Bengtson, Daniel v. Capital One Bank

Filing 53

ORDER granting defendant Capital One Bank's 12 Motion for Partial Summary Judgment. Plaintiff Daniel R. Bengtson's claims for violations of the Fair Credit Reporting Act, 15 U.S.C. §1681s-2(b), and the Truth In Lending Act, 15 U.S.C. §§ 1601-1667f, and his state law claim for breach of contract (or a defensive claim of accord and satisfaction) are all dismissed with prejudice; and the clerk of the court is directed to enter judgment consistent with the opinion and order and close this case. Signed by District Judge William M. Conley on 2/25/2014. (jef),(ps)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN

DANIEL R. BENGTSON,
Plaintiff,

OPINION & ORDER

v.
13-cv-262-wmc
CAPITOL ONE BANK,
Defendant.

In this civil action, plaintiff Daniel R. Bengtson lodges several claims against
defendant Capital One Bank, all of which are based on what Bengtson describes as
Capital One’s untimely rejection of his February 2007 offer to satisfy a $650 debt with a
$100 payment. Before the court is Capital One’s motion for partial summary judgment
and partial dismissal. (Dkt. #12.)

Because Bengtson has failed to allege -- and cannot

allege -- an actionable claim under the Fair Credit Reporting Act, 15 U.S.C. §1681s-2(b),
or the Truth In Lending Act, 15 U.S.C. §§ 1601-1667f, the court will grant Capital One’s
motion to dismiss and dismiss those federal claims with prejudice. As for Bengtson’s
state law breach of contract claim, the court would typically decline to exercise its
supplemental jurisdiction and dismiss this claim without prejudice. Because Bengtson’s
contract claim is also a clear loser in any court, the court will grant defendant’s motion
for summary judgment on that claim and dismiss it with prejudice.1

1

Bengtson has filed numerous, rambling, difficult to discern documents in this court.
Any and all arguments raised in these filings are mooted by the court’s decision on
defendant’s present motion.

FACTS
A. Bengtson’s History with Capital One
Bengtson opened his Capital One credit card on July 31, 2004. (Affidavit of Fran
Steinberger (“Steinberger Aff.”) (dkt. #17) ¶ 2.) At that time, Bengtson agreed to the
terms of a Customer Agreement. (Steinberger Aff., Ex. A (dkt. #17-1).) Material to
Bengtson’s claim here, the Agreement provides:

(Id. at p.1.) The Agreement also explained that Bengtson could not close his account
until “you pay all amounts you owe us under this Agreement . . . including, without
limitation, any purchase and cash advance transactions you have authorized, finance
charges, late payment fees,” and other fees. (Id. at p.2.)
In November 2006, Bengtson began to fall behind in his payments. (Steinberger
Aff. (dkt. #17) ¶ 5.) By January 2007, Bengtson had missed three payments and owed a
balance of $656.68. (Steinberger Aff., Ex. B (dkt. #17-2).) In February 2007, Bengtson
sent Capital One via certified mail a $100 payment along with a letter dated February 2,
2007, which provided in pertinent part:

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Here’s your remaining balance ($100) if you cho[o]se not to
accept it as payment in full, you have 10 days to return it to
me. . . . HERE’S your final payment and you know where you
can shove your card.
(Steinberger Aff., Ex. C (dkt. #17-3); see also Pl.’s Opp’n, Ex. 1 (dkt. #42-4) p.4.)
Capital One received the $100 payment and applied it to his outstanding balance on
February 6, 2007. (Steinberger Aff., Ex. D (dkt. #17-4).)
On February 21, 2007, Capital One responded to Bengtson’s February 2, 2007,
letter, directed him to the Customer Agreement, and consistent with the provision
quoted above, expressly rejected his offer to satisfy his debt with a $100 final payment,
and informed him that his account still had a balance of $577.43. (Steinberger Aff., Ex.
E (dkt. #17-5).)
True to his word, Bengtson did not make any further payments on his account.
On a July 2007 billing statement, Capital One warned Bengtson that failure to make a
sufficient payment within the following seven weeks would result in his account being
closed and his failure to make payments would be reported to the national credit
bureaus.

(Steinberger Aff., Ex. F (dkt. #17-6).)

The August 2007 billing statement

similarly warned Bengtson. (Steinberger Aff., Ex. G (dkt. #17-7).) Bengtson still failed
to make any further payments.
On September 15, 2007, Capital One “charged off” Bengtson’s account with a
remaining balance of $929.97, including interest. (Steinberger Aff. (dkt. #17) ¶ 11.)
The account was then referred to a collection agency; at that time, Capital One also
stopped sending account statement to Bengtson. (Id.) Still, pursuant to the terms of his
original Customer Agreement, Bengtson remained obligated to pay the amount owed.
3

In response to the enactment of the Credit Card Accountability Responsibility and
Disclosure Act of 2009, 15 U.S.C. § 1631 et seq., Capital One began sending Bengtson
quarterly account statements beginning in 2010. (Steinberger Aff. (dkt. #17) ¶ 12; id.,
Ex. H (dkt. #17-8).)
In October 2010 -- apparently in response to these new quarterly statements -Bengtson sent a “notice to cease and desist and notice of counter claim” to Capital One,
which asserted that Capital One had accepted his February 2007 payment of $100 as
satisfaction of his outstanding debt. (Steinberger Aff., Ex. I (dkt. #17-9); see also Pl.’s
Opp’n, Ex. 3 (dkt. #42-6) pp.3-4.) Capital One responded on November 4, 2010, and
again on November 8, 2010, confirming his outstanding balance, which by that time had
grown to $1,752.37. (Steinberger Aff., Exs. J & K (dkt. ## 17-10, 17-11).)2
Capital One sent Bengtson a final quarterly statement for the period December 18
- March 17, 2013. (Steinberger Aff., Ex. M (dkt. #17-13).) Capital One then closed his
account on April 18, 2013.

(Steinberger Aff. (dkt. #17) ¶ 17.)

After that point,

Bengtson has not and will not receive further quarterly statements; similarly, Capital One
no longer reports his delinquent account status to the national credit bureaus. (Id.)

B. Procedural Posture
On March 12, 2013, Bengtson filed a complaint in Dunn County Circuit Court,
which Capital One timely removed to this court on the basis of this court’s federal
2

Capital One sent another letter in September 2011, informing him that his account was
“not settled in full” and that his balance was now $1,977.83. (Steinberger Aff., Ex. L
(dkt. #17-12).)
4

question jurisdiction, 28 U.S.C. § 1331. (Compl. (dkt. #1-1; Not. of Removal (dkt. #1);
5/20/13 Op. & Order (dkt. #11).) Reading Bengtson’s complaint generously as required
by Haines v. Kerner, 404 U.S. 519, 521 (1972), the court understands plaintiff to assert
three causes of action: (1) breach of contract (or a related, defensive common law claim
of “accord and satisfaction”); (2) violation of the Fair Credit Reporting Act, 15 U.S.C.
§1681s-2(b); and (3) violations of the Truth In Lending Act, 15 U.S.C. §§ 1601-1667f.3

OPINION
I. Motion to Dismiss Federal Claims
“A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) challenges
the sufficiency of the complaint for failure to state a claim upon which relief can be
granted.” Diamond Ctr., Inc. v. Leslie’s Jewelry Mfg. Corp., 562 F. Supp. 2d 1009, 1013
(W.D. Wis. 2008).

In “[e]valuating the sufficiency of the complaint, [the court]

construes it in the light most favorable to the nonmoving party, accept[s] well-[pled]
facts as true, and draw[s] all inferences in her favor.” Cincinnati Life Ins. Co. v. Beyrer, 722
F.3d 939, 946 (7th Cir. 2013).

The plaintiff need not provide detailed factual

allegations, but must provide “just enough facts to raise [the claim] above the level of
mere speculation.” Riley v. Vilsack, 665 F. Supp. 2d 994, 997 (W.D. Wis. 2009) (citing
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)) (“A pleading that offers ‘labels and
conclusions’ or ‘a formulaic recitation of the elements of a cause of action will not do.’”).
3

Bengtson also alludes to constitutional violations generally in his complaint. Because
Capital One is not “acting under color of state law” as required by 28 U.S.C. § 1983, the
court can find no basis for Bengtson to assert a constitutional claim against a private
actor like defendant.
5

A plaintiff must provide enough facts to state a claim that is plausible on its face and
allow the “court to infer more than the mere possibility of misconduct.” Iqbal, 556 U.S.
at 679. This plaintiff has not done and cannot do so.

A. FCRA Claim
Bengtson alleges that Capital One “clearly damage[d] my Credit without giving
me Due Process of Law” by “placing their claim in collection even after accepting and
receiving payment in full and several letters,” which made them “well aware that this
matter was in dispute.” (Compl. (dkt. #1-1) p.2.)
The Fair Credit Reporting Act sets forth certain duties required of furnishers of
credit information once notified of a dispute as to the accuracy of the information. In
pertinent part, 15 U.S.C. § 1681s-2(b) provides:
(1) In general
After receiving notice pursuant to section 1681i(a)(2) of this
title of a dispute with regard to the completeness or accuracy
of any information provided by a person to a consumer
reporting agency, the person shall-(A) conduct an investigation with respect to the disputed
information;
(B) review all relevant information provided by the consumer
reporting agency pursuant to section 1681i(a)(2) of this title;
(C) report the results of the investigation to the consumer
reporting agency;
(D) if the investigation finds that the information is
incomplete or inaccurate, report those results to all other
consumer reporting agencies to which the person furnished
the information and that compile and maintain files on
consumers on a nationwide basis; and
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(E) if an item of information disputed by a consumer is found
to be inaccurate or incomplete or cannot be verified after any
reinvestigation under paragraph (1), for purposes of reporting
to a consumer reporting agency only, as appropriate, based on
the results of the reinvestigation promptly-(i) modify that item of information;
(ii) delete that item of information; or
(iii) permanently block the reporting of that item of
information.
The FCRA limits a private right of action in several significant respects, but allows for a
civil lawsuit for willful noncompliance (15 U.S.C. § 1681n) and for negligent
noncompliance (15 U.S.C. § 1681o) of the duties described above. 15 U.S.C. § 1681s2(c).
Bengtson fails to allege any facts necessary to state a claim under this provision of
the FCRA, including that: (1) he disputed information on his credit report to any credit
reporting agency; (2) the credit reporting agency sent notice of the dispute to Capital
One; and (3) Capital One failed to conduct a reasonable investigation after receiving such
notice.

While Capital One may have been on notice that Bengtson disputed any

outstanding balance after his February 2007 letter, any requirement on Capital One’s
part to conduct an investigation under § 1681s-2(b)(1) is only triggered after notice from
a credit reporting agency. See, e.g., Anderson v. EMC Mortg. Corp., 631 F.3d 905, 908-09 (8th
Cir. 2011) (“Because a furnisher’s obligation to conduct a reasonable investigation under
§ 1681s-2(b) arises when it receives a notice of dispute from a CRA, it need investigate
only ‘what it learned about the nature of the dispute from the description in the CRA’s
notice of dispute.’”).
7

Accordingly, the court finds that Bengtson has failed to state a claim under the
FCRA, and will grant defendant’s motion to dismiss that claim.

B. TILA Claim
Bengtson also alleges that Capital One’s “[a]ctions and practices are completely
unlawful and unconstitutional ‘[a]nd violate Truth In Lending Laws.’” (Compl. (dkt. #11) p.2.)
The purpose of the TILA is to “assure a meaningful disclosure of credit terms so
that the consumer will be able to compare more readily the various credit terms available
to him and avoid the uninformed use of credit, and to protect the consumer against
inaccurate and unfair credit billing and credit card practices.” 15 U.S.C. § 1601(a). The
Act requires creditors to make “clear and accurate disclosures of terms dealing with things
like finance charges, annual percentage rates of interest, and the borrower’s rights.” Beach
v. Ocwen Fed. Bank, 523 U.S. 410, 412 (1998). If the creditor fails to do so, it can be
held liable for criminal penalties, see 15 U.S.C. § 1611, and a debtor can sue for damages
(including a statutory penalty of twice the finance charge), see 15 U.S.C. § 1640(a).
Beach, 523 U.S. at 412. TILA mandates strict compliance with the required disclosures;
technical violations will not provide creditors with an escape from liability. Smith v. No.
2 Galesburg Crown Fin. Corp., 615 F.2d 407, 416 (7th Cir. 1980).
Even with that background in mind, the court can discern no violation of TILA
based on Bengtson’s allegations. Bengtson’s primary complaint appears to be his position
that Capital One failed to timely reject his February 2007 offer to satisfy a $650 debt
8

with a $100 payment and, therefore, defendant should not have pursued further
payment on his account.

As laid out in the facts above, the Customer Agreement

foreclosed Bengtson’s proposed offer. Regardless, Bengtson’s complaint fails to state a
claim under TILA for which relief may be granted and, therefore, the court will grant
defendant’s motion and dismiss this claim.

II. Motion for Summary Judgment of Breach of Contract Claim
Having granted defendant’s motion to dismiss all federal claims, this court would
typically dismiss Bengtson’s state law claim without prejudice to be refiled in state court
consistent with “the well-established law of this circuit . . . to dismiss without prejudice
state supplemental claims whenever all federal claims have been dismissed prior to trial.”
Groce v. Eli Lilly & Co., 193 F.3d 496, 501 (7th Cir. 1999); see also 28 U.S.C. §
1367(c)(3) (“The district courts may decline to exercise supplemental jurisdiction over a
claim under subsection (a) if the district court has dismissed all claims over which it has
original jurisdiction.”).4
However, defendant’s entitlement to summary judgment on Bengtson’s state court
claim is so obvious that the court will decide the state claim as well. See Groce, 193 F.3d
at 502 (explaining that a court may depart from “usual practice” and continue to exercise
supplemental jurisdiction over “‘doomed litigation’ that will only be dismissed” in state
court); In re Repository Tech., Inc., 601 F.3d 710, 725 (7th Cir. 2010) (“[W]hen a state4

While plaintiff and defendant appear to be citizens of different states, the complaint
does not allege sufficient facts to demonstrate that the jurisdictional amount of $75,000
is met, and thus the state contract dispute is not properly before this court on diversity
jurisdiction grounds. See 28 U.S.C. § 1332(a).
9

law claim is clearly without merit, it invades no state interest -- on the contrary, it spares
overburdened state courts additional work that they do not want or need -- for the
federal court to dismiss the claim on the merits, rather than invite a further, and futile,
round of litigation in the state courts.”) (internal quotation omitted).
As far as the court can discern, Bengtson’s only argument is that Capital One
breached its contract by failing to reject his February 2007 offer of $100 for payment in
full in a timely manner, and then wrongly pursued other payment of the outstanding
balance. This argument is foreclosed by the plain language of the Customer Agreement,
which allows Capital One to accept items marked as “payment in full” without losing
rights to receive actual payment in full. (Steinberger Aff., Ex. A (dkt. #17-1) p.1.) Even
absent that provision, as detailed in defendant’s brief in support of summary judgment,
the facts do not support an effective accord and satisfaction.

(Def.’s Br. (dkt. #13)

(discussing Revised U.C.C. § 3-311).)
In response, Bengtson primarily argues that his February 2, 2007, letter barred
Capital One from pursuing his debt over the next six years. As explained above, this
argument is plainly without merit. Bengtson’s other arguments are not material to the
motion, but the court will nonetheless address each. First, Bengtson takes issue with this
court’s order granting Capital One additional time to answer Bengtson’s complaint,
arguing that Capital One’s reason -- that it did not know Bengtson’s account number -was disingenuous. (Pl.’s Opp’n (dkt. #42) p.2.) This court commonly grants reasonable
requests for extensions of time to answer, and Bengtson fails to establish how that
extension furthers his claims against Capital One.
10

Even if defendant was previously

aware of Bengtson’s account number, a request for an extension does not constitute
“trickery and deceit.” (Id. at p.3.)
Next, Bengtson contends that Capital One is “known for manufacturing erroneous
and fraudulent documents” as evidenced by other lawsuits against Capital One. (Id. at
p.4.) Whether Capital One has been found liable in other civil actions is not material to
Bengtson’s claims here, at least insofar as he has failed to explain how Capital One’s
actions with regard to other customers is material.
Finally, Bengtson also takes issue with Capital One’s use of “a false, fake and
wrong name, Dino Bengtson.” (Id. at p.6.) As demonstrated by documents submitted by
plaintiff, he, at least at times, uses “Dino Bengtson” as his name. The February 2, 2007,
letter sent to Capital One and attached to his opposition materials is signed by “Dino
Bengtson.” (Pl.’s Opp’n, Ex. 1 (dkt. #42-4) p.2.) Regardless, Bengtson fails to explain
how Capital One’s use of “Dino Bengtson” furthers his claims.

ORDER
IT IS ORDERED that:
1) defendant Capital One Bank’s motion for partial summary judgment and
partial dismissal (dkt. #12) is GRANTED;
2) plaintiff Daniel R. Bengtson’s claims for violations of the Fair Credit Reporting
Act, 15 U.S.C. §1681s-2(b), and the Truth In Lending Act, 15 U.S.C. §§ 16011667f, and his state law claim for breach of contract (or a defensive claim of
accord and satisfaction) are all dismissed with prejudice; and

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3) the clerk of the court is directed to enter judgment consistent with the opinion
and order and close this case.
Entered this 25th day of February, 2014.
BY THE COURT:
/s/
________________________________________
WILLIAM M. CONLEY
District Judge

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