RADLEY v. EXPERIAN INFORMATION SOLUTIONS, INC, et al

Filing 43

MEMORANDUM OPINION. Signed by Judge Jerome B. Simandle on 6/29/18. (dd, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

MARINA RADLEY,
Plaintiff,

HONORABLE JEROME B. SIMANDLE

v.
EXPERIAN INFORMATION
SOLUTIONS, INC.; EQUIFAX
INFORMATION SERVICES LLC; AND
ROUNDPOINT MORTGAGE COMPANY,

Civil Action
No. 1:17-CV-02755 (JBS/JS)

MEMORANDUM OPINION

Defendants.

SIMANDLE, District Judge:
Plaintiff Marina Radley (“Plaintiff”) brings this action
against credit reporting agencies, Equifax Information Services,
LLC (“Defendant Equifax”) and Experian Information Solutions,
Inc. (collectively, “the CRAs”), as well as RoundPoint Mortgage
Servicing Corporation (“Defendant RoundPoint” or “RoundPoint”),
for violations of the Fair Credit Reporting Act, 15 U.S.C.
§ 1681 et seq. (“FCRA”) and the Fair Debt Collection Practices
Act § 1692 et seq. [Docket Item 1, Compl., ¶ 1.]
Specifically, Plaintiff alleges that Defendant Equifax is
liable under Sections 1681n and 1681o of the FCRA for willfully
and negligently failing to comply with the requirements pursuant
to Sections 1681e(b) and 1681i(a) (Count One). Before the Court
is Defendant Equifax’s Motion for Judgement on the Pleadings

pursuant to Fed. R. Civ. P. 12(c), as well as Plaintiff’s First
Motion to Amend/Correct the Complaint [Docket Item 36].
The principal issue to be decided is whether Plaintiff has
alleged (or now seeks to allege) sufficiently supportive factual
grounds to plead a CRA’s violation of the FCRA under 15 U.S.C. §
1681e(b) and 1681i(a), where the alleged inaccurate information
reported by the CRA was technically correct but may nevertheless
be “inaccurate” pursuant to the FCRA.
For the reasons that follow, Defendant Equifax’s Motion for
Judgement on the Pleadings will be denied and Plaintiff’s Motion
to Amend the Complaint will be granted. The Court finds as
follows:
1. Factual and Procedural Background. Plaintiff, a New
Jersey resident, filed a complaint with this Court on April 21,
2017 alleging that Defendants were reporting inaccurate
information relating to Plaintiff and her credit history “from
at least November 2013.” [Docket Item 1, ¶¶ 7-8.] Plaintiff
contends this inaccurate information includes a mortgage with
RoundPoint that is her ex-husband’s responsibility, and
“consists of accounts and/or tradelines that do not belong to
the Plaintiff.” (Id. ¶¶ 9-10.)

Plaintiff further alleges the

inaccurate information negatively reflects upon Plaintiff’s
repayment history, financial responsibility as a debtor, and
credit-worthiness. (Id. ¶ 10.) She asserts that she disputed
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this information with all named Defendants, including Defendant
Equifax, but that none of the Defendants engaged in any
reasonable investigation or any investigation at all. (Id. ¶¶
12-13.) As a result, Plaintiff claims actual damages. (Id. ¶¶
15-17.)
2.

The

Proposed

Amended

Complaint

[Docket

Item

36-3

(“PAC”); a version of the PAC indicating in what respect it differs
from the original Complaint was filed pursuant to L. Civ. R. 15.1
and appears at Docket Item 38-1] alleges that “Defendants have
been

reporting

derogatory

and

inaccurate

statements

and

information relating to Plaintiff and Plaintiff’s credit history
to third parties . . . from at least November 2013 through the
present” (id. ¶ 8); that the “inaccurate information includes, but
is not limited to, a mortgage with RMC for a home that was jointly
owned by Ms. Radley and her ex-husband” (id. ¶ 9); that the
Superior Court of New Jersey dissolved their marriage on November
19, 2013, whereupon Plaintiff and her ex-husband “entered into a
property settlement agreement where Plaintiff’s ex-husband would
take owenership of their jointly owned home and indemnify Plaintiff
against

liability

subsequently

for

“executed

mortgage
a

payments”

quitclaim

deed

and

that

conveying

Plaintiff
the

home

completely to her ex-husband,” retaining no current ownership
interest

in

the

house

(id.

¶¶

10-13);

that

“Defendants

are

inaccurately reporting information relating to the RMC mortgage,
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including,
Plaintiff’s

but

not

limited

conveyance

of

to

the

omitting

home

to

details

her

regarding

ex-husband,

the

indemnification provision in the property settlement agreement or
the divorce decree” and contends that this inaccurate information
“misrepresents Plaintiff’s financial responsibility as a debtor
and Plaintiff’s credit worthiness” (id. ¶¶ 14); that “Defendants
have

been

reporting

the

inaccurate

information

through

the

issuance of false and inaccurate credit information and consumer
credit reports[,]” notwithstanding that “Plaintiff has disputed
the accuracy of the RMC mortgage . . . numerous times” with both
CRAs (id. ¶¶ 15-17); that the CRAs notified RMC of the dispute,
and that Plaintiff also disputed the accuracy of the RMC mortgage
directly to RMC (id. ¶¶ 18-19); that the Defendants nevertheless
continued to inaccurately report the RMC mortgage and did not
include any information within the trade line” relating to the
other circumstances described above (id. ¶ 20); that RoundPoint
either failed to notify Equifax to mark that trade line as having
been disputed, or Equifax failed to so mark at after RoundPoint
notified it that it was disputed, rendering that trade line
“further inaccurate” (id. ¶ 21); that the CRAs either engaged in
no investigation or did not engage in a reasonable investigation
(id. ¶ 22); that Defendants knew or should have known that their
actions violated the FCRA (id. ¶ 23); and that Plaintiff has
suffered damages by being denied for various loans and extensions
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of consumer credit as a result of the inaccurate information on
her credit reports, as well as by losing credit opportunities, and
by suffering “informational harm, credit defamation and emotional
distress” (id. ¶¶ 24-26).
3. In Count One of Plaintiff’s complaint, she alleges
Defendant Equifax violated FCRA at §§ 1681n and 1681o by engaging
in the following conduct:
a. “willfully
requirements

and

negligently

imposed

on

a

failing
consumer

to

comply

reporting

with

the

agency

of

information pursuant to 15 U.S.C. § 1681e(b) and 15 U.S.C.
§ 1681i(a)”
[Docket Item 1 ¶ 24.] The PAC repeats this Count verbatim. PAC
Paras 29-34.
4. Defendant RoundPoint filed a motion to dismiss [Docket
Item 17]; that motion was granted on alternative grounds, and so
the Court did not reach RoundPoint’s argument that the alleged
information was not inaccurate as a matter of law. Radley v.
Experian Info. Sols., Inc., No. 1:17-CV-02755 (JBS/JS), 2018 WL
1513576, at *3 (D.N.J. Mar. 26, 2018) [Docket Item 34].
Subsequent to RoundPoint’s motion, Defendant Equifax filed the
instant motion for judgment on the pleadings pursuant to
F.R.C.P. 12(c), incorporating the argument the Court did not
reach in the prior motion of Defendant RoundPoint. [Docket Item
24.] Plaintiff filed a Response [Docket Item 25] and Defendant
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Equifax filed a Reply [Docket Item 26]. Plaintiff then, with
permission of the Court, filed a Sur-reply. [Docket Item 31.]
5.

In response to the Court’s previous Memorandum Opinion

granting without prejudice RoundPoint’s motion to dismiss,
Plaintiff filed the instant Motion to Amend/Correct Plaintiff’s
Complaint [Docket Item 36], which RoundPoint did not oppose
[Docket Item 38 at 1]; Equifax filed a response in opposition
[Docket Item 40], and Plaintiff filed a reply [Docket Item 42].
6. Standard of Review.

Under Federal Rule of Civil

Procedure 12(c), “[a]fter the pleadings are closed--but early
enough not to delay trial--a party may move for judgment on the
pleadings.” Pursuant to Rule 8(a)(2), Fed. R. Civ. P., a
complaint need only contain “a short and plain statement of the
claim showing that the pleader is entitled to relief.” Specific
facts are not required, and “the statement need only ‘give the
defendant fair notice of what the . . . claim is and the grounds
upon which it rests.’” Erickson v. Pardus, 551 U.S. 89, 93
(2007)(citations omitted).

While a complaint is not required to

contain detailed factual allegations, the plaintiff must provide
the “grounds” of his “entitle[ment] to relief”, which requires
more than mere labels and conclusions. Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 555 (2007).
7. When addressing a Rule 12(c) motion, the court applies

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“the same standards as under Rule 12(b)(6).” Turbe v. Gov’t of
V.I., 938 F.2d 427, 428 (3d Cir. 1991). A motion to dismiss
under Rule 12(b)(6), Fed. R. Civ. P., may be granted only if,
accepting all well-pleaded allegations in the complaint as true
and viewing them in the light most favorable to the plaintiff, a
court concludes that the plaintiff failed to set forth fair
notice of what the claim is and the grounds upon which it rests.
Id.

A complaint will survive a motion to dismiss if it contains

sufficient factual matter to “state a claim to relief that is
plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 663
(2009).

Although a court must accept as true all factual

allegations in a complaint, that tenet is “inapplicable to legal
conclusions,” and “[a] pleading that offers labels and
conclusions or a formulaic recitation of the elements of a cause
of action will not do.” Id. at 678.
8.

A motion for leave to amend the complaint is addressed

under Rule 15(a)(2), and leave should be freely given when
justice so requires.
9. Discussion. Defendant Equifax argues that Plaintiff’s
claim fails to plead facts sufficient to establish a claim under
the FCRA because the alleged inaccurate account information was,
in fact, accurate.
10.

A plaintiff pleads a violation of § 1681e by a CRA
when
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she alleges (with properly supportive factual allegations) the
following elements: “(1) inaccurate information was included in
a consumer's credit report; (2) the inaccuracy was due to the
defendant's failure to follow reasonable procedures to assure
maximum possible accuracy; (3) the consumer suffered injury; and
(4) the consumer's injury was caused by the inclusion of the
inaccurate entry.” Cortez v. Trans Union, LLC, 617 F.3d 688, 708
(3d Cir. 2010)
11.

Under § 1681e(b), pursuant to which Plaintiff brings

Count One, a CRA must report information with maximum possible
accuracy. Id.; 15 U.S.C. § 1681e(b) (“Whenever a consumer
reporting agency prepares a consumer report it shall follow
reasonable procedures to assure maximum possible accuracy of the
information concerning the individual about whom the report
relates.”). Maximum possible accuracy signifies that a report
may be inaccurate not only when it is patently incorrect, but
“when it is ‘misleading in such a way and to such an extent that
it can be expected to [have an] adverse[ ]’ effect.” Schweitzer
v. Equifax Info. Sols. LLC, 441 F. App'x 896, 902 (3d Cir. 2011)
(quoting Dalton v. Capital Associated Indus., Inc., 257 F.3d
409, 415 (4th Cir.2001))(alterations in original). As such, the
Third Circuit has held, “a consumer report that contains
technically accurate information may be deemed ‘inaccurate’ if
the statement is presented in such a way that it creates a
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misleading impression.” Schweitzer, 441 F. App’x at 902 (quoting
Saunders v. Branch Banking & Trust Co., 526 F.3d 142, 148 (4th
Cir. 2008)).
12.

Additionally, under § 1681i(a), pursuant to which

Plaintiff also brings Count One, after a consumer disputes
information with a CRA, a CRA may be required to “verify the
accuracy of its initial source of information,” and may incur
the duty “to go beyond the original source” of information.
Cushman v. Trans Union Corp., 115 F.3d 220, 225 (3d Cir. 1997)).
13.

At this early pleading stage, Plaintiff is correct in

her contention that she does not yet have to prove the reported
information is in fact inaccurate under this standard. [Docket
Item 31 at 3, citing Price v. Trans Union, LLC, 737 F. Supp. 2d
281, 285 (E.D.Pa. 2010) (whether the information reported was
“inaccurate” is “typically . . . an issue of fact”; summary
judgement denied where “Defendant acknowledges that there were
disputed inaccuracies.”).] The fact that the alleged inaccurate
information may be “technically accurate” does not dispositively
answer the question of whether such information “may [still] be
deemed ‘inaccurate’ if the statement is presented in such a way
that it creates a misleading impression.” Schweitzer, 441 F.
App'x at 902 (quoting Saunders, 526 F.3d at 148). Thus, where
the plaintiff alleges facts that support a contention that
reported information was misleading, the plaintiff has pled
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sufficiently at the motion to dismiss stage. See Hillis v. Trans
Union, LLC, 969 F. Supp. 2d 419, 421 (E.D. Pa. 2013) (finding
that although the reported information was factually correct
because “Plaintiff did remain ultimately liable for the car loan
. . . this information, as presented, might still have created a
misleading impression” where the loan was the plaintiff’s exwife’s responsibility.)
14.

The facts of Hillis are analogous to the facts in the

present matter. Here, the information Defendant Equifax is
reporting is technically correct, as Plaintiff is contractually
responsible for her mortgage payments as a co-signor. See Freda
v. Commercial Tr. Co. of New Jersey, 118 N.J. 36, 570 A.2d 409
(1990). Plaintiff does not dispute that the information being
reported is correct, rather she contends it not accurate under
the FCRA because it is correct but misleading. [Docket Item 25
at 14.] Likewise, the plaintiff in Hillis was technically
responsible for delinquent automobile payments on his credit
report, as a co-lendee on his and his ex-wife’s joint car loan.
Hillis, 969 F. Supp. 2d at 420. In the current case, Plaintiff
and her ex-husband initiated a divorce and assigned full
responsibility of their joint mortgage to Plaintiff’s exhusband, similar to the divorce decree executed in Hillis, which
“awarded the underlying vehicle to Plaintiff's ex-wife.” [Docket
Item 1 ¶¶ 9-10]; Hillis, 969 F. Supp. 2d at 420. Thus, the
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plaintiff in Hillis also alleged Santander, the defendant, was
inaccurately reporting the loan. Id.
15.

The Hillis court emphasized that despite the technical

correctness of the disputed information, the defendant “could
have reported Plaintiff's account as ‘disputed,’ or marked it in
some other way that would cause a future creditor to inquire
further and more completely understand Plaintiff's situation.”
Id. at 421. See also Hillis v. Trans Union, LLC, No. 2:13-cv02203, 2014 U.S. Dist. LEXIS 79840, at *11 (E.D. Pa. June 9,
2014) [hereinafter Hillis II] (further denying summary judgment
where the “information was not as complete as it could have
been.”).
16.

The Court disagrees with Defendant’s argument that

Hillis is not persuasive. Defendant argues that Hillis involves
a furnisher’s liability under the FCRA, which is “radically
different” from its obligations as a CRA under the FCRA, and
thus not applicable to this case. [Docket Item 26 at 6.] While
the Hillis court does address the liability of the defendant,
Santander, as a furnisher, the standard applied by the court in
that case is the same standard of maximum possible accuracy the
FCRA imposes on CRAs. Hillis, 969 F. Supp. 2d at 421; cf.
Schweitzer, 441 F. App'x at 902. Additionally, the plaintiff in
Hillis also filed suit against three CRAs, Trans Union, Equifax,
and Experian, but “later settled with [all three CRAs], and his
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claims against them were dismissed.” Hillis, 969 F. Supp. 2d at
420 n.1; Hillis II, 2014 U.S. Dist. LEXIS 79840, at *5-*6 (all
three CRAs removed the car loan from plaintiff’s credit report.)
17.

Accordingly, the Court finds that Plaintiff’s

Proposed Amended Complaint alleges sufficient facts to state a
claim that the reported information was inaccurate (i.e.,
materially misleading) by alleging that the reported mortgage
was the responsibility of her ex-husband. See also Di Buono v.
Experian Info. Sols., Inc., No. CV 17-5379 (JLL), 2017 WL
4516472, at *2-*3 (D.N.J. Oct. 10, 2017) (denying motion to
dismiss where plaintiff claimed that “the information related to
his payment status on his SSA account in the consumer report was
inaccurate” because “Plaintiff had established a payment plan
with the SSA . . . and . . . was current on those payments” and
the “Third Circuit has held that” similar plaintiff’s payments
“were arguably not delinquent[,]” citing Fuges v. Sw. Fin.
Servs., Ltd., 707 F.3d 241, 244 (3d Cir. 2012)) (internal
quotations omitted). Therefore, the Court will deny Defendant
Equifax’s Motion for Judgment on the Pleadings and will grant
Plaintiff’s Motion to File the Proposed Amended Complaint.
18.

Conclusion. For these reasons, Defendant

Equifax’s Motion for Judgement on the Pleadings will be denied,
and Plaintiff’s Motion to Amend/Correct the Complaint will be

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granted, and the Proposed Amended Complaint filed. An
accompanying Order will be entered.

June 29, 2018
Date

s/ Jerome B. Simandle
JEROME B. SIMANDLE
U.S. District Judge

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