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Bruner v. Midland Funding, LLC

United States District Court, W.D. Oklahoma

June 23, 2017

DANNIELLE BRUNER, Plaintiff,
v.
MIDLAND FUNDING, LLC, Defendants.

          ORDER

          TIMOTHY D. DeGIUSTI UNITED STATES DISTRICT JUDGE.

         Before the Court is Defendants Midland Funding, LLC's and Midland Credit Management, Inc.'s Motion to Dismiss Amended Complaint [Doc. No. 31], filed pursuant to Fed.R.Civ.P. 12(b)(6). The movants assert that Plaintiff has failed to allege sufficient facts in her Amended Complaint to state a claim against them under the Fair Credit Reporting Act, 15 U.S.C. §§ 1681-1681x, or the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692-1692p. They contend Plaintiff simply recites the language of the statutes in a formulaic manner and fails to provide factual allegations from which liability under either statute could reasonably be inferred.

         Standard of Decision

         “To survive a motion to dismiss [under Rule 12(b)(6)], a 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 Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008). “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.” Iqbal, 556 U.S. at 678. “[W]here the well-pleaded facts do not permit the court to infer more than the possibility of misconduct, the complaint has alleged - but it has not ‘show[n]' - ‘that the pleader is entitled to relief.'” Id. at 679 (quoting Fed.R.Civ.P. 8(a)(2)). Thus, in assessing plausibility, a court should first disregard conclusory allegations and “next consider the factual allegations in [the] complaint to determine if they plausibly suggest an entitlement to relief.” Id. at 681.

         Plaintiff's Allegations

         Plaintiff brings suit against seven defendants for conduct regarding a consumer debt that allegedly was a result of identity theft: Midland Funding, LLC and Midland Credit Management, Inc. (collectively, “Midland”); their alleged parent company, Encore Capital Group, Inc.; three consumer reporting agencies - TransUnion LLC, Experian Information Solutions, Inc. and Equifax Information Services LLC; and a lender, Credit One Bank. Plaintiff states she discovered the fraudulent account when she obtained a copy of her consumer report from each of the consumer reporting agencies on June 21, 2016, and learned that the reports showed a charge-off of a $400.00 credit card debt to Credit One Bank. Plaintiff alleges this item is inaccurate and false in that she never had a credit account with Credit One Bank.

         Accepting the allegations of the Amended Complaint as true, Plaintiff notified each of the consumer reporting agencies by letters sent on June 22, 2016, that she disputed the alleged debt to Credit One Bank listed on her consumer reports (the “Debt”). On July 6, 2016, Plaintiff received debt collection letters from Midland regarding the Debt. On August 2, 2016, Plaintiff sent letters to Midland and Credit One Bank disputing the Debt and disputing the accuracy of the information regarding the Debt in her consumer reports. On August 2, 2016, Plaintiff also sent letters to each of the consumer reporting agencies disputing the accuracy of her consumer reports regarding the Debt. On September 22, 2016, Plaintiff sent each defendant another letter informing them that information they had provided to Plaintiff was insufficient.[1] Plaintiff asked Midland and Credit One Bank to submit requests to the consumer reporting agencies instructing them to delete the Debt from her consumer reports.

         As to the alleged misconduct of Midland, Plaintiff states that after Midland received notice of Plaintiff's dispute of the Debt, Midland “failed to conduct an investigation with respect to the disputed information;” “failed to review all relevant information provided by Equifax, Experian, and TransUnion;” “failed to report true and correct results of the investigation to Equifax, Experian, and TransUnion;” “failed to find that the alleged debt disputed by Plaintiff was inaccurate and report those results to Equifax, Experian, and TransUnion and all other consumer reporting agencies;” and “failed to find the alleged debt disputed by Plaintiff [w]as inaccurate or unverifiable and failed to submit a request to Equifax, Experian, and TransUnion to delete the item and permanent[ly] block the reporting of the alleged debt to Equifax, Experian, and TransUnion.” See Am. Compl. [Doc. No. 27], ¶¶ 152-56. Plaintiff states upon information and belief that “Equifax, Experian, and TransUnion communicated some or all of Plaintiff s dispute information to Midland” and that Midland “verified to Equifax, Experian, and TransUnion that Plaintiff was liable for the alleged debt that she disputed, and that the amount remained due and owing, and verified the date of delinquency.” Id., ¶¶ 157-58.

         Further, Plaintiff notified Midland “in writing within the thirty-day period of Plaintiffs receipt of the initial communication from Midland . . . that the alleged debt was disputed, but Midland . . . failed to cease collection of the alleged debt until it obtained verification of the alleged debt and mailing the same to Plaintiff” Id. ¶ 159. Midland also “failed to provide verification of the alleged debt to Plaintiff as per Plaintiffs request in writing.” Id. ¶ 160. Plaintiff alleges that she was injured and suffered actual damages “[a]s a result of the actions and inactions of Defendants.” Id. ¶ 161.

         In Counts 17 through 31 of the Amended Complaint, Plaintiff claims Midland's conduct violated all provisions of 15 U.S.C. § 1681s-2(b)(1) - enumerating a separate claim for each of subparagraphs (A)-(E) as to an unnamed consumer reporting agency (Counts 17-21), Equifax (Counts 22-26), and Experian (Counts 27-31). In Count 52, Plaintiff claims Midland violated 15 U.S.C. § 1692g(b).

         Discussion

         A. FCRA Claims

         The Fair Credit Reporting Act (“FCRA”) provides a consumer with a private right of action against a person who furnishes credit information to consumer reporting agencies if the furnisher violates a statutory duty imposed by Section 1681s-2(b)(1). These duties arise when a furnisher of information receives notice of a dispute from a consumer reporting agency. See 15 U.S.C. § 1681s-2(b)(1); see also Sanders v. Mountain Am. Fed. Credit Union, 689 F.3d 1138, 1147 (10th Cir. 2012). Pinson v. Equifax Credit Info. Servs., Inc., 316 F. App'x 744, 751 (10th Cir. 2009) (“notice of a dispute received directly from the consumer does not trigger furnishers' duties under subsection (b)”) (internal quotation and emphasis omitted). As explained by the Tenth Circuit: “While Congress did not want furnishers of credit information to be exposed to suit by any and every consumer dissatisfied with the credit information furnished, Congress allows consumers to enforce the duty of accurate reporting through the FCRA's dispute process.” Sanders, 689 F.3d at 1147 (internal quotation omitted).[2]

         Midland agrees it is a furnisher of credit information and Plaintiff allegedly sent letters to consumer reporting agencies disputing the Debt and the accuracy of her credit reports regarding it. Midland asserts, however, that Plaintiff provides insufficient facts from which to reasonably conclude that Midland failed to perform a duty imposed by Section 1681s-2(b)(1)(A)-(E). Specifically, Subsection A required Midland to conduct a reasonable investigation regarding the disputed information; what is reasonable depends on the information provided by the consumer reporting agency in the notice of the dispute. See Maiteki v. Marten Trans. Ltd., 828 F.3d 1272, 1275 (10th Cir. 2016). Similarly, Subsections B and C required Midland to review all relevant information provided by a consumer reporting agency and report the results of the investigation to the agency. Because Plaintiff does not allege what ...


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