Gilmore v. Wilshire Quinn Capital Inc

Background

Kevin E. Gilmore sued Wilshire Quinn Capital Inc. He alleged that he was a minority, senior citizen, and homeowner and that the defendant targeted him through one or more mortgage loans. He claimed that the defendant’s predatory lending and servicing practices violated the Fair Housing Act by reducing the equity of minority borrowers.

Gilmore also alleged that the defendant’s conduct, together with the actions of other industry participants, resulted in damage to his credit report after bankruptcy, lost rental income, more than $600,000 in lost equity, loss of living arrangements, emotional distress, and pain and suffering. The complaint did not identify the location of his properties, the loan amounts, the dates of the loans, or the specific predatory practices used against him. It stated that one loan was reduced from $2,050,000 to $1,700,000 but did not explain when that occurred, what the loan was for, whether Gilmore accepted the change, or how it affected him.

At the hearing, when asked to clarify the basis for his Fair Housing Act claim, Gilmore referred to problems involving clear title to his property. The court noted that the complaint did not raise that issue.

The Motion to Dismiss

Wilshire Quinn moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not state a legally sufficient claim. It also argued that the Fair Housing Act claims were barred by the statute of limitations.

Statute of Limitations

The court denied the motion to dismiss on the statute-of-limitations basis. The Fair Housing Act generally requires a claim to be filed no later than two years after the alleged discriminatory housing practice ended. But the complaint did not state when the loans originated or when any changes to the loans occurred. The defendant’s limitations argument depended on facts outside the complaint, which the court could not accept for this motion.

Failure to State a Claim

The court granted the motion to dismiss without prejudice because the complaint did not satisfy the basic pleading requirement. The court explained that Gilmore needed to identify the actions by each defendant that gave rise to his claims, the laws or rights allegedly violated, and how he was harmed.

Although Gilmore alleged that he was deprived of property and that the defendant participated in a broader predatory-lending scheme, he did not allege enough facts showing how the defendant’s actions gave rise to his claims. The court therefore could not determine from the complaint whether he had a valid Fair Housing Act claim.

Disposition

The court granted Wilshire Quinn’s motion to dismiss without prejudice and allowed Gilmore to file an amended complaint by July 14, 2023.