McZeal v. Higher Education Loan Authority of The State of Missouri

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
MARCELLOUS S. MCZEAL,
Plaintiff,
VS.
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CIVIL ACTION NO. 4:25-CV-02343
HIGHER EDUCATION LOAN AUTHORITY
OF THE STATE OF MISSOURI,
Defendant.
MEMORANDUM OPINION AND ORDER
Now before the Court is Defendant Higher Education Loan Authority of the State of
Missouri’s (“Defendant” or “MOHELA”) Motion to Dismiss (D.E. 9), to which Plaintiff
Marcellous S. McZeal (“Plaintiff” or “McZeal”) has responded (D.E. 13), and MOHELA has
replied (D.E. 16). Upon consideration of the Parties’ filings and relevant law, the Court is of the
opinion that MOHELA’s Motion to Dismiss (D.E. 9) should be GRANTED IN PART and
DENIED IN PART.
I. BACKGROUND
The following facts are taken from Plaintiff’s Complaint (D.E. 1) and are accepted as true
for purposes of this motion. The Court notes that the Complaint is not paginated, and the
paragraphs are not numbered as required.
Plaintiff is an obligor on six Parent PLUS Loans issued by the United States Department
of Education (USDOE) (the “Loans”). (D.E. 1 at 1, 6). MOHELA services these loans pursuant to
a contract with the federal government. Id. at 2. In 2024, MOHELA notified Plaintiff that the Loans
were in a deferment status and that no payments were due. Id. at 2, 9. Months later and without
warning, the deferment expired, but MOHELA failed to provide Plaintiff with notice that the
United States District Court
Southern District of Texas
ENTERED
November 13, 2025
Nathan Ochsner, Clerk
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Loans were entering a repayment status and/or information regarding the repayment amount and
how that amount was calculated. Id. at 6. MOHELA sent bills to Plaintiff that did not accurately
reflect the amount owed. Id. at 2, 6. During this time, Plaintiff was unable to log into MOHELA’s
website to obtain account details or make payments, in part because MOHELA was transitioning
to a new service platform. Id. at 6, 9. Plaintiff attempted to raise these issues with MOHELA in
writing, as well as via telephone, and experienced a wait time average of more than five hours. Id.
at 6. When Plaintiff was able to reach MOHELA customer service representatives, they could not
answer his questions or assist him. Id. at 8. As a result of Plaintiff’s failure to make timely
payments once the Loans entered a repayment status, MOHELA furnished information to all three
credit reporting agencies that his Loans were delinquent, causing his credit score to drop from the
high 700s into the 500s. Id. at 2, 10. He sent three letters to MOHELA contesting the information
it had furnished to the credit agencies, but MOHELA refused to take corrective action. Id. at 10.
Plaintiff was initially approved for a business loan of $150,000 but was later rejected because of
the drop in his credit score. Id. at 10.
Plaintiff pursues alternative claims for violations of the Fair Debt Collection Practices Act
(FDCPA), 15 U.S.C. §§ 1692(e) and (f) (Count 1); violations of the Fair Credit Reporting Act
(FCRA), 15 U.S.C. §§ 1681s-(2)(a) and (b) (Counts 2(a) and 2(b)); and common law negligence
(Count 3). Id. at 11–16.
MOHELA moves to dismiss the entire Complaint for failure to comply with FED. R. CIV.
P. 8(a)(2) and 10(b). In the alternative, MOHELA moves to dismiss Plaintiff’s claims for violations
of the FDCPA, violations of Section 1681s-(2)(a) of the FCRA, and negligence under FED. R. CIV.
P. 12(b)(6) for failure to state a claim upon which relief can be granted.
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II. MOTION TO DISMISS UNDER RULES 8(a) AND 10(b)
A. Law
“Complaints that violate either Rule 8(a)(2) or Rule 10(b), or both, are often disparagingly
referred to as ‘shotgun pleadings.’” Weiland v. Palm Beach Cnty. Sheriff’s Office, 792 F.3d 1313,
1320 (11th Cir. 2015). Rule 8 states that a complaint “must contain,” among other things, “a short
and plain statement of the claim showing that the pleader is entitled to relief[.]” FED. R. CIV. P.
8(a)(2). Under Rule 10: “A party must state its claims . . . in numbered paragraphs, each limited
as far as practicable to a single set of circumstances. A later pleading may refer by number to a
paragraph in an earlier pleading. If doing so would promote clarity, each claim founded on a
separate transaction or occurrence . . . must be stated in a separate count[.]” FED. R. CIV. P. 10(b).
In Weiland, the Eleventh Circuit identified four types of “shotgun pleadings”—imprecise
complaints that fail “to give the defendants adequate notice of the claims against them and the
grounds upon which each claim rests.” Weiland, 792 F.3d at 1321–23. The first is a complaint
containing multiple counts where each count adopts the allegations of all preceding counts, causing
each successive count to carry all that came before and the last count to be a combination of the
entire complaint. Id. at 1321. This leads to a ‘situation where most of the counts . . . contain
irrelevant factual allegations and legal conclusions.” Id. at 1324; Snow v. Etowah Cnty. Sheriff’s
Dep’t, 2020 WL 6899168, at *3 (N.D. Ala. Nov. 24, 2020). The next most common type of shotgun
pleading occurs when a complaint is full of conclusory, vague, and immaterial facts not obviously
connected to any particular cause of action. Weiland, 792 F.3d at 1322. The third type of shotgun
pleading outlined in Weiland is a complaint that fails to separate into a different count each cause
of action or claim for relief. Id. at 1323. “This type of ‘shotgun pleading’ violates Rule 10(b).” Lee
v. Ohio Educ. Ass’n, 951 F.3d 386, 393 (6th Cir. 2020) (citing Weiland, 792 F.3d at 1323 n.13).
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Finally, the fourth type of shotgun pleading is a complaint that includes multiple claims against
multiple defendants without specifying which of the defendants are responsible for which acts or
omissions, or which defendant(s) the claim is brought against. Weiland, 792 F.3d at 1323.
“The unifying characteristic of all types of shotgun pleadings is that they fail to one degree
or another, and in one way or another, to give the defendants adequate notice of the claims against
them and the grounds upon which each claim rests.” Id. “Shotgun pleadings are ‘pernicious’
because they ‘unfairly burden defendants and courts’ by shifting onto them ‘the burden of
identifying plaintiff’s genuine claims and determining which of those claims might have legal
support.’” Greathouse v. Rosa, 2021 WL 2953127, at *1 (D.N.M. July 14, 2021) (quoting D.J.
Young Publ’g Co. v. Unified Gov’t of Wyandotte Cnty./Kansas City, 2012 WL 4211669 at *3 (D.
Kan. Sept. 18, 2012)). When a complaint fails to provide adequate notice, it is within the court’s
power to act sua sponte by ordering plaintiffs to submit a more definite statement pursuant to Rule
12(e). See Molina v. March, 2008 WL 11388763, at *2 (S.D. Tex. Nov. 20, 2008) (sua sponte
ordering plaintiff to file a more definite statement pursuant to Rule 12(e)).
B. Analysis
MOHELA argues that the Complaint does not comply with the Federal Rules of Civil
Procedure because it omits separate-numbered paragraphs and instead consists of approximately
ten pages of narrative material, including numerous legal conclusions, which are then incorporated
by reference into three alternative counts that also omit numbered paragraphs. As such, the
Complaint is a “shotgun pleading” subject to dismissal under FED. R. CIV. P. 8(a)(2) and 10(b).
Plaintiff responds that the Complaint includes background facts about MOHELA for the
Court’s context, followed by detailed factual allegations regarding the number of loans serviced,
Plaintiff’s attempts to communicate with MOHELA, problems with its online portal, and specific
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instances of misrepresentation to both himself and the three credit agencies. Plaintiff argues that
each cause of action is separately stated, and while each incorporates preceding paragraphs by
reference, those incorporation clauses are not the sole factual basis for each claim. According to
Plaintiff, MOHELA can clearly determine which facts and alleged acts or omissions correspond
to each of the three asserted causes of action.
The Court finds Judge Ellison’s opinion in Int'l Longshoremen’s Ass’n Warehouse Workers
Loc. 1504-8 v. S. Atl. & Gulf Coast Int’l Longshoremen’s Ass’n, AFL-CIO, 2007 WL 7082343
(S.D. Tex. Nov. 20, 2007), useful. In it, the court recognized that, “[a]lthough Plaintiffs’ amended
complaint would benefit from greater brevity,” it was mindful of the Fifth Circuit’s reminder in
Atwood v. Humble Oil & Refining Co., 243 F.2d 885, 888 (5th Cir. 1957), that brevity must
sometimes yield to the litigant’s right and duty to present claims in a style reflecting counsel’s
honest effort to advocate the claims and address their strengths and weaknesses. Int’l
Longshoreman’s, 2007 WL 7082343 at *1. Here, as in Int’l Longshoreman’s, the Complaint
“appears to be an honest effort to present [Plaintiff’s] claims persuasively, and it is short and plain
enough for Defendant to respond to the claims without prejudice or undue confusion.” See id.
While the Complaint “would also benefit from numbered paragraphs as required by Rule 10(b),”
nonconformity with that rule is excusable where, as here, Plaintiff’s causes of action are “clearly
and separately stated and identified.” See id. (citing Phillips v. Girdich, 408 F.3d 124, 128 (2d Cir.
2005); 5A Charles Alan Wright & Arthur R. Miller, FED. PRAC. & PROC. § 1322 (3d ed. 2004)).
Because the form of the Complaint does not impair MOHELA’s ability to understand or respond
to the claims, Plaintiff’s nonconformity with Rule 10(b) is excused.
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III. MOTION TO DIMISS UNDER RULE 12(b)(6)
A. Law
A party may move to dismiss under Federal Rule of Civil Procedure 12(b)(6) for “failure
to state a claim upon which relief can be granted.” FED. R. CIV. P. 12(b)(6). Rule 12(b)(6) is read
in conjunction with the pleading standard set forth in Rule 8(a), which requires “a short and plain
statement of the claim showing that the pleader is entitled to relief.” FED. R. CIV. P. 8(a)(2); see
Ashcroft v. Iqbal, 556 U.S. 662, 677–68 (2009). This standard does not require detailed factual
allegations. Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).
However, a party’s “obligation to provide the ‘grounds’ of his ‘entitle[ment]’ to relief requires
more than labels and conclusions, and a formulaic recitation of the elements of a cause of action
will not do.” Twombly, 550 U.S. at 555 (internal citations omitted). To survive a Rule 12(b)(6)
motion, the complaint and any other matters properly considered1 must contain “sufficient factual
matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at
678 (quoting Twombly, 550 U.S. at 570). A claim has facial plausibility when the pleaded factual
content allows the court, drawing upon its “judicial experience and common sense,” to reasonably
infer that the defendant is liable for the misconduct alleged. Id. at 678 (citing Twombly, 550 U.S.
at 556), 679. “But where the well-pleaded facts do not permit the court to infer more than the mere
possibility of misconduct, the complaint has alleged—but it has not ‘show[n]’—‘that the pleader
is entitled to relief.’” Id. at 679 (quoting FED. R. CIV. P. 8(a)(2)).
1. “Generally, a court ruling on a 12(b)(6) motion may rely on the complaint, its proper
attachments, ‘documents incorporated into the complaint by reference, and matters of which a court may
take judicial notice.’” Randall D. Wolcott, M.D., P.A. v. Sebelius, 635 F.3d 757, 763 (5th Cir. 2011) (quoting
Dorsey v. Portfolio Equities, Inc., 540 F.3d 333, 338 (5th Cir. 2008)); see also Lone Star Fund V (U.S.),
L.P. v. Barclays Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010) (court’s review on 12(b)(6) motion “is limited
to the complaint, any documents attached to the complaint, and any documents attached to the motion to
dismiss that are central to the claim and referenced by the complaint”).
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B. Analysis
1. Count 1: Fair Debt Collection Practices Act (“FDCPA”)
Plaintiff alleges that MOHELA is a “debt collector” pursuant to 15 U.S.C. § 1692(a)(6)
and that it violated the FDCPA, 15 U.S.C. § 1692(e), by: (1) failing to notify him when his loan
moved from deferment to repayment and not providing clear repayment terms (such as duration,
monthly amount, interest, and options); (2) misleading him regarding his loan status and payment
calculations; and (3) engaging in deceptive practices by misrepresenting and omitting material
information about his Loans, restricting access to account details, and failing to offer genuine
repayment assistance. (D.E. 1 at 11).
MOHELA moves to dismiss Plaintiff’s FDCPA claim because MOHELA is not a “debt
collector,” as it did not begin servicing the Loans after default. See Brumberger v. Sallie Mae
Servicing Corp., 84 Fed. App’x 458, 459 (5th Cir. 2004) (affirming dismissal because, “[b]y its
plain terms the FDCPA does not apply to Sallie Mae because [plaintiff] does not allege that he
was in default at the time Sallie Mae began servicing his loans”); Diaz v. First Marblehead Corp.,
643 Fed. App’x 916, 919 (11th Cir. 2016) (noting that “other circuits, as well as district courts,
have held that creditors and loan servicers are not ‘debt collectors’ for purposes of the FDCPA if
they acquired or began servicing a loan prior to the debtor defaulting”) (collecting cases); Cedeno
v. Navient Sols., Inc., 2017 WL 7794290, at *4 (S.D. Fla. Apr. 26, 2017) (student loan servicer
was not a “debt collector” where it began servicing plaintiff’s loan prior to default). MOHELA
further argues that is exempted from liability under the FDCPA because it was, at all pertinent
times, acting in its capacity as a bona fide fiduciary to the USDOE. See Murungi v. Texas
Guaranteed, 693 F. Supp. 2d 597, 608 (E.D. La.), aff’d, 402 F. App’x 849 (5th Cir. 2010) (“A debt
collector does not include, however, ‘any person collecting or attempting to collect any debt . . .
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to the extent such activity . . . is incidental to a bona fide fiduciary obligation. . . .’”) (quoting 15
U.S.C. § 1692a(6)(F)(i)).
Plaintiff concedes his FDCPA claim and voluntarily withdraws it. (D.E. 13 at 1, n.1).
Accordingly, his claim in Count 1 is dismissed.
2. Count 2: Fair Credit Reporting Act (“FCRA”)
a. Complaint
Plaintiff alleges that MOHELA is a “furnisher of information” under the FCRA and that it
violated the FCRA by engaging in “willful and negligent noncompliance” of 15 U.S.C. §§ 168ls-
2(a), (b) by: (1) failing to properly investigate the accuracy of his Loan account before reporting
it as delinquent to credit reporting agencies; (2) intentionally failing to correct this information
with the credit agencies; and (3) continuing to provide false and damaging credit data to credit
agencies, despite knowing the information was incorrect. (D.E. 1 at 12–13). As a result, MOHELA
caused Plaintiff significant harm, including emotional distress, economic losses, and a lowered
credit score that prevented refinancing and maintaining existing credit. Id. at 13.
b. Law
The FCRA was enacted “to ensure fair and accurate credit reporting, promote efficiency in
the banking system, and protect consumer privacy.” Safeco Ins. Co. of America v. Burr, 551 U.S.
47, 52 (2007) (citing 15 U.S.C. § 1681; TRW Inc. v. Andrews, 534 U.S. 19, 23 (2001)). The FCRA
requires “credit reporting agencies to maintain ‘reasonable procedures’ designed ‘to assure
maximum possible accuracy of the information’ contained in credit reports, § 1681e(b), and to
‘limit the furnishing of [such reports] to’ certain statutorily enumerated purposes, § 1681e(a).”
TRW Inc., 534 U.S. at 23 (alteration in original). The FCRA also imposes “two general duties on
those who give credit information to credit reporting agencies: (1) ‘a [d]uty of furnishers of
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information to provide accurate information,’ 15 U.S.C. § 1681s-2(a); and (2) ‘[d]uties of
furnishers of information upon notice of dispute,’ including to investigate disputes, correct
inaccurate information, and inform the credit reporting agency of an investigation’s results, 15
U.S.C. § 1681s-2(b).” Eustice v. JPMorgan Chase & Co., 2019 WL 3067507, at *2 (S.D. Tex.
July 12, 2019).
c. Analysis
i. Count 2(a): 15 U.S.C. § 1681s-(2)(a)
MOHELA moves to dismiss Plaintiff’s FCRA claim under 15 U.S.C. § 1681s-(2)(a)
because section 1681s-(2)(a) does not provide a private cause of action to consumers like Plaintiff.
See Black v. De La Torre, 2021 WL 2019202, at *5 (S.D. Tex. May 20, 2021) (“There is no private
right of action under the FCRA against a furnisher of credit for breaching the duty to provide a
credit reporting agency with accurate information in violation of 15 U.S.C. § 1681s-2(a).”) (citing
Egwurube v. Discover Fin. Servs., 2021 WL 260769, at *3 (S.D. Tex. Jan. 4, 2021); Burress v.
Chase Card, 2020 WL 1216703, at *2 (N.D. Tex. Feb. 18, 2020)).
Plaintiff concedes his FCRA claim under 15 U.S.C. § 1681s-2(a) and voluntarily withdraws
it. (D.E. 13 at 1, n.1). Accordingly, his claim in Count 2(a) is dismissed.
ii. Count 2(b): 15 U.S.C. § 1681s-(2)(b)
Although a private right of action exists under section 168ls-2(b), a plaintiff seeking to
state a claim against a furnisher of information under this provision must allege that: “‘(1) he
disputed the accuracy or completeness of information with a consumer reporting agency; (2) the
agency notified the furnisher of the consumer’s dispute; (3) and the furnisher failed to conduct an
investigation, correct any inaccuracies, or notify the agency of the results of the investigation.’”
Egwurube, 2021 WL 260769, at *3 (quoting Shaunfield v. Experian Info. Sols., Inc., 991 F. Supp.
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2d 786, 805 (N.D. Tex. 2014)); see also Eustice, 2019 WL 3067507 at *3 (furnisher would only
have a duty under section 1681s-2(b) if the consumer first disputed credit information with a credit
reporting agency and that credit reporting agency then informed the furnisher of the dispute).
Here, Plaintiff alleges that he notified the credit reporting agencies Equifax, Experian, and
TransUnion that their reports concerning his MOHELA debt were inaccurate and provided copies
of relevant documents to them, and the agencies notified MOHELA that Plaintiff was disputing
the information MOHELA furnished to them. (D.E. 1 at 12). Plaintiff also “sent two letters first-
class mail and a certified letter to MOHELA, contesting the information it had sent to all 3 credit
bureaus” and provided relevant documents to MOHELA regarding the dispute, but MOHELA
refused to take the corrective measures required by the FCRA. Id. at 10, 12.
The Court finds that Plaintiff has stated a claim under 15 U.S.C. § 168ls-2(b) for violation
of the FCRA.
3. Count 3: Common Law Negligence
a. Complaint
Plaintiff alleges that MOHELA owed him a duty of reasonable care in managing his
Loans—including timely communicating with him regarding the status of his IDR application,2
providing him the ability to monitor the status of the application, and providing an opportunity to
cure any deficiencies—which arose from the fiduciary relationship created when Plaintiff
entrusted MOHELA with servicing his Loans. (D.E. 1 at 13). MOHELA breached its duty of care
by: (i) failing to timely and effectively communicate with Plaintiff about the Loans, including the
status of the Loans and calculation of repayment amount; (ii) blocking Plaintiff from telephonic
2. “Income-driven repayment (IDR) plans are repayment plans that base the borrower’s monthly payment
amount on the borrower’s income and family size.” 34 C.F.R. § 685.209.
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and online communication about the details of his Loans; (iii) failing to maintain accurate
information online reflecting the historical and present condition of the Loans; and (iv) failing to
accurately calculate and report to credit bureaus the amount owed by Plaintiff. Id. at 14. Plaintiff
claims that MOHELA knew or should have known that its deficient processes—such as untimely
communication, inaccurate status reporting, and failure to act within industry standards—would
harm him. Id. But for MOHELA’s breaches of its duties of care, Plaintiff would not have suffered
harm, including damage to his credit score and the loss of an approved $150,000 loan. Id.
b. Law
To state a claim for common law negligence in Texas, “a plaintiff must establish three
elements: ‘(1) a legal duty owed by one person to another; (2) a breach of that duty; and (3)
damages proximately resulting from the breach.’” Ford v. Cimarron Ins. Co., 230 F.3d 828, 830
(5th Cir. 2000) (quoting Greater Houston Transp. Co. v. Phillips, 801 S.W.2d 523, 525 (Tex.
1990)). “Duty is the threshold inquiry of any negligence case.” Id. (citing Phillips, 801 S.W.2d at
525). “In Texas, moreover, whether a duty exists is a question of law for the court to decide from
the facts surrounding the occurrence in question.” Id.
c. Analysis
i. Duty
MOHELA argues that Plaintiff fails to state a claim for negligence because a student loan
servicer does not owe a common law duty of care to a borrower. See, e.g., Milton v. U.S. Bank Nat.
Ass’n, 508 F. App’x 326, 329–30 (5th Cir. 2013) (unpublished) (dismissing negligence claims
against mortgage servicer “because, under Texas law, there is ‘no special relationship between a
mortgagor and mortgagee’ that would give rise to a stand-alone duty of good faith and fair
dealing”) (quoting UMLIC VP LLC v. T & M Sales & Envtl. Sys., Inc., 176 S.W.3d 595, 612 (Tex.
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App.–Corpus Christi, 2005, pet. denied)); Lerma v. CitiMortgage, Inc., 2014 WL 12599346, at *1
(S.D. Tex. Apr. 17, 2014) (“[U]nder Texas law, a mortgage servicer does not owe a duty that
would support either Plaintiffs’ negligence claim . . . or breach of fiduciary duty claim.”). As a
result, federal courts have repeatedly dismissed negligence claims by borrowers against student
loan servicers. See, e.g., Love v. Pa. Higher Educ. Assistance Agency, 2020 WL 1545798, at *6
(N.D. Ga. Mar. 16, 2020) (“Plaintiffs have not pointed to any specific authority that would support
their argument that [student loan servicer] PHEAA owed them a legal duty, much less a fiduciary
duty. Without such authority, their negligence claim fails.”); Winebarger v. Pa. Higher Educ.
Assistance Agency, 411 F. Supp. 3d 1070, 1092 (C.D. Cal. 2019) (stating that “loan servicers do
not owe general duties of care to borrowers” and dismissing negligence claim against student loan
servicer); Hyland v. Navient Corp., 2019 WL 2918238, at *11 (S.D.N.Y. July 8, 2019) (dismissing
negligence claim against student loan servicer, explaining that servicers do not owe tort duties to
borrowers and that allegations that servicer held a “special position of confidence and trust” or
“actively held itself out as a source of guidance and expertise with respect to student loan
repayment” were insufficient). Plaintiff does not cite any case holding that a student loan servicer
owes a duty to a borrower sufficient to give rise to a negligence claim.
ii. Preemption
Plaintiff argues that his negligence claim is nonetheless viable because the FCRA imposes
duties on loan servicers with respect to any dispute it receives regarding credit reporting. See 15
U.S.C. § 1681s-2(b). MOHELA responds that any such claim is preempted by the FCRA.
“Section 1681h(e) of the FCRA preempts defamation and negligence claims arising under
state law unless the plaintiff can prove malice or willful intent to injure.” Licata v. Wells Fargo
Dealer Servs., Inc., 2013 WL 12155020, at *2 (S.D. Tex. Oct. 31, 2013) (citing 15 U.S.C. §
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1681h(e) (“[N]o consumer may bring any action or proceeding in the nature of . . . negligence with
respect to the reporting of information against . . . any person who furnishes information to a
consumer reporting agency . . . except as to false information furnished with malice or willful
intent to injure such consumer.”); Young v. Equifax Credit Info. Servs., Inc., 294 F.3d 631, 638
(5th Cir. 2002)). See also Perry v. Lockhart, Morris & Montgomery, Inc., 2024 WL 1840484, at
*6–7 (S.D. Tex. Apr. 26, 2024), report and recommendation adopted, 2024 WL 2193404 (S.D.
Tex. May 15, 2024) (noting the FCRA’s preemption of state law claims, including negligence,
arising out of the same alleged conduct in the absence of allegations of malice or willful intent);
Wilborn v. Equifax, Inc., 2019 WL 507495, at *1–2 (S.D. Miss. Feb. 8, 2019) (dismissing
negligence claim as preempted by the FCRA and noting that “[b]y its very nature, negligence does
not imply conduct undertaken with malice or willful intent to injure, and [the] Complaint alleges
no such conduct by Defendants”). “Pleading ‘malice’ for purposes of FCRA preemption requires
the plaintiff to plead that the defendant made the statements ‘knowing the statements were false or
with a reckless disregard of whether they were false.’” Licata, 2013 WL 12155020 at *2 (quoting
Morris v. Equifax Info. Servs., LLC, 457 F.3d 460, 471 (5th Cir. 2006)). “Reckless disregard
requires ‘sufficient evidence to permit the conclusion that the defendant in fact entertained serious
doubts as to the truth of his publication.’” Id. (emphasis in Morris). Here, Plaintiff has failed to
allege that MOHELA reported false information to credit agencies with “malice or willful intent
to injure” him.
iii. Negligent Misrepresentation
Finally, Plaintiff argues that “there is ample precedent under Texas law that a lender or
loan servicer can be liable for negligent misrepresentations to a borrower.” (D.E. 13 at 11) (citing
Federal Land Bank Ass’n v. Sloane, 825 S.W.2d 439, 442 (Tex. 1991) (bank possessed duty of
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reasonable care when providing information to customers regarding loans or potential loans, and
breach of this duty constituted negligent misrepresentation); TIB-The Independent BankersBank
v. Canyon Community Bank, 13 F. Supp. 3d 661, 671 (N.D. Tex. 2014) (noting that plaintiff’s
“negligent misrepresentation claim is based on the allegation that [lender] supplied false
information about the borrower’s deposit and financial condition in connection with the Loan”).
However, Plaintiff has not alleged a claim for negligent misrepresentation, which is a separate and
distinct cause of action under Texas law. See H.C. Oil & Gas Corp. v. Merrill Lynch, Pierce,
Fenner & Smith, Inc., 2005 WL 265166, at *11 (N.D. Tex. Feb. 2, 2005) (“Negligence and
negligent misrepresentation are different causes of action under Texas law, with different
elements.”).3 He cannot amend his Complaint through briefing; new claims must be pleaded by
amendment. See Middleton v. Life Ins. Co. of N. Am., 2010 WL 582552, at *5 (S.D. Tex. Feb. 12,
2010) (citing Fisher v. Metro. Life Ins. Co., 895 F.2d 1073, 1078 (5th Cir. 1990)).
The Court finds that Plaintiff has failed to state a claim for negligence under Texas common
law. Accordingly, his claim in Count 3 is dismissed.
3. To state a claim for negligent misrepresentation, the plaintiff must allege that:
(1) the defendant made a representation in the course of his business, or in a transaction in which he
had a pecuniary interest, (2) the defendant supplied false information for the guidance of others in
their business, (3) the defendant did not exercise reasonable care or competence in obtaining or
communicating the information, and (4) the plaintiff suffered pecuniary loss by justifiably relying
on the representation.
Great Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 318 (5th Cir. 2002). “By contrast, ‘the
elements of a negligence cause of action are the existence of a legal duty, a breach of that duty, and damages
proximately caused by the breach.’” H.C. Oil & Gas, 2005 WL 265166 at *11 (quoting IHS Cedars Treatment Ctr. of
Desoto, Tex., Inc. v. Mason, 143 S.W.3d 794, 798 (Tex. 2004)).
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V. CONCLUSION
For the reasons stated above, the Court GRANTS IN PART and DENIES IN PART
MOHELA’S Motion to Dismiss (D.E. 9) as follows:
1) The Court DENIES MOHELA’s motion to dismiss the Complaint pursuant to
FED. R. CIV. P. 8(a)(2) and 10(b), and
2) The Court GRANTS MOHELA’S motion to dismiss Plaintiff’s claims for
violations of the FDCA, 15 U.S.C. §§ 1692(e) and (f) (Count 1); violation of
the FCRA, 15 U.S.C. § 1681s-(2)(a) (Count 2a); and common law negligence
(Count 3).
SO ORDERED November 13, 2025, at McAllen, Texas.
______________________________
Randy Crane
Chief United States District Judge
Case 4:25-cv-02343 Document 23 Filed on 11/13/25 in TXSD Page 15 of 15