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Eddins v. Cenlar FSB

United States District Court, W.D. Kentucky

August 12, 2013


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For Howard Wayne Eddins, Plaintiff: Kevin J. Fiet, LEAD ATTORNEY, Eddins Domine Law Group, PLLC, Louisville, KY.

For Cenlar FSB, Defendant: Katherine A. Bell, Richard A. Vance, LEAD ATTORNEYS, Stites & Harbison, PLLC - Louisville, Louisville, KY.

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John G. Heyburn II, United States District Judge.

Plaintiff, Howard Wayne Eddins, brings

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this action against Cenlar FSB (" Cenlar" ) [1] for allegedly furnishing inaccurate information about Eddins to consumer reporting agencies, which negatively affected his credit score. Specifically, Eddins poses the following six claims against Cenlar: Violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. (" FCRA" ) (Count IV), Negligence and Negligence Per Se (Count V), Defamation and Defamation Per Se (Count VI), Conversion (Count VII), Unjust Enrichment (Count VIII), and Breach of Fiduciary Duty (Count IX). Cenlar presently moves to dismiss Counts IV, V, VI, and IX. For the forgoing reasons, the Court will sustain Cenlar's motion in part and deny its motion in part.


At this stage in the litigation, the facts are largely undisputed. On April 10, 2009, Eddins executed a note and mortgage for $384,700 in favor of Taylor, Bean and Whittaker Mortgage Corp. (the " Loan" ) pertaining to property at 6719 Harrods View Circle, Prospect, Kentucky 40059 (the " Property" ). Taylor, Bean, and Whittaker either assigned the Loan or the servicing rights to the Loan to Cenlar. Sometime thereafter, Eddins obtained a copy of his credit report from Trans Union, a consumer reporting agency, which contained a notation that the Loan status was " Derogatory" . The ostensible reason for this status was a Chapter 13 bankruptcy filing (the " Disputed Item" ). The negative bankruptcy reference on the credit report was inaccurate; Eddins' wife, not Eddins, filed for Chapter 13 bankruptcy.

On December 15, 2010, Cenlar received a letter from Eddins informing it that the information it furnished about Eddins to credit reporting agencies was inaccurate. Later, Eddins sent a second notification of the inaccurate reporting. On August 9, 2010, Cenlar sent Eddins a letter confirming its mistake and apprising Eddins that it contacted and informed the major credit reporting agencies to remove any indication of bankruptcy from his credit profile. ECF No. 1-3. Based on this representation, Eddins believed that the inaccurate information would be removed.

On September 7, 2012, Eddins sold the Property in order to purchase a new home. He sent the proceeds from the sale to Cenlar on September 10, 2012 to pay off the remaining balance on the Loan. However, Cenlar did not credit the Loan balance for several days. Therefore, when Cenlar released the money it held for Eddins in escrow, it improperly reduced the amount of the account refund to Eddins. [2]

Also on September 10, 2012, having realized that the Disputed Item remained on his credit report through the course of selling the Property, Eddins directly contacted Trans Union to inform it that the Disputed Item was inaccurate. Trans Union replied on September 25, 2012, with the following: " We have previously verified as accurate the items that are listed below. Therefore, under the Fair Credit Reporting Act, we consider the dispute frivolous and we will not reinvestigate the item(s) unless you can provide court papers or a recent, authentic letter from the creditor(s) that explains what information

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should be updated. . . . Cenlar FSB . . ." ECF No. 1-4.

That day, Eddins contacted Cenlar to inform it of the continued presence of the Disputed Item on his credit report. On September 26, 2012, Cenlar responded stating that it " received [Eddins'] recent inquiry regarding [his] loan," that Eddins should " be advised that [it has] submitted a request to the four major credit agencies to remove the Bankruptcy indicator from [his] credit report," and that Eddins should further " be advised that this may take up to 30 days to reflect on [his] credit report." ECF No. 1-6.

On October 3, 2012, Eddins requested another credit report, assumedly from Trans Union. The Disputed Item remained. The following day, Eddins' counsel sent another letter to Trans Union disputing the inaccurate information. On October 11, 2012, Eddins was scheduled to close on the new home. During the closing, the mortgage broker told Eddins that the continued existence of the Disputed Item was directly impacting his loan interest rate and his ability to qualify for certain mortgage programs.

On November 5, 2012, Eddins' credit report request revealed that the Disputed Item remained. Resultantly, Eddins filed this lawsuit on February 4, 2013. Cenlar moves to dismiss a number of Eddins' claims under Federal Rule of Civil Procedure 12(b).


To survive a motion to dismiss, a plaintiff " must plead 'enough factual matter' that, when taken as true, 'state[s] a claim to relief that is plausible on its face.'" Fabian v. Fulmer Helmets, Inc., 628 F.3d 278, 280 (6th Cir. 2010) (quoting Bell A. Corp. v. Twombly, 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). " Plausibility requires showing more than the 'sheer possibility' of relief but less than a 'probab[le]' entitlement to relief." Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)). Accordingly, a complaint cannot " plead[] facts that are 'merely consistent with' a defendant's liability." Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557). A complaint also cannot satisfy its pleading burden through " labels and conclusions", or " a formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555. However, in reviewing a defendant's motion to dismiss, the Court will construe the complaint in the light most favorable to the plaintiff and accept factual allegations as true. See Logsdon v. Hains, 492 F.3d 334, 340 (6th Cir. 2007).


As a general matter, Eddins argues that because the parties have yet to conduct discovery, he should be permitted additional time to engage in discovery in order to flesh out his claims. However, this argument is not a basis for denying Cenlar's motion, because Cenlar advances five substantive arguments challenging the pleadings. The Court will address each in turn.


First, Cenlar argues that the FCRA contains no private right of action for Eddins to pursue his FCRA claims against Cenlar. As a furnisher of credit information, the FCRA regulates Cenlar's actions, but Cenlar can only be held liable in one of two ways under 15 U.S.C. § 1681s-2(a) and § 1681s-2(b). Many years ago, this Court thoroughly explained this remedial scheme in Stafford v. Cross Country Bank, ...

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