Ginnan v. Guaranteed Rate, Inc. et al
Filing
37
MEMORANDUM OPINION AND ORDER Signed by the Honorable Harry D. Leinenweber on 1/25/2016:Mailed notice(wp, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
PATRICK GINNAN,
Plaintiff,
Case No. 15 C 5813
v.
Judge Harry D. Leinenweber
GUARANTEED RATE, INC., and
EQUIFAX INFORMATION
SERVICES, INC.,
Defendants.
MEMORANDUM OPINION AND ORDER
Before the Court is Defendant Guaranteed Rate, Inc.’s (“GRI”)
Motion to Dismiss Count I of Plaintiff Patrick Ginnan’s (“Ginnan”)
Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) [ECF
No. 24].
For the reasons stated herein, GRI’s Motion is denied.
I.
BACKGROUND
The Court draws the following facts, which it accepts as true,
from Ginnan’s Complaint.
In 2003, Ginnan executed a mortgage in the
amount of $363,345.00 in favor of GRI (the “Mortgage Loan”), secured
by a property on North Bosworth Street in Chicago (the “Property”).
Approximately ten years later, on April 27, 2014, Ginnan filed a
Chapter 13 bankruptcy petition in the United States Bankruptcy Court
for the Northern District of Illinois, listing the Mortgage Loan as a
debt
secured
indicated
by
that
the
he
Property.
would
In
surrender
satisfaction of GRI’s claims.
his
the
Chapter
13
plan,
Property
to
GRI
in
Ginnan
full
The Bankruptcy Noticing Center served
GRI with a notice of Ginnan’s bankruptcy filing and Chapter 13 plan,
which the Bankruptcy Court subsequently confirmed.
The Bankruptcy Court later granted GRI’s Motion for Relief from
the automatic stay, so that GRI could proceed with foreclosure of the
Property.
On June 25, 2014, the Bankruptcy Court entered an order
discharging
all
Mortgage Loan.
Following
of
Ginnan’s
dischargeable
debts,
including
the
GRI was served with a copy of the discharge order.
the
discharge,
on
August
21,
2014,
Ginnan
sent
a
written credit dispute letter to Equifax, requesting that his credit
file be updated to reflect the zero balance and discharged status of
all accounts discharged in his bankruptcy.
Ginnan requested that
Equifax forward the letter, and attached bankruptcy filings, to “each
of
the
creditors
listed
in
[his]
schedules.”
responded by correcting some of Ginnan’s accounts.
Equifax
promptly
The GRI account,
however, still reported a balance of $362,809, nearly $50,000 past due
by 180 days, and a scheduled payment of more than $2,000.
On October 8, 2014, Ginnan sent a second written credit dispute
letter to Equifax, specifically disputing the GRI account.
Equifax promptly responded that it had updated the account.
Again,
However,
the GRI account continued to show the same $362,809 balance, past due
amount, and scheduled payment as before.
Ginnan filed the instant lawsuit against both GRI and Equifax on
June 30, 2015.
Count I, which applies to GRI only, alleges numerous
violations of Section 1681s–2(b) of the Fair Credit Reporting Act (the
“FCRA”),
including
GRI’s
failure
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to
investigate
the
disputed
information, report the results of any reasonable investigation, and
modify or delete inaccurate information.
II.
A
motion
Rule 12(b)(6)
to
dismiss
challenges
LEGAL STANDARD
for
the
failure
legal
to
state
sufficiency
a
of
claim
a
under
complaint.
Hallinan v. Fraternal Order of Chi. Lodge No. 7, 570 F.3d 811, 820
(7th Cir. 2009).
To survive a Rule 12(b)(6) motion to dismiss, a
complaint must contain “enough facts to state a claim to relief that
is plausible on its face.”
544, 570 (2007).
Bell Atlantic Corp. v. Twombly, 550 U.S.
When considering a Rule 12(b)(6) motion to dismiss,
a court must accept the plaintiff’s allegations as true, and view them
in the light most favorable to the plaintiff.
Camasta v. Jos. A. Bank
Clothiers, Inc., 761 F.3d 732, 736 (7th Cir. 2014) (citation omitted).
However,
a
court
need
not
accept
as
true
“legal
conclusions,
or
threadbare recitals of the elements of a cause of action, supported by
mere conclusory statements.”
Cir.
2009)
(quoting
Brooks v. Ross, 578 F.3d 574, 581 (7th
Ashcroft
v.
Iqbal,
556
U.S.
662,
678
(2009))
(internal quotations and alterations omitted).
III.
GRI argues that
ANALYSIS
Ginnan’s Complaint must be dismissed because
Ginnan has failed to allege that Equifax put GRI on notice of the
dispute or gave GRI any of the materials that Ginnan had submitted to
Equifax.
Ginnan contends that he has alleged Equifax gave notice to
GRI, and alternatively, that FCRA does not require him to plead this.
The
purpose
of
FCRA
is
to
ensure
that
“consumer
reporting
agencies [“CRA”] adopt reasonable procedures for meeting the needs of
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commerce
for
consumer
credit,
personnel,
insurance,
and
other
information 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
this goal, FCRA imposes certain duties on furnishers, the entities
that
transmit
consumer
information
to
CRAs.
Section
1681s–2(b)
provides that when a furnisher receives notice of a dispute regarding
the
accuracy
of
information
from
a
CRA,
it
must
investigate
the
dispute, review all relevant information the CRA provides, report the
results of its investigation to the CRA, and, if the information is
found
to
be
inaccurate
or
incomplete,
modify
or
delete
information and notify any other CRAs that received it.
§ 1681s–2(b)(1)(A)–(E).
that
15 U.S.C.
These duties arise “only after the furnisher
is notified pursuant to § 1681i(a)(2) by a consumer credit reporting
agency that a consumer challenges information.”
Rollins v. Peoples
Gas Light & Coke Co., 379 F.Supp.2d 964, 967 (N.D. Ill. 2005).
under
§
1681li(a)(2)
requires
the
CRA
to
supply
“all
Notice
relevant
information regarding the dispute that [it] has received from the
consumer.”
In Lang, the Seventh Circuit addressed whether a plaintiff must
allege
that
defendant.
a
liberal
a
CRA
provided
notice
of
a
dispute
to
a
furnisher-
The court held that no such allegation was required under
notice
pleading
standard.
F.App’x 464, 466 (7th Cir. 2007).
Lang
v.
TCF
Nat.
Bank,
249
The court also stated that because
“FCRA does not require a CRA to tell a consumer when it notifies a
furnisher of information about the consumer’s dispute,” a consumer may
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not be in a position to allege notification when filing his or her
complaint. Id.
Since Lang, however, “[t]he majority of other judges in this
district . . . have required plaintiffs to allege that defendants
received the requisite notice from credit reporting agencies in order
to survive the motion to dismiss stage.”
Neiman v. Chase Bank, USA,
N.A., No. 13 C 8944, 2014 WL 3705345, at *7 (N.D. Ill. July 25, 2014)
(collecting cases).
Departing from Lang, the court in Neiman reasoned
that because a complaint must include “sufficient facts to state a
claim for relief that is plausible on its face,” some allegation of
notice must be provided to show that a furnisher’s duties under FCRA
have been triggered.
consumers
to
find
Id.
out
The Court also noted that FCRA enables
whether
a
CRA
has
contacted
a
furnisher,
allowing plaintiffs to gather the facts needed to allege notification
without
formal
discovery.
Id.
(citing
Densmore
v.
Gen.
Motors
Acceptance Corp., No. 03 C 1866, 2003 WL 22220177, at *2 (N.D. Ill.
Sept. 25, 2003)); see, 15 U.S.C. § 1681i(a)(6)(B)(iii) (explaining
that upon request, consumers are entitled to receive “a description of
the procedure used to determine the accuracy and completeness of the
information . . . including the business name and address of any
furnisher of information contacted in connection with such information
and the telephone number of such furnisher”).
GRI
contends
that
Ginnan’s
Complaint
lacks
“any
allegations
showing that GRI received notice from Equifax in form and substance
sufficient to trigger any duties under the FCRA.”
No. 25, at 6.)
(GRI Mem., ECF
However, the Complaint states that GRI failed to
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conduct an investigation “after receiving multiple requests . . . from
Equifax
and
Ginnan,”
(Compl.
¶
43),
failed
to
review
information
“provided by Equifax and Ginnan,” (id. ¶¶ 44, 45), failed to report
the
results
of
its
investigation
to
Equifax
“after
being
put
on
notice,” (id. ¶ 48), failed to correct inaccurate information “within
30 days of receiving notice of a dispute from Equifax,” and otherwise
ignored “Equifax’s requests for investigation,” (id. ¶ 53).
Ginnan
also alleges that he asked Equifax to forward a copy of his dispute
letter and enclosed materials to GRI.
(See, Dispute Letters, Exs. H
and J to Pl.’s Compl., ECF Nos. 1-8 and 1-10.)
Although GRI characterizes these allegations as conclusory, the
Court finds that they are enough to set Ginnan’s Complaint apart from
others that courts in this District have dismissed for failure to
allege notification.
For instance, in Rollins, the plaintiff alleged
that the CRAs “did not communicate actual statements and documentation
submitted by plaintiff,” pleading himself out of court.
F.Supp.2d at 967.
Rollins, 379
In Pichugin, the Court dismissed the plaintiff’s
complaint where there was no allegation that the furnisher “received a
formal notification from the credit agency.”
Pichugin v. Experian
Info. Sols., Inc., No. 11 CV 04375, 2012 WL 527529, at *3 (N.D. Ill.
Feb. 15, 2012).
Similarly, in Neiman, the plaintiffs never alleged
that the CRA notified the furnisher, Chase, only that “they demanded
[CRAs]
delete
all
allegedly
incorrect
Neiman, 2014 WL 3705345, at *6.
information
Chase
provided.”
The court dismissed the § 1681s–2(b)
claims without prejudice, permitting plaintiffs to make allegations
that “any credit reporting agency notified Chase.”
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Id at *8.
Here,
Ginnan’s allegations of notice are also made more plausible by his
claim that he asked Equifax to contact GRI and provide it with a copy
of his dispute letters and related materials.
While it is true that FCRA enables consumers to find out which,
if any, furnishers a CRA notified, the statute does not impose a duty
on
plaintiffs
to
formally
filing a complaint.
investigate
the
CRA’s
procedures
See, Varnado v. Trans Union, LLC, No. 03 C 6937,
2004 WL 1093488, at *3 (N.D. Ill. Apr. 29, 2004).
cautioned,
a
before
plaintiff’s
failure
to
pursue
this
As one court
“easy
avenue”
of
investigation might subject him to sanctions later on if his claim is
baseless, but it is no reason to dismiss the complaint.
IV.
For
the
reasons
stated
See, id.
CONCLUSION
herein,
GRI’s
Motion
to
Dismiss
ECF
No. 24] is denied.
IT IS SO ORDERED.
Harry D. Leinenweber, Judge
United States District Court
Dated:1/25/2016
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