Sanders v. Bank of America et al

Filing 68

MEMORANDUM OPINION AND ORDER GRANTING MOTIONS TO DISMISS AS TO DEFENDANTS EXPERIAN AND BANK OF AMERICA: It is ORDERED that Bank of America's 36 Motion to Dismiss, and Experian's 19 Motion to Dismiss are hereby GRANTED. The Clerk is DIR ECTED to enter judgment on this matter. Bank of America (Att: Attorneys - Agents - Directors) and Experian (Agents Directors) terminated. Signed by Senior Judge Frederick P. Stamp, Jr on 9/19/16. (Attachments: # 1 Certified Mail Return Receipt)(copy Plaintiff)(cnd)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
JUAN SANDERS,
Plaintiff,
v.

Civil Action No. 1:16CV78
(STAMP)

BANK OF AMERICA,
NCO FIN/99,
ASSET ACCEPTANCE LLC,
COMENITY BANK/EXPRESS
TRANS UNION LLC
and EXPERIAN,
Defendants.
MEMORANDUM OPINION AND ORDER
GRANTING MOTIONS TO DISMISS AS TO
DEFENDANTS EXPERIAN AND BANK OF AMERICA
I.

Background

The pro se plaintiff, Juan Sanders, filed this civil action
against Experian, Trans Union LLC, Bank of America, NCO Fin/99,
Asset Acceptance LLC, and Comenity Bank/Express in the Circuit
Court of Preston County, West Virginia, on April 8, 2016.

On May

4, 2016, Trans Union filed a notice of removal, which the other
defendants consented to and joined in.

The case was removed to

this Court.
The plaintiff alleges that Experian and Trans Union reported
inaccurate

information

on

the

plaintiff’s

consumer

reports.

Specifically, the plaintiff alleges that Experian and Trans Union
reported late payments and debts on his accounts with Bank of
America, NCO/Fin99, Comenity Bank/Express, and Taleris Credit Union

for which he is not responsible.

The plaintiff alleges that he

disputed the accuracy of these accounts with Experian and Trans
Union and that both entities informed him that each banking
institution, including Bank of America, confirmed the accuracy of
the reported account information.
The plaintiff alleges that, as a result of the inaccurate
reports, his credit rating has been negatively affected and he was
prevented from co-signing on his son’s loans. He also alleges that
the inaccurate reports have caused him to suffer financial damage,
damage to his credit reputation, and emotional and mental distress.
He demands a declaration that his allegations breach a contract, a
permanent injunction preventing the defendants from reporting the
disputed accounts as his, $10,000.00 in compensatory damages, and
$50,000.00 in punitive damages.
Against both Experian and Bank of America, the plaintiff
brings claims under the Fair Credit Reporting Act (“FCRA”), the
West Virginia Consumer Credit and Protection Act (“WVCCPA”), and
West Virginia defamation law.

He also appears to allege a breach

of contract claim, although he does not state this as a cause of
action.

The plaintiff’s claims against Asset Acceptance and Trans

Union were dismissed with prejudice on July 25, 2016, and August 4,
2016, respectively.
Experian moves to dismiss the complaint in its entirety as to
Experian.

Experian argues that, even if taken as true, the

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plaintiff’s factual allegations against Experian are insufficient
to state any of the claims for relief asserted against Experian.
Bank of America also moves to dismiss the complaint in its entirety
as to Bank of America. Like Experian, Bank of America argues that,
even if taken as true, the plaintiff’s factual allegations against
Bank of America are insufficient to state any of the claims for
relief asserted against Bank of America.
II.

Applicable Law

In assessing a motion to dismiss for failure to state a claim
under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a
court must accept all well-pled facts contained in the complaint as
true.

Nemet Chevrolet, Ltd v. Consumeraffairs.com, Inc., 591 F.3d

250, 255 (4th Cir. 2009). However, “legal conclusions, elements of
a cause of action, and bare assertions devoid of further factual
enhancement fail to constitute well-pled facts for Rule 12(b)(6)
purposes.”
(2009)).

Id. (citing Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949
This

Court

also

declines

to

consider

“unwarranted

inferences, unreasonable conclusions, or arguments.”

Wahi v.

Charleston Area Med. Ctr., Inc., 562 F.3d 599, 615 n.26 (4th Cir.
2009).
It has often been said that the purpose of a motion under Rule
12(b)(6) is to test the formal sufficiency of the statement of the
claim for relief; it is not a procedure for resolving a contest
about the facts or the merits of the case.

3

5B Charles Alan Wright

& Arthur R. Miller, Federal Practice and Procedure § 1356 (3d ed.
1998).

The Rule 12(b)(6) motion also must be distinguished from a

motion for summary judgment under Federal Rule of Civil Procedure
56, which goes to the merits of the claim and is designed to test
whether there is a genuine issue of material fact.

Id.

For

purposes of the motion to dismiss, the complaint is construed in
the

light

essentially

most
the

favorable
court’s

to

the

inquiry

party
is

making

directed

the
to

claim

and

whether

the

allegations constitute a statement of a claim under Federal Rule of
Civil Procedure 8(a).

Id. § 1357.

A complaint should be dismissed “if it does not allege ‘enough
facts to state a claim to relief that is plausible on is face.’”
Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

“Facial

plausibility is established once the factual content of a complaint
‘allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.’” Nemet Chevrolet,
591 F.3d at 256 (quoting Iqbal, 129 S. Ct. at 1949).

Detailed

factual allegations are not required, but the facts alleged must be
sufficient “to raise a right to relief above the speculative
level.”

Twombly, 550 U.S. at 555.

This

Court

must

liberally

construe

pro

se

complaints.

Erickson v. Pardus, 551 U.S. 89, 94 (2007); Gordon v. Leeke, 574
F.2d 1147, 1151 (4th Cir. 2007). While the plaintiff’s allegations

4

are assumed to be true, Erickson, 551 U.S. at 93, this Court may
not ignore a clear failure in the pleading to allege facts that set
forth a claim.

See Weller v. Dep’t of Soc. Servs., 901 F.2d 387,

390-91 (4th Cir. 1990).

This Court may not rewrite a complaint to

include claims that were never presented, Barnett v. Hargett, 174
F.3d 1128, 1133 (10th Cir. 1999), construct the plaintiff’s legal
arguments for him, id., or “conjure up questions never squarely
presented” to the court.

Beaudett v. City of Hampton, 775 F.2d

1274, 1278 (4th Cir. 1985).
III.
A.

Discussion

Experian’s Motion to Dismiss
1.

FCRA Claims

In its motion to dismiss, Experian first asserts that there is
no claim under 15 U.S.C. § 1681s-2 because that section of the FCRA
does not provide a private cause of action.

Further, Experian

argues that the section applies only to furnishers of information
to consumer reporting agencies (“CRAs”), not CRAs themselves.
Experian concludes that the plaintiff has no claim under this
section because Experian is a CRA, not a furnisher of information
to CRAs.
Experian next asserts that the two possible FCRA causes of
action against CRAs are a “reasonable procedures” claim under 15
U.S.C. § 1681e(b) and a “reasonable reinvestigaton” claim under 15
U.S.C. § 1681i.

Experian argues that the § 1681e(b) claim fails

5

because the plaintiff did not allege that Experian failed to follow
reasonable procedures to ensure the maximum possible accuracy of
the information in the consumer report.

Experian argues that the

§ 1681i claim fails because the plaintiff’s allegations demonstrate
compliance with that section of the FCRA.
The plaintiff responds to Experian’s arguments with new facts
that he did not allege in his complaint.

To these new facts,

Experian argues in reply that it is improper to consider newly
alleged facts in a motion to dismiss.
As a preliminary matter, this Court cannot consider the
plaintiff’s new allegations, raised in his response for the first
time,

in

ruling

on

Experian’s

motion

to

dismiss.

See

Am.

Chiropractic Ass’n v. Trigon Healthcare, Inc., 367 F.3d 212, 234
(4th Cir. 2004) (“[A]s a general rule extrinsic evidence should not
be considered at the [Rule] 12(b)(6) stage . . . .”).
extent

the

plaintiff’s

response

relies

on

Thus, to the

allegations

of

a

refinanced real estate mortgage account from Bank of America and
other previously unasserted facts, this Court will not consider
those arguments.
This Court agrees with Experian that § 1681s-2 does not
provide a private cause of action.

See Saunders v. Branch Banking

& Tr. Co. of Va., 526 F.3d 142, 149 (4th Cir. 2008) (“FCRA
explicitly

bars

2(a). . . .”).

private

suits

for

violations

of

§

1681s-

This Court also agrees with Experian that § 1681s-2

6

does not apply to CRAs and that Experian is a CRA to which the
section cannot apply.

See Jolly v. Acad. Collection Serv., Inc.,

400 F. Supp. 2d 851, 859 (M.D.N.C. 2005) (explaining that § 1681s-2
applies “to ‘furnishers’ of consumer information, not consumer
reporting agencies”).

Accordingly, the plaintiff has no claim

under § 1681s-2.
A “reasonable procedures” claim under § 1681e(b) requires the
plaintiff

to

allege

“(i)

that

a

particular

‘consumer

report

contains inaccurate information’ and (ii) that ‘the reporting
agency did not follow reasonable procedures to assure maximum
possible accuracy.’”

Hinton v. Trans Union, LLC, 654 F. Supp. 2d

440, 450 (E.D. Va. 2009) (quoting Dalton v. Capital Associated
Indus., Inc., 257 F.3d 409, 415 (4th Cir. 2001)).

Because the

plaintiff did not state any facts alleging that Experian did not
“accurately report what [it had] been told, and maintain a system
reasonably designed to prevent repetitive or systematic error,
[Experian is] in compliance with [§ 1681e(b)].”

Smith v. Auto

Mashers, Inc., 85 F. Supp. 2d 638, 641 (W.D. Va. 2000).

The

plaintiff alleges no facts giving rise to an inference that
Experian had reason to doubt the information it received from Bank
of America, NCO/Fin99, Comenity Bank/Express, or Taleris Credit
Union.

Further, the plaintiff does not allege that any inaccuracy

was the result of Experian’s reporting procedures.
plaintiff also has no claim under § 1681e(b).

7

Thus, the

A “reasonable reinvestigation” claim under § 1681i requires
the plaintiff to allege facts showing:
(1) the consumer report in dispute contains inaccurate or
incomplete information; (2) the plaintiff notified the
[credit reporting agency or CRA] of the alleged
inaccuracy; (3) the dispute is not frivolous or
irrelevant; (4) the CRA failed to respond or conduct a
reasonable reinvestigation of the disputed items; and (5)
the failure to reinvestigate caused the plaintiff to
suffer out-of-pocket losses or intangible damages such as
humiliation or mental distress.
Parker v. Certified Profile, LLC, No. 7:14-CV-37-BO, 2014 WL
3534129, at *2 (E.D.N.C. July 16, 2014) (citing Lazarre v. JPMorgan
Chase Bank, N.A., 780 F. Supp. 2d 1320, 1329 (S.D. Fla. 2011)).
The plaintiff’s allegations demonstrate that Experian did follow
the required reinvestigation procedures as to the disputed account
information.

The pleadings show that the plaintiff disputed the

Bank of America, Comenity Bank/Express, and Taleris Credit Union
accounts with Experian, and that, as required by § 1681i(b),
Experian notified the plaintiff that those furnishers confirmed the
accuracy

of

the

disputed

accounts.

Further,

the

pleadings

demonstrate that the plaintiff did not pursue the next available
remedy of filing a statement of dispute with Experian pursuant to
§ 1681i(b).

Thus, even liberally construing the pro se complaint,

the plaintiff also does not have a claim under § 1681i(b).
2.

WVCCPA Claim

The next argument in Experian’s motion to dismiss is that the
plaintiff failed to state a claim under the WVCCPA because the

8

statute does not apply to Experian.

Specifically, Experian argues

that the WVCCPA applies to debt collectors and that Experian does
not engage in debt collection. In his response, the plaintiff does
not dispute that Experian does not engage in debt collection.
The plaintiff states WVCCPA claims under both West Virginia
Code §§ 46A-2-124 and 46A-2-127.

Section 46A-2-124 prohibits debt

collectors from “collect[ing] or attempt[ing] to collect any money
alleged to be due and owing by means of any threat, coercion or
attempt to coerce.”

W. Va. Code § 46A-2-124.

Section 46A-2-127

prohibits debt collectors from “us[ing] any fraudulent, deceptive
or misleading representation or means to collect or attempt to
collect claims or to obtain information concerning consumers.” Id.
§ 46A-2-127. Further, the WVCCPA defines a debt collector as “any
person or organization engaging directly in debt collection.”

Id.

§ 46A-2-122(d). The WVCCPA defines debt collection as “any action,
conduct or practice of soliciting claims for collection or in the
collection of claims owed or due or alleged to be owed or due by a
consumer.”

Id. § 46A-2-122(c).

The plaintiff does not allege any facts supporting that
Experian

is

practices.

a

debt

collector

or

engaged

in

debt

collection

Further, in the plaintiff’s reply, he did not dispute

Experian’s assertion that the WVCCPA does not apply to it because
it is not a debt collector.

Thus, the plaintiff has failed to

9

state a claim under either § 46A-2-124 or § 46A-2-127 of the
WVCCPA.
3.

Defamation Claim

Experian next argues that § 1681h(e) of the FCRA preempts the
plaintiff’s state law defamation claim.

The plaintiff did not

reply to Experian’s argument on the defamation claim.

Section

1681h(e) provides:
[N]o consumer may bring any action or proceeding in the
nature of defamation, invasion of privacy, or negligence
with respect to the reporting of information against any
consumer reporting agency . . . based on information
disclosed pursuant to [§§ 1681g, 1681h, or 1681m of the
FCRA] . . . except as to false information furnished with
malice or willful intent to injure such consumer.
15 U.S.C. § 1681h(e).

In other words, § 1681h(e) provides a

“general bar on defamation” actions and “[t]he only exception to
this bar is a narrow one, requiring proof of ‘malice or willful
intent to injure [the] consumer.’” Ross v. F.D.I.C., 625 F.3d 808,
814 (4th Cir. 2010) (quoting 15 U.S.C. § 1681h(e)).
In West Virginia, malice requires both “a deliberate intent to
injure” and “an intent to injure through the publication of false
or misleading defamatory statements known by the publisher or its
agents to be false, or an intent to injure through publication of
such defamatory statements with reckless and willful disregard for
their truth.” Sprouse v. Clay Commc’ns, Inc., 211 S.E.2d 674, 68182 (W. Va. 1975).

10

Here, the general bar on defamation claims applies because the
disputed information was disclosed pursuant to the sections of the
FCRA governing the disclosure of information by CRAs, §§ 1681g and
1681h.

Experian disclosed the plaintiff’s consumer report to him

on September 23, 2015, and the plaintiff alleges that report
contained the inaccurate account information. The malice exception
to the general bar does not apply because the plaintiff alleges no
facts

that

could

constitute

a

reckless

disregard

for

false

information in the plaintiff’s consumer report or an intent to
injure the plaintiff with false information in his consumer report.
Thus, the plaintiff’s defamation claim is barred by § 1681h(e) of
the FCRA.
4.

Contract Claim

Although the plaintiff did not plead a breach of contract
claim,

he

did

allegations.
a claim.

suggest

such

a

claim

in

his

jurisdictional

Experian responds to the allegation as though it was

A breach of contract claim requires the plaintiff to

allege facts supporting “the existence of a valid, enforceable
contract; that the plaintiff has performed under the contract; that
the defendant has breached or violated its duties or obligations
under the contract; and that the plaintiff has been injured as a
result.”

Exec. Risk Indem., Inc. v. Charleston Area Med. Ctr.,

Inc., 681 F. Supp. 2d 694, 714 (S.D. W. Va. 2009).

The plaintiff

never alleges facts supporting any of the breach of contract

11

elements, including the existence of a valid, enforceable contract.
Thus, the plaintiff fails to state a breach of contract claim.
5.

Sanctions

In his response to Experian’s motion to dismiss, the plaintiff
asks this Court to impose sanctions on Experian’s counsel.

The

plaintiff does not state any basis for sanctions nor does this
Court otherwise find any basis for sanctions.
Court

denies

the

plaintiff’s

request

for

Accordingly, this
sanctions

against

Experian’s counsel.
B.

Bank of America’s Motion to Dismiss
1.

FCRA Claims

In its motion to dismiss, Bank of America, like Experian,
argues that 15 U.S.C. § 1681s-2(a) of the FCRA does not provide a
private cause of action and that the plaintiff did not state a
claim against Bank of America under any other section of the FCRA.
As previously stated regarding the same claim against Experian,
Bank of America is correct that there is no private right of action
under § 1681s-2(a).

See Saunders, 526 F.3d at 149 (noting that

this section of the FCRA “explicitly” bars private suits).
The plaintiff does not allege any other section of the FCRA as
a cause of action.

Nonetheless, Bank of America argues that the

plaintiff has also failed to state a claim under § 1681s-2(b) to
the extent he alleges facts supporting a claim under that section.
A claim under § 1681s-2(b) requires the plaintiff to establish “(1)

12

that he or she notified the consumer agency of the disputed
information, (2) that the consumer reporting agency notified the
defendant furnisher of the dispute, and (3) that the furnisher then
failed

to

[reasonably]

investigate

and

modify

the

inaccurate

information.” Alston v. Wells Fargo Bank, N.A., No. 8:12-cv-03671AW, 2013 WL 4507607, at *3 (D. Md. Aug. 22, 2013) (quoting Ausar-El
v. Barclay Bank Del., No. PJM-12-0082, 2012 WL 3137151, at *3 (D.
Md. July 31, 2012)).

Here, the plaintiff did not allege that

Experian notified Bank of America of the dispute or that Bank of
America failed to reasonably investigate and modify the inaccurate
information.

Thus, the plaintiff has also failed to state a claim

under § 1681s-2(b).
2.

WVCCPA Claim

Bank of America further argues that § 1681t(b)(1)(F) of the
FCRA

preempts

both

WVCCPA

§§ 46A-2-124 and 46A-2-127.

claims,

under

West

Virginia

Code

Section 1681t(b)(1)(F) provides that

“[n]o requirement or prohibition may be imposed under the laws of
any State . . . with respect to any subject matter regulated
under . . . section 1681s-2 of this title, relating to the
responsibilities of persons who furnish information to consumer
reporting agencies . . . .”

15 U.S.C. § 1681t(b)(1)(F).

The

plaintiff alleges that Bank of America inaccurately reported his
credit information to Experian, which is conduct regulated by

13

§

1681s-2.

Thus,

the

WVCCPA

claims

are

preempted

by

§ 1681t(b)(1)(F).
Additionally, both alleged sections of the WVCCPA regulate
debt collection practices. The plaintiff does not allege any facts
supporting a claim that Bank of America attempted to collect the
alleged debt from him.

Thus, even if the claim was not preempted

by the FCRA, the plaintiff still fails to state a claim under
either alleged section of the WVCCPA.
3.

Defamation Claim

Bank of America next argues that § 1681h(e) of the FCRA
preempts the plaintiff’s defamation claim.

Bank of America’s

argument is correct for the same reasons stated above in the
discussion of Experian’s motion to dismiss.

Section 1681h(e)

prevents individuals from bringing defamation claims unless the
individual also alleges that there was malice or willful intent to
injure.

The plaintiff does not state any facts to alleging malice

or a willful intent to injure. Thus, the FCRA preemption provision
applies, and the plaintiff has failed to state a defamation claim.
4.

Contract Claim

Like Experian, Bank of America also argues that, to the extent
the plaintiff has alleged a breach of contract claim, the claim
fails because the plaintiff did not allege the existence of a
valid, enforceable contract.

This Court agrees with Bank of

America that the plaintiff did not allege that there was a valid,

14

enforceable contract between him and Bank of America.

Thus, the

plaintiff has failed to state a claim for breach of contract.
5.

Sanctions

The plaintiff asks this Court to impose sanctions on Bank of
America’s counsel as well.

Like with the request for sanctions

against Experian’s counsel, the plaintiff does not state any basis
for sanctions nor does this Court otherwise find any basis for
sanctions.

Accordingly, this Court denies the plaintiff’s request

for sanctions against Bank of America’s counsel.
IV.

Conclusion

For the reasons stated above, defendant Experian’s motion to
dismiss (ECF No. 19) is GRANTED as to defendant Experian, and
defendant Bank of America’s motion to dismiss (ECF No. 36) is
GRANTED as to defendant Bank of America.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to the pro se plaintiff by certified mail and to
counsel of record herein.

Pursuant to Federal Rule of Civil

Procedure 58, the Clerk is DIRECTED to enter judgment on this
matter.
DATED:

September 19, 2016

/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE

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