Royer v. Discover Fin. Servs.
| Docket Number | Civil Action 22-1429 |
| Decision Date | 07 November 2023 |
| Parties | RANDALL ROYER et al., Plaintiffs, v. DISCOVER FINANCIAL SERVICES, INC., Defendant. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Plaintiffs Randall Royer, Nour Goda, and Ramon Royer initiated this action based, in large part, on an allegedly deficient investigation by Defendant Discover Financial Services, Inc. (“Discover”) into a charge for construction services that Plaintiffs claim were never delivered. Presently before the Court is Discover's Motion to Dismiss (ECF No. 18), Plaintiffs' Motion for Temporary Restraining Order (ECF No. 12), and Plaintiffs' Motion for Sanctions (ECF No. 14). For the following reasons, the Court grants in part and denies in part Discover's Motion, denies Plaintiffs' Motion for Temporary Restraining Order, and denies without prejudice Plaintiffs' Motion for Sanctions.
Plaintiffs Randall Royer and Nour Goda sought to renovate their basement to accommodate Mr. Royer's father, Plaintiff Ramon Royer by eliminating his need to climb stairs in their home. (Second Am. Compl. ¶¶ 10, 12, ECF No. 11.) In April 2021, Plaintiffs made a $9,000 down payment with a contractor, Daley's Construction Services, using a credit card issued by Defendant Discover Financial Services, Inc. (“Discover”). (Id. ¶ 12.) This charge first appeared on Plaintiffs' credit card statement on April 17, 2021. (Id. ¶ 13.)
Daley's was to complete its work no later than Fall 2021. (Id. ¶ 12.) But in September 2021, after calling the contractor and, later, speaking with a Lehigh County detective, Plaintiffs concluded that the contractor had defrauded them. (Id. ¶ 16.) In fact, the owner of Daley's has apparently been arrested and faces charges in Lehigh County court, including for conduct relating to Plaintiffs' renovation. (Id. ¶¶ 16, 34.) Plaintiffs then allegedly notified Discover-through a website listed on the relevant cardmember agreement-that the $9,000 charge was fraudulent. (Id. ¶ 19.) The first credit card statement issued following Plaintiffs' notice reached Plaintiffs on October 18, 2021. (Id. ¶ 20.) Discover concluded its investigation and sent Plaintiffs a letter on November 10, 2021, which explained that Discover found the charge to be valid after obtaining a receipt from Daley's for the $9,000 down payment. (Id. ¶ 21.) Based on Plaintiffs' subsequent interaction with several of Discover's representatives, Plaintiffs claim that Discover failed to investigate whether Daley's had actually rendered the promised services. (Id. ¶¶ 22-24.)
To preserve their claims for this action, Plaintiffs asked Discover to exclude the disputed charge from the calculation of their monthly minimum payments. (Id. ¶ 30.) After Discover allegedly refused, Plaintiffs stopped making payments on their account altogether, leading Discover to cancel the card and report Plaintiffs' nonpayment to credit agencies. (Id. ¶¶ 30-32.) Plaintiffs claim that this action harmed their credit scores and caused another lender to cancel the credit card it issued to Plaintiffs. (Id. ¶ 33.) They also claim that these adverse effects to their credit, together with Plaintiffs' present inability to recoup the $9,000 down payment at issue in this case, prevent Plaintiffs from hiring another contractor. (Id. ¶ 28.) Accordingly, Plaintiffs initiated this lawsuit, in which they seek relief under the Fair Credit Billing Act (“FCBA”; Count I), the Pennsylvania Unfair Trade Practices and Consumer Protection Law (“UTPCPL”; Count II), and negligence (Count III).
On the same day that Plaintiffs filed their Second Amended Complaint, they also requested an order from this Court “requiring the Defendant to charge back the disputed amount in this case and report to any credit reporting agencies that derogatory information concerning the disputed account should be deleted.” (Pls.' TRO Mot. at 1, ECF No. 12.) The urgency of these renovations is demonstrated, they argue, by a subsequent fall and injury sustained by Plaintiff Ramon Royer. (Id. at 3; see also Second Am. Compl. ¶ 29.) Not long thereafter, they also filed a motion for sanctions concerning the availability of their online communications with Discover. Discover subsequently moved to dismiss the Second Amended Complaint.
The Court has jurisdiction over the claims in this matter pursuant to 28 U.S.C. § 1331, as Plaintiffs bring suit under a federal law, the FCBA. The Court has supplemental jurisdiction over Plaintiff's state law claims pursuant to 28 U.S.C. § 1367. Venue is proper under 28 U.S.C. § 1391(b)(2) because Plaintiffs' home, where the renovations were to be performed, is within this District, making this District one in which a substantial part of the events or omissions giving rise to the claims occurred.
A plaintiff's “complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations omitted). To meet this standard, a complaint must plead “more than a sheer possibility that a defendant has acted unlawfully.” Id. at 787. The Third Circuit has developed a three-part framework in this analysis: (1) a plaintiff must present enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary elements; (2) a plaintiff's claims may not be merely conclusory; and (3) where there are well-pleaded factual allegations, the court should assume their truth and then determine if they plausibly entitle a plaintiff to relief. Connelly v. Lane Constr. Corp., 809 F.3d 780, 787-89 (3d Cir. 2016). In this analysis, the Court must assume all nonconclusory factual allegations to be true, construe those truths in the light most favorable to the plaintiff, and draw all reasonable inferences therefrom. Id. at 790.
Our analysis, however, changes somewhat when a party represents itself pro se. The Supreme Court requires us to “liberally construe” a pro se document. Estelle v. Gamble, 429 U.S. 97, 106 (1976). A pro se complaint, “however inartfully pleaded,” must be held to “less stringent standards than formal pleadings drafted by lawyers” and can only be dismissed for failure to state a claim if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Haines v. Kerner, 404 U.S. 519, 520-21 (1972). Our Court of Appeals further instructs us to permit a curative amendment if a complaint is vulnerable to dismissal for failure to state a claim, unless amendment would be inequitable or futile. Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002). Notwithstanding this leniency, however, a pro se plaintiff's complaint “must still meet Twombly and Iqbal's plausibility standard.” Itiowe v. Trentonian, 620 Fed.Appx. 65, 68 (3d Cir. 2015).
The Truth in Lending Act, to which Congress later added the provisions of the FCBA, “is a remedial statute and should be construed liberally in favor of the consumer.” Ramadan v. Chase Manhattan Corp., 156 F.3d 499, 502 (3d Cir. 1998) (citing Johnson v. McCrackin-Sturman Ford, Inc., 527 F.2d 257, 262 (3d Cir. 1975)). The FCBA, in turn, imposes certain obligations on a creditor, such as Discover, if that creditor, “within sixty days after having transmitted to an obligor a statement of the obligor's account . . ., receives at the [statutorily appropriate] address . . . a written notice . . . from the obligor in which the obligor . . . sets forth or otherwise enables the creditor to identify the name and account number (if any) of the obligor, . . . indicates the obligor's belief that the statement contains a billing error and the amount of such billing error, and . . . sets forth the reasons for the obligor's belief (to the extent applicable) that the statement contains a billing error.” 15 U.S.C. § 1666(a). Once a creditor has received that written notice, the creditor must, “not later than thirty days after the receipt of the notice, send a written acknowledgment thereof to the obligor,” and “not later than two complete billing cycles of the creditor (in no event later than ninety days) after the receipt of the notice and prior to taking any action to collect the amount, . . . make appropriate corrections in the account of the obligor” or “send a written explanation or clarification to the obligor, after having conducted an investigation, setting forth to the extent applicable the reasons why the creditor believes the account of the obligor was correctly shown in the statement ....” Id.
This case presents the question, largely unaddressed by existing case law, of the recourse available to an obligor who lacks reason to believe that a charge is fraudulent until more than sixty days after the obligor received the initial credit card statement reflecting the charge. On the one hand, pursuant to the foregoing language of the FCBA, the sixty-day clock begins to tick upon transmission of the erroneous statement without regard (in Discover's view) to the obligor's discovery of reasons to believe that a charge was made in error. 15 U.S.C. § 1666(a); see also 12 C.F.R. § 1026.13(b)(1) (). On the other hand, that same FCBA provision requires a complaining obligor to include in his or her written notice “the reasons for the obligor's belief (to the extent applicable) that the...
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