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Adams v. Fifth Third Bank

United States District Court, W.D. Kentucky, Louisville Division

February 9, 2017

DANA ADAMS, et al. PLAINTIFFS
v.
FIFTH THIRD BANK DEFENDANT

          MEMORANDUM OPINION AND ORDER

          Thomas B. Russell, Senior Judge

         This matter is before the Court upon Defendant Fifth Third Bank's motion for judgment on the pleadings. [DN 10.] Plaintiffs Dana Adams and Robert Jones have responded, [DN 13], and Fifth Third has replied, [DN 19]. Plaintiffs have also moved to supplement the record with certain items obtained during discovery. [DN 20]. Fully briefed, both motions are ripe for adjudication. For the following reasons, Plaintiffs' motion to supplement the record [DN 20] is GRANTED. Fifth Third's motion for judgment on the pleadings [DN 10] is GRANTED IN PART and DENIED IN PART.

         I. Facts and Procedural History

         The facts of this case, taken primarily from Plaintiffs' complaint, are largely undisputed. In 2004, Plaintiffs Dana Adams and Robert Jones executed a note and mortgage with Fifth Third Bank (Louisville), assumed name for Fifth Third Bank, Kentucky, Inc. [DN 13 at 2; DN 19 at 4.] Fifth Third Bank, Kentucky, Inc. later merged with Fifth Third Bank, Inc. (“Fifth Third”), the Ohio corporation that is the defendant in this suit. [DN 19-1 at 1.] ¶ 2009, Fifth Third filed a foreclosure action against Adams and Jones in Jefferson County, Kentucky Circuit Court. [DN 1 at 1.] Although its reason for doing so is unclear, Fifth Third voluntarily dismissed the 2009 suit and released the underlying mortgage by filing a Deed of Release with the Jefferson County Clerk. [Id.] Six years later, Fifth Third again sued Adams and Jones in Jefferson Circuit Court, attempting to collect upon the note that was the subject of the 2009 suit. [Id.] Fifth Third then moved for summary judgment in the 2015 suit, attaching to their motion a copy of the previously-released mortgage. [Id. at 2.] Plaintiffs' attorney contacted Fifth Third in early 2016 in an attempt to convince Fifth Third to dismiss the 2015 state court suit. [Id. at 3.] Fifth Third did not dismiss the case, but instead withdrew its motion for summary judgment. [Id.] The 2015 suit is still pending in Jefferson Circuit Court. [DN 10-1 at 2.]

         Plaintiffs allege that on or about March 31, 2016, after Fifth Third withdrew its motion, Fifth Third initiated “hard credit inquiries” for Plaintiffs' consumer credit reports. [Id.] Because neither Adams nor Jones had made an application for credit with Fifth Third near that time, they contend that Fifth Third's credit inquiries violated the Fair Credit Reporting Act (FCRA). [DN 1 at 6.] Specifically, Plaintiffs claim that Fifth Third “knowingly and intentionally violated the FCRA by requesting [Plaintiffs'] consumer credit reports for an impermissible purpose, ” and is liable to them for statutory damages of $1, 000 or their actual damages, whichever is greater, together with punitive damages, and attorney's fees. [Id.] In the alternative, Plaintiffs claim Fifth Third “negligently violated the FCRA, ” and are therefore liable to Plaintiffs for actual damages and attorney's fees. [Id.]

         Fifth Third answered, [DN 8], and then moved for judgment as a matter of law on the pleadings, [DN 10]. Plaintiffs responded, [DN 13; DN 18], and Fifth Third replied, [DN 19]. Plaintiffs also filed a motion to supplement their response, [DN 20], to which Fifth Third responded, [DN 23]. Fully briefed, this matter is ripe for adjudication.

         II. Standard of Review

         Under Rule 12(c) of the Federal Rules of Civil Procedure, “a party may move for judgment on the pleadings.” Fed.R.Civ.P. 12(c). Courts apply the same standard to motions for judgment on pleadings and motions to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Warrior Sports, Inc. v. Nat'l Collegiate Athletic Ass'n, 623 F.3d 281, 284 (6th Cir. 2010) (citing EEOC v. J.H. Routh Packing Co., 246 F.3d 850, 851 (6th Cir. 2001)). “For purposes of a motion for judgment on the pleadings, all well-pleaded material allegations of the pleadings of the opposing party must be taken as true, and the motion may be granted only if the moving party is nevertheless clearly entitled to judgment.” JPMorgan Chase Bank, N.A. v. Winget, 510 F.3d 577, 581 (6th Cir. 2007) (quoting Southern Ohio Bank v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 479 F.2d 478, 480 (6th Cir. 1973)). The Sixth Circuit has stated that a Rule 12(c) motion for judgment on the pleadings “is granted when no material issue of fact exists and the party making the motion is entitled to judgment as a matter of law.” Id. (quoting Paskvan v. City of Cleveland Civil Serv. Comm'n, 946 F.2d 1233, 1235 (6th Cir. 1991)).

         III. Discussion

         To establish Fifth Third's liability under the FCRA, Plaintiffs must prove that Fifth Third accessed their credit reports without a permissible statutory purpose. Although Fifth Third contends otherwise, Plaintiffs assert a sufficiently concrete injury-in-fact giving them standing to pursue this case. Moreover, a material issue of fact exists regarding the purpose for which Fifth Third accessed Plaintiffs' credit reports. Although Plaintiffs have failed to adequately plead a negligent violation of the FCRA under 15 U.S.C. § 1681o, their willful violation claims under § 1681n may proceed.

         A. Fair Credit Reporting Act

         The Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq., seeks to protect consumers from erroneous or arbitrary credit reporting. The FCRA, among other things, regulates the permissible uses of “consumer reports, ” defined by the statute as “any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness” that is used for an authorized purpose. 15 U.S.C. § 1681a(d)(1). Section 1681b delineates the exclusive circumstances under which a credit reporting agency may furnish a credit report. Pertinent to this case, “A consumer reporting agency may furnish a consumer report . . . to a person which . . . intends to use the information in connection with a credit transaction involving the consumer . . . and involving the . . . review or collection of an account.” Id. § 1681b(a)(3) (internal subdivisions omitted). To succeed on a claim of improper use or acquisition of a credit report, the plaintiff must prove three elements: “[1] that there was a ‘consumer report' within the meaning of the statute, [2] that the defendant used or obtained it, and [3] that the defendant did so without a permissible statutory purpose.” Bowling v. Scott Lowery Law Office, P.C., No. 5:13-CV-00091-TBR, 2014 WL 3942280, at *2 (W.D. Ky. Aug. 12, 2014) (citations omitted). When a defendant “willfully” violates the FCRA, it may be liable to the consumer for the consumer's actual damages or $1, 000 statutory damages, whichever is greater, together with costs, attorney's fees, and punitive damages. 15 U.S.C. § 1681n(a). A negligent violation of the FCRA, meanwhile, exposes a defendant to liability for the consumer's actual damages, costs, and fees. Id. § 1681o.

         Fifth Third advances several arguments seeking to show why it is not liable to Plaintiffs. First, Fifth Third contends that Plaintiffs have not sufficiently alleged a concrete injury-in-fact giving rise to Article III standing. Second, Fifth Third argues that it obtained Plaintiffs' credit reports for the permissible purpose of collecting a debt. Finally, Fifth Third claims that Plaintiffs cannot recover under § 1681n because they have not alleged that Fifth Third acted ...


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