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Douglas v. American Financial Resources, Inc.

United States District Court, D. Idaho

May 23, 2017

ALAN DOUGLAS, an Individual, Plaintiff,
v.
AMERICAN FINANCIAL RESOURCES, INC., dba eLEND or dba E Lend, a New Jersey Corporation registered to do business in the State of Idaho, Defendant.

          ORDER

          Hon. Edward J. Lodge United States District Court Judge

         INTRODUCTION

         On March 20, 2017, United States Magistrate Judge Candy W. Dale issued a Report and Recommendation (AReport@), recommending that Defendant's Motion to Dismiss be granted. (Dkt. 24.)[1] Any party may challenge a magistrate judge's proposed recommendation by filing written objections to the Report within fourteen days after being served with a copy of the same. See 28 U.S.C. § 636(b)(1); Local Civil Rule 72.1(b). The district court must then “make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made.” Id. The district court may accept, reject, or modify in whole or in part, the findings and recommendations made by the magistrate judge. Id.; see also Fed. R. Civ. P. 72(b). The Plaintiff filed objections to the Report to which the Defendant has responded. (Dkt. 27, 31.) The matter is now ripe for the Court's consideration. See Local Civil Rule 72.1(b)(2); 28 U.S.C. § 636(b)(1)(B).

         STANDARD OF REVIEW

         Pursuant to 28 U.S.C. § 636(b)(1)(C), this Court “may accept, reject, or modify, in whole or in part, the findings and recommendations made by the magistrate judge.” Where the parties object to a report and recommendation, this Court “shall make a de novo determination of those portions of the report which objection is made.” Id. Where, however, no objections are filed the district court need not conduct a de novo review. In United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003), the court interpreted the requirements of 28 U.S.C. § 636(b)(1)(C):

The statute [28 U.S.C. § 636(b)(1)(C)] makes it clear that the district judge must review the magistrate judge's findings and recommendations de novo if objection is made, but not otherwise. As the Peretz Court instructed, Ato the extent de novo review is required to satisfy Article III concerns, it need not be exercised unless requested by the parties.@ Peretz, 501 U.S. at 939 (internal citation omitted). Neither the Constitution nor the statute requires a district judge to review, de novo, findings and recommendations that the parties themselves accept as correct. See Ciapponi, 77 F.3d at 1251 (AAbsent an objection or request for review by the defendant, the district court was not required to engage in any more formal review of the plea proceeding.@); see also Peretz, 501 U.S. at 937-39 (clarifying that de novo review not required for Article III purposes unless requested by the parties) . . . .

See also Wang v. Masaitis, 416 F.3d 993, 1000 & n.13 (9th Cir. 2005). Furthermore, to the extent that no objections are made, arguments to the contrary are waived. See Fed. R. Civ. P. 72; 28 U.S.C. § 636(b)(1) (objections are waived if they are not filed within fourteen days of service of the Report and Recommendation). “When no timely objection is filed, the Court need only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.” Advisory Committee Notes to Fed.R.Civ.P. 72 (citing Campbell v. United States Dist. Court, 501 F.2d 196, 206 (9th Cir. 1974)).

         The Court has reviewed the entire Report as well as the record in this matter for clear error on the face of the record and none has been found. The Court has also conducted a de novo review of those portions of the Report to which the Plaintiff's Motion for Reconsideration could arguably apply and finds as follows.

         DISCUSSION

         The full procedural background and facts of this case are well articulated in the Report and the Court incorporates the same in this Order. (Dkt. 24.) The Plaintiff, Alan Douglas, filed this action against Defendant American Financial Resources, Inc. (AmFi) alleging claims for violations of 1) the Truth in Lending Act and 2) the Idaho Consumer Protection Act (ICPA). (Dkt. 14.) The claims arise from statements allegedly made by Defendant's representative, Ronald Garrett, to Plaintiff concerning his entering into a Federal Housing Administration (FHA) insured streamline refinance loan and the impact of that loan on Plaintiff's ability to close a subsequent cash-out refinance loan within the next six months. Defendant filed a Motion to Dismiss both claims under Federal Rule of Civil Procedure 12(b)(6). (Dkt. 18.) Plaintiff conceded dismissal of the Truth in Lending Act claim but maintained his ICPA claim was proper. (Dkt. 21.)

         The Report recommends granting the Motion to Dismiss concluding 1) it is unlikely the ICPA applies to the facts in this case; 2) the factual allegations do not establish that Mr. Garrett made a misrepresentation or stated an untruth; 3) Defendant cannot be held liable for a statement concerning Plaintiff's ability to qualify for a loan from another lending institution; and 4) Mr. Garrett's statements were true and consistent with the FHA Policy Handbook's guidelines for FHA cash-out refinance loans. (Dkt. 24.)[2] Plaintiff's objections to the Report's conclusions upon which it grants dismissal of the ICPA claim and argues the Report improperly applies the standard applicable to motions to dismiss. (Dkt. 27.) In response to the objections, the Defendant contends the Report applied the correct standard of law to the facts in this case and properly concluded that dismissal is appropriate in this case. (Dkt. 31.)

         1. Whether the ICPA Applies to the Facts Alleged in the Complaint

         Plaintiff objects to the Report's conclusion that the ICPA does not apply to the facts in this case because the loan is not a “good.” (Dkt. 27 at 4.) The allegations and statute should, Plaintiff asserts, be construed liberally as either a “good” or “services” under the ICPA. Defendant disagrees with Plaintiff's interpretation of Idaho case law and argues the Report is correct. (Dkt. 31 at 4-5.)

         Having reviewed the parties briefing on the objections and motion, the relevant case law, as well as the entire record herein, the Court finds the Report's conclusion is correct. The ICPA does not apply to the facts as alleged by the Plaintiff. While the ICPA is to be construed liberally to affect the legislative intent and it defines “goods” and “services” broadly, the Complaint in this case does not allege that Mr. Garrett misrepresented the goods or services that AmFi could provide to Plaintiff or the terms of the FHA insured streamline refinance loan. See Pierce v. McMullen, 328 P.3d 445, 454 (Idaho 2014); Idaho First Nat'l Bank v. Wells, 596 P.2d 429, 432 (Idaho 1979) (construing the definition of “goods” under the ICPA to include intangible property). Instead, the alleged misrepresentations have to do with how Plaintiff's closing on the streamline loan would impact his eligibility for a cash-out refinance loan with a different lending institution; not with any good or service provided to him by AmFi. As such, there was no misrepresentation by AmFi of any good or service it would provide to Plaintiff that violated the ICPA. Idaho First Nat'l Bank, 596 P.2d at 432 (holding the signing of a personal guarantee for a loan to a corporation was not a purchase of goods within the ICPA). Taking the Plaintiff's allegations as true, the Court finds they do not state a plausible claim under the ICPA. Further, the ...


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