Case 9:17-cv-80728-DMM Document 25 Entered on FLSD Docket 08/07/2017 Page 1 of 20

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

WEST PALM BEACH DIVISION

CASE NO. 17-cv-80728 MIDDLEBROOKS/BRANNON

LAURENCE S. SCHNEIDER,

Plaintiff,

v.

FIRST AMERICAN BANK, as

successor by merger to Bank of
Coral Gables, LLC,

Defendant.
/

FIRST AMERICAN BANK’S

MOTION TO DISMISS COMPLAINT

COMES NOW the Defendant, FIRST AMERICAN BANK (“First American”), by and

through its undersigned attorneys, and in accordance with the applicable Federal Rules

of Civil Procedure, particularly Fed. R. Civ. P. 12(b) and S.D. Fla. L.R. 7.1, hereby files

this its Motion to Dismiss the Complaint filed by Plaintiff, LAURENCE S. SCHNEIDER

(“Schneider”), and in support thereof states as follows:

Procedural History

The captioned litigation was filed by Schneider pro se on June 13, 2017 [D.E. 1].1

This case was initially assigned to United States District Court Judge Marra but,

apparently because on June 14, 2017, Schneider had identified the First American Bank

1
Since the filing of the Complaint, Attorney Manjit Gil has entered an appearance as counsel of
record for Schneider [D.E. 9], and Attorney Brent Tantillo has been permitted to appear as co-counsel for
Schneider, pro hac vice [D.E. 14].
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v. Schneider, United States District Court Southern District of Florida Case No. 17-cv-

80723 case on his Civil Cover Sheet [D.E. 1-1], the captioned litigation was automatically

transferred to Judge Donald Middlebrooks in accordance with S. D. Fla. L. R. 3.8 [D.E.

5]. First American Bank v. Schneider is a foreclosure case originally filed by First

American in the Palm Beach Circuit Court on August 19, 2016 (“State Foreclosure

Litigation”). The Schneiders improvidently removed the State Foreclosure Litigation to

the United States District Court on June 9, 2017. Following the issuance by Judge

Middlebrooks on June 13, 2017 of an Order to Show Cause, the State Foreclosure

Litigation was remanded back to the Palm Beach Circuit Court on June 22, 2017.

First American’s State Foreclosure Complaint named Laurence S. Schneider,

Stephanie L. Schneider and The Oaks at Boca Raton Property Owners’ Association, Inc.

as Defendants and sought to foreclose a Mortgage on the residential property located at

17685 Circle Pond Court, Boca Raton, Florida 33496-1002 (hereinafter the “Property”).2

In the State Foreclosure Litigation, Schneider (not joined by his wife) filed a

Counterclaim containing three Courts: Count 1 - Violations of The Fair Credit Reporting

Act (“FCRA”), Count 2 – Negligent and/or Fraudulent Misrepresentation and Count 3 –

Conversion. First American filed its Motion to Dismiss Schneider’s Counterclaim arguing

that (a) the FCRA does not create a private right of action and (b) that Schneider’s

Counterclaim was preempted by the FCRA. On January 26, 2017, the Palm Beach Circuit

Court entered an Order Granting First American’s Motion to Dismiss Schneider’s

2
On July 28, 2006, Schneider executed and delivered a Credit Agreement for a 10-year Home Equity
Line of Credit (HELOC) with a credit limit of $1,500,000.00 and promised to pay any and all amounts
borrowed from the $1,500,000.00 Credit Agreement by making a single balloon payment on July 28, 2016
[D.E. 1, Ex. A]. In addition, on July 28, 2006, Schneider, and his wife, Stephanie L. Schneider, executed
and delivered a Mortgage securing payment of the HELOC to First American’s predecessor in interest,
Bank of Coral Gables.

2
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Counterclaim; Counts 1 (FRCA) and 3 of the Counterclaim were dismissed with prejudice

while Count 2 was dismissed without prejudice. Schneider was granted 20 days from the

entry of the Court’s January 26th Order to file an amended counterclaim.

On March 6, 2017, Schneider filed his Amended Counterclaim purporting to state

causes of action for: Count 1 – Negligent Misrepresentation, Count 2 – Defamation, Count

3 – Violation of the Florida Deceptive and Unfair Trade Practices Act, Count 4 – Breach

of the Covenant of Good Faith and Fair Dealing and Count 5 – Negligence. As all five

Counts of the Amended Counterclaim were fatally deficient, as a matter of law, First

American filed its Motion to Dismiss Schneider’s Amended Counterclaim. Prior to the

hearing on First American’s Motion to Dismiss the Amended Counterclaim, Schneider

voluntarily dismissed Counts 1,2, 3 and 5. On April 7, 2017, the Palm Beach Circuit Court

dismissed Count 4 of Schneider’s Amended Counterclaim. The Palm Beach Circuit Court

denied Schneider’s ore tenus motion to file a second amended counterclaim.

On June 26, 2017, the Palm Beach Circuit Court granted First American’s Motion

for Summary Judgment and entered a Final Judgment of Foreclosure and a Final

Judgment on the Breach of Contract claim (against Laurence Schneider).

On July 18, 2017, the Schneiders filed a Notice of Appeal to the Fourth District

Court of Appeals.

MEMORANDUM

Schneider’s pro se Complaint attempts to assert four causes of action. The first

three causes of action are based on violations of federal statutes while the fourth is a

breach of contract claim based on the Credit Agreement (Home Equity Line of Credit –

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“HELOC”) that was collateralized, in part, by the Mortgage on the Property in Palm Beach

County being foreclosed in the State Foreclosure Litigation.

Respectfully, as a matter of law (simply reading the statutes), no cause of action

can be brought by Schneider against First American under either the Fair Debt Collection

Practices Act (“FDCPA”) (Count II) or under the Federal Trade Commission Act (“FTCA”)

(Count III). Those two causes of action were “dead on arrival” as will be more definitively

shown below.

Insofar as the HELOC breach of contract claim (Count IV) is concerned,

contemporaneous with the Palm Beach Circuit Court’s entry of a Final Judgment of

Foreclosure against Schneider on June 26, 2017 in the State Foreclosure Litigation, the

original HELOC Agreement was surrendered by First American to the Palm Beach Circuit

Court as required by Florida law. Entry of the Final Judgment in Foreclosure cancels the

Promissory Note (HELOC Agreement). Alternatively, Laurence Schneider’s failure to

have pled a breach of contract cause of action in either of his Counterclaims in the State

Foreclosure Litigation (it constituted a compulsory counterclaim) results in his Breach of

Contract (Count IV) cause of action being waived/barred as a matter of law. Further,

Schneider’s Breach of Contract claim is barred by the doctrine of res judicata.

Finally, Laurence Schneider’s allegations attempting to state a FRCA (Count I)

violation do not state a viable cause of action.

Each of these bases for dismissing this Complaint will be discussed at greater

length below.

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Motion to Dismiss Standard

Rule 8 of the Federal Rules of Civil Procedure requires that “[a] pleading that states

a claim for relief must contain … a short and plain statement of the claim showing that the

pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Rule 12(b)(6) permits a party to move

to dismiss the complaint for failure to state a claim upon which relief can be granted. Fed.

R. Civ. P. 12(b)(6).

To survive a motion to dismiss, plaintiff’s burden is to allege facts sufficient to

satisfy each element of its claim; “a formulaic recitation of the elements of a cause of

action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 555-556, 127 S. Ct. 1955, 1964-

65, 167 L. Ed. 2d 929 (2007). “Threadbare recitals of the elements of a cause of action,

supported by mere conclusory statements,” and “unadorned, the-defendant-unlawfully-

harmed-me accusation[s],” cannot withstand a motion to dismiss. Ashcroft v. Iqbal, 556

U.S. 662, 678, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009).

I. Fair Debt Collection Practices Act (“FDCPA”) (Count II)

A. First American is
Not a Debt Collector

The purpose of the FDCPA is “to eliminate abusive debt collection practices by

debt collectors.” 15 U.S.C. § 1692(e). In the definitions section of the FDCPA, the term

“debt collector” is defined as:

“The term ‘debt collector’ means any person who uses any
instrumentality of intrastate commerce … or who regularly
collects or attempts to collect, directly or indirectly, debts owed
to or due or asserted to be owed or due another.”

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15 U.S.C. § 1692a(6)(A). This sub-section of the FDCPA then goes on to make it clear

that the term “debt collector”:

“does not include - -

(A) Any officer or employee of the creditor while, in the

name of the creditor, collecting debts for such creditor;”

First American clearly and unequivocally falls within the FDCPA’s definition of the term

“creditor.” 15 U.S.C. § 1692a(4). Shortly stated, the FDCPA simply does not apply and

cannot be used by an unhappy consumer (like Schneider) against a creditor bank (like

First American) that loans money.

B. Statute of Limitations

The federal FDCPA can be found in its entirety at 15 U.S.C. § 1692 (which includes

§ 1692a through q). 15 U.S.C. § 1692k(d) sets out a jurisdictional one year Statute of

Limitations that reads:

(d) Jurisdiction. An action to enforce any liability created by

this title [15 U.S.C. §§ 1692, et seq.] may be brought in any
appropriate United States District Court without regard to the
amount in controversy, or in any other court of competent
jurisdiction, within one year from the date on which the
violation occurs.

The Eleventh Circuit and Florida District Courts have routinely considered and applied

the FDCPA’s one year Statute of Limitations to dismiss FDCPA claims. See, among

others, Hampton-Muhamed v. James B. Nutter & Co., 2017 U.S. App. LEXIS 8184 (11th

Cir. May 9, 2017), Alvarado v. Featured Mediation, LLC, 2017 U.S. Dist. LEXIS 65960

(M.D. Fla. May 1, 2017), Jacques v. Christian & Missionary Alliance, Inc., 2017 U.S. Dist.

LEXIS 51391 (S.D. Fla. April 3, 2017) and Abrahams v. Deutsche Bank Nat’l. Bank, 2017

U.S. Dist. LEXIS 6906 (S.D. Fla. Jan. 17, 2017).

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A review of the general allegations stated in the Complaint in Paragraphs 33 and

87 allege a series of events which Schneider categorizes as “FAB’s misrepresentations

and misappropriations” [D.E. 1]. All of the dates stated in these 55 numbered paragraphs

date back to between June 2015 and early June 2016. Accordingly, all are barred by the

FDCPA’s one year Statute of Limitations.

II. Federal Trade Commission Act (“FTCA”) (Count III)

Count III of Schneider’s Complaint is defective for two reasons. First, the FTCA

does not provide for a private right of action; second, the FTCA by its own terms makes

it clear that the FTCA does not apply to banks which are members of the Federal Reserve

System or insured by the Federal Deposit Insurance Company (“FDIC”). Count III of

Schneider’s Complaint runs fatally afoul of both of these aspects of the FTCA.

A. No Private Right of Action

Under the FTCA

The FTCA itself makes it clear that the Federal Trade Commission is empowered

and directed to prevent persons, partnerships or corporations from using unfair methods

of competition that affect commerce. 15 U.S.C. §45(a)(2). Only the Federal Trade

Commission (“FTC”) itself may bring enforcement lawsuits under the FTCA. The

Eleventh Circuit in Jeter v. Credit Bureau, 760 F. 2d 1168, 1174 (11th Cir. 1985) is one of

the many decisions that have long made it clear that there is no private right of action

under the FTCA, implied or otherwise. See also, Fulton v. Hecht, 580 F. 2d 1243, 1248

(5th Cir. 1978),3 TruthInAdvertisingEnforcers.com v. My Pillow, Inc., 2017 U.S. Dist. LEXIS

11439 (M.D. Fla. Jan. 27, 2017); Smith v. Auto Flex, LLC, 2015 U.S. Dist. LEXIS 167455

3
All Fifth Circuit cases decided before September 30, 1981 are deemed to be binding on all Courts
of the Eleventh Circuit. Bonner v. City of Pritchard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc).

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(N.D. Fla. Nov. 9, 2015) and Gomez v. Bank of Am. Corp., 2015 U.S. Dist. LEXIS 18775

(M.D. Fla. Feb. 17, 2015).

B. The Federal Trade Commission’s

Power Does Not Extend to Banks

Congress also specifically and unequivocally made it clear in 15 U.S.C. §45(a)(2)

that the Federal Trade Commission’s power to prevent unfair competition and deceptive

acts affecting commerce does not extend to banks, using specific language stating:

The Commission is hereby empowered and directed to

prevent persons, partnerships, or corporations except banks
… from using unfair methods of competition in or affecting
commerce.”

(Emphasis added). The FTCA at 15 U.S.C. §57(a)(f)(2) defines the term “bank” to include

banks that are insured by the FDIC. This Court can take judicial notice of the fact that

First American is insured by the FDIC as is reflected by the FDIC’s April 4, 2017

Certification (Exhibit “A” attached hereto).

Shortly stated, the FTC Act simply does not apply to banks and does not grant

private causes of action by individuals like Schneider. Count III of the Complaint should

be dismissed.

III. Breach of Contract (Count IV)

A. Schneider Waived his Breach

of Contract Claim Against First American
When that Claim was Not Filed
as a Compulsory Counterclaim
in the State Foreclosure Litigation

In Count IV of his Complaint, Schneider alleges that First American’s “conduct”

with respect to “servicing of the loan” “represented a breach of the HELOC” and a breach

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of the “covenant of good faith and fair dealing” [D.E. 1, ¶¶ 142, 145 & 146]. Simply stated,

Schneider is prohibited from maintaining an independent action challenging the servicing

of his HELOC because that claim is a compulsory counterclaim that was required to be

asserted in the State Foreclosure Litigation.

The failure of a plaintiff to bring a compulsory counterclaim in a state court

proceeding “results in a waiver of that claim.” Montgomery Ward Dev. Corp. v. Juster,

932 F.2d 1378, 1381 (11th Cir. 1991). “The purpose of the compulsory counterclaim rule

is to eliminate multiplicity of litigation. To this end, Florida courts have opined that the

rule should be given a ‘broad realistic interpretation.’” Id.

State law (in this case, Florida law) governs whether the failure to bring a

compulsory counterclaim in a state court action bars a subsequent federal diversity action

on that claim. Id. at 1380. Review and analysis of the Florida law that governs First

American’s Motion to Dismiss Count IV is fairly simple because of the existence of two

recent Florida Southern District cases, both of which involve multi-jurisdictional

foreclosure litigation/subsequent district court lawsuits and both of which have facts

remarkably similar to those being presented to this Court. Novick v. Wells Fargo Bank,

N.A., 2017 U.S. Dist. LEXIS 87303 (S.D. Fla. June 7, 2017) and Martinez v. Bank of Am.

Corp., 2014 U.S. Dist. LEXIS 81570 (S.D. Fla. June 16, 2014).

The District Court in Novick began its analysis by quoting from Florida Rule of Civil

Procedure 1.170(a):

[a] pleading shall state as a counterclaim any claim which at

the time of serving the pleading the pleader has against any
opposing party, provided it arises out of the transaction or
occurrence that is the subject matter of the opposing party's
claim and does not require for its adjudication the presence of
third parties over whom the court cannot acquire jurisdiction.

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Id. The Novick opinion continued:

Florida Courts have adopted a four-part ‘transaction or

occurrence’ test to ascertain whether a claim is compulsory:
(1) are the issues of fact and law raised by the claim and
counterclaim largely the same; (2) would res judicata bar the
subsequent suit; (3) will the same evidence support or refute
both the claim and the counterclaim; and (4) is there any
logical relation between the claim and the counterclaim.

2017 U.S. Dist. LEXIS 87303, *5. See also Montgomery Ward Dev. Corp, 932 F.2d at

1381 and Martinez, 2014 U.S. Dist. LEXIS 81570, *9. “An affirmative answer to any of

the foregoing questions would mean that the counterclaim is compulsory.” Montgomery

Ward Dev. Corp, 932 F.2d at 1381.

Part four (4) of the “transaction or occurrence test” is of special significance

because “every compulsory counterclaim necessarily passes the logical relationship test,

which evaluates whether ‘the same aggregate of operative facts serves as the basis of

both claims.’” Novick, 2017 U.S. Dist. LEXIS 87303 at 5. Florida courts broadly construe

the logical relationship test. Id.

As a matter of law, the relationship between Schneider’s Breach of Contract claim

(Count IV) and the State Foreclosure Litigation satisfies the logical relationship test

because Schneider’s claim arises out of the same “aggregate of operative facts” at issue

in the State Foreclosure Litigation. In the State Foreclosure Litigation, the Palm Beach

Circuit Court entered: (1) a Final Judgment of Foreclosure; (2) an Amended Final

Judgment on the Breach of Contract claim (wherein the State Court found that Schneider

breached the HELOC); (3) found $1,625,072.21 due and owing under the Note; and (4)

enforced the Mortgage by ordering a foreclosure sale of the Property. Here, Schneider

alleges that First American breached the HELOC by “erroneously service[ing]” the

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HELOC and “unilaterally changing the terms of the loan” and, further, breached the

“covenant of good faith and fair dealing.” [D.E. 1, ¶¶ 140, 147 & 153]. Like in Martinez,

supra, Schneider’s “allegations are intertwined with the validity of the Note [HELOC] and

Mortgage”, Id., which have already been adjudicated. In other words, each of Schneider’s

allegations seek to contest the validity of the Final Judgment of Foreclosure and the

Amended Final Judgment on the Breach of Contract claim. The prosecution of this action

would impermissibly undermine the Palm Beach Circuit Court’s Final Judgment of

Foreclosure and Amended Final Judgment, which have already found Schneider in

breach of his obligations under the HELOC and Mortgage. See Martinez, 2014 U.S. Dist.

LEXIS 81570 at 10-11.

Further, Schneider, like in Novick, supra, “despite ample opportunity [as detailed

above], failed to raise these claims in the [State] Foreclosure Action” and “Accordingly,

Plaintiff’s [Schneider’s] claims are barred by the compulsory counterclaim rule.” See

Novick, 2017 U.S. Dist. LEXIS 87303 at 7. Schneider’s Breach of Contract cause of

action (Count IV) should be dismissed with prejudice.

B. Laurence Schneider’s Claim

Against First American Based
on the HELOC is Barred by the
Doctrine of Res Judicata

Count IV (Breach of Contract) of Schneider’s Complaint is further barred by the

doctrine of res judicata, “which prohibits litigation of issues already decided or issues that

could have been decided by a final judgment in prior litigation.” Martinez, 2014 U.S. Dist.

LEXIS 81570 at 11. “When a federal court is asked to give res judicata effect to a prior

state court judgment, the federal court applies the res judicata principles of the state from

which the allegedly preclusive ruling emanates.” Nivia v. Nationstar Mortg., LLC, 2014

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U.S. Dist. LEXIS 116583, *8 (S.D. Fla. Aug. 21, 2014). The doctrine applies both to issues

actually litigated and to every other matter which the parties might have litigated and had

determined. Martinez, 2014 U.S. Dist. LEXIS 81570 at 11. Further “[i]n Florida, a

judgment is final for preclusion purposes even if it is on appeal.” Id. For res judicata to

apply, there must be:

(1) identity of the thing sued for;

(2) identity of the cause of action;

(3) identity of the persons and parties to the action; and

(4) identity of the quality of the persons for or against whom

the claims is made.

Id. at 11-12. See also Nivia, 2014 U.S. Dist. LEXIS 116583 at 8.

All the elements required to invoke res judicata are met in this instant action. First,

both lawsuits – the State Foreclosure Litigation and this action – involve the HELOC and

the same Property in Palm Beach County, Florida. Second, Schneider’s instant action –

breach of the HELOC – arises out of “the same nucleus of operative fact” and is based

on the “same factual predicate” as the State Foreclosure Litigation, which is sufficient to

satisfy the second element of res judicata. Third, the Plaintiff and the Defendant in the

instant action are the identical parties in the State Foreclosure Litigation, satisfying the

third element. Fourth, Schneider’s claim arises from the same circumstances as the State

Foreclosure Litigation with Schneider in an identical “borrower” capacity, and First

American in its capacity as “lender.” In other words, Schneider now seeks to litigate a

breach of contract claim that all parties to the instant action would have litigated in the

same capacity as those presented or that could have been presented in the State

Foreclosure Litigation. See Nivia, 2014 U.S. Dist. LEXIS 116583 at 9; and Martinez, 2014

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U.S. Dist. LEXIS 81570 at 12-13. Accordingly, Schneider’s Breach of Contract claim is

barred by the doctrine of res judicata and should be dismissed with prejudice.

C. HELOC (Promissory Note) has been Cancelled

Florida Rule of Civil Procedure 1.115(c) makes it clear that all entities such as First

American which bring foreclosure actions against defaulting borrowers must have

possession of the original Promissory Note and file allegations in the initial Complaint

setting out very specific information about exactly where the original Promissory Note is

located and how it is physically secured. Moreover, Fla. R. Civ. P. 1.115(c) unequivocally

requires:

“The original note … must be filed with the court before the
entry of any judgment of foreclosure or judgment on the note.”

In Johnston v. Hudlett, 32 So. 3d 700, 704 (Fla. 4th DCA 2010), the court explained the

concept of requiring banks holding the original promissory notes to surrender those notes

thusly:

[I]n the case of original mortgages and promissory notes, they

are not merely exhibits but instruments which must be
surrendered prior to the issuance of a judgment. The
judgment takes the place of the promissory note.
Surrendering the note is essential so that it cannot
thereafter be negotiated. … the judgment cancels the
note.

Id. (Emphasis added.) See also, Deutsche Bank Nat’l Trust Co. v. Clarke, 87 So. 3d 58,

62 (Fla. 4th DCA 2012). Moreover, and in this same regard, Perry v. Fairbanks Capital

Corp., 888 So. 2d 725, 726 (Fla. 5th DCA 2004) makes it clear that once the Promissory

Note is surrendered to the court in a foreclosure proceedings, it cannot and “does not

remain in the stream of commerce.” Id.

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First American has been aware of this aspect of Florida law since the inception of

the State Foreclosure Litigation filed in August 2016. First American routinely brought the

original Promissory Note and Mortgage to all significant hearings held in the State

Foreclosure Litigation. More importantly, the original Promissory Note and Mortgage

were produced by First American during the course of the June 26, 2017 Motion for

Summary Judgment hearing at which time they were surrendered to the Court. The Palm

Beach Circuit Court, in turn, prepared and signed a Notice of Filing Original Note and

Mortgage with the Clerk of the Court on June 26, 2017 (see Exhibit “B” hereto).

Shortly stated, by operation of Florida law, the HELOC Agreement signed by

Schneider on July 28, 2006 lost all efficacy when it was surrendered to the Palm Beach

Circuit Court on June 26, 2017 at which time the HELOC (Promissory Note) was canceled

and removed from the stream of commerce. Schneider simply cannot ground or assert

a cause of action against First American based on the terms of the surrendered/canceled

HELOC Agreement.

IV. Fair Credit Reporting Act (Count I)

A. Schneider’s §1681s-2(a) FCRA Claim

Fails as a Matter of Law Because the
FCRA Does Not Create a Private Right of Action

In Count I (Violation of the FCRA), Schneider alleges that First American, a

“furnisher of information,” violated FCRA duties set out in 15 U.S.C. §1681s-2(a)(1)(B)

and 15 U.S.C. §1681s-2(a)(3) [D.E. 1, ¶¶ 104 & 110].

Section 1681s-2(a)(1)(B) provides:

(a) Duty of furnishers of information to provide accurate

information.

(1) Prohibition.

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(B) Reporting information after notice and confirmation of

errors. A person shall not furnish information relating to a
consumer to any consumer reporting agency if

(i) the person has been notified by the consumer, at the

address specified by the person for such notices, that
specific information is inaccurate; and

(ii) the information is, in fact, inaccurate.

15 U.S.C. §1681s-2(a)(1)(B), while §1681s-2(a)(3) provides:

(a) Duty of furnishers of information to provide accurate

information.

(3) Duty to provide notice of dispute. If the completeness

or accuracy of any information furnished by any person to
any consumer reporting agency is disputed to such person
by a consumer, the person may not furnish the information
to any consumer reporting agency without notice that such
information is disputed by the consumer.

15 U.S.C. §1681s-2(a)(3).

After establishing these FCRA duties, Congress went on to expressly limit a

furnisher’s liability under §§1681s-2(a)(1)(B) and 2(a)(3) by prohibiting private

suits/private rights of action for violations of Subsection 1681s-2(a). The FCRA

unequivocally denies standing to individuals like Schneider to assert private rights of

action against furnishers like First American.

Specifically in this regard, Subsection 1681s-2(c)(1), entitled: “Limitation on

liability,” expressly provides that §§1681n and 1681o “do not apply to any violation of

subsection (a) of this section, including any regulations issued thereunder.” Subsection

1681s-2(d), entitled: “Limitation on enforcement,” then goes on to provide that

Subsections 2(a)(1)(B) and (a)(3) “shall be enforced exclusively as provided under

15 U.S.C. §1681s by the Federal agencies and officials and the State officials

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identified in 15 USUC §1681s” (emphasis added). 15 U.S.C. §1681s-2(d). See the

analyses of this “no private right of action” aspect of the FCRA set forth in Nawab v.

Unifund CCR Partners, 553 Fed. Appx. 856, 860 (11th Cir. 2013) (“… subsection (a) ‘shall

be enforced exclusively’ by federal and state authorities.”) and Green v. RBS Nat’l Bank,

288 Fed. Appx. 641, 642 (11th Cir. 2008) (“Enforcement of these provision [§1681s-2(a)]

is limited to federal agencies, federal officials and state officials.”). See also Longman v.

Wachovia Bank, N.A., 702 F.3d 148, 151 (2nd Cir. 2012) (holding that there is no private

of cause of action for violations of §1681s-2(a)), Sanders v. Mt. Am. Fed. Credit Union,

689 F.3d 1138, 1147 (10th Cir. 2012) (same), and Tomblin v. JPMorgan Chase Bank,

2014 U.S. Dist. LEXIS 125037 * 4 (N.D. Fla. July 9, 2014) (same).

Since First American has demonstrated that §1681s-2(a) does not provide a

private right of action to Schneider to redress his alleged FCRA violations, this Court

should dismiss all §§1681s-2(a)(1)(B) and 2(a)(3) claims asserted by Schneider in Count

I with prejudice.

B. Schneider’s has Failed

to State a Viable Claim Under §1681s-2(b)(1)

Schneider, in his Complaint, alleges that First American violated §1681s-2(b)(1)

because “it failed to report the results of its investigation(s) to the CRA” [D.E. 1, ¶ 106].

Section 1681s-2(b)(1) provides.

(b) Duties of furnishers of information upon notice of dispute.

(1) In general. After receiving notice pursuant to section

611(a)(2) [15 USCS § 1681I(a)(2)] of a dispute with
regard to the completeness or accuracy of any
information provided by a person to a consumer
reporting agency, the person shall

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(A) conduct an investigation with respect to the

disputed information;

15 U.S.C. §1681s-2(b)(1).

“Although a private citizen may bring an action under 15 U.S.C. §1681s-2(b), this

cause of action is not without limitation.” SimmsParris v. Countrywide Fin. Corp., 652 F.

3d 355, 358 (3rd Cir. 2010). “The duties that are placed on furnishers of information by

this subsection are implicated only ‘[a]fter receiving notice pursuant to section 1681i(a)(2)

of this title of a dispute with regard to the completeness or accuracy of any information

provided by a person to a consumer reporting agency.” Id. citing 15 U.S.C. §1681s-

2(b)(1). “Notice under §1681i(a)(2) must be given by a credit reporting agency, and

cannot come directly from the consumer.” SimmsParris, 652 F. 3d at 358. While a

consumer may dispute credit information directly to a furnisher, the consumer has no

private right of action if the furnisher does not reasonably investigate the consumer’s

claim after direct notification. Chiang v. Verizon New Eng., Inc., 595 F. 3d 26, 19-20 (1st

Cir. 2010). See also Nawab v. Unifund CCR Partners, 553 Fed. Appx. 856, 861(11th Cir.

2013)(“The provision provides a private right of action but only where the furnisher

received notice of the consumer’s dispute from a consumer reporting agency,”); Brown v.

Wal-Mart Stores, Inc., 507 Fed. Appx. 543, 547 (6th Cir. 2012)(“Directly contacting the

furnisher of the credit information does not actuate the furnisher’s obligation to investigate

a complaint”); and Green v. RBS Nat’l Bank, 288 Fed. Appx. 641, 642 (11th Cir.

2008)(“The FCRA does provide a private right of action for a violation of §1681s-2(b), but

only if the furnisher received notice of the consumer’s dispute from a consumer reporting

agency”)

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Nowhere in his Complaint does Schneider allege that a consumer reporting agency

provided First American proper notice of a dispute. Rather, Schneider alleges that First

American “was notified by the Plaintiff [Schneider] that specific information was

inaccurate” [D.E. 1, ¶ 102]. As Schneider has not alleged that First American received

notice of dispute from a consumer reporting agency, Schneider cannot state a cause of

action under §1681s-2(b).

C. Schneider is Not Entitled, and May Not

Seek, a Civil Penalty Under §1681s

Schneider misrepresents to this Court that “15 U.S.C. §1681s, authorizes the Court

to award monetary civil penalties of not more than $2,500 per violation” [D.E. 1, ¶109].

This is simply not true. Pursuant to Section 1681s(2)(A) (entitled: “Administrative

Enforcement”),

[I]n the event of a knowing violation, which constitutes a

pattern or practice of violations of this title [15 U.S.C. §§1681
et seq.], the Federal Trade Commission may commence a
civil action to recover a civil penalty in a district court of the
United States against any person that violates this title [15
U.S.C. . §§1681 et seq.]. In such action, such person shall be
liable for a civil penalty of not more than $2,500 per violation.

15 U.S.C. §1681s(2)(A). The plain language of the statute provides that the maximum

penalty the Federal Trade Commission can pursue for knowing violations of the FCRA is

$2,500 per violation. Section §1681s does not apply to actions brought by private citizens.

* * *

WHEREFORE, having fully responded to the allegations of Laurence Schneider’s

Complaint, FIRST AMERICAN BANK would respectfully request this Court to enter an

Order dismissing the entire Complaint with prejudice, together with such further and other

relief as is deemed necessary and appropriate by the Court under the circumstances.

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Respectfully submitted,

KELLER & BOLZ, LLP

Attorneys for Defendant
121 Majorca Avenue, #200
Coral Gables, FL 33134
Telephone: (305) 529-8500
Telefax: (305) 529-0228
Email: hbolz@kellerbolz.com

By: s/Henry H. Bolz, III

Henry H. Bolz, III
Florida Bar No. 260071

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CERTIFICATE OF SERVICE

WE HEREBY CERTIFY that a true and correct copy of the foregoing, First

American’s Motion to Dismiss Complaint, was delivered to the addressee below via

transmission of Notices of Electronic Filing generated by CM/ECF on this 7th day of

August, 2017:

BRENT TANTILLO, ESQ.

Tantillo Law PLLC
Counsel for Laurence Schneider
1629 K Street, NW, Suite 300
Washington DC 20006
Email: btantillo@tantillolaw.com

MANJIT SINGH GILL, ESQ.

Counsel for Laurence Schneider
6810 N. State Road 7, Suite 300
Coconut Creek, FL 33073
Email: manjit.gillesq@gmail.com

KELLER & BOLZ, LLP

By: s/Henry H. Bolz, III

Henry H. Bolz, III

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Exhibit "A"
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Exhibit "B"
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