Newman v. Am. Honda Fin. Corp., 1:21CV3

• Court: United States District Courts. 4th Circuit. Middle District of North Carolina
• Writing for the Court: L. PATRICK AULD, UNITED STATES MAGISTRATE JUDGE
• Parties: TRACY NEWMAN, Plaintiff, v. AMERICAN HONDA FINANCE CORP., Defendant.[1]
• Docket Number: 1:21CV3
• Decision Date: 04 March 2022

TRACY NEWMAN, Plaintiff,
v.
AMERICAN HONDA FINANCE CORP., Defendant.^[1]

No. 1:21CV3

United States District Court, M.D. North Carolina

March 4, 2022

MEMORANDUM OPINION AND ORDER

L. PATRICK AULD, UNITED STATES MAGISTRATE JUDGE

This case comes before the Court on “Defendant American Honda Finance Corporation's Motion for Judgment on the Pleadings” (Docket Entry 16 (the “Motion”)). (See Docket Entry 14 (referring case to undersigned United States Magistrate Judge for disposition on consent of parties, pursuant to 28 U.S.C. § 636(c)).) For the reasons that follow, the Court will deny the Motion.

BACKGROUND

Tracy Newman (the “Plaintiff”) initiated this action against American Honda Finance Corporation (“Honda”), alleging that Honda “report[ed] inaccurate payment status information about Plaintiff's Honda account” in violation of the Fair Credit Reporting Act (“FCRA”). (Docket Entry 1 (the “Complaint”), ¶ 1.)

In particular, according to the Complaint:

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While Plaintiff's Honda account remained “closed with a $0 balance, [Honda] continued to report that the current payment status of the account was 60 days late.” (Id.) “This reporting was materially misleading because it conveyed that Plaintiff was currently delinquent on payments, when that was not the case.” (Id., ¶ 13.) “Honda qualifies as a ‘furnisher' of credit information under [] FCRA” (id., ¶ 4), such that it possesses an obligation, “upon receiving a consumer's dispute [regarding the accuracy of credit information], to conduct an investigation, mark the accounts as disputed, and update the reporting if necessary” (id., ¶ 9). After Plaintiff submitted a dispute in writing (id., ¶ 14), Honda “failed to conduct an investigation, failed to mark the account as disputed, and failed to correct the misleading reporting” (id., ¶ 17). “Plaintiff was later denied an extension of credit based on information contained in [her] TransUnion report, which included the misleading delinquency on the Honda account” (id., ¶ 18), and “[she] has been forced to deal with the aggravation, humiliation, and embarrassment of a low credit score” (id., ¶ 19).

Honda answered the Complaint, “den[ying] all material allegations of wrongdoing” (Docket Entry 4 (the “Answer”), ¶ 1) and asserting (as affirmative defenses) that “[Honda] conducted a reasonable investigation of all credit reporting disputes raised by Plaintiff” (id. at 7) and that “[Honda]'s reporting of Plaintiff's

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account [wa]s accurate” (id.). The parties thereafter engaged in discovery. (See Docket Entry 13 (Amended Joint Rule 26(f) Report); Text Order dated Apr. 22, 2021 (adopting Amended Joint Rule 26(f) Report).)

The day before the parties' agreed-upon deadline for Plaintiff to seek leave to amend pleadings (see Docket Entry 13 at 4), Honda filed the Motion, arguing that Plaintiff's claim failed as a matter of law (see Docket Entry 16 at 1; see also Docket Entry 17 (supporting memorandum)). Honda attached as exhibits to the Motion (i) a (redacted) 37-page document bearing the TransUnion logo and reflecting, inter alia, information about Plaintiff's automobile account with “American Honda Finance” (Docket Entry 16-1 (the “TransUnion Report”) at 3 (all-caps font omitted); see also id. at 2-38), (ii) a (redacted) seven-page document from creditkarma.com indicating that Plaintiff's American Honda Finance account remains closed (see Docket Entry 16-2 (together with the TransUnion Report, the “Reports”)), and (iii) a (redacted) copy of the written dispute that Plaintiff submitted to TransUnion on July 27, 2020 (see Docket Entry 16-3 (the “Dispute”) at 2-4). Plaintiff opposed the Motion (see Docket Entry 24 (the “Response”)) and sought leave to file an amended complaint “if the Court determines that the Complaint is deficient in any way” (id. at 17; see also Docket Entry 25-5 (proposed amended complaint)). Honda replied. (See Docket Entry 27.)

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DISCUSSION

I. Relevant Legal Standards

A. Judgment on the Pleadings

“[A] party may move for judgment on the pleadings” pursuant to Federal Rule of Civil Procedure 12(c) (“Rule 12(c)”) any time “[a]fter the pleadings are closed, ” as long as it moves “early enough not to delay trial, ” Fed.R.Civ.P. 12(c). Federal Rule of Civil Procedure 7 defines “pleadings” to include, in pertinent part, “a complaint” and “an answer to a complaint, ” Fed.R.Civ.P. 7(a)(1), (2). Under Rule 12(c), the Court (i) takes all factual allegations in the Complaint as true, (ii) takes all factual allegations in the Answer “as true only where and to the extent they have not been denied or do not conflict with the [C]omplaint, ” Alexander v. City of Greensboro, 801 F.Supp.2d 429, 433 (M.D. N.C. 2011) (internal quotation marks omitted), and (iii) “draws all reasonable factual inferences in [] favor [of] the nonmoving part[y], ” id. “The test applicable for judgment on the pleadings is whether or not, when viewed in the light most favorable to the party against whom the motion is made, genuine issues of material fact remain or whether the case can be decided as a matter of law.” Smith v. McDonald, 562 F.Supp. 829, 842 (M.D. N.C. 1983), aff'd, 737 F.2d 427 (4th Cir. 1984), aff'd, 472 U.S. 479 (1985). Accordingly, “a Rule 12(c) motion tests only the sufficiency of the [C]omplaint and does not resolve the merits of the plaintiff's

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claims or any disputes of fact.” Massey v. Ojaniit, 759 F.3d 343, 353 (4th Cir. 2014) (brackets and internal quotation marks omitted); see also id. at 347 (“Rule 12(c) motions are governed by the same standard as motions brought under [Federal] Rule [of Civil Procedure] 12(b)(6).” (internal quotation marks omitted)).

In connection with the foregoing inquiry, the “[C]ourt cannot consider matters outside the pleadings without converting the motion into one for summary judgment.” Columbia v. Haley, 738 F.3d 107, 116 (4th Cir. 2013). However, the Court may “consider a ‘written instrument' attached as an exhibit to a pleading, ” id. (quoting Fed.R.Civ.P. 10(c)), “as well as [documents] attached to the motion to dismiss [or motion for judgment on the pleadings], so long as they are integral to the complaint and authentic, ” id. (first set of brackets in original) (quoting Philips v. Pitt Cnty. Mem'l Hosp., 572 F.3d 176, 180 (4th Cir. 2009)). Beyond those caveats, if “matters outside the pleadings are presented to and not excluded by the [C]ourt, the [Rule 12(c)] motion must be treated as one for summary judgment under [Federal] Rule [of Civil Procedure] 56.” Fed.R.Civ.P. 12(d). In that circumstance, “[a]ll parties must be given a reasonable opportunity to present all the material that is pertinent to the motion.” Id. “[T]he term ‘reasonable opportunity' requires that all parties be given some indication by the [C]ourt . . . that it is treating the [relevant] motion as a motion for summary judgment, with the consequent right in the

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opposing party to file counter affidavits or pursue reasonable discovery.” Gay v. Wall, 761 F.2d 175, 177 (4th Cir. 1985) (ellipsis in original) (internal quotation marks omitted).

B. FCRA

“Congress enacted FCRA in 1970 to ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy.” Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52 (2007) (citing Pub. L. No. 91-508, § 602, 84 Stat. 1128 (codified as amended at 15 U.S.C. § 1681)). “To this end, FCRA requires [credit reporting agencies, (‘CRAs')] to follow procedures in reporting consumer credit information that both ‘meet[] the needs of commerce' and are ‘fair and equitable to the consumer.'” Saunders v. Branch Banking & Tr. Co., 526 F.3d 142, 147 (4th Cir. 2008) (second set of brackets in original) (quoting 15 U.S.C. § 1681(b)).

FCRA also imposes various duties on “furnishers” of consumer credit information. In that regard, “[Section] 1681s-2(a) . . . requires furnishers to report accurate information to CRAs, ” Timms v. USAA Fed. Sav. Bank, No. 3:18CV1495, 2020 WL 12618897, at *8 (D.S.C. Aug. 20, 2020) (unpublished), whereas “[Section] 1681s-2(b) . . . requires furnishers to take certain actions upon receipt of a dispute from a CRA, ” id. Although no private cause of action exists for violations of Section 1681s-2(a), individual consumers may enforce Section 1681s-2(b). See

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id.; accord Banks v. Stoneybrook Apartment, No. 1:99CV561, 2000 WL 1682979, at *2 (M.D. N.C. June 1, 2000) (unpublished), aff'd, 232 F.3d 888 (table), No. 00-1893, 2000 WL 1578331 (4th Cir. Oct. 19, 2000) (unpublished).

Under Section 1681s-2(b),

[i]f a consumer notifies a CRA that he disputes the accuracy of an item in his file, FCRA requires the CRA to notify the furnisher of the dispute. Upon receipt of this notice, a furnisher must:

(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; [and]

(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 . . . .

Saunders, 526 F.3d at 148 (brackets and ellipsis in original) (internal citation omitted) (quoting 15 U.S.C. § 1681s-2(b)(1)). Accordingly, a Section 1681s-2(b) claim against a furnisher consists of the following elements: “(1) there is a dispute over inaccurate information on a credit report that was furnished to the credit reporting agency . . .; (2) the credit reporting agency notified the [furnisher] of the dispute; and (3) [the furnisher] failed to undertake an investigation of the dispute.” Harris v. Suntrust Mortg., Inc., No. 12CV378, 2013 WL 1120846, at *5 n.13 (M.D. N.C. Mar. 18, 2013)...