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Rogers v. Bank of America, N.A.

United States District Court, D. Kansas

July 7, 2014

SHELLI F. ROGERS, Plaintiff,
BANK OF AMERICA, N.A., Defendant.


CARLOS MURGUIA, District Judge.

Plaintiff Shelli F. Rogers brings this case under the Kansas Consumer Protection Act ("KCPA"), claiming that defendant Bank of America, N.A. repeatedly violated the KCPA by using deceptive and unconscionable acts in conjunction with plaintiff's loan and mortgage. According to plaintiff, defendant solicited plaintiff to modify her loan, but then continually reassigned plaintiff's modification application to different representatives (for a total of twelve representatives in twenty-one months). Thirteen times, defendant unnecessarily requested updated financial information from plaintiff. And plaintiff alleges that defendant misrepresented that plaintiff's home was in foreclosure when it was not. Plaintiff claims that because of defendant's actions, plaintiff eventually was forced into bankruptcy.

Based on these allegations, plaintiff filed this case under the KCPA. Defendant moved to dismiss the action in its entirety (Doc. 9). Defendant claims that (1) the KCPA does not apply to loan modification requests; (2) even if the KCPA does apply, plaintiff failed to allege any deceptive or unconscionable acts or practices; (3) the handling of plaintiff's loan modification application was a single transaction-not a series of multiple events; and (4) at a minimum, some of plaintiff's claims are barred by the statute of limitations. The court considers each of these arguments in turn.

I. Standard of Review

The court will grant a 12(b)(6) motion to dismiss only when the factual allegations fail to "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Although the factual allegations need not be detailed, the claims must set forth entitlement to relief "through more than labels, conclusions and a formulaic recitation of the elements of a cause of action." In re Motor Fuel Temperature Sales Practices Litig., 534 F.Supp.2d 1214, 1216 (D. Kan. 2008). The allegations must contain facts sufficient to state a claim that is plausible, rather than merely conceivable. Id.

"All well-pleaded facts, as distinguished from conclusory allegations, must be taken as true." Swanson v. Bixler, 750 F.2d 810, 813 (10th Cir. 1984); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The court construes any reasonable inferences from these facts in favor of the plaintiff. Tal v. Hogan, 453 F.3d 1244, 1252 (10th Cir. 2006). In reviewing the sufficiency of a complaint, the court determines whether the plaintiff is entitled to offer evidence to support her claims-not whether the plaintiff will ultimately prevail. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by Davis v. Scherer, 468 U.S. 183 (1984).

II. Discussion

A. Does the KCPA apply?

First, defendant contends that plaintiff fails to state a claim because the KCPA does not apply under these factual circumstances. The KCPA applies to "consumer transactions." The Act defines a consumer transaction as "a sale, lease, assignment, or other disposition for value of property or services within this state... to a consumer; or a solicitation by a supplier with respect to any of these dispositions." Kan. Stat. Ann. § 50-624(c). Kansas courts interpret the KCPA broadly, Stephan v. Bhd. Bank & Trust Co., 649 P.2d 419, 422 (Kan.Ct.App. 1982) (citations omitted), in favor of protecting consumers, see Kan. Stat. Ann. § 50-623(b).

The court determines that the KCPA offers plaintiff an avenue for relief. She is a consumer; defendant is a supplier; and the solicitation of a loan modification is a consumer transaction. Cf. Schneider v. Citibank, N.A., No. 13-4094-SAC, 2014 WL 219339, at *8-9 (D. Kan. Jan. 21, 2014) (holding that a grant of a mortgage and the servicing of the mortgage were consumer transactions).

Judge Robinson recently considered a similar case. In Shane v. CitiMortgage, Inc., a bank solicited a borrower to refinance a mortgage. No. 11-2689-JAR, 2012 WL 3111730, at *2 (D. Kan. July 30, 2012). The court held that the bank's actions could constitute a KCPA violation. Id. at *3. But see Bowers v. Mortg. Elec. Reg. Sys., Inc., No. 10-4141-JTM, 2012 WL 4747162, at *16 (D. Kan. Oct. 4, 2012) ("[T]he communications between the Bowerses and Wells Fargo were financial communications relating to a mortgage obligation, and thus do not fall within the scope of the KCPA."). This court agrees with the reasoning in Shane, and determines that the KCPA applies to plaintiff's claims as alleged. The court denies this portion of defendant's motion.

B. Are plaintiff's allegations sufficient?

Second, defendant argues that even if the KCPA applies, plaintiff's allegations are insufficient to state a claim. To state a claim under the KCPA, plaintiff has two avenues for supplier liability. See Kan. Stat. Ann. § 50-623(b). She may show that defendant engaged in deceptive acts or practices in connection with a consumer transaction. Id. § 50-626(a). Or, alternatively, she may show that defendant engaged in unconscionable acts or practices in connection with a consumer ...

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