Courtright v. O'Reilly Auto.

• Decision Date: 17 March 2020
• Docket Number: WD 82684
• Citation: 604 S.W.3d 694
• Parties: Rebecca COURTRIGHT, et al., Appellants, v. O'REILLY AUTOMOTIVE, Respondent.
• Court: Missouri Court of Appeals

604 S.W.3d 694

Rebecca COURTRIGHT, et al., Appellants,

v.O'REILLY AUTOMOTIVE, Respondent.

WD 82684

Missouri Court of Appeals, Western District.

OPINION FILED: March 17, 2020

Application for Transfer to Supreme Court Denied September 1, 2020

Charles Brown, Gower, MO, Counsel for Appellants.

Jayson Watkins, Gower, MO, Co-Counsel for Appellants.

William Martucci, Kansas City, MO, Counsel for Respondent.

Kristen Page, Kansas City, MO, Co-Counsel for Respondent.

Before Division Two: Cynthia L. Martin, P.J., Thomas H. Newton, and Gary D. Witt, JJ.

Thomas H. Newton, Judge

Prospective employees, Ms. Rebecca Courtright; Mr. Anthony Bradley; Mr. Raphael Saye; and Mr. Juan Estrada, Appellants, appeal a Jackson county circuit court judgment granting a motion to dismiss in an action brought against O'Reilly Automotive Stores, Inc.; CSK Auto, Inc.; and O'Reilly Auto Enterprises, LLC (collectively, O'Reilly), Respondents, alleging violations of the Fair Credit Reporting Act (FCRA) arising from their revocation of conditional job offers due to consumer reports before disclosing the reports. We reverse in part and affirm in part.

Ms. Courtright applied to work at an O'Reilly Auto Parts store in January 2014. Ms. Courtright was given disclosure and authorization forms and authorized O'Reilly to procure her background report. She was extended an employment offer conditioned on satisfactorily completing a criminal-background check. Ms. Courtright though, had two felony identity-theft convictions that appeared on her background report. Ms. Courtright did not challenge the background report's contents or the two felony convictions. Due to Ms. Courtright's felony convictions, O'Reilly revoked the conditional employment offer. Ms. Courtright testified that the harm she suffered from the adverse action before disclosure was that she did not get the job and, thereafter, did not have the means to pay for a place to live.

Mr. Bradley applied to work for O'Reilly in March 2016. Mr. Bradley was given disclosure and authorization forms, and he authorized O'Reilly to procure his background report. He was extended an employment offer conditioned on satisfactorily completing a criminal-background check. O'Reilly requested Mr. Bradley's background report through a third-party vendor, General Information Services (GIS). GIS's background report erroneously indicated that Mr. Bradley had been found guilty of stealing leased or rented property and had been sentenced to 30-day's confinement, with a suspended execution of sentence. O'Reilly informed Mr. Bradley that he would not be extended the employment offer based on information in his background report. O'Reilly also informed Mr. Bradley he could dispute the report's accuracy directly with GIS.

O'Reilly did not furnish the report to Mr. Bradley, but he requested and received the erroneous report from GIS. Mr. Bradley disputed the errors in writing to GIS. GIS corrected the errors and passed along the correction to O'Reilly, which in turn, contacted Mr. Bradley with an employment offer in May 2016. Mr. Bradley accepted the offer and worked for O'Reilly until June 2016, when he voluntarily left. Mr. Bradley testified that the harm he suffered was that he was "without a paycheck" for a period of time, that his name was tarnished, and that he was made to look like a "liar."

Mr. Saye applied to work for O'Reilly in July 2013. Mr. Saye digitally completed and signed an employment application that gave notice of the background check, and he authorized O'Reilly to procure his background report. Mr. Saye's background report revealed a burglary charge and a scheduled court date for September 2013. Mr. Saye's attorney sent a letter to O'Reilly stating that the burglary charge had been dismissed on September 5, 2013, as part of a diversionary program, but that Mr. Saye was to return to court a year later, where he would be "sentenced to an infraction." Mr. Saye was not hired because of the burglary charge. Mr. Saye testified that the harm he suffered was that he did not obtain a job he expected and "slight harm" to his ego.

Mr. Estrada applied several times for employment with O'Reilly and was given disclosure and authorization forms, and he authorized O'Reilly to procure his background report. Mr. Estrada testified that he was aware that there was a disclosure in the employment-application process. Mr. Estrada was hired by and worked for O'Reilly. Mr. Estrada's employment was later terminated because he violated a company policy regarding drinks in company vehicles. Mr. Estrada testified that the harm he suffered from O'Reilly's report requests was that his credit score was negatively affected. Mr. Estrada also testified that he did not know if his credit score had actually been negatively affected. Ms. Courtright initially filed her complaint in March 2014 as a putative class action against only O'Reilly Automotive Stores, Inc., in the Jackson County Circuit Court. O'Reilly Automotive Stores, Inc., removed the action in April 2014 to the U.S. District Court for the Western District of Missouri.

While in federal court, Mr. Saye joined Ms. Courtright as a plaintiff, and together they filed a first-amended complaint. The federal court consolidated Ms. Courtright's and Mr. Saye's action in March 2015 with Mr. Estrada's separate action.¹ Ms. Courtright, Mr. Saye, and Mr. Estrada moved to remand the case to the Jackson County Circuit Court and, in September 2017, the federal court granted the motion. The federal court did not reach the merits of O'Reilly's summary-judgment motion, but instead declared it moot in light of the remand.

O'Reilly moved for dismissal of the first-amended complaint for lack of standing, and the Appellants moved for leave to file a second-amended complaint. The circuit court granted leave to do so in April 2018 and added Mr. Bradley as a plaintiff to the putative class action.

Appellants’ second-amended complaint contains four counts. As applicable to the individually named Plaintiff's, Count I is an adverse-action claim which alleges that O'Reilly violated the FCRA by obtaining a background report and taking adverse employment action based on the contents of such report without first providing Ms. Courtright, Mr. Bradley, and Mr. Saye an opportunity to "cure any inaccuracies" within the report. Count II is a disclosure claim and alleges that O'Reilly violated the FCRA by failing to properly disclose to Mr. Saye and Mr. Estrada that O'Reilly was procuring a background report. Count II also alleges that the requisite disclosure form "was buried in a hyperlink in the application process" and that it was possible to complete the application process without clicking on the hyperlink. Count IV is an authorization claim and alleges that O'Reilly violated the FCRA by procuring background reports without proper authorization from Mr. Saye and Mr. Estrada. Count V, brought by Mr. Saye, alleges that O'Reilly violated California's Unfair Competition Law. Count V is a derivative claim from Counts I, II, and IV, alleging that O'Reilly violated California's Unfair Competition Law by violating the FCRA.²

O'Reilly filed a "motion to dismiss" in November 2018, attaching and relying on several exhibits that were outside the pleadings. O'Reilly also included a statement of facts in numbered paragraphs. Appellants opposed O'Reilly's motion by attaching and relying on several exhibits, also outside the pleadings. Appellants responded to each of the numbered paragraphs in O'Reilly's statement of facts as either "controverted," "controverted in part," or "uncontroverted." Appellants also included their own additional statement of facts in response to O'Reilly's motion.

The circuit court held oral argument in February 2019 on the motion to dismiss and granted it for lack of standing. Appellants timely appealed.

Legal Analysis

The standard of review for an appeal from a dismissal for lack of standing is de novo. Dunn v. Precythe , 557 S.W.3d 454, 456 (Mo. App. W.D. 2018). Here, the trial court conducted a hearing for the motion to dismiss and considered matters outside the pleadings in making its judgment.³ "[W]hen the parties both submit matters outside the pleadings for the court's consideration," the parties "waive notice of the court's conversion of the matter into a motion for summary judgment, and they likewise waive compliance with Rule 74.04's procedural requirements." Lynch v. Hurley , 569 S.W.3d 33, 39 (Mo. App. W.D. 2019) (citations omitted). Here, the parties both submitted matters outside the pleadings for the court's consideration and, therefore, they acquiesced in treating this matter as a motion for summary judgment. Under these circumstances, the motion to dismiss was converted into a motion for summary judgment, and we will review it as such. Rule 55.27(a), (b); Naylor Senior Citizens Hous., LP v. Side Const. Co., Inc. , 423 S.W.3d 238, 241 n.1 (Mo. banc 2014).

A party is entitled to summary judgment when there is no dispute of material fact and the moving party is entitled to judgment as a matter of law. ITT Commercial Fin. Corp. v. Mid–Am. Marine Supply Corp. , 854 S.W.2d 371, 382 (Mo. banc 1993). If the [Respondents] can show that the undisputed material facts reveal that the plaintiff lacks standing, then they are entitled to judgment as a matter of law. Id. at 377. We make all reasonable inferences in favor of the non-moving party. Id. at 382.

The Appellants allege that the trial court erred in dismissing the claims in the second-amended complaint for lack of standing to bring the alleged FCRA violations because Appellant's allegations are sufficient to establish a concrete harm.

I. Adverse-Action Claims

In the first point, Ms. Courtright, Mr. Bradley, and Mr. Saye allege the circuit court erred in dismissing count I in the second-amended complaint based on lack of standing. A party's standing to bring an action is one of the requirements of justiciability under both federal and Missouri law. Corozzo...