Lacey v. TransUnion, LLC et al, No. 8:2021cv00519 - Document 35 (M.D. Fla. 2021)
Court Description: ORDER granting 18 Motion to Dismiss for Failure to State a Claim; granting 19 Motion to Dismiss, in accordance with the attached order. The clerk is directed to close this case. Signed by Judge William F. Jung on 7/12/2021. (CCM)
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Lacey v. TransUnion, LLC et al Doc. 35 UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION CRISTINA LACEY, Plaintiff, v. Case No. 8:21-cv-519-02-JSS TRANSUNION, LLC; WELLS FARGO BANK, N.A. d/b/a WELLS FARGO HOME MORTGAGE; Defendants. _____________________________________/ ORDER GRANTING DISMISSAL WITH PREJUDICE Plaintiff Cristina Lacey sues Defendants TransUnion LLC and Wells Fargo Mortgage under the Fair Credit Reporting Act (“FCRA”). Before the Court today are the Defendants’ Motions to Dismiss, Dkts. 18 and 19; Plaintiff’s responses, Dkts. 20 and 30; and TransUnion’s reply, Dkt. 23. Defendants argue Plaintiff has failed to state a claim under Fed. R. Civ. P. 12(b)(6) because the credit report is factually accurate. The credit report at issue in this case is attached as an Appendix at the end of this opinion. After reviewing these motions, the case record, and the opposition briefs filed by Plaintiff, the Court grants the motions and dismisses Plaintiff’s Complaint with prejudice because the credit report is not materially misleading. In short, although Dockets.Justia.com Defendant Wells Fargo furnished derogatory information about Plaintiff and Defendant TransUnion then used the derogatory information in the credit report, this information was factually accurate. The credit report is therefore materially accurate to any reasonable commercial reader, and it is not “nonsensical and illogical” to the point of inaccuracy as Plaintiff contends. BACKGROUND Plaintiff has experienced credit problems. Her credit report during the relevant period shows more adverse accounts than satisfactory accounts. That report, which Plaintiff comments upon and does not object to the undersigned considering (at least as to TransUnion), is attached to this Order.1 See Appendix. Plaintiff does not contend the report is unauthentic, and it is properly verified. Dkt. 18-1. 1 This entire suit is about Plaintiff’s credit report. But Plaintiff did not attach the report to her Complaint. Instead, TransUnion provided the credit report in its Motion to Dismiss. Dkt. 182. In responding to TransUnion, Plaintiff does not object to the Court considering the credit report, and Plaintiff commented on the report without objection in Plaintiff’s response to TransUnion’s motion. Dkt. 20 at 6. In her response to Wells Fargo’s motion, Plaintiff comments on the credit report but then suggests it would be inappropriate for the Court to consider the report as to Wells Fargo because Wells Fargo did not append a copy of the report to its Motion to Dismiss. Dkt. 30 at 13–14. Plaintiff also argues that it would not be appropriate to consider the credit report at this stage because a fuller record should first be developed, such as from the automated credit dispute verification form. See Dkt. 30 at 13–14. The Court denies Plaintiff’s arguments. The Court may consider a document attached to a motion to dismiss if the attached document is central to the plaintiff’s claims and is undisputed. See Day v. Taylor, 400 F.3d 1272, 1276 (11th Cir. 2005) (citing Horsley v. Feldt, 304 F.3d 1125, 1134 (11th Cir. 2002)). Here, Plaintiff’s credit report is central to her claims, and it is the essence of her Complaint. Plaintiff does not contend that her credit report at Dkt. 18-2 is unauthentic. The Court can therefore consider the report when deciding the Motions to Dismiss. 2 The relevant entry of which Plaintiff complains is found on the sixth page. See Appendix at 6. That entry for Wells Fargo Home Mortgage shows Plaintiff opened her mortgage account with Wells Fargo on March 19, 2009. Id. The account closed on August 7, 2015—the same day the report was last updated. Id. The balance is shown at $0. The remarks state “FORECLOSURE COLLATERAL SOLD,” which explains why the account was closed and why there is zero balance. The payment history shows monthly payments for the period leading up to closure. This history shows that Plaintiff fell 60 days in arrears in November 2013, but by March 2014 had gotten current. See Appendix at 6. She then stayed current for five months. Regrettably, she was 30 days late in August 2014, and fell to 60 days late the next month. This delinquency continued, and by March 2015 she fell 90 days late. She corrected it to 60 days late in April 2015. The report states that she made her last mortgage payment on April 2, 2015. Unfortunately, by then she stopped paying entirely. In June 2015, she was 120 days in arrears. The last reported month was July 2015, during which she was 120 days late. The account then closed the first week in August 2015. The credit report notes that her maximum delinquency of 120 days as shown in June and August of 2015. If one counts the time from her last payment made until the account closure, it is approximately 120 days. This payment history, the closure of the account, and the foreclosure are entirely accurate and not in dispute. See Appendix at 6. The report 3 states that the estimated time and month that this item will be removed from Ms. Lacey’s credit history is June 2021. What Plaintiff disputes, and what Plaintiff asserts creates the cause of action, is one line that states: “Pay Status: account 120 Days Past Due Date.” See id. Plaintiff alleges in her Complaint that although the trade line currently reflects a $0 balance: Listing a debt with a $0 balance owed as “120-149 days past due” is nonsensical. If no balance is owed, the consumer cannot be late paying that balance. By continuing to report the account in that fashion, lenders believe the consumer is currently late negatively reflecting on the consumers credit worthiness by impacting the credit score negatively. Dkt. 1 at ¶ 15. Plaintiff notified TransUnion in August 2020 that she disputed the accuracy of this information. Id. at ¶ 17. She avers that TransUnion notified Defendant Wells Fargo of this dispute. Id. at ¶ 18. According to Plaintiff, had Wells Fargo done a proper investigation, it would have discovered that the payment status was being inaccurately reported by TransUnion. Id. at ¶ 20. As a result of this inaccurate and uncorrected reporting, Plaintiff states she has suffered damage by loss of credit, an impaired ability to purchase and benefit from credit, a chilling effect upon applications for future credit, mental and emotional pain, anguish, and humiliation and embarrassment of credit denial. Id. at ¶ 26. However, Plaintiff does not contend any specific creditor relied upon these entries to her detriment, 4 nor does she cite any specific injury due to this adverse report—one of multiple adverse reports for her. In Count I, Plaintiff sues TransUnion for willfully violating 15 U.S.C. § 1681(e) and (n) of the FCRA. She alleges TransUnion willfully and recklessly failed to follow proper credit data ascertainment and accurate reporting, as required by the statute. She also alleges TransUnion failed to note in the credit report that she disputed the accuracy of the information, and that TransUnion failed to delete the information once it was called to the company’s attention. In Count II, Plaintiff sues TransUnion for negligent violation of the FCRA with basically the same faults and omissions listed in Count I. In Counts III and IV, Plaintiff sues Well Fargo as the furnisher of the faulty credit information, alleging various failures under the FCRA to properly furnish accurate information, investigate disputes, and correct matters found to be furnished in error. Counts III and IV seek remedies for willful/reckless and negligent violations, respectively. As to all counts, Plaintiff seeks actual and statutory damages and attorneys’ fees. She seeks punitive damages as to Counts I and III. Both defendants now move for dismissal of Plaintiff’s claims under Rule 12(b)(6). 5 LEGAL STANDARD A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief,” Fed. R. Civ. P. 8(a), set forth in “numbered paragraphs each limited as far as practicable to a single set of circumstances,” Fed. R. Civ. P. 10(b). Thus, to survive a Rule 12(b)(6) motion to dismiss, the complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Courts must also view the complaint in the light most favorable to the plaintiff and resolve any doubts as to the sufficiency of the complaint in the plaintiff’s favor. Hunnings v. Texaco, Inc., 29 F.3d 1480, 1484 (11th Cir. 1994) (per curiam). A claim is plausible on its face “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. The Court accepts the plaintiff’s factual allegations as true at this stage. Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1369 (11th Cir. 1997). LEGAL ANALYSIS Plaintiff’s claims under 15 U.S.C. 1681e(b) and 1681(i) require her to plead and prove an inaccuracy in her credit report or credit file. Cahlin v. Gen. Motors Acceptance Corp., 935 F.2d 1151, 1156–1560 (11th Cir. 1991); Ray v. Equifax 6 Info. Servs., LLC, 327 F. App’x 819, 826 (11th Cir. 2009). Plaintiff attempts to do so by stating in a conclusory fashion that the TransUnion credit report is inaccurate. However, this contention runs into the Supreme Court’s admonition that a legal conclusion, including one couched as a factual allegation, need not be accepted as true on a motion to dismiss. See Papasan v. Allain, 478 U.S. 265, 286 (1986). Moreover, factual allegations that are merely consistent with the Defendants’ liability do not satisfy the Plaintiff’s burden, as mere consistency does not establish plausibility of entitlement to relief even if it supports the possibility of relief. See Iqbal, 556 U.S. at 678. Thus, Plaintiff Lacey must provide more than labels and conclusions to state her claim. See Twombly, 550 U.S. at 555. “The FCRA seeks to ensure ‘fair and accurate credit reporting.’” Spokeo Inc. v. Robins, 136 S. Ct. 1540, 1545 (2016) (quoting § 1681(a)(1)). “Under section 607(b) of the Act, a credit reporting agency, when preparing a credit report on a consumer, is required to ‘follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.’” Cahlin, 936 F.2d at 1156 (quoting § 1681e(b)). The maximum possible accuracy standard requires that the report “be both factually correct and free from potential for misunderstanding.” Erickson v. First Advantage Background Servs., 981 F.3d 1246, 1248 (11th Cir. 2020); see also id. at 1252 (“[T]o reach ‘maximum possible accuracy,’ information must be factually true and 7 also unlikely to lead to a misunderstanding.”). The Eleventh Circuit stated in Erickson: [W]hether a report is misleading is an objective measure, one that should be interpreted in an evenhanded manner toward the interests of both consumers and potential creditors in fair and accurate credit reporting. So when evaluating whether a report is accurate [under the FCRA], we look to the objectively reasonable interpretations of the report. If a report is so misleading that it is objectively likely to cause the intended user to take adverse action against its subject, it is not maximally accurate. On the other hand, the fact that some user somewhere could possibility squint at a report and imagine a reason to think twice about its subject would not render the report objectively misleading. Id. (cleaned up) (emphasis added). The Court earlier stated in Cahlin: Although a credit reporting agency has a duty to make a reasonable effort to report ‘accurate’ information on a consumer’s credit history, it has no duty to report only that information which is favorable or beneficial to the consumer. Congress enacted FCRA with the goals of ensuring that such agencies imposed procedures that were not only ‘fair and equitable to the consumer,’ but that also met the ‘needs of commerce’ for accurate credit reporting. Indeed, the very economic purpose for credit reporting companies would be significantly vitiated if they shaded every credit history in their files in the best possible light for the consumer. 936 F.2d at 1158 (emphasis added). Therefore, in determining whether a credit report is both true and unlikely to lead to misunderstanding, the report must be reviewed and considered in its entirety, instead of focusing on a single field of data. See, e.g., Erickson, 981 F.3d at 1252 (user must look at the credit report objectively and not merely “squint” at one portion); see also Meeks v. Equifax Info. Servs., LLC, No. 1:18-CV-036668 TWT-WEJ, 2019 WL 1856411, at *6 (N.D. Ga. Mar. 4, 2019) (must view account “as a whole”), adopted 2019 WL 1856412 (N.D. Ga. Apr. 23, 2019); Gibson v. Equifax Info. Servs., LLC, No. 5:18-cv-00465-TES, 2019 WL 4731957, at *4 (M.D. Ga. July 2, 2019) (quoting Meeks and holding same); Seay v. TransUnion LLC, No. 7:18-CV-204(HL), 2019 WL 4773827, at *5 (M.D. Ga. Sept. 30, 2019) (quoting Meeks and holding same); Her v. Equifax Info. Servs., LLC, No. 1:18-CV5182-CC-RGV, 2019 WL 4295279, at *2 (N.D. Ga. Aug. 9, 2019) (must consider “entirety” of the credit report to determine if the information is inaccurate or misleading). With these principals in mind, a review of the credit report in the Appendix shows that as a whole it is not inaccurate. One must parse and squint, and consider only the pay status line, to arrive near the conclusion urged by Plaintiff. A recent case nearly identical to this one, with the same TransUnion reporting form, is Settles v. TransUnion LLC, No. 3:20-cv-00084, 2020 WL 6900302 (M.D. Tenn. Nov. 24, 2020). There, the District Judge held: The Court finds that the reported information, taken as a whole, is neither inaccurate nor materially misleading. The report provides payment history showing that Plaintiff was at least 120 days late each month from May 2013 to January 2014, states that the account was closed in February 2014, and does not provide any account payment information past that date. Plaintiff admits that he never brought the account current – instead, he defaulted, and the account was closed while it was more than 120 days past due. Reporting a ‘pay status’ as ‘120 past due date’ in these circumstances would not reasonably mislead a creditor to believe Plaintiff is currently past due on this loan. 9 Id. at *4. The Settles Court also noted that, “[i]n fact, reporting a pay status of ‘current’ or ‘paid as agreed’ as advocated by Plaintiff could imply that Plaintiff fulfilled his loan obligations by paying the loan in full when he actually defaulted.” Id. The logic of Settles applies here to this same reporting form. Plaintiff Lacey left her Wells Fargo loan in foreclosure, closed out and written off to zero at 120 days overdue. To represent otherwise would be misleading. And the last time Lacey’s credit report was updated—on August 7, 2015—she was 120 days in arrears, having made her final payment as shown on April 7, 2015. No reasonable commercial reader would read this report five years later and conclude that a “foreclosure/collateral sold” with a zero balance in 2015 means the loan is currently extant, or that Plaintiff “is currently delinquent on their account,” as Plaintiff argues. Dkt. 30 at 1–2. Another case similar to Settles and favoring the defendants here is Williams v. TransUnion, LLC, No. 1:19-cv-01896-TWT-CMS, 2019 WL 11502906 (N.D. Ga. Oct. 23, 2019). In that case, the Court was presented with the very same issue as here: an old account closed in arrears, showing no balance due to being “charged off,” and listing payment terms as “$67 per month, paid [m]onthly for 6 months[.]” Id. at *3. Just as here, the Williams Court concluded: 10 When viewed as a whole, TransUnion’s reporting . . . reflects that no ongoing monthly payment obligations exist . . . The account is unambiguously reported as closed, charged off . . . with no current payments being made and with a $0.00 balance . . . To the extent the $67.00 amount appears within the account information reported, that amount is being reported as historical account information . . . ‘[which] neither causes confusion nor creates an inaccuracy,’ and Plaintiff’s ‘subjective belief that [her] credit report was inaccurate is insufficient’ to support a claim under the FCRA. Id. Settles and Williams are well-reasoned and apply here. Other cases are in accord. See Gross v. Private Nat’l Mortg. Acceptance Co., LLC, No. 20-cv-4192 (BMC), 2021 WL 81465, at *7–8 (E.D.N.Y. Jan. 9, 2021) (holding that TransUnion report showing “pay status” of “30 days past due” is not inaccurate or misleading and stating: “[i]f a creditor read the ‘Pay Status’ entry in isolation, the creditor might conclude that the account was currently past due. But when the creditor read the rest of the entries, the creditor would surely forego that conclusion”); Samoura v. TransUnion LLC, No. 20-5178, 2021 WL 915723 (E.D. Pa. Mar. 10, 2021); see also Hernandez v. TransUnion LLC, No: 3:19cv1987RV/EMT, 2020 WL 8368221 (N.D. Fla Dec. 10, 2020).2 2 See also, e.g., Jones v. Equifax Info. Servs., LLC, No. 2:18-cv-2814-JPM-cgc, 2019 WL 5872516 (M.D. Tenn. Aug. 8, 2019); Thomas v. Equifax Info. Servs., LLC, No. 3:19-cv-286, 2020 WL 1987949 (S.D. Ohio Apr. 27, 2020); Euring v. Equifax Info. Servs., LLC, No. 19-CV11675, 2020 WL 1508344 (E.D. Mich. Mar. 30, 2020). 11 In Hernandez, Judge Vinson said: “no reasonable creditor looking at the report would be misled into believ[ing] that the plaintiff was ‘still late’ on the account.” Id. at *3. Judge Vinson noted that the report must be viewed in its entirety, not just one field. Id. That is a mistake Plaintiff Lacey makes here and she falls into the same error that befell Plaintiff Hernandez. Any reasonable lender viewing this report will not be confused as Plaintiff contends, and Plaintiff does not claim any actual confusion. Thus, when Plaintiff Lacey’s credit report is viewed in its entirety, it is clear that it was accurately reported and is not misleading. On its face, the credit report reflects that as of August 7, 2015, the account: (1) had a balance of $0; (2) was last updated on August 7, 2015; (3) was closed on that same date; (4) was 120 days past due from June 2015 through August 7, 2015; and (5) was foreclosed with collateral sale. Objectively, no reasonable creditor looking at the report would be misled into believing that Plaintiff Lacey had a present pending amount due. Because the text of the credit report is not in dispute, and it is derogatory but is not materially inaccurate, amendment of these claims is futile. Because Plaintiff cannot establish inaccuracy or falsehood in this report, the Court dismisses Plaintiff’s claims with prejudice. See Hall v. United Ins. Co. of Am., 367 F.3d 1255, 1262–63 (11th Cir. 2004) (stating that a court may properly deny leave to amend when such amendment would be futile). 12 CONCLUSION Defendants TransUnion’s and Wells Fargo’s Motions to Dismiss, Dkts. 18 and 19, are GRANTED WITH PREJUDICE. The clerk is directed to close this file. DONE AND ORDERED at Tampa, Florida, on July 8, 2021. /s/ William F. Jung WILLIAM F. JUNG UNITED STATES DISTRICT JUDGE COPIES FURNISHED TO: Counsel of Record 13 APPENDIX 15 16 17 18 19 20 21 22 23
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