Denton v. JPMorgan Chase & Co.
| Decision Date | 06 October 2020 |
| Docket Number | Civil No. 4:19cv114 |
| Court | U.S. District Court — Eastern District of Virginia |
| Parties | David D. Denton, Plaintiff, v. JPMorgan Chase & Co., JPMorgan Chase Bank, N.A., Experian Information Solutions, Inc., Equifax Information Services, LLC., Langley Federal Credit Union, Trans Union, LLC, Defendants. |
This matter is before the Court on several motions. First, a Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), ECF No. 43, and a Motion for Summary Judgment pursuant to Rule 56, ECF No. 48, filed by Defendants JPMorgan Chase & Co. and JPMorgan Chase Bank, N.A. (collectively, "Chase"). Second, a "Motion to Deny or Continue" Chase's Motion for Summary Judgment pursuant to Rule 56(d) filed by Plaintiff David D. Denton ("Plaintiff"). ECF No. 59. Third, a Motion to Dismiss pursuant to Rule 12(b)(6) filed by Defendant Experian Information Solutions, Inc. ("Experian"). ECF No. 46.
For the reasons stated below: (1) Chase's Motion to Dismiss is DENIED; (2) Plaintiff's Motion to Continue Chase's Motion for Summary Judgment is GRANTED and consideration of Chase's Motion for Summary Judgment is DEFERRED; and (3) Experian's Motion to Dismiss is GRANTED.
In 2017 and 2018, Plaintiff "exercised [his] right" under the Equal Credit Opportunity Act ("ECOA") by filing lawsuits against Chase alleging violations of the ECOA in regard to a Chase credit card ("the Chase Account"). Complaint ¶ 13, ECF No. 1. More specifically, Plaintiff claimed that Chase failed to provide Plaintiff with the required adverse notice when it issued him the Chase Account "on less favorable terms than he had applied for based on information in a consumer report." Id. ¶ 15. Plaintiff and Chase "resolved the matter by compromise" in September of 2018, and the lawsuits were dismissed in January 2019. Id. ¶ 14.2
In or around November 2018, Plaintiff "obtained a copy of his credit report and discovered that" Experian was "incorrectly reporting" a Langley Federal Credit Union ("LFCU") line of credit (the "LFCU Account") "as thirty (30) days late." Id. ¶ 30. On or about January 4, 2019, Plaintiff again reviewed hisconsumer reports "from all of the 'big three' national credit bureaus, TransUnion, Experian, and Equifax," and learned for the first time "that Chase had closed" the Chase Account. Id. ¶ 17. The credit report reflected that the Chase Account "was 'closed at the credit grantor's request' before or about January 4, 2019." Id. ¶ 18.3 Plaintiff states that he was surprised that the Chase Account was closed for a number of reasons: (1) the Account was "in good standing" and "had recent activity"; (2) Plaintiff "had been paying on time according to Chase's terms"; and (3) Plaintiff otherwise had "good credit." Id.
Sometime after Plaintiff reviewed his credit reports in January 2019, Chase "informed him that the Chase Account had been closed due to inactivity," id. ¶ 40, although it is unclear when or how this information was communicated to Plaintiff. Plaintiff states that Chase's claim that the account was inactive "was not correct because there had been a balance and recent payments made on the card on the date that" Experian was "reporting the account to have been closed." Id. Plaintiff alleges that because he never received notice from Chase that the Chase Account had been closed until more than thirty days had passed, Chase violated the "ECOA and its implementingregulations." Id. ¶¶ 19-20.4 Further, according to Plaintiff, given that he "was compliant with the terms of the credit" and that the account closure occurred within "close temporal proximity to the settlement and dismissal of [his previous] lawsuits," and "in the absence of a legitimate statement of reasons for the adverse action taken against" him, Chase closing the Chase Account was "obvious retaliation and prohibited credit discrimination under the ECOA." Id. ¶ 25.
On January 29, 2019, Plaintiff sent a letter to Experian "disputing the accuracy of the LFCU Account" with "dispositive evidence showing that the error was on the part of LFCU." Id. ¶¶ 31, 34. Plaintiff alleges "[u]pon information and belief" that Experian "forwarded the dispute to LFCU within five (5) business days of receiving [Plaintiff's] dispute." Id. ¶ 32.
In or around February 2019, Plaintiff again pulled a credit report and discovered that Experian was still reporting the Chase Account "as closed at the credit grantor's request." Id. ¶ 38. On February 29, 2019,5 Plaintiff sent a second letter to Experian disputing the accuracy of the Chase Account. Id. ¶¶ 39-40. In the letter, Plaintiff "explained that Chase had[since] informed him that the Chase Account had been closed due to inactivity." Id. ¶ 40. Although Plaintiff disputes that the account was inactive, he alleges that Experian's "reporting of [the] Chase Account as closed by the credit grantor is inaccurate inasmuch as the credit grantor now claims it was due to inactivity," and, therefore, "[t]he credit reports should have reflected that the account was closed due to inactivity rather than closed at credit grantor's request, if that were the true reason for closing the account." Id. ¶¶ 40, 48-49.6 Additionally, Plaintiff "reiterated his prior statement regarding the LFCU [A]ccount." Id. ¶ 40. Plaintiff alleges "[u]pon information and belief" that Experian forwarded these disputes "to Chase and LFCU within five (5) business days of receiving" them, and that "Chase received [Plaintiff's] disputes from Equifax, Experian, and Trans Union and failed to correct the erroneous information pertaining to [Plaintiff's] Chase [A]ccount." Id. ¶¶ 41, 53.
On or about March 2, 2019, "Experian responded to [Plaintiff's] dispute letter, indicating that it had corrected the LFCU Account." Id. ¶ 36. On or about April 11, 2019, Plaintiff again obtained his FICO credit report from Experian and discovered that "Experian finally stopped reporting the LFCUAccount as thirty (30) days late but still inaccurately reported the Chase [A]ccount as 'Closed At [the] Credit Grantor's Request.'" Id. ¶ 42 (alteration in original). On or about August 1, 2019, Plaintiff obtained his FICO credit report from Experian a final time and discovered that "Experian continued to inaccurately report that the Chase account was 'Closed At [the] Credit Grantor's Request.'" Id. ¶ 44 (alteration in original).
As a result of both Chase's and Experian's conduct, Plaintiff alleges that he "has sustained actual damages including, but not limited to embarrassment, anguish, and emotional and mental pain." Id. ¶ 61. Plaintiff alleges he "has further suffered physical injury as a result of emotional distress, lost time and income, emotional distress, inconvenience, fear of applying for credit he needs for his livelihood, strain on his relationships, and damage to his reputation." Id. ¶ 27. Plaintiff also allegedly "suffered actual economic damages because he is subjected to less favorable credit terms and interest rates." Id. ¶ 62. Plaintiff further alleges that "[c]reditors and users of credit information treat the closure of an account at the credit grantor's request when there is a balance as a negative event," meaning that "such closure has a negative effect both on [Plaintiff's] credit score and his credit worthiness," and that the closure of the Chase Account further caused him injury"because he no longer had access to the line of credit that he was, in fact, utilizing." Id. ¶ 21. Moreover, Plaintiff claims that Defendants inflicted these damages on Plaintiff despite "[a]ll Defendants [being] aware of their duties under the Fair Credit Reporting Act [("FCRA")]," including their "obligations to conduct reasonable investigations of disputes according to Johnson v. MBNA Am. Bank, N.A., 357 F.3d 426 (4th Cir. 2004)." Id. ¶ 63.7
On November 11, 2019, Plaintiff filed his Complaint against the six named defendants.8 The Complaint includes four counts; Counts One, Two, and Four allege violations by Chase. Count One alleges that Chase violated 15 U.S.C. § 1691(d) of the ECOA by failing "to provide a notice containing the truthful, primary reason for taking [the] adverse action of closing [the Chase Account] within 30 days of closing [the] [A]ccount." Id. ¶¶ 64-66. Count Two alleges that Chase violated 15 U.S.C. § 1691(a)(3) of the ECOA by discriminating "against [Plaintiff] in retaliation for the good faith exercise of his rights under the ECOA." Id. ¶¶ 67-69. Count Four alleges that Chaseviolated 15 U.S.C. § 1681s-2(b) of the FCRA either willfully/recklessly or negligently by failing "to properly investigate Plaintiff's dispute" and failing "to correct the inaccurate information." Id. ¶¶ 79-95. Plaintiff alleges that Chase is liable for "actual, statutory and punitive damages, costs and attorney's fees" for the alleged ECOA violations. Id. ¶ 26. Plaintiff further alleges that Chase is liable for "actual damages, statutory damages, costs and attorney's fees" under 15 U.S.C. § 1681o for negligent violations of the FCRA, as well as punitive damages under 15 U.S.C. § 1681n if Chase acted willfully/recklessly. Id. ¶¶ 91-95.
Only Count Three advances a claim against Experian, although it alleges several violations of the FCRA: (1) 15 U.S.C. § 1681e(b) "by failing to establish and/or follow reasonable procedures to assure maximum possible accuracy in the preparation of Plaintiff's credit reports and credit files it published and maintained concerning the Plaintiff"; (2) § 1681i(a)(1) "by failing to conduct a reasonable reinvestigation to determine whether the disputed information was accurate and record the current status of the disputed information or delete the item from Plaintiff's credit report"; (3) § 1681i(a)(2)(A) "by failing to provide Defendants LFCU and Chase all of the relevant information regarding Plaintiff and his dispute"; and (4) § 1681i(a)(5)(A) "by failing to promptlydelete the disputed inaccurate information...
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