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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 18-10137
Non-Argument Calendar
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D.C. Docket No. 0:17-cv-61266-WPD
SILVIA LEONES,
on behalf of herself and all others similarly situated,
Plaintiff - Appellant,
versus
RUSHMORE LOAN MANAGEMENT SERVICES LLC,
Defendant - Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(September 24, 2018)
Before WILSON, JORDAN, and JULIE CARNES, Circuit Judges.
PER CURIAM:
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Plaintiff Silvia Leones filed a lawsuit against Defendant Rushmore Loan
Management Services LLC for violation of the Fair Credit Reporting Act
(“FCRA”), 15 U.S.C. § 1681 et seq. Plaintiff’s amended complaint alleges that
Defendant furnished inaccurate information to credit reporting agencies about
Plaintiff’s mortgage account and improperly continued to do so after Plaintiff
reported the inaccuracies to the credit reporting agencies and Defendant. The
district court granted Defendant’s motion to dismiss, finding that the information
provided by Defendant to the credit reporting agencies was both accurate and
complete. After careful review, we affirm.
I. BACKGROUND
A. Factual Background
In January 2005, Plaintiff executed an adjustable-rate promissory note in
favor of Washington Mutual Bank, FA. Plaintiff and her husband executed a
mortgage to secure payment of the note. Paragraph 22 of the mortgage is an
acceleration provision permitting the lender to demand immediate payment in full
of all sums secured by the mortgage upon default. Paragraph 19 of the mortgage
gives Plaintiff the right to reinstate the mortgage after acceleration, provided that,
among other things, she paid the lender all sums which then would be due under
the mortgage as if no acceleration occurred.
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In February 2016, Defendant’s predecessor-in-interest filed a lawsuit in state
court against Plaintiff to foreclose the mortgage. The foreclosure complaint
alleges that Plaintiff defaulted under the note and mortgage because she failed to
make the payment due on March 1, 2011, and all subsequent payments. In the
foreclosure complaint, Defendant’s predecessor-in-interest declared “the full
amount payable under the Note and Mortgage to be due and payable.”
Defendant began servicing Plaintiff’s loan effective October 17, 2016.
Plaintiff obtained credit reports from credit reporting agencies TransUnion and
Equifax in May 2017. For Plaintiff’s mortgage loan account, the TransUnion
report states “Foreclosure initiated” and indicates that the account is 120 days
delinquent beginning in January 2017. The Equifax report similarly states
“foreclosure process started Real Estate Mortgage” and also indicates the account
is 120 days delinquent beginning in January 2017. Plaintiff wrote TransUnion and
Equifax and disputed the information provided by Defendant that appeared on her
credit reports. In her notices of dispute, Plaintiff maintained that Defendant could
not report that Plaintiff had missed monthly installments after Defendant’s
predecessor-in-interest “accelerated the mortgage making all monthly payments
under the note and mortgage, plus interest, due immediately.” Plaintiff stated that
“the filing of the verified complaint to foreclose mortgage in February 2016,
constitutes the date of acceleration, after which [Plaintiff] no longer had the ability
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and/or obligation to make monthly payments to the furnisher of the consumer
information at issue, [Defendant].” Plaintiff alleges that the credit reporting
agencies notified Defendant of the reported inaccurate information, but that
Defendant failed to conduct a reasonable investigation and correct the inaccuracies
despite her request.
B. Procedural History
On June 27, 2017, Plaintiff initiated this action on behalf of herself and all
others similarly situated, seeking relief pursuant to the FCRA. Plaintiff filed a first
amended complaint on October 2, 2017. Plaintiff asserted claims pursuant to 15
U.S.C. §§ 1681n and 1681o of the FCRA for Defendant’s willful or negligent
violation of the obligations imposed by 15 U.S.C. § 1681s-2(b). Plaintiff alleged
that Defendant “inaccurately” reported to consumer reporting agencies, including
TransUnion and Equifax, that her mortgage was “120 or more days delinquent
and/or missed a monthly payment” for the period from January through July, 2017.
Central to Plaintiff’s claim is her contention that “the filing of the [foreclosure
complaint] constitutes the date of acceleration after which the Plaintiff no longer
had the ability and/or obligation to make monthly payments to Defendant.”
Plaintiff asserts that “[h]ad Defendant conducted a reasonable investigation and/or
reinvestigation, Defendant would have verified that the mortgage and loan account
had been accelerated and Plaintiff no longer had to [sic] option of making monthly
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installment payments pursuant to the terms of the original Note and Mortgage,
thereby rendering the Inaccuracies 1 being furnished by Defendant to the [credit
reporting agencies] . . . incomplete and/or inaccurate.”2 Plaintiff further alleges
that, as a result of Defendant’s failure to conduct a reasonable investigation, “[she],
and others similarly situated, have suffered damage to their creditworthiness,
impairment of their ability to rebuild and/or build their creditworthiness,
impairment of their ability to obtain credit on favorable terms and/or obtain credit
whatsoever, as well as other injuries, including without limitation, severe financial
and emotional harm . . . .”
Defendant moved to dismiss Plaintiff’s first amended complaint. Defendant
argued that Plaintiff’s first amended complaint “should be dismissed because she
concedes that she has not made any payments pursuant to the Mortgage since
February 2016 and the exhibits attached to her [first amended complaint] establish
that Rushmore accurately reported her mortgage loan as 120 days or more
delinquent.” Defendant also argued that “Plaintiffs claim that she no longer had
the ‘ability and/or obligation’ to make monthly payments following acceleration
1
Plaintiff’s first amended complaint defines “Inaccuracies” as “inaccurate and/or incomplete
information.” Plaintiff complains only about the reporting of her mortgage as “120 days or more
delinquent and/or missed a monthly payment” as being inaccurate or incomplete.
2
Plaintiff did not allege that she had made, or attempted to make, any mortgage payments
following the filing of the foreclosure action in February 2016.
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does not allege a factual inaccuracy in Rushmore’s reporting but instead asserts a
legal dispute, which is insufficient to support a claim under the FCRA.”
The district court agreed with Defendant, noting that “the reported
information regarding Plaintiff’s mortgage loan account – that it was 120 days or
more delinquent and that foreclosure proceedings were initiated – was both
accurate and complete.” The district court further found that “Plaintiff has alleged
at best a legal defense to the debt, not a factual inaccuracy in Rushmore’s
reporting” and that “[t]his is an insufficient basis for her asserted FCRA claims”
against Defendant. The district court also concluded that “where the reported
information was accurate and complete, Plaintiff cannot plausibly allege damages
based on the furnisher’s alleged failure to conduct a reasonable investigation or
reinvestigation.” Accordingly, the district court granted Defendant’s motion to
dismiss with prejudice.
II. DISCUSSION
A. Standard of Review
“We review de novo the district court’s grant of a motion to dismiss for
failure to state a claim under Fed. R. Civ. P. 12(b)(6), accepting the allegations in
the complaint as true and construing them in the light most favorable to the
plaintiff.” Timson v. Sampson, 518 F.3d 870, 872 (11th Cir. 2008) (per curiam).
“We are not, however, required to accept the labels and legal conclusions in the
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complaint as true.” Edwards v. Prime, Inc., 602 F.3d 1276, 1291 (11th Cir. 2010);
see also Ashcroft v. Iqbal, 556 U.S. 662 (2009). “To survive a motion to dismiss, a
complaint need only present sufficient facts, accepted as true, to ‘state a claim to
relief that is plausible on its face.’” Renfroe v. Nationstar Mortg., LLC, 822 F.3d
1241, 1243 (11th Cir. 2016) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007)). “A complaint is plausible on its face when it contains sufficient facts
to support a reasonable inference that the defendant is liable for the misconduct
alleged.” Gates v. Khokhar, 884 F.3d 1290, 1296 (11th Cir. 2018) (citing Ashcroft,
556 U.S. at 678).
B. Plaintiff’s Deficient Complaint
Plaintiff argues on appeal that the district court erred in granting Defendant’s
motion to dismiss her claims pursuant to 15 U.S.C. §§ 1681n and 1681o of the
FCRA for Defendant’s willful or negligent violation of the obligations imposed by
15 U.S.C. § 1681s-2(b). As explained in our decision in Hinkle:
The FCRA requires CRAs and entities that furnish information to
CRAs (“furnishers” or “furnishers of information”) to investigate
disputed information. When a consumer disputes information with a
CRA, the CRA must “conduct a reasonable reinvestigation to
determine whether the disputed information is inaccurate.” 15 U.S.C.
§ 1681i(a)(1)(A). As part of this investigation, the CRA is required to
notify the person or entity that furnished the information that the
information has been disputed. Id. § 1681i(a)(2). Upon receipt of this
notice, the furnisher of information must: (1) “conduct an
investigation with respect to the disputed information”; (2) “review all
relevant information provided by the [CRA]” in connection with the
dispute; and (3) “report the results of the investigation to the [CRA].”
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Id. § 1681s-2(b)(1). Should the investigation determine that the
disputed information is “inaccurate or incomplete or cannot be
verified,” the furnisher must “as appropriate, based on the results of
the reinvestigation promptly . . . modify [,] . . . delete [or] permanently
block the reporting” of that information to CRAs. Id.
§ 1681s-2(b)(1)(E). The CRAs must also delete or modify the
information based on the results of reinvestigation. Id.
§ 1681i(a)(5)(A)(I).
Hinkle v. Midland Credit Mgmt., Inc., 827 F.3d 1295, 1301 (11th Cir. 2016).
“Section 1681s-2(b) thus ‘contemplates three potential ending points to
reinvestigation: verification of accuracy, a determination of the inaccuracy or
incompleteness, or a determination that the information cannot be verified.’” Felts
v. Wells Fargo Bank, N.A., 893 F.3d 1305, 1312 (11th Cir. 2018) (quoting Hinkle,
827 F.3d at 1301–02). “A furnisher may verify that the information is accurate by
uncovering documentary evidence that is sufficient to prove that the information is
true, or by relying on personal knowledge sufficient to establish the truth of the
information.” Id. (quotations omitted).
“The ‘appropriate touchstone’ for evaluating a furnisher’s investigation
under § 1681s-2(b) is ‘reasonableness.’” Id. (quoting Hinkle, 827 F.3d at 1301–
02). “[W]hat constitutes a ‘reasonable investigation’ will vary depending on the
circumstances of the case.” Id. “When a furnisher ends its investigation by
reporting that the disputed information has been verified as accurate, the question
of whether the furnisher behaved reasonably will turn on whether the furnisher
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acquired sufficient evidence to support the conclusion that the information was
true.” Id.
Here, no dispute exists that the reported information is accurate. Plaintiff
does not dispute that her mortgage was in foreclosure as reported. Nor does
Plaintiff allege, or otherwise contend, that she made payments on her loan after
February 2016 that would render inaccurate the reporting of her loan as 120 days
delinquent starting in January 2017. Plaintiff’s claims cannot survive a motion to
dismiss without some supportable allegation that the reported information is
inaccurate or incomplete. As we explained in Felts:
Regardless of the nature of the investigation a furnisher conducted, a
plaintiff asserting a claim against a furnisher for failure to conduct a
reasonable investigation cannot prevail on the claim without
demonstrating that had the furnisher conducted a reasonable
investigation, the result would have been different; i.e., that the
furnisher would have discovered that the information it reported was
inaccurate or incomplete, triggering the furnisher’s obligation to
correct the information. Absent that showing, a plaintiff’s claim
against a furnisher necessarily fails, as the plaintiff would be unable to
demonstrate any injury from the allegedly deficient investigation.
And, in turn, a plaintiff cannot demonstrate that a reasonable
investigation would have resulted in the furnisher concluding that the
information was inaccurate or incomplete without identifying some
facts the furnisher could have uncovered that establish that the
reported information was, in fact, inaccurate or incomplete.
Felts, 893 F.3d at 1313 (emphasis in original). Plaintiff failed to allege any facts
Defendant could have uncovered that establish the reported information was, in
fact, inaccurate or incomplete.
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Plaintiff’s allegation that Defendant’s investigation of the alleged inaccuracy
in her credit reports was unreasonable because “a reasonable investigation and/or
reinvestigation . . . would have verified that the mortgage and the loan account had
been accelerated and Plaintiff no longer had to [sic] option of making monthly
installment payments” does not establish a viable claim. Plaintiff’s allegation
depends on an incorrect legal conclusion and does not identify facts Defendant
could have uncovered that reveal an inaccuracy in the reported information.
Acceleration of the loan did not eliminate Plaintiff’s loan payment obligations.
Consequently, Defendant’s reporting that Plaintiff was 120 days delinquent on her
payment obligations during the period of acceleration was accurate, complete, and
not misleading. See Felts, 893 F.3d at 1312–19 (affirming district court’s finding
that plaintiff’s FCRA claim against mortgage lender failed as a matter of law
because the undisputed material facts demonstrated that lender’s reporting of
plaintiff’s mortgage account as past due and delinquent during a forbearance plan
was neither inaccurate nor materially misleading). Plaintiff failed to make a
threshold showing that a reasonable investigation could have uncovered an
inaccuracy in the reported information. Id.
Moreover, the loan and mortgage documents attached to Plaintiff’s
complaint contradict Plaintiff’s assertion that she no longer had the ability to make
monthly payments. “A copy of a written instrument that is an exhibit to a pleading
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is a part of the pleading for all purposes.” Fed. R. Civ. P. 10(c); see also Miljkovic
v. Shafritz & Dinkin, P.A., 791 F.3d 1291, 1297 n.4 (11th Cir. 2015) (“Appellant
attached multiple exhibits to his complaint . . . and we treat those documents as
part of the complaint for Rule 12(b)(6) purposes.”). “[I]f the allegations of the
complaint about a particular exhibit conflict with the contents of the exhibit itself,
the exhibit controls.” Hoefling v. City of Miami, 811 F.3d 1271, 1277 (11th Cir.
2016).
Paragraph 19 of the mortgage agreement expressly permits Plaintiff to
reinstate the mortgage and fulfill her loan obligations after acceleration by paying
“all sums which then would be due under this Security Instrument and the Note as
if no acceleration had occurred.” Thus, up until foreclosure, Plaintiff had the
ability to satisfy her loan obligations and continue monthly installment payments.
See Deutsche Bank Trust Co. Americas v. Beauvais, 188 So. 3d 938, 947 (Fla. 3d
DCA 2016) (“[D]espite acceleration of the balance due and the filing of an action
to foreclose, the installment nature of a loan secured by such a mortgage continues
until a final judgment of foreclosure is entered.”); Bartram v. U.S. Bank, N.A., 211
So. 3d 1009, 1020–21 (Fla. 2016) (finding that mortgagor retains the right under
reinstatement provision to cure the default and to continue making monthly
installment payments until foreclosure judgment entered in favor of lender).
Acceleration of the loan does not justify an inference that Defendant failed to
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conduct a reasonable investigation or that Defendant’s report that the loan was 120
days delinquent was inaccurate, incomplete, or misleading because acceleration did
not extinguish Plaintiff’s loan obligations and her payments were in fact past due.
See Felts, 893 F.3d at 1309 (holding that reporting of delinquent loan was not
inaccurate as a matter of law where plaintiff failed to meet her payment obligations
under the note even though plaintiff had made timely payments under a
forbearance plan).
We reject Plaintiff’s assertion that the district court improperly imposed “an
extra-textual threshold requirement that a consumer prove a facially apparent
factual inaccuracy at the pleadings stage of any claim pursuant to 1681s-2(b).”
The district court applied a basic legal principle, not an “extra-textual”
requirement. Dismissal is warranted as a matter of law because Plaintiff cannot
plausibly allege damages based on Defendant’s failure to conduct a reasonable
investigation where the reported information was accurate and complete. Felts,
893 F.3d at 1313 (explaining that a plaintiff’s claim against a furnisher necessarily
fails absent a showing that the furnisher would have discovered that the
information it reported was inaccurate or incomplete). Defendant accurately
reported the facts and Plaintiff’s legal contentions regarding her obligations after
acceleration are unpersuasive. The district court properly dismissed Plaintiff’s
claims. Id.
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We also agree with the district court that dismissal with prejudice is
warranted. This is not a case where a more carefully drafted complaint might state
a claim. 3 Moreover, Plaintiff did not seek leave to amend when confronted with
Defendant’s motion to dismiss. Plaintiff also did not seek relief under Rule 59(e)
or Rule 60(b)(6) after the district court entered its order of dismissal to request
leave to amend and address the concerns in the order. See United States ex rel.
Atkins v. McInteer, 470 F.3d 1350, 1361 n.22 (11th Cir. 2006) (noting that “[p]ost-
judgment, the plaintiff may seek leave to amend if he is granted relief under Rule
59(e) or Rule 60(b).”). “Nor was the district court in its order of dismissal under
an obligation to sua sponte give Plaintiff[] leave to file a second amended
complaint.” Almanza v. United Airlines, Inc., 851 F.3d 1060, 1075 (11th Cir.
3
On appeal, Plaintiff argues that “[Plaintiff’s] Post-Dispute Reports evidence issues of material
fact unable to be determined upon Appellee’s Rule 12(b)(6) Motion to Dismiss. Plaintiff points
to various alleged discrepancies in the post-dispute credit reports provided by Experian,
TransUnion, and Equifax as justifying an inference that Defendant failed to conduct a reasonable
investigation. Plaintiff’s first amended complaint does not contain any such allegations. Nor did
Plaintiff present these arguments to the district court in response to Defendant’s motion to
dismiss or in a motion to amend Plaintiff’s complaint. “As a general matter, ‘issue[s] not raised
in the district court and raised for the first time in an appeal will not be considered by this
[C]ourt.’” Cita Tr. Co. AG v. Fifth Third Bank, 879 F.3d 1151, 1156 (11th Cir. 2018) (quoting
Access Now, Inc. v. Southwest Airlines Co., 385 F.3d 1324, 1326–35 (11th Cir. 2004)). None of
the limited exceptions to this general rule applies and we decline to address Plaintiff’s new
arguments. But even if we did consider Plaintiff’s unpreserved arguments, they relate only to
questioning the quality of Defendant’s investigation and do not undermine our conclusion that
Defendant’s reporting of Plaintiff’s loan as 120 days delinquent and under foreclosure during the
relevant period was accurate and complete as a matter of law. Felts, 893 F.3d at 1313
(explaining that quality of investigation is immaterial absent showing that furnisher would have
discovered that the information it reported was inaccurate or incomplete).
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2017) (citing Wagner v. Daewoo Heavy Indus. Am. Corp., 314 F.3d 541, 542 (11th
Cir. 2002) (en banc)).
III. CONCLUSION
For the reasons explained above, we AFFIRM the decision of the district
court.
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