Dotson v. Energy Future Holdings Corp et al

Filing 22

ORDER: The Court finds that TXU Energy Defendants' conduct giving rise to Plaintiff's claim occurred post-petition. As such Plaintiff's claim is not subject to the automatic stay re 11 Notice of Bankruptcy, filed by Energy Future Holdings Corp. Signed by Honorable Timothy D. DeGiusti on 9/19/2017. (mb)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
VANCE DOTSON,
Plaintiff,
v.
ENERGY FUTURE HOLDINGS
CORP. d/b/a TXU ENERGY, et al.,
Defendants.

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Case No. CIV-17-575-D

ORDER
Plaintiff brought this action on May 19, 2017, against 16 defendants, alleging
multiple violations of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681-1681x.
See Compl. [Doc. No. 1] at 3. Before the Court is a Notice of Bankruptcy [Doc. No. 11],
filed June 21, 2017, on behalf of 15 defendants (collectively, “TXU Energy Defendants”).1
TXU Energy Defendants ask the Court to stay these proceedings with respect to them
during the pendency of bankruptcy proceedings involving Energy Future Holdings
Corporation (“EFH”). Plaintiff filed a response in opposition [Doc. No. 12], asserting
primarily that the instant action is not one which could have commenced prior to EFH’s
filing of bankruptcy.
According to the Notice of Bankruptcy and attached exhibits [Doc. Nos. 11-1, 112], Defendant EFH and 70 affiliated companies each filed voluntary petitions for Chapter

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The Notice of Bankruptcy was filed on behalf of all Defendants except Experian
Information Solutions, Inc. (“Experian”), which is represented by separate counsel and not
involved in the bankruptcy.

11 bankruptcy on April 29, 2014. See Ex. A, Pet. [Doc. No 11-1] at 5.2 On August 29,
2016, the United States Bankruptcy Court for the District of Delaware entered an order
confirming the Third Amended Joint Plan of Reorganization, Ex. B, Confirmation Order
[Doc. No. 11-2], which went into effect October 3, 2016, as to Texas Competitive Electric
Holdings Company LLC and its subsidiaries (“TCEH Debtors”)3. See id. at 92, 117, 120,
137, 144-49, 152-165. TXU Energy Defendants assert that all Defendants except EFH and
Experian are “TCEH Debtors” and therefore, “Released Parties.”

See Notice of

Bankruptcy [Doc. No. 11] at 3-4; Ex. B, Confirmation Order [Doc. No. 11-2] at 112.
Pursuant to § 362 of the Bankruptcy Code, the filing of a bankruptcy petition
“operates as a stay, applicable to all entities, of . . . the commencement or continuation . . .
of a judicial . . . action or proceeding against the debtor that was or could have been
commenced before the commencement of the case . . . or to recover a claim against the
debtor that arose before the commencement of the case[.]” 11 U.S.C. § 362(a)(1). Broadly
citing to 11 U.S.C. § 362(a)(1), the Complaint [Doc. No. 1], and TXU Energy Defendants’
Notice and Ex. A, Pet. [Doc. Nos. 11, 11-1], Plaintiff asserts that the instant action “is not
one which could have been commenced” prior to EFH’s bankruptcy filing, and therefore,

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See In re Energy Future Holdings Corp., Case No. 14-10979 (Bankr. D. Del. 2014). The
debtors’ cases have been jointly administered for procedural purposes.

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“TCEH Debtors” means, collectively: (a) Energy Future Competitive Holdings
Company LLC; (b) Texas Competitive Electric Holdings Company LLC; and (c) TCEH’s
directly and indirectly owned subsidiaries listed on Exhibit A to the Plan, including, but
not limited to, TXU Energy Retail Company LLC and TXU Energy Solutions Company
LLC, who are named Defendants in this action. [Doc. No. 11-2] at 92, 117, 119, 204.
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any automatic stay “effective with respect to EFH … is not applicable to [the] instant
action.” Pl.’s Resp. [Doc. No. 12] at 1.
The Tenth Circuit has adopted the “conduct theory” in ascertaining when a claim
arises for purposes of the Bankruptcy Code. See In re Parker v. Parker, 264 B.R. 685, 696
(B.A.P. 10th Cir. 2001). A claim arises at the time the debtor commits the conduct that
gives rise to the claim. Id.
Here, Plaintiff has sued 16 defendants for conduct regarding a consumer debt that
allegedly was a result of identity theft. Plaintiff states that he discovered the false
information when he was denied a mortgage loan and obtained a copy of his credit report
from Defendant Experian on May 5, 2016, and learned that the report showed a trade line
debt for $107.00 to TXU Energy. Compl. [Doc. No. 1] at 5.
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.
Services, Inc., No. 08-5063, 2009 WL 595991, at *4 (10th Cir. March 10, 2009)
(unpublished)4 (statutory duties listed in Section 1681s-2(b) for furnishers arise only after
the furnisher receives notice of a dispute from the credit reporting agency). When the

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 Unpublished opinion cited pursuant to FED. R. APP. P. 32.1(a) and 10TH CIR. R. 32.1. 
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furnisher receives notice of the dispute from the credit reporting agency, it must perform
the verification and correction duties outlined in Section 1681s-2(b). Sanders, 689 F.3d at
1147.
Plaintiff alleges in his Complaint that TXU Energy Defendants are “furnishers of
information” within the meaning of the FCRA. See Compl. [Doc. No. 1] at 4. Plaintiff
maintains that he initiated the dispute notification process on May 5, 2016, when he sent
letters to TXU Energy Defendants and Defendant Experian, disputing the trade line debt
of $107.00 and the accuracy of his credit report. Id. Defendant Experian admits it is a
“consumer reporting agency” within the meaning of 15 U.S.C. § 1681a(p). See Def.
Experian’s Answer [Doc. No. 9] at 3.
Plaintiff asserts that subsequent to May 5, 2016, Defendant Experian sent a dispute
notification to TXU Energy Defendants concerning the trade line item in Plaintiff’s
Experian credit report. See Compl. [Doc. No. 1] at 6. Plaintiff further maintains that TXU
Energy Defendants falsely verified to Defendant Experian that Plaintiff was personally
liable for the disputed debt and the amount was still due. Id.
Based on the foregoing chronology of events, as alleged by Plaintiff, the Court finds
that TXU Energy Defendants’ conduct giving rise to Plaintiff’s claim occurred postpetition. Plaintiff’s claim did not arise until sometime after May 5, 2016, and the
bankruptcy petition was filed two years before. As such, Plaintiff’s claim is not subject to
the automatic stay. “[B]ankruptcy was intended to protect the debtor from the continuing
costs of pre-bankruptcy acts but not to insulate the debtor from the costs of post-bankruptcy

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acts.” In re Grynberg v. Danzig Claimants, 143 B.R. 574, 576 (D. Colo. 1990), citing
Matter of Hadden, 57 B.R. 187, 190 (Bankr. W.D. Wis. 1986).
Section 362(a)(1) does not operate to stay Plaintiff’s claims against TXU Energy
Defendants. Accordingly, the Court declines to stay the present action.
IT IS SO ORDERED this 19th day of September 2017.

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