Ritchie v. N. Leasing Sys., Inc.

• Decision Date: 31 March 2014
• Docket Number: No. 12-CV-4992 (KMK),12-CV-4992 (KMK)
• Parties: PATRICIA J. RITCHIE, Plaintiff, v. NORTHERN LEASING SYSTEMS, INC., LEASE FINANCE GROUP, LLC, RICARDO BROWN, ROBERT TAYLOR, and JOHN DOES 1-50, Defendants.
• Court: U.S. District Court — Southern District of New York

PATRICIA J. RITCHIE, Plaintiff, v. NORTHERN LEASING SYSTEMS, INC., LEASE FINANCE GROUP, LLC,RICARDO BROWN, ROBERT TAYLOR, and JOHN DOES 1-50, Defendants.

No. 12-CV-4992 (KMK)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

DATED: March 31, 2014

OPINION AND ORDER

Appearances:

Audrey Strutinskiy, Esq.

Krishnan Shanker Chittur, Esq.

Chittur & Associates, P.C.

New York, NY

Counsel for Plaintiff

Robert D. Lillienstein, Esq.

Scott Evan Silberfein, Esq.

Moses & Singer LLP

New York, NY

Counsel for Defendants

KENNETH M. KARAS, District Judge:

Patricia J. Ritchie ("Plaintiff") filed the instant Complaint against Ricardo Brown ("Brown"); Robert Taylor ("Taylor"); John Does 1-50 ("John Doe Defendants") (collectively, "Individual Defendants"); Lease Finance Group, LLC ("LFG"); and Northern Leasing Systems, Inc. ("NLS") (collectively, "Corporate Defendants") (collectively, "Defendants"), alleging four counts of violations of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 1681 et seq., and four counts of violations of arelated New York state law, the New York Fair Credit Reporting Act ("NYFCRA"), N.Y. Gen. Bus. Law §§ 380 et seq. (See Am. Compl. ("Compl.") (Dkt. No. 8).) Before the Court is Defendants' Motion To Dismiss the Complaint pursuant to Federal Rules of Civil Procedure 8(a), 9(b), and 12(b)(6). (See Notice of Mot. To Dismiss the First Am. Compl. ("Mot.") (Dkt. No. 13).) For the following reasons, Defendants' Motion is granted in part.

I. Background

A. Factual Background

The following facts are drawn from Plaintiffs' Complaint and are taken as true for the purposes of resolving the instant Motion. Defendant NLS is a New York corporation "ostensibly in the business of originating and servicing micro-ticket leases through itself and through over 100 shell entities." (Compl. ¶¶ 4-5.) Defendant LFG is a Delaware limited liability company and "is one of the shell entities managed and operated by [NLS]." (Id. ¶ 5.) NLS "has managed and operated, and continues to manage and operate, itself and [LFG] from the same offices in the same business using the same personnel with the same forms working with the same systems and employing the same modus operandi." (Id. ¶ 4; see also id. ¶ 5 (alleging that LFG "is a 'pass through' entity with no assets or employees of its own, and is managed, operated, serviced, controlled and dominated by [NLS]").) Defendants Brown and Taylor are, respectively, the Legal Recovery Director and Legal Collections Manager for NLS "and/or its principals and affiliates." (Id. ¶¶ 6-8.) John Doe Defendants "are either individuals or corporate entities affiliated with the other Defendants" that "have willfully or negligently engaged in the same wrongful conduct as alleged against Defendants." (Id. ¶ 9.)

Beginning in 2007, Plaintiff operated a "legal document preparation service." (Id. ¶ 12.) In October 2008, Plaintiff's business "leased a point-of-sale machine from a company called 'Merchant Made Easy.'" (Id. ¶ 13.) In doing so, she "submitted a voided check[] and a signed Merchant Processing Application" to that company. (Id.) She "did not sign any other agreements, contracts, guarantees or other commitments in connection with that transaction." (Id.)

In 2009, Plaintiff "closed the business and returned the machine to Merchant Made Easy." (Id. ¶ 14.) Then, in April 2010, Defendants—none of whom is "Merchant Made Easy"—"commenced harassing [Plaintiff]" by "call[ing] her repeatedly" and "rudely demanding payments under an alleged lease." (Id. ¶ 15.) In response to these phone calls, Plaintiff "categorically informed Defendants that she had never signed any lease with them, and demanded that they stop the harassment." (Id.) But Defendants "mercilessly" continued making these "abusive calls." (Id.)

Defendants then took a number of actions relating to Plaintiff's consumer credit report, all "under the name of Defendant [LFG]." (Id. ¶¶ 16-17.) First, Defendants "accessed" Plaintiff's consumer credit report "on or about August 20, 2010." (Id. ¶ 17.) Second, Defendants "made an adverse entry on [Plaintiff's] consumer credit report with the credit reporting agency Experian," which entry reflected that Defendants "had 'charged off $1,836" in money that Plaintiff allegedly owed. (Id. ¶ 16.) Third, Defendants again "accessed" Plaintiff's consumer credit report "on or about . . . December 8, 2010." (Id. ¶ 17.) With regard to the August 20 and December 8 incidents, Defendants "never provide[d] any advance or written notice to [Plaintiff] that they intended to pull her consumer credit report, or that such pulling was even a possibility."(Id.) Fourth, Defendants "commenced a lawsuit against [Plaintiff] in the New York City Civil Court" on February 16, 2011, which lawsuit is "pending." (Id. ¶¶ 18, 19 n.2.) Fifth, after Plaintiff "disputed th[e] adverse entry with the credit reporting agency Experian[] and demanded that Defendants investigate and rectify the inaccurate entry," "Defendants willfully failed and refused to conduct any investigation." (Id. ¶ 20-21.) Instead of "communicating with [Plaintiff]" about the dispute, "they summarily—and falsely—reported back to Experian that they had 'verified' the alleged loan to [Plaintiff]," allowing the adverse entry "to continue on [Plaintiff's] consumer credit report for at least seven years." (Id. ¶ 21.)

B. Procedural History

Plaintiff filed the initial Complaint in June 2012. (See Dkt. No. 1.) The Court held a premotion conference in October 2012, at which it granted Plaintiff leave to amend the Complaint. (See Dkt. (minute entry for Oct. 17, 2012).) Plaintiff thereafter filed an Amended Complaint in November 2012, alleging the same eight counts she had alleged in the original Complaint against the same Defendants. (See Dkt. No. 8.) The Court then held another premotion conference in March 2013 to discuss Defendants' renewed request to file a motion to dismiss. (See Dkt. (minute entry for Mar. 19, 2013).) Pursuant to the scheduling order entered after that conference, (see Dkt. No. 12), Defendants filed their Motion To Dismiss on May 17, 2013, (see Dkt. No. 13), Plaintiff filed a response on June 24, 2013, (see Dkt. No. 18), and Defendants filed a reply on July 15, 2013, (see Dkt. No. 21).

II. Discussion

A. Standard of Review

The Supreme Court has held that although a complaint "does not need detailed factual allegations" to survive a motion to dismiss, "a plaintiff's obligation to provide the 'grounds' of his [or her] 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Ail. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (second alteration in original) (citations omitted). Instead, the Court has emphasized that "[f]actual allegations must be enough to raise a right to relief above the speculative level," id., and that "once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint," id. at 563. A plaintiff must allege "only enough facts to state a claim to relief that is plausible on its face." Id. at 570. But if a plaintiff has "not nudged [his or her] claims across the line from conceivable to plausible, the[ ] complaint must be dismissed." Id.; see also Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) ("Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not 'show[n]'—'that the pleader is entitled to rellief.'" (alteration in original) (citation omitted) (quoting Fed. R. Civ. P. 8(a)(2))).

In considering Defendants' Motion To Dismiss, the Court is required to accept as true all factual allegations contained in the Complaint. See Ruotolo v. City of New York, 514 F.3d 184, 188 (2d Cir. 2008) ("We review de novo a district court's dismissal of acomplaint pursuant to Rule 12(b)(6), accepting all factual allegations in the complaint and drawing all reasonable inferences in the plaintiff's favor." (internal quotation marks omitted)); Gonzalez v. Caballero, 572 F. Supp. 2d 463, 466 (S.D.N.Y. 2008) (same). Moreover, "[i]n adjudicating a Rule 12(b)(6) motion, a district court must confine its consideration to facts stated on the face of the complaint, in documents appended to the complaint or incorporated in the complaint by reference, and to matters of which judicial notice may be taken." Leonard F. v. Isr. Disc. Bank of N.Y., 199 F.3d 99, 107 (2d Cir. 1999) (internal quotation marks omitted).

B. Analysis

In general, the FCRA provides a cause of action against "[a]ny person who willfully fails to comply" or who "is negligent in failing to comply" with an FCRA requirement. 15 U.S.C. §§ 1681n(a), 1681o(a). These requirements include a requirement "not [to] use or obtain a consumer report" for an impermissible purpose, id. § 1681b(f), and a requirement to "conduct an investigation," "review all relevant information," and "report the results of the investigation to [relevant] consumer reporting agenc[ies]" upon "receiving notice . . . of a dispute with regard to the completeness or accuracy of any information provided by a person to a consumer reporting agency," id. § 1681s-2(b)(1). See LaCourte v. JP Morgan Chase & Co., No. 12-CV-9453, 2013 WL 4830935, at *9 (S.D.N.Y. Sept. 4, 2013) ("[S]ection[] 1681s-2(b) . . . provide[s] for a private right of action against entities that furnish information to credit reporting agencies . . . ."); Perl v. Am. Express, No. 11-CV-7374, 2012 WL 178333, at *2 (S.D.N.Y. Jan. 19, 2012) ("To state a claim for civil liability based on [§ 1681b(f)], a plaintiff must allege both that the defendant used or obtained the plaintiff's credit report for an impermissiblepurpose, and that the violation was willful...