Wolfe v. Mbna America Bank
| Decision Date | 25 April 2007 |
| Docket Number | No. 05-2972.,05-2972. |
| Citation | 485 F.Supp.2d 874 |
| Parties | Mark L. WOLFE, Plaintiff, v. MBNA AMERICA BANK, Defendant. |
| Court | U.S. District Court — Western District of Tennessee |
Perry A. Craft, Tim W. Smith, Craft & Sheppard, PLC, Brentwood, TN, for Plaintiff.
Chad D. Graddy, Leo Maurice Bearman, Jr., Baker Donelson Bearman Caldwell & Berkowitz, Memphis, TN, for Defendant.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS PLAINTIFF'S FOURTH AMENDED COMPLAINT
Before the Court is Defendant MBNA America Bank's ("Defendant") Motion to Dismiss Plaintiffs Fourth Amended Complaint (D.E.# 58) made pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Plaintiff Mark Wolfe ("Plaintiff') filed his Fourth Amended Complaint on September 15, 2006, alleging a claim under the Tennessee Consumer Protection Act of 1977 ("TCPA"), Tenn.Code Ann. § 47-18-104(a)-(b), as well as claims for negligence, gross negligence, and defamation. Defendant asserts that dismissal is proper on the following grounds: (1) Defendant has no common law duty to verify the authenticity and accuracy of a credit account application before issuing a credit card; (2) Plaintiffs negligence, gross negligence, defamation, and TCPA claims, as they relate to the furnishing of information to credit reporting agencies, are preempted by § 1681h(e) and § 1681t(b)(1)(F) of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 1681 to 1681x; (3) Defendant's alleged conduct does not fall within the scope and purpose of the TCPA; and (4) Plaintiff is not entitled to an `injunction because Plaintiff cannot establish a reasonable likelihood of success on the merits. Jurisdiction is proper under 28 U.S.C. § 1332. For the reasons stated herein, Defendant's motion to dismiss is GRANTED in part and DENIED in part.
Plaintiff, now a twenty-seven year old male, is a resident of the State of Tennessee. (Fourth Am. Compl. ¶ 1.) In or about April 2000, Defendant received a credit account application in Plaintiffs name from a telemarketing company. (Id. ¶¶ 5-7.) The application listed Plaintiffs address as 3557 Frankie Carolyn Drive, Apartment 4, Memphis, Tennessee 38118. (Id.) Plaintiff did not reside and had never resided at this address. (Id.)
Upon receipt of the application, Defendant issued a credit card bearing Plaintiffs name to an unknown and unauthorized individual residing at the address listed on the application. (Id. ¶ 9.) Plaintiff alleges that Defendant, prior to issuing the card, did not attempt to verify whether the information contained in the credit account application was authentic and accurate. (Id. ¶¶ 9A-9D.) After receiving the card, the unknown and unauthorized individual charged $864.00 to the credit account, exceeding the account's $500.00 credit limit. (Id. ¶¶ 12-13.) When no payments were made on the account, Defendant, without investigating whether the account was obtained using a stolen identity, declared the account delinquent and transferred the account to NCO Financial Systems, Inc. ("NCO"), a debt collection agency. (Id. ¶¶ 15B-15C.) Defendant also notified various credit reporting agencies that the account was delinquent. (Id. ¶ 26.)
In order to collect the debt on the delinquent account, NCO hired an attorney, who discovered Plaintiffs actual address. (Id. ¶¶ 19-20.) The attorney, in a letter dated November 29, 2004, notified Plaintiff of the delinquent account and requested payment. (Id. ¶¶ 21-22.) Upon receipt of this letter, Plaintiff contacted the attorney to inquire about the account, but was told that he would receive information about the account in thirty (30) days. (Id. ¶ 24.) Plaintiff never received any further information. (Id. ¶ 25.)
In January 2005, Plaintiff applied for a job with a bank, but Plaintiff was not hired due to his poor credit score. (Id. ¶ 29.) Following this denial, Plaintiff contacted Defendant numerous times to dispute the delinquent account but was unable to obtain any "adequate or real explanation" from Defendant. (Id. ¶¶ 30-32.) At some point in time, Defendant mailed a notice of arbitration proceedings to the address listed on the credit account application, which subsequently resulted in an arbitration award against Plaintiff. (Id. ¶ 35.) Despite Plaintiff notifying Defendant that his identity was stolen, Defendant continues to list the credit account bearing Plaintiffs name as delinquent and has not corrected the information provided to credit reporting agencies regarding the account. (Id. ¶ 33.)
A motion to dismiss for failure to state a claim only tests whether the plaintiff has pleaded a cognizable claim. Scheid v. Fanny Farmer Candy Shops, Inc., 859 F.2d 434, 436 (6th Cir.1988). Essentially, it allows the court to dismiss meritless cases which would otherwise waste judicial resources and result in unnecessary discovery. See, e.g., Neitzke v. Williams, 490 U.S. 319, 326-27, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989).
The Supreme Court has held that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); see also Neitzke, 490 U.S. at 326-27, 109 S.Ct. 1827; Lewis v. ACB Bus. Serv., Inc., 135 F.3d 389, 405 (6th Cir.1998). Thus, the standard to be applied when evaluating a motion to dismiss for failure to state a claim is very liberal in favor of the party opposing the motion. Westlake v. Lucas, 537 F.2d 857, 858 (6th Cir.1976). Even if the plaintiffs chances of success are remote or unlikely, a motion to dismiss should be denied.
To determine' whether a motion to dismiss should be granted, the court must first examine the complaint. The complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P 8(a). The complaint must provide the defendant with "fair notice of what the plaintiffs claim is and the grounds upon which it rests." Conley, 355 U.S. at 47, 78 S.Ct. 99; Westlake, 537 F.2d at 858. The plaintiff, however, has an obligation to allege the essential material facts of the case. Scheid, 859 F.2d at 436-37.
In reviewing the complaint, the court must accept as true all factual allegations in the complaint and construe them in the light most favorable to the plaintiff. Windsor v. The Tennessean, 719 F.2d 155, 158 (6th Cir.1983). Indeed, the facts as alleged by the plaintiff cannot be disbelieved by the court. Neitzke, 490 U.S. at 327, 109 S.Ct. 1827; Murphy v. Sofamor Danek Group, Inc., 123 F.3d 394, 400 (6th Cir.1997). Where there are conflicting interpretations of the facts, they must be construed in the plaintiffs favor. Sinay v. Lamson & Sessions Co., 948 F.2d 1037, 1039-40 (6th Cir.1991). However, legal conclusions or unwarranted factual inferences should not be accepted as true. Lewis, 135 F.3d at 405-06.
As a preliminary matter, the Court notes that Defendant, in moving for dismissal of Plaintiffs TCPA, negligence, gross negligence and defamation claims, has also asserted that "Plaintiffs claim for an injunction should be dismissed because Plaintiff cannot establish a likelihood of success on the merits of this case, and also because the Fair Credit Reporting Act preempts injunctive relief based on state law." (Def.'s Mot. Dismiss Fourth Am. Compl. 2.) Although Plaintiff, in his Fourth Amended Complaint, does assert that he is entitled to "an immediate, temporary, or permanent injunction," (See Fourth Am. Compl. ¶ 69), Plaintiff has neither filed a motion seeking temporary injunctive relief nor specifically indicated what conduct he seeks to enjoin. Accordingly, Defendant's. motion to dismiss as to Plaintiffs injunctive claim is DENIED without prejudice.
In his Fourth Amended Complaint, Plaintiff asserts that Defendant was negligent and/or grossly negligent in two different factual contexts. First, Plaintiff alleges that Defendant had a duty to verify "the accuracy and authenticity of a credit application completed in Plaintiffs name before issuing a credit card." (Fourth Am. Compl. ¶¶ 49, 53A.) Second, Plaintiff alleges that Defendant had a duty to investigate "the accuracy and authenticity of a credit application completed in Plaintiffs name ... before transferring the account to NCO for collection, [and] before falsely reporting Plaintiffs delinquency to various credit reporting agencies." (Id. ¶ 49.) Plaintiff alleges that Defendant failed to comply with both duties, and thus, is negligent and/or grossly negligent.
In Tennessee, negligence is established if a plaintiff demonstrates: "(1) a duty of care owed by the defendant to the plaintiff; (2) conduct falling below the applicable standard of care amounts to a breach of that duty; (3) an injury or loss; (4) causation in fact; and (5) proximate, or legal cause." Leatherwood v. Wadley, 121 S.W.3d 682, 693-94 (Tenn.Ct.App.2003) (citing Bradshaw v. Daniel, 854 S.W.2d 865, 869 (Tenn.1993)). To establish gross negligence, a plaintiff "must demonstrate ordinary negligence and must then prove that the defendant acted `with utter unconcern for the safety of others, or ... with such reckless disregard for the rights of others that a conscious indifference to consequences is implied in law'...." Menuskin v. Williams, 145 F.3d 755, 766. (6th Cir.1998) (quoting Odum v. Haynes, 494 S.W.2d 795, 807 (Tenn.Ct.App.1972)).
Because Plaintiffs negligence and gross negligence claims differ substantially depending on the factual context in which the claims are alleged, the Court will analyze Defendant's arguments regarding the duty to verify and duty to investigate separately.
Addressing the first context or duty, Defendant asserts...
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