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Locke v. Sun Loan Company Missouri, Inc.

United States District Court, W.D. Missouri, Western Division

November 13, 2017



          Fernando J. Gaitan, Jr., United States District Judge.

         Currently pending before the Court is Defendant Sun Loan Company Missouri, Inc.'s Motion to Dismiss (Doc. # 18); Counsel's Motion to Withdraw as Attorney (Doc. # 20); Plaintiff's Motion for Leave to File First Amended Complaint (Doc. # 29) and the parties' Joint Motion for Extension of Time to File Proposed Scheduling Order (Doc. # 31).

         I. BACKGROUND

         Plaintiff initially filed a four count Complaint against Sun Loan Company Missouri, Inc. (“Sun Loan”), Royal Management Corporation, Equifax Information Services, LLC and Experian Information Solutions, Inc. for violations of the Fair Credit Reporting Act (hereafter “FCRA”), 15 U.S.C. §§ 1581, et seq.[1] On September 20, 2011, plaintiff filed a Chapter 13 Bankruptcy in the Western District of Missouri. Plaintiff had an unsecured loan with Sun Loan that was discharged through plaintiff's Chapter 13 Plan. Plaintiff had three unsecured loans with defendant Noble under the names of Merit Brokerage, National Finance and Noble Finance that were also discharged in bankruptcy. Plaintiff received her bankruptcy discharge on June 22, 2016. On December 27, 2016, Plaintiff requested and reviewed her credit reports from Equifax, Experian and Trans Union. Through a review of these reports, plaintiff became aware that the defendants were misreporting information on each of her reports. On February 8, 2017, plaintiff sent letters with her bankruptcy information to Experian disputing defendants' incorrect reporting. Plaintiff alleges that although defendants have removed some of the incorrect information, her credit report still contains false information.

         II. STANDARD

         To survive a motion to dismiss under 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A pleading that merely pleads “labels and conclusions” or a “formulaic recitation” of the elements of a cause of action, or “naked assertions” devoid of “further factual enhancement” will not suffice. Id. (quoting Twombly). “Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 1950. Under Fed.R.Civ.P. 12(b)(6) we must accept the plaintiff's factual allegations as true and grant all reasonable inferences in the plaintiff's favor. Phipps v. FDIC, 417 F.3d 1006, 1010 (8th Cir. 2005).


         A. Motion to Dismiss/Motion to Leave to File Amended Complaint

         Defendant Sun Loan states that in plaintiff's February 8, 2017 dispute letter, plaintiff requested that her information be upgraded to show “$0 Balance, not $684, ” and further “to show Discharged, not Account Charged off; $684 written off; $819 past due.” Plaintiff further requested the removal of the $819 past due amount, the $684 charge off amount and the negative history from date of filing of September 20, 2011 to the present. Defendant states that a copy of the report generated by Experian on March 24, 2017 is attached as Exhibit G to plaintiff's Complaint and shows that everything that plaintiff requested regarding her credit report was completed. Defendant argues that plaintiff's Complaint should be dismissed because the factual allegations do not give rise to an entitlement to relief. Defendant argues that plaintiff's Complaint is seeking to hold Sun Loan liable for something that Sun Loan did not do.

         In response, plaintiff states that while Sun Loan corrected some of the incorrect reporting, it failed to fully correct and remove the negative charge off payment history that was reported during plaintiff's Chapter 13 Bankruptcy and after her discharge. Plaintiff states that the FCRA civil liability rules make no exception for furnishers who violate their obligations as part of the investigation procedures pursuant to § 1681s-2(b). Plaintiff states that any furnisher who negligently fails to comply with any of these investigation requirements is liable to the consumer for actual damages, the costs of litigation and attorney fees. Plaintiff states that after receiving notice of a dispute from a credit reporting agency, one of a furnisher's duties is to review the information provided by the credit reporting agency and conduct its own investigation of the accuracy and completeness of the disputed information. Plaintiff states that she has properly alleged a claim against Sun Loan because she disputed the credit information which Sun Loan had furnished showing that the debt was charged off with a charge off balance of $684, a past due balance of $819, an outstanding balance of $684, and a negative charge off payment history reported from the date of filing of September 20, 2011 to the present. Plaintiff alleges that Sun Loan failed to take reasonable steps through its investigation to fully and completely correct the inaccurate information on her report. Thus, plaintiff alleges Sun Loan subjected itself to liability under the FCRA by failing to conduct a reasonable investigation.

         In Addie v. Ocwen Loan Servicing, LLC, No. 12-256(DWF/FLN), 2012 WL 2508024 (D.Minn. June 28, 2012), the Court noted that the language of 15 U.S.C. § 1681(a)(2) requires:

that a consumer reporting agency, upon receipt of notice of a dispute from a consumer, promptly notify a furnisher of information of the dispute. 15 U.S.C. §1681i (a)(2)(A). Thus, in order for Plaintiff to state a claim under section 1681s-2(b)(1) against Defendant (a furnisher of information), Plaintiff must allege that a credit reporting agency notified Defendant of the inaccurate information, and that the furnisher of information failed to take required action.

Id. at *3 (internal citations omitted). In Obarski Assoc. Recovery Sys., No. CIV. A. 13-6041JLL, 2014 WL 2119739 (D.N.J. May 20, 2014), the Court stated:

This Court has recognized that consumers have a private right of action to enforce a furnisher's duty to investigate. . . .Further, this Court has held that to state a claim under [§ 1681s-2(b)], a plaintiff must plead that (1) she sent notice of disputed information to a consumer reporting agency, (2) the consumer reporting agency then notified the defendant furnisher of the dispute, and (3) the furnisher failed to investigate and modify the inaccurate information. . . .Thus, § 1681s-2(b) provides consumers a cause of action against furnishers of information that receive notice of disputed ...

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