Phillips v. Trans Union, Llc et al

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM with Brief In Support

N.D. Ga.May 8, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION AVRIL MELISSA PHILLIPS, ) ) Plaintiff, ) CIVIL ACTION FILE ) NO. 1:17-cv-00641-SCJ-AJB v. ) ) TRANSUNION, LLC, and BANK OF ) AMERICA, N.A., ) ) Defendants. ) ) DEFENDANT’S MOTION TO DISMISS PLAINITFF’S COMPLAINT COMES NOW, Defendant Bank of America, N.A. (“BANA” or “Defendant”), by and through counsel, and respectfully moves (the “Motion”) this Court to dismiss Plaintiff’s Complaint (the “Compl.” or “Complaint”) pursuant to Fed. R. Civ. P. 12(b)(6). In support of this Motion, Defendant has filed its Memorandum of Law in Support contemporaneously herewith. WHEREFORE, Defendant respectfully requests that the Court (i) grant this Motion; (ii) grant the relief requested herein and in the accompanying Memorandum of Law; (iii) dismiss this action, with prejudice, as to the Defendant; and (iv) grant such other and further relief as the Court deems just and appropriate. Case 1:17-cv-00641-SCJ-AJB Document 10 Filed 05/08/17 Page 1 of 4 2 Respectfully submitted this 8th day of May, 2017. /s/ Paul A. Rogers Paul A. Rogers GA Bar No. 612278 McGuireWoods LLP 1230 Peachtree Street, NE Promenade II, Suite 2100 Atlanta, Georgia 30309-3534 (404) 443-5636 (Telephone) (404) 443-5772 (Facsimile) progers@mcguirewoods.com Attorneys for Defendant Bank of America, N.A. Case 1:17-cv-00641-SCJ-AJB Document 10 Filed 05/08/17 Page 2 of 4 - 1 - IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION AVRIL MELISSA PHILLIPS, ) ) Plaintiff, ) CIVIL ACTION FILE ) NO. 1:17-cv-00641-SCJ-AJB v. ) ) TRANSUNION, LLC, and BANK OF ) AMERICA, N.A., ) ) Defendants. ) ) CERTIFICATE OF SERVICE, FONT AND MARGINS I hereby certify that on May 8, 2017, I electronically filed the foregoing Motion to Dismiss Plaintiff’s Complaint with the Clerk with the Clerk of the Court using the CM/ECF System and served a true and correct copy of same on counsel for Plaintiff via First-Class Mail, postage prepaid, addressed to: Matthew T. Berry Paul J. Sieg Berry & Associates 2751 Buford Highway, Suite 600 Atlanta, Georgia 30324 Attorneys for Plaintiff Case 1:17-cv-00641-SCJ-AJB Document 10 Filed 05/08/17 Page 3 of 4 - 2 - I further certify that I prepared this document in 14 point Times New Roman font and complied with the margin and type requirements of this Court pursuant to L.R. 5.1. /s/ Paul A. Rogers Paul A. Rogers Case 1:17-cv-00641-SCJ-AJB Document 10 Filed 05/08/17 Page 4 of 4 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION AVRIL MELISSA PHILLIPS, ) ) Plaintiff, ) CIVIL ACTION FILE ) NO. 1:17-cv-00641-SCJ-AJB v. ) ) TRANSUNION, LLC, and BANK OF ) AMERICA, N.A., ) ) Defendants. ) ) MEMORANDUM OF LAW IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT COMES NOW, Defendant Bank of America, N.A. (“BANA” or “Defendant”), by and through its counsel, and respectfully files this Memorandum of Law in support of its Motion to Dismiss Plaintiff Avril Melissa Phillips’ (“Plaintiff”) Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). In support thereof, Defendant provides the following memorandum of points and authorities. I. INTRODUCTION The Complaint filed by Plaintiff is one of several similar complaints filed in this district this year against BANA by the same law firm. Plaintiff’s Complaint, like the many others, alleges a theory of liability under the Fair Credit Reporting Case 1:17-cv-00641-SCJ-AJB Document 10-1 Filed 05/08/17 Page 1 of 21 2 Act, 15 U.S.C. § 1681 et seq., (“FCRA”) that BANA’s reporting of adverse information about Plaintiff’s secured mortgage loan during a pending Chapter 13 Bankruptcy case is inaccurate. Essentially, Plaintiff is attempting to allege a violation under the FCRA by contending that BANA’s reporting of Plaintiff’s secured mortgage loan on her credit report did not reflect the terms of Plaintiff’s confirmed Chapter 13 Bankruptcy Plan, and this resulted in inaccurate or misleading information. However, this legal theory has been universally rejected by District Courts in other circuits.1 The crux of the Complaint stems from allegations that Plaintiff filed a Chapter 13 Bankruptcy Case, and the plan was confirmed. However, the Chapter 13 Bankruptcy Case is still pending and Plaintiff has not received a discharge. Plaintiff contends that she listed BANA as a secured creditor on Schedule D in her Chapter 13 Bankruptcy Case as having mortgage loan in the amount of $100,976.00 secured by her residence. Plaintiff admits that she filed a Chapter 13 Bankruptcy Plan providing for the cure of Plaintiff’s mortgage loan default, with BANA receiving 1 See, e.g., Doster x. Experian Info. Sols., Inc., No. 16-CV-04629-LHK, 2017 WL 264401, at *4-7 (N.D. Cal. Feb. 17, 2016 )(Koh, J.) (“[E]ven if Plaintiff is correct that Plaintiff’s credit report did not reflect the terms of Plaintiff’s Chapter 13 Bankruptcy plan, this would not be an inaccurate or misleading statement that could sustain a FCRA claim . . . .”); Giovanni v. Bank of Am., N.A., No. C 12-02530 LB, 2013 WL 1663335, at *5-6 (N.D. Cal. Apr. 17, 2013) (Beeler, J.) (“[R]eporting delinquent payments while [plaintiff’s] bankruptcy petition is pending does not violate the FCRA”); Mortimer v. JP Morgan Chase Bank, N.A., No. C 12-1936 CW, 2012 WL 315563, at *3 (N.D. Cal. Aug. 2, 2012); Devincenzi v. Experian Solutions, Inc., No. 16-CV-04628-LHK, 2017 WL 86131 (N.D. Cal. Jan. 10, 2017); Horsch v. Wells Fargo Home Mortg., 94 F. Supp.3d 665 (E.D. Penn. 2015); Hupfauer v. Citibank, N.A., No. 16 C 475, 2016 WL 4506798, at *4 (N.D. Ill. Aug. 19, 2016). Case 1:17-cv-00641-SCJ-AJB Document 10-1 Filed 05/08/17 Page 2 of 21 3 payments under the terms of the confirmed plan. However, Plaintiff does not allege her debt has been discharged in bankruptcy. In fact, Plaintiff’s Chapter 13 Bankruptcy Case is currently pending. Plaintiff contends that her loan with BANA was a long-term mortgage debt that was not subject to discharge in her Chapter 13 Bankruptcy Case. In turn, Plaintiff attempts to assert claims against BANA for alleged violations of the FCRA. Specifically, Plaintiff alleges that BANA failed to furnish accurate credit information regarding Plaintiff’s loan, by allegedly reporting the loan with a $0 balance and failing to reflect that Plaintiff is making payments on the loan pursuant to the terms of the confirmed Chapter 13 Plan. According to Plaintiff, the mere confirmation of her Chapter 13 Bankruptcy Plan should have immediately resulted in no derogatory information being reported on her BANA account, and that BANA was required to report the Chapter 13 Bankruptcy payment terms. However, that is not the law. Plaintiff’s Complaint fails to state a claim and should be dismissed. First, Plaintiff fails to state a claim under the FCRA because she has not alleged the threshold requirement that BANA furnished inaccurate information. Plaintiff has not received a discharge and District Courts have consistently held that a furnisher is not required to report the terms of Plaintiff’s Chapter 13 Bankruptcy Plan. Thus, the reporting delinquencies or zero balances during the pendency of a bankruptcy Case 1:17-cv-00641-SCJ-AJB Document 10-1 Filed 05/08/17 Page 3 of 21 4 case is not inaccurate or misleading. Second, the status of Plaintiff’s claims are premised on the alleged legal impact of the confirmation of her bankruptcy plan upon her Loan with BANA. The impact of the confirmation of the bankruptcy plan is not a factual inaccuracy, but rather, a legal question, to which BANA is not obligated under the FCRA to resolve. Finally, Plaintiff fails to plausibly allege damages under the FCRA. As a result of these defects, Plaintiff has fallen far short of the necessary standard to properly set forth a claim against Defendant and the Complaint should be dismissed with prejudice pursuant to Federal Rule of Civil Procedure 12(b)(6). II. FACTUAL ALLEGATIONS2 This case was originally filed by the Plaintiff in this Court on February 21, 2017. [Doc. 1]. Plaintiff filed the instant Complaint asserting FCRA claims against Defendant pursuant to 15 U.S.C. § 1681s-2(b). [Doc.1, at 20-23, ¶¶ 87-103]. It appears that on April 21, 2015, Plaintiff filed a petition for relief under Chapter 13 of Title 11 of the U.S.C., Case No. 15-57315-MGD (Bankr. N.D. Ga.) (the 2 The “facts” set forth below are taken from the Complaint and documents that are either attached to, or referenced in, the Complaint and therefore can properly be considered by the Court in connection with this Motion to Dismiss. See FED. R. CIV. P. 10(c) (“A statement in a pleading may be adopted by reference elsewhere in the same pleading or in any other pleading or motion. A copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes.”). These “facts” are presented only for purposes of this Motion; Defendant does not admit them by including them here. Case 1:17-cv-00641-SCJ-AJB Document 10-1 Filed 05/08/17 Page 4 of 21 5 “Bankruptcy Case”). [Doc. 1, at 4, ¶ 13]. Plaintiff listed BANA as a secured creditor on Schedule D in her Chapter 13 Bankruptcy Case as having secured claim in the amounts of $107,827.16 [Doc. 1, at 4-5, 13-18]. It appears that Plaintiff is alleging that she maintained a mortgage loan (the “Loan”) with BANA secured by real estate, and that such Loan was not subject to discharge as a long term debt in the Bankruptcy Case pursuant to 11 U.S.C. § 1322(b)(5). [Doc. at 4-5, ¶¶ 13-19]. On September 2, 2015, Plaintiff’s Chapter 13 plan was confirmed with an order issued by the Bankruptcy Court. [Doc. 1, at 5, ¶ 16]. Plaintiff has not completed his plan and has not received a discharge. [Doc. 1, at 4-5]. On April 26, 2016, Plaintiff obtained a copy of his consumer report from TransUnion, LLC (“TransUnion”). Plaintiff alleges that the TransUnion report showed that BANA was reporting the loan as included in bankruptcy, a $0 balance, and with the last payment made on April 1, 2016. [Doc. 1 at 11-13, ¶¶ 42-56]. In a letter dated November 28 2016, Plaintiff disputed the alleged inaccurate and misleading information directly to TransUnion that the Loan was not discharged in her Bankruptcy Case, and that status and payment history of the Loan was incorrect. [Doc. 1, at 12, ¶ 48]. Plaintiff then alleges “Upon information and belief, TransUnion timely notified BANA of Plaintiff’s dispute, via e-OSCAR or otherwise as required by 15 U.S.C. § 1681i.” [Doc. 1, at 13, ¶ 50]. Case 1:17-cv-00641-SCJ-AJB Document 10-1 Filed 05/08/17 Page 5 of 21 6 Plaintiff is alleging that the BANA Loan was included in the Bankruptcy Case with the Chapter 13 plan setting forth his proposed treatment and payment of the Loan. Accordingly, it appears that Plaintiff maintains that once the plan was confirmed by the Bankruptcy Court on September 2, 2015, this proposed payment of the BANA Loan thus became res judicata, and that altered Plaintiff’s obligations on the accounts. Essentially, Plaintiff is alleging that the confirmation order controls for the purposes of accurate reporting under the FCRA. [Doc. 1, at 4-5]. Plaintiff contends that after the confirmation order was entered on September 2, 2015, BANA was required to report the terms of the Chapter 13 Bankruptcy Plan to the CRAs. In turn, Plaintiff appears to be alleging claims under the FCRA, 15 U.S.C. § 1681s-2(b), that such information regarding the accounts provided to CRAs by BANA was inaccurate and misleading, and that BANA failed to conduct a reasonable investigation of such information. [Doc. 1, at 4-11, 20-23]. II. STANDARD OF REVIEW Federal Rule of Civil Procedure 12(b)(6) permits dismissal of a complaint for “failure to state a claim upon which relief can be granted.” In ruling on the pending motion to dismiss, all of the well-pleaded factual allegations in Plaintiff’s Complaint must be accepted as true and construed in the light most favorable to Plaintiff. See Young Apartments, Inc. v. Town of Jupiter, 529 F.3d 1027, 1037 (11th Cir. 2008). Case 1:17-cv-00641-SCJ-AJB Document 10-1 Filed 05/08/17 Page 6 of 21 7 However, “unsupported conclusions of law or of mixed fact and law have long been recognized not to prevent a Rule 12(b)(6) dismissal.” Marsh v. Butler County, Ala., 268 F.3d 1014, 1036 n.16 (11th Cir. 2001). “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U. S. 544, 555 (2007) (citations and quotations omitted). More specifically, “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quotation omitted). To survive a Rule 12(b)(6) motion, “the plaintiff’s factual allegations, when assumed to be true, ‘must be enough to raise a right to relief above the speculative level.’” United Techs. Corp. v. Mazer, 556 F.3d 1260, 1270 (11th Cir. 2009) (quoting Twombly, 550 U.S. at 555). Case 1:17-cv-00641-SCJ-AJB Document 10-1 Filed 05/08/17 Page 7 of 21 8 III. PLAINTIFF’S COMPLAINT MUST BE DISMISSED BECAUSE PLAINTIFF’S CLAIMS FAIL AS A MATTER OF LAW. A. BANA Did Not Report Inaccurate or Misleading Information on Plaintiff’s Accounts. In general, the FCRA was enacted “to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit . . . in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information.” 15 U.S.C. § 1681(b). To achieve its purpose, the FCRA places distinct obligations on three types of entities: consumer reporting agencies (“CRAs”), users of credit reports, and furnishers of information to CRAs. Chipka v. Bank of America, 355 Fed. App’x 380 (11th Cir. 2009); 15 U.S.C. §§ 1681b, 1681m, and 1682s-2. For a plaintiff to prevail on a FCRA claim against a furnisher of information pursuant to § 1681s-2(b), the plaintiff must allege and establish: that they notified the CRA and disputed the completeness or accuracy of the information in the credit report that was furnished by defendant (furnisher); the CRA gave notice of plaintiff’s dispute to defendant as a furnisher, and defendant did any one of the following (1) failed to conduct a reasonable investigation; (2) failed to review all relevant information provided by the CRA, and (3) failed to report the results of its investigation to the CRA, or (4) if an item is disputed by plaintiff was found to be Case 1:17-cv-00641-SCJ-AJB Document 10-1 Filed 05/08/17 Page 8 of 21 9 accurate, it failed to modify, delete, or block that item of information. Henderson v. BAC Home Loans Serv., LP, No. 1:10-cv-3137-TCB, 2011 WL 10843391 (N.D. Ga. June 29, 2011). However, as a threshold matter, to state a claim against a furnisher under the FCRA, § 1681s-2(b), a plaintiff must allege that an inaccuracy existed in his credit report. Ware v. Bank of America Corp., 9. F.Supp.3d 1329 (N.D. Ga. 2014) (holding that § 1681s-2(a) requires furnishers to submit accurate information to CRAs); Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 890 (9th Cir. 2010) (holding that although the FCRA “does not on its face require that an actual inaccuracy exist for a plaintiff to state a claim, many courts, including our own, have imposed such a requirement”); Kruse v. Experian Info. Solutions, Inc., 471 Fed. Appx. 714, 715 (9th Cir. 2012) (holding that inaccuracies in credit report were required to maintain FCRA claim); Mortimer v. Bank of America, N.A., No. C-12-1959, 2013 WL 1501452, at *11 (N.D. Cal. Jan. 3, 2013) (Wilken, C.J.) (“This [FCRA] claim is insufficiently alleged because Mortimer has not asserted that [the bank] reported incomplete or inaccurate information in the first place.”). In this case, Plaintiff alleges that the Loan with BANA secured by real estate, and that such Loan was not subject to discharge as a long term debt in the Bankruptcy Case pursuant to 11 U.S.C. § 1322(b)(5). [Doc. at 4-5, ¶¶ 13-19]. Plaintiff is alleging Case 1:17-cv-00641-SCJ-AJB Document 10-1 Filed 05/08/17 Page 9 of 21 10 that the BANA Loan was included in the Bankruptcy Case with the Chapter 13 plan setting forth his proposed treatment and payment of the Loan. Accordingly, Plaintiff maintains that once the plan was confirmed by the Bankruptcy Court on September 2, 2015, this proposed payment of the BANA Loan thus became res judicata, and that altered Plaintiff’s obligations on the accounts. Thus, Plaintiff contends that after the confirmation order was entered, BANA was required to report the terms of the Chapter 13 Bankruptcy Plan to the CRAs. In turn, Plaintiff is alleging that the confirmation order controls for the purposes of accurate reporting under the FCRA, and that BANA’s reporting the Loan as included in bankruptcy, with a $0 balance, and with the last payment made on April 1, 2016, is inaccurate under the FCRA. [Doc. 1, at 4-5]. District Courts have consistently held that the reporting of delinquencies, missed payments, or outstanding contractual balances during the pendency of a bankruptcy (and prior to discharge) is not inaccurate or misleading under the FCRA. See Keller v. Experian Info. Sols., Inc., No 5:16-CV-03322-EJD, 2017 WL 346022, at *8 (N.D. Cal. Jan. 24, 2017) (“[T]he Court rejects Plaintiff’s argument that his credit report was misleading or inaccurate for reporting delinquent debts during the pendency of his Chapter 13 bankruptcy.”); Adkins v. Experian Info. Sols., Inc., No. 5:16-cv-02150-EJD, 2016 WL 6841700, at *2 (N.D. Cal. Oct. 7, 2016) (“[T]he debt Case 1:17-cv-00641-SCJ-AJB Document 10-1 Filed 05/08/17 Page 10 of 21 11 and its delinquent status still exist” while a bankruptcy proceeding is pending, and “it is not inaccurate or misleading to report that information.”); Mortimer v. Bank of America, N.A., No. C-12-1959-JCS, 2013 WL 1501452, at *10 (N.D. Cal. Apr. 10, 2013) (Wilken, C.J.) (“the FCRA does not prohibit the accurate reporting, after discharge, of debts that were delinquent during the pendency of the bankruptcy action . . . . Reporting this information is neither inaccurate nor misleading.”); Mestayer v. Experian Information Solutions, Inc., No. 15-cv-036450-EMC, 2016 WL 631980, at *3 (N.D. Cal. Feb. 17, 2016) (Chen, J.) (holding that a bank’s reporting of debtor’s account with a balance, delinquency, and in bankruptcy is not inaccurate as a matter of law under the FCRA); Biggs v. Experian Information Solutions, Inc., --- F.Supp.3d ---, 2016 WL 5235043, at *2 (N.D. Cal. Sept. 22, 2016) (Davila, J.) (“the filing of a bankruptcy petition only imposes a limit on a creditor’s ability to collect on a debt…but the debt and its delinquent status still exist, and it is not inaccurate or misleading to report that information to a CRA”); Blakeney v. Experian Information Solutions, Inc., No. 15-cv-05544, 2016 WL 4270244, at *5-6 (N.D. Cal. Aug. 15, 2016) (Koh, J.) (dismissing plaintiff’s FCRA cause of action because courts in this district have consistently held that it is not misleading or inaccurate to report delinquent debts that have not been discharged). Case 1:17-cv-00641-SCJ-AJB Document 10-1 Filed 05/08/17 Page 11 of 21 12 These cases explicitly recognize the well-established principle of bankruptcy law that the debtor in bankruptcy continues to owe the full amount of the outstanding contractual balance until he has made all payments under the plan and receives a discharge. 11 U.S.C. § 1328. The above decisions apply with equal force to this case. Here, Plaintiff’s Chapter 13 Bankruptcy Plan was confirmed, but Plaintiff’s debt owed to BANA has not been discharged. See 11 U.S.C. §§ 1325 and 1328. Yet, Plaintiff alleges that BANA’s reporting of the Loan was inaccurate because the information stated that the Loan was included in the confirmed Chapter 13 plan, and reported a $0 balance with delinquent payments listed. BANA is under no obligation to cease its accurate reporting that the debt exists and is delinquent, even while Plaintiff’s Chapter 13 Bankruptcy Case is pending. Thus, Plaintiff has failed to state a claim against BANA for a violation under the FCRA because there has been no actionable inaccuracy in the reporting of Plaintiff’s Loan. As a result, Plaintiff’s Complaint should be dismissed.3 3 To the extent Plaintiff is alleging that the reporting was inaccurate because it did not comply with the Metro 2 guidelines promulgated by the Consumer Data Industry Association (“CDIA”), Plaintiff’s contention also fails. Courts have rejected the argument that such reporting that does not adhere to the CDIA or Metro 2 guidelines, absent a showing of inaccuracy, violates the FCRA. Mortimer v. Bank of America, N.A., No. C-12-1959, 2013 WL 1501452, at *12 (N.D. Cal. Jan. 3, 2013) (“[F]ailure to comply with the CDIA guidelines does not render a report incorrect.”); Mestayer v. Experian Information Solutions, Inc., No. 15-cv-036450-EMC, 2016 WL 631980, at *2 (N.D. Cal. Feb. 17, 2016) (finding allegation of failuire to comply with Metro 2 standards insufficient to allege inaccuracy, even where accompanied by allegation that such failure “may prompt those making credit decision to draw a more negative inference.”). Case 1:17-cv-00641-SCJ-AJB Document 10-1 Filed 05/08/17 Page 12 of 21 13 B. Plaintiff Cannot State a Claim for a Violation of § 1681s-2(b) Because the Dispute Consisted of a Legal Interpretation Not a Factual Dispute. Along with the above defects, Plaintiff also fails to state a claim under § 1681s-2(b) because the FCRA only penalizes inaccuracies of fact, not legal conclusions. Chiang v. Verizon New England Inc., 595 F.3d 26 (1st Cir. 2010) (a plaintiff’s required showing under § 1681s-2(b) is factual inaccuracy, rather than the existence of disputed legal questions, furnishers are neither qualified nor obligated to resolve matters that turn on questions that can only be resolved by a court of law); DeAndrade v. Trans Union LLC, 523 F.3d 61, 68 (1st Cir. 2008). In this case, Plaintiff alleges the Loan was a “long-term secured mortgage debt” that was not subject to discharge in Plaintiff’s bankruptcy case pursuant to 11 U.S.C. § 1328, and 11 U.S.C. § 1322(b)(5). [Doc. 1, at 5, ¶ 19]. Accordingly, since the Loan was not allegedly not subject to discharge, Plaintiff alleges that Defendant BANA inaccurately reported Plaintiff’s Loan with a $0 balance, and included in bankruptcy with delinquent payments. In turn, it appears that Plaintiff maintains that the confirmation order controls for the purposes of accurate reporting under the FCRA. [Doc. 1, at 4-5]. However, any alleged legal effect of the confirmation of Plaintiff’s Plan on her pre-bankruptcy contractual terms is irrelevant as to whether BANA’s furnishing Case 1:17-cv-00641-SCJ-AJB Document 10-1 Filed 05/08/17 Page 13 of 21 14 of information was accurate under the FCRA. Indeed, the foundational requirement of an FCRA claim is the existence of a factual inaccuracy. The legal effect of the confirmation Plaintiff’s Chapter 13 plan, and the determination of whether Plaintiff’s the Loan is subject to a discharge, is a question of pure legal interpretation, and beyond the duties imposed upon Defendant under § 1681s-2(b). Schueller v. Wells Fargo & Co., 559 Fed. Appx 733, 737 (10th Cir. 2014) (dismissing plaintiff’s FCRA claim because reporting by mortgage company of an account as being discharged in bankruptcy with a zero balance was not inaccurate or misleading despite the fact that plaintiff continued making mortgage payments to prevent repossession of his home). Hupfauer v. Citibank, N.A., No. 16 C 475, 2016 U.S. Dist. LEXIS 112227, at *22-23 (N.D. Ill. Aug. 19, 2016) (dismissing FCRA claim because the alleged inaccuracy that requires a third party to “scour” a bankruptcy file and make judgments about which debts are included “is precisely the kind of legal question that credit reporting agencies are neither qualified nor obligated to answer.”); DeAndrade v. Trans Union LLC, 523 F.3d 61, 68 (1st Cir. 2008) (holding that a plaintiff failed to allege factual inaccuracy in his credit report because the legal status of his mortgage was a “question that can only be resolved by a court of law” and a “legal issue that a credit agency . . . is neither qualified nor obligated to resolve under the FCRA.”). Case 1:17-cv-00641-SCJ-AJB Document 10-1 Filed 05/08/17 Page 14 of 21 15 In other words, the determination if a debt has been discharged in bankruptcy is a pure legal question. BANA simply had no obligation under the FCRA to resolve the legal question presented in Plaintiff’s Complaint prior to reporting accurate, factual information about Plaintiff’s BANA Loan. As such, the credit report here is as complete as could be determined. Accordingly, Plaintiff has failed to plausibly state a claim for relief under § 1681s-2(b). C. Plaintiff Has Failed To Adequately Allege FCRA Causation and Damages. The FCRA authorizes two types of civil claims: negligent claims pursuant to 15 U.S.C. § 1681o, and willful claims pursuant to 15 U.S.C. § 1681n. Recovery for a negligent violation is limited to the amount of actual damages and attorneys’ fees and costs. 15 U.S.C. § 1681o. Moore v. Equifax Info. Servs., 333 F. Supp.2d 1360 (N.D. Ga. 2004); Levine v. World Fin. Network Nat’l Bank, 437 F.3d 1118 (11th Cir. 2006). The courts have general recognized willfulness under the FCRA to encompass a reckless disregard. Safeco Ins. Co. of Am. V. Burr, 127 S. Ct. 2201 (2007). A successful FCRA plaintiff is entitled to a damage award varies depending on the willfulness of the breach. If the breach is willful, the plaintiff is entitled to recover either actual damages, or statutory damages (from $100-$1000), whichever is greater, in addition to fees and cost – again “actual damages” may include damages for emotional distress. The court may also impose punitive damages to punish a Case 1:17-cv-00641-SCJ-AJB Document 10-1 Filed 05/08/17 Page 15 of 21 16 willful violation of the FCRA. 15 U.S.C. § 1681n. A willful violation is generally a conscious disregard of the law, which means either knowing that policy or action to be a contravention of the rights possessed by consumers pursuant to FCRA, or in reckless disregard of whether the policy contravened those rights. Reynolds v. Hartford Fin. Servs. Group, Inc. 435 F.3d 1081 (9th Cir. 2006). A willful violation requires a high threshold showing that the furnisher acted with reckless disregard – a mere moving slow to complete an investigation may be negligent but not willful, instead concealment or deletion of information are examples of willful conduct. Id. Moreover, to prevail on a FCRA claim, a plaintiff must show: (1) that he suffered injury; and (2) that the injury was caused by the inclusion of inaccurate information in his credit report. Cahlin v. General Motors Acceptance Corp., 936 F.2d 1151, 1160-1161 (11th Cir. 1991). Sufficient allegations of causation and damages are necessary to state a viable claim for a violation of FCRA. Ray v. Equifax Information Solutions, Inc., 327 Fed. Appx 819, 826 (11th Cir. 2009). It is not clear that any of the information regarding the Loan furnished by BANA was false, misleading or inaccurate – Plaintiff filed a Chapter 13 Bankruptcy Case that was confirmed but not discharged, and yet Plaintiff alleges that the Loan was a long-term debt not subject to discharge pursuant to 11 U.S.C. § 1322(b)(5). [Doc. 1, at 5, ¶ 19]. As noted, the determination whether the Loan was subject to Case 1:17-cv-00641-SCJ-AJB Document 10-1 Filed 05/08/17 Page 16 of 21 17 discharge is a pure legal interpretation, and such § 1681s-2(b) only penalizes inaccuracies of fact not legal interpretation. Therefore, the information furnished by BANA is accurate for the purposes of the FCRA. Thus, Plaintiff cannot state a claim for damages under the FCRA. Also, Plaintiff asserts a formulaic recitation that she “disputed” the information with the CRAs, but does not allege with any specific factual detail that the CRAs furnished notice of this dispute to BANA. Plaintiff does not allege that BANA failed to conduct a reasonable investigation. Plaintiff makes an additional legal conclusion with no factual support that “Plaintiff has suffered actual damages as stated herein.” [Doc. 1, at 23, ¶ 101]. Those damages include without limitation: “out-of-pocket expenses in challenging the Defendants’ wrongful representations regarding the Mortgage . . . Plaintiff, being fully aware that Defendants’ false reporting has the practical effect of negating over a year’s worth of positive credit history for the most important account she has experienced frustration, anxiety, and despair to a degree that has adversely affected her interpersonal relationships and activities of daily living.” [Doc.1 at 15-16, ¶¶ 64-65].4 As a result, Plaintiff alleges 4 As noted supra, BANA has accurately reported the Loan as included in bankruptcy with delinquent payments. However, Plaintiff is asserting damages under the FCRA for BANA’s failure to report the payment terms of Plaintiff’s Chapter 13 Plan, seemingly seeking damages for “negating over a year’s worth of [Plaintiff’s] positive credit history.” [Doc. 1, at 15, ¶ 65]. As a threshold matter, Plaintiff’s drop in her credit score is a direct result of her bankruptcy case. Moreover, a mere drop in Plaintiff's credit score without any damages actually incurred will not Case 1:17-cv-00641-SCJ-AJB Document 10-1 Filed 05/08/17 Page 17 of 21 18 that she is entitled to recover actual damages under 15 U.S.C. §§ 1681n and 1681o. [Doc. 1, at 23, ¶¶ 101-102]. However, Plaintiff fails to allege damages with any degree of specificity. Plaintiff provides additional legal conclusions “Defendant BANA’s actions and omissions were willful, rendering BANA liable for punitive damages and/or statutory damages pursuant to 15 U.S.C. § 1681n.” [Doc. 1, at 23, ¶ 102-103]. Plaintiff has failed to allege sufficient facts to state a claim for a FCRA violation, let alone that such violation was negligent or willful, and provides no facts indicating that she suffered any damages as a result of Defendant’s conduct. Plaintiff has utterly failed to allege a sufficient causal connection between any inaccurate reporting, failure to investigate, or failure to correct Plaintiff’s credit information that was a substantial factor in causing her alleged injuries. Therefore, Plaintiff has failed to state a claim under FCRA as a matter of law. CONCLUSION WHEREFORE, for the above and foregoing reasons, Defendant respectfully requests that this Court grant its Motion to Dismiss. satisfy the actual damages requirement. Young v. Harbor Motor Works, Inc., 2009 WL 187793, at * 5 (N.D. Ind. Jan. 27, 2009) (dismissing FCRA claim in which plaintiff alleged that he suffered a decrease in his credit score but no pecuniary or non-pecuniary damage arising from such a decrease). Case 1:17-cv-00641-SCJ-AJB Document 10-1 Filed 05/08/17 Page 18 of 21 19 This 8th day of May, 2017. /s/ Paul A. Rogers Paul A. Rogers Georgia Bar No. 612278 McGuireWoods LLP 1230 Peachtree Street, NE Promenade II, Suite 2100 Atlanta, Georgia 30309-3534 (404) 443-5636 (Telephone) (404) 443-5772 (Facsimile) progers@mcguirewoods.com Attorneys for Defendant Bank of America, N.A. Case 1:17-cv-00641-SCJ-AJB Document 10-1 Filed 05/08/17 Page 19 of 21 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION AVRIL MELISSA PHILLIPS, ) ) Plaintiff, ) CIVIL ACTION FILE ) NO. 1:17-cv-00641-SCJ-AJB v. ) ) TRANSUNION, LLC, and BANK OF ) AMERICA, N.A., ) ) Defendants. ) ) CERTIFICATE OF SERVICE, FONT AND MARGINS I hereby certify that on May 8, 2017, I electronically filed the foregoing Motion to Dismiss with Memorandum of Law in Support with the Clerk of the Court using the CM/ECF System and served a true and correct copy of same on all parties of record via First-Class Mail, postage prepaid, addressed to: Matthew T. Berry Paul J. Sieg Berry & Associates 2751 Buford Highway, Suite 600 Atlanta, Georgia 30324 Case 1:17-cv-00641-SCJ-AJB Document 10-1 Filed 05/08/17 Page 20 of 21 21 I further certify that I prepared this document in 14 point Times New Roman font and complied with the margin and type requirements of this Court, pursuant to L.R. 5.1. /s/ Paul A. Rogers Paul A. Rogers Case 1:17-cv-00641-SCJ-AJB Document 10-1 Filed 05/08/17 Page 21 of 21