Plaintiff alleges that “[s]ince
her loan was modified in October 2017, Rushmore has continued to change the amount that
[Plaintiff] is required to pay on a monthly basis” and that “she has overpaid her monthly
mortgage payment amount but has not received a credit or payment adjustment.” Id. at 9
(Compl. ¶ 41).
It is unclear whether Plaintiff ever paid the $326.52 differential for the months of
September, October, and November 2017, but by early 2018, she evidently believed she was up
to date on her payments. On January 8, 2018 and again on January 30, 2018, Plaintiff informed
Taggert “that her credit report was still showing that she was late on payments,” and she asked
that he correct the discrepancy or direct her “to the person [who] handles the corrections.” Id. at
8 (Compl. ¶ 35). On February 2, 2018, Taggert contacted Plaintiff and advised her “to make the
request for credit correction in writing[,] as his request had been rejected,” and he provided
Plaintiff with the relevant “contact information for the appropriate Rushmore department.” Id.
(Compl. ¶ 36).
7 On February 9, 2018, Plaintiff spoke with “a representative [who] stated that she was four
. . . months in arrears.” Id. (Compl. ¶ 37). Shortly thereafter, Plaintiff left a message for
Taggert, and on February 20, 2018, she “contacted . . . Taggert again and asked if she could get a
response.” Id. (Compl. ¶ 38). Plaintiff told Taggert “that she was afraid to send money [to
Rushmore] because [Taggert] had no idea where the money went.” Id. at 8–9 (Compl. ¶ 38). A
few weeks later, on March 13, 2018, Plaintiff again contacted Taggert to inquire “why she had
not yet received a . . . resolution to her online payment authorization or negative reporting.” Id.
at 9 (Compl. ¶ 39).
In July 2018, Rushmore informed Plaintiff “that she was overpaying and that she only
owed $340 for her August 2018 payment,” but the company also continued to advise Plaintiff
that she was in default. Id. (Compl. ¶¶ 42–43). Her “credit report” also reflected that she was in
default. Id. (Compl. ¶ 43). On September 14, 2018, Plaintiff again contacted Taggert to alert
him to a “notice of missed payment” she had received from TransUnion. Id. (Compl. ¶ 40).
Evidently, her “loan balance was still showing as $303,000.00[,] which didn’t match what
Rushmore’s interface said” and did not reflect the $50,000.00 she had paid to Rushmore. Id.
Plaintiff alleges that Rushmore “failed to apply mortgage payments made [from] March 2017
through January 2019 [to her mortgage] until February 2019.” Id. (Compl. ¶ 44). At some point,
Plaintiff contacted the credit reporting agencies to dispute Rushmore’s reporting, but Rushmore
confirmed its reporting as accurate, and “[t]he credit reporting agencies subsequently closed the
disputes.” Id. at 9–10 (Compl. ¶ 45).
3. Other Actions by Rushmore and Harm to Plaintiff
Beginning in 2018, Rushmore began making additional charges to Plaintiff’s account
without consulting her. At some point in 2018, Plaintiff learned that Rushmore had added a
8 force-placed insurance policy to her account “without providing her the required notice pursuant
to 12 C.F.R. § 1024.37,” even though she already had “an active private policy” in place. Id. at
10 (Compl. ¶ 46). For a time, the “insurance issue [was] corrected,” but Rushmore later, once
again, “added a force-placed policy to [Plaintiff’s] account.” Id. In addition, in 2019, Plaintiff
“noticed that a company was performing landscaping services for her property [even though] she
already employed a company to maintain her lawn” and that Rushmore was “unnecessarily
charging fees for services.” Id. (Compl. ¶ 47).
On October 24, 2019, Rushmore informed Plaintiff that it had made a “business decision
to retract her escrow analysis review completed on October 17, 2019” and to return Plaintiff’s
“loan back to its original state prior to the analysis.” Id. (Compl. ¶ 48) (alteration omitted). But
Rushmore also stated that it would reanalyze her account on a date to be determined and that she
would receive notice of her new payment “after it was determined.” Id. “The attached escrow
analysis disclosure statement note[d] a surplus of $10,388.73.” Id.
Plaintiff alleges that she has suffered various injuries due to Rushmore’s alleged
mismanagement. She contends that Rushmore’s “false negative reporting” compromised her
credit score, blocking her from securing a $10,000 loan and from obtaining car leases. Id.
(Compl. ¶¶ 49–50); that she “was unable to rent her property” because she was “denied financing
for . . . needed repairs,” thereby losing “$24,000.00 in annual rental income;” id. at 11 (Compl.
¶ 51); that she “suffer[s] from Crohn’s Disease” and because of the stress of her “interaction
[with] and treatment by . . . Rushmore,” she was placed on additional medications, which forced
her “to discontinue her invitro fertilization treatments;” id. (Compl. ¶ 52); and that “[s]he
continues to experience panic attacks, headaches[,] and weight loss all due to stress,” id.
9 B. Procedural Background
Plaintiff initiated this action in the Superior Court for the District of Columbia on January
9, 2020, Dkt. 1 at 1. Her complaint includes eight counts: breach of contract (Count I), Dkt. 1-1
at 11–12 (Compl. ¶¶ 54–60); negligence (Count II), id. at 12–14 (Compl. ¶¶ 61–71); negligent
misrepresentation (Count III), id. at 14–16 (Compl. ¶¶ 72–78); violation of the District of
Columbia Consumer Protection Practices Act (“CPPA”) (Count IV), id. at 16–18 (Compl. ¶¶ 79–
87); violation of the Fair Credit Reporting Act (“FCRA”) (Count V), id. at 18–19 (Compl. ¶¶ 88–
93); violation of the Fair Debt Collection Practices Act (“FDCPA”) (Count VI), id. at 19–21
(Compl. ¶¶ 94–102); infliction of emotional distress (Count VII), id. at 21 (Compl. ¶¶ 103–09);
and defamation (Count VIII), id. at 22–23 (Compl. ¶¶ 110–14). On February 10, 2020,
Rushmore timely removed the action to this Court, invoking the Court’s federal question
jurisdiction, 28 U.S.C. § 1331, and diversity jurisdiction, id. §§ 1332, 1441, 1446; Dkt. 1 at 1.
After removing the action, Rushmore moved to dismiss for failure to state a claim, Dkt.
7, and that motion is now before the Court.
II. LEGAL STANDARD
In resolving a motion to dismiss for failure to state a claim, the Court “must . . . ‘tak[e]
note of the elements a plaintiff must plead to state [the] claim to relief,’ and then determine
whether the plaintiff has pleaded those elements with adequate factual support to ‘state a claim to
relief that is plausible on its face.’” Blue v. District of Columbia, 811 F.3d 14, 20 (D.C. Cir.
2015) (alterations in original) (internal citation omitted) (quoting Ashcroft v. Iqbal, 556 U.S. 662,
675, 678 (2009)). “A claim has facial plausibility when the plaintiff pleads factual content that
allows the [C]ourt to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544,
10 556 (2007)). The Court need not, however, “accept inferences” that “are unsupported by the
facts set out in the complaint[,] [n]or must the [C]ourt accept legal conclusions cast in the form
of factual allegations.” Kowal v. MCI Commc’ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994).
Thus, a movant may prevail on a 12(b)(6) motion only by “demonstrating that the facts alleged
in the complaint, and accepted as true for purposes of resolving the motion, do not warrant
relief.” Achagzai v. Broad. Bd. of Governors, 170 F. Supp. 3d 164, 173 (D.D.C. 2016) (citing
Harris v. Ladner, 127 F.3d 1121, 1123 (D.C. Cir. 1997)).
III. ANALYSIS
The Court will consider each of Plaintiff’s eight claims in turn.3
A. Breach of Contract
Plaintiff first asserts a claim for breach of contract. According to Plaintiff, Rushmore
“had a duty to service [her] loan in a manner that was in compliance with the [n]ote and [d]eed
. . . and [the] modification” agreement, Dkt. 1-1 at 11 (Compl. ¶ 55), but “breached that duty
when it [1] failed to properly calculate [Plaintiff’s] final monthly payment” in the final
modification agreement; “[2] continued to change the monthly payments after the final
modification agreement was executed in November 2017;” and “[3] added an escrow account
without a written agreement or notice to [Plaintiff],” id. at 11–12 (Compl. ¶¶ 56–58). She
contends that, due to these breaches, “she was forced to pay incorrect monthly payment amounts
[and] penalty fees and [was] reported as late to the credit reporting agencies.” Id. at 12 (Compl.
¶ 60).
3 Both parties invoke D.C. law in addressing Plaintiff’s common law claims, and, in the absence of any argument to the contrary, the Court will treat the question of choice of law as conceded. 11 Rushmore, for its part, maintains that it never entered into a contract with Plaintiff.
Rather, according to Rushmore, “[t]he owner of the Loan, the party who is owed money on the
Loan, and the party who is secured by the Deed of Trust is U.S. Bank, not Rushmore,” Dkt. 7-1
at 12, and Rushmore is merely the loan servicer, id. And, similarly, the parties to the
modification agreement are the “Owner” of the loan—that is, U.S. Bank—and the “Borrower”—
that is, Plaintiff. Id.; see also Dkt. 7-5 at 5 (Ex. D). Finally, Rushmore argues that, even if it
were a party to one of the agreements at issue, Plaintiff’s complaint fails to “identify a specific
contractual provision allegedly breached” and, therefore, fails to state a claim. Dkt. 7-1 at 13.
“To prevail on a claim of breach of contract, a party must establish (1) a valid contract
between the parties; (2) an obligation or duty arising out of the contract; (3) a breach of that duty;
and (4) damages caused by breach.” Robinson v. Deutsche Bank Nat’l Tr. Co., 932 F. Supp. 2d
95, 109 (D.D.C. 2013) (quoting Tsintolas Realty Co. v. Mendez, 984 A.2d 181, 187 (D.C. 2009)).
Of principal relevance here, “[w]ithout a contractual duty, there can be no breach of contract.”
Edmond v. Am. Educ. Servs., No. 10-578, 2010 WL 4269129, at *2 (D.D.C. Oct. 28, 2010)
(quoting Ihebereme v. Capital One, N.A., No. 10-1106, 2010 WL 3118815, at *3 (D.D.C. Aug. 9,
2010)). “Judges around the country—including [in this district]—have held that a loan servicer,
as a lender’s agent, has no contractual relationship or privity with the borrower and therefore
cannot be sued for breach of contract.” Edwards v. Ocwen Loan Servicing, LLC, 24 F. Supp. 3d
21, 28 (D.D.C. 2014); see also Robinson, 932 F. Supp. 2d at 109 (no contractual relationship for
a loan servicer); Edmond, 2010 WL 4269129, at *2 (same); cf. Rittenberg v. Donohoe Constr.
Co. Inc., 426 A.2d 338, 340–41 (D.C. 1981) (rent-collecting agent lacked a contractual
relationship with tenants).
12 “[W]here agents . . . make contracts on behalf of their principals, they can be held liable
only in very limited circumstances.” Guttenberg v. Emery, 41 F. Supp. 3d 61, 69 (D.D.C. 2014).
This rule “is consistent with the bargain principle in contemporary contract law under which ‘the
formation of a contract requires a bargain in which there is a manifestation of mutual assent to
the exchange and consideration.’” Restatement (Third) of Agency § 6.01 cmt. b (Am. L. Inst.
(2006) (quoting Restatement (Second) of Contracts § 17(1) (Am. L. Inst. 1981)). An agent
acting with apparent authority who manifests assent to an exchange “on behalf of a disclosed
principal does not become a party to the contract and is not subject to liability as a guarantor of
the principal’s performance unless the agent and the third party so agree.” Id. (emphasis added).
There are at least two ways in which an agent may incur liability for a breach of the
contract. First, an agent may incur liability “if [it] binds [itself] by definite words and
stipulations,” making clear that it is a party to the contract. Walford v. McNeill, 100 F.2d 112,
115 (D.C. Cir. 1938); see also Guttenberg, 41 F. Supp. 3d at 69 (citing Restatement (Third) of
Agency § 6.01). By contrast, “[a]n agent is not a party to a contract if any portion of the parties’
writing makes clear that the agent acts solely in a representative capacity,” and “[s]uch an
indication may . . . include statements of . . . the principal’s name followed by the agent’s name
preceded by a preposition such as ‘by’ or ‘per.’” Restatement (Third) of Agency § 6.01 cmt.
b(1). Second, an agent may incur personal liability if it “enters into a contract without disclosing
[its] principal.” Resnick v. Abner B. Cohen Advert., 104 A.2d 254, 255 (D.C. 1954); see also
Guttenberg, 41 F. Supp. 3d at 69 (referencing situations with undisclosed or unidentified
principals). This liability extends to so-called “unidentified principals,” where the third party
knows that the agent is acting on behalf of a principal but does not know the identity of that
principal. Restatement (Third) of Agency § 6.02. Under those circumstances, the third party is
13 “unable to assess the principal’s reputation, assets, or other indicia of creditworthiness and
ability to perform duties under the contract,” and thus, unless the parties “agree otherwise,” the
agent is bound by the agreement. Id. cmt. b.
“A third party has notice of a principal’s identity when, regardless of the source, the third
party has notice of facts reasonably sufficient to identify the principal.” Id. cmt. d. Significantly,
whether the third party is reasonably on notice of the principal’s identity is a question of fact. Id.
The third party, moreover, “does not have a burden of inquiry.” Id. § 6.01 cmt. c. Rather, “[a]
third party will be treated as having notice of an agency relationship if the third party has actual
knowledge of it or reason to know of it or if the third party has been given a notification of it.”
Id.; see also id. § 6.02 cmt. d. The “third party may have notice that [the] agent acts as an agent
for an unidentified principal from writings executed by the agent, among other sources.” Id.
cmt. d.
With these general principles of agency law in mind, the Court concludes that Plaintiff’s
claim to enforce the original note or deed of trust against Rushmore fails as a matter of law. The
deed of trust expressly identifies Real Estate Mortgage Network, Inc., as the lender, Dkt. 7-2 at 2
(Ex. A), and, in any event, Plaintiff’s complaint acknowledges that the mortgage was initiated in
2007, years before Rushmore “mortgage servicing for the loan was transferred to . . . Rushmore”
in 2016. Dkt. 1-1 at 3 (Compl. ¶¶ 4, 6). Plaintiff offers no reason to depart from settled
precedent holding that loan servicers, such as Rushmore, do not assume a contractual
relationship with the borrower merely because they service the loan. See Edwards, 24 F. Supp.
3d at 28. Accordingly, Plaintiff cannot sue Rushmore for breach of the original note or deed of
trust.
14 The final modification agreement presents a different—and closer—question. As
Rushmore stresses, it signed the final modification agreement only as the agent for the owner of
the loan. The agreement stipulates that it is “between [Plaintiff] (‘Borrower’) and Owner, by and
through Rushmore . . . as current servicer and agent . . . (‘Lender’).” Dkt. 7-5 at 5 (Ex. D); Dkt.
7-1 at 12. In Rushmore’s view, this ends the inquiry, and “any breaches of the [agreement] must
be asserted against the [owner].” Dkt. 7-1 at 12. As explained above, however, the question
whether an agent is bound by a contract executed on behalf of an unidentified principal is not so
simple.
Unsurprisingly, the parties take very different views about whether the unidentified-
principal doctrine applies here. Plaintiff maintains that Rushmore “failed to disclose the
[owner’s] identity” in the agreement, thereby exposing it to liability as an agent for an
unidentified principal, Dkt. 9-1 at 8, while Rushmore maintains that “the identity of the owner of
the [l]oan, e.g., the principal, was disclosed[,] as prior to the execution of the Modification
Agreement there was a complete chain of assignments of the [deed], recorded with the Recorder
of Deeds,” Dkt. 11 at 3. Rushmore is, of course, correct that a third party’s knowledge of a
principal’s identity at the time of the agreement can relieve the agent of liability. The problem
with its argument, however, is that the Court cannot decide, on the bare pleadings, whether
Plaintiff was on “notice of facts reasonably sufficient to identify the principal,” Restatement
(Third) of Agency § 6.02 cmt. d.
That question is one of fact, and nothing in Plaintiff’s complaint or in the documents
incorporated into it by reference provides a dispositive answer. Plaintiff, for her part, says
nothing about the identity of the owner of the note in her complaint, nor do any of documents
that she attaches to her complaint. And, although Rushmore attaches to its motion to dismiss an
15 assignment of the deed of trust, dated May 27, 2016, which identifies the assignee as U.S. Bank
National Association in its capacity as Trustee for the Maroon Plains Trust (“U.S. Bank”), Dkt.
7-3 at 10, nothing in the pleadings provides answers to a number of essential questions, including
whether Plaintiff was on notice of facts reasonably sufficient to have identified U.S. Bank as the
owner at the time Rushmore executed the modification agreement; whether and when the
assignment was sent to her; and whether any intervening assignment might have taken place.
To be sure, Rushmore may be able to prove at a subsequent stage of the proceeding that
Plaintiff was on notice of facts sufficient to identify Rushmore’s principal. But that proof, if it
exists, lies beyond the four corners of Plaintiff’s complaint (and the incorporated documents),
and, accordingly, is not properly before the Court at this preliminary stage of the litigation. See
Twombly, 550 U.S. at 556; Olenga v. Gacki, 507 F. Supp. 3d 260, 272 (D.D.C. 2020).
Accordingly, at least for present purposes, the Court cannot accept Rushmore’s contention that it
is not a party to the modification agreement.
Beyond this point, however, Plaintiff’s breach of contract claim loses steam. According
to Plaintiff, Rushmore had a contractual obligation to service her “loan in a manner that was in
compliance with the Notice and Deed of Trust and modification,” Dkt. 1-1 at 11 (Compl. ¶ 55),
and that it breached that undertaking in three respects. First, Plaintiff alleges that Rushmore
breached its obligation “when it failed to properly calculate [her] final monthly payment when it
issued the final modification agreement in October 2017.” Id. (Compl. ¶ 56). What Plaintiff
means by this is not obvious. But it is clear that Rushmore could not possibly have breached the
modification agreement—the only agreement to which it is even arguably a party—“when it
issued [that] agreement.” Id. And, in any event, it is clear that this allegation is too vague and
16 conclusory to survive a motion to dismiss. See Iqbal, 556 U.S. at 678; Powel v. Ben’s Chili
Bowl, No. 20-0436, 2021 WL 2949168, at *2 (D.D.C. July 14, 2021).
Second, Plaintiff alleges that Rushmore breached the modification agreement “when it
continued to change the monthly payments” she was required to remit “after the final
modification agreement was executed in November 2017.” Dkt. 1-1 at 11 (Compl. ¶ 57). Again,
this allegation is too vague and conclusory to survive a motion to dismiss. Iqbal, 556 U.S. at
678. Most notably, Plaintiff fails to identify how—and to what extent—her payment amount
changed. The final modification agreement did obligate Plaintiff to pay a fixed monthly amount
of $1,421.48 for principal and interest, Dkt. 7-5 at 6 (Ex. D), but it set no fixed amount for the
escrow portion of the monthly payment, see id. at 5–11 (Ex. D), and Plaintiff does not allege that
Rushmore varied the amount due for principal and interest. Absent more, the claim fails as a
matter of law.
Finally, Plaintiff alleges that Rushmore breached the final modification agreement “when
it added an escrow account without a written agreement or notice to” Plaintiff. Dkt. 1-1 at 12
(Compl. ¶ 58). But, once again, she fails to identify the contractual undertaking that Rushmore
purportedly breached. The documents that are before the Court and that are incorporated in the
complaint, moreover, controvert Plaintiff’s contention. To start, the letter that accompanied the
final modification agreement explained that Plaintiff’s “total payment” would include “an
estimated escrow portion of $977.36;” that her “escrow payment amount [would] adjust if [her]
taxes, insurance premiums and/or assessments change;” and that “this means that [her] monthly
payment may change.”4 Dkt. 7-5 at 2 (Ex. D). The final modification agreement, in turn,
4 The offer letter could arguably be cast as parol evidence to the final loan modification agreement rather than a document setting forth contractually binding terms, but neither party pursues this argument; instead, both parties refer to the offer letter as part-and-parcel with the 17 required Plaintiff to “comply with all other covenants, agreements, and requirements of the
Security Instrument, including without limitation, Borrower’s covenants and agreements to make
all payments of taxes, insurance premiums, assessments, escrow items, impounds, and all other
payments that Borrower is obligated to make under the Security Instrument.” Id. at 6 (emphasis
added). The Deed of Trust, in turn, required the Borrower to “include in each monthly payment,
together with the principal and interest . . . , a sum for (a) taxes and special assessments levied or
to be levied against the Property, (b) leasehold payments . . . on the Property, and (c) premiums
for insurance” to cover hazards, casualties, and contingencies. Dkt. 7-2 at 3; see also id. at 4
(defining required insurance). The Court, accordingly, is unable to identify the contractual
provision that Plaintiff alleges Rushmore breached by adding “an escrow account without a
written agreement or notice to” Plaintiff. Dkt. 1-1 at 12 (Compl. ¶ 58).
Plaintiff has therefore failed to plead facts sufficient to put Rushmore and the Court on
notice of what contractual provision or provisions she alleges Rushmore breached. See
Armstrong v. Navient Sols., LLC, 292 F. Supp. 3d 464, 472–73 (D.D.C. 2018) (holding that the
plaintiff had failed to allege a breach of contract against a creditor because the plaintiff identified
no contractual provision protecting the plaintiff from misstated account balances or the loss of
time and convenience associated with disputing an inaccurate balance).
The Court will, accordingly, dismiss her breach of contract claim without prejudice.
agreement. See Dkt. 1-1 at 7 (Compl. ¶¶ 28–29) (referring to the escrow amount stipulated in offer letter as a “term[]” of the agreement); Dkt. 7-1 at 14 (responding to the challenge of breach of contract by referring to a disclaimer in the offer letter). Following the parties’ lead, the Court treats the offer letter as part of the final modification agreement. 18 B. Negligence
Plaintiff also asserts a negligence claim against Rushmore. She alleges that Rushmore
breached a “duty to service the loan in a manner that was in compliance with the loan
documents, final modification agreement[,] and applicable state and federal statutes,” Dkt. 1-1 at
12–13 (Compl. ¶ 62), when it (1) “failed to properly calculate [her] final monthly payment for
the final modification” agreement, (2) “continued to change the final monthly payment after the
final modification agreement was executed,” (3) “assessed late fees and inspection costs to her
loan despite not being in default,” (4) “improperly added force[-]placed insurance to the loan,”
(5) “failed to properly notify [Plaintiff] in writing that an escrow account would be added to the
loan,” (6) “improperly re-analyzed [her] escrow account,” and (7) “reported to the credit
reporting agencies that she was delinquent after the final modification agreement . . . despite
her . . . timely payments.” Id. at 13 (Compl. ¶¶ 63–69). As a result, Plaintiff alleges, she “was
forced to pay incorrect monthly payment amounts [and] penalty fees and [was] reported as late to
the credit reporting agencies.” Id. (Compl. ¶ 71).
To the extent the duties that Rushmore allegedly breached turn on Rushmore’s alleged
failure to service the loan “in compliance with the loan documents,” Dkt. 1-1 at 12 (Compl.
¶ 62), Plaintiff’s negligence claim fails as a matter of law. To state a negligence claim, a
plaintiff must allege facts sufficient to show “(1) a duty, owed by the defendant to the plaintiff,
to conform to a certain standard of care; (2) a breach of this duty by the defendant; and (3) an
injury to the plaintiff proximately caused by the defendant’s breach.” Findlay v. CitiMortgage,
Inc., 813 F. Supp. 2d 108, 120 (D.D.C. 2011) (quoting District of Columbia v. Fowler, 497 A.2d
456, 463 n.13 (D.C. 1985)). Of particular importance here, however, the duty at issue “must
exist in its own right independent of [any] contract, and any duty upon which the tort is based
19 must flow from considerations other than [a] contractual relationship.” Carter v. Bank of Am.,
N.A., 888 F. Supp. 2d 1, 15 (D.D.C. 2012) (quoting Nugent v. Unum Life Ins. Co. of Am., 752 F.
Supp. 2d 46, 53–54 (D.D.C. 2010)). That is, “[t]he tort must stand as a tort even if the
contractual relationship did not exist.” Id. (quoting Nugent, 752 F. Supp. 2d at 54). Because
Plaintiff grounds her negligence claims, at least in large part, on the premise that Rushmore
owed her various duties arising from the modification agreement and other contractual
documents, she fails to satisfy this requirement. See Armstrong, 292 F. Supp. 3d at 473–74
(rejecting a negligence claim because the plaintiff “failed to identify any authority recognizing a
lender or servicer’s non-contractual duty” to correctly report account balances); Carter, 888 F.
Supp. 2d at 15 (rejecting a gross negligence claim because the plaintiff failed to allege a non-
contractual duty owed by the bank managing her mortgage); KBI Transp. Servs. v. Med. Transp.
Mgmt., Inc., 679 F. Supp. 2d 104, 108–09 (D.D.C. 2010) (rejecting a negligence claim because
the plaintiff failed to identify a non-contractual duty).
Recognizing this difficulty, Plaintiff attempts to identify other sources of Rushmore’s
asserted duty of care. She asserts without explanation, for example, that Rushmore “breached its
duty pursuant to the Real Estate Settlement Procedures Act (“RESPA”) and, in particular 24
C.F.R. 3500.17, when it improperly re-analyzed [her] escrow account.” Dkt. 1-1 at 13 (Compl.
¶ 68). That regulation, which was issued by the Department of Housing and Urban Development
(“HUD”), was rescinded in 2014, after the underlying regulatory authority was transferred to the
newly formed Consumer Financial Protection Bureau (“CFPB”), and the CFPB issued its own
regulation governing the same subject matter. See Removal of Regulations Transferred to the
Consumer Financial Protection Bureau, 79 Fed. Reg. 34,224, 34,226 (June 16, 2014) (listing 24
20 CFR Part 3500 as removed).5 Because the CFPB regulation mirrored the HUD regulation in
relevant respects, Plaintiff’s miscitation is inconsequential. But, putting that misstep aside,
Plaintiff’s invocation of the regulation does nothing to advance her claim because neither her
complaint nor her opposition brief identifies any particular provision of RESPA or the
implementing regulation that gives rise to a duty of care that Rushmore purportedly breached.
As a result, Plaintiff’s allegations regarding the RESPA regulation are too vague and conclusory
to survive a motion to dismiss. See Iqbal, 556 U.S. at 678.
Beyond that, it is difficult to read Plaintiff’s opposition brief without concluding that she
essentially concedes that her negligence claim fails as a matter of law. Her argument consists—
in its entirety—of the following:
The Defendant owed [Plaintiff] a duty of care pursuant to the Fair Credit Reporting Act, the Fair Debt Collection Practices Act[,] and the Consumer Protection Procedure Act as argued herein. As alleged in her Complaint, and in the argument below, the Defendant’s conduct suffices as a tort separate from any contractual claim.
Dkt. 9-1 at 10. It is not the Court’s role to develop a theory of recovery on Plaintiff’s behalf, and
Plaintiff fails to explain how these federal and D.C. statutory mandates are incorporated into the
common law of torts. Plaintiff says nothing, for example, about the FCRA’s preemption
provision, which expressly preempts any requirement imposed under the laws of any state
involving a “subject matter regulated under” 15 U.S.C. § 1681s-2 “relating to the responsibilities
5 24 C.F.R. § 3500.17 was originally promulgated by HUD pursuant to its authority to implement RESPA. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Pub. L. No. 111-203, 124 Stat. 1376, later transferred HUD’s authority over RESPA to the CFPB, prompting the removal of 24 C.F.R. pt. 3500 from the Code of Federal Regulations. See 79 Fed. Reg. at 34,225. The CFPB issued new regulations implementing RESPA at 12 C.F.R. pt. 1024, including 12 C.F.R. § 1024.17, which, except for a few provisions, is a near-identical copy of 24 C.F.R. § 3500.17. The removal of 24 C.F.R. § 3500.17 and the promulgation of 12 C.F.R. § 1024.17 occurred in 2014 and 2011 respectively, and so predated Plaintiff’s complaint and the violations alleged therein. 21 of persons who furnish information to consumer reporting agencies.” 15 U.S.C.
§ 1681t(b)(1)(F); see also Himmelstein v. Comcast of the Dist., LLC, 931 F. Supp. 2d 48, 60
(D.D.C. 2013); Armstrong, 292 F. Supp. 3d at 471. More generally, without additional
explanation from Plaintiff, the Court cannot discern which provisions of the statutes that Plaintiff
references give rise to a non-preempted duty under D.C. common law or a cause of action that
does not merely replicate (and repeat) the asserted statutory claims.
The Court will, accordingly, dismiss Plaintiff’s negligence claims without prejudice.
C. Negligent Misrepresentation
Plaintiff’s claim for negligent misrepresentation fails as well, although for different
reasons. Plaintiff alleges that Rushmore “negligently communicated false information to”
Plaintiff (1) “when it continued to inform her that her loan was modified while simultaneously
sending default correspondence, reporting the account as being in default, and referring the file
to outside counsel,” Dkt. 1-1 at 14 (Compl. ¶ 73); (2) “when it continued to change her monthly
payment amounts,” id. (Compl. ¶ 74); and (3) “when it advised her to ignore the negative
reporting and foreclosure notices,” id. at 15 (Compl. ¶ 75). Rushmore responds that Plaintiff’s
negligent misrepresentation claim should be dismissed because her complaint fails to identify a
specific misrepresentation and “is completely silent [with respect to] any action she took to her
detriment in reliance on the alleged misrepresentation.” Dkt. 7-1 at 17–18. 6
“A plaintiff alleging negligent misrepresentations or omissions must show (1) that the
defendant made a false statement or omitted a fact that [it] had a duty to disclose; (2) that it
6 Rushmore also argues that the negligent misrepresentation claim is “preempted by the FCRA as [it] relate[s] to Rushmore’s alleged incorrect reporting on its tradeline to the consumer reporting agencies.” Dkt. 11 at 6. Although the Court agrees that the FCRA preempts this portion of Plaintiff’s negligent misrepresentation claim, the claim goes beyond the alleged misreporting to credit agencies, so the Court must consider Rushmore’s other arguments. 22 involved a material issue; and (3) that the plaintiff reasonably relied upon the false statement or
omission to [her] detriment.” Heyer v. Schwartz & Assocs. PLLC, 319 F. Supp. 3d 299, 306–07
(D.D.C. 2018) (alteration omitted) (quoting Sundberg v. TTR Realty, LLC, 109 A.3d 1123, 1131
(D.C. 2015)). “The elements of a claim of negligent misrepresentation are similar” to a fraud
claim, “except that they do not include the scienter requirements” of knowledge of falsity and
intent to deceive that apply in a fraud case. Parr v. Ebrahimian, 774 F. Supp. 2d 234, 240
(D.D.C. 2011). But, as with a fraud claim, Federal Rule of Civil Procedure 9(b)’s requirement
that a plaintiff “state with particularity the circumstances constituting” the misrepresentation
apply. Fed. R. Civ. P. 9(b); see Boomer Dev., LLC v. Nat’l Ass’n of Home Builders of U.S., 258
F. Supp. 3d 1, 20 (D.D.C. 2017); Jacobson v. Hofgard, 168 F. Supp. 3d 187, 206 (D.D.C. 2016);
In re U.S. Off. Prods. Co. Secs. Litig., 251 F. Supp. 2d 58, 74 n.9 (D.D.C. 2003).
Before continuing, it is worth pausing to address a point of ambiguity in the complaint.
Plaintiff makes repeated references to Rushmore falsely representing that Plaintiff was in default,
but it is unclear if she is referring to default as to her obligations pursuant to the deed of trust and
original note or default as to payments due pursuant to the trial and/or final modification
agreements. See, e.g., Dkt. 1-1 at 8 (Compl. ¶ 35) (referring to Plaintiff’s credit report showing
“that she was late on payments”); id. at 14 (Compl. ¶ 73) (accusing Rushmore of falsely
reporting that she was in default); id. at 17 (Compl. ¶¶ 84–85) (alleging that Rushmore engaged
in unfair and deceptive trade practices by representing to Plaintiff both that her loan was
modified and reporting that she was in default). The distinction matters because, as far as the
Court can discern, it is uncontested that Plaintiff was in default under the deed and original note
(hence the need for a loan modification).
23 The loan modification agreements that Plaintiff relies on in her complaint make clear that
she was in default with respect to her payments pursuant to the original loan documents. See
Dkt. 7-4 at 2–3 (Ex. C) (noting more than once that “Borrower[]” is “in default”). Furthermore,
the modification agreements dispel any illusion that entrance into or compliance with the
modification agreements would change her status with respect to default. See id. at 5 (Ex. C)
(“[N]othing in this [a]greement shall be understood or construed to be a satisfaction or release in
whole or in part of the obligations contained in the [l]oan [d]ocuments.”); Dkt. 7-5 at 7 (Ex. D)
(“Nothing in this [a]greement shall be understood or construed to be a satisfaction or release in
whole or in part of the [n]ote and [deed].”). Rather, the loan modifications guaranteed that
foreclosure would not proceed, notwithstanding Plaintiff’s default. See id. (“The parties agree
that the consideration for this [a]greement is Lender’s forbearance from presently exercising its
rights and pursuing its remedies under the [deed] as a result of Borrower’s default thereunder.”).
Rushmore reads Plaintiff’s complaint to allege that Rushmore reported Plaintiff’s default
as to payments due under the deed and original note, and it contends that such reporting was
accurate, and “[w]ithout a misrepresentation, there can be no fraud claim.” Dkt. 7-1 at 18. But
Plaintiff’s claims are also amenable to a different reading: Rushmore was reporting Plaintiff as
defaulting on payments pursuant to the loan modification agreements. Several factual
allegations in the complaint and incorporated documents support this interpretation. First, the
trial modification agreement refers to “default” in the context of failing to make the modified
payments, so the term is not reserved to failure to make payments pursuant to the deed and
original note. See Dkt. 7-4 at 3 (Ex. C). Second, Plaintiff alleges that she requested that Taggert
correct Rushmore’s credit report and that Taggert, in fact, tried to make such a correction; if
Plaintiff was concerned merely because her credit report showed (correctly) that she was in
24 default as to payments due under the deed and original note, it is difficult to understand why
Taggert would have tried to correct the reporting. Dkt. 1-1 at 8 (Compl. ¶ 36). Finally,
Plaintiff’s opposition to Rushmore’s motion to dismiss suggests that her allegations pertain to
inaccurate reporting of default on her modified payments, because she contends that the alleged
default is logically inconsistent with her overpaying the modified payment amounts. See Dkt. 9-
1 at 15 (“It defies reason that [Plaintiff] could have—in the same month—made overpayments
and also be in default.”). For present purposes, the Court need not decide which of these two
readings of the complaint is what Plaintiff intended; the lack of clarity is itself problematic in
light of Plaintiff’s heightened pleading obligations under Rule 9(b). See, e.g., Pencheg Si v.
Laogai Rsch. Found., 71 F. Supp. 3d 73, 91–92 (D.D.C. 2014) (holding that a claim lacked
specificity under Rule 9(b) because it was “not at all clear” which of two possible scenarios
formed the basis for the claim); see also United States ex rel. Joseph v. Canon, 642 F.2d 1373,
1385 (D.C. Cir. 1981) (identifying one of the purposes of the specificity requirement as
“guarantee[ing] [the] defendant[] sufficient information to allow for preparation of a response”
since “‘fraud’ encompasses a wide variety of activities”).
But even putting this difficulty aside, Plaintiff’s complaint fails to allege a necessary
element of a fraud claim: that Plaintiff took “any action . . . to her detriment in reliance on the
alleged misrepresentation.” Dkt. 7-1 at 18. Plaintiff does not address this contention in her
opposition, see Dkt. 9 at 10–11, and “[i]t is well understood in this Circuit that when a plaintiff
files an opposition to a dispositive motion and addresses only certain arguments raised by
defendant, a court may treat those arguments that the plaintiff failed to address as conceded.”
Davis v. Transp. Sec. Admin., 264 F. Supp. 3d 6, 10 (D.D.C. 2017) (alteration in original)
(quotation marks and citations omitted). Indeed, rather than respond to Rushmore’s argument,
25 Plaintiff merely lists harms that she allegedly suffered based on the Rushmore’s actions. Dkt. 9-
1 at 10–11. Falsity and harm, however, are not enough to allege a claim for negligent
misrepresentation, and neither Plaintiff’s complaint nor her opposition brief even hints at any
action that she took in reasonable reliance on the asserted false statements.
The Court will, accordingly, dismiss Plaintiff’s claim for negligent misrepresentation
without prejudice.
D. D.C. Consumer Protection Procedures Act
Plaintiff also claims that Rushmore violated the D.C. Consumer Protection Procedures
Act (“CPPA”), D.C. Code §§ 28-3901 et seq., which “is a comprehensive statute designed to
provide procedures and remedies for a broad spectrum of practices which injure consumers.”
Dist. Cablevision Ltd. P’ship v. Bassin, 828 A.2d 714, 722–23 (D.C. 2003) (quoting Atwater v.
D.C. Dep’t of Consumer & Reg. Affs., 566 A.2d 462, 465 (D.C. 1989)). In particular, she alleges
that Rushmore violated Section 28-3904, a provision forbidding unfair trade practices and
making it “unlawful for a ‘person,’ among other things, to ‘misrepresent . . . a material fact
which has a tendency to mislead’ or to ‘fail to state a material fact if such failure tends to
mislead.’” Glycobiosciences, Inc. v. Innocutis Holdings, LLC, 189 F. Supp. 3d 61, 71 (D.D.C.
2016) (quoting D.C. Code § 28-3904). Rushmore contends that this claim fails as a matter of
law because the CPPA applies only to unlawful trade practices arising out of a consumer–
merchant relationship, and, according to Rushmore, Plaintiff is not a consumer and Rushmore is
not a merchant. Dkt. 7-1 at 19–21. Because the Court agrees with Rushmore that Plaintiff is not,
for present purpose, a consumer, it need not reach Rushmore’s alternative argument.
The D.C. Court of Appeals “has repeatedly concluded that the CPPA was designed to
police trade practices arising only out of consumer–merchant relationships.” Archie v. U.S.
26 Bank, N.A., Nos. 18-CV-945 & 19-CV-155, 2021 WL 3412500, at *8 (D.C. 2021) (quotation
marks and citation omitted). Real estate mortgage financing transactions, moreover, may—at
least at times—fall within the coverage of the CPAA because they involve sales of consumer
credit. See DeBerry v. First Gov’t Mortg. & Invs. Corp., 743 A.2d 699, 701, 703 (D.C. 1999).
That principle applies equally to real estate refinancing. Id.; see also Archie, 2021 WL 3412500
at *8. So far, so good.
The problem with Plaintiff’s CPPA claim is that the complaint is devoid of any allegation
that she was a “consumer” in any of her dealings with Rushmore. In Shaw v. Marriott
International, the D.C. Circuit concluded that, for purposes of the CPPA, a “consumer” is “a
person who receives or demands goods or services that are primarily for personal, household, or
family use.” 605 F.3d 1039, 1043 (D.C. Cir. 2010) (citing D.C. Code § 28-3901(a)(2), (6)).
According to Rushmore, the latter part of this definition—“personal, household, or family
use”—spells trouble for Plaintiff. For one, Plaintiff alleges that “[h]er place of residence” is
Newark, New Jersey, not the District of Columbia, where the property in this case is located.
Dkt 1-1 at 1 (Comp. ¶ 2). In addition, and perhaps most significantly, the principal injury that
Plaintiff alleges with respect to the property itself is not the loss of a place to live but rather the
loss of rental—that is, business—income. Id. at 11 (Compl. ¶ 51).
Judge Hogan of this Court faced a similarly situated plaintiff in Yudzon v. Sage Title
Group, No. 18-2076, 2020 WL 2615579 (D.D.C. May 22, 2020). In that case, the plaintiff
purchased a condominium unit located in the District, and he subsequently sued the settlement
and escrow agent, alleging that the company had failed to conduct a reasonable investigation into
whether the D.C. Tenant Opportunity to Purchase Act requirements for affidavits had been met.
Id. at *1–3. At the time of the purchase, the plaintiff lived in New York, and he “purchased the
27 unit as an investment and with the possibility of residing there himself in the future.” Id. at *1.
Unfortunately for the plaintiff, these two facts doomed his claim as a matter of law. As Judge
Hogan explained, the plaintiff did not qualify as a “consumer” for purposes of the CPPA because
“the CPPA does not protect businesses engaged in commercial activity,” including those
engaged in renting their residential property. Id. at *5 (quotation marks and citation omitted).
The Yudzon decision coheres with a long line of precedent from the D.C. Court of
Appeals, the D.C. Circuit, and this Court. See, e.g., Stone v. Landis Constr. Co., 120 A.3d 1287,
1290 (D.C. 2015); Shaw, 605 F.3d at 1043; Ford v. ChartOne, Inc., 908 A.2d 72, 81 (D.C.
2006); Edwards v. Ocwen Loan Servicing, LLC, 24 F. Supp. 3d 21, 26-27 (D.D.C. 2014). And,
here, just as in Yudzon, nothing in the complaint suggests that Plaintiff engaged in any
transaction with Rushmore to acquire goods or services “primarily” for her “personal, household,
or family use.” Plaintiff does not allege that she resided at the “subject property” at any time
after Rushmore started to service the loan or after Rushmore executed the modification
agreements on behalf of the lender, and she at least suggests that she held the property
principally for investment purposes.
Plaintiff does not dispute any of this in her opposition brief, and, indeed, she concedes
that she moved to New Jersey in 2011, Dkt. 9-1 at 13 n.3, long before Rushmore entered the
equation. Instead, she argues that she is nonetheless a “consumer” for purposes of the CPPA
because she originally purchased the property as her primary residence. Id. at 13. That
contention, however, is inconsistent with the approach to the CPPA that the D.C. Circuit recently
took in Baylor v. Mitchell Rubenstein & Associates, 857 F.3d 939 (D.C. Cir. 2017). Although
that case focused on whether the defendant was a “merchant” within the meaning of the CPPA, it
made clear that courts must assess whether the required consumer–merchant relationship existed
28 at the time the defendant engaged in the alleged misconduct. In that case, the plaintiff argued
that the defendant—a law firm that was acting as a debt collector but that had not been involved
in the initial transaction—was “connected to the supply side of the [consumer] transaction in
which [the plaintiff] first acquired her student loans.” Id. at 948. The D.C. Circuit was
unpersuaded, holding that it was “implausible to characterize [the defendant] as someone who
sold or transferred consumer goods or services or who supplied the goods or services which are
or would be the subject matter of a trade practice.” Id. The court, in short, declined to ignore the
events that intervened between the plaintiff’s acquisition of the loan as a consumer, and the
defendant’s efforts to collect the ensuing debt, which the original lender had transferred to a new
creditor. Id.
The same approach applies here. As in Baylor, there is little doubt that Plaintiff engaged
in a covered, consumer transaction when she originally borrowed funds to purchase her personal
residence. Id. at 948. But by the time Rushmore became the loan servicer and executed the
modification agreements on behalf of U.S. Bank, which itself did not acquire the debt until May
2016, Dkt. 7-3 at 10, Plaintiff no longer resided at the property and, apparently, held the property
for investment purposes. Because the CPPA applies only to “consumers”—that is, those who
receive or demand goods or services “primarily for personal, household, or family use,” Shaw,
605 F.3d at 1043, her claim fails as a matter law.
Finally, Plaintiff requests leave to amend her complaint to “plead that her loan was
incurred primarily for personal, family or household purposes.” Dkt. 9-1 at 13. To the extent
she seeks leave merely to allege that she resided in the property at the time she borrowed the
funds from the original creditor, for the reasons explained above, such an amendment would
prove futile. But, to the extent she can allege facts that would support a claim that her
29 transactions with Rushmore were for “personal, family or household purposes,” the Court will
grant Plaintiff leave to amend.
The Court will, accordingly, dismiss Plaintiff’s CPPA claim without prejudice.
E. Fair Credit Reporting Act
Plaintiff further alleges that Rushmore violated the FCRA, 15 U.S.C. §§ 1681 et seq.,
“when it started and continued to report that [Plaintiff] was . . . late and/or in default on her
monthly mortgage payments after the final modification was approved,” Dkt. 1-1 at 18 (Compl.
¶ 90), and “after she disputed the reporting [to] Rushmore and . . . the respective reporting
agencies,” id. (Comp. ¶ 91). “The FCRA was enacted ‘to ensure fair and accurate credit
reporting, promote efficiency in the banking system, and protect consumer privacy.’”
Himmelstein, 931 F. Supp. 2d at 52 (quoting Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52
(2007)). “To state a claim [against a furnisher of credit information], [a plaintiff] must allege
that: (1) she notified a [credit reporting agency] of a dispute related to her credit information; (2)
the [credit reporting agency] then notified the furnisher of the information about the dispute; and
(3) the furnisher failed to fulfill the obligations enumerated in [the FRCRA].” Mushala v. US
Bank, Nat’l Ass’n, No. 18-1680, 2019 WL 1429523, at *9 (D.D.C. Mar. 29, 2019); see also
Himmelstein, 931 F. Supp. 2d at 52–53 (explaining the source of a private cause of action against
information furnishers).
Rushmore argues that Plaintiff’s FCRA claim fails because it is time-barred and factually
deficient. Dkt. 7-1 at 21–23.7 As to the first argument, Rushmore avers that “because [Plaintiff]
does not allege when she notified the [credit reporting agencies], it is impossible to determine if
7 Rushmore also contends that debts incurred for business purposes are not covered by the FCRA, but Plaintiff clarifies in her opposition that she incurred the mortgage to reside in the property, and Rushmore seems to have abandoned this argument in its reply. See Dkt. 11 at 9– 10. 30 the FCRA claim is timely.” Id. at 22. “The running of the statute of limitations,” however, “is
an affirmative defense, Fed. R. Civ. P. 8(c), and thus a plaintiff is not required to plead
timeliness in her complaint.” Fowler v. District of Columbia, No. 18-634, 2020 WL 7014205, at
*6 (D.D.C. Nov. 27, 2020). Because Rushmore fails to identify any allegation in Plaintiff’s
complaint that supports its statute of limitations defense, the defense fails at this early stage of
the proceeding. See Firestone v. Firestone, 76 F.3d 1205, 1209 (D.C. Cir. 1996) (per curiam)
(“[D]ismissal is appropriate only if the complaint on its face is conclusively time-barred.”).
As to Plaintiff’s second argument, Rushmore argues that Plaintiff does not “specify how
exactly Rushmore violated the FCRA” and does “not allege that Rushmore failed to conduct a
reasonable investigation into Plaintiff’s dispute and/or failed to report any inaccuracies or
omissions to the” credit reporting agencies. Dkt. 7-1 at 22-23. In its reply, Rushmore further
clarifies its argument:
In [her] Opposition, Plaintiff argues [that] it is unreasonable to advise Plaintiff that she overpaid in July 2018, while also reporting the Loan in default. It appears that Plaintiff is arguing that[,] as a result[,] Rushmore failed to conduct a reasonable investigation into Plaintiff’s dispute and/or failed to report any inaccuracies or omissions to the [credit reporting agencies]. However, Plaintiff could have overpaid for a single month but still be[en] delinquent on the Loan. Therefore, as pleaded, Plaintiff has not stated a violation of the FRCA.
Dkt. 11 at 10.
Although Plaintiff’s complaint is not the picture of clarity, Rushmore reads the complaint
to allege that it failed to conduct a reasonable investigation, as required by the FCRA, and the
Court concurs with that reading of the complaint. As explained above, moreover, the complaint
can be reasonably construed to allege that Rushmore inaccurately reported the payments that
Plaintiff made pursuant to the modification agreements. For example, Plaintiff alleges (or at
least appears to allege) that she informed Rushmore in September 2018 that she had received a
31 “notice of missed payment . . . from [credit reporting agency] TransUnion” and that her “loan
balance” did not reflect the full amount she had paid to Rushmore, according to the company’s
own “interface.” Dkt. 1-1 at 9 (Compl. ¶ 40). She also alleges that “Rushmore failed to apply
mortgage payments made March 2017 through January 2019 until February 2019,” id. (Compl.
¶ 44); that she “contacted the credit reporting agencies to dispute the negative reporting by . . .
Rushmore,” id. (Compl. ¶ 45); but that “Rushmore confirmed” the negative reporting, id. Those
allegations, even if turbid, are sufficient to state a claim under the FCRA. The theoretical
possibility that “Plaintiff could have overpaid for a single month but still be[en] delinquent,”
Dkt. 11 at 10, does not render Plaintiff’s claim implausible “on its face,” Iqbal, 556 U.S. at 678
(internal quotation marks and citation omitted); see also Haynes v. Navy Fed. Credit Union, 825
F. Supp. 2d 285, 294–96 (D.D.C. 2011) (holding that an FCRA claim was sufficiently pleaded
by a plaintiff who alleged an information furnisher had incorrectly reported his payments to
credit agencies and that the furnisher had confirmed the disputed report).
The Court will, accordingly, deny Rushmore’s motion to dismiss Plaintiff’s FCRA claim.
F. Fair Debt Collection Practices Act
Plaintiff further alleges that Rushmore violated another provision of 15 U.S.C. § 1692e,
which prohibits the “use of any false, deceptive, or misleading representation or means in
connection with the collection of any debt.” 15 U.S.C. § 1692e(10). The statute defines “debt”
as “any obligation . . . to pay money arising out of a transaction in which the money, property,
insurance, or services which are the subject of the transaction are primarily for personal, family,
or household purposes.” Id. § 1692a(5); see also Edwards, 24 F. Supp. 3d at 26.
Rushmore first argues that this claim is time-barred because “[t]he majority of the alleged
unlawful debt collection activities appear to have occurred more than one year prior to the filing
32 of the [c]omplaint,” and because “FDCPA claims are subject to a one-year statute of limitations
from the date the violation allegedly occurred.” Dkt. 7-1 at 24 (citing 15 U.S.C. § 1692k(d); and
Mazza v. Verizon Wash. DC, Inc., 852 F. Supp. 2d 28, 36 (D.D.C. 2012)). And, several courts
have held that “new violations” of the FDCPA will not “resurrect prior, untimely claims based
on a ‘continuing violation’ theory.” Gajewski v. Ocwen Loan Servicing, 650 F. App’x 283, 286
(7th Cir. 2016); see also Michaels v. NCO Fin. Sys., Inc., No. 16-1339, 2020 WL 2800664, at *5
(D.D.C. May 29, 2020); Quick v. EduCap, Inc., 318 F. Supp. 3d 121, 144 (D.D.C. 2018).
Rushmore’s contention fails, however, on its own terms. Even if Rushmore is correct that a
“majority” of the allegedly unlawful debt collection occurred outside the statute of limitations,
and even if the continuing violation theory does not apply in this context, Rushmore seemingly
acknowledges—as it must—that Plaintiff alleges that some of the alleged misconduct occurred
within the statute of limitations.
Rushmore further argues that the FDCPA does not apply “because Plaintiff did not allege
that she obtained the Loan primarily for personal, family or household purposes.” Dkt. 7-1 at 24.
The deed of trust, which Rushmore attaches to its motion and argues that the Court should
consider, however, includes an “occupancy” covenant, pursuant to which Plaintiff represented
that she would use the property as her “principal residence within sixty days after execution of
the [deed] and shall continue to occupy the [p]roperty as [her] principal residence for at least one
year after the date of occupancy.” Dkt. 7-2 at 4. As a result, the complaint is reasonably
construed to allege that Plaintiff obtained the loan for personal purposes. Because Rushmore
merely argues that the FDCPA applies to debts “incurred ‘primarily for personal, family or
household purposes,’” Dkt. 7-1 at 24 n.6 (emphasis added), that disposes of the issue. Rushmore
does not allege that the loan, once incurred, must be maintained primarily for personal purposes.
33 Finally, in its reply brief, Rushmore argues that Plaintiff’s FDCPA claim fails because
she does not allege that the supposed misconduct involved “communications” to Plaintiff. Dkt.
11 at 11. In a footnote, Rushmore explains:
“Determining whether a communication constitutes an attempt to collect a debt is a commonsense inquiry that evaluates the ‘nature of the parties’ relationship,[’] the objective purpose and context of the communication, and whether the communication includes a demand for payment.” Garner v. ClaimAssist, LLC, Civ. Action No. ELH-16-1260, 2017 U.S. Dist. LEXIS 42007, at *31-31 (D. Md. Mar. 22, 2017) (citation omitted). Here, [it] is unclear whether any of the alleged violative conduct was a communication, let alone one in furtherance of [the] collection of a debt.
Id. at 11 n.5. However, because this argument was raised for the first time in a reply, and
because Plaintiff has had no opportunity to respond it, the Court will not consider it. See Lucas
v. District of Columbia, 214 F. Supp. 3d 7, 10 (D.D.C. 2016); Latson v. Holder, 82 F. Supp. 3d
377, 388 n.4 (D.D.C. 2015); see also Rollins v. Envt’l Servs. (NJ) Inc. v. EPA, 937 F.2d 649, 652
n.2 (D.C. Cir. 1991) (“Issues may not be raised for the first time in a reply brief.”).
The Court will, accordingly, deny Rushmore’s motion to dismiss Plaintiff’s FDCPA
claim.
G. Intentional Infliction of Emotional Distress Claim
Plaintiff also attempts to assert a claim for intentional infliction of emotional distress.
Dkt. 1-1 at 21 (Compl. ¶¶ 103–09); see also Dkt. 9-1 at 16–17. According to Rushmore, that
claim fails because Plaintiff does not allege “that she suffered emotional distress as a result of
[Defendant’s] ‘extreme and outrageous conduct.’” Edwards, 24 F. Supp. 3d at 32 (quoting Khan
v. Parsons Glob. Servs., Ltd., 521 F.3d 421, 428 (D.C. Cir. 2008)); see also Dkt. 7-1 at 25–26.
Under D.C. law, the tort of intentional infliction of emotional distress requires “conduct ‘so
outrageous in character, and so extreme in degree, as to go beyond all possible bounds of
decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.’”
34 Homan v. Goyal, 711 A.2d 812, 818 (D.C.) (quoting Drejza v. Vaccaro, 650 A.2d 1308, 1312 n.
10 (D.C.1994)), amended by 720 A.2d 1152 (D.C. 1998); see also Restatement (Second) of Torts
§ 46 cmt. h (Am. L. Inst. 1965). Determining whether the plaintiff’s allegations meet this
standard is, at least in the first instance, a question for the Court. Homan, 711 A.2d at 818; see
also Busby v. Capital One, N.A., 932 F. Supp. 2d 114, 148 (D.D.C. 2013).
Here, nothing contained in the complaint comes close to clearing this high hurdle.
Although Plaintiff alleges that she suffered greatly due to Rushmore’s alleged misconduct, her
emotional distress is not enough to state a claim. Rather, a claim for intentional infliction of
emotional distress requires outrageous misconduct, “beyond all possible bounds of decency,”
which is “intolerable in a civilized community.” Homan, 711 A.2d at 818. Even accepting
Plaintiff’s allegations as true, Rushmore’s careless implementation of the modification
agreements and missteps in serving her loan do not plausibly rise to the level of “extreme and
outrageous conduct.” Khan, 521 F.3d at 428.
The Court will, accordingly, grant Rushmore’s motion to dismiss Plaintiff’s claim for
intentional infliction of emotional distress without prejudice.
H. Defamation
Finally, Plaintiff claims that Rushmore defamed her by incorrectly reporting to credit
agencies that she was in default and that a foreclosure would ensue. Dkt. 1-1 at 22 (Compl.
¶ 111). Rushmore argues that “because the defamation claim is premised solely on conduct[]
regulated by the FCRA, it is preempted and must be dismissed.” Dkt. 7-1 at 27. Other decisions
in this district have recognized that defamation claims of the sort Plaintiff brings are preempted
by the FCRA. See Pleznac v. Equity Residential Mgmt, LLC, 320 F. Supp. 3d 99, 107 (D.D.C.
35 2018); Ihebereme, 933 F. Supp. 2d at 98. This preemption does not hinge, as Plaintiff suggests,
Dkt. 9-1 at 17, on whether the Plaintiff in fact prevails on an FCRA claim.
The Court will, accordingly, dismiss Plaintiff’s defamation claim with prejudice.
CONCLUSION
For the reasons set forth above, the Court GRANTS Rushmore’s motion to dismiss
Plaintiff’s breach of contract claim (Count I), negligence claim (Count II), negligent
misrepresentation claim (Count III), CPPA claim (Count IV), emotional distress claim (Count
VII), and defamation claim (Count VIII). The Court DENIES Rushmore’s motion to dismiss
Plaintiff’s FCRA claim (Count V) and FDCPA claim (Count VI).
/s/ Randolph D. Moss RANDOLPH D. MOSS United States District Judge
Date: August 30, 2021
Related
Cite This Page — Counsel Stack
Hawthorne v. Rushmore Loan Management Services LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hawthorne-v-rushmore-loan-management-services-llc-dcd-2021.