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Fumelus v. Experian Information Solutions Inc.

United States District Court, D. New Jersey, Camden Vicinage

April 5, 2019

BETSY FUMELUS, Plaintiff,
v.
EXPERIAN INFORMATION SOLUTIONS, INC., and DIAMOND RESORTS, Defendants. SANDY ESPERANCE, Plaintiff,
v.
EXPERIAN INFORMATION SOLUTIONS, INC., and DIAMOND RESORTS, Defendants.

          THE KIM LAW FIRM, LLC By: Richard H. Kim, Esq. Counsel for Plaintiffs

          COOPER LEVENSON, P.A. By: William S. Donio, Esq. Yolanda N. Melville, Esq. Counsel for Defendant Diamond Resorts

          OPINION Dkt No. 22

          RENÉE MARIE BUMB, U.S.D.J.

         Plaintiffs, sisters Betsy Fumelus and Sandy Esperance, bring these Fair Credit Reporting Act suits against Experian Information Solutions, Inc., a credit reporting agency, and Diamond Resorts, a credit information furnisher.[1] Presently before the Court are Diamond Resorts' motions, pursuant to Fed.R.Civ.P. 12(b)(6), to dismiss Plaintiffs' claims that Diamond Resorts willfully and negligently violated 15 U.S.C. § 1621s-2(b) (Count Two of the Amended Complaints).[2] For the reasons stated herein, the motions will be denied.

         I.

         The underlying debt at issue is a mortgage note for a timeshare in both Plaintiffs' names. (Amend. Compls ¶ 11 n. 1) The Amended Complaints assert that Defendants Experian and Diamond Resorts “repeatedly reported” three inaccuracies concerning the debt. (Id. ¶ 7)

         Allegedly, Diamond Resorts furnished false information stating that: (1) Plaintiffs' “financing obligations are owed to [Diamond Resorts] instead of Tempus Palms”; (2) “the tradeline is ‘open' when [Diamond Resorts] has already represented that the tradeline was ‘charged off'”; and (3) the outstanding balance on the debt is greater than it actually is. (Amend. Compls ¶¶ 9-11) All three of these alleged inaccuracies allegedly appeared, repeatedly, on Plaintiffs' Experian credit reports. (Id. ¶ 12)

         Plaintiffs allege that they “disputed the inaccurate information with both [Experian] and [Diamond Resorts]” (Amend. Compls ¶ 12), but the “Defendants continue to report the inaccurate information.” (Id. ¶ 13)

         II.

         On a Rule 12(b)(6) motion, the Court must decide whether the complaint “contain[s] 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) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In evaluating plausibility, the Court “disregard[s] rote recitals of the elements of a cause of action, legal conclusions, and mere conclusory statements. A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Hassen v. Gov't of V.I., 861 F.3d 108, 114-15 (3d Cir. 2017) (internal citations and quotations omitted).

         III.

         Diamond Resorts' various arguments in support of its Motions to Dismiss may be distilled into two: (A) the claims against it fail because the Amended Complaints do not plead that Diamond Resorts received a notice of dispute from Experian, which Diamond resorts asserts is an “essential element” of a § 1681s-2(b) claim; and (B) the information that Diamond Resorts furnished was accurate.

         A.

         Diamond Resorts is correct that it can only be liable under § 1681s-2(b) if it received a notice from Experian, rather than receiving a dispute directly from Plaintiffs. SimmsParris v. Countrywide Financial Corp., 652 F.3d 355, 358 (3d Cir. 2011) (“Notice under § 1681i(a)(2) must be given by a credit reporting agency, and cannot come directly from the consumer.”); see also Harris v. Pennsylvania Higher Educ. Assistance Agency/Am. Educ. Servs., 696 Fed.Appx. 87');">696 Fed.Appx. 87, 91 (3d Cir. 2017) (“A consumer may certainly notify a furnisher/creditor directly about his dispute but there is no private cause of action under § 1681s-2(b) for a furnisher's failure to properly investigate such a dispute.”) (citing SimmsParris). But it does not necessarily follow-- as Diamond Resorts asserts-- that Plaintiffs must explicitly plead that Experian notified Diamond Resorts of Plaintiffs' disputes. The FCRA, 15 U.S.C. ยง 1681i(a)(2), requires all credit reporting agencies, upon receiving a consumer dispute, to notify the furnisher of the alleged inaccurate information. Therefore, at the pleadings stage, the Amended Complaints' allegation that Plaintiffs disputed the alleged ...


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