WALTON v. FIRST MERCHANTS BANK
1:18-cv-01784
| S.D. Ind. | Feb 20, 2019Background
- Plaintiff Deborah Walton (pro se) sued First Merchants Bank (FMB) and two individuals, alleging improper disclosures of her sensitive personal information during prior litigation (the 2017 case) and race discrimination.
- Walton amended her complaint to assert three claims against FMB: negligence, violation of the Equal Credit Opportunity Act (ECOA), and negligence per se based on the ECOA.
- Walton alleged disclosures occurred via discovery, deposition exhibits to the court reporter, counsel-to-counsel sharing, and an unredacted filing on the court docket; she also alleged disparate treatment compared to white customers and undisclosed loan-account changes.
- Defendants moved to dismiss under Fed. R. Civ. P. 12(b)(6). The court reviewed the amended complaint, briefing, and exhibits and dismissed all claims with prejudice for failure to state a claim.
- The court found (1) disclosures to counsel, to a pro se plaintiff, to a court reporter, and routine discovery productions did not breach any duty or plausibly cause compensable harm, (2) ECOA claims were conclusory and lacked facts showing discriminatory treatment or applicant status, and (3) negligence per se failed because the predicate ECOA claim failed.
- The court ordered Walton to show cause why Rule 11 sanctions should not be imposed, noting her extensive prior litigation history and evidence suggesting the suit was filed to harass a witness.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Negligence for disclosure of personal information | Walton: Defendants negligently exposed SSN, DOB, phone, and account numbers via filings, depositions, and counsel communications | Defendants: Disclosures were authorized or routine (to counsel, to pro se plaintiff, to court reporter); no unauthorized or harmful misuse | Dismissed — no breach of duty plausibly alleged and no compensable injury shown; dismissed with prejudice |
| ECOA (race discrimination) | Walton: FMB changed/failed to apply funds and altered loan account, treating her worse than white customers | Defendants: Plaintiff fails to plead she was an "applicant" or that adverse treatment was because of race; allegations are conclusory | Dismissed — allegations are conclusory, lack facts showing race-based disparate treatment or applicant status; dismissed with prejudice |
| Negligence per se (based on ECOA) | Walton: ECOA violation establishes negligence per se | Defendants: Predicate statutory violation not plausibly pleaded | Dismissed — fails because ECOA claim fails; dismissed with prejudice |
| Sanctions (Rule 11) | Walton did not directly argue against sanctions in the opinion; court ordered show-cause | Defendants: Implicitly that claims are frivolous/abusive given prior warnings and filings | Court ordered Walton to show cause by a deadline why Rule 11 sanctions should not be imposed, citing prior warnings and evidence of harassment |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (legal standard for pleading plausibility)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility and prohibition on conclusory labels)
- Spierer v. Rossman, 798 F.3d 502 (negligence per se concept)
- Estate of Davis v. Wells Fargo Bank, 633 F.3d 529 (ECOA elements and discrimination standard)
- Moran Foods, Inc. v. Mid–Atl. Market Dev. Co., 476 F.3d 436 (ECOA standing/coverage principles)
- Pisciotta v. Old Nat'l Bancorp, 499 F.3d 629 (pleading requirements to raise right to relief)
- Maddox v. Love, 655 F.3d 709 (liberal construction of pro se complaints)
- Smith v. Walsh Constr. Co. II, LLC, 95 N.E.3d 78 (elements of negligence under Indiana law)
- Erickson v. Pardus, 551 U.S. 89 (treatment of pro se filings)
- Johnson v. State Farm Mut. Auto. Ins. Co., 641 F. Supp. 2d 748 (sanctions guidance for pro se litigants)