Radley v. Experian Information Solutions, Inc, et al

REPLY BRIEF to Opposition to Motion

D.N.J.July 10, 2017

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY MARINA RADLEY, Plaintiff, vs. EXPERIAN INFORMATION SOLUTIONS, INC., EQUIFAX INFORMATION SERVICES, LLC, and ROUNDPOINT MORTGAGE COMPANY, Defendants. : : : : : : : : : : : : : : : Civil No. 1:17-cv-02755-JBS-JS REPLY BRIEF IN SUPPORT OF MOTION TO DISMISS PLAINTIFF’S COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(6) Motion Date: July 17, 2017 Edward W. Chang Thomas M. Brodowski BLANK ROME LLP One Logan Square 130 N. 18th Street Philadelphia, PA 19103 Phone: (215) 569-5500 Fax: (215) 569-5555 EChang@BlankRome.com TBrodowski@BlankRome.com Attorneys for Defendant, RoundPoint Mortgage Servicing Corporation Date: July 10, 2017 Case 1:17-cv-02755-JBS-JS Document 23 Filed 07/10/17 Page 1 of 12 PageID: 162 Defendant, RoundPoint Mortgage Servicing Corporation (misidentified in the Complaint as “RoundPoint Mortgage Company”) (“RoundPoint”), hereby submits this Reply Brief in response to the opposition brief (the “Opposition”) filed by Plaintiff, Marina Radley (“Plaintiff”), and in further support of its Motion to Dismiss Plaintiff’s Complaint Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure (the “Motion to Dismiss”). I. INTRODUCTION In response to RoundPoint’s Motion to Dismiss, Plaintiff’s Opposition raises three novel arguments, none of which are sufficient to overcome the fatal shortcomings in Plaintiff’s Complaint. In fact, all of the arguments are based on purported facts that Plaintiff never alleged in the Complaint, which, even if true, still cannot support any claim under the Fair Credit Reporting Act, 15 U.S.C. 1681 et seq. (“FCRA”). First, Plaintiff argues that RoundPoint “misstated” the meaning of “accuracy” in the context of credit reporting. Not only does this argument border on the line of incomprehensible, it ignores the fact that Plaintiff has no bona fide dispute under the FCRA. Absent a bona fide dispute, Plaintiff’s FCRA claim fails as a matter of law, and nothing in Plaintiff’s Opposition changes that fact. Second, Plaintiff argues that the accuracy of RoundPoint’s credit reporting of the mortgage loan (the “Loan”) is a triable issue for a jury to decide. In theory, Case 1:17-cv-02755-JBS-JS Document 23 Filed 07/10/17 Page 2 of 12 PageID: 163 2 Plaintiff is correct; however, there is no disputed factual issue for a jury to decide in this case. Indeed, there is no dispute that Plaintiff signed the Note and Mortgage (the “Loan Documents”), or that the Loan is delinquent. Thus, RoundPoint’s reporting of the Loan as delinquent on Plaintiff’s credit report was entirely proper, and her FCRA claim necessarily fails as a matter of law. Third, Plaintiff argues that the Complaint sufficiently states a claim for credit furnisher liability under the FCRA. Again, Plaintiff relies on a myriad of facts that were never alleged in the Complaint, and therefore cannot be used to amend her legally-deficient Complaint. For all these reasons, as well as those set forth in RoundPoint’s opening brief, the Court should grant the Motion and dismiss Plaintiff’s Complaint with prejudice. II. ARGUMENT A. There Is No Bona Fide Dispute. Plaintiff argues that RoundPoint’s Motion to Dismiss goes “far beyond the pleadings” to introduce evidence that RoundPoint’s credit reporting was “accurate,” thereby negating Plaintiff’s FCRA claim.1 [Dkt. 22, p. 6.] This argument misses the mark for several reasons. 1 Presumably, Plaintiff is referring to the Note and Mortgage (the “Loan Documents”) attached to RoundPoint’s Motion to Dismiss, both of which bear Plaintiff’s signature. Case 1:17-cv-02755-JBS-JS Document 23 Filed 07/10/17 Page 3 of 12 PageID: 164 3 First, regarding the “accuracy” of RoundPoint’s credit reporting, Plaintiff’s Opposition seems to suggest that RoundPoint was under some obligation to report the Loan account as “disputed” even after investigating Plaintiff’s alleged complaint and determining that the reporting was correct.2 This is simply not the case, as 15 U.S.C. § 1681s-2(b) does not explicitly require a furnisher to change the reporting of an account to reflect that the consumer disputes the reporting. The FCRA does, however, unambiguously provide that a furnisher is not under a duty to report a dispute where the consumer’s dispute is “frivolous or irrelevant.” 15 U.S.C. § 1681s-2(a)(8)(F)(i) (emphasis added). Assuming that Plaintiff did allege in her Complaint that RoundPoint failed to mark her account as “disputed” (which she did not), the Third Circuit Court of Appeals has not expressly considered whether a furnisher’s failure to mark a debt as disputed subjects the furnisher to liability under § 1681s-2(b). See Seamans v. Temple University, 901 F. Supp. 2d 584, 599 (E.D. Pa. 2012). However, other District Courts within the Third Circuit have made clear that “the dispute submitted by the consumer to the furnisher must be bona fide to create furnisher liability under § 1681s-2(b).” See, e.g., Shap v. Capital One Financial Corp., 2012 WL 1080127, at *4 (E.D. Pa. March 30, 2012) (emphasis added). 2 Notably, Plaintiff never alleged in the Complaint that RoundPoint failed to mark the Loan account as “disputed;” however, Plaintiff impermissibly makes this Case 1:17-cv-02755-JBS-JS Document 23 Filed 07/10/17 Page 4 of 12 PageID: 165 4 Nevertheless, the Seamans court specifically concluded that a furnisher, such as RoundPoint, cannot be held liable for failing to mark an account as “disputed” when the dispute is not “bona fide.” Seamans, 901, F. Supp. 2d at 589. Likewise, the court in Noel v. First Premier Bank, 2012 WL 832992 (M.D. Pa. Mar. 12, 2012), dismissed plaintiff’s FCRA claim for the same reason, again relying on the express “frivolous or irrelevant” language set forth in § 1681s-2(a)(8)(F)(i). See also, Palouian v. FIA Card Services, 2013 WL 1827615, at *4 (E.D. Pa. May 1, 2013) (dismissing plaintiff’s complaint where the allegations in the complaint and relevant exhibits proved that plaintiff’s FCRA dispute was not bona fide). Here, the same rationale should apply because Plaintiff has no bona fide dispute. Indeed, Plaintiff admits in the Complaint and in the Opposition that she signed the Loan documents, thereby proving she assumed responsibility to repay the Loan. Plaintiff also does not dispute that the Loan is delinquent, nor does she allege that RoundPoint should not have reported the Loan as such. Instead, she cavalierly argues that RoundPoint should have reported the Loan with some type of disclaiming language showing that her ex-husband agreed to make the mortgage payments as part of a divorce agreement, even though Plaintiff also remained contractually obligated to do so as well. For many reasons, this argument is nonsensical, as credit furnishers should not be forced to delete negative credit allegation throughout the Opposition. Case 1:17-cv-02755-JBS-JS Document 23 Filed 07/10/17 Page 5 of 12 PageID: 166 5 reporting just because a consumer is simply dissatisfied with negative reporting resulting from jointly-obtained credit accounts. Second, Plaintiff’s reliance on Hillis v. Trans Union, LLC, 969 F. Supp. 2d 419 (E.D. Pa. Sept. 18, 2013) is misplaced, as the Hillis court presupposed the existence of a bona fide dispute. In Hillis, the court denied the defendant’s motion to dismiss even though the creditor’s reporting may have been technically accurate, specifically noting that “[A] creditor aware of Plaintiff’s indemnity right against his ex-wife might view him as a slightly more favorable credit risk. If Plaintiff can prove [defendant’s] reporting was misleading enough to cause him harm, he may have an actionable claim under the FCRA.” Hillis, 969 F. Supp. 2d at 421. As explained above, Plaintiff here conceded that she is contractually obligated to repay the Loan. As a result, any negative credit reporting associated with Plaintiff’s failure to do so (regardless of whether her ex-husband agreed to make the payments himself), was entirely proper. At most, Plaintiff may have claims against her ex-husband for breach of contract, but certainly no claims against RoundPoint under the FCRA. Plaintiff simply has no bona fide dispute, and any suggestion to the contrary is utterly baseless. Third, even assuming that Plaintiff had a bona fide dispute (which she does not), RoundPoint’s attachment of the Loan Documents to its opening brief was entirely proper. Indeed, a key fact central to Plaintiff’s FCRA claim (and the Case 1:17-cv-02755-JBS-JS Document 23 Filed 07/10/17 Page 6 of 12 PageID: 167 6 accuracy of RoundPoint’s credit reporting) is whether Plaintiff is obligated to repay the Loan. In the Complaint, Plaintiff specifically referred to a “mortgage with RMC”3 as the allegedly inaccurate information forming the basis for her FCRA claim. [Dkt. 1, ¶ 9.] By any fair reading, Plaintiff is obviously referring to the Loan Documents (which she undisputedly executed), which were therefore appropriately attached to RoundPoint’s Motion to Dismiss. See Park v. M&T Bank Corp., No. 09-cv-02921, 2010 WL 1032649, at *3 (D.N.J. Mar. 16, 2010) (taking judicial notice of loan documents for loans referenced in the plaintiff’s complaint without converting the motion to dismiss to a motion for summary judgment). Accordingly, Plaintiff’s suggestion that RoundPoint went “far beyond the pleadings” by attaching the Loan Documents is completely baseless. Fourth, there is no merit to Plaintiff’s argument that RoundPoint’s Motion to Dismiss is premature. Plaintiff remarkably argues that she should be afforded an opportunity to take discovery regarding the origination of the Loan, the account history, and RoundPoint’s knowledge and awareness of the divorce proceeding [Dkt. 22, p. 6], despite none of that information being even remotely relevant to Plaintiff’s FCRA claim. Indeed, there is no dispute that Plaintiff signed the Loan Documents, that the Loan is delinquent and was reported as such, or that Plaintiff notified RoundPoint that she divorced her ex-husband. Thus, Plaintiff should not 3 RoundPoint is abbreviated as RMC in Plaintiff’s Complaint. Case 1:17-cv-02755-JBS-JS Document 23 Filed 07/10/17 Page 7 of 12 PageID: 168 7 be allowed to use discovery as a fishing expedition just bolster her purported claims, which, for the reasons stated in RoundPoint’s opening brief, fail as a matter of law anyway. See Campbell v. Sedgwick, Detert, Moran & Arnold, 2012 WL 12898345, at *3 (D.N.J. Oct. 9, 2012) (“discovery cannot be used as a tool to amend initial pleadings”); see also, NE Technologies, Inc. v. Evolving Systems, Inc., No. 06-6061, 2008 WL 4277668, at * 5 (D.N.J. Sept. 12, 2008) (parties “have no entitlement to discovery to develop new claims or defenses”) (internal citations omitted). In short, Plaintiff’s Opposition does not – and cannot – offer any evidence rebutting the fact that Plaintiff is contractually responsible to repay the Loan. Plaintiff therefore cannot plausibly maintain an FCRA claim against RoundPoint, while nothing in her Opposition changes that fact. B. There Are No Issues Concerning RoundPoint’s Credit Reporting For A Jury To Decide. Plaintiff’s second argument in her Opposition, namely that the accuracy of RoundPoint’s credit reporting is an issue for a jury to decide, assumes that Plaintiff sufficiently pleaded a cause of action against RoundPoint under the FCRA. As explained in RoundPoint’s opening brief, this is simply not true. Nevertheless, in support of this argument, Plaintiff relies on Seamans in which the court noted “whether technically accurate information is misleading to an extent it can be expected to have an adverse effect is generally a jury question”). Case 1:17-cv-02755-JBS-JS Document 23 Filed 07/10/17 Page 8 of 12 PageID: 169 8 [Dkt. 22, pp. 14-15.] Although correct in theory, Plaintiff overlooked the remainder of Seamans, which, as discussed above, dealt with a credit furnisher’s FCRA liability in connection with a bona fide dispute. Absent a bona fide dispute, as is the case here, there is no question for a jury to decide. Moreover, the gravamen of Plaintiff’s “dispute” has no practical feasibility or real world application. Plaintiff is essentially asking the Court to issue an advisory opinion and/or require credit furnishers to adopt new policies and procedures regarding how credit accounts are marked in response to all disputes, bona fide or not. For instance, rather than conform to industry standards of marking an account as “disputed” (again, assuming there was a bona fide dispute), Plaintiff seems to suggest that credit furnishers and CRAs should expand their reporting notations infinitely to include every possibly credit reporting dispute scenario, just because Plaintiff is unhappy with negative marks on her credit report. This position is nonsensical, as credit furnishers/CRAs should not be forced to delete negative credit reporting just because a consumer is simply dissatisfied with their bad credit, nor should furnishers/CRAs be required to create an infinite lexicon of reasons to select from when notating a “disputed” consumer credit account. Accordingly, there is no “dispute” for a jury to decide, and Plaintiff’s Opposition offers no compelling argument to the contrary. Case 1:17-cv-02755-JBS-JS Document 23 Filed 07/10/17 Page 9 of 12 PageID: 170 9 C. Plaintiff’s Opposition Cannot Cure The Pleading Defects Inherent With The Complaint. For her third and final argument, Plaintiff alleges that the Complaint states a claim for credit furnisher liability under the FCRA, despite the overwhelming arguments set forth in RoundPoint’s Motion to Dismiss. Plaintiff’s argument, however, is apparently based on facts that were never alleged in the Complaint. Indeed, it is well-settled that briefs cannot serve to amend a complaint or introduce new pleadings. See Miles v. Ansari, 2011 WL 2974709, at *3 (D.N.J. July 21, 2011) (citing Commw. of Pa. ex rel. Zimmerman v. PepsiCo, Inc., 836 F.2d 173, 181 (3d Cir.1988) (“It is axiomatic that the complaint may not be amended by the briefs in opposition to a motion to dismiss.”)). Here, that is precisely what Plaintiff attempts to do. For example, there is absolutely no mention of a divorce decree in Plaintiff’s Complaint, or the fact that RoundPoint allegedly failed to mark the Loan account as “disputed.” Yet, Plaintiff’s Opposition makes numerous references to a divorce decree and RoundPoint’s alleged failure to mark the account as “disputed,” as if those allegations were common knowledge or information readily ascertainable from the Complaint. See generally, [Dkt. 22.] Likewise, there is no mention of any agreement by Plaintiff’s ex-husband to indemnify or hold harmless Plaintiff as it relates to making payments on the Loan, but the Opposition is rife with such Case 1:17-cv-02755-JBS-JS Document 23 Filed 07/10/17 Page 10 of 12 PageID: 171 10 allegations. (Id.) In what appears to be a pattern, Plaintiff’s Opposition goes on to describe contents of credit reports – indeed more facts which are noticeably absent from the Complaint. (Id.) In fact, Plaintiff’s entire “Background and Procedural History” section in the Opposition reads with far greater clarity than the Complaint – an obvious retort to RoundPoint’s Motion to Dismiss. See generally, [Dkt. 22, pp. 2-4.] However, regardless of whether the additional facts are true, Plaintiff cannot use her Opposition to amend the Complaint. Moreover, Plaintiff’s newly-alleged facts are insufficient to save her FCRA claims from dismissal. As explained above, Plaintiff has no bona fide dispute, which necessarily dooms her Complaint. In short, as explained in RoundPoint’s Motion to Dismiss, Plaintiff’s Complaint fails to allege “enough facts to state a claim that is plausible on its face,” requiring its dismissal. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Nothing in Plaintiff’s Opposition can change that fact. III. CONCLUSION For all the foregoing reasons, as well as those set forth in RoundPoint’s opening brief, RoundPoint respectfully request that the Court grant its Motion to Case 1:17-cv-02755-JBS-JS Document 23 Filed 07/10/17 Page 11 of 12 PageID: 172 11 Dismiss Plaintiff’s Complaint pursuant to Rule 12(b)(6), dismiss Plaintiff’s claims with prejudice,4 and grant any other relief to which it is entitled. Respectfully submitted, /s/ Thomas M. Brodowski Edward W. Chang Thomas M. Brodowski BLANK ROME LLP One Logan Square 130 N. 18th Street Philadelphia, PA 19103 Phone: (215) 569-5500 Fax: (215) 569-5555 EChang@BlankRome.com TBrodowski@BlankRome.com Attorneys for Defendant, RoundPoint Mortgage Servicing Corporation Date: July 10, 2017 4 See Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002) (observing that the district court may exercise its discretion to dismiss claims with prejudice when leave to amend would be futile). Case 1:17-cv-02755-JBS-JS Document 23 Filed 07/10/17 Page 12 of 12 PageID: 173 CERTIFICATE OF SERVICE I, Thomas M. Brodowski, Esquire, hereby certify that on July 10, 2017, I caused the foregoing Reply Brief In Further Support of Motion to Dismiss Plaintiff’s Complaint Pursuant to Fed. R. Civ. P. 12(b)(6), to be electronically filed via the Court’s ECF system. The foregoing document is available for viewing and downloading from the PACER system by the following: Richard H. Kim, Esq. Drucilla Tigner, Esq. The Kim Law Firm, LLC 1500 Market Street Centre Square – West Tower Suite W-3110 Philadelphia, PA 19102 rkim@thekimlawfirmllc.com dtigner@thekimlawfirmllc.com Attorneys for Plaintiff Joann Needleman Scott B. Galla CLARK HILL PLC One Commerce Square 2005 Market Street, Suite 1000 Philadelphia, PA 19103 Tel: (215) 640-8536 Fax: (215) 640-8501 jneedleman@clarkhill.com sgalla@clarkhill.com Attorneys for Defendants Equifax Information Services LLC Dorothy A. Kowal, Esq. Price, Meese, Shulman & D’Arminio, P.C. Case 1:17-cv-02755-JBS-JS Document 23-1 Filed 07/10/17 Page 1 of 2 PageID: 174 50 Tice Boulevard Woodcliff Lake, NJ 07677 Telephone: (201) 391-3737 Fax: (201) 391-9360 dkowal@pricemeese.com Counsel for Defendant Experian Information Solutions, Inc. /s/ Thomas M. Brodowski Thomas M. Brodowski Case 1:17-cv-02755-JBS-JS Document 23-1 Filed 07/10/17 Page 2 of 2 PageID: 175