Khoury v. Ford Motor Credit Co.
| Decision Date | 17 December 2013 |
| Docket Number | Case No. 13-11149 |
| Parties | Jonathan Khoury , Plaintiff, v. Ford Motor Credit Company, LLC, et al., Defendants. |
| Court | U.S. District Court — Eastern District of Michigan |
Honorable Nancy G. Edmunds
In this Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq., case, Plaintiff Jonathan Khoury alleges that Defendant Ford Motor Credit Company (Defendant Ford) and Defendant Suburban Ford of Sterling Heights (Defendant Suburban) knowingly violated the FCRA when one of Defendant Suburban's employees mistakenly placed Plaintiff's name on an allegedly incomplete credit application instead of Plaintiff's wife's name and Defendants ran Plaintiff's credit.
Before the Court are Defendant Ford, Defendant Suburban, and Plaintiff's motions for summary judgment. (Dkt. 23, 32, 33.) Also before the Court are Plaintiff's motion to amend and Defendant Suburban's motion for sanctions. (Dkt. 40, 31.)
The parties have stipulated to dismiss three of Plaintiff's claims against Defendants. The only claim left pending is that Defendants knowingly obtained a consumer report without a permissible purpose in violation of 15 U.S.C. § 1681b(f).
Plaintiff acknowledges that he cannot prove a knowing violation of the FCRA, so he has filed a motion to amend the complaint to add, basically 'substitute', a negligent cause of action against Defendants.
Because the Court agrees that there is no proof of a knowing violation of the FCRA, the Court GRANTS Defendant Ford and Defendant Suburban's motions for summary judgment and DENIES Plaintiff's motion for summary judgment.
Because the Court finds that discovery has closed and that Defendants would be prejudiced by an amended complaint, in conjunction with the fact that Defendants asserted from the outset that no knowing violation occurred and Plaintiff's counsel is both familiar with the FCRA and has alleged negligent violations of the FCRA in cases in this district, the Court DENIES Plaintiff's motion for leave to amend.
With regards to Defendant Suburban's motions for sanctions, the Court finds that Defendant Suburban has not shown that it complied with Rule 11's "safe harbor" provision and the Court finds that, although unprofessional, Plaintiff's counsel had a basis for filing the complaint and made a reasonable enough attempt at continuing the case so that sanctions would not be appropriate. The Court therefore DENIES Defendant Suburban's motion for sanctions.
On December 31, 2012, Plaintiff went to Suburban with his wife, so that his wife could purchase a vehicle. (Pl.'s Mot. for Summ. J., Ex. A, Pl.'s Aff. ¶¶ 1, 2.)
Plaintiff states that he never applied for credit when his wife purchased the vehicle. (Pl.'s Aff. ¶ 3.) He alleges that he never filled out any type of credit application with or gave permission to Suburban or Ford to access or review his credit report. (Id. ¶ 4.)
After his visit to Suburban, Plaintiff states that he found out that Ford or Suburban, or both, had obtained his consumer credit report from Experian. (Pl.'s Aff. ¶ 6.)
Around January 2, 2013, Plaintiff states that he contacted Suburban and asked it why it had obtained his credit report. (Pl.'s Aff. ¶ 7.) Plaintiff states that Suburban denied pulling the credit report. (Id.) Plaintiff then sent proof that Ford pulled the report; Suburban then admitted that it obtained his report. (Id. ¶ 8.) Plaintiff says that he then asked Suburban to remove the inquiry from his credit report. (Id. ¶ 9.) Plaintiff recounts that Suburban told him that removal would take two to three weeks. (Id.) Plaintiff then states, roughly three weeks later, the inquiry remained on his report and Suburban told him that removal would take two more weeks. (Id. ¶ 10.)
Around February 6, 2013, Plaintiff states that his credit report still contained the inquiry. (Pl.'s Aff. ¶ 11.)
Suburban states that it mistakenly sent Plaintiff's name on an application to Ford. (Pl.'s Mot. for Summ. J., Ex. C.)
Ford adds that it received a credit report regarding Plaintiff from Experian on December 31, 2012. (Pl.'s Mot. for Summ. J., Ex. D.).
Suburban provides more facts. It explains that Plaintiff, a Ford Motor Company employee, went to Suburban with his wife so that she could use his Ford employee discount. (Ford's Mot. for Summ. J., Ex. B, Arnold Aff. ¶ 5.) Suburban states that Plaintiff's wife purchased the vehicle in her own name and obtained financing on her own. (Id.)
Suburban details the mistake that occurred in this case. (Arnold Aff. ¶ 5.) Suburban explains that, to receive the Ford employee discount, Plaintiff's name would have appeared on the paperwork for Plaintiff's wife's financing and that Plaintiff would have provided hisdriver's license for discount verification purposes. (Id. ¶ 5.) Suburban then explains that, when it receives a driver's license, it stores the information into its system, named "Wilson." (Id. ¶ 6.) The company stores the information, it states, for proof of purchase and marketing purposes. (Id.)
Suburban states that, when its finance department filled out the credit application for Plaintiff's wife, it incorrectly inserted Plaintiff's name for his wife's name. (Arnold Aff. ¶ 7.) Suburban explains that its system then completed the credit application with Plaintiff's address and date of birth. (Id.)
Suburban maintains that, within minutes of Wilson creating the report on Plaintiff, it realized the mistake and corrected the mistake by placing Plaintiff's wife's name on the application. (Arnold Aff. ¶ 7.)
Suburban states that it "believed a credit report could not be run without a social security number," so its finance manager was not concerned about the mistake. (Arnold Aff. ¶ 8.) Suburban adds that "[n]o further attention was given to the application, as it was a mistake of which the dealership believed there would be no consequences, such as, a credit report being obtained." (Id.)
Suburban says that it and Plaintiff's wife conducted the car purchase without incident. (Arnold Aff. ¶ 9.)
Suburban acknowledges that Arnold, one its employees, told Plaintiff that Suburban "could not have run his credit since [Ford] had never obtained [Plaintiff's] social security number." (Arnold Aff. ¶ 10.) Arnold also admitted that Plaintiff did show him that Experian had run his credit report without the use of Plaintiff's social security number. (Id.)
Arnold stated that he contacted Ford after Plaintiff showed him his credit report. (Arnold Aff. ¶ 11.) Arnold said that he asked Ford to remove the inquiry from the report. (Id.) Arnold stated that he related to Plaintiff that Ford would remove the inquiry, but that the removal would take several weeks. (Id.) Several weeks passed, Arnold stated, and Plaintiff contacted Suburban again, informing it that the inquiry was still on his credit report and that he was going to contact his attorney. (Id. ¶ 12.)
On March 15, 2013, Plaintiff filed a four-count complaint against Defendants. (Dkt. 1.) Plaintiff alleged violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (Id.) Plaintiff first alleged that Defendants obtained Plaintiff's credit report under false pretenses, violating 15 U.S.C. § 1681q. (Id.) Plaintiff next alleged that Defendants knowingly obtained Plaintiff's consumer report without a permissible purpose, violating 15 U.S.C. § 1681b(f). Plaintiffs then claimed that Defendant willfully violated 15 U.S.C. § 1681b(f) by obtaining Plaintiff's consumer report without a permissible purpose. (Id.) And Plaintiff finally alleged that Defendants invaded his financial privacy. (Id.)
Plaintiff and Defendants stipulated to the dismissal of three of the four counts. (Dkt. 45.) The only claim that currently remains is Plaintiff's allegation that Defendants knowingly obtained Plaintiff's consumer report without a permissible purpose. (Id.)
Plaintiff has also filed a motion to amend the complaint. (Dkt. 40.)
A. Rule 12(b)(6) motion to dismiss standard of review
A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of a complaint. In a light most favorable to the plaintiff, the court must assume that the plaintiff's factual allegations are true and determine whether the complaint statesa valid claim for relief. See Albright v. Oliver, 510 U.S. 266 (1994); Bower v. Fed. Express Corp., 96 F.3d 200, 203 (6th Cir. 1996). To survive a Rule 12(b)(6) motion to dismiss, the complaint's "factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all of the allegations in the complaint are true." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations and emphasis omitted). See also Ass'n of Cleveland Fire Fighters v. City of Cleveland, Ohio, 502 F.3d 545, 548 (6th Cir. 2007). Ashcroft v. Iqbal, ______ U.S.______, 129 S. Ct. 1937, 1949 (2009). The court is "not bound to accept as true a legal conclusion couched as a factual allegation." Id. at 1950 (internal quotation marks and citation omitted). Moreover, "[o]nly a complaint that states a plausible claim for relief survives a motion to dismiss." Id. ...
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