United States District Court, E.D. Texas, Sherman Division
MEMORANDUM OPINION AND ORDER
L. MAZZANT, UNITED STATES DISTRICT JUDGE
before the Court is Defendant's Motion to Dismiss (Dkt.
#6). Having considered the pleadings, the Court finds the
motion should be granted in part and denied in part.
March 2004, Plaintiff Rafat Handawy borrowed $229, 425.00
from the mortgage department of Defendant Bank of America
(“BOA”) to purchase a homestead at 9712
Honeysuckle Drive, Frisco, Texas 75035 (the
“Property”). Plaintiff granted a purchase money
interest lien to BOA on the homestead land and improvements.
April 20, 2012, Plaintiff filed a Chapter 7 bankruptcy, Case
No. 12-30459-sgi7, in the United States Bankruptcy Court for
the Northern District of Texas. The bankruptcy filing listed
BOA's debt on Schedule D in the amount of $200, 503.00.
The listing showed the debt as a secured loan with the
Property having a value of $254, 848.00 as collateral.
Plaintiff was granted a discharge in the bankruptcy on July
the bankruptcy and thereafter Plaintiff made monthly payments
on BOA's debt as they came due. Plaintiff prepaid the
entire debt in 2017, and Bank of America released the lien on
Plaintiff's homestead. The release was filed and recorded
on April 18, 2017.
alleges that after the discharge in the bankruptcy was
granted BOA began misreporting the status of Plaintiff's
debt to three credit reporting agencies-Experian, Equifax,
and Trans Union. BOA stated that the balance due on the debt
was zero as a result of the discharge in bankruptcy. At the
same time, Plaintiff was making regular installment payments
of principal and interest as due on the note and BOA failed
to update Plaintiff's payments in the payment history.
Further, Plaintiff complains that BOA did not report that the
note was well secured with the Property having a value
substantially in excess of the balance due on the debt.
August 2012, Plaintiff retained First Stone Credit Counseling
(“FSCC”) to clear up his credit. FSCC requested
that BOA report the true condition of the debt owed to BOA.
On October 20, 2013, FSCC sent requests to the three credit
reporting agencies to dispute BOA's report of
Plaintiff's debt. All three refused to correct the
report. FSCC then sent a letter by priority mail to the
BOA's President requesting a correction, which averred no
response. An FSCC representative then called BOA's credit
reporting department and spoke to a BOA representative who
stated that BOA did not agree its report of Plaintiff's
debt was incorrect and refused to revise it.
September 18, 2015, Plaintiff filed suit against BOA in the
Justice of the Peace Court, Precinct 3, Place 2, Collin
County, Texas, Case No. 32-SC-15-00261. While the Justice of
the Peace Court case was pending, Plaintiff had the
opportunity to buy two 7-Eleven, Inc.
(“7-Eleven”) franchised convenience stores in
Dallas, Texas. Plaintiff alleges to have had sufficient
personal liquidity and credit commitments to make the
purchases. Negotiations for the purchases proceeded right
along until 7-Eleven ordered credit reports on Plaintiff on
April 18, 2017. Shortly thereafter, 7-Eleven terminated
negotiations. Additionally, on December 9, 2015, Plaintiff
applied for a car loan with BOA, which was rejected due to
his credit issues.
is seeking lost profit damages of $3, 200, 000 for the lost
7-Eleven transaction. Because that amount far exceeded the
jurisdictional limit of $10, 000 in recoverable damages for
the Justice of the Peace Court, Plaintiff nonsuited the case
in order to file this suit in Federal Court.
August 14, 2017, Plaintiff filed his Original Complaint in
this Court (Dkt. #1). On October 5, 2017, Defendant filed
this motion to dismiss (Dkt. #6). On October 11, 2017,
Plaintiff filed a response (Dkt. #7). On October 18, 2017,
Defendant filed a reply (Dkt. #8).
Federal Rules of Civil Procedure require that each claim in a
complaint include “a short and plain statement . . .
showing that the pleader is entitled to relief.”
Fed.R.Civ.P. 8(a)(2). The claims must include enough factual
allegations “to raise a right to relief above the
speculative level.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). Thus, “[t]o
survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.'”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Twombly, 550 U.S. at 570).
12(b)(6) provides that a party may move for dismissal of an
action for failure to state a claim upon which relief can be
granted. Fed.R.Civ.P. 12(b)(6). The Court must accept as true
all well-pleaded facts contained in the plaintiff's
complaint and view them in the light most favorable to the
plaintiff. Baker v. Putnal, 75 F.3d 190, 196 (5th
Cir. 1996). In deciding a Rule 12(b)(6) motion,
“[f]actual allegations must be enough to raise a right
of relief above the speculative level.”
Twombly, 550 U.S. at 555; Gonzalez v. Kay,
577 F.3d 600, 603 (5th Cir. 2009). “The Supreme Court
recently expounded upon the Twombly standard,
explaining that ‘[t]o survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as
true, to state a claim to relief that is plausible on its
face.” Gonzalez, 577 F.3d at 603 (quoting
Iqbal, 556 U.S. at 678). “A claim has facial
plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct ...