Hopper v. BMO Harris Bank, N.A.

Background

Robert R. Hopper entered into a 30-year mortgage in 1994. Through later corporate transactions, BMO Harris Bank, N.A. acquired the mortgage, and Dovenmuehle Mortgage, Inc. became involved in servicing it. Hopper alleged that a payment for June 2020 was received but not credited to his mortgage account. He said BMO instructed him to provide copies of payment checks and that he would not need to make additional payments while the dispute was investigated. Hopper then withheld payments.

BMO later told Hopper that the June 2020 payment was only partial and that it was not required to credit the payment until the full monthly amount was paid. BMO and Dovenmuehle reported Hopper as delinquent. Hopper alleged that this damaged his credit rating and business profits. He also sent BMO a notice of error and request for information under the Real Estate Settlement Procedures Act, and BMO responded to his questions.

Hopper filed the action in state court, and Dovenmuehle removed it to federal court. Hopper later filed an amended complaint asserting ten claims. BMO and Dovenmuehle each moved to dismiss. After the court extended his response deadline twice, Hopper responded only to BMO’s motion and addressed only two claims. He did not respond to Dovenmuehle’s motion.

Legal standard

The court applied Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not allege enough facts to make a legal claim plausible. At this stage, the court generally accepts the complaint’s factual allegations as true and views reasonable inferences in the plaintiff’s favor, but it does not have to accept unsupported legal conclusions.

Abandoned claims

The court held that failing to respond to arguments supporting dismissal may waive and abandon claims. It therefore treated the claims it identified as unaddressed as abandoned and dismissed them without prejudice. The opinion’s introduction says Hopper abandoned eight of the ten claims, while the analysis specifically identifies Counts One, Two, Four, Six, Nine, and Ten as abandoned.

Breach of contract

Hopper alleged that BMO breached the mortgage contract by failing to credit his payments. The court explained that a breach-of-contract claim requires a contract, the plaintiff’s performance of required conditions, a material breach, and damages. It found that Hopper had not identified the mortgage term that BMO allegedly breached.

The court also considered the mortgage language, which stated that the lender could accept a partial payment without applying it immediately and could hold unapplied funds until the borrower made enough payment to bring the loan current. The court concluded that this language contradicted Hopper’s allegation that the defendants breached the contract by not immediately crediting the partial payment. It dismissed the breach-of-contract claim without prejudice.

Fair Credit Reporting Act claims

Hopper alleged negligent and knowing or willful violations of the Fair Credit Reporting Act, claiming that the defendants failed to reasonably investigate his payment dispute and supplied inaccurate or harmful information to credit agencies.

The court distinguished between a consumer reporting agency, which assembles or evaluates consumer information to provide reports to third parties, and a furnisher, which provides consumer information to a consumer reporting agency. The court explained that the duties Hopper relied on are triggered when a furnisher receives notice of a dispute from a consumer reporting agency.

Although Hopper argued in his briefing that BMO and Dovenmuehle were both furnishers and consumer reporting agencies, he had not alleged facts showing that either defendant regularly assembled or evaluated consumer information for the purpose of providing consumer reports. Because he had not adequately alleged that either defendant was a consumer reporting agency, he also had not adequately alleged that the defendants received the type of notice needed to trigger the asserted furnisher duties. The court dismissed the Fair Credit Reporting Act claims without prejudice.

Disposition

The court granted Dovenmuehle Mortgage, Inc.’s motion to dismiss and granted BMO Harris Bank, N.A.’s motion to dismiss. It dismissed the complaint without prejudice and directed that judgment be entered.