Devonna L. Johnson v. Castro Law, LLC

Summary

The United States District Court for the Southern District of Ohio granted Castro Law, LLC’s motion to dismiss Devonna L. Johnson’s amended complaint under Federal Rule of Civil Procedure 12(b)(6). The court dismissed claims under the Credit Repair Organizations Act, fraud, negligent misrepresentation, legal malpractice, and breach of contract, relying primarily on the retainer agreement’s terms, including its no-reliance clause and estimated 36-month debt-resolution timeline. Johnson withdrew her breach-of-fiduciary-duty claim.

Holdings

1. Castro Law was not a credit repair organization for purposes of the Credit Repair Organizations Act because the written retainer agreement expressly excluded credit repair and credit reporting, warned of a likely adverse effect on creditworthiness, and superseded prior negotiations and discussions.
2. Johnson's fraud and negligent-misrepresentation claims failed Rule 9(b) because she did not provide the actual statements, identify the speaker beyond an unnamed agent, or specify when and where the statements were made.
3. The no-reliance clause independently foreclosed Johnson's fraud and negligent-misrepresentation claims because those claims require justifiable reliance on representations outside the written agreement.
4. Johnson failed to state a legal-malpractice claim because the retainer agreement did not impose the duties she alleged Castro breached, including duties to promptly contact creditors, resolve debts within one year, or improve her credit score.
5. Johnson failed to plead a breach of the written agreement because the agreement did not require Castro to resolve debts as soon as sufficient funds accumulated, provide services within one year, act promptly, or pay creditors with Johnson's funds without her approval.

Questions Presented

1. Whether Castro Law was a credit repair organization subject to the Credit Repair Organizations Act based on the alleged telephone representation that its services would improve Johnson's credit score.
2. Whether Johnson pleaded fraud and negligent misrepresentation with the particularity required by Federal Rule of Civil Procedure 9(b).
3. Whether Johnson plausibly alleged that Castro breached a professional duty supporting a legal-malpractice claim.
4. Whether Johnson plausibly alleged a breach of the written debt-settlement agreement.
5. Whether the agreement's no-reliance and integration provisions foreclosed reliance on alleged pre-contract representations.

Disposition

dismissed