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Handawy v. Bank of America, N.A.

United States District Court, E.D. Texas, Sherman Division

January 17, 2018

RAFAT HANDAWY
v.
BANK OF AMERICA, N.A.

          MEMORANDUM OPINION AND ORDER

          AMOS L. MAZZANT, UNITED STATES DISTRICT JUDGE

         Pending 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.

         BACKGROUND

         In 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.

         On 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 2, 2012.

         During 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.

         Plaintiff 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.

         In 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.

         On 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.

         Plaintiff 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.

         On 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).

         LEGAL STANDARD

         The 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).

         Rule 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 ...


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