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DALEY v. HADDONFIELD LUMBER INC.

November 6, 1996

JOSEPH DALEY, Plaintiff,
v.
HADDONFIELD LUMBER INC., BAY CLUB CONDOMINIUM ASSOCIATION, THOMAS BAIRD, and ROBERT ZEGLEY, Defendants.



The opinion of the court was delivered by: BROTMAN

 Brotman, District Judge

 Presently before the court is plaintiff's Motion for Judgment on the Pleadings pursuant to Federal Rule of Civil Procedure 12(c) against defendants Bay Club Condominium Association and Robert Zegley for alleged violations of the Federal Credit Reporting Act, 15 U.S.C. § 1681 et seq. (1982 & Supp. 1996) (hereinafter "FCRA"). Upon review of the pleadings and the submissions of the parties, and for good cause and the reasons set forth below, the court grants the motion.

 I. PLAINTIFF'S ALLEGATIONS

 Plaintiff, Joseph Daley (Daley), brings this action to recover damages from defendants Haddonfield Lumber Inc. (Haddonfield Lumber), Bay Club Condominium Association (Bay Club), Thomas Baird (Baird), and Robert Zegley (Zegley), jointly and severally, for violations of the FCRA. *fn1" Specifically, plaintiff alleges that Bay Club and its agents obtained plaintiff's credit report from Credit Bureau Associates without the knowledge or consent of the plaintiff. Plaintiff further alleges that defendant Zegley--who is both a Haddonfield Lumber employee and a member of the Bay Club Board of Directors--improperly requested the report in his capacity as a Haddonfield Lumber employee, intending in fact to obtain it for the sole benefit of Bay Club. Plaintiff avers that Zegley supplied defendant Bay Club with the report which was circulated among the Bay Club Board of Directors and subsequently filed in the Bay Club manager's office.

 Plaintiff claims he has suffered emotional distress, upset, and anxiety, as well as professional and business losses because defendants have disclosed his negative credit report to the public. Plaintiff claims defendants willfully and maliciously violated the FCRA, causing actual and punitive damages in the amount of $ 550,000. Plaintiff further contends that to the extent defendants' non-compliance with the FCRA was negligent, plaintiff is entitled to actual damages in the amount of $ 50,000, in addition to court costs and reasonable attorney's fees.

 II. DEFENDANTS' RESPONSE

 Defendants Zegley and Bay Club admit that Zegley requested the plaintiff's credit report through Haddonfield Lumber. (Ans. at P 12.) Defendants further admit that Zegley acquired the credit report at the request of and for the benefit of Bay Club. (Ans. at PP 13-14.) However, defendants deny requesting plaintiff's credit report for an improper purpose. *fn2" Defendants argue, moreover, that a genuine issue of material fact exists as to whether they had a permissible purpose to obtain plaintiff's credit report. In particular, Zegley and Bay Club maintain that they were entitled to the report because plaintiff wished to purchase a boat slip from Bay Club. This, defendants contend, constituted a "legitimate business transaction" under section 1681b(3)(E) of the FCRA and allowed them to obtain plaintiff's credit report. *fn3"

  In a Counterclaim, Bay Club asks the court to exercise supplemental jurisdiction pursuant to 28 U.S.C. § 1367 to find that plaintiff, as an owner of a Bay Club unit, is liable to defendants for nonpayment of fees related to his unit. *fn4" Bay Club also argues that its contractual relationship with the plaintiff demonstrates that Bay Club had a permissible business purpose to request plaintiff's consumer report, thus establishing a genuine issue of material fact to preclude judgment on the pleadings. *fn5"

 II. DISCUSSION

 A. Standard For Judgment On The Pleadings

 This court will grant a motion for judgment on the pleadings if the moving party establishes that no material issue of fact remains to be resolved and that the movant is entitled to judgment as a matter of law. Jablonski v. Pan American World Airways, Inc., 863 F.2d 289, 290 (3d Cir. 1988). The district court views the pleadings and all reasonable inferences therefrom in the light most favorable to the non-moving party. Alken v. Lerner, 485 F. Supp. 871, 873 (D.N.J. 1980). The court will accept as true the well-pleaded allegations of the non-movant's pleadings and reject as false all the contravening assertions in the movant's pleadings. Society Hill Civic Ass'n v. Harris, 632 F.2d 1045, 1058 (3d Cir. 1980), disagreed with on other grounds, Martin v. Wilks, 490 U.S. 755, 104 L. Ed. 2d 835, 109 S. Ct. 2180 (1989); Snyder v. Baumecker, 708 F. Supp. 1451, 1452 n.6 (D.N.J. 1989).

 B. The Fair Credit Reporting Act

 Congress enacted the FCRA to "insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer's right to privacy." 15 U.S.C. § 1681(a)(4). For example, the FCRA permits consumer reporting agencies to provide subscribers with consumer credit reports only for particular purposes, including credit, licensing, employment, or insurance purposes. § 1681b(3)(A-D). Additionally, a credit reporting agency may issue a report to a person the agency believes "has a legitimate business need for the information in connection with a business transaction involving the consumer." § 1681b(3)(E). Thus, an agency's reasonable belief as to the report's purpose determines whether the agency may lawfully issue the report to the requesting party. See Popik v. American Int'l Mortgage Co., 936 F. Supp. 173, 176 (S.D.N.Y. 1996) (agency provides report based on expectation that requesting party will use report for purpose permitted by FCRA).

 In addition to regulating the conduct of credit reporting agencies, the FCRA provides a mechanism to monitor and limit the actions of parties who request credit information from credit reporting agencies. To that end, the statute imposes criminal and civil penalties on persons who violate specific provisions of the Act. See §§ 1681n-q. In particular, sections 1681n and 1681o establish civil liability for willful and negligent noncompliance with any requirement of section 1681. §§ 1681n-o. Section 1681q, in turn, provides for criminal penalties for obtaining consumer information under false pretenses. § 1681q.

 Finally, the court notes that the parties to this motion do not dispute that the report obtained from Credit Bureau Associates is a "consumer report" subject to the ...


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