Reichardt v. Trans Union LLC

          ORDER

          HONORABLE RANER C. COLLINS SENIOR UNITED STATES DISTRICT JUDGE.

         Pending before the Court is Defendant Trans Union, LLC's Motion to Dismiss Plaintiff's Complaint and Memorandum in Support. (Doc. 15.) Plaintiff has filed a Response (Doc. 21) and Trans Union a Reply (Doc. 23). The Court finds that Plaintiff has not demonstrated that Trans Union inaccurately reported her credit information, and has failed to state a claim for which relief may be granted. Because the factual basis for Plaintiff's claims against Trans Union and Equifax are identical, and the legal reasoning for dismissal applies in both instances, the Court will grant the Motion to Dismiss and dismiss the claims against both parties with prejudice.

         I. Defendants JP Morgan Chase Bank, N.A. and Wells Fargo Bank, N.A.

         As a preliminary matter, Plaintiff filed a Notice of Voluntary Dismissal with Prejudice as to JP Morgan Chase Bank, N.A. (“Chase”) on October 9, 2018 (Doc. 26), and another as to Wells Fargo Bank, N.A. (“Wells Fargo”) on October 18, 2018 (Doc. 28). These parties will be dismissed with prejudice, each party to bear its own attorneys' fees and costs. Therefore, the only remaining parties are Trans Union and Equifax.

         II. Motion to Dismiss Standard of Review

          A complaint must include a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2) (emphasis added). “[A] complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A mere “recitation of the elements of a cause of action will not do.” Id. A claim is plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. “Determining whether a complaint states a plausible claim for relief [is] . . . a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. When considering a motion to dismiss, the court takes all allegations in the complaint as true and views any inferences in favor of the non-moving party. See Cervantes v. United States, 330 F.3d 1186, 1187 (9th Cir. 2003). Nonetheless, the Court does not accept as true unreasonable inferences or conclusory legal allegations cast in the form of factual allegations. W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981); see Iqbal, 556 U.S. at 679.

         III. Factual Summary

         The material facts in this case are undisputed. Ms. Reichardt filed for Chapter 13 bankruptcy on February 4, 2014. (Doc. 1 at 3, ¶9.) Her Bankruptcy Plan indicated that her Wells Fargo and Chase mortgage trade line accounts (“Accounts”) would be paid directly from Ms. Reichardt to Wells Fargo and Chase (collectively “Furnishers”), rather than through a bankruptcy trustee. (Id. at ¶ 10; Ex. B, Doc. 15-1 at 54.)^[1] Her Bankruptcy Plan was confirmed on January 24, 2015. (Id. at ¶ 11.) An order of discharge was issued on April 5, 2017. (Ex. C, Doc. 15-1 at 64-67.)

         When Ms. Reichardt subsequently received her Trans Union and Equifax credit files; they stated her Accounts were closed and failed to reflect the monthly payments she made after bankruptcy. (Doc. 1 at 4, ¶ 12.) The report indicated Ms. Reichardt made her last payment to Wells Fargo in May 2014; to Chase, in October 2013. (Id. at ¶ 13.)

         Ms. Reichardt contacted Trans Union and Equifax (collectively “CRAs”) around February 2018, informing them that the Accounts were not part of her bankruptcy and so her payments should be reported on her credit report. (Id. at ¶¶ 17-18.) Ms. Reichardt then received notification from the CRAs that her lines of credit were reporting correctly (Id. at ¶¶ 21, 23) and that the CRAs refused to report her post-bankruptcy payments. (Id. at ¶¶ 22, 24.)

         Ms. Reichardt alleges that because the payments to the Furnishers on the Accounts were being made personally and not as a part of the Bankruptcy Plan, the CRAs were required to report the payments made post-bankruptcy. (Id. at ¶ 17-18.) Not doing so resulted in false and inaccurate information on her credit report. (Id. at ¶¶ 14, 15.) Counts V through VIII of the Complaint allege both negligent and willful violations of the Fair Credit Reporting Act (“FCRA”) against the CRAs for failing to conduct reasonable reinvestigation as required under 15 U.S.C. § 1681i and for failing to accurately report the post-bankruptcy payments as required under 15 U.S.C. § 1681e(b). (Id. at 11-16.)

         IV. Fair Credit Reporting Act

         To protect consumers from the transmission of incorrect personal information and to prevent meritless injury to credit, the FCRA mandates that a credit reporting agency must take “reasonable measures to assure maximum possible accuracy” of an individual's consumer report. 15 U.S.C. § 1681e(b); see also 15 U.S.C. § 1681i(a)(1)(A) (upon receipt of a reported inaccuracy, a consumer agency shall “conduct a reasonable reinvestigation to determine whether the disputed information is inaccurate.”). While generally the determination of whether a credit reporting agency's efforts were reasonable is a factual issue for a jury, dismissal “is appropriate when only one conclusion about the conduct's reasonableness is possible.” Gorman v. Wolpoff & Abramson, 584 F.3d 1147, 1157 (9th Cir. 2009).

         To state a prima facie claim of a violation of the FCRA, the claimant must allege (1) that there is an inaccuracy in the claimant's credit report; (2) that the claimant made the credit reporting agency aware of the inaccuracy; and (3) the credit reporting agency did not investigate the dispute or did not follow the principles stated in 15 U.S.C. §§ 1681(b)(1)(A)-(E). Garrity v. Capital One Nat'l Ass'n, No. CV-16-04432-PHX-JJT, 2017 WL 3772985, at *2 (D. Ariz. May 23, 2017) (citing Corns v. Residential Credit Sols., Inc., No. 2:15-cv-1233-GMN-VCF, 2016 U.S. Dist. LEXIS 27864, at *4 (D. Nev. Mar. 3, 2016)). To be inaccurate a statement must be “patently incorrect” or materially “misleading in such a way and ...