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Sprague v. Salisbury Bank & Trust Co.

United States District Court, D. Connecticut

September 5, 2019



          Hon. Vanessa L. Bryant United States District Judge.

         Plaintiffs Robert C. Sprague and C. Robin Ziegler bring the instant action alleging claims arising out of Defendant Salisbury Bank and Trust Company's reports to credit agencies, which concerned Plaintiffs' mortgage with Defendant. In their Amended Complaint, Plaintiffs bring four (4) claims against Defendant for its conduct, including violation of the Fair Credit Reporting Act (15 U.S.C. § 1681, et seq.) (“FCRA”), violation of the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. §§ 42-110a et seq. (“CUTPA”), defamation, and infliction of emotional distress. [ECF No. 22]. Defendant now moves to dismiss all claims against it under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. [ECF No. 28]. For the following reasons, the motion is GRANTED.


         For the purposes of the motion to dismiss, the Court assumes the following facts set forth in the Amended Complaint, filed October 22, 2018, [ECF No. 22], to be true. In the Amended Complaint, Plaintiffs allege that they borrowed $109, 600 from Defendant to purchase a multi-family home. Id. ¶ 6. In 2004, Plaintiffs refinanced their mortgage by borrowing $250, 000 from Defendant. Id. ¶ 7. After Defendant initiated foreclosure proceedings against Plaintiffs in August 2011, “the [state court] ordered a Judgment In Strict Foreclosure in favor of Defendant. . . ” on May 14, 2012. Id. ¶¶ 8-10. Plaintiffs and Defendant stipulated to a $40, 000 deficiency judgment, which the state court granted on April 28, 2014. Id. ¶¶ 11-14.

         “On or about February 15, 2016, Plaintiff Sprague ordered a credit report (‘2016 Report').” Id. ¶ 15. Plaintiffs learned from the 2016 Report that Defendant was “reporting inaccurate information to the credit reporting agencies [“CRAs”] . . . that the mortgage on the foreclosed house was still open and payments had not been made in more than two years.” Id. ¶ 16. “Plaintiffs notified Defendant of the error, ” and “[o]n March 7, 2016, Defendant sent Plaintiffs a letter[, ]” which was attached to the Amended Complaint, noting the error in their report to the CRAs and stating that in their future reports they would report Plaintiffs mortgage as “closed.” Id. ¶¶ 17-18. Defendants did not promise to report the mortgage paid in full or not to report the deficiency judgment. “Plaintiffs subsequently learned that Defendant did not correct the erroneous information until November 30, 2016.” Id. ¶ 19.

         From the factual record above, Plaintiffs allege, in “Count One: Violation of the [FCRA], ” that Defendant, as a “furnisher” of information to CRAs, “negligently and willfully failed to perform a reasonable reinvestigation and correction of inaccurate information [and] engaged in behavior prohibited by [the] FCRA by failing to correct errors in the information that it provided to credit reporting agencies after Plaintiffs notified Defendant of the error.” Id. ¶¶ 20-21, 23. Plaintiffs allege that because of Defendant's failure to correct Plaintiff's credit information following Plaintiff's notification they “have refrained from applying for new credit or more favorable terms on existing credit lines and have suffered psychological, emotional, and financial harm, as well as expenses in challenging Defendant's false information.” Id. ¶ 28.

         In Count Two, Plaintiffs allege from these actions that Defendant violated CUTPA, “in that its actions were unfair and deceptive, immoral, unethical, oppressive and unscrupulous, caused substantial injury to a consumer and constitute[d] a violation of the policy of this state, ” causing Plaintiffs to have “suffered an ascertainable loss.” Id. ¶¶ 29-30.

         In Count Three, Plaintiffs allege that “Defendant's reporting of information that it knew to be incorrect defamed Plaintiffs. . . [and a]s a result of Defendant's defamation, Plaintiffs have suffered an ascertainable loss.” Id. ¶¶ 29-30.

         Finally, in Count Four, Plaintiffs allege that “Defendant's reporting of information that it knew to be incorrect caused Plaintiffs emotional distress. . . [and a]s a result of Defendant's infliction of emotional distress, Plaintiffs have suffered an ascertainable loss.” Id. ¶¶ 29-30.

         Plaintiffs seek compensatory damages, punitive damages for violation of 15 U.S.C. § 1681n, reasonable attorneys' fees pursuant to 15 U.S.C. § 1681o, punitive damages and reasonable attorneys' fees pursuant to CUTPA, the costs of suit, and “[s]uch other and further relief as at law or equity the Court may ascertain.” Id. Plaintiffs' “claim and demand” for Relief §§ 1-7.

         On November 19, 2018, Salisbury filed a Motion to Dismiss Plaintiff's Amended Complaint, [ECF No. 28], which Plaintiffs responded to on July 18, 2019, [ECF No. 43] after delay associated with Plaintiffs' three motions for extension of time to respond, [ECF Nos. 29, 31, 33], and Plaintiffs' two motions to amend the complaint, which the Court denied. [ECF No. 35, 38]. Defendant filed its Reply Brief on July 31, 2019. On August 5, 2019, Plaintiffs filed a motion for leave to file a sur-reply, [ECF No. 47], which Defendant opposed on August 19, 2019. [ECF No. 48].

         Legal Standard

         To survive a motion to dismiss, a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In considering a motion to dismiss for failure to state a claim, the Court should follow a “two-pronged approach” to evaluate the sufficiency of the complaint. Hayden v. Paterson, 594 F.3d 150, 161 (2d Cir. 2010). “A court ‘can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.'” Id. (quoting Iqbal, 556 U.S. at 679). “At the second step, a court should determine whether the ‘wellpleaded factual allegations,' assumed to be true, ‘plausibly give rise to an entitlement to relief.'” Id. (quoting Iqbal, 556 U.S. at 679). “The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678 (internal quotations omitted).

         In general, the Court's review on a motion to dismiss pursuant to Rule 12(b)(6) “is limited to the facts as asserted within the four corners of the complaint, the documents attached to the complaint as exhibits, and any documents incorporated by reference.” McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir. 2007). The Court may also consider “matters of which judicial notice may be taken” and “documents either in plaintiffs' possession or of which plaintiffs had knowledge and relied on in bringing suit.” Brass v. Am. Film Techs., Inc., 987 F.2d 142, 150 (2d Cir. 1993); Patrowicz v. Transamerica HomeFirst, Inc., 359 F.Supp.2d 140, 144 (D. Conn. 2005).


         A. Fair Credit Reporting Act (15 U.S.C. § 1681, et seq.) (Count 1)

         “The Fair Credit Reporting Act. . . regulates credit reporting procedures to ensure the confidentiality, accuracy, relevancy, and proper utilization of consumers' information.” Longman v. Wachovia, 702 F.3d 148, 150 (2d Cir. 2012) (citing 15 U.S.C. § 1681(b)). Under Section 1681s-2, “several duties [are imposed] on those who furnish information to consumer reporting agencies [(hereinafter ‘furnishers')].” Id. at 150-51. “Among these are duties to refrain from knowingly reporting inaccurate information, see § 1681s-2(a)(1), to correct any information they later discover to be inaccurate, see § 1681s-2(a)(2), and to investigate a dispute filed directly with [them], see § 1681s-2(a)(8).” Moorer v. U.S. Bank N.A., No. 3:17-cv-56 (VAB), 2018 WL 587319, at *22 (D. Conn. Jan. 29, 2018) (internal citation omitted); Longman, 702 F.3d at 151. Further, after a credit reporting agency notifies a furnisher of a consumer's dispute, the furnisher has a duty to investigate the disputed consumer information. See 15 U.S.C. § 1681s-2(b); Reid v. Fifth Third Bank, No. 6:15-CV-191, 2015 WL 13158511, at *3 (N.D.N.Y. April 7, 2015).

         Defendant first argues that Plaintiffs' claims under the FCRA should be dismissed because they fail “to identify a proper subsection under which to assert a claim.” [Dkt. 28 at 6]. Second, Defendant argues that to the extent that Plaintiffs “allege a violation of § 1681s-2(a) of the FCRA, [the claim] must be dismissed with prejudice because there is no private right of action under that subsection of the FCRA.” Id. at 7. Further, Defendant argues that Plaintiffs fail to state a claim under § 1681s-2(b), because “Plaintiffs have not alleged that a consumer reporting agency informed Defendant of their alleged dispute.” Id. at 9. The Court agrees with Defendant's second and third arguments and DISMISSES Count 1 of the amended complaint for the following reasons.

         1. Inadequate Identification of the Correct Subsection

         Defendant cites cases dismissing complaints that fail to identify which subsection of the FCRA the plaintiff is proceeding under. These cases are no help to Defendant, however, because each was a dismissal without prejudice to amend the complaint. Here, dismissing in this fashion is unnecessary because Plaintiffs make clear in their opposition to Defendant's Motion to Dismiss the section under which they are ...

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